HomeMy WebLinkAboutStaff Report 148-06of PMo Alto
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:
SUBJECT:
MARCH 6, 2006 CMR: 148:06
ALMA GARDEN APARTMENTS: 1) APPROVAL OF AN AMENDMENT
TO THE 2005-2006 ANNUAL ACTION PLAN TO ALLOCATE $1,150,000
IN FUNDING FROM THE CDBG HOUSING DEVELOPMENT FUND
AND FY 2006/07 CDBG GRANT ALLOCATION TO THE COMMUNITY
WORKING GROUP FOR THE ACQUISITION OF THE EXISTING
HOUSING UNITS LOCATED AT 2507-2533 ALMA STREET NEAR
COLORADO AVENUE; 2) APPROVAL OF AN AGREEMENT IN THE
AMOUNT OF $1,150,000 WITH THE COMMUNITY WORKING GROUP
FOR THE ACQUISITON OF THE ALMA GARDEN APARTMENTS
LOCATED AT 2507-2533 ALMA STREET; 3) ADOPTION OF A BUDGET
AMENDMENT ORDINANCE TO TRANSFER $250,000 FROM THE CITY
COMMERCIAL HOUSING FUND TO THE CDBG HOUSING
DEVELOPMENT FUND
RECOMMENDATION
Staff recommends that the City Council:
Approve and authorize the amendment to the 2005-2006 Annual Action Plan of the 2005-2010
Consolidated Plan.
Approve and authorize the allocation of funds in the amount of $900,000 from the
existing Community Deve!opment Block Grant (CDBG) housing development fund to
the Community Working Group for the acquisition of the Alma Street Apartments
located at _507-253z Alma Street.
2.Approve and authorize the allocation of $250,000 from the next fiscal year (2006/2007)
CDBG grant allocation for the acquisition of the Alma Street Apartments.
o Approve and authorize the City Manager or his designee to execute the attached
agreement in the amount of $1,150,000 with the Community Working Group for the
acquisition of the Alma Street Apartments.
CMR: 148:06 Page 1 of 4
o Adopt the attached Budget Amendment Ordinance to transfer $250,000 from the
City Commercial Housing fund to the CDBG housing development fund in order
to carry out acquisition of the Alma Street Apartments.
Authorize the City Manager to request $250,000 in fiscal year 2006/2007 CDBG
funds from the Department of Housing and Urban Development in order to
reimburse the City Commercial Housing Fund.
BACKGROUND
The City approved the 2005/2006 Annual Action Plan in May 2005. The action plan is an
annual update that describes the eligible CDBG activities that the City intends to
undertake in the coming fiscal year to address the needs and implement the strategies
identified in the City’s 5-year Consolidated Plan. The 2005/2006 Annual Action Plan
was approved by the Department of Housing and Urban Development (HUD) on July 14,
2005.
The City is required to amend its Annual Action Plan when it plans to undertake an
activity not previously identified in the plan. The City is proposing to allocate funds for
the acquisition of an affordable housing site that was not previously identified in the
2005-2006 Annual Action Plan; therefore, the plan will need to be amended. The draft
amended 2005-2006 Annual Action Plan was available for public review and comment
from February 1 to March 3, 2006.
HUD allocates CDBG funds annually and imposes many regulations on the expenditure
of those funds. The City maintains a housing development fund that is funded annually
with CDBG funds for the creation of more affordable housing. Because of the high cost
of property in the City and the limited CDBG funding the City receives, it has been
difficult to use the funds annually for a project. Contributions to the CDBG housing fund
have consequently accumulated to the current fund balance of approximately $900,000.
HUD requires that the City expend funds in a timely manner or else risk a permanent
funding reduction. In order to meet the timeliness requirement, the City must expend the
existing funds in the CDBG housing development fund by April 30. Last October, the
City issued a special request for proposals (RFP) for the acquisition of an affordable
housing site to be funded through the CDBG housing development fund. The RFP also
included a request for applications for the fiscal year 2006/2007 CDBG grant allocation.
DISCUSSION
The City received two funding applications in response to the RFP for the acquisition of
an affordable housing site. One application was received from Senior Housing Solutions
(SHS) for the acquisition of a single-family home which would be converted into a group
home for five low-income senior citizens. SHS requested $900,000 from the City for its
project with the total project cost estimated at $1,056,650 with the additional funding
coming from the Housing Trust of Santa Clara County and the Peninsula Community
Foundation. SHS has not at this time identified a specific property for acquisition.
CMR: 148:06 Page 2 of 4
The second application was received from the Community Working Group (CWG) for
the acquisition of a 10-unit apartment complex located at 2507-2533 Alma Street. The
complex consists of eight studio apartments and two one-bedroom apartments which will
be able to accommodate approximately twelve people. The total cost of the acquisition is
estimated to be $1,788,663. CWG requested $1,150,000 from the City and plans on
obtaining the balance through a conventional bank mortgage.
Staff recommends that CWG be allocated the requested $1,150,000 for its project. CWG
has secured the site through a purchase agreement with the property owners and can
obtain the balance of the funds for the acquisition in a timely manner. In contrast, SHS
has not yet identified a project site, and staff questions if an appropriate property can be
obtained and retrofitted to accommodate five individuals with the available funding. SHS
has very little cash on hand to contribute toward the project. Finally, the SHS project will
provide only five units of affordable housing. Staff met with the CDBG Citizens
Advisory Committee (CAC) on January 12, 2006 to discuss both applications, and the
CAC concurred with staff’s recommendations.
Staff recommends that CWG be allocated $900,000 from the CDBG housing
development fund and the remaining $250,000 from the fiscal year 2006/2007 CDBG
allocation. The $250,000 allocation will initially be funded from the City Commercial
Housing Fund via a transfer to the CDBG Fund. The City Commercial Housing Fund
will then be reimbursed with fiscal year 2006/2007 CDBG funds when they are available.
RESOURCE IMPACT
$900,000 of the funds that will be allocated to the Community Working Group will come
from previously allocated funds from the CDBG housing development fund and
$250,000 will come from the City’s future CDBG allocation. The initial disbursement of
$250,000 will come from the City Commercial Housing fund which will be reimbursed
by the CDBG program when funds become available in fiscal year 2006/2007. The cost
of the agreement will be funded with federal CDBG funds provided through the U.S.
Department of Housing and Urban Development (HUD).
POLICY IMPLICATION
The recommendation in this staff report is consistent with HUD policies and does not
represent any change to City policies.
PREPARED BY:
Eloiza Murillo-Garcia
Associate Planner-CDBG
APPROVED BY:
Director of Planning and Community Environment
CMR: 148:06 Page 3 of 4
CITY MANAGER APPROVAL:
[SON
Assistant City Manager
ATTACHMENTS
A - Draft Amended 2005-2006 Annual Action Plan
B - Budget Amendment Ordinance
C - Agreement between the City of Palo Alto and the Community Working Group for the
Acquisition of the Alma Street Apartments located at 2507-2533 Alma Street
COURTESY COPIES
Community Working Group
Senior Housing Solutions
CDBG Citizens Advisory Committee
CMR: 148:06 Page 4 of 4
ATTACHMENT A
CITY OF PALO ALTO
Housing and Community Development
DRAFT AMENDED
2005/2006 ACTION PLAN
Annual Update of the City’s Consolidated Plan for the Period
July 1, 2005 to June 30, 2010
Public Review Period February 1, 2006 -March 3, 2006
Prepared by Department of Planning & Community Environment
250 Hamilton Avenue
Palo Alto, California 94301
Steve Emslie, Director
For Information, Please Contact: Eloiza Muri!lo-Garcia, Associate Planner, CDBG
Planning Division, City of Palo Alto (650) 329-2428
Background and Introduction
This one year Action Plan describes the eligible activities that the City intends to undertake in
fiscal year 2005/06 to address the needs and implement the strategies identified in the City’s
Consolidated Plan for the period July 1, 2005 to June 30, 2010. It describes the activities that the
City will fund with Community Development Block Grant (CDBG) funds in fiscal year 2005/06
to address priority housing and non-housing community development needs and to affirmatively
further fair housing choice. It serves as the City’s application for federal funds under the
Department of Housing and Urban Development (HUD) formula grant programs.
Citizen Participation
The City of Palo Alto has an adopted Citizen Participation Plan that provides for a nine-member
CDBG Citizens Advisory Committee (CAC). The CAC process encourages public participation
in the CDBG allocation and evaluation review process. Fiscal year 2005-2006 is the first year of
a two-year funding cycle. The CAC met on January 20 and 25, February 3, 8, 15, 22 and March
3 and 24, 2005 to review and evaluate the applications, interview the applicant agencies, review
the Consolidated Plan priorities, and make funding recommendations on the applications
submitted for 2005/06 CDBG funding and preliminary recommendations for applications
submitted for 2006/07 CDBG funding. In addition, the CAC met for a special meeting on
February 4, 2005 to tour some of the agencies that submitted funding applications.
The City made the draft amended Action Plan available for public review from February 1 to
March 3, 2006. A public hearing on the amended Action Plan was held before the City Council
on March 6, 2006.
RESOURCES AVAILABLE
The City of Palo Alto encourages local non-profit housing and public service agencies to pursue
all available public and private funding sources in order to achieve the goals of the Consolidated
Plan. Most projects and activities secure funding from a variety of sources including private
donations, charitable foundations, and church and community fundraising to leverage federal,
state and local funding.
Federal Resources
Community Development Block Grant (CDBG) Funds
The City receives CDBG funds as an entitlement grant through the U.S. Department of Housing
and Urban Development (HUD). In fiscal year 2005/06, the City will allocate $915,639 in
CDBG funds to eligible activities that address the needs identified in the Consolidated Plan. The
amount of the City’s 2005/06 CDBG entitlement grant from HUD is estimated to be $779,281,
estimated program income is $45,000 and reallocated funds total $62,570. Program income is
income directly generated from the use of CDBG funds that is returned to the CDBG program
and reallocated to new activities.
Estimated FY 2005/06 CDBG Entitlement Grant $779,281
Program Income:
Estimated Program Income 2005/06 (HIP)
Estimated Program Income 2005/06 (PAHC)
Excess Prior Year Program Income
Reallocated Funds:
Miscellaneous Reallocations
TOTAL ALLOCATION
35,000
10,000
28,788
62.570
$915,639
Loan repayments from the City’s former Housing Improvement Program (HIP) single-family
rehabilitation loan program are estimated to be $35,000 for next year. Income from the Palo
Alto Housing Corporation (PAHC) is also estimated to be $10,000 for next year. PAHC funds
are collected when rental income exceeds expenses on properties acquired or rehabilitated with
CDBG funds. Prior year program income funds are funds received in prior years that were in
excess of the estimated program income amounts, and were not previously allocated to projects.
Fiscal Year 2006-2007 Pre-Award
The City will be awarding pre-award costs in the amount of $250,000 to the Community
Working Group (CWG) for the acquisition of an affordable housing site from the fiscal year
2006/2007 CDBG grant allocation. The City received an application for the acquisition of an
existing housing complex consisting of 10 units to be made available to low and very-low
income residents from the CWG. The project is described in more detail under 2005/2006
Pro_iects and Activities to be Undertaken. The City solicited applications because they had
amassed approximately $900,000 in the CDBG housing development fund over the past several
years for the acquisition of an affordable housing site. CWG requested a total of $1,150,000
from the City and the City decided to allocate a pre-award of $250,000 to the Community
Working Group. The $250,000 will be funded by the City Commercial Housing Development
fund and will then be reimbursed with fiscal year 2006-2007 CDBG funds when they become
available.
HOME Program
The City of Palo Alto is not an entitlement grantee under the federal HOME program and thus
does not receive a direct grant of HOME Program funds from HUD. The only way to access
HOME funds for housing projects located within the City of Palo Alto is for the City, or eligible
nonprofit organizations to apply to the State of California for the funds in an annual competition.
Due to excessive demand for the State’s HOME allocation, and rating criteria that does not favor
areas like Palo Alto, it is difficult to secure an award. In the past, the State has limited the
maximum HOME award per project to one million dollars. When a Notice of Funding
Availability (NOFA) is published, the City evaluates all potentially suitable projects to determine
whether or not to apply for a HOME grant.
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State, Local and Other Resources
Ci_ty Affordable Housing Fund (formerly the Housing Reserve)
The Affordable Housing Fund is a local housing trust fund established by the City Council to
provide financial assistance for the development, acquisition and rehabilitation of housing
affordable to extremely low, very low, low and moderate-income households. The Affordable
Housing Fund is the umbrella name for five distinct sub-funds for affordable housing. The two
primary local housing trust funds were formerly known as the Housing Reserve Fund, but on
October 27, 2003, the City Council approved new guidelines for all of the City’s affordable
housing funds including the ones composed of federal housing monies; the funds were renamed
as part of those changes. The Affordable Housing Fund is now composed of:
Commercial Housing Fund - this fund is used primarily to increase the number of new
affordable housing units for Palo Alto’s work force. It is funded with mitigation fees
required from developers of commercial and industrial projects. As of April 30, 2005, the
Commercial Fund had an available balance of approximately $1,900,000.
Residential Housing Fund - this fund can be used for acquisition, rehabilitation, new
construction and predevelopment of low-income housing. It is funded with mitigation fees
provided under Palo Alto’s Below Market Rate (BMR) housing program from residential
developers, and money from other miscellaneous sources, such as proceeds from the sale or
lease of City property. It is also used to pay for administration and consultant contracts
necessary to carry out the BMR program. As of April 30, 2005, the Residential Fund had an
available balance of approximately $750,000.
CDBG Housing Fund - The purpose of the CDBG Housing Fund is to have funds available
on an ongoing basis to utilize when necessary to facilitate the development, rehabilitation and
preservation of low- income housing. Housing development opportunities, especially
opportunities to acquire land for new housing construction, may come up at any time
throughout the year and, due to the nature of the real estate market; a quick response is
frequently necessary. CDBG Housing Funds may be used to pay for costs associated with
the investigation of the feasibility of sites or properties for potential acquisition by the City,
or nonprofit organizations, for affordable housing. These costs usually need to be paid prior
to a project being officially created in the budget. Typically these costs are for appraisals,
environmental studies and soil testing, title reports and conceptual design studies. The
CDBG Housing fund has amassed a balance of approximately $900,000 from the allocation
of funds over the past several years. The City issued a special RFP on October 31, 2005 to
allocate the funds for the acquisition of an affordable housing project.
HOME Program Income Fund - the City has only one HOME funded project, the Barker
Hotel Single Room Occupancy. This project was funded in part with a $1 million 1992
HOME grant from the State. The City’s funding is in the form a long-term, deferred loan
and there has not been any program income from that loan.
Below Market Rate (BMR) Emergency Fund - This fund was authorized by Council in
September 2002 in order to provide funding on an ongoing basis for loans to BMR owners
for special assessment loans and for rehabilitation and preservation of the City’s stock of
BMR ownership units.
The actual process for initiating an application for City Affordable Housing Funds will vary
depending on the particular circumstances. Usually, a nonprofit sponsor will apply to the
Department of Planning and Community Environment for housing subsidy funds when they are
in negotiation for a particular site. At other times, the City may issue a Request for Proposals
once it has secured or identified a potential housing site.
The Planning Department will present recommendations for each project together with a
proposed funding package to the City Council for approval. In almost all cases, funds will be
provided as a loan secured by the property. The repayment terms and interest rate have to be
tailored to the particular project since affordable housing typically is financed from multiple
sources with specific requirements.
Housing Trust of Santa Clara County (HTSCC)
The HTSCC is a public/private initiative, dedicated to creating more affordable housing in Santa
Clara County, using a revolving loan fund and grant-making program to complement and
leverage other housing resources. The City of Palo Alto contributed $500,000 toward the initial
$20 million investment capitalization and provided an additional commitment of $150,000 to be
expended over fiscal years 2004-05 and 2005-06. The City’s contribution will be used
exclusively for qualifying affordable housing projects located within the City.
Multifamil¥ Housing Program (MHP)
The Multifamily Housing Program (MHP) is a relatively new source of funding for affordable
housing as a result of the passage of Proposition 46 in November 2002. The purpose of this
program is to provide low-interest loans to developers of affordable housing. The MHP General
funds may be used for multifamily rental and transitional housing projects involving new
construction, rehabilitation, or conversion of nonresidential structures. MHP Supportive
Housing funds may be used for multifamily rental housing projects involving new construction,
rehabilitation, acquisition and rehabilitation, or conversion of nonresidential structures for
permanent rental housing only. Palo Alto Housing Corporation and Community Working
Group/Housing Authority of Santa Clara County (Opportunity Center) applied for and received
funds since the inception of the program.
Multifamil¥ Housina Program (MHP) Local Housing Trust Funds
Another component of Proposition 46, the housing bond approved by voters in November 2002,
is funding for new and existing local housing trust funds. A local housing trust fund is a public
or private partnership created to receive on-going revenues for affordable housing production.
Local revenues supporting the fund can include commercial impact fees, ongoing fundraising, or
local taxes such as Transient Occupancy Tax, as well as local government’s general funds. The
City of Palo Alto applied for and received an award of $1,000,000 in February 2004. The City’s
$1,000,000 award will be used to help subsidize a future rental housing project, either new
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construction or acquisition and rehabilitation, to be determined in the next two years by the City
Council.
Santa Clara County Affordable Housing.Fund (AHF)
The Santa Clara County Board of Supervisors created the Office of Affordable Housing in July
2002 and established a set-aside of $18.6 million for projects. One of the objectives for this fund
is to leverage funding to affordable housing projects. The Community Working Group
(Opportunity Center) received one of five awards in the first round of funding
STATE, LOCAL, PUBLIC AND PRIVATE RESOURCES FOR AFFORDABLE
HOUSING
Activity .....Rehab
X
X
X
Home
New Buyer Rental Homeless
Construction Assistance Assistance Assistance
X
X
X
x
X X
X
X
X
X
X
X
X
Acquisition
STATE, LOCAL, and PUBLIC
Commercial Housing
Fund
....Residential Housing X
Fund
State MHP X
City Owned Land
MCC Program
Housing Bond Trust X
Housing TruSt of X
Santa Clara County
Santa Clara County X
Housing Authority -
Section 8
County Department
of Social Services
Santa clara County X
Affordable Housing
Fund
PRIVATE RESOURCES
BMR Rental &
,Owner ProgramPrivate Lenders: AHP X
Nonprofit D~velopers ....X
Private Foundations
and Churches
X
Homeless
Prevention
X
X
Leveraging and Matching Requirements
The City of Palo Alto will leverage federal and private housing funds to the greatest extent
feasible consistent with the goals identified. The City will encourage housing project sponsors to
seek private financing and private grants, and to fully utilize other state and federal housing
development subsidies such as the low-income housing tax credit program. The City will also
utilize its local Affordable Housing Fund, as appropriate, to leverage federal and private housing
funds and to provide any required matching funds. Where eligible, CDBG Housing Funds could
be used as a portion of the matching requirement for federal housing programs.
Geographic Distribution
The Map attached to this report shows the location of all the proposed activities for fiscal year
2005/06. The City considers the provision of all types of housing assistance on a citywide basis
consistent with the policies of the Comprehensive Plan. The City does not have specific target
areas for housing activities, but attempts to provide housing affordable to lower-income persons
throughout the City.
There are only a few areas that are considered to have a concentration of minority populations or
low-income residents in Palo Alto. There are three census tracts in Palo Alto that have a
concentration of Asian populations, primarily in the northern part of the City and there are also
four Census tracts in the northwestern portion of the City that have a concentration of lower
income households.
In addition, Census tract 5107 in the Olive-West Meadow/Ventura area is an area of
considerably greater population and housing diversity than that which is found in most parts of
Palo Alto. The 2000 census identified this tract as having the highest minority concentration of
any non-split City tract. More than half the housing units are in multiple-unit (3+) structures,
and nearly two-thirds are renter-occupied. Block Group 2 has a large proportion of modest rental
housing, a relatively high proportion of minority and ethnic groups, and 48.6% of the households
are below the CDBG income eligibility limits. The entire tract is above HUD’s first quartile
threshold of 27.4 percent for area benefit activities.
Specific efforts have been coordinated in the City’s Community Service and Police Departments
to focus on activities and services in the Ventura neighborhood. A number of City-sponsored
programs and activities serving low- and very low-income persons have either been undertaken
or proposed. A police substation was opened in the area with the goal of improving contact with
the community.
Changes to Strategy
HUD has informed the City of Palo Alto of a change of policy relating to the timely expenditure
of CDBG funds. The federal regulatory standard is that no more than 1.5 times a jurisdiction’s
annual entitlement grant amount may remain in its letter of credit 60 days prior to the end of the
program year. HUD now intends to employ monetary sanctions against jurisdictions that exceed
the regulatory standard. Failure to meet the expenditure standard by May 1, 2006 will cause
HUD to reduce the City’s next grant by 100% of the amount in excess of 1.5 times the annual
grant.
For this reason, all funding allocations for 2005/06 were scrutinized to insure the readiness of the
program or project to move forward and expend funds in a timely manner.
This stricter enforcement of the expenditure standard will increase the difficulty in providing
funds for affordable housing since housing projects involving new construction or acquisition of
apartments typically take more time and planning and are subject to more delays than other
capital projects. It may create situations where lower priority activities will be undertaken
instead of higher priority activities simply because they are easier to accomplish and ready to
proceed.
The City Council approved the change to a two-year CDBG funding cycle beginning with the
2003/04 fiscal year and this is reflected in the amendment of the Citizen Participation Plan
adopted by the City Council in December 2002. Many cities in the Bay Area have adopted
extended CDBG funding cycles and find them to be an effective tool to streamline "process" and
provide administrative relief to both city and non-profit staff. Palo Alto’s Human Services
Division adopted a two-year funding cycle for the Human Resource Allocation Process
(HSRAP) in fiscal years 2001/02 and 2002/03. Their experience has been positive and they
continued the two-year funding cycle for the period 2005/06 through 2006/07.
Coordination of the CDBG and HSRAP funding processes is essential to the effective delivery of
local human service funding. Collaboration between the non-profit agencies and the City’s
funding sources avoids confusion, duplication of effort, and ensures that the highest identified
community needs are met. The two-year process provides the opportunity for City and non-
profit staff to undertake longer-term strategic planning and to maximize available funding
resources.
2005/2006 PROJECTS AND ACTIVITIES TO BE UNDERTAKEN
All of the projects and activities to be undertaken with the 2005/2006 CDBG cycle funding
allocation address the priority housing and community development needs identified in the
Consolidated Plan. The attached Part III "°Proposed Projects" describes on the required HUD
forms each project or service activity, the 2005/06 funds allocated, the expected project
beneficiaries, and the HUD national objective.
Housing Activities
The City of Palo Alto’s Consolidated Plan and Housing Element both emphasize the great need
for affordable housing for low and very low-income households in Palo Alto. While all types of
housing are needed in the City, the Consolidated Plan focuses on the creation and preservation of
rental housing with an emphasis on housing for very low- and low-income persons especially
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those who are homeless, at-risk of becoming homeless, those with special needs, and families
with children.
City of Palo Alto Housing Strategy
The Consolidated Plan proposes a five-year strategy to develop 125 newly constructed rental
units over the 2005-2010 planning period. The 125 units would be affordable to households in
the very low- or low-income categories and would meet a portion of the housing production
goals mandated by the Association of Bay Area Governrnents (ABAG). For this fiscal year, the
Palo Alto City Council adopted the creation of new affordable rental housing as one of their top
five priorities.
The City has made significant progress in meeting the goal of 125 newly constructed rental units
as part of the 2000-2005 Consolidated Plan strategy. The Community Working Group (CWG) is
the sponsor and joint developer (with the Housing Authority of Santa Clara County) of the
Opportunity Center for homeless individuals and families. The Opportunity Center will provide
emergency and day services for the homeless and at-risk population including showers, laundry,
lockers, clothing Closet, food, information and referral, social services and case management.
Above the ground floor services center, 89 units of transitional and permanent housing for
singles and families will be constructed. The Housing Authority of the County of Santa Clara
will act as the developer of the housing and InnVision (an experienced shelter and service
provider) will be the operator of the service center. This mixed-use facility will house existing
homeless and emergency services that are now being provided in inadequate and scattered
locations in Palo Alto and the surrounding area. The Opportunity Center is currently under
construction and the grand opening for the Center is projected for the spring of 2006.
In addition, the City assisted the Palo Alto Housing Corporation with the development of Oak
Court, a 53-unit rental housing project affordable to very low and low-income households. The
project became available for occupancy in the spring of 2005.
CDBG Housing Development Fund - $401,816
The City is proposing to acquire an affordable housing site, using a combination of City general
funds as well as CDBG funds. The site of the future project has not yet been identified but since
an acre of land in Palo Alto typically costs $3 to $5 million an acre, it is anticipated that a
commitment of all of the City’s Housing funds together with CDBG funds would be needed to
secure a site. The City Real Estate department is currently evaluating the feasibility of a site.
The CDBG funds allocated would assist with the acquisition of the site.
Due to the lengthy process of site analysis and negotiation for purchase, and HUD’s new
requirements for timely expenditure of funds, the City will evaluate the progress in acquiring the
site on September 15, 2005. If significant progress has not been made by this date, the funds will
be reallocated to other projects.
The City issued a special Request for Proposals (RFP) for the acquisition of a housing site in
order to allocate the funds that were available in this fund. The project that was selected to be
funded through the CDBG housing development fund will be undertaken by the Community
Working Group and is described below.
Community Working Group (CWG).- $1,150,000
This project is for the acquisition of an affordable housing site located at 2507-2533 Alma Street
in Palo Alto. The site consists of a 10-unit apartment complex, with 8 studio units and 2 one-
bedroom units. The project will be operated on a non-profit basis as housing for low-income ad
very-low-income residents of Palo Alto. CWG hopes to redevelop the project at a higher density
in the future, while still maintaining its level of affordability. The acquisition of existing multi-
family rental housing is a high priority in the Consolidated Plan.
Community.Housing INF., (Lytton Gardens) - $86,575
Community Housing Inc. owns and operates several senior housing facilities in Palo Alto. This
proposal is to renovate 27 bathrooms in its skilled nursing facility. The bathrooms are outdated
and are difficult to use by the frail elderly. This project will be undertaken by Economic and
Social Opportunities, who will ensure that the project is in compliance with ADA regulations.
Emergency Housing Consortium (Our House Youth Program) - $75,000
Emergency Housing Consortium provides a variety of services for homeless individuals and
families. One component of EHC’s services is the Our House Youth program, which provides
shelter and transitional housing to homeless youth. EHC is proposing an expansion that will
involve relocation, rehabilitation and new construction. Upon completion, they will provide
drop-in services, 10 beds of emergency shelter, 12 beds of transitional housing and 5 apartments
for City Year/Americorps participants.
Economic and Social Opportunities - Housing and Energy Services Program - $60,000
Economic and Social Opportunities (ESO) was established in 1970 and provides a variety of
services to the County’s low income and needy community. ESO proposes to assist a minimum
of 26 !ow-income Palo Alto individuals with home improvement services. These services are
designed to identify and improve hazardous conditions in homes, improve accessibility and use
for seniors and individuals with disabilities, improve energy efficiency and make necessary
minor repairs in order to avoid more expensive solutions in the future.
Proposed Public Service Activities
CDBG public service funds will be targeted to the following programs in fiscal year 2005/06:
$ 8,000
$23,000
$21,392
$21,000
$19,000
$24,000
$ 5,000
$ 6,000
to Emergency Housing Consortium - Emergency Shelter
to Palo Alto Housing Corporation- SRO Tenant Counseling Program
to InnVision/Clara-Mateo Alliance - Family Housing Program
to InnVision!Clara-Mateo Alliance - Adult Singles/Couples Housing Program
to Shelter Network - Mid-Peninsula Housing Program
to InnVision/Urban Ministry - Drop-In Center
to Mid-Peninsula Alano Club - MPAC Operations
to Catholic Charities - Long-Term Care Ombudsman Program
Human Services
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In addition to the CDBG public service funds, the City will provide $1,214,910 from the General
Fund in support of human services through its Human Service Resource Allocation Process
(HSRAP). The HSRAP funds, in conjunction with the CDBG public service funds, are
distributed to local non-profit agencies whose programs serve the needs of seniors, children,
youth and families, persons with disabilities, and those who are homeless, or at risk of
homelessness. A variety of supported programs provide mental and physical health care
services, tenant/landlord mediation, subsidized child care, support for victims of domestic
violence and rape, senior services, adolescent counseling, emergency food, nutritional services,
and recreational activities.
Services and Resources Targeted to Homeless Persons
The following services for persons in the Palo Alto community who are very low-income,
homeless, or at-risk of becoming homeless, are provided with supplemental funding from the
City of Palo Alto either with CDBG or HSRAP funding. The goal of all the services listed is to
prevent homelessness, help move people out of homelessness and to reduce the number of
persons below the poverty line.
Alliance for Community Care: Mental health outreach and service linkage for Palo Alto’s adult
homeless population. A casework counselor works in the Palo Alto area to help low-income,
disabled adults access existing mental health and other community resources.
City of Palo Alto Seasonal Jobs Program: Designates several temporary, seasonal employment
opportunities in various City of Palo Alto Departments, for persons who are homeless and
unemployed. The program is targeted to individuals who are motivated to improve their
situations and re-enter the work force.
Clara-Mateo Alliance Shelter: Shelter and transitional housing with casework counseling and
supportive services for homeless individuals, couples and families who are actively working
toward achieving their goals and overcoming homelessness.
Community Technology Alliance: Shelter hotline and voicemail services for homeless
individuals and families. The voicemail service helps case-managed clients attain individual
goals such as securing health care, housing or employment. A countywide housing information
and referral website was developed and is maintained to assist service providers and housing
seekers.
Emergency Housin~ Consortium: Shelter and supportive services to homeless persons at the
National Guard Armory in Sunnyvale, the San Jose Reception Center, and other transitional
housing programs in Santa Clara County operated by the agency. Supportive services include
meals, childcare, health care, information and referral, and job and life-skills training.
Shelter Network - Mid-Peninsula Housing Program: Transitional housing with supportive
services in for previously homeless families with children at Haven House and First Step for
10
Families transitional housing facilities. Also provides a shelter to serve single adults in
Redwood City.
La Comida de California: Provision of affordable, nutritious meals to Palo Alto’s elderly
population at various locations throughout the City, including: Avenidas Senior Center,
Stevenson House and Cubberley Community Center.
Ma54ield Community Clinic: Basic primary health care services and health education and
referral services to uninsured low-income and homeless individuals from the Palo Alto area.
Palo Alto Housing Corporation - SRO Hotel Tenant Counseling: Counseling and case-
management services for the low-income residents and prospective residents of single room
occupancy hotels in Palo Alto including the Barker Hotel at 439 Emerson Street. Many SRO
hotel residents have a history ofhomelessness and special needs. The program plays a vital role
in helping the residents maintain their stability and housing.
Second Harvest Food Bank: Distributes supplemental groceries and food services to very low-
income seniors and people with disabilities through the Operation Brown Bag Program.
Groceries are distributed weekly at the Ventura School site to income eligible participants.
Support Network for Battered Women: Emergency shelter and supportive services for victims of
domestic violence, primarily battered women and their children. Supportive services include
food, transportation, counseling, and legal services. Victims often must deal with issues of
homelessness in the context of a violent domestic situation.
Urban Ministry of Palo Alto/InnVision: Services for very-low income or homeless persons
including bagged groceries, hot meals, emergency shelter, information and referral, case-
management and money management (payee) programs. The Urban Ministry staffs the outdoor
morning drop-in center located behind the Red Cross building at 400 Mitchell Lane. Bagged
groceries are distributed daily at the Downtown Food Closet located at 425 Hamilton Avenue in
Palo Alto. The Urban Ministry has merged with InnVision, a very experienced provider of
services, emergency shelter and transitional housing.
Transition from Homelessness to Permanent Housing
Shelter Plus Care (S + C): The S + C program is administered through the Office of the Santa
Clara County Homeless Coordinator. It is a federal grant program that provides Section 8 rental
assistance to participating landlords on behalf of eligible tenants for a period of up to five years.
Extensive support services are a necessary and required component of the program that targets
people who are homeless and disabled. There are 18 housing units available for S + C clients in
Palo Alto.
The Barker Hotel: The Barker is owned and operated by the Palo Alto Housing Corporation
(PAHC), and has 25 units of permanent Single Room Occupancy (SRO) housing at rents
affordable to persons with incomes between 30% and 50% of the median income. Rents range
from $325 to $433 per month based on size and whether they have their own bathrooms. Five of
11
the Barker’s units are fully accessible by wheelchair users. Priority for occupancy is for persons
who are homeless (either unsheltered or sheltered), persons with disabilities, and persons with
extremely low-incomes. Eight of the units are available with tenant based Section 8 subsidies
through the Shelter Plus Care program.
Alma Place: Alma Place is located at 753 Alma Street in Palo Alto, and is also owned and
operated by the Palo Alto Housing Corporation. The project, a 106-unit single room occupancy
resident hotel, is affordable to low- and very low-income persons due to the layering of subsidies
from City Housing Reserve funds, a private bank loan, an Affordable Housing Program (AHP)
Grant, and an award of low-income housing tax credits. The studio apartments rent for $375 to
$535 per month and are available to persons earning below 40% of the median income. Ten of
the units are available with tenant based Section 8 rental subsidies through the Shelter Plus Care
program.
Haven Family House: Shelter Network of San Mateo County owns and operates this transitional
housing facility for families with children located at 260 Van Buren Road in Menlo Park.
Families reside in one and two bedroom apartments for two to four months depending on their
individual case plans and situations. Comprehensive case management, support services, and
on-site licensed childcare, plus one year of follow-up counseling are available to help families
break the cycle of homelessness.
First Step for Families: Shelter Network of San Mateo County owns and operates this
transitional housing facility for families with children located at 325 Villa Terrace in San Mateo.
This is a newly constructed facility that provides comprehensive case management, support
services, and on-site licensed childcare.
Analysis of Impediments to Fair Housing Choice
The City of Palo Alto completed an Analysis of Impediments to Fair Housing Choice on
February 6, 1996. That report identified a lack of housing options affordable to persons of low
and moderate income as the major impediment to housing choice. Housing discrimination was
also identified as an impediment, with cases based on familial status the most often reported.
However, the number of cases of discrimination against persons with physical and mental
disabilities has also been increasing.
The City of Palo Alto joined with other Santa Clara County entitlement jurisdictions to undertake
a countywide fair housing study that includes 2000 census data and was completed in January
2003. The study includes a demographic analysis, a lending analysis, a review of government
programs and policies, a survey of Santa Clara residents and service organizations, an
assessment of the delivery of fair housing services, and recommendations for new strategies.
The information from the study was incorporated in the revisions to the Analysis of Impediments
to Fair Housing Choice adopted by the City Council in May 2003.
Palo Alto plans to undertake the following actions to foster and maintain affordable housing and
to address housing discrimination during the 2005/06 fiscal year:
12
,,/Provide tenant/landlord counseling and mediation services for Palo Alto residents through
the Palo Alto Mediation Program (Project Sentinel).
-/Support the Countywide website that lists subsidized housing opportunities, wait lists and
vacancies.
v/ Provide CDBG funding to the Housing Development Fund for the potential development of a
new affordable housing site in Palo Alto.
¢" Continue to support the Human Relations Commission in their documentation and
investigation of hate crimes, and in their support of diversity, disability, and affordable
housing issues.
,/" Continue to monitor the provision of fair housing services to ensure that adequate services
are being provided, and that services are provided cost effectively.
-/ Work with the Santa Clara County CDBG entitlement cities in their effort to implement any
recommended improvements to the delivery of services on a regional basis.
,/Provide funding to a fair housing provider, funded by and selected jointly by the cities of
Palo Alto, Mountain View, and Sunnyvale to reduce discrimination in housing by:
a. Investigating cases of housing discrimination
b. Conducting consultations with persons who believe they have been discriminated
against
c.Maintaining a pool of trained testers for investigations and conducting training’s
d.Maintaining a panel of attorneys for referral and coordinating meetings for
participating attorneys
e.Running ads in the Palo Alto Weekly, San Jose Mercury News, and other media
outlets
f.Distributing fair housing brochures
g.Running public service announcements for local radio/TV broadcasts
h.Making educational presentations to the community
i.Monitoring and reporting on rental sites
j.Showing educational videos on housing discrimination on local cable TV
k.Organizing an event for National Fair Housing Month
Amendments to Plan
Prior to the submission of any substantial change in the proposed use of funds, citizens will be
provided reasonable notice of, and the opportunity to comment on, any proposed Action Plan
amendment(s).
Urgent Need Activities
In the event of a local, state or federal disaster declaration for areas within the boundaries of the
City of Palo Alto, the City reserves the right to use CDBG or other available federal funds to
abate immediate and necessary hazards. Such funds may be used for staff efforts, loans, or
outright grants to affected parties, as approved by City Council and allowable under the pertinent
Federal Guidelines.
Monitoring of Activities
13
The City of Palo Alto follows the monitoring requirements for the use of Federal funds as
directed by HUD. The City’s Department of Planning and Community Environment monitors its
housing production goals and all the activities carried out to further the goals of the Consolidated
Plan. For activities funded by CDBG and HOME programs, an annual performance report is
completed based on HUD regulations and in accordance with HUD standards. The Consolidated
Annual Performance and Evaluation Report (CAPER) is available to the Citizens Advisory
Committee and the general public for comments during a 15-day review period. This report
identifies the actual dollars expended, the beneficiaries served, and the program goals achieved.
The City requires subrecipients of CDBG funds to submit semi-annual and annual performance
reports outlining the extent to which program goals have been achieved, and the number of
beneficiaries who have been served. Program perfornaance is measured against the specific
program objectives outlined in the contract scope of services. Additionally, City staff will
monitor each subrecipient, as necessary; to insure compliance with all regulations governing
their administrative, financial, and programmatic operations, and to make sure the subrecipients
achieve their performance objectives within the prescribed schedule and budget.
Coordination
The CDBG entitlement cities (Palo Alto, Sunnyvale, Mountain View, Santa Clara, Cupertino,
Gilroy, Milpitas, San Jose), and the Urban County of Santa Clara continue to meet on a regular
schedule to discuss issues of mutual concern and to share information and strategies for
addressing affordable housing, homelessness, fair housing, and other issues of common concern.
The meetings have helped the participants better understand the County and nonprofit social
service structure within the County, and provide input into the development of the new Santa
Clara County Office of Affordable Housing and its operations.
The City of Palo Alto continues to collaborate with neighboring jurisdictions in both Santa Clara
and San Mateo County on issues relating to homelessness in northern Santa Clara County and
southern San Mateo County. The City actively participates in the Santa Clara County Housing
and Homeless Collaborative.
As a result of the Countywide Fair Housing Study, the cities of Palo Alto, Mountain View, and
Sunnyvale are jointly selected fair housing services from a single provider to serve the three
cities. In addition a Countywide Fair Housing Taskforce has been formed and includes
representatives from entitlement jurisdictions, fair housing agencies, and other non-profit
organizations. A staff person from the City of Palo Alto is the representative for the North
County cities (Mountain View, Palo Alto and Sunnyvale).
The Quality Housing and Work Responsibility Act of 1998 requires public housing authorities
(PHA’s) to develop and implement five-year plans that describe their long range goals and a
strategy for achieving the identified goals. These plans provide details about the PHA’s
operations, program participants, programs and services. The PHA is required to ensure that
their plan is consistent with any applicable Consolidated Plans for jurisdictions in which the
PHA is located. This new requirement allows for some collaborative discussions on the role of
14
the Santa Clara County Housing Authority in meeting the housing needs of low-income persons
in Palo Alto.
To ensure a coordinated approach to the City’s human service funding efforts, CDBG and
Human Services staff meet to review and discuss applications received through both the CDBG
and HSRAP processes. Additionally, a member of the Human Relations Commission serves on
the CDBG Citizens Advisory Committee to avoid duplication of effort and to assure
collaboration within Palo Alto.
15
ATTACHMENT B
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING
THE BUDGET FOR THE FISCAL YEAR 2005-06 TO TRANSFER $250,000
FROM THE COMMERCIAL HOUSING IN-LIEU FUND TO THE COMMUNIITY
DEVELOMPENT BLOCK GRANT FUND FOR THE ACQUISITION OF HOUSING
UNITS LOCATED AT 2507-2533 ALMA STREET BY THE COMMUNITY
WORKING GROUP
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION i. The Council of the City of Palo Alto finds and
determines as follows:
A. Pursuant to the provisions of Section 12 of Article III of
the Charter of the City of Palo Alto, the Council on June 20, 2005
did adopt a budget for fiscal year 2005-06; and
B. The City housing development fund is funded by Community
Development Block Grant (CDBG) funds and currently has a balance of
$900,000 to be used for the creation of affordable housing; and
C. In response to a request for proposals issued by the City
for acquisition of an affordable housing site to be funded through
the CDBG housing development fund, Community Working Group submitted
a proposal to the city to acquire a 10-unit apartment building
complex and requested funding from the City in the amount of
$i,150,000; and
D. A transfer of funds in the amount of $250,000 is needed
from the Commercial Housing In-Lieu Fund to the Housing Development
portion of the CDBG Fund to complete the affordable housing
transaction with Community Working Group; and
E. The Commercial Housing In-Lieu Fund will be reimbursed by
the CDBG program when funds become available in fiscal year 2006-
07; and
F. City Council authorization is needed to amend the 2005-06
budget as hereinafter set forth.
SECTION 2. The sum of Two Hundred Fifty Thousand Dollars
($250,000) is hereby transferred from the Commercial Housing In-
Lieu Fund 234 to the CDBG Fund 232 to appropriate non-salary
expense in the CDBG Fund.
SECTION 3. This transaction will reduce the Commercial Housing
In-Lieu Fund 234 from $6,661,663 to $6,411,663 and increase the
CDBG Fund 232 from $3,368,360 to $3,618,360.
SECTION 4. As specified in Section 2.28.080 (a) of the Palo
Alto Municipal Code, a two-thirds vote of the City Council is
required to adopt this ordinance.
SECTION 5. The Council of the City of Palo Alto hereby finds
that this project is exempt from review under the California
Environmental Quality Act pursuant to Title 14 California Code of
Regulations Section 15301 as the acquisition of existing facilities
and therefore, no environmental impact assessment is necessary.
SECTION 6. As provided in Section 2.04.330 of the Palo Alto
Municipal Code, this ordinance shall become effective upon
adoption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:City Manager
Senior Asst. City Attorney Director of Planning and
Community Environment
Director of Administrative
Services
A TTA CHMENT C
AGREEMENT NO.
BETWEEN THE CITY OF PALO ALTO AND
THE COMMUNITY WORKING GROUP, INC. FOR THE
ACQUISITION OF THE ALMA GARDEN APRTMENTS
LOCATED AT 2507-2433 ALMA STREET
THIS AGREEMENT No.is made and entered into
on , 2006, by and between the CITY OF PALO ALTO, a
California municipal corporation ("CITY"), and COM}dUNITY WORKING
GROUP, INC., a California non-profit public benefit corporation,
with offices at 948 Ramona Street, Palo Alto, California 94301
("CWG").
RECITALS
WHEREAS, the City has applied for and received funds
(~Funds") from the Government of the United States under Title I
of the Housing and Community Development Act of 1974; and
WHEREAS, CWG has requested funds to acquire a ten-unit
multi-family housing complex known as Alma Garden Apartments
(the "Project") located at 2507-2533 Alma Street, Palo Alto,
California; and
WHEREAS, CWG is a private non-profit organization that
serves the needs of the homeless and those at risk of becoming
homeless in the Midpeninsula area through the development and
operation of housing and services.
WHEREAS, City wishes to lend funds to CWG and defer
the loan if certain conditions are met by CWG for the purposes
set forth in this Agreement, and any exhibits thereto;
WHEREAS, City has approved and authorized the
provision of up to One Million One Hundred Fifty Thousand
Dollars ($1,150,000) drawn from fiscal year 2005/06 and fiscal
year 2006/07 CDBG funds to Borrower for the purposes and under
the terms contained herein;
WHEREAS, pursuant to the provisions of Title I of the
Housing and Community Development Act of 1974, as amended, CITY
appropriated CDBG funds under its fiscal years 2005-2006 and
2006-2007 budgets in the CDBG housing development funds for the
purpose of acquiring an affordable housing site in Palo Alto
that meets the requirements of the CDBG program. The City
060302 syn 0120102
appropriated the funds in the CDBG housing development fund to
CWG for the purpose of acquiring an affordable housing site.
~HEREAS, there is a severe shortage of affordable
housing suitable for persons with very-low and low incomes in
Palo Alto and nearby areas. The Project will result in the
creation of ten (i0) housing units, made available at affordable
rents to those with very-low incomes as defined by the
Department of Housing and Urban Development ("HUD").
WHEREAS, the expenditure of funds for site acquisition
costs for lower income housing is an eligible activity under the
CDBG Program, and site acquisition costs are eligible for
reimbursement under CITY’s Housing Reserve Guidelines. The
Project is consistent with CITY’s affordable housing goals as
outlined in CITY’s HUD Consolidated Plan; and
WHEREAS, CWG and CITY desire under this Agreement to
arrange for a loan from CITY to CWG to cover a portion of the
acquisition expenses that CWG will incur in purchasing the
Project site.
WHEREAS, the City neither warrants or makes any
representations as to the quality, method or adequacy of the
work products or services to be provided to Borrower under the
terms and conditions of this Agreement, except with respect to
compliance with Federal Regulations;
IN CONSIDERATION
agreements specified herein,
provisions, the parties to
follows:
OF the mutual covenants and
and subject to its terms and
this Agreement hereby agree as
ARTICLE i -AGREEMENT COORDINATION
i.i CITY
CITY’s City Manager shall represent CITY for all
purposes under this Agreement. CITY’s Director of Planning and
Community Environment is designated by the City Manager as the
project manager, and his designee shall supervise the progress
and execution of this Agreement.
1.2 CWG
The board president of CWG shall represent CWG for all
purposes under this Agreement and, as the project director for
060302 syn 0120102
CWG, shall
Agreement.
supervise the progress and execution of this
ARTICLE 2 -PURPOSE OF AGREEMENT
The purpose of this Agreement is to set forth the
respective duties and responsibilities of CITY and CWG regarding
the CDBG Program funds to be provided by CITY to CWG hereunder
for CWG’s site acquisition activities related to the Project.
ARTICLE 3 -PROVISION OF FtINDS
3.1 Payment of funds for site acquisition expenses
3.1.1 CITY shall pay to CWG the sum of One Million
One Hundred Fifty Thousand Dollars ($1,150,000), to be used in
accordance with the terms, covenants, provisions and conditions
of this Agreement, the CDBG Program, and City’s Housing Reserve
Guidelines. CWG shall execute and deliver a promissory note in
favor of CITY (the "Note"), as set forth in Exhibit "B", in the
amount of One million One Hundred Fifty Thousand Dollars
($1,150,000), to secure the performance of all terms, covenants,
provisions and conditions of this Agreement. Execution thereof
shall occur prior to any disbursement of funds under this
Agreement. The Note shall bear interest, and periodic payments
shall be due as provided in the Note. The Note shall be secured
by a deed of trust ("Deed of Trust") on the Project for the
benefit of CITY, as set forth in Exhibit "C" CITY shall
execute and record such subordination agreements with respect to
the deed of trust as may be required by HUD and other funding
sources.
3.1.2 If the initial closing of the Section 811
Capital Advance Grant does not occur on or before December 31,
1998, including any extension thereof approved by the project
manager, this Note shall be immediately due and payable.
Notwithstanding the foregoing, if CWG at any time fails to
comply with the terms, covenants, provisions and conditions of
this Agreement or the Note, the Note shall be immediately due
and payable.
3.2 Additional construction and development expenses
The maximum amount payable under this Agreement for
site acquisition expenses shall be One Million One Hundred Fifty
Thousand Dollars ($i,150,000).In the event, for any reason,
the amount payable by CWG to any and all sources for the
acquisition expenses for the Project exceeds One Million One
060302 syn 0120102
Hundred Fifty Thousand Dollars ($1,150,000), CWG shall be solely
responsible to pay all such excess expenses.
3.3 Disbursement of funds
CWG shall open an escrow, and all loan proceeds to be
disbursed for the purchase price of the Property and necessary
closing costs shall be placed in escrow with the Chicago Title
Insurance Company ("CTI"), !i0 W. Taylor Street, San Jose, 95110
under escrow number 05-98200713, together with all necessary
documents of title, written escrow instructions, and other
pertinent information. CITY will deposit the sum of One Million
One Hundred Fifty Thousand Dollars ($i,150,000), by negotiable
instrument payable to CTI, into escrow, for a portion of the
approximately One Million Seven Hundred Thirty-Six Thousand
Three Hundred Dollars ($1,736,300) purchase price of the
Property. CWG will deposit funds from other sources for the
balance of the purchase price and closing costs as an express
condition hereof, and CWG’s failure to do so shall render this
Agreement null and void.
3.4. Title insurance
At the close of escrow, CWG, at its own cost and
expense, shall secure an ALTA extended coverage lender’s policy
of title insurance, or other form of title insurance acceptable
to CITY, for an amount not less than the amount of the actual
purchase price of the Property, and insuring against any title
defects as would prevent the construction and development of the
Project. The policy will name CITY as insured and insure CWG’s
right, title, and interest in the Property and the Project and
CITY’s lien therein, and, promptly after the close of escrow,
CWG shall provide the original of the same to the project
manager or his designee.
ARTICLE 4 -CWG’S STATEMENT OF WORK
4.1 General
As express conditions of acceptance of payment of
$1,150,000 in CDBG funds from CITY under this Agreement, CWG
agrees to acquire, in fee simple,that certain real property
located at 2507-2533 Alma Street, Palo Alto, County of Santa
Clara, State of California (APN 132-25-054 and APN 132-25-044)
(~Property") as more fully described in Exhibit ~A", in
accordance with all applicable requirements and regulations of
HUD and the CDBG Program, including those HUD regulations set
060302 syn 0120102
4
forth in Part 570 of Title 24 of the Code of Federal Regulations
("CFR"), as amended.
4.2. Project budget, uses of CITY funds and final
accounting
The funds provided under this Agreement and the Note
are being advanced by CITY to pay a portion of the actual
purchase price of the Property. CITY and CWG anticipate that
the remaining portion of the purchase price will be financed
through a conventional bank mortgage. A projected budget and
sources of funds is attached as Exhibit
4.2.1 Eligible uses of CDBG Program funds are the
costs of site acquisition.
4.2.2 If CITY determines that the entire
$1,150,000 of funding advanced by CITY to CWG under this
Agreement is not necessary to pay for reasonable, necessary and
eligible site acquisition costs as described herein and as
approved in advance by CITY, then CWG shall refund the excess
amount of funds, as determined by CITY, promptly upon the demand
of CITY and the principal balance of the Note shall be reduced,
accordingly.
4.3 Use, occupancy and rent restrictions
CWG shall operate and maintain the Project as a
permanent rental housing complex for occupancy by very-low and
low-income households at affordable rents as defined by HUD
regulations for the CDBG Program for a period of fifty-five (55)
years from the date of execution of the Agreement that meet
very-low and low-income limits as published annually by HUD.
CWG’s compliance with this Section 4.3 is of particular
importance to CITY and the main purpose for which CITY is making
the Loan to CWG. In the event of any breach of this Section 4.3
or of any other covenant or restriction set forth in this
Agreement, CITY shall have the right to exercise all of the
right and remedies, and to maintain any action at law or suits
in equity or other real property proceedings, including, without
limitation, specific performance, to enforce the covenants and
restrictions and the curing of any breach or violation hereof.
4.4 Records and reports
CWG shall maintain on a current basis complete
records, including books of original entry, source documents
supporting accounting transactions, service records, a general
060302 syn 0120102
ledger, canceled checks, time sheets, and related documents and
records to assure proper accounting of funds and performance of
the terms of this Agreement. CWG shall furnish any and all
information and reports which may be required by CITY and HUD in
connection with this Agreement. CWG shall further permit access
to its books, records and accounts by the representatives and
employees of CITY and HUD during regular business hours, for the
purpose of investigation or audit to ascertain compliance with
all applicable laws, regulations, rules and orders and for the
purpose of evaluating and monitoring CWG’s compliance with the
provisions of this Agreement. All such records shall be
retained by CWG and made available to CITY and HUD upon request
for review or audit for a period of at least five (5) years
following the expiration or termination of this Agreement.
4.5 Program indome - CDBG funds
Program income is defined under the laws and
regulations governing the CDBG Program, including the provisions
set forth in 24 CFR 570.500(a). CWG shall maintain separate
accounting records and bank accounts for any CDBG Program income
generated under this Agreement or from the Project. CWG shall
report and return all CDBG Program income generated under this
Agreement or from the Project to CITY in accordance with all CWG
and HUD laws and regulations, including but not limited to those
set forth in 24 CFR 570.504, as amended. This Section 4.5 shall
apply only to CDBG funds.
4.6 Uniform administrative requirements - CDBG funds
CWG, as a private non-profit organization receiving
CDBG Program funds as a subrecipient, shall comply with the
Uniform Administrative Requirements as set forth in 24 CFR
570.502(b). This Section 4.6 shall apply only to CDBG funds.
4.7
CDBG funds
Additional requirements and federal assurances -
CWG shall comply with the additional terms and
conditions of this Agreement and the federal assurances as set
forth in Exhibit "E" This Section 4.7 shall apply only to CDBG
funds.
4.8 Insurance
CWG, at its sole cost and expense, shall obtain and
maintain during the term of this Agreement, insurance provided
by responsible companies authorized to engage in the offering of
060302 syn 0120102
6
insurance services in California in such amounts and against
such risks as shall be satisfactory to City’s risk manager,
including, without limitation, worker’s compensation, employer’s
liability,commercial general liability, comprehensive
automobile liability, personal injury and property damage
insurance,as set forth in Exhibit "F", as appropriate, insuring
against all liability of CWG and its directors, officers,
employees,agents, and representatives arising out of or in
connection with the acquisition, construction and development of
the Project or CWG’s performance or nonperformance under this
Agreement.
ARTICLE 5 - TERM AND TERMINATION OF AGREEMENT
This Agreement shall commence and be effective on the
date of its execution by CITY, and shall continue for the period
of fifty-five (55) years unless earlier terminated as provided
in this Agreement. If site acquisition of the Property does not
occur on or before April i, 2006, including any extension
thereof approved by the project manager, this Agreement may be
terminated by CITY. Prior to the completion of the site
acquisition, either party may terminate this Agreement for
convenience in accordance with 24 CFR 85.44, as amended. CITY
may immediately suspend or terminate this Agreement, in whole or
in part, if CONTRACTOR materially fails to comply with any term,
provision, covenant or condition of this Agreement, or with any
of the rules or regulations referred to herein. In such event,
CITY may also pursue any other remedies provided by law,
including those specified under 24 CFR 85.43, as amended. In
the event that this Agreement is terminated for convenience or
cause, all funds provided to CWG, at the sole option of the
project manager and notwithstanding any other provisions of this
Agreement, the Note or Deed of Trust, shall become due and
payable to CITY upon demand of CITY.
ARTICLE 6 -CONFLICT OF INTEREST
CWG covenants that it shall comply with the provisions
of 24 CFR 570.611, as amended, concerning conflicts of interest.
Specifically, except for the use of CDBG funds to pay salaries
and other related administrative or personnel costs, no person
who is an employee, agent, consultant, officer or official of
CWG who exercises or has exercised any functions or
responsibilities concerning the activities under this Agreement,
or who is in a position to participate in a decision making
process or gain inside information with regard to such
activities, may obtain a personal or ~financial interest or
benefit from any such activity, or have an interest in any
060302 syn 0120102
7
contract, subcontract, or agreement with respect thereto, or the
proceeds thereunder, either for him or herself or for those with
whom he or she has family or business ties, during his or her
tenure or for one year thereafter.
CWG further covenants that it presently has no
interest and shall not acquire any interest, direct or indirect,
financia! or otherwise, which would conflict in any manner or
degree with the performance of the services hereunder. CWG also
covenants that, in the performance of this Agreement, no
subcontractor or person having such interest shall be employed
by CWG. In addition, CWG certifies that no one who has or will
have any financial interest under this Agreement is an officer
or employee of CITY.
ARTICLE 7 -ASSIGNMENT PROHIBITED
This Agreement is for the personal services of CWG and
shall not be assigned without the express prior written consent
of CITY. Any attempt to do so otherwise shall be void and, at
the sole discretion of CITY, a default of this Agreement and the
Note may be declared by CITY.
ARTICLE 8 -NOTICES
All Notices to CITY or CWG shall be made in writing
and shall be deemed to have been given or made if personally
delivered, placed in the United States certified mail, return
receipt requested, postage prepaid, or delivered by courier
service addressed as follows:
To CITY:City of Palo Alto
Office of City Clerk
250 Hamilton Avenue
Palo Alto, CA 94301
Copy to:City of Palo Alto
Director, Department of Planning
& Community Environment
250 Hamilton Avenue
Palo Alto, CA 94301
To CWG:Community Working Group
555 Bryant St., PMB #321
Palo Alto, CA 94301
Attention: Board President
060302 syn 0120102
ARTICLE 9 -MISCELLANEOUS
9.1 Neither the failure nor the delay on the part of
CITY to exercise any right, power, or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege hereunder preclude
any other or further exercise thereof or the exercise of any
other right, power, or privilege.
9.2 Nothing contained in this Agreement is intended
to, or shall be construed in any manner, as creating or
establishing the relationship of employer and employee between
the parties. CWG shall at al! times remain an independent
contractor with respect to the services to be rendered or work
to be performed, or both, under this Agreement. The terms of
this Agreement shall in no way be construed to create a
partnership, joint venture or any other joint relationship
between CITY and CWG. CWG lacks any authority or power to pledge
the credit of CITY or incur any obligation in the name of CITY.
This Agreement shall not be construed or deemed to be an
agreement for the benefit of any third party, and no third party
shall have any claim or right of action hereunder for any cause
whatsoever.
9.3 This Agreement constitutes the entire agreement
of the parties concerning its subject matter, and there are no
other oral or written agreements of the parties not incorporated
in this Agreement. Any amendment to this Agreement shall be
binding upon the parties, provided such amendment is set forth
in a writing signed by the parties. The city manager is
authorized to execute any amendments to this Agreement,
including any amendments which may be required of CWG or CITY by
HUD, and confer any consents that must be provided by CITY.
9.4 The covenants, agreements, terms, and conditions
of this Agreement shall inure to and be binding on the
successors and assigns of the parties. Any provision of this
Agreement which is characterized as a covenant or a condition
shall be deemed both a covenant and a condition. If any
provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, illegal, void, or
unenforceable in any respect, the validity of all other
provisions herein shall remain in full force and effect.
9.5 This Agreement, the Note and the Deed of Trust
shall be deemed contracts made under the laws of the State of
California, and for the purposes hereof shall be governed and
construed by and in accordance with the laws of the State of
060302 syn 0120102
9
California. All exhibits referred to in this Agreement and any
addenda, appendices, attachments, and schedules which may, from
time to time, be referred to in any duly executed amendment
hereto are by such reference incorporated in this Agreement and
shall be deemed to be part of this Agreement. This Agreement may
be executed in any number of counterparts, each of which shall
be an original, but all of which together shall constitute one
and the same instrument. The paragraph headings are not a part
of this Agreement and shall have no effect upon the construction
or interpretation of any part of this Agreement.
9.6 In the event that suit is brought by either
party, the parties agree that trial of such action shall be
vested exclusively in the state court of California in the City
of San Jose, County of Santa Clara, or in the United States
District Court for the Northern District of California in the
City of San Jose. The prevailing party in any action brought to
enforce the terms of this Agreement or arising out of this
Agreement may recover its reasonable costs and attorneys’ fees
expended in connection with such an action from the other party.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first above written.
ATTEST:CITY OF PALO ALTO
City Clerk
APPROVED AS TO FORM:
Mayor
COMMUNITY WORKING GROUP, INC.
Senior Asst. City Attorney
Name:
Title:
Name:
Title:
Taxpayer Identification
No. 77-0446309
APPROVED:
Assistant City Manager
Director of Planning and
Community Environment
Risk Manager
060302 sy’n 0120102
10
Attachments:
EXHIBIT "A":
EXHIBIT ~B"
EXHIBIT "C":
EXHIBIT ~D":
EXHIBIT "E":
EXHIBIT "F":
LEGAL DESCRIPTION OF PROPERTY
PROMISSORY NOTE SECURED BY SHORT FORM DEED OF
TRUST AND ASSIGNMENT OF RENTS
DEED OF TRUST AND ASSIGNMENT OF RENTS
ALMA GARDEN APARTMENTS BUDGET
FEDERAL ASSURANCES WITH RESPECT TO CDBG F~S
INSURANCE REQUIREMENTS
060302 syn 0120102
11
STATE OF CALIFORNIA )
COUNTY OF SANTA CLARA )
On , 2006, before me,. ,
a Notary Public in and for said County and State, personally
appeared , personally known to me to
be the person whose name is subscribed to the within 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
County and State
060302 syn 0120102
12
STATE OF CALIFORNIA )
COUNTY OF SANTA CLARA )
On , 2006, before me,,
a Notary Public in and for said County and State, personally
appeared , personally known to me to
be the person whose name is subscribed to the within 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
County and State
060302 syn 0120102
13
STATE OF CALIFORNIA )
) ss.
COUNTY OF SANTA CLARA )
On , 2006, before me,,
a Notary Public in and for said County and State, personally
appeared , personally known to me to be
the person whose name is subscribed to the within instrument and
acknowledged to me that she executed the same in her authorized
capacity as Mayor of the City of Palo Alto, a municipal
corporation, and that by her signature on the instrument
acknowledged that said municipal corporation executed the same.
WITNESS my hand and official seal.
Notary Public in and for said
County and State
060302 syn 0120102
14
Title No. 05-98200713-A-MC
Locate No. CACTI7743-7743-2982-0098200713
LEGAL DESCRIPTION
EXHI BIT "A"
THE LAND REFERRED TO HEREIN BELOW IS SI-I-UATED IN THE CITY OF PALC) ALTO, COUNTY OF SANTA
CLARA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
Lots 23 and 24, in Block 2, as shown on the Map of Stanford City recorded on May 3, 1910 in Book "M" of
Maps, Page 97, Santa Clara County Records.
APN: 132-25-054
2
CLTA Preliminary Report Form (11/!7/04)
"lqtle No. 05-982OO714-A-MC
Locate No. CACTI7743-7743-2982-0098200714
LEGAL DESCRIPTION
EXHIBIT "A"
THE LAND REFERRED TO HEREI"N BELOW 1"S s[q-UATED "fN THE CD’Y OF PALO ALTO, COUNTY OF SANTA
CLARA, STATE OF CA~FORN~, AND fS DESCRIBED AS FOLLOWS:
Lots 21, 22, in Block 2, as shown on the map of Stanford City recorded on May 3, 1910 in Book "M" of Maps,
page 97, Santa Clara County Records.
APN: 132-25-044
2
CLTA Preliminary Report Form (11117104)
EXHIBIT B
PROMISSORY NOTE
SECURED BY
DEED OF TRUST AND ASSIGNMENT OF RENTS
$1,150,000 Date:
Palo Alto, California
FOR VALUE RECEIVED, the Community Working Group, Inc., a
corporation duly organized and existing under the Nonprofit
Corporation Law of the State of California ("BORROWER"),
promises to pay to the City of Palo Alto, a California municipal
corporation ("CITY"), or order, the principal sum of One Million
One Hundred Fifty Thousand Dollars ($1,150,000) at the Revenue
Collections office of the City of Palo Alto, First Floor, 250
Hamilton Avenue, P. 0. Box 10250, Palo Alto, CA 94303, or at
such other place as CITY may from time to time designate, with
interest from the date of this PROMISSORY NOTE SECURED BY DEED
OF TRUST AND ASSIGNMENT OF RENTS ("Note"), until paid, at the
rate of three percent (3%) per year on the unpaid principal
balance.
This Note is secured by a deed of trust entitled "DEED OF TRUST
AND ASSIGNMENT OF RENTS" ("Deed of Trust") of even date herewith
on BORROWER’s equitable interest in real property located at
2507-2533 Alma Street, Palo Alto, California, Assessor’s Parcel
Numbers 132-25-054 and 132-25-044 ("Property").
This Note is made in connection with an agreement entitled
"AGREEMENT BETWEEN THE CITY OF PALO ALTO AND COMMtINITY WORKING
GROUP, INC. FOR THE ACQUISITION OF THE ALMA GARDEN APARTMENTS
LOCATED AT 2507-2533 ALMA STREET, PALO ALTO" ("Agreement").
Under the Agreement, BORROWER agrees to acquire and operate the
Property as a multi-family housing complex affordable to
households with very-low and low incomes as defined by HUD.
All amounts advanced under this Note, at the option of CITY,
shall become immediately due and payable upon the occurrence of
an Event of Default, as such term is defined in the Agreement.
Payment in full of the unpaid principal balance shall be made by
BORROWER not later than fifty (55) years after the acquisition
of the site.
060301 syn 0120104
BORROWER, any endorser of this Note, and any others who may
become liable for all or a part of the obligations evidenced by
this Note may prepay all or any portion of the principal sum of
this Note, without penalty. Any and all payments made hereunder
shall be credited, first, on the interest then due and,the
remainder, on the principal balance, and interest on the
principal balance so credited shall thereupon cease.
BORROWER, any endorser of this Note, and any others who may
become liable for all or any part of the obligations evidenced
by this Note or this Note, as amended, hereby individually waive
demand, presentment for payment, demand and protest, notice of
protest, demand, and of dishonor and non-payment, and consent to
any number of extensions or renewals of time hereof. Any such
extensions or renewals may be made without notice to any of the
obligated parties and without affecting their liability.The
pleading of any statute of limitations as a defense to any
demand against BORROWER is expressly waived by BORROWER.If
BORROWER consists of more than one person or individual,each
person or individual shall be jointly and severally liable under
this Note.
BORROWER shall not further encumber, mortgage or subject the
Property, or the real property on which it is located, or any
interest therein, to a deed of trust, mortgage, indenture, or
other document of legal encumbrance (individually, "Encumbrance"
and jointly, "Encumbrances") without the prior written consent
of CITY.
Unless CITY expressly agrees otherwise, in writing, any
Encumbrance affecting the Property shall provide that, in the
event of any default or breach by BORROWER under any Encumbrance
entitling any party thereunder to accelerate the indebtedness
secured thereby and foreclose upon the Property, CITY shall have
the right, but not the obligation, to (i) cure the default prior
to the completion of any foreclosure and reinstate the
Encumbrance, or (2) pay the total unpaid indebtedness secured by
such Encumbrance, in which event, such Encumbrance shall be
released, canceled, or otherwise reconveyed.
Any amounts expended by CITY under the contingencies set forth
in parts (i) or (2) of the preceding paragraph shall be
reimbursed by BORROWER upon demand of CITY therefor, and, in any
event, such amounts shall bear interest at the maximum rate
permitted by Article XV, Section 1(2) of the California
060301 syn 0120104
2
Constitution, as amended, from the date such amounts were
advanced by CITY until paid in full by BORROWER. All such
amounts, including interest and any penalty authorized under the
Agreement, this Note, or the Deed of Trust, shall be added to
the principal of this Note. The approval by BORROWER of any
Encumbrance, and the placing of a security interest therefor on
the Property, or any portion thereof, not containing the
provisions of the preceding paragraph and this paragraph shall
constitute a default of this Note.
If any default is made hereunder, BORROWER further promises to
pay reasonable attorneys’ fees and costs and expenses incurred
by CITY in connection with any such default or any other action
or other proceeding brought to enforce any of the provisions of
this Note. CITY’s right to such fees shall not be limited to or
by its representation by staff attorneys of CITY’s Office of the
City Attorney, and such representation shall be valued at the
customary and reasonable rates for private sector legal
services.
The relationship of CITY and BORROWER evidenced by this Note
shall be deemed to be one of creditor and debtor and not of
partnership or joint venture.
This Note may not be modified or amended except by an instrument
in writing which expresses such intention of the parties sought
to be bound thereby, and such writing shall be firmly attached
to this Note and made a part thereof.
Any failure of CITY or other holder to exercise any rights under
this Note shall not constitute a waiver of such rights or of any
other rights under this Note.
This Note shall be governed by and construed in accordance with
the laws of the State of California.
To the extent assignment of this Note is permitted by CITY, the
terms of this Note shall apply to, inure to the benefit of, and
bind all of the parties thereto, their heirs, successors and
assigns.
All terms in this Note which are capitalized shall bear the
meanings set forth in the Agreement.
060301 syn 0120104
3
EXECUTED BY BORROWER by its duly authorized
representative in Palo Alto, County of Santa Clara, State of
California, on the date first above written.
COMMUNITY WORKING GROUP
By:
Title:
By:
Title:
060301 sya 0120104
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
EXHIBIT C
City of Palo Alto
Office of City Attorney
250 Hamilton Avenue
Palo Alto, CA 94301
RECORDED WITHOUT CHARGE
GOVERNMENT CODE §§ 6103, 27383
SPACE ABOVE THIS LINE FOR RECORDER’S USE
DEED OF TRUST AND ASSIGNMENT OF RENTS
APN 132-25-054 and 132-25-044
This Deed of Trust, made this __ day of ,2006, between the COMMUNITY WORKING
GROUP, INC., a California corporation duly organized and existing under the Nonprofit Corporation Law of the
State of California ("Trustor"), located at 948 Ramona Street, Palo Alto, California 94301, Chicago Title Company,
a California corporation ("Trustee"), and the CITY OF PALO ALTO, a California municipal corporation
("Beneficiary"),
Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST,
WITH POWER OF SALE, that property in Santa Clara County, California, described as:
See Exhibit "A," attached hereto and incorporated herein by this reference.
In the event the herein described property or any part thereof, or any interest therein is sold, agreed to be
sold, conveyed or alienated by the Trustor, or by the operation of law or otherwise, all obligations secured by
this instrument, irrespective of the maturity dates expressed therein, at the option of the holder hereof and
without demand or notice shall immediately become due and payable.
Together With the rents, issues and profits thereof, SUBJECT, HOWEVER, to the right, power and authority
hereinafter given to and conferred upon Beneficiary to collect and supply such rents, issues and profits.
For the Purpose of Securing:
(1) Performance of each agreement of Trustor herein contained. (2) Payment of the indebtedness evidenced by one
promissory note ("note") of even date herewith, and any extension or renewal thereof, in the principal sum of
$1,150,000 executed by Trustor in favor of Beneficiary or order. (3) Payment of such further sums as the then
record owner of said property hereafter may borrow from Beneficiary, when evidenced by another note (or notes)
reciting it is so secured. (4) Performance by Trustor of its obligations arising under that certain contract entitled
"Agreement between The City of Palo Alto and Community Working Group, Inc. for the acquisition of the Alma
Garden Apartments located at 2507-2533 Alma Street, Palo Alto," dated . .....
("Agreement"), and recorded on ., 2006, as Instrument No ........~n
Book Page of Official Records, Santa Clara County, California.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to
complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or
destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply
with all laws affecting said property, or requiring any alterations or improvements to be made thereon; not to
3_
060301 syn 0120103
commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property
may be reasonably necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any
indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the
entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure
or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers
of Beneficiary; and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a
reasonable sum, in any such action or proceeding in which Beneficiary may appear, and in any suit brought by
Beneficiary or Trustee to foreclose this Deed of Trust.
(4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said
property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee but
without obligation so to do and without notice to or demand upon Trustor and without 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 said property for such purposes;
appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee pay, purchase, contest or compromise any 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 his or her reasonable fees, costs and expenses.
(5) To pay immediately a’nd 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 Beneficiary
not to exceed the maximum allowed by law at the time when said statement is demanded.
(6) That any award of damages in connection with any condemnation for public use of or injury to said property or
any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received
by it in the same manner and with the same effect as above provided for disposition of proceeds of fire or other
insurance.
(7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right
either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay.
(8) That at any time or from time to time, without liability therefor and without notice, upon written request of
Beneficiary and presentation of this Deed of Trust and said note for endorsement, and without affecting the personal
liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said
property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any
extension agreement or any agreement subordinating the lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon
surrender of this Deed of Trust and said 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." Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of Trust (unless directed in such request to retain them).
(10) That as additional security Trustor hereby gives to and confers upon Beneficiary the right, power and authority,
during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving onto Trustor
the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of
060301 syn0120103
any agreements hereunder, to collect and retain such rents, issues, and profits as the become due and payable. Upon
any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be
appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter
upon and take possession of said property or any part thereof, in its own name sue for or otherwise collect such
rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such
order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of
such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of
default hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness secured hereby, or in performance of any
agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to
Trustee of written declaration of default and demand for sale and of written notice of default and of election to
cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit
with Trustee this Deed of Trust, said note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of default, and
notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said
property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such
order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States,
payable at time of sale. Trustee may postpone sate of all or any portion of said property by public announcement at
such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property
so sold, but without any covenant or warranty, express or 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 such 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.
(12) That Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time,
by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder,
which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of
the county or counties where said property is situated, shall be conclusive proof of proper substitution of such
successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title,
estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and
Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new
Trustee.
(13) That this Deed 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 pledges, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust,
whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number
includes the plural.
(14) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public
record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed
of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by
Trustee.
(15) That Trustor shall not sell, convey, transfer, hypothecate or alienate the real property described herein, or any
part thereof, or any interest therein, or shall not be divested of title or any interest therein in any manner or way,
whether voluntarily or involuntarily, without the written consent of Beneficiary being first had and obtained, or if
Trustor shall fail to make any payments due under the note secured by this Deed of Trust, or fail to perform any
other obligation under this Deed of Trust or note secured hereby, or any other Deed of Trust encumbering the
3
060301 syn 0120103
subject property, then Beneficiary shall have the right, at its option, to declare any indebtedness or obligations
secured hereby, irrespective of the maturity date specified in any notes evidencing the same, immediately due and
payable.
(16) That Trustor shall promptly pay when due the payments of interest, principal and all other charges accruing
under any superior or prior trust deed, mortgage, or other instrument encumbering the subject property. Beneficiary
shall have the right, but not the obligation, to cure any defaults on any superior or prior deed of trust or note secured
thereby and upon curing such default Trustor shall immediately reimburse Beneficiary for all costs and expenses
incurred thereby, together with interest thereon at the maximum legal rate permitted to be charged by non-exempt
lenders under the Constitution of the State of California, and Trustor’s failure to pay any such amount on demand
shall be a default hereunder. Trustor’s breach or default of any covenant or condition of any superior or prior trust
deed, mortgage or other instrument encumbering the Property shall be a default under this Deed of Trust.
(17) That Trustor further acknowledges in the event of a default by Trustor on account of the note secured hereby,
and the expiration of any cure period provided therein, then Beneficiary at its sole option shall have the right to
declare the note secured hereby immediately due and payable.
The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder
be mailed to it at its address hereinbefore set forth and another copy be mailed to the City of Palo Alto, Planning
Department, Director of Planning and Community Environment, P. O. Box 10250, Palo Alto, CA 94303.
COMMUNITY WORKING GROUP, INC.
By:
Title:
By:
Title:
STATE OF CALIFORNIA )
) SS.
COUNTY OF )
On ,2006, before me,a Notary Public in and for
said County and State, personally appeared personally known to me to be the
person whose name is subscribed to the within 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.
060301 syn 0120103
Notary Public in and for said
County and State
4
STATE OF CALIFORNIA )
) SS.
COUNTY OF )
On ...........2006, before me,a Notary Public in and for
said County and State, personally appeared personally known to me to be the
person whose name is subscribed to the within 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
County and State
060301 syn 0120103
EXHIBIT D
ALMA GARDEN APARTMENTS PROJECT COSTS
AND PROPOSED SOURCES OF FUNDS
PROJECT COSTS
Purchase Price $1,736,300
Escrow Fees $17,363
Relocation Contingency $10,000
Environmental Review"$15,000
Legal Consultation $10,000
Total Project Costs $1,788,633
SOURCES OF FUNDS
City of Palo Alto CDBG Housing $900,000
Development Fund
City of Palo Alto FY 2006-2007 CDBG $250,000
Conventional Bank Mortgage $683,663
Total Funds $1,788,663
EXHIBIT E
FEDERAL ASSURANCES WITH RESPECT TO CDBG FUNDS
In providing the services and work set forth in the attached Agreement,
Contractor agrees to comply with, adhere to, and take all necessary measures to
effectuate, the following covenants and CDGB assurances:
1.Civil rights and non-discrimination laws.
a.Title VI of the Civil Rights Act of 1964, as amended, and
regulations issued pursuant to 24 CFR Part 1, which provides that no person in the United
States shall on the ground of race, color, or national origin, be excluded from
participation in, be denied the benefits of, or be otherwise subjected to discrimination
under any program or activity funded, in whole or in part, with federal financial
assistance.
b.Title VIII of the Civil Rights Act of 1968, as amended, and
implementing regulations when published, which provides for the administration of all
programs and activities relating to housing and community development in a manner to
affirmatively further fair housing.
c.Section 109 of the Housing and Community Development Act of
1974, as amended, and regulations issued pursuant to 24 CFR Part 570, which provides
that no person in the United States shall on the ground of race, color, national origin or
sex, be excluded from participation in, be denied the benefits of, or be subjected to
discrimination under, any program or activity funded, in whole or in part, with federal
financial assistance.
d.Section 3 of the Housing and Urban Development Act of 1968, as
amended, and regulations issued pursuant to 24 CFR Part 35, which requires that to the
greatest extent feasible opportunities for training and employment be given to persons
with low and moderate incomes residing in the Project area benefited by federal financial
assistance, and contracts for work in connection with the Project shall be awarded to
eligible business concerns which are located in, or owned in substantial part by persons
residing in, the vicinity of the Project.
e. Section 504 of the Rehabilitation Act of 1973, as amended, and
implementing regulations when published.
f. The Age Discrimination Act of 1975, as amended, and
implementing regulations when published.
g. The Americans with Disabilities Act of 1990, as amended, and
implementing regulations when published.
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h.The "American Standard Specifications for Making Buildings and
Facilities Accessible to and Usable by, the Physically Handicapped," Number A- 117.1-R
1971, subject to the exceptions contained in 41 CFR § 101-19.604, which requires every
building or facility (other than a privately owned residential structural) designed,
constructed, or altered with funds provided under 24 CFR 570 to be accessible to persons
with physical disabilities.
i.The Housing and Community Development Act of 1977, as
amended, and the Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970, as amended, and the implementing regulations when published.
j.The uniform administrative requirements (including the cost and
procurement principles) set forth in 24 CFR Part 85 and OMB Circulars A-87, A-110, A-
122, and A-133, which relate to the acceptance and use of federal funds by non-profit
organizations, and which require an agency receiving in excess of $300,000 in federal
financial assistance to obtain at its own expense an audit that complies with the
requirements of OMB Circular A- 133.
k.Executive Order 11063 and regulations issued pursuant to 24 CFR
Part 107, which provides for equal opportunity in housing and non-discrimination in the
sale, leasing, rental or other disposition of housing built with federal financial assistance.
1.Executive Order 11246, as amended by Executive Order 11375
and Executive Order 12086, and regulations issued pursuant to 24 CFR Part 130 and 41
CFR Part 60, which provide that no person shall be discriminated against on the basis of
race, color, religion, sex, or national origin in all phases of employment during the
performance of federally-assisted construction contracts.
Contractor further covenants with respect to the foregoing assurances that:
A. In the sale, lease, rental, transfer or other disposition of any real property
on which the Facility is located, Contractor shall include or cause to be included in any
deed of trust, mortgage, indenture, or other instrument of legal encumbrance
("Encumbrance") a covenant running with the land, prohibiting discrimination upon the
basis of race, color, religion, sex, or national origin, in the sale, lease, rental, transfer or
other disposition of such land or any improvements erected or to be erected thereon, and
providing that Contractor and the United States of America (HUD) are beneficiaries of
and entitled to enforce such covenant.
B. Contractor shall take action to affirmatively further fair housing in the
sale, lease, rental, transfer or other disposition of housing, the financing of housing, and
the provision of brokerage services.
(1) Contractor shall certify and agree that Contractor is under no
contractual or other disability that would prevent Contractor from complying with these
requirements.
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(2) Contractor shall send to each labor organization or workers’
representative with which Contractor has a collective bargaining agreement or other
similar contract, if any, a notice advising such organization or representative of
Contractor’s commitment under Section 3 of the Housing and Urban Development Act of
1968, as amended, and shall post copies of the notice in conspicuous places available to
employees and applicants for employment or training.
C.Contractor covenants to take affirmative action to ensure fair treatment in
all phases of employment, training, apprenticeships, promotion, demotion, and transfer,
and recruitment or recruitment advertising.
2.Federal political and conflict of interest laws.
a.The Anti-Racketeering Act (also known as the Copeland Anti-
Racketeering Act), as amended, and regulations issued under 29 CFR Part 3, which
prohibits kick-backs in construction work funded with federal financial assistance.
b.The Hatch Political Activity Act, as amended, and implementing
regulations when published, which prohibits the use of federal funds for lobbying
activities.
Contractor further covenants that:
A. Contractor wil! establish safeguards to prohibit employees from using
their positions for a purpose that is or gives the appearance of being motivated by a desire
for private gain for themselves or others, particularly those with whom they have family,
business, or other ties.
B. Contractor will not use the assistance provided under the Agreement in the
payment of any bonus or commission for the purposes of obtaining HUD approval of the
application for such assistance, or HUD approval of applications for additional
assistance, or any other approval or concurrence of HUD required under this Agreement,
Title 1 of the Housing and Community Development Act of 1974, as amended, or
applicable HUD regulations. Reasonable fees or bona fide technical, consultant,
managerial or other such services, other than actual solicitation, are not hereby prohibited
if their costs are otherwise eligible as a CDGB Program cost.
C. Contractor will not admit any member of or delegate to the Congress of
the United States or any Resident Commissioner to any share or part of this Agreement or
to allow any benefit to arise from the same.
3.Federal labor and employment laws.
Contractor covenants that:
A. Contractor will comply with all applicable federal labor laws, regulations,
and standards which require contractors engaged under contracts for the construction,
completion, or repair of any building or work financed, in whole or in part, with
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assistance provided under this Agreement, including all HUD requirements pertaining to
such contracts and the applicable requirements of the regulations of the United States
Department of Labor under 29 CFR Part 3, 29 CFR Part 5, and 29 CFR Part 5a,
governing the payment of wages and the ratio of apprentices and trainees to journeymen.
If state or local law wage rates are higher than those required under the federal
regulations, nothing hereunder is intended to relieve Contractor of its obligation, if any,
to require payment of the higher rates. Contractor shall cause or require to be inserted in
full, in all such contracts subject to such regulations, provisions meeting the requirements
of 29 CFR Part 5.5 and, for such contracts in excess of $10,000, 29 CFR Part 5a.3. No
award of contract covered under the Agreement shall be made to any contractor who is at
the time ineligible to receive an award of contract under the applicable regulations of the
United States Department of Labor.
4.Environmental and energy laws.
a.Section 104(h) of the Housing and Community Development Act
of 1974, which prohibits the release or commitment of funds to any person, unless an
appropriate environmental review has been conducted for the activity or program being
funded, all other environmental requirements for the conduct of such activity or program
have been satisfied, and all proper authorizations to proceed with such activity or
program have been received from HUD.
b.Section 106 of the National Historic Preservation Act, as amended,
Executive Order 11593, and implementing regulations when published, and the
provisions of 16 U.S.C. {} 469a-1, relating to the threat to pre-historical, historical, or
archeological data by federal construction projects, when performing environmental
assessments under the National Environmental Policy Act of 1969, as amended, and
implementing regulations when published.
c. Section 114 of the Clean Air Act, as amended, and implementing
regulations when published.
d. Section 308 of the Water Pollution Control Act, as amended, and
implementing regulations when published.
e.The provisions of 24 CFR Part 35, as amended, which provides
that no lead-based paints shall be used in construction or rehabilitation work performed
under projects funded with federal financial assistance.
f.The provisions of 24 CFR Part 39, as amended, which provides
that the performance of rehabilitation work shall conform to HUD energy standards for
cost-effectiveness.
g. Executive Order 11296, as amended, and implementing regulations
when published, which relates to the evaluation of flood hazards.
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EXHIBIT F
INSURANCE REQUIREMENTS
The policy or policies of insurance maintained by Subrecipient shall
provide the following limits and coverages:
POLICY MINIMUM LIMITS OF LIABILITY
Worker’s Compensation Statutory
Comprehensive Automobile
Liability (including
owned, hired, and non-
owned automobiles)
$I,000,000 Bodily Injury each person
$i,000,000 Bodily Injury each occurrence
$!,000,000 Property Damage each occurrence
Comprehensive General
Liability (including
Products and completed
operations, broad form
contractual, and
personal injury)
$i,000,000 Bodily Injury each person
$i,000,000 Bodily Injury each occurrence
$i,000,000 Bodily Injury aggregate
$I,000,000 Property Damage each occurrence
Any deductibles or self-insurance retentions must be declared to and
approved by the City. At the option of the City, either: the insurer
shall reduce or eliminate such deductibles or self-insured retentions as
respects the City, its officers, officials, employees and volunteers; or
the Subrecipient shall procure a bond guaranteeing payment of losses and
related investigations, claim administration and defense expenses.
Insurance shall be in full force and effect commencing on the first day
of the term of this Agreement. Each insurance policy required by this
Agreement shall contain the fol!owing clauses:
"This insurance shall not be suspended, voided, cancelled,
reduced in coverage or in limits except after thirty (30) days
written notice has been given to the City by certified mail,
return receipt requested."
"All rights of subrogation are hereby waived against the City
and the members of the City Council and elective or appointive
officers or employees, when acting within the scope of their
employment or appointment."
o
"The City, its officers, employees, agents and volunteers are
to be covered as insureds as respects: liability arising out
of activities performed by or on behalf of the Subrecipient,
products and completed operations of the Subrecipient; premises
owned, occupied or used by the Subrecipient; or automobiles
owned, leased, hired or borrowed by the Subrecipient. The
coverage shall contain no special limitations on the scope of
protection afforded to the City, its officers, officials,
employees, agents or volunteers."
"It is agreed that any insurance maintained by the City of Pa!o
Alto will apply in excess of, and not contribute to, insurance
provided by the Subrecipient."
"Any failure to comply with reporting or other provisions of
the policies including breaches of warranties shall not affect
coverage provided to the City, its officers, officials,
employees, agents or volunteers."
"Insurance shall apply separately to each insured against whom
claim is made or suit is brought, except with respect to the
limits of the insurer’s liability."
All insurance coverage required under this Agreement shall be provided
through carriers with a Best’s Key Rating Guide rating of X:VII or
higher that are admitted to do business in the State of California. The
certificate(s) of insurance evidencing such coverage shall be completed
and executed by an authorized representative of the Company providing
insurance, and shall be filed with and approved by the City.