HomeMy WebLinkAbout1997-10-20 City CouncilCity of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: Planning and
Community Environment
AGENDA DATE: October 20, 1997 CMR:333:97
SUBJECT:AGREEMENT WITH VETERANS WORKSHOP TO PROVIDE
FUNDS FOR THE ACQUISITION AND OPERATION OF THE
MARGARITA HOUSE
REQUEST
Council is requested to approve an Agreement with Veterans Workshop, Inc. (VWS) to
provide a loan of Community Development Block Grant (CDBG) funds to acquire the fifty
percent ownership interest in the property at 442 Margarita Avenue, Palo Alto now held by
the co-owner VTF Services. The purchase will allow VWS to continue their existing use of
the property as shared housing for seven low-income, disabled veterans.
RECOMMENDATIONS
Staff recommends that the Council:
1)Approve the attached agreement (with its attached form of promissory note) with
VWS to provide a loan of $51,000 of 1997-98 Commtmity Development Block Grant
fimds for acquisition expenses of ~e 442 Margarita Avenue shared housing facility.
2)Authorize the Mayor to execute the agreement in substantially similar form; and
3)Authorize the City Manager to execute any other documents necessary to close the
transaction including, but not limited to, any documents required by the California
Department of Housing and Community Development (HCD).
POLICY IMPLICATIONS
This report does not represent any change to existing City policies.
CMR:333:97 Page 1 of 4
BACKGROUND
VWS is a private, nonprofit organization, providing comprehensive vocational rehabilitation
services to disabled and homeless veterans from the "Next Step Center" located at the Menlo
Park Veterans Administration facility. VWS also operates 72 transitional and shared housing
beds in 12 single family houses and apartment units throughout its Santa Clara and San
Mateo County service area. Margarita House .is a,seven-bedroom, three-bath home that
provides Shared living for seven single adults at rents of about $200 per month for each
person. The current residents are all very low-income and disabled and are either working
in a sheltered workshop or attending a training program. Margarita House was constructed
in 1961 and has been used for special needs housing for veterans for the last 30 years.
VWS acquired the property in 1989 for $325,000, as co-owners with another veteran’s
service nonprofit, Vets Task Force (VTF), now re-named VTF Services. That purchase was
financed with a number of loans and grants, including a $179,173 loan from the California
Dep .amnent of Housing and Community Development (HCD), a $40,000 grant from the City
of Palo Alto CDBG program and about $40,000 in equity from the buyers. Only the HCD
loan remains as an outstanding lien against the property. It is a deferred payment loan which
accumulates interest at three percent annually and is secured by a deed of trust. The current
balance of the HCD loan is about $206,000 due to the addition of deferred interest.
In recent years, VWS has been exclusively responsible for the management and operating
expenses of the Margarita House. VTF now desires to transfer its interest in the property to
VWS in return for a payment of $50,846.23, which it states was its original investment in the
property. An appraisal, completed in April 1996, concluded that the property was worth
$332,000. Using that_value, and deducting the existing balance of the HCD loan, leaves
$126,000 in estimated equity, or about $63,000 for each co-owner.
DISCUSSION
In November 1996, VWS had the house professionally inspected. Rehabilitation cost
estimates were prepared by two different licensed contractors and ranged from $93,000 to
$176,560 depending on the scope of work. Almost every component of the 2,100-square-
foot house needs repair or replacement. There are foundation problems, roof leaks, lack of
insulation, electrical deficiencies, inadequate windows, problems with the heating and air
conditioning systems, and a need for fire safety upgrades. In addition, there are deficiencies
in the house’s layout and the room sizes for its use as shared housing. It is clear that the
property’s physical condition must be improved if it is to continue to be used for shared
housing.
VWS requested $227,560 in its 1997-1998 CDBG funding application, including $51,000
for acquisition.and $176,560 in rehabilitation and related costs. Due to other priorities and
the concem that the rehabilitation needed to be planned more carefully, only the acquisition
was recommended for funding at this time by the CDBG Citizens Advisory Committee and
CMR:333:97 Page 2 of 4
staff. This recommendation was approved by Council on May 12, 1997, as part of the FY
1997-1998 Action Plan for CDBG funds.
By committing funds for this acquisition and the continuation of the property’s use as
disabled veteran’s shared housing, the Council needs to be cognizant of the much larger
financial need for substantial rehabilitation funding in the near future. The alternative of
demolishing the existing house and building a new house with a more suitable design, at a
cost of at least $200,000, is also possible. It is probable that, due to the existing debt on the
property, the funds needed now for acquisition and the cost of rebuilding or repair, the total
invested will exceed the fair market value of the property. However, as a condition of any
further funding, the City can assure the continued low-income use of the property through
recorded agreements and loan documents.
FISCAL IMPACT
The $51,000 in City CDBG funds will be provided in the form of a deferred payment loan
at three percent simple interest payable upon the sale, transfer or change in use of the
property.. The City’s loan will be secured by a deed of trust recorded against the property
in second position behind the HCD loan. The transaction will be handled through an escrow
with a local tire company. Release of the. City’s funds will be contingent upon approval of
this transaction by HCD, delivery of a grant deed or quit claim deed by VTF to VWS and
an acceptable commitment for the issuance of tire insurance for the City’s new loan.
Funding for the $51,000 in acquisition costs is included in the 1997-1998 CDBG Action Plan
approved by Council on May 12, 1997. Funding sources for any future rehabilitation or
construction work can be investigated; however, the most likely source would be the City’s
CDBG funds.
ALTERNATIVES
Council could decide to .deny City funding for this acquisition due to the potential for
rehabilitation or replacement costs toexceed the value of the property. Denial of City
funding could result in the loss of this housing resource for very low-income disabled
veterans unless VWS was able to fund the acquisition from its own resources.
ENVIRONMENTAL ASSESSMENT
Approval of the acquisition fimding agreement is categorically exempt under Section 15326
of the California Environmental Quality Act (CEQA). The provision of CDBG funds for the
project is exempt under the National Environmental Policy Act (NEPA) regulations at 24
CFR Part 58.35 (4).
STEPS FOLLOWING APPROVAl,
According to the terms of the purchase contract for the sale of the property, close of escrow
must occur by October 31, 1997. The property will continue in its present use as a shared
living facility for disabled or previously homeless veterans after VWS completes this
transaction and becomes the sole owner. Staff will work with VWS to evaluate the
CMR:333:97 Page 3 of 4
altematives for addressing the property’s physical condition before the FY 1998-1999 round
of CDBG funding applications are due in December, 1997.
ATTACHMENTS
1.Agreement Between the City of Palo Alto and Veterans Workshop, Inc. For Funding
of Acquisition of the Shared Housing Facility at 442 Margarita Avenue, Palo Alto
PREPARED BY:
REVIEWED BY:
Catherine Siegel, Housing Coordinator
James E. Gilliland, Assistant Planning Official
DEPARTMENT HEAD REVIEW:
KENNETH R. SCHREIBER
Director of Planning and
Community Environment
CITY MANAGER APPROVAL:
Manager
CC:Veterans Workshop, Inc.
VTF Services
CDBG Citizen Advisory Committee
CMR:333:97 Page 4 of 4
Attachment 1
RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:
City of Palo Alto
office of City Attorney
250 Hamilton Avenue
Palo Alto, CA 94301
RECORDED WITHOUT CHARGE.
GOVERNMENT CODE SECTIONS 6103, 27383
SPACE ABOVE THIS LINE FOR RECORDER’S USE
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
VETERANS WORKSHOP, INC. CONCERNING THE CITY’S
FUNDING OF THE ACQUISITION OF THE MARGARITA
HOUSE SHARED HOUSING FACILITY AT 442 MARGARITA
AVENUE, PALOALT0
THIS AGREEMENT is made and entered into on
1997, by and between the CITY OF PALO ALTO, a California municipal
corporation ("CITY"), and the VETERANS WORKSHOP, INC., a California
non-profit public benefit corporation, with offices at 795 Willow
Road, MS I16B6, Menlo Park, California, 94025("VWI") in reference
to the following facts and circumstances:
i. Since 1989, VWI has owned and operated, jointly with
VTF Services, Inc. ("VTF", formerly Vet’s Task Force, Inc.), a
California nonprofit corporation, the house located at 442
Margarita Avenue, PaIo Alto ("Property"), the legal description of
which is more specifically described in Exhibit "A", as an
affordable shared rental housing facility for very low- and low-
income veterans. VTF desires to sell its interest in the Property
to VWI, and VWI has applied for a loan from CITY to cover a portion
of the acquisition expenses that VWIwill incur in acquiring VTF’s
ownership interest, in the Property.
2. There is a severe shortage of affordable rental
housing in Palo Alto, and nearby areas, suitable for shared
housing, and available for use by lower income veterans
participating in vocational rehabilitation and recovery programs.
3. Th~ expenditure of funds for acquisition costs of
existing lower income housing is an eligible activity under the
CDBG Program. The existing and proposed use of the Property is
consistent with CITY’s affordable housing objectives as outlined in
CITY’s United States Department of Housing and Urban Development
("HUD") Consolidated Plan.
4. Pursuant to the provisions of Title I of the Housing
and Community Development Act of 1974, as amended, CITY
appropriated CDBG funds under its fiscal year 1997-1998 budget to
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VWI for the purpose of preserving,
existing use of the Property.
through acquisition, the
IN CONSIDERATION OF the mutual covenants and agreements
specified herein, and subject to its terms and provisions, the
parties to this Agreement hereby agree as follows:
ARTICLE 1 -AGREEMENT COOP~DINATION
i.i CITY
CITY’s city manager shall represent CITY for all purposes
under this Agreement. CITY’s director of planning and community
environment is designated by the city manager as the project
manager, and his designee shall supervise the progress and
execution of this Agreement.
1.2 VWI
The executive director of VWI shall represent VWI for all
purposes under this Agreement and, as the project director for VWI,
shall supervise the progress and execution of this Agreement.
ARTICLE 2 PURPOSE OF AGREEMENT
The purpose of this Agreement is to set forth the
respective duties and responsibilities of CITY and VWI regarding
the CDBG Program funds to be provided by CITY to VWI hereunder for
VWI’s acquisition of VTF’s ownership interest in the Property..
ARTICLE 3 -PROVISION OF FUNDS
3.1 Payment of funds for acquisition expenses
3.1.1 CITY shall loan to VWI the sum of fifty-one
thousand dollars ($51,000), to be used in accordance with the
terms, covenantsr provisions and conditions of this Agreement and
the CDBG Program. VWI shall execute and deliver a promissory note
in favor of CITY ("Note"), as set forth in Exhibit "B", in the
amount of fifty-one thousand dollars ($51,000), to secure the
performance of all terms, covenants, provisions and conditions of
this Agreement. Execution thereof shall occur prior to any
disbursement of funds under this Agreement. The Note shall bear
interest at the rate of three percent per annum. Except as provided
in Article 4.5 herein, no payments of principal and interest are
required during the term of this Agreement. The Note shall be
secured by a deed of trust ("Deed of Trust") on the Property for the
benefit of CITY, as set forth in Exhibit "C". If VWI at any time
fails to comply with the terms, covenants, provisions and
conditions of this Agreement or the Note, the Note shall become
immediately due and payable by VWI.
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3.2 Additional acquisition expenses
The maximum amount payable under this Agreement for
acquisition and related transaction expenses shall be fifty-one
thousand dollars ($51,000). In the event, for any reason, the
amount payable by VWI to any and all sources for acquisition and
related expenses exceeds fifty-one thousand dollars ($51,000), VWI
shall be solely responsible to pay all such excess expenses.
3.3 Disbursement’ of funds
VWI shall open an escrow with the Santa Clara Land Title
Company ("SCT"), 578 University Avenue, Suite A, Palo Alto, CA 94301
under escrow number 00122157, and all loan proceeds to be disbursed
pursuant to the acquisition of VTF’s ownership interest in the
Property and necessary closing and transaction costs shall be
~placed in that escrow, together with all necessary documents of
title, written escrow instructions, and other pertinent
information. CITY will deposit the sum of fifty-one thousand
dollars ($51,000), by negotiable instrument payable to SCT, into
escrow, for a portion of the purchase price of fifty thousand,
eight hundred and forty-six dollars and twenty-three cents
($50,846.23) for VTF’s ownership interest in the Property and the
estimated nine hundred and forty-one dollars ($941.00) in closing
costs. VWI will deposit funds from other sources for the balance
of the acquisition and closing costs as an express condition
hereof, and VWI’s failure to do so shall render this Agreement null
and void.
3.4. Title insurance
At the close of escrow, VWI, at its own cost and expense,
shall secure an ALTA extended coverage lender’s policy of title
insurance, or other form of title insurance acceptable to CITY, for
an amount not less than the amount of the CITY’s loan on the
Property. The policy will name CITY as insured and insure VWI’s
right, title, and interest in the Property and CITY’s lien therein,
and, promptly after the close of escrow, VWI shall provide the
original of the same to CITY.
ARTICLE 4 - VWI’s STATEMENT OF WORK
4.1 General
As express conditions of acceptance of the loan of
$51,000 in CDBG funds from CITY under this Agreement, VWI agrees to
acquire, in fee simple, the ownership interest in the Property now
held by VTF subject .only to such prior liens and exceptions to
title as may be approved in writing by the project manager.
4.2 Budget, eligible uses of CITY funds
Eligible uses of CDBG Program funds are the costs of
acquisition, title insurance, escrow and other closing costs. If
CITY determines that the entire $51,000 of funding authorized by
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CITY under this Agreement is not needed to pay for reasonable,
necessary and eligible Property acquisition costs as described
herein and as approved in advance by the project manager, then CITY
is obligated to disburse only the amount needed by VWI to complete
the acquisition of VTF’s interest in the Property.
4.3 Use, occupancy and rent restrictions
VWI shall operate and maintain the Property as a shared
rental housing facility for occupancy by up to seven (7) very low-
and low-income adults at affordable rents as defined by CITY policy
and HUD regulations for the CDBG Program. Preference for occupancy
shall be accorded to veterans with disabilities. VWI acknowledges
that VWI’s covenant to comply with and its actual compliance with
the provisions of this Section 4.3 hereof is the sole inducement by
which CITY is making the Loan to VWI. In the event of any breach
of this Section 4.3 or of any other covenant orrestriction set
forth in this Agreement by VWI, CITY shall have the right to
exercise all of its rights and remedies, and to maintain any action
at law or suits in equity or other real property proceedings,
including, without limitation, specific performance, to enforce the
covenants and restrictions and the curing of any breach or
violation hereof.
4.3.1. VWI shall continue to own and operate the
Property in compliance with that "Regulatory Agreement - Number 88-
HRL-S-299 Special User Housing Rehabilitation Program Mentally and
Disabled Component" ("SUHRP Agreement") between VWI, VTF and the
California Department of Housing and Community Development, dated
July 18, 1989. Compliance by VWI with the use, occupancy and rent
limitations set forth in the SUHRP Agreement shall be deemed
compliance with this Agreement as long as the SUHRP Agreement
remains in effect.~ In the event that the SUHRP Agreement is
terminated or expires, then VWI shall rent the Property to adults
whose incomes, as are recertified annually, do not exceed the CDBG
low-income limit as established by HUD for the Palo Alto area at
’monthly rents which shall not exceed seventy-five percent (75%) of
the current Section 8 Fair Market rent for an efficiency or studio
unit.
4.4 Records and reports
VWI shall maintain on a current basis complete records,
including books of original entry, source documents supporting
accounting transactions, service records, a general ledger,
canceled checks, rent rolls, and related documents and records to
assure the proper accounting of funds and performance of the terms
of this Agreement. VWI shall furnish any and all information and
repbrts which may be required by CITY and HUD in connection with
this Agreement. VWI shall further permit access to its books,
records and accounts by the representatives and.employees of CITY
and HUD during regular business hours, for the purpose of
investigation or audit to ascertain compliance with all applicable
laws, regulations, rules and orders and for the purpose of
evaluating and monitoring VWI’s compliance with the provisions of
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this Agreement. All such records shall be retained by VWI and made
available to CITY and HUD upon request for review or audit for a
period of at least three (3) years following the expiration or
termination of this Agreement.
4.4olo VWI shall provide CITY copies of all documents
submitted to the State of California pursuant to the SUHRP
Agreement regarding the Property including, without limitation, the
annual reports and operating budget~, schedule of rental income,
applications for rent increases, schedule of expenses, cash flow
analysis, report of account balances, interest payment summary and
management reports.
4.5 Proqram income - CDBG funds
Program income is defined under the laws and regulations
governing the CDBG Program, including the provisions set forth in
24 CFR 570.500(a). VWI shall maintain accounting records for each
of its fiscal years to determine the amount of any CDBG Program
income generated under this Agreement from rental and use of the
Property. VWI shall report and return all CDBG Program income
generated under this Agreement from the Property to CITY in
accordance with all CDBG and HUD laws and regulations, including,
without limitation, those set forth in 24 CFR 570.504, as amended.
Any payments of Program income shall be credited first to
outstanding interest and then to principal owed on the CITY note.
4.5.1o Any Program income remaining after the payment
of operating, maintenance and repair expenses and the funding of
replacement reserve and operating reserve account deposits as
required under the SUHRP Agreement shall be used, first, to pay
any deferred interest on the SUHRP note and, then, to pay accrued
interest on the Note.made payable to the order of the CITY.
4.6 Uniform administrative requirements - CDBG funds
VWI, as a private non-profit organization receiving CDBG
Program funds as a subrecipient, shall comply with the Uniform
Administrative Requirements as set forth in 24 CFR 570.502(b).
4.7 Additional requirements and federal assurances -
CDBG funds
VWI shall comply with the additional terms and conditions
of this Agreement and the federal assurances as set forth in
-Exhibit "D"
4.8 Insurance
VWI, at its sole cost and expense, shall obtain and
maintain during the term of this Agreement, insurance provided by
responsible companies authorized to engage in the offering of
insurance services in California in such amounts and against such
risks as shall be satisfactory to CITY’s risk manager, including,
without limitation, worker’s compensation, employer’s liability,
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commercial general liability, comprehensive automobile liability,
personal injury and property damage insurance, as set forth in
Exhibit "E", as appropriate, insuring against all liability of VWI
and its directors, officers, employees, agents, and representatives
arising out of or in connection with the acquisition and operation
of the Property or VWI’s performance or nonperformance under this
Agreement.
ARTICLE 5 -TERM AND TERMINATION OF AGREEMENT
This Agreement shall commence and be effective on the
date of its execution by CITY, and shall continue for a term of
forty (40) years unless earlier terminated as provided in this
Agreement° If close of escrow for VWI’s acquisition of the Property
does not occur on or before June 30, 1998, including any extension
thereof approved by the project manager, this Agreement may be
terminated by CITY. Time is of the essence of this Agreement.
Prior to the Close of escrow, either party may terminate this
Agreement for convenience in accordance with 24 CFR 85.44,-as
amended. CITY may immediately suspend or terminate this Agreement,
in whole or in part, if CONTRACTOR materially fails to comply with
any term, provision, covenant or condition of this Agreement, or
with any of the rules or regulations referred to herein. In such
event, CITY may also pursue any other remedies provided by law,
including those specified under 24 CFR 85.43, as amended. In the
event that this Agreement is terminated for convenience or for
cause, all funds provided to VWI, at the sole option of the project
manager and notwithstanding any other provisions of this Agreement,
the Note or Deed of Trust, shall become due and payable to CITY
upon demand of CITY.
ARTICLE 6 -CONFLICT OF INTEREST
VWI covenants that it shall comply with the provisions of
24 CFR 570.611, as amended, concerning conflicts of interest.
Specifically, except for the use of CDBG’funds to pay salaries and
other related administrative or personnel costs, no person who is
an employee, agent, consultant, officer or official of VWI who
exercises or has exercised any functions or responsibilities
concerning the activities under this Agreement, or who is in a
position to participate in a decision making process or gain inside
information with regard to such activities, may obtain a personal
or financial interest or benefit from any such activity, or have an
interest in any contract, subcontract, or agreement with respect
thereto, or the proceeds thereunder, either for him or herself or
for those with whom he or she has family or business ties, during
his or her tenure or for one year thereafter.
VWI further covenants that it presently has no interest
and shall not acquire any interest, direct or indirect, financial
or other~ise, which would conflict in any manner or degree with the
performance of the services hereunder. VWI also covenants that, in
the performance of this Agreement, no subcontractor or person
having such interest shall be employed by VWI. In addition, VWI
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certifies that no one who has or will have any financial interest
under this Agreement is an officer or employee of CITY.
ARTICLE 7 -ASSIGNMENT
This Agreement is for the personal services of VWI and
shall not be assigned without the express prior written consent of
CITY. Any assignment or attempted assignment shall be void and, at
the sole discretion of CITY, shall be’deemed a material default of
this Agreement by VWI, and the outstanding balance of the Note may
be declared by CITY to be immediately due and payable.
ARTICLE 8 - DEFAULT; REMEDIES FOR DEFAULT
8.1 Events of Default
In addition to any action or inaction which is expressly
declared to be a default under this Agreement, the occurrence of
any of the following shall constitute a default by VWI, provided
VWI has received written notice of default from CITY, and VWI has
failed to cure. such default within sixty (60) days of the
occurrence of the same, or, if the default cannot be completely
cured within such period of time, VWI has failed to commence
efforts to cure and continue such efforts to cure within a
reasonable period of time, or where CITY receives notice of VWI’s
default under any other agreement in connection with the financing
of the Property:
(a) A failure by VWI to pay, when due, the unpaid
principal amount, and accrued interest, if any, and any other sums
payable by VWI under this Agreement, the Note, or the Deed of
Trust; or
(b) A failure by VWI to perform any non-financial
obligation required to be performed by VWI under this Agreement,
the Note or the Deed of Trust; or
(c) VWI makes a representation in this Agreement which
shall prove to have been false in any material respect; or
(d) VWI applies for or consents to the appointment of a
receiver, trustee, or liquidator, or is unable, or admits, in
writing, its inability to pay its debts as they fall due, or makes
a general assignment for the benefit of its creditors, or is
adjudicated a bankrupt or insolvent, or files a voluntary petition
in bankruptcy; or
(e) VWI is subject to the entry of an order, decree, or
ijudgment approving the reorganization of VWI, and such order,
decree, or judgment is not stayed for a period of more than sixty
(60) days, or such period as may be permitted by law; or
(f) VWI sells, assigns, transfers or encumbers the
Property in a manner inconsistent with the terms of this Agreement
or applicable law, including, without limitation, a sale at a
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judicial foreclosure or nonjudicial foreclosure, or a transfer in
lieu of foreclosure; or
(g) VWI fails tO comply with the covenants, terms and
conditions of the Agreement, including, without limitation, the
failure of VWI to abide by the low-income and very low-income
restrictions set forth in Article 4 of theAgreement; or
(h) VWI terminates the Agreement without cause; or
(i) VWI defaults under its agreement with one or more
lenders, if any, or other agreement for private financing of the
Property, which may be secured by a deed of trust or any other
encumbrance or lien which is senior in priority to the Deed of
Trust°
10.2 Remedies for Default
Upon the occurrence of a default by VWI, CITY shall have
the following rights and remedies, in addition to all other rights
and remedies provided by law, to which CITY may resort
cumulatively, or in the alternative:
(a) Declare the outstanding principal amount of the
Note immediately due and payable to CITY;
(b) Compel VWI’s performance of its obligations under
this Agreement, or perform VWI’s obligations on its behalf;
(c) Cure any default of VWI on the behalf of and at its
cost; and
(d) Notwithstanding any other provision of law relating
to the acquisition, management or disposal of real property in the
State of California, to engage in the following:
(i) Possess, operate, complete, lease, rent, renovate,
modernize, insure~ or sell for cash or credit, the Property;
(ii) Pursue to final collection by way of compromise or
otherwise all claims against VWI which are assigned by VWI to CITY;
and
(iii) Convey and execute in the name of CITY all deeds
of conveyance, deeds of release, assignments and satisfactions of
the deeds of trust, and any other written instrument relating to
real or personal property, or any interest of VWI therein
subsequently acquired by CITY.
ARTICLE 9 - NOTICES
All Notices to CITY or V WI shall be made in writing and
shall be deemed to have been given or made if personally delivered,
placed in the United States certified mail, return receipt
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requested, postage prepaid,
addressed as follows:
or delivered by courier service
To CITY:
Copy to:
City of Palo Alto
Office of City Clerk
250 Hamilton Avenue
Palo Alto, CA 94301
City of Pal~ Alto
Director, Department of Planning
& Community Environment
250 Hamilton Avenue
Palo Alto, CA 94301
To VWI:VETERANS WORKSHOP, INC.
795 Willow Road, MS I16B6
Menlo Park, CA 94025
Attention: Executive Director
ARTICLE 10 -MISCELLANEOUS
I0.i Neither the failure nor the delay on the part of
CITY to exercise any right, power, or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other
right, power, or privilege.
10.2 Nothing contained in this Agreement is intended to,
or shall be construed in any manner, as creating or establishing
the relationship of employer and employee between the parties. VWI
shall at all times remain an independent contractor with respect
to the services to be rendered or work to be performed, or both,
under this Agreement. The terms of this Agreement shall in no way
be construed to create a partnership, joint venture or any other
joint relationship between CITY and VWI. VWI lacks any authority or
power to pledge the credit of CITY or incur any obligation, in the
name of CITY. This Agreement shall not be construed or deemed to
be an agreement for the benefit of any third party, and no third
party shall have any claim or right of action hereunder for any
cause whatsoever.
10.3 This Agreement constitutes the entire agreement of
the parties concerning its subject matter, and there are no other
oral or written agreements of the parties not incorporated in this
Agreement. Any amendment to this Agreement shall be binding upon
the parties, provided such amendment is set forth in a writing
signed by the parties. The city manager is authorized to execute
any amendments to this Agreement, including any amendments which
may be required of VWI or CITY by HUD or HCD, and confer any
consents that must be provided by CITY.
10.4 The covenants, agreements, terms, and conditions of
this Agreement shall inure to and be binding on the successors and
assigns of the parties. Any provision of this Agreement which is
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characterized as a covenant or a condition shall be deemed both a
covenant and a condition. If any provision of this Agreement shall
be determined by a court of competent jurisdiction to be invalid,
illegal, void, or unenforceable in any respect, the validity of all
other provisions herein shall remain in full force and effect.
10.5 This Agreement, the Note and the Deed of Trust shall
be deemed contracts made under the laws of the State of California,
and for the purposes hereof shall be governed and construed by and
in accordance with the laws of the State of California. All
exhibits referred to in this Agreement and any addenda, appendices,
attachments, and schedules which may, from time to time, be
referred to in any duly executed amendment hereto are by such
reference incorporated in this Agreement and shall be deemed to De
part of this Agreement. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all
of which together shall constitute one and the same instrument. The
paragraph headings are not a part of this Agreement and shall have
no effect upon the construction or interpretation of any part-of
this Agreement.
10.6 In the event that suit is brought by either party,
the parties agree that trial of such action shall be vested
exclusively in the state court of California. in the City of San
Jose, County of Santa Clara, or in the United States District Court
for the Northern District of California in the ~City of San Jose.
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
such an action from the other party.
II
II
II
II
II
II
II
II
II
I!
I/
970929 syn 0071262
I0
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
ATTEST:CITY OF PALO ALTO
City Clerk
APPROVED AS TO-FORM:
Senior Asst. City Attorney
APPROVED:
Mayor
SIGNATURE TO BE NOTARIZED
Assistant City Manager
Acting Director of
Administrative Services
Director of Planning and
Community Environment
Risk Manager
Attachments :
EXHIBIT "A" :
EXHIBIT "B" :
EXHIBIT "C" :
EXHIBIT "D" :
EXHIBIT "E" :
LEGAL DESCRIPTION OF PROPERTY
PROMISSORY NOTE SECURED BY DEEDOF
TRUST AND ASSIGNMENT OF RENTS
DEED OF TRUST AND ASSIGNMENT OFRENTS
FEDERAL ASSURANCES WITH RESPECTTO CDBG FUNDS
INSURANCE REQUIREMENTS
970929 syn 0071262
ii
STATE OF CALIFORNIA )
COUNTY OF SANTA CLARA )
On ., 1997, before me, a Notary
Public in and for said County and State, personally appeared JOSEPH
Ho HUBER, personally known to me 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 as Mayor of the City
of Palo Alto, a municipal corporation, and that by his signature on
the instrument acknowledged that said municipal corporation
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year in this certificate first
above written.
Notary Public in and for said
County and State
970929 syn 0071262
12
STATE OF CALIFORNIA
COUNTY OF
On OC~o~-~ ~.,, 1997, before me, a Notary
Public in and for said County and State, personally appeared
personally known to me to be the person
whose name is subscribed to the within ins~ent and acknowledged
to me that he~executed the same in h-~//e~ authorized capacity
as ~gl£~l~ of VETERANS WORKSHOP, INC., a
~~ornia non-profit public benefit corporation, and that by
signature on the instrument acknowledged that said
nonprofit corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year in this certificate first
above written.
Notary Public in and for
County and State
said
970929 syn 0071262
13
EXHIBIT
Page No. 5
File No. 00122157
A
SCHEDULE C
LEGAL DESCRIPTION
All that certain real property situate in the City of Palo Alto, County of Santa Clara, State of California,
described as follows: "
Beginning at a point on the Northwesterly line of Margarita Avenue, where the same is Intersected by
the dividing line between Lots 43 and 44, Block 5, as said Lots and Avenue are shown upon a Map
hereinafter referred to; thence Northwesterly along said dividing line between said Lots 43 and 44, 120
feet; thence Southwesterly and parallel with said Northwesterly line of Margarita Avenue; 45 feet;
thence Southeasterly and parallel with the dividing line between Lots 42 and 43,120 feet to said
Northwesterly line of Margarita Avenue; thence Northeasterly along said Northwesterly line of
Margarita Avenue 45 feet to the Point of Beginning, being Lot 43 the Northeast one-half of Lot 42, in
Block 5, as said Lots and Block are shown on that certain Map entitled, "Map of the Bartley Tract
Subdivision Unit No. 2, an Amended Subdivision of Lots in Blocks 3 and 5 of Bartley Tract Subdivision
No. 1 ", and which Map was filed for record in the office of the Recorder of the County of Santa Clara,
State of California, in Book N, page 55 of Maps.
ARB No: 132-39-051
APN No: 132-39-051
EXHIBIT B
PROMISSORY NOTE
SECURED BY
DEED OF TRUST AND ASSIGNMENT OF RENTS
$ 51,000 Date:
Palo Alto, California
FOR VALUE RECEIVED, the Veterans Workshop, Inc., a corporation duly
organized and existing under the Nonprofit Corporation Law of the
State of California ("BORROWER"), promises to pay to the City of
Palo Alto, a California municipal corporation ("CITY"), or order,
the principal sum of fifty-one thousand dollars ($51,000) at the
Revenue Collections office of the City of Palo Alto, First Floor,
250 Hamilton Avenue, P. O. Box 10250, Palo Alto, CA 94303, or at
such other place as CITY may from time to time designate, with
interest from the date of this PROMISSORY NOTE SECURED BY DEED-OF
TRUST AND ASSIGNMENT OF RENTS ("Note"), until paid, at the rate of
three percent (3%) per year on the unpaid principal balance.
This Note is secured by a deed of trust entitled "DEED OF TRUST AND
ASSIGNMENT OF RENTS" ("Deed of Trust") of even date herewith on
BORROWER’s equitable interest in real property locatedat 442
Margarita Avenue, Palo Alto, California, Assessor’s Parcel Number
132-39-051 ("Property").
This Note is made in connection with an agreement entitled
"AGREEMENT BETWEEN THE CITY OF PALO ALTO AND VETERANS WORKSHOP,
INC. CONCERNING THE ACQUISITION OF THE MARGARITA HOUSE SHARED
HOUSING FACILITY AT 242 MARGARITA AVENUE, PALO ALTO" ("Agreement").
Under the Agreement,. BORROWER agrees to acquire and operate the
Property as affordable rental housing for low-income and very low-
income households in the city of Palo Alto.
All amounts advanced under this Note, at the option of CITY, shall
become immediately due and payable upon the occurrence of an Event
of Default, as such term is defined in the Agreement. Payment in
full of the unpaid principal balance shall be made by BORROWER not
later than forty (40) years after the Close of Escrow.
BORROWER, any endorser of this Note, and any others who may become
liable for all or a part of the obligations evidenced by this Note
may prepay all or any portion of the principal sum of this Note,
without penalty. Any and all payments made hereunder shall be
credited, first, on the interest then due and, the remainder, on
the principal balance, and interest on the ~rincipal balance so
credited shall thereupon cease.
BORROWER, any endorser of this Note, and any others who may become
liable for all or4any part of the obligations evidenced by this
Note or this Note, as amended, hereby individually waive demand,
presentment for payment, demand and protest, notice of protest,
demand, and of dishonor and non-payment, and consent to any number
970929 syn 0071264
of extensions or renewals of time hereof. Any such extensions or
renewals may be made without notice to any of the obligated parties
and without affecting their liability° The pleading of any statute
of limitations as a defense to any demand against BORROWER is
expressly waived by BORROWER. If BORROWER consists of more than
one person or individual, each person o~ individual shall be
jointly and severally liable under this Note.
BORROWER shall not further encumber, mortgage or subject the
Property, or the real property on which it is located, or any
interest therein, to a deed of trust, mortgage, indenture, or other
document of legal encumbrance (individually, "Encumbrance" and
jointly, "Encumbrances") without the prior written consent of CITY.
Unless CITY expressly agrees otherwise, in writing, any Encumbrance
affecting the Property shall provide that, in the event of any
default or breach by BORROWER under any Encumbrance entitling any
party thereunder to accelerate the indebtedness secured thereby and
foreclose upon the Property, CITY shall have the right, but not
the obligation, to (i) cure the default prior to the completion of
any foreclosure and reinstate the Encumbrance, or (2) pay the total
unpaid indebtedness secured by such Encumbrance, in which event;
such Encumbrance shall be released, canceled, or otherwise
reconveyed.
Any amounts expended by CITY under the contingencies set forth in
parts (i) or (2) of the preceding paragraph shall be reimbursed by
BORROWER upon demand of CITY therefor, and, in any event, such
amounts shall bear interest at the maximum rate permitted by
Article XV, Section 1(2) of the California Constitution, as
amended, from the date such amounts were advanced by CITY until
paid in full by BORROWER. All such amounts, including interest and
any penalty authorized under the Agreement, this Note, or the Deed
of Trust, shall .be added to the principal of this Note. The
approval by BORROWER of any Encumbrance, and the placing of a
security interest therefor on the Property, or any portion thereof,
not containing the provisions of the preceding paragraph and this
paragraph shall constitute a default of this Note.
If any default is made hereunder, BORROWER further promises to pay
reasonable attorneys’ fees and costs and expenses incurred by CITY
in connection with any such default or any other action or other
proceeding brought to enforce any of the provisions of this Note.
CITY’s right to such fees shall not be limited to or by its
representation by staff attorneys of CITY’s Office of the City
Attorney, and such representation shall be valued at the customary
and reasonable rates for private sector legal services.
The relationship of CITY and BORROWER evidenced by this Note shall
be deemed to be one of creditor and debtor and not of partnership
or joint venture.
This Note may not be modified or amended except by an instrument in
writing which expresses such intention of the parties sought to be
970929 syn 0071264
2
bound thereby, and such writing shall be firmly attached to this
Note and made a part thereof.
Any failure of CITY or other holder to exercise any rights under
this Note shall not constitute a waiver of such rights or of any
’other rights under this Note.
This Note shall be governed by and construed in accordance with the
laws of the State of California. ¯
To the extent assignment of this Note is permitted by CITY, the
terms of this Note shall apply to, inure to the benefit of, and
bind all of the parties thereto, their heirs, successors and
assigns.
All terms in this Note which are capitalized shall bear the
meanings set forth in the Agreement.
EXECUTED BY BORROWER by its duly authorized
representative in Palo Alto, County of Santa Clara, State of
California, on the date first above written.
VETERANS WORKSHOP, INC.
970929 syn 0071264
RECORDING REQUESTED BY AND
RECORDED MAIL TO:
City of Pale Alto
office of City Attorney
250 Hamilton Avenue
Pale Alto, CA 94301
RECORDED WITHOUT CHARGE.
GOVERNMENT CODE SECTIONS 6103,
WHEN
27382
EXHIBIT~ C
SPACE ABOVE TI-[IS LINE FOR RECORDER’S USE
DEED OF TRUST AND ASSIGNMENT OF RENTS
APN 132-39-051
This Deed of Trust, made this __ day of , 1997, b~tween the VETERANS WORKSHOP,
INC., a California corporation duly organized and existing under the Nonprofit Corporation Law of the State of
California ("Trustor"), located at 795 Willow Road, MS 116B6, Menlo Park, California 94025, SANTA CLARA
LAND TITLE COMPANY, a California corporation (" Trustee"), and the CITY OF PALO ALTO, a California
municipal corporation ("Beneficiary"),
Wimesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST,
WITH POWER OF SALE, that property in Santa Clara County, California, described as:
See Exhibit "A," attached hereto and incorporated herein by this reference.
In the event the herein described property or any part thereof, or any interest therein is sold, agreed to be .
sold, conveyed or alienated by the Trustor, or by the operation of law or otherwise, all obligations secured
by this instrument, irrespective of the maturity dates expressed therein, at the option of the holder hereof and
without demand or notice shall immediately become due and payable.
Together With the rents, issues and profits thereof, SUBJECT, HOWEVER, to the fight, power and authority
hereinafter given to and conferred upon Beneficiary to collect and supply such rents, issues and profits.
For the Purpose of Securing:
1. Performance of each agreemeht of Trustor herein contained. 2. Payment of the indebtedness evidenced by one
promissory note ("note") of even date herewith, and any extension or renewal thereof, in the principal sum of
$51,000 executed by Trustor in favor of Beneficiary or order. 3. Payment of such further sums as the then record
owner of said property hereafter may borrow from Beneficiary, when evidenced by another note (or notes) reciting
it is so secured. 4. Performance by TrYster of its obligations arising under that certain contract entitled
"Agreement between The City of Pale Alto and Veterans Workshop, Inc. Concerning the City’s Funding of the
Acquisition of the Margarita House Shared Housing Facility at 442 Margarita Avenue, Pale Alto", dated
, 1997 ("Agreement"), and recorded on , 1997, as
Instrument No., in Book Page of Official Records, Santa Clara
County, California.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to
complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged
or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply
with all .laws affecting said property, or requiring any alterations or improvements to be made thereon; not to
970929 syn 0071263
commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property
may be reasonably necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon
any indebtedness secured hereby and in such order as Beaefieiary may determine, or at the option of Beneficiary
the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not
cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and
attorney’s 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.
(4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said
property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but
without obligation so to do and without notice to or demand upon Trustor and without releas’.mg Trustor from any
obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to
protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes;
appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any incumbrance, charge or lien which in the
judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary
expenses, employ counsel and pay his or her reasonable fees, costs and expenses.
(5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from
date of expenditure at the amount allowed by. law in effect at the date hereof, and to pay for any statement provided
for by .law in effect at the date hereof regarding the obligation seeured hereby any amount demanded by Beneficiary
not to exceed the maximum allowed by law at the time when said statement is demanded.
(6) That any award of damages in e0nnection with any condemnation for public use of or injury to said property
or any’ part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys
received by it in the same manner and with the same effect as above provided for disposition of proceeds of fire
or other insurance.
(7) That by accepting payment of any sum secured hereby 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 deelare a default for failure so to pay.
(8) That at any time or from time to time, without liability therefor and without notice, upon written request of
Beneficiary and presentation of this Deed of Trust and said note for endorsement, and without affecting the personal
liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said
property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any
extension agreement or any agreement subordinating the lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums secured hereby have been paled, and upon
surrender of this Deed of Trust and sald note to Trustee for cancellation and retention and upon payment of its fees,
Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyanee of
any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyanee may
be described as "the person or persons legally entitled thereto." Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of Trust (unless directed in such request to retain them).
(10) That as additional seeurity Trustor hereby gives to and confers upon Beneficiary the right, power and
970929 syn 0071263
2
authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving
onto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the
performance of any agreements hereunder, to collect and retain such rents, issues, and profits as the become due
and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or
by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness
hereby secured, enter upon and take possession of said property or any part thereof, in its own name sue for or
otherwise collect such rents, issues and profits, including those pas~ due and unpaid, and apply the same, less costs
and expenses of operation and collection, including reasonable attorney’s fees, upon any indebtedness secured
hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property,
the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness secured hereby, or in performance of any
agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery
to Trustee of written declaration of default and demand for sale and of written notice of default and of election to
cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit
with Trustee this Deed of Trust, said note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of default, and
notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said
property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such
order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States,
payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement
at such time and place of sale, and from time to time. thereafter may postpone such sale by public announcement
at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the
property so sold, but without any covenant or warranty, express or impled. The recitals in such deed of any matters
or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary
as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in
cormeetion with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms
hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other
sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.
(12) That Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time,
by instrument in writing, substitute a successor or successors to any Trustee named here’m or acting hereunder,
which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder
of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such
successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title,
estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and
Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the
new Trustee.
(13) That this Deed apphes to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees,
administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder,
including pledges, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust,
whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number
includes the plural.
(14) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public
record as provided by law. Trustee is not obligated to notify any party hereto 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.
(15) That Trustor shall not sell, convey, transfer, hypothecate or ahenate the real property described herein, or any
970929syn0071263
3
part thereof, or any interest therein, or shall not be divested of title or any interest therein in any manner or way,
whether voluntarily or involuntarily, without the written consent of Beneficiary being first had and obtained, or
if Trustor shall fail to make any payments due under the note secured by this Deed of Trust, or fail to perform any
other obligation under this Deed of Trust or note secured hereby, or any other Deed of Trust encumbering the
subject property, then Beneficiary shall have the right, at its option, to declare any indebtedness or obligations
secured hereby, irrespective of the maturity date specified in any notes evidencing the same, immediately due and
payable.
(16) That Trustor shall promptly pay when due the payments of interest, principal and all other charges accruing
under any superior or prior trust deed, mortgage, or other instrument encumbering the subject property. Beneficiary
shall have the right, but not the obligation, to cure any defaults o/a any superior or prior deed of trust or note
secured thereby and upon curing such default Trustor shall immediately reimburse Beneficiary for all costs and
expenses incurred thereby, together with interest thereon at the maximum legal rate permitted to be charged by non-
exempt lenders under the Constitution of the State of California, and Trustor’s failure to pay any such amount on
demand shall be a default hereunder. Trustor’s breach or default of any covenant or condition of any superior or
prior trust deed, mortgage or other instrument encumbering the Property shall be a default under this Deed of Trust.
(17) That Trustor further acknowledges in the event of a default by Trustor on account of the note secured hereby,
and the expiration of any cure period provided therein, then Beneficiary at its sole option shall have the right to
declare the note secured hereby immediately due and payable.
The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder
be mailed to it at its address hereinbefore set forth and another copy be mailed to the City of Palo Alto, Planning
Department, Director of Planning and Community Environment, P. O. Box 10250, Palo Alto, CA 94303.
VETERANS WORKSHOP, INC.
By:Cathy J. Keys
Title:President
STATE OF CALIFORNIA .)
)
COUNTY OF )
On , before me,, a notary, public in and for said County, personally
appeared personally known to me (or 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 she
executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
970929syn0071263
4
EXHIBIT "D"
FEDERAL ASSURANCES WITH RESPECT TO CDBG FUNDS
VWI agrees to comply with the requirements of 24 CFR Part 570 (the
Housing and Urban Development regulations concerning Community
Development Block Grants). VWI al~o agrees to comply with all
other applicable federal, state and local laws, regulations, and
policies governing the funds provided under this Agreement. VWI
further agrees to utilize funds available under this Agreement to
supplement rather than supplant funds otherwise available.
A.VWI hereby assures and certifies that:
(~.)~It possesses legal authority to receive federal grant funds
and to carry out the proposed program(s) assisted thereby.
(2)Its governing body has duly acquainted itself with the funds
application, including all understandings and assurances
contained therein, and directed and authorized the person
identified as the official representative of VWI to provide
such additional information as may be required hereunder.
(3)It consents to accept the jurisdiction of the federal or
California courts for the purpose of enforcement of its
responsibilities imposed hereunder.
(4)The proposed program(s) has been developed so as to give
maximum feasible priority to activities which will benefit low
and moderate income persons.
(5)The receipt of any program income, as defined in 24 CFR
570.500(a), as amended, generated by the use of grant funds
under this Agreement, will be recorded,.reported and returned
to CITY in accordance with 24 CFR 570.504, as amended.
(6)It will comply with the provisions set forth in 24 CFR 85.4B
and 24 CFR 85.44 regarding the suspension or termination of a
grant agreement for cause or convenience.
(7)It will maintain and retain all books, documents, papers,
financial, or other records which are pertinent to the grant
for a period of not less than three (3) years following the
expiration of this Agreement. VWI will allow City and the
U.S. Department of Housing and Urban Development, through any
authorized representatives, access to such documents, papers
and records.
(8)If VWI is a primarily religious entity, in connection with the
provision of services required under this Agreement, VWI
agrees to comply with federal regulations specified in 24 CFR
570.200(j). VWI further:
9709Z9 syn 0071Z73 1
(i)
(2)
(3)
(4)
(5)
(6)
(7)
(a)will not discriminate against any employee or applicant
for employment on the basis of religion and will not
limit employment or give preference in employment to
persons on the basis of religion;
(b)will not discriminate against any person applying for
such services on the basis of religion and will not limit
such services or give preference to persons on the basis
of religion;
(c)will provide no religious instruction or counseling,
conduct no religious worship or services, engage in no
religious proselytizing, and exert no other religious
influence in the provision of such services; and
(d)will ensure that the portion of VWI’s facility used to
provide the services shall contain no religious symbols
or decorations, other than those permanently affixed to
or are part of the structure~
VWI also hereby assures that it shall:
Comply with the nondiscrimination provisions of public law 88-
352 (Title VI of the Civil Rights Act of 1964), and the fair
housing provisions of public law 90-284 (Title VIII of the
Civil Rights Act of 1968). and Executive Order 11063, as
amended by Executive Order 12259, with respect to sale, lease
or transfer of land acquired~ cleared or improved with grant
assistance.
Comply with the provisions of Section 109 of Title I of the
Housing and Community Development Act of 1974 which prohibit
discrimination.~
Comply with the Fair Housing Act of 1989 (42 USC 3601-20),
which prohibits discriminatory housing practices based on
race, color, religion, sex, national origin, disability or
familial status.
Comply with the Davis-Bacon Act, as amended, Federal Labor
Standards provisions with respect to all construction
¯ contracts in excess of Two Thousand Dollars ($2,000).
Comply with the requirement of the Flood Disaster Protection
Act of 1973 and the National Flood Insurance Act of 1968
applicable to acquisition or construction projects.
Comply with the relocation and displacement requirements of
the Uniform Relocation Assistance and Real Property
Acquisition. Policies Act of 1970, as amended.
Comply with provisions of Executive Order 11246, as amended by
Executive Orders 11375 and 12086, on equal employment
opportunities and affirmative action relative to employees and
applicants and nonexempt contracts and subcontracts.
970929 syn 0071273 2
(8)Comply with 42 USC 4831(b), and 24 CFR 570.608 and 24 CFR Part
35 of the HUD regulations, prohibiting the use of lead-based
paint in the construction or rehabilitation of residential
structures.
(9)Comply with the provisions of 24 CFR Part 24 which prohibit
the utilization of debarred, suspended, or ineligible
contractors or subrecipients.
(i0)Comply with the uniform administrative requirements and cost
principals of 24 CFR Part.85 and OMB circulars A-87, A-II0, A-
122, and A-128 and A-133 as they relate to the acceptance and
use of federal funds by nonprofit organizations, and as other-
wise may be required under 24 CFR 570.502, as amended°
(ii)Comply with the requirements of 24 CFR 85.36 and OMB circular
A-II0 with respect to conflict of interest, and as otherwise
may be required under 24 CFR 570.611, as amended.
(12)Comply with the provisions of the Hatch Act which prohibit the
use of federal funds for lobbying activities.
(13)Comply with Section 319 of public law 101-121, which generally
prohibits recipients of federal contracts, grants or loans
from using appropriated funds for lobbying the executive or
the legislative branches of the federal government in
connection with a specific contract, grant or loan.
Accordingly, VWI hereby certifies to the best of its
knowledge and belief, that:
(a)
(b)
No federal appropriated funds have been paid or will be
paid, by or on behalf of VWI, to any person for
inflJencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer
or employee of Congress, or an employee of a Member 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
agreement, or the extension, continuation, renewal,
amendment, or modification of any federal contract,
grant, loan, or cooperative agreement; and
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, an officer or employee of
Congress, or an employee of a Member of Congress in
connection with this federal contract, grant, loan or
cooperative agreement, VWI shall complete and submit
Standard Form-LLL, "Disclosure Form to Report Lobbying"
in accordance with its instructions.
970929 syn 0071273 3
(14)Comply with the Age Discrimination Act of 1975, as amended,
which states that no persons in the United States shall, on
the basis of age, be denied the benefits of, or be subjected
to discrimination under, any program or activity receiving
federal financial assistance.
(15)Comply with Section 504 of the Rehabilitation Act of 1973,
which prohibits discriminaUion against people with
disabilities in any federally assisted program.
(16)Comply with the Americans with Disabilities Act of 1990, as
amended, and implementing regulations when published.
(17)Transfer to City any CDBG funds on hand, and any accounts
receivable attributable to the use of CDBG funds, at the time
of expiration of this Agreement. In addition, VWI shall
ensure that any real property under VWI’s control that was
acquired or improved in whole or in part with CDBG funds in
excess of $25,000 is either:
(a)
(b)
used to meet one of the national objectives in 24 CFR
570.208 until five years after expiration of this
Agreement, or for such longer period of time as
determined appropriate hereunder by City; or
is disposed of in a manner which results in City being
reimbursed in the amount of the then current fair market
value of the property less any portion thereof
attributable to expenditures of non-CDBG funds for
acquisition of, or improvement to, the property°
970929 syn 0071273 4
EXHIBIT
INSURANCE REQUIREMENTS
COURSE OF CONSTRUCTION Insurance, to cover the Project’s
construction, with coverage limits in the total amount of al!
construction contracts covering the Project in connection with
this Agreement. Such coverag~ shall remain in effect until
the completion of the Project.
FIRE AND EXTENDED COVERAGE Insurance, to cover not less than
One Hundred Percent (100%) of the replacement cost of all
insurable improvements within or upon the Property, shall be
obtained upon completion of the Property’s construction. Such
policies shall include water damage and debris cleanup
provisions.
POLICY MINIMUM LIMITS OF LIABILITY
WORKERS’
COMPENSATION Statutory
COMPREHENSIVE Bodily Injury
AUTOMOBILE
LIABILITY,Property Damage
including owned,
hired, and nonowned.
automobiles
$i,000,000 ea..person
$I,000,000 ea. occurrence
$i,000,000 ea~ occurrence
COMMERCIAL Bodily Injury
GENERAL
LIABILITY,
including Property Damage
products and
completed operations,
broad form contractual,
and personal injury.
$1,000,000 ea. person
$I,000,000 ea. occurrence
$i,000,000 aggregate
$i,000,000 ea. occurrence
Each insurance policy required by this Agreement shall contain
the following clauses:
"This insurance shall not be canceled, limited in scope
of coverage or nonrenewed until after thirty (30) days
written notice has been given to the: CITY OF PALO
ALTO/Planning and Community Environment Department, P. O.
Box 10250, Palo Alto, CA 94303."
o "All rights of subrogation are hereby waived against the
CITY OF PALO ALTO and the members of the City Council and
elective or appointive officers or employees, when acting
within the scope of their employment or appointment."
970929 syn 0071273
"The CITY OF PALO ALTO is named as a loss payee on the
property insurance policy described above."
"The CITY OF PALO ALTO is added as an additional insured
as respects operations of the named insured at or from
the Property."
"It is agreed that any insurance maintained by the CITY
OF PALO ALTO will apply in excess of, and not contribute
to, insurance provided by this policy°"
All insurance coverage required shall be provided through
carriers with. a BEST KEY RATING GUIDE rating of A:X or higher that
are admitted to do business in the State of California. The
certificate(s) of insurance evidencing such coverage shall be
completed and executed by an authorized representative of the
company providing insurance, and shall be filed with and approved
by CITY’s risk manager.
970929 syn 00Z1273