HomeMy WebLinkAbout2008/02/05 RDA Item 2
CITY COUNCIL &
REDEVELOPMENT AGENCY
AGENDA STATEMENT
ITEM TITLE:
SUBMITTED BY:
REVIEWED BY:
SUMMARY
~l~ CIlY OF
~CHUlA VISTA
FEBRUARY 5, Item ~
RESOLUTION OF THE CHULA VISTA REDEVELOPMENT
AGENCY [A] APPROPRIATING $5,570,000 FROM
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUNDS FOR FINANCIAL ASSISTANCE FOR THE
DEVELOPMENT OF LOS VECINOS; AND [B] AUTHORIZING
THE EXECUTIVE DIRECTOR TO EXECUTE A LOAN
AGREEMENT BY AND BETWEEN THE CITY OF CHULA
VISTA REDEVELOPMENT AGENCY, AND LOS VECINOS, LP
AND ALL OTHER IMPLEMENTING AGREEMENTS AND
DOCUMENTS.
ASSISTANT DIRECTOR OF REDEVELOPMENT AND HOUSING e2
EXECUTIVE DIRECTOR -' ~Yl
WDI'-c
4/5THS VOTE: YES ~ NO D
The Los Vecinos project is a 42-unit affordable housing development project located at 1501
Broadway. In June, 2007, the CVRC Chula Vista Redevelopment Agency (Agency) adopted a
resolution conditionally approving financial assistance from the Agency's Low and Moderate
Income Housing Funds for this development (locator map provided as Attachment I).
Since June, Wakeland Housing and Development Corporation (the "Developer") has met the
City's conditional approval requirements including securing 9% tax credits from the California
Tax Credit Allocation Committee to support the majority of the estimated $17 million cost of
constructing the project. Staff is recommending that the Agency appropriate $5,570,000 from
Redevelopment Agency Low and Moderate Income Housing Funds, with $5,480,000 for a loan
related to the development of the Los Vecinos project and $90,000 to offset City costs related to
loan underwriting, legal services, environmental review, and other related internal project staff
costs. The loan agreement in substantially final form has been provided as Attachment 2.
Additionally, the City Council approved state Density Bonus Incentives and Concessions for the
Los Vecinos project by Ordinance on July 10, 2007, pursuant to California Govemment Code
65915 (State Density Bonus Law). The related restrictions are incorporated into the Covenants,
Conditions, and Restrictions (CC&Rs), which will be recorded against the property and are
included as Exhibit D of the Loan Agreement (Attachment 2).
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ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed project for compliance with
the California Environmental Quality Act and has determined that the proposed project was
adequately covered in the previously adopted Mitigated Negative Declaration, IS-07-017, which
the City Council adopted by Ordinance 3077 on July 10, 2007.
RECOMMENDATION
That the Chula Vista Redevelopment Agency (Agency) adopt the Resolution.
BOARDS/COMMISSION RECOMMENDATION
On June 14,2007, the Chula Vista Redevelopment Corporation approved the Design Review for
the project (DRC-07-27), and recommended Agency fmancial assistance and a City Council
Ordinance taking actions required for project approval.
On March 28, 2007, the Housing Advisory Commission voted to recommend approval to the
City Council and Redevelopment Agency to provide financial assistance from the City's Low
and Moderate Income Housing Funds to Wakeland Housing for the financing of a proposed 42
unit affordable housing project located at 1501 Broadway.
DISCUSSION
The ProDosed Proiect
The Los Vecinos development is proposed to be built at 1501 Broadway located in the Merged
Chula Vista Redevelopment Project Area. The site is where the blighted Tower Lodge motel
once stood and was recently demolished. The motel had a long history of community
complaints, code violations and police calls for service.
The development will consist of 42 apartment units including a community room, computer lab,
laundry room, and courtyard with a tot lot, barbeque grills, and seating areas. The project will
also include Wakeland Housing's Resident Services Program that has won awards for exemplary
services.
The project will primarily serve extremely low and very low-income households (30 to 50
percent of the Area Median Income), helping meet the City's affordable housing needs and the
Redevelopment Agency's expenditure and production requirements for very low income
housing. Monthly rents would range from approximately $380 to $1,000 (per HUD Annual
Income Limits).
Los Vecinos will be a model for sustainable affordable housing development in the region. The
project participated in a modeling program offered through the National Energy Center for
Sustainable Communities (NECSC) and the Gas Technology Institute (GTI) to analyze the
energy, economic, and environmental impacts of alternative building design options. Wakeland
is pursuing Leadership in Energy and Environmental Design (LEED) certification for the project,
which will be one of only two multifamily affordable projects in the region to have solar
powered residential units. Ninety percent of the building's electricity will be solar-generated,
including residential units, the community center, the laundry facilities, and all indoor and
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outdoor lighting. Additionally, Los Vecinos will use Energy Star appliances, instantaneous
(tankless) water heater, energy efficient hydronic heating systems, and radiant barrier roof
sheathing.
Densitv Bonus
On July 10,2007, the City Council adopted Ordinance No. 3077 approving three development
incentives in the areas of parking, building setback, and open space. In granting the density
bonus and incentives, California Government Code Section 65915 (State Density Bonus Law)
requires that the developer agree to the following: 1) Construct a minimum of 10 percent of the
total units of the housing development for very low income households or 20 percent for low
income households: 2) Rental rates do not exceed 30 percent of 50 percent of the area median
income (AMI) for very low income households and 30 percent of 60 percent of the AMI for low
income households; 3) the above conditions apply for a minimum of 30 years. The project will
exceed the minimum requirements of State Density Bonus Law by providing all units as
affordable to very low and low income households for 55 years. The attached Loan Agreement
and related Covenants, Conditions, and Restrictions (CC&Rs) have been designed to satisfy the
requirements of State Law (Attachments 2 ).
Income and Rent Restrictions
The Loan Agreement for the Agency's assistance restricts rents and income. The agreement
will be recorded against the property and its restrictive covenants will run with the land. The
agreements articulate the following restrictions and mechanisms for monitoring compliance:
llnit ~o. of l nits Tar~(..t Income Area l\ledlan I'roposed
Dcscri tion GI'OUp Income (-t Persons) Rents
I Bd/I Ba I 30% AMI $ I 6,550 $380
2 Bd/I Ba 2 30% AMI $ I 8,650 $427
3 Bd/2 Ba 2 30% AMI $20,700 $493
I Bd/I Ba 2 45% AMI $22,850 $576
2 Bd/I Ba 2 45% AMI $25,700 $646
3 Bd/2 Ba 3 45% AMI $28,550 $747
I Bd/I Ba 6 50% AMI $27,600 $638
2 Bd/I Ba 8 50% AMI $31,050 $719
3 Bd/2 Ba 7 50% AMI $34,500 $831
I Bd/I Ba 3 60% AMI $33,100 $768
2 Bd/I Ba 3 60% AMI $37,250 $865
3 Bd/2 Ba 2 60% AMI $41,400 $1,000
MGR I N/A N/A N/A
Total 42
Restricted
In addition, the following requirements are including in the implementing agreements:
1. Tenant income is certified at initial occupancy and each year thereafter.
2. Certified reports must be submitted to the Agency on a semi-annual basis.
3. The above conditions apply for a period of 55 years.
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Redevelooment Al!:encv Loan
The Agency Loan of $5,680,000 will be made on the following loan terms and conditions:
1. The loan repayment will be secured by a Deed of Trust recorded against the project
property.
2. The term of the loan shall be fifty-five (55) years.
3. Payment of principal and interest on the Agency loan shall be made, if available, on an
annual basis, out of "Residual Receipts", rental income from the project minus debt
service on the principal loan, payment of the deferred developer fee, and reasonable
operating expenses.
4. Developer will be required to operate the project consistent with the Agency's Loan
Agreement, Tax-Credit Equity Deed Restrictions, and all Covenants, Conditions, and
Restrictions.
5. It is estimated that the proposed total project cost will be $17,238,353. Listed below are all
projected sources of funds, including grants, deferred fees, owner equity, etc.
Name of Term Interest Amount of .\nnual Residual
Lender/Source In Rate Funds Debt Receipt/Deferred
Months Sen ice I)a~ ment
California 360 7.22% $1,577,368 $127,844 No
Community
Reinvestment Corp.
Chula Vista Redev. 660 5.00% $5,680,000 N/A As Available
Agency
Solar Rebate N/A N/A $257,040 N/A As Available
Investment Tax N/A N/A $59,643 N/A N/A
Credits (solar)
Deferred Developer 144 5.00% $228,000 N/A As Available
Fee
Total Permanent Financing $7,802,051
Total Tax Credit Equity $9,436,302
Total Sources of Project Funds $17,238,353
Article XXXIV
This project is subject to Article XXXIV of the State Constitution (Article 34). Article
34requires that voter approval be obtained before any "state public body" develops, constructs or
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acquires a "low rent housing project". On April 11, 1978, Chula Vista voters approved
Proposition C, which authorized the development, construction, and acquisition of 400 units of
housing for persons of low-income. Currently, there are 66 units remaining under the authority
granted by Proposition C. The restriction of the 42 units will be allocated to this remaining
balance, leaving 24 units under the original 400 units approved. Voter approved an additional
1,600 units in November 6,2006.
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the Redevelopment Agency Board and City Council
members and has found no property holdings within 500- feet of the boundaries of the property
which is the subject of this action.
FISCAL IMPACT
Tonight's appropriation of $5,570,000 includes the remaining gap of $5,480,000 for costs related
to the development of Los Vecinos, and $90,000 to offset City costs related to loan underwriting,
legal services, environmental review, and other related internal project staff costs to plan and
execute this project. A predevelopment loan of $200,000 from the Low and Moderate Housing
Fund was previously appropriated, and has been disbursed. Including the predevelopment funds
the total financial assistance toward this project is $5,770,000.
The Redevelopment Agency's Low and Moderate-Income Housing Fund current appropriation
of $5,570,000 is available from the Agency's Low Moderate Housing Fund. Any repayment of
the loan will be deposited into the Low and Moderate-Income Fund for further use in providing
affordable housing.
As a non-profit affordable housing development, this project will not generate tax increment. It
will help meet the City's critical affordable housing needs and the expenditure and production
requirements of the Redevelopment Agency for very low income housing.
ATTACHMENTS
I. Locator Map
2. Loan Agreement
3. Disclosure Statement
Prepared by:
Sarah Johnson, Project Coordinator II, Redevelopment and Housing
Jose Dorado, Project Coordinator II, Redevelopment and Housing
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ATTACHMENT 1
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CHULA VISTA PLANNING
'aOC!)CATOR :::
ADORESS:
SCALE:
No Scale
AND BUILDING DEPARTMENT
Wakeland Housing &
Development COIp.
1501 BroadwaYk \ \.
PROJECTO.............N:
DESIGN REVIEW
Project SUIllIl'l3ry. Proposed: 42-units of affordable, multifamily
renlal housing wilh a community center for residents.
FILE NUMBER:
DCR-07-27
Related cases: 15-07-017, PCZ.o7-D6 & PCC.o7.o37
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PCZ-07-06, BA-217
DRC-07-27, BL-B21
PCC-07-037, BB1456
6220920500
1501 Broadway
500' R 12.27.06
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Attachment 2
CONSTRUCTION AND PERMANENT FINANCING LOAN AGREEMENT
By and Between
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
and
LOS VECINOS, L.P.
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THE A TT ACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Ann Moore
City Attorney
Dated:
I /'bl/DB
Construction and Permanent Financing Loan Agreement
By and Between
Redevelopment Agency of the City of Chula Vista
and
Los Vecinos, L.P.
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CONSTRUCTION AND PERMANENT
FINANCING LOAN AGREEMENT
TIDS CONSTRUCTION AND PERMANENT
AGREEMENT, ("Agreement") is entered into as of this _ day of
and between the Redevelopment Agency of the City of Chula Vista
Vecinos, L.P., a California limited partnership ("Borrower") as follows:
FINANCING LOAN
, 2008, by
("Agency") and Los
RECITALS
A. In furtherance of the objective of the California Community Redevelopment Law
to increase, improve, and preserve the community's supply of low- and moderate-income
housing, and to effectuate the Redevelopment Plan for the Merged Chula Vista Redevelopment
Project Area (the "Project"), Agency desires to assist Borrower with the redevelopment of a
certain portion of the Merged ChuIa Vista Redevelopment Project Area generally located at 1501
Broadway in Chula Vista, California (the "Property"), which is more particularly described on
the Property Legal Description attached hereto as Exhibit "A".
B. The Agency and Borrower desire by this Agreement for the Borrower to agree to
construct and permanently finance forty-one (41) affordable units ("Affordable Units"), one (1)
manager's unit, a community room, laundry room, parking, open space, a computer room and tot
lot (collectively, the "Improvements") on the Property, and for the Agency to agree to make a
Loan to Borrower from the Agency's Low and Moderate Income Housing Fund established
pursuant to Section 33334.3 of the California Health and Safety Code (the "Low-Mod Funds") in
the original principal amount of not more than Five Million Six Hundred Eighty Thousand and
Noll 00 Dollars ($5,680,000.00) (the "Agency Loan").
C. The Agency previously made a predevelopment loan to Borrower in the amount
of Two Hundred Thousand and No/lOO Dollars ($200,000.00) (the "Agency Predevelopment
Loan"). The Borrower desires to pay the Agency Predevelopment Loan, including principal,
interest, fees, and related expenses in full from proceeds of the Agency Loan, in accordance with
the terms and conditions of the Agency Predevelopment Loan Agreement, at which time, the
Agency Predevelopment Loan Agreement shall be deemed satisfied.
D. The Property is to be constructed and operated as low and very low income
housing for fifty-five (55) years in accordance with the Declaration of Covenants, Conditions
and Restrictions ("Declaration"), attached hereto as Exhibit "D".
E. The development of the Property pursuant to this Agreement, the fulfillment
generally of this Agreement and the construction of the Improvements pursuant to the terms of
this Agreement, are in the vital and best interest of the City of ChuIa Vista and the health, safety,
morals and welfare of its residents, and in accord with the public purposes and provisions of
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applicable state and local laws and requirements under which the redevelopment of the Project
has been undertaken.
F. The Redevelopment Agency of the City of Chula Vista by Resolution No.
, adopted on , 2008, approved the funding by the Al;;ency of the Agency
Loan.
G. Borrower intends to construct the Project in part with a construction loan from
Wells Fargo Bank in the approximate amount of Eight Million Two Hundred Eighty-Two
Thousand and Noll 00 Dollars ($8,282,000.00) (the "Construction Loan"). Borrower intends to
finance the Property and Improvements using: (i) approximately Nine Million Four Hundred
Thirty-Six Thousand Three Hundred Two and NollOO Dollars ($9,436,302.00) of nine percent
(9%) tax credit equity (the "Tax Credits"); (ii) a permanent financing loan from the California
Community Reinvestment Corporation in the approximate amount of One Million Seven
Hundred Sixteen Thousand Three Hundred Fourteen and No/100 Dollars ($1,716,314.00) (the
"Permanent Loan"); (iii) a solar rebate from the California Energy Commission in the
approximate amount of Two Hundred Fifty-Seven Thousand Forty and No/100 Dollars
($257,040.00) (the "Solar Rebate"); (iv) deferral of Two Hundred Twenty-Eight Thousand and
No/lOO Dollars ($228,000.00) of the developer fee (the "Deferred Developer Fee"); and (v) the
Agency Loan. This Agreement is being executed in connection with and Agency's obligation to
make the Agency Loan is contingent upon the Borrower obtaining the Tax Credits and
Construction Loan, obtaining a commitment for the Permanent Loan and deferring the Deferred
Developer Fee. Borrower shall use its best efforts to obtain the Solar Rebate.
H. The Property and Improvements shall be constructed in accordance with all
applicable law, rules, regulations and conditions of approval from TCAC, the City of Chula
Vista, the Internal Revenue Service, the various lenders involved with the Property and
Improvements and the requirements of this Agreement.
NOW, THEREFORE, in furtherance of the recitals stated above, the mutual covenants
set forth below, the Parties agree, prornise and declare as follows:
DEFINITIONS
The following terms shall have the meanings set forth below:
"Affordable Units" means the forty-one (41) dwelling units to be constructed by
Borrower on the Property, that are restricted for a period of fifty-five (55) years by the
Declaration, which includes restrictions related to the maximum rents which may be charged,
and to the tenants that are eligible to reside in such units, all of which are in furtherance of the
City's goals of making available homes, either for rent or for sale, to that section of population
who cannot afford to buy or rent locally on the open market.
"Agency" means the Redevelopment Agency of the City of Chula Vista, a public body,
corporate and politic, exercising governmental functions and powers and organized and existing
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under Chapter 2 of the Community Redevelopment Law of the State of California, and any
assignee of or successor to its rights, powers and responsibilities.
"Agency Loan" means the loan from Agency to Borrower as provided in this Agreement
in an original principal amount not to exceed Five Million Six Hundred Eighty Thousand and
Noll 00 Dollars ($5,680,000.00), and as further defined in this Agreement.
"Agency Note" means the promissory note evidencing the Agency Loan, a copy of which
is attached hereto as Exhibit "B."
"Agreement" means this Construction and Permanent Financing Loan Agreement.
"Borrower" means Los Vecinos, L.P., a California limited partnership. Nothing
contained herein shall prohibit Borrower from changing its name provided that there is no
change in the composition and make up of Borrower, without the express prior consent of
Agency.
"Construction Loan" means the construction loan from the Wells Fargo Bank in the
approximate amount of Eight Million Two Hundred Eighty-Two Thousand and No/lOO Dollars
($8,282,000.00).
"Declaration" means the declaration of covenants, conditions and restrictions securing
the Agency Loan as defined in Recital B of this Agreement, a copy of which is attached hereto as
Exhibit "D."
"Deed of Trust" means the deed of trust securing the Agency Loan, Declaration and this
Agreement, a copy of which is attached hereto as Exhibit "C."
"Defective Work" means all work, material, or equipment that is unsatisfactory, faulty,
incomplete, or does not conform to industry standards, construction documents, or approved
drawings.
"Deferred Developer Fee" means Two Hundred Twenty-Eight Thousand and No/lOO
Dollars ($228,000.00) of the developer fee which is being deferred. The Deferred Developer Fee
shall be paid in full no later than December 31, 2020.
"Environmental Laws" means any federal, state or local law, statute, ordinance or
regulation pertaining to environmental regulation, contamination or cleanup of any Hazardous
Materials, including, without limitation, (i) the California Hazardous Waste Control Act
(California Health and Safety Code 925100 et seq.), (ii) the Carpenter-Presley-Tanner Hazardous
Substance Account Act (California Health and Safety Code 925300 et seq.), (iii) the Hazardous
Materials Release Response Plans and Inventory (California Health and Safety Code 925500 et
seq.), (iv) Underground Storage of Hazardous Substances (California Health and Safety Code,
925280 et seq.), (v) Article 9 or Article 11 of Title 22 of the California Administrative Code,
Division 4, Chapter 20, (vi) the Safe Drinking Water and Toxic Enforcement Act (California
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Health and Safety Code, 925249 et seq.), (vii) the Porter-cologne Water Quality Control Act
(California Water Code, 913000 et seq.), (viii) the Federal Water Pollution Control Act (33
D.S.C. 91271 et seq.), (ix) the Resource Conservation and Recovery Act (42 D.S.C. 96901 et
seq.), (x) the Comprehensive Environmental Response, Compensation and Liability Act (42
D.S.C. 99601 et seq.), (xi) the Safe Drinking Water Act (14 D.S.C. 9300f et seq.), (xii) the
Hazardous Materials Transportation Act (49 D.S.C. 95101 et seq.), (xiii) the Toxic Substances
Control Act (15 D.S.C. 92601 et seq.), (xiv) the Federal Insecticide, Fungicide and Rodenticide
Act (7 D.S.C. 9136, et seq.), (xv) the Clean Air Act, 42 D.S.C. (97401 et seq.) or (xvi) any state
or federal lien or "superlien" law, any environmental cleanup statute or regulation, or any permit,
approval, authorization, license, variance or permission required by any governmental authority
having jurisdiction.
"Hazardous Materials" means:
(i) Those substances included within the definitions of "hazardous substance,"
"hazardous waste," "hazardous material," "toxic substance," "solid waste," "pollutant" or
"contaminant" in the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (42 D.S.C. 99601 et seq.); the Resource Conservation and Recovery Act (42 D.S.C.
96901 et seq.); the Clean Water Act (33 D.S.C. 92601 et seq.); the Toxic Substances Control Act
(15 D.S.C. 99601 et seq.); the Hazardous Materials Transportation Act (49 D.S.C. 91801 et seq.);
or under any other Environmental Laws;
(ii) Those substances included within the definitions of "Extremely Hazardous
Waste," "Hazardous Waste," or "Restricted Hazardous Waste," under 9925115, 25117 or
25122.7 of the California Health and Safety Code, or is listed or identified pursuant to 9925140
or 44321 of the California Health and Safety Code;
(iii) Those substances included within the definitions of "Hazardous Material,"
"Hazardous Substance," "Hazardous Waste," "Toxic Air Contaminant" or "Medical Waste"
under 9925281, 25316, 25501, 25501.1, 25023.2 or 39655 of the California Health and Safety
Code;
(iv) Those substances included within the definitions of "Oil" or a "Hazardous
Substance" listed or identified pursuant to 9311 of the Federal Water Pollution Control Act, 33
D.S.C. 91321, as well as any other hydrocarbonic substance or by-product;
(v) Those' substances included within the definitions of "Hazardous Waste,"
Extremely Hazardous Waste" or an "Acutely Hazardous Waste" pursuant to Chapter 11 of Title
22 of the California Code of Regulations;
(vi) Those substances listed by the State of California as a chemical known by the
State to cause cancer or reproductive toxicity pursuant to 925249.9(a) of the California Health
and Safety Code;
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(vii) Any material which due to its characteristics or interaction with one or more other
substances, chemical compounds, or mixtures, damages or threatens to damage, health, safety, or
the environment, or is required by any law or public agency to be remediated, including
remediation which such law or public agency requires in order for the property to be put to any
lawful purpose;
(viii) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual,
whether or not the presence of such material resulted from a leaking underground fuel tank;
(ix) Pesticides regulated under the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. g136 et seq.;
(x) Asbestos, PCBs, and other substances regulated under the Toxic Substances
Control Act, 15 U.S.C. g2601 et seq.;
(xi) Any radioactive material including, without limitation, any "source material,"
"special nuclear material," "by-product material," "low-level wastes," "high-level radioactive
waste," "spent nuclear fuel" or "transuranic waste" and any other radioactive materials or
radioactive wastes, however produced, regulated under the Atomic Energy Act, 42 U.S.C.
gg2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C. ggl0101 et seq., or pursuant to the
California Radiation Control Law, California Health and Safety Code gg25800 et seq.;
(xii) Any material regulated under the Occupational Safety and Health Act, 29 U.S.C.
gg65l et seq., or the California Occupational Safety and Health Act, California Labor Code
gg6300 et seq.;
(xiii) Any material regulated under the Clean Air Act, 42 U.S.C. gg7401 et seq. or
pursuant to Division 26 of the California Health and Safety Code;
(xiv) Those substances listed in the United States Department of Transportation Table
(49 CFR Part 172.101), or by the Environmental Protection Agency, or any successor agency, as
hazardous substances (40 CFR Part 302);
(xv) Other substances, materials, and wastes that are or become regulated or classified
as hazardous or toxic under federal, state or local laws or regulations; and
(xvi) Any material, waste or substance that is:
(a) a petroleum or refined petroleum product;
(b) asbestos;
(c) polychlorinated biphenyl;
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(d) designated as a hazardous substance pursuant to 33 U.S.c. g1321 or listed
pursuant to 33 U.S.C. g1317;
(e) a flammable explosive; or
(f) a radioactive material.
"Low-Mod Funds" means the Agency's Low and Moderate Income Housing Fund
established pursuant to Section 33334.3 of the California Health and Safety Code.
"Improvements" shall have the meaning ascribed to it in Recital B, as more particularly
described herein and in the Scope of Development.
"Permanent Loan" means the conversion of a portion of the Construction Loan to a
permanent financing loan from California Community Reinvestment Corporation, in the
approximate amount of One Million Seven Hundred Sixteen Thousand Three Hundred Fourteen
and No/lOO Dollars ($1,716,314) on the terms and conditions stated in the Construction Loan
documents.
"Placed in Service" means the date the Project is placed in service for purposes of 26
U.S.C. g42.
"Project" shall have the meaning ascribed to it in Recital A.
"Property" means the approximately 1.46 acre portion of the Project located on at 1501
Broadway in the City ofChula Vista, which is more particularly described on Exhibit "A".
"Solar Rebate" means the solar rebate from the California Energy Commission in the
approximate amount of Two Hundred Fifty-Seven Thousand Forty and No/1 00 Dollars.
"Tax Credits" means not less than Nine Million Four Hundred Thirty-Six Thousand
Three Hundred Two and No/lOO Dollars ($9,436,302.00) of nine percent (9%) tax credit equity
to be obtained by Borrower.
ARTICLE I.
Loan Provisions - General
Section - 1.1 Construction and Permanent Financing Loan and Authorization. Agency will
fund the Agency Loan to Borrower according to and upon the terms and conditions set forth
below. The proceeds of the Agency Loan shall be used by Borrower solely for the purposes of
constructing and permanently financing the Affordable Units. This Agreement and the Agency
Loan are in furtherance of and authorized by the provisions of the California Community
Redevelopment Law (California Health and Safety Code Section 33000 et seq.), pursuant to
which: (i) the Agency has deposited funds derived from the Project into the Agency's Low and
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Moderate Income Housing Fund; (ii) the Agency has found that the construction and use of the
Property and the Improvements pursuant to this Agreement will be of benefit to the Project; and
(iii) the Affordable Units are to be constructed and used exclusively to provide housing for "very
low income and lower income families" as defined in the Sections 50105 and 50079.5 of the
California Health & Safety Code, respectively, at "affordable rents" as defined by Section
50053(a) of the California Health & Safety Code.
(a) Loan Amount and Funding. The original principal amount of the Agency Loan
shall not exceed Five Million Six Hundred Eighty Thousand and No/IOO Dollars
($5,680,000.00). The Agency Loan shall be disbursed as set forth in Section 1.27, below.
(b) Promissorv Note.
(1) The Agency Loan shall be evidenced by a promissory note executed by
Borrower, in favor of Agency, in the amount of the Agency Loan in the form and format as set
forth in Exhibit "B" attached to this Agreement and incorporated herein by reference (the
"Agency Note"). The Agency Loan and the Agency Note shall be recourse until the timely
completion of construction and issuance of a certificate of occupancy for all forty-two (42)
dwelling units to be constructed at the Property. Upon completion of such construction and
issuance of the certificate of occupancy in connection therewith the Agency Loan shall become a
nonrecourse obligation of Borrower (except with respect to Paragraph 9(b) of the Agency Note).
(2) The Agency Note shall bear interest at five percent (5%) simple interest
per annum. For purposes of this Section 1.1 (b )(2), Year 1 means period of time that begins on
the date the Improvements are Placed in Service and ends on December 31 of the same calendar
year. Subsequent "Years" during the term of the Agency Loan shall mean each calendar year
immediately following the end of the immediately preceding Year and shall be numbered
consecutively thereafter. Interest shall accrue, however, no payments shall be due under the
Agency Note until the April 1 immediately following Year 1. At such time and each April 1
thereafter during the term of the Agency Loan, Borrower shall pay to the Agency: (i) for Years
1-30, 50% of the Residual Receipts, as defined in the Agency Note; and (ii) for Years 31-54,
75% of the Residual Receipts, until fifty-five (55) years from the date the Improvement are
Placed in Service, at which time all principal and unpaid interest shall be due and payable. The
principal and interest may be prepaid in whole or in part at any time and from time to time,
without notice or penalty. Any prepayment shall be allocated first to unpaid interest and then to
principal. Prepayment of the Agency Loan shall not in any manner affect any obligation or
restriction related to maintaining the units as "Affordable Units" during the fifty-five (55) year
term.
(3) Should Borrower agree to or actually sell, convey, transfer, further
encumber or dispose of the Property or any interest in it (except as provided in the Agency
Note), without first obtaining the written consent of the holder of the Agency Note (i.e., the
Agency) as required by section 1.8, then all obligations secured by the Agency Note may be
declared due and payable at the option of Agency. The consent to one transaction of this type
will not constitute a waiver of the right to require consent to future or successive transactions.
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The resident tenant restrictions set forth in the Declaration and referenced in Section 1.5 of this
Agreement shall remain in place whether or not Agency approves or disapproves a successor-in-
interest for the term of fifty-five (55) years.
(4) The parties acknowledge that the Agency Loan is not a purchase money
mortgage as defined in Code of Civil Procedure Section 580b.
Section 1.2 - Security.
(a) Deed of Trust. Borrower shall execute, acknowledge, deliver and cause to be
recorded upon the close of Escrow as security for the Agency Loan, the Deed of Trust, in a form
and format set forth in Exhibit "C" attached to this Agreement and incorporated herein by this
reference.
(b) Additional Security. Borrower shall execute and deliver to Agency such separate
security agreements, UCC-l fmancing statements, consents or certificates, assignments and other
documents or instruments as Agency may require (the "Security Agreement") and reflecting
security interests in the personalty used in connection with the operation of the Property as
Agency may require. In addition thereto, Borrower shall execute and deliver such security
agreements, and the like, as required by Agency in connection with the Deed of Trust.
Specifically, Borrower agrees that any notice of default and/or copy of any notice of sale will be
mailed to Agency in compliance with Section 2924b of the California Civil Code.
Section 1.3 - Subsequent Financing. Except for the deeds of trust and security instruments with
respect to the Construction Loan and Permanent Loan, no further loan, deed of trust, or
encumbrance, shall be placed by Borrower upon any portion of the Property and improvements,
whether by refinancing or otherwise, without first obtaining the express written consent of
Agency. Any such unconsented to financing or refinancing shall constitute a material beach of
this Agreement. Further, during any Agency approved refinancing or subsequent encumbrance,
Agency shall be provided AL T A title insurance or endorsements acceptable to it, at the cost and
expense of Borrower. Said written consent shall be at Agency's sole discretion. Without the
express written consent of Agency such subsequent financing is void.
Section 1.4 - Funding. Agency's obligation to fund the Agency Loan shall be and is specifically
conditioned upon Borrower obtaining the Tax Credits and Construction Loan and deferring the
Deferred Developer Fee, Agency approving the preliminary title reports concerning the Property,
payment of all taxes now due and payable on the Property, issuance of an ALTA Lender's policy
insuring the Agency Loan satisfactory to Agency's Executive Director, satisfaction of all
conditions precedent to Agency's obligation to make the Agency Loan, and satisfaction of those
conditions set forth in Section 1.15 of this Agreement.
Section 1.5 - Declaration of Covenants and Restrictions. The obligation of Agency to make and
fund the Agency Loan hereunder is subject to the execution and recordation of the Declaration in
the form set forth in Exhibit "D" attached hereto. The Declaration shall contain the housing
payment and income level restrictions for the forty-one (41) Affordable Units for a period of
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fifty-five (55) years. Rents will provide affordable housing to households earning between thirty
percent (30%) and sixty percent (60%) of area median income as referenced in the Declaration.
The monthly rental rate shall be as set forth in the Declaration. The rents may be subject to
modification annually as set forth in the Declaration. Except as otherwise provided in this
Agreement, the Declaration shall be recorded in a position superior and prior to all
encumbrances on the Property.
Section 1.6 - No Partnership or Joint Venture. The relationship between Agency and Borrower
created by this Agreement shall not be one of partnership or joint venture, but rather shall be one
of secured lender and borrower.
Section 1.7 - Insurance. Borrower, at its sole cost and expense, shall purchase and maintain
public liability, auto liability and property damage insurance with limits of not less than a project
specific $2,000,000.00 per occurrence, combined single limit and $4,000,000 in the aggregate for
injury to or death of one or more persons and/or property damage arising out of a single accident
or occurrence, insuring against any and all liability of Agency, the City of Chula Vista, and their
employees, Borrower, its contractors, employees, agents, subcontractors and its authorized
representatives, arising out of or in connection with Borrower's activities at the Property. All
public liability insurance and property damage insurance shall insure the performance of
Borrower of the indemnity provisions set forth in this Agreement. Further, in all such insurance
required to be purchased and maintained by Borrower, Agency shall be named as an additional
insured, Borrowers coverage to be primary; Liability Additional Insured Endorsement must not
exclude Completed Operations and policy to provide ten year extended reporting period, and the
policy shall contain cross-liability endorsements. Borrower further agrees to purchase and
maintain in full force and affect such policies of worker's compensation insurance as may be
required to cover all employees of Borrower during the term of this Agreement, in a form and
amount acceptable to Agency. Further, Borrower shall maintain policies of insurance as
referenced in Exhibit "E" to this Agreement throughout the term of the Agency Loan and for the
duration of the Covenants, Conditions and Restrictions. Certificates of insurance acceptable to
Agency shall be filed with Agency prior to funding of the Agency Loan. These insurance
requirements may be waived, in writing, in advance, by the Executive Director of the Agency on
a case by case basis. The insurance requirements contained in this section shall not be construed
to limit the Borrower's obligations under this Agreement, including without limitation any
indemnities.
Section 1.8 - Assignabilitv.
(a) Borrower may not assign any interest in this Agreement and shall not transfer any
interest in the same (whether by assignment or novation) without the prior written approval of
Agency, which consent shall not be unreasonably withheld, conditioned or delayed. Any
assignment without the prior written consent of Agency shall be voidable, at the election of
Agency. Further, Borrower shall not change general partners nor admit new general partners
without the express written consent of Agency, which consent shall not be unreasonably
withheld, conditioned or delayed. Agency shall have full right and authority to assign all or a
part of its rights and delegate all or a part of its duties under this agreement.
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(b) Except to the extent that changes are permitted by Section 1.8(a) above, Borrower
shall not amend or modify in any material respect or, restate, revoke or rescind its certificate of
limited partnership or its partnership agreement without the prior written consent of Agency,
which consent shall not be unreasonably withheld, conditioned or delayed.
Section 1.9 - Subcontracting. The construction contract(s) entered into by Borrower with the
general contractor for the construction of the Improvements shall be subject to the prior written
approval of Agency. Borrower shall be fully responsible to Agency for the acts and omissions of
its subcontractors, and of persons either directly or indirectly employed by Borrower.
Section 1.10 - Borrower Liabilitv. Borrower shall be responsible for all injuries to persons,
including dismemberment or death, and/or all damages to real or personal property of Agency,
its officers, employees, agents, or others, including unrelated third parties, arising out of or
related to the design, engineering, operation or construction of the Improvements, and/or any
breach of this Agreement, caused by or resulting from any action or omission of the Borrower,
its employees and/or its agents during the term of this Agreement. Borrower shall defend, hold
harmless and indemnify Agency, the City of Chula Vista, and all officers and employees of each
public agency in accordance with Section 1.12, below.
Section 1.11 - Ownership of Materials and Documents. Any and all sketches, drawings, tracings,
field survey notes, computations, plans, details and other materials and documents prepared by or
on behalf of Borrower pertaining to the Property shall be the property of Agency upon default by
Borrower (to the extent of Borrower's rights in such documents), and the expiration of all
applicable cure period(s), and Borrower shall deliver such materials and documents to Agency
whenever requested to do so by Agency. Notwithstanding the foregoing, the Agency's rights to
the materials delineated in the immediately preceding sentence shall be subordinate to the rights
of the lenders for the Permanent Loan or the Construction Loan with respect to the same.
Subject to the rights of third parties that prepared such documents, Agency shall have the right to
have duplicate copies of such materials and documents for their file, at the cost and expense of
Agency, upon written request even if Borrower is not in default under the terms of this
Agreement. Additionally, Borrower agrees to and shall execute an assignment in favor of the
Agency of all of Borrower's rights in and to any plan, studies, and analyses, which were funded
with the Agency Predevelopment Loan, which assignment shall be subordinate to the rights of
the lenders for the Permanent Loan or the Construction loan with respect to the same.
Section 1.12 - Indemnification.
(a) With respect to any liability, including but not limited to claims asserted,
demands, causes of action, costs, expenses, losses, attorney fees, injuries, or payments for injury
to any person or property, including injury to Borrower's employees, agents, or officer, caused or
claimed to be caused by the acts or omissions of the Borrower, or the Borrower's employees,
agents, and officers, arising out of, arising from, or related to the Agency Loan; the design,
engineering, or construction of the Improvements; Borrower's ownership or operation of the
Property and the Improvements; or any other work or obligations performed involving this
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Agreement, the Borrower agrees to defend, indemnifY, protect, and hold hannless the Agency,
the City, their respective agents, officers, and employees from and against all liability, losses,
damages, costs or claims, including, but not limited to, claims for injury or death to any person
occurring on the Property and contracts executed by Borrower and any losses from the Property,
including losses from negative cash flows. Also covered is liability arising from, connected with,
caused by, or claimed to be caused by the active or passive negligent acts or omissions of the
City, its agents, officers, or employees that may be in combination with the active or passive
negligent acts or omissions of the Borrower, its employees, agents or officers, or any third party.
The Borrower's duty to defend, indemnifY, protect and hold hannless shall not include any
claims or liabilities arising from the sole negligence or sole willful misconduct of the City, its
agents, officers or employees. This indemnity provision shall survive the repayment of the
Agency Loan and the term of this Agreement.
(b) Borrower further agrees to defend, indemnifY, and hold harmless, the Agency, the
City, their respective agents, officers and employees from and against any and all costs,
damages, claims, and liabilities, including reasonable attorney fees, foreseeable or unforeseeable,
directly or indirectly, arising from or related to Hazardous Materials located, used, released, or
otherwise present or alleged to be present, used, or released on the Property, or any violation or
alleged violation of Environmental Laws. This indemnity provision shall extend beyond the
term of this Agreement and obligations hereunder shall remain recourse even after completion of
the construction, timely filing of certificates of occupancy, and the termination of this
Agreement. Neither Agency, nor the City of Chula Vista has any obligation or liability
whatsoever regarding toxic contamination or Hazardous Materials on the Property.
(c) The Borrower agrees to pay any and all costs the Agency or City incurs to enforce
the indemnity and defense provisions set forth in Section 1.12.
Section 1.13 - Termination. This Agreement and the relationship created herein shall terminate
upon full satisfaction of all of Borrower's obligations, and those of Borrower's successors, if
approved by Agency, under this Agreement. The obligations of Borrower include, but are not
limited to, those obligations arising under the Declaration; the provisions of which shall survive
repayment of the Agency Loan.
Section 1.14 - Defective Work.
(a) Correction. Removal. or Replacement. If during the term of this Agreement, or
any duration as may be required by law or regulation, the Improvements are discovered to
contain Defective Work, the Borrower shall promptly and in accordance with the Agency's or
City's written instructions and within the reasonable time limits stated therein, either correct the
Defective Work, or if identified during construction, remove it from the site and replace it with
non-defective and conforming work.
(b) Agency's/City's Right to Correct. If circumstances warrant, including but not
limited to an emergency or Borrower's failure to adhere to section 1.14(a), Agency and/or City
may correct, remove, or replace the Defective Work. In such circumstances, Borrower shall not
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recover costs associated with the Defective Work and shall reimburse the Agency and/or City for
all their costs, whether direct or indirect, associated with the correction or removal and
replacement.
(c) No Limitation on other Remedies. Exercise of the remedies for defects pursuant
to this Section shall not limit the remedies the Agency and/or City may pursue under this
Agreement or law.
Section 1.15 - Default bv Borrower.
(a) In the event of a material default by Borrower in the performance of any of the
terms, covenants and conditions contained in this Agreement, the Agency Note, the Deed of
Trust, the Declaration, or the Security Agreement, Agency shall give Borrower notice of such
default. If the default is reasonably capable of being cured within thirty (30) calendar days after
such notice is received or deemed received, Borrower shall have such period to effect a cure
prior to exercise of remedies by Agency under this Agreement, the Declaration and the Deed of
Trust. If the default is such that it is not reasonably capable of being cured within thirty (30)
days and Borrower, in Agency's sole and absolute discretion, (i) initiates corrective action within
said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then
Borrower shall have such additional time (but not to exceed ninety (90) days) as is reasonably
necessary to cure the default prior to exercise of any remedies by Agency. If such default is not
timely cured or in the event of any default under any prior or junior note secured by an
encumbrance on the Property or any portion of it, or any note or deed of trust given in
conjunction herewith, or in the event of the filing of a bankruptcy proceeding by or against
Borrower, all sums disbursed or advanced by Agency shall at the option of Agency immediately
become due and payable and Agency shall have no obligation to disburse any further funds from
said account, or otherwise, and Agency shall be released from any and all obligations to
Borrower under the terms of this Agreement. These remedies shall be in addition to any and all
other rights and remedies available to Agency, either at law or in equity.
(b) If a non-monetary event of default occurs under the terms of this Agreement, the
Agency Note, the Deed of Trust, the Declaration or the Security Agreement, prior to exercising
any remedies hereunder or thereunder, Agency shall give Borrower notice of such default. If the
default is reasonably capable of being cured within thirty (30) calendar days after such notice is
received or deemed received, Borrower shall have such period to effect a cure prior to exercise
of remedies by Agency under this Agreement, the Declaration and the Deed of Trust. If the
default is such that it is not reasonably capable of being cured within thirty (30) days and
Borrower, in Agency's sole and absolute discretion, (i) initiates corrective action within said
period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then
Borrower shall have such additional time (but not to exceed ninety (90) days) as is reasonably
necessary to cure the default prior to exercise of any remedies by Agency. If such default is not
timely cured, then the Agency may proceed with all or any of its rights and remedies available at
law or in equity or as set forth herein, in the Declaration and/or the Deed of Trust.
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(c) In the event of any monetary default by Borrower under the terms of this
Agreement, the Agency Note, the Deed of Trust, the Declaration or the Security Agreement,
Agency shall give Borrower a ten (10) day written notice of default, during which Borrower shall
have the ability to cure the monetary default. If the default is not timely cured, Agency may
proceed with all rights and remedies under the terms of the Agency Loan or at law.
(d) The default or defective performance by Borrower under the terms of this
Agreement shall not relieve Borrower from any obligation to correct any incomplete, inaccurate,
or defective work at no further cost to Agency.
Section 1.16 - Conditions to Agencv Obligations. The obligation of Agency to make and fund
the Agency Loan is subject to the following conditions:
(a) This Agreement, the Agency Note, Deed of Trust, the Declaration, and this
Agreement, fully executed by Borrower, shall have been delivered to Agency and/or its designee
along with all other fully executed security documents and instruments provided for herein
and/or as required by Agency. Borrower has provided and delivered to Agency at Borrower's
sole expense a standard Form ALTA, Lender's Policy of Title Insurance, insuring Agency's
security interest in the Property under the Deed of Trust and in an amount equal to the loan
amount set forth in Section l.l(a), above;
(b) Legal counsel representing Borrower shall have delivered to Agency a legal
opinion satisfactory in all respects to Agency's Executive Director in his/her sole discretion,
opining that this Agreement, the Agency Note, the Declaration, the Deed of Trust and the
Security Agreement represent obligations which are valid, binding upon and enforceable against
Borrower (subject to (i) bankruptcy, insolvency or other laws affecting creditors' rights
generally, (ii) application of principles of equity generally, and (iii) laws of the State of
California governing obligations secured by a deed of trust or mortgage);
(c) Borrower's certification at the close of escrow that: (i) the Agency Loan is wholly
for the benefit of Borrower, (ii) Borrower is responsible for all obligations created by the Agency
Loan including, without limitation, the repayment of all principal and interest now due and
payable or which may become due and payable on the terms and conditions of this Agreement,
the Agency Note, the Deed of Trust, and any other security documents and instruments provided
for herein;
(d) Borrower's certification at the close of escrow that Borrower shall use the Agency
Loan funds solely for and in connection with the construction and permanent financing of the
Property and Improvements;
(e) Borrower shall have strictly complied with, and performed, all terms and
conditions of the documents executed by Borrower in connection with the Agency Loan;
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(f) Borrower shall have obtained final funding commitments for the funding of the
funds referenced in the Recitals, necessary to complete the Improvements, to the satisfaction of
the Agency;
(g) Agency's approval ofloan documentation for the Agency Loan;
(h) Agency's approval of Borrower's partnership agreement;
(i) Agency's approval of an ALTA survey of the Property;
(j) Borrower has paid or caused to be funded an amount into escrow, which is
sufficient to pay for all costs associated with such escrow, including without limitation title fees,
escrow fees and closing costs;
(k) Agency's approval of all fmancing documents, including without limitation the
Construction Loan and Permanent Loan documents;
(m) A construction contract for a stipulated sum for the work at the Property,
acceptable to the Agency's Executive Director, shall have been executed by the Borrower and
the general contractor who has been selected to do the work;
(n) To the best of Borrower's knowledge, there are no actions, suits, material claims,
legal proceedings, or any other proceedings affecting the Borrower or any parties affiliated with
the Borrower, at law or in equity before any court, tribunal, government agency, domestic or
foreign, which, if adversely determined, would materially impair the right or ability of Borrower
to execute or perform its obligations under this Agreement or any documents required hereby to
be executed by Borrower, or which would materially adversely affect the financial condition of
the Borrower or any parties affiliated with the Borrower.
(0) To the best of Borrower's knowledge, Borrower's execution, delivery, and
performance of its obligations under this Agreement will not constitute a default or breach or any
contract, agreement, or order to which Borrower or any parties affiliated with Borrower is a party
or by which it is bound.
(P) No attachment, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization, receivership or other proceedings have been filed or are
pending or threatened against the Borrower or any parties affiliated with Borrower, nor are any
of such proceedings contemplated by Borrower or any parties affiliated with Borrower.
(q) Borrower shall, upon leaming of any fact or condition, which would cause any
warranties or representations herein not to be true in any material respect, immediately give
written notice of such fact or condition to Agency; and
(r) Such other conditions as Agency shall reasonably request.
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Section 1.17 - Borrower's Representations and Warranties.
Borrower represents and warrants that:
(a) Borrower is a validly and lawfully formed limited partnership, and is in good
standing under California law and will remain such for the term of this Agreement;
(b) Execution of this Agreement, the Deed of Trust, the Declaration and all other
documents executed in conjunction herewith have been duly authorized by Borrower's general
partners, and such execution shall not result with the passage of time or the giving of notice or
both in breach of or in acceleration of performance under any contract or document to which
Borrower may be a party;
(c) All required approvals have been obtained in connection with Borrower's
execution of this Agreement, and all related agreements and documents to the effect that no
breach of or acceleration of performance under any agreement or document to which Borrower is
a party will result in such execution and all individuals signing this Agreement for a party which
is a corporation, limited liability company, partnership or other legal entity, or signing under a
power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant
to the Agency that they have the necessary capacity and authority to act for, sign and bind the
respective entity or principal on whose behalf they are signing;
(d) Funds advanced by Agency pursuant to the Agency Loan are advanced wholly or
in part for the benefit of Borrower;
(e) The principal and interest due and payable under the Agency Loan are subject to
the terms and conditions of this Agreement, any other security documents or instruments
provided for herein;
(f) Borrower agrees to use said funds solely for the construction and permanent
financing of the Property and Improvements as set forth in the Recitals;
(g) Borrower shall comply with the terms of the Declaration at all times during the
55-year term of the Declaration; and
(h) The defective performance by Borrower under the terms of this Agreement shall
not relieve Borrower from any obligation to correct any incomplete, inaccurate, or defective
work at no further cost to Agency, when such inaccuracies, defects and incompletions are due to
the fault of Borrower, including its subcontractors, agents, partners, joint venturers and
employees.
Section 1.18 Affordabilitv Provision.
(a) Execution of Covenants, Conditions and Restrictions. Borrower agrees to execute
the Declaration and to cause it to be recorded, assuring compliance with the affordability
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provisions of this Agreement. Borrower agrees to obtain any and all subordination agreements,
if any, necessary to insure that the Declaration is an encumbrance on the Property prior to all
other encumbrances, liens and taxes. Such subordinations shall be on terms and conditions
acceptable to the Executive Director of the Agency in his/her sole discretion. The Declaration
shall be binding and enforceable against all heirs, successors and assigns of Borrower.
(b) Term of Affordabilitv. Borrower agrees that the Property shall remain affordable
and subject to the Declaration for not less than fifty-five (55) years from the effective date as
referenced in the Declaration.
(c) Cross-Default With the Declaration. Borrower and its successors in interest to the
Property shall strictly comply with all of the terms and conditions of the Declaration. Any
default under the Declaration shall be a default under this Agreement, the Agency Note and the
Deed of Trust. .
(d) No Conversion to Condominiums. Borrower agrees that Borrower shall not, and
shall not allow any other person to, during the term of the Declaration, cause all or any portion of
the Property to be converted to condominiums or to otherwise allow a condominium map or
condominium plan to be recorded or filed against all or any portion of the Property. Borrower
further agrees that the conversion of all or any portion of the Property to condominiums and/or
the recordation or filing of a condominium map or condominium plan against all or any portion
of the Property during the term of the Declaration, shall be a breach of this Agreement, the
Agency Loan, the Declaration, the Agency Note and the Deed of Trust, entitling the Agency to
immediately exercise any and all of its rights and remedies under this Agreement, the Agency
Loan, the Declaration, the Agency Note and the Deed of Trust, including without limitation
acceleration of the Agency Note and foreclosure under the Deed of Trust.
Section 1.19 - Agencv Aooroval of Prooerty Manager. At all times during the term of the
Declaration, if the Agency serves a thirty (30) day written notice of deficiencies in the property
management for the Property, or default under the Declaration or any document executed in
conjunction herewith, which deficiencies or default have not been rectified by Borrower, within
the thirty (30) day period (unless such deficiency or default is not capable of being cured within
such thirty (30) day period, then such amount of time as Agency determines is needed, not to
exceed ninety (90) days, provided Borrower commences cure within thirty (30) day period and
continues to diligently pursue cure), then, Agency shall have the right, but not the duty, in its
sole discretion and upon such thirty (30) days written notice: (i) to require the retention of a
professional property management firm to manage the Property; (ii) to approve, in advance and
in writing, the retention of any such property management firm, including the terms of the
contract governing such retention; and (iii) to require Borrower to terminate any such property
management firm, provided that such termination shall comply with the termination provisions
of the management contract in question. Borrower shall cooperate with Agency to effectuate
Agency's rights.
Section 1.20 - llil!!:y. If a court of competent jurisdiction determines, by way of final
unappealable order or judgment, that the interest rate charged under the Agency Note is usurious,
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then such rate shall automatically and retroactively be reduced to the maximum rate allowed
under applicable law.
Section 1.21 - Remedies.
(a) Contract Governed bv Laws of the State of California. This Agreement, its
performance, and all suits and special proceedings under this Agreement, shall be constituted in
accordance with the laws of the State of California and Federal law, to the extent applicable. In
any action, special proceeding, or other proceeding that may be brought arising out of, under or
because of this Agreement, the laws of the State of California and the United States, to the extent
applicable, shall govern to the exclusion of the law of any other forum, without regard to the
jurisdiction in which the action or special proceeding may be instituted.
(b) Standing, Equitable Remedies: Cumulative Remedies. Borrower expressly agrees
and declares that Agency or any successor or public agency shall be the proper party and shall
have standing to initiate and pursue any and all actions or proceedings, at law or in equity,
including but not limited to foreclosure under any security instrument securing performance
hereunder, to enforce the provisions hereof and/or to recover damages for any default hereunder,
notwithstanding the fact that such damages or the detriment arising from such a default may have
actually been suffered by some other person or by the public at large. Further, Borrower
expressly agrees that receivership, injunctive relief and specific performance are proper pre-trial
and/or post-trial remedies hereunder, and that, upon any default, a receiver may be appointed by
the court to take control of the Property and to assure compliance with this Agreement. Nothing
in this subparagraph, and no recovery to Agency, shall restrict or limit the rights or remedies of
persons or entities other than Agency, including but not limited to the City of Chula Vista,
against Borrower in connection with the same or related acts by Borrower. The remedies set
forth in this Section are cumulative and not mutually exclusive, except the extent that their award
is specifically determined to be duplicative by final order of a court of competent jurisdiction.
(c) Remedies at Law for Breach of Operating Restrictions. In the event of any
material default under the Declaration and/or Section 1.16 and 1.17 hereof regarding restrictions
on the operation and the transfer of the Property, Agency shall be entitled to, in addition to any
and all other remedies available at law or in equity: (i) declare the Agency Loan to be all due and
payable immediately and in full; and (ii) recover compensatory damages. If the default in
question involves the violation of Section 1.17, above, including without limitation a default
under the Declaration, the amount of such compensatory damages shall be the product of
multiplying (A) the number of months that the default in question has continued until the time of
trial by (B) the result of subtracting the rents properly chargeable hereunder for the Affordable
Unites) in question from the amount actually charged. Borrower and Agency agree that it would
be extremely difficult or impracticable to ascertain the precise amount of actual damages
accruing to Agency as a result of such a default and that the foregoing formula is a fair and
reasonable method of approximating such damages. Agency shall be entitled to seek and to
recover damages in separate actions for successive, separate breaches which may occur. Further,
interest shall accrue on the amount of such damages from the date of the breach in question at the
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rate of ten percent (10%) per annum or the maximum rate than allowed by law, whichever is
less. Nothing in this section shall preclude the award of exemplary damages as allowed by law.
(d) Expert Witness. Attornevs' Fees. and Costs. The parties agree that the prevailing
party in litigation for the breach and/or interpretation and/or enforcement of the terms of this
Agreement shall be entitled to their expert witness fees, if any, as part of their costs of suit, and
attorneys' fees as may be awarded by the court, pursuant to California Code of Civil Procedure
("CCP") Section 1033.5 and any other applicable provisions of California law, including,
without limitation, the provisions of CCP Section 998.
Section 1.22 - Management Fee. The amount of management fees paid by Borrower with
respect to the Project shall be subject to the annual approval of Agency. The Agency hereby
approves the fees set forth in that certain management contract between Borrower and
, dated June _' 2007"
Section 1.23 - Operating and Replacement Reserves. Borrower shall, during the time of the term
of the Declaration, maintain operating and replacement reserves approved by Agency. Failure to
maintain such reserves shall constitute a material default under the terms of this Agreement.
Borrower shall maintain an operating reserve in accordance with the provisions of Borrower's
partnership agreement, failure to do so shall be a material breach of this Agreement. Annually,
beginning with the first year after the timely completion of the Improvements and each year
thereafter, not less than Twelve Thousand Six Hundred Ninety-Six and No/100 Dollars
($12,696.00) set aside as a reserve for replacements (1I1th of the foregoing amount may be set
aside by Borrower each month). This replacement reserve amount is subject to revision upward
as determined by the Executive Director of the Agency, annually, based upon an increase in the
consumer price index for the San Diego Metropolitan Area. The reserves shall be maintained in
a separate account in anticipation of and as a contingency against unbudgeted and/or unforeseen
expenses in the operation and maintenance of the Property and Improvements. No
disbursements from the operating reserve or replacement account( s) shall be made without the
express written consent of the Executive Director of the Agency, or designee, which consent
shall not be unreasonably withheld or delayed. Borrower shall account to Agency for any
monies expended from the operating reserves and/or replacement account(s), in such form as
approved by Agency.
Section 1.24 - Comoletion of Construction. All construction of the Improvements, as approved
by Agency, shall be completed by Borrower to the satisfaction of Agency and Placed in Service"
as that term is used in the Internal Revenue Code, on or before December 31, 2009. Time is of
the essence in the completion of the Improvements; failure to comply with these requirements
shall constitute a material default under the terms of this Agreement. Completion of the
Improvements shall occur upon the filing or the issuance by the building official of the City of
Chula Vista of a temporary Certificate of Occupancy for all units at the Property.
Section 1.25 - Failure to Receive Tax Credits. The failure of Borrower to obtain a commitment
for at least Nine Million Four Hundred Thirty-Six Thousand Three Hundred Two and No/100
Dollars ($9,436,302.00) of nine percent (9%) tax credits, on or before closing, shall constitute a
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material default under the terms of the Agreement. The failure of the tax credit partner to fund
any of the tax credit equity installments, in accordance with the terms of the Borrower's
Partnership Agreement shall constitute a material default under the terms of this Agreement,
unless an equivalent amount is contributed as capital to Borrower by Wakeland Los Vecinos,
LLC, a California limited liability company within thirty (30) days of the tax credit partner's
failure to fund such tax equity installment. In no event shall any amount contributed to Borrower
by Wakeland Los Vecinos, LLC, or any other person be structured as debt without the prior
written consent of the Agency, which consent may be withheld in the Agency's sole discretion.
Section 1.26 - Removal of Managing General Partner bv the Agencv. At all times that any
portion of the Agency Loan remains unpaid and outstanding and/or the Declaration is in force
and effect, and the Agency has served a ninety (90) day written notice of default under this
Agreement, the Declaration, and/or any other document executed by Borrower with respect to
the Agency Loan or the Project, , which default has not been rectified by Borrower, within the
ninety (90) day period (unless such default is not capable of being cured within such ninety (90)
day period, then such amount of time as Agency determines is needed, not to exceed ninety (90)
additional days, provided Borrower commences cure within the original ninety (90) day period
and continues to diligently pursue cure), then, Agency shall have the right, but not the duty, in
Agency's sole discretion and upon such ninety (90) days written notice (i) to require the removal
of the Managing General Partner of Borrower and the termination of the Managing General
Partner's interest in the Borrower; and (ii) to require that Borrower admit a replacement
Managing General Partner, acceptable to the Agency in its sole discretion. Borrower shall
cooperate with Agency to effectuate Agency's rights.
Section 1.27 - Funding Mechanism.
(a) Reduction in Total Disbursement Amount. The total Agency Loan amount is
Five Million Six Hundred Eighty Thousand and No/IOO Dollars ($5,680,000.00). As a
Predevelopment Loan of Two Hundred Thousand Dollars ($200,000.00) was made to the
Borrower prior to the execution of this Agreement, and the Borrower would like to be released
from the obligations of the Predevelopment Loan Agreement and have the Predevelopment Loan
Agreement deemed satisfied, any disbursement of monies under this Agency Loan Agreement
shall be reduced by the amount of principal, interest, expenses, and fees related to
Predevelopment Loan ("Predevelopment Loan Repayment Amount"). The Predevelopment
Loan Repayment Amount shall be included as part of the Principal of the Agency Loan and be
subject to the terms and conditions of this Agreement. The Five Million Six Hundred Eighty
Thousand and NollOO Dollars ($5,680,000.00) Agency Loan includes the Two Hundred
Thousand Dollars ($200,000.00) Predevelopment Loan Repayment Amount. Therefore, the
remaining Five Million Four Hundred Eighty Thousand and No/IOO Dollars ($5,480,000.00) of
the Agency Loan shall be disbursed as set forth in this Section 1.27.
(b) Disbursement at Closing. At closing, the Agency shall deposit $4,932,000.00
with Wells Fargo Bank, National Association ("Wells Fargo"), which amount Wells Fargo shall
hold and disburse in accordance with the Construction Loan documents approved by Agency.
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(c) Submission of Draw Reauests. During construction, Borrower shall submit to
Wells Fargo written draw requests supported by such back up documentation as Wells Fargo
and/or the Construction Loan documents require and Borrower shall provide a copy of the same
to the Agency.
(d) Approval of Draw Reauests. Wells Fargo shall inspect the work to determine its
completion and shall thereafter approve, approve in part, or disapprove such draw request in
accordance with the written requirements of the Construction Loan documents. Wells Fargo
and/or Borrower shall provide copies of any and all construction inspector's reports and copies
of all wire transfer confirmations with respect to Construction Loan and/or Agency Loan
disbursements.
(e) Limit on Effect of Approval. Review and/or approval of any work by the Wells
Fargo, disbursement or monies pursuant to a draw request, or any Agency review and/or
approval of the Construction Loan documents and/or work shall be understood to be general
review and/or approval only, and shall not relieve Borrower of the responsibility to design,
engineer, and construct the Improvements in accordance with all applicable laws, codes,
regulations, and good design, construction, and engineering practice. Any deficiencies or defects
shall be corrected at Borrower's cost and expense and without any cost to the City or Agency.
(f) Disbursements Conditioned on Lien Releases. Disbursements of approved draws
by Wells Fargo shall be conditioned upon Wells Fargo's receipt of evidence of Borrower's use
of a lien release and as required by the Construction Loan documents for payments or
disbursements.
(g) Final 10%. Ten percent (10%) of the Agency Loan, $548,000.00, shall be
withheld and shall not be funded, regardless of expenditures and draw requests, unless and until
a certificate of occupancy for all forty-two (42) dwelling units to be constructed at the Property
has been issued.
ARTICLE II
Snecific Loan Provisions
Section 2.1 - Conditions to Agencv Obligations and Borrower Representations and Warranties.
(a) Interest of Current or Former Members. Officers or Emolovees. Borrower
represents and warrants that no member, officer, or employee of Borrower, no member of the
governing body of the locality in which Agency was activated, and no other public official of
such locality or localities who exercises any functions or responsibilities with respect to this
Agreement, shall, during his or her tenure, or for one year thereafter, have any interest direct or
indirect, in this Agreement or the proceeds thereof. Any violation of this section may, at the
option of Agency, result in unilateral and immediate termination of this Agreement by Agency.
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(b) Unsecured Environmental Indemnitv. Borrower shall enter into an Unsecured
Environmental Indemnity Agreement, as approved by Agency, in favor of Agency and shall
name Agency and the CitY of Chula Vista as named additional insureds on its insurance policies.
Said policies shall be acceptable to the Executive Director of Agency and shall insure against
any and all losses which may occur as a result of problems, claims, work, and the like associated
with the construction of the Improvements.
(c) Title Policv. Borrower, shall, at its sole cost and expense, obtain an ALTA
lender's policy naming Agency as a named insured, and insuring that Agency's interest is subject
to no superior liens, encumbrances, special assessments or taxes, except for the Construction and
Permanent Deed of Trust with Absolute Assignment of Leases and Rents, Security Agreement
and Fixture Filing made by Borrower in favor of Wells Fargo with respect to the Construction
Loan and Permanent Loan or as otherwise approved by Agency.
(d) Construction Loan and Contract. Agency shall be entitled to review, inspect and.
approve, without liability, the construction contract and all of the. construction being performed
pursuant to the terms of the construction contract and the construction loan, if any. All
construction shall be performed in accordance with the plans and specifications approved by the
Agency in accordance with Section 2.3 of this Agreement, without liability to Agency for review
and observation of the construction. Agency approval shall be understood to be general approval
only, and shall not relieve Borrower or contractor of the responsibility to design, engineer, and
construct the Improvements in accordance with all applicable laws, codes, regulations, and good
design, construction, and engineering practice. Any deficiencies in construction shall be
corrected by the Contractor, and/or Borrower, upon written notice from Agency to Borrower,
prior to any additional funding of this Loan, at Borrower's expense and at no cost to the Agency
or City.
(e) Housing Oualitv Standards. Borrower represents and warrants that Affordable
Units shall be maintained, at all times during the term of the Agreement, in complete compliance
with all housing quality standards contained within 24 CFR 992.251, regardless of whether such
section would apply to the Property. Further, Borrower warrants that all construction shall meet
or exceed the applicable local codes and construction standards, including zoning and building
codes of the City of Chula Vista as well as the provisions of the Model Energy Code published
by the Council of American Building Officials. Borrower hereby consents to periodic inspection
by Agency's designated inspectors and/or designees during regular business hours, including the
Code Enforcement Agents of the City of Chula Vista, to assure compliance with said zoning,
building codes, regulations, and housing quality standards.
(f) Approval of Agencv Disclosure Statement. This Agreement is subject to approval
by Agency's Executive Director of the executed disclosure statements of Borrower. Agency's
Executive Director may, in his/her sole discretion, disapprove of said disclosure statement on or
before recordation of the Deed of Trust. In the event of such disapproval, this Agreement shall
be terminated and of no further force and effect.
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(g) Records and Renorts. Each year during the term of the Declaration, Borrower
shall supply Agency with: (i) a certified rent roll on January 15 for all tenants occupying the
Affordable Units as of the immediately preceding December 31; and (ii) a certified rent roll on
July 15 for all tenants occupying the Affordable Units as of the immediately preceding June 30.
Borrower shall supply Agency, annually (after completion of the Project) not later than April 1,
for the immediately preceding calendar year, with such records and reports as are required and
are requested by Agency. The records and reports include, but are not limited to the following:
(1) Amount of funds expended pursuant to this Agreement;
(2) Eligible Tenant information, including yearly income verifications;
(3) Housing payments charged to resident tenants, to the extent applicable;
(4) On-site inspection results;
(5) Affumative marketing records;
(6) Insurance policies and notices;
(7) Equal Employment Opportunity and Fair Housing records;
(8) Labor costs and records;
(9) An audited income and expense statement and balance sheets for
Borrower;
(10) An audited mcome and expense statement and balance sheets for the
Property ;
(11) A Management Plan for the calendar year in which the report is prepared
showing anticipated rental income, other income, expenses, anticipated
repairs and replacements to the Improvements, timing of such repairs and
replacements, insurance maintained with respect to the Property, and such
other matters as Agency shall require, in its sole discretion;
(12) Federal and State income tax returns for the calendar year, ending on the
preceding December 31 st;
(13) Annual analysis of reserves for repair and replacement;
(14) Annual certification and representation regarding status of all loans,
encumbrances and taxes;
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(15) Annual statement regarding condition of the Property and disclosing any
known defects;
(16) Such other and further information and records as Agency shall request in
writing from Borrower.
Time is of the essence in supplying each and every report required to be supplied to
Agency. The parties agree that a fee of $25.00 per day shall be paid by Borrower to Agency for
each day that each report is delinquent. The parties agree that multiple fees may be charged at
anyone time, depending upon the number ofreport(s) and/or information that is delinquent. The
parties agree that a fee of $25.00 per day, per report and/or information is a reasonable
estimation of the damages that will accrue to Agency as a result of the failure of Borrower to
timely submit the required information and/or reports and that said fees shall be treated as
liquidated damages by the parties, in anticipation of the damages that will be incurred by Agency
as a result of a breach by Borrower. The parties further agree that it would be difficult, if not
impossible, to determine the exact actual amount of damages suffered by Agency in the event of
a breach by Borrower in the reporting requirements of this Agreement, including, but not limited
to, Section 2.1 (I) and Section I.I7( d). Notwithstanding the foregoing or anything to the contrary
contained herein, Agency shall give Borrower prior written notice of any report and/or
information that Borrower has failed to provide Agency pursuant to this Section 2.I(i) and
Borrower shall have ten (10) days to provide such report and/or information to Agency prior to
the assessment of any liquidated damages.
(h) Monitoring of Activities. Borrower agrees to allow Agency reasonable access to
review and inspect Borrower's activities under this Agreement as Agency shall require to
perform its monitoring duties. Agency shall monitor Borrower's activities without liability for
said inspection and review.
(i) Nondiscrimination Covenants. Borrower covenants by and for itself and any
successors in interest that there shall be no discrimination against or segregation of, any person
or group of persons on the basis of race, color, creed, religion, sex, sexual orientation, marital
status, national origin, ancestry, familial status, source of income or disability of any person in
the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall
Borrower or any person claiming under or through it establish or permit any such practice or
practices of discrimination or segregation of any person or group of persons on account of any
basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
defined in Sections 12926, 12926.1, subdivision (m) and paragraph (I) of subdivision (P) of
Section 12955, and Section 12955.2 of the Government Code, with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the
Property. The foregoing covenants shall run with the land. All such deeds, leases or contracts
shall contain or be subject to substantially the following nondiscrimination or nonsegregation
clauses:
(1) Deeds. In deeds "The grantee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that there shall be no
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discrimination against or segregation of, any person or group of persons on account of race,
color, religion, sex, sexual orientation, disability, medical condition, familial status, source of
income, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing
covenants shall run with the land."
(2) Leases. In leases "The lessee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, and this lease is made
and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or
group of persons, on account of race, color, religion, sex, sexual orientation,
disability, medical condition, familial status, source of income, marital status,
national origin or ancestry in the leasing, subleasing, renting, transferring, use,
occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself,
or any person claiming under or through it, establish or permit such practice or
practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in
the land herein leased."
(3) Contracts. In contracts for the rental, lease or sale of the Property or any
dwelling unit "There shall be no discrimination against or segregation of any person or group of
persons on account of race, color, religion, sex, sexual orientation, disability, medical condition,
familial status, source of income, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself
or any person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees of the land."
(j) Effect of Violation of the Terms and Provisions of this Agreement After
Completion of Construction. Agency is deemed the beneficiary of the terms and provisions of
this Agreement and of the covenants running with the land, for and in its own right and for the
purposes of protecting the interests of the community and other parties, public or private, in
whose favor and for whose benefit this Agreement and the covenants running with the land have
been provided, without regard to whether Agency has been, remains or is an owner of any land
or interest therein in the Property or in the Project. Agency shall have the right, if this
Agreement or its covenants are breached, to exercise all rights and remedies, and to maintain any
actions or suits at law or in equity or other proper proceedings to enforce the curing of such
breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled.
(k) Eaual Opportunitv and Fair Housing Programs. During the term of this
Agreement, Borrower agrees as follows:
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(1) Borrower will not discriminate against any employee, person, or applicant
for employment and/or housing because of race, age, sexual orientation, marital status, color,
religion, sex, handicap, or national origin. Borrower will take affirmative action to ensure that
applicants are employed and/or are housed, and that employees or applicants are treated during
employment and/or housing, without regard to their race, age, sexual orientation, marital status,
color, religion, sex, handicap, or national origin. Such action shall include, but is not limited to
the following: employment, upgrading, demotion, or termination; rates of payor other forms of
compensation; and selection for training, including apprenticeship. Borrower agrees to post in
conspicuous places, available to employees and applicants for employment, notices to be
provided by Agency setting forth the provisions of this nondiscrimination clause.
(2) Borrower will, in all solicitations or advertisements for employees and
housing placed by on or behalf of Borrower, state that all qualified applicants will receive
consideration for employment without regard to race, age, sexual orientation, marital status,
color, religion, sex, handicap, or national origin.
(3) Borrower will cause the foregoing provlSlons to be inserted in all
subcontracts for any work covered by this Agreement so that such provisions will be binding
upon each subcontractor, provided that the foregoing provision shall not apply to contracts or
subcontracts for standard commercial supplies of raw materials.
(4) Borrower hereby agrees to comply with the Title VII of the Civil Rights
Act of 1964, as amended, the California Fair Employment Practices Act, and any other
applicable Federal and State laws and regulations. Agencywill provide technical assistance and
copies of the referenced programs upon request. 24 CFR Section 92.350.
(5) All activities carried out by Borrower and/or agents of Borrower shall be
in accordance with the requirements of the Federal Fair Housing Act. The Fair Housing
Amendments Act of 1988 became effective on March 12, 1989. The Fair Housing Amendments
Act of 1988 and Title VIII of the Civil Rights Act of 1968, taken together, constitute The Fair
Housing Act. The Act provides protection against the following discriminatory housing
practices if they are based on race, sex, religion, color, handicap, familial status, or national
origin: denying or refusing to rent housing, denying or refusing to sell housing, treating
differently applicants for housing, treating residents differently in connection with terms and
conditions, advertising a discriminatory housing preference or limitation, providing false
information about the availability of housing, harassing, coercing or intimidating people from
enjoying or exercising their rights under the Act, blockbusting for profit, persuading owner to
sell or rent housing by telling them that people of a particular race, religion, etc. are moving into
the neighborhood, imposing different terms for loans for purchasing, constructing, improving,
repairing, or maintaining a home, or loans secured by housing; denying use or participation in
real estate services, e.g., brokers' organizations, multiple listing services, etc.
The Fair Housing Act gives HUD the authority to hold administrative
hearings unless one of the parties elects to have the case heard in U.S. District Court and to issue
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subpoenas. Both civil and criminal penalties are provided. The Fair Housing Act also provides
protection for people with disabilities, and proscribes those conditions under which senior citizen
housing is exempt from the prohibitions based on familial status.
The following State of California Laws also govern housing
discrimination: Fair Employment and Housing Act, Unruh Civil Rights Act of 1959, Ralph Civil
Rights Act of 1976, and Civil Code Section 54.1.
(I) Flood Insurance. Borrower represents, warrants, and certifies, that no portion of
the Property is located within a Flood Plain or Flood Hazard Zone or Area, as indicated on a
FEMA Map; and that no part of the Property is located within a community participating in the
National Flood Insurance Program.
(m) Accessibility Standards. Borrower represents and warrants that Borrower will
comply with all federal, state and local requirements and regulations concerning access to the
units by the disabled and handicapped persons.
Section 2.2 - Architectural and Design Review. Prior to obtaining building, land development,
public and/or private improvement, subdivision and any other permits for construction and/or
development of the Property and Improvements, or any part thereof, Borrower shall submit plans
for the review and approval of Agency, which approval shall not be unreasonably withheld or
delayed. In the event, of rejection or disapproval of the plans, Borrower shall cause the design to
be altered to address the concerns of Agency and shall thereafter resubmit the plans for review
and approval and the process detailed above begin anew. Agency approval shall be understood
to be general approval only, and shall not relieve Borrower of the responsibility to design,
engineer, and construct the Improvements in accordance with all applicable laws, codes,
regulations, and good design, construction, and engineering practice. Any deficiencies or defects
shall be corrected at Borrower's cost and expense and without any cost to the City or Agency.
Section 2.3 - Commencement of Construction and Compliance with Plans and Specifications.
(a) Completion Deadline. Borrower, following recordation of the Deed of Trust and
the consummation of the loan, will promptly commence construction of said improvements and
continue such construction diligently and without delay, in a good and workmanlike manner.
Borrower will complete such improvements in accordance with the plans and specifications
approved by Agency ("Plans and Specifications"), including any additional specifications
prescribed by Agency, and in compliance with all requirements of govemmental authorities
having or asserting jurisdiction. Said construction shall be completed on or before December 31,
2009, as referenced in Section 1.24 of this Agreement.
(b) No Material Changes. Borrower shall not make any changes in the Plans and
Specifications without Agency's prior written consent (which consent will not be unreasonably
conditioned, delayed or withheld) if such change: (i) constitutes a material change in the building
material or equipment specifications, or in the architectural or structural design, value or quality
of the Project; or (ii) would adversely affect the structural integrity, quality of building materials,
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or overall efficiency of operating systems of the Project. Without limiting the above, Agency
agrees that Borrower may make minor changes in the Plans and Specifications without Agency's
prior written consent, provided that such changes do not violate any of the conditions specified
herein. Borrower shall at all times maintain, for inspection by Agency, a full set of working
drawings of the Improvements.
(c) Submission of Documents Related to Changes. Borrower shall submit any
proposed change to the Plans and Specifications to the Agency at least ten (10) days prior to the
commencement of construction relating to such proposed change whether or not such change is
subject to Agency's consent. Requests for any change that requires consent shall be accompanied
by working drawings and a written description of the proposed change, submitted on a change
order form acceptable to Agency, signed by Borrower and, if required by Agency, also by the
architect and the contractor.
Section 2.4 - No Purchase Under Conditional Sales Agreements. Etc. Except for leased
laundry equipment, no supplies, materials, equipment, fixtures, carpets, appliances, or any part of
said improvements shall be purchased or installed under any conditional sales agreement, lease
or under any other arrangement wherein the right is reserved or accrues to anyone to remove or
to repossess any such items. It is expressly agreed that all such items shall be part of the
Property .
Section 2.5 - Security Agreement. Borrower hereby grants to Agency a security interest in all
supplies, materials, fixtures, carpets, appliances, furniture or equipment now or hereafter located
on said Property, together with all proceeds thereof, including insurance proceeds paid or
payable as the result of any loss, injury or damage of the foregoing collateral, whether or not
Agency is named beneficiary under any such insurance. Upon request, from time to time,
Borrower will furnish Agency with an inventory of such collateral. Nothing contained in this
Section 2.5 shall affect the provisions of Section 2.6.
Section 2.6 - Stoppage of Work bv Agencv. Upon 24 hours notice, except in the event of an
emergency when no such notice shall be required), Agency or its agents shall have the right to
enter upon said real property and the Improvements during the period of construction. If in the
opinion of the Agency, the work of construction is not in material conformance with the plans
and specifications, the Agency shall have the right to order the replacement of any unsatisfactory
work theretofore incorporated in said improvements, and to instruct fund control to withhold all
disbursements from the accounts until it is satisfied with the work. If the work is not made
satisfactory to Agency, in its sole discretion, within fifteen (15) calendar days from the date of
stoppage by Agency, such shall constitute a default hereunder. If any unsatisfactory work is
such that it is not reasonably capable of being cured within fifteen (I5) calendar days and
Borrower, in Agency's sole discretion, (i) initiates corrective action within said period, and (ii)
diligently and in good faith works to correct the unsatisfactory work as soon as possible, then
Borrower shall have such additional time as Agency determines, in its sole discretion, is
reasonably necessary to cure the unsatisfactory work prior to exercise of any remedies by
Agency.
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Section 2.7 - Cessation of Work. Completion bv Agencv. Should the work of constructing the
improvements cease, and continues for a period of thirty (30) consecutive days, or should said
work for any reason whatsoever not progress continuously in a manner satisfactory to Agency, in
its sole discretion, then Agency may, at its option and without notice, declare Borrower to be in
default hereunder, and Agency may thereupon, should it so elect, take possession of said
property and let contracts for the completion of said improvements and pay the cost thereof, plus
a fee of fifteen percent (15%) for supervision of construction, disbursing all or any part of the
loan for such purposes; and should the cost of completing said improvements plus such fee
exceed the undisbursed balance of the loan, then the amount of such excess may be expended by
Agency, in which event such amount shall be considered an additional loan to Borrower, and the
repayment thereof, together with interest thereon at the rate provided in Agency Note, shall be
secured by the Deed of Trust and shall be repaid within ten (10) days after the completion of said
improvements, and Borrower agrees to pay the same; Borrower further authorizes Agency at its
option at any time, upon a default by any contractor under any contract in connection with
construction of the Improvements which is not cured within ten (10) days following notice to
Borrower, either in its own name or in the name of Borrower, to do any act or thing necessary or
expedient in the opinion of Agency to secure the performance of construction contracts and
assure the completion of construction of the improvements substantially in accordance with the
plans and specifications, disbursing all or any part of the loan funds for such purposes. In
addition to the specific rights and remedies hereinabove mentioned, Agency shall have the right
to avail itself of any other rights or remedies to which it may be entitled under any existing law
or laws.
Section 2.8 - Mechanic's Liens and Notices to Withhold. Borrower shall use its best efforts to
prevent any lien or stop notice from being place on the Improvements or Property. If a claim of
lien or stop work notice is given or recorded affecting the Property or Improvements, the
Borrower shall within ten (10) calendar days of such recording or service: (i) pay and discharge
same; (ii) effect a release thereof by recording and delivering to Agency a surety bond in
sufficient form and amount; or (iii) provide Agency with indemnification from a title insurance
company reasonably acceptable to Agency against such lien or other assurance which the
Agency, in its sole discretion, deems to be satisfactory for the payment of such lien or stop notice
and for the full and continuous protection of Agency from the effect of such lien or notice. In the
event of the filing with Agency of a notice to withhold or the recording of a mechanic's lien
pursuant to Division 3, Part 4, Title 15 of the Civil Code of the State of California, Agency may
summarily refuse to honor any requests for payment pursuant to this Agreement. In the event
Borrower fails to furnish Agency with a bond causing such notice or lien to be released (or
alternatively issuance of a title policy or endorsement in the full amount of the Agency Loan,
which title policy or endorsement excludes such lien as an exception to title) within thirty (30)
days after the filing or recording thereof, such failure shall at the option of Agency constitute a
default under the terms of this Agreement.
Section 2.9 - Involvement of Agencv in Legal Proceedings. Agency shall have the right to
commence, to appear in, or to defend any action or proceeding purporting to affect the rights or
duties of the parties hereunder or the payment of any funds in connection with this Agency Loan
and to payout of funds not yet disbursed, necessary expenses, employ and pay counsel, all of
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which the illldersigned, jointly and severally, agree to repay to Agency upon demand. Provided,
however, such costs and expenses shall not be due and owing to Agency, if they are incurred as a
result of the breach of the Agreement by Agency or its sole negligence or willful misconduct.
Section 2.10 - Books and Records. Borrower shall require that the general contractor maintain
complete and accurate books and records showing all of the income and disbursements made in
connection with the work of improvements and such books and records shall be available for
inspection and copy by Agency upon request and during regular business hours.
Section 2.11 - Waiver and Amendment. No provision of this Agreement, or breach of any
provision, can be waived except in writing. Waiver of any provision or breach shall not be
deemed to be a waiver of any other provision, or of any subsequent breach of the same or other
provision. Except as otherwise provided herein, this Agreement may be amended, modified or
rescinded only in writing signed by Borrower and the Executive Director ofthe Agency.
ARTICLE III
Miscellaneous Provisions
Section 3.1 - Governmental Requirements Superior. All provisions of this Agreement and all the
other documents relating to the Agency Loan shall be subject and subordinate to any and all
applicable federal, state and local statutes, regulations and ordinances and shall be subject to
modification to comply therewith.
Section 3.2 - Notices. Notices illlder this Agreement shall be deemed given upon actual personal
delivery to the notified party or upon the expiration of five (5) business days from the insertion
of the notice, properly addressed and certified mail, return-receipt requested, postage prepaid, in
a U.S. mail depository within California, or upon the expiration often (10) business days from
the insertion of the notice, properly addressed and via certified mail, return receipt requested,
postage prepaid, in a U.S. mail depository outside of California. Notices shall be sent to the
addresses for the Parties as set forth below or as changed by either Party from time to time by
written notice to the other Party.
Agency:
Redevelopment Agency of the City of Chula Vista
c/o City of Chula Vista
Commilllity Development Department
276 Fourth Avenue
Chula Vista, California, 91910
Copy to:
Chula Vista City Attorney
276 Fourth Avenue
Chula Vista, California 91910
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Ifto Borrower, then to:
Los Vecinos, L.P.
c/o Wakeland Housing and Development Corporation
1230 Columbia Street, Suite 950
San Diego, CA 92101
Attention: Kenneth L. Sauder
Copy to:
SCDC, LLC
c/o Red Capital Markets, Inc.
Two Miranova Place, 12th Floor
Columbus, Ohio 43215
Attn: Tax Credit Asset Management
Section 3.3 - Severability. If any provision of this Agreement is deemed to be invalid or
unenforceable by a court of competent jurisdiction, that provision shall be severed from the rest
of this Agreement and the remaining provisions shall continue in full force and effect.
Section 3.4 - Nonwaiver of Agencv's Rights. No right, remedy, or power of Agency in this
Agreement shall be deemed to have been waived by any act or conduct on the part of Agency or
by any failure to exercise or delay in exercising such right, remedy, or power. Every such right,
remedy or power of Agency shall continue in full force and effect until specifically waived or
released by an instrument in writing executed by Agency.
Section 3.5 - Entire Agreement. This Agreement contains the entire understanding between the
Parties concerning the subject matter contained herein. There are no representations,
agreements, arrangements or understandings, oral or written, between or among the parties
hereto, relating to the subject matter of this Agreement, which are not fully expressed and/or
referred to herein.
Section 3.6 - Exhibits and Recitals Incorporated. All exhibits referred to in this Agreement are
hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits
are actually attached to this Agreement. The Recitals to this Agreement are hereby incorporated
in this Agreement by this reference.
Section 3.7 - Construction of the Agreement. The provisions contained in this Agreement shall
not be construed in favor of or against either party but shall be construed as if both parties
contributed equally to its preparation. This Agreement shall be construed in accordance with the
laws of the State of California.
Section 3.8 - Agencv's Reliance on Statements and Disclosures of Borrower. Borrower has
made certain statements in order to induce Agency to make said loan and enter into this
Agreement, and in the event Borrower has made material misrepresentations or failed to disclose
any material fact, Agency may treat such misrepresentation or ornission as a breach of this
Agreement, and the act of doing so shall not affect any remedies Agency may have under the
deed of trust securing said loan for such misrepresentation or conceillment.
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Section 3.9 - Agencv Not Liable for Acts of Omissions of Borrower or Others. Agency shall in
no way be liable for any acts or omissions of Borrower, any agent or contractor employed by
Borrower, or any person furnishing labor and/or materials used in or related to the construction
of said improvements.
Section 3.1 0 - Time of the Essence. Time is of the essence of this Agreement and of each and
every provision hereof. The waiver by Agency of any breach or breaches hereof shall not be
deemed, nor shall the same constitute, a waiver of any subsequent breach or breaches.
Section 3.11 - Integration. This Agreement represents the entire agreement between the Parties
of the subject matter of this Agreement and supersedes any other agreements, promises, or
representations oral or written pertaining to such subject matter, including without limitation, any
and all agreements, promissory notes, and deeds of trust, along with any amendments and
modifications to such agreements, promissory notes and deeds of trust entered into by and
between Agency and Borrower.
Section 3.12 - Participation. At the request of Agency, Borrower shall cause the fact that Agency
has provided funds to be referenced in. any advertisements, press releases, brochures or
information sheets where funding for the Project is discussed, and on all project designation
placards placed on the Property or other sites, as approved in advance, by Agency. The design,
content and format of the press releases, brochures, information sheets, and all project
designation placards containing a reference to the Agency are subject to the written approval of
the Executive Director of the Agency with respect to all references to the Agency. Agency, at its
sole option, reserves the right to request, in writing, that the references to the participation of
Agency not be included in any, or all, advertisements, press releases, brochures, information
sheets, and/or project designation placards.
Section 3.13 - Approvals. Consents and Other Determinations. Unless otherwise provided, in
any approval, consent, or other determination by Agency or Borrower required under this
Agreement or any of the other loan documents evidencing and/or securing the Agency Loan,
Agency and Borrower shall act reasonably, in good faith and without delay.
Section 3.14 - Counterparts. This Agreement may be executed in any number of counterparts
and, as so executed, the counterparts shall constitute one and the same Agreement. The parties
agree that each such counterpart is an original and shall be binding upon all the parties, even
though all of the parties are not signatories to the same counterpart.
Section 3.15 - Satisfaction of Predevelopment Loan Agreement. The execution of this
Agreement in conjunction with the addition of the Predevelopment Loan Repayment Amount to
the Agency Loan principal, shall be deemed satisfaction of the Predevelopment Loan Agreement
following the Closing on the Agency Loan.
Section 3.16 - Non-Liability of Officials and Emplovees of Agencv. No member, official or
employee of Agency or the City of Chula Vista shall be personally liable to Borrower, or any
successor in interest, in the event of any default or breach of this Agreement or for any amount
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which may become due to Borrower or its successors, or on any obligations under the terms of
this Agreement.
Section 3.17 - Agencv Aoorovals and Actions. Whenever a reference is made herein to an action
or approval to be undertaken by Agency, the Executive Director of Agency or his or her designee
is authorized to act on behalf of Agency unless specifically herein provided otherwise or the
context should require otherwise.
Section 3.18 - Caoacity and Authoritv. All individuals signing this Agreement for a party which
is a corporation, limited liability company, partnership or other legal entity, or signing under a
power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant
to the Agency that they have the necessary capacity and authority to act for, sign and bind the
respective entity or principal on whose behalf they are signing.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
set forth above.
BORROWER:
Los Vecinos, L.P., a California limited partnership
By: Wakeland Los Vecinos, LLC, a California limited liability company
Its: Managing General Partner
By: Wakeland Housing and Development Corporation,
a California nonprofit public benefit corporation
Its: Manrr and Membe:
By: ~ :L~
Kertneth L. Sauder
President and CEO
AGENCY:
Redevelopment Agency of the City of Chula Vista
By:
David Garcia, Executive Director
Approved as to form:
By:
Ann Moore, City Attorney
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Exhibit "A"
Property Legal Description
All that certain real property situated in the County of San Diego, State of California, described
as follows:
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Exhibit "B"
Promissory Note
35
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DO NOT DESTROY TillS NOTE: WHEN PAID, TillS NOTE AND THE DEED OF TRUST
SECURING IT MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION
BEFORE RECONVEYANCE WILL BE MADE.
NOTE SECURED BY DEED OF TRUST
("Note")
Chula Vista, California
,2008
1. PrinciDal and Interest.
FOR VALUE RECEIVED, and in consideration of the Construction and Permanent Financing
Loan Agreement of even date herewith ("Loan Agreement"), made by the Redevelopment Agency
of the City of Chula Vista ("Lender"), Los Vecinos, L.P., a California limited partnership ("Maker")
promises to pay to Lender, or order, at 276 Fourth Avenue, Chula Vista, California, 91910, or such
other place as the holder may from time to time designate by written notice to Maker the principal
sum of Five Million Six Hundred Eighty Thousand and Noll 00 Dollars ($5,680,000.00), or so much
as is advanced, together with accrued interest at the rate of five percent (5%) simple interest. This
Note is issued pursuant to the Loan Agreement and the deed of trust (the "Deed of Trust"), being
executed concurrently herewith, to be recorded in the office of the County Recorder of San Diego
County. The Deed of Trust, the Loan Agreement, the Declaration of Covenants, Conditions and
Restrictions and the Security Agreement, which terms are defined in the Loan Agreement, are
sometimes collectively referred to herein as the "Loan Documents." All capitalized terms which are
not defined herein shall have the meaning ascribed to them in the Loan Agreement. The Deed of
Trust shall be subordinated to the deeds of trust and security instruments securing the Construction
Loan and Bank Loan, as such terms are defmed in the Loan Agreement.
2. Term of Loan. Due Date and Rieht ofPreDavment. Payments shall be due and payable on
the earliest of the following dates:
(a) For purposes of this Note, Year I means period of time that begins on the date
the Improvements are placed in service and ends on December 31 of the same calendar year.
Subsequent "Years" during the term of the Agency Loan shall mean each calendar year immediately
following the end of the immediately preceding Year and shall be numbered consecutively
thereafter. Not later than April 1 each year, commencing with the April 1 immediately following
Year I, Maker shall calculate its Residual Receipts, as defined herein, for such Year, and pay to
Lender: (i) for Years 1-30, fifty percent (50%) of the Residual Receipts; and (ii) for Years 31-54,
75% of the Residual Receipts.
(b) Fifty-five (55) years from the date the Improvements are placed in service, when all
principal and accrued interest shall be due and payable.
(c) Concurrently with the refmancing of any loan or other obligation secured all or in
part by the Property.
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(d) Acceleration of this Note pursuant to the provisions of Paragraph 4 of this Note, when
all principal and accrued interest shall be due and payable.
(e)
Property .
Any sale, transfer, conveyance or further encumbrance of all or any part of the
"Residual Receipts" shall mean Gross Income less Operating Expenses, calculated on a
calendar year basis, as provided herein. All calculations of Residual Receipts shall be subject to
verification and approval by the Lender.
"Gross Income" shall mean the gross rental income from all residential and non-residential
components of the Project, and any other income to Maker derived from the ownership, operation
and management of the Property.
"Operating Expenses" shall mean actual, reasonable and customary costs, fees and expenses
directly attributable to the operation, maintenance, taxes and management of the Project and the
Property, to the extent approved by Lender in Maker's annual operating budget, expressly including,
but not limited to, the following: required debt service payments on any loan permitted to be secured
by the Property that is senior to the Deed of Trust, scheduled deposits to reserves, as approved by
Lender, a reasonable property management fee in an amount not to exceed 5% of Gross Income in
anyone year, the Deferred Developer Fee (which shall be paid in full on or before December 31,
2020, and shall not exceed approximately $228,000 in the aggregate), investor limited partner asset
management fees (which shall not exceed $5,000.00 the first year after Project completion and shall
not increase by more than 3.5% any year thereafter), and general partner management fees (which
shall not exceed $12,000.00 the first year after Project completion and shall not increase by more
than 3.5% any year thereafter).
Maker shall annually provide Lender, on April 1 , commencing with the April 1 immediately
following the calendar year in which the Improvements are placed in service, and each year
thereafter during the term of this Note, a Residual Receipts report for the calendar year ending the
immediately previous December 31, which provides the basis for Maker's calculation of the
payment or nonpayment of Residual Receipts to Lender.
This Note may be prepaid in whole or in part at any time and, from time to time, without
notice or penalty. Any prepayment shall be allocated first to unpaid interest and then to principal.
Should the undersigned sell, convey, transfer, further encumber, or dispose of the Property described
in the Deed of Trust securing this Note, or any part of it, or any interest in it, without first obtaining
the written consent of Lender, or the then holder of this Note, which consent shall be granted or
withheld in the sole discretion of the Lender, then all obligations secured by this Note may be
declared due and payable, at the option of Lender, or the then holder of this Note until this Note is
paid in full. Lender reserves the right to approve all sales, transfers, conveyances, additional
encumbrances, or dispositions of the real property, which approval shall not be unreasonably
withheld, conditioned or delayed. Consent to one transaction of this type will not constitute a waiver
of the right to require consent to future or successive transactions. If such a sale, transfer, further
encumbrance, disposition, conveyance or transfer is approved by Lender, then upon the sale,
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transfer, further encumbrance, conveyance, transfer all accrued but unpaid interest on this Note shall
be paid to Lender, at Lender's option.
3. Security for Note.
This Note is secured by the Deed of Trust of even date herewith executed by Maker, which
creates a lien on that certain real property described therein and by the Loan Documents, including
the Security Agreement.
4. Acceleration UDon Default.
In the event of any default under the terms of this Note, the Loan Agreement, the Deed of
Trust, the Security Agreement, or the Declaration of Covenants and Restrictions, or any prior or
subsequent loans, notes and/or deed of trust, at the option of the holder of this Note, and after written
notice to Maker providing Maker with thirty (30) days in which to cure any default, all principal and
interest due under this Note and the Note shall immediately become due and payable, without further
notice. Failure to exercise such option shall not constitute a waiver of the right to exercise it in the
event of any subsequent default. Without limiting any other events of default contained herein, or in
any of the Loan Documents, the failure to complete construction of the Project to the satisfaction of
Lender on or before December 31,2009, shall be considered an event of default, entitling the Lender
to accelerate the payment of principal and interest hereunder, as provided in this Section 4. Time is
of the essence.
5. Costs Paid bv Maker.
Maker agrees to pay the following costs, expenses, and attorneys' fees paid or incurred by
the holder of this Note, or adjudged by a court: (a) reasonable costs of collection, costs, and
expenses, and attorneys' fees paid or incurred in connection with the collection or enforcement of
this Note, whether or not suit is filed; and (b) costs of suit and such sum as the court may adjudge as
attorneys' fees in any action to enforce payment of this Note or any part of it.
6. Payment and Interest Calculation.
Principal and interest shall be payable in lawful money of the United States of America.
Interest shall be computed based on a 360-day year and 30-day month. Payments shall be applied to
interest first and then to any unpaid principal balance.
7. Incorooration ofthe Loan Al!:reement.
The provisions of the Loan Agreement are expressly incorporated in this Note by this
reference.
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8. Waiver.
Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor
and nonpayment of this Note, and expressly agrees that, without in any way affecting the liability of
Maker hereunder, Lender may extend any maturity date or the time for payment of any installment
due hereunder, accept additional security, release any party liable hereunder and release any security
now or hereafter securing this Note. Maker further waives, to the full extent permitted by law, the
right to plead any and all statutes oflimitations as a defense to any demand on this Note, or on any
deed of trust, security agreement, guaranty or other agreement now or hereafter securing this Note.
9. Recourse Durin!!: Construction and Non-Recourse Mter Filin!!: of Notice of Completion.
(a) Prior to the timely issuance of the notice of completion for all units within the
Project, in any action brought to enforce the obligations of Maker under this Note or the Loan
Documents, the judgment or decree shall be enforceable against Maker, in addition to any collateral
security for the payment of this Note, and Lender may seek any deficiency judgment against Maker.
(b) Following the timely completion of the construction of the Project, as defined in the
Loan Agreement, measured by the timely filing of a Certificate of Occupancy, nothing contained
herein shall be deemed to cause Maker (or any of its partners, or any of their respective directors,
officers, employees, partners, principals or members) personally to be liable for any of its
obligations evidenced hereby, and the Agency shall not seek any personal or deficiency judgment on
such obligations, and the sole remedy of the Agency with respect to repayment of the loan evidenced
by this Note shall be against the Property.
(c) Notwithstanding Section 9(b), above, Maker shall indemnify, defend, protect and
hold Lender harmless from and against any and all loss, damage, liability, action, cause of action,
cost or expense (including, without limitation, reasonable attorneys' fees and expenses) incurred by
Lender as a result of any (i) fraud or material misrepresentation under or in connection with the Loan
or any Loan Document; (ii) intentional bad faith waste of the real property more particularly
described in the Deed of Trust; (iii) losses resulting from Maker's failure to maintain insurance as
required under the Deed of Trust; and (iv) misapplication of any rents, security deposits, insurance
proceeds, condemnation awards or any other proceeds derived from the collateral security in a
manner prohibited by the Loan Documents. Lender shall promptly provide Maker with written
notice of any event for which Maker has an indemnification obligation as provided in this Paragraph
9(c).
(d) Maker's obligation to indemnify the Lender as aforesaid shall be personal, recourse
obligations of Maker and in the event of any breach of such obligations, Lender shall have the right
to proceed directly against Maker to recover any and all losses, damages, liabilities, actions, causes
of action, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses)
resulting from such breach and the right to bring any action and to institute any proceedings to
obtain a deficiency judgment in or following after foreclosure for any and all losses, damages,
liabilities, actions, causes of action, costs and expenses (including without limitation reasonable
attorneys' fees and expenses) resulting from such breach.
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10. Late Charl!:e.
In addition to the foregoing, if any installment due hereunder is not paid within fifteen (15)
days from the date due, Maker promises to pay a "late charge" of five percent (5%) of the
installment so overdue to defray the expense incident to handling any such delinquent payment or
payments.
11. Severability.
If any provision of this Note is determined to be void by court of competent jurisdiction, such
determination shall not affect any other provision of this Note, and such other provisions shall
remain in full force and effect.
12. Non-Waiver.
No delay in demanding or failure to demand performance hereunder shall constitute a waiver
by Holder of its right to subsequently demand such performance or to exercise any remedies for any
default hereunder. Further, in order to be effective, any waiver of any of Lender's rights and
remedies hereunder shall be expressed in a writing signed by Lender. Further waiver by Lender of
any right hereunder shall not constitute a waiver of any other right, including but not limited to the
right to exercise any and all remedies for a different or subsequent event of default hereunder.
13. Reolacement Note.
The undersigned agrees that, in the event that this Note shall become lost or stolen, upon
request of Lender, the undersigned shall execute a replacement Note incorporating the terms hereof,
provided that Lender shall furnish a written agreement to indemnify the undersigned against all
losses, costs, and damages arising from a duplicative demand for payment under this Note.
14. Internretation.
This Note shall be governed and interpreted in accordance with applicable California law.
15. No Conversion to Condominiums.
Maker agrees that Maker shall not, and shall not allow any other person to, during the term of
the Declaration, cause all or any portion of the Property and/or the Project to be converted to
condominiums or to otherwise allow a condominium map or condominium plan to be recorded or
filed against all or any portion of the Property and/or the Project. Maker further agrees that the
conversion of all or any portion of the Property or the Project to condominiums and/or the
recordation or filing of a condominium map or condominium plan against all or any portion of the
Property and/or the Project during the term of the Declaration, shall be a breach of this Note, the
Declaration, the Loan Agreement and the Deed of Trust, entitling the Lender to immediately
exercise any and all of its rights and remedies under this Note, the Declaration, the Loan Agreement
and the Deed of Trust, including without limitation acceleration of this Note and foreclosure under
the Deed of Trust.
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16. Sil!Dature Authoritv.
All individuals signing this Note for a party which is a corporation, limited liability
company, partnership or other legal entity, or signing under a power of attorney, or as a trustee,
guardian, conservator, or in any other legal capacity, covenant to the Lender that they have the
necessary capacity and authority to act for, sign and bind the respective entity or principal on whose
behalf they are signing.
Maker:
Los Vecinos, L.P., a California limited partnership
By: Wakeland Los Vecinos, LLC, a California limited liability company
Its: Managing General Partner
By: Wakeland Housing and Development Corporation,
a California nonprofit public benefit corporation
Its: Manr' and Member.
By: ~1-.~/
Ke1meth L. Sauder
President and CEO
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Exhibit "C"
Deed of Trust
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NO CHARGE ON TillS DOCUMENT
PER CALIFORNIA GOVERNMENT
CODE SECTION 6103
Recording Requested By
And When Recorded Mail To:
City Clerk
City ofChula Vista
276 Fourth Avenue
Chula Vista, CA 91910
DEED OF TRUST
TillS DEED OF TRUST is made as of this _ day of ,2008, by Los Vecinos,
L.P., a California lirnited partnership ("Trustor"), whose address is clo Wakeland Housing and
Development Corporation, 1230 Columbia Street, Suite 950, San Diego, California 92101,
Attention: Kenneth L. Sauder, and Chicago Title Company ("Trustee") and the Redevelopment
Agency of the City of Chula Vista ("Beneficiary"), whose address is clo City of Chula Vista,
Community Development Department, 276 Fourth Avenue, Chula Vista, California, 91910.
TRUSTOR HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with
power of sale, all that property in the City of Chula Vista, County of San Diego, State of California,
described as:
(See Legal Description - Exhibit "A")
FOR THE PURPOSE OF SECURING:
(I) Payment of the indebtedness evidenced by a promissory note of even date herewith executed
by Trustor, in the principal sum of Five Million Six Hundred Eighty Thousand and Noll 00 Dollars
($5,680,000.00), and any renewal, extension, or modification of the promissory note (the "Note");
(2) Any additional sums and interest that may hereafter be loaned to the then record owner of the
Property by Beneficiary, when evidenced by another note or notes reciting that it or they are so
secured;
(3) The performance of each agreement contained in this Deed of Trust, the terms being
synonymous, and the Note referenced in Paragraph (I) above;
(4) The performance of each agreement of Trustor under that certain Construction and
Permanent Financing Loan Agreement ("Loan Agreement") of even date herewith, by and between
Trustor and Beneficiary on file in the Office of Beneficiary; and
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(5) The performance of each agreement and covenant of Trustor under that certain Declaration
of Covenants, Conditions and Restrictions ("Restrictions") of even date herewith and recorded
concurrently herewith affecting the Property.
A. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES:
Maintenance and Repair
(I) To keep the Property in good condition and repair; not to remove or demolish any buildings
on the Property; to complete or restore promptly and in good and workmanlike manner any building
that may be constructed, damaged, or destroyed on the Property; to pay when due all claims for labor
performed and materials furnished for the Property; to comply with all laws affecting the Property or
requiring any alterations or improvements to be made on the Property; not to commit or permit waste
of the Property; not to commit, suffer, or permit any act upon the Property in violation oflaw; and to
cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the
Property may be reasonably necessary.
Fire Insurance
(2) To provide, maintain, and deliver to Beneficiary fire insurance satisfactory to and with loss
payable to Beneficiary as its interest may appear. Subject to the rights of any senior lenders, the
amount collected under any fire or other insurance policy may be applied by Beneficiary upon any
indebtedness secured by this Deed of Trust and in any order determined by Beneficiary, or at the
option of Beneficiary the entire amount so collected or any part of that amount may be released to
Trustor. This application or release shall not cure or waive any default or notice of default under
this Deed of Trust or invalidate any act done pursuant to such a notice. Notwithstanding the
foregoing, in the event of any fire or other casualty to the Property, Trustor shall have the right to
rebuild the Property, and to use all available insurance proceeds therefor, provided that (a) such
proceeds are sufficient to rebuild the Property in a manner that provides adequate security to
Beneficiary for repayment of the indebtedness secured hereby or if such proceeds are insufficient
then Trustor shall have funded any deficiency, (b) Beneficiary shall have the right to approve (which
shall not be unreasonably withheld or delayed) plans and specifications for any major rebuilding and
the right to approve (which shall not be unreasonably withheld or delayed) disbursements of
insurance proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no
material default then exists hereunder or under the Note. If the casualty affects only part of the
Property and total rebuilding is not feasible, then proceeds may be used for partial rebuilding and
partial repayment of the indebtedness secured hereby in a manner that provides adequate security to
Beneficiary for repayment of the remaining indebtedness secured hereby.
Defense of Security
(3) To appear in and defend any action or proceeding purporting to affect the security of this
Deed of Trust or the rights or powers of Beneficiary , or Trustee; and to pay all costs and expenses,
including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to
foreclose this Deed of Trust.
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Payment of Liens and Taxes
(4) To pay, at least ten (10) days before delinquency, all taxes and assessments affecting the
Property, including assessments on appurtenant water stock, all encumbrances, charges, and liens,
with interest, on the Property or any part of the Property, which appear to be prior or superior to this
Deed of Trust; and all costs, fees, and expenses of this Trust. If Trustor fails to make any payment
or to do any act as provided in this Deed of Trust, then Beneficiary or Trustee may (but is not
obligated to) make the payment or do the act in the required manner and to the extent deemed
necessary by Beneficiary or Trustee to protect the security of this Deed of Trust. The performance
by Beneficiary or Trustee of such an act shall not require notice to or demand upon Trustor and shall
not release Trustor from any obligation under this Deed of Trust. Beneficiary or Trustee shall also
have the following related rights and powers: to enter upon the Property for the foregoing purposes;
to appear in and defend any action or proceeding purporting to affect the security of this Deed of
Trust or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest, or compromise any
encumbrance, charge, or lien that in the judgment of either appears to be prior or superior to this
Deed of Trust; to employ counsel; and to pay necessary expenses and costs, including reasonable
attorneys' fees.
Reimbursement of Costs
(5) To pay immediately and without demand all sums expended by Beneficiary or Trustee
pursuant to this Deed of Trust, with interest from date of expenditure at the amount allowed by law
in effect at the date of this Deed of Trust, and to pay any amount demanded by Beneficiary (up to the
maximum allowed by law at the time of the demand) for any statement regarding the obligation
secured by this Deed of Trust.
(6) That it will pay the Note at the time and in the manner provided therein.
(7) That it will not permit or suffer the use of any of the Property for any purpose other than the use
for which the same was intended at the time this Deed of Trust was executed.
(8) That the Note, the Loan Agreement, and the Restrictions are incorporated herein by reference
and made a part of this Deed of Trust, although not attached. Copies are on file in the office of the
Beneficiary .
(9) To perform, in a timely manner, each agreement and covenant by and between Trustor on any
and all notes, loans and deeds of trust that are senior and/or junior to this Deed of Trust. A default in
any of these obligations and the expiration of any applicable notice or cure period shall constitute a
default under this Deed of Trust.
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B. THE PARTIES AGREE THAT:
Condemnation Award
(10) Any award of damages in connection with any taking or condemnation, or for injury to the
Property by reason of public use, or for damages for private trespass or injury to the Property, is
hereby assigned and shall be paid to Beneficiary (subject to the rights of any senior lenders), as its
interest may appear as further security for all obligations secured by this Deed of Trust. Upon
receipt of such proceeds, Beneficiary may hold the proceeds as further security, or apply or release
them in the same manner and with the same effect as provided in Section 2 ofthis Deed of Trust for
the disposition of proceeds of fire or other insurance.
Waiver of Late Payments
(11) By accepting payment of any sum secured by this Deed of Trust after its due date,
Beneficiary does not waive its right either to require prompt payment when due of all other sums so
secured or to declare default for failure to pay any indebtedness secured by this Deed of Trust.
Trustee's Powers
(12) Upon written request of Beneficiary and presentation of this Deed of Trust and the Note for
endorsement, Trustee may (a) reconvey all or any part of the Property; (b) consent to the making and
recording, or either, of any map or plat of all or any part of the Property; (c) join in granting any
easement on the Property; or (d) join in or consent to any extension agreement or any agreement
subordinating the lien, encumbrance, or charge of this Deed of Trust. Trustee need not provide
Trustor with notice before taking any of the foregoing actions, and shall not be liable for the proper
performance of the act. The exercise by Trustee of any of the foregoing powers shall not affect the
personal liability of any person for payment of the indebtedness secured by this Deed of Trust, or the
lien of this Deed of Trust on the remaining property as security for the repayment of the full amount
secured by this Deed of Trust.
Full Reconveyance
(13) Upon written request of Beneficiary stating that all sums secured by this Deed of Trust have
been paid, surrender of this Deed of Trust, the Note, and any other notes secured by this Deed of
Trust to Trustee for cancellation and retention, and payment of Trustee's fees and charges, Trustee
shall reconvey, without warranty, the Property then subject to this Deed of Trust. The recitals in the
reconveyance shall be conclusive proof of the truthfulness of the recitals. The grantee in the recon-
veyance may be described as "the person or persons legally entitled thereto." Five years after
issuance of the full reconveyance, Trustee may destroy the Note and this Deed of Trust, unless
directed in the request to retain them.
Assignment of Rents
(14) As additional security, Trustor hereby gives to and confers upon Beneficiary the right,
power, and authority during the continuance of these Trusts, to collect the rents, issues, and profits
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of the Property, but reserves the right, prior to any default, which shall continue beyond any
applicable notice and cure periods, by Trustor in payment of any indebtedness secured by this Deed
of Trust or in the performance of any agreement under this Deed of Trust, to collect and retain these
rents, issues, and profits as they become due and payable. Upon any such default, Beneficiary may,
without notice and without regard to the adequacy of the security for the indebtedness secured by
this Deed of Trust, either personally or by agent or court-appointed receiver, do the following: enter
upon and take possession of the Property or any part of the Property; sue for or otherwise collect all
rents, issues, and profits, including those past due and unpaid; and apply these rents, issues, and
profits, less costs and expenses of operation and collection (including reasonable attorneys' fees),
upon any indebtedness secured by this Deed of Trust, in any order determined by Beneficiary. The
exercise of the foregoing rights by Beneficiary shall not cure or waive any default or notice of
default under this Deed of Trust or invalidate any act done pursuant to such a notice.
Default in Foreclosure
(15) Upon default by Trustor in the payment of any indebtedness secured by this Deed of Trust or
in the performance of any material obligation under this Deed of Trust, and the expiration of any and
all applicable notice or cure periods, Beneficiary may declare all sums secured by this Deed of Trust
immediately due and payable by delivering to Trustee a written declaration of default and demand
for sale and a written notice of default and election to sell the Property. Trustee shall cause the
notice of default and election to sell to be recorded. Beneficiary also shall deposit with Trustee this
Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this
Deed of Trust.
After the required time period has lapsed following the recordation of the notice of default, and after
notice of sale has been given as required by law, Trustee, without demand on Trustor, shall sell the
Property at the time and place specified in the notice of sale, either as a whole or in separate parcels,
and in any order determined by Trustee, at public auction to the highest bidder for cash in lawful
money of the United States, payable at the time of sale. Trustee may postpone sale of all or any
portion of the Property by public announcement at the time and place of sale, and from time to time
thereafter may postpone the sale by public announcement at the time fixed by the preceding
postponement. Trustee shall deliver to the purchaser at the auction its deed conveying the Property
sold, but without any covenant or warranty, express or implied. The recital in the deed of any matter
or fact shall be conclusive proof of the truthfulness ofthe recital. Any person, including Trustor,
Trustee, or Beneficiary, may purchase at the sale.
After deducting all costs, fees, and expenses of Trustee and Beneficiary under this paragraph,
including costs of procuring evidence of title incurred in connection with sale, Trustee shall apply
the proceeds of sale to payment of: all sums expended under the terms of this Deed of Trust, not
then repaid, with accrued interest at the amount allowed by law in effect at the date of this Deed of
Trust; all other sums then secured by this Deed of Trust; and the remainder, if any, to the person or
persons legally entitled to the remaining proceeds.
(16) Should the undersigned agree to or actually sell, convey, transfer, or dispose of, or further
encumber the real property described in this deed of trust securing the Promissory Note, or any part
of it, or any interest in it, without first obtaining the written consent of the Holder of the Note, then
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all obligations secured by the Note and trust deed may be declared due and payable, at the option of
the Holder. Consent to one transaction of this type will not constitute a waiver of the right to require
consent to future or successive transactions. Beneficiary shall not unreasonably withhold its consent
to a transfer to the General Partner of Trustor pursuant to the purchase option and right of first
refusal to be granted to the General Partner in Trustor's Partnership Agreement.
General Provisions
(17) This Deed applies to, inures to the benefit of, and binds all parties to this Deed of Trust and
their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term
"Beneficiary" shall mean the holder and owner, including pledgee, of the Note secured by this Deed
of Trust, whether or not named as a beneficiary in this Deed of Trust, and the heirs, legatees,
devisees, administrators, executors, and assigns of any such person. In this Deed, whenever the
context so requires, the masculine gender includes the feminine and/or neuter, and the singular
number includes the plural.
Acceptance by Trustee
(18) Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a
public record as provided by law. Trustee is not obligated to notify any party to this Deed of Trust
of pending sale under any other deed of trust or of any action or proceeding in which Trustor,
Beneficiary, or Trustee shall be a party unless brought by Trustee.
Substitution of Trustees
(19) Beneficiary, or any successor in ownership of any indebtedness secured by this Deed of
Trust, may from time to time, by written instrument, substitute a successor or successors to any
Trustee named in or acting under this Deed of Trust. The substitution instrument shall contain the
name of the original Trustor, Trustee, and Beneficiary under this Deed of Trust, the book and page
where this Deed is recorded, and the name and address of the new Trustee. When executed by
Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or
counties where the Property is situated, the substitution instrument shall be conclusive proof of
proper substitution of the successor Trustee or Trustees. Any successor Trustee or Trustees shall,
without conveyance from the predecessor Trustee, succeed to all its title, estate, rights, powers, and
duties.
Cumulative Powers and Remedies
(20) The powers and remedies conferred in this Deed of Trust are concurrent and cumulative to
all other rights and remedies provided in this Deed of Trust or given by law. These powers and
remedies may be exercised singly, successively, or together, and as often as deemed necessary.
Conclusiveness of Recitals
(21) The recitals contained in any reconveyance, trustee's deed, or any other instrument executed
by Trustee from time to time under the authority of this Deed of Trust or in the exercise of its
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powers or the performance of its duties under this Deed of Trust, shall be conclusive evidence of
their truth, whether stated as specific and particular facts, or in general statements or conclusions.
Further, the recitals shall be binding and conclusive upon Trustor, its heirs, executors, adminis-
trators, successors, and assigns, and all other persons.
Attorneys' Fees
(22) If any action is brought for the foreclosure of this Deed of Trust or for the enforcement of
any provision of this Deed of Trust (whether or not suit is filed), Trustor agrees to pay all costs and
expenses of Beneficiary and Trustee, including reasonable attorneys' fees; and these sums shall be
secured by this Deed of Trust.
Co-trustees
(23) If two or more persons are designated as Trustee in this Deed of Trust, any, or all, power
granted in this Deed of Trust to Trustee may be exercised by any of those persons, if the other
person or persons are unable, for any reason, to act. Any recital of this inability in any instrument
executed by any of those persons shall be conclusive against Trustor and Trustor's heirs and assigns.
Request for Notices of Default and Sale
(24) In accordance with Section 2924b of the California Civil Code, request is hereby made that a
copy of any Notice of Default and a copy of any Notice of Sale under any Deeds of Trust executed
by Trustor, and recorded in the Official Records of San Diego County, California, in which
Beneficiary, is named as beneficiary, be mailed to:
City of Chula Vista
Redevelopment and Housing
276 Fourth Avenue
Chula Vista, California, 91910
NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the
address contained in this recorded request. If your address changes, a new request must be
recorded.
The undersigned Trustor requests that a copy of any notice of default and of any notice of sale under
this Deed of Trust be mailed to Trustor at the address of Trustor set forth above.
(25) Trustor shall permit Beneficiary and its agents or representatives, to inspect the Property at any
and all reasonable times, upon prior written notice (unless Trustor is in default under any of the Loan
Documents). Inspections shall be conducted so as not to interfere with the tenants' use and
enjoyment of the Property and the general operation of the Property.
(26) The Property shall be subject to the restrictions set forth in the Loan Agreement and
Restrictions and Trustor hereby consents to such restrictions and agrees to be bound thereby. Such
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restrictions shall be in addition to and not in limitation of the rights of Beneficiary expressly set forth
in this Deed of Trust.
(27) For purposes of this Deed of Trust, "Hazardous Materials" mean and include any hazardous,
toxic or dangerous waste, substance or material including, without limitation, flammable explosives,
radioactive materials, asbestos, hazardous wastes, toxic substances and any materials or substances
defined as hazardous materials, hazardous substances or toxic substances in (or for purposes of) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as
amended (42 D.S.C. S9601, et seq.), the Hazardous Materials Transportation Act (49 D.S.C. S1801,
et seq.), the Resource Conservation and Recovery Act (42 D.S.C. S6901, et seq.), and those
substances defined as hazardous wastes in S25l17 of the California Health and Safety Code or as
hazardous substances in S253l6 of the California Health and Safety Code or in any regulations
promulgated under either such law, any so-called "Superfund" or "Superlien" law, or any other
federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter in effect.
(28) In addition to the general and specific representations, covenants and warranties set forth in the
Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous
Materials, as follows:
(a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever
caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed
of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or
any property adjacent thereto, has ever been used (whether by Trustor or, to the best knowledge of
Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent
or temporary) for any Hazardous Materials. "Hazardous Materials" for purposes of this Paragraph
28(a) shall not include substances typically used in the ordinary course of developing, operating and
maintaining apartment complexes, provided that such substances are used in accordance with all
applicable laws.
(b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors
and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and
against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every
kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers,
employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence
or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or
under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any
Hazardous Materials from the Property (including, without limitation, any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called
"Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct
concerning any Hazardous Materials) regardless of whether or not caused by or within the control of
Trustor. The foregoing indemnification shall not apply to any liability resulting from (i) an event
that occurs after a transfer of the Property due to any foreclosure sale Gudicial or nonjudicial) or a
deed in lieu offoreclosure, or (ii) acts or omissions of Beneficiary or its agents.
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(c) Trustor has not received any notice of (i) the happening of any event involving the
use, spillage, discharge, or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting
Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions,
water discharges, noise emissions or any other environmental, health or safety matter affecting
Trustor or the Property ("Environmental Complaint") from any person or entity, including, without
limitation, the United States Environmental Protection Agency ("EP A"). If Trustor receives any
such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter,
oral and written notice of same to Beneficiary.
(d) Without limitation of Beneficiary' s rights under this Deed of Trust, Beneficiary shall
have the right, but not the obligation, to enter onto the Property or to take such other actions as it
deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise
deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice
from any person or entity, including without limitation, the EP A, asserting the existence of any
Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true,
could result in an order, suit or other action against Trustor affecting any part of the Property by any
governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its
security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the
exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor
upon demand together with interest thereon at a rate equal to the highest rate payable under the note
secured hereby.
(e) The foregoing representation, covenants, indemnities and warranties shall be
continuing and shall be true and correct for the period from the date hereof to the release of this
Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action in
lieu thereof), and these representations, covenants, indemnities and warranties shall survive such
release.
(29) Each successor owner of an interest in the Property other than through foreclosure or deed in
lieu of foreclosure of an interest superior to this Deed of Trust, shall take its interest subject to this
Deed of Trust.
(30) This Deed of Trust shall be governed by and construed in accordance with the laws of the State
of California.
(31) If the Property is allocated to a low-income housing tax credits under the provisions of sections
17058 and 23610.5 of the Revenue and Taxation Code of State of California and under the Section
42 of the Internal Revenue Code of 1986, as amended ("Code") then the Property will be subject to
certain requirements of Section 42 of the Code, including, but not limited to Section 42(h)(6)( e )(ii),
which does not permit the eviction or termination of tenancy (other than for good cause) of an
existing tenant of any low-income unit or any increase in the gross rent with respect to such unit not
otherwise permitted under Section 42 for a period of three (3) years after the date the Property is
acquired by foreclosure or deed in lieu offoreclosure. Beneficiary acknowledges the provisions of
Section 42 of the Code and agrees that, if and to the extent applicable to Beneficiary in connection
with the Property, Beneficiary will comply therewith.
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(32) Trustor covenants by and for itself and any successors in interest that there shall be no
discrimination against or segregation of, any person or group of persons on account of race, color,
creed, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status,
source of income or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property, nor shall Trustor or any person claiming under or through it establish or
permit any such practice or practices of discrimination or segregation of any person or group of
persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government
Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (P) of Section 12955, and Section 12955.2 of the Government Code, with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Property. The foregoing covenants shall run with the land.
(33) Trustor shall refrain from restricting the rental, lease and sale of the Property and any
dwelling unit thereon on the basis of race, color, creed, religion, sex, sexual orientation, marital
status, national origin, ancestry, familial status, source of income or disability of any person. All
such deeds, leases or contracts for the rental, lease or sale of the Property or any dwelling unit, shall
contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
(a) Deeds. In deeds "The grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination against
or segregation of, any person or group of persons on account of race, color, religion, sex, sexual
orientation, disability, medical condition, familial status, source of income, marital status, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
land herein conveyed, nor shall the grantee itself or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees in the land herein conveyed. The foregoing covenants shall run with the land."
(b) Leases. In leases "The lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, and this lease is made and accepted upon
and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, religion, sex, sexual orientation, disability,
medical condition, familial status, source of income, marital status, national origin or
ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or
enjoyment of the land herein leased, nor shall lessee itself, or any person claiming
under or through it, establish or permit such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of
tenants, lessees, sublessees, subtenants or vendees in the land herein leased."
(c) Contracts. In contracts for the rental, lease or sale of the Property or any dwelling
unit "There shall be no discrimination against or segregation of any person or group of persons on
account of race, color, religion, sex, sexual orientation, disability, medical condition, familial status,
source of income, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use,
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occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming
under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the land."
(34) This Deed of Trust shall be subordinated to the deeds of trust and security instruments
securing the Construction Loan and Bank Loan, as such terms are defined in the Loan Agreement
(35) All individuals signing this Deed of Trust for a party which is a corporation, a partnership or
other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in
any other legal capacity, covenant to the Beneficiary that they have the necessary capacity and
authority to act for, sign and bind the respective entity or principal on whose behalf they are signing.
TRUSTOR:
Los Vecinos, L.P., a California limited partnership
By: Wakeland Los Vecinos, LLC a California limited liability company
Its: Managing General Partner
By: Wakeland Housing and Development Corporation,
a California nonprofit public benefit corporation
Its: M~er and Member
By:f~ L~
Kenneth L. Sauder
President and CEO
BENEFICIARY:
Redevelopment Agency of the City of Chula Vista
By:
David Garcia, Executive Director
Approved as to form:
By:
Ann Moore, City Attorney
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Exhibit "D"
Declaration of Covenants, Conditions and Restrictions
37
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NO CHARGE ON TillS DOCUMENT
PER CALIFORNIA GOVERNMENT
CODE SECTION 6103
Recording Requested By
And When Recorded Mail To:
City Clerk
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS
(TENANT RESTRICTIONS)
TillS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
("Declaration") is made as of this _ day of ,2008, by Los Vecinos, L.P. a
California limited partnership ("Declarant") in connection with that certain parcel of real property
("Property") located in the City ofChula Vista ("City"), County of San Diego, California, described
in Exhibit "A" attached hereto and incorporated herein by reference.
RECITALS
A. The Property is generally located at 1501 Broadway in Chula Vista, California and is
located within the boundaries of the Merged Chula Vista Redevelopment Project Area. Declarant
has applied for and the City has granted a density bonus (the "Density Bonus") pursuant to the
applicable provisions of City Ordinance Number 3077, which allow Developer to construct forty-
two (42) total dwelling units on the Property. In order to obtain the Density Bonus, Declarant has
agreed to restrict the rent and occupancy offorty-two (42) total dwelling units on the Property, as set
forth herein. Declarant acknowledges that the Density Bonus would not be granted in the absence of
Declarant's express covenant to restrict the usage of the Property, as set forth herein. Declarant has
acquired title to the Property and will be constructing a forty-two (42) unit housing project, with the
aid ofa loan (the "Loan") obtained from the Redevelopment Agency of the City ofChula Vista's
("Agency") Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the
California Health and Safety Code. One (1) of the forty-two (42) units will be occupied as
manager's unit, and will not be income or rent restricted.
B. Concurrently with the recordation of this Declaration, Agency is funding the Loan as
described in the Construction and Permanent Financing Loan Agreement of even date herewith
("Loan Agreement"). The Loan is to assist Declarant in the construction and operation of the
Property and the Affordable Units and is secured by a deed of trust ("Trust Deed"). The Density
Bonus, Loan Agreement and Trust Deed were conditioned in part upon the recordation of a
document setting forth certain restrictions upon the use and sale of the Property.
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NOW, THEREFORE, Declarant hereby declares that the Property shall be subject to the
covenants, conditions and restrictions set forth below:
1. Restrictive Covenants. Declarant agrees and covenants on behalf of itself and its successors
and assigns, and each successor in interest to the Property, that at all times during the term of this
Declaration set forth herein forty-one (41) units at the Property shall be set aside and reserved as
"Affordable Units." As used herein the term "Affordable Units" shall refer to those residential units
at the Property which are owned or held available strictly in accordance with the terms and
conditions set forth below. One unit shall be set aside as a manager's unit and will not be income or
rent restricted.
(a) Affordable Unit Restrictions. The following restrictions shall apply to the forty-one
(41) Affordable Units. The restrictions set forth in the Table below shall establish the maximum
rental rate, from which a utility allowance as approved by Agency Executive Director shall be
deducted:
TABLE 1: RENT AND INCOME RESTRICTION CRITERIA
NUl\.1BER OF MAXIMUM%OF MAXIMUM MONTHLY RENTS AS YEARS OF RENT
UNIT AFFORDABLE AREA MEDIAN PERCENT AGE OF AREA MEDIAN RESTRIcnON
DESCRIPTION UNITS INCOME OF INCOME ADJUSTED FOR F AMIL Y SIZE
ELIGIBLE TENANTS APPROPRlATE FOR THE UNIT
IbrlIb. 30% of AMI 1/12''' of30% of30% of AMI 55
ZbrII b. Z 30% of AMI 1/1Z~ of 30% of 30% of AMI 55
3br/Zb. Z 30% of AMI 1/1Z~ of30% of 30% of AMI 55
Ibr/lb. Z 45% of AMI IIIZ~ of30% of 45% of AMI 55
Zbr/lb. Z 45% of AMI 1/1Z~ of 30% of 45% of AMI 55
3br/Zb. 3 45% of AMI I/IZ'" of 30% of 45% of AMI 55
I brII b. 6 50% of AMI I/IZ'" of 30% of 50"/0 of AMI 55
Zbr/lb. 8 50% of AMI I/IZ'" of30% of 50% of AMI 55
3br/Zb. 7 50% of AMI I /IZ'" of 30% of 50% of AMI 55
IbrlIb. 3 60"/0 of AMI I/IZ'" of30% of 60% of AMI 55
Zbr/lb. 3 60% of AMI 1/12'" of30% of 60% of AMI 55
3br/Zb. Z 60% of Al'v1I 1/IZ'" of30% of 60% of AMI 55
Mao.ger N/A N/A
TOTAL 4Z
AFFORDABLE
UNITS
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(b) "Eligible Tenants" are those tenants whose aggregate gross annual income does not
exceed the respective percentages set forth in Table 1, above of annual median income, as adjusted
for family size. All the units except the manager's unit shall be Affordable Units as referenced in the
Table. For purposes of this Declaration, the current annual median income shall be the median
income defined by the State Department of Rousing and Community Development ("RCD") as the
then current median income for the San Diego Standard Metropolitan Statistical Area, established
periodically by RCD, as adjusted for family size. Exhibit D-l sununarizes Income and Rent
Restrictions; Exhibit D-2 is the current utility allowance schedule. The rents and the occupancy
restrictions shall be deemed adjusted, from time to time, in accordance with any adjustments that are
authorized by HCD or any successor agency. In the event HCD ceases to publish an established
median income as aforesaid, Agency may, in its sole discretion, use any other reasonably com-
parable method of computing adjustments in area median income. Notwithstanding anything
contained herein to the contrary, to the extent any other restrictions applicable to the Property limit
the rent and/or occupancy of the Property, the most restrictive shall apply.
(c) An adjustment of rents may be performed annually in accordance with the rents
contained in the applicable Agency or HCD rent schedules published by the Agency for the affected
unit type and updated from time to time. Further, the rents charged shall be further limited as set
forth in Section 14, hereof.
2. Affordable Marketing Plan Compliance. Declarant shall submit for the approval of the
Agency a management and marketing plan for rental of all of the Affordable Units. Declarant's
marketing of the Affordable Units shall be in compliance with federal and state fair housing laws.
Such marketing plan shall include a plan for publicizing the availability of the Affordable Units
within the City, such as notices in any City-sponsored newsletter, advertising in local newspapers
and notice in City offices. The marketing plan shall require Developer to obtain from the Agency
the names of low-income households who have been displaced by redevelopment projects in the
City, and notice persons on such list of the availability of the Affordable Units, prior to undertaking
other forms of marketing. The marketing plan shall provide that the persons on such list of
displaced persons be given not fewer than fifteen (15) days after receipt of such notice to respond by
completing application forms for rental of the Affordable Units. All tenants of each Affordable Unit
shall meet the income requirements set forth herein and tenancy and eligibility shall be in
conformance with the terms and standards set forth in the approved management plan and
affirmative marketing plan. Selection of residents shall be made randomly within the following
levels of priority, rather than on a first-come, first-serve basis:
(a) First Priority. Households which are displaced from their primary residence as a
result of an action of City or Agency, a condominium conversion involving the household's
residence, expiration of affordable housing covenants applicable to such residence, or closure of aomobile home or trailer park community in which the household's residence was located, and the
household resided in such housing as the household's primary place of residence for at least two
years prior to such action or event.
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(b) Second Priority. Households which meet one of the following criteria: (i) households
which are displaced from their primary residence as a result of an action of City or Agency, a
condominium conversion involving the household's residence, expiration of affordable housing
covenants applicable to such residence, or closure of a mobile home or trailer park community in
which the household's residence was located, and the household resided in such housing as the
household's primary place of residence for at least one year but less than two years prior to such
action or event; (ii) households with at least one member who resides within the City, as that
person's primary place of residence; (iii) households with at least one member who works or has
been hired to work within the City, as that person's principal place of full-time employment; or (iv)
households with at least one member who is expected to live within the City as a result of a bona
fide offer of employment within the City.
(c) Third Prioritv. Other Low Income Households who do not meet the criteria for first
priority or second priority above.
(d) No Discrimination. No preference herein may be used for the purpose or effect of
delaying or otherwise denying admission to the Property or unit based on the race, color, ethnic
origin, gender, religion, disability, or age of any member of an applicant household.
(e) Use of Standard Screening Criteria. Nothing herein shall restrict Declarant from screening
tenants through the application of criteria which is lawful and customary in apartment management
in San Diego County and otherwise consistent with federal, state and local regulations and
restrictions related to the financing for the Project.
3. Determination; Annual Requalification. Declarant shall obtain from each person to whom
Declarant leases an Affordable Units a "Supplemental Rental Application" ("Application") in the
form of Exhibit "B", attached hereto (or such other form as Agency may from time to time adopt).
Declarant shall be entitled to rely on the Application and supporting documents thereto in
determining whether a household is an "Eligible Tenant". Declarant shall retain the Application and
supporting documents for a period of not less than three (3) years after the household ceases to
occupy an Affordable Unit. Copies of the most recent Application commencing of continuing
occupancy of an Affordable Unit shall be attached to the semi-annual report to be filed with the
Agency. An Affordable Unit occupied by an Eligible Tenant, shall be treated as an Eligible Tenant
until a recertification of such tenant's income demonstrates that such tenant no longer qualifies as an
"Eligible Tenant."
4. Relationship with Declarant. The term "Eligible Tenant" shall not include Declarant or any
individuals who are partners or shareholders in Declarant or in any entity having an interest in
Declarant or in the Property, or officer, employee, agent or consultant of the owner, developer or
sponsor.
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5. No Student Dependents. No Affordable Unit shall be occupied or leased to any person who
is a full-time student, or a household comprised exclusively of persons who are full-time students,
unless such persons are married and eligible to file ajoint federal income tax return. The term "full-
time student" shall be defined as any person who will be or has been a full-time student during five
calendar months of the calendar year in question at an educational institution (other than a
correspondence school) with regular faculty and students and or a student dependent as defined in
the U.S. Internal Revenue Code, unless the taxpayer (upon whom the student in question is
dependent) resides in the same dwelling unit.
6. Income of Co-tenants, etc. The income of all co-tenants and/or non-dependent occupants
shall be taken into account in determining whether a household is an Eligible Tenant hereunder.
7. Over Income Tenants. In the event that a tenant who was properly certified as an Eligible
Tenant at the commencement of such tenant's occupancy ceases to be eligible, for any reason other
than being over income, Declarant shall give sixty (60) days written notice to such tenant to vacate
the Affordable Unit. The vacated Affordable Unit shall thereafter be rented to an Eligible Tenant. A
tenant who occupies an Affordable Unit, who becomes over income at the time of recertification
shall be given one hundred eighty (180) days notice to vacate the Affordable Unit, effective from
and after the date of such failure to requalifY (i.e., the recertification date, provided the tenant was
properly certified originally). During the time the over-income tenant resides in the Affordable Unit,
the tenant shall continue to pay an amount that does not exceed the amount set forth in the Table in
Section lea). The tenant shall continue to be considered an "Eligible Tenant" until evicted.
Notwithstanding the foregoing, when a tenant occupies a unit subject to a regulatory agreement with
respect to the "Tax Credits," as such terms is defined in the Loan Agreement, the over income tenant
shall be permitted to continue to reside in the assisted unit at the reduced rental rate, unless the over-
income Tenant reaches one hundred and forty percent (140%) of the applicable income limit,
whereupon the Tenant shall be given one hundred eighty (180) days notice to vacate the affordable
unit, effective from and after the date of such income determination. The tenant shall continue to be
considered an "Eligible Tenant" until evicted, provided this continued occupancy complies with all
applicable tax-credit requirements. In the event of conflict between the over income regulations of
this Declaration and TCAC, the TCAC provisions shall apply.
8. Phvsical Condition of Affordable Units. After completion of the Affordable Units, Declarant
shall continually maintain the Affordable Units in a condition which satisfies the Housing Quality
Standards promulgated by HUD under its Section 8 Program, as such standards are interpreted and
enforced by Agency under its normal policies and procedures. Agency shall have the right to inspect
the Affordable Units from time to time, on reasonable notice and at reasonable times, in order to
verifY compliance with the foregoing maintenance covenant. Further, each Affordable Unit shall be
requalified annually, as to the foregoing maintenance covenant, as part of the annual tenant
requalification process described in Section 4 above. Any deficiencies in the physical condition of
an Affordable Unit shall be corrected by Declarant at Declarant's expense within thirty (30) days of
the identification of such deficiency by Agency and delivery of written notice of the same to
Declarant.
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9. Agencv Monitoring Functions. It is contemplated that, during the term of this Declaration,
Agency will perform the following monitoring functions: (a) preparing and making available to
Declarant any general information that Agency possesses regarding income limitations and
restrictions which are applicable to the Affordable Units; (b) reviewing the documentation submitted
by Declarant in connection with the annual certification process for Eligible Tenants described in
Section 3, above; and (c) inspecting the Affordable Units to verify that they are being maintained in
accordance with Section 9, above. Notwithstanding the foregoing description of Agency's functions,
Declarant shall have no claim or right of action against Agency based on any alleged failure to
perform such function, except that Declarant may reasonably rely upon Agency's tenant eligibility
determination.
10. Declarant Required to Pav Monitoring Fees. At close of escrow, Declarant shall pay Agency
a set-up fee of Two Thousand Seven Hundred Thirty Dollars ($2,730.00) which shall be paid by
Declarant to Agency within ten (10) days of written demand for the same. Thereafter, in each
subsequent year during the term of this Declaration, Declarant shall pay to Agency an annual
monitoring fee, in an amount equal to the set-up fee, increased by three percent (3%) cumulative
each year. The annual monitoring fee shall be paid to Agency annually within ten (10) days after
Agency provides a written invoice for the same. Failure to timely pay such fees shall constitute a
material default under the terms and conditions of the Loan Agreement and this Declaration. Both
the set-up fee and annual monitoring fee shall be paid to Agency as a consideration for the lending of
funds by Agency to Declarant.
II. Lease Provisions. Declarant agrees that it will include in all of its leases, and cause its
successors in interest to include in all of their leases, the following provision:
Lessee agrees, upon written request from the Landlord or the Redevelopment
Agency of the City of Chula Vista's ("Agency"), to certify under penalty of perjury
the accuracy of all information provided in connection with the examination or
reexamination of annual income of the tenant's household. Further, tenant agrees
that the annual income and other eligibility requirements are substantial and material
obligations of the tenancy and that the tenant will comply promptly with all requests
for information with respect to the tenancy from the Landlord and/or Agency.
Further, tenant acknowledges that tenant's failure to provide accurate information
regarding such requirements (regardless of whether such inaccuracy is intentional or
unintentional) or the refusal to comply with the request for information with respect
thereto, shall be deemed a violation of this lease provision, and a material breach of
the tenancy and shall constitute cause for immediate termination of the tenancy.
12. N on-Discrimination,.
(a) Obligation to Refrain from Discrimination. Declarant covenants by and for itself and
any successors in interest that there shall be no discrimination against or segregation of, any person
or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status,
national origin, ancestry, familial status, source of income or disability in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Declarant or any person
claiming under or through it establish or permit any such practice or practices of discrimination or
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segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d)
of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (P) of Section 12955, and Section 12955.2 of the
Government Code, with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Property or the rental, lease sale of the Property and
any dwelling unit thereon. The foregoing covenants shall run with the Property.
(b) Nondiscrimination Covenants. Declarant shall refrain from restricting the rental,
lease and sale of the Property and any dwelling unit thereon on the basis of race, color, creed,
religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of
income or disability of any person. All such deeds, leases or contracts shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
(1) Deeds. In deeds "The grantee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through. them, that there shall be no
discrimination against or segregation of, any person or group of persons on account of race, color,
religion, sex, sexual orientation, disability, medical condition, familial status, source of income,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure
or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under
or through it, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the
land."
(2) Leases. In leases "The lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease is made and accepted
upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, religion, sex, sexual orientation, disability,
medical condition, familial status, source of income, marital status, national origin or
ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or
enjoyment of the land herein leased, nor shall lessee itself, or any person claiming
under or through it, establish or permit such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of
tenants, lessees, sublessees, subtenants or vendees in the land herein leased."
(3) Contracts. In contracts "There shall be no discrimination against or
segregation of any person or group of persons on account of race, color, religion, sex, sexual
orientation, disability, medical condition, familial status, source of income, marital status, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
land, nor shall the transferee itself or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the
land."
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13. Successors Bound. Declarant covenants, for itself and its successors and assigns, not to sell,
transfer, assign or otherwise dispose of ownership of the Property, without the express written
consent of the Agency whose approval shall not be unreasonably withheld, conditioned or delayed,
as specified in Section 1.8 of the Loan Agreement. Any prospective purchaser, transferee or
assignee shall expressly promise in writing to be bound by all of the provisions hereof, including the
covenant in this Section 13 to require successors to expressly assume the obligations herein.- It is
expressly acknowledged that the covenants and restrictions set forth herein shall survive any
repayment of the Loan. Further, the obligations of Declarant hereunder shall be deemed
independent of Declarant's obligations under the Loan;
14. Maximum Rent To Be Collected bv Declarant. In no event, shall all of the rent, including
the portion paid by the Eligible Tenant and any other person or entity, collected by Declarant (the
"Total Rent") for any rent restricted unit exceed the amount of rent set forth in Table 1. Total Rent
includes all payments made by the Eligible Tenant and all subsidies received by Declarant. In the
case of persons receiving Section 8 benefits, who are Eligible Tenants, Declarant acknowledges that
it shall not accept any subsidy or payment that would cause the Total Rent received for any
restricted unit to exceed the maximum rents allowed in Table I, for any Affordable Unit. Should
Declarant receive Total Rent in excess of the allowable maximum rent set forth in Table I, Declarant
agrees to immediately notify Agency and reimburse Agency for any such overpayment. Acceptance
by Declarant or its successors in interest, of Total Rent in excess of the maximum rent set forth in
Table I shall constitute a material breach of this Declaration and the Loan Agreement.
IS. Cross Default: Construction and Occuoancv Schedule for Affordable Units. A default under
the Loan Agreement, including without limitation failure to make the annual Loan payments to
Agency referenced in the Loan Agreement, shall be a material default under this Declaration. The
Affordable Units shall be constructed and receive fmal inspection approval and shall be occupied by
Eligible Tenants in accordance with the timetable set forth in Section 1.24 of the Loan Agreement.
Time is of the essence in the construction and occupancy of the Affordable Units
16. Term. This Declaration and the covenants and restrictions contained herein shall be effective
upon the completion of the construction of the units and shall remain in full force and effect for a
period of fifty-five (55) years from their effective date. Completion of the Affordable Units shall
occur upon the filing or the issuance by a building official of the City of Chula Vista of a temporary
Certificate of Occupancy for all units at the Property.
17. Enforcement. Declarant expressly agrees and declares that Agency or any successor public
agency is a proper party and shall have standing to initiate and pursue any and all actions or
proceedings, at law or in equity to enforce the provisions hereof and/or to recover damages for any
default hereunder, notwithstanding the fact that such damages or the detriment arising from such
default may have actually been suffered by some other person or the public at large. Further,
Agency or any successor public agency shall be the proper party to waive, relinquish, release or
modify the rights, covenants, obligations or restrictions contained in or arising under this
Declaration.
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18. Attornevs' Fees. In the event that any litigation for the enforcement or interpretation of this
Declaration, whether an action at law or arbitration or any manner of non-judicial dispute resolution
to this Declaration by reason of the breach of any condition or covenant, representation or warranty
in this Declaration, or otherwise arising out of this Declaration, the prevailing party in such action
shall be entitled to recover from the other reasonable attorneys' fees to be fixed by the court which
shall render a judgment, as well as the costs of suit.
19. Severability. In the event that any provision or covenant of this Declaration is held by a
court of competent jurisdiction to be invalid or unenforceable, then it shall be severed from the
remaining portions of this Declaration which shall remain in full force and effect.
20. Covenants to Run With the Land. The covenants contained herein shall constitute
"covenants running with the land", and shall bind the Property and every person having an interest
therein during the term of this Declaration. Declarant agrees for itself and its successors that, in the
event that, for any reason whatsoever, a court of competent jurisdiction determines that the
foregoing covenants do not run with the land, such covenants shall be enforced as equitable
servitudes against the Property.
21. Recordation: Waiver and Amendment. This Declaration shall be recorded in the Office of
County Recorder of San Diego, California. No provision of this Declaration, or breach of any
provision, can be waived except in writing. Waiver of any provision or breach shall not be deemed
to be a waiver of any other provision, or of any subsequent breach of the same or other provision.
Except as otherwise provided herein, this Declaration may be amended, modified or rescinded only
in writing signed by Declarant and the Executive Director of Agency.
22. Remedies.
(a) Contract Governed bv Laws of State of California. This Declaration, its performance,
and all suits and special proceedings under this Declaration, shall be constituted in accordance with
the laws of the State of California and Federal law, to the extent applicable. In any action, special
proceeding, or other proceeding that may be brought arising out of, under or because of this
Declaration, the laws of the State of California and the United States, to the extent applicable, shall
govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which the
action or special proceeding may be instituted.
(b) Standinll:. Eauitable Remedies: Cumulative Remedies. Declarant expressly agrees
and declares that Agency or any successor or public agency shall be the proper party and shall have
standing to initiate and pursue any and all actions or proceedings, at law or in equity, to enforce the
provisions hereof and/or to recover damages for any default hereunder, notwithstanding the fact that
such damages or the detriment arising from such a default may have actually been suffered by some
other person or by the public at large. Further, Declarant expressly agrees that receivership,
injunctive relief and specific performance are proper pre-trial and/or post-trial remedies hereunder,
and that, upon any default, and to assure compliance with this Declaration. Nothing in this
subparagraph, and no recovery to Agency, shall restrict or limit the rights or remedies of persons or
entities other than Agency, against Declarant in connection with the same or related acts by
Declarant. The remedies set forth in this Section are cumulative and not mutually exclusive, except
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the extent that their award is specifically determined to be duplicative by final order of a court of
competent jurisdiction.
(c) Remedies at Law for Breach of Tenant Restrictions. In the event of any material
default under Sections I through 21 hereof regarding restrictions on the operation and the transfer of
the Property and the expiration of any applicable cure period provided under the Loan Agreement,
Agency shall be entitled to, in addition to any and all other remedies available at law or in equity: (i)
declare the Loan to be all due and repayable; and (ii) recover compensatory damages. If the default
in question involves the collection of rents in excess of the rents permitted hereunder, the amount of
such compensatory damages shall be the product of multiplying: (a) the number of months that the
default in question has continued until the time of trial by (b) the result of subtracting the rents
properly chargeable hereunder for the Affordable Units in question from the amount actually
charged for those Affordable Units. Declarant and Agency agree that it would be extremely difficult
or impracticable to ascertain the precise amount of actual damages accruing to Agency as a result of
such a default and that the foregoing formula is a fair and reasonable method of approximating such
damages. Agency shall be entitled to seek and to recover damages in separate actions for successive
and separate breaches which may occur. Further, interest shall accrue on the amount of such
damages from the date of the breach in question at the rate of ten percent (10%) per annum or the
maximum rate than allowed by law, whichever is less. Nothing in this section shall preclude the
award of exemplary damages as allowed by law.
(d) Expert Witness. Attornevs' Fees. and Costs. The parties agree that the prevailing
party in litigation for the breach and/or interpretation and/or enforcement of the terms of this
Declaration and/or the Loan Agreement shall be entitled to their expert witness fees, if any, as part
of their costs of suit, and reasonable attorneys' fees as may be awarded by the court, pursuant to
California Code of Civil Procedure ("CCP") S1033.5 and any other applicable provisions of
California law, including, without limitation, the provisions of CCP S998.
23. Mortgagees Protection. No violation or breach of the covenants, conditions, restrictions,
provisions or limitations contained in this Declaration shall defeat or render invalid or in any way
impair the lien or charge of any permitted deed of trust recorded on the Property provided, however,
that any subsequent owner of the Property shall be bound by the covenants, conditions, restrictions,
limitations and provisions of this Declaration, whether such owner's title was acquired by
foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.
24. Agencv's Approval ofPropertv Manager. At all times that this Declaration is in force and
effect, and Agency has served a thirty (30) day written notice of deficiencies in the property
management for the Property which do not conform to the standards of property management of a
professional property manager operating similar properties in San Diego County and which
deficiencies have not been rectified by Declarant, within the thirty (30) day period (unless such
deficiency is not reasonably capable of being cured within such thirty (30) day period, then such
reasonable amount of time as is needed not to exceed ninety (90) days, provided Declarant
commences cure within such thirty (30) day period and continues to diligently pursue cure), then,
Agency shall have the right, in its reasonable discretion, and upon thirty (30) days written notice: (i)
to require the retention of a professional property management firm to manage the Property; (ii) to
approve, in advance and in writing, the retention of any such property management firm, including
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the terms of the contract governing such retention; and (iii) to require Declarant to terminate any
such property management fIrm, provided that such termination shall comply with the termination
provisions of the management contract in question. Declarant shall cooperate with Agency to
effectuate Agency's rights.
25. Section 42 of the Internal Revenue Code
(a) Section 42(h)(6)(E)(ii) of the Internal Revenue Code does not permit the eviction or
termination of tenancy (other than for good cause) of an existing tenant of any low-income unit or
any increase in the gross rent with respect to such unit not otherwise permitted under Section 42 for
three (3) years after the date the Property is acquired by foreclosure or deed in lieu of foreclosure.
(b) Notwithstanding anything to the contrary contained herein or in the Loan Agreement
or any of the Loan Documents, Agency acknowledges that pursuant to Section 42 of the Internal
Revenue Code, the Property will be subject to a regulatory agreement by and between Declarant and
the California Tax Credit Application Committee (the "TCAC Regulatory Agreement"). Agency
further acknowledges and agrees that the terms and conditions of the TCAC Regulatory Agreement
may impose rental restrictions that are more strict than the restrictions set forth herein, and
compliance by Declarant of any such stricter rental restrictions set forth in the TCAC Regulatory
Agreement shall not constitute a default hereunder or under the Loan Agreement or any of the
documents executed by Declarant in conjunction therewith.
26. No Conversion to Condominiums. Declarant agrees during the term ofthis Declaration, that
Declarant shall not, and shall not allow any other person to, cause all or any portion of the Property
to be converted to condominiums or to otherwise allow a condorninium map or condorninium plan to
be recorded or filed against all or any portion of the Property. Declarant further agrees that the
conversion of all or any portion of the Property to condominiums and/or the recordation or filing of a
condominium map or condominium plan against all or any portion of the Property during the term of
this Declaration, shall be a breach of this Declaration, the Loan Agreement, the Agency Note, as
defIned in the Loan Agreement, and the Trust Deed, entitling the Agency to immediately exercise
any and all of its rights and remedies under this Declaration, the Loan Agreement, the Agency Note
and the Trust Deed, including without limitation acceleration of the Agency Note and foreclosure
under the Trust Deed.
27. Noticing Requirements Prior to Termination. Prior to termination of this Declaration,
Declarant shall comply with any and all noticing requirements required under any applicable laws or
regulations, including without limitation, the requirements of California Government Code Sections
65863.10 and 65863.1 1.
28. Incentives. Government Code Section 65915 requires that cities and counties provide a
developer of a housing development which meets the requirements defined in subsection 659l5(b)
with a density bonus, and offer at least one additional concession or incentive to assist with the
feasibility of the affordable housing project. Declarant hereby acknowledges receipt of at least one
additional concession or incentive.
11
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29. Sil!Ilature Authority, All individuals signing this Declaration for a party which is a
corporation, a partnership or other legal entity, or signing under a power of attorney, or as a trustee,
guardian, conservator, or in any other legal capacity, covenant to the Agency that they have the
necessary capacity and authority to act for, sign and bind the respective entity or principal on whose
behalf they are signing.
Declarant:
Los Vecinos, L.P., a California limited partnership
By: Wakeland Los Vecinos, LLC a California limited liability company
Its: Managing General Partner
By: Wakeland Housing and Development Corporation,
a California nonprofit public benefit corporation
Its: Maj,er and Member
By: /( f2.(A~ ;;L~
Kenneth L. Sauder
President and CEO
Agency:
Redevelopment Agency of the City of Chula Vista
By:
David Garcia, Executive Director
Approved as to form:
By:
Ann Moore, City Attorney
12
E:\CLIENTS\CHULA VISTA\LOS VECINOS\FlNAL\OECLARATJON.DQC
2-74
Exhibit "E"
Statement of Insurance Requirements
38
E:\CLlENTS\Chula Vista\Los Vecinos\Fina1\Construction & Permanent Loan.doc
2-75
STATEMENT OF
INSURANCE REQUIREMENTS
(Including All Successors and Assigns of Borrower)
Borrower acknowledges the receipt of these insurance requirements and agrees to maintain in
full force and effect, the following policies during the term of the Redevelopment Agency of the
City ofChula Vista's ("Agency") loan at Borrower's sole cost and expense. All insurance policies
shall contain a provision requiring thirty (30) days advance written notice to the Agency of
cancellation. Borrower agrees to maintain the following insurance coverages:
1. Reauired Insurance. To at all times provide, maintain and keep in force at Borrower's sole
expense the following policies of insurance:
(a) Insurance against loss or damage to the Improvements by fire and any of the
risks covered by insurance of the type now known as "fire and extended coverage" including
endorsement designating Agency as a Loss Payee, in an amount no less than the original amount of
the Note plus any senior liens or encumbrances or the full replacement cost of the Improvements,
including the cost of debris removal (exclusive of the cost of excavations, foundations and footings
below the lowest basement floor), whichever is greater, and with not more than One Thousand
Dollars ($1,000.00) deductible from the loss payable for any casualty. Notwithstanding the
foregoing or anything to the contrary contained in the Construction and Permanent Financing Loan
Agreement ("Agreement"), during the period of time from the loan closing through completion of
construction of the Project, Borrower's obligation to provide the insurance described in this Section
I(a) may be satisfied by a builder's risk policy in the amount of not less than
($~, provided a certificate of insurance acceptable to Agency and naming the Agency and the
City of Chula Vista as additional insureds with primary coverage, is filed with Agency prior to
closing of the Agency Loan. The policies of insurance carried in accordance with this subparagraph
(a) shall contain the "Replacement Cost Endorsements";
(b) Business interruption insurance and/or loss of"rentaI value" insurance in such
amounts as are satisfactory to Agency;
(c) Comprehensive general public liability insurance, including coverage for
elevators and escalators, ifany, on the Property, and coverage for non-owned automobiles, insuring
against claims for "personal injury", including, without limitation, bodily injury, death or property
damage occurring on, in or about the Property and the adjoining streets, sidewalks and passageways,
such insurance to afford immediate minimum protection to a limit of not less than a project specific
Two Million Dollars ($2,000,000.00) Per Occurrence, Combined Single Limit with Four Million
Dollar ($4,000,000) Aggregate Limit, with respect to personal injury or death to anyone or more
persons or damage to property (as that amount may be increased from time to time by Agency in its
reasonable discretion). General Liability policy must endorse and designate Agency as an
Additional Insured. Liability Additional Insured Endorsement must be primary, must not exclude
Completed Operations, and must be endorsed to include a Ten (10) year extended reporting period;
I
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(d). Workers' compensation insurance (including employer's liability insurance, if
requested by Agency) for all employees of Borrower engaged on or with respect to the Property in
such amount as is reasonably satisfactory to Agency, or if such limits are established by law, in such
amounts;
(e) During the course of any construction or repair of Improvements on the
Property, builder's completed value risk insurance against "all risks of physical loss" , including
collapse and transit coverage, during construction of such Improvements, with deductibles not to
exceed Ten Thousand Dollars ($10,000.00), in non-reporting form, covering the total value of work
performed and equipment, supplies and materials furnished. Agency to be endorsed as a Loss Payee.
Said policy of insurance shall contain the "permission to occupy upon completion of work or
occupancy" endorsement;
(f) Boiler and machinery insurance covering pressure vessels, air tanks, boilers,
machinery, pressure piping, heating, air conditioning, and elevator equipment and escalator
equipment provided the Improvements contain equipment of such nature, and insurance against loss
of occupancy or use arising from breakdown of any of the items referred to in this subparagraph (f),
in such amounts as are reasonably satisfactory to Agency;
(g) Insurance against flood damage, including surface waters, if the Property is
located in an area considered a flood risk by the United State Department of Housing and Urban
Development;
(h) Insurance against loss or damage to the Personal Property by fire and other
risks covered by insurance of the type now known as "fire and extended coverage."
Notwithstanding the foregoing, the insurance coverage described in this Section 1 (h) is not required
to be a separate policy of insurance, provided such risks are insured by one or more policies of
insurance obtained by Borrower; and
(i) Such other insurance (including, but not limited to, earthquake insurance), and
in such amounts, as may from time to time be required by Agency against the same or other hazards,
provided such additional insurance is available at commercially reasonable rates.
G) Pollution Liability insurance - project specific limits
(k) Excess Liability Insurance
(1) Professional Liability / E&O (design professionals, etc) - project specific
limits
All policies of insurance required by the terms of the Deed of Trust shall contain an
endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms
of such policy, notwithstanding any act or negligence of Borrower which might otherwise result in
forfeiture of said insurance, and the further agreement of the insurer waiving all rights of setoff,
counterclaim or deductions against Borrower.
E:\CLIENTS\Chula Vista\Los Vecmos\FinaI\Insurance.doc
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2-77
2. Deliverv of Policies. Pavment of Premiums. All policies of insurance shall be issued by
companies admitted to issue insurance policies in the State of California, and rated A V or better by
AM Best, and in amounts in each company satisfactory to Agency. All policies of insurance shaH
have attached thereto a lender's loss payable endorsement for the benefit of the holder of the first
priority deeds of trust on the property and improvements, and then for the benefit of Agency in form
satisfactory to Agency. Borrower shall furnish Agency with an original copy of all policies of
required insurance. At least thirty (30) days prior to the expiration of each such policy, Borrower
shall furnish Agency with evidence satisfactory to Agency of the payment of premium and the re-
issuance of a policy continuing insurance in force as required by the Deed of Trust. All such
policies shall contain a provision that such policies will not be canceled or materially amended,
which terms shaH include any reduction in the scope of limits of coverage, without at least thirty
(30) days prior written notice to Agency. In the event Borrower fails to provide the policies of
insurance required by the Deed of Trust, Agency may procure such insurance or single-interest
insurance for such risks covering Agency's interest, and Borrower will pay all premiums thereon
promptly upon demand by Agency, and until such payment is made by Borrower the amount of all
such premiums, together with interest thereon at the rate often percent (10%) per annum or the
maximum rate aHowed by law, whichever is less.
In the event any lender, who has a secured interest in the Property, requires additional
insurance and/or insurance with greater coverages than that required by this Statement oflnsurance
Requirements, Borrower agrees to provide to and name the Agency on such policies providing
greater and additional coverages.
Borrower, by execution of this Statement of Insurance Requirements, agrees to provide the
required insurance during the term of the loan and to require all successors in interest to agree to
provide such coverages for the benefit of the Agency. Borrower acknowledges that performance of
the covenants contained herein are a material inducement to making the loan to Borrower.
3. Silmature Authoritv. All individuals signing this Statement ofInsurance Requirements for
a party which is a corporation, limited liability company, partnership or other legal entity, or signing
under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity,
covenant to the Agency that they have the necessary capacity and authority to act for, sign and bind
the respective entity or principal on whose behalf they are signing.
Executed this _ day of
,2008.
Borrower:
Los Vecinos, L.P., a California limited partnership
By: Wakeland Los Vecinos, LLC, a California limited liability company
Its: Managing General Partner
By: Wakeland Housing and Development Corporation,
a California nonprofit public benefit corporation
Its: Mj~r and Mem~
BY:/~-:/ r~
~enneth L. Sauder, President and CEO
3
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2-78
Attachment 3
a
~~
Housing
Disclosure Statement
Pursuant to Council Policy 1001-01, prior to any action upon matters that will require
discretionary action by the Council, Planning Commission and all other official bodies of the
City, a statement of disclosure of certain ownership of financial interests, payments, or campaign
contributions for a City of Chula Vista election must be filed. The following information must be
disclosed:
1. List the names of all persons having a financial interest in the proj ect that is the
subject of the application or the contract. e.g., owner, applicant, contractor,
subcontractor, material supplier.
Los Vecinos. LP (owner, lendee)
Wakeland Los Vecinos, LLC (general partner, above)
Wakeland HOusing and Development Corp.
2. If any person* identified pursuant to (I) above is a corporation or partnership, list the
names of all individuals with a $2000 investment in the business
(corporation/partnership) entity.
N/A
3. If any person* identified pursuant to (I) above is a non-profit organization or trust,
list the names of any person serving as director of the non-profit organization or as
trustee or beneficiary or trustor of the trust.
See attached list of board members
4. Please identify every person, including any agents, employees, consultants, or
independent contractors you have assigned to represent you before the City in this
matter.
Kenneth L. Sauder Robert Henderson
Barry Getzel
Sylvia Martinez
2-79
.
.,&""",
Housing
Disclosure Statement -Page 2
5. Has any person* associated with this contract had any financial dealings with an
official** of the City ofChula Vista as it relates to this contract within the past 12
months? Yes_ No~
If Yes, briefly describe the nature of the financial interest the official** may have in
this contract.
6. Have you made a contribution of more than $250 within the past twelve (12) months
to a current member of the Chula Vista City Council? No~ Yes_ If yes, which
Council member?
7. Have you provided more than $340 (or an item of equivalent value) to an official**
of the City ofChula Vista in the past twelve (12) months? (This includes being a
source of income, money to retire a legal debt, gift, loan, etc.) Yes NoX--
If Yes, which official** and what was the nature ofitem provided?
Date: 12/14/07
J/~~u.-dt d C--..
~ature of Contractor IApp lie ant --
Kennth L. Sauder, President/CEO
Print or type name of Contractorl Applicant
*
Person is defmed as: any individual, firm, co-partnership, joint venture, association,
social club, fraternal organization, corporation, estate, trust, receiver, syndicate, any
other county, city, municipality, district, or other political subdivision, -or any other
group or combination acting as a unit
**
Official includes, but is not limited to: Mayor, Council member, Planning
Commissioner, Member of a board, commission, or committee of the City, employee,
or staff members.
2-80
WAKELAND HOUSING AND DEVELOPMENT
BOARD OF DIRECTORS
Loren Adams
Board Member
Vice Pres of OperationslDevelopment at
Intracorp
600 B Street, Suite 2000
San Diego, CA 92101
Ph. # (619) 544-6963
Robert "Buddy"Bohrer
Board Member
HG Fenton Company
7577 Mission Valley Road
Suite 200
San Diego, CA 92108
Ph. # (619) 400-0139
Lina Ericsson
Officer - Chairperson
Luce Forward Hamilton & Scripps
600 West Broadway, Suite 2600
San Diego, CA 92101
Ph. # (619) 533-7360
Craig Fukuyama
Board Secretary
The Fukuyama Company
7327 Cuvier Street
La Jolla, CA 92037
Ph. # (619) 743-8800
Glen Googins
Board Member
Attorney at Law
344 F Street, Suite 100
Chula Vista, CA 91910
Ph # (619) 426-4409
Larry Nuffer
Board Member
11793 Lake Grove Ct.
San Diego, CA 92131
Ph. # (858) 442-0091
Doug Perkins
Board Member
President
Pacific Gateway Group.
5703 Oberlin Dr, Suite 209
San Diego, CA 92121
Ph. # (619) 234-3491
Art Rivera
Board Member
Vice President - Corporate Affairs
Manager, Washington Mutual
707 Broadway, 15th Floor
San Diego, CA 92101
Ph. # (619) 687-0202
Lee Winslett
Officer -Treasurer
Vice President of Wells Fargo Bank
Community Lending Division
401 B Street, Suite 304A
San Diego, CA 92101
Ph. # (619) 699-3037
2-81
RDA RESOLUTION NO. 2008-
1 R ~~~Ft)
RESOLUTION OF THE CHULA VISTA REDEVELOPMEJ
AGENCY: [A] APPROPRIATING $5,570,000 FRulVl
REDEVELOPMENT AGENCY LOW AND MODERATE
INCOME HOUSING FUNDS FOR FINANCIAL ASSISTANCE
FOR THE DEVELOPMENT OF LOS VECINOS; AND [B]
AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE
A LOAN AGREEMENT BY AND BETWEEN THE CHULA
VISTA REDEVELOPMENT AGENCY AND LOS VECINOS,
L.P AND ALL OTHER IMPLEMENTING AGREEMENTS AND
DOCUMENTS
WHEREAS, pursuant to California Government Code Section 65915, the City Council of
the City of Chula Vista by ordinance granted density bonus concessions and incentives for the
multi-family Los Vecinos apartment complex in exchange for the development of 42 residential
units, which would be restricted for a period of 55 years for occupancy by very low and low
income families; and
WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 authorize
and direct the Redevelopment Agency of the City of Chula Vista [Agency] to expend a certain
percentage of all taxes, which are allocated to the Agency pursuant to Section 33670, for the
purposes of increasing, improving and preserving the community's supply of low and moderate
income housing available at affordable housing cost to persons and families of low- and
moderate-income, lower income, and very low income; and
WHEREAS, pursuant to applicable law the Agency has established a Low and Moderate
Income Housing Fund [Housing Fund]; and
WHEREAS, pursuant to Health and Safety Code section 33334.2(e), in carrying out its
affordable housing activities, the Agency is authorized to provide subsidies to or for the benefit
of very low income and lower income households, or persons and families of low or moderate
income, to the extent those households cannot obtain housing at affordable costs on the open
market, and to provide financial assistance for the construction and rehabilitation of housing
which will be made available at an affordable housing cost to such persons; and
WHEREAS, pursuant to Section 33413(b), the Agency is required to ensure that at least
15 percent of all new and substantially rehabilitated dwelling units developed within a project
area under the jurisdiction of the Agency by private or public entities or persons other than the
Agency shall be available at affordable housing cost to persons and families of low or moderate
income; and
WHEREAS, the Developer proposes to construct an affordable rental housing
development targeting predominately extremely low and very low households at 50 percent or
less of the Area Median Income [AMI] to be located at 1501 Broadway within the Merged Chula
Vista Project Area [Project]; and
J;\Attomey\RESO\REDEVELOPMENT\Los Veeinos Final_02-05-08.doc
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RDA Resolution No. 2008-
Page 2
WHEREAS, in order to carry out and implement the Redevelopment Plan for the
Agency's redevelopment projects and the affordable housing requirements and goals thereof,
Agency proposes to enter into an Agency Loan Agreement [Loan Agreement] with the
Developer's limited partnership, Los Vecinos, L.P., pursuant to which the Agency would make a
loan to Los Vecinos, L.P., and the Developer would agree to develop the Project for occupancy
of all apartment units in the Project to very low and lower income households and rent those
units at an affordable housing cost; and
WHEREAS, the Agency Loan will leverage the investment of the Agency by obtaining
additional financing for the construction and operation of the Project through such resources as
"9% Tax Credits" to be generated by the Project; and
WHEREAS, the Project is located within the Agency's Merged Chula Vista
Redevelopment Project Area and development and operation of the Project pursuant to the
Agency Agreement would benefit the Agency's redevelopment project areas by providing
affordable housing for persons who currently live and work within those redevelopment project
areas; and
WHEREAS, the Project has incurred legal, architectural, engineering costs and other
salaries, wages, and costs directly related to the planning and execution of the project, which are
allowed under Health and Safety Code section 33334.3( e )(2) as project costs; and
WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and
Safety Code section 33490, which sets forth the objective of providing housing to satisfY the
needs and desires of various age, income and ethnic groups of the community, and which
specifically provides for the new construction of rental housing units through Agency assistance;
and
WHEREAS, the Agency Loan Agreement furthers the goals of the Agency to facilitate
the creation of affordable housing that will serve the residents of the neighborhood and the City
as set forth in the Implementation Plan; and
WHEREAS, the Agency has duly considered all terms and conditions of the proposed
Loan Agreement and believes that this Agreement is in the best interests of the Agency and the
health, safety, and welfare of its residents, and in accord with the public purposes and provisions
of applicable State and local law requirements.
NOW, THEREFORE, THE CHULA VISTA REDEVELOPMENT AGENCY
DOES RESOLVE AS FOLLOWS:
Section 1. The Chula Vista Redevelopment Agency hereby finds that the use of funds from the
Agency's Low and Moderate Income Housing Fund pursuant to the Loan Agreement for the
development of an affordable rental housing project located at 1501 Broadway, will benefit the
Agency's redevelopment project areas for the reasons set forth above.
J:\Altomey\RESO\REDEVELOPMENT\Los V=cinos Final_02-05-08.doc
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RDA Resolution No. 2008-
Page 3
Section 2. The Chula Vista Redevelopment Agency does hereby:
[A] establish a new non-CIP project - "Los Vecinos Project" and amend the FY 2008
Low and Moderate Income Housing Budget to appropriate $5,570,000 from the available fund
balance for financial assistance for the development of Los Vecinos costs, including $90,000 for
costs directly related to the planning and execution of the project, and
[B] authorize the Agency Executive Director/City Manager or his designee to execute the
Loan Agreement by and between the Chula Vista Redevelopment Agency and Los Vecinos,
L.P., and all other implementing agreements and documents, subject to such revisions as may be
made reviewed and approved by the Agency/City Attorney.
BE IT FURTHER RESOLVED, that the Chula Vista Redevelopment Agency, has made
their recommendations, as herein contained, after considering all evidence and testimony
presented at its public meeting and is hereby incorporated into the record.
Eric C. Crockett
Assistant Director
Presented by:
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