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HomeMy WebLinkAbout0103.095• .. -." ~ . <:\ ._ ._,." _'<~~~'~~_~::'t:;:.!:--"_-; .. /- TO: -..... " .. City of Palo Alto City Manager's Report HONORABLE Cn-Y COUNCIL FROM: CITY MANAGER DEPARTMENT: Pl ... lliDe IDd Community EnvironmeDt AGENDA DATE: Juu&ry 17,1995 CMR!I03:94 SUBJECT: BWPEST Appl'Oval of all Agreement and Bad,et Amendment Ordin.lI .. to Pro\'icl. Fuds 10 the Palo AIIo Hc.sine Corporatioa for P~ Devolopmeat Expenses for the ns. 753 Alma Streef SiacJe Room Ottapanty Housiq Project . Counc>l aC1ioo is requesled 10 approve an agreemenl with the Palo Alto Housing Caporation (P AHC) which provides f\mds for pro-devclopme 'activities related 10 !he proJ'OSed sing.1e room <>=IpIIIlCY (SRO) housing projec1 at 725-753 Alma Street and 10 adopt I Budget Amendment 0n1inan<:e authcrit.ing !he IrallSfer <Jl $295,000 in Housing Res<rve Funds (Industrial -Coounerci.r Acoount) 10 be used for P AHC's expense> WIder !he agrccmenl RFCOMMl1.NDATIONS Slaff recommends lhal I1le Council: I. Approve !he oUa<:bed funding agreement (with its attached fOrm ofpromissory note) with !he Palo Alto Housing C<lrporatioo, 10 provide a loan <Jl up 10 $295,000 for pro­ developmeDl expense> related 10 the devclopmeDl of single room occupancy hoosing 01 725-153 Alma Street. 2. Adopt !he attached Budget Ameodment OnfIIUlllCC authorizing the transfer <Jl $295,000 in Housing Reserve Funds (Industtial -CoounerciOI A=t) '" be used for PAHC's expenses under !he agreement 3. Authorize the Mayo< 10 execute !he agreemenl in subsfantially similar form and direct !he City Manager 10 administer the provisions <Jl the agreement. -." l- P".ge 1 of 4 "";, .. 7 o POYCY IMPLICATIONS This ac600 is c:oosistent with Cooncil's actions 00 November 28. 1994. as conficmed on IJe<:ember S, 1994. supporti!lg. in 1XlII"..epI, the acquisition of the 72S-1S3 Alma Street .ite "" developmcnt by the Palo AI!o Housing Caporation as SRO bowing end (fIrecting staff and P ABC \0 proceed with the preporatioo of the entitlement application and enviromnental review "" the project and !cr the exercise of the option \0 purchase the site. EXECUTIVE SUMMARy The 8ttachcd .~nI provIDes up 10. m.aximum of $295,000 in City Housing Reserve Funds fur ".,..,...". pre-cleve!opment costs such as architccture, engineerin~ SOIls n:ports and tests, coosuItant fees, financing application costs. mmeli!lg and management studies, City &pp!kaOOo and wst reccvery fees, C()S\S of environmental studies and project IIllInBgIl!lleI as shown in Exhibit A of the agreement. The funds wil1 be loaned 10 P ABC at DO inleres1 and with 00 payments required. Assuming the project procecW, at close of cscruw 011 i&e site acquisition, this pre-deve1opment loan will be ilIcorporated into Blarger loan of funds provi<W "" the site pmchasc and construction of the project. AD funds provided by the City will then be secured by :he property. with the Ietms of that loan \0 be sci at • later dale. The a!tached predevelopment schedule has heeD prepared by staff and P AHC with the objective of completing both the Planned Community (PC) zone applicaOOo review aDd the site acquisition process by the June 30, 1995 ~Iose of escrow deadEne stated in th!: purchase """tract. The schedule has the advantage that ooe cnviroomeotal assessment will be prepared simultaneously on l!!!l!!. L"" site acquisition and the project. This schedule will also allOw P ABC \0 apply "" federal tax Credits aDd HOME funds during 1995. Slaff L'Id P ABC will meet periooically 10 review and reassess the schedule. FISCAL IMPACT This action will reduce the Industrial -Commercial Housing R""em: Fund by $295.000. leaving a remainlng balance ;X $2,646,234. including amounts which were previously oppropriated for the Lyttoo N pr:ojcct, but which are avan.ble for reapprOPriation. ENVIRONMENTAL ASSESSMEllf[ Approval of the pre-clevelopmeol funding agreement is !l()( aD action subject to the CafdOrnia Environmental Quality Act (CEQA). Appropriate env'.rorunenlal review documents will be prepared for the purcbase of the site and for rc"jew of the development project. CMit:l0309( Page 2 of .. "' . .. -~" , .. ~'--'~~, .-. : .... . . • , • • STEps FOLLOWING AfPROV AL Council actioo 011 the Planned Community (PC) zone app!icalion, the purchase op!ioo, a development agreement with P ARC and commitment of the renWning City funding ~ tentatively scl>eduIcd for 1une S, 1995 . . ATrACHMENTs i.· Tcnla!ivc Project Schedule 2. Agr=neot with Palo Alto Housing O:>qloratioo. Assisting with Pre-Developmcm Expenses 3. Budget Ameodment Ordinan« 4. Letter from Pal<> Alt" Housing C<xporatioo Requesting Funding for Pre­ Devclopmetlt Expenses for SRO Housing at 725-153 Alma Street PREPARED BY, CaIhcrine Siegel, Senicr Planner DEPAR1MENTHFAD RFNIEW4~tCJJw4 1M R SCHRElBER DirecIo< of Planning and Comrnl!Dity Environment my.MANAGER APPROVAL, ~l~ -ruNt EMrnG . City ger ce: Palo Alto Housing Corporation Charles 1. Keenan m aDd Mark T. Gates, Jr. IDdependmt BMW Earl aDd Cye Ellison Univ«:nity Pad< Asso. 010 Y.-ginia &; Doo Filion Potricia &; Earl S<:hmidI Rnse &; Bill ThoiIs Polo Alto Plaza Homeowners ~ E.A Mass Bill M<:Cann • Plg<4of4 , • . TEN'J'ATIVE SCHEDULE FOR ALMA SRO PROJllCI' 1111194 M3Jor AdIoDII I MIIesIones Date '" Coo.nc-~ action I,,, I. AdopI SAO II> provide fum. to extend pw<:lWe op<ioD. and Dec. 19, 1994 2. DiRICI. SIlIff '" <XIeDd op6on II> allow time ~ complelion of environmental on l!!l!II ocquisitioo. &: proJect. and complete purc1we l>1 6130195 • PreIimiDary ARB meeting Ian. 5, 1995 • Council action 1<>: Approve pre-<levelopme1ll. loan agreemenI (and rel4ted BAO) 1lIiIh P AHC 10 provide fiIIIds to< COSi c( p~ Ian. 11, 1995 _!II: and tirumcing applic&ioos &: to< envlromnenW studies . • Submission c( PC zone application Feb. >, 1995 • F1l'SI PIamliDg Commission Hearing 00 Feb. 22, 1995 PC zooe application ,. • Cily completes '" adverfues 1hc CEQA M~h 31. 1995 and NEP A envlrooilienta! assessmenI • ARB Heating on PC ZOllO app!icatioo April 20, 1995 • ilc-assessment 0( ScbeduIe April 21. 1995 • 200 Planning ColllClission Hearing on May 10. 1995 PC zone app!ica!ion I c( 2 , .' • CityCOUDCiI IU!horizes Silbmit1aI of Juno, 1995 (est) HOME applicJtion fo< SRO !imding fassuming State bas publisbo<! !be NOF Al • City Council Hearing &: Action on; I. PC Zooe ChaIlge. and 2. Decision 10 exercise option '" Juno S, 1995 . pun:Ilasc tbc sirc; Assignmelll '" P AHC. and 3. Approval of developmelll agn:ement. loan, &: relared SAO 10 provide P AHC with all City Housins Reserve fu)lding foc site purcIIase. """!ruction, ek:. • City Cooncil: 2nd read"mg of PC Juno 19, 1995 ordinanc<: • CIcse of t"""w on site purchase by Assume 6130lIl5, but"1imin& depends on PAHC Apd. schedule •• aIuation and completioD !Jl site clean up """"'" • City applies foc HOME hmds for SRO July or August, I99S (est.) • llffeaive date of PC Zone July 19. 1995 . • P ARC sUbmits application fo< '9S Till July 2S. 1995 Credi< allocation • Till CrecfltS Awarded Sept., I99S (est) • HOME Fouds A waIlIed • HOME funds placed UDder conJr3Ct 10 Dec., 1995 (est) PAHC foc SRO p~ . 2of2 aImasch2. tab 116/95 "",:.< " .. '", ,;------" " AGU:&IIlDrI" :J.lU'WBi!R 'l'IIE CITY O!l' IIALO AL"!"O Al!l]) 'l'III! p;u.o ALro Il00SDlG COItPOItATIO!( • A TT ACID'.EN'I' 2 'i'o r.mJ) pg -Dl!VZLOPKBNT DPIllfSBS FOR A PROPOSED SIlO BOOS DIG DBVJILOPMBNT AT 7Z 5 /1 S3 ALKA S'nD'!' THIS AGREEME..lti'l' {"Agreement") is made and entered into on :::>==::-::::-;;-::;-;::::-~ 1995 .. by and bet ... -een the CITY OF PALO ALTO, a cha~tered city orsanized and existing under the constitution and laws of t1la State c! california ('City') and the PALO ALTO HOUSING CORPORATION.. a corpOration organized and existing -under the NOnprofit Cbrpo~atlon lay of the State of california~ with offices at SolO Cowper Street.. suite 201,. palo .Alto, cal i fornia 9\:\01- {'PARc'}. W I r _ B S SIT B: WHER.EAS,. City holds an optioo co acquire three parcels of real p-roperty located at 725/753 -Alma Street... Palo Alto~ Santa Clara -County.r California [APN 120-27~80,. 120-27-81,. and 120-27- 82}(collectively. the ·Property'l. which may be developed for very low income, single room. occupancy ~"SRO"l rental houl!ing purposes; and ~. WHEREAS... the de~.relop!llent of such Dey affordable SRQ rental housing will further ~he City's affordable housing goals as sta.ted ,in t.he City"s C~rehensive Plan.,-Housing Bleme:r;t:. and Comprebensive Heusing ~~fordability Strategy: and WHEREAS ... the: City has determined,-based upon information submitted t.o-the City by" FAHC in its report -"'i'easibility of' SRO Housing Development at 753 Alma-, 'that it is reasonab~e to proceed at -t.his t.ime with the pre-:development phase of the SRO rental hou~ing proposal ("'project"j recommended by PARe:; and WlfEREAS... PARe has applie.j to the City fer fin.ancial assistance .. --ith the pre-developa',eot expenses for the proposed: Pt'"oj ect:; and WHEREAS,-the Ciey is willing to make a lean to PARe to cover certain pre-development expenses that: P"..HC must. incur in order for PARe t.o secure :e:oniDg eo,titlements ... housiog sul:lsidies~ and pe::rtna.nent financing for the development of t.hte. proposed project; f " -J NOW.. THEREFORE.. in consideration of the following covenants, a9reements~ terms and ~~ition8, the parties to tbis Agreement agree~ ~O!( 1 -TI!!>i OF AG!!R!!IQ!N'l' 1 . 1 Ie rm aM E'xtens ion The term of this Agreernen,t shall commence on the date 0,[ its execution by the parties~ and shall terminate cn January 31~ 1 ! -"--:: : ~ . ,-. 1~g7r unless earlier terminated in accord&r~e ~th Section 5 hereof or as otherwise provided herein. The term may be extended tor an additiooal period not to excee<l one (1) consecutive year, p..-ovided, bow~~r~ any extension shall be approved ~y the CitY~B Director of 1i'lMning and C<mrunity Environment ('Project MaI,,,.er") only upon the receipt of writ.ten eviden.ce. acceptable to the Project Manager ... that the development of the proposed Project then remains feasible ... aDd that reapooable progress in the development of the proposed Proj ect can continue t9 be trade and has been D'\ade by PARe. I f the Project ManageI' determines -that PARe has u,nreasonably delayed t.he Project ... then the request for an extensicn of the term snall be denied. and_ all funds loaned to PARe under this Agreement shall become ilrmediately d'~e and payable. A failure by PARC to' immediately pay such funds shall constitute a default under this Agreement. 1.2 Iermination Hoon .Excuse of Perfo:-rrance If; at any time during the term of this Agreement... the Project. Manager dete.rmines that ?ARC cannot perform its pre­ development Qbligations under this Agreement due to fa~tors beyond the -reasonable control of PARC. i.o<:luding; without: limitatio'O.; ~aining the required zoning entitlement per.mit9 or the necessary project fi.nancing, or both .. then t.his Agreement shdll be t.erminated by the City. and no repa.ymen,t of any funds provided under t,his Agreement and the promissory ,note ("No~e") which shall secure the repayment. of 'funds hereunder shall be_ required. In such event~ the City shall provide PARe with not less than fifteen (lSI days' prior written or telegraphic ~ice of termination_ upon tt~ effective date of ~e~ination. all duties of Lhe City and PABC s-hall t.erminate .... excepting the obligation of PAHC to make its records ~-!=ern!ng the pre-development phase of the p;-oposed Project available to the City~ -upon req....:.est.", which obligation shall survive the t02rmination of this Agreemen,t .. SEC7IQ!l 2 -LOAN OP FmmS 2 • 1 Loan Amount. The City agrees to Inake a loan to PARe at its office a&1ress in an aggregate principal alllO'..lLt at anyone time -outst.anding up-to but DOt exceedi~ t~o hundred and ninety-five t.housand dollars i $:2'9 5", 0-00) _ Withi!' such limit, PARe !fay borrow. repay. and reber-row at any time O-!: from time tv time frOCI the date hereof to and including the expiration or termination _date of this Agreement ... whichever is earlier_ In the event: that the amounts payable by PARC to any and all sources for pre-development expenses sna11 exceed the sum of $29S",GOO~ then PARe shall be solely responsible tor paYlog any and all" amcunts in excess of S~95. O,OO~ 3.00 t1:!e City shall not be obligated to loan in excess of the ccmntitment set forth herein. 2 950,11)1)'11007;)7 .. 6 • 2.2 fromiesQry Npt@ .All r~ests. for reitt'bUrsement {"borro'Wing") -under this Agreeme:llt shall be eviden<:ed by one Note o.f l'ABC, in substantially the fOr1ll of Exhibit A, payable to tbe City of Palo Alto, upon ~emand. in writing. and executed by a duly autborize1 officer or representa.tiVe of PARCo ·The Not·e shall bear no i:rit.erest. No periodic paymen·ts shall be required during the ten::. of· this Agreement. Nothing herein shall prohibit PAEC frClt!\ payi.cg the loan .. or any part thereof. to the City before the Note shall become due. 2 ~ 3 piBhprsepttont of funds The City 8ball disburse loan fu..'I1ds under this Agreement. t.o PAHC on a rei.!'r.br.lrsement -basis only upon the receipt by the_ project Manager of wrttten proof of actual coats in~urred and paid for by PAHC. 'Before FMC req .... est reimbursement of costs .. it shall sub!'.it. to. the Project Manager one il} legible copy each of any and all cootrar.t:s and subcontracts for services to be rendered or work -to be pei""formed, >or-both, in connection "With the pre-development phase of tbe proposed Project~ Every cont::-act shall clearly and fully describe the "nature and s.cope of services to be rendered or work to be ~l.'farmed. or both r and the basis of payment of applicabla costs. Any and a1.l. such costs sball be reasoriable and necessary in order to secure the devslopment approvals and financing of the proposed Project... The project Manager may refuse to reimburse PAHC for any -cOsts not approved .. in advance .. by him or her. Any borrowing -under this Agreezr.ent shall be made iz: accordance witb City policies and procedures~ PARe shall submit with eacb borrowing a written ~ertification· ~hat {I) the services or work, or ~h, bas been satisfactorily rendered cr performed, f2j the costs were paid in. accordance with the applicable contracts and subcontracts .. and ill all funds were expended on behalf of and exclusively for tbe Obligations of PARe under the pre-development phase of the proposed Project. Disbursement of funds for PAH~s proposed Project administratioo and overhead costs for the pre-development phase shall be established on a fixed fee basis and disbursed as follows: iiI $2(1,00'0 -upon the submittal of a complete application .for Planned Cc:rrm.lnity {PC} zone for the City"'s review .. and iii. $20,0'00 -upon the completion ot both the .city Council hearir.-g and the cuing of act. i 00., if any.. on t.he PC zone and development and funding agreement. . Agreemen·t incloding~ att:orneys, 2.~ Pre-Development ExpenSES Funds shall be loaned to PAHe under the terms of this for t'he payment of certain pre-developmec.t expenses, without. limitation. the costs of fees charged by architect.s, engineers.. and utarketi!l9 and manageme:lt /. , . conBultants_ the fees cf & contract project manager~ the pr~ed project administration and overhead costs of PAHC~ the costs cf envirocmental studies a.nd tests. the permit_ application and cost~ recovery tees associ .. tedwith the tiling of a Planned Community Eoue application ~~h the City. the fees and costs aS9~iated with the securing of financing aDd housing subsidies to make the Project financially feasible~ and other reasonable and necessary expenses, ae gen~rally described in the pre-Development Budget. ~~ibit B. SBC\"IQR ) -C9VD1NJ'l's em COMDITIONS 3.1 Rrp1ect Development PJl.HC covenants and agrees to prepare~ or cause to be prepared. written plans~ specifications, and applications for the Prcject~ generally consistent ~th the project alternative recommended to the City.by PARe in its report described in the third ~ecital of this Agreement. 3.:l ~t Funding PARe covenants ~~ agrees to apply for an allocation of low income bousi~ tax credits made available under the Internal :Revenue Code of 1986,. and any other public or private funding programs, as approprtate~ in addition to the funding prcvided by the City under this Agreemen,t. PAHC sball seek ag-gregate funding fram all sources so that the propo£ed Project will be financially fe_asible and affordable renta.l housing for very low income h<:KJ.se­ holds (defined l for purposes of this Agreement, as average montbly rents at ooe-t.welfth U112th) of thirty percent (30\:} o·f a household inc~ that does not exceed f~rty perc eDt {tOt} of the then current HOD median household income for Santa Clara COUnty. adjus'ted by household size I will be offered. 3 ~ 3 Insu@oce PARe ... at itS' sole cost and expense, shall obtain and maintain during the :term of this Agreement and any substituted agre~~nt~ insuran~e in responsible companies in such amounts and against su~h risKs as is satisfactcry to the Citys risk manager, including, without limitation~ workers' compensation, commercial general liabilit.y, comprehensive automobile liabilit.y. personal injury and property damage i.nsurance~ as appropriate. insuring against all liability of PAHC and its authorized representa~ives arising out. of or in connection with the development of the proposed Project., the development. of the Property. or PAHC-'s performance or noapertormance under this Agreement. PADC aDd any general contractors and S1Jb....--ontractors assigned to the performance of the terms a.ld cooditions of thie Agreement c,r to the developtnent of the proposed ~roject shall comply ~th the coverages described in the Insurance Requirements~ Exhibit C. MOdifications of any insurance requlremen·ts set forth in Exhibit C shall be submitted, in writing~ to the Project Manager. Any such modification shall . receive the concurrence o·f -the Office of City Attorney. 4 • < .PARe shall maintain in accorcla.rn:e with generally accepted aec~JDeing principles on ~ current basis complete reco~ds, in-cludiog bocks of original entry .. ~ou'['"ce documents 5upporting accounti'l9 transactions.. serv-ice records. a general ledger .. eanceled checks" time sheet.s .. and related docwnents and records to assure the proper accounting of funds and the performan~e of this Agreeme!lt~ PARe shall furnish any and all information and reports which may be requ..ired by U·.,e project. Manager or other officer .. employee .. or representative of the City and any other entity that may provide funds .~or the development of the Property~ .PAEC shall. ~nait ~ access to its books, records and accounts by the representatives and e~loyees vf the City and any other entity that :nay provide funds tor Uie developmet't: of t.he Property, d.uring regular businesa bours, for the purpose of investigation or aUdit to ascertain cqrnpliance with all applicable 1a..,s, regula.tiOns, rules and orders and for the purpose of evaluating and monitoring PARC's complianoC/!. with the previsions o,f this Agreement~ All such records shall be ~etained by PARe and shall be made available to the City, its officers .. employees l and repr-eeent.at.ives" aM any -other entit.y t-hat my provide funds for the development of the Property. upon req-olest .. for review or audit for a 'period of at least three (3) years following the expiration or termination of this Agreement. 3.S Conflict g.f "'Xe;re9t PASC -covenants that... In the perfonnan-ce of this Agreement. no person having a finan~ial interest therein shall be employed by PA.'1C i.n coti..."lectioo' -with .the performan<:e of' the ~-ovislons of this Agreement O~ in tha development of the proposed Praject l except as the City ma.y approve... in advance" waive, or ratify such conflict of interest. 3.6 Msignrnent Neither this Agreement oar. to the ext~nt permdtted by applicable 1a .... ~ the rights and obligat.ions of PA.liC hereunder ... shall be assigned ,..-ithout. the express prior vritten consent of the' City. which Consent: shall be ev1deDCed by resolution of the City Council_ Any attempted assignment shall be void and, at the sole discretion of the City. eball be deemed a default under this A9r~ament and a breach of this Agreement_ . 3."} ~rate S,tatl1s PARe covenants and agrees to maintain its status ss a -corporation duly organized. validly existing. and in good standing under the Nonprofit Corporation Law of the State vi California at all -ti1tes during the tertii. of this Agreement and any Substituted agreement. 5 .. , " SE'fIQII ~ -gpll!SllII'!'lI.tIotIS 4.1 Fina~cial Ipteres~ PARe represents that i~ presently has no interest, and shall not acquire any interest, direc~ or indirect, financial or ~herwise. which Yould conflict in any manner or degree vith the rendering of se:rvices (jr the perfo~e t:lf 'Work-. or beth. under this Agreemen·t Q.% sW:.st-ituted agreement or the proposed Project. PARe further represents that no person vho has or will hav~ any financial interest under tbis Agreement or substituted agreement is an officer. employee, or official repre5ent~tive of the City. 4.2 CQrporate Authority The ...... '<1ng and "perfoman<Oe tty PAR<: of this Agreement and t.he Note have been duly authorized by all necessa.ry .corporate action and viiI not violate any p~ovision of law or of its charter or bylaws" or result in the breach -of or constitute a default or r:equire any consent under any lien .. cila.rge .. or e.::.-curribrance upon any property 0-% asset.s of PABC pursuant to any indenture or other agreement to 'Which P1ol!C is a party or tty Yhich PAliC cr its property may be bound. The Executive Director of PARC has been duly a~thorized t~ execute this Agreement on behalf of PA.qc. 4.3 Litigation. There are no SI.l.l.ts or prOoCeedings pending or; to the knowledge of PARe. threatened again9t or affecting PARe whicb .. ~f adversely o.etermined .. would bave a J:'iltez-ial adVerse effect on the fina-b;cial (X)Qdit.ion or business of PARe; atld there are no proceedings pending or.. to 'the "knowledge of PARe.. threat.en~q-,_ aga.i~t PARC which ""auld have a material adverse effect on the pe-:cfo~e o,f t.his Agreement by PABC. SBC'UOH 5 -. SUl!S'rITllTIO!! 07 AGup!l!!!'l' JOO) l!!O'H In the event that the City shall. eXercise it.s op-tion t.o acquire the Property or acquire the Property after it has determined that the Property is d~velcpable for SRO rental r~sing. the C~ty agrees to assign its option to aeq~ire or convey title to t.he Property co PARC ur.der such terms and conditions as may be mutUally agreed by the parties4 At the. time of su-ch assig-nmen-t o-r conveya:lCe .. the parties shall en,t~r il'.-to a. sUbstitut.e agreement for the aCqUisition of the Property a.nd d.evelopment. of the proposed Project by 'PARe fo!' affordab1e SRO rental houBing~ The terms and conditions of this Agreement ~4 the ~e shall be rene~iated.. and any additional funds provided and to be provided brf the City fer the acquisition and development of the Property and development of the proposed Project shall be Added to and consolidated with the outstanding unpaid principal balance of t.he Note. The new Note shall be secured by a deed of ~rust ~ tbE Property in favor of the CitY4 '~IIC I}'II 007tl71tii ~_<_,. '" ,; _< c ;,.-:.~.' ',-:'-,_ . " I • , • .. • -c •• '~ UCltOll , -l.PPL:ICATrOlf OP nmPAL J'OOLATIOBS It the City determines that the PrOperty is developable as SRO rental housing, then", as a condition precedent to the City's provision' of additional tUDding-to PA.t{C under a substitute agreement, PABC shall cooperat~ witb the City to secure additional funding from such diverse sources as the federal HOME program. PARe agrees to perfo~ its obligations under this ~9reement in a ranner that will not jeopardize or interfere or conflict with, or otherwise preven~, the ~~in~ng of future federal funding. PARe shall comply with all applicable federal BOMB and other governmental rules and r~Jlation9. SBCTIO:B ,. -nmPPUTY PAHC agrees to protect,. indemnify.. defend and bold harmless City. its C~il members .. officers, agents and employees, and Charles J .. K~enan ... III and ~,rk T. Gates .. from any and all demands., claims .. or liability of any nature .. including death or injury to any persCID. .. propert.y damage or any other loss. caused by or arising out of PAHC's .. its officers·, agente·~ subcontractors' or employees· negligent acts.-errors or omissions •. cr willful misconduct .. or conduct for which PARe may be strictly liable in the performance of or failu~e to perform its obligations under this Agreemen·t •. o.,.'"l'IO!! 8 -lllPM!LTS The City sha11 be perarltted, upon written notic~ .. to UJ immediately termdnate Its commdtment to loan funds hereunder. and i2) declare tbe principal of the loan or the Note to be imnediately due and payable ... whereupon the same shall become imm.ediately due a!>d payable.. if any o·f the following event.s of default have occurred and have not. been remedied: A. FAMe makes a representation in tbis Agreement ~bich shall prove to have been false in any ~aterial respect; or B. PARe shall default in the payrrent .. When due, of any principal of the loan or the Note or any other sums pay-c.ble by PARC under this Agreement; or C. PARe ahall default tor a period of thirty (30) days in the performance 'Of any other non-financial obligation to be performed. by PARe under this Agreemen·t .. or D. p_~ shall apply for cr consent to the appointment of a receiver .. tr~stee, or li~~idator .. or is unable r or admits in wr1ting its inability to pay its de~s as thEY fall due. or makes a seneral assignme~t for t.he benefit of its creditors ~ or is adjudicated. a bankrupt O'I" insolvent. or files a voluntary petition in bankrup-tcy; or E; PARe i.e subjected t.o t.he entry of an order ... decree~ or judgment ~pproving t~e reorganization of PARC. and such order ... 1 decree, or judgment is unstayed tor a period of ~re than thirty nO) days. or S\lch period as .. ay be permitted by la .... ~ ~ice Which ~y be or is required to be given under this Agr&ement shall be dep-~ given on the seco--u day !ollowlng the date _on vhlch the same has been mailed by first class mail. postage prepaid .. addressed. as (01101110"'9: CITY Copy to: PUC City of Palo Alto .2 5·!) Hamil ton Avenue palo Alto . .cA ~4301 Attn: City Clerle "Direct~r of PlanI\ing • Community Envitonment Ci~y of Palo Alto 250 Hamilton Avenue palo ~tOI CA 9~301 Palo ~to Housing Corporation 540 Cowper Street. SUite 201 Pa,lo Alto. CA 94301-1806 Att.n: Executive Director,. SECtIOIJ 1 a .. KIFJ" Y¥!(!I8 10.1 Neit.her the fa.ilure no·r the delay on the. part of t.he City to exercise any %lgbt. power. or privilege hereunder shall -ope_~ate as a waiver thereof .. · nor shall any single or partial exercise (If any rigb·t ... power. or privilege hereunder preclude any other or further exez:~.se t.hereof or the exercise .af any other right. power. or privilege~ 10.2 N~hing contained in this Agreement is intended to. or shall be cor".tBtrued 1.0. any manner. as creating or establishing the relatiocsbip of employer and employee between the parties. PARe shall at all cimes remain an indepeode,nt contractor witt.. respect t.o the services t.o be rendered or work to be performed, or both, under this Agreement.~ . lG.3 The covenantsl agreemeots, te~, and conditions of tbis Agreement shall inure 'to and be binding on the su:ccessors and assigns o·f the part.ies. Any provision of this Agreerr.ent wbich is characterized as a covenant or a condition shall be deemed ~b a covenant and a condition. 10.4 Any ame~nt to this Agreement shall be binding upon the parties. provided: sucb amend:ment. is set forth in a writin9 signed by the party to be charged. The City Manager of the City is authorized on behalf of the City to approve any number of minor modifications to the Pre· Development Budget wit~t ~aining the consen·t of the City 'Council, provided the aggresate amount of su-c'h' budgetary modifications shall not exceed teo percent ilC-t} of the 8 llSOI 10 !)'II 00707\6 • • pre-Development Budget_ 10.S n,ia Agreement shall not be construed or deemed to be an agreeme.c.·1'; tor the benefit o,f any third party .. and no third party shall have any cIa!. or right of action hereunder for any cause yt~tsoever.. . 10.6 If any provision of. this Agreemen·t, shall be d.etermined by a court of competent jurisdiction to be invalid, illega1, void, or unenfcrceab~e in any respect, the validity of all ~her provisions herein shall remain in full force and effect. 10_7 PARe shall lack any authority or power to pledge the credit c·r the_ City or incur any obligation in the name of the City. 10.8 This Agreement constitutes the entire a9reement ot the parties concerning its sUbject matter~ and ther~ are no other oral or ~Titten agreements of the parties not inco~rated in tbis Agreement. 10.9 The Agreeme~t and the Nue shall be o1aemed to be a contract made under the laws of tbe State of California. and for tbe purposes be reo! shall be governed. and construed by and in ac~ordance ~th the laws of the State at California. 10.10 ~l ~~ibitB referred to in this Agreement and any addenda" apper.dices" attachments, and schedules -wbich may .. frOOl 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 o~ this Agreement .. 10.12 This Agreement may be executed in any number of coun'terparts,. each of--which shall be an original. but all of which t.ogether shall constitute one and the same instr",JlUent. 10.13 The paragraph headings are not a part of this Agreement and shall have no effect upon the construction or interpretation of any part of this Agreement. IN If'I'no'ESS WHEREOF. the pare-ies have executed this Agreement in Palo Alto. california on the date first a.bove w-ritte!L C~TT OF PALO ALTO Mayor 1r.'l'TBS'1'; City Clerk 9 ." ,,~ ~'1::- ~~\.,' "-l~-' -~ . .,.!---"" • Senior Assistant City Attorney City Manager Exhibit A, Exhibit s: 1bc.<'l1!>i t C, ATTACHMENTS .Premia sory Not e Pre-devel~eot Budget Insurance Requirements 10 ". • KmIBrr A P2O!USS02Y ItOTB (CI'I'T BOOSDTG USGVlI PllNDS) 1295.00Q.00 Date: Palo A1.to, Ca11foru.la FOR VALUE RECEIVED." the undersigned, PALO Al.'I'O BOOSDTG ~ICId' ('"SCrrower'")" -hereby promises to pay co the cxn .oF PALO ALTO i-Bolder"} .. o:r order., at Its office of Revenue Collectiona .. 250 Hamilton ~venue, Palo Alto.. or at such other place as may be designated .. in writing. by the Bolder" the prin~ipal sum ~f !Wo B~dre4 .iGety~~ive TDousand Dollars ($295"OO~) pursuant to tbe terms and cocd.itions set forth in this promissory Note (~ot.e"). The principal amount: o·f this Note shall bear interest at the rate o-f zero percent (Ol) per annum. Fayment of the principal sum sr~11 made upon demand cf the Holdar,. but: in no event shall paymen·t be J!lade to the Holder later than January 31~ 199'1. whether or r.oot. demand. t.herefor is made by the Bolder. This Note-is subject t.o the additional te~ ann conditions set forth in this Noee~ 1~ This Note is made in connec-tion with a contract entitled "'Agreement between the City of Palo Alto and the Palo Alto Housing Corporation to Fu·nd Pre-Development Expenses for a Propoeed SRO SouSing Development at 725/753 Al~a Street" (tbe "Agreement"I, and is attached to and incorpcr&ted into the Agreement as -Exhibit A. AJl covenants. representations s and te~~ of default and re8~ies fer default set forth in the Agreement are io~orporated herein by reference l and made a part bEreof~ " 2~ This NOte evidences the obligation -of che Borrower for t.he full repayment to t.he Bolder ... in accordance with this Note and the AgreemEnt 6 of the funds loaned thereunder to the Borrower by the Holder. SUch f~~ds are to b~ used solely by tb~ Borrower for the proposed Project: as described in the Agree."J'te-ct. 1. 7his Note is 'Ul'lsecured by a lien .. eocurrIDran.ce s .or mortgage on the property of the Borrower. subject. to any terms of the Agreement to the con t ra ry • .... The t.erm. of this Note shall commence 0Cl. the date of its executiOn by t.he Borrower .. and; s\.lbject to the tertI'lS and conditions of the Agreements shall expire or terminate on the date on which the Borrower Jnakes full payrnen,t of the prin-cipal SU-.-"ft of t.his Noce~ 5.. At any time. and frem time to time. the Borrower may prepay to the Bolder the principal sum of this Note, or any part thereof, without penalty. . 6. The Borrower and any maker, co-maker, indorser, guarantor, or a~y other party (collectively. the ·Obligors·)~ ~~ each ot them: (i.J wai.ve notice of default. notice of ac~leration, notice o,f noopaymen,t. presentment for payment. de.mand. .. p-r-otest, notice of demand, notice of protest.. notice of nonpayment. and any other ~tice required t.o be gbreD under th~ l~w to the Obligors; (ii) <:cc.sen,t (s) t.o any and all delays, extensions, renew-als .. or other zoodifieatlons of 'this Note or waiverS! of any term h~recf or release or qischarg-e by the Hold~r of any of the Obligors or release ... substitution ... or failure to act by tbe Bolder, from time to time. and agreets) ~hat no such action l failure to act, or failure to ex~rcise any right or remedy 6n the part of the Holder shall in aoy :ma..ni.I.er affect. or impair tbe obligativos -of any Obligor or be construed as a _~iver by the Holder ofl or otherwise affect. any of the Bolder'"s rigt.ts under this Note or t.he Agreement, under any indorsement: or guaranty of this Note; and (iii) (join-tly and ir.dividually. if IDOre than one) agree{s} to pay .. en demand. any and all costs and expenses of collec-tic-n ot this Note or of any indor~ement or any guaranty bereoL including attorney~s tee9~ 1. The pleading of any statute of lirr~tations as a defense to any deIrIa..OO against the BorrO'Wer is expressly -vaived by the Borrower. 8. If any cefault is made hereunder I the Borrover and the Obligors .. jointly and individuall.y. promise t.o pay the Holder's attorneys'" fees and ocher related costs and expenses incurred by t.he Holder in cOllllec-tioa with the enforcement of any rights cof the Holder.. The Bolders right to such fees shall not. be litnited t.o its representCt1:ioo by staff at.t.orneys of the E"older·s Office of the City Attorney ~ and such representation shal1 be valued at the customary and rea~le rates for private sector legal services. g. The O\ltstanding unpaid balaIlce of the prin<:ipal st:m of this Not.e shall ~ at. the opt.ioc. of the Holder ~ becarr.e. irnnediately d'\.~e and payable upon the failure of the BorrOirfer to l!1alte any payment hereunder as and when due or upon the failure of the Borrower to perform or observe any other term or provision of this Note or the Agreement. I-f the outstanding unpaid principal bala.o.-ce o,f this Note is ~ paid within thirty (30) days of demand therefor, ta~ Borrower ahall pay t:o the Holder interC!st equal to one percent U\l of the unpaid principal amount. O~ the highest rate per.mitt:ed ~y lay. Whichever is less. per calendar month. or fraction thereof. If this Note be reduced to judgment.. such j~~nt shall bear the statutory interest rate en judgments. 10 ~ J.ny llOt-ice. demand. o,r otr .. er communication required hereunder shall n~ be deemed sufficiently given, unless sent by certified !rail. postage prepaid.. return receipt. requested. or by expresa delivery service or overnight courier service, to the principal office of the a.ddre~see... or at. such other address as may be designated. in writing. ,from time to time: " Holder: Borrover:- City of Palo Alto 250 Hamilton Avenue Palo ~~to~ california 943~1 Attn: City Clerk Palo Alto Housing Corporation 540 ~wper Street l Sui~e 201 Palo Alto, CA 94301-1606 Attn: Executive Director T"ne ~elivery shall be effe=t:ive on t.he date shown on the delivery rece,ipt O~ the date on which the dl!live1."Y vas refused. 11. The covenants, agreements I terms~ and conditions of this Not.e shall inure tos and shaJl be binding on l the successors and assigns of t.he Borrower and ~he~Obl:igcrs~ 3 PALO AL'l'O Il00sIllG COIU'ORATIOB' By: Marlene B. Prendergast Executive Director 540 Co~~er Street; &~ite 201 Palo Alto l CA:" .94301 Architec~ure~ Engineering, Environmental Studies and Teats Financing Applicatioris, Fees, Appraisals. Financial CoOsul cant , I< Legal Fees Pe~t Applications & Cost~~ecovery Fees Marketing • Management Plan contract pro!ect Manager PABC Admini~tratioa • Overbead ~scellaneous _ Contingency $ $ $ $ $ $ $ $ n1.0~Q 28.~OO 40,O~· 10 .. 0-0-0 20,000 40,000 30.000 295.00'0 BXIIIBI'!' C fOLICY Vp'nrox LIMITS Qr LIMILITY WORURS 6 COMPENSATION COMPREHENSIVE AUTOMOBILE LIABILITY .. inc1udiog owned, hire ~ ~ and nooowned automobiles CCt>lMERCIAL BENERAL LIABILITY, including products and completed operations, broad fo~ contractual. and personal i~jury~ Statutory Bodily Injury $1,000,000 ea. person & $1 .. 0,Q·O.COO ea. occurrence Pn'perty DGmage $1,0'00,000 ea. occurrence Bodily Injury $1. C-CC. 00'0 ea. person , $1.000,0-0'0 ea. occurrence; $ll'O<lO~ 0'0'0 aggregate Property Damage $1,000,000 ea. occurrence Each in9~rance policy required by this Agreement shall contain th~ following cla~ses: 1. -Tbis i~surance shall ~ be cancelled, limited in scope of coverage or noorenew~d until after thirty (3D) days written ~ice has been given to the: CITY OF PALO ALTO/Planning and Comnunity Environment Department. p~ O. Box ~02S0, Palo ~to. CA 9~303.R 2. -All rights of subrogation are hereby waived against the CITY OF PALO ALTO and the members of the City Council and elective or appcinti·"e officers or employees. when acticg within the scope of their employment or appointment. -.. 1. -It is agreed t~at any insurance maintained by the CITY -oP PALO AL'l'O vill apply in excess of., and not cO:l,tribut.e to, insurance provided by this policy r- ". -T'be CITY 'OF PALO ALTO is added as an. additional ins'.J.red as respects operations of the !larned insured, but only as to ~ork performed under this Agreement. Ail in$uran~e CQverage required shall be provided througn carriers vith a A.M. BEST & Co. ratin9 of A!X or highe~ that are admitted ~o do business in the State of California. The certificate rsl of insurance evidencing su'ch coverage shall be compl~ted and executed by an authorized representative of the company providiDg insurance. and shall be filed with and approved by the City. ATTAClIMENT 3 ORDINANCE NO. ORDINANCE OF ~ COUNC!I:. OF TIlE: CITY OF PALO ALTO AMENDING T">1E BUDGET FOR tHE FISCAL YE.>.R 1934 ·~5 TO PROVIDB ASSISTANCE WITH PRE-DEVELOPMENT EXPENSES FOR SINGLE RClClM OCCUPANCY HOUSING ~.T .725 A."ID 753 ALMA STREET WHEREAS. pursuant to the ~rovisiona of Section 12 ofAxticle III of the cr~rter of the City of Palo.Alto, the Council on June 20~ 1934 did a~ a budget for fiscal year 1994-95; and WHEREAS, in November, 199) the City Council acquired a one­ year option to purchase vacant property at 725 a.."ld 753 Alma Street; ar.d ~, the City of Palo ~to has determined~ based upon the information coo·tained in the Palo Alto Housing-Corporation"'s rePort" -Feasibility of SRO Housing Development at 153 Alma· r that it is reaeonable to proceed at ~his time ~ith the predevel~~nt phase of the SRO project as recommer~ed in said study. NOW, THEREFORE, the Coun-cil o.f the C~t.y -of Palo Alto does ORDAIN as follows: SECTION 1. The sum of 'iwo Hundred Ninety Five Thousand Dollars ($295 ... (l·a,O} is hereby authol"ized to be leaned to tbe Palo Alto HOusing -Corporation. The Housing Reserve F'l1:."ld is correspondingly redu-ced and the Reserve for Notes Receivabl~ is correspondingly inez-eased. SBC1TON 2. This transactien ~ll redu~e the Housing Reserve Fund from $2 .. .941 ... 234. to $2.646,234 and will increase the Reserve for.~es Receivable from $2.253 ... 538 to $2 ... 54S~53B as of January 6, 19.95-. ~The Rousing Reserve Fund balance cited above includes $1 ... 0150-... ova in unspent Lytton IV Project appropriations. These funds are projected to be available for reappropriati~). SECTION 3. As specified in Section 2.26.CaO(a1 of the Palo Alt.o Municipal Code.. a two·thirds vote of the City Council is required to adopt this ol'dinance. ~---.. ' • SECTIQN I. The Cou~il of the City of Palo Alto herebY finds that the enactment of this crdinance is no< a project ~~d~r the Cal ifornia Environmental Quality Act and. t!'"1erefore... no environmental impact assessment is necessary. SECTION 5. Municipal Code, adoption. As provided in Section 2.04.37> of the ~al0 Alto this ordinance shall become effective upon INTRODOCED AI'D PASSED: NOES: ABSENT: ATTESl': APPROvED: City clerk Mayor APPROvED AS TO FORM: Sr. Asst. City Attorney APPROVED: City Manager Director of Finan<:e • • ., Director ~f Planning and Community Environment At tacil.."D.en t .fi Palo Alto HOllslng Corporation ~ COwper s.t::eet .. sune: 201 • PalO Alto. Call.fcml;a 94301 .. '4l~ 321·9709 ",ax (41 ~ ,2i"4-34] January 6, 1995 J!Jrae Fleming City MlU1a6er City of Palo Alto P.O,Box 10250 Palo Alt<>. CA 9430] Re: Pre<!evelopmeO! Cootract f<l< SRO Housing at 725-7S3 Alma Street Dear lune: After U-", coone-a's positive response on November 2~, 1994. the Palo Alto Hot.5ing Corpotaoori (PAHC) is ernllusIis6c about oovw.g ~'aTd 'IiIrlil tlie appropriate approva1s foc SRObousiog at 725-153 Alma S!reeL We are in the process of ~aring an apptication for I. Planned ComrnurJty Zone and submitting materials ~ fOr cr.een ... 'iror!mer!!"·.a.I review of both the 1a~ acquisition and tile housing project. We al'l&ipate an aggressive sc1leduTe ~ obtain zoning approvals and City eommitmenl of funding before the land option exptrC's on lune)O~ 1995. We a1so bope 10submil an appucafion '" the State Tax Credit Anoc.atiun CQmmitt~ by July 25. 1995. B-j this le:ter .. PAHC formally requests 2. klan of $295,000 in Housing Reserve fund's to accomplish t.~e predevelopmenl activiries. The proposed budget ret1ects eX{e:;:'lsjve efforts by ~AHC .. the arcbitect and various potential 5ubconLrac~rs 10 est mate reafis6c COSlS for !:his prede\.-el<Y.' ,,et1l phase. Please agendize our request t:or Council approval as sooo as iI is -cooveruei\:.;" Than:t yoo for your support of our efforts. SincereIy, PALO ALTO HOUSING CORPORATION ·~±@~Je'o~ E~ec'tQ:ve Director Cc.: .!='.atherine Siegel. Senior P1an ner .'-",.