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HomeMy WebLinkAboutRDA Packet 1994/09/20 Tuesday, September 20, 1994 Council Chambers 6:00 p.m. Public Services Building (immediately following the City Council meeting) Joint Meeting of the Redevelopment Agencv/Citv Council of the Citv of ChDla Vista CALL TO ORDER 1. ROLL CALL: Agency/Council Members Fox -, Horton -, Moore_, Rindone -, and ChainnanlMayor Nader -' 2. APPROVAL OF MINUTES: September 6, 1994 CONSENT CALENDAR (Items 3 through 4) The staff recommendations regarding the following items listed under the Consent Calendar will be enacted by the Agency by one motion without discussion unless an Agency, a member of the public or City staff requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak Form" available in the lobby and submit itto the Secretary of the Redevelopment Agency or the City Clerk prior to the meeting. (Complete the green form to speak in favor of the staff recommendation; complete the pink form to speak in opposition to the staff recommendation.) Items pulled from the Consent Calendar will be discussed after Action Items. Items pulled by the public will be the first items of business. 3. WRITTEN COMMUNICATIONS: 4.A. AGENCY RESOLUTION 1419 APPROVING MATTERS RELATED TO THE SALE OF TAX ALLOCATION BONDS AUTHORIZED TO BE ISSUED UNDER RESOLUTION 1383 WITH RESPECT TO THE MERGED BA YFRONT/ TOWN CENTRE REDEVELOPMENT PROJECT AREA -- Pursuant to previously adopted Resolutions 1383 and 1400, approval was requested for matters related to the sale of tax allocation bonds for the purpose of refinancing existing debt in the Bayfront/Town Center Project Area. Under current market couditions it is anticipated that a successful refunding could achieve savings of more than $1 ,000,000 over the life of the issue. Staffrecommends approval of the resolutions. (Agency Treasurer/Director of Finance) B. COUNCIL RESOLUTION 17659 APPROVING ISSUANCE OF REFUNDING TAX ALLOCATION BONDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA RELATING TO THE MERGED BAYFRONT/TOWN CENTRE REDEVELOPMENT PROJECT AREA . . END OF CONSENT CALENDAR" ..-. Agenda -2- September 20, 1994 PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES The following items have been advertised and/or posted as public hearings as required by law. If you wish to speak to any item, please fill out the "Request to Speak Form" available in the lobby and submit it to the Secretary of the Redevelopment Agency or the City Clerk prior to the meeting. (Complete the green form to speak in favor of the staff recommendation; complete the pink form to speak in opposition to the staff recommendation.) Comments are limited to five minutes per individual. 5.A. PUBLIC HEARING APPLICATION FOR SPECIAL LAND USE PERMIT FOR THE CONTINUATION OF AUTO DISMANTLING BUSINESS AT 777 ENERGY WAY and B. PUBLIC HEARING APPLICATION FOR SPECIAL LAND USE PERMIT FOR THE ESTABLISHMENT OF AN AUTO RECYCLING BUSINESS AT 775 ENERGY WAY C. AGENCY RESOLUTION 1420 MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL PERMIT (SUP 93-08) TO D&P AUTO DISMANTLING, FARE'S AUTO RECYCLING, R.C. IMPORT AUTO RECYCLING, AND TRUEWAY AUTO DISMANTLING FOR CERTAIN DESIGNATED AUTO WRECKING USES AT 777 ENERGY WAY, CHULA VISTA, CALIFORNIA; PARCEL BEING LOCATED WITHIN THE OTAY V ALLEY ROAD PROJECT AREA-- These type businesses were conditionally approved under PCC-?3-2? in 1973. City staff has been working over the past two years to process Special Land Use Pennits if the businesses are brought into confonnity to Agency site criteria, principally parking and landscaping. The Agency is requested to hold public heariugs for two curreut applications to coutinue auto recycling businesses: in the case of77? Energy Way, the request is to continue businesses currently located on the property; the second request, 775 Energy Way, is for a new auto wrecking business replacing a previous one. Staff recommends approval of the resolutions. (Community Development Department) D. AGENCY RESOLUTION 1421 MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL PERMIT (SUP 94-02) TO AMERICAN AND FOREIGN AUTO WRECKING FOR CERTAIN DESIGNATED AUTO WRECKING USES AT 775 ENERGY WAY, CHULA VISTA, CALIFORNIA; PARCEL BEING LOCATED WITHIN THE OT A Y V ALLEY ROAD PROJECT AREA ORAL COMMUNICATIONS This is an opportunity for the general public to address the Redevelopment Agency on any subject matter within the Agency's jurisdiction that is not an item on this agenda. (State law, however, generally prohibits the Redevelopment Agency from taking action on any issues not included on the posted agenda.) If you wish to address the Council on such a subject, please complete the yellow "Request to Speak Under Oral Communications Form" available in the lobby and submit it to the Secretary to the Redevelopment Agency or City Clerk prior to the meeting. Those who wish to speak, please give your name and address for record purposes and follow up action. Your time is limited to three minutes per speaker. -_. - Agenda -3- September 20, 1994 ACTION ITEMS The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by the Agency, staff, or members of the general public. The items will be considered individually by the Agency and staff recommendations may in certain cases be presented in the aliernative. Those who wish to speak, please fill out a "Request to Speak" form available in the lobby and submit it to the Secretary to the Redevelopment Agency or the City Clerk prior to the meeting. Public comments are limited to five minutes. 6.A. AGENCY RESOLUTION 1422 APPROVING MODIFICATION OF LOAN BY AGENCY TO PARK VILLAGE APARTMENTS LIMITED PARTNERSHIP IN CONNECTION WITH 28 UNIT AFFORDABLE HOUSING PROJECT LOCATED AT 1246-1256 THIRD AVENUE AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE LOAN MODIFICATION AGREEMENT, SUBORDINATION AGREEMENTS, AND ASSOCIATED DOCUMENTS-- In 1992 the Agency approved a $350,000 loan to Civic Center Barrio Housing Corporation to develop a 28-unit affordable housing project (Park Village Apartments). A modification to the Loan Agreement is recommended which will facilitate pennanent financing of the project. Staff recommends approval of the resolutions. (Community Development Director) B. COUNCIL RESOLUTION 17665 APPROVING AMENDED AND RESTATED GROUND LEASE AND LEASE RIDER AND ESTOPPEL AGREEMENT IN CONNECTION WITH AGENCY LOAN MODIFICATION WITH PARK VILLAGE APARTMENTS AND AUTHORIZING CITY MANAGER TO EXECUTE SAME 7. RESOLUTION 1423 ADOPTING NEGATIVE DECLARATION IS-93-07 FOR TROLLEY TERRACE DEVELOPMENT, APPROVING THE APPROPRIATION OF $643,000 FROM THE LOW AND MODERATE INCOME HOUSING FUND TO PURCHASE REAL PROPERTY LOCATED AT 746 AND 750 ADA STREET FOR DEVELOPMENT OF AFFORDABLE HOUSING AND DAY CARE FACILITY, AND AUTHORIZING EXECUTIVE DIRECTOR TO EXECUTE PURCHASE AND SALE DOCUMENTS IN A FORM APPROVED BY THE AGENCY GENERAL COUNSEL -- At the City Council meeting of 7-19-94, Council approved the opening of escrow for the purchase of real property located at 746 and 750 Ada for development of affordable housing and a day care facility and appropriated HOME program funds therefor. Due to new interpretation of the HOME Program regulations the use of these funds cannot be used until the project is in a more advanced stage. Therefore, low and moderate income housing funds are needed temporarily in order to close escrow. Staff recommeuds approval of the resolution. (Community Development Director) ITEMS PULLED FROM THE CONSENT CALENDAR This is the time the Redevelopment Agency will discuss items which have been removed from the Consent Calendar. Agenda items pulled at the request of the public will be considered prior to those pulled by Agency Members. Public comments are limited to five minutes per individual. .---- Agenda -4- September 20, 1994 OTHER BUSINESS 8. DIRECTOR'S/CITY MANAGER'S REPORT(S) 9. CHAIRMAN'SIMA YOR'S REPORT(S) 10. AGENCY/COUNCIL MEMBER COMMENTS ADJOURNMENT The meeting will adjourn to the Regular Redevelopment Agency Meeting on October 4, 1994 at 4:00 p.m., immediately following the City Council meeting, in the City Council Chambers. ****** COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT The City of Chula Vista, in complying with the Americans With Disabilities Act (ADA), request iudividuals who reqnire special accommodations to access, attend, and/or participate in a City meeting, activity, or service request such accommodation at least forty-eight hours in advance for meetings and five days for scheduled services and activities. Please contact the Secretary to the Redevelopment Agency for specific infonnationat (619) 691-5047 or Telecommunications Devices for the Deaf (TDD) at (619) 585-5647. California Relay Service is also available for the heariug impaired. [C:I WP51 IAGENCYIAGENDASIO9-20-94. AGD] MINUTES OF A SPECIAL JOINT MEETING OF THE REDEVELOPMENT AGENCY/ CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, September 6, 1994 Council Chambers 10:40 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Council Members Fox, Horton, Rindone, and Chairman Nader ABSENT: Agency/Council Member Moore ALSO PRESENT: Sid Morris, Assistant City Manager; Bruce M. Boogaard; Agency/City Attorney; and Beverly A. Authelet, City Clerk 2. APPROVAL OF MINUTES: August 16,1994 MSC (HortonlRindone) to approve the minutes of August 16, 1994 as presented. Approved 4-0-1 with Moore absent. CONSENT CALENDAR (Items pulled: none) CONSENT CALENDAR OFFERED BY AGENCY/COUNCIL MEMBER HORTON, reading of the text was waived, passed and approved 4-0-1 with Moore absent. 3. WRITTEN COMMUNICATIONS: None submitted. 4.A. RESOLUTION 1418 APPROVING A FINAL RENTAL ASSISTANCE PAYMENT IN THE AMOUNT OF $3,300 PURSUANT TO THE ADOPTED RELOCATION PLAN FOR THE FINAL RENTAL UNIT HOUSEHOLD FORMERLY RESIDING AT 459 "F" STREET WITHIN THE TOWN CENTRE n REDEVELOPMENT PROJECT AREA - The City and Redevelopment Agency purchased the property at 459 "F" Street as part of the adopted Chula Vista Master Plan Expansion Project. On 7/19/94, the Council/Agency approved Final Rental Assistance and Last Resort Housing payments for three of the remaining four households that needed to be paid. Council and Agency are now requested to approve the final claim which concludes all relocation payments for the project. Staff recommends approval of the resolutions. (Director of Community Development) B. RESOLUTION 17632 AUTHORIZING THE EXPENDITURE OF $3,300 FROM THE CMC CENTER EXPANSION PROJECT (ACCOUNT NUMBER GC-130) C.I.P. FOR THE PAYMENT OF A FINAL RENTAL ASSISTANCE PAYMENT TO THE FINAL RENTAL UNIT HOUSEHOLD FORMERLY RESIDING AT 459 "F" STREET * * END OF CONSENT CALENDAR * * PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES None submitted. J-I Minutes September 6, 1994 Page 2 ORAL COMMUNICATIONS None ACTION ITEMS None submitted. ITEMS PULLED FROM THE CONSENT CALENDAR None OTHER BUSINESS 5. DIRECTOR'S/CITY MANAGER'S REPORT(s) - None 6. CHAIRMAN'S/MA YOR'S REPORT(s) - None a. Ratification of re-appointment of Daniel L. Mason to the Town Centre Project Area Committee, and John J. McMahon to the Otay Valley Road Project Area Committee. MSC (NaderlHnrton) to approve the ratification of re-appoinbnent of Daniel L. Mason to the Town Centre Project Area Committee and John J. McMahon to the Otay Valley Road Project Area Committee. Approved 4-0-1 with Moore absent. 7. AGENCY/COUNCIL MEMBER COMMENTS - None ADJOURNMENT ADJOURNMENT AT 10:43 p.m. to the Regular Meeting of the Redevelopment Agency on Tuesday, September 20, 1994 at 6:00 p.m., immediately following the City Council Meeting, in the City Council Chambers. by: ),-2- REDEVELOPMENT AGENCY/CITY COUNCIL AGENDA STATEMENT Item 4a and 4b Meeting Date 9/20/94 ITEM TITLE: Agency Resolution Approving matters related to the sale of tax allocation bonds authorized to be issued under resolution 1383 with respect to the merged Bayfront/Town Centre Redevelopment Project Area Council Resolution Approving issuance of refunding tax allocation bonds by the Redevelopment Agency of the City of Chula Vista relating to the merged Bayfront/Town Centre Redevelopment Project Area SUBMITTED BY: Agency Treasurer/Director of FinancerlfJ REVIEWED BY: Executive r;}:f!~~:3J!- Manager (4/5ths Vote: Yes _No..lL_J SUMMARY: On December 28, 1993, the Redevelopment Agency authorized the issuance of 1994 Tax Allocation Bonds for advance refunding of the 1986 Tax Allocation Bonds previously issued by the Agency for the Bayfront/Town Centre Redevelopment Project. The primary purpose of the refunding is to achieve savings in annual debt service payments. At that time, the Agency also authorized initiation of judicial proceedings to determine the validity of such an issue (Resolution No. 1383 attached). A Default Judgement in favor of the Agency was filed by the court on May 19, 1994, and the sixty-day appeal period expired on July 18, 1994. On May 3, 1994, the Agency authorized appointment of the members of a financing team to handle all facets of the debt refunding, including underwriters, bond counsel, and a financial advisor (Resolution No. 1400 attached). q-\ Page 2. Item 4 Meeting Date 9/20/94 Section 33640 of the Health and Safety Code requires Council approval of Redevelopment Agency Bonds. Approval of the attached resolution will satisfy that requirement. Under current market conditions, it is anticipated that a successful refunding could achieve net present value debt service savings over the life of the issue of more than $1 million, with average annual debt service savings in excess of $450,000 over the life of the existing debt. RECOMMENDATION: AGENCY: Approve the resolution approving matters related to the sale of Tax Allocation Bonds authorized to be issued under Resolution No. 1383 with respect to the merged Bayfront/Town Centre Redevelopment Project Area. COUNCIL: Approve the resolution approving sale of Tax Allocation Refunding Bonds by the Redevelopment Agency of the City of Chula Vista relating to the merged Bayfront/Town Centre Redevelopment Project Area. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable DISCUSSION: The Agency previously authorized issuance of tax allocation bonds for the refunding of the 1986 Tax Allocation Bonds, pursuant to Resolution No. 1383 adopted on December 28, 1993. The resolution was adopted at that time in order to grandfather the Bond issue from pending legislation known as "AB1290" which took effect on January 1, 1994 and which had specific language exempting bond issues authorized before that date. There was an urgency to grandfather the Bonds from AB1290 because the bill threatened to impose severe restraints on the maturities of Agency bonds. Specifically, AB1290 states that a redevelopment agency's bonds cannot mature more than 10 years following the termination of the redevelopment plan. Prior to the adoption of AB1290, the Agency was able to issue bonds which matured at anv time, a result which followed from a 1993 decision in the Countv of Santa Clara v. RedeveloDment Aaencv of the Citv of San Jose court case. Unfortunately, the redevelopment plan for the Bayfront Project Area terminates on January 16, 1999 and the redevelopment plan for the Bayfront Project Area terminates on July 28, 2001. If AB1290 were to apply to the Bonds, they could not mature later than 2011, which would severely limit the Agency's ability to maximize the economic benefit from 4~d- -..-.-- Page 3. Item 4 Meeting Date 9/20/94 refinancing the 1986 Bonds. At the same time as the Bonds were authorized, the City Council adopted its ordinance amending certain limitations which were imposed on the Agency's ability to collect tax increment revenues. Specifically, in 1986 the City Council adopted an ordinance limiting tax collections from the Bayfront Project Area to $50 million; and from the Town Centre Project Area in the amount of $20 million. We took the position that these limits were adopted in error, and corrected them with an amending ordinance adopted on December 28, 1993. These actions, including the issuance of the Bonds, were validated in the San Diego County Superior Court. The Agency and the City have obtained a favorable judgment in that action, and the judgment is final at this time. Therefore, the Agency is free to issue the Bonds as currently proposed. At this time, the Agency proposes to ill the Bonds which were authorized by Resolution No. 1383. Because the Bonds have previously been authorized, the new Agency resolution only deals with the procedures for the sale of the Bonds and does not purport to re-authorize the issuance of the Bonds. Accordingly, the Agency resolution: 1. Authorizes Agency staff to award the sale of the Bonds to the underwriting team which was appointed by Resolution No. 1400 adopted on May 3, 1994, specifically, Grigsby, Brandford & Co., Inc. and Donaldson, Lufkin & Jenrette. Included in this authorization is a delegation of authority to the Executive Director and the Treasurer to sign an agreement with the underwriters for the sale of the Bonds. Also, there is clarification that the underwriting fee shall not exceed 1 % of the par value of the bonds plus actual expenses, for a total discount not to exceed 1.2%. 2. Approves the Preliminary Official Statement in the form on file, and authorizes it to be distributed by the underwriters in connection with the sale of the Bonds. The resolution also authorizes the Official Statement to be put in final form once the Bonds have been sold, and authorizes the Executive Director to sign on behalf of the Agency. 3. Approves the final form of the various documents pursuant to which the Bonds are issued, including the Indenture of Trust, as well as an Escrow Deposit and Trust Agreement which governs the mechanics of the refunding, including the investment of funds in federal securities so as Lt~~ ..... Page 4, Item 4 Meeting Date 9/20/94 to collateralize fully the 1986 Bonds. 4. Authorizes Agency staff to take all actions as may be necessary to close the Bond issue, including execution of all required closing documents. Section 33640 of the Health and Safety Code requires Council approval of Redevelopment Agency Bonds. Accordingly, the attached City Council resolution approves the issuance of 1994 Tax Allocation Refunding Bonds by the Redevelopment Agency of the City of Chula Vista relative to the Bayfront/Town Centre Project Area. FISCAL IMPACT: In the recently adopted Agency budget for fiscal year 1994-95, $2,314,960 was included for debt service on the 1994 Tax Allocation Refunding Bonds. That figure was the best estimate available at that time. Although the current estimate is slightly less at $2,289,841, the actual figure will depend on market conditions on the date the bonds are priced. Largely due to only having to fund one semi-annual debt service payment during the initial year of the issue, savings for fiscal year 1994-95 over the existing debt service requirements for the 1986 bonds is in excess of $800,000. Average annual savings over the remaining life of the 1986 bonds were estimated to be in excess of $650,000 in the recent budget presentation. The current estimate is now between $450,000 and $650,000. It is impossible to be more precise at this time due to uncertainties in the ultimate structure of the borrowing. The uncertainties are related to the interpretation of recently passed AB413 which places certain restrictions on refinancing involving pledged special subvention revenue, such as this transaction. We have asked the State Controller for clarification and are hopeful of achieving a positive response, which will lead to the higher annual savings. L¡-/Y I} I) ¡j TT AC.H /YJ EN T RESOLUTION 1383 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING THE ISSUANCE AND SALE OF TAX ALLOCATION BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $37,500,000 RELATING TO THE BAYFRONT/TOWN CENTRE REDEVELOPMENT PROJECT AREAS, AUTHORIZING AND DIRECTING EXECUTION OF RELATED INDENTURE OF TRUST, AND AUTHORIZING INSTITUTION OF JUDICIAL PROCEEDINGS TO DETERMINE THE VALIDITY THEREOF WHEREAS, the Agency is a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part I of Division 24 of the Health and Safety Code of the State of California (the "Redevelopment Law"), including the powers to issue bonds for any of its corporate purposes; and WHEREAS, Redevelopment Plans for the Bayfront Redevelopment Project and the Town Centre Redevelopment Project, in the City of Chula Vista, California, (collectively, the "Redevelopment Project") have been adopted and the Project Areas defined therein have been merged, all in compliance with all requirements of the Redevelopment Law; and WHEREAS, the Agency has heretofore issued its Redevelopment Agency of the City of Chula Vista Bayfrontrrown Centre Redevelopment Project 1979 Bonds in the aggregate principal amount of $7,150,000 (the "1979 Bonds") pursuant to Resolution No. 206 adopted September 18, 1979 and its Redevelopment Agency of the City of Chula Vista Bayfrontrrown Centre Redevelopment Project 1984 Tax Allocation Notes in the aggregate principal amount of $25,000,000 (the "1984 Notes") pursuant to Resolution No. 480 adopted February 2, 1984, as amended on June 21, 1984, to assist the financing of the Redevelopment Project; and WHEREAS, a portion of the proceeds of the 1984 Notes has been applied to advance refund the 1979 Bonds, thereby discharging such Resolution No. 206, and in addition the Agency has previously issued its $38,655,000 aggregate principal amount of Redevelopment Agency of the City of Chula Vista Bayfrontrrown Centre Redevelopment Project 1986 Tax Allocation Bonds (the "1986 Bonds") pursuant to the Redevelopment Law for the purpose of providing funds to advance refund the 1984 Notes and to provide additional financing for the Redevelopment Project; and WHEREAS, the Agency wishes at this time to authorize the issuance of its Redevelopment Agency of the City of Chula Vista Bayfrontrrown Centre Redevelopment Project 1984 Tax Allocation Bonds (the "Bonds") for the purpose of advance refundin~ a portion of the 1986 Bonds. NOW, THEREFORE, be it resolved, determined, and ordered by the Redevelopment Agency oc the City oc Chula Vista as Collows; Section 1. Issuance oC Bonds; Approval oC Indenture. The Agency hereby authorizes the issuance of the Bonds in the aggregate principal amount of not to exceed $37,500,000 for the purpose of providing moneys to advance refund a portion of the 1986 Bonds and to provide additional financing for the Redevelopment Project. The Bonds shall be issued pursuant to an Indenture of Trust dated as of February 1. 1994, by and betWeen the Agency and First Interstate Bank of California as trustee (the "Indenture"), in substantially the fonn on file with the Secretary. together with such additions thereto and changes therein as the Executive Director shall deem necessary, desirable or appropriate, and the execution thereof by the Chairman shall be conclus\ve evidence of the approval of any such additions and 1-4-5 .~ RESOLUTION 1383 changes. The Chairman is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest and affix the seal of the Agency to, the final form of the Indenture for and in the name and on behalf of the Agency. The Agency hereby authorizes the delivery and performance of the Indenture. Section 2. Sales of Bonds. The Bonds shall be sold in such manner as shall he approved by resolution of the Agency adopted following the adoption of this Resolution and prior to the sale thereof. In connection with the sale of the Bonds, the Agency shall cause to be prepared an Official Statement describing the Bonds, which OfficiaJ Statement shall not be distributed until the form thereof shall have been approved by resolution of the Agency in accordance with Rule l5c2-12 of the Securities Exchange Act of 1934. Section 3. Interpretation of this Resolution. It is the intention of the Agency in adopting this Resolution that the issuance of the Bonds shall be fully authorized by the Agency with the effect set forth in Section 33333.6(h) of the Redevelopment Law, as such Section has been enacted pursuant to Assembly Bill 1290, known as the Community Redevelopment Law Reform Act of 1993. The sale of the Bonds shall be subject to compliance with all procedures required by law, provided that any action taken by the Agency to comply with such procedures shall not constitute a new or an additional authorization of the issuance of the Bonds. Section 4. Institution of Judicial Validation Proceedings. In order to determine the validity of the Bonds, the Agency hereby authorizes the law firm of Jones HaJI Hill & White, A Professional Law Corporation, in concert with the Agency Attorney, to prepare and cause to be filed and prosecuted to completion all proceedings required for the judicial validation of the bond in the Superior Court of San Diego County, under and pursuant to the provisions of Section 860 ~ ~ of the Code of Civil Procedure of the State of California. Section 5. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. PRESENTED BY: ~~ Chris Salomone, Executive Secretary and Community Development Director ./ ø ._~ rc"""'. /1..ul.- L£-< L Christopher Agency Treasurer ~ IC:\WPSIIAGENCY\RESOS\BA YfRON6.RES tf-(c .~ ~/' / 1fT p9é11 /?) r4- /1 RESOLUTION NO. 1400 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA (~ .~ ,/ - !'. / VISTA, CALIFORNIA AUTHORIZING APPOINTMENT OF BOND UNDERWRITER, BOND COUNSEL AND FINANCIAL ADVISOR FOR THE PROPOSED NEGOTI- A TED SALE OF BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $30,000,000 FOR ADVANCE REFUNDING OF THE 1986 TAX ALLOCATION BONDS ISSUED BY THE REDEVELOPMENT AGENCY OF THE CITY OF CHUlA VISTA FOR THE BAYFRONT/TOWN CENTRE REDEVELOPMENT PROJECT; AND WAIVING THE CONSULTANT SELECTION PROCESS, AND APPROPRIATING FUNDS IN THE AMOUNT OF $25,000 9'7[1 'l,?('/;"-,~'I'/ .j ;f'-"- (:'7 ~¡J THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA- VISTA DOES ìV \ HEREBY FIND, DETERMINE, ORDER AND RESOLVE AS FOLLOWS: \ \,¡ S' 1 ThE' D' 'd' d . b' ["/'6/ ectlOn. executive Irector IS ,recte to negotiate, su Ject to j) \ \ subsequent Agency Board approval, the borrowing of funds by negotiating an .agreement with' \' , \'- Gngsby, Brandford & Co., Inc. and Donaldson, LufkIn & Jenrette for the Issuance of tax . ~ allocation bonds in an amount not to exceed $ 30,000,000 for the purpose of advance refunding the Agency's 1986 Tax Allocation Bonds, but on terms not inconsistent with a provision that the underwriter's discount from the par value of the bonds shall not exceed 1 %. As part of said negotiations, the City Manager may, in his discretion, propose for Agency approval, an interest rate exchange agreement by which the Agency may agree from time to time to make payments to GBDP, L.P. the interest rate exchange agreement provider and an affiliate of Grigsby Brandford & Co., Inc. based on a variable or fixed interest rate applied to a notional amount (as City Manager in his judgment determines appropriate) in exchange for payments to be made to the Agency by GBDP, loP.based on a fixed or variable interest rate applied to a notional amount. Section 2. Jones, Hall, Hill & White is hereby designated and retained pursuant to our pre-existing agreement with them for bond counsel services, as bond counsel to the Agency in connection with the issuance of such bonds, and in connection therewith, shall receive compensation only at thè time of sale, if it should occur. Section 3. The Agency does hereby approve the retention of Kelling, Northcross, & Nobriga, Inc. pursuant the City's standard form consulting agreement modified with such specific terms and conditions as shall be acceptable to the City Manager and City Attorney, but for an amount which shall not exceed $25.000; and upon the preparation of same, the Mayor is authorized to execute same. Section 4. The Agency hereby finds that the services required of the prospective underwriter and. as applicable. interest rate exchange agreement provider, bond counsel and financial advisor are highly specialized and that trust and confidence in such advisors and purchasers are a key component in the selection of same. Agency hereby waives the competitive bidding process for the services of an underwriter and interest rate exchange agreement provider, bond counsel and financial advisor. Section 5. This resolution shall take and be in full force and effect immediately upon the passage and adoption hereof. ,,(, - ,?-, ,.:1 4-1 ~ }fI4 D (./11. r"- "--, ,'--.., '.. Ii - Resolution No. 1400 ADOPTED AND APPROVED BY THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, this 3rd day of May 1994 by the following vote, to-wit: AYES: Members Rindone, Fox, Nader, Moore NOES: None ABSENT: Member Horton ABSTENTIONS: None /5/ Tim Nader Tim Nader Chairman ArrEST: ~~ ~ Chris Salomone Executive Secretary STATE OF CALIFORNIA) COUNTY OF SAN DIEGO) 55: CITY OF CHULA VISTA) I, Chris Salomone, Executive Secretary 10 the Redevelopment Agency of the City ofChula Vista, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. 1400 and that the same has nol been amended or repealed. Dated: May 4,_1994__- ~~ ~ Chris Salomone Executive Secretary 4-ß Resolution 1400 -:~\~ Page 2 Section 6. The City Clerk shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions of said City; and shall make a minute of the passage and adoPtion hereof in the minutes of tHe meeting at which the same is passed and adoPted. Presented by: e "JrJ? ~ AAAJ!/ Susan Merrill Interim Finance Administrator IC:I WP51 IA GE NCYIAESO SIBFA.BOND. A E S J ~-~ ; . This page intentionally left blank. l1-) D RESOLUTION NO. - RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROVING MATTERS RELATED TO THE SALE OF TAX ALLOCATION BONDS AUTHORIZED TO BE ISSUED UNDER RESOLUTION NO. 1383 WITH RESPECT TO THE MERGED BAYFRONTjTOWN CENTRE REDEVELOPMENT PROJECT AREA WHEREAS, the Agency is proceeding to implement the Redevelopment Plans for the merged Bayfront Redevelopment Project and Town Centre Redevelopment Project in the City of Chula Vista, California, and to provide funds for such purpose the Agency has previously issued its $38,655,000 aggregate principal amount of BayfrontjTown Centre Redevelopment Project 19086 Tax Allocation bonds (the "1986 Bonds"); and WHEREAS, the Agency has previously adopted its Resolution No. 1383 on December 28,1993, authorizing the issuance of bonds in the aggregate principal amount of not to exceed $37,500,000 (the "Bonds") to refund the 1986 Bonds, and the validity of the issuance of the Bonds and matters relating thereto has recently been determined by the San Diego County Superior Court; and WHEREAS, the Agency has also previously adopted its Resolution No. 1400 on May 3, 1994, limiting the amount of the Bonds which may be issued to $30,000,00 and engaging certain professional services in connection with the sale of the Bonds; and WHEREAS, the Agency wishes to take its action at this time directing the sale of the Bonds which have previously been authorized under Resolution No. 1383. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of Chula vista as follows: Section 1. Authorization to Staff to Complete Proceedinqs for Sale of Bonds. The Agency hereby authorizes and directs the Executive Director, the Treasurer and the Secretary of the Agency to undertake and complete all necessary proceedings for the sale of the Bonds to the underwriters engaged pursuant to Resolution No. 1400; provided, however, that the weighted average rate of interest borne by all of the Bonds (taking into account any original issue discount on the sale thereof) shall not exceed seven and one-half percent (7-1/2%) per annum and the amount of the underwriter's fee shall not exceed one percent (1%) of the par amount plus actual expenses. for a total qross underwriter's discount not to exceed 1. 2% of the par amount. The principal amount of the Bonds which may be sold shall not exceed the amount actually required to accomplish the refunding of the 1986 Bonds, 1 y-/\ provided that such amount shall, if necessary, be permitted to exceed the limit established by Resolution No. 1400. The Bonds may be issued and sold in the form of current interest bonds and/or capital appreciation bonds, as shall be determined by the Executive Director and the Treasurer upon consultation with the underwriters and the financial advisor appointed pursuant to Resolution No. 1400; and interest on a portion of the Bonds may be subject to federal income taxation, as shall be determined by the Executive Director and the Treasurer upon consultation with bond counsel appointed pursuant to Resolution No. 1400. The Bonds shall be sold pursuant to a Contract of Purchase among the Agency and the underwriters, in substantially the form on file with the Secretary, and the Executive Director or the Treasurer is hereby authorized to execute said Contract of Purchase in the name and on behalf of the Agency. section 2. Official Statement. The Agency hereby approves, and hereby authorizes the Executive Director to deem final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934 except for permitted omissions, a preliminary form of Official Statement describing the Bonds in the form on file with the Executive Director. Distribution of such preliminary Official Statement by the underwriters to prospective purchasers of the Bonds is hereby approved. The Executive Director is hereby authorized to execute the final form of the Official Statement, including as it may be modified by such additions thereto and changes therein as the Executive Director shall deem necessary, desirable or appropriate, and the execution of the final Official Statement by the Executive Director shall be conclusive evidence of the approval of any such additions and changes. The Agency hereby authorizes the distribution of the final Official Statement by the underwriters. The final Official Statement shall be executed in the name and on behalf of the Agency by the Executive Director. section 3. Approval of Final Form of Financinq Documents. The Agency hereby approves the form of the Indenture of Trust, providing the terms and conditions upon which the Bonds are issued, and the Escrow Deposit and Trust Agreement providing the terms and conditions upon which the 1986 Bonds are to be refunded, each by and between the Agency and First Interstate Bank of California, in substantially the respective forms on file with the Secretary, together with such additions thereto and changes therein as the Executive Director shall deem necessary, desirable or appropriate. The execution of such documents by the Chairman pursuant to the authority granted under Resolution No. 1383 shall be conclusive evidence of the approval of any such additions and changes. section 4. Official Actions. The Chairman, the Executive Director, the Treasurer, the Secretary and any other officers of the Agency are hereby authorized and directed, for and in the name and on behalf of the Agency, to do any and all things and take any and all actions, including execution and delivery of the documents 2 ~ /\).. described in Section 3 hereof and any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the Bonds as described herein. Whenever in this resolution any officer of the Agency is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. section 5. Effective Date. This Resolution shall take and be in full force and effect immediately upon the passage and adoption hereof. section 6. Certification Hereof. The Secretary of the Agency shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions of the Agency; and shall record the passage and adoption h f in e minutes of the meeting at which the same is passed a opte Presented by Robert w. Powell, Director of Finance C:\rsITaxBonds ~-I) ,? , . This page intentionally left blank. ~-\Y RESOLUTION NO. - RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING ISSUANCE OF REFUNDING TAX ALLOCATION BONDS BY THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA RELATING TO THE MERGED BAYFRONTjTOWN CENTRE REDEVELOPMENT PROJECT AREA WHEREAS, the Redevelopment Agency of the City of Chula vista (the "Agency") is proceeding to implement the redevelopment of the merged BayfrontjTown Centre Redevelopment Project in the City of Chula Vista, and to provide funds for such purpose the Agency has previously issued its $38,655,000 aggregate principal amount of BayfrontjTown Centre Redevelopment Project 1986 Tax Allocation Bonds (the "1986 Bonds"); and WHEREAS, the Agency has previously adopted its Resolution No. 1383 on December 28, 1993, authorizing the issuance of bonds in the aggregate principal amount of not to exceed $37,500,000 (the "Bonds") to refund the 1986 Bonds, and the validity of the issuance of the Bonds and matters relating thereto has recently been determined by the San Diego County Superior Court; and WHEREAS, the Agency has determined to proceed with the sale of the Bonds at this time, and in accordance with the requirements of section 33640 of the California Health and Safety Code, the City Council wishes to approve the issuance of the Bonds by the Agency. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula vista does hereby resolve, determine and order as follows: section 1. The issuance of the Bonds by the Agency in accordance with Resolution No. 1383 of the Agency be and is hereby approved. section 2. This Resolution shall take and be in full force and effect immediately upon the passage and adoption hereof. section 3. The City Clerk shall certify to the passage and adoption of this Resolution; shall enter the same in the book or original Resolutions of the City; and shall record the passage and adoption hereof in the minutes of the meeting at which the same is passed and adopted. .. Presented by Robert w. Powell, Director of Finance ~~lf) REDEVELOPMENT AGENCY AGENDA STATEMENT Item 5 il.-, b¡ <!., c{ Meeting Date 09/20/94 ITEM TITLE: PUBLIC HEARING APPLICATION FOR SPECIAL lAND USE PERMIT FOR THE CONTINUATION OF AUTO DISMANTLING BUSINESS AT 777 ENERGY WAY !\. and 13. PUBLIC HEARING APPLICATION FOR SPECIAL lAND USE PERMIT FORTHE ESTABLISHMENT OF AN AUTO RECYCLING BUSINESS AT 775 ENERGY WAY c.. RESOLUTION 1420 Making Certain Findings and Approving A Special Permit (SUP 93-08) to D&P Auto Dismantling, Fare's Auto Recycling, R.C. Import Auto Recycling, and Trueway Auto Dismantling for Certain Designated Auto Wrecking Uses at 777 Energy Way, Chula Vista, California; Parcel being located within the Otay Valley Road Project Area .b, RESOLUTION 1421 Making Certain Findings and Approving A Special Permit (SUP 94-02) to American and Foreign Auto Wrecking for Certain Designated Auto Wrecking Uses at 775 Energy Way, Chula Vista, California; Parcel being located within the Otay Valley Road Project Area SUBMITTED BY: Community Development Director L?, REVIEWED BY: Executive Director ~)" (4/5ths Vote: Yes - No_) Council Referral Number: ~ BACKGROUND: Over the last two years, City staff has been working with several well-established auto dismantling businesses in the vicinity of this project in order to bring them into conformance with City/Agency requirements as related to parking, landscaping, etc. These businesses were conditionally approved under PCC-73-27 in 1973 and, for the most part, have been situated at their current locations for the past 10 to 15 years. Several years ago, it became apparent that the original Conditional Use Permits (CUPs) had expired in 1985. Staff has been working with the auto dismantlers to process Special land Use Permits (SUPs) if the businesses are brought into conformity to Agency site criteria, principally parking and landscaping. The Special land Use Permit applications that have been approved by the Redevelopment Agency within the last year were approved for a period of approximately 13 years to 2006. The Agency is requested to hold public hearings for two current applications to continue auto recycling businesses on Energy Way. In the case of 777 Energy Way, the request is to continue businesses currently located on the property. The second request, 775 Energy Way, is for a new auto wrecking business replacing a previous one. RECOMMENDATION: That the Agency hold the public hearing, take testimony, and approve the resolutions. 5-1 Page 2, Item ~ Meeting Date 09/20/94 BOARDS/COMMISSIONS RECOMMENDATION: The Otay Valley Road Project Area Committee (PAC) held a public hearing and considered the requested Special Land Use Permits at their meeting of August 22, 1994 (copy of Minutes attached as Exhibit A). The PAC made requisite findings and unanimously approved a recommendation that the Agency approve the special permits for 775 and 777 Energy Way. DISCUSSION: When it was discovered that the blanket Conditional Use Permit granted to the Otay Industrial Park in 1973 had expired, the Agency offered SUPs to existing auto recyclers to continue their businesses for a period of 1 3 years, conditioned on compliance with City landscaping, parking, and screening requirements. Under this policy, the Agency has approved six Special Land Use Permits to continue auto dismantling uses on Energy Way. The applicant located at 777 Energy Way is applying for a SUP to continue auto recycling uses on his property which include four separate businesses: D&P Auto Dismantling, Fare's Auto Recycling, R.C. Import Auto Recycling, and Trueway Auto Dismantling. However, since the phase out period for this land use is targeted to end in 2006, a 12 year extension (as opposed to the 13 year extensions granted last year) is recommended, provided the applicant complies with site development criteria. The applicant requesting a SUP to establish an auto storage, recycling, and dismantling business at 777 Energy Way, known as American and Foreign Auto Wrecking, is similarly recommended for approval for 12 years. The applicant's business will replace SMASH Auto Dismantlers previously located at that site. Analysis The parcel located at 777 Energy Way comprises 2.00 acres at the western end of Energy Way (see Site Map attached as Exhibit B). The parcel is bordered by similar land uses to the south, east, and west. To the north is the Otay Landfill. The parcel located at 775 Energy Way comprises 1.70 acres and is bordered by similar land uses and the landfill. The Dtay Valley Road Implementation Plan/Design Manua/ Addendum restricts outdoor storage areas to 20 percent of the building area and requires landscaping of 20 percent of the site. The subject proposals can meet the storage requirement if the operations were enclosed in an industrial building. However, this is considered impractical and financially unrealistic because the businesses approved under recent Special Use Permits were previously legal under a master Conditional Use Permit issued over a decade ago, but are now existing, non- conforming uses that are being brought into conformance through the SUP process. The proposed use can be allowed with a SUP. The pre-existence and temporary nature of the SUP (12 years with a possible 13 year extension) does not justify the normal requirement for enclosures. The landscaping requirement must be met by the applicants. To ensure against storm water contamination, the applicants are required to participate in the State of California's storm water program by implementing what are called "Best Management Practices": (BPM) developed for such businesses by the State and industry. The applicants S-,,¿ Page 3, Item ~ Meeting Date 09/20/94 must submit proof that application has been made to the State for the "Notice of Intent (NO ) number (proof that they are participating in the program), or correspondence indicating the issuance of the NOI number itself must be submitted. In the process of reviewing and taking the other businesses through the hearing process, one issue that was brought up deals with the paving requirements for customer, employee and storage areas which requires that areas associated with a permanent use be paved with asphalt. When these uses were approved in 1973, permanent paving for the customer and employee areas was required, allowing the storage and periodic customer parking areas to be covered with decomposed granite (GD), which is the standard for temporary uses. Initially, there were environmental concerns that auto dismantling uses were polluting storm water and the soil and that the requirement for permanent paving would allow for controlled drainage. However, auto dismantling businesses are now required by State law to be involved with the program described above. Since the majority of uses along Energy Way are auto dismantlers which use heavy equipment and place auto hulks on the ground after draining them of their fluids and because there is no proof that the storm water is being polluted from this area, the City Council modified the precise plan requirements for Otay Industrial Park to include revised paving requirements which will allow the status quo to continue. Reauirements cer the Zonina Ordinance 1. The proponent of said land use shall implement the requirements pertaining to trash enclosures, off-street parking, landscaping, and fencing per those standards as presently established by the City of Chula Vista Municipal Code, as may be applied to this land use proposal. 2. The proposed uses shall conform to the landscape and off-street parking guidelines of the Otay Valley Road Implementation Plan/Design Manual Addendum. 3. Weed abatement shall be maintained within the property lines to prevent fire spread to other properties. Erosion control measures must be considered when weeds are removed or cut. Conclusion The subject land use is allowed by the City's Zoning regulations with a Special Use Permit. Its conditional phase-out over the next 12 years is supported by the Chula Vista General Plan and the Otay Valley Road Redevelopment Plan. The properties may be redeveloped to a higher land use in compliance with the Implementation Plan/Design Manual Addendum at the time that the surrounding properties redevelop. Environmental Review The Environmental Review Coordinator has determined that the project is a Class 5(d) Categorical Exemption from environmental review pursuant to § 15305 of the California Environmental Quality Act. 5-3 Page 4, Item ~ Meeting Date 09/20/94 Recommendations It is recommended that the Agency make the following Findings as required by the Implementation Plan/Design Manual Addendum: [1] Special Use Permit SUP 93-08 does not constitute a substantial detriment to the Project Area or adjacent areas in that it is compatible with surrounding uses. Special Use Permit SUP 94-02 does not constitute a substantial detriment to the Project Area or adjacent areas in that it is compatible with surrounding uses. [2] Special Use Permit SUP 93-08 generally promotes the orderly physical and economic development of the Project Area in that its establishment contributes to the local economy by providing a needed service. Special Use Permit SUP 94-02 generally promotes the orderly physical and economic development of the Project Area in hat its establishment contributes to the local economy by providing a needed service. [3] Special Use Permit SUP 93-08 is generally consistent with the townscape/planning and urban design objectives of the Implementation Plan/Design ManualAddendum, and contributes to the amenity of the Project Area in that the project must implement any requirement related to landscaping, exterior structural alternations, etc. Special Use Permit SUP 94-02 is generally consistent with the townscape/planning and urban design objectives ofthe Implementation Plan/Design ManualAddendum, and contributes to the amenity of the Project Area in that the project must implement any requirement related to landscaping, exterior structural alternations, etc. It is further recommended that the Chula Vista Redevelopment Agency grant the requested Special Use Permits with the conditions as stated below: Conditions: [1] The Special Land Use Permits (SUP 93-08 and SUP 94-02) are approved until July 13, 2006. The permits may be extended by the Zoning Administrator provided a written request for extension is received and approved prior to expiration. The Zoning Administrator's decision may be appealed to the Redevelopment Agency. Factors to be reviewed by the Zoning Administrator in considering a request for extension include but are not limited to: [a] the degree to which surrounding auto dismantlers have or have not been supplanted by alternative land uses; [b] the economic feasibility of redeveloping the site with alternate land uses; and [c] the quality of site and landscape maintenance. [2] In the event new buildings or exterior alternations to existing buildings are proposed, the applicant shall submit an application to the Planning Department for consideration by the Design Review Committee. The project shall comply with the requirements of the Design Review Committee. S-t(- Page 5, Item ~ Meeting Date 09/20/94 [31 Plans shall be submitted to the Planning Department for review and approval indicating landscape planting/irrigation, parking and paving, fencing, and other appropriate screening measures to ameliorate adverse visual impacts in accordance with items Conditions 1 and 2, above. The plans shall be prepared by a Registered Landscape Architect, and shall be implemented within 90 days of the approval of this permit. [4] The applicants shall provide parking at a ratio of one (1) space for each 400 square feet of gross floor area for any enclosed structure within the parcel areas. Parking on Energy Way or within the Energy Way easement to the north and at the western terminus of Energy Way is prohibited. [5] Within thirty (30) days of the approval of this Special Use Permit, the applicants or owners shall provide proof that the owner/operator of the auto dismantling businesses have either applied for or received a "Notice of Intent" (NOI) number from the State of California, State Water Resources Control Board, and that the facilities are covered by the General Storm Water Permit. [6] Applicants shall comply with the Precise Plan Guidelines for the Otay Industrial Park as currently adopted or as may hereafter be modified. [7] The Special Land Use Permits shall become void and ineffective if not utilized within one year from the effective date thereof, in accordance with Section 19.14.260 of the Municipal Code. Failure to comply with any condition of approval shall cause this permit to be reviewed by the CitylAgency for additional conditions or revocation. [8] The Special Land Use Permits shall not become effective until proof is submitted to the Director of the Community Development Department that same is recorded in the Office of the County Recorder against subject property. This Special Land Use Permit runs with the land, and is not transferable to another property. FISCAL IMPACT: Since the applicants represent on-going businesses, there will be no additional fiscal impact for the Agency. However, the continuance of these businesses will maintain current tax revenues and employment. IC:\WP51 IAGENCYIRA4S\RECYCLR7.RA4] 5-5 , . This page intentionally left blank. S-fa DRAFT MINUTES OF A REGULAR OTAY VAllEY ROAD PROJECT AREA COMMITTEE Monday, August 22, 1994 Conference Rooms 2&3 9:00 a.m. Public Services Bui[ding 1. ROll CAll: Present: Members Palumbo, Nava, and McMahon Excused: Chairman Casillas Absent: Member Hall Also Present: Fred Kassman, Redevelopment Coordinator; Martin Miller, Assistant Planner; Steve Griffin, Principal Planner; John McCormack, Property Owner; and Tom Davies, Property Owner The Committee agreed that Member Palumbo would be Acting Chairman for the meeting. 2. APPROVAL OF MINUTES from the meeting of July 25, 1994 Action on this item was continued to the next meeting since not all of the Members present were at the meeting of Ju[y 25, 1994. 3a. PUBLIC HEARING: Discussion and Action on Application for Special land Use Permit for the Continuation of Auto Dismantling Business at 777 Energy Way b. PUBLIC HEARING: Discussion and Action on Application for a Special land Use Permit to Establish an Auto Dismantling Business at 775 Energy Way Assistant Planner Miller made a presentation concerning the requests for Special Permits for 775 and 777 Energy Way. Mr. Miller indicated the request for 777 Energy Way was one of the existing auto recycling uses whose Special land Use Permit had expired. The owner was applying for a Special land Use Permit to continue the existing business for an additional 12 years. The second Special land Use Permit request was for the location of a new auto recycling business on the site where auto recycling had taken place over the past 12 years. Member Palumbo questioned what were the issues that make a Special land Use Permit necessary. Mr. Miller replied the original permit for recycling had expired. The City indicated it would grant a Special land Use Permit if the owners would upgrade and maintain the businesses in compliance with City Codes and Ordinances. [f the Committee recommended approval of the land use, the application would go'through site development analysis. Member McMahon stated that all previous Special land Use Permits for recycling businesses in the area had been approved. Mr. Miller noted the Permits included State-mandated soil and water contamination prohibitions and safeguards. Member Palumbo, acting as Chairman, opened the pubic hearing. There being no requests to speak, the public hearing was closed. S~7 Minutes August 22, 1994 2 MOTION [McMahon/Palumbo] to accept the report and staff recommendations, Making Certain Findings, and recommending that a Special land Use Permit be granted to Mr. Paul Hynum, ownerloperator of four auto storage and dismantlinglrecycling businesses located at 777 Energy Way; and, Mr. Jesse M. Vasquez owner of American & Foreign Auto Wrecking located at 775 Energy Way. passed 3-0-2-0, Casillas and Hall absent. 4. STATUS REPORTS: a. Status of Committee Membership--Staff will update the PAC on vacancieslappointments to the PAC Staff indicated there would be no new Members appointed to the Otay Valley Road PAC. A sheet was mailed to the Members which indicated the present terms of office for Members. There had been some confusion concerning expiration of terms. After research it was determined Chairman Casillas' second term would expire June 30, 1996 at which time he would not be eligible for re-appointment. Member Pa[umbo's second term would also end June 30, 1996 and he would also not be eligible for re- appointment. Member McMahon's first term expired June 30, 1994 and it was understood he would be re-appointed to a second four-year term which would expire June 30, 1998. Member Nava's current term would expire in June 30, 1996 at which time she would be eligible for re-appointment to one additional four-year term. Member Hall was recently re-appointed to his second term which would expire June 30, 1998 and he would not be eligible for re-appointment at that time. b. Proposed City Ordinance Amendment to Allow Off-site Readerboard Signs--Update on amendment to City Ordinance for Readerboard signs to allow off-site advertising Principal Planner Griffin explained the proposed change in the amendments to the readerboard sign was proposed pursuant to an understanding that the Redevelopment Agency would assist the Auto Park developers in establishing a readerboard sign. Language to that effect was in the Disposition and Development Agreement between the Redeve[opment Agency and the Auto Park developers. The current Ordinance allowed readerboard signs under certain circumstances in the Otay Valley Road and Town Centre Project Areas. However, readerboard signs can only advertise on-site uses. The proposed change in language would allow readerboard signs to also advertise off-site uses where off- site users were sponsors of the readerboard. The Agreement with the Agency provided that staff would assist the Auto Park developers in a readerboard sign or a street name change; the latter was opposed by staff and local business people. Member Palumbo asked whether the proposed Ordinance revision allowed the Auto Park to install the sign off-site. Staff noted the existing Ordinance allowed on-site signs under certain circumstances. The proposed changes would allow the off-site readerboard signage. Member McMahon pointed out this was special treatment for the Auto Park. He asked about other businesses in the area that might want to advertise at freeway locations. Staff stated the Auto Park was a special use because of the high volume in sales tax revenues and jobs it provided to the City. [t was also a regional use and subject to competitive advertising with other cities which allow readerboard signs. To some degree they do attract drive-by trade which did not apply to other businesses in the area. Member McMahon inquired about that section of the proposed language which referred to sponsors of the sign. S-J? Minutes August 22, 1994 3 Staff responded only the auto dealers, as sponsors of the sign, could put messages on the sign. Member McMahon questioned the prohibition of non-sponsors using the sign for advertising. Staff explained it was the intention of the proposed revision in the Ordinance to preclude the use of the readerboard sign to advertise a variety of off-site uses such as supermarkets, major retailers, and the like. The signs do allow some time for the advertising of public events and activities. Mr. John McCormack, property owner in the area, said the Otay Industrial Park (auto recycling park) had tried to put up a sign when it was first developed. However, they did not get very far with City staff. The lack of a sign may have contributed to the early bankruptcy of the recycling park. Member Palumbo said he did not understand why the City had to get involved in governing the advertising which would appear on the sign. He asked when local residents would have the opportunity to review the proposed signage. Staff explained the Design Review Committee (DRC) would send out public notices and hold a hearing on the proposed designs for the sign. Following DRC review the sign request would go before the Redevelopment Agency for approval in a public meeting and, if there were controversy, local residents would be contacted and advised of the meeting date, time, and place. Member Palumbo pointed out the City needed to be sensitive to the visual impact of the sign and wanted to see more freedom of usage of the sign. The Committee requested the following recommendations be forwarded to the Planning Commission: [11 The Project Area Committee did not like the special treatment being afforded to the certain retailers in the City to the exclusion of other retailers who might like to avail themselves of the use of the readerboard sign. [2] The Project Area Committee would recommend to allow conditional usage for special notices by non-sponsors of the sign such as the proposed amphitheater, Olympic Training Center, major retailers, etc. [3] The Committee recommends maximum protection for residents from negative visual impacts of the sign. [4J In light of previous City signage policies. the Committee recommended measures be taken so that the signs do not become overwhelming and degrade the image of the City. Reference was made to the proliferation of signs in National City and other local municipalities. MOTION [Palumbo/McMahon] to submit the four recommendations. listed above, to the Planning Commission at their meeting of August 24, 1994, passed 3-0-2-0, Casillas and Hall absent. c. Auto Park - Update on status of Auto Park Staff reported the Chevrolet dealership was almost completed at this time. However, the owner did not wish to relocate until the southerly three lanes of Otay Valley Road in front of the Auto Park were completed. That work was supposed to be completed by mid-September. The target date for completion was now the end of September. The relocation of the Chevrolet dealership to the Auto Park should occur at the end of September or very early in October. The Ford dealership was further behind and not anticipated to open until mid-October. d. Otay Valley Road - Update on status of Otay Valley Road Widening Staff informed Committee the southerly three lanes would be completed by the end of September. At that time the contractor would start work on the northerly three lanes and traffic would be shifted S-7 Minutes August 22, 1994 4 to the completed, improved sections. There would be some disruptions while utility lines were being relocated and grading work occurred on the northerly side of the roadway. The entire project was expected to be completed by February 1995. e. Ca[Trans requirements concerning Left Hand Turn Restrictions, 1-805 to Oleander Staff apprised the Committee that some time ago, at the request of property owners in the vicinity of [-805 and Otay Valley Road, Council determined not to install a median island restricting left-hand turn movements at this time. However, Ca[Trans, as a condition of installing traffic signals at the [- 805/0tay Valley Road intersections, was requiring that left hand turns from properties on the south side of Otay Valley Road between 1-805 and Oleander be prohibited. The reason for this was to allow appropriate stacking distance for [eft hand turn pockets at the new traffic signals. Staff held a meeting with property owners who claimed the restrictions in [eft hand turn movements would seriously impact their businesses. The most severely impacted businesses would be the Shell Station and truck storage on the Davies property. It would also negatively impact future development of the Davies property. The PacBeli facility would not be seriously impacted because a traffic light being financed by PacBeli would be installed for their use at Oleander. Discussions were continuing with Ca[Trans on the issue and a report would be submitted to the City Council shortly. 5. ORAL COMMENTS - None. 6. CHAIRMAN'S REPORT - None. 7. MEMBERS' COMMENTS - None. 8. STAFF COMMENTS - None. Adjournment 10: 1 0 a.m. to the next regularly scheduled meeting of August 22, 1994, at 9:00 a.m. in Conference Rooms 2 & 3. ".~".~ -y~ ~ Fred Kassman, Redevelopment Coordinator [C:I WP51 IOVROADIMINUTESIO8-22-94.MINI s-- /() \ , , "\ 5 i ::I! I .. .. ¡ ~ lid l1li W (001 ,,' . ~ ~ 1 z f I. Ž s z . < ....; ,.¡ I .. = . . r ~ is: > ,,~;J < = w<IJ ~:i is,L ;; ~ ~ ~ -<: ¡ : II ,.¡ u w..: ;Ji gr = c c. tJC\~ c.J~ . - - ,n- .. - . \ il ' I \ .. II É "Iii ~ ~ '. I . ~ .!~ l1li . . A :!! IS J .. ~ i ~ ~ i '. Ž 11 z . -<: ~ ,,~ ,.¡ "'I c. .11~ Is: iJ ~;J < I. .. ~<IJ .. .Q iii oS.- <IJ =-" Z ;; ~: ¡: ~ -<: ~ ;¡ . ,.¡ ~ ¡¡..: I ;J i! .~.. L . U =« «. . tJE)i!! I ~ ! z: , . This page intentionally left blank. S-/L RESOLUTION 1420 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA MAK[NG CERTA[N F[NDINGS AND APPROV[NG A SPECIAL PERM[T TO D&P AUTO DISMANTLING, FARE'S AUTO RECYCLING, R.C. [MPORT AUTO RECYCLING, AND TRUEWAY AUTO DISMANTLING FOR CERTAIN DESIGNATED AUTO WRECKING USES AT 777 ENERGY WAY, CHULA V[ST A, CALIFORNIA; PARCEL BEING LOCATED W[TH[N THE OT A Y VALLEY ROAD PROJECT AREA WHEREAS, the property which is the subject matter of this Special Permit is commonly known as 777 Energy Way, Chula Vista, California, (Assessor's Parcel No. 644-181-23), and, WHEREAS, D&P Auto Dismantling, Fare's Auto Recycling, R.C. Import Auto Recycling, and Trueway Auto Dismantling ("Applicants") with respect to the special permit herein granted are the operators of the businesses located at 777 Energy Way, and, WHEREAS, Certain conditional use permits have been issued for the propèrty in 1973 and said permits expired in 1986; and, WHEREAS, Applicants have requested to continue auto storage, wrecking, and recycling businesses on the premises; and WHEREAS, a Special Permit is required for the uses being requested by the Applicant under the Otay Valley Road Redevelopment Plan; and WHEREAS, the Otay Valley Road Project Area Committee noticed and held a public hearing on August 22, 1994 to consider the proposed use and made requisite Findings and recommendation to the Agency for approval of the Special Permit to the Applicant on certain terms and conditions; and, WHEREAS, the Agency noticed and held a public hearing on Tuesday, September 20, 1994, and that all protests, if any, to the approval of Special Permits in the manner herein contemplated, were made and received at said public hearing, and no convincing objections to the proposed transaction were found to exist. WHEREAS, the Environmental Review Coordinator reviewed the proposal and determined a Class 1 exemption from environmental review because of the continuation of same land uses. NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA does hereby find, order, determine and resolve as follows: Section 1. The Agency hereby makes the following findings under the Dtay Valley Road Redevelopment Project Area Implementation Plan/Design Manual Addendum: 1. The proposed project does not constitute a substantial detriment to the Project Area or adjacent areas in that it is compatible with surrounding uses. 5~ 13 Resolution 1420 Page 2 2. The proposed project generally promotes the orderly physical and economic development of the Project Area in that its continuance contributes to the local economy by providing a needed service. 3. The proposed project is generally consistent with the townscape/planning and urban design objectives of the Implementation PlanlDesign Manual Addendum, and contributes to the amenity of the Project Area in that the project must implement any requirement related to landscaping, exterior structural alterations, etc. Section 2. The Agency hereby grants D&P Auto Dismantling, Fare's Auto Recycling, R.C. Import Auto Recycling, and Trueway Auto Dismantling Special Permits covering the property located at 777 Energy Way, Chula Vista, California, for the use (1) auto storage, (2) auto dismantling and sales of auto parts uses, and (3) scrap metal collection, compaction, cutting, shredding in preparation for the scrap market; and other related uses, for a term of 12 years on the following conditions: 1. This Special Land Use Permit is approved until July 13, 2006. The permit may be extended by the Zoning Administrator provided a written request for extension is received and approved prior to the expiration. The Zoning Administrator's decision may be appealed to the Redevelopment Agency. Factors to be reviewed by the Zoning Administrator in considering a request for extension include but are not limited to: (a) the degree to which surrounding auto dismantlers have or have not been supplanted by alternate land uses; (b) the economic feasibility of redeveloping the site with alternate land uses; and (c) the quality of site and landscape maintenance. 2. [n the event new buildings or exterior alterations to existing buildings are proposed, the applicant shall submit an application to the Planning Department for consideration by the Design Review Committee. The project shall comply with the requirements of the Design Review Committee. 3. Plans shall be submitted to the Planning Department for review and approval indicating landscape planting/irrigation, parking and paving, fencing, and other appropriate screening measures to ameliorate adverse visual impacts in accordance with items 1 and 2, above. The plans shall be prepared by a Registered Landscape Architect, and shall be implemented within 90 days of the approval of this permit. 4. The applicant shall provide parking at a ratio of one (1) space for each 400 square feet of gross floor area for any enclosed structure within the lease area of APN 644-181-23. Parking on Energy Way or within the Energy Way easement to the north and at the western terminus of Energy Way is prohibited. Based on the nature of the occurrence, the City may schedule the use permit for review and/or revocation. 5. Within thirty (30) days of the approval of this special use permit, the applicant or owner shall provide proof that the ownerloperator of the auto dismantling business has either applied for or received a "Notice of Intent" (NOI) number from the State of California, State Water Resources Control Board, and that the facility is covered by the General Storm Water Permit. s~/1 Reso[ution 1420 Page 3 6. Applicant shall comply with the Precise Plan Guide[ines for the Otay Industrial Park as currently adopted or as may hereafter be modified. 7. This Special land Use Permit shall become void and ineffective if not utilized within one year form the effective date thereof, in accordance with Section 19.14.260 of the Municipal Code. Failure to comply with any condition of approval shall cause this permit to be reviewed by the City/Agency for additional conditions or revocation. 8. This Special Land Use Permit shall not become effective until proof is submitted to the Director of Community Development Department that same is recorded in the Office of the County Recorder against subject property. This Special Land Use Permit runs with the land, and is not transferable to another property. Presented by: ~ ~ J Chris Salomone Community Development Director [C :IWP51 IAGENCYIRESOSID&P-ET AL.RES) ,-,5"'-- IS , . This page intentionally left blank. S-I/o RESOLUTION 1421 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA MAKING CERTAIN FINDINGS AND APPROVING A SPECIAL PERMIT TO AMERICAN AND FOREIGN AUTO WRECKING FOR CERTAIN DESIGNATED AUTO WRECKING USES AT 775 ENERGY WAY, CHULA V[ST A, CALIFORNIA; PARCEL BEING LOCATED W[TH[N THE OT A Y VALLEY ROAD PROJECT AREA WHEREAS, the property which is the subject matter of this Special Permit is commonly known as 775 Energy Way, Chula Vista, California, (Assessor's Parcel No. 644-181-19), and, WHEREAS, American and Foreign Auto Wrecking (" Applicant") with respect to the special permit herein granted is the owner of the property located at 775 Energy Way, and, WHEREAS, Certain conditional use permits were issued for the property in 1973 and said permits expired in 1 986; and, WHEREAS, Applicant has requested to establish an auto storage, wrecking, and recycling business on the premises; and WHEREAS, a Special Permit is required for the uses being requested by the Applicant under the Otay Valley Road Redevelopment Plan; and WHEREAS, the Otay Valley Road Project Area Committee noticed and held a public hearing on August 22, 1994 to consider the proposed use and made requisite Findings and recommendation to the Agency for approval of the Special Permit to American and Foreign Auto Wrecking on certain terms and conditions; and, WHEREAS, the Agency noticed and held a public hearing on Tuesday, September 20, 1994, and that all protests, if any, to the approval of a Special Permit in the manner herein contemplated, were made and received at said public hearing, and no convincing objections to the proposed transaction were found to exist. WHEREAS, the Environmental Review Coordinator reviewed the proposal and determined a Class 1 exemption from environmental review because of the continuation of same land uses. NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA does hereby find, order, determine and resolve as follows: Section 1. The Agency hereby makes the following findings under the Otay Valley Road Redevelopment Project Area Implementation Plan/Design Manual Addendum: 1. The proposed project does not constitute a substantial detriment to the Project Area or adjacent areas in that it is compatible with surrounding uses. s~/1 -"'.. Resolution 1421 Page 2 2. The proposed project generally promotes the orderly physical and economic development of the Project Area in that its continuance contributes to the local economy by providing a needed service. 3. The proposed project is generally consistent with the townscape/planning and urban design objectives of the Implementation Plan/Design Manual Addendum, and contributes to the amenity of the Project Area in that the project must implement any requirement related to landscaping, exterior structural alterations, etc. Section 2. The Agency hereby grants American and Foreign Auto Wrecking a Special Permit covering the property located at 775 Energy Way, Chula Vista, California, for the use (1) auto storage, (2) auto dismantling and sales of auto parts uses, and (3) scrap metal collection, compaction, cutting, shredding in preparation for the scrap market; and other related uses, for a term of 1 2 years on the following conditions: 1. This Special land Use Permit is approved until July 13, 2006. The permit may be extended by the Zoning Administrator provided a written request for extension is received and approved prior to the expiration. The Zoning Administrator's decision may be appealed to the Redevelopment Agency. Factors to be reviewed by the Zoning Administrator in considering a request for extension include but are not limited to: (a) the degree to which surrounding auto dismantlers have or have not been supplanted by alternate land uses; (b) the economic feasibility of redeveloping the site with alternate land uses; and (c) the quality of site and landscape maintenance. 2. In the event new buildings or exterior alterations to existing buildings are proposed, the applicant shall submit an application to the Planning Department for consideration by the Design Review Committee. The project shall comply with the requirements of the Design Review Committee. 3. Plans shall be submitted to the Planning Department for review and approval indicating landscape plantinglirrigation, parking and paving, fencing, and other appropriate screening measures to ameliorate adverse visual impacts in accordance with items 1 and 2, above. The plans shall be prepared by a Registered landscape Architect, and shall be implemented within 90 days of the approval of this permit. 4. The applicant shall provide parking at a ratio of one (1) space for each 400 square feet of gross floor area for any enclosed structure within the lease area of APN 644-181-19. Parking on Energy Way or within the Energy Way easementto the north and at the western terminus of Energy Way is prohibited. Based on the nature of the occurrence, the City may schedule the use permit for review andlor revocation. 5. Within thirty (30) days of the approval of this special use permit, the applicant or owner shall provide proof that the owner/operator of the auto dismantling business has either applied for or received a "Notice of [ntent" (NOn number from the State of California, State Water Resources Control Board, and that the facility is covered by the General Storm Water Permit. 5-/6' Resolution 1421 Page 3 6. Applicant shall comply with the Precise Plan Guidelines for the Otay Industrial Park as currently adopted or as may hereafter be modified. 7. This Special land Use Permit shall become void and ineffective if not utilized within one year form the effective date thereof, in accordance with Section 19.14.260 of the Municipal Code. Failure to comply with any condition of approval shall cause this permit to be reviewed by the City/Agency for additional conditions or revocation. 8. This Special land Use Permit shall not become effective until proof is submitted to the Director of Community Development Department that same is recorded in the Office of the County Recorder against subject property. This Special Land Use Permit runs with the land, and is not transferable to another property. Presented by: J) ~ ~ Chris Salomone Community Development Director [C:I WP51 IAGENCYlRESOSIAMERICAN.RES] S~// , . This page intentionally left blank. 5~20 REDEVELOPMENT AGENCYICITY COUNCIL AGENDA STATEMENT Item (; Q.., ~ Meeting Date 09-20-94 ITEM TITLE: AGENCY RESOLUTION /1) hpPROVING MODIFICATION OF LOAN BY AGENCY TO PARK VILLAGE APARTMENTS LIMITED PARTNERSHIP IN CONNECTION WITH 28 UNIT AFFORDABLE HOUSING PROJECT LOCATED AT 1246-1256 THIRD AVENUE AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE LOAN MODIFICATION AGREEMENT, SUBORDINATION AGREEMENTS AND ASSOCIATED DOCUMENTS COUNCIL RESOLUTION / rr ~ b-S'APPROVING AMENDED AND RESTATED GROUND LEASE AND LEASE RIDER AND ESTOPPEL AGREEMENT IN CONNECTION WITH AGENCY LOAN MODIFICATION WITH PARK VILLAGE APARTMENTS AND AUTHORIZING CITY MANAGER TO EXECUTE SAME SUBMITTED BY: Community Development Directo~ REVIEWED BY: Executive Director/City Manager G-(I., l1 X-' (4/5ths Vote: Yes - No 10 Council Referral Number: NIA BACKGROUND: On June 4, 1991 the Agency entered into an agreement with Civic Center Barrio Housing Corporation (CCBHC), a non-profit developer for 20 years, to build a 28-unit apartment complex at 1246 - 1256 Third Avenue (The Park Village Apartments) to provide housing opportunities to very low income families and to give preference to displaced trailer park residents of Chula Vista. Under the Development Agreement, CCBHC agreed to develop 10 very low income and 18 low income family housing units and to restrict the rents for a period of 30 years. The City participation in this $3.0 million dollar project was a $350,000 loan from our Low and Moderate Income Housing Fund to help purchase the site. The project has been completed and permanent financing is currently being obtained. In order to obtain this permanent financing it is necessary to modify the terms of the existing Agency loan and to amend the City lease with respect to the child care center. RECOMMENDATION: That the Redevelopment Agency approve a modification to its loan to Park Village Apartments Limited Partnership and authorize the Executive Director to execute the loan modification agreement, subordination agreements and associated documents. That the City approve and authorize execution of the amended ground lease documents for the child care center. BOARDSICOMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The Park Village Apartments Project is a unique development in that it both provides housing to very low income and low income families and provides tenants with access to affordable on-site child care and off-site job training opportunities for the purpose of promoting self-sufficiency. The project will have an official open house in mid-October. ~-/ Page 2, Item ~ Meeting Date 09-20-94 [t was originally contemplated that the existing Agency loan agreement would be modified upon the project obtaining permanent financing. The reasons for modifying the Agency loan are to facilitate the permanent financing of this project and to have access to $100,000, which CCBHC proposes to pay down on the Agency loan upon closing. This presents an opportunity for the Agency to use these funds in the short term to finance other affordable housing projects. THE CURRENT AGENCY LOAN The original Agency loan was in the principal amount of $350,000. The loan contemplated subordination to construction andlor permanent financing and it was subsequently subordinated to construction financing. Two sets of prepayment terms were negotiated for the loan contingent on whether a loan from the State Housing and Community Development Department ("HCD") was secured. The two sets of repayment terms of the Agency loan were as follows: If the CCBHC obtained the State HUD loan by on or before June 1, 1993: 8 Eight (8) percent interest, amortized over 30 years, due and payable on June 1, 2007 years, payments to begin on the first year anniversary of the completion of the project. If the CCBHC did not obtain the State loan by on or before June 1, 1993: 8 Five (5) percent interest. amortized over 30 years, due and payable on June 1, 2007, payments to begin on the fourth year anniversary of the completion of the project). The Agency's loan was structured in this way to ensure that the CCBHC debt service did not exceed its income flow. In other words, if a low interest rate State loan could not be obtained, the Agency loan would accrue interest at a lower rate in order to accommodate the need for a higher interest rate "market" loan. Subsequently CCBHC secured a permanent financing loan from the State, and therefore the first option came into effect. The State loan is in from the Department of Housing and Community Development (HCD) in the amount of $1.4 million (3% interest). which will be in second lien position. An additional permanent loan in the amount of $286,000 (8.5% interest) has been secured from the California Community Reinvestment Corporation (CCRC), which will be in first lien position. Although the Agency is technically entitled to repayment at an 8% interest rate, Agency staff is recommending that a 5% interest rate be used both retroactively and prospectively. The reasons for this are as follows: (1) The State loan was not obtained as quickly as was hoped due to changes in the State funding program and extended good faith negotiations over the terms of this loan. This delay caused the project to bear the costs of a higher interest rate "market" loan for an additional two years. ~-c2- Page 3, Item ~ Meeting Date 09-20-94 (2) Even with the low interest State loan, the updated project pro forma did not appear to support the repayment of the Agency loan at the 8% rate. This is because of State imposed unanticipated operational reserve requirements and the need for the CCRC "market rate" loan (accruing interest at 8.5%). (3) The Agency was able to successfully negotiate a $100,000 prepayment of its loan and priority access to certain project reserve funds which increase the likelihood for a total repayment of the Agency loan. PROPOSED LOAN MODIFICATION The terms of the proposed modification are as follows: 8 CCBHC proposes to prepay $100,000 of the outstanding debt owed to the Agency upon closing of the permanent financing. 8 In order to accommodate the existing pro forma for the project and to acknowledge the $100,000 pay down, it is recommended that the Agency waive its right to interest at 8 percent and charge interest, both retroactively and prospectively, at the rate of 5 percent. 8 This adjustment would result in an outstanding debt owed to be agency as of September 1, 1994 of approximately $412,000. With $100,000 pay down at closing, the remaining debt to be serviced by the project would be approximately $312,000. 8 This outstanding debt would be serviced at the rate of 5 percent in a 30 year amortization schedule. This translates into a monthly payment to the Agency of $1,679 per month. Payments will start the first month after the closing of the permanent refinancing. A balloon payment of all outstanding debt would be due and payable on December 31, 2008. 8 To the extent that debt payments owed to the Agency are not paid, the Agency will have incremental access to unused portions of a $100,000 reserve fund set up to cover any operating deficits there may be in the child care center at the project. Access will be limited to the maximum amount of $10,000 per year over 10 years. No access will be allowed if significant portions of the child care center reserve monies are needed to fund child care center operating deficits. 8 The Agency debt would be secured by its Deed of Trust. A requirement of the permanent financing lenders is that this lien be subordinated to third position behind the CCRC and HCD Deeds of Trust. 8 While the Agency lien would be in third position, Agency staff negotiated its right to receive payments on its debt in second position, ahead of the State HCD's right to payment. (j-3 Page 4, Item ~ Meeting Date 09-20-94 . The Agency afford ability covenants on the property will be subordinated to both the CCRC Deed of Trust (securing a $286,000 debt and the HCD Deed of Trust (securing a $1.4 million debt). This was contemplated at the time of the original loan. The resolution submitted for Agency approval includes the necessary findings of "necessity" under the Redevelopment Act to allow for this subordination. Copies of the proposed Loan Modification Agreement and Subordination Agreements are attached hereto. These documents are in draft form due to the urgency to close this deal due to the fact that the Bank of America construction loan is overdue for pay-off and the fact that the CeRe's first position loan has an interest rate lock at 8 percent which expires at the end of September, 1994 at which point the interest rate will be increased to 9.2 percent. REVISIONS TO THE GROUND LEASE FOR CHILD CARE CENTER PLAYGROUND The permanent lenders also requested minor changes to the terms of the existing City lease to the project of a small parcel (approximately 600 square feet adjacent to Lauderbach Park) being used as a playground for the child care center. These changes are reflected in a restated Ground Lease and a Lease Rider and Estoppel Agreement which also need to be executed in connection with the loan modification. The revisions were necessary to clarify the legal description for this parcel extend the terms of the lease from 30 to 55 years and to address lender concerns regarding their ability to take over CCBHe's position under the lease in the event that CCBHC defaulted on their loans. Lease payments are for $1 per year. Drafts of these documents in substantially their final form are attached. FISCAL IMPACT: Under the existing Agency loan documents, interest on the City's $350,000 loan to the project has been accruing since June 1991, at the rate of 8 percent per year. At this rate, as of September 2, 1994 (the projected closing date) the outstanding debt owed to the City under the existing loan documents would be approximately $450,000. Future payments at 8% on the debt remaining after the permanent financing took place would be in the monthly amount of approximately $2,500 per month. If the Agency agrees to a 5 % rate, this would, in effect, be a waiver of approximately $40,000 of accrued interest to date and approximately $9,600 of interest per year for 14 years. Staff feels this "waiver" is justified in light of the need to accommodate an updated pro forma, a high interest first priority debt and in light of the $100,000 prepayment the Agency will receive at the permanent financing closing and second position in debt service. [AG\C,\WP51 \JUAN\RA4\CIVICBAR.RA41 &~y- RECORDING REQUESTED BY, AND ) WHEN RECORDED, RETURN TO: ) ) THE CITY OF CHULA VISTA ) 276 Fourth Avenue ) Chula Vista, Ca. 91910 ) (619) 691-5037 ) Attn: Glen R. Gooqins ) (Space Above Recorder's Use) LOAN MODIFICATION AGREEMENT [INCLUDING SECOND AMENDMENT TO NOTE AND DEED OF TRUST] This LOAN MODIFICATION AGREEMENT ("Agreement") is entered into as of , 1994 ("Effective Date") by and between THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body, corporate and politic, ("Agency") and PARK VILLAGE APARTMENTS LIMITED PARTNERSHIP, a California limited partnership ("Borrower") with reference to the following facts: A. On or about June 4, 1991, pursuant to that certain Development Agreement dated June 4, 1991 by and between CIVIC CENTER BARRIO HOUSING CORPORATION, a California nonprofit, public benefit corporation ("CCBHC") and Agency (the "Agency Development Agreement") Agency agreed to lend and CCBHC agreed to borrow the sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) (the "Loan") for the purpose of financing the acquisition of certain real property in the city of Chula vista to be used for the development of an affordable housing and child care center project (the "Project"). On or about June 19, 1991, CCBHC and Agency executed an Implementation Agreement (the "Implementation Agreement") for the purpose of implementing certain provisions of the Agency Development Agreement. B. The Loan is evidenced by that certain Promissory Note Secured by Deed of Trust dated June 19, 1991 (the "Agency Note"), in the original principal amount of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000.00) executed by CCBHC in favor of Agency. The repayment of the Agency Note and CCBHC's performance of its obligations thereunder are secured, inter alia, by that certain Deed of Trust and Assignment of Rents (the "Agency Deed of Trust") dated as of June 19, 1991, executed by Borrower, as Trustor, to Escondido Escrow, a California corporation, as Trustee, and naming Agency, as Beneficiary, recorded on June 21,1991 as Instrument No. 1991-0300900 in the Official Records of San Diego County, California, encumbering that certain real property described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"). In addition, the Agency Loan is secured by (i) that certain Security Agreement dated as of June 19, 1991 (the "Security Agreement"), (ii) that certain UCC-1 Financing Statement dated June 19, 1991 filed with the office of the Secretary of State of California on June 27, 1991 (the "Financing 1 ¿-5 Statementlt) , and (iii) that certain UCC-1 Fixture Filing dated June 19, 1991, recorded on June 21, 1991 as Instrument No. 1991-0300901 in the Official Records of San Diego County, California (the ItFixture Filinglt). The Agency Development Agreement, the Implementation Agreement, the Agency Note, the Agency Deed of Trust, the Security Agreement, the Financing statement and the Fixture Filing, as amended on or about March 30, 1992 by the First Amendment Documents (see below), shall sometimes be referred to herein collectively as the ItAgency Loan Documentslt. C. On or about March 30, 1992, Borrower assumed all CCBHC's right, title, interest and obligations under the Agency Loan Documents pursuant to that certain Loan Assignment and Assumption Agreement dated March 30, 1992, and related documents including an Endorsement (amending the Note), a First Amendment to Deed of Trust and Assignment of Rents (recorded with the San Diego County Recorder on May 15, 1992 as Document No. 1992-0296172), a UCC-2 Amendment to Financing statement filed May 20, 1992 with the office of the Secretary of State, a UCC-2 Amendment to Fixture Filing, a Clarification Re Contractor Consents, and related documents, all dated on or about March 30, 1992 (collectively, the ItFirst Amendment Documentslt). D. On or about February 4,1993, Borrower completed the development of the affordable housing element of the Project. On or about April 12, 1994, Borrower completed the development of the child care center portion of the Project. E. Subject to certain terms and conditions, Borrower has obtained commitments for permanent financing of the Project (the Itpermanent Financing") from the Department of Housing and Community Development, a public agency of the State of California (the ItDepartment") , and California Community Reinvestment Corporation, a California nonprofit public benefit corporation (ItCCRCIt). In connection with Permanent Financing, the Department is requiring that Borrower enter into certain agreements including that certain (1) Regulatory Agreement, (2) Development Agreement, (3) Promissory Note Secured by Deed of Trust, (4) Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, (5) Subordination Agreement, Estoppel certificate and Inter-Creditor Agreement, (6) child Care Center Operating Reserve Agreement, (7) Amended Ground Lease Agreement, (8) Lease Rider and Estoppel Agreement, and (9) related documents (collectively, the "Department Loan Documents"). In connection with the Permanent Financing, CCRC is requiring that Borrower, the Department and/ or the Agency enter into certain agreements including that certain (a) Loan Agreement, (b) Promissory Note secured by Trust Deed with Assignment of Rents, Security Agreement and Fixture Filing (c) Trust Deed with Assignment of Rents; security Agreement and Fixture Filing, (d) Assignment of Leases, (e) Environmental Indemnity, (f) Security Agreement, (g) Subordination Agreement (with the Department, (h) Subordination Agreement (with the Agency), and (i) related 2 cR-~ documents (collectively, the "CCRC Loan Documents"). In order to accommodate the terms and conditions of the Permanent Financing, Borrower and Agency have agreed to modify the Agency Loan Documents in certain respects. F. Although Agency has no obligation or duty of any kind to agree to the Borrowers' requests, and without directly or indirectly incurring any other liabilities or obligations to the Borrower, or any other person, Agency is willing to agree to the Borrowers' requests subject to and on the terms and conditions set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Affirmation of Loan. 1.1 Acknowledqment of Indebtedness. The Borrower hereby acknowledges and agrees that as of September 22,1994, there is presently due and owing to Agency by Borrower on the Loan, the principal sum of $411,670.58, which includes the original loan amount of $350,000.00, together with interest accrued thereon in the amount of $61,617.58. This outstanding balance shall increase at the rate of 5% per annum ($52.66 per day) until the closing of the Permanent Financing. Upon receipt by Agency of the $100,000 pay down described in section 6.3 hereinbelow, the outstanding Loan balance shall be decreased by $100,000. 1.2 Ratification of Loan Documents. Borrower hereby ratifies and reaffirms the Agency Loan Documents (as modified by the First Amendment Documents and this Agreement) to which it is a party. 2. Modification of Note. Notwithstanding anything to the contrary contained in the Note, subject to the conditions set forth in section 6 hereof, below, the Note is hereby modified as follows: 2.1 Interest Rate. As of the closing date of the Permanent Financing, the outstanding principal balance on the Note shall accrue interest at the rate of five percent (5%) per annum. 2.2 Principal and Interest Payments. Principal and interest shall be due and payable in equal consecutive monthly installments due and payable on the first day of each month commencing with November 1, 1994, based upon a thirty (30) year amortization schedule. Such payments shall continue until the entire indebtedness evidenced by the Note and all accrued but unpaid interest is fully paid, with any unpaid 3 6~1 principal and all accrued but unpaid interest due and payable on the Maturity Date provided in section 2-3 below. 2.3 Maturity Date. The Note is hereby modified to provide that the entire unpaid principal balance and all accrued interest shall be due and payable on December 31, 2008. 2.4 No other Chanqes. Except as expressly set forth herein, the Note shall remain unmodified, in full force and effect. 2.5 Endorsement. Upon the closing of the Permanent Financing, Agency shall prepare an endorsement to the Note to be executed by Agency and Borrower and attached to the Note to reflect therein the modifications effected hereby. 3. Modification of Security Documents. Notwithstanding anything to the contrary contained in any of the other Agency Loan Documents, each such document is hereby modified to the extent necessary to conform to the modifications of the Note set forth in section 2 above and to incorporate the full force and effect of said modifications as they apply to or affect the provisions of such documents. Each of the Agency Loan Documents is hereby amended to secure, to the extent that by its terms it does not already so secure payment and performance of all obligations of Borrower under the Note as modified in Section 2 above. All references in each of the other Agency Loan Documents to the Note and/or the Deed of Trust and/or any other such document shall, from and after the date of this Agreement, be deemed references to the Note, and/or Deed or Trust and/or other such documents as modified by this Agreement. 4. No Waiver by Lender. Except as specifically set forth herein and in other documents that may be executed by Agency in connection with the Permanent Financing, the execution of this Agreement by Agency shall not constitute a waiver of any rights or remedies to which Lender is entitled pursuant to the Note, the Deed of Trust, any of the other Agency Loan Documents, nor shall the same constitute a waiver of any default which may occur in the future with respect to the Note, the Deed of Trust, or any of the other Agency Loan Documents. 5. Recordation and Priority of Lien. Upon the recordation of this Agreement, this Agreement shall be a supplemental lien against the Property and shall encumber the Property until the Note, as herein amended, is fully paid and the Deed of Trust, as herein amended, is fully reconveyed and released of record; provided, however, that this Agreement shall in no way alter the priority of the lien on the Property created by the Deed of Trust or any of the other Agency Loan Documents and the terms and provisions of this Agreement shall relate back to the original 4 h..--ð date of the Deed of Trust and of each of the other Agency Loan Documents except to the extent that the Agency Regulatory Agreement and Deed of Trust are subordinated to the Department Loan and the CCRC Loan in connection with the Permanent Refinance. 6. Conditions. Agency's obligations under this Agreement are conditioned on the following: 6.1 On or before the date of execution of this Agreement, Borrower shall have delivered to Agency, at Borrower's sole cost and expense, for Agency's approval, either (a) the agreement of North American Title Insurance to issue to Agency an endorsement to Agency's policy of title insurance (Policy No. 30-58 000-30 issued June 21, 1991, Roy Brown, Title Officer) relating to the Loan (effective as of the date of recordation of this Agreement) insuring the priority of the Deed of Trust, as modified by this Agreement, to be a valid third lien on the Property subject to no new exceptions to title other than those created by the Department Loan Documents and the CCRC Loan Documents, or not otherwise or previously approved by Agency (a Form 110.5 endorsement), as well as any other endorsement reasonably required by Agency (including Form 111.2 endorsements with respect to the Department and CCRC Subordination Agreements), or (b) at Borrower's election, a new policy of title insurance providing comparable coverage to be issued by a title insurer satisfactory to Agency. 6.2 Borrower sha 11 have paid all title insurance premiums, escrow fees, recording fees, and other reasonable costs and expenses of Agency incurred in connection with this Agreement except legal fees and costs incurred by Agency in connection with this Agreement. 6.3 The Permanent Financing shall close pursuant to the terms of Department Loan Documents, CCRC Loan Documents and related escrow instructions previously approved by Agency Attorney. 6.4 Concurrent with the closing of the Permanent Financing out of Project Refinance proceeds, Agency shall be paid the amount of $100,000, as a pay-down of principal, plus prepaid interest at the rate of 5% per annum for each day up until, but not including, the first day of the calendar month following the calendar month in which the Permanent Financing closes. For example, if the Permanent Financing closes on September 22, 1994, the amount of prepaid interest to be paid hereunder shall be $346.30 (8 days of prepaid interest on a principal balance of $311,670.58 or $43.29 per day). All such payments shall be in immediately available funds. 6.5 This Agreement shall be recorded upon the Permanent Financing closing with the San Diego County Recorder in order to provide the lien priority set forth in section 5 hereof. 5 &-9 6.6 During the term of the Loan, income generated by the Project, if any, shall be made available to the Agency in accordance with the Department Regulatory Agreement and the Child Care Center Operating Reserve Agreement. 7. Representations and Warranties. Borrower hereby represents and warrants to Agency that: (a) Borrower has full right, power and authority to execute this Agreement and all of the documents required by this Agreement, and to perform its obligations hereunder and thereunder, without the need for any further action under its governing instruments, and any individual executing this Agreement or any other related document on behalf of Borrower personally represents and warrants that such individual is a duly authorized agent with full authority to do so, and with full power and ability to bind such entity; (b) this Agreement constitutes a legal, valid and binding obligation of Borrower enforceable in accordance with its terms; and (c) the execution and delivery of this Agreement shall not violate any law, agreement or document governing Borrower or to which Borrower is a party. 8. Relationship of Parties. Nothing set forth in this Agreement shall be construed as making Agency or Borrower, the partner, agent or joint venturer of the other, and Agency and each Borrower shall have no relationship to each other than as borrower and Agency. 9. Reportinq Requirements. Borrower agrees to provide Agency with a copy of the Annual Report and Audit provided to the Department pursuant to section 22 of the Department Regulatory Agreement by no later than ninety (90) days after the end of each "Fiscal Year for the Development" as provided therein. 10. Miscellaneous. 10.1 Additional Documents. The parties hereto shall execute all additional documents and do all acts not specifically referred to herein which are reasonably necessary to fully effectuate the intent of this Agreement and to preserve, protect, perfect or defend the security interests granted pursuant to certain of the Agency Loan Documents. 10.2 No Assiqnment. The terms of this Agreement are personal to the parties hereto and shall not be assigned. 6 (; - I¿J 10.3 Time of the Essence. Time is strictly of the essence of this Agreement and full and complete performance of each and every provision hereof. 10.4 Successors. Except as otherwise provided in the Agency Loan Documents or this Agreement, this Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the respective parties. 10.5 Governinq Law. This Agreement shall be governed by, and construed in accordance with, the laws of the state of California. 10.6 Notices. All notices and other communications provided for herein and in the Agency Loan Documents shall be given or made by telecopy or in writing and telecopies, mailed or delivered to the intended recipient at the "Address for Notices" specified in the Agency Loan Documents; or, as to any party, at such other address as sha 11 be designated by such party in a written notice to each other party. 10.7 Third Party Beneficiaries. Except as expressly provided herein, no person not a party to this Agreement shall have or acquire any rights by reason of this Agreement, nor shall any party hereto have any obligations or liabilities to such other person by reason of this Agreement. 10.8 Amendment. The provisions of this Agreement and any Agency Loan Document may not be amended, modified or waived except by an instrument or instruments in writing signed by respectively the Borrower's party thereto and Agency. 10.9 Exhibits. Each exhibit attached hereto is incorporated herein by this reference. 10.10 Entire Aqreement. This Agreement, together with all exhibits and schedules attached hereto and other agreements expressly referred to herein, constitutes the entire agreement between the parties with respect to the Loan. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 7 6~ II -~~- - IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. BORROWER PARK VILLAGE APARTMENTS LIMITED PARTNERSHIP, a California limited partnership By: PARK VILLAGE PARTNERS, a California general partner- ship, its General Partner By: CIVIC CENTER BARRIO HOUSING CORPORATION, a California nonprofit public benefit corpora- tion, Managing General Partner of the Park Village Partners By: Helen R. Brown, President REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA By: Title: Attest Secretary Approved as to form by Bruce M. Boogaard Agency Attorney c: laglparkvill.rnod 8 G -/2-/ EXHIBIT A Legal Description [to be inserted] 9 b~/3 STATE OF CALIFORNIA ) ) COUNTY OF ) On , before me, the undersigned, a Notary Public in and for said state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies) , and that by his/her/their signature(s) on the instrument the person(s) , or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public in and for Said State ~ -- /Lf ..,.' - Free recording in accordance with California Government Code Sections 6103 and 72383 RECORDING REQUESTED BY: DRAFf TWO (8/25/94) State of California, MARKED TO SHOW CHANGES Department of Housing and Community Development WHEN RECORDED MAIL TO: Department of Housing and Community Development Family Housing Demonstration Program P. O. Box 952054 Sacramento, CA 94252-2054 Attn: Family Housing Demonstration Program Manager SUBORDINATION AGREEMENT. ESTOPPEL CERTIFICATE AND INTER-CREDITOR AGREEMENT (BENEFICIARY DEED OF TRUST, BENEFICIARY SECURITY AGREEMEN1'¡:¡:~~.~l!t\tlfi AND BENEFICIARY REGULATORY AGREEMENT) NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY AND IMPROVEMENTS BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. TillS SUBORDINATION AGREEMENT, ESTOPPEL CERTIFICATE AND INTER- CREDITOR AGREEMENT (the "Agreement") is dated as of , 1994 and is entered into by and among THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, CALIFORNIA, a public body, corporate and politic ("Beneficiary"), PARK VILLAGE APARTMENTS LIMITED PARTNERSHIP, a California limited partnership ("Borrower"), and THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, a public agency of the State of California ("Lender"). RECITALS A. Borrower is the owner of the fee simple interest in that real property described in Exhibit A hereto. B. Borrower has constructed a 28-unit multi-family rental housing development and a child care cenler on the Property (the "Improvements"). The Property and the Improvements are sometimes referred to collectively herein as the "Project". 6- /5 C. Beneficiary has heretofore loaned to Ci'/ie Center Baffla IIal:lsing CaFpaFlllian, a Califamia nan IIr~fit fJl:I¡¡lie ¡¡enefit eaFpaæan ("CCBIIC")!i.iiìîiir the principal sum of Three Hundred Fifty Thousand Dollars ($350,000) (the "Beneficiary Loan") pursuant to the terms and conditions of that. certai~. ~e'¡elep~ell.t ...~reelllellt by Me bePlleell Bellefieiwz ~~~~; =~: ~' ~~ ~ ~~ ~,mans af ..hleh ..ere lIfflended by the terffis af th;: ;;<;u ;.;~~ ~:;::~:"Ela:;:\ :::m:~e J~:~:~t~~ :: ~:~;=n~_¡r~i.~~ili'f;romiSSOry Note Secured By Deed of Trust Elated Jl:lne 19, 1991 (the "Beneficiary Note"), and secured by: record~)Jllne ~:,t t;:~ !!!!~¡!ili;'I'!~: B.~~;~~i~;~~eo~~~~~ Records of San Diego County, California (the "BeneficiaiY^Dêedoti'rust;;);'ãñd~ (ii) that certain ecurity Agreement by and between Beneficiary and evidenced by that Financing Statement (Form UCC-I liS Dael:llllellt Ne. of San Diego County, California D. In conjunction with making the Beneficiary Loan, Beneficiary required eeBH€:~&)¥~ ~~n:~~n~n~~v:!!~~!~~~~~~~~~~;;~%~st, ~~n~~~;~;;:n:~~f~~~snrn ~~~~~f:~ affordable rents by low and very low-income households. Said agreement was entered into by and between Beneficiary and , , and recorded all liS in the Official Records of San Diego County, California (the "Beneficiary Covenants Agreement"). E. ~:~~~~s .~eft)tefeft) lissiglled its Fights !!fIEI delegated its Ell:lties I:Inåer the BellefieiRry Deyelepffient Agreemellt, t1)he Beneficiary Note, the Benefici Deed of Trust, the Beneficiary Covenants Agreement, the Beneficiary Security Agreeme and certain other documents pertaining to the Beneficiary Loan ollectivel , the "Bene~ci~ Loan Documents"), teA B~ff6':¡er, ~å Bellefieifll') has ~ellse~::,,: s~~;~t¿n::~: ~:~~~~~ ~II thlit rNliffie af . ,s31~nffiellt . ,~reelllellt1 , by Må .;;~ þfu_u~, -""'1". f Md Bcnefielary, Elaleå , reeafEled ell liS Dael:lHl <. in the Offieial Reearås ef S!!fI Diege Cel:lnly, Califemia (the "Assigllffiellt J,;;;~~t"). F. In order to provide permanent financing for the Improvements, Lender has agreed to loan Borrower a sum not to exceed One Million Four-Hundred Three Thousand Five-Hundred Sixty-Five Dollars ($1,403,565) (the "FHDP Loan"), subject to the terms and conditions of: (i) a development agreement Elateå liS ef the àlite hereef (the "FHDP Development Agreement"), (ii) a regulatory agreement restricting the use and occupancy of the Project and the income derived therefrom, èftIeå...fts ef the ålite hereef Må recorded as an encumbrance on the Property and on certain other real property 2 ~-/Io owned by the City of Chula Vista in which Borrower has a leasehold interest (the "Leasehold Property"), and (iii) other loan documents. Said regulatory agreement was recorded as an encumbrance on the Property and on the Leasehold Property e8 as Deel:lffiellt Ne. 11ilfi»1I!tiiB in the Official Records of San Diego County, California (the "FHDP Regulatory Agreement"). The FHDP Loan will be evidenced by a promissory note (the "FHDP Note"), the repayment of which is secured by, among other things, a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing by Borrower as trustor, to Lender as beneficiary, Elated II!! ef tile Elate kereef IiREi recorded as an encumbrance on the Property and Borrower's interest in the Leasehold Property in the Official Records of San Diego County, California (the "FHDP Deed of Trust" . ~m.&i!i!IIS~[~If§iJlI.Jl!llmiì~I1;_¡I~¡ig¡.~~i~.lal'¡If£lt;l~r1 and by such other security as is identified in the FHDP Development Agreement. G. Lender is willing to make the FHDP Loan provided the FHDP Deed of Trust and the FHDP Regulatory Agreement are liens, claims or charges upon the Project prior and superior to the Beneficiary Deed of Trust, Beneficiary Security Agreement and the Beneficiary Covenants Agreement, 1~¡lllftl£1lt~:]ÎI~¡¡~!~~':~¡mm:~til§Ulg~iRñ?íììlJ~iIEm~l,ìl:!!~¡~~I~¡!I!lûÞ.¡II;i~~ftftè preyiEled llIat the Beneficiary specifically and unconditionally subordinates and subjects the Beneficiary Deed of Trust, Beneficiary Security Agreement and the Beneficiary Covenants Agreement to the liens, claims or charges of the FHDP Deed of Trust and the FHDP AGREEMENT NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to induce Lender to make its FHDP Loan, it is hereby declared, understood and agreed as follows: I. Recitals. The foregoing Recitals are true and correct and are incorporated herein by this reference as agreements of the parties. 2. Subordination. The FHDP Regulatory Agreement and the FHDP Deed of Trust securing the FHDP Note in favor of Lender, and any and all renewals, modifications, extensions or advances thereunder or secured thereby (including interest thereon) shall unconditionally be and remain at all times liens, claims, or charges on the Project prior and superior to the Beneficiary Deed of Trust, Beneficiary Security Agreement and the Beneficiary Covenants Agreement, and to all rights and privileges of Beneficiary thereunder; and the Beneficiary Deed of Trust, Beneficiary Security Agreement and the Beneficiary Covenants Agreement together with all rights and privileges of Beneficiary thereunder are hereby irrevocably and unconditionally subject and made subordinate to the liens, claims or charges of the FHDP Deed of Trust and the FHDPRegulatory A reement. 3 fc- /7 3. Whole And Only Ae:reement. This Agreement shall be the whole and only agreement with regard to the subordination of the Beneficiary Deed of Trust, Beneficiary Security Agreement and the Beneficiary Covenants Agreement, together with all rights and privileges of Beneficiary thereunder, 10 the liens, claims or charges of the FHDP Deed of Trust and the FHDP Regulatory Agreement, and this Agreement shall supersede and cancel any prior agreements to subordinate the claims, liens or charges of the Beneficiary Deed of Trust, Beneficiary Security Agreement and the Beneficiary Covenants Agreement to the FHDP Deed of Trust and the FHDP Regulatory Agreement including, but not limited to, those provisions, if any, contained in the Beneficiary Covenants Agreement, Beneficiary Security Agreement or Beneficiary Deed of Trust which provide for the subordination of the claim, lien or charge thereof to another claim, lien or charge on the Property or the Improvements. 4. Beneficiary's Declarations And Agreements. Beneficiary declares, agrees and acknowledges that: (a) Beneficiary consents and approves (i) all provisions of the FHDP Note, the FHDP Deed of Trusq~_I!¡iJ*It;¡ and the FHDP Regulatory Agreement, and (ii) all agreements among Beneficiary, Borrower and Lender for the disbursement of the proceeds of the FHDP Loan, including without limitation the FHDP Development Agreement and any loan escrow agreements which have been provided to Beneficiary for review; (b) Lender, in making disbursements of the FHDP Loan pursuant to the FHDP Development Agreement, the FHDP Note or any other agreement, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds, and any application or use of such prOCeeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) The Beneficiary Loan Documents are in full force and affect, and have not been amended, and there is no breach, event of default or default existing under any of such documents or any other document creating or securing the Beneficiary Loan, or event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both, that have not been waived by Beneficiary by its execution of this Agreement; (d) That none of the execution, delivery or recordation of any of the FHDP Note, FHDP Deed of Trust, FHDP Development Agreement, ;§1i!t!}!i~i10r FHDP Regulatory Agreement, or the performance of any provision, condition, covenant or other term thereof, will conflict with or result in a breach of the Beneficiary Loan Documents; 4 t--- If (e) Beneficiary has approved the Improvements as completed, and acknowledges that the Improvements include six I-bedroom units, thirteen 2-bedroom units, and nine 3-bedroom units; IIftE! (t) Beneficiary intentionally and unconditionally waives, relinquishes, subjects and subordinates the claims, liens or charges upon the Project of the Beneficiary Deed of Trust, Beneficiary Security Agreement and the Beneficiary Covenants Agreement, all present and future indebtedness and obligations secured thereby, in favor of the claims, liens or charges u n the Project of the FHDP Deed of Trust and the FHDP R ulatory Agreement, and understands that in reliance upon, and in consideration of, this waiver, relinquishment, subjection, and subordination, the FHDP Loan and advances thereof are being and will be made and specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment, subjection and subordination. 5. Inter-creditor. (a) Notwithstanding any provision in the Beneficiary Loan Documents to the contrary, including without limitation Paragraph 8 of the Beneficiary Covenants Agreement, acquisition of the Property and Improvements pursuant to a trustee's sale or judicial foreclosure under the FHDP Deed of Trust or a deed in lieu of foreclosure thereunder, shall terminate all of the covenants, conditions, restrictions, limitations and provisions of the Beneficiary Loan Documents. (b) Notwithstanding any provision in the Beneficiary Loan Documents to the contrary, during any time that either the FHDP Deed of Trust or FHDP Regulatory Agreement is recorded as a lien, encumbrance, claim or charge against the Property, the parties hereto agree that: (i) in choosing tenants for the Improvements, Borrower shall not grant a preference to any applicant, including but not limited to any applicant displaced from a trailer park, except to the extent that such preference is provided for in the FHDP Regulatory Agreement (eg. families with children and elderly persons) or is approved in writing by the Lender; (ii) tenancy in the Improvements shall not be denied to any person solely on the basis that said person had, within the period of time extending back seven (7) years prior to any period of occupancy, or proposed occupancy, been convicted of any offense which had as one or more of its elements either (i) the possession, sale or use of any illicit drug (other than alcohol) or (ii) the use of violence or force; provided that tenancy in the Improvements may be denied to any person who has been convicted of any such offense if Borrower can demonstrate that said person would have been rejected as a tenant for a reason that (i) is rationally related to the legitimate business purpose of the Improvements and (ii) would have been the basis for rejection absent any such conviction; 5 ~-/9 (iii) the remedy for collecting rent which exceeds either the maximum rent allowed pursuant to the FHDP Regulatory Agreement or the maximum rent allowed pursuant to the Beneficiary Covenant Agreement, shall not be a immediate remittance of said excess rent to Beneficiary; provided that neither Lender nor Beneficiary shall be otherwise limited in their exercise of remedies available to them for breach under the FHDP Regulatory Agreement or Beneficiary Covenant Agreement, respectively,,:~ (iv) Beneficiary shall not amend the tenns of any of its Beneficiary Loan Documents so as to conflict with the tenns of the FHDP Regulatory Agreement without the prior written approval of Lender; and (v) Beneficiary's rights under the Beneficiary Loan Documents to receive insurance proceeds, to receive rents from the Improvements and to amend contracts entered into by Borrower are subject to the rights of Lender under the FHDP Deed of Trust. r'" [g1t\Ìif!iiiBeneficiary further agrees that no breach shall exist or default shall be declared under any of the Beneficiary Loan Documents based on Borrower's compliance with the tenns of this Agreement. (~e) Borrower shall make payments under the Beneficiary Note prior to the determination of Net Cash Flow, as described in the FHDP Regulatory Agreement; provided that Beneficiary agrees that, during any time that either the FHDP Deed of Trust or FHDP Regulatory Agreement is recorded as a lien, encumbrance, claim or charge against the Property, Beneficiary shall not declare a default under the Beneficiary Note or exercise any of its remedies under the Beneficiary Loan Documents, if, in the determination of Lender, ~ÎÌg &:m~ (as that term is used in the FHDP Regulatory Agreement) for the previous Fiscal Year (as that term is used in the FHDP Regulatory Agreement) is insufficient to make the payments required under the Beneficiary Note. 5- Lender's Reliance. Lender would not make the FHDP Loan without this Agreement. 6. Beneficiary's Ri~hts to Cure. Following a notice from Lender to Borrower that a default or breach exists under the tenns of the FHDP Note, the FHDP Deed of Trust, the FHDP Development Agreement, or the FHDP Regulatory Agreement, Borrower shall promptly send a copy of such notice to Beneficiary and Beneficiary shall have the right to: (a) cure the noticed default, for a period of forty-five (45) days following Lender's notice to Borrower; (b) negotiate with Lender regarding the noticed default, provided that such negotiation is commenced within forty-five (45) days following Lender's notice to Borrower and shall continue no longer that forty-five (45) days following Lender's notice to Borrower; and 6 r:; - :2ß (c) purchase the Project from Borrower, provided such transfer of ownership is approved in advance by Lender, pursuant to the terms of the FHDP Regulatory Agreement. Lender agrees that following its acceptance of the cure of a noticed default by Beneficiary, Lender will not exercise its right to accelerate the amounts due under the FHDP Loan by reason of the default cured by Beneficiary. 67. Miscellaneous. ,,", (a) This Agreement shall be binding on and inure to the benefit of the legal representatives, heirs, successors and assigns of the parties. (b) This Agreement shall be governed by and construed in accordance with the laws of the State of California. (c) In the event that any party to this Agreement brings an action to interpret or enforce its rights under this Agreement, the prevailing party in such action shall be entitled to recover its costs and reasonable attorneys' fees as awarded by the court in such action. (d) This Agreement may be signed by different parties hereto in counterparts with the same effect as if the signatures to each counterpart were upon a single instrument. All counterparts shall be deemed an original of this Agreement. (e) The captions used in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or intent of this Agreement. (t) This Agreement may be amended only by a written agreement signed by all of the parties hereto. 7 t-c2! NOTICE: nns SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALWWS THE ENTITY OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A WAN WHICH MAY BE EXTENDED FOR PURPOSES OTHER THAN IMPROVEMENT OF THE LAND. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day of ,1994. BENEFICIARY: THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, CALIFORNIA By: Naffie'.. ~ Executive Director Approved as to form: By: Naffie'.. ~ Agency Counsel BORROWER: PARK VILLAGE APARTMENTS LIMITED PARTNERSHIP, a California limited partnership By: PARK VILLAGE PARTNERS, a California general partnership, its sole general partner By: CIVIC CENTER BARRIO HOUSING CORPORATION, a California non-profit public benefit corporation, its Managing General Partner By: 8 ~-2-Þ- LENDER: THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, A PUBLIC AGENCY OF THE STATE OF CALIFORNIA By: Ntime'-. Russ Schmunk Rs7 Senior Program Manager, Family Housing Demonstration Program SIGNATURES MUST BE ACKNOWLEDGED 9 &~~3 -- - EXHffiIT A Lel!al DescriDtion of the ProDerty All that certain real property situated in the City of Chula Vista, County of San Diego, State of California, and described as follows: b-).f -1!ROBECK ~~ 141002 09/13/94 12:36 U415 979 2930 -- REeO1U)ING REQUES!rED BY W!ŒN RECO1U)ED RE'1'URN TO: Wendy Cl1Sham CALIFORNIA COMKUNln JmINVESTHENT CORPORA'rION 455 Market strQet, 17th Floor San l"rartcisco, Ca 94105 SUBORnYNATION AaRRE:I!IEN7: (Deed of Trust and Regulatory Agreement to Deed of Trust, Ass.igmuent: of Leases, Local ncC-1 and State neC-I) NOTICE: 'l'HIS SD'BO1U):INA'l'ION AGREEJŒN'l' RESULTS IN YOUR SECDlU:n rNTERESTS IN 'l'IŒ PROPERTY BECOMING SUBJECT TO AND OF I£IWER PRIORI'l'Y THJ\N THE LIEN OF SOME O:rHER OR LATER SECtJlUTy INSTRtJHEßT. THIS SVBORI)nm~IO1f AGDIIJIJßß' is _de this day ot Septembu, 1994 by l'JUut VILLaGII DARTJœnS LIJaTBD PUTIllEU:a:IP, a California limited partnership ("BO:l;'rower"), and !mB JtBDBVBLoPlOUr1' ~ OP ~.. ern OP CHULa VZ8~A, a Øa1i~a~ftia mQßieipa1 .al!' ¡l"~!eft ~ body. e01'DO:rat:e _d Doli1qie ("Agency"), in favor Of CALI:roRIIIA COJOmlfXTY REIlITVBBTIOIft CORPORaTION, a california nonprofit: public benefit cO:tporation ("CCRC"). RECITALS: A. Agency and Be_-... vie te 0 i tio C t a rot 1G GO a 011 ~ have execute(! tl¡at certa1n Agreemen Conta1n1nq Restr ct.lve Covenants ("Agency Aqreement"), dated June 19,1991, setting forth certain use restrictions affectinq that CQrtain real property located in the City Of CbuJ.a Vista, County Of San Dieqo, and State of california, as lIIOre particularly described in Exhibit A attl\ched hereto (the "Property"). The Agency AqreemQnt was racorded in the San Diego County Offioia1 Reoords ("Official Records") on June 21, 1991, as Instrument No. 511-03005101. In addit:ion, Be~~e'ilar ~ ItXQcuted a dQed of trust, as amonded f'rom time to time (as so aDlendQd, the "Aqency Deed Of Truat"), dated June 19, 1991, encUDlbering the property in favor of Ac¡ 'ency securing Be~lI'- el! 's ~BJ{~ obliqations under a promissory note in favor of Agenoy in the or qinal amount 0'1: $350,000.00, as amended from time to time, and whiCh was recorded in t:he Official Recorda On June 21, 1991, as Instrument No. 91-0300900. The Agency Deed of Trust and the Agency Agreement are Collectively referrQd to herein as the "Aqency EncUDlbrances." 0 9 C ell D r t: t; :i r t e AIII8 Bl'HtF6\I/1:\DO57262.Q4 1. OP'13194 ~ -,;{5 BROBECK 12..!.~ -. Ii!JOO3 09/13/94 12:39 !t415 979 2930 B. Borrawer has executed, or is about to exec~te. a promissory note in fa~or of CCRC in the ~ac. amount of $286,000.00 (as supp~ementeCi or amended frolD time to tilllQ, thca "CCRC Note") dated of even date hereWith, and evidencing a loan ("CeRC Loan") in such ðJ\\Ount to Borrower by CCRC pursuant to a Loan Agreement ("CCRe Loan Agreemant") between CCRe and Bo:r:rower. The CeRC Note is to be secured by a deed 01: trust (as SUPP~B1IIented or a_nded from time to time, the "CCRC Deecl of Trust") and an AssiÇ/lUHnt of Leases (as supplemented or amended from time to time, the "CCRe Assignlllent"), each executed by Borrower, dated o~ even dat.. he:rewith and encumbering the Property. In addition, Borrower has executed, or is about to execute, a trCC-l Local Financing statement (the "C~C Local trcc") and a UCC-l State Financing Statement (the "CCRC State UCC") covering the collateral described in th.. CCRC Security Aqre-ent and CCRC Deed of 'l':rust. 'l'he CCRC Deed o~ Trust, the CCRC Assignment and the CCRC Local trce will be recorded in the Official Records. The CCRC State uee will be filed ~ith the Secret~ry of State. 'l'he CCRC Deed of Trust, the CCRC Assi.gnmQDt, the CCRC Local VCC and the CCRC state trCe Ill:e ho;>reinafter collectively, the "CCRC Encumbrances". C. As a COndition to Dlaking the CCRC Loan, CCRC requires that the CCRe Enoumbrances securing such loan be unconditionally and at all times remain ~ lien or charge upon the Property, prior and superior to all rights of Agency under the Agency Encumbrances and all indebtedness secured thereby, and that Agency specifiCally and unconditionally subordinate the lien of thØ Aqency Enoumbr<UlCes and all the indebtednB8s secured thereby to the lien or cha:rqe of the CCRC Encumbrances. D. Agency and Borrower intend that the CCRC Encumbrances shall unconditionally be and remain at all times a lien or charge upon the Properly prior and superior to Agency I s rights under the Agency Encumbrances and all indebtedness secured thereby. Agency has agreed to specifica¡ly and unconditionally subordinate and subject the Agency Encumbrances and all indebtedness secured thereby, toqether ~ith all rights and privileges or Agency thereunder, to the lien and charge of the CCRC Enc\2W)rances. E. It is to the mutual benefit of the parties hereto that CCRC lIIake the CCRe Loan to BorrowerJ and Aqency is willing' that the CCRC Encumbrances seCUring such loan shall, when recorded, constitute a lien or charge upon the Property which is unoonditionally prior and superior to the Agency Encumbrances and all indebtedness secured thereby. HOW. 'J.'JŒUi'OlU!I. in consid8rat:ion of the lIIutual benefitl!: accruing to the þarties hereto and other valUable cons.ideration, the receipt: and sufficiency of Which consideration il!: he:J:eDY acknowledged, it is hereby declared, understood and. agreed alii fo~lows: 1. '¡'he foregoing Recitals are hereby incorpo:J:ated into thilll Agreement as aqreElDlents among- the parties. BPHSF6\WC\0057262.1X 2. 09/13/94 ~-;2~ 09/13/94 12:40 UU5 979 2930 BROBECIi..f! ~ --- ___141004- 2. The CCRC Encumbrances securing- the CCRe Note, and any modifications, ren-a1s or extensions thereof, and any advances e ino1udinq interest thereon) thereunder or secured 1:.hereQy, shall unconditionally be and reœain at all times lians or charges on the Property, prior and superior to the Agency Encumbrances and all :Utdebtedness secured thereby, to all loans, grants and advances Of' money made pursuant thereto, and to all rights and privileges of Agency, thereunder, and said Aqeney Encumbrances and all indebtedness secured thereby, and all loans, grants and advances of monel made pursuant thereto, together with all rights and priv leges of Agenoy thereunder, are hereQy subjected, and made subordinate, to the lien or charqe of thGl CCRe EnCWDbrances in favor of CCRC. :: '~ey~ ~~~~ B&= :::J!=:~ Jr= ;; ~ft ::i:~l~ ;=~ns~;;!~~¿:;~::fJ:h:;~=1I B~~=;::} =:i: ;: ;: :~ ~~~es. 3. This Agreement shall be the whole and only agreement between the parties hereto with reqard to the subordination of the Agency Encumbrances and all indebtèdness secured thereby, and all loans, grants and "Clvances of money made pursuant thereto, tOc;rether with all rig-hts and priVileges of Agency thereunder, to the lien or charge of the CCRe Encumbrances, and shall supersede and cancel any prior agreelll8nts to subordinate the Agency Encumbrances and all indebtedness Secured thereby to the CCRC Encumbranoes. 4. Agency c3ec1ares, agree.., and acknowledge.. that: a. :It cOD$entll to and approves (i) all provisions of the CCRC Note and CCRC Encumbrances in favor of CCRC, (if) all aqreements, including but not limited to any loan agreements or other loan or eSCrow agreeJllents between or among Borrower and CCRC for the disbursement of the proceeds of the CCRC Loan; b. CeRe in making disbursements pUt'lIuant to any such agreements is under no obliqation or duty to, nor has CCRC represented that it will, see to the application of such proceeds by the person or persona to whom CCRC disburse such proc-ds, and any application or use of such proceeds for P~oses other than those provided fol; in such aqreemGlnt: or agreements shall not defeat the subordination herein made in whole or in part; and c. It intentionally and unconditionally waives, relinquishes, Subj eets and s\JJ; ordinates the Aqency EncU1!lbl;ances and all indebtedness secured therGby, and all loans, grants, and advances of money pursuant thereto, togethel; with all rights and privileges of Agency thereunder, in favor of the lien or charqa upon the Property of the CCRC Enoumbrances and undQrstands: t:hat in reliance upon, and in consideration of, this waiver, relinquishJQent, subjection, and subordination specific loans and advances are beiru¡ and will be made and, all part and parcel thereof, specific monetary and other obligations are being- and will BPIISF6\IIC\OO57262.04 3. 09/13/91. ¿, -;;2 7 . BROBECK F.!!....8' I~ Ii!JOO5 09/13/94 12; 40 '0'415 979 2930 be entered into which WOuld not be made or entered into but for said reliance upon this wa i'lrer , relinquishment, subjection and subordination. aerr..s. but OIl]Y as a lIeDarate Qd C a C It -t1o:rl to the t: - c ~lU\d ~B f t a. set folit: n. as 10; J.il r glu fee aJld 1 of 11 rrowe eno SU;; lUt te 0 to t. R e l' 10'11' 'PHSF6\WC\OO5~.u. 4. 09/13/94 r::~,;¿¡ !r41G 979 2930 BROBECK FS It. IG 1i!J006 09113194 12:41 L d aDO . 011. be arts he . NOTICE: THIS SUBORDINATION AGREEJœNT RESULTS IN YOUR SECURITY INTERESTS IN THE PROPERTY BECOHING SUBJECT TO AND OF LOWER PRIORITY TJfAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMEN'l'. "Borrowern PARK VILLAGE APARTHBNTS LIMITED PARTNERSHIP, a california lhited partnership By: PARK VILLAGE PART}ŒRS, a California qeneral partnership, its General Partner By: CIVIC CENTER BARRIO HOUSING CORPORATION, a California nonprofi~ public benefit corporation, Manaqinq General Partne:t" of Park Village Partners By: Relen R. Brown, President BPHSF6\IIC\O05?262.04 5. 09/15/94 ~ -;2 9 BROBECK F5 8:!i' "-- -, 1i!J007 09/13/9~ 12:~2 U~15 979 2930 "ceRe" CALIFORNIA COMMt1Jl:I:TY lŒ:tNVES:t'JŒNT CORPORATION, a. California nonprofit pUblic 1)QJ18fit corporation By: Daniel B. Lopez, President ".aque}'" ATT2STI THE 1ŒDEVEU>PHEN'.r AGENcY OF THE CrTI.' OF CJmLA VISTA, a public body, corporate and politic Secretary of the Redevelopment Agenoy By: Exeoutive Director APPROVED AS TO FOb: By: Chairman Aqency General Counsel Agency Special Counsel IPHSf6\IIC\OO572&2-0I0 6. DO1131~ (,-30 Amended Ground Lease Agreement between City of Chula vista and Park Village Apartments THIS AMENDED LEASE, is entered into effective as of - , 1994 ("Effective Date", as defined in section 2:2 below), by and between: 1: Parties The City of Chula Vista, a municipal corporation of the State of California, hereinafter "Lessor," and Park Village Apartments Limited Partnership, a California limited partnership, "Lessee," is made with reference to the fol- lowing references, definitions and facts: 2: References and Recitals: 2: .1 "Subject Property"; "Premises" "Subject Property", or "premises", used alternatively herein, shall mean the real property, which is essentially unimproved, which is the subject matter of this Ground Lease is an approximately 650 square foot area of a park in the City of Chula vista known as Lauderbach Park, located at 333 Oxford Street, located in Chula Vista, San Diego County, California, and is diagrammatically presented as set forth in Exhibit A, and legally described as set forth in Exhibit B. 2: .2 "Effective Date" The Effective Date shall be the closing date for Lessee's permanent financing for the 28 unit affordable housing and childcare project located on and adjacent to the Premises as provided by the California Community Reinvestment Corporation, the Department of Housing and Community Development for the State of California and the Redevelopment Agency for the City of Chula vista. 3: Leasing Clause grndlse4.wp Amended Ground Lease September 9, 1994 Page 1 6 -31 -,- " In consideration of the mutual covenants contained herein, Lessor hereby leases the Subject Property to Lessee, and the Lessee hereby leases from the Lessor, for the term and use, at the rental, and upon all of the conditions and covenants set forth herein. 4: Use Use of the site shall be only for an outdoor play area for a child care center at the Park Village Apartments, located adjacent thereto and to the east thereof, at the property commonly known as 1246-1256 Third Avenue, Chula vista. 4: .1 Compliance with the Law. Lessee shall, at Lessee's expense, comply promptly with all applicable statutes, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the term or any part of the term hereof, regulating the use by Lessee of the Premises. Lessee shall not use nor permit the use of the Premises in any manner that will tend to create waste or a nuisance. 4: .2 Obligation to Refrain from Discrimination. Lessee covenants by and for itself, its successors, its assigns and every successor in interest to the site or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, age, handicaps, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Participant 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 site. The foregoing covenants shall run with the land. 5: Intentionally omitted 6: Term of Lease 6:.1 The Lessee is to have and to hold the premises after the Effective Date for a term of sixty years or for such shorter period of time that the Park Village Apartments remains subject to the terms of that certain Department of Housing and Community Development Family Housing Demonstration Program Regulatory Agreement Loan Number 91- FHDP-OO1 (the "Regulatory Agreement"). grndlse4.wp Amended Ground Lease September 9, 1994 Page 2 ¿-3Þ 6: .2 Extensions: There shall be no extensions of this lease except as may be agreed upon in writing between the parties. 6: .3 Terminating Events: Notwithstanding the foregoing, the following events shall cause this Lease to be terminated forthwith. 6: .3.1 Exercise of Eminent Domain by any entity with the authority to exercise eminent domain. 6: .3.2 Termination of the Regulatory Agreement. 7: Rent 7: .1 The Lessee covenants and agrees to pay to Lessor $1.00 per year as rent. 8: Condition of Premises Lessee hereby accepts the Premises in their condition existing as of the Lease Effective Date or the date that Lessee takes possession of the Premises, whichever is earlier, subject to all applicable zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use of the Premises, and any covenants or restrictions of record, and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto. Lessee acknowledges that neither Lessor nor Lessor's agent has made any representation or warranty as to the present or future suitability of the Premises for the conduct of Lessee's business. Furthermore, Lessor makes no representations as to the possibility of hazardous materials or toxic waste being located on the subject premises except that Lessor warrants and represents that Lessor has not deposited any such materials on the Subject Property. Lessee has the right to inspect and conduct soils tests and studies as hereinbelow provided, and to thereby determine for itself that the soils condition is satisfactory to his needs. 9: Risks of Loss; Insurance 9: .1 Indemnity. Lessee shall indemnify and hold harmless Lessor from and against any and all claims arising from Lessee's use of the Subject Property, or from the conduct of Lessee's business or from any activity, work or things done, grndlse4.wp Amended Ground Lease September 9, 1994 Page 3 b -33 permitted or suffered by Lessee in or about the Premises or elsewhere and shall further indemnify and hold harmless Lessor from and against any and all claims arising from any breach or default in the performance of any obligation on Lessee's part to be performed under the terms of this Lease, or arising from any negligence of the Lessee, or any of Lessee's agents, contractors, or employees, and from and against all cost, attorney's fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; and in case any action or proceeding be brought against Lessor by reason of any such claim, Lessee upon notice from Lessor shall defend the same at Lessee's expense by counsel satisfactory to Lessor. Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property or injury to persons, in upon or about the Premises arising from any cause and Lessee hereby waives all claims in respect thereof against Lessor. 9:.2 Exemption of Lessor from Liability. Lessee hereby agrees that Lessor shall not be liable for injury to Lessee's business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of Lessee, Lessee's employees, invitees, customers, or any other person in or about the Premises, nor shall Lessor be liable for injury to the Lessee, Lessee's employees, agents or contractors, whether such damage or injury is caused by or results from fire, flood, rain, water, steam, electricity, gas, or from the breakage, leakage, obstruction or other defects of the land, grading, elevation of the land, pipes, wires, appliances, plumbing, or from any other cause, whether the said damage or injury results from conditions arising upon the Premises or from other sources or places and regardless of whether the cause of such damage or injury or the means of repairing the same are inaccessible to Lessee. Lessor shall not be liable for any damages arising from any act or neglect of any other tenant, if any, of the land adjacent to the premises leased by Lessor. 9:.3 Liability Insurance. Lessee shall, at Lessee's expense obtain and keep in force during the term of this lease a policy of Combined Single Limit, Bodily Injury and Property Damage insurance insuring Lessor and Lessee against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be a combined single limit policy in an amount not grndlse4.wp Amended Ground Lease September 9, 1994 Page 4 &-3~ less than $1,000,000.00 per occurrence. The policy shall insure performance by Lessee of the indemnity provisions of this Section 9. The limits of said insurance shall not, however, limit the liability of Lessee hereunder. 9: .4 Property Insurance. Lessee shall not be required to obtain and keep in force during the term of this Lease a policy or policies of insurance covering loss or damage to the Premises for so long as same remains unimproved. If the Premises are hereafter improved, Lessee shall provide such insurance as may be acceptable to the Lessor. 9: .5 Insurance Policies. Insurance required hereunder shall be in companies holding a "General Policyholders Rating" of at least B plus, or such other rating as may be required by a lender having a lien on the Premises, as set forth in the most current issue of "Best's Insurance Guide." The Lessee shall deliver to the Lessor copies of policies of such insurance or certificates evidencing the existence and amounts of such insurance with loss payable clauses as required by this Section 9. No such policy shall be cancelable or subject to reduction of coverage or other modification except after thirty (30) days prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to the expiration of such policies, furnish Lessor with renewals or "binders" thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee upon demand. Lessee shall not do or permit to be done anything which shall invalidate the insurance policies required hereby. If Lessee does or permits to be done anything which shall increase the cost of the insurance policies required herein, then Lessee shall forthwith upon Lessor's demand reimburse Lessor for any additional premiums attributable to any act or omission or operation of Lessee causing such increase in the cost of insurance. 9: .6 Waiver of Subrogation. Lessee and Lessor each hereby release and relieve the other, and waive their entire right of recovery against the other for loss or damage arising out of or incident to the perils insured against under this Paragraph 9, which perils occur in, on or about the Premises, whether due to the negligence of Lessor or Lessee or their agents, employees, contractors and/or invitees. Lessee and Lessor shall, upon obtaining the policies of insurance required hereunder, give grndlse4.wp Amended Ground Lease September 9, 1994 Page 5 ¿'-3.s notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease. 10: Maintenance, Repairs and Alternations 10: .1 Lessee's Duties. Lessee shall keep in good order, condition and repair the Premises and every part thereof, structural and non- structural, (whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises) including, without limiting the generality of the foregoing, all plumbing, heating, air conditioning, ventilating, electrical, lighting facilities and equipment within the Premises, fixtures, walls (interior and exterior), foundations, ceilings, roofs (interior and exterior), floors, windows, doors, plate glass and skylights located within the Premises, and all landscaping, driveways, parking lots, fences and signs located on the Premises and sidewalks and parkways adjacent to the Premises. 10: .2 Surrender. On the last day of the term hereof, or on sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as when received, or if such improvements was constructed, then when constructed, ordinary wear and tear excepted, clean and free of debris. Lessee shall repair any damage to the Premises occasioned by the installation or removal of Lessee's furnishing and equipment. Notwithstanding anything to the contrary otherwise stated in this Lease, Lessee shall leave the Premises in good condition. 10: .3 Lessor's Rights. If lessee fails to perform Lessee's obligations under this Paragraph 10, or under any other paragraph of this Lease, Lessor may at its option (but shall not be required to) enter upon the Premises after ten (10) days prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf and put the same in good order, condition and repair, and the cost thereof together with interest thereon at the maximum rate then allowable by law shall become due and payable as additional rental to Lessor together with Lessee's next rental installment. grndlse4.wp Amended Ground Lease September 9, 1994 Page 6 ~-3b 10: .4 Lessor's Obligations. Except for the obligations of Lessor specifically elsewhere provided in this Lease, it is intended by the parties hereto that Lessor has no obligation, in any manner whatsoever, to repair and maintain the Premises nor the structural improvements, including any buildings, now located or to be constructed thereon, nor the equipment now located or to be constructed therein, whether structural or non structural, all of which obligations are intended to be that of the Lessee under Paragraph 10.1. Lessee expressly waives the benefit of any statute now, or hereinafter in effect which would otherwise afford Lessee the right to make repairs at Lessor's expense or to terminate this Lease because of Lessor's failure to keep the premises in good order, condition and repair. 10: .5 Alterations and Additions. 10: .5.1 Alterations without Consent Prohibited. Lessee shall not, without Lessor's prior written consent, make any alterations, improvements, additions, or utili ty Installations in, on or about the Premises. In any event, Lessee shall make no change or alteration to the Premises without Lessor's prior written consent. As used in this Paragraph 10.5, the term "utility Installation" shall mean electrical distribution systems, lighting fixtures, space heaters, plumbing, and fencing. Lessor may require that Lessee remove any or all of said alterations, improvements, additions or utility Installations at the expiration of the term, and restore the Premises to their prior condition. Lessor may require Lessee to provide Lessor, at Lessee's sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated cost of such improvements, to insure Lessor against any liability for mechanic's and materialmen's liens and to insure completion of the work. Should Lessee make any alterations, improvements additions or utility Installations without the prior approval of Lessor, Lessor may require that Lessee remove any or all off the same. 10: .5.2 Procedure; Permits required. Any alterations, improvements, additions or utility Installations in, or about the Premises that Lessee shall desire to make and which requires the consent of the Lessor shall be presented to Lessor in written form, with proposed detailed plans. If Lessor shall give its consent, the consent shall be deemed conditioned upon Lessee grndlse4.wp Amended Ground Lease September 9, 1994 Page 7 ~-37 acquiring a permit to do so form appropriate governmental agencies, the furnishing of a copy thereof to Lessor prior to the commencement of the work and the compliance by Lessee of all conditions of said permit in a prompt and expeditious manner. 10: .5.3 Mechanics and Materialmen's Liens. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use in the Premises, which claims are or may be secured by any mechanics' or materialmen's lien against the Premises or any interest therein. Lessee shall give Lessor not less than ten (10) days' notice prior to the commencement of any work in the Premises, and Lessor shall have the right to post notices of non-responsibility in or on the Premises as provided by law. If Lessee shall, in good faith, contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend itself and Lessor against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Lessor or the Premises, upon the condition that if Lessor shall require, Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to such contested lien claim or demand indemnifying Lessor against liability for the same and holding the Premises free from the effect of such lien or claim. In addition, Lessor may require Lessee to pay Lessor's attorneys fees and costs in participating in such action if Lessor shall decide it is to its best interest to do so. 10: .5.4 Title to Alterations. Unless Lessor requires their removal, as set forth in Paragraph 10.5.1, all alterations, improvements, additions and Utility Installations (whether or not such Utility Installations constitute trade fixtures of Lessee), which may be made on the Premises, shall become the property of Lessor upon their installation, and remain upon and be surrendered with the Premises at the expiration of the term. Notwithstanding the provisions of this Paragraph 10.5.4, Lessee's machinery and equipment, other than that which is affixed to the Premises so that it cannot be removed without material damage to the Premises, shall remain the property of Lessee and may be removed by Lessee subject to the provisions of Paragraph 10.2. 11: Omitted. grndlse4.wp Amended Ground Lease September 9, 1994 Page 8 rt-3! 12: Real Property Taxes 12: . 1 Definitions 12: .1.1 Real Property Tax As used herein, the term "real property tax" shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Premises by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Lessor in the Premises or in the real property of which the Premises are a part, as against Lessor's right to rent or other income therefrom, and as against Lessor's business of leasing the Premises. The term "real property tax" shall also include any tax, fee, levy, assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy, assessment or charge hereinabove included within the definition of "real property tax," or (ii) the nature of which was hereinbefore included within the definition of "real property tax," or (iii) which is imposed for a service or right not charged prior to June 1, 1978, or, if previously charged, has been increased since June 1, 1978, or (iv) which is imposed as a result of a transfer, either partial or total, of Lessor's interest in the Premises or which is added to a tax or charge hereinbefore included within the definition of real property tax by reason of such transfer, or (v) which is imposed by reason of this transaction, any modifications or changes hereto, or any transfers hereof. 12: .1.2 Possessory Interest Tax. The provisions of this agreement may give rise to the creation of a possessory interest in City-owned tax exempt land or improvements. If such a possessory interest is created by this agreement, it may be subject to property taxation pursuant to California Revenue and Taxation Code sections 107, et seq., and the Lessee may be subject to the payment of property taxes levied on such interest. In such event, Participant agrees to pay, or cause to be paid, when due any such possessory interest tax. This notice is given pursuant to Revenue and Taxation Code section 107.6. 12: .2 Payment of Taxes. grndlse4.wp Amended Ground Lease September 9, 1994 Page 9 &-31 -,.., -- Lessee shall pay the real property tax, as defined herein, applicable to the Premises during the term of this Lease. All such payments shall be made at least ten (10) days prior to the delinquency date of such payment. Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes have been paid. If any such taxes paid by Lessee shall cover any period of time prior to or after the expiration of the term hereof, Lessee's share of such taxes shall be equitably prorated to cover only the period of time within the tax fiscal year during which this Lease shall be in effect, and Lessor shall reimburse Lessee to the extent required. If Lessee shall fail to pay any such taxes, Lessor shall have the right ate pay the same, in which case Lessee shall repay such amount to Lessor with Lessee's next rent installment together with interest at the maximum rate then allowable by law. 12: .3 Joint Assessment. If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the real property taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available. Lessor's reasonable determination thereof, in good faith, shall be conclusive. 12: .4 Personal Property Taxes. 12:.4.1 Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Lessee contained in the Premises or elsewhere. When possible, Lessee shall cause said trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. 12: .4.2 If any of Lessee's said personal property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property. 13: Utilities Lessee shall pay for all water, gas, heat, light, power, telephone and other utilities and services supplied to the Premises, together with any taxes thereon. If any grndlse4.wp Amended Ground Lease September 9, 1994 Page 10 t~io such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion to be determined by Lessor of all charges jointly metered with other premises. 14: Assignment and Subletting. 14: .1 Lessor's Consent Required. Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee's interest in this Lease or in the Premises, without Lessor's prior written consent, which Lessor shall not unreasonably withhold provided there is a commensurate increase in the rental to account for the greater productivity or value of the Premises. Lessor shall respond to Lessee's request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void, and shall constitute a breach of this Lease. 14: .2 No Release of Lessee. Regardless of Lessor's consent, no subletting or assignment shall release Lessee of Lessee's obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations to be performed by Lessee hereunder. The acceptance of rent by Lessor from any other person shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by any assignee of Lessee or any successor of Lessee, in the performance of any of the terms hereof, Lessor may proceed directly against Lessee without the necessity of exhausting remedies against said assignee. 14: .3 Attorney's Fees. In the event Lessee shall assign or sublet the Premises or request the consent of Lessor to any assignment or subletting or if Lessee shall request the consent of Lessor for any act Lessee proposes to do then Lessee shall pay Lessor's reasonable attorney's fees incurred in connection therewith, such attorney's fee not to exceed $1,000 for each such request. 15: Defaults; Remedies. grndlse4.wp Amended Ground Lease September 9, 1994 Page 11 ~-Lf( 15:.1 Defaults. The occurrence of anyone or more of the following events shall constitute a material default and breach of this Lease by Lessee: 15: .1.1 Abandonment. The vacating or abandonment of the Premises by Lessee. 15: .1.2 Failure to Pay Rent. The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of three days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit shall also constitute the notice required by this subparagraph. 15: .1.3 Failure to Perform other Obligations. The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, other than described in paragraph 15.1. 2 above, where such failure shall continue for a period of 30 days after written notice hereof from Lessor to Lessee; provided, however, that if the nature of Lessee's default is such that more than 30 days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said 30-day period and thereafter diligently prosecutes such cure to completion. 15: .1.4 Insolvency. 15:.1.4.1 The making by Lessee of any general arrangement or assignment for the benefit of creditors; 15:.1.4.2: Lessee becomes a "debtor" as defined in 11 U.S.C. Sec. 101 or any successor statute thereto (unless, in the case of petition filed against Lessee, the same is dismissed within 60 days); 15:.1.4.3: the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within 30 days; or grndlse4.wp Amended Ground Lease September 9, 1994 Page 12 ~-L(2- 15:.1.4.4:: the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within 30 days. Provided, however, in the event that any provision of this paragraph 15.1.4 is contrary to any applicable law, such provision shall be of no force or effect. 15:.1.5 The discovery by Lessor that any financial statement given to Lessor by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor in interest of Lessee or any guarantor of Lessee's obligation hereunder, and any of them, was materially false. 15: .2 Remedies- In the event of any such material default or breach by Lessee, Lessor may at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or breach: 15: - 2.1 Terminate Lease. Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises to Lessor. In such event Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee's default including, but not limited to, the cost of recovering possession of the Premises; expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorney's fees, and any real estate commission actually paid; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided; that portion of the leasing commission paid by the Lessor pursuant to the Paragraph of this Lease entitled: "Broker's Fee" applicable to the unexpired term of this Lease. 15: .2.2 Keep Lease in Effect. Maintain Lessee's right to possession in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event Lessor shall be entitled to enforce all of Lessor's rights and remedies under this Lease, grndlse4.wp Amended Ground Lease September 9, 1994 Page 13 6 ~ Lf3 including the right to recover the rent as it becomes due hereunder. 15: .2.3 Other Remedies. Pursue any other remedy now or hereafter available to Lessor under the laws or judicial decisions of the state wherein the Premises are located. Unpaid installments of rent and other unpaid monetary obligations of Lessee under the terms of this Lease shall bear interest from the date due at the maximum rate then allowable by law. 15: .3 Default by Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Lessee in writing, specifying wherein Lessor has failed to perform such obligation i provided, however, that if the nature of Lessor's obligation is such that more than thirty (30) days are required for performance then Lessor shall not be in default if Lessor commences performance within such 30-day period and thereafter diligently prosecutes the same to completion. 15: .4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or any other sum due from Lessee shall not be received by Lessor or Lessor's designee within ten (10) days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal to 6% of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a wavier of Lessee's default with respect to such overdue amount, not prevent Lessor from exercising any of the other rights and remedies granted hereunder. 16: Condemnation. grndlse4.wp Amended Ground Lease september 9, 1994 Page 14 (ç-t.f1- If the Premises or any portion thereof are taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called "condemnation"), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs. 17: Broker's Fee. 17:.1 Each party represents and warrants to the other parties that no brokers, finders, or other agents have been engaged or retained by them in connection with this transaction, and that no brokerage fee, finder's fee, or other commission is or may be due as a result of the parties entering into this lease agreement. 18: Estoppel certificate. 18:.1 Lessee shall at any time upon not less than ten (10) days prior written notice from Lessor execute, acknowledge and deliver to Lessor a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to Lessee's knowledge, any uncured defaults on the part of Lessor hereunder, or specifying such defaults if any are claimed. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Premises. 19: Severability. The invalidity of any provisions of this Lease as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof. 20: Interest on Past-due Obligations. Except as expressly herein provided, any amount due to Lessor not paid when due shall bear interest at the maximum rate then allowable by law from the date due. Payment of such interest shall not excuse or cure any default by Lessee under this Lease, provided, however, that interest shall not be payable on late charges incurred by Lessee nor on any amounts upon which late charges are paid by Lessee. 21: Time of Essence. grndlse4.wp Amended Ground Lease September 9, 1994 Page 15 ~-~~ Time is of the essence. 22: Additional Rent. Any obligations to pay money of Lessee to Lessor under the terms of this Lease shall be deemed to be rent. 23: Incorporation of Prior Agreements; Amendments. This Lease contains all agreements of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges that neither the Lessor nor any employees or agents of any of said persons has made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of said Premises and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the legal use and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term of this Lease except as otherwise specifically stated in this Lease. 24: Notices. Any notice required or permitted to be given hereunder shall be in writing and may be given by personal delivery or by certified mail, and if given personally or by mail, shall be deemed sufficiently given if addressed to Lessee or to Lessor at the address noted below the signature of the respective parties, as the case may be. Either party may by notice to the other specify a different address for notice purposes. A copy of all notices required or permitted to be given to Lessor hereunder shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate by notice to Lessee. 25: Waivers. No waiver by Lessor or any provision hereof shall be deemed a waiver of any other provision hereof or of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to or approval of any subsequent act by Lessee. The acceptance of rent hereunder by Lessor shall not be a waiver of any preceding grndlse4.wp Amended Ground Lease September 9, 1994 Page 16 ¿-1~ breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor's knowledge of such preceding breach at the time of acceptance of such rent. 26: Recording. Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a "short form" memorandum of this Lease for recording purposes. 27: Holding Over. If Lessee, with Lessor's consent, remains in possession of the Premises or any part thereof after the expiration of the term hereof, such occupancy shall be a tenancy from month to month upon all the provisions of this Lease pertaining to the obligations of Lessee, but all options, rights of first refusal, and any obligation of Lessor to transfer title to Lessee, if any, granted under the terms of this Lease shall be deemed terminated and be of no further effect during said month to month tenancy. 28: Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 29: Covenants and Conditions. Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition, unless the context otherwise specifically provides. 30: Binding Effect; Choice of Law. Subject to any provisions hereof restricting assignment or subletting by Lessee, this Lease shall bind the parties, their personal representatives, successors and assigns. This Lease shall be governed by the laws of the state of California. 31: Subordination. 31: .1 This Lease, at Lessor's option, shall be subordinate to any lease, mortgage, deed of trust, or any other hypothecation or security as of this date existing upon the real property of which the Premises are a part and grndlse4.wp Amended Ground Lease September 9, 1994 Page 17 ~-Lf7 -- to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. 31: .2 Lessee agrees to execute any documents required to effectuate an attornment, a subordination or to make this Lease prior to the lien of any mortgage, deed of trust or lease, as the case may be. Lessee's failure to execute such documents within 10 days after written demand shall constitute a material default by Lessee hereunder, or, at Lessor's option, Lessor shall execute such documents on behalf of Lessee as Lessee's attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact and in Lessee's name, place and stead, to execute such documents in accordance with this subparagraph. 32: Attorney's Fees. If either party or the broker named herein brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action, on trial or appeal, shall be entitled to his reasonable attorney's fees to be paid by the losing party as fixed by the court. The provisions of this paragraph shall inure to the benefit of the broker named herein who seeks to enforce a right hereunder. 33: Lessor's Access. Lessor and Lessor's agents shall have the right to enter the Premises at reasonable times for the purpose of inspecting the same, showing the same to prospective purchasers, Lenders, or Lessee, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable. Lessor may place on or about the Premises any ordinary "For Sale" signs of "For Lease" signs at any time during the last 120 days of the term hereof, all without rebate of rent or liability to Lessee. 34: Signs. Lessee shall not place any sign upon the Premises without Lessor's prior written consent except that Lessee shall have the right, without the prior permission of Lessor to place ordinary and usual for rent or sublet signs thereon. grndlse4.wp Amended Ground Lease September 9, 1994 Page 18 t- tjff 35: Merger. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall not work a merger, and shall, at the opinion of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies. 36: Security Measures. Lessee hereby acknowledges that the rental payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of Lessee, its agents and invitees from acts of third parties. 37: Easements. Lessor reserves to itself the right, from time to time, to grant such easements, rights and dedications that Lessor deems necessary or desirable, and to cause the recordation of Parcel Maps and restrictions, so long as such easements, rights, dedications, Maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee shall sign any of the aforementioned documents upon request of Lessor and failure to do so shall constitute a material breach of this Lease. 38: Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of said party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease. 39: Authority. If Lessee is a corporation, trust, or general or limited partnership, each individual executing this Lease on behalf of such entity represents and warrants that he or she grndlse4.wp Amended Ground Lease September 9, 1994 Page 19 G~'f/ is duly authorized to execute and deliver this Lease on behalf of said entity. If Lessee is a corporation, trust or partnership, Lessee shall, within thirty (30) days after execution of this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor. 40: Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 41: Addendum. Attached hereto is an addendum or addenda described as Exhibit A, which constitutes a part of this Lease. 42: Rule Against Perpetuities. In the event the original term of the lease shall not have commenced within five (5) years of the date of the last signing of this Lease, unless previously terminated, this Lease shall be null and void. (End of Page. Next Page is Signature Page) grndlse4.wp Amended Ground Lease September 9, 1994 Page 20 ~ ~5ðJ Signature Page to Lessor and Lessee have carefully read and reviewed this lease and each of term and provision contained herein and, by execution of this lease, show their informed and voluntary consent thereto. The parties hereby agree that, at the time this lease is executed, the terms of this lease are commercially reasonable and effectuate the intent and purpose of Lessor and Lessee with respect to the Premises. DATED: PARK VILLAGE APARTMENTS, LIMITED PARTNERSHIP, a California limited partnership By: PARK VILLAGE PARTNERS, a California general partner- ship, its General Partner By: CIVIC CENTER BARRIO HOUSING CORPORATION, a California nonprofit public benefit corpora- tion, Managing General Partner of the Park Village Partners By: Helen R. Brown, President Notice to: 431 South Bristol st. suite 6 Santa Ana, Ca. 92703 Attn: Helen R. Brown DATED: CITY OF CHULA VISTA, CALIFORNIA, A CHARTERED MUNICIPAL CORPORATION By: Tim Nader, Mayor grndlse4.wp Amended Ground Lease September 9, 1994 Page 21 ¿-51 Attest: Beverly Authelet, City Clerk Approved as to form: Bruce M. Boogaard, city Attorney Notice to: 276 Fourth Avenue Chula Vista, Ca. 91910 Attn: Community Development Director grndlse4.wp Amended Ground Lease September 9, 1994 Page 22 {; -SÞ- Exhibit A Diagram of Subject Property ¿~§3 Exhibit B Legal Description of Subject Property "Subject Property" herein refers to that real property situated in the City of Chula Vista, County of San Diego, State of California, more particularly described as follows: The Northerly 70.00 feet of the Southerly 170.00 feet of the Easterly 20.00 feet of the Westerly 290.00 feet of Lot 7 of Quarter section 142 of RANCHO DE LA NACION, in the County of San Diego, State of California, according to map thereof No. 505, filed in the Office of the County Recorder of said County. ~-SC¡ Recording Requested by and When recorded mail to: DRAFf THREE (8/25/94) MARKED TO SHOW CHANGES Department of Housing & Community Development Attn: FHDP Program P.O. Box 952054 Sacramento, CA 94252-2054 Attn: Program Manager LEASE RIDER AND ESTOPPEL AGREEMENT This Lease Rider and Estoppel Agreement is made and entered into as of by and among the City of Chula Vista, a municipal corporation ("Landlord"), Park Village Apartments, a California Limited Partnership ("Lessee") and the Department of Housing and Community Development, a public agency of the State of California ("Department"), in consideration of the following: A. Landlord is the fee owner of that certain real property described in Exhibit A (the "Property"); and B. Landlord and Lessee entered into that certain ImËB!!Ë!lGround Lease Agreement dated as of (the "Lease")[, a Memorandum of which was recorded in the official records of the County of San Diego on in Book page ]("Lease"). A true, complete and correct copy of the Lease is attached hereto as Exhibit B. Pursuant to the Lease, Lessee has agreed to develop, construct, own, operate and manage a children's play area on the Property ("Project") in conjunction with the child care center which is an integral part of a rental housing development operated by Lessee pursuant to the Department's Family Housing Demonstration Program ("FHDP") on property owned by Lessee which is adjacent to the Property; and C. In order to finance the child care center, the family housing project and the Project, Department has conditionally agreed to loan Lessee One Million Four Hundred Three Thousand Five Hundred Sixty-Five Dollars ($1,403,565) (the "Loan") pursuant to the FHDP; and D. The Loan is or will be evidenced by a promissory nole secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing in favor of the Department encumbering Lessee's Leasehold (as defined herein) estate (the "Deed of Trust"); and E. The use of the Property and operation of the Project is or will be governed by a Regulatory Agreement by and among the Landlord, Lessee and the Department, recorded against the Property and the Lessee's Leasehold estate (the "Regulatory Agreement"); and ~ -55 F. Lessee and Landlord have requested that the Department approve the Lease and in order to induce the Department to approve the Lease, Landlord and Lessee have agreed to enter into and record this Agreement for the benefit of the Department, its successors, and assigns; NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants hereinafter contained, Department, Lessee and Landlord hereby agree as follows: 1. Leasehold. As used herein, "Leasehold" means all of Lessee's interest in the Property described in Exhibit A, in the Project, in all improvements now or hereafter located on the Property, all options contained in the Lease or granted in connection with the Lease, and all other rights of Lessee under the Lease. 2. Representations and Warranties of Landlord. Landlord hereby represents and warrants to Department as follows: 2.1 Transfers by Landlord. 2.1.1 Landlord has not assigned, mortgaged, or otherwise hypothecated or transferred, or agreed to assign, mortgage or otherwise hypothecate or transfer, its interest in the Property and the Project in whole or in part, except as shown in the ALTA Lender's policy of title insurance issued to and accepted by Department in connection with the Loan. 2.1.2 m«.j¡~.JPc~¡m~¡~~'Jijãl¡I..t~I¡Landlord will not renew, modify, consolidate, replace or extend any document securing and creating any assignment, mortgage or other transfer described in subparagraph 2.1.1 above without the written approval of the department. 2.2 Status of Lease. 2.2.1 Landlord is the Lessor under the Lease. The Lease is in full force, the Lease is not void, voidable or terminable at the option of any party thereto or of any other person or entity claiming an interest in or to such Lease or the Property, ancJi{¡JJ¡fl¡¡aJ¡:¡¡¡9~~j1i9i~Ë!lgit¡there has been no default thereunder on the part of Lessee, nor has any event occurred which, with the giving of notice or the passage of time, or both, would be an event of default thereunder. Landlord has not been informed of and has not otherwise received notice from Lessee or from any other person or entity concerning any alleged default on the part of Landlord under the Lease. There exist no defenses or offsets to enforcement of the Lease by Lessee. 2.2.2 Any consent or approval of any third party (including any lender) that is required to deliver this Agreement has been obtained. 2.2.3 No alterations, improvements, additions or Utility Installations (as defined in the Lease) now exist on the Property which have not approved by the Landlord. 2.3 Glher Ae:reements. All terms and conditions of the Lessee's tenancy under the Lease are set forth in the Lease and there have been no further or other supplements, amendments, modifications or extensions thereof. The Lease contains no provisions in conflict with or which would ~ -S~ frustrate compliance with the Regulatory Agreement except Ihose which Landlord and Lessee hereby waive in favor of the terms of the Regulatory Agreement. 2.4 Lease Term. The date of the commencement of the Lease term (defined as the "Effective Date" in the Lease) is and the Lease term will end 0 unless otherwise terminated pursuant to e terms of the Lease. All conditions precedent to the effectiveness of the Lease or the exercise of any of Lessee's rights thereunder have been fully satisfied, including delivery of possession of the property by the Landlord to the Lessee, and the approval of the Lauderbach Park Grant Deed by the County of San Diego and the Landlord. Lessee has the following options to extend the lease term: None. 2.5 Project. The Project satisfies all requirements affecting the design, use or characteristics of such Project imposed by Landlord under the Lease. 2.6 Insurance. All notices, certificates, binders, endorsements, copies of policies, and receipts required under the Lease have been delivered and approved by Landlord. 3. Cancellation. Transfer of Interest 3.1 Landlord and Lessee agree thati¡~Ii~~¡.¡ÌlîPJ,i;i~¡I~¡R_.fl!I"!i so laRg as DepartmeRt, its sl:Ieeessar ar assigRs lIalels a deed af trust eRel:lmBeÀRg tile Lease, no ¡¡i: tis~:~ ~: ~ , ~: ~ ~ ~s: :n: f fi ~~ ~ ~ ~ o~ 1 ~~~ ti ~:: ~~lll~~ 0 j'!~!t!!!~!¡~~!e,!f! consent of Department. 3.2 1.I¡i.1!sf,I]§i¡ml¡¡_!~!9Jîj¡'Ii~II'IJf¡:Landlord agrees that it shall not transfer, convey, sell, hypothecate, assign, encumber or permit any liens against its interest, or any portion thereof, in the Property or the Project without the prior written approval of the Department. 4. Consent to AssiE!nment. Payment of Rent. 4.1 Landlord hereby consents to the following as permitted assignments under the Lease: 4.1.1 Lessee's encumbering the Lease, the Leasehold and the Project by the Deed of Trust; possession of the Property and any Project thereon by Department or by a receiver under the Deed of Trust; and sale of the Leasehold and the Project by foreclosure under the Deed of Trust or transfer by deed in lieu of foreclosure; and 4.1.2 assignments to Department of subleases and rents from subleases; and 4.1.3 assignment of all or any part of any interest in the Leasehold to any purchaser at a foreclosure sale under the Deed of Trust or to any transferee of a deed in lieu of foreclosure (such purchaser or transferee collectively a "Transferee"), and to subsequent transfers 3 fo-5'J .., -- without restriction (all such assignments, transfers, and subsequent ,transfers referred to in this Agreement as a "Transfer"); any such Transferee, upon the Transfer of all its interest in the Project and the Leasehold, shall be relieved of all liability under the Lease accruing after date of such Transfer. An interest in a deed of trust on the Leasehold securing any unpaid part of the purchase price in connection with any such Transfer shall not be considered retention of an interest in the Leasehold for purposes of this subsection. 4.2 Nothing in this Agreement, in the Deed of Trust or in the Lease shall impose on Department the obligations of Lessee under the Lease or require Department to assume the Lease unless the Department forecloses on the Leasehold under the Deed of Trust or accepts an assignment of a deed in lieu of foreclose. 5. Notice of Defaults: Termination Notice. 5.1 Notice and Cure. Landlord agrees to give Department immediate notice of all defaults by Lessee under the Lease (whether or not notice thereof is required under the Lease), and to give simultaneously to Department a written copy of all notices and demands which Landlord gives to Lessee, and no notice or demand under the Lease shall be effective unless and until notice is given to Department. Any notice of default under the Lease or this Agreement shall describe the default(s) with detail sufficient to determine the default for purposes of effecting a cure thereof. Department shall have the right, but not the obligation, to cure any breach or default within the time period given in the Lease; provided that no such time period shall be deemed to have commenced until the notice described above has been received by the Department. Landlord and Lessee authorize the Department to enter the Property for the purpose of preventing defaults or exercising its right to cure and other powers given Department under the Deed of Trust, this Agreement or the Lease. 5.2 Termination Notice. After the expiration of the grace period given Lessee under the Lease to cure the default, Landlord shall not terminate the Lease on account of such default but shall give Department a written notice (a "Termination Notice") that Lessee has failed to cure the default within the grace period and that, on account thereof, Landlord intends to terminate the Lease. The Termination Notice shall set a termination date not earlier than sixty (60) days after Department's receipt of the Termination Notice. No Termination Notice shall be effective to terminate the Lease if: 5.2.1 except as provided in Section 5.3, within sixty (60) days after receipt of the Termination Notice, Department cures any default which can be cured by payment or expenditure of money or without possession of the Property; or provides reasonable assurance and undertakings for the cure of such default; or 5.2.2 Department commences and diligently pursues to completion proceedings for foreclosure and sale under the Deed of Trust or assignment or transfer in lieu of foreclosure. 5.3 Defaults Not Susceptible to Department Cure. Department shall not be required to perform any act which is not susceptible to performance by Department, such as to cure a filing or condition of bankruptcy or insolvency or to cure or commence the cure of any default which is Lessee's failure to pay any lien, charge or encumbrance which is junior in priority to the Deed of Trust, or to 4 ~-SY pay any amount owed under an indemnity of Landlord by Lessee based on an event which occurred before Department took possession of the premises. 5.4 Landlord's Payment of Loan Payments. Landlord agrees that if Landlord cures Lessee's failure to make any payment due under the Loan, it shall seek reimbursement of amounts so paid solely from Lessee and Department shall have no obligation to pay such amounts to Landlord if Department exercises its rights hereunder or under the Lease to cure Lessee's default of the Lease. 5.5 Waiver of Breach or Default. On transfer of the Leasehold at any foreclosure sale under the Deed of Trust or by acceptance of a deed in lieu of foreclosure, all violations, defaults and breaches by Lessee under the Lease, including, without limitation, nonpayment of rent or other amounts payable under the Lease, shall be deemed cured and Department or other Transferee shall be entitled to the New Lease as described in section 6 below without incurring or assuming any liability or obligation of, or claim against, Lessee under the Lease. 5.6 Enforcement Not a Breach. No action taken by the Department to enforce its rights under any of the documents governing the Loan against either the Landlord or the Lessee, or both, including, without limitation, any actions taken to collect any amounts due and owing to the Department or any action to appoint a receiver for the Project or to otherwise protect the security of the Loan, shall constitute or result in a breach or violation of the Lease. 6. New Lease. 6.1 Conditions. Section 5 hereof notwithstanding, Landlord agrees to comply with the requirements of Section 6.2, if: 6.1.1 the Lease is terminated for any reason whatsoever or if Department forecloses under the Deed of Trust or accepts a deed in lieu of foreclosure; and 6.1.2 Department or other Transferee, whether or not such party has assumed the Lease, requests Landlord in writing to enter into a new lease of the Property within forty-five (45) days after (a) the Department completes a foreclosure under the Deed of Trust, (b) the Department accepts a deed in lieu of foreclosure, or (c) the end of the cure period provided to the Department in the Termination Notice. 6.2 Obli!!ations. If the conditions specified in Section 6.1 have been satisfied, Landlord shall perform each of the following obligations: 6.2.1 Upon receipt of the request for New Lease described in subsection 6.1.2 above Landlord shall enter into a new lease ("New Lease") of the Property with Department, its nominee, or its successor-in-interest or other Transferee, for the remainder of the term of the Lease, effective as of the date of the conveyance pursuant to a foreclosure sale or of a deed-in-lieu. The New Lease shall be on the terms, and with the provisions, covenants, options and agreements contained in the Lease or granted by the Landlord in connection with the Lease all as modified or supplemented by this Agreement. 5 ~-s9 6.2.2 Landlord shall by grant deed convey to Department, its nominee or its successor-in-interest or other Transferee, all title and interest to _ð.5~ygl!iliîlm~JlttJ~!I~JI the Project, if any, which may become vested in Landlord as a result of any termination of the Lease or foreclosure of the Deed of Trust or conveyance of Lessee's interest by deed in lieu of foreclosure. 6.2.3 Landlord shall assign to Department, its nominee, or its successor-in-interest or other Transferee, all of Landlord's interest, if any, in all existing subleases of all or any part of the Property and all attomments given by the sublessees. 6.3 Priority. The Leasehold estate and the title (if any) in the Project granted to Department, its nominee or its successor-in-interest under this Section 6 shall be prior to any mortgage or other lien, charge or encumbrance on the Property, except as approved in writing by the Department or as shown in the ALTA Lender's policy of title insurance issued to and accepted by the Department. 7. Successors to DeDartment. Subject to Section 6 hereof, if the Leasehold is transferred by a foreclosure sale under the Deed of Trust or by a deed in lieu of foreclosure, Landlord shall recognize the Transferee as the tenant under the Lease. Anything in the Lease notwithstanding, the rights and benefits of Department under this Agreement shall benefit and may be exercised by any Transferee or by the holder of any mortgage or deed of trust which may be given to secure a portion of the purchase price in any sale by Department or its successor(s) after Department acquires the Leasehold or enters into a New Lease under this Agreement. 8. Dili!!:ence of Department. So long as Department is prevented by any process or injunction issued by any court or by any statutory stay, or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Landlord or Lessee, from commencing or prosecuting foreclosure or other appropriate proceedings in the nature thereof, Department shall not be deemed for that reason to have failed to commence such proceedings or to have failed to prosecute diligently such proceedings, provided, however, that Department shall use reasonable efforts to contesl and appeal the issuance of continuance of any such process, stay or injunction. 9. Condemnation and Insurance Proceeds. 9.1 Anything in the Lease notwithstanding, all fire and other hazard or casualty insurance proceeds shall be paid to Department to the extent required by the Regulatory Agreement and subject to the rights of senior mortgage holders. A Standard 438 BFU endorsement naming Department as mortgagee may be attached to the policy insuring the Property and the Project. In addition, in the event of any condemnation or partial condemnation all condemnation award proceeds payable on account of such condemnation or partial condemnation shall be paid to Department to the extent required by the Regulatory Agreement, subject to the rights of holders of senior mortgages, if any. 9.2 During the term of the Loan, Department shall have the right to participate in any settlement of or stipulation of judgment with respect to any condemnation proceeding entered into with the condemnation authority affecting all or any portion of the Property or any agreement to sell all or any portion of the Property in lieu of condemnation, and no such settlement, stipulation or agreement shall be made or entered into without Department's prior written consent. Department shall also have 6 r; -&Z) the right to participate in any settlement, discussion, and/or arbitration proceeding between Landlord and Lessee with respect to the apportionment or application of any condemnation award. 10. Certificate by Landlord. Within fifteen (15) calendar days after written request by Department, Landlord shall execute and deliver to Department or to any proposed purchaser or encumbrancer of Lessee's estate a certificate declaring (i) the existence of the Lease, or New Lease as the case may be, and amendments thereto, if any; (ii) the events of default under the Lease to the best knowledge of Landlord as of the date of the certificate; (iii) any other information relating to the condition of the Lease, the Property or the Project reasonably requested by Department; and (iv) that Landlord understands the recipient will rely on the certificate. 11. Notices. Notices and other communications required by this Agreement shall be delivered by messenger to the addresses provided below or sent by D.S Postal Service certified mail, return receipt requested, postage prepaid, addressed as follows: To Department: Department of Housing and Community Development Rental Housing Construction Program P.O. Box 952054 Sacramento, CA 94252-2054 Attn. FHDP Program Manager or: 1800 Third Street, Suite 390 Sacramento, CA 95814 Attn: FHDP Program Manager To Landlord: City of Chula Vista To Lessee: Park Village Apartments, a California Limited Partnership c/o Civic Center Barrio Housing Corporation 431 So. Bristol St., Suite 6 Santa Ana, CA 92703 These addresses may be changed by a notice given in the same manner. Notices shall be effective on receipt. 12. Deoartment's Ri!!hts A!!ainst Lessee. Nothing in this Agreement shall limit or restrict Department's rights and remedies under the Deed of Trust, the Regulatory Agreement, or other agreement between Department and Lessee. 13. Heirs Successors and Assi!!ns. This Agreement shall inure to the benefit of and bind the heirs, successors and assigns of Department, Landlord and Lessee. 7 ~ - ~ I 14. Uninsured Hazard. Landlord agrees that neither Department nor any person acquiring the Property or a portion of the Leasehold pursuant to a foreclosure under the Deed of Trust, or deed in lieu of foreclosure, nor the lessee under a new lease pursuant to Section 6 hereof, nor any successive owner of a portion of the Leasehold after such foreclosure or new lease shall have any obligation hereunder or under the Lease or new lease to repair or reconstruct any damage or loss to the Project which is due to a hazard not required to be covered by insurance under the Lease. 15. Duty to Repair. Landlord agrees that if Department, its nominee, or its successor-in-interest succeeds to Lessee's leasehold interest in the Property and if the Project on the Property shall have been or become materially damaged before or after the date of such acquisition, Department's, its nominee's, or its successor-in-interest's obligation, if any, to repair, replace or reconstruct the Project shall in any such event be limited to the greater of: i) the amount of the net insurance proceeds received by Department by reason of that damage or, ii) the amount the Department would be entitled to if in compliance with the minimum insurance requirements of Lessee under the Lease. 16. ~. Landlord and Lessee agree that Department may exercise any option to extend the term of the Lease or to purchase any interest in the Property which is granted to Lessee under or in connection with the Lease. 17. Limitation on Liability. If Department agrees to be bound by the terms of the Lease, or in the event of any transfer to a Transferee, neither Department nor Transferee shall have any obligation under the Lease with respect to any liabilities, obligations, losses, damages, fines, penalties, claims, demands, suits, actions, causes of actions, charges, judgements, costs, and expenses (including architects' and attorneys' fees and court costs) arising out of or resulting from acts, omissions, circumstances or events occurring before or existing at the time of such transfer or Department's agreement to be bound by the Lease. 18. Conflict With Lease. The provisions herein are intended to be supplementary to, and not in derogation of, the parties' rights and obligations contained in the Lease (including all of Department's rights under the Lease as a leasehold mortgagee), but in the event of any conflict or inconsistency between the terms of the Lease and the terms of this Agreement, the terms of this Agreement shall govern and control, and the Lease shall be deemed to be modified hereby. 8 ~-¿~ 19. Reliance. Landlord and Lessee acknowledge that Department is relying on the above representations, warranties, covenants and agreements of the undersigned in making the Loan to Lessee, and warrants and affirms to and for the benefit of Department that each of those representations is true, correct and complete as of this date. Date: Department: Department of Housing and Community Development þy: Landlord: City of Chula Vista, a municipal corporation þy: 9 ~-~3 Lessee: Park Village Apartments, A California Limited Partnership ~y: rev. 8/2/94 10 fo-~c¡ IBJll'i¡; _J~~ø,Rijm;g~¡~!!~I¥ 11 ~ - ~S , . This page intentionally left blank. &-?6 RESOLUTION /J-f:2--?-- RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROVING MODIFICATION OF LOAN BY AGENCY TO PARK VILLAGE APARTMENTS LIMITED PARTNERSHIP IN CONNECTION WITH 28-UNIT AFFORDABLE HOUSING PROJECT LOCATED AT 1246-1256 THIRD AVENUE AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE LOAN MODIFICATION AGREEMENTS. SUBORDINATION AGREEMENT. AND ASSOCIATED DOCUMENTS WHEREAS, Civic Center Barrio Housing Corporation ("CCBHC"), a non-profit community-based organization with a successful track record in building and rehabilitating and operating housing for low-income families and developing tenant management associations; and WHEREAS, on or about June 1, 1991, the Agency approved a $350,000 loan (" Agency Loan") to CCBHC to purchase property at 1250 3rd Avenue, on which CCBHC was to develop a 28 unit apartment complex for low-income families (the "Project"); and WHEREAS, on or about March 30,1992 Park Vaillage Limited Partnership ("Park Village"), an affiliate of CCBHC, assumed all CCBHC's obligations under the Agency Loan; and WHEREAS, on or about February 4, 1993 Park Village completed the affordable housing element of the Project; and on or about Apri[ 12. 1994 Park Village completed the child care facility element of the Project; and WHEREAS, commitments for the permanent financing of the Project have been obtained from California Community Reinvestment Corporation ("CCRC") and from the State of California (the "State"); and WHEREAS, a modification of the Agency Loan and subordination of the Agency affordability covenants with respect to the Project are needed to facilitate the permanent financing and permit the continued successful operation of the Project; and WHEREAS, Agency staff has negotiated a Loan Modification Agreement, Subordination Agreements with the State and CCRC, respectively, and associated documents in connection with the proposed permanent financing; and WHEREAS, (1) in accordance with California Health and Safety Code Section 33334.14(a)(1), the Agency has agreed to subordinate its afford ability covenants to the State Loan and the State afford ability covenants; and (2) in accordance with California Health and Safety Code Section 33334.14(a)(4), the Agency has agreed to subordinate its affordability covenants to the CCRC Loan based upon Agency's finding and determination that no economically feasible alternative method of financing, refinancing or assisting the Project is reasonably available, and Section the Agency's subordination includes written commitments protecting the Agency's right to cure a default under the CCRC loan consistent with the written commitments set forth in such Section. NOW THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA does hereby find, order, determine and resolve that: ¿-Þ7 1. The recitals and findings set forth above are true and correct and incorporated herein by this reference. 2. The Loan Modification Agreement, with Park Village, the subordination agreements with the State and CCRC, respectively, and all related documents in the form approved by the Agency and on file in the Office of the Secretary to the Redevelopment Agency and known as Document Nos. , and are hereby approved. BE IT FURTHER RESOLVED, that the Executive Director is hereby authorized to execute the above-referenced Loan Modification Agreement, Subordination Agreements, and associated documents in final forms approved by Agency General Counsel, and to take all additional steps necessary to close the proposed permanent financing of the Project. PRESENTED BY: APPROVED AS TO FORM BY: ~~ ~ ~&~~ Chris Salomone Community Development Director A eral IAG\C:\WPS.l\JUAN\RSO\CIVIC.RSOJ ¿-bY RESOLUTION 17&&5 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AMENDED AND RESTATED GROUND LEASE AND LEASE RIDER AND ESTOPPEL AGREEMENT IN CONNECTION WITH AGENCY LOAN MODIFICATION WITH PARK VILLAGE APARTMENTS AND AUTHORIZING CITY MANAGER TO EXECUTE SAME WHEREAS, Civic Center Barrio Housing Corporation ("CCBHC"), a non-profit community-based organization with a successful track record in building and rehabilitating and operating housing for low-income families and developing tenant management associations; and WHEREAS, on or about June 1, 1991, the Agency approved a $350,000 loan ("Agency Loan") to CCBHC to purchase property at 1250 3rd Avenue, on which CCBHC was to develop a 28 unit apartment complex for low-income families (the "Project"); and WHEREAS, on or about March 30, 1992 Park Vaillage Limited Partnership ("Park Village"). an affiliate of CCBHC, assumed all CCBHC's obligations under the Agency Loan; and WHEREAS, on or about February 4, 1993 Park Village completed the affordable housing element of the Project; and on or about April 12, 1994 Park Village completed the child care facility element of the Project; and WHEREAS, commitments for the permanent financing of the Project have been obtained from California Community Reinvestment Corporation ("CCRC") and from the State of California (the "State"); and WHEREAS, a modification of the Agency Loan and subordination of the Agency affordability covenants with respect to the project are needed to facilitate the permanent financing and permit the continued successful operation of the Project; and WHEREAS, Agency staff has negotiated a Loan Modification Agreement, Subordination Agreement with the State and CCRC, respectively, and associated documents in connection with the proposed permanent financing; and WHEREAS, in connection with the permanent financing, the State and CCRC are requiring certain amendments to the existing ground lease between the City and Park Village with respect to 600 sq. ft. of property adjacent to Lauderbach Park used as the Project childcare facility playground. WHEREAS, the required lease amendments are designed to (1) clarify the legal description of the leased property, (2) extend the term of the lease from 30 to 55 years to accommodate the State's regulatory agreement and (3) protect the State's and CCRC's rights to take over the lease from Park Village in the event that Park Village defaults under its loans. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA does hereby find, order, determine and resolve that: 1. The recitals and findings set forth above are true and correct and incorporated herein by this reference. ~ -be¡ 2. The amended ground lease and Lease Rider and Estoppel Agreement in the form approved by the City Council and on file with the City Clerk as Document numbers - and - are hereby approved. BE IT FURTHER RESOLVED, that the City Manager is hereby authorized to execute the above-referenced documents in final forms approved by the City Attorney. PRESENTED BY: APPROVED AS TO FORM BY: ~~ ~ ~;~ ~~ "'J Chris Salomone Community Development Director IAGIC:IWP5.1 IJUANIRSOICIVIC.RSOI 10--)0 REDEVELOPMENT AGENCY AGENDA STATEMENT Item 2- Meeting Date 09/20/94 ITEM TITLE: RESOLUTION /1:2.3 ADOPTING NEGATIVE DECLARATION IS-93-07 FOR PURCHASE OF REAL PROPERTY LOCATED AT 746 AND 750 ADA STREET FOR DEVELOPMENT OF AFFORDABLE HOUS[NG AND DAY CARE FACILITY, APPROPR[ATING $643,000.00 FROM THE LOW AND MODERATE INCOME HOUSING FUND TO COMPLETE SUCH PURCHASE, AND AUTHORIZING EXECUTIVE DIRECTOR TO EXECUTE ALL DOCUMENTS AND TAKE ALL NECESSARY STEPS, AS MAY BE APPROVED BY THE CITY ATTORNEY, IN ORDER TO CLOSE ESCROW FOR THE PURCHASE OF THE PROPERTY ~ SUBMITTED BY: Community Development Director REVIEWED BY: Executive Director (tit-1~ J-r (4/5ths Vote: Yes L No_J Council Referral Number: - BACKGROUND: At the City Council meeting of July 19, 1994 Council approved the opening of escrow for the purchase of two parcels at the northwest corner of Industrial Boulevard and Ada Street for the purpose of developing the Child Care facility associated with the development of the Palomar Trolley Center Shopping Center, as well as an affordable for sale housing development. Council appropriated HOME Program Funds in the amount of $635,000 for the acquisition of the property plus a maximum allowance of $8,000.00 for site clearance and relocation. Due to new interpretation of the HOME program regulations, these funds cannot be used until the project is in a more advanced development stage. Therefore, Low and Moderate Income Housing Funds are temporarily needed in order to close escrow in a timely manner. A Negative Declaration has been prepared and filed for the project in compliance with the California Environmental Quality Act. RECOMMENDATION: That the Agency adopt the resolution which adopts the Negative Declaration, approves the appropriation of $643,000 in Low and Moderate Income Housing Funds to acquire the property and authorizes Executive Director to take necessary actions to complete the acquisition. BOARDSICOMMISSIONS RECOMMENDATION: The Housing Advisory Committee has discussed the proposed project and has expressed its support. DISCUSSION: The appropriation of HOME Program Funds for this project was originally considered based on their availability and the proposed project eligibility for the use of these funds. Also, it was determined that by committing these funds immediately, the City would then be in a very good position to receive additional HOME Funds in the future from de- obligated funds from other cities that had not been able to utilize these funds as successfully as Chula Vista. Capturing additional HOME Funds is still possible provided that the recommendation is approved. Since the HOME program is still relatively new, there have been numerous interpretations of program regulations. When the Agency, approved the use of HOME Funds for the project, it was staff's interpretation that these funds could be used for the acquisition of property without having a negotiated development agreement to implement the Housing/Child Care 7-/ Page 2, Item ~ Meeting Date 09/20/94 project (Land Banking). Based on recent discussion with HUD and HOME program consultants, it appears that HOME Funds cannot be obligated to buy property until a Development Agreement is in place, all land use entitlements are secured, and project financing is committed. Since this project is not yet at this stage, it is therefore necessary to use Lowl Moderate Income Housing Funds as an alternate source of funds in order to close escrow. Escrow was scheduled to close September 19, but it has been extended for several days in order to obtain Agency approval to use the Low and Moderate Income Housing Funds. With the recommended action, the Executive Director will take action to close escrow. If the Council and Agency concur, it will be staff's intention to continue to pursue the HOME Funds for this project. When the Development Agreement and other components are approved by the AgencylCouncil, staff will recommend that the HOME Funds be requested from HUD. The federal environmental review process (NEPA) was initiated by the City when the HOME funds were being targeted to be used in order to complete the escrow. [t will be necessary to complete the NEPA process before the HOME funds can be drawn down from HUD and used to replace the Low and Moderate Income Housing Funds. The HOME Funds can reimburse the Low and Moderate Income Housing Funds, which have greater flexibility for other uses. At that point, we should also become eligible for other "de-obligated" HOME Funds. FISCAL IMPACT: The maximum acquisition cost would be $643,000 if the entire allowance for the site clearance and relocation were used. Therefore, an appropriation of $643,000 is required from the Agency Low and Moderate Income Housing Fund. As of August 31, 1994 there was an estimated Fund balance available of $985,292 in the Low and Moderate Income Housing Fund. The expenditure of Low and Moderate Income Housing Funds will leave an available balance of approximately $342,292. The reimbursement of Low and Moderate Income Housing Funds by HOME Funds is expected in approximately six months when the HOME Program Funds will be eligible for use on this project. Because the Low and Moderate Income Housing Funds and the HOME Program Funds are specifically for use for affordable housing programs, it would be necessary to reimburse the Low and Moderate Income Housing Funds for the portion of the property used for the day care facility at the point at which the day care facility was developed. That value is estimated at $212,000.00. The most likely source of reimbursement funds is future Community Development Block Funds (CDBG). The City has already committed a substantial amount of future CDBG funds (Capital Improvement category) to such projects as the Otay Neighborhood Gym and the YMCA Pool project, so it is recognized that CDBG funds available for capital projects will be somewhat constrained for Fiscal Years 1995 and 1996. However, it is expected that future CDBG Program Income funds (roughly estimated at $70,000.00 for Fiscal Year 1994) will be available to cover some of the cost of the day care facility, in possible combination with some surpluses in the 1995 and 1996 program years. [n the meantime, the properties represent a legitimate site to land bank with Low and Moderate Income Housing Funds for an affordable housing project. [AGlC,IWP51 IJUANlRA41DA YCARE,RA4[ Î-'J- negative declaration PROJECT NAME: Trolley Terrace PROJECT LOCATION: 746 - 750 Ada Street ASSESSOR'S PARCEL NO.: 622-020-20 & 30 PROJECT APPLICANT: Habitat for Humanity/South Bay Community Services CASE NO: IS-93-07 DATE: August 16, 1994 A. Proiect Settin2 The approximately 2 acre project site is located on the northwest comer of Industrial Boulevard and Ada Street. The site consists of two separate legal parcels with one single family residence on each parcel. Vegetation on the site consists of ornamental landscape plant species, grasses and ruderals. The site is generally level and is at street grade along Ada Street and transitions to approximately six feet above street grade on Industrial Boulevard. Power lines run along the eastern edge of the property parallel to Industrial Avenue. Surrounding land uses consist of single family residential to the north, south and west. The San Diego Trolley line runs east of the project and adjacent to east side of Industrial Boulevard. The Palomar Trolley Station is located immediately east of the project. Further east is a retail shopping center currently under construction. Primarily commercial uses are located along Palomar Street and Broadway (further east). Industrial uses are located west of 1-5 and south of Anita Street. B. Proiect Descriotion The project consist of twelve attached residential units of approximately 1,200 square feet each. The units would each have three bedrooms and two-car garages and are proposed for low and/or very low income buyers. The residential uses are proposed for the western portion of the site. A daycare center is proposed for the eastern portion of the site and will consist of approximately 6,500 square feet of floor area and will serve approximately 100 children. The center is proposed to operate from approximately 6:30 am to 6:00 pm Monday through Friday. A total of 11 permanent parking spaces will be provided onsite and MTDB has agreed in concept to provide an additional 14 spaces at the Palomar Trolley Station across the street from the project. These offsite spaces would be used by daycare center staff, while the 11 onsite spaces (including handicapped) would be used by parents for drop-off and by volunteers. 7-3 ~M ft.. F:IIIOMElPJMlll'lINGISTOREDIIO2O.9!(W. 1021.93.1022.93) W-. -:: city of chula vllta planning department ~~~~ O1YOF environmental review Hctlon, OiUlA VISTA C. Compatibility with Zonim! and Plans The site is currently zoned for one and two-family residences (R-2), and designated in the General Plan as Low-Medium Residential (3-6 du/ac). The project will require a rezone from R-2 to R-35P (multifamily residential) only for the area proposed for the daycare center. The daycare center will also require a Conditional Use Permit. D. Identification of Environmental Effects An initial study conducted by the City of Chula Vista (including the attached Environmental Checldist Form) determined that the proposed project will not have a significant environmental effect, and the preparation of an Environmental Impact Report will not be required. This Negative Declaration has been prepared in accordance with Section 15070 of the State CEQA Guidelines. The following impacts have been determined to be less than significant. A discussion of each of these less than significant impacts from the proposed project follows; Land Use/Zoning, Geophysical, Drainage, Air Quality, Transportation/Circulation, Noise, Public Services and Recreation. E. MitÍ!!ation necessary to avoid sil!nificant effects The proposed project will not result any significant or potentially significant environmental impacts, therefore, no project specific mitigation is be required. F. Consultation 1. Individuals and Orl!anizations City of Chula Vista: loe Monaco, Community Development Roger Daoust, Engineering Cliff Swanson, Engineering Hal Rosenberg, Engineering Bob Sennett, Planning Ken Larsen, Director of Building & Housing Carol Gave, Fire Marshal Crime Prevention, Marylane Diosdada Marty Schmidt, Parks & Recreation Dept. Chula Vista City School District: Kate Shurson Sweetwater Union High School District: Tom Silva Applicant's Agent: City of Chula Vista P,IHOMB\PIWRNINGISTORED\lO2O.93(Rof. 1021.93.1022.93) 7-i Page 2 -..- -, 2. Documents Chula Vista General Plan (1989) and EIR (1989) Title 19, Chula Vista Municipal Code 3. Initial Study This environmental determination is based on the attached Initial Study, any comments received on the Initial Study and any comments received during the public review period for this Negative Declaration. The report reflects the independent judgement of the City of Chula Vista. Further information regarding the environmental review of this project is available from the Chula Vista Planning Department, 276 Fourth Avenue, Chula Vista, CA 91910. ~~ - E ONMENTAL REVIEW COORDINATOR EN 6 (Rev. 5/93) 7-5 Page 3 P,IHOMElPimmiNGISTOREDIlO2O.93(Rd. 1021.93.1022.93) Case No. IS-93-07 ENVIRONMENTAL CHECKLIST FORM 1. Name of Proponent: South Bay Community ServiceslHabitat for Humanity 2. Lead Agency Name and Address: City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 3. Address and Phone Number of Proponent: 315 Fourth Avenue, Suite H Chula Vista, CA 91910 (619) 420-3620 4. Name of Proposal: Trolley Terrace 5. Date of Checklist: August 15, 1994 7~~ WPC P,IHOMEIPLANNtNGlSTOREDI1718." Page 1 -,- -- Ptrt"';.I~ Ptrtm';.1ty S"""œtrt Lout"', S"""œ.t U.I~ SIg.mœ" N. 1m..... M""'01 tm..... 1m..... I. LAND USE AND PLANNING. Would the proposal: a) Conflict with general plan designation or 0 0 181 0 zoning? b) Conflict with applicable environmental plans or 0 0 0 181 policies adopted by agencies with jurisdiction over the project? c) Affect agricultural resources or operations (e.g., 0 0 0 181 impacts to soils or fannlands, or impacts from incompatible land uses)? d) Disrupt or divide the physical arrangement of an 0 0 0 181 established community (including a low-income or minority community)? Comments: The daycare portion of the project is inconsistent with the existing R-2 zoning for the site and requires a zone change to R-35P (multi-family residential) and will additionally require a Conditional Use Pennit. Approval of these discretionary actions, which are required as a part of the project, will eliminate zoning inconsistency. II. POPULATION AND HOUSING. Would the proposal: a) Cwnulatively exceed official regional or local 0 0 0 181 population projections? b) Induce substantial growth in an area either 0 0 0 181 directly or indirectly (e.g., through projects in an undeveloped area or extension of major infrastructure)? c) Displace existing housing, especially affordable 0 0 0 181 housing? Comments: The project would create affordable housing for low- and/or very low-income households. III. GEOPHYSICAL. Would the proposal result in or expose people to potential impacts involving: a) Unstable earth conditions or changes in geologic 0 0 0 181 substructures? b) Disruptions, displacements, compaction or 0 0 0 181 overcovering of the soil? c) Change in topography or ground surface relief 0 0 181 0 features? d) The destruction, covering or modification of any 0 0 0 181 unique geologic or physical features? e) Any increase in wind or water erosion of soils, 0 0 181 0 either on or off the site? WPC P,\HOME\PLANNINGISTORED\1718.94 7-7 Page 2 P"""'t~ P.......t~ Stg.illa...' Lou 'bo. S,..."""" U"'- stg.inœ.' N. 1m.." M.""tod 1m.." 1m.." f) Changes in deposition or erosion of beach sands, 0 0 0 181 or changes in siltation, deposition or erosion which may modify the channel of a river or stream or the bed of the ocean or any bay inlet or lake? g) Exposure of people or property to geologic 0 0 181 0 hazards such as earthquakes, landslides, mud slides, ground failure, or similar hazards? Comments: The project would result in minor grading to accommodate the proposed uses. Erosion control measures required as a part of the grading plan will reduce soil erosion potential to less than significant levels. Compliance with the Urtiform Building Code will reduce any seismic related hazards to less than sigrtificant levels. IV. WATER. Would the proposal result in: a) Changes in absorption rates, drainage patterns, 0 0 181 0 or the rate and amount of surface runoff? b) Exposure of people or property to water related 0 0 0 181 hazards such as flooding or tidal waves? c) Discharge into surface waters or other alteration 0 0 0 181 of surface water quality (e.g., temperature, dissolved oxygen or turbidity)? d) Changes in the amount of surface water in any 0 0 0 181 water body? e) Changes in currents, or the course of direction 0 0 0 ~ of water movements, in either marine or fresh waters? f) Change in the quantity of ground waters, either 0 0 0 ~ through direct additions or withdrawals, or through interception of an aquifer by cuts or excavations? g) Altered direction or rate of flow of 0 0 0 181 groundwater? h) Impacts to groundwater quality? 0 0 0 ~ i) Alterations to the course or flow of flood 0 0 0 ~ waters? j) Substantial reduction in the amount of water 0 0 0 ~ otherwise available for public water supplies? Comments: The project would result in an increase in impervious surfaces on the site, however, due to the limited size of the overall project, significant increases in runoff are not anticipated. J-f wPC ','HOMElPLANNtNGlSTORED\1718.94 Page 3 P""'bl~ P","'bl~ S...i"~.t .... tho. SI,.t"~.t D."" S...tn~ot N. tm""d Mk",... Im""d Im""d V. AIR QUALITY. Would the proposal: a) Violate any air quality standard or contribute to 0 0 181 0 an existing or projected air quality violation? b) Expose sensitive receptors to pollutants? 0 0 0 18 c) Alter air movement, moisture, or temperature, 0 0 0 181 or cause any change in climate, either locally or regionally? d) Create objectionable odors? 0 0 0 18 e) Create a substantial increase in stationary or 0 0 18 0 non-stationary sources of air emissions or the deterioration of ambient air quality? Comments: The project will result in a minor increase in traffic and a corresponding increase in vehicular emissions. However, the size and scope of the project are not sufficient to result in significant impacts. VI. TRANSPORT ATIONICIRCULA TION. Would the proposal result in: a) Increased vehicle trips or traffic congestion? 0 0 181 0 b) Hazards to safety from design features (e.g., 0 0 0 18 sharp curves or dangerous intersections) or incompatible uses (e.g., fann equipment)? c) Inadequate emergency access or access to nearby 0 0 0 18 uses? d) Insufficient parking capacity on-site or off-site? 0 0 0 18 e) Hazards or barriers for pedestrians or bicyclists? 0 0 0 18 t) Conflicts with adopted policies supporting 0 0 0 18 alternative transportation (e.g. bus turnouts, bicycle racks)? g) Rail, waterborne or air traffic impacts? 0 0 0 18 h) A "large project" under the Congestion 0 0 0 18 Management Program? (An equivalent of 2400 or more average daily vehicle trips or 200 or more peak-hour vehicle trips.) Comments: Implementation of the project would result in increased vehicular volumes on local roadways and would increase the demand for parking. Average daily traffic attributable to the project would be approximately 640 cars per day. This increase would not result in a change in the Level of Service for any roadways in the project vicinity and subsequently would not result in a significant IIDpact. WPC P,\HOMElPLANNtNGlSTORED\1718,94 1- if Page 4 P""'",~ P"m""~ ';g.lnœot Lou,.... ",.Inœot U.I- "'.'"œnt N. 1m..." M"""" tm..... 1m..." VII. BIOLOGICAL RESOURCES. Would the proposal result in impacts to: a) Eudangered, sensitive species, species of 0 0 0 181 concern or species that are candidates for listing? b) Locally designated species (e.g., heritage trees)? 0 0 0 181 c) Locally designated natural communities (e.g, oak 0 0 0 181 forest, coastal habitat, etc.)? d) Wetland habitat (e.g., marsh, riparian and vernal 0 0 0 181 pool)? e) Wildlife dispersal or migration corridors? 0 0 0 181 t) Affect regional habitat preservation planning 0 0 0 181 efforts? Comments: The project site is currently developed with single-family residential uses and does not contain any sensitive biological resources. VIII. ENERGY AND MINERAL RESOURCES. Would the proposal: a) Conflict with adopted energy conservation plans? 0 0 0 181 b) Use non-renewable resources in a wasteful and 0 0 0 181 inefficient manner? c) If the site is designated for mineral resource 0 0 0 181 protection, will this project impact this protection? Comments: The limited size and scope of this project would not result in significant impacts in the area of energy or mineral resources. IX. HAZARDS. Would the proposal involve: a) A risk of accidental explosion or release of 0 0 0 181 hazardous substances (including, but not limited to: petroleum products, pesticides, chemicals or radiation)? b) Possible interference with an emergency 0 0 0 181 response plan or emergency evacuation plan? c) The creation of any health hazard or potential 0 0 0 181 health hazard? d) Exposure of people to existing sources of 0 0 0 181 potential health hazards? e) Increased fire hazard in areas with flammable 0 0 0 181 brush, grass, or trees? WI'C F,\HOMElPlANNtNGlSTORED\1718.94 1~/D Page 5 P"""'lal~ P"'."'lat~ Sic.Uta..' Lou tbo. Sicmr_", U"'- s....,nœ.t N. 1m.." M'",'" 1m.." 1m.." Comments: The scope and nature of the project would not result in increased hazards in any of the areas indicated. X. NOISE. Would the proposal result in: a) Increases in existing noise levels? 0 0 181 0 b) Exposure of people to seve:e noise levels? 0 0 0 181 Comments: Increased traffic would result in minor increases in noise on local roadways, however, it is not anticipated that any noise increase would be perceptible. XI. PUBLIC SERVICES. Would the proposallwve an effect upon, or result in a need for new or altered government services in any of the following areas: a) Fire protection? 0 0 0 181 b) Police protection? 0 0 0 181 c) Schools? 0 0 181 0 d) Maintenance of public facilities, including 0 0 0 181 roads? e) Other governmental services? 0 0 0 181 Comments: The project would increase population in the area by adding new residential units which may impact local schools. The project will be responsible to pay State mandated school impact fees to assist in fmancing facilities needed to serve students generated by new construction. Payment of school fees is required prior to issuance of building permits. Participation in a Community Facilities District (CFD) may be substituted in lieu of developer fees. Adherence to these requirements would result in a less than significant impact to schools. XII. Thresholds. Wlll ¡he proposal adversely impact the 0 0 0 181 City's Threshold Standards? As described below, the proposed project does not adversely impact any of the seen Threshold Standards. a) Fire/EMS The Threshold Standards requires that fife and medical units must be able to respond to calls within 7 minutes or less in 85 % of the cases and within 5 minutes or less in 75 % of the cases. The City of Chula Vista has indicated that this threshold standard will be met, since the nearest fire station is 2 miles away and would be associated with a 4 minute response time. The proposed project will comply with this Threshold Standard. WPC F,IHOMEIPLANNINGISTORED\1718,94 1-;1 Page 6 P"m""~ P"m""~ s~nln~", Lo.. than S~n;"~", Unl- S"';"~nl No tm"," MK;plod tm"," 1m"", Comments: The Fire Department requires that the townhouses provide 3 public fIfe hydrants with a minimwn fIfe flow of 1,000 gallons per minute at 20 PSI. The daycare facility must meet E-3 occupancy standards, provide fire sprinklers and a fire alann system. Fire alann and protection systems may need to be monitored. Other requirements may be forthcoming when more detailed site and building plan infonnation is available. b) Police The Threshold Standards require that police nnits must respond to 84 % of Priority I calls within 7 minutes or less and maintain an average response time to all Priority I calls of 4.5 minutes or less. Police units must respond to 62.10% of Priority 2 calls within 7 minutes or less and maintain an average response time to all Priority 2 calls of 7 minutes or less. The proposed project will comply with this Threshold Standard. Comments: The Police Department has indicated that the proposed project will not impact police services. c) Traffic The Threshold Standards require that all intersections must operate at a Level of Service (LOS) "c" or better, with tlle exception that Level of Service (LOS) "D" may occur during the peak two hours of the day at signalized intersections. Intersections west of 1-805 are not to operate at a LOS below their 1987 LOS. No intersection may reach LOS "E" or "F" during the average weekday peak hour. Intersections of arterials with freeway ramps are exempted from this Standard. The proposed project will comply with this Threshold Standard. Comments: The proposed project will generate approximately 640 trips per day which will not cause any local streets or intersections to exceed a Level of Service "C". The Engineering Department will require street improvements including curb, gutter, sidewalk, asphalt/concrete pavement, street lighting, and the possible relocation of utility poles. In addition, street widening along the project frontage (IndustriaJ Boulevard) is required to provide for ultimate half-width improvements in accordance with the street's General Plan designation as a Class II collector. d) ParkslRecreation The Threshold Standard for Parks and Recreation is 3 acres/l,OOO population. The proposed project will comply with this Threshold Standard. Comments: The applicant will be required to pay park fees to meet City requirements and the Parks and Recreation Department Threshold requirements. e) Drainage The Threshold Standards require that stonn water flows and volwnes not exceed City Engineering Standards. Individual projects will provide necessary improvements consistent with the Drainage Master Planes) and City Engineering Standards. The proposed project will comply with this Threshold Standard. WPC P,IHOME\PLANNtNG\STORED\1718,94 1 ~ Iv Page 7 P...",bt~ P".",bt~ s~.;n",.. u..'ba. s~;n".... U.t- s~in",.t N. 1m.... MS"".", 1m.... 1m.... Comments: Current onsite drainage consists of surface flow to Ada Street and Industrial Boulevard. Offsite drainage consists of surface flow to a natural charmel between Ada Street and Dorthy Street. The Engineering Departtnent has indicated that these drainage facilities are adequate to serve the proposed project. f) Sewer The Threshold Standards require that sewage flows and volumes not exceed City Engineering Standards. Individual projects will provide ne~cssary improvements consistent with Sewer Master Planes) and City Engineering Standards. The proposed project will comply with this Threshold Standard. Comments: The proposed project will generate an estimated 3,500 gallons of liquid waste per day, 13.2 Equivalent Dwelling Units (EDD) over existing amounts. The project will be adequately served by an 8 inch sewer in Ada Street and a 15 inch sewer in Industrial Boulevard. g) Water The Threshold Standards require that adequate storage, treatment, and transmission facilities are constructed concurrently with planned growth and that water quality standards are not jeopardized during growth and construction. The proposed project will comply with this Threshold Standard. Comments: Application of required water conservation devices or fee offset will reduce the project's impact to a less than significant level. XIII. UTILITIES AND SERVICE SYSTEMS. Would the proposal result in a need for new systems, or substantial alterations to the following utilities: a) Power or natural gas? 0 0 0 181 b) Communications systems? 0 0 0 181 c) Local or regional water treatment or distribution 0 0 0 181 facilities? d) Sewer or septic tanks? 0 0 0 181 e) Storm water drainage? 0 0 0 181 f) Solid waste disposal? 0 0 0 181 Comments: The project will require modification and extension of existing infrastructure to accommodate the project, however, substantial alterations will not be required. WPC P,\HOMElPLANNINOISTORED\171S,94 7-/3 Page 8 P""""~ P""""b .Ign'"œoú Lou tho. .lgnlßœoú u..... .".¡r~.. N. tm.." M'","" tm.." 1m.." XIV. AESTHETICS. Would the proposal: a) Obstruct any scenic vista or view open to the 0 0 0 181 public or will the proposal result in the creation of an aesthetically offensive site open to public view? b) Cause the destruction or modification of a scenic 0 0 0 181 route? c) Have a demonstrable negative aesthetic effect? 0 0 0 181 d) Create added light or glare sources that could 0 0 0 181 increase the level of sky glow in an area or cause this project to fail to comply with Section 19.66.100 of the Chula Vista Municipal Code, Title 19? e) Reduce an additional amount of spill light? 0 0 0 181 Comments: The proposed project will replace two one-story single family houses with approximately 8 structures and a parking lot. However, the area is flat, surrounded by development, and no scenic vistas will be impacted. In addition, the project must be approved by the City Design Review Committee. The design review process will ensure that visual and aesthetic impacts are less than significant. XV. CULTURAL RESOURCES. Would the proposal: a) Will the proposal result in the alteration of or 0 0 0 181 the destruction or a prehistoric or historic archaeological site? b) Will the proposal result in adverse physical or 0 0 0 181 aesthetic effects to a prehistoric or historic building, structure or object? c) Does the proposal have the potential to cause a 0 0 0 181 physical change which would affect unique ethnic cultural values? d) Will the proposal restrict existing religious or 0 0 0 181 sacred uses witl1in the potential impact area? e) Is the area identified on the City's General Plan 0 0 0 181 EIR as an area of high potential for archeological resources? Comments: The project site is currently developed and does not contain any significant cultural resources. '1~/r WPC P,\HOMElPLANNtNOISTOREDI1718.94 Page 9 P"""",~ P""""'~ .Ign,nœ'" Lo.. than .ignifiœn' Un"" .Ignlnœ'" Nn 1m.... Matgat... tm.... tm.... XVI. PALEONTOLOGICAL RESOURCES. Will the 0 0 0 181 proposal result in the alteration of or the destruction of paleontological resources? Comments: The project site is currently developed and does not contain any significant paleontological resources. XVII. RECREATION. Would the proposal: a) Increase the demand for neighborhood or 0 0 181 0 regional parks or other recreational facilities? b) Affect existing recreational opportunities? 0 0 0 181 c) Interfere with recreation parks & recreation 0 0 0 181 plans or programs? Comments: The project will introduce new residents into the area which will increase the demand for new parks. Park fees required of new development will offset this increased demand. XVIII. MANDATORY FINDINGS OF SIGNIFICANCE: See Negative Declaration for mnndatory findings of significance. If an EIR is needed, this section should be completed. a) Does the project have the potential to degrade 0 0 0 181 the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods or California history or prehistory? Comments: The project will have no impact upon any existing natural habitat. b) Does the project have the potential to achieve 0 0 0 181 short-term, to the disadvantage of long-term, environmental goals? Comments: The project would not impede any long-term environmental goals. c) Does the project have impacts that are 0 0 181 0 individually limited, but cumulatively considerable? ("Cumulatively considerable" means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects.) WPC F,IHOMElPLANNINGlsroREDI17I8,94 7~/S Page 10 ...""""ty """""ty S".lnœ'" Loa tha. s...;r~", 0.'- Slgnlnœ'" N. 1m..." M....'" 1m..." 1m..." Comments: Some project impacts would contribute to cumulative impacts but would not result in any significant impacts. d) Does the project have environmental effect 0 0 0 181 which will cause substantial adverse effects on human beings, either directly or indirectly? Comments: The size and scope of the project would not resDlt in any substantial adverse impacts to human beings. WPC P,IHOMEI'LANNtNGISTORED\171S." ~ -/(0 Page 11 ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED: The environmental factors checked below would be potentially affected by this project, involving at least one impact that is a "Potentially Significant Impact" or "Potentially Significant Unless Mitigated," as indicated by the checklist on the following pages. 0 Land Use and Planning 0 Transponation/Circulation 0 Public Services 0 Population and Housing 0 Biological Resources 0 Utilities and Service Systems 0 Geophysical 0 Energy and Mineral Resources 0 Aesthetics 0 Water 0 Hazards 0 Cultural Resources 0 Air Quality 0 Noise 0 Recreation 0 Mandatory Findings of Significance DETERMINATION: On the basis of this initial evaluation: I find that the proposed project COULD NOT have a significant effect on the environment, S and a NEGATIVE DECLARATION will be prepared. I fmd that although the proposed project could have a significant effect on the 0 environment, there will not be a significant effect in this case because the mitigation measures described on an attached sheet have been added to the project. A MITIGATED NEGATIVE DECLARATION will be prepared. I fmd that the proposed project MAY have a significant effect on the environment, and an 0 ENVIRONMENTAL IMPACT REPORT is required. I fmd that the proposed project MAY have a significant effect(s) on the environment, but 0 at least one effect: 1) has been adequately analyzed in an earlier document pursuant to applicable legal standards, and 2) has been addressed by mitigation measures based on the earlier analysis as described on attached sheets, if the effect is a "potentially significant impacts" or "potentially significant unless mitigated." An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that remain to be addressed. Ø2-.~ 81Ír, kjt.{ S ture Date . Joseph Monaco, AICP Environmental Projects Manager Redevelopment Agency of the City of Chula Vista ?-t7 WPC F:\HOMEIJ'LANNINGISTORED\1718.94 Page 14 , . This page intentionally left blank. 1~/~ i NORW Commercial Property PALOMAR STREET Residential '. ~ ~ ~ ~ 'cJ> Vacant "?- ~ t 3 0 0 ,,- Co ('i) ~ cD ¿, 0 ; ...-\ C) ..... :IJ ~ III ~- ~ C. III cJ> :J :!'. ~ !:!.. L ,,- (') l..................._......_...........................................~ CO ADA STREET Residential \ " not to scale _~EnecoTech [NVIRONM[NTAl CONSULTANTS T;!I.: ",oj«1 Add",,: 746 & 750 ADA STREET SITE AND ADJACENT PROPERTY MAP CHULA VISTA, CALIFORNIA 91911 r;te No. 02-00515-025 001.'03-15-94 Mod Owg,H: I r;gu,. I~o. 1 1 ~/ ~ , . This page intentionally left blank. 1 ~ ¡rf Þ RESOLUTION 11:;'3 ADOPTING NEGATIVE DECLARATION IS-93-07 FOR PURCHASE OF REAL PROPERTY LOCATED AT 746 AND 750 ADA STREET FOR DEVELOPMENT OF AFFORDABLE HOUSING AND DAY CARE FACILITY, APPROPRIATING $643,000 FROM THE LOW & MODERATE INCOME HOUSING FUND TO COMPLETE SUCH PURCHASE, AND AUTHORIZING EXECUTIVE DIRECTOR TO EXECUTE ALL DOCUMENTS AND TAKE ALL NECESSARY STEPS, AS MAY BE APPROVED BY THE CITY ATTORNEY, IN ORDER TO CLOSE ESCROW FOR THE PURCHASE OF THE PROPERTY. WHEREAS, Council authorized staff to finalize negotiations to acquire two adjacent parcels (746 Ada StreetlAPN 622-020-20 and 750 Ada StreetlAPN 622-020-30) at the northwest corner of the intersection of Industrial Boulevard and Ada Street for the purpose of developing affordable housing and a child care facility associated with the development of the Palomar Trolley Center Shopping Center; and, WHEREAS, negotiations have been successfully concluded with the property owners of the subject properties that have resulted in a purchase contract for the properties at the fair market value of the properties as established by an appraisal commissioned by the City; and, WHEREAS, it is appropriate for the Agency to conclude the purchase of the subject properties at the agreed-upon price in order to effectuate the development of affordable housing and associated day care; and, WHEREAS, sufficient funds to acquire the properties exist in the Agency's Low and Moderate Income Housing Fund which can be appropriately used for the acquisition of property; and, WHEREAS, environmental review under CEOA of the intended property acquisition has been completed. NOW THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA does hereby find, order, determine and resolve as follows: 1. Negative Declaration IS-93-07, analyzing the acquisition and development ofthe property located at 746 and 750 Ada Street, Chula Vista, CA (the "Property") into 12 units of affordable housing and 6,500 sq. ft. child care facility, is hereby adopted. 2. $643,000 of Low and Moderate Income Housing Fund monies for the purchase of the property is hereby appropriated. 3. The City Manager is hereby authorized to conduct all property acquisition activities and execute all relevant documents to close escrow for the purchase of the Property in accordance with the previously approved purchase contract. Approved as to form by: ISSIC:IWP51 IJUANIRESOSIAOA-ST.RESI , . This page intentionally left blank. 1-;¿o REDEVELOPMENT AGENCY AGENDA STATEMENT Item - Meeting Date 09/20/94 ITEM TITLE: RESOLUTION 1424 Waiving Form Bidding Process, Awarding Demolition Contract for 980 F Street to Marquez Brothers Structural Movers, Waiving Formal Bidding and Sales Process in Connection Therewith and Authorizing the Chairman to Execute Demolition Contract in a Form Approved by the City Attorney SUBMITTED BY: Community Development Director c..~' , REVIEWED BY: Executive Director (i.V/(. ~i) (4/5ths Vote: Yes - No_) Council Referra[ Number: ~ BACKGROUND: The Agency property located at 980 F Street (formerly the Shangri-La Restaurant) has been vacated by San Diego Shipbuilding and Repair. An asbestos removal contractor has completed removal of contaminated materials from the building. The Agency is requested to approve a demolition contract for removal of the structure (not the concrete foundation) at this time as an urgency item to prevent probable vandalism, vagrancy, and/or the threat of fire. RECOMMENDATION: That the Agency adopt the resolution awarding a demolition contract for 980 F Street to Marquez Brothers Structural Movers. BOARDS/COMMISS[ONS RECOMMENDAT[ON: N/A DISCUSSION: Under pressure from the Agency, San Diego Shipbuilding and Repair vacated the Shangri-La building this Spring. Since that time, Police and Fire personnel have used the building for training activities, An inspection of the building revealed asbestos in floor tile mastic and other building materials. As required by law, these materials have been removed by a certified asbestos removal contractor in order to ready the building for demolition. Earlier this year, staff secured four bids for the demolition of the structure in order to secure the property. Demolition of the concreted slab in the parking area was not included in the bids due to the excessive expense of removal of this material. The bids for removal of the structure and debris are as follows: Marquez Brothers Structural Movers $18.000 C.E. Wilson 45.000 E. Cidwells Construction & Demolition 56,300 Whillock Construction Company 98.613 The Agency is requested to award the contract to the low bidder, Marquez Brothers Structural Movers. It was thought that their bid, which takes into consideration the salvage value of / -,- - Page 2. Item - Meeting Date 09/20/94 materials removed from the building, could be approved by the City Manager under his authority to approve contracts under $25.000. However, the City Attorney has determined that the real value of the contract, including the value of salvage materials, exceeds the $25,000 limit and must therefore be approved by the Agency. Uraencv Basis. Staff is recommending that the Agency consider and approve this item on an urgency basis because of the recently increased potential for vandalism, vagrancy, fire and/or theft at the site. The asbestos work at the site which was completed just last Friday has made the building more accessible to potential vandals, vagrants, arsonists and thieves. Despite diligent Building and Housing Department efforts to board up the site and police department efforts to safeguard the site, the site has been plagued with these types of problems. Because of these risks, staff believes there is a need for immediate action prior to the upcoming October 4th Agency meeting, Waiver of Formal Biddina Process, The staff is also recommending that in light of the urgent circumstances the formal bidding and sales process for contracts of this magnitude ordinarily required under the Municipal Code (§ 2. 56.070) be waived on this contract. An informal bidding process was undertaken and the contract would be awarded to the lowest responsible bidder if the Agency approves this item. Status of Port District Acquisition Demolition of the structure is recommended at this time even though the Port District is considering the acquisition of the property. The Port has no desire to use the structure and the structure has nominal lease value to the Agency. To date, Port District staff have commissioned an appraisal of the property and a Phase I environmental assessment. Due to the presence of some contaminated soils on the property. the Port District has commissioned a Phase II soils testing which should be completed sometime this Fall. However. due to the probably of vandalism, theft, vagrance, and/or the threat of fire, the Agency is being requested to authorize the demolition of the structure at this time. The cost of demolition can be subtracted from any funds received from the Port District for this property. The cost of maintaining and securing this property intact could soon exceed the demolition cost, particularly in the case of fire. No Historical Sianificance The Shangri-La building was studied and evaluated in the Final EIR for the Mid-Bayfront project and was found not to possess any sensitive architectural features or historic importance. FISCAL IMPACT: Funds for the proposed demolition work are available in CIP BF43 ($31,000) and RD 112 ($25.0001 The asbestos removal work, recently completed cost $24,230. The remaining $31,770 is adeqlJste to cover the remaining demolition work. 1M :ISHAREDIAITORNEYIMARQUEZ, RA41 :L RESOLUTION /-ftJ 1- RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AWARDING DEMOLITION CONTRACT FOR 980 F STREET TO MARQUEZ BROTHERS STRUCTURAL MOVERS, WAIVING FORMAL BIDDING AND SALES PROCESS IN CONNECT[ON THEREWITH, AND AUTHORIZING THE CHAIRMAN TO EXECUTE A DEMOLITION CONTRACT [N A FORM APPROVED BY THE CITY ATTORNEY AND APPROPRIATING FUNDS THEREFOR WHEREAS, the Redevelopment Agency property located at 980 F Street (formerly the Shangri-La Restaurant) has been vacated by San Diego Shipbuilding and Repair; and WHEREAS, an asbestos removal contractor has completed removal of contaminated materials from the building; and WHEREAS, the Agency secured four bids for the demolition of the structure (not including the concrete foundation); and WHEREAS, Marquez Brothers Structural Movers was the low bidder, said bid taking into consideration the salvage value of materials removed from the building. WHEREAS, immediate action is necessary on this contract in order to preclude the possibility of vandalism, theft, vagrancy, and/or the threat of fire. NOW THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA does hereby find, order, determine and resolve as follows: 1. The Agency hereby awards the demolition contract for the structure located at 980 F Street (not including the concrete foundation) to the low bidder, Marquez Brothers Structural Movers. 2. Due to the need for immediate action on this contract and the fact that an informal bidding process was employed to solicit bids, the Agency hereby finds the formal bidding and sales process impractical and waives the formal bid process in accordance with Chula Vista Municipal Code Section 2.56.070. 3. The Agency hereby authorizes the Chairman to execute a demolition contract with Marquez Brothers Structural Movers on a form approved by the City Attorney to be held on file in the office of the City Clerk as Document No._. PRESENTED BY: APPROVED AS TO FORM BY: ~~ Chris Salomone, Executive Secretary and Bruce M. Boogaard Community Development Director Agency General Counsel IM:ISHAREDIA TTORNEYIMAR QUEZ,RES I c3 Thís 'page íntentíonaIly lift blank. i