HomeMy WebLinkAboutStaff Report 4348
City of Palo Alto (ID # 4348)
City Council Staff Report
Report Type: Action Items Meeting Date: 12/16/2013
City of Palo Alto Page 1
Summary Title: Direction on Maybell Options
Title: Council Discussion and Direction to Staff Regarding the 567-595
Maybell Avenue Site
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that Council direct staff to take no action terminating the loan agreement for
the property at 567-595 Maybell, and to closely monitor future changes to the inventory of
housing sites identified in the City’s 2007-2014 Housing Element as a result of the defeat of
Measure D on November 5, 2013.
Executive Summary
The subject site, 567-595 Maybell Avenue, was purchased by the Palo Alto Housing Corporation
(PAHC), in part with a $5,820,200 loan from the City. With the defeat of Measure D on
November 5, 2013, PAHC’s plan for a 60 unit affordable senior development and 12 market rate
single family homes will not proceed. The City could choose to do nothing and recoup its
investment upon sale of the property by PAHC, or could take steps to terminate the agreement.
Upon termination, the City could force a sale of the property or exercise its option to purchase.
The Maybell site and the 60 affordable units proposed by PAHC were included in the recently
adopted Housing Element to help the City meet its Regional Housing Needs Allocation (RHNA)
requirement. While staff believes that the defeat of Measure D does not immediately
jeopardize the Housing Element’s certification status, it does severely reduce the City’s already
small surplus of prospective units identified in the Housing Element and makes it imperative
that the City make good faith efforts to implement other programs and sites in the Housing
Element. Specifically, any development on parcels within the Housing Element’s inventory of
sites will need to be closely monitored, and if one of those sites develops during 2014 at
densities lower than the realistic capacity ascribed to it in the Housing Element, the City will
need to identify additional sites to ensure that the City can meet its RHNA requirement.
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Background
Palo Alto Housing Corporation, a not for profit affordable housing developer, entered into a
purchase agreement in June 2012 to purchase 567-595 Maybell Ave for $15,580,000. The 2.46
acre property contains four single-family residential homes and an orchard with non-bearing
fruit trees.
In September 2012, the City Council conducted a study session to hear a proposal from PAHC to
develop a 60 unit multifamily affordable housing project with a market-rate single family home
subdivision component. In November 2012, the City approved a $3,220,220 million acquisition
loan to PAHC with an additional $2,600,000 loan commitment to the project. The property
closed escrow at the end of November 2012 and the $2.6 million loan was finalized in July 2013
for a total City loan amount of $5,820,200. (The funding was derived from affordable housing
impact fees and can only be used for that purpose.) See Attachment A (First Amended and
Restated Acquisition and Development Loan Agreement and Option to Purchase).
In the interim, PAHC submitted a request for a zone change to a Planned Community (PC) zone
district to allow the development of 60 units of affordable senior housing and 15 market rate
single family units. The PC zone change was requested in that the proposed residential density
would have exceeded the maximum allowed in the underlying district, which would allow 34-46
units depending on whether a State density bonus is triggered. The PC application was
approved by the City Council in June 2013. A referendum, Measure D, was held to affirm the
Council’s decision to approve project. The measure was defeated on November 5, 2013, so the
site retains its current R-2 and RM-15 zoning, and the PAHC project cannot proceed.
Staff understands that PAHC is currently marketing the property, with the intention to sell. As
noted above, under the current zoning, maximum build-out of the parcel could include up to
34-46 residential units. The ultimate number of units allowed would depend on the site layout,
size of units and whether sufficient affordable units are included to trigger a density bonus
allowed under State law.
In structuring the financing for the acquisition of the loan, two other lenders, the Low Income
Investment Fund (LIIF) and Local Initiative Support Corporation (LISC), were co-senior lenders,
providing an $8 million loan. Of the $8 million loan, $7 million was for the acquisition and the
remaining $1 million is used as an interest reserve. The interest reserve was used to pay the
interest on the $7 million. The City’s loan was in second position and the County, who is in the
most subordinate position, provided a $2,759,780 loan. The property was over-encumbered
with the amount of the loans, $16,580,000, exceeding the property purchase price of
$15,580,000. The current total loan balance is approximately $16,080,000. Closing costs on the
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transaction are estimated to be approximately $1 million. Therefore, the sales price would
need to be in the $17 million to $17.5 million price to pay all encumbrances and closing costs.
Staff believes that the property value has increased since PAHC acquired the site. For
reference, according to Zillow, Palo Alto home values have increased approximately 20% in the
past year. Trulia’s reports figures similar to Zillow. Applying the 20% appreciation estimate to
the $15.58 million purchase price, the property would be valued at approximately $18.7 million.
If the property were to be sold, the LISC and LIIF loans would be repaid first, the City loan would
then be repaid and the County loan would be repaid last. Any remaining proceeds from the
sale could be used to pay for Palo Alto Housing’s predevelopment costs. An appraisal would be
required to get an accurate value on the property.
If the property value does not support the full amount of the loans, the County loan, being the
most junior in position, would be most at risk not to completely be repaid. However, for the
sale to proceed in this situation, the County would need to agree to a short sale and the County
could demand that PAHC or some other entity agree to cover all or a portion of the County’s
losses.
Discussion
As noted above, the City agreed to loan PAHC $5,820,200 for the purchase and development of
a 60 unit affordable housing project, with a market-rate single family home component. With
the defeat of Measure D, the City could do nothing and allow PAHC to sell the property to a
market rate developer and repay the City its loan, or the City could terminate the agreement.
Under the first option (“do nothing”), the City would wait until PAHC identifies a buyer and
negotiates a sale. The City would approve the sale and receive its $5,820,200 at closing; the
$5,820,200 would be available for another needed affordable housing development elsewhere
in the city in the future.
Under the second option (terminate the agreement), the City would provide a notice of
termination to PAHC. Concurrently with the termination notice, the City could exercise an
option to purchase the property. If the City issued a termination notice but did not exercise an
option, the City’s loan would become due and payable on the effective date of the termination
notice. This would effectively force PAHC to sell the property and the results would be the
same as with the “do nothing” option.
If the City exercises its option to purchase the site, it must provide notice to PAHC within 120
days of the date the project was not approved, or March 5, 2014. (March 5, 2014 is 120 days
City of Palo Alto Page 4
from the election on November 5, 2013.) Under the option, the City would theoretically have
the ability to acquire the property for the amount of the City’s loan, or $5,820,200. However, in
acquiring the property, the City would also be responsible for assuming the $8.0 million
LISC/LIIF loan and the $2.8 million County loan. This course of action would have significant
negative impacts on PAHC, because the non-profit would not recoup its predevelopment
expenses. In addition, this course of action would require the City to invest substantial
additional funds because both the County loan and the LISC/LIIF loans were conditioned on a
development similar to the one rejected by the voters. In addition, if the City proposed to use
the property for any purpose other than affordable housing, the City’s $5.8 million loan from
the affordable housing fund would need to be backfilled with other funds.
The County has recorded a Regulatory Agreement against the property requiring 20 units of
extremely low income housing on the property. Thus, any future development would need to
adhere to the County Regulatory Agreement requirements, which could only be removed if the
County loan was repaid. Similarly, the LISC and LIIF loan agreements require the owner of the
Property to pursue approval of a project similar to the Development. Therefore, the City would
have to pay off the loans in order to avoid default with the LISC/LIIF loans, or the City could
negotiate with LISC/LIIF to revise their project requirements in their loan agreements. In any
circumstance, the City would need to pay off the loans by November 29, 2014 to avoid a
default.
If the City were interested in purchasing the property for development of affordable housing
under the existing zoning, it would need to identify over $10 Million in additional funding to
purchase the site and pay off the loans. Even with a State density bonus on the site, the
maximum number of units could not exceed 46. In the PAHC proposal, the total development
cost was $26.3 million for the entire 60 unit development or approximately $438K per unit. Of
the $438K per unit cost, $125K was the land cost, and it was estimated that the land cost of the
1.0 acre senior development site was $7.5 million.
In a less dense development of 46 units, the per-unit costs would be much higher. For example,
in a 46 unit affordable development, the land cost per unit alone would be approximately
$318K ($15.6 Million/46 units). With the addition of construction costs, the per-unit cost
increases substantially. Also, with PAHC’s project, about $13 Million would have been
generated with tax credit equity. In 2013, the average project size that was awarded tax credits
was 62 units. Therefore, it is unlikely that a smaller, less dense project requiring much higher
subsidies could depend on tax credit equity as a source of funding.
The City could also explore the possibility of developing a mixed income project similar to the
PAHC proposal, although at existing densities. It appears the City would still face larger
subsidies for the affordable units because of the lower density. The sales proceeds from the
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market rate development may help decrease some of the affordable housing costs, but again,
because of the lower density, the project would not be competitive for tax credit financing.
Other items to consider if the City were to purchase the property include the four existing
homes on the site and possible relocation costs incurred, as well as carrying costs during pre-
development and development.
Impact to Housing Element
The Maybell project and its then-approved 72 units were included in the 2007-2014 Housing
Element. This is a net increase of 38 units above the existing zoning on the site (24 units above
the existing zoning with the potential State density bonus for affordable housing). In the
Housing Element inventory of sites, the City identified enough sites to accommodate 1,680
units. This was just sufficient to meet the City’s unmet need of 1,646 units. With the defeat of
Measure D and the “loss” of the 38 net units from Maybell, it created a small deficit of 4 units.
However, the approval of the 48 housing units at 3159 El Camino Real resulted in 17 additional
units above the site’s assumed capacity of 31 units. Thus, the City has a surplus -- although
smaller than what was approved by HCD – and a very fluid situation, in which one or two future
developments can significantly affect the City’s ability to meet its RHNA requirements. This
means that the City will need to closely monitor proposed developments on sites included in
the Housing Element’s inventory and find alternative sites if any develop with fewer units than
originally assumed. This imperative is encapsulated in Housing Element Program 2.2.8, which
the State required the City to include in its Housing Element.
Timeline
The timing of PAHC’s sale of the property is unknown, and if the City were interested in
terminating its agreement with PAHC, it must provide notice prior to March 5, 2014.
Resource Impact
The City has invested signifcant resources in the Maybell site (approx $5.8M) from the
Residential Housing Fund (Fund 233) and the Commercial Housing Fund (Fund 234), and is
expected to recoup that investment for use in another affordable housing project upon sale of
the property. If the Council wishes to terminate its agreement and exercise its option rather
than recouping its investment, significant additional resources would be required for the
purchase and subsequent development of the site. It is important to remember that the City
has significant unfunded infrasructure needs that have been under study for the past several
years and limited capital to address those needs. Also, the City really doesn’t have the expertise
or time to “go into the development business.” Finally, termination of the agreement and City
purchase could have a significant impact on PAHC and their ability to reinvest in other needed
afforable housing in the city.
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Policy Implications
The loss of units at the Maybell site impacts the inventory of sites in the City’s Housing Element
and it will be imperative for the City to monitor closely the development on other sites across
the city during 2014 and to ensure that the City’s Regional Housing Needs Allocation can still be
met.
Environmental Review
Taking no action regarding the loan agreement is not a “project” requiring CEQA review. If the
City were to terminate the agreement and exercise its option to purchase the site, this would
constitute a project requiring review. The level of review required (and the potential use of the
prior environmental document) would depend on the intended use(s) of the site.
Attachments:
Attachment A: Amended Loan Agreement (PDF)
Attachment B: Public Comments (PDF)
FIRST AMEND~DANDRESTATED
ACQUISITION AND DEVELOP:MENT LOAN AGREEMENT
AND OPTION TO PURCHASE
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by and between
THE ·CITY OF PALO ALTO
A Chartered City and Munieipal·Corporation
and
PALO ALTO HOUSING CORPORATION
A California Non-Profit PubOe Benefit Corporation
For the Real Property Loeated at:
567 .. 595 Maybell Avenue
(APN: 137 .. 25-108,137 .. 25 .. 109)
Dated ~ \1; 2013
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND EXHIBITS 3
Section 1.1 Definitions ........................................••...........................................•.................. 3
Section 1.2 Exhibits ........................................................................... ~ .......... tol •••••••••••••••••••••• 7
ARTICLE 2 LOAN PROVISIONS 7
Section 2.1 Loan .................................... It ••••••••••••••••••••• If ................... f ••••••••••••••••••••••••••••••••••• t 7
Section 2.2 Interest ................................................................... :. .......................................... 8
Section 2.3 Use ofF1lllds ..................................................................................................... 8
Section 2.4 .Securit:y .•••.••••••.•••••...••••••••••..••... ~ .................................................................... .,. ••• 8
Section 2.5 Subordination ...................................................................................................... 9
Section 2.6 Disbursement Requirements -Acquisition Loan .................. ~ ........................ 10
Section 2.7 Subordirtation to Construction Financing .................. ~ ................................... 12
Section 2.8 Subordination to Permanent Financing ........................................................... 14
Section 2.9 Repayment of th.e City Loan ........................................................................... 14
Section 2.10 Non-Recourse ...................................................................................... ~ ........ 17
ARTICLE 3 PREDEVELOPMENT ACTIVITIES 18
Section 3.1 Predevelopment Activities ........................................................................ , ..... 18
Section 3.2 Land Use Approvals and CEQA Review ....................................................... 18
Section 3.3 Tax Credit and Other Finanoing Applications ................................................ 19
Section 3',4 Fin81lcing Platl. ............................................................................................... 19
Section 3.5 Building Permit ............................................................................................... 20
ARTICLE 4 ONGOING OBLIGATIONS 20
Section 4.1 Periodic Reports ........................................ ~ .................................................... 20
Section 4.2 Informa,tion ........................................................................................................ 20
Section 4.3 Records .................................•.....................•........................................• · .........• 20
Section 4.4 Audits ..................•.......•.......... ! •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 21
Section 4.5 Compliance with Laws; Prevailing Wages ..................................................... 21
Section 4.6 Relocation .......................................•....... ' .......................................................• 22
Section 4.7 Hazardous Materials ....................................................................................... 22
Section 4.8 Mainten8Ilce and Damage .............................................................................. 25
Section 4.9 Mechanics Liens, Stop Notices, and Notices of Completion ......................... 25
Section 4.10 Fees atld Taxes .............................................................................................. 26
Section 4.11 Notices ..............••••................ ; ••..................•.. t ................................................. 26
Section 4.12 Non-Discrimination ... i ................................ , •••••••••••••••••• • .............................. 26
Section 4.13 Insurance Requirements ................................................................................ 27
Section 4.14 Transfer .......................................................................................................... 27
Section 4.15 Other Indebtedness and Liens ....................................................................... 28
Section 4.16 Use as Affordable Housing ........................................................................... 28
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER
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TABLE OF CONTENTS
(continued)
Section 5.1 Representations an.d Warran.ties ..................................................................... 29
Section 5.2 Survival of Representations and Warranties .................................................. 31
ARTICLE 6 TERMINATION, DEFAULT AND REMEDIES 31
'Section 6.1 Termination of Agreetnent ............................................................................. 31
Section 6.2 Events of Default. ........................................................................................... 31
Section:6.3 Remedies .......................................................................................................... 33
Section ~.4 Option to Pl.1l'Cbase, Enter.and Possess .............................................................. 34
Section 6.S RiglJ.t of Contest .............................................................................................. 35
Section 6.6 Remedies Cumulative .................................... ~ ................................................ 35
ARTICLE 7 GENERAL PROVISIONS 35
Section 7.1 Agreement Coordination ................................................................................ 35
Section 7.2 Relationship of Parties ..................................................... ~ ............................... 36
Section 7'.3 No Claims ....................................................................................................... 36
. Section 7.4 AmendInents ................................................................................................... 36
Section 7.5 Entire Understanding of the Parties ................................................................ 36
Section 7.6 htdemnification ............................................................................................... 36
Section 7.7 Non-Liability of CITY and CITY Offioials, Employees and Agents ............. 37
Section 7.8 No Third Party Beneficiaries .......................................................................... 37
Section 7.9 Action by the CITY; Amendments ................................................................. 37
Section 7.10 Waivers .........•..........................• t ••••••••••••••••••••• , ••••••••••••••••••••••••••••••••••••••••••••• 37
Section 7.11 Notices, Demands and Communications ...................................................... 37
Section 7.12 Applicable Lawan.d Ven.ue .......................................................................... 38 .
Section 7.13 Parties Bound ................................................................................................ 38
Section 7.14 Attomeys' Fees ............................... ! ............................................................. 39
Section 7.15' Severability' .•.. ~ .............................................................................................. 39
Sec-tj.on 7.16 Force Majeure ...•...............•.......••• , ........... , ............•........•••............................ 39
Section 7.17 Contlict ofhtterest ........................................................... ~ ............................. 39
Section 7.18 Time ofBssence ...................................................... " ................. , ........•..•....... 40
Section 7.19 Title of Parts and Sections; Exhibits ............................................................ .40
Section 7 .20 Mu1tip~e Originals; Counterpart .................................................................... 40
. Section 7.21 Recording of Memo of AgreCUlent .............................................................. 40
Section 7.22 Further Actions ............................................................................................. 40
EXHffiIT A: Legal Description of the Property
EXHmIT B: Note
EXHIBIT C: Deed of Trust
EXHmIT D: Estimated Project Costs and Sources of Funds
EXHIBIT E: Schedule of Performance
EXHIBIT F: . Assignment of Documents
EXHIBIT G: Insurance Requirements
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FIRST AMENDED AND RESTATED
ACQUISITION AND DEVELOPMENT LOAN AGREEMENT AND OPTION TO
PURCHASE
(Maybell Orchard Apartments, 567-595 Maybell Avenue, Palo Alto, California)
This First Amended and Restated Acquisition and Development Loan Agreement and
Option to Purchase (the "Agreement"), initially ex~ as ~ November 28, 2012 (the
"Effective Datetl), as fully amended and restated as of~, 2013, by and between the
CITY OF PALO ALTO, a chartered city and a municipal corporation (the "CITY") and PALO
ALTO HOUSING CORPORATION, a California non-profit public benefit corporation, with
offices at 725 Alma Street, Palo Alto, California 94301 (the tlBORROWER").
RECITALS
A. On June 22, 2012, BORROWER entered into a purchase and sale agreement with Maybell
Sambuceto Properties, LLC, a California limited liability company, and Sambuceto Partners,
a California limited partnership, 'to acquire the property located at 567 .. 595 Maybell Ave.,
, Palo Alto, California (the "Property") for a purchase price of Fifteen Million Five Hundred
Eighty Thousand Dollars ($15,580,000) for the purpose of developing an affordable rental
housing project. A legal description of the Property is attached as Exhibit At '
B. BORROWER proposes to construct approximately sixty (60) residential rental units (the
IIPr<?jecttt) on a portion of the Property, of.which fifty-nine (59) units would be affordable to
low, very low, and extremely low income senior households earriing between thirty percent
(30%) and sixty percent (60%) of area median income as determined by the United States
Department of Housing and Urban Development. BORROWER further desires to sell a
portion of the Property totaling approximately 1.46 acres '(the "Market .. Rate Parcel") to a
third party for construction of market-rate housing to reduce the acquisition and development
costs related to the Proj ect. '
C. CITY 'has established the Residential In-Lieu Housing Fund (the "In .. Lieu Housing Fund")
for the purpose of providing loans to support the development of affordable rental housing.
The expenditure of funds for site acquisition to secure a site for possible use as low income
housing is an eligible activity under the CITY's adopted Guidelines for use of the Residential
In-Lieu Housing Fund. CITY has further established the Stanford University Medical Center
Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund
(the "SUMC Fund") in part to support the development of affordable housing. There is a
severe ,shortage of rental housing affordable to senior residents with extremely low, very low,
and low incomes in Palo Alto and nearby areas.
D. The CITY made a loan to BORROWER in the amount of Three Million Two Hundred
Twenty Thousand Two Hundred Twenty pollars ($3,220,220) (the "Original Loanll) from
the In .. Lieu Housing Fund pursuant to that Acquisition and Development Loan Agreement
and Option to Purchase by and between the CITY and the BORROWER dated November 28,
2.012 (the "Original Loan Agreement") and a Promissory Note executed by the BORROWER
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dated November 26,2012 (the "Original Note't), which was secured by a Deed of Trust with
Assignment of Rents dated November 16, 2012 (the ItOriginal Deed of Trust"). The purpose
of the Original Loan was to assist in the acquisition of the Property. While the BORROWER
was able to acquire the Property in a timely fashion, BORROWER was required to borrow
from other assets. To further assist in the acquisition of the Property for possible use as
affordable housing, BORROWER wishes to borrow an additional Two Million Six Hundred
Thousand Dollars ($2,600,000) from the SUMC Fund. BORROWER and the CITY wish to
amend and restate the Original Loan Agreement to increase the tota1loan from the CITY to
Five Million Eight Hundred Twenty Thousand Two Hundred Twenty Dollars ($5,820,220)
(the nCity Loanlt). -
E. The portion of the City Loan funded from the SUMC Fund ($2,600,000) must be repaid by
January 31, 2015, unless CITY grants an extension of up toone year for repayment. The
amount of the City Loan attributable to the SUMC Fund shall decrease as CITY receives
additional funds designated for the In-Lieu Housing Fund, as further described in Section 2.1
of this Agreement, Only those portions of the City Loan that remain attributable to the
SUMC Fund must be repaid by January 31, 2015 or any extension of that date.
F. Concurrently with execution of this Agreement, the BORROWER will execute a First
Amended and Restated Promissory Note (the IINote", attached as Exhibit B) evidencing the
City Loan, which will be secured by a deed of trust recorded against the Property (the "Deed
of Trust," attached as Exhibit C). The City Loan will be further secured by an Assignment of
Docwnents as defined below. As a condition to disbursement of the remaining proceeds of
the City Loan, the CITY will cancel the Original Note and reconvey the Original Deed of
Trust.
O. Through this Agreement, the City has made no commitment to approve the Project nor any
particular application for Land Use Approvals (as defined below) on the Property, and site ..
specific environmental review will be completed when such application is made and plans
are developed for the Project. The provision of financing for acquisition of the Property,
without commitment to any specific project, is consistent with the Land Use Element of the
Comprehensive Plan and with the CITY's affordable housing goals as outlined in the
Housing Element of the Comprehensive Plan. A program Envirorunentallrilpact Report on
the CITY'S Comprehensive Plan was certified by the Palo Alto City Council on July 20,
1998. The approval of this Agreement is within the scope of that program EIR, and no new
environmental document is required~ in that no specific plans for development of the
Property have been proposed that would create additional environmental impacts.
H. This Agreement amends and restates the Original Loan Agreement in its entirety.
BORROWER and CITY desire to enter into this Agreement to establish certain terms and
conditions relating to the City Loan.
NOW, THEREFORE, in consideration of the mutual covenants and agreements specified herein,
and subject to its terms and provisions, the parties to this Agreement hereby agree as follows.
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AGREEMENT
The foregoing recitals are hereby incorporated by reference and made part of this Agreement.
This Agreement is entered into to assist the BORROWER in the acquisition of the Property and
the development of the Project, which consists of multifamily rental housing reserved for
occupancy by extremely low, very low, and low income households. This Agreement sets forth
the respective duties and responsibilities of CITY and BORROWER regarding the acquisition of
the Property and financing for the development of the Project, establishes a schedule of
performance by BORROWER, and provides for a termination of this Agreement under certain
conditions.
ARTICLE!
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.
The following capitalized terms have the meanings set forth in this Section 1.1 wherever used in
this. Agreement, unless otherwise provided:
. (a) 'tAgreement" is defined in the first paragraph of this Agreement.
(b) "Annual Operating Expenses" is defined in Section 2.9 below.
(c) "Approved Acquisition Financing" shall mean all of the following loans:
(1) Loan from the Local Initiatives Support Corporation ("LISC"), a
New York not-for-profit corporation with its principal offices located at 501 Seventh
Avenue, 7th Floor, New York, New York 10018, in the approximate amount of Four
Million Dollars ($4,000,000) (including an interest reserve not to exceed Five Hundred
Thousand Dollars ($500,000)), secured by a shared, first priority deed of trust on the
Property (the "LISe Loanlt);
(2) Loan from the Low Income Investment Fund ("LIIF"), a California
nonprofit public benefit corporation with offices located at 100 Pine Street, Suite 1800,
San Francisco, California 94111, in the approximate amount of Four Million Dollars
($4,000,000) (including an interest reserve not to exceed Five Hundred Thousand Dollars
($500,000)), secured by a shared, first priority deed of trust on the Property (the "LIIF
Loan");
(3) Loan from the County of Santa Clara in the approximate amount of
Two MillioJ;l Seven Hundred Fifty Nine Thousand Seven Hundred Eighty Dollars
($2,759,780) (the "County Loantt).
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(d) ItApproved Construction Financing" shall mean the City Loan, the County Loan~ and
the following additional financing:
(1) Tax Credit Investor Proceeds in the approximate amount of One
Million One Hundred Thirty Two Thousand Dollars ($1,132,000); and
(2) Construction Loan in the approximate amount of Ten Million One
Hundred Sixty One Thousand Dollars ($10,161,000), on tenus reasonably approved by
the CITY.
(e) "Approved Financing" means the Approved Acquisition Financing, the Approved
Construction Financing,and/or the Approved Penuanent Financing.
(f) "Approved Pennanent Financingll shall mean the City Loan, the County Loan,
and the following additional financing: '
(1) Tax Credit Investor Proceeds in the approximate amount of Eleven
Million Three Hundred Eighteen Thousand Dollars ($11,318,000); and
(2) Conventional Mortgage in the approximate amount of One Million
Two Hundred Twenty Eight Thousand Dollars ($1,228,000), on terms reasonable
approved by the CITY.
(g) "Assignment of Documents" is defined in Section 2.4. The form of the
Assignment of Documents is attached hereto as Exhibit F.
(h) "BORROWER" is defined in the first paragraph of this Agreement.
(i) IICEQA" means the California Environmental Quality Act, Public Resources
Code Section 21000 et seq.
G) "CITY" is defined in the fIrst paragraph of this Agreement.
(k) "City Council II means the City Council of the CITY.
(1) ftCity Loan" is defined in paragraph D of the Recitals. The City Loan is more
particularly described in Section 2.1 below.
(m) "City Manager" means the City Manager of the CITY or the City Manager's
designee.
(n) nConstruction Bondt! is defined in Section 2.7 below.
(0) "Construction Closing" means the date upon which all financing necessary for the
construction of the Project on the Property closes, and any deeds of trust related to such
finanCing are recorded against the Property.
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(P) lIConstruction Contract" is defined in Section 2.7 below.
(q) "Deed of Trust" is defined in Recital F. The form of the Deed of Trust is attached
hereto as Exhibit C.
(r) "Default" has the meaning set forth in Section 6.2 below.
(s) "Default Rate" has the meaning set forth in Section 2.2 below.
(t) "DIR" is the California Department of Industrial Relations.
(u) "Effective Date" is defmed in the first paragraph of this Agreement.
(v) "Financing Plan" has the meaning set forth in Section 3.4 below.
(w) "Force Majeure" is defined in Section 7.16 below.
(x) ItGeneral Contractor" is defined in Section 2.7 below.
(y) "Gross Revenue" is defined in Section 2.9 below.
(z) IIHazardous Materials" has the meaning set forth in Section 4.7 below.
(aa) "Hazardous Materials Claim" has the meaning set forth in Section 4.7 below.
(bb) "Hazardous Materials Law" has the meaning set forth in Section 4.7 below.
(cc) "In-Lieu Housing FundI! is defined in Recital C.
(dd) "Land Use Approvals" is defmed in Section 3.2 below.
(ee) "Loan Documents" means this Agreement, the Note, the Deed of Trust, the
Assignment of Documents, the Memo of Agreement, the Regulatory Agreement, and any other
document or agreement evidencing the City Loan.
(ft) "Market-Rate Parcel" is defined in Recital B.
(gg) "Memo of Agreement" means the Memorandum of Acquisition and Development
Loan Agreement and Option to Purchase to be recorded against the Property upon acquisition by
BORROWER.
(bb)
ExhibitB.
895\05\1267519.3
LI2212013
"Note" is defined hi Recital F. The form of the Note is attached hereto as
5
(ii) "Notice of Exercise" has the meaning set forth in Section 6.4 below.
Gj) "Option to Purchase" is defined in Sections 2.4 and 6.4 below.
(kk) tlOriginal Deed of Trusf' is defin~d in Recital D.
(11) "Original Loanll is definedin Recital D.
(mm) "Original Loan Agreementtl is defined in Recital D.
(nn) "Original Note" is defined in Recital D.
(00) "Permanent Closing" means the date upon which all financing necessary for the
operation of the Project on the Property closes, and any deeds of trust related to such financing
are recorded against the Property.
(Pp) "Predevelopment Activities" means the activities to be performed by
BORROWER during the Term, as further described in Article 3 below.
(qq) "Projectll is defined in Recital B.
(rr) "Project Budget" is the pro forma acquisition and construction budget for the
Project, including sources and uses of funds; as approved by the CITY, and attached as Exhibit
D.
(ss) "Project Documents" are defined in Section 2.4(b) below.
(tt) "Property" is defined in Recital A, and is more particularly described in the
attached Exhibit A.
(uu) "Regulatory Agreement" means covenants entered into between the CITY and the
BORROWER, to be recorded prior to Construction Closing, which requires that the Project, if
approved by the CITY, be maintained and operated as housing affordable to extremely low> very
low, and low-income households.
(vv) "Residual Receipts" are defined in Section 2.9 below.
(ww) "Schedule of Performance" is defined in Section 3.1 below, and is more
particularly described in Exhibit E.
(xx)
(yy)
(zz)
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"Senior Lenders" are defined in Section 2.5 below.
"Senior Loan" is defined in Section 2.5 below.
nSUMC Fund" is defined in Recital C.
6
(aaa) "TCACIt means the California Tax Credit Allocation Committee.
(bbb) "Term!! is defined in Section 2.9 below.
(ccc) "Termination Noticefl is defined in Section 6.1 below.
(ddd) "Third Party Buyer" is defined in Section 4.14 below.
(eee) "Transfer" has the meaning set forth in Section 4.14 below.
Section 1.2 Exhibits.
The following exhibits are attached to this Agreement and incorporated into this
Agreement by this reference:
EXHIBIT A: Legal Description of the Property
EXHIBIT B: Note
EXHIBIT c: Deed of Trust
EXHIBIT D: Estimated Project Costs and Sources of Funds
EXHIBIT E: Schedule of Performance
EXHIBIT F: Assignment of Documents
EXHIBIT G: Insurance Requirements
ARTICLE 2
LOAN PROVISIONS
Section 2.1 Loan.
(a) Subject to satisfaction of the conditions set forth in Section 2.6, the CITY shall
loan to the BORROWER the City Loan in the total principal amount of Five Million Eight
Hundred Twenty Thousand Two Hundred Twenty Dollars ($5,820,220) for the purposes set forth
in Section 2.3 of this Agreement. The obligation to repay the City Loan shall be evidenced by the
Note in the form attached hereto as Exhibit B.
(b) CITY is funding the principal amount of the City Loan from two sources, not to
exceed a total of Five Million Eight Hundred Twenty Thousand Two Hundred Twenty Dollars
«$5,820,220). As of the date of execution of this Agreement, Three Million Two Hundred
Twenty Thousand Two Hundred Twenty Dollars ($3,220,220) has been disbursed to
BORROWER from the In-Lieu Housing Fund to assist in the purchase of the Property. The
remaining Two Million Six Hundred Thousand Dollars ($2,600,000) shall be funded from the
SUMCFund.
( c) As CITY receives additional funds designated for the In Lieu Housing Fund,
CITY will increase the outstanding principal balance of the City Loan attributable to the In Lieu
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7
Housing Fund and will decrease the outstanding principal balance of the City Loan attributable
to the SUMC Fund by the same amount, until the entire outstanding principal balance of the City
Loan that is attributable to the SUMC Fund is zero, or until the date that the unpaid principal
balance attributable to the SUMC Fund must be paid in full pursuant to Section 2.9(b),
whichever comes first. CITY shall document changes to the balances attributable to each fund
and, upon request, shall provide BORROWER with statements detailing such balances. As an
example, if CITY receives $200,000 for the In-Lieu Housing Fund, the outstanding principal
balance of the City Loan attributable to the In-Lieu Housing Fund shall be increased by $200,000
(to $3,420,000) and the outstanding principal balance attributable to the SUMC Fund shall be
decreased by $200,000 (to $2,400,000).)
Section 2.2 Interest.
(a) Subject to the provisions of Section 2.2(b) below, the outstanding principal
balance of the City Loan will bear simple interest at the rate of three percent (3%) per annum
commencing with the date of the Pennanent Closing.
(b) In the event of a Default, interest on the City Loan will begin to accrue, as of the
date of Default and continue until such time as the City Loan funds are repaid in full or the
Default is cured~ at the default rate of the lesser of eight percent (8%) per annum, compounded
annually (the "Default "Rate") and the highest rate pennitted by law.
Section 2.3 Use of Funds.
BORROWER shall use the City Loan to fund the acquisition and development of the
Property. BORROWER shall not use the City Loan for any other purpose without the prior
written consent of the CITY.
Section 2.4 Security.
(a) Deed of Trust. The BORROWER shall secure its obligation to repay the City
Loan, as evidenced by the Note, by executing the Deed of Trust, and recording it as a Hen against
the Property senior in Hen priority to all other deeds of trust recorded against the Property except
the LISC Loan and the LIIF Loan. The BORROWER shall also cause or permit the Memo of
Agreement to be recorded against the Property.
(b) Assignment of Documents. As further consideration and security for the City
Loan, the BORROWER hereby assigns to the CITY its rights and obligations with respect to
certain agreements, plans, specifications, other documents, and approvals (the "Project
Documents"), pursuant to an Assigrunent of Agreements, Plans and Specifications, and
Approvals (the "Assignment of Documentsft
), substantially in the form set forth in the attached
Exhibit F. The assignments set forth in the Assignment of Documents shall become effective
immediately upon the occurrence of a Default (as defined below in Section 6.2) or upon
termination as described in Section 6.1. The CITY shall not have any obligation under any
contracts or agreements assigned pursuant to the Assignment of Documents until the CITY
expressly agrees in writing to be bound by such contracts or agreements. Upon Default or
895\05\1267519.3
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8
termination, the CITY may use any of the foregoing assigned documents pursuant to the
Assignment of Documents for 'any purpose for which the BORROWER could have used them
for development of the Project, and the BORROWER shall cooperate with the CITY to
implement the Assignment of Documents and shall immediately deposit with the CITY for the
CITytS use all Project Documents that are the subject of the Assignment of Documents.
(c) Option to Purchase. As further consideration and security for the City Loan,
BORROWER hereby grants and gives to the CITY a right to purchase all of BORROWER's
right, title and interest in and -to the Property upon Default on the terms set forth in Section 6.4
(the "Option to Purchase").
Section 2.5 Subordination.
The Deed of Trust, Regulatory Agreement, and/or Memo of Agreement may (which
includes the City's Option to Purchase), shall be subordinated to other loans approved by the
CITY (in each case, a "Senior Loan"), but only on condition that all of the following conditions
are satisfied. The LISe Loan and the LIIF Loan are considered a Senior Loan.
(a) Subordination to Construction Financing. The CITY shall subordinate the Deed of
Trust, Regulatory Agreement, and/or Memo of Agreement to Senior Loans proposed for
Construction Closing if all of the conditions contained in Section 2.7 and in subsection (c) of this
Section have been complied with.
(b) Subordination to Permanent Financing. The City shall subordinate the Deed of
Trust, Regulatory Agreement, andlor Memo of Agreement to Senior Loans proposed for
Pennanent Closing if all of the conditions contained in Section 2.8 and in subsection (c) of this
Section have been complied with.
(c) Conditions Applicable to All Subordination Agreements. In addition to
compliance with the requirements of subsection (a) or (b) above, all of the following conditions
must be satisfied in all agreements subordinating the CITY's Loan Documents:
(1) All of the proceeds of the proposed Senior Loan, less any
transaction costs, must be used to provide acquisition, construction, rehabilitation, andlor
permanent financing for the Project;
(2) The proposed lender (each, a IISenior Lender") must be a state or
federally chartered financial institution, a nonprofit corporation or a public entity that is
not affiliated with BORROWER or any of the BORROWER'S affiliates, other than as a
depositor or a lender;
_ (3) BORROWER must demonstrate to the CITY'S reasonable
satisfaction that subordination of the Deed of Trust, Regulatory Agreement, andlor Memo
of Agreement is necessary to secure adequate acquisition, construction, rehabilitation
andlor permanent financing to ensure the operation of the Project, if approved, as
affordable housing, as required by the Loan Documents. To satisfy this requirement,
BORROWER must provide to the CITY, in addition to any other infonnation reasonably
895\05\1267519.3
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9
required by the CITY, evidence demonstrating that the proposed amount of the Senior
Loan is necessary to provide adequate acquisition, construction, rehabilitation andlor
permanent financing to ensure the viability of the Project, and that adequate financing for
the Project would not be available without the proposed subordination;
(4) The subordination agreement(s) must be structured to minimize the
risk that the Deed of Trust, Regulatory Agreement, andlor Memo of Agreement would be
extinguished as a result of a foreclosure by the Senior Lender or other holder of the
Senior Loan. To satisfy this requirement, the subordination agreement must provide the
eITY with adequate rights to cure any defaults by BORROWER, including: (i~ providing
the CITY or its successor with copies of any notices of default at the same time and in the
same manner as provided to BORROWER; and (ii) providing the CITY with a cure
period o(at least forty-five (45) days to cure any default;
(5) No subordination may limit the effect of the Deed of Trust,
Regulatory Agreement, andlor Memo of Agreement before a 'foreclosure, nor require
consent of the holder of the Senior Loan to exercise of any remedies by the CITY under
the Loan Documents, except for limited standstill periods of up to ninety (90) days as
required by the subordination agreements related to the LIse Loan and the LIIF Loan;
(6) The subordination(s) described in this Section 2.5 may be effective
only during the original term of the Senior Loan and any extension of its term or
refmancing approved in writing by the CITY, except as otherwise provided in the
subordination agreements related to the LISe Loan and the LIIF Loan.
Upon a determination by the City Attorney that the conditions in this Section have been
satisfied, the City Manager or hislher designee will be authorized to execute the approved
subordination agreement without the necessity of any further action or approval.
Section 2.6 Disbursement Requirements -Acquisition Loan.
(a) The CITY has previously disbursed Three Million Two Hundred Twenty
Thousand Two Hundred Twenty Dollars ($3,220,220) to BORROWER subject to the following
conditions precedent:
(1) There exists no Default nor any act, failure, omission or condition
that would constitute an event of Default under this Agreement, or under any other
agreement between the CITY and the BORROWER;
(2) BORROWER will close escrow and complete the acquisition of
the Property on or before May 31, 2013. The City Manager may extend the date for close
of escrow pursuant to Section 2.9(a);
(3) BORROWER has delivered to the CITY copies of all of
BORROWER's organizational documents, a certificate of status for the BORROWER
dated within thirty (30) days of the Effective Date, and a copy of a corporate authorizing
resolution authorizing BORROWER's execution of the Loan Documents;
895\05\1267519.3
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10
(4) BORROWER has furnished the CITY with evidence of the
insurance coverage meeting the requirements of Exhibit G
(5) BORROWER has executed and delivered to the CITY the Loan
Documents and any other instruments and policies required under the Loan Documents,
except the Regulatory Agreement;
(6) The Memo of Agreement and Deed of Trust have been, or will be
concurrently with the acquisition of the Property, recorded against the Property in the
Office of the Recorder of the County of Santa Clara in a lien position acceptable to the
CITY; ,
(7) The BORROWER and all Contractors, as defined in the
Assignment of Documents, have executed and delivered to the CITY the Assignment of
Documents in the form attached as Exhibit F;
(8) BORROWER has executed and delivered to the CITY all other
documents, instruments, and policies required under the Loan Documents;
(9) A title insurer reasonably acceptable to the CITY is
unconditionally and irrevocably committed to issuing an ALTA Lender's Policy of
insurance insuring the priority of the Memo of Agreement and Deed of Trust in the
amount of the City Loan, subject only to such exceptions and exclusions as may be
reasonably acceptable to the CITY, and containing such endorsements as the CITY may
reasonably require; and
(l0) The CITY has received a written draw request with complete
documentation of acquisition expenses from the BORROWER, including all closing
costs, demonstrating that the undisbursed proceeds of the City Loan, together with other
funds or firm commitments for funds that BORROWER has obtained in connection with
the Property, are not less than the amount that the CITY determines is necessary to pay
for acquisition of the Property. If CITY determines that the entire City Loan is not
required to pay reasonable and necessary acquisition costs for the Property, CITY may
disburse to BORROWER only those funds required to acquire the Property.
(b) The CITY is not obligated to make any disbursement of the remaining Two
Million Six Hundred Thousand Dollars ($2,600,000) for the acquisition of the Property or take
any other action under the· Loan Documents unless all of the following conditions precedent are
satisfied:
(1) There exists no Default nor any act, failure, omission or condition
that would constitute an event of Default under this Agreement, or under any other
agreement between the CITY and the BORROWER;
(2) BORROWER has delivered to the CITY copies of all of
BORROWER's organizational documents, a certificate of status for the BORROWER
dated within thirty (30) days of the Effective Date, and a copy of a corporate authorizing
resolution authorizing BORROWER's execution of the Loan Documents;
895\05\ 12675 t 9.3
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(3) BORROWER has furnished the CITY with evidence of the
insurance coverage meeting the requirements of Exhibit G
(4) BORROWER has executed and delivered to the CITY the Loan
Documents and any other instruments and policies required under the Loan Documents,
except the Regulatory Agreement;
(5) The Memo of Agreement and Deed of Trust have been, or will be
concurrently with the acquisition of the Property, recorded against the Property in the
Office of the Recorder of the County of Santa Clara in a lien position acceptable to the
CITY, and CITY has received executed subordination agreements as required to ensure
that the Deed of Trust remains in the same lien position as the Original Deed of Trust;
(6) The BORROWER and all Contractors, as defined in the
Assignment of Documents, have executed and delivered to the CITY the Assignment of
Documents in the form attached as Exhibit F;
(7) BORROWER has executed and delivered to the CITY all other
documents, instruments, and policies required under the Loan Documents;
(8) A title insurer reasonably acceptable to the CITY is
unconditionally and irrevocably. committed to issuing an ALTA Lender's Policy of
insurance insuring the priority of the Memo of Agreement and Deed of Trust in the
amount of the City Loan, subject only to such exceptions and exclusions as may be
reasonably acceptable to the CITY, and containing such endorsements as the CITY may
reasonably require; and
(9) The CITY has received a written draw request with complete
documentation of acquisition expenses from the BORROWER} including all closing
costs, demonstrating that the undisbursed proceeds oithe City Loan, together with other
funds or firm commitments for funds that BORROWER has obtained in connection with
the Property, are not less than the amount that the CITY determines is necessary to pay
for acquisition of the Property. If CITY determines that the entire City Loan is not
required to pay reasonable and necessary acquisition costs for the Property, CITY may
disburse to BORROWER only those funds required to acquire the Property.
(c) Following reconveyance of the LISC Loan and the LIIF Loan, if the entire City
Loan was not required to pay reasonable and necessary acquisition costs for the Property,
BORROWER may submit a written draw request to CITY to disburse the remaining portion of
the City Loan for reasonable predevelopment expenses, such as architectural and engineering
fees, upon presentation of signed contracts for such services. The City Manager may authorize
disbursement of any remaining City Loan funds upon BORROWER's compliance with this
subsection (c) and subsections (b)(1) -(3).
Section 2.7
895\05\1267519.3
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Subordination to Construction Financing.
12
The City shall not subordinate the Deed of Trust or Memo of Agreement to Senior Loans
proposed for Construction Closing unless all of the conditions contained in Section 2.5 and in
this Section have been complied with.
(a) BORROWER has executed and delivered to the CITY the Regulatory Agreement,
and the Regulatory Agreement has been, or will be concurrently with the Construction Closing,
recorded against the Property in the Office of the Recorder of the County of Santa Clara in a lien
position acceptable to the CITY.
(b) BORROWER has submitted to the CITY, and CITY has approved, the Financing
Plan as described in Sectio~ 3.4, demonstrating that the BORROWER holds sufficient funds
andlor binding commitments for sufficient funds to complete the construction of the Project in
accordance with the plans and specifications for the Project and to subsequently operate and
maintain the Project. The development budget may provide for a developer's fee or a similar fee
or fees based on submittal of the Final Budget to the City. City must approve the Final Budget.
(c) BORROWER has submitted to the CITY a fully executed copy of a legally
binding contract for construction of the Project (the "Construction Contractlt) which obligates a
reputable and financially responsible general contractor (the "General Contractor"), licensed in
California and experienced in completing the. type of Project contemplated by this Agreement, to
commence and complete the construction of the Project, with a guaranteed maximum fixed price
consistent with the Final Construction and Permanent Financing Plan. The Construction Contract
shall provide for construction of the Project at a guaranteed maximum fixed price, subject to
such reasonable adjustments as are customarily allowed with respect to construction contracts.
The Construction Contract shall provide for retention of at least ten (10) percent from each
progress payment until the final payment, and the final payment shall not be paid to the General
Contractor until the occurrence of (1), (2) or (3), below:
(1) The expiration of thirty (30) days if a Unconditional Waiver and
Release has been issued by the General Contractor or the expiration of sixty-five (65)
days from the date of recording by BORROWE~ as owner, of a Notice of Completion
for the Project, which BORROWER agrees to record promptly within the times specified
by law for the recording of such Notice; and the settlement and discharge of all liens and
charges claimed by persons who supplied either labor or materials for the construction of
such Project; or
(2) The posting of a bond, acceptable to the CITY in fonn and amount,
insuring the Property and any interest therein against loss arising from any mechanics',
laborers', materialmens' or other like liens filed against the Property; or
(3) BORROWER shall have provided such other assurances as may
be acceptable to the CITY protecting the Property and any interest therein against loss
arising from any mechanics', laborers', materialmens' or other like liens filed against the
Property.
895\05\1261519.3
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13
(d) The Construction Contract shall require the General Contractor to warrant all
work and materials for at least one year after issuance of a certificate of occupancy for the
Project.
(e) The CITY shall have received satisfactory evidence that the insurance required by
Exhibit G of this Agreement is in effect.
(:t) The CITY shall have received a: Performance Bond and a Labor and Material
Payment Bond (in the fonn of AlA form A311 or A312) (the nConstruction Bond"), issued by a
surety acceptable to the CITY in the CITY's reasonable discretion, securing the faithful
perfonnance by the General Contractor of the completion of the construction of the Project free
of all liens and claims, within the time provided in the updated Schedule of Performance. The
Construction Bond shall be in an amount equal to one hundred percent (100%) of the
Construction Contract, shall name the CITY as a co-obligee, and shall be issued by a company
acceptable to the CITY and listed in the current United States Treasury Department circular 570
and otherwise within the underwriting limits specified for that company in such circular.
Section 2.8 Subordination to Permanent Financing.
The City shall not subordinate the Deed of Trust, Regulatory Agreement, andlor Memo
of Agreement to Senior Loans proposed for Permanent Closing unless all of the conditions
contained in Section 2.5 and in this Section have been complied with.
(a) Construction of the Project has been completed, as evidenced by a certificate of
occupancy or equivalent certification provided by the CITY and an architectts or e.ngineerfs
certificate of completion.
(b) A notice of completion has been timely recorded.
(c) Either the lien period has expired and there are no unreleased mechanicst liens or
stop notices; or lien releases have been recorded for all contractors, subcontractors and suppliers
who provided labor or materials for the Project.
Section 2.9 Repayment of the City Loan.
(a) Term. The ItTennlt of this Agreement commences as of the Effective Date, and
expires, unless sooner terminated in accordance with this Agreement,.on the date that is fifty-five
(55) years after the date of the Permanent Closing.
(b) Due in Full. BORROWER shall pay to CITY any unpaid principal balance of the
City Loan that is attributable to the SUMC Fund (as may be modified pursuant to Section 2.1),
together with any accrued interest thereon, no later than January 31, 2015, except that CITY, at
its sole discretion, may extend the date for repayment for up to one year (to January 31,2016).
BORROWER shall pay all other outstanding principal and accrued interest on the City Loan, in
full, on the earliest to occur of (i) any Transfer not authorized by the CITY, (ii) a Default, (iii) on
January 31, 2015 or any extension of that date if the Agreement is terminated pursuant to Section
6.1, and (iv) the expiration of the Term. The CITY and the BORROWER shall have the right,
895\05\ 1267519.3
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14
but not the obligation, to extend the period for repayment of the City Loan or to modify the tenns
of the City Loan, including the option to forgive the portion of the City Loan attributable to the
In-Lieu Housing Fund, if desirable to serve the purposes of this Agreement.
(c) Annual Payments. No later than April 30th of each calendar year after Permanent
Closing, the BORROWER shall make repayments of any remaining unpaid principal balance of
the City Loan for that prior calendar year based on the available amount of Residual Receipts (as
defined below in subsection (c)(3). The CITY shall, in its reasonable discretion, share Residual
Receipts proportionately with other lenders in proportion to their respective loan amounts to the
Project. These payments shall be credited first against accrued interest and then against
outstanding principal of the City Loan, and shall be accompanied by the BORROWER's report
of Residual Receipts (including an independent auditor's report regarding the auditorts review of
Gross Revenue and Annual Operating Expenses). The BORROWER shall provide the CITY
with any documentation reasonably requested by the CITY to substantiate the BORROWER's
determination of Residual Receipts. The following definitions shall apply for the purposes of this
subsection (c):
(1) "Annual Operating Expenses," with respect to a particular calendar
year during the· Term, means the following costs reasonably and actually incurred for
operation and maintenance of the Project to the extent that they are consistent with an
annual independent audit performed by a certified public accountant using generally
accepted accounting principles: property taxes and assessments imposed on the Project;
debt service currently due on a non-optional basis (excluding debt service due from
residual receipts or surplus cash of the Project) on permanent loans that are Senior Loans
or part of the Approved Financing; property management fees and reimbursements,
excluding incentive management fees, not to exceed fees and reimbursements which are
standard in the industry; premiums for property damage and liability insurance; utility
services not paid for directly by tenants, including water, sewer, and trash collection;
maintenance and repair; any annual license or certificate of occupancy fees required for
operation of the Project; security services; advertising and marketing; cash deposited into
reserves for capital replacements of the Project in the amount required by Senior Lenders,
or if there are no Senior Lender requirements, an amount consistent with California Tax
Credit Allocation Committee standards; cash deposited into an operating reserve for the
Project in an amount required by Senior Lenders or the investor's limited partner, or if
there are no Senior Lender or limited partner requirements, an amount consistent with
California Tax Credit Allocation Committee standards; extraordinary operating costs
specifically approved by the CITY; payments of deductibles in connection with casualty
insurance claims not normally paid from reserves, the amount of uninsured losses
actually replaced, repaired or restored, and not normally paid from reserves; deferred
BORROWER fees; and other ordinary and reasonable operating expenses approved by
the CITY and not listed above. Annual Operating Expenses shall not include the
following: depreciation, amortization, depletion or other non-cash expenses or any
amount expended from a reserve account.
(2) "GrOSS Revenue," with respect to a particular calendar year during
the Term, means all revenue, income, receipts, and other consideration actually received
from operation and leasing of the Project. tlGross Revenue" shall·include, but not be
895\05\1267519.3
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15
limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental
subsidy payments received for the dwelling units, deposits forfeited by tenants, all
cancellation fees, price index adjustments and any other rental adjustments to leases or
rental agreements resulting in actual income; proceeds from vending and laundry room
machines; the proceeds of business interruption or similar insurance; subject to the rights
of Senior Lenders, the proceeds of casualty insurance to the extent not utilized to repair
or rebuild the Project (or applied toward the cost of recovering such proceeds) and not
payable to the Senior Lenders; and condemnation awards for a taking of part or all of the
Project for a temporary period. "Gross Revenue" shall also include the fair market value
of any goods or services provided in consideration for the leasing or other use of any
portion of the Project. "Gross Revenue" shall not include tenants' security deposits, loan
proceeds, capital contributions or similar advances.
(3) "Residual Receipts," with respect to a particular calendar year .
during the Term, means the amount by which Gross Revenue (as defined above) exceeds
Annual Operating Expenses (as defined above).
(d) Records Regarding Residual Receipts. In connection with the annual payments
required by Section 2.9(c), within one hundred fifty (150) days of the end of the BORROWER's
fiscal year, the BORROWER .shall furnish to the CITY an audited statement duly certified by an
independent firm of certified public accountants approved by the CITY, setting forth in
reasonable detail the computation and amount of Residual Receipts during the preceding
calendar year.
(1) The BORROWER shall keep and maintain on the Property, or at
its principal place of business, or elsewhere with the CITY's written consent, full,
complete and appropriate books, records and accounts relating to the Project, including
all such books, records and accounts necessary or prudent to evidence and substantiate in
full detail the BORROWER's calculation of Residual Receipts. Books, records and
accounts relating to the BORROWER's compliance with the tenns, provisions, covenants
and conditions of this Agreement shall be kept and maintained in accordance with
generally accepted accounting principles consistently applied, and shall be consistent
with requirements of this Agreement which provide for the calculation of Residual
Receipts on a cash basis. All such books, records, and accounts shall be open to and
available for inspection by the CITI, its auditors or other CITY authorized
representatives at reasonable intervals during nonnal business hours. Copies of all tax
returns and other reports that the BORROWER may be required to furnish any
governmental agency shall at all· reasonable times be open for inspection by the CITY at
the place that the books, records and accounts of the BORROWER are kept. The
BORROWER shall preserve records on which any statement of Residual Receipts is
based for a period of not' less than five (5) years after such statement is rendered, and for
any period during which there is an audit undertaken pursuant to subparagraph (d)(2)
below then pending.
(2) The receipt by the CITY of any statement pursuant to this
subsection (d) or any payment by the BORROWER or acceptance by the CITY of any
City Loan repayment for any period shall not bind the CITY as to the correctness of such
895\05\1 267519.3
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16
statement or such payment. Within three (3) years after the receipt of any such statement,
the CITY or any designated agent or employee of the CITY at any time shall be entitled
to audit the Residual Receipts and all books, records, and accounts pertaining thereto.
Such audit shall be conducted during normal business hours at the principal place of
business of the BORROWER and other places where records are kept. Immediately after
the completion of an audit, the CITY shall deliver a copy of the results of such audit to
the BORROWER. If it shall be determined as a result" of such al.!dit that there has been a
deficiency in a City Loan repayment to the CITY, then such deficiency shall become
immediately due and payable with interest at the non-default rate set forth in the Note
(unless BORROWER's failure, refusal, or repeated failure to correctly calculate and/or
submit the repayment constitutes an event of default, in which case interest shall be paid
at the Default Rate), determined as of and accruing from the date that said payment
should have been made.
(e) Right to Prepay. BORROWER may prepay the City Loan at any time without
premiwn or penalty. All prepayments shall be credited first applied to accrued interest and then
to outstanding principal. The Deed of Trust shall remain in effect for the entire Term to secure
the Regulatory Agreement, when recorded.
Section 2.10 Non .. Recourse.
Except as provided below, neither BORROWER, nor any partner of BORROWER, has
any personal liability for payment of the principal of, and interest on, the City Loan. Following
recordation of the Deed of Trust, the sole recourse of the CITY with respect to the principal of,
or interest on, the Note will be to the property described in the Deed of Trust; provided, however,
that nothing contained in the foregoing limitation of liability limits or impairs the enforcement of
all the rights and remedies of the CITY against all such security for the Note, or impairs the right
of CITY to assert the unpaid principal amount of the Note as demand for money within the
meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any
successor provision thereto. The foregoing limitation of liability is intended to apply only to the
obligation to repay the principal and interest on the Note. Except as hereafter set forth; nothing
contained herein is intended to relieve BORROWER of its obligation to indemnify the CITY
under Sections 4.5, 4.6,4.7, and 7.6 of this Agreement, or liability for (i) loss or damage of any
kind resulting from waste, fraud or willful misrepresentation; (ii) the failure to pay taxes,
assessments or other charges which may create liens on the Property that are payable or
applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes,
assessments or other charges); (iii) the fair market value of any personal property or fixtures
removed or disposed of by BORROWER other than in accordance with the Deed of Trust; and
(iv) the misappropriation of any proceeds under any insurance policies or awards resulting from
condemnation or the exercise of the power of eminent domain or by reason of damage, loss or
destruction to any portion of the Property.
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ARTICLE 3
PREDEVELOPMENT ACTIVITIES
Section 3.1 Predevelopment Activities.
(a) This Article 3 sets forth various Predevelopment Activities that BORROWER
shall seek diligently and in good faith to perform and achieve.
(b) Exhibit E (the ItSchedule of Performancefl) describes the tasks that must be
completed and the dates proposed by BORROWER for their completion. The Schedule of
Perfonnance may be modified in writing by BORROWER and by the City Manager on behalf of
the CITY without formal amendment of this Agreement. However, if the Construction Closing
has not occurred by January 31, 2015, subject to Force Majeure,. the CITY may terminate this
Agreement pursuant to Section 6.1 below as applicable, and exercise its remedies pursuant to this
Agreement.
(c) Sections 3.3, 3.4, and 3.5 apply only if CITY grants the Land Use Approvals for
the Project as described in Section 3.2.
Section 3.2 Land Use Approvals and CEQA Review.
(a) Within the time set forth in the Schedule of Performance, BORROWER shall
submit to the CITY a complete application for all discretionary land use entitlements required
from the CITY to construct the Project and to create the Market-Rate Parcel (the "Land Use
Approvals").
(b) BORROWER shall exercise diligent good faith efforts to seek CITY approval of all
Land Use Approvals within the time set forth in the Schedule of Performance, in accordance
with all applicable legal requirements and procedures.
(c) As part of its review of the Land Use Approvals, the CITY shall complete the
environmental documents required for the Land Use Approvals. Nothing in this Agreement shall
be construed to compel the CITY to approve or make any particular findings with respect to such
environmental documents. The BORROWER shall reasonably assist the CITY in its
determination by providing information about the Project as requested.
(d) Nothing in this Agreement shall obligate the CITY to exercise its discretion
regarding the Project in any particular manner. BORROWER acknowledges that execution of
this Agreement by the CITY does not constitute approval by the CITY of any Land Use
Approvals or any required pennits, applications, or maps, and in no way limits the discretion of
the CITY in the permit and approval process. BORROWER acknowledges that approval or.
disapproval of the Land Use Approvals following completion of the environmental review
process is within the sole discretion of the CITY without limitation by or consideration of the
terms' of this Agreement; and that the CITY makes no representation regarding the ability or
willingness of the CITY to approve the Land Use Approvals, including the creation of the
Market-Rate Parcel, nor any representation regarding the imposition of any mitigation measures
895\05\1267519 J
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or other conditions of approval. The parties recognize that the CITY has the sole discretion and
right to terminate this Agreement without fault or Default if CITY determines not to approve the
Land Use Approvals for the Project. In addition, the BORROWER acknowledges that other
local, state or federal agencies may require additional entitlements, including environmental
review, and that any approval by the CITY does not bind any other local, state or federal agency.
(e) If the CITY approves the Project following completion of the environmental
review process and such approval is conditioned upon implementation of specified
environmental mitigation measures or other conditions of approval, the BORROWER shall be
responsible for implementing such mitigation measureS and conditions as part of the Project.
Section 3.3 Tax Credit and Other Financinfl ARPlications.
(a) BORROWER shall submit a timely and complete application to TCAC for a
preliminary reservation of nine percent (9%) tax credits within the time set forth in the Schedule
of Performance.
(b) If BORROWER is not successful in obtaining a reservation of tax credits from
TCAC in its first application, BORROWER shall submit a second application.
(c) BORROWER further agrees to seek construction and permanent funding for the
Project from all available and appropriate sources to ensure that the Project will be financially
feasible and will provide affordable rental housing for extremely low, very low, and low-income
households.
Section 3.4 Financing Plan.
(a) The preliminary Project Budget is shown in Exhibit D. Within the time set forth
in the Schedule of Performance BORROWER shall submit for CITY approval a Final
Construction and Permanent Financing Plan (the "Financing Plan") containing the following:
(1) An updated development budget showing a "sources and uses"
breakdown of the costs of constructing the Project.
(2)
of the Project.
An operating pro forma for the first thirty (30) years of operation
(3) Copies of all required funding commitments for construction and
permanent financing for the Project; or proposed funding, as applicable.
(4) Any other information that is reasonably necessary for the CITY to
determine that BORROWER has the financial capability to pay all costs of constructing
and operating the Project.
(b) . The CITY shall review the Financing Plan to determine if, in the CITY's
reasonable judgment~ BORROWER has the financial capability (taking into account all
committed funds) to pay all realistically established costs of constructing and operating the
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Project. The CITY shall review the Financing Plan an4 shall either approve or disapprove the
Financing Plan in writing within thirty (30) days of receipt. If disapproved, the CITY shall give
specific reasons in writing for disapproval and the required revisions to the previously submitted
Financing Plan. If the Financing Plan is disapproved, BORROWER shall resubmit, a revised
Financing Plan within thirty (30) days of notification of disapproval. The CITY shall either
approve or disapprove the submitted revised Financing Plan within thirty (30) days of the date
such revised Financing Plan is received by the CITY.
(c) BORROWER shall submit any material revision to an approved Financing Plan to
the CITY for its review and approval. Any proposed revised Financing Plan shall be considered
and approved or disapproved by the CITY in· the same manner and according to the same
timeframe set forth in subsection (b) above.
Section 3.5 Building Permit.
(a) Within the time set forth in the Schedule of Performance BORROWER shall
submit a complete application to the CITY for a building permit for the construction of the
Project.
(b) BORROWER shall exercise diligent good faith efforts to obtain the building
permit for the Project within the time set forth in the Schedule of Performance.
ARTICLE 4
ONGOING OBLIGATIONS
Section 4.1 Periodic Reports.
During the performance of the Predevelopment Activities set forth in Article 3,
BORROWER shall on the frrst day of each month of the Termt and from time to time as
reasonably requested by the CITY, provide the CITY with written progress reports regarding the
status of the performance of the Pre development Activities.
Section 4.2 Information.
BORROWER shall provide any information reasonably requested by the CITY in
connection with the ownership of the Property' and performance of the Predevelopment
Activities.
Section 4.3 Records.
BORROWER shall maintain on a current basis complete records, including books of
original entry, source documents supporting accounting transactions, service records, a general
ledger, canceled checks, time sheets, and related documents and records to assure proper
accounting of funds and performance of the terms of this Agreement. BORROWER shall furnish
any and all information and reports which may be required by CITY in connection with this
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Agreement. BORROWER shall further permit access to its books, r~cords and accounts by the
representatives and employees of. CITY during regular business hours, and with reasonable
notice, 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 BORROWER's
compliance with the provisions of this Agreement. All such records shall be retained by
BORROWER and made available to CITY upon request for review or audit for a period of at
least five (5) years following the expiration or termination of this Agreement.
Section 4.4 Audits.
BORROWER shall provide CITY, during the term of this Agreement, with copies of
audited financial statements of BORROWER, including any management letter comments on the
adequacy of internal or operational controls, within one hundred fifty (150) days of the close of
each fiscal year of the BORROWER. CITY reserves the right, during the term of this Loan
Agreement, to audit the records, including the financial records supporting the aforementioned
financial statements, and other records and documents pertaining to the operations of the Project.
Section 4.5 Compliance with Laws; Prevailing Wages.
(a) BORROWER shall comply with all applicable laws, ordinances, rules and
regulations of federal, state, county or munidpal governments or agencies now in force or that
may be enacted hereafter, including (without limitation and where applicable) the prevailing
wage provisions of Sections 1770 et seq., of the California Labor Code and implementing rules
and regulations as set forth below, in owning the Property, performing the Predevelopment
Activities, and constructing the Project on the Property.
(b) This Agreement has been prepared with the intention that CITY assistance under
this Agreement does not require payment of state prevailing wages in connection with
construction work that is paid for in whole or in part out of public funds; provided, however, that
nothing in this Agreement constitutes a representation or warranty by the CITY regarding the
applicability of the provisions of Labor Code Section 1720 et ~., and the hiring of apprentices
pursuant to Labor Code Sections 1777.5 et seq., to the City Loan or Approved Financing. To the
extent applicable, BORROWER shall pay and shall cause the General Contractor and
subcontractors to pay prevailing wages in connection with the construction of the Development,
as those wages are determined pursuant to Labor Code Sections 1720 et ~., to employ
apprentices as required by Labor Code Sections 1777.5 et seq., and the implementing regulations
of the Department of Industrial relations ("DIR"). BORROWER shall and shall cause the
consultants and contractors to comply with the other applicable provisions of Labor Code
Sections 1720 et seq., 1777.5 et seq., and implementing regUlations of the DIR. BORROWER
shall cause the contractors to keep and retain such records as are necessary to determine if such
prevailing wages have been paid as required pursuant to Labor Code Sections 1720 et ~., and
apprentices have been employed are required by Labor Code Sections 1777.5 et seq. Copies of
the currently applicable current per diem prevailing wages are available from DIR.
(c) BORROWER shall indemnify, hold harmless and defend (with counsel
reasonably acceptable to the CITy) the CITY against any claim for damages, compensation,
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fines, penalties or other amounts arising out of the failure or alleged failure of any person or
entity (including BORROWER, its contractor and subcontractors) to pay prevailing wages as
determined pursuant to Labor Code Sections 1720 et ~., to employ apprentices pursuant to
Labor Code Sections 1777.5 et ~., and implementing regulations of the DIR or to comply with
the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and the
implementing regulations of the DIR in connection with the Pre development Activities or any
other work undertaken or in connection with the Property. The requirements in this subsection
(c) shall survive the repayment of the City Loan and the reconveyance of the Deed of Trust.
Section 4.6 Relocation.
If and to the extent that acquisition and development of the Property will result in the
permanent or temporary displacement of persons or businesses entitled to relocation benefits~
then BORROWER shall comply with all applicable local, state, and federal statutes and
regulations, (including without limitation the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as. amended, California Government Code Section 7260 et
seq., and accompanying regulations) with respect to preparation of a relocation plan, relocation
planning, advisory assistance, and payment of monetary benefits. BORROWER shall be solely
responsible for payment of any relocation benefits to any displaced persons and any other
.obligations associated with complying with such relocation laws. BORROWER shall indemnify,
defend and hold harmless, (with counsel reasonably acceptable to the CITY), the CITY and its
councilmembers, employees, agents, successors and assigns against any claim for damages,
compensation, fines, penalties, relocation payments or other amounts and expenses (including
reasonable attorneys' fees) arising out of the failure or alleged failure of any person or entity
(including BORROWER, or the CITY) to satisfy relocation obligations related to the acquisition
of the Property. This obligation to indemnify shall survive termination of this Agreement.
Section 4.7 Hazardous Materials.
(a) BORROWER shall keep and maintain the Property in compliance with, and shall
not cause or permit the Property to be in violation of any Hazardous Materials Law (defined
below), including but not limited to, soil and ground water conditions. BORROWER shall not,
and shall not cause or permit the use, generation, manufacture, storage or disposal of on, under,
or about the Property or transportation to or from the Property of (i) any substance, material, or
waste th~t is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos
containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas,
radon, or a pesticide, herbicide, or any other agricultural chemical, and (U) any waste, substance
or material defined as or included in the definition of "hazardous substances," IIhazardous
wastes," flhazardous materials," "toxic materials", tltoxic waste", "toxic substances," or words of
similar import under any Hazardous Materials Law (collectively referred to hereinafter as
"Hazardous Materialsll). BORROWER shall cause any persons who may come onto the
Property to comply with the foregoing. Notwithstanding the foregoing, Hazardous Materials
shall not ·include substances routinely used in the development and operations of housing in
accordance with all applicable laws and regulations.
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(b) BORROWER shall immediately notify the CITY in writing if at any time it has
any notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against BORROWER or the Property pursuant to any
applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous
Materials, health, industrial hygiene, environmental conditions, or the regulation or protection of
the environment, and all amendments thereto as of this date and to be added in the future and any
successor statute or rule or regulation promulgated thereto ("Hazardous Materials Lawn); (ii) all
claims made or threatened by any third party against BORROWER or the Property relating to
damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous
Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as
"Hazardous Materials Claims"); and (iii) BORROWER's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the Property that could cause the
Property or any part thereof to be classified as "border-zone property It under the provision of
California Health and Safety Code, Sections 25220 et~., or any regulation adopted in
accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Property under any Hazardous Materials Law.
(c) The CITY shall have the right to join and participate in, as a party if it so elects,
and be represented by counsel of its own choice in, any legal proceedings or actions initiated in
connection with any Hazardous Materials Claims, and to have its reasonable attorneys' fees in
connection therewith paid by BORROWER.
(d) BORROWER shall indemnify and hold harmless the CITY and its
councilmembers, directors, officers, employees, agents, successors and assigns from and against
any loss, damage, cost, fine, penalty, judgment, award, settlement, expense or liability, directly
or indirectly arising out of or attributable to: (i) any actual or past or present violation of any
Hazardous Materials Law; (ii) any Hazardous Materials Claim; (iii) any actual or past or present
use, generation, manufacture, storage, release, threatened release, discharge, disposal,
transportation, or presence of Hazardous Materials on, under, or about the Property; (iv) any
investigation, cleanup, remediation, removal, or restoration work of site conditions of the
Property relating to Hazardous Materials (whether on the Property or any other property); and (v)
the breach of any representation of warranty by or covenant of BORROWER in this Section 4.7,
and Section 5.1(h). Such indemnity shall include, without limitation: (i) all consequential
damages; (ii) the costs of any required or necessary investigation, repair, cleanup or
detoxification of the Property and the preparation and implementation of any closure, remedial or
other required plans; and (iii) all reasonable costs and expenses incurred by the CITY in
connection with clauses (i) and (ii), including but not limited to reasonable attorneys' fees and
consultant fees. This obligation to indemnify shall survive termination of this Agreement and
shall not be diminished or affected in any respect as a result of any notice, disclosure,
knowledge, if any, to or by the CITY of Hazardous Materials.
(e) Without the CITY's prior written consent, which shall not be unreasonably
withheld, BORROWER shall not take any remedial action in response to the presence of any
Hazardous Materials on, under or about the Property, nor enter into any settlement agreement,
consent decree, or other compromise in respect to any claims made or threatened by any third
party against BORROWER, any tenant, or the Property relating to damage, contribution, cost
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recovery compensation, loss or injury resulting from any Hazardous Materials, which remedial
action, settlement, consent decree or compromise might, in the CITY's reasonable judgment,
impair the value of the CITY's security hereunder; provided, however, that the CITY's prior
consent shall not be necessary: (i) in relation to those remedial actions initiated by the sellers of
the Property pursuant to SCCo Case No. 06S2W18L03s; and (ii) in the event that the presence of
Hazardous Materials. on, under, or about the Property either poses an immediate threat to the
health, safety or welfare of any individual or is of such a nature that an immediate remedial
response is necessary and it is not reasonably possible to obtain the CITY's consent before taking
such action, provided that in such event BORROWER shall notify the CITY as soon as
practicable of any action so taken. The CITY agrees not to withhold its consent, where such
consent is required hereunder, if either (i) a particular remedial action is ordered by a court of
competent jurisdiction, (ii) BORROWER will or may be subjected to civil or criminal sanctions
or penalties if it fails to take a required action; (iii) BORROWER establishes to the reasonable
satisfaction of the CITY that there is no reasonable alternative to such remedial action which
would result in less impairment of the CITY's security hereunder; or (iv) the action has been
agreed to by the CITY.
(f) BORROWER hereby acknowledges and agrees that (i) this Section is intended as
the CITY's written request for information (and BORROWERts response) concerning the
environmental condition of the Property as required by California Code of Civil Procedure
Section 726.5, and (ii) each representation and warranty in this Agreement (together with any
indemnity obligation applicable to a breach of any such representation and warranty) with
respect to the environmental condition of the Property is intended by the Parties to be an
"environmental provision" for purposes of California Code of Civil Procedure Section 736.
(g) In the event that any portion of the Property is determined to be "environmentally
impaired II (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3») or
to be an Itaffected parcell! (as that teon is defined in California Code of Civil Procedure Section
726.S(e)(1)), then, without otherwise limiting or in any way affecting the CITY's or the trustee's
rights and remedies under the Deed of Trust, the CITY may elect to exercise its rights under
California Code of Civil Procedure Section 726.5(a) to (i) waive its lien on such environmentally
impaired or affected portion of the Property and (ii) exercise (1) the rights and remedies of an
unsecured creditor, including reduction of its claim against BORROWER to judgment, and (2)
any other rights and remedies permitted by law. For purposes of detennining the CITY right to
proceed as an unsecured creditor under CalifomiaCode of Civil Procedure Section 726.5(a),
BORROWER shall be deemed to have willfully permitted or acquiesced in a release or
threatened release of Hazardous Materials, within the meaning of California Code of Civil
Procedure Section 726.5(d)(1), if the release or threatened release of Hazardous Materials was
knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion
of the Property and BORROWER knew or should have known of the activity by such lessee,
occupant, or user which caused or contributed to the release or threatened release. All costs and
expenses~ including (but not limited to) attorneys' fees~ incurred by the CITY in cormection with
any action commenced under this paragraph, including any action required by California Code of
Civil Procedure Section 726.5(b) to determine the degree to which the Property is
environmentally impaired, plus interest thereon at the rate specified in the Note until paid, shall
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be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the
CITY upon its demand made at any time following the conclusion of such action.
Section 4.8 Maintenance and Damage.
(a) BORROWER shall maintain the Property and the Project in good repair and in a
neat, clean and orderly condition. If there arises a condition in contravention of this requirement,
and if BORROWER has not cured such condition within thirty (30) days after receiving a notice
from the CITY of such a condition, then in addition to any other rights available to the CITY, the
CITY shall have the right to perform all acts necessary to cure such condition, and to establish or
enforce a lien or other encumbrance against the Property.
(b) If any improvement constructed on the Property by BORROWER, now or in the
future, is damaged or destroyed, then BORROWER shall, at its cost and expense, diligently
undertake to repair or restore such improvement consistent with any plans and specifications
approved by the CITY. Such work or repair shall be commenced no later than the later of one
hundred twenty (120) days, or such longer period approved by the CITY in writing, after the
damage or loss occurs or thirty (30) days following receipt of the insurance proceeds, and shall
be complete within one (1) year thereafter. Any insurance proceeds collected for such damage or
destruction shall be applied to the cost of such repairs or restoration and~ if such insurance
proceeds shall be insufficient for such purpose, then BORROWER shall make up the deficiency.
Section 4.9 Mechanics Liens. Stop Notices, and Notices of Completion.
(a) If any claim of lien is filed against the Property or a stop notice affecting the City
Loan is served on the CITY or any other lender or other third party in connection with the
Development, then BORROWER shall, within thirty (30) days after such filing or service, either
pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by
delivering to the CITY a surety bond in sufficient form and amount, or provide the CITY with
other assurance satisfactory to the CITY that the claim of lien or stop notice will be paid or
discharged.
(b) If BORROWER fails to discharge any lien, encumbrance, charge, or claim in the
manner required in this Section, then in addition to any other right or remedy, the CITY may (but
shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at
BORROWER'S expense. Alternately, the CITY may require BORROWER to immediately
deposit with the CITY the amount necessary to satisfy such lien or claim and any costs, pending
resolution thereof. The CITY may use such deposit to satisfy any claim or lien that is adversely
determined against BORROWER.
(c) BORROWER shall file a valid notice of cessation or notice of completion upon
cessation of construction on the Development and take all other reasonable' steps to forestall the
assertion of claims of lien against the Property. BORROWER authorizes the CITY, but without
any obligation, to record any notices of completion or cessation of labor, or any other notice that
the CITY deems necessary or desirable to protect its interest in the Property.
895\05\1267519.3
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Section 4.10 Fees and Taxes.
BORROWER shall be solely responsible for payment of all fees, assessments, taxes,
charges, and levies imposed by any public authority or utility company with respect to the
Property or the Project to the extent owned by BORROWER, and shall pay such charges prior to
delinquency. However, BORROWER shall not be required to pay and discharge any such charge
so long as (a) the legality thereof is being contested diligently and in good faith and by
appropriate proceedings, and (b) if requested by the CITY, BORROWER deposits with the
CITY any funds or other fonns of assurance that the CITY in good faith from time to time
detennines appropriate to protect the CITY from the consequences of the contest being
unsuccessful.
Section 4.11 Notices.
BORROWER shall notify the CITY promptly in writing of any and all of the following:
(a) Any litigation known to BORROWER affecting BORROWER, or the Property and
of any claims or disputes that involve a material risk of litigation;
(b) Any written or oral communication BORROWER receives from any
governmental, judicial, or legal authority giving notice of any claim or assertion that the Property
or Project fails in any respect to comply with any applicable governmental law;
(c) Any material adverse change in the physical condition of the Property (including
any damage suffered as a result of fire, earthquakes, or floods);
(d) Any material adverse change in BORROWER's financial condition, any material
adverse change in BORROWER1s operations, or any change in the management of
BORROWER;
(e) That any of the statements in Section 5.1 (h) regarding Hazardous Materials are no
longer accurate;
(f) Any Default or event which, with the giving of notice or the passage of time or
both, would constitute a Default; and
(g) Any other circumstance, event, or occurrence that results in a material adverse
change in BORROWER's ability to timely perfonn any of its obligations under any of the Loan
Documents.
Section 4.12 Non-Discrimination.
BORROWER shall not discriminate or segregate in the ownership of the Property, and
performance of the Predevelopment Activities, or operation or construction of the Project on the
basis of race, color, creed, ancestry, national origin, religion, sex, sexual orientation, marital
status, age, disability, medical condition, familial status, source of income or any other arbitrary
895\05\1267519.3
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basis. BORROWER shall otherwise comply with all applicable local, state, and federal laws
concerning discrimination.
Section 4.13 Insurance Requirements.
BORROWER, at its sole cost and expense, shall obtain and maintain during the term of
this Agreement, insurance provided by responsible companies authorized to engage in the
offering of insurance services in California in such amounts and against such risks as shall be
satisfactory to CITY'S risk manager, including, without limitation, worker's compensation,
employer's liability, commercial general liability, comprehensive automobile liability, personal
injury and property damage insurance, as appropriate, as set forth in Exhibit G, insuring against
all liability of BORROWER and its directors, officers, employees, agents, and representatives
arising out of or in connection with the acquisition, construction and development of the Project
or BORROWER'S performance or nonperformance under this Agreement.
Section 4.14 Transfer.
(a) For purposes of this Agreement, "Transfer" is any sale, assignment, or transfer,
whether voluntary or involuntary, of (i) any rights and/or duties under this Agreement, and/or (ii)
any interest in the Project, including (but not limited to) a fee simple interest, a joint tenancy
interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest
evidenced by a land contract by which possession of the Project is transferred and the
BORROWER retains title. "Transfer" shall exclude the leasing of any single unit in the Project to
. an occupant and the transfer of an easement interest in the Property for utility purposes. The City
Manager or his/her designee is authorized to execute assignment and asswnption agreements on
behalf of the CITY to implement any approved Transfer.
(b) CITY is entering into this Agreement based on the experience, skill, and ability to
perform of BORROWER. The BORROWER recognizes that its qualifications and identity are of
particular concern to the CITY,in view of: (i) the importance of affordable housing to the
general welfare of the community; (ii) the reliance by the CITY upon the unique qualifications
and ability of the BORROWER to ensure the quality of the affordability, use, operation, and
maintenance of the proposed Project, if approved; (iii) the requirement that the Property be used
for affordable housing; and (iv) BORROWER's representation that the Property is not to be
acquired or used for speculation, but only for use by the BORROWER for affordable housing.
(c) No Transfer not specifically authorized in this Section 4.14 shall be permitted
without the prior written consent of the CITY, which the CITY may withhold in its sole
discretion. The City Loan shall automatically accelerate and be due in full upon any Transfer
made without the prior written consent of the CITY.
(d) Sale of Market-Rate Parcel.
(1), BORROWER desires to sell the portion of the Property identified
as the Market-Rate Parcelto a third party (the "Third Party Buyer") for construction of
market-rate housing in order to repay the LIIF Loan and the LISe Loan.
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(2) If BORROWER has received all required Land Use Approvals to
create the Market-Rate Parcel, as described in Section 3.2 and proposes to sell the
Market-Rate Parcel to a Third Party Buyer, BORROWER shall provide written notice to
the CITY at least forty-five days (45) days prior to the consummation of any proposed
sale of the Market-Rate Parcel to a Third Party Buyer.
(~) . If BORROWER has received all required Land Use Approvals to
create the Market-Rate Parcel, as described in Section 3.2, CITY hereby approves the
sale of the Market-Rate Parcel to a Third Party Buyer provided that: (i) the LISC Loan .
and the LIIF Loan shall be paid off and the deeds of trust for those loans reconveyed
upon sale of the Market-Rate Parcel; and (ii) any proceeds from the sale of the Market
Rate Parcel remaining after repayment of the LISC and LIFF loans shall either be used
for the Project, if the CITY approves the Land Use Approvals for the Project; or for other
affordable housing purposes, if the City does not approve the Land Approvals for the
Project. On the date of the sale of the Market-Rate Parcel in conformance with this
subsection (d), CITY agrees to release the Memo of Agreement and reconvey the Deed of
Trust from the Market-Rate Parcel.
(4) The provisions of this subsection (d) apply only to sale of a fee
title interest in the Market .. Rate Parcel. All other Transfers are subject to the provisions of
subsections (a), (b), (c), and (e) of this Section.
( e) The CITY hereby approves the Transfer of this Agreement to a limited
partnership, of which BORROWER or BORROWER's wholly controlled affiliate is the general
partner.
Section 4.15 Other Indebtedness and Liens.
Except for the Approved Acquisition Financing, BORROWER shall not incur any
indebtedness of any kind or encumber the Property with any liens without the prior written
consent of the CITY.
Section 4.16 Use as Affordable Housing
In consideration for the City Loan to be provided to the BORROWER on below .. market
tenns, the BORROWER hereby agrees to apply for the use of the Property as affordable housing
and otherwise use its best good faith efforts to comply with the requirements of Article 3 of this
Agreement. If the Project is approved, the use, occupancy and rent restrictions in the Regulatory
Agreement shall be compatible with the restrictions of other Approved Financing.
BORROWER's compliance with this Section 4.16 is of particular importance to CITY and the
main purpose of the City Loan. If the Project is approved, the BORROWER shall record against
the Property, prior to Construction Closing, the Regulatory Agreement.
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ARTICLES
REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 5.1 Representations and Warranties.
As a material inducement to the CITY's entry into this Agreement, BORROWER hereby
represents and warrants to the CITY as follows and acknowledges, understands, and agrees that
the representations and warranties set forth in this Article 5 are deemed to be continuing during
all times when any portion of the City Loan remains outstanding:
(a) Organization. BORROWER is duly organized, validly existing, and in good
standing under the laws of the State of California and have the power and authority to own their
property and carry on their business as now being conducted.
(b) Authority of BORROWER. BORROWER has full power and authority to execute
and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to
execute and deliver the Loan Documents and all other documents or instruments executed and
delivered,or to be executed and delivered, pursuant to this Agreement, and to perfonn and
observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the Loan
Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement have been executed and delivered by persons who are duly
authorized to execute and deliver the same for and on behalf of BORROWER, and all actions
required under BORROWER's 's organizational documents and applicable governing law for the
authorization, execution, delivery and perfonnance of this Agreement and the Loan Document.s
and all other documents or instruments executed and delivered, or to be executed and delivered,
pursuant to this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Loan Documents and all
other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of enforceable against it in
accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of this
Agreement and the Loan Documents or of any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any
provision, condition, covenant or other term hereof or thereof, will conflict with or result in a
breach of any statute, rule or regulation, or any judgment, decree or order of any court, board,
commission or agency whatsoever binding on BORROWER, or any provision of the
organizational documents of BORROWER, or will conflict with or constitute a breach of or a
default under any agreement to which BORROWER is a party, or will result in the creation or
imposition of any lien upon any assets or property of BORROWER, other than liens established
pursuant hereto.
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(f) Pending Proceedings. BORROWER is not in default under any law or regulation
or under any order of any court, board, commission or agency whatsoever, and there are no
claims, actions, suits or proceedings pending or, to the knowledge of BORROWER, threatened
against or affecting BORROWER or the Property, at law or in equity, before or by any court,
board, commission or agency whatsoever which might, if determined adversely to BORROWER,
materially affect BORROWER's ability to repay the City Loan or impair the security to be given
to the CITY pursuant hereto.
(g) Title to Land. At the time of recordation of the Deed of Trust, BORROWER will
have good and marketable fee title to the Property and there will exist thereon or with respect
thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than
liens for current real property taxes and assessments not yet due and payable, and liens in favor
of the CITY or approved in writing by the CITY.
(h) Hazardous Materials. To the best of BORROWER's knowledge, except as
disclosed in writing by BORROWER to the CITY or in the following reports, prior to the date of
this Agreement (Phase I Environmental Site Assessment, dated July 2, 2012; Phase II
Environmental Site Assessment, dated July20, 2012); (i) no Hazardous Material has been
disposed of, stored on, discharged from, or released to or from, or otherwise now exists in, on,
under, or around, the Property, (ii) no aboveground or underground storage tanks are now or
have ever been located on or under the Property, (iii) neither the Property, nor BORROWER, is
in violation of any Hazardous Materials Law; and (iv) neither the Property, nor BORROWER, is
subject to any existing, pending or threatened Hazardous Materials Claims.
(i) Financial Statements. The financial statements of BORROWER and other
financial data and information furnished by BORROWER to the CITY fairly present the
infonnatioJ;l contained therein. As of the date of this Agreement, there has not been any adverse,
material change in the financial condition of BORROWER from that shown by such financial
statements and other data and information.
G) Sufficient Funds. BORROWER holds sufficient funds andlor binding
commitments for sufficient funds to complete the acquisition of the Property and perform the
Predevelopment Activities.
(k) Taxes. BORROWER and its subsidiaries have filed all federal and other material
tax returns and reports required to be filed, and have paid all federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or their income
or the Property otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in accordance
with generally accepted accounting principles. There is no proposed tax assessment against
BORROWER or any of its subsidiaries that could, if made, be reasonably expected to have a
material adverse effect upon the Property, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of BORROWER and its' subsidiaries, taken as a whole,
which would be expected to result in a material impairment of the ability of BORROWER to
perform under any Loan Document to which it is a party, or a material adverse effect upon the
legality, validity, binding effect or enforceability against BORROWER of any Loan Document.
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Section 5.2 Survival of Representations and Warranties.
All representations and warranties of BORROWER shall survive the making of the City
Loan and have been or will be relied on by the CITY notwithstanding any investigation made by
the CITY.
ARTICLE 6
TERMINATION, DEFAULT AND REMEDIES
Section 6.1 Termination of Agreement
(a) Failure by the BORROWER to complete the Construction Closing and obtain all
Land Use Approvals and building permits required to construct the Project by January 31,2015,
subject to Force Majeure, or CITY's determination not to approve the Land Use Approvals
required for the Project, including creation of the Market-Rate Parcel, constitutes a basis for the
CITY to terminate this Agreement, subject to the conditions set forth in subsection (b) below. At
BORROWER's request, CITY may, at its sole discretion, extend the time for performance
contained in this paragraph, provided that BORROWER demonstrates to CITY's reasonable
satisfaction that BORROWER is likely to obtain financing and Land Use Approvals required to
construct the Project within a reasonable period.
(b) Upon the happening of the events described in subsection (a), the City may provide
written notice to BORROWER of its intent to terminate this Agreement within one hundred twenty
(120) days pursuant to this Section 6.1 (the "Tennination Noticelt). At its sole discretion, the
Termination Notice may indicate CITY's intent to exercise the Option to Purchase pursuant to
Section 6.4 provided that the Notice of Exercise is delivered to BORROWER concurrently with the
Termination Notice. Upon the effective date of the Tennination Notice, the outstanding principal
balance of the Note shall be due and payable, and the CITY may exercise all rights pursuant to
the Assignment of Documents; and this Agreement will terminate and neither party shall have any
rights against or liability to the other pursuant to this Agreement except for the provisions that state
they survive termination of this Agreement, and the applicable provisions of this Section 6.1,
Section 6.4, and Section 6.5.
Section 6.2 Events of Default.
Upon the occurrence of Default, as defined in this Section, the CITY will give written
notice to BORROWER. If the Default continues uncured for forty .. five (45) days after receipt of
written notice thereof from the CITY to BORROWER or, if a non-monetary breach cannot be
cured within forty-five (45) days, BORROWER diligently undertakes to cUre such breach within
forty-five (45) days but such breach remains uncured within ninety (90) days, then CITY may
terminate this Agreement and exercise all remedies available at law or equity; provided,
however, that if a different period or notice requirement is specified under any other provision of
this Article 6, the specific provisions shall control. Each of the following shall constitute a
"Defaultfl by BORROWER under this Agreement:
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(a) Failure to Make Payment. Failure to repay the principal and any interest on the
Loan within fifteen (15) days after receipt of written notice from the CITY that such payment is
due pursuant to the Loan Documents.
(b) Breach of Covenants. Failure of BORROWER to duly perform, comply with, or
observe any of the conditions, terms, or covenants of any of the Loan Documents.
(c) Default Under Other Loans. A default is declared under any other financing for
the Project or acquisition of the Property by the lender of such financing, or BORROWER fails
to make any payment or perfonn any of its other covenants, agreements, or obligations under any
other agreement with respect to financing for the Project. After the expiration of any cure
periods, the occurrence of any of the events of Default in this paragraph shall act to accelerate
automatically, without the need for any action by the CITY, the indebtedness evidenced by the
Note.
(d) Adverse Financial Condition. A material adverse change in BORROWER's
financial condition, or an event or condition materially impairing BORROWERts intended use of
the Property, or BORROWER's ability to repay the City Loan occurs.
(e) Insolvency. A court having jurisdiction shall have made or entered any decree or
order (1) adjudging BORROWER to be bankrupt or insolvent, (2) approving as properly filed a
petition seeking reorganization of BORROWER or seeking any arrangement for BORROWER
under the bankruptcy law or any other applicable debtor's relief law or statute or the United
States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee
of BORROWER in bankruptcy or insolvency or for any of their properties, (4) directing the
winding up or liquidation of BORROWER, if any such decree or order described in clauses (1)
to (4), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days;
or (5) BORROWER shall have admitted in writing its inability to pay its debts as they fall due or
shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature
described in clauses (1) to (5), inclusive. The occurrence of any of the events of Default in this
paragraph shall act to accelerate automatically, without the need for any action by the CITY, the
indebtedness evidenced by the Note.
(f) Assignment: Attachment. BORROWER shall have assigned its assets for the
benefit of its creditors or suffered a sequestration or attachment of or execution on any
substantial part of its property, unless the property so assigned, sequestered, attached or executed
. upon shall have been returned or released within ninety (90) days after such event or, if Sooner,
prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of
the events of default in this paragraph shall act to accelerate automatically, without the need for
any action by the CITY, the indebtedness evidenced by the Note.
(g) Suspension; Dissolution. BORROWER shall have voluntarily suspended its
business or the dissolution of BORROWER.
(h) Liens on Property and the Project. There shall be filed any claim of lien (other
than liens approved in writing by the CITY) against the Project, the Property, or any part thereof,
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or any interest or right made appurtenant thereto, or the service of any notice to withhold
proceeds of the City Loan and the continued maintenance of said claim of lien or notice to
withhold for a period of twenty (20) days without discharge or satisfaction thereof or provision
therefor (including, without limitation, the posting of bonds) satisfactory to the CITY.
(i) Condemnation. The condemnation, seizure, or appropriation of all or the
substantial part of the Property and the Project, except that condemnation by the CITY shall
cause the City Loan to accelerate but shall not be a Default.
G) Unauthorized Transfer. Any Transfer other than as pennitted by Section 4.14.
(k) Representation or Warranty Incorrect. Any representation or warranty of
BORROWER contained in this Agreement, or in any application, fmancial statement, certificate,
or report submitted to the CITY in connection with any of the Loan Documents, proves to have
been incorrect in any material and adverse respect when made.
(1) Applicability to General Partner. In the event BORROWER is a limited
partnership or limited liability· company, the occurrence of any of the events set forth in
subsection (f), subsection (g), or subsection (h) in relation to the general partner of
BORROWER.
Section 6.3 Remedies.
The OCCU11'ence of any Default hereunder following the expiration of all applicable notice
and cure periods will, either at the option of the CITY or automatically where so specified,
relieve the CITY of any obligation to make or continue the City Loan and shall give the CITY
the right to proceed with any and all remedies set forth in this Agreement and the Loan
Documents, subject to the terms of the subordiIl:ation agreements related to the LISC Loan and
the LIIF Loan, including but not limited to the following:
(a) Acceleration of Note. The CITY shall have the right to cause all indebtedness of
BORROWER to the CITY under this Agreement and the Note, together with any accrued
interest thereon, to become immediately due and payable. BORROWER waives all right to
presentment. demand, protest or notice of protest or dishonor. The CITY may proceed to enforce
payment of the indebtedness and to exercise any or all rights afforded to the CITY as a creditor
and secured party under the law including the Uniform Commercial Code, including foreclosure
under the Deed of Trust. BORROWER shall be liable to pay the CITY on demand all reasonable
expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses)
paid or incurred by the CITY in connection with the collection of the City Loan and the
. preservation, maintenance, protection, sale, or other disposition of the security given for the City
Loan.
(b) Assignment of Documents. The CITY may exercise all rights under the
Assignment of Documents.
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(c) Specific Performance. The CITY shall have the right to mandamus or other suit,
action or proceeding at law or in equity to require BORROWER to perfonn its obligations and
covenants under the Loan Documents or to enjoin acts or things which may be unlawful or in
violation of the provisions of the Loan Documents.
Cd) Right to Cure at BORROWER's Expense. The CITY shall have the right (but not
the obligation) to cure any monetary default by BORROWER under a loan other than the City
Loan. BORROWER agrees to reimburse the CITY· for any funds advanced by the CITY to cure a
monetary default by BORROWER upon demand therefore, together with interest thereon from
the date of expenditure until the date of reimbursement at the Default Rate.
Section 6.4 Option to Purchase, Enter and Possess.
(a) In consideration for the City Loan, BORROWER hereby grants the CITY the
additional right at the CITY's option~ to purchase, enter, and take possession of the Property with
all improvements thereon (the "Option to Purchase") upon an uncured event of Default of
BORROWER or upon termination of this Agreement pursuant to Section 6.1.
(b) If the CITY decides to exercise its Option to Purchase the CITY shall provide
BORROWER, LISC, and LIIF with written notice of its intent to do so (the "Notice of Exercise")
within sixty (60) days of CITY's notice to BORROWER of an uncured event of Default pursuant to
Section 6.2 above or concurrently with delivery of a Tennination Notice pursuant to Section 6.1
above. The Notice of Exercise will include a date for closing which is the later to occur of the
following: (1) not less than ninety (90) days nor more than one hundred fifty (150) days after the
date of the Notice of Exercise in the event of an uncured event of Default; (2) not less than
ninety (90) days nor more than one hundred fifty (150) days after the effective date of the
Termination Notice; or (3) ten (10) days after BORROWER has done all acts and executed all
documents required for close of escrow.
(c) Upon the CITY's delivery of the Notice of Exercise, BORROWER and the CITY
shall promptly open an escrow account. BORROWER shall execute, acknowledge, and deliver a
grant deed in a form acceptable to the CITY transferring the Property to the CITY~ subject only to
the title exceptions that (1) existed at the time of BORROWER's acquisition of the Property, or
(2) were created with the written consent of CITY or approved in writing by CITY or expressly
contemplated or permitted by this Agreement. Closing costs and title insurance shall be paid by
CITY and BORROWER pursuant to the custom and practice in the County of Santa Clara at the
time of the opening of escrow, or as may be provided otherwise by mutual agreement.
BORROWER agrees to do all acts and execute all documents necessary to enable the close of
escrow and transfer of the Property to the City_ The BORROWER shall also provide the CITY all
documents to which the CITY is entitled pursuant to the Assignment of Documents upon the
CITY's exercise of the Option to Purchase.
(d) The purchase price of the Property under the Option to Purchase will be all
amounts due under the City Loan. The CITY shall deem all outstanding amounts due on the City
Loan paid in full upon close of escrow and delivery of all documents to which the CITY is entitled
pursuant to the Assignment of Documents. The City acknowledges that it will take title to the
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Property subject to the liens of the deeds of trust in favor of the Senior Lenders and the County
Loan and the terms and provisions of the documents evidencing the County Loan and the Senior
Loans (except for any modification to such Senior Loan documents that require the approval of
the City pursuant to the applicable subordination agreement and for which such approval was not
obtained).
(e) As used in this Section, the term "City Loan" includes any accrued interest as
calculated pursuant to Section 2.2.
(f) The granting of this Option to Purchase to the CITY shall not impair or limit the
CITY's ability to exercise any other rights or remedies granted to the CITY in this Agreement.
CITY may enforce this Section 6.4 by specific performance.
Section 6.5 Right of Contest.
BORROWER shall have the right to contest in good faith any claim, demand, levy, or
assessment the assertion of which would constitute a Default hereunder. Any such contest shall
be prosecuted diligently and in a marmer unprejudicial to the CITY or the rights of the CITY
hereunder.
Section 6.6 Remedies Cumulative.
No right, power, or remedy given to the CITY by the terms of this Agreement or the
Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and
every such right, power, or remedy shall be cumulative and in addition to every other right,
power, or remedy given to the CITY by the teoos of any such instrument, or by any statute or
otherwise against BORROWER and any other person or entity. Neither the failure nor any delay
on the part of the CITY to exercise any such rights and remedies shall operate as a waiver
thereoft nor shall any single or partial exercise by the CITY of any such right or remedy preclude
any other or further exercise of such right or remedy, or any other right or remedy.
ARTICLE 7
GENERAL PROVISIONS
Section 7.1 Agreement Coordination
(a) 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 or her designee !:)hall supervise the progress and'
execution of this Agreement.
(b) The Executive Director of BORROWER shall represent BORROWER for all
purposes under this Agreement andt as the project director for BORROWER, shall supervise the
progress and execution of this Agreement. '
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(c) Each party may change the party representing it by notice to the other party.
Section 7.2 Relationship of Parties.
Nothing contained in this Agreement shall be interpreted or understood by any of the
parties, or by any third persons, as creating the relationship of employer and employee, principal
and agent, limited or general partnership, or joint venture between the CITY and BORROWER
or BORROWER's agents, employees or contractors, and BORROWER shall at all times be
deemed an independent contractor and shall be wholly responsible for the manner in which it or
its agents, or both, perform the services required of it by the terms of this Agreement.
BORROWER has and retains the right to exercise full control of employment, direction,
compensation, and discharge of all persons assisting in the performance of services under the
Agreement. In regards to the development of the Projectt BORROWER shall be solely
responsible for all matters relating to payment of its employees, including compliance with
Social Security, withholding and all other laws and regulations governing such matters, and shall
include requirements in each contract that contractors shall be solely responsible for similar
matters relating to their employees. BORROWER agrees to be solely responsible for its own acts
and those of its agents and employees.
Section 7.3 No Claims.
Nothing contained in this Agreement shall create or justify any claim against the CITY,
by any person BORROWER may have employed or with whom BORROWER may have
contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the
performance of any work or services with respect to the development of 'the Project, and
BORROWER shall include similar requirements in any contracts entered into for the
development of the Project.
Section 7.4 Amendments.
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 after approval by the City Council and to confer any
consents or approvals that may be provided by the City Manager pursuant to this Agreement.
Section 7.5 Entire Understanding of the Parties.
This Agreement constitutes the entire understanding and agreement of the Parties with
respect to the City Loan.
Section 7.6 Indemnification.
Except as directly caused by the CITY's proven gross negligence or willful misconduct,
BORROWER agrees to indemnify, protect, hold harmless and defend (by counsel reasonably
satisfactory to the CITY) the CITY, and its councilmembers, officers and employees, from all
suits, actions, claims, causes of action, costs, demands, judgments and liens directly or indirectly
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arising out of or resulting from: (i) the making of the City Loan; (ii) BORROWER's performance
or non-performance of its obligations under this Agreement; (iii) any act or omission of
BORROWER, any of its agents, employees, licensees, tenants, contractors, subcontractors or
material suppliers, or other person or entity with respect to the City Loan or the Property (iv) the
acquisition, ownership and maintenance of the Property; (v) the development, marketing, rental
and operation of the Project, or (vi) any documents executed by BORROWER in connection
with the Project. The provisions of this Section 7.6 shall survive the repayment and cancellation
of the Note, the release and reconveyance of the Deed of Trust, and termination of this
Agreement.
Section 7.7 Non-Liability of CITY and crr-y Officials, Employees and Agents.
No member, official, employee or agent of the CITY shall be personally liable to
BORROWER, or any successor in interest, in the event of any Default or breach by the CITY, or
for any amount which may become due to BORROWER or its successor or on any obligation
under the terms of this Agreement. .
Section 7.8 No Third Party Beneficiaries.
BORROWER 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.
Section 7.9 Action by the CITY; Amendments.
Except as may be otherwise specifically provided herein, whenever any approval, notice,
direction, consent, request, extension of time, waiver of condition, termination, or other action by
the CITY is required or permitted under this Agreement, such action may be given, made, or
taken by the City Manager without further approval by the City Council, and any such action
shall be in writing.
Section 7.10 Wai vers.
Any waiver by the CITY of any obligation or condition in this Agreement must be in
writing. No waiver will be implied from any delay or failure by the CITY to take action on any
breach or Default of BORROWER or to pursue any remedy allowed under this Agreement or
applicable law. Any extension of time granted to BORROWER to perform any obligation under
this Agreement shall not operate as a waiver or release from any of its obligations under this
Agreement. Consent by the CITY to any act or omission by BORROWER shall not be construed
to be a consent to any other or subsequent act or omission or to waive the requirement for the
CITY's written consent to future waivers.
Section 7.11 Notices. Demands and Communications.
All notices, consents, communications or transmittals required by this Loan Agreement
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shall be made, in writing, and shall be communicated by the United States mail, certified, return
receipt requested or by express delivery or overnight courier service with a delivery receipt, and
shall be deemed given as of the date shown on the delivery receipt as the date of delivery or the
date on which delivery was refused, and shall be addressed to the following addresses, or such
other address as either party may designate, from time to time, by written notice sent to the other
party in like manner:
CITY:
City of Palo Alto
Office of the City Clerk
PO Box 10250
Palo Alto, CA 94303
With a copy to:
City of Palo Alto
Director, Department of Planning & Community Environment
POBox 10250
Palo Alto, CA 94303
BORROWER:
Palo Alto Housing Corporation
725 Alma Street
Palo Alto, CA 94301
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected party may from time to time designate by mail as provided in this
Section. Receipt shall be deemed to have occurred on the date shown on a written receipt for
delivery or refusal of delivery.
Section 7.12 Awlicable Law and Venue.
This Agreement shall be deemed a contract made under the laws of the State of
California, and for the purposes hereof shall be governed and construed by and in accordance
with the laws of the State of California. 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.
Section 7.13 Parties Bound.
Except as otherwise limited herein, the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties and their heirs, executors, administrators, legal
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representatives, successors and assigns. Any provision of this Loan Agreement which is
characterized as a covenant or a condition shall be deemed both a covenant and a condition. This
Agreement is intended to run with the land and shall bind BORROWER and its successors and
assigns in the Property and the Project for the entire Tenn, and the benefit hereof shall inure to
the benefit of the CITY and its successors and assigns. .
Section 7.14 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing
party will have the right to recover its reasonable attorneys' fees and costs of suit from the other
party.
Section 7.15 Severability.
If any tenn of this Agreement is held by a court of competent jurisdiction to be invalid,
void or Wlenforceable, the remainder of the provisions shatl continue in full force and effect
unless the rights and obligations of the parties have been materially altered or abridged by such
invalidation, voiding or unenforceability.
Section 7.16 Force Majeure.
In addition to specific provisions of this Agreement, performance by either party shall not
be deemed to be in default where delays or defaults are due to to war~ insurrection, strikes, lock
outs or other labor disturbances, one or more acts of a public enemy, war, riot, sabotage,
blockade, embargo, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of
transportation, court order, delays or failures of perfonnance by any governmental authority or
utility company (other than the acts or failure to act of the CITY and so long as the party seeking
the extension has adequately complied with the applicable processing requirements of such
governmental authority or utility company), delays resulting from changes in any applicable
laws, rules~ regulations, ordinances or codes, or a change in the interpretation thereof by any
governing body with jurisdictio~ or any other cause (other than lack of funds of BORROWER
or BORROWER's inability to finance the construction of the Project) beyond the reasonable
control or without the fault of the party claiming an extension of time to perform or an inability
of performance. An extension of time for any cause will be deemed granted if notice by the party
claiming such extension is sent to the other within ten (10) days from the commencement of the
cause and the party granting the extension agrees to the extension in writing. In no event shall the
CITY be required to agree to cumulative delays in excess of one hundred eighty (180) days.
Section 7.17 Conflict of Interest.
(a) Except for payment of salaries and administrative costs. no person who is an
employee~ agent, consultant, officer or official of BORROWER who exercises or has exercised
any functions or responsibilities concerning the activities under this Agreement, or who is in a
position to participate in a decision making process or gain inside information with regard to
such activities, may obtain a personal or financial interest or benefit from any such activity, or
have an interest in any contract~ subcontract, or agreement with respect thereto, or the proceeds
895\05\1267519.3
1122f.1013
39
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.
(b) BORROWER further covenants that it presently has no interest and shall not
acquire any interest, direct or indirect, financial or otherwise, which would conflict in any
manner or degree with the performance of the services hereunder. BORROWER also covenants
that, in the performance of this Agreement, no subcontractor or person having such interest shall
be employed by BORROWER. In addition, BORROWER certifies that no one who has or will
have any financial interest under this Agreement is an officer or employee of CITY.
Section 7.18 Time of Essence.
Time is of the essence with respect to the performance of each of the covenants and
agreements contained in this Agreement.
Section 7.19 Title of Parts and Sections; Exhibits.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and shall be disregarded in interpreting any part of the Agreement's provisions.
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 hereOf.
Section 7.20 Multiple Originals; Counterpart.
This Agreement may be executed in mUltiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
Section 7.21 Recording of Memo of Agreement.
The CITY and BORROWER shall cause the Memo of Agreement to be recorded against
the Property in the Official Records of Santa Clara County.
Section 7.22 Further Actions.
The parties agree that they will take such further actions, and execute such further
documents, as may be necessary or appropriate in order to carry out the purposes of this
Agreement.
/I
/I
/I
II
895\05\1267519.3
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40
895\05\1267519.3
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41
WHEREFORE, this Agreement has been entered into by the undersigned as of the date
first above written.
APPROVED AS TO FORM:
s~ entor SSlstant Ity ttomey
APPROVED:
Director of Planning and
Community Environment
EXHIBITS:
EXHIBIT A: Legal Description of the Property
EXHIBIT B: Note
EXHIBIT C: Deed of Trust
CITY OF PALO ALTO, a chartered city
and municipal corporation
BORROWER:
Palo Alto Housing Corporation,
a California nonprofit public benefit
corporation
BY:~· -
Candice R. Gonzalez
Executive Vice President
Taxpayer LD. No. 9/-Q...ICfg 711)
EXHIBIT D: Estimated Project Costs and Sources of Funds
EXHIBIT E: Schedule of Performance
EXHIBIT F: Assignment of Documents
EXHIBIT G: Insurance Requirements
Loan Agreement 42
Signature Page
895\05\1261519.3
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Palo Alto, County of Santa Clara, State of California,
described as
follows:
TRACT ONE:
PARCEL ONE:
PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED/ "MAYBELL
TRAer', WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF
THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE 19, 1905 IN BOOK K
OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A HUB SET AT THE POINT OF INTERSECTION OF THE
SOUTHEASTERLY LINE OF MAYBELL AVENUE WITH THE NORTHEASTERLY LINE OF 10,
AS SAID AVENUE AND LOT ARE SHOWN UPON THE MAP ABOVE REFERRED TO,
RUNNING THENCE SOUTH 28° 481 WEST ALONG THE SAID SOUTHEASTERLY LINE OF
MAYBELL AVENUE 145.00 FEET TO THE TRUE POINT OF BEGINNING OF THE
FOLLOWING DESCRIBED PARCEL OF LAND; THENCE AT RIGHT ANGLES TO SAID
SOUTHEASTERLY LINE OF MAYBELL AVENUE/ SOUTH 61° 12r EAST 65.00 FEET;
THENCE RUNNING PARALLEL WITH SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE
SOUTH 28° 481 WEST 111.00 FEET; THENCE NORTH 61° 12' WEST 65.00 FEET TO A
POINT IN SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE; THENCE ALONG SAID
SOUTHEASTERLY LINE OF MAYBELL AVENUE NORTH 28° 481 EAST 111.00 FEET TO
THE POINT OF BEGINNING.
PARCEL lWO:
PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAYBELL
TRACT", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF
THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE. 19, 1905 IN BOOK
"K' OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
BEGINNING AT A POINT ON THE SOUTHEASTERLY LINE 'OF MAYBELL AVENUE,
DISTANT THEREON S. 28° 48' W. 84.83 FEET FROM THE POINT OF INTERSECTION
THEREOF WITH THE NORTHEASTERLY LINE OF LOT 10, AS SAID AVENUE AND LOT
ARE SHOWN UPON THE MAP OF MAYBELL TRACT HEREINABOVE REFERRED TO;
THENCE PARALLEL WITH SAID NORTHEASTERLY LINE OF LOT 10/ S. 61° 14r 22" E.
895\05\1267519.3
1122/2013
80.74 FEET; THENCE PARALLEL WITH SAID SOUTHEASTERLY LINE OF MAYBELL
AVENUE, S. 28° 48' W. 169.66 FEET; THENCE PARALLEL WITH SAID NORTHEASTERLY
LINE OF LOT 10, N. 61° 14' 2211 W. 15.74 FEET; THENCE PARALLEL WITH THE
SOUTHEASTERLY LINE OF MAYBELL AVENUE N. 28° 48' E. 109.49 FEET; THENCE
PARALLEL WITH SAID NORTHEASTERLY TINE OF LOT 10 N. 61° 14' 2211 W. 65 FEET
TO THE SOUTHEASTERLY UNE OF MAYBELL AVENUE; THENCE ALONG SAID
SOUTHEASTERLY LINE, N. 28° 48' E. 60.17 FEET TO THE POINT OF BEGINNING.
TRACT TWO:
PARCEL ONE:
PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, ·uMAYBELL
TRACT", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF
THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE 19, 1905 IN BOOK K
OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A HUB SET AT THE POINT OF INTERSECTION OF THE
SOUTHEASTERLY LINE OF MAYBELL AVENUE WITH THE NORTHEASTERLY LINE OF
LOT 101 AS SAID AVENUE AND LOT ARE SHOWN UPON THE MAP ABOVE REFERRED
TO; RUNNING THENCE SOUTH 28° 48' WEST ALONG THE SAID SOUTHEASTERLY LINE
OF MAYBELL AVENUE 339.32 .FEET TO AN IRON PIPE SET AT THE INTERSECTION
THEREOF WITH THE SOUTHWESTERLY LINE OF SAID LOT 10; RUNNING THENCE
SOUTH 610 12' EAST ALONG SAID LAST NAMED LINE 96. 14 FEET TO AN IRON PIPE
AT THE WESTERNMOST CORNER OF THAT CERTAIN 0.94 ACRE TRACT OF LAND
DESCRIBED IN THE DEED FROM MARTHA A. CHRISTESON TO GEO M. ANTHONY,
DATED MAR~H 5, 1937 RECORDED MARCH 26, 1937 IN BOOK 814 OF OFFICIAL
RECORDS, PAGE 434, SANTA CLARA COUNTY RECORDS; RUNNING THENCE NORTH
280 481 EAST ALONG THE NORTHWESTERLY LINE OF SAID 0.94 ACRE TRACT 99.68
FEET TO AN IRON PIPE AT THE NORTHERN,MOST CORNER THEREOF; RUNNING
THENCE SOUTH 57° 27' 3811 EAST ALONG THE NORTHEASTERLY LINE OF THE SAID
0.94 ACRE TRACT 221.17 FEET TO AN IRON PIPE; THENCE LEAVING SAID LAST
NAMED LINE AND RUNNING NORTH 28° 48r EAST AND PARALLEL WITH THE SAID
SOUTHEASTERLY LINE OF MAYBELL AVENUE 254.14 FEET TO AN IRON PIPE SET ON
THE SAID NORTHEASTERLY LINE OF LOT 10; RUNNING THENCE NORTH 61°141 2211
WEST ALONG SAID LAST NAMED LINE 316.84 FEET TO THE POINT OF BEGINNING.
CONTAINING APPROXIMATELY 2 ACRES, SURVEYED AND MONUMENTED IN JANUARY
1951 BY GEO S. NOLTE, CIVIL ENGINEER AND LAND SURVEYOR.
EXCEPTING THEREFROM THAT CERTAIN PARCEL OF LAND DESCRIBED AS FOLLOWS:
895\05\1267519.3
112212013
PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAYBELL
TRACT", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF
THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE 19, 1905 IN BOOK K
OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A HUB SET AT THE POINT OF INTERSECTION OF THE
SOUTHEASTERLY LINE OF MAYBELL AVENUE WITH THE NORTHEASTERLY UNE OF
LOT 10, AS SAID AVENUE AND LOT ARE SHOWN UPON THE MAP ABOVE REFERRED
TO; RUNNING THENCE SOUTH 28° 48' WEST ALONG THE SAID SOUTHEASTERLY LINE
OF MAYBELL AVENUE 145.00 FEET TO THE TRUE POINT OF BEGINNING OF THE
FOLLOWING DESCRIBED PARCEL OF LAND; THENCE AT RIGHT ANGLES, TO SAID
SOUTHEASTERLY LINE OF MAYBELL AVENUE, SOUTH 61° 121 EAST 65.00 FEET;
THENCE RUNNING PARALLEL WITH THE SOUTHEASTERLY· LINE OF MAYBELL AVENUE
SOUTH 28° 48' WEST 111.00 FEET'; THENCE NORTH 61° 12'. WEST 65.00 FEET TO A
POINT IN SAID SOUTHEASTERLY LINE OF MAYBELL AVENUE; THENCE ALONG SAID
SOUTHEASTERLY LINE OF MAYBELL AVENUE NORTH 28° 48' EAST 111.00 FEET TO
THE TRUE POINT OF BEGINNING.
ALSO EXCEPTING THEREFROM:
PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAYBELL
TRACT", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF
THE COUN1Y OF SANTA CLARA, STATE OF CALIFORNIA ON JUNE 19, 1905 IN BOOK K
OF MAPS, AT PAGES 88 AND 89, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE SOUTHEASTERLY LINE OF MAYBELL AVENUE,
DISTANT THEREON S. 28° 48' W. 84.83 FEET FROM THE POINT OF INTERSECTION
THEREOF WITH THE NORTHEASTERLY UNE OF LOT 10, AS SAID AVENUE AND LOT
ARE SHOWN UPON THE MAp OF MAYBELL TRACT HEREINABOVE REFERRED TO;
THENCE PARALLEL WITH SAID NORTHEASTERLY LINE OF LOT la, S. 610 14' 2211 E.
80.74 FEET; THENCE PARALLEL WITH SAID SOUTHEASTERLY LINE OF MAYBELL
AVENUE, S. 28° 48' W. 169.66 FEET; THENCE PARALLEL WITH SAID NORTHEASTERLY
UNE OF LOT 10, N. 61° 14' 221f W. 15.74 FEET; THENCE PARALLEL WITH THE
SOUTHEASTERLY LINE OF MAYBELL AVENUE N. 280 48' E. 109.49 FEET; THENCE
PARALLEL WITH SAID NORTHEASTERLY TINE OF LOT 10 N. 61° 14' 2211 W. 65 FEET
TO THE SOUTHEASfERLY LINE OF MAYBELL AVENUE; THENCE ALONG SAID
SOUTHEASTERLY LINE, N. 28° 4~' E. 60.17 FEEfTO THE POINT OF BEGINNING.
ALSO EXCEPTING THEREFROM:
PORTION OF LOT 10, MAP OF MAYBELL TRACT, FILED JUNE 19, 1905, BOOK K OF
MAPS AT PAGE 88, SANTA CLARA COUNTY RECORDS, DESCRIBED AS FOLLOWS:
895\05\1267519.3
1/2212013
BEGINNING AT THE INTERSECTION OF THE SOUTHEAST LINE OF MAYBELL AVENUE
AND THE NORTHEAST LINE OF CLEMO AVENUE, FORMERLY PARK AVENUE; THENCE
FROM SAID POINT OF BEGINNING N. 28° 48' E. ALONG SAID LINE OF MAYBELL
AVENUE 13.00 FEET; THENCE LEAVING SAID LINE S. 61° 12' E. 10.00 FEET; THENCE
5. 28° 48' W 3.00 FEET; THENCE ON THE ARC OF A TANGENT CURVE TO THE LEFT
WITH A RADIUS OF 10 FEET, THROUGH A CENTRAL ANGLE OF 900 , AN ARC DISTANCE
OF 15.71 FEET TO SAID NORTHEASTERLY UNE OF CLEMO AVENUE; THENCE ALONG
SAID LINE N. 610 12' W. 20.00 FEET TO THE POINT OF BEGINNING.
PARCEL lWO:
BEGINNING AT A POINT IN THE SOUTHWESTERLY LINE OF LOT 10, DISTANT
THEREON N. 61° 12' W, 271.16 FEET FROM THE MOST SOUTHERLY CORNER OF SAID
LOT 10 IN THE NORTHWESTERLY LINE OFARASTRADERO ROAD, AS SAID LOT AND
ROAD ARE SHOWN UPON THE MAP OF MAYBELL TRACT HEREINAFTER REFERRED TO;
THENCE LEAVING SAID SOUTHWESTERLY LINE AND RUNNING N. 28° 48r E., 85.35
FEET, MORE OR LESS, TO A POINT IN THE NORTHEASTERLY LINE OF THAT CERTAIN
0.94 ACRE TRACT DESCRIBED IN THE DEED FROM MARTHA A. CHRISTESON TO
GEORGE M. ANTHONY, DATED MARCH 5, 1937 AND RECORDED MARCH 26, 1937 IN
BOOK 814 OF OFFICIAL RECORDS PAGE 434, SANTA CLARA COUNTY RECORDS; SAID
POINT BEING THE MOST WESTERLY CORNER OF THAT CERTAIN PARCEL OF LAND
DESCRIBED IN THE DEED FROM CURTIS DAY, ET UX, TO SCOBLE, INC., A
CORPORATION DATED APRIL 29, 1958 AND RECORDED MAY 12, 1958 IN l300K 4072
OF OFFICIAL RECORDS, PAGE liD, SANTA CLARA COUNTY RECORDS; THENCE
RUNNING ALONG THE SAID NORTHEASTERLY LINE OF THE 0.94 ACRE PARCEL OF
LAND N. 57° 26' W. 221.17 FEET TO THE MOST NORTHERLY ,CORNER OF SAID 0.94
ACRE PARCEL; THENCE RUNNING ALONG THE NORTHWESTERLY LINE OF SAID 0.94
ACRE PARCEL, S. 28° 481 W., 99.68 FEET TO THE MOST WESTERLY CORNER
THEREOF; THENCE RUNNING ALONG THE SOUTHWESTERLY LINE OF THE SAID 0.94
ACRE PARCEL, SAID UNE ALSO BEING THE SAID SOUTHWESTERLY LINE OF LOT 10
HEREINABOVE REFERRED TO, S. 61° 121 E" 220.70 FEET TO THE POINT OF
BEGINNING, AND BEING A PORTION OF LOT 10, AS SHOWN UPON THAT CERTAIN
MAP ENTITLED, "MAYBELL TRACT, MAYFIELD SANTA CLARA CO.n, WHICH MAP WAS
FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA
CLARA, STATE OF CALIFORNIA ON LIME 19, 1905 IN BOOK UK" OF MAPS, PAGE 88
AND 89.
APN: 137-25-108-00 and 137-25-109-00
895\05\1267519.3
1122/2013
EXHIBITB
SCHEDULE OF PERFORMANCE
This Schedule of Performance summarizes the schedule for various activities under the
Acquisition and Development Loan Agreement and Option to Purchase (the "Agreement") to
which this exhibit is attached. The description of items in this Schedule of Performance is meant
to be descriptive only, and shall not be deemed to modify in any way the provisions of the
Agreement to which such items relate.
Whenever this Schedule of Performance requires the submission of plans or other
documents at a specific time, such plans or other documents, as submitted, shall be complete and
adequate for review by the CITY or other applicable governmental entity within the time set
forth herein. Prior to the time set forth for each particular submission, BORROWER shall
consult with CITY staff informally as necessary concerning such submission in order to assure
that such submission will be complete and in a proper form within the time for submission set
forth herein.
As provided in Section 3.1 of this Agreement, this Schedule of Performance may be modified
by agreement of the City Manager on behalf of the CITY and the BORROWER.
Action
1. Application -.Land Use Approvals.
BORROWER shall submit a complete
application for the CITY Land Use
Approvals, including CEQA review.
2. Receipt -Land Use Approvals.
BORROWER shall obtain the CITY Land
Use Approvals.
3. Application Tax Credits.
BORROWER shall submit an application
to TCAC for a preliminary reservation of
9% tax credits.
4. Application -Building Permit.
BORROWER shall apply for a building
permit from CITY.
5. Receipt -Tax Credits. BORROWER
receives approval for tax credit allocation.
895\05\1267519.3
112212013
Date
By January 15,2013.
By July 1,2013.
July 2013 (if Land Use Approvals are
approved)
September 15,2013
October 31,2013
Action
6. Receipt -First Building Permit.
BORROWER shall obtain the first
building permit from City.
7. Submission -Final Construction and
Permanent. Financing Plan. BORROWER
shall prepare and submit the Construction
Financing Plan for CITY approval.
8. Construction Loan Closing.
BORROWER shall satisfy all conditions
in Section 2.7 and commence construction.
9. Permanent Loan Closing and Complete
Rent-Up and Occupancy.
895\05\1267519.3
112212013
Date
October 31t 2013
Within 30 days after receipt of tax credit
allocation from TCAC.
November 31, 2013 to close construction
loans.
TCAC deadline to start construction April
2014.
April 30, 2015.
CONTRACTORS TO THE CITY OF PALO ALTO (Cltv), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND 'MAINTAIN
INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH A BEST'S KEV RATING OF ,A-:VII, OR
HI.GHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. ,
AWARD IS CONTINGENT'ON COMPUANCE WITH CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:
MINIMUM LIMITS
REQUIRED TYPE OF COVERAGE REQUIREMENT
EACH OCCURRENCE AGGREGATE
YES WORKER'S COMPENSATION AUTOMOBilE STATUTORY
d.;1..000 YES lIABILIlY STATUTORY ,000 ~-z,\oa
BODILY INJURY $I,ego,ggg. yes COMPREHENSIVE GENERAlllABllITY, "~ ~OOO ~-a:~-'b
INCLUDING PERSONAL INJURY, BROAD PROPERTY DAMAGE i6 FORM PROPERTY DAMAGE BLANKET ~'l.-. 00, 000
CONTRAcrUAI, AND FIRE LEGAlllABIUlY BODilY INJURY & PROPERTY DAMAGE COMBINED. .'.888,88' ."999,Q~
BODILY INJURY $1,000,000 $1~OOO,OOO -EACH PERSON $1,000,000 $1JOOO,OOO -EACH OCGURRENCE $11000,000 $1,000,000 YES COMPREHENSIVE AUTOMOBllE'llA81L1lY}
INCLUDING, OWNED, HIRED, NON-OWNED PROPERlY DAMAGE $1,000,000 $1,000.000
BODILV INJURV AND PROPERlY DAMAGE, $1,000,000 $1,000,000
COMBINED
NO PROfESSIONAL UABIUTY, INCLUDING,
ERRORS AND OMISSIONS, MAlPRAcnCE
(WHEN APPLICABLE), AND NEGLIGENT J
PERFORMANCE ALL DAMAGES $1,000,000
YES THE CITV OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: PROPOSER, AT ITS SOLE COST A~D EXPENSE, SHAll OBTAIN AND
MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN
DESCRIBED, INSURING NOT ONLY PROPOSER AND ITS SUBCONSULTANS, IF AN'l, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION;
EMPLOYER'S liABILITY AND PROfESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CllV, ITS COUNCIL MEMBERS, OFFICERS, AGENTS,
AND EMPLOYEES.
I. INSURANCE COVERAGE'MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE·
CANCELLATlONj AND
B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIQING iNSURANCE COVERAGE FOR, CONTRACTOR'S AGREEMENT TO
INDE~NIFY CITY -seE, SAMPLE AGREEMENT FOR SERVICES.
II. SUBMIT CERTIFICATE(S} OF INSURANCE EVIDENCING REQUIRED COVERAGE, OR COMPLETE THIS SECTION AND IV THROUGH V, BELOW.
A. NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER):
8. . NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER:
C. POLICY NUMBER(S):
D. DEDUCTIBLE AMOUNT{S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL):
0,
~
~O
ODO
~OOO
.~O
III. AWARD IS CONTINGENT ON COMPUANCE WITH CITY'S INSURANCE REQUIREMENTSi AND PROPOSER'S SUBMITTAL OF CERTIFICATES OF
INSURANCE EVIDENCING COMPLIANCE WITH THE REQUIREMENTS SPECIFIED HEREIN. .
IV. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREsn
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS
POLICY IS PRIMARY AND 15 NOT ADDITIONAl TO OR CONTRIBUTING WITH ANY OTHi!R INSURANCE CARRIED BY OR FOR THE '
BENEFIT OF THE ADDITIONAL INSURES.
B. CROSS LIABILITY
C.
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSURES UNDER THE POLICY SHALL NOT, FOR THAT
REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTJ:lER, BUT THIS ENDORSEMENT, AND THE NAMING
OF MULTIPLE INSUREDS, SI:IAlL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.
NOTjCE OF CANCELlATION
1. IF THE POLICY IS CANCELE BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF
PREMIUM, TH . SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE
EFFECTIVE DATE OF CANCELLATION. eJfttRAe.-rCt.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NONMPAYMENT OF PREMIUM; THE 'ItJ5t!:MN.
~ SHAll PROVIDE CITY AT LEAST A TEN (10) DAY WRlmN NOTICE BEfORE THE EFFECTIVE DATE OF
CANCELLATION.
V. PROPOSER CERTIfiES THAT PROPOSER'S INSURANCE COVERAGE MEETS THE ABove REQUIREMENTS:
THE INFORMATION HEREIN IS CERTIFI~D CORRECT BY SIGNATURE(S) BELOW. SIGNATURE(S) MUST BE SAME SIGNATURE(S) AS
APPEAR(S) 'ON SECTION II, AnACHMENT A, PROPOSER'S INFORMATION FORM.
. f1Jo Alb L-bU:Si1]3 ~C2tftov\
~ ~
FIrm:
Signature:
Name:
(Print or tvpe name)
Signature:
Name:
(Print or type name)
NOTICES SHAlL BE MAILED TO:
PURCHASING AND
CONTRACT ADMINISTRATION
CITY OF PALO ALTO
P.O. BOX 10250
PALO ALTO, CA 94303;
I.
EXHIBIT G
~~D· CERTIFICATE OF LIABILITY INSURANCE I DATE (MMJDDIYYYY)
10110/3012
THIS CERTIFICATE IS ISSUED AS A MAnER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON·THE CERTIFICA"rE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERl'IFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S). AUTHORIZED
REPRE8ENTATIVE OR PRODUCER. AND THE CERTifiCATE HOLDER,
IMPORTANT: If the conlfleate holder I. 8n ADDJTlONAL INSURED. the polloy('e.) mU8t be endorsed. If SUBROGATION 18 WAIVED, subject to
the terms and condition. of the policy, certain policies may require an endorsement. A atatement on this certificate does not confer rights to the
certificate holder In lieu of 8uch endoraement(i).
~r PRODUOI!R 0726293 1-415 .. 546-9300
Arthur J. Gallagher' Co.
ZD8uranae Broker. of California, Inc., Lioense 80726293 j~l! I r~.N01:
One Mark~t Pla •• , Spear.Tower
Suit.e 200
San Pranaisao, CA 94105 INSUReR(S' AflFORDlNG COVERAGE HAle'
IN8URERA: PHlLADBLPHIA nm INS co 18058
IN8URHD INSURER B: BVBRBS't H'A'rL INS CO 10120
Palo Alto Dousing corporation IN8URERC:
725 AID". Street INSURERD:
Palo Alto, CA 94301 INSURER E·;
INSURIItF:
COVERAGES CERTIFICATE NUMBER· 29625283 REVISION NUMBER'
THIS IS TO CERTIFY THAT THE POUCIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED, NOlWlTHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO All THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID ClAIMS. Jr.r: TYPE OF INSURANCE IInL PO~JCYEFF PQ'-JC;,(~P. LIMITS
A GENERAL LIABILITY PBPKB43325 0'/01/1~ 04/01/13 EACH OCCURReNCE $ 1,000.000 -=-~ 3MMERCfAl GENERAL UABILITY ~~~$ES'tE~~~nr.e~ $ 300.000
_ ·CLAlMS·MADE ~ OCCUR MED EXP (Any One PGllon) $15,000
f--PERSONAL & ADV INJURY $ 1,000.000
I--GENERAl.. AGGREGATE $ 2,000.000
n'L AGGRnEl.lMIT APm PER: PRODUCTS· COMPIOP AGO $ 2,000,000
POLICY ~.tWT X LOC $
A AUTOMOBILE LlABIUTY PKPKB43325 04/01/1~ 04/01/13 q,OMBINED BINGLE LIMIT S 1,000,000 I--
ANY AUTO bODILY INJURY (Per parlon) $ I--ALLOWNEO r--SCHEDULED
f--AUTOS AUTOS 800lL V INJURV (Per aocldent) • I--NON-OWNED r~~~~I~AMAGE X HIRED AUTOS X • t--I--AUTOS
~ ~
A X UMBRELLA LIAB ~OCCUR PHtJB377060 O~/Ol/1~ 04/01/13 EACH OCCURRENCE I $10.000,000 "\ f--EXCE88LIAB CLAIMS·MADE AGGREGATE l $10,000.000 1
OED I X ~ RI!.TENTIONS 10,000 ....... ......... L
B WORKERS COMPeNSATION CA10001196121 04/01/1, 04/01/13 X I T~~Ir'J~~ I 1°J.t!' '\ AND EMPLOYlR8' LIABILITY Y N
ANY PROPRIETOR/PARTNER/EXECUTIVE 0 NJA E.l. eACH ACCIDENT $1,000,000 \ OFFICERIMEMBIiR EXClUDED7 (MandatOI)' In NH) E.L. DISEASE· EA EMPLOYEE $ 1.000.000 ,
g~~~~~ ~~~PERATIONS below ~ E.L. DISEASE -POL lOY LIMIT $ 1,000.000
A P~ofe88ional Liability PHPK84332S 04/01/1. 04/01/13 Baoh Inaident 1,000,000
Aggregate 2,000,000
DESCRIPTION OF OPERAnONS I LOCATIONS I VEHICLE8 (Atte.Dh ACORD 1Dt, AddlHon.rRtm.rk, 8c11,dule, Ifmor'lJ)lc.I, required) ~1!:l Rei Proof of ~nBuraDOe regarding Mayb911 Purohase in November
Certificate holder is named a. additional insured. Insruanoe is prima~. ~ Policy h •• 60 days notig8 of oanoellation and 10 days for non payment of premi~
~O~Z ~~
CERTIFICATE HOLDER CANCELLA1 ION
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P.o. Box 10250 AUTIi ............... ATM! d
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This endorseme~t modifies Insurance provided under the following:
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Name of Person or Organization: Ci toy of Palo Alto
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(If no entry appears above. information required to complete this endorsement will be shown in the Declarations
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NAME OF INSURED: Palo Alto HoudJlg corporation
&ldi~Qrml QllmiRllgC gf QR!ilmtlmutlBfIIl'lrk~ frQm ~_ 1 :
Addltlonallnfonnaljon:
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SUpp (06104)
Minor, Beth
From:
Sent:
To:
Subject:
l! \ .\ .... ,"'.,l."', .1.
David Coale <david@evcl.com>
Sunday, December 08,201310:48 PM 13 DEC -9 Prj 3: 02
Council, City
A Conversation on the Future of our City
A Conversation on the Future of our City.
I listened to the Study session on the future of our City with great interest. It occurred to me that although the city
guidelines and policies are well written and well meaning, the missing part (as expressed by the new planning director), I
believe, is an overall integration of the plans/policies with the overall emphasis on sustainability.
With this emphasis on sustainability, I believe this will address the parking and congestion problems, which are perhaps
the most complained about problems and will also help address the greatest problem we face today, the issue of climate
change.
Just as conservation is the best way to address energy and water use, I believe that conservation ofthe parking and car
use is also the first, cheapest and best option to address these problems. Stanford has thrived under no new trips. How
do we do this in Palo Alto? With the recent proclamation by Mayor Scharff of 60% reduction of C02 in the next ten
years, we will have to have a large reduction in car use. EVs will do nothing to solve the parking and congestion
problems, we have to do more.
The real question might be, how do we evolve Palo Alto to look more like Copenhagen where 60% of the trips are by
bicycle? Less congestion, no parking problems, healthier & happier residence and reduced GH6 emissions, that's where
we need to go. I believe implementing the bike/ped plan is one of the best, fastest ways to move forward on this.
Looking again to our neighbors at Stanford, how do we become more like them in terms of less traffic and parking
problems? It's the bike.
I am not saying this will solve all the issues brought up in the study session, it will not, but it should be accelerated if we
are going to move in the direction of less parking and congestion problems while decreasing our GHG emissions and
increasing the quality of life in Palo Alto.
Sincerely,
David Coale
766 Josina Ave
Palo Alto, CA 94306
General notes on the discussion:
Measure D did not loose on its merits, it lost because people wanted to blame the council for all that is not working in
Palo Alto. There is a trust issue that Councilman Burt spoke to so it will be very important to regain credibility and
transparency and this is very important.
Don't be too reactive. The Maybell project was a good one and failed for other reasons as noted above. There was also
not enough voters to really know what people thought. Slight tweaks to the process could probably solve the problem.
PCs I think are still very useful.
1
Data is important but let's not go overboard. The Matadero bike boulevard was recently rejected in part because of lack
of data. I think the PTe was really reacting to the vote on Measure D and not so much on the bike plan which has been
in front ofthe council and PTe many times. How many reviews do you need? Let's not kill good projects by beating
them to death with the Palo Alto process.
We really need to get a sustainability coordinator in place to help with all ofthese programs/projects/issues and to
integrate them for the long-term sustainability and quality of life in Palo Alto. This is way long over due.
2
Minor, Beth
From:
(, I T 'v ,;: ;:\ j .:, i\ I \ U, L r\
Amy Keohane <amykeohane@hotmail.co'~~T'Y\:L'[i~';:\;S OFF\CE
Sent:
To:
Friday, December 06, 2013 10:14 AM r" I I r, U 7: 55
Council, City 130cL 1""1,,
Subject: Permits and 2 hr parking in the DTN residential
I just wanted to voice my opinion that I am totally against the permit parking and parking limits of 2 hours in
our DTN residential area. You aren't fixing the problem you are just creating more problems for the
employees of DT to be running to their cars and moving them and then if they are late collecting more
, fees. Many of these employees are paid minimum wage and they are crucial for the smaller business of
downtown. Maybe if you demand that the larger employers pay for at least 50% of parking permits for their
employees, ie apple, cheescake,and any of the companies that are established in the DT. With that said, I
recently talked to someone and they couldn't even a get a permit for the lots as they were full.
I pay enough to live in downtown, I do not want to have to pay more for my parking permit nor limit myself on
the street I live 'on to 2 hrs.
While I am writing, I should bring up the street sweeping on Tues. The signage in the DTN is horrible, they
have one sign in the beginning and then no more anywhere else on the street. If a person does a 3 point turn
in the middle of the street and does not see that one sign posted in the beginning of the street, they end up
getting a ticket. More signage needed
Amy Keohane
650-346-5306
1
Minor, Beth
From:
Sent:
To:
Cc:
Subject:
Attachments:
Eric Filseth <efilseth@gmail.com>
Monday, December 09,2013 5:28 Pfv13 DEC 1 1 r\fl 7: 56
Council, City
Michael Hodos; Neilson Buchanan
Parking Intrusion -Slides for 240 Hamilton Discussion
Downtown Neighborhood Parking -Impacts 1.1.pdf
Folks, a few of us would like to show some pictures tonight during the 240 Hamilton segment. However since we're not·
sure about actual A/V access during the public'comment period, here is a pdf of mine and Michael Hodos,' which will
hopefully make it into the public packet.
On the "picture vs 1,000 words," principle, the first part relates to how all these abstract numbers actually map into a
residential neighborhood setting, containing not just cars but also bikes, kids, joggers, people in crosswalks etc.
The second part is only one slide and is Michael's calculation of the parking deficit at 240 Hamilton.
Regards, Eric
1
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Even Valet Parking Now Appearing in DTN/DTS
Valet parking stand, corner Hawthorne and High Streets (for a commercial event)
Valet parking car on DTN street
(he tried first by Johnson Park but none available; found this space on Poe Street)
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240 Hamilton Commercial Parking Deficit
Required Spaces for Commercial Space 11,527 sf 46
Credit Spaces
Assessed Space based on original building 5000 sf -20
Transferable Development Rights 5000 sf -20
In Lieu Payments 1527 sf -6
Parking Space Deficits
Curb parking spaces lost 2
TOR parking space deficit 20
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Total Deficit 28 (60°/,,)
Where will these cars park?
Minor, Beth
From:
Sent:
To:
Subject:
CITY CLE~i:,'S UFFICE
Nathan at Watercourse Way <nathan.wcw@gmail.com>
Wednesday, December 11, 2013 lP3i{)~ I I PH 12: 02
Council, City; Aknin, Aaron; Gitelman, Hillary; Sullivan, Jessica; Keene, James
I hope the city council creates a balanced solutiqn regarding RPP proposal
Dear Palo Alto City Council Members,
I am an employee of Watercourse Way in downtown Palo Alto and have been for 19 years. I am deeply
concerned about the current proposed resident parking permit project and how decisions made will affect my
ability to maintain my job. I live in Portola Valley atop a mile long one-lane road, and public transportation is
not an option for me. There are no buses that come to my house and riding a bicycle that distance is not
something I would be able to do physically on a daily basis. I rely on being able to drive my car to and from
work.
My understanding of the current proposal for a resident parking program is that many employees of downtown
will not be able to get permits due to limited availability, and those that are granted permits, will have to pay a
fee of more than $400 a year. A question I feel must be answered is what am I to do if I am either not granted a
permit or the permit fee is beyond my means? Will I be forced to quit my job to find work where I can park
freely or without an exorbitant annual cost?
I hope the city council creates a balanced solution that not only considers the residents who have been affected
by the parking issue, but also addresses the needs of individual employees like myself.
Sincerely,
Nathan Hanley
1
Minor, Beth
From:
Sent:
To:
Subject:
Dear Council Members.
Franes <irwinroth@sbcglobal.net>
Monday, December 09, 2013 11:25 AM
Council, City
Planned zoning
\'10"r.r \ \ pJi 1: 54 v Co"
I was optimistic when I read that the mayor was thinking of proposing a moratorium on Planned Community
designations having seen the results of the vote on Measure D.
However, at last weeks' council meeting, it seemed that other members were not in favor of that very thoughtfull
suggestion. I fail to see what harm would be brought by putting a moratorium on such drastic moves. It should be
obvious from the vote on Measure D that the citizens of Palo Alto are not happy with the overbuilding that is happening
in our city. -rhe traffic has become a nightmare. And what will happen to all those condos when the next burst of the
bubble happens?
I urge you to consider a moratorium to allow for more thoughtful planning. Surely all these developers can wait a year to
move ahead with their plans. And perhaps we will avoid some uglies like 801 Alma.
Infortunately I cannot attend tonight's meeting since I cannot drive at night.. But consider my request. (I am a 50 year
resident of this once lovely city.)
Frances Roth'
4122 Amaranta Avenue
650-493-8345
1
Minor, Beth
From:
Sent:
To:
Subject:
Dear City Council,
. '·~i.), \: F~d\;h Or r IvL
Genni Lawrence <gennilawrence~~a~o~:c'~m> ~H • 54
Monday, December 09, 2013 5:2~ ~EC \ \ p,n 1·
Council, City
Maybell/Orchard
This is my first time writing to the Council. I have lived and worked in Palo Alto for about 9 years and am proud to call
myself Palo Altan. My husband and I have two children at Juana Briones Elementary School and we are active in our
community.
We understand that there will be a meeting tonight and that one of the Agenda items to be discussed is the disposition
of the Maybell Orchard property. I know that you have received many letters and emails from our communities in
Green Acres and Barron Park urging the city to give the community more time to gather ideas, resources and support for
this land, and I would like to add my voice in support of theirs. In particular, I think that Anne Lumsdaine's letter echoes
the thoughts of many of us living and working in South Palo Alto. Please consider the points she makes.
We have so little open space in this part of Palo Alto and preserving the area's history for our children is a wonderful gift
to the future. Please consider giving the community more time to realize this dream.
Thank you,
genni lawrence
1
Minor, Beth L ! T \' '," ',. ..i ; L' () (" {,
CITY CLEi<h'S OFFICE
From: renu virdi <renuvirdi@hotmaiLcom>
Sent: Monday, December 09,2013 7:38 PM 13 DEC i I Ai'l 7: 53
To: Council, City
Cc: Trilochan-Gmail Virdi
Subject: Maybell decision
Dear Council members,
The voters of Palo Alto have loudly and convincingly spoken to the City Council, city staff and the Planning
Commission that we do not want high density in local neighborhoods, period!
During the Maybell rezoning process the neighbors had to fight the City Council during the entir~J~rQ~..e.s.~,-Th_~_~~~_
neighbors' concerns about high density and safety of students, residents and seniors were ignored by the City
Council. Council members you now have an opportunity to make amends and do the right thing,
There are many options for Maybell and given enough time a working group could come up with solutions that
will meet both financial and community objectives. One option to explore would be to create a community
gathering place that can be enjoyed by students and the community. We greatly need a safe place for
students to be with their friends instead of hanging outside Walgreens! We need to build upon the
development assets incorporated by PAUSD to help the young people
By scheduling the Maybell discussion for 10 pm on Monday night the council is once again not being fair to the
residents. The only reason to place this item so late would be to evade th~ residents and ensure there is least
amount of input from the community!
I urge the City Council to listen to the neighbors and do the right thing for the community!
Sincerely,
Renu
1