HomeMy WebLinkAboutAgenda Packet 2019_03_26
City of Chula Vista
Meeting Minutes -Draft
Tuesday, October 23, 20185:00 PM Council Chambers
276 4th Avenue, Building A
Chula Vista, CA 91910
REGULAR MEETING OF THE CITY COUNCIL
CALL TO ORDER
A regular meeting of the City Council of the City of Chula Vista was called to order at 5:10 p.m. in the Council Chambers,
located in City Hall, 276 Fourth Avenue, Chula Vista, California.
ROLL CALL:
Present:Councilmember Aguilar, Deputy Mayor Diaz, Councilmember McCann, Councilmember
Padilla and Mayor Casillas Salas
Also Present: City Manager Halbert, City Attorney Googins, City Clerk Bigelow, and Deputy City Clerk Kansas
PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE
Councilmember Padilla led the Pledge of Allegiance.
SPECIAL ORDERS OF THE DAY
A. 18-0479PRESENTATION OF A PROCLAMATION COMMENDING CHRISTOPHER L.
LAWRENCE AS THE 2018 CHULA VISTA VETERAN OF THE YEAR
Mayor Casillas Salas announced that Item A would be continued to themeeting ofNovember 13, 2018.
B. 18-0475PRESENTATIONOF A PROCLAMATION RECOGNIZING BOOCHCRAFT,
MCMAHON STEEL AND SOUTHCOAST WELDING & MANUFACTURING AND
THEIR CONTRIBUTIONS TO THE LOCAL ECONOMY AND RECOGNIZING
OCTOBER 2018 AS MANUFACTURING MONTH IN THE CITY OF CHULA VISTA
Economic Development Director Crockett spoke in recognition of the manufacturing companies. Mayor Casillas Salas
read the proclamation, and Deputy Mayor Diaz and Councilmembers McCann and Aguilar presented them to the
manufacturing companies.
CONSENT CALENDAR (Items 1 -6)
Mayor Casillas Salas announced that Item 4 would be removed from the consent calendar and continued to the meeting
of November 13, 2018.
1. 18-0476APPROVAL OF MINUTES of May 15, and 22, 2018.
Recommended Action: Council approve the minutes.
City of Chula VistaPage 1
City CouncilMeeting Minutes –DraftOctober 23, 2018
2. 18-0495A. ORDINANCE NO. 3442 OF THE CITY OF CHULA VISTA AMENDING
VARIOUS SECTIONS OF TITLE 19 “PLANNING AND ZONING” OF THECITY
OF CHULA VISTA MUNICIPAL CODE TO ADDRESS COMPLIANCE WITH
STATE LAWS GOVERNING SUPPORTIVE RESIDENTIAL USES, AS DEFINED
IN CHAPTER 19.04 “DEFINITIONS,” AND FOUND IN CHAPTERS 19.14
“ADMINISTRATIVE PROCEDURES -PERMITS -APPLICATIONS -HEARINGS
-APPEALS,” 19.16“EXCEPTIONSANDMODIFICATIONS,” 19.20
“AGRICULTURAL ZONE,” 19.28 “R-3 -APARTMENT RESIDENTIAL ZONE,”
19.38 “C-V -VISITOR COMMERCIAL ZONE,” 19.40 “C-T -THOROUGHFARE
COMMERCIAL ZONE,” 19.44 “I-L -LIMITED INDUSTRIAL ZONE,” 19.48 “P-C -
PLANNED COMMUNITY ZONE,” 19.54 “UNCLASSIFIED USES,” 19.58 “USES,”
AND 19.62 “OFF-STREET PARKING AND LOADING” TO DEFINE AND
ESTABLISH PROCEDURES TO PERMIT EMERGENCY SHELTERS, SINGLE
ROOM OCCUPANCY RESIDENCES, TRANSITIONAL AND SUPPORTIVE
HOUSING, QUALIFIED EMPLOYEE HOUSING, AND RESIDENTIAL FACILITIES
(SECOND READING AND ADOPTION)
B. ORDINANCE NO. 3443 OF THE CITY OF CHULA VISTA AMENDING CHULA
VISTA MUNICIPAL CODE CHAPTER 15.20 “HOUSING CODE” TO DEFINE
SINGLE ROOM OCCUPANCY RESIDENCES, TO REDEFINE HOTEL/MOTEL,
AND TOREQUIRE AN ANNUAL HOUSING PERMIT FOR SINGLE ROOM
OCCUPANCY RESIDENCES (SECOND READING AND ADOPTION)
Recommended Action: Council adopt the ordinances.
3. 18-0404RESOLUTION NO. 2018-214 OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA AUTHORIZING THE SUBMITTAL OF AN APPLICATION FOR THE
CALRECYCLE RUBBERIZED PAVEMENT GRANT PROGRAM FOR FISCAL
YEAR 2018-2019, AUTHORIZING THE DIRECTOR OF ENGINEERING AND
CAPITAL PROJECTS OR HIS DESIGNEE TO SECURE GRANT FUNDS AND
IMPLEMENT THE APPROVED GRANT PROJECT FOR A PERIOD OF THREE
YEARS
Recommended Action: Council adopt the resolution.
Item 4 was removed from the Consent Calendar.
5. 18-0474RESOLUTION NO. 2018-215 OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA ACCEPTING $18,500 FROM THE DEPARTMENT OF ALCOHOLIC
BEVERAGE CONTROL AND APPROPRIATING SAID FUNDS TO THE POLICE
GRANTS SECTION OF THE STATE GRANTS FUND (4/5 VOTE REQUIRED)
Recommended Action: Council adopt the resolution.
6.18-0497ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHULA VISTA
MUNICIPAL CODECHAPTER 2.63 -“MEASURE A” CITIZENS’ OVERSIGHT
COMMITTEE TO ADD ONE DESIGNATED MEMBER FROM THE CHULA VISTA
MIDDLE MANAGEMENT/PROFESSIONAL (MM/PROF) EMPLOYEE GROUP
(FIRST READING)
Recommended Action: Council place the ordinance on first reading.
City of Chula VistaPage 2
City CouncilMeeting Minutes –DraftOctober 23, 2018
Approval of the Consent Calendar
ACTION:A motion was made by Councilmember McCann, seconded by CouncilmemberAguilar, to approve
staff's recommendations on the above Consent Calendaritems, headings read, text waived. The
motion carried by the following vote:
Yes:
5 –Aguilar, Diaz, McCann, Padilla and Casillas Salas
No:0
Abstain:0
ITEMS REMOVED FROM THE CONSENT CALENDAR
4. 18-0463A.RESOLUTION NO. 2018-229 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE PURCHASE OF ELECTRIC VEHICLES
FROM NATIONAL AUTO FLEET GROUP IN ACCORDANCE WITH
SOURCEWELL CONTRACT NUMBER 120716-NAF THROUGH THE CLIMATE
MAYORS ELECTRIC VEHICLE PURCHASING PROGRAM IN AN AMOUNT
NOT-TO-EXCEED TWO MILLION DOLLARS ($2,000,000) THROUGH THE
TERM OF THE CONTRACT (JANUARY 2021)
B.RESOLUTION NO. 2018-230 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE PURCHASE OF HEAVY-DUTY AND
SPECIALIZED VEHICLES FROM NATIONAL AUTO FLEET GROUP IN
ACCORDANCE WITH SOURCEWELL CONTRACT NUMBER 081716-NAF IN
ANAMOUNT NOT-TO-EXCEED FOUR MILLION FIVE HUNDRED THOUSAND
DOLLARS ($4,500,000) THROUGH THE TERM OF THE CONTRACT
(NOVEMBER 2020)
C. RESOLUTION NO. 2018-231 OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A 2-YEAR LEASE PURCHASE AGREEMENT WITH
NATIONAL COOPERATIVE LEASING IN ACCORDANCE WITH SOURCEWELL
CONTRACT NUMBER 032615-NCL FOR THE ACQUISITION OF THIRTY-FOUR
(34) ELECTRIC VEHICLES AND AUTHORIZING THE CITY MANAGER OR HIS
DESIGNEE TO EXECUTE THE FINAL PURCHASE AND LEASE AGREEMENT
Item 4was continued to themeeting ofNovember 13, 2018.
PUBLIC COMMENTS
JoAnn Fields, representing the Asian Pacific Islander Initiative, spoke regarding Filipino-American HistoryMonth and
U.S. Census 2020.
Damien Johnson, Chula Vista resident, expressed concernsregarding commercial marijuana activities.
ACTION ITEMS
7. 18-0269REPORT TO THE CHULA VISTA CITY COUNCIL UPDATING THE CITY
OPERATIONS SUSTAINABILITY PLAN IMPLEMENTATION EFFORTS
Environmental Sustainability Manager Wisniewski, Park Manager Martinez, Environmental ServicesManager
Medrano, Stormwater Program Manager Soriano, Fleet Manager Knapp, and Senior Civil EngineerSalsman gave a
presentation on the item.
City of Chula VistaPage 3
City CouncilMeeting Minutes –DraftOctober 23, 2018
ACTION:A motion was made by Councilmember McCann, seconded by CouncilmemberAguilar, to accept
the report, heading read, text waived. The motion carried by the following vote:
Yes:5 –Aguilar, Diaz, McCann, Padilla and Casillas Salas
No:0
Abstain:0
CITY MANAGER’S REPORTS
City Manager Halbert spoke regarding a pilot drone project implemented in the Police Department.
MAYOR’S REPORTS
Mayor Casillas Salas spoke regarding the success of the Beautify Chula Vista eventand reportedonher attendance
at a recent SANDAGpublic outreach meeting.
COUNCILMEMBERS’ COMMENTS
Councilmembers McCann, Padilla and Aguilar spoke regarding the success of the Beautify Chula Vistaevent.
Deputy Mayor Diaz spoke regardinghis prison ministry work.
COUNCILMEMBERAGUILAR
8. 18-0498RESOLUTION NO. 2018-216 OF THE CITY COUNCIL OF THE CITY OFCHULA
VISTA IN SUPPORT OF PREVENTING GUN VIOLENCE
Councilmember Aguilar presented information on the item.Deputy Mayor Diaz distributed written communications.
Council discussion ensued.
ACTION:A motion was made by Councilmember Aguilar, seconded by CouncilmemberMcCann, to adopt
Resolution No. 2018-216, as amended to strike the third and fourth recitalsand to revise the
enactment clause to add reference to supporting County resourcesand add the County of San
Diego as a recipient of a copy of the resolution.The heading was read, text waived. Themotion
carried by the following vote:
Yes:3 –Aguilar, Diaz, and McCann
No:2 –Padilla and Casillas Salas
Abstain:0
CITY ATTORNEY'S REPORTS
9. 18-0496Report on City options for participation in the defense of SB54, and related state
law enactments, in the case of the United States v. the State of California (Case
No. 2:18-cv-00490-JAM-KJN), and possible City Council action regarding same
City Attorney Googins spoke regarding the item.
The following members of the public spoke in support of the Council joining the amicus brief in support ofthe State of
California:
-Maggie Baker,and she also submitted written documentation
-Kathy Cappos Hardy
-Luz Maria Lopez
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City CouncilMeeting Minutes –DraftOctober 23, 2018
-Nancy Sandweiss
-Becky Thimm
-Alicia Riley
-Patricia Huffman
-Pedro Rios, representing American Friends Service Committee
-Victor Frankel
-Dulce Garcia, representing San Diego Border Dreamers.
Cynthia Alvarado submitted a request to speak but was not present when called.
ACTION:A motion was made by Councilmember Padilla, seconded by CouncilmemberAguilar, todirect the
City Attorney’s office to take necessary action for the City to join the primary amicus brief
coauthored by O'Melveny & Myers LLPin support of the State’s defense in United States v. State
of California. The motion carriedby the following vote:
Yes:
3 –Aguilar, Padilla, and Casillas Salas
No:2 –Diaz and McCann
Abstain:0
CLOSED SESSION
City Attorney Googins announced thatthe Council would convene in closed session to discuss the itemlisted below.
Mayor Casillas Salas recessed the meeting at 7:10 p.m. The Council reconvened in Closed Session at7:20 p.m., with
all members present.
Pursuant to Resolution No. 13706 and Council Policy No. 346-03, Official Minutes and records of action
taken during Closed Sessions are maintained by the City Attorney.
10. 18-0491CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTINGLITIGATION
PURSUANT TO GOVERNMENT CODE SECTION 54956.9(d)(1)
Name of case: Yolanda Sanchez v. City of Chula Vista, et al., San DiegoSuperior
Court, Case No. 37-2017-35896-CU-PA-CTL
ACTION:Reportable action pending finalization of settlement.
ADJOURNMENT
At 7:33 p.m., Mayor Casillas Salas adjourned the meeting to the regular City Council meeting onNovember 13, 2018,
at 5:00 p.m., in the Council Chambers.
_______________________________
Kerry K. Bigelow, MMC, City Clerk
City of Chula VistaPage 5
March 26, 2019File ID: 18-0518
TITLE
A.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, DECLARING ITS INTENTION
TO ESTABLISH COMMUNITY FACILITIES DISTRICT NO. 14M-2 (EASTERN URBAN
CENTER/MILLENIA) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX THEREIN TO FINANCE
CERTAIN SERVICES AND SETTING THE PUBLIC HEARING TO CONSIDER THE ESTABLISHMENT OF
THE PROPOSED DISTRICT
B.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, ADOPTING A BOUNDARY MAP
SHOWING THE BOUNDARIES OF THE TERRITORY PROPOSED FOR THE INCLUSION IN PROPOSED
COMMUNITY FACILITIES DISTRICT NO. 14M-2 (EASTERN URBAN CENTER/MILLENIA)
RECOMMENDED ACTION
Council adopt the resolutions.
SUMMARY
The City of Chula Vista is conductingproceedings to consider the formation of Community Facilities District
No. 14M-2(Eastern Urban Center/Millenia) (“CFD No. 14M-2” or the “District”). CFD No. 14M-2will fund
the maintenance and replacement of:(a) public roadway frontages and medians, public transit facilities,
and the pedestrian bridge over Eastlake Parkway (including landscaping, enhanced paving, rodent control,
trash receptacles, graffiti removal, etc.); (b) public urban parks (including planting/irrigation, site
amenities/features, athletic facilities, etc.); and (c) facilities that are directly related to storm water
detention and water quality control. The City has retained the services of Spicer Consulting Group(SCG) as
special tax consultant andBest, Best and Krieger, LLP (BBK) as legal counsel to provide assistance during
the proceedings. This action initiates the formal proceedings to consider the establishment of CFD No. 14M-
2.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity for compliance with the California
Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under
Section 15378 of the State CEQA Guidelines because the creation of government funding mechanism is not
considered a project; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is
not subject to CEQA. Thus, no environmental review is required.
v.001 Page|1
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
Background
On February 11, 2014, the City Council approved Resolution No. 2014-022 to form and establish
Community Facilities District (CFD) No. 14M (Eastern Urban Center/Millenia).CFD No. 14M (“the original
CFD”) was established to levy taxes to fund the maintenance and replacement of specifiedfacilities listedin
the Summary section of this agenda statement. The original CFD provided for two improvement areas.
Improvement Area 1 was coterminous with the boundary of the original CFD and provided for the
maintenance/replacement of:(a) public roadway frontages and medians, public transit facilities, and the
pedestrian bridge over Eastlake Parkway (including landscaping, enhanced paving, rodent control, trash
receptacles, graffiti removal, etc.); (b) public urban parks (including planting/irrigation, site
amenities/features, athletic facilities, etc.); and (c) facilities that are directly related to storm water
detention and water quality control. Improvement Area 2 was limited to the boundaries of the public urban
parks within the Eastern Urban Center/Milleniadevelopment(Millenia). Special taxes levied on
Improvement Area 2 were allocated to urban park facilities only. Millenia is currently under development
and the special tax is being levied pursuant to the adopted Rate and Method of Apportionment (the “RMA”)
for the original CFD.
During the fall of 2016, the City began issuingpermits for a new residential product type in the
southeastern portion of Millenia. Thisnewproduct, referred to as a “detached condominium,” is not
defined in the RMAprepared for the original CFD,and therefore no special taxes may be levied on this
product. To date, approximately 149 “detached condominium” units have been permitted. The loss in
special tax revenue resulting from theuntaxed “detached condominium” units, together with shifts in the
number of units amongother residential product types, totals approximately $35,000annually,in fiscal
1
year (FY)2018-2019dollars.
Upon identifying this issue, the City promptly convened a team to determine the best path forward. After
thorough consideration of all alternatives, the City selectedan overlay CFD as the preferred taxing
mechanism. The City retained SCG and BBK to assist in the formation ofthe new overlay CFD (i.e., CFD No.
14M-2), with the following initial objectives:
1.Mitigate the projected$35,000 annual funding shortfall; and
2.Incorporate the “detached condominium” units into a new RMAto authorizethelevy of special
taxes on future units of this type.
After ensuring that no existing residents were improperly taxed, the team worked with Meridian
Development and their consultants to review the original CFD budget. The objective of this review was to
determinethe extent of the specialtax shortfall in the original CFD for the purposes of establishingnew tax
1
Using FY 2018-2019 dollars allows for the determining the new tax rates for CFD No. 14M-2 to maintain consistency
with the tax rates in CFD No. 14MImprovement Area 1. Both maximum tax rates will escalate at the same rate for FY
2019-2020 upon determination of the annual maximum tax escalator.
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rates for CFD No. 14M-2. Duringthis review, it was determined that several facilities contained in the
original CFD’s budgethadsince been removed, reconfigured, or reduced in scope. These changes, together
with the budget implications in FY 2013-2014dollars, are presented in Table 1 below.
Table 1
Original CFD BudgetUpdated Facilities Budget
(FY 13-14 $)InformationSavings
(FY 13-14$)(Updated
–Original)
UnitAnnualAnnual
FacilityDescriptionCostQuantityCostQuantityCost
Inspection/Ongoing
$591.42154$91,079130$76,885($14,194)
Maintenance
Bioretention
Basins
Replacement (3 times
$50.72154$7,810130$6,594($1,216)
per 100 years)
Street M
Underground -$5,4452$10,8900$0($10,890)
Detention
Periodic Inspection and
$1,0007$7,0000$0($7,000)
Maintenance
New
BioretentionAdd 2” Mulch$0.3520,910$7,3190$0($7,319)
Maintenance
Bioretention
Requirements
Annualized$0.3020,910$6,2730$0($6,273)
Replacement
Totals:$130,371$83,479($46,892)
Adjusting for inflation, budgetarysavings of approximately $51,313 is projected for the original CFD
(current dollars). These savings mitigatethe projected $35,000 shortfallin special tax revenues for the
original CFDin full.
Additional mitigation against future cost increases has also been identifiedin the original CFD, including a
seven percent (7%) maintenance reserveand approximately $22,345 budgeted for Wolf Canyon storm
water detention basins (the “basins”). The maintenance ofthe basins was included in both the original CFD
and CFD 12M (Otay Ranch Village 7). Taken together, the basin maintenance budgets in the two existing
CFDsexceed the total annual cost for theassociatedmaintenance activities. This budgetary redundancy
provides an additional buffer against future cost increases in excess of theannual indexingof the special
taxes.
Based on the above, staff does not recommend increasing the special tax rates provided in the original CFD,
as the identified budget savingsfully mitigate the shortfalland additional cost overrun buffers are
provided.CFD No. 14M-2 will establish a new rate for the “detached condominium” product(“Detached
Residential Property”) consistent with the benefit unit factors provided inthe original CFD’s RMA.
CFD No. 14M-2’s boundary map was designed to coincide with the limits of Improvement Area 1of the
original CFD. However, certain areas were excluded as described below:
1.“Detached condominiums” permitted prior to CFD No. 14M-2 were excluded; and
2.Units currently occupied, or projected to be occupied prior to the adoption of CFD No. 14M-2, were
alsoexcluded.
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Also, the five public urban parks included in Improvement Area 2 are not within the boundaries of CFD No.
14M-2.
The specific characteristics of CFD No. 14M-2 are described in the paragraphs that follow.
Description of CFD No. 14M-2
On January 13, 1998, Council adopted the “City of Chula Vista Statement of Goals and Policies regarding the
establishment of Community Facilities Districts” (the “Goals and Policies”). The approval of this document
ratified the use of CFDs as a public financing mechanism for (1) the construction and/or acquisition of
public infrastructure, and (2) the financing of authorized public services. Taxes levied by maintenance
districts, such as CFD No. 14M-2, are currently excluded from the 2% maximum tax criterion set forth in the
Goals and Policies.
On April 28, 1998, Council, acting under its Charter authority, enacted the “Chula Vista Community
Facilities District Ordinance” (the “Ordinance”). The Ordinance adopted the Mello-Roos Act with
modifications to accomplish the following: (1) incorporate all maintenance activities authorized by the
“Landscaping & Lighting Act of 1972” (the “1972 Act”); (2) include certain maintenance activities not listed
in the Mello-Roos Act or the 1972 Act; and (3) establish an operating reserve fund for open space districts.
The proposed RMA for CFD No. 14M-2 (Attachment 1) accounts for the considerations and conditions
described above and is recommended for Council approval.
Area of Benefit
CFD No. 14M-2 encompasses a portion of theMillenia project, a 206-acre Urban Village located in the
southeastern portion of the City of Chula Vista. Millenia is currently being developed, and at buildout will
include up to 2,983 multi-family residential unitsand 3.487 million square feet of commercial uses,
consisting of office, hospitality, retail, and civic uses. Millenia will also accommodate a fire station (1.07
acres), a public school (8.54acres),and fivepublic urbanparks (10.91acres).The District covers
approximately 82.59 acres (or approximately 40%) of the Millenia project. Of the 82.59 acres, 53.63 acres
(or approximately 65%) are owned by SLF IV-Millenia, the master developer of the Millenia project. A
reduced copy of the boundary map is presented in Attachment 2.
The City willremove CFD 14M-2 properties from the original CFD through recordation ofa notice of
cessation of special tax for the original CFD. This action will remove the original CFD from title for the
impacted properties.
Taken together, the budgets for CFD No. 14M-2, CFD 14M Improvement Area 1, and CFD 14M Improvement
Area 2 will be consistent with the total budget of the original CFD, accounting for the reduction, removal,
and reconfiguration of storm water facilities detailed in Table 1, and the addition of $22,000 per year in
administrative expenses for CFD No. 14M-2.
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Land Use Types
Consistent with the original CFD, the CFD 14M-2 RMA establishes tax rates for Developed Property,
Approved Property, Undeveloped Property, Taxable Property Owner Association Property, and Taxable
Community Purpose Facility (CPF) Property. Within the category of Developed Property, the proposed
RMAestablishes four land use classes: (1) Apartment Property; (2) Attached Residential Property; (3)
Detached Residential Property; and (4) Non-Residential Property. The Attached Residential Property land
use class will apply to parcels classified as Multi-Family Property in the original CFD. The Detached
Residential Property land use class will apply to the “detached condominium” product previously
discussed.
Description of the Improvements to be Maintained
The District will fund the maintenance and replacement of:(a) public roadway frontages and medians,
public transit facilities, and the pedestrian bridge over Eastlake Parkway (including landscaping, enhanced
paving, rodent control, trash receptacles, graffiti removal, etc.); (b) public urban parks (including
planting/irrigation, site amenities/features, athletic facilities, etc.); and (c) facilities that are directly related
to storm water detention and water quality control. The facilities to be maintained and replaced are
consistent with theImprovement Area 1facilities, as described in the original CFD’s RMA. A complete list of
maintenance servicesis presented in Attachment 3.
Cost Estimate
The estimated annual budget for CFD No. 14M-2 is approximately $360,186, as summarizedin Table 2
below.
Table 2
Annual
DescriptionBudget
Facility Maintenance$ 248,404
FacilityReplacement$ 64,942
CFD Administration$ 22,000
Maintenance Reserve$ 24,840
TotalAnnual$360,186
Budget
Attachment 4 contains a detailed annual budget for the District at build out.
Maximum Special Tax Rate
The maximum special tax ratesfor Developed Property in FY 2018-2019 are presented in Table 3 below.
Table 3
Land Use Maximum
TypeDescriptionSpecial Tax
1Apartment Property$206.82 per Dwelling Unit
2
2Attached Residential Property$275.76 per Dwelling Unit
2
See Multi-Family Property in the original CFD.
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3
3Detached Residential Property$344.70 perDwelling Unit
4Non-Residential Property$1,377.71 per Acre
In some instances,aDeveloped Property may contain more than one land use type(e.g. mixed-use
developments including a residential use above a non-residential use). The maximum special tax that may
be levied shall be levied only on the residential component of a mixed-use project.
The maximum special tax for Approved Propertyand Undeveloped Property is$4,359.00per acre.
Developed Taxable Property Owner Association Property and Taxable CPF Property will be classified as
Non-Residential Property, while undeveloped Taxable Property Owner Association Property and Taxable
CPF Property will be classified as Undeveloped Property.
All proposed rates are consistent with and/or proportional to the current maximum special tax rates in
CFD 14M Improvement Area1.
Collection of Taxes
The Method of Apportionment in the proposed RMA was designed to ensure taxes levied in Improvement
Area 1 of the original CFD and CFD 14M-2are consistent and proportional. An initial Overall Special Tax
Requirement will be calculated, equal to the Special Tax Requirement for CFD14M Improvement Area1.
The Developed Properties in both CFD14M Improvement Area1 andCFD 14M-2will then be assessed
proportionately up to 100% of the Maximum Special Tax for Developed Properties. If additional funds are
necessary to meet the Special Tax Requirement,then Approved Property, Undeveloped Property, Taxable
Property Owner Association Property, and Taxable CPF Propertymay be taxed. In all cases, the levy for
each land use class will be proportional between CFD 14M Improvement Area1 and CFD 14M-2. An
example levy calculation is provided as Attachment 5.
Resolutions
There are tworesolutions on tonight’s agenda, which, if adopted, will accomplish the following:
The RESOLUTION OF INTENTION is the jurisdictional resolution declaring the intention of the City Council
to establish the proposed CFDNo. 14M-2, authorize the levy of a Special Tax, order the preparation of a
Community Facilities District Report for CFD No. 14M-2, and set the time and place for the public hearing.
The RESOLUTION ADOPTING THE BOUNDARY MAP is the formal action adopting the map andsetting forth
the boundaries of the proposed CFDNo. 14M-2.
Future Actions
The public hearing and consideration of the adoption of a resolution forming and establishing CFD No.
14M-2, and submitting the authorization for the levy of special taxes to the qualified electors are scheduled
for the City Council meeting of May 7, 2019at 5:00 P.M.
3
New land use created with CFD 14M-2 to address “detached condominiums” constructed in Millenia project.
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DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Councilmembers and has found no property holdings
within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this
item does not present a disqualifying real property-related financial conflict of interest under California
Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t
Code §87100, et seq.).
Staff is not independently aware, and has not been informed by any City Councilmember, of any other fact
that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
In the current year, all costs of formation of the District will be borne by the original CFDand the ongoing
administration costs will be funded by the special tax levy of CFD No. 14M-2. The City will recover the full
cost of staff time expended in district formation and administration activities in perpetuity, resulting in no
net fiscal impact to the General Fund or Development Services Fund.
ONGOINGFISCAL IMPACT
In future years, the City will recover the full cost of staff time expended in administrativeactivities in
perpetuity, resulting in no net fiscal impact to the General Fund or Development Services Fund.
ATTACHMENTS
1.Rate and Method of Apportionment
2.Proposed Boundary Map
3.Description of Services
4.Cost Estimate
5.Example Levy Calculation
Staff Contact: Scott Barker, Transportation Engineer, Development Services Department
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RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 14M-2
(EASTERN URBAN CENTER/MILLENIA)
A Special Tax of Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)("CFD No. 14M-
2") of the City of Chula Vista shall be levied on all Taxable Property in CFDNo. 14M-2 and collected each
Fiscal Year commencing in Fiscal Year 2019-2020 in an amount determined through the application of the
rate and method of apportionment of the Special Tax set forth below. All such Taxable Property shall be
taxed for the purposes, to the extent, and in the manner herein provided. Taxable Property shall not be
subject to the Special Taxes of CFD No. 14M-2 until the lien of the special taxes of CFD No. 14M IA 1
(defined below) with respect to such Taxable Property has been cancelled.
A.DEFINITIONS
The terms hereinafter set forth have the following meanings:
"‘A’ Map"shall mean a master final subdivision or parcel map, filed in accordance with the Subdivision
Map Act (California Government Code Section 66410 et seq.) and the Chula Vista Municipal Code, which
subdivides the land or a portion thereof shown on a tentative map into “super block” lots corresponding
to units or phasing of combination of units as shown on such tentative map and which may further show
open space lot dedications, backbone street dedications and utility easements required to serve such
“super block” lots.
"Acre”or“Acreage"means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map,
or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final
Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent
map or instrument recorded in the Office of the County Recorder. In the event that parcel acreage
information is not available from the sources previously listed, San Diego County GIS data may be utilized.
The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560.
"Act"means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1,
Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses"means the actual or estimated costs incurred by the City, acting for and on
behalf of CFDNo. 14M-2 as the administrator thereof, to determine, levy and collect the Special Taxes
within CFD No. 14M-2, including salariesand benefits of City employees and a proportionate amount of
the City’s general administrative overhead related thereto, and the fees of consultants and legal counsel
providing services related to the administration of CFD No. 14M-2; the costs of collecting installments of
the Special Taxes within CFD No. 14M-2; and any other costs required to administer CFD No. 14M-2 as
determined by the City.
“Apartment Property” means a Dwelling Unit within a building comprised of attached residential Dwelling
Units available for rental by the general public, not for sale to an end user, and under common
management, as determined by the CFD Administrator.
"Approved Property" means all Assessor’s Parcels of Taxable Property: (i) that are included in an ‘A’ Map,
excluding lettered lots thereon, or a Final Subdivision Map, excluding lettered lots thereon, that were
City of Chula VistaPage 1
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
st
recorded prior to the March 1preceding the Fiscal Year in which the Special Tax is being levied, and (ii)
st
preceding the Fiscal Year in which the
that have not been issued a building permit prior to the March 1
Special Tax is being levied.
"Assessor's Parcel"means a lot or parcel shown in an Assessor's Parcel Map with an assigned assessor's
parcel number.
"Assessor's Parcel Map"means an official map of the Assessor of the County designating parcels by
assessor's parcel number.
"Attached Residential Property"means all Assessor’s Parcels of Developed Property for which a building
permit has been issued for a residential structure consisting of two or more residential Dwelling Units that
share common walls, including, but not limited to, duplexes, triplexes, townhomes, and condominiums,
as determined by the CFD Administrator.
"CFD Administrator"means an official of the City, or designee thereof, responsible for determining the
CFD No. 14M-2 Special Tax Requirement and providing for the levy and collection of the Special Taxes.
“CFDNo. 14M”means Community Facilities District No. 14M (Eastern Urban Center/Millenia established
by the City of Chula Vista under the Act and the CFD Ordinance.
“CFD No. 14M IA 1”means Improvement Area No. 1 of Community Facilities District No. 14M (Eastern
Urban Center/Millenia) established by the City of Chula Vista under the Actand the CFD Ordinance.
“CFD No. 14M IA 1 RMA” means the Rate and Method of Apportionment set forth in the Notice of Special
Tax Lien for CFD No. 14M IA 1 recorded in the Official Records of the San Diego County Recorder on
February 21, 2014, as Doc. #2014-0071300.
“CFD No. 14M IA 1 Special Tax Requirement” shall have the meaning given the term “Improvement Area
No. 1 Special Tax Requirement” in the CFD No. 14M IA 1 RMA.
“CFD No. 14M-2”means Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
established by the City of Chula Vista under the Actand the CFD Ordinance.
“CFD No. 14M-2 Special Tax Requirement”means that amount calculated in Section D. required in any
Fiscal Year for CFD No. 14M-2 to: (i) pay the Operating Fund Requirement; (ii) payany amounts required
to establish or replenish the Reserve Fund to the Reserve Fund Requirement; (iii) pay for reasonably
anticipated delinquent Special Taxes within CFD No. 14M-2 based on the delinquency rate for Special
Taxes levied in the previous Fiscal Year; less (b) a credit for funds available to reduce the annual Special
Tax levy,including the excess, if any, in the Reserve Fund above the Reserve Fund Requirement and any
amount remaining in the Operating Fund that is available to pay the Operating Fund Requirement in such
Fiscal Year.
“CFD No. 14M-2 Boundary Map” means a recorded map of the CFDNo. 14M-2which indicates the
boundaries of the CFDNo. 14M-2.
City of Chula VistaPage 2
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
“CFD Ordinance”meansthe City of Chula Vista Community Facilities District Ordinance, as originally
enacted and as subsequently amended pursuant to the powers reserved by the City under Sections 3, 5
and 7 of Article XI of the Constitution of the State of California
"City"means the City of Chula Vista.
"City Clerk" means the City Clerk for the City of Chula Vista or his or her designee.
"City Manager" means the City Manager for the City of Chula Vista or his or her designee.
"Community Purpose Facility Property"or"CPF Property" means all Assessors’ Parcels which are
classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No.
2452.
"Council"means the City Council of the City of Chula Vista, acting as the legislative body of the CFDNo.
14M-2.
"County"means the County of San Diego, California.
"Detached Residential Property"means all Assessor’s Parcels of Developed Property for which a building
permit has been or may be issued for purposes of constructing a detached Dwelling Uniton an Assessor’s
Parcel. Such Residential Unit does not or will not share a common wall with another residential Dwelling
Unit, as determined by the CFD Administrator.
"Developed Property"means all Taxable Property for which a building permit was issued prior to the
March 1st preceding the Fiscal Year in which the Special Tax is being levied.
"Dwelling Unit"means each separate residential dwelling unitthat comprises an independent facility
separate from adjacent residential dwelling units.
"Final Subdivision Map"means a subdivision of property creating buildable lots by recordation of a final
subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code Section
66410 et seq.), or recordation of a condominium plan pursuant to California Civil Code 4285,that creates
individual lots for which building permits may be issued without further subdivision and is recorded prior
to March 1 preceding the Fiscal Year in which the Special Tax is being levied.
"Fiscal Year"means the period starting July 1 and ending on the following June 30.
"Land Use Class"means any of the classes listed in Table 1.
"Maximum Special Tax"means the maximum Special Tax, determined in accordance with Section C
below, that may be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property.
"Mixed-Use Property"means all Assessor’s Parcels that have been classified by the City to allow both
Residential Property and Non-Residential Property uses on each such Assessor’s Parcel. For an Assessor’s
Parcel of Mixed-Use Property, only the Residential Land Use Class thereon is subject to taxation pursuant
to the provisions of Section C.
City of Chula VistaPage 3
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
"Non-Residential Property"means all Assessor’s Parcels of Developed Property for which a building
permit(s) has been issued for a structure or structures for non-residential use.
"Operating Fund" means a fund that shall be maintained by the City for CFD No.14M-2 for each Fiscal
Year to pay for the authorized maintenance services as described in CFD No. 14M-2 special tax report and
Administrative Expenses.
"Operating Fund Requirement"means, for any Fiscal Year, an amount equal to the budgeted costs for
CFD No. 14M-2. The budgeted costs for CFD No. 14M-2 shall equalthe budget costs of park maintenance,
landscape maintenance, street frontage maintenance, bio-retention maintenance, storm water
maintenance, and the maintenance, repair and replacement of the facilities and improvements, which
have been accepted and or maintained by the City during the current Fiscal Year; plus the budgeted
Administrative Expenses for the current Fiscal Year in which Special Taxes are levied.
“Overall Special Tax Requirement”means that amount required in any Fiscal Year to be included in the
CFD No. 14M-2 Special Tax Requirement and the CFD No. 14M IA 1Special Tax Requirement as determined
in Section D.
"Property Owner Association Property" means any property within the CFD No. 14M-2boundaries that
is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder
to, a property owner association, including any master or sub-association.
"Proportionately"means in a manner such that the ratio of the actual Special Tax levy to the Maximum
Special Tax is equal for all Assessor’s Parcels of Taxable Property within each Land Use Class.
"Public Property"means any property within CFD No. 14M-2 boundaries that has provided proof to the
City prior to March 1st preceding the Fiscal Year in which the Special Tax is being levied, that it is expected
to be used for any public purpose and is owned by or dedicated to the federal government, the State, the
County, the City or any other public agency.
"Reserve Fund"means a fund that shall be maintained for CFD No. 14M-2 for each Fiscal Year to provide
necessary cash flow for the first six months of each Fiscal Year, reserve capital to cover monitoring,
maintenance and repair cost overruns and delinquencies in the payment of Special Taxes within CFD No.
14M-2and a reasonable buffer to prevent large variations in annual Special Tax levies within CFD No.
14M-2.
"Reserve Fund Requirement"means an amount equal to up to 100% of the CFD No. 14M-2 Operating
Fund Requirement for any Fiscal Year.
"Residential Property"means all Assessor’s Parcels of Developed Property classified as Apartment
Property, Attached Residential Property, or Detached Residential Property for which a building permit(s)
has been issued for purposes of constructing one or more residential Dwelling Units.
"Special Tax" means the Special Tax levied pursuant to the provisions of sections D and E below in each
Fiscal Year on each Assessor's Parcel of Developed Property, Approved Property, and Undeveloped
Property in CFD No. 14M-2to fund theCFD No. 14M-2 Special Tax Requirement.
"State"means the State of California.
City of Chula VistaPage 4
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
“Taxable CPF Property”means all CPF Property which is not exempt from the Special Tax pursuant to
Section F below.
"Taxable Property"means, all of the Assessor's Parcels within the boundaries of CFD No. 14M-2 that are
not exempt from the Special Tax pursuant to law or as defined below under Tax-Exempt Property.
"Taxable Property Owner Association Property"means all Property Owner Association Property which is
not exempt fromthe Special Tax pursuant to Section F below.
"Tax-Exempt Property"means an Assessor's Parcel not subject to the Special Tax. Tax-Exempt Property
includes: (i) Public Property, or (ii) Property Owner Association Property excluding Taxable Property
Owner Association Property, or (iii) Assessor’s Parcels of Taxable CPF Property that is owned by a non-
st
profit organization and has provided proof to the City prior to the March 1preceding the Fiscal Year in
which the Special Tax is being levied of the organization’s non-profit status, or (iv) Assessor’s Parcels with
public or utility easements making impractical their utilization for other than the purposes set forth in the
easement.
"Undeveloped Property"means, for each Fiscal Year, all Taxable Property not classified as Developed
Property, Approved Property, Taxable Property Owner Association Property, or Taxable CPF Property.
B.ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year using the definitions above, each Assessor’s Parcel within CFD No. 14M-2 shall be
classified as Taxable Property or ExemptProperty. In addition, each Assessor’s Parcel of Taxable Property
shall be further classified as Developed Property, Approved Property, Undeveloped Property, Taxable
Property Owner Association Property, and TaxableCPF Property.
Each Assessor’s Parcel classified as Developed Property shall be further assigned to a Land Use Class as
specified in Table 1. The Land Use Class of each Assessor’s Parcel of Residential Property or Mixed-Use
Property shall be determined based on the records of the San Diego County Assessor, or other such
information provided by the City.
Taxable Property Owner Association Property and TaxableCPF Property shall be taxed as Non-Residential
Property when any such Assessor’s Parcel is classified as Developed Property. If any suchAssessor’s Parcel
is undeveloped,it shall be classified as Undeveloped Property.
C.MAXIMUM SPECIAL TAX RATE
1.Developed Property
TABLE 1
MAXIMUM SPECIAL TAX FOR DEVELOPED PROPERTY
Land Use Maximum
ClassDescriptionSpecial Tax(FY 2018/19)
1Apartment Property$206.82 per Dwelling Unit
2Attached Residential Property$275.76 per Dwelling Unit
City of Chula VistaPage 5
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
Land Use Maximum
ClassDescriptionSpecial Tax(FY 2018/19)
3Detached Residential Property$344.70 per Dwelling Unit
4Non-Residential Property$1,377.71 per Acre
Mixed-Use Property Land Use Classes
The Maximum Special Tax that may be levied on Mixed Use PropertyAssessor’s Parcel shall only be levied
on the Residential Property Land Use Class(es) located on that Assessor Parcel(s).
Sample Maximum Special Tax Calculation for Mixed Use Property
Under the proposed example, assume that Assessor’s Parcel Number 1 isclassified as a Mixed-Use
Property. Assessor’s Parcel Number 1 is a 2 Acre parcel that contains Non-Residential Property consisting
of 10,000 square feet of retail shops and Apartment Property consisting of 10 residential Dwelling Units.
The following table shows what the expected annual Maximum Special Tax would be for Assessor’s Parcel
Number 1.
No. of Non-Residential Residential
AssessorResidentialPropertyPropertyTotal Annual
Maximum Special Maximum
ParcelParcelDwellingMaximum Special
(1)
No.AcreageUnitsTaxTaxSpecial Tax
12.0010$0.00$2,068.20$2,068.20
(1)The Maximum Special Tax is based upon the initial Maximum Special Tax rates as defined in Table 1.
2.Approved Propertyand Undeveloped Property
The Maximum Special Tax for Approved Propertyand Undeveloped Property shall be $4,359.00per Acre.
Annual Escalation of Maximum Special Tax
On each July 1, commencing on July 1, 2019,the Maximum Special Tax for CFD No. 14M-2as shown in
Tables 1 above that may be levied on each Assessor’s Parcelof Taxable Propertyin CFD No. 14M-2shall
be adjusted by a factor equal to the greater of, the positive percentage change in the San Diego
Metropolitan Area All Urban Consumer Price Index (All Items) for the twelve-month period ending June 1
of the prior Fiscal Yearor 0%, provided the Maximum Special Tax shall never be less than the amounts
shown in Table 1.
D.CALCULATION OF OVERALL SPECIAL TAX REQUIREMENTPROPORTIONALITY
Each Fiscal Year, an Overall Special Tax Requirement for CFD No. 14M-2 and CFD No. 14M IA 1 shall be
calculated initially as the same amount as theCFD No. 14M IA 1Special Tax Requirement would have been
calculatedprior to the creation of CFD No. 14M-2.
Then, for purposes of the levy of Special Taxes within CFD No. 14M-2, the amount of the CFD No. 14M-2
Special Tax Requirement shall be an amount equal to the Overall Special Tax Requirement less the amount
City of Chula VistaPage 6
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
of the levy of special taxes in CFD No. 14M IA 1 on Developed Property at 100% of the Maximum Special
Tax (as such terms are defined in the CFD No. 14M IA 1 RMA).
If the amount of Developed Property Maximum Special Taxes that can be collected in that Fiscal Year
within CFD No. 14M-2 exceeds the CFD No. 14M-2 Special Tax Requirement, then the levy on Developed
Property in both CFD No. 14M IA 1 and CFD No. 14M-2shall be reduced Proportionatelyto the amount
required to fund the Overall Special Tax Requirement.
If the amount of Developed Property Maximum Special Taxes that can be collected in that Fiscal Year
within CFD No. 14M-2 is less than the CFD No. 14M-2 Special Tax Requirement, then all Approved Property
in both CFD No. 14M IA 1 and CFD No. 14M-2shall be taxed Proportionately, up to 100% of the applicable
Maximum Special Tax, as necessary to satisfy the Overall Special Tax Requirement, and the CFD No. 14M-2
Special Tax Requirement shall include such amount to be levied on Approved Property in CFD No. 14M-2.
If the combined amount of Developed Property and Approved Property Special Taxesthat can be collected
in that Fiscal Year within both CFD No. 14M IA 1 and CFD No. 14M-2 is less than the Overall Special Tax
Requirement, then all Undeveloped Property in both CFD No. 14M IA 1 and CFD No. 14M-2shall be taxed
Proportionately, up to 100% of the Maximum Special Tax, as necessary to satisfy the OverallSpecial Tax
Requirement, and the CFD No. 14M-2 Special Tax Requirementshall include such amount to be levied on
Undeveloped Property in CFD No. 14M-2.
If the combined amount of Developed Property, Approved Property, and Undeveloped Property Special
Taxesthat can be collected in that Fiscal Year within both CFD No. 14M IA 1 and CFD No. 14M-2 is less
than the OverallSpecial Tax Requirement, then all TaxableProperty Owner Association Property and
Taxable CPF Property in both CFD No. 14M IA 1 and CFD No. 14M-2 shall be taxed Proportionately, up to
100% of the Maximum Special Tax, as necessary to satisfy the OverallSpecial Tax Requirement, and the
CFD No. 14M-2 Special Tax Requirement shall include such amount to be levied on all Taxable Property
Owner Association Property and Taxable CPF Property in CFD No. 14M-2.
E.METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR CFD No. 14M-2
Commencing with Fiscal Year 2019-2020, and for each following Fiscal Year, the Council shall levy the
Special Tax in CFD No. 14M-2 at the rates established pursuant to steps 1 through 4 below so that the
amount of the Special Tax levied equals the CFD No. 14M-2 Special Tax Requirementas determined in
Section D above. The Special Tax shall be levied each Fiscal Year as follows:
First:The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property up
to 100% of the applicable Maximum Special Taxfor Developed Property;
Second: If additional monies are needed to satisfy theCFD No. 14M-2 Special Tax Requirement after the
first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of
Approved Property at up to 100% of the Maximum Special Tax for Approved Property;
Third: If additional monies are needed to satisfy the CFD No. 14M-2 Special Tax Requirement after the
first two steps have been completed, the Special Tax shall be levied Proportionately on each Assessor's
Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Undeveloped Property;
City of Chula VistaPage 7
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
Fourth: If additional moneys are needed to satisfy the CFD No. 14M-2 Special Tax Requirement after the
first three steps have been completed, the SpecialTax shall be levied Proportionately on each Assessor's
Parcel of Taxable Property Owner Association Property and Taxable CPF Property, at up to 100% of the
Maximum Special Tax for Taxable Property Owner Association Property or Taxable CPF Property, as
applicable.
Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s
Parcel of Apartment Residential Property, Attached Residential Property, or Detached Residential
Property for which an occupancy permit for private residential use has been issued be increased by more
than ten percent annually up to the Maximum Special Tax as a consequence of delinquency or default by
the owner of any other Assessor's Parcel within CFD No. 14M-2.
F.EXEMPTIONS
The CFD Administrator shall classify as Tax-Exempt Property (i) Assessor’s Parcels defined as Public
Property, (ii) Assessor’s Parcels defined as CPF Property that are owned by a non-profit organization which
st
provides proof to the City prior to March 1preceding the Fiscal Year in which the Special Tax is being
levied of the organization’s non-profit status, and (iii) Assessor’s Parcels with public or utility easements
making impractical their utilization for other than the purposes set forth in the easement.
The CFD Administrator shall classify as Tax-Exempt Property within CFD No. 14M-2 those Assessor’s
Parcels defined as Property Owner’s Association Property or CPF Property provided that no such
classification would reduce the sum of all Taxable Property withinCFD No. 14M-2to less than 80.06 Acres.
Assessor’s Parcels defined as Property Owner Association Property and CPF Property that cannot be
classified as Tax-Exempt Property will be classified as Taxable Property Owner Association Property or
Taxable CPF Property and shall be taxed as part of the fourth step in Section D.
The CFD Administrator will assign tax-exempt status in the chronological order in which property becomes
exempt Public Property or CPF Property or Tax-Exempt Property Owner Association Property. However,
should an Assessor’s Parcel no longer be classified as Public Property or CPF Property or Tax-Exempt
Property Owner Association Property, its tax-exempt status will be revoked.
Taxable Property Owner Association Property and Taxable CPF Property that is not exempt from the
Special Tax under this section shall be subject to the levy of the Special Tax and shall be taxed
Proportionately as part of the fourth step in Section D above, at up to 100% of the applicable Maximum
Special Tax for Taxable Property Owner Association Property and Taxable CPF Property.
G.APPEALS
Any landowner or resident who pays the Special Tax and believes that the amount of the Special Tax levied
on their Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error. If
following such consultation, the CFD Administrator determines that an error has occurred; the CFD
Administrator may amend the amount of the Special Tax levied on such Assessor’s Parcel. If following
such consultation and action, if any by the CFD Administrator, the landowner or resident believes such
error still exists; such person may file a written notice with the City Clerk of the City appealing the amount
of the Special Tax levied on such Assessor’s Parcel. Upon the receipt of any such notice, the City Clerk
shall forward a copy of such notice to the City Manager who shall establish as part of the proceedings and
City of Chula VistaPage 8
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
administration of CFD No. 14M-2, a special three-member committee (the “Review/Appeal Committee”).
The Review/Appeal Committee may establish such procedures, as it deems necessary to undertake the
review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of
Apportionment and make determinations relative to the annual administration of the Special Tax and any
landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall
be final and binding as to all persons.
H.MANNER OF COLLECTION
Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same
time as ordinary ad valoremproperty taxes; provided, however, that the CFD Administrator may directly
bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to
meet the financial obligations of CFD No. 14M-2 or as otherwise determined appropriate by the CFD
Administrator.
I.TERM OF SPECIAL TAX
Taxable Property of CFD No. 14M-2 shall remain subject to the Special Tax in perpetuity or until the Council
takes appropriate actions to terminate the Special Tax pursuant to the Actand the CFD Ordinance.
City of Chula VistaPage 9
Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
Attachment 3
Community Facilities District No. 14M-2(Eastern Urban Center/Millenia)
Description of Services
The types of services to be funded by special taxes levied within the District(“Services”) shall
include maintenance and servicing of the following facilities and any administrative expenses
related thereto:
I. STREET FRONTAGE MAINTENANCE
Eastlake Parkway
Trees
Palms
Planting Areas/Irrigation/Recycled water
Rodent Control
Enhanced paving
Birch Road
Trees
Palms
Planting Areas/Irrigation/Recycled water
Rodent Control
Enhanced paving
Recycled Water Irrigation Meters
Back flow preventer inspection
Wireless for irrigation controller
Trash Receptacles
Bike rack
Benches
Bus Rapid Transit Facility
Palms
Planting Areas/Irrigation/Recycled water
Rodent Control
Decomposed Granite
Medians
Eastlake Pkwy (Birch to Hunte Parkway) -50%
Birch (I-125 to Eastlake Parkway) -100%
Pedestrian Bridge (over Eastlake Parkway)
Bus Stop
Trash receptacles
Maintenance
II. PARK MAINTENANCE (PUBLIC URBAN PARKS)
Frontages
Trees –shade
Palms
Planting Areas/Irrigation/Recycled water
Rodent Control
Recycled Water Irrigation Meters
Back flow preventer inspections
Wireless forirrigation controller
Enhanced paving
Porous pavers
Decomposed Granite
Uplighting
Decorative Lighting
Planting/Irrigation
Trees –shade
Trees –ornamental
Palms
Planting Areas/Irrigation/Recycled water
Sod/Irrigation/Recycled Water
Rodent Control
Recycled Water Irrigation Meters
Potable Water Irrigation Meters
Wireless for irrigation controller
Back flow preventer inspections
Hardscape
Seat Wall
Flatwork
Pedestrian paving (concrete and pavers)
Decomposed granite
Playground surfacing
Site Furniture
Bike Racks
Trash Receptacles/Collection
Dog Waste Bag Dispenser/Collection/Disposal
Benches
Picnic Tables
Moveable Tables and Chairs
Umbrellas
Decorative Lighting
Metalwork
Metal fence/gate
Site Amenities/Features
Fountain
Fountain –Interactive or large
Spray Park
SCADA Monitoring System
Signageand Wayfinding Elements
Sculpture and Art Elements
Playground Equipment
Overlook Platform
Tree House
Outdoor Theater
Regional Trail
Regional trail
Structures
Restrooms andMaintained storage
Gazebo andPavilion
Trellis, Overhead Structure
Athletic Facilities
Basketball Court
Tennis Court
III. BIORETENTION MAINTENANCE
Bioretention Basins
Inspection/Ongoing Maintenance
Replacement 3 times per 100 years
IV. STORM WATER MAINTENANCE
Wolf Canyon Detention Basin
Vegetation Removal
Silt Removal Maintenance
Silt Removal Screen Replacement
Engineer’s Inspection
Periodic Inspection and Maintenance
Poggi Canyon
Channel
Detention Basin
Birch Street Filters
Vactor Truck Replacement
For purposes of this description of the Services to be funded by the levy of Special Taxes within
the District, “maintenance” includes, but is not limited to, the furnishing of services and materials
for the ordinary and usual maintenance, operation, and servicing of any of the facilities, including:
(a) Repair, removal, or replacement of all or any part of any facilities.
(b) Providing for the life, growth, health, and beauty of landscaping, including cultivation,
irrigation, trimming, spraying, fertilizing, or treating for disease or injury.
(c) The removal of trimmings, rubbish, debris, silt, and other solid waste.
(d) The cleaning, sandblasting, and painting of walls and other facilities to remove or cover
graffiti.
(e) The elimination, control, and removal of rodents and vermin.
For purposes of this description of the Services to be funded by Special Taxes levied within the
District, “servicing” includes, but is not limited to, the furnishing of:
(a) Electric current or energy,gas, or other illuminating agent for any public lighting for
the facilities or for the lighting or operation of any other improvements related thereto.
(b) Water for the irrigation of any landscaping, the operation of any fountains, or the
maintenance of any other facilities.
For purposes of this description of the Services to be funded by the levy of Special Taxes within
the District, “administrative expenses” means the actual or estimated costs incurred by the City,
acting for and on behalf of the District as the administrator thereof, to determine, levy and collect
the Special Taxes within the District, including salaries of City employees and a proportionate
amount of the City’s general administrative overhead related thereto, and the fees of consultants
and legal counsel providing services related to the administration of the District; the costs of
collecting installments of the Special Taxes levied within the District; and any other costs required
to administer the Districtas determined by the City.It is expected that the services will be provided
by the City, either with its own employees or by contract with third parties, or any combination
thereof.
RESOLUTION NO. _________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
DECLARING ITS INTENTION TO ESTABLISH COMMUNITY FACILITIES
DISTRICT NO. 14M-2(EASTERN URBAN CENTER/MILLENIA) AND TO
AUTHORIZE THE LEVY OF A SPECIAL TAX THEREIN TO FINANCE
CERTAIN SERVICES AND SETTING THE PUBLIC HEARING TO
CONSIDER THE ESTABLISHMENT OF THE PROPOSED DISTRICT
WHEREAS, the City Councilof the City of Chula Vista, California(the “City Council”),
desires to initiate proceedings to create a community facilities district pursuant to the terms and
provisions of the “Mello-Roos Community Facilities Act of 1982,” being Chapter 2.5, Part 1,
Division 2, Title 5 of the Government Code of the State of California (the “Act”) and the City of
Chula Vista Community FacilitiesDistrict Ordinance, as originally enacted and as subsequently
amended pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of
Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the
Ordinance may be referred to collectively as the “Community Facilities District Law”) for the
purposes set forth herein; and
WHEREAS, this Community Facilities District shall hereinafter be referred to as
Community Facilities District No. 14M-2(Eastern UrbanCenter/Millenia) (the “District”);and
WHEREAS, the City Councilis now required to proceed to adopt its resolution of
intention to initiate the proceedings for the establishment of such District, to set forth the
boundaries for such District, to indicatethe type of public services to be financed by such
District, to indicate a rate and method of apportionment of special taxes proposed to be levied
within the Districtsufficient to finance such services, and to set a time and place for a public
hearing relating to theestablishment of such District; and
WHEREAS, the City Councildirects, pursuant to the provision of Section 53321.5 of the
Government Code of the State of California, the preparation of a community facilities district
report (the “District Report”) to provide more detailed information relating to the proposed
District, the services proposed to be financed from the proceeds of such special taxes to be levied
within the District, and the estimate of the cost of providing such services; and
WHEREAS, a map of such District has been submitted showing the boundaries of the
territory proposed to be included in the District which territory includes the properties and
parcels of land proposed to be subject to the levy of a special tax by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
SECTION 1.Recitals. The above recitals are all true and correct andare hereby made
findings of the City Council.
SECTION 2.Initiation of Proceedings. These proceedings are initiated by the City
Councilpursuant to the provisions of the Community Facilities District Law.
SECTION 3.Boundaries of District. It is the intention of the City Councilto establish
the District pursuant to the provisions of the Community Facilities District Law, and to
determine the boundaries and parcels on which special taxes may be levied to finance certain
services. A description of the boundaries of the territory proposed for inclusion in the District
including properties and parcels of land proposed to be subject to the levy of a special tax by the
District is as follows:
All that property as shown on a map as previously approved by the City Council,
such map designated “Proposed Boundaries of Community Facilities District No.
14M-2(Eastern Urban Center/Millenia), City of Chula Vista, County of San
Diego, State of California,” a copy of which is on file in the Office of the City
Clerk and shall remain open for public inspection.
SECTION 4.Name of District. The proposed Community Facilities District shall be
known and designated as “Community Facilities District No. 14M-2(Eastern Urban
Center/Millenia).”
SECTION 5.Description of Services. It is the intention of the City Councilto finance
certain services that are in addition to those provided in or required for the territory within the
District and will not be replacing services already available. A general description of the
services to be funded by special taxes levied in the District isset forth in Exhibit Aattached
hereto and by this reference incorporated herein.
Maintenanceshall include, but not be limited to, the provision of all labor, material,
administration, personnel, equipment and utilities necessary to maintain theimprovementslisted
in Exhibit A.
SECTION 6.Special Tax. It is hereby further proposed that, exceptwhere funds are
otherwise available, a special tax sufficient to pay for such services and related incidental
expenses authorized by the Community Facilities District Law, secured by recordation of a
continuing lien against all non-exempt real property inthe District, will be levied annually within
the boundaries of the District. For further particulars as to the rate and method of apportionment
of the special tax proposed to be levied within the District, reference is made to the attached and
incorporated Exhibit B, which sets forth in sufficient detail the method of apportionment to allow
each landowner or resident within the Districtto clearly estimate the maximum amount that such
person willhave to pay for such services.
Under no circumstances willthe special tax levied in any fiscal year against any
residential parcel be increased as a consequence of delinquency or default by the owner or
owners of any other parcel or parcels within the District by more than 10 percent (10%) above
the amount that would have been levied in that fiscal year had there never been any such
delinquencies or defaults. A parcel shall be considered “used for private residential purposes”
not later than the date on which an occupancy permit or the equivalent for private residential use
is issued for such parcel.
The special tax herein proposed, to the extent possible, shall be collected in the same
manner as ad valorem property taxes or in such other manner as the City Councilor its designee
shall determine, including, without limitation, direct billing of the affected property owners, and
shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency
as applicable for ad valorem taxes. Any special taxes that may not be collected on theCounty
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tax roll shall be collected through a direct billing procedure by the Treasurer of the City of Chula
Vista (the “City”), acting for and on behalf of the District.
The special tax obligation for any parcel may not be prepaid.
Pursuant to Government Code Section 53340 and except as provided in Government
Code Section 53317.3, properties of entities of the state, federal, and local governments shall be
exempt from the levy of the special tax.
SECTION 7.Community Facilities District Report. The Director of Development
Services is hereby directed and ordered to prepare, or cause the preparation of the District Report
to be presented to the City Council, generally containing the following: (1) a full and complete
description of the services proposed to be financed from the levy of the special tax, (2) a general
cost estimate setting forth costs of providing such services, and (3) further information regarding
the implementation of the rate and method of apportionment of the special tax proposed to be
levied within the District. The District Report, upon its preparation, shall be submitted to the
City Councilfor review, and the District Report shall be made a part of the record of the public
hearing on the resolution of intention to establish such District.
SECTION 8.Public Hearing. Notice is given that on May 7, 2019, at 5:00 p.m., in the
regular meeting place of the City Council being the Council Chambers, located at 276 Fourth
Avenue, Chula Vista, California, a public hearing will be held where the City Councilwill
consider the establishment of the proposed District, the proposed rate and method of
apportionment of the special taxes proposed to be levied within the District, and all other matters
as set forth in this Resolution. At the above-mentioned time and place for public hearing any
persons interested, including taxpayers and property owners may appear and be heard. The
testimony of all interested persons for or against the establishment of the District, the extent of
the District, or the furnishing of the services, will be heard and considered. Any protests may be
made orally or in writing. However, any protests pertaining to the regularity or sufficiency of the
proceedings shall be in writing and clearly set forth the irregularities and defects to which the
objection is made. All written protests shall be filed with the City Clerk of the City Council on
or before the time fixed for the public hearing. Written protests may be withdrawn in writing at
any time before the conclusion of the public hearing.
If a written majority protest against the establishment of the District is filed, the
proceedings shall be abandoned. If such majority protest is limited to certain services or portions
of the special tax, those services or that portion of thespecial tax shall be eliminated by the City
Council.
SECTION 9.Election. If, following the public hearing described above, the City
Council determines to establish the District and proposes to levy a special tax within the District,
the City Council shall then submit the levy of the special taxes to the qualified electors of the
District. If at least twelve (12) persons, who need not necessarily be the same twelve (12)
persons, have been registered to vote within the Districtfor each of the ninety (90)days
preceding the close of the public hearing, the vote shall be by registered voters of the District
with each voter having one (1) vote. Otherwise, the vote shall be by the landowners of the
Districtwho were the owners of record at the close of the subject hearing, with each landowner
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or the authorized representative thereof, having one (1) vote for each acre or portion of an acre of
land owned within the District.
A successful election relating to the special tax authorization shall, as applicable,
establish and/or change the appropriations limit as authorized by Article XIIIB of the California
Constitution as it is applicable to this District.
SECTION 10.Notice. Notice of the time and place of the public hearing shall be given
by the City Clerk by causing a Notice of Public Hearing to be published in the legally designated
newspaper of general circulation, such publication pursuant to Section 6061 of the Government
Code, with such publication to be completed at least seven (7) days prior to the date set for the
public hearing.
SECTION 11.Effective Date. This Resolution shall become effective immediately upon
its adoption.
PREPARED BY:APPROVED AS TO FORM BY:
Kelly G. Broughton, FASLAGlen R. Googins
Director of Development ServicesCity Attorney
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Exhibit A
Community Facilities District No. 14M-2(Eastern Urban Center/Millenia)
Description of Services
The types of services to be funded by special taxes levied within the District(the “Services”)
shall include maintenance and servicing of the following facilities and any administrative
expenses related thereto:
I. STREET FRONTAGE MAINTENANCE
Eastlake Parkway
Trees
Palms
Planting Areas/Irrigation/Recycled water
Rodent Control
Enhanced paving
Birch Road
Trees
Palms
Planting Areas/Irrigation/Recycled water
Rodent Control
Enhanced paving
Recycled Water Irrigation Meters
Back flow preventer inspection
Wireless for irrigation controller
Trash Receptacles
Bike rack
Benches
Bus Rapid Transit Facility
Palms
PlantingAreas/Irrigation/Recycled water
Rodent Control
Decomposed Granite
Medians
Eastlake Pkwy (Birch to Hunte Parkway) -50%
Birch (I-125 to Eastlake Parkway) -100%
Pedestrian Bridge (over Eastlake Parkway)
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Bus Stop
Trash receptacles
Maintenance
II. PARK MAINTENANCE (PUBLIC URBAN PARKS)
Frontages
Trees –shade
Palms
Planting Areas/Irrigation/Recycled water
Rodent Control
Recycled Water Irrigation Meters
Back flow preventer inspections
Wireless for irrigation controller
Enhanced paving
Porous pavers
Decomposed Granite
Uplighting
Decorative Lighting
Planting/Irrigation
Trees –shade
Trees –ornamental
Palms
Planting Areas/Irrigation/Recycled water
Sod/Irrigation/Recycled Water
Rodent Control
Recycled Water Irrigation Meters
PotableWater Irrigation Meters
Wireless for irrigation controller
Back flow preventer inspections
Hardscape
Seat Wall
Flatwork
Pedestrian paving (concrete and pavers)
Decomposed granite
Playground surfacing
A-2
Site Furniture
Bike Racks
Trash Receptacles/Collection
Dog Waste Bag Dispenser/Collection/Disposal
Benches
Picnic Tables
Moveable Tables and Chairs
Umbrellas
Decorative Lighting
Metalwork
Metal fence/gate
Site Amenities/Features
Fountain
Fountain –Interactive or large
Spray Park
SCADA Monitoring System
Signageand Wayfinding Elements
Sculpture and Art Elements
Playground Equipment
Overlook Platform
Tree House
Outdoor Theater
Regional Trail
Regional trail
Structures
Restrooms andMaintained storage
Gazebo andPavilion
Trellis,Overhead Structure
Athletic Facilities
Basketball Court
Tennis Court
III. BIORETENTION MAINTENANCE
Bioretention Basins
Inspection/Ongoing Maintenance
Replacement 3 times per 100 years
A-3
IV. STORM WATER MAINTENANCE
Wolf Canyon Detention Basin
Vegetation Removal
Silt Removal Maintenance
Silt Removal Screen Replacement
Engineer’s Inspection
Periodic Inspection and Maintenance
Poggi Canyon
Channel
Detention Basin
Birch Street Filters
Vactor Truck Replacement
For purposes of this descriptionof the Services to be funded by the levy of Special Taxes within
the District, “maintenance” includes, but is not limited to, the furnishing of services and
materials for the ordinary and usual maintenance, operation, and servicing of any of the facilities,
including:
(a) Repair, removal, or replacement of all or any part of any facilities.
(b) Providing for the life, growth, health, and beauty of landscaping, including
cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury.
(c) The removal of trimmings, rubbish, debris, silt, and other solid waste.
(d) The cleaning, sandblasting, and painting of walls and other facilities to remove or
cover graffiti.
(e) The elimination, control, and removal of rodents and vermin.
For purposes of this description of the Services to be funded by Special Taxes levied within the
District, “servicing” includes, but is not limited to, the furnishing of:
(a) Electric current or energy, gas, or other illuminating agent for any public lighting for
the facilities or for the lighting or operation of any other improvements related thereto.
(b) Water for the irrigation of any landscaping, the operation of any fountains, or the
maintenance of any other facilities.
For purposes of this description ofthe Services to be funded by the levy of Special Taxes within
the District, “administrative expenses” means the actual or estimated costs incurred by the City,
acting for and on behalf of the District as the administrator thereof, to determine, levy and collect
the Special Taxes within the District, including salaries of City employees and a proportionate
amount of the City’s general administrative overhead related thereto, and the fees of consultants
and legal counsel providing services related to the administration of the District; the costs of
collecting installments of the Special Taxes levied within the District; and any other costs
required to administer the Districtas determined by the City.It is expected that the services will
be provided by the City, either with its own employees or by contract with third parties, or any
combination thereof.
A-4
Exhibit B
Community Facilities District No. 14M-2(Eastern Urban Center/Millenia)
Rate and Method of Apportionment
A Special Tax of Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia) ("CFD No.
14M-2") of the City of Chula Vista shall be levied on all Taxable Property in CFD No. 14M-2 and collected
each Fiscal Year commencing in Fiscal Year 2019-2020 in an amount determined through the application
of the rate and method of apportionment of the Special Tax set forth below. All such Taxable Property
shall be taxed for the purposes, to the extent, and in the manner herein provided. Taxable Property
shall not be subject to the Special Taxes ofCFD No. 14M-2 until the lien of the special taxes of CFD No.
14M IA 1 (defined below) with respect to such Taxable Property has been cancelled.
A.DEFINITIONS
The terms hereinafter set forth have the following meanings:
"‘A’ Map"shall mean a master final subdivision or parcel map, filed in accordance with the Subdivision
Map Act (California Government Code Section 66410 et seq.) and the Chula Vista Municipal Code, which
subdivides the land or a portion thereof shown on a tentative map into “super block” lots corresponding
to units or phasing of combination of units as shown on such tentative map and which may further show
open space lot dedications, backbone street dedications and utility easements required to serve such
“super block” lots.
"Acre”or“Acreage"means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map,
or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final
Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent
map or instrument recorded in the Office of the County Recorder. In the event that parcel acreage
information is not available from the sources previously listed, San Diego County GIS data may be
utilized. The squarefootage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560.
"Act"means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1,
Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses"means the actual or estimated costs incurred by the City, acting for and on
behalf of CFD No. 14M-2 as the administrator thereof, to determine, levy and collect the Special Taxes
within CFD No. 14M-2, including salaries and benefits of City employees and a proportionate amount of
the City’s general administrative overhead related thereto, and the fees of consultants and legal counsel
providing services related to the administration of CFD No. 14M-2; the costs of collecting installmentsof
the Special Taxes within CFD No. 14M-2; and any other costs required to administer CFD No. 14M-2 as
determined by the City.
“Apartment Property” means a Dwelling Unit within a building comprised of attached residential
Dwelling Units available for rental by the general public, not for sale to an end user, and under common
management, as determined by the CFD Administrator.
"Approved Property" means all Assessor’s Parcels of Taxable Property: (i) that are included in an ‘A’
Map, excluding lettered lots thereon, or a Final Subdivision Map, excluding lettered lots thereon, that
st
were recorded prior to the March 1preceding the Fiscal Year in which the Special Tax is being levied,
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st
and (ii) that have not been issued a building permit prior to the March 1preceding the Fiscal Year in
which the Special Tax is being levied.
"Assessor's Parcel"means a lot or parcel shown in an Assessor's Parcel Map with an assigned assessor's
parcel number.
"Assessor's Parcel Map"means an official map of the Assessor of the County designating parcels by
assessor's parcel number.
"Attached Residential Property"means all Assessor’s Parcels of Developed Property for which a
building permit has been issued for a residential structure consisting of two or more residential Dwelling
Units that share common walls, including, but not limited to, duplexes, triplexes, townhomes, and
condominiums, as determined by the CFD Administrator.
"CFD Administrator"means an official of the City, or designee thereof, responsible for determiningthe
CFD No. 14M-2 Special Tax Requirement and providing for the levy and collection of the Special Taxes.
“CFD No. 14M”means Community Facilities District No. 14M (Eastern Urban Center/Millenia
established by the City of Chula Vista under the Act and theCFD Ordinance.
“CFD No. 14M IA 1”means Improvement Area No. 1 of Community Facilities District No. 14M (Eastern
Urban Center/Millenia) established by the City of Chula Vista under the Act and the CFD Ordinance.
“CFD No. 14M IA 1 RMA” means the Rate and Method of Apportionment set forth in the Notice of
Special Tax Lien for CFD No. 14M IA 1 recorded in the Official Records of the San Diego County Recorder
on February 21, 2014, as Doc. #2014-0071300.
“CFD No. 14M IA 1 Special Tax Requirement” shall have themeaning given the term “Improvement
Area No. 1 Special Tax Requirement” in the CFD No. 14M IA 1 RMA.
“CFD No. 14M-2”means Community Facilities District No. 14M-2 (Eastern Urban Center/Millenia)
established by the City of Chula Vista under the Act and the CFD Ordinance.
“CFD No. 14M-2 Special Tax Requirement”means that amount calculated in Section D. required in any
Fiscal Year for CFD No. 14M-2 to: (i) pay the Operating Fund Requirement; (ii) pay any amounts required
to establish or replenish the Reserve Fund to the Reserve Fund Requirement; (iii) pay for reasonably
anticipated delinquent Special Taxes within CFD No. 14M-2 based on the delinquency rate for Special
Taxes levied in the previous Fiscal Year; less (b) a credit for funds available to reduce the annual Special
Tax levy, including the excess, if any, in the Reserve Fund above the Reserve Fund Requirement and any
amount remaining in the Operating Fund that is available to pay the Operating Fund Requirement in
such Fiscal Year.
“CFD No. 14M-2 Boundary Map” means a recorded map of the CFD No. 14M-2 which indicates the
boundaries of the CFD No. 14M-2.
“CFD Ordinance”meansthe City of Chula Vista Community Facilities District Ordinance, as originally
enacted and as subsequently amended pursuant to the powers reserved by the City under Sections 3, 5
and 7 of Article XI of the Constitution of the State of California
"City"means the City of Chula Vista.
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"City Clerk" means the City Clerk for the City of Chula Vista or his or her designee.
"City Manager" means the City Manager for the City of Chula Vista or his or her designee.
"Community Purpose Facility Property"or"CPF Property" means all Assessors’ Parcels which are
classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance
No. 2452.
"Council"means the City Council of the City of Chula Vista, acting as the legislative body of the CFD No.
14M-2.
"County"means the County of San Diego, California.
"Detached Residential Property"means all Assessor’s Parcels of Developed Property for which a
building permit has been or may be issued for purposes of constructing a detached Dwelling Uniton an
Assessor’s Parcel. Such Residential Unit does not or will not share a common wall with another
residential Dwelling Unit, as determined by the CFD Administrator.
"Developed Property"means all Taxable Property for which a building permit was issued prior to the
March 1st preceding the Fiscal Year in which the Special Tax is being levied.
"Dwelling Unit"means each separate residential dwelling unit that comprises an independent facility
separate from adjacent residential dwelling units.
"Final Subdivision Map"means a subdivision of property creating buildable lots by recordation of a final
subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code
Section 66410 et seq.), or recordation of a condominium plan pursuant to California Civil Code 4285,
that creates individual lots for which building permits may be issued without further subdivision and is
recorded prior to March 1 preceding the Fiscal Year in which the Special Tax is being levied.
"Fiscal Year"means the period starting July 1 and ending on the following June 30.
"Land Use Class"means any of the classes listed in Table 1.
"Maximum Special Tax"means the maximum Special Tax, determined in accordance with Section C
below, that may be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property.
"Mixed-Use Property"means all Assessor’s Parcels that have been classified by the City to allow both
Residential Property and Non-Residential Property uses on each such Assessor’s Parcel. For an
Assessor’s Parcel of Mixed-Use Property, only the Residential Land Use Class thereon is subject to
taxation pursuant to the provisions of Section C.
"Non-Residential Property"means all Assessor’s Parcels of Developed Property for which a building
permit(s) has been issued for a structure or structures for non-residential use.
"Operating Fund" means a fund that shall be maintained by the City for CFD No.14M-2 for each Fiscal
Year to pay for the authorized maintenance services as described in CFD No. 14M-2 special tax report
and Administrative Expenses.
"Operating Fund Requirement"means, for any Fiscal Year, an amount equal to the budgeted costs for
CFD No. 14M-2. The budgeted costs for CFD No. 14M-2 shall equal the budget costs of park
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maintenance, landscape maintenance, street frontage maintenance, bio-retention maintenance, storm
water maintenance, and the maintenance, repair and replacement of the facilities and improvements,
which have been accepted and or maintained by the City during the current Fiscal Year; plus the
budgeted Administrative Expenses for the current Fiscal Year in which Special Taxes are levied.
“Overall Special Tax Requirement”means that amount required in any Fiscal Year to be included in the
CFD No. 14M-2 Special Tax Requirement and the CFD No. 14M IA 1 Special Tax Requirement as
determined in Section D.
"Property Owner Association Property" means any property withinthe CFD No. 14M-2 boundaries that
is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder
to, a property owner association, including any master or sub-association.
"Proportionately"means in a manner such that the ratio of the actual Special Tax levy to the Maximum
Special Tax is equal for all Assessor’s Parcels of Taxable Property within each Land Use Class.
"Public Property"means any property within CFD No. 14M-2 boundaries that has provided proof to the
City prior to March 1st preceding the Fiscal Year in which the Special Tax is being levied, that it is
expected to be used for any public purpose and is owned by or dedicated to the federal government,
the State, the County, the City or any other public agency.
"Reserve Fund"means a fund that shall be maintained for CFD No. 14M-2 for each Fiscal Year to provide
necessary cash flow for the first six months of each Fiscal Year, reserve capital to cover monitoring,
maintenance and repair cost overruns and delinquencies in the payment of Special Taxes within CFD No.
14M-2 and a reasonable buffer to prevent large variations in annual Special Tax levies within CFD No.
14M-2.
"Reserve Fund Requirement"means an amount equal to up to 100% of the CFD No. 14M-2 Operating
Fund Requirement for any Fiscal Year.
"Residential Property"means all Assessor’s Parcels of Developed Property classified as Apartment
Property, Attached Residential Property, or Detached Residential Property for which a building permit(s)
has been issued for purposes of constructing one or more residential Dwelling Units.
"Special Tax" means the Special Tax levied pursuant to the provisions of sections D and E below in each
Fiscal Year on each Assessor's Parcel of Developed Property, Approved Property, and Undeveloped
Property in CFD No. 14M-2 to fund the CFD No. 14M-2 Special Tax Requirement.
"State"means the State of California.
“Taxable CPF Property”means all CPF Property which is not exempt from the Special Tax pursuant to
Section F below.
"Taxable Property"means, all of the Assessor's Parcels within the boundaries of CFD No. 14M-2 that are
not exempt from the Special Tax pursuant to law or as defined below under Tax-Exempt Property.
"Taxable Property Owner Association Property"means all Property Owner Association Property which
is not exempt from the Special Tax pursuant to Section F below.
"Tax-Exempt Property"means an Assessor's Parcel not subject to the Special Tax. Tax-Exempt Property
includes: (i) Public Property, or (ii) Property OwnerAssociation Property excluding Taxable Property
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Owner Association Property, or (iii) Assessor’s Parcels of Taxable CPF Property that is owned by a non-
st
preceding the Fiscal Year in
profit organization and has provided proof to the City prior to the March 1
which the Special Tax is being levied of the organization’s non-profit status, or (iv) Assessor’s Parcels
with public or utility easements making impractical their utilization for other than the purposes set forth
in the easement.
"Undeveloped Property"means, for each Fiscal Year, all Taxable Property not classified as Developed
Property, Approved Property, Taxable Property Owner Association Property, or Taxable CPF Property.
B.ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year using the definitions above, each Assessor’s Parcel within CFD No. 14M-2 shall be
classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable
Property shall be further classified as Developed Property, Approved Property, Undeveloped Property,
Taxable Property Owner Association Property, and Taxable CPF Property.
Each Assessor’s Parcel classified as Developed Property shall be further assigned to a Land Use Class as
specified in Table 1. The Land Use Class of each Assessor’s Parcel of Residential Property or Mixed-Use
Property shall be determined based on the records of the San Diego County Assessor, or other such
information provided by the City.
Taxable Property Owner Association Property and Taxable CPF Property shall be taxed as Non-
Residential Property when any such Assessor’s Parcel is classified as Developed Property. If any such
Assessor’s Parcel is undeveloped, it shall be classified as Undeveloped Property.
C.MAXIMUM SPECIAL TAX RATE
1.Developed Property
TABLE 1
MAXIMUM SPECIAL TAX FORDEVELOPED PROPERTY
Land Use Maximum
ClassDescriptionSpecial Tax(FY 2018/19)
1Apartment Property$206.82 per Dwelling Unit
2Attached Residential Property$275.76 per Dwelling Unit
3Detached Residential Property$344.70 per Dwelling Unit
4Non-Residential Property$1,377.71 per Acre
Mixed-Use Property Land Use Classes
The Maximum Special Tax that may be levied on Mixed Use Property Assessor’s Parcel shall only be
levied on the Residential Property Land Use Class(es) located on that Assessor Parcel(s).
Sample Maximum Special Tax Calculation for Mixed Use Property
Under the proposed example, assume that Assessor’s Parcel Number 1 is classified as a Mixed-Use
Property. Assessor’s Parcel Number 1 is a 2 Acre parcel that contains Non-Residential Property
consisting of 10,000 square feet of retail shops and Apartment Property consisting of 10 residential
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Dwelling Units. The following table shows what the expected annual Maximum Special Tax would be for
Assessor’s Parcel Number 1.
No. of Non-Residential
Assessor
ResidentialPropertyResidentialTotal Annual
ParcelParcelDwellingMaximum Special Property Maximum Maximum
(1)
No.AcreageUnitsTaxSpecial TaxSpecial Tax
12.0010$0.00$2,068.20$2,068.20
(1)The Maximum Special Tax is based upon the initial Maximum Special Tax rates as defined in Table 1.
2.Approved Property and Undeveloped Property
The Maximum Special Tax for Approved Property and Undeveloped Property shall be $4,359.00 per
Acre.
Annual Escalation of Maximum Special Tax
On each July 1, commencing on July 1, 2019, the Maximum Special Tax for CFD No. 14M-2 as shown in
Tables 1 above that may be levied on each Assessor’s Parcel of Taxable Property in CFD No. 14M-2 shall
be adjusted by a factor equal to the greater of, the positive percentage change in the San Diego
Metropolitan Area All Urban Consumer Price Index (All Items) for the twelve-month period ending June
1 of the prior Fiscal Yearor 0%, provided the Maximum Special Tax shall never be less than the amounts
shown in Table 1.
D.CALCULATION OF OVERALL SPECIAL TAX REQUIREMENT PROPORTIONALITY
Each Fiscal Year, an Overall Special Tax Requirement for CFD No. 14M-2 and CFD No. 14M IA 1 shall be
calculated initially as the same amount as theCFD No. 14M IA 1Special Tax Requirement would have
been calculatedprior to the creation of CFD No. 14M-2.
Then, for purposes of the levy of Special Taxes within CFD No. 14M-2, the amount of the CFD No. 14M-2
Special Tax Requirement shall be an amount equal to the Overall Special Tax Requirement less the
amount of the levy of special taxes in CFD No. 14M IA 1 on Developed Property at 100% of the
Maximum Special Tax (as such terms are defined in the CFD No. 14M IA 1 RMA).
If the amount of Developed Property Maximum Special Taxes that can be collected in that Fiscal Year
within CFD No. 14M-2 exceeds the CFD No. 14M-2 Special Tax Requirement, then the levy on Developed
Property in both CFD No. 14M IA 1 and CFD No. 14M-2 shall be reduced Proportionatelyto the amount
required to fund the Overall Special Tax Requirement.
If the amount of Developed Property Maximum Special Taxes that can be collected in that Fiscal Year
within CFD No. 14M-2 is less than the CFD No. 14M-2 Special Tax Requirement, then all Approved
Property in both CFD No. 14M IA 1 and CFD No. 14M-2shall be taxed Proportionately, up to 100% of the
applicable Maximum Special Tax, as necessary to satisfy the Overall Special Tax Requirement, and the
CFD No. 14M-2 Special Tax Requirement shall include such amount to be levied on Approved Property in
CFDNo. 14M-2.
If the combined amount of Developed Property and Approved Property Special Taxesthat can be
collected in that Fiscal Year within both CFD No. 14M IA 1 and CFD No. 14M-2 is less than the Overall
Special Tax Requirement, then all Undeveloped Property in both CFD No. 14M IA 1 and CFD No. 14M-2
B-6
shall be taxed Proportionately, up to 100% of the Maximum Special Tax, as necessary to satisfy the
OverallSpecial Tax Requirement, and the CFD No. 14M-2 Special Tax Requirementshall include such
amount to be levied on Undeveloped Property in CFD No. 14M-2.
If the combined amount of Developed Property, Approved Property, and Undeveloped Property Special
Taxesthat can be collected in that Fiscal Year within both CFD No. 14M IA 1 and CFD No. 14M-2 is less
than the OverallSpecial Tax Requirement, then all Taxable Property Owner Association Property and
Taxable CPF Property in both CFD No. 14M IA 1 and CFD No. 14M-2 shall be taxed Proportionately, up to
100% of the Maximum Special Tax, as necessary to satisfy the OverallSpecial Tax Requirement, and the
CFD No. 14M-2 Special Tax Requirement shall include such amount to be levied on all Taxable Property
Owner Association Property and Taxable CPF Property in CFD No. 14M-2.
E.METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR CFD No. 14M-2
Commencing with Fiscal Year 2019-2020, and for each following Fiscal Year, the Council shall levy the
Special Tax in CFD No. 14M-2 at the rates established pursuant to steps 1 through 4 below so that the
amount of the Special Tax leviedequals the CFD No. 14M-2 Special Tax Requirement as determined in
Section D above. The Special Tax shall be levied each Fiscal Year as follows:
First: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property up
to 100% of the applicable Maximum Special Tax for Developed Property;
Second: If additional monies are needed to satisfy the CFD No. 14M-2 Special Tax Requirement after the
first step has been completed, the Special Tax shall be levied Proportionately on eachAssessor's Parcel
of Approved Property at up to 100% of the Maximum Special Tax for Approved Property;
Third: If additional monies are needed to satisfy the CFD No. 14M-2 Special Tax Requirement after the
first two steps have been completed, the Special Tax shall be levied Proportionately on each Assessor's
Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Undeveloped Property;
Fourth: If additional moneys are needed to satisfy the CFD No. 14M-2 Special Tax Requirement after the
first three steps have been completed, the Special Tax shall be levied Proportionately on each Assessor's
Parcel of Taxable Property Owner Association Property and Taxable CPF Property, at up to 100% of the
Maximum Special Tax for Taxable Property Owner Association Property or Taxable CPF Property, as
applicable.
Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s
Parcel of Apartment Residential Property, Attached Residential Property, or Detached Residential
Property for which an occupancy permit for private residential use has been issued be increased by
more than ten percent annually up to the Maximum Special Tax as a consequence of delinquency or
default by the owner of any other Assessor's Parcel within CFD No. 14M-2.
F.EXEMPTIONS
The CFD Administrator shall classify as Tax-Exempt Property (i) Assessor’s Parcels defined as Public
Property, (ii) Assessor’s Parcels defined as CPF Property that are owned by a non-profit organization
st
which provides proof to the City prior to March 1preceding the Fiscal Year in which the Special Tax is
being levied of the organization’s non-profit status, and (iii) Assessor’s Parcels with public or utility
easements making impractical their utilization for other than the purposes set forth in the easement.
B-7
The CFD Administrator shall classify as Tax-Exempt Property within CFD No. 14M-2 those Assessor’s
Parcels defined as Property Owner’s Association Property or CPF Property provided that no such
classification would reduce the sum of all Taxable Property within CFD No. 14M-2 to less than 80.06
Acres. Assessor’s Parcels defined as Property Owner Association Property and CPF Property that cannot
be classified as Tax-Exempt Property will be classified as Taxable Property Owner Association Property
or Taxable CPF Property and shall be taxed as part of the fourth step in Section D.
The CFD Administrator will assign tax-exempt status in the chronological order in which property
becomes exempt Public Property or CPF Property or Tax-Exempt Property Owner Association Property.
However, should an Assessor’s Parcel no longer be classified as Public Property or CPF Property or Tax-
Exempt Property Owner Association Property, its tax-exempt status will be revoked.
Taxable Property Owner Association Property and Taxable CPF Property that is not exempt from the
Special Tax under this section shall be subject to the levy of the Special Tax and shall be taxed
Proportionately as part of the fourth step in Section D above, at up to 100% of the applicable Maximum
Special Tax for Taxable Property Owner Association Property and Taxable CPF Property.
G.APPEALS
Any landowner or resident who pays the Special Tax and believes that the amount of the Special Tax
levied on their Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such
error. If following such consultation, the CFD Administrator determines that an error has occurred; the
CFD Administrator may amend the amount of the Special Tax levied on such Assessor’s Parcel. If
following such consultation and action, if any by the CFD Administrator, the landowner or resident
believes such error still exists; such person may file a written notice with the City Clerk of the City
appealing the amount of the Special Tax levied on such Assessor’s Parcel. Upon the receipt of any such
notice, the City Clerk shall forward a copy of such notice to the City Manager who shall establish as part
of the proceedings and administration of CFD No. 14M-2, a special three-member committee (the
“Review/Appeal Committee”). The Review/Appeal Committee may establish such procedures, as it
deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall
interpret this Rate and Method of Apportionment and make determinations relative to the annual
administration of the Special Tax and any landowner or resident appeals, as herein specified. The
decision of the Review/Appeal Committee shall be final and binding as to all persons.
H.MANNER OF COLLECTION
Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same
time as ordinary ad valoremproperty taxes; provided, however, that the CFD Administrator may directly
bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to
meet the financial obligations of CFD No. 14M-2 or as otherwise determined appropriate by the CFD
Administrator.
I.TERM OF SPECIAL TAX
Taxable Property of CFD No. 14M-2 shall remain subject to the Special Tax in perpetuity or until the
Council takes appropriate actions to terminate the Special Tax pursuant to the Act and the CFD
Ordinance.
B-8
RESOLUTION NO. _________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
ADOPTING A BOUNDARY MAP SHOWING THE BOUNDARIES OF THE
TERRITORY PROPOSED FOR THE INCLUSION IN PROPOSED
COMMUNITY FACILITIES DISTRICT NO. 14M-2 (EASTERN URBAN
CENTER/MILLENIA)
WHEREAS, the City Council of the City Of Chula Vista, California desires to initiate
proceedings to create a Community Facilities District therein pursuant to the terms and
provisions of the “Mello-Roos Community Facilities Act of 1982,” being Chapter 2.5, Part 1,
Division 2, Title 5 of the Government Code of the State of California (the “Act”) and the City of
Chula Vista Community Facilities District Ordinance, as originally enacted and subsequently
amended pursuant to the powers reserved by the City ofChula Vista under Sections 3, 5 and 7 of
Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the
Ordinance may be referred to collectively as the “Community Facilities District Law”). This
community facilities district shall hereinafter be designated as Community Facilities District No.
14M-2 (Eastern Urban Center/Millenia) (the “District”); and
WHEREAS,there has been submitted a map showing the boundaries of the territory
proposed to be included in the District whichterritory includes the properties and parcels of land
proposed to be subject to the levy of special taxes by the District.
NOW, THEREFORE, IT IS HEREBY RESOLVED:
SECTION 1.The above recitals are all true and correct.
SECTION 2.The map designated as “Proposed Boundaries of Community Facilities
District No. 14M-2 (Eastern Urban Center/Millenia), City of Chula Vista, County of San Diego,
State of California” showing territory proposed to be included in the Districtwhich territory
includes the properties and parcels of land proposed to be subject to the levy of a special tax by
the District is hereby adopted and approved.
SECTION 3.A certificate shall be endorsed on the original and on at least one (1) copy
of the map of the District, evidencing the date and adoption of this Resolution, and within fifteen
(15) days after the adoption of the Resolution fixing the time and place of the hearing on the
formation of such District, a copy of such map shall be filed with the correct and proper
endorsements thereon with the County Recorder, all in the manner and form provided for in
Sections 3110 and 3111 of the Streets and Highways Code of the State of California.
PREPARED BY:APPROVED AS TO FORM BY:
Kelly G. Broughton, FASLAGlen R. Googins
Director of Development ServicesCity Attorney
1
March 26, 2019File ID: 19-0026
TITLE
ACCEPTANCE OF THE HOUSING ELEMENT 2018 ANNUAL PROGRESS REPORT & HOUSING SUCCESSOR
ANNUAL REPORT FOR FISCAL YEAR 2017-2018
RECOMMENDED ACTION
Counciland Housing Authority, as Successor Housing Agency, accept the report.
SUMMARY
Annually, the City of Chula Vista prepares a Housing Element Progress Report (“HEReport”) on the
implementation of the City’s Housing Element and includes theSuccessor Housing Agency Report required
by Senate Bill 341 (SB-341 report)underHealth and Safety Code (HSC) Section 34176.1(f). The HE Report
has been prepared and provides detailed information regarding the housing activities of the City from
January1, 2018-December 31, 2018. The SB-341 report includes housing and financial activities of the
Housing Authority’s Low-and Moderate-IncomeHousing Fundof the former redevelopment agency. The
respective reports must be submitted to the State of California Department of Housing and Community
Development (State HCD) by April 1.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelinesbecauseitwillnotresultinaphysicalchangein
theenvironment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is
not subject to CEQA.Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
No action is required. The Housing Advisory Commissionwill be provided with a summary of the Report
at their next meeting.
DISCUSSION
Housing Element Progress Report
AdoptedonApril23,2013andacceptedbytheCaliforniaDepartmentofHousingandCommunity
Development(StateHCD)inJune2013,theCityofChulaVista’s2013-2020HousingElement
addressestheadequatehousingneedsandopportunitiesforpresentandfutureChulaVista residents.
Eachyear,theCitymustsubmittoStateHCDasummaryofitsprogressinimplementing thepolicyand
Page|1
actionprogramsoutlinedwithintheHousingElementbasedonthespecifiedgoalsand objectives.
TheChulaVistaHousingElement2018AnnualProgressReport,includedasAttachment 1(Executive
Summary)andAttachment2(RequiredHousingElementReportingForms),provides detailed
information regarding housing activities of the City of Chula Vista from January 1, 2018 through
December 31, 2018.CaliforniaGovernmentCodeSection65400requiresthereporttoincludethe
following:(1)progress inmeetingtheRegionalHousingNeed;(2)theeffectivenessoftheHousing
Elementinthe attainmentofthecommunity’shousinggoalsandobjectives;and(3)progress
towardmitigating governmentalconstraintsidentifiedintheHousingElement.
In 2018, building permits were issued for 1,777 new residential units.Although no building permits were
issued for affordable housing during this reporting period, on May 15, 2018,theCity’s Housing
Authority,actingastheSuccessorHousingAgency,providedadditionalfinancialassistanceforthe
future developmentofa 96-unitmulti-familyresidentialprojectlocatedin southwest Chula Vista.
Otheraccomplishmentsincludethefollowingbyprogram:
ProgramNameNumberofHouseholds
FirstTimeHomebuyerProgram10
TenantBasedRentalAssistance17
RapidRe-Housing(Homeless)12
HomelessPrevention(AtRiskofHomeless)4
CommunityHousingImprovementProgram3
Inaddition,740residentialcomplaintswererespondedtobycodeenforcementin2018,with28
complaintsrelatedtoabandonedresidentialproperties.Alloftheseprogramsandservicesresulted in
increasedaffordabilityandsaferhousingconditionsforChulaVistaresidents.
SB-341 Report
OnJanuary1,2014,SenateBill341(SB341)becameeffective,amendingCaliforniaHealth&SafetyCode
(HSC)Section34176.1.HSCSection34176.1(f)requireseachhousingsuccessoragencythatassumedthe
housingfunctionsofaformerredevelopmentagencytopreparefinancialstatementsforthe
redevelopmenthousingagencyandpostaseparatereportonitswebsitecontaininginformation
regardingthehousingandfinancialactivitiesoftheLow-andModerate-IncomeHousingAssetFund
(LMIHAF)oftheformerredevelopmentagencyforthepreviousyear.
TheHousingSuccessorAnnualReportforFiscalYear2017-2018,alongwiththeindependent
financialauditoftheHousing Authority and the LMIHAF,aspreparedbytheindependentauditfirmof
LanceSoll&Lunghard,LLP,andareincludedasAttachment3. As required by State HCD, this report will
be included with the submittal of Housing Element AnnualProgressReport.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific
and consequently, the real property holdings of the City Council and Housing Authority members do not
create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal.
Gov't Code § 87100, et seq.).
Page|2
CURRENT-YEAR FISCAL IMPACT
All staff time and costs to prepare this report were included in the adopted fiscal year 2018-2019. No
additional appropriations are required.
ONGOING FISCAL IMPACT
There are no ongoing fiscal impacts related to this item.
ATTACHMENTS
1.Executive Summary
2.Housing Element Reporting Forms (Calendar Year 2018)
3.Housing Successor Annual Report-SB-341 (Fiscal Year 2017-2018)
Staff Contact:Jose Dorado, Senior Management Analyst, Chula Vista Housing Authority.
Page|3
ATTACHMENT 1
HOUSINGELEMENT2018ANNUALPROGRESSREPORT
EXECUTIVE SUMMARY
Some significant facts about affordable housing efforts during the 2018calendaryear (January 1,
2018–December 31, 2018)include:
Policy 3.2 Balanced and Diverse Housing
Rental Assistance
Seventeen (17) households receivedHOME fundedTenant Based Rental Assistance
(TBRA). The target population for the TBRA program included those households who
are literally homeless or are at risk of being homeless.
Sixteen (16) households participated in the Emergency Solution Grant Program. Twelve
(12) households received Rapid Re-Housing rental and/or security deposit assistance (for
those who are literally homeless) and four (4) households received Homeless Prevention
Rental Program rental assistance (at risk of being homeless).
First Time Homebuyer Assistance
Ten (10)low income household received down payment assistance through the First Time
Homebuyer program.
Policy 3.1 Maintaining & Enhancing the Quality and Sustainability of Housing and
Residential Neighborhoods
Rehabilitation of Housing
Two (2) mobilehomes and one (1) single family home were provided assistance for the
repair/rehabilitation of their home through the City’s Community Housing and
Improvement Program.
Inspection of Housing
Code Enforcement staff began inspectionsin 2018on 12apartment communities through
the City’s Rental Housing Program. In 2018, Code Enforcement opened 771cases for
individual apartments resulting from inspections of apartment communities initiated in
2018and in the previous year.
Through Title 25, Code Enforcement staff has completedinspectionsat Trailer Villa
Mobilehome park with 118 mobilehome spaces. The initial preparations for inspection of
Chula Vista Mobilehome Park with 166 spaces began in late 2018.
Maintain Integrity of Residential Neighborhoods
Code enforcement staff responded to 740residential (e.g. apartments, duplexes,
condominiums, mobile homes and single-family homes) complaints during 2018. For
condos and single-family dwellingssuch activities includedunpermitted construction, trash
junk and debris, inoperable vehicles related. Forty-six of the complaints were related to
2018Housing ElementProgress Report–Executive Summary
Page iof ii
apartment communities for such activities as mold, roach/rodent infestations and other
maintenance issues.
Twenty-eight(28) residential properties were registered in the Abandoned Residential
Properties Program (4condominium and 24single family properties)
Chula Vista voters approved Measure P –a temporary, ten-year, half-cent sales tax to
fund high priority infrastructure needs. Collection of the sales tax began April 1, 2017.
Notable improvementswere made (in 2018)to public infrastructure and facilities, streets,
civic and south libraries, recreation and senior centers, sports fields and courts, park
improvements, traffic signals, and other improvements. A comprehensive list of
improvements can be found on the City’s website at www.chulavistaca.gov/measurep.
The City received a HCD Housing-Related Parks (HRP) Program Grantin late 2017. In
2018, planning functions were underway for the improvements to Friendship Park. The
project is scheduled to be completed by June 2019.
Water & Energy Efficiency
Property Assessed Clean Energy (PACE) programs, a private-public partnership, financed
over 210projects for a total of more than $5million in energy and water upgrades.
Over 380no-cost home and business energy evaluationsconducted, which led to over 90%
of residential participants implementing a recommended energy-saving behavior or retrofit
and over 50% of business participants.
2018Housing ElementProgress Report–Executive Summary
Page iiof ii
and to OPR at
This enters your
and HCD will send you the login
Please note: Using the online system only
Submittal Instructions
. Please send the Excel workbook, not a scanned or PDF
If you prefer to submit via email, you can complete the excel Annual
Online Annual Progress Reporting System (Preferred) - Email -
Housing Element Annual Progress Reports (APRs) forms and tables must be submitted to HCD and the Governor's Office of Planning and Research (OPR) on or before April 1 of each year for
the prior calendar year; submit separate reports directly to both HCD and OPR pursuant to Government Code section 65400.There are two options for submitting APRs: 1.information directly
into HCD’s database limiting the risk of errors. If you would like to use the online system, email APR@hcd.ca.govinformation for your jurisdiction. provides the information to HCD.
The APR must still be submitted to OPR. Their email address is opr.apr@opr.ca.gov.2.Progress Report forms and submit to HCD at APR@hcd.ca.govopr.apr@opr.ca.govcopy of the tables.
v 2_6_19
Please Start Here
2018
Hines
91910
Leilani
Chula Vista
Chula Vista
(619) 691-5263
276 Fourth Ave
lhines@chulavistaca.gov
Housing & Neighborhood Services Manager
Mailing Address
Contact Information
General Information
Jurisidiction NameReporting Calendar YearFirst NameLast NameTitleEmailPhoneStreet AddressCityZipcode
Annual Progress Report
+
Notes
(SB 35
65913.4(b)?
SUBMITTED
Streamlining)
StreamliningNotes Pursuant to GC
Was APPLICATION
Total
Total
Can Be
Project
Units by
Overwritten)
DISAPPROVED
Disapproved
Units by Project
(Auto-calculated
Total
Total
Project
Units by
Approved
APPROVED
Units by project
678910
Units by Project
Total PROPOSED
44433In-Review11In-Review44No Comment88In-Review
7272In-Review1616In-Review4646In-Review2323Applied2626In-Review
126126126106106In-Review159159Withdrawn141141Applied
Above
Income
Moderate-
Income
Non Deed
Moderate-Restricted
Moderate-Restricted
Income Deed
1735736130
5
Non Deed
Restricted
Low-Income
Low-Deed
Income
Restricted
A
e
bl
a
Deed
T
Very Low-
Restricted
Income Non
Very Low-Restricted
Income Deed
Housing Development Applications Submitted
Date
Date
Submitted
Application
Submitted
Application
34
Tenure
R=RenterO=Owner
2
Unit Category(SFA,SFD,2 to 4,5+,ADU,MH)
+
Tracking ID
Local Jurisdiction
DR18-0005ADUR04/03/201811In-ReviewDR18-00102 to 4R05/23/2018DR18-00255+R11/29/2018DR18-0029SFDO12/13/2018
+
OR VLG 2DR18-00232 to 4O11/15/2018
Project Name
DU
A
1
Project IdentifierUnit TypesProposed Units - Affordability by Household Incomes
T
BLRDSMILLENIA AVRevel MilleniaDR18-00275+R12/03/2018PW
6190101400354 MOSS STDR18-00165+O08/14/20186443111600CARPENTERIA STOR VLG 2DR18-0017SFDO08/17/20185734500500310 K STDR18-00195+R10/24/20185680710100201 THIRD AVDR18-00205+R10/25/20185684110200435
FOURTH AVDR18-00212 to 4 11/01/20186443100600SANTA VICTORIA 5684104100 353 ROOSEVELT 6180103200676 MOSS STDR18-00285+O12/04/201864312002001227 EASTLAKE
565-032-060049 OAKLAWN AVDR18-00035+R03/15/2018643-060-6200SOLSTICE AVPinnacle Millenia DR18-0004SFAO03/16/2018573-130-0600376 I ST618-151-1000571 MOSS STDR18-00072 to 4R04/26/2018622-071-14001350
INDUSTRIAL
Current APNStreet Address
+
Prior APN
Summary Row: Start Data Entry Below
a
5546111111111111
Above
Income
Moderate-
Moderate-
Income Non
Deed Restricted
Moderate-Restricted
Income Deed
Non Deed
Restricted
Low- Income
ffordability by Household Incomes - Certificates of Occup
A
Deed
Restricted
Low- Income
Deed
Very Low- Restricted
Income Non
Very Low- Restricted
Income Deed
133111114455544645543511111111111111111111111111
Building Permits
# of Units Issued
8910
8
Date Issued
Building Permits
104/05/201309/11/2018304/23/2018109/11/2018109/11/2018109/11/2018102/05/2018103/29/2018401/04/2018401/04/2018501/04/2018501/04/2018501/04/2018401/04/2018401/04/2018601/04/2018401/04/2018501/04/201850
1/04/2018401/04/2018301/04/2018501/04/2018101/04/2018101/04/2018101/04/2018101/04/2018101/04/2018101/04/2018101/04/2018101/04/2018101/04/2018101/04/2018101/04/2018101/04/2018105/31/2018105/31/2018105
/31/2018105/31/2018105/31/2018105/31/2018105/31/2018108/23/2018108/23/2018108/23/2018108/23/2018108/23/2018108/23/2018108/23/2018
Above
Income
Moderate-
Moderate-
Income Non
Deed Restricted
Moderate-Restricted
Income Deed
15176217773290
Non Deed
Restricted
Low- Income
Deed
Restricted
Low- Income
Deed
Very Low- Restricted
Income Non
Very Low- Restricted
Income Deed
Entitlements
# of Units issued
567
Entitlement
Date Approved
Above
Income
Moderate-
Moderate-
Income Non
Deed Restricted
Moderate-Restricted
Income Deed
Non Deed
Restricted
Low- Income
Deed
Restricted
Low- Income
Table A2
Deed
Very Low- Restricted
Income Non
Very Low- Restricted
Income Deed
Tenure
R=RenterO=Owner
Unit TypesAffordability by Household Incomes - Completed EntitlementAffordability by Household Incomes - Building Permits
Annual Building Activity Report Summary - New Construction, Entitled, Permits and Completed Units
234
Unit Category(SFA,SFD,2 to 4,5+,ADU,MH)
+
Tracking ID
Local Jurisdiction
BR15-00012 to 4BR15-00722 to 4OBR16-00392 to 4OBR16-0076SFDOBR16-0077SFDOBR16-0078SFDOBR16-0139SFDOBR16-02082 to 4OBR16-02092 to 4OBR16-02105+OBR16-0211SFAOBR16-02125+OBR16-02132 to
4OBR16-02142 to 4OBR16-02155+OBR16-02162 to 4OBR16-02175+OBR16-02185+OBR16-02192 to 4OBR16-02202 to 4OBR16-02215+OBR16-0352SFDOBR16-0353SFDOBR16-0354SFDOBR16-0355SFDOBR16-0356SFDOBR16-0357SFDOBR16-0
358SFDOBR16-0359SFDOBR16-0360SFDOBR16-0361SFDOBR16-0362SFDOBR16-0363SFDOBR16-0364SFDOBR16-0365SFDO
--------------
+
S
O
AAAAAAAAAAAAAAA
Project Name
MILLENICONDOMIINIUMSIGNATUREOR VLG 2 R-20 SIGNATUREOR VLG 2 R-20 SIGNATUREOR VLG 2 R-20 BELLA LAGMILLENIZMILLENIMILLENIMILLENIMILLENIMILLENIMILLENIZMILLENIMILLENIMILLENIMILLENIMILLENIMILLENIMILLENISE
VILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR
VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9
B
VVV
1
475 OXFORD ST A&CHRISTINA ACHRISTINA ACHRISTINA AWYWY 1-6LEVANTELEVANTELEVANTELEVANTELEVANTELEVANTELEVANTELEVANTEAMBIENTEAMBIENTEPALOMINOLEVANTEAMBIENTEPALOMINO
Project Identifier
0
Current APNStreet Address
61830104064306209002060 FOXTROT LPEvo61814218001084 BROADWAYLIMON 64434556001793 SANTA 64434557001797 SANTA 64434558001801 SANTA 58522154003212 CORTE MELANOVISTA DEL CIELO59509805002885
GATE THREE PLBR16-0149SFDO64306307012125 CELESTIAL WYZ 64306308051848 OBSERVATION 64306307512134 STELLAR WY 1-5Z 64306307562140 STELLAR WYZ 64306307272137 STELLAR WY 1-5Z 64306307712144
STELLAR WY 1-4Z 64306307232127 STELLAR WY 1-4Z 64306307351855 OBSERVATION 64306307132145 CELESTIAL WYZ 64306307882394 ELEMENT WYZ 64306307052135 CELESTIAL WYZ 64306307142126 CELESTIAL
WYZ 64306307322395 ELEMENT WYZ 64306307182136 CELESTIAL WYZ 64306308172019 ELEMENT WYELEMENT MILLENIABR16-0261SFDO64306308202031 ELEMENT WYELEMENT MILLENIABR16-0262SFDO64306308162015
ELEMENT WYELEMENT MILLENIABR16-0263SFDO64306308212035 ELEMENT WYELEMENT MILLENIABR16-0264SFDO64306308152011 ELEMENT WYELEMENT MILLENIABR16-0265SFDO64306308222039 ELEMENT WYELEMENT
MILLENIABR16-0266SFDO64306308182023 ELEMENT WYELEMENT MILLENIABR16-0267SFDO64306308192027 ELEMENT WYELEMENT MILLENIABR16-0268SFDO64306308232051 ELEMENT WYELEMENT MILLENIABR16-0269SFDO64306308252
059 ELEMENT WYELEMENT MILLENIABR16-0270SFDO64306308242055 ELEMENT WYELEMENT MILLENIABR16-0271SFDO64306308262063 ELEMENT WYELEMENT MILLENIABR16-0272SFDO64438649001148 CAMINO 64438646001132
CAMINO 64438647001138 CAMINO 64438645001128 CAMINO 64438650001152 CAMINO 64438644001124 CAMINO 64438648001144 CAMINO 64438655001174 CAMINO 64438653002005 PLAZA 64438652002009 PLAZA
64438660002007 AVENIDA 64438654001168 CAMINO 64438651002006 PLAZA 64438656002008 AVENIDA
+
Prior APN
Summary Row: Start Data Entry Below
+
21
Notes
Notes
+
Units
Renter
Owner or
Destroyed
Demolished/
+
20
Units
Destroyed
Demolished or
+
Demolished/Destroyed Units
Units
Destroyed
Number of
Demolished/
y
bilit
a
+
d
or
Aff
f
enter 1000)
erm o
(if affordable in perpetuity
orDeedRestrictionTerm of Affordability or
Deed Restriction (years)
T
e
l
a
i
nanc
Fi
t
ou
ith
affordable
(see instructions)
ng w
i
AssistanceorDeed
financial assistance or deed
restrictions, explain how the
ous
H
locality determined the units wer
ance
t
s
i
Type
ss
A
l
Deed Restriction
a
(see instructions)
i
nanc
Fi
ith
ng w
i
and/orDeedRestrictions
ous
(see instructions)
Each Development
H
Assistance Programs for
+
Y/N
Infill Units?
using GC
Y/N
65913.4(b)?
Was Project
StreamliningInfill
(SB 35 Streamlining)
APPROVED
+
Income?
units were
Extremely Low
How many of the
5546111111111111
293
readiness
Certificates of Occupancy or
other forms of
# of Units issued
111213141516171819
Issued
12/06/201812/07/201809/19/201809/20/201810/16/201810/16/201810/16/201810/23/201802/12/201910/17/201810/17/201810/16/201810/30/201810/31/201810/30/201811/05/2018
Certificates of
forms of readiness
Occupancy or other
(see instructions) Date
ncy
--------------
a
+
S
O
AAAAAAAAAAAAAAA
Project Name
MILLENICONDOMIINIUMSIGNATUREOR VLG 2 R-20 SIGNATUREOR VLG 2 R-20 SIGNATUREOR VLG 2 R-20 BELLA LAGMILLENIZMILLENIMILLENIMILLENIMILLENIMILLENIMILLENIZMILLENIMILLENIMILLENIMILLENIMILLENIMILLENIMILLENISE
VILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR
VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9SEVILLEESCAYA/OR VLG 3 R9
B
VVV
1
475 OXFORD ST A&CHRISTINA ACHRISTINA ACHRISTINA AWYWY 1-6LEVANTELEVANTELEVANTELEVANTELEVANTELEVANTELEVANTELEVANTEAMBIENTEAMBIENTEPALOMINOLEVANTEAMBIENTEPALOMINO
Project Identifier
0
Current APNStreet Address
Data Entry Below
61830104064306209002060 FOXTROT LPEvo61814218001084 BROADWAYLIMON 64434556001793 SANTA 64434557001797 SANTA 64434558001801 SANTA 58522154003212 CORTE MELANOVISTA DEL CIELO59509805002885
GATE THREE PL64306307012125 CELESTIAL WYZ 64306308051848 OBSERVATION 64306307512134 STELLAR WY 1-5Z 64306307562140 STELLAR WYZ 64306307272137 STELLAR WY 1-5Z 64306307712144 STELLAR
WY 1-4Z 64306307232127 STELLAR WY 1-4Z 64306307351855 OBSERVATION 64306307132145 CELESTIAL WYZ 64306307882394 ELEMENT WYZ 64306307052135 CELESTIAL WYZ 64306307142126 CELESTIAL
WYZ 64306307322395 ELEMENT WYZ 64306307182136 CELESTIAL WYZ 64306308172019 ELEMENT WYELEMENT MILLENIA64306308202031 ELEMENT WYELEMENT MILLENIA64306308162015 ELEMENT WYELEMENT
MILLENIA64306308212035 ELEMENT WYELEMENT MILLENIA64306308152011 ELEMENT WYELEMENT MILLENIA64306308222039 ELEMENT WYELEMENT MILLENIA64306308182023 ELEMENT WYELEMENT MILLENIA64306308192027
ELEMENT WYELEMENT MILLENIA64306308232051 ELEMENT WYELEMENT MILLENIA64306308252059 ELEMENT WYELEMENT MILLENIA64306308242055 ELEMENT WYELEMENT MILLENIA64306308262063 ELEMENT WYELEMENT
MILLENIA64438649001148 CAMINO 64438646001132 CAMINO 64438647001138 CAMINO 64438645001128 CAMINO 64438650001152 CAMINO 64438644001124 CAMINO 64438648001144 CAMINO 64438655001174 CAMINO
64438653002005 PLAZA 64438652002009 PLAZA 64438660002007 AVENIDA 64438654001168 CAMINO 64438651002006 PLAZA 64438656002008 AVENIDA
311818671929
Level
Total Remaining
RHNA by Income
34
91
572328
759985906914
Total Units to
Date (all years)
15
y
2
B
e
bl
a
T
Permitted Units Issued by Affordabilit
Regional Housing Needs Allocation Progress
6922
37118630211213
2013201420152016201720182019202020213042967689105910561777
1
4956230095668984910431762
320924392257
12861
by Income Level
RHNA Allocation
Deed RestrictedNon-Deed RestrictedDeed RestrictedNon-Deed RestrictedDeed RestrictedNon-Deed Restricted
Income Level
e
t
era
d
o
M
ove
Very LowLowModerateAbTotal RHNATotal Units 44Note: units serving extremely low-income households are included in the very low-income permitted units totalsCells in grey contain auto-calculation
formulas
11
Uses
Description of Existing
10
Vacant/Nonvacant
9
Realistic
Capacity
Maximum
Density Allowed
8
Sites Description
Minimum
Density Allowed
7
Zoning
6
Designation
General Plan
d
ee
N
ng
i
5
ous
(Acres)
H
ll
a
tf
or
Sh
e
t
4
a
d
C
Type of ShortfallType of ShortfallParcel Size
e
-
bl
a
ccommo
T
A
o
t
d
Income
bove Moderate
A
ezone
R
or
d
e
tifi
en
Id
3
es
Sit
Affordability by Household Income
2
Date of RezoneDate of RezoneVery-Low IncomeLow-IncomeModerate Income
+
Local
Jurisdiction
Tracking ID
+
Project Name
1
Project Identifier
APNStreet Address
E
Summary Row: Start Data Entry BelowNON
Table D
Program Implementation Status pursuant to GC Section 65583
Housing Programs Progress Report
Describe progress of all programs including local efforts to remove governmental constraints to the maintenance, improvement, and development of housing as identified in the housing
element.
1234
Name of ProgramObjectiveTimeframe in H.EStatus of Program Implementation
1.1.1 Rehabilitation of Continue implementation of the City’s 2021Two (2) mobilehomes and one (1) single family home were provided assistance for the
Owner Occupied Housing Community Housing Improvement Program repair/rehabilitation of their home through the City’s Community Housing and
(CHIP) for lowincome homeowers. Improvement Program. Program participation has fluctuated due to eligiblity levels of
Leverage its Home Upgrade, Carbon participants due to credit, home loan values and availability of contractors to complete
Downgrade (HUCD) program to better work.
serve low-income and moderate-income
residents.During 2018, the Property Assessed Clean Energy (PACE) programs, a private-public
Integrate the HUCD program into the City’s partnership, financed over 447 projects for a total of more than $13 million in energy
First-Time Homebuyers Program as an and water upgrades. Over 340 no-cost home and business energy evaluations
optional financing tool.conducted, which led to over 90% of residential participants implementing a
recommendedenergysavingbehaviororretrofit
1.1.2 Encourage Climate To support the City of Chula Vista’s 2021During 2018, staff further incorporated resiliency to climate change into City operations
Resilient Design Climate Action Plan and its related goals, through completing the Water Stewardship Plan that evaluates how we can reuse
Techniquesthe City supports the following design water in our community to increase water resiliency. The Property Assessed Clean
measures to improve climate change Energy (PACE) program, reference Section 1.1.1, provides residents and businesses
resilience: design natural ventilation and with financing for energy and water upgrades, which improve their resiliency. To
passive solar into residential buildings; date,the PACE program has financed over 210 projects for a total of more than $5
limit internal heat by specifying high-million in energy and water upgrades.
efficiency lighting and equipment;
modeling of energy performance with
higher cooling design temperatures; avoid
building in flood zones; elevate mechanical
and electrical equipment to minimize
damage and danger from flooding; specify
Class A roofing to reduce risk of wildfire;
and design buildings to maintain livable
conditions in the event of loss of power or
heating fuel, or shortages of water.
1.1.2 Neighborhood Support a program focusing financial As resources are availableInfrastructure: Chula Vista voters approved Measure P – a temporary, ten-year, half-
Revitalizationresources and efforts that improve the cent sales tax to fund high priority infrastructure needs. Collection of the sales tax
(Note: Program numbering conditions and appearances of began April 1, 2017. Notable improvements were made (in 2018) to public
duplicative in HE)neighborhoods. This on-going program infrastructure and facilities, streets, civic and south libraries, recreation and senior
will target specific low-and moderate-centers, sports fields and courts, park improvements, traffic signals, and other
income neighborhoods within Western improvements. A comprehensive list of improvements can be found on the City’s
Chula Vista that can be leveraged with website at www.chulavistaca.gov/measurep.
other public and private investments.
Parks: The City received a HCD Housing-Related Parks (HRP) Program Grant in late
2017. In 2018, planning functions were underway for the improvements to Friendship
Park. The project is scheduled to be completed by June 2019.
Litter: In 2018, the Beautify Chula Vista Day event (funded by a California Redemption
Value grant) was 454 volunteers came out to Otay Valley Regional Park to remove
graffiti removal, pick up of litter and clear invasive vegetation, Memorial Park for graffiti
removal, painting, and pick up of litter, Terra Nova Park for planting of native plants,
painting utility boxes, sign installation, graffiti removal and pick up of litter, and Chula
Vista Community Park for graffiti removal and pick up of litter.
1.1.3 Rental Housing As part of a comprehensive neighborhood As resources are availableThe City continues to meet with developers as contacted regarding the inclusion of
Rehabilitationrevitalization strategy, the City seeks to affordable housing units into existing multifamily housing. Due to current rental
provide financial assistance to private housing market, (e.g high rents and low vacancy rates), there is a lack of interest by
property owners of existing and private property owners in participating in this program.
deteriorating multifamily rental housing
within Northwest and Southwest planning
areas and requiring the property owner to
set aside a number of housing units for
lower income households at affordable
rents. Efforts will be made to target
properties in such areas where privately
initiated improvements in other
neighborhood developments may be
1.1.4 Rental Housing As part of a comprehensive neighborhood As resources are availableDue to the current competitive housing market, the City is unable to acquire and
Acquisition and revitalization strategy, the City Seeks to rehabiltate property.
Rehabilitationacquire and rehabilitate existing rental
housing throughout the Northwest and
Southwest planning areas of the City and
set aside a number of the housing units for
very low-income and/or special needs
householdsataffordablerents
1.1.5 Funding for Housing Support applications for available Federal 2021Due to the City’s budgetary reductions, funding levels, priority needs and scoring
Related Environmental or State funding to reduce housing related criteria, the City did not respond to the U.S. Department of HUD NOFA’s for its Healthy
Hazard Control environmental hazards, including lead Homes and Lead Hazard Control Programs.
hazard control, building structural safety,
electrical safety, and fire protection to
address multiple childhood diseases and
injuries in the home, such as the Healthy
Homes Initiative.
1.2.1 Multifamily Housing Provide for the continuance of a 2021Code Enforcement staff began inspections in 2018 on 12 apartment communities
Inspectionmultifamily inspection program that through the City’s Rental Housing Program. Code Enforcement opened 771 cases for
evaluates conditions of rental housing individual apartments resulting from inspections of apartment communities initiated in
complexes of three or more units and 2018 and in the previous year.
reports violations to the City’s Code
Enforcement Division regarding current
health and safety codes. The City will
follow up on all reports of violations to
ensure the correction of any identified
deficiencies
1.2.2 Mobilehome Provide for the continued systematic 2021Through Title 25, Code Enforcement staff has completed inspections at Trailer Villa
Inspection Programinspection of mobilehome and trailer park Mobilehome park with 118 mobilehome spaces. The initial preparations for inspection
communities for compliance with Title 25 of of Chula Vista Mobilehome Park with 166 spaces began in late 2018.
the California Code of Regulations to
promote safe and sanitary housing and
neighborhoods
1.2.3 Code Enforcement Continue Code Enforcement activities that 2021Due to the growing foreclosure issue in Chula Vista, the City adopted a Residential
Activitiesproactively monitor housing and Abandoned Properties Program (RAPP) ordinance in August 2007, which requires
neighborhood conditions for adherence to mortgage lenders to inspect defaulted properties to confirm that they are occupied. If a
minimum standards of habitability and property is found to be vacant, the program requires that the lender exercise the
appearance by responding to service abandonment clause within their mortgage contract, register the property with the City
requests from concerned citizens. and immediately begin to secure and maintain the property to the neighborhood
standard. For 2018, twenty-eight (28) residential properties were registered in the
Abandoned Residential Properties Program (4 condominium and 24 single family
properties)
Code enforcement staff responded to 740 residential (e.g. apartments, duplexes,
condominiums, mobile homes and single-family homes) complaints during 2018. For
condos and single-family dwellings such activities included unpermitted construction,
trash junk and debris, inoperable vehicles related. Forty-six of the complaints were
related to apartment communities for such activities as mold, roach/rodent infestations
2.1.1 Water Conservation Promote the inclusion of state-of-the art 2021During 2015, residential and commercial buildings met the Green Building Standard,
Practiceswater conservation practices in existing which requires a 20% reduction in potable water use (compared to national standards)
and new development projects where in new construction and major renovation projects and met the requirement for laundry
proven to be safe and environmentally water re-use pre-plumbing. Through its SDG&E Local Government Partnership, the
sound through targeted policies and City also distributed 23 water-savings devices to existing residences and businesses in
incentives in partnership with the local 2018. Finally, the PACE program, as mentioned in Section 1.1.2, helped fund indoor
utilities. These practices can include, but and outdoor water conservation measures in existing buildings.
are not limited to, low-flow plumbing
fixtures, and EPA WaterSense-labeled
li
2.1.2 Landscaping-Specific Promote the use of low water demand 2021The City continues to promote low water demand landscaping through its revised
Water Conservation (WaterSmart) landscaping, which Landscape Water Conservation Ordinance (large parcels) and Outdoor WaterSmart
Strategiesincorporates high efficiency irrigation and Guidelines & Checklist (small parcels), both of which guide landscaping projects
drought-tolerant plant materials in existing towards high water use efficiency.
and new development. When developing
landscape designs, encourage the minimal
use of turf areas and the implementation of
the City’s Shade Tree Policy, which
requires a certain percentage of shade
coverage within parking lots and along
streets excluding alleyways. Water reuse
techniques, such as graywater systems,
rain water harvesting, and recycled water,
to meet outdoor landscaping water
demand should be encouraged.
2.1.3 New Development - Continue to develop, update, and enforce 2021The City continues to promote low water demand landscaping through its revised
Specific Water water-related building codes and Landscape Water Conservation Ordinance (large parcels) and Outdoor WaterSmart
Conservationdevelopment requirements such as the Guidelines & Checklist (small parcels), both of which guide landscaping projects
City’s Landscape Water Conservation towards high water use efficiency.
Ordinance, Green Building Standard,
Design Manual, and Water Conservation The City continues to require Water Conservation Plans for large developments (over
Plan Guidelines (or their equivalent) as 50 dwelling units or equivalent) which emphasize both indoor and outdoor water use
part of the residential development review efficiency and requires homes to be pre-plumed for water re-use systems from clothes
and approval process. Developers shall washers.
provide homebuyers with an “Outdoor
WaterSmart Package” at occupancy, which
also includes information about the City of
Chula Vista NatureScape program.
2.1.4 Public Education for Promote water conservation, efficiency, 2021The City continues to work with the Sweetwater and Otay Water Districts in to host
Water Conservationand reuse in the community by providing community educational workshops, and distributing general water efficiency
appropriately targeted public education educational materials. We also created a mobile display that explains how residents
and by offering free technical assistance in can install Laundry-to-landscape systems in their own home which was displayed at
partnership with the local water districts.community events and public buildings. In addition, the City provides free home and
business water evaluations and has distributed water-saving devices over the last year.
2.2.1 General Energy Maximize energy efficiency and integrate 2021The City encourages energy efficiency, renewable energy, and other green building
Efficiency and Renewable renewable energy into existing and new technologies and design principles in new and existing developments. During 2018,
Energy Strategies development projects through appropriate the City provided over 286 no-cost business energy evaluations and 100 home energy
site and building design, energy efficient evaluations were conducted, which has led to participants implementing a
materials and appliances, onsite recommended energy-saving behavior or retrofit.
renewable energy systems, and home
energy performance ratings by developing
targeted policies consistent with the
California Long-Term Energy Efficiency
Strategic Plan and by offering incentives in
coordination with San Diego Gas & Electric
2.2.2 New Development - Continue to develop, update, and enforce 2021The City encourages energy efficiency, renewable energy, and other green building
Specific Energy energy-related building codes and technologies and design principles in new and existing developments. In more recent
Conservation Requirementsdevelopment requirements. Applicable years, California Building Codes are reflecting the need to implement more energy
codes and development requirements efficient construction, with more significant changes occurring with Code updates
include, but are not limited to, the City’s effective January 2018. To assist developers, contractors and other industry
Enhanced Energy Efficiency, Green stakeholders, the City in partnership with SDG&E has held numerous brown bag lunch
Building (includes Cool Roof standards), events on building code requirements, new programs, and other relevant information.
and Solar Ready ordinances (or their The City continues to provide a “Sustainability Desk” at the building permit counter to
equivalent) as part of the residential provide technical assistance on energy conservation and other green building topics.
development review and approval process.
2.2.3. Zero Net Energy Facilitate progress towards the 2021See comments Section 1.1.1.
Home Targetdevelopment of “Zero Net Energy”
residential buildings, which have a net
energy consumption of zero over a typical
year as envisioned by the California Long-
Term Energy Efficiency Strategic Plan.
This progress will be accomplished by
creating developer incentives (such as
expedited permitting or reduced permit
fees) and by leveraging state and federal
housing funds administered by the City’s
Housing Division.
2.2.4 Public Education for Promote energy efficiency and renewable 2021The City continues to provide energy-related materials and services through free
Energy Conservationenergy in the community by providing energy evaluations, community outreach events and the Library Energy Lounges. The
appropriately targeted public education City continues to sponsor a “Sustainability Desk” at the building permit counter to
and by offering free technical assistance in provide technical assistance on energy conservation and other green building topics.
partnership with San Diego Gas & Electric.
3.1.1 Integration of Land The City’s General Plan, including this 2021In 2014, City staff participated in SANDAG regional workshops regarding the
Use Planning and Transit 2013 – 2020 Housing Element, promote a incorporation of Transportation Demand Management (TDM) into the Development
land use pattern that is anticipated to Process. TDM refers to programs and strategies that manage and reduce traffic
reduce Vehicle Miles Traveled (VMT) and congestion during peak travel times. Two Specific Planning Area's (SPA's), Millennia
result in the region meeting or exceeding and Village 8 East, will include TDM.
the targets established by the California
Air Resources Board (CARB). The key The City of Chula Vista’s Sustainable Communities Program (SCP) seeks to promote
component of the 2013 – 2020 Housing energy efficiency and reduce green house gas emissions in the planning and building
Element will be to promote the integration process and in neighborhood design.
of land use planning and transit, whereby:
the City encourages the use of incentives, In 2013, the SCP developed a modeling tool for energy efficient community and site
when available, for mixed-use planning standards. The model is based on LEED’s Neighborhood Development rating
development, which includes housing, system, which integrates the principles of smart growth, New Urbanism and green
retail, and office space, at transit nodes building and encourages better neighborhood planning and development by assisting
and other high-intensity locations as developers to select the appropriate mix of energy efficient features to maximize their
appropriate. The City supports site’s sustainability score. This evaluation tool continues to be available on the City’s
implementation of the San Diego website.
Association of Governments (SANDAG)’s
Sustainable Communities Strategy (SCS), In 2016 construction began on a Bus Rapid Transit (BRT) line (aka "South Bay Rapid")
including the adopted Regional Housing that will connect eastern Chula Vista to downtown San Diego. Service began in
Needs Assessment (RHNA) Plan, which February 2019. Operated by the Metropolitan Transit System (MTS), South Bay Rapid
includes the following: increasing the provides a frequent and reliable transportation alternative for South County travelers.
housing supply and the mix of housing Upon its final completion, it will span a 21-mile route, connecting residents to
types, tenure, and affordability in an employment and activity centers downtown San Diego and the South Bay.
equitable manner, promote infill
development and socioeconomic equity,
the protection of environmental and
agricultural resources, and the
encouragement of efficient development
patterns, promote an improved
intraregionalrelationshipbetweenjobsand
4.1.1 Expiring Affordability Proactively work with property owner(s) of 2012-2016The City continues to work with those property owners who own affordable housing
Restrictions"at-risk" assisted housing developments where recorded covenants are nearing expiration. In 2018, the City continued to
whose affordability restriction are due to monitor those projects with expiring affordability restrictions. There are no projects
expire by 2020, as identified within expiring in 2018 through 2020. The City and Housing Authority implements and has
Appendix A of this Element, and affordable incorporated the provisions of Section 52080(g) the California Health and Safety Code
housing developers to evaluate the and Sections 65863.10 and 65863.11 of the California Government Code into its
viability of continuing the affordability of policies and regulatory agreements for new projects. The Housing Authority continues
such housing through owner participation, to work with those affordable housing communities seeking to refinance or restructure
public subsidies, or participation, public to incorporate additional public benefit in the form of deeper income targeting,
subsidies or participation by affordable additional rent restrictions, including additional rent restricted units, the extension of
housing developers. the existing term of restrictions, or any combination therefore may be negotiated.
4.2.1 Monitoring of Units Comply with State Law regarding the AnnuallyIn 2018, no units occupied by low or moderate-income households in the Coastal Zone
Lostmonitoring and reporting of housing units were lost or demolished.
occupied by low-or moderate-income
households demolished within the Coastal
Zone.
4.2.2 Replacement HousingWhere conversion or demolition of housing 2021See comments in 4.2.1.
units in the Coastal Zone is occupied by
low-or moderate income households is
proposed, replacement of such housing
will be completed in accordance with State
Law and the City's adopted Local Coastal
Plan
5.1.1 Affordable Housing Continue to implement the Balanced 2021The City continues to implement this objective through the Affordable Housing Program
("Inclusionary") Policy Communities-Affordable Housing Policy requiring new residential developments of 50 units or more to provide 10% of the
first adopted by the City’s Housing Element housing for low and moderate income households. In 2018, the City began
in 1981 and any implementing guidelines discussions with the property owner of Escaya in Otay Ranch regarding development
as adopted and updated. For all new of an affordable rental community.
residential projects consisting of 50 or
more dwelling units,10 percent of the
residential units within the development
(“on-site”) shall be affordable to low and
moderate income households (5 percent
low-income and 5 percent moderate-
income)
5.2.1 First Time Homebuyer Continue assistance to low-income 2021The City continues to contract with SpringBoard CDFI (formerly known as Community
Assistancehouseholds in purchasing their first home HousingWorks Realty and Lending) to administer the City’s First Time Homebuyer
through the City’s First Time Homebuyer program. In 2014, the City was awarded $1,000,000 in CalHome funds to assist first
Down Payment and Closing Cost time homebuyers. In 2018, with the final expenditure of CalHome funds, the City
Assistance Program. Consider leveraged other additional monies from its HUD HOME funds and Balanced
amendments, as necessary, to the Communities Program to assist 10 households close escrow.
Program to adequately reflect real estate
marketconditions
5.2.2 Mortgage Credit Continue to participate with the County of 2021The MCC program is administered by CalHFA. The City’s non-profit partner,
Certificates (MCC)San Diego and other cities to issue and SpringBoard CDFI( formerly Community HousingWorks) is authorized the provide
renew Mortgage Credit Certificates (MCC) MCC's to eligible households in the San Diego Region, including Chula Vista, and has
to qualified first-time low-and moderate-leveraged the MCC program with its down payment assistance to assist 10 new
income homebuyers. First-time homeowners in 2018.
homebuyers are referred by the
Development Services Department to the
administratingagency
5.2.3 Homebuyer Education Support and encourage developers, As funds are availableUnder its contract with SpringBoard CDFI (formerly known as Community
and Counselinglenders and social service organizations to HousingWorks Realty and Lending), SpringBoard offers bilingual homebuyer education
provide educational programs, loan (HBE) and foreclosure counseling. A website for the City’s homebuyer program offered
counseling, and materials for homeowners through Springboard was created to provide additional information about the program
and potential homeowners on home and homebuyer education at http://www.springboard.org/chulavista/. In 2018, those
maintenance, improvement, and financial homebuyers participating in the City’s assistance programs were provided with pre-
management. The purpose of these purchase counseling and homebuyer education.
educational programs will be to help first-
time homebuyers prepare for the purchase As a result of a 2016 outreach event held at and sponsored by the City of Chula Vista,
of a home and to understand the with over 150 rsvp’s received, significant momentum and interest was generated for the
importance of maintenance, equity available funds.
appreciation, and personal budgeting to
minimize foreclosure rates.
5.2.4 Support Private Support and encourage lenders, Staff will continue to support and seek non-traditional approaches as opportunities
Financial Assistance Development Services organizations and exist.
Programsothers to use non-traditional financial
approaches to assist low-and moderate-See comments listed above for Programs 5.2.1 - 5.2.3.
income first-time homebuyers such as
Individual Accounts and other emerging
financialapproaches
5.3.1 Mobilehome Space Continue to enforce CVMC Chapter 9.50 to 2021The City continues to monitor and enforce the Mobilehome Space Rent Review
Rent Reviewprotect mobilehome residents’ investment Ordinance (Chula Vista Municipal Code “CVMC” Chapter 9.50). In 2018, over 2,400
in their home while at the same time residents paid the administrative fee providing residents with rent control services as
providing a reasonable return to the park desired.
owner in order to preserve this housing
alternative.In 2018, the Mobilehome Rent Review Commission continued to meet on a quarterly
basis to receive information and education on matters related to mobilehome living in
Chula Vista and other relevant matters that would assist them in their duties prescribed
under CVMC Chapter 9.50. The Commission did not review any proposed rent
increases.
5.3.2 Resident Ownership of Promote the purchase of those 2021No mobilehome/trailer parks were listed for sale in 2018.
Mobilehome Parksmobilehome parks with a Mobilehome Park
(MHP) zone designation by park residents,
when a park becomes available for sale in
accordance with CVMC Chapter 9.60 (Sale
of a Mobilehome Park). Accordingly,
resident organizations shall have a right to
purchase a park listed for sale if the
organization is able to reach an acceptable
price and terms and conditions with the
mobilehome park owner. Financial
assistance that may be provided by the
State, or other funding sources may be
limited to income eligible residents and
require affordable housing costs.
5.3.3 Mobilehome Park Continue to enforce CVMC Chapter 9.40 to 2021The City will continue to enforce CVMC 9.40 if and when a park is proposed for
Conversionprotect the rights of residents as closure.
mobilehome/trailer parks are closed or
convertedtootheruses.
6.1.1 Homeless & "At-Risk" Continue to participate in regional planning 2021The City continues to participate in regional organizations focused on housing and
Homeless-Regionalefforts to address needs of the homeless, other needs of the homeless or near homeless population. In January 2017, such
Planningincluding the Regional Task Force on the regional bodies providing for data information and studies related to homelessness (the
Homeless and the South Bay Homeless Regional Taskforce on the Homeless) and the Regional Continuum of Care Council,
Coalition.required by the U.S. Department of Housing and Urban Development for funding were
merged to form one regional governance board now known as the Regional Taskforce
on the Homeless (“RTFH”). With one regional body, it is anticipated that the merger
will unify the countywide effort to help the homeless while operating more efficiently
and with more transparency. Chula Vista continuums to participate in the RTFH as a
member in the full membership meetings and Board meetings. As an ESG entitlement
jurisdiction, the RTFH must consult with the City. In 2018, the RTFH will be completing
a long term strategy to reduce homeless in San Diego County.
In light of the regional approach being undertaken and the establishment of the Chula
Vista Homeless Outreach Team, the South Bay Homeless Advocacy Coalition
disbanded in 2016.
6.1.2 Homeless & "At-Risk Continue to support regional funding 2021In 2017, HUD implemented the “housing first” model and the Coordinated Entry System
Homeless"-Regionalefforts to develop new housing facilities for (“CES”) as best practices in addressing the needs of the homeless. Under the housing
Fundingthe homeless and maintain existing first model, barriers to housing are eliminated with the priority to house homeless
facilities and services, including the coming first with no requirements for participation in housing services. The CES is the
Regional Continuum of Care Council for first step in the housing system that allows for an assessment, using a nationally
San Diego County and its application for recognized common assessment tool that seeks to determine the current situation and
funding through the Federal Supportive needs of the individual being assessed. Based on the answers to the questions, the
Housing Program, local FEMA Board, tool is designed to help providers throughout the San Diego match each individual with
County of San Diego Hotel/Motel Voucher the most appropriate housing solution depending on their particular circumstances. The
Program and temporary winter shelters.CES is a move towards looking at regional approaches to address homelessness and
informing local decisions to meet the demand for housing.
With the changes in practices, Chula Vista and South Bay Community Services (SBCS)
as the primary service agency that provides homeless shelter and services in Chula
Vista are continuing to make adjustments to its operations and funding process and
priorities.
SBCS operates four transitional living programs and the City has continued to allocate
on an annual basis CDBG and ESG funds to SBCS for housing services. In 2018, the
City funded the housing programs, as well as housing navigation services, tenant
based rental assistance and hotel/motel vouchers serving as “bridge” housing for
homeless in process of entering into a housing program to be administered by SBCS.
The City also provides annual funding for the Rotational Shelter Network program to
provide shelter to homeless at various congregational sites throughout the County,
including Chula Vista. The City continues to implement a Homeless Outreach Team,
including 2 police officers and 1 PERT Clinician, along with community clean up of
public areas such as parks, sidewalks, and open space areas. The City is partnering
with the County of San Diego in the "Project One for All" aimed at housing homeless
with Severe Mental Illness and anticipates a coordinated assessment of homeless and
placementintohousing
6.1.3 Existing & New Continue in-kind and financial assistance 2021See comments in 6.1.1 and 6.1.2.
Emergency Shelters & for existing and new emergency shelters The City continues to provide funding to South Bay Community Services (SBCS) to
Transitional Housingand transitional housing facilities that operate its housing programs. SBCS receives $63,000 annually from the City’s
serve the City by providing technical Emergency Solutions Grant funding to serve approximately 90 extremely low-income
assistance, siting opportunities, grants, or homeless individuals and families that meet HUD’s definition of homelessness.
low cost loans to operating agencies.In recent years, the City has acquired 3 residential units that are used to provide
housing for chronic homeless with mental health issues with wrap around services
provided by the County of San Diego's Health and Human Services. Additionally, the
City makes available Tenant Based Rental Assistance for another 2 individuals through
this program. All units are fully occupied. The City continues to seek opportunities to
partner with affordable housing developers for the development of permanent
supportive housing.
6.1.4 Tenant Rental Implement a homeless prevention program 2021See comments in 6.1.1 and 6.1.2.
Assistanceproviding rent subsidies for those at-risk of Since 2013, the City has contracted with South Bay Community Services (SBCS) to
becoming homelessadminister housing programs funded through Emergency Solutions Grant (ESG),
HOME and CDBG to assist those homeless or at risk of being homeless. SBCS
administers the City’s Rapid Re-housing program for those households experiencing a
recent incident of homelessness (at 30% or less of AMI) for up to 2 years of rental
assistance and a Homeless Prevention program for short term assistance not to
exceed 3 months.
During 2018, the Section 8 program administered by the County of San Diego issued
2,585 vouchers in Chula Vista, 1,079 to elderly and 242 to large families. 26,630
households remain on the waiting list at the end of 2018, the majority of those families
(13,786).
6.1.5 Information on Distribute informational materials to 2021Staff continues to provide updated information on basic resources on the City's website
Resources for Basic Needsprovide contact information regarding and at the public counters. A Community Resources guide, which provides local and
basic needs, such as emergency food, regional contact information for services ranging from emergency shelter and food to
shelter, and services for the homeless. legal assistance and health services is available and provided at public counters and
Materials can be distributed on an as used by the CVPD HOT during its weekly outreach and other outreach events to the
needed basis at public/civic center public homeless. The Community Resources Guide, along with many other informational
counters and by City personal in regular materials, are available at City's Development Services public counter. The City works
contact with homeless or near homeless closely with South Bay Community Services, the lead homelessness agency, and its
households.Homeless Outreach Team to ensure that all informational material is updated on a
regular basis and made available to households seeking information and resources.
See comments in 6.1.1.
6.2.1 Second Dwelling UnitsContinue to allow construction of new 2021In 2018, 20 applications were submitted for accessory second dwelling units. 8 permits
accessory secondary dwelling units in were actually issued with 2 completed, 1 withdrawn, and the remaining in process of
areas where the units do not compromise review and issuance.
the neighborhood character, as defined in
Section 19.58.022, Accessory Second
Dwelling Units, of the Chula Vista
Municipal Code as needed to facilitate and
encourage development.
6.2.2 Shared LivingSupport private programs for shared living 2021Given the significant need for affordable housing, City policies continue to support
that connect those with a home and are alternative housing types and living arrangements. While the City has provided past
willing to share living accommodations with financial support to social service providers offering shared housing services in 2006,
those that are seeking housing, particularly the local social service agency that provided shared living referrals ceased this service.
seniors, students, and single person
households. The City can identify the The City has identified a possible partnership with another active shared housing
programs offered in the community and service and is working towards expanding their services within the Chula Vista
assist in program outreach efforts for community as a viable housing option. Continuing discussions occured in 2018 but no
shared living programs through funding source identified.
advertisements in the City's website and
placement of program brochures in key
community locations.
6.2.3 Co-HousingEvaluate the viability of co-housing where 2021This program is identified as a Level 2 priority. Due to the City’s current budgetary
residents share common facilities (e.g., reductions, review and amendments of the City’s Municipal Code are being completed
cooking facilities) and amendments to Title on an as needed basis. Any proposal to provide co-housing will be evaluated and
19 of the Chula Vista Municipal Code and processed on a project-by-project basis. In March 2018, the City hired a new senior
other documents, where appropriate, to planner position with the responsibility of reviewing and updating Title 19. Staff is
facilitate its development.focused on updates to the City’s zoning code and specific plans consistent with
legislative actions affecting residential development in effect as of January 2018 and
review of other possible land use issues. Notable achievements include updates to
zoning code for ADUs, JADUs, emergency shelters, supportive and transitional
housing, employee housing, and residential care facilities.
The City will continue to develop and partner with other agencies and providers
regarding other alternative living options and housing types, such as shared housing.
6.2.4 Accessible Housing Continue to maintain and implement 2021Title 1 and Chapter 19.14 of CVMC (“Reasonable Accomodations”) provides for a
RegulationsCalifornia Title 24 provisions for the review formal procedure to consider whether a land use development standard or regulation of
and approval of residential developments.the City's can be modified or exempted in order to allow an individual with a disability to
occupy their home.
In December 2017, the California Tax Credit Allocation Committee adopted regulations
for its programs requiring minimum construction standards to address mobilility,
hearing, vision and other sensory impairments. 10% of units must be made accessible
to those with mobility impairments and 4% of units for hearing, vision, or other sensory
impairments. TCAC Regulation Sections 10325(f)(7)(K) and 10326(g)(6) require
projects to adhere to the provisions of California Building Code Chapter 11(B)
regarding accessibility to privately owned housing made available for public use.
In 2018, two (2) affordable housing developments totaling 58 units were acquired and
will be rehabilitated in accorandance with the new requirements under TCAC
regulations.
7.1.1 Specific PlansDevelop and consider for adoption Specific 2013-14The Palomar Gateway District Specific Plan was adopted in August 2013. Since its
Plans for the Southwest Planning Areas in adoption, there has been development interest in the area. In 2015 a 21-unit
order to implement the housing-related residential project was completed at 778 Ada Street. In 2016, four new residential
land use policy General Plan Update of projects were issued building permits. No new residential permits were issued for this
2005.area in 2017.
In September 2015 the Main Street Streetscape Master Plan was approved by City
Council. The Plan is being implemented as funding becomes available and/or as
developers develop property along the corridor.
7.1.2 ZoningUpdate Title 19 of the Chula Vista 2021Due to the City’s current budgetary reductions, review and amendments to Title 19 of
Municipal Code, to implement housing-the City’s Municipal Code (zoning) are being completed on an as needed basis. In
related land use policy contained in the March 2018, the City hired a new senior planner position with the responsibility of
General Plan Update of 2005.reviewing and updating Title 19.
See comments in 7.1.1 and 7.4.1.
7.1.3 Emergency SheltersThe City will amend its Zoning Ordinance 2013-14Ordinance No. 3442 of the City of Chula Vista amending various sections of Title 19
within one year of adoption of the Housing “Planning and Zoning” of the City of Chula Vista Municipal Code to address compliance
Element to address emergency shelters, with State laws governing supportive residential land uses (e.g. emergency shelters,
and permit this use by right, without single room occupancy residences, transitional and supportive housing, residential
requiring a CUP, PUD or other discretional facilities, and qualified employee housing) was passed on October 16, 2018, effective
action within identified zones, consistent on November 23, 2018.
with Senate Bill 2 (Housing Accountability)
enacted in 2007. The zones being
considered are the General-Industrial (I-G)
and/or Limited Industrial (I-R) zones and
the Community Purpose Facility within the
Planned Community (P-C) zone.
7.1.4 Transitional and The Zoning Ordinance will be amended to 2013-14Ordinance No. 3442 of the City of Chula Vista amending various sections of Title 19
Supportive Housingspecifically define transitional/supportive “Planning and Zoning” of the City of Chula Vista Municipal Code to address compliance
housing. Transitional housing, pursuant to with State laws governing supportive residential land uses (e.g. emergency shelters,
Health and Safety Code Section 50675.2, single room occupancy residences, transitional and supportive housing, residential
and supportive housing, pursuant to Health facilities, and qualified employee housing) was passed on October 16, 2018, effective
and Safety Code 50675.14, will be on November 23, 2018.
permitted as a residential use in all
residential uses and subject to the same
development standards as the same type
of housing units in the same zone
consistent with Senate Bill 2 (Housing
Accountability) enacted in 2007.
7.1.5 Single Room The Zoning Ordinance does not contain 2013-14Ordinance No. 3442 of the City of Chula Vista amending various sections of Title 19
Occupancy (SRO) Unitsspecific provisions for SRO units. The City “Planning and Zoning” of the City of Chula Vista Municipal Code to address compliance
will amend the Zoning Ordinance to with State laws governing supportive residential land uses (e.g. emergency shelters,
facilitate the provision of SRO's, consistent single room occupancy residences, transitional and supportive housing, residential
with the Assembly Bill 2634 (Housing for facilities, and qualified employee housing) was passed on October 16, 2018, effective
Extremely Low-Income Households) on November 23, 2018.
enactedin2007
7.1.6 Farmworker HousingThe Zoning Ordinance will be amended 2013-14Ordinance No. 3442 of the City of Chula Vista amending various sections of Title 19
within one year of adoption of the Housing “Planning and Zoning” of the City of Chula Vista Municipal Code to address compliance
Element to comply with Section 17021.5 with State laws governing supportive residential land uses (e.g. emergency shelters,
and 17021.6 of the State Health and single room occupancy residences, transitional and supportive housing, residential
Safety Code regarding employee housing. facilities, and qualified employee housing) was passed on October 16, 2018, effective
onNovember232018
7.1.7 Flood HazardPursuant to Assembly Bill 162, amend the 2013-14The City's Environmental Element contains a policy related to flood hazard
safety and conservation elements of the management, as well the City's Municipal Code and are consistent with the Housing
City's General Plan upon adoption of the Element.
City's Housing Element to include an
analysis and policies regarding flood
hazards and management. Upon the
amendment of the safety and
conservations elements, the City will
review the adopted Housing Element to
maintain internal consistency and amend
the Element as may be necessary.
7.2.1 Priority ProcessingContinue to implement priority processing 2021Chula Vista offers expedited permit processing for certain development projects,
of the necessary entitlements and plan including affordable housing. Affordable Housing Developers can request the
checks to expedite the development expedited program to ensure the project is placed into service by the required
process for residential developments, deadlines established by the funders of the project (i.e. tax credit investors). All
which do not require extensive affordable housing projects have been provided with this service.
Engineering or environmental review, with
at least 15 percent of the units as
affordable for very low-and low-income
households. Update the expedite policy as
may be necessary to encourage the
development of affordable housing for
lower income households.
7.2.2 Development FeesVarious fees and assessments are As requestedSee comments in 7.2.1.
charged by the City to cover the costs of As needed based upon financial feasiblity, the City may offer waiver and/or deferral of
processing permits and providing services certain fees. In 2016, as part of the City's financial assistance to Duetta and Volta
and facilities. Continue to consider senior affordable housing developments, approximately $2,000,000 in fees were
subsidizing, waiving, or deferring fees for waived/deferred. For rental housing development proposed within the infill urbanized
affordable units for very low- and low-area of the City, west of I-805, the City offers a development fee deferral program as
income households on a case-by-case incentive to those developments. In 2018, the City ameded its Muncicipal Code to
basis. Requests are evaluated based upon allow for the waiver/deferral of certain fees for accessory dwelling units.
the development's effectiveness and
efficiency in achieving the City's
underserved housing needs, particularly
extremely low and special needs
households as allowed by the City's
MiilCd
7.2.3 Water/SewerThe City of Chula Vista will provide a copy 2013-14; Within 30 days of The City provided a copy of the adopted Housing Element to the Otay Water District
of the adopted Housing Element to the adoption of the Housing and Sweetwater Authority.
Otay Water District and Sweetwater Element
Authority within 30 days of adoption. The
City will also continue with the District to
ensure affordable housing developments
receive priority water service provision.
7.3.1 Pursue Affordable Continue to utilize the eCivis software 2021As opportunities become available for funding, the City actively pursues partnerships
Housing Fundingprogram to proactively pursue available and as a City to apply for such funding. Past awards include application with SBCS for
Federal or State funding to increase, the Promise Zone designation in November 2013. In 2014 the City of Chula Vista was
preserve and enhance housing affordable successful in a grant application for CalHOME funds towards the creation of first-time
to low-income householdshomebuyer opportunities. The City has partnered with the County of San Diego Health
and Human Services Department to provide housing and wrap around services for
homeless with mental health illnesses. Staff continues to search for, and apply for
affordable housing grant opportunities.
7.4.1 Affordable Housing The City has adopted affordable housing 2021See comments in 4.1.2 and 7.1.2. The City of Chula Vista's Density Bonus Ordinance
Incentives (aka Density incentives regulations to facilitate the was approved by the City Council on December 11, 2012. The ordinance provides
Bonus)development of affordable housing for very clarity and outlines the State requirements for affordable housing development.
low, low, and moderate income households Developers of low and moderate income units are encouraged to utilize the incentives
and seniors. This policy provides for a available through these regulations as may be needed.
density bonus, incentives and waivers of In March 2018, the City hired a new senior planner position with the responsibility of
development standards for housing reviewing and updating Title 19. The City will continue to update the City’s zoning
providing the required number of units for code and specific plans consistent with legislative actions affecting residential
the income qualified households and development in effect as of January 2018 and 2019.
seniors. Continue to provide incentives for
the development of affordable housing and
housing for seniors through
implementation of these regulations.
Market incentives to housing developers
via the City's website and the Development
Services front counters.
7.4.2 Public PropertyEvaluate the viability of providing 2021Staff has evaluated its existing inventory of City and/or Agency owned land. The City
affordable housing on City owned property has limited ownership of land, of which very little is currently suitable for residential
that becomes available or is deemed development. As opportunities of surplus land become available, the City will continue
surplus property.to evaluate the suitability of such land for residential purposes and the viability for
affordablehousing.
7.4.3 Affordable Housing in Evaluate the appropriateness of allowing As opportunities ariseSee comments in 7.4.1.
Public or Quasi-Public affordable housing within public or quasi-
Zonespublic zoning designations, when
appropriate.
8.1.1 Affirmative Marketing Require affordable housing developments 2021The City continues to require all developers of affordable housing communities to
& Leasingfor low-and moderate-income households provide the City with a Marketing Plan, including efforts for affirmative marketing to
to comply with the following policies; minority communities. All marketing plans are required as condition of the loan
marketing and leasing efforts, require agreement and are subject to review and approval by the City.
outreach to minority communities,
including advertising in multi-lingual All deed restricted affordable housing projects are required to conduct a lottery of the
media;waitlist.
require the monitoring of lease and sales
efforts for compliance with affirmative
marketing; and, require periodic reporting
to the Community Development
Department on the composition of resident
populations in units, income levels and
affordability of the units.
8.1.2 Fair Housing Continue contracting with a service 2021The City contracts with Center for Social Advocacy (CSA) to provide outreach and
Education & Counselingprovider for implementation of programs counseling for fair housing issues. Information regarding fair housing education and
for broad outreach and education on resources is available on the City's website and at the public counter. CSA conducted
housing rights to ensure information and several workshops during the year for the benefit or residents and property
materials are available to the entire owners/managers. One such workshop was directed to property managers and held at
community through a variety of means, the Pacific Southwest Association of Realtor office.
including availability on the City's website
and various City and civic buildings, fair In addition, the planning process began for the San Diego Regional Analysis of
housing counseling, and resolution of fair Impediments to Fair Housing Choice. The City is a member of the San Diego Regional
housing complaints. Where appropriate, Alliance for Fair Housing that consists of 13 participating Cities and the County of San
refer to other agencies, including State Diego.
and Federal enforcement agencies.
9.1.1 Public Input & Continue to incorporate public input and 2021The City continues to provide opportunity for public input for all plans, policies and
Participationparticipation in the design and projects. The Development Services Department has an established public
development of City housing plans and participation policy for review of all development projects. Additionally, as a recipient
policies.of U.S. Department of Housing and Urban Development funds, the City also has an
adopted Citizen Participation Plan for these funding programs.
As part of its public outreach and engagement, in developing plans, policies and
projects, staff solicits input using various methods such as surveys, meetings with
community stakeholder groups, City sponsored community meetings, focus groups,
community cafes, and office hours with elected officials and departments. City staff
meets on a regular basis with citizen advocacy groups to discuss and address specific
neighborhood needs, such as ACCE and Harborside Safety and Revitalization
Committee.
Outreach tools for publicizing events and information include the use of social media,
such as Facebook, Nextdoor, and the City website. Interested persons may also sign
up for Council and Commission agendas, new development applications, etc.
Specifically for housing related projects, applicants are requested to hold a meeting
with neighboring residents and property owners at the onset of a project. As a project
moves forward in the construction phase, applicants are requested to provide news
and information to interested persons on progress and neighborhood impacts as a
result of construction activity.
9.1.2 Limited English Development of a City-wide policy to 2021The City continues to provide bilingual materials for all housing program marketing
Proficiency Policyprovide services to persons with limited materials and provides translation services as needed and as requested. The City
English proficiency with the goal of provides translation service language on its website and is evaluating this service for
providing such persons with better access all meeting agendas. All agendas related to Housing and altered agendas include a
to verbal and written information provided request for translation services.
by the City, specifically related to
affordable housing resources and The City’s Human Relations Commission, with its participation in the Welcoming Cities
programs for low-and moderate-income initiative, has identified a the development of a more comprehensive policy as part of
households.its future work program.
9.1.3 Housing Resources Develop and maintain outreach or other 2021Staff continues to provide updated housing resource information as needed on the
Informationappropriate marketing materials identifying City's website, at the public counters and attends certain community events and
available housing resources and programs meetings to provide information. The City also displays materials from other providers
available in the City of Chula Vista, for those related housing services as Fair Housing services, Foreclosure Intervention
including affordable housing services, Homelessness services, and community resources at the public counters.
developments, to ensure existing and
potential residents are aware of affordable City staff hold a number of outreach events to provide technical assistance and
housing opportunities. Information and information to its residents, business owners, and other community partners. In 2018,
materials are to be available via the City's staff provided information for residential property managers, mobilehome park
website and the Development Services owners/managers and attended numerous community meetings to provide housing and
front counters. neighborhood related information.
9.1.4 Annual Housing Provide an annual report to the City Annually
ReportCouncil on the City’s existing housing Since 2008, the Housing Advisory and Mobilehome Rent Review Commissions have
stock and policies in relation to progress in met annually to review Housing Element progress made during the previous year. It is
implementing the policies of the Housing anticipated that the groups will meet again this April in their annual joint meeting to
Element. The annual report shall also be discuss relevant housing issues to each group. In addition, the City Council is
made available for review in public presented with the report annually in an open public meeting.
locations
Date ApprovedDate Approved
Commercial Development Bonus Commercial Development Bonus
34
Development BonusDevelopment Bonus
Description of Commercial Description of Commercial
Income
Above Moderate
Income
Moderate
2
Table E
Low
Income
Units Constructed as Part of Agreement
Income
Very Low
+
Commercial Development Bonus Approved pursuant to GC Section 65915.7
Tracking ID
Local Jurisdiction
+
Project Name
1
Project Identifier
APNStreet Address
Summary Row: Start Data Entry BelowNONE
Annual Progress Report
JurisdictionChula Vista
Reporting Year2018(Jan. 1 - Dec. 31)
Entitled Units Summary
Income Level
Current Year
Deed Restricted0
0
Non-Deed Restricted
Very Low
0
Deed Restricted
0
LowNon-Deed Restricted
0
Deed Restricted
0
Non-Deed Restricted
Moderate
0
Above Moderate
Total Units 44
0
Note: units serving extremely low-income households are included in the
very low-income permitted units totals
Submitted Applications Summary
Total Housing Applications Submitted:
15
Number of Proposed Units in All Applications Received:
736
Total Housing Units Approved:
130
Total Housing Units Disapproved:
0
Use of SB 35 Streamlining Provisions
Number of Applications for Streamlining
0
Number of Streamlining Applications Approved
0
Total Developments Approved with Streamlining
0
TotalUnitsConstructed withStreamlining
0
Units Constructed - SB 35 Streamlining Permits
Income RentalOwnershipTotal
VeryLow
000
Low
000
Moderate
000
AboveModerate
000
Total
000
Cells in grey contain auto-calculation formulas
HOUSING SUCCESSOR ANNUAL REPORT
REGARDING THE
LOW AND MODERATE INCOME HOUSING ASSET FUND
FOR FISCAL YEAR 2017-2018
PURSUANT TO
CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(f)
FOR THE
CHULA VISTA HOUSING AUTHORITY AS THE SUCCESSOR HOUSING AGENCY
The Chula Vista Housing Authority assumed the housing functions of the former City of Chula
Vista Redevelopment Agency on February 1, 2012. The transfer of the functions included the
transfer of formerly designated RDA low- and moderate-income housing funds, along with any
funds generated by former RDA housing assets, comprehensively now known as the Low and
Moderate Income Housing Asset Fund (LMIHAF).
This Housing Successor Annual Report (Report) regarding the Low and Moderate Income
Housing Asset Fund has been prepared pursuant to California Health and Safety Code Section
34176.1(f).This Report sets forth certain details of the Chula Vista Housing Authority, as the
Successor Housing Agency, (Housing Successor) activities during fiscal year 2017-2018 (fiscal
year). The purpose of this Report is to provide the governing body of the Housing Successor an
annual report on the housing assets and activities of the Housing Successor under Part 1.85,
Division 24 of the California Health and Safety Code, in particular sections 34176 and
34176.1 (Dissolution Law).
The following Report is based upon information prepared by Housing Successor staff and
information contained within the independent financial audit of the Housing Authority (that includes
the Low and Moderate Income Housing Asset Fund), as incorporated in the City of Chula Vista
Comprehensive Audited Financial Report (CAFR) for Fiscal Year 2017-18 as prepared by Lance,
Soll & Lunghard (Audit), which Audit is separate from this annual summary report. In accordance
with Section 34176.1(f), an independent financial audit of the Fund is required within six months of
the end of the fiscal year. The Audit is available on the City’s website at
http://www.chulavistaca.gov/departments/finance. The Housing Authority (HA) Audit for 2017-
2018 is enclosed as Attachment A.
This Report is to be provided to the Housing Successor’s governing body and submitted to the
California Department of Housing and Community Development (HCD) by April 1, 201, as an
Attachment A to the City’s Annual Housing Element Progress Report. The Report is available to
the public on the City’s website at http://www.chulavistaca.gov/housing.
This Report conforms with and is organized into Sections I through XI, inclusive, pursuant to
Section 34176.1(f) of the Dissolution Law:
I. Amount Deposited into LMIHAF: This section provides the total amount of funds
deposited into the LMIHAF during the fiscal year. Any amounts deposited for items listed
on the Recognized Obligation Payment Schedule (ROPS) must be distinguished from
the other amounts deposited.
A total of $4,582,310 was deposited into the LMIHAF during the fiscal year. Of the
total funds deposited into the LMIHAF, a total of $ 0.00 was held for items listed on
the ROPS. Please refer to page 40 of the CAFR.
II.EndingBalance of LMIHAF: This section provides a statement of the balance in the
LMIHAF as of the close of the fiscal year. Any amounts deposited for items listed on
the ROPS must be distinguished from the other amounts deposited.
Comprehensive Annual Financial Report ending June 30, 2018, the ending
Per the
balance in the LMIHAF was $10,321,276 (please refer to page 40 of the CAFR and
page 5 of the HA Audit), of which $ 0.00 was held for items listed on the ROPS. In
2016-2017, the SERAF loan was paid in full.
III.Description of Expenditures from LMIHAF: This section provides a description of the
expenditures made from the LMIHAF during the Fiscal Year. The expenditures are to be
categorized.
LMIHAF Expenditures 2017-2018
A.Monitoring and Administration Expenditures (page 44 CAFR) $284,022
B.Homeless Prevention and Rapid Rehousing Services Expenditures
$0
Subtotal Expenditures (A+B)
$284,022
Housing Development Expenditures 2017-2018
C.For Low-Income Units (51-80% AMI)$973,963
D.For Very Low Income Units (31-50% AMI)$2,489,015
E. For Extremely Low Income Units (0-30% AMI)$378,763
Subtotal Housing Development Expenditures (C+D+E) $3,841,741
TOTAL LMHAF Expenditures in Fiscal Year (A through E)
$4,125,763
IV.Statutory Value of Assets Owned by Housing Successor: This section provides the
statutory value of real property owned by the Housing Successor, the value of loans and
grantsreceivables, and the sum of these two amounts.
Under the Dissolution Law and for purposes of this Report, the “statutory value of real
property” means the value of properties formerly held by the former redevelopment agency
as listed on the housing asset transfer schedule approved by the Department of
Finance as listed in such schedule under Section 34176(a)(2), the value of the
properties transferred to the Housing Successor pursuant to Section 34181(f), and the
purchase price of property purchased by the Housing Successor. Further, the value of
loans and grants receivable is included in the reported assets held in the LMIHAF.
The following provides the statutory value of assets owned by the Housing
Successor.
Statutory Value of Assets
Statutory Value of Real Property Owned by Housing
1
$300,000
1
Successor
Value of Loans and Grants Receivable (Page 8 CAFR &
$26,663,840
Page 8 of the Housing Authority Audit)
Total Value of Housing Successor Assets $26,963,840
V. Description of Transfers: This section describes transfers, if any, to another housing
successor agency made in previous fiscal year(s), including whether the funds are
unencumbered and the status of projects, if any, for which the transferred LMIHAF will be
used. The sole purpose of the transfers must be for the development of transit
priority projects, permanent supportive housing, housing for agricultural employees or
special needs housing.
The Housing Successor did not make any LMIHAF transfers to other Housing
Successor(s) under Section 34176.1(c) (2) during the fiscal year.
VI.Project Descriptions: This section describes any project for which the Housing
Successorreceives or holds property tax revenue pursuant to the ROPS and the status of
that project.
The Housing Successor does not receive or hold property tax revenue pursuant
to the ROPS.
VII.Status of Compliance with Section 33334.16: This section provides a status update on
compliance with Section 33334.16 for interests in real property acquired by the
former redevelopment agency prior to February 1, 2012.
With respect to interests in real property acquired by the former redevelopment agency
priorto February 1, 2012, the time periods described in Section 33334.16 shall be
deemed to have commenced on the date that the Department of Finance approved the
property as a housing asset in the LMIHAF; thus, as to real property acquired by the
former redevelopment agency now held by the Housing Successor in the LMIHAF,
the Housing Successor must initiate activities consistent with the development of the
real property for the purpose for which it was acquired within five years of the date the
DOF approved such property as a housing asset.
hree mobilehome spaces at Orange Tree Mobilehome Park at 521 Orange Ave are valued at $100,000 each.
The following provides a status update on the real property or properties housing
asset(s) that were acquired prior to February 1, 2012 and compliance with five-year
period:
Deadline to Initiate
Address of Status of Housing
Date of Acquisition Development
Property Successor Activity
Activity
N/A
The following provides a status update on the project(s) for property or properties
that have been acquired by the Housing Successor using LMIHAF on or after
February 1, 2012:
Deadline to Initiate
Address of Status of Housing
Date of Acquisition Development
Property Successor Activity
Activity
N/A
VIII.Description of Outstanding Obligations under Section 33413: This section describes
the outstanding inclusionary and replacement housing obligations, if any, under
Section 33413 that remained outstanding prior to dissolution of the former
redevelopment agency as of February 1, 2012 along with the Housing Successor’s
progress in meeting those prior obligations, if any, of the former redevelopment agency
and how the Housing Successor’s plans to meet unmet obligations, if any.
Replacement Housing: Based upon the 2010-2014 Implementation Plan for the
former redevelopment agency, there were no Section 33413(a) replacement housing
obligations to be transferred to the Housing Successor.
Inclusionary/Production Housing:Based upon the 2010-2014 Implementation Plan
for the former redevelopment agency, there were no Section 33413(b)
inclusionary/production housing obligations to be transferred to the Housing
Successor.
IX.Income Test: Thissection provides the information required by Section 34176.1(a)(3)(B),
or a description of expenditures by income restriction for a five year period, with the
period beginning January 1, 2014 and whether the statutory thresholds have been met.
However, reporting of the Income Test is not required until 2019.
Section 34176.1(a)(3)(B) requires that the Housing Successor must require at least
30% of the LMIHAF to be expended for development of rental housing affordable to
and occupied by households earning 30% or less of the AMI. If the Housing
Successor fails to comply with the Extremely-Low Income requirement in any five-
year report, then the Housing Successor must ensure that at least 50% of the funds
remaining in the LMIHAF be expended in each fiscal year following the latest fiscal
year following the report on households earning 30% or less of the AMI
until the
Housing Successor demonstrates compliance with the Extremely-Low Income
requirement. This information is not required to be reported until 2019 for the 2014 –
2019 period.
X. Senior Housing Test: This section provides the percentage units of deed-restricted
rental housing restricted to seniors and assisted individually or jointly by the Housing
Successor, its former Redevelopment Agency, and its host jurisdiction within the
previous ten years in relation to the aggregate number of units of deed-restricted rental
housing assisted individually or jointly by the Housing Successor, its former
Redevelopment Agency and its host jurisdiction within the same time period. For this
Report the ten-year period reviewed is July 1, 2008 through June 30, 2018.
The Housing Successor is to calculate the percentage of units of deed-restricted
cted to seniors and assisted by the Housing Successor, the
rental housing restri
former redevelopment agency and/or the City within the previous 10 years in
relation to the aggregate number of units of deed-restricted rental housing assisted
by the Housing Successor, the former redevelopment agency and/or City within the
same time period. If this percentage exceeds 50%, then the Housing Successor
cannot expend future funds in the LMIHAF to assist additional senior housing units
until the Housing Successor or City assists and construction has commenced on a
number of restricted rental units that is equal to 50% of the total amount of deed-
restricted rental units.
The following provides the Housing Successor’s Senior Housing Test for the 10
year period of July 1, 2008 to June 30, 2018:
Senior Housing Test July 1, 2008 – June 30, 2018
Assisted Senior Rental Units 409 dus
TOTAL Assisted Rental Units 595 dus
SENIOR HOUSING % 41%
XI.ExcessSurplus Test: This section provides the amount of excess surplus
(unencumbered funds) in the LMIHAF, exceeding one million or the aggregate amount
deposited in the fund over the preceding four fiscal years if any, and the length of time that
the Housing Successor has had excess surplus, and the Housing Successor’s plan for
eliminating the excess surplus.
Excess Surplus is defined in Section 34176.1(d) as an unencumbered amount in the
account that exceeds the greater of one million dollars ($1,000,000) or the aggregate
amount deposited into the account during the Housing Successor’s preceding four Fiscal
Years, whichever is greater.
The following provides the Excess Surplus test for the preceding four Fiscal Years:
Excess Surplus Calculation
Sum of Deposits over Prior Four Fiscal Years $8,362,166
Current Reporting Year Opening Balance (July 1, 2015) $2,328,784
Larger of Sum of Deposit or $1 million $4,414,446
EXCESS SURPLUS $0
XII.An inventory of homeownership units assisted by the former redevelopment agency
or the housing successor that are subject to covenants or restrictions or to an
adoptedprogram that protects the former redevelopment agency’s investment of
moneys from the Low and Moderate Income Housing Fund pursuant to subdivision
(f)of Section 33334.3. This inventory shall include all of the following information:
(A)The number of those units.
There are three (3) lots within Orange Tree Mobilehome Park that were assisted
by the former redevelopment agency that are subject to covenants or restrictions.
These loans are due and payable in 2017/2018. 1 loan was paid during the
reporting period.
Date of Loan
Status of Housing Successor
Address of Property Promissory Term
Activity
Note(years)
521 Orange Ave. #63 Daly30Waiting for Excess Proceeds from
10/08/1987
$14,942.00(Principal Balance)County Tax Sale
521 Orange Ave.
30
Loan Re-Paid October 2017, sold
12/28/1987
#8 Swanson $6,042.00
May 2018
(Principal Balance)
521 Orange Ave. #24 Velez 30
10/08/1987In deferral status
$12,584.00(Principal Balance)
(B)In the first report pursuant to this subdivision, the number of units lost to the portfolio
after February 1, 2012, and the reason or reasons for those losses. For all subsequent
reports, the number of the units lost to the portfolio in the last fiscal year and the reason
for those losses.
1 unit (521 Orange Ave. #8) was sold after the borrower’s estate repaid the Low
and Moderate Income Housing Loan. The borrower met the affordability period of
30-years.
(C) Any funds returned to the housing successor as part of an adopted program that
protects the former redevelopment agency’s investment of moneys from the Low and
Moderate Income Housing Fund.
$11,560.98 was returned to the Low and Moderate Income Housing due to a loan
repayment for 521 Orange Ave. #8.
(D) Whether the housing successor has contracted with any outside entity for the
management of the units and, if so, the identity of the entity.
The Housing Agency does not contract with an outside entity to manage the
homeownership units assisted with LMIHF.
March 26, 2019File ID: 19-0025
TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE 2019 ANNUAL
REPORT FOR THE DOWNTOWN CHULA VISTA PROPERTY-BASED BUSINESSIMPROVEMENT DISTRICT
AND DIRECTING STAFF TO CONDUCT A SURVEY OF EXISTING BUSINESSES AND PROPERTY OWNERS
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
The Downtown Chula Vista Property Based Business Improvement District (PBID) was organizedin 2001
to implement various enhancement services within the Third Avenue and Downtown area and is directly
administered for the City by the owner’s association known as the Third Avenue Village Association
(TAVA). In accordance with Streets and Highways Code 36650-36651, TAVA is required to prepare a report
for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the
costs of the improvements, maintenance, and activities described in the report. The attachedreport does
not propose any modifications to the boundary of the District, the basis and method of levying assessments
or any changes to property classification and complies with the reporting requirements outlined in the
Streets and Highways Code. The total annual assessment amount for the 2019year is estimated at
approximately $462,000 dollars. Staff has reviewed the annual report and recommends the City Council
approve the attached resolution.
ENVIRONMENTAL REVIEW
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act
State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is
required.
ENVIRONMENTAL DETERMINATION
The Director of Development Services hasreviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the approval of the 2018/19 annual
report of the Third Avenue Business Improvement District is not a "Project" as defined under Section
15378 of the State CEQA Guidelines because it involves a governmental fiscal activity which will not result
in a potentially significant physical impact on the environment. Therefore, pursuant to Section 15060(c)(3)
of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required.
Page|1
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The Downtown Chula Vista Property Based Business Improvement District (PBID) was organized in 2001
to implement various enhancement services within the Third Avenue and Downtown area and is directly
administered for the City by the owner’s association known as the Third Avenue Village Association
(TAVA). In accordance with Streets and Highways Code 36650-36651, TAVA is required to prepare a report
for each fiscal year(Attachment “A”), except the first year, for which assessments are to be levied and
collected to pay the costs of the improvements, maintenance, and activities described in the report.
TAVA administers funds received from a PBID and receives approximately $462,000 dollars annuallyin
PBID assessment revenue. In addition to PBID revenue TAVA has additional revenue from events, business
license, grants and in-kind contributions bring total revenue for TAVA to approximately $600,000 dollars.
The approved line item budget for TAVA’ sfiscal year is attached as Attachment “B”.
Prepared in accordance with the State of California Property and Business Improvement District law of
1994, Streets andHighways Code section 36650, the Annual Planning Report represents the second year of
program operations within the current ten-year term. Pursuant to Streets and Highway Code 36650-36651
TAVA is required to have the following information:
Section 2:PBID Boundaries
There are no recommended changes to the boundaries of the PBID district or in any zones or
classification of property or businesses within the district.
Section 3: Assessment Budget
The estimate for improvements, maintenance, and activities includes $467,524dollars in total
expenditures, including a 5% reserve of $23,120 dollars.The $55,000 dollars added to Third
Avenue additional maintenance activities is to fund quarterly power washing ($30,000 dollars) and
to fund additional administrative costs.
EXPENDITURES2018 Budget2019 BudgetDifference
Environmental Enhancements
Clean and Safe, Homeless, Beautification$ 90,000$ 70,615$ (19,385)
Third Avenue Additional Maintenance$ 70,000$ 125,153$ 55,153
Economic Enhancements$ 170,000$ 139,001$ (30,999)
Administration$ 100,000$ 109,635$ 9,635
PBID Reserves$ 23,000$ 23,120$ 120
Total Expenditures$ 453,000$ 467,524$ 14,524
REVENUES
Assessment Revenues$ 449,652$ 462,400$ 12,748
General Benefit Revenues$ 5,348$ 5,456$ 108
Total Assessment District Revenues$ 455,000$ 467,856$ 12,856
Page|2
Section 4: Method of Financing
Revenues will be collected through the levy of special annual assessments upon the real property
for which the services and activities are provided. There are two benefit zones, those parcels that
front Third Avenue and those that do not. The method of financing is contained in the attached
annual report.
Section 5: Surplus/ Deficit Revenue
The previous year’s surplus revenue will be carried over into the following fiscal year and TAVA
anticipates that there will be approximately $80,000 dollars of surplus from 2018 into 2019. In
addition, TAVA has approximately $200,000 dollars that are not allocated to this year’s fiscal
budget being held in reservesproviding a total of $280,000 dollars in unallocated resources above
the reserve of 5%.
Section6: Other Funding
Additional funds are expected from public events that market the business district to San Diego
County residents. Projected revenue from these events are estimated to be $18,000 dollars
increasing the PBID operating revenue to approximately $493,000 dollars.
Section 7: Activity, Improvements and Services
Environmental and Economic Enhancements in addition to Advocacy and Administration include
various key functions including homeless assistance, graffiti removal and economic development
and a reserve of 5%.
Staff has reviewed the annual report andfind that it is in conformance with the reporting
requirement of Streets and Highways Code 36650-36651. However, there are significant unallocated
resources ($280,000 dollars) under the control of the Third Avenue Village Association. These funds have
grown year over year going back over seven years and must be reinvested to the benefit of the District.
TAVA is currently conducting analysis and outreach to determine the best use of these funds. In addition,
staff is recommending conducting a City led survey of Downtown business and property owners to seek
input on what activities, events or improvements they would like the City and TAVA to consider for future
implementation. Staff is aware of several business/property owners who have formed informal planning
groups to discuss how to organize and plan more events Downtown, like an art walk, music festival, Latin
film festival, a Cinco de Mayo celebration, a car show or a weekly market that would help highlight the
diversity of businesses in our Downtown. This survey effort would be implemented by economic
development staff and funded through available budgetary resources.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found that, Mayor, Mary Casillas-Salas
has real property holdings within 500 feet of the boundaries of the property which is the subject of this
action. Consequently, pursuant to California Code of Regulations Title 2, sections 18700 and 18702.2(a)(7),
this item presents a disqualifying real property-related financial conflict of interest under the Political
Reform Act (Cal. Gov't Code § 87100, et seq.) for the above-identified member.
Page|3
Staff is not independently aware, and has not been informed by City Council member, of any other fact that
may constitute a basis for a decision maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no current year fiscal impact on the General Fund as a result of this actionas all actions will be
funded out of existing resources.
ONGOING FISCAL IMPACT
There is no on-going fiscal impact as a result of this action.
ATTACHMENTS
A.Third Avenue Village Association Annual Report
B.ThirdAvenue Annual Budget
C.Maintenance/Encroachment Agreement
Staff Contact: Eric Crockett, Director of Economic Development
Page|4
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE 2019ANNUAL REPORT
FOR THE DOWNTOWN CHULA VISTA PROPERTY-BASED
BUSINESS IMPROVEMENT DISTRICTAND DIRECTING
STAFF TO CONDUCT A SURVEY OF EXISTING
BUSINESSES AND PROPERTY OWNERS
WHEREASthe City Council of the City of Chula Vista established a Third Avenue
Property Based Business Improvement District (PBID) on July 24, 2001; and
WHEREAS, the PBID was renewed in 2006 for an additional ten years; and
WHEREAS, the PBID was renewed in 2016 and is currently in its thirdyear of another
ten-year term (for the period January 1, 2017 through December 31, 2026); and
WHEREAS, the Third Avenue Village Association (TAVA)is the owners’ association
for the PBID; and
WHEREAS, the owners’ association is required by the California Streets and Highway
Code to prepare an annual report for City Council consideration; and,
WHEREAS, TAVA has submitted its annual reportfor fiscal year January 1, 2019
through December 31, 2019and filed it with the City Clerk; and,
WHEREAS staff is aware of Downtown business and property owners who have
informally organized to discuss new activities, events and improvements for Downtown; and,
WHEREAS staff recommends the city survey Downtown businesses to seek input on
what activities, events or improvements the owners and tenants would like the City and TAVA to
consider.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it approves TAVA’ s2019annualreport forthe Downtown Chula Vista Property-
Based Business Improvement Districtand directs staff to conduct a survey of the existing
businesses and property owners.
Presented byApproved as to form by
Eric C. CrockettGlen R. Googins
Economic Development DirectorCity Attorney
March 26, 2019File ID: 19-0059
TITLE
A.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIVING THE COMPETITIVE
BIDDING REQUIREMENT AND APPROVING THE DISPATCH SERVICES AGREEMENT –SAN
DIEGO/CHULA VISTA, BETWEEN THE CITY AND THE CITY OF SAN DIEGO
B.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTAAPPROVING ATTACHMENT2:
DATA SHARINGAGREEMENT, WHICH IS A COMPONENT OF THE DISPATCH SERVICES
AGREEMENT –SAN DIEGO/CHULA VISTA, BETWEEN THE CITY AND THE CITIES OF SAN DIEGO,
CORONADO, IMPERIAL BEACH, NATIONAL CITY AND POWAY
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
The City of Chula Vista hassatisfactorilycontracted Fire and Emergency Medical Dispatch Services with the
San Diego Fire-Rescue Department since March 1, 2008. The Fire Department recommendscontinuing the
contract for service andis seekingCouncil’s approval of a dispatch services agreement and its component, a
data sharing agreement.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelinesbecauseitwillnotresultinaphysicalchangein
theenvironment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is
not subject to CEQA.Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
The Fire Department requires fire and emergency medical dispatch services to properly process 911 calls
and deploy the appropriate first responders to mitigate hazards and/or provide lifesaving aid. The City has
contracted fire and emergency medical dispatch services with the San Diego Fire-Rescue Department since
March1, 2008.
Page|1
San Diego Fire-Rescue Department has provided above standard fire and emergency medical dispatch
services. In Resolution 2007-289, the Council waived the competitive bidding requirement and approved a
service agreement with San Diego Fire-Rescue Departmentfor fire and medical dispatch services. This
decision was based on superior technology, emergency medical dispatching procedures, and financial
impact when compared to reasonable and appropriate competitors. These same factors are believed tobe
true today, and no verifiable enhancements would be expected by changing dispatch contractors. A change
in dispatch contractors would be disruptive to operations including the creation of new response plans,
new mobile data computer user interface on response units, and create delays in automatic aid. A change
would also havefinancial impactsincluding staff time for transitional activities and startup costs associated
with moving to a different dispatch contractor.
A data sharingagreement has been added to the Dispatch Services Agreement. Its purpose is to
acknowledge that San Diego Fire-Rescue must collect, store, and share sensitive data to effectively perform
their contracted dispatch services.
Collection and maintenance of dispatch records will be in accordance with State and Federal regulations.
Once collected several public safety entitiesand third-partysoftware application vendorswill have access
to this data intended forincident reporting, performance enhancing analytics,mutual/automatic aid
connections,and infrastructure support for dispatching and operations situational awareness systems.
This new dispatch services agreement does have anincreased fiscal impact when compared to the previous
agreement. The increased costs are commensurate,when compared to the limited market capable to
provide this type of service. Changes in the proposed contract costs includea price per call, rather than a
flat rate charge which is contained in the currentagreement. The current flat rate has been the same since
the agreement’sinception, at $480,000 annually.Under the new price per call with the added required
associated technology costs we anticipate the annual cost for dispatch services to be $1,149,373.00.
Embedded into the new price per call is a minimum 5% escalator on San Diego Fire-Rescue’s non-
personnel expenses related to dispatching services. These costs include, but not limited to utilities, facility
operations, hardware maintenance, software and technology expenses. This estimated escalator is
expected to increase the price per call rate approximately $0.30 annually. This would add a net cost of
$6,000.00 annually to the dispatch services agreement.
Due to the current quality of performance and to avoid operational disruption, the Fire Department is
recommendingwaiver of the competitive bidding requirement in Chula Vista Municipal Code section
2.56.070.B.3, because the City’s interests are materially better servedand approval of both the Dispatch
Services Agreement with the City of San Diego and Attachment 2: Data Sharing Agreement with the cities
of San Diego, Coronado, Imperial Beach, National City and Poway.Attachment 2: Data Sharing Agreement
is a separate document requiring separate approval and signatures. However, it is a requiredcomponent of
the Dispatch Services Agreement with San Diego, which is specifically referenced inParagraph D, Data
Sharing, on Page 3 of the Dispatch Services Agreement.
Page|2
TheDispatch Services Agreement shall become effective retroactively to July 1, 2018 and shall expire at
midnight on June 30, 2023. The Parties shall review this Agreement every year to ensure applicability of all
terms and policies. Any modification shall be set forth in writing and be signed by theParties.
The Attachment 2: Data Sharing Agreement shall become effective upon execution by the Parties and shall
be binding upon all Parties hereto, until such time as the Parties agree to amend or terminate the
Agreement. Any modification shall be set forth in writing and be signed by the Parties. If any Agency is no
longer contracting for San Diego Dispatching Services, this Agreement will continue to apply to historical
data collected while services were rendered.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific
and consequently, the 500-foot rule found in California Code of Regulations Title 2, section 18702.2(a)(11),
is not applicable to this decision for purposes ofdetermining a disqualifying real property-related financial
conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Councilmember, of any other fact
that may constitute a basis for a decision maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Fire and emergency medical dispatch services annual operating plan costs for FY2019 under this new
agreement will have an unbudgetedimpact in the fourth quarter.Fourth quarter costs willincreaseby
$180,000.00, which will be amended during the third quarter budget amendment.
ONGOING FISCAL IMPACT
Annual operating plan costs are expected to be $295,381.00 per quarter or $1,182,000.00 annually. These
costs will be includedin the FY2020 budget and in the long-term financial forecastwhich will increase the
projected General Fund deficit. Alternative funding through the ALS program will continued to be pursued
to avoid ongoinglong term impacts to the General Fund.
ATTACHMENTS
Attachment 1: Dispatch Services Agreement
Attachment 2: Data Sharing Agreement
Attachment 3: Annual Operating Plan
Staff Contact: Harry Muns, Deputy Chief Director of Operations
Page|3
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA WAIVING THE COMPETITIVE BIDDING
REQUIREMENTANDAPPROVINGTHEDISPATCH
SERVICES AGREEMENT –SAN DIEGO/CHULA VISTA,
BETWEEN THE CITY AND THE CITY OF SAN DIEGO
WHEREAS, the City requires fire and emergency medical dispatch services to properly
process 911 calls for servicetodeploy the appropriate first responders to mitigate hazards and/or
provide lifesaving aid; and
WHEREAS, the City has satisfactorily contracted fire and emergency medical dispatch
services withSan Diego Fire-Rescue since March 1, 2008and desires to continue this agreement
for service; and
WHEREAS,the City is requesting to waivethe competitive bid processandis
recommendingcontracting with SanDiego Fire-Rescue; and
WHEREAS,staff has demonstrated that the City’s interest ismaterially better served in
doing soand no verifiable advantages for changing contractors have been identified; and
WHEREAS,continuing with San DiegoFire-Rescueavoidsoperational disruptions and
startup costs associated with changing contractors; and
WHEREAS, this Dispatch Services Agreement shall become effective retroactively to
July 1, 2018 and shall expire at midnight on June 30, 2023. The Parties shall review this
Agreement every year to ensure applicability of all terms and policies. Any modification shall
be set forth in writing and be signed by the Parties; and
WHEREAS, this Dispatch Services Agreement term may be extended for five (5)
additional years by written agreement of the Parties, and subject to the San Diego Mayor’s
authorization of a contract extension and the authorization of Agency.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it waives the competitive bidding requirement.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it
approves the Dispatch Services Agreement –San Diego/Chula Vista, between the City and the
City of San Diego, in the form presented, with such minor modifications as may be required or
approved by the City Attorney, a copy of which shall bekept on file in the Office of the City
Clerk, and authorizes and directs the Fire Chief toexecute same.
C:\\Users\\legistar\\AppData\\Local\\Temp\\BCL Technologies\\easyPDF 8\\@BCL@380EBB4F\\@BCL@380EBB4F.doc
Presented byApproved as to form by
Jim GeeringGlen R. Googins
Fire ChiefCity Attorney
C:\\Users\\legistar\\AppData\\Local\\Temp\\BCL Technologies\\easyPDF 8\\@BCL@380EBB4F\\@BCL@380EBB4F.doc
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE ATTACHMENT 2: DATA
SHARING AGREEMENT, WHICH IS A COMPONENT OF
THEDISPATCHSERVICESAGREEMENT–SAN
DIEGO/CHULA VISTA, BETWEEN THE CITY AND THE
CITIES OFSAN DIEGO, CORONADO, IMPERIAL BEACH,
NATIONAL CITY AND POWAY
WHEREAS, the city requires fire and emergency medical dispatch services to properly
process 911 calls for serviceto deploy the appropriate first responders to mitigate hazards and/or
provide lifesaving aid; and
WHEREAS, the city has contracted fire and emergency medical dispatch services with
San Diego Fire-Rescue since March 1, 2008; and
WHEREAS,the city is recommending contracting with San Diego Fire-Rescue for
dispatch services; and
WHEREAS, San Diego Fire-Rescue as the dispatch services contractor for the city is
requiring a Data Sharing Agreement with the cities of San Diego, Coronado, Imperial Beach,
National City and Powayto effectively perform these services; and
WHEREAS, Attachment 2: Data Sharing Agreement shall become effective upon
execution by the Parties and shall be binding upon all Parties hereto, until such time as the
Parties agree to amend or terminate the Agreement. Any modification shall be set forth in
writing and be signed by the Parties. If any Agency is no longer contracting for San Diego
Dispatching Services, this Agreement will continue to apply to historical data collected while
services were rendered.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it approves the Attachment 2: Data Sharing Agreement, which is a component of the
Dispatch Services Agreement –San Diego/Chula Vista, between the City and the Cities of San
Diego, Coronado, Imperial Beach, National City and Poway, in the form presented, with such
minor modifications as may be required or approved by the City Attorney, a copy of which shall
be kept on file in the Office of the City Clerk, and authorizes and directs the Fire Chiefto
execute same.
C:\\Users\\legistar\\AppData\\Local\\Temp\\BCL Technologies\\easyPDF 8\\@BCL@280EBC5C\\@BCL@280EBC5C.doc
Presented byApproved as to form by
Jim GeeringGlen R. Googins
Fire ChiefCity Attorney
C:\\Users\\legistar\\AppData\\Local\\Temp\\BCL Technologies\\easyPDF 8\\@BCL@280EBC5C\\@BCL@280EBC5C.doc
DISPATCH SERVICES AGREEMENT–SAN DIEGO/ CHULA VISTA
THIS AGREEMENTis made by and between the City of San Diego, (“San Diego”), a municipal corporation;
and the City of Chula Vista(“Agency”), a municipal corporation; (herein collectively known as “Parties” or
individually as “Party”), for the provision of fire and emergency medical dispatch services.
RECITALS
WHEREAS,San Diego and Agencyhave organized and equipped fire departments charged with
the duty of fire protection and rescue within the limits of said cities; and
WHEREAS,if required by law, Agency, by way of Resolution Number _____________________dated
_______________________, approved by Chula VistaCity Council, resolved that Agency’sinterests would be
best served by entering into an agreement with San Diego to outsource Agency’sfire and emergency
medical dispatch services to San Diego; and
WHEREAS,San Diegodesires to provide Agencywith fire and emergency medical dispatch
servicesunder the terms described in this Agreement and
WHEREAS,it would be to the benefit of each Party for San Diego to continue to provide fire and
emergency medical dispatch services to Agencyin order to increase the health and safety of all affected
residents; and
WHEREAS,Agencydesires and intends per the terms of this Agreement to pay San Diego for
services;
NOW THEREFORE,in consideration of the above recitals and the mutual covenants and conditions
contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged,Agencyand San Diego agree as follows:
A.TERM.
This Agreement shall become effective retroactively to July 1, 2018and shall expire at midnight on June
30, 2023. The Parties shall review this Agreement every year to ensure applicability of all terms and
policies. Any modification shall be setforth in writing and be signed by the Parties.
TheAgreement term may be extended for five (5) additional yearsby written agreement of the Parties,
and subject to the San Diego Mayor’s authorization of a contract extension and the authorization of
Agency.
B.OBLIGATIONS OF THE PARTIES.
The descriptions herein outline specific aspects relevant to the performance of the emergency dispatch
services by San Diego.
San Diego adheres to State recommendations for call answering times and bases dispatcher staffing upon
meeting those performance standards.
To the extent that safety or technological changes warrant an amendment of the specific service or
method employed to provide the Fire and Emergency Medical Dispatch Services contemplated herein,
neither Party may unreasonably refuse to implement safety or technological changes.
1.The dispatch services that will be provided by San Diego include:
Page1of8
DISPATCH SERVICES AGREEMENT–SAN DIEGO/ CHULA VISTA
a)Processing all fire and medical related emergency calls via the 911 Secondary Public Safety
Answering Point ("PSAP").
b)Triaging medical calls using a triageprocess which includes:
i.Automated triage with call downgrading features.
ii.Coordinated dispatch efforts with Agency’s ambulance provider for ambulances within
Agency’s jurisdiction, via an automated Computer Aided Dispatch (“CAD”) to CAD
interface.
c)Dynamic Automatic Vehicle Location (“AVL”) driven dispatch of closest available resource(s),
across City lines, to given emergency, incident type(s), and location(s).
d)Paging Services betweenSan Diego’sCADand a messaging services interface.
e)Fire Station Alerting viaa CADtoastation alertinginterface. San Diego willinterface with
Agency’s existing, self-managed station alerting system given that it is supported by San
Diego’s existing interface system, currently USDD,and as an unsupported legacy option for
WestNet.
f)Mobile Data Computer (“MDC”) or other mobile platform services includingmapping, live-
routing, and loading of Agency’s self-managed pre-plans.
g)Records Management System (“RMS”) services fora CADto a Fire RMS interface given that
it is supported by San Diego’s existing interface system, currently WATER, and a FireHouse
interface as an unsupported legacy option. Agency will bear the costs for other new,
unsupported interfaces if required.
h)Additionally, Agency may receive a periodic download of CAD data.
i)Agency acknowledges that this contract does not require San Diego to perform analysis of
Agency’s CAD or response data. However, San Diego mayextend the use of secured
Internet applications for viewing, analyzing and reporting Agency’s CAD data (“web
services”). These web services may include on-line dashboards and canned reports with
pre-established data collection points, call for service statistics and/or other incident specific
data.
j)Any additional or special services providedare described in Addendum A.
2.Additional Services and Equipment. Additional services and equipment utilized in the
performance or support of dispatch services may be provided by San Diego,as agreed to by the
parties, which may include but is not limited to: equipment (modems, mobile data computers,
phones, etc.), enterprise device management services, software applications and licenses.
C.COMPENSATION AND PAYMENT SCHEDULE
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DISPATCH SERVICES AGREEMENT–SAN DIEGO/ CHULA VISTA
Agencyagrees to pay San Diego for services rendered under this Agreementon afiscal year basis,
defined as July 1 through June 30. For budgeting and planning purposes, San Diego will provide Agency
with an Annual Operating Plan (Attachment 1)for the upcoming fiscal year.
1.For Dispatching Services. San Diego shall be compensated for the performance of services and
specified in Section B1as a cost per call. Dispatch fees are subject to change each fiscal year
based on the following:
a)The adopted budget for personnel costs which includes fringe and overhead, and;
b)Prior year actuals fornon-personnel expenditures(NPE). Should the Agency’s call volume
exceedthe prior year by 5%or more, an increase to the NPE will be equal to the percentage
of the increased call volume(rounded up to the tenth percent).
c)Should the Agency’s call volume from the prior year not increase, or the increase is less than
5%, an escalator of 5% will be applied to the NPE.
2.For Additional Services & Equipment. San Diego shall be reimbursed for the costs of any
additional services and equipmentspecified in Section B.2, which have been procured on behalf
of Agency and which may also include connectivity and start-up costs. Agency may elect
additional optionsin accordance with the“Annual Operating Plan.”
a)Costs will be calculated based on vendor fees per service or unit of equipment.
b)Services and equipment fees are subject to change annually based on vendor rates.
3.Invoices & Due Date: San Diego shall provide to Agency, on a quarterly basis, an invoice
statement for services rendered under this Agreement and payment by Agencyshall be remitted
thirty (30) days thereafter. If Agencydisputes any charges it shall nonetheless remit the full
amount without waiving its right to a return of the disputed amount.
4.Records:The Parties shall maintain books, records, logs, documents, and other evidence
sufficient to record all actions taken with respect to rendering services under this Agreement
throughout the performance of services and for ten (10) years following completion of services
under this Agreement. The parties further agree to allow for mutual inspection, copying and
auditing of such books, records, documents and other evidence at all reasonable times.
D.DATASHARING.
Data Sharing policies are outlined in the Data Sharing Agreement(Attachment 2).
E.INDEMNIFICATION. In the performance of dispatching services,
1.Agencyagrees to defend, indemnify, protect, and hold San Diego and its agents, officers, and
employees harmless from and against any and all claims asserted or liability established for
damages or injuries to any person or property, including injury to Agencyemployees, volunteers,
agents, or officers which arise from, or are connected with, or are caused or claimed to be caused
by the acts or omissions of Agency, its agents, officers, employees, or volunteers, and agrees to
be responsible for all expenses of investigating and defending against same; provided however,
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DISPATCH SERVICES AGREEMENT–SAN DIEGO/ CHULA VISTA
that Agency’s duty to indemnify and hold harmless shall not include any claims or liability
alleged to be arising from the negligence or willful misconduct of San Diego, its agents, officers,
or employees.
2.San Diego agrees to defend, indemnify, protect, and hold Agencyand its agents, officers, and
employees harmless from and against any and all claims asserted or liability established for
damages or injuries to any person or property, including injury to San Diego employees,
volunteers, agents, or officers which arise from, or are connected with, or are caused or claimed
to be caused by the acts or omissions of San Diego, its agents, officers, employees, or volunteers,
and agrees to be responsible for all expenses of investigating and defending against same;
provided, however, that San Diego’s duty to indemnify and hold harmless shall not include any
claims or liability alleged to be arising from the negligence or willful misconduct of Agency, its
agents, officers, or employees.
F.RIGHT TO TERMINATE FOR CONVENIENCE
Either Party may terminate the services agreed to pursuant to this Agreement by giving written notice of
such termination to the other Party. Such notice shall be delivered by certified mail with return receipt for
delivery to the noticing Party. The termination of the services shall be effective one hundred & eighty
(180)days after the receipt of this notice by the noticed Party.
G.RIGHT TO TERMINATE FOR DEFAULT
If either Partyfails to perform or adequately perform any obligation required by this Agreement, that
Party’s failure constitutes a Default. If the defaulting Partyfails to satisfactorily cure a Default within ten
(10) calendar days of receiving written notice from the other Partyspecifying the nature of the Default, or
if the nature of the Default is(1) not for the payment of services, and (2) requires more than ten (10)
calendar days to remedy, and the defaulting Party fails to diligently pursue such action necessary to
remedy the Default, the other Partymay immediately cancel and/or terminate this Agreement, and
terminate each and every right of the defaulting Party, and any person claiming any rights by or through
the defaulting Partyunder this Agreement. The rights and remedies of the non-defaulting Party
enumerated in this paragraph are cumulative and shall not limit the non-defaulting Party’srights under
any other provision of this Agreement, or otherwise waive or deny any right or remedy, at law or in equity,
existing as of the date of this Agreement or enacted or established at a later date, that may be available to
the Partiesagainst the other Party.
H.CITY OF SAN DIEGO CONTRACT REQUIREMENTS
To the extent appropriate in light of the rights and duties specified in this contract, and as applicable to
particular parties, the following requirements shall apply:
1.Drug-Free Workplace.Agencyagrees to comply with San Diego's Drug Free Workplace
requirements set forth in Council Policy 100-17, adopted by San Diego Resolution R-277952 and
incorporated into this Agreement by this reference.
2.ADA Certification. Agencyhereby certifies that it agrees to comply with San Diego's “Americans
With Disabilities Act” Compliance/City Contracts requirements set forth in Council Policy 100-04,
adopted by San Diego Resolution R-282153 and incorporated intothis Agreement by this
reference.
I.PRODUCT ENDORSEMENT
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DISPATCH SERVICES AGREEMENT–SAN DIEGO/ CHULA VISTA
Agencyacknowledges and agrees to comply with the provisions of San Diego’s Administrative Regulation
95-65, concerning product endorsement. Any advertisement identifying or referring to San Diego as the
user of a product or service requires the prior written approval of San Diego.
J.CONFLICT OF INTEREST
Agencyis subject to all federal, state and local conflict of interest laws, regulations and policies
applicable to public contracts and procurement practices including, but not limited to, California
GovernmentCode sections 1090, et. seq. and 81000, et. seq. San Diego may determine that a conflict
of interest code requires Agencyto complete one or more statements of economic interest disclosing
relevant financial interests. Upon San Diego’s request, Agencyshall submit the necessary documents
to San Diego.
1.Agencyshall establish and make known to its employees and agents appropriate safeguards to
prohibit employees from using their positions for a purpose that is, or that gives the appearance
of being, motivated by the desire for private gain for themselves or others, particularly those with
whom they have family, business or other relationships.
2.In connection with any task, Agencyshall not recommend or specify any product, supplier, or
contractor with whomAgency has a direct or indirect financial or organizational interest or
relationship that would violate conflict of interest laws, regulations, or policies.
3.If Agencyviolates any conflict of interest laws or any of these provisions in this Section, the
violation shall be grounds for immediate termination of this Agreement. Further, the violation
subjects Agencyto liability to San Diego for attorney fees and all damages sustained as a result
of the violation.
K.MANDATORY ASSISTANCE
If a third-party dispute or litigation, or both, arises out of, or relates in any way to the services provided
under this Agreement, upon either Party’s request, the other Party, and its agents, officers, and employees
agree to assist in resolving the dispute or litigation. Each Party’s assistance includes, but is not limited to,
providing professional consultations, attending mediations, arbitrations, depositions, trials or any event
related to the dispute resolution and/or litigation.
1.Compensation for Mandatory Assistance.The Party seeking the assistance of the other Party
will reimburse the assisting Party for any fees and expenses incurred for required Mandatory
Assistance as Additional Services. The Party seeking the assistance shall, in its sole discretion,
determine whether these fees, expenses, and services rendered under this Section, were
necessary due to the assisting Party or its agents’, officers’, and employees’ conduct or failure to
act. If the Party seeking assistance determines that such fees, expenses, or services were
necessary due to the other Party’s or its agents’, officers’, and employees’ conduct, in part or in
whole, the Party seeking assistance is entitled to be reimbursed for any payments made for these
fees, expenses, or services. Reimbursement may be through any legal means necessary,
including either Party’s withholding of payment to the other.
2.Attorney Fees related to Mandatory Assistance. In providing each other with dispute or
litigation assistance, a Party, or its agents, officers, and employees may incur expenses and/or
Page5of8
DISPATCH SERVICES AGREEMENT–SAN DIEGO/ CHULA VISTA
costs. The other Party agrees that any attorney fees it may incur as a result of assistance
provided under this Section (with the exception for attorney fees as provided in Section K, below)
are not reimbursable.
L.JURISDICTION, VENUE & ATTORNEY’S FEES
The venue for any suit or proceeding concerning this Agreement, the interpretation or application of any
of its terms, or any related disputes shall be in the County of San Diego, State of California. The prevailing
Party in any such suit or proceeding shall be entitled to a reasonable award of attorney’s fees in addition
to any other award made in such suit or proceeding.
M.ENTIRE AGREEMENT; AMENDMENTS
This Agreement contains the entire understanding between the Parties with respect to the subject matter
herein. There are no representations, agreement or understandings (whether oral or written) between or
among the Partiesrelating to the subject matter of this Agreement that are not fully expressed herein.
This Agreement may only be amended in writing signed by both Parties.
N.SEVERABILITY
If any one or more of the covenants or agreements or portions thereof provided in this Agreement shall
be held by a court of competent jurisdiction in a final judicial action to be void, voidable or unenforceable,
such covenant or covenants, such agreement or agreements, or such portions thereof shall be null and
void and shall be deemed separable from the remaining covenants or agreements or portions thereof and
shall in no way affect the validity or enforceability of the remaining portions of this Agreement, and the
Parties shall negotiate in good faith to replace any such covenant, agreement or portion found to be null
and void.
O.NOTICES.
Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows,
with notice deemed given as indicated: (a) by personal delivery, when delivered personally; (b) by
overnight courier, upon written verification of receipt; (c) by facsimile transmission, upon acknowledgment
of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon
verification of receipt. Notice shall be sent to the following addresses:
To San Diego at:With a copy to:
San Diego Fire-Rescue Department / ECDCSan Diego Fire-Rescue Department
Attn: ECDC Deputy ChiefAttn: Fire Chief
th
3750 Kearny Villa Road600 B Street, 13Floor
San Diego, CA 92123San Diego, CA 92101
ToChula Vistaat:With a copy to:
Chula VistaFire DepartmentChula VistaFireDepartment
Attn: Deputy Chief, Director of AdministrationAttn:Fire Chief
276 Fourth Ave Bldg C276 Fourth Ave Bldg C
Chula Vista, CA 91910ChulaVista, CA 91910
IN WITNESS WHEREOF,this Agreement is executed by the City of San Diego, acting by and through its
Mayor or his designee, pursuant to San Diego City Charter section 265 and San Diego Municipal Code
section 22.3222, and by the City of Chula Vista.
CITY OF CHULA VISTA, A Municipal Corporation
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DISPATCH SERVICES AGREEMENT–SAN DIEGO/ CHULA VISTA
I HEREBY CERTIFYthat I can legally bind the City of Chula Vista, and that I have read all of this
Agreement and have executed it on behalf of the City of Chula Vista, a municipal corporation.
By: ___________________________________________Date signed: ____________________________
Jim Geering, Fire Chief
I HEREBY APPROVE the form of the foregoing Agreement, this _______ day of ________________, 2019.
By: ____________________________________________
Name, City Attorney
CITY OF SAN DIEGO, A Municipal Corporation
By: ___________________________________________Date signed: ____________________________
Colin Stowell, Fire Chief
I HEREBY APPROVE the form of the foregoing Agreement, this _____ day of ________________, 2019.
MARA W. ELIOTT, San Diego City Attorney
By: ___________________________________
Noah J. Brazier, Deputy City Attorney
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DISPATCH SERVICES AGREEMENT–SAN DIEGO/ CHULA VISTA
ADDENDUM A
No special services are applicable atthis time.
Page8of8
March 26, 2019File ID: 19-0110
TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING BIDS AND AWARDING A
CONTRACT FOR SERVICES TO WESTERN AUDIO VISUAL FOR THE PURCHASE, INSTALLATION AND
MAINTENANCE OF CITY COUNCIL CHAMBERS ELECTRONIC EQUIPMENT AND DISPLAYS, AND
APPROPRIATING FUNDS THEREFOR(4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
Various electronic equipment in the City Council Chambers is malfunctioning and in need of upgrade and
replacement. The City conducted RFP P23–17/18 to upgrade the Council Chamber’s electronic equipment
andWestern Audio Visual was the selected contractor.Staff is seeking the Council’s acceptance of the bids,
award of the contract to Western Audio Visualand the appropriation offunds for the project.
ENVIRONMENTAL REVIEW
The proposed Projecthas been reviewed for compliance with the California Environmental Quality Act
(CEQA) and it has been determined that the Projectqualifies for a Categorical Exemption pursuant to State
CEQA Guidelines Section 15301 Class 1 (Existing Facilities) and Section 15061(b)(3), because it can be seen
with certainty that there is no possibility that the activity in question may have a significant effect on the
environment. Thus, no further environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
Due to frequentmalfunctions of theexistingCity Council Chambers electronic equipment, coupled with the
age of the equipment and changes in technology since the last City Council Chambers upgrade was
performed in 2013, staffhas determined that a full-scale upgrade to the electronic equipment throughout
the City Council Chambers is warranted.
In addition toCity Council meetings, the City Council Chambers also hosts theannualState of the City
address, various meetings ofCity Boards and Commissions, staff trainings, and numerous meetings for
outside agencies such as the California Public Utilities Commission and California Coastal Commission. Each
of these meetings requireaunique setup and the current City Council Chambers technology is struggling to
meet the requirements for hosting these various meetings.
Staff hireda consultantwith expertise in council chambers technologyto help determine upgradeand
technologyneeds andto assist in draftinga Request for Proposal (RFP) to upgradeand replace equipment
throughout the City Council Chambersand associated conference rooms. The upgrade project will include
the replacement of all digital control equipment, a direct-view high-resolution LED screenfor the main
presentation screen, new interfaces for each position on the Council dais, larger screens for each position
on the daisto allow Council and board members to better view presentations displayed on the main
presentation screen, 75-inchLED screens in the Council Chambers overflow area and theadjoining
conference room, improved wireless microphones andanimproved audio system. To meet current
technology requirements, there will also be new device connectivity for laptops (HDMI connections), as
well as new programming for the entire system including voting software.
AnRFP (Attachment 1) was created, and posted on the City’s PlanetBids purchasing portal, and viable
vendors were notified, in accordance with the City’s procurement policies.During the proposal submittal
period, the City held a mandatory meeting for any interested vendors to inspect the City Council Chambers
and review the RFP requirements. There were five respondents to the RFP (See Table 1 below). The costs
indicated in Table 1 include options for the necessaryupgrades and fiveyears of equipment maintenance.
Twocompanies provided alternative pricing models based on substituted technology that was different
than enumerated in the RFP, which are also included in the table.
TABLE 1
TOTAL ALL
COMPANY
OPTIONS
Western A/V$ 271,910.51
EIDIM GROUP INC ALT$ 292,232.66
EIDIM GROUP INC$ 301,055.76
AVI Systems$ 382,655.00
Commpedia$ 445,021.95
Fluid Sound Alt$ 566,438.71
Fluid Sound$ 591,726.82
Four companies were invited to participate in interviews for this project. The interview panel consisted of:
1) Edward Chew –Director of Information and Technology Services; 2) Kerry Bigelow –City Clerk; 3)
Stephen Mosca –Facilities Manager; and 4) Vance Breshears –Director/General Partner –Idibri, INC
(technology consultant). Each company was rated on five categories, based on the interview and the
submitted RFP response: 1) Project Plan; 2) Pricing; 3) Technical Ability/Maintenance; 4) Experience; and
5) Overall presentation. Scores from the RFP processare listed in Table 2 below.
TABLE 2
FINAL SCORES
WESTERN A/V91.35
AVI Systems82.43
EIDIM GROUP INC76.26
COMMPEDIA74.2
Western Audio Visual wasthe recommended contractor by the interview panel. They have performed
approximately 75 Council Chamber builds/remodels in the last two years. The next page details their most
recent projects.
Western Audio Visual’s Recent City & County Projects
48.City of San Clemente* ($28k)
City Projects:49.City of San Juan Capistrano* ($136k)
1.City of Anaheim* ($722k)50.City of San Marcos* ($383k)
2.City of Azusa ($102k)51.City of San Marino ($2K)
3.City of Beaumont* ($10k)52.City of Santa Clarita* ($67k)
4.City of Big Bear Lake* ($175k)53.City of Santa Ana ($146k)
5.City of Brea ($576k)54.City of Santa Barbara ($575k)
6.City of Buena Park*($489k)55.City of Santa Fe Springs* ($90k)
7.City of Carlsbad ($616k)56.City of Signal Hill ($6k)
8.City of Chino* ($588k)57.City of Solana Beach* ($109k)
9.City of Chino Hills* ($225k)58.City of Temecula* ($1.4M)
10.City of Chula Vista* ($10K)59.City of Tustin* ($607k)
11.City of Corona* ($992k)60.City of Upland* ($115k)
12.City of Coronado ($15k) 61.City of Victorville * ($1.6M)
13.City of Costa Mesa ($210k)62.City of Vista ($22k)
14.City of Covina* ($166k)63.City of Walnut * ($85k)
15.City of Cypress* ($290k)64.City of West Covina ($54k)
16.City of Del Mar* ($105k)65.City of West Hollywood ($991k)
17.City of Diamond Bar ($67k)66.City of Westminster ($111k)
18.City of Downey* ($137k)67.City of Whittier* ($355k)
19.City of Eastvale ($4k)68.City of Yorba Linda* ($208k)
20.City of El Monte ($31k)
21.City of El Segundo ($5k)County Projects:
22.City of Encinitas* ($42k)1. County of Los Angeles ($300k)
23.City of Fullerton ($217k)2. County of Riverside* ($225k)
24.City of Glendora* ($438k)3.County of San Bernardino * ($825k)
25.City of Hesperia* ($609k)4. County of San Diego* ($250k)
26.City of Huntington Park*($7k)5.San Diego Medical Examiner* ($375k)
27.City of Irvine* ($152k)6.San Diego District Attorney* ($244k)
28.City of Irwindale* ($105k)7.Irvine Ranch Water District* ($300k)
29.City of La Habra*($303k)8. Columbia Space Center* ($200k)
30.City of La Puente ($34k)9. Reg. County OCC Center * ($120k)
31.City of Laguna Beach*($170k)10.LA County Bar Assoc. ($345k)
32.City of Lomita* ($10k)11.Orange County Fire Authority* ($515k)
33.City of Manhattan Beach* ($344k)12.Santa Margarita Water District*($50k)
34.City of Mission Viejo* ($747k)13.Inland Empire Utilities Agency* ($570k)
35.City of Moreno Valley ($11k)14.South Orange Community College District*
36.City of Murrieta($816k)($150k)
37.City of National City* ($54k)15.Los Angeles Fire Police Pension ($200k)
38.City of Ontario ($219k)16.SDCERS*($250k)
39.City of Orange ($325K)17.SBCERA* ($110k)
40.City of Perris* ($17k)18.Yorba Linda Water District* ($148k)
41.City of Placentia ($59k)
42.City of Pomona*($186k)Blue indicates projects in progress
43.City of Rancho Mirage* ($218k)Red indicates maintenance contracts
44.City of Rancho Palos Verdes*($100k)* indicates design/build
45.City of Redlands ($20k)
46.City of Riverside* ($225k)
47.City of Rolling Hills Estates*($136k)
A5-year maintenance and response contract is included with this project. This will encompass regularly
scheduled maintenance periods for software updates and programming modificationsas well as
emergency response to equipment outagesand malfunctions.
th
Installation is tentatively scheduled to begin after the June 18, 2019 Council meeting and will last
approximately 3 weeks.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific
and consequently, the real property holdings of the City Council members do not create a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et
seq.).
Staff is not independently aware and has not been informed by any City Council member, of any other fact
that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no impact to the General Fund for this project. The total proposed cost of the Council Chambers
upgrade for Fiscal Year 2019 is approximately $321,810, which will be funded from the Public, Education
and Government (PEG) fund. Maintenance is an additional annual fee and will begin after the conclusion of
the installation, testing and operational readiness of the Council Chamber equipment. Maintenance costs
are expected to begin in FY 2020and will be included in the proposed FY 2020 budget. Cost for
maintenance is located in the “Ongoing Fiscal Impact” section of this report. Staff is seeking approval to
appropriate funds from the Public, Education and Government Fund to cover the cost to implement this
project. The project total includes an additional $50,000, which is anticipated to coverlighting system
repairs/upgradecosts,which are unknown at this time,and other contingency costs related to this project.
Lighting system repair costs could not be ascertained as part of this project due to the need to conduct
extensive trouble-shooting and testing of the current Council Chambers lighting systemby qualified
professionals.
ONGOING FISCAL IMPACT
Table 3 below details the ongoing fiscal impact for a maintenance contract with Western Audio Visual.
TABLE 3
v.001 Page|5
Fiscal Year 2020 represents a 50% discount from the normal rate of $8,088, and Fiscal Year 2021
represents a 25% discount on the normal rate of $8,088. Normal maintenance fee rates commence in FY
2022. These costs will also be funded by the Public, Education and Government Fund balance, resulting in
no impact to the General Fund.
ATTACHMENTS
1.City of Chula Vista Council Chamber Equipment Upgrades and Maintenance Agreement RFP #P23–
17/18
2.Contract for Services –Western Audio Visual
Staff Contact: Edward Chew, Director, Information and Technology Services
Page|6
COUNCIL RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING
BIDS AND AWARDING A CONTRACT FOR SERVICES TO WESTERN AUDIO VISUAL
FOR THE PURCHASE, INSTALLATION AND MAINTENANCE OF CITY COUNCIL
CHAMBERS ELECTRONICEQUIPMENT AND DISPLAYS, AND APPROPRIATING
FUNDS THEREFOR (4/5 VOTE REQUIRED)
WHEREAS,the City Council Chambers audio visual equipment was last upgraded in
2013; and
WHEREAS, recently the City Council Chambers audio visual equipment has been
malfunctioning and recent troubleshooting and repair efforts have been unsuccessful at remedying
the issues; and
WHEREAS, there have been significant technological advancements in the equipment
used for audio visual controls since 2013; and
WHEREAS, audio visual consultants and technicians have all suggested significant
upgrades to the City Council Chamber equipment; and
WHEREAS, City staff issued Request for Proposal (RFP) # P23-1718for upgrades to all
the City Council audio visual equipment; and
WHEREAS, the City received 6 responses from audio visual companies and after a
thorough review of pricing, experience and planning, chose Western Audio Visual to complete the
City Council Chambers technology upgrade and provide 5-years of maintenance; and
WHEREAS, the City Council Chambers upgrade will be funded the via Public, Education
and GovernmentFund.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista,
that itaccepts bids and awards a contract for services to Western Audio Visual for the purchase,
installation and maintenance of City Council Chambers electronic equipment and displays;
appropriates $321,810from the available balance of the Public, Education and Government Fund;
andauthorizesthe City Manager or designee to execute the agreement with Western Audio Visual
in the form presented, with such minor modifications as the City Attorney may require or approve,
a copy of which is on file in the office of the City Clerk, and authorizes and directs the Mayor, or
the City Manager, to execute the agreement.
Presented byApproved as to form by
Edward ChewGlen R. Googins
Director,Information TechnologyServicesCity Attorney
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CITY OF CHULA VISTA
CONTRACTOR/SERVICE PROVIDERSERVICES AGREEMENT
WITH\[COMPANY NAME\]
TO PROVIDECITY COUNCIL CHAMBERS-AUDIO/VISUAL SYSTEMS
1
This Agreement is entered into effective as of Enter Date (“Effective Date”)by and between the
City of Chula Vista, a chartered municipal corporation (“City”) and\[Company\], Entity Type (e.g.
A California Corporation) (“Contractor/Service Provider”) (collectively, the “Parties” and,
individually, a “Party”) with reference to the following facts:
2
WHEREAS, Enter Recitals To Describe Basis For Service–See example below;and
WHEREAS, Enter Recitals To DescribeContractor/Service ProviderSelection Process–
3
See example below; and
Enter Additional Recitals As Needed OrDelete This Line
WHEREAS,Contractor/Service Providerwarrants and represents that it is experienced and
staffed in a manner such that it can deliver the services required ofContractor/Service Providerto
City in accordance with the time frames and the terms and conditions of this Agreement.
\[End of Recitals. Next Page Starts Obligatory Provisions.\]
1If City Council approved, insert date of City Council approval. Otherwise, insert a date no later than date Contractor’s work
commences.
For example: “WHEREAS, City requires _____________ \[e.g.,landscape maintenance\] services in order to
____________________ \[e.g.,maintain the public park\];” and
For example: “WHEREAS, In order to procure these services City solicited proposals in accordance with Chula Vista Municipal
Code Section _________________ \[2.56.080 for contracts exceeding $100,000; 2.56.090 for contracts of $100,000 or less;
2.56.110 for “professional services” e.g., architects, lawyers, engineers, environmental\], received __ proposals, and selected
Consultant as the most qualified amongst those submitting; and”
\[OR, if the project was sole-sourced\]
“WHEREAS, In order to procure these services Contractorwas chosen based on Contractor’s unique qualifications,
including ________________; on this basis, Contractorwas awarded the contract on a “sole source” basis under the authority
of Chula Vista Municipal Code Section ____________ \[2.56.070.B.4. for contracts approved by City Council; 2.56.090.B.3.
for contracts approved at a staff level\].”
\[OR, if an alternative procurement process is used\]
“WHEREAS, In order to procure these services Contractorwas chosen __________________.”
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O BLIGATORY P ROVISIONS
NOW, THEREFORE, in consideration of the above recitals, the covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency of which the
Parties hereby acknowledge, City andContractor/Service Providerhereby agree as follows:
1.SERVICES
1.1Required Services.Contractor/Service Provideragrees to perform the services, and
deliver to City the “Deliverables” (if any) described in the attached ExhibitA, incorporated
into the Agreement by this reference, within the time frames set forth therein, time being of
the essence for this Agreement. The services and/or Deliverables described in Exhibit A shall
be referred to herein as the “Required Services.”
1.2Reductions in Scope of Work.City may independently, or upon request from
Contractor/Service Provider, from time to time, reduce the Required Services to be performed
by theContractor/Service Providerunder this Agreement. Upon doing so, City and
Contractor/Service Provideragree tomeet and confer in good faith for the purpose of
negotiating a corresponding reduction in the compensation associated with the reduction.
1.3Additional Services.Subject to compliance with the City’s Charter, codes, policies,
procedures and ordinances governing procurement and purchasing authority, City may request
Contractor/Service Providerprovide additional services related to the Required Services
(“Additional Services”). If so, City andContractor/Service Provideragree to meet and confer
in good faith for the purpose of negotiating an amendment to Exhibit A, to add the Additional
Services. Unless otherwise agreed, compensation for the Additional Services shall be charged
and paid consistent with the rates and terms already provided therein. Once added to Exhibit
A, “Additional Services” shall also become “Required Services” for purposes of this
Agreement.
1.4Standard of Care.Contractor/Service Providerexpressly warrants and agrees that any
and all Required Services hereunder shall be performed in accordance with the highest standard
of care exercised by members of the profession currently practicing under similar conditions
and in similar locations.
1.5No Waiver of Standard of Care. Where approval by City is required, it is understood
to be conceptual approval only and does not relieve theContractor/Service Providerof
responsibility for complying with all laws, codes, industry standards, and liability for damages
caused by negligent acts, errors, omissions, noncompliance with industry standards, or the
willful misconduct of theContractor/Service Provideror its subcontractors.
1.6Security for Performance. In the event that Exhibit A Section 4 indicates the need for
Contractor/Service Providerto provide additional security for performance of its duties under
this Agreement,Contractor/Service Providershall provide such additional security prior to
commencement of its Required Services in the form and on the terms prescribed onExhibit A,
or as otherwise prescribed by the City Attorney.
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1.7Compliance with Laws.In its performance of the Required Services,
Contractor/Service Providershall comply with any and all applicable federal, state and local
laws, including the Chula Vista Municipal Code.
1.8Business License.Prior to commencement of work,Contractor/Service Providershall
obtain a business license from City.
1.9Subcontractors. Prior to commencement of any work,Contractor/Service Provider
shall submit for City’s information and approval a list of any and all subcontractors to be used
byContractor/Service Providerin the performance of the Required Services.
Contractor/Service Provideragrees to take appropriate measures necessary to ensure that all
subcontractors and personnel utilized by theContractor/Service Providerto complete its
obligations under this Agreement comply with all applicable laws, regulations, ordinances, and
policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill
any responsibilities of theContractor/Service Providerunder this Agreement,
Contractor/Service Providershall ensure that each and every subcontractor carries out the
Contractor/Service Provider’s responsibilitiesas set forth in this Agreement.
1.10Term. This Agreement shall commence on the earlier to occur of the Effective Date or
Contractor/Service Provider’s commencement of the Required Services hereunder, and shall
terminate when the Parties have complied with all their obligations hereunder; provided,
however, provisions which expressly survive termination shall remain in effect.
2.COMPENSATION
2.1General. For satisfactory performance of the Required Services, City agrees to
compensateContractor/Service Providerin the amount(s) and on the terms set forth in Exhibit
A, Section 4. Standard terms for billing and payment are set forth in this Section 2.
2.2Detailed Invoicing.Contractor/Service Provideragrees to provide City with a detailed
invoice for services performed each month, within thirty (30) days of the end of the month in
which the services were performed, unless otherwise specified in Exhibit A. Invoicing shall
begin on the first of the month following the Effective Dateof the Agreement. All charges
must be presented in a line item format with each task separately explained in reasonable detail.
Each invoice shall include the current monthly amount being billed, the amount invoiced to
date, and the remaining amount available under any approved budget.Contractor/Service
Providermust obtain prior written authorization from City for any fees or expenses that exceed
the estimated budget.
2.3Payment toContractor/Service Provider. Upon receipt of a properly prepared invoice
and confirmation that the Required Services detailed in the invoice have been satisfactorily
performed, City shall payContractor/Service Providerfor the invoice amount within thirty
(30) days. Payment shallbe made in accordance with the terms and conditions set forth in
ExhibitA and section 2.4, below. At City’s discretion, invoices not timely submitted may be
subject to a penalty of up to five percent (5%) of the amount invoiced.
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2.4Retention Policy.City shall retain ten percent (10%) of the amount due for Required
Services detailed on each invoice (the “holdback amount”). Upon City review and
determination of Project Completion, the holdback amount will be issued toContractor/Service
Provider.
2.5Reimbursement of Costs. City may reimburseContractor/Service Provider’s out-of-
pocket costs incurred byContractor/Service Providerin the performance of the Required
Services if negotiated in advance and included in Exhibit A. Unless specifically provided in
Exhibit A,Contractor/Service Providershall be responsible for any and all out-of-pocket costs
incurred byContractor/Service Providerin the performance of the Required Services.
2.6Exclusions.City shall not be responsible for payment toContractor/Service Provider
for any fees or costs in excess of any agreed upon budget, rate or other maximum amount(s)
provided for in Exhibit A.City shall also not be responsible for any cost: (a) incurred prior to
the Effective Date; or (b) arising out ofor related to the errors, omissions, negligence or acts
of willful misconduct ofContractor/Service Provider, its agents, employees, or subcontractors.
2.7Payment Not Final Approval.Contractor/Service Providerunderstands and agrees that
payment to theContractor/Service Provideror reimbursement for anyContractor/Service
Providercosts related to the performance of Required Services does not constitute a City final
decision regarding whether such payment or cost reimbursement is allowable and eligiblefor
payment under this Agreement, nor does it constitute a waiver of any violation by
Contractor/Service Providerof the terms of this Agreement. If City determines that
Contractor/Service Provideris not entitled to receive any amount of compensationalready
paid, City will notifyContractor/Service Providerin writing andContractor/Service Provider
shall promptly return such amount.
3.INSURANCE
3.1Required Insurance.Contractor/Service Providermust procure and maintain, during
the period of performance of Required Services under this Agreement, and for twelve months
after completion of Required Services, the policies of insurance described on the attached
Exhibit B, incorporated into the Agreement by this reference (the “Required Insurance”). The
Required Insurance shall also comply with all other terms of this Section.
3.2Deductibles and Self-Insured Retentions.Any deductibles or self-insured retentions
relating to the Required Insurancemust be disclosed to and approved by City in advance of the
commencement of work.
3.3Standards for Insurers. Required Insurance must be placed with licensed insurers
admitted to transact business in the State of California with a current A.M. Best’srating of A
V or better, or, if insurance is placed with a surplus lines insurer, insurer must be listed on the
State of California List of Eligible Surplus Lines Insurers (LESLI) with a current A.M. Best’s
rating of no less than A X. For Workers’ Compensation Insurance, insurance issued by the
State Compensation Fund is also acceptable.
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3.4Subcontractors.Contractor/Service Providermust include all sub-Contractor/Service
Providers/sub-contractors as insureds under its policies and/or furnishseparate certificates and
endorsements demonstrating separate coverage for those not under its policies. Any separate
coverage for sub-Contractor/Service Providers must also comply with the terms of this
Agreement.
3.5Additional Insureds. City, its officers, officials, employees, agents, and volunteers
must be named as additional insureds with respect to any policy of general liability,
automobile, or pollution insurance specified as required in Exhibit B or as may otherwise be
specified by City’s RiskManager.. The general liability additional insured coverage must be
provided in the form of an endorsement to theContractor/Service Provider’s insurance using
ISO CG 2010 (11/85) or its equivalent; such endorsement must not exclude
Products/Completed Operations coverage.
3.6General Liability Coverage to be “Primary.”Contractor/Service Provider’s general
liability coverage must be primary insurance as it pertains to the City, its officers, officials,
employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its
officers, officials, employees, or volunteers is wholly separate from the insurance provided by
Contractor/Service Providerand in no way relievesContractor/Service Providerfrom its
responsibility to provide insurance.
3.7No Cancellation.No Required Insurance policy may be canceled by either Party during
the required insured period under this Agreement, except after thirty days’ prior written notice
to the City by certified mail, return receipt requested. Prior to the effective date of any such
cancellationContractor/Service Providermust procure andput into effect equivalent
coverage(s).
3.8Waiver of Subrogation.Contractor/Service Provider’s insurer(s) will provide a Waiver
of Subrogation in favor of the City for each Required Insurance policy under this Agreement.
In addition,Contractor/Service Providerwaives any right it may have or may obtain to
subrogation for a claim against City.
3.9Verification of Coverage. Prior to commencement of any work,Contractor/Service
Providershall furnish City with original certificates of insuranceand any amendatory
endorsements necessary to demonstrate to City thatContractor/Service Providerhas obtained
the Required Insurance in compliance with the terms of this Agreement. The words “will
endeavor” and “but failure to mail such notice shall impose no obligation or liability of any
kind upon the company, its agents, or representatives” or any similar language must be deleted
from all certificates. The required certificates and endorsements should otherwise be on
industry standard forms. The City reserves the right to require, at any time, complete, certified
copies of all required insurance policies, including endorsements evidencing the coverage
required by these specifications.
3.10Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos
Pollution Liability and/or Errors & Omissions coverage are required and are provided on a
claims-made form, the following requirements also apply:
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a.The “Retro Date” must be shown, and must be before the date of this Agreement
orthe beginning of the work required by this Agreement.
b.Insurance must be maintained, and evidence of insurance must be provided, for at
least five (5) years after completion of the work required by this Agreement.
c.If coverage is canceled or non-renewed, and not replaced with another claims-made
policy form with a “Retro Date” prior to the effective date of this Agreement, the
Contractor/Service Providermust purchase “extended reporting” coverage for a minimum of
five (5) years after completion of the work required by this Agreement.
d.A copy of the claims reporting requirements must be submitted to the City for
review.
3.11Not a Limitation of Other Obligations. Insurance provisions under this section shall
notbe construed to limit theContractor/Service Provider’s obligations under this Agreement,
including Indemnity.
3.12Additional Coverage. To the extent that insurance coverage provided by
Contractor/Service Providermaintains higher limits than the minimums appearing in Exhibit
B, City requires and shall be entitled to coverage for higher limits maintained.
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4.INDEMNIFICATION
4.1.General. To the maximum extent allowed by law,Contractor/Service Providershall
protect, defend, indemnify and hold harmless City, its elected and appointed officers, agents,
employees and volunteers (collectively, “Indemnified Parties”), from and against any and all
claims, demands, causes of action, costs, expenses, (including reasonable attorneys’ fees and
court costs), liability, loss, damage or injury, in law or equity, to property or persons, including
wrongful death, in any manner arising out of or incident to any alleged acts, omissions,
negligence, or willful misconductofContractor/Service Provider, its officials, officers,
employees, agents, and contractors, arising out of or in connection with the performance of the
Required Services, the results of such performance, or this Agreement. This indemnity
provision doesnot include any claims, damages, liability, costs and expenses arising from the
sole negligence or willful misconduct of the Indemnified Parties. Also covered is liability
arising from, connected with, caused by or claimed to be caused by the active or passive
negligent acts or omissions of the Indemnified Parties which may be in combination with the
active or passive negligent acts or omissions of theContractor/Service Provider, its employees,
agents or officers, or any third party.
4.2.ModifiedIndemnity Where Agreement Involves Design Professional Services.
Notwithstanding the forgoing, if the services provided under this Agreement are design
professional services, as defined by California Civil Code section 2782.8, as may be amended
from timeto time, the defense and indemnity obligation under Section 1, above, shall be limited
to the extent required by California Civil Code section 2782.8.
4.3Costs of Defense and Award. Included inContractor/Service Provider’s obligations
under this Section 4 isContractor/Service Provider’s obligation to defend, at
Contractor/Service Provider’s own cost, expense and risk, any and all suits, actions or other
legal proceedings that may be brought or instituted against one or more of the Indemnified
Parties. Subject to the limitations in this Section 4,Contractor/Service Providershall pay and
satisfy any judgment, award or decree that may be rendered against one or more of the
Indemnified Parties for any and all related legal expenses and costs incurred by any of them.
4.4.Contractor/Service Provider’s Obligations Not Limited or Modified.
Contractor/Service Provider’s obligations under this Section 4 shall not be limited to insurance
proceeds, if any, received by the Indemnified Parties, or by any prior or subsequent declaration
by theContractor/Service Provider. Furthermore,Contractor/Service Provider’s obligations
under this Section 4 shall in no way limit, modify or excuse any ofContractor/Service
Provider’s other obligations or duties under this Agreement.
4.5.Enforcement Costs.Contractor/Service Provideragrees to pay any and all costs City
incurs in enforcingContractor/Service Provider’s obligations under this Section 4.
4.6Survival.Contractor/Service Provider’s obligations under thisSection 4 shall survive
thetermination of this Agreement.
5.FINANCIAL INTERESTS OFCONTRACTOR/SERVICE PROVIDER.
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5.1Form 700 Filing.The California Political Reform Act and the Chula Vista Conflict of
Interest Code require certain government officials andContractor/Service Providers
performing work for government agencies to publicly disclose certain of their personal assets
and income using a Statement of Economic Interests form (Form 700). In order to assure
compliance with these requirements,Contractor/Service Providershall comply with the
disclosure requirements identified in the attached Exhibit C, incorporated into the Agreement
by this reference.
5.2Disclosures; Prohibited Interests.Independent of whetherContractor/Service Provider
is required to file a Form 700,Contractor/Service Providerwarrants and represents that it has
disclosed to City any economic interests held byContractor/Service Provider, or its employees
or subcontractors who will be performing the Required Services, in any real property or project
whichis the subject of this Agreement.Contractor/Service Providerwarrants and represents
that it has not employed or retained any company or person, other than a bona fide employee
or approved subcontractor working solely forContractor/Service Provider, tosolicit or secure
this Agreement. Further,Contractor/Service Providerwarrants and represents that it has not
paid or agreed to pay any company or person, other than a bona fide employee or approved
subcontractor working solely forContractor/Service Provider, any fee, commission,
percentage, brokerage fee, gift or other consideration contingent upon or resulting from the
award or making of this Agreement.Contractor/Service Providerfurther warrants and
represents that no officer or employee of City, hasany interest, whether contractual, non-
contractual, financial or otherwise, in this transaction, the proceeds hereof, or in the business
ofContractor/Service ProviderorContractor/Service Provider’s subcontractors.
Contractor/Service Providerfurther agrees to notify City in the event any such interest is
discovered whether or not such interest is prohibited by law or this Agreement. For breach or
violation of any of these warranties, City shall have the right to rescind this Agreement without
liability.
6.REMEDIES
6.1Termination for Cause. If for any reason whatsoeverContractor/Service Providershall
fail to perform the Required Services under this Agreement, in a proper or timely manner, or
ifContractor/Service Providershall violate any of the other covenants, agreements or
conditions of this Agreement (each a “Default”), in addition to any and all other rights and
remedies City may have under this Agreement, at law or in equity, City shall have the right to
terminate this Agreement by giving five (5) days written notice toContractor/Service Provider.
Such notice shall identify the Default and the Agreement termination date. If
Contractor/Service Providernotifies City of its intent to cure such Default prior to City’s
specified termination date, and City agrees that the specified Default is capable of being cured,
City may grantContractor/Service Providerup to ten (10) additional days after the designated
termination date to effectuate such cure. In the event of a termination under this Section 6.1,
Contractor/Service Providershall immediately provide City any and all ”Work Product”
(defined in Section 7 below) prepared byContractor/Service Provideras part of the Required
Services. Such Work Product shall be City’s sole and exclusive property as provided in Section
7 hereof.Contractor/Service Providermay be entitled to compensation for work satisfactorily
performed prior toContractor/Service Provider’s receipt of the Default notice; provided,
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however, in no event shall such compensation exceed the amount that would have been payable
under this Agreement for such work, and any such compensation shall be reduced by any costs
incurred or projected to be incurred by City as a result of the Default.
6.2Termination or Suspension for Convenience of City. City may suspend or terminate
this Agreement, or any portion of the Required Services, at any time and for any reason, with
or without cause, by giving specific written notice toContractor/Service Providerof such
termination or suspension at least fifteen (15) days prior to the effective date thereof. Upon
receipt of such notice,Contractor/Service Providershall immediately cease all work under the
Agreement and promptly deliver all “Work Product” (defined in Section 7 below) to City.
Such Work Product shall be City's sole and exclusive property as provided in Section 7 hereof.
Contractor/Service Providershall be entitled to receive just and equitable compensation for
this Work Product in an amount equal to the amount due and payable under this Agreement
for work satisfactorily performed as of the date of the termination/suspension notice plus any
additional remaining Required Services requestedor approved by City in advance that would
maximize City’s value under the Agreement.
6.3Waiver of Claims. In the event City terminates the Agreement in accordance with the
terms of this Section,Contractor/Service Providerhereby expressly waives any and all claims
for damages or compensation as a result of such termination except as expressly provided in
this Section 6.
6.4Administrative Claims Requirements and Procedures. No suit or arbitration shall be
brought arisingout of this Agreement against City unless a claim has first been presented in
writing and filed with City and acted upon by City in accordance with the procedures set forth
in Chapter 1.34 of the Chula Vista Municipal Code, as same may be amended, the provisions
of which, including such policies and procedures used by City in the implementation of same,
are incorporated herein by this reference. Upon request by City,Contractor/Service Provider
shall meet and confer in good faith with City for the purposeof resolving any dispute over the
terms of this Agreement.
6.5Governing Law/Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of California. Any action arising under or relating to this
Agreement shall be brought only in San Diego County, State of California.
6.6Service of Process.Contractor/Service Provideragrees that it is subject to personal
jurisdiction in California. IfContractor/Service Provideris a foreign corporation, limited
liability company, or partnership that is not registered with the California Secretary of State,
Contractor/Service Providerirrevocably consents to service of process onContractor/Service
Providerby first class mail directed to the individual and address listed under “For Legal
Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be effective
five days after mailing.
7.OWNERSHIP AND USE OF WORK PRODUCT
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All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems
and any other materials or properties produced in whole or in part under this Agreement in
connection with the performance of the Required Services (collectively “Work Product”) shall
be the sole and exclusive property of City. No such Work Product shall be subject to private
use, copyrights or patent rights byContractor/Service Providerin the United States or in any
other country without the express, prior written consent of City. City shall have unrestricted
authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in
part, any such Work Product, without requiring any permission ofContractor/Service Provider,
except as may be limited by the provisions of the Public Records Act or expressly prohibited
by other applicable laws. With respect to computer files containing data generated as Work
Product,Contractor/Service Providershall make available to City, upon reasonable written
request by City, the necessary functional computer software and hardware for purposes of
accessing, compiling, transferring and printing computer files.
8.GENERAL PROVISIONS
8.1Amendment. This Agreement may be amended, but only in writing signed by both
Parties.
8.2Assignment. City would not have entered into this Agreement but for
Contractor/Service Provider’s unique qualifications and traits.Contractor/Service Provider
shall not assign any of its rights or responsibilities under this Agreement, nor any part hereof,
without City’s prior written consent, which City may grant, condition or deny in its sole
discretion.
8.3Authority. The person(s) executing this Agreement forContractor/Service Provider
warrants and represents that they have the authority to execute sameon behalf of
Contractor/Service Providerand to bindContractor/Service Providerto its obligations
hereunder without any further action or direction fromContractor/Service Provideror any
board, principle or officer thereof.
8.4Counterparts.This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which shall constitute one Agreement after each Party has
signed such a counterpart.
8.5Entire Agreement. This Agreement together with all exhibits attached hereto and other
agreements expressly referred to herein, constitutes the entire Agreement between the Parties
with respect to the subject matter contained herein. All exhibits referenced herein shall be
attached hereto and are incorporated herein by reference. All prior or contemporaneous
agreements, understandings, representations, warranties and statements, oral or written, are
superseded.
8.6Record Retention. During the course of the Agreement and for three (3) years following
completion of the Required Services,Contractor/Service Provideragrees to maintain, intact
and readily accessible, all data, documents, reports, records, contracts, and supporting
materials relating to the performance of the Agreement, including accounting for costs and
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expensescharged to City, including such records in the possession of sub-contractors/sub-
Contractor/Service Providers.
8.7Further Assurances. The Parties agree to perform such further acts and to execute
and deliver such additional documents and instrumentsas may be reasonably required in
order to carry out the provisions of this Agreement and the intentions of the Parties.
8.8Independent Contractor.Contractor/Service Provideris and shall at all times remain
as to City a wholly independent contractor. Neither City nor any of its officers, employees,
agents or volunteers shall have control over the conduct ofContractor/Service Provideror any
ofContractor/Service Provider’sofficers, employees, or agents (“Contractor/Service Provider
Related Individuals”), except as set forth in this Agreement. NoContractor/Service Provider
Related Individuals shall be deemed employees of City, and none of them shall be entitled to
any benefits to which City employees are entitled, including but not limited to, overtime,
retirement benefits, worker's compensation benefits, injury leave or other leave benefits.
Furthermore, City will not withhold state or federal income tax, social securitytax or any other
payroll tax with respect to anyContractor/Service ProviderRelated Individuals; instead,
Contractor/Service Providershall be solely responsible for the payment of same and shall hold
the City harmless with respect to same.Contractor/Service Providershall not at any time or in
any manner represent that it or any of itsContractor/Service ProviderRelated Individuals are
employees or agents of City.Contractor/Service Providershall not incur or have the power to
incur any debt, obligation or liability whatsoever against City, or bind City in any manner.
8.9Notices. All notices, demands or requests provided for or permitted to be given
pursuant to this Agreement must be in writing. All notices, demands and requests to be sent
to anyParty shall be deemed to have been properly given or served if personally served or
deposited in the United States mail, addressed to such Party, postage prepaid, registered or
certified, with return receipt requested, at the addresses identified in this Agreement at the
places of business for each of the designated Parties as indicated in Exhibit A, or otherwise
provided in writing.
(End of page. Next page is signature page.)
City of Chula Vista RFP P23-17/1848AV Systems Upgrades
SIGNATURE PAGE
CONTRACTOR/SERVICE PROVIDERSERVICES AGREEMENT
IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and
Contractor/Service Provideragree that they have read and understood all terms and conditions of
the Agreement, that they fully agree and consent to bound by same, and that they are freely entering
into this Agreement as of the Effective Date.
\[COMPANY\]CITY OF CHULA VISTA
BY:________________________________BY: ________________________________
Enter Name Of SignatoryChoose a signatory.
Enter Title Of SignatoryChoose the signatory’s title.
4
ATTEST
BY:
________________________________
Kerry K. Bigelow, MMC
City Clerk
APPROVED AS TO FORM
BY:
________________________________
Glen R. Googins
City Attorney
4Attestation signature only required if the Mayor signs the Agreement. If Mayor is not signing agreement, delete
entire attestation signature block.
City of Chula Vista RFP P23-17/1849AV Systems Upgrades
EXHIBIT A
SCOPE OF WORK AND PAYMENT TERMS
INSTRUCTIONS: ENTER INFORMATION AS REQUESTED. FOR SECTIONS THAT
PROVIDE OPTIONS, SELECT THE CORRECT OPTION. IF YOU WISH TO ATTACH
ADDITIONAL INFORMATION RELATED TO EXHIBIT A, PLEASE ATTACH AND LABEL
AS EXHIBIT A, ATTACHMENT (1,2, ETC.)DELETE OPTIONS NOTSELECTED AND
ALL INSTRUCTIONS..
1.Contact People for Contract Administration and Legal Notice
A.City Contract Administration:
Enter City Staff Person Name
Enter Mailing Address
Enter Phone Number
Enter Email Address
For Legal Notice Copyto:
City of Chula Vista
City Attorney
276 Fourth Avenue, Chula Vista, CA 91910
619-691-5037
CityAttorney@chulavistaca.gov
B.Contractor/Service ProviderContract Administration:
\[COMPANY\]
Enter Mailing Address
Enter Phone Number
Enter Email Address
For Legal Notice Copy to:
EnterContractor/Service ProviderStaff Person Name
Enter Mailing Address
Enter Phone Number
Enter Email Address
2.Required Services
A.General Description:
Enter Summary Of Work To Be Performed (e.g.Contractor/Service ProviderXYZ Will Provide
Customer Service Trainings To City Staff)
B.Detailed Description:
Enter Detailed Information About Each Task To Be Performed, Including Task Description,
Associated Deliverables, And Completion Date. May Be Written As Narrative Or Table, As
Illustrated Below. Delete Table If Not Used.
City of Chula Vista RFP P23-17/1850AV Systems Upgrades
TaskDescriptionDeliverablesCompletion Date
1Example: Conduct trainings forProvide copy of training
City staffmaterials, sign-in sheet
and list of agreed-upon
next steps
2Enter Additional Lines For
Tasks As Needed; Delete
Excess Lines
3
4
3.Term:In accordance with Section 1.10 of this Agreement, the term of this Agreement shall
beginEnter Dateand end onEnter Datefor completion of all Required Services.
4.Compensation: SELECT ONE OF THE FOLLOWING OPTIONSTHENDELETE
ANY OPTION THAT ISNOT APPLICABLE, AS WELL AS THESE INSTRUCTIONS
A.Form of Compensation
Single Fixed Fee. For performance of all of the Required Services byContractor/Service
Provideras herein required, City shall pay a single fixed fee of$Enter Contract Amount, upon
completion of all Required Services to City’s satisfaction.
OR
Fixed Fee Paid in Increments. For the completion of each Deliverable of the Required Services,
as identified in section 2.B., above, City shall pay the fixed fee associated witheach Deliverable,
in the amounts set forth below:
Task No.DeliverableAmount
OR
Time and Materials. For performance of the Required Services byContractor/Service Provider
as identified in Section 2.B., above, City shall payContractor/Service Providerfor the productive
hours of time spent byContractor/Service Providerin the performance of the Required Services,
at the rates or amounts as indicated below:
Enter Applicable Hourly Rates
B.Reimbursement of Costs
None, the compensation includes all costs
City of Chula Vista RFP P23-17/1851AV Systems Upgrades
OR
Invoiced or agreed-upon amounts as follows:
Enter or Attachand Reference Any Agreed-Upon Cost Reimbursements
Notwithstanding the foregoing, the maximum amount to be paid to theContractor/ServiceProvider
for services performed throughEnter End of Contract Dateshall not exceedEnter Amount.
5.Special Provisions:
DELETE ALL INSTRUCTIONS.
Permitted Sub-Contractor/Service Providers: List Permitted Sub-Contractor/Service Providers
or Indicate “None”
Security for Performance: See City Attorney or Indicate “None” if Not Applicable
Notwithstanding the completion date set forth in Section 3 above, City has option to extend this
Agreement forInsert Number of Termsadditional terms, defined as a one-year increment orEnter
a Specific Date. if applicable.The City Manager or Director of Finance/Treasurer shall be
authorized to exercise the extensions on behalf of the City. If the City exercises an option to
extend, each extension shall be on the same terms and conditions contained herein, provided that
the amounts specified in Section 4 above may be increased by up toInsert Percentage of Increase
or Actual Dollar Amountfor each extension. The City shall give written notice to
Contractor/Service Providerof the City’s election to exercise the extension via the Notice of
Exercise of Option to Extend document. Such notice shall be provided at least 30 days prior to
the expiration of the term.
Other: Describe Special Provisions (Delete Line If Not Applicable)
None
City of Chula Vista RFP P23-17/1852AV Systems Upgrades
EXHIBIT B
Contractor/Service Providershall adhere to all terms and conditions of Section 3 of the
Agreement and agrees to provide the following types and minimum amounts of insurance, as
indicated by checking the applicable boxes (x).
Type of InsuranceMinimum AmountForm
GeneralLiability:$2,000,000 per occurrence forInsurance Services Office Form
Including products andbodily injury, personal injuryCG 00 01
completed operations,(including death), and property
personal anddamage. If Commercial General
advertising injuryLiability insurance with a general
aggregatelimit is used, either the
general aggregate limit must apply
separately to this Agreement or the
general aggregate limit must be
twice the required occurrence limit
Additional Insured Endorsement*Must be primary and must not
or Blanket AI Endorsement forexclude Products/Completed
City*Operations
Waiver of Recovery Endorsement
Automobile Liability$1,000,000 per accident for bodilyInsurance ServicesOffice Form
injury, including death, andCA 00 01
property damageCode 1-Any Auto
Code 8-Hired
Code 9-Non Owned
Workers’$1,000,000 each accident
Compensation$1,000,000 disease policy limit
Employer’s Liability$1,000,000 disease each employee
Waiver of Recovery Endorsement
Other NegotiatedInsurance Terms: ENTER ANY ADDITIONAL TERMS OR “NONE”
City of Chula Vista RFP P23-17/1853AV Systems Upgrades
EXHIBIT C
CONTRACTOR/SERVICE PROVIDERCONFLICT OF INTEREST DESIGNATION
56
The Political Reform Actand the Chula Vista Conflict of Interest Code(“Code”) require
designated state and local governmentofficials, including someContractor/Service Providers, to
make certain public disclosures using a Statement of Economic Interests form (Form 700).Once
filed, a Form 700 is a public document, accessible to any member of the public. In addition,
Contractor/Service Providers designated to file the Form 700 are also required to comply with
7
certain ethics training requirements.
A.Contractor/Service ProviderISa corporation or limited liability company and is therefore
8
EXCLUDEDfrom disclosure.
B.Contractor/Service ProviderisNOTa corporation or limited liability company and
disclosure designation is as follows:
APPLICABLE DESIGNATIONS FOR INDIVIDUAL(S) ASSIGNED TO PROVIDE
SERVICES
(Category descriptions available atwww.chulavistaca.gov/departments/city-clerk/conflict-of-
interest-code.)
NameEmail AddressApplicable Designation
Enter Name of Each
Enter email
A. Full Disclosure
Individual Who Will Be
address(es)
B. Limited Disclosure(select one or
Providing Service Under
more ofthe categories under which the
the Contract–If
Contractorshall file):
individuals have different
1.2.3.4.5.
disclosure requirements,
6.7.
duplicate this row and
Justification:
complete separately for
each individual
C. Excluded from Disclosure
1.Required Filers
Each individual who will be performing services for the City pursuant to theAgreement and who meets
the definition of “Contractor/Service Provider,” pursuant to FPPC Regulation 18700.3, must file a Form
700.
2.Required Filing Deadlines
Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk
via the City's online filing system, NetFile, within 30 days of the approval of the Agreement. Additional
Form 700 filings will be required annually on April 1 during the term of the Agreement, and within 30
days of the termination of the Agreement.
3. Filing Designation
The City Department Director will designate each individual who will be providing services to the City
pursuant to the Agreement asfull disclosure, limited disclosure,orexcluded from disclosure, based on
5Cal.Gov. Code §§81000et seq.; FPPC Regs. 18700.3 and 18704.
6Chula Vista Municipal Code §§2.02.010-2.02.040.
7Cal. Gov. Code §§53234,et seq.
th
8CA FPPC Adv. A-15-147 (Chadwick) (2015);Davis v. Fresno Unified School District(2015) 237 Cal.App.4
261; FPPC Reg. 18700.3 (Consultant defined as an “individual” who participates in making a governmental
decision; “individual” does not include corporation or limited liability company).
City of Chula Vista RFP P23-17/1854AV Systems Upgrades
an analysis of the servicestheContractor/Service Providerwill provide. Notwithstanding this
designation or anything in the Agreement, theContractor/Service Provideris ultimately responsible for
complying with FPPC regulations and filing requirements. If you have any questions regarding filing
requirements, please do not hesitate to contact the City Clerk at (619)691-5041, or the FPPC at 1-866-
ASK-FPPC, or (866) 275-3772 *2.
Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the
written determination of theContractor’srequirement to comply with the disclosure requirements set forth in
the Code.
Completed by: Enter City S
City of Chula Vista RFP P23-17/1855AV Systems Upgrades
CITY OF CHULA VISTA
CONTRACTOR/SERVICE PROVIDERSERVICES AGREEMENT
WITHWESTERN A/V DBA: WESTERN AUDIO VISUAL
TO PROVIDECOUNCIL CHAMBERS AUDIO VISUAL EQUIPMENTREPLACEMENT AND
INTEGRATION
This Agreement is entered into effective as ofMarch 26,2019(“Effective Date”)by and between the City of
Chula Vista, a chartered municipal corporation (“City”) andWestern A/V DBA: Western Audio Visual,A
California Corporation(“Contractor/Service Provider”) (collectively, the “Parties” and, individually, a “Party”)
with reference to the following facts:
R ECITALS
WHEREAS,the City of Chula Vista desires to replace all of the audio/visual equipment in the Council
Chambers with the exception of the video production equipment;and
WHEREAS,in accordance with Chula Vista Municipal Code 2.56.080,the City of Chula Vista conducted
a Request for Proposal # P23–17/18 to select a contractor to purchase and install necessary audio/visual
equipment; and
WHEREAS, Western Audio Visual was the contractor selected from a competitive process due to their
previous experience and superior pricing: and
WHEREAS,Contractor/Service Providerwarrants and represents that it is experienced and staffed in a
manner such that it can deliver the services required ofContractor/Service Providerto City in accordance with
the time frames and the terms and conditions of this Agreement.
\[End of Recitals. Next Page Starts Obligatory Provisions.\]
City of Chula Vista AgreementNo.:19022
1
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
O BLIGATORY P ROVISIONS
NOW, THEREFORE, in consideration of the above recitals, the covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, City and
Contractor/Service Providerhereby agree as follows:
1.SERVICES
1.1Required Services.Contractor/Service Provideragrees to perform the services, and deliver to City the
“Deliverables” (if any) described in the attached ExhibitA, incorporated into the Agreement by this reference,
within the time frames set forth therein, time being of the essence for this Agreement. The services and/or
Deliverables described in Exhibit A shall be referred to herein as the “Required Services.”
1.2Reductions in Scope of Work.City may independently, or upon request fromContractor/Service
Provider, from time to time, reduce the Required Services to be performed by theContractor/Service Provider
under this Agreement. Upon doing so, City andContractor/Service Provideragree to meet and confer in good
faith for the purpose of negotiating a corresponding reduction in the compensation associated with the
reduction.
1.3Additional Services.Subject to compliance with the City’s Charter, codes, policies, procedures and
ordinances governing procurement andpurchasing authority, City may requestContractor/Service Provider
provide additional services related to the Required Services (“Additional Services”). If so, City and
Contractor/Service Provideragree to meet and confer in good faith for the purpose ofnegotiating an
amendment to Exhibit A, to add the Additional Services. Unless otherwise agreed, compensation for the
Additional Services shall be charged and paid consistent with the rates and terms already provided therein.
Once added to Exhibit A, “Additional Services” shall also become “Required Services” for purposes of this
Agreement.
1.4Standard of Care.Contractor/Service Providerexpressly warrants and agrees that any and all Required
Services hereunder shall be performed in accordance with the highest standard of care exercised by members
of the profession currently practicing under similar conditions and in similar locations.
1.5No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual
approval only and does not relieve theContractor/Service Providerof responsibility for complying with all
laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions,
noncompliance with industry standards, or the willful misconduct of theContractor/Service Provideror its
subcontractors.
1.6Security for Performance. In the event that Exhibit A Section 4 indicates the need for
Contractor/Service Providerto provide additional security for performance of its duties under this Agreement,
Contractor/Service Providershall provide such additional security prior to commencement of its Required
Services in the form and on the terms prescribed onExhibit A, or as otherwise prescribed by the City Attorney.
1.7Compliance with Laws.In its performance of the Required Services,Contractor/Service Provider
shall comply with any and all applicable federal, state and local laws, including the Chula Vista Municipal
Code.
1.8Business License.Prior to commencement of work,Contractor/Service Providershall obtain a
business license from City.
City of Chula Vista AgreementNo.:19022
2
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
1.9Subcontractors. Prior to commencement of any work,Contractor/Service Providershall submit for
City’s information and approval a list of any and all subcontractors to be used byContractor/Service Provider
in the performance of the Required Services.Contractor/Service Provideragrees to take appropriate measures
necessary to ensure that all subcontractors and personnel utilized by theContractor/Service Providerto
complete its obligations under this Agreement comply with all applicable laws, regulations, ordinances, and
policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill any
responsibilities of theContractor/Service Providerunder this Agreement,Contractor/Service Providershall
ensure that each and every subcontractor carries out theContractor/Service Provider’s responsibilitiesas set
forth in this Agreement.
1.10Term. This Agreement shall commence on the earlier to occur of the Effective Date or
Contractor/Service Provider’s commencement of the Required Services hereunder, and shall terminate when
the Parties have complied with all their obligations hereunder; provided, however, provisions which expressly
survive termination shall remain in effect.
2.COMPENSATION
2.1General. For satisfactory performance of the Required Services, City agrees to compensate
Contractor/Service Providerin the amount(s) and on the terms set forth in Exhibit A, Section 4. Standard
terms for billing and payment are set forth in this Section 2.
2.2Detailed Invoicing.Contractor/Service Provideragrees to provide City with a detailed invoice for
services performed each month, within thirty (30) days of the end of the month in which the services were
performed, unless otherwise specified in Exhibit A. Invoicing shall begin on the first of the month following
the Effective Dateof the Agreement. All charges must be presented in a line item format with each task
separately explained in reasonable detail. Each invoice shall include the current monthly amount being billed,
the amount invoiced to date, and the remaining amount available under any approved budget.
Contractor/Service Providermust obtain prior written authorization from City for any fees or expenses that
exceed the estimated budget.
2.3Payment toContractor/Service Provider. Upon receipt of a properly prepared invoice and
confirmation that the Required Services detailed in the invoice have been satisfactorily performed, City shall
payContractor/Service Providerfor the invoice amount within thirty (30) days. Payment shallbe made in
accordance with the terms and conditions set forth in ExhibitA and section 2.4, below. At City’s discretion,
invoices not timely submitted may be subject to a penalty of up to five percent (5%) of the amount invoiced.
2.4Retention Policy.City shall retain ten percent (10%) of the amount due for Required Services detailed
on each invoice (the “holdback amount”). Upon City review and determination of Project Completion, the
holdback amount will be issued toContractor/Service Provider.
2.5Reimbursement of Costs. City may reimburseContractor/Service Provider’s out-of-pocket costs
incurred byContractor/Service Providerin the performance of the Required Services if negotiated in advance
and included in Exhibit A. Unless specifically provided in Exhibit A,Contractor/Service Providershall be
responsible for any and all out-of-pocket costs incurred byContractor/Service Providerin the performance of
the Required Services.
2.6Exclusions.City shall not be responsible for payment toContractor/Service Providerfor any fees or
costs in excess of any agreed upon budget, rate or other maximum amount(s) provided for in Exhibit A.City
City of Chula Vista AgreementNo.:19022
3
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
shall also not be responsible for any cost: (a) incurred prior to the Effective Date; or (b) arising out ofor
related to the errors, omissions, negligence or acts of willful misconduct ofContractor/Service Provider, its
agents, employees, or subcontractors.
2.7Payment Not Final Approval.Contractor/Service Providerunderstands and agrees that payment to
theContractor/Service Provideror reimbursement for anyContractor/Service Providercosts related to the
performance of Required Services does not constitute a City final decision regarding whether such payment
or cost reimbursement is allowable and eligiblefor payment under this Agreement, nor does it constitute a
waiver of any violation byContractor/Service Providerof the terms of this Agreement. If City determines
thatContractor/Service Provideris not entitled to receive any amount of compensationalready paid, City will
notifyContractor/Service Providerin writing andContractor/Service Providershall promptly return such
amount.
3.INSURANCE
3.1Required Insurance.Contractor/Service Providermust procure and maintain, during the period of
performance of Required Services under this Agreement, and for twelve months after completion of Required
Services, the policies of insurance described on the attached Exhibit B, incorporated into the Agreement by
this reference (the “Required Insurance”). The Required Insurance shall also comply with all other terms of
this Section.
3.2Deductibles and Self-Insured Retentions.Any deductibles or self-insured retentions relating to the
Required Insurancemust be disclosed to and approved by City in advance of the commencement of work.
3.3Standards for Insurers. Required Insurance must be placed with licensed insurers admitted to transact
business in the State of California with a current A.M. Best’srating of A V or better, or, if insurance is placed
with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines
Insurers (LESLI) with a current A.M. Best’s rating of no less than A X. For Workers’ Compensation
Insurance, insurance issued by the State Compensation Fund is also acceptable.
3.4Subcontractors.Contractor/Service Providermust include all sub-Contractor/Service Providers/sub-
contractors as insureds under its policies and/or furnish separate certificates and endorsements demonstrating
separate coverage for those not under its policies. Any separate coverage for sub-Contractor/Service Providers
must also comply with the terms of this Agreement.
3.5Additional Insureds. City, its officers, officials, employees, agents, and volunteers must be named as
additional insureds with respect to any policy of general liability, automobile, or pollution insurance specified
as required in Exhibit B or as may otherwise be specifiedby City’s Risk Manager.. The general liability
additional insured coverage must be provided in the form of an endorsement to theContractor/Service
Provider’s insurance using ISO CG 2010 (11/85) or its equivalent; such endorsement must not exclude
Products/Completed Operations coverage.
3.6General Liability Coverage to be “Primary.”Contractor/Service Provider’s general liability coverage
must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers.
Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is
wholly separate from the insurance provided byContractor/Service Providerand in no way relieves
Contractor/Service Providerfrom its responsibility to provide insurance.
City of Chula Vista AgreementNo.:19022
4
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
3.7No Cancellation.No Required Insurance policy may be canceled by either Party during the required
insured period under this Agreement, except after thirty days’ prior written notice to the City by certified mail,
return receipt requested. Prior to the effective date of any such cancellationContractor/Service Providermust
procure and put into effect equivalent coverage(s).
3.8Waiver of Subrogation.Contractor/Service Provider’s insurer(s) will provide a Waiver of Subrogation
in favor of the City for each Required Insurance policy under this Agreement. In addition,Contractor/Service
Providerwaives any right it may have or may obtain to subrogation for a claim against City.
3.9Verification of Coverage. Prior tocommencement of any work,Contractor/Service Providershall
furnish City with original certificates of insurance and any amendatory endorsements necessary to
demonstrate to City thatContractor/Service Providerhas obtained the Required Insurance in compliance with
the terms of this Agreement. The words “will endeavor” and “but failure to mail such notice shall impose no
obligation or liability of any kind upon the company, its agents, or representatives” or any similar language
must be deleted from all certificates. The required certificates and endorsements should otherwise be on
industry standard forms. The City reserves the right to require, at any time, complete, certified copies of all
required insurance policies, including endorsements evidencingthe coverage required by these specifications.
3.10Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos Pollution Liability
and/or Errors & Omissions coverage are required and are provided on a claims-made form, the following
requirements also apply:
a.The “Retro Date” must be shown, and must be before the date of this Agreement or the beginning
of the work required by this Agreement.
b.Insurance must be maintained, and evidence of insurance must be provided, for atleast five (5)
years after completion of the work required by this Agreement.
c.If coverage is canceled or non-renewed, and not replaced with another claims-made policy form
with a “Retro Date” prior to the effective date of this Agreement, theContractor/Service Providermust
purchase “extended reporting” coverage for a minimum of five (5) years after completion of the work required
by this Agreement.
d.A copy of the claims reporting requirements must be submitted to the City for review.
3.11Not aLimitation of Other Obligations. Insurance provisions under this section shall not be construed
to limit theContractor/Service Provider’s obligations under this Agreement, including Indemnity.
3.12Additional Coverage. To the extent that insurance coverage provided byContractor/Service Provider
maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to
coverage for higher limits maintained.
City of Chula Vista AgreementNo.:19022
5
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
4.INDEMNIFICATION
4.1.General. To the maximum extent allowed by law,Contractor/Service Providershall protect, defend,
indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers
(collectively, “Indemnified Parties”), from and against any and all claims, demands, causes of action, costs,
expenses, (including reasonable attorneys’ fees and court costs), liability, loss, damage or injury, in law or
equity, to property or persons, including wrongful death, in any manner arising out of or incident to any
alleged acts, omissions, negligence, or willful misconduct ofContractor/Service Provider, its officials,
officers, employees, agents, and contractors, arising out of or in connection with the performance of the
Required Services, the results of such performance, or this Agreement. This indemnity provision does not
include any claims, damages, liability, costs and expenses arising from the sole negligence or willful
misconduct of the Indemnified Parties. Also covered is liability arising from, connected with, caused by or
claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which
may be in combination with the active or passive negligent acts or omissions of theContractor/Service
Provider, its employees, agents or officers, or any third party.
4.2.Modified Indemnity Where Agreement Involves Design Professional Services. Notwithstanding the
forgoing, if the services provided under this Agreement are design professional services, as defined by
California Civil Code section 2782.8, as may be amended from time to time, the defense and indemnity
obligation under Section 1, above, shall be limited to the extent required by California Civil Code section
2782.8.
4.3Costs of Defense and Award. IncludedinContractor/Service Provider’s obligations under this Section
4 isContractor/Service Provider’s obligation to defend, atContractor/Service Provider’s own cost, expense
and risk, any and all suits, actions or other legal proceedings that may be broughtor instituted against one or
more of the Indemnified Parties. Subject to the limitations in this Section 4,Contractor/Service Providershall
pay and satisfy any judgment, award or decree that may be rendered against one or more of the Indemnified
Parties for any and all related legal expenses and costs incurred by any of them.
4.4.Contractor/Service Provider’s Obligations Not Limited or Modified.Contractor/Service Provider’s
obligations under this Section 4 shall not be limited to insurance proceeds, if any, received by the Indemnified
Parties, or by any prior or subsequent declaration by theContractor/Service Provider. Furthermore,
Contractor/Service Provider’s obligations under this Section 4 shall in no way limit, modify or excuse any of
Contractor/Service Provider’s other obligations or duties under this Agreement.
4.5.Enforcement Costs.Contractor/Service Provideragrees to pay any and all costs City incurs in
enforcingContractor/Service Provider’s obligations under this Section 4.
4.6Survival.Contractor/Service Provider’s obligations under this Section 4 shall survive thetermination
of this Agreement.
5.FINANCIAL INTERESTS OFCONTRACTOR/SERVICE PROVIDER.
5.1Form 700 Filing.The California Political Reform Act and the Chula Vista Conflict of Interest Code
require certain government officials andContractor/Service Providers performing work for government
agencies to publicly disclose certain of their personal assets and income using a Statement of Economic
Interests form (Form 700). In order to assure compliance with these requirements,Contractor/Service
Providershall comply with the disclosure requirements identified in the attached Exhibit C, incorporated into
the Agreement by this reference.
City of Chula Vista AgreementNo.:19022
6
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
5.2Disclosures; Prohibited Interests.Independent of whetherContractor/Service Provideris required to
file a Form 700,Contractor/Service Providerwarrants and represents that it has disclosed to City any
economic interests heldbyContractor/Service Provider, or its employees or subcontractors who will be
performing the Required Services, in any real property or project which is the subject of this Agreement.
Contractor/Service Providerwarrants and represents that it has not employed or retained any company or
person, other than a bona fide employee or approved subcontractor working solely forContractor/Service
Provider, to solicit or secure this Agreement. Further,Contractor/Service Providerwarrants and represents
that it has not paid or agreed to pay any company or person, other than a bona fide employee or approved
subcontractor working solely forContractor/Service Provider, any fee, commission, percentage, brokerage
fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement.
Contractor/Service Providerfurther warrants and represents that no officer or employee of City, has any
interest, whether contractual, non-contractual, financial or otherwise, in this transaction, the proceeds hereof,
or in the business ofContractor/Service ProviderorContractor/Service Provider’s subcontractors.
Contractor/Service Providerfurther agrees to notify City in the event any such interest is discovered whether
or not such interest is prohibited by law or this Agreement. For breach or violation of any of these warranties,
City shall have the right to rescind this Agreement without liability.
6.REMEDIES
6.1Termination for Cause. If for any reason whatsoeverContractor/Service Providershallfail to perform
the Required Services under this Agreement, in a proper or timely manner, or ifContractor/Service Provider
shall violate any of the other covenants, agreements or conditions of this Agreement (each a “Default”), in
addition to any and allother rights and remedies City may have under this Agreement, at law or in equity,
City shall have the right to terminate this Agreement by giving five (5) days written notice to
Contractor/Service Provider. Such notice shall identify the Default and theAgreement termination date. If
Contractor/Service Providernotifies City of its intent to cure such Default prior to City’s specified termination
date, and City agrees that the specified Default is capable of being cured, City may grantContractor/Service
Providerup to ten (10) additional days after the designated termination date to effectuate such cure. In the
event of a termination under this Section 6.1,Contractor/Service Providershall immediately provide City any
and all ”Work Product” (defined in Section 7 below) prepared byContractor/Service Provideras part of the
Required Services. Such Work Product shall be City’s sole and exclusive property as provided in Section 7
hereof.Contractor/Service Providermay be entitled to compensation for work satisfactorily performed prior
toContractor/Service Provider’s receipt of the Default notice; provided, however, in no event shall such
compensation exceed the amount that would have been payable under this Agreement for such work, and any
such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of
the Default.
6.2Termination or Suspension for Convenience of City. City may suspend or terminate this Agreement,
or any portion of the Required Services, at any time and for any reason, with or without cause, by giving
specific written notice toContractor/Service Providerof such termination or suspension at least fifteen (15)
days prior to the effective date thereof. Upon receipt of such notice,Contractor/Service Providershall
immediately cease all work under the Agreement and promptly deliver all “Work Product” (defined in Section
7 below) to City. Such Work Product shall be City's sole and exclusive property as provided in Section 7
hereof.Contractor/Service Providershall be entitled to receive just and equitable compensation for this Work
Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily
performed as of the date of the termination/suspension notice plus any additional remaining Required Services
requested or approved by City in advance that would maximize City’s value under the Agreement.
City of Chula Vista AgreementNo.:19022
7
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
6.3Waiver of Claims. In the event City terminates the Agreement in accordance with the terms of this
Section,Contractor/Service Providerhereby expressly waives any and all claims for damages or
compensation as a result of such termination except as expressly provided in this Section 6.
6.4Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising
out of this Agreement against City unless a claim has first been presented in writing and filed with City and
acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal
Code, as same may be amended, the provisions of which, including such policies and procedures used by City
in the implementation of same, are incorporated herein by this reference. Upon request by City,
Contractor/Service Providershall meet and confer in good faith with City for the purpose of resolving any
dispute over the terms of this Agreement.
6.5Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any action arising under or relating to this Agreement shall be brought only
in San Diego County, State of California.
6.6Service of Process.Contractor/Service Provideragrees that it is subject to personal jurisdiction in
California. IfContractor/Service Provideris a foreign corporation, limited liability company, or partnership
that is not registered with the California Secretary of State,Contractor/Service Providerirrevocably consents
to service of process onContractor/Service Providerby first class mail directed to the individual and address
listed under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be
effective five days after mailing.
7.OWNERSHIP AND USE OF WORK PRODUCT
All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other
materials or properties produced in whole or in part under this Agreement in connection with the performance
of the Required Services (collectively “Work Product”) shall be the sole and exclusive property of City. No
such Work Product shall be subject to private use, copyrights or patent rights byContractor/Service Provider
in the United States or in any other country without the express, prior written consent of City. City shall have
unrestricted authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in
part, any such Work Product, without requiring any permissionofContractor/Service Provider, except as may
be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With
respect to computer files containing data generated as Work Product,Contractor/Service Providershall make
available to City, upon reasonable written request by City, the necessary functional computer software and
hardware for purposes of accessing, compiling, transferring and printing computer files.
8.GENERAL PROVISIONS
8.1Amendment. ThisAgreement may be amended, but only in writing signed by both Parties.
8.2Assignment. City would not have entered into this Agreement but forContractor/Service Provider’s
unique qualifications and traits.Contractor/Service Providershall not assign any of its rights or
responsibilities under this Agreement, nor any part hereof, without City’s prior written consent, which City
may grant, condition or deny in its sole discretion.
8.3Authority. The person(s) executing this Agreement forContractor/Service Providerwarrants and
represents that they have the authority to execute same on behalf ofContractor/Service Providerand to bind
City of Chula Vista AgreementNo.:19022
8
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
Contractor/Service Providerto its obligations hereunder without any further action or direction from
Contractor/Service Provideror any board, principle or officer thereof.
8.4Counterparts.This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which shall constitute one Agreement after each Party has signed such a counterpart.
8.5Entire Agreement. This Agreement together with all exhibits attached hereto and other agreements
expressly referred to herein, constitutes the entire Agreement between the Parties with respect to the subject
matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein
by reference. All prior or contemporaneous agreements, understandings, representations, warranties and
statements, oral or written, are superseded.
8.6Record Retention. Duringthe course of the Agreement and for three (3) years following completion
of the Required Services,Contractor/Service Provideragrees to maintain, intact and readily accessible, all
data, documents, reports, records, contracts, and supporting materials relating to the performance of the
Agreement, including accounting for costs and expenses charged to City, including such records in the
possession of sub-contractors/sub-Contractor/Service Providers.
8.7Further Assurances. The Parties agree to performsuch further acts and to execute and deliver such
additional documents and instruments as may be reasonably required in order to carry out the provisions of
this Agreement and the intentions of the Parties.
8.8Independent Contractor.Contractor/ServiceProvideris and shall at all times remain as to City a
wholly independent contractor. Neither City nor any of its officers, employees, agents or volunteers shall
have control over the conduct ofContractor/Service Provideror any ofContractor/Service Provider’s officers,
employees, or agents (“Contractor/Service ProviderRelated Individuals”), except as set forth in this
Agreement. NoContractor/Service ProviderRelated Individuals shall be deemed employees of City, and
none of them shall be entitled to any benefits to which City employees are entitled, including but not limited
to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits.
Furthermore, City will not withhold state or federal income tax, social security tax or any other payroll tax
with respect to anyContractor/Service ProviderRelated Individuals; instead,Contractor/Service Provider
shall be solely responsible for the payment of same and shall hold the City harmless with respect to same.
Contractor/Service Providershall not at any time or in any manner represent that it or any of its
Contractor/Service ProviderRelated Individuals are employees or agents of City.Contractor/Service Provider
shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind
City in any manner.
8.9Notices. All notices, demands or requests provided for or permitted to be given pursuant to this
Agreement must be in writing. All notices, demands and requests to be sent to any Party shall be deemed to
have been properly given or served if personally served or deposited in the United States mail, addressed to
such Party, postageprepaid, registered or certified, with return receipt requested, at the addresses identified
in this Agreement at the places of business for each of the designated Parties as indicated in Exhibit A, or
otherwise provided in writing.
(End of page. Next page is signature page.)
City of Chula Vista AgreementNo.:19022
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Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
SIGNATURE PAGE
CONTRACTOR/SERVICE PROVIDERSERVICES AGREEMENT
IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and
Contractor/Service Provideragree that they have read and understood all terms and conditions of the Agreement,
that they fully agree and consent to bound by same, and that they are freely entering into this Agreement as of the
Effective Date.
CITY OF CHULA VISTA
BY:________________________________BY: ________________________________
HAILEY SCHELLINGARY HALBERT
ACCOUNT EXECUTIVECITY MANAGER
ATTEST
BY: ________________________________
Kerry K. Bigelow, MMC
City Clerk
APPROVED AS TO FORM
BY: ________________________________
Glen R. Googins
City Attorney
City of Chula Vista AgreementNo.:19022
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Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
EXHIBIT A
SCOPE OF WORK AND PAYMENT TERMS
1.Contact People for Contract Administration and Legal Notice
A.City Contract Administration:
Edward Chew
th
276 4Avenue, Chula Vista, CA 91910
(619) 691-5013
echew@chulavistaca.gov
For Legal Notice Copy to:
City of Chula Vista
City Attorney
276 Fourth Avenue, Chula Vista, CA 91910
619-691-5037
CityAttorney@chulavistaca.gov
B.Contractor/Service ProviderContract Administration:
1592 N. Batavia St., Suite 2, Orange, CA 92867
(714) 637-7272
haileys@wav1.com
For Legal Notice Copy to:
Hailey Schellin
1592 N. Batavia St., Suite 2, Orange, CA 92867
(714) 637-7557
haileys@wav1.com
2.Required Services
A.General Description:
Design, purchase and install audio/visual equipment in the City Council Chambers and related conference
rooms.This project includes all work and material outlined in the Request for ProposalP23–17/18 and
optional items of direct view LED screen and wireless microphones.
B.Detailed Description:
Attachment A contains SCOPE detail for this project.
3.Term:In accordance with Section 1.10 of this Agreement, the term of this Agreement shall beginMarch 26,
2019and end onMarch 26, 2020for completion of all Required Services.
4.Compensation:
A.Form of Compensation
City of Chula Vista AgreementNo.:19022
11
Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
Single Fixed Fee. For performance of all of the Required Services byContractor/Service Provideras herein
required, City shall payContractor/Service Provider a maximumamount of$271,810.51,based on invoicing
pursuant to Section 2. of this Agreement.Any additional costs beyond the contracted amount are subject to
approval by the City of Chula Vista prior to incurring the costs.Invoicing for productive hours spent on
performance of Required Services shall be invoiced at the following rates:
Engineering/Documentation: $106/hr
On-site coordination meetings and supervision: $69/hr
In shop fabrication and assembly: $69/hr
On-site fabrication, assembly and installation: $69/hr
On-site verification and testing: $69/hr.
B.Reimbursement of Costs
None, the compensation includes all costs
Notwithstanding the foregoing, the maximum amount to be paid to theContractor/Service Providerfor services
performed throughMarch 26, 2020shall not exceed$271,810.51without authorization from the City ofChula
Vista.
5.Special Provisions:
Permitted Sub-Contractor/Service Providers:Pacific Rim Contractors, Inc. 1315 East Saint Andrews Place,
Unit BSanta Ana, CA, 92705 714-641-7380
Security for Performance:“None”
Notwithstanding the completion date set forth in Section 3 above, City has option to extend this Agreement
forInsert Number of Termsadditional terms, defined as a one-year increment orEnter a Specific Date. if
applicable.The City Manager or Director of Finance/Treasurer shall be authorized to exercise the extensions on
behalf of the City. If the City exercises an option to extend, each extension shall be on the same terms and
conditions contained herein, provided that the amounts specified in Section 4 above may be increased by up to
Insert Percentage of Increase or Actual Dollar Amountfor each extension. The City shall give written notice to
Contractor/Service Providerof the City’s election to exercise the extension via the Notice of Exercise of Option
to Extend document. Such notice shall be provided at least 30 days prior to the expiration of the term.
Other: Describe Special Provisions (Delete Line If Not Applicable)
None
City of Chula Vista AgreementNo.:19022
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Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
EXHIBIT B
INSURANCE REQUIREMENTS
Contractor/Service Providershall adhere to all terms and conditions of Section 3 of the Agreement and agrees to
provide the following types and minimum amounts of insurance, as indicated by checkingthe applicable boxes
(x).
Type of InsuranceMinimum AmountForm
General Liability:$2,000,000 per occurrence forInsurance Services Office Form
Including products andbodily injury, personal injuryCG 00 01
completed operations,(including death), andproperty
personal anddamage. If Commercial General
advertising injuryLiability insurance with a general
aggregate limit is used, either the
general aggregate limit must apply
separately to this Agreement or the
general aggregate limit must be
twice the required occurrence limit
Additional Insured Endorsement*Must be primary and must not
or Blanket AI Endorsement forexclude Products/Completed
City*Operations
Waiver of Recovery Endorsement
Automobile Liability$1,000,000 peraccident for bodilyInsurance Services Office Form
injury, including death, andCA 00 01
property damageCode 1-Any Auto
Code 8-Hired
Code 9-Non Owned
Workers’$1,000,000 each accident
Compensation$1,000,000 disease policy limit
Employer’s Liability$1,000,000 disease each employee
Waiver of Recovery Endorsement
Other Negotiated Insurance Terms:“NONE”
City of Chula Vista AgreementNo.:19022
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Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
EXHIBIT C
CONTRACTOR/SERVICE PROVIDERCONFLICT OF INTEREST DESIGNATION
12
The Political Reform Actand the Chula Vista Conflict of Interest Code(“Code”) require designated state and
local government officials, including someContractor/Service Providers, to make certain public disclosures using
a Statement of Economic Interests form (Form 700).Once filed, a Form 700 is a public document, accessible to
any member of the public. In addition,Contractor/Service Providers designated to file the Form 700 are also
3
required to comply with certain ethics training requirements.
4
A.Contractor/Service ProviderISa corporation or limited liability company and is therefore EXCLUDED
from disclosure.
B.Contractor/Service ProviderisNOTa corporation or limited liability company and disclosure designation
is as follows:
APPLICABLE DESIGNATIONS FORINDIVIDUAL(S) ASSIGNED TO PROVIDE SERVICES
(Category descriptions available atwww.chulavistaca.gov/departments/city-clerk/conflict-of-interest-code.)
NameEmailAddressApplicable Designation
Enter Name of Each Individual
Enter email address(es)
A. Full Disclosure
Who Will Be Providing Service
B. Limited Disclosure(select one or more of
Under the Contract–If
the categories under which theContractorshall
individuals have different
file):
disclosure requirements,
1.2.3.4.5.6.7.
duplicate this row and
Justification:
complete separately for each
individual
C. Excluded from Disclosure
1.Required Filers
Eachindividual who will be performing services for the City pursuant to the Agreement and who meets the definition
of “Contractor/Service Provider,” pursuant to FPPC Regulation 18700.3, must file a Form 700.
2.Required Filing Deadlines
Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City's online
filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required
annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement.
3. Filing Designation
The City Department Director will designate each individual who will be providing services to the City pursuant to the
Agreement asfull disclosure, limited disclosure,orexcluded from disclosure, based on an analysis of the services the
Contractor/Service Providerwill provide. Notwithstanding this designation or anything in the Agreement, the
Contractor/Service Provideris ultimately responsible for complying with FPPC regulations and filing requirements. If
you have any questions regarding filing requirements, please do not hesitate to contact the City Clerk at (619)691-5041,
or the FPPC at 1-866-ASK-FPPC, or (866) 275-3772 *2.
Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the written
determination of theContractor’srequirement to comply with the disclosure requirements set forth in the Code.
Completed by:Edward Chew,Director of ITS
1Cal.Gov. Code §§81000et seq.; FPPC Regs. 18700.3and 18704.
2Chula Vista Municipal Code §§2.02.010-2.02.040.
3Cal. Gov. Code §§53234,et seq.
th
4CA FPPC Adv. A-15-147 (Chadwick) (2015);Davis v. Fresno Unified School District(2015) 237 Cal.App.4261; FPPC Reg.
18700.3 (Consultant defined as an “individual” who participates in making a governmental decision; “individual” does not include
corporation or limited liability company).
City of Chula Vista AgreementNo.:19022
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Consultant Name:Western A/V DBA: Western Audio Visual Rev.10/24/17
March 26, 2019File ID: 19-0050
TITLE
A.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AWARDINGA DESIGN-BUILD
AGREEMENT FOR THE DESIGN AND PRECONSTRUCTION PHASE (PHASE 1) WITH EC CONSTRUCTORS
INC. FOR THE DESIGN OF FIRE STATIONS 5 AND 9 PROJECT (CIP NO. GGV0230)
B.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE FISCAL YEAR
2018/19 CIP PROGRAM BUDGET BY ESTABLISHING A NEW CIP PROJECT, “ORANGE PARK PARKING LOT
IMPROVEMENTS (CIP# PRK0335)”; AND TRANSFERRING $270,000 IN CIPFUNDAPPROPRIATIONS FROM
REC0314TO PRK0335 (4/5 VOTE REQUIRED)
C.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDINGTHE FISCAL YEAR
2018/19 BUDGET AND APPROPRIATING FUNDS FOR APPROVED LAND ACQUISITION COSTS FOR THE
FIRE STATION 9 SITE(4/5 VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolutions.
SUMMARY
OnNovember 8, 2016,Chula Vista voters approved Measure P, authorizing a temporary ½ cent sales tax
increase on retail sales within the City for a period of ten (10) yearsto address failing high priority
infrastructure projectsincludingFire Stations Repairsand Replacement. Fire Stations 5 and 9 are among
the busiest and poorest condition stations inthe City, beyond their useful life, and in need of replacement.
In accordance with the Chula Vista Municipal Code, EC Constructors Inc. was selected to provide design and
construction services for Fire Stations 5 and 9. New Fire Stations 5 and 9 will be located in the City of Chula
Vista at 341 Orange Avenue and 1095 Alpine Avenue, respectively.
Construction of Fire Station 5 at 341 Orange Avenue will require a reduction in the number of available
parking spots for the South Chula Vista Library. To offset the library parking spots that would be lost when
the new fire station is constructed, the existing unimproved parking areaat Orange Park will be paved.
This lot will provide parking needed for both the South Chula Vista Library and Orange Park.
Page|1
ENVIRONMENTAL REVIEW
The proposed Project has been reviewed for compliance with the California Environmental Quality Act
(CEQA) and it has been determined that the Project qualifies for a Categorical Exemption pursuant to the
California Environmental Quality Act State Guidelines Section 15303 Class 3 (New Construction or
Conversion of Small Structures); Section 15332 Class 32 (In-Fill Development Projects); and Section
15061(b)(3) because the proposed project would not result in a significant effect on the environment,
create a cumulative impact, damage a scenic highway, be located on a site pursuant to Section 65962.5, or
cause a substantial adverse change in the significance of a historical resource. Thus, no further
environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
On August 14, 2018,Council adopted resolution 2018-182 accepting theFIRE FACILITY, EQUIPMENT, AND
DEPLOYMENTMASTER PLAN ADDENDUM DOCUMENT. The master plan addendum includednewservice
levels/response standards. Fournew implementation strategiesto achieve the new standards were set
forth in the master plan addendum:
1.Implementation of Squads as a way to improve distribution of resources thereby enabling arrival of
thefirst unit on scene to a fire or medical emergency within seven minutes 90% of the time.
2.Implementation of 4.0 staffing as a way to improve concentration of resources thereby enabling
arrival ofthe Effective Response Force, consisting of 14 firefighters on scene withinten minutes,
90% of the time.
3.Retention and relocation of Fire Station 9 and relocation of Fire Station 5, as a result of analysis for
operational necessity.
4.Policy for the retention of fire apparatus and purchase of equipment.
This project will accomplish strategy number 3by relocating and replacing Fire Stations 5 and9.
According to the master plan addendum, Fire Stations5and 9 are the second and third busiest stations in
the city and are also in the poorest condition. According to Fire Department’s research and analysis,
relocating and replacing Fire Stations5and 9 will improve response times.
The locations of the proposed new stations were extensively researched and computer software
technology called ADAM (Apparatus Deployment AnalysisModule)was utilized to determine the optimum
sites that provided the most reduction in response times.
The scope, size,and features of the proposed Fire Stations5and 9 were analyzed by City staff from the Fire
Department, the Department of Engineering & Capital Projects,and the City Manager’s office. The Fire
Page|2
Department’s present and future functional needs, technical constraints and feasibility, and budget were
considered in developing the project design criteria. Both new stations will be either one (1) or two (2)
stories,as suitable to the project site,with three (3) large apparatus bays, eight (8) dorms, four (4)
individual offices,and other required spaces as specified in the Program Document. The stations will be
between approximately 11,500 square feet and 12,500 square feetin size.
On November 6, 2018, the Department of Engineering & Capital Projectsissued a Request for Proposals
(RFP) to a list of prequalified Design-Build firms pursuant to § 2.57 of the City's Municipal Code for the
design and construction of Fire Stations 5 and 9.
The following companies were sent requests for proposals: EC Constructors Inc., Erickson-Hall
Construction Co., Burge Corporation, C.W. Driver LLC., and Balfour Beatty Construction, LLC. Two qualified
companies responded to the RFP.
A five-memberpanel comprisedof qualifiedCity staff from the Fire Department, Department of
Engineering & Capital Projects,and Development Services and a City-retained consultant evaluated the
proposals. Following the review oftheproposals, interviews were scheduled with the prequalified firms.
On February 26, 2019,the Design/Buildteams were interviewed and their presentationsand proposals
were scored by the Cityevaluation panel. EC Constructors Inc.was selected as the firm whichrepresented
the best valueto the City, based on the scoring criteria set forth in the RFP.
In accordance with § 2.57.030.Cof the City's MunicipalCode provisions on Collaborative Design-
Build/Progressive Design-Build, the project willbe completed in two contract phases: (1) a design and
preconstruction phase and (2) a final design and construction phase. During Phase 1 the design will be
developed and a Guaranteed Maximum Price (GMP) for the project will be established. If an agreement is
reached on the GMP, EC Constructors Inc.and the City will execute the Phase 2 contract to finalize the
design and construct the station. Staff will return to Council for approvalof the Phase 2 Contract.
The best value proposal for the“Fire Stations 5 & 9 Project (CIP NO. GGV0230)” was submitted by EC
Constructors Inc.As part of their proposal,EC Constructors Inc.submitted a fee proposal of $1,291,594for
the Phase1portion of the contract for design and preconstruction services. In accordance with best
practices for selection in Design-Build procurement, the fee proposal was not the primary criteria used in
selection; the fee was evaluated and determined to be reasonable. Staff reviewed the proposaland
determined that the proposalpackage is complete, with no errors or omissions.
Staff recommends accepting the proposals and awarding the contract to EC Constructors Inc.in the amount
of $1,291,594.EC Constructors Inc.is currently an active licensed Class A, General Engineering Contractor
and Class B, General Building Contractor, (License No. 585677), and has performed similar work in the City.
Their license status is current and active per the State of California Department of Consumer Affairs
Contractor State License Board.
Disclosure Statement -Attachment 1 is a copy of the Contractor’s Disclosure Statement.
Page|3
Staff also recommends approval of Resolution C to amend the FY 2018/19 Budget and appropriating funds
forapproved landacquisition costs forthe proposed FireStation No. 9 located at 1095 Alpine Avenue.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Councilmembers and has found no property holdings
within 1000 feet of the boundaries of the property which is the subject of this action. Consequently, this
item does not present a disqualifying real property-related financial conflict of interest under California
Code of Regulations Title 2, section 18702.2(a)(11), for purposes of the Political Reform Act (Cal. Gov’t
Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City Councilmember, of any other fact
that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The replacement of Fire Stations 5 and 9 supports the Healthy Community and Strong and Secure
Neighborhoods goalsas it improves the Fire Department’s ability to Protect Life, Environment & Property
within the City of Chula Vista.
CURRENT-YEAR FISCAL IMPACT
Approval of Resolution A will approve a Design Build agreement with EC Constructors Inc.for design of
Fire Stations 5 and 9for $1,291,594. Measure P funding for the proposed replacement of Fire Station 5 and
Fire Station 9 is budgetedin CIP GGV0230at$19.2million.This includes the estimatedcost of
construction, design, staff time reimbursements, consultant managementand contingencies. Staff will
returnin the fall of 2019 with updated estimated construction costs and a recommended guaranteed
maximum price (GMP) for City Council consideration. Based on initial estimates, there are sufficient
Measure P funds allocated to the project.
Approval of Resolution B will establish new CIP PRK0335 and transfer $270,000 in CIP funds from
REC0314,Citywide Park Improvements within SDG&E Rights of Wayto PRK0335. Sufficient funds are
available for said transfer.
Approval of Resolution C will establish an appropriation of $530,000 to the General Fund in Non-
Departmental for negotiations and settlement expenses related to the acquisition of the Fire Station 9 site,
andappropriating $530,000 in excess revenues in the General Fund that includes $447,000 from Property
Tax in Lieu of Motor Vehicles License Fee (VLF) and $83,000 in prior year Sales Tax revenues. It is
anticipated that the General Fund will be recover these funds through the sale of the existing Fire Station 5
and 9 parcels at a future date.
ONGOING FISCAL IMPACT
Upon the completion of the project, routine maintenanceof the buildings will be required.
ATTACHMENTS
1.Contractor’s Disclosure Statement.
Page|4
Staff Contact: Jonathan Salsman
Page|5
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULAVISTAAWARDINGADESIGN-BUILD
AGREEMENT FOR THE DESIGN AND PRECONSTRUCTION
PHASE (PHASE 1)WITH EC CONSTRUCTORS, INC.FOR
THE DESIGN OF FIRE STATIONS 5 AND9 PROJECT (CIP
NO. GGV0230)
WHEREAS, on August 14, 2018,Council adopted resolution 2018-182 accepting the
Fire Facility, Equipment, and Deployment Master Plan Addendum Documentwith the strategy
of retention and relocation of Fire Stations 5 and9; and
WHEREAS, the locations of the proposed new stations were extensively researched,and
computer software technology called ADAM (Apparatus Deployment Analysis Module) was
utilized to determine the optimum sites that provided the most reduction in response times; and
WHEREAS, the scope, size,and features of the proposed replacement of Fire Stations5
and 9 were analyzed by City staff from the Fire Department, the Department of Engineering &
Capital Projects,and the City Manager’s office; and
WHEREAS, the Director of Development Services has reviewed the proposed project for
compliance with the California Environmental Quality Act (CEQA) and has determined that the
project qualifies for a Categorical Exemption pursuant to State CEQA Guidelines Section 15303
Class 3 (New Construction or Conversion of Small Structures); Section 15332 Class 32 (In-Fill
Development Projects); and Section 15061(b)(3); and
WHEREAS, on November 6, 2018, the Department of Engineering & Capital Projects
issued a Request for Proposals (RFP) for the design and construction of Fire Stations 5 and 9to a
list ofprequalified Design-Build entitiesin accordance withChapter2.57of the Chula Vista
Municipal Code; and
WHEREAS, on February 26, 2019,the responsiveprequalifiedDesign/Build teams were
interviewed and their presentations and proposals were scored by the City evaluation panel, and
EC Constructors, Inc. was selected as the Design Build entitythat represented the best value to
the City based on the scoring criteria set forth in the RFP; and
WHEREAS, in accordance with section2.57.030.C of the Chula VistaMunicipal Code, it
is intended that theproject be completed in two contract phases: (1) a design and preconstruction
phase,and (2) a final design and construction phase; and
WHEREAS, staff has reviewed the proposalfor the “Fire Stations 5 & 9 Project (CIP
NO. GGV0230)”and recommends awarding thephase 1contractin the amount of $1,291,594.00
to EC Constructors, Inc.;and
Resolution No.
Page 2
WHEREAS, EC Constructors, Inc.is currently an active licensed Class A, General
Engineering Contractor and Class B, General Building Contractor, (License No.585677), and
has performed similar work in the City; and
WHEREAS, funding for the proposed replacement of Fire Stations5 and 9 is included in
CIP GGV0230and noadditional appropriation is requiredas sufficient funds are available in the
Project.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it awards an agreementfor the design and preconstruction phase (phase 1)of the “FIRE
STATIONS 5 AND 9 PROJECT (CIP NO. GGV0230)”to EC Constructors, Inc. in the amount
of $1,291,594.00.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it
authorizes and directs the City Manager to execute the agreement, in a form approved by the
City Attorney, and directs a copy of the agreement tobe kepton file in the Office of the City
Clerk.
Presented byApproved as to form by
William S. Valle, PEGlen R. Googins
Directorof Engineering &Capital City Attorney
Projects/City Engineer
RESOLUTION NO. _2019-___
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE FISCAL YEAR 2018/19 CIP
PROGRAM BUDGET BY ESTABLISHING A NEW CIP
PROJECT,“ORANGEPARKPARKINGLOT
IMPROVEMENTS (CIP# PRK0335)”; AND TRANSFERRING
$270,000 IN CIP FUND APPROPRIATIONS FROM REC0314
TO PRK0335
WHEREAS, staff recommends creatinga new capital improvement project,“Orange
Park Parking Lot Improvements (CIP# PRK0335),” for the purpose of improving an existing
unimproved parking lotat Orange Park; and
WHEREAS, staff is recommending a transfer of funds from CIP# REC0314in CIP
Funds to the new “Orange Park Parking Lot Improvements project (CIP# REC0314)”in the
amount of $270,000; and
WHEREAS, REC0314 has a sufficient balance to fund the inter-project transfer.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
that it amends the FY2018/19 CIP Program Budget by establishinga new CIP project, “Orange
Park Parking Lot Improvements (CIP# PRK0335)”.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it
authorizes a transfer of $270,000 in CIP Fund appropriationsfrom REC0314 to PRK0335.
Presented byApproved as to form by
William S. ValleGlen R. Googins
Director of Engineering & CapitalCity Attorney
Projects/City Engineer
RESOLUTION NO. 2019-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDINGTHE FISCAL YEAR 2018/19
BUDGET AND APPROPRIATING FUNDS FOR APPROVED
LAND ACQUISITION COSTS FOR THE FIRE STATION 9
SITE
WHEREAS,the City Charter states that at any meeting after the adoption of the budget,
the City Council may amend or supplement the budget by a motion adopted by the affirmative
votes of at least four members; and
WHEREAS,staff has completed the budget review forthe quarter ending
December 31, 2018 and is recommending abudget amendmentto fund the land acquisition costs
for the Fire Station 9 site; and
WHEREAS, staff is recommending appropriating$135,000to the General Fundin Non-
Departmental to the Contract Services account, and appropriating $395,000 to theGeneral Fund
in Non-Departmentalto the Land Acquisition account for the negotiation and settlement
expenses for acquisition of the Fire Station 9 site;
WHEREAS, staff isrecommending appropriating $447,000 in excess revenuesto the
General Fundfrom Property Tax in Lieu of Motor Vehicles License Fee (VLF), and
appropriating $83,000 to theGeneral Fundin prior year Sales Tax revenues;
WHEREAS,staff anticipates thatthe General Fund will be recover these funds through
the sale of the existing Fire Station 5 and 9 parcels at a future date.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it ishereby amendingthe fiscal year 2018/19budget to fundapproved land
acquisition costs for the Fire Station 9site.
Budget Amendment Summary - Fiscal Year 2018-19
SUPPLIES &OTHERTOTALTOTAL
DEPARTMENT
SERVICESCAPITALEXPENSEREVENUENET COST
GENERAL FUND
Non-Departmental 135,000 395,000$ 530,000$ (530,000)$ -
TOTAL OTHER FUNDS$ 135,000$ 395,000$ 530,000$ (530,000)$ -
Presented byApproved as to form by
Resolution No.
Page 2
David BilbyGlen R. Googins
Director of Finance/TreasurerCity Attorney
March 26, 2019File ID: 19-0066
TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING GRANT FUNDS FROM
THE CALIFORNIA DEPARTMENT OF PARKS AND RECREATION HABITAT CONSERVATION FUND
PROGRAM IN THE AMOUNT OF $100,000;APPROVING AN AGREEMENT WITH LIVING COAST DISCOVERY
CENTER TO PROVIDE ACOMMUNITY PROGRAM TO ENCOURAGE URBAN FAMILIES TO HIKE, EXPLORE,
AND PROTECT LOCAL HABITATS AND WILDLIFE;AND APPROPRIATING THE FUNDSACCORDINGLY(4/5
VOTE REQUIRED)
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
The Living Coast Discovery Center and City of Chula Vista Parks and Recreation have been working in
partnership for nineyears providing education and habitat conservation opportunities for the local
community. Adoption of this resolution will accept grant funding from the Habitat Conservation Fund
Program through the State of California Department of Parks and Recreation Office of Grants and Local
Services and approve a contractual agreement with the Living Coast Discovery Center to provide a
community program to encourage urban families to hike, explore, and protect local habitats and wildlife.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in
the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is
not subject to CEQA. In addition, notwithstanding the foregoing, the Director of Development Services has
also determined that the “Project” qualifies for an Exemption pursuant to Section 15061(b)(3) of the
California Environmental Quality Act State Guidelines. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The Living Coast Discovery Center, previously named the Chula Vista Nature Center, was opened in 1987 as
a City facility and, for many years, was under the oversight of the Recreation Department. In 2010, the
v.001 Page|1
Living Coast Discovery Center became an independent non-profit 501(c)3 organization yet continues to
work in coordination with the City of Chula Vista.
The State of California Department of Parks and Recreation Office of Grants and Local Services released a
notice of funding availability for the Habitat Conservation Fund Program. This program provides funding
for projects that protect rapidly disappearing wildlife habitats that support California’s unique and varied
wildlife resources. On October 10, 2017, the Recreation Department was approved by City Council to apply
for a grant for the Habitat Conservation Fund Program. The City was selected as a grant recipient for the
program in the amount of $100,000 and a contract was executed on October 9, 2018.
Utilizing the grant funding, in partnership with the City of Chula Vista, the Living Coast Discovery Center
will create a community program to encourage urban families to hike, explore, and protect local habitats
and wildlife. HELP (Hike, Explore, Learn, Protect) Chula Vista will conduct 120 interpretive hike programs
and 48 community clean-up projects and serve up to 4,200 people (approximately 500 different families)
from underserved communities over four years.
The guided interpretive hikes will take place at Sweetwater Marsh, where the Living CoastDiscovery
Center is located, and in several locations throughout Chula Vista including Otay Valley Regional Park, Rice
Canyon, Mother Miguel, and Morrison Pond. The Living Coast Discovery Center will conduct 48 programs
onsite at Sweetwater Marsh and 72 programs offsite at other locations in Chula Vista. This program will
serve up to 3,000 people.
The community clean-up projects will take place at several locations in Chula Vista including D Street Fill, J
Street Marina, and Sweetwater River. The Living Coast Discovery Center will conduct 48 community clean-
up projects, engaging up to 1,200 people and removing approximately 24,000 pounds of debris from local
parks and waterways.
To encourage community participation, the Living Coast will create a “challenge” for families to attend
three hikes and one clean-up project. The Living Coast Discovery Center will monitor attendance as part of
its program evaluation and award certificates of completion after a family has finished the challenge.
Families who complete the challenge will receive a family four-pack to visit the Living Coast Discovery
Center.
HELP Chula Vista builds on existing programs and partnerships currently conducted by the Living Coast
Discovery Center and the City of Chula Vista, including a five-year grant awarded to the Living Coast by the
Port of San Diego and ongoing collaborative programs with the U.S. Fish and Wildlife Service.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific
and consequently, the real property holdings of theCity Councilmembers do not create a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et
seq.).
Page|2
Staff isnot independently aware, and has not been informed by anyCity Councilmember, of any other fact
that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Adoption of this resolution will result in the appropriation of $100,000 to the State Grants Fund for the
HELP Program. Match funding is provided by a grant to the Living Coast Discovery Center from the Unified
Port of San Diego. There is no net fiscal impact to the General Fund.
ONGOING FISCAL IMPACT
Grant funds will be expended over the course of four years and once funds are exhausted, the program is
complete. There will be no net fiscal impact to the General Fund.
ATTACHMENTS
1.Service Agreement with the Living Coast Discovery Center
Staff Contact: Tim Farmer, Parks and Recreation Administrator
Page|3
COUNCIL RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING GRANT FUNDS FROM THE
CALIFORNIADEPARTMENTOFPARKSAND
RECREATIONHABITATCONSERVATIONFUND
PROGRAMINTHE AMOUNT OF $100,000;APPROVING AN
AGREEMENT WITH LIVING COAST DISCOVERY CENTER
TO PROVIDE ACOMMUNITY PROGRAM TO ENCOURAGE
URBAN FAMILIES TO HIKE, EXPLORE, AND PROTECT
LOCAL HABITATS AND WILDLIFE;AND APPROPRIATING
THE FUNDS ACCORDINGLY
WHEREAS, the City of Chula Vista was awardeda Habitat Conservation Fund Program
Grant, Wildlife Area Activities, from the State of California Department of Parks and Recreation
Office of Grants and Local Servicesin the amount of $100,000; and
WHEREAS, the funding will be used to create a community program to encourage urban
families to hike, explore, and protect local habitats and wildlife; and
WHEREAS, the City would like to enter into an agreement with the Living Coast
Discovery Center to create a community program to encourage urban families to hike, explore,
and protect local habitats and wildlife andwaive the consultant selection process in Chapter 2.56
of the Chula Vista Municipal Code, based on the Living Coast Discovery Center’sunique
qualifications to provide educationalopportunities and wildlife conservation expertise, including
being identified as the City’s partner in the application; and
WHEREAS, the program, HELP (Hike, Explore, Learn, Protect) Chula Vista will
conduct 120 interpretive hike programs and 48 community clean-up projects and serve upto
4,200 people (approximately 500 different families) from underserved communities over four
years; and
WHEREAS, accordingly, grant fundswill be appropriated to theState Grant Fund
budget.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it hereby accepts$100,000in grant funds;appropriates said funds to the State Grant
Fund budget;and approves the agreement with the Living Coast Discovery Center, in the form
presentedwith such minor modifications as the City Attorney may require or approve, and
directs and authorizes the City Manager to execute the agreement.
Resolution No._________
Page 2
Presented byApproved as to form by
Tracy LambGlen R. Googins
Director of Community ServicesCity Attorney
CITY OF CHULA VISTA
CONTRACTOR/SERVICE PROVIDERSERVICES AGREEMENT
WITHLIVING COAST DISCOVERY CENTER
TO PROVIDE ACOMMUNITY PROGRAM TO ENCOURAGE URBAN FAMILIES TO HIKE,
EXPLORE, AND PROTECT LOCAL HABITATS AND WILDLIFE
This Agreement is entered intoeffective as of March 26, 2019(“Effective Date”)by and between the City of
Chula Vista, a chartered municipal corporation (“City”) and LIVING COAST DISCOVERY CENTER, a
501(c)3 non-profit organization(“Contractor/Service Provider”) (collectively, the“Parties” and, individually, a
“Party”) with reference to the following facts:
R ECITALS
WHEREAS,in accordance to the provisionsset forth in theHabitat Conservation Fund Progam Grant,
Wildlife Area Activities, from the State of California Department of Parks and Recreation Office of Grants and
Local Services grant application,the City requires services in order to establish and deliver a community program
to encourage urban families tohike, explore, and protect local habitats and wildlife;and
WHEREAS,in order to procure these services, Living Coast Discovery Center was chosen based on their
unique qualificationsto advocate for the conservation of local natural resources,toprovide education opportunites
and wildlife conservation expertise,as well asbeing identified as the City’s partner in the applicationfor the
grant; on this basis, Contractor was awarded the contract on a “sole source” basis under the authority of the Chula
Vista Municipal Code Sections2.56.090.B.3and 2.56.070.B.4.; and
WHEREAS,Contractor/Service Providerwarrants and represents that it is experienced and staffed in a
manner such that it can deliver the services required of Contractor/Service Providerto City in accordance with
the time frames and the terms and conditions of this Agreement.
\[End of Recitals. Next Page Starts Obligatory Provisions.\]
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O BLIGATORY P ROVISIONS
NOW, THEREFORE, in consideration of the above recitals, the covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, City and
Contractor/Service Providerhereby agree as follows:
1.SERVICES
1.1 Required Services.Contractor/Service Provideragrees to perform the services, and deliver to City the
“Deliverables” (if any) described in the attached ExhibitA, incorporated into the Agreement by this reference,
within the time frames set forth therein, time being of the essence for this Agreement. The services and/or
Deliverables described in Exhibit A shall be referred to herein as the “Required Services.”
1.2Reductions in Scope of Work. City mayindependently, or upon request from Contractor/Service
Provider, from time to time, reduce the Required Services to be performed by the Contractor/Service Provider
under this Agreement. Upon doing so, City and Contractor/Service Provideragree to meet andconfer in good
faith for the purpose of negotiating a corresponding reduction in the compensation associated with the
reduction.
1.3Additional Services. Subject to compliance with the City’s Charter, codes, policies, procedures and
ordinances governing procurement and purchasing authority, City may request Contractor/Service Provider
provide additional services related to the Required Services (“Additional Services”). If so, City and
Contractor/Service Provideragree to meet and confer in good faithfor the purpose of negotiating an
amendment to Exhibit A, to add the Additional Services. Unless otherwise agreed, compensation for the
Additional Services shall be charged and paid consistent with the rates and terms already provided therein.
Once added to Exhibit A, “Additional Services” shall also become “Required Services” for purposes of this
Agreement.
1.4Standard of Care. Contractor/Service Providerexpressly warrants and agrees that any and all Required
Services hereunder shall be performed in accordance with the highest standard of care exercised by members
of the profession currently practicing under similar conditions and in similar locations.
1.5No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual
approval only and does not relieve the Contractor/Service Providerof responsibility for complying with all
laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions,
noncompliance with industry standards, or the willful misconduct of the Contractor/Service Provideror its
subcontractors.
1.6Security for Performance. In the event that Exhibit A Section 4 indicates the need for
Contractor/Service Providerto provide additional security for performance of its duties under this Agreement,
Contractor/Service Providershall provide such additional security prior to commencement of its Required
Services in the form and on the terms prescribed on Exhibit A, or as otherwise prescribed by the City Attorney.
1.7Compliance with Laws.In its performance of the Required Services,Contractor/Service Provider
shall comply with any and all applicable federal, state and local laws, including the Chula Vista Municipal
Code.
1.8Business License. Prior to commencement of work, Contractor/Service Providershall obtain a
businesslicense from City.
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Consultant Name: LIVING COAST DISCOVERY CENTER Rev.10/24/17
1.9Subcontractors. Prior to commencement of any work, Contractor/Service Providershall submit for
City’s information and approval a list of any and all subcontractors to be used by Contractor/Service Provider
in the performance ofthe Required Services. Contractor/Service Provideragrees to take appropriate measures
necessary to ensure that all subcontractors and personnel utilized by the Contractor/Service Providerto
complete its obligations under this Agreement comply with all applicable laws, regulations, ordinances, and
policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill any
responsibilities of the Contractor/Service Providerunder this Agreement, Contractor/Service Providershall
ensure that each and every subcontractor carries out the Contractor/Service Provider’s responsibilities as set
forth in this Agreement.
1.10Term. This Agreement shall commence on the earlier to occur of the Effective Date or
Contractor/ServiceProvider’s commencement of the Required Services hereunder, and shall terminate when
the Parties have complied with all their obligations hereunder; provided, however, provisions which expressly
survive termination shall remain in effect.
2.COMPENSATION
2.1General. For satisfactory performance of the Required Services, City agrees to compensate
Contractor/Service Providerin the amount(s) and on the terms set forth in Exhibit A, Section 4. Standard
terms for billing and payment are set forth in this Section 2.
2.2Detailed Invoicing.Contractor/Service Provideragrees to provide City with a detailed invoice for
services performed each month, within thirty (30) days of the end of the month in which the services were
performed, unless otherwise specified in Exhibit A. Invoicing shall begin on the first of the month following
the Effective Date of the Agreement. All charges must be presented in a line item format with each task
separately explained in reasonable detail. Each invoice shall include the current monthly amount being billed,
the amount invoiced to date, and the remaining amount available under any approved budget.
Contractor/Service Providermust obtain prior written authorization from City for any fees or expenses that
exceed the estimated budget.
2.3Payment to Contractor/Service Provider. Upon receipt of a properly prepared invoice and
confirmation thatthe Required Services detailed in the invoice have been satisfactorily performed, City shall
payContractor/Service Providerfor the invoice amount within thirty (30) days. Payment shall be made in
accordance with the terms and conditions set forth in ExhibitA and section 2.4, below. At City’s discretion,
invoices not timely submitted may be subject to a penalty of up to five percent (5%) of the amount invoiced.
2.4Retention Policy.City shall retain ten percent (10%) of the amount due for Required Services detailed
on each invoice (the “holdback amount”). Upon City review and determination of Project Completion, the
holdback amount will be issued to Contractor/Service Provider.
2.5Reimbursement of Costs. City may reimburse Contractor/Service Provider’s out-of-pocket costs
incurred by Contractor/Service Providerin the performance of the Required Services if negotiated in advance
and included in Exhibit A. Unless specifically provided in Exhibit A, Contractor/Service Providershall be
responsible for any and all out-of-pocket costs incurred by Contractor/Service Providerin the performance of
the Required Services.
2.6Exclusions.City shall not be responsible for payment to Contractor/Service Providerfor any fees or
costs in excess of any agreed upon budget, rate or other maximum amount(s) provided for in Exhibit A. City
City of Chula Vista Agreement No.:Obtain From City Clerk x5961
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Consultant Name: LIVING COAST DISCOVERY CENTER Rev.10/24/17
shall also not be responsible for any cost: (a) incurred prior to the Effective Date; or (b) arising out of or
related to the errors, omissions, negligence or acts of willful misconduct of Contractor/Service Provider, its
agents, employees, or subcontractors.
2.7Payment Not Final Approval. Contractor/Service Providerunderstands and agrees that payment to
theContractor/Service Provideror reimbursement for any Contractor/Service Providercosts related to the
performance of Required Services does not constitute a City final decision regarding whether such payment
or cost reimbursement is allowable and eligible for payment under this Agreement, nor does it constitute a
waiver of any violation by Contractor/Service Providerof the terms of this Agreement. If City determines
thatContractor/Service Provideris not entitled to receive any amount of compensation already paid, City will
notifyContractor/Service Providerin writing and Contractor/Service Providershall promptly return such
amount.
3.INSURANCE
3.1Required Insurance. Contractor/Service Providermust procure and maintain, during the period of
performance of Required Services under this Agreement, and for twelve months after completion of Required
Services, the policies of insurance described on the attached Exhibit B, incorporated into the Agreement by
this reference (the “Required Insurance”). The Required Insurance shall also comply with all other terms of
this Section.
3.2Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions relating to the
Required Insurancemust be disclosed to and approved by City in advance of the commencement of work.
3.3Standards for Insurers. Required Insurance must be placed with licensed insurers admitted to transact
business in the State of California with a current A.M. Best’srating of A V or better, or, if insurance is placed
with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines
Insurers (LESLI) with a current A.M. Best’s rating of no less than A X. For Workers’ Compensation
Insurance, insurance issued by the State Compensation Fund is also acceptable.
3.4Subcontractors. Contractor/Service Providermust include all sub-Contractor/Service Providers/sub-
contractors as insureds under its policies and/or furnish separate certificates and endorsements demonstrating
separate coverage for those not under its policies. Any separate coverage for sub-Contractor/Service Providers
must also comply with the terms of this Agreement.
3.5Additional Insureds. City, its officers, officials, employees, agents, and volunteers must be named as
additional insureds with respect to any policy of general liability, automobile, or pollution insurance specified
as required in Exhibit B or as may otherwise be specifiedby City’s Risk Manager.. The general liability
additional insured coverage must be provided in the form of an endorsement to the Contractor/Service
Provider’s insurance using ISO CG 2010 (11/85) or its equivalent; such endorsement must not exclude
Products/Completed Operations coverage.
3.6General Liability Coverage to be “Primary.”Contractor/Service Provider’s general liability coverage
must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers.
Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is
wholly separate from the insurance provided by Contractor/Service Providerand in no way relieves
Contractor/Service Providerfrom its responsibility to provide insurance.
City of Chula Vista Agreement No.:Obtain From City Clerk x5961
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Consultant Name: LIVING COAST DISCOVERY CENTER Rev.10/24/17
3.7No Cancellation.No Required Insurance policy may be canceled by either Party during the required
insured period under this Agreement, except after thirty days’ prior written notice to the City by certified mail,
return receipt requested. Prior to the effective date of any such cancellation Contractor/Service Providermust
procure andput into effect equivalent coverage(s).
3.8Waiver of Subrogation. Contractor/Service Provider’s insurer(s) will provide a Waiver of Subrogation
in favor of the City for each Required Insurance policy under this Agreement. In addition, Contractor/Service
Providerwaives any right it may have or may obtain to subrogation for a claim against City.
3.9Verification of Coverage. Prior to commencement of any work, Contractor/Service Providershall
furnish City with original certificates of insuranceand any amendatory endorsements necessary to
demonstrate to City that Contractor/Service Providerhas obtained the Required Insurance in compliance with
the terms of this Agreement. The words “will endeavor” and “but failure to mail such notice shall impose no
obligation or liability of any kind upon the company, its agents, or representatives” or any similar language
must be deleted from all certificates. The required certificates and endorsements should otherwise be on
industry standard forms. The City reserves the right to require, at any time, complete, certified copies of all
required insurance policies, including endorsements evidencing the coverage required by these specifications.
3.10Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos Pollution Liability
and/or Errors & Omissions coverage are required and are provided on a claims-made form, the following
requirements also apply:
a.The “Retro Date” must be shown, and must be before the date of this Agreement or the beginning
of the work required by this Agreement.
b.Insurance must be maintained, and evidence of insurance must be provided, for at least five (5)
years after completion of the work required by this Agreement.
c.If coverage is canceled or non-renewed, and not replaced with another claims-made policy form
with a “Retro Date” prior to the effective date of this Agreement, the Contractor/Service Providermust
purchase “extended reporting” coverage for a minimum of five (5) years after completion of the work required
by this Agreement.
d.A copy of the claims reporting requirements must be submitted to the City for review.
3.11Not a Limitation of Other Obligations. Insurance provisions under this section shall notbe construed
to limit the Contractor/Service Provider’s obligations under this Agreement, including Indemnity.
3.12Additional Coverage. To the extent that insurance coverage provided by Contractor/Service Provider
maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to
coverage for higher limits maintained.
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4.INDEMNIFICATION
4.1.General. To the maximum extent allowed by law, Contractor/Service Providershall protect, defend,
indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers
(collectively, “Indemnified Parties”), from and against any and all claims, demands, causes of action, costs,
expenses, (including reasonable attorneys’ fees and court costs), liability, loss, damage or injury, in law or
equity, to property or persons, including wrongful death, in any manner arising out of or incident to any
alleged acts, omissions, negligence, or willful misconductofContractor/Service Provider, its officials,
officers, employees, agents, and contractors, arising out of or in connection with the performance of the
Required Services, the results of such performance, or this Agreement. This indemnity provision does not
include any claims, damages, liability, costs and expenses arising from the sole negligence or willful
misconduct of the Indemnified Parties. Also covered is liability arising from, connected with, caused by or
claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which
may be in combination with the active or passive negligent acts or omissions of the Contractor/Service
Provider, its employees, agents or officers, or any third party.
4.2.ModifiedIndemnity Where Agreement Involves Design Professional Services. Notwithstanding the
forgoing, if the services provided under this Agreement are design professional services, as defined by
California Civil Code section 2782.8, as may be amended from time to time, the defense and indemnity
obligation under Section 1, above, shall be limited to the extent required by California Civil Code section
2782.8.
4.3Costs of Defense and Award. Included in Contractor/Service Provider’s obligations under this Section
4 is Contractor/Service Provider’s obligation to defend, at Contractor/Service Provider’s own cost, expense
and risk, any and all suits, actions or other legal proceedings that may be brought or instituted against one or
more of the Indemnified Parties. Subject to the limitations in this Section 4, Contractor/Service Providershall
pay and satisfy any judgment, award or decree that may be rendered against one or more of the Indemnified
Parties for any and all related legal expenses and costs incurred by any of them.
4.4.Contractor/Service Provider’s Obligations Not Limited or Modified.Contractor/Service Provider’s
obligations under this Section 4 shall not be limited to insurance proceeds, if any, received by the Indemnified
Parties, or by any prior or subsequent declaration by the Contractor/Service Provider. Furthermore,
Contractor/Service Provider’s obligations under this Section 4 shall in no way limit, modify or excuse any of
Contractor/Service Provider’s other obligations or duties under this Agreement.
4.5.Enforcement Costs.Contractor/Service Provideragrees to pay any and all costs City incurs in
enforcingContractor/Service Provider’s obligations under this Section 4.
4.6Survival.Contractor/Service Provider’s obligations under thisSection 4 shall survive thetermination
of this Agreement.
5.FINANCIAL INTERESTS OF CONTRACTOR/SERVICE PROVIDER.
5.1Form 700 Filing.The California Political Reform Act and the Chula Vista Conflict of Interest Code
require certain government officials and Contractor/Service Providers performing work for government
agencies to publicly disclose certain of their personal assets and income using a Statement of Economic
Interests form (Form 700). In order to assure compliance with these requirements, Contractor/Service
Providershall comply with the disclosure requirements identified in the attached Exhibit C, incorporated into
the Agreement by this reference.
City of Chula Vista Agreement No.:Obtain From City Clerk x5961
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Consultant Name: LIVING COAST DISCOVERY CENTER Rev.10/24/17
5.2Disclosures; Prohibited Interests.Independent of whether Contractor/Service Provideris required to
file a Form 700, Contractor/Service Providerwarrants and represents that it has disclosed to City any
economic interests held byContractor/Service Provider, or its employees or subcontractors who will be
performing the Required Services, in any real property or project which is the subject of this Agreement.
Contractor/Service Providerwarrants and represents that it has not employed or retained any company or
person, other than a bona fide employee or approved subcontractor working solely for Contractor/Service
Provider, to solicit or secure this Agreement. Further, Contractor/Service Providerwarrants and represents
that it has not paid or agreed to pay any company or person, other than a bona fide employee or approved
subcontractor working solely for Contractor/Service Provider, any fee, commission, percentage, brokerage
fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement.
Contractor/Service Providerfurther warrants and represents that no officer or employee of City, has any
interest, whether contractual, non-contractual, financial or otherwise, in this transaction, the proceeds hereof,
or in the business of Contractor/Service ProviderorContractor/Service Provider’s subcontractors.
Contractor/Service Providerfurther agrees to notify City in the event any such interest is discovered whether
or not such interest is prohibited by law or this Agreement. For breach or violation of any of these warranties,
City shall have the right to rescind this Agreement without liability.
6.REMEDIES
6.1Termination for Cause. If for any reason whatsoever Contractor/Service Providershallfail to perform
the Required Services under this Agreement, in a proper or timely manner, or if Contractor/Service Provider
shall violate any of the other covenants, agreements or conditions of this Agreement (each a “Default”), in
addition to any and allother rights and remedies City may have under this Agreement, at law or in equity,
City shall have the right to terminate this Agreement by giving five (5) days written notice to
Contractor/Service Provider. Such notice shall identify the Default and theAgreement termination date. If
Contractor/Service Providernotifies City of its intent to cure such Default prior to City’s specified termination
date, and City agrees that the specified Default is capable of being cured, City may grant Contractor/Service
Providerup to ten (10) additional days after the designated termination date to effectuate such cure. In the
event of a termination under this Section 6.1, Contractor/Service Providershall immediately provide City any
and all ”Work Product” (defined in Section 7 below) prepared by Contractor/Service Provideras part of the
Required Services. Such Work Product shall be City’s sole and exclusive property as provided in Section 7
hereof.Contractor/Service Providermay be entitled to compensation for work satisfactorily performed prior
toContractor/Service Provider’s receipt of the Default notice; provided, however, in no event shall such
compensation exceed the amount that would have been payable under this Agreement for such work, and any
such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of
the Default.
6.2Termination or Suspension for Convenience of City. City may suspend or terminate this Agreement,
or any portion of the Required Services, at any time and for any reason, with or without cause, by giving
specific written notice to Contractor/Service Providerof such termination or suspension at least fifteen (15)
days prior to the effective date thereof. Upon receipt of such notice, Contractor/Service Providershall
immediately cease all work under the Agreement and promptly deliver all “Work Product” (defined in Section
7 below) to City. Such Work Product shall be City's sole and exclusive property as provided in Section 7
hereof. Contractor/Service Providershall be entitled to receive just and equitable compensation for this Work
Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily
performed as of the date of the termination/suspension notice plus any additional remaining Required Services
requested or approved by City in advance that would maximize City’s value under the Agreement.
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6.3Waiver of Claims. In the event City terminates the Agreement in accordance with the terms of this
Section,Contractor/Service Providerhereby expressly waives any and all claims for damages or
compensation as a result of such termination except as expressly provided in this Section 6.
6.4Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising
out of this Agreement against City unless a claim has first been presented in writing and filed with City and
acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal
Code, as same may be amended, the provisions of which, including such policies and procedures used by City
in the implementation of same, are incorporated herein by this reference. Upon request by City,
Contractor/Service Providershall meet and confer in good faith with City for the purpose of resolving any
dispute over the terms of this Agreement.
6.5Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any action arising under or relating to this Agreement shall be brought only
in San Diego County, State of California.
6.6Service of Process.Contractor/Service Provideragrees that it is subject to personal jurisdiction in
California. If Contractor/Service Provideris a foreign corporation, limited liability company, or partnership
that is not registered with the California Secretary of State, Contractor/Service Providerirrevocably consents
to service of process on Contractor/Service Providerby first class mail directed to the individual and address
listed under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be
effective five days after mailing.
7.OWNERSHIP AND USE OF WORK PRODUCT
All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other
materials or properties produced in whole or in part under this Agreement in connection with the performance
of the Required Services (collectively “Work Product”) shall be the sole and exclusive property of City. No
such Work Product shall be subject to private use, copyrights or patent rights by Contractor/Service Provider
in the United States or in any other country without the express, prior written consent of City. City shall have
unrestricted authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in
part, any such Work Product, without requiring any permission ofContractor/Service Provider, except as may
be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With
respect to computer files containing data generated as Work Product, Contractor/Service Providershall make
available to City, upon reasonable written request by City, the necessary functional computer software and
hardware for purposes of accessing, compiling, transferring and printing computer files.
8.GENERAL PROVISIONS
8.1Amendment. This Agreement may be amended, but only in writing signed by both Parties.
8.2Assignment. City would not have entered into this Agreement but for Contractor/Service Provider’s
unique qualifications and traits. Contractor/Service Providershall not assign any of its rights or
responsibilities under this Agreement, nor any part hereof, without City’s prior written consent, which City
may grant, condition or deny in its sole discretion.
8.3Authority. The person(s) executing this Agreement for Contractor/Service Providerwarrants and
represents that they have the authority to execute same on behalf of Contractor/Service Providerand to bind
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Contractor/Service Providerto its obligations hereunder without any further action or direction from
Contractor/Service Provideror any board, principle or officer thereof.
8.4Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which shall constitute one Agreement after each Party has signed such a counterpart.
8.5Entire Agreement. This Agreement together with all exhibits attached hereto and other agreements
expressly referred to herein, constitutes the entire Agreement between the Parties with respect to the subject
matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein
by reference. All prior or contemporaneous agreements, understandings, representations, warranties and
statements, oral or written, are superseded.
8.6Record Retention. During the course of the Agreement and for three (3) years following completion
of the Required Services, Contractor/Service Provideragrees to maintain, intact and readily accessible, all
data, documents, reports, records, contracts, and supporting materials relating to the performance of the
Agreement, including accounting for costs and expenses charged to City, including such records in the
possession of sub-contractors/sub-Contractor/Service Providers.
8.7Further Assurances. The Parties agree to perform such further acts and to execute and deliver such
additional documents and instruments as may be reasonably required in order to carry out the provisions of
this Agreement and the intentions of the Parties.
8.8Independent Contractor. Contractor/ServiceProvideris and shall at all times remain as to City a
wholly independent contractor. Neither City nor any of its officers, employees, agents or volunteers shall
have control over the conduct of Contractor/Service Provideror any of Contractor/Service Provider’s officers,
employees, or agents (“Contractor/Service ProviderRelated Individuals”), except as set forth in this
Agreement. No Contractor/Service ProviderRelated Individuals shall be deemed employees of City, and
none of them shall be entitled to any benefits to which City employees are entitled, including but not limited
to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits.
Furthermore, City will not withhold state or federal income tax, social security tax or any other payroll tax
with respect to any Contractor/Service ProviderRelated Individuals; instead, Contractor/Service Provider
shall be solely responsible for the payment of same and shall hold the City harmless with respect to same.
Contractor/Service Providershall not at any time or in any manner represent that it or any of its
Contractor/Service ProviderRelated Individuals are employees or agents of City. Contractor/Service Provider
shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind
City in any manner.
8.9Notices. All notices, demands or requests provided for or permitted to be given pursuant to this
Agreement must be in writing. All notices, demands and requests to be sent to any Party shall be deemed to
have been properly given or served if personally served or deposited in the United States mail, addressed to
such Party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified
in this Agreement at the places of business for each of the designated Parties as indicated in Exhibit A, or
otherwise provided in writing.
(End of page. Next page is signature page.)
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Consultant Name: LIVING COAST DISCOVERY CENTER Rev.10/24/17
SIGNATURE PAGE
CONTRACTOR/SERVICE PROVIDERSERVICES AGREEMENT
IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and
Contractor/Service Provideragree that they have read and understood all terms and conditions of the Agreement,
that they fully agree and consent to bound by same, and that they are freely entering into this Agreement as of the
Effective Date.
LIVING COAST DISCOVERY CENTER
CITYOF CHULA VISTA
BY:________________________________BY: ________________________________
BENEDICT VALLEJOSMARY CASILLAS SALAS
EXECUTIVE DIRECTORMAYOR
BY: ________________________________
Kerry K. Bigelow, MMC
City Clerk
APPROVED AS TO FORM
BY: ________________________________
Glen R. Googins
City Attorney
City of Chula Vista Agreement No.:Obtain From City Clerk x5961
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Consultant Name: LIVING COAST DISCOVERY CENTER Rev.10/24/17
EXHIBIT A
SCOPE OF WORK AND PAYMENT TERMS
1.Contact People for Contract Administration and Legal Notice
A.City ContractAdministration:
Tim Farmer
276 Fourth Avenue, Chula Vista, CA 91910
619-409-5966
tfarmer@chulavistaca.gov
For Legal Notice Copy to:
City of Chula Vista
City Attorney
276 Fourth Avenue, Chula Vista, CA 91910
619-691-5037
CityAttorney@chulavistaca.gov
B.Contractor/Service ProviderContract Administration:
LIVING COAST DISCOVERY CENTER
1000 Gunpowder Point Drive, Chula Vista, CA 91910
619-409-5900
jessica@thelivingcoast.org
For Legal Notice Copy to:
Benedict Vallejos
1000 Gunpowder Point Drive, Chula Vista CA 91910
619-409-5911
ben@thelivingcoast.org
2.Required Services
A.General Description:
In partnership with the City of Chula Vista, the Living Coast Discovery Center will create a community
program to encourage urban families to hike, explore, and protect local habitats and wildlife. HELP (Hike,
Explore, Learn, Protect) Chula Vista will conduct 120 interpretive hike programs and 48 community clean-up
projects and serve up to 4,200 people (approximately 500 different families) from underserved communities
over four years.
B.Detailed Description:
Consultant shall complete the following Deliverables by the indicated Completion Dates:
TaskDescriptionDeliverablesCompletion Date
1Provideconservation-focusedParticipant pre-and post-6/30/2023
educationforup to 4,200 programprogram evaluation survey
participantsresults
2120Guided interpretive hikes inNumber of programs and 6/30/2023
locations includingOtay Valley participants
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Regional Park (OVRP), Rice
Canyon,Mother Miguel, Morrison
Pond, and Sweetwater Marsh
348Community clean-up projectsinNumber of programs, 6/30/2023
locations includingSweetwaterparticipants, and trash
Marsh, D Street Fill, J Street Marina, removed
and Sweetwater River
3.Term:In accordance with Section 1.10 of this Agreement, the term of this Agreement shall begin March 26,
2019and end on June 30, 2023for completion of all Required Services.
4.Compensation:
Form ofCompensation/Reimbursement of Costs
Invoiced or agreed-upon amounts as follows:
Activity CostsHCF Grant Expenses
Personnel$67,800.00
Facility Use Fees$3,200.00
Supplies and Materials$10,000.00
Transportation$4,000.00
Marketing and Interpretation$15,000.00
Total$100,000.00
Payable upon invoice at 6-month intervals by invoice.
Notwithstanding the foregoing, the maximum amount to be paid to the Contractor/Service Providerfor services
performed through June 30, 2023shall not exceed $100,000.
5.Special Provisions:
Permitted Sub-Contractor/Service Providers:
Security for Performance:
Notwithstanding the completion date set forth in Section 3 above, City has option to extend this Agreement for
additional terms, defined as a one-year increment or .The City Manager or Director of Finance/Treasurer
shall be authorized to exercise the extensions on behalf of the City. If the City exercises an option to extend, each
extension shall be on the same terms and conditions contained herein, provided that theamounts specified in
Section 4 above may be increased by up to for each extension. The City shall give written notice to
Contractor/Service Providerof the City’s election to exercise the extension via the Notice of Exercise of Option
to Extend document. Such notice shall be provided at least 30 days prior to the expiration of the term.
None
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Consultant Name: LIVING COAST DISCOVERY CENTER Rev.10/24/17
EXHIBIT B
INSURANCE REQUIREMENTS
Contractor/Service Providershall adhere to all terms and conditions of Section 3 of the Agreement and agrees to
provide the following types and minimum amounts of insurance, as indicated by checking the applicable boxes
(x).
Type of InsuranceMinimum AmountForm
General Liability: $2,000,000 per occurrence for Insurance Services Office Form
Including products and bodily injury, personal injury CG 00 01
completed operations, (including death), and property
personal and damage. If Commercial General
advertising injuryLiability insurance with a general
aggregate limit is used, either the
general aggregate limit must apply
separately to this Agreement or the
general aggregate limit must be
twice the required occurrence limit
Additional Insured Endorsement *Must be primary and must not
or Blanket AI Endorsement for exclude Products/Completed
City*Operations
Waiver of Recovery Endorsement
Automobile Liability$1,000,000 per accident for bodily Insurance Services Office Form
injury,includingdeath,andCA 00 01
property damageCode 1-Any Auto
Code 8-Hired
Code 9-Non Owned
Workers’$1,000,000 each accident
Compensation$1,000,000 disease policy limit
Employer’s Liability$1,000,000 disease each employee
Waiver of Recovery Endorsement
Other Negotiated Insurance Terms: NONE
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EXHIBIT C
CONTRACTOR/SERVICE PROVIDERCONFLICT OF INTEREST DESIGNATION
12
The Political Reform Actand the Chula Vista Conflict of Interest Code(“Code”) require designated state and
local government officials, including some Contractor/Service Providers, to make certain public disclosures using
a Statement of Economic Interests form (Form 700).Once filed, a Form 700 is a public document, accessible to
any member of the public. In addition, Contractor/Service Providers designated to file the Form 700 are also
3
required to comply with certain ethics training requirements.
4
A.Contractor/Service ProviderISa corporation or limited liability company and is therefore EXCLUDED
from disclosure.
B.Contractor/Service ProviderisNOTa corporation or limited liability company and disclosure designation
is as follows:
APPLICABLE DESIGNATIONS FOR INDIVIDUAL(S) ASSIGNED TO PROVIDE SERVICES
(Category descriptions available at www.chulavistaca.gov/departments/city-clerk/conflict-of-interest-code.)
1.Required Filers
Each individual who will be performing services for the City pursuant to the Agreement and who meets the definition
of “Contractor/Service Provider,” pursuant to FPPC Regulation 18700.3, must file a Form 700.
2.Required Filing Deadlines
Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City's online
filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required
annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement.
3. Filing Designation
The City Department Director will designate each individual who will be providing services to the City pursuant to the
Agreement as full disclosure, limited disclosure, orexcluded from disclosure, based on an analysis of the services the
Contractor/Service Providerwill provide. Notwithstanding this designation or anything in the Agreement, the
Contractor/Service Provideris ultimately responsible for complying with FPPC regulations and filing requirements. If
you have any questions regarding filing requirements, please do not hesitate to contact the City Clerk at (619)691-5041,
or the FPPC at 1-866-ASK-FPPC, or (866) 275-3772 *2.
Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the written
determination of the Contractor’srequirement to comply with the disclosure requirements set forth in the Code.
Completed by:Tim Farmer
1Cal.Gov. Code §§81000et seq.; FPPC Regs. 18700.3 and 18704.
2Chula Vista Municipal Code §§2.02.010-2.02.040.
3Cal. Gov. Code §§53234, et seq.
th
4CA FPPC Adv. A-15-147 (Chadwick) (2015); Davis v. Fresno Unified School District (2015) 237 Cal.App.4261; FPPC Reg.
18700.3 (Consultant defined as an “individual” who participates in making a governmental decision; “individual” does not include
corporation or limited liability company).
City of Chula Vista Agreement No.:Obtain From City Clerk x5961
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Consultant Name: LIVING COAST DISCOVERY CENTER Rev.10/24/17
March 26, 2019File ID: 19-0179
TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE FIRST AMENDMENT
TO THE MEMORANDUM OF UNDERSTANDING (SIDE LETTER) BETWEEN THE CITY OF CHULA VISTA AND
INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, LOCAL 2180 REGARDING SQUADS
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
In March 2019, the City and International Association of Fire Fighters, Local 2180,(IAFF) engaged in
informal discussions to amend the current MOU (Side Letter) regarding the SQUAD Premium Pay and an
agreement was subsequently reachedto amend the MOU to provide for a 9% SQUAD Premium Pay instead
of 8.5%. The increased amount was to ensure the intent of the parties to provide a SQUAD Premium Pay
consistent with that provided to the Training Division was met.
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act
State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is
required.
Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance withthe
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of
the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
N/A
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DISCUSSION
OnDecember 18, 2018, the City Council approved a Memorandum of Understanding (Side Letter) between
the City of Chula Vista and International Association of Fire Fighters, Local 2180 (IAFF), related to staffing,
compensation and other terms and conditions of employment funded by Measure A, to include SQUAD
Premium Pay. In March 2019, the City IAFF engaged in informal discussions to amend the current MOU
(Side Letter) regarding the SQUAD Premium Pay and an agreement was subsequently reached to increase
the SQUAD PremiumPay from 8.5% to 9%retroactive to February 1, 2019to make it consistent with how
we compensate those in the Training Division.
Approval of the Resolution will approve the FirstAmendment to the Side Letterregarding the SQUAD
programbetween the City of Chula Vista and IAFF.
DECISION-MAKER CONFLICT
Staff has determined that the action contemplated by this item is ministerial, secretarial, manual, or clerical
in nature and, as such, does not require the City Council members to make or participate in making a
governmental decision, pursuant to California Code of Regulations Title 2, section 18702.4(a).
Consequently, this item does not present a conflict under the Political Reform Act (Cal. Gov't Code § 87100,
et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy
Community, Strong and Secure Neighborhoods and a Connected Community. The position change supports
the City-wide strategic goal of Operational Excellence by providing competitive pays that will attract and
retain employees.
CURRENT-YEAR FISCAL IMPACT
The proposedchange to SQUAD Premium Payis estimated to total a net cost of approximately $1,200. The
funding for thisisfunded in the Measure A Fund budget, resulting in no net fiscal impact to the General
Fund.
ONGOING FISCAL IMPACT
The ongoing costs associated with the proposed change to SQUAD Premium Pay are estimated at
approximately $5,000 annually.The overall cost will increase along with future cost of living adjustments
and benefit changes.Expenses for SQUAD Premium Payin succeeding fiscal years will be funded in the
Measure A Fund budget. The cost will be incorporated into the baseline salary budget of the Fire
Department in future fiscal years.
ATTACHMENT
First Amendment toMemorandumof Understanding (Side Letter) Between the City of Chula Vista and
International Association of Fire Fighters, Local 2180 Regarding Squads
Staff Contact: Erin Dempster
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE FIRST AMENDMENT TO
THEMEMORANDUMOFUNDERSTANDING(SIDE
LETTER) BETWEEN THE CITY OF CHULA VISTA AND
INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS,
LOCAL 2180 REGARDING SQUADS
WHEREAS, on December 18, 2018, the City Council approved aMemorandum of
Understanding (Side Letter) between the City of Chula Vista and International Association of
Fire Fighters, Local 2180 (IAFF), related to staffing, compensation and other terms and
conditions of employment funded by Measure A, includingSQUAD Premium Pay; and
WHEREAS inMarch 2019,the City and IAFF engaged in informal discussions to amend
the current MOU (Side Letter) regarding the SQUAD Premium Pay;and
WHEREAS, an agreement (via an amendment to the MOU (First Amendment)) was
subsequently reached to increase the SQUAD Premium Pay from 8.5% to 9% retroactive to
February 1, 2019to be consistent with how we compensate those in the Training Division.A
copy of the First Amendment is on file with the City Clerk’s Office.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it hereby does approve the First Amendment to the Memorandum ofUnderstanding
(Side Letter) between the City of Chula Vista and theInternational Association of Fire Fighters,
Local 2180 (IAFF).
Presented byApproved as to form by
Courtney ChaseGlen R. Googins
Director of Human ResourcesCity Attorney
March 26, 2019File ID: 19-0176
TITLE
A.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING EMPLOYER PAID
MEMBER CONTRIBUTIONS FOR EMPLOYEES IN CLASSIFICATIONS REPRESENTED BY LOCAL 2180
INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS AFL-CIO (IAFF)
B.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING CESSATION OF
PAYMENT, ONEMPLOYER SIDE, FOR OPTIONAL BENEFITS BY EMPLOYEES IN CLASSIFICATIONS
REPRESENTED BY LOCAL 2180 INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS AFL-CIO (IAFF)AS
A RESULT OF TERMINATION OF EMPLOYER-PAID MEMBER CONTRIUBTIONS (EPMC) FOR SAID
EMPLOYEES
RECOMMENDED ACTION
Council adopt the resolutions.
SUMMARY
Pursuant to the 2014-2017 Memorandum of Understanding (MOU) between the City and Local 2180
International Association of Fire Fighters AFL-CIO (IAFF), retirement Tier 1 employees represented by
IAFF currently contribute nine percent (9%)towards their pension costs, applied to the City’s (employer
share) contribution to CalPERS for optional benefits. In return, said Tier 1 employees receive a nine
percent (9%)Employer Paid Member Contribution (EPMC) towards their CalPERS retirement.An
amendment (Amendment) to the 2014-2017 MOU, Section I.6.providesthatEPMC will be removed for said
employees effective after the first full pay period of March 2019 unless IAFF notifiedthe City and entered
into a Letter of Understanding no later than February 15, 2019 to maintain this EPMC benefitat the
employee’s full cost. IAFF did not notify the City nor enter into a Letter of Understanding by February 15,
2019.
Per the provisions of the Amendment between the City of Chula Vista and IAFF, staff is requesting City
Council approval for the Resolutions, effective March 15, 2019, to terminate EPMC for Tier 1 employees in
classifications represented by IAFF and, in a corresponding action, approve the cessation of payment by
Tier I employees in classifications represented by IAFF, on the employer side, for optional benefits as a
result of the expirationof CityEPMCpayments.CalPERS requires a City Council-adopted resolution to
change the payment and reporting of the value of EPMC.
v.001 Page|1
ENVIRONMENTAL REVIEW
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act
State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is
required.
Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in
the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is
not subject to CEQA.Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
Background
TheCitycurrently pays nine percent (9%),on the employee side,towards retirement Tier 1 IAFF
represented employees’ CalPERS retirement benefitsresulting in Employer Paid Member Contribution
(EPMC) and, in return,said IAFF representedemployees currently pay a nine percent (9%) contribution
applied to the City’s (employer share) contribution to CalPERS under Government Code Section 20516 for
optional benefits.
The Amendment to the 2014-2017 MOU, Section I.6.states that,“EPMC will be removed effective after the
first full pay period in March 2019 . . . IAFF must notify the City and enter into a Letter of Understanding no
later than February 15, 2019 to maintain this benefit.”Furthermore, the Amendment required that “should
the IAFF wish for employees to continue with this benefit, all eligible employees must pay the full cost of
this benefit as determined by the City’s Actuary.” IAFF did not notify the City nor enter into aLetter of
Understanding by February 15, 2019 and, as a result, EPMC will expire on March 14, 2019.
If EPMC had continued, thecost to the City for the remainder of the fiscal year would have been $326,386.
Theelimination of the EPMC was factored into the Fiscal Year 2018-2019 Budget.
Result of the Elimination ofEPMC forIAFF Members
Pursuantto Government Code Section 20691, effective March 15, 2019, the City will cease to pay nine
percent (9%), on the employee side, for retirement benefits of Tier I employees represented by IAFF. This
would result in a9% payment by the aforementioned employees, on the employee side, for employee
contributions towards retirement benefits (which they had not been required to pay) and said action will
result in the elimination of EPMC. Correspondingly, the requirement that thoseemployees pay, on the
employer side,nine percent (9%)for optional benefits will simultaneously be terminated.
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CalPERS requires a City Council-adopted resolution to change the payment and reporting of the value of
EPMC. Staff is requesting City Council to adopt the resolutionsto amend EPMC from nine percent (9%) to
zero percent (0%) for employees in classifications represented by IAFF and approve the cessation of the
nine percent (9%) payment by employees in classifications represented by IAFF, on the employer side, for
optional benefits as a result of the expiration of City EPMC payments.
DECISION-MAKER CONFLICT
Not Applicable -Not Site-Specific
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific
and consequently, the real property holdings of the City Council members do not create a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et
seq.).
Staff is not independently aware,and has not been informed by any City Council member, of any other fact
that may constitute a basis for a decisionmaker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Theeliminationof EPMC for IAFF represented employeeswas factored into the Fiscal Year 2018-2019
Budget and thereforeresults inno fiscal impact tothe current fiscal year.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact to the eliminationof EPMC forIAFF represented employees.
ATTACHMENTS
1.City of Chula Vista and IAFF Amendment (Letter of Understanding) to the 2014-2017 MOU
(Contract Extension to December 31, 2019)
Staff Contact:Erin Dempster, Human Resources Operations Manager
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING EMPLOYER-PAID MEMBER
CONTRIBUTIONS FOR EMPLOYEES IN CLASSIFICATIONS
REPRESENTEDBYLOCAL 2180INTERNATIONAL
ASSOCIATION OF FIRE FIGHTERS AFL-CIO (IAFF)
WHEREAS,the governing body of theCity of Chula Vistahas the authority to
implement Government Code Section 20636(c) (4) pursuant to Section 20691;
WHEREAS, the governing body of theCity of Chula Vistahas a written labor
policy or agreement which specificallyprovides for the normal member contributions to
be paid by the employer and reported as additional compensation;
WHEREAS, one of the steps in the procedures to implement Section 20691 is the
adoption by the governing body of theCity of Chula Vistaof a Resolution to commence
paying and reporting the value of said Employer Paid Member Contributions (EPMC);
and
WHEREAS, the governing body of the City of Chula Vistahas identified the
following conditions for the purpose of its election to pay EPMC:
•This benefit shall apply to all employees ofLocal 2180 International
Association of Fire Fighters AFL-CIO.
•This benefit shall consist of paying zero percent(0%)of the normal
contributions as EPMCand reporting the same percent (value) of compensation earnable
(excluding Government Code Section 20636(c)(4))as additional compensation.
•The effective date of this Resolution shall beMarch 15, 2019.
NOW, THEREFORE, BE IT RESOLVED that the governing body of theCity of
Chula Vistaelectsto pay and report the value of EPMC, as set forth above.
Presented byApproved as to form by
Gary Halbert Glen R. Googins
City ManagerCity Attorney
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING CESSATION OF PAYMENT, ON
EMPLOYER SIDE, FOR OPTIONAL BENEFITS BY
EMPLOYEES IN CLASSIFICATIONS REPRESENTED BY
LOCAL 2180 INTERNATIONAL ASSOCIATION OF FIRE
FIGHTERSAFL-CIO(IAFF)ASARESULTOF
TERMINATIONOFEMPLOYER-PAIDMEMBER
CONTRIBUTIONS FOR SAID EMPLOYEES
WHEREAS, the City currently pays 9%for retirement Tier 1 employees in classifications
represented byLocal 2180 International Association of Fire Fighters AFL-CIO("IAFF"), on the
employee side, for retirement benefits, resulting in Employer Paid Member Contributions
("EPMC"); and
WHEREAS, IAFFrepresentedretirement Tier 1 employees presently pay, on the
employer side, 9%, for CalPERS optional benefits; and
WHEREAS,the City, pursuant to Government Code section 20691, will cease to pay 9%,
on the employee side, for retirement benefits for IAFFrepresented retirement Tier 1 employees,
effective March 15, 2019, resulting in 9% payment by the aforementioned IAFFrepresented
classifications, on the employee side for employee contributions for retirement benefits (which
they had not been required to pay) and the cessation of EPMC ("Termination of EPMC")
effectiveMarch 15, 2019; and
WHEREAS,in light of the City's "Termination of EPMC" for IAFFrepresented
retirement Tier 1 employees, said employeescorrespondingly shall not be required to pay 9%,
for optional benefitseffective March 15, 2019.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does herebyapprove cessation of payment by employees in classifications represented by
IAFFof 9%, for optional benefits,in light of the "Termination of EPMC",effectiveMarch 15,
2019.
Presented byApproved as toform by
Courtney ChaseGlen R. Googins
Director of Human ResourcesCity Attorney
March 26, 2019File ID: 19-0113
TITLE
ORDINANCE OF THE CITY OF CHULA VISTA AMENDING VARIOUS SECTIONS OF THE CHULA VISTA
MUNICIPAL CODE (CVMC) TO CLARIFY PROVISIONS REGARDING ILLEGAL COMMERCIAL CANNABIS
CONDUCT AND PENALTIES, INCLUDING CVMC SECTIONS1.04.010, DEFINITION OF RESPONSIBLE PARTY,
1.41.110,CIVIL PENALTIES, 5.19.020, DEFINITIONS, AND 5.19.280, ENFORCEMENT AND PENALTIES
(FIRST READING)
RECOMMENDED ACTION
Council place the ordinance on first reading.
SUMMARY
This proposed ordinance amends Chula Vista Municipal Code sections 1.04.010, 1.41.110,5.19.020 and
5.19.280 to clarify and improve the consistency of language regarding violations ofthe Chula Vista Municipal
Code, includingpenalties for violations of the commercial cannabis provisionscontainedin Chapter 5.19.
ENVIRONMENTAL REVIEW
The proposed ordinance amending Chula Vista Municipal Code Section 1.04.010, Definitionof Responsible
Party, Section 1.41.110, Civil Penalties, Section 5.19.020, Definitions of Commercial Cannabis Activity and
Manager, and Section 5.19.280, Commercial Cannabis Enforcement and Penaltieshas been reviewed for
compliance with the California Environmental Quality Act (CEQA) and it has been determined that the
activity is not a “Project” as defined under Section 15378 of the state CEQA Guidelines because it will not
result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA
Guidelines, the activity is not subject to CEQA. Notwithstanding the foregoing, it has also been determined
that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental
Quality Act State Guidelines. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
In March of 2018, City Council approved Ordinance 3418, which added Chapter 5.19 to the Chula Vista
Municipal Code (“CVMC”) to regulate commercial cannabis in the City of Chula Vista. At that time, City
v.001 Page|1
Council approved the assessment of civil penalties up to an amount of $10,000 per violation per day for
violations of Chapter 5.19.
Chapter 1.41 of the CVMC contains general provisions regarding the assessment of civil penalties for code
violations. The current text ofsection 1.41.110 identifies a maximum civil penalty of $2,500 for violations,
with an exception for violations of the land grading provisions contained inchapter 15.06. In order to
provide consistency and clarity, Staff now recommend that section 1.41.110 be amended to:
specify that violations of the commercial cannabis provisions in chapter 5.19are also exempt from
the maximum $2,500 civil penalty;
reiterate that violations of chapter 5.19 are subject to a civil penalty of up to $10,000 as prescribed
in 5.19.280;and
clean up remaining languagein the section.
Staff additionally recommend that language in1.04.010, 5.19.020,and5.19.280be amended to more
preciselyreflectwhat is prohibitedand who is responsible when a violation occurs. The recommended
amendments would improve the clarity of the provisions and enhance the City’s ability to enforce its
municipal code.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and
consequently, the real property holdings of the City Council members do not create a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact
that may constitute a basis for decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
The subject amendments to sections 1.04.010,1.41.110,5.19.020,and 5.19.280 improve the City’s capacity
assess civil penalties for violations of the municipal code. However, it is difficult and speculative to predict
when such penalties would be recovered and in what amounts.
ONGOING FISCAL IMPACT
The subject amendments to section 1.04.010, 1.41.110,5.19.020, and 5.19.280 improve the City’s capacity
assess civil penalties for violations of the municipal code. However, it is difficult and speculative to predict
when such penalties would be recovered and in what amounts.
ATTACHMENTS
1.Proposed ordinance
2.Proposed amended 1.04.010 red-line strikeout version
3.Proposed amended 1.41.110 red-line strikeout version
4.Proposed amended 5.19.020 red-line strikeout version
5.Proposed amended 5.19.280 red-line strikeout version
Page|2
Staff Contact: Megan McClurg; Lou El-Khazen
Page|3
ORDINANCE NO.
ORDINANCE OF THE CITY OF CHULA VISTA AMENDING VARIOUS
SECTIONS OF THE CHULA VISTA MUNICIPAL CODE (CVMC) TO
CLARIFYPROVISIONSREGARDINGILLEGAL COMMERICAL
CANNABIS CONDUCT AND PENALTIES, INCLUDING CVMC SECTIONS
1.04.010,DEFINITION OF RESPONSIBLE PARTY, 1.41.110,CIVIL
PENALTIES, 5.19.020,DEFINITIONS, AND 5.19.280, ENFORCEMENT AND
PENALTIES (FIRST READING)
WHEREAS, Chula Vista Municipal Code section 1.04.010 identifies and defines
responsible parties for purposes of violations of the Chula Vista Municipal Code; and
WHEREAS, Chula Vista Municipal Code section 1.41.110(C) currently caps the amount
of civil penalties that can be assessed against a responsible party for violations of the municipal
code at $2,500 per day, with the exception of violations of Chapter 15.04 CVMC; and
WHEREAS, Chula Vista Municipal Code section 5.19.020 identifies and defines
commercial cannabis activity and manager for purposes of Chapter 5.19 of the Chula Vista
Municipal Code; and
WHEREAS, Chula Vista Municipal Code section 5.19.280(C) authorizes the assessment
of civil penalties in the amount of up to $10,000 for each and every violation of Chapter 5.19
CVMC;and
WHEREAS, in City and County of San Francisco v. Sainez,the California Court of
Appeal found that fines in excess of $100,000 did not violate excessive fines clauses of the
Federal and State Constitutions; and
WHEREAS, for purposes of constitutional inquiry under the excessive fines clause, the
amount of fines imposed are required to bear some proportional relationship to the penalty’s
deterrent purpose and the nature of misconduct; and
WHEREAS, unlawful cannabis businesses have continued to operate in violation of the
Chula Vista Municipal Code despite enforcement action and the assessment of civil penalties in
the amount of $2,500 per day; and
WHEREAS,under California Business and Professions Code section 26200(a)(1), local
jurisdictions are authorized to either permitand regulateor prohibit the operation of cannabis
businesses within their boundaries; and
WHEREAS, the City of Chula Vista has experienced the negative impacts and secondary
effects associated with the operation of unlawful cannabis businesses within its corporate
boundaries; and
C:\\Users\\legistar\\AppData\\Local\\Temp\\BCL Technologies\\easyPDF 8\\@BCL@C00D3E6D\\@BCL@C00D3E6D.doc
Ordinance
Page 2
WHEREAS, unregulated businesses remain a sourceof danger and disruption for City
residents and businesses; and
WHEREAS, pursuant to its police powers, including but not limited to California
Constitution Article XI, Section 5(b) authority over municipal affairs, the City of Chula Vista has
general authority over the public health, safety, and welfare of its citizens; and
WHEREAS, the proposed amendments do not cause a substantial change to the
objectives and policies contained in Chula Vista Municipal Code chapters 1.04 and5.19, but
instead clarifyimportant provisions and facilitate City’s ability to implement such objectives and
policies;
WHEREAS, it is the intent of the City Council to authorize robust enforcement
procedures with regard to unlawful cannabis activity within the City in order to protect public
safety, health, and other law enforcement interests;
NOW THEREFORE the City Council of the City of Chula Vista does ordain as follows:
Section I. Environmental Findings
A.Chapter 1, Section 1.04.010 of the Chula Vista Municipal Code regarding the
definition of “Responsible party” is amended to read as follows:
1.04.010 Definitions and rules of construction.
“Responsible party” means, individually and collectively, the owner(s) of real property upon
which a violation of this code or state law exists, a tenant or occupant in possession, a licensee,
or any other person who has caused, created, or continues to allow a condition to occur or exist
upon real property constituting a violation of this code or state law. A “responsible party” canbe
a natural person or an entity.
\[All other provisions and definitions in section 1.04.010 remained unchanged\]
B.Chapter 1, Section 1.41.100 of the Chula Vista Municipal Code regarding the
assessment of civil penalties is amended to read as follows:
1.41.110Civil penalties.
A. The council finds that there is a need for alternative methods of enforcement of the Chula
Vista Municipal Code and applicable state codes. The council further finds that the assessment of
civil penalties through an administrative hearing procedure for code violations is a necessary
alternative method of code enforcement. The administrative assessment of civil penalties
established in this section is in addition to any other administrative or judicial remedy established
by law which may be pursued to address violations of the municipal code or applicable codes.
B. Civil penalties may be assessed against a responsible party for continued violations of the
municipal code or applicable state codes, whether of the same section or any combination, that
reflect a continuing disregard for the requirements of such laws. The director may issue a notice
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Page 3
and order to the responsible party assessing a civil penalty pursuant to this section. The civil
penalty may be enforced against the responsible party as a lien pursuant to CVMC 1.41.140.
C. Except for violations of land grading ordinances contained in Chapter 15.04 CVMC and
violations of commercial cannabis provisions contained in Chapter 5.19 CVMC, civil penalties
may be assessed at a rate not to exceed $2,500 per violation per day.
D. The civil penalty for violations of land grading permits or land grading work done without the
issuance of a permit shall be based on an estimate by the director of grading work performed.
The rate of civil penalties shall be as follows:
1. Less than 250 cubic yards, but not meeting the requirements for an exemption from
grading permit under CVMC 15.04.150: $1,000 per violation;
2. Two hundred fifty-one (251) to 500 cubic yards: $5,000 per violation;
3. Five hundred one (501) to 1,000 cubic yards: $10,000 per violation;
4. Over 1,001 cubic yards: $25,000 per violation;
5. In the event any individual, firm, company, developer or property owner causes a second
violation of the land grading permit ordinance, either on the same property or different
property and whether or not part of the same development, the rate of civil penalties shall be
doubled. For third and subsequent violations, the rate of civil penalties shall be multiplied by
a factor of four.
E. Civil penalties for violations of Chapter 5.19 CVMC may be assessed at a rate not to exceed
$10,000 per violation per day.
F. Civil penalties under this section may be accrued retroactive to the date the violations were
first discovered, as evidenced by the issuanceof a notice of violation pursuant to CVMC
1.41.030, or any later date determined by the director. In determining the amount to be imposed
on a daily rate, the director shall consider the following factors:
1. Duration of the violation;
2. Frequency or occurrence of the violation;
3. Frequency or occurrence of other violations during the period of accrual;
4. Seriousness of the violation in relation to its threat or impact upon public health, welfare
or safety;
5. History of the violations;
6. Activity taken by the responsible party to obstruct or interfere with correction of the
problem;
7. Good faith or bad faith efforts by the responsible party to comply;
8. The impact of the violation on the surrounding property and community;
Ordinance
Page 4
9. The financial ability ofthe responsible party to have corrected the violation in a timely
fashion.
G. The director shall comply with Chapter 1.40 CVMC concerning notice of the proposed civil
penalties and the right to a hearing to contest or confirm. Unless contested, the noticeand order
shall be final and be enforced pursuant to CVMC 1.41.160. If contested, the hearing examiner
shall limit the hearing to the following issues:
1. Whether the responsible party maintained a use or condition on real property that violated
the municipal code or state law on the dates specified; and
2. Whether the civil penalty assessed is consistent with the criteria expressed in subsection
(F) of this section. The hearing examiner may, however, exercise discretion pursuant to
CVMC 1.40.020(E) and increase or decrease the penalties assessed to a level determined to
be supported by the evidence meeting the criteria under subsection (F) of this section.
H. The director shall issue a final order based on the proceedings under subsection (F) of this
section and establish a date for payment, following which date an enforcement lien maybe
imposed upon the propertyin accordance with applicable law. The imposition of an enforcement
lien may be made a part of the proceedings and notice and order under CVMC 1.41.100 or this
section.
C.Chapter 5, Section 5.19.020 of the Chula Vista Municipal Code regarding the
definitions of “Commercial Cannabis Activity” and “Manager” are amended to read as follows:
“Commercial Cannabis Activity” means the commercial Cultivation, possession, furnishing,
manufacture, distribution, processing, storing, laboratory testing, packaging, labeling,
transportation, delivery or sale of Cannabis or Cannabis Products.
“Manager” means any individual Person(s) designated by a Commercial Cannabis Business to
manage day-to-day operations of the Commercial Cannabis Business or any Person acting with
apparent management authority. Evidence of management authority includes, but is not limited
to, evidence that the Person has the power to direct,supervise, or hire and dismiss employees or
volunteers, control hours of operation, create policy rules, or purchase supplies.
\[All other provisions and definitions in section 5.19.020 remained unchanged\]
D.Chapter 5, Section 5.19.280 of the Chula Vista Municipal Code regarding
enforcement and penalties regarding commercial cannabis activity is amended to read as follows:
5.19.280 Enforcement and Penalties.
A. It is unlawful to:
1. Own, operate, set up, conduct, maintain, facilitate, or direct Commercial Cannabis Activity
in the City without a valid City License authorizing such Commercial Cannabis Activity;
Ordinance
Page 5
2. Participate as an employee, contractor, agent, volunteer, or in any other capacity in
Commercial Cannabis Activityin the City without a valid City License;
3. Use any parcel or any portion of parcel of land forCommercial Cannabis Activitywithout a
valid City License;
4. Lease, rent to, or otherwise allow Commercial Cannabis Activityto occupyor accessany
parcel or portion of parcel of land in the City without a valid City License.
B. It shall be unlawful for any person to violate any provision, or to fail to comply with the
requirements, of this Chapter or any regulation adopted hereunder. Any person violating any of
the provisions or failing to comply with any of the mandatory requirements of this Chapter or
any regulation adopted hereunder shall be guilty of a misdemeanor punishable by a fine of not
more than $1,000.00 or imprisonment for a period of not more than six months,or by both a fine
and imprisonment. Each day that a violation continues is deemed to be a new and separate
offense. No proof of knowledge, intent, or other mental state is required to establish a violation.
C. Any condition caused or allowed to exist in violation of any of the provisions of this Chapter
or any regulation adopted hereunder is a public nuisance and may be abated by the City, or by
the City Attorney on behalf of the people of the State of California, as a nuisance by means of a
restraining order, injunction, or any other order or judgment in law or equity issued by a court of
competent jurisdiction. The City, or the City Attorney on behalf of the people of the State of
California, may seek injunctive relief to enjoin violations of, or to compel compliance with this
Chapter or seek any other relief or remedy available at law or equity, including the imposition of
monetary civil penalties. Each day that a violation continues is deemed to be a new and separate
offense.Civil penalties for violations of this Chapter may be assessed at a rate not to exceed
$10,000 per violation per day.
D. Whenever in this Chapter any act or omission is made unlawful, it shall include causing,
aiding, abetting, suffering, or concealing the fact of such act or omission.
E. The remedies specified in this Section are cumulative and in addition to any other remedies
available under State or local law for a violation of this Code.
F. Nothing in this Section shall be construed as requiring the City to allow, permit, license,
authorize, or otherwise regulate Commercial Cannabis Activity, or as abridging the City’s police
power with respect to enforcement regarding Commercial Cannabis Activity.
Section II.Severability
If any portion of this Ordinance, or its application to any person or circumstance, is for
any reason held to be invalid, unenforceable or unconstitutional, by a court of competent
jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability or
unconstitutionality shall not affect the validity or enforceability of the remaining portions of the
Ordinance, or its application to any other person or circumstance. The City Council of the City of
Chula Vista hereby declares that it would have adopted each section, sentence, clause or phrase
of this Ordinance, irrespective of the fact that any one or more other sections, sentences, clauses
or phrases of the Ordinance be declared invalid, unenforceable or unconstitutional.
Ordinance
Page 6
Section III. Construction
The City Council of the City of Chula Vista intends this Ordinance to supplement, not to
duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in
light of that intent.
Section IV. Effective Date
This Ordinance shall take effect and be in force on the thirtieth day after its final passage.
Section V. Publication
The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause
the same to be published or posted according to law.
Presented byApproved as to form by
_________________________________________________________________________
Gary HalbertGlen R. Googins
City ManagerCity Attorney
March 26, 2019File ID: 19-0052
TITLE
A.ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHAPTER 15.06 OF THE CHULA VISTA
MUNICIPAL CODE (ADMINISTRATIVE PROVISIONS FOR THE TECHNICAL BUILDING CODES) TO
COMPLY WITH STATE LAW(FIRST READING)
B.RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CERTAIN SECTIONS
OF CHAPTER 10 (BUILDING) OF THE CITY’S MASTER FEE SCHEDULE RELATING TO PLAN CHECK
PERMIT EXTENSIONS
RECOMMENDED ACTION
Council conduct the public hearing, place the ordinance on first reading,and adopt the resolution.
SUMMARY
Assembly Bill (AB) 2913 approved by the California legislature on September 21, 2018 extends the life of
building permits for residential occupancies from 180 days (six months)to 12 months after permit
issuance, unless the permittee has abandoned the work authorized by the permit. AB 2913 also authorizes
a permittee to request, and the Building Official to grant in writing, one or more extensions of time for
periods of not more than 180 days per extension.
This ordinance will update Chula Vista Municipal Code Chapter 15.06 to extendbuilding permit application
and permit expiration times for all building permit applications and for all issued building permits, and not
only those related to residential occupancies as expressed in AB 2013.
The resolution will update Chapter 10 (Building Fees) of the City’s Master Fee Schedule related to building
permit application and time extension fees.
ENVIRONMENTAL REVIEW
The City’s Development Services Director has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as
defined under Section 15378 of the State CEQA Guidelines because the action pertains to ministerial permit
regulations. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not
subject to CEQA.
Page|1
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
The draft ordinance was considered by the Development Services Citizen Oversight Committee on January
30, 2019. There was general consensus in support of the proposed ordinance.
DISCUSSION
AB 2913
Provisions of the California Health and Safety Code relate to building permits, which are addressedwhen a
building permit is deemed to be expired. A building permit may expire because work authorized by the
permit has not commenced or the permittee has suspendedorabandoned the work.Assembly Bill (AB)
2913,approvedby the California legislature on September 21, 2018,extends the timeframefor residential
occupancy building permitsfrom 180 days (six months)to 12 monthsafter permit issuance, unless the
permittee has abandoned the work authorized by the permit. AB 2913also authorizes a permittee to
request, and the Building Official to grantin writing,one or more extensions oftime for periodsof not more
than 180 days per extension.The bill requires that the permittee request the extension in writing and
demonstrate justifiable cause for the extension.
Existing Chula Vista Municipal Code Building Permit Provisions
Chula Vista’sbuilding permit applicationregulations are set forth in Chula Vista Municipal Code (CVMC)
Section 15.06.085. Section 15.06.085.C of the CVMCstatesthat building permit applications for which no
permit is issued shall expire within 180 days following the date of application. The current code also
provides that an application “shall not be extended more than once”.
Chula Vista’sbuilding permit issuanceregulations are set forth in CVMC Section 15.06.090.Section
15.06.090.D of the Code statesthat if work is not commenced, or if work is suspended or abandoned, within
180 days from the date of the permit issuance, the permit shall expire. The current code also provides that
an issued permit shall not be extended more than once.
Proposed Chula Vista Municipal Code Amendment
This ordinance will update the CVMCto extend building permit application and permit expiration timesfor
all building permit applications and for all issued building permits, and not onlythose related to residential
occupancies as expressed in AB 2913.
Revisions to the Chula Vista building permit applicationregulations set forth in Section 15.06.085.C of the
CVMCare proposedto providethat building permit applications for which no permit is issued shall expire
within twelve (12) monthsfollowing the date of application,and that the Building Official may grant one or
more extensions of time. Each time extension wouldextend the permit application by 180 days. When
considering an extension of the permitapplication, the Building Official will consider the need to update
the permit application to reflect any newly adopted building codes and regulations.
Revisions to the Chula Vista building permit issuanceregulations set forth in Section 15.06.090.D of the
CVMCare proposedto providethat if work is not commenced within twelve (12) monthsfrom the date of
permit issuance, the permit shall expire. If work is suspendedor abandoned, the permit expires after 180
Page|2
days. Additional revisions to the code to allow the Building Official to grant one or more extensions of time
are proposed. Each time extension would extend the permit application by 180 days. When considering an
extension of the permit, the Building Official will consider the need to update the permit application to
reflect any newly adopted building codes and regulations.
Master Fee Schedule Amendment
The City currently assesses a flat fee of $105 to process each plan check (permit application) or permit
(permit issuance) extension. For unexpired applications or permits without changes to the plans or
specifications, a new fee equal to fifty percent (50%) of the adopted new permit fee is proposed. Unexpired
permits requiring changes would also be subject to the City’s existing supplemental plan check and
supplemental inspection fees, which are assessed on a half-hour basis. For expired permits, a new
application accompanied by the full new permit fee is required. The proposed fees ensure that the City
recovers the full cost of providing associated intake, plan check, and inspection services.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific
and consequently, the real property holdings of the City Council members do not create a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code § 87100, et
seq.).
Staff is not independently aware, and has not been informed by any City Council members, of any other fact
that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Amending the Chula Vista MunicipalCodeto allow permit applications and permits to stay active for one
year instead of 180 days is anticipated to reduce the number of requests. For those requesting extensions,
the fees to be assessed are increasing from $105 to either fifty-percent (50%)of the new permit fee or
payment of the new permit fee in full. Minimal fiscal impactsto the Development Services Fund are
anticipated in the current year.
ONGOING FISCAL IMPACT
Amending the Chula Vista Municipal Codeto allow permit applications and permits to stay active for one
year instead of 180 days is anticipated to reduce the number of requests. For those requesting extensions,
the fees to be assessed are increasing from $105 to either fifty-percent (50%) of the new permit fee or
payment of the new permit fee in full. Ongoing fiscalimpactsto the Development Services Fund are not
anticipated.
ATTACHMENTS
1)Proposed Master Fee Schedule revisions in redline format
Staff Contact: Chris Jacobs, Senior Planner, AdvancePlanning
Page|3
Ordinance
Page 1/5
ORDINANCE NO.
ORDINANCE OF THE CITY OF CHULA VISTA AMENDING
CHAPTER 15.06 OF THE CHULA VISTA MUNICIPAL CODE
(ADMINISTRATIVE PROVISIONS FOR THE TECHNICAL
BUILDING CODES) TO COMPLY WITH STATE LAW
WHEREAS, Chula Vista Municipal Code Chapter 15.06 established rules and regulations for the
administration and enforcement of certain technical building codes; and
WHEREAS, Assembly Bill 2913 approved on September 21, 2018 extends the life of building
permits for residential occupancies from 180 days to 12 months, and authorizes the Building Official to
grant one or more extensions for time periods of not more than 180 days per extension; and
WHEREAS, the revisions contained in this Ordinance to CVMC Chapter 15.06 Administrative
Provisions for the Technical Buil
of the Health and Safety Code relating to building permits; and
WHEREAS the
compliance with the California Environmental Quality Act (CEQA) and has determined that the activity
pertains to ministerial permit regulations. Therefore, pursuant to Section 15060(c)(3) of the State CEQA
Guidelines the activity is not subject to CEQA.
NOW THEREFORE the City Council of the City of Chula Vista does hereby ordain as follows:
Section I. Substantive Action
Chapter 15.06 of the Chula Vista Municipal Code is hereby amended as follows:
Chapter 15.06
ADMINSTRATIVE PROVISIONS FOR THE TECHNICAL BUILDING CODES
Sections:
15.06.085 Application for a Permit
15.06.090 Permit Issuance
15.06.085 Application for a Permit.
A. Application. To obtain a permit, the applicant shall first file an application in writing on a form
furnished by the City for that purpose. Every application shall:
1. Identify and describe the work to be covered by the permit for which application is made.
2. Describe the land on which the proposed work is to be done by legal description, street
address or similar description that will readily identify and definitely locate the proposed
building or work.
Ordinance
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3. Indicate the use or occupancy for which the proposed work is intended.
4. Be accompanied by plans, diagrams, computations and specifications, and other data as
required in subsection (B) of this section.
5. State the valuation of any new building or structure or any addition, remodeling or
alteration to an existing building.
6. Be signed by the applicant, or the appli
7. Give such other data and information as may be required by the Building Official.
B. Submittal Documents. Plans, specifications, engineering calculations, diagrams, soil investigation
reports, special inspection and structural observation programs and other data shall constitute the
submittal documents and shall be submitted in one or more sets with each application for a
permit. When such plans are not prepared by an architect or engineer, the Building Official may
require the applicant submitting such plans or other data to demonstrate that state law does not
require that the plans be prepared by a licensed architect or engineer. The Building Official may
require plans, computations and specifications to be prepared and designed by an engineer or
architect licensed by the state even if not required by state law. However, the Building Official
may waive the requirement to submit plans, calculations, construction inspection requirements
and other data if the nature of the work applied for is such that reviewing of plans is not necessary
to obtain compliance with this chapter.
1. Information on Plans and Specifications. Plans and specifications shall be drawn to scale
on substantial paper or cloth and shall be of sufficient clarity to indicate the location,
nature and extent of the proposed work and show in detail that the proposed work will
conform to the provisions of this chapter, the technical codes and all relevant laws,
ordinances, rules and regulations. Plans for buildings of other than Group R, Division 3
and Group U occupancies shall indicate how required structural and fire-resistive
integrity will be maintained where penetrations will be made for electrical, mechanical,
plumbing and communication conduits, pipes and similar systems.
2. Architect or Engineer of Record. When it is required that documents be prepared by an
architect or engineer, the Building Official may require the applicant to engage and
designate on the building permit application an architect or engineer who shall act as the
architect or engineer of record. If the circumstances require, the applicant may designate
a substitute architect or engineer of record who shall perform all the duties required of the
original architect or engineer of record. The applicant shall notify the Building Official in
writing if the architect or engineer of record is changed or is unable to continue to
perform the duties. The architect or engineer of record shall be responsible for reviewing
and coordinating all submittal documents prepared by others, including deferred
submittal items, for compatibility with the design of the building.
3. Deferred Submittals. Deferred submittals are defined as those portions of the design
which are not submitted at the time of the application and which are to be submitted to
the Building Official within a specified period. Deferred submittals shall have prior
Ordinance
Page 3/5
approval of the Building Official. The architect or engineer of record shall list the
deferred submittals on the plans at time of application and shall submit the deferred
submittal documents for review by the Building Official.
The architect or engineer of record shall submit the deferred submittals to the Building
Official with notation indicating that the deferred submittals have been reviewed and that
they have been found to be in general conformance with the design of the building. The
deferred submittal items shall not be installed until their design and deferred submittals
have been approved by the Building Official.
C. Expiration of Plan Review. Every Aapplications for which no permit is issued within 12 months
180 days following the date of application shall expire and plans and other data submitted for
review may thereafter be returned to the applicant or destroyed by the Building Official. The
Building Official may grant one or more extensions of time for periods extend the time for action
by the applicant for a period not exceeding 180 days per extension on written request by the
applicant showing that circumstances beyond the control of the applicant have prevented action
from being taken. When considering an extension of a permit application, the Building Official
shall consider the need to update the permit application to newly adopted building codes and
regulations. An application shall not be extended more than once. In order to renew action on an
application after expiration, the applicant shall submit a new permit application with required
submittal materials and shall be subject to all applicable fees and regulations in effect on the date
the new application is submitted resubmit plans and pay a new plan review fee. (Ord. 3087 § 1,
2007). All applicants requesting plan review extensions or new permit applications shall pay the
redule, as may be amended from time to
time by resolution of the City Council.
15.06.090 Permit Issuance.
A. Issuance. The application, plans, specifications, computations and other data filed by an applicant
for permit shall be reviewed by the Building Official. Such plans may be reviewed by other
departments of the city to verify compliance with all applicable laws. If the Building Official
finds that the work described in an application for a permit and the plans, specifications and other
data filed therewith conform to the requirements of this chapter, the technical codes, and other
pertinent laws and ordinances, and that the fees specified in CVMC 15.06.095 have been paid, the
Building Official shall issue a permit to the applicant.
When a permit is issued, and plans and specifications are required for that permit, the Building
Official shall endorse in writing or stamp the plans and specifica
approved plans and specifications shall not be changed, modified or altered without authorization
from the Building Official, and all work regulated by this chapter or the technical codes shall be
done in accordance with the approved plans and specifications.
The Building Official may issue a permit for the construction of part of a building, structure or
building service equipment before the entire plans and specifications for the whole building,
structure or building service equipment have been submitted or approved, provided adequate
information and detailed statements have been filed complying with all pertinent requirements of
Ordinance
Page 4/5
the technical codes. The issuance of a partial permit shall not, in any way, commit the Building
Official to grant a permit for the entire building, structure or building service.
B. Retention of Plans. The Building Official shall maintain an official copy, microfilm, electronic or
other type of photographic copy of the plans of every building, during the life of the building, for
which the City issued a building permit. All plans for common interest developments as defined
in Section 1351 of the California Civil Code shall be maintained with the following exceptions:
1. Single or multiple dwellings not more than two stories and basement in height.
2. Garages and other structures appurtenant to buildings listed in the exception in subsection
(B)(1) of this section.
3. Farm or ranch buildings.
4 Any one-story building where the span between bearing walls does not exceed 25 feet,
except a steel frame or concrete building.
C. Validity of Permit. The issuance of a permit or approval of plans, specifications and computations
shall not be construed to be a permit for, or an approval of, any violation of any of the provisions
of this chapter or the technical codes, or of any other ordinance of the City. Permits presuming to
give authority to violate or cancel the provisions of this chapter, the technical codes, or of other
ordinances of the City shall not be valid.
The issuance of a permit based on plans, specifications and other data shall not prevent the
Building Official from thereafter requiring the correction of errors in these plans, specifications
and other data, or prevent the Building Official from stopping building operations when there is a
violation of these plans, specifications and other data, or violations of this chapter or the technical
codes or of any other ordinances.
D. Expiration of Permit. Every permit issued by the Building Official under the provisions of the
technical codes shall expire, if the building or work authorized by such permit is not commenced
within 12 months 180 days from the date of such permit, or if the building or work authorized by
such permit is suspended or abandoned at any time after the work is commenced for a period of
180 days. Before such work can be recommenced, a new permit shall first be obtained to do so,
and the fee shall be one-half the amount required for a new permit for such work, provided no
changes have been made or will be made in the original plans and specifications for such work;
and provided, that such suspension or abandonment has not exceeded one year. In order to renew
action on a permit after expiration, the permittee shall pay a new full permit fee.
A permittee holding an unexpired permit may apply for an extension of the time within which
work may commence under that permit when the permittee is unable to commence work within
the time required by this section for good and satisfactory reasons.
A permittee holding an unexpired permit may apply for an extension of the time for good and
satisfactory reasons. A permittee with an expired permit may apply for a new permit. All
permittees requesting permit extensions or new permits shall pay the required fees as designated
Ordinance
Page 5/5
in the
Council.
The Building Official may grant one or more extensions of extend the time for action by the
permittee for a period not exceeding 180 days per extension upon written request by the permittee
demonstrating good and satisfactory reasons for such extension. showing that circumstances
beyond the control of the permittee have prevented action from being taken. When considering
an extension of a permit, the Building Official shall consider the need to update the permit to any
newly adopted building codes and regulations. Permits shall not be extended more than once.
E. Suspension or Revocation. The Building Official may in writing suspend or revoke a permit
issued under the provisions of this chapter and the technical codes when the permit is issued in
error or on the basis of incorrect information supplied, or in violation of this chapter, the technical
codes or any other ordinance or regulation. (Ord. 3087 § 1, 2007).
Section II. Severability
If any portion of this Ordinance, or its application to any person or circumstance, is for any
reason held to be invalid, unenforceable or unconstitutional, by a court of competent jurisdiction, that
portion shall be deemed severable, and such invalidity, unenforceability or unconstitutionality shall not
affect the validity or enforceability of the remaining portions of the Ordinance, or its application to any
other person or circumstance. The City Council of the City of Chula Vista hereby declares that it would
have adopted each section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any
one or more other sections, sentences, clauses or phrases of the Ordinance be declared invalid,
unenforceable or unconstitutional.
Section III. Construction
The City Council of the City of Chula Vista intends this Ordinance to supplement, not to
duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of
that intent.
Section IV. Effective Date
This Ordinance shall take effect and be in force on the thirtieth day after its final passage.
Section V. Publication
The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the
same to be published or posted according to law.
Presented by: Approved as to form by:
_____________________________________ ____________________________________
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTAAMENDING CERTAIN SECTIONS OF
CHAPTER 10 (BUILDINGFEES) OF THE CITY’S MASTER
FEE SCHEDULE RELATING TO PLAN CHECK AND PERMIT
EXTENSIONS
WHEREAS, in order to achieve full and equitable cost recovery for building services
providedfor plan check and permit extensions, the Council wishes to amend Chapter 10 of the
City’s Master Fee Schedule, as set forth in Exhibit 1, attached hereto and incorporated herein by
reference as if set forth in full; and
WHEREAS, the proposed fees do not exceed the estimated reasonable cost of providing
the associated services; and
WHEREAS, Article XIII C of the California Constitution requires a vote of the electorate
to increase any levy, charge,or exaction imposed by a local government, unless specifically
exempted; and
WHEREAS, the proposed fees are exempt from the vote requirement per Sections 1(e)(2)
and 1(e)(3)of Article XIII C of the California Constitution; and
WHEREAS, the proposed amendments to the Master Fee Schedule Chapter 10 shall not
become effective until 60 days after adoption of this Resolution by the City Council;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that itdoes herebyamend certain sections of Chapter 10 (Building) of the City’s Master
Fee Schedule as set forth in Exhibit 1 to this Resolution.
Presented byApproved as to form by
Kelly G. Broughton, FASLAGlen R. Googins
Director of Development ServicesCity Attorney
Exhibit 1
Exhibit 1
Exhibit 1
Exhibit 1
Exhibit 1
Exhibit 1
March 26, 2019File ID: 19-0060
TITLE
A.RESOLUTION OF THE CHULA VISTA HOUSING AUTHORITY AUTHORIZING THE EXECUTION AND
DELIVERY OF TAX-EXEMPT MULTIFAMILY HOUSING REVENUE NOTESIN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $21,400,000 FOR THE PURPOSE OF FINANCING THE
ACQUISITION AND REHABILITATION OF ST. REGIS PARK APARTMENTS MULTI-FAMILY RENTAL
HOUSING PROJECT;APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF ANY
AND ALL DOCUMENTS NECESSARY TOEXECUTE AND DELIVERTHE NOTES, COMPLETE THE
TRANSACTION AND IMPLEMENT THIS RESOLUTION, AND RATIFYING AND APPROVING ANY
ACTION HERETOFORE TAKEN IN CONNECTION WITH THE NOTES
B.RESOLUTION OF THE CHULA VISTA HOUSING AUTHORITY, IN ITS CAPACITY AS THE SUCCESSOR
HOUSING ENTITY WITHIN THE MEANING OF HEALTH AND SAFETY CODE SECTION 34176;
APPROVING THE ASSUMPTION OF EXISTING HOUSING AUTHORITY LOAN TOTALING
APPROXIMATELY $1,275,778 IN ACCRUED INTEREST WITH AMENDED LOAN TERMS, AND
AUTHORIZING THE DIRECTOR TO EXECUTE ALL RELATED LOAN DOCUMENTS BY AND BETWEEN
THE CHULA VISTA AND ST. REGIS PARK CIC, LP FOR ST. REGIS PARK MULTI-FAMILY AFFORDABLE
RENTAL APARTMENTS
RECOMMENDED ACTION
Authority adopt the resolutions.
SUMMARY
On July 17, 2018, the City Council and the Chula VistaHousing Authority (“CVHA”) approved the use of
Multifamily Housing Bonds/notes, with non-competitive four percent tax credits, to finance the acquisition
and rehabilitation of existing affordable units at St. Regis Park Apartments, totaling 119 affordable rental
units for very low-and low-income families and 1 manager’s unit (the “Project”) by St. Regis Park CIC, LP
(“Developer”). The Project is located in Southwest Chula Vista at 1025 Broadway. The rehabilitation would
improve the property and extend the term of the affordable rents for 55 years (currently scheduled to
expire in 2052). At this time, the CVHAis asked to authorize theexecution and delivery of multifamily
housing revenuenotesfor the Project based upon award of $21,400,000 in bond allocation from the
California Debt Limit Allocation Committee (“CDLAC”) with a financing structure as described in this
report.
v.001 Page|1
ENVIRONMENTAL REVIEW
The Project qualifiesfor a Class 1 Categorical Exemption pursuant to Section 15301 Existing Facilities of
the California Environmental Quality Act State Guidelines because it involves the rehabilitation of existing
facilities which would not result in an expansion of the existing uses.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
The Housing Advisory Commission was not able to consider a recommendation due to a lack of quorum.
DISCUSSION
On July 17, 2018, the Chula Vista City Council (CC ResolutionNo. 2018-144) and the Chula Vista Housing
Authority(CVHA ResolutionNo. 2018-006),respectively, approved taking certain preliminary
authorization steps to issue up to $25,000,000 of tax-exempt Multifamily Housing Revenue Bonds/Notes
(Notes), along with non-competitive four percent tax credits, to finance the acquisition and rehabilitation of
existing affordable units at St. Regis Park Apartments, totaling 119 affordable rental units for very low-and
low-incomefamilies and 1 manager’s units (Attachment 1: Locator Map).
Subsequently onJanuary 18, 2019, the Developer for St. Regis Park Apartments applied for a bond
allocation up to $21,400,000. The California Tax-Credit Allocation Committee (TCAC) and CDLAC approved
an allocation of 4 percent tax credits and tax-exempt bonds onMarch 20, 2019. The Developer proposes to
issue the bonds/notes through a tax-exempt private placement bond issuance. Thebond/notes will meet
all of the requirements of the CVHA Multi-Family Housing Revenue Bond Program Policy. The CVHAwill
be the conduit issuer for the bonds/notes. The tax-exempt bond allocation and tax credit contributions will
be used to substantially finance the Project. In addition to the tax-exemptobligations being issued by the
Housing Authority,the Developerhas requested the CVHAconsider its existing loansfor the Project.The
outstanding balance of such loans is approximately $2,662,930, in principal ($1,387,152) and accrued
interest ($1,275,778). Developer is proposing to pay the principal loan balance, with the Project assuming
the existing accrued interest as continued financial assistance to the Project.
The Development Team
The Developer, Chelsea Investment Corporation (CIC),is a for-profit affordable housing developer. The
project is currently owned by St. Regis Park, L.P., with CIC as the Administrative General Partner. At
transaction closing, a new limited partnership, St. Regis Park CIC, LP, will be created to acquire, rehabilitate
and operate the Project. CIC will continue to serve as the manager of the Administrative General
Partnership, retaining a level of ownership and handling management of the properties. Pacific Southwest
Community Development Corporation will continue to serve as the managing general partner. Raymond
James will be the new tax credit Investor Limited Partner. Please refer to Table I below for the Ownership
Structure and Table II for the Development Team.
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Table I–Ownership Structure
OwnerOwnerNewly Proposed
DescriptionCurrent Owner
InterestInterestOwners
Pacific Southwest .01%Pacific Southwest
Managing General CommunityCommunity
00.05%
PartnerDevelopmentDevelopment
CorporationCorporation (PSCDC)
Chelsea Investment 5%Chelsea Investment
Administrative General
00.05%Corporation(CIC), Corporation(CIC),
Partner
managermanager
Edison Housing 94.99%
Investor Limited Partner99.9%Raymond James
Capital Investment
CIC will be responsible for managing the rehabilitation of the property through completion and cost
certification, with a general contractor overseeing construction. CIC will continue to be responsible for the
ongoing preparation and oversight of annual property-specific budgets, marketing, leasing, property
management and maintenance, income-qualification of residents, annual reporting to investor and lender,
payments to lenders, and provision ofresident services. ConAm Management Corporation Property
Management will serve as the day to day property manager.
CIC has developed over 100 affordable communities throughout California with most of theircommunities
within San Diego County. Their communities include special needs housing, senior housing, rural housing,
and mixed-use developments. St. Regis Park Apartments represents one of seven bond and tax credit
financed affordable housing developments within CIC’s portfolio in Chula Vista. Other CIC affordable
housing developments in the City of Chula Vista include:
Rancho Buena Vista Eastlake
Villa Serena Apartments Sunbow
Landings I Winding Walk
Landings IIWinding Walk
DuettaOtay Ranch Millenia
VoltaOtay Ranch Millenia
Table II-Development Team Summary
RoleFIRM/CONTACT
OwnershipSt Regis Park CIC, LP
Managing General Partner (.01 percent)Pacific Southwest CDC
Tax Credit Investor/Limited Partner (99.99 percent)Raymond James
Property ManagementCon Am
Tax Credit InvestorRaymond James
Lender/PurchaserCiti Community Capital or another affiliate
Basis Architecture and Consulting, Inc
Architect
Emmerson Construction
General Contractor
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The Project
St. Regis Park Apartments is an existing project located in southwest Chula Vista at 1025 Broadway on a
4.31-acre site. The Project provides 118 restricted rental units and 1 unrestricted manager unit consisting
of 5 one-bedroom units, 109 two-bedroom units, and 5 three-bedroom units.
The Project is within walking and biking distance to recreational and education opportunitiesand
neighborhood services and has direct access to public transportation. Nearby amenities and services
include:
Nearby amenities and services include:
0.01 miles to MTS Bus Route 932
Less than ½ mile from grocery store and other shopping.
Less than ½ mile from Harborside Park and Elementary
The Project’s ideal location provides a convenience for residents as it supports a healthy living
environment and is competitive for financing programs.
Building Conditions/Proposed Rehabilitation Work
Given the age and the desire to preserve the affordability, the Developeris proposing the acquisition and
rehabilitation of the Project using tax-exempt note financing and 4 percent tax credits to ensure continued
long-term use and viability. Rehabilitation work will be in compliance with the tax credit financing,which
specifies minimum energy efficiency standards for rehabilitation projects ofat least a 10 percent post-
rehabilitation improvement in energy efficiency over existing conditions and the provision of 10 percent of
units required as fully accessible and 4 percent of units with accommodations for visual and hearing
impaired compliant with the Americans with Disabilities Act (ADA).
The scope of work will address the immediate physical needs and will extend the useful life of the building
systems, reduce operating costs and improve energy efficiency. Building exterior renovations will include
roof replacement, new doors and windows, stucco siding repair, wrought iron handrail replacement,and
fresh paint. Interior renovations will include upgrades to the laundry facilities, leasing office,and common
restrooms. Individual apartment units will be updated with new appliances, countertops, cabinets,
plumbing fixtures, flooring, doors, shelves, ADA-compliant tub enclosures and electrical upgrades. Site area
renovations will include upgrades to landscaping, drainage, ADA-path-of-travel, fencing, concrete and
pavement repairs, parking area re-striping for ADA compliance, repairs to the swimming pool including an
ADA-compliant gate, new signage and mailboxes.
The current estimate of rehabilitation costs is $7,803,791. Based on 119 units, this equates to an average of
$65,578per unit. This figure includes the estimated costs to address the scope of work proposed, general
contactor’s profit/overhead/general requirements, and a construction contingency of 11 percent of direct
costs.
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Relocation
The Developerdoes not anticipate permanent relocation of tenants. The rehabilitation budget will include
$686,000($5,765/unit) for temporary relocation costs. Tenants may be temporarily relocated to other
units on-site for approximately a five to ten days period.
Affordable Housing
The Project proposes to maintain the existing income and rent restrictions for 55years from the effective
date of the bond financing agreements, exceeding the existing affordability period endingin2052(extends
the current affordability period by 22 years). Twenty-four (24) units are currently restricted as affordable
for very low-income households at 50 percent of Area Median Income (AMI)andninety-four(94)low-
incomehouseholds at 60 percent of AMI, see Table III. One unit is reserved for a resident manager. These
income and rent restrictions will be outlined within thebond regulatory agreement to be recorded against
the property.
Table III–Affordability & Monthly EstimatedRents
Target Income Group
No. of Units
Unit Description% of AMIAnnual IncomeProposed Rents
1 Bd/1 Ba150%$43,800$ 864
1Bd/1 Ba460%$52,600$1,048
2 Bd/1Ba2250%$48,650$ 954
2 Bd/1Ba8760%$58,400$ 1,158
3 Bd/1Ba150%$52,550$ 1,016
3Bd/1Ba360%$63,100$ 1,237
MGR1N/AN/AN/A
Total119
Financing Structure
The Tax-Exempt Multi-Family Revenue Bonds and Low-incomeHousing Tax Credit financing will support
themajority of the estimated $37.69million total development cost of the Project ($316,738/unit). A
maximum of $21.4million in tax exempt bonds/noteswill be privately placed with Raymond James. It is
anticipated that the bonds/noteswill be used for both construction and permanent financing of the Project.
Financing will include a combination of additional sources as described in Table IV, inclusive ofan
outstanding CVHAloan from the original development of the Project. The developers’ current pro forma is
included as Attachment 2.
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Table IV –Estimated Sources and Uses of Permanent and Construction Financing
SourcesAmountsPer Unit
Permanent Loan$11,135,800
LIHTC Equity ($0.900) Per Credit)$9,894,788
Subtotal - $21,030,588$176,728
Deferred Developer Fee$1,846,162
Seller Carry Back Loan $12,550,000
Net Income from Operations $581,686
City-HA RDA (low-mod accrued interest loan)$1,275,778
Bond Deposit $100,000
Soft Loan Deferred Interest $307,638
Subtotal-$16,661,264
TOTAL$ 37,691,852$316,738
UsesAmountsPer Unit
Acquisition (Land and Building) $20,424,770
Rehabilitation (Including Contingency) $7,803,791
Subtotal –$ 28,228,561$237,215
Architecture &Engineering$114,036
Financing Fees & Interest $3,104,877
Legal Fees$240,000
Reserves$331,807
Development Impact and Permit Fees $68,000
Developer Fee$4,168,320
Misc. (Acctg. Marketing, Reports, Studies, Etc.)$1,317,849
Contingency$118,401
Subtotal-$9,463,290
TOTAL$37,691,852*$316,738
*rounded up
The CVHA’s continued financial assistance to fill the financing gap will be necessary to demonstrate local
commitment and leveraging of local funds. The CVHA commitment averages $10,721per unit. This cost is
consistent with the per unit subsidy for this type of development in high-cost markets. Given that this
Project also restricts approximately 24 or 20 percent of the units to residents at 50 percent of AMI, the
deep affordability of the Project increases the need to keep the public subsidy in the Project. The financial
assistance is necessary to provide for affordable rents and to lower development costs. The Project cannot
be acquired or rehabilitated without such assistance. For each dollar of CVHAsubsidy, approximately $31
of other private/public investmentis leveraged.
In accordance with theCHVA's approval, if granted, with terms reviewed by the City Attorney’s office
satisfactory to the CVHA, a new regulatory agreement with an extended term of affordability, Deed of Trust
and an Amended and Restated Promissory Notealong with an Assignment, Assumption, and Consent
Agreementwill be signed, to secure the CVHAloan (see Attachments 3-5). Staff recommends the following:
Page|6
CVHAauthorize the assumption of the existing CVHAloan balance, with the principalbalance being
paid in full at closing; and
Assume the accrued interest with a balance of approximately $1,275,778as part of this financial
package; and
Revise the residual receipt calculation, after the deferred developer fee is paid; and
Authorizethe CVHA Director to execute all necessary documents to secure the loans.
Consistent with other loans within the CVHA’s and City’s affordable rental housing portfolio, the standard
loan terms will apply:
Term of the loans shall be fifty-five (55) years;and
Outstanding balances shall all accrue interest at 3 percent per annum; and,
Payment on the loans shall be based upon residual receipts.
Development Cost Key Performance Indicators
Staff has identified development cost performance indicators, which were used to evaluate the proposed
development. The key performance indicators listed in Table Vare commonly used by real estate industry
professionals and affordable housing developers.
Table V–Estimated Costs & Key Performance Indicators
Estimated Costs per
Estimated Costs per
Total Estimated CostsNet Rentable
Unit
Building Sq Ft
1
$196
Acquisition
$20,424,770$171,637
2
$75
Construction
$7,803,791$65,578
TOTAL Hard Costs$ 28,228,561$ 237,215$271
$91
Soft Costs$9,463,291$79,523
$362
$37,671,852$316,597
TOTAL COSTS
TOTAL Dwelling Units (DUs)
119
TOTAL Gross Bldg Sq Ft153,162
Net Rentable Bldg Sq Ft104,150
Proposed Housing Bonds/Notes
Multifamily housing financing often involves the issuance of tax-exempt Multifamily Housing Revenue
Bonds/Notes (Notes) on behalf of private developers of qualifying affordable rental apartment projects.
1
Acquisition costs are based upon an Appraisal Report as of 05/10/2018 indicating a$21,300,000 market value of the fee simple
estate assuming restricted rents and $2,600,000 hypothetical value of underlying land as encumbered by a Regulatory Agreement.
Hypothetical conditions are specified by TCAC appraisal regulations for St. Regis Apartments.
2
Includes the estimated costs to address the scope of work proposed, temporary relocation, general contractor’s
profit/overhead/general requirements, and a construction contingency.
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The advantages of tax-exempt financing to developers include below-market interest rates, longer loan
terms,and access to Low-incomeHousing Tax Credits (Tax Credits) –features that are not available with
typical conventional multifamily housing mortgage loans.
Utilizing the CVHA’s tax-exempt borrowing status, the lower tax-exempt interest rate financing (and
makingFederal four percent Tax Credits available) is passed on to developers of affordable rental housing.
The CVHA’s ability to issue tax-exempt bonds/notesis limited under the U.S. Internal Revenue Code. To
issue tax-exempt bonds/notesfor a development, the CVHAmust first submit an application to the CDLAC
for atax-exemptbond/noteallocation. Prior to submitting applications to CDLAC, developments are
brought before the City Council and the CVHA. CVHAbond inducement resolutions must be obtained prior
to a CDLAC application submittal. A Tax Equity and Fiscal Responsibility Act (TEFRA) City Council
resolution must be secured approximately 30 days before the CDLAC allocation meeting. These CityCouncil
and CVHAactions were completed for the Project as of July 17, 2018.
On January 18, 2019, the Developerapplied to CDLAC for a $21,400,000 tax-exempt bond/noteallocation
and applied to TCAC for a Tax Credits allocation. CDLAC and TCAC allocations approvals were received on
March 20, 2019. UponCVHAapproval, the Bond/NotesIssuance and Loan Closing isscheduled for April
2019,with construction work scheduled to beginshortly thereafterin April 2019 and completed by
December 2019.
The Notes will be used for acquisition and rehabilitation financing. The Noteswill meet all requirements of
the CVHA’s Multifamily Housing Revenue Bond Program policy, as well as State and Federal tax law.
Tax-Exempt DebtStructure
The tax-exempt debt to be issued by the CVHAis known as a “Government Lender Note.” Citi Community
Capital or another affiliate of Citibank, N.A. (“Citibank”) will loan the CVHAthe funds needed to finance the
project. The CVHA will simultaneously lend the Developer the proceeds of theloan to finance the project.
This structure is known as a “back to back tax-exempt loan structure.”
The CVHA is acting as a conduit in this structure. Therefore, its obligation to repay its loan is limited to the
proceeds of the loan it makes to the Developer. This structure does not create any unusual economic or
legal risk for the CVHA. The CVHAis being asked to authorize the execution and delivery of up to
$21,400,000 in two note series (Series 2019 B-1 and B-2) to be structured as privately placed notes to
finance the acquisition and rehabilitation costs of the Project. The tax-exempt debt, in the form of theNotes,
will be acquiredthrough a private placementby Citibank. Through a back to back tax-exempt loan
structure, Citibank will provide tax-exempt construction and permanent financing for the Project.
Citibank is considered a “qualified institutional buyer.” At closing, Citibank will sign an “Investor’s Letter”
certifying, among other things, that it isacquiringthe Notesfor its own account and not for public
distribution. Because the Notesare being acquired through a private placement, an Official Statement will
not be necessary. In addition, the Bonds will not be subject to continuing disclosure requirements, nor will
they be credit enhanced or rated. If there is an unexpected proposed transfer of the Series 2019B-1 and B-
2 Notes, then any subsequent proposed Noteholder must comply with the CVHA’s Multifamily Housing
Revenue Bond Policy. Moreover, any subsequent Noteholder would be required to represent to the CVHA
that they are a qualified institutional buyer or accredited investor who is acquiring theNotesfor
Page|8
investment purposes and not for resale, and that they have made due investigation of any material
information necessary in connection with a decision to purchase the Bonds.
Under the private placementfor this transaction, Citibank will make a loan to the CVHA pursuant to the
terms of the Funding Agreementamong Citibank, the CVHA, and its Fiscal Agent. Theloan made by
Citibank to the CVHA (Funding Loan) will be evidenced by the Note, which will obligate the CVHA to pay
Citibank the amounts it receives from St. Regis Park CIC, LP (as “Borrower”), as described below.
The CVHA and the Borrower will enterinto a Borrower Loan Agreement pursuant to which the proceeds of
the Funding Loan will be advanced to the Borrower. In return, the Borrower agrees to pay U.S. Bank
National Association, acting as the CVHA’s Fiscal Agent (“Fiscal Agent”) amounts sufficient for the Fiscal
Agent to make payments on the Notes. The CVHA’s obligation to make payments on the Notes is limited to
the amounts the Fiscal Agent receives from the Borrower under the Borrower Loan Agreement, and no
other funds of the CVHA are pledgedto make payments on the Notes. The transfer of the Notes to any
subsequent party are required to comply with the CVHA’s Bond Policy. The following documents will be
executed on behalf of the CVHA with respect to the Notes: Funding Loan Agreement (Attachment 6),
Borrower Loan Agreement (Attachment 7), Regulatory Agreement (Attachment 8), and other ancillary loan
documents.
Based upon instructions contained in the Funding Loan Agreement, Citibank will disburse Note proceeds
for eligible costs and will, pursuant to an assignment from the CVHAin the Funding Loan Agreement,
receive payments from the Borrower via the Fiscal Agent. Rights that are assigned to Citibank include the
right to collect and enforce the collection of loan payments, monitor project construction and related
budgets, and enforce insurance and other requirements. These rights will be used by Citibank to protect its
financial interests as the holder of the Notes.
At this time, the CVHAis being asked to approve in substantial final form all documents related to the
execution and delivery of the Notes. Notedocuments presented for the CVHA’s consideration have been
prepared by Stradling Yocca Carlson & Rauth, serving as specialcounsel for the CVHA.
Financial Advisor’s Feasibility Analysis
Ross Financial is the CVHA’sFinancial Advisorfor this transaction. After evaluating the terms of the
proposed financing and the public benefits to be achieved, it is the Financial Advisor’s recommendation
that the CVHAproceed with execution anddelivery of the Notes. The Financial Advisor’s analysis and
recommendation is included as Attachment 9.
Financial Disclosure
Government Code Section5852.1 requires that the governing body of a public body obtain and disclose
certain information about afinancing, including conduit revenue obligations, prior to authorizing the
issuance of bonds with a term of greater than 13 months. Such information is to be based on good faith
estimates of the following information made available in a meeting open to the public.Attachment10,
Public Disclosures Relating to Conduit Revenue Obligations, satisfies this requirement.
Page|9
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the CVHAmembers and has found no property holdings within
1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does
not present a disqualifying real property-related financial conflict of interest under California Code of
Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code
§87100, et seq.).
Staff is not independently aware, and has not been informed by any CVHAmember, of any other fact that
may constitutea basis for a decision-maker conflict of interest in this matter.”
CURRENT-YEAR FISCAL IMPACT
The NoteFinancing is a self-supporting program with the borrower responsible for the payment of all costs
of issuance and other costs of the Notes. The CVHAwill receive compensation for its services in execution
and delivery of the Notesby charging an origination fee equal to 20 basis points (0.20%) of the total
original principal amount of the Notes, with a minimum fee of $15,000. The originationfee to bepaid to the
CVHAby the Developeris estimated at $42,800(.20% of $21.4M), with the final amount determined at
transaction closing.The Developer is responsible for payment of all costs under the financing, including
the Special Counsel and Financial Advisor Fees.
ONGOING FISCAL IMPACT
The Multifamily Housing Revenue Bond program is self-supporting. Staff costs associated with monitoring
compliance of the regulatory restrictions and administration of the outstanding Noteswill be reimbursed
from an annual administrative fee of $17,000 paid to the CVHAby the Developer. The Notes would not
constitute a debt of the City or financing obligate the City, the CVHA because security for the repayment of
the Notes will be limited to specific private sources of the development. Neither the faith and credit not the
taxing power of the City or the CVHA will be pledged to the payment of the Notes. The Developer is
responsible for payment of all costs under the financing, including the CVHA’s annual administrative fee.
ATTACHMENTS
1.Locator Map
2.Project Pro Forma
Housing Authority LoanDocuments-Successor Housing Agency Loan (RDA-LOW MOD)
3.Declaration of Covenants, Conditions and Restrictions
4.Deed of Trust
5.Amended and Restated Promissory Note& Assignment, Assumption, and Consent Agreement
Bond Loan Documents
6.Funding Loan Agreement
7.Borrower Loan Agreement
8.Bond Regulatory Agreement and Declaration of Restrictive Covenants
9.Financial Advisor’s Feasibility Analysis
Other
10.Public Disclosure
Staff Contact: Jose Dorado, Senior Management Analyst, Chula Vista Housing Authority
Page|10
HA RESOLUTION NO.
RESOLUTION OF THE CHULA VISTA HOUSING AUTHORITY
AUTHORIZING THE EXECUTION AND DELIVERY OF TAX-
EXEMPT MULTI-FAMILY HOUSING REVENUE NOTESIN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $21,400,000
FOR THE PURPOSE OF FINANCING THE ACQUISITION AND
REHABILITATION OF THEST. REGIS PARKAPARTMENTS
MULTI-FAMILY RENTAL HOUSING PROJECT; APPROVING AND
AUTHORIZING THE EXECUTION AND DELIVERY OF ANY AND
ALL DOCUMENTS NECESSARY TO EXECUTE AND DELIVER
THE NOTES, COMPLETE THE TRANSACTION AND IMPLEMENT
THIS RESOLUTION, AND RATIFYING AND APPROVING ANY
ACTION HERETOFORE TAKEN IN CONNECTION WITH THE
NOTES
WHEREAS, pursuant to the Housing Authorities Law, Chapter1 of Part2 of Division24 of
the California Health and Safety Code (“Housing Authorities Law”), the Chula Vista Housing
Authority, a public body corporate and politic organized, existing and operating pursuant to the
Housing Authorities Law, the Chula Vista Housing Authority (the “Authority”) is empowered to
execute and deliver obligationsforthe purpose of financing the acquisition, construction,
rehabilitation, refinancing, development, and operation of multifamily rental housing; and
WHEREAS, St. Regis Park CIC, LP, a California limited partnership (the “Borrower”),
intends to acquire and rehabilitatea 118-unit plus one manager’s unit multifamily rental housing
project located at 1025 Broadwayin Chula Vista, California known as the “St. Regis Park
Apartments” (the “Project”); and
WHEREAS, the Borrowerhas requested Authority to execute anddelivertax-exempt
multifamily housing revenue notesin one or more series(the “Notes”), and to loan the proceeds of
the Notesto the Borrowerto finance the acquisition, rehabilitation and equipping of the Project;and
WHEREAS, the aggregate principal amount of the Notesshall not to exceed $21,400,000;
and
WHEREAS, Authority, by action of its Board of Commissioners (the “Board”), desires to
assist the Borrowerand to increase the supply of affordable housing by making the units in the
Project available for low and very low income persons or families, and in order to accomplish such
purposes it is desirable for Authority to provide for the execution and Deliveryof the Notesand
financing of the Project; and
WHEREAS,the Notes will be executed and deliveredpursuant to the Funding Loan
Agreement (the “Funding Loan Agreement”), by and between the Authority andU.S. Bank National
Association, as fiscal agent(the “Fiscal Agent”), and the proceeds of the Noteswill be loaned to the
Borrowerpursuant tothe Borrower Loan Agreement, between the Authority and the Borrower (the
Borrower Loan Agreement”);
WHEREAS, Citibank, N.A. (“Citibank”) will act as the Funding Lender under the Funding
Loan Agreement;and
WHEREAS, the Authority will loan the proceeds of the Notesto the Borrower and the
Borrower will use the proceeds of the Notesexclusively to finance the costs of acquisition,
rehabilitationand equipping of the Project and the costs of executing and delivering the Notes; and
WHEREAS, Government Code Section 8869.85 requires a local agency to file an
application with the California Debt Limit Allocation Committee (“Committee”) prior to the issuance
of tax-exempt multifamily housing revenue bonds and the Authority has filed such an application;
and
WHEREAS, the Committee has allocated to the Project $21,400,000 of the State of
California 2018State ceiling for private activity bonds under Section146 of the Internal Revenue
Code of 1986; and
WHEREAS, it is the intent of the Authority to enter into bond documentation to govern the
Notes being executed and delivered(collectively, the “Transaction Documents”), including: (1) the
Funding Loan Agreement; (2) the Borrower Loan Agreement; and (3) a regulatory agreement and
declaration of restrictive covenants, by and betweenthe Authorityandthe Borrower(the “Regulatory
Agreement”); and
WHEREAS, it appears that each of the documents and instruments described herein now
before this meeting is in a substantially appropriate form and is an appropriate instrument to be
executed and delivered for the purposes intended.
NOW, THEREFORE, THE BOARD OF COMMISSIONERS OF THE CHULA VISTA
HOUSING AUTHORITYDOES HEREBY RESOLVE, ORDER AND DETERMINE AS
FOLLOWS:
1.Authorization of Notes. In accordance with the Housing Authorities Law and
pursuant to the LoanAgreement, Authority authorizes the execution and delivery of notesdesignated
as “Chula Vista Housing AuthorityMultifamily Housing Revenue Notes(St. Regis Park Apartments)
2019 Series B-1 and B-2”(collectively, the “Notes”), with an interest rate or rates, a maturity date or
dates and other terms as provided in the Funding Loan Agreementas finally executed for the Notes.
The Notesshall be in substantially the form set forth in and otherwise in accordance with the
Funding Loan Agreement, and shall be executed on behalf of Authority by the manual or facsimile
signature of the Chair of the Board of Commissioners of the Authority (the “Chair”) or the Executive
Director of the Authority (the “Executive Director”), and the Notes shall be attested by the manual or
facsimile signature of the Secretary of the Board of Commissioners of the Authority(“Secretary”).
2.Approval of Transaction Documents. The form of each of the Transaction
Documents, in substantially the form on file with the Secretary, is hereby approved. The Chair, the
Executive Director, and their authorized designee(s) (each, an “Authorized Officer”) are authorized
to execute, and the Secretary is authorized to attest, each of the Transaction Documentsin
substantially said form, with such additions thereto and changes therein as the Authorized Officer
may approve or recommend in accordance with Section 4hereof. The date, maturity date or dates,
interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of
execution, place of payment, terms of redemption, and other terms of the Notesshall be as provided
in the Funding Loan Agreementas finally executed.
3.Approval of Loan Documents. Any Authorized Officer is authorized to execute and
deliver, and the Secretary is authorized to attest, any and all certificates, agreements and other
2
documents ancillary to the Transaction Documentsin the formsapproved by the City Attorney, as
general counsel to Authority (“General Counsel”),and by special counsel and bond counsel to the
Authority and City on these matters, Stradling Yocca Carlson & Rauth (together, “Special Counsel”).
4.Approval of Changes to Documents. Any Authorized Officer executing a document
approved herein, in consultation with General Counsel and Special Counsel, is authorized to approve
and make such modifications, changes or additions to Transaction Documentsor other documents as
may be necessary or advisable, and the approval of any modification, change or addition to any of the
aforementioned agreements shall be evidenced conclusively by the execution and delivery thereof by
such Authorized Officer and approval as to form by General Counsel and Special Counsel. Further,
any Authorized Officer, acting alone, is authorized to execute any assignment agreement related to
any mortgage note, mortgage, deed of trust or other document related to the loansmade to the
Borrowerfrom the proceeds of the Notes.
5.Actions Ratified and Authorized. All actions heretofore taken by the officers,
employees and agents of Authority with respect to the execution and deliveryof the Notesare
approved, confirmed and ratified, and the officers, employees and agents of Authority are authorized
and directed, for and in the name and on behalf of Authority, to do any and all things and take any
and all actions and execute and deliver any and all certificates, agreements and other documents,
including, but not limited to, those documents described in the Transaction Documentsand the other
documents herein approved, which they, or any of them, may deem necessary or advisable in order to
consummate the lawful executionand delivery of the Notesand to effectuate the purposes thereof
and of the documents herein approved in accordance with this resolution and resolutions heretofore
adopted by the Board. In the event that the Secretary is unavailable to sign any document related to
the Notes, any Deputy Secretary of the Authority may sign on behalf of the Secretary.
6.Further Consents, Approvals and Other Actions. All consents, approvals, notices,
orders, requests and other actions permitted or required by any of the documents authorized by this
Resolution or otherwise appropriate in the administration of the Notesand the lending program
financed thereby, including without limitation any of the foregoing that may be necessary or
desirable in connection with any amendment of such documents, any transfer of the Project, any
substitution of security for the Notes, or any prepayment of the Notesmay be taken or given by the
Chairor theExecutive Director, and theChairor theExecutive Directorare hereby authorized and
directed to give any such consent, approval, notice, order or request and to take any such action
which such officer may deem necessary or desirable tofurther the purposes of this Resolution.
7.Conflicting Resolutions Repealed. As to the Notes, all prior resolutions or parts
thereof, if any, in conflict herewith are, to the extent of such conflict, repealed.
8.Severability. If any section, paragraph or provision of this Resolution shall be held to
be invalid or unenforceable for any reason, the invalidity or unenforceability of such section,
paragraph or provision shall not affect any remaining sections, paragraphs or provisions of this
Resolution.
9.Effectiveness of Resolution and Date Thereof. This Resolution shall take effect upon
its adoption.
10.Certification. The Secretary shall certify to the passage and adoption of this
Resolution.
3
Presented by Approved as to form by
Kelly G. Broughton, FASLAGlen R. Googins
Director of Development Services/City Attorney/Legal Counsel
Assistant Director
4
HA RESOLUTION NO. __________
RESOLUTIONOFTHECHULAVISTAHOUSING
AUTHORITY, IN ITS CAPACITY AS THE SUCCESSOR
HOUSING ENTITY WITHIN THE MEANING OF HEALTH
AND SAFETY CODE SECTION 34176;APPROVING THE
ASSUMPTION OF EXISTING HOUSING AUTHORITY LOAN
TOTALING APPROXIMATELY $1,275,778IN ACCRUED
INTERESTWITH AMENDED LOAN TERMS, AND
AUTHORIZING THE DIRECTOR TO EXECUTE ALL
RELATED LOAN DOCUMENTS BY AND BETWEEN THE
CHULA VISTA HOUSING AUTHORITY AND ST. REGIS
PARK CIC, LP FOR ST. REGIS PARK MULTI-FAMILY
AFFORDABLE RENTAL APARTMENTS
WHEREAS,St. Regis Park, L.P., a California Limited Partnership, (the “Property Owner
”)and the Chula Vista Housing Authority(“Housing Authority”)as the Successor Housing
Entity (collectively, the “Lender”) are all current parties to that certain Loan Agreement and
Related and Restricted Covenants dated as of May 23, 2000, and Affordable Housing Agreement
recorded against a 119unit multifamily rental developmentwith twenty-four (24) units
affordable to very low income households at 50 percent of the Area Median Income (AMI),
eighty-four (84) units affordable to low income households at 60 percent of the Area Median
Income (AMI), ten (10) units at 120% of the Area Median Income,and one (1) unrestricted for a
resident manager,located at 1025 Broadway in the City of Chula Vista, known as St. Regis Park
Apartments, (“St. Regis”)in the Office of the Recorder of the County of San Diego on June 22,
2000, as Document 2000-0331275(“Affordable Housing Agreement”);
WHEREAS, Property Owner received an acquisition and rehabilitation loan in the
amount of one million three hundredeighty-sevenone hundred fifty-two thousand dollars
($1,387,152) from HousingAuthority’s Low and Moderate Income Housing Fund (the "Housing
Fund") with an annual interest termat sixpercent (simple interest)to be paid from 90percent of
residual receipts.
WHEREAS, the Property Ownerexecuteda Loan Agreement and Related Covenants,
and other associated loan documents(Deed of Trust, Promissory Note, Affordable Housing
Agreement), to assist with the financing gap for the acquisition and rehabilitation of St. Regis
Park (previously known as Pear Tree) multi-family apartments;and
WHEREAS, Property Owner will sell the Property to a new Limited Partner, St. Regis
Park CIC, L.P. (Developer) that proposesthe acquisition and rehabilitation of St. Regis Park,
L.P., (the“Project”) utilizing upto $25,000,000 of tax-exempt MultifamilyHousing Revenue
Bonds (Bonds)issued by the Housing Authorityand companion non-competitive four percent
tax credits; and
WHEREAS, St. Regis Park CIC, L.P. is requesting assistance with the financing gap for
the acquisition and rehabilitation of the Project, assuming the accrued interest on the existing
loan, with payment of the principal balance of the existing loan, amendthe interest rate to three
percent (3%) and a revise residual receipt calculation; and
WHEREAS, the Lender’s evaluation of the development budget, operating pro forma,
and source and uses for the Project determined that the assumption by the Developer of the
existing development loansof Lenderis appropriate and necessary in order to make the Project
feasible; and
WHEREAS, Project will continue to make available housing affordable for very low and
low income persons of the neighborhood and the City for an additional fifty-five (55) years; and
WHEREAS, Lenderwishingto assist with the financing gap for the acquisition and
rehabilitation of the Projectand proposesto enter into new loan documents and regulatory
agreement with Developer to be recorded as encumbrances to the Project for the balance of
Lender’s outstanding development loans from its Low and Moderate Income Housing funds,
pursuant to which the Developer would agree to acquireand operate the Project in accordance
with the requirements of the Lender’s amendedcovenantsandloan documents. The amended
loan documents and covenantswillrestrict occupancy of 119of the apartment units in the
Project to very-low(24 units)and low-income households (94 units) at an affordable housing
cost, plus one (1) unrestricted apartment unitforresident manager atSt. Regis Apartments; and
WHEREAS, in accordance with the requirements of CEQA, the Development Services
Directorhas determined that the proposed project qualifies for a Class 1 Categorical Exemption
pursuant to Section 15301 Existing Facilities of the California Environmental Quality Act State
Guidelines becauseit involves the rehabilitation of existing facilities which would not result in
an expansion of the existing uses; and,
NOW, THEREFORE, BE IT RESOLVED by the Housing Authority as Successor
HousingAgency of the City of Chula Vista, that it does hereby approve execution and
recordation of all loan documents and regulatory agreements for the assumption of the
outstanding loan balance that includesaccrued interest to date, from the Housing Authority’s
Low and Moderate Income Housing Set-Aside fund to Developer for the acquisition and
rehabilitation of a total of 119residential units forSt. Regis Park Apartments.
BE IT FURTHER RESOLVED by the Chula Vista Housing Authority as Successor
Housing Entity, that it directs staff to prepare all necessary documents and any actions, for the
assumption of the outstanding development loanand authorizing the Director, or his designee to
execute all associated loan documents, and regulatoryagreement, consistentwith the City’s
standard documents as reviewed by the City Attorney’s office, necessary for the financing of the
proposed acquisition and rehabilitationof Project and, at minimum, subject to the following
terms and conditions:
1.Developer shall secure all other financing necessary for the acquisition and development
of the Project.
Resolution No.
Page 3
2.The loan repayment will be secured by a Deed of Trust and Amended and Restated
Promissory Note for the property in favorof the Housing Authority as Successor Agency
and City of Chula Vista and recorded against the property.
3.The term of the Lenderloansshall be fifty-five (55) years.
4.The outstanding balancesshallaccrue interest ata minimum of3 percent per annum.
5.Payment on the Lender loansshall be made from ninety percent (90%) of the residual
receipts of the Project.
6.Developer will be required to operate the Project consistent with the Regulatory
Agreement required by the Project's bond and tax credit financing, the Lender's
financing, the covenants imposed by these Agreements, and any other project
requirements.
7.This approval remains subject to additional approval by Housing Authority and City
Council, in which Housing Authority and City Council retains its soleand unfettered
discretion to approve, deny, or to take alternative actions, of, but not limited to, the final
approval of multi-family mortgage revenue bond financing for the Project.
Presented by Approved as to form by
Kelly G. Broughton, FASLAGlen R. Googins
Director of Development Services/City Attorney/Legal Counsel
Assistant Director
0.125%
0.000%
ACQUISITION
REHABILITATION
RELOCATION
ARCHITECTURAL FEES
SURVEY & ENGINEERING
CONTINGENCY COSTS
CONSTRUCTION PERIOD EXPENSES
PERMANENT FINANCING EXPENSES
LEGAL FEES
CAPITALIZED RESERVES
REPORTS & STUDIES
OTHER EXPENSES
DEVELOPER COSTS
Developer Fee Calculation
NO CHARGE ON THIS DOCUMENT PER
CALIFORNIA GOVERNMENT CODE
SECTION 6103
Recording Requested By:
When Recorded Mail To:
City Clerk
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
(St. Regis)
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
(“Declaration”) is dated as of the ___ day of April, 2019, by St. Regis Park CIC, LP, a California
limited partnership (“Declarant”) in connection with that certain real property (“Property”) located
in the City of Chula Vista, County of San Diego, California, described in Exhibit “A” attached
hereto and incorporated herein by reference.
RECITALS
A. The Chula Vista Housing Authority as the Successor Housing Entity (“Lender”) has
agreed to make a loan to Declarant (“Lender Loan”) pursuant to that certain Amended and Restated
Promissory Note (St. Regis) of even date herewith, executed by Declarant in favor of the Lender, in
the original principal amount of $______ (“Note”).
B. The Lender Loan is conditioned by the Lender in part upon the recordation of this
Declaration setting forth certain restrictions upon the use and sale of the Property. Declarant shall
rehabilitate not less than one hundred eighteen (118) affordable units (“Affordable Units”), plus one
(1) manager’s unit (collectively the “Project”) on the Property. To the extent any applicable Federal,
State or local law, ordinance, statute, regulation or rule applicable to the Property as a result of
funding the Lender Loan with proceeds from any of the forgoing programs is not explicitly set forth
in this Declaration, the Declarant shall nonetheless comply with such requirements.
NOW, THEREFORE, Declarant hereby declares that the Property shall be subject to the
covenants, conditions and restrictions set forth below:
1. Restrictive Covenants. Declarant agrees and covenants on behalf of itself and its successors
and assigns, and each successor in interest to the Property, that at all times during the term of this
Declaration one hundred eighteen (118) residential units at the Project shall be set aside and reserved
as “Affordable Units.” As used herein the term “Affordable Units” shall refer to the one hundred
eighteen (118) residential units in the Project which are owned or held available strictly in
accordance with the terms and conditions set forth below.
1
(a) Affordable Unit Restrictions. The following restrictions shall apply to the one
hundred eighteen (118) Affordable Units. The restrictions set forth in the Table below shall
establish the maximum rental rate, which shall be adjusted for family size appropriate for the unit.
Rents shall also be adjusted to reflect a utility allowance.
TABLE OF RENT AND INCOME RESTRICTION CRITERIA
1234
NUMBER OF MAXIMUM MONTHLY MAXIMUM
UNIT TYPE
AFFORDABLERENTSINCOME OF
UNITSELIGIBLE
TENANTS
th
1 1-Bedroom1/12of 30% of 50%of AMI50% of AMI
th
4 1-Bedroom1/12of 30% of 60%of AMI60% of AMI
th
22 2-Bedroom1/12of 30% of 50%of AMI50% of AMI
th
87 2-Bedroom1/12of 30% of 60%of AMI60% of AMI
th
1 3-Bedroom1/12of 30% of 50%of AMI50% of AMI
th
3 3-Bedroom1/12of 30% of 60%of AMI60% of AMI
TOTAL - 118
(b) Eligible Tenants. Eligible Tenants” are those tenants: (i) whose aggregate gross
annual income does not exceed the respective percentages set forth in the Table of Rent and Income
Restriction Criteria set forth in Section 1(a), above, as adjusted for family size; and (ii) who own no
interests in real property other than a timeshare which may be used for a maximum of one month per
year. For purposes of this Declaration, the current annual area median income shall be the area
median income defined by HUD as the then current area median income for the San Diego-Carlsbad
Metropolitan Statistical Area, established periodically by HUD and published in the Federal
Register, as adjusted for family size. When determining income eligibility, Declarant shall use
actual household size. When determining rents, Declarant shall use the household size appropriate
for the Unit, which shall be 1 person for a studio two persons in a one-bedroom unit, three persons in
a two-bedroom unit, four persons in a three-bedroom unit, and five persons in a four-bedroom unit.
In the event HUD ceases to publish an established area median income as aforesaid, Lender may, in
its sole discretion, use any other reasonably comparable method of computing adjustments in area
median income. Notwithstanding anything contained herein to the contrary, to the extent any other
restrictions applicable to the Property limit the rent and/or occupancy of the Property, the most
restrictive shall apply.
2. Affordable Marketing Plan Compliance; Selection of Residents.
(a) Marketing Plan. Declarant shall utilize the Lender’s standardized management and
marketing plan for rental of all of the Affordable Units. The marketing plan, at a minimum, requires
publicizing the availability of the Affordable Units with the Lender, such as notices in any Lender-
sponsored newsletter, advertising in local newspapers and notice in Lender offices. Provided,
however, all tenants of each Affordable Unit shall meet the income requirements set forth herein and
tenancy and eligibility shall be in conformance with the terms and standards set forth in the
management marketing plan and no preference may be used for the purpose or effect of delaying or
otherwise denying admission to the Property or unit based on the race, color, ethnic origin, gender,
2
religion, disability, or age of any member of an applicant household.
(b) Master List. Selection of residents shall be made either by a lottery or based upon the
Master List, rather than on a first-come, first-serve basis. In the event the Lender implements a
master waiting list for affordable housing in the Lender (“Master List”), then Developer shall
provide notices to persons on the Master List of the availability of the Affordable Units, prior to
undertaking other forms of marketing. Developer shall give the persons on the Master List not fewer
than fifteen (15) days after receipt of such notice to respond by submitting application forms for
rental of the Affordable Units.
(c) Priority. Absent a Master List described above, selection of tenants shall be made
within the following levels of priority, subject in all circumstances to applicable limitations imposed
by law, including, without limitation, the Fair Housing Act under Federal law:
(1) First Priority. Households which are displaced from their primary residence as
a result of an action of City or Agency, a condominium conversion involving the
household’s residence, expiration of affordable housing covenants applicable to such
residence, or closure of a mobile home or trailer park community in which the household’s
residence was located, and the household resided in such housing as the household’s primary
place of residence for at least two years prior to such action or event.
(2) Second Priority. Households which meet one of the following criteria: (i)
households which are displaced from their primary residence as a result of an action of City
or Agency, a condominium conversion involving the household’s residence, expiration of
affordable housing covenants applicable to such residence, or closure of a mobile home or
trailer park community in which the household’s residence was located, and the household
resided in such housing as the household’s primary place of residence for at least one year
but less than two years prior to such action or event; (ii) households with at least one
member who resides within the City, as that person’s primary place of residence; (iii)
households with at least one member who works or has been hired to work within the City,
as that person’s principal place of full-time employment; or (iv) households with at least one
member who is expected to live within the City as a result of a bona fide offer of
employment within the City.
(3) Third Priority. Other Low Income Households who do not meet the criteria
for first priority or second priority above.
(d) Screening. Nothing herein shall restrict Declarant from screening tenants through the
application of criteria which is lawful and customary in apartment management in San Diego County
and otherwise consistent with federal, state and local regulations and restrictions related to the
financing for the Project.
3. Determination; Annual Requalification. Declarant shall obtain from each person to whom
Declarant leases an Affordable Unit a “Supplemental Rental Application” (“Application”) in the
form of Exhibit “B”, attached hereto (or such other form as Lender may from time to time adopt).
Declarant shall be entitled to rely on the Application and supporting documents thereto in
3
determining whether a household is an “Eligible Tenant.” Declarant shall retain the Application and
supporting documents for a period of not less than three (3) years after the household ceases to
occupy an Affordable Unit. An Affordable Unit occupied by an Eligible Tenant, shall be treated as
an Eligible Tenant until a recertification of such tenant’s income demonstrates that such tenant no
longer qualifies as an “Eligible Tenant.”
4. Certification; Annual Recertification. Upon completion of rehabilitation of the Project (the
occurrence of which shall be evidenced by the issuance of a temporary certificate of occupancy for
all units within the Project) and annually each year during of the term of this Declaration, Declarant
shall certify to Lender under penalty of perjury, utilizing such forms and providing such backup
documentation as requested by the Lender. Failure to timely complete the annual certification
process described in this Section 4 shall constitute a material default under this Declaration and the
Note. Lender may resort to the remedies set forth hereinbelow upon such material default, as well as
any and all other remedies available at law or in equity and/or contained in Note (subject to the
notice and cure provisions thereof, if any). Notwithstanding anything herein to the contrary, any
cure of any default made or tendered by the limited partner of the Declarant shall be deemed to be a
cure by the Declarant and shall be accepted or rejected on the same basis as if made or tendered by
the Declarant.
5. Relationship with Declarant. The term “Eligible Tenant” shall not include Declarant, or any
individuals who are partners of Declarant, or in any entity having an interest in Declarant, or the
Property, or any officer, employee, agent or consultant of the Declarant, or any relative (by blood or
marriage) of any officer, employee, agent or consultant of the Declarant.
6. No Students. No Affordable Unit shall be occupied or leased to any person who is a full-
time student, or a household comprised exclusively of persons who are full-time students, or any
student dependent as defined in the U.S. Internal Revenue Code, unless the taxpayer (upon whom
the student in question is dependent) resides in the same dwelling unit.
7. Income of Co-Tenants, Etc. The income of all co-tenants and/or non-dependent occupants,
shall be taken into account in determining whether a household is an Eligible Tenant hereunder.
8. Eviction.
(a) Any Reason Other Than Over Income. In the event that a tenant who was properly
certified as an Eligible Tenant at the commencement of such tenant’s occupancy ceases to be
eligible, for any reason other than being over income, Declarant shall give sixty (60) days written
notice to such tenant to vacate the Affordable Unit. The vacated Affordable Unit shall thereafter be
rented to an Eligible Tenant.
(b) Over Income Tenants. Notwithstanding Section 8(a), above, but except as otherwise
provided in Sections 8(c), below, a tenant who occupies an Affordable Unit, who becomes over
income at the time of recertification shall be given one hundred eighty (180) days notice to vacate
the Affordable Unit, effective from and after the date of such failure to requalify (i.e., the
recertification date, provided the tenant was properly certified originally). During the time the over-
income tenant resides in the Affordable Unit, the tenant shall continue to pay an amount that does
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not exceed the amount set forth in the Table in Section 1(a). The tenant shall continue to be
considered an “Eligible Tenant” until evicted.
(c) Tax Credit Funds. Notwithstanding Sections 8(a) and (b), above, or anything else to
the contrary set forth in this Declaration, when a tenant occupies a unit subject to a regulatory
agreement (“TCAC Regulatory Agreement”) by and between the Declarant and the California Tax
Credit Allocation Committee pursuant to Section 42 of the Internal Revenue Code, such tenant shall
have its rent increased or shall be evicted as a result of such tenant being over income only as and
when allowed by such TCAC Regulatory Agreement or by Federal law, including 26 U.S.C. §42. In
the event of conflict between the over income regulations of this Declaration and the TCAC
Regulatory Agreement, the TCAC Regulatory Agreement provisions shall apply.
9. Maintenance.
(a) Physical Condition of Affordable Units. After completion of construction of the
Project, Declarant shall continually maintain the Affordable Units in a decent, safe and sanitary
condition, and in good repair as described in 24 CFR §5.703, and in a manner which satisfies the
Uniform Physical Conditions Standards promulgated by the Department of Housing and Urban
Development (24 CFR §5.705), as such standards are interpreted and enforced by the Lender under
its normal policies and procedures. The Lender shall have the right to inspect the Affordable Units
from time to time, on reasonable notice and at reasonable times, in order to verify compliance with
the foregoing maintenance covenant. Declarant hereby consents to periodic inspection by the
Lender’s designated inspectors and/or designees during regular business hours, including the Code
Enforcement Agents of the City of Chula Vista, to ensure compliance with all applicable zoning,
building codes, regulations, and property standards. Declarant agrees to comply with the provisions
of 24 CFR 92.251, whether or not contained in this Section. Further, each Affordable Unit shall be
requalified annually, as to the foregoing maintenance covenant, as part of the annual tenant
requalification process described in, and to the extent applicable under, Section 4 above. Any
deficiencies in the physical condition of an Affordable Unit shall be corrected by Declarant at
Declarant’s expense within thirty (30) days of the identification of such deficiency by the Lender
and delivery of written notice of the same to Declarant, provided if the deficiency is of a nature that
it cannot be cured within such thirty (30) day period, the Declarant shall have such additional time to
cure as is reasonably determined by the Lender.
(b) Crime-Free Project. At all times during the term of this Declaration, the Declarant
shall participate in the Lender’s Crime-Free Multifamily Housing Program, or any successor or
similar program established by the Lender.
10. Monitoring. It is contemplated that, during the term of this Declaration, the Lender will
perform the following monitoring functions: (a) preparing and making available to Declarant any
general information that the /or Lender possesses regarding income limitations and restrictions
which are applicable to the Affordable Units; (b) reviewing the documentation submitted by
Declarant in connection with the annual certification process for Eligible Tenants described in
Section 3, above; (c) reviewing the documentation submitted by Declarant in connection with the
annual certification process for Eligible Tenants in accordance with Section 4, above; and (d)
inspecting the Affordable Units to verify that they are being maintained in accordance with Section
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9, above. Notwithstanding the foregoing description of the Lender’s functions, Declarant shall have
no claim or right of action against the Lender based on any alleged failure to perform such function.
In addition, the Declarant shall cooperate with and utilize such forms, software, websites and third-
party vendors as may be required by the Lender.
11. Additional Lease Provisions/Annual Income Verification. Declarant agrees that it will
require each Eligible Tenant to execute an Authorization for Release of Information, in the form
attached hereto as Exhibit “C.” Declarant agrees that it will include the following provision in all of
its leases:
Lessee agrees, upon written request from the Landlord, the City of Chula Vista or the
Chula Vista Housing Authority (“Lender”), to certify under penalty of perjury the
accuracy of all information provided in connection with the examination or
reexamination of annual income of the tenant’s household. Further, tenant agrees
that the annual income and other eligibility requirements are substantial and material
obligations of the tenancy and that the tenant will comply promptly with all requests
for information with respect to the tenancy from the Landlord and/or Lender.
Further, tenant acknowledges that tenant’s failure to provide accurate information
regarding such requirements (regardless of whether such inaccuracy is intentional or
unintentional) or the refusal to comply with the request for information with respect
thereto, shall be deemed a violation of this lease provision, and a material breach of
the tenancy and shall constitute cause for immediate termination of the tenancy.
12. Compliance with Regulations. Declarant shall comply with all regulations, policies and
procedures promulgated or otherwise adopted by the Lender. Declarant’s failure to so comply shall
constitute a material default hereunder, entitling Lender to the remedies set forth herein.
13. Successors Bound. Declarant covenants, for itself and its successors and assigns, not to sell,
transfer, assign or otherwise dispose of ownership of the Property without the express written
consent of the Lender. Any prospective purchaser, transferee or assignee shall expressly promise in
writing to be bound by all of the provisions hereof, including the covenant in this Section 13 to
require successors to expressly assume the obligations herein. It is expressly acknowledged that the
covenants and restrictions set forth herein shall survive any repayment of the Lender Loan. Further,
the obligations of Declarant hereunder shall be deemed independent of Declarant’s obligations under
the Note.
14. Maximum Rent To Be Collected by Declarant. In no event, shall all of the rent, including
the portion paid by the Eligible Tenant and any other person or entity, collected by Declarant (the
“Total Rent”) for any rent restricted unit exceed the amount of rent set forth in this Declaration.
Total Rent includes all payments made by the Eligible Tenant and all subsidies received by
Declarant. In the case of persons receiving Section 8 benefits, who are Eligible Tenants, Declarant
acknowledges that it shall not accept any subsidy or payment that would cause the Total Rent
received for any restricted unit to exceed the maximum rents allowed by this Declaration, for any
Affordable Unit. Should Declarant receive Total Rent in excess of the allowable maximum rent set
forth in this Declaration, Declarant agrees to immediately notify Lender and reimburse the Lender
for any such overpayment. Acceptance by Declarant or its successors in interest, of Total Rent in
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excess of the maximum rent set forth in this Declaration shall constitute a material breach of this
Declaration.
15. Cross Default. Annual payments as referenced in the Note shall be made to Lender as
provided therein. Failure to make the payments to the Lender pursuant to the Note, shall be a
material default under this Declaration.
16. Term. This Declaration and the covenants and restrictions contained herein shall be effective
commencing on the date this Declaration is recorded and shall remain in full force and effect until
12:00 midnight on December 31, 2075.
17. Covenant Against Discrimination. Declarant covenants on behalf of itself and its successors
and assigns, and each successor in interest to the Property, not to discriminate against any tenant or
prospective tenant of any Affordable Unit on the basis of their race, age, sexual orientation, marital
status, color, religion, sex, handicap, or national origin, as referenced in all applicable state, local
and federal law.
(a) Obligation to Refrain from Discrimination. Declarant covenants by and for itself and
any successors in interest that 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, ancestry, familial status, source of income or disability in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Declarant or any person
claiming under or through it establish or permit any such practice or practices of discrimination or
segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d)
of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the
Government Code, with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Property or the rental, lease sale of the Property and
any dwelling unit thereon. The foregoing covenants shall run with the Property.
(b) Nondiscrimination Covenants. Declarant shall refrain from restricting the rental,
lease and sale of the Property and any dwelling unit thereon on the basis of race, color, creed,
religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of
income or disability of any person. All such deeds, leases or contracts shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
(1) Deeds. In deeds “The grantee herein covenants by and for
itself, its successors and assigns, and all persons claiming under or through them, that
there shall be no discrimination against or segregation of, any person or group of
persons on account of race, color, religion, sex, sexual orientation, disability, medical
condition, familial status, source of income, marital status, national origin or ancestry
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land
herein conveyed, nor shall the grantee itself or any person claiming under or through
it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants,
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lessees, subtenants, sublessees or vendees in the land herein conveyed. The
foregoing covenants shall run with the land.”
(2) Leases. In leases “The lessee herein covenants by and for
itself, its successors and assigns, and all persons claiming under or through them, and
this lease is made and accepted upon and subject to the following conditions: That
there shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, religion, sex, sexual orientation, disability,
medical condition, familial status, source of income, marital status, national origin or
ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or
enjoyment of the land herein leased, nor shall lessee itself, or any person claiming
under or through it, establish or permit 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 in the land herein leased.”
(3) Contracts. In contracts “There shall be no discrimination
against or segregation of any person or group of persons on account of race, color,
religion, sex, sexual orientation, disability, medical condition, familial status, source
of income, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee
itself or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the land.”
18. Enforcement. Declarant expressly agrees and declares that the Lender or any successor
public entity or agency is a proper party and shall have standing to initiate and pursue any and all
actions or proceedings, at law or in equity to enforce the provisions hereof and/or to recover
damages for any default hereunder, notwithstanding the fact that such damages or the detriment
arising from such default may have actually been suffered by some other person or the public at
large. Further, the Lender or any successor public entity or agency shall be the proper party to
waive, relinquish, release or modify the rights, covenants, obligations or restrictions contained in or
arising under this Declaration.
19. Attorneys’ Fees. In the event that any litigation for the enforcement or interpretation of this
Declaration, whether an action at law or arbitration or any manner of non-judicial dispute resolution
to this Declaration by reason of the breach of any condition or covenant, representation or warranty
in this Declaration, or otherwise arising out of this Declaration, the prevailing party in such action
shall be entitled to recover from the other reasonable attorneys’ fees and out of pocket expenses
(including expert witness fees) to be fixed by the court which shall render a judgment, as well as the
costs of suit.
20. Severability. In the event that any provision or covenant of this Declaration is held by a
court of competent jurisdiction to be invalid or unenforceable, then it shall be severed from the
remaining portions of this Declaration which shall remain in full force and effect.
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21. Covenants to Run With the Land. The covenants contained herein shall constitute
“covenants running with the land”, and shall bind the Property and every person having an interest
therein during the term of this Declaration. Declarant agrees for itself and its successors that, in the
event that, for any reason whatsoever, a court of competent jurisdiction determines that the
foregoing covenants do not run with the land, such covenants shall be enforced as equitable
servitudes against the Property.
22. Recordation; Waiver and Amendment. This Declaration shall be recorded in the Office of
County Recorder of San Diego, California. No provision of this Declaration, or breach of any
provision, can be waived except in writing. Waiver of any provision or breach shall not be deemed
to be a waiver of any other provision, or of any subsequent breach of the same or other provision.
Except as otherwise provided herein, this Declaration may be amended, modified or rescinded only
in writing signed by Declarant and the City Manager of the City of Chula Vista. In the event the
Lender consents to such an amendment, modification or rescission, the same shall be conditioned
upon Declarant’s payment of all fees and costs incurred by the Lender with respect to the same,
including without limitation attorneys’ fees.
23. Remedies.
(a) Contract Governed by Laws of State of California. This Declaration, its performance,
and all suits and special proceedings under this Declaration, shall be constituted in accordance with
the laws of the State of California and Federal law, to the extent applicable. In any action, special
proceeding, or other proceeding that may be brought arising out of, under or because of this
Declaration, the laws of the State of California and the United States, to the extent applicable, shall
govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which the
action or special proceeding may be instituted.
(b) Standing, Equitable Remedies; Cumulative Remedies. Declarant expressly agrees
and declares that Lender or any successor or public entity or agency shall be the proper party and
shall have standing to initiate and pursue any and all actions or proceedings, at law or in equity, to
enforce the provisions hereof and/or to recover damages for any default hereunder, notwithstanding
the fact that such damages or the detriment arising from such a default may have actually been
suffered by some other person or by the public at large. Further, Declarant expressly agrees that
receivership, injunctive relief and specific performance are proper pre-trial and/or post-trial remedies
hereunder, and that, upon any default, and to assure compliance with this Declaration. Nothing in
this Section 23(b), and no recovery by the Lender, shall restrict or limit the rights or remedies of
persons or entities other than the Lender, against Declarant in connection with the same or related
acts by Declarant. The remedies set forth in this Section are cumulative and not mutually exclusive,
except the extent that their award is specifically determined to be duplicative by final order of a
court of competent jurisdiction.
(c) Remedies at Law for Breach of Tenant Restrictions. In the event of any material
default hereunder regarding restrictions on the operation and the transfer of the Property the Lender
shall be entitled to, in addition to any and all other remedies available at law or in equity: (i) declare
all of the Lender Loan to be due and payable; and (ii) recover compensatory damages. If the default
in question involves the collection of rents in excess of the rents permitted hereunder, the amount of
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such compensatory damages shall be the product of multiplying: (A) the number of months that the
default in question has continued until the time of trial by (B) the result of subtracting the rents
properly chargeable hereunder for the Affordable Units in question from the amount actually
charged for those Affordable Units. Declarant and Lender agree that it would be extremely difficult
or impracticable to ascertain the precise amount of actual damages accruing to Lender as a result of
such a default and that the foregoing formula is a fair and reasonable method of approximating such
damages. Lender shall be entitled to seek and to recover damages in separate actions for successive
and separate breaches which may occur. Further, interest shall accrue on the amount of such
damages from the date of the breach in question at the rate of ten percent (10%) per annum or the
maximum rate then allowed by law, whichever is less. Nothing in this section shall preclude the
award of exemplary damages as allowed by law. Notwithstanding the foregoing, the Declarant’s
limited partner shall have the right, but not the obligation, to cure defaults hereunder in the same
manner as the Declarant.
(d) Expert Witness, Attorneys’ Fees and Costs. The parties agree that the prevailing
party in litigation for the breach and/or interpretation and/or enforcement of the terms of this
Declaration and/or the Note shall be entitled to their expert witness fees, if any, as part of their costs
of suit, and reasonable attorneys’ fees as may be awarded by the court, pursuant to California Code
of Civil Procedure (“CCP”) §1033.5 and any other applicable provisions of California law,
including, without limitation, the provisions of CCP §998.
(e) Foreclosure. Upon default by the Declarant in the performance of any obligation
under this Declaration, after the expiration of any and all applicable notice or cure periods, the
Lender may declare all sums secured by the Deed of Trust immediately due and payable by
delivering to the trustee thereof a written declaration of default and demand for sale and a written
notice of default and election to sell the Property. The trustee shall cause the notice of default and
election to sell to be recorded. After the required time period has lapsed following the recordation of
the notice of default, and after notice of sale has been given as required by law, the trustee, without
demand on the Declarant, shall sell the Property at the time and place specified in the notice of sale,
either as a whole or in separate parcels, and in any order determined by trustee, at public auction to
the highest bidder for cash in lawful money of the United States, payable at the time of sale.
(f) Cure by Limited Partner. Declarant’s limited partner shall have the right, but not the
obligation, to cure defaults of Declarant hereunder, and the Lender hereby agrees to accept any cure
of any default made or tendered by one or more of Declarant’s limited partners on the same basis as
if made or tendered by Declarant. Copies of all notices which are sent to Declarant hereunder shall
also be sent to Declarant’s limited partner, at such address as may be provided to the Lender by
Declarant.
24. Property Manager. At all times that this Declaration is in force and effect, and the Lender
has served a thirty (30) day written notice of deficiencies in the property management for the
Property which do not conform to the standards of property management of a professional property
manager operating similar properties in San Diego County and which deficiencies have not been
rectified by Declarant, within the thirty (30) day period (unless such deficiency is not reasonably
capable of being cured within such thirty (30) day period, then such reasonable amount of time as is
needed not to exceed 90 days, provided Declarant commences cure within such thirty (30) day
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period and continues to diligently pursue cure), then, the Lender shall have the right, in its
reasonable discretion, and upon thirty (30) days written notice: (i) to require the retention of a
professional property management firm to manage the Property; (ii) to approve, in advance and in
writing, the retention of any such property management firm, including the terms of the contract
governing such retention; and (iii) to require Declarant to terminate any such property management
firm, provided that such termination shall comply with the termination provisions of the
management contract in question. Declarant shall cooperate with Lender to effectuate Lender’s
rights set forth in this Section 24.
25. Declarant Required to Pay Monitoring Fees. Declarant shall pay Lender a set-up fee (the
“Set-Up Fee”) in the amount of $1,014.00 which shall be paid by Declarant to City within thirty (30)
days of written demand for the same. In each year during the term of this Declaration, Declarant
shall pay to Lender an annual monitoring fee, in an amount equal to the set-up fee, increased by
three percent (3%) cumulative each year. The annual monitoring fee shall be paid to Lender
annually within thirty (30) days after Lender provides a written invoice for the same. Failure to
timely pay such fees shall constitute a material default under Lender Loan Agreements and this
Declaration. Both the set-up fee and annual monitoring fee shall be paid Lender as a consideration
for the lending of funds by Lender to Declarant.
26. Notices. Notices under this Declaration shall be in writing and sent (a) by certified or
registered U.S. mail, return receipt requested, (b) overnight by a nationally recognized overnight
courier such as UPS Overnight or FedEx, or (c) by personal delivery. All notices shall be effective
upon receipt (or refusal to accept delivery). All notices shall be delivered to the following
addresses:
Lender: Chula Vista Housing Authority
276 Fourth Avenue
Chula Vista, California, 91910
Attention: Development Services Department Housing Division
Copy to: City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: City Attorney
Declarant: St. Regis Park CIC, LP
c/o Chelsea Investment Corporation
6339 Paseo Del Lago
Carlsbad, CA 92011
Attention: Cheri Hoffman
Copy to: Raymond James California Housing Opportunities Fund V L.L.C.
c/o Raymond James Tax Credit Funds, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716
Attention: Steven J. Kropf, President
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Facsimile No.: 727-567-8455
27. Noticing Requirements Prior to Termination. Prior to termination of this Declaration,
Declarant shall comply with any and all noticing requirements required under any applicable laws or
regulations, including without limitation, the requirements of California Government Code Sections
65863.10 and 65863.11, if applicable.
28. Signature Authority.All individuals signing this Declaration for a party which is a
corporation, limited liability company, partnership or other legal entity, or signing under a power of
attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the Lender
that they have the necessary capacity and authority to act for, sign and bind the respective entity or
principal on whose behalf they are signing.
DECLARANT:
St. Regis Park CIC, LP, a California limited partnership
By:_____________________________________
Print Name:______________________________
Its:_____________________________________
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ACKNOWLEDGMENT
State of California )
)
County of San Diego )
On ____________________, 2019, before me, _________________________________, notary
public, personally appeared __________________________________________ who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrumentand 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.
WITNESS my hand and official seal.
Signature (Seal)
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Exhibit “A”
Property Description
That certain real property situated in the City of Chula Vista, County of San Diego, State of
California, described as follows:
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Exhibit “B”
Supplemental Rental Application
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Exhibit “C”
Authorization for Release of Information
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NO CHARGE ON THIS DOCUMENT
PER CALIFORNIA GOVERNMENT
CODE SECTION 6103
Recording Requested By:
When Recorded Mail To:
City of Chula Vista
Housing Division
276 Fourth Avenue
Chula Vista, CA 91910
APN: 618-151-31-00
DEED OF TRUST
(St. Regis)
(“Deed of Trust”)
THIS DEED OF TRUST is dated as of the ___ day of April, 2019, by St. Regis Park CIC, LP, a
California limited partnership (“Trustor”), whose address is c/o Chelsea Investment Corporation,
6339 Paseo Del Lago, Carlsbad, California 92011, First American Title Insurance Company
(“Trustee”) and the Chula Vista Housing Authority as the Successor Housing Entity
(“Beneficiary”), whose address is c/o City of Chula Vista, Development Services Department
Housing Division, 276 Fourth Avenue, Chula Vista, California, 91910.
TRUSTOR HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with
power of sale, all that property in the City of Chula Vista, County of San Diego, State of
California, described as:
(See Legal Description - Exhibit “A”)
FOR THE PURPOSE OF SECURING:
(a) Payment of the indebtedness evidenced by that certain Amended and Restated
Promissory Note (St. Regis) of even date herewith executed by Trustor in favor of the
Beneficiary, in the original principal amount of $________, and any renewal, amendment,
extension, or modification of the same (“Note”);
(b) Any additional sums and interest that may hereafter be loaned to the then record owner of
the Property by Beneficiary, when evidenced by another note or notes reciting that it or they are
so secured;
(c) The performance of each agreement contained in this Deed of Trust; and
(d) The performance of each agreement and covenant of Trustor under that certain
Declaration of Covenants, Conditions and Restrictions (St. Regis) (“Declaration”) of even date
herewith and recorded concurrently herewith affecting the Property.
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A. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
AGREES:
1. Maintenance and Repair. To keep the Property in good condition and repair; not to
remove or demolish any buildings on the Property; to complete or restore promptly and in good
and workmanlike manner any building that may be constructed, damaged, or destroyed on the
Property; to pay when due all claims for labor performed and materials furnished for the
Property; to comply with all laws affecting the Property or requiring any alterations or improve-
ments to be made on the Property; not to commit or permit waste of the Property (reasonable
wear and tear excepted); not to commit, suffer, or permit any act upon the Property in violation
of law; and to cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the
character or use of the Property may be reasonably necessary.
2. Fire Insurance. To provide, maintain, and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary as its interest may appear. The amount
collected under any fire or other insurance policy may be applied by Beneficiary upon any
indebtedness secured by this Deed of Trust and in any order determined by Beneficiary, or at the
option of Beneficiary the entire amount so collected or any part of that amount may be released
to Trustor. This application or release shall not cure or waive any default or notice of default
under this Deed of Trust or invalidate any act done pursuant to such a notice. Notwithstanding
the foregoing, in the event of any fire or other casualty to the Property, Trustor shall have the
right to rebuild the Property, and to use all available insurance proceeds therefor, provided that
(a) such proceeds are sufficient to rebuild the Property in a manner that provides adequate
security to Beneficiary for repayment of the indebtedness secured hereby or if such proceeds are
insufficient then Trustor shall have funded any deficiency, (b) Beneficiary shall have the right to
approve (which shall not be unreasonably withheld or delayed) plans and specifications for any
major rebuilding and the right to approve (which shall not be unreasonably withheld or delayed)
disbursements of insurance proceeds for rebuilding under a construction escrow or similar
arrangement, and (c) no material default then exists hereunder or under any of the Note or the
Declaration. If the casualty affects only part of the Property and total rebuilding is not feasible,
then proceeds may be used for partial rebuilding and partial repayment of the indebtedness
secured hereby in a manner that provides adequate security to Beneficiary for repayment of the
remaining indebtedness secured hereby.
3. Defense of Security. To appear in and defend any action or proceeding purporting to
affect the security of this Deed of Trust or the rights or powers of Beneficiary, or Trustee; and to
pay all costs and expenses, including cost of evidence of title and attorneys’ fees in a reasonable
sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any
suit brought by Beneficiary to foreclose this Deed of Trust.
4. Payment of Liens and Taxes. To pay all taxes and assessments affecting the Property
prior to such payments becoming due, including assessments on appurtenant water stock, all
encumbrances, charges, and liens, with interest, on the Property or any part of the Property,
which appear to be prior or superior to this Deed of Trust; and all costs, fees, and expenses of
this Deed of Trust. If Trustor fails to make any payment or to do any act as provided in this
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Deed of Trust, then Beneficiary or Trustee may (but is not obligated to) make the payment or do
the act in the required manner and to the extent deemed necessary by Beneficiary or Trustee to
protect the security of this Deed of Trust. The performance by Beneficiary or Trustee of such an
act shall not require notice to or demand upon Trustor and shall not release Trustor from any
obligation under this Deed of Trust. Beneficiary or Trustee shall also have the following related
rights and powers: to enter upon the Property for the foregoing purposes; to appear in and
defend any action or proceeding purporting to affect the security of this Deed of Trust or the
rights or powers of Beneficiary or Trustee; to pay, purchase, contest, or compromise any
encumbrance, charge, or lien that in the judgment of either appears to be prior or superior to this
Deed of Trust; to employ counsel; and to pay necessary expenses and costs, including reasonable
attorneys’ fees.
5. Payment and Reimbursement of Costs. That Trustor will pay the Note at the time and in
the manner provided therein. To pay immediately and without demand all sums expended by
Beneficiary or Trustee pursuant to this Deed of Trust, with interest from date of expenditure at
the amount allowed by law in effect at the date of this Deed of Trust, and to pay any amount
demanded by Beneficiary (up to the maximum allowed by law at the time of the demand) for any
statement regarding the obligation secured by this Deed of Trust.
6. Use. That Trustor will not permit or suffer the use of any of the Property for any purpose
other than the use for which the same was intended at the time this Deed of Trust was executed.
7. Reference to Other Agreements. The Note and the Declaration are hereby referenced and
together with this Deed of Trust and the Security Agreement are referred to herein as the “Loan
Documents.” Copies are on file in the office of the Beneficiary.
8. Performance of Other Obligations. To perform, in a timely manner, each agreement and
covenant by and between Trustor on any and all notes, loans and deeds of trust that are senior
and/or junior to this Deed of Trust. A default in any of these obligations and the expiration of
any applicable notice or cure period shall constitute a default under this Deed of Trust.
B. THE PARTIES AGREE THAT:
9. Condemnation Award. Any award of damages in connection with any taking or
condemnation, or for injury to the Property by reason of public use, or for damages for private
trespass or injury to the Property, is hereby assigned and shall be paid to Beneficiary (subject to
the rights of any senior lenders), as its interest may appear as further security for all obligations
secured by this Deed of Trust. Upon receipt of such proceeds, Beneficiary may hold the
proceeds as further security, or apply or release them in the same manner and with the same
effect as provided in Section 2 of this Deed of Trust for the disposition of proceeds of fire or
other insurance.
10. Waiver of Late Payments. By accepting payment of any sum secured by this Deed of
Trust after its due date, Beneficiary does not waive its right either to require prompt payment
when due of all other sums so secured or to declare default for failure to pay any indebtedness
secured by this Deed of Trust.
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11. Trustee’s Powers. Upon written request of Beneficiary, Trustee may (a) reconvey all or
any part of the Property; (b) consent to the making and recording, or either, of any map or plat of
all or any part of the Property; (c) join in granting any easement on the Property; or (d) join in or
consent to any extension agreement or any agreement subordinating the lien, encumbrance, or
charge of this Deed of Trust. Trustee need not provide Trustor with notice before taking any of
the foregoing actions, and shall not be liable for the proper performance of the act. The exercise
by Trustee of any of the foregoing powers shall not affect the personal liability of any person
with respect to the obligations secured by this Deed of Trust, or the lien of this Deed of Trust on
the remaining property as security for the repayment of the full amount secured by this Deed of
Trust.
12. Full Reconveyance. Upon written request of Beneficiary stating that all obligations
secured by this Deed of Trust have been performed in full, surrender of this Deed of Trust, the
Note, to Trustee for cancellation and retention, and payment of Trustee’s fees and charges,
Trustee shall reconvey, without warranty, the Property then subject to this Deed of Trust. The
recitals in the reconveyance shall be conclusive proof of the truthfulness of the recitals. The
grantee in the reconveyance may be described as “the person or persons legally entitled thereto.”
13. Assignment of Rents. As additional security, Trustor hereby gives to and confers upon
Beneficiary the right, power, and authority during the continuance of this Deed of Trust, to
collect the rents, issues, and profits of the Property, but reserves the right, prior to any default,
which continues beyond any applicable notice and cure periods, by Trustor in payment of any
amounts secured by this Deed of Trust or in the performance of any agreement under this Deed
of Trust, to collect and retain these rents, issues, and profits as they become due and payable.
Upon any such uncured default, Beneficiary may, without notice and without regard to the
adequacy of the security for the amounts secured by this Deed of Trust, either personally or by
agent or court-appointed receiver, do the following: enter upon and take possession of the
Property or any part of the Property; sue for or otherwise collect all rents, issues, and profits,
including those past due and unpaid; and apply these rents, issues, and profits, less costs and
expenses of operation and collection (including reasonable attorneys’ fees), upon any
indebtedness secured by this Deed of Trust, in any order determined by Beneficiary. The
exercise of the foregoing rights by Beneficiary shall not cure or waive any default or notice of
default under this Deed of Trust or invalidate any act done pursuant to such a notice.
14. Default; Foreclosure. Upon default by Trustor in the payment of any amounts secured by
this Deed of Trust or in the performance of any obligation under this Deed of Trust, after the
expiration of any and all applicable notice or cure periods, Beneficiary may declare all sums
secured by this Deed of Trust immediately due and payable by delivering to Trustee a written
declaration of default and demand for sale and a written notice of default and election to sell the
Property. Trustee shall cause the notice of default and election to sell to be recorded. After the
required time period has lapsed following the recordation of the notice of default, and after
notice of sale has been given as required by law, Trustee, without demand on Trustor, shall sell
the Property at the time and place specified in the notice of sale, either as a whole or in separate
parcels, and in any order determined by Trustee, at public auction to the highest bidder for cash
in lawful money of the United States, payable at the time of sale. Trustee may postpone sale of
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all or any portion of the Property by public announcement at the time and place of sale, and from
time to time thereafter may postpone the sale by public announcement at the time fixed by the
preceding postponement. Trustee shall deliver to the purchaser at the auction its deed conveying
the Property sold, but without any covenant or warranty, express or implied. The recital in the
deed of any matter or fact shall be conclusive proof of the truthfulness of the recital. Any
person, including Trustor, Trustee, or Beneficiary, may purchase at the sale. After deducting all
costs, fees, and expenses of Trustee and Beneficiary under this paragraph, including costs of
procuring evidence of title incurred in connection with sale, Trustee shall apply the proceeds of
sale to payment of: all sums expended under the terms of this Deed of Trust, not then repaid,
with accrued interest at the amount allowed by law in effect at the date of this Deed of Trust; all
other sums then secured by this Deed of Trust; and the remainder, if any, to the person or persons
legally entitled to the remaining proceeds. Trustor’s limited partner shall have the right, but not
the obligation, to cure defaults of Trustor hereunder, and the Beneficiary hereby agrees to accept
any cure of any default made or tendered by Trustor’s limited partner on the same basis as if
made or tendered by Trustor. Copies of all notices which are sent to Trustor hereunder shall also
be sent to Trustor’s limited partner:
Raymond James California Housing Opportunities Fund V L.L.C.
c/o Raymond James Tax Credit Funds, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716
Attention: Steven J. Kropf, President
Facsimile No.: 727-567-8455
15. Due on Sale or Further Encumbrance. Should the undersigned agree to or actually sell,
convey, transfer, or dispose of, or further encumber the Property, or any part of it, or any interest
in it, without first obtaining the written consent of the Beneficiary, then all obligations secured
by this Deed of Trust may be declared due and payable, at the option of the Beneficiary.
Consent to one transaction of this type will not constitute a waiver of the right to require consent
to future or successive transactions.
16. General Provisions. This Deed of Trust applies to, inures to the benefit of, and binds all
parties to this Deed of Trust and their heirs, legatees, devisees, administrators, executors,
successors, and assigns. The term “Beneficiary” shall mean the holder and owner, including
pledgee, of the Note, whether or not named as a beneficiary in this Deed of Trust, and the heirs,
legatees, devisees, administrators, executors, and assigns of any such person. In this Deed of
Trust, whenever the context so requires, the masculine gender includes the feminine and/or
neuter, and the singular number includes the plural.
17. Acceptance by Trustee. Trustee accepts this Deed of Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law. Trustee is not
obligated to notify any party to this Deed of Trust of pending sale under any other deed of trust
or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless
brought by Trustee.
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18. Substitution of Trustees. Beneficiary, or any successor in ownership of any obligations
secured by this Deed of Trust, may from time to time, by written instrument, substitute a
successor or successors to any Trustee named in or acting under this Deed of Trust. The
substitution instrument shall contain the name of the original Trustor, Trustee, and Beneficiary
under this Deed of Trust, the book and page where this Deed is recorded, and the name and
address of the new Trustee. When executed by Beneficiary and duly acknowledged and
recorded in the office of the recorder of the county or counties where the Property is situated, the
substitution instrument shall be conclusive proof of proper substitution of the successor Trustee
or Trustees. Any successor Trustee or Trustees shall, without conveyance from the predecessor
Trustee, succeed to all its title, estate, rights, powers, and duties.
19. Cumulative Powers and Remedies. The powers and remedies conferred in this Deed of
Trust are concurrent and cumulative to all other rights and remedies provided in this Deed of
Trust or given by law. These powers and remedies may be exercised singly, successively, or
together, and as often as deemed necessary.
20. Conclusiveness of Recitals. The recitals contained in any reconveyance, trustee’s deed,
or any other instrument executed by Trustee from time to time under the authority of this Deed
of Trust or in the exercise of its powers or the performance of its duties under this Deed of Trust,
shall be conclusive evidence of their truth, whether stated as specific and particular facts, or in
general statements or conclusions. Further, the recitals shall be binding and conclusive upon
Trustor, its heirs, executors, administrators, successors, and assigns, and all other persons.
21. Attorneys’ Fees. If any action is brought for the foreclosure of this Deed of Trust or for
the enforcement of any provision of this Deed of Trust (whether or not suit is filed), Trustor
agrees to pay all costs and expenses of Beneficiary and Trustee, including reasonable attorneys’
fees; and these sums shall be secured by this Deed of Trust.
22. Request for Notices of Default and Sale. In accordance with Section 2924b of the
California Civil Code, request is hereby made that a copy of any Notice of Default and a copy of
any Notice of Sale under any deeds of trust recorded in the Official Records of San Diego
County, California, with respect to the Property, in which Beneficiary, is named as beneficiary,
be mailed to:
City of Chula Vista
Development Services Department
c/o Housing Division
276 Fourth Avenue
Chula Vista, California, 91910
NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the
address contained in this recorded request. If your address changes, a new request must be
recorded.
23. Inspections. Trustor shall permit Beneficiary and its agents or representatives, to inspect
the Property at any and all reasonable times, upon twenty-four (24) hours written notice (unless
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Trustor is in default under any of the Loan Documents, or in the event of an emergency in which
event no notice shall be required). Inspections shall be conducted so as not to interfere with the
tenants’ use and enjoyment of the Property and the general operation of the Property.
24. Hazardous Materials Defined. For purposes of this Deed of Trust, “Hazardous Materials”
mean and include any hazardous, toxic or dangerous waste, substance or material including,
without limitation, flammable explosives, radioactive materials, asbestos, hazardous wastes,
toxic substances and any materials or substances defined as hazardous materials, hazardous
substances or toxic substances in (or for purposes of) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (“CERCLA”), as amended (42 U.S.C. §9601,
et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. §6901, et seq.), and those substances defined as
hazardous wastes in §25117 of the California Health and Safety Code or as hazardous substances
in §25316 of the California Health and Safety Code or in any regulations promulgated under
either such law, any so-called “Superfund” or “Superlien” law, or any other federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance
or material, as now or at any time hereafter in effect.
25. Trustor’s Hazardous Materials Representations and Warranties and Indemnity. In
addition to the general and specific representations, covenants and warranties set forth in the
Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to
Hazardous Materials, as follows:
(a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever
caused or permitted any Hazardous Materials to be manufactured, placed, held, located or
disposed of on, under or at the Property or any part thereof, and neither the Property nor any part
thereof, has ever been used (whether by Trustor or, to the best knowledge of Trustor, by any
other person) as a manufacturing site, dump site or storage site (whether permanent or
temporary) for any Hazardous Materials. “Hazardous Materials” for purposes of this Section
26(a) shall not include substances typically used in the ordinary course of developing, operating
and maintaining apartment complexes, provided that such substances are used in accordance
with all applicable laws.
(b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees,
contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents
harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and
claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against
Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or
indirect result of, the presence or use, generation, storage, release, threatened release or disposal
of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage,
discharge, emission or release of any Hazardous Materials from the Property (including, without
limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising
under CERCLA, any so-called “Superfund” or “Superlien” law, or any other federal, state or
local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or
imposing liability or standards of conduct concerning any Hazardous Materials) regardless of
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whether or not caused by or within the control of Trustor. The foregoing indemnification shall
not apply to any liability resulting from (i) an event that occurs after a transfer of the Property
due to any foreclosure sale (judicial or nonjudicial) or a deed in lieu of foreclosure, or (ii) acts or
omissions of Beneficiary or its agents.
(c) Trustor has not received any notice of (i) the happening of any event involving the
use, spillage, discharge, or cleanup of any Hazardous Materials (“Hazardous Discharge”)
affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air
emissions, water discharges, noise emissions or any other environmental, health or safety matter
affecting Trustor or the Property (“Environmental Complaint”) from any person or entity,
including, without limitation, the United States Environmental Protection Agency (“EPA”). If
Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7)
business days thereafter, oral and written notice of same to Beneficiary.
(d) Without limitation of Beneficiary’s rights under this Deed of Trust, Beneficiary
shall have the right, but not the obligation, to enter onto the Property or to take such other actions
as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or
otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt
of any notice from any person or entity, including without limitation, the EPA, asserting the
existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the
Property which, if true, could result in an order, suit or other action against Trustor affecting any
part of the Property by any governmental agency or otherwise which, in the sole opinion of
Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and
expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed
of Trust and shall be payable by Trustor upon demand together with simple interest thereon at
the rate of 10% per annum.
(e) The foregoing representation, covenants, indemnities and warranties shall be
continuing and shall be true and correct for the period from the date hereof to the release of this
Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action
in lieu thereof), and these representations, covenants, indemnities and warranties shall survive
such release.
26. Choice of Law. This Deed of Trust shall be governed by and construed in accordance
with the laws of the State of California.
27. Non-Discrimination. Trustor covenants by and for itself and any successors in interest
that 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,
ancestry, familial status, source of income or disability in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Property, nor shall Trustor or any person claiming under
or through it establish or permit any such practice or practices of discrimination or segregation of
any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the Government Code, with reference to the selection, location, number, use or occupancy of
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tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants
shall run with the land.
28. Provisions to be Included in Documents. Trustor shall refrain from restricting the rental,
lease and sale of the Property and any dwelling unit thereon on the basis of race, color, creed,
religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of
income or disability of any person. All such deeds, leases or contracts for the rental, lease or sale
of the Property or any dwelling unit, shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
(a) Deeds. In deeds “The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, religion, sex,
sexual orientation, disability, medical condition, familial status, source of income, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under
or through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall
run with the land.”
(b) Leases. In leases “The lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease is made and accepted
upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or
group of persons, on account of race, color, religion, sex, sexual orientation,
disability, medical condition, familial status, source of income, marital status,
national origin or ancestry in the leasing, subleasing, renting, transferring, use,
occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself,
or any person claiming under or through it, establish or permit 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 in
the land herein leased.”
(c) Contracts. In contracts for the rental, lease or sale of the Property or any dwelling
unit “There shall be no discrimination against or segregation of any person or group of persons
on account of race, color, religion, sex, sexual orientation, disability, medical condition, familial
status, source of income, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees of the land.”
29. Authority to Sign. All individuals signing this Deed of Trust for a party which is a
corporation, a partnership or other legal entity, or signing under a power of attorney, or as a
9
trustee, guardian, conservator, or in any other legal capacity, covenant to the Beneficiary that
they have the necessary capacity and authority to act for, sign and bind the respective entity or
principal on whose behalf they are signing.
30. Recourse. This Deed of Trust is subject to the non-recourse limitations set forth in the
Note.
31. Low Income Housing Tax Credits. If the Property is allocated low-income housing tax
credits under the provisions of Sections 17058 and 23610.5 of the Revenue and Taxation Code of
State of California and/or under the Section 42 of the Internal Revenue Code of 1986, as
amended (“Code”), then the Property will be subject to certain requirements of Section 42 of the
Code, including, but not limited to Section 42(h)(6)(e)(ii), which does not permit the eviction or
termination of tenancy (other than for good cause) of an existing tenant of any low-income unit
or any increase in the gross rent with respect to such unit not otherwise permitted under Section
42 for a period of three (3) years after the date the Property is acquired by foreclosure or deed in
lieu of foreclosure. Beneficiary acknowledges the provisions of Section 42 of the Code and
agrees that, if and to the extent applicable to Beneficiary in connection with the Property,
Beneficiary will comply therewith.
TRUSTOR:
St. Regis Park CIC, LP, a California limited partnership
By:_____________________________________
Print Name:______________________________
Its:_____________________________________
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ACKNOWLEDGMENT
State of California )
)
County of San Diego )
On ____________________, 2019, before me, _________________________________, notary
public, personally appeared __________________________________________ who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrumentand 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.
WITNESS my hand and official seal.
Signature (Seal)
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Exhibit A-Property Description
All that certain real property situated in the City of Chula Vista, County of San Diego, State of
California, described as follows:
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DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND THE DEED OF TRUST
SECURING IT MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION
BEFORE RECONVEYANCE WILL BE MADE.
----------------------------------------------------------------------------------------------------------------
AMENDED AND RESTATED PROMISSORY NOTE
(St. Regis)
(“Note”)
Chula Vista, California April ___, 2019
This Amended and Restated Promissory Note amends and restates in its entirety that certain
Promissory Note Secured by Deed of Trust, dated as of June 1, 2000, in favor of the Redevelopment
Agency of the City of Chula Vista in the original principal amount of $1,387,152.00 (“Original
Note”). St. Regis Park CIC, LP, a California limited partnership (“Maker”) and the Chula Vista
Housing Authority as the Successor Housing Entity (“Housing Authority”), are all of the current
parties to the Original Note.
1. Principal and Interest. For value received, and for good and adequate consideration, the
receipt and sufficiency of which are hereby acknowledged, Maker promises to pay to the Housing
Authority, or order, at 276 Fourth Avenue, Chula Vista, California, 91910, or such other place as the
holder may from time to time designate by written notice to Maker, the principal sum not to exceed
$_________ (“Housing Authority Loan”), together with accrued interest commencing on the date
hereof. Interest shall accrue on the unpaid principal of the Housing Authority Loan at the rate of
three percent (3%) simple interest per annum, except in the event of a default under this Note or the
Declaration, as defined below, in which event ten percent (10%) simple interest shall be deemed to
have accrued as of the date of default under this Note. This Note is issued in conjunction with the
deed of trust (“Deed of Trust”) and the declaration of covenants, conditions and restrictions
(“Declaration”), which are both being recorded in the office of the County Recorder of San Diego
County concurrently herewith. The Deed of Trust and Declaration, and all other documents
executed by the parties in connection therewith, are sometimes collectively referred to herein as the
“Loan Documents.” The real property described in the Deed of Trust shall be referred to herein as
the “Property.” All capitalized terms which are not defined herein shall have the meaning ascribed
to them in the Loan Documents.
2. Residual Receipts Definitions.
(a) Residual Receipts Defined. “Residual Receipts” shall mean Gross Revenue less
Reasonable Operating Expenses, calculated on a calendar year basis, as provided herein. All
calculations of Residual Receipts shall be subject to verification and approval by the Housing
Authority.
(b) Gross Revenue Defined. “Gross Revenue” shall mean all revenue, income, receipts,
and other consideration actually received from the operation and leasing of the Property. Gross
Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants, all
1
cancellation fees; proceeds from vending and laundry room machines; the proceeds of business
interruption or similar insurance; the proceeds of casualty insurance to the extent not utilized to
repair or rebuild the Project; and condemnation awards for a taking of part or all of the Property for a
temporary period to the extent not used to repair or restore the Property. Gross Revenue shall not
include tenants’ security deposits, loan proceeds, capital contributions or similar advances or
payments from reserve funds.
(c) Reasonable Operating Expense Defined. “Reasonable Operating Expenses” shall
mean any and all reasonable and actually incurred costs associated with the ownership, operation,
use or maintenance of the Property, calculated in accordance with generally accepted accounting
principles to the extent approved by the Housing Authority in Maker’s annual operating budget,
expressly including, but not limited to, the following: (i) required debt service payments on any
loans which are senior to the Deed of Trust; (ii) the annual bond fee of $13,164.00; (iii) the annual
limited partner management fee (which shall not exceed $5,000.00 the first year after Project
completion and shall not increase by more than 3.0% any year thereafter); (iv) the annual general
partner management fee to Maker’s general partners (which shall not exceed $5,000.00 the first year
after Project completion and shall not increase by more than 3.0% any year thereafter); (v) the
annual deposit to the replacement reserve in the amount of $35,700.00 the first year after Project
completion and increased by 3.0% each year thereafter (Failure to maintain such reserve shall
constitute a material default under this Note. No disbursements from the replacement reserve
account shall be made without the express written consent of the City Manager.), plus any additional
replacement reserve deposit required by Borrower’s senior lender or Borrower’s limited partner; (vi)
water, sewer, electrical, gas, and other utility-type charges for the Property; (vii) costs to operate and
maintain the Property; (viii) insurance premiums; (ix) legal fees and expenses incurred in connection
with the management of the Property; (x) capital expenditures to the Property to comply with
applicable laws or otherwise to improve the operation or management of the Property to the extent
such capital expenditures are not made from reserves and are approved by the Housing Authority in
writing or by approval of the applicable budget setting forth such capital expenditures prior to Maker
undertaking such capital expenditures; (xi) costs for applying for and obtaining the welfare
exemption from the assessment of real estate taxes assessed against the Property; (xii) repayment of
any operating deficit loans or development deficit loans made to Maker by any of Maker’s partners;
and (xiii) any tax credit adjustment payments. In no event shall expenditures, including attorneys’
fees or litigation costs, normally required to be paid out of the Replacement Reserve, be treated as
Reasonable Operating Expenses unless specifically approved in writing by the Housing Authority.
For purposes of the foregoing definition of “Reasonable Operating Expenses,” any property
management fee or partnership management fee which is paid to Maker or an affiliate of Maker shall
at no time exceed an amount as is customary and standard for affordable housing projects similar in
size, scope and character to the Property. Notwithstanding the foregoing, for purposes of this
calculation, Reasonable Operating Expenses shall not include the following: principal and interest
payments on any debt subordinate to this Note, depreciation, amortization, depletion or other non-
cash expenses, incentive partnership asset management fees payable to the Maker or its affiliate
(other than the management fees described above), or any amount expended from a reserve account.
In the event that any of the above costs is incurred partially with respect to the Property, the parties
shall mutually agree upon an allocable portion of such costs which shall be deemed Reasonable
Operating Expenses of the Property.
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3. Term of Loan, Due Date and Right of Prepayment. Payments shall be due and payable on
the earliest of the following dates:
(a) $____________ shall be paid by Maker to the Housing Authority concurrently with
recordation of the Declaration and Deed of Trust in the office of the County Recorder of San Diego
County.
(b) Annually, beginning in 2020, Maker’s auditor shall calculate the Residual Receipts,
as defined herein, for the immediately previous calendar year as part of the annual audit, and
distribute those Residual Receipts (upon completion of such audit, but in no event later than
September 30 of each year) as follows: (i) 50% to pay the deferred developer fee until paid in full;
(ii) 90% of any amounts remaining after paying the amount set forth in (i) to the seller carryback
loan until paid in full; and (iii) pay the remainder of such Residual Receipts to the Housing
Authority.
(c) All principal and unpaid interest shall be due and payable by the Maker to the
Housing Authority on December 31, 2075.
(d) All principal and unpaid interest shall be due and payable concurrently with the
refinancing of any loan or other obligation secured all or in part by the Property.
(e) All principal and unpaid interest shall be due and payable concurrently with the sale,
transfer, conveyance or further encumbrance of all or any part of the Property, without the express
written consent of the Lender.
(f) All principal and accrued interest shall be due and payable by the Maker to the
Housing Authority upon acceleration of this Note, as set forth in Section 5, below.
This Note may be prepaid in whole or in part at any time and, from time to time, without
notice or penalty. Any prepayment shall be allocated first to unpaid interest then to unpaid principal.
Housing Authority reserves the right to approve all sales, transfers, conveyances, additional
encumbrances, or dispositions of the Property. Consent to one transaction of this type will not
constitute a waiver of the right to require consent to future or successive transactions.
4. Security for this Note. This Note is secured by the Deed of Trust of even date herewith
executed by Maker, which creates a lien on the Property and by the Loan Documents, including the
Security Agreement.
5. Acceleration Upon Default. In the event of any default under the terms of this Note, the
Deed of Trust, the Security Agreement, the Declaration, or any prior or subsequent loans, notes
and/or deed of trust, at the option of the holder of this Note, and after the expiration of any
applicable notice and cure period, all principal and interest under this Note shall immediately
become due and payable, without further notice. Failure to exercise such option shall not constitute
a waiver of the right to exercise such option in the event of any subsequent default. Without limiting
any other events of default contained herein, or in any of the Loan Documents, the failure to
complete rehabilitation of the Property to the satisfaction of the Housing Authority on or before
3
March 1, 2020, or such extended deadline commensurate with any extension of the maturity date of
the senior priority construction loan for the Property shall be considered an event of default, entitling
the Lender to accelerate the payment of principal and interest hereunder, as provided in this Section
5. Time is of the essence. Maker’s limited partner shall have the right, but not the obligation, to
cure defaults of Maker hereunder, and the Lender hereby agrees to accept any cure of any default
made or tendered by Maker’s limited partner on the same basis as if made or tendered by Maker.
Copies of all notices which are sent to Maker hereunder shall also be sent to Maker’s limited partner,
at:
Raymond James California Housing Opportunities Fund V L.L.C.
c/o Raymond James Tax Credit Funds, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716
Attention: Steven J. Kropf, President
Facsimile No.: 727-567-8455
6. Costs Paid by Maker. Maker agrees to pay the following costs, expenses, and attorneys’ fees
paid or incurred by the holder of this Note, or adjudged by a court: (a) reasonable costs of collection,
costs, and expenses, and attorneys’ fees paid or incurred in connection with the collection or
enforcement of this Note, whether or not suit is filed; and (b) costs of suit and such sum as the court
may adjudge as attorneys’ fees in any action to enforce payment of this Note or any part of it.
7. Payment and Interest Calculation. Principal and interest shall be payable in lawful money of
the United States of America. Interest shall be computed based on a 360-day year and 30-day
month. Payments shall be applied to interest first and then to any unpaid principal balance.
8. Waiver. Maker hereby waives diligence, presentment, protest and demand, notice of protest,
dishonor and nonpayment of this Note, and expressly agrees that, without in any way affecting the
liability of Maker hereunder, the Housing Authority may extend any maturity date or the time for
payment of any installment due hereunder, accept additional security, release any party liable
hereunder and release any security now or hereafter securing this Note. Maker further waives, to the
full extent permitted by law, the right to plead any and all statutes of limitations as a defense to any
demand on this Note, or on any deed of trust, security agreement, guaranty or other agreement now
or hereafter securing this Note.
9. Non-Recourse. This Note shall be non-recourse to the Maker and its partners.
10. Late Charge. In addition to the foregoing, if any installment due hereunder is not paid within
fifteen (15) days from the date due, Maker promises to pay a “late charge” of five percent (5%) of
the installment so overdue to defray the expense incident to handling any such delinquent payment
or payments.
11. Severability. If any provision of this Note is determined to be void by court of competent
jurisdiction, such determination shall not affect any other provision of this Note, and such other
provisions shall remain in full force and effect.
4
12. Non-Waiver. No delay in demanding or failure to demand performance hereunder shall
constitute a waiver by the holder of this Note of its right to subsequently demand such performance
or to exercise any remedies for any default hereunder. Further, in order to be effective, any waiver
of any of the Housing Authority’s rights and remedies hereunder shall be expressed in a writing
signed by the Housing Authority. Waiver by the Housing Authority of any right hereunder shall not
constitute a waiver of any other right, including but not limited to the right to exercise any and all
remedies for a different or subsequent event of default hereunder.
13. Replacement Note. The undersigned agrees that, in the event that this Note shall become lost
or stolen, then upon request of the Housing Authority, the undersigned shall execute a replacement
Note incorporating the terms hereof, provided that the Housing Authority shall furnish a written
agreement to indemnify the undersigned against all losses, costs, and damages arising from a
duplicative demand for payment under this Note.
14. Interpretation. This Note shall be governed and interpreted in accordance with applicable
California law.
15. Signature Authority. All individuals signing this Note for a party which is a corporation,
limited liability company, partnership or other legal entity, or signing under a power of attorney, or
as a trustee, guardian, conservator, or in any other legal capacity, covenant to the Housing Authority
that they have the necessary capacity and authority to act for, sign and bind the respective entity or
principal on whose behalf they are signing.
MAKER:
St. Regis Park CIC, LP, a California limited partnership
By:_____________________________________
Print Name:______________________________
Its:_____________________________________
\[SIGNATURES CONTINUED ON FOLLOWING PAGE\]
5
HOUSING AUTHORITY:
Chula Vista Housing Authority as the Successor Housing Entity
By:______________________________________
Gary Halbert, Director
APPROVED AS TO FORM:
By:______________________________________
Glen R. Googins, Housing Authority Attorney
6
ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT
(St. Regis Promissory Note)
THIS ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT (“Agreement”) is
dated as of the ___ day of April 1, 2019, by St. Regis Park, L.P., a California limited partnership
(“Assignor”), St. Regis Park CIC, LP, a California limited partnership (“Assignee”), and the
Chula Vista Housing Authority as the Successor Housing Entity (“Housing Authority”).
RECITALS
A. The Assignor and the Housing Authority are all of the current parties to that
certain Promissory Note Secured by Deed of Trust, dated as of June 1, 2000, made by Assignor
in favor of the Redevelopment Agency of the City of Chula Vista in the original principal
amount of $1,387,152.00 (“Note”).
B. The Housing Authority is the successor in interest to the Redevelopment Agency
of the City of Chula Vista. The Assignor desires to assign all of its interest in the Note to the
Assignee, and the Assignee desires to assume all rights and obligations of the Assignor with
respect to the Note.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Housing Authority, Assignor and Assignee hereby agree as
follows:
1. Assignment and Assumption. Effective as of the date the Assignee acquires title to the
real property securing the Note, the Assignor assigns all of its rights, title, obligations and
interest in and to the Note to the Assignee, and the Assignee does hereby assume, and agrees to
perform all of the obligations, covenants, liabilities and duties of the Assignor under, the Note, in
the manner, at the times and in all other respects as therein provided. The Assignee further
agrees to be bound by each and every term, covenant and condition contained in the Note and
agrees that each and every obligation will be performed and carried out as though the Note had
been originally made, executed and delivered by the Assignee.
2. Housing Authority Consent. The Housing Authority hereby consents to the assignment
and assumption of the Note as set forth in this Agreement. The consent of the Housing Authority
to the assignment to and assumption by the Assignee of the Note, as contemplated by this
Agreement shall not be deemed to be a consent to any other or subsequent assignments of the
same, or any part thereof, or any interest therein, and all rights and privileges of the Housing
Authority to approve assignments of the Note are hereby expressly reserved and retained by the
Housing Authority.
3. General Provisions.
(a) Binding Effect/No Third Party Beneficiaries. All of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit to the parties hereto and respective
heirs, legal representatives, successors and assigns. This Agreement is made for the sole benefit
1
and protection of the parties hereto, and their successors and assigns, and no other party shall
have any right of action or right to rely hereon.
(b) No Novation. Except as otherwise set forth in this Agreement, the parties agree
that this Agreement is not in any way intended to, and does not, revise, amend or otherwise
affect any of the terms, conditions or priority of the Note or any other agreement or document by
and between the Housing Authority, Assignor or the Assignee, nor the enforcement thereof. The
parties hereby agree the provisions of the Note and all other agreements or documents by and
between the Housing Authority, Assignor or the Assignee shall be and remain unmodified,
except as set forth in this Agreement, and in full force and effect.
(c) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
(d) Signature Authority. All individuals signing this Amendment for a party which is
a corporation, partnership, limited liability company or other legal entity, or signing under a
power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant
to the other parties hereto that they have the necessary capacity and authority to act for, sign and
bind the respective entity or principal on whose behalf they are signing.
ASSIGNOR:
St. Regis Park, L.P., a California limited partnership
By:_____________________________________
Print Name:______________________________
Its:_____________________________________
\[SIGNATURES CONTINUED ON FOLLOWING PAGE\]
2
ASSIGNEE:
St. Regis Park CIC, LP, a California limited partnership
By:_____________________________________
Print Name:______________________________
Its:_____________________________________
\[SIGNATURES CONTINUED ON FOLLOWING PAGE\]
3
HOUSING AUTHORITY:
Chula Vista Housing Authority as the Successor Housing Entity
By:______________________________________
Gary Halbert, Director
APPROVED AS TO FORM:
By:______________________________________
Glen R. Googins, City Attorney
4
Stradling Yocca Carlson & Rauth
Draft dated March 15, 2019
FUNDING LOAN AGREEMENT
among
CITIBANK, N.A.,
as Funding Lender
and
CHULA VISTA HOUSING AUTHORITY,
as Governmental Lender
and
U.S. BANK NATIONAL ASSOCIATION,
as Fiscal Agent
dated as of ______________ 1, 2019
relating to:
$______________
Chula Vista Housing Authority
Multifamily Housing Revenue Note
(St. Regis Park Apartments) 2019 Series B-1
$______________
Chula Vista Housing Authority
Multifamily Housing Revenue Note
(St. Regis Park Apartments) 2019 Series B-2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1Definitions.................................................................................................................2
Section 1.2Effect of Headings and Table of Contents..............................................................11
Section 1.3Date of Funding Loan Agreement...........................................................................11
Section 1.4Designation of Time for Performance.....................................................................11
Section 1.5Interpretation...........................................................................................................11
ARTICLE II
TERMS; GOVERNMENTAL LENDER NOTES
Section 2.1Terms.......................................................................................................................12
Section 2.2Form of Governmental Lender Notes......................................................................14
Section 2.3Execution and Delivery of Governmental Lender Notes........................................14
Section 2.4Required Transferee Representations; Participations; Sale and Assignment..........14
ARTICLE III
PREPAYMENT
Section 3.1Prepayment of the Governmental Lender Notes from Prepayment under the
Corresponding Borrower Notes...............................................................................15
Section 3.2Notice of Prepayment..............................................................................................15
ARTICLE IV
SECURITY
Section 4.1Security for the Funding Loan.................................................................................16
Section 4.2Delivery of Security................................................................................................17
ARTICLE V
LIMITED LIABILITY
Section 5.1Source of Payment of Funding Loan and Other Obligations..................................17
Section 5.2Exempt from Individual Liability............................................................................18
ARTICLE VI
CLOSING CONDITIONS; APPLICATION OF FUNDS
Section 6.1Conditions Precedent to Closing.............................................................................18
ARTICLE VII
FUNDS AND ACCOUNTS
Section 7.1Authorization to Create Funds and Accounts..........................................................19
Section 7.2Investment of Funds................................................................................................19
Section 7.3Establishment of Funds...........................................................................................20
Section 7.4FundingLoan Payment Fund..................................................................................20
Section 7.5Expense Fund..........................................................................................................21
Section 7.6Closing Costs Fund..................................................................................................21
Section 7.7Project Fund.............................................................................................................22
Section 7.8Rebate Fund.............................................................................................................24
i
TABLE OF CONTENTS
continued)
(
Page
Section 7.9Investments..............................................................................................................25
ARTICLE VIII
REPRESENTATIONS AND COVENANTS
Section 8.1General Representations..........................................................................................26
Section 8.2No Encumbrance on Security..................................................................................27
Section 8.3Repayment of Funding Loan...................................................................................27
Section 8.4Servicer....................................................................................................................27
Section 8.5Borrower Loan Agreement Performance................................................................27
Section 8.6Maintenance of Records; Inspection of Records.....................................................28
Section 8.7Tax Covenants.........................................................................................................28
Section 8.8Performance by the Borrower.................................................................................29
ARTICLE IX
DEFAULT; REMEDIES
Section 9.1Events of Default.....................................................................................................29
Section 9.2Acceleration of Maturity; Rescission and Annulment............................................30
Section 9.3Additional Remedies; Funding Lender Enforcement..............................................31
Section 9.4Application of Money Collected.............................................................................32
Section 9.5Remedies Vested in Funding Lender......................................................................33
Section 9.6Restoration of Positions...........................................................................................33
Section 9.7Rights and Remedies Cumulative...........................................................................33
Section 9.8Delay or Omission Not Waiver...............................................................................33
Section 9.9Waiver of Past Defaults...........................................................................................33
Section 9.10Remedies Under Borrower Loan Agreement or Borrower Notes...........................33
Section 9.11Waiver of Appraisement and Other Laws...............................................................34
Section 9.12Suits to Protect the Security....................................................................................34
Section 9.13Remedies Subject to Applicable Law......................................................................34
Section 9.14Assumption of Obligations......................................................................................34
ARTICLE X
AMENDMENT; AMENDMENTOF BORROWER LOAN AGREEMENT
AND OTHER DOCUMENTS
Section 10.1Amendment of Funding Loan Agreement...............................................................35
Section 10.2Amendments Require Funding Lender Consent.....................................................35
Section 10.3Consents and Opinions............................................................................................35
ARTICLE XI
THE FISCAL AGENT
Section 11.1Appointment of Fiscal Agent; Acceptance..............................................................35
Section 11.2Certain Duties and Responsibilities of Fiscal Agent...............................................35
Section 11.3Notice of Defaults....................................................................................................36
Section 11.4Certain Rights of Fiscal Agent................................................................................37
Section 11.5Not Responsible for Recitals...................................................................................38
Section 11.6May Hold Funding Loan.........................................................................................38
ii
TABLE OF CONTENTS
continued)
(
Page
Section 11.7Moneys Held Hereunder..........................................................................................38
Section 11.8Compensation and Reimbursement.........................................................................38
Section 11.9Fiscal Agent Required; Eligibility...........................................................................39
Section 11.10Resignation and Removal; Appointment of Successor...........................................39
Section 11.11Acceptance of Appointment by Successor..............................................................40
Section 11.12Merger, Conversion, Consolidation or Succession to Business..............................40
Section 11.13Appointment of Co-Fiscal Agent............................................................................41
Section 11.14Loan Servicing.........................................................................................................41
Section 11.15No Recourse Against Officers or Employees of Fiscal Agent................................41
ARTICLE XII
MISCELLANEOUS
Section 12.1Notices.....................................................................................................................42
Section 12.2Term of Funding Loan Agreement..........................................................................44
Section 12.3Successors and Assigns...........................................................................................44
Section 12.4Legal Holidays.........................................................................................................44
Section 12.5Governing Law........................................................................................................45
Section 12.6Severability..............................................................................................................45
Section 12.7Execution in Several Counterparts..........................................................................45
Section 12.8Nonrecourse Obligation of the Borrower................................................................45
Section 12.9Waiver of Trial by Jury...........................................................................................45
Section 12.10Electronic Transactions...........................................................................................45
Section 12.11Reference Date........................................................................................................45
EXHIBITAFORM OF GOVERNMENTAL LENDER NOTES................................................A-1
EXHIBITBFORM OF REQUIRED TRANSFEREE REPRESENTATIONS............................B-1
EXHIBITCFORM OF WRITTEN REQUISITION OF THE BORROWER –PROJECT
FUND........................................................................................................................C-1
EXHIBITDFORM OF WRITTEN REQUISITION OF THE BORROWER –CLOSING
COSTS FUND..........................................................................................................D-1
EXHIBITEFISCAL AGENT WIRING INSTRUCTIONS.........................................................E-1
iii
FUNDING LOAN AGREEMENT
This Funding Loan Agreement, dated as of ______________ 1, 2019(this “Funding Loan
Agreement”), is entered into by CITIBANK, N.A., (together with any successor hereunder, the
“Funding Lender”), the CHULA VISTA HOUSING AUTHORITY, a public body corporate and
politic, organized and existing under the laws of the State of California (together with its successors
and assigns, the “Governmental Lender”) and U.S. BANK NATIONAL ASSOCIATION,a
national banking association duly organized and existing under the laws of the United States of
America, as fiscal agent (together with its successors and assigns, the “Fiscal Agent”).
R E C I T A L S :
, the Governmental Lender is a public body, corporate and politic, duly
WHEREAS
organized and validly existing under the laws of the State of California; and
WHEREAS, the Governmental Lender is empowered pursuant to Chapter 1 of Part 2 of
Act”) to: (a)make loans to any person to
Division 24 of the California Health and Safety Code (the “
provide financing for residential rental developments located within the jurisdiction of the
Governmental Lender and intended to be occupied in part by persons of low and moderate income;
(b)incur indebtedness for the purpose of obtaining moneys to make such loans andprovide such
financing, to establish any required reserve funds and to pay administrative costs and other costs
incurred in connection with the incurrence of such indebtedness of the Governmental Lender; and
(c)pledge all or any part of the revenues, receipts or resources of the Governmental Lender,
including the revenues and receipts to be received by the Governmental Lender from or in connection
with such loans, and to mortgage, pledge or grant security interests in such loans or other property of
the Governmental Lender in order to secure the payment of the principal of, prepayment premium, if
any, on and interest on such indebtedness of the Governmental Lender; and
WHEREAS, ST. REGIS PARK CIC, LP, a California limited partnership (the “Borrower”),
has requested that the Governmental Lender enter into this Funding Loan Agreement under which
the Funding Lender will (i)advance funds (the “Funding Loan”) to or for the account of the
Governmental Lender, and (ii)apply the proceeds of the Funding Loan to make a loan (the
“Borrower Loan”) to the Borrower to finance the acquisition, rehabilitation and equipping of a 118
unitplus1 manager’s unitmultifamily rental housing project located at 1025 Broadwayin the City of
Chula Vista, County of San Diego, California, known as St. Regis Park Apartments; and
WHEREAS, simultaneously with the delivery of this Funding Loan Agreement, the
Governmental Lender and the Borrower will enter into a Borrower Loan Agreement of even date
Borrower Loan Agreement”), whereby the
herewith (as it may be supplemented or amended, the “
Borrower agrees to make loan payments to the Governmental Lender in an amount that, when added
to other funds available under this Funding Loan Agreement, will be sufficient to enable the
Governmental Lender to repay the Funding Loan and to pay all costs and expenses related thereto
when due; and
WHEREAS, to evidence its payment obligations under the Borrower Loan Agreement, the
Borrower will execute and deliver to the Governmental Lender its Borrower Notes(as defined
herein) and the obligations of the Borrower under the Borrower Noteswill be secured by a lien on
and security interest in the Project (as defined herein) pursuant to a Multifamily Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing (California), of even date herewith (the
Security Instrument”), made by the Borrower in favor of the Governmental Lender, as assigned to
“
the Funding Lender to secure the performance by the Governmental Lender of its obligations under
the Funding Loan; and
WHEREAS, the Governmental Lender has executed and delivered to the Funding Lender its
Governmental Lender Notes(as defined herein),evidencing its obligation to make the payments due
to the Funding Lender under the Funding Loan as provided in this Funding Loan Agreement, all
things necessary to make the Funding Loan Agreement thevalid, binding and legal limited obligation
of the Governmental Lender, have been done and performed and the execution and delivery of this
Funding Loan Agreement and the execution and delivery of the Governmental Lender Notes, subject
to the terms hereof, have in all respects been duly authorized.
A G R E E M E N T :
, in consideration of the premises and the mutual representations,
NOW, THEREFORE
covenants and agreements herein contained, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1Definitions. For all purposes of this Funding Loan Agreement, except as
otherwise expressly provided or unless the context otherwise clearly requires:
(a)Unless specifically defined herein, all capitalized terms shall have the
meanings ascribed thereto in the Borrower Loan Agreement.
(b)The terms “herein, “hereof”and “hereunder”and other words of similar
import refer to this Funding Loan Agreement as a whole and not to any particular Article, Section or
other subdivision. The terms “agree”and “agreements”contained herein are intended to include and
mean “covenant”and “covenants.”
(c)All references made (i)in the neuter, masculine or feminine gender shall be
deemed to have been made in all such genders, and (ii)in the singular or plural number shall be
deemed to have been made, respectively, in the plural or singular number as well. Singular terms
shall include the plural as well as the singular, and vice versa.
(d)All accounting terms not otherwise defined herein shall have the meanings
assigned to them, and all computations herein provided for shall be made, in accordance with the
Approved Accounting Method. All references herein to “Approved Accounting Method”refer to
such principles as they exist at the date of application thereof.
(e)All references in this instrument to designated “Articles,”“Sections”and
other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as
originally executed.
(f)All references in this instrument to a separate instrument are to such separate
instrument as the same may be amended or supplemented from time to time pursuant to the
applicable provisions thereof.
2
(g)References to the Governmental Lender Notesas “tax-exempt”or to the “tax-
exempt status”of the Governmental Lender Notesare to the exclusion of interest on the
Governmental Lender Notes(other than any portion of the Governmental Lender Notesheld by a
“substantial user”of the Project or a “related person”within the meaning of Section 147 of the Code)
from gross income for federal income tax purposes pursuant to Section 103(a) of the Code.
(h)The following terms have the meanings set forth below:
“Act”means Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code.
“Additional Borrower Payments”shall have the meaning given such term in the Borrower
Loan Agreement.
Affiliate”means, as to any Person, any other Person that, directly or indirectly, is in Control
“
of, is Controlled by or is under common Control with such Person.
ApprovedTransferee”means (a)a “qualified institutional buyer”(“QIB”) as defined in
“
Rule 144A promulgated under the Securities Act that is a financial institution or commercialbank
having capital and surplus of $5,000,000,000 or more, (b)an affiliate of the Funding Lender, or (c)a
trust or custodial arrangement established by the Funding Lender or one of its affiliates the beneficial
interests in which will be owned only by QIBs.
“Authorized Amount”means $21,400,000, the maximum principal amount of the Funding
Loan under this Funding Loan Agreement.
Authorized Governmental Lender Representative”means the Chairperson, Vice
“
Chairperson, Executive Director, or Treasurer, or any person or persons designated to act on behalf
of the Governmental Lender by a certificate filed with the Borrower, Funding Lender and Servicer, if
any, containing the specimen signatures of such person or persons and signed on behalf of the
Governmental Lender by its Chairperson, Vice Chairperson, Executive Director, or Treasurer.
“Borrower”means St. Regis Park CIC, LP, a California limited partnership.
“Borrower Loan”shall mean the mortgage loan made by the Governmental Lender to the
Borrower pursuant to the Borrower Loan Agreement in the aggregate principal amount of the
Borrower Loan Amount, as evidenced by the Borrower Notes.
“Borrower Loan Agreement”shall mean the Borrower Loan Agreement, of even date
herewith, between the Governmental Lender and the Borrower, as supplemented, amended or
replaced from time to time in accordance with its terms.
Borrower Loan Agreement Default”shall mean any event of default set forth in
“
Section8.1 of the Borrower Loan Agreement. A Borrower Loan Agreement Default shall “exist”if a
Borrower Loan Agreement Default shall have occurred and be continuing beyond any applicable
cure period.
“Borrower Loan Amount”shall mean $21,400,000, the maximum principal amount of the
Borrower Loan under the Borrower Loan Agreement.
3
Borrower Loan Documents”shall have the meaning given such term in the Borrower Loan
“
Agreement.
Borrower Notes”shall mean, collectively, the Series B-1Borrower Note and the Series B-2
“
Borrower Note.
“Business Day”shall mean any day other than (i)a Saturday or a Sunday, or (ii)a day on
which federally insured depository institutions in New York, New York or California are authorized
or obligated by law, regulation, governmental decree or executive order to be closed.
“Closing Costs”has the meaning given to the term Costs of Funding in the Borrower Loan
Agreement.
Closing Date”shall mean ____________, 2019, the date that initial Funding Loan proceeds
“
are disbursed hereunder.
Code”means the Internal Revenue Code of 1986 as in effect on the date of execution and
“
delivery of the Governmental Lender Notesor (except as otherwise referenced herein) as it may be
amended to apply to obligations issued on the Closing Date, together with applicable proposed,
temporary and final regulations promulgated, and applicable official public guidance published,
under the Code.
“Construction Funding Agreement”means that certain Construction Funding Agreement
of even date herewith, between the Funding Lender, as agent for the Governmental Lender, and
Borrower, pursuant to which the Borrower Loan will be advanced by the Funding Lender (or the
Servicer on its behalf), as agent of the Governmental Lender, to the Fiscal Agent for disbursement to
the Borrower and setting forth certain provisions relating to disbursement of the Borrower Loan
during construction, insurance and other matters, as such agreement may be amended, modified,
supplemented and replaced from time to time.
“Contingency Draw-Down Agreement”means the Contingency Draw-Down Agreement of
even date herewith among the Fiscal Agent, the Funding Lender and the Borrower relating to
possible conversion of the Funding Loan from a draw down loan to a fully funded loan.
“Control”shall mean, with respect to any Person, either (a)ownership directly or through
other entities of more than 50% of all beneficial equity interest in such Person, or (b)the possession,
directly or indirectly, of the power to direct or cause the directionof the management and policies of
such Person, through the ownership of voting securities, by contract or otherwise.
Conversion”has the meaning given to such term in the Borrower Loan Agreement.
“
Conversion Date”shall have the meaning given such term in the Construction Funding
“
Agreement.
“Default”shall mean the occurrence of an event, which, under any Funding Loan Document,
would, but for the giving of notice or passage of time, or both, be an event of default under the
applicable Funding Loan Document or a Borrower Loan Agreement Default.
4
Draw-Down Notice”shall mean a notice described in Section 1.01 of the Contingency
“
Draw-Down Agreement regarding the conversion of the Funding Loan from a draw down loan to a
fully funded loan.
“Equity Investor”shall mean Raymond James California Housing Opportunities FundVI
L.L.C., a Florida limited liability company, and its permitted successors and assigns.
“Event of Default”shall have the meaning ascribed thereto in Section 9.1 hereof.
“Fair Market Value”shall mean the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date
the contract to purchase or sell the investment becomes binding) if the investment is traded on an
established securities market (within the meaning of section1273 of the Code) and, otherwise, the
term “Fair Market Value”means the acquisition price in a bona fide arm’s length transaction (as
referenced above) if (a)the investment is a certificate of deposit that is acquired in accordance with
applicable regulations under the Code, (b)the investment is an agreement with specifically
negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for
example, a guaranteed investment contract, a forward supply contract or other investment agreement)
that is acquired in accordance with applicable regulations under the Code, (c)the investment is a
United States Treasury Security--State and Local Government Series that isacquired in accordance
with applicable regulations of the United States Bureau of Public Debt, or (d)any commingled
investment fund in which the City and related parties do not own more than a ten percent (10%)
beneficial interest therein if the return paid by the fund is without regard to the source of the
investment. To the extent required by the Regulations, the term “investment”will include a hedge.
Fiscal Agent”shall mean U.S. Bank National Association, which entity is appointed
“
pursuant to Section11.1 to serve as Fiscal Agent under this Funding Loan Agreement, and any
successor thereto pursuant to Section 11.10.
“Fiscal Agent’s Fees”shall mean the annual administration fee for the Fiscal Agent’s
ordinary fees and expenses in rendering its services under this Funding Loan Agreement during each
12-month period, payable annually in arrears beginning \[May1, 2020\], which fee is equal to (and
shall not exceed) the greater of \[(a)$1,500.00 and (b)(i)prior to the Conversion Date, 0.00028 times
theAuthorized Amount, and (ii)following the ConversionDate,0.00028 timesthe outstanding
principal amount of the Funding Loan as of such date.\]
Funding Lender”shall mean Citibank N.A., a national banking association, and any
“
successor under this Funding Loan Agreement and the Borrower Loan Documents.
Funding Loan Agreement”shall mean this Funding Loan Agreement, by and among the
“
Funding Lender, the Governmental Lender and the Fiscal Agent, as it may from time to time be
supplemented, modified or amended by one or more agreementsor other instruments supplemental
hereto entered into pursuant to the applicable provisions hereof.
“Funding Loan Documents”shall mean (a)this Funding Loan Agreement, (b)the Borrower
Loan Agreement, (c)the Regulatory Agreement, (d)the Tax Certificate, (e)the Borrower Loan
Documents, (f)all other documents evidencing, securing, governing or otherwise pertaining to the
Funding Loan, and (g)all amendments, modifications, renewals and substitutions of any of the
foregoing.
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Governmental Lender”shall mean the Chula Vista Housing Authority.
“
Governmental Lender Notes”shall mean, collectively, the Series B-1Governmental
“
Lender Note and the Series B-2Governmental Lender Note; and a “Governmental Lender Note”
shall mean one of such Governmental Lender Notes.
“Highest Rating Category”shall mean, with respect to a Permitted Investment, that the
Permitted Investment is rated by S&P or Moody’s in the highest rating category given by that rating
agency for that general category of security. By way of example, the Highest Rating Category for
tax-exempt municipal debt established by S&P is “A1+”for debt with a term of one year or less and
“AAA”for a term greater than one year, with corresponding ratings by Moody’s of “MIG1”(for
fixed rate) or “VMIG1”(for variable rate) for three months or less and “Aaa”for greater than three
months. If at any time (a)both S&P and Moody’s rate a Permitted Investment and (b)one of those
ratings is below the Highest Rating Category, then such Permitted Investment will, nevertheless, be
deemed to be rated in the Highest Rating Category if the lower rating is no more than one rating
category below the highest rating category of that rating agency. For example, a Permitted
Investment rated “AAA”by S&P and “Aa3”by Moody’s is rated in the Highest Rating Category. If,
however, the lower rating is more than one full rating category below the Highest Rating Category of
that rating agency, then the Permitted Investment will be deemed to be rated below the Highest
Rating Category. For example, a Permitted Investment rated “AAA”by S&P and “A1”by Moody’s
is not rated in the Highest Rating Category.
Maturity Date”shall mean (i)with respect to the Series B-1Governmental Lender Note
“
\[November1, 2051\], and (ii)with respect to the Series B-2Governmental Lender Note \[November1,
2021\].
Maximum Rate”shall mean the lesser of (a)12% per annum, and (b)the maximum interest
“
rate that may be paid on the Funding Loan under State law.
“Minimum Beneficial Ownership Amount”shall mean an amount no less than fifteen
percent (15%) of the outstanding principal amount of the Funding Loan, or the full outstanding
principal amount of the Funding Loan, if such principal amount is less than $100,000.
“Moody’s”shall mean Moody’s Investors Service, Inc., or its successor.
“Negative Arbitrage Account”means the Negative Arbitrage Account of the Project Fund
established under Section 7.3, as otherwise described in the Contingency Draw-Down Agreement.
Negative Arbitrage Deposit”has the meaning set forth in the Contingency Draw-Down
“
Agreement.
Noteowner”or “owner of the Governmental Lender Notes”means the owner of the
“
Governmental Lender Notesas shown on the registration books maintained by the Funding Lender
pursuant to Section 2.4(e).
“Ongoing Governmental Lender Fee”shall mean the ongoing portion of the Annual
Administration Fee(as that term is defined in the Regulatory Agreement) that is payable after the
Closing Date.
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Opinion of Counsel”shall mean a written opinion from an attorney or firm of attorneys,
“
acceptable to the Funding Lender and the Governmental Lender with experience in the matters to be
covered in the opinion; provided that whenever an Opinion of Counsel is required to address the
exclusion of interest on the Governmental Lender Notesfrom gross income for purposes of federal
income taxation, such opinion shall be provided by Tax Counsel.
“Permitted Investments”shall mean, to the extent authorized by law for investment of any
moneys held under this Funding Loan Agreement, but only to the extent that the same are acquired at
Fair Market Value:
(a)Direct obligations of the United States of America including obligations
issued or held in book-entry form on the books of the Department of the Treasury of the United
Government Obligations”).
States of America (“
(b)Direct obligations of, and obligations on which the full and timely payment of
principal and interest is unconditionally guaranteed by, any agency or instrumentality of the United
States of America or direct obligations of the World Bank, which obligations are rated in the Highest
Rating Category.
(c)Demand deposits or time depositswith certificates of deposit issued by the
Fiscal Agent or its affiliates or any bank organized under the laws of the United States of America or
any state or the District of Columbia which has combined capital, surplus and undivided profits of
not less than $50,000,000 and maturing in less than 365 days; provided that the Fiscal Agentor such
other institution has been rated at least “VMIG-1”/”A-1+”by Moody’s/S&Pwhich deposits or
certificates are fully insured by the Federal Deposit Insurance Corporation or collateralized pursuant
to the requirements of the Office ofthe Comptroller of the Currency.
(d)Bonds (including tax-exempt bonds), bills, notes or other obligations of or
secured by Fannie Mae, Freddie Mac, the Federal Home Loan Bank or the Federal Farm Credit
Bank.
(e)Money market funds rated AAA by S&P which are registered with the
Securities and Exchange Commission and which meet the requirements of Rule 2(a)(7) of the
Investment Company Act of 1940, as amended, which may be administered by the Fiscal Agent or its
affiliates.
(f)Collateralized Investment Agreements or Repurchase Agreements with
financial institutions rated in the “A”category or higher without regard to qualifiers, by at least one
Rating Agency. The agreement must be continually collateralized with obligations specified in
paragraphs (a), (b) and/or (d) above, eligible for wire through the Federal Reserve Bank System or
the DTC/PTC as applicable, and at a level of at least 103% of the amount on deposit and valued no
less than daily. The collateral must be held by a third party custodian and be free and clear of all
liens and claims of third parties. Securities must be valued daily, marked-to-market at current market
price plus accrued interest. If the market value of the securities is found to be below the required
level, the provider must restore the market value ofthe securities to the required level within one (1)
business day. Permitted collateral must be delivered to and held in a segregated account by the
Fiscal Agent or a custodian (the “Collateral Agent”), and the Collateral Agent cannot be the provider.
Thecollateral must be delivered to the Collateral Agent before/simultaneous with payment
(perfection by possession of certificated securities). Acceptable collateral must be free and clear of
7
all liens and claims of third parties and shall be registered in the name of the Collateral Agent for the
benefit of the Governmental Lender and Fiscal Agent. The agreement shall state that the Collateral
Agent has a valid and perfected first priority security interest in the securities, any substituted
securities and all proceeds thereof.
(g)Any other investment authorized by the laws of the State, if such investment
is approved in advance inwriting by the Funding Lenderin its sole discretion.
Permitted Investments shall not include any of the following:
(1)Except for any investment described in the next sentence, any investment or
any agreement with a maturity profilegreater than the date(s) on which funds
representing the corpusof the investmentmay be needed under the Funding
Loan Documents. This exception (1) shall not apply to Permitted
Investments listed in paragraph (g).
(2)Any obligation bearing interest at an inverse floating rate.
(3)Any investment which may be prepaid or called at a price less than its
purchase price prior to stated maturity.
(4)Any investment the interest rate on which is variable and is established other
than by reference to a single index plus a fixed spread, if any, and which
interest rate moves proportionately with that index.
Person”shall mean any individual, corporation, limited liability company, partnership, joint
“
venture, estate, trust, unincorporated association, any federal, state, county or municipal government
or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of
any of the foregoing.
Pledged Revenues”shall mean the amounts pledged under this Funding Loan Agreement to
“
the payment of the principal of, prepayment premium, if any, and interest on the Funding Loan and
the Governmental Lender Notes, consisting of the following: (i)all income, revenues, proceeds and
other amounts to which the Governmental Lender is entitled (other than amounts received by the
Governmental Lender with respect to the Unassigned Rights) derived from or in connection with the
Project and the Funding Loan Documents, including all Borrower Loan Payments due under the
Borrower Loan Agreement and the Borrower Notes, payments with respect to the Borrower Loan
Payments and all amounts obtained through the exercise of the remedies provided in the Funding
Loan Documents and all receipts credited under the provisions of this Funding Loan Agreement
against said amounts payable, and (ii)moneys held in the funds and accounts established under this
Funding Loan Agreement, together with investment earnings thereon.
“Prepayment Premium”shall mean (i)any premium payable by the Borrower pursuant to
the Borrower Loan Documents in connection with a prepayment of the Borrower Notes(including
any prepayment premium as set forth in the Borrower Notes) and (ii)anypremium payable on the
Governmental Lender Notespursuant to this Funding Loan Agreement.
“Project”shall have the meaning given to that term in the Borrower Loan Agreement.
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Regulations”shall mean with respect to the Code, the relevant U.S. Treasury regulations
“
and proposed regulations thereunder or any relevant successor provision to such regulations and
proposed regulations.
“Regulatory Agreement”shall mean that certain Regulatory Agreement and Declaration of
Restrictive Covenants, dated as of the date hereof, betweenthe Governmental Lender and the
Borrower, as hereafter amended or modified.
“Remaining Funding Loan Proceeds Account”meansthe Remaining Funding Loan
Proceeds Accountof the Project Fund established under Section 7.3, as otherwise describedin the
Contingency Draw-Down Agreement.
Remaining Funding Loan Proceeds Account Earnings Subaccount”has the meaning set
“
forth in the Contingency Draw-Down Agreement.
Required Transferee Representations”shall mean the representations in substantially the
“
form attached to this Funding Loan Agreement as ExhibitB.
“Resolution”shall mean the resolution of the Governmental Lender authorizing the Funding
Loan and the execution and delivery of the Funding Loan Documents to which the Governmental
Lender is a party.
“Responsible Officer” means, when used with respect to the Fiscal Agent, the president, any
vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, any senior associate, any associate or any other officer of the Fiscal Agent within
the corporate trust office designated for the Fiscal Agent in Section12.1 hereof (or any successor
corporate trust office, the “Corporate Trust Office”) customarily performing functions similarto
those performed by the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred at the Corporate Trust Office because of such person’s knowledge
of and familiarity with the particular subject and having direct responsibility for the administration of
this Funding Loan Agreement.
“Securities Act”shall mean the Securities Act of 1933, as amended.
“Security”shall have the meaning assigned to it in Section 4.1.
“Security Instrument”shall mean the Multifamily Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing (California) (as amended, restated and/or supplemented from
time to time) of even date herewith, made by the Borrower in favor of the Governmental Lender, as
assigned to theFunding Lender to secure the performance by the Governmental Lender of its
obligations under the Funding Loan.
Series B-1Borrower Note” shall mean that certain Multifamily Note, dated the Closing
“
Date, in the original maximum principal amount of $______________, made by the Borrower and
payable to the Governmental Lender, evidencing the loan of the proceeds of the Series B-1
Governmental Lender Note, as endorsed and assigned by the Governmental Lender without recourse
to the Funding Lender, as executed by the Borrower, and as it may thereafter be amended or
supplemented from time to time.
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Series B-1Governmental Lender Note” shall mean that certain Chula Vista Housing
“
AuthorityMultifamily HousingRevenue Note (St. Regis Park Apartments)2019 Series B-1,dated
the Closing Date, in the original maximum principal amount of $______________, made by the
Governmental Lender and payable to the Funding Lender, as executed by the Governmental Lender
and as it may thereafter be amended or supplemented from time totime.
“Series B-2Borrower Note” shall mean that certain Multifamily Note, dated the Closing
Date, in the original maximum principal amount of $______________, made by the Borrower and
payable to the Governmental Lender, evidencing the loan of the proceeds of the Series B-2
Governmental Lender Note, as endorsed and assigned by the Governmental Lender without recourse
to the Funding Lender, as executed by the Borrower, and as it may thereafter be amended or
supplemented from time to time.
Series B-2Governmental Lender Note” shall mean that certain Chula Vista Housing
“
AuthorityMultifamily HousingRevenue Note (St. Regis Park Apartments) 2019 Series B-2, dated
the Closing Date, in the original maximum principal amount of $______________, made by the
Governmental Lender and payable to the Funding Lender, as executed by the Governmental Lender
and as it may thereafter be amended or supplemented from time to time
“Servicer”shall mean any Servicer appointed by the Funding Lender to perform certain
servicing functions with respect to the Funding Loan and on the Borrower Loan pursuant to a
separate servicing agreement to be entered into between the Funding Lender and the Servicer.
Initially the Servicer shall be the Funding Lender pursuant to this Funding Loan Agreement.
Servicing Agreement”shall mean any servicing agreement entered into between the
“
Funding Lender and a Servicer with respect to the servicing of the Funding Loan and/or the
Borrower Loan.
“S&P”shall mean S&P Global Ratings, a business unitof Standard & Poor’s Ratings
Services, andits successors
“State”shall mean the State of California.
“Tax Certificate”shall mean the Tax Certificateand Agreement, dated the Closing Date,
executed and delivered by the Governmental Lender and the Borrower, as it may be amended from
time to time.
Tax Counsel”shall mean (a)Stradling Yocca Carlson & Rauth, a Professional Corporation,
“
or (b)any other attorney or firm of attorneys designated by the Governmental Lender and approved
by the Funding Lender having a national reputation for skill in connection with the authorization and
issuance of municipal obligations under Sections 103 and 141 through 150 (or any successor
provisions) of the Code.
“Tax Counsel Approving Opinion”shall mean an opinion of Tax Counsel substantially to
the effect that the Governmental Lender Notesconstitutes a valid and binding obligation of the
Governmental Lender and that, under existing statutes, regulations published rulings and judicial
decisions, the interest on the Governmental Lender Notesis excludable from gross income for federal
income tax purposes (subject to the inclusion of such customary exceptions as are acceptable to the
recipient thereof).
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Tax Counsel No Adverse Effect Opinion”shall mean an opinion of Tax Counsel
“
substantiallyto the effect that the taking of the action specified therein will not, in and of itself,
adversely affect anyexclusion of interest on the Governmental Lender Notesfrom gross income for
purposes of federal income taxation (subject to the inclusion of such customary exceptions as are
acceptable to the recipient thereof).
“UCC”shall mean the Uniform Commercial Code as in effect in the State.
“Unassigned Rights”shall mean the Governmental Lender’s rights to (a)reimbursement and
payment of its fees, costs and expenses and the Rebate Amount under Section 2.5 of the Borrower
Loan Agreement and Section5of the Regulatory Agreement, (b)access to the Project under
Section5.17 of the Borrower Loan Agreement, (c)indemnification under Section5.15 of the
Borrower Loan Agreement and Section 9of the Regulatory Agreement, (d)attorneys’fees under
Sections5.11, 5.14 and 10.05 of the Borrower Loan Agreement and Section 20of the Regulatory
Agreement, (e)receive notices, reports and other statements and its rights to consent to certain
matters, including but not limited to its right to consent to amendments to this Funding Loan
Agreement, the Borrower Loan Agreement and the Regulatory Agreement, and otherwise as
provided in this Funding Loan Agreement and the Borrower Loan Agreement, (f)seek performance
by the Borrower of its obligations under the Regulatory Agreement, and (g)seek performance of, and
enforce, various tax covenants as described in Section 2.2(b)(i) of the Borrower Loan Agreement,
including but not limited to those in Sections 5.34 and 5.35 of the Borrower Loan Agreement.
Written Certificate,”“Written Certification,”“Written Consent,”“WrittenDirection,”
“
Written Notice,”“Written Order,”“Written Registration,”“Written Request,”and “Written
“
”shall mean a written certificate, direction, notice, order or requisition signed by an
Requisition
Authorized Borrower Representative, an Authorized Governmental Lender Representative or an
authorized representative of the Funding Lender and delivered to the Funding Lender, the Servicer or
such other Person as required under the Funding Loan Documents.
“Yield”shall mean yield as defined in Section 148(h) of the Code and any regulations
promulgated thereunder.
Section 1.2Effect of Headings and Table of Contents. The Article and Section
headings herein and in the Table of Contents are for convenience only and shall not affect the
construction hereof.
Section 1.3Date of Funding Loan Agreement. The date of this Funding Loan
Agreement is intended as and for a date for the convenient identification of this Funding Loan
Agreement and is not intended to indicate that this Funding Loan Agreement was executed and
delivered on said date.
Section 1.4Designation of Time for Performance. Except as otherwise expressly
provided herein, any reference in this Funding Loan Agreement to the time of day shall mean the
time of day in the city where the Funding Lender maintains its place of business for the performance
of its obligations under this Funding Loan Agreement.
Section 1.5Interpretation. The parties hereto acknowledge that each of them and their
respective counsel have participated in the drafting and revision of this Funding Loan Agreement.
Accordingly, the parties agree that any rule of construction that disfavors the drafting party shall not
11
apply in the interpretation of this Funding Loan Agreement or any amendment or supplement or
exhibit hereto.
ARTICLE II
TERMS; GOVERNMENTAL LENDER NOTES
Section 2.1Terms.
(a)Principal Amount. The total principal amount of the Funding Loan is hereby
expressly limited to the Authorized Amount.
(b)Draw-Down Funding. The Funding Loan is originated on a draw-down basis.
The proceeds of the Funding Loan shall be advanced by the Funding Lender to the Fiscal Agent
(pursuant to the wiring instructions on ExhibitE attached hereto) for deposit by the Fiscal Agent to
the Project Fund for the account of the Governmental Lender as and when needed to make each
advance in accordance with the disbursement provisions of the Borrower Loan Agreement and the
Construction Funding Agreement. Subject to the terms and conditions of the Borrower Loan
Agreement, the Funding Lender agrees to advance, on behalf of the Governmental Lender, to the
Fiscal Agent for deposit by the Fiscal Agent to the Project Fund $_____________on the Closing
Date. The Borrower Loan advances and Funding Loan advances shall be allocated first to the Series
B-1Borrower Note and the related Series B-1Governmental Lender Note and, once the foregoing
have been fully funded, then to the Series B-2Borrower Note and the related Series B-2
Governmental Lender Note. Notwithstanding anything in this Funding Loan Agreement to the
contrary, no additional amounts of the Funding Loan may be drawn down and funded hereunder after
the third anniversary of the Closing Date; provided, however, that upon the delivery of a Tax
Counsel No Adverse Effect Opinion to the Governmental Lender and the Funding Lender such date
may be changed to a later date as specified in such Tax Counsel No Adverse Effect Opinion.
The Governmental Lender consents to the terms of the Contingency Draw-Down
Agreement and agrees to take all actions requested in writing by the Funding Lender or the Borrower
that are reasonably required of the Governmental Lender, in connection with the conversion of the
Funding Loan to a fully drawn loan pursuant to the provisions of the Contingency Draw-Down
Agreement in the event a Draw-Down Notice is filed by the Funding Lender or the Borrower, all at
the expense of the Borrower. The Funding Lender authorizes and directs the Fiscal Agent to enter
into the Contingency Draw-Down Agreement.
(c)Origination Date; Maturity. The Funding Loan shall be originated on the
Closing Date and shall mature on the corresponding Maturity Date at which time the entire principal
amountof the portion of the Funding Loan evidenced bytheapplicable Governmental Note, to the
extent not previously paid, and all accrued and unpaid interest, shall be due and payable.
(d)Principal. The outstanding principal amount of eachGovernmental Lender
Noteand of the Funding Loan as of any given date shall be the total amount advanced to the Fiscal
Agent by the Funding Lender to or for the account of the Governmental Lender to fund
corresponding advances with respect to the corresponding Borrower Note under the Borrower Loan
Agreement and the Construction Funding Agreement as proceeds of the Borrower Loan, less any
payments of principal of the Governmental Lender Notepreviously received upon payment of
corresponding principal amounts under the corresponding Borrower Note, including regularly
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scheduled principal payments and voluntary and mandatory prepayments. The principal amount of
eachGovernmental Lender Note and interest thereon shall be payable on the basis specified in this
paragraph (d) and in paragraphs (e) and (f) of this Section 2.1.
The Fiscal Agent shall keep a record of all principal advances and principal
repayments made under eachGovernmental Lender Noteand shall upon written request provide the
Governmental Lender with a statement of the outstanding principal balance of eachGovernmental
Lender Noteand the Funding Loan.
(e)Interest. Interest shall be paid on the outstanding principal amount of each
Governmental Lender Note at the rate or rates set forth in the corresponding Borrower Note and
otherwise as set forth in the Borrower Loan Agreement.
. The payment or prepayment of principal, interest
(f)Corresponding Payments
and premium, if any, due on the Funding Loan and each Governmental Lender Noteshall be
identical with and shall be made on the same dates, terms and conditions, as the principal, interest,
premiums, late payment fees and other amounts due on the corresponding Borrower Note. The
Series B-1Governmental Lender Note shall be payable from payments on the corresponding Series
B-1Borrower Note and the Series B-2Governmental LenderNote shall be payable from payments
on the related Series B-2Borrower Note. Any payment or prepayment made by the Borrower of
principal, interest, Premium, if any, due on aBorrower Noteshall be deemed to be like payments or
prepayments of principal, interest and Premium, if any, due on the Funding Loan and the
corresponding Governmental Lender Note.
(g)Usury. The Governmental Lender intends to conform strictly to the usury
laws applicable to this Funding Loan Agreement and the Governmental Lender Notesand all
agreements made in the Governmental Lender Notes, this Funding Loan Agreement and the Funding
Loan Documents are expressly limited so that in no event whatsoever shall the amount paid or agreed
to be paid as interest or the amounts paid for the use of money advanced or to be advanced hereunder
exceed the highest lawful rate prescribed under any law which a court of competent jurisdiction may
deem applicable hereto. If, from any circumstances whatsoever, the fulfillment of any provision of
the Governmental Lender Notes, this Funding Loan Agreement or the other Funding Loan
Documents shall involve the payment of interest in excess of the limit prescribed by any law which a
court of competent jurisdiction may deem applicable hereto, then the obligation to pay interest
hereunder shall be reduced to the maximum limit prescribed by law. If from any circumstances
whatsoever, the Funding Lender shall ever receive anything of value deemed interest, the amount of
which would exceed the highest lawful rate, such amount as would be excessive interest shall be
deemed to have been applied, as of the date of receipt by the Funding Lender, to the reduction of the
principal remaining unpaid hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid principal balance, such excess shall be refunded to the Borrower. This paragraph
shall control every other provision of the Governmental Lender Notes, this Funding Loan Agreement
and all other Funding Loan Documents.
In determining whether the amount of interest charged and paid might otherwise exceed the
limit prescribed by law, the Governmental Lender intends and agrees that (i)interest shall be
computed upon the assumption that payments under the Borrower Loan Agreement and other
Funding Loan Documents will be paid according to the agreed terms, and (ii)any sums of money
that are taken into account in the calculation of interest, even though paid at one time, shall be spread
over the actual term of the Funding Loan.
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Section 2.2Form of Governmental Lender Notes. As evidence of its obligation to
repay the Funding Loan, simultaneously with the delivery of this Funding Loan Agreement to the
Funding Lender, the Governmental Lender hereby agrees to execute and deliver the Governmental
LenderNotes. The Governmental Lender Notesshall be substantially in the respective formsset
forth in ExhibitA attached hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Funding Loan Agreement.
In connection with Conversion, the Funding Lender shall have the right to exchange the then
existing Series B-1Governmental Lender Note on or after the Conversion Date for a newSeries B-1
Governmental Lender Note with a dated date of the Conversion Date and in a stated principal amount
equal to the then outstanding principal amount of the Series B-1Governmental Lender Note, which
amount will equal the Permanent Period Amount (as defined in the Borrower Loan Agreement) of
the Borrower Loan, butshall not otherwise change any material terms of the Series B-1
Governmental Lender Note.
Section 2.3Execution and Delivery of Governmental Lender Notes. The
Governmental Lender Notesshall be executed on behalf of the Governmental Lender by the manual
or facsimilesignature of the Authorized Governmental Lender Representative and attested by the
manual or facsimile signature of its Secretary or Deputy Secretary of Chula Vista Housing Authority.
The manual or facsimile signatures of individuals who were the proper officers of the Governmental
Lender at the time of execution shall bind the Governmental Lender, notwithstanding that such
individuals or any of them shall have ceased to hold such offices prior to the execution and delivery
of the Governmental Lender Notesor shall not have held such offices at the date of the
Governmental Lender Notes.
Section 2.4Required Transferee Representations; Participations; Sale and
Assignment.
(a)The Funding Lender shall deliver to the Governmental Lender and the Fiscal
Agent the Required Transferee Representations in substantially the form attached hereto as ExhibitB
on the Closing Date.
(b)The Funding Lender shall have the right to sell (i)the Governmental Lender
Notesand the Funding Loan or (ii)any portion of or a participation interest in the Governmental
Lender Notesand the Funding Loan, to the extent permitted by clause (c)below, provided that such
sale shall be only to Approved Transferees that execute and deliver to the Funding Lender, with a
copy to the Governmental Lender and the Fiscal Agent, the Required Transferee Representations.
(c)Notwithstanding the other provisions of this Section 2.4, no beneficial
ownership interest in the Governmental Lender Notesand Funding Loan shall be sold in an amount
that is less than the Minimum Beneficial Ownership Amount.
(d)No service charge shall be made for any sale or assignment of any portion of
the Governmental Lender Notes, but the Governmental Lender may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection with any
such sale or assignment. Such sums shall be paid in every instance by the purchaser or assignee of
the Funding Loan or portion thereof.
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(e)The Governmental Lender Notes, or any interest therein, shall be in fully
registered form transferable to subsequent owners only on the registration books which shall be
maintained by the Funding Lender for such purpose and which shall be open to inspection by the
Governmental Lender. The Governmental Lender Notesshall not be transferred through the services
of the Depository Trust Company or any other third party registrar.
The Fiscal Agent acknowledges that the Funding Lender is the initial registered
owner of the Governmental Lender Notesand shall remain the sole registered owner of the
Governmental Lender Notesexcept as provided herein. The Funding Lender shall provide written
notice to the Fiscal Agent of any transfer by the Funding Lender of the Governmental Lender Notes
or any interest of the Funding Lender in the Governmental Lender Notes.
(f)The parties agree that no rating shall be sought from a rating agency with
respect to the Funding Loan or the Governmental Lender Notes.
ARTICLE III
PREPAYMENT
Section 3.1Prepayment of the Governmental Lender Notes from Prepayment under
the Corresponding Borrower Notes. The Governmental Lender Notes aresubject to voluntary and
mandatory prepayment as follows:
(a)Each Governmental Lender Note shall be subject to voluntary prepayment in
fullor in part by the Governmental Lender, from fundsreceived by the Fiscal Agent from the
Borrower under the Borrower Loan Agreement to the extent and in the manner and on any date that
the related Borrower Note is subject to voluntary prepayment as set forth therein, at a prepayment
price equal to the principal balance of the related Borrower Noteto be prepaid, plus interestthereon
to the date of prepayment and the amount of any Prepayment Premium payable under the related
Borrower Note, plus any Additional Borrower Payments due and payable under the Borrower Loan
Agreement through the date of prepayment.
Except as specifically permitted in the Borrower Notes, the Borrower shall not have
the right to voluntarily prepay all or any portion of the Borrower Notes, thereby causing the related
Governmental Lender Note to be prepaid, without the prior written consent of Funding Lender,
which may be withheld in Funding Lender’s sole and absolute discretion.
(b)Each Governmental Lender Note shall be subject to mandatory prepayment in
whole or in part upon prepayment ofthe related Borrower Note at the direction of the Funding
Lender in accordance with the terms of the related Borrower Note at a prepayment price equal to the
outstanding principal balance of the related Borrower Note prepaid, plus accrued interest plus any
other amounts payable under the related Borrower Note or the Borrower Loan Agreement.
Section 3.2Notice of Prepayment. Notice of prepayment of aGovernmental Lender
Note shall be deemed given to the extent that notice of prepayment of the related Borrower Note is
timely and properly given to the Funding Lender (with a copy to the Governmental Lender) in
accordance with the terms of the related Borrower Note and the Borrower Loan Agreement, and no
separate notice of prepayment of aGovernmental Lender Note is required to be given.
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ARTICLE IV
SECURITY
. To secure the payment of the Funding Loan
Section 4.1Security for the Funding Loan
and eachGovernmental Lender Note, to declare the terms and conditions on which the Funding Loan
and each Governmental Lender Note aresecured, and in consideration of the premises and of the
funding of the Funding Loan by the Funding Lender, the Governmental Lender by these presents
does grant, bargain, sell, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, set
over and confirm to the Funding Lender (except as limited herein), a lien on and security interest in
the following described property (excepting, however, in each case, the Unassigned Rights) (said
Security”):
property, rights and privileges being herein collectively called, the “
(a)All right, title and interest of the Governmental Lender in, to and under the
Borrower Loan Agreement and the Borrower Notes, including, without limitation, all rents, revenues
and receipts derived by the Governmental Lender from the Borrower relatingto the Project and
including, without limitation, all Pledged Revenues, Borrower Loan Payments and Additional
Borrower Payments derived by the Governmental Lender under and pursuant to, and subject to the
provisions of, the Borrower Loan Agreement; provided that the pledge and assignment made under
this Funding Loan Agreement shall not impair or diminish the obligations of the Governmental
Lender under the provisions of the Borrower Loan Agreement;
(b)All right, title and interest of the Governmental Lender in, to and under,
together with all rights, remedies, privileges and options pertaining to, the Funding Loan Documents,
and all other payments, revenues and receipts derived by the Governmental Lender under and
pursuant to, and subject to the provisions of,the Funding Loan Documents;
(c)Any and all moneys and investments from time to time on deposit in, or
forming a part of, all funds and accounts created and held under this Funding Loan Agreement and
any amounts held at any time in the Remaining Funding Loan Proceeds Account, any Negative
Arbitrage Deposit and any other amounts held under the Contingency Draw-Down Agreement,
subject to the provisions of this Funding Loan Agreement permitting the application thereof for the
purposes and on the terms and conditions set forth herein; and
(d)Any and all other real or personal property of every kind and nature or
description, which may from time to time hereafter, by delivery or by writing of any kind, be
subjected to the lien of this Funding Loan Agreement as additional security by the Governmental
Lender or anyone on its part or with its consent, or which pursuant to any of the provisions hereof or
of the Borrower Loan Agreement may come into the possession or control of the Fiscal Agent, the
Funding Lender or a receiver appointed pursuant to this Funding Loan Agreement; and the Funding
Lender and the Fiscal Agent are hereby authorized to receive any and all such property as and for
additional security for the Funding Loan and eachGovernmental Lender Note and to hold and apply
all such property subject to the terms hereof.
The pledge and assignment of and the security interest granted in the Security pursuant to this
Section 4.1 for the payment of the principal of, premium, if any, and interest oneachGovernmental
Lender Note, in accordance with its terms and provisions, and for the payment of all other amounts
due hereunder, shall attach and be valid and binding from and after the time of the delivery of the
Governmental Lender Notesby the Governmental Lender. The Security so pledged and then or
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thereafter received by the Governmental Lender, Fiscal Agent or the Funding Lender shall
immediately be subject to the lien of such pledge and security interest without any physical delivery
or recording thereof or further act, and the lien of such pledge and security interest shall be valid and
binding and prior to the claims of any and all parties having claims of any kind in tort, contract or
otherwise against the Governmental Lender irrespective of whether such parties have notice thereof.
Section 4.2Delivery of Security. To provide security for the payment of the Funding
Loan and each Governmental Lender Note, the Governmental Lender has pledged and assigned to
secure payment of the Funding Loan and the Governmental Lender Notesits right, title and interest
in the Security to the Funding Lender. In connection with such pledge, assignment, transfer and
conveyance, there shall be delivered to the Funding Lender, by or at the expense of the Borrower, the
following documents or instruments promptly following their execution and, to the extent applicable,
their recording or filing:
(a)EachBorrower Note endorsed without recourse to the Funding Lender by the
Governmental Lender;
(b)The originally executed Borrower Loan Agreement and Regulatory
Agreement;
(c)The originally executed Security Instrument and all other Borrower Loan
Documents existing at the time of delivery of the Borrower Notesand an assignment for security of
the Security Instrument from the Governmental Lender to the Funding Lender, in recordable form;
(d)Uniform Commercial Code financing statements or other chattel security
documents giving notice of the Funding Lender’s status as an assignee of the Governmental Lender’s
security interest in any personal property forming part of the Project, in form suitable for filing; and
(e)Uniform Commercial Code financing statements giving notice of the pledge
by the Governmental Lender of the Security pledged under this Funding Loan Agreement.
There shall be delivered and deposited with the Funding Lender such additional documents,
financing statements, and instruments as the Funding Lender may reasonably require from time to
time for the better perfecting and assuring to the Funding Lender of its lien and security interest in
and to the Securityincluding, at the request of the Funding Lender, any amounts held under the
Contingency Draw-Down Agreement, in each case at the expense of the Borrower.
ARTICLE V
LIMITED LIABILITY
. The Funding
Section 5.1Source of Payment of Funding Loan and Other Obligations
Loan is a limited obligation of the Governmental Lender, payable solely from the Pledged Revenues
and other funds and moneys and Security pledged and assigned hereunder. NONE OF THE
GOVERNMENTAL LENDER (EXCEPT AS PROVIDED IN THE FIRST SENTENCE OF THIS
SECTION5.1), THE CITY OF CHULA VISTA, THE STATE, OR ANY POLITICAL
SUBDIVISION THEREOF (EXCEPT THE GOVERNMENTAL LENDER, TO THE LIMITED
EXTENT SET FORTH HEREIN), SHALL IN ANY EVENT BE LIABLE FOR THE PAYMENT
OF THE PRINCIPAL OF,PREMIUM (IF ANY) ORINTEREST ON THE FUNDINGLOAN OR
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FOR THE PERFORMANCE OF ANY PLEDGE, OBLIGATION OR AGREEMENT OF ANY
KIND WHATSOEVER WITHRESPECT THERETO EXCEPT AS SET FORTH HEREIN, AND
NONE OF THE FUNDING LOAN, OR THE GOVERNMENTAL LENDER NOTES OR ANY OF
THE GOVERNMENTAL LENDER’S AGREEMENTS OR OBLIGATIONS WITH RESPECT TO
THE FUNDING LOAN, THE GOVERNMENTAL LENDER NOTES, OR HEREUNDER OR
UNDER ANY OF THE OTHER FUNDING LOAN DOCUMENTS, SHALL BE CONSTRUED TO
CONSTITUTE AN INDEBTEDNESS OF OR A PLEDGE OF THE FAITH AND CREDIT OF OR
A LOAN OF THE CREDITOF OR A MORAL OBLIGATIONOF ANY OF THE FOREGOING
WITHIN THE MEANING OF ANY CONSTITUTIONALOR STATUTORY PROVISION
WHATSOEVER. THE GOVERNMENTAL LENDER HASNO TAXING POWER.
Section 5.2Exempt from Individual Liability. No covenant, condition or agreement
contained herein shall be deemed to be a covenant, agreement or obligation of any present or future
member of the Board of Commissioners, officer, director, employee or agent of the Governmental
Lender in his individual capacity, and none of the members of the Board of Commissioners, the
officers, directors, employees or agents of the Governmental Lender executing the Governmental
Lender Notesor this Funding Loan Agreement shall be liable personally on the Governmental
Lender Notesor under this Funding Loan Agreement or besubject to any personal liability or
accountability by reason of the issuance of the Governmental Lender Notesor the execution of this
Funding Loan Agreement or any of the Funding Loan Documents.
ARTICLE VI
CLOSING CONDITIONS; APPLICATION OF FUNDS
. Closing of the Funding Loan on the
Section 6.1Conditions Precedent to Closing
Closing Date shall be conditioned upon satisfaction or waiver by the Funding Lender in its sole
discretion of each of the conditions precedent to closing set forth in this Funding Loan Agreement,
including but not limited to the following:
(a)Receipt by the Funding Lender of the original Governmental Lender Notes;
(b)Receipt by the Funding Lender of the original executed Borrower Notes,
endorsed without recourse to the Funding Lender by the Governmental Lender;
(c)Receipt by the Funding Lender of executed counterpart copies of this Funding
Loan Agreement, the Borrower Loan Agreement, the Construction Funding Agreement, the
Regulatory Agreement, the Tax Certificate and the Security Instrument;
(d)Receipt by the Funding Lender of a certified copy of the Resolution;
(e)Executed Required Transferee Representations from the Funding Lender;
(f)Delivery into escrow of all amounts required to be paid in connection with the
origination of the Borrower Loan and the Funding Loanand any underlying real estate transfers or
transactions, including the Costs of Funding Deposit, in accordance with Section2.3(c)(ii) of the
Borrower Loan Agreement;
(g)Receipt by the Funding Lender of a Tax Counsel Approving Opinion;
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(h)Receipt by the Funding Lender of an Opinion of Counsel from Tax Counsel
to the effect that the Governmental Lender Notes areexempt from registration under the Securities
Act of 1933, as amended, and this Funding Loan Agreement is exempt from qualification under the
Trust Indenture Act of 1939, as amended;
(i)Delivery of an opinion of counsel to the Borrower addressed to the
Governmental Lender to the effect that the Borrower Loan Documents and the Regulatory
Agreement are valid and binding obligations of the Borrower that are enforceable against the
Borrower in accordance with their terms, subject to such exceptions and qualifications as are
acceptable to the Governmental Lender; and
(j)Receipt by the Funding Lender of any other documents or opinions that the
Funding Lender or Tax Counsel may require.
ARTICLE VII
FUNDS AND ACCOUNTS
Section 7.1Authorization to Create Funds and Accounts. Except as provided in
Section7.3 hereof, no funds or accounts shall be established in connection with the Funding Loan at
the time of closing and origination of the Funding Loan. The Funding Lender, the Fiscal Agent and
the Servicer, if any, and any designee of the Funding Lender or the Servicer, are authorized to
establish and create from time to time such other funds and accounts or subaccounts as may be
necessary for the deposit of moneys (including, without limitation, insurance proceeds and/or
condemnation awards), if any, received by the Governmental Lender, the Fiscal Agent, the Funding
Lender or the Servicer pursuant to the terms hereof or any of the other Funding Loan Documents and
not immediately transferred or disbursed pursuant to the terms of the Funding Loan Documents
and/or the Borrower Loan Documents.
Section 7.2Investment of Funds. Amounts held in any funds or accounts created under
this Funding Loan Agreement shall be invested by the Fiscal Agent, the Funding Lender, the Servicer
or the designee of the Funding Lender or Servicer, as applicable, in Permitted Investments at the
written direction of the Borrower, subject in all cases to the restrictions of Section8.7 hereof and of
the Tax Certificate. The Borrower’s instruction shall be sufficient evidence that the investment
constitutes a Permitted Investment(including as to the legality thereof). In the absence of any such
instruction, monies shall be held uninvested. Permitted Investments purchased as an investment of
moneys in any fund shall be deemed to be part of such fund or account. All interest or gain derived
from the investment of amounts in any of the funds or accounts established hereunder shallbe
deposited in such fund or account. For purposes of acquiring any investments hereunder, the Fiscal
Agent may commingle funds held by it hereunder, except as provided in Section7.8(h) hereof with
respect to the Rebate Fund. The Fiscal Agent shall incur no liability for losses arising from any
investments made pursuant to this Section.
The Fiscal Agent shall furnish the Borrower and Funding Lender periodic cash transaction
statements that include detail for all investment transactions effected by the Fiscal Agent or brokers
selected bythe Borrower.Upon the Borrower’s or Funding Lender’s election, such statements will
be delivered via the Fiscal Agent’s online service, and upon electing such service, paper statements
will be provided only upon request. The Borrower waives the right to receive brokerage
confirmations of security transactions effected by the Fiscal Agent as they occur,to the extent
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permitted by law.The Borrower further understandsthat trade confirmations for securities
transactions effected by the Fiscal Agent will be available upon request and at no additional cost, and
other trade confirmations may be obtained from the applicable broker.
Section 7.3Establishment of Funds. There are established with the Fiscal Agent the
following funds and accounts:
(a)The Funding Loan Payment Fund;
(b)The Project Fund (consisting solely of a Note Proceeds Account, anEquity
Account, a Remaining Funding Loan Proceeds Account and a Negative ArbitrageAccount);
(c)The Expense Fund;
(d)The Closing Costs Fund; and
(e)The Rebate Fund (to be established by the Fiscal Agent once the Fiscal Agent
is required to deposit or transfer, as applicable, amounts to the Rebate Fund in accordance with
Section 7.8(a)).
All money required to be deposited with or paid to the Fiscal Agent for the account of any of
the funds or accounts created by this Funding Loan Agreement shall be held by the Fiscal Agent for
the benefit of the Funding Lender, and except for money held in the Expense Fund or the Rebate
Fund, shall, while held by the Fiscal Agent,constitute part of the Pledged Revenues and be subject to
the lien hereof.
All money to be deposited with or paid to the Fiscal Agent shall be wired to the Fiscal Agent
pursuant to the wiring instructions contained in ExhibitE attached hereto. The Fiscal Agent shall
provide Written Notice of any change to such wiring instructions to the Funding Lender and the
Borrower no less than five (5) Business Days prior to the next payment date for which such revised
instructions will be applicable.
Section 7.4Funding Loan Payment Fund. The Governmental Lender and the Borrower
shall have no interest in the Funding Loan Payment Fund or the moneys therein, which shall always
be maintained by the Fiscal Agent completely separate and segregated from all other moneys held
hereunder and from any other moneys of the Governmental Lender and the Borrower.
The Fiscal Agent shall deposit into the Funding Loan Payment Fund any amounts received
from or on behalf of the Borrower as payments of principal of or premium and interest on the
Borrower Loan and any other amounts received by the Fiscal Agent that are subject to the lien and
pledge of this Funding Loan Agreement, including any Pledged Revenues not required to be
deposited to the Expense Fund or not otherwise specifically directed in writing to be deposited into
other funds created by this Funding Loan Agreement.
The Fiscal Agent shall apply all amounts on deposit in the Funding Loan Payment Fund in
the following order of priority:
First, to pay or provide for the payment of the interest then due on the Funding Loan
to the Funding Lender or any transferee of the Funding Lender with respect to the Funding Loan;
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Second, to pay or provide for the payment or the prepayment (together with any
Prepayment Premium payable in connection with such prepayment) of principal on the Funding Loan
to the Funding Lender or any transferee of the Funding Lender with respect to the Funding Loan,
provided moneyshave been transferred or deposited into the Funding Loan Payment Fund for such
purpose; and
Third, to pay or providefor the payment of the Funding Loan on the Maturity Date to
the Funding Lender or any transferee of the Funding Lender with respect to the Funding Loan.
Section 7.5Expense Fund. The Fiscal Agent shall deposit into the Expense Fund the
amounts required by the Regulatory Agreement or the Borrower Loan Agreement to be paid by the
Borrower to the Governmental Lender or the Fiscal Agent on behalf of the Borrower. Amounts on
deposit in the Expense Fund shall be used to pay the fees and expenses of the Governmental Lender
and the Fiscal Agent, as and when the same become due. In that regard, moneys in the Expense
Fund shall be withdrawn or maintained, as appropriate, by the Fiscal Agent to pay (i)the Ongoing
Governmental Lender Fee to the Governmental Lender as and when due, (ii)the Fiscal Agent’s Fees
to the Fiscal Agent when due, (iii)upon receipt, to the Fiscal Agent, any amounts due to the Fiscal
Agent which have not been paid, other than amounts paid in accordance with clause (ii)hereof, and
(iv)upon receipt, to, or at the direction of, the Governmental Lender, any amounts owing the
Governmental Lender by the Borrower and then due and unpaid, other than amounts paid in
accordance with clause (i) hereof.
In the event that the amounts on deposit in the Expense Fund are not equal to the amounts
payable from the Expense Fund as provided in the preceding paragraph on any date on which such
amounts are due and payable, the Fiscal Agent shall give notice to the Borrower of such deficiency
and of the amount of such deficiency and request payment within two Business Days to the Fiscal
Agent of the amount of such deficiency.
Written noticeof any insufficiency, which would result in the Governmental Lender not
receiving the Ongoing Governmental Lender Fee on the applicable due date, shall be provided by the
Fiscal Agent to the Governmental Lender (with a copy to the Borrower and the Funding Lender)
within 10 days of the respective due date.
Upon payment by the Borrower to the Fiscal Agent of such deficiency, the amounts for
which such deficiency was requested shall be paid by the Fiscal Agent.
Notwithstanding anything herein to the contrary, the Fiscal Agent, on behalf of the
Governmental Lender, shall prepare and submit a written invoice to the Borrower for payment of the
Ongoing Governmental Lender Fee not later than 30 days prior to the due date for payment of such
Ongoing Governmental Lender Fee, and shall remit moneys received by the Borrower to the
Governmental Lender for payment of such fee.
Section 7.6Closing Costs Fund. Amounts in the Closing Costs Fund shall be disbursed
by the Fiscal Agent to pay Closing Costs on the Closing Date or as soon as practicable thereafter as
follows: moneys on deposit in the Closing Costs Fund shall be applied to pay Closing Costs at the
written direction of the Authorized Borrower Representative, consented to by the Funding Lender
and the Governmental Lender, in the form attached hereto as ExhibitD. Any interest earnings on
amounts on deposit in the Closing Costs Fund shall remain in the Fund. Any moneys remaining in
the Closing Costs Fund (including investment proceeds) after the earlier of (i)the payment of all
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costs of issuance as certified in writing to the Fiscal Agent by the Borrower or (ii)a period of six (6)
months after the Closing Date, shall be paid to or at the direction of the Borrower and the Closing
Costs Fund shall be closed.
Section 7.7Project Fund.
(a)All proceeds of the Funding Loan provided by the Funding Lender shall be
deposited to the Note Proceeds Account of the Project Fund and disbursed as herein provided;
provided, however, that (i) the initial disbursement of the Funding Loan on the Closing Dateshall be
sent by the Funding Lender to Fiscal Agent, which shall then transfer such funds to the Title
Company, and (ii)any proceeds of the Funding Loan funded pursuant to the Contingency Draw-
Down Agreement shall be deposited to the Remaining Funding Loan Proceeds Account of the
Project Fund and disbursed as herein provided. The Fiscal Agent shall disburse moneys in the
Project Fund for therehabilitation,construction, improvementand equipping of the Project, to pay
other Qualified Project Costs and to pay other costs related to the Project as provided herein.
Not less than 97% of the moneys deposited in and credited to the Note Proceeds
Accountand Remaining Funding LoanProceeds Account of the Project Fund representing the
proceeds of the Funding Loan, including Investment Income thereon, will be expended for Qualified
Project Costs (the “97% Requirement”). The amounts on deposit in the Note Proceeds Account and
Remaining Funding LoanProceeds Account of the Project Fund shall not be applied to the payment
of Closing Costs.
Before any payment shall be made from the Note Proceeds Account ofthe Project
Fund, the Regulatory Agreement shall have been executed and submitted to a title company for
recordation in the official records of San Diego County and there shall be filed with the Fiscal Agent
a Written Requisition of the Borrower substantially in the form attached hereto as ExhibitC and
approved by the Funding Lender pursuant to the terms, conditions and provisions of the Construction
Funding Agreement.
In addition to the above, in connection with a Written Requisition:
(i)Only the signature of an authorized officer of the Funding Lender
shall be required on a Written Requisition during any period in which a default by the Borrower has
occurred and is then continuing under the Borrower Loan (Written Notice of which default has been
given in writing by an authorized officer of the Funding Lender to the Fiscal Agent and the
Governmental Lender, and the Fiscal Agent shall be entitled to conclusively rely on any such Written
Notice as to the occurrence and continuation of such a default).
(ii)The Fiscal Agent shall disburse amounts in the Note Proceeds
Account of the Project Fund for the payment of interest due on the Governmental Lender Notesupon
receipt from the Funding Lender of a statement detailing the amount due (and without any need for a
Written Requisition signed by the Funding Lenderor any approvalby an Authorized Representative
of the Borrower)so long as the amountsto be disbursed do not exceed $__________in the
aggregate.
(iii)The Fiscal Agent may conclusively rely on all Written Requisitions,
the execution of the Written Requisitions by the Authorized Borrower Representative and the
approval of all Written Requisitions by the Funding Lender, as required by this Section, as conditions
22
of payment from the Project Fund, which Written Requisitions constitute, as to the Fiscal Agent,
irrevocable determinations that all conditions to payment of the specified amounts from the Project
Fund have been satisfied. These documents shall be retained by the Fiscal Agent, subject at all
reasonable times to examination by the Borrower,the Governmental Lender, the Funding Lender and
the agents and representatives thereof upon reasonable notice to the Fiscal Agent. The Fiscal Agent
is not required to inspect the Project or therehabilitation orconstruction work or to make any
independent investigation with respect to the matters set forth in any Written Requisition or other
statements, orders, certifications and approvals received by the Fiscal Agent. The Fiscal Agent is not
required to obtain completion bonds, lien releases or otherwise supervise the acquisition,
rehabilitation, construction, equipping, improvement and installation of the Project.
(b)Upon receipt of each Written Requisition submitted by the Borrower and
approved in writing by the Funding Lender, the Fiscal Agent shall promptly, but in any case within
three Business Days, make payment from the appropriateAccount within the Project Fund in
accordance with such Written Requisition. The Fiscal Agent shall have no duty to determine
whether any requested disbursement from the Project Fund complies with the terms, conditions and
provisions of the Funding Loan Documents, constitutes payment of Qualified Project Costs or
complies with the 97% Requirement. The approval in writing of a Written Requisition by the
Funding Lender shall be deemed a certification and, insofar as the Fiscal Agent and the
Governmental Lender are concerned, shall constitute conclusive evidence that all of the terms,
conditions and requirements of the Funding Loan Documents applicable to such disbursement have
been fully satisfied or waived and the Written Requisition from the Borrower shall, insofar as the
Fiscal Agent and the Governmental Lender, as applicable, are concerned, constitute conclusive
evidence that the costs described in the Written Requisitionconstitute Qualified Project Costs or
other permitted Project costs.
The Fiscal Agent shall provide Written Notice to the Borrower, the Funding Lender
and the Governmental Lender if there are not sufficient funds available to or on deposit with the
FiscalAgent to make the disbursements as and when required by this Section7.7(b). Except as
provided in the next sentence, all such payments shall be made by check or draft payable, or by wire
transfer, either:(i)directly to the person, firm or corporationto be paid;(ii)to the Borrower and
such person, firm or corporation;or (iii)upon receipt by the Funding Lender of evidence that the
Borrower has previously paid such amount and Written Direction to the Fiscal Agent as to such as
evidenced by the Funding Lender’s approval of the Written Requisition, to the Borrower. Upon the
occurrence of an Event of Default of the Borrower of which the Fiscal Agent has knowledge as
provided herein, which is continuing under the Funding Loan Documents, with the WrittenConsent
of the Funding Lender, the Fiscal Agent may apply amounts on deposit in the Project Fund to the
payment of principal of and interest on the Funding Loan. If a Written Requisition signed by the
Authorized Borrower Representative and countersigned by an authorized officer of the Funding
Lender is received by the Fiscal Agent, the requested disbursement shall be paid by the Fiscal Agent
as soon as practicable, but in no event later than three Business Days following receipt thereof by the
Fiscal Agent. Upon final disbursement of all amounts on deposit in the Project Fund, the Fiscal
Agent shall close the Project Fund.
(c)Moneys deposited to the Negative Arbitrage Account of the Project Fund
pursuant to the Contingency Draw-Down Agreement, together with investment earnings thereon,
which shall be retained therein, shall be transferred to the Funding Loan Payment Fund and applied
pursuant to Section7.4 on each Borrower Loan Payment Date to the extent necessary to enable the
Fiscal Agent to pay interest due on the Funding Loan on such date. The transfer of moneys from the
23
Negative Arbitrage Account of the Project Fund to the Funding Loan Payment Fund shall occur
automatically without the need for a Written Requisition of the Borrower, or consent of the Funding
Lender.
(d)Amounts on deposit in the Borrower Equity Account of the Project Fund shall
be disbursed from time to time by the Fiscal Agent to pay designated amounts as set forth in and
upon receipt of a Written Requisition of the Borrower signed by an Authorized Borrower
Representative and the Funding Lender.
(e)Prior to any mandatory prepayment of the Funding Loan pursuant to the
terms hereof, any amounts then remaining in the Project Fund shall, at the written direction of the
Funding Lender, be transferredto the Funding Loan Payment Fund to be applied to the prepayment
of the Funding Loan pursuant hereto.
Section 7.8Rebate Fund.
(a)The Fiscal Agent shall deposit or transfer to the credit of the Rebate Fund
each amount delivered to the Fiscal Agent by the Borrower for deposit thereto and each amount
directed by the Borrower to be transferred thereto.
(b)Within 15 days after each receipt or transfer of funds to the Rebate Fund, the
Fiscal Agent shall withdraw from the Rebate Fund and pay to the United States of America the entire
balance of the Rebate Fund.
(c)All payments to the United States of America pursuant to this Section shall be
made by the Fiscal Agent for the account and in the name of the Governmental Lender and shall be
paid through the United States Mail (return receipt requested or overnight delivery), addressed to the
appropriate Internal Revenue Service Center and accompanied by the appropriate Internal Revenue
Service forms (such completed and signed forms to be provided to the Fiscal Agent by the Borrower
or the Rebate Analyst).
(d)The Fiscal Agent shall preserve all statements, forms and explanations
received from the Borrower and delivered to the Fiscal Agent and all records of transactions in the
Rebate Fund until six years after the retirement of the Governmental Lender Notes.
(e)The Fiscal Agent may conclusively rely on the instructions of the Borrower
(based upon the report of the Rebate Analyst) with regard to any actions to be taken by it pursuant to
this Section and shall have no liability for any consequences of any failure of the Borrower or the
Rebate Analyst to perform its duties or obligations or to supply accurate or sufficient instructions.
Except as specifically provided in subsection (b) above, the Fiscal Agent shall have no duty or
responsibility with respect to the Rebate Fund or the Borrower’s duties and responsibilities with
respect thereto except to follow the Borrower’s specific written instruction related thereto.
(f)If at any time during the term of this Funding Loan Agreement the
Governmental Lender, the Fiscal Agent or the Borrower desires to take any action that would
otherwise be prohibited by the terms of this Section, such person shall be permitted to take such
action if it shall first obtain and provide to the other persons named herein, a Tax Counsel No
Adverse Effect Opinion and an opinion of Tax Counsel that such action shall be in compliance with
the laws of the State and the terms of this Funding Loan Agreement.
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(g)Moneys and securities held by the Fiscal Agent in the Rebate Fund shall not
be deemed funds of the Governmental Lender and are not pledged or otherwise subject to any
security interest in favor of the Owners to secure the Governmental Lender Notes or any other
obligations.
(h)Moneys in the Rebate Fund may be separately invested and reinvested by the
Fiscal Agent, at the request of and as directed in writing by the Borrower, in Permitted Investments,
subject to the Code. The Fiscal Agent shall sell and reduce to cash a sufficient amount of such
Permitted Investments, as directed inwriting by the Borrower, whenever the cash balance in the
Rebate Fund is insufficient for its purposes.
(i)Notwithstanding anything to the contrary in this Funding Loan Agreement, no
payment shall be made by the Fiscal Agent to the United States if the Borrower shall furnish to the
Governmental Lender and the Fiscal Agentan opinion of Tax Counsel to the effect that such
payment is not required under Section 148(d) and (f) of the Code in order to maintain the exclusion
from gross income for federal income taxpurposes of interest on the Governmental Lender Note. In
such event the Borrower shall be entitled to withdraw funds from the Rebate Fund to the extent the
Borrower shall provide a Tax Counsel No Adverse Effect Opinion to the Governmental Lender and
the Fiscal Agent with respect to such withdrawal.
(j)The Fiscal Agent shall keep and make available to the Governmental Lender
and the Borrower records concerning the investments of all funds held by the Fiscal Agent pursuant
to the Funding Loan Agreement including date bought and sold, price and commission paid, and bids
taken, if any, and shall keep all such records until six years after the date on which neither of the
Governmental Lender Notesare Outstanding in order to enable the Borrower to make the
computations required under Section 148(f) of the Code.
(k)Notwithstanding the foregoing, the computations and payments of rebate
amounts referred to in this Section 7.8 need not be made to the extent that neither the Governmental
Lender nor the Borrower will thereby fail to comply with any requirements of Section 148(f) of the
Code based on a Tax Counsel No Adverse Effect Opinion, a copy of which shall be provided to the
Fiscal Agent and the Governmental Lender. In the event of any conflict between the requirementsof
this Section 7.8 and those of the Tax Certificate, the Tax Certificate shall control.
Section 7.9Investments.
(a)Amounts on deposit in the Project Fund shall be invested in Permitted
Investments directed in writing by the Borrower. Investment Income earned on amounts on deposit
in each account of the Project Fund shall be retained in and credited to and become a part of the
amounts on deposit in that account of the Project Fund.
(b)Amounts on deposit in the Funding Loan Payment Fund, Expense Fund,
Rebate Fund and Closing Costs Fund shall be invested in Permitted Investments directed in writing
by the Borrower. Investment Income earned on amounts on deposit in each account of the Funding
Loan Payment Fund, Expense Fund, Rebate Fund and Closing Costs Fund shall be retained in and
credited to and become a part of the amounts on deposit in that account of the Funding Loan
Payment Fund, Expense Fund, Rebate Fund and Closing Costs Fund.
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The Fiscal Agent may make any and all investments permitted under this Funding Loan
Agreement through its own trust or banking department or any affiliate and may pay said department
reasonable, customary fees for placing such investments. The Fiscal Agent and its affiliates may act
as principal, agent, sponsor, advisor or depository with respect to Permitted Investments under this
Funding Loan Agreement. The Fiscal Agent shall not be liable for any losses from investments made
by the Fiscal Agent in accordance with this Funding Loan Agreement.
The Governmental Lender, the Funding Lender and the Borrower (by its execution of the
Borrower Loan Agreement) acknowledge that to the extent regulations of the Comptroller of the
Currency or other applicable regulatory entity grant the Governmental Lender or the Funding Lender
the right to receive brokerage confirmations of security transactions as they occur, the Governmental
Lender and the Funding Lender will not receive such confirmations to the extent permitted by law.
The Fiscal Agent shall furnish the Borrower, the Funding Lender and the Governmental Lender (to
the extent requested by such parties) periodic cash transaction statements which shall include detail
for all investment transactions, if any, made by the Fiscal Agent hereunder.
ARTICLE VIII
REPRESENTATIONS AND COVENANTS
Section 8.1General Representations. The Governmental Lender makes the following
representations as the basis for the undertakings on its part herein contained:
(a)The Governmental Lender is a public body corporate and politic, organized
and existing under the laws of the State, has the power and authority to (i)enter into the Funding
Loan Documents to which it is a party and the transactions contemplated thereby, (ii)incur the
limited obligation represented by the Governmental Lender Notesand the Funding Loan, and apply
the proceeds of such obligation or loan to finance the Project, and (iii)carry out its other obligations
under this Funding Loan Agreement and the Governmental Lender Notes, and by proper action has
duly authorized the Governmental Lender’s execution and delivery of, and its performance under, the
Funding Loan Documents to which it is a party.
(b)The Governmental Lender is not in default under or in violation of, and the
execution and delivery of the Funding Loan Documents to which it is a party and its compliance with
the terms and conditions thereof will not conflict or constitute a default under or a violation of, (i)the
Act, (ii)to its knowledge, any other existing laws, rules, regulations, judgments, decrees and orders
applicable to it, or (iii)to its knowledge, the provisions of any agreements and instruments to which
the Governmental Lender is a party, a default under or violation of which would prevent it from
entering into the Funding Loan Agreement, executing and delivering the Governmental Lender
Notes, financing the Project, executing and delivering the other Funding Loan Documents to which it
is a party or consummating the transactions on its part contemplated thereby, and, to its knowledge,
no event has occurred and is continuing under the provisions of any such agreement or instrument or
otherwise that with the lapse of time or the giving of notice, or both, would constitute such a default
or violation (it being understood, however, that the Governmental Lender is making no
representations as to the necessity of registering the Governmental Lender Notesor the Borrower
Notespursuant to any securities laws or complying with any other requirements of securities laws).
(c)To the best knowledge of the Governmental Lender, no litigation, inquiry or
investigation of any kind in or by any judicial or administrative court or agency is pending with
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respect to which the Governmental Lender has been served with process or, to the knowledge of the
Governmental Lender, is threatened against the Governmental Lender with respect to (i)the
organization and existence of the Governmental Lender, (ii)its authority to execute or deliver the
Funding Loan Documents to which it is a party, (iii)the validity or enforceability of any such
Funding Loan Documents or the transactions contemplated thereby, (iv)the title of any officer of the
Governmental Lender who executed such Funding Loan Documents or (v)any authority or
proceedings relating to the execution and delivery of such Funding Loan Documents on behalf of the
Governmental Lender, and no such authority or proceedings have been repealed, revoked, rescinded
or amended but are in full force and effect.
(d)The revenues and receipts to be derived from the Borrower Loan Agreement,
the Borrower Notesand this Funding Loan Agreement have not been pledged previously by the
Governmental Lender to secure any of its notes or bonds other than the Funding Loan Agreement as
evidenced by the Governmental Lender Notes.
THE GOVERNMENTAL LENDER MAKES NO REPRESENTATION, COVENANT OR
AGREEMENT AS TO THE FINANCIAL POSITION OR BUSINESS CONDITION OF THE
BORROWER OR THE PROJECT AND DOES NOT REPRESENT OR WARRANT AS TO ANY
STATEMENTS, MATERIALS, REPRESENTATIONS OR CERTIFICATIONS FURNISHED BY
THE BORROWER IN CONNECTION WITH THE FUNDING LOAN OR THE BORROWER
LOAN, OR AS TO THE CORRECTNESS, COMPLETENESS OR ACCURACY THEREOF.
Section 8.2No Encumbrance on Security. The Governmental Lender will not
knowingly create or knowingly permit the creation of any mortgage, pledge, lien, charge or
encumbrance of any kind on the Security or any part thereof prior to or on a parity with the lien of
this Funding Loan Agreement, except as expressly permitted or contemplated by the Funding Loan
Documents.
Section 8.3Repayment of Funding Loan. Subject to the provisions of ArticlesIII
andV hereof, the Governmental Lender will duly and punctually repay, or cause to be repaid, the
Funding Loan, as evidenced by the Governmental Lender Notes, as and when the same shall become
due, all in accordance with the terms of the Governmental Lender Notesand this Funding Loan
Agreement.
Section 8.4Servicer. The Funding Lender may appoint a Servicer to service and
administer the FundingLoan and/or the Borrower Loan on behalf of the Funding Lender, including
without limitation the fulfillment of rights and responsibilities granted by Governmental Lender to
Funding Lender pursuant to Section2.1 of the Borrower Loan Agreement.
Section 8.5Borrower Loan Agreement Performance.
(a)The Funding Lender and the Servicer, if any, on behalf of the Governmental
Lender, may (but shall not be required or obligated to) perform and observe any agreement or
covenant of the Governmental Lender under the Borrower Loan Agreement subject to the terms and
provisions contained therein, all to the end that the Governmental Lender’s rights under the Borrower
Loan Agreement may be unimpaired and free from default.
(b)The Governmental Lender will promptly notify the Borrower, the Servicer
and the Funding Lender in writing of the occurrence of any Borrower Loan Agreement Default,
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provided that the Governmental Lender has received written notice or otherwise has knowledge of
such event.
Section 8.6Maintenance of Records; Inspection of Records.
(a)The Fiscal Agentshall keep and maintain adequate records pertaining to any
funds and accounts established hereunder, including all deposits to and disbursements from said
funds and accounts and shall keep and maintain the registration books for the Governmental Lender
Notesand interests therein. The Fiscal Agentshall retain in its possession all certifications and other
documents presented to it, all such records and all records of principal, interest and premium paid on
the Funding Loan, subject to theinspection of the Funding Lender and the Governmental Lender and
theirrepresentatives at all reasonable times and upon reasonable prior notice.
(b)The Governmental Lender and the Funding Lenderwill at any and all times,
upon the reasonable request of the Servicer, if any, the Borrower, the Fiscal Agent, the Governmental
Lenderor the Funding Lender, afford and procure a reasonable opportunity by their respective
representatives to inspect the books, records, reports and other papers of the Governmental Lender or
the Funding Lender, as appropriate, relating to the Project and the Funding Loan, if any, and (at their
own expense) to make copies thereof.
Section 8.7Tax Covenants. The Governmental Lender covenants to and for the benefit
of the Funding Lender that, notwithstanding any other provisions of this Funding Loan Agreement or
of any other instrument, it will:
(a)Require the Borrower to execute the Regulatory Agreement as a condition of
funding the Borrower Loan;
(b)Not take or cause to be taken any action or actions, or fail to take any action
or actions, which would cause the interest payable on the Governmental Lender Notesto be
includable in gross income for federal income tax purposes;
(c)Whenever and so often as requested in writing by Funding Lender, the
Governmental Lender (at the sole cost and expense of the Borrower), shall do and perform all acts
and things permitted by law and necessary or desirable in order to assure that interest paid by the
Governmental Lender on the Governmental Lender Notes will be excluded from the gross income of
the Noteowner, for federal income tax purposes, pursuant to Section 103 of the Code, except in the
event where any owner of the Governmental Lender Notes or a portion thereof is a “substantial user”
of the facilities financed with the Funding Loan or a “related person”within the meaning of
Section147(a) of the Code;
(d)Not take any action nor, solely in reliance upon the covenants and
representations of the Borrower in the Borrower Loan Agreement, in the Regulatory Agreement and
in theTax Certificate, knowingly permit or suffer any action to be taken if the result of the same
would be to cause the Governmental Lender Notes to be “federally guaranteed”within the meaning
of Section149(b) of the Code and the Regulations;
(e)Require the Borrower to agree, solely by causing the Borrower to execute and
deliver the Borrower Loan Agreement, not to commit any act and not to make any use of the
proceeds of the Funding Loan, or any other moneys which may be deemed to be proceeds of the
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Funding Loanpursuant to the Code, which would cause the Governmental Lender Notes to be
“arbitrage bonds”within the meaning of Sections103(b) and 148 the Code, and to comply with the
requirements of the Code throughout the term of the Funding Loan; and
(f)Require the Borrower, solely by causing the Borrower to execute and deliver
the Borrower Loan Agreement, to take all steps necessary to compute and pay any rebatable arbitrage
in accordance with Section148(f) of the Code.
In furtherance of the covenants in this Section8.7, the Governmental Lender and the
Borrower shall execute, deliver and comply with the provisions of the Tax Certificate(it being
understood that the obligations of the Fiscal Agent with respect to the Tax Certificate are to follow
the written directions of the Governmental Lender or Borrower, and that the Fiscal Agent shall not be
responsible for monitoring the compliance of the Governmental Lender or Borrower therewith),
which are by this reference incorporated into this Funding Loan Agreement and made a part of this
Funding Loan Agreement as if set forth in this Funding Loan Agreement in full. In the event of any
conflict between this Funding Loan Agreement and the Tax Certificate, the requirements of the Tax
Certificate shall control.
For purposesof this Section 8.7 the Governmental Lender’s compliance shall be based solely
on matters within the Governmental Lender’s knowledge and control and no acts, omissions or
directions of the Borrower, the Funding Lender or any other Persons shall be attributed to the
Governmental Lender.
In complying with the foregoing covenants, the Governmental Lender may rely from time to
time on a Tax Counsel No Adverse Effect Opinion or other appropriate opinion of Tax Counsel.
Section 8.8Performance by the Borrower. Without relieving the Governmental Lender
from the responsibility for performance and observance of the agreements and covenants required to
be performed and observed by it hereunder, the Borrower, on behalf of the Governmental Lender,
may (but is under no obligation to) perform any such agreement or covenant if no Borrower Loan
Agreement Default or Potential Default under (and as such term is defined in) the Borrower Loan
Agreement exists.
ARTICLE IX
DEFAULT; REMEDIES
. Any one or more of the following shall constitute an
Section 9.1Events of Default
Event of Default”) under this Funding Loan Agreement (whatever the reason
event of default (an “
for such event and whether it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or Governmental Authority):
(a)A default in the payment of any interest upon the Governmental Lender Notes
when such interest becomes due and payable;
(b)A default in the payment of principal of, or premium on, the Governmental
Lender Noteswhen such principal or premium becomes due and payable, whether at its stated
maturity, by declaration of acceleration or call for mandatory prepayment or otherwise;
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(c)Subject to Section8.8 hereof, default inthe performance or breach of any
material covenant or warranty of the Governmental Lender in this Funding Loan Agreement (other
than a covenant or warranty or default in the performance or breach of which is elsewhere in this
Section specifically dealt with), and continuance of such default or breach for a period of 30 days
after there has been given written notice, as provided in Section12.1 hereof, to the Governmental
Lender and the Borrower by the Funding Lender or the Servicer, specifying such defaultor breach
and requiring it to be remedied and stating that such notice is a “Notice of Default”under this
Funding Loan Agreement; provided that, so long as the Governmental Lender has commenced to
cure such failure to observe or perform within the thirty(30) day cure period, the subject matter of
the default is not capable of cure within said thirty (30) day period and the Governmental Lender is
diligently pursuing such cure to the Funding Lender’s satisfaction, with the Funding Lender’s
Written Direction or Written Consent, then the Governmental Lender shall have an additional period
of time as reasonably necessary (not to exceed 30days unless extended in writing by the Funding
Lender) within which to cure such default;
(d)A default in the payment of any Additional Borrower Payments; or
(e)Any other “Default”or “Event of Default”under any of the other Funding
Loan Documents (taking into account any applicable grace periods therein).
Section 9.2Acceleration of Maturity; Rescission and Annulment.
(a)Subject to the provisions of Section9.9 hereof, upon the occurrence of an
Event of Default under Section9.1 hereof, then and in every such case, the Funding Lender may
declare the principal of the Funding Loan and the Governmental Lender Notesand the interest
accrued to be immediately due and payable, by notice to the Governmental Lender, Borrower and the
Equity Investor, and upon any such declaration, all principal of and Prepayment Premium, if any, and
interest on the Funding Loan and the Governmental Lender Notesshall become immediately due and
payable.
(b)At any time after a declaration of acceleration has been made pursuant to
subsection(a)of this Section, the Funding Lender may by Written Notice to the Governmental
Lender rescind and annul such declaration and its consequences if:
(i)there has been deposited with the Funding Lender a sum sufficient to
pay (1)all overdue installments of interest on the Funding Loan, (2)the principal of and Prepayment
Premium on the Funding Loan that has become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor in the Funding Loan, (3)to
the extent that payment of such interest is lawful, interest upon overdue installments of interest at the
rate or rates prescribed therefor in the Funding Loan, and (4)all sums paid or advanced by the
Funding Lender and the reasonable compensation, expenses, disbursements and advances of the
Funding Lender, its agents and counsel (but only to the extent not duplicative with subclauses (1) and
(3) above); and
(ii)all Events of Default, other than the non-payment of the principal of
the Funding Loan that has become due solely by such declaration of acceleration, have been cured or
have been waived in writing as provided in Section 9.9 hereof.
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No such rescission and annulment shall affect any subsequent default or impair any
right consequent thereon.
(c)Notwithstanding the occurrence and continuation of an Event of Default, it is
understood that the Funding Lender shall pursue no remedies against the Borrower, any of the
Borrower’s partners or the Project if no Borrower Loan Agreement Default has occurred and is
continuing. An Event of Default hereunder shall not in and of itself constitute a Borrower Loan
Agreement Default.
Section 9.3Additional Remedies; Funding Lender Enforcement.
(a)Upon the occurrence of an Event of Default, the Funding Lender may, subject
to the provisions of this Section 9.3 and Section 9.9 hereof, proceed to protect and enforce its rights
by mandamus or other suit, action or proceeding at lawor in equity. No remedy conferred by this
Funding Loan Agreement upon or remedy reserved to the Funding Lender is intended to be exclusive
of any other remedy, but each such remedy shall be cumulative and shall be in addition to any other
remedy given tothe Funding Lender hereunder or now or hereafter existing at law or in equity or by
statute.
(b)Upon the occurrence and continuation of any Event of Default, the Funding
Lender may proceed forthwith to protect and enforce its rights and this Funding Loan Agreement by
such suits, actions or proceedings as the Funding Lender, in its sole discretion, shall deem expedient.
Funding Lender shall have upon the occurrence and continuation of any Event of Default all rights,
powers, and remedies with respect to the Security as are available under the Uniform Commercial
Code applicable thereto or as are available under any other applicable law at the time in effect and,
without limiting the generality of the foregoing, the Funding Lender may proceed at law or in equity
or otherwise, to the extent permitted by applicable law:
(i)to take possession of the Security or any part thereof, with or without
legal process, and to hold, service, administer and enforce any rights thereunder or thereto, and
otherwise exercise all rights of ownership thereof, including (but not limited to) the sale of all or part
of the Security;
(ii)to become mortgagee of record for the Borrower Loan including,
without limitation, completing the assignment of the Security Instrument by the Governmental
Lender to the Funding Lender as anticipated by this Funding Loan Agreement, and recording the
same in the real estate records of the jurisdiction in which the Project is located, without further act
or consent of the Governmental Lender, and to service and administer the same for its own account;
(iii)to service and administer the Funding Loan as agent and on behalf of
the Governmental Lender or otherwise, and, if applicable, to take such actions necessary to enforce
the Borrower Loan Documents and the Funding Loan Documents on its own behalf, and to take such
alternative courses of action, as it may deem appropriate; or
(iv)to take such steps to protect and enforce its rights whether by action,
suit or proceeding in equity or at law for the specific performance of any covenant, condition or
agreement in the Governmental Lender Notes, this Funding Loan Agreement or the other Funding
Loan Documents, or the Borrower Loan Documents, or in and of the execution of any power herein
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granted, or for foreclosure hereunder, or for enforcement of any other appropriate legal or equitable
remedy or otherwise as the Funding Lender may elect.
(c)Whether or not an Event of Default has occurred, the Funding Lender, in its
sole discretion, shall have the sole right to waive or forbear from enforcing any term, condition,
covenant or agreement of the Security Instrument, the Borrower Loan Agreement, the Borrower
Notesor any other Borrower Loan Documents or Funding Loan Documents applicable to the
Borrower, or any breach thereof, other than a covenant that would adversely impact the tax-exempt
status of the interest on the Governmental Lender Notes, and provided that the Governmental Lender
may seek specific performance by the Borrower to enforce the Unassigned Rights; provided,
however, that any such forbearance by the Funding Lender in the exercise of its remedies under the
Funding Loan Documents shall not be construed as a waiver by the Funding Lender of any
Conditions to Conversion (as such term is defined in the Borrower Loan Agreement).
(d)If the Borrower defaults in the performance or observance of any covenant,
agreement or obligation of the Borrower set forth in the Regulatory Agreement, and if such default
remains uncured for a period of 60 days after the Borrower, the Equity Investor and theFunding
Lender receive Written Notice stating that a default under the Regulatory Agreement has occurred
and specifying the nature of the default, the Funding Lender shall have the right to seek specific
performance of the provisions of the Regulatory Agreement or to exercise its other rights or remedies
thereunder.
(e)If the Borrower defaults in the performance of its obligations under the
Borrower Loan Agreement (subject to applicable notice and cure periods) to make rebate payments,
to comply with any applicable continuing disclosure requirements, or to make payments owed
pursuant to Sections2.5, 5.14 or 5.15 of the Borrower Loan Agreement for fees, expenses or
indemnification, the Funding Lender shall have the right to exercise all its rights and remedies
thereunder (subject to the last paragraph of Section9.14 hereof).
Section 9.4Application of Money Collected. Any money collected by the Funding
Lender pursuant to this Article and any other sums then held by the Funding Lender as part of the
Security, shall be applied in the following order, at the date or dates fixed by the Funding Lender:
(a)First: To the payment of any and all amounts due under the Funding Loan
Documents other than with respect to principal and interest accrued on the Funding Loan, including,
without limitation, any amounts due to the Governmental Lender, the Funding Lender, the Servicer,
the Fiscal Agent and the Rebate Analyst;
(b)Second: To the payment of the whole amount of the Funding Loan, as
evidenced by the Governmental Lender Notes, then due and unpaid in respect of which or for the
benefit of which such money has been collected, with interest (to the extent that such interest has
been collected or a sum sufficient therefor has been so collected and payment thereof is legally
enforceable at the respective rate or rates prescribed therefor in the Funding Loan) on overdue
principal of, and Prepayment Premium and overdue installments of interest on the Funding Loan;
provided, however, that partial interests in any portion of the Funding Loan shall be paid in such
order of priority as may be prescribed by Written Direction of the Funding Lender in its sole and
absolute discretion; and
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(c)Third: The payment of the remainder, if any, to the Borrower or to
whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may
direct.
If and to the extent this Section9.4 conflicts with the provisions of the Servicing Agreement,
the provisions of the Servicing Agreement shall control. Capitalized terms used in this Section9.4
but not otherwise defined in this Funding Loan Agreement shall have the meanings given such terms
in the Servicing Agreement.
Section 9.5Remedies Vested in Funding Lender. All rights of action and claims under
this Funding Loan Agreement or the Governmental Lender Notesmay be prosecuted and enforced by
the Funding Lender without the possession of the Governmental Lender Notesor the production
thereof in any proceeding relating thereto.
Section 9.6Restoration of Positions. If Funding Lender shall have instituted any
proceeding to enforce any right or remedy under this Funding Loan Agreement and such proceeding
shall have been discontinued or abandoned for any reason or shall have been determined adversely to
the Funding Lender, then and in every such case the Governmental Lender and the Funding Lender
shall, subject to any determination in such proceeding, be restored to their former positions
hereunder, and thereafter all rights and remedies of the Governmental Lender and the Funding
Lender shall continue as though no suchproceeding had been instituted.
Section 9.7Rights and Remedies Cumulative. No right or remedy herein conferred
upon or reserved to the Funding Lender is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permittedby law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 9.8Delay or Omission Not Waiver. No delay or omission of the Funding
Lender to exercise any right or remedy accruing upon an Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Funding Lender may be exercised from time
to time, and as often as may be deemed expedient, by Funding Lender. No waiverof any default or
Event of Default pursuant to Section 9.9 hereof shall extend to or shall affect any subsequent default
or Event of Default hereunder or shall impair any rights or remedies consequent thereon.
Section 9.9Waiver of Past Defaults. Before any judgmentor decree for payment of
money due has been obtained by the Funding Lender, the Funding Lender may, subject to Section 9.6
hereof, by Written Notice to the Governmental Lender and the Borrower, waive any past default
hereunder or under the Borrower Loan Agreement and its consequences except for default in
obligations due the Governmental Lender pursuant to or under the Unassigned Rights. Upon any
such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Funding Loan Agreement and the Borrower
Loan Agreement; but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 9.10Remedies Under Borrower Loan Agreement or BorrowerNotes. As set
forth in this Section9.10 but subject to Section9.9 hereof, the Funding Lender shall have the right, in
33
its own name or on behalf of the Governmental Lender, to declare any default and exercise any
remedies under the Borrower Loan Agreement or the Borrower Notes, whether or not the
Governmental Lender Notes havebeen accelerated or declared due and payable by reason of an
Event of Default.
Section 9.11Waiver of Appraisement and Other Laws.
(a)To the extent permitted by law, the Governmental Lender will not at any time
insist upon, plead, claim or take the benefit or advantage of, any appraisement, valuation, stay,
extension or redemption law now or hereafter in force, in order to prevent or hinder the enforcement
of this Funding Loan Agreement; and the Governmental Lender, for itself and all who may claim
under it, so far as it or they now or hereafter may lawfully do so, hereby waives the benefit of all
such laws. The Governmental Lender, for itself and all who may claim under it, waives, to the extent
that it may lawfully do so, all right to have the property in the Security marshaled upon any
enforcement hereof.
(b)If any law now in effect prohibiting the waiver referred to in clause(a) shall
hereafter be repealed or cease to be in force, such law shall not thereafter be deemed to constitute any
part of the contract herein contained or to preclude the application of this Section9.11.
Section 9.12Suits to Protect the Security. The Funding Lender shall have power to
institute and to maintain such proceedings as it may deem expedient to prevent any impairment of the
Security by any acts that may be unlawful or in violation of this Funding Loan Agreement and to
protect its interests in the Security and in the rents, issues, profits, revenues and other income arising
therefrom, including power to institute and maintain proceedings to restrain the enforcement of or
compliance with any GovernmentalAuthorityenactment, rule or order that may be unconstitutional
or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order would
impair the security hereunder or be prejudicial to the interests of the Funding Lender.
Section 9.13Remedies Subject to Applicable Law. All rights, remedies and powers
provided by this Article may be exercised only to the extent that the exercise thereof does not violate
any applicable provision of law in the premises, and all the provisions of this Article are intended to
be subject to all applicable mandatory provisions of law which may be controlling in the premises
and to be limited to the extent necessary so that they will not render this Funding Loan Agreement
invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any
applicable law.
Section 9.14Assumption of Obligations. In the event that the Funding Lender or its
assignee or designee shall become the legal or beneficial owner of the Project by foreclosure or deed
in lieu of foreclosure, such party shall succeed to the rights and the obligations of the Borrower under
the Borrower Loan Agreement,the Borrower Notes, the Regulatory Agreement and any other
Funding Loan Documents to which the Borrower is a party. Such assumption shall be effective from
and after the effective date of such acquisition and shall be made with the benefit of the limitations of
liability set forth therein and without any liability for the prior acts of the Borrower.
It is the intention of the parties hereto that upon the occurrence and continuance of an Event
of Default hereunder, rights and remedies may be pursued pursuant to the terms of the Funding Loan
Documents.
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ARTICLE X
AMENDMENT; AMENDMENTOF BORROWER LOAN AGREEMENT
AND OTHER DOCUMENTS
. Any of the terms of this
Section 10.1Amendment of Funding Loan Agreement
Funding Loan Agreement and the Governmental Lender Notesmay be amended or waived only by
an instrument signed by the Funding Lender and the Governmental Lender, provided, however, no
such amendment which materially affects the rights, duties, obligations or other interests of the
Borrower or Fiscal Agent shallbe made without the consent of the Borrower or Fiscal Agent, as
applicable, and, provided further, that if the Borrower is in default under any Funding Loan
Document, no Borrower consent shall be required unless such amendment has a material adverse
effect on the rights, duties, obligations or other interests of the Borrower. All of the terms of this
Funding Loan Agreement shall be binding upon the successors and assigns of and all persons
claiming under or through the Governmental Lender or any such successor or assign, and shall inure
to the benefit of and be enforceable by the successors and assigns of the Funding Lender.
Section 10.2Amendments Require Funding Lender Consent. The Governmental
Lender shall not consent to any amendment, change or modification of theBorrower Loan
Agreement or any other Borrower Loan Document or Funding Loan Document without the prior
Written Consent of the Funding Lender.
Section 10.3Consents and Opinions. No amendment to this Funding Loan Agreement or
any other Funding Loan Document entered into under this ArticleX or any amendment, change or
modification otherwise permitted under this ArticleX shall become effective unless and until (i)the
Funding Lender shall have approved the same in writing in its sole discretion and (ii)the Funding
Lender shall have received, at the expense of the Borrower, a Tax Counsel No Adverse Effect
Opinion and an Opinion of Counselsubstantiallyto the effect that any such proposed amendment is
authorized and complies with the provisions of this Funding Loan Agreement and is a valid and
binding obligation of the parties thereto, subject to normal exceptions relating to bankruptcy,
insolvency and equitable principles limitations.
ARTICLE XI
THE FISCAL AGENT
. The Governmental Lender
Section 11.1Appointment of Fiscal Agent; Acceptance
hereby appoints Fiscal Agent as fiscal agent hereunder. The Fiscal Agent shall signify its acceptance
of the duties and obligations imposed upon it by this Funding Loan Agreement by executing this
Funding Loan Agreement.
Section 11.2Certain Duties and Responsibilitiesof Fiscal Agent.
(a)The Fiscal Agent undertakes to perform such duties and only such duties as
are specifically set forth in this Funding Loan Agreement, and no implied covenants or obligations
shall be read into this Funding Loan Agreement against the Fiscal Agent.
(b)If an event of default exists hereunder or under any Borrower Loan
Document, the Fiscal Agent shall exercise such of the rights and powers vested in it by this Funding
35
Loan Agreement, and exercise any rights or duties or remedies solely at the written direction of the
Funding Lender.
(c)No provision of this Funding Loan Agreement shall be construed to relieve
the Fiscal Agent from liability for its own negligent action, its own negligent failure to act, or its own
willful misconduct, in each case, as finally adjudicated by a court of law, except that:
(i)This subsection shall not be construed to limit the effect of
subsection(a) of this Section;
(ii)The Fiscal Agent shall not be liable for any error of judgment made in
good faith, unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent
facts;
(iii)The Fiscal Agent shall not be liable with respect to any action taken
or omitted to be taken by it in accordance with the direction of the Funding Lender relating to the
time, method and place of conducting any proceeding for any remedy available to the Fiscal Agent,
or exercising any power conferred upon the Fiscal Agent under this Funding Loan Agreement; and
(iv)No provision of this Funding Loan Agreement shall require the Fiscal
Agent toexpend or risk its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds oradequate indemnity against such risk or
liability is not assured to it in its sole discretion.
(v)Subject to its rights to indemnification pursuant to Section11.4
hereof, the Fiscal Agent is directed to enter into the Borrower Loan Documents to which it is a party
and other related documents(including the Regulatory Agreement), solely in its capacity as Fiscal
Agent.
(d)Whether or not therein expressly so provided, every provision of this Funding
Loan Agreement and the other Funding Loan Documents relating to the conduct or affecting the
liability of or affording protection to the Fiscal Agent shall be subject to the provisions of this
Section.
(e)The Fiscal Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal
Agent and conforming to the requirements of this Funding Loan Agreement; but in the case of any
such certificates or opinions which by any provision hereof are specifically required to be furnished
to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Funding Loan Agreement.
(f)The permissive rights of the Fiscal Agent to do things enumerated in this
Funding Loan Agreement shall not be construed as a duty.
Section 11.3Notice of Defaults. Upon the occurrence of any default hereunder or under
any Borrower Loan Document and provided that a Responsible Officer of the Fiscal Agent has actual
knowledge or has received Written Notice of the existence of such default, promptly, and in any
eventwithin 15 days, the Fiscal Agent shall transmit to the Governmental Lender, the Borrower, the
36
Equity Investor, the Servicer, if any, and the Funding Lender, in the manner and at the addresses for
notices set forth in Section12.1 hereof, notice of such default hereunder known to the Fiscal Agent
pursuant to Section11.4(g) hereof, unless such default shall have been cured or waived.
Section 11.4Certain Rights of Fiscal Agent. Except as otherwise provided in
Section11.1 hereof:
(a)The Fiscal Agent may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note, debenture, coupon or other paper or document believed by it to
be genuine and tohave been signed or presented by the proper party or parties;
(b)Any request or direction of the Governmental Lender mentioned herein shall
be sufficiently evidenced by a certificate or order executed by an Authorized Governmental Lender
Representative;
(c)Whenever in the administration of this Funding Loan Agreement, the
Regulatory Agreementor any Borrower Loan Document the Fiscal Agent shall deem it desirable that
a matter be proved or established prior to taking, suffering or omitting any action hereunder, the
Fiscal Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon a Written Certificate of the Governmental Lender, the Funding Lender, the
Servicer or the Borrower, as appropriate;
(d)The FiscalAgent shall be under no obligation to exercise any of the rights or
powers vested in it by this Funding Loan Agreement or any Borrower Loan Document at the request
or direction of the Funding Lender, pursuant to this Funding Loan Agreement, unless the Funding
Lender shall have offered to the Fiscal Agent in writing security or indemnity reasonably satisfactory
to the Fiscal Agent against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction, except costs, expenses and liabilities which are
adjudicated to have resulted from its own negligence or willful misconduct, provided, that nothing
contained in this subparagraph (d) shall be construed to require such security or indemnity for the
performance by the Fiscal Agent of its obligations under ArticleVII hereof;
(e)The Fiscal Agent shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note, debenture, coupon or other paper or document but the Fiscal
Agent, in its discretion, may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Fiscal Agent shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books and records of the Governmental Lender, if any, and of the
Borrower, in either case personally or by agent or attorney after reasonable notice and during normal
business hours;
(f)The Fiscal Agent may execute any of its powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and pay reasonable
compensation thereto and the Fiscal Agent shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it hereunder. The Fiscal Agent may
act upon the advice of counsel of its choice concerning all matters hereof and the Fiscal Agent shall
not be responsible for any loss or damage resulting from any action or inaction taken in good faith
reliance upon said advice; and
37
(g)The Fiscal Agent shall not be required to take notice or be deemed to have
notice of any default hereunder or under any Borrower Loan Document except for failure by the
Borrower to make payments of principal, interest, premium, if any, or Ongoing Governmental
Lender Fee when due, unless a Responsible Officer of the Fiscal Agent shall be specifically notified
by a Written Direction of such default by the Governmental Lender, the Servicer or the Funding
Lender, and all notices or other instruments required by this Funding Loan Agreement or under any
Borrower Loan Document to be delivered to the Fiscal Agent, must, in order to be effective, be
delivered in writing to a Responsible Officer of the Fiscal Agent at the Office of the Fiscal Agent,
and in the absence of such Written Notice so delivered the Fiscal Agent may conclusively assume
there is no default as aforesaid.
Section 11.5Not Responsible for Recitals. The recitals contained hereinand in the
Governmental Lender Notesshall be taken as the statements of the Governmental Lender, and the
Fiscal Agent assumes no responsibility for their correctness. The Fiscal Agent makes no
representations as to the value or condition of the Pledged Revenues, the Security or any part thereof,
or as to the title of the Governmental Lender thereto or as to the security afforded thereby or hereby,
or as to the validity or sufficiency of this Funding Loan Agreement or of the Funding Loan.
The Fiscal Agentshall have no responsibility or liability with respect to any information,
statement or recital in any offering memorandum or other disclosure material prepared or distributed
with respect to the funding of the Funding Loan.
The Fiscal Agent shall not be required to monitor the financial condition of the Borrower or
the physical condition of the Project. The Fiscal Agent shall be under no obligation to analyze,
review or make any credit decisions with respect to any financial statements, reports, notices,
certificates or documents received hereunder but shall hold such financial statements reports, notices,
certificates and documents solely for the benefit of, and review by, the Funding Lender and such
other parties to whom the Fiscal Agent may provide such information pursuant to this Funding Loan
Agreement.
The Fiscal Agent makes no representations as to and shall have no responsibility for the
sufficiency of the insurance required under any of the Borrower Loan Documents.
Section 11.6May Hold Funding Loan. The Fiscal Agent in its individual or any other
capacity may become the owner or pledgee of the Funding Loan and may otherwise deal with the
Governmental Lender, the Funding Lender and the Borrower with the same rights it would have if it
were not Fiscal Agent.
Section 11.7Moneys Held Hereunder. Moneys held by the Fiscal Agent hereunder need
not be segregated from other funds except to the extent required by law. The Fiscal Agent shall be
under no liability for interest on any moneys received by it hereunder except as otherwise provided
herein.
Section 11.8Compensation and Reimbursement. Under the Borrower Loan Agreement,
the Borrower has agreed to, except as otherwise expressly provided herein,pay the Fiscal Agent its
fees and reimburse the Fiscal Agent as provided in this Funding Loan Agreement or the Borrower
Loan Agreement, upon its request for all reasonable expenses, disbursements and advances incurred
or made by the Fiscal Agent in accordance with any provision of this Funding Loan Agreement
(including the reasonable fees, expenses and disbursements of its agents and counsel), except any
38
such expense, disbursement or advance as may be attributable to the Fiscal Agent’s negligence or
willful misconduct, both as finally adjudicated by a court of law.
When the Fiscal Agent incurs expenses or renders service in connection with any bankruptcy
or insolvency proceeding, such expenses (including the fees and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of administration under any
bankruptcy law or law relating to creditors rights generally.
(a)The Governmental Lender has no obligation to pay the Fiscal Agent for
services rendered.
(b)As security for the performance of the obligations of the Borrower under this
Section and for the payment of such compensation, expenses, reimbursements and indemnity, the
Fiscal Agent shall have the right to use and apply any moneys held by it as Pledged Revenues.
(c)The Fiscal Agent’s rights to compensation and reimbursement shall survive
its resignation or removal, the payment of the Funding Loan or the Borrower Loan or the release of
this Funding Loan Agreement.
Section 11.9Fiscal Agent Required; Eligibility. Any successor Fiscal Agent shall at all
times be a trust company, a state banking corporation or a national banking association with the
authority to accept trusts in the State approved in writing by the Governmental Lender and either
(a)have a combined capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition, (b)be a wholly owned subsidiary of a bank holding company,
or a wholly owned subsidiary of a company that is a wholly owned subsidiary of a bank holding
company, having a combined capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition, have at least $500,000,000 of trust assets under management
and have a combined capital and surplus of at least $2,000,000 as set forth in its most recent
published annual report of condition, or (c)be otherwise acceptable to the Funding Lender in its sole
and absolute discretion.
Section 11.10Resignation and Removal; Appointment of Successor.
(a)No resignation or removal of the Fiscal Agent hereunder and no appointment
of a successor Fiscal Agent pursuant to this Article shall become effective until the written
acceptance by the successor Fiscal Agent of such appointment.
(b)The Fiscal Agent may resign at any time by giving 60 days’Written Notice
thereof to the Governmental Lender, the Borrower, the Servicer, if any, and the Funding Lender.
(c)The Fiscal Agent may be removed at any time with 30 days’notice by (i)the
Governmental Lender, (ii)the Borrower (unless the Borrower is in default under any of the Borrower
Loan Documents), subject to applicable notice and cure periods, with the Written Consent of the
Funding Lender and the Governmental Lender, or (iii)the Funding Lender with the Written Consent
of the Governmental Lender and Written Notice delivered to the Fiscal Agent and the Borrower.
(d)If the Fiscal Agent shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the Office of the Fiscal Agent for any cause, the Governmental Lender
shall promptly appoint a successor Fiscal Agent, with the consent of the Funding Lender, which
39
consent shall not be unreasonably withheld. In case all or substantially all of the Pledged Revenues
and Security shall be in the possession of a receiver or trustee lawfully appointed, such receiver or
trustee may similarly appoint a successor to fill such vacancy until a new Fiscal Agent shall be so
appointed by the Governmental Lender. If, within 60 days after such resignation, removal or
incapability or the occurrence of such vacancy, the Governmental Lender has failed to so appoint a
successor Fiscal Agent, then a successor Fiscal Agent shall be appointed by the Funding Lender
(from any of the institutions approved by the Governmental Lender to serve as a fiscal agent or
trustee) with Written Notice thereof delivered to the Governmental Lender, the Borrower, the
Servicer, if any, and the retiring Fiscal Agent, and the successor Fiscal Agent so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Fiscal Agent and supersede
the successor Fiscal Agent appointed by such receiver or Fiscal Agent. If no successor Fiscal Agent
shall have been appointed by the Governmental Lender or the Funding Lender and accepted
appointment within 60 days after such resignation, removal or incapability or the occurrence of such
vacancy, the Fiscal Agent may petition any court of competent jurisdiction for the appointment of a
successor Fiscal Agent.
(e)The retiring Fiscal Agent shall cause Written Notice of each resignation and
each removal of the Fiscal Agent and each appointment of a successor Fiscal Agent to be providedto
the Funding Lender. Each notice shall include the name of the successor Fiscal Agent and the
address of the office of the successor Fiscal Agent.
Section 11.11Acceptance of Appointment by Successor.
(a)Every successor Fiscal Agent appointed hereunder shall execute,
acknowledge and deliver to the Governmental Lender and to the retiring Fiscal Agent an instrument
accepting such appointment, and thereupon the resignation or removal of the retiring Fiscal Agent
shall become effective and such successor Fiscal Agent, without any further act, deed or conveyance,
shall become vested with all the estates, properties, rights, powers and duties of the retiring Fiscal
Agent; notwithstanding the foregoing, on request of the Governmental Lender or the successor Fiscal
Agent, such retiring Fiscal Agent shall, upon payment of its charges, execute and deliver an
instrument conveying and transferring to such successor Fiscal Agent all the estates, properties,
rights, powers and trusts of the retiring Fiscal Agent, and shall duly assign, transfer and deliver to
such successor Fiscal Agent all property and money held by such retiring Fiscal Agent hereunder.
Upon request of any such successor Fiscal Agent, the Governmental Lender shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Fiscal Agent all
such estates, properties, rights and powers.
(b)No successor Fiscal Agent shall accept its appointment unless at the time of
such acceptance such successor Fiscal Agent shall be qualified and eligible under this Article, to the
extent operative.
Section 11.12Merger, Conversion, Consolidation or Succession to Business. Any
corporation into which the Fiscal Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the Fiscal Agent shall
be a party, or any corporation succeeding to all or substantially all of the corporate trust business of
the Fiscal Agent, shall be the successor of the Fiscal Agent hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, to the extent operative, without the
execution or filing of any paper or any further act on the part of any of the parties hereto.
40
Notwithstanding the foregoing, any such successor Fiscal Agent shall cause Written Notice of such
succession to be delivered to the Funding Lender within 30 days of such succession.
Section 11.13Appointment of Co-Fiscal Agent. It is recognized that in case of litigation
under this Funding Loan Agreement, the Borrower Loan Agreement, any other Borrower Loan
Document or the Regulatory Agreement, and in particular in case of the enforcement of any of them
on default, or in case the Fiscal Agent deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Fiscal
Agent or hold title to the properties, as herein provided, or take any other action which may be
desirable or necessary in connection therewith, it may be necessary that the Fiscal Agent appoint an
additional individual or institution as a separate or co-fiscal agent. The following provisions of this
Section are adopted to these ends.
The Fiscal Agent is hereby authorized to appoint an additional individual or institution as a
separate or co-fiscal agent hereunder, upon Written Notice to the Governmental Lender, the Funding
Lender and the Borrower, and with the consent of the Governmental Lender and the Funding Lender,
but without the necessity of further authorization or consent, in which event each and every remedy,
power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or
intended by this Funding Loan Agreement, any Borrower Loan Document, the Regulatory
Agreement or the Borrower LoanAgreement to be exercised by or vested in or conveyed to the
Fiscal Agent with respect thereto shall be exercisable by and vest in such separate or co-fiscal agent
but only to the extent necessary to exercise such powers, rights and remedies, and every covenant
and obligation necessary to the exercise thereof by such separate or co-fiscal agent shall run to and be
enforceable by either of them.
Should any instrument in writing from the Governmental Lender be required by the separate
fiscal agent or co-fiscal agent appointed by the Fiscal Agent for more fully and certainly vesting in
and confirming to him or it such properties, rights, powers, duties and obligations, any and all such
instruments in writing shall, on request of the Fiscal Agent, be executed, acknowledged and delivered
by the Governmental Lender. In case any separate fiscal agent or co-fiscal agent, or a successor to
either, shall die, become incapable of acting, resign or be removed, all the estates, properties, rights,
powers, duties and obligations of such separate fiscal agent or co-fiscal agent, so far as permitted by
law, shall vest in and be exercised by the Fiscal Agent until the appointment of a successor to such
separate fiscal agent or co fiscal agent.
Section 11.14Loan Servicing. The Governmental Lender and the Fiscal Agent
acknowledge that the Funding Lender shall have the right to appoint a Servicer to service and
administer the Funding Loan and the Borrower Loan as set forth in a Servicing Agreement. The
Governmental Lender and the Fiscal Agent shall not be responsible for monitoring the performance
of any Servicer or for any acts or omissions of such Servicer. The Funding Lender may, in its sole
discretion, terminate or replace the Servicer.
Section 11.15No Recourse Against Officers or Employees of Fiscal Agent. No recourse
with respect to any claim related to any obligation, duty or agreement contained in this Funding Loan
Agreement or any other Funding Loan Document shall be had against any officer or employee, as
such, of the Fiscal Agent, it being expressly understood that the obligations, duties and agreements of
the Fiscal Agent contained in this Funding Loan Agreement and the other Funding Loan Documents
are solely corporate in nature.
41
ARTICLE XII
MISCELLANEOUS
. All notices, demands, requests and other communications required
Section 12.1Notices
or permitted to be given by any provision of this Funding Loan Agreement shall be in writing and
sent by first class, regular, registered or certified mail, commercial delivery service, overnight
courier, telegraph, telex, telecopier or facsimile transmission, air or other courier, hand delivery, to
the party to be notified addressed as follows:
If to the Fiscal Agent:U.S. Bank National Association
Global Corporate Trust Services
633 West 5th Street, 24th Floor
Los Angeles, California 90071
Attention: Ismael Diaz
Ref: CVMF (St. Regis Park Apartments) 2019
Telephone: (213)615-6063
Facsimile: (213)615-6197
If to the Governmental Lender:Chula Vista Housing Authority
276 Fourth Avenue
Chula Vista, California 91910
Attention: Executive Director
Telephone: (619)691-5263
If to the Borrower:St. Regis Park CIC, LP
6339 Paseo del Lago
Carlsbad, CA 92011
Telephone: (760)456-6000
Facsimile: (760)456-6001
Attn: Project Manager
c/o Chelsea Investment Corporation
6993 Paseo del Lago
Carlsbad, CA 92011
Attn: Project Manager
with a copy to:Cox, Castle & Nicholson LLP
50 California Street, Suite 3200
San Fransisco, CA 94111
Attention: Ofer Elitzur, Esq.
If to the Equity Investor:Raymond James California Housing Opportunities
Fund VI L.L.C.
c/o Raymond James Tax Credit Funds, Inc.
880 Carillion Parkway
St. Petersburg, Florida 33716
Attention: Steven J. Kropf, President
42
with a copy to:Bocarsly, Emden, Cowan, Esmail& Arndt, LLP
633 West Fifth Street, 64th Floor
Los Angeles, California 90071
Attention: Kyle Arndt
Telephone: (213)239-8048
If to the Funding Lender:Citibank, N.A.
388 Greenwich Street, 8th Floor
New York, New York 10013
Attention: Transaction Management Group
Re: St. Regis Park Apartments
Deal ID #__________
Facsimile: (212)723-8209
and to:Citibank, N.A.
325 East Hillcrest Drive, Suite 160
Thousand Oaks, California 91360
Attention: Operations Manager/Asset Manager
Re: St. Regis Park Apartments
Deal ID # __________
Facsimile: (805) 557-0924
prior to the Conversion Date, with a copy to:
Citibank, N.A.
388 Greenwich Street, 8th Floor
New York, New York 10013
Attention: Account Specialist
Re: St. Regis Park Apartments
Deal ID# __________
Facsimile: (212)723-8209
following the Conversion Date with a copyto:
c/o Berkadia Commercial Servicing Department
323 Norristown Road, Suite 300
Ambler, Pennsylvania 19002
Attention: Client Relations Manager
Re: St. Regis Park Apartments
Deal ID# __________
Facsimile: (215)328-0305
43
and a copy of any notices of default sent to:
Citibank, N.A.
388 Greenwich Street, 17th Floor
New York, New York 10013
Attention: General Counsel’s Office
Re: St. Regis Park Apartments
Deal ID# __________
Facsimile: (646) 291-5754
Any such notice, demand, request or communication shall be deemed to have been given and
received for all purposes under this Funding Loan Agreement: (i)three Business Days after the same
is deposited in any official depository or receptacle of the United States Postal Service first class, or,
if applicable, certified mail, return receipt requested, postage prepaid; (ii)on the date of transmission
when delivered by telecopier or facsimile transmission, telex, telegraph or other telecommunication
device, provided any telecopy or other electronic transmission received by any party after 4:00 p.m.,
local time, as evidenced by the time shown on such transmission, shall be deemed to have been
received the following Business Day; (iii)on the next Business Day after the same is deposited with
a nationally recognizedovernight delivery service that guarantees overnight delivery; and (iv)on the
date of actual delivery to such party by any other means; provided, however, if the day such notice,
demand, request or communication shall be deemed to have been given and received as aforesaid is
not a Business Day, such notice, demand, request or communication shall be deemed to have been
given and received on the next Business Day. Any facsimile signature by a Person on a document,
notice, demand, request or communication required or permitted by this Funding Loan Agreement
shall constitute a legal, valid and binding execution thereof by such Person.
Any party to this Funding Loan Agreement may change such party’s address for the purpose
of notice, demands, requests and communications required or permitted under this Funding Loan
Agreement by providing written notice of such change of address to all of the parties by written
notice as provided herein.
Section 12.2Term of Funding Loan Agreement. This Funding Loan Agreement shall be
in full force and effect until all payment obligations of the Governmental Lender hereunder have
been paid in full and the Funding Loan has been retired or the payment thereof has been provided
for; except that on and after payment in full of the GovernmentalLender Notes, this Funding Loan
Agreement shall be terminated, without further action by the parties hereto.
Section 12.3Successors and Assigns. All covenants and agreements in this Funding Loan
Agreement by the Governmental Lender shall bind its successors and assigns, whether so expressed
or not.
Section 12.4Legal Holidays. In any case in which the date of payment of any amount due
hereunder or the date on which any other act is to be performed pursuant to this Funding Loan
Agreement shall be a day that is not a Business Day,then payment of such amount or such act need
not be made on such date but may be made on the next succeeding Business Day, and such later
payment or such act shall have the same force and effect as if made on the date of payment or the
date fixed for prepayment or the date fixed for such act, and no additional interest shall accrue for the
period from and after such date and prior to the date of payment.
44
Section 12.5Governing Law. This Funding Loan Agreement shall be governed by and
shall be enforceable in accordancewith the laws of the State applicable to contracts made and
performed in the State.
Section 12.6Severability. If any provision of this Funding Loan Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions
shall not in any way be affected or impaired. In case any covenant, stipulation, obligation or
agreement contained in the Governmental Lender Notesor in this Funding Loan Agreement shall for
any reason be held to be usurious or in violation of law, then such covenant, stipulation, obligation or
agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the
Governmental Lender or the Funding Lender only to the full extent permitted by law.
Section 12.7Execution in Several Counterparts. This Funding Loan Agreement may be
contemporaneously executed in several counterparts, all of which shall constitute one and the same
instrument and each of which shall be, and shall be deemed to be, an original.
Section 12.8Nonrecourse Obligation of the Borrower. Except as otherwise provided in
the Borrower Loan Agreement, any obligations of the Borrower under this Funding Loan Agreement
are without recourse to the Borrower or to the Borrower’s partners or members, as the case may be,
and the provisions of Section 11.1 of the Borrower Loan Agreement are by this reference
incorporated herein.
Section 12.9Waiver of Trial by Jury. IF AND TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, EACH OF THE GOVERNMENTAL LENDER AND THE
FUNDING LENDER (A)COVENANTS AND AGREES NOT TO ELECT A TRIALBY JURY
WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS FUNDING LOAN AGREEMENT OR
THE RELATIONSHIP BETWEEN THE PARTIES THAT IS TRIABLE OF RIGHT BY A JURY
AND (B)WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO
THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER
OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY
AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
IF FOR ANY REASON THIS WAIVER IS DETERMINED TO BE UNENFORCEABLE,
ALL DISPUTES WILLBE RESOLVED BY JUDICIAL REFERENCE PURSUANT TO THE
PROCEDURES SET FORTH IN THE SECURITY INSTRUMENT.
Section 12.10Electronic Transactions. The transactions described in this Funding Loan
Agreement may be conducted and the related documents may be stored by electronic means. Copies,
telecopies, facsimiles, electronic files and other reproductions of original executed documents shall
be deemed to be authentic and valid counterparts of such original documents for all purposes,
including the filing of any claim, action or suit in the appropriate court of law.
Section 12.11Reference Date. This Funding Loan Agreement is dated for reference
purposes only asof the first day of ___________2019.
\[Remainder of Page Intentionally Left Blank\]
45
IN WITNESS WHEREOF, the Funding Lender, the Fiscal Agent and the Governmental
Lender have caused this Funding Loan Agreement to be duly executed as of the date first written
above.
FUNDING LENDER:
CITIBANK, N.A.
By:
Name:
Title:Authorized Signatory
GOVERNMENTAL LENDER:
CHULA VISTA HOUSING AUTHORITY
By:
Executive Director
FISCAL AGENT:
U.S. BANK NATIONAL ASSOCIATION,
as Fiscal Agent
By:
Authorized Signatory
\[Signature Page to Funding Loan Agreement –St. Regis Park Apartments\]
S-1
EXHIBITA
FORM OF GOVERNMENTALLENDER NOTES
THIS NOTE MAY BE OWNED ONLY BY A PERMITTED TRANSFEREE IN
ACCORDANCE WITH THE TERMS OF THE FUNDING LOAN AGREEMENT, AND THE
HOLDER HEREOF, BY THE ACCEPTANCE OF THIS FUNDING LOAN AGREEMENT
(A)REPRESENTS THATITISAPERMITTEDTRANSFEREEAND
(B)ACKNOWLEDGES THAT IT CAN ONLY TRANSFER THIS GOVERNMENTAL
LENDER NOTE TO ANOTHER PERMITTED TRANSFEREE IN ACCORDANCE WITH
THE TERMS OF THE FUNDING LOAN AGREEMENT.
CHULA VISTA HOUSING AUTHORITY
MULTIFAMILY HOUSING REVENUE NOTE
(ST. REGIS PARK APARTMENTS),
\[2019SERIES B-1\]\[2019SERIES B-2\]
$_____________________, 2019
FOR VALUE RECEIVED, the undersigned CHULA VISTA HOUSING AUTHORITY
(“Obligor”) promises to pay to the order of CITIBANK, N.A. (“Holder”) the maximum principal
sum of \[__________DOLLARS ($__________), on __________1, 20__\], or earlier as provided
herein, together with interest thereon at the rates, at the times and in the amounts provided below.
Obligor shall pay to the Holder on or before each date on which payment is due under that
certain Funding Loan Agreement, dated as of ______________ 1, 2019(the “Funding Loan
Agreement”), among Obligor, Holder and U.S. Bank National Association, as fiscal agent (“Fiscal
Agent”), an amount in immediately available funds sufficient to pay the principal amount of and
Prepayment Premium, if any, on this Governmental Lender Notethen due and payable, whether by
maturity, acceleration, prepayment or otherwise. In the event that amounts held derived from
proceeds of this Governmental Lender Note, condemnation awards or insurance proceeds or
investment earnings thereon are applied to the payment of principal due on this Governmental
Lender Notein accordance with the Funding Loan Agreement, the principal amount due hereunder
shall be reduced to the extent of the principal amount of this Governmental Lender Noteso paid.
Capitalized terms not otherwise defined herein shall have the meaning assigned in the Funding Loan
Agreement.
Obligor shall pay to the Holder on or before each date on which interest on the Funding Loan
is payable interest on the unpaid balance hereof in an amount in immediately available funds
sufficient to pay the interest on this Governmental Lender Notethen due and payable in the amounts
and at the rate or rates set forth in the Funding Loan Agreement.
ThisGovernmental Lender Note is apass-through obligationrelating to a construction and
permanent loan (the “Borrower Loan”) made by Obligor from proceeds of the Funding Loan to ST.
REGIS PARK CIC, LP, a California limited partnership, as borrower (the “Borrower”), under that
certain Borrower Loan Agreement, dated as of ______________ 1, 2019, (as the same may be
modified, amended or supplemented from time to time, the “Borrower Loan Agreement”), between
the Obligor and the Borrower, evidenced by the \[Series B-1\]\[Series B-2\] Borrower Note(as defined
in the Borrower Loan Agreement). Reference is made to the Borrower Loan Agreement and to the
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\[Series B-1\]\[Series B-2\] Borrower Notefor complete payment and prepayment terms of the \[Series
B-1\]\[Series B-2\] Borrower Note, payments on which are passed-through under thisGovernmental
Lender Note.
This Governmental Lender Note is a limited obligation of the Obligor, payable solely from
the Pledged Revenues and other funds and moneys and Security pledged and assigned under the
Funding Loan Agreement. None of the Governmental Lender, the State, or any political subdivision
thereof (except the Governmental Lender, to the limited extent set forth herein) or any public agency
shall in any event be liable for the payment of the principal of, premium (if any) or interest on this
Governmental Lender Noteor the Funding Loan or for the performance of any pledge, obligation or
agreement of any kind whatsoever with respect thereto except as set forth herein and in the Funding
Loan Agreement, andnone of the Funding Loan or thisGovernmental Lender Note or any of the
Governmental Lender’s agreements or obligations with respect to the Funding Loan or this
Governmental Lender Note shall be construed to constitute an indebtedness of or a pledge of the faith
and credit of or a loan of the credit of or a moral obligation of any of the foregoing within the
meaning of any constitutional or statutory provision whatsoever. The Governmental Lender has no
taxing power.
All capitalized terms used but not defined herein shall have the meanings ascribed to them in
the Funding Loan Agreement or in the Borrower Loan Agreement.
This Governmental Lender Note is subject to the express condition that at no time shall
interest be payable on this Governmental Lender Note or the Funding Loan at a rate in excess of the
Maximum Rate provided in the Funding Loan Agreement; and Obligor shall not be obligated or
required to pay, nor shall the Holder be permitted to charge or collect, interest at a rate in excess of
such Maximum Rate. If by the terms of this Governmental Lender Note or of the Funding Loan
Agreement, Obligor is required to pay interest at a rate in excess of such Maximum Rate, the rate of
interest hereunder or thereunder shall be deemed tobe reduced immediately and automatically to
such Maximum Rate, and any such excess payment previously made shall be immediately and
automatically applied to the unpaid balance of the principal sum hereof and not to the payment of
interest.
Amounts payablehereunder representing late payments, penalty payments or the like shall be
payable to the extent allowed by law.
This Governmental Lender Note is subject to all of the terms, conditions, and provisions of
the Funding Loan Agreement, including those respecting prepayment and the acceleration of
maturity and those respecting limitations of liability in Article V of the Funding Loan Agreement.
If there is an Event of Default under the Funding Loan Documents, then in any such event
and subject to the requirements set forth in the Funding Loan Agreement, the Holder may declare the
entire unpaid principal balance of this Governmental Lender Note and accrued interest, if any, due
and payable at once. All of the covenants, conditions and agreements contained in the Funding Loan
Documents are hereby made part of this Governmental Lender Note.
No delay or omission on the part of the Holder in exercising any remedy, right or option
under this Governmental Lender Note or the Funding Loan Documents shall operate as a waiver of
such remedy, right or option. In any event a waiver on any one occasion shall not be construed as a
waiver or bar to any such remedy, right or option on a future occasion. The rights, remedies and
A-2
options of the Holder under this Governmental Lender Note and the Funding Loan Documents are
and shall be cumulative and are in addition to all of the rights, remedies and options of the Holder at
law or in equity or under any other agreement.
Obligor shall pay all costs of collection on demand by the Holder, including without
limitation, reasonable attorneys’fees and disbursements, which costs may be added to the
indebtedness hereunder, together with interest thereon, to the extent allowed by law, as set forth in
the Funding Loan Agreement.
This Governmental Lender Note may not be changed orally. Presentment for payment,
notice of dishonor, protest and notice of protest are hereby waived. The acceptance by the Holder of
any amount after the same is due shall not constitute a waiver of the right to require prompt payment,
when due, of all other amounts due hereunder. The acceptance by the Holder of any sum in an
amount less than the amount then due shall be deemed an acceptance on account only and upon
condition that such acceptance shall not constitute a waiver of the obligation of Obligor to pay the
entire sum then due, and Obligor’s failure to pay such amount then due shall be and continue to be a
default notwithstanding such acceptance of such amount on account, as aforesaid. Consent by the
Holder to any action of Obligor which is subject to consent or approval of the Holder hereunder shall
not be deemed a waiver of the right to require such consent or approval to future or successive
actions.
This Governmental Lender Note (and the Funding Loan thatit represents), and any interests
herein or therein, are transferable by the registered owner hereof, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Funding Loan Agreement. Upon
such transfer a new fully registered Governmental Lender Note will be issued to the transferee in
exchange herefor. The Obligor, the Funding Lender and the Fiscal Agent may treat the registered
owner hereof as the absolute owner hereof for all purposes, and the Obligor and the Funding Lender
shall not be affected by any notice to the contrary.
The Obligor hereby certifies that all of the conditions, things and acts required to exist, to
have happened and to have been performed precedent to and in the issuance of this Governmental
Lender Note do exist, have happened and have been performed in due time, form and manner as
required by the Constitution and laws of the State (including the Act) and that the amount of this
Governmental Lender Note, together with all other indebtedness of the Obligor, does not exceed any
limit prescribed by the Constitution or laws of the State.
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IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Governmental Lender Note by its authorized representative as of the date first set forth above. The
undersigned intends that this instrument shall be deemed to be signed and delivered as a sealed
instrument.
OBLIGOR:
CHULA VISTA HOUSING AUTHORITY
By:
Executive Director
\[SEAL\]
ATTEST:
By:
Deputy Secretary
\[Signature Page to Governmental Lender Note –St. Regis Park Apartments\]
A-4
CERTIFICATE OF AUTHENTICATION
This Governmental Lender Note is the Governmental Lender Note described in the within
mentioned Funding Loan Agreement.
Date of Authentication: __________________
U.S. BANK NATIONAL ASSOCIATION,
as Fiscal Agent
By
Authorized Signatory
\[Signature Page to Governmental Lender Note –St. Regis Park Apartments\]
A-5
EXHIBITB
FORM OF REQUIRED TRANSFEREE REPRESENTATIONS
\[_________________, 20__\]
The undersigned, as holder (the “Holder”) of a loan (the “Funding Loan”) in the maximum
principal amount of $__________ from CITIBANK, N.A. (“Funding Lender”) to CHULA VISTA
HOUSING AUTHORITY(“Governmental Lender”) pursuant to a Funding Loan Agreement dated as
of ______________ 1, 2019(the “Funding Loan Agreement”) among the Funding Lender, the
Governmental Lender and U.S. Bank National Association, as fiscal agent (the “Funding Loan”),
evidenced by the Chula Vista Housing AuthorityMultifamily Housing Revenue Note (St. Regis Park
Apartments) 2019Series \[B-1\]\[B-2\] and 2019Series B-2(the “Governmental Lender Note”), or an
interest therein, hereby represents that:
1.The Holder has sufficient knowledge and experience in financial and business matters
with respect to the evaluation of residential real estate developments such as the Project to be able to
evaluate the risk and merits of the investment represented by the Funding Loan. We are able to bear
the economic risks of such investment.
2.The Holder acknowledges that it has either been supplied with or been given access
to information, including financial statements and other financial information, to which a reasonable
investor would attach significance in making investment decisions, and the Holder has had the
opportunity to ask questions and receive answers from knowledgeable individuals concerning the
Governmental Lender, the Project, the use of proceeds of the Funding Loan and the Funding Loan
and the security therefor so that, as a reasonable investor, the Holder has been able to make its
decision to \[extend/purchase\] the Funding Loan \[or an interest therein\]. In entering into this
transaction, the Holder acknowledges that it has not relied upon any representations or opinions of
the Governmental Lender relating to the legal consequences to the Funding Lender or other aspects
of its making the Funding Loan and acquiring the Governmental Lender Note, nor has it looked toor
expected, the Governmental Lender to undertake or require any credit investigation or due diligence
reviews relating to the Borrower, its financial condition or business operations, the Project (including
the financing or management thereof), or any other matter pertaining to the merits or risks of the
transactions contemplated by the Funding Loan Agreement and the Borrower Loan Agreement, or
the adequacy of the funds pledged to the Funding Lender to secure repayment of the Governmental
Lender Note.
3.The Holder is an Approved Transferee.
4.The Holder acknowledges that it is purchasing \[an interest in\] the Funding Loan for
investment for its own account and not with a present view toward resale or the distribution thereof,
in that it does not now intend to resell or otherwise dispose of all or any part of its interestsin the
Funding Loan; provided, however, that the Holder may sell or transfer the Governmental Lender
Note and the Funding Loan as provided in Section 2.4 of the Funding Loan Agreement.
5.In the event any placement memorandum to be provided to any subsequent buyer or
beneficial owner of such portion of the Funding Loan will disclose information with respect to the
Governmental Lender other than its name, location and type of political subdivision and general
B-1
information with respect to the Funding Loan andBorrower Loan and related documents, the Holder
will provide the Governmental Lender with a draft of such placement memorandum and the
Governmental Lender shall have the right to approve any description of the Governmental Lender
therein (which approval shall not be unreasonably withheld).
6.The Holder understands that the Funding Loan is a limited obligation of the
Governmental Lender; payable solely from funds and moneys pledged and assigned under the
Funding Loan Agreement, and that the liabilities andobligations of the Governmental Lender with
respect to the Funding Loan are expressly limited as set forth in the Funding Loan Agreement and
related documents.
7.Capitalized terms used herein and not otherwise defined have the meanings given
such terms in the Funding Loan Agreement.
\[_______________\],
as Holder
By
Name
Its
B-2
EXHIBITC
FORM OF WRITTEN REQUISITION
OF THE BORROWER –PROJECT FUND
Draw #______
To:U.S. Bank National Association, as Fiscal Agent (the “Fiscal Agent”) under that certain
Funding Loan Agreement, dated as of ______________ 1, 2019, among Citibank, N.A., as
Funding Lender, the Chula Vista Housing Authority, as Governmental Lender, and the Fiscal
Agent (the “Funding Loan Agreement”), pursuant to which the Chula Vista Housing
AuthorityMultifamily Housing Revenue Notes(St. Regis Park Apartments) 2019 Series B-1
and 2019 Series B-2(collectively, the “Governmental Lender Notes”) wereissued.
1.You are requested to disburse funds from the Project Fund pursuant to Section7.7 of
the Funding Loan Agreement in the amount(s)and to the person(s) as follows:
\[Insert grid (see below) summarizing all funds, includingamount, source and payee, which
are being requisitioned from the Fiscal Agent pursuant to this requisition.\]
AmountFunding SourcePayable To
2.The undersigned certifies that:
(i)the obligation stated on the requisition has been incurred in orabout the
rehabilitation or equipping of the Project, each item is a proper charge against the Project Fund, and
the obligation has not been the basis for a prior requisition that has been paid;
(ii)such requisition contains no items representing any Costs of Issuance or any
other amount constituting an issuance cost under Section147(g) of the Code, unless such item is
being paid solely from the Equity Account of the Project Fund;
(iii)not less than 97% of the sum of: (A)the amounts requisitioned by this
Requisition to be funded with the proceeds of the Governmental Lender Notesplus (B)all amounts
allocated to the Governmental Lender Notespreviously disbursed from the Note Proceeds Account
of the Project Fund, have been or will be applied by the Borrower to pay Qualified Project Costs;
(iv)to the undersigned’s current, actual knowledge, as of the date hereof no event
or condition has happened or is happening or exists that constitutes, or that with notice or lapse of
time or both, would constitute, an Event of Default under the Funding Loan Agreement; and
(v)attached as ScheduleI to this Requisition is an exhibit that allocates the
amount requested hereby from each account of the Project Fund among the sources for payment.
C-1
3.You hereby authorize Funding Lender to use the wire instructions contained in
ExhibitE of the Funding Loan Agreement to wire the funds to, and Funding Lender may continue to
rely on these instructions until it shall have received any written notice of modification or revocation
from you.
Dated:______________________
St. Regis Park CIC, LP,
a California limited partnership
By:Pacific Southwest Community Development Corporation,
a California nonprofit public benefit corporation,
its Managing General Partner
By:________________________________
Robert Laing
President and Executive Director
By:CIC St. Regis Park, LLC,
a California limited liability company,
its Administrative General Partner
By:Chelsea Investment Corporation,
a California corporation, its Manager
By:___________________________
Cheri Hoffman, President
Approved by:
CITIBANK, N.A.,
as Funding Lender
By:
Authorized Signer
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EXHIBITD
FORM OF WRITTEN REQUISITION
OF THE BORROWER –CLOSING COSTS FUND
To:U.S. Bank National Association, as Fiscal Agent (the “Fiscal Agent”) under that certain
Funding Loan Agreement, dated as of ______________ 1, 2019, among Citibank, N.A., as
Funding Lender, Chula Vista Housing Authority, as Governmental Lender, and the Fiscal
Agent (the “Funding Loan Agreement”).
1.You are requested to disburse funds from the Closing Costs Fund pursuant to
Section7.6 of the Funding Loan Agreement in the amount(s), to the person(s) and for the purpose(s)
set forth on Schedule I attached hereto and incorporated herein by reference. An invoice or other
appropriate evidence of the obligations described on Schedule I is attached hereto. All payments will
be made by check or wire transfer in accordance with the payment instructions set forth on Schedule
I (or on the attached invoice) and the Fiscal Agent shall have no obligation to authenticate such
payment instructions or the authority under which they were given.
2.The undersigned certifiesthat as of the date hereof no event or condition has
happened or is happening orexists that constitutes, or that with notice or lapse of time or both, would
constitute, an Event of Default under the Funding Loan Agreement.
Dated:____________________
BORROWER:
St. Regis Park CIC, LP,
a California limited partnership
By:Pacific Southwest Community Development Corporation,
a California nonprofit public benefit corporation,
its Managing General Partner
By:________________________________
Robert Laing
President and Executive Director
By:CIC St. Regis Park, LLC,
a California limited liability company,
its Administrative General Partner
By:Chelsea Investment Corporation,
a California corporation, its Manager
By:___________________________
Cheri Hoffman, President
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The foregoing Requisition is hereby consented to:
FUNDING LENDER:
CITIBANK, N.A.
By:
__________,Vice President
GOVERNMENTAL LENDER:
CHULA VISTA HOUSING AUTHORITY
By:
Executive Director
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Schedule I
Payment Instructions
PayeePurposeAmount ofPayment
D-3
EXHIBITE
FISCAL AGENT WIRING INSTRUCTIONS
Bank Name:_______________
Bank City and State:_______________
ABA Number:_______________
Account Name:_______________
Account Number:_______________
For Further Credit Account Name (if applicable):_______________
For Further Credit Account # (if applicable):_______________
Reference:_______________
E-1
Stradling Yocca Carlson & Rauth
Draft dated February 25, 2019
BORROWER LOAN AGREEMENT
between the
CHULA VISTA HOUSING AUTHORITY,
as Governmental Lender
and
ST. REGIS PARK CIC, LP,
a California limited partnership
as Borrower
dated as of _____________ 1, 2019
relating to:
$______________
Funding Loan originated by CITIBANK, N.A., as Funding Lender
from the proceeds of the
$_________________
Chula Vista Housing Authority
Multifamily Housing Revenue Note
(St. Regis Park Apartments) 2019Series B-1
and
$_________________
Chula Vista Housing Authority
Multifamily Housing Revenue Note
(St. Regis Park Apartments) 2019Series B-2
The interest of the Governmental Lender in this Borrower Loan Agreement (except for certain rights
described herein)has been pledged and assigned to Citibank, N.A., as funding lender (the “Funding
Lender”), under that certain Funding Loan Agreement, of even date herewith, by and among the
Chula Vista Housing Authority(the “Governmental Lender”), U.S. Bank National Association, as
fiscal agent, and the Funding Lender, under which the Funding Lender is originating a loan to the
Governmental Lender the proceeds of which are to be used to fund the Borrower Loan made under
this Borrower Loan Agreement.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1Specific Definitions...................................................................................................2
Section 1.2Definitions..................................................................................................................2
ARTICLE II
GENERAL
Section 2.1Origination of Borrower Loan.................................................................................16
Section 2.2Security for the Funding Loan.................................................................................17
Section 2.3Loan; Borrower Notes; Conditions to Closing........................................................19
Section 2.4Borrower Loan Payments........................................................................................20
Section 2.5Additional Borrower Payments................................................................................20
Section 2.6Overdue Payments; Payments in Default.................................................................21
Section 2.7Calculation of Interest Payments and Deposits to Real Estate Related
Reserve Funds..........................................................................................................21
Section 2.8Grant of Security Interest; Application of Funds.....................................................22
Section 2.9Marshalling; Payments Set Aside............................................................................22
Section 2.10Borrower Loan Disbursements................................................................................23
ARTICLE III
CONVERSION
Section 3.1Conversion Date and Extension of Outside Conversion Date.................................23
Section 3.2Notice From Funding Lender; Funding Lender’s Calculation Final.......................23
Section 3.3Mandatory Prepayment of the Borrower Loan........................................................23
Section 3.4Release of Remaining Loan Proceeds......................................................................23
Section 3.5No Amendment........................................................................................................24
Section 3.6Determinations by Funding Lender.........................................................................24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1Borrower Representations........................................................................................24
ARTICLE V
AFFIRMATIVECOVENANTS
Section 5.1Existence..................................................................................................................35
Section 5.2Taxes and Other Charges.........................................................................................35
Section 5.3Repairs; Maintenance and Compliance; Physical Condition...................................36
Section 5.4Litigation..................................................................................................................36
Section 5.5Performance of Other Agreements..........................................................................36
Section 5.6Notices.....................................................................................................................36
Section 5.7Cooperate in Legal Proceedings..............................................................................36
Section 5.8Further Assurances...................................................................................................36
Section 5.9Delivery of Financial Information...........................................................................37
Section 5.10Environmental Matters.............................................................................................37
Section 5.11Governmental Lender’s and Funding Lender’s Fees...............................................37
Section 5.12Estoppel Statement...................................................................................................37
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continued)
(
Page
Section 5.13Defense of Actions...................................................................................................38
Section 5.14Expenses..................................................................................................................38
Section 5.15Indemnity.................................................................................................................39
Section 5.16No Warranty of Condition or Suitability by the Governmental Lender or
Funding Lender........................................................................................................41
Section 5.17Right of Access to the Project..................................................................................41
Section 5.18Notice of Default......................................................................................................42
Section 5.19Covenant with Governmental Lender and Funding Lender.....................................42
Section 5.20Obligation of the Borrower to Construct or Rehabilitate the Project.......................42
Section 5.21Maintenance of Insurance........................................................................................42
Section 5.22Information; Statements and Reports.......................................................................42
Section 5.23Additional Notices...................................................................................................44
Section 5.24Compliance with Other Agreements; Legal Requirements.....................................44
Section 5.25Completion and Maintenance of Project..................................................................45
Section 5.26Fixtures....................................................................................................................45
Section 5.27Income from Project................................................................................................45
Section 5.28Leases and Occupancy Agreements.........................................................................45
Section 5.29Project Agreements and Licenses............................................................................46
Section 5.30Payment of Debt Payments......................................................................................46
Section 5.31ERISA......................................................................................................................47
Section 5.32Patriot Act Compliance............................................................................................47
Section 5.33Funds from Equity Investor.....................................................................................47
Section 5.34Tax Covenants.........................................................................................................48
Section 5.35Payment of Rebate...................................................................................................52
Section 5.36Covenants under Funding Loan Agreement............................................................53
Section 5.37Continuing Disclosure Agreement...........................................................................53
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1Management Agreement..........................................................................................54
Section 6.2Dissolution...............................................................................................................54
Section 6.3Change in Business or Operation of Property..........................................................54
Section 6.4Debt Cancellation.....................................................................................................54
Section 6.5Assets.......................................................................................................................54
Section 6.6Transfers..................................................................................................................54
Section 6.7Debt..........................................................................................................................54
Section 6.8Assignment of Rights...............................................................................................55
Section 6.9Principal Place of Business......................................................................................55
Section 6.10Partnership Agreement.............................................................................................55
Section 6.11ERISA......................................................................................................................55
Section 6.12No Hedging Arrangements......................................................................................55
Section 6.13Loans and Investments; Distributions; Related Party Payments.............................55
Section 6.14Amendment of Related Documents or CC&R’s......................................................56
Section 6.15Personal Property.....................................................................................................56
Section 6.16Fiscal Year...............................................................................................................56
Section 6.17Publicity...................................................................................................................56
Section 6.18Subordinate Loan Documents..................................................................................56
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continued)
(
Page
ARTICLE VII
RESERVED
ARTICLE VIII
DEFAULTS
Section 8.1Events of Default.....................................................................................................57
Section 8.2Remedies..................................................................................................................62
ARTICLE IX
SPECIAL PROVISIONS
Section 9.1Sale of Note and Secondary Market Transaction.....................................................65
ARTICLE X
MISCELLANEOUS
Section 10.1Notices.....................................................................................................................68
Section 10.2Brokers and Financial Advisors...............................................................................70
Section 10.3Survival....................................................................................................................70
Section 10.4Preferences...............................................................................................................71
Section 10.5Waiver of Notice......................................................................................................71
Section 10.6Offsets, Counterclaims and Defenses......................................................................71
Section 10.7Publicity...................................................................................................................71
Section 10.8Construction of Documents.....................................................................................72
Section 10.9No Third Party Beneficiaries...................................................................................72
Section 10.10Assignment..............................................................................................................72
Section 10.11\[Reserved\]................................................................................................................72
Section 10.12Governmental Lender, Funding Lender and Servicer Not in Control; No
Partnership...............................................................................................................72
Section 10.13Release.....................................................................................................................73
Section 10.14Term of Borrower LoanAgreement........................................................................73
Section 10.15Reimbursement of Expenses....................................................................................73
Section 10.16Permitted Contests...................................................................................................73
Section 10.17Funding Lender Approval of Instruments and Parties.............................................74
Section 10.18Funding Lender Determination of Facts..................................................................74
Section 10.19Calendar Months......................................................................................................74
Section 10.20Determinations by Lender........................................................................................74
Section 10.21GoverningLaw........................................................................................................75
Section 10.22Consent to Jurisdiction and Venue...........................................................................75
Section 10.23Successors and Assigns............................................................................................75
Section 10.24Severability..............................................................................................................75
Section 10.25Entire Agreement; Amendment and Waiver............................................................75
Section 10.26Counterparts.............................................................................................................75
Section 10.27Captions...................................................................................................................76
Section 10.28Servicer....................................................................................................................76
Section 10.29Beneficiary Parties as Third Party Beneficiary........................................................76
Section 10.30Waiver of Trial by Jury............................................................................................76
Section 10.31Time of the Essence.................................................................................................76
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Section 10.32\[Reserved\]................................................................................................................76
Section 10.33Reference Date.........................................................................................................76
ARTICLE XI
LIMITATIONS ON LIABILITY
Section 11.1Limitation on Liability.............................................................................................76
Section 11.2Limitation on Liability of Governmental Lender....................................................76
Section 11.3Waiver of Personal Liability....................................................................................77
Section 11.4Limitation on Liability of Governmental Lender’s or Funding Lender’s
Commissioners, Officers, Employees, Etc...............................................................77
Section 11.5Delivery of Reports, Etc..........................................................................................78
iv
BORROWER LOAN AGREEMENT
This Borrower Loan Agreement, dated as of _____________ 1, 2019(this “Borrower Loan
Agreement”)is entered into by the CHULA VISTA HOUSING AUTHORITY, a public body
corporate and politic, organized and existing under the laws of the State of California (together with
its successors and assigns, the “Governmental Lender”), and ST. REGIS PARK CIC, LP, a
California limited partnership (together with its successors and assigns, the“Borrower”).
R E C I T A L S :
WHEREAS, the Governmental Lender is a public body, corporate and politic, duly
organized and validly existing under the laws of the State of California; and
WHEREAS, the Governmental Lender is empowered pursuant to Chapter1of Part2 of
Act”) to: (a)make loans to any person to
Division24 of the California Health and Safety Code (the “
provide financing for residential rental developments located within the City of Chula Vista,
California, and intended to be occupied in part or in whole by persons of low and moderate income;
(b)borrow funds for the purpose of obtaining moneys to make such loans and provide such
financing, to establish necessary reserve funds and to pay administrative costs and other costs
incurred in connection with any such borrowing by the Governmental Lender; and (c)pledge all or
any part of the revenues, receipts or resources of the Governmental Lender, including the revenues
and receipts to be received by the Governmental Lender from or in connection with such loans, and
to mortgage, pledge or grant security interests in such loans or other property of the Governmental
Lender in order to secure the repayment of any such borrowing by the Governmental Lender; and
WHEREAS, the Borrower has applied to the Governmental Lender for a loan (the
Borrower Loan”), for the acquisition, rehabilitation, development and equipping of a 118unitplus
“
1 manager’s unit multifamily rental housing project located at 1025 Broadwayin the City of Chula
Vista, County of San Diego, California, known as “St. Regis Park Apartments”; and
WHEREAS, the Borrower’s repayment obligations under this Borrower Loan Agreement
are evidenced by the Borrower Notes, as defined herein; and
WHEREAS, the Borrower has requested that the Governmental Lender enter into that
certain Funding Loan Agreement, of even date herewith (the “Funding Loan Agreement”), among
the Governmental Lender, U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”), and
Funding Lender”), under which the Funding Lender will make a loan (the
Citibank, N.A. (the “
Funding Loan”) to the Governmental Lender (and the Governmental Lender will issue its
“
Governmental Lender Notes (as defined herein) in connection therewith), the proceeds of which will
be loaned under this Borrower Loan Agreement to the Borrower to finance the acquisition and
construction of the Project (as defined herein); and
WHEREAS, the Borrower Loan is secured by, among other things, that certain Multifamily
Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (California) (as
amended, restated and/or supplemented from time to time, the “Security Instrument”), of even date
herewith and assigned to the Funding Lender to secure the Funding Loan, encumbering the Project,
and will beadvanced to the Borrower pursuant to this Borrower Loan Agreement, the Funding Loan
Agreement and the Construction Funding Agreement (as defined herein); and
A G R E E M E N T :
, in consideration of the premises and the mutual representations,
NOW, THEREFORE
covenants and agreements herein contained, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1Specific Definitions. For all purposes of this Borrower Loan Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a)Unless specifically defined herein, all capitalized terms shall have the
meanings ascribed thereto in the Security Instrument or, if not defined in the Security Instrument, in
the Funding Loan Agreement.
(b)All accounting terms not otherwise defined herein shall have the meanings
assigned to them, and all computations herein provided for shall be made, in accordance with GAAP.
(c)All references in this instrument to designated “Articles,” “Sections” and
other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as
originally executed.
(d)All references in this instrument to a separate instrument are to such separate
instrument as the same may be amended or supplemented from time to time pursuant to the
applicable provisions thereof.
(e)Unless otherwise specified, (i)all references to sections and schedules are to
those in this Borrower Loan Agreement, (ii)the words “hereof,” “herein” and “hereunder” and words
of similar import refer to this Borrower Loan Agreement as a whole and not to any particular
provision, (iii)all definitions are equally applicable to the singular and plural forms of the terms
defined and (iv)the word “including” means “including but not limited to.”
Section 1.2Definitions. The following terms, when used in this Borrower Loan
Agreement (including when used in the above recitals), shall have the following meanings:
“Act” shall have the meaning given to it in the recitals to this Borrower Loan Agreement.
“Act of Bankruptcy” shall mean the filing of a petition in bankruptcy (or any other
commencement of a bankruptcy or similar proceeding) under any applicable bankruptcy, insolvency,
reorganization, or similar law, now or hereafter in effect; provided that, in the case of an involuntary
proceeding, such proceeding is not dismissed within ninety (90)days after the commencement
thereof.
ADA” shall have the meaning set forth in Section4.1.38 hereof.
“
“Additional Borrower Payments” shall mean the payments payable pursuant to Section2.5
(Additional Borrower Payments), Section2.6 (Overdue Payments; Payments in Default),
Section3.3.3 of the Construction Funding Agreement (Borrower Loan in Balance), Section5.14
(Expenses), and Section10 of the Borrower Notes (Voluntary and Involuntary Prepayments).
2
Administrative General Partner” shall mean CIC St. Regis Park, LLC, a California
“
limited liability company.
Agreement of Environmental Indemnification” shall mean the Agreement of
“
Environmental Indemnification, of even date herewith, executed by the Borrower and Guarantor for
the benefit of the Beneficiary Parties (as defined therein) and any lawful holder, owner or pledgee of
the Borrower Note from time to time.
“Appraisal” shall mean an appraisal of the Project and Improvements, whichappraisal shall
be (i)performed by a qualified appraiser licensed in the State selected by Funding Lender, and
(ii)satisfactory to Funding Lender (including, without limitation, as adjusted pursuant to any internal
review thereof by Funding Lender) in all respects.
Approved Developer Fee Schedule” shall have the meaning set forth in the Construction
“
Funding Agreement.
Architect” shall mean any licensed architect, space planner or design professional that
“
Borrower may engage from time to time, with the approval of Funding Lender, to design any portion
of the Improvements, including the preparation of the Plans and Specifications.
“Architect’s Agreement” means any agreement that Borrower and any Architect from time
to time may execute pursuant to which Borrower engages such Architect to design any portion of the
Improvements, including the preparation of the Plans and Specifications, as approved by Funding
Lender.
Authorized Borrower Representative” shall mean a person at the time designated and
“
authorized to act on behalf of the Borrower by a written certificate furnished to the Governmental
Lender, the Funding Lender, the Fiscal Agent and the Servicer and containing the specimen signature
of such person and signed on behalf of the Borrower by its Borrower Controlling Entity which
certificate may designate one or more alternates.
“Bankruptcy Code” shall mean the United States Bankruptcy Reform Act of 1978, as
amended from time to time, or any substitute or replacement legislation.
“Bankruptcy Event” shall have the meaning given to that term in the Security Instrument.
“Bankruptcy Proceeding” shall have the meaning set forth in Section4.1.8 hereof.
“Beneficiary Parties” shall mean, collectively, the Funding Lender and the Governmental
Lender.
Borrower” shall have the meaning set forth in the recitals to this Borrower Loan
“
Agreement.
Borrower Affiliate” means, as to the Borrower, its general partner or the Guarantor, (i)any
“
entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of
the outstanding voting securities of Borrower, its general partner or the Guarantor, (ii)any
corporation 20 percent or more of whose outstanding voting securities are directly or indirectly
owned, controlled or held with power to vote by the Borrower, its general partner or the Guarantor,
(iii)any partner of Borrower, its general partner or the Guarantor, or (iv)any other person that is
3
related (to the third degree of consanguinity) by blood or marriage to the Borrower, its general
partner or the Guarantor (to the extent any of the Borrower, its general partner or the Guarantor is a
natural person).
“Borrower Controlling Entity” shall mean the general partner of the Borrower.
“Borrower Deferred Equity” shall have the meaning set forth in the Construction Funding
Agreement.
“Borrower Initial Equity” shall have the meaning set forth in the Construction Funding
Agreement.
Borrower Loan” shall mean the mortgage loan made by the Governmental Lender to the
“
Borrower pursuant to this Borrower Loan Agreement, in the maximum principal amount of the
Borrower Loan Amount, as evidenced by the Borrower Notes.
Borrower Loan Agreement” shall mean this Borrower Loan Agreement.
“
Borrower Loan Amount” shall mean $______________, the original maximum principal
“
amount of the Borrower Notes.
“Borrower Loan Documents” shall mean this Borrower Loan Agreement, the Construction
Funding Agreement, the Borrower Notes, the Security Instrument, the Agreement of Environmental
Indemnification, the Replacement Reserve Agreement, the Guaranty, the Contingency Draw Down
Agreement, and all other documents or agreements evidencing or relating to the Borrower Loan.
Borrower Loan Payment Date” shall mean (i)the date upon which regularly scheduled
“
Borrower Loan Payments are due pursuant to the Borrower Notes, or (ii)any other date on which the
Borrower Notes are prepaid or paid, whether at the scheduled maturity or upon the acceleration of the
maturity thereof.
Borrower Loan Payments” shall mean the monthly loan payments payable pursuant to the
“
Borrower Notes.
“Borrower Loan Proceeds” shall mean proceeds of the Borrower Loan, to be disbursed in
accordance with Section2.10 of this Borrower Loan Agreement, Section7.7 of the Funding Loan
Agreement and the Construction Funding Agreement.
“Borrower Notes” shall mean, collectively, the Series B-1Borrower Note and the Series B-2
Borrower Note.
Borrower Payment Obligations” shall mean all payment obligations of the Borrower
“
under the Borrower Loan Documents, including, but not limited to, the Borrower Loan Payments and
the Additional Borrower Payments.
Business Day” shall mean any day other than (i)a Saturday or Sunday, or (ii)a day on
“
which the Fiscal Agent or federally insured depository institutions in New York, New York or
California are authorized or obligated by law, regulation, governmental decree or executive order to
be closed.
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Calculation Period” shall mean three (3)consecutive full Calendar Months occurring prior
“
to the Conversion Date, as the same may be extendedin accordance with Section3.1 hereof.
Calendar Month” shall mean each of the twelve (12)calendar months of the year.
“
“CC&R’s” shall mean any covenants, conditions, restrictions, maintenance agreements or
reciprocal easement agreements affecting the Project or the Mortgaged Property.
“Closing Date” means __________, 2019, the date that the initial Borrower Loan Proceeds
are disbursed hereunder.
“Code” shall mean the Internal Revenue Code of 1986 as in effect on the Closing Date or
(except as otherwise referenced herein) as it may be amended to apply to obligations issued on the
Closing Date, together with applicable proposed, temporary and final regulations promulgated, and
applicable official public guidance published, under the Code.
Collateral” shall mean all collateral described in (i)this Borrower Loan Agreement
“
(including, without limitation, all property in which the Funding Lender is granted a security interest
pursuant to any provision of this Borrower Loan Agreement), (ii)the Security Instrument, or (iii)any
other Security Document, which Collateral shall include the Project, all of which collateral is pledged
and assigned to Funding Lender under the Funding Loan Agreement to secure the Funding Loan.
“Completion” shall have the meaning set forth in Section5.25.
“Completion Date” shall have the meaning set forth in the Construction Funding
Agreement.
Computation Date” shall have the meaning ascribed thereto in Section1.148 3(e) of the
“
Regulations.
Condemnation” shall mean any action or proceeding or notice relating to any proposed or
“
actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Project,
whether direct or indirect.
“Conditions to Conversion” shall have the meaning set forth in the ConstructionFunding
Agreement.
“Construction Consultant” shall mean a third-party architect or engineer selected and
retained by Funding Lender, at the cost and expense of Borrower, to monitor the progress of
construction and/or rehabilitation of the Project and to inspect the Improvements to confirm
compliance with this Borrower Loan Agreement.
Construction Contract” shall mean any agreement that Borrower and any Contractor from
“
time to time may execute pursuant to which Borrower engages the Contractor to construct any
portion of the Improvements, as approved by Funding Lender.
“Construction Funding Agreement” means that certain Construction Funding Agreement
of even date herewith, between the Funding Lender, as agent for the Governmental Lender, and
Borrower, pursuant to which the Borrower Loan will be advanced by the Funding Lender (or the
Servicer on its behalf), as agent of the Governmental Lender, to the Fiscal Agent for disbursement to
5
the Borrower and setting forth certain provisions relating to disbursement ofthe Borrower Loan
during construction, insurance and other matters, as such agreement may be amended, modified,
supplemented and replaced from time to time.
“Construction Schedule” shall mean a schedule of construction or rehabilitation progress
with the anticipated commencement and completion dates of each phase of construction or
rehabilitation, as the case may be, and the anticipated date and amounts of each Disbursement for the
same, as approved by Funding Lender, as assignee of the Governmental Lender.
“Contingency Draw-Down Agreement” means the Contingency Draw-Down Agreement of
even date herewith, among the Fiscal Agent, the Funding Lender and the Borrower relating to
possible conversion of the Funding Loan from a draw down loan to a fully funded loan.
Continuing Disclosure Agreement” shall mean that certain Continuing Disclosure
“
Agreement of even date herewith, between the Borrower and the Funding Lender, pursuant to which
the Borrower agrees to provide certain information with respect to the Project, the Borrower and the
Funding Loan subsequent to the Closing Date, as amended, supplemented or restated from time to
time.
“Contractor” shall mean any licensed general contractor or subcontractor that Borrower may
directly engage from time to time, with the approval of Funding Lender, to construct and/or
rehabilitate any portion of the Improvements.
Contractual Obligation” shall mean, for any Person, any debt or equity security issued by
“
that Person, and any indenture, mortgage, deed of trust, contract, undertaking, instrument or
agreement (written or oral) to which such Person is a party or by which it is bound, or to which it or
any of its assets is subject.
Conversion” shall mean Funding Lender’s determination that the Conditions to Conversion
“
have been satisfied in accordance with the provisions of this Borrower Loan Agreement and the
Construction Funding Agreement.
“Conversion Date” shall mean the date to be designated by Funding Lender once the
Conditions to Conversion have been satisfied, the determination of the Permanent Period Amount
has been made and any loan balancing payments in accordance with Section3.3 hereof and the
Construction Funding Agreement have been made. The Conversion Date must occur no later than
the Outside Conversion Date.
Cost Breakdown” shall mean the schedule of costs for the Improvements, as set forth in the
“
Construction Funding Agreement, as the same may be amended from time to time with Funding
Lender’s consent.
“Cost of Improvements” shall mean the costs for the Improvements, as set forth on the Cost
Breakdown.
“Costs of Funding” shall mean the Governmental Lender’s Closing Fee and the fees, costs,
expenses and other charges incurred in connection with the funding of the Borrower Loan and the
Funding Loan, the negotiation and preparation of this Borrower Loan Agreement and each of the
other Borrower Loan Documents and Funding Loan Documents and shall include, but shall not be
6
limited to, the following: (i)counsel fees (including but not limited to Tax Counsel, counsel to the
Governmental Lender, Borrower’s counsel, and Funding Lender’s counsel); (ii)financial advisor fees
incurred in connection with the closing of the Borrower Loan and the Funding Loan; (iii)certifying
and authenticating agent fees and expenses related to funding of the Funding Loan; (iv) recording
fees; (v)any additional fees charged by the Governmental Lender or the Fiscal Agent; and (vi)costs
incurred in connection with the required public notices generally and costs of the public hearing.
“Costs of Funding Deposit” shall mean the amount required to be deposited by the
Borrower with the Stewart Title of California, Inc. to pay Costs of Funding in connection with the
closing of the Borrower Loan and the Funding Loan on the Closing Date.
Date of Disbursement” shall mean the date of a Disbursement.
“
Day” or “Days” shall mean calendar days unless expressly stated to be Business Days.
“
Debt” shall mean, as to any Person, any of such Person’s liabilities, including all
“
indebtedness (whether recourse or nonrecourse, short term or long term, direct or contingent), all
committed and unfunded liabilities, and all unfunded liabilities, that would appear upon a balance
sheet of such Person prepared in accordance with GAAP.
“Default Rate” shall have the meaning given to that term in the Borrower Notes.
“Determination of Taxability” shall mean (i)a determination by the Commissioner or any
District Director of the Internal Revenue Service, (ii)a private ruling or Technical Advice
Memorandum concerning the Governmental Lender Notes issued by the National Office of the
Internal Revenue Service in which Governmental Lender and Borrower were afforded the
opportunity to participate, (iii)a determination by any court of competent jurisdiction, (iv)the
enactment of legislation or (v)receipt by the Funding Lender, at the request of the Governmental
Lender, the Borrower or the Funding Lender, of an opinion of Tax Counsel, in each case to the effect
that the interest on the Governmental Lender Notes is includable in grossincome for federal income
tax purposes of any holder or any former holder of all or a portion of the Governmental Lender
Notes, other than a holder who is a “substantial user” of the Project or a “related person” (as such
terms are defined in Section147(a) of the Code); provided, however, that no such Determination of
Taxability under clause(i) or (iii) shall be deemed to have occurred if the Governmental Lender (at
the sole expense of the Borrower), the Funding Lender (at the sole expense of the Borrower) or the
Borrower is contesting such determination, has elected to contest such determination in good faith
and is proceeding with all applicable dispatch to prosecute such contest until the earliest of (a)a final
determination from which no appeal may be taken with respect to such determination,
(b)abandonment of such appeal by the Governmental Lender or the Borrower, as the case may be, or
(c)one year from the date of initial determination.
“Developer Fee” shall have the meaning set forth in the Construction Funding Agreement.
“Disbursement” means a disbursement of Borrower Loan Proceeds and Other Borrower
Moneys pursuant to this Borrower Loan Agreement.
“Engineer” shall mean any licensed civil, structural, mechanical, electrical, soils,
environmental or other engineer that Borrower may engage from time to time, with the approval of
7
Funding Lender, to perform any engineering services with respect to any portion of the
Improvements.
Engineer’s Contract” shall mean any agreement that Borrower and any Engineer from time
“
to time may execute pursuant to which Borrower engages such Engineer to perform any engineering
services with respect to any portion of the Improvements, as approved by Funding Lender.
“Equipment” shall have the meaning given to the term “Personalty” in the Security
Instrument.
“Equity Contributions” shall mean the equity to be contributed by the Equity Investor to
Borrower, in accordance with and subject to the terms of the Partnership Agreement.
Equity Investor” shall mean Raymond James California Housing Opportunities Fund VI
“
L.L.C., a Florida limited liability company, and its permitted successors and assigns.
ERISA” shall mean the Employment Retirement Income Security Act of 1974, as amended
“
from time to time, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” shall mean all members of a controlled group of corporations and all
trades and business (whether or not incorporated) under common control and all other entities which,
together with the Borrower, are treatedas a single employer under any or all of Section414(b), (c),
(m) or (o) of the Code.
“Event of Default” shall mean any Event of Default set forth in Section8.1 of this Borrower
Loan Agreement. An Event of Default shall “exist” if a Potential Default shall have occurred and be
continuing beyond any applicable cure period.
Excess Revenues” shall have the meaning ascribed thereto in Section2.2(e) hereof.
“
Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“
Expenses of the Project” shall mean, for any period, the current expenses, paid or accrued,
“
for the operation, maintenance and current repair of the Project, as calculated in accordance with
GAAP, and shall include, without limiting the generality of the foregoing, salaries, wages, employee
benefits, cost of materials and supplies, costs of routine repairs, renewals, replacements and
alterations occurring in the usual course of business, costs and expenses properly designated as
capital expenditures (e.g. repairs which would not bepayable from amounts on deposit in a repair
and replacement fund held pursuant to the Borrower Loan Documents), a management fee (however
characterized) not to exceed the Underwritten Management Fee, costs of billings and collections,
costs of insurance, and costs of audits. Expenses of the Project shall not include any payments,
however characterized, on account of any subordinate financing in respect of the Project or other
indebtedness, allowance for depreciation, amortization or other non-cash items, gains and losses or
prepaid expenses not customarily prepaid.
“Extended Outside Conversion Date” shall have the meaning set forth in the Construction
Funding Agreement.
“Fair Market Value” shall mean the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date
8
the contract to purchase or sell the investment becomes binding) if the investment is traded on an
established securities market (within the meaning of Section1273 of the Code) and, otherwise, the
term “Fair Market Value” means the acquisition price in a bona fide arm’s length transaction (as
referenced above) if (i)the investment is a certificate of deposit that is acquired in accordance with
applicable regulations under the Code, (ii)the investment is an agreement with specifically
negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for
example, aguaranteed investment contract, a forward supply contract or other investment agreement)
that is acquired in accordance with applicable regulations under the Code, (iii)the investment is a
United States Treasury Security State and Local Government Seriesthat is acquired in accordance
with applicable regulations of the United States Bureau of Public Debt, or (iv)the investment is an
interest in any commingled investment fund in which the Governmental Lender and related parties
do not own more than a ten percent (10%) beneficial interest therein if the return paid by the fund is
without regard to the source of investment.
“Fiscal Agent” shall mean the Fiscal Agent from time to time under and pursuant to the
Funding Loan Agreement. Initially, the Fiscal Agent is U.S. Bank National Association.
“Funding Lender” shall mean Citibank, N.A., a national banking association, in its capacity
as lender under the Funding Loan.
“Funding Loan” means the Funding Loan in the original maximum principal amount of
$______________made by Funding Lender to Governmental Lender under the Funding Loan
Agreement, the proceeds of which are used by the Governmental Lender to make the Borrower Loan.
Funding Loan Agreement” means the Funding Loan Agreement, of even date herewith,
“
among the Governmental Lender, the Fiscal Agent and the Funding Lender, as it may from time to
time be supplemented, modified or amended by one or more amendments or other instruments
supplemental thereto entered into pursuant to the applicable provisions thereof.
“Funding Loan Documents” shall have the meaning given to that term in the Funding Loan
Agreement.
“GAAP” shall mean generally accepted accounting principles as in effect on the date of the
application thereof and consistently applied throughout the periods covered by the applicable
financial statements.
General Partner” shall mean, collectively, (i)the Administrative General Partner, (ii)the
“
Managing General Partner, and/or (iii)any other Person that the partners of the Borrower, with the
prior written approval of the Funding Lender (or as otherwise permitted with the Funding Lender’s
approval pursuant to the Borrower Loan Documents), selected to be a general partner of the
Borrower.
“Governmental Authority” shall mean (i)any governmental municipality or political
subdivision thereof, (ii)any governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, or (iii)any court, administrative tribunal or
public utility, agency, commission, office or authority of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or otherwise), now or hereafter in
existence.
9
Governmental Lender” shall have the meaning set forth in the recitals to thisBorrower
“
Loan Agreement.
Governmental Lender Notes” shall mean, collectively, the Series B-1Governmental
“
Lender Note and the Series B-2Governmental Lender Note.
“Governmental Lender’s Closing Fee” shall mean the administrative fees of the
Governmental Lender payable on the Closing Date, as specified in the definition of “Governmental
Lender Fee” in the Regulatory Agreement. The Governmental Lender’s Closing Fee is payable to
the Governmental Lender on the Closing Date pursuant to Section2.3(c)(iii) hereof.
Gross Income” shall mean all receipts, revenues, income and other moneys received or
“
collected by or on behalf of Borrower and derived from the ownership or operation of the Project, if
any, and all rights to receive the same, whether in the form ofaccounts, accounts receivable, contract
rights or other rights, and the proceeds of such rights, and whether now owned or held or hereafter
coming into existence and proceeds received upon the foreclosure sale of the Project. Gross Income
shall not include loan proceeds, equity or capital contributions, or tenant security deposits being held
by Borrower in accordance with applicable law.
“Gross Proceeds” shall mean, without duplication, the aggregate of:
(a)the net amount (after payment of all expenses of originating the Funding
Loan) of Funding Loan proceeds received by the Governmental Lender as a result of the origination
of the Funding Loan;
(b)all amounts received by the Governmental Lender as a result of the
investment of the Funding Loan proceeds;
(c)any amounts held in any fund or account to the extent that the Governmental
Lender reasonably expects to use the amounts in such fund to pay any portion of the Funding Loan;
and
(d)any securities or obligations pledged by the Governmental Lender or by the
Borrower as security for the payment of any portion of the Funding Loan.
“Guarantor” shall mean, collectively, (i)Chelsea Investment Corporation, a California
corporation, (ii)Emmerson Construction, Inc., a California Corporation (with respect to its
Completion Guaranty only), and (iii)any other person or entity which may hereafter become a
guarantor of any of the Borrower’s obligations under the Borrower Loan.
Guaranty” shall mean, collectively, (i)the Completion and Repayment Guaranty, by the
“
Guarantor for the benefit of the Beneficiary Parties (as defined therein), (ii)the Exceptions to Non-
Recourse Guaranty, by Guarantor for the benefit of the Beneficiary Parties (as defined therein), and
(iii) the Completion Guaranty of Emmerson Construction, Inc. for the benefit of the Beneficiary
Parties (as defined therein) each of which is of even date herewith.
“Improvements” shall mean the 118-unit plus 1 manager’s unit multifamily rental housing
project to be rehabilitated upon the Land and known as “St. Regis Park Apartments”, and all other
buildings, structures, fixtures, wiring, systems, equipment and other improvements and personal
10
property to be constructed, rehabilitated and/or installed at or on the Land in accordance with the
Cost Breakdown and the Plans and Specifications.
Indemnified Party” shall have the meaning set forth in Section5.15 hereof.
“
“Installment Computation Date” shall mean any Computation Date other than the first
Computation Date or the final Computation Date.
“Interest Rate” shall mean the rate of interest accruing on the Borrower Loan pursuant to the
Borrower Notes.
“Interim Phase Amount” shall mean $______________.
“
Land” means the real property described on ExhibitA to the Security Instrument.
Late Charge” shall mean the amount due and payable as a late charge on overdue payments
“
under the Borrower Notes, as provided in Section7 of the Borrower Notes and Section2.5 hereof.
Legal Action” shall mean an action, suit, investigation, inquiry, proceeding or arbitration at
“
lawor in equity or before or by any foreign or domestic court, arbitrator or other Governmental
Authority.
“Legal Requirements” shall mean statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting all or part of the Project or
any property (including the Project) or the construction, rehabilitation, use, alteration or operation
thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations
and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances
contained in any instrument, either of record or known to the Borrower, at any time in force affecting
all or part of the Project, including any that may (i)require repairs, modifications or alterations in or
to all or part of the Project, or (ii)in any way limit the use and enjoyment thereof.
Liabilities” shall have the meaning set forth in Section5.15 hereof.
“
“Licenses” shall have the meaning set forth in Section4.1.22hereof.
“Lien” shall mean any interest, or claim thereof, in the Project securing an obligation owed
to, or a claim by, any Person other than the owner of the Project, whether such interest is based on
common law, statute or contract, including the lien or security interest arising from a deed of trust,
mortgage, deed to secure debt, assignment, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security purposes. The term “Lien” shall
include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting the Project.
Management Agreement” shall mean the Management Agreement between the Borrower
“
and the Manager, pursuant to which the Manager is to manage the Project, as same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
“Manager” shall mean the management company to be employed by the Borrower and
approved by the Funding Lender in accordance with the terms of the Security Instrument, this
Borrower Loan Agreement or any of the other Borrower Loan Documents.
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Managing General Partner” shall mean Pacific Southwest Community Development
“
Corporation, a California nonprofit public benefit corporation, as managing general partner of the
Borrower.
“Material Adverse Change” means any set of circumstances or events which (a)has or
could reasonably be expected to have any material adverse effect whatsoever uponthe validity or
enforceability of this Borrower Loan Agreement or any other Borrower Loan Document; (b)is or
could reasonably be expected to be material and adverse to the business, properties, assets, financial
condition, results of operations of the Borrower, General Partner, Guarantor or the Mortgaged
Property; (c)could reasonably be expected to impair materially the ability of the Borrower, General
Partner or Guarantor to duly and punctually pay or perform any of their respective obligations under
any of the Borrower Loan Documents to which they are a party; or (d)impairs materially or could
reasonably be expected to impair materially any rights of or benefits available to the Governmental
Lender under this Borrower Loan Agreement or any other Borrower Loan Document, including,
without limitation, the ability of Governmental Lender or, upon the assignment of the Borrower Loan
to it, of the Funding Lender, to the extent permitted, to enforce its legal remedies pursuant to this
Borrower Loan Agreement or any other Borrower Loan Document.
“Moody’s” shall mean Moody’s Investors Service, Inc., or its successor.
“Mortgaged Property” shall have the meaning given to that term in the Security Instrument.
“Net Operating Income” shall mean: (i)the Gross Income,less (ii)the Expenses of the
Project.
Nonpurpose Investment” shall mean any investment property (as defined in Section148(b)
“
of the Code) that is acquired with the Gross Proceeds of the Funding Loan and which is not acquired
to carry out the governmental purpose of the Funding Loan.
“Ongoing Governmental Lender Fee” shall mean the ongoing portion of the Governmental
Lender Fee (as that term is defined in the Regulatory Agreement) that is payable after the Closing
Date.
“Other Borrower Moneys” shall meanmonies of Borrower other than Borrower Loan
Proceeds and includes, but is not limited to, the Subordinate Debt, Net Operating Income, the
Borrower’s Equity Contributions and any other funds contributed by or loaned to the Borrower for
application to the Costs of the Improvements or other costs associated with the Project.
Other Charges” shall mean all maintenance charges, impositions other than Taxes, and any
“
other charges, including vault charges and license fees for the use of vaults, chutes and similarareas
adjoining the Project, now or hereafter levied or assessed or imposed against the Project or any part
thereof.
“Outside Conversion Date” shall have the meaning set forth in the Construction Funding
Agreement.
“Partnership Agreement” shall mean that certain Second Amended and Restated
Agreement of Limited Partnership of the Borrower dated as of _____________ 1, 2019, as the same
may be amended, restated or modified from time to time in accordance with its terms.
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Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate
“
Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001, as the same
may be amended from time to time, and corresponding provisions of future laws.
“Patriot Act Offense” shall have the meaning set forth in Section4.1.48 hereof.
“Permanent Period” shall mean the period of time from the Conversion Date to the Maturity
Date (as defined in the Funding Loan Agreement).
“Permanent Period Amount” shall mean the principal amount of the Borrower Loan as of
the first day of the Permanent Period following the applicable calculation provided for in the
Construction Funding Agreement.
Permitted Encumbrances” shall have the meaning given to that term in the Security
“
Instrument.
Permitted Lease” shall mean a lease and occupancy agreement pursuant to the form
“
approved by Funding Lender, to a residential tenant in compliance with the Legal Requirements,
providing for an initial term of not less than six (6)months nor more than two (2)years.
“Person” shall mean a natural person, a partnership, a joint venture, an unincorporated
association, a limited liability company, a corporation, a trust, any other legal entity, or any
Governmental Authority.
“Plan” shall mean (i)an employee benefit or other plan established or maintained by the
Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate makes or is
obligated to make contributions and (ii)which is covered by Title IV of ERISA or Section302 of
ERISA or Section412 of the Code.
Plans and Specifications” shall mean the plans and specifications, and all approved
“
changes thereto pursuant to the approval process set forth in the Construction Funding Agreement,
for the construction and/or rehabilitation, as the case may be, of the Project approved by Funding
Lender.
“Potential Default” shall mean the occurrence of an event which, under this Borrower Loan
Agreement or any other Borrower Loan Document, would, but for the giving of notice or passage of
time, or both, be an Event of Default.
Prepayment Premium” shall mean any premium payable by the Borrower pursuant to the
“
Borrower Loan Documents in connection with a prepayment of the Borrower Notes (including any
prepayment premium as set forth in the Borrower Notes).
Project” shall mean the Mortgaged Property (as defined in the Security Instrument) and
“
Improvements thereon owned by the Borrower and encumbered by the Security Instrument, together
with all rights pertaining to such real property and Improvements, as more particularly described in
the Granting Clauses of the Security Instrument and referred to therein as the “Mortgaged Property.”
“Project Agreements and Licenses” shall mean any and all Construction Contracts,
Engineer’s Contracts and Management Agreements, and all other rights, licenses, permits, franchises,
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authorizations, approvals and agreements relating to use, occupancy, operation or leasing of the
Project or the Mortgaged Property.
Provided Information” shall have the meaning set forth in Section9.1.1 (a) hereof.
“
“Qualified Project Costs” shall have the meaning given to it in the Regulatory Agreement.
“Rebate Amount” shall mean, for any given period, the amount determined by the Rebate
Analyst as required to be rebated or paid as a yield reduction payment to the United States of
America with respect to the Funding Loan.
“Rebate Analyst” shall mean the rebate analyst selected by the Borrower and acceptable to
the Governmental Lender and the Funding Lender.
Rebate Analyst’s Fee” shall mean the annual fee of the Rebate Analyst payable by the
“
Borrower to the Rebate Analyst.
Rebate Fund” shall mean the Rebate Fund created pursuant to Section5.35 hereof.
“
Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive
“
Covenants, dated as of _____________ 1, 2019, betweenthe Governmental Lender and the
Borrower.
“Related Documents” shall mean, collectively, any agreement or other document (other than
the Borrower Loan Documents) granting a security interest (including each agreement that is the
subject of any Borrower Loan Document), and any other agreement, instrument or other document
(not constituting a Borrower Loan Document) relating to or executed in connection with the
transactions contemplated by this Borrower Loan Agreement, but excluding the Partnership
Agreement.
Replacement Reserve Agreement” shall mean the Replacement Reserve Agreement, of
“
even date herewith, between the Borrower and the Funding Lender, as the same may be amended,
restated or supplemented from time to time.
“Replacement Reserve Fund Requirement” means Borrower’s funding obligations from
time to time under the Replacement Reserve Agreement.
“Retainage” shall have the meaning set forth in the Construction Funding Agreement.
“Review Fee” shall mean the three thousand dollar ($3,000) fee payable to Funding Lender
in connection with the review of requests from the Borrower in connection with events requiring the
consent and/or approval of the Funding Lender, including, but not limited to, subordinate financings
and easements.
Secondary Market Disclosure Document” shall have the meaning set forth in
“
Section9.1.2 hereof.
“Secondary Market Transaction” shall have the meaning set forth in Section9.1.1 hereof.
“Securities” shall have the meaning set forth in Section9.1.1 hereof.
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Securities Act” shall mean the Securities Act of 1933, as amended.
“
Security Documents” shall mean the Security Instrument, the Replacement Reserve
“
Agreement, the Collateral Agreements, the Collateral Assignments, this Borrower Loan Agreement,
the Agreement of Environmental Indemnification, and such other security instruments that Funding
Lender may reasonably request.
“Security Instrument” shall have the meaning set forth in the recitals to this Borrower Loan
Agreement.
“Series B-1Borrower Note” shall mean that certain Multifamily Note, dated the Closing
Date, in the original maximum principal amount of $_________________, made by the Borrower
and payable to the Governmental Lender, evidencing the loan of the proceeds of the Series B-1
Governmental LenderNote, as endorsed and assigned by the Governmental Lender without recourse
to the Funding Lender, as executed by the Borrower, and as it may thereafter be amended or
supplemented from time to time.
“Series B-1Governmental Lender Note” shall mean that certain Chula Vista Housing
Authority Multifamily Housing Revenue Note (St. Regis Park Apartments) 2019Series B-1, dated
the Closing Date, in the original maximum principal amount of $_________________, made by the
Governmental Lender and payable to the Funding Lender, as executed by the Governmental Lender
and as it may thereafter be amended or supplemented from time to time.
Series B-2Borrower Note” shall mean that certain Multifamily Note, dated the Closing
“
Date, in the original maximum principal amount of $_________________, made by the Borrower
and payable to the Governmental Lender, evidencing the loan of the proceeds of the Series B-2
Governmental Lender Note, as endorsed and assigned by the Governmental Lender without recourse
to the Funding Lender, as executed by the Borrower, and as it may thereafter be amended or
supplemented from time to time.
“Series B-2Governmental Lender Note” shall mean that certain Chula Vista Housing
Authority Multifamily Housing Revenue Note(St. Regis Park Apartments) 2019Series B-2, dated
the Closing Date, in the original maximum principal amount of $_________________, made by the
Governmental Lender and payable to the Funding Lender, as executed by the Governmental Lender
and as it may thereafter be amended or supplemented from time to time
Servicer” shall mean the Servicer contracting with or appointed by the Funding Lender to
“
service the Borrower Loan. The initial Servicer shall be Citibank, N.A.
Servicing Agreement” shall mean any servicing agreement or master servicing agreement,
“
between the Servicer and the Funding Lender relating to the servicing of the Borrower Loan and any
amendments thereto or any replacement thereof.
“Standard & Poor’s” or “S&P” shall mean S&P Global Ratings, a business unit of Standard
& Poor’s Rating Services, or its successors.
“State” shall mean the State in which the Project is located.
“Subordinate Debt” shall mean the subordinate construction and permanent loan to
Borrower in the amount of \[$1,275,778\]being made by the City of Chula Vistaas of the Closing
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Date and the subordinate seller loan in the amount of \[$13,200,000\]from ______________, a
California limited partnership, pursuant to the Subordinate Loan Documents.
Subordinate Lender” shall mean the City of Chula Vistaand _____________, a California
“
limited partnership, as applicable.
“Subordinate Loan Documents” shall mean, collectively, all instruments, agreements and
other documents evidencing, securing or otherwise relating to the Subordinate Debt or executed and
delivered by Borrower and/or Subordinate Lender in connection with the Subordinate Debt.
“Substantial Completion Date” shall have the meaning set forth in the Construction
Funding Agreement.
Substantially Complete” or “Substantially Completed” shall have the meaning set forth
“
in the Construction Funding Agreement.
Tax Counsel” shall have the meaning set forth in the Funding Loan Agreement.
“
Taxes” shall mean all real estate and personal property taxes, assessments, water rates or
“
sewer rents, now or hereafter levied or assessed or imposed against all or part of the Project.
“Term” shall mean the term of this Borrower Loan Agreement pursuant to Section10.14.
“Title Company” means First American Title Insurance Company.
“Title Insurance Policy” shall mean the mortgagee title insurance policy, in form acceptable
to the Funding Lender, issued with respect to the Mortgaged Property and insuring the lien of the
Security Instrument.
Transfer” shall have the meaning given to that term in the Security Instrument.
“
UCC” shall mean the Uniform Commercial Code as in effect in the State.
“
Unassigned Rights” shall have the meaning set forth in the Funding Loan Agreement.
“
Underwritten Management Fee” shall have the meaning set forth in the Construction
“
Funding Agreement.
“Unit” shall mean a residential apartment unit within the Improvements.
“Written Consent” and “Written Notice” shall mean a written consent or notice signed by
an Authorized Borrower Representative or an authorized representative of the Governmental Lender
or the Funding Lender, as appropriate.
ARTICLE II
GENERAL
. In order to provide funds for the purposes
Section 2.1Origination of Borrower Loan
provided herein, the Governmental Lender agrees that it will, in accordance with the Act, enter into
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the Funding Loan Agreement and accept the Funding Loan from the Funding Lender. The proceeds
of the Funding Loan shall be advanced by the Funding Lender and disbursed by the Fiscal Agent to
the Borrower in accordance with the terms of the Construction Funding Agreement and this
Borrower Loan Agreement; provided that the first such disbursement on the Closing Date shall be
made by the Funding Lender to the Fiscal Agent, which shall transfer such funds to the Title
Company as specified in Section7.7(a) of the Funding Loan Agreement.
The Governmental Lender hereby appoints the Funding Lender as its agent with full
authority and power to act on its behalf to disburse the Borrower Loan for the account of the
Governmental Lender, to take certain actions and exercise certain remedies with respect to the
Borrower Loan, and for the other purposes set forth in this Borrower Loan Agreement and to do all
other acts necessary or incidental to the performance and execution thereof. This appointment is
coupled with an interest and is irrevocable except asexpressly set forth herein. Accordingly,
references to the rights of the Funding Lender to take actions under this Borrower Loan Agreement
shall refer to Funding Lender in its role as agent of the Governmental Lender. The Funding Lender
may designate Servicer to fulfill the rights and responsibilities granted by Governmental Lender to
Funding Lender pursuant to this Section2.1. Notwithstanding the foregoing, disbursements of the
Borrower Loan shall be made from the Project Fund held by the Fiscal Agentpursuant to the
Funding Loan Agreement.
Section 2.2Security for the Funding Loan.
(a)As security for the Funding Loan, the Governmental Lender has pledged and
assigned to the Funding Lender under and pursuant to the Funding Loan Agreement (a)the Borrower
Notes and allof its right, title and interest in and to this Borrower Loan Agreement and the Borrower
Loan Documents (except for the Unassigned Rights) and all revenues and receipts therefrom and the
security therefor (including the Security Instrument) and (b)the amounts on deposit from time to
time in any and all funds established under the Funding Loan Agreement. All revenues and assets
pledged and assigned thereby shall immediately be subject to the lien of such pledge without any
physical delivery thereof or anyfurther act, except in the case of the Borrower Notes, which shall be
delivered to the Funding Lender. The Borrower hereby acknowledges and consents to such
assignment to the Funding Lender.
(b)With respect to the Unassigned Rights, subject to the limitations set forth in
this Section2.2, the Governmental Lender may:
(i)Tax Covenants. Seek specific performance of, and enforce, the tax
covenants in Section8.7 of the Funding Loan Agreement, the provisions of the Regulatory
Agreement, the Tax Certificate and the covenants of the Borrower in Section5.34 of this Borrower
Loan Agreement, and seek injunctive relief against acts which may be in violation of any of the
foregoing covenants, and enforce the Borrower’s obligation under Section5.35 to pay amounts for
credit to the Rebate Fund;
(ii)Regulatory Agreement. Seek specific performance of the obligations
of the Borrower or any other owner of the Project under the Regulatory Agreement and injunctive
relief against acts which may be in violation of the Regulatory Agreement or otherwise in accordance
with the provisions of the Regulatory Agreement; provided, however, that the Governmental Lender
may enforce any right it may have under the Regulatory Agreement for monetary damages only
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against Excess Revenues (defined below), if any, of the Borrower, unless Funding Lender otherwise
specifically consents in writing to the use of other funds; and
(iii)Reserved Rights. Take whatever action at law or in equity which
appears necessary or desirable to enforce the other Unassigned Rights, provided, however, that the
Governmental Lender or any person under its control may only enforce any right it may have for
monetary damages against Excess Revenues, if any, of the Borrower, unless Funding Lender
otherwise specifically consents in writing to the enforcement against other funds of the Borrower.
(c)In no event shall the Governmental Lender, except at the express written
direction of the Funding Lender:
(i)prosecute its action to a lien on the Project; or
(ii)except in connection with actions under Section2.2(b) above, take
any action which may have the effect, directly or indirectly, of impairing the ability of the Borrower
to timely pay the principal of, interest on, or other amounts due under, the Borrower Loan or of
causing the Borrower to file a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Borrower under any applicable liquidation, insolvency,
bankruptcy, rehabilitation, composition, reorganization, conservation or other similar law in effect
now or in the future; or
(iii)interfere with the exercise by Funding Lender or Servicer of any of
their rights under the Borrower Loan Documents upon the occurrence of an event of default by the
Borrower under the Borrower Loan Documents or the Funding Loan Documents; or
(iv)take any action to accelerate or otherwise enforce payment or seek
other remedies with respect to the Borrower Loan or the Funding Loan.
(d)The Governmental Lender shall provide Written Notice to the Funding
Lender and the Servicer immediately upon taking any action at law or in equity to exercise any
remedy or direct any proceeding under the Borrower Loan Documents or the Funding Loan
Documents.
(e)As used in this Section2.2, the term “Excess Revenues” means, for any
period, the net cash flow of theBorrower available for distribution to shareholders, members or
partners (as the case may be) for such period, after the payment of all interest expense, the
amortization of all principal of all indebtedness coming due during such period (whether by maturity,
mandatory sinking fund payment, acceleration or otherwise), the payment of all fees, costs and
expenses on an occasional or recurring basis in connection with the Borrower Loan or the Funding
Loan, the payment of all operating, overhead, ownership andother expenditures of the Borrower
directly or indirectly in connection with the Project (whether any such expenditures are current,
capital or extraordinary expenditures), and the setting aside of all reserves for taxes, insurance, water
and sewer charges or other similar impositions, capital expenditures, repairs and replacements and all
other amounts which the Borrower is required to set aside pursuant to agreement, but excluding
depreciation and amortization of intangibles.
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Section 2.3Loan; Borrower Notes; Conditions to Closing.
(a)The Funding Loan shall be funded directly to the Fiscal Agent by the Funding
Lender for disbursement to the Borrower pursuant to the Construction Funding Agreement in one or
more installments not to exceed the Borrower Loan Amount in accordance with the disbursement
procedures set forth in the Construction Funding Agreement and the Funding Loan Agreement,
except for the initial disbursement of the Funding Loan as provided in Section7.7(a) of the Funding
Loan Agreement. Upon funding of each installment of the Funding Loan, the Governmental Lender
shall be deemed to have made the Borrower Loan to the Borrower in a like principal amount. The
Borrower Loan advances and Funding Loan advances shall be allocated first to the Series B-1
Borrower Note and the related Series B-1Governmental Lender Note and, once the foregoing have
been fully funded, then to the Series B-2Borrower Note and the related Series B-2Governmental
Lender Note. The Borrower Loan shall mature and be payable at the times and in the amounts
required under the terms hereof and of the Borrower Notes. The proceeds of the Borrower Loan
shall be used by the Borrower to pay costs of the acquisition, construction, rehabilitation,
development, equipping and/or operation of the Project. The Borrower hereby accepts the Borrower
Loan and acknowledges that the Governmental Lender shall cause the Funding Lender to fund the
Borrower Loan in the manner set forth herein and in the Funding Loan Agreement. The
Governmental Lender acknowledges that the Borrower Loan shall be funded by the Funding Lender
to the Fiscal Agent for the account of the Governmental Lender, except as otherwise provided in
Section7.7 of the Funding Loan Agreement with respect to the funding thereof on the Closing Date.
(b)The Borrower hereby accepts the Borrower Loan. As evidence of its
obligation to repay the Borrower Loan, simultaneously with its execution and delivery of this
Borrower Loan Agreement, the Borrower hereby agrees to execute and deliver the Borrower Notes.
The Borrower Loan shall mature and be payable at the times and in the amounts required under the
terms hereof and of the Borrower Notes.
(c)Closing of the Borrower Loan on the Closing Date shall be conditioned upon
satisfaction or waiver by the Governmental Lender and the Funding Lender, in their sole discretion,
of each of the conditions precedent to closing set forth in the Funding Loan Agreement and this
Borrower Loan Agreement, including but not limited to the following:
(i)evidence of proper recordation of the Security Instrument, an
assignment of the Security Instrument from the Governmental Lender to the Funding Lender, the
Regulatory Agreement, and each of the other documents specified for recording in instructions
delivered to the Title Company by counsel to the Funding Lender (or that such documents have been
delivered to an authorized agent of the Title Company for recordation under binding recording
instructions from Funding Lender’s counsel orsuch other counsel as may be acceptable to the
Funding Lender);
(ii)delivery to the Fiscal Agent or into escrow with the Title Company
(or separate escrow company, if applicable) of all amounts required to be paid in connection with the
origination of the Borrower Loan and the Funding Loan and any underlying real estate transfers or
transactions, including the Costs of Funding Deposit and the Borrower Initial Equity, all as specified
in written instructions delivered to the Title Company by counsel to the Funding Lender (or such
other counsel as may be acceptable to the Funding Lender) and/or as specified in a closing
memorandum of the Funding Lender; and
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(iii)payment of all fees payable in connection with the closing of the
Borrower Loan including the Governmental Lender’s Closing Fee and the initial fees and expenses
of the Fiscal Agent and the Funding Lender.
In addition, closing of the Borrower Loan shall be subject to the delivery of an opinion of
counsel to the Borrower addressed to the Governmental Lender and the Funding Lender, dated the
Closing Date, in form and substance acceptable to Tax Counsel, regarding the due execution by the
Borrower of, and the enforceability against the Borrower of, the Borrower Loan Documents.
Section 2.4Borrower Loan Payments.
(a)The Borrower shall make Borrower Loan Payments in accordance with the
Borrower Notes. Each Borrower Loan Payment made by the Borrower shall be made in funds
immediately available through and including the Conversion Date on the Borrower Loan Payment
Date, to the FiscalAgent by 2:00 p.m., New York City time, or, if to the Servicer by 11:00 a.m., New
York City time, and after the Conversion Date on the date that is two (2) Business Days prior to the
Borrower Loan Payment Date to the Servicer, by 11:00 a.m., New York Citytime. Each such
payment shall be made to the Fiscal Agent or the Servicer, as applicable, by deposit to such account
as the Fiscal Agent or Servicer, as applicable, may designate by Written Notice to the Borrower.
Whenever any Borrower Loan Payment shall be stated to be due on a day that is not a Business Day,
such payment shall be due on the first Business Day immediately thereafter. In addition, the
Borrower shall make Borrower Loan Payments in accordance with the Borrower Notes in the
amounts and at the times necessary to make all payments due and payable on the Funding Loan. All
payments made by the Borrower hereunder or by the Borrower under the other Borrower Loan
Documents, shall be made irrespective of, and without any deduction for, any set-offs or
counterclaims, but such payment shall not constitute a waiver of any such set offs or counterclaims.
(b)Unless there is no Servicer, payments of principal and interest on the
Borrower Notes shall be paid to the Servicer and the Servicer shall then remit such funds to the
Fiscal Agent. If there is no Servicer, payments of principal and interest on the Borrower Notes shall
be paid directly to the Fiscal Agent.
Section 2.5Additional Borrower Payments.
(a)The Borrower shall pay the following amounts:
(i)to the Fiscal Agent, the Rebate Amount then due, if any, to be
deposited in the Rebate Fund as specified in Section5.35 hereof and the Rebate Analyst’s Fee and
any other costs incurred to calculate such Rebate Amount (to the extent such costs are not included in
the Borrower Loan Payment);
(ii)to the Governmental Lender, any and, on demand, all fees, charges,
costs, advances, indemnities and expenses, including agent and counsel fees, of the Governmental
Lender incurred by the Governmental Lender at any time in connection with theBorrower Loan
Documents, the Funding Loan Documents or the Project, including, without limitation, the Ongoing
Governmental Lender Fee, counsel fees and expenses incurred in connection with the interpretation,
performance, or amendment and all counsel fees and expenses relating to the enforcement of the
Borrower Loan Documents or the Funding Loan Documents or any other documents relating to the
20
Project or the Borrower Loan or in connection with questions or other matters arising under such
documents or in connection with any federal or state tax audit;
(iii)\[Reserved\];
(iv)all Costs of Funding and fees, charges and expenses, including agent
and counsel fees incurred in connection with the origination of the Borrower Loan and the Funding
Loan, as and when the same become due;
(v)to the Funding Lender, on demand, all charges, costs, advances,
indemnities and expenses, including agent and counsel fees, of the Funding Lender incurred by the
Funding Lender at any time in connection with the Borrower Loan, the Funding Loan or the Project,
including, without limitation, any Review Fee, reasonable counsel fees and expenses incurred in
connection with the interpretation, performance, or amendment and all counsel fees and expenses
relating to the enforcement of the Borrower LoanDocuments or the Funding Loan Documents or any
other documents relating to the Project or the Borrower Loan or in connection with questions or other
matters arising under such documents or in connection with any federal or state tax audit;
(vi)all Late Charges due and payable under the terms of the Borrower
Notes and Section2.6 hereof; provided, however, that all payments made pursuant to this subsection
(vi) shall be made to the Servicer, and if there is no Servicer, such payments shall be made to the
Funding Lender; and
(vii)to the Fiscal Agent, all fees, charges, costs, advances, indemnities and
expenses, including agent and counsel fees, of Fiscal Agent incurred under the Borrower Loan
Documents or the Funding Loan Documents as and when the same become due.
(b)TheBorrower shall pay to the party entitled thereto as expressly set forth in
this Borrower Loan Agreement or the other Borrower Loan Documents or Funding Loan Documents:
(i)all expenses incurred in connection with the enforcement of any rights
under this Borrower Loan Agreement or any other Borrower Loan Document, the Regulatory
Agreement, or any Funding Loan Document by the Governmental Lender, the Funding Lender, the
Fiscal Agent or the Servicer;
(ii)all other payments of whatever nature that the Borrower has agreed to
pay or assume under the provisions of this Borrower Loan Agreement or any other Borrower Loan
Document or Funding Loan Document; and
(iii)all expenses, costs and fees relating to inspections of the Project
required by the Governmental Lender, the FundingLender, the Fiscal Agent, the Servicer or the
Construction Consultant, in accordance with the Borrower Loan Documents or the Funding Loan
Documents or to reimburse such parties for such expenses, costs and fees.
Section 2.6Overdue Payments; Payments in Default. If any Borrower Payment
Obligation is not paid by or on behalf of the Borrower when due, the Borrower shall pay to the
Servicer a Late Charge in the amount and to the extent set forth in the Borrower Notes, if any.
Section 2.7Calculation of Interest Payments and Deposits to Real Estate Related
. The Borrower acknowledges as follows: (a)calculation of all interest payments
Reserve Funds
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shall be made by the Funding Lender; (b)deposits with respect to the Taxes and Other Charges shall
be calculated by the Servicer or ifthere is no Servicer, the Funding Lender in accordance with the
Security Instrument; and (c)deposits with respect to any replacement reserve funds required by the
Funding Lender shall be calculated by the Servicer in accordance with the Replacement Reserve
Agreement. In the event and to the extent that the Servicer or the Funding Lender, pursuant to the
terms hereof, shall determine at any time that there exists a deficiency in amounts previously owed
but not paid with respect to deposits to such replacement reserve fund, such deficiency shall be
immediately due and payable hereunder following Written Notice to the Borrower.
Section 2.8Grant of Security Interest; Application of Funds. To the extent not
inconsistent with the Security Instrument and as security for payment of the Borrower Payment
Obligations and the performance by the Borrower of all other terms, conditions and provisions of the
Borrower Loan Documents, the Borrower hereby pledges and assigns to the Fiscal Agent and the
Funding Lender, and grants to the Fiscal Agent and the Funding Lender, a security interest in, all the
Borrower’s right, title and interest in and to all payments to or moneys held in the funds and accounts
created and held by the Fiscal Agent, the Funding Lender or the Servicer for theProject. This
Borrower Loan Agreement is, among other things, intended by the parties to be a security agreement
for purposes of the UCC. Upon the occurrence and during the continuance of an Event of Default
hereunder, the Fiscal Agent, the Funding Lender and the Servicer shall apply or cause to be applied
any sums held by the Fiscal Agent, the Funding Lender and the Servicer with respect to the Project in
accordance with the provisions of Article IX of the Funding Loan Agreement to the extent applicable
and otherwise in any manner and in any order determined by Funding Lender, in Funding Lender’s
sole and absolute discretion.
Section 2.9Marshalling; Payments Set Aside. The Governmental Lender, the Fiscal
Agent and the Funding Lender shall be under no obligation tomarshal any assets in favor of the
Borrower or any other Person or against or in payment of any or all of the proceeds. To the extent
that the Borrower makes a payment or payments or transfers any assets to the Governmental Lender,
the Fiscal Agent or the Funding Lender, or the Governmental Lender, the Fiscal Agent or the
Funding Lender enforces its liens, and such payment or payments or transfers, or the proceeds of
such enforcement or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any other party in connection
with any insolvency proceeding, or otherwise, then: (i)any and all obligations owed to the
Governmental Lender, the Fiscal Agent or the Funding Lender and any and all remedies available to
the Governmental Lender, the Fiscal Agent or the Funding Lender under the terms of the Borrower
Loan Documents and the Funding Loan Documents or in law or equity against the Borrower,
Guarantor or General Partner and/or any of their properties shall be automatically revived and
reinstated to the extent (and only to the extent) of any recovery permitted under clause(ii) below; and
(ii)the Governmental Lender, the Fiscal Agent and the Funding Lender shall be entitled to recover
(and shall be entitled to file a proof of claim to obtain such recovery in any applicable bankruptcy,
insolvency, receivership or fraudulent conveyance or fraudulent transfer proceeding) either: (x)the
amount of payments or the value ofthe transfer or (y)if the transfer has been undone and the assets
returned in whole or in part, the value of the consideration paid to or received by the Borrower for
the initial asset transfer, plus in each case any deferred interest from the date of the disgorgement to
the date of distribution to the Governmental Lender, the Fiscal Agent or the Funding Lender in any
bankruptcy, insolvency, receivership or fraudulent conveyance or fraudulent transfer proceeding, and
any costs and expenses due and owing, including, without limitation, any reasonable attorneys’ fees
incurred by the Governmental Lender, the Fiscal Agent or the Funding Lender in connection with the
22
exercise by the Governmental Lender, the Fiscal Agent or the Funding Lender of its rights underthis
Section2.9.
Section 2.10Borrower Loan Disbursements. Proceeds of the Borrower Loan shall be
disbursed by the Fiscal Agent upon approval by the Funding Lender, as agent for the Governmental
Lender, pursuant to the Construction Funding Agreement, to or for the benefit of the Borrower as
provided in Section7.7 of the Funding Loan Agreement.
ARTICLE III
CONVERSION
. Borrower
Section 3.1Conversion Date and Extension of Outside Conversion Date
shall satisfy each of the Conditions to Conversion and cause the Conversion Date to occur on or
before the Outside Conversion Date (including the Extended Outside Conversion Date, if any), as
further provided in the Construction Funding Agreement. The failure to satisfy each of the
Conditions to Conversion on or before the Outside Conversion Date shall constitute an Event of
Default under the Borrower Loan Documents.
Section 3.2Notice From Funding Lender; Funding Lender’s Calculation Final.
Following satisfaction of all of the Conditions to Conversion, Funding Lender shall deliver Written
Notice to Borrower (with a copy to the Governmental Lender and the Fiscal Agent) of: (i)the
Conversion Date, (ii)the amount of the Permanent Period Amount, (iii)any required prepayment of
the Borrower Notes (as described below in Section3.3) and (iv)any amendments to the amortization
schedule, as applicable.
Funding Lender’s calculation of the Permanent Period Amount and any amendments to the
amortization of the Borrower Loan shall be, in the absence of manifest error, conclusive and binding
on all parties.
Section 3.3Mandatory Prepayment of the Borrower Loan. As further provided in the
Construction Funding Agreement, if and to the extent the Permanent Period Amount is less than the
Interim Phase Amount, Funding Lender may in its sole discretion require Borrower to make a partial
prepayment of the Borrower Loan in an amount equal to the difference between the Interim Phase
Amount and the Permanent Period Amount, provided, however, that if the Permanent Period Amount
is less than the Minimum Permanent Period Amount (as defined in the Construction Funding
Agreement), then Funding Lender may in its sole discretion require Borrower to prepay the Borrower
Loan in full.
Any prepayment in full or in part of the Borrower Loan required pursuant to the preceding
paragraph shall be subject to a prepayment premium under certain circumstances as more particularly
set forth in the Borrower Notes.
Section 3.4Release of Remaining Loan Proceeds. If and to the extent that the
Permanent Period Amount is greater than the principal amount of the Borrower Loan which has
previously been disbursed to Borrower, Funding Lender shall deliver Written Notice thereof to
Borrower (with a copy to the Governmental Lender) on or before the Conversion Date. Within ten
(10)business days after delivery of such notice, but in no event later than the Outside Conversion
Date, Funding Lender shall advance to the Fiscal Agent, for deposit by the Fiscal Agent to the Note
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Proceeds Account of the Project Fund under the Funding Loan Agreement, Funding Loan proceeds
so that the aggregate principal amount of the Funding Loan and of the Borrower Loan disbursed
equals the Permanent Period Amount. Any Borrower Loan proceeds previously disbursed to the
Borrower in excess of the Permanent Period Amount shall be paid by Borrower to Fiscal Agent.
Section 3.5No Amendment. Nothing contained in this Article III shall be construed to
amend, modify, alter, change or supersede the terms and provisions of the Borrower Notes, Security
Instrument, the Construction Funding Agreement or any other Borrower Loan Documentand, if there
shall exist a conflict between the terms and provisions of this Article III and those of the Borrower
Notes, Security Instrument, the Construction Funding Agreement or other Borrower Loan
Documents, then the terms and provisions of the Borrower Notes, Security Instrument, the
Construction Funding Agreement and other Borrower Loan Documents shall control; provided,
however, that in the event of a conflict between the terms and provisions of this Article III and those
of the Borrower’s loan application with the Funding Lender, the terms and provisions of this Article
III shall control.
Section 3.6Determinations by Funding Lender. In any instance where the consent or
approval of Funding Lender may be given or is required, or where any determination, judgment or
decision is to be rendered by Funding Lender under this Article III, including in connection with the
Construction Funding Agreement, the granting, withholding or denial of such consent or approval
and the rendering of such determination, judgment ordecision shall be made or exercised by the
Funding Lender (or its designated representative), at its sole and exclusive option and in its sole and
absolute discretion.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1Borrower Representations. To induce the Governmental Lender to execute
this Borrower Loan Agreement and to induce the Funding Lender to make Disbursements, the
Borrower represents and warrants for the benefit of the Governmental Lender, the Funding Lender,
the Fiscal Agent and the Servicer, that the representations and warranties set forth in this Section4.1
are complete and accurate in all material respects as of the Closing Date and, subject to Section 4.2,
shall survive the making of the Borrower Loan and will be complete and accurate in all material
respects, and deemed remade, except as otherwise noted through notice to Funding Lender and
approved by Funding Lender, as of the date of each Disbursement, as of the original Outside
Conversion Date, as of the date of any extension thereof and as of the Conversion Date in accordance
with the terms and conditions of the Borrower Notes:
Section 4.1.1Organization; Special Purpose. The Borrower is a limited
partnership in good standing under the laws of the State (and under the laws of the state in which the
Borrower was formed if the Borrower was not formed under the laws of the State), has full legal
right, power and authority to enter into the Borrower Loan Documents to which it is a party, and to
carry out and consummate all transactions contemplated by the Borrower Loan Documents to which
it is a party, and by proper limited partnership action has duly authorized the execution, delivery and
performance of the Borrower Loan Documents to which it is a party. The Person(s) of the Borrower
executing the Borrower Loan Documents and the Funding Loan Documents to which the Borrower is
a party are fully authorized to execute the same. The Borrower Loan Documents and the Funding
Loan Documents to which the Borrower is a party have been duly authorized, executed and delivered
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by the Borrower. The sole business of the Borrower is the ownership, management and operation of
the Project.
Section 4.1.2Proceedings; Enforceability. Assuming due execution and
delivery by the other parties thereto, the Borrower Loan Documents and the Funding Loan
Documents to which the Borrower is a party will constitute the legal, valid and binding agreements
of the Borrower enforceable against the Borrower in accordance with their terms; except in each case
as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of
creditors’ rights generally, by the application of equitable principles regardless of whether
enforcement is sought in a proceeding at law or in equity and by public policy.
Section 4.1.3No Conflicts. The execution and delivery of the Borrower Loan
Documents and the Funding Loan Documents to which the Borrower is a party, the consummation of
the transactions herein and therein contemplated and the fulfillment of or compliance with the terms
and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or
default (with due notice or the passage of time or both) under the Partnership Agreement of the
Borrower or to the best knowledge of the Borrower and with respect to the Borrower, any applicable
law or administrative rule or regulation, or any applicable court or administrative decree or order, or
any mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to
which the Borrower is a party or by which it or its properties are otherwise subject or bound, or result
in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever (other than
the lien of the Security Instrument) upon any of the property or assets of the Borrower, which
conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would
materially and adversely affect the consummation of the transactions contemplated by the Borrower
Loan Documents and the Funding Loan Documents, or the financialcondition, assets, properties or
operations of the Borrower.
Section 4.1.4Litigation; Adverse Facts. There is no Legal Action, nor is there a
basis known to Borrower for any Legal Action, before or by any court or federal, state, municipal or
other governmental authority, pending, or to the knowledge of the Borrower, after reasonable
investigation, threatened, against or affecting the Borrower, the General Partner or the Guarantor, or
their respective assets, properties or operations which, if determined adversely to the Borrower or its
interests, would have a material adverse effect upon the consummation of the transactions
contemplated by, or the validity of, the Borrower Loan Documents or the Funding Loan Documents,
upon the ability of each of Borrower, General Partner and Guarantor to perform their respective
obligations under the Borrower Loan Documents, the Funding Loan Documents and the Related
Documents to which it is a party, or upon the financial condition, assets (including the Project),
properties or operations of the Borrower, the General Partner or the Guarantor. None of the
Borrower, General Partner or Guarantor is in default (and no event has occurred and is continuing
which with the giving of notice or the passage of time or both could constitute a default) with respect
to any order or decree of any court or any order, regulation or demand of any federal, state, municipal
or other governmental authority, which default might have consequences that would materially and
adversely affect the consummation of the transactions contemplated by the Borrower Loan
Documents and the Funding Loan Documents, the ability of each of Borrower, General Partner and
Guarantor to perform their respective obligations under the Borrower Loan Documents, the Funding
Loan Documents and the Related Documents to which it is a party, or the financial condition, assets,
properties or operations of the Borrower, General Partner or Guarantor. None of Borrower, General
Partner or Guarantor are (a)in violation of any applicable law, which violation materially and
adversely affects or may materially and adversely affect the business, operations, assets (including
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the Project), financial condition of Borrower, General Partner or Guarantor, as applicable; (b)subject
to, or in default with respect to, any other Legal Requirement that would have a material adverse
effect on the business, operations, assets (including the Project), financial condition of Borrower,
General Partner or Guarantor, as applicable; or (c)in default with respect to any agreement to which
Borrower, General Partner or Guarantor, as applicable, are a party or by which they are bound, which
default would have a material adverse effect on the business, operations, assets (including the
Project), financial condition of Borrower, General Partner or Guarantor, as applicable; and (d)there
is no Legal Action pending or, to the knowledge of Borrower, threatened against or affecting
Borrower, General Partner or Guarantor questioning the validity or the enforceability of this
Borrower Loan Agreement or any of the other Borrower Loan Documents or the Funding Loan
Documents or of any of the Related Documents. All tax returns (federal, state and local) required to
be filed by or on behalf of the Borrower have been filed, and all taxesshown thereon to be due,
including interest and penalties, except such, if any, as are being actively contested by the Borrower
in good faith, have been paid or adequate reserves have been made for the payment thereof which
reserves, if any, are reflectedin the audited financial statements described therein. The Borrower
enjoys the peaceful and undisturbed possession of all of the premises upon which it is operating its
facilities.
Section 4.1.5Agreements; Consents; Approvals. Except as contemplated by
the Borrower Loan Documents and the Funding Loan Documents, the Borrower is not a party to any
agreement or instrument or subject to any restriction that would materially adversely affect the
Borrower, the Project, or the Borrower’s business, properties, operations or financial condition or
business prospects, except the Permitted Encumbrances. The Borrower is not in default in any
material respect in the performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Permitted Encumbrance or any other agreement or instrument to which it
is a party or by which it or the Project is bound.
No consent or approval of any trustee or holder of any indebtedness of the Borrower,
and to the best knowledge of the Borrower and only with respect to the Borrower, no consent,
permission, authorization, order or license of, or filing or registration with, any governmental
authority (except no representation is made with respect to any state securities or “blue sky” laws) is
necessary in connection with the execution and delivery of the Borrower Loan Documents or the
Funding Loan Documents, or the consummation of any transaction herein or therein contemplated, or
the fulfillment of or compliance with the terms and conditions hereof or thereof, except as have been
obtained or made and as are in full force and effect.
Section 4.1.6Title. The Borrower shall have marketable title to the Project free
and clear of all Liens except the Permitted Encumbrances. The Security Instrument, when properly
recorded in the appropriate records, together with any UCC financing statements required to be filed
in connection therewith, will create (i)a valid, perfected first priority lien on the fee interest in the
Project and (ii)perfected security interests in and to, and perfected collateral assignments of, all
personalty included in the Project (including the Leases), all in accordance with the terms thereof, in
each case subject only to any applicable Permitted Encumbrances. To the Borrower’s knowledge,
there are no delinquent real property taxes or assessments, including water and sewer charges, with
respect to the Project, nor are there any claims for payment for work, labor or materials affecting the
Project which are or may become a Lien prior to, or of equal priority with, the Liens created by the
Borrower Loan Documents and the Funding Loan Documents.
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Section 4.1.7Survey. To the best knowledge of the Borrower, the survey for the
Project delivered to the Governmental Lender and the Funding Lender does not fail to reflect any
material matter affecting the Project or the title thereto.
Section 4.1.8No Bankruptcy Filing. The Borrower is not contemplating either
the filing of a petition by it under any state or federal bankruptcy or insolvency law or the liquidation
of all or a major portion of itsproperty (a “Bankruptcy Proceeding”), and the Borrower has no
knowledge of any Person contemplating the filing of any such petition against it. As of the Closing
Date, the Borrower has the ability to pay its debts as they become due.
Section 4.1.9Full and Accurate Disclosure. No statement of fact made by the
Borrower in any Borrower Loan Document or any Funding Loan Document contains any untrue
statement of a material fact or omits to state any material fact necessary to make statements
contained therein in light of the circumstances in which they were made, not misleading. There is no
material fact or circumstance presently known to the Borrower that has not been disclosed to the
Governmental Lender and the Funding Lender which materially and adversely affects the Project or
the business, operations or financial condition or business prospects of the Borrower or the
Borrower’s ability to meet its obligations under this Borrower Loan Agreement and the other
Borrower Loan Documents and Funding Loan Documents to which it is a party in a timely manner.
Section 4.1.10No Plan Assets. The Borrower is not an “employee benefit plan,”
as defined in Section3(3) of ERISA, subject to Title I of ERISA, and none of the assets of the
Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of
29 C.F.R. Section2510.3 101.
Section 4.1.11Compliance. The Borrower, the Project and the use thereof will
comply, to the extent required, in all material respects with all applicable Legal Requirements. The
Borrower is not in default or violation of any order, writ, injunction, decree or demand of any
Governmental Authority, the violation of which would materially adversely affect the financial
condition or business prospects or the business of the Borrower. There has not been committed by
the Borrower or any Borrower Affiliate involved with the operation or use of the Project any act or
omission affording any Governmental Authority the right of forfeiture as against the Project or any
part thereof or any moneys paid in performance of the Borrower’s obligations under any Borrower
Loan Document or any Funding Loan Documents.
Section 4.1.12Contracts. All service, maintenance or repair contracts affecting
the Project have been entered into at arm’s length (except for such contracts between the Borrower
and its affiliates or the affiliates of the Borrower Controlling Entity of the Borrower) in the ordinary
course of the Borrower’s business and provide for the payment of fees in amounts and upon terms
comparable to existing market rates.
Section 4.1.13Financial Information. All financial data, including any
statements of cash flow and income and operating expense, that have been delivered to the
Governmental Lender or the Funding Lender in respect of the Project by or on behalf of the
Borrower, to the best knowledge of the Borrower, (i)are accurate and complete in all material
respects, as of their respective dates, (ii)accurately represent the financial condition of the Project as
of the date of such reports, and (iii)to the extent prepared by an independent certified public
accounting firm, have been prepared in accordance with GAAP consistently applied throughout the
periods covered, except as disclosed therein. Other than pursuant to or permitted by the Borrower
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Loan Documents or the Funding Loan Documentsor the Borrower organizational documents, the
Borrower has no contingent liabilities, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments. Since the date of such financial statements,
there has been no materially adverse change in the financial condition, operations or business of the
Borrower from that set forth in said financial statements.
Section 4.1.14Condemnation. No Condemnation or other proceeding has been
commenced or, to the Borrower’s knowledge, is contemplated, threatened or pending with respect to
all or part of the Project or for the relocation of roadways providing access to the Project.
Section 4.1.15Federal Reserve Regulations. No part of the proceeds of the
Borrower Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other
purpose that would be inconsistent with such Regulation U or any other regulation of such Board of
Governors,or for any purpose prohibited by Legal Requirements or any Borrower Loan Document or
Funding Loan Document.
Section 4.1.16Utilities and Public Access. To the best of the Borrower’s
knowledge, the Project is or will be served by water, sewer, sanitary sewer and storm drain facilities
adequate to service it for its intended uses. All public utilities necessary or convenient to the full use
and enjoyment of the Project are or will be located in the public right-of-way abutting the Project,
and all such utilities are or will be connected so as to serve the Project without passing over other
property absent a valid easement. All roads necessary for the use of the Project for its current
purpose have been or will be completed and dedicated to public use and accepted by all
Governmental Authorities. Except for Permitted Encumbrances, the Project does not share ingress
and egress through an easement or private road or share on-site or off-site recreational facilities and
amenities that are not located on the Project and underthe exclusive control of the Borrower, or
where there is shared ingress and egress or amenities, there exists an easement or joint use and
maintenance agreement under which (i)access to and use and enjoyment of the easement or private
road and/or recreational facilities and amenities is perpetual, (ii)the number of parties sharing such
easement and/or recreational facilities and amenities must be specified, (iii)the Borrower’s
responsibilities and share of expenses are specified, and (iv)the failure topay any maintenance fee
with respect to an easement will not result in a loss of usage of the easement.
Section 4.1.17Not a Foreign Person. The Borrower is not a “foreign person”
within the meaning of §1445(f)(3) of the Code.
Section 4.1.18Separate Lots. Each parcel comprising theLand is a separate tax
lot and is not a portion of any other tax lot that is not a part of the Land.
Section 4.1.19Assessments. Except as disclosed in the Title Insurance Policy,
there are no pending or, to the Borrower’s best knowledge, proposed special or other assessments for
public improvements or otherwise affecting the Project, or any contemplated improvements to the
Project that may result in such special or other assessments.
Section 4.1.20Enforceability. The Borrower Loan Documents and the Funding
Loan Documents are not subject to, and the Borrower has not asserted, any right of rescission, set-
off, counterclaim or defense, including the defense of usury.
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Section 4.1.21Insurance. The Borrower has obtained the insurance required by
this Borrower Loan Agreement, if applicable, and the Security Instrument and has delivered to the
Servicer copies of insurance policies or certificates of insurance reflecting the insurance coverages,
amounts and other requirements set forth in this Borrower Loan Agreement, if applicable, and the
Security Instrument.
Section 4.1.22Use of Property; Licenses. The Project will be used exclusively as
a multifamily rental housing project and other appurtenant and related uses, which use is consistent
with the zoning classification for the Project. All certifications, permits, licenses and approvals,
including certificates of completion and occupancy permits required for the legal use or legal,
nonconforming use, as applicable, occupancy and operation of the Project (collectively, the
“Licenses”) required at this time for the construction or rehabilitation, as appropriate, and equipping
of the Project have been obtained. To the Borrower’s knowledge, all Licenses obtained by the
Borrower have been validly issued and are in full force and effect. The Borrower has no reason to
believe that any of the Licenses required for the future use and occupancy of the Project and not
heretofore obtained by the Borrower will not be obtained by the Borrower in the ordinary course
following the Completion Date. No Licenses will terminate, or become void or voidable or
terminable, upon any sale, transfer or other disposition of the Project, including any transfer pursuant
to foreclosure sale under the Security Instrument or deed in lieu of foreclosure thereunder. The
Project does not violate any density or building setback requirements of the applicable zoning law
except to the extent, if any, shown on the survey. No proceedings are, to the best of the Borrower’s
knowledge, pending or threatened that would result in a change of the zoning of the Project.
Section 4.1.23Flood Zone. As of the Closing Date, no structure within the
Mortgaged Property lies or is located in an identifiable or designated Special Flood Hazard Area.
Subsequent to the Closing Date, if the Mortgaged Property is determined to be in a Special Flood
Hazard Area, Borrower will obtain appropriate flood insurance as required under the National Flood
Insurance Act of 1968, Flood Disaster Protection Act of 1973, or the National Flood Insurance
Reform Act of 1994 as amended or as required by the Servicer pursuant to its underwriting
guidelines.
Section 4.1.24Physical Condition. The Project, including all Improvements,
parking facilities, systems, fixtures, Equipment and landscaping, are or, after completion of the
construction, rehabilitation and/or repairs, as appropriate, will be in good and habitable condition in
all material respects and in good order and repair in all material respects (reasonable wear and tear
excepted). The Borrower has not received notice from any insurance company or bonding company
of any defect or inadequacy in the Project, or any part thereof, which would adversely affect its
insurability or cause the imposition of extraordinary premiums or charges thereon or any termination
of any policy of insurance or bond. The physical configuration of the Project is not in material
violation of the ADA, if required under applicable law.
Section 4.1.25Encroachments. All of the Improvements included in determining
the appraised value of the Project will lie wholly within the boundaries and building restriction lines
of the Project, and no improvement on an adjoining property encroaches upon the Project, and no
easement or other encumbrance upon the Project encroaches upon any of the Improvements, so as to
affect the value or marketability of the Project, except those insured against by the Title Insurance
Policy or disclosed in the survey of the Project as approved by the Servicer.
29
Section 4.1.26State Law Requirements. The Borrower hereby represents,
covenants and agrees to comply with the provisions of all applicable state laws relating to the
Borrower Loan, the Funding Loan and the Project.
Section 4.1.27Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Person
under applicable Legal Requirements in connection with the transfer of the Project to the Borrower
have been paid. All mortgage, mortgage recording, stamp, intangible or other similar taxes required
to be paid by any Person under applicable Legal Requirements in connection withthe execution,
delivery, recordation, filing, registration, perfection or enforcement of any of the Borrower Loan
Documents and the Funding Loan Documents have been or will be paid.
Section 4.1.28Investment Company Act. The Borrower is not (i)an “investment
company” or a company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended; or (ii)a “holding company” or a “subsidiary
company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 4.1.29Fraudulent Transfer. The Borrower has not accepted the
Borrower Loan or entered into any Borrower Loan Document or Funding Loan Document with the
actual intent to hinder, delay or defraud any creditor, and the Borrower has received reasonably
equivalent value in exchange for its obligations under the Borrower Loan Documents and the
Funding Loan Documents. Giving effect to the transactions contemplated by the Borrower Loan
Documents and the Funding Loan Documents, the fair saleable value of the Borrower’s assets
exceeds and will, immediately following the execution and delivery of the Borrower Loan
Documents and the Funding Loan Documents, exceed the Borrower’s total liabilities, including
subordinated, unliquidated, disputed or contingent liabilities. The fair saleable value of the
Borrower’s assets is and will, immediately following the execution and delivery of the Borrower
Loan Documents and the Funding Loan Documents, be greater than the Borrower’s probable
liabilities, including the maximum amount of its contingent liabilities or its debts as such debts
become absolute and matured. The Borrower’s assets do not and, immediately following the
execution and delivery of the Borrower Loan Documents and the Funding Loan Documents will not,
constitute unreasonably small capital to carry out its business as conducted or as proposed to be
conducted. The Borrower does not intend to, and does not believe that it will, incur debts and
liabilities (including contingent liabilities and other commitments) beyond its ability to pay such
debts as they mature (taking into account the timing and amounts to be payable on or in respect of
obligations of the Borrower).
Section 4.1.30Ownership of the Borrower. Except as set forth in the Partnership
Agreement of the Borrower and the exhibits thereto, the Borrower has no obligation to any Person to
purchase, repurchase or issue any ownership interest in the Borrower.
Section 4.1.31Environmental Matters. To the best of Borrower’s knowledge,
the Project is not in violation of any Legal Requirement pertaining to or imposing liability or
standards of conduct concerning environmental regulation, contamination or cleanup, and will
comply with covenants and requirements relating to environmental hazards as set forth in the
Security Instrument. The Borrower will execute and deliver the Agreement of Environmental
Indemnification on the Closing Date.
30
Section 4.1.32Name; Principal Place of Business. Unless prior Written Notice is
given to the Funding Lender, the Borrower does not use and will not use any trade name, and has not
done and will not do business under any name other than its actual name set forth herein. The
principal place of business of the Borrower is its primary address for notices as set forth in
Section10.1 hereof, and the Borrower has no other place of business, other than the Project and such
principal place of business.
Section 4.1.33Subordinated Debt. There is no secured or unsecured
indebtedness with respect to the Project or any residual interest therein, other than Permitted
Encumbrances and the permitted secured indebtedness described in Section6.7 hereof, except an
unsecured deferred developer fee not to exceed the amount permitted by Funding Lender as
determined on the Closing Date.
Section 4.1.34Filing of Taxes. The Borrower has filed (or has obtained effective
extensions for filing) all federal, state and local tax returns required to be filed and has paid or made
adequate provision for the payment of all federal, state and local taxes, charges and assessments, if
any, payable by the Borrower.
Section 4.1.35General Tax. All representations, warranties and certifications of
the Borrower set forth in the Regulatory Agreement and the Tax Certificate are incorporated by
reference herein and the Borrower will comply with such as if set forth herein.
Section 4.1.36Approval of the Borrower Loan Documents and Funding Loan
Documents. By its execution and delivery of this Borrower Loan Agreement, the Borrower
approves the form and substance of the Borrower Loan Documents and the Funding Loan
Documents, and agrees to carry out the responsibilities and duties specified in the Borrower Loan
Documents and the Funding Loan Documents to be carried out by the Borrower. The Borrower
acknowledges that (a)it understands the nature and structure of the transactions relating to the
financing of the Project, (b)it is familiar with the provisions of all of the Borrower Loan Documents
and the Funding Loan Documents and other documents and instruments relating to the financing,
(c)it understands the risks inherent in such transactions, including without limitation the risk of loss
of the Project, and (d)it has not relied on the Governmental Lender, the Funding Lender, the Fiscal
Agent or the Servicer for any guidance or expertise in analyzing the financial or other consequences
of the transactions contemplated by the Borrower Loan Documents and the Funding Loan
Documents or otherwise relied on the Governmental Lender, the Funding Lender, the Fiscal Agent or
the Servicer in any manner.
Section 4.1.37Funding Loan Agreement. The Borrower has read and accepts
and agrees that it is bound by the Funding Loan Agreement and the Funding Loan Documents.
Section 4.1.38Americans with Disabilities Act. The Project, as designed, will
conform in all material respects with all applicable zoning, planning, building and environmental
laws, ordinances and regulations of governmental authorities having jurisdiction over the Project,
including, but not limited to, the Americans with Disabilities Act of 1990 (“ADA”), to the extent
required (as evidenced by an architect’s certificate to such effect).
Section 4.1.39Requirements of Act, Code and Regulations. The Project
satisfies all requirements of the Act, the Code and the Regulations applicable to the Project.
31
Section 4.1.40Regulatory Agreement. The Project is, as of the date of
origination of the Funding Loan, in compliance with all requirements of the Regulatory Agreement to
the extent such requirements are applicable; and the Borrower intends to cause the residential units in
the Project to be rented or available for rental on a basis which satisfies the requirements of the
Regulatory Agreement, including all applicable requirements of the Act and the Code and the
Regulations, and pursuant to leases which comply with all applicable laws.
Section 4.1.41Intention to Hold Project. The Borrower intends to hold the
Project for its own account and has no current plans, andexcept as set forth in the Partnership
Agreementhas not entered into any agreement, to sell the Project or any part of it; and the Borrower
intends tooccupy the Project or cause the Project to be occupied and to operate it or cause it to be
operated at all times during the term of this Borrower Loan Agreement in compliance with the terms
of this Borrower Loan Agreement and the Regulatory Agreement and does not know of any reason
why the Project will not be so used by it in the absence of circumstances not now anticipated by it or
totally beyond its control.
Section 4.1.42Concerning General Partner.
(a)The managing general partner of Borrower is the Managing General Partner,
a California limited liability company, and the co-general partner of Borrower is the Administrative
General Partner, a California limited liability company, and each of the Managing General Partner
and Administrative General Partner is duly organizedand validly existing under the laws of the State
of California. The General Partner has all requisite power and authority, rights and franchises to
enter into and perform its obligations under the Borrower Loan Documents and the Funding Loan
Documents tobe executed by it for its own account and on behalf of Borrower, as general partner of
Borrower, under this Borrower Loan Agreement and the other Borrower Loan Documents and the
Funding Loan Documents.
(b)The General Partner has made all filings (including, without limitation, all
required filings related to the use of fictitious business names) and is in good standing in the State
and in each other jurisdiction in which the character of the property it owns or the nature of the
business it transacts makes such filings necessary or where the failure to make such filings could
have a material adverse effect on the business, operations, assets, or financial condition of General
Partner.
(c)The General Partner is duly authorized to do business in the State.
(d)The execution, delivery and performance by Borrower of the Borrower Loan
Documents and the Funding Loan Documents have been duly authorized by all necessary action of
General Partner on behalf of Borrower, and by all necessary action on behalf of General Partner.
(e)The execution, delivery and performance by General Partner, on behalf of
Borrower, of the Borrower Loan Documents and the Funding Loan Documents will not violate
(i)General Partner’s organizational documents; (ii)any other Legal Requirement affecting General
Partner or any of its properties; or (iii)any agreement to which General Partner is bound or to which
it is a party; and will not result in or require the creation (except as provided in or contemplated by
this Borrower Loan Agreement) of any Lien upon any of such properties, any of the Collateral or any
of the property or funds pledged or delivered to Funding Lender pursuant to the Security Documents.
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Section 4.1.43Government and Private Approvals. All governmental or
regulatory orders, consents, permits, authorizations and approvals required for the construction,
rehabilitation, use, occupancy and operation of the Improvements, that may be granted or denied in
the discretion of any Governmental Authority, have been obtained and are in full force and effect (or,
in the case of any of the foregoing that Borrower is not required to have as of the Closing Date, will
be obtained), and will be maintained in full force and effect at all times during the construction or
rehabilitation of the Improvements. All such orders, consents, permits, authorizations and approvals
that may not be denied in the discretion of any Governmental Authority shall be obtained prior to the
commencement of any work for which such orders, consents, permits, authorizations or approvals are
required, and, once obtained, such orders, consents, permits, authorizations and approvals will be
maintained in full force and effect at all times during the construction or rehabilitation of the
Improvements. Except as set forth in the preceding two sentences, no additional governmental or
regulatory actions, filings or registrations with respect to the Improvements, and no approvals,
authorizations or consents of any trustee or holder of any indebtedness or obligation of Borrower, are
required for the due execution, delivery and performance by Borrower or General Partner of any of
the Borrower Loan Documents or the Funding Loan Documents or the Related Documents executed
by Borrower or General Partner, as applicable. All required zoning approvals have been obtained,
and the zoning of the Land for the Project is not conditional upon the happening of any further event.
Section 4.1.44Concerning Guarantor. The Borrower Loan Documents and the
Funding Loan Documents to which the Guarantor is a party or a signatory executed simultaneously
with this Borrower Loan Agreement have been duly executed and delivered by Guarantor and are
legally valid and binding obligations of Guarantor, enforceable against Guarantor in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general principles of equity.
Section 4.1.45No Material Defaults. Except as previously disclosed to Funding
Lender and the Governmental Lender in writing, there exists no material violation of or material
default by Borrower under, and, to the best knowledge of Borrower, no event has occurred which,
upon the giving of notice or the passage of time, or both, would constitute a material default with
respectto: (i)the terms of any instrument evidencing, securing or guaranteeing any indebtedness
secured by the Project or any portion or interest thereof or therein; (ii)any lease or other agreement
affecting the Project or to which Borrower is a party; (iii)any license, permit, statute, ordinance, law,
judgment, order, writ, injunction, decree, rule or regulation of any Governmental Authority, or any
determination or award of any arbitrator to which Borrower or the Project may be bound; or (iv)any
mortgage,instrument, agreement or document by which Borrower or any of its respective properties
is bound; in the case of any of the foregoing: (1)which involves any Borrower Loan Document or
Funding Loan Document; (2)which involves the Project and is not adequately covered by insurance;
(3)that might materially and adversely affect the ability of Borrower, General Partner or Guarantor
or to perform any of its respective obligations under any of the Borrower Loan Documents or the
Funding Loan Documents or any other material instrument, agreement or document to which it is a
party; or (4)which might adversely affect the priority of the Liens created by this Borrower Loan
Agreement or any of the Borrower Loan Documents or the Funding Loan Documents.
Section 4.1.46Payment of Taxes. Except as previously disclosed to Funding
Lender in writing: (i)all tax returns and reports of Borrower, General Partner and Guarantor
required to be filed have been timely filed, and all taxes, assessments, fees and other governmental
charges uponBorrower, General Partner and Guarantor, and upon their respective properties, assets,
income and franchises, which are due and payable have been paid when due and payable; and
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(ii)Borrower knows of no proposed tax assessment against it or against General Partner or Guarantor
that would be material to the condition (financial or otherwise) of Borrower, General Partner or
Guarantor, and neither Borrower nor General Partner have contracted with any Governmental
Authority in connection with such taxes.
Section 4.1.47Rights to Project Agreements and Licenses. Borrower is the
legal and beneficial owner of all rights in and to the Plans and Specifications and all existing Project
Agreements and Licenses, and will be the legal and beneficial owner of all rights in and to all future
Project Agreements and Licenses. Borrower’s interest in the Plans and Specifications and all Project
Agreements and Licenses is not subject to any present claim (other than under the Borrower Loan
Documents and the Funding Loan Documents or as otherwise approved by Funding Lender in its sole
discretion), set-off or deduction other than in the ordinary course of business.
Section 4.1.48Patriot Act Compliance. Borrower is not now, nor has ever been
(i)listed on any Government Lists (as defined below), (ii)a person who has been determined by a
Governmental Authority to be subject to the prohibitions contained in Presidential Executive Order
No.13224 (September23, 2001) or any other similar prohibitions contained in the rules and
regulations of OFAC or in anyenabling legislation or other Presidential Executive Orders in respect
thereof, (iii)indicted for or convicted of any felony involving a crime or crimes of moral turpitude or
for any Patriot Act Offense, or (iv)under investigation by any Governmental Authority for alleged
criminal activity. For purposes hereof, the term “Patriot Act Offense” shall mean any violation of the
criminal laws of the United States of America or of any of the several states, or that would be a
criminal violation if committed within the jurisdiction of the United States of America or any of the
several states, relating to terrorism or the laundering of monetary instruments, including any offense
under (A)the criminal laws against terrorism; (B)the criminal laws against money laundering,
(C)Bank Representative Secrecy Act, as amended, (D)the Money Laundering Control Act of 1986,
as amended, or (E)the Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to
commit, or aiding and abetting another to commit, a Patriot Act Offense. For purposes hereof, the
term “Government Lists” shall mean (1)the Specially Designated Nationals and Blocked Persons
Lists maintained by the Office of Foreign Assets Control (“OFAC”), (2)any other list of terrorists,
terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and
Regulations of OFAC that Funding Lender notified Borrower in writing is now included in
“Government Lists”, or (3)any similar lists maintained by the United States Department of State, the
United States Department of Commerce or any other Governmental Authority or pursuant to any
Executive Order of the President of the United States of America that Funding Lender notified
Borrower in writing is now included in “Government Lists”.
Section 4.1.49Rent Schedule. Borrower has prepared a prospective Unit
absorption and rent collection schedule with respect to the Project substantially in the form attached
as an exhibit to the Construction Funding Agreement, which schedule takes into account, among
other relevant factors (i)a schedule of minimum monthly rentals for the Units, and (ii)any and all
concessions including free rent periods, and on the basis of such schedule, Borrower believes it will
collect rents with respect to the Project in amounts greater than or equal to debt service on the
Borrower Loan.
Section 4.1.50Other Documents. Each of the representations and warranties of
Borrower or General Partner contained in any of the other Borrower Loan Documents or the Funding
Loan Documents or Related Documentsis true and correct in all material respects (or, in the case of
representations or warranties contained in any of the other Borrower Loan Documents or Funding
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Loan Documents or Related Documents that speak as of a particular date, were true and correct in all
material respects as of such date). All of such representations and warranties are incorporated herein
for the benefit of Funding Lender.
Section 4.1.51Subordinate Loan Documents. The Subordinate Loan Documents
are in full force and effect and the Borrower has paid all commitment fees and other amounts due and
payable to the Subordinate Lender(s) thereunder. There exists no material violation of or material
default by the Borrower under, and no event has occurred which, upon the giving of notice or the
passage of time, or both, would constitute a material default under the Subordinate Loan Documents.
Section 4.1.52\[Reserved\].
Section 4.1.53Survival of Representations and Covenants. All of the
representations and warranties in Section4.1 hereof and elsewhere in the Borrower Loan Documents
(i)shall survive for so long as any portion of the Borrower Payment Obligations remains due and
owing and (ii)shall be deemed to have been relied upon by the Governmental Lender and the
Servicer notwithstanding any investigation heretofore or hereafter made by the Governmental Lender
or the Servicer or on its or their behalf, provided, however, that the representations, warranties and
covenants set forth in Section4.1.31 hereof shall survive in perpetuity and shall not be subject to the
exculpation provisions of Section11.1 hereof.
ARTICLE V
AFFIRMATIVE COVENANTS
During the term of this Borrower Loan Agreement, the Borrower hereby covenants and
agrees with the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer that:
Section 5.1Existence. The Borrower shall (i)do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its existence and its material rights, and
franchises, (ii)continue to engage in the business presently conducted by it, (iii)obtain and maintain
all material Licenses, and (iv)qualify to do business and remain in good standing under the laws of
the State.
Section 5.2Taxes and Other Charges. The Borrower shall pay all Taxes and Other
Charges as the same become due and payable and prior to their becoming delinquent in accordance
with the Security Instrument, except to the extent that the amount, validity or application thereof is
being contested in good faith as permitted by the Security Instrument.
The Borrower covenants to pay all taxes and Other Charges of any type or character charged
to the Funding Lender affecting the amount available to the Funding Lender from payments to be
received hereunder or in any way arising due to the transactions contemplated hereby (including
taxes and Other Charges assessed or levied by any public agency or governmental authority of
whatsoever character having power to levy taxes or assessments) but excluding franchise taxes based
upon the capital and/or income of the Funding Lender and taxes based upon or measured by the net
income of the Funding Lender; provided, however, that the Borrower shall have the right to protest
any such taxes or Other Charges and to require the Funding Lender, at the Borrower’s expense, to
protest and contest any such taxes or Other Charges levied upon them and that the Borrower shall
have the right to withhold payment of any such taxes or Other Charges pending disposition of any
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such protest or contest unless such withholding, protest or contest would adversely affect the rights
or interests of theFunding Lender. This obligation shall remain valid and in effect notwithstanding
repayment of the Borrower Loan hereunder or termination of this Borrower Loan Agreement.
Section 5.3Repairs; Maintenance and Compliance; Physical Condition. The
Borrower shall cause the Project to be maintained in a good, habitable and safe (so as to not threaten
the health or safety of the Project’s tenants or their invited guests) condition and repair (reasonable
wear and tear excepted) as set forth in the Security Instrument and shall not remove, demolish or
materially alter the Improvements or Equipment (except for removal of aging or obsolete equipment
or furnishings in the normal course of business), except as provided in the Security Instrument.
Section 5.4Litigation. The Borrower shall give prompt Written Notice to the
Governmental Lender, the Funding Lender and the Servicer of any litigation, governmental
proceedings or claims or investigations regarding an alleged actual violation of a Legal Requirement
pending or, to the Borrower’s knowledge, threatened against the Borrower which might materially
adversely affect the Borrower’s condition (financial or otherwise) or business or the Project.
Section 5.5Performance of Other Agreements. The Borrower shall observe and
perform in all material respects each and every term to be observed or performed by it pursuant to the
terms of any agreement or instrument affecting or pertaining to the Project.
Section 5.6Notices. The Borrower shall promptly advise the Governmental Lender, the
Funding Lender and the Servicer of (i)any Material Adverse Change in the Borrower’s financial
condition, assets, properties or operations other than general changes in the real estate market,
(ii)any fact or circumstance affecting the Borrower or the Project that materially and adversely
affects the Borrower’s ability to meet its obligations hereunder or under any of the other Borrower
Loan Document to which it is a party in a timely manner, or (iii)the occurrence of any Potential
Default or Event of Default of which the Borrower has knowledge. If the Borrower becomes subject
to federal or state securities law filing requirements, the Borrower shall cause to be delivered to the
Governmental Lender, the Funding Lender and the Servicer any Securities and Exchange
Commission or other public filings, if any, of the Borrower within two (2)Business Days of such
filing.
Section 5.7Cooperate in Legal Proceedings. The Borrower shall cooperate fully with
the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer with respect to, and
permitthe Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer at their
option, to participate in, any proceedings before any Governmental Authority that may in any way
affect the rights of the Governmental Lender, the Funding Lender, the Fiscal Agent and/or the
Servicer under any Borrower Loan Document or Funding Loan Document.
Section 5.8Further Assurances. The Borrower shall, at the Borrower’s sole cost and
expense (except as provided in Section9.1 hereof), (i)furnish to the Servicer and the Funding Lender
all instruments, documents, boundary surveys, footing or foundation surveys (to the extent that
Borrower’s construction or renovation of the Project alters any existing building foundations or
footprints), certificates, plans and specifications, appraisals, title and other insurance reports and
agreements relating to the Project, reasonably requested by the Servicer or the Funding Lender for
the better and more efficient carrying out of the intents and purposes of the Borrower Loan
Documents andthe Funding Loan Documents; (ii)execute and deliver to the Servicer and the
Funding Lender such documents, instruments, certificates, assignments and other writings, and do
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such other acts necessary or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the Borrower Loan, as the Servicer, the Fiscal Agent (at the direction
of the Funding Lender) and the Funding Lender may reasonably require from time to time; (iii)do
and execute all and such further lawful and reasonable acts, conveyances and assurances for the
better and more effective carrying out of the intents and purposes of the Borrower Loan Documents
and the Funding Loan Documents, as the Servicer, the Fiscal Agent (at the direction of the Funding
Lender) or the Funding Lender shall reasonably require from time to time; provided, however, with
respect to clauses (i)-(iii) above, the Borrower shall not be required to do anything that has the effect
of (A)changing the essential economic terms of the Borrower Loan or (B)imposing upon the
Borrower greater personal liability under the Borrower Loan Documents and the Funding Loan
Documents; and (iv)upon the Servicer’s, the Fiscal Agent’s (at the direction of the Funding Lender)
or the Funding Lender’s request therefor given from time to time after the occurrence of any
Potential Default or Event of Default for so long as such Potential Default or Event of Default, as
applicable, is continuing pay for (a)reports of UCC, federal tax lien, state tax lien, judgment and
pending litigation searches with respect to the Borrower and (b)searches of title to the Project, each
such search to be conducted by search firms reasonably designated by the Servicer, the Fiscal Agent
(at the direction of the Funding Lender) or the Funding Lender in each of the locations reasonably
designated by the Servicer, the Fiscal Agent or the Funding Lender.
Section 5.9Delivery of Financial Information. After notice to the Borrower of a
Secondary Market Disclosure Document, the Borrower shall, concurrently with any delivery to the
Funding Lender or the Servicer, deliver copies of all financial information required under ArticleIX.
Section 5.10Environmental Matters. So long as the Borrower owns or is in possession
of the Project, the Borrower shall (a)keep the Project in compliance with all Hazardous Materials
Laws (as defined in the Security Instrument), (b)promptly notify the Funding Lender and the
Servicer if the Borrower shall become aware that any Hazardous Materials (as defined in the Security
Instrument) are on or near the Project in violation of Hazardous Materials Laws, and (c)commence
and thereafter diligently prosecute to completion all remedial work necessary with respect to the
Project required under any Hazardous Material Laws, in each case as set forth in the Security
Instrument or the Agreement of Environmental Indemnification.
Section 5.11Governmental Lender’s and Funding Lender’s Fees. The Borrower
covenants to pay the reasonable fees and expenses of the Governmental Lender (including the
Ongoing Governmental Lender Fee), the Fiscal Agent and the Funding Lender or any agents,
attorneys, accountants, consultants selected by the Governmental Lender, the Fiscal Agent or the
Funding Lender to act on its behalf in connection with this Borrower Loan Agreement and the other
Borrower Loan Documents, the Regulatory Agreement and the Funding Loan Documents, including,
without limitation, any and all reasonable expenses incurred in connection with the making of the
Borrower Loan or in connection with any litigation which may at any time be instituted involving the
Borrower Loan, this Borrower Loan Agreement, the other Borrower Loan Documents, the
Regulatory Agreement and the Funding Loan Documents or any of the other documents
contemplated thereby, or in connection with the reasonable supervision or inspection of the
Borrower, its properties, assets or operations or otherwise in connection with the administration of
the foregoing. This obligation shall remain valid and in effect notwithstanding repayment of the
Borrower Loan hereunder or termination of this Borrower Loan Agreement.
Section 5.12Estoppel Statement. The Borrower shall furnish to the Funding Lender, the
Fiscal Agent or the Servicer for the benefit of the Funding Lender or the Servicer within ten
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(10)days after request by the Funding Lender and the Servicer, with a statement, duly acknowledged
and certified, setting forth (i)the unpaid principal of the Borrower Notes, (ii)the applicable Interest
Rate, (iii)the date installments of interest and/or principalwere last paid, (iv)any offsets or defenses
to the payment of the Borrower Payment Obligations, and (v)that the Borrower Loan Documents
and the Funding Loan Documents to which the Borrower is a party are valid, legal and binding
obligations of the Borrower and have not been modified or, if modified, giving particulars of such
modification, and no Event of Default exists thereunder or specify any Event of Default that does
exist thereunder. The Borrower shall use commercially reasonable efforts to furnish to the Funding
Lender or the Servicer, within 30days of a request by the Funding Lender or Servicer, tenant
estoppel certificates from each commercial tenant at the Project in form and substance reasonably
satisfactory to the Funding Lender and the Servicer; provided that the Funding Lender and the
Servicer shall not make such requests more frequently than twice in any year.
Section 5.13Defense of Actions. The Borrower shall appear in and defend any action or
proceeding purporting to affect the security for this Borrower Loan Agreement hereunder or under
the Borrower Loan Documents and the Funding Loan Documents, and shall pay, in the manner
required by Section2.4 hereof, all costs and expenses, including the cost of evidence of title and
attorneys’ fees, in any such action or proceeding in which Funding Lender may appear. If the
Borrower fails to perform any of the covenants or agreements contained in this Borrower Loan
Agreement or any other Borrower Loan Document, or if any action or proceeding is commenced that
is not diligently defended by the Borrower which affects the Funding Lender’s interest in the Project
or any part thereof, including eminent domain, code enforcement or proceedings of any nature
whatsoever under any Federal or state law, whether now existing or hereafter enacted or amended,
then the Funding Lender may make such appearances, disburse such sums and take such action as the
Funding Lender deems necessary or appropriate to protect its interests. Such actions include
disbursement of attorneys’ fees, entry upon the Project to make repairs or take other action to protect
the security of the Project, and payment, purchase, contest or compromise of any encumbrance,
charge or lien which in the judgment of Funding Lender appears to be prior or superior to the
Borrower Loan Documents or the Funding Loan Documents. The Funding Lender shall have no
obligation to do any of the above. The Funding Lender may take any such action without notice to or
demand upon the Borrower. No such action shall release the Borrower from any obligation under
this Borrower Loan Agreement or any of the other Borrower Loan Documents or Funding Loan
Documents. In the event (i)that the Security Instrument is foreclosed in whole or in part or that any
Borrower Loan Document isput into the hands of an attorney for collection, suit, action or
foreclosure, or (ii)of the foreclosure of any mortgage, deed of trust or deed to secure debt prior to or
subsequent to the Security Instrument or any Borrower Loan Document in which proceeding the
Funding Lender is made a party or (iii)of the bankruptcy of the Borrower or an assignment by the
Borrower for the benefit of its creditors, the Borrower shall be chargeable with and agrees to pay all
costs of collection and defense, including actual attorneys’ fees in connection therewith and in
connection with any appellate proceeding or post-judgment action involved therein, which shall be
due and payable together with all required service or use taxes.
Section 5.14Expenses. The Borrower shall pay all reasonable expenses incurred by the
Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer (except as provided in
Section9.1 hereof) in connection with the Borrower Loan and the Funding Loan, including
reasonable fees and expenses of the Governmental Lender’s, the Fiscal Agent’s, the Funding
Lender’s and the Servicer’s attorneys, environmental, engineering and other consultants, and fees,
charges or taxes for the recording or filing of the Borrower Loan Documents and the Funding Loan
Documents. The Borrower shall pay or cause to be paid all reasonable expenses of the Governmental
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Lender, the Funding Lender, the Fiscal Agent and the Servicer (except as provided in Section9.1
hereof) in connection with the issuance or administration of the Borrower Loan and the Funding
Loan, including audit costs, inspection fees, settlement of condemnation and casualty awards, and
premiums for title insurance and endorsements thereto. The Borrower shall, upon request, promptly
reimburse the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer for all
reasonable amounts expended, advanced or incurred by the Governmental Lender, the Funding
Lender, the Fiscal Agent and the Servicer to collect the Borrower Notes, or to enforce the rights of
the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer under this
Borrower Loan Agreement or any other Borrower Loan Document, or to defend or assert the rights
and claims of the Governmental Lender, the Funding Lender, the FiscalAgent and the Servicer under
the Borrower Loan Documents and the Funding Loan Documents arising out of an Event of Default
or with respect to the Project (by litigation or other proceedings) arising out of an Event of Default,
which amounts will include all court costs, attorneys’ fees and expenses, fees of auditors and
accountants, and investigation expenses as may be reasonably incurred by the Governmental Lender,
the Funding Lender, the Fiscal Agent and the Servicer in connection with any such matters (whether
or not litigation is instituted), together with interest at the Default Rate on each such amount from the
Date of Disbursement until the date of reimbursement to the Governmental Lender, the Funding
Lender, the Fiscal Agent and the Servicer, all ofwhich shall constitute part of the Borrower Loan and
the Funding Loan and shall be secured by the Borrower Loan Documents and the Funding Loan
Documents. The obligations and liabilities of the Borrower under this Section5.14 shall survive the
Term of this Borrower Loan Agreement and the exercise by the Governmental Lender, the Funding
Lender, the Fiscal Agent or the Servicer, as the case may be, of any of its rights or remedies under
the Borrower Loan Documents and the Funding Loan Documents, including the acquisition of the
Project by foreclosure or a conveyance in lieu of foreclosure. Notwithstanding the foregoing, the
Borrower shall not be obligated to pay amounts incurred as a result of the gross negligence or willful
misconduct of any other party, and any obligations of the Borrower to pay for environmental
inspections or audits will be governed by Section18(i) and 43(i) of the Security Instrument.
Section 5.15Indemnity. In addition to its other obligations hereunder, and in addition to
any and all rights of reimbursement, indemnification, subrogation and other rights of Governmental
Lender, the Fiscal Agent or Funding Lender pursuant hereto, pursuant to the Regulatory Agreement
and under law or equity, to the fullest extent permitted by law, the Borrower agrees to indemnify,
hold harmless and defend the Governmental Lender, the Funding Lender, the Fiscal Agent, the
Servicer, the Beneficiary Parties, Citigroup, Inc., and each of their respective commissioners,
officers, directors, employees, attorneys and agents(each an “Indemnified Party”), against any and
all losses, damages, claims, actions, liabilities, reasonable costs and expenses of any nature, kind or
character (including, without limitation, reasonable attorneys’ fees, litigation and court costs,
amounts paid in settlement (to the extent that the Borrower has consented to such settlement) and
amounts paid to discharge judgments) (hereinafter, the “Liabilities”) to which the Indemnified
Parties, or any of them, may become subject under federal or state securities laws or any other
statutory law or at common law or otherwise, to the extent arising out of or based upon or in any way
relating to:
(a)The Borrower Loan Documents and the Funding Loan Documents or the
execution or amendment thereof or in connection with transactions contemplated thereby, including
the sale, transfer or resale of the Borrower Loan or the Funding Loan, except with respect to any
Secondary Market Disclosure Document (other than any Borrower’s obligations under ArticleIX);
39
(b)Any actor omission of the Borrower or any of its agents, contractors,
servants, employees or licensees in connection with the Borrower Loan, the Funding Loan or the
Project, the operation of the Project, or the condition, environmental or otherwise, occupancy, use,
possession, conduct or management of work done in or about, or from the planning, design,
acquisition, construction, installation or rehabilitation of, the Project or any part thereof;
(c)Any lien (other than a Permitted Lien) or charge upon payments by the
Borrower to the Governmental Lender, the Fiscal Agent or the Funding Lender hereunder, or any
taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions
and Other Charges imposed on the Governmental Lender, theFiscal Agent or the Funding Lender in
respect of any portion of the Project;
(d)Any violation of any environmental law, rule or regulation with respect to, or
the release of any toxic substance from, the Project or any part thereof during the period in whichthe
Borrower is in possession or control of the Project;
(e)The enforcement of, or any action taken by the Governmental Lender, the
Fiscal Agent or the Funding Lender related to remedies under, this Borrower Loan Agreement and
the other Borrower Loan Documents and the Funding Loan Documents;
(f)Any untrue statement or misleading statement or alleged untrue statement or
alleged misleading statement of a material fact by the Borrower made in the course of Borrower
applying for the Borrower Loan or the Funding Loanor contained in any of the Borrower Loan
Documents or Funding Loan Documents to which the Borrower is a party;
(g)Any Determination of Taxability;
(h)Any breach (or alleged breach) by Borrower of any representation, warranty
or covenant made in or pursuant to this Borrower Loan Agreement or in connection with any written
or oral representation, presentation, report, appraisal or other information given or delivered by
Borrower, General Partner, Guarantor or their Affiliates to Governmental Lender, the Fiscal Agent
the Funding Lender, Servicer or any other Person in connection with the Borrower’s application for
the Borrower Loan and the Funding Loan (including, without limitation, any breach or alleged
breach by Borrower of any agreement with respect to the provision of any substitute credit
enhancement);
(i)any failure (or alleged failure) by Borrower, the Funding Lender or
Governmental Lender to comply with applicable federal and state laws and regulations pertaining to
the making of the Borrower Loan and the Funding Loan;
(j)the Project, or the condition, occupancy, use, possession, conduct or
management of, or work done in or about, or from the planning, design, acquisition, installation,
construction or rehabilitation of, the Project or any part thereof; or
(k)the use of the proceeds of the Borrower Loan and the Funding Loan,
except in the case of the foregoing indemnification of the Governmental Lender or any related
Indemnified Party, to the extent such damages are caused by the willful misconduct of such
Indemnified Party, and except in the case of the foregoing indemnification of the Funding Lender or
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the Servicer or any related Indemnified Party, to the extent such damages are caused by the gross
negligence or willful misconduct of such Indemnified Party. Notwithstanding anything herein to the
contrary, the Borrower’s indemnification obligations to the parties specified in Section9.1.4 hereof
with respect to any securitization or Secondary Market Transaction described in Article IX hereof
shall be limited to the indemnity set forth in Section9.1.4 hereof. In the event that any action or
proceeding is brought against any Indemnified Party with respect to which indemnity may be sought
hereunder, the Borrower, upon written notice from the Indemnified Party (which notice shall be
timely given so as not to materially impair the Borrower’s right to defend), shall assume the
investigation and defense thereof, including the employment of counsel reasonably approved by the
Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to
litigate, compromise or settle the same in its sole discretion; provided that the Indemnified Party shall
have the right to review and approve or disapprove any such compromise or settlement, which
approval shall not be unreasonably withheld. Each Indemnified Party shall have the right to employ
separate counsel in any such action or proceeding and to participate in the investigation and defense
thereof. The Borrower shall pay the reasonable fees and expenses of such separate counsel;
provided, however, that such Indemnified Party may only employ separate counsel at the expense of
the Borrower if and only if in such Indemnified Party’s good faith judgment (based on the advice of
counsel) a conflict of interest exists or could arise by reason of common representation.
Notwithstanding any transfer of the Project to another owner in accordance with the
provisions of this Borrower Loan Agreement or the Regulatory Agreement, the Borrower shall
remain obligated to indemnify each Indemnified Party pursuant to this Section5.15 if such
subsequent owner fails to indemnify any party entitled to be indemnified hereunder, unless the
Governmental Lender and the Funding Lender have consented to such transfer and to the assignment
of the rights and obligations of the Borrower hereunder.
The rights of any persons to indemnity hereunder shall survive the final payment or
defeasance of the Borrower Loan and the Funding Loan and in the case of the Servicer, any
resignation or removal. The provisions of this Section5.15 shall survive the termination of this
Borrower Loan Agreement.
The foregoing provisions of this Section5.15 are not intended to and shall not negate,
modify, limit or change the provisions of Section9 of the Borrower Notes.
Section 5.16No Warranty of Condition or Suitability by the Governmental Lender or
Funding Lender. Neither the Governmental Lender nor the Funding Lender makes any warranty,
either express or implied, as to the condition of the Project or that it will be suitable for the
Borrower’s purposes or needs.
Section 5.17Right of Access to the Project. The Borrower agrees that the Governmental
Lender, the Funding Lender, the Servicer and the Construction Consultant, and their duly authorized
agents, attorneys, experts, engineers, accountants and representatives shall have the right, but no
obligation, at all reasonable times during business hours and upon reasonable notice, to enter onto the
Land (a)to examine, test and inspect the Project without material interference or prejudice to the
Borrower’s operations and (b)to perform such work in and about the Project made necessary by
reason of the Borrower’s default under any of the provisions of this Borrower Loan Agreement. The
Governmental Lender, the Funding Lender, the Servicer, and their duly authorized agents, attorneys,
accountants and representatives shall also be permitted, without any obligation to do so, at all
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reasonable times and upon reasonable notice during business hours, to examine the books and
records of the Borrower with respect to the Project.
Section 5.18Notice of Default. The Borrower will advise the Governmental Lender, the
Funding Lender, the Fiscal Agent and the Servicer promptly in writing of the occurrence of any
Potential Default or Event of Default hereunder, specifying the nature and period of existence of such
event and the actions being taken or proposed to be taken with respect thereto.
Section 5.19Covenant with Governmental Lender and Funding Lender. The
Borrower agrees that this Borrower Loan Agreement is executed and delivered in part to induce the
purchase by others of the Governmental Lender Notes and, accordingly, all covenants and
agreements of the Borrower contained in this Borrower Loan Agreement are hereby declared to be
for the benefit of the Governmental Lender, the Fiscal Agent, the Funding Lender and any lawful
owner, holder or pledgee of the Borrower Notes or the Governmental Lender Notes from time to
time.
Section 5.20Obligation of the Borrower to Construct or Rehabilitate the Project. The
Borrower shall proceed with reasonable dispatch to construct or rehabilitate, as appropriate, and
equip the Project. If the proceeds of the Borrower Loan, together with the Other Borrower Moneys,
available to be disbursed to the Borrower are not sufficient to pay the costs of suchconstruction or
rehabilitation, as appropriate, and equipping, the Borrower shall pay such additional costs from its
own funds. The Borrower shall not be entitled to any reimbursement from the Governmental Lender,
the Fiscal Agent, the Funding Lender or the Servicer in respect of any such costs or to any
diminution or abatement in the repayment of the Borrower Loan. The Governmental Lender, the
Fiscal Agent and the Funding Lender shall not be liable to the Borrower or any other person if for
any reason the Project is not completed or if the proceeds of the Borrower Loan are insufficient to
pay all costs of the Project. The Governmental Lender, the Fiscal Agent and the Funding Lender do
not make any representation or warranty, either express or implied, that moneys, if any, which will
be made available to the Borrower will be sufficient to complete the Project, and the Governmental
Lender, the Fiscal Agent and the Funding Lender shall not be liable to the Borrower or any other
person if for any reason the Project is not completed.
Section 5.21Maintenance of Insurance. Borrower will maintain the insurance required
by the Security Instrument.
Section 5.22Information; Statements and Reports. Borrower shall furnish or cause to
be furnished to FundingLender and, with respect to subsection (a) only, to GovernmentalLender:
(a)Notice of Default. As soon as possible, and in any event not later than five
(5)Business Days after the occurrence of any Event of Default or Potential Default, a statement of an
Authorized Representative of Borrower describing the details of such Event of Default or Potential
Default and any curative action Borrower proposes to take;
(b)Financial Statements; Rent Rolls. In the manner and to the extent required
under the Security Instrument, such financial statements, expenses statements, rent rolls, reports and
other financial documents and information as required by the Security Instrument and the other
Borrower Loan Documents and Funding Loan Documents, in the form and within the time periods
required therein;
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(c)General Partner. As soon as available and in any event within one hundred
twenty (120)days after the end of each fiscal year of General Partner, copies of the financial
statements of General Partner as of such date, prepared in substantially the form previously delivered
to the Governmental Lender and Funding Lender and in a manner consistent therewith, or in such
form (which may include a form prepared in accordance with GAAP) as Funding Lender may
reasonably request;
(d)Leasing Reports. Prior to the Conversion Date, on a monthly basis (and in
any event within fifteen (15)days after the end of each Calendar Month), a report of all efforts made
by Borrower, if any, to lease all or any portion of the Project during such Calendar Month and on a
cumulative basis since Project inception, which report shall be prepared and delivered by Borrower,
shall be in form and substance satisfactory to Funding Lender, and shall, if requested by Funding
Lender, be supported by copies of letters of intent, leases or occupancy agreements, as applicable;
(e)Audit Reports. Promptly upon receipt thereof, copies of all reports, if any,
submitted to Borrower by independent public accountants in connection with each annual, interim or
special audit of the financial statements of Borrower made by such accountants, including the
comment letter submitted by such accountants to management in connection with their annual audit;
(f)Notices; Certificates or Communications. Immediately upon giving or receipt
thereof, copies of any notices, certificates or other communications delivered at the Project or to
Borrower or General Partner naming Governmental Lender or Funding Lender as addressee or which
could reasonably be deemed to affect the structural integrity of the Project or the ability of Borrower
to perform its obligations under the Borrower Loan Documents and the Funding Loan Documents;
(g)Certification of Non-Foreign Status. Promptly upon request of Funding
Lender from time to time, a Certification of Non-Foreign Status, executed on or after the date of such
request by Funding Lender;
(h)Compliance Certificates. Together with each of the documents required
pursuant to Section5.22(b) hereof submitted by or on behalf of Borrower, a statement, in form and
substance satisfactory to Funding Lender and certified by an Authorized Borrower Representative, to
the effect that Borrower is in compliance with all covenants, terms and conditions applicable to
Borrower, under or pursuant to the Borrower Loan Documents and the Funding Loan Documents and
under or pursuant to any other Debt owing by Borrower to any Person, and disclosing any
noncompliance therewith, and any Event of Default or Potential Default, and describing the status of
Borrower’s actions to correct such noncompliance, Event of Default or Potential Default, as
applicable; and
(i)Other Items and Information. Such other information concerning the assets,
business, financial condition, operations, property and results of operations of Borrower, General
Partner, Guarantor or the Project, as Funding Lender or Governmental Lender reasonably requests
from time to time.
Borrower shall furnish to Governmental Lender, upon its written request, any of the items
described in the foregoing subsections (b) through and including (i) above.
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Section 5.23Additional Notices. Borrower will, promptly after becoming aware thereof,
give notice to Funding Lender and the Governmental Lender of:
(a)any Lien affecting the Project, or any part thereof, other than Liens expressly
permitted under this Borrower Loan Agreement;
(b)any Legal Action which is instituted by or against Borrower, General Partner
or Guarantor, or any Legal Action which is threatened against Borrower, General Partner or
Guarantor which, in any case, if adversely determined, could have a material adverse effect upon the
business, operations, properties, assets, management, ownership or financial condition of Borrower,
General Partner, Guarantor or the Project;
(c)any Legal Action which constitutes an Event of Default or a Potential Default
or a default under any other ContractualObligation to which Borrower, General Partner or Guarantor
is a party or by or to which Borrower, General Partner or Guarantor, or any of their respective
properties or assets, may be bound or subject, which default would have a material adverse effect on
the business, operations, assets (including the Project), or financial condition of Borrower, General
Partner or Guarantor, as applicable;
(d)any default, alleged default or potential default on the part of Borrower under
any of the CC&R’s (together with a copy of each notice of default, alleged default or potential
default received from any other party thereto);
(e)any notice of default, alleged default or potential default on the part of
Borrower received from any tenant or occupant of the Project under or relating to its lease or
occupancy agreement (together with a copy of any such notice), if, in the aggregate, notices from at
least fifteen percent (15%) of the tenants at the Project have been received by Borrower with respect
to, or alleging, the same default, alleged default or potential default;
(f)any change or contemplated change in (i)the location of Borrower’s or
General Partner’s executive headquarters or principal place of business; (ii)the legal, trade, or
fictitious business names used by Borrower or General Partner; or (iii)the nature of the trade or
business of Borrower; and
(g)any default, alleged default or potential default on the part of any general or
limited partner (including, without limitation, General Partner and the Equity Investor) under the
Partnership Agreement.
Section 5.24Compliance with Other Agreements; Legal Requirements.
(a)Borrower shall timely perform and comply with, and shall cause General
Partner to timely perform and comply with the covenants, agreements, obligations and restrictions
imposed on them under the Partnership Agreement, and Borrower shall not do or permit to be done
anything to impair any such party’s rights or interests under any of the foregoing.
(b)Borrower will comply and, to the extent it is able, will require others to
comply with, all Legal Requirements of all Governmental Authorities having jurisdiction over the
Project or construction and/or rehabilitation of the Improvements, and will furnish Funding Lender
with reports of any official searches for or notices of violation of any requirements established by
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such Governmental Authorities. Borrower will comply and, to the extent it is able, will require
others to comply, with applicable CC&R’s and all restrictive covenants and all obligations created by
private contracts and leases which affect ownership, construction, rehabilitation, equipping, fixturing,
use or operation of the Project, and all other agreements requiring a certain percentage of the Units to
be rented to persons of low or moderate income. The Improvements, when completed, shall comply
with all applicable building, zoning and other Legal Requirements, and will not violate any
restrictions of record against the Project or the terms of any other lease of all or any portion of the
Project. Funding Lender and Governmental Lender shall at all times have the right to audit, at
Borrower’s expense, Borrower’s compliance with any agreement requiring a certain percentage of
the Units to be rented to persons of low or moderate income, and Borrower shall supply all such
information with respect thereto as Funding Lender or Governmental Lender, as applicable, may
request and otherwise cooperate with Funding Lender or Governmental Lender, as applicable, in any
such audit. Without limiting the generality of the foregoing, Borrower shall properly obtain, comply
with and keep in effect (and promptly deliver copies to Funding Lender of) all permits, licenses and
approvals which are required to be obtained from Governmental Authorities in order to construct,
occupy, operate, market and lease the Project.
Section 5.25Completion and Maintenance of Project. Borrower shall cause the
construction or rehabilitation, as the case may be, of the Improvements, to be prosecuted with
diligence and continuity and completed substantially in accordance withthe Plans and Specifications,
and in accordance with the Construction Funding Agreement, free and clear of any liens or claims for
liens (but without prejudice to Borrower’s rights of contest under Section10.16 hereof)
(“Completion”) on or before the Completion Date. Borrower shall thereafter maintain the Project as
a residential apartment complex in good order and condition, ordinary wear and tear excepted. A
maintenance program shall be in place at all times to assure the continuation of first class
maintenance.
Section 5.26Fixtures. Borrower shall deliver to Funding Lender, on demand, any
contracts, bills of sale, statements, receipted vouchers or agreements under which Borrower or any
other Person claims title to any materials, fixtures or articles incorporatedinto the Improvements.
Section 5.27Income from Project. Borrower shall first apply all Gross Income to
Expenses of the Project, including all amounts then required to be paid under the Borrower Loan
Documents and the Funding Loan Documents and the funding of all sums necessary to meet the
Replacement Reserve Fund Requirement, before using or applying such Gross Income for any other
purpose. Prior to the Conversion Date, except for the Asset Management Fee, as defined in and
payable pursuant to the Partnership Agreement, or as otherwise permitted by the Borrower Loan
Documents or the Funding Loan Documents or the Subordinate Loan Documents,Borrower shall not
make or permit any distributions or other payments of Net Operating Income to its partners,
shareholdersor members, as applicable, in each case, without the prior Written Consent of Funding
Lender.
Section 5.28Leases and Occupancy Agreements.
(a)Lease Approval.
(i)Borrower may enter into leases of space within the Improvements
(and amendments to such leases) in the ordinary course of business with bona fide third party tenants
without Funding Lender’s prior Written Consent if:
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(A)The lease is a Permitted Lease;
(B)Borrower, acting in good faith following the exercise of due
diligence, has determined that the tenant meets requirements imposed under any applicable CC&R
and is financially capable of performing all of its obligations under the lease; and
(C)The lease conforms to the Rent Schedule attached as an
exhibit to the Construction Funding Agreement and reflects an arm’s-length transaction, subject to
the requirement that the Borrower comply with any applicable CC&R.
(ii)If any Event of Default has occurred and is continuing, Funding
Lender may make written demand on Borrower to submit all future leases for Funding Lender’s
approval prior to execution. Borrower shall comply with any such demand by Funding Lender.
(iii)No approval of any lease by Funding Lender shall be for any purpose
other than to protect Funding Lender’s security for the Borrower Loan and to preserve Funding
Lender’s rightsunder the Borrower Loan Documents and the Funding Loan Documents. No
approval by Funding Lender shall result in a waiver of any default of Borrower. In no event shall
any approval by Funding Lender of a lease be a representation of any kind with regard to the lease or
its enforceability, or the financial capacity of any tenant or guarantor.
(b)Landlord’s Obligations. Borrower shall perform all obligations required to be
performed by it as landlord under any lease affecting any part of the Project or any space within the
Improvements.
(c)Leasing and Marketing Agreements. Except as may be contemplated in the
Management Agreement with Borrower’s Manager, Borrower shall not without the approval of
Funding Lender enter into any leasing or marketing agreement andFunding Lender reserves the right
to approve the qualifications of any marketing or leasing agent.
Section 5.29Project Agreements and Licenses. To the extent not heretofore delivered to
Funding Lender, Borrower will furnish to Funding Lender, as soon as available, true and correct
copies of all Project Agreements and Licenses and the Plans and Specifications, together with
assignments thereof to Funding Lender and consents to such assignments where required by Funding
Lender, all in form and substance acceptable to Funding Lender. Neither Borrower nor General
Partner has assigned or granted, or will assign or grant, a security interest in any of the Project
Agreements and Licenses, other than to Funding Lender.
Section 5.30Payment of Debt Payments. In addition to its obligations under the
Borrower Notes, Borrower will (i)duly and punctually pay or cause to be paid all principal of and
interest on any Debt of Borrower as and when the same become due on or before the due date;
(ii)comply with and perform all conditions, terms and obligations of other instruments or agreements
evidencing or securing such Debt; (iii)promptly inform Funding Lender of any default, or
anticipated default, under any such note, agreement, instrument; and (iv)forward to Funding Lender
a copy of any notice of default or notice of any event that might result in default under any such note,
agreement, instrument, including Liens encumbering the Project, or any portion thereof, which have
been subordinated to the Security Instrument (regardless of whether or not permitted under this
Borrower Loan Agreement).
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Section 5.31ERISA. Borrower will comply, and will cause each of its ERISA Affiliates
to comply, in all respects with the provisions of ERISA.
Section 5.32Patriot Act Compliance. Borrower shall use its good faith and
commercially reasonable efforts to comply with the Patriot Act and all applicable requirements of
Governmental Authorities having jurisdiction over Borrower and/or the Project, including those
relating to money laundering and terrorism. Funding Lender shall have the right to audit Borrower’s
compliance with the Patriot Act and all applicable requirements of Governmental Authorities having
jurisdiction over Borrower and/or the Project, including those relating to money laundering and
terrorism. In the event that Borrower fails to comply with the Patriot Act or any such requirements of
Governmental Authorities, then Funding Lender may, at its option, cause Borrower to comply
therewith and any and all costs and expenses incurred by Funding Lender in connection therewith
shall be secured by the Security Instrument and shall be immediately due and payable.
Borrower covenants that it shall comply with all Legal Requirements and internal
requirements of Funding Lender relating to money laundering, anti-terrorism, trade embargos and
economic sanctions, now or hereafter in effect.Without limiting the foregoing, Borrower shall not
take any action, or permit any action to be taken, that would cause Borrower’s representations and
warranties in Section4.1.48 and this Section5.32 become untrue or inaccurate at any time during the
term of the Funding Loan.Upon any Beneficiary Party’s request from time to time during the term
of the Funding Loan, Borrower shall certify in writing to such Beneficiary Party that Borrower’s
representations, warranties and obligations under Section4.1.48 and this Section5.32 remain true
and correct and have not been breached, and in addition, upon request of any Beneficiary Party,
Borrower covenants to provide all information required to satisfy obligations under all Legal
Requirements and internal requirements of Funding Lender relating to money laundering, anti-
terrorism, trade embargos and economic sanctions, now or hereafter in effect, during the term of the
Funding Loan.Borrower shall immediately notify the Funding Lender in writing of (a)Borrower’s
actual knowledge that any of such representations, warranties or covenants are no longer true and
have been breached, (b)Borrower has a reasonable basis to believe that they may no longer be true
and have been breached or (c)Borrower becomes the subject of an investigation by Governmental
Authorities related to money laundering, anti-terrorism, trade embargos and economic
sanctions.Borrower shall also reimburse Funding Lender for any expense incurred by Funding
Lender in evaluating the effect of an investigation by Governmental Authorities on the Funding
Loan and Funding Lender’s interest in the collateral for the Funding Loan, in obtaining necessary
license from Governmental Authorities as maybe necessary for Funding Lender to enforce its rights
under the Funding Loan Documents, and in complying with all Legal Requirements and internal
requirements of Funding Lender relating to money laundering, anti-terrorism, trade embargos and
economic sanctions, now or hereafter in effect applicable to Funding Lender as a result of the
existence of such an event and for any penalties or fines imposed upon Funding Lender as a result
thereof.
Section 5.33Funds from Equity Investor. Borrower shall cause the Equity Investor to
fund all installments of the Equity Contributions in the amounts and at the times subject and
according to the terms of the Partnership Agreement.
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Section 5.34Tax Covenants. The Borrower further represents, warrants and covenants as
follows:
(a)General. The Borrower shall not take any action or omit to take any action
which, if taken or omitted, respectively, would adversely affect the exclusion of interest on the
Governmental Lender Notes from gross income (as defined in Section61 of the Code), for federal
income tax purposes and, if it should take or permit any such action, the Borrower will take all lawful
actions that it can take to rescind such action promptly upon having knowledge thereof and that the
Borrower will take such action or actions, including amendment of this Borrower Loan Agreement,
the Security Instrument and the Regulatory Agreement, as may be necessary, in the opinion of Tax
Counsel, to comply fully with all applicable rules, rulings, policies, procedures, regulations or other
official statements promulgated or proposed by the Department of the Treasury or the Internal
Revenue Service applicable to the Governmental Lender Notes, the Funding Loan or affecting the
Project. Capitalized terms used in this Section5.34 shall have the respective meanings assigned to
them in the Regulatory Agreement or, if not defined therein, in the Funding Loan Agreement. With
the intent not to limit the generality of the foregoing, the Borrower covenants and agrees that, prior to
the final maturity of the Governmental Lender Notes, unless it has received and filed with the
Governmental Lender and the Funding Lender a Tax Counsel No Adverse Effect Opinion, as such
term is defined in the Funding Loan Agreement (other than with respect to interest on any portion of
the Governmental Lender Notes for a period during which such portion of the Governmental Lender
Notes are held by a “substantial user” of any facility financed with the proceeds of the Governmental
Lender Notes or a “related person,” as such terms are used in Section147(a) of the Code), the
Borrower will comply with this Section5.34.
(b)Use of Proceeds. The use of the net proceeds of the Funding Loan at all times
will satisfy the following requirements:
(i)Limitation on Net Proceeds. At least 95% of the net proceeds of the
Funding Loan (within the meaning of the Code) actually expended by Borrower shall be used to pay
Qualified Project Costs that are costs of a “qualified residential rental project” (within the meaning of
Sections 142(a)(7) and 142(d) of the Code) and property that is “functionally related and
subordinate” thereto (within the meaning of Sections 1.103-8(a)(3) and 1.103-8(b)(4)(iii) of the
Regulations).
(ii)Limit on Costs of Funding. The proceeds of the Funding Loan will be
expended by Borrower for the purposes set forth in this Borrower Loan Agreement and in the
Funding Loan Agreement and no portion thereof in excess of two percent of the proceeds of the
Funding Loan, within the meaning of Section147(g) of the Code, will be expended to pay Costs of
Funding.
(iii)Prohibited Facilities. The Borrower shall not use or permit the use of
any proceeds of the Funding Loan or any income from the investment thereof to provide any
airplane, skybox, or other private luxury box, health club facility, any facility primarily used for
gambling, or any store the principal business of which is the sale of alcoholic beverages for
consumption off premises.
(iv)Limitation on Land. Less than 25 percent of the net proceeds of the
Funding Loan actually expended by Borrower will be used, directly or indirectly, for the acquisition
of land or an interest therein, nor will any portion of the net proceeds of the Funding Loan be used,
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directly or indirectly, for the acquisition of land or an interest therein to be used for farming
purposes.
(v)Limitation on Existing Facilities. No portion of the net proceeds of
the Funding Loan will be used by Borrower for the acquisition of any existing property or an interest
therein unless (A)the first use of such property is pursuant to such acquisition or (B)the
rehabilitation expenditures with respect to any building and the equipment therefor equal or exceed
15 percent of the cost of acquiring such building financed with the proceeds of the Funding Loan
(with respect to structures other than buildings, this clause shall be applied by substituting 100
percent for 15 percent). For purposes of the preceding sentence, the term “rehabilitation
expenditures” shall have the meaning set forth in Section147(d)(3) of the Code.
(vi)Accuracy of Information. The information furnished by the Borrower
and used by the Governmental Lender in preparing its certifications with respect to Section148 of
the Code and the Borrower’s information statement pursuant to Section149(e) of the Code is
accurate and complete as of the date of origination of the Funding Loan.
(vii)Limitation of Project Expenditures. The acquisition and construction
of the Project were not commenced (within the meaning of Section144(a) of the Code) prior to the
60th day preceding the adoption of the resolution of the Governmental Lender with respect to the
Project on December 11, 2017, and no obligation for which reimbursement will be sought from
proceeds of the Funding Loan relating to the acquisition or construction of the Project was paid or
incurred prior to 60days prior to such date, except for permissible “preliminary expenditures”, which
include architectural, engineering surveying, soil testing, reimbursement bond issuance and similar
costs incurred prior to the commencement of the acquisition andconstruction of the Project.
(viii)Qualified Costs. The Borrower hereby represents, covenants and
warrants that the proceeds of the Funding Loan shall be used or deemed used by Borrower
exclusively to pay Qualified Project Costs.
(c)Limitation on Maturity. The average maturity of the Governmental Lender
Notes does not exceed 120 percent of the average reasonably expected economic life of the Project to
be financed by the Funding Loan, weighted in proportion to the respective cost of each item
comprising the property the cost of which has been or will be financed, directly or indirectly, with the
net proceeds of the Funding Loan. For purposes of the preceding sentence, the reasonably expected
economic life of property shall be determined as of the later of (A)theClosing Date for the Funding
Loan or (B)the date on which such property is placed in service (or expected to be placed in service).
In addition, land shall not be taken into account in determining the reasonably expected economic
life of property.
(d)No Arbitrage. The Borrower shall not take any action or omit to take any
action with respect to the Gross Proceeds of the Funding Loan or of any amounts expected to be used
to pay the principal thereof or the interest thereon which, if taken or omitted, respectively, would
cause the Governmental Lender Notes to be classified as an “arbitrage bond” within the meaning of
Section148 of the Code. Except as provided in the Funding Loan Agreement and this Borrower
Loan Agreement, the Borrower shall not pledge or otherwise encumber, or permit the pledge or
encumbrance of, any money, investment, or investment property as security for payment of any
amounts due under this Borrower Loan Agreement or the Borrower Notes relating to the Funding
Loan, shall not establish any segregated reserve or similar fund for such purpose and shall not prepay
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any such amounts in advance of the redemption date of an equal principal amount of the Funding
Loan, unless the Borrower has obtained in each case a Tax Counsel No Adverse Effect Opinion with
respect to such action, a copy of which shall be provided to the Governmental Lender and the
Funding Lender. The Borrower shall not, at any time prior to the final maturity of the Funding Loan,
invest or cause any Gross Proceeds to be invested in any investment (or to use Gross Proceeds to
replace money so invested), if, as a result of such investment the Yield of all investments acquired
with Gross Proceeds (or with money replaced thereby) on or prior to the date of such investment
exceeds the Yield of the Funding Loan to the Maturity Date, except as permitted by Section148 of
the Code and Regulations thereunder or as provided in the Regulatory Agreement. The Borrower
further covenants and agrees that it will comply with all applicable requirements of said Section148
and the rules and Regulations thereunder relating to the Funding Loan and the interest thereon,
including the employment of a Rebate Analyst acceptable to the Governmental Lender and Funding
Lender for the calculation of rebatableamounts to the United States Treasury Department. The
Borrower agrees that it will cause the Rebate Analyst to calculate the rebatable amounts not later
than forty-fivedays after the fifth anniversary of the Closing Date and each five years thereafter, and
not later than forty-fivedays after the final Computation Date, and agrees that the Borrower will pay
all costs associated therewith. The Borrower agrees to provide evidence of the employment of the
Rebate Analyst satisfactory to the Governmental Lender and Funding Lender.
(e)No Federal Guarantee. Except to the extent permitted by Section149(b) of
the Code and the Regulations and rulings thereunder, the Borrower shall not take or omit to take any
action which would cause the Governmental Lender Notes to be “federally guaranteed” within the
meaning of Section149(b) of the Code and the Regulations and rulings thereunder.
(f)Representations. The Borrower has supplied or caused to be supplied to Tax
Counsel all documents, instruments and written information requested by Tax Counsel, and all such
documents, instruments and written information supplied by or on behalf of the Borrower at the
request of Tax Counsel, which have been reasonably relied upon by Tax Counsel in rendering its
opinion with respect to theexclusion from gross income of the interest on the Governmental Lender
Notes for federal income tax purposes, are true and correct in all material respects, do not contain any
untrue statement of a material fact and do not omit to state any material fact necessary to be stated
therein in order to make the information provided therein, in light of the circumstances under which
such information was provided, not misleading, and the Borrower is not aware of any other pertinent
information which Tax Counsel has not requested.
(g)Qualified Residential Rental Project. The Borrower hereby covenants and
agrees that the Project will be operated as a “qualified residential rental project” within the meaning
of Section142(d) of the Code, on a continuous basis during the longer of the Qualified Project Period
(as defined in the Regulatory Agreement) or any period during which any portion of the
Governmental Lender Notes remain outstanding, to the end that the interest on the Governmental
Lender Notes shall be excluded from gross income for federal income tax purposes. The Borrower
hereby covenants and agrees, continuously during the Qualified Project Period, to comply with all
the provisions of the Regulatory Agreement.
(h)Information Reporting Requirements. The Borrower will comply with the
information reporting requirements of Section149(e)(2) of the Code requiring certain information
regarding the Governmental Lender Notes to be filed with the Internal Revenue Service within
prescribed time limits.
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(i)Funding Loan Not a Hedge Bond. The Borrower covenants and agrees that
not more than 50% of the proceeds of the Funding Loan will be invested in Nonpurpose Investments
having a substantially guaranteed Yield for four years or more within the meaning of
Section149(f)(3)(A)(ii) of the Code, and the Borrower reasonably expects that at least 85% of the
spendable proceeds of the Funding Loan will be used to carry out the governmental purposes of the
Funding Loan within the three-year period beginning on the Closing Date.
(j)Termination of Restrictions. Although the parties hereto recognize that,
subject to the provisions of the Regulatory Agreement, the provisions of this Borrower Loan
Agreement shall terminate in accordance with Section10.14 hereof, the parties hereto recognize that
pursuant to the Regulatory Agreement, certain requirements, including the requirements incorporated
by reference in this Section, may continue in effect beyond the term hereof.
(k)Public Approval. The Borrower covenants and agrees that the proceeds of the
Funding Loan will not be used by Borrower in a manner that deviates in any substantial degree from
the Project described in the written notice of a public hearing regarding the Funding Loan.
(l)40/60 Test Election. The Borrower and the Governmental Lender hereby
elect to apply the requirements of Section142(d)(1)(B) to the Project. The Borrower hereby
represents, covenants and agrees, continuously during the Qualified Project Period, to comply with
all the provisions of the Regulatory Agreement.
(m)Modification of Tax Covenants. Subsequent to the origination of the Funding
Loan and prior to its payment in full (or provision for the payment thereof having been made in
accordance with the provisions of the Funding Loan Agreement), this Section5.34 hereof may not be
amended, changed, modified, altered or terminated except as permitted herein and by the Funding
Loan Agreement and with the Written Consent of the Governmental Lender and the Funding Lender.
Anything contained in this Borrower Loan Agreementor the Funding Loan Agreement to the
contrary notwithstanding, the Governmental Lender, the Funding Lender and the Borrower hereby
agree to amend this Borrower Loan Agreement and, if appropriate, the Funding Loan Agreement and
the Regulatory Agreement, tothe extent required, in the opinion of Tax Counsel, in order for interest
on the Governmental Lender Notes to remain excludable from gross income for federal income tax
purposes. The party requesting such amendment, which may include the Funding Lender, shall
notify the other parties to this Borrower Loan Agreement of the proposed amendment and send a
copy of such requested amendment to Tax Counsel. After review of such proposed amendment, Tax
Counsel shall render to the Funding Lender and the Governmental Lender an opinion as to the effect
of such proposed amendment upon the includability of interest on the Governmental Lender Notes in
the gross income of the recipient thereof for federal income tax purposes. The Borrower shall pay all
necessary fees and expenses incurred with respect to such amendment. The Borrower, the
Governmental Lender and, where applicable, the Funding Lender per written instructions from the
Governmental Lender shall execute, deliver and, if applicable, the Borrower shall file ofrecord, any
and all documents and instruments, including without limitation, an amendment to the Regulatory
Agreement, with a file-stamped copy to the Funding Lender, necessary to effectuate the intent of this
Section5.34, and the Borrower and the Governmental Lender hereby appoint the Funding Lender as
their true and lawful attorney-in-fact to execute, deliver and, if applicable, file of record on behalf of
the Borrower or the Governmental Lender, as is applicable, any such document or instrument (in
such form as may be approved by and upon instruction of Tax Counsel) if either the Borrower or the
Governmental Lender defaults in the performance of its obligation under this Section5.34; provided,
however, that the Funding Lender shall take no action underthis Section5.34 without first notifying
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the Borrower or the Governmental Lender, as is applicable, of its intention to take such action and
providing the Borrower or the Governmental Lender, as is applicable, a reasonable opportunity to
comply with the requirements of this Section5.34.
The Borrower irrevocably authorizes and directs the Funding Lender and any other agent
designated by the Governmental Lender to make payment of such amounts from funds of the
Borrower, if any, held by the Funding Lender, or any agent of the Governmental Lender or the
Funding Lender. The Borrower further covenants and agrees that, pursuant to the requirements of
Treasury Regulation Section1.148-1(b), it (or any related person contemplated by such regulations)
will not purchase interests in the Funding Loan or the Governmental Lender Notes in an amount
related to the amount of the Borrower Loan.
Section 5.35Payment of Rebate.
(a)Arbitrage Rebate. The Borrower agrees to take all steps necessary to
compute and pay any rebatable arbitrage relating to the Funding Loan or the Governmental Lender
Notes in accordance with Section148(f) of the Code including:
(i)Delivery of Documents and Money on Computation Dates. The
Borrower will deliver to the Fiscal Agent, with a copy to the Funding Lender, within 55days after
each Computation Date:
(A)with a copy to the Governmental Lender, a statement, signed
by the Borrower, stating the Rebate Amount as of such Computation Date;
(B)if such Computation Date is an Installment Computation Date,
an amount that, together with any amount then held for the credit of the Rebate Fund, is equal to at
least 90% of the Rebate Amount as of such Installment Computation Date, less any “previous rebate
payments” made to the United States (as that term is used in Section1.148-3(f)(1) of the
Regulations), or (2)if such Computation Date is the final Computation Date, an amount that,
together with any amount then held for the credit of the Rebate Fund, is equal to the Rebate Amount
as of such final Computation Date, less any “previous rebate payments” made to the United States (as
that term is used in Section1.148-3(f)(1) of the Regulations); and
(C)with a copy to the Governmental Lender, an Internal Revenue
Service Form 8038-T properly signed and completed as of such Computation Date.
(ii)Correction of Underpayments. If the Borrower shall discover or be
notified as of any date that any payment paid to the United States Treasury pursuant to this
Section5.35 of an amount described in Section5.35(a)(i)(A) or (B)above shall have failed tosatisfy
any requirement of Section1.148-3 of the Regulations (whether or not such failure shall be due to
any default by the Borrower, the Governmental Lender or the Funding Lender), the Borrower shall
(1)pay to the Fiscal Agent (for deposit to the Rebate Fund) and cause the Fiscal Agent to pay to the
United States Treasury from the Rebate Fund the underpayment of the Rebate Amount, together with
any penalty and/or interest due, as specified in Section1.148-3(h) of the Regulations, within
175days afterany discovery or notice and (2)deliver to the Fiscal Agent an Internal Revenue
Service Form8038-T completed as of such date. If such underpayment of the Rebate Amount,
together with any penalty and/or interest due, is not paid to the United States Treasury in the amount
and manner and by the time specified in the Regulations, the Borrower shall take such steps as are
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necessary to prevent the Governmental Lender Notes from becoming arbitrage bonds within the
meaning of Section148 of the Code.
(iii)Records. The Borrower shall retain all of its accounting records
relating to the funds established under this Borrower Loan Agreement and all calculations made in
preparing the statements described in this Section5.35 for at least six years after the later of the final
maturity of the Governmental Lender Notes or the date the Funding Loan is retired in full.
(iv)Costs. The Borrower agrees to pay all of the fees and expenses of a
nationally recognized Tax Counsel, the Rebate Analyst a certified public accountant and anyother
necessary consultant employed by the Borrower or the Funding Lender in connection with computing
the Rebate Amount.
(v)No Diversion of Rebatable Arbitrage. The Borrower will not
indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing
requirements to any person other than the federal government by entering into any investment
arrangement with respect to the Gross Proceeds of the Funding Loan which is not purchased at Fair
Market Value or includes terms that the Borrower would not have included if the Funding Loan were
not subject to Section148(f) of the Code.
(vi)Modification of Requirements. If at any time during the term of this
Borrower Loan Agreement, the Governmental Lender, the Funding Lender or the Borrower desires to
take any action which would otherwise be prohibited by the terms of this Section5.35, such Person
shall be permitted to take such action if it shall first obtain and provide to the other Persons named
herein a Tax Counsel No Adverse Effect Opinion (as defined in the Funding Loan Agreement) with
respect to such action.
(b)Rebate Fund. The Borrower acknowledges that the Fiscal Agent shall
establish and hold a separate fund designated as the “Rebate Fund” under the Funding Loan
Agreement and deposit ortransfer to the credit of the Rebate Fund each amount delivered to the
Fiscal Agent by the Borrower for deposit thereto and each amount directed by the Borrower to be
transferred thereto, as further described in Section7.8 of the Funding Loan Agreement.
Section 5.36Covenants under Funding Loan Agreement. The Borrower will fully and
faithfully perform all the duties and obligations which the Governmental Lender has covenanted and
agreed in the Funding Loan Agreement to cause the Borrower to perform and any duties and
obligations which the Borrower is required in the Funding Loan Agreement to perform. The
foregoing will not apply to any duty or undertaking of the Governmental Lender that by its nature
cannot be delegated or assigned.
Section 5.37Continuing Disclosure Agreement. The Borrower and the Funding Lender
shall enter into the Continuing Disclosure Agreement to provide for the continuing disclosure of
information about the Funding Loan, the Borrower and other matters as specifically provided for in
such agreement.
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ARTICLE VI
NEGATIVE COVENANTS
Borrower hereby covenants and agrees as follows, which covenants shall remain in effect so
long as any Borrower Payment Obligation or other obligation of Borrower under any of the other
Borrower Loan Documents or the Funding Loan Documents remains outstanding or unperformed.
Borrower covenants and agrees that it will not, directly or indirectly:
Section 6.1Management Agreement. Without first obtaining the Funding Lender’s
prior Written Consent, enter into the Management Agreement, and thereafter the Borrower shall not,
without the Funding Lender’s prior Written Consent (which consent shall not be unreasonably
withheld) and subject to the Regulatory Agreement: (i)surrender, terminate or cancel the
Management Agreement or otherwise replace the Manager orenter into any other management
agreement; (ii)reduce or consent to the reduction of the term of the Management Agreement;
(iii)increase or consent to the increase of the amount of any charges under the Management
Agreement; (iv)otherwise modify, change, supplement, alter or amend in any material respect, or
waive or release in any material respect any of its rights and remedies under, the Management
Agreement; or (v)suffer or permit the occurrence and continuance of a default beyond any applicable
cure period under the Management Agreement (or any successor management agreement) if such
default permits the Manager to terminate the Management Agreement (or such successor
management agreement).
Section 6.2Dissolution. Dissolve or liquidate, in whole or in part, merge with or
consolidate into another Person.
Section 6.3Change in Business or Operation of Property. Enter into any line of
business other than the ownership and operation of the Project, or make any material change in the
scope or nature of its business objectives,purposes or operations, or undertake or participate in
activities other than the continuance of its present business and activities incidental or related thereto
or otherwise cease to operate the Project as a multi-family property or terminate such business for
any reason whatsoever (other than temporary cessation in connection with construction or
rehabilitation, as appropriate, of the Project).
Section 6.4Debt Cancellation. Cancel or otherwise forgive or release any claim or debt
owed to the Borrower by a Person, except for adequate consideration or in the ordinary course of the
Borrower’s business in its reasonable judgment.
Section 6.5Assets. Purchase or own any real property or personal property incidental
thereto other than the Project.
Section 6.6Transfers. Make, suffer or permitthe occurrence of any Transfer other than
a transfer permitted under the Security Instrument and Section10 of the Regulatory Agreement, nor
transfer any material License required for the operation of the Project.
Section 6.7Debt. Other than as expressly approved in writing by the Funding Lender,
create, incur or assume any indebtedness for borrowed money (including subordinate debt) whether
unsecured or secured by all or any portion of the Project or interest therein or in the Borrower or any
partner thereof (including subordinate debt) other than (i)the Borrower Payment Obligations, (ii)the
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Subordinate Debt, (iii)secured indebtedness incurred pursuant to or permitted by the Borrower Loan
Documents and the Funding Loan Documents, (iv)trade payables incurred in the ordinary course of
business and (v) deferred developer fees.
Section 6.8Assignment of Rights. Without the Funding Lender’s prior Written Consent,
attempt to assign the Borrower’s rights or interest under any Borrower Loan Document or Funding
Loan Document in contravention of any Borrower Loan Document or Funding Loan Document.
Section 6.9Principal Place of Business. Change its principal place of business without
providing 30days’ prior Written Notice of the change to the Funding Lender and the Servicer.
Section 6.10Partnership Agreement. Without the Funding Lender’s prior Written
Consent (which consent shall not be unreasonably withheld) surrender, terminate, cancel, modify,
change, supplement, alter or amend in any material respect, or waive or release in any material
respect (exceptas allowed by the Security Instrument), any of its rights or remedies under the
Partnership Agreement; provided, however, the consent of Funding Lender is not required for an
amendment of the Partnership Agreement resulting solely from the “Permitted Transfer” of
partnership interests of Borrower as defined in and permitted by the Security Instrument.
Section 6.11ERISA. Maintain, sponsor, contribute to or become obligated to contribute
to, or suffer or permit any ERISA Affiliate of the Borrower to, maintain, sponsor,contribute to or
become obligated to contribute to, any Plan, or permit the assets of the Borrower to become “plan
assets,” whether by operation of law or under regulations promulgated under ERISA.
Section 6.12No Hedging Arrangements. Without the prior Written Consent of the
Funding Lender or unless otherwise required by this Borrower Loan Agreement, the Borrower will
not enter into or guarantee, provide security for or otherwise undertake any form of contractual
obligation with respect to any interest rate swap, interest rate cap or other arrangement that has the
effect of an interest rate swap or interest rate cap or that otherwise (directly or indirectly, derivatively
or synthetically) hedges interest rate risk associated with being a debtor of variable rate debt or any
agreement or other arrangement to enter into any of the above on a future date or after the occurrence
of one or more events in the future.
Section 6.13Loans and Investments; Distributions; Related Party Payments.
(a)Without the prior Written Consent of Funding Lender in each instance,
Borrower shall not (i)lend money, make investments, or extend credit, other than in the ordinary
course of its business as presently conducted; or (ii)repurchase, redeem or otherwise acquire any
interest in Borrower, any Borrower Affiliate or any other Person owning an interest, directly or
indirectly, in Borrower, or make any distribution, in cash or in kind, in respect of interests in
Borrower, any Borrower Affiliate or any other Person owning an interest, directly or indirectly, in
Borrower (except to the extent permitted by the Security Instrument and subject to the limitations set
forth in Section5.27 hereof).
(b)Disbursements for fees and expenses of any Borrower Affiliate and developer
fees (however characterized) will only be paid to the extent that such fee or expense bears a
proportionate relationship to the percentage of completion of the construction or rehabilitation, as the
case may be, of the Improvements, as determined by the Construction Consultant, and only after
deducting the applicable Retainage. Except as otherwise permitted hereunder or by the Funding
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Lender, no Disbursements for the Developer Fee or any “deferred developer fees” shall be made
prior to the Conversion Date other than in accordance with the Approved Developer Fee Schedule.
Section 6.14Amendment of Related Documents or CC&R’s. Without the prior Written
Consent of Funding Lender in each instance, except as provided herein or in the Construction
Funding Agreement, Borrower shall not enter into or consent to any amendment, termination,
modification, or other alteration of any of the Related Documents or any of the CC&R’s (including,
without limitation, those contained in this Borrower Loan Agreement, any Architect’s Agreement or
Engineer’s Contract, any Construction Contract, and any Management Agreement, but excluding the
Partnership Agreement, which is covered by Section6.10), or any assignment, transfer, pledge or
hypothecation of any of its rights thereunder, if any.
Section 6.15Personal Property. Borrower shall not install materials, personal property,
equipment or fixtures subject to any security agreement or other agreement or contract wherein the
right is reserved to any Person other than Borrower to remove or repossess any such materials,
equipment or fixtures, or wherebytitle to any of the same is not completely vested in Borrower at the
time of installation, without Funding Lender’s prior Written Consent; provided, however, that this
Section6.15 shall not apply to laundry equipment or other equipment that is owned by athird-party
vendor and commercial tenants.
Section 6.16Fiscal Year. Without Funding Lender’s Written Consent, which shall not be
unreasonably withheld, neither Borrower nor General Partner shall change the times of
commencement or termination of its fiscal year or other accounting periods, or change its methods of
accounting, other than to conform to GAAP.
Section 6.17Publicity. Neither Borrower nor General Partner shall issue any publicity
release or other communication to any print, broadcast or on-line media, post any sign or in any other
way identify Funding Lender or any of its Affiliates as the source of the financing provided for
herein, without the prior written approval of Funding Lender in each instance (provided that nothing
herein shall prevent Borrower or General Partner from identifying Funding Lender or its Affiliates as
the source of such financing to the extent that Borrower or General Partner are required to do so by
disclosure requirements applicable to publicly held companies). With the exception of Equity
Investor signage posted on the Project, Borrower and General Partner agree that no sign shall be
posted on the Project in connection with the construction or rehabilitation of the Improvements
unless such sign identifies Citigroup and its affiliates as the source of the financing provided for
herein or Funding Lender consents to not being identified on any such sign.
Section 6.18Subordinate Loan Documents. Without Funding Lender’s prior written
consent, Borrower will not surrender, terminate, cancel, modify, change, supplement, alter, amend,
waive, release, assign, transfer, pledge or hypothecate any of its rights or remedies under the
Subordinate Loan Documents.
ARTICLE VII
RESERVED
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ARTICLE VIII
DEFAULTS
Section 8.1Events of Default. Each of the following events shall constitute an “Event of
Default”under this Borrower Loan Agreement:
(a)failure by the Borrower to pay any Borrower Loan Payment in the manner
and on the date such payment is due in accordance with the terms and provisions of the Borrower
Notes, or the failure by the Borrower to pay any Additional Borrower Payment on the date such
payment is due in accordance with the terms and provisions of the Borrower Notes, the Security
Instrument, this Borrower Loan Agreement or any other Borrower Loan Document;
(b)failure by or on behalf of the Borrower to pay when due any amount (other
than as provided in subsection (a) above or elsewhere in this Section8.1) required to be paid by the
Borrower under this Borrower Loan Agreement, the Borrower Notes, the Security Instrument or any
of the other Borrower Loan Documents or Funding Loan Documents, including a failure to repay any
amounts that have been previously paid but are recovered, attached or enjoined pursuant to any
insolvency, receivership, liquidation or similar proceedings, which default remains uncured for a
period of five (5)days after Written Notice thereof shall have been given to the Borrower;
(c)an Event of Default, as defined in the Borrower Notes, the Security
Instrument or any other Borrower Loan Document, occurs (or to the extent an “Event of Default” is
not defined in any other Borrower Loan Document, any default or breach by the Borrower or any
Guarantor of its obligations, covenants, representations or warranties under such Borrower Loan
Document occurs and any applicable notice and/or cure period has expired);
(d)any representation or warranty made by any of the Borrower, the Guarantor
or the General Partner in any Borrower Loan Document or Funding Loan Document to which it is a
party, or in any report, certificate, financial statement or other instrument, agreement or document
furnished by the Borrower, the Guarantor or the General Partner in connection with any Borrower
Loan Document or Funding Loan Document, shall be false or misleading in any material respect as
of the Closing Date;
(e)the Borrower shall make a general assignment for the benefit of creditors, or
shall generally not be paying its debts as they become due;
(f)the Borrower Controlling Entity shall make a general assignment for the
benefit of creditors, shall generally not be paying itsdebts as they become due, or an Act of
Bankruptcy with respect to the Borrower Controlling Entity shall occur, unless in all cases the
Borrower Controlling Entity is replaced with a substitute Borrower Controlling Entity that satisfies
the requirements ofSection21 of the Security Instrument; which, in the case of a nonprofit Borrower
Controlling Entity, may be replaced within sixty (60)days of such event with another nonprofit
Borrower Controlling Entity acceptable to the Funding Lender, in which case no Event of Default
shall be deemed to have occurred;
(g)any portion of Borrower Deferred Equity to be made by Equity Investor and
required for (i)completion of the construction or rehabilitation, as the case may be, of the
Improvements, (ii)the satisfaction of the Conditions of Conversion or (iii)the operation of the
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Improvements, is not received in accordance with the Partnership Agreement (and subject to the
terms and conditions as set forth therein) after the expiration of all applicable notice and cure
periods;
(h)the failure by Borrower or any ERISA Affiliate of Borrower to comply in all
respects with ERISA, or the occurrence of any other event (with respect to the failure of Borrower or
any ERISA Affiliate to pay any amount required to be paid under ERISA or with respect to the
termination of, or withdrawalof Borrower or any ERISA Affiliate from, any employee benefit or
welfare plan subject to ERISA) the effect of which is to impose upon Borrower (after giving effect to
the tax consequences thereof) for the payment of any amount in excess of Fifty Thousand Dollars
($50,000);
(i)a Bankruptcy Event shall occur with respect to Borrower, any General Partner
or Guarantor, or there shall be a change in the assets, liabilities or financial position of any such
Person which has a material adverse effect upon the ability of such Person to perform such Person’s
obligations under this Borrower Loan Agreement, any other Borrower Loan Document or any
Related Document, provided that any such Bankruptcy Event with respect to a Guarantor shall not
constitute an Event of Default: (i)if such Bankruptcy Event occurs on or after the date upon which
the Guaranty terminates in accordance with its terms (or the date upon which all of the Guaranties
have terminated in accordance with their terms, if more than one Guaranty was executedby such
Guarantor), or (ii)if such Bankruptcy Event occurs prior to the date upon which the Guaranty
terminates in accordance with its terms (or the date upon which all of the Guaranties have terminated
in accordance with their terms, if more than one Guaranty was executed by such Guarantor) and the
Borrower replaces such Guarantor with a person or entity satisfying the Funding Lender’s mortgage
credit standards for principals and acceptable to the Funding Lender in its sole and absolute
discretion withinthirty (30)days after notice thereof from the Funding Lender, and provided further
that any such Bankruptcy Event with respect to the Managing General Partner shall not constitute an
Event of Default if the Managing General Partner is replaced with a substitute non-profit managing
general partner that satisfies the requirements of Section21 of the Security Instrument and is
acceptable to Funding Lender in its sole and absolute discretion within thirty (30)days after notice
thereof from Funding Lender;
(j)all or any part of the property of Borrower is attached, levied upon or
otherwise seized by legal process, and such attachment, levy or seizure is not quashed, stayed or
released: (i)prior to completion of the construction or rehabilitation, as the case may be, of the
Improvements, within ten (10)days of the date thereof or (ii)after completion of the construction or
rehabilitation, as the case may be, of the Improvements, within thirty (30)days of the date thereof;
(k)subject to Section10.16 hereof, Borrower fails to pay when due any monetary
obligation (other than pursuant to this Borrower Loan Agreement) to any Person in excess of
$100,000, and such failure continues beyond the expiration of any applicable cure or grace periods;
(l)any material litigation or proceeding is commenced before any Governmental
Authority against or affecting Borrower, any General Partner or Guarantor, or property of Borrower,
any General Partner or Guarantor, or any part thereof, and such litigation or proceeding is not
defended diligently and in good faith by Borrower, any General Partner or Guarantor, as applicable,
provided that any such material litigation or proceeding against a Guarantor shall not constitute an
Event of Default: (i)if such material litigation is commenced on or after the date upon which the
Guaranty terminates in accordance with its terms (or the date upon which all of the Guaranties have
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terminated in accordance with their terms, if more than one Guaranty was executed by such
Guarantor), or (ii)if such material litigation or proceeding is commenced prior to the date upon
which the Guaranty terminates in accordance with its terms (or the date upon which all of the
Guaranties have terminated in accordance with their terms, if more than one Guaranty was executed
by such Guarantor) and the Borrower replaces such Guarantor with a person or entity satisfying the
Funding Lender’s mortgage credit standards for principals and acceptable to the Funding Lender in
its sole and absolute discretion within thirty (30)days after notice thereof from the Funding Lender,
and provided further that any such material litigation or proceeding against the Managing General
Partner shall not constitute an Event of Default if the Managing General Partner is replaced with a
substitutenon-profit managing general partner that satisfies the requirements of Section21 of the
Security Instrument and is acceptable to Funding Lender in its sole and absolute discretion within
thirty (30)days after notice thereof from Funding Lender;
(m)a final judgment or decree for monetary damages in excess of $50,000 or a
monetary fine or penalty (not subject to appeal or as to which the time for appeal has expired) is
entered against Borrower, any General Partner or Guarantor by any Governmental Authority, and
such judgment, decree, fine or penalty is not paid and discharged or stayed (i)prior to completion of
the construction or rehabilitation, as the case may be, of the Improvements, within ten (10)days after
entry thereof or (ii)after completion of the construction or rehabilitation, as the case may be, of the
Improvements, within thirty (30)days after entry thereof (or such longer period as may be permitted
for payment by the terms of such judgment, fine or penalty) , provided that any such judgment,
decree, fine or penalty against a Guarantor shall not constitute an Event of Default: (i)if such
judgment, decree, fine or penalty is entered on or after the date upon which the Guaranty terminates
in accordance with its terms (or the date upon which all of the Guaranties have terminated in
accordance with their terms, if more than one Guaranty was executed by such Guarantor), or (ii)if
such judgment, decree, fine or penalty is entered prior to the date upon which the Guaranty
terminates in accordance with its terms (or the date upon which all of the Guaranties have terminated
in accordance with their terms, if more than one Guaranty was executed by such Guarantor) and the
Borrower replaces such Guarantor with a person or entity satisfying the Funding Lender’s mortgage
credit standards for principals and acceptable to the Funding Lender in its sole and absolute
discretion within thirty (30)days after notice thereof from the Funding Lender, and provided further
that any such judgment, decree, fine or penalty against the managing general partner shall not
constitute an Event of Default if the managing general partner is replaced with a substitute non-profit
managing general partner that satisfies the requirements of Section21 of the Security Instrument and
is acceptable to Funding Lender in its sole and absolute discretion within thirty (30)days after notice
thereof from Funding Lender;
(n)a final, un-appealable and uninsured money judgment or judgments, in favor
of any Person other than a Governmental Authority, in the aggregate sum of $50,000 or more shall be
rendered against Borrower, any General Partner or Guarantor, or against any of their respective
assets, that is not paid, superseded or stayed (i)prior to completion of the construction or
rehabilitation, as the case may be, of the Improvements, within ten (10)days after entry thereof or
(ii)after completion of the construction or rehabilitation, as the case may be, of the Improvements,
within thirty (30)days after entry thereof (or such longer period as may be permitted for payment by
the terms of such judgment); or any levy of execution, writ or warrant of attachment, or similar
process, is entered or filed against Borrower, any General Partner or Guarantor, or against any of
their respective assets (that is likely to have a material adverse effect upon the ability of Borrower,
any General Partner or Guarantor to perform their respective obligations under this Borrower Loan
Agreement, any other Borrower Loan Document or any Related Document), and such judgment,
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writ, warrant or process shall remain unsatisfied, unsettled, unvacated, unhanded and unstayed
(i)prior to completion of the construction or rehabilitation, as the case may be, of the Improvements,
for a period of ten (10)days or (ii)after completion of the construction or rehabilitation, as the case
may be, of the Improvements, for a period of thirty (30)days, or in any event later than five (5)
Business Days prior to the date of any proposed sale thereunder, provided that any such judgment,
levy, writ, warrant, attachment or similar process against a Guarantor shall not constitute an Event of
Default: (i)if such judgment, levy, writ, warrant, attachment or similar process is entered on or after
the date upon which the Guaranty terminates inaccordance with its terms (or the date upon which all
of the Guaranties have terminated in accordance with their terms, if more than one Guaranty was
executed by such Guarantor), or (ii)if such judgment, levy, writ, warrant, attachment or similar
processis entered prior to the date upon which the Guaranty terminates in accordance with its terms
(or the date upon which all of the Guaranties have terminated in accordance with their terms, if more
than one Guaranty was executed by such Guarantor) and the Borrower replaces such Guarantor with
a person or entity satisfying the Funding Lender’s mortgage credit standards for principals and
acceptable to the Funding Lender in its sole and absolute discretion within thirty (30)days after
notice thereof from the Funding Lender, and provided further that any such judgment, levy, writ,
warrant, attachment or similar process against the managing general partner shall not constitute an
Event of Default if the managing general partner is replaced with a substitute non-profit managing
general partner that satisfies the requirements of Section21 of the Security Instrument and is
acceptable to Funding Lender in its sole and absolute discretion within thirty (30)days after notice
thereof from Funding Lender;
(o)the inability of Borrower to satisfy any condition for the receipt of a
Disbursement hereunder (other than an Event of Default specifically addressed in this Section8.1)
and failure to resolve the situation to the satisfaction of Funding Lender for a period in excess of
thirty (30)days after Written Notice from Funding Lender unless (i)such inability shall have been
caused by conditions beyond the control of Borrower, including, without limitation, acts of God or
the elements, fire, strikes and disruption of shipping;(ii)Borrower shall have made adequate
provision, acceptable to Funding Lender, for the protection of materials stored on-site or off-site and
for the protection of the Improvements to the extent then constructed against deterioration and
against other loss or damage or theft; (iii)Borrower shall furnish to Funding Lender satisfactory
evidence that such cessation of construction or rehabilitation will not adversely affect or interfere
with the rights of Borrower under labor and materials contracts or subcontracts relating to the
construction or operation of the Improvements; and (iv)Borrower shall furnish to Funding Lender
satisfactory evidence that the completion of the construction or rehabilitation of the Improvements
can be accomplished by the Completion Date;
(p)the construction or rehabilitation of the Improvements is abandoned or halted
prior to completion for any period of thirty (30)consecutivedays;
(q)Borrower shall fail to keep in force and effect any material permit, license,
consent or approval required under this Borrower Loan Agreement, or any Governmental Authority
with jurisdiction over the Mortgaged Property or the Project orders or requires that construction or
rehabilitation of the Improvements be stopped, in whole or in part, or that any required approval,
license or permit be withdrawn or suspended, and the order, requirement, withdrawal or suspension
remains in effect for a period of thirty (30)days;
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(r)failure by the Borrower to Substantially Complete the construction or
rehabilitation, as the case may be, of the Improvements in accordance with this Borrower Loan
Agreement on or prior to the Substantial Completion Date;
(s)failure by Borrower to complete the construction or rehabilitation, as the case
may be, of the Improvements in accordance with this Borrower Loan Agreement on or prior to the
Completion Date;
(t)failure by Borrower to satisfy the Conditions to Conversion on or before the
Outside Conversion Date or the Extended Outside Conversion Date, if applicable;
(u)failure by any Subordinate Lender to disburse the proceeds of its Subordinate
Loan in approximately such amounts and at approximately such times as set forth in the Cost
Breakdown and in the Subordinate Loan Documents;
(v)an “Event of Default” or “Default” (as defined in the applicable agreement)
shall occur under any of the Subordinate Loan Documents, after the expiration of all applicable
notice and cure periods; or
(w)Borrower fails to obtain all grading, foundation, building and all other
construction permits, licenses and authorizations from all applicable Governmental Authorities or
third parties necessary for the completion of the construction or rehabilitation, as the case may be, of
the Improvements, and the operation of, and access to, the Project, prior to the commencement of any
work for which such permit, license or authorization is required; or
(x)any failure by the Borrower to perform or comply with any of its obligations
under this Borrower Loan Agreement (other than those specified in this Section8.1), as and when
required, that continues for a period of thirty (30)days after written notice of such failure by Funding
Lender or the Servicer on its behalf to the Borrower (with a copy to the limited partner of the
Borrower); provided, however, if such failure is susceptible of cure but cannot reasonably be cured
within such thirty (30)day period, and the Borrower shall have commenced to cure such failure
within such thirty (30)day period and thereafter diligently and expeditiously proceeds to cure the
same, such thirty (30)day period shall be extended for an additional period of time as is reasonably
necessary for the Borrower in the exercise of due diligence to cure such failure, such additional
period not to exceed sixty (60)days. However, no such notice or grace period shall apply to the
extent such failure could, in the Funding Lender’s judgment, absent immediate exercise by the
Funding Lender of a right or remedy under this Borrower Loan Agreement, result in harm to the
Funding Lender, impairment of the Borrower Notes or thisBorrower Loan Agreement or any
security given under any other Borrower Loan Document.
Additionally, except with respect to any payment due on the Borrower Note and Additional
Borrower Payments, (a) any Default or Event of Default that occurs by reason of acts or omissions of
a general partner of Borrower shall be deemed cured if such general partner of Borrower is replaced,
within thirty (30) days after notice to Borrower and the Equity Investor of such Default or Event of
Default by Funding Lender, by a substitute general partner approved by Funding Lender in its sole
discretion, except if such replacement is an affiliate of the Equity Investor, no such approval by
Funding Lender shall be required, provided in either case such replacement is approved by the
Governmental Lender in the manner and to the extent provided in the Regulatory Agreement and
such substitute general partner timely cures such Default or Event of Default; and (b) any Default or
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Event of Default that occurs which can be cured by replacement of any guarantor of the Borrower
Loan shall be deemed cured if such guarantor is replaced by a substitute guarantor approved by
Funding Lender in its sole discretion, which substitute guarantor executes such guaranty agreements
requested by Funding Lender within thirty (30) days after notice to Borrower of such Default or
Event of Default by Funding Lender.
Section 8.2Remedies.
Section 8.2.1Acceleration. Upon the occurrence of an Event of Default (other
than an Event of Default described in paragraph(e), (f) or (i) of Section8.1) and at any time and
from time to time thereafter, as long as such Event of Default continues to exist, in addition to any
other rights or remedies available to the Governmental Lender pursuant to the Borrower Loan
Documents or at law or in equity, the Funding Lender may, take such action (whether directly or by
directing the actions of the Fiscal Agent), without notice or demand, as the Funding Lender deems
advisable to protect and enforce its rights against the Borrower and in and to the Project, including
declaring the Borrower Payment Obligations to be immediately due and payable (including, without
limitation, the principal of, Prepayment Premium, if any, and interest on and all other amounts due
on the Borrower Notes to be immediately due and payable), without notice or demand, and apply
such payment of the Borrower Payment Obligations in any manner and in any order determined by
Funding Lender, in Funding Lender’s sole and absolute discretion; and upon any Event of Default
described in paragraph(e), (f) or (i) of Section8.1, the Borrower Payment Obligations shall become
immediately due and payable, without notice or demand, and the Borrower hereby expressly waives
any such notice or demand, anything contained in any Borrower Loan Document to thecontrary
notwithstanding. Notwithstanding anything herein to the contrary, enforcement of remedies
hereunder and under the Funding Loan Agreement shall be controlled by the Funding Lender.
Section 8.2.2Remedies Cumulative. Upon the occurrence of an Event of
Default,all or any one or more of the rights, powers, privileges and other remedies available to the
Funding Lender against the Borrower under the Borrower Loan Documents or at law or in equity
may be exercised by the Funding Lender or the Fiscal Agent, at any time and from time to time,
whether or not all or any of the Borrower Payment Obligations shall be declared due and payable,
and whether or not the Funding Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Borrower Loan Documents.
Any such actions taken by the Funding Lender shall be cumulative and concurrent and may be
pursued independently, singly, successively, together or otherwise, at such time and in such order as
the Funding Lender may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of the Funding Lender
permitted by law, equity or contract or as set forth in the Borrower Loan Documents. Without
limiting the generality of the foregoing, the Borrower agrees that if an Event of Default is continuing,
all Liens and other rights, remedies or privileges provided to the Funding Lender shall remain in full
force and effect until they have exhausted all of its remedies, the Security Instrument has been
foreclosed, the Project has been sold and/or otherwise realized upon satisfaction of the Borrower
Payment Obligations or the Borrower Payment Obligations has been paid in full. To the extent
permitted by applicable law, nothing contained in any Borrower Loan Document shall be construed
as requiring the Funding Lender to resort to any portion of the Project for the satisfaction of any of
the Borrower Payment Obligations in preference or priority to any other portion, and the Funding
Lender may seek satisfaction out of the entire Project or any part thereof, in its absolute discretion.
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Notwithstanding any provision herein to the contrary, the Governmental Lender, the
Fiscal Agent and theFunding Lender agree that any cure of any default made or tendered by the
Equity Investor under the Borrower Loan Documents or the Funding Loan Documents shall be
deemed to be a cure by the Borrower and shall be accepted or rejected on the same basis as if made
or tendered by the Borrower.
Section 8.2.3Delay. No delay or omission to exercise any remedy, right, power
accruing upon an Event of Default, or the granting of any indulgence or compromise by the Funding
Lender or the Fiscal Agent shall impair any such remedy,right or power hereunder or be construed
as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as
often as may be deemed expedient. A waiver of one Potential Default or Event of Default shall not
be construed to be a waiver of any subsequent Potential Default or Event of Default or to impair any
remedy, right or power consequent thereon. Notwithstanding any other provision of this Borrower
Loan Agreement, the Funding Lender and the Fiscal Agent reserve the right to seek a deficiency
judgment or preserve a deficiency claim, in connection with the foreclosure of the Security
Instrument to the extent necessary to foreclose on the Project, the Rents, the funds or any other
collateral.
Section 8.2.4Set Off; Waiver of Set Off. Uponthe occurrence of an Event of
Default, Funding Lender may, at any time and from time to time, without notice to Borrower or any
other Person (any such notice being expressly waived), set off and appropriate and apply (against and
on account of any obligations and liabilities of the Borrower to the Funding Lender or the Fiscal
Agent arising under or connected with this Borrower Loan Agreement and the other Borrower Loan
Documents and the Funding Loan Documents, irrespective of whether or not the Funding Lender
shall have made any demand therefor, and although such obligations and liabilities may be
contingent or unmatured), and the Borrower hereby grants to the Funding Lender, as security for the
Borrower Payment Obligations, a security interest in, any and all deposits (general or special,
including but not limited to Debt evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Debt at any time held or owing by the Funding
Lender to or for the credit or the account of the Borrower.
Section 8.2.5Assumption of Obligations. In the event that the Funding Lender
or its assignee or designee shall become the legal or beneficial owner of the Project by foreclosure or
deed in lieu of foreclosure, such party shall succeedto the rights and the obligations of the Borrower
under this Borrower Loan Agreement, the Borrower Notes, the Regulatory Agreement, and any other
Borrower Loan Documents and Funding Loan Documents to which the Borrower is a party. Such
assumption shall be effective from and after the effective date of such acquisition and shall be made
with the benefit of the limitations of liability set forth therein and without any liability for the prior
acts of the Borrower.
Section 8.2.6Accounts Receivable. Upon the occurrence of an Event of Default,
Funding Lender shall have the right, to the extent permitted by law, to impound and take possession
of books, records, notes and other documents evidencing Borrower’s accounts, accounts receivable
and other claims for payment of money, arising in connection with the Project, and to make direct
collections on such accounts, accounts receivable and claims for the benefit of Funding Lender.
Section 8.2.7Defaults under Other Documents. Funding Lender shall have the
right to cure any default under any of the Related Documents and the Subordinate Loan Documents,
but shall have no obligation to do so.
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Section 8.2.8Abatement of Disbursements. Notwithstanding any provision to
the contrary herein or any of the other Borrower Loan Documents or the Funding Loan Documents,
Funding Lender’s obligation to make further Disbursements shall abate (i)during the continuance of
any Potential Default, (ii)after any disclosure to Funding Lender of any fact or circumstance that,
absent such disclosure, would cause any representation or warranty of Borrower to fail to be true and
correct in all material respects, unless and until Funding Lender elects to permit further
Disbursements notwithstanding such event or circumstance; and (iii)upon the occurrence of any
Event of Default.
Section 8.2.9Completion of Improvements. Upon the occurrence of any Event
of Default, Funding Lender shall have the right to cause an independent contractor selected by
Funding Lender to enter into possession of the Project and to perform any and all work and labor
necessary for the completion of the Project substantially in accordance with the Plans and
Specifications, if any, and to perform Borrower’s obligations under this Borrower Loan Agreement.
All sums expended by Funding Lender for such purposes shall be deemed to have been disbursed to
and borrowed by Borrower and shall be secured by the Security Documents.
Section 8.2.10Right to Directly Enforce. Notwithstanding any other provision
hereof to the contrary, the Funding Lender shall have the right to directly enforce all rights and
remedies hereunder with or without involvement of the Governmental Lender or the Fiscal Agent,
provided that only the Governmental Lender may enforce the Unassigned Rights. In the event that
any of the provisions set forth in this Section8.2.10 areinconsistent with the covenants, terms and
conditions of the Security Instrument, the covenants, terms and conditions of the Security Instrument
shall prevail.
Section 8.2.11Power of Attorney. Effective upon the occurrence of an Event of
Default, and continuing until and unless such Event of Default is cured or waived, Borrower hereby
constitutes and appoints Funding Lender, or an independent contractor selected by Funding Lender,
as its true and lawful attorney-in-fact with full power of substitution, for the purposesof completion
of the Project and performance of Borrower’s obligations under this Borrower Loan Agreement in
the name of Borrower, and hereby empowers said attorney-in-fact to do any or all of the following
upon the occurrence and continuation of an Eventof Default (it being understood and agreed that
said power of attorney shall be deemed to be a power coupled with an interest which cannot be
revoked until full payment and performance of all obligations under this Borrower Loan Agreement
and the other Borrower Loan Documents and the Funding Loan Documents):
(a)to use any of the funds of Borrower or General Partner, including any balance
of the Borrower Loan, as applicable, and any funds which may be held by Funding Lender for
Borrower (including all funds inall deposit accounts in which Borrower has granted to Funding
Lender a security interest), for the purpose of effecting completion of the construction or
rehabilitation, as the case may be, of the Improvements, in the manner called for by the Plans and
Specifications;
(b)to make such additions, changes and corrections in the Plans and
Specifications as shall be necessary or desirable to complete the Project in substantially the manner
contemplated by the Plans and Specifications;
(c)to employ any contractors, subcontractors, agents, architects and inspectors
required for said purposes;
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(d)to employ attorneys to defend against attempts to interfere with the exercise
of power granted hereby;
(e)to pay, settle or compromise all existing bills and claims which are or may be
liens against the Project or the Improvements, or may be necessary or desirable for the completion of
the construction or rehabilitation, as the case may be, of the Improvements, or clearance of objections
to or encumbrances on title;
(f)to execute all applications and certificates in the name of Borrower, which
may be required by any other construction contract;
(g)to prosecute and defend all actions or proceedings in connection with the
Project and to take such action, require such performance and do any and every other act as is
deemed necessary with respect to the completion of the construction or rehabilitation, as the case
may be, of the Improvements, which Borrower might do on its own behalf;
(h)to let new or additional contracts to the extent not prohibitedby their existing
contracts;
(i)to employ watchmen and erect security fences to protect the Project from
injury; and
(j)to take such action and require such performance as it deems necessary under
any of the bonds or insurance policies to be furnished hereunder, to make settlements and
compromises with the sureties or insurers thereunder, and in connection therewith to execute
instruments of release and satisfaction.
It is the intention of the parties hereto that upon the occurrence and continuance of an Event
of Default, rights and remedies may be pursued pursuant to the terms of the Borrower Loan
Documents and the Funding Loan Documents. The parties hereto acknowledge that, among the
possible outcomes to the pursuit of such remedies, is the situation where theFunding Lender
assignees or designees become the owner of the Project and assume the obligations identified above,
and the Borrower Notes, the Borrower Loan and the other Borrower Loan Documents and Funding
Loan Documents remain outstanding.
ARTICLE IX
SPECIAL PROVISIONS
.
Section 9.1Sale of Note and Secondary Market Transaction
Section 9.1.1Cooperation. Subject to the restrictions of Section2.4 of the
Funding Loan Agreement, at the Funding Lender’s or the Servicer’s request (to the extent not already
required to be provided by the Borrower under this Borrower Loan Agreement), the Borrower shall
use reasonable efforts to satisfy the market standards to which the Funding Lender or the Servicer
customarily adheres or which may be reasonably required in the marketplace or by the Funding
Lender or the Servicer in connection with one or more sales or assignments of all or a portion of the
Governmental Lender Notes or participations therein or securitizations of single or multi-class
securities (the “Securities”) secured by or evidencing ownership interests in all or a portion of the
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Governmental Lender Notes (each such sale, assignment and/or securitization, a “Secondary Market
Transaction”); provided that neither the Borrower nor the Governmental Lender shall incur any third
party or other out-of-pocket costs and expenses in connection with a Secondary Market Transaction,
including the costs associated with the delivery of any Provided Information or any opinion required
in connection therewith, and all such costs shall be paid by the FundingLender or the Servicer, and
shall not materially modify Borrower’s rights or obligations. Without limiting the generality of the
foregoing, the Borrower shall, so long as the Borrower Loan is still outstanding:
(a)(i)provide such financial and other information with respect to the Borrower
Loan, and with respect to the Project, the Borrower, the Manager, the contractor of the Project or the
Borrower Controlling Entity, (ii)provide financial statements, audited, if available, relating to the
Project with customary disclaimers for any forward looking statements or lack of audit, and (iii), at
the expense of the Funding Lender or the Servicer, perform or permit or cause to be performed or
permitted such site inspection, appraisals, surveys, market studies, environmental reviews and reports
(Phase I’s and, if appropriate, Phase II’s), engineering reports and other due diligence investigations
of the Project, as may be reasonably requested from time to time by the Funding Lender or the
Servicer or the Rating Agencies or as may be necessary or appropriate in connection with a
Secondary Market Transaction or Exchange Act requirements (the items provided to the Funding
Lender or the Servicer pursuant to this paragraph(a) being called the “Provided Information”),
together, if customary, with appropriate verification of and/or consents to the Provided Information
through letters of auditors or opinions of counsel of independent attorneys acceptable to the Funding
Lender or the Servicer and the Rating Agencies;
(b)make such representations and warranties as of the closing date of any
Secondary Market Transaction with respect to the Project, the Borrower, the Borrower Loan
Documents and the Funding Loan Documents reasonably acceptable to the Funding Lender or the
Servicer, consistent with the facts covered by such representations and warranties as they exist on the
date thereof; and
(c)execute such amendments to the Borrower Loan Documents and the Funding
Loan Documents to accommodate such Secondary Market Transaction so long as such amendment
does not affect the material economic terms of the Borrower Loan Documents and the Funding Loan
Documents and is not otherwise adverse to the Borrower in its reasonable discretion.
Section 9.1.2Use of Information. The Borrower understands that certainof the
Provided Information and the required records may be included in disclosure documents in
connection with a Secondary Market Transaction, including a prospectus or private placement
memorandum (each, a “Secondary Market Disclosure Document”), or provided or made available to
investors or prospective investors in the Securities, the Rating Agencies and service providers or
other parties relating to the Secondary Market Transaction. In the event that the Secondary Market
Disclosure Document is required to be revised, the Borrower shall cooperate, subject to
Section9.1.1(c) hereof, with the Funding Lender and the Servicer in updating the Provided
Information or required records for inclusion or summary in the Secondary Market Disclosure
Document or forother use reasonably required in connection with a Secondary Market Transaction
by providing all current information pertaining to the Borrower and the Project necessary to keep the
Secondary Market Disclosure Document accurate and complete in all material respects with respect
to such matters. The Borrower hereby consents to any and all such disclosures of such information.
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The Borrower and the Funding Lender agree and acknowledge that the Governmental
Lender undertakes no obligation hereunder or in the Funding Loan Agreement to participate in the
preparation of, or to approve, any Secondary Market Disclosure Document.
Section 9.1.3Borrower Obligations Regarding Secondary Market Disclosure
Documents. In connection with a Secondary Market Disclosure Document, the Borrower shall
provide, or in the case of a Borrower-engaged third party such as the Manager, cause it to provide,
information reasonably requested by the Funding Lender pertaining to the Borrower, the Project or
such third party (and portions of any other sections reasonably requested by the Funding Lender
pertaining to the Borrower, the Project or the third party). The Borrower shall, if requested by the
Funding Lender and the Servicer, certify in writing that the Borrower has carefully examined those
portions of such Secondary Market Disclosure Document, pertaining to the Borrower, the Project or
the Manager, and such portions (and portions of any other sections reasonably requested and
pertaining to the Borrower, the Project or the Manager) do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading; provided that the Borrower
shall not be required to make any representations or warranties regarding any Provided Information
obtained from a third party except with respect to information it provided to such parties.
Furthermore, the Borrower hereby indemnifies the Funding Lender and the Servicer for any
Liabilities to which any such parties may become subject to the extent such Liabilities arise out of or
are based upon the use of the Provided Information in a Secondary Market Disclosure Document.
Section 9.1.4Borrower Indemnity Regarding Filings. In connection with
filings under the Exchange Act or the Securities Act, the Borrower shall (i)indemnify Funding
Lender and the underwriter group for any securities (the “Underwriter Group”) for any Liabilities to
which Funding Lender, the Servicer or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon the omission or alleged omission to state in the Provided
Information of a material fact required to be stated in the Provided Information in order to make the
statements in the Provided Information, in the light of the circumstances under which they were
made not misleading and (ii)reimburse the Funding Lender, the Servicer, the Underwriter Group and
other indemnified parties listed above for any legal or other expenses reasonably incurred by the
Funding Lender, the Servicer or the Underwriter Group in connection with defending or investigating
the Liabilities; provided that the Borrower shall not provide any indemnification regarding any
Provided Information obtained from unrelated third parties except with respect to information it
provided to such parties.
Section 9.1.5Indemnification Procedure. Promptly after receipt by an
indemnified party under Sections 9.1.3 and 9.1.4 hereof of notice of the commencement of any action
for which a claim for indemnification is to be made against the Borrower, such indemnified party
shall notify the Borrower in writing of such commencement, but the omission to so notify the
Borrower will not relieve the Borrower from any liability that it may have to any indemnified party
hereunder except to the extent that failure to notify causes prejudice to the Borrower. In the event
that any action is brought against any indemnified party, and it notifies the Borrower of the
commencement thereof, the Borrower will be entitled, jointly with any other indemnifying party, to
participate therein and, to the extent that it (or they) may elect by Written Notice delivered to the
indemnified party promptly after receiving the aforesaid notice of commencement, to assume the
defense thereof with counsel selected by the Borrower and reasonably satisfactory to such
indemnified party in its sole discretion. After notice from the Borrower to such indemnified party
under this Section9.1.5, the Borrower shall not be responsible for any legal or other expenses
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subsequently incurred by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnified party shall settle or compromise any claim for
which the Borrower may be liable hereunder without the prior Written Consent of the Borrower.
Section 9.1.6Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in Section9.1.4 hereof
is for any reason held to be unenforceable by an indemnified party in respect of any Liabilities (or
action in respect thereof) referred to therein which would otherwise be indemnifiable under
Section9.1.4 hereof, the Borrower shall contribute to the amount paid or payable by the indemnified
party as a result of such Liabilities (or action in respect thereof); provided, however, that no Person
guilty of fraudulent misrepresentation (within the meaning of Section10(f) of the Securities Act)
shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation. In
determining the amount of contribution to which the respective parties are entitled, the following
factors shall be considered: (i)the indemnified parties and the Borrower’s relative knowledge and
access to information concerning the matter with respect to which the claim was asserted; (ii)the
opportunity to correct and prevent any statement or omission; and (iii)any other equitable
considerations appropriate in the circumstances. The parties hereto hereby agree that it may not be
equitable if the amount of such contribution were determined by pro rata or per capita allocation.
ARTICLE X
MISCELLANEOUS
. All notices, consents, approvals and requests required or permitted
Section 10.1Notices
hereunder or under any other Borrower Loan Document or Funding Loan Document (a “notice”)
shall be deemed to be given and made when delivered by hand, recognized overnight delivery
service, confirmed facsimile transmission (provided any telecopy or other electronic transmission
received by any party after 4:00 p.m., local time, as evidenced by the time shown on such
transmission, shall be deemed to have been received the following Business Day), or five
(5)calendar days after deposited in the United States mail, registered or certified, postage prepaid,
with return receipt requested, addressed as follows:
If to the Fiscal Agent:U.S. Bank National Association
Global Corporate Trust Services
633 West 5th Street
Los Angeles, California 90071
Attention: Ismael Diaz
Telephone: (213)615-6063
If to the Governmental Lender:Chula Vista Housing Authority
276 Fourth Avenue
Chula Vista, California 91910
Attention: Executive Director
Phone: (619)691-5263
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If to the Borrower:St. Regis ParkCIC, LP
6339 Paseo del Lago
Carlsbad, California 92011
Telephone: (760)456-6000
Facsimile: (760)456-6001
Attn: Project Manager
c/o Chelsea Investment Corporation
6993 Paseo del Lago
Carlsbad, California 92011
Attn: Project Manager
with a copy to:Cox, Castle & Nicholson LLP
50 California Street, Suite 3200
San Fransisco, CA 94111
Attention: Ofer Elitzur, Esq.
If to the Equity Investor:Raymond James California Housing Opportunities
Fund VI L.L.C.
c/o Raymond James Tax Credit Funds, Inc.
880 Carillion Parkway
St. Petersburg, FL 33716
Attn: Steven J. Kropf, President
with a copy to:Bocarsly, Emden, Cowan, Esmail& Arndt, LLP
633 West Fifth Street, 64th Floor
Los Angeles, California 90071
Attention: Kyle Arndt
Telephone: (213)239-8048
If to the Funding Lender:Citibank, N.A.
388 Greenwich Street, 8th Floor
NewYork, New York 10013
Attention: Transaction Management Group
Re: St. Regis Park Apartments
Deal ID No.__________
Facsimile: (212)723-8209
and to:Citibank, N.A.
325 East Hillcrest Drive, Suite 160
Thousand Oaks, California 91360
Attention: Operations Manager/AssetManager
Re: St. Regis Park Apartments
Deal ID No.__________
Facsimile: (805)557-0924
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prior to the Conversion Date, with a copy to:
Citibank, N.A.
388 Greenwich Street, 8th Floor
New York, New York 10013
Attention: Account Specialist
Re: St. Regis Park Apartments
Deal ID No.__________
Facsimile: (212)723-8209
following the Conversion Date with a copy to:
Citibank, N.A.
c/o Berkadia Commercial Servicing Department
323 Norristown Road, Suite 300
Ambler, Pennsylvania 19002
Attention: Client Relations Manager
Re: St. Regis Park Apartments
Deal ID No.__________
Facsimile: (215)328-0305
and a copy of any notices of default sent to:
Citibank, N.A.
388 Greenwich Street, 17th Floor
New York, New York 10013
Attention: General Counsel’sOffice
Re: St. Regis Park Apartments
Deal ID No.__________
Facsimile: (212)723-8939
Any party may change such party’s address for the notice or demands required under this
Borrower Loan Agreement by providing written notice of such change of address to the other parties
by written notice as provided herein.
Section 10.2Brokers and Financial Advisors. The Borrower hereby represents that it
has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in
connection with the Borrower Loan, other than those disclosed to the Funding Lender and whose fees
shall be paid by the Borrower pursuant to separate agreements. The Borrower and the Funding
Lender shall indemnify and hold the other harmless from and against any and all claims, liabilities,
costs and expenses of any kind in any way relating to or arising from a claim by any Person that such
Person acted on behalf of the indemnifying party in connection with the transactions contemplated
herein. The provisions of this Section10.2 shall survive the expiration and termination of this
Borrower Loan Agreement and the repayment of the Borrower Payment Obligations.
Section 10.3Survival. This Borrower Loan Agreement and all covenants, agreements,
representations and warranties made herein and in thecertificates delivered pursuant hereto shall
survive the making by the Governmental Lender of the Borrower Loan and the execution and
delivery to the Governmental Lender of the Borrower Notes and the assignment of the Borrower
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Notes to the Funding Lender,and shall continue in full force and effect so long as all or any of the
Borrower Payment Obligations is unpaid. All the Borrower’s covenants and agreements in this
Borrower Loan Agreement shall inure to the benefit of the respective legal representatives,
successors and assigns of the Governmental Lender, the Fiscal Agent, the Funding Lender and the
Servicer.
Section 10.4Preferences. The Governmental Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by the Borrower to any portion
of the Borrower Payment Obligations. To the extent the Borrower makes a payment to the
Governmental Lender or the Servicer, or the Governmental Lender or the Servicer receives proceeds
of any collateral, which is in whole or part subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such
paymentor proceeds received, the Borrower Payment Obligations or part thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not
been received by the Governmental Lender or the Servicer.
Section 10.5Waiverof Notice. The Borrower shall not be entitled to any notices of any
nature whatsoever from the Funding Lender, the Fiscal Agent or the Servicer except with respect to
matters for which this Borrower Loan Agreement or any other Borrower Loan Document specifically
and expressly provides for the giving of notice by the Funding Lender, the Fiscal Agent or the
Servicer, as the case may be, to the Borrower and except with respect to matters for which the
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice.
The Borrower hereby expressly waives the right to receive any notice from the Funding Lender, the
Fiscal Agent or the Servicer, as the case may be, with respect to any matter for which no Borrower
Loan Document specifically and expressly provides for the giving of notice by the Funding Lender,
the Fiscal Agent or the Servicer to the Borrower.
Section 10.6Offsets, Counterclaims and Defenses. The Borrower hereby waives the
right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by the Funding Lender or the Servicer with respect to a Borrower Loan Payment.
Any assignee of Funding Lender’s interest in and to the Borrower Loan Documents or the Funding
Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses that are
unrelated to the Borrower Loan Documents or the Funding Loan Documents which the Borrower
may otherwise have against any assignor of such documents, and no such unrelated offset,
counterclaim or defense shall be interposed or asserted by the Borrower in any action or proceeding
brought by any such assignee upon such documents, and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in anysuch action or proceeding is hereby expressly
waived by the Borrower.
Section 10.7Publicity. The Funding Lender and the Servicer (and any Affiliates of either
party) shall have the right to issue press releases, advertisements and other promotional materials
describing the Funding Lender’s or the Servicer’s participation in the making of the Borrower Loan
or the Borrower Loan’s inclusion in any Secondary Market Transaction effectuated by the Funding
Lender or the Servicer or one of its or their Affiliates. All news releases, publicity or advertising by
the Borrower or Borrower Affiliates through any media intended to reach the general public, which
refers to the Borrower Loan Documents or the Funding Loan Documents, the Borrower Loan, the
Funding Lender or the Servicer in a Secondary Market Transaction, shall be subject to the prior
Written Consent of the Funding Lender or the Servicer, as applicable.
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Section 10.8Construction of Documents. The parties hereto acknowledge that they were
represented by counsel in connection with the negotiation and drafting of the Borrower Loan
Documents and the Funding Loan Documents and that the Borrower Loan Documents and the
Funding Loan Documents shall not be subject to the principle of construing their meaning against the
party that drafted them.
Section 10.9No Third Party Beneficiaries. The Borrower Loan Documents and the
Funding Loan Documents are solely for the benefit of the Governmental Lender, the Funding
Lender, the Servicer, the Fiscal Agent and the Borrower and, with respect to Sections 9.1.3 and9.1.4
hereof, the Underwriter Group, and nothing contained in any Borrower Loan Document shall be
deemed to confer upon anyone other than the Governmental Lender, the Funding Lender, the Fiscal
Agent, the Servicer, and the Borrower any right to insist upon or to enforce the performance or
observance of any of the obligations contained therein.
Section 10.10Assignment. The Borrower Loan, the Security Instrument, the Borrower
Loan Documents and the Funding Loan Documents and all Funding Lender’s or Fiscal Agent’s
rights, title, obligations and interests therein may be assigned by the Funding Lender or the Fiscal
Agent, as appropriate, at any time in its sole discretion, whether by operation of law (pursuant to a
merger or other successor in interest) or otherwise, subject in any event to the provisions of
Section2.4 of the Funding Loan Agreement. Upon such assignment, all references to Funding
Lender or the Fiscal Agent, as appropriate, in this Borrower Loan Agreement and in any Borrower
Loan Document shall be deemed torefer to such assignee or successor in interest and such assignee
or successor in interest shall thereafter stand in the place of the Funding Lender or the Fiscal Agent,
as appropriate. The Borrower shall accord full recognition to any such assignment, and all rights and
remedies of Funding Lender in connection with the interest so assigned shall be as fully enforceable
by such assignee as they were by Funding Lender before such assignment. In connection with any
proposed assignment, Funding Lender may disclose to the proposed assignee any information that
the Borrower has delivered, or caused to be delivered, to Funding Lender with reference to the
Borrower, General Partner, Guarantor or any Borrower Affiliate, or the Project, including
information that the Borrower is required to deliver to Funding Lender pursuant to this Borrower
Loan Agreement, provided that such proposed assignee agrees to treat such information as
confidential. The Borrower may not assign its rights, interests or obligations under this Borrower
Loan Agreement or under any of the Borrower Loan Documents or Funding Loan Documents, or the
Borrower’s interest in any moneys to be disbursed or advanced hereunder, except only as may be
expressly permitted hereby.
Section 10.11\[Reserved\].
Section 10.12Governmental Lender, Funding Lender and Servicer Not in Control; No
Partnership. None of the covenants or other provisions contained in this Borrower Loan Agreement
shall, or shall be deemed to, give the Governmental Lender, the Funding Lender, the Fiscal Agent or
the Servicer the right or power to exercise control over the affairs or management of the Borrower,
the power of the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer being
limited to the rights to exercise the remedies referred to in the Borrower Loan Documents and the
Funding Loan Documents. The relationship between the Borrower and the Governmental Lender,
the Funding Lender, the Fiscal Agent and the Servicer is, and at all times shall remain, solely that of
debtor and creditor. No covenant or provision of the Borrower Loan Documents or the Funding
Loan Documents is intended, nor shall it be deemed or construed, to create a partnership, joint
venture, agency or common interest in profits or income between the Borrower and the
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Governmental Lender, the Funding Lender, the Fiscal Agent or the Servicer or to create an equity
interest in the Project in the Governmental Lender, the Funding Lender, the Fiscal Agent or the
Servicer. Neither the Governmental Lender, the Funding Lender, the Fiscal Agent nor the Servicer
undertakes or assumes any responsibility or duty to the Borrower or to any other person with respect
to the Project or the Borrower Loan, except as expressly provided in the Borrower Loan Documents
or the Funding Loan Documents;and notwithstanding any other provision of the Borrower Loan
Documents and the Funding Loan Documents: (1)the Governmental Lender, the Funding Lender,
the Fiscal Agent and the Servicer are not, and shall not be construed as, a partner, joint venturer, alter
ego, manager, controlling person or other business associate or participant of any kind of the
Borrower or its stockholders, members, or partners and the Governmental Lender, the Funding
Lender, the Fiscal Agent and the Servicer do not intend to ever assume such status; (2)the
Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer shall in no event be
liable for any the Borrower Payment Obligations, expenses or losses incurred or sustained by the
Borrower; and (3)the Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer
shall not be deemed responsible for or a participant in any acts, omissions or decisions of the
Borrower, the Borrower Controlling Entities or its stockholders, members, or partners. The
Governmental Lender, the Funding Lender, the Fiscal Agent and the Servicer and the Borrower
disclaim any intention to create any partnership, joint venture, agency or common interest in profits
or income between the Governmental Lender, the Funding Lender, the Servicer, the Fiscal Agent and
the Borrower, or to create an equity interest in the Project in the Governmental Lender, the Funding
Lender, the Fiscal Agent or the Servicer, or any sharing of liabilities, losses, costs or expenses.
Section 10.13Release. The Borrower hereby acknowledges that it is executing this
Borrower Loan Agreement and each of the Borrower Loan Documents and the Funding Loan
Documents to which it is a party as its own voluntary act free from duress and undue influence.
Section 10.14Term of Borrower Loan Agreement. This Borrower Loan Agreement shall
be in full force and effect until all payment obligations of the Borrower hereunder have been paid in
full and the Borrower Loan and the Funding Loan have been retired or the payment thereof has been
provided for; except that on and after payment in full of the Borrower Notes, this Borrower Loan
Agreement shall be terminated, without further action by the parties hereto; provided, however, that
the obligations of the Borrower under Sections5.11, 5.14, 5.15, 9.1.3, 9.1.4, 9.1.5, 9.1.6 and 10.15
hereof, as well as under Section5.7 of the Construction Funding Agreement, shall survive the
termination of this Borrower Loan Agreement.
Section 10.15Reimbursement of Expenses. If, upon or after the occurrence of any Event
of Default or Potential Default, the Governmental Lender, the Funding Lender, the Fiscal Agent or
the Servicer shall employ attorneys or incur other expenses for the enforcement of performance or
observance of any obligation or agreement on the part of the Borrower contained herein, the
Borrower will on demand therefor reimburse the Governmental Lender, the Funding Lender, the
Fiscal Agent and the Servicer for fees of such attorneys and such other expenses so incurred.
The Borrower’s obligation to pay the amounts required to be paid under this Section10.15
shall be subordinate to its obligations to make payments under the Borrower Notes.
Section 10.16Permitted Contests. Notwithstanding anything to the contrary contained in
this Borrower Loan Agreement, Borrower shall have the right to contest or object in good faith to
any claim, demand, levy or assessment (other than in respect of Debt or Contractual Obligations of
Borrower under any Borrower Loan Document or Related Document) by appropriate legal
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proceedings that are not prejudicial to Funding Lender’s rights, but this shall not be deemed or
construed as in any way relieving, modifying or providing any extension of time with respect to
Borrower’s covenant to pay and comply with any such claim, demand, levy or assessment, unless
Borrower shall have given prior Written Notice to the Funding Lender of Borrower’s intent to so
contest or object thereto, and unless (i)Borrower has, in the Funding Lender’s judgment, a
reasonable basis for such contest, (ii)Borrower pays when due any portion of the claim, demand,
levy or assessment to which Borrower does not object, (iii)Borrower demonstrates to Funding
Lender’s satisfaction that such legal proceedings shall conclusively operate to prevent enforcement
prior to final determination of such proceedings, (iv)Borrower furnishes such bond, surety,
undertaking or other security in connection therewith as required by law, or as requested by and
satisfactory to Funding Lender, to stay such proceeding, which bond, surety, undertaking or other
security shall be issued by a bonding company, insurer or surety company reasonably satisfactory to
Funding Lender and shall be sufficient to cause the claim, demand, levy or assessment to be insured
against by the Title Company or removed as a lien against the Project, (v)Borrower at all times
prosecutes the contest with due diligence, and (vi)Borrower pays, promptly following a
determination of the amount of such claim, demand, levy or assessment due and owing by Borrower,
the amount so determined to be due and owing by Borrower. In the event that Borrower does not
make, promptly following a determination of the amount of such claim, demand, levy or assessment
due and owing by Borrower, any payment required to be made pursuant to clause(vi) of the
preceding sentence, an Event of Default shall have occurred, and Funding Lender may draw or
realize upon any bond or other security delivered to Funding Lender in connection with the contest
by Borrower, in order to make such payment.
Section 10.17Funding Lender Approval of Instruments and Parties. All proceedings
taken in accordance with transactions provided for herein, and all surveys, appraisals and documents
required or contemplated by this Borrower Loan Agreement and the persons responsible for the
execution and preparation thereof, shall be satisfactory to and subject to approval by Funding Lender.
Funding Lender’s approval of any matter in connection with the Project shall be for the sole purpose
of protecting the security and rights of Funding Lender. No such approval shall result in a waiver of
any default of Borrower. In no event shall Funding Lender’s approval be a representation of any
kind with regard to the matter being approved.
Section 10.18Funding Lender Determination of Facts. Funding Lender shall at all times
be free to establish independently, to its reasonable satisfaction, the existence or nonexistence of any
fact or facts, the existence or nonexistence of which is a condition of this Borrower Loan Agreement.
Section 10.19Calendar Months. With respect to any payment or obligation that is due or
required to be performed within a specified number of Calendar Months after a specified date, such
payment or obligation shall become due on the day in the last of such specified number of Calendar
Months that corresponds numerically to the date so specified; provided, however, that with respect to
any obligation as to which such specified date is the 29th, 30th or 31st day of any Calendar Month:
if the Calendar Month in which such payment or obligation would otherwise become due does not
havea numerically corresponding date, such obligation shall become due on the first day of the next
succeeding Calendar Month.
Section 10.20Determinations by Lender. Except to the extent expressly set forth in this
Borrower Loan Agreement to the contrary, in any instancewhere the consent or approval of the
Governmental Lender and the Funding Lender may be given or is required, or where any
determination, judgment or decision is to be rendered by the Governmental Lender and the Funding
74
Lender under this Borrower Loan Agreement, the granting, withholding or denial of such consent or
approval and the rendering of such determination, judgment or decision shall be made or exercised
by the Governmental Lender and the Funding Lender, as applicable (or its designated representative)
at its sole and exclusive option and in its sole and absolute discretion.
Section 10.21Governing Law. This Borrower Loan Agreement shall be governed by and
enforced in accordance with the laws of the State, without giving effect to the choice of law
principles of the State that would require the application of the laws of a jurisdiction other than the
State.
Section 10.22Consent to Jurisdiction and Venue. Borrower agrees that any controversy
arising under or in relation to this Borrower Loan Agreement shall be litigated exclusively in the
State. The state and federal courts and authorities with jurisdiction in the State shall have exclusive
jurisdiction over all controversies which shall arise under or in relation to this Borrower Loan
Agreement. Borrower irrevocably consentsto service, jurisdiction, and venue of such courts for any
such litigation and waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise. However, nothing herein is intended to limit Beneficiary Parties’
right to bring any suit, action or proceeding relating to matters arising under this Borrower Loan
Agreement against Borrower or any of Borrower’s assets in any court of any other jurisdiction.
Section 10.23Successors and Assigns. This Borrower Loan Agreement shall bebinding
upon and shall inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors, successors-in-interest and assigns, as appropriate. The terms used to
designate any of the parties herein shall be deemed to include the heirs, legal representatives,
successors, successors-in-interest and assigns, as appropriate, of such parties. References to a
“person” or “persons” shall be deemed to include individuals and entities.
Section 10.24Severability. The invalidity, illegalityor unenforceability of any provision
of this Borrower Loan Agreement shall not affect the validity, legality or enforceability of any other
provision, and all other provisions shall remain in full force and effect.
Section 10.25Entire Agreement; Amendment and Waiver.This Borrower Loan
Agreement contains the complete and entire understanding of the parties with respect to the matters
covered. This Borrower Loan Agreement may not be amended, modified or changed, nor shall any
waiver of any provision hereof be effective, except by a written instrument signed by the party
against whom enforcement of the waiver, amendment, change, or modification is sought, and then
only to the extent set forth in that instrument. No specific waiver of any of the terms of this
Borrower Loan Agreement shall be considered as a general waiver. Without limiting the generality
of the foregoing, no Disbursement shall constitute a waiver of any conditions to the Governmental
Lender’s or the Funding Lender’s obligation to make further Disbursements nor, in the event
Borrower is unable to satisfy any such conditions, shall any such waiver have the effect of precluding
the Governmental Lender or the Funding Lender from thereafter declaring such inability to constitute
a Potential Default or Event of Default under this Borrower Loan Agreement.
Section 10.26Counterparts. This Borrower Loan Agreement may be executed in multiple
counterparts, each of which shall constitute an original document and all of which together shall
constitute one agreement.
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Section 10.27Captions. Thecaptions of the sections of this Borrower Loan Agreement are
for convenience only and shall be disregarded in construing this Borrower Loan Agreement.
Section 10.28Servicer. Borrower hereby acknowledges and agrees that, pursuant to the
terms of Section39 of the Security Instrument: (a)from time to time, the Governmental Lender or
the Funding Lender may appoint a servicer to collect payments, escrows and deposits, to give and to
receive notices under the Borrower Notes, this Borrower Loan Agreement or the other Borrower
Loan Documents, and to otherwise service the Borrower Loan and (b)unless Borrower receives
Written Notice from the Governmental Lender or the Funding Lender to the contrary, any action or
right which shall or may be taken or exercised by the Governmental Lender or the Funding Lender
may be taken or exercised by such servicer with the same force and effect.
Section 10.29Beneficiary Parties as Third Party Beneficiary. Each of the Beneficiary
Parties shall be a third party beneficiary of this Borrower Loan Agreementfor all purposes.
Section 10.30Waiver of Trial by Jury. TO THE MAXIMUM EXTENT PERMITTED
UNDER APPLICABLE LAW, EACH OF BORROWER AND THE BENEFICIARY PARTIES
(A)COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO
ANY ISSUE ARISING OUT OF THIS BORROWER LOAN AGREEMENT OR THE
RELATIONSHIP BETWEEN THE PARTIES THAT IS TRIABLE OF RIGHT BY A JURY AND
(B)WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE
EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
IF FOR ANY REASON THIS WAIVER IS DETERMINED TO BE UNENFORCEABLE,
ALL DISPUTES WILL BE RESOLVED BY JUDICIAL REFERENCE PURSUANT TO THE
PROCEDURES SET FORTH IN THE SECURITY INSTRUMENT.
Section 10.31Time of the Essence. Time is of the essence with respect to this Borrower
Loan Agreement.
Section 10.32\[Reserved\].
Section 10.33Reference Date. This Borrower Loan Agreement is dated for reference
purposes only as of the first day of ___________2019, and will not be effective and binding on the
parties hereto unless and until the Closing Date (as defined herein) occurs.
ARTICLE XI
LIMITATIONS ON LIABILITY
Section 11.1Limitation on Liability. Notwithstanding anything to the contrary herein,
the liability of the Borrower hereunder and under the other Borrower Loan Documents and the
Funding Loan Documents shall be limited to the extent set forth in the Borrower Notes.
Section 11.2Limitation on Liability of Governmental Lender. The Governmental
Lender shall not be obligated to paythe principal (or prepayment price) of or interest on the Funding
Loan, except from moneys and assets received by the Fiscal Agent or the Funding Lender on behalf
76
of the Governmental Lender pursuant to this Borrower Loan Agreement. Neither the faith and credit
nor the taxing power of the State, or any political subdivision thereof, nor the faith and credit of the
Governmental Lender is pledged to the payment of the principal (or prepayment price) of or interest
on the Funding Loan. The Governmental Lender shall not be liable for any costs, expenses, losses,
damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of
or in connection with this Borrower Loan Agreement or the Funding Loan Agreement, except only to
theextent amounts are received for the payment thereof from the Borrower under this Borrower Loan
Agreement.
The Borrower hereby acknowledges that the Governmental Lender’s sole source of moneys
to repay the Funding Loan will be provided by the payments madeby the Borrower pursuant to this
Borrower Loan Agreement, together with investment income on certain funds and accounts held by
the Fiscal Agent under the Funding Loan Agreement, and hereby agrees that if the payments to be
made hereunder shall ever proveinsufficient to pay all principal (or prepayment price) of and interest
on the Funding Loan as the same shall become due (whether by maturity, redemption, acceleration or
otherwise), then upon notice from the Fiscal Agent, the Funding Lender or the Servicer, the
Borrower shall pay such amounts as are required from time to time to prevent any deficiency or
default in the payment of such principal (or prepayment price) of or interest on the Funding Loan,
including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or malfeasance
on the part of the Fiscal Agent, the Funding Lender, the Borrower, the Governmental Lender or any
third party, subject to any right of reimbursement from the Fiscal Agent, the Funding Lender, the
Governmental Lender or any such third party, as the case may be, therefor.
Section 11.3Waiver of Personal Liability. No commissioner, member, officer, agent or
employee of the Governmental Lender shall be individually or personally liable for the payment of
any principal (or prepayment price) of or interest on the Funding Loan or any other sum hereunder or
be subject to any personal liability or accountability by reason of the execution and delivery of this
Borrower Loan Agreement; but nothing herein contained shall relieve any such member, director,
officer, agent or employee from the performance of any official duty provided by law or by this
Borrower Loan Agreement.
Section 11.4Limitation on Liability of Governmental Lender’s or Funding Lender’s
Commissioners, Officers, Employees, Etc.
(a)Borrower assumes all risks of the acts or omissions of the Governmental
Lender and the Funding Lender, provided, however, this assumption is not intended to, and shall not,
preclude the Borrower from pursuing such rights and remedies as it may have against the
Governmental Lender and the Funding Lender at law or under any other agreement. None of
Governmental Lender, the Fiscal Agent and the Funding Lender, nor the other Beneficiary Parties or
their respective commissioners, officers, directors, employees or agents shall be liable or responsible
for (i)for any acts or omissions of the Governmental Lender and the Funding Lender; or (ii)the
validity, sufficiency or genuineness of any documents, or endorsements, even if such documents
should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged. In
furtherance and not in limitation of the foregoing, the Governmental Lender and the Funding Lender
may accept documents that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, unless acceptance in light of
such notice or information constitutes gross negligence or willful misconduct on the part of the
Funding Lender, or willful misconduct of the Governmental Lender.
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(b)None of the Governmental Lender, the Fiscal Agent, the Funding Lender, the
other Beneficiary Parties or any of their respective commissioners, officers, directors, employees or
agents shall be liable to any contractor, subcontractor, supplier, laborer, architect, engineer or any
other party for services performed or materials supplied in connection with the Project. The
Governmental Lender and the Funding Lender shall not be liable for any debts or claims accruing in
favor of any such parties against the Borrower or others or against the Project. Borrower is not and
shall not be an agent of the Governmental Lender and the Funding Lender for any purpose. Neither
the Governmental Lender nor the Funding Lender is a joint venture partner with Borrower in any
manner whatsoever. Prior to default by Borrower under this Borrower Loan Agreement and the
exercise of remedies granted herein, the Governmental Lender and the Funding Lender shall not be
deemed to be in privity of contract with any contractor or provider of services to the Project, nor shall
any payment of funds directly to a contractor, subcontractor or provider of services be deemed to
create any third party beneficiary status or recognition of same by the Governmental Lender and the
Funding Lender. Approvals granted by the Governmental Lender and the Funding Lender for any
matters covered under this Borrower Loan Agreement shall be narrowly construed to cover only the
parties and facts identified in any written approval or, if not in writing, such approvals shall be solely
for the benefit of Borrower.
(c)Any obligation or liability whatsoever of the Governmental Lender and the
Funding Lender that may arise at any time under this Borrower Loan Agreement or any other
Borrower Loan Document shall be satisfied, if at all, out of the Funding Lender’s assets only. No
such obligation or liability shall be personally binding upon, nor shall resort for the enforcement
thereof be had to, the Project or any of the Governmental Lender’s or the Funding Lender’s
shareholders (if any), directors, officers, employees or agents, regardless of whether such obligation
or liability is in the nature of contract, tort or otherwise.
Section 11.5Delivery of Reports, Etc. The delivery of reports, information and
documentsto the Governmental Lender and the Funding Lender as provided herein is for
informational purposes only and the Governmental Lender’s and the Funding Lender’s receipt of
such shall not constitute constructive knowledge of any information contained thereinor
determinable from information contained therein. The Governmental Lender and the Funding
Lender shall have no duties or responsibilities except those that are specifically set forth herein, and
no other duties or obligations shall be implied in this Borrower Loan Agreement against the
Governmental Lender and the Funding Lender.
\[Remainder of Page Intentionally Left Blank\]
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Borrower
Loan Agreement by their respective authorized representative, as of the date first set forth above.
BORROWER:
St. Regis Park CIC, LP,
a California limited partnership
By:Pacific Southwest Community Development Corporation,
a California nonprofit public benefit corporation,
its Managing General Partner
By:________________________________
Robert Laing
President and Executive Director
By:CIC St. Regis Park, LLC,
a California limited liability company,
its Administrative General Partner
By:Chelsea Investment Corporation,
a California corporation, its Manager
By:___________________________
Cheri Hoffman, President
(signatures follow on subsequent page)
\[Signature Page to Borrower Loan Agreement –St. Regis Park Apartments\]
S-1
GOVERNMENTAL LENDER:
CHULA VISTA HOUSING AUTHORITY
By:
Executive Director
Agreed to and Acknowledged by:
FUNDING LENDER:
CITIBANK, N.A.
By:
Authorized Signatory
\[Signature Page to Borrower Loan Agreement –St. Regis Park Apartments\]
S-2
Stradling Yocca Carlson & Rauth
Draft dated March 5, 2019
Recording Requested By and
When Recorded Mail To:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Bradley R. Neal, Esq.
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
By and Between
CHULA VISTA HOUSING AUTHORITY
and
ST. REGIS PARK CIC, LP
a California limited partnership
_________________________
Dated as of __________ 1, 2019
_________________________
Relating to:
$______________
CHULA VISTA HOUSING AUTHORITY
MULTIFAMILY HOUSING REVENUE NOTE
(ST. REGIS PARK APARTMENTS) 2019 SERIES B-1
$______________
CHULA VISTA HOUSING AUTHORITY
MULTIFAMILY HOUSING REVENUE NOTE
(ST. REGIS PARK APARTMENTS) 2019 SERIES B-2
TABLE OF CONTENTS
Section 1.Definitions and Interpretation.......................................................................................2
Section 2.Representations, Covenants and Warranties of the Owner...........................................5
Section 3.Qualified Residential Rental Project.............................................................................5
Section 4.Low Income Tenants and Very Low Income Tenants; Reporting Requirements.........6
Section 5.Tax-Exempt Status of Notes.........................................................................................8
Section 6.Requirements of the Housing Law................................................................................9
Section 7.Requirements of the Governmental Lender................................................................10
Section 8.Modification of Covenants..........................................................................................11
Section 9.Indemnification; Other Payments...............................................................................11
Section 10.Consideration..............................................................................................................13
Section 11.Reliance.......................................................................................................................13
Section 12.Transfer of the Project................................................................................................13
Section 13.Term............................................................................................................................14
Section 14.Covenants to Run With the Land................................................................................15
Section 15.Burden and Benefit.....................................................................................................15
Section 16.Uniformity; Common Plan.........................................................................................16
Section 17.Default; Enforcement..................................................................................................16
Section 18.Recording and Filing...................................................................................................17
Section 19.Payment of Fees..........................................................................................................17
Section 20.Governing Law; Venue...............................................................................................18
Section 21.Amendments; Waivers................................................................................................18
Section 22.Notices........................................................................................................................18
Section 23.Severability.................................................................................................................19
Section 24.Multiple Counterparts.................................................................................................19
Section 25.Limitation on Liability................................................................................................19
Section 26.Third-Party Beneficiary..............................................................................................20
Section 27.Property Management.................................................................................................20
Section 28.Requirements of CDLAC...........................................................................................21
EXHIBITADESCRIPTION OF REAL PROPERTY
EXHIBITBFORM OF INCOME CERTIFICATION
EXHIBITCFORM OF CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
EXHIBITDCDLAC RESOLUTION
i
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS (as supplemented and amended from time to time, this “Regulatory Agreement”) is
made and entered into as of _________1, 2019, by and between the CHULA VISTA HOUSING
AUTHORITY, a public body, corporate and politic, duly organized and existing under the laws of
the State of California (together with any successor to its rights, duties and obligations, the
“Governmental Lender”), and ST. REGIS PARK CIC, LP, a California limited partnership, duly
organized, validly existing and in good standing under the laws of the State of California (together
with any successor to its rights, duties and obligations hereunder and as owner of the Project
identified herein, the “Owner”).
W I T N E S S E T H:
WHEREAS, pursuant to Chapter1 of Part2 of Division24 of the California Health and
Safety Code (as amended, the “Housing Law”), and the hereinafter defined FundingLoan
Agreement, the Governmental Lender has agreed to execute and deliver its Chula Vista Housing
Authority Multifamily Housing Revenue Note (St. Regis Park Apartments) 2019 Series B-1 (the
“Series B-1 Note”), and its Chula Vista Housing Authority Multifamily Housing Revenue Note (St.
Regis Park Apartments) 2019 Series B-2 (the “Series B-2 Note” and, together with the Series B-1
Note,” the “Governmental Lender Notes” or “Notes”) in the aggregate principal amount of
$___________________;
WHEREAS, the Notes will be executed and delivered pursuant to a Funding Loan
Agreement, dated as of ________1, 2019 (the “Funding Loan Agreement”), among the
Governmental Lender, Citibank, N.A., the Funding Lender (the “Funding Lender”) and U.S. Bank
National Association, asfiscal agent;
WHEREAS, the proceeds of the Notes will be used to fund loans (collectively, the “Borrower
Loan” as defined in the Funding Loan Agreement) to the Owner to finance the acquisition,
rehabilitation and equipping of the multifamily rental housing project known as St. Regis Park
Apartments, located on the real property site described in ExhibitA hereto (as further described
herein, the “Project”);
WHEREAS, in order to assure the Governmental Lender and the owners of the Notes that
interest on theNotes will be excluded from gross income for federal income tax purposes under
Section103 of the Internal Revenue Code of 1986 (the “Code”), and to satisfy the public purposes
for which the Notes are authorized to be executed and delivered under the Housing Law, and to
satisfy the purposes of the Governmental Lender in determining to execute and deliver the Notes,
certain limits on the occupancy of units in the Project need to be established and certain other
requirements need to be met;
NOW, THEREFORE, in consideration of the execution and delivery of the Notes by the
Governmental Lender and the mutual covenants and undertakings set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Governmental Lender and the Owner hereby agree as follows:
Section 1.Definitions and Interpretation. Unless the context otherwise requires, the
capitalized terms used herein shall have the respective meanings assigned to them in the recitals
hereto, in this Section1, or in the Funding Loan Agreement.
“Administrator”means the Governmental Lenderor any administrator or program monitor
appointed by the Governmental Lenderto administer this Regulatory Agreement, and any successor
administrator appointed by the Governmental Lender.
“Area”means the Metropolitan Statistical Area or County, as applicable, in which the Project
is located, as defined by the United States Department of Housing and Urban Development.
“Available Units”means residential units in the Project that are actually occupied and
residential units in the Project that are vacant and have been occupied at least once after becoming
available for occupancy, provided that (a)a residential unit that is vacant on the later of (i)the date
the Projectis acquired or (ii)the Closing Dateis not an Available Unit and does not become an
Available Unit until it has been occupied for the first time after such date, and (b)a residential unit
that is not available for occupancy due to renovations is not an Available Unit and does not become
an Available Unit until it has been occupied for the first time after the renovations are completed.
“CDLAC”means the California Debt Limit Allocation Committee or its successors.
“CDLAC Conditions”has the meaning givensuch term in Section28(a).
“CDLAC Resolution”means CDLAC Resolution No. 19-___attached hereto as ExhibitD,
adopted on March 20, 2019and relating to the Project, as such resolution may be modified or
amended from time to time.
“Certificate of Continuing Program Compliance”means the Certificate to be filed by the
Owner with the Administrator, on behalf of the Governmental Lender, pursuant to Section4(f)
hereof, which shall be substantially in the form attached as ExhibitC hereto or in such other
comparable form as may be provided by the Governmental Lenderto the Owner, or as otherwise
approved by the Governmental Lender.
“City”means the City of Chula Vista, California.
“Closing Date”means the date the Notes are originally executedand delivered.
“Compliance Period”means the period beginning on the first day of the Qualified Project
Period and ending on the later of the end of the Qualified Project Period or such later date as set forth
in Section28(c)of this Regulatory Agreement.
“County”means the County of San Diego, California.
“Deed of Trust” means the “Security Instrument” as defined in the Funding Loan Agreement,
as the same may be modified, amended or supplemented from time to time.
“Gross Income”means the gross income of a person (together with the gross income of all
persons who intend to reside with such person in one residential unit) as calculated in the manner
prescribed in under Section 8 of the Housing Act.
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“Housing Act”means the United States Housing Act of 1937, as amended, or its successor.
“Housing Law”means Chapter1 of Part2 of Division24 of the California Health and Safety
Code, as amended.
“Income Certification”means a Tenant Income Certification and a Tenant Income
Certification Questionnaire in the form attached as ExhibitB hereto or in such other comparable
form as may be provided by the Governmental Lenderto the Owner, or as otherwise approved by the
Governmental Lender.
“Investor Limited Partner”means Raymond James California Housing Opportunities Fund
VI L.L.C.,or any other successor entityor assigneein such entity’s capacity as anequity investor in
the Owner.
“Loan Agreement”means the “Borrower Loan Agreement”as defined in the Funding Loan
Agreement, as the same may be modified, amended or supplemented from time to time.
“Low Income Tenant”means a tenant occupying a Low Income Unit.
“Low Income Unit”means any Available Unit if the aggregate Gross Income of all tenants
therein does not exceed limits determined in a manner consistent with determinations of “low-income
families”under Section8 of the Housing Act, provided that the percentage of median gross income
that qualifies as low income hereunder shall be sixty percent (60%) of median gross income for the
Area, with adjustments for family size. A unit occupied by one or more students shall only constitute
a Low Income Unit if such students meet the requirements of Section142(d)(2)(C) of the Code. The
determination of an Available Unit’s status as a Low Income Unit shall be made by the Owner upon
commencement of each lease term with respect to such unit, and annually thereafter, on the basis of
an Income Certification executed by each tenant.
“Manager”means a property manager meeting the requirements of Section27hereof. CIC
Management, Inc., a California corporation,is hereby approved as the initial Manager.
“NoteownerRepresentative”or “Noteowner”means during any period in which theNotes
areoutstanding, the “Noteowner”under and as such term is defined in the Funding Loan Agreement.
If at any time the Notes are notoutstanding then there is no NoteownerRepresentative and references
herein to the NoteownerRepresentative are void and inapplicableand shall be disregarded.
“Project” means the 118-unit plus 1 manager’s unit multifamily rental housing development
located in the City of Chula Vista, San Diego County on the real property site described in Exhibit A
hereto, consisting of those facilities, including real property, structures, buildings, fixtures or
equipment situated thereon, as it may at any time exist, the acquisition, rehabilitationand equipping
of which facilities are to be financed, in whole or in part, from the proceeds ofthe sale of the Notes
or the proceeds of any payment by the Owner pursuant to the Loan Agreement, and any real
property, structures, buildings, fixtures or equipment acquired in substitution for, as a renewal or
replacement of, or a modification or improvement to, all or any part of the facilities described in the
Loan Agreement.
“Qualified Project Period” means the period beginning on the Closing Date and ending on the
later of (a)the date which is 55 years after the date on which fifty percent (50%) of the dwelling units
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in the Project are occupied, (b)the first day on which noTax-Exempt obligationswith respect to the
Project are Outstanding, or (c)the date on which any assistance provided with respect to the Project
under Section8 of the United States Housing Act of 1937 terminates.
“Regulations”means the Income Tax Regulations of the Department of the Treasury
applicable under the Code from time to time.
“Regulatory Agreement”means this Regulatory Agreement and Declaration of Restrictive
Covenants, as it may be supplemented and amended from time to time.
“Rental Payments”means the rental payments paid by the occupant of a unit, excluding any
supplemental rental assistance to the occupant from the State, the federal government, or any other
public agency, but including any mandatory fees or charges imposed on the occupant by the Owner
as a condition of occupancy of the unit.
“Tax-Exempt”means with respect to interest on any obligations of a state or local
government, including the Notes, that such interest is excluded from gross income for federal income
tax purposes; provided, however, that such interest may be includable as an item of tax preference or
otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including
any alternative minimum tax or environmental tax, under the Code.
“Tax Certificate”means the “Tax Certificate”as defined in the Funding Loan Agreement.
“TCAC” means the California Tax Credit Allocation Committee.
“Transfer”means the conveyance, assignment, sale or other disposition of all or any portion
of the Project; and shall also include, without limitation to the foregoing, the following: (1)an
installment sales agreement wherein Owner agrees to sell the Project or any part thereof for a price to
be paid in installments; and (2)an agreement by the Owner leasingall or a substantial part of the
Project to one or more persons or entities pursuant to a single or related transactions.
“Very Low Income Tenant” means a tenant occupying a Very Low Income Unit.
“Very Low Income Unit” means any Available Unit if the aggregate Gross Income of all
tenants therein does not exceed limits determined in a manner consistent with determinations of
“very low-income families” under Section8 of the Housing Act, provided that the percentage of
median gross income that qualifies as very low income hereunder shall be fifty percent (50%) of
median gross income for the Area, with adjustments for family size. A unit occupied by one or more
students shall only constitute a Very Low Income Unit if such students meet the requirements of
Section142(d)(2)(C) of the Code. The determination of an Available Unit's status as a Very Low
Income Unit shall be made by the Owner upon commencement of each lease term with respect to
such unit, and annually thereafter, on the basis of an Income Certification executed by each tenant.
Unless the context clearly requires otherwise, as used in this Regulatory Agreement, words of
any gender shall be construed to include each other gender when appropriate and words of the
singular number shall be construed to include the plural number, and vice versa, when appropriate.
This Regulatory Agreement and all the terms and provisions hereof shall be construed to effectuate
the purposes set forth herein and to sustain the validity hereof.
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The titles and headings of the sections of this Regulatory Agreement have been inserted for
convenience of reference only, and are not to be considered a part hereof and shall not in any way
modify or restrict any of the terms or provisions hereof or be considered or given any effect in
construing this Regulatory Agreement or any provisions hereof or in ascertaining intent, if any
question of intent shall arise.
The parties to this Regulatory Agreement acknowledge that each party and their respective
counsel have participated in the drafting and revision of this Regulatory Agreement. Accordingly, the
parties agree that any rule of construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in the interpretation of this Regulatory Agreement or any supplement or
exhibit hereto.
Section 2.Representations, Covenants and Warranties of the Owner.
(a)The Owner hereby incorporates herein, as if set forth in full herein, each of the
representations, covenants and warranties of the Owner contained in the Tax Certificate and the Loan
Agreement relating to the Project.
(b)The Owner hereby represents and warrants that the Projectis located entirely within
the City.
(c)The Owner acknowledges, represents and warrants that it understands the nature and
structure of the transactions contemplated by this Regulatory Agreement; that it is familiar with the
provisions of all of the documents and instruments relating to the Notes to which it is a party or of
which it is a beneficiary; that it understands the financial and legal risksinherent in such transactions;
and that it has not relied on the Governmental Lenderfor any guidance or expertise in analyzing the
financial or other consequences of such financing transactions or otherwise relied on the
Governmental Lenderin any mannerexcept to executing and deliveringthe Notes in order to provide
funds to assist the Owner in rehabilitatingand developing the Project.
Section 3.Qualified Residential Rental Project. The Owner hereby acknowledges and
agrees that the Projectis to be owned, managed and operated as a “residential rental project”(within
the meaning of Section142(d) of the Code) for a term equal to the Compliance Period. To that end,
and for the term of this Regulatory Agreement, the Owner hereby represents, covenants, warrants and
agrees as follows:
(a)The Projectwill be rehabilitated, developed and operated for the purpose of providing
multifamily residential rental property. The Owner will own, manage and operate the Projectas a
project to provide multifamily residential rental property comprised of a building or structure or
several interrelated buildings or structures, together with any functionally related and subordinate
facilities, and no other facilities, in accordance with Section142(d) of the Code, Section1.103-8(b)
of the Regulations and the provisions of the Housing Law, and in accordance with such requirements
as may be imposed thereby on the Projectfrom time to time.
(b)All of the dwelling units in the Project(except for not more than one unit set aside for
a resident manager or other administrative use) will be similarly constructed units, and each dwelling
unit in the Projectwill contain complete separate and distinct facilities for living, sleeping, eating,
cooking and sanitation for a single person or a family, including a sleeping area, bathing and
sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink.
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(c)None of the dwelling units in the Projectwill at any time be utilized on a transient
basis or rented for a period of less than 30 consecutive days, or will ever be used as a hotel, motel,
dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, rest
home or trailer court or park; provided that the use of certain units for tenant guests on an
intermittent basis shall not be considered transient use for purposes of this Regulatory Agreement.
(d)No part of the Projectwill at any time during the Compliance Period be owned by a
cooperative housing corporation, nor shall the Owner take any steps in connection with a conversion
to such ownership or use, and the Owner will not take any steps in connection with a conversion of
the Projectto condominium ownership during the Compliance Period (except that the Owner may
obtain final map approval and the Final Subdivision Public Report from the California Department of
Real Estate and may file a condominium plan with the City).
(e)All of the Available Units in the Projectwill be available for rental during the period
beginning on the date hereof and ending on the termination of the Compliance Period on a
continuous, “first-come, first-served”basis to members of the general public; which for purposes of
this Regulatory Agreement means the general population, and the Owner will not give preference to
any particular class or group in renting the dwelling units in the Project, except to the extent that
dwelling units are required to be leased or rented in such a manner that they constitute Low Income
Unitsor Very Low Income Units.
(f)The Projectconsists of a parcel or parcels that are contiguous except for the
interposition of a road, street or stream, and all of the facilities of the Projectcomprise a single
geographically and functionally integrated project for residential rental property, as evidenced by the
ownership, management, accounting and operation of the Project.
(g)No dwelling unit in the Projectshall be occupied by the Owner; provided, however,
that if the Projectcontains five or more dwelling units, this provision shall not be construed to
prohibit occupancy of not more than one dwelling unit by a resident manager or maintenance
personnel, any of whom may be the Owner.
Section 4.Low Income Tenantsand Very Low Income Tenants; Reporting
Requirements. Pursuant to the requirements of the Code, the Owner hereby represents, warrants and
covenants as follows:
(a)During the Compliance Period, no less than 94of the total number of completed units
in the Projectshall at all times be Low Income Units and 24of the total number of completed units in
the Projectshall at all times be Very Low Income Units. For the purposes of this paragraph (a), a
vacant unit that was most recently a Low Income Unit or Very Low Income Unit is treated as a Low
Income Unit or Very Low Income Unit, respectively, until reoccupied, other than for a temporary
period of not more than 31 days, at which time the character of such unit shall be redetermined.
(b)No tenant qualifying as a Low Income Tenant or Very Low Income Tenant upon
initial occupancy shall be denied continued occupancy of a unit in the Projectbecause, after
admission, the aggregate Gross Income of all tenants in the unit occupied by such Low Income
Tenant or Very Low Income Tenant, respectively, increases to exceed the qualifying limit for a Low
Income Unit or Very Low Income Unit, respectively. However, should the aggregate Gross Income
of tenants in a Low Income Unit or Very Low Income Unit as of the most recent determination
thereof, exceed one hundred forty percent (140%) of the applicable income limit for a Low Income
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Unit or Very Low Income Unit, respectively, occupied by the same number of tenants, the next
available unit of comparable or smaller size must be rented to (or held vacant and available for
immediate occupancy by) Low Income Tenant(s) or Very Low Income Tenant(s), respectively. The
unit occupied by such tenants whose aggregate Gross Income exceeds such applicable income limit
shall continue to be treated as a Low Income Unit or Very Low Income Unit for purposes of the
requirementsof Section4(a) hereof unless and until an Available Unit of comparable or smaller size
is rented to persons other than Low Income Tenants or Very Low Income Tenants, respectively.
(c)For the Compliance Period, the Owner will obtain, complete and maintain on file
Income Certifications for each Low Income Tenant and Very Low Income Tenant, including (i)an
Income Certification dated immediately prior to the initial occupancy of such Low Income Tenant or
Very Low Income Tenant in the unit and a second Income Certification dated one year after the Low
Income Tenant’s or Very Low Income Tenant’s initial move-in date, and (ii)thereafter, an annual
Income Certification with respect to each Low Income Tenant and Very Low Income Tenant. In lieu
of obtaining the annual Income Certifications required by clause (ii) of the preceding sentence, the
Owner may, with respect to any particular twelve-month period ending November 1, deliver to the
Administrator no later than fifteen days after such date a certification that as of November 1, no
residential unit in the Projectwas occupied within the preceding twelve months by a new resident
whose income exceeded the limit applicable to Low Income Tenants or Very Low Income upon
admission to the Project. The Administrator may at any time and in its sole and absolute discretion
notify the Owner in writing that it will no longer accept certifications of the Owner made pursuant to
the preceding sentence and that the Owner will thereafter be required to obtain annual Income
Certifications for tenants. The Owner will also provide such additional information as may be
required in the future by the Code, the State or the Governmental Lender, as the same may be
amended from time to time, or in such other form and manner as may be required by applicable rules,
rulings, policies, procedures, Regulations or other official statements now or hereafter promulgated,
proposed or made by the Department of the Treasury or theInternal Revenue Service with respect to
Tax-Exempt obligations. Upon request of the Administrator or the Governmental Lender, copies of
Income Certifications for Low Income Tenants and Very Low Income Tenants commencing or
continuing occupation of a LowIncome Unit or Very Low Income Unit, respectively, shall be
submitted to the Administrator or the Governmental Lender, as requested.
(d)The Owner shall make a good faith effort to verify that the income information
provided by an applicant 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 three most recent
pay periods, (2)obtain an income tax return for the most recent tax year, (3)obtain a credit report or
conduct a similar type credit search, (4)obtain an income verification from the applicant’s current
employer, (5)obtain an income verification 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 does not have an income tax return, obtain
another form of independent verification reasonably acceptable to the Governmental Lender.
(e)The Owner will maintain complete and accurate records pertaining to the Low
Income Unitsand Very Low Income Units, and will permit any duly authorized representative of the
Governmental Lender, the Department of the Treasury or the Internal Revenue Service to inspect the
books and records of the Owner pertaining to the Project, including those records pertaining to the
occupancy of the Low Income Unitsand Very Low Income Units.
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(f)The Owner will prepare and submit to the Administrator, on behalf of the
Governmental Lender, not less than annually, commencing not less than one year after the Closing
Date, a Certificate of Continuing Program Compliance executed by the Owner in substantially the
form attached hereto as ExhibitC. During the Compliance Period, the Owner shall submit a
completed Internal Revenue Code Form 8703 or such other annual certification as required by the
Code with respect to the Project, to the Secretary of the Treasury on or before March31 of each year
(or such other date as may be required by the Code).
(g)For the Compliance Period, all tenant leases or rental agreements shall be subordinate
to this Regulatory Agreement and the Deed of Trust. All leases pertaining to Low Income Units or
Very Low Income Units shall contain clauses, among others, wherein eachtenant who occupies a
Low Income Unitor Very Low Income Unit: (i)certifies the accuracy of the statements made by
such tenant in the Income Certification; (ii)agrees that the family income and other eligibility
requirements shall be deemed substantialand material obligations of the tenancy of such tenant, that
such tenant will comply promptly with all requests for information with respect thereto from the
Owner, the Governmental Lenderor the Administrator on behalf of the Governmental Lender, and
that the failure to provide accurate information in the Income Certification or refusal to comply with
a request for information with respect thereto shall be deemed a violation of a substantial obligation
of the tenancy of such tenant; (iii)acknowledges that the Owner has relied on the statements made by
such tenant in the Income Certification and supporting information supplied by the Low Income
Tenant or Very Low Income Tenant in determining qualification for occupancy of a Low Income
Unitor Very Low Income Unit, respectively, and that any material misstatement in such certification
(whether or not intentional) will be cause for immediate termination of such lease or rental
agreement; and (iv)agrees that the tenant’s income is subject to annual certification in accordance
with Section4(c) and that if upon any such certification the aggregate Gross Income of tenants in
such unit exceeds the applicable income limit under Section4(b), the unit occupied by such tenant
may cease to qualify as a Low Income Unitor Very Low Income Tenant, respectively,and such
unit’s rent may be subject to increase.
For purposes of this Section4, no unit occupied by a residential manager shall be treated as a
rental unit during the time of such occupation.
Section 5.Tax-Exempt Status ofNotes. The Owner and the Governmental Lender, as
applicable, each hereby represents, warrants and agrees as follows:
(a)The Owner and the Governmental Lenderwill not knowingly take or permit, or omit
to take or cause to be taken, as is appropriate, any action that would adversely affect the Tax-Exempt
nature of the interest on the Notes and, if either of them should take or permit, or omit to take or
cause to be taken, any such action, it will take all lawful actions necessary to rescind or correct such
actions or omissions promptly upon obtaining knowledge thereof.
(b)The Owner and the Governmental Lenderwill file of record such documents and take
such other steps as are necessary, in the written opinion of Tax Counselfiled with the Governmental
Lender(witha copy to the Owner), in order to insure that the requirements and restrictions of this
Regulatory Agreement will be binding upon all owners of the Project, including, but not limited to,
the execution and recordation of this Regulatory Agreement in the real property records of the
County.
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Section 6.Requirements of the Housing Law. In addition to the other requirements set
forth herein, the Owner hereby agrees that it shall comply with each of the requirements of
Section52080 of the Housing Law, including the following:
(a)Not less than 94of the total number of units in the Projectshall be Low Income Units
and not less than 24of the total number of units in the Projectshall be Very Low Income Units. The
units made available to meet these requirements shall be of comparable quality and offer a range of
sizes and numbers of bedrooms comparable to the units that are available to other tenants in the
Project.
(b)The Rental Payments for the Low Income Units paid by the tenants thereof
(excluding any supplemental rental assistance from the State, the federal government or any other
public agency to those tenants or on behalf of those units) shall not exceed 30% of an amount equal
to 60% of the median adjusted gross income for the Area. The Rental Payments for the Very Low
Income Units paid by the tenants thereof (excluding any supplemental rental assistance from the
State, the federal government or any other public agency to those tenants or on behalf of those units)
shall not exceed 30% of an amount equal to 50% of the median adjusted gross income for the Area.
(c)The Owner shall accept as tenants, on the same basis as all other prospective tenants,
low-income persons who are recipients of federal certificates or vouchers for rent subsidies pursuant
to the existing program under Section8 of the Housing Act. The Owner shall not permit any
selection criteria to be applied to Section8 certificate or voucher holders that is more burdensome
than the criteria applied to all other prospective tenants.
(d)The units reserved for occupancy as required by Section4(a) shall remain available
on a priority basis for occupancy at all times on and after the Closing Date and continuing through
the Compliance Period.
(e)During the three (3) years prior to the expiration of the Compliance Period, the
Owner shall continue to make available, to eligible households, Low Income Units and Very Low
Income Units that have been vacated to the same extent that nonreserved units are made available to
noneligible households.
(f)Following the expiration or termination of the Compliance Period, except in the event
of foreclosure and payoffof the Notes, deed in lieu of foreclosure, eminent domain, or action of a
federal agency preventing enforcement, units reserved for occupancy as required by subsection (a) of
this Section shall remain available to any eligible tenant occupying a reserved unit at the date of such
expiration or termination, at the rent determined by subsection (b) of this Section, until the earliest of
(1)the household’s income exceeds 140% of the maximum eligible income specified above, (2)the
household voluntarily moves or is evicted for good cause (as defined in the Housing Law), (3)60
years after the date of the commencement of the Compliance Period, or (4)the Owner pays the
relocation assistance and benefits to households as provided in Section 7264(b) of the California
Government Code.
(g)Except as set forth in Section13 hereof, the covenants and conditions of this
Regulatory Agreement shall be binding upon successors in interest of the Owner.
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(h)This Regulatory Agreement shall be recorded in the office of the County recorder,
and shall be recorded in the grantor-grantee index under the name of the Owner as grantor and under
the name of the Governmental Lenderas grantee.
Section 7.Requirements of the Governmental Lender. In addition to other requirements
set forth herein and to the extent not prohibited by the requirements set forth in Sections 4 through 6
hereof, the Owner hereby agrees to comply with each of the requirements of the Governmental
Lenderset forth in this Section7, as follows:
(a)For the duration of the Compliance Period, notwithstanding any retirement of the
Notes or termination of the Loan Agreement, the Owner will pay to the Governmental Lenderall of
the amounts required to be paid by the Owner under the Loan Agreementand Section19hereofand
will indemnify the Governmental Lenderas provided in Section9 of this Regulatory Agreement.
(b)All tenant lists, applications and waiting lists relating to the Projectshall at all times
be kept separate and identifiable from any other business of the Owner and shall be maintained as
required by the Governmental Lender, in a reasonable condition for proper audit and subject to
examination during business hours by representatives of the Governmental Lenderupon reasonable
advance notice to the Owner.
(c)The Owner acknowledges that the Governmental Lenderhas appointed the
Administrator to administer this Regulatory Agreement and to monitor performance by the Owner of
the terms, provisions and requirements hereof. The Owner shall comply with any reasonable request
made by the Administrator or the Governmental Lenderto deliver to any such Administrator, in
addition to or instead of the Governmental Lender, any reports, notices or other documents required
to be delivered pursuant hereto, and to make the Projectand the books and records with respect
theretoavailable for inspection by the Administrator as an agent of the Governmental Lender. The
fees and expenses of the Administrator shall be paid by the Governmental Lender.
(d)For purposes of Section6(b), the base rents shall be adjusted for household size,
based upon the following unit sizes and household sizes:
Unit SizeHousehold Size
One BedroomOnePersons
Two BedroomsTwoPersons
Three BedroomsThree Persons
(e)Notwithstanding any other provisions of this Regulatory Agreement, in no event shall
all ofthe rent, including the portion paid by the Low Income Tenant and any other person or entity,
collected by Owner (the “Total Rent”) for any Low Income Unit exceed the amount of rent set forth
in this Regulatory Agreement. Total Rent includes all paymentsmade by the Low Income Tenant
and all subsidies received by Owner. In the case of Low Income Tenants receiving Section8
benefits, Owner acknowledges that it shall not accept any subsidy or payment that would cause the
Total Rent received for any Low Income Unit to exceed the maximum rents allowed by this
Regulatory Agreement for such Low Income Unit. Should Owner receive Total Rent in excess of the
allowable maximum rent set forth in this Regulatory Agreement for a Low Income Unit, Owner
agrees to immediately notify the Governmental Lenderand reimburse the Governmental Lenderfor
any such overpayment.
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Any of the foregoing requirements of the Governmental Lendercontained in this Section7
may be expressly waived by the Governmental Lender, in its sole discretion, in writing, but (i)no
waiver by the Governmental Lenderof any requirement of this Section7 shall, or shall be deemed to,
extend to or affect any other provision of this Regulatory Agreement except to the extent the
Governmental Lenderhas received an opinion of Tax Counselthat any such provision is not required
by the Housing Law and may be waived without adversely affecting the exclusion from gross income
of interest on the Notes for federal income tax purposes; and (ii)any requirement of this Section7
shall be void and of no force and effect if the Governmental Lenderand the Owner receive a written
opinion of Tax Counselto the effect that compliance with any such requirement would cause interest
on the Notes to cease to be Tax-Exempt or to the effect that compliance with such requirement would
be in conflict with the Housing Law or any other state or federal law.
Section 8.Modification of Covenants. The Owner and the Governmental Lenderhereby
agree as follows:
(a)To the extent any amendments to the Housing Law, the Regulations or the Code
shall, in the written opinion of Tax Counselfiled with the Governmental Lenderand the Owner,
retroactively impose requirements upon the ownership or operation of the Projectmore restrictive
than those imposed by this Regulatory Agreement, and if such requirements are applicable to the
Projectand compliance therewith is necessary to maintain the validity of, or the Tax-Exempt status
of interest on the Notes, this Regulatory Agreement shall be deemed to be automatically amended to
impose such additional or more restrictive requirements.
(b)To the extent that the Housing Law, the Regulations or the Code, or any amendments
thereto, shall, in the written opinion of Tax Counselfiled with the Governmental Lenderand the
Owner, impose requirements upon the ownership or operation of the Project less restrictive than
imposed by this Regulatory Agreement, this Regulatory Agreement may be amended or modified to
provide such less restrictive requirements but only by written amendment signed by the
Governmental Lender, at its sole discretion, and the Owner, with the consent of the Noteowner
Representative, and only upon receipt by the Governmental Lenderof the written opinion of Tax
Counselto the effect that such amendment will not affect the Tax-Exempt status of interest on the
Notes or violate the requirements of the Housing Law, and otherwise in accordance with Section21
hereof.
(c)The Ownerandthe Governmental Lendershall execute, deliver and, if applicable,
file of record any and all documents and instruments necessary to effectuate the intent of this
Section8.
Section 9.Indemnification; Other Payments. To the fullest extent permitted by law, the
Owner agrees to indemnify, hold harmless and defend the Governmental Lenderand each of its
officers, governing members, directors, officials, employees, attorneys, agents, and program
participants (collectively, the “Indemnified Parties”), against any and all losses, damages, claims,
actions, liabilities, costs and expenses of any conceivable nature, kind or character (including,
without limitation, reasonable attorneys’ feesand expenses, litigation and courtcosts, amounts paid
in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of
them, may become subject under or any statutory law (including federal or state securities laws) or at
common law or otherwise, arising out of or based upon or in any way relating to:
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(i)the Notes, the Funding Loan Agreement, the Loan Agreement, this
Regulatory Agreement, or the Tax Certificate and all documents related thereto, or the
execution or amendment hereof or thereof or in connectionwith transactions contemplated
hereby or thereby, including, as applicable, the execution and delivery or transfer of interests
in the Notes;
(ii)any act or omission of the Owner or any of its agents, contractors, servants,
employees or licensees in connection with the Loan or the Project, the operation of the
Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or
management of work done in or about, or from the planning, design, acquisition, installation,
construction orrehabilitation of, the Project or any part thereof;
(iii)any lien or charge upon payments by the Owner to the Governmental Lender
or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments,
impositions and other charges imposed on the Governmental Lenderin respect of any portion
of the Project;
(iv)any violation of any environmental law, rule or regulation with respect to, or
the release of any toxic substance from, the Project or any part thereof;
(v)the defeasance and/or redemption, in whole or in part, of the Notes;
(vi)any untrue statement or misleading statement or alleged untrue statement or
alleged misleading statement of a material fact contained in any offering statement or
disclosure document for the Notes or any of the documents relating to the Notes, or any
omission or alleged omission from any offering statement or disclosure document for the
Notes of any material fact necessary to be stated therein in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading; or
(vii)any declaration of taxability of interest on the Notes, or allegations (or
regulatory inquiry) that interest on the Notes is taxable for federal tax purposes;
except to the extent such damages are caused by the willful misconduct or gross negligence of such
Indemnified Party. In the event that any action or proceeding is brought against any Indemnified
Party with respect to which indemnity may be sought hereunder, the Owner, upon written notice
from the Indemnified Party, shall assume the investigation and defense thereof, including the
employment of counsel selected by the Indemnified Party, and shall assume the payment of all
expenses related thereto, with full power to litigate, compromise or settle the same in its sole
discretion; provided that the Indemnified Party shall have the right to review and approve or
disapprove any such compromise or settlement. Each Indemnified Party shall have the right to
employ separate counsel in any such action or proceeding and participate in the investigation and
defense thereof, and the Owner shall pay the reasonable fees and expenses of such separate counsel;
provided, however, that such Indemnified Party may only employ separate counsel at the expense of
the Owner if in the judgment of such Indemnified Party aconflict of interest exists by reason of
common representation or if all parties commonly represented do not agree as to the action (or
inaction) of counsel. In addition to the foregoing, the Owner shall pay upon demand all of the fees
and expenses paid or incurred by the Governmental Lenderin enforcing the provisions hereof.
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In addition thereto, the Owner will pay upon demand all of the fees and expenses paid or
incurred by the Governmental Lenderin enforcing the provisions hereof, as more fully set forth in
the Loan Agreement.
The provisions of this Section9 shall survive the final payment or defeasance of the Notes
and the term of this Regulatory Agreement.
Section 10.Consideration. The Governmental Lenderhas agreed to execute and deliver
the Notes to providefunds to lend to the Owner to finance the Project, all for the purpose, among
others, of inducing the Owner to acquire, construct, develop and operate the Project. In consideration
of the execution and deliveryof the Notes by the Governmental Lender, the Owner has entered into
this Regulatory Agreement and has agreed to restrict the uses to which this Project can be put on the
terms and conditions set forth herein.
Section 11.Reliance. The Governmental Lenderand the Owner hereby recognize and
agree that the representations and covenants set forth herein may be relied upon by all persons,
including but not limited to the Administrator, interested in the legality and validity of the Notes, in
the exemption from California personal income taxation of interest on the Notes and in the Tax-
Exempt status of the interest on the Notes. In performing their duties and obligations hereunder, the
Governmental Lender, the Administrator may rely upon statements and certificates of the Low
Income Tenants, and upon audits of the books and records of the Owner pertaining to the Project. In
addition, the Governmental Lendermay consult with counsel, and the opinion of such counsel shall
be full and complete authorization and protection in respect of any action taken or suffered by the
Governmental Lenderhereunder in good faith and in conformity with such opinion.
Section 12.Transfer of the Project. For the Compliance Period, the Owner shall not
Transfer the Project, in whole or in part, without the prior written consent of the Governmental
Lender, which consent shall not be unreasonably withheld or delayed if the following conditions are
satisfied: (A)the receipt by the Governmental Lenderof evidence acceptable to the Governmental
Lenderthat (1)the Owner shall not be in default hereunder or under the Loan Agreement, if in effect
(which may be evidenced by a Certificate of Continuing Program Compliance), or the transferee
undertakes to cure any defaults of the Owner to the reasonable satisfaction of the Governmental
Lender; (2)the continued operation of the Projectshall comply with the provisions of this Regulatory
Agreement; (3)either (a)the transferee or its Manager has at least three years’ experience in the
ownership, operation and management of similar size rental housing projects, and at least one year’s
experience in the ownership, operation and management of rental housing projects containing below-
market-rate units, without any record of material violations of discrimination restrictions or other
state or federal laws or regulations or local governmental requirements applicable to such projects, or
(b)the transferee agrees to retain a Manager with the experience and record described in subclause
(a) above, or (c) the transferring Owner or its management company will continue to manage the
Project, or another management company reasonably acceptable to the Governmental Lenderwill
manage, for at least one year following such Transfer and, if applicable, during such period the
transferring Owner or its management company will provide training to the transferee and its
manager in the responsibilities relating to the Low Income Units; and (4)the person or entity that is
to acquire the Project does not have pending against it, and does not have a history of significant and
material building code violations or complaints concerning the maintenance, upkeep, operation, and
regulatory agreement compliance of any of its projects as identified by any local, state or federal
regulatory agencies; (B)the execution by the transferee ofany document reasonably requested by the
Governmental Lenderwith respect to the assumption of the Owner’s obligations under this
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Regulatory Agreement and the Loan Agreement (if then in effect), including without limitation an
instrument of assumption hereof and thereof, and delivery to the Governmental Lenderof an opinion
of such transferee’s counsel to the effect that each such document and this Regulatory Agreement are
valid, binding and enforceable obligations of such transferee, subject to bankruptcyand other
standard limitations affecting creditor’s rights; (C)receipt by the Governmental Lenderof an opinion
of Tax Counselto the effect that any such Transfer will not adversely affect the Tax-Exempt status of
interest on the Notes; (D)receipt by the Governmental Lenderof all fees and/or expenses then
currently due and payable to the Governmental Lenderby the Owner; and (E)receipt by the
Governmental Lenderof evidence of satisfaction of compliance with the provisions of
Section28(d)(i) related to notice to CDLAC of transfer of the Project.
It is hereby expressly stipulated and agreed that any Transfer of the Projectin violation of
this Section12 shall be null, void and without effect, shall cause a reversion of title to the Owner,
and shall beineffective to relieve the Owner of its obligations under this Regulatory Agreement. The
written consent of the Governmental Lenderto any Transfer of the Projectshall constitute conclusive
evidence that the Transfer is not in violation of this Section12. Nothing in this Section shall affect
any provision of any other document or instrument between the Owner and any other party which
requires the Owner to satisfy certain conditions or obtain the prior written consent of such other party
in order to Transfer the Project. Upon any Transfer that complies with this Regulatory Agreement,
the Owner shall be fully released from its obligations hereunder to the extent such obligations have
been fully assumed in writing by the transferee of the Project.
The foregoing notwithstanding, the Projectmay be transferred pursuant to a foreclosure,
exercise of power of sale or deed in lieu of foreclosure or comparable conversion under the Deed of
Trust without the consent of the Governmental Lenderor compliance with theprovisions of this
Section12. The Governmental Lenderhereby approves the transfer of limited partnership interests
in the Owner, including, without limitation, the transfer of limited partnershipinterests in the Owner
from the Investor Limited Partnerand the transfer ofinterests in the limited partner of Owner. The
Governmental Lenderhereby agrees that the removal of the general partner pursuant to the Owner’s
partnership agreement shall not require the consent of Governmental Lender.
For the Compliance Period, the Owner shall not: (1)encumber any of the Projector grant
commercial leases of any part thereof, or permit the conveyance, transfer or encumbrance of any part
of the Project, except for (A)encumbrances permitted under the Deed of Trust, or (B)a Transfer in
accordance with the terms of this Regulatory Agreement, in each case upon receipt by the
Governmental Lenderof an opinion of Tax Counselto the effect that such action will not adversely
affect the Tax-Exempt status of interest on the Notes (provided that such opinion will not be required
with respect to any encumbrance, lease or transfer relating to a commercial operation or ancillary
facility that will be available for tenant use and is customary to the operation of multifamilyhousing
developments similar to the Project); (2)demolish any part of the Projector substantially subtract
from any real or personal property of the Project, except to the extent that what is demolished or
removed is replaced with comparable property orsuch demolition or removal is otherwise permitted
by the Loan Agreement or the Deed of Trust; or (3)permit the use of the dwelling accommodations
of the Projectfor any purpose except rental residences.
Section 13.Term. This Regulatory Agreement and all and several of the terms hereof
shall become effective upon its execution and delivery, and shall remain in full force and effect for
the period provided herein and shall terminate as to any provision not otherwise provided with a
specific termination date and shallterminate in its entirety at the end of the Compliance Period, it
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being expressly agreed and understood that the provisions hereof are intended to survive the
retirement of the Notes and discharge of the Funding Loan Agreementand the Loan Agreement.
The terms of this Regulatory Agreement to the contrary notwithstanding, the requirements of
this Regulatory Agreement shall terminate and be of no further force and effect in the event of
involuntary noncompliance with the provisions of this Regulatory Agreement caused by fire or other
casualty, seizure, requisition, foreclosure or transfer of title by deed in lieu of foreclosure, change in
a federal law or an action of a federal agency after the Closing Date, which prevents the
Governmental Lenderfrom enforcing such provisions, or condemnation or a similar event, but only
if, within a reasonable period, either the Notes are retired or amounts received as a consequence of
such event are used to provide a project that meets the requirements hereof; provided, however, that
the preceding provisions of this sentence shall cease to apply and the restrictions contained herein
shall be reinstated if, at any time subsequent to the termination of such provisions as the result of the
foreclosure or the delivery of a deed in lieu of foreclosure or a similar event, the Owner or any
related person (within the meaning of Section1.103-10(e) of the Regulations) obtains an ownership
interest in the Projectfor federal income tax purposes. The Owner hereby agrees that, followingany
foreclosure, transfer of title by deed in lieu of foreclosure or similar event, neither the Owner nor any
such related person as described above will obtain an ownership interest in the Projectfor federal tax
purposes.
Notwithstanding any other provision of this Regulatory Agreement, this Regulatory
Agreement may be terminated upon agreement by the Governmental Lenderand the Owner, with the
consent of CDLAC, upon receipt by the Governmental Lenderof an opinion of Tax Counselto the
effect that such termination will not adversely affect the exclusion from gross income of interest on
the Notes for federal income tax purposes. Upon the termination of the terms of this Regulatory
Agreement, the parties hereto agree to execute, deliver and record appropriate instruments of release
and discharge of the terms hereof; provided, however, that the execution and delivery of such
instruments shall not be necessary or a prerequisite to the termination of this Regulatory Agreement
in accordance with its terms.
Section 14.Covenants to Run With the Land. Notwithstanding Section1461 of the
California Civil Code, the Owner hereby subjects the Projectto the covenants, reservations and
restrictions set forth in this Regulatory Agreement. The Governmental Lenderand the Owner hereby
declare their express intent that the covenants, reservations and restrictions set forth herein shall be
deemed covenants running with the land and shall pass to and be binding upon the Owner’s
successors in title to the Project; provided, however, that on the termination of this Regulatory
Agreement said covenants, reservations and restrictions shall expire. Each and every contract, deed
or other instrument hereafter executed covering or conveying the Projector any portion thereof shall
conclusively be held to have been executed, delivered and accepted subject to such covenants,
reservations and restrictions, regardless of whether such covenants, reservations and restrictions are
set forth in such contract, deed or other instruments.
Section 15.Burden and Benefit. The Governmental Lenderand the Owner hereby
declare their understanding and intent that the burdens of the covenants set forth herein touch and
concern the land in that the Owner’s legal interest in the Projectis rendered less valuable thereby.
The Governmental Lenderand the Owner hereby further declare their understanding and intent that
the benefits of such covenants touch and concern the land by enhancing and increasing the enjoyment
and use of the Projectby Low Income Tenantsand Very Low Income Tenants, the intended
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beneficiaries of such covenants, reservations and restrictions, and by furthering the public purposes
for which the Notes were executed and delivered.
Section 16.Uniformity; Common Plan. The covenants, reservations and restrictions
hereof shall apply uniformly to the entire Project in order to establish and carry out a common plan
for the use of the site on which the Projectis located.
Section 17.Default; Enforcement. If the Owner defaults in the performance or
observance of any covenant, agreement or obligation of the Owner set forth in this Regulatory
Agreement, and if such default remains uncured for a period of 60 days after written notice thereof
shall have been given by the Governmental Lenderorthe Noteowner Representativeto the Owner, or
for a period of 60 days from the date the Owner should, with reasonable diligence, have discovered
such default, then the Governmental Lendershall declare an “Event of Default”to have occurred
hereunder; provided, however, that if the default is of such a nature that it cannot be corrected within
60 days, such default shall not constitute an Event of Default hereunder so long as (i)the Owner
institutes corrective action within said 60 days and diligently pursues such action until the defaultis
corrected, and (ii)in the opinion of Tax Counsel, the failure to cure said default within 60 days will
not adversely affect the Tax-Exempt status of interest on the Notes. The Governmental Lendershall
have the right to enforce the obligations of theOwner under this Regulatory Agreement within
shorter periods of time than are otherwise provided herein if necessary to insure compliance with the
Housing Law or the Code. Any cure of any default made or tendered by the Investor Limited Partner
shall be deemed to be a cure by Owner and shall be accepted or rejected on the same basis as if made
or tendered by Owner.
Following the declaration of an Event of Default hereunder, the Governmental Lender,
subject to the terms of the Funding Loan Agreement, may take any one or more of the following
steps, in addition to all other remedies provided by law or equity:
(i)by mandamus or other suit, action or proceeding at law or in equity, including
injunctive relief, require the Owner to perform its obligations and covenants hereunder or
enjoin any acts or things that may be unlawful or in violation of the rights of the
Governmental Lenderhereunder;
(ii)have access to and inspect, examine and make copies of all of the books and
records of the Owner pertaining to the Project;
(iii)take such other action at law or in equity as may appear necessary or
desirable to enforce the obligations, covenants and agreements of the Owner hereunder; and
(iv)with the consent of the Noteowner Representative, which consent shall not be
unreasonably withheld, declare a default under the Funding Loan Agreement or Loan
Agreement, as applicable, and proceed with any remedies provided therein.
The Owner hereby agrees that specific enforcement of the Owner’s agreements contained
herein is the only means by which the Governmental Lendermay fully obtain the benefits of this
Regulatory Agreement made by the Owner herein, and the Owner therefore agrees to the imposition
of the remedy of specific performance against it in the case of any Event of Default by the Owner
hereunder.
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The Governmental Lenderhereby agreesthat cure of any Event of Default made or tendered
by any partner of the Owner shall be deemed to be a cure by the Owner and shall be accepted or
rejected on the same basis as if made or tendered by the Owner.
All reasonable fees, costs and expenses (including reasonable attorney’s feesand expenses)
the Governmental Lenderincurred in taking any action pursuant to this Section shall be the sole
responsibility of the Owner.
Section 18.Recording and Filing. (a)The Owner shall cause this Regulatory Agreement
and all amendments and supplements hereto and thereto, to be recorded and filed in the real property
records of the County, and in such other places as the Governmental Lendermay reasonably request.
The Owner shall pay all fees and charges incurred in connection with any such recording.
(b)The Owner and the Governmental Lenderwill file of record such other documents
and take such other steps as are reasonably necessary, in the opinion of Tax Counsel, in order to
insure that the requirements and restrictions of this Regulatory Agreement will be binding upon all
owners of the Project.
(c)The Owner hereby covenants to include or reference the requirements and restrictions
contained in this Regulatory Agreement in any documents transferring any interest in the Project to
another person to the end that such transferee has notice of, and is bound by, such restrictions, and,
except in the case of a foreclosure or comparable involuntary conversion of the Deed of Trust,
whereby the Funding Lenderbecomes the owner of the Project, to obtain the agreement from any
transferee to abide by all requirements and restrictions of this Regulatory Agreement.
Section 19.Payment of Fees. Notwithstanding any prepayment of the Loan and
discharge of the Funding Loan Agreement, the Owner shall continue to pay (or, to the extent allowed
under the Code, shall prepay the present value at such time of) the fees of the Governmental Lender
as provided in this Section19, unless such prepayment is made in connection with a refunding of the
Notes.
The Owner agrees to pay to the Governmental Lender(i)an initial issuance fee of
$___________, which shall be paid on or before the Closing Date, (ii)the Governmental Lender’s
annual administration fee (the “Annual Administration Fee”), which shall be an amount equal to
$_________________, and shall be payable commencing on the Closing Date and annually on each
___________1 thereafter, and continuing throughout the Compliance Period, and (iii)within 30 days
after receipt of request for payment thereof, all reasonable out-of-pocket expensesof the
Governmental Lender(not including salaries and wages of Governmental Lenderemployees) related
to the Notes, the Project and the financing thereof, including, without limitation, legal fees and
expenses incurred in connection with the interpretation, performance, enforcement or amendment of
any documents relating to the Project or the Notes, including without limitation any legal fees and
expenses incurred in connection with any audit of the Notes by the Internal Revenue Service.
In the event that the Notes are prepaidin part or in full prior to the expiration of the Qualified
Project Period (other than Notes prepaidon the Conversion Date), the Annual Administration Fee for
the remainder of the Compliance Period, at the option of the Governmental Lender, shall be paid by
the Owner at the time of such redemption of the Notes and shall be a lump sum amount equal to the
present value of the Annual Administration Fee for the remainder of the Compliance Period
17
discounted at a rate equal to the then current market rate for U.S. Treasury obligations of a maturity
equal to the remaining term of the Compliance Period.
If the Owner fails to make payment of the Annual Administration Fee for a period of two
consecutive years or more, the Governmental Lendermay, in its sole discretion, declare the total
amount of the Annual Administration Fee through the end of the Compliance Period immediately
due and payable, such amount to be discounted at a rate equal to the then current market rate for U.S.
Treasury obligations of a maturity equal to the remaining term of the Compliance Period.
Section 20.Governing Law; Venue. This Regulatory Agreement shall be construed in
accordance with and governed by the laws of the State of California applicable to contracts made and
performed in the State of California. This Regulatory Agreement shall be enforceable in the State of
California, and any action arising hereunder shall (unless waived by the Governmental Lenderin
writing) be filed and maintained in the Superior Court of California,County of SanDiego.
Section 21.Amendments; Waivers. (a)Except as provided in Sections 8(a) and 28(e)
hereof, this Regulatory Agreement may be amended only by a written instrument executed by the
parties hereto or their successors in title, and duly recorded in the real property records of the County
of San Diego, California, and only upon (i)receipt by the Governmental Lenderof an opinion from
Tax Counselthat such amendment will not adversely affect the Tax-Exempt status of interest on the
Notes and is not contrary to the provisions of the Housing Law and (ii)the written consent of the
Noteowner Representative, who shall receive a copy of any such amendment.
(b)Anything to the contrary contained herein notwithstanding, the Governmental Lender
and theOwner hereby agree to amend this Regulatory Agreement to the extent required, in the
opinion of Tax Counsel, in order that interest on the Notes remains Tax-Exempt. The parties
requesting such amendment shall notify the other parties to this Regulatory Agreement of the
proposed amendment, with a copy of such proposed amendment to Tax Counseland a request that
Tax Counselrender to the Governmental Lenderan opinion as to the effect of such proposed
amendment upon the Tax-Exempt status of interest on the Notes. This provision shall not be subject
to any provision of any other agreement requiring any party hereto to obtain the consent of any other
person in order to amend this Regulatory Agreement.
(c)Any waiver of, or consent to, any condition under this Regulatory Agreement must be
expressly made in writing.
Section 22.Notices. Any notice required to be given hereunder shall be made in writing
and shall be given by personal delivery, overnight delivery, certified or registered mail, postage
prepaid, return receipt requested, or by telecopy, in each case at the respective addresses specified in
the Funding Loan Agreement, or at such other addresses as may be specified in writing by the parties
hereto. Unless otherwise specified by the Administrator, the address of the Administrator is:
Chula Vista Housing Authority
276 Fourth Avenue
Chula Vista, California 91910
Attention: Executive Director
Unless otherwise specified by CDLAC, the address of CDLAC is:
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California Debt Limit Allocation Committee
915 Capitol Mall, Room 311
Sacramento, CA 95814
Attention: Executive Director
The Governmental Lender, the Administrator, CDLAC and the Owner may, by notice given
hereunder, designate any further or different addresses to which subsequent notices, certificates or
other communications shall be sent. Notice shall be deemed given on the date evidenced by the
postal or courier receipt or other written evidence of delivery or electronic transmission; provided
that any telecopy or other electronic transmission received by any party after 4:00 p.m., local time of
the receiving party, as evidenced by the time shown on such transmission, shall be deemed to have
been received the following Business Day. A copy of each notice of default provided to the Owner
hereunder shall also be provided to the Investor and the Noteowner Representativeat the addresses
set forth in the Funding Loan Agreement.
A copy of each notice sent by or to the Owner shall also be sent to the Manager at the address
of the Manager provided by the Owner to the Administrator; but such copies shall not constitute
notice to the Owner, nor shall any failure to send such copies constitute a breach of this Regulatory
Agreement or a failure of or defect in notice to the Owner.
The Owner shall notify the Governmental Lenderand the Administrator in writing of any
change to the name of the Project or any change of name or address for the Owner or the Manager.
The Owner shall further notify CDLAC in writing of any event provided in Section28(d) hereof.
Section 23.Severability. If any provision of this Regulatory Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof
shall not in any way be affected or impaired thereby.
Section 24.Multiple Counterparts. This Regulatory Agreement may be simultaneously
executed in multiple counterparts, all of which shall constitute one and the same instrument, and each
of which shall be deemed to be an original.
Section 25.Limitation on Liability. Notwithstanding the foregoing or any other provision
or obligation to the contrary contained in this Regulatory Agreement, (i)the liability of the Owner
under this Regulatory Agreement to any person or entity, including, but not limited to, the
Noteowner Representative, or the Governmental Lenderand their successors and assigns, is limited
to the Owner’s interest in the Project, the Pledged Revenuesand the amounts held in the funds and
accounts created under the Funding Loan Agreement, or any rights of the Owner under any
guarantees relating to the Project, and such persons and entities shall look exclusively thereto, or to
such other security as may from time to time be given for the payment of obligations arising out of
this Regulatory Agreement or any other agreement securing the obligations of the Owner under this
Regulatory Agreement; and (ii)from and after the date of this Regulatory Agreement, no deficiency
or other personal judgment, nor any order or decree of specific performance (other than pertaining to
this Regulatory Agreement, any agreement pertaining to any Projector any other agreement securing
the Owner’s obligations under this Regulatory Agreement), shall be rendered against the Owner, the
assets of the Owner (other than the Owner’s interest in the Project, this Regulatory Agreement,
amounts held in the funds and accounts created under the Funding Loan Agreement, any rights of the
Owner under the Funding Loan Agreementor any other documents relating to the Notes or any rights
of the Owner under any guarantees relating to the Project), its partners, members, successors,
19
transferees or assigns and each of their respective officers, directors, employees, partners, agents,
heirs and personal representatives, as the case may be, in any action or proceeding arising out of this
Regulatory Agreement and the Funding Loan Agreementor any agreement securing the obligations
of the Owner under this Regulatory Agreement, or any judgment, order or decree rendered pursuant
to any such action or proceeding, except to the extent provided in the Loan Agreement.
Section 26.Third-Party Beneficiary. The City and CDLAC are intended to be and shall
each be a third-party beneficiary of this Regulatory Agreement. The City shall have the right (but
not the obligation) to enforce, separately or jointly with the Governmental Lenderor to cause the
Governmental Lenderto enforce, the terms of this Regulatory Agreement and to pursue an action for
specific performance or other available remedy at law or in equity in accordance with Section17
hereof. CDLAC shall have the right (but not the obligation) to enforce the CDLAC Conditions and
to pursue an action for specific performance or other available remedy at law or in equity in
accordance with Section17 hereof, provided that any such action or remedy shall not materially
adversely affect the interests and rights of the Noteowners.
Section 27.Property Management. The Owner agrees that at all times the Projectshall be
managed by a property manager (i)approved by the Governmental Lenderin its reasonable
discretion and (ii)who has at leastthree years’ experience in the ownership, operation and
management of similar size rental housing projects, and at least one year’s experience in the
ownership, operation and management of rental housing projects containing below-market-rate units,
without any record of material violations of discrimination restrictions or other state or federal laws
or regulations or local governmental requirements applicable to such projects (the “Manager”). The
Owner shall submit to the Governmental Lenderfrom time totime such information about the
background, experience and financial condition of any existing or proposed Manager as the
Governmental Lendermay reasonably require to determine whether such Manager meets the
requirements for a Manager set forth herein. The Governmental Lenderreserves the right to conduct
periodic reviews of the management practices and of the Manager to determine if the Projectis being
operated and managed in accordance with the requirements and standards of this Agreement. The
Owner agrees to cooperate with the Governmental Lenderin such reviews.
Replacement of Manager. If the Governmental Lenderdetermines in its reasonable judgment
that the Projectis not being operated and managed in accordance with one or more of the material
requirements or standards of this Agreement, the Governmental Lendermay deliver notice to the
Owner and the Noteowner Representativerequesting replacement of the Manager, which notice shall
state clearly the reasons for such request. The Owner agrees that, upon receipt of such notice, it shall
within 60 days submit to the Governmental Lender, with copies to the Noteowner Representative, a
proposal to engage a new Manager meeting the requirements of this Section27. Each of the
Governmental Lenderand the Noteowner Representativeshall respond within 30 days to such
proposal or such approval shall be deemed given. Upon receipt of such consent or deemed consent,
the Owner shall within 60 days terminate the existing Manager’s engagement and engage the new
Manager. If such proposal is denied by either the Governmental Lenderor the Noteowner
Representative, the Owner agrees that upon receipt of notice of such denial, it shall within 60 days
submit to the Governmental Lender, with copies to the Noteowner Representative, a proposal to
engage another new Manager meeting the requirements of this Section27, subject to the
Governmental Lender’s and Noteowner Representative’s consentor deemed consent pursuant to the
terms hereof.
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Notwithstanding any other provision of this Section27to the contrary, the Noteowner
Representativemay at any time by written instruction to the Governmental Lenderand the Owner
deny the Governmental Lender’s request for a replacement Manager and direct that the existing
Manager be retained.
Section 28.Requirements of CDLAC. In addition to other requirements set forth herein
and to the extent not prohibited by the requirements set forth in Sections 4 through 6 hereof, the
Owner hereby agrees to comply with each of the requirements of CDLAC set forth in this Section28,
as follows:
(a)The Owner shall comply with the CDLAC Resolution attached hereto as ExhibitE
and the CDLAC Conditions set forth in ExhibitA thereto (collectively, the “CDLAC Conditions”),
which conditions are incorporated herein by reference and made a part hereof. The Owner will
prepare and submit to the Governmental Lender, not later than February1 of each year, until the
Projectis completed, and on February1 every three years thereafter until the end of the Compliance
Period, a Certificate of Compliance II for Qualified Residential Rental Projects, in substantially the
form required or otherwise provided by CDLAC from time to time, executed by an authorized
representative of the Owner. Such Certificate of Compliance II for Qualified Residential Rental
Projects shall be shall be prepared pursuant to the terms of the CDLAC Conditions. Additionally, the
Owner will prepare and submit to the Governmental Lender, a Certificate of Completion, in
substantially the form required or otherwise provided by CDLAC from time to time, executed by an
authorized representative of the Owner certifying among other things to the substantial completion of
the Project. Compliance with the terms of the CDLAC Conditions not contained within this
Regulatory Agreement, but referred to in the CDLAC Conditions are the responsibility of the Owner
to report to the Governmental Lender.
(b)The Owner acknowledges that the Governmental Lenderand the Administrator shall
monitor the Owner’s compliance with the terms of the CDLAC Conditions. The Owner
acknowledges that the Governmental Lenderwill prepare and submit to CDLAC, not later than
March1 of each year, until the Projectis completed, and on March1 every three years thereafter
until the end of the Compliance Period, a Self-Certification Certificate in the form provided by
CDLAC. The Owner will cooperate fully with the Governmental Lenderin connection with such
monitoring and reporting requirements.
(c)Except as otherwise provided in Section13 of this Regulatory Agreement, this
Regulatory Agreement shall terminate on the date 55 years after the date on which at least fifty
percent (50%) of the units in the Projectare first occupied or otherwise after the commencement of
the Qualified Project Period.
(d)The Owner shall notify CDLAC in writing of: (i)any change in ownership of the
Project, (ii)any change in the Governmental Lender, (iii)any change in the name of the Projector
the Manager; (iv)any material default under the Funding Loan Agreement, the Loan Agreement or
this Regulatory Agreement, including, but not limited to, such defaults associated with the Tax-
Exempt status of the Notes, and the income and rental requirements as provided in Sections 4 and 6
hereof and the CDLAC Conditions; or (v)termination of this Regulatory Agreement.
(e)CDLAC shall have the right, but not the obligation, to deliver revised CDLAC
Conditions to the Owner after the Closing Date, at any time; that are not more restrictive than the
original CDLAC Conditions; provided however, that, with the prior written consent of the
21
Noteowner Representative, which will not be unreasonably withheld: (i)any changes in the terms
and conditions of the CDLAC Conditions prior to the recordation against the Project in the real
property records of the County of a regulatory agreement between Owner and TCAC(“TCAC
Regulatory Agreement”) shall be limited to such changes as are necessary to correct any factual
errors or to otherwise conform the CDLAC Conditions to any change in facts or circumstances
applicable to the Owner or the Project; and (ii)after recordation of the TCAC Regulatory Agreement,
any changes in the terms and conditions of the CDLAC Conditions shall be limited to such changes
as are necessary to conform Items 1, 6, 7, 10, 11, 12, 14, 15, 16, 18, 19, 20, 21, 22, 23, 24, 25and/or
26 of ExhibitA to the CDLAC Conditions to any change in terms and conditions requested by
Owner and approved by CDLAC. The Owner shall record or cause to be recorded in the real
property records of the County an amendment to this Regulatory Agreement containing such revised
CDLAC Conditions, executed by the parties hereto or their successor in title and pay any expenses in
connection therewith. The Owner shall provide CDLAC with a copy of that recorded amendment
reflecting the revised CDLAC Conditions.
Any of the foregoing requirements of the CDLAC contained in this Section28may be
expressly waived by CDLAC, in its sole discretion, in writing, but (i)no waiver by CDLAC of any
requirement of this Section28shall, or shall be deemed to, extend to or affect any other provision of
this Regulatory Agreement except to the extent the Governmental Lenderhas received an opinion of
Tax Counselthat any such provision is not required by the Housing Law and may be waived without
adversely affecting the exclusion from gross income of interest on the Notes for federal income tax
purposes; and (ii)any requirement of this Section28shall be void and of no force and effect if the
Governmental Lenderand the Owner receive a written opinion of Tax Counselto the effect that
compliance with any such requirement would cause interest on the Notes to cease to be Tax-Exempt
or to the effect that compliance with such requirement would be in conflict with the Housing Law or
any other state or federal law.
22
IN WITNESS WHEREOF, the Governmental Lenderand the Owner have executed this
Regulatory Agreement by duly authorized representatives, all as of the date first above written.
CHULA VISTA HOUSING AUTHORITY
By:
Executive Director
\[Execution Page to Regulatory Agreement and Declaration of Restrictive
Covenants Dated as of __________ 1, 2019\]
ST. REGIS PARK CIC, LP,
a California limited partnership
By:Pacific Southwest Community Development
Corporation,
a California nonprofit public benefit corporation,
its Managing General Partner
By:________________________________
Robert Laing
President and Executive Director
By:CIC St. RegisPark, LLC,
a California limited liability company,
its Administrative General Partner
By:Chelsea Investment Corporation,
a California corporation, its Manager
By:___________________________
Cheri Hoffman, President
\[Execution Page to Regulatory Agreement and Declaration of Restrictive
Covenants Dated as of __________ 1, 2019\]
EXHIBITA
DESCRIPTION OF REAL PROPERTY
Real property in the City of Chula Vista, County of San Diego, State of California, described
as follows:
A-1
EXHIBITB
FORM OF INCOME CERTIFICATION
B-1
EXHIBITC
FORM OF CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
The undersigned, ____________________, being duly authorized to execute this certificate
on behalf of ST. REGIS PARK CIC, LP(the “Owner”), hereby represents and warrants that:
1.The undersigned has read and is thoroughly familiar with the provisions of the
following documents associated with the Borrower’s participation in the Chula Vista Housing
Authority’s (the “Governmental Lender”) Multifamily Housing Revenue Notes (St. Regis Park
Apartments), Series 2019Series B-1 and B-2, such documents including:
(a)the Regulatory Agreement and Declaration of Restrictive Covenants (the
“Regulatory Agreement”) dated as of __________ 1, 2019betweenthe Ownerandthe Governmental
Lender;
(b)the Notes executed and delivered from the Owner to the Governmental
Lenderrepresenting the Owner’s obligation to repay the Loan.
2.As of the date of this certificate, the following percentages of residential units in the
Project (i)are occupied by Very Low Income Tenants and Low Income Tenants (as such terms are
defined in the Regulatory Agreement) or (ii)are currently vacant and being held available for such
occupancy and have been so held continuously since the date a Very Low Income Tenant andLow
Income Tenant vacated such unit; as indicated:
123
StudioBedroomBedroomsBedroomsTotal
Occupied by Very Low
Income Tenants:___ % Unit Nos.:_____________________
Held vacant for
occupancy continuously
since last occupied by a
Very Low Income
Tenant:___ % Unit Nos.:_____________________
123
StudioBedroomBedroomsBedroomsTotal
Occupied by Low Income
Tenants:___ % Unit Nos.:_____________________
Held vacant for
occupancy continuously
since last occupied by a
Low Income Tenant:___ % Unit Nos.:_____________________
C-1
3.The Owner hereby certifies that the Owner is not in default under any of the terms of
the above documents and no event has occurred which, with the passage of time, would constitute an
event of default thereunder, with the exception of the following \[state actions being taken to remedy
default\].
ST. REGIS PARK CIC, LP,
a California limited partnership
By:
Its:
C-2
EXHIBITD
CDLAC RESOLUTION
THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE
RESOLUTION NO.19-___
D-1
March 26, 2019File ID: 19-0117
TITLE
PRESENTATION AND DISCUSSION OF THE CITY’S FISCAL YEAR 2020 BASELINE BUDGET
RECOMMENDED ACTION
Council receivethe report and provide feedback as appropriate.
SUMMARY
There are no attachments for this item; staff will be giving a presentation at the council meeting.
ENVIRONMENTAL REVIEW
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act
State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is
required.
v.001 Page|1
March 26, 2019File ID: 19-0166
TITLE
A. DELIBERATION AND NOMINATIONS OF APPLICANTS TO BE INTERVIEWED TO FILL THE CURRENT
VACANCY ON THE PLANNING COMMISSION
APPLICANTS: Angelica Carillo, Rodney Caudillo, Heather Diaz-Tran, Alonso Gonzalez, Delfina Gonzalez,
Victor Ibarra, Patrick Macfarland, David Potter, RobertQuinlivan, Jerome Torres, Jim Trotter, Monika
Tuncbilek, Isabel Tutiven Ubilla, and Alex Welling
B. SELECTION OF DATE AND TIME OF OPEN MEETING OR MEETINGS AS MAY BE NECESSARY TO
CONDUCT INTERVIEWS OF APPLICANTS RECEIVING TWO OR MORE NOMINATIONS FOR THE VACANCY
ON THE PLANNING COMMISSION
RECOMMENDED ACTION
Council nominate applicants to be interviewed to fill the vacant seat and select a date and time for
an open meeting or meetings to conduct interviews of applicants receiving two or more
nominations.
ENVIRONMENTAL REVIEW
The activity is not a “Project” as defined under Section 15378 of the California Environmental
Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no
environmental review is required.
DISCUSSION
Item A -Nominations for One Vacancyon the Planning Commission
Thecurrent vacancy on the Planning Commission isa result of CommissionerYolanda Calvo’s
resignation onFebruary 20, 2019.
Chula Vista Municipal Code 2.42.030states: “Aminimum of three members of the Planning
Commission should be persons sensitive to design consideration and interested in townscape
matters. Persons qualified for these seats should include architects, landscape architects, land
planners, urban planners, civil engineers and other design professionals with suitable experience.”
Commissioner Calvo had experience in Civil Engineering and met the professional qualifications.
The Planning Commission has three remaining members with qualified experience: Michael De La
v.001 Page|1
Rosa (Land Use), Jon Milburn (Design), and Javier Nava (Architect).Therefore, the Council may
elect tonominate applicants with or without qualified experience.
Item B-Selection of Interview Dates for Appointments and Reappointments
Following nominations, Council will have the opportunity to select a date or dates to conduct
interviews for applicants who receive two or more nominations.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific
and consequently, the real property holdings of the Councilmembers do not create a disqualifying real
property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et
seq.).
Staff is not independently aware, and has not been informed by any Councilmember, of any other fact that
may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Thereis no impact on the general fund.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact.
ATTACHMENTS
1.Planning Commission Application Packet
Staff Contact: Leah Larrarte x2300
Page|2
November 26, 2018
To the City of Chula Vista Planning Commission:
Please accept this letter of recommendation for Ms. Heather Diaz-Traninstrong
support for hernomination for the At-Large Planning Commission position.
I have had the pleasure of working with Ms. Diaz-Tranduring her time at the New
York City Department of Transportation (NYCDOT). She led and facilitated
spaces program and the
launch of NYCGIS data
and financial analysis played a substantial role in making key recommendations
totheNYCDOT Commissioner, NYC City Councilmembers and local community
board members.She successfully launched threenew public pocket parks in
Manhattan, Brooklyn and the Bronx that brought together local residents and
businesses to activated unused open public spaces in a safe manner.
Ms. Diaz-Tranhas several years of experience working in major cities like New
York, San Francisco and San Diego withagencies relating to transportation,
urban planning and economic development. Her expertise can be transferable to
the City of Chula Vista and can serve as a valuable asset to the Commission.It
should also be noted that Ms. Diaz-Transpent her teenage years in Chula Vista
andhas recently moved back to settle down rootsand desires to make a
professional connection to the City in a public service role. She has the relevant
job experiencein planning and policy,motivation to improve communities and to
make efficient impactful changes,integrity,and honest work ethic that make an
ideal candidate for the At-Large Planning Commission position.
Thank you for your time in advance. Please feel free to call me if you have any
questions at
Best regards,
Connie Lee