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Home My WebLink About0249.093f I , j ·-1 - ~" " '. , . . < , ,~, '-,~-:.' April 22, 1993 HONORABLE Cin CJUNCll Pa10 Alto, Californfa 1 Ap["rro'lal of An Agreement To PrQvide the Pall) Atlto Housing Corporation With (o.!l!!l!m.i.lY Development Blot:"k Grar:t LCDB1iliunds To Assist With Prl;_-De_1,'€lopment Expenses for the Barker l10tel lew fr:come Rental Kousjll..9......_PX.Q iect Members of the Courr~iT: REPORT IN BRIEF COl/nell action is requested to ~upport th~ Palo Alto Housing Corporation's {PAHC} proposed ecq'Jisiti{'ln and rehabil ita.:ion (If the Barker Hotel bUl1ding at 435-441 Emerson Street. in order to preserve the existing 20 low rer.t units and to add 5 new Ul"1i ts, and to approve the attached agreement with the Palo Alto Housing Corporation for the pravls10n of S175,500 in COBG funds for pre devs10pment 8xpcnses to alloiooi P,';H'C to continUE impleMEnting tt'le project. BACKGROUND On May 26, 1992, Council adopted Resolution No. 7Q39 approv1ng the use of CDSG funds for fiscal year 1992-1993. Item 16 of that REsolution approved an anocation of 5393,995 to a New Housing D~velopmel'lt fund. 5293.995 of those funds were soet aside for the preservatiol1 Q~d cO r1,struction of s1ngle room occupancy (SRO) housing, and SlG'J,OOO 7'fas beel1 cOll:ritte,j to U·,2 Lytt':ln IV Pr'Oject. On October 26, 1992, Council amended the FY 92-93 contract ~ith the Palo Alto Hous.ing Corporation to prol.'ide $18,000 from the $293,995 'in CDSG funas fur PAHC staff expenses, for evaluating the feasibility of Durcnasing th~ Barker Hotel and preparing financing and fundir1g applications. On November 16, 1992, Council adopted Resolution No. 7155 authorizing the $jjbrnittal by the City of an applica.tion for 51 million in federal HOME fUflds. The HOME app11cation was submitted to the Stat~ of California on January 7, 1993, on behalf of the Palo Alto Housing Corporation (for the acquisition and rehabilitation of the Barker Hotel} and on b€half Df ttJe Mid-Plmlnsula Hous~ng Coalition ,for acquisition and rehabilitation of Tamarack Court). CMR:249:93 'L o o I 1 I • , , 1 1 • ~-~~~------ On December 14, 1992, Council adopted the Armuai Corrore~€'_'l?.i\le Hou_~_L'lg AffQrdabi_lity Strategy <CHAS) and authrJriled its submittal to HUD. One of t~e major priorities of the (HAS is to preserve a~d 'increase the supply of pennane:nt~ affordable rental ~Qus'lng iI'.,a i lable t~ the homeless and ~'cry low income persons :-.'ho are at risk of homeles5l'1ess. The (HAS identifies the acquisition and rehabjlitation of the Earker Hotel and the Tamarack Court Apartm-?nts ,is two projects .. -hich can meet this adopted Cit), housing pr~orlt.". On March 29, 1993, City was notified that $i ~i]lion in hOME funds had been awarded to Palo Alto. DESCRIPTION Of THE BARKER HOTEL PRESERVATJON PROJE(] Existing Situat1on~ The Barker Hotel property contains 2Q occupied residential units (including the two-room unit ccc~pied by the resident manager) on the seccnd floer. Thre-p commercia.l tenants occupy th~ grour.d floor and mezzanine. Currently. the SRO rents range from S250 to 5400 per month, which is lower than at other 5::::0s in the City. Under th~ current ownership (since April, 1989) the building has been weli managed and maintained, and the residential rents have been kept at below market rates. The Urban Mini~trjl has also been pre..-ided use of on~ hotel room (IS an an-s~te office for their counselin9 ser~ices, and ha~ been allowed to select clients from their programs to fill room ~acancie5. After acquisition, the Palo Alto Housing Corporation will continue to maintain the existing low rents and the Urban Ministry's counse1ing program. Section 8, or other rental subsidies, will !lso be sought. Rehabilitation Plan: PAHC has de..-eloped a plan for the rehabilitation of th~ building and creation of five new rMms. The ground flOOr c.ommercial space now o-ccupied by Colossal Graphics will be converted into five new handi':apped accessible units, an eniarged hotel entr,,~ce, and offices for the hotel manager and the Urban Ministry. The structure win undergo a seismic upgrading, and the electrical system will be imprcwed. A n~w roof will be installed and other safety and fac<i~:ft' imprO'lpr.1€11ts ,.il1 be rT1ade. PAf1C's pia:-, recei .... ed ARB approval Yrfitn conditions on Marc~ 18, 1993. Preliminary cost estimates for tne ne ... roems aPld building rehabnita.tion w<Jrk total about $400,000. The cost estimates are ba$~d on the plans appruved by the ARB and were prep.:.r""d by a 1 iCe!15ec' CO!1tractor. lJi th funds provided under this pre-dev~lopment agreement, PAHC will revise a!ld refii1~ the (osts based on more detailEd inspections of the building, review by the CHy Building Inspection Division, and t~e receipt of actual bids for the construction ~0rk. The construction work will be subject t{.; feccral labor standards and pre~iiling wage rates. Property A~quislti..Q.n~ PAHC is curr-ent1y under contract "With the sellers (498 University Ave Partners, of which Jim Saer and Charles King are the principals) to purchase the Barker property for SI.9 million. PAHC's purchase contract is subject to a number of contingencies, including securing funding CHR:249:93 ,,: \OIR\B.AJlI:EJI 4/22/93 Pase 2 ----Lr---~' --,---,--, - ...... from the City tc cover the dIfference between total project costs and the amolJnt ()f a permanent first mortgage loan. SinCE it was expected that a port1on of the purchase price would come from federal funds ~ia the City, (eoeral regulations (49 CFR Part 24.101 (~)[2)J. whic~ requjr~ that the fair market va1tJe of a ::woperty bei~,g acquired by a rlDnprcfit be determined thrDugh at! appraisal precess, ha.d to be fono~ed. The.'i.e regL.:1ations are meant to pl"otect the pr{)perty owner~ as w'ell as tenants a..,d pros.pective purcha.sers. Thrf.!i! appraisals W2rf! prepared as part of the process of doe-termir:ing a fajr marki!t vaiue. On July 28, 1992, the s€lIer submitted an -Appraisal of the Barker Hotel" to the City. In order to read his opir,ion of ~a1ue, the seller's appraiser first established an ~as is~ market value of 51,400,000 [i~ th1s case, ~as is· refers to the subject property's current mixed use, as w~ll as its physical condition). Th~ appraiser then checke~ to see if the property wou1d have a higher val ue ; f it cou.ld be renovated to its fun zon;:19 p'Otential, including addinq a third floor. The ground floor would be retail sales, and two uppe~ floors would be used as office space. The appraiser's est~mate af the property's current market ~alue ~as Sl,900,OOO, gjven its redevelopment potential. To independently confirm the seller's appraisal, staff retained a second appraiser. Unfortunately, staff erred lf1 not providing the second appraiser with sufficient directio~ in terms of the definitlon of ~m~rket value". The second appraisal did not cOllsider the pJtentjal value of the property if it were de~eloped to its full zonfng potential; i.e., ground floor retail with two stories cf office space. taking advanta.ge of the floor area bonus allowed for buildings that undergo seismic upgrading. Instead, the second appraisal ser~ed on1y to confirm the first "as is· scenario in the seller's appraisal, that being two-story mixed use. The second appraisal valued this Bas l~~ market valUE at $1.44 million, as compared to the seller's Sl.4 million und~r the same scenario. After receiving th~ second appraisal, staff. representatives of t~! Palo AltJ Housing Corporation, and the seller met te discuss the fact that the second ap~)t"aisal INas not prepared or, the same basi~ as the sener's appra1sa1, ar'ld s.) could not be used to c~nfjrm that value. [t was agreed to retain a third appraiser, and to give that appra.iser specific direction to review the value established in tt'le seller's appraisal for the ground floor retail/tINo story office option. The third appraisal did this by addr~ssing four separate questions: 1) Is the market data upon which the seller's appraiser relied adequate? Conclusion: "Limited comparable sales ar,d rental dala arE available for a property of this type. lhe market data is well docu~ented and appears accurate, and its quantity and quality is sufficient for the ana1yses. for our revje~ and analysis, ~e supplem~nted the rental data ~ith CMR:249:93 ~;\OM\a.u(E1t 4/22/93 Page 3 ""--"'---~-~ i - ad~itjcnal information from our files which we felt shed sam€ light en the 'IIaluatii)l'l.- 2) Are the market factors used in the analyses reasonable (e.g., ~tablJtz~d vacancy and col1ecticn less f2ctors. expense ratios. capitalization rates, EtC.)? Conc1usicn: "8ased upon our experience and knowledge of tne local market. t~e factors used in the analyses are reasQnabl~ and ~ithin rarge of m~rket standards.- 3) Is the appraisers' analysis of highest and best US€ sDund. and does it currBntlj employ the prl-perty methodology? t..Q.r.!clusion: "The property consists of second-floor residential {singTe- room occupancy and studio) units over ground floor retail. The appraisers cancll1{1e, baseJ upon an inspectio'1 of the property, a review of develGprnent regulations, d15cussions w~th Planning Department staff, and an investigation of current market c~nditions, that the property is underimproved. They further conclude that the highest and best use of the property is a renovation that includes the constructjo~ of a third story and conversiun of the second floor to office use. Sased upon the informatior, pres~nted in the report and our knmfllledge of local market conditicns and recent de~'elopment trends, we c-cncur ""aM their conclusion.- The appraisers estimated the marl<.et walue of the Barker Hotel according to its highest and best use, i.E., they estimate the value of the property as if renovated. and deduct an estimate of the costs and incentives required to achieve the renontion. The remainder is the estimated market 'IIalue of the ~ropert.Y "as is·. ~The methodology is appropriate. constitutes sound appraisal practlce, reflects procedures typical of the market, and is corre~tly emp1oyed." 4) Is th€ value estim~te reas~nabla based upon the market data in the ,.ep:;..n~ Conc1y"sjon: -The appraisers' final opiniO"l of value is 51,900,000. Had we performed a full inv~st19ation and apprai5al of our own, we mi9ht have estimated a value that ... as some",,'hat lawer, but within 10% of (the first appraisers" estimate. Such a differential is not uncommon in the profession, and is reaso~able, particularly in 'IIiew of the property type and the purpose and scope of the appraisal. The value conclusion of (the first appraisers'} appraisal is reason~ble based upon the data contained in the report.~ Under federal guidelines for acquisitions by Mnprofits with federal funds. the actual pur~hase price is subject to negotiation b~tweBn the nonprofit and the seller. The sellers repeatedly stated they would ~ot sell the property CHR:249:93 P~\I:)6l\B.I.~(ER 4/22/93 Page 4 - ---~---------------------------------------~--------.. ----------~ .... ~ .. ~~,..~ for less than 11.9 mil1ion, .... h~ch they c.o>1sijered the fair mark~t val'J€. Since the S1.9 million price was supported by bc differe;;t appraisals. and the acquisition of the prop2rty meets the City and PAHC's objecti~es of preserving existing, low rent SRO housi~g, PAHC proceeded, ~ith City s~aff support. to execute the purchase contra~t for the Sl.9 mill ion price Project Fina~cir!.&.;,. PAHC has received a ter.tathe loan commitment fralT! First Nationw~de Ban~ under their ~Affordable Housing PrDgram" for permanent financir'9 of about $980,000. Total project costs (pre-developmel1L relocation, acquisition, rehabilitation) have not yet been finalized, but are estimated at about S2.S million as follows: PUrcr,ase Price Pre-Development Expansion and Rehabilitation PAAC Administratio:l 11,900,000 175,500 400,000 ___ J_~_Q_Q_Q lOTAl ESTIMATED COST Projected Bank loans Required Subsidy SOURCE OF FUNDING 12,493,500 112.5 million for F.stimating purposes) 960,000 Abo_u L1.LJ;20 , 000 $2,500,0GO Staff will return to Council at a later date with a more detailed analysis of the Barker Hot~1 and the Tamarack Court project costs and recommendations for comp1ete funding of both projects. If QQ1h the Barker and the Tamarack proceed, all availabl2 funding subsidies for eXisting housing will need to be fully utilized to accomplish both projects. Tamarack is expected to need a minimum of S600,0~O to $700,000 in subsidies. which could come from CDaG Cif'ldjor HOME funds. The 8arker, as shown abov€, will need about S1.52 mill~oT1. Sources of subsidies for the Barker COuld be HOME, CDBG (from fiscal year 92- 93 and 93-94) and City Housing Reserves. If the iamarack project dues not proceed, then the fu11 $1 ~illjon in H~ME funds would be used for th~ B~rker, since thE HOME funds mu.st be comr.:itt~'(j t(l a ~pecific project whjch is ready for construction b)' March 29, 1994, or be re~urr:E:d t() the State. PROPOSED AGREEMENT The agreement provides up ta a maximum of 5175,500 in eD8G funds for necessary pre-development tosts such as architect~re, e~gineerjng, ~nspect1ons, tests, relocation, permits, fees and financing application costs to obtain City approvals and secure bank fl~ancing. A breakdown of these costs is shown in Exhibit A of the attached agreement. The funds will be loaned tc PAHC at Z€fa interest and with no paym2nts required. At tl'le clase of escrow on Ule purchase of the property, the predevelopment loan will be incorporated into the 1arger loan for the purchase and rehabil itation. The funds ,Provided by the CHy will then be secured by the property .and repayment will come from projected cash flow after operating expenses. CMR:249:93 P:\~\IAAI:fIl 4i22/93 Page 5 ENVIRONMENTAL REViEW This project has beE" determined to be categorically exempt for purposes of the California EnviroJ'lmental Qutllity Act (CEQA) under Sections 15301, Maintenance of an E~isting Facility, Qn~ S~ction 15303 Conversion of Six or Less Units. Since ffdera1 funding is planned for the acquisition, an environmental cl~ara~ce under the Nati~nal Environme~tal Frotection Act (NEPAl will ;150 be completed prior to cbligation of fUr1ds by Council for the acquisition of the property. The provision of CDSG funds for pre-d~velopmEnt costs is not a project under (EQA and is exempt from NEPA under 24 CFR 58.34 (6) • RECOHMENOATiON Staff recommends that the City COUJlcil: 1. Support the preser~ation of the 8arker Hotel property as a low income residential hotel through the Palo AHo HOl'sing Corporation's P,"oposed acquisition and rehabilitation project; and 2. Appro~e the attached agreement ~jth the Palo Alto Housing C{lrporation to provide $175,500 in CD6G funds; for pri!-del,le1opment costs related to the pnservation of the Barker Hotel and autnorize the Mayor to execute the appropriate documents a~d autho,;z.e the City Mar:3ger to administer and execute the prol,lisions of the agreemer.t. Respectfully submi tted .... (~ttli~.< I", j;[-C-Il :J CATHERINE m~5'~ Se~ior Plal'1nei / .,~ Ii ()"" ~..,l~y~ JU~E HEMINa' ! f:i.ty Manager i I" G ~/ /C .. i/./ #~c,,"d: li,kl!ut-H,/ KfNI<ETH R. SCHREl8ER Director of Planning and Comrm.mity Enl{ironmef1t Attachments : 1) Agreement With Palo Alto Ho~sing Corporation Cc: Palo Alto Housing Corporation £DBG CiUzens Committe'e 498 Uni~ersity Avenue Partners Chamber of CG~m~rce Downtown Marketing Committe€ CMR:Z49,93 j>:'.~\IIAJiII:ER 4/22/93 Page 6 ~GREEMENT ASSISTING WITH PRE-DEVELOPMFNT EXPENSES FOR THE BARKER BOTEL LOW INCOME RENTAL HOUSING pROJECT THIS AGREEMENT is InC'de and entered into or. the _______ day of __ ___ , 1993, by and .oetween the CITY OF PALO ALTO, a municipal corporation (herein "CITY1') r and PALO ALTO HOUSING CORPORATION. INC., a California non-profit corporation organized and existing by virtue of the laws of tr.e State of California (herejn ItCONTRACTORIr) • RECITALS: WHEREAS, CONTRACTOR has applied to CITY for assistance ~ith the pre.-deve_loprnent expenses for a proposed 25-"J.nit, low income single room occupancy (SRO} rental housing development at 435-441 EMerson S~reet, within ~he city of Palo Alto, corn~only referred to as the Barker Hotel; and WHEREAS~ pursuant to the provisions of Title I of the Housing and Co~munity Develop~ant A~t of 1974, as amended, CITY has appropriated Community Development 81oc~ Grant (CDBG) funds in its fiscal year 1992-1993 budget for the purpose of preserving, rehabilitating and constructing affordable single room occu?ancy housing in Palo Altci and WHEREAS, the Barker Hotel rental housjng project will preserve existing single room occupancy housing affordable to very low and lew income households and add addition~l affordable SRO units; and WHEREAS, the acquisition and rehabilitation of the B~rker Hotel is an eligible activity ~nder tIle Community Developme~t Block. Grant. Prosrai,t, and is consistent "With the affordable housing goals far the city of Pale Alto as outlined in the CIT'i~!'; Comprehensive Housing Affordability strategy (eHAS) i and WhEREAS, CONTRACTOR and CITY desire to arrange for a loan from CITY to CONTRACTOR to caver a portiDn of the pre-developrr.e:11: expenses ~hich ~ust be incurred prior to the acquisition and rehabilitation of the proposed rental housing development; NOW, THEREFORE I in consideration of the mutual covenants and agreements specified herein, and subject to its terms and provisions, the parties to this agreement agree as follows: 1 • • - ~-----------~-----------,----~----- -.~. PAR~ I: AGREEMENT PROVISIONS A. ~~POS~ OF AGREEME~~ The purpose of this Agreeroent is to set forth the re~pecti~e duties and responsibilities of CITY ar.d CONTRACTOR ."ith respect to the pre-development activities related to the prat:=cse.d acquisition arld rehabilitation by CO;~TR.]l.C'rOR of the Barker Hotel building located at 435-441 Emerson Street, Palo Alto, Califo=nia (Assessor's Parcel Number 120-26-023), hereinafter referred to as the '"projec.t"4 B. DESCRIPTION OF PROJECT AND AC~IVITIES CITY shall p!:'ovide to CONTRACTOR the sum of ONE HUlJDRED A."ID SEVENTY-FIVE THOUSAND AND FIVE Hl7NDRED DOLLARS ($175,508) to be used in accordance with the terms of this Agreement and applicable l3ws~ with funds provided under this Agreement, CONTRACTOR shall pat for pre-development expenses) including architect, engineer and consultant fees, soils and related tests, environmental and toxic Etudies and tests, relocation consultant studies and relocation benefits) planning and building fees Clnd reports, required escrow deposits and other pre-development expenses which are reasonable and necessary in order to acquire the property, obtain planning and building permit approvalS, and to ~ornplete the rehabilitation work including the conversion of ground floor space to fjve additional SRQ units and as described in Exhibit A) SCOPE OF SERVICES AND PROJECT BUDGET, attached hereto and inco[-porat~d herein by reference. c. SEC~ItY CONTRACTO~ shall execute and deliver a Prornissocy Note, attached hereto as Exhibit 8, in favor of the CITY in the aRount of $175)500 to secure the performance of all terms and con~iticns of this Agreement. T!'"Je Note shall be executed prior to any disburselI'_ent of funds under this /o,g=-eement. The Note shall bear no interest and no periodic payments shall be due provided corlTRACTOR complies ;.lith the terms of this .l>greernent. The entire principal balance shall be due and payable at the close of escro~ for the acquisition of the Project or upon the termination of this Agreement pursuant to paragraph D, be 10· ... ' , -.. 'hichever Cccurs first~ Upon close of e5CrO;.l for the acquisition, the tunds provided u~der this loan shall be incorporated into a ne", laan, together witn all ethel' funds provided for acqu is i tion and rehabi litation through the. Ci t 1'. This Dew loan sha 11 be secured by a deed of trust on the project. 2 - D. 1~ OF AGREEMENT 1. Tt.e tern of this Agreement shall be effective on July 1, 1992 and ~hall termi~ate on June 30, 1994. The term may be extended for an additional period not to Exceed cn~ year, but this extension shall be granted on behalf of eI'rY by the Director of Planning and Community Emriromtent (I'Director ") an ly upon the submission of written evidence, acceptable to the Director that reasonable progress in the implementation of the development of the project has been made. If the Director determines that CON'l'.RACTOR has unreasonably delayed development of the Project, no request for extension shall be granted to CONTPACTOR and all funds provided to CONTRACTOR under this Agreement sh311, at the option of the Director{ become il'l'Ul'ledia":.ely due and payable. 2. In the event that CONTRACTOR cannot complete the acquisition of the Project due to the unavailability or denial of necessary financing or required entitlement permits or due t.o other circumst~nces beyond CONTRACTOR'S control, as determined by the Director, then this Agreement shall be terminated arid no repayment shall be required of any funds pro'.'::'ded under this Agreement. E. ~CT A/lOllNT The maximlJm amount payable under this ~.gr",eiTkent for pre development expenses sha 11 be ONE HUNDRED A.N"D SEVEWfY-FIVE THOUSAND ANO FIVE HUNDRED DOLLrt.RS ($175,500). In the event, for any reason, the amount pa)'able by CON'TRACTOR to any and all sou["ces t"or the pre-development e,xp~1"lses exceeds $175.5 DO, CONTRACTOR shall pay all such amounts in exces~ of $175,500. Pr ior to requesting the di5bursem~nt of any loan funds, CONTRACTOR shall sub~it to CITY copies of all of its ccntra~ts and s~bcontracts ~ith consultants covering work to be paid under this Agr€e~ent. The Gontracts and subcontracts shall clearly state the work to he performed and the basis of payment. All such costs shall be reasonable and necessary in order to secure the development and financing appro ...... als for the Project. The loan proceeds shall be disbursad according to either of the follo.inq procedures: 1. Upon the receipt of a writte~ request fron CONTRACTOR, payments will he made directly by CITY to duthorized third parties provided the amounts and terms of the pa}'ments have been approved in advance. The Director reserves ttl.£! right to disal1oJ,.· al1Y cost not approved in advance b:,' the Director. 3 -- -, 2 ~ Payment by CITY shall bE": ~ade en a reimburse!i'ent basis of actual costs incurreQ. ~equests for reimbursement shall be made according to CITY procedures. With each payment request; CONTRACTOR shall certify in writing that the services have been s.'!~ i.sfactorily performed, that the payments are made in acco.-dance with the appl:'.cable conc.racts and SUbContract (5) and th~t all funds were expE':nded on behal f c,f the Project. After acqt.!isition, CONTRACTO~ shall operate 2\nd maintain the Project and the sil"'gloe rOOJ'3 occupancy units therein, as a permanent housing facility for residency by single pe["sons of low and ve.ry loW' income at affordable rents as defined by federal reg~lations for the CDBG program. CONTRACTOR shall provide office space within the Project for counseling services to Project residents . . 1l"ny notice which may be or is require:i to be given under this AGREEMENT shall be submitted in ~~iting, postage prepaid, to the following representatives: CITY: City Manager 250 Hamilton Avenu-e Palo Alto, CA 94301 (415) 329-2563 CON'rRACTOR: Executive Director PALO ALTO HOUSING CORPORATION 540 Cowper Street, Suite G Palo Alto, CA. 94301-1B06 (415) 321-9709 Fax: (41S) 321-4341 A copy of all notices and corl-espondenc:e to CITY must also be sent to: Director, Planning & City of Palo Alto 2 SO Hamil ton Avenue Palo Alto, CA 94301 C,'\VICT\.o.ORMN'TS\MRXElI AG.R Phone: (415) 329-2441 Fax: (415) 323-2240 4 \ '-- - PART II GENERAL CONDITIONS A~ Compli.lica COrrrRACTOR agrees to comply with the requirement~ of thE Departm 7::"lt of Housing and Urban Development regulations concer~1ng Co~unity Development Block Crants (CDBG) set forth in Title 24, Code of Federal Regulations, Part 570; and all federal regul~tions and policies issued pursuant to these regulations. COtrfRAC'l'OR further agrees to util ize funds available under t,",~is AGREEMENT to supp!ement rather ~han 6upplant funds otherwise available~ CCNTRACTOR, in the performance of its obligations under this AGREEMENT, shall comply ~ith all applicable laws, ordinances, rules and regula.tions. CONTRACTOR shall maintain its nonprofit corporate status as defined by California Corporations Code Section SD50, as amended, during the term of this AGREEMENT as set forth above. Nothing contained in this AGREEMENT is intended to, or shall be construed in any ~anner, as creating or establishing the relationship of employer/employee between the parties. CONTRACTOR shall at all times remain an independent contractor 'With respect to the services to be performed under this AGREEHENT. c. Indegnifieation CONTRACTOR shall indemnify, defend and hold CITY harmless from and against any and all claims~ actions, suits, liability, charges, and juogments Yhatsoever that arise out of, or caused by, CotnRD.CTOH' S pcrfori:'~,;iTlce cr-nonperfOrIM!"ICe of the s@rvices or subject matter called for in this AGREE."1EN'T. D. Insuranee CONTRACTOR, at its sole cost and expense, shall maintain workers' compens~tion, comprehensive general liability~ automobile liability, personal injury and prope~ty damage insurance, insuring against all liability of CONTRACTOR and its authorized representatives arising out of or in connection with CONTRACTOR'S performance ul'",der this AGREEMENT. CONTRACTOR and any subcontractors assigned to the performance of the terms and cor.di tions of this AGREEMENT shall comply with coverage amounts, required endorsements, certificates of insurance and coverage verifications as defined i~ EXHIBIT C, INSu~CE 5 - E. REQUIREMENTS, att~ched hE-reto and ir,corporated herein bJ' reference. All rights granted hereunder are personal to CONTRACTOR, and are not assignable or transfer~ble absent the prior ~ritt~n consent by the CITY MANAGER on behalf of CITY, and any attempted assignment thereof shall be void. 7. suspe~_~ion an4/or ·rer12lj,na_~j '=>n Consistent with 24 CFR section 85.44, either party may terminate this AGREEMENT at an}' time bJ~ giving 'Written notice to the other p~rty of such termination and specifying the effective date thereof at least 30 days before the effective date of such tern-.ination. In th-e e'Jent of any termination for convenience, all finished or unfinished documents or materials prepared by CON'I'R.~CTOR under this AGREEMENT shall. at the optic.n of CITY, become the proper-ty of CITY, and CONTRAC~OR shall be entitled to receive reasonable compensation for any work completed on such documents or materials to the. satisfaction of the CITY MANAGER prior to the termination. This AGREEMENT is governed by ~pplicable federal statutes and regulations, as referred to elsewhere herein. Any material deviation by CONTRACTOR for any reason from the requir.e1:T1€'nts thereof, or from ~ny other provisior, of this AGREEMENT, shall constitute a breach of this AGREEMENT and may be cause for termination at the ele~tion of CITY or upon the direction of HOD. In accordance v.:ith 24 CFR section 85~43, CIT\" may terminate "this AGREEMENT, for cause, by giving seven days notice to CONTRACTOR. In the event of termination, all finished and ur:finiehed \\Iork shall be.come the property of CITY. G. Progr~m I~come CONTRACTOR shall return to CIT'i any program inco;lle as defined at 24 CFR Section 57D.~OO(a) generated by activities carried out ~ith CDBG f~nds made available under this AGREEME.'·n. H.. Amend.ments Amendments to the terms and conditions of this AGREEMENT shall be requested in ' .... riting by the party desiring such revision; and any such adjustment to this AGREEMENT shall be determined and be effective onl:rr upon. the mutual agre.ement in w~iting of CIT~ ana CONTRACTOR. Amendments made ty HUD, 6 " ~ or any authorized Federal cffici~i, will be deemed to b2 incorporated hereir.. 1. CONTP..ACTOR shall 1l1aintain no membt?r of its B05rd of Directors or staff as "interested persons" under the l.GREEME.."lT. For the purposes of this AGREE..'"'iENT, It interested persons" ~eans either: a) Any person currently beinq compensated by CONTRACTOR for services rendered to it within the previous twelve {12) months, ~hether as a full-time or part-time employee, independent COf1_tractor or other .... ise, exclud~ng any reasonable compensation to a Board member as a Board me~ber; or b) Any brother r sister~ ancestor~ descendant, spouse I brother-in-laW', sister-in-la",,! son-in-law, daughter-in lav, ~other-in-lawr or tather-in-la* of any such person described in paragraph l.a). above. 2. CONTRACTOR shall utilize minor it~~ and/or \olO'lr.en-oW'ned businesses, vendors, suppliers, and contractors to the maximum extent feasible for it~ms funded under this AGREEMENT. 3. CONTRACTOR shall certify to CITY that all funds expended under this AGREEMENT shall adhere to all federal requirements of the Community Development BlocK. Grant (CDBG) Program as more fully described in Exhibit D, FEDEPAL REQUIREMENTS, attached hereto and incorporated herein by reference. 4,. CONTRACTOR shall document all costs by Il1:aintaining ccmplete and accurate records of all financial transactions, including, but not limited to, contracts, lnvoi::::es, time cards, cash receipts, vouchers, canceled checks, banK statements, and/or other official documentation evidencing in proper detail the nature and propriety of all charges. 5. CONTRAC1~R shall be liable for the repayment of disallowed costs. Disallowed costs may be identified through audits, monitoring, or other sources. CCNTP~CTOR shall be afforded the opportunity to respond to any adverse findings which may lead to a determination of disallowed costs. CITY shall miike the final determination of dio;allo'Wed co~ts. 6. CONTRACTOR shall submit for approval by CIT'i any lease agreement either pyoposed or in effect; which may affect directl}' the Project during the term ,of this Agreement. 7 • --~.-"---"-" " _"~ __ ,,, __ .. ,,_"""""".11!!1I1£"'''''''''''_ CONTRACTOR shall preserve its records and make them available for r-eview by CiTY: a) For a period of three (3) years from the date of the submission of the final expenditure report; or, b) 0) d) For such longer period, if an1, as is required b~ applicable law; or, If this AGREEMENT is terminat.ed, the records relating to the ~ork ter~i~ated shall be preserved and made available for a period of thre& (J) }'ears frol'!'. the date of any resulting final settlement; and For a Deriod of three (3) years from the termination date of this AG~E:EMEN!'. B. CONTRA,CTOrt agrees that, at al".y ti~e during nor:r:1al busine~s hours, and as often as 1T'.ay be deemed necessary, CITY and/or any duly authorized representatives shall, un'eil expiration of (a) three (3) years after final payn-,ent under t.his AGREEHENT~ or (b) such longer period as may be prescribed, have access to and the right to examine all of its records with respect to all matters co~ered by this AGREEMENT. CONTRACTOR also agress that CITY, or any duly authorized representatives, have the right to audit, examine and make excerpts or transcripts of and frOll, , such records, and to make audits of all contracts and subcontracts, invoices, payrOlls, records of personnel, conditions of employment, materials and all other data relating to matters covered by this AGREEHENT~ g. ,For funds expended under this AGREEMENT I CON'lF.ACTOR sha 11 comply with the ~niforrn administrative requirements and cost principles set forth in: a) OMB Circular A-l~ ~ "'Cost Principles fer Non-Profi t Organizations"; b) OMB circular .1..-133 "Audits of Institutions of Higher Education and other Non-Profit Institutions"'; and c) Attachments A,B,C,F,H,N and 0 to OMS Circular A-II0 1 dealing with cash depositories, bonding and insurance. records, standards for financial managernen~ systems, monitc!'ing and repcrting program performance, property management standards and procurement standards as modified by 24 eFR Section 570.502(b) 8 10. CONTRACTOR agrees that, in connection with the activities authorized under this AGREEMENT and the public serviceS'. ~hich may be provided in t~e Pro)ect~ a) It will not discriminate against any employee or applicant for employment on the basis c! religion and lJIill not limit entploYlIlent or give preference in employment to pcrscrls on the b~sis of religion; b) It wil: not discrimin3te agai~st any person applying for public services on the basis of religion and will not limit such ser .... ices or give preference to persons on the ~a3is cf religionj c) It ~ill provide no religious instruction or counseling, conduct no religious ~orship or services, engage in no religious proselytizing, and ex~rt no other religious influencE:. in the provision of p"u.blic services; and, d} The portion of a facility used to provide public services in the Prcject shall contain no sectarian or religious symbols or decorations. J. M.rgar Clause This AGREEMENT constitutes the sole agreement ot tha parties hereto relating to said Projec~ and fully states the rights, duties, and obligaticns of each party as of the date of this AGREEMENT. Any prior agreement, promises~ negotiations, or representations between the parties not expressl)~ statetl in thi~ AGREEMENT are not binding. All subsequent modifications shall be in writing. 1. No Third Partv Benef __ is:..iM-Y -This AGREEMENT shall not be construed or deemed to be an agreement for the benefit of any thjrd party or par't:ies, MH: no third party or parties sh~ll have any claim or right of action hereunder for any c~use ~hatsoever. 2. severability Claus~_ -In case anyone or more of the provisions contained herein sh~ll, for any reason, be held invalid, illegal, or unenforceable i~ any respect) it shall not affect the validity of the other provisiorls which shall remain in full force and effect. 3. No Pledging of CITY'~ Credit -Under no circumstances shall CONTRACTOR have the authority or power to pledge the credit of CITY or incur any obligation in the name of CITY. 9 ". IN WITNESS ;..lHEREOF, the part ies have executed this AGREEMENT or. the date first above 'Written. CITY OF PALO ALTO ATTEST; city clerk APPROVED 1t.B TO FORM: Senior Assista~t City Attorney APPROVED: city Manager Director of Finance Director of PlannTng and Community Environment City Auditor 10 CITY OF PALO ALTO sy: Mayor PALO ALTO HOOSING CORPORATION ~, J'l--U i '-T," By:! /\: ... 1 C __ I __ !_,_,i'i·-. "It: '--c.',:~'-..C'c-_ Marlene H. Prendergast, Executive Director" : I EXHIBIT A SCOPE OF SERVICES AND PROJECT BUDGET I. Barker Hotel Pr~-De:velopment Expense Budget ArchitectJ.Jre & Engineering E."wiromr.ental ,. Toxit: Studies " Removal Financing Applications & Appraisals Permit Applications , F£es Escrow Deposit Relocation Miscellaneous 1 $70,000 $20,000 $30,000 $12,500 $ ',000 $25,500 $115.,500 EXHIBI'T B l'ROMlSSORY }.JO'!'E $175,51)0.00 Date: Palo Alto, California FOR VALUE RECEIVED, PALO ALTO HOUSING COR?ORA?Ia~~ a corporation orqaniz~d under the Ilcnprvfit Public B.;:nefit Corporation La .... of the state of California (~IBORP.OWER"), promises to pay to the order ot the CITY OF PALO ~LTOI a charter city and a municipal corporation ,"CITY"), the principal sum of One Hundred. Seventy Five Thousand and Five Hundred Dollars ($175,500.00) at the office of Revenue Collections cf the City of Palo Alto, 250 Hamilton Avenue} P.O. Box 10250, Palo Alto, california 94303, or at such other place a,s CITY may from ti'me to time designate,. w"ith int~rest from the date of this PROMISSORY NOTE ("Note~J. until paio, at the rste of zero percent (ot) per year on the unpaid principal balance. This Note is s~cured by BORP.O\"iER I S interest in that certain Purchase Agreement dated January 0, 1993 regarding the real property located at 435-4~1 Emerson Street. Palo Alto, california, ~s3essor's Parcel Number 120-26-02] ("Project"). This Note is made in connection ..... ith an agreement entitled "AGREEMENT ASSrSTING WITH PRE-DEVELOPMENT EXPENSES FOE THE BARKER HOTEL LOW INCOME RENTAL HOUSING PROJECT 1' ("Agreement"). The Agreement provides that BORROWER is the recipient of certain community Deve.lopment Block Crant (I'ICDBG") funds designated fcr certain costs I including arch i tect, engineer-and consul tar,t fees, soil and related tests, environ~ental and toxic studies and tests r relocation consultant studies and relocation benefits, planning and building fees and reports, required escro ... · deposits, and other related costs necessary for ti".e acquisition and 'rehabilitation of the Barker Hotel Low Income Rental Housing prcject. Any amounts advanced under this Note shall. at the option cf CITY, become immediatel)' due and payable upon the occurrence of the earlier of any of the following: Ca) The close of escrow for the acqaisition of the "project" ; (b) The ter~ination of the "Agreeffient" pursuant to Part I, paragraph 0.1. 1 - BORRO",-ER, any er.dorser of this Note~ and any others who m3i become liable for all of .any part of the obligdtiol1s evidenced by this Note~ may prep~y all cr any portion of the principal sum of this Note~ without penalty_ 1>.ny a.nd all payments ;nade hereunder shall be credited first on the interest then due, and the remainder on the principal balance, and interest on the princip~! balance so credited shall thereupon cease. BORROWER~ any endorser of this Note. and any others who may become liable for all ~r part of the obligations evid~nced by thia; Note, or tnis Note as amended, hereby individually waive demand, presentment for payment, derr.and and protest, notice of protest} demand, and of dishonor and non-payment, and consent to any number of ex~ensions or renewals of time hereof. Any such extensicns or renewals may be maoe without notice to ar~y of the obligated pa.rties and tJithout affecting their liability. l'he pl~ading of any statute cf limitations as a defense to any demand against BORROWER is e)(pressly -:.;aiv.ed by BORROWER. If BORROWER consists ,of mar; than one person or individual, each person or individual shall be jOintly and severally liabla under this Note. BORROWER shall not further encumber, rno~tgage or subj~ct the ·Project M , or the real property on ~hich it is located, or any interest therein, to a dee~ of trust, Eortgage~ indenture, or other docwnent .of legal encumbrance (ind i vidually II Encumbrance" and jointly "Encumbrances"') without the prior written consent Qf CITY. Unless CITY' shall expressly agree otherwise, in writing, any Encumbrance affecting the JlProject" shall provide that, in the event of any default or breach by BORROWER under any Encumbrance entitling any party thereunder to accelerate the indebtedness secured the:":"eby and .foreclose upcn the "Project" (1) CITY shall have the right, but not the obligation, to cure the default prior to the completion of any foreclosure and reinstate the Encumbrance; or (2) pay th@ total unpaid indebtedness secured by such Encumbrance l in ..... hich event such Encu:rr.brsnce shall be r-elea,sed, canceled ~ or other'wlise reconveyed. 1> ... y amounts expended by CiTY under the cO!1tingencies set tort_h in (1) or (2) of the preceding paragraph shall be reimbursed by BORROWER upon demand of CITY therefor, and, in any event, shall bear interest at the -"'axirnuT.1 rate perrni tted b~' Article XV, Section 1(2) of the California Constitution, as may be amended from time to time, from the datt: such amounts ',olere advanced bi CITY until paid by 80RRO ... ·ER in full. All such amounts, including interest and any penalty authorized under the Agree~ent or this Note shall be added to t.he principal of this Note. The approval by BORROWER of any Encumbrance, and the placing of a security interest therefor on the "Project" or any portion thereof, not containing the provisions of the preceding paragraph and this paragraph shall constitute a default under this Note. 2 • <' .. !r an:,' default is made hereunder, BOR.t\.OWER further promises to pay reasonable attorneys' fees and costs and expen:;es incurred b~' CITr in connectin~ with any such defa~lt or an~ other action or other proceeding brought to enforce any of the provisions of this Not'S!:. CITY's right to such fees s.hall :-;ot be limited to or '.oy its representation by staff Clttorn~ys of CITY's Office of the City Attorney, and such representation shall be valued at the customary and reasonable rates for private sector legal services. Th~ relationship ot CITY and BoRROWER evidenced by this Ncte shall be deemed to be one of creditor ar,d debtor, and not of partnership or joint venture. This Note may not be modified or amended, ey.cept by an instru~ent in w7iting which expre66~s such intention of the parties sought to be bound thereby, and such 'Writing sl1all be firI:'"lly attached to this Note and made a part thereof. Any failure o~ CITY or other hclder to exercise any rights under this Note shall not constitute a lola i ver of such rights or of any other rights under ~his Note. This Note shall be governed by .and construed in accordance ""i th the la~s of the State of California. To the extent aS5ign~ent of this Note is permitted by CITY, the t.erms of this Note shall apply to. inure to the benefit of, and bind all of the parties thereto, their heirs, successors and assigns. EXECUTED BY BORROWER on the date first above written. PALO ALTO ROUSING CORPORATION By: __ NamE: Title: Address: Phone: 3 _ .. -'- ~'<i~;:~:~~ -"; . j~~~~{f' .. __ ~ ___ ~ __ ."' ... - EXHIB ri C , ' AOeftD.' r Schwartz " Tu(!aw Camino Real, Suite 200 .", ~A 94022 COMPANlES AFfOROINQ COVl!FlAOE 1-------- E~,;~~ ..... A Aetna Cesualty " Surety Co. elo Alt.o Hou!oi.ng: Corpora.tion/ETA!. fi;~~~'t'l' C 40 Cowpez Street, Suite G ~ ______________________ . Palo ~lto, CA 9~3al Ef~;~1f'>' 0 ~~-------.-.--.-------.. .... ,,'" ,I,frUA<JfO "'l~ o ..... "'e -'u'l'C'I.! .e ~I!!DUl.lO,loiJTtla ~jRIiD"'IJ'I'O<I r-.~·O,,*IE"-O W"08 ,y.IIIAGe UAilIl~m' , WOIDUill'1i CQWPE"""'TIO't .... PI .... on.lfI" UAItf~rTY I Oin~ r:l!"" City Of Palo ~lto. Pl~nnin9 Dept. Attn. Victoria 250 Hamilton Av~nue Palo Alto, CA 9~301 .' , . - , I: • • • I • , , j c ~~ ~ ·':;~fi?~~:· ,:<~:~;~/ ij Aftelt •. ::... 10 Alto Hou.inq Corporation/STAL o Cowper Street, suite G 10 Alto, CA 94301 W!:!~'E1I" COIIIF\;~TIOfoj .-. !ioI1"lOV!'R8" LMBt\.Irt CI!~I'IIr'TICI'I Of OI"II!ftAl~al ... OC<\nO.NlfV~""C;' F8j111"t;CM" IJlE1oI8 COMPANlU AffORO'NG COVER,l>.GE 1'500,000 " I !. ADDITIONAL !NSURFD: See attached additiona.l Insured endors-sment City Of Palo Alto, Plannin9 Dept. l\.t..tn1. Vi-et..orie 250 Hamilton Avenue Palo Alto, CA 94301 - ISHCAA..C NOV 01' THE MOVE 1l!SCII4I.C ~ IS eANCr.,uo IE'POA&; ~ Ul'lAAl'ICN O.o.TE -u,EPi~. 1lit 1SS11'J''IO ~M), W1U n.:CEAI.'OIt '-0 M.oI.IL 30 OAVS WA~" NOT,C:!:: TO THE CE~ll!-JCATt f.4O(.nE~ ~D TO TME \.E;-'. Qlr, h"~ TO 1oU.-'i. S~ t.oOT.cr, SKoO.l..l ~ ~ OI..l~TJQt.. ~ LJABILJTY 01-NN KlND U~ Tf1E" COMf>,v.,ry rrs ~ ~ ~~I\;7j1o,TIVE~ ,', COVERAGE PART NUMBER' COM.~ERCrAL GENERAL LIABIL!'I'Y TIllS BNDORSEME~"'l' CHAI,CES THE POLICY. PLEASE R~AD IT CAREFULLY. ADDITIONAL INSURED -DESIGNATED PERSON OR O'''lANIZATION endor.amant "lI1odifiea insurance provid.ed under the followingl CO~.MERCIAL GENERAL LIABILITf COVERAGE PART IS AN INSUReD (Section II) Ie amended to include a. an in. urad the I~:;;~g~or organization shown in the Schedule 88 an Ineured but only with IJ to liability a~ieinq out of you op.retlo~1 or premlesa owned by or to you. SCHEDULE NAMS OF PERSON OR CRGANI!ATION. City of Palo Alto, !to Officer., Agents & Employee. planninq Depar~&nt 50 Ham1:i.ton Ave. 10 Alto, CA 94301 3 • ---~ -_._---_._-- EXHIBIT D COKKUNI'I"Y DEVE'LOPMEN'l' BLOCJ: PROGRAM ASS URJo..NCES In providing the services and work set "forth in the _'gree-ment I BORROWER covena~ts and agrees to execute the rehabilitation and construction work on the Facility in a manner .. 'hich 'Will permit CITY to fully comply ~ith. and BORROWER shall strictly adhere ~O. comply ...,ith. and take all necessary measures to effectuate~ the folloving covenants and CDGS assurances: 1. Civil riqhts a~d non-discrirninat ion 1a .... ·s. a. Title VI of the Civil Rights Act of 1964. as amended, and regulations issued pun:.uant to 24 CFR Fart 1, wh ich provides that no person in the United states shall on the ground of race, color, or natio::1al origin, be Excluded from participation in, be denied t~,e benefits of, or be other,,'ise subjectE:d to discrimination under any program or activity funded, in whole or in part, Wlith federal financial assistance. b. Title VrrI at the Civil Rights Act of 1968, as amended; iiind irtple!l'tentinq regulations 'When published, which provides for the. administration of all programs and activities relatinc; to housing and community development in a %!'_anne:-to affir.natively fUrther fair hO~..lsing. c~ Section 109 of the Housing and Coc:U:'oUnity Development Act of 1974, as a~ended, and regulations issued pursuant to 24 CFR Part 570, which provides that no person in tt,e United States shall on the ground of race, color, national origin or sex, be excluded from participation in, be denie~ the benefits oE, or be subjected to discril'dnation under, any progYa~ or activity funded, in whole or in part, ~ .... itrJ federal financial assistance. d. Section 3 of the Housing and Urban Development Act of 1968, as amended, and re9~lations issued purs~ant to 24 CFR Part 35, which ~equires that to the greatest e~tent feasible opportunities for training and ernploYlLient be given to persons with low and moderate incomes residing in the Project area benefitted by federal financial assistance, and contracts for 'Work in connection with the Project shall be a-warded to eligible business concer-ns which are located in, or ow'ned irl substantial part by persons reSiding in .. the Vicinity of the Project~ e. Sectivn 504 of the Rehabilitation Act of 1973, as amended, and implementing regulations when published. f. The Age Di.scrimination ".ct of 1975, as amended, a.nd 1 ~r·:~~:~t}"· '''", - implementing regulations when published. 9. The ~ericans with Disabilities Act of 1~9D. as a~~ndedl and iwplementing: regu.lat ior.s when puplished. h~ The. r;A1nerican Standard Specificatio."'l.s tor Making Buildings and Facilities Accessible to and t.:sable by, the Physically Handicapped," Number A-117~1-R 1971( subject to the exceptions co~~ained in 41 eFR S lOl-19.6C4, which requires every building or facility (other than a privately o"lImed resider.tial structural) designed, constructec r or a;lter2:d w"ith funds pre lided under 24 CFR 570 to be accessible to persons with physical disabilities. L The HoI')using and Community Development Act of 1977, as a~endedf and the Uniform Relocation ~ssistance and Real Prop~rty Acquisition Policies Act of 1;70, as amended, and the implementing regulations when published. j. The uniform administrative requirements (including the cost and procurement principles) set forth in 24 CFR Part 85 and OMB Circulars A-S -: ~ A-IIC. 10.·122, A-128 and A.-133 I .... ·hich relate to the acceptance and use of federal funds by )101'1- profit organizatior.s, and which require an agenct receiving in excess of $25.000 in HUD grants to obtain at its o·wn expense an audit that complies with the requirements of OHB circular 1.-1)3. k. Executive Order 11063 and r-egulations issued pursuant to 24 en Part 107, -which provides for equa.l opportunity in housing and nondiscrimination in th~ sale, leasing, rental or other disposition of housing built "'ith foO!deral financial assistance. 1. Executive Order 11246. a5 amended by Executive Order 11375 and EXecutive Order 12086, and regulations is~ued pursuant to 24 eFR Part 13D and .Ill CFR Part; 60, 'IoIhich provide that no person shall be discri1!linated against on the basis of raCer cclor, religic~1 sex, or naticnal origin in all phases of emploI>merrc during .the performance Qf federallr-assisted construction contracts. BORROWER furthe~ covenants ~.,.,.i th res?ect to the foregai ng assurances that: A. In the sale, lease, rerJtal. transfer or other disposition of any real p:roperty on which the Facility is located, B-ORROi\'ER shall include or cal)se to be included in any deed of trust, mortgage, indenture, or other instrument of legal encumbrance ("'Encumbrance") a covenant running with the land r prohibiting discrimination upon the basis of race, color, religion! sex, or national origin; in the sale, lease, rental, transfer or other disposition of such land or any improver.Jents erected or to be erected tr.ereon, and providing that BORROWER and the United States of America (HUD) are beneficiaries of 2 -- and entitled to enforce such covenar.t. B~ BORRO~ER shall take action to affirmatively further fair h~using in the sale, lease, rental, transfer or other disposition of housing, the financing of 'housing, and thE p:'Qvision of bcokerage ser .... ices. (1) BORROWER shall certify and agreE: that BaRP-OWER is under no ,=-cntractual or ctrJ.e.r disabiJ itj' which 'Would preve;lt BOr..ROWER fro~ complying wi th these requirements. (2) BORROWER shall send to each labor organization or 'Worl<.~"t's' representative 'IoIith 'Which BORROWER has a collEC tive bargaining agreem~nt or other similar contract, if any, a notice advising such org"nization or representa tive of BOFRO'WER's commitment under Sectivn j. of the Housing and Urban DeV"elopment Act of 1968, as amended, and shall post copies of the notice iI". conspicuous places available to emplC'}'ees and appl icants-for €nlployrnent or training. c. BOAAOWER covsnar:ts to t.:ixe affirmative action to ensure fair treatment in all phases of e .. ~ploY!llent r training, ap prentice:;hips, pro!t',otion, demotion, ar,d transfer, and re cruitment or recruitment advertising. 2. Federal political and conflict of interest laws. a. The Anti-Racketeering Act (also kno'.m as the Copeland AJlti-Racketeering .tl.ct), as amended, and regulations issued under 29 eFR Part 3, which prohibits kic~backs in construction work funded ~ith federal financial assistance. b. ~he Hatch Political Activity Act, as a~Ended, and imple menting regulations when published, wr.!ch prohibits the use of federal funds for lobbying activit.ies. BORP.QWER further covenants that.: 10.. BORROWER 'Wi 11 establish safegu.ards to proh ibi t en:ployees from using their positions for a purpose that is or gives the appearance of being motivat.ed by a desire for private gait". for themsel·.;es or others i particularly those ..... ith ·..ihoT:l they have family, business, or other ties. B. BORROWER ..... ill not use the assistance provided under the Agreement in the pay:nent of any ponus or COI'!1.'lllssion for the purposes ~f obtaining HUD approval of the ap~lication fer such assistance, or HUD approval of ~pplications tar additional assistance, or any other approval or concurrence of HUD required under this 1>.greerller,t, Title 1 of the Housing and Community Development Act of 1974, as arnended i or applicable HUD regUlations. Reasonable fees or bona fide teChnical, con sultant/ managerial or other such services, other t.han actual solicitation, are not hereby prohibited if th~ir costs are J • • • - -------'----- other~ise eligible as a eDGe Progra~ cost. C. BORROWER -.:ill not adndt any member of or delegate to the congres.s of the United stat.es cr any Res ider,t Ccm.."Tlissioner to any share or part of this A~reement or to allo' .... any benefit to arise from the same. ). Fede.ral labor and employment lao.'. • .-s. BORROWER covenants that~ A. BoAAOWER will comply 'ioli th all applicable federal lebor 1a ... s, regulations, and standards ..... hich require contractors engaged under contracts for the construction, completion, or repair of any bUilding or 'Work financed, in .... hole or in part, wi th assist.ance provided under this Agr-eement. ir-.cluding a 11 I{t.TO requirements pertaining to such contracts and the applicabie: requirements of the regulations; of the United States Department of Labor u~de~ ~9 CFx Pa~t 3, 29 erR Part 5, and 29 CFR Part 5a; governing the payment of -.. 'ages and the ratio of apprentices and trainees to journeymen. If state or local la~ wage rates are higher than those required under the federal regulations, nothing hereunder is intended to reliev~ BORROWER of its obligation, if any; to require payment of the higher rate~. BORROWER shall c~use or require to be in5erted in full, in all such contracts subject to such regulations, provisions meeting the requirements of 29 efR Part 5.5 and, for such contracts in excess of $10,000, 29 efR Part Sa.J. No a'Ward of contract covered under the Agreement shall be made to any contractor who is at the time inel igible to receive an award of contract under the appl icable r-eg'.Jlations of the united States Department of Labor. 4. Environmental and energy laws. a. Section l04(h) of the Housing and Co~~unity Develop~~nt Act of !974, ·,.,hich pl:'ohibi ts the re.lease or-con •• T.i trnent of fun'1s to any person, unless ar. appropriate environner-.tal review has been conducted Lor the activity or program being funded, all other environmental requi re!t'_ents for the conduct of such activity or program have been satisfied, and all proper authorizations to proceed 'With such activity or prograr.-, have been received from BUD. b~ Section 106 of the National Historic }'reservation Act, as amended, Executive O!:"der 11593, and i~plernenting regulations when pi.lblished~ and the provisions of 16 D.S.C. §. 469a-l, relating to the threat to prehistorical, historical, or archeological data by feder<31 construction projects, ""hen performin9' enviror,mental assessments under the National Envi ronment.al Policy Act of 19&9, as amended, and irnplelT,enting regulations when published. c. Sectior. 114 of the Clean Air }.ct, as amended, and implementing regulations ~hen published. 4 ;--- d. Section 308 of the Water Pollution Control Act, as. amended, and imple~enting regulations ~hen published. e. 'i'he provisions of 24 efR Part 35. as amended, 'Which provides that no lead-based paints shall be ~Jsed in construction or rehabilitation ~crk performed under projects funded with federal financial aS$istance~ t. The provisions of 24 C:FR Port 39~ as amended~ which pro vides that the perfor-mance of rehabilitation .... ork shall conform to HUD energy standards for cost-effectiveness. g. Executive Order 11296, as amended~ and implementing regulations when publishad, -...:hich relates to the evaluation of flood ha.zards. h. Executive Order 1! 2.88, as amended. and i'!ttplementing regulations when published, which relates to the prevention, c~ntrol, and abatement of water pollution. BORROWER further covenants that: A. BORROWER's Facj lity 'Wi 11 not be included or. the "List of Violating Facilities" issued :by the Unit.ed States Environ mental Protection Agencj' (EPA) pur~uant to 40 CFR § 15.20~ B. BOR..1:1.0WER will give prompt notice of any notificatic;'1 receive,j from tne Director, Office of Fede:!'al 1I.ctivities, EPA, that the Facility is under consideration to be listed on the IIIIList of Violating facilities. '" 1..11 nonexe-:r.pt subcontracts concerning the Facility shall include the provisions of this paragraph. c. eORROW:EP ..... ill cooper-ate fully in any federa.l enforcem.ent actions instituted pursuant to applicable stat'...ltes or regula tions. 5. MiscEllaneous provisions. a. BORROWER will give HUD and the United States Controller Ceneral through any authoriZed repres~ntatives access to and the rigt.t to exa.minE: all records r bool<s, pape:s i or doc-.;rnents related to the receipt and use of CuGE grant funds under this Agreement. b. No officer, employee or ag~nt of CITY who exercises any functions or responsibilities with respect to the sE:rvices and work to be provided by BORROWER pursuant to this Agreement during his or her tenure or for one (1) year thereafter, sh611 have any interest; direct or indirect, in this Agreement or the proceeds thereof. 5