HomeMy WebLinkAbout2009/10/06 Item 16TY COUNCIL
STATEMENT
`~~ CITY OF
CHULAVISTA
OCTOBER 6, 2009, Item
ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AGREEMENT BETWEEN
THE CITY OF CHULA VISTA AND THE SAN DIEGO
COMMUNITY HOUSING CORPORATION FOR THE
IMPLEMENTATION OF THE DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT NEIGHBORHOOD
STABILIZATION PROGRAM AND AUTHORIZING THE
CITY MANAGER TO EXECUTE THE AGREEMENT AND
ANY NECESSARY DOCUMENTS
SUBMITTED BY: DEPUTY ~~~'Y MANAGER /DEVELOPMENT SERVICES
On March 3, 2009, Council approved and appropriated Neighborhood Stabilization
Program funds that included a portion for acquiring and rehabilitating rental housing for
very low income households. Staff has completed a selection process for an organization
to provide these services and staff recommends that the Council approve entering into a
contract with San Diego Community Housing Corporation.
DIRECTO
REVIEWED BY: CITY MANAGE
4/STHS VOTE: YES ~ NO ^X
StiIMMARY
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed action for compliance
with the National Environmental Policy Act (NEPA) due to the use of Federal funds and
has determined that pursuant to Section 58.30 (b), Subpart D, Title 24 of the Code of
Federal Regulations, further review and environmental determination as appropriate, will
be required for each prof ect as it is identified. Thus, no further NEPA environmental
review or documentation is necessary at this time.
RECOMMENDATION
Council adopt the resolution.
BOARDS/COMMISSION RECOMMENDATION
None.
16-1
October 6, 2009, Item l rU
Page 2 of 3
DISCUSSION
BACKGROUND
On March 3, 2009, Council approved Neighborhood Stabilization Program (NSP) funds
that included a portion for acquisition and rehabilitation of abandoned and foreclosed
properties. Once acquired and rehabilitated by the City's partner, the units would be
leased to very low income households. Tonight, staff is bringing forward the selected
partner agency for this activity for City Council consideration and approval.
On April 24, 2009, a Request for Qualifications (RFQ) was issued for agencies interested
in acquiring and rehabilitating foreclosed or abandoned properties to rent to very low-
income qualified households utilizing NSP funds. The goal of the NSP program under
this activity is to create permanent rental housing for very low income households using
the $1,000,000 appropriated for this NSP activity. The agency selected partner will assist
the City in identifying the best method for leveraging NSP funds with other special needs
or low income housing funding opportunities. The City received five (5) proposals from
the following applicants:
1. Casa Familiar
2. Community HousingWorks
3. Pacific Southwest Community Development Corporation and Southern California
Housing Collaborative
4. San Diego Community Housing Corporation
5. South Bay Community Services
A selection committee reviewed the applications and conducted interviews. Based on the
applications received, San Diego Community Housing Corporation was selected as an
agency with extensive experience for this type of project and one that can best meet the
goals and objectives of the City's Neighborhood Stabilization Program Plan.
Project Scope and Contractual Requirements
As proposed, the services to be provided by San Diego Community Housing Corporation
are generally performed in eight phases: (1) identify properties, (2) conduct financial
feasibility, (3) submit to the City a pro forma for review and approval, (4) make an offer
on a property, close escrow, and record City's affordable housing loan documents
securing the City's financial interest (5} complete acquisition, (6) complete any
rehabilitation needed for occupancy, (7) market the units to eligible households, and (8)
manage the property during the affordability period.
16-2
October 6, 2009, Item
Page 3 of 3
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found that three
conflicts exist, in that Councilmembers Castaneda, Thompson, and Bensoussan have
property holdings within 500 feet of the boundaries or within the target neighborhoods
which are the subject of this action.
Due to identified conflicts during the initial target area development, City staff requested a
written opinion from the Fair Political Practices Commission ("FPPC"). In response, the
FPPC opined that Councilmembers could participate in the decision on this matter because,
"it does not appear foreseeable that the decision to appropriate HUD funds will have a
material financial effect (on a council member)." Based on the information in said FPPC
letter Castaneda and Bensoussan do not have a conflict. However, staff has identified that
Councilmember Thompson has a separate conflict of interest.
FISCAL IMPACT
Current
There is no fiscal impact by tonight's action
Council on March 24, 2009.
NSP funds were previously appropriated by
Ongoing
There are no ongoing fiscal impacts as the program is revenue offset by the grant funds.
Prepared by: Jose Dorado, Project Coordinator II,
Development Services Department, Housing Division
16-3
RESOLUTION NO. 2009-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AGREEMENT BETWEEN
TI-IE CITY OF CIgULA VISTA AND THE SAN DIEGO
COMMUNITY HOUSING CORPORATION FOR THE
IMPLEMENTATION OF THE DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT NEIGHBORHOOD
STABILIZATION PROGRAM AND AUTHORIZING THE
CITY MANAGER TO EXECUTE THE AGREEMENT AND
ANY NECESSARY DOCUMENTS
WHEREAS, the City of Chula Vista will receive $2,830,072 of which $1,000,000 is
earmarked for the creation of permanent rental housing for very low-income households under
the Neighborhood Stabilization Program (NSP); and
WHEREAS, in January, 2009, HUD approved the City's Amended 2008-2009 Annual
Action Plan containing the proposed activities to be funded with NSP funds, including the
Acquisition and Rehabilitation of Foreclosed or Abandoned Property for the creation of
permanent rental housing for very low-income households; and
WHEREAS, the City issued a Request for Qualifications on April 24, 2009 and
received five (5) applications from various agencies to partner with the City to utilize
Neighborhood Stabilization Program funds in accordance with the City's NSP Plan for the
creation of Permanent Rental Housing for very low-income households; and
WHEREAS, San Diego Community Housing Corporation was selected by the selection
committee as best suited to carry out this activity; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista approves the Agreement between the City of Chula Vista and the San Diego Community
Housing Corporation to provide permanent rental housing for low income-households within
NSP eligible target areas and authorizes the City Manager to execute the Agreement and any
documents necessary to secure the City's financial interest.
Presented by: Approved as to form by:
James D. Sandoval
City Manager
Bart C. Miesfeld
City Attorney
16-4
THE ATTACHED 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
~~~~
Bart C. Miesfeld
City Attorney
Dated:
Agreement between the San Diego Community Housing Corporation and
The City of Chula Vista
for Management and Implementation of
A Neighborhood Stabilization Program Project
16-5
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CHULA VISfA
AGREEMENT
BY AND BETWEEN THE
CITY OF CHULA VISTA
AND
SAN DIEGO COMMUNITY HOUSING CORPORATION
FOR MANAGEMENT AND IMPLEMENTATION OF
A NEIGHBORHOOD STABILIZATION PROGRAM
This Contract Number by and between San Diego Community Housing
Corporation (hereinafter referred to as "Developer") and the City of Chula Vista
(hereinafter referred to as "City") is effective on ("Effective Date").
WITNESSETH:
WHEREAS, the Neighborhood Stabilization Program (NSP), authorized under Title III
of Division B of the Housing and Economic Recovery Act of 2008 (HERA), is a special
allocation of Community Development Block Grant (CDBG) funds targeted at
acquisition, rehabilitation of foreclosed and abandoned properties in eligible
neighborhoods; and
WHEREAS, the Department of Housing and Urban Development described
regulatory requirements in Federal Register Notice (FR-5255-N-O1) dated October 6,
2008, and amended such requirements by Federal Register Notice (FR-5255-N-02)
Notice of Allocations, Application Procedures, Regulatory Waivers Granted to and
Alternative Requirements for Emergency Assistance for Redevelopment of Abandoned
and Foreclosed Homes Grantees under the Housing and Economic Recovery Act, 2008;
and
WHEREAS, the City, is authorized to apply for and accept Neighborhood
Stabilization Program Grant funds; and
WHEREAS, City incorporated the use of Neighborhood Stabilization Program
funds described in Attachment "A" hereof (hereinafter referred to as the "Project") into
the City's Community Development Block Grant/HOME Investment
Partnership/Emergency Shelter Grant Annual Funding Plan Amendment which was
submitted to the U.S. Department of Housing and Urban Development (HUD); and
WHEREAS, HUD has approved the City Annual Funding Plan Amendment for the
Neighborhood Stabilization Program; and
WHEREAS, Neighborhood Stabilization Program funds are generally construed as
CDBG program funds, subject to CDBG program requirements (unless superseded by
HERA) and is considered a special allocation of Fiscal Year (FY) 2008 CDBG funding;
and,
~c_c
NSP Developer Agreement Pagel of 20
WHEREAS, it is the desire of the Developer and the City that the Project be
implemented by the Developer; and
WHEREAS, the Developer shall undertake the same obligations to the City with
respect to the Project in the City's aforesaid Amendment to the Annual Funding Plan for
participation in the Neighborhood Stabilization Program;
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. WORK TO BE PERFORMED: Developer shall implement the scope of work ("Scope
of Work") described in Attachment A, hereof fully and in accordance with the
terms of the Annual Funding Plan Amendment approved by the City and
submitted to HUD in application for NSP funds to carry out the Project and the
Certifications which were submitted concurrently with the Annual Funding Plan
Amendment. The Annual Funding Plan and Certifications form is hereby
incorporated by reference into this contract fully as if set forth herein.
Developer shall also undertake the same obligations to the City that the City has
undertaken to HUD pursuant to said Annual Funding Plan Amendment and
Certifications. The obligations undertaken by Developer include, but are not
limited to, the obligation as applicable comply with each of the following as
may be amended from time to time and be amended for specific
Neighborhood Stabilization Program activities described in Federal Register
Notices FR-5255-N-O1 and FR-5255-N-02:
a. HERA alternative requirements to provisions under Title I of the Housing and
Community Development Act of 1974 (Public Law 93-383, as amended, 42
USC § 5301, et seq.), as amended, except for requirements related to fair
housing, nondiscrimination, labor standards, and the environmental
(including lead-based paint), in accordance with the terms of section 2301
of HERA and for the sole purpose of expending the use of grant funds;
b. HUD regulations relating to Community Development Block Grants (24 CFR
570.1, et seq.) unless superseded by HERA;
c. The regulations in 24 CFR Part 58 specifying other provisions of the law that
further the purposes of the National Environmental Policy Act of 1969 and the
procedures by which grantees must fulfill their environmental responsibilities;
d. Title VI of the Civil Rights Act of 1964 (42 USC § 2000d); Title VII of the Civil
Rights Act of 1964 (Public Law 88-352); Title VIII of the Civil Rights Act of 1968
(Fair Housing Act, 42 USC § 3601, et seq.); Section 109 of the Housing and
Community Development Act of 1974; Executive Order 1 1246, as amended
(equal employment opportunity); Executive Order 1 1063 (non-discrimination),
as amended by Executive Order 12259; and any HUD regulations heretofore
issued or to be issued to implement these authorities relating to civil rights;
e. Section 3 of the Housing and Urban Development Act of 1968, as amended,
12 U.S.C. 1701 u.
NSP Developer Agreement Paget of 11
All section 3 covered contracts shall include the following clause (referred to
as the "section 3 clause"):
i. The work to be performed under this contract is subject to the
requirements of section 3 of the Housing and Urban Development Act of
1968, as amended, 12 U.S.C. 1701 u (section 3). The purpose of section 3 is
to ensure that employment and other economic opportunities generated
by HUD assistance or HUD-assisted projects covered by section 3, shall, to
the greatest extent feasible, be directed to low- and very low-income
persons, particularly persons who are recipients of HUD assistance for
housing.
ii. The parties to this contract agree to comply with HUD's regulations in 24
CFR part 135, which implement section 3. As evidenced by their
execution of this contract, the parties to this contract certify that they are
under no contractual or other impediment that would prevent them from
complying with the part 135 regulations.
iii. The Developer agrees to send to each labor organization or
representative of workers with which the Developer has a collective
bargaining agreement or other understanding, if any, a notice advising
the labor organization or workers' representative of the Developer's
commitments under this section 3 clause, and will post copies of the
notice in conspicuous places at the work site where both employees and
applicants for training and employment positions can see the notice. The
notice shall describe the section 3 preference, shall set forth minimum
number and job titles subject to hire, availability of apprenticeship and
training positions, the qualifications for each; and the name and location
of the person(s) taking applications for each of the positions; and the
anticipated date the work shall begin.
iv. The Developer agrees to include this section 3 clause in every
subcontract subject to compliance with regulations in 24 CFR part 135,
and agrees to take appropriate action, as provided in an applicable
provision of the subcontract or in this section 3 clause, upon a finding that
the sub-contractor is in violation of the regulations in 24 CFR part 135. The
Developer will not subcontract with any sub-contractor where the
Developer has notice or knowledge that the sub contractor has been
found in violation of the regulations in 24 CFR part 135.
v. The Developer will certify that any vacant employment positions,
including training positions, that are filled (1) after the Developer is
selected but before the contract is executed, and (2) with persons other
than those to whom the regulations of 24 CFR part 135 require
employment opportunities to be directed, were not filled to circumvent
the Developer's obligations under 24 CFR part 135.
vi. Noncompliance with HUD's regulations in 24 CFR part 135 may result in
sanctions, termination of this contract for default, and debarment or
suspension from future HUD assisted contracts.
vii. With respect to work performed in connection with section 3 covered
Indian housing assistance, section 7(b) of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 450e~ also applies to the work to
be performed under this contract. Section 7(b) requires that to the
greatest extent feasible (i) preference and opportunities for training and
employment shall be given to Indians, and (ii) preference in the award of
contracts and subcontracts shall be given to Indian organizations and
NSP Developer Agreement Page3 of 11
Indian-owned Economic Enterprises. Parties to this contract that are
subject to the provisions of section 3 and section 7(b) agree to comply
with section 3 to the maximum extent feasible, but not in derogation of
compliance with section 7(b).
f. The Uniform Relocation Assistance and Real Property Acquisition Policies Act
of 1979, 42 USC § 4601, et seq., and regulations adopted to implement that
Act in 49 CFR Part 24; except as those provisions are modified by the Notice
for the NSP Program published by HUD.
g. Office of Management and Budget ("OMB") Circular A-122 entitled "Cost
Principles for Non-Profit Organizations"; OMB Circular A-133 entitled "Audits of
States, Local Governments, and Non-Profit Organizations"; and OMB Circular
A-110 entitled "Uniform Administrative Requirement for Grants and
Agreements with Institutions of Higher Education, Hospitals, and Other Non-
profit Organizations."
h. Grant administration requirements as described in 24 CFR 570.504 and CDBG
program income requirements at 24 CFR Part 570.500(a) shall apply to the
amounts received by the City. Developer shall equally share any net
operating income earned (i.e. residual receipts) by Developer in carrying out
the activities of this Contract with the City. Residual Receipts and Program
Income must be used for a NSP eligible activity. Upon expiration of this
Contract, Developer shall transfer to the City any Neighborhood Stabilization
Community Development Block Grant funds on hand at the- time of
expiration and any accounts receivable attributable to the use of
Neighborhood Stabilization Community Development Block Grant funds.
Any real property under Developer's control acquired or improved in whole
or in part with Community Development Block Grant funds will be used to
meet one of the Neighborhood Stabilization Program National Objectives, as
defined in 24 CFR 570.208, and outlined in the City of Chula Vista Annual
Funding Plan Amendment (i.e. NSP Plan);
24 CFR 570.505 concerning use of real property;
The following laws and regulations relating to preservation of historic places:
National Historic Preservation Act of 1966 (Public Law 89-665); the Historical
and Archaeological Preservation Act of 1974 (Public Law 93-291); and
Executive Order 1 1593;
k. The Labor Standards Regulations set forth in 24 CFR 570.603;
I. Labor Code section 1771 concerning prevailing wages;
m. The Hatch Act relating to the conduct of political activities (5 U.S.C. § 1501,
et seq.);
n. The Flood Disaster Protection Act of 1973 (42 U.S.C. § 4001, et seq., and the
implementing regulations in 44 CFR Parts 59-78);
o. The Rehabilitation Act of 1973 (Public Law 93-112) as amended, including
NSP Developer Agreement Page4 of 11
Section 504 which relates to nondiscrimination in federal programs and HUD
24 CFR Part 8;
p. The Clean Air Act (42 U.S.C. § 7401, et seq.) and the Federal Water Pollution
Control Act, as amended (33 U.S.C. § 1251, et seq.) and the regulations
adopted pursuant thereto (40 CFR Part 6);
q. The Drug-Free Workplace Act of 1988 (Public Law 100-690);
The Lead-Based Paint Poisoning Prevention Act, the Residential Lead-Based
Paint Hazard Reduction Act of 1992, and implementing regulations at 24 CFR
Part 35;
No member, officer or employee of the Developer, or its designee or agents,
no member of the governing body of the locality in which the program is
situated, and no other public official of such locality or localities who
exercises any functions or responsibilities with respect to the program during
his/her tenure or for one year thereafter, shall have any interest, direct, or
indirect, in any contract or subcontract, or the process thereof, for work to be
performed in connection with the program assisted under the Grant, and
that it shall incorporate, or cause to be incorporated, in all such contracts or
subcontracts a provision prohibiting such interest pursuant to the purposes of
this certification.
The Developer certifies, that in accordance with Section 319 of Public Law
101-121, to the best of his or her knowledge and belief that:
No federal appropriated funds have been paid or will be paid, by or on
behalf of the undersigned, to any person for influencing or attempting to
influence an officer or employee of any agency, a member of Congress,
an officer or employee of Congress, in connection with the awarding of
any federal contract, the making of any federal grant, the making of any
federal loan, the entering into of any cooperative contract, and the
extension, continuation, renewals, amendment, or modifications of any
federal contract, grant loan, or cooperative contract.
ii. If any funds other than federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an
officer or employee of any agency, a member of Congress, or an
employee of a member of Congress in connection with this federal
contract, grant, loan, or cooperative contract, the undersigned shall
complete and submit Standard Form-LLL, "Disclosure Form to Report
Lobbying", in accordance with its instructions.
u. The Architectural Barriers Act of 1968 (42 U.S.C. § 4151, et seq.);
v. The Americans with Disabilities Act (42 U.S.C. § 12101); and
w. The bonding requirements described in 24 CFR Part 85.36 required for
construction or facility improvement contracts or subcontracts that exceed
the simplified acquisition threshold (defined at 41 U.S.C. 403(11)). These
requirements are further described in Attachment A, which is attached
NSP Developer Agreement Pages of 11
hereto and incorporated by reference.
x. Developer shall hold City harmless and indemnify City against any harm that
it may suffer with respect to HUD on account of any failure on the part of the
Developer to comply with the requirements of any such obligation.
2. COMPLIANCE WITH LAWS: Developer shall comply with all applicable local,
state, and federal laws, regulations, ordinances, and City Policies when
performing the work required by this Contract.
3. COMPENSATION: City shall reimburse Developer up to 10~ for a developer fee
for the portfolio of projects (rental units) assistance and with reasonable gap
financing expenses it incurs for work performed under this Contract. Total
reimbursement (developer fee and gap financing) shall not exceed $1,000,000.
Developer shall not submit claims to the City nor shall City reimburse Developer
for costs for which Developer is reimbursed from a source other than the funds
allocated for work under this Contract.
4. COMPENSATION SCHEDULE: City shall pay Developer monthly progress
payments upon submittal by Developer of a certified statement of actual
expenditures incurred, provided, however, that not more than 90% of the total
agreed compensation will be paid during the performance of this Contract. The
balance due shall be paid upon certification by Developer that all of the
required services have been completed. Payment by City is not to be construed
as final in the event HUD disallows reimbursement for the project or any portion
thereof. The 10% retention will not apply to acquisition or service contracts.
5. INDIRECT COSTS: If indirect costs are charged, the Developer will develop an
indirect cost allocation plan for determining the appropriate Developer's share
of administrative costs and shall submit such plan to the City for approval.
6. EXPENDITURE STANDARD: To insure effective administration and performance of
approved Neighborhood Stabilization Program projects and to meet HUD
performance standards, Developer shall demonstrate reasonable progress on
implementation of the project, expending all contracted funds within the term of
the contract. In the event all funds are not expended within the term period, the
City shall notify the Developer of the expenditure deficiency. Developer will
have a total of 30 days from the date of the City's written notification to correct
the deficiency. If the deficiency is not corrected within that time, Developer
agrees that the City may reallocate the amount of the expenditure deficiency.
TERM: This contract shall commence when executed by the parties and shall
continue in effect until terminated as provided herein or until Developer has
carried out all its obligations under the contract. Services of the Developer shall
start on the lit day of September 2009 and end on the 30th day of June of 2010.
With City approval, the term of this Agreement and the provisions herein shall be
extended to cover any additional time period during which the Developer
remains in control of NSP/CDBG funds or other NSP/CDBG assets, including
program income.
8. TERMINATION FOR CONVENIENCE: The City may permit the agreement to be
NSP Developer Agreement Page6 of 1 1
terminated for convenience in accordance with 24 CFR 85.44.
9. AUTOMATIC TERMINATION: This Contract shall terminate at the discretion of the
City if the United States Government terminates the Neighborhood Stabilization
Community Development Block Grant Program or terminates the Project that is
the subject of this Contract.
10. TERMINATION OF CONTRACT FOR CAUSE: Developer and City recognize that the
City is the governmental entity which executed the grant agreement received
pursuant to the City's application and that City is responsible for the proper
performance of the Project. If Developer fails to fulfill in a timely and proper
manner its obligations under this Contract to undertake, conduct or perform the
Project identified in this Contract, or if Developer violates any state laws or
regulations or local ordinances or regulations applicable to implementation of
the Project, or if Developer violates any provisions of this contract, City shall have
the right to terminate this contract by giving at least five days written notice to
Developer of the effective date of termination.
Even if City terminates the Contract, Developer shall remain liable to City for all
damages sustained by City due to Developer's failure to fulfill any provisions of
this Contract, and City may withhold any reimbursement payments form
Developer for the purpose of set-off until the exact amount of damages due to
City from Developer is determined. Developer hereby expressly waives any and
all claims for damages for compensation arising under this contract except as
set forth in this section in the event of such termination. The City may also, in lieu
of termination and at its discretion, take any action, as stated in 24 CFR 85.43,
subdivision (a), sections 1 to 5, to enforce this Agreement.
1 1. CONTRACT ADMINISTRATION: The Housing Manager of the City of Chula Vista
shall administer this Contract on behalf of the City. The Chief Executive Officer of
the San Diec1o Community Housing Corporation shall administer this contract on
behalf of the Developer. Within a reasonable time after the City makes a
request, Developer shall give the City progress reports or other documentation as
required by the City's Administrator to audit Developer's performance of this
Contract.
12. RECORDS AND REPORTS: The Developer shall maintain records and make such
reports as required by the City of Chula Vista to, but not limited to, enable the
City to analyze Developer's project. All records of the Developer related to this
Contract or work performed under the Contract shall be open and available for
inspection by HUD and/or City monitors and auditors during normal business
hours.
13. RETENTION: The Developer shall retain all financial records, supporting
documents, statistical records, and all other records pertinent to the Agreement
for a period of five (5) years. The retention period begins on the date of the
submission of the Grantee's annual performance and evaluation report to HUD
in which the activities assisted under the Agreement are reported on for the final
time. Notwithstanding the above, if there is litigation, claims, audits, negotiations
or other actions that involve any of the records cited and that have started
before the expiration of the five-year period, then such records must be retained
NSP Developer Agreement Pagel of 1 1
until completion of the actions and resolution of all issues, or the expiration of the
five-year period, whichever occurs later.
14. DATA: The Developer shall maintain data demonstrating eligibility (low-
moderate locations) for services provided. Such data shall include, but not be
limited to exact location of the work performed, and a description of service
provided. Such information shall be made available to City monitors or their
designees for review upon request.
15. DISCLOSURE: The Developer understands that client information collected
under this contract is private and the use or disclosure of such information, when
not directly connected with the administration of the City's or Developer's
responsibilities with respect to services provided under this contract, is prohibited
by the state of Federal law privacy laws unless written consent is obtained from
such person receiving service and, in the case of a minor, that of a responsible
parent/guardian.
16. QUARTERLY REPORTS/ANNUAL REPORT: Developer shall provide the City with a
quarterly report, submitted no later than 15 days after the last day of the
previous quarter, which includes a narrative of the services provided, progress
towards meeting the timeline goals stated in the contract, and an itemized
accounting of the expenditures of CDBG funds during the previous quarter.
Failure to submit quarterly reports in a timely manner will result in withholding of
CDBG funds until the report has been submitted. Quarterly Performance Reports
are due October 15 (lst Quarter), January 15 (2~d Quarter), April 15, (3~d Quarter)
and July 15 (4th Quarter). The Annual Performance Report will also be due July
15.
17. INDEMNIFICATION: City shall not be liable for, and Developer shall defend,
indemnify, and hold the City, its officers, agents, employees and volunteers
harmless from and against any and all claims, deductibles, self-insured retentions,
demands, liability, judgments, awards, fines, mechanics' liens or other liens, labor
disputes, losses, damages, expenses, charges or costs of any kind or character,
including attorneys' fees and court costs by this Contract arising either directly or
indirectly from any act, error, omission or negligence of Developer or its officers,
employees, agents, Developers, licensees or servants, contractors or
subcontractors, including without limitation, claims caused by the concurrent
act, error, omission or negligence, whether active or passive, of City, and/or its
agents, officers, employees or volunteers. However, Developer shall have no
obligation to defend or indemnify City from a claim if it is determined by a court
of competent jurisdiction that such claim was caused by the sole negligence or
willful misconduct of City or its agents or employees.
Developer and its successors, assigns, and guarantors, if any, jointly and severally
agree to indemnify, defend (with counsel selected by City) reimburse and hold
City and its officers, employees and agents harmless from any claims,
judgments, damages, penalties, fines, costs, liabilities (including sums paid in
settlement of claims) or loss, including attorneys' fees, consultant's fees, and
experts' fees which arise during or after the contract term for any losses incurred
in connection with investigation of site conditions, or any cleanup, remedial,
removal or restoration work required by any hazardous materials laws because
NSP Developer Agreement Page8 of 11
of the presence of hazardous materials, in the soil, ground water or soil vapors on
the premises, and the release or discharge of hazardous materials by Developer
during the course of any alteration or improvements of the Premises by
Developer, unless hazardous materials are present solely as a result of the gross
negligence or willful misconduct of City, its officers, employees or agents. The
indemnification provided by this section shall also specifically cover costs
incurred in responding to:
a. Hazardous materials present or suspected to be present in the soil, ground
water to or under the Property before the commencement date;
b. Hazardous materials that migrate, flow, percolate, diffuse, or in any way
move on to or under the Property following the commencement date;
c. Hazardous materials present on or under the Property as a result of any
discharge, release, dumping, spilling (accidental or otherwise), onto the
Property during or after the term of this Contract by any person, corporation,
partnership or entity other than City.
Funding from this program is a result of a Federal Grant, should Federal funding
be terminated for any reason, City is not liable for any consequence of any type
resulting directly or indirectly from the termination of federal funding and
Developer agrees, in addition to any other indemnification provision set forth in
this agreement, to indemnify, hold harmless, and defend the City against any
claim, cause of action, or any form of liability as a result of, directly or indirectly,
funding termination.
The foregoing indemnities shall survive the expiration or termination of the
contract any or any transfer of all or any portion of the Premises, or of any
interest in this Contract and shall be governed by the laws of the State of
California.
18. AUDIT COSTS: Developer shall reimburse City for all costs incurred to investigate
and audit Developer's performance of its duties under the Contract if Developer
is subsequently found to have violated the terms of the Contract.
Reimbursement shall include all direct and indirect expenditures incurred to
conduct the investigation or audit. City may deduct all such costs from any
amount due Developer under this Contract.
19. ENTIRE AGREEMENT: This Contract and referenced Attachments and Exhibits
constitutes the entire agreement of the parties and supersedes any previous oral
or written understandings or contracts related to the matters covered herein.
20. MODIFICATION. This Contract may not be modified except by written
amendment executed by each party.
21. ACKNOWLEDGEMENT OF FUNDING: Developer shall identify the City of Chula
Vista as the source of funding, or, if applicable, one of the sources of funding in
public announcements that are made regarding the Project.
Acknowledgement of the City's funding roles, for example, should be included in
publicity materials related to the Project. In addition, Developer agrees that the
NSP Developer Agreement Page9 of 11
City shall be apprised of any special events linked to the Project so that a review
can be made on what role, if any, the City would assume.
22. INSURANCE: Developer agrees to comply with the insurance requirement set
forth in Attachment "B" and/or any additional insurance requirements requested
by the City, as the City deems appropriate. Failure to acquire and maintain the
required insurance is a basis to take an enforcement action, or terminate this
agreement.
23. NO WAIVER: No failure, inaction, neglect or delay by City in exercising any of its
rights under this Contract shall operate as a waiver, forfeiture or abandonment
of such rights or any other rights under this Contract.
24. NOTICE: Any notice or notices required or permitted to be given pursuant to this
Contract shall be personally served by the party giving notice or shall be served
by certified mail. Notices shall be sufficient if personally served on or if sent by
certified mail, postage prepaid, addressed to:
Developer: City:
San Diego Community Housing Corp. City of Chula Vista
Chief Executive Officer Housing Manager
6160 Mission Gorge Road., Suite 204 276 Fourth Avenue
San Diego, CA 92120 Chula Vista, CA 91910
IN WITNESS WHEREOF, the Parties have executed this contract as of the date first written
above.
CITY OF CHULA VISTA
James D. Sandoval,
City Manager, City of Chula Vista
APPROVED AS TO FORM
Bart Miesfeld
City Attorney
ATTEST
City Clerk
NSP Developer Agreement Page10 of 11
IN WITNESS WHEREOF, the Parties have executed this contract as of the date first written
above.
CITY OF CHULA VISTA
James D. Sandoval,
City Manager, City of Chula Vista
APPROVED AS TO FORM
Bart Miesfeld
City Attorney
ATTEST
City Clerk
SAN DIEGO COMMUNITY HOUSING y
CORPORATION
~i.-~-1
J. bert St. Germain,
ief Executive Officer
Attachment A: Scope of Work
Attachment B: Insurance Requirements
Attachment C: Income Limits
Attachment D: Disclosure Form
Exhibit 1: Deed of Trust
Exhibit 2: Note Secured by Deed of Trust
Exhibit 3: Declaration of Covenants, Conditions, and Restrictions (NSP Program)
NSP Developer Agreement
Page 11 of 1 1
16-16
ATTACHMENT "A"
SCOPE OF WORK
SAN DIEGO COMMUNITY HOUSING CORPORATION (DEVELOPER) has a certain project
to be implemented with Neighborhood Stabilization Program (NSP) Community
Development Block Grant (CDBG) Program funds. The work to be accomplished
includes the following:
Developer:
• Shall utilize Neighborhood Stabilization Program (NSP) funding for purchase and
rehabilitation of foreclosed and abandoned properties for use of permanent
rental housing in NSP eligible areas and provide project management and
oversight of services for certain aspects of the NSP, including management and
maintenance of affordable rental properties, hereinafter referred to as
"Project(s)."
• Shall perform a subsidy layering analysis to determine financial feasibility of the
project factoring in affordability period and rent levels as described in the City
NSP Plan.
• Obtain additional financing to finance the acquisition and/or rehabilitation.
• NSP funds will be available for gap financing.
• Submit information of each proposed property to be acquired with NSP funds
for City review and approval prior to acquisition.
• Shall negotiate a discount purchase price (minimum 1 % of appraised value) for
certain identified abandoned and/or foreclosed residential properties from
lenders/property owners in accordance with NSP guidelines, and shall perform
due diligence to ensure that all properties acquired have clear marketable title.
• Properties purchased, rehabilitated, and leased under this agreement may only
be used to benefit eligible households earning less than fifty 50% (percent) of
the Area Median Income (AMI) and at Home Investment Partnerships Program
rent levels as defined in 24 CFR Part 92.252(a), (c), (e) and (f), and 92.254, as
defined by the NSP and the City's Annual Funding Plan Amendment.
• The cost of acquisition and/or rehabilitation of properties purchased under the
NSP are eligible expenses under this agreement.
• Shall carry out the Project under this Agreement in accordance with the
guidelines and regulations of the Neighborhood Stabilization Program as
authorized under Title III of Division B of the Housing and Economic Recovery
Act of 2008 (HERA), as amended.
• Shall use the City of Chula Rehabilitation Standards and at a minimum comply
with applicable laws, codes, and other requirements relating to health and
safety, quality, and habitability in order to rent such homes and properties.
• Shall obtain any needed permits from the City of Chula Vista.
• Will competitively bid the rehabilitation and submit a copy of the bid package
and specifications for City review and approval. The project shall be
advertised to solicit the most responsive and responsible bidder. Developer
shall notify potential bidders that this is a federally funded NSP project that
includes local, Federal, and State requirements. The applicable Davis-Bacon
decision rate shall be included in the bid package, if applicable.
• Check the Excluded Parties List to ensure Contractors are not debarred or
NSP Developer Agreement Attachment "A"
1 6-1 7 Pagel of 20
suspended.
• Developer shall incumber the title to the NSP eligible affordable housing
project(s) using the City's Deed of Trust (Exhibit 1), Note Secured By Deed of
Trust (Exhibit 2), and Declarations of Covenants, Conditions and Restrictions
(Exhibit 3) to be recorded at time of escrow securing the City's financial and
property interest in the project(s) and affordability period (minimum 55 years).
• With regard to the NSP eligible affordable housing project(s), Developer shall
execute and use, be bound by and abide by the terms of, and cause to be
encumbered the title of property acquired under the Project(s) as stated in the
attached City's Deed of Trust (Exhibit 1), Note Secured By Deed of Trust (Exhibit
2), and Declarations of Covenants, Conditions and Restrictions (Exhibit 3) to be
recorded at time of escrow securing the City's financial interest in the project(s)
and affordability period (minimum 55 years). Exhibits 1 Ito 3 are hereby
incorporated by reference into this agreement.
City:
• The City will provide Developer with a reasonable developer fee (not to exceed
10% of total portfolio of assisted projects), related to NSP-assisted housing
rehabilitation or construction activities, at a level approved by the City.
• The City shall provide Developer with Deed of Trust (Exhibit 1), Promissory Note
(Exhibit 2), and Covenant Agreement (Exhibit 3) to be recorded at time of
escrow securing the City's financial interest in the project(s) and affordability
period (minimum 55 years).
• The City shall provide the Voluntary Acquisition form to acquire properties using
NSP funds.
• City shall provide Developer with maps of NSP eligible areas as approved by
the Department of Housing and Urban Development.
• City shall provide technical assistance to Developer to ensure NSP program is
carried out successfully and in compliance with HUD regulations.
The Scope of Services outlined above shall not be altered without written approval of
the City.
Performance Measurement: Create a minimum of 4 rental units serving households
earning less than 50% of the Area Median Income for the City of Chula Vista.
CDBG National Objective: Very Low Income Residents at or below 50 (%) Percent
Area Median Income
A. TIME SCHEDULE: DEVELOPER will make all good faith and reasonable efforts to
fullfill the project by June 30, 2010, or earlier.
B. BUDGET: DEVELOPER shall make all good faith and reasonable efforts to
complete the work under this Contract within the following budget. In no case
shall DEVELOPER be entitled to, nor shall City reimburse DEVELOPER, more than
10% developer fee and not more than $1,000,000 for work performed under this
Contract.
1 6-18 Attachment "A" -Scope of Work
Page 2 of 3
In addition to the required quarterly reports identified in Section 12 of this CONTRACT,
the Developer shall document all clients served to ensure that at least 51 percent of
those served are at or below 50 percent of the Area Median Income as established by
the U.S. Department of Housing and Urban Development (HUD). This information is to
be collected and compiled semi-annually and submitted to the City each January 15
and July 15 during the affordability period and shall be submitted to the City of Chula
Vista Development Services Department -Housing Division upon receipt of a written
request and at the time of any monitoring of project records.
Developer shall also submit to the City in a timely manner other reports as
requested/required by HUD and/or the City including, but not limited to
Contractor/Subcontractor: Semi-Annual Labor Standards Enforcement Reports (HUD-
4710), Annual Minority Business Enterprise Activity Reports (HUD-2516), Section 3 Reports
(HUD-60002) and provide, as requested by HUD and/or the City, information necessary
to prepare the Grantee Consolidated Annual Performance and Evaluation Report
(CAPER), Consolidated Plan, Annual Plan and other such reports and/or plans.
Attachment "A" -Scope of Work
16-19 Page 3 of 3
ATTACHMENT "B"
INSURANCE REQUIREMENTS
Contractor/Developer must procure insurance against claims for injuries to persons or damages
to property that may arise from or in connection with the performance of the work under the
contract and the results of that work by the Developer/Contractor, his agents, representatives,
employees or subcontractors and provide documentation of same prior to commencement or
work. The insurance must be maintained for the duration of the contract.
Minimum Scope of Insurance
Coverage must be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence Form
CG0001)
2. Insurance Services Office Form Number CA 0001 covering Automobile Liability, codel (any
auto).
3. Workers' Compensation insurance as required by the State of California and Employer's
Liability Insurance.
Minimum Limits of Insurance
Developer/Contractor must maintain limits no less than:
1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and
(Including operations, property damage. If Commercial General Liability insurance
products and completed with a general aggregate limit is used, either the general
operations, as applicable.) aggregate limit must apply separately to this project/location
or the general aggregate limit must be twice the required
occurrence limit.
2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.
3. Workers' Compensation Statutory
Employer's Liability: $1,000,000 each accident
$1,000,000 disease-policy limit
$1,000,000 disease-each employee
Deductibles and Self-Insured Retentions
Any deductibles orself-insured retentions must be declared to and approved by the City. At
the option of the City, either the insurer will reduce or eliminate such deductibles orself-insured
retentions as they pertain to the City, its officers, officials, employees and volunteers; or the
Developer/Contractor will provide a financial guarantee satisfactory to the City guaranteeing
payment of losses and related investigations, claim administration, and defense expenses.
Other Insurance Provisions
The general liability, automobile liability, and where appropriate, the worker's compensation
policies are to contain, or be endorsed to contain, the following provisions:
1. The City of Chula Vista, its officers, officials, employees, agents, and volunteers are fo
be named as additional insureds with respect fo liability arising out of automobiles
owned, leased, hired or borrowed by or on behalf of the Developer/contractor, where
applicable, and, with respect to liability arising out of work or operations performed by
or on behalf of the Developer/contractor including providing materials, parts or
equipment furnished in connection with such work or operations. The general liability
additional insured coverage must be provided in the form of an endorsement to the
Attachment "B" -Insurance Requirements
1 6-20 Page 1 of 2
Developer's/contractor's insurance using ISO CG 2010 (11 /85) or its equivalent.
Specifically, the endorsement must not exclude Products /Completed Operations
coverage.
2. The Developer's/contractor's insurance coverage must be primary insurance as it
pertains to the City, its officers, officials, employees, agents, and volunteers. Any
insurance or self-insurance maintained by the City, its officers, officials, employees, or
volunteers is wholly separate from the insurance of the Developer/contractor and in no
way relieves the Developer/contractor from its responsibility to provide insurance.
Each insurance policy required by this clause must be endorsed to state that coverage
will not be canceled by either party, except offer thirty (30) days' prior written notice to
the City by certified mail, return receipt requested.
4. Coverage shall not extend to any indemnity coverage for the active negligence of the
additional insured in any case where an agreement to indemnify the additional insured
would be invalid under Subdivision (b) of Section 2782 of the Civil Code.
5. Developers/Contractor's insurer will provide a Waiver of Subrogation in favor of the City
for each required policy providing coverage during the life of this contract.
Acceptability of Insurers
Insurance is to be placed with licensed insurers admitted to transact business in the State of
California with a current A.M. Best's rating of no less than A V. If insurance is placed with a
surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines
Insurers (LESLI) with a current A.M. Best's rating of no less than A X. Exception may be made for
the State Compensation Fund when not specifically rated.
Verification of Coverage
Developer/Contractor shall furnish the City with original certificates and amendatory
endorsements effecting coverage required by this clause. The endorsements should be on
insurance industry forms, provided those endorsements conform to the contract requirements.
All certificates and endorsements are to be received and approved by the City before work
commences. The City reserves the right to require, at any time, complete, certified copies of
all required insurance policies, including endorsements evidencing the coverage required by
these specifications.
Subcontractors
Developer/Contractor must include all subcontractors as insureds under its policies or furnish
separate certificates and endorsements for each subcontractor. All coverage for
subcontractors are subject to all of the requirements included in these specifications.
Attachment "B" -Insurance Requirements
Page 2 of 3
16-21
Bonding Requirements
Prior to commencement of rehabilitation, Developer shall file with the City on the
approved forms, the surety bonds in the amounts and for the purposes noted below.
The surety must posses a minimum rating from A.M. Best Company of A-VII. and be
listed as an acceptable surety on federal bonds by the United States Department of
the Treasury. Developer shall pay all premiums and costs thereof and incidental
thereto, as security for payment of persons named in California Civil Code- Section
3181 or amounts due under Unemployment Insurance Code with respect to Work or
Labor performed by any such claimant. All alterations, time extensions, extra and
additional work, and other changes authorized by the Specifications, or any part of
the Contract, may be made without securing consent of the surety or sureties on the
contract bonds. Each bond shall be signed by both Developer and the sureties.
Should any surety or sureties be deemed unsatisfactory at any time by the City, notice
will be given Developer to that effect, and Developer shall forthwith substitute a new
surety or sureties satisfactory to the Developer. No further payment shall be deemed
due or will be made under the Contract until the new sureties qualify and are
accepted by the City.
i. A bid guarantee from each bidder equivalent to five percent of
the bid price. The ~~bid guarantee" shall consist of a firm
commitment such as a bid bond, certified check, or other
negotiable instrument accompanying a bid as assurance that the
bidder will, upon acceptance of his bid, execute such
contractual documents as may be required within the time
specified.
ii. A performance bond on the part of the developer for 100
percent of the contract price, as determined from the prices in
the bid form, and shall insure the faithful performance by
developer of all work under the Contract. It shall also insure the
replacing of, or making acceptable, any defective materials or
faulty workmanship.
iii. A payment bond on the part of the contractor for 100 percent
of the contract price, as determined from the prices in the bid
form, and shall inure to the benefit of persons performing labor or
furnishing materials in connection with the work of the proposed
Contract. This bond shall be maintained in full force and effect
until all work under the Contract is completed and accepted by
the City, and until all claims for materials and labor have been
paid.
Attachment "B" -Insurance Requirements
1 fi-22 Page 3 of 3
ATTACHMENT "C"
2009 San Diego Income Limits
Median Income: $74,900
Extremely ~ ery
Low Income Low Income Low Income
Fa~a~ 30% 35% 40% 50% 60% 65% 70% 80%
size Income Income Income Income Income Income Income Iuco~ne
oIv'E $17,350 $20,250 $23,150 $28,900 $34,680 $37,600 $40,450 $46,250
Two $19,850 $23,100 $26,450 $33,050 $39,660 $42,950 $46,250 $52,900
TREE $22,300 $26,000 $29,750 $37,150 $44.580 $48,350 $52.000 $59,500
Fovx $24,800 $28,900 $33,050 $41,300 $49;560 $53,700 $57,800 $66,100
r~'E X26,800 $31,200 $35.700 $44.600 $53,520 $58,000 $62,400 $71,400
sIx $28,750 $33,500 $38,350 $47,900 $57,480 $62,300 $67,050 $76;700
sEVEIv $30,750 $35,850 $41,000 $51.200 $61,440 $66,600 $71,650 $81,950
EIGHT $32,750 $38,150 $43.650 $54,500 $65,400 $70,900 $76,300 $87,250
*Income Limits 80% and Below are Based on HUD Formula Income Limits Adjusted for High Housing Cost
Area
Attachment "C" -Income Limits
Page 1 of 1
16-23
ATTACHMENT "D"
Redevelopment and Housing
Disclosure Statement
Pursuant to Council Policy 1 Ol -Ol ,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:
List the names of all persons having a financial interest in the project that is
the subject of the application or the contract. e.g., owner, applicant,
contractor, subcontractor, material supplier.
2. If any person* identified pursuant to (1) above is a corporation or partnership,
list the names of all individuals with a $2000 investment in the business
(corporation/partnership) entity.
3. If any person* identified pursuant to (1) above is anon-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.
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.
5. Has any person* associated with this contract had any financial dealings with
an official** of the City of Chula Vista as it relates to this contract within the
past 12 months? Yes No
If Yes briefly describe the nature of the financial interest the official** may
have in this contract.
Attachment "D" -Disclosure Form
Page 1 of 2
16-24
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 $340 (or an item of equivalent) to an official**
of the City of Chula Vista in the past twelve (12) months? (This includes being
a source of income, money to retire a legal debt, gift, loan, etc.)
Yes No
If Yes, which official** and what was the nature of item provided?
Date:
Signature of Developer
Print or type name of Developer
* Person is defined as: any individual, firm, co-partnership, joint venture,
association, social club, fraternal organization, corporation, estate, trust,
receiver, syndicate, any other county, city, municipality, district, or other political
subdivision, -or any other group or combination acting as a unit.
** Official includes, but is not limited to: Mayor, Council member, Planning
Commissioner, Member of a board, commission, or committee of the City,
employee, or staff members.
Attachment "D" -Disclosure Form
Page 2 of 2
16-25
EXHIBIT 1
NO CHARGE ON THIS DOCUMENT
FOR THE BENEFIT OF A PUBLIC
AGENCY
Recording Requested By:
City Clerk
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
And When Recorded Mail To:
City Clerk
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
DEED OF TRUST
THIS DEED OF TRUST is dated as of the of , 20 , by San Diego Community
Housing Corporation, A California Non-Profit ("Trustor"), whose address is 6160 Mission Gorge
Road, Suite 204 San Diego, CA 92120, Attention: J. Robert St. Germain,
and ("Trustee") and THE CITY OF CHULA VISTA, a public body, corporate
and politic (the "Beneficiary"), whose address is 276 Fourth Avenue, Chula Vista, California, 91910.
TRUSTOR HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with
power of sale, all that property in the City of Chula Vista, County of San Diego, State of California
(the "Property"), described as:
(See Legal Description -Exhibit "A")
FOR THE PURPOSE OF SECURING:
(1) Payment of the indebtedness evidenced by a promissory note of even date herewith executed
by Trustor, in the principal sum of DOLLARS ($XXX,000), 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;
Neighborhood Stabilization Program
Cit y Council Resolution No. 2009-
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(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 (1) above;
(4) The performance of each agreement of Trustor under that certain "Loan Agreement" dated
by and between Trustor ("Borrower" therein) and Beneficiary ("City" therein) on file in the
Office of Beneficiary;
(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; and
(6) The performance of each agreement of Trustor under that certain "Developer Agreement"
dated September , 2009, terms and conditions of which bind the Property and run with the land
and which are being assumed by Trustor. Notwithstanding anything set forth herein to the contrary
this Deed of Trust expressly does not secure any obligations, covenants, indemnities or other
agreements of the Trustor, San Diego Community Housing Corporation, - or their successors or
assigns, under: (i) that certain Developer Agreement between San Diego Community Housing
Corporation and Beneficiary.
A. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES:
Maintenance and Repair
(1) 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 maybe 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 of law; and to
cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the
Property may be reasonably necessary.
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Cit y Council Resolution No. 2009-
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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.
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.
3
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Cit y Council Resolution No. 2009-_
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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 City 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, Memorandum of First Right of Refusal, Affordable Housing
Agreement and the Declaration of Covenants and 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
Redevelopment Agency and Housing Authority of the City of Chula Vista.
(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.
B. THE PARTIES AGREE THAT:
Condemnation Award
(1) 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 Paragraph A(2) of this Deed of Trust for
the disposition of proceeds of fire or other insurance.
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Cit y Council Resolution No. 2009-_
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Waiver of Late Payments
(2) 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
(3) 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
(4) 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 subj ect 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
(5) 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 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
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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
(6) 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 of the recital. Any person, including Trustor,
Trustee, or Beneficiary, may purchase at the sale.
After deducting all costs, fees, and expenses of Trustee and Beneficiary under this paragraph,
including costs of procuring evidence of title incurred in connection with sale, Trustee shall apply the
proceeds of sale to payment of: all sums expended under the terms of this Deed of Trust, not then
repaid, with accrued interest at the amount allowed by law in effect at the date of this Deed of Trust;
all other sums then secured by this Deed of Trust; and the remainder,. if any, to the person or persons
legally entitled to the remaining proceeds.
(7) 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
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.
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General Provisions
(8) 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
(9) 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
(10) 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
(11) 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
(12) The recitals contained in any reconveyance, trustee's deed, or any other instrument executed
by Trustee from time to time under the authority of this Deed of Trust or in the exercise of its powers
or the performance of its duties under this Deed of Trust, shall be conclusive evidence of their truth,
whether stated as specific and particular facts, or in general statements or conclusions. Further, the
recitals shall be binding and conclusive upon Trustor, its heirs, executors, administrators, successors,
and assigns, and all other persons.
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Attorneys' Fees
(13) 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
(14) 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 maybe 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
(15) 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:
Beneficiary: City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attention: Director of Redevelopment and Housing
If to Trustor: San Diego Community Housing Corporation
6160 Mission Gorge Road Suite 204
,San Diego, CA 92120
Attention: J. Robert St. Germain
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.
(16) Trustor shall permit Beneficiary and its agents or representatives, to inspect the Property at
any and all reasonable times, upon prior written notice of not less than twenty-four (24) hours (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.
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(17) The City Loan provided for herein shall be subject to the restrictions set forth in the Loan
Agreement and Declaration of Covenants and Restrictions and Trustor hereby consents to such
restrictions and agrees to be bound thereby. Such restrictions shall be in addition to and not in
limitation of the rights of Beneficiary expressly set forth in this Deed of Trust.
(18) For purposes of this Deed of Trust, "Hazardous Materials" mean and include any hazardous,
toxic or dangerous waste, substance or material including, without limitation, flammable explosives,
radioactive materials, asbestos, hazardous wastes, toxic substances and any materials or substances
defined as hazardous materials, hazardous substances or toxic substances in (or for purposes of) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as
amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801,
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.), and those
substances defined as hazardous wastes in §25117 of the California Health and Safety Code or as
hazardous substances in §25316 of the California Health and Safety Code or in any regulations
promulgated under either such law, any so-called "Superfund" or "Superlien" law, or any other
federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter in effect.
(19) 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
19(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
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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 Properly due to any foreclosure sale (judicial or nonjudicial) or a
deed in lieu of foreclosure, or (ii) acts or omissions of Beneficiary or its agents.
(c) Trustor has not received any notice of (i) the happening of any event involving the
use, spillage, discharge, or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting
Trustor or the Properly or (ii) any complaint, order, citation or notice with regard to air emissions,
water discharges, noise emissions or any other environmental, health or safety matter affecting
Trustor or the Property ("Environmental Complaint") from any person or entity, including, without
limitation, the United States Environmental Protection Agency ("EPA"). If Trustor receives any
such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter,
oral and written notice of same to Beneficiary.
(d) Without limitation of Beneficiary's rights under this Deed of Trust, Beneficiary shall
have the right, but not the obligation, to enter onto the Property or to take such other actions as it
deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise
deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice
from any person or entity, including without limitation, the EPA, asserting the existence of any
Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true,
could result in an order, suit or other action against Trustor affecting any part of the Property by any
governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its
security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the
exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor
upon demand together with 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.
(20) 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.
(21) This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California.
(22) If the Property is allocated to aloes-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
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cause) of an existing tenant of any low-income unit or any increase in the gross rent with respect to
such unit not otherwise permitted under Section 42 for a period of three (3) years after the date the
Property is acquired by foreclosure or deed in lieu of foreclosure. Beneficiary acknowledges the
provisions of Section 42 of the Code and agrees that, if and to the extent applicable to Beneficiary in
connection with the Property, Beneficiary will comply therewith.
Recourse During Construction and Non-Recourse After Filing of Certificate of Completion.
(23) Following the timely completion of the acquisition & rehabilitation Project, as defined in the
Loan Agreement, measured by the timely filing of a Certificate of Completion, nothing herein
contained shall be deemed to cause Trustor (or any of its partners, or any of their respective directors,
officers, employees, partners, principals or members) personally to be liable to pay or perform any of
its obligations evidenced hereby, and the Beneficiary shall not seek any personal or deficiency
judgment on such obligations, and the sole remedy of the Beneficiary with respect to the repayment
of the loan evidenced by this Note shall be against the .Property; provided, however, that the
foregoing shall not in any way affect any rights the Beneficiary may have (as a secured party or
otherwise) hereunder or under this Deed of Trust, or any other rights the Beneficiary may have to: (a)
recover directly from the Trustor any funds, damages or costs (including, without limitation,
reasonable attorneys' fees and costs) incurred by the Beneficiary as a result of fraud, intentional
misrepresentation or intentional waste by Trustor; or (b) recover directly from the Trustor any
condemnation or insurance proceeds, or other similar funds or payments attributable to the Property
which under the terms of this Deed of Trust should have been paid to the Beneficiary, and any costs
and expenses incurred by the Beneficiary in connection therewith (including, without limitation,
reasonable attorneys' fees and costs).
(24) All individuals signing this Deed of Trust for a parry 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.
(25) This Deed of Trust is subordinate and subject to the Deed of Trust, Assignment of Rents and
Leases dated as of executed by Trustor for the benefit of
(the "Trustee") and recorded concurrently herewith, and the rights
hereunder are otherwise subj ect to the terms and conditions of that certain Subordination Agreement
recorded concurrently herewith and executed by the Trustor, the Beneficiary, the City of Chula Vista,
the Trustee, and.
[Signature Pages to Follow]
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SAN DIEGO COMMUNITY HOUSING CORPORATION, a California Non-Profit
By:
J. Robert St. Germain, Chief Executive Officer ,President
CITY OF CHULA VISTA
By:
James D. Sandoval, City Manager
Approved as to form:
By:
Bart Miesfeld, City Attorney
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REQUEST FOR FULL RECONVEYANCE
To be used only when note has been paid
Dated
TO
Trustee:
The undersigned is the legal owner and holder of all indebtedness secured by the within
Deed of Trust. All sums secured by said Deed of Trust have been fully paid and satisfied; and
you are hereby requested and directed, on payment to you of any sums owing to you under the
terms of said Deed of Trust, to cancel all evidences of indebtedness, secured by said Deed of
Trust, delivered to you herewith together with the said Deed of Trust, and to reconvey, without
warranty, to the parties designated by the terms of said Deed of Trust, the estate now held by you
under the same.
By
By
By
By
MAIL RECONVEYANCE TO:
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ACKNOWLEDGMENT
State of California
County of San Diego
On
200_, before me, personally appeared,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that byhis/her/their signature(s) on the instrument the person(s), or the entity on behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
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Cit y Council ResoWoon No. 2009- ,
(Seal)
14
16-39
ACKNOWLEDGMENT
State of California )
County of San Diego )
On , 200_, before me, personally appeared,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the persons} whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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ACKNOWLEDGMENT
STATE OF CALIFORNIA )
S.S.
COUNTY OF SAN DIEGO )
On 20_ before me, Donna Norris, City Clerk, personally appeared
who proved to me on the basis of satisfactory evidence to be the person
whose name is subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument, the person, or the entity
upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct
WITNESS my hand and official seal
Donna Norris, CMC
City Clerk of the City of Chula Vista
(SEAL)
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Exhibit "A"
Legal Description
All that certain real property situated in the City of Chula Vista, County of San Diego, State of
California, described as follows:
INSERT LEGAL DESCRIPTION
APN:
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EXHIBIT 2
DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND THE DEED OF TRUST
SECURING IT MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION
BEFORE RECONVEYANCE WILL BE MADE.
NOTE SECURED BY DEED OF TRUST
("Note")
San Diego, California
1. Principal and Interest.
Month Day, 2009
FOR VALUE RECEIVED, and in consideration of the Loan Agreement of [event date]
herewith ("Loan Agreement"), made by the City of Chula Vista, a public body, corporate and politic
("City"), San Diego Community Housing Corporation , A California Non-Profit Organization
("Maker") promises to pay to City, 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 ONE MILLION THOUSAND DOLLARS ($1,000,000), or so much as is advanced,
together with accrued interest from the date of disbursement on the disbursed and unpaid principal at
the interest rate of three percent (3 %) simple interest per annum. This Note is issued pursuant to the
Loan Agreement dated 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,
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 subordinate and junior during
the acquisition and rehabilitation period to the Deed of Trust dated as of for
the benefit of as trustee.
2. Term of Loan, Due Date and Right of Prepayment.
Due Date and Right of Prepayment. Payments shall be due and payable on the earlier of the
following dates:
(a) Commencing one year after tenant occupancy agreement, by the City, but no later
than June 30th, 2010, and on July 1St of each year thereafter, Maker shall calculate its Residual
Receipts for the previous calendar year, as defined herein, submit to City a report calculating
payment or nonpayment of Residual Receipts and pay to City its proportionate share of the Residual
Receipts for the previous calendar year, ,with the other fifty percent (50%) of Residual Receipts
retained by Maker.
(b) Fifty-f>,ve (55) years from the City's issuance of the initial tenant occupancy, but no
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later than sixty (60) years from the date of this Note, when all principal and accrued interest shall be
due and payable.
(c) 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; or
(d} Upon default under the terms of this Note as referenced in Paragraph 4 hereof, when
all principal and accrued interest shall be due and payable.
"Residual Receipts" shall mean "Gross Revenue" (as defined below) from the Properly minus the
"Reasonable Operating Expenses" (as defined below) for the same period, calculated on a calendar
year basis, as provided in the Residual Receipts Computation form attached hereto as Exhibit "A".
All calculations of Residual Receipts during the preceding calendar year shall be subject to
verification and approval by the City.
"Gross Revenue" shall mean all revenue, income, receipts, and other consideration actually received
from operation and leasing of the Property. Gross Revenue shall include, but not be limited to: all
rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received
for the dwelling units, all cancellation fees; proceeds from vending and laundry room machines; the
proceeds of business interruption or similar insurance to the extent not applied to the Bond Loan; the
proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project or applied to
the Bond Loan; and condemnation awards for a taking of part or all of the Project for a temporary
period to the extent not applied to the Bond Loan or used to repair or restore the Project. Gross
Revenue shall not include tenants' security deposits, loan proceeds, capital contributions or similar
advances or payments from reserve funds.
"Reasonable Operating Expenses" shall mean any and all reasonable and actually incurred costs
associated with the ownership, operation, use or maintenance of the Property, calculated in
accordance with generally accepted accounting principles. Such expenses may include, without
limitation, property and other taxes and assessments imposed on the Project; premiums for property
damage, liability and business interruption insurance; utilities not directly paid for by the tenants
including, without limitation, water, sewer, trash collection, gas and electricity, maintenance and
repairs including, without limitation, pest control, landscaping and grounds maintenance, painting
and decorating, cleaning, general repairs, and supplies; tenant relocation costs and expenses; license
fees or certificate of occupancy fees required for operation of the Project; general administrative
expenses directly attributable to the Property including, without limitation, advertising and
marketing, security services and systems, and professional fees for legal, audit and accounting;
property management fees and reimbursements including on-site manager and assistance manager
expenses; any fees and distributions payable to Maker's Investor Limited Partner pursuant to the
Partnership Agreement, including but not limited to the Cumulative Priority Distribution, as such
terms are defined in the Partnership Agreement, debt service on any loan made to the Maker by any
partner of the Maker to cover operating expenses; a reasonable property management fee, cash
deposited into a reserve for capital replacements of the Project improvements and an operating
reserve (and such other reserve accounts required with respect to the Bond Loan) in such amounts as
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are required by the Bond Issuer/Lender and as may be reasonably required by Project equity
investors; tenant services costs; debt service payments (excluding debt service due to City from
Residual Receipts of the Project) on financing for the Project; reasonable supplemental management
fees; and payment of the Deferred Development Fee. In no event shall expenditures, including
attorneys' fees or litigation costs, normally required to be paid out of the Replacement Reserve, be
treated as Reasonable Operating Expenses unless specifically approved in writing by the City. For
purposes of the foregoing definition of "Reasonable Operating Expenses," any property management
fee or partnership management fee which is paid to Maker or an affiliate of Maker shall at no time
exceed an amount as is customary and standard for affordable housing projects similar in size, scope
and character to the Project. Notwithstanding the foregoing, for purposes of this calculation,
Reasonable Operating Expenses shall not include the following: principal and interest payments on
any debt subordinate to the City Note (except debt service on loans made to the Maker by a partner
to cover operating expenses, as provided above), depreciation, amortization, depletion or other non-
cash expenses, incentive partnership asset management fees payable to the Maker or its affiliate
(other than the supplemental management fee described above), or any amount expended from a
reserve account. In the event that any of the above costs is incurred partially with respect to the
Project and incurred partially with respect to the commercial retail development located on the
Property, the parties shall mutually agree upon an allocable portion of such costs which shall be
deemed Reasonable Operating Expenses of the Project for the purposes of this Agreement.
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 City, or the then holder of this Note, then all obligations secured by this Note
maybe declared due and payable, at the option of City, or the then holder of this Note. City reserves
the right to approve all sales, transfers, conveyances, additional encumbrances, or dispositions of the
real property which approval shall not be unreasonably withheld 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 City, then upon the sale, transfer, further encumbrance, conveyance, transfer all accrued but
unpaid interest on this Note shall be paid to City, at City's option.
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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 Upon Default.
In the event of any default under the terms of this Note after the expiration of all applicable
cure periods, as set forth in the Loan Agreement, of the Deed of Trust securing this Note, or of the
Loan 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),
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 rehabilitation of the Project within a reasonable period of time shall be
considered an event of default, entitling the City to accelerate the payment of principal and interest
hereunder, as provided in this Section 4.
5. Costs Paid by Maker.
Maker agrees to pay the following costs, expenses, and attorneys' fees paid or incurred by the
holder of this Note, or adjudged by a court: (a) reasonable costs of collection, costs, and expenses,
and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note,
whether or not suit is filed; and (b) costs of suit and such sum as the court may adjudge as attorneys'
fees in any action to enforce payment of this Note or any part of it.
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. Incorporation of the Loan Agreement.
The provisions of the Loan Agreement are expressly incorporated in this Note by this
reference.
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Cit y Council Resolution No. 2009-
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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, City may extend any maturity date or the time for payment of any installment due
hereunder, accept additional security, release any party liable hereunder and release any security now
or hereafter securing this Note. Maker further waives, to the full extent permitted by law, the right to
plead any and all statutes of limitations as a defense to any demand on this Note, or on any deed of
trust, security agreement, guaranty or other agreement now or hereafter securing this Note.
9. Recourse During Acpuisition/Rehabilitationand Non-Recourse After Filing of
Certificate of Completion. 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 Completion, nothing
herein contained 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 to pay or
perform any of its obligations evidenced hereby, and the City shall not seek any personal or
deficiency judgment on such obligations, and the sole remedy of the City with respect to the
repayment of the loan evidenced by this Note shall be against the Property; provided, however, that
the foregoing shall not in any way affect any rights the City may have (as a secured party or
otherwise) hereunder or under the Deed of Trust, or any other rights the City may have to: (a) recover
directly from the Maker any funds, damages or costs (including, without limitation, reasonable
attorneys' fees and costs) incurred by the City as a result of fraud, intentional misrepresentation or
intentional waste by Maker; or (b) recover directly from the Maker any condemnation or insurance
proceeds, or other similar funds or payments attributable to the Property which under the terms of the
Deed of Trust should have been paid to the City, and any costs and expenses incurred by the City in
connection therewith (including, without limitation, reasonable attorneys' fees and costs).
10. Late Charge.
In addition to the foregoing, if any installment due hereunder is not paid within thirty (30)
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 City 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 City's rights and remedies
Neighborhood Stabilization Program 5
Cit y Council Resolution No. 2009-
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hereunder shall be expressed in a writing signed by City. Further waiver by City of any right
hereunder shall not constitute a waiver of any other right, including but not limited to the right to
exercise any and all remedies for a different or subsequent event of default hereunder.
13. Replacement Note.
The undersigned agrees that, in the event that this Note shall become lost or stolen, upon
request of City, the undersigned shall execute a replacement Note incorporating the terms hereof,
provided that City shall furnish a written agreement to indemnify the undersigned against all losses,
costs, and damages arising from a duplicative demand for payment under this Note.
14. Interpretation.
This Note shall be governed and interpreted in accordance with applicable California law.
15. Signature Authority.
All individuals signing this Note for a party which is a corporation, 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 City 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.
16. Subordination.
The indebtedness evidenced by this Note is and shall be subordinate in right of payment to
the prior payment in full of the indebtedness evidenced by a Promissory Note (the "Senior Note") of
even date herewith in the original principal amount of $ issued by Maker, and payable
to the City of Chula Vista- and assigned to "Trustee"), or order, to the
extent and in the manner provided in that certain Subordination Agreement dated as of
between the payee of this Note, the City of Chula Vista, the Trustee, the maker of
this Note. ). The Deed of Trust securing this Note is and shall be subject and subordinate in all
respects to the liens, terms, covenants and conditions of the Acquisition and Rehabilitation Deed of
Trust securing the Senior Note as more fully set forth in the Subordination Agreement. The rights
and remedies of the payee and each subsequent holder of this Note under the Deed of Trust securing
this Note are subject to the restrictions and limitations set forth in the Subordination Agreement.
Each subsequent holder of this Note shall be deemed, by virtue of such holder's acquisition of the
Note, to have agreed to perform and observe all of the terms, covenants and conditions to be
performed or observed by the Subordinate Lender under the Subordination Agreement.
[Signature Page to Follow]
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Maker:
SAN DIEGO COMMUNITY HOUSING CORPORATION
a California non-profit organization
By:
J. Robert St. Germain, Chief Executive Officer
San Diego Community Housing Corporation NSP Agreement-
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Exhibit "A"
Residual Receipts Computation Form
In the event of any contradiction between this Exhibit A and the Loan Documents, then the Loan Documents
shall prevail.
Payments from Residual Receipts, if any, shall be made as described in the Promissory Note in accordance
with the Loan Agreement dated .The Maker shall annually provide the Commission a
Computation of Residual Receipts Report, which provides the basis for the Maker's calculation of the payment
or nonpayment of Residual Receipts to the City. The form of the Computation of Residual Receipts is
attached.
"Residual Receipts" is specifically defined as the "Gross Revenue" (as defined below) from the Project minus
the "Reasonable Operating Expenses" (as defined below) for the same period.
a. "Gross Revenue" shall mean all revenue, income, receipts, and other consideration actually received
from operation and leasing of the Project. Gross Revenue shall include, but not be limited to: all rents, fees
and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling
units, all cancellation fees; proceeds from vending and laundry room machines; the proceeds of business
interruption or similar insurance to the extent not applied to the Bond Loan; the proceeds of casualty insurance
to the extent not utilized to repair or rebuild the Project or applied to the Bond Loan; and condemnation awards
for a taking of part or all of the Project for a temporary period to the extent not applied to the Bond Loan or
used to repair or restore the Project. Gross Revenue shall not include tenants' security deposits, loan proceeds,
capital contributions or similar advances or payments from reserve funds.
b. "Reasonable Operating Expenses" shall include any and all reasonable and actually incurred costs
associated with the ownership, operation, use or maintenance of the Property, calculated in accordance with
generally accepted accounting principles. Such expenses may include, without limitation, property and other
taxes and assessments imposed on the Project; premiums for property damage, liability and business
interruption insurance; utilities not directly paid for by the tenants including, without limitation, water, sewer,
trash collection, gas and electricity, maintenance and repairs including, without limitation, pest control,
landscaping and grounds maintenance, painting and decorating, cleaning, general repairs, and supplies; tenant
relocation costs and expenses; license fees or certificate of occupancy fees required for operation of the Project;
general administrative expenses directly attributable to the Property including, without limitation, advertising
and marketing, security services and systems, and professional fees for legal, audit and accounting; property
management fees and reimbursements including on-site manager and assistance manager expenses; any fees
and distributions payable to Maker's Investor Limited Partner pursuant to the Partnership Agreement,
including but not limited to the Cumulative Priority Distribution, as such terms are defined in the Partnership
Agreement, debt service on any loan made to the Maker by any partner of the Maker to cover operating
expenses; a reasonable property management fee, cash deposited into a reserve for capital replacements of the
Project improvements and an operating reserve (and such other reserve accounts required with respect to the
Bond Loan) in such amounts as are required by the Bond Issuer/Lender and as may be reasonably required by
Project equity investors; tenant services costs; debt service payments (excluding debt service due to City from
Residual Receipts ofthe Project) on fmancing for the Project; reasonable supplemental management fees; and
payment of the Deferred Development Fee. In no event shall expenditures, including attorneys' fees or
litigation costs, normally required to be paid out of the Replacement Reserve, be treated as Reasonable
Operating Expenses unless specifically approved in writing by the City. For purposes of the foregoing
defmition of"Reasonable Operating Expenses," any property management fee or partnership management fee
San Diego Community Housing Corporation NSP Agreement_
16-50
which is paid to Maker or an affiliate of Maker shall at no time exceed an amount as is customary and standard
for affordable housing projects similar in size, scope and character to the Project. Notwithstanding the
foregoing, for purposes of this calculation, Reasonable Operating Expenses shall not include the following:
principal and interest payments on any debt subordinate to the City Note (except debt service on loans made to
the Maker by a partner to cover operating expenses, as provided above), depreciation, amortization, depletion
or other non-cash expenses, incentive partnership asset management fees payable to the Maker or its affiliate
(other than the supplemental management fee described above), or any amount expended from a reserve
account. In the event that any of the above costs is incurred partially with respect to the Project and incurred
partially with respect to the commercial retail development located on the Property, the parties shall mutually
agree upon an allocable portion of such costs which shall be deemed Reasonable Operating Expenses of the
Project for the purposes of this Agreement.
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San Diego Community Housing Corporation NSP Agreement-
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COMPUTATION OF RESIDUAL RECEIPTS
FOR THE YEAR ENDING
Maker:
Project Address:
Date Prepared:
Please complete the following information and execute the certification at the bottom of this form.
Gross Income
Please report Gross Income for the year ending
Rental Payments (including Section 8 tenant assistance
payments, if any) (1)
Interest Income (2)
on the following lines:
Additional Income Related to Project Operations (for
example, laundry income, and any other income from the project) (3) $
Total Gross Income (add lines 1, 2, and 3) (4)
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San Diego Community Housing Corporation NSP Agreement_
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COMPUTATION OF RESIDUAL RECEIPTS
FOR THE YEAR ENDING
Annual Operating Expensesi
Please report Annual Operating Expenses incurred in relation to the operations of the Project for the year
ending on the following lines:
Administrative Expenses (5) $
Marketing Expenses (6) $
Professional Fees (7) $
Utilities (8) $
Contract Services (9) $
Cleaning (Painting Supplies, Ground Supplies) (10) $
Taxes and Insurance (11) $
Other Expenses Related to Operations of the Project:
a) Other -City Monitoring Fees (12a) $
b) Other -Service Amenities (12b) $
(Note: in no event shall Service Amenities exceed $ per year,)
c) Other -Replacement Reserves ($ per year (12c) $
d) Other - GP Asset Management Fee (12d) $
(Note: in no event shall Asset Management Fees exceed $ per year.)
Total Annual Operating Expenses* (13) $
(Add lines 5, 6, 7, 8, 9, 10, 11 and 12)
(Note: in no event shall this form's total Annual Operating Expenses (line 13) exceed the
$ /unit/year (with inflation adjustment) as specifically stated under the Promissory Note's
definition of "Operating Expenses" (at page 2 of the Promissory Note).
Net Operating Income (subtract line 13 from line 4) (14) $ *
i Do not include expenses unrelated to the Project's operations, such as depreciation, amortization, accrued principal and
interest expenses on deferred payment debt, or charges to replacement reserves.
11
San Diego Community Housing Corporation NSP Agreement-
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COMPUTATION OF RESIDUAL RECEIPTS
FOR THE YEAR ENDING
Debt Service On Loans Senior to City Loan: (15)
Total Cash Flow (16)
Residual Receipts for Year Ending
• (Line 16 Above) $
• Percentage of Residual Receipts to be
paid to the City (as shown in
the Promissory Note by and between
the City and Maker
dated ) X 50%
• Amount Payable to the City $
IN ACCORDANCE WITII LOAN AGREEMENT SECTION 4.12, AUDITED FINANCL4L
STATEMENTS MUST BE ATTACHED TO THIS REPORT.
San Diego Community Housing Corporation NSP Agreement-
12
16-54
COMPUTATION OF RESIDUAL RECEIPTS
FOR THE YEAR ENDING
The Executive Director or Chief Financial Officer of the Maker shall execute the following
certification.
I, hereby, certify under penalty of perjury under the laws of the State of California that the information provided
in this form is true, complete, correct and accurate in all respects and I understand that the City of Chula Vista
will rely on this certification in calculating the residual receipts payments to which it is entitled. I further certify
under penalty of perjury under the laws of the State of California that the undersigned have/has the authority to
execute this certification and that sufficient and adequate due diligence has been performed by the undersigned or
at the undersigned direction to make these certifications. The undersigned further acknowledges that a false
statement made under penalty of perjury to a state agency has potential criminal consequences and ramifications.
Executed this _ day of , 20_ at Chula Vista, California
MAKER:
By:
(Print or Type Name)
(Title)
13
San Diego Community Housing Corporation NSP Agreement_
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EXHIBIT 3
NO CHARGE ON THIS DOCUMENT
FOR THE BENEFIT OF PUBLIC
AGENCY
Recording Requested By:
CITY CLERK
CITY OF CHULA VISTA
276 FOURTH AVENUE
CHULA VISTA, CALIFORNIA 91910
And When Recorded Mail To:
CITY CLERK
CITY OF CHULA VISTA
276 FOURTH AVENUE
CHULA VISTA, CALIFORNIA 91910
DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS
(NSP PROGRAM)
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
("Declaration") is dated as of the _tn day of _, by San Diego Community Housing Corporation, a
California Non-Profit ("Declarant") in connection with that certain parcel of real property
("Property") located in the City of Chula Vista, County of San Diego, California, described in
Exhibit "A" attached hereto and incorporated herein by reference.
RECITALS
A. Declarant has acquired title to the Property, and will be rehabilitating, with the aid of
a Loan obtained from the CITY OF CHULA VISTA, a public body, corporate and politic ("City" or
"City of Chula Vista"), a ~) unit housing project (the "Project"). One of the (~
units will be occupied as a manager's unit, and will not be income or rent restricted. (Insert if
property requires an onsite manager.
B. Concurrently with the recordation of this Declaration, the City is funding the Loan
secured by a deed of trust on the Property. The rehabilitation and acquisition financing of the Project
are described in the Loan Agreement dated , ,including any amendments thereto
("Agreement"). This Loan is to assist Declarant in the acquisition and rehabilitation and operation of
the Proj ect and is secured by a deed of trust ("Trust Deed"). The Agreement and Trust Deed by City
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was conditioned in part upon the recordation of a document setting forth certain restrictions upon the
use and sale of the Property.
C.
NOW, THEREFORE, Declarant hereby declares that the Property shall be subject to the
covenants, conditions and restrictions set forth below:
Restrictive Covenants.
(a) ( 1 NSP Units. Declarant agrees and covenants on behalf of itself and its
successors and assigns, and each successor in interest to the Property, that, residential dwelling units
at the Project shall be set aside and reserved as affordable NSP Units restricted pursuant to the NSP
Program ("NSP Units") for fifty-five (55) years. The ~) NSP Units shall be rented only to
"Eligible Tenants" as further defined herein, whose income does not exceed fifty percent (50%) of
Area Median Income, as adjusted for family size. The maximum monthly rents for the
~) NSP Units shall not exceed fifty (50%) of the monthly income of a family earning
fifty percent (50%) of Area Median Income, as adjusted for family size appropriate for the unit. The
(_) NSP units will be restricted for fifty-five (55) years under the NSP Program, thereafter
those NSP units shall be restricted as set forth in the Developer Agreement. For purposes of this
Declaration, the current annual median income shall be the median income defined by the
Department of Housing and Urban Development ("HUD") as the then current median income for the
San Diego Standard Metropolitan Statistical Area, established periodically by HUD and published in
the Federal Register, as adjusted for family size. The rents and the occupancy restrictions shall be
deemed adjusted, from time to time, in accordance with any adjustments that are authorized by HUD
or any successor agency. In the event HUD ceases to publish an established median income as
aforesaid, City may, in its sole discretion, use any other reasonably comparable method of computing
adjustments in median income or NSP Program rents. 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.
(b) Rent Adjustment. An adjustment of rents may be performed annually in accordance
with the rents contained in the applicable City or HUD rent schedules published by the City of Chula
Vista for the affected unit type and updated from time to time. However, in no event shall the rents
of the NSP Units, as adjusted, exceed the maximum rents chargeable for NSP Units. Further, the
rents charged shall be further limited as set forth in Paragraph 14, hereof.
(c) Certification of Eli ibility. The eligibility of each prospective tenant under the
restrictions set forth hereinabove shall be certified by Declarant which shall submit such certification
and all supporting documentation on forms provided to Declarant by City for a determination of
tenant eligibility, prior to tenant occupancy. No NSP Unit maybe rented to a prospective tenant or
occupied by any person unless and until City has determined that the prospective tenant or occupant
is an Eligible Tenant (defined above) as determined in accordance with the provisions set forth
below in Sections 3 and 4.
2. Affordable Marketing Plan Com liance. Declarant shall submit for the approval of the City a
management and marketing plan for rental of all of the low income units at the Property except for
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Cit y Council Resolution No. 2009-
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the provisions describing selection of tenants, is hereby incorporated into this Declaration, as if fully
set forth herein. Notwithstanding the foregoing, to the extent the management and marketing plan
for rent of all of the low income units at the Property is subject to the review and approval of the
U.S. Department of Housing and Urban Development ("HUD"), Declarant agrees to submit such
plan to HUD for its review and approval and to make such changes as are required pursuant to any
regulations, policies and/or handbooks of HUD. Declarant's marketing of units shall be in
compliance with federal and state fair housing law. All tenants of each NSP 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, as
maybe amended from time to time. This Declaration shall supersede those requirements only to the
extent related to preferences for the selection of residents as specified in the Development
Agreement. Notwithstanding the Development Agreement, 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 a
mobile home or trailer park community in which the household's residence was located, and the
household resided in such housing as the household's primary place of residence for at least two
years prior to such action or event.
(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 Priority. Other Low Income Households who do not meet the criteria for
first priority or second priority above.
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(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 and HUD regulations.
3. Determination; Annual Requalification. Determination of tenant eligibility for the NSP Units
shall be as provided in Development Agreement, which section is hereby incorporated into this
Declaration, as if fully set forth herein. Notwithstanding the foregoing, Declarant agrees to comply
with any and all regulations, policies and/or handbooks of HUD, with respect to determination of
tenant eligibility with respect to the NSP Units to the extent the HUD requirements vary in any way
from the requirements of the Development Agreement. Failure by Declarant to timely comply with
the tenant qualification and requalification process described in this Paragraph 3 shall constitute a
material default under the Agreement.
4. This Section Intentionally Left Blank.
5. 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.
6. No Student Dependents. The term "Eligible Tenant" shall not include any student dependent
as defined in the U.S. Internal Revenue Code, unless the taxpayer (upon whom the student in
question is dependent) resides in the same dwelling unit.
7. Income of Co-tenants, etc. The income of all co-tenants and/or non-dependent occupants
shall be taken into account in determining whether a household is an Eligible Tenant hereunder.
8. 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 a tenant being over income, Declarant shall give sixty (60) days written notice to such tenant to
vacate the NSP Unit. The vacated NSP Unit shall be rented to an Eligible Tenant. Notwithstanding
anything to the contrary in this Declaration, no occupant of a NSP Unit who previously and properly
qualified as an Eligible Tenant shall be evicted by Declarant because such occupant fails to requalify
as an Eligible Tenant, because such occupant exceeds the income limits set forth herein, except as
provided for in Section 92.252 of the Code of Federal Regulations, as amended from time to time.
Rather, the next available unit at the Proj ect that is not then a NSP Unit shall be designated as a NSP
Unit to replace the NSP Unit of the occupant in question. Further, subject to the HOME rents set
forth in City's NSP Plan, such occupant shall commence paying rent equal HOME rents (as that
term is defined in 24 C.F.R. §92.203}, effective from and after the date of such failure to requalify, as
further described in Paragraph 9(b) and (d), hereof. The over-income tenant shall continue to be
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Cit y Council Resolution No. 2009-
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considered an Eligible Tenant until evicted. When a NSP Unit Eligible Tenant's gross income
exceeds the "low income" definition as defined in CFR 92.252(1), then the tenant shall commence
paying rent equivalent to thirty percent (30%) of the Tenant's adjusted income, subject to the fair
market rent ceiling as set forth in HOME Regulation 92.252(1) and the next available comparable
sized and configured unit shall be designated as a NSP Unit. The tenant shall continue to be
considered an "Eligible Tenant" until evicted, provided this continued occupancy otherwise complies
with all applicable NSP Program requirements. When the NSP and Tax Credit Funds are involved,
an over-income tenant shall be governed by the Tax Credit Program provisions for so long as tax
credits are involved. Thereafter, the NSP and HOME rules specified in this agreement shall apply.
9. Fhysical Condition of NSP Units. The NSP Units shall be maintained as provided in the
Development Agreement, which section is hereby incorporated into this Declaration, as if fully set
forth herein. Notwithstanding the foregoing, after completion of the Project, Declarant shall
continually maintain the NSP Units in a condition which satisfies the Housing Quality Standards
promulgated by HUD under its Section 8 Program, as such standards and interpreted and enforced by
City under its normal policies and procedures. City shall have the right to inspect the NSP Units
from time to time, on reasonable notice and at reasonable times, in order to verify compliance with
the foregoing maintenance covenant.
10. City Monitoring Functions. It is contemplated that, during the term of this Declaration, City
will perform the following monitoring functions: (A) preparing and making available to Declarant
any general information that City possesses regarding income limitations and restrictions which are
applicable to the NSP Units; (B) reviewing the applications of prospective occupants of the NSP
Units, and determining eligibility of such persons as Eligible Tenants; (C) reviewing the
documentation submitted by Declarant in connection with the annual certification process for
Eligible Tenants described in subparagraph (1)(a)(i) and (iii) above; and (D) inspecting the NSP
Units to verify that they are being maintained in accordance with Paragraph 9 above.
Notwithstanding the foregoing description of City's functions, Declarant shall have no claim or right
of action against City based on any alleged failure to perform such function, except that Declarant
may reasonably rely upon City's tenant eligibility determination.
11. Desi>~nation of NSP Units. The (~ NSP Units, will be designated prior to initial
occupancy at the discretion of City. Such designations maybe changed by Declarant, provided that
the units before and after the change in designation are of the same unit types, size, features and
otherwise comply with the terms of 24 C.F.R. §92.252(j)..
12. Compliance with NSP and Local Regulations. Declarant shall comply with all regulations,
policies and procedures promulgated by HUD, or by City in connection with the NSP Program, under
which the Loan is being made to Declarant. Declarant's failure to so comply shall constitute a
material default hereunder, entitling City to the remedies set forth in Paragraph 24, below.
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 written consent of the
City whose approval shall not be reasonably withheld or delayed. Any prospective purchaser,
transferee or assignee shall expressly promise in writing to be bound by all of the provisions hereof,
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Neighborhood Stabilization Program
Cit y Council Resolution No. 2009-
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including the covenant in this Paragraph 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 by Declarant. In no event, shall all of the rent, including the
portion paid by the Eligible Tenant and any other person or entity, collected by Declarant (the "Total
Rent") for any rent restricted unit exceed the amount of rent set forth herein. 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 herein, for any NSP Unit. Should Declarant receive Total Rent
in excess of the allowable maximum rent set forth herein, then the provisions of the Development
Agreement
15. Loan Payments. Annual payments as referenced in the Agreement shall be made to City as
provided in the Agreement.
16. Term. This Declaration and the covenants and restrictions contained herein shall be effective
upon the completion of the acquisition and rehabilitation of the units and shall remain in full force
and effect for a period fifty-five (55) years from their effective date with respect to the portion of
Section 2, above, relating to preferences for selection of tenants. Completion of acquisition and
rehabilitation shall be the date upon which a temporary certificate of occupancy is issued for all units
within the Project.
17. Covenant Against Discrimination. Declarant covenants on behalf of itself and its successors
and assigns, and each successor in interest to the Property, not to discriminate against any tenant or
prospective tenant of any NSP Unit on the basis of their race, age, sexual orientation, marital status,
color, religion, sex, handicap, or national origin, as referenced in all applicable state, local and
federal law.
18. Compliance with Loan Agreement. Declarant covenants on behalf of itself and its
successors and assigns, and each successor in interest to the Property that it shall comply with all
terms and conditions of the Agreement and such terms and conditions shall be incorporated herein by
this reference.
19. Enforcement. Declarant expressly agrees and declares that City 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, City 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. `
20. Attorneys' Fees. In the event that any litigation for the enforcement or interpretation of this
Declaration, whether an action at law or arbitration or any manner of non judicial dispute resolution
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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.
21. 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.
22. 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.
23. Recordation. This Declaration shall be recorded in the Office of County Recorder of San
Diego, California.
24. Remedies. In the event of any breach of this Declaration by Declarant and/or the City the
rights and remedies of Declarant and the City shall be as set forth in the Development Agreement
shall apply with respect to the same. The Development Agreement is hereby incorporated into this
Declaration, as if fully set forth herein.
25. MorEg~ees 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.
26. Property Mana e~ment. The Property and the NSP Units shall be maintained and operated as
provided in the Developer Agreement, which section is hereby incorporated into this Declaration, as
if fully set forth herein.
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27. 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, all provisions required under the terms of the
NSP Program, including the following provisions:
(a) Additional Lease Provisions/Annual Income Verification. Lessee agrees, upon
written request from the Landlord or the City, 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 City. 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.
(b) Term of Lease for NSP Units. LESSEE has been made aware by Landlord that the
unit being leased was assisted with NSP funds. Under the provisions of 24 CFR 92.253, a lease must
be for a period of not less than one (1) year unless the parties agree by mutual agreement that the
term of the lease be less. The Lessee acknowledges by initialing in the space below that it has been
made aware of the provisions of 24 CFR 92.253.
28. 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 Agreement or any
of the Loan Documents, City acknowledges that pursuant to Section 42 of the Internal Revenue
Code, the Project will be subject to a regulatory agreement by and between Declarant and the
California Tax Credit Application Committee (the "TCAC Regulatory Agreement"). City further
acknowledges and agrees that the terms and conditions of the TCAC Regulatory Aigreement 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 Agreement or any of the Loan Documents.
29. Signature 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 City 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.
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30. Priori .This Declaration is_subordinate and subject to the Acquisition/Rehabilitation
Deed of Trust, executed by the Declarant in favor of the Trustee named therein for the benefit of
("Trustee") and recorded concurrently herewith, and is
otherwise subject to the terms and conditions of that certain Subordination Agreement recorded
concurrently herewith and executed by the Declarant, the City of Chula Vista.
31. No Novation; Conflicts Between Agreements. None of this Declaration, the Agreement, the
Trust Deed or any other document being executed in conjunction herewith or therewith is a novation
of, and do not supersede or otherwise amend all or any part of the Affordable Housing Agreement,
the terms of which are hereby ratified and agreed to by Declarant. In the event of any conflict
between all or any part of the Development Agreement and this Declaration, the terms of this
Declaration shall apply.
Declarant:
San Diego Community Housing Corporation
A Non-Profit Organization
By:
J. Robert St. Germain, Chief Executive Officer
CITY OF CHULA VISTA,
A public body, corporate and politic
By:
James D. Sandoval, City Manager
Approved as to form:
By:
Bart Miesfeld, City Attorney
ATTEST:
By:
Donna Norris, City Clerk
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ACKNOWLEDGMENT
State of California
County of San Diego
On , 200_, before me, personally appeared,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same inhis/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
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Cit y Council Resolution No. 2009-
(Seal)
16-65
ACKNOWLEDGMENT
State of California )
County of San Diego )
On , 200_, before me, personally appeared,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
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ACKNOWLEDGMENT
STATE OF CALIFORNIA )
S.S.
COUNTY OF SAN DIEGO )
On 20_ before me, Donna Norris, City Clerk, personally appeared
who proved to me on the basis of satisfactory evidence to be the person
whose name is subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument, the person, or the entity
upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct
WITNESS my hand and official seal
Donna Norris, CMC
City Clerk of the City of Chula Vista
(SEAL)
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Exhibit "A"
Legal Description
APN:
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Neighborhood Stabilization Program
Cit y Council Resolution No. 2009-
16-68