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HomeMy WebLinkAbout2006/08/22 RDA Item 3 PAGE 1, ITEM NO.: MEETING DATE: 3 08/22/06 REDEVELOPMENT AGENCY AGENDA STATEMENT RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA [A] APPROVING A PREDEVELOPMENT LOAN AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY AND WAKELAND HOUSING AND DEVELOPMENT CORPORATION FOR THE DEVELOPMENT AND OPERATION OF AN AFFORDABLE RENTAL HOUSING DEVELOPMENT TO BE LOCATED AT 1501 BROADWAY AND AUTHORIZING THE CHAIRMAN OF THE REDEVELOPMENT AGENCY TO EXECUTE SAID AGREEMENT; AND [B] APPROPRIATING $200,000 FROM THE UNAPPROPRIATED BALANCE IN THE LOW AND MODERATE INCOME HOUSING FUND SUBMITTED BY: ACTING DIRECTOR OF CO UNITY DEVELOPMENT ITEM TITLE: REVIEWED BY: EXECUTIVE DIRECTOR tJ/ 4/5THs VOTE: YES ~ NO D BACKGROUND The Community Development Department has been looking at new opportunities for the development of affordable housing within the City's redevelopment project areas to meet critical housing needs for the community and to advance the Redevelopment Agency's goals. Currently vacant, the former Tower Lodge Motel, located at 1501 Broadway, represents an opportunity to remove an existing blighted property and to provide new housing opportunities for predominately very low-income households. Wakeland Housing and Development Corporation (Wakeland) has been pre-qualified by staff for the redevelopment of this 1.35 acre site into an affordable family rental project with 1, 2 and 3 bedroom units for households earning 30 to 60 percent of the area median income (AMI). In order to determine the feasibility of this project, Wakeland must complete a number of reports, studies and analyses. On August 10, 2006, the CVRC approved an Exclusive Negotiating Agreement with Wakeland and recommended Financial Assistance for a Predevelopment Loan for Wakeland to examine feasibility of an Affordable Rental Housing Development within the Merged Redevelopment Area. A Predevelopment Loan up to $200,000 is recommended at this time. Staff is, therefore, presenting for consideration the attached Predevelopment Loan Agreement (Attachment A) for $200,000 to cover those necessary soft costs related to the feasibility analysis. 3-1 PAGE 2, ITEM NO.: MEETING DATE: 08/22/06 ENVIRONMENTAL REVIEW The Environmental Review Coordinator 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; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION Staff recommends that the Redevelopment Agency adopt resolutions: 1) Approving the appropriation of $200,000 to the Other Expenses category of the Low and Moderate Income Housing Fund from the available fund balance for a predevelopment loan to Wakeland for the development and operation of an affordable rental housing project to be located at 1501 Broadway in the City of Chula Vista; and 2) Approving and executing a Predevelopment Loan Agreement with Wakeland Housing and Development Corporation and authorizing the Chairman of the Redevelopment Agency to execute said Agreement. BOARDS/COMMISSIONS RECOMMENDATION On May 24, 2006, the Housing Advisory Commission recommended that the Redevelopment Agency provide financial assistance in the form of a $200,000 predevelopment loan and additional financing in an approximate amount of $5 million for the development and operation of an affordable housing development. On August 10, 2006, the Chula Vista Redevelopment Corporation adopted resolutions: 1) Approving and authorizing the Chair to execute an Exclusive Negotiating Agreement with Wakeland Housing and Development Corporation for an affordable rental project located within the Merged Redevelopment Project Area of the City of Chula Vista, and 2) Approving a recommendation that the Redevelopment Agency appropriate up to $200,000 of Redevelopment Set-Aside Funding for a predevelopment loan to Wakeland, and execute any agreements necessary. DISCUSSION Affordable Housing Requirements in a Redevelopment Area Redevelopment agencies playa vital role in the funding and production of affordable housing. Within adopted project areas, redevelopment agencies receive a higher level of 3-2 PAGE 3, ITEM NO.: MEETING DATE: 08/22/06 property tax revenues that would normally be allocated to the state and other taxing entities. In exchange, the state requires that 20 percent of all of these "tax increment" revenues be set aside (Redevelopment Set-Aside) for the development of affordable housing, and funds are to be expended in proportion to the needs of very low, low and moderate income households. To ensure that these monies are in fact used for the production of affordable housing, the state requires that 15 percent of all new residential units built in an adopted project area be restricted to households of very low- and low- and moderate incomes. Based upon these requirements, of critical importance is the provision of housing opportunities specifically for very low-income households. The Council's/Agency's leadership in proactively planning for affordable housing opportunities in the redevelopment project areas is critical to meeting the Redevelopment Agency's legal obligations. The timely production of affordable units is a priority because of the nearing expiration dates of the various project areas. Development Proposal Wakeland is interested in developing approximately 40 units for an affordable, family rental project on the former Tower Lodge Motel site located at 1501 Broadway within the Merged Chula Vista Redevelopment Project Area. It is proposed that the project will serve primarily large families (3 bedroom units) and. predominately extremely low and very low-income households (30 to 50 percent of the AMI), meeting the City's critical housing needs and the expenditure and production requirements of the Redevelopment Agency for very low income housing. Based upon FY 2006 HUD Income limits, monthly rents would average from approximately $449 to $610. Site The property located at 1501 Broadway, just north of Anita Street, currently has a closed and blighted motel on the site. The motel has a long history of community complaints, code violations and police calls for service. In 2004, Tower Lodge had the highest calls for service per room ratio in the City according to the Chula Vista Police Department, six times the median. Dating back to 1987, the motel has been issued numerous Notices of Code Violations. On April 29, 2005, the Tower Lodge Motel was posted as a substandard building, all tenants were ordered to vacate, and the owner secured the building, which has remained vacant since that time. The property has a General Plan designation of Mixed Use Residential (MUR) and is within the South Broadway District. The zoning for the property is Thoroughfare Commercial with a Precise Plan modifier (CTP) and is currently inconsistent with the General Plan designation. To implement this designation, a rezone of the property will be required to allow land uses compatible with the MUR designation (residential, retail and office). A mix of compatible and complementary land uses are envisioned for the 3-3 PAGE 4, ITEM NO.: MEETING DATE: 08/22/06 district, with the MUR designation contemplating a mix of land uses within one development proposal/site. Development of anyone of these land uses separately could still be in keeping with the General Plan vision and policies for the district. This approach would constitute a "horizontal mixed use" and may be deemed acceptable in this area. Through the application for rezoning of the property, the development proposal and the desire to provide horizontal mixed use in this area would be evaluated for consistency with the General Plan. A map of the proposed development site is included as Attachment 2. Financial Assistance Financing and development of this project is proposed as a joint private-public partnership. Wakeland is proposing the use of Low Income Housing Tax Credit financing to support the majority ($7.1 million) of the estimated $13.8 million cost of constructing the project. At this time, staff is recommending the appropriation of a maximum of $200,000 in Redevelopment Low/Moderate Income Housing Funds to fund the predevelopment costs of the project. Predevelopment expenses are an eligible use of Redevelopment Set-Aside funding, provided that the affordable units are actually constructed. The Predevelopment Loan Agreement is attached as Attachment 1 for consideration by the Agency. The Predevelopment Loan will be made on the following loan terms: 1. No interest shall accrue upon the loan. 2. The Predevelopment Loan shall be due and payable if Wakeland and the Agency are not able to enter into a subsequent Development and Loan Agreement within the Negotiating Period as set forth in the ENA. Should Wakeland execute such agreement for the development of the site, repayment of the Predevelopment Loan shall be set forth within this Agreement. The Predevelopment Loan repayment is unsecured. 3. Loan proceeds shall be used to pay for actual and reasonable costs related to the preparation of plans, studies, and reports for the project site. As stipulated within the Agreement, Wakeland will be responsible for repayment of any and all predevelopment funds expended in relation to the project in the event that the affordable units are not constructed. If an affordable project is successfully completed, the Agency may roll the predevelopment loan into any loan that may be provided by the Agency. Pending completion of due diligence, Wakeland is estimating a remaining financing gap of $5.24 million. To close this gap, Wakeland has committed to deferring part of their 3-4 PAGE 5, ITEM NO.: MEETING DATE: 08/22/06 fee as developer of the project. Additionally, they are anticipating a request for direct financial assistance of approximately $5,000,000 or $125,000 per unit from the Redevelopment Agency to close this financing gap. The Redevelopment Agency will consider this request at such time as a preliminary evaluation of the property and project has been completed and financing costs have been more clearly identified. Agency financial support will be essential to the successful completion of an affordable project on this site. In recent years, land and construction costs have risen dramatically. As an example, in September 2005, the City approved additional financing for the 40- unit Seniors on Broadway development due to significant cost increases, amounting to a total assistance level of approximately $90,000 per unit. Affordable housing developments are not able to adapt to higher costs. These developments are limited in their ability to generate income based upon the restricted rents. In turn, this affects Wakeland's ability to qualify for additional financing and absorb higher construction costs. With the proposed development targeting deeper affordability levels of extremely low and very low income households, the project will not be able to generate sufficient revenues to support the predevelopment and development costs. While the subsidy anticipated is high, this development provides the Agency with an opportunity to commit and expend redevelopment funds on an affordable housing development that is located in a redevelopment project area and which assists extremely low and very low income. Both of these factors are noteworthy given the Agency's requirement to provide 6 percent of the housing within Redevelopment Project Areas as affordable to very low income households (California Health & Safety Code 9 33413) and to expend its Redevelopment Low and Moderate Income Set-aside funds in relation to the community's need for very low income households and the population under the age of 65 (California Health & Safety Code 9 33334.4). ~rticle }(}()(I" Article XXXIV of the California Constitution (Article 34) requires that voter approval be obtained before any "state public body" develops, constructs or acquires a "low rent housing project". This project is applicable under Article XXXIV of the State Constitution. Proposition C, passed on April 11, 1978, authorized the development, construction and acquisition of 400 units of housing for persons of low-income in the City of Chula Vista. Currently, there are 66 units remaining as authorized under Proposition C. The restriction of the approximately 40 units will be counted towards this remaining authorization. 3-5 PAGE 6, ITEM NO.: MEETING DATE: 08/22/06 Developer Qualification The CVRC and Agency staff are interested in establishing partnerships with quality developers who have a proven track record and understand Chula Vista's interests, history, and vision for the future. Staff has pre-qualified Wakeland based on the required qualification criteria of the CVRC and the suitability of their qualifications to the respective development site, as summarized below. For a complete developer biography and list of projects, please refer to Attachment 3. Wakeland has significant experience in developing in-fill affordable housing in redevelopment areas such as a 74-unit project ("Lillian Place") in the East Village and ("Town Square Row Homes") a 6-unit, for-sale project in downtown National City. Wakeland is well qualified and has demonstrated their desire and commitment to partner with the City and Chula Vista Redevelopment Corporation, to develop a project that meets the City's affordable housing objectives and to work cooperatively with the public in the design of the project. CONCLUSION As proposed, the development of affordable housing on the site will meet a critical housing shortage of rental housing for extremely low and very low income households and remove a currently blighting influence on the community. The Agency's participation will fulfill its requirements to expend its funds and produce housing for very low-income households. If predevelopment financing is approved, staff will begin working with the development team to commence the predevelopment tasks, including the pre-design public workshop. If discussions, negotiations, and tasks under the ENA process are successful, the Agency and Wakeland may consider entering into a Development Agreement or Owner Participation Agreement (OPA) for construction of the approved development project. Under a successful process, the overall timeframe for construction and completion of a development project is between 18 to 36 months from execution of the Development Agreement or OPA. DECISION MAKER CONFLICTS Staff has reviewed the property holdings of the Agency S'oard Members and has found no such holdings within 500'of the property which is the subject of this action. 3-6 PAGE 7, ITEM NO.: MEETING DATE: 08/22/06 FISCAL IMPACT The Predevelopment Loan of $200,000 will be set aside from the available balance in Redevelopment Agency's Low and Moderate-Income Housing Set-aside Fund and appropriated in the Agency's Budget. Upon execution of a Development and Loan Agreement, the predevelopment loan may be incorporated into this Loan. Should the Agency not enter into a Development and Loan Agreement with Wakeland, the predevelopment loan shall be immediately due and repaid. Any repayment of the loan will be deposited into the Redevelopment Agency's Low and Moderate Income Housing Set-aside fund for further use in providing affordable housing programs. ATTACHMENTS 1. Predevelopment Loan Agreement 2. Map of Proposal Site 3. Wakeland Housing and Development Corporation List of Projects Prepared by: Amanda Mills, Housing Manager, Community Development Department J:\COMMDEV\STAFF.REP\2006\08-22-06\Wakeland Loan 2006.08.22.doc 3-7 ~~~ -.- ";=E"""~3fE ellY OF CHULA VISTA p I ann n g & Building Planning Division I Department Development Processing APPLICATION APPENDIX B Disclosure Statement Pursuant to Council Policy 101-01, prior to any action upon matters that will require discretionary action by the Council, Planning Commission and all other official bodies of the City, a statement of disclosure of certain ownership or financial interests, payments, or campaign contributions for a City of Chula Vista election must be filed. The following information must be disclosed: 1. List the names of all persons having a financial interest in the property that is the subject of the application or the contract, e.g., owner, applicant, contractor, subcontractor, material supplier. Wakeland Housing & Development Corporation is a 501(c)3 Corporation. Therefore, there are no individuals that have or will have a financial interest in it or any~of the properties it owns or will own. Wakeland has one si~red contract with a contr~(tnr nr '1Ihrnntr~rtnr. Wayne Davis Group (ArcJl,ld'tec.fit~. (1) b' , h' I' h f II' d" 'd I 'h 1 any person I entl leu pursuant to a ove IS a corporatIon or partners 'p, 1St t e names 0 a In IVI ua s Wit a $2000 investment in the business (corporation/partnership) entity. NjA - Wakeland Wayne Davis-owns 100% of Wayne Davis Group 2. 3. If any person* identified pursuant to (1) above is a non-profit organization or trust, list the names of any person serving as director of the non-profit organization or as trustee or beneficiary or trustor of the trust. Loren Adams, Board Chair Lina Ericsson, Member uack Farris. Member Craiq Fukuyama, Member DOlJg Perkins, Sec:retary Art Rivera. Member Lee Winslett, Member 4, Please identify every person, including any agents, employees, consultants, or independent contractors you have assigned to represent you before the City in this matter. Ken Sauder. Wakeland Housing & Development Corp. President & CEO Ri'lrry (;et7e1 _ WAkelAnd HOlJsing & Development Corp. Senior Project Manager 5, Has any person* associated with this contract had any financial dealings with an official** of the City of Chula Vista as it relates to this contract within the past 12 months, Yes_ No~ If Yes, briefly describe the nature of the financial interest the official** may have in this contract. 6. Have you made a contribution of more than $250 within the past twelve (12) months to a current member of the Chula Vista City Council? No L Yes _If yes, which Council member? 276 Fourth Avenue Chula Vista California 91910 (619) 691-5101 3-8 ~v~ -.- ~~- ~~ - P I ann ng & Building Planning Division Department Development Processing cm OF CHULA VISTA APPLICATION APPENDIX 8 Disclosure Statement - Page 2 7. Have you provided more than $340 (or an item of equivalent value) to an official** of the City of Chula Vista in the past twelve (12) months? (This includes being a source of income, money to retire a legal debt, gift, loan, etc.) Yes No L If Yes, which official** and what was the nature of item provided? ~A~~ ~ fL Signature of Contractor/Applicant Date: June 22. 2006 Kenneth L. Sauder, Prp.sidp.nt type name of Contractor/Applicant Print or * Person is defined as: any individual, firm, co-partnership, joint venture, association, social club, fraternal organization, corporation, estate, trust, receiver, syndicate, any other county, city, municipality, district, or other political subdivision, -or any other group or combination acting as a unit. ** Official includes, but is not limited to: Mayor, Council member, Planning Commissioner, Member of a board, commission, or committee of the City, employee, or staff members. 276 Fourth Avenue Chula Vista California 91910 (619) 691-5101 3-9 THE ATTACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALLY SIGNED UPON APPRO V AL BY THE CITY COUNCIL ~.h~hLV1L (;U~ ~ , 0 Ann Moore . City Attorney Dated: ((lb!D{ , Predevelopment Loan Agreement by and between The Redevelopment Agency of the City of Chula Vista and Wakeland Housing and Development Corporation 3-10 Attachment 1 PREDEVELOPMENTLOANAGREEMENT TIDS PREDEVELOPMENT LOAN AGREEMENT (the "Agreement") is entered into as of August 10,2006, by and between the. REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body, corporate and politic (the "Agency"), and WAKELAND HOUSING AND DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("Developer"). RECITALS The following recitals are a substantive part of this agreement: A. Agency is a public body, corporate and politic, exercising govermnental runctions and powers and organized and existing under the Community Redevelopment Law of. the State of California (Health and Safety Code Section 33000, et seq.). City is a municipal corporation, organized and existing under the laws of the State of California. Agency and City are authorized to enter into binding agreements for th~ purpose of protecting public health, safety, and welfare. B. Agency has available funds from the Agency's Low and Moderate-Income Housing Fund which can be used for the purposes of funding the obligations of the Agency under this Agreement in accordance with the Community Redevelopment Law of the State of California. C. Developer proposes to construct multifamily apartment units, affordable to extremely low and very low families at or below 50 percent of the Area Median Income ("AMI") (the "Project") on a certain parcel of land identified as 1501 Broadway in the City of Chula Vista (the "Site"). D. Pursuant to Health and Safety Coae Section 33413(b), the Agency is required to ensure that at least 15 percent of all new and substantially rehabilitated dwelling units developed within a project area under the jurisdiction of the Agency by private or public entities or persons other than the Agency shall be available at affordable housing cost to persons and families oflow or moderate income. E. Pursuant to Health and Safety Code Section 33334.4, Agency's expenditure of Housing Funds must be in proportion to the community's need for very low and low income housing and housing for its population under the age of 65, as specified within the City's Housing Element F. The Project i~ located within the Agency's Merged Chula Vista Redevelopment Project Area and development and operation of the Project would benefit the Agency's redevelopment project areas by providing affordable housing for persons who currently live and work within those redevelopment project areas. Wakeland Pre development Loan Agreement Page 1 3-11 G. The Project achieves several of the City's Comprehensive Housing Plan Objectives, which are expressly noted in the Housing Element as priorities for the City. The objectives this Project serves are: (1) Pursue housing opportunities far lower income households, with attention to those who have special needs, such as extremely low and very low income households. (2) The provision of adequate rental housing opportunities and assistance to households with low and very low incomes. (3) The provision of incentives for the construction of low income housing. H. The Agency and the Developer have entered into an Exclusive Negotiating Agreement, dated as of June 22, 2006 (the "ENA"). The ENA provides for the Deve,loper and tbe Agency to negotiate towards a mutually acceptable Development and Loan Agreement for the purpose of developing the Project. 1. Through the development and operation of the Project, Agency and Borrower desire to provide extremely low, very law, lower income households with affordable housing opportunities within the City in accordance with the Community Redevelopment Law, the Agency's redevelopment plans, and the Housing Element of the City General Plan. In order to accomplish this goal, the Agency desires to make a loan from its Low and Moderate Income Housing Fund to Developer for those costs associated with predevelopment expenses which are to be incurred during the parties' negotiation of a Development and Loan Agreement for the Project, subject to certain conditions designed to assure the implementation of the Project in accordance with the redevelopment plans, the General Plan, state and federal law, and as otherwise provided herein. , J. The Agency's making of the Agency Loan to the Developer is in the vital and best interest of the City and the health, safety, and welfare of ~ts residents, and in accord with public purposes and provisions of applicable sate and local laws. NOW, THEREFORE, the Agency and -the Developer hereby agree as follows; 1. Predevelopment Loan. Subject to Developer's perfonnance of all of the terms, covenants and conditions which are set forth herein, the Agency hereby agrees to loan to the Developer, and the Developer agrees to borrow from the Agency, the sum of Two Hundred Thousand Dollars ($ 200,000) (the "Pre development Loan"). No interest shall accrue upon the Predevelopment Loan. 2. Disbursement of Predevelopment Loan. The proceeds of the Predevelopment Loan shall be disbursed only to pay for actual and reasonable costs related to the preparation of plans, studies and reports for the Development as more particularly described in Exhibit "A" attached hereto. Agency's obligation to commence disbursement of the Predevelopment Loan proceeds is subject to the fulfillment or waiver by Agency of each and all of the conditions precedent (a) through (t) inclusive, described below ('~~onditions Precedent") which are solely for the benefit Wakeland Predevelopment Loan Agreement Page 2 3-12 of Agency, any of which may be waived by the Agency's Executive Director in his or her sole and absolute discretion: 2a. Execution of Documents. Developer shall have executed and delivered to the Agency the Assignment of Plans, substantially in the form attached hereto as Exhibit "B" and incorporated herein, the consent to the Assignment of Plans of each person or entity for which payment is sought, and any other documents required hereunder shall be executed prior to any commencement of work by the subcontractor and disbursement of any loan funds. 2b. Contract. Developer shall have provided to the Agency a signed copy of each contract between the Developer and each provider of predevelopment services to be funded hereunder, certified by the developer to be true and correct copies thereof. 2c. No default. Developer shall not be in default in any of its obligations under the terms of this Agreement or the ENA. All covenants of Developer which are required hereunder or in the ENA to be performed prior to the disbursement of the Predevelopment Loan shall have been performed by such date. 2d. Application for Payment. The Developer shall have submitted a request for payment to the Agency (the "Application for Disbursement"), at least ten (10) business days prior to the requested disbursement. The Application for Disbursement shall be completed and certified to be accurate by the Developer. The Application for Disbursement shall specifically identify the nature of each expense, and shall identify the status of completion of such item of work. Each application for Disbursement shall be accompanied by copies of paid invoices or the original invoices, if to be paid directly by the Agency, from contractors and subcontractors and any other information and documents reasonably requested by the Agency. 2e. Frequency. Agency shall not be obligated to make. disbursements more frequently than twice per month. 2f. Use of Disbursements. Developer shall use or apply all Predevelopment Loan disbursements solely for the purposes described in the Application for Disbursement pursuant to which the disbursement was made, and in accordance with all of the requirements of this Agreement. 3. Repayment of Predevelopment Loan. Should Developer and the Agency approve and execute a Development and Loan Agreement within the Negotiating Period as set forth in the ENA, such Agreement shall set forth the manner and provide for the Developer's repayment of the amount of the Predev~lopment Loan disbursed hereunder,. If the Development and Loan Agreement is not approved 6r executed within the Negotiating Period as set forth in the ENA, the Predevelopment Loan shall be immediately due and payable from any and all assets and resources legally available to the developer. Additionally, Developer shall assign to the Agency any and all of the Developer's rights in and to the plans, studies, and analyses which are funded through the Predevelopment Loan. In order to secure the Developer's obligation hereunder, the developer agrees to execute the Assignment of Plans. Wakeland Predevelopment Loan Agreement Page 3 3-13 4. Insurance. Developer must procure insurance against claims for injuries to persons or damages to property that may arise from or in connection with the perfonnance of the work under the contract and the results of that work by the Developer, his agents, representatives, employees or subcontractors and provide documentation of same prior to commencement or work. The insurance must be maintained for the duration of the contract. a. Minimum Scope of Insurance. Coverage must be at least as broad as: i. Insurance Services Office Commercial General Liability coverage (occurrence Form CGOOOI) iL Insurance Services Office Form Number CA 0001 covering Automobile Liability, codel (any auto). lll. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. b. Minimum Limits of Insurance. Developer must maintain limits no less than: 1. General Liability: (Including operations, products and completed operations, as applicable.) ii. Automobile Liability: ilL Workers ' Compensation Employer's Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability insurance with a general aggregate limit is used, either the general aggregate limit must apply separately to this project/location or the general aggregate limit must be twice the required occurrence limit. $1,000,000 per accident for bodily injury ~d property damage. Statutory $1,000,000 each accident $1,000,000 disease-policy limit $1,000,000 disease-each employee c. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either the insurer will reduce or eliminate such deductibles or self-insured retentions as they pertain to the City, its officers, officials, employees and volunteers; or the Developer will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration> and defense expenses. d. Other Insurance Provisions. The general liability, automobile liability> and where appropriate, the worker's compensation policies are to contain, or be endorsed to contain, the following provisions: i. rile City of ClllIla Vista, its officers, officials, employees, age/Its, and volllllteers are to be ltamed as additiollaJ i1lsureds with respect to liability arisirzg Ollt of automobiles owned, leased, hired or borrowed by or on behalf of Wakeland Predevelopment Loan Agreement Page 4 3-14 the Developer, where applicable, and, with respect to liability arising out of work or operations performed by or on behalf of the Developer including providing materials, parts or equipment furnished in connection with such work or operations. The gelleralliability additional illsured coverage 11Iust be provided ill the form of all el1dorsemellt to the Developer's insurance lIsing ISO CG 2010 (11/85) or its equivalent. Specifically, tlte endorsement mllst not exclude Products / Completed Operations coverage. ii. The Developer's illSllrallCe coverage 11I1lSt 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 of the I?eveloper and in no way relieves the Developer from its responsibility to provide insurance. lll. Each insurance policy required by this clause must be endorsed to state that coverage wil/not he ca1lceled by either party, except after thirty (30) days' prior writtell notice to the City by certified mail, return receipt requested. iv. Coverage shall 1l0t extend to allY indemllity coverage for tlte active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code. v. Developer's insurer will provide a Waiver of Sllbrogatioll in favor of the City for each required policy providing coverage during the life of this contract. e. Acceptability of Insurers. Insurance is to be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best's rating of no less than A V. If insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers (LESL!) with a current A.M. Best's rating of no less than A X. Exception may be made for the State Compensation Fund when not specifically rated. f. Verification of Coverage. Developer shall furnish the City with original certificates and amendatory endorsements effecting coverage required by this clause. The endorsements should be on insurance industry forms, provided those endorsements conform to the contract requirements. All certificates alld endorsements are to be received and approved by the City before work comin~nces. 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. g. Subcontractors. Developer must include all subcontractors as insureds under its policies or furnish separate certificates and endorsements for each subcontractor. All Wakeland Predevelopment Loan Agreement Page 5 3-15 coverage for subcontractors are subject to all of the requirements included in these specifications. 5. Indemnification and Hold Harmless. Developer shall indemnify, hold harmless, protect, and defend, with attorney(s) reasonably acceptable to the Agency, the Agency and its officers, elected and appointed boards and officials, employees, representatives and agents, from and against any and all liability, damages, costs, losses, claims and expenses, suits, actions, proceedings and judgments, including without limitation, reasonable attorney fees and court costs" however caused, resulting directly or indirectly from or connected with the Development, the Site andlor the approval of or the performance under this Agreement alleged by third parties to be the result of or related to errors, omissions, or misconduct by Developer or its contractors, subcontractors, agents, employees or other persons action on its behalf, except to the extent caused by the sole negligence or sole willful misconduct of the Agency, or its officers, boards, officials, employees representative or agents. This indemnity obligation shall survive the termination of this Agreement. Notwithstanding the foregoing, in the event of a third party challenge to the validity of ' this Agreement, Developer shall have the option to terminate this Agreement in lieu ofits indemnity obligation. 6. Compliance with Laws. The Developer for itself and its obligations hereunder in conformity with aU applicable laws, including without limitation all provisions of the City Municipal Code, all applicable environmental laws, all state and federal fair housing laws, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. 7. Nondiscrimination. Developer for itself and its successors and assigns, agrees that there shall be no discrimination against or segregation' of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing, rental, transferring, use, occupancy" tenure, .or enjoyment of the Site nor shall the Developer or any person claiming under or through the Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, leases, sublessees, subtenants, contractors or vendess in the Site. 8. Condition of the Site. Developer shall take all necessary precautions to prevent the release into the Site of Hazardous Materials (as defined below). Such precautions shall include compliance with all Government Requirements (as defmed below) with respect to Hazardous Materials. In addition to any and all other indemnities, Developer shall indemnify, defend and hold Agency harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorney's fees), resulting from, arising out of, or based upon (i) the release from the Site, use on the site, generation on the Site, discharge from the Cite, storage on the Site, disposal on or from the Site, or transportation to or from the Site, of any Hazardous Materials during the term of this Agreement, which is caused by the Developer or its officers, employees or agents, or eii) the Wakeland Pre development Loan Agreement Page 6 3-16 violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous materials on, under, in or about, to or from, the Site, which is cause by the Developer or its officers, employees, or agents. This indemnity shall include, without limitation, any damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or proceeding, including injunctive, mandamus, equity or action at law, for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or otber economic loss, damage to the natural resources or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. For the purposes of this Agreement, "Governmental Requirements" means all laws, ordinances, statutes, code, rules, regulations, orders, and decrees of the United States, the State of C-alifornia, San Diego County, the City of Chula Vista, or any other political subdivision in which the Site is located, and of any other political subdivision, agency, or instrumentality exercising jurisdiction over the Developer or the Site. For the purposes oftrus Agreement, "Hazardous Materials" means any substance, material, or ate which is or becomes regulated by any local governmental authority, the County, the State of California, regional governmental authority, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, division 20, chapter 6.8 (Carpenter-Presley- Tanner Hazardous Substance Account Act), (Ui) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 oftbe California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plaris and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) methyl tertiary butyl ether, (ix) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of title 22 of the California Code of Regulations, Division 4, ex) designated as "bazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. 913 I 7), (xi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 V.S.C. 96901 et seq. (42 D.S.C. 96903), or (xii) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Envirorunental Response, Compensation, and Liability Act, .42 U.S.C. 96901 et seq. Notwithstanding the forgoing, "Hazardous Materials" shall not include such products in quantities as are customarily use in construction, maintenance, rehabilitation or management of residentiat" 1ievelopments or associated buildings and grounds, or typically used in residential activities in a manner. typical of other comparable residential developments, or substance commonly ingested by a significant population living within the Development, including without limitation alcohol, aspirin, tobacco and saccharine. 9. Liens and Stop Notices. Developer shall use its best efforts to prevent any lien or stop notice from being place on the Site of the Development or any part thereof. If a claim of a lien or Wakeland Predevelopment Loan Agreement Page 7 3-17 stop notice is given or recorded affecting the Site the Developer shall within thirty (30) days of such recording or service: a. pay and discharge the same; or b. effect the release thereof by recording and delivering to Agency a surety bond in sufficient form and amount, or otherwise; or c. provide Agency with indemnification from a title insurance company reasonably acceptable to the Agency against such lien or other assurance whlch Agency deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of Agency from the effect of Agency from the effect of such lien or bonded stop notice. - 10. Developer's Representations and Warranties. Developer represents and warrants to Agency as follows: a. Authority. Developer has full right, power and lawful authority to undertake all obligations as provided herein, and the execution, performance and delivery of this Agreement by Developer has been fully authorize by all requisite actions on the part of the Developer. The parties who have executed this Agreement on behalf of Developer are authorized to bind Developer by signature hereto. b. Litigation. To the best of the Developer's knowledge, there are no actions, suits, material claims, legal proceedings, or any other proceedings affecting the Developer or any parties affiliated with Developer, at law on in equity before any court or governmental agency, domestic or foreign, which if adversely determined, would materially impair the right or ability of Developer to execute or.perform its obligations under this Agreement or any docwnents required herby to be executed by Developer, or . which would materially adversely affect the financial condition of Developer or any parties affiliated with Developer. c. No Conflict. To the best of the Developer's knowledge, Developer's execution, delivery, and performance of its obligations under this Agreement will not constitute a . default or a breach under any contract, agreement or order to which Developer or any parties affiliated with Developer is a party or by which it is bound. d. No Bankruptcy. No attachment, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization, receivership or other proceedings have be~n flied or are pending or threatened against the Developer or any parties affiliated with Developer, nor are any of such proceedings contemplated by Developer or any parties with Developer. e. Notice of Changed Conditions. Developer shall, upon learning of any fact or condition which would cause any warranties and representations in this Section 10 not to be true in any material respect,jmmediately give written notice of such fact or condition Wakeland Predevelopment Loan Agreement Page 8 3-18 to Agency. Such exceptiones) to a representation shall not be deemed breach of Developer hereunder, but shall constitute an exception which Agency shall have the right to approve or disapprove. If Agency elects to disburse the Predevelopment Loan to the Developer following disclosure of such information, Developer's representations and warranties contained herein shall be deemed to have been made as of the date of the disbursement of the Predevelopment Loan, subject to such exceptiones). If following the disclosure of such information the Developer fails to cure such matter within the time set forth in Section 11 hereof for the cure of defaults, Agency may elect in its sole and exclusive discretion to terminate this Agreement by 'Nritten notice to the Developer. 11. Prohibition Against Assignment and Transfer. Agency would not have entered into this Agreement but for Developer's unique qualifications and experience. Therefore, Developer's rights and obligations under this Agreement may not be assigned, whether voluntarily, involuntarily, or by operation of law, without the prior written approval of Agency in its sole discretion. Upon the occurrence of any change, whether voluntary or involuntary, in membership, ownership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the Agency, prior to the time of such change, the Agency may terminate this Agreement, without liability, by sending written notice of termination to Developer. If Agency exercises said right to terminate, all funds shall be immediately due and payable. 12. Remedies for Default. A failure by either party to perform any action or covenant required by this Agreement, within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if such party cures such default within thirty (30) days from receipt of such notice. However, in the event that such . Default is of such a nature that it cannot reasonably be cured within thirty (3) days from receipt of such notice, the claimant shall not institute any proceeding against the other party, and the other party shall not be in Default is such party iInmediately upon receipt of such notice. with due diligence. commences to cure, correct or remedy such failure or delay and completes such cure, correction or remedy with diligence as soon as reasonably possible thereafter. 13. Termination. Either party may terminate this Agreement if the other party has materially defaulted in its obligations herein set forth, and the terminating party has provided defaulting party with written notification of such determination, and the defaulting party has refused to cure same as set; f6rth above. Each party shall also have the right to terminate this Agreement in the event that Agency or Developer determines that (a) the Project is infeasible or not in the public interest; or (b) the parties reach an impasse in their negotiation of the Development and Loan Agreement which cannot be resolved after good faith efforts. Wakeland Predevelopment Loan Agreement Page 9 3-19 14. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute and action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Legal actions must be instituted in the Superior Court of the County of San Diego, State of California located in the City of Chula Vista.. 15. Acceptance of Service of Process. In the event that any legal action is commenced by the Developer against Agency, service of process on Agency shall be made by personal service upon the Secretary or executive Directory of Agency or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against the Developer, service of process shall be made in such a manner as may be provided by law and shall be effective whether served inside or outside California. - 16. Rights and Remedies Are Cumulative. E~cept as otherwise expressly stated in this Agreements, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other party. 17. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to statute and maintain such actions or proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies. 18. Applicable Law. The laws of the State of California shall gove~ the interpretation and enforcement of this Agreement. 19. Attorney's Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the term or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to any other relief to which it might be entitled, whether legal or equitable, its actual and reasonable costs and expenses including, without limitation, litigation costs and reasonable attorney's fees. The parties hereto acknowledge and agree that each such party shall bear its own legal cost$ incurred in connection with the negotiation, approval, and execution ofthis Agreement. 20. General Provisions. a. Notices, riethands and Communications Between Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of deliver, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, --- Wakeland Predevelopment Loan Agreement Page 10 3-20 addressed to the address of the party as set forth below, or at any other address as that party may later designate by Notice: To Agency: Agency's Address for Notice: Redevelopment Agency of the City of Chula Vista Community Development Department Attn: Director of Community Development Copy to: City Attorney 276 Fourth Avenue Chula Vista, CA 91910 Telephone: (619) 691-5047 Fax: (619)476-5310 To Developer: Developer's Address for Notice: Kenneth Sauder Wakeland Housing and Development Corporation 625 Broadway, Ste. 1000 San Diego, CA 92101 Telephone: 619-235-2296 Fax: 619-235-5386 Any written notice, demand or communication shall be deemed received immediately upon receipt; provide, however, that refusal to accept delivery after reasonable attempts thereto shall constitute receipt. Any notices attempted to be delivered to an address from which the receiving party has moved without notice shall be effective on the third day from the date of the attempted delivery or deposit in the United States mail. b. Non-Liability of Officials and Employees of Agency and City. No member, official, officer or employee of Agency of the City of Chu1a Vista shall be personally liable to the Developer, or any successor in interest, in the event of any Default or breach by Agency or for ~y amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. The City is not a party to this Agreement and shall have no obligations hereunder. c. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in three (3) originals, each of which is deemed to be an original. Wakeland Pre development Loan Agreement Page 11 3-21 d. Integration. This Agreement, together with the ENA, contains the entire understanding between parties relating to the Predevelopment Loan contemplated by this Agreement. All prior or contemporaneous agreements, understanding, representations and statements, oral or written, related to the Predevelopment Loan are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement base solely upon the representation set forth herein and upon each party's own independent investigation of any and all facts such party deems material. e. No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreement under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. f. Modifications. Any alteration, change, or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. g. Severability. If any term, provision, condition, covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable,the remainder of this Agreement, or the application of the tenn, provisions, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. h. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legat counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. i. Time of Essence. Time is expressly made of the essence with respect to the performance by the parties of each and every obligation and condition of this Agreement. j. Cooperation. Each party shall cooperate with the other in this transaction and, in that regard, sign any and all documents which may be reasonably necessary, helpful, or appropriate to canj c5ut the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. k. Definitions. Any terms used in this Agreement but not separately defined herein shall have the meaning given to such terms in the ENA. [NEXT P~.9E IS SIGNATURE PAGE] Wakeland Predevelopment Loan Agreement Page 12 3-22 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date specified herein. "AGENCY" REDEVELOPNIENT AGENCY OF THE CITY OF CHULA VISTA, a public body, corporate and politic By: Stephen C. Padilla, Chair ATTEST: Dana M. Smith, Secretary APPROVED AS TO FORM: Ann Moore, Agency Attorney "BORRO'NER" WAKELAND HOUSING & DEVELOPMENT CORPORATION a Califo Nonprofit Public Benefit Corporation B)" i cL~ 'Kenneth L. Sauder, President and CEO Wakeland Predevelopment Loan Agreement Page 13 3-23 EXHIBIT "A" Exclusive Negotiating Agreement TimelinelBudget ALTA Survey Site Feasibility Study Soils Report Phase I Environmental Phase II Environmental (if necessary) Preliminary Civil Engineering Analysis Site Adequacy PubHc Workshop #1 Entitlement Applications Project Description, Site Plans and Elevations Zoning Amendment Environmental Review Project Development Schedule Housing Advisory Commission Agency Funding Application Agency Funding Workshop #2 Final Site Plans and Elevations Developer to obtain a AL T A Survey on the subject Property Developer to perform a Site Feasibility Study on the subject Property Developer to obtain a Soils Report on the subject Property Developer to obtain a Phase I Environmental on the subject Property Developer to obtain a Phase I1 Environmental on the subject Property (if necessary) Developer to perform a Preliminary Civil Engineering Analysis on the subject Property Developer shall provide written determination of whether the subject Property is physically suitable for development taking into account regulatory and environmental conditions that are deemed relevant Developer to conduct a pre-design workshop to gather input from the public and stakeholders on the design parameters and framework for the subject Property Completed Within 150 Days of ENA Execution $25,000 Developer to submit applications for Initial Study and Rezone Developer to submit project description, preliminary site plans and elevations based on pre-design review with staff and public input received at Public Workshop #1 City shall initiate an amendment, to the zoning on the site to aiiow an all residential, multi~family development City shall initiate the environmental review of the project Developer to submit projected timeline and schedule for the construction of the proposed development Developer to present project proposal to the Housing Advisory Commission Developer to submit application for Agency funding on the subject property Agelfcy to decide on funding commitment for project (need 30 days between application and Agency meeting) Within 180 Da S orENA Execution Developer to Workshop to present proposed development Within 210 Days arENA Execution Developer to Final site plans and elevations $50,000 Exhibit A - Wakeland Predevelopment Loan Agreement Page 1 3-24 MILESTONE DESCRIPTION Agency Contribution Final Pro Forma Developer to submit final pro forma based on revised site plans and elevations Funding Partners and Developer to Identification of lenders and fmancing commitment Structure Environmental City to issue environmental and zoning approvals Review Within 240 Days of ENA E.xecution I CYRC Presentation Developer to present development proposal and Affordable Housing Agreement for review and consideration. CYRC adopts advisory recommendations for Agency and/or Council consideration. Redevelopment Developer to present development proposal to Agency for final review and - Agency consideration. Within 300 Davs of ENA Execution r $100,000 Funding Application Developer to prepare and submit outside funding applications Project Design Developer to complete construction draw.ings based on pre-design review with staff and public input received at Public Workshops Exhibit A - Wakeland Predevelopment Loan Agreement 3-25 Page 2 EXHIBIT "R" ASSIGNMENT OF PLANS The undersigned, WAKELAND HOUSING AND DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("Developer"), as of this 1 Olh day of August, 2006, hereby assigns to the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body, corporate and politic ('"Agency"), all of its rights, title and interest in and to: 1. All architectural, design, engineering and development agreements, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively, "Architectural Agreements"); and, - 2. All plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively "Plans and Specifications") heretofore or hereafter entered into or prepared by any architect, engineer or other person or entity (collectively "Architect"), for or on behalf of Developer in connection with the development of the multifamily housing project (the "Project") referenced in the Predevelopment Loan Agreement" between Developer and Agency dated as of August 10, 2006. The Plans and Specifications, as of the date hereof, include, but are not limited to: ALTA Survey, site feasibility study, soils report, environmental reports, preliminary civil engineering analysis, and those which Developer has heretofore, or with hereafter deliver to Agency. The Architectural Agreements include, but are not limited to: site plans and architectural elevations and those which Developer has heretofore, or will hereafter deliver to Agency. This Assignment of Plans ("Assignment") constitutes a present and absolute assignment to Agency as of the Effective Date; provided, however, Agency conferes upon Developer the right to enforce the terms of the Architectural Agreements .and Developer's right to the Plans and Specifications so long as the Predevelopment Loan has not become due and payable. Upon the date that the Predevelopment loan becomes due and payable, the Agency may, in its sole discretion, give notice to Architect of its intent to enforce the rights of Developer under the Architectural Agreements and of its rights to the Plans and Specifications and may initiate or participate any legal proceedings respecting the enforcement of said rights. Developer acknowledges that by accepting this Assignment, Agency does not assume any of Developer's obligations under the Architectural Agreements or with respect to the Plans and Specifications. Developer represents and warrants to Agency, as of the date hereof, that: (a) all Architectural Agreements entered into by Developer are in full force and effect and are enforceable in accordance with their terms and no default , or event which would constitute a default after notice or the passage of time, or both, exists with respect to said Architectural Agreements; (b) all copies of the Architectural Agreements and Plans and Specifications delivered to Agency are complete and correct; and (c) Developer has not assigned any of its rights under the Architectural Agreements or with respect to the Plans and Specifications. Exhibit B - Wakeland Predevelopment Loan Agreement 3-26 Page 1 Developer agrees: (a) to pay and perform aU obligations of Developer under the Architectural Agreements; (b) to enforce the payment and performance of all obligations of any other person or entity under the Architectural Agreements; (c) not to modify the existing Architectural Agreements nor to enter into any future Architectural Agreements without Agency's prior written approval, except as otherwise may be pennitted in the Predevelopment Loan Agreement; and (d) not to further assign, for security or any other purpose, its rights under the Architectural Agreements or with respect to the Plans and Specifications without Agency's prior written consent. This Assignment secures payment and performance by Developer of all obligations of Developer under the Predevelopment Loan Agreement. This Assignment is supplemental by any applicable provisions of the Predevelopment Loan Agreements and said provisions are incorporate~ herein by reference. This Assignment shall be governed by the laws of the State of California, and Developer consents to the jurisdiction of any State Court with the State of California having proper venue for the filling and maintenance of any action arising hereof under and agrees that the prevailing party in any such action shall be entitled, in addition to any other recovery, to reasonable attorney's fees and costs. This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successor's in interest of Developer and Agency. The attached Architects/Engineer's consent(s) is/are incorporated by reference. "DEVELOPER" By: WAKELAND HOUSING & DEVELOPMENT CORPORA nON, a. California Nonprofit Public Benefit Corporation I- -d-c-, Kenneth 1. Sauder, President and CEO. '-- o -of-ubi Date: Exhibit B - Wakeland Pre development Loan Agreement 3-27 Page 2 Signature Page Continued "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body, corporate and politic By: Stephen C. Padilla, Chair Date: ATTEST: Dana M. Smith, Secretary ~.~.- Exhibit B - Wakeland Predevelopment Loan Agreement 3-28 Page 3 ATTACHMENT 2 lOCATION MAP 1501 Broadway 3-29 Attachment 3 WAKELAND HOUSING AND DEVELOPMENT CORPORATION TOWN SQUARE ROWHOMffiS · Town Square Rowhomes is located in tJ+e "Brick Row" Neighbbrhood at 9th Street and "A" Avenue in National City-: · Town Square Row Homes is a new construction project of 6 detached homes. The homes were sold to families earning approximately 90% area median income. Two units are income restricted at 120% -area median income. · The development is in the Redevelopment Area of National City, and is consistent with the objective of the City's Redevelopment Plan - to promote home ownership. · The units are appro~ately 1,500 square feet, three bedrooms and three baths. i · Each unit is based on a three story neo- Victorian design that includes a large room for a ground level business use, if desired by the owner. · The property was developed by Town Square Rowhomes, LLC. · Sources of funds for the development are Low-Income Housing Fund, National City Community Development Commission, with conventional take-out financing being offered to the homeowners through Wells Fargo Bank. 3-30 Construction began in July 2001. and was comnleted in June )()n') -"";, WAKELAND HOUSING AND DKVELOPlVIENT CORPORATION BEYER COURTYARDS ....-r , ;/ · Located at 3300 Beyer Blvd in San Ysidro. · New construction development of 60 units, ;primarily targeting very -low income households. ,~ · 2 and 3 bedroom rental units. · Financing sources are Bonds and 3% Tax CreditS. · Construction was recently completed in April 2006. .1 3-31 WAKELAND HOUSING AND DEVELOP:M:ENT CORPORATION L~LIAN'S PLACE · Located at 1401 J Street in Dovmtown San Diego. · 4 story (on J Street) and 3 Story new structures, plus a rehabilitated historic 2 story building (on the comer of 14th and 1), surrounding a series of connected courtyards and recreation spaces. · 74 units with a planned unit mix as follows; 23 one bedroom, 27 twq bedroom, 23 three bedroom and 1 manager's unit. Three of the. 3 bedroom units will befthree stqry townhomes, suitable as a live (work environment, targeted to 110% AMI households. · A community center will include the property manager's office, a computer learning center and and other resident services activities. · A separate room will be set-aside to show an exhibit commemorating the history of the site (to be open to the public on a scheduled basis) · Lillian Place is a joint venture between Wakeland and Interfaith Housing Assistance Corporation. : : · Financing sources are ~e City of San Diego (NOF A funding), 9% tax credits, Affordable Housing Program funding, Wells Fargo Bank construction loan, CCRC permanent fmancing. · Construction began in November 2004 and is expected to be completed by Summer 2006. 3-32 RDA RESOLUTION NO. 2006- RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VIST A APPROVING [A] A PREDEVELOPMENT LOAN AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY AND WAKELAND HOUSING AND DEVELOPMENT CORPORATION FOR THE DEVELOPMENT AND OPERATION OF AN AFFORDABLE RENTAL HOUSING DEVELOPMENT TO BE LOCATED AT 1501 BROADWAY IN THE CITY OF CHULA VIST A AND AUTHORIZING THE CHAIRMAN OF THE REDEVELOPMENT AGENCY TO EXECUTE SAID AGREEMENT; AND [B] APPROPRIATION OF $200,000 FROM THE UNAPPROPRIATED BALANCE IN THE LOW AND MODERATE INCOME HOUSING FUND FOR THE PREDEVELOPMENT LOAN TO WAKELAND HOUSING AND DEVELOPMENT CORPORATION WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 authorize and direct the Redevelopment Agency of the City of Chula Vista (the "Agency") to expend a certain percentage of all taxes which are allocated to the Agency pursuant to Section 33670 for the purposes of increasing, improving and preserving the community's supply of low and moderate income housing available at affordable housing cost to persons and families of low- and moderate-income, lower income, and very low income; and WHEREAS, pursuant to applicable law the Agency has established a Low and Moderate Income Housing Fund (the "Housing Fund"); and WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out its affordable housing activities, the Agency is authorized to provide subsidies to or for the benefit of very low income and lower income households, or persons and families of low or moderate income, to the extent those households cannot obtain housing at affordable costs on the open market, and to provide financial assistance for the construction and rehabilitation of housing which will be made available at an affordable housing cost to such persons; and WHEREAS, pursuant to Section 33413(b), the Agency is required to ensure that at least 15 percent of all new and substantially rehabilitated dwelling units developed within a project area under the jurisdiction of the Agency by private or public entities or persons other than the Agency shall be available at affordable housing cost to persons and families of low or moderate income; and WHEREAS, Wakeland Housing and Development Corporation ("Developer") proposes to construct an affordable rental housing development targeting predominately extremely low and very low households at 50 percent or less of the Area Median Income (AMI) to be located at 1501 Broadway within the Merged Chula Vista Project Area ("Project"); and 3-33 RDA Resolution No. 2006- Page 2 WHEREAS, in order to carry out and implement the Redevelopment Plan for the Agency's redevelopment projects and the affordable housing requirements and goals thereof, the Agency and City propose to enter into an Agency Predevelopment Loan Agreement (the "Predevelopment Loan Agreement") with the Developer, pursuant to which the Agency would make a predevelopment loan to the Developer (the "Predevelopment Loan"), and the Developer would agree to develop the Project for occupancy of all apartment units in the Project to very low and lower income households and rent those units at an affordable housing cost; and WHEREAS, the Agency Predevelopment Loan Agreement will leverage the investment of the Agency and City by requiring the Developer to obtain additional financing for the construction and operation of the Project through such resources as "9% Tax Credits" to be generated by the Project; and WHEREAS, the Project is located within the Agency's Merged Chula Vista Redevelopment Project Area and development and operation of the Project pursuant to the Agency Agreement would benefit the Agency's redevelopment project areas by providing affordable housing for persons who currently live and work within those redevelopment project areas; and WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and Safety Code Section 33490, which sets forth the objective of providing housing to satisfy the needs and desires of various age, income and ethnic groups of the community, and which specifically provides for the rehabilitation of rental housing units through Agency assistance; and WHEREAS, the Environmental Review Coordinator 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 defmed 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 necessary; and WHEREAS, the Agency Agreement furthers the goals of the Agency to facilitate the creation of affordable housing which will serve the residents of the neighborhood and the City as set forth in the Implementation Plan; and WHEREAS, the Agency have duly considered all terms and conditions of the proposed Agency Loan Agreement and believes that this Loan Agreement is in the best interests of the Agency and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable State and local law requirements; NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VIST A DOES RESOLVE AS FOLLOWS: Section 1. The Agency hereby finds that the use of funds from the Agency's Low and Moderate Income Housing Fund pursuant to the Predevelopment Loan Agreement, to 3-34 RDA Resolution No. 2006- Page 3 facilitate the development and operation of real property will be of benefit to the Agency's redevelopment project areas for the reasons set forth above. Section 2. The Agency hereby approves [A] A Predevelopment Loan Agreement in substantially the form presented to the Agency, subject to such revisions as may be made by the Agency Executive Director/City Manager or his designee subject to the review and approval of the Agency/City Attorney, with Wakeland Housing and Development Corporation for the development of an affordable rental housing development located at 1501 Broadway and; [B] appropriation of $200,000 from the unappropriated balance in the Low And Moderate Income Housing Fund for said Predevelopment Loan to Wakeland. PRESENTED BY APPROVED AS TO FORM BY Ann Hix Assistant Director of Community Development ~C~fvLeGoJ4z' ~ Ann oore Agency Attorney 3-35