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Home My WebLink AboutRESO 5835. . • ,. J' ..._ .. 0'"'1-~~~~AL 'W RESOLUTION NO. 5835 W ~'\. -......111" ·· RESOLUTIOtl OF THE COUNCIL Of' ':'.'HE CITY OF PALO ALTO • • AUTHOMlZING A GUARANTY AGREEMENT COVERING CERTAIN OBLIGATI0~$ OF COMMUNITY HOUSING, I~C. WHEREAS, COMMUNITY HOUSING, INC. (herein called •corporation•) intends to enter into a loan aqreeaent with SECURITY PACIFIC NATIONAL BAU (herein called •sank"), and BANK is willing to enter into such ac}reement on the condition that the CITY OF PALO ALTO (herein called •city•) guarantee the p~~i~rman~e of CORPORATION: and WHEREAS, CORPORATION intend~ t1 use said loan to improve =ertain real prcperty, situat!d in the City of Palu Alto, Cou~ty of Sa"t, Clara, State of Calif Jrnia. for the purpose of constructinq thtreon additional health care facilities; and WHEREAS. it is ant will be to the dir~ct benJ'>fit, advantage, and best interest of CITY that such guaranty ~c )ivcn and such agreement er tered into in order ttiat CORPORATION may further i11.pr0ve said prop- erty for said eventual use: and WHEREAS, the Louncil of the City of Palo Alto previously passen Resolution No. 5445 on Aug~st 22, 1977, guaranteeing CORPORATION'S performance for the purc;1ase and initial improvement of the real property; NOW, THEREFORE, the Council of the City of Palo Alto hereby RES~LVES as follows: SEC~ION 1. Tc induce BANK to enter into su· h agreement, and in consideration thereof, the Mayer of the City of Palo Alto hereby is auth 1rized and directed, for and in thi! name of Cl:. Y, to guaranty CORPORATION 1 s performance of such agreement to BANK, as provided in the guaranty agreement ct.tached hereto and by refer~nce incor")Orated herein as though f~lly aet forth. SECTION 2. The Controller of the City of Palo Alto hereby is authorized ano directed tr establish i.1 the general fu:-id a loan guar- anty contingent reserve for an amount equal to the princip~l sum of the loan guaranteed by said agreement, said reserve acc:ount to be aaintaineu for the term of loan agreement. SECTION 3. This guaranty ~·aall replace the previous guaranty which-r~ hereoy cancelleJ_ . INTRODUCED AND PASSED: September 15' 1980 AYBS: Brenner, EyPrly, Fletcher, Henderson, Levy, Sher, Witherspoon NOES: ,None ABSTBN'l'IONS: Renzel ABSENT: Fazzino Aftn~ '1~ ~~ APPltOVID AS TO FORM: l~..!i. c. <lk:~ ~cTI~t~y-it:rrt~o~r~n~e~y~...;.;;..;.m.;.i...-. ____ ____ ATTACHMENT II • • • /\ G R E-~ E M i: N '!' • 4127 ---------~ UUAH/\N'l'Y /\Gltl-;l·:Mi::;N't -r..:OMNUN I 'L'Y UOU!i ! Nt:, 1 N<.:. F01t SlGNA Tt! -• ON FILE IN c1::~/Ef OR1Gr~Al THIS AGRE:EMtNT, made and entered into th is ;} I ST · l.ERK·.s OFlf day of IV cv e ;:"' b.e. r , 19 80, by and be twe~n the CI'tY OF P.f\LO ALTO, a n&unicipal corporation of California, here«. ·laf ter .:ef erced to as "City,• SEcu1u-i·y l'ACIFIC NA'l'lONAL .. BANK, ~ost Offic~ Box 640, Palo Alto, California 94302, hereinafter referred to as "Dank,• and COMlriUNI'l'Y HOUSING, INC., •nonprofit cvrp9ra~ion organized exclusively for . charitable purposes, w:_th offices at 656 Lytton Avenue, Palo Alto, California 94301, her~inafter referred to as "Corpora- tion"; W I T N E S S E T H: WHEREAS, COR.PORATION an<l DANK have entered into loan agreements whereby COkPORATICN will be obligated to repay lo.ans totaling $626,383.00 plus a $~0,000 addition, and BANK is willing to enter into ~uch agreements on the condition that : I P CITY guarantee the performance of CORPORATION: and WHEREAS, CORPORA'l'ION has U,jed s~id loans to purchaso that real property and the improvements thereon situated in the City of Palo Alto, County ot Santa Clara, State of Califorr.ia, described as Lots 10, 11, 12, and 13 as shown in Santa Clara C~unty Assessor's Uook 120, page 3, locat~d ~n the block bounded by Webster Street, University Avenue, - ' e Hiddlef iel<l road, and Lytton Ave r\uc, st41nd in9 in the name: of Louis A. Allen, for the purpose of constructing thereon a health care facility; and WHEREAS, it is and will ·be to the direct benefit, advantage, and best interest of CITY that such 9uaranty be . given and such agreement entered into in order that COitPORA-·";'.... ~ .. TION m~y continue to improve said property for the public purpose.of a health care facility; ~ow, THEREFORE, 1~ consideration of their mutual co7enants, ·the parties hereto agree as follows: . 1. OBLIGATION GUARANTY; CITY gua~antces to 3ANK the obligations of CORPORATION as contained in the loan a9reements, attached hereto and by reference made a part hereof as though fully set forth herein; provided, however, . that the liability of CITY shall not exceed the sum of -. $976,383. This guaranty shall not apply to any obliga- tion created after actual receipt by CORPOR~'l'I.ON and DANK of written notice by CITY of its revocation ae to future . transactions. Upon any default of COR.PORA~ION, BANK may, at . . its option, proceed directly and at pnce, without nQtice, against CITY to collect and recover the full amount of the . liability hereunder, or any portion thereof. without proceedin9 against CORPOltATION or any other person or foreclosin9 upon, selling, oc otherwise disposin~ of, or -2 - • .. I I . ):· • • . collecting, or applyinq .:1t1y pl"operty, real or person~!, it may then have as security lor such indebtedness. c1•ry hereby waives the right to require OANK to proceed against CORPORAT.ION or to pursue ·any .other remedy, waives the right to have the property of COl1POltA1'ION first applied to the ·· discharg~ of this indebtedness, and waives the pleading of any statute of limitations 3S. a defense ~o the obli9a~ion hereunder. CITY assumes the responsibil.i ty for being and keeping itself informed of the financial condition of CORPORATION and of ali pther circumstances bearing upon the risk of non-payment of the indebtedness which diligent inquiry would r~veal, and that absent a request for such "-~~==:.~.:.~~ .. m i,.,y '-.&.1'Y, DANK shall have no duty to advise CITY of information known to it regarding such condition or any such circumstance. CITY further agrees, without demand, immediately to reimburse BANK for all costs and expenses, including attorneys• fees, incurred in the enforcement of this Guaranty or the c.ollection of such indebtedness. 2. SE.:CORI'l"Y "l'O CITY. At the clos i n9 Of the purcha=~ of the premises by CORPORATION eonte~vlatcd herein, CORPORA- TION shall execute and deliver a first deed o! trust on the preaises, in a forna and upon terms satisfactory to the City . Attorney o.t. CITY, namin9 Cll'Y as beneficiary thereof to secure CO~PORATION's obligation to CITY in the event of . d&fault which requires payment by CITY to DANK under this • -3 -- J I t -t f t t • g~aranty ~grcement. l. SUBOROINATivN. Any indebtedness Of CnRPORATION now or hereafter held by CITY is he~eby subordinated to any indebtedness of CORPORATION to BANK, and such indebtedness . of CORPORATION to CITY if BANK so requests it shall be collect&C!', enforced, ancl r~ce i ved by cr1·y as trl•s ~ ~e for . . .. BANK apd held as security for perfornunce or the obli9ation of CORPORATION to DANK without reducing or effecting the liability of CITY undet the other provisions of this guaranty. . . 4. FUTUkE USE OF PROPl::RTY. CORPORATION het:eby agrees with the .followin9 ~9nditions regarding use of the premises purchased with this loan: (a) CORPORATION will apply for and make a good .. faith effort to obtain by Novemb~~, 1981, financing under the California Health fta'::ility '- Mortgage lnsurance Program to develop a health care facil°4.ty on t:iis site and to take all other steps reasonable and necesgary to the develop- sent of said faeilitj • • (b) If, for any reason, CORl'ORATIOH is unable to obtain said financin9, CORPORATION wil! investi- gate and pursue alternatives consistent with the o~jective of providing housing, medical, · and other directly-related facilities primarily -4 -- . : \ • to persons of below average incom~. (c) During the period between acquisition of the property and construction activities related to said health care 'facility or other appropriate use, CORPORATION agre~s to use the proper~y consistent with the zoning _proyisions of the Palo Alto Municipal Code and.other relateo municipal <:Odes and regulations. (d) If, by May 9f 1981, CORPORATION has been unable to secure financing for, or is otherwise unable to ~evelop,_ an ~ppropriate use of th~ property as provided in subsection (b) above, CORPOl~ATiON 5 .. agrees to sell the premises on the open market as soon as feasible. Proceeds from such a sale will first be used to pay off the outstanding loan b&lance related to this property. If additiona~ sale proceeds are available, CORPORA- TION agrees to reimburse CITY f~r all direct expenditures incurred in connection with this loan guaranty, e»elusive·of staff salaries and related direct. and indirect expenses • . NOTICES. All notices hereunder shall be given in writing and mailed, posta9e prepaid, by certified m•i~, addressed ~• follows: • -s - .• I • l i I • To c1·rY: e Office ot the City Clnrk 250 llilmilton Avenue Palo Alto, California 94301 'l'O CORPOltA'l'ION Attention of the President at the address of CORPON.A'l'ION recited above. -- To BANK: Attention of the Hanager at the address of BANK recited above. .. 6 .. CONf'LICT OF lNTEl\EST. CORPORATION and BANK certify that no o •• a who has or will have any financial interest under this agreement is an officer or employee of CITY. 7. INDE:PiNI'l'Y. CORPORATION hereby agrees to indern- nify and save harmless CITY, its officers, agents, and employees of and from any and all claims and demands which :may be made against ClTY, i.ts officers, agents, or employees by rea~on of any negligence, active or passive, or willful aisconduct by CORPORATION, its officers, a9ents, or employ- ees arising out of or under this agreement.· a; i\u1'k.t.nhn·1· DIHDING. the. terms;. covenants, and conditions of this agreement "shall apply t9, and shall bind_ the successors, executors, administrators, and assigns of . all parties "hereto. ~. ~AIVER. the waiver by any party of any breach or violation of any term: covenant, or condition of this • -6 - - be deemed to be a waiver: of such term, covenant, condition, ordinance, or law or of any subsequent breach or violation of the ~ame or·of any other termi covenant, condition, ordinance, or law. 'l'he subsequent acceptance by any party of .. any fee or other money which may become dua hereunder shall not be deemed to be a waiver of any preceding brea~h or • • violation by the other party of any term, covenant, or condition of tbis agreement or of any applicable law.or ordinance. 10. COS'l'S AND ATTORNEY'S PBES. The prevailing party in any action brought to enforce the terms of this ·agreement or arising out of this agreement may recover its reasonable costs and attorneys• fees expended in connection with sue~ an action from the other parties. 11. AGREEMENT CON1.'AINS ALL UNOERS'l'l1NDINGS. 'l'his document represents the entire and integrated agreement between CITY, GANK, and CORPORATION and supercedes all prior negotiations, representations, o~ a9reements 1 either written . or oral. This document may He ant<:nded only by wrltten instr~ment, si9ned by CITY, BANK, and CORPONATION. All prbvibions of this agreement arc expressly 'made conditions. 'l'his a9reement shall ~c gavcrned by tha laws of the State of California. -7 -- • .. - IN w Il'N BSS ~·11 e l!t:(.lf' • c l'l'Y. COH i'OJIA'J' l ON' "nd UA N K t have executed this ag<eemcnt the day and yea< f i<st above Written. C!'1'¥ OF PALO ALl'O .. APPROVED AS 'I'O FOHM: ~~ C Cli.tr.'l 'VA fJnAi JI. JA+~ =5-r-. ___,.Ais t:.. CTty Attorney U APPROVEoi· -u -- • • • e COMMUN l '1'1 UOUS I NG, l NC. l J;ts Dy Its ~J}'l'/'\.e= .. Its •. -9 - • \ • e AGREED TO AND ACCEPTED BY:. RESPECTFULLY SUBtvllTTED BY: LYTTON GAR DENS, INC. BLY TH EASTMAN PAINE W_EBBER HEAL TH CARE FUNDING Position Position ------------ Oat~ _ Date __________ _ ~ITY OF PALO ALTO Position ----