HomeMy WebLinkAboutStaff Report 326-07City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: PLAN.~ING AND
COMMUNITY ENVIRONMENT
DATE:JULY 30, 2007 CM-R: 326:07
SUBJECT:APPROVAL OF AN ACQUISITION AND DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF PALO ALTO, EDEN
HOUSING, INC. A~ND CONLMUNITY HOUSING ALLIANCE, INC. FOR
THE PROPOSED ALM.A STREETAFFORDABLE M-U’LTI-FAMILY
RENTAL HOUSING PROJECT.
RECOMMENDATION
Staff recommends that the City Council approve the Alma Street Affordable Multi-Family
Rental Housing Project Acquisition and Development A~eement (ADA) between the City, Eden
Housing and the Community Housing Alliance (CHA). The ageement provides for the
conveyance of the Alma Substation parcel to Eden Housing and CHA, a City loan of $3 million
for acquisition of the adjacent Ole’s parce! and genera! parameters for future development of the
combined site.
BACKGROUND
Since the spring of 2003, Eden Housing, Inc. has been under contract to the City of Palo Alto to
identify a suitable site for a hi~ density affordable housing project. Given the cost of land in
Palo Alto, Eden focused on developing an affordable housing project on the Alma Street
substation site (841 Alma) for the following reasons: The site is City-owned; it is within the
Phase 2 South of Forest Area (SOFA) neighborhood which encourages affordable housing; and
the Utilities Department had indicated an interest in relocating the Alma substation to its Quarry
Road site.
In 2006, Eden Housing partnered with the Community Housing Alliance (CHA), an affiliate of
the Community Working Group, to explore development of an affordable housing project on the
substation parce! as well as the adjacent Ole’s property. In July 2006, Eden and CHA
(Developer) presented to Council preliminary designs for a family housing project on the two
parcels. The Developer, working with architect Rob Wellin~on Quigley, prepared a preliminary
design for the proposed affordable housing project, which included four stories of apartments
over under~ound parking.
On September ! 8, 2006, the Council approved a three-party Predevelopment Agreement between
the City, Eden Housing and CHA trust funded a deposit for site acquisition of the Ole’s site and
allowed the parties to conduct predevelopment activities on the substation!Ole’s site. At that
CMR:326:07 Page 1 of 5
time, the Developer’s plans for the project showed the development of 53 one, two and three
bedroom housing units with a target income level for furore residents at 30% to 35% of the Area
Median Income (AMI). Under terms of the Predevelopment Agreement, the City provided a
$980,000 deposit to the Ole’s owner by September 30, 2006; $480,000 of this deposit is
guaranteed to be reimbursed by CHA by September 18, 2007.
DISCUSSION
The Acquisition and Development Agreement before the Council with this report allows the City
of Palo Alto, Eden Housing and CHA to solidify their joint efforts to develop affordable housing
on the combined parcels of the Alma Substation property and Ole’s (Site).
The main points of the ADA are as follows:
¯The City will convey the City’s Alma Substation Parcel to the Developer;
The City will provide a $3.5 million loan (the $3.5 million includes the net $500,000
advance for the deposit paid to escrow in September 2006) to assist the Developer with
the cost of acquiring the Ole’s Parcel;
¯The Developer will acquire the Ole’s parcel;
¯The Developer will conduct environmental review and obtain final approval of all
entitlements necessary for the development;
The Developer will build on the Site from fifty to fifty-five affordable family apartment
units, or a mixed use project with ground level commercial retail and thirty-five to fifty-
five affordable family apartment units;
100% of the rental housing units will be affordable with occupancy to targeted residents
at 30-35% of the Area Median Income (AMI). In Santa Clara County, those incomes
would range from $22,290 to $26,005 for one person, up to $36,930 to $43,085 for a
family of six. Rents will not be more than 30% of income; and
The Developer will subdivide the Site to create a commercial condominium in
accordance with State law for the ground level commercial/retail portions of the Site, if
the mixed-use option is used.
The ADA is limited to the Alma substation!Ole’s parcels, even though the overall project
concept has been expanded by the Developer since the Pre-development Agreement approval in
September 2006. The proposed expansion of the project includes the possibility of developing
the entire block with two mixed use projects, one on the Alma Substation!Ole’s site and the other
on the combined Palo Alto Hardware Store and adjacent office building parcels on Alma Street.
As a result, the ADA provides the flexibility for development of a mixed use project on the Site
as well as development of the site as affordable family rental housing only. Both of these
development options are described in the next section of this report.
The project site is located within the Phase 2 SOFA Coordinated Area Plan area and
development under either of the above mentioned options will require a Planned Community
CMR:326:07 Page 2 of 5
(PC) Rezoning. Preliminary staff and ARB level review of a proposed project is anticipated to
begin in the fourth quarter of 2007 with a fOITnal PC application to follow. The PC process
requires ARB and Planning and Transportation Commission review, and City Council approval.
A tentative performance sclaedule (Attachment B) is attached.
Alma Street Family Housing Option - Affordable Family Development (All Housing)
The preliminary design for the proposed Alma Street Family Housing project was first presented
to City Council in a study session on July 10, 2006. The design included 4 stories of apartments
over underground parking with access to parking from the existing underground parking garage
at 800 High Street. ~qaile the precise mix of units may change, current plans show 53 apartment
units that include:
¯17 one-bedroom units
¯20 two-bedroom units
¯16 three-bedroom units
The main entrance to the building faces Homer Avenue, and an entry, court provides a separation
between the street and the front door. Common spaces include a lobby, a community- room, a
computer lab, outdoor spaces for children and adults, management offices, laundry rooms and a
possible roof deck. Landscaped areas and courts surround the building. There are 77 parking
spaces in the garage. The floor area ratio of the current proposed plan is 2.26 and the parking
ratio is 1.45 parking spaces per unit. The site area is .6 acres.
Alma Street Family and Senior Housing Option - Mixed-Use Development
The Developer also is evaluating expanding the development to incorporate two separate mixed-
use projects that would encompass the entire Alma Street frontage between Homer and
Channing. The Developer has entered into Letters of Intent to purchase both the property at 875
Alma Street (Palo Alto Hardware) and the property at 853 Alma Street (a commercial office
building) to create a combined site of .33 acres.
With this expanded alternative, the Developer is proposing to build a mixed-use project at the
Site (combined substation and Ole’s) that will include ground floor commercial condominium
space in addition to the affordable family rental housing described above. The Developer is
evaluating the feasibility of 3 floors or 4 floors of affordable family housing over the commercial
condominium space. Depending on the final plan, the project will include 35 to 55 very low
income family rental units. This project would have the same target family incomes as the
housing-only project. Under this development scenario, Palo Alto Hardware will purchase this
ground floor commercial condominium space from the Developer, and the Developer will
purchase the existing hardware store site at 875 Alma Street when the commercial condominium
space is ready for Palo Alto Hardware to occupy. Palo Alto Hardware will build out the tenant
improvements and move into the space as soon as it is completed (estimated April 2011). This
commercial condominium will provide a new larger commercial space for the hardware store.
The Developer has applied for $500,000 in City Community Development Block Grant (CDBG)
funds for FY 2008-2009 to acquire the site for the senior project and the City Council will take
action on that proposal as part of the CDBG allocation process next year. The Developer also
CMR:326:07 Page 3 of 5
intends to purchase the site at 853 Alma Street and merge it with the hardware store site to create
a combined site for a second mixed-use project that will include ground floor commercial
condominium space in addition to affordable senior rental housing above (estimated completion
is late 2012). The acquisition of these properties is not part of this ADA since they do not
involve the transfer of City property to the Developer. If both the family and senior projects are
built, it is the intent of the Developer to design the buildings to emphasize their hanr~onious
interrelationship by providing adjacent entrances on Alma Street.Eden Housing Resident
Services will also work to encourage an intergenerational community.
The senior project would provide 38 to 52 affordable rental units for very low income
independent living seniors who are 62 years of age or older with incomes at or below 50% of
AMI. Maximum resident incomes would range from $37,150 for one person up to $42,450 for
two people. The concept of ~°aging in place" - making sure that seniors can live independently
even as they become frail - is inte~al to this project concept.
It is intended that Alma Property LLC, the existing owner/occupants at 853 Alma, or another
commercial entity will purchase this ~ound floor commercial condominium from the Developer
and build out the tenant improvements. If the purchase of 853 Alma Street does not occur, then
the affordable senior rental housing project could be built on the hardware store site only with 28
to 34 units. If the purchase of 875 Alma Street does not occur, then the affordable senior
housing project will not be bulk and only the original affordable family project will be built.
RESOURCE IMPACT
The Developer intends to seek 9% tax credit funding from the state as the major funding source.
Additional funding will most likely come from a combination of federal, state and local sources.
In addition to the $500,000 deposit funded as part of the predevelopment a~eement, the City has
committed to contributing an additional $3 million towards the purchase of the Ole’s site. The
FY 08-09 budget will appropriate the $3 million. The Developer’s cost estimates (see
Attachment C) call for a total of $6.5 million in cash subsidies from the City. All City funding
for the project will come from the City’s Commercial and Residential Housing Funds, a Local
Housing Trust Fund Grant from the state and proceeds from the sale of surplus City property
(High St.). No General Fund monies will be expended on the project. The City of Palo Alto is
also contributing the Alma substation site to the project; the estimated value of that property is
$1,970,000. All funding sources will need to be committed at the time of the tax credit
application. At this time, the Developer cost estimates show a gap of $4.4 million for the family
housing project and a $9.8 million gap for the two mixed use projects. CHA has committed to
raise the necessary outside funding to fill the financia! gap for whatever project goes forward.
POLICY IMPLICATIONS
The project addressed in the ADA will provide 35-55 units of very low income family housing.
Family housing has been a long-identified Council priority and is specifically stated as a priority
for the City’s affordable housing funding in both the Housing Element and in the HUD
Consolidated Plan. These units will be a substantial step towards meeting the City’s share of
regional very low income and below housing needs that will be required as part of the next
Regional Housing Needs Al!ocation.
CMR:326:07 Page 4 of 5
The project is consistent with Comprehensive Plan’s Housing Element and the Phase 2 SOFA
CAP which encourages the development of new- housing and expanding the supply of affordable
housing. Although the project is consistent with the SOFA CAP policies which encourage
affordable housing, the mixed use option would require amending the SOFA CAP since the PC
development density bonus under the SOFA CAP is allowed only for projects that are 100%
affordable housing.
ENWIRONWIENTAL REVIEW
A Final EIR entitled "South of Forest Avenue (SOFA) Coordinated Area Plan (CAP)" addressed
the environmental impacts of future development within the SOFA area. The project site is
located within the SOFA CAP. Impacts from acquisition of the properties and approval of the
Acquisition and Development A~eement for future housing or mixed uses on the site is
adequately covered in this FEIR. Environmental impacts from furore development of the site
will be further analyzed through subsequent environmental review when a development
application is submitted to the City for the properties.
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
Chief Planning and Transportation Official
Ste’~ e Emslie
Director of Plarming and Community Envirormaent
Emily ~on - -
Assistant City Manager
ATTACHMENTS
Attachment A:
Attachment B:
Attachment C:
Agreement between City of Palo Alto, Eden Housing and the Coinmunity
Housing Alliance
Schedule of Performance
Palo Alto Alma Street Affordable Housing Projects Summary - Estimated
Development Costs
CC:
Community Housing Alliance
Eden Housing Corporation
Ole’s Automotive Repair Shop
Palo Alto Hardware Store
Alma Property LLC
ClVIR:326:07 Page 5 of 5
ATTACHMENT A
ALMA STREET AFFORDABLE MULTI-FAMILY RENTAL
HOUSING PRO~CT
ACQUISITION AND DEVELOPMENT AGREEMENT
By and Among
CITY OF PALO ALTO,
a chartered city,
and
COMMUNITY HOUSING ALLIANCE, INC.,
a California non-profit public benefit corporation
and
EDEN HOUSING, INC.,
a California non-profit public benefit corporation
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS ....................................................................................................2
1.1 Definitions ....................................................2 ..........................................................2
ARTICLE 2
2.1
2.2
2.3
2.4
2.5
2.6
PURPOSE OF AGREEMENT; PARTIES; REPRESENTATIONS
AND WARRANTIES ........................................................................................7
Purpose of the Ageement .......................................................................................7
City ..........................................................................................................................8
Deve!oper ................................................................................................................8
City Representations ...............................................................................................8
Developer Representations .....................................................................................9
Prohibition Against Transfer of Site .......................................................................9
ARTICLE
3.1
3.2
3.4
3.5
GENERAL PERFORMANCE OBLIGATIONS .............................................11
Schedule of Performance ......................................................................................11
Delegation to City Manager ..................................................................................11
Construction Contract ...........................................................................................11
Relocation .............................................................................................................12
Submission of Evidence of Financing ..................................................................12
ARTICLE
4.1
4.2
4.3
4.4
4.5
4.6
CITY PARCEL DISPOSITION .......................................................................12
Conveyance of City Parcel ....................................................................................! 2
Conditions Precedent to Conveyance ...................................................................12
Condition of Title ..................................................................................................14
Title Insurance ......................................................................................................1.5
Condition of City Parcel .......................................................................................15
Disposition Escrow ...............................................................................................16
ARTICLE 5
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
5.13
DEVELOPMENT OF THE SITE .....................................................................19
Scope of Development ..........................................................................................19
Developer’s Submittals of Design and Construction Documents ........................19
City Review and Approval of Plans, Drawings, and Related Documents ............20
Cost of Construction .............................................................................................20
Prevailing Wages ..................................................................................................20
City and Other Governmental City Permits ..........................................................20
Zoning and Land Use Requirements; Environmental Review .............................20
City Rights of Access During Construction ..........................................................21
Local, State and Federal Laws ..............................................................................22
Indemnification "22
Bodily Injury, Property Damage and Worker’s Compensation Insurance ...........23
Non-discrimination During Construction .............................................................26
Security Financing, Rights of Holders ..................................................................26
ARTICLE 6 USES OF THE SITE ........................................................................................29
6.1 Uses .......................................................................................................................29
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TABLE OF CONTENTS
6.2
6.3
6.4
6.5
6.6
6.7
Affordab)e Housing ..............................................................................................29
Management Plan ...........................................................................i ......................30
Maintenance of the Site ........................................................................................30
Limitation on Alterations ......................................................................................31
Obligation to Refrain from Discrimination; Form of
Non-discrimination Clauses ..................................................................................31
Effect and Duration of Co’, enants ........................................................................."9
ARTICLE
7.1
7.2
7.3
7.4
7.5
ARTICLE
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
7
8
CITY FINANCIAL ASSISTANCE ~ ~
Method of Financing Development ......................................................................33
City Loan ..............................................................................................................~ ~
Disbursement of City Loan ...................................................................................34
Repayment of City Loan .......................................................................................34
Preliminary Notices; Stop Notices ........................................................................34
ARTICLE 9
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
9.9
9.10
9.11
9.12
9.13
9.14
9.15
9.16
9.17
9.18
EVENTS OF DEFAULT AND RIGHTS OF TERMINATION AND
OTHER REMEDIES ........................................................................................34
Defaults - General ......." ..........................................................................................34
Rights and Remedies are Cumulative ............................................................... .....35
Right of Termination by City Prior to Conveyance ..............................................35
Right of Termination by Developer Prior to Conveyance ....................................36
Remedies and Rights of Termination by City after Conveyance .........................36
Institution of Legal Actions ..................................................................................37
Applicable Law and Attorneys’ Fees ....................................................................38
Acceptance of Service of Process .........................................................................38
GENERAL PROVISIONS ...............................................................................38
Notices, Demands and Communications Between the Parties .............................38
Nonliability and City Officials and Employees ....................................................39
Enforced Delay; Extension of Times of Performance ..........................................40
Plans and Data .......................................................................................................40
No Real Estate Commission .................................................................................40
Successors and Assigns ..............................................................................., .........40
Relationship of the Parties ....................................................................................41
Text to Control; Interpretation ..............................................................................41
Severability ...........................................................................................................41
Approvals ..............................................................................................................41
Time of the Essence ..............................................................................................41
Computation of Time ............................................................................................41
Calendar Days .......................................................................................................42
Police Power .........................................................................................................42
Estoppel Certificates .............................................................................................42
Further Assurances ................................................................................................42
No Merger .............................................................................................................43
Waivers and Amendments ....................................................................................43
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TABLE OF CONTENTS
9.19
9.20
9.21
Reasonable Reimbursement ..................................................................................43
Entire Ageement ..................................................................................................43
Counterparts ..........................................................................................................43
ATTACHMENT NO. 1-A
ATTACI~4-ENT NO. 1-B
ATTACHMENT NO. 2-A
ATTACHMENT NO. 2-B
ATTACHMENT NO. 3
ATTACHMENT NO. 4
ATTACHMENT NO. 5
ATTACHMENT NO. 6
ATTACHMENT NO. 7
ATTACHMENT NO. 8
ATTACHMENT NO. 9
ATTACHMENT NO. 10
ATTACHMENT NO. 11
CITY PARCEL LEGAL DESCRIPTION
OLE’S PARCEL LEGAL DESCRIPTION
SITE LEGAL DESCRIPTION
SITE MAP
SCHEDULE OF PERFORMANCE
GRANT DEED
SCOPE OF DEVELOPMENT
SOURCES & USES BUDGET
FORM OF CITY NOTE
CITY DEED OF TRUST
FORM OF REGULATORY AGREEMENT
MEMORANDUM OF OPTION
FORM OF MEMORANDUM OF AGREEMENT
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ALMA STREET AFFORDABLE, MULTI-FAMILY RENTAL HOUSING PROJECT
THIS ACQUISITION AND DEVELOPMENT AGREEMENT ("Agreement"), dated as
of the __ day of -. ., 2007, is entered into by and among the CITY OF PALO
ALTO, a chm’tered city ("City"), and COMMUNITY HOUSING ALLIANCE, INC., a
California non-profit public benefit corporation ("CHA") and EDEN HOUSING, INC., a
California non-profit public benefit corporation ("Eden") (CHA and Eden, together, shall be
referred to herein as "Developer"). City and Developer agree as follows:
RECITALS
A. City owns certain real property, known as 841 Alma Street, Palo Alto, California
and described more particularly on Attachment No. l-A, attached hereto and incorporated herein
("City Parcel"). The City Parcel is currently occupied by the Alma Street Electrical Substation
(the "Substation"), which the City will relocate in order to make the City Parcel available for the
development of affordable multi-family rental housing.
B. CHA entered into that certain Standard Offer, Agreement and Escrow Instruction
for Purchase of Real Estate dated February 17, 2006 ("Ole’s Purchase Agreement") to obtain the
rights to purchase the real property commonly known as the site of "Ole’s Car Shop" and located
at 801 and 809 Ahna Street, Palo Alto, California and described more particularly on Attaclmaent
No. l-B, attached hereto and incorporated herein ("Ole’s Parcel"). The Ole’s Parcel is adjacent
to the City Parcel.
C. City, pursuant to an agreement dated September 18, 2006 among CHA, Eden and
City (the "Initial Project Agreement"), previously deposited $980,000 into the escrow
established under the Ole’s Purchase Agreement. The $980,000 consists of (1) an unsecured
loan to CHA and (ii) an advance of funds to be provided under this Agreement.
D. Under the Initial Project Agreement, CHA and Eden have agreed to, among other
things, cause the formation of a California non-profit public benefit corporation or limited
liability company (the "Nonprofit") for the purpose of acquiring the Ole’s Parcel and the City
Parcel (together and as legally defined on Attachment No. 2-A and as shown on Attacl~nent No.
2-B, the "Site"). The Nonprofit shall cause the formation of a limited partnership (the
"Partnership") in which the Nonprofit is the general parmer and Eden is the initial limited partner
for the purpose of developing the Site. Upon Closing of the transaction contemplated by this
Agreement, all rights and obligations of Developer hereunder shall be assig-ned to, and assumed
by, the Partnership.
E. City has also agreed to provide an additional $3,000,000 in funding to support the
acquisition of the Ole’s Parcel. After acquisition, the Developer is planning to develop the site
as either (i) a mixed-use project that will provide ground floor commercial/retail and thirty-five
(35) to fifty-five (55) units of affordable multi-family rental housing, or (ii) fifty (50) to fifty-five
(55) units of affordable multi-family rental housing (the "Development").
F. The City has agreed to sell the City Parcel to Developer and the Developer has
agreed to develop the Site in accordance with this Agreement, which also requires the Site to be
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subject to a regulatory ageement that limits the occupancy of residential units on the Site to
certain levels of very low income households for a period of fifty-five (55) years.
NOW, THEREFORE, in consideration of the foregoing, and of the covenants, conditions
and ageements as hereinafter set forth, the pal-ties agee as follows:
ARTICLE 1 DEFINITIONS
1.1 Definitions
As used in this Agreement, including the attactlrnents hereto, these terms shall be
defined as follows:
1.1.1 Affordable Rents shatl mean that the goss rent charged shall not exceed
thirty percent (30%) of fifty percent (50%) of the Area Median Income as adjusted for assumed
household size, or as othela¥ise may be set forth in the California Tax Credit Allocation
Conm~ittee (TCAC) guidelines.
1.1.2 Affordable Units is defined in Section 6.2.1.
1.1.3 Approved Title Exceptions shall have the meaning set forth in
Section 4.3.2.
1.1.4 Area Median Income means the median household income (adjusted for
household size) for Santa Clara County as annually published by the United States Department
of Housing and Urban Development ("HUD"). IfHUD ceases to publish median incomes on an
annual basis, the Parties will agee to use Area Median Income limits as may be published by the
California Department of Housing and Community Development.
1.1.5 CEOA means the California Environmental Quality Act.
1.1.6 Cit__2 sha11 have the meaning set forth in Section 2.2.
1.1.7 City Advance is defined in Section 7.2.1.
1.1.8 City Deed of Trust means the deed of trust securing Developer’s
repa?qnent of the City Loan and its performance hereunder in the form attached as Attachment
No. 9.
1.1.9 City Loan shall have the meaning set forth in Section 7.2.
1.1.10 City Manager means the City Manager of the City or his or her designee.
1.1.11 City Note means the promissory note evidencing the City Loan in the form
attached as Attachment No. 7.
1.1.12 City Parcel means the real property located at 841 Alma Street, Palo Alto,
and described more particularly on Attachment No. 1-A.
1.1.13 City Representatives means and include all of the respective predecessors,successors, assigns, agents, officials, employees, members, independent contractors, affiliates,
principals, officers, attorneys, accountants, representatives, staff, council members, board
members, and plarming commissioners of City, and of each of them.
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1.1.14 City Title Policy is defined in Section 4.4.2.
1.1.15 Close of Escrow is defined in Section 4.6.3.
1.! .16 Closi-ri~ Date shall be August 1, 2008, unless both Parties agree in writing
to another date.
1.1.17 Construction Contract is defined in Section 3.3.
1 .!.18 Control means, for purposes of Section 2.6 of this Agreement, the
possession, direct or indirect, of the power to direct or cause the direction of the management and
policies of a corporation, partnership, joint venture, trust, or other association.
1.1.19 Developer shall have the meaning set forth in Section 2.3.
1.1.20 Developer Title Policy shall have the meaning set forth in Section 4.4.1.
1.1.21 Development means the sale of the City Parcel by City to Developer, the
purchase of the Ole’s Parcel by Developer, Developer’s obtaining of the Entitlements, and
Developer’s construction of the Improvements on the Site.
1.1.22 Development Plans means and include such preliminary and final
construction drawings and specifications, grading plans, landscape plans, site development plans,
plot plans, off-site improvement plans, architectural renderings and elevations, material
specifications, parking plans, and other plans and documents as are required to be submitted to
City pursuant to this Agreement or any applicable. Law.
Agreement.
1.1.23 Effective Date means the date in the introductory paragraph of this
1.1.24 Encumbrance means any mortgage, trust deed, encumbrance, lien or other
mode of financing real estate construction, and development and ownership, including a sale and
leaseback.
1.1.25 Entitlements means comprehensive plan amendments, zone changes,
zoning code amendments, development permits, approvals of Development Plans submitted
pursuant to Section 5.2, CEQA compliance, NEPA compliance, and any and all other permits,
licenses and entitlements of every kind required by the City in order to complete construction of
the Improvements on the Site.
1.1.26 Environmental Condition means any Hazardous Material that exists prior
to or after the Closing Date, with respect to the air, land, soil, surface, subsurface strata, surface
water, ground water, storm water or sediments, on under or above the Site.
1.1.27 Environmental Laws means all federal, California and local Laws, rutes,
orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government
authority regulating, relating to, or imposing liability or standards of conduct concerning any
Hazardous Material (as later defined), or pertaining to occupational health or industrial hygiene
(but only to the extent that the occupational health or industrial hygiene Laws, ordinances, or
regulations relate to Hazardous Materials on, under, or about the Site), or Environmental
Conditions on, under, or about the Site, as now or may at any later time be in effect, including
without limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (CERCLA), 42 U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery
Act of 1976 (RCRA), 42 U.S.C. §§ 6901 et seq.; the Clean Water Act, also known as the Federal
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Water Pollution Control Act (FWPCA), 33 U.S.C. 88 1251 et seq.; the Toxic Substances Control
Act (TSCA), 15 U.S.C. 88 2601 et seq.; the Hazardous Materials Transportation Act (HMTA),
49 U.S.C. 88 1801 et seq.; the Insecticide, Fungicide, Rodenticide Act, 7 U.S.C. 88 136 et seq.;
the Superfund Amendments__and Reauthorization Act, 42 U.S.C. 88 6901 et seq.; the Clean Air
Act, 42 U.S.C. 88 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 8 300f et seq.; the Solid
Waste Disposal Act, 42 U.S.C. 88 6901 et seq.; the Surface Mining Control and Reclamation
Act, 30 U.S.C. 8§ 1201 et seq.; the Emergency Plmming and Community Right to Know Act, 42
U.S.C. 8§ ! !001 et seq.; the Occupational Safety and Health Act, 29 U.S.C. §§ 655 and 657; the
Califon~a Under~ound Storage of Hazardous Substances Act, Cal. Health & Safety Code §8
25280 et seq.; the California Hazardous Substances Account Act, Cal. Health & Safety Code 8§
"’;5~00 et seq. the California Hazardous Waste Control Act, Cal. Health & Safety Code §§ 25100
et seq.; the California Safe Drinking Water and Toxic Enforcement Act, Cal. Health & Safety
Code 88 24249.5 et seq.; the Porter-Cologne Water Quality Act, Cal. Water Code 88 13000 et
seq., together with any amendments of or regulations promulgated under the statutes cited above
and any other federal, state, or local Law, statute, ordinance, or regulation now in effect or later
enacted that pertains to occupational health or industrial hygiene (and only to the extent that the
occupational health or industrial hygiene Laws, ordinances, or regulations relate to Hazardous
Materials on, under, or about the Site), or the regulation or protection of the enviro~gnent,
including ambient air, soil, soil vapor, goundwater, surface water, or land use.
1.1.28 Escrow shall have the meaning set forth in Section 4.6.
1.1.29 Escrow A~ent shall have the meaning set forth in Section 4.6.
1.1.30 Exceptions means all reservations,, liens, Encumbrances, qualifications,
covenants, conditions, restrictions, leases, easements, rights of way, or other like matters
affecting the Site, and al! matters reflected on or arising out of any tentative or final parcel map
for the Site.
1.1.31 Extremely Low Income Affordable Units shall have the meaning set forth
in Section 6.22.
1.1.32 Final Approval means the obtaining of approval of atl Entitlements, the
expiration without an appeal of the period for any administrative appeal of such approval or if
any referendum petition is filed or any administrative appeal has been taken, such referendum or
appeal has been resolved to permit the Entitlements, and that the applicable period for
commencement of any court challenge under CEQA or other applicable Law, not to exceed
ninety (90) days thereafter, has expired and either no action has been filed, or if any action has
been filed, it has been finally resolved upon terms acceptable to City in its reasonable discretion.
1.1.33 General Contractor is defined in Section 3.3.
1.1.34 Grant Deed means the ~ant deed by which the City shall convey the City
Parcel to Developer in the form attached hereto as Attachment No. 4.
1.1.35 Hazardous Materials means and include the following, including mixtures
thereof: any hazardous substance, pollutant, contaminant, waste, by-product or constituent
regulated under CERCLA; oil and petroleum products and natural gas, natural gas liquids,
liquefied namrat gas and synthetic gas usable for fuel; pesticides regulated under the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. 88 136 et seq.; asbestos and asbestos-
containing materials, PCBs and other substances regulated under TSCA; source material, specia!
nuclear material, by-product material and any other radioactive, materials or radioactive wastes,
however produced, regulated under the Atomic Energy Act, 42 U.S.C. 88 2201 et seq. or the
Nuclear Waste Policy Act of 1982, 42 U.S.C. §§ 10141 et seq.; chemicals subject to the OSHA
10677-0013k933044v7.doc - 4 -DRAFT 07/13/07
Hazard Comrmmication Standard, 29 C.F.R. §§ 1910.1200 et seq.; industrial process and
pollution contro! wastes, whether or not hazardous within the meaning of RCRA; any substance
defined as a "hazardous substance" in California Civil Code Section 2929.5(e)(2) or California
Code of Civil Procedure Section 736(0(3); and any other substance or material regulated by any
Environmenta! Laws.
1.1.36 Holder(s) means the mortgagor of record of any mortgage, beneficiary of a
deed of trust or other security interest, the lessor under a financing leaseback, or grantee under
any fon~n of financing conveyaaace on or affecting the Site or any portion of the Site.
1.1.37 HUD means the United States Department of Housing and Urban
Development.
1.1.38 Improvements means all grading to be done on the Site, as well as all
buildings, structures, fixtures, excavation, parking, landscaping, and other work, construction,
rehabilitation, alterations and improvements of whatever character to be done by Developer on,
around, under or over the Site pursuant to this Agreement, as more particularly described in the
Scope of Development, together with an off-site improvements required by the Municipal Code.
1.1.39 Indemnitees is defined in Section 5.10.
1.1.40 Initial Proiect A~eement is defined in Recital C.
1.1.41 Law means any statute, code, rule, regulation, ordinance, writ, injunction,
order, decree, ruling, court decision, condition of approval or authorization, or other legally
binding condition or requirement of any governmental authority (including but not limited to
federal, California and City authorities) or quasi-governmental body having or exercising
jurisdiction or control over Developer, City, or the Site or any portion thereof.
i. 1.42 Losses and Liabilities means all claims, demands, causes of action,
liabilities, losses, damages, judgments, injuries, expenses (including, without limitation,
reasonable attorneys’ fees and costs incurred by the indenmified party for legal counsel
reasonably acceptable to it) charges, penalties or costs of whatever character, nature and kind,
whether to property or to person, and whether by direct or derivative action, known or tmknown,
suspected or unsuspected, latent or patent, existing or contingent.
1.1.43 Memorandum of A~eement means the recorded instrument recorded on
the Site providing notice of the terms and conditions of this Agreement in the form Attached as
Attachment No. 11.
1.1.44 Memorandum of Option means the instrument documenting the City’s
option to purchase the Site from Developer under certain conditions in the form attached as
Attachment No. 10.
1.1.45 Mortgage means any and all security instruments used in California, such
as, without limitation, deeds of trust, security deeds, and conditional deeds, as well as financing
statements, security agreements and other documentation required pursuant to the Uniform
Commercial Code. The term "Mortgage," whenever used herein, shall also include any
instruments required in connection with a sale-leaseback transaction.
1.1.46 Municipal Code means the City of Palo Alto Municipal Code, as it
presently exists or may subsequently be amended.
!. 1.47 NEPA means the National Environmental Policy Act.
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t.1.48 Ole’s Parcel means the real property located at 801/809 Alma, Palo Alto,
and described more particularly on Attachment No. 1-B.
1.1.49 Ole’s Purchase A~eement is defined in Recital B.
1.1.50 _Option shall mean the right of the City to purchase the Site upon the
occm-rence of certain Developer defaults, as defined more particularly in Sections 8.5.4 and
Attachinent No. 10.
1.1.51 Ownership Transfer/Transferee means and includes any voluntary or
involuntary transfer, sale, assi~marnent, lease, sublease, license, franchise, concession, operating
a~eement, gift, hypothecation, mortgage, pledge or encumbrance, or the like to any person or
entity ("Transferee"), or any change in Control of Developer.
1.1.52 Party, Parties means one or both of City and Developer, as applicable.
Agreement.
1.1.53 Permitted Encumbrances means any Encumbrance permitted by this
1.1.54 Person means an individual, corporation, partnership, limited liability
company, joint venture, association, firm, joint stock company, trust, unincorporated association
or other entity.
1.1.55 Qualified Financial Iaastitution shall mean a bank, savings and loan,
pension fund, insurance company or other institutional entity which is duly established and in the
business of financing the size and type of development contemplated hereunder and which, in the
reasonable opinion of City, has a sufficient net worth and liquidity position to meet the
contemplated financing commitment.
1.1.56 Re,~ulatorv A~eement means the regulatory ageement required by the
City to be recorded on the Site in the form attached hereto as Attachment No. 9.
1.1.57 Relocation Costs means: (i) the cost of retaining a relocation consultant or
consultants for the Development; (ii) a!l payments made for relocation benefits required by the
Relocation Law; (iii) all liability, loss, damage, costs, or expenses of Developer and City arising
from or as a result of the claim of any person for relocation benefits alleged to arise as a result of
this Ageement or the Deve!opment; (iv) attorneys’ fees and court costs of Developer or City for
any third party litigation (including for appeals, if any) relating to relocation, including but not
limited to litigation regarding any claim for relocation benefits pursuant to the Relocation Law,
and (v) attorneys’ fees and costs of Developer and City, including costs of a hearing officer(s) (if
any), relating to exercise of the grievance procedures established by City pursuant to 25
California Code of Regulations Section 6150, et seq.
1.1.58 Relocation Law means Law applying to relocation of displaced Persons,
including but not limited to.the State Relocation Assistance Act, Cal. Gov’t. Code §§ 7260 et
seq., the regulations contained in Title 25, California Code of Regulations, Chapter 6, Subchapter
1; the City Relocation Assistance and Real Property Guidelines; the Unifonr~ Relocation
Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. §§ 4601 et seq., HUD
Handbook 1378; and the City’ s Relocation Guidelines.
1.1.59 ~Remediation and Remediate means actions taken to correct or remediate
any Environmental Condition on the Site, including, but not limited, to the remova! and disposal
of any Hazardous Material, and the implementation of the terms of any remediation plan and any
amendments thereto.
10677-0013\~933044v7.doc - 6 -DRAFT 07/13/07
1.1.60 Remediation Costs means the amounts expended for Remediation or
response to an Environmental Condition, and amounts expended to determine the extent of the
Environmental Condition and to determine the appropriate means of Remediation or response,
including any investigation, testing, sampling, monitoring or assessment expenses, attorney’s or
environmental professionalrg fees, and the costs of surveys, plans, audits or analyses.
"Remediation Costs" also includes the premium for environmental cost containment and
environmental liability insurance, if such insurance is obtained, in form and with coverage limits
acceptable to both Pal-ties.
1.1.61 Restriction Termination Date is defined in Section 6.2.4.
1.1.62 Schedule of Performance means the Schedule of Performance attached
hereto as Attachment No. 3 and incorporated herein by reference, setting out the dates and time
periods by which certain obligations set forth in this Agreement must be met.
1.1.63 Scope of Development means the Scope of Development attached hereto
as Attachment No. 5 and incorporated by reference herein, which describes the Improvements to
be constructed by Deve!oper pursuant to the terms and conditions of this Agreement.
1.1.64 Site means the City Parcel together with the Ole’s Parcel, as described
more particularly on Attachment No. 2-A. The Site is generally depicted on the "Site Map"
which is attached hereto as Attachment No. 2-B.
1.1.65 Sources and Uses Budget means the City-approved budget for the
acquisition, construction and operation of the Development attached as Attachment.No. 6
1.1.66 Substation is defined in Recital A.
1.1.67 Title Company means First American Title Insurance Company, 1737
North First St. Suite 100, San Jose, CA 95112, or another mutually acceptable title company
agreed to by the Parties.
1.1.68 Title Documents shall have the meaning set forth in Section 4.6.1.
1.1.69 Very Low Income Households means Households with adjusted
household incomes that do not exceed fifty percent (50%) of the Area Median Income, or the
very !ow income qualifying limits established in accordance with Health and Safety Code
Section 50079.5, as it may subsequently be alnended.
ARTICLE 2 PURPOSE OF AGKEES~ENT; PARTIES; REPRESENTATIONS AND
WARRANTIES
2.1 Purpose of the Aareement
The purpose of this Agreement is to provide for the development of the Site as either (i) a
mixed-use project that includes affordable multi-family rental housing or (ii) affordable multi-
family rental housing, in which the residential units are occupied (or reserved for occupancy) by
certain levels of Very Low Income Households. Pursuant to, in accordance with, and upon
satisfaction of the conditions of this Agreement: (a) City will convey the City Parcel to
Developer; (b) City will provide the City Loan to assist Developer with the cost of acquiring the
Ole’s Parcel; (c) Developer wil! acquire the Ole’s Parcel; (d) Developer will obtain Final
Approval of all Entitlements necessary for the Development; (e) Developer will construct on the
10677-0013’O33044v7.doc - 7 -DRAFT 07/13/07
Site (i) ground level connnercial retail and thirty-five (35) to fifty-five (55) residential apartment
units, or (ii) fifty (50) to fifty-five (55) units of residential apartment units, or (iii) such other
project approved in writing by the City; (f) if the mixed-use project is developed, Developer wil!
subdivide the Site to create commercial condominiums in accordance with state law for the
ground level commercial/retail portions of the Site; and (g) Developer will operate the
Development (or cause it to be operated) thereafter in accordance with the Regulatory
Agreement.
The development of the Site pursuant to this Agreement, and the fulfillment
generally of this Agreement, are in the vital and best interests of the City and the heatth, safety
and welfare of its residents and in accord with the public purposes and provisions of applicable
federal, California and local Laws, anal within the jurisdiction and powers of City. This
Agreement is entered into for the purpose of developing the Site with a development that
increases the City’s supply of affordable multi-family housing for Very Low Income
Households, and not for speculation in landholding.
2.2 City
City is a chartered city of the State of California. The principal address of City is
250 Hamilton Avenue, Palo Alto, California 94301. The term "City" includes any assignee or
successor to City’s rights, powers and responsibilities under this Agreement.
2.3 Developer
2.3.1 Developer consists of Community Housing Alliance, Inc., a California
non-profit public benefit corporation, having its principal office at 948 Ramona Street, Palo Alto,
California 94301 and Eden Housing Inc., a California non-profit public benefit corporation,
having its principal office at 409 Jackson Street, Hayward, California 94544. CHA and Eden
contemplate fo~Tning a California non-profit public benefit corporation or limited liability
company, which in turn will be the general partner of a California limited partnership (the
"Parmership"). The Partnership will be assigned and will assume the role of Developer in
accordance with Section 2.6.3 of this Agreement on or before the Closing Date. The term
"Developer" includes any legally and contractually permissible nominee, assig-nee or successor
to Developer’s rights, powers and responsibilities hereunder. All of the terms, covenants, and
conditions of this Agreement shall be binding on such successors and assigns of Developer.
2.4 Cit,v Representations
City, acknowled~ng that each provision in this Section 2.4 is maerial and is
being relied on by Developer, hereby represents and warrants the following to Developer for the
purpose of inducing Developer to enter into this Agreement and to consummate the transactions
contemplated hereby, all of which shall be true as of the date hereof and as of the Close of
Escrow:
(a) City has the legal power, right and authority to enter into this
Agreement and the instruments and documents referenced herein to which City is a party, to
consummate the transactions contemplated hereby, to take any steps or actions contemplated
hereby, and to perform its obligations hereunder.
(b) All requisite action has been taken by City and all requisite
consents have been obtained in connection with entering into this Agreement and the instruments
and documents referenced herein to which City is a party, and the consummation of the
10677-0013\933044v7.doc - 8 -DRAFT 07/13/07
transaction contemplated hereby, and, to the best knowledge of City, the same comply with all
applicable Laws. There are no writs, injunctions, orders or decrees of any court or governmental
body that would be violated by the City entering into or performing its obligations under this
Agreement.
(c) This Agreemem is duly executed by City, and all agreements,
instruments and documents to be executed by City pursuant to this Agreement shall, at such time
as they are required to be executed hereunder, be duly executed by City, and each such
agreement is, or shall be at such time as it is required to be executed hereunder, valid and legally
binding upon City and enforceable in accordance with its terms, and the execution and delivery
thereof shall not, with due notice or the passage of time, constitute a default under or violate the
terms of any indenture, agreement or other instrument to which City is a party.
2.5 Developer Representations
Developer, acknowledging that each provision in this Section 2.5 is material and
is being relied upon by City, represents and warrants the following to City for the purpose of
inducing City to enter into this Agreement and to consummate the transactions contemplated
hereby, all of which shall be true as of the date hereof and as of the Close of Escrow:
(a) Developer has the legal power, right and authority to enter into this
Agreement and the instruments and documents referenced herein, to consummate the
transactions contemplated hereby, to take any stePS or actions contemplated hereby, and to
perform its obligations hereunder.
(b) All requisite action has been taken by Developer and all requisite
consents have been obtained by Developer in connection with entering into this Agreement and
the instruments and documents referenced herein, and the consummation of the transactions
contemplated hereby.
(c) To the best knowledge of Developer, the execution, delivery and
performance by Developer of this Agreement will not violate any provision of Law, or any
indenture, agreement or other instrument to which Developer is a party or by which Developer or
any of its properties is bound.
(d) This Agreement is, and all agreements, instruments and documents
to be executed by Developer pursuant to this Agreement shall be, duly executed by and are, or
shall be, valid and legally binding upon Developer and enforceable in accordance with their
respective terms, and the execution and delivery thereof shall not, with due notice or the passage
of time, constitute a default under or violate the terms of any indenture, agreement or other
instrument to which Developer is a party.
2.6 Prohibition A.~ainst Transfer of Site
2.6.1 Developer represents that its undertakings pursuant to this Agreement are
for the purpose of development of the Site as a mixed-use project that includes affordable multi-
family rental housing for Very Low Income Households, and not for speculation in landholding.
. Developer further recognizes that, in view of:
(a)
welfare of the community;
the importance of the development of the Site to the general
(b) the public assistance that has been made available by Law and by
City for the purpose of making such development possible; and
10677-0013~933044v7.doc - 9 -DRAFT 07/13/07
(c) the fact that a change in ownership or control of Developer or of a
substantial part thereof, or any other act or transaction involving or resulting in a significant
change in ownership or control of Developer, is for practical purposes a transfer or disposition of
the City Parcel being conveyed to Developer;
The qualifications and identity of Deve!oper and its principals are of particular concern to
City. It is because of those qualifications and identity that City has entered into this Agreement
with Developer. No voluntary or involuntary successor in interest of Developer shall acquire
any rights or powers under this Agreement except as expressly set forth herein. Unless an
Ownership Transfer is specifically permitted by this Agreement, Developer shall not assign all or
any part of this Agreement or any interest in the Site without the prior written approval of City.
2.6.2 Developer shall not, except as permitted by this Agreement, effect any
change in Control of Developer, or of the general partner of Developer; assign or attempt to
assi~a this Agreement or any rights herein; or make any total or partial sale, transfer, or
conveyance of the whole or any part of the Site or the buildings or structures now existing or to
be constructed thereon without prior written approval of City which approval shall not be
unreasonably delayed, witt~held or conditioned. Any such approval shall not constitute a release
of Developer of its obligations hereunder, except to the extent agreed to in writing by City.
prohibit:
2.6.3 Notwithstanding the foregoing, this Section 2.6 shall not prevent or
(a)any change in personnel of Developer;
(b)any Ownership Transfer to an entity that is Controlled by a
California nonprofit public benefit corporation or limited liability company formed by Developer
or in the case of a limited partnership, where the general partner is controlled by Developer;
(c) any sale of a commercial condominium for ground level
conv-nercial/retail space in the Development that has been subdivided in accordance with state
law; and
(d)any sale or transfer approved in writing by City.
2.6.4 (a)Any proposed Transferee of Developer who must be approved by
City, shall have the financial and development qualifications, as may be reasonably determined
by City, to fulfill the obligations undertaken in this Agreement by the transferor.
(b) Any proposed Transferee, by instrument in writing satisfactory to
City and in form recordable among the land records of Santa Clara County, for itself and its
successors and assi~ons, and for the benefit of City, shall expressly assume all of the obligations
of Developer under this Agreement and shall agree to be subject to all the conditions and
restrictions to which Developer is subject. All relevant instruments and other legal documents
proposed to affect any such transfer shall be submitted to City, and if the Transferee is approved
by City, its approval shall be presented to Developer in writing.
(c) The provisions of this subsection 2.6.4 shall not apply to any
Transferee authorized by subsection 2.6.3.
2.6.5 If there is any Ownership Transfer of Developer not approved by City or
otherwise permitted as set forth in this Agreement, City may take such action as City may deem
appropriate to assure City that the Improvements will be completed, including without limiting
the generality of the foregoing, terminating this Agreement and exercising any rights set forth in
10677-0013k933044v7.doc - 10 -DRAFT 07/13/07
this Agreement; provided, however, that City shall not terminate this Agreement without first
providing Developer written notice and opportunity to cure pursuant to the provisions of Section
8.1. In the absence of specific written agreement by City, no such sale, transfer, conveyance or
assigrmaent of the Site shall be deemed to relieve Developer from any obligations under this
Agreement.
ARTICLE 3 GENERAL PERFORMANCE OBLIGATIONS
3.1 Schedule of Performance
Subject to the provisions of Section 9.3 (Force Majeure), Developer and City shall
perform their obligations hereunder by the deadlines specified in the Schedule of Performance
attached hereto as Attachment No. 3 and incorporated herein by this reference, or such
reasonable extension of those dates as may be granted by each Party to the other in writing. The
Schedule of Performance is subject to revision from time to time as mutually agreed upon in
writing by Developer and City.
3.2 Delegation to City Manager
3.2.1 The City Manager is hereby authorized to take any and all steps necessary
to complete the sale of the City Parcel and to implement the provisions of this Agreement
applicable to the City.
3.2.2 The City Manager is further authorized, on behalf of City, to: (a) approve
extensions of time hereunder, so long as the cumulative total of such extensions does not exceed
three hundred and sixty five (365) days; (b) approve, waive or make comments in connection
with Developer’s submittals described in Article 5; and (c) waive any of City’s conditions or
requirements to the Close of Escrow (except the condition that all applicable requirements of
CEQA and/or NEPA be complied with, which condition may not be waived). Any such
modifications or extensions shall be incorporated into the Schedule of Performance and this
Agreement without need for an amendment of this Agreement. No action of the City Manager
pursuant to this Section shall be effective unless it is express and in writing.
3.2.3 The City Manager may grant, in writing, any approval requested by
Developer pursuant to subsection 3.2.2, or, in the exercise of his or her reasonable discretion,
refer such matters to the City Council for its approval or disapproval. In addition,
notwithstanding the time periods (if any) for such approvals set forth in this Agreement, if the
City Manager deems it appropriate or necessary to hold a public meeting before the action
specified is to be taken, the period for such action by City shall be extended by a reasonable
amount of time, not to exceed thirty (30) days in each case, for the holding of such public
meeting. In that event, the period of delay attributable to the public meeting shall extend the
time(s) for Developer’s performance by a commensurate period.
3.3 Construction Contract
Within the time established therefor in the Schedule of Performance, Developer
shall submit to the City a list of proposed general contractors that it is considering retaining to
construct the Project. City shall have ten (10) days to object to any contractor on the list and
state the reasons for the objection, in which case Developer shall not retain the contractor
objected to by City. If City does not respond in writing within ten (10) days of receiving the list,
City shall be deemed to have no objections to any of the proposed contractors. Within ten (10)
days of entering into a contract (the "Construction Contract") with its selected general contractor
(the "General Contractor"), Developer shall submit a copy of the Construction Contract to the
10677-0013~933044v7.doc - 11 -DRAFT 07/13/07
City. The Construction Contract shall obligate the General Contractor to construct the
Improvements on the Site for a fixed price (subject to adjustment pursuant to the Construction
Contract) that is within the amount of available budget approved by City. The Construction
Contract shall provide for completion of the Improvements on a schedule consistent with the
Schedule of Performance. -
3.4 Relocation
The City shall comply with the Relocation Law in preparing the City Parcel for
conveyance to Developer, and the City shall bear all Relocation Costs arising from its
conveyance of the City Parcel. To the extent the Developer’s acquisition of the Ole’s Parce!
requires compliance with the Relocation Law, Developer shall be solely responsible for pa?anent
of the Relocation Costs attributable to the Ote’s Parcel.
3.5 Submission of Evidence of Financing
3.5.1 Developer has previously submitted to City the Sources and Uses Budget
for the Development attached hereto as Attachment No. 6. Developer shall complete the
construction of the Improvements in accordance with the Sources and Uses Budget.
Notwithstanding the foregoing, the parties anticipate that .the Development will be funded in part
by Low Income Housing Tax Credit Proceeds (the "Tax Credit") and other state a~d local
government housing loan programs, and the parties agree to make such changes to the Sources
and Uses Budget as may be reasonably necessary to utilize the Tax Credit and other govenm~ent
loan programs. Developer agrees to make continuing full disclosure to City as to its proposed
financing methods. City agrees to reasonably cooperate with the Developer, without cost to the
City, in its applications for the Tax Credit, bond financing, state loans or other similar types of
financing for the Development.
3.5.2 Within the time established therefor in the Schedule of Performance,
Developer shall submit to the City Manager evidence that Developer has obtained, or will obtain
prior to the date set forth in the Schedule of Performance for the commencement of construction,
sufficient commitments for financing to finance the completion of the Improvements, such that
the City Manager is reasonably satisfied that the Improvements can be constructed.
ARTICLE 4 CITY PARCEL DISPOSITION
4.1 Conveyance of Cit,v Parcel
Developer and City agee that, within the times provided therefor in the Schedule
of Performance (subject to Force Maj eure and any other mutually agreed upon extension of
tin~e), and subject to the conditions, provisions and terms of this Agreement, City shall convey
fee simple title to the City Parcel to Developer. The City Parcel shall be conveyed via grant
deed, in the form attached hereto as Attachment No. 4 and incorporated herein by this reference
(the "Grant Deed"). City and Developer shall perfom~ all acts reasonably necessary for
possession and title to the City Parcel to be conveyed in accordance with this Agreement.
4.2 Conditions Precedent to Conveyance
4.2.1 City Conditions Precedent
The obligation of City to convey the City Parcel to Developer is subject to the
following conditions precedent:
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(a) Developer shall have timely performed those obligations that
Developer is required by the terms of this Agreement to perform prior to the conveyance of the
City Parcel;
(b) - Developer shall have delivered into Escrow the executed and
acknowledged City Deed of Trust;
(c) Developer shall have submitted and the City Manager shal! have
approved the proof of insurance required by Section 5.11;
(d) Developer shall have delivered to City a construction budget
demonstrating to the satisfaction of the City Manager the availability of sufficient funds to
construct the Ianprovements;
(e) The City Manager, in his or her reasonable discretion, is satisfied
that the operation of Development will be financially feasible;
(f) Escrow Agent shall have notified the City Manager in writing that
it is prepared to close escrow under the Ole’s Purchase Agreement simultaneously with the
Closing hereunder;..
(g) All representations andwarranties made by Developer to City in
this Agreement shall be true and correct as of the Close of Escrow; and
(h) Developer shall not be in default of this Agreement.
4.2.2 Developer Conditions Precedent
The obligation of Developer to accept title to the City Parcel is subject to the
following conditions precedent:
(a) The Title Company has committed to issue the Developer Title
Policy in accordance with Section 4.4;
(b) The Substation shall have been closed and removed from the City
Parcel and the City Parcel shall have been remediated in accordance with Section 4.5.2 below;
(c) City shall have delivered into Escrow the executed and
acknowledged Grant Deed;
(d) City shall have timely performed all of the obligations required by
the terms of this Agreement to be performed by City prior to the conveyance of the City Parcel;
(e) Escrow Agent shall have notified Developer in writing that it is
prepared to close escrow under the Ole’s Purchase Agreement simultaneously with the Closing
hereunder; and
(f) City shall not be in default of this Agreement.
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4.3 Condition of Title
4.3.1 Title Documents
Upon the opening of escrow, City shall order from Title Company a preliminary title
report (the "Preliminary Title Report") for the City Parcel. The Title Company shall also provide
two le~ble copies of each instrument identified as exceptions on the Preliminary Title Report.
The Preliminary Title Report and the copies of the instruments noted as exceptions therein, are
refen’ed to herein as the "Title Documents." City shall cause the Title Company to deliver the
Title Docmnents to Developer, with copies to City, within ten (10) days after the opening of
Escrow.
4.3.2 Condition of Title
It shall be a condition to the close of escrow and a covenant of City that City shall convey
to Developer fee simple title to the City Parcel, free and clear of all recorded or unrecorded liens,
Encumbrances, covenants, conditions, restrictions, assessments, easements, leases and taxes,
subject only to the following title exceptions ("Approved Title Exceptions"):
(a)A lien to secure payment of real estate taxes, not delinquent;
(b)The lien of supplemental taxes assessed pursuant to Chapter 3.5
commencing with Section 75 of the California Revenue and Taxation Code ("Code"), but only to
the extent that such supplemental taxes are attributable io the transaction contemplated by this
Ageement. City shall be responsible for, and hereby indemnifies Developer against, any
supplemental taxes assessed pursuant to the Code, to the extent that such taxes relate to events
(including, without limitation, any changes in ov,~ership and/or new construction) occurring
prior to the Close of Escrow;
(c) Non-monetary matters affecting the title created by or with the
written consent of Developer;
(d)
affecting the City Parcel;
The applicable zoning, building and development regulations
(e) Any Permitted Encumbrance or the sect~ty instruments required
by the funding sources listed in the Sources and Uses Budget.
4.3.3- Developer shall have sixty (60) days from receipt ofal! of the Title
Documents ("Title Approval Date") to Nve City and Escrow Agent v, Mtten notice ("Developer’s
Title Notice") of Developer’s disapproval or conditional approval of the legal description or any
matters shown in the Title Documents. The failure to timely deliver Developer’s Title Notice
shall constitute both a waiver of Developer’s right to object and an irrevocable determination that
Developer has approved the Title Documents in all respects, including but not limited to any
exceptions contained in the Title Documents and not listed above.
If Developer disapproves or conditionally approves the legal description and/or
any non-monetary matters of title showm in the Title Documents, City may, within thirty (30)
days after its receipt of Developer’s Title Notice, elect to eliminate or an~eliorate to Developer’s
satisfaction the disapproved or conditionally approved title matters. City shall Nve Developer
written notice ("City’s Title Notice’,) of those disapproved or conditionally approved title
matters, if any, which City covenants and agees to either eliminate from the Title Policy as
exceptions to title, or to ameliorate to Developer’s satisfaction by the Closing Date.
10677-0013k933044v7.doc - 14 -DRAFT 07/13/07
If City does not elect to eliminate or ameliorate to Developer’s satisfaction any
disapproved or conditionally approved title matters, or if, despite its reasonable efforts, City is
unable to eliminate or ameliorate to Developer’s satisfaction all such disapproved matters prior
to the Closing Date, then Developer shall have the right, by a writing delivered to City and
Escrow Agent within ten (1~0) days receipt of City’s Title Notice, to: (1) waive its prior
disapproval, in which event the disapproved matters shall be deemed approved; or (2) terminate
this Agreement and the Escrow created pursuant hereto (such termination does not require
compliance with the notice and cure provisions of Section 8.1).
4.4 Title Insurance
4.4.1 As a condition to the Close of Escrow, Escrow Agent shall cause the Title
Company to issue and deliver to Developer, a CLTA standard coverage policy of title insurance
(or at Developer’s option, an ALTA policy) in the amount of the fair market value of the City
Parcel insuring that fee simple title to the City Parce! is vested in Developer in the condition
required by Section 4.3.2 of this Agreement (~Developer Title Policy").
4.4.2 As a condition to the Close of Escrow, Escrow Agent shall cause the Title
Company to issue and deliver to City, a CLTA standard coverage policy of title insurance (or at
City’s option, an ALTA policy) in the amount of the City Loan insuring that the City Deed of
Trust is a valid lien in first position on the Ole’s Parcel as of the Closing Date ("City Title
Policy").
4.4.3 As a condition to the Close of Escrow, Escrow Agent shall cause the Title
Company to issue and deliver to Developer, the title insurance policies required by the Ole’s
Purchase Agreement.
4.4.4 City shall pay the title insurance premium for the City Title Policy and the
Developer Title Policy attributable to a CLTA standard form; Developer shall be solely
responsible to pay any additional costs associated with an ALTA title policy, including the costs
of survey, and for all additional or other premiums for extended coverage or other special
endorsements. Payment for premiums for policies under the Ole’s Purchase Agreement shall be
made as required by the Ole’s Purchase Agreement.
4.5 Condition of City Parcel
4.5.1 Inspection and Survey
Representatives of Developer shall have the right of access to and entry at all
reasonable times, for the purpose of inspecting the condition of the City Parcel and obtaining
data and making surveys and tests necessary to carry out this Agreement.
Entry of Developer onto the City Parcel pursuant to this subsection shall be
subject to the provisions of Sections 5.10 and 5.11 (Insurance and Indemnification) (except that
Builder’s Risk Insurance and the coverages applicable solely to the General Contractor shall not
be required prior to the Close of Escrow and commencement of construction), and to the other
provisions of a standard City access permit, on a form to be supplied by City.
Developer shall defend, indemnify and hold City harmless from any costs, claims,
damages or liabilities pertaining to or arising from the performance of any such tests and
inspections by Developer or any such activities of Developer on the City Parcel. In the event
Developer fails to accept title to the. City Parcel, Developer shall immediately repair all damage
to the City Parcel caused by entry of Developer onto the City Parcel and tests performed thereon
by Developer.
10677-0013\933044v7.doc - 15 -DRAFT 07/13/07
4.5.2 Physical Condition of the City Parcel
(a) City shall, at its own expense, cause the demolition of the
Substation and other improvements currently on the City Parcel prior to January 1, 2008. To the
extent, Remediation is requi-red by a state or federal agency, City shall complete such
Remediation by July 1, 2008 and provide Developer a copy of documentation showing that the
Remediation has been completed in accordance with the applicable state or federal agency
requirements.
4.5.3 Enviromnental Indemnity - City Parcel
(a) To the fullest extent permitted by law, City shall indemnify, defend
and hold harmless Developer and its successors and assigns and any and all of their respective
employees, officials, representatives, attorneys, and agents (collectively, the "Developer
Indemnitees") from and against any know~ or unknown claim, loss, damages, liability,
obligation (including, without limitation, any obligation to monitor, test, sample, report to
governrnental authorities, remediate or clean up, or any obligation under a permit or order),
expense, contribution or indenmity obligation (whether under any Environmental Law or any
other statute, common law or in equity), Remediation Costs for the City Parcel or any other
claims, demands, causes of action, suits, judgments, debts, costs, !osses, penalties, fines,
encumbrances, rights, obligations, indemnities, liens, expenses (including but not limited to any
claims for attorneys’ fees and costs), settlements, professionals’ fees, tax claims, claims for
payment, claims for contribution or indemnity (whether statutory, contractual or equitable), of
any and every kind or nature whatsoever that relate to the City Parcel, and (i) whether based on
strict liability, active or passive negligence, gross negligence, contractual or statutory liability, or
otherwise; or (ii) whether seeking judicial, arbitra!, administrative, or equitable relief or
otherwise, costs and expenses of investigation, analysis, Remediation, and defense of any claim,
and whether or not any such claim is ultimately defeated; or (iii) whether seeking a fine or
penalty; or (iv) whether incurred by a Party hereto or claimed by any tl~rd party (including,
without limitation, any governmental entity), arising out of or relating to any actual, alleged or
threatened discharge, release, emission, spill or migation into the envirom~aent, or any such
discharge, release, disposal, emission, spill, migation, or Remediation of any Hazardous
Materia! on or under the City Parcel or emanating from the City Parcel, or any other
Environmental Condition at the City Parcel (collectively, "City Parcel Environmental Claims").
(b) Failure of Developer Indemnitees to monitor compliance with
these requirements imposes no additional obligations on Developer Inde~rmitees and will in no
way act as a waiver of any rights hereunder. This obligation to indenmify and defend Developer
Indenmitees as set forth herein is binding on the successors and assigns of City and shall survive
the expiration or termination of this Ageement.
(c) City will also defend the Developer Indemnitees from any such
Property Environmental Claims described herein, provided, however, that the Developer
Indelrmitees shall have the right to select attorneys of its own choice to represent it at City’s
expense, but with City’s consent, which shall not be unreasonably withheld.
4.6 Disposition Escrow
City and Developer shall open an escrow ("Escrow") for the City Parcel with First
American Title Insurance Company, 1737 North First St., Suite 100, San Jose, CA 95112,
Attention: Gail A. Deaver ("Escrow Holder"), or another mutually acceptable escrow company
agreed to by the Parties ("Escrow Agent") by the time established therefor in the Schedule of
Performance. This Ageement constitutes the joint basic escrow instructions of City and
Developer for City’s conveyance of the City Parcel and a duplicate original of this Agreement
10677-0013k933044v7.doc - 16 -DRAFT 07/13/07
shall be delivered to the Escrow Agent upon the opening of the Escrow. City and Developer
shall provide such additional or revised escrow instructions as shall be necessary for and
consistent with this Agreement. In the event of any conflict between the provisions of this
Agreement and the "standard form" escrow instructions of Escrow Agent, the provisions of this
Agreement shall control. Eg~row Agent is empowered to and shall carry out its duties as EscrOw
Agent under this Agreement.
4.6.1 Deposits into Escrow
(a) Developer shall pay in escrow to the Escrow Agent the following
fees, charges and costs promptly after the Escrow Agent has notified Developer of the amount of
such fees, charges and costs, but not earlier than five (5) days prior to the scheduled date for
closing the escrow:
(i)The portion(s) of the premium for the Developer Title
Policy attributable to the extended coverage (including the costs of the ALTA survey, if any) or
other special endorsements, if any;
(ii) One-half of any and all other fees, including but not limited
to recording fee and notary fees, necessary to close the escrow.
(b) City shall pay in escrow to the Escrow Agent the City Loan less
the City Advance (pursuant to Section 7.2.1 below), and the following fees, charges and costs
promptly after the Escrow Agent has notified City of the amount of such fees, charges and costs,
but not earlier than five (5) days prior to the scheduled date for closing the Escrow:
(i)All escrow fees;
(ii)Ad valorem taxes, if any, upon the City Parcel;
(iii) The premium for the City Title Policy and portion of the
premium for the Developer Title Policy attributable to the CLTA standard form;
transfer;
(iv)Any documentary stamps or transfer tax imposed, for such
(v) One-half of any and all other fees, including but not limited
to recording and notary fees, necessary to close the Escrow.
(c) City and Developer shall timely and properly execute,
acknowledge and deliver into Escrow, the Re~o~latory Agreement, the Memorandum of Option
and the Memorandum of Agreement, along with the instruments required to be delivered to
Escrow by the respective parties by Section 4.2.
(d) It shall be an express condition to the Close of Escrow that the
Escrow Holder shall be prepared to close simultaneously the sale of the Ole’s Parcel to
Developer pursuant to the Ole’s Purchase Agreement.
(e)Subject to Section 4.6.1 (d), the Escrow Agent is authorized to:
(i) Pay, and charge Developer and City for any fees, charges
and costs payable under this subsection. Before such payments or charges are made, the Escrow
Agent shall notify City and Developer in writing of the fees, charges and costs necessary to
reconvey monetary liens in order to close the Escrow.
10677-0013\933044v7.doc - 17 -DRAFT 07/13/07
(ii) Disburse the City Loan into the escrow under the Ole’s
Parcel Purchase Agreement, as well as the other funds hereunder to the respective Party due the
same and deliver any documents to the parties entitled thereto when the conditions of this
Escrow have been fulfilled ~by City and Developer.
(iii) Record the Grant Deed, the City Deed of Trust, the deed to
the Ole’s Parcel, the Regulatory Agreement, the Memorandurn of Option and the Memorandum
of Agreement, in accordance with the terms and provisions of this Agreement.
(f)All funds received in the Escrow shall be deposited by the Escrow
Agent in a separate interest-eanaing account or accounts with may state or national bank doing
business in the State of California and reasonably approved by Developer; interest so earned
shall be payable to Developer. All disbursements shall be made by check of the Escrow Agent.
All adjustments are to be made on the basis of a thirty (30) day month.
(g) If Escrow cannot be closed on the Closing Date, because a Party
has failed to perform its obligations under this Agreement, then the Party who then shall have
fully performed the acts to be perfornaed before the conveyance of titte may, in writing, demand
from the Escrow Agent the return of its money, papers or documents deposited with the Escrow
Agent. No demand for return shall be reco~aized until ten (10) days after the Escrow Agent (or
the demanding Party) shall have mailed copies of such demand to the other Party or Parties at the
address of its or their principal place or places of business. Objections, if any, shall be raised by
written notice to the Escrow Agent and to the other Party within the ten (10) day period, in which
event the Escrow Agent is authorized to hold all money, papers and documents until instructed
by a mutual agreement of the Parties or by a court of competent jurisdiction. If no such demands
are made, the Escrow shall be closed as soon as possible.
(h) If objections are raised as set forth above, the Escrow Agent shall
not be obligated to return any such money, papers or documents except upon the written
instructions of City and Developer or until the Party entitled thereto has been detelanined by a
final decision of a court of competent jurisdiction. If no such objections are made within the ten
(! 0) day period, the Escrow Agent shall ilmnediately return the demanded money, papers and
documents; and the escrow cancellation fees shall be paid by the non-demanding Party.
(i) All communications from the Escrow Agent, City, or Developer
shall be directed to the addresses and in the manner established in Section 9.1 of this Agreement
for notices, demands and communications between City and Developer.
(j) The liability of the Escrow Agent under this Agreement is limited
to performance of the obligations imposed upon it pursuant to this Article 4.
4.6.2 Conveyance of Title and Delivery of Possession
Subject to any extensions of time mutually agreed upon in v, Mting between the
Parties, the conveyance to Developer shall be completed on or before the Closing Date. The
Parties agree to perform all acts necessary for conveyance of title and possession in sufficient
time for title and possession of the City Parcel to be conveyed in accordance with the foregoing
provisions.
4.6.3 Close of Escrow
For purposes of this Agreement, "Close of Escrow" shall be defined as the date
that the Grant Deed, the City Deed of Trust, the Regulatory Agreement, the Memorandum of
Option, the Memorandum of Agreement and the deed of the Ole’s Parcel pursuant to the Ole’s
10677-0013\933044v7.doc - 18 -DRAFT 07/13/07
Purchase Ageement are recorded among the land records in the Office of the County Recorder
for Santa Clara County. The Close of Escrow shall occur no later than the Closing Date.
4.6.4 Taxes and Assessments
Ad valorem taxes and assessments, if any, on the City Parcel levied, assessed or
imposed for any period commencing prior to the Closing Date shall be prorated as of the Closing
Date. Such taxes and assessments shall be prorated based on a 30-day month and a 360-day
year. Those taxes and assessments levied or imposed for any period commencing prior to the
Close of Escrow on the City Parcel, prorated up to and including the Closing Date, shall be paid
by City. Developer shall pay those taxes and assessments levied or imposed for any period
commencing after the Closing Date, as well as Developer’s prorated share of those taxes and
assessments levied or imposed prior to the Close of Escrow. Nothing herein shall limit the right
of Developer or City to contest in good faith or pursue all remedies in challenging any such
assessments or taxes.
4.6.5 Possession
City shall convey the City Parcel to Developer free of any possession or right of
possession, except the possession of parties consented to by Developer in writing, in its sole and
absolute discretion.
4.6.6 Recordation
(a) Upon the Close of Escrow, the Escrow Agent shall cause the Gra~t
Deed, the City Deed of Trust, the deed to the Ole’s Parcel, the Regulatory Ageement, the
Memorandum of Option, and the Memorandum of A~eement to be recorded among the land
records in the Official Records of Santa Clara County. The Grant Deed shall be recorded on the
City Parcel, subject only to the Approved Title Exceptions in Section 4.3.2. All other
instruments shall be recorded on the Site (i.e., on both the City Parcel and the Ole’s Parcel).
(b) Escrow Agent shall provide both City and Developer with
conformed copies of all documents recorded in connection with this Agreement.
ARTICLE 5 DEVELOPMENT OF THE SITE
5.1 Scope of Development
Upon the Close of Escrow, Developer shall promptly begin and thereafter
diligently prosecute to completion the improvement of the Site as provided in the Scope of
Development and Schedule of Performance. Subject to Section 9.3 hereof, Developer shall
begin and complete all construction and development within the times specified in the Schedule
of Performance or such reasonable extension of those dates as may be ~anted by each Party to
the other in writing.
5.2 Developer’s Submittals of Desi.an and Construction Documents
Developer shall submit Development Plans for the Development in accordance
with applicable Municipal Code requirements.
10677-0013\933044v7.doc - 19 -DRAFT 07/13/07
5.3 City Review and Approval of Plans. Drawings. and Related Documents
5.3.1 City shall have approval rights over plans, drawings and related
documents described in Section 5.2, including any changes proposed to such documents or
drawings in accordance witlithe Municipal Code.
5.3.2 Except as expressly provided in this Agreement, City neither undertakes
nor assmnes nor will have any responsibility or duty to Developer, or to any tl~rd party to
review, inspect, supervise, pass judgment upon or inform Developer or any third party of any
matter in connection with the Development, whether regarding the quality, adequacy or
suitability or the plans, any labor, service, equipment or material furnished to the Development,
any person furnishing the same or otherwise. Developer, and all third parties shall rely upon
their own judgment regarding such matters. Any review, inspection, supervision, exercise of
jud~nent or information supplied to Developer or to any third panty by City in connection with
such matter is for the public purpose of completing the proposed Development in accordance
with the Municipal Code, and neither Developer (except for the purposes set forth in this
Agreement), nor any third party is entitled to rely thereon.
5.3.3 Developer shall undertake reasonable community outreach and
neighborhood liaison efforts throu~h the design and construction phases of the Development,
including but not limited to organizing and/or attending public information meetings as
reasonably necessary.
5.4 Cost of Construction
The cost of developing the Site, together with all on- and off-site improvements
set forth in the Scope of Development or otherwise required by the City Building Official or the
City Engineer shall be borne by Developer. The Parties hereby acknowledge and a~ee that any
increase in costs above the amounts projected or assumed by Developer, or decreases in revenues
below the amounts projected or assumed by Developer, shall be at the sole financial risk of
Developer.
5.5 Prevailing Wa~es.
Developer shall comply with all applicable requirements of the Prevailing Wage
Laws. The Parties hereby acknowledge and agree that any increase in costs as a result of such
requirements shal! be at the sole financial risk of Developer.
5.6 City and Other Governmental City Permits
Before commencement of construction or development of any buildings,
structures or other work of improvement upon the Site, Developer shall, at its own expense,
secure or cause to be secured any and all permits which may be required by City or any other
governmental agency having jurisdiction over such construction or development.
5.7 Zonin~ and Land Use Requirements: Enviroumental Review
5.7.1 Developer acknowledges and agrees that this Agreement is not a statutory
development agreement pursuant to California Government Code Section 65864 et seq; and as
such provides no Entitlements for the Site. Developer shall prepare and submit applications for
the Entitlements for the Site in accordance with the dates listed therefor in the Schedule of
Performance and thereafter diligently pursue Final Approval of the Entitlements.
10677-0013k933044v7.doc - 20 -DRAFT 07/13/07
5.7.2 No later than thirty (30) days after the Closing, Developer shall prepare
and submit a complete application for a certificate of compliance, merger, map or other action
which, in accordance with the Subdivision Map Act, will result in the combination of the Ole’s
Parcel and the City Parcel into one legal parcel. Prior to the sale or leasing of any residential or
commercial units in the DeVelopment, Developer shall have established a commercial
condominimn that separates the ground floor commercial!retail portions of the Development
from the residential portions in accordance with the Subdivision Map Act. The CC&Rs and
owner association by-laws for such commercial condominiums shall be subject to the review and
approval by the City, which shall not be unreasonably withheld, delayed or conditioned.
5.7.3 City shall cooperate with Developer in all proceedings which may be
necessary so that the development of the Site and the construction, use, operation, and
maintenance of the improvements thereon in accordance with the provisions of this Agreement
shall be in conformity with applicable zoning and General Plan requirements. City shall use its
best efforts to expedite all necessary approvals. The costs of all environmental studies required
by any governmental agency or court shall be borne by Developer.
5.7.4 Developer shall take all necessary steps so that the development of the Site
and the construction, use, operation, and maintenance of the improvements thereon in
accordance with the provisions of this Agreement shall be in conformity with applicable zoning
and General Plan requirements, including the conditions of approval of any required land use
entitlements. Pursuant to CEQA, an environmental document for the South of Forest
Coordinated Area Plan, which contemplated the Development, has been prepared and certified
prior to approval of this A~eement. Deve!oper shall comply with all mitigation measures
imposed on the Development pursuant to such environmental document. Additional
environmental studies will be prepared before approval of the Entitlements and the costs of such
studies shall be borne by Developer.
5.7.5 If any revisions or modifications to this Agreement, including the Scope of
Development, shall be required to comply with any requirement of a governmental official, City,
department or bureau having jurisdiction over the development of the Site, City and Developer
shall cooperate in making such reasonable changes, consistent with the public purposes of this
Agreement, as may be necessary.
5.8 CitY Rights of Access Durin~ Construction
Without limiting any rights of access which City may have irrespective of this
Agreement, representatives of City shal! have a reasonable right of access to the Site during
normal construction hours during construction, including, but not limited to, inspecting the work
being performed to construct the Improvements. City representatives shall comply with all
safety rules and other rules imposed by Developer, including requirements that such
representatives be escorted. Such representatives of City shall be those desi~onated in writing by
the City Manager. Any such entry shall be made only after reasonable notice to Developer, and
City shall defend, indemnify and hold Developer harmless from any costs, claims, damages or
liabilities pertaining to or arising from any such entry by a City representative.
Prior to the Restriction Termination Date, City, at its sole risk and expense,
reserves the right to enter the Site or any part thereof at all reasonable times during ordinary
business hours and with as little interference as possible for the purpose of construction,
reconstruction, maintenance, repair or service of any public improvements or public facilities
located on the Site. Any such entry shall be made only after reasonable notice to Developer,
except in case of emergency repairs, and City shall defend, indemnify and hold Developer
harmless from any costs, claims, damages or liabilities pertaining to or arising from any such
10677-0013\933044v7.doc - 2 ! -DRAFT 07/13/07
entry or the activities of City on the Site. Any damage or injury to the Site or any improvement
thereon resulting from any such entry shall be promptly repaired or restored at City’s expense.
5.9 Local, State and Federal Laws
Developer shall carry out the construction of the Improvements in conformity
with all applicable Laws, including but not limited to all requirements of Laws related to
accessibility for persons with disabilities.
5.10 Indemnification
(a) Developer shall indemnify, defend and hold the City and its elected and
appointed officials, officers, employees, agents and successors and assigns (collectively, the
"Indelrmitees" in this Section 5.10) harmless from and against any and all Losses and Liabilities
arising from orin COlmection with, or caused by (i) any act, omission or negligence of Developer
or any of Developer’s respective contractors, licensees, invitees, agents, servants or employees,
wherever the same may occur; (ii) any use of the Site, or any accident, injury, death or damage to
any person or property occurring in, on or about the Site or any part thereof, or from the
construction or use by Developer of the Site or the Development, or from any activity, work or
thing done, permitted or suffered by Developer or its contractors, employees, servants, agents or
invitees, in or about the Site or elsewhere to the extent not caused by the acts or omissions of
Indemnitees; m~d (iii) any breach or default in the performance of any obligations on
Developer’s part to be performed under the terms of this Agreement, or arising from any
negligence of Developer, or_ any such claim or any action or proceeding brought thereon, but
excluding those arising solely out of the City’s negligence or intentional misconduct; and in case
any action or proceeding is brou~ht against Indemnitees by reason of any such claim, Developer
upon notice from Indenmitees shall defend the same at Developer’s expense with counsel
satisfactory to Indemnitees. Notwithstanding the foregoing, in the event of any litigation or
claims arising under CEQA or NEPA in which Indemnitees control or are responsible for the
preparation and/or review of CEQA or NEPA documentation, the indemnification provided for
in this Section 5.10 shall be limited to fifty percent (50%) of such fees, costs and damages.
Developer, as a material part of the consideration to City, hereby assumes all risk
of damage to property or injury to persons in, upon or about the Site arising from any cause
whatsoever, except as provided in Section 4.5.3. These provisions are in addition to, and not in
lieu of, the insurance required to be provided by Section 5.11 below.
Without affecting the rights of Indemnitees under any provision of this
Agreement, Developer shall not be required to indemnify and hold harmless Indemnitees for
liability attributable to the gross negligence or willful misconduct of Indemnitees, provided such
gross negligence or willful misconduct is determined by agreement between the parties or by the
findings of a court of dompetent jurisdiction. In instances where Indemnitees are shown to have
been grossly negligent and where Indemnitees’ gross negligence accounts for only a percentage
of the liability involved, the obligation of Developer will be for that entire portion or percentage
of liability not attributable to the gross negligence of Indemnitees.
Failure of Indemnitees to monitor compliance with these requirements imposes no
additional obligations on Indemnitees and willin no way act as a waiver of any rights hereunder.
This obligation to indemnify mad defend Indemnitees as set forth here is binding on the
successors, assigns or heirs of Developer and shall survive the termination of this Agreement or
this section.
(b) To the fullest extent permitted by law, Developer shall indemnify, defend
and hold harmless the Indemnitees from and against any known or unknown claim, loss,
10677-0013k933044v7.doc - 22 -DRAFT 07/13/07
damages, liability, obligation (including, without limitation, any obligation to monitor, test,
sample, report to governmental authorities, remediate or clean up, or any obligation under a
permit or order), expense, contribution or indemnity obligation (whether under any
Environmental Law .or any other statute, common law or in equity), Remediation Costs for the
Ole’s Parcel or any other cl~iims, demands, causes of action, suits, judgments, debts, costs,
losses, penalties, fines, encumbrances, rights, obligations, indemnities, liens, expenses (including
but not limited to any claims for attorneys’ fees and costs), settlements, professionals’ fees, tax
claims, claims for pa?qnent, claims for contribution or indemnity (whether statutory, contractual
or equitable), of any and every kind or nature whatsoever that relate to the Ole’s Parcel, and (i)
whether based on strict liability, active or passive negligence, gross negligence, contractual or
statutory liability, or otherwise; or (ii) whether seeking judicial, arbitral, administrative, or
equitable relief or otherwise, costs and expenses of investigation, analysis, Remediation, and
defense of any claim, and whether or not any such claim is ultimately defeated; or (iii) whether
seeking a fine or penalty; or (iv) whether incurred by a Party hereto or claimed by any third party
(including, without limitation, any governmental entity), arising out of or relating to any actual,
alleged or threatened discharge, release, emission, spill or migration into the environment, or any
such discharge, release, disposal, emission, spill, migration, or Remediation of any Hazardous
Material on or under the Ole’s Parcel or emanating from the Ole’s Parcel, or any other
Environmental Condition at the Ole’s Parcel.
5.11 Bodily Iniurv, Property Damage and Worker’ s Compensation Insurance
5.11.1 Developer shall procure at its sole cost and expense (or shall require of
General Contractor as specified) and shall keep in effect from the date of this Agreement and at
all times until the end of the term or as otherwise specified, the following insurance:
(a) Commercial General Liability Insurance provided on Insurance Services
Office form CG 00 01 or equivalent coverage. Policy limits shall be no less than one million
dollars ($1,000,000) per occurrence for all coverages and two million do!lars ($2,000,000)
general aggregate. During construction, this insurance shall be maintained by both Developer
and Developer’s general contractor. City and its employees and agents shall be added as
additional insureds to Developer’s and General Contractor’s policies. On the General
Contractor’s policy, the insurer shall use ISO Form CG 20 10 11 85 or equivalent (including CG
20 10 forms with later publishing dates if accompanied by form CG 20 37 providing completed
operations coverage), not limiting coverage for the additional insured to "ongoing operations" or
in any way excluding coverage for completed operations. All coverage shall apply on a primary
non-contributing basis in relation to any other insurance or self-insurance, primary or excess,
available to City or any employee or agent of City. Coverage shall not be limited to the vicarious
liability or supervisory role of any additional insured. The General Contractor’s coverage shall
contain no contractors’ limitation or other endorsement that reduces coverage from that provided
by the basic ISO policy or equivalent. See Section 5.11.2(d) belmv.
(b)Umbrella (or excess) Liability Insurance (over primary) for Developer
and the General Contractor shall apply to bodily injury/property damage, personal
injury/advertising injury, at a minimum. Coverage shall be at least as broad as, any underlying
coverage. Coverage shall be provided on a "pay on behalf" basis (rather than reimbursement),
with defense costs payable in addition to policy limits. There shall be no cross liability exclusion
and no contractor’s limitation endorsement that would conflict with or provide less that coverage
provided in the underlying policy. Policy limits shall be not less than two million dollars
($2,000,000) per occurrence and in the aggregate for a total of three million dollars ($3,000,000)
when added to the underling policy. The policies shall have starting and ending dates concurrent
with the underlying coverages. The Named Insured may determine the layering of primary and
excess liability insurance provided that if such layering differs from that described here, the
actual coverage program meets the minimum total required limits and complies with all other
10677-0013\933044v7.doc - 23 -DRAFT 07/13/07
requirements listed here. Policies shall be endorsed to provide a separate aggregate for this
project.
(c)Business Auto Coverage for The General Contractor shall be written on
ISO Business Auto Coverage Fom~ CA 00 01 or the equivalent, including coverage for owned,
nonowned and hired autos. If the General Contractor does not own any vehicles, this
requirement may be satisfied by a nonowned vehicle endorsement to the general and umbrella
liability policies. Limits shall be no less than two million dollars ($2,000,000) per accident.
(d) Workers’ Compensation!Employer’s Liability for Developer and the
General Contractor shall provide workers’ compensation statutory benefits as required by law.
Employer’s liability limits shall be no less than one million dollars ($1,000,000) per accident or
disease.
(e)During construction, Builder’s Risk Insurance covering al! real and
personal property for "all risks" of loss or "comprehensive perils" coverage for all buildings,
structures, fixtures, materials, supplies, machinery and equipment to be used in or incidental to
the construction at the Site, off site, or in transit, for the full replacement value of such
properties. Coverage is not intended to cover equipment or other property of any contractor or
subcontractor but shall not exclude property of others in the care, custody or control of the
insured for which any insured may be liable. After completion of construction, Developer shall
maintain Conm~ercial Property Insurance covering the premises, fixtures, equipment, building,
all property situated in, on, or constituting a part of the premises and any improvements.
Coverage shall be at least as broad as the Insurance Services Offices broad causes of loss form
CP 10 20. Coverage shall be sufficient to insure 100% of the replacement value and there shall
be no coinsurance provisions. The policy shall include an inflation g~ard endorsement, 100%
rents coverage, contents coverage, coverage for personal property of others, ordinance or law and
increased cost of construction coverage.
insurance:
5.11.2 Conditions applicable to Developer and General Contractor provision of
(a) All insurance coverage and limits provided pursuant to this Agreement
shall apply to the full extent of the policies involved, available or applicable. Nothing contained
in this Agreement or any other agreement relating to City or its operations limits the application
of such insurance coverage.
(b) Requirements of specific coverage features or limits contained in this
Section 5.11 are not intended as a limitation on coverage, limits or other requirements, or a
waiver of any coverage normally provided by any insurance. Specific reference to a given
coverage feature is for purposes of clarification only and is not intended by any Party to be all
inclusive, or to the exclusion of other coverage, or a waiver of any type.
(c) All general or auto liability insurance coverage provided pursuant to this
A~eement, or any other agreements pertaining to the performance of this Agreement, shall not
.prohibit Developer or General Contractor, and Developer’s or General Contractor’s employees,
or agents, from waiving the right of recovery prior to a loss. Developer waives its right of
recovery against City. Developer shall require a similar waiver in favor of City from Contractor
in the contract between Developer and Contractor.
(d) Any endorsements added to the basic policies required by this section that
reduce coverage or limits available to City must be first submitted to City and approved in
v~ting by the City Manager. Any policy that contains such limiting endorsements that have not
been reviewed by City shall not be in compliance with these requirements.
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(e) Unless otherwise approved by City, Developer’s insurance and insurance
provided by any General Contractor or subcontractor shall be written by insurers authorized to
do business in the State of California and with a minimum "Best’s Insurance Guide" rating of
"A-:VI." Self-insurance will not be considered to comply with these insurance specifications.
(f) In the event any policy of insurance required under this Agreement does
not comply with these requirements or is canceled and not replaced, City has the right but not the
duty to obtain the insurance it deems necessary and any premium paid by City will be promptly
reimbursed by Developer.
(g) Developer agrees to provide evidence of the insurance required herein,
satisfactory to City, consisting of certificate(s) of insurance evidencing all of the coverages
required and an additional insured endorsement to Deve!oper’s general liability and umbrella
liability policies as specified in the description of insurance requirements above. Certificate(s)
are to reflect that the insurer will provide thirty (30) days’ notice of any cancellation of coverage;
the insurer may, however, reserve the rio~ht of only a ten (10) day notification in the case of
nonpayment of premium. Developer agrees to provide copies of any endorsements modifying
coverage in any way upon request from City.
(h) Developer shall provide proof that policies of insurance required herein
expiring during the term of this Agreement have been renewed or replaced with other policies
providing at least the same coverage. Such proofwi!l be furnished within 72 hours of the
expiration of the coverages.
(i)Any actual or alleged failure on the part of City or any other additional
insured under these requirements to obtain proof of insurance required .under this Agreement in
no way waives any right or remedy of City or any additiona! insured, in this or any other regard.
(j)Developer agrees to require (through its General Contractor) all
subcontractors or other parties (but not including General Contractor) hired for this project to
purchase and maintain insurance for general liability (minimum limit $1,000,000 per
occurrence), automobile liability $(1,000,000 per accident) and workers’ compensation (statutory
benefits).
(k) Developer agrees to ensure or to require General Contractor to ensure that
such coverage is provided as required here from all subcontractors and other parties brought onto
the Development by Developer or General Contractor. Developer agrees that upon request, all
agreements with subcontractors or others with whom Developer or General Contractor contracts
with for the Development, and all certificates of insurance obtained in compliance with this
paragraph will be submitted to City for review. Failure of City to request copies of such
documents will not impose any liability on City, or its employees.
(1)Developer agrees to require that no contract used by any General
Contractor or subcontractor, or contracts Developer enters into on behalf of City, wil! reserve the
right to charge back to City the cost of insurance required by this Agreement.
(m) Developer agrees to require in its contract with General Contractor that the
General Contractor will assure that the Project site and all sites connected with the project in any
way are covered under the insurance policies, including those of subcontractors and other parties,
that provide coverage as required by this Agreement.
(n) Developer agrees to provide immediate notice to City of any claim or loss
against Developer that includes City as a defendant. City assumes no obligation or liability by
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such notice, but has the right (but not the duty) to monitor the handlhag of any such claim or
claims if they are likely to involve City.
(o) Developer agrees not to attempt to avoid its defense and indelrmity
obligations to City and its eta~ployees, agents, officials and servants by using as a defense
Developer’s statutory immunity under workers’ compensation and similar statutes. Developer
will obtain the same agreement from General Contractor.
(p) Developer shall require General Contractor to maintain commercial
general liability, and if necessary, commercial umbrella liability insurance with a limit of not less
than three million dollars ($3,000,000) each occurrence for at least three years following
substantial completion of the work.
(q) Developer agrees to assure that any agreements with design professionals
(including agreements between the General Contractor and other parties) will specify that the
design professional shall provide evidence of professional liability coverage. The limit of
liability required is subject to City approval.
5.12 Non-discrimination Durin~ Construction
Developer for itself and its successors and assigns agrees that in the construction
of the Improvements on the Site provided for in this Agreement:
(a) Deve.!oper will not discriminate against any employee or applicant for
employrnent because of race, color, religion, creed, national oriNn, ancestry, disability, age,
marital status, sex and/or sexual orientation, political affiliation or opinion, or pregnancy or
pregnancy-related condition. Developer will take reasonable action to ensure that applicants are
employed, and that employees are treated during employment without regard to their race, color,
religion, creed, national origin, ancestry, disability, age, marital status, sex and/or sexual
orientation, political affiliation or opinion, or pregnancy or pregnancy-related condition. Such
action shall include, but not be limited to, the following: emp!oyment, upgrading, demotion, or
transfer; recruitment or recruitment advertising, layoff or termination; rates of pay or other forms
of compensation; and selection for training, including apprenticeship. Developer agrees to post
in conspicuous places, available to emp!oyees and applicants for employment, notices setting
forth the provisions of this nondiscrimination clause.
(b) Developer will, in all solicitations or advertisements for employees placed
by o.r on behalf of Developer, state that all qualified applicants will receive consideration for
employment without regard to race, color, religion, creed, national origin, ancestry, disability,
age, marital status, sex and/or sexual orientation, political affiliation or opinion, or pregnancy or
pregnancy-related condition.
(c) Developer will cause the foregoing provisions to be inserted in all
contracts for any work covered by this Agreement so that such provisions will be binding upon
each contractor and subcontractor, provided that the foregoing provisions shall not apply to
contracts or subcontracts for standard commercial supplies or raw materials.
5.13 Security Financing, Rights of Holders
5.13.1 No Encumbrances Except as Mortgages or Other Financin~ for
Development
Notwithstanding Section 2.6, Mortgages are permitted to be recorded against the
Site and/or the Improvements, or any portion thereof, except that prior to the Restriction
10677-0013\933044v7.doc - 26 -DRAFT 07/13/07
Termination Date, such Mortgages may be obtained by Developer only for the purpose of
securing funds to be used for financing the acquisition of the Site and/or the construction of the
Improvements and/or any take-out financing related to the development of the Site in an amount
equal to or less than the total costs related to the development of the Site and any other
expenditures necessary or a~propriate to develop the Site under this Agreement, including
without limitation real and personal property taxes, related off-site improvements, insurance
premiums, closing costs, attorneys’ fees, loan carrying costs and costs of financing.
Developer shall notify City in advance of any Mortgage if Developer proposes to
enter into the same before the Restriction Termination Date. Developer shall not enter into may
such Mortgage without the prior written approval of City, which approval City agrees to give if
any such Mortgage is to a Qualified Financial Institution and which must in any event be acted
upon by City within ten (10) days of City receiving evidence of the financing. In any event,
Developer shall promptly notify City of any Mortgage that has been created or attached thereto
prior to Restriction Termination Date, whether by voluntary act of Developer or othel-a, ise. The
City Manager may, in his or her discretion, enter into commercially reasonable subordination
agreements requested by Qualified Financial Institutions that provide Mortgages for the
Development. Such subordination agreements shall provide, in the judgment of the City
Manager, appropriate City rights to notice of, and cure rights for, any Developer defaults under
the Mortgage.
5.13.2 Holder Not Obligated to Construct Improvements
A Hotder shall in no way be obligated by the provisions of this Agreement to
construct or complete the Improvements or to guarantee such construction or completion.
Nothing in this Agreement shal! be deemed or construed to permit or authorize any Holder to
devote the Site to any uses, or to construct any improvements thereon, other than those uses or
Improvements provided for or authorized by this Agreement.
5.13.3 Notice of Default to Mortga,$e Holders: Right to Cure
If Developer shall Mortgage the Site and/or Improvements, or any part or parts
thereof, City agrees that so long as any such Mortgage(s) shall remain unsatisfied of record or
until ~adtten notice of satisfaction is Even by the Holder(s) to City, whenever City shall deliver
any notice or demand to Developer regarding any breach or default by Developer in completion
of construction of the Improvements, or any other alleged default, City shall at the same time
deliver to each Holder of record authorized by this Agreement a copy of such notice or demand,
but only if: (i) the Mortgage(s) is authorized by Section 5.13.1, (ii) the Holder(s) of such
Mortgage(s) shall have delivered to City a true copy thereof, together with written notice
specifying the name and address of the Holder(s) and the pertinent recording data with respect to
such Mortgage(s), and (iii) such Mortgage(s) delivered by such Holder(s) contain(s) provisions
permitting City’s right to cure in accordance with Section 5.13.5 hereof:
Each such Holder shall (insofar as the rights of City are concerned) have the right
at its option, within ninety (90) days after the expiration of any and all cure periods available to
Developer, to cure or remedy such default and to add the cost thereof to the security interest debt
and to the lien on its security interest or the obligations of Developer under any sale lease-back
or of the grantor under any other conveyance for financing. If such default shall be a default
which can only be remedied or cured by such Holder upon obtaining possession of the Site and
such Holder seeks to obtain possession with diligence through a receiver or otherwise, such
Holder shall have until ninety (90) days after obtaining possession to cure such default.
Notwithstanding anything to the contrary contained herein, in the case of a default which cannot
with diligence be remedied or cured, or the remedy or cure of which cannot be commenced,
within ninety (90) days, such Holder shall have such additional time as reasonably necessary to
10677-00132933044v7.doc - 27 -DRAFT 07/13/07
remedy or cure such default with diligence; provided, further, such Holder shall not be required
to remedy or cure any non-curable default of Developer.
Nothing contained in this Agreement shall be deemed to permit or authorize such
Holder to undertake the coffstruction of the In~provements (beyond the extent necessary to
conserve or protect the Improvements or construction already made, including, without
limitation, the ability to continue the construction or completion of Ianprovements already begun)
without first having expressly assumed the obligations of Developer for the portion of the Site in
which the Holder has an interest, by written agreement reasonably satisfactory to City. The
Holder in that event shall only be liable or bound by Developer’s obligations hereunder for such
period as the Holder was in possession of the portion of the Site in wl~ch the Holder has an
interest and, notwithstanding anything to th~ contrary contained in this Agreement, shall only be
liable to the extent of its interest in the portion of the Site and the Improvements owned by it
thereon. The Holder in that event must agree to complete, in the manner provided in this
Agreement, the Improvements to which the lien or title of such Holder relates.
Breach of any of the covenants, conditions, restrictions, or reservations contained
in this Agreement shall not defeat or render invalid the lien of any Mortgage made in good faith
and for value as to the Site or any portion of the Site or interest therein, whether or not the
Mortgage is subordinated to this Agreement. Unless otherwise herein provided, the terms,
conditions, covenants, restrictions and reservations of this Agreement shall be binding and
effective against the Holder and any owner of the Site, or any portion of the Site, whose title
thereto is acquired by foreclosure, trustee’s sale, or otherwise.
No purporteii rule, regulation, modification, amendment and/or termination of this
Agreement affecting the rights of a Holder shall be binding upon any Holder holding a Mortgage
from and after the date of recordation of such Mortgage unless and unti! the written consent of
such Holder is obtained. This Section 5.13.3 shall not be applicable to HUD.
5.13.4 Failure of Holder to Comptete Improvements
If in any case, within ninety (90) days after all cure periods have expired after
default by Developer in completion of co’nstruction of the Improvements on the Site under this
Agreement, and the notice required by Section 8.1 was properly given, and a Holder has not
exercised the option afforded in Section 5.13.3 hereof to construct the Improvements, City may,
upon thirty (30) days’ written notice: (i) purchase the Mortgage by payment to the Holder of the
anaount of the unpaid debt plus accrued but unpaid interest and other advances and amounts
secured by the security interest, or in the case of a lessor or grantee by payment to such lessor or
grantee of the purchase price paid for its interest in the Site and the Improvements and any
unpaid rent and other charges and sums payable to it under its applicable agreements with its
lessee or grantor; (ii) assume such Mortgage in accordance with the terms of such Mortgage
upon the prior written consent of such Holder, and/or (iii) terminate this Agreement by notice to
Developer.
5.13.5 Right of Cit~v to Cure Mortgage Default
In the event of an uncured default or breach by Developer of a Mortgage for
financing for the Site or the Improvements prior to the Restriction Termination Date (unless
Developer is contesting such default in good faith), and the Holder has not exercised its option to
complete the Improvements, City may, pursuant to the terms of this Agreement, cure the default
no sooner than immediately prior to completion of any imminent foreclosure. In such event,
City shall be entitled to reimbursement of all direct and actual costs and expenses incurred by
City in curing the default which reimbursement shall be a nonrecourse obligation of Developer.
Such reimbursement amount may be secured at City’s option by a lien against the Site. Any
10677-0013\933044v7.doc - 28 -DRAFT 07/13/07
such lien shall be subordinate and subject to existing mortgages, deeds of trust or other security
instruments and grantees under other conveyances for financing permitted pursuant to this
Agreement.
ARTICLE 6 USES OF THE SITE
6.1 Uses
6.1.1 Developer shall develop on the Site either a mixed-use project or a
residential project as described more particularly in the Scope of Development, Attachment
No. 5, in which all of the residential units are occupied (or reserved for occupancy) by Very Low
Income Households in accordance with Section 6.2.1. Developer covenants and agrees for itself
and its successors and assigns, and every successor in interest to the Site, or any portion thereof,
that during construction and thereafter, Developer and such successors and assigns shall use the
Site exclusively for the purposes herein stated or as otherwise approved in writing by the City
and shall not devote the Site to any uses which are inconsistent with this Agreement and
applicable City land use entitlements.
6.1:2 Until the Restriction Termination Date, Developer shall not make or
permit to be made any substantial structural additions or modifications to the exterior of any of
the Improvements required to be constructed on the Site pursuant to this Agreement, or permit a
use other than as set forth herein, without the prior written consent of City.
6.2 Affordable Housin2
6.2.1 Developer shall operate the Development in accordance with the
Regnlatory Agreement and ensure that the dwelling units to be constructed on the Site shall be
rented exclusively to, or if vacant, available for occupancy by, Very Low Income Households
(the "Affordable Units"), at Affordable Rents and in accordance with the Regulatory Agreement.
In addition, at least thirty percent (30%) of the Affordable Units shall be occupied by extremely
low income households whose incomes do not exceed thirty percent (30%) of the Area Median
Income (the "Extremely Low Income Affordable Units"). Developer also shall grant a
preference in its selection of tenants to persons who live or work in Palo Alto, to the fullest
extent permitted by law.
6.2.2 The Extremely Low Income Affordable Units are not specifically
assigned; they may change as units become vacant and others are occupied. Once a household
has been determined to be eliNble for an Affordable Unit, it may remain in occupancy thereof so
long as its household income does not exceed one hundred forty percent (140%) of the current
maximum allowable income for the applicable income category.
6.2.3 Developer shall submit an annual, report (the "Annual Report") to City,
which contains (i) for each Affordable Unit, the rental rate and the income and household size of
the occupants of the Affordable Units, and (ii) information demonstrating the Developer’s
implementation of a preference in tenant selection for persons who reside or work in Palo Alto to
the fullest extent permitted by law. The income information shall be supplied by the tenant in a
certified statement on a form provided by City or on forms required for annual tenant
certification by I-II2D or TCAC as applicable. Developer shall submit the Annual Report on or
before the first April 30 that is at least twelve (12) months after the date of the certificate of
occupancy, and each April 30 thereafter, for the period ending on December 31 of the previous
year.
10677-0013k933044v7.doc - 29 -DRAFT 07/13/07
6.2.4 The restrictions imposed by this section mad by the Regulatory Agreement
shall continue for a period of fifty-five (55) years from the date on which the Deve!opment is
issued its Form 8609 by the California Tax Credit Allocation Advisory Committee ("TCAC")
(the "Restriction Termination Date"). For the purposes of the commercial condominium created
for the ground floor commei’cial!retail space, the Restriction Termination Date shall be the date
upon which the subdivision of the ground floor condominiums is completed and recorded in
accordance with state law.
6.3 Management Plan
6.3.1 Not later than the time specified therefor in the Schedule of Performance,
Developer shall submit to the City Manager a Management Plan for the Development in a form
reasonable acceptable to the City Manager. As part of the Management Plan, Developer shall
submit the qualifications of the designated management agent, Eden Housing Management, Inc.
6.3.2 If at any time during the term of the Regulatory Agreement the City
Manager reasonably determines that the Development is not being managed or maintained in a
manner consistent with well-managed affordable housing developments, City may send written
notice thereof to Developer, describing the manner in which management of the Development is
not being satisfactorily maintained. If Developer fails to cure the failure within the cure periods
set forth in Section 8.1, City may require Developer to change management practices or to
terminate the management contract and retain a different management agent approved by City.
The management contract shall include a provision that it shall be subject to termination by
Developer without penalty,_upon not less than sixty (60) days prior "~’~tten notice, if City shall
request Developer (i) to exercise such right of termination, and (ii) to make immediate
arrangements satisfactory to City for continuing management of the Development. Developer
may change the management agent at any time, with the prior v~Mtten approval of the City
Manager. Such approval or denial shall be provided within ten (10) business days of receipt of
Developer’s written request and shall be based on the proposed management agent’s experience
and qualifications in managing rental housing affordable to Very Low Income Households, as
well as market rate housing.
6.4 Maintenance of the Site
Developer covenants and agrees for itself and its successors and assigns, and
every successor in interest to the Site, or any portion thereof, that from and after Developer’s
acquisition of title, Developer and its successors and assigns: (a) shall maintain the
Improvements on the Site and shall keep the Site free from any accumulation of debris or waste
materials prior to and after construction; and (b) shall maintain the Site and the Improvements
thereon in the same aesthetic and sound condition (or better) as to the condition of the Site at the
time City issues a certificate of occupancy, reasonable wear and tear excepted.
The parties acknowledge that over the period of time during which these
covenants will be effective, various Improvements are likely to become obsolete and will need to
be rehabilitated or replaced, and agree that the standard of "reasonable" wear and tear includes
and incorporates this understanding. Subject to the foregoing, this standard for the quality of
maintenance shall be met whether or not a specific item of maintenance is listed below.
Representative items of maintenance shall include, but not be limited to, frequent and regular
inspection for graffiti or damage or deterioration or failure, and repainting or repair or
replacement of all surfaces, fencing, walls, equipment, etc., as necessary; emptying of trash
receptacles and removal of litter; sweeping of public sidewalks adjacent to the Site, on-site walks
and paved areas and washing-down as necessary to maintain clean surfaces; maintenance of all
landscaping in a healthy and attractive condition, including trimming, fertilizing and replacing
vegetation as necessary; cleaning windows on a regular basis; painting the Improvements on a
10677-0013\933044v7.doc - 30 -DRAFT 07/13/07
regular program and prior to the deterioration of the painted surfaces; and maintaining security
devices in good working order.
In the event Developer, its successors or assigns fail to maintain the Site or the
Improvements thereon in ac-cordance with these standards for the quality of maintenance, City or
its designee shall have the right but not the obligation to enter the Site upon reasonable notice to
the then record owner of the Sit%correct any violation, and hold the then record owner of the
Site responsible for the cost thereof. Such cost, until paid, shall constitute a lien on the Site.
Developer and each successor and assign shall be liable for maintenance of the Site pursuant to
this Section only for the respective period of time during which such entity holds an ownership
interest in the Site.
6.5 Limitation on Alterations
Except for Permitted Alterations (as hereinafter defined), Developer shall not
make or suffer to be made any alterations, additions, or improvements to or on the Site or any
building or structure thereon or any part thereof without the prior written consent of City, which
consent will not be unreasonably withheld, conditioned or delayed. Any request for consent
shall be accompanied by plans and specifications for the proposed work in reasonable detail
(including component materials and finish items) to enable City to consider whether or not to
grant approval. City may condition its approval in any way reasonably deemed necessary by
City to protect its interest in the Site. The term "Permitted Alterations" shall mean and
Developer shal! not be required to obtain the consent of City for, unless otherwise required by
the Municipal Code, the following, to the extent they comply with all applicable City procedures
and requirements: (i) any alterations, additions, improvements, exterior painting or landscaping
(which alterations, additions, improvements, exterior painting or landscaping undertaken during
a twelve (12) month period cost less than twenty percent (20%) of the value of the Site after
issuance of the certificate of occupancy); and (ii) any tenant improvements within the residential
units.
All alterations, additions, or improvements by Developer shall be made without
cost or expense to City, by responsible and licensed contractors. All improvements and
equipment sha!l be designed, built, and installed in accordance with all applicable building codes
and regulations, and Developer shall obtain all necessary building permits.
Notwithstanding any provision of this Section, prior to the Restriction
Tenr~ination Date, construction or rehabilitation of the Improvements shall be governed by the
applicable provisions of this Agreement.
6.6 Obligation to Refrain from Discrinaination; Form of Non-discrimination Clauses
6.6.1 Developer covenants by and for itself and any successors in interest that
there shall be no discrimination against, or segregation of, any persons, or group of persons, on
account of race, color, creed, marital status, religion, national origin or ancestry, disability, sex
and/or sexual orientation, political affiliation or opinion, or pregnancy or pregnancy-related
condition, in the enjoyment of the Site or any portion or component thereof, nor shall Developer
itself, or any person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, !ocation, number, use
or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing
covenants shall run with the land.
6.6.2 Developer shall refrain from restricting the rental, sale, or lease of the Site
or any portion or component thereof on the basis of race, color, creed, marital status, religion,
national origin or ancestry, disability, sex and/or sexual orientation, political affiliation or
10677-0013\933044v7.doc - 31 -DRAFT 07/13/07
opinion, or pregnancy or pregnancy-related condition of any person. All such deeds, leases or
contracts shall contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
(a) - In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through them, that there shall be no discNr~ination against or segregation of any person or group
of persons on account of race, color, creed, religion, marital status, ancestry or national origin,
disability, sex and/or sexual orientation, political affiliation or opinion, or pregnancy or
pregnancy-related condition, in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land herein conveyed, nor shall the grantee, or any persons claiming under or
through him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants
shall run with the land."
(b) In leases: "The lessee herein covenants by mad for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions:
"That there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, disability, marital status, ancestry or
national origin, sex and!or sexual orientation, political affiliation or opinion, or pregnancy or
pre~o-nancy-related condition, in the leasing, subleasing, transfen~ng, use, occupancy, tenure or
enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or
through him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtessees, subtenants or vendees in the land herein leased."
(c) ha contracts: "There shall be no discrimination against or
segregation of any persons or group of persons on account of race, color, creed, religion,
disability, marital status, ancestry or national origin, sex and/or sexual orientation, political
affiliation or opinion, or pre~onancy or pregnancy-related condition, in the sale, lease, transfer,
use, occupancy, tenure or enjoyment of land, nor shall the transferee, or any person claiming
under or through him or her, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of premises."
6.6.3 The provisions of Sections 6.6.1 and 6.6.2 above shall not be interpreted to
prohibit the Developer from designating units for occupancyby persons with disabilities in
accordance with applicable law.
6.7 Effect and Duration of Covenants
The covenants established in Section 6.6 of this Agreement and in the Regulatory
Agreement shall, without regard to technical classification and designation, be binding on
Developer and any successor in interest to the Site or any part thereof, for the benefit of and in
favor of City, its successors and assigns, without regard to whether City has been, remains or is
an owner of any land or interest therein in the Site. City is deemed the beneficiary of the terms
and provisions of these covenants running with the land, both for and in its own right and for the
purposes of protecting the interests of the community, as well as the interests of other parties,
public or private, in whose favor and for whose benefit this Agreement and the covenants
running with the land have been provided.
10677-0013~933044v7.doc - 32 -DRAFT 07/13/07
ARTICLE 7 CITY FINANCIAL ASSISTANCE
7.1 Method of Financin~ Development
City and De~loper anticipate that the Development will be financed through a
combination of sources described more particularly in the Sources and Uses Budget attached
hereto as Attachment No. 6.
7.2 City Loan
7.2.1 In accordance with and subject to the terms and conditions of this
Agreement, the City agrees to lend to Developer, and Developer agrees to borrow from the City,
loan funds in an amount not to exceed the sum of Three Million Five Hundred Thousand Dollars
($3,500,000; the "City Loan"), $500,000 of which (the "City Advance") has previously been
disbursed in accordance with the Initial Project Agreement. In accordance with and subject to
the terms and conditions of this Agreement, the proceeds of the City Loan shall be disbursed at
Close of Escrow. The City Loan shall be used only for the acquisition of the Ole’s Parcel, and
for no other purposes whatsoever. The City Loan shall be evidenced by the City Note and City
Deed of Trust, in accordance with the following:
7.2.2 The outstanding balance of the City Loan shall accrue interest at the rate
of three percent (3%) per annum, simple interest, on the amount disbursed from the date of
disbursement as described more particularly in the City Note in the form attached hereto as
Attachment No.8. _
be deferred.
7.2.3 Subject to Section 7.5.2 below, all payments of principal and interest shall
7.2.4 Subject to the provisions of Section 7.2.5 hereof, the principal of and all
interest accruing on the City Loan shall be payable on the Restriction Termination Date.
7.2.5 Notwithstanding anything to the contrary contained herein, if no Default
hereunder shall have occurred and then be continuing, the City Loan shall be forgiven in its
entirety on the Restriction Termination Date if: (i) Developer has complied with its obligations to
construct the Development hereunder; and (ii) the Site shall have been operated continuously as
workforce housing in accordance with the Regulatory Agreement.
7.2.6 Developer’s performance under the City Note shall be secured by the City
Deed of Trust in the form of Attachment No. 9 recorded against the Site.
7.2.7 The City and the Developer intend that the relationship between them
shall be solely that of creditor and debtor. Nothing contained in this Agreement or in any other
document or instrument made in connection with this Agreement shall be deemed or construed to
create a partnership, tenancy in common, joint tenancy, joint venture or co-ownership by or
between the City and the Developer. The City shall not be in any way responsible or liable for
the debts, losses, obligations or duties of the Developer with respect to the Site or otherwise.
7.2.8 If the Closing does not occur and Developer does not acquire the City
Parcel for any reason, the City Advance shall be refunded to City within ten (10) business days
of written notice to the Escrow Agent that the Closing will not occur.
7.2.9 Nothing in this Section 7.2 shall be deemed to preclude the City from
granting or lending Developer funds in addition to the City Loan; provided however, that the
10677-0013\933044v7.doc - 33 -DRAFT 07/13/07
City shall have no obligation to do so and shall consider any request for additional funds in its
sole and absolute discretion.
7.3 Disbursement of City Loan
City shall not be obligated to disburse the City Loan proceeds unless all of the
City Conditions Precedent set forth in Section 4.2.1 are satisfied at the time of disbursement.
The City Manager shall have the authority to waive any condition of disbursement set forth
herein; however, any waiver must be made in writing. The decision to waive any condition of
disbursement shall be in the sole discretion of the City Manager, and the decision to waive any
requirement may be conditioned upon its satisfaction at a later date and/or upon the substitution
of another condition. The disbursement of any portion of the City Loan prior to fulfilhnent of
one or more of the foregoing conditions shall not be construed as a waiver of such conditions,
and City reserves the right to require their fulfillment prior to making any subsequent
disbursements. The City Loan shall be disbursed on or before the Closing Date directly into the
escrow under the Ole’s Parcel Purchase Agreement.
7.4 Repa’~nnent of City Loan
7.4.1 The City Loan shall be due and payable immediately if the Site, or any
portion thereof or interest therein, is sold, transferred, assigned or refinanced without the prior
written consent of the City, subject to Section 2.6.3 above.
7.4.2 In the event of any default by Developer hereunder or under the
Regulatory Agreement, all principal and interest on the City Loan shall be due and payable upon
the expiration of any applicable cure period under Article 8 below.
7.5 Preliminary Notices: Stop Notices.
7.5.1 Developer agrees that copies of all preliminary notices delivered pursuant
to Section 3097 of the California Civil Code (a) to Developer or (b) to the Site, addressed to
Developer, City of Palo Alto, "Lender," or "Construction Lender," shall be promptly delivered to
City. Deve!oper further agrees that City shall have the right at all times to enter upon the Site
and post such notices and other written or printed material thereon as it may deem necessary or
desirable for its protection.
7.5.2 In the event of the filing with City of a bonded stop notice or the recording
of a mechanic’s lien pursuant to Title t 5, Part 4, Division 3 of the Civil Code of the State of
California relating to works of improvement upon real property, City may summarily refuse to
honor any orders for payment pursuant to this Agreement until such notice or lien is released (by
bond or other~vise), or a payment bond recorded, and in the event Developer fails to furnish City
with a bond causing such notice or lien to be released, within forty-five (45) calendar days of
Developer’s or City’s receipt of same, such failure shall, at the option of City, constitute a
default.
ARTICLE 8 EVENTS OF DEFAULT AND RIGHTS OF TER3IINATION AND OTHER
REMEDIES
8.1 Defaults - General
8.1.1 Subject to any extensions of time pursuant to Section 9.3, failure or delay
by either Party to perform any term or provision of this Agreement constitutes a default under
this Agreement. The Party who so fails or delays must immediately commence to cure, correct,
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or remedy such failure or delay and shall complete such cure, correction or remedy with
reasonable diligence and during any cure period shall not be in default under this Agreement.
8.1.2 The non-defaulting Party shall give written notice of default to the Party
alleged to be in default, specifying the default complained of by the non-defaulting Party. Delay
in giving such notice shall not constitute a waiver of any default.
8.1.3 Neither Party may exercise any rights or remedies upon a default by the
other Party, unless and until such default continues for a period of thirty (30) days after written
notice thereof from the non-defaulting Party unless otherwise provided. If the nature of the
default is such that more than thirty (30) days are reasonably required for its cure, then the
defaulting Party shall not be deemed to be in default if it has commenced a cure within the thirty
(30) day period and thereafter diligently prosecutes such cure to completion.
8.1.4 Any failures or delays by any Party in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies, or deprive any Party of its right to institute and maintain any actions or proceedings
that it may deem necessary to protect, assert or enforce any such rights or remedies.
8.2 Rights and Remedies are Cumulative
Except as othepadse expressly stated in this Agreement, the tights and remedies of
the Parties are cumulative, and the exercise by any Party of one or more of such rights or
remedies shall not preclude_the exercise by it, at the same or different times, of any other rights
or remedies for the same default or any other default by any other Party. Upon the occurrence of
a default, except as to rights and remedies expressly declared to be exclusive in this Agreement,
the injured Party shall have all rights and remedies against the defaulting Party as maybe
available at Law or in equity to cure, correct or remedy any event of default, to obtain specific
performance, to recover damages, or to obtain any other remedy consistent with the purpose of
this Agreement.
8.3 Ri~t of Termination by City Prior to Conveyance
8.3.1 Prior to the Close of Escrow, City, at its option, may terminate this
Agreement provided that (i) any of the events described in (a), (b), or (c) below occurs, (ii) any
pertinent cure period applicable thereto has expired and such default remains uncured, and (iii)
City delivers a written termination notice to Developer that this Agreement is terminated
pursuant to this Section 8.3.
(a) Developer assigns or attempts to assign this Agreement or any
rights therein relating to the Site except as authorized in this Agreement;
(b) Developer fails to perform a material obligation hereunder, which
failure constitutes an event of default under this Agreement; or
(c) Any condition precedent to City’s obligation to convey the City
Parcel to Developer has not been satisfied in accordance with the deadlines set forth in this
Agreement.
8.3.2 (a) Upon such termination by City in accordance with this Section,
any remaining rights of Developer regarding the City Parcel or arising from this Agreement shall
be deemed terminated. Upon such termination, except for the obligations in Section 5.10, neither
Developer nor City sha!l have any further rights against or liability to the other under this
Agreement regarding the City Parcel or any portion thereof.
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(b) Upon such termination of this Agreement by City, Developer shall,
to the extent allowed by any third-party contracts, assign to City all of Developer’s ri~ts to all
design concept and engineering drawings for the Improvements.
(c) In the event of termination pursuant to this Section 8.3, Developer
shall pay all attendant escrow cancellation costs.
(d)
City within ten (1 O) days.
Upon such temfination, the City Advance shall be returned to the
8.4 Right of Termination by Developer Prior to Conveyance
8.4.1 Prior to the Close of Escrow, Developer, at its option, may terminate this
Agreement provided that (1) any of the events described in (a) or (b) below occurs, (2) any
pertinent cure period applicable thereto has expired and such default remains uncured and (3)
Developer delivers a written termination notice to City:
(a) City fails to perform a material obligation hereunder, which failure
constitutes an event of default under this Agreement; or
(b) Any condition precedent to Developer’s obligation to accept title
to the Site has not been satisfied as and at the times provided in this Agreement.
8.4.2 Upon such termination, except for the obligations in Section 5.10, neither
City nor Developer shall have any further rights against or liability to the other related to or
arising under this Agreement and any remaining rights of City arising from this Agreement shall
be deemed terminated.
8.4.3 In the event of termination pursuant to tt~s Section 8.4, City shall pay all
escrow cancellation costs for the Escrow. In addition, upon such termination, the City Advance
shall be returned by the Developer to the City within ten (10) days and all monies or documents
deposited by any Party into the unclosed Escrow shall be returned to the Party making such
deposit.
8.5 Remedies and Rights of Termination bv City after Conveyance
8.5.1 After the Close of Escrow, but prior to the issuance of a certificate of
.occupancy, City, at its option, may terminate this Agreement if, (1) any of the events described
in (a) or (b) below occurs, (2) any pertinent cure period applicable thereto has expired and such
default remains uncured, and (3) City delivers a written termination notice to Developer that this
Agreement is terminated pursuant to this Section 8:5.
(a) Developer assigns or attempts to assign this Agreement or any
rights therein r£’lating to the Site except as authorized in this Agreement; or
(b) Developer fails to perform a material obligation hereunder, which
failure constitutes an event of default under this Agreement.
8.5.2 Upon such ten’nination by City in accordance with this Section, any
remaining rights of Developer regarding the Site or arising from this Agreement shall be deemed
terminated. Upon such termination, neither Developer nor City shall have any further rights
against or liability to the other under this Agreement regarding the Site or any portion thereof,
except as provided in Section 5.10 and this Section 8.5. Upon such termination, the outstanding
balance of the City Loan, principal and interest, shall be due and payable.
10677-0013\933044v7.doc - 36 -DRAFT 07/13/07
8.5.3 Upon such.termination of this Agreement by City, Developer shall, to the
extent allowed by any third-party contracts, assign to City all of Developer’s rights to all design
concept and engineering drawings for the Improvements.
8.5.4 Upoffguch termination or upon a default under the Regulatory Agreement
after the issuance of a certificate of occupancy, in addition to the other rights of City under this
Section 8.5, City shall also have the option, subject to the rights of Holders set forth in Section
5.13, to purchase the Site (the "Option"); provided that, City must exercise the Option by written
notice to Developer prior to the date, if any, on which the default is cured. The rights of City to
repurchase pursuant to this Section 8.5.4 shall be set forth in the Grant Deed for City Parcel and
in the Memorandum of Option in the form attached hereto as Attachment No. 11, which shall
encumber the entire Site; provided, however that the commercial condominiums for the ground
floor commercial/retail space shall be released from the encumbrance of the Option when those
condominiums are created in accordance with the Subdivision Map Act.
(a) The Option shall be exercised, if at all, by City’s delivery of
v~-itten notice of its election to exercise the Option to Developer within one year after expiration
of the last of the cure periods granted to Developer and/or the Holders, and the Developer shall
execute, acknowledge and deliver a grant deed for the Site to the City within fifteen (15)
business days after the City’s election, subject only to the title exceptions described in Section
8.5.4(c) below;
(b) The purchase price for the Site under the Option (the "Option
Purchase Price") shall be the balance then due under the City Loan.
(c) ~ City shall credit the Option Purchase Price to Developer through
escrow. Developer shall convey title subject only to exceptions that (i) existed at the time of
Developer’s acquisition of the Site, or (ii) were created with the written consent of City or
approved in v~q’iting by City or expressly contemplated or permitted by this Agreement, including
but not limited to the deed of trust or other lien securing construction or permanent financing.
(d) Upon the City’s election to exercise the Option, the City and the
Developer shall promptly open an escrow with Escrow Agent and shall execute and deliver all
documents necessary or appropriate to complete the purchase and sale transaction in accordance
with this Section 8.5.4 (including, without limitation, escrow instructions, a settlement statement,
a FIRPTA affidavit, and a California Form 593). Developer shall pay all escrow costs and the
costs of an ALTA owner’s title insurance policy in favor of City, which is consistent with clause
(c) above.
performance.
(e)City shall have the right to enforce this Section 8.5.4 by specific
8.6 Institution of Legal Actions
In addition to any other rights or remedies, either Party may institute legal action
to cure, correct, or remedy any default, to recover damages for any default, or to obtain specific
performance or any other remedy consistent with the purpose of this Agreement, except that
there shall be no right to terminate this Agreement except as set forth in Sections 8.3, 8.4, and
8.5 of this Agreement. Such legal actions must be instituted in the Superior Court of the County
of Santa Clara, State of California, in any other appropriate court in that County, or in the United
States District Court for the Northern District of California.
10677-0013~933044v7.doc - 37 -DRAFT 07/13/07
8.7 Applicable Law and Attorneys’ Fees
The Laws of the State of California shall govern the interpretation and
enforcement of this ANeern_~nt. Should legal action be brought by either Party for breach of this
A~eement to enforce any provision, the prevailing Party in such action shall be entitled to its
reasonable attorneys’ fees, court costs, and other litigation expenses including, without
limitation, expenses incurred for preparation and discovery, and on appeal. The right to recover
such fees, costs and expenses shall accrue upon the commencement of the action regardless of
whether the action is prosecuted to final judgment.
8.8 Acceptance of Service of Process
In the event that any legal action is commenced against City, service of process
on City shall be made by personal service upon the City Manager or in such other manner as is
authorized by Law.
In the event that any legal action is commenced by City against Developer,
service of process on such Party shall be made by personal service upon an officer of Developer,
or in such other maturer as may be provided by Law, and shall be valid whether made within or
without the State of California.
ARTICLE 9 GENERAL PROVISIONS.
9.1 Notices. Demands and Communications Between the Parties
All notices or other communications required or permitted hereunder shall be in
writing, and shall be personally delivered or sent by registered or certified mail, postage
pre-paid, return receipt requested, or by a nationally recognized courier service that provides a
written receipt of delivery, or facsimile, to the addresses set forth in this Section, with a copy to
designated legal counsel. The notices or other communications shall be deemed received and
effective upon: (i) if personalty delivered, the date of delivery to the address of the person to
receive such notice; (ii) if mailed, the date of delivery or refusal to accept delivery indicated in
the certified or registered mail receipt; or (iii) if given by courier service, the date of delivery
evidenced by the receipt for delivery provided by the courier service; or (iv) if faxed, the date of
dispatch. Any notice, request, demand, direction or other communication sent by facsimile must
be confirmed within forty-eight (48) hours by letter mailed or delivered in accordance with the
foregoing.
For City:City of Palo Alto
P.O. Box 10250
Palo Alto, California 94303
Attention: City Manager
Tel: (650) 329-2533
Fax: (650) 325-5025
with a copy to:Office of City Attorney
City of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
Atm: Donald Larkin
Tel: (650) 329-2171
Fax: (650) 329-2646
10677-0013k933044v7.doc - 38 -DRAFT 07/13/07
with a copy to:Department of Plalming
and Development
City of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
Attn: Director of Planning
and Development
Tel: (650) 329-2354
Fax: (650) 329-2154
For Developer:Eden Housing, Inc.
409 Jackson Stl
Hayward, CA 94544
Attn: Linda Mandolini
Tel: (510) 582-1460
Fax: (510) 582-6523
With a copy to:
Conm~unity Housing Alliance, Inc.
948 Ramona Street
Palo Alto, CA 94301
Attn: Donald A. Barr
Tel: (650) 906-6943
Fax: (650) 725 5451
Jorgenson, Siegel,
McClure & Flegel, LLP
1100 Alma St., Ste. 210
Menlo Park, CA 94025-3392
Attn: Sandy Sloan
Tel: (650) 324-9300
Fax: (650) 324-0227
For Escrow Agent:First American Title Insurance Company
1737 North First Street, Suite 100
San Jose, CA 95112
Attention: Ms. Gail A. Deaver
Tel: (408) 451-7800
Fax: (408) 451-7836
Such written notices, demands, correspondence and communications may be sent
in the same manner to such other persons and addresses as either Party may from time to time
desi~ate in writing as provided in this Section. Notice shall be effective upon the date of
personal delivery or, in the case of mailing, on the date of delivery or attempted delivery as
shown on the U.S. Postal Service certified mail return receipt.
9.2 Nonliabilitv and City Officials and Employees
No member, official or emptoyee of City shall be personally liable to Developer,
or any successor in interest, in the event of any default or breach by City or for any amount that
may become due to Developer or its successors, or on any obligations under the terms of this
Ageement.
10677-0013~933044v7.doc - 39 -DRAFT 07/13/07
9.3 Enforced Delay; Extension of Times of Performance
Ia~ addition to specific provisions of this Agreement, performance by any Party
hereunder shall not be deemed to be in default, where delays or defaults are due to acts of God,
or the elements, accident, cdsualty, unavailability or delays in delivery of any product, labor,
fuel, service or materials, failure or break-down of equipment, strikes, lockouts, or other labor
disturbances, acts of the public enemy, orders or inaction of any kind from the govenm~ent of the
United States, the State of California, or any other governmental, military or civil authority
(other than City, to the extent that such orders or inaction affect City’s obligations, perforn~ance
or rights under this Agreement), war, acts of terrorism, insurrections, riots, epidemics, quarantine
restrictions, floods, fires, earthquakes, civil disturbances, explosions, freight embargoes, lack of
transportation, breakage or accidents to vehicles, litigation, including litigation challenging the
validity of this transaction or any part thereof, or any other inability of any Party, whether similar
or dissimilar to those enumerated or othe~vise, which are not within the control of the Party
claiming such inability or disability, which such Party could not have avoided by exercising due
diligence and care and regarding which such Party shall use all reasonable efforts that are
practically available to it in order to correct such condition.
However, Developer shall not be entitled to any extension of time pursuant to this
Section due to any event or condition caused by Developer’s inherent financial condition or
financial inability to pay its monetary obligations when due (as distinguished from Developer’s
inability to make a payment by reason of a bank’s failure or some other external cause not
associated with Developer’s financial condition).
Notwithstanding anything to the contrary in this Agreement, an extension of time
for any such cause shall be for the period of time reasonable in light of the enforced delay. The
extension of time shall commence to run from the time of the commencement of the cause, so
long as the Party claiming the extension has notified the other Party in writing of the nature of
the matter constituting the enforced delay within fifteen (15) days after the occurrence of the
enforced delay.
9.4 Plans and Data
If this Agreement is terminated for any reason other than City’s default,
Developer shall deliver to City copies of any and all plans and data concerning the Site which are
in the possession of Developer, and shall assign to City al! rights held by Developer to use such
plans and data. In doing so, Developer shall not be considered to be making any representation
regarding the content of such plans and data or expressly or impliedly warranting the accuracy
thereof.
9.5 No Real Estate Commission
If any claim for brokers’ or finders’ fees for the consummation of this Ageement
arises, then Developer hereby agrees to indemnify, hold harmless and defend City from and
against such claim(s) if it (they) shall be based upon any statement or representation or
agreement made by Developer.
9.6 Successors and Assi~ons
This Agreement shall bind and inure to the benefit of the Parties to this
Agreement and their respective successors and assigns, provided, however, that this provision
shall not authorize the assigTtrnent or transfer of any interest that is prohibited specifically by the
other terms of this Agreement.
10677-0013\933044v7.doc - 40 -DRAFT 07/13/07
9.7 Relationship of the Parties
The terms and provisions of this Agreement shall not cause the Parties hereto to
be construed in any manner whatsoever as partners, joint venturers or agents of each other in the
performance of their respective duties and obligations under this Agreement, or subject either
Party to this Agreement to any obligations, loss, charge or expense of the Other Party unless the
Party to be held responsible has independently contracted with the claimant so as to make it
directly responsible for the performance and/or payment, as appropriate, of the pertinent
obligation, loss, charge or expense.
9.8 Text to Control: Interpretation
9.8.1 The headings in this Agreement are included solely for convenience, and
if there shall be any conflict between such headings and the text of this Agreement, the text shall
control.
9.8.2 Should any provisions of this Agreement require interpretation, it is
agreed that the person or persons interpreting or construing the same shall not apply a
presumption that the terms of this Agreement shall be more strictly construed against one Party
by reason of the rule of construction that a document is to be construed more strictly against the
Party thereto who itself or tl~rough its agent or counsel prepared the same or caused the same to
be prepared; it being agreed that the agents and counsel of both of the Parties hereto have
participated equally in the negotiation and preparation of this Agreement.
9.9 Severabilitv
To the best knowledge and belief of the Parties to this Agreement, this Agreement
contains no provision that is contrary to any federal, state or local Law or to any regulatory
requirement or other ruling or regulation of a federal, state or local agency or that would be in
breach of the obligations of either or both of the Parties hereto under the terms and provision of
any legally binding agreement. However, if any provision of this Agreement, or any part
thereof, shall at any time be held to be invalid, in whole or in part, under any applicable federal,
state or local Law by a court of competent jurisdiction, or by arbitrators or an administrative
agency of the federal, state or local government with proper jurisdiction, then such provision or a
portion thereof, as appropriate, shall be curtailed and limited only to the extent necessary to bring
it within the requirements of the Law and the validity and enforceability of the remaining
provisions of this Agreement shall remain in effect and shall in no way be affected, impaired or
invalidated, unless the invalidated provision(s) shall uniquely, materially and adversely affect the
rights and obligations of a Party to this Agreement.
9.10 Approvals
Approvals required of City or Developer shall not be unreasonably withheld,
conditioned or delayed, and approval or disapproval shall be given within the time set forth in
the Schedule of Performance or this Agreement, or, if no time is given, within a reasonable time.
9.11 Time of the Essence
Time is of the essence of this Agreement.
9.12 Computation of Time
Unless otherwise required by a specific provision of this Agreement, time
hereunder is to be computed by excluding the first day and including the last day. If the date for
10677-0013k933044v7.doc - 41 -DRAFT 07/13/07
performance falls on a Saturday, Sunday, or California or City legal holiday, the date for
performance shall be extended to the next business day.
9.13 Calendar Days
All references in this Agreement to a number of days in which either Party shall
have to consent, approve or perform shall mean calendar days unless specifically stated to be
business days.
9.14 Police Power
Nothing contained herein shall be deemed to limit, restrict, amend or modify, nor
to constitute a waiver or release of, any Laws of City, its departments, commissions, agencies,
and boards and the officers thereof and City, including, without limitation, any redevelopment or
general plan or may ZOlxing ordinances, or any of City’s duties, obligations, rights or remedies
thereunder or pursuant thereto or the general police powers, rights, privileges and discretion of
City in the furtherance of the public health, welfare, and safety of the inhabitants of the City of
Palo Alto, including, without limitation, the right under law to make and implement independent
judDnents, decisions, and acts regarding plarming, development, and redevelopment matters
(including, without limitation, approval or disapproval .of plans and issuance or wittxholding of
building permits) whether or not consistent with the provisions of this Ageement, or any other
documents contemplated hereby (collectively, "City Rules and Powers"). In the event of any
conflict, inconsistency or contradiction between any terms, conditions, or provisions of this
Agreement or such other documents, on the one hand, and any such City Rules and Powers, on
the other hand, the latter shall prevail and govern in each case. This Section shall be interpreted
for the benefit of City.
9.15 Estoppel Certificates
Any Party hereunder may, from time to time, request the other Party to execute
and acka~owledge an estoppel certificate or agreement verifying that this Agreement, including
any Attaclnnents hereto, is in full force and effect and that no default or defaults have occurred
and are continuing as of the date of such certificate or agreement (nor any event which, with the
passage of time and the giving of notice would result in a default or breach under this
Agreement), or stating the nature of the default or breach or event, if any. In the event the
estoppel certificate discloses such a default, breach or event, it shall also state the maimer in
which such default, breach and/or event may be cured. The Party requesting such certificate or
agreement shall provide the form thereof and, provided such certificate or agreement is in form
and substance commercially reasonable, the requested Party shall execute and return the same
within fifteen (15) business days after receipt of the final form.thereof, and the requesting Party
(and, in the case of Developer, its lenders and successors-in-interest as permitted under this
Agreement) shall be entitled to rely thereon.
9.16 Further Assurances
Each of the Parties hereto shall execute and deliver any and all additional papers,
documents, instruments and other assurances and shall to do any and all other acts and things
reasonably necessary to carry out the purposes of this Agreement and the intent of the Parties
hereto.
10677,0013\933044v7.dQc - 42 -DRAFT 07/13/07
9.17 No Mer,~er
No provision of this Agreement shall merge with any transfer of any portion of
the Site, until such time as a_ certificate of occupancy is recorded for all of the Improvements to
be constructed on the Site pursuant to this Agreement.
9.18 Waivers and Amendments
All modifications, additions or amendments to this Agreement shall be in writing
and sig-ned by the Parties hereto. Developer and City agree to mutually consider reasonable
requests for amendments to this Agreement that may be made by lending parties or institutions,
provided the requests are consistent with this Agreement and would not substantially alter the
basic business terms included herein.
9.19 Reasonable Reimbursement
Where either Party is entitled to incur costs and expenses under this Agreement
that the other Party is required to pay or reimburse, such costs and expenses shall in all events be
reasonable in light of the fact and circumstances. For purposes of this Section 9.19, any costs or
expenses approved by both Parties, or included in a budget that is approved by both Parties, are
hereby deemed to be reasonable.
9.20 Entire A~eement
This Agreement integrates all of the terms and conditions mentioned herein or
incidental hereto and supersedes all negotiations or previous agreements between the Parties
regarding al! or any part of the subject matter hereof, including but not limited to the Original
Agreement. As of the date of this Agreement, the Initial Agreement is of no further force or
effect.
This Agreement is executed in three (3) duplicate originals, each of which is
deemed to be an original. This Agreement includes 44 pages of text and thirteen (13)
Attactnnents, each of which is incorporated herein by reference, as follows:
Attachinent No. 1-A
Attachment No. 1-B
Attachment No. 2-A
Attachment No. 2-B
Attachment No. 3
Attachment No. 4
Attachment No. 5
Attachment No. 6
Attachment No. 7
Attaclm~ent No. 8
Attachment No. 9
Attachment No. 10
Attachment No. 11
City Parcel Legal Description
Ole’s Parcel Legal Description
Site Legal Description
Site Map
Schedule of Performance
Grant Deed
Scope of Development
Sources & Uses Budget
City Note
City Deed of Trust
Regulatory Agreement
Memorandum of Option
Memorandum of Agreement
9.21 Counterparts
This Agreement may be executed in counterparts, each of which shall constitute
an original and all of which together shall constitute one and the same agreement.
10677-0013k933044v7.doc - 43 -DRAFT 07/13/07
IN WITNESS WHEREOF, the parties have executed this Ageement as of the date first
written above.
ATTEST:CITY OF PALO ALTO, a chartered city
City Clerk Mayor
APPROVED AS TO FORM:
Assistant City Attorney
APPROVED:
"DEVELOPER"
COMMUNITY HOUSING ALLIANCE, INC.,
a California non-profit public benefit
corporation.
Title: "(-~--~. a- g t4 ~-¢ t--
FEIR#: .~t9 - q q lq’~...o Q
Assistant City Manager
By:
Nan~e:
Title:
FEIR#:
Director of Administrative Services
Director of Plalming and Community
Environment
Insurance Review
EDEN HOUSING, INC., a California non-
profit public benefit corporation.
Title: "~ "
FEIR#: ~ ~ ] 7/6 7 ~-~)
By:
Name:
Title:
FEIR#:
10677-0013Lo33044v7.doc - 44 -DRAFT 07/13/07
ATTACHMENT NO. 1-A
C~iTY PARCEL LEGAL DESCRIPTION
To be inserted at a later date
10677-00132933044v7.doc Attachment No. 1-A DRAFT 07/13/07
ATTACHMENT NO. 1-B
OLE’S PARCEL LEGAL DESCRIPTION
Real property in the City of Palo Alto, County of Santa Clara, State
of California, described as follows:
Commencing at the point of intersection of the Northeasterly line of
Alma Street with the Southeasterly line of Homer Avenue; running
thence Southeasterly and along said line of Alma Street one
hundred (100) feet; thence at a right.angle Northeasterly one
hundred five (1_05) feet to the Southwesterly line of an alley; thence
at a right angle Northwesterly and along said line of said alley one
hundred (100) feet to said line of Homer Avenue; and thence at a
right angle Southwesterly and along said line of Homer Avenue one
hundred five (105) feet to the point of commencement being a part
of Lot one (1) of Block eight (8) of said Palo Alto, as laid down on
map of the subdivision of said block of record in the office of the
County Recorder of said County of Santa Clara, in Book F3 of
Maps, at page 19.
APN: 120-28-001
10677-0013~933044v7.doc Attachment No. 1-B DRAFT 07/13/07
ATTACHMENT NO. 2-A
SITE LEGAL DESCRIPTION
To be inserted at a later date
10677-0013~933044v7.doc Attachment No. 2-A DRAFT 07/13/07
The City of
Palo Alto
Site Map for
801-809 and 827-841 Alma St.
(Ole ’s Car Repair and Alma Substation)
This map is a product of the
City of Pato Alto GIS
Attachment No. 2B
ATTACHMENT NO. 3
SCHEDULE OF PERFORS~CE
(All dates set forth below are preliminary and are subject to change as the planning and entitlement
process moves forward. Estimated Target Dates are conditioned upon prior Target Dates being met in a
timely manner.)
Abbreviations:
ADA -Acquisition and Development Agreement
ARB -Architectural Review Board (City)
CDLAC -California Debt Limit Allocation Committee (allocates tax-exempt bonds)
CEQA, NEPA - California Environmental Quality Act, National Environmental Policy Act
CHA-
DRC -PC-
TCAC-
Community Housing Alliance, Inc.
Development Review Committee (City)
Planned Community Zoning
California Tax Credit Allocation Committee (allocates tax credits)
1. City Council Study Session July 10, 2006
for Alma Affordable Farnily [Completed]
Housing
2. City Council Approval of
Tri-Party Agreement (City,
Eden & CHA) and Funding for
Purchase of Ole’s by CHA
3. City makes Initial Deposit
for Purchase of Ole’ s
4. City Council Approval of
ADA with Eden and CHA
(Developer)
5. Developer continues Project
Desig-n and conducts
neighborhood outreach
6. CHA repays $480,000 loan
to City
Sept. 18, 2006
[Completed]
Sept. 21, 2006
[Completed]
July 16, 2007
August - October 2007
Sept 18, 2007
(deadline)
City makes $980,000 deposit of
which $480,000 is unsecured loan
to CHA.
Page 1
7. Developer submits
Plans for Preliminary ARB -
review
8. Developer forms Owner
Entities (Corporate General
Partner and Limited
Parmership)
9. City begins preparation of
any CEQA & NEPA Clearance
Documents, as required
10. Developer submits PC
Zone Application to City
11. Developer to Submit List
of Possible General Contractors
for City Manager Review
12. City completes relocati.o.n,
removal of Substation function
from City Site
13. City completes City Site
remediation, if required
14. Fund Raising and
applications for City and other
Subsidies
15. Planning Commission
Initial Review of PC
Application
16. ARB Re~4ew of PC
Application
17. Planning Commission Final
Review of PC Application
18. Escrow to be Opened for
City Parcel
19. City makes Final Deposit
for Purchase of Ole’s and
Property is conveyed to CHA
October 2007
August 2007
- July 2008
October 2007
December 2007
December 2007
December 31, 2007
June 30,2008
January2008 -May 2009
March 2008
May2008
July-August 2008
July 15, 2008
August 1, 2008
City Manager to respond within 10
City makes $3,000,000 deposit
Page 2
20. City conveys City Property August 1, 2008
to Developer -
21. Developer applies for
Parcel Merger
22. Ole’s Property vacated by
Seller
23. City Council Final Review
and Approval of PC
Application and Entitlements
24. Parcel Map Merger Process
Completed to Merge Lots into
"Housing Site"
25. Developer to Submit Tax
Exempt Bond and/or Tax Credit
Application(s)
August 2008
September 30, 2008
September - Oc}0ber 2008
November 2008
February 2009
(Not later than first funding
cycle following approval of
Entitlements, provided first
round application date is
not less than 2 months after
the completion date)
Developer shall have the right to
reappIy to TCAC not less than four
additional funding cycles (2 years).
26. Developer Receives Tax
Credit Preliminary Reservation
Letter
27. Developer to Apply for
Building Permit
28. Developer Obtains All
Financing Commitments
29. Developer to receive
Building Permit, Close on
Construction Loan(s) for
Affordable Family Housing and
begin Construction:
May 2009
June 2009
Within 4 weeks of Receipt
of Preliminary Tax Credit
Reservation
June 2009 Developer submits proof of
financing commitments to City
Manager
October 2009
Page 3
(A) With TCAC Financing
(B) With CDLAC Bond
Financing
(A) Within 150 days of
receipt of Preliminal3.,
Reservation
(B) Within 90 days of
CDLAC Allocation
(A) Within the time fi’ame required
by the TCAC Program
(B) Within the time fi’ame required
by the CDLAC Program.
30. Developer to Submit
Property Management Plan to
City
Within 90 days after start of
construction
31. Substantial Completion of
Family Proj ect
(TCAC or CDLAC)
32. Developer Completes
Lease-up and Occupancy
33. State Housing Grant and
matching funds must be spent
April 2011
Within 18 months of start
of construction.
August 2011
Within 4 months of
completion of construction
October 12, 2011
Page 4
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
Attn: City Manager
WITH A COPY TO:
ATTACHMENT NO. 4
FORM OF GRANT DEED
Attention:
FREE RECORDING REQUESTED
(Govt. Code Section 6103)
[Space above for Recorder’s use pursuant to
California Government Code Section 27383]
GRANT DEED
For a valuable consideration, receipt of which is hereby acknowledged,
The CITY OF PALO ALTO, a chartered city of the State of California
(hereinafter referred to as "Grantor" or "City"), acting to carry out the public purposes of that
certain Acquisition and Development Agreement (herein called "ADA") dated as of ,
2007 and entered into by and among Grantor and COMMUNITY HOUSING ALLIANCE, INC.,
a California non-profit public benefit corporation and EDEN HOUSING, a California non-profit
public benefit corporation (together, "Developer"), hereby grants to , L.P., a
California limited partnership ("Grantee") the real property (hereinafter referred to as the
"Property"), described in Exhibit "A", attached hereto and incorporated herein by this reference.
Further,
Title to the Property is conveyed pursuant hereto subject to all recorded liens,
encumbrances, covenants, encroachments, assessments, easements, leases and
taxes.
The Property is conveyed in accordance with and subject to the ADA, which
document is a public record on file in the offices of the Grantor and incorporated
herein by this reference.
10677-0013\933044v7.doc Attachment No. 4
(Page !)
DRAFT 07/13/07
Grantee covenants and agees (for itself, its successors, assigns, and every
successor in interest to the Prop.erty or any part thereof) as follows:
Grantee, its successors and assigns, shall use the Property and the
improvements now or hereafter constructed only for the development
permitted and the uses specified in the ADA, nanaely, a mixed use
development that includes affordable multi-family rental housing.
Grantee and its successors and assigns shall maintain the Property and the
improvements thereon in the same aesthetic mad sound condition (or
better) as to the condition of the Property at the time City issues a
certificate of occupancy for the Improvements constructed pursuant to the
ADA, reasonable wear and tear excepted. In the event Grantee, its
successors or assigns fail to maintain the Improvements in accordance
with the standard for the quality of maintenance, Grantor or its designee
shall have the right but not the obligation to enter the Property upon
reasonable notice to the then record owner of the Property, correct any
violation, and hold Grantee, or its successors or assigns responsible for the
cost thereof, and such cost, until paid, shall constitute a lien on the
Property. The Grantee and each successor and assign shall be liable for
main.tenance of the Property pursuant to this para~aph only for the
respective period of time during which such entity holds an ownership
interest in the Property.
Except for Permitted Alterations (as hereinafter defined), Grantee shall not
make or suffer to be made any alterations, additions, or improvements to
or on the Property or any building or structure thereon or any part thereof
without the prior written consent of Grantor, which consent will not be
unreasonably withtaetd, conditioned or delayed. Any request for consent
shall be accompanied by plans and specifications for the proposed work in
reasonable detail (including component materials and finish items) to
enable Grantor to consider whether or not to gant approval. Grantor may
condition its approval in any way reasonably deemed necessary by
Grantor to protect its interest in the Property. The term "Permitted
Alterations" shall mean (and Grantee shall not be required to obtain the
consent of Grantor for) either of the following, to the extent they comply
with all applicable City procedures and requirements: (aa) any alterations,
additions, improvements, exterior painting or landscaping (which
alterations, additions, improvements, exterior painting or landscaping
undertaken during a twelve (12) month period, which cost less than 20%
of the value of the Property after issuance of the certificate of occupancy);
or (bb) may tenant improvements within tenant or subtenant spaces or
signs for any tenants or subtenants. All alterations, additions, or
improvelnents by Grantee shall be made without cost or expense to
Grantor, by responsible and licensed contractors. All improvements and
equipment shall be designed, built, and installed in accordance with all
applicable building codes and regulations, and Grantee shall obtain all
10677-0013\933044v7.doc Attachment No. 4
(Page 2)
DRAFT 07/13/07
necessary building permits. Notwithstanding any provision of this
paragraph "c," prior to the recordation of the certificate of occupancy for
the Improvements, construction or rehabilitation of the initial
Improvements shall be governed by the applicable provisions of the ADA.
Grantee herein covenants by and for itself and its successors and assig-ns, and all
persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race,
color, creed, religion, marital status, national origin, ancestry, sex, sexual
orientation, political affiliation or opinion, disability or pregnancy or pregnancy-
related condition, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed, nor shall the Grantee or any person
claiming-under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the
Property.
Grantee further covenants by and for itself and its successors and assigns, and all
persons claiming under or through them, that it shall refrain from restricting the
sale, lease, sublease, rental, transfer, use, occupancy, tenure, or enjoyment of the
Property (or.any part thereof) on the basis of race, color, religion, creed, national
origin, ancestry, disability, marital status, sex, sexual orientation, political
affiliation or opinion, or pregnancy or pregnancy-related condition of any person.
All such deeds, leases, or contracts pertaining thereto shall contain or be subject
to substantially the following nondiscrimination or nonsegregation clauses:
go In deeds: "The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of, any person or group
of persons on account of race, color, religion, creed, national origin,
ancestry, disability, age, marital status, sex, sexual orientation, political
affiliation or opinion, or pregnancy or pregnancy-related condition in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
land herein conveyed, nor shall the grantee itself or any person claiming
under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or
vendees in the land herein conveyed. The foregoing covenants shall run
with the land."
In leases: "The tessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or throu~’dh them, and this lease
is made and accepted upon and subject to the following conditions: That
there shall be no discrimination against or segregation of any person or
group of persons, on account of race, color, religion, creed, national
origin, ancestry, disability, medical condition, age, marital status, sex,
sexual orientation, political affiliation or opinion, or pregnancy or
10677-0013k933044v7.doc Attachment No. 4
(Page 3)
DRAFT 07/13/07
o
pregnancy-related condition, in the leasing, subleasing, renting,
transferring, use, occupancy, tenure or enjoyment of the land herein
leased, nor shall lessee itself, or any person claiming under or through it,
establish or permit such practice or practices of discrimination or
segregation with reference to the selection, location, number, or
occupancy of tenants, lessees, sublessees, tenants, or vendees in the land
herein leased."
Co In contracts: "There shall be no discrimination against or segregation of,
any person or group of persons on account of race, color, reli~on, creed,
national origin, ancestry, disability, medical condition, age, marital status,
sex, sexual orientation, political affiliation or opinion, or pregnancy or
pregnancy-related condition in the sate, lease, sublease, rental, transfer,
use, occupancy, tenure or enjoyment of the land, nor shall the transferee
itself or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees of the land."
In amplification and not in restriction of the provisions set forth herein above, it is
intended and_. agreed that Grantor shall be deemed a beneficiary of the covenants
and agreements provided herein above both for and in its own ri#~t and also for
the purposes of protecting the interests of the community. All covenants without
regard to technical classification or desig-nation shal! be binding for the benefit of
Grantor and the Property, and such covenants shall run in favor of Grantor for the
entire period during which such covenants shall be in force and effect, without
regard to whether Grantor is or remains an ov,~ner of any land or interest therein to
which such covenants relate. Grantor shall have the ri#~t, in the event of any
breach of any such covenant or agreement, after delivery of notice and expiration
of the cure period discussed in Section 8.5 of the ADA, to exercise all the rights
and remedies, and to maintain any actions at law or suits in equity or other proper
proceedings to enforce the curing of such breach of covenant or agreement.
No violation or breach of the covenants, conditions, restrictions, provisions or
limitations contained in this Grant Deed or in any of the documents referred to
above shall defeat or render invalid or in any way impair the lien or charge of any
mortgage, deed of trust or other security instrument permitted by the ADA and
made in good faith and for value; provided, however, that any subsequent ov~ner
of the Property shall be bound by such remaining covenants, conditions,
restrictions, limitations and provisions, whether such owner’s title was acquired
by foreclosure, trustee’s sale or otherwise, and shall be entitled to all the benefits
granted to Grantee and its assigns hereunder.
All covenants contained in this Grant Deed shall be construed as covenants
nmning with the land and not as conditions that might result in forfeiture of title,
except as set forth in Paragraph 9 below.
10677-0013~33044v7.doc A~ach_rnentNo. 4
(Page 4)
DRAFT 07/13/07
Upon the occun’ence of certain defaults described in Section 8.5.4 of the ADA,
and subject to and in accordance with the procedures and provisions therein, the
Grantor shall have the right, at its option, to repurchase and take possession of the
Property here-by conveyed, or such portion thereof, with all improvements thereon
(the "Option") prior to the fifty-fifth (55th) anniversary of the date on which the
Development is issued its Form 8609 by the California Tax Credit Allocation
Committee (TCAC) (the °°Restriction Termination Date").
The Grantor shall have the right to institute such actions or proceedings as it may
deem desirable for effectuating the proposes of the Option and this Section,
including, but not limited to specific performance. Any delay by the Grantor in
instituting or prosecuting any such actions or proceedings or otherwise asserting
its rights under this Section shall not operate as a waiver of such rights or to
deprive it of or limit such rights in any way (it being the intent of this provision
that Grantor should not be constrained so as to avoid the risk of being deprived of
or limited to the exercise of the remedy provided in this Section because of
concepts of waiver, laches, or others), nor shall any waiver in fact made by the
Grantor with respect to any specific default by the Grantee, its successors and
assig-ns, be considered or treated as a waiver of the rights of the Grantor with
respect to any other defaults by the Grantee, its successors and assigns, or with
respect to th.e particular default except to the extent specifically waived.
10.None of the tern~s, covenants, agreements, or conditions heretofore ageed upon
in writing in other instruments between the parties to this Grant Deed regarding
obligations to be performed, kept or observed as to the Property after this
conveyance of the Property shall be deemed to be merged with this Grant Deed
until the Restriction Termination Date pursuant to the ADA.
11.Until Restriction Termination Date, only the Grantor, its successor, and assig-ns,
and Grantee and the successor and assigns of Grantee in and to the fee title to the
Property shall have the right to consent and agree to changes in, or to eliminate in
whole or in part, any of the covenants, easements, or other restrictions contained
in this Grant Deed or to subject the Property to additional covenants, easements,
or other restrictions without the consent of any tenant, lessee, easement holder,
licensee, mortgage, trustee, beneficiary under a deed of trust or any other person
or entity having an interest less than a fee in the Property. The covenants
contained in this Grant Deed without regard to technical classification or
designation shall not benefit, burden, or be enforceable by any person, or firm, or
corporation, public or private, except Grantor, Grantee, and their respective
successors and assigns.
12.The covenants contained herein shall remain in effect until Restriction
Termination Date, except for the covenants against discrimination (contained in
paragraphs 4 and 5), which shall remain in perpetuity.
13.The terms "Improvements," "Development, .... Purchase Price" and "Holders," as
used in this Grant Deed, shall have the meanings ascribed to them in the ADA.
10677-0013\933044v7.doc Attachment No. 4
(Page 5)
DRAFT 07/13/07
IN WITNESS WHEREOF, the Grantor and the Grantee have caused this instrument to be
executed on their behalf by 1heir respective officers thereunder duly authorized, as of this
day of ., 200
"GRANTOR""GRANTEE"
CITY OF PALO ALTO,
a chartered city
The Grantee hereby accepts and approves each
of the covenants, conditions and restrictions set
forth in this Grant Deed.
By:.
Name:
Title:a California limited partnership
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
By:
City Clerk
APPROVED AS TO FORM:
City Attorney
10677-0013\933044v7.doc Attachment No. 4
(Page 6)
DRAFT 07/13/07
STATE OF CALIFORNIA )
) SSo
COUNTY OF SANTA CLARA )
On ., before me, ., a Notary Public
in and for said state, personally appeared
., personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her sig-nature on the instrument, the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
On , before me, ., a Notary Public
in and for said state, personally appeared
., personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknovdedged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNrESS my hand and official seal.
Notary Public in and for said Stgte
10677-0013\933044v7.doc Attachment No. 4
(Page 7)
DRAFT 07113107
STATE OF CALIFORNIA )
) SS.
COUNTTY OF SANTA CLARA )
On , before me, , a Notary Public
in and for said state, personally appeared
, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/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.
Notary Public in-and for said State
(SEAL)
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
On , before me, , a Notary Public
in and for said state, personally appeared
, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/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.
Notary Public in and for said State
10677-001a\9aa044v7.doc Attachment No. 4
(Page 8)
DRAFT 07/13/07
EXHIBIT "A"
LEGAL DESCRIPTION
PROPERTY
THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF SANTA
CLARA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS"
10677-0013~33044v7.doc Attachment No. 4
(Page 9)
DRAFT 07/13/07
ATTACHMENT NO. 5
SCOPE OF DEVELOPMENT
The proposed Alma Street Affordable Family Development wilt be an apartment
con~lnunity of affordable rental units for families, or a mixed-use development that
includes affordable family rental units and ground floor commercial space on the
Colnbined Ole’s and City Substation sites (Site).
Ole’s and the City Substation sites will be merged to form one parcel for the development
and construction of up to fifty-five affordable family (55) housing units. The
Improvements will include either one of the following:
1. Affordable Rental Units for Families
The Developer will build on the Site thirty-five (35) to fifty-five (55) residential
affordable family apartment units with a one-level underground parking garage that
com~ects to the first level of the neighboring parking garage at 800 High Street. The
property will include one-bedroom, re, o-bedroom and three-bedroom units and
community spaces.
2. Affordable Rental Units for Families with Ground Floor Commercial Space (Mixed-
Use)
The Developer will build on the Site a mixed-use development that includes thirty-five
(35) to fifty-five (55) residential affordable family apartment units and ground floor
commercial space with a one-level underground parking garage that connects to the first
level of the neighboring parking garage at 800 High Street. The property xvill include
one-bedroom, two-bedroom and three-bedroom units and community spaces.
The Developer will subdivide the Site to create a commercial condominium in
accordance with state law for the ground floor commercial portion of the Site, if the
mixed-use option is used.
The Development described herein is preliminary. Final Improvements will be
determined during the planning process.
ATTACHMENT NO. 6
SOURCES AND USES
PALO ALTO
ALMA STREET AFFORDABLE HOUSING DEVELOPMENT
-FAMILY HOUSING
Project Information
Total Number of Units
Affordability
Site Area
Density Ratio (Units per Acre)
FAR (Floor Area Ratio), Not incl. parking
Number of Stories above Grade
Location of Parking
Residential Unit Area
Commercia~ Space
Total Bldg Area (Not including parking)
Unit Mix
SRO "Studio" / 1BA (35.0 s.f.)
I1 BR/1BA unit (576 sof.)
12BR/1BA unit ( 862 s.f.)
3BPJ1BA unit ( 1101 s.f.)
Manager Unit (2BR/1BA)
Total Number of Units
DEVELOPMENT BUDGET
!Site Acquisition
Construction Costs (including parking)
Soft Costs
Total Development Costs
Sources of Financing
Tax Credit Equity
Permanent Loan
Developer Contribution
FHLB,-AHP
Santa Clara County/CUP and others
Community Housing Alliance
City CDBG and CHA Fund Raising
State Housing Trust Fund
City of Palo Alto (Hsg. Fees + matching)
Sale of Commercial Condo
HUD 202 Capital Advance
801 Alma Street
FAMILY HOUSING
(2 Parcels - Ole’s + substn)
53 Units
50% at 30%, 50% at 35%
26,250 s.f. (.6 A)
88 Units/Acre
2.26 FAR
4 Stories
1 Level, underground
59,325 s.f.
0
59,325 s.f.
0
17
19
16
1
53 Units
801 Alma Street
COMMERCIAL +
FAMILY HOUSING - 9%
(2 parcels - Ole’s + substn)
50 Units
50% at 30%, 50% at 35%
26,250 s.f. (.6 A)
83.33 Units/Acre
3.19 FAR
5 Stories
1 Level, underground
67,558 s.f.
16,070 s.f.
83,628 s.f.
0
11
22
16
1
50 Units
$4,000,000 $4,000,000
$14,963,000 $17,849,000
$6,494,000 $6,300,000
$25,457,000 $28,149,000
$
S
S
$
$
S
$
$
$
$
12,625,000
13,000
397,500
1,000,000
500,000
1,000,000
5,500,000
$
s
$
$
$
$
s
$
$
$
Total Sources of Funds $25,457,000 $
Total Cost per Unit $480,321
11,795,000
11,000
300,000
1,000,000
500,000
1,000,000
5,500,000
~365,000
28,149,000
$562,980
Eden Housing, Inc. + Community Housing Alliance, Inc.
7/24/2007
ATTACHMENT NO. 7
FORM OF CITY NOTE
US$3,500,000.00 Palo Alto, California
, 200
FOR VALUE RECEIVED,., a
California limited pm-tnership (the "Borrower"), hereby promises to pay to the order of the CITY
OF PALO ALTO, a municipal corporation ("Lender"), without deduction or offset, the sum of
THREE MILLION, FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($3,500,000.00),
or such lesser amount as may be advanced by the City pursuant to the Agreement (defined
below), together with simple interest on funds as drawn at the rate of three percent (3%) per
anllum.
This Promisso~3, Note (the "Note") is entered into and arises pursuant to that
certain Acquisition and Development Agreement dated as of ,2007 by and between
Borrower’s predecessors-in-interest and Lender (the "Agreement"). All capitalized terms used
herein without definition shall have the meanings set forth in the Agreement. Except in the case
of a default under the Agreement, no pasqnents of principal or interest shall be due under this
Note until the fifty-fifth (55th) anniversary of the date on which the Development is issued its
Form 8609 by the California Tax Credit Allocation Committee (TCAC)(herein, the "Maturity
Date," and otherwise referred to in the Agreement as the "Restriction Ternaination Date") ).
Subject to the conditional forgiveness provisions below, all outstandhag principal and all accrued
interest under this Note shall be paid by the Borrower on the Maturity Date, or in the case of a
default under the Agreement, on the date set forth in accordance with Section 7.2.4 of the
Agreement.
All sums paid under this Note shall be applied first against interest, and the
balance against unpaid principal, and interest shall thereupon cease upon principal so paid.
Should any sum due hereunder not be paid on its due date, then all sums of principal and accrued
interest shall thereafter bear interest until paid at the lesser of the rate of ten percent (10%) per
annum or the maximum rate permitted by law.
Notwithstanding anything to the contrary contained in this Note, the City Loan
shall be forNven in its entirety on the Maturity Date subject to and in accordance with
Section 7.2.5 of the Agreement. Borrower acknowledges and agrees that any principal or
interest under this Note which is forNven by Lender as herein provided mi~t be deemed taxable
income to Borrower under the Ul~ited States Internal Revenue Code mad may be treated and
reported as such by the Lender to the Internal Revenue Service in accordance with applicable
law.
Neither the failure of Lender to exercise its right to accelerate, nor reinstatement
of this Note after such exercise, shall constitute a waiver of the right tO exercise such rights at
any other time.
10677-0013\933044v7.doc Attachment No. 7
(Page 1)
DRAFT 07/13/07
Should default be made by Borrower in the payment of any interest, principal, or
any other sums due hereunder, or if Borrower shall default on performance of any of the
covenants, agreements, terms or provisions of the Agreement (including, without limitation,
Section 2 0fthe Agreement~ ~hich prohibits sales, transfers and assignments of the Development
on the Site and Borrower’s interest in the Site except to certain affiliates of Borrower, then, at
Lender’s option, all sums owing hereunder shall, at once, become immediately due and payable.
Thereafter, interest shall accrue at the maximum legal rate permitted to be charged under the
usury laws of the State of California.
Borrower together with all sureties, endorsers and guarantors of this Note, jointly
and severally, promise to pay: (a) all costs and expenses of collection, including without
limitation attorneys’ fees, in the event this Note or any portion of this Note is placed in the hands
of attorneys for collection and such collection is effected without suit; (b) attorneys’ fees, as
determined by the judge of the court, and all other costs, expenses and fees incurred by Lender in
the event suit is instituted to collect tlss Note or any portion of this Note; (c) all costs and
expenses provided for in the Agreement and/or incurred by or on behalf of Lender in com~ection
with collecting or otherwise enforcing any right of Lender under this Note; and (d) all costs and
expenses, including, without limitation, attorneys’ fees incurred by Lender in connection with
any bankruptcy, insolvency or reorganization proceeding or receivership in which Borrower is
involved, including, without limitation, attorneys’ fees incurred in making any appearance in any
such proceeding or in seeking relief from any stay or injunction issued in or arising out of any
such proceeding.
This Note is to be construed so as to give effect to the intent of the parties to
conform strictly to the law, and all interest payable on account of this Note shall be reduced, if
necessary, to the highest amount allowable under the usury laws or other laws governing this
transaction, should this transaction not be exempt from the same. This Note shall be governed
by and construed in accordance with the laws of the State of California.
All parties who are obligated to pay any portion of the indebtedness represented
by this Note, whether as principa!, surety, guarantor or endorser, hereby waive presentment for
payment, demand, protest, notice of protest and notice of dishonor, and all other notices to which
they mi~t otherwise be entitled, and further waive all defenses based on release of security,
extension of time or other indulgence given in respect to payment of this Note, to whomsoever
given.
The terms of this Note shall be binding upon and inure to the benefit of the
respective heirs, successors in interest and assigns of Borrower and Lender.
All notices and demands shall be given in writing by certified mail, postage
prepaid, and return receipt requested, by personal delivery or by overnight courier. Notices shall
be considered given upon the earlier of (a) personal delivery; (b) two (2) business days following
deposit in the United States mail, postage prepaid, certified or registered, return receipt
requested; or (c) one (1) business day following deposit with an overnight courier. Notices shall
.be addressed as provided below for the respective party; provided that if any party gives notice in
writing of a change of name or address, notices to such party shall thereafter be given as
demanded in that notice:
10677-0013~33044v7.doc Attachment No. 7
(Page 2)
DRAFT 07/13/07
Lender:
Bon’ower:
City of Palo Alto
P.O. Box 10250
Palo Alto, California 94303
Attn: City Manager
Time is of the essence with respect to each and every provision hereof. If any
provision hereof is found to be invalid or unenforceable by a court of competent jurisdiction, the
invalidity thereof shall not affect the enforceability of the remaining provisions of this Note.
Borrower’s performance under this Note shall be secured by a deed of trust in
favor of Lender encumbering the Site.
"Borrower":
a California limited partnership
By:
Name:
Title:
10677-0013\933044v7. doc Attachment No. 7
(Page 3)
DRAFT 07/13/07
ATTACHMENT NO. 8
RECORDING REQUESTED BY
AND VCHEN RECORDED MAIL TO:
FORM OF CITY DEED OF TRUST
City of Palo Alto
P.O. Box 10250
Palo Alto, California 94303
Atm: City Manager
Exempt from recording fees pursuant to Gov. Code See. 6103
SPACE ABOVE THIS LINE FOR RECORDER’S USE
DEED OF TRUST AND ASSIGNMENT OF RENTS
A.P.N.
THIS DEED OF TRUST (this "Deed of Trust") is made as of .,
2007, between , L.P., a California limited partnership
("Trustor"), FIRST AMERICAN TITLE INSURANCE COMPANY as "Trustee," and the CITY
OF PALO ALTO, a chartered city ("Beneficiary"). Trustor is the fee owner of the Property
described below.
This Deed of Trust witnesseth:
That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN
TRUST, WITH POWER OF SALE, that certain real property in Santa County, California,
described as:
See Exhibit A, attached hereto and incorporated herein by this reference.
TOGETHER WITH therents, issues and profits thereof,. SUBJECT, HOWEVER, to the right,
power, and authority hereinafter given to and conferred upon Beneficiary to collect and apply
such rents, issues, mad profits; and together with all buildings and improvements of every kind
and description now or hereafter erected or placed thereon, and all fixtures, including but not
limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces,
heating equipment, laundry equipment, steam and hot water boilers, stoves, ranges, elevators and
motors, bath tubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating
fixtures, mantels, cabinets, refrigerating plant and refrigerators, whether mechanical or
otherwise, cooking apparatus and appurtenances, and all shades, aver’tings, screens, blinds and
other furnishings, it being hereby ageed that all such fixtures and furnishings shall to the extent
permitted by law be deemed to be permanently affixed to and a part of the realty; and
Together with all building materials and equipment now or hereafter delivered to the premises
and intended to be installed therein; and
10677-0013~933044v7.doc Attachment No. 8
(Page 1)
DRAFT 07/13/07
Together with all articles of personal property owned by the Trustor now or hereafter attached to
or used in and about the building or buildings now erected or hereafter to be erected on the lands
described which are necessary to the complete and comfortable use and occupancy of such
building or buildings for the-.purposes for wlfich they were or are to be erected, including all
other goods and chattels and personal property as are ever used or furnished in operating a
building, or the activities conducted therein, similar to the one herein described and referred to,
and all renewals or replacements thereof or articles in substitution therefor, whether or not the
sanae are, or shall be attached to the building or buildings in any manner. All of the foregoing,
together with the real property, is herein refen’ed to as the "Property."
To have and to hold the Property, together with appurtenances to the Trustee, its or its successors
and assigns forever.
For the Purpose of Securing:
(a) Perforn~ance of each agreement of Trustor herein contained.
(b) Payment of the indebtedness evidenced by that certain promissory note (the "Note")
of even date herewith, and any extension or renewal thereof, in the stated principal sum of
$3,500,000.00, executed by Trustor in favor of Beneficiary or order.
(c) Payment of sucti further sums as the then record owner of the Property hereafter may
borrow from Beneficiary, when evidenced by another note (or notes) reciting it is so secured.
(d) Performance by Trustor of all of Trustor’s obligations arising under that certain
Regulatory Agreement (the "Regulatory Agreement") dated and recorded concurrently herewith
between Trustor and Beneficiary.
(e) Performance of each obligation of Trustor set forth in that certain Acquisition and
Development Agreement (the "Agreement") dated as of ., 2007 entered into by and
between Trustor’s predecessors-in-interest and Beneficiary.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) That it shall faithfully perform each and every covenant contained in the Note,
Regulatory Agreement, and the Agreement.
(2) That it will not permit or suffer the use of any of the Property for any purpose other than
the use described in the Regulatory Ageement and the Ageement as they may be amended from
time to time.
(3) To keep the 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 the Property,
or requiring any alterations or improvements to be made thereon; not to commit or pent, it waste
thereof; not to commit, suffer or permit any act upon the Property in violation of law; to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use
10677-0013\933044v7.doc Attachment No. 8
(Page 2)
DRAFT 07/13/07
of the Property may be reasonably necessary, the specific enumerations herein not excluding the
general.
(4) To provide, maintain, and deliver to Beneficiary fire and extended coverage insurance
with endorsements for vandalism, malicious mischief, and special extended perils, in the full
replacement value of the improvements (excluding footings and foundations with no co-
insurance penalty provision), and with endorsements for increases in costs due to changes in
code and inflation, and any other insurance requested by Beneficiary, and with loss payable to
Beneficiary, and any other insurance required by the Agreement. 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 Beneficiary may determine, or at 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. Beneficiary shall have the right to pay any insurance premiums when
due should Trustor fail to make them, and all such payments made by the Beneficiary shall be
added to the principM sum secured hereby. Beneficiary shall release all insurance or
condemnation proceeds to Trustor to be used to reconstruct the Project on the Property provided
that such Beneficiary determines that such restoration, repair or rebuilding is economically
feasible.
(5) To appear in and defend any action or proceeding pm~orting to affectthe 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 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.
(6) To pay: at least ten (10) calendar days before delinquency all taxes and assessments
affecting the Property, includh~g assessments on appurtenant water stock; when due, all
encumbrances, charges and liens, with interest, on the Property or any part thereof, which appear
to be prior or superior hereto; all costs, fees and expenses of this Trust.
(7) 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 releasing 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 the Property for such purposes with
written notice to Trustor; 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 encumbrance, 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 its reasonable fees.
(8) 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 secured hereby, any amount demanded by the Beneficiary not to exceed the maximum
allowed by law at the time the statement is made.
10677-0013~933044v7.doc Attachment No. 8
(Page 3)
DRAFT 07/13/07
(9) The Trustor further covenants that it will not voluntarily create, suffer, or perrnit to be
created against the Property any lien or liens except as authorized by Beneficiary and further that
it will keep and maintain the Property free from the claims of all persons supplying labor or
materials which will enter into the construction of any and all buildings now being erected or to
be erected on the Property, or will cause the release of or will provide a bond against any such
liens within ten (10) days of Trustor’s receipt of notice of the lien or liens.
(10) That any award of damages in connection with any condeirmation for public use of or
injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who
may apply or release such moneys it receives in the same manner and with the same effect as
above provided for disposition of proceeds of fire or other insurance.
(11) 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
declare default for failure so to pay.
(12) 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 the 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 the 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.
(13) That upon written request of Beneficiary stating that all sums secured hereby have been
paid or forNven by Beneficiary, and upon surrender of this Deed of Trust and the 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 reconveyance of any
matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled thereto." In addition,
upon Beneficiary’s satisfaction that the subdivision process for the creation of commercial
condominiums for the ground level commercial/retail spaces on the Property in accordance with
state law has been completed, Beneficiary shall make written request to Trustee for the partial
reconveyance of the portion of the Property consisting of those condominiums, and the
encumbrance of this Deed of Trust shall be reconveyed without warranty as to that portion of the
Property only.
(14) That Trustor hereby absolutely and unconditionally assigns and transfers to Beneficiary
all the rents, income and profits of the property encumbered hereby, and hereby give to and
confer upon Beneficiary the right, power and authority to collect such rent, income, and profits,
and Trustor irrevocably appoints Beneficiary Trustor’s true and lawful attorney at the option of
Beneficiary, at any time, to We receipts, releases and satisfactions and to sue, either in the nanae
of Trustor or in the name of Beneficiary, for all income, and apply the same to the indebtedness
secured hereby; provided, however, so long as no default by Trustor in the payment of any
indebtedness secured hereby shall exist and be continuing, Trustor shall have the rigJat to collect
all rent, income and profits from the Property and to retain, use and enjoy the same. 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
10677-0013\933044v7.doc Attachment No. 8
(Page 4)
DRAFT 07/13/07
indebtedness hereby secured, enter upon and take possession of the Property or any part thereof,
in its own name sue for or otherwise collect such rents, issues and profits, including those past
due and unpaid, and apply the same, less costs and expenses of operation and collection,
including reasonable attorne-y’s fees, upon any indebtedness secured hereby, and in such order as
Beneficiary may determine. The entering upon and taking possession of the 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.
(15) That upon default by Trustor in payment of any indebtedness secured hereby, or in
perfonr~ance of any ageement 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 election to cause to be sold the Property, which
notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this
Deed of Trust, the 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 the notice of
default, and notice of sale having 1)een given as then required by law, Trustee, without demand
on Trustor, sha!l sell the Property at the time and place fixed by it in the 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 lawfu! money of the United States, payable at time of sale. Trustee
may postpone sale of all or.any portion of the 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 implied. 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
the sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of
evidence of title in connection 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.
(16) 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 herein or acting hereunder, which instrument, executed by the Beneficiary and duty
acknowledged and recorded in the office of the recorder of the county or counties where the
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. The 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.
(17) That this Deed of Trust applies 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 pledgees, of the Note, whether or not
10677-0013~33044v7.doc Attachment No. 8
(Page 5)
DRAFT 07/13/07
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.
(18) That Trustee accepts this Trust when this Deed of Trust, duly executed and
ackaaowledged, is made a public record as provided by law. Trustee is not obligated to notify any
party hereto of pending sale under any Deed of Trust or of any action or proceeding in which
either Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
(19) If Trustor shall die or sell, convey, hypothecate, transfer, encumber or alienate the
Property, or may part thereof, or any interest therein, or shall be divested of title or any interest
therein in any manner or way, whether voluntarily or involuntarily, without the written consent
of the Beneficiary being first had and obtained, or if Trustor shall fail to make may payments due
under the Note, or fail to perform any other obligation under this Deed of Trust, the Note, the
Regulatory Ageement, or the Agreement, or any other deed of trust encumbering the Property or
the promissory note or 6ther ageement secured thereby, 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 note evidencing the same, immediately due and payable.
(20) That Trustor shall promptly pay when due the payments of interest, principal, and all
other charges accruing unde_r any superior or prior trust deed, mortgage, or other instrmnent
encunabering the Property. Upon any breach of the Ageement, Beneficiary shall have the right
to declare all stuns secured hereby immediately due and payable. Beneficiary shall have the
right, but not the obligation, to cure any defaults on any superior or prior deed of trust or
promissory 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 State of
California, and Trustor’s failure to pay such amount on demand shall be a breach hereof.
Trustor’s breach or default of may 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.
(21) That the improvements now existing or to be constructed upon the Property, and all plats
and specifications, comply with all municipal ordinances and regnlations and all other
rega~lations made or promulgated, now or hereafter, by lawful authority, and that the same wil!
upon completion comply with all such municipal ordinances and regulations and with the rules
of the applicable fire rating or inspection organization, bureau, association or office.
The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale
hereunder be mailed to it at the following address:
Signature of Trustor-
a California limited partnership
By:
Name:
Title:
10677-0013\933044v7.doc Attachment No. 8
(Page 6)
DRAFT 07/13/07
STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA )
SSo
On ,2007, before me,, Notary Public, personaliy
appeared personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNrESS my hand and official seal:
Signature
Notary Public
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
)
)
)
SS.
On ,2007, before me,, Notary Public, personally
appeared persona!ly known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Sig-nature
Notary Public
10677-0013\933044v7.doc Attachment No. 8
(Page 7)
DRAFT 07/13/07
STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA )
SS.
On ,2007, before me,, Notary Public, personally
appeared personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in
his!her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signatm’e
Notary Public
STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA )
SS.
On ,2007, before me,, Notary Public, personally
appeared personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
Notary Public
10677-001~\9~3044v7.doc Attachment No. 8
(Page 8)
DRAFT 07/13/07
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
10677-001~k%~044v7.doc Attachment No. 8
(Page 9)
DRAFT 07/13/07
ATTACHMENT NO. 9
Recording Requested By and
When Recorded Return to:
FORM OF REGULATORY AGREEMENT
City of Palo Alto
P.O. Box 10250
Palo Alto, California 94303
Attn: City Manager
Exempt from recording fees pursuant to Gov. Code Sec. 6103
SPACE ABOVE THIS LINE FOR RECORDER’S USE
REGULATORY AGREEM~ENT
THIS REGULATORY AGREEMENT (this "Ageement") is made and entered into as of
., 200__ by and between the CITY OF PALO ALTO, a chartered city (hereinafter
referred to as "City") and the ., L.P., a California limited partnership
("Owner"), with reference to the follo?ving:
RECITALS
A. Owner is the owner of real property located in the City of Palo Alto, California
(hereinafter referred to as the "Property") and legally described on Exhibit "A," attached hereto
and incorporated herein by this reference.
B. Owner’s predecessors-in-interest and City entered into that certain Acquisition and
Development A~eement dated as of ,2007 (hereinafter referred to as
the "ADA"), which is incorporated herein by this reference. All capitalized terms not defined
when first used in this Ageement shall have the meanings ascribed to them in the ADA. Under
the ADA, the City is providing financial assistance to Owner for the purpose of acquiring and
making improvements to the Property for use as residential development including affordable
multi-family rental housing (the "Development").
C. As a condition of providing such financial assistance, the Owner desires to record this
Ageement to impose certain income and rent restrictions on the Development described below
to satisfy the requirements under Section 6.2 of the ADA.
10677-0013\933044v7.doc Attachment No. 9
(Page 1)
DRAFT 07/13/07
NOW, THEREFORE, City and Ownaer agree as follows:
AGREEMENT
1. Except for the covenants contained in Section 4 below, the covenants contained in this
Agreement shall remain in full force and effect until fifty-five (55) years after the date on which
the Development is issued its Form 8609 by the California Tax Credit Allocation Committee
("TCAC") (the "Restriction Termination Date"), unless sooner terminated by written agreement
of the Owner mad the City. The covenants contained in Section 4 below shall remain in effect in
. perpetuity.
2. Owner hereby covenants and agrees for itself, its successors, its assig-ns, and every
successor in interest to the Property that the Owner, and such successors and such assigns, shall:
a.Develop and use the Property only for the Development permitted and specified in the
ADA;
b. Keep the Property free from any accumulation of debris or waste materials, and keep the
landscaping in a healthy condition;
c. Maintain the Property and all improvements on the Property, including landscaping, in
good condition, and to the reasonable satisfaction of the City. Maintenance shall be in
conformance and in compliance with City’s normal maintenance standards, as defined by City’s
codes relating to property maintenance and in accordance with the following:
i.Owner’s execution of this Agreement shall constitute an irrevocable
license to the City (or its designee) of full and complete access to the Property to perform such
maintenance in the event of the failure of Owner to timely perform such maintenance.
ii. Owner shall reimburse the City for any and all costs incurred by the City
in maintenance of the Property or the improvements.
3. Owmer hereby further covenants and agrees foritself, its successors, its assigns, and every
successor in interest to the Property that the Owner, and such successors and such assigns, that:
a. Owner shall operate a residential project consisting of thirty-five (35) to fifty-five (55)
residential units (the "Project").
b. All of the residential units in the Project (the "Affordable Units") shall be both rent-
restricted and occupied, or if vacant, available for occupancy, by Very Low Income Households
whose incomes do not exceed fifty percent (50%) of the Area Median Income for Santa Clara
County, as adjusted by household size, .or such other qualifying limits for Very Low Income
Households as may be established in accordance with California Tax Credit Allocation
Committee (TCAC) guidelines, as they subsequently may be amended. In addition, at least
thirty percent (30%) of the Affordable Units shall be occupied (or available for occupancy) by
Extremely Low Income households whose incomes do not exceed thirty percent (30%) of the
Area Median Income. The Affordable Units shall contain the number of bedrooms that may be
required by the financing approved by the City.
10677-00132933044vT.doc Attachment No. 9
(Page 2)
DRAFT 07/13/07
c. Rents shall be restricted on Affordable Units to thirty percent (30%) of the income
limitation above, or as otherwise may be set forth in the TCAC guidelines ("Affordable Rents").
d. In determining the household size appropriate for the Affordable Unit, it shall be assumed
one person occupies a studio unit, one and one-half persons occupy a one-bedroom unit, three
persons occupy a two-bedroom unit, four and one-half persons occupy a three-bedroom unit, and
six persons occupy a four-bedroom unit or as otherwise may be required by TCAC.
e. The income and household size of all households occupying Affordable Units shall be
certified by the Owner prior to occupancy and re-certified annually thereafter. Each annual re-
certification shall also include the initial occupancy date of the household occupying the Unit,
the monthly Affordable Rent paid for the Affordable Unit during the prior year, the utility
allowance attributable to the Affordable Unit, and the percentage of household income used to
pay rent. The Owner shall maintain all certifications and make them available to the City upon
request.
4. Subject to any restrictions on transfer or assignment set forth in the Agreement, Owner
covenants and agrees for itself, its successors, and assigns, and all persons claiming under or
thi’ough them that there shall be no discrimination against or segregation of any person or group
of persons on account of race, co!or, creed, religion, medical condition, sex, sexual orientation,
marital status, ancestry, national origin, political affiliation or opinion, pregnancy or pregnancy
related condition, age, or disability, in the sale, lease, sublease, transfer, use, occupancy, tenure
or enjoyment of the Property nor shal! Owner or any person claiming under or through Owner
establish or permit any such practice or practices of discrimination or segregation With reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Property. The foregoing shall not be interpreted to prohibit Owner from
designating units for occupancy by persons with disabilities in accordance with applicable law.
5. All conditions, covenants and restrictions contained in this Agreement shall be covenants
running with the land, and shall burden the Property and run for the benefit of City.
6. All covenants in this Agreement, without regard to technical classification or designation,
legal or otherwise, shall, in any event, be, to the fullest extent permitted by law and equity,
binding for the benefit and in favor of, and enforceable by City, its successors and assigns,
against Owner, its successors and assigns, to or of the Property or any portion thereof or any
interest therein, and any party in possession or occupancy of the Property and such covenants
sha!l run in favor of City for the entire period during which such covenants shall be in force and
effect, without regard to City is or remains an owner of any land or interest therein to which such
covenants relate. City shall have the right, in the event of any breach of any such agreement or
covenant, to exercise all the rights and remedies, and to maintain any actions at law or suit in
equity or other proper proceedings to enforce the curing of such breach of agreement or
covenant.
7. In the event Owner ceases to operate the Property in accordance with this Agreement or
ceases to operate the Project, and fails to cure such breach upon sixty (60) days’ written notice
from City, in addition to the other rights of City under this Agreement, City shall also have the
option to purchase the Property (the "Option") in accordance with the fol!owing:
10677-0013N33044vT.doc Attachment No. 9
(Page 3)
DRAFT 07/13/07
a. The Option shall be exercised, if at a11, by City’s delivery of written notice of its election
to exercise the Option to Owner within one year after expiration of the last of the cure periods
granted to Owner, and the Owner shall execute, acka~owledge and deliver a grant deed for the
Property to the City within fifteen (15) business days after the City’s election, subject only to the
title exceptions described in clause (c) below. Ja~ the event O~¢ler fails to do so, City shall have,
in addition to any and all of its other rights and remedies at law, in equity and under this
Agreement, the right to an order for specific perfonr~ance.
b. The purchase price for the Property under the Option (the "Option Purchase Price") shall
be the balance then due to the City under the City Loan described more particularly in the ADA.
c. City shall credit the Option Purchase Price to Owner through escrow. Owner shall
convey title subject only to exceptions that (i) existed at the time of Owner’s acquisition of the
Property, or (ii) were created with the written consent of City or approved in writing by City or
expressly contemplated or pen~aitted by this Agreement, including but not limited to the deed of
tlust or other lien securing construction or permanent financing.
d. Upon the City’s election to exercise the Option, the City and the Owner shall promptly
open an escrow with Escrow Agent and shall execute and deliver all documents necessary or
appropriate to complete the purchase and sale transaction in accordance with this Section 7
(including, without limitation, escrow instructions, a settlement statement, a FIRPTA affidavit,
and a California Form 593). O~aer shall pay all escrow costs and the costs of an ALTA owner’s
title insurance policy in favor of City, which is consistent with clause (c) above.
8. No violation or breach of the covenants, conditions, restrictions, provisions or limitations
contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge
of any mortgage or deed of trust or security interest permitted by this Agreement; provided,
however, that any subsequent owner of the Property shall be bound by such remaining
covenants, conditions, restrictions, limitations and provisions, whether such owner’s title was
acquired by foreclosure, deed in lieu of foreclosure, trnstee’s sale or otherwise.
9. Within thirty (30) days after the Restriction Termination Date, the City and Owner shall
record a notice of the termination of this Agreement and the Option.
10. Notwithstanding any other provision of this Agreement, the upon the creation of
commercial condominiums for the ground level commercial!retail spaces on the Property in
accordance with state law, the portion of the Property consisting of those condominiums shall be
released from the encumbrance of this Agreement. City and Ow~ner shall record an addendum to
this Agreement documenting the release of the commercial condominium portion of the Property
when the subdivision process is completed.
10677-0013~33044v7.doc Attachment No. 9
(Page 4)
DRAFT 07/13/07
IN WITNESS WHEREOF, the parties have executed this Ageement as of the day and
year written above.
ATTEST:CITY OF PALO ALTO, a chartered city
City Clerk Mayor
"DEVELOPER"
APPROVED AS TO FORM:
Assistant City Attorney
COMMX_rNITY HOUSING ALLIANCE, INC.,
a California non-profit public benefit
corporation.
By:
Name:
Title:
FEIR#:
APPROVED:
Assistant City Manager
By:
Name:
Title:
FEIR#:
Director of Administrative Services
Director of Plmming and Community
Environment
EDEN HOUSING, INC., a California non-
profit public benefit corporation.
By:
Name:
Title:
FEIR#:
Insurance Review
By:
Name:
Title:
FEIR#:
10677-0013\933044v7.doc Attachment No. 9
(Page 5)
Dt~4FT 07/13/07
STATE OF CALIFORNIA )
-)
COUNTY OF SANTA CLARA )
SS.
On ,200__, before me,, Notary Public, personally
appeared personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS any hand and official seal.
Signature
Notary Public
STATE OF CALIFORNrIA
COUNTY OF SANTA CLARA
)
)
)
SS.
On ,200___, before me,, Notary Public, persona!ly
appeared personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNrESS my hand and official seal.
Signature
Notary Public
10677-0013\933044v7.doc Attachment No. 9
(Page 6)
DRAFT 07/13/07
STATE OF CALIFORNIA )
-)
COUNTY OF SANTA CLARA )
SS.
On ,200__, before me,, Notary Public, 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 mad acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s)~ or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Si~aature
Notary Public
STATE OF CALIFORNIA
COUNTTY OF SANTA CLARA
)
)
)
SS.
On ,200__, before me,, Notary Public, personally
appeared personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he!she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITlXrESS my hand and official seal.
Sig-namre
Notary Public
10677-0013L933044v7.doc Attachment No. 9
(Page 7)
DRAFT 07113/07
ATTACHS~ENT NO. 10
FORM OF MEMORANDUM OF OPTION
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
Attn: City Manager
WITH A COPY TO AND
MAIL TAX STATEMENTS TO:
Attention:
FREE RECORDING REQUESTED
(Govt. Code Section 6103)
[Space above for Recorder’s use pursuant to
California Government Code Section 27383]
[ADD STATEMENT RE: TRANSFER TAX]
MEMORANDUM OF OPTION TO PURCHASE REAL PROPERTY
In connection with the recordation of this instrument, the CITY OF PALO ALTO,
a chartered city of the State of California (hereinafter referred to as "City"), has ganted to
, L.P., a California limited partnership ("Developer") certain real property
pursuant to that certain Acquisition and Development Ageement dated as of
2007 by and between City and Developer’s predecessors-in-interest (the "ADA"), which is a
public record on file in the office of the City Clerk. Terms used in this instrument and not
defined herein shall have the meanings ~ven in the ADA.
Under the ADA, the Developer is obligated to construct a mixed use development
on the real property described more particularly in Exhibit "A" hereto, incorporated herein by
this reference (the "Property").
In consideration of the gant of a portion of the Property by City to Developer and
the provision of certain financing by City to Developer, City shall have the option to purchase
the Property (herein, the "Option") as follows:
10677-001z\gzz044v7.doc A~achmentNo. 10
(Page 1)
DRAFT 07/13/07
(a)
(b)
(c)
(d)
If Developer defaults on the ADA at any time prior to the completion of
construction of the Project pursuant to the ADA, and such default is not cured
within the time periods set forth in Section 8.1 of the ADA, and subject to the
rights of-Holders set forth in Section 5.13 of the ADA, City may purchase the
Property and all, improvements thereon, at any time.
If Developer defaults on the Regulatory Ageement at any time after
completion of construction but prior to the Restriction Termination Date (as
defined in the Regulatory Ageement), and such default is not cured within
sixty (60) days of written notice from City, City may purchase the Property
and all improvements thereon at any time.
The Option sha11 be exercised, if at all, by City’s delivery of written notice of
its election to exercise the option to Developer within one year after expirktion
of the last of the cure periods ganted to Developer.
The purchase price (the "Option Purchase Price") shall be all amounts then
owed by Developer to City pursuant to the City Loan, as that term is defined
in the ADA.
(e)
(O
(g)
The purchase and sale shall occur within thirty (30) business days after City’s
exercise 5fthe Option through an escrow company selected by City. City and
Developer shall promptly execute, acknowledge and deliver any mad all
documents necessary or appropriate to conduct the purchase and sale
transaction (including, without limitation, escrow instructions, a settlement
statement, a FINPTA affidavit, and a California Form 593) and the Developer
(i.e., Seller) shall pay all escrow costs and the cost of an ALTA title policy in
favor of City thatis consistent with clause (f) below.
City shall credit the Option Purchase Price to Developer concurrently with
delivery of title to City. Developer shall convey title subject only to
exceptions that (i) existed at the time of Developer’s acquisition of the
Property, or (ii) were created with the written consent of City or approved in
writing by City.
City shall be entitled to specific performance to enforce the terms of this
instrmnent.
(h)Within thirty (30) days after the Restriction Tenr~ination Date, the City and
Developer shall record a notice of termination of this Option.
(i)Notwithstanding any other provision of the ADA or this Memorandum, upon
the creation of any commercial condominiums for the gound level
conmaercial!retail spaces on the Property in accordance with state law, the
portion of the Property consisting of those condominiums shall be released
from the encumbrance of the City’s Option, and thereafter the City’s Option
to purchase shall cover only the remaining portions of the Property. City and
Ov~aer shall record an addendum to this Memorandum documenting the
10677-0013~933044v7.doc Attachment No. 10
(Page 2)
DRAFT 07/13/07
release of the cormnercial condominium portion of the Property when the
subdivision process is completed.
IN WITNESS WHEREOF, the City and the Developer have caused this
instrument to be executed on their behalf by their respective officers thereunder duly authorized,
as of this day of ,200__.
ATTEST:CITY OF PALO ALTO, a chartered city
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
Mayor
"DEVELOPER"
COMXMUNITY HOUSING ALLIANCE, INC.,
a California non-profit public benefit
corporation.
By:
Name:
Title:
FEIR#:
APPROVED:
Assistant City Manager
By:
Name:
Title:
FEIR#:
Director of Administrative Services
Director of Plarming and Community
Environment
EDEN HOUSING, INC., a California non-
profit public benefit corporation.
By:
Name:
Title:
FEIR#:
Insurance Review
By:
Name:
Title:
FEIR#:
10677-001 ~k9~ a044v7.doc Attachment No. 10
(Page 3)
DRAFT 07/13/07
STATE OF CALIFORNIA
COUNTY OF SANTA CL~kRA
On , before me, . a Notary Public
in and for said state, persona!ly 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 ackmowledged to me that he/she executed the stone in his!her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon behalf of which ttie
person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
On , before me, , a Notary Public
in and for said state, personally appeared
, personally ~known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/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.
Notary Public in and for said State
10677-O013\933044v7.doc A~achmentNo. 10
(Page 4)
DRAFT 07/13/07
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
On ., before me, , a Notary Public
in and for said state, personally appeared
, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her sigr~ature on the instrument, the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
On , before me, , a Notary Public
in and for said state, personally appeared
, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon behalf of which the
person acted, executed the insta’ument.
WITNESS my hand and official seal.
Notary Public in and for said State
10677-0013\933044v7.doc Attactiment No. 10
(Page 5)
DRAFT 07/13/07
EXHIBIT "A"
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF SANTA
CLARA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
10677-0013\9~044v7.doc Attachment No. 10
(Page 6)
DRAFT 07/13/07
ATTACHS~NT NO. 11
FORM OF MEMORANDUM OF AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
Attn: City Manager
WITH A COPY TO:
Attention:
FREE RECORDING REQUESTED
(Govtl Code Section 6103)--
(Space Above For Recorder’s Use)
MEMORANDUM OF ACQUISITION .~tD DEVELOPMENT AGREEMENT
THIS MEMORANDUM OF ACQUISITION AND DEVELOPMENT
AGREEMENT (this "Memorandum") is made as of this ~ day of ., 2008, by and
between the CITY OF PALO ALTO, a chartered city ("City") and L.P., a
California limited partnership (hereinafter referred to as "Grantee" or "Developer"), with
reference to the following matters:
1. City and Developer’s predecessors-in-interest entered into that certain Acquisition
and Development A~eement dated as of ., 2007 (the "ADA"), which is incorporated
herein by reference. All capitalized terms not otherwise defined herein shall have the meanings
assigned to them in the ADA. The ADA is a public record on file in the offices of City.
2. Pursuant to the ADA, City shall convey to Developer certain real property
described as the City Parcel and more particularly described on Exhibit "A-l", attached hereto
and incorporated herein by reference.
3. Pursuant to the-ADA, Developer acquired certain real property described more
particularly on Exhibit "A-2", attached hereto and incorporated by reference (the "Ole’s Parcel").
In the ADA and herein, the City Parcel and the Ole’s Parcel are referred to collectively as the
"Site", which is described more particularly on Exhibit "B", attached hereto and incorporated by
reference.
10677-0013k933044v7.doc Attachment No. 11
(Page 1)
DRAFT 07/13/07
4. Pm’suant to the ADA, Developer a~ees to construct certain improvements
defined therein as hnprovements on the Site including affordable multi-family rental housing and
parking or such other project as may be approved in writing by the City (collectively, the
"Development"). If Developer fails to construct the Improvements in the maturer and within the
time set forth in the ADA, City shall have the right to repurchase the Site within the time periods
set forth in the ADA.
5. City has provided certain financial assistance to Developer to assist in the
completion of Development, as is more particularly described in Article 7 of the ADA.
6. Developer is also required to limit occupancy of the residential units in the
Development for fifty-five (55) years to households of certain levels of Very Low Income, as is
more particularly described in A_rticle 6 of the ADA.
7. Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the ADA or any other provisions of the documents incorporated
herein.
///
10677-001~\9~044v7.doc A~achrnentNo. 11
(Page 2)
DRAFT 07/13/07
IN WITNrESS WHEREOF, City and Developer have executed this Memorandmn as of
the day and year f~rst above written.
ATTEST:CITY OF PALO ALTO, a chartered city
City Clerk Mayor
APPROVED AS TO FORM:
Assistant City Attorney
APPROVED:
Assistant City Manager
"DE\rELOPER"
COMMUNITY HOUSING ALLIANCE, INC.,
a California non-profit public benefit
corporation.
By:
Name:
Title:
FEIR#:
By:
Name:
Title:
FEIR#:
Director of Administrative Services
EDEN HOUSING, INC., a California non-
profit public benefit corporation.
Director of Planning and Community
Environment
Insurance Review
By:
Name:
Title:
FEI~R#:
By:
Name:
Title:
FEIR#:
10677-001~3044v7.doc Attachment No. 11
(Page 3)
DRAFT 07/13/07
STATE OF CALIFORNKA
COUNTY OF SANTA CLARA
On , before me, , a Notary Public
in and for said state, personally appeared
, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he!she executed the sanae in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS nay hand and official seal.
Notary Public in and for said State
(SEAL)
WITNESS my hand and official
STATE OF CALIFORNIA )
) SS.
COUNTY OF SANTA CLARA )
On ; before me, , a Notary Public
in and for said state, personally appeared
., personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
mad that by his/her signature on the instrument, the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITh,tESS my hand and official seal.
Notary Public in and for said State
10677-0013~933044v7.doc Attachment No. 11
(Page 4)
DRAFT 07/13/07
STATE OF CALIFORNIA )
) SS.
COUNTY OF SANTA CLARA )
On ., before me, ., a Notary Public
in and for said state, personally appeared
, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/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.
Notary Public in and for said State
(SEAL)
WITNESS my hand and official
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
On , before me, , a Notary Public
in and for said state, personally appeared
., personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/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.
Notary Public in and for said State
10677-0013k933044vT.doc Attachment No. 11
(Page 5)
DR.a~T 07/13/07
EXHIBIT "A-I"
LEGAL DESCRIPTION OF CITY PARCEL
THE LAND REFERRED ~O HEREIN IS SITUATED IN THE COUNTY OF SANTA
CLARA, STATE OF CALIFORNL~, AND IS DESCRIBED AS FOLLOWS:
10677-001~3044v7.doc Attachment No. 11
(Page 6)
DRAFT 07/13/07
EXHIBIT "A-2"
LEGAL DESCRIPTION OF OLE’S PARCEL
THE LAND REFERRED ~O HEREIN IS SITUATED IN THE COUNTY OF SANTA
CLARA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
10677-0013~933044v7.doc Attachment No. 11
(Page 7)
DRAFF 07/13/07
EXHIBIT "B"
LEGAL DESCRIPTION OF THE SITE
THE LAND REFERRED ~O HEREIN IS SITUATED IN THE COUNTY OF SANTA
CLARA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
10677-001z\9zz044v7.doc Attachment No. 11
(Page 8)
DRAFT 07/13/07
ATTACHMENT B
SCHEDULE OF PERFORMANCE
(All dates set forth below are preliminary and are subject to change as the planning and entitlement
process moves forward. Estimated Target Dates are conditioned upon prior Target Dates being met in a
timely manner.)
Abbreviations:
ADA -Acquisition and Development Agreement
ARB -Architectural Review Board (City)
CDLAC -California Debt Limit Allocation Committee (allocates tax-exempt bonds)
CEQA, NEPA - California Environmental Quality Act, National Environmental Policy Act
CHA -Community Housing Alliance, Inc.
DRC -Development Review Committee (City)
PC -Planned Community Zoning
TCAC -California Tax Credit Allocation Committee (allocates tax credits)
1. City Council Study Session
for Alma Affordable Family
Housing
2. City Council Approval of
Tri-Party Agreement (City,
Eden & CHA) and Funding for
Purchase of Ole’s by CHA
3. City makes Initial Deposit
for Purchase of Ole’s
4. City Council Approval of
ADA with Eden and CHA
(Developer)
5. Developer continues Project
Design and conducts
neighborhood outreach
6. CHA repays $480,000 loan
to City
July 10, 2006
[Completed]
Sept. 18, 2006
[Completed]
Sept. 21, 2006
[Completed]
July 16, 2007
August - October 2007
Sept 18, 2007
(deadline)
City makes $980, 000 deposit of
which $480,000 is unsecured loan
to CHA.
Page 1
7. Developer submits
Plans for Preliminary ARB
review
8. Developer forms Owner
Entities (Corporate General
Partner and Limited
Partnership)
9. City begins preparation of
any CEQA & NEPA Clearance
Documents, as required
10. Developer submits PC
Zone Application to City
11. Developer to Submit List
of Possible General Contractors
for City Manager Review
12. City completes relocation,
removal of Substation function
from City Site
13. City completes City Site
remediation, if required
14. Fund Raising and
applications for City and other
Subsidies
15. Planning Commission
Initial Review of PC
Application
16. ARB Review of PC
Application
17. Planning Con~nission Final
Review of PC Application
18. Escrow to be Opened for
City Parcel
19. City makes Final Deposit
for Purchase of Ole’s and
Property is conveyed to CHA
October 2007
August 2007
- July 2008
October 2007
December 2007
December 2007
December 31, 2007
June 30,2008
January 2008 - May 2009
March 2008
May2008
July-August 2008
July 15, 2008
August1,2008
City Manager to respond within 10
da),s
City makes $3,000,000 deposit
Page 2
20. City conveys City Property
to Developer -
21. Developer applies for
Parcel Merger
22. Ole’s Property vacated by
Seller
23. City Council Final Review
and Approval of PC
Application and Entitlements
24. Parcel Map Merger Process
Completed to Merge Lots into
°’Housing Site"
25. Developer to Submit Tax
Exempt Bond and/or Tax Credit
Application(s)
August 1, 2008
August 2008
September 30, 2008
September - October 2008
November 2008
February 2009
(Not later than first funding
cycle following approval of
Entitlements, provided first
round application date is
not less than 2 months after
the completion date)
Developer shall have the right to
reapply to TCAC not less than four
additional funding cycles (2 years).
26. Developer Receives Tax
Credit Preliminary Reservation
Letter
27. Developer to Apply for
Building Permit
28. Developer Obtains All
Financing Commitments
29. Developer to receive
Building Permit, Close on
Construction Loan(s) for
Affordable Family Housing and
begin Construction:
May 2009
June 2009
Within 4 weeks of Receipt
of Preliminary Tax Credit
Reservation
June 2009 Developer submits proof of
financing commitments to Cio,
Manager
October 2009
Page 3
(A) With TCAC Financing
(B) With CDLAC Bond
Financing
30. Developer to Submit
Property Management Plan to
City
31. Substantial Completion of
Family Project
(TCAC or CDLAC)
32. Developer Completes
Lease-up and Occupancy
33. State Housing Grant and
matching funds must be spent
(A) Within 150 days of
receipt of Preliminary
Reservation
(B) Within 90 days of
CDLAC Allocation
Within 90 days after start of
construction
April 2011
Within 18 months of start
of construction.
August 2011
Within 4 months of
completion of construction
October 12, 2011
(A) Within the time frame required
by the TCA C Program
(t3) Within the time fi’ame required
by the CDLAC Program.
Page 4
ATTACHMENT C
SOURCES AND USES
PALO ALTO
ALMA STREET AFFORDABLE HOUSING DEVELOPMENT
FAMILY HOUSING
Project Information
Total Number of Units
Affordability
Site Area
Density Ratio (Units per Acre)
FAR (Floor Area Ratio), Not incl. parking
Number of Stories above Grade
Location of Parking
Residential Unit Area
Commercial Space
Total Bldg Area (Not including parking)
Unit Mix
SRO "Studio" / 1BA (350 s.f.)
1 BR/1BA unit (576 s.f.)
2BR/1BA unit ( 862 s.f.)
3BR/1BA unit ( 1101 s.f.)
Manager Unit (2BPJ1BA)
Total Number of Units
DEVELOPMENT BUDGET
Site Acquisition
Construction Costs (including parking)
Soft Costs
Total Development Costs
Sources of Financing
Tax Credit Equity
Permanent Loan
Developer Contribution
FHLB-AHP
Santa Clara County/CUP and others
Community Housing Alliance
City CDBG and CHA Fund Raising
State Housing Trust Fund
City of Palo Alto (Hsg. Fees + matching)
Sale of Commercial Condo
HUD 202 Capital Advance
801 Alma Street 801 Alma Street
COMMERCIAL +
FAMILY HOUSING FAMILY HOUSING - 9%
(2 Parcels - Ole’s + substn)(2 Parcels - Ole’s + substn)
$
$
$
S
$
$
$
s
$
$
$
s
$
$
53 Units
50% at 30%, 50% at 35%
26,250 s.f. (.6 A)
88 Units/Acre
2.26 FAR
4 Stories
1 Level, underground
59,325 s.f.
0
59,325 s.f.
0
17
19
16
1
53 Units
4,000,000
14,963,000
6,494,000
25,457,000
12,625,000
13,000
397,500
1,000,000
500,000
1,000,000
5,500,000
$
S
$
S
80 Units
50% at 30%, 50% at 35%
26,250 s.f. (.6 A)
83.33 Units/Acre
3.19 FAR
5 Stories
1 Level, underground
67,558 s.f.
16,070 s.f.
83,628 s.f.
0
11
22
16
1
50 Units
Total Sources of Funds $25,457,000
Total Cost per Unit $480,321
$
S
S
$
S
$
$
S
S
4,000,000
17,849,000
6,300,000
28,149,000
11,795,000
11,000
300,000
1,000,000
500,000
1,000,000
5,500,000
2,36&000
28,149,000
$562,980
Eden Housing, Inc. + Community Housing Alliance, Inc.
7/24/2007