HomeMy WebLinkAboutMINUTES - 03232010 - C.127RECOMMENDATION(S):
1. APPROVE and AUTHORIZE the Conservation and Development Director, or designee,
to execute required legal documents to provide $650,000 in HOME Investment Partnerships
Act (HOME) funds to Resources for Community Development, a California nonprofit
public benefit corporation, for the Berrellesa Palms senior housing project, Martinez; and
2. FIND, as the responsible agency, that the Notice of Exemption prepared by the City of
Martinez, as the lead agency, is adequate for purposes of compliance with the California
Environmental Quality Act; and
3. DIRECT the Conservation and Development Director, or designee, to file a Notice of
Exemption for this project with the County Clerk; and
4. DIRECT the Conservation and Development Director, or designee, to arrange for
payment of the $50 handling fee to the County Clerk for filing such Notice of Exemption.
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 03/23/2010 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I
Supervisor
Gayle B. Uilkema, District II
Supervisor
Susan A. Bonilla, District IV
Supervisor
Federal D. Glover, District V
Supervisor
ABSENT:Mary N. Piepho, District III
Supervisor
Contact: Kara Douglas 335-7223
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the
Board of Supervisors on the date shown.
ATTESTED: March 23, 2010
David J. Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc:
C.127
To:Board of Supervisors
From:Catherine Kutsuris, Conservation & Development Director
Date:March 23, 2010
Contra
Costa
County
Subject:APPROVAL OF HOME INVESTMENT PARTNERSHIPS ACT LEGAL DOCUMENTS FOR
BERRELLESA PALMS SENIOR APARTMENTS IN MARTINEZ
FISCAL IMPACT:
No General Fund impact. HOME funds are provided to the County on a formula
allocation basis through the U.S. Department of Housing and Urban Development
(HUD). CFDA# 14.256
BACKGROUND:
The purpose of the Berrellesa Palms project is to increase the supply of multi-family
rental housing affordable by, and available to, lower income senior households in Central
County. The project involves developing a 49-unit apartment building located at 301
Berrellesa Street, Martinez.
The total expected cost developing the apartment building is $18.4 million. Of this
amount, the predevelopment costs, excluding the cost of acquiring of the property, are
expected to be approximately $1.4 million. Through previous Board actions, the County
has approved the following in support of the project:
1. $1,350,000 in FY 2009/10 HOME (to be used for development-related expenses, such
as soft costs (e.g., professional, legal, and financing costs), permits and fees, and
construction hard costs.
2. $310,000 in Housing Opportunity for Persons with HIV/AIDs (HOPWA) (to be used
for the same purposes as the HOME funds).
3. $1,525,000 in FY 2008/09 Community Development Block Grant (CDBG) (to be used
to acquire the site).
Sources of additional funds to complete the development are being evaluated and may
include low income housing tax credits or federal Section 202 Housing for Elderly funds.
RCD would like to enter into legal documents so that it may access $650,000 of the
$1,350,000 HOME allocation for predevelopment costs. Legal documents for the balance
of the funds will be entered into in one or two years when RCD is ready to start
construction. The remaining predevelopment costs will come from grants and loans.
Federal regulations allow HOME funds to be loaned to organizations meeting the HOME
program requirements of Community Housing Development Organizations. RCD meets
these requirements.
The HOME funded predevelopment activities include preparation of a conceptual site
plan, design development plans, construction plans, and applications for development
financing. Predevelopment funds will also be used for soft costs including project
consultants and legal fees.
The HOME predevelopment loan will accrue interest at a rate of three percent and has a
due date of December 31, 2012. However, if the project moves forward and the balance
of the HOME allocation is provided, the predevelopment loan will be combined with
those funds as permanent project financing.
The HOME predevelopment legal documents are attached and include the following
documents (the “Predevelopment Loan Documents”). These documents do not include
the acquisition and construction loan documents. Those documents will be submitted to
the Board of Supervisors for approval at a later date.
• HOME Predevelopment Loan Agreement
• Promissory Note
• Predevelopment Loan Agreement Assignment of Documents
RCD does not own the site so the HOME loan cannot be secured with a deed of trust.
Therefore, the County will require that RCD provide all architectural design,
construction, engineering and consultant contracts and work performed under those
contracts to the County.
This recommended action includes authorization to execute any and all documents and to
take any and all actions necessary to implement the activities authorized under the
Predevelopment Loan Documents, including execution of loan amendments or
modifications for the purposes of agreeing to reasonable extensions of time deadlines,
and estoppel certificates concerning the status of the loan and the existence of Borrower
defaults under the Predevelopment Loan Documents.
CEQA Determination
The City of Martinez reviewed this project pursuant to the requirements of the California
Environmental Quality Act (CEQA). The City determined that the project is exempt from
CEQA under California Public Resources Code Sections 21159.21, 21159.23, 21159.24
and CEQA Guidelines Sections 15192, 15194, 15195, 15182, and 15332. County staff
reviewed the in depth City staff report to the City Council, including its rationale for its
CEQA determination, and concurs with the City’s determination.
If the Board finds the CEQA exemptions are appropriate and in compliance with the
California Environmental Quality Act, staff will post a Notice of Exemption within 5
days of the Board action. This posting begins a 30 day period in which the County could
be challenged on the CEQA findings.
The Board is advised that there is pending litigation entitled Martinez Fair and
Responsible Growth Coalition v. City of Martinez et al, in which RCD has been named
as a defendant, and which challenges the City’s approval of the development on CEQA
grounds.
RCD believes that ultimately the development will move forward and wishes to continue
some predevelopment activities during the litigation.
CONSEQUENCE OF NEGATIVE ACTION:
CHILDREN'S IMPACT STATEMENT:
ATTACHMENTS
Predevelopment Assignment
Predevelopment Note
Predevelopment Loan
PREDEVELOPMENT LOAN AGREEMENT
(Berrellesa Palms)
This Predevelopment Loan Agreement is dated March ___, 2010, and is between the
County of Contra Costa, a political subdivision of the State of California (the "County"), and
Resources for Community Development, a California nonprofit public benefit corporation
("Borrower").
RECITALS
A. Defined terms used but not defined in these recitals are as defined in Article 1 of this
Agreement.
B. The County has received HOME Investment Partnerships Act (HOME) funds
from the United States Department of Housing and Urban Development ("HUD") pursuant to the
Cranston-Gonzales National Housing Act of 1990 (42 U.S.C. Section 12705 et seq. ("HOME
Funds"). Such funds must be used by the County in accordance with 24 C.F.R. Part 92. The
County intends to use HOME Funds which are set aside for entities that are designated as a
Community Housing Development Organization ("CHDO").
C. Borrower has entered into a purchase agreement to acquire a 1.03 parcel of
property located at 310 Berrellesa Street in the City of Martinez, County of Contra Costa, State
of California, as more particularly described in Exhibit A (the "Property").
D. Pursuant to this Agreement the County proposes to loan to the Borrower and the
Borrower proposes to borrower from the County, up to Six Hundred Fifty Thousand Dollars
($650,000) in HOME Funds to finance certain Predevelopment Activities associated with
Borrower's proposed development of forty-nine (49) units of rental housing affordable to low-
income households and attendant site improvements (the "Improvements") on the Property.
E. The City concluded that the development of the Property with the Improvements
was exempt from the California Environmental Quality Act (Public Resources Code Sections
21000 et seq.) ("CEQA") under California Public Resources Code Sections 21159.21, 21159.23,
21159.24 and CEQA Guidelines Sections 15192, 15194, 15195, 15182, and 15332.
F. In accordance with CEQA and with the National Environmental Policy Act of
1969, as amended (42 U.S.C. Sections 4321-4347) ("NEPA"), the County has completed all
applicable environmental review for the activities proposed to be undertaken under this
Agreement.
The Parties therefore agree as follows:
ARTICLE 1 DEFINITIONS AND EXHIBITS
Section 1.1 Definitions
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The following capitalized terms have the meanings set forth in this Section 1.1 wherever
used in this Agreement, unless otherwise provided:
(a) "Agreement" means this Predevelopment Loan Agreement.
(b) "Architect" means KTGY Group, Inc..
(c) "Assignment of Documents" means that certain assignment agreement
pursuant to which the Borrower assigns to the County the Borrower's rights and obligations with
respect to certain agreements, plans and specifications, and approvals.
(d) "Borrower" has the meaning set forth in the first paragraph of this
Agreement.
(e) "CEQA" has the meaning set forth in Recital E.
(f) "CHDO" has the meaning set forth in Recital B.
(g) "City" means the City of Martinez, a municipal corporation.
(h) "City Litigation" means the lawsuit entitled Martinez Fair and
Responsible Growth Coalition v. City of Martinez et. al ( Contra Costa Superior Court Case No.
N09-1719), in which Borrower has been made as a defendant, which challenges the City's
approval of the Development on CEQA grounds.
(i) "Conceptual Site Documents" has the meaning set forth in Section 3.3
below.
(j) "Construction Plans" has the meaning set forth in Section 3.9 below.
(k) "County" has the meaning set forth in the first paragraph of this
Agreement.
(l) "Deed of Trust" means that certain Deed of Trust, in favor of the County
securing the Borrower's obligations hereunder and under the Predevelopment Note, to be
recorded against the Property upon acquisition by the Borrower as set forth in Section 2.5(b).
The form of the Deed of Trust will be provided by the County.
(m) "Default Rate" has the meaning set forth in Section 6.2(d).
(n) "Design Development Documents" has the meaning set forth in Section
3.6 below.
(o) "Development" means the Property and the Improvements.
(p) "Event of Default" has the meaning set forth in Section 6.1 below.
(q) "Financing Plan" has the meaning set forth in Section 3.8 below.
863\82\791500.5 2
(r) "Financing Proposal" has the meaning set forth in Section 3.4 below.
(s) "HOME Funds" has the meaning set forth in Recital B.
(t) "HUD" has the meaning set forth in Recital B.
(u) "Improvements" has the meaning set forth in Recital D.
(v) "Infeasibility Condition" has the meaning set forth in Section 2.9 below.
(w) "Land Use Approvals" means the permits and approvals necessary for the
development of the Improvements on the Property, including, but not limited to, overall design
and architectural review and approval by the City and any other applicable government entity.
(x) "Median Income" means the median gross yearly income, adjusted for
household size, in the County as published from time to time by HUD.
(y) "NEPA" has the meaning set forth in Recital F.
(z) "Parties" means the County and Borrower.
(aa) "Predevelopment Activities" means the activities to be performed by
Borrower during the Term, to be partially financed by the Predevelopment Loan, including but
not limited to preparation of Conceptual Site Documents, Design Development Documents,
Construction Plans, Predevelopment Schedule, Financing Proposal, Financing Plan, and
obtaining Land Use Approvals, as further described in Article 3 below.
(bb) "Predevelopment Budget" means the proforma predevelopment budget,
including sources and uses of funds, attached hereto and incorporated herein as Exhibit B, which
may be amended with the approval of the County as set forth in this Agreement.
(cc) "Predevelopment Costs" means costs and fees associated with the
Predevelopment Activities and related activities, including but not limited to financial and legal
services, defense of the City Litigation, and preparation of funding applications, as shown in the
Predevelopment Budget.
(dd) "Predevelopment Note" means the Promissory Note of even date herewith,
executed by Borrower, that evidence's Borrower's obligation to repay the Predevelopment Loan.
(ee) "Predevelopment Loan" means the County loan to Borrower pursuant to
this Agreement in the total principal amount not to exceed Six Hundred Fifty Thousand Dollars
($650,000), consisting of HOME Funds.
(ff) "Predevelopment Loan Documents" means this Agreement, the
Predevelopment Note, the Assignment of Documents, the Deed of Trust, and the Regulatory
Agreement.
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(gg) "Predevelopment Schedule" means the schedule of performance for the
Predevelopment Activities to be prepared by Borrower pursuant to Section 3.5 below.
(hh) "Project Documents" means all reports, surveys, materials, architectural
and engineering drawings and specifications, Land Use Approvals, any information related to the
Development obtained by the Borrower, and any other documents or materials that relate to the
construction of the Improvements reasonably requested by the County, as further defined in
Section 1 of the Assignment of Documents.
(ii) "Property" has the meaning set forth in Recital B.
(jj) "Regulatory Agreement" means the Regulatory Agreement and
Declaration of Restrictive Covenants between the County and the Borrower which will regulate
the use and occupancy of the Development, to be recorded against the Property upon acquisition
by the Borrower as set forth in Section 2.5(b) below. The form of the Regulatory Agreement
will be provided by the County.
(kk) "Subsequent Loan" means the County's subsequent loan to the Borrower
for the development of the Improvements on the Property, which loan may be approved or
denied in the County's sole discretion.
(ll) "Subsequent Loan Agreement" means the agreement by and between the
County and the Borrower (or Borrower's successors or assigns as approved by the County) to
fund the Subsequent Loan.
(mm) "Subsequent Loan Documents" means the Subsequent Loan Agreement,
promissory note, deed of trust, regulatory agreement, and any other document evidencing, or
entered into by and between the County and the Borrower (or Borrower's successors or assigns
as approved by the County) regarding the Subsequent Loan.
(nn) "TCAC" means the California Tax Credit Allocation Committee.
(oo) "Term" means the term of this Agreement, which commences on the
Effective Date and terminates on December 31, 2012, unless sooner terminated pursuant to the
terms of this Agreement.
(pp) "Transfer" has the meaning set forth in Section 4.9 below.
Section 1.2 Exhibits
The following exhibits are attached to this Agreement and incorporated into this
Agreement by this reference:
EXHIBIT A: Legal Description of the Property
EXHIBIT B: Predevelopment Budget
863\82\791500.5 4
ARTICLE 2 LOAN PROVISIONS
Section 2.1 Predevelopment Loan.
On and subject to the terms and conditions of this Agreement, the County agrees to make
and the Borrower agrees to accept the Predevelopment Loan for the purposes set forth in Section
2.3 of this Agreement. The obligation to repay the Predevelopment Loan is evidenced by the
Predevelopment Note.
Section 2.2 Interest.
Interest will accrue on the outstanding principal balance of the Predevelopment Loan at a
per annum rate of interest equal to three percent (3%) commencing on the date of disbursement;
provided, however, upon the occurrence of an Event of Default (defined below), interest on the
outstanding principal balance of the Predevelopment Loan will begin to accrue at the Default
Rate, and continue until such time as the Predevelopment Loan is repaid in full or the Event of
Default is cured.
Section 2.3 Use of Predevelopment Loan Funds.
The Borrower shall use the Predevelopment Loan to fund the Predevelopment Costs,
consistent with 24 C.F.R. Section 301(b), and as set forth in the Predevelopment Budget. The
Borrower shall not use the Predevelopment Loan for any other purposes without the prior written
consent of the County.
Section 2.4 Predevelopment Budget; Revisions to Budget.
Borrower shall submit any revisions to the Predevelopment Budget to the County for
approval within five (5) days of the date Borrower receives information indicating that actual
Predevelopment Costs vary or will vary from the costs shown on the Predevelopment Budget.
Written consent of the County shall be required to change the Predevelopment Budget.
Section 2.5 Security.
As security for the Predevelopment Loan, and as part of the consideration for entering
into this Agreement, the Borrower hereby:
(a) Assigns to the County its rights and obligations with respect to the Project
Documents pursuant to the terms of the Assignment of Documents, which must be executed
concurrently herewith. The Assignment of Documents will become effective upon an Event of
Default of the Borrower, or upon termination of this Agreement pursuant to Section 2.9 below.
The County will not have any obligation under any contracts or agreements assigned pursuant to
the Assignment of Documents until the County expressly agrees in writing to be bound by such
contracts or agreements. Upon the occurrence of an Event of Default or the termination of this
Agreement pursuant to Section 2.9 below, the County may use any of the foregoing assigned
Project Documents for any purpose for which the Borrower could have used them for
863\82\791500.5 5
development of the Improvements (subject to the conditions in the Assignment of Documents),
and the Borrower shall cooperate with the County to implement the Assignment of Documents
and immediately deposit with the County for the County's use all the Project Documents.
(b) Agrees that concurrently with the purchase by the Borrower of the
Property, the Assignment of Documents will terminate, and Borrower will execute and record
against the Property the Deed of Trust and Regulatory Agreement, unless this Agreement has
been superseded by the Subsequent Loan Agreement, and the Subsequent Loan Documents
executed by Borrower. Upon recordation of the Deed of Trust, the Loan will become non-
recourse to the Borrower as provided in Section 8(b) of the Note.
Section 2.6 Conditions Precedent to Disbursement of Predevelopment Loan Funds.
Subject to Section 2.7 below, the maximum amount of funds to be disbursed pursuant to
this Section 2.6 will not exceed the amount of the Predevelopment Loan. The County shall not
be obligated to make any disbursements of Predevelopment Loan funds for Predevelopment
Costs or take any other action under the Predevelopment Loan Documents unless the following
conditions precedent are satisfied prior to each such disbursement of Predevelopment Loan
funds:
(a) There exists no Event of Default nor any act, failure, omission or
condition that would constitute an Event of Default under this Agreement;
(b) The Borrower has delivered to the County all Borrower's organizational
documents and a copy of a corporate resolution authorizing Borrower's execution of the
Predevelopment Loan Documents;
(c) The Borrower has furnished the County with evidence of the insurance
coverage meeting the requirements of Section 4.10 below;
(d) The Borrower has caused to be executed and delivered to the County all
Predevelopment Loan Documents and any other instruments, and policies required under the
Predevelopment Loan Documents;
(e) The County has determined that the undisbursed proceeds of the
Predevelopment Loan, together with other funds or firm commitments for funds that the
Borrower has obtained in connection with the Improvements, are not less than the amount that is
necessary to pay for the Predevelopment Costs and to satisfy all of the covenants contained in
this Agreement; and
(f) The County has received a written draw request from the Borrower,
including certification that the condition set forth in Section 2.6(a) continues to be satisfied, and
setting forth the proposed uses of funds consistent with the Predevelopment Budget, the amount
of funds needed, and, where applicable, a copy of the bill or invoice covering a cost incurred or
to be incurred.
Notwithstanding any other provisions of this Agreement, the County shall have no
obligation to disburse any portion of the Predevelopment Loan to the Borrower following: (i)
863\82\791500.5 6
termination of this Agreement; or (ii) notification by the County to the Borrower of an Event of
Default under the terms of this Agreement.
Section 2.7 Periodic Disbursement Limits.
Disbursement of the Predevelopment Loan funds will be subject to the following periodic
limits. The County shall not be obligated to disburse more than the amounts set forth below:
(a) Total disbursements prior to June 30, 2010 will not exceed One Hundred
Twenty Thousand Dollars ($120,000); and
(b) Disbursements for each subsequent six (6) month period for the Term will
not exceed One Hundred Six Thousand Dollars ($106,000) for each such six month period, such
periods being July 1 – December 31, 2010, January 1 – June 30, 2011, July 1 – December 31,
2011, January 1 – June 30, 2012, and July 1 – December 31, 2012.
Section 2.8 Repayment of the Predevelopment Loan.
(a) Payment in Full. Subject to Sections 2.8(b) (regarding a Subsequent
Loan) and 2.10 (regarding forgiveness of the Predevelopment Loan), all principal and interest, if
any, on the Predevelopment Loan is, at the option of the County, due and payable upon the
earlier to occur of: (i) the expiration of the Term, and (ii), the date of an Event of Default.
(b) If Subsequent Loan is Approved and Funded. If a Subsequent Loan is
approved by the County and a Subsequent Loan Agreement is executed by the parties and if all,
or any portion, of the Subsequent Loan is then funded, then (i) this Agreement will terminate, (ii)
the Predevelopment Note will be cancelled and replaced with the promissory note associated
with the Subsequent Loan, (iii) the Predevelopment Loan will be combined with the Subsequent
Loan for purposes of repayment, (iv) the deed of trust and regulatory agreement associated with
the Subsequent Loan will supersede in their entirety the Deed of Trust and Regulatory
Agreement respectively, if such have been recorded against the Property, and (iv) thereafter the
Predevelopment Loan will bear interest and be repaid in accordance with the terms of the
Subsequent Loan Agreement.
Section 2.9 Termination of Agreement for Infeasibility.
Upon the occurrence of an Infeasibility Condition, this Agreement may be terminated at
any time during the Term in the County's discretion in accordance with 24 C.F.R. 301(b)(3), and
the Predevelopment Loan forgiven, subject to the requirements of Section 2.10 below. For
purposes of this Agreement, "Infeasibility Condition" means a conditions that is an impediment
to development of the Improvements that is reasonably beyond the control of the Borrower
("Infeasibility Conditions"). Only the following conditions are Infeasibility Conditions:
(a) The seller of the Property does not take the actions necessary to transfer
the Property to the Borrower;
(b) The Borrower does not receive the Land Use Approvals required for the
development of the Property, despite the Borrower's good faith efforts to obtain such approvals;
863\82\791500.5 7
(c) The Borrower does not receive commitments of projected financial
assistance or reasonable substitutions therefor, including grants and loans, necessary to acquire
the Property and develop the Improvements despite the Borrower's good faith efforts to obtain
such funding;
(d) The City Litigation mandates development of the Property in a manner
inconsistent with the Improvements proposed in the Design Development Documents or
Construction Plans approved by the County;
(e) The outcome of the City Litigation renders development of the Property
with the Improvements so costly as to make the Development financially infeasible;
(f) Similar conditions reasonably beyond the control of the Borrower as
reasonably determined by the County.
Following termination under this Section 2.9 neither party will have any rights or
obligations under this Agreement, except that the provisions of Sections 2.10, 3.10, 4.5(b)(vi),
4.5(b)(xi), and 7.4 of this Agreement will survive such termination and remain in full force and
effect.
Section 2.10 Forgiveness of Predevelopment Loan in Certain Circumstances.
The County shall forgive the Predevelopment Loan upon termination of this Agreement
pursuant to Section 2.9 above subject to the following conditions:
(a) No Event of Default has occurred and is continuing under this
Agreement; and
(b) The Borrower takes all actions necessary to implement the Assignment of
Plans and delivers the Project Documents to the County.
Section 2.11 Prepayment of Loan.
The Borrower may prepay the Loan at any time, without penalty.
ARTICLE 3 PREDEVELOPMENT ACTIVITIES
Section 3.1 Predevelopment Activities.
(a) Sections 3.3 – 3.9 below set forth various Predevelopment Activities that
the Borrower shall seek diligently and in good faith to perform and achieve during the Term.
Satisfaction of these conditions depends on performance by the Borrower. Only the County can
waive satisfaction of the conditions in Sections 3.3 – 3.9 below.
(b) The tasks described below must be completed no later than the dates set
forth in the Predevelopment Schedule or as set forth below, as applicable, subject to Force
Majeure.
863\82\791500.5 8
Section 3.2 Progress Reports; Periodic Development Evaluation.
During the performance of the Predevelopment Activities set forth in this Article 3,
Borrower shall on the first day of each month of the Term, and from time to time as reasonably
requested by the County, provide the County with written progress reports regarding the status of
the performance of the Predevelopment Activities and the status of the City Litigation.
Section 3.3 Conceptual Site Documents.
(a) The Borrower has caused the Architect to prepare schematic documents
showing the basic physical characteristics of the Improvements and location of the
Improvements on the Property, which documents will serve as a basis for the Borrower's
application for the Land Use Approvals and for the preparation of the Design Development
Documents (the "Conceptual Site Documents"). The Conceptual Site Documents are to illustrate
the scale and relationship of the Development components, and may include preliminary
building plans, sections and elevations.
(b) The County acknowledges that the Conceptual Site Documents have been
approved by the Planning Commission of the City and are the basis of Land Use Approvals
which have been granted to the Borrower by the City. The Borrower shall submit the
Conceptual Site Documents for the County's review and approval. The County's review of the
Conceptual Site Documents will be limited to checking for conformance with the terms of this
Agreement. The County shall either approve or disapprove the Conceptual Site Documents
within fifteen (15) days after receipt. Any disapproval will state in writing the specific reasons
for the disapproval and specify in reasonable detail all of the changes the County requests be
made in order to obtain approval. The Borrower shall thereafter submit revised Conceptual Site
Documents within fifteen (15) days of notification of disapproval. The County shall either
approve or disapprove the submitted revised Conceptual Site Documents within fifteen (15) days
of the date such revised Conceptual Site Documents are received by the County, and shall
approve the revised Conceptual Site Documents if the requested changes have been made.
Section 3.4 Financing Proposal
(a) During the Term, Borrower shall apply for and secure all government and
private loans, grants and equity financing necessary for the construction of the Improvements.
The Borrower shall prepare a preliminary estimate of costs for financing the construction of the
Improvements, as based on the Conceptual Site Documents (the "Financing Proposal"). The
Financing Proposal is to include a proposal for sources of government and private lender funds
Borrower is considering pursuing to finance the construction of the Improvements
(b) No later than May 1, 2010 the Borrower shall submit to the County the
Financing Proposal for the County's review.
(c) The County shall review the Financing Proposal and shall either approve
or disapprove the Financing Proposal in writing within fifteen (15) days of receipt. If
disapproved, the County shall give specific reasons for disapproval. If the Financing Proposal is
disapproved, the Borrower may resubmit, and the County shall promptly review, a revised
Financing Proposal that addresses the reasons for disapproval.
863\82\791500.5 9
Section 3.5 Predevelopment Schedule.
(a) No later than October 1, 2010, Borrower shall prepare the Predevelopment
Schedule for the performance of the Predevelopment Activities set forth in Sections 3.6-3.9
below and shall submit such schedule for the County to review.
(b) The County shall review the Predevelopment Schedule and shall either
approve or disapprove the Predevelopment Schedule in writing within fifteen (15) days of
receipt. If disapproved, the County shall give specific reasons in writing for disapproval and the
required revisions to the previously submitted Predevelopment Schedule. If the Predevelopment
Schedule is disapproved, the Borrower shall resubmit a revised Predevelopment Schedule within
fifteen (15) days of notification of disapproval. The County shall either approve or disapprove
the submitted revised Predevelopment Schedule within fifteen (15) days of the date such revised
Predevelopment Schedule is received by the County.
(c) The Borrower shall submit any material revision to an approved
Predevelopment Schedule to the County for its review and approval. Any proposed revised
Predevelopment Schedule will be considered and approved or disapproved by the County in the
same manner and according to the same timeframe set forth above for the initial Predevelopment
Schedule. Until a revised Predevelopment Schedule is approved by the County, the previously
approved Predevelopment Schedule will govern the financing of the Development.
Section 3.6 Design Development Documents.
(a) The Borrower shall cause the Architect to prepare design documents
illustrating and describing the refinement of the design of the Improvements from the Conceptual
Design Documents, establishing the scope, relationships, forms, size and appearance of the
Improvements by means of plans, sections and elevations, and typical construction details
(together, the "Design Development Documents"). The Design Development Documents are to
include specifications that identify major materials and systems and establish in general their
quality levels.
(b) Within the time set forth in the Predevelopment Schedule the Borrower
shall submit such Design Development Documents to the County for review. The Design
Development Documents must be consistent with and in substantial conformity with the
Conceptual Site Documents.
(c) In compliance with Section 504 of the Rehabilitation Act of 1973 (29
U.S.C. Section 794, et seq.), the Design Development Documents must provide that a minimum
of five percent (5%) of the units in the Development will be designed to be fully accessible to
households with a mobility impaired member and an additional two percent (2%) of the units in
the Development will be fully accessible to hearing and/or visually impaired persons.
(d) The County shall review the Design Development Documents and either
approve or disapprove the Design Development Documents within fifteen (15) days after receipt.
Any disapproval will state in writing the specific reasons for the disapproval and specify in
reasonable detail all of the changes the County requests be made in order to obtain approval.
The Borrower shall thereafter submit revised Design Development Documents within fifteen
863\82\791500.5 10
(15) days of notification of disapproval. The County shall either approve or disapprove the
submitted revised Design Development Documents within fifteen (15) days of the date such
revised Design Development Documents are received by the County, and shall approve the
revised Design Development Documents if the requested changes have been made.
Section 3.7 Land Use Approvals.
Borrower shall apply for and exercise diligent good faith efforts to obtain all necessary Land
Use Approvals within the time set forth in the Predevelopment Schedule as are necessary to
construct the Improvements. The Borrower acknowledges that execution of this Agreement by the
County does not constitute approval by the City of any required permits, applications, or
allocations, and in no way limits the discretion of the City in the permit, allocation and approval
process.
Section 3.8 Financing Plan.
(a) The Borrower shall prepare a refinement of the Financial Proposal for
financing the construction of the Improvements (the "Financing Plan") that includes:
(i) An updated sources and uses, including a cost breakdown for the
costs of constructing the Improvements. The sources and uses are to include all assumptions for
all debt and equity financing, show the timing of uses of each source of financing and include a
breakdown of which expenses each source of financing is funding. The sources and uses may
initially be based upon the Design Development Documents. After preparation of the
Construction Plans, the sources and uses are to be updated to reflect any material cost changes
resulting from the preparation of the Construction Plans;
(ii) An estimated operating proforma for the Development for fifty-
five (55) years, which shall show debt service on all loans;
(iii) Copies of any commitment or commitments obtained by the
Borrower for any loans, grants, or other financial assistance to assist in financing the
construction of the Improvements (the "Commitments");
(iv) evidence of other sources of funds sufficient to demonstrate that
the Borrower has adequate funds available to cover the difference, if any, between costs of
development and construction of the Improvements and the amount available to the Borrower as
shown in the Commitments; and
(v) Any other information that would assist the County in determining
that the Borrower has the financial capability to pay all costs of constructing the Improvements.
(b) Within the time set forth in the Predevelopment Schedule the Borrower
shall submit the Financing Plan for County approval.
(c) The County shall review the Financing Plan and any proposed
amendments of the Financing Plan to determine if, in the County's judgment, the Borrower has
the financial capability (as evidenced by the Commitments and other sources of funds provided
863\82\791500.5 11
pursuant to subsections (iv) and (v) above) to pay all realistically established costs of
constructing the Improvements. The County shall either approve or disapprove the Financing
Plan and any proposed amendments of the Financing Plan in writing within fifteen (15) days of
receipt. If disapproved, the County shall give specific reasons for disapproval. If the Financing
Plan is disapproved, the Borrower may resubmit, and the County shall promptly review, a
revised Financing Plan that addresses the reasons for disapproval.
(d) The Borrower shall submit timely and complete applications for the
funding set forth in the Financing Plan approved by the County. If Borrower's Financing Plan
includes Low Income Housing Tax Credits, upon award of the preliminary reservation from
TCAC, Borrower shall exercise diligent good faith efforts to obtain a funding commitment from
a reputable equity investor.
Section 3.9 Construction Plans.
(a) The Borrower shall cause the Architect to prepare all construction
documentation, upon which the Borrower and its contractors shall rely in constructing the
Improvements (including landscaping, parking, and common areas) (the "Construction Plans").
The Construction Plans are to include, without limitation, final architectural drawings,
landscaping plans and specifications, final elevations, building plans and specification (also
known as “working drawings”), and a time schedule for construction of the Improvements. The
Construction Plans are also to include any mitigation measures required by any public entity as a
condition of any permits or Land Use Approvals required for the Improvements.
(b) Within the time set forth in the Predevelopment Schedule Borrower shall
submit to the County for review a copy of the Construction Plans for the Improvements.
(c) The County shall review the Construction Plans and either approve or
disapprove the Construction Plans within fifteen (15) days after receipt. Any disapproval will
state in writing the specific reasons for the disapproval and specify in reasonable detail all of the
changes the County requests be made in order to obtain approval. The Borrower shall thereafter
submit revised Construction Plans within fifteen (15) days of notification of disapproval. The
County shall either approve or disapprove the submitted revised Construction Plans within
fifteen (15) days of the date such revised Construction Plans are received by the County, and
shall approve the revised Construction Plans if the requested changes have been made. Approval
of the Construction Plans by the County will not relieve Borrower's obligation to obtain any and
all approvals required by the City building department.
Section 3.10 State Prevailing Wages.
To the extent required by applicable law, the Borrower shall pay and shall cause all
consultants, contractors and subcontractors to pay prevailing wages in the performance of the
Predevelopment Activities and construction of the Improvements as those wages are determined
pursuant to California Labor Code Sections 1720 et seq., to employ apprentices as required by
California Labor Code Sections 1777.5 et seq., and the implementing regulations of the
Department of Industrial Relations (the "DIR"). The Borrower shall and shall cause the
consultants, contractors, and subcontractors to comply with the other applicable provisions of
863\82\791500.5 12
California Labor Code Sections 1720 et seq., 1777.5 et seq., and implementing regulations of the
DIR. The Borrower shall and shall cause the consultants, contractors, and subcontractors to keep
and retain such records as are necessary to determine if such prevailing wages have been paid as
required pursuant to California Labor Code Sections 1720 et seq., and apprentices have been
employed are required by California Labor Code Sections 1777.5 et seq. Copies of the currently
applicable current per diem prevailing wages are available from DIR. During the construction of
the Improvements, Borrower shall or shall cause the general contractor to post at the Property the
applicable prevailing rates of per diem wages. The Borrower shall indemnify, hold harmless and
defend (with counsel reasonably acceptable to the County) the County against any claim for
damages, compensation, fines, penalties or other amounts arising out of the failure or alleged
failure of any person or entity (including Borrower, its consultants, contractors, and
subcontractors) to pay prevailing wages as determined pursuant to California Labor Code
Sections 1720 et seq., to employ apprentices pursuant to California Labor Code Sections 1777.5
et seq., and implementing regulations of the DIR or to comply with the other applicable
provisions of California Labor Code Sections 1720 et seq., 1777.5 et seq., and the implementing
regulations of the DIR in connection with the construction of the Project or any other work
undertaken or in connection with the Property. The requirements in this Subsection will survive
the repayment of the Predevelopment Loan, and the reconveyance of the Deed of Trust.
Section 3.11 Equal Opportunity.
During the performance of the Predevelopment Activities there will be no discrimination
on the basis of race, color, creed, religion, age, sex, sexual orientation, marital status, national
origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged
in the construction work.
Section 3.12 Borrower Supervision of Predevelopment Activities.
Borrower shall be solely responsible for all aspects of Borrower's conduct in connection
with the performance of the Predevelopment Activities, including (but not limited to) the quality
and suitability of the plans and specifications, the supervision of work, and the qualifications,
financial condition, and performance of all architects, engineers, contractors, subcontractors,
suppliers, and consultants. Any review or inspection undertaken by the County with reference to
the Predevelopment Activities and the Improvements is solely for the purpose of determining
whether Borrower is properly discharging its obligations to the County, and should not be relied
upon by Borrower or by any third parties as a warranty or representation by the County as to the
quality of the design or construction of the Improvements.
ARTICLE 4 LOAN REQUIREMENTS
Section 4.1 Match Requirement.
The Borrower shall ensure that the Predevelopment Loan is matched with a minimum of
One Hundred Sixty Two Thousand Five Hundred Dollars ($162,500) in other, non-federal
sources to be used to fund Predevelopment Activities, pursuant to and eligible under applicable
HOME regulations unless this Agreement is terminated pursuant to Section 2.9 above.
863\82\791500.5 13
Section 4.2 Information.
Borrower shall provide any information reasonably requested by the County in
connection with the Development, including (but not limited to) any information required by
HUD in connection with Borrower's use of the Predevelopment Loan funds.
Section 4.3 Records.
(a) The Borrower shall keep and maintain at Borrower's principal place of
business, or elsewhere with the County's written consent, full, complete and appropriate books,
record and accounts relating to the Development, including all such books, records and accounts
necessary or prudent to evidence and substantiate in full detail Borrower's compliance with the
terms and provisions of this Agreement. Books, records and accounts relating to Borrower's
compliance with the terms, provisions, covenants and conditions of this Agreement are to be kept
and maintained in accordance with generally accepted accounting principles consistently applied,
and are to be consistent with requirements of this Agreement. All such books, records, and
accounts are to be open to and available for inspection and copying by the HUD, the County, its
auditors or other authorized representatives at reasonable intervals during normal business hours.
Copies of all tax returns and other reports that Borrower may be required to furnish to any
governmental agency are to be at all reasonable times open for inspection by the County at the
place that the books, records and accounts of the Borrower are kept. The Borrower shall
preserve such records for a period of not less than five (5) years after the creation of such records
in compliance with all HUD records and accounting requirements. If any litigation, claim,
negotiation, audit exception, monitoring, inspection or other action relating to the use of the
Predevelopment Loan is pending at the end of the record retention period stated herein, then the
Borrower shall retain such records until such action and all related issues are resolved. Such
records are to include all invoices, receipts, and other documents related to expenditures from the
Predevelopment Loan funds. Borrower shall cause records to be kept accurate and current and in
such a form as to allow the County to comply with the recordkeeping requirements contained in
24 C.F.R. Section 92.508.
(b) The County shall notify Borrower of any records it deems insufficient.
Borrower shall have fifteen (15) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the County in such notice, or if a period longer than fifteen
(15) days is reasonably necessary to correct the deficiency, then Borrower shall begin to correct
the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.
Section 4.4 County Audits.
Each year, Borrower shall provide the County with a copy of Borrower's annual audit,
which is to include information on all of Borrower's activities and not just those pertaining to the
Development. In addition, the County or any designated agent or employee of the County at any
time is entitled to audit all of Borrower's books, records, and accounts pertaining thereto. Such
audit is to be conducted during normal business hours at the principal place of business of
Borrower and other places where records are kept. Immediately after the completion of an audit,
the County shall deliver a copy of the results of such audit to Borrower.
863\82\791500.5 14
Section 4.5 HOME Requirements.
(a) Borrower shall comply with all applicable laws and regulations governing
the use of the HOME Funds as set forth in 24 C.F.R. Part 92. In the event of any conflict
between this Agreement and applicable laws and regulations governing the use of the HOME
Funds, the applicable laws and regulations govern.
(b) The laws and regulations governing the use of the Predevelopment Loan
funds include (but are not limited to) the following:
(i) Environmental and Historic Preservation. 24 C.F.R. Part 58,
which prescribes procedures for compliance with the National Environmental Policy Act of 1969
(42 U.S.C. Sections 4321-4361), and the additional laws and authorities listed at 24 C.F.R.
Section 58.5.
(ii) Applicability of OMB Circulars. The applicable policies,
guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110, A-122, and
A-133.
(iii) Debarred, Suspended or Ineligible Contractors. The prohibition on
the use of debarred, suspended, or ineligible contractors set forth in 24 C.F.R. Part 24.
(iv) Civil Rights, Housing and Community Development, and Age
Discrimination Acts. The Fair Housing Act (42 U.S.C. Section 3601 et seq.) and implementing
regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII
of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the
Housing and Community Development Act of 1974 as amended; Section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. Section 794, et seq.); the Age Discrimination Act of 1975
(42 U.S.C. Section 6101, et seq.); Executive Order 11063 as amended by Executive Order 12259
and implementing regulations at 24 C.F.R. Part 107; Executive Order 11246 as amended by
Executive Orders 11375, 12086, 11478, 12107; Executive Order 11625 as amended by
Executive Order 12007; Executive Order 12432; Executive Order 12138 as amended by
Executive Order 12608.
(v) Lead-Based Paint. The requirement of the Lead-Based Paint
Poisoning Prevention Act, as amended (42 U.S.C. Section 4821 et seq.), the Residential Lead-
Based Paint Hazard Reduction Act (42 U.S.C. Section 4851 et seq.), and implementing
regulations at 24 C.F.R. Part 35.
(vi) Relocation. The requirements of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. Section 4601, et seq.)
and implementing regulations at 49 C.F.R. Part 24; Section 104(d) of the Housing and
Community Development Act of 1974 and implementing regulations at 24 C.F.R. Part 42; 24
C.F.R. Section 92.353; and California Government Code Section 7260 et seq. and implementing
regulations at 25 California Code of Regulations Sections 6000 et seq. If and to the extent that
development of the Improvements results in the permanent or temporary displacement of
residential tenants, homeowners, or businesses, then Borrower shall comply with all applicable
local, state, and federal statutes and regulations with respect to relocation planning, advisory
863\82\791500.5 15
assistance, and payment of monetary benefits. Borrower shall prepare and submit a relocation
plan to the County for approval. Borrower is solely responsible for payment of any relocation
benefits to any displaced persons and any other obligations associated with complying with such
relocation laws. The Borrower shall indemnify, defend (with counsel reasonably chosen by the
County), and hold harmless the County against all claims that arise out of relocation obligations
to residential tenants, homeowners, or businesses permanently or temporarily displaced by the
Improvements. The requirements in this Subsection will survive the expiration of the Term and
the reconveyance of the Deed of Trust.
(vii) Discrimination against the Disabled. The requirements of Section
504 of the Rehabilitation Act of 1973 (29 U.S.C. Section 794), and federal regulations issued
pursuant thereto, which prohibit discrimination against the disabled in any federally assisted
program, the requirements of the Architectural Barriers Act of 1968 (42 U.S.C. Sections 4151-
4157) and the applicable requirements of Title II and/or Title III of the Americans with
Disabilities Act of 1990 (42 U.S.C. Section 12131 et seq.), and federal regulations issued
pursuant thereto.
(viii) Clean Air and Water Acts. The Clean Air Act, as amended, 42
U.S.C. Section 7401 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq., and the regulations of the Environmental Protection Agency with respect
thereto, at 40 C.F.R. Part 1500, as amended from time to time.
(ix) Uniform Administrative Requirements. The requirements of 24
C.F.R. Section 92.505 regarding cost and auditing requirements.
(x) Training Opportunities. The requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u ("Section 3"),
requiring that to the greatest extent feasible opportunities for training and employment be given
to lower income residents of the project area and agreements for work in connection with the
project be awarded to business concerns that are located in, or owned in substantial part by
persons residing in, the areas of the project. Borrower agrees to include the following language
in all subcontracts executed under this Agreement:
(1) The work to be performed under this contract is subject to
the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended,
12 U.S.C. Section 1701u. The purpose of Section 3 is to ensure that employment and other
economic opportunities generated by HUD assistance or HUD-assisted projects covered by
Section 3, shall, to the greatest extent feasible, be directed to low- and very low-income persons,
particularly persons who are recipients of HUD assistance for housing.
(2) The parties to this contract agree to comply with HUD's
regulations in 24 C.F.R. Part 135, which implement Section 3. As evidenced by their execution
of this contract, the parties to this contract certify that they are under no contractual or other
impediment that would prevent them from complying with the Part 135 regulations.
(3) The contractor agrees to send to each labor organization or
representative of workers with which the contractor has a collective bargaining agreement or
863\82\791500.5 16
other understanding, if any, a notice advising the labor organization or workers’ representative of
the contractor's commitments under this Section 3 clause; and will post copies of the notice in
conspicuous places at the work site where both employees and applicants for training and
employment positions can see the notice. The notice shall describe the Section 3 preference;
shall set forth minimum number and job titles subject to hire; availability of apprenticeship and
training positions; the qualifications for each; the name and location of the person(s) taking
applications for each of the positions; and the anticipated date the work shall begin.
(4) The contractor agrees to include this Section 3 clause in
every subcontract subject to compliance with regulations in 24 C.F.R. Part 135, and agrees to
take appropriate action, as provided in an applicable provision of the subcontract or in this
Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24
C.F.R. Part 135. The contractor will not subcontract with any subcontractor where the contractor
has notice or knowledge that the subcontractor has been found in violation of the regulations in
24 C.F.R. Part 135.
(5) The contractor will certify that any vacant employment positions,
including training positions, that are filled (1) after the contractor is selected but before the
contract is executed, and (2) with persons other than those to whom the regulations of 24 C.F.R.
Part 135 require employment opportunities to be directed, were not filled to circumvent the
contractor's obligations under 24 C.F.R. Part 135.
(6) Noncompliance with HUD's regulations in 24 C.F.R. Part
135 may result in sanctions, termination of this contract for default, and debarment or suspension
from future HUD assisted contracts.
(7) With respect to work performed in connection with Section
3 covered Indian housing assistance, section 7(b) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. Section 450e) also applies to the work to be performed under this
contract. Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities
for training and employment shall be given to Indians, and (ii) preference in the award of
contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic
Enterprises. Parties to this contract that are subject to the provisions of Section 3 and section 7(b)
agree to comply with Section 3 to the maximum extent feasible, but not in derogation of
compliance with section 7(b).
(xi) Labor Standards. The applicable labor requirements set forth in 24
C.F.R. Section 92.354; the prevailing wage requirements of the Davis-Bacon Act and
implementing rules and regulations (40 U.S.C. Sections 3141-3148); the Copeland "Anti-
Kickback" Act (40 U.S.C. Section 276(c)) which requires that workers be paid at least once a
week without any deductions or rebates except permissible deductions; the Contract Work Hours
and Safety Standards Act – CWHSSA (40 U.S.C. Sections 3701-3708) which requires that
workers receive "overtime" compensation at a rate of 1-1/2 times their regular hourly wage after
they have worked forty (40) hours in one (1) week; and Title 29, Code of Federal Regulations,
Subtitle A, Parts 1, 3 and 5 are the regulations and procedures issued by the Secretary of Labor
for the administration and enforcement of the Davis-Bacon Act, as amended. The Borrower
863\82\791500.5 17
shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the County)
the County against any claim for damages, compensation, fines, penalties or other amounts
arising out of the failure or alleged failure of any person or entity (including the Borrower, its
contractor and subcontractors) to pay prevailing wages as determined pursuant to the prevailing
wage provisions of the federal Davis-Bacon Act and implementing rules and regulations in
connection with the construction of the Improvements or any other work undertaken or in
connection with the Property. The requirements in this Subsection will survive the expiration of
the Term and the reconveyance of the Deed of Trust.
(xii) Drug Free Workplace. The requirements of the Drug Free
Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 C.F.R. Part 24.
(xiii) Anti-Lobbying; Disclosure Requirements. The disclosure
requirements and prohibitions of 31 U.S.C. Section 1352 and implementing regulations at 24
C.F.R. Part 87.
(xiv) Historic Preservation. The historic preservation requirements set
forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. Section 470) and
the procedures set forth in 36 C.F.R. Part 800.
(xv) Faith Based Activities. The requirements of 24 C.F.R. Section
92.257 regarding eligible use of funds by organizations that are religious or faith-based.
(xvi) HUD Regulations. Any other HUD regulations present or as may
be amended, added, or waived in the future pertaining to the Predevelopment Loan funds,
including but not limited to HUD regulations as may be promulgated regarding subrecipients.
Section 4.6 Notice of Litigation.
Borrower shall promptly notify the County in writing of any litigation which has the
potential to materially affect Borrower or the Property and of any claims or disputes that involve
a material risk of such litigation. The County acknowledges that the City Litigation is ongoing at
the time of execution of this Agreement.
Section 4.7 Affordability Restrictions. If the Borrower proceeds to purchase the
Property, the County and the Borrower shall cause to be recorded against the Property
concurrently with the close of escrow, the Regulatory Agreement providing, among other
matters, for the rental of approximately: (i) three (3) units to households with incomes that do not
exceed twenty percent (20%) of Median Income; (ii) seven (7) units to households with incomes
that do not exceed thirty-five percent (35%) of Median Income; (iii) five (5) units to households
with incomes that do not exceed forty percent (40%) of Median Income; and (iv) nine (9) units to
households with incomes that do not exceed fifty percent (50%) of Median Income, for a time
period of no less than fifty-five (55) years.
Section 4.8 Nondiscrimination.
The Borrower covenants by and for itself and its successors and assigns that there will be
no discrimination against or segregation of a person or of a group of persons on account of race,
863\82\791500.5 18
color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national
origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property,
nor must the Borrower or any person claiming under or through the Borrower establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the
Property. The foregoing covenant will run with the land.
Section 4.9 Transfer.
(a) For purposes of this Agreement, "Transfer" means any sale, assignment,
or transfer, whether voluntary or involuntary, of (i) any rights and/or duties of Borrower under
this Agreement, and/or (ii) any interest in Borrower.
(b) No Transfer is permitted without the prior written consent of the County,
which the County may withhold in its discretion. The Predevelopment Loan will automatically
accelerate and be due in full upon any unauthorized Transfer. Notwithstanding the above, the
Borrower shall have the right to assign all of its right, title, and interest in and to the
Predevelopment Loan and the Predevelopment Loan Documents to Berrellesa Palms, L.P., a
California limited partnership, utilizing a form of assignment and assumption agreement to be
provided by the County.
Section 4.10 Insurance Requirements.
(a) The Borrower shall maintain the following insurance coverage
continuously throughout the Term of the Predevelopment Loan:
(i) Worker's Compensation insurance to the extent required by law,
including Employer's Liability coverage, with limits not less than One Million Dollars
($1,000,000) each accident.
(ii) Comprehensive General Liability insurance with limits not less
than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform
Property Damage, Products and Completed Operations.
(iii) Comprehensive Automobile Liability insurance with limits not less
than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for owned, non-owned and hired vehicles, as
applicable.
(iv) Upon acquisition of the Property, property insurance covering the
Property, in form appropriate for the nature of such property, covering all risks of loss, excluding
earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any,
acceptable to the County, naming the County as a Loss Payee, as its interests may appear. Flood
insurance must be obtained if required by applicable federal regulations.
863\82\791500.5 19
(b) The required insurance must be provided under an occurrence form.
Should any of the required insurance be provided under a form of coverage that includes an
annual aggregate limit or provides that claims investigation or legal defense costs be included in
such annual aggregate limit, such annual aggregate limit must be three times the occurrence
limits specified above.
(c) Comprehensive General Liability, and Comprehensive Automobile
Liability insurance policies must be endorsed to name as an additional insured the County and its
officers, agents, employees and members of the County Board of Supervisors.
(d) All policies and bonds are to contain (i) the agreement of the insurer to
give the County at least thirty (30) days' notice prior to cancellation (including, without
limitation, for non-payment of premium) or any material change in said policies; (ii) an
agreement that such policies are primary and non-contributing with any insurance that may be
carried by the County; (iii) a provision that no act or omission of the Borrower shall affect or
limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a
waiver by the insurer of all rights of subrogation against the County and its authorized parties in
connection with any loss or damage thereby insured against.
(e) Any design professionals working on the Development in direct contract
with the Borrower (including the Architect) shall maintain errors and omission coverage in a
minimum amount of One Million Dollars ($1,000,000).
Section 4.11 Anti-Lobbying Certification.
The Borrower certifies, to the best of Borrower's knowledge or belief, that:
(a)No Federal appropriated funds have been paid or will be paid, by or on
behalf of it, to any person for influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into of any cooperative agreement,
and the extension, continuation, renewal, amendment, or modification of any Federal contract,
grant, loan, or cooperative agreement;
(b)If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal contract, grant, loan, or
cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to
Report Lobbying, in accordance with its instructions.
This certification is a material representation of fact upon which reliance was placed when this
Agreement was made or entered into. Submission of this certification is a prerequisite for
making or entering into this Agreement imposed by 31 U.S.C. Section 1352. Any person who
fails to file the required certification will be subject to a civil penalty of not less than Ten
863\82\791500.5 20
Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars ($100,000) for
such failure.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 5.1 Representations and Warranties.
Borrower hereby represents and warrants to the County as follows:
(a) Organization. Borrower is duly organized, validly existing, and in good
standing under the laws of the State of California and has the power and authority to own its
property and carry on its business as now being conducted.
(b) CHDO Requirement. Borrower is a qualified CHDO as defined in 24
C.F.R. 92.2, such that the Borrower qualifies for CHDO set aside HOME Funds.
(c) Authority of Borrower. Borrower has full power and authority to execute
and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to
execute and deliver the Predevelopment Loan Documents and all other documents or instruments
executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to
perform and observe the terms and provisions of all of the above.
(d) Authority of Persons Executing Documents. This Agreement and the
Predevelopment Loan Documents and all other documents or instruments executed and
delivered, or to be executed and delivered, pursuant to this Agreement have been executed and
delivered by persons who are duly authorized to execute and deliver the same for and on behalf
of Borrower, and all actions required under Borrower's organizational documents and applicable
governing law for the authorization, execution, delivery and performance of this Agreement and
the Predevelopment Loan Documents and all other documents or instruments executed and
delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken.
(e) Valid Binding Agreements. This Agreement and the Predevelopment
Loan Documents and all other documents or instruments which have been executed and
delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or
delivered, will when so executed and delivered constitute, legal, valid and binding obligations of
Borrower enforceable against it in accordance with their respective terms.
(f) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement and the Predevelopment Loan Documents or of any other documents or
instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement,
nor the performance of any provision, condition, covenant or other term hereof or thereof, will
conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or
order of any court, board, commission or agency whatsoever binding on Borrower, or any
provision of the organizational documents of Borrower, or will conflict with or constitute a
breach of or a default under any agreement to which Borrower is a party, or will result in the
creation or imposition of any lien upon any assets or property of Borrower, other than liens
established pursuant hereto.
863\82\791500.5 21
(g) Compliance with Laws; Consents and Approvals. The development of the
Property with the Improvements will comply with all applicable laws, ordinances, rules and
regulations of federal, state and local governments and agencies and with all applicable
directions, rules and regulations of the fire marshal, health officer, building inspector and other
officers of any such government or agency.
(h) Pending Proceedings. Borrower is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever. Other than
the City Litigation, there are no claims, actions, suits or proceedings pending or, to the
knowledge of Borrower, threatened against or affecting Borrower or the Property, at law or in
equity, before or by any court, board, commission or agency whatsoever which might, if
determined adversely to Borrower, materially affect Borrower's ability to repay the
Predevelopment Loan or impair the security to be given to the County pursuant hereto.
(i) Title to Land. At the time of recordation of the Deed of Trust, Borrower
will have good and marketable fee title to the Property and there will exist thereon or with
respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever
other than liens for current real property taxes and liens in favor of the County or approved in
writing by the County.
(j) Financial Statements. The financial statements of Borrower and other
financial data and information furnished by Borrower to the County fairly and accurately present
the information contained therein as of the date thereof. As of the date of this Agreement, there
has not been any adverse, material change in the financial condition of Borrower from that
shown by such financial statements and other data and information.
(k) Sufficient Funds. Borrower holds sufficient funds and/or binding
commitments for sufficient funds to complete the Predevelopment Activities.
ARTICLE 6 DEFAULT AND REMEDIES
Section 6.1 Events of Default.
Each of the following constitutes an "Event of Default" by Borrower under this
Agreement:
(a) Failure to Make Payment. Failure to repay the principal and any interest
on the Predevelopment Loan when due.
(b) Breach of Covenants. Failure by Borrower to duly perform, comply with,
or observe any of the conditions, terms, or covenants of any of the Predevelopment Loan
Documents, and such failure continues uncured for thirty (30) days after receipt of written notice
thereof from the County to the Borrower; provided, however, that if a different period or notice
requirement is specified under any other section of this Article 6, the specific provisions will
control.
863\82\791500.5 22
(c) Assignments. Failure by the Borrower to take all actions necessary to
implement the Assignment of Documents and deliver the Project Documents to the County upon
the request of the County.
(d) Unauthorized Transfer. Any Transfer other than as permitted by
Section 4.9.
(e) Representation or Warranty Incorrect. Any Borrower representation or
warranty contained in this Agreement, or in any application, financial statement, certificate, or
report submitted to the County in connection with any of the Predevelopment Loan Documents,
proves to have been incorrect in any material respect when made.
(f) Insolvency. A court having jurisdiction makes or enters any decree or
order (i) adjudging Borrower or Borrower's general partner, if Borrower is a partnership, or
Borrower's managing member, if Borrower is a limited liability company, to be bankrupt or
insolvent, (ii) approving as properly filed a petition seeking reorganization of Borrower or
Borrower's general partner, if Borrower is a partnership, or Borrower's managing member, if
Borrower is a limited liability company, or seeking any arrangement for Borrower or Borrower's
general partner, if Borrower is a partnership, or Borrower's managing member, if Borrower is a
limited liability company, under the bankruptcy law or any other applicable debtor's relief law or
statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee,
liquidator, or assignee of Borrower or Borrower's general partner, if Borrower is a partnership, or
Borrower's managing member, if Borrower is a limited liability company, in bankruptcy or
insolvency or for any of their properties, (iv) directing the winding up or liquidation of Borrower
or Borrower's general partner, if Borrower is a partnership, or Borrower's managing member, if
Borrower is a limited liability company, if any such decree or order described in clauses (i) to
(iv), inclusive, is unstayed or undischarged for a period of ninety (90) calendar days; or (v)
Borrower or Borrower's general partner, if Borrower is a partnership, or Borrower's managing
member, if Borrower is a limited liability company, admits in writing its inability to pay its debts
as they fall due or will have voluntarily submitted to or filed a petition seeking any decree or
order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the Events
of Default in this paragraph will act to accelerate automatically, without the need for any action
by the County, the indebtedness evidenced by the Predevelopment Note.
(g) Assignment; Attachment. Borrower or Borrower's general partner, if
Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability
company, assigns its assets for the benefit of its creditors or suffers a sequestration or
attachment of or execution on any substantial part of its property, unless the property so
assigned, sequestered, attached or executed upon is returned or released within ninety (90)
calendar days after such event or, if sooner, prior to sale pursuant to such sequestration,
attachment, or execution. The occurrence of any of the events of default in this paragraph will
act to accelerate automatically, without the need for any action by the County, the indebtedness
evidenced by the Predevelopment Note.
(h) Suspension; Termination. Borrower or Borrower's general partner, if
Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability
863\82\791500.5 23
company, voluntarily suspends its business or, if Borrower is a partnership, the partnership is
dissolved or terminated, other than a technical termination of the partnership for tax purposes.
Section 6.2 Remedies.
The occurrence of any Event of Default hereunder following the expiration of all
applicable notice and cure periods will, either at the option of the County or automatically where
so specified, relieve the County of any obligation to make or continue the Predevelopment Loan
and will give the County the right to proceed with any and all remedies set forth in this
Agreement and the Predevelopment Loan Documents, including but not limited to the following:
(a) Acceleration of Predevelopment Note. The County may cause all
indebtedness of the Borrower to the County under this Agreement and the Predevelopment Note,
together with any accrued interest thereon, to become immediately due and payable. The
Borrower waives all right to presentment, demand, protest or notice of protest or dishonor. The
County may proceed to enforce payment of the indebtedness and to exercise any or all rights
afforded to the County as a creditor and secured party under the law including the Uniform
Commercial Code, including foreclosure under the Deed of Trust. The Borrower is liable to pay
the County on demand all reasonable expenses, costs and fees (including, without limitation,
reasonable attorney's fees and expenses) paid or incurred by the County in connection with the
collection of the Predevelopment Loan and the preservation, maintenance, protection, sale, or
other disposition of the security given for the Predevelopment Loan.
(b) Assignments. The County may exercise all rights under the Assignment
of Documents. The Borrower shall promptly deliver to the County copies of all Project
Documents, all permits and approvals obtained in connection with the Development, and all
applications for permits and approvals not yet obtained but needed in connection with the
Development.
(c) Specific Performance. The County has the right to mandamus or other
suit, action or proceeding at law or in equity to require Borrower to perform its obligations and
covenants under the Predevelopment Loan Documents or to enjoin acts on things which may be
unlawful or in violation of the provisions of the Predevelopment Loan Documents.
(d) Right to Cure at Borrower's Expense. The County has the right (but not
the obligation) to cure any monetary default by Borrower under a loan other than the
Predevelopment Loan. The Borrower shall reimburse the County for any funds advanced by the
County to cure a monetary default by Borrower upon demand therefor, together with interest
thereon at the lesser of the maximum rate permitted by law and ten percent (10%) per annum
(the "Default Rate") from the date of expenditure until the date of reimbursement.
Section 6.3 Right of Contest.
Borrower may contest in good faith any claim, demand, levy, or assessment the assertion
of which would constitute an Event of Default hereunder. Any such contest is to be prosecuted
diligently and in a manner unprejudicial to the County or the rights of the County hereunder.
863\82\791500.5 24
Section 6.4 Remedies Cumulative.
No right, power, or remedy given to the County by the terms of this Agreement or the
Predevelopment Loan Documents is intended to be exclusive of any other right, power, or
remedy; and each and every such right, power, or remedy will be cumulative and in addition to
every other right, power, or remedy given to the County by the terms of any such instrument, or
by any statute or otherwise against Borrower and any other person. Neither the failure nor any
delay on the part of the County to exercise any such rights and remedies will operate as a waiver
thereof, nor does any single or partial exercise by the County of any such right or remedy
preclude any other or further exercise of such right or remedy, or any other right or remedy.
ARTICLE 7 GENERAL PROVISIONS
Section 7.1 Relationship of Parties.
Nothing contained in this Agreement is to be interpreted or understood by any of the
Parties, or by any third persons, as creating the relationship of employer and employee, principal
and agent, limited or general partnership, or joint venture between the County and Borrower or
its agents, employees or contractors, and Borrower will at all times be deemed an independent
contractor and to be wholly responsible for the manner in which it or its agents, or both, perform
the services required of it by the terms of this Agreement. Borrower has and retains the right to
exercise full control of employment, direction, compensation, and discharge of all persons
assisting in the performance of services under the Agreement. In regards to the performance of
the Predevelopment Activities, construction of the Improvements, and operation of the
Development, Borrower is solely responsible for all matters relating to payment of its
employees, including compliance with Social Security, withholding, and all other laws and
regulations governing such matters, and must include requirements in each contract that
contractors are solely responsible for similar matters relating to their employees. Borrower is
solely responsible for its own acts and those of its agents and employees.
Section 7.2 No Claims.
Nothing contained in this Agreement creates or justifies any claim against the County by
any person that Borrower may have employed or with whom Borrower may have contracted
relative to the purchase of materials, supplies or equipment, or the furnishing or the performance
of any work or services with respect to the performance of the Predevelopment Activities,
purchase of the Property, the construction of the Improvements, or operation of the
Development, and Borrower shall include similar requirements in any contracts entered into for
the performance of the Predevelopment Activities, construction of the Improvements, or
operation of the Development.
Section 7.3 Amendments.
No alteration or variation of the terms of this Agreement is valid unless made in writing
by the Parties. The County Deputy Director – Redevelopment is authorized to execute on behalf
of the County amendments to the Predevelopment Loan Documents or amended and restated
863\82\791500.5 25
Predevelopment Loan Documents as long as any material change in the amount or terms of this
Agreement is approved by the County Board of Supervisors, or in the event the amounts or terms
of financing provided by other parties for the Development is revised, requiring conforming
amendments to the Predevelopment Loan documents.
Section 7.4 Indemnification.
The Borrower shall indemnify, defend and hold the County harmless against any and all
claims, suits, actions, losses and liability of every kind, nature and description made against it
and expenses (including reasonable attorneys' fees) which arise out of or in connection with this
Agreement, including but not limited to environmental review under CEQA, the performance of
the Predevelopment Activities, purchase of the Property, development and construction of the
Improvements, and marketing and operation of the Development, except to the extent such claim
arises from the grossly negligent or willful misconduct of the County, its agents, and its
employees. The provisions of this Section will survive the expiration of the Term and the
reconveyance of the Deed of Trust.
Section 7.5 Non-Liability of County Officials, Employees and Agents.
No member, official, employee or agent of the County is personally liable to Borrower in
the event of any default or breach by the County or for any amount that may become due to
Borrower or its successor or on any obligation under the terms of this Agreement.
Section 7.6 No Third Party Beneficiaries.
There are no third party beneficiaries to this Agreement.
Section 7.7 Future City and County Actions. The parties acknowledge and agree that:
(a) This Agreement does not constitute County approval of the
Subsequent Loan, acquisition of the Property, construction of the Improvements, or City
approval of the Land Use Approvals;
(b) The County and City retain full discretion to approve or disapprove
the Subsequent Loan and the Land Use Approvals as applicable.
Section 7.8 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person
described in Section 7.8(b) below who exercises or has exercised any functions or
responsibilities with respect to the activities funded pursuant to this Agreement or who is in a
position to participate in a decision-making process or gain inside information with regard to
such activities, may obtain a personal or financial interest or benefit from the activity, or have an
interest in any contract, subcontract or agreement with respect thereto, or the proceeds
thereunder, either for themselves or those with whom they have family or business ties, during,
or at any time after, such person's tenure. Borrower shall exercise due diligence to ensure that
the prohibition in this Section 7.8(a) is followed.
863\82\791500.5 26
(b) The conflict of interest provisions of Section 7.8(a) above apply to any
person who is an employee, agent, consultant, officer, or any immediate family member of such
person, or any elected or appointed official of the County, or any person related within the third
(3rd) degree of such person.
(c) In accordance with California Government Code Section 1090 and the
Political Reform Act, California Government Code section 87100 et seq., no person who is a
director, officer, partner, trustee or employee or consultant of the Borrower, or immediate family
member of any of the preceding, may make or participate in a decision, made by the County or a
County board, commission or committee, if it is reasonably foreseeable that the decision will
have a material effect on any source of income, investment or interest in real property of that
person or Borrower. Interpretation of this section is governed by the definitions and provisions
used in the Political Reform Act, California Government Code Section 87100 et seq., its
implementing regulations manual and codes, and California Government Code Section 1090.
(d) The Borrower shall comply with the conflict of interest provisions set
forth in 24 C.F.R. Section 92.356.
Section 7.9 Notices, Demands and Communications.
Formal notices, demands, and communications between the Parties must be sufficiently
given if and must not be deemed given unless dispatched by registered or certified mail, postage
prepaid, return receipt requested, or delivered by express delivery service, return receipt
requested, or delivered personally, to the principal office of the Parties as follows:
County:
County of Contra Costa
Department of Conservation and Development
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attention: Deputy Director - Redevelopment
Borrower:
Resources for Community Development
2730 Telegraph Avenue
Berkeley, CA 94705
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected Party may from time to time designate by mail as provided in this
Section. Receipt will be deemed to have occurred on the date shown on a written receipt as the
date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 7.10 Applicable Law.
863\82\791500.5 27
This Agreement is governed by the laws of the state of California.
Section 7.11 Parties Bound.
Except as otherwise limited herein, the provisions of this Agreement are binding upon
and inure to the benefit of the Parties and their heirs, executors, administrators, legal
representatives, successors, and assigns.
Section 7.12 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing
Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other
Party.
Section 7.13 Severability.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the provisions will continue in full force and effect
unless the rights and obligations of the Parties have been materially altered or abridged by such
invalidation, voiding or unenforceability.
Section 7.14 County Approval.
The County has authorized the County Deputy Director-Redevelopment to execute the
Predevelopment Loan Documents and deliver such approvals or consents as are required by this
Agreement, and to execute estoppel certificates concerning the status of the Predevelopment
Loan and the existence of Borrower defaults under the Predevelopment Loan Documents.
Section 7.15 Waivers.
Any waiver by the County of any obligation or condition in this Agreement must be in
writing. No waiver will be implied from any delay or failure by the County to take action on any
breach or default of Borrower or to pursue any remedy allowed under this Agreement or
applicable law. Any extension of time granted to Borrower to perform any obligation under this
Agreement does not operate as a waiver or release from any of its obligations under this
Agreement. Consent by the County to any act or omission by Borrower may not be construed to
be a consent to any other or subsequent act or omission or to waive the requirement for the
County's written consent to future waivers.
Section 7.16 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and are to be disregarded in interpreting any part of the Agreement's provisions.
Section 7.17 Entire Understanding of the Parties
863\82\791500.5 28
863\82\791500.5 29
This Agreement constitutes the entire understanding and agreement of the Parties with
respect to the subject matter hereof.
Section 7.18 Multiple Originals; Counterpart.
This Agreement may be executed in multiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
Remainder of Page Left Intentionally Blank
WHEREAS, this Agreement has been entered into by the undersigned as of the date first above
written.
COUNTY:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By: ________________________________
James Kennedy
Deputy Director – Redevelopment
Approved as to form:
Sharon L. Anderson
County Counsel
By:_____________________
Kathleen Andrus
Deputy County Counsel
BORROWER:
RESOURCES FOR COMMUNITY
DEVELOPMENT, a California
nonprofit public benefit corporation
By:__________________________
Name:______________________
Its: _________________________
Predevelopment Loan Agreement
Signature Page
863\82\791500.5
30
EXHIBIT A
Legal Description of the Property
The land is situated in the State of California, County of Contra Costa, and is described as
follows:
863\82\791500.5
EXHIBIT B
Predevelopment Budget
863\82\791500.5 B-1
TABLE OF CONTENTS
Page
i
863\82\791500.5
ARTICLE 1 DEFINITIONS AND EXHIBITS............................................................................1
Section 1.1 Definitions................................................................................................... 1
Section 1.2 Exhibits....................................................................................................... 4
ARTICLE 2 LOAN PROVISIONS..............................................................................................5
Section 2.1 Predevelopment Loan................................................................................. 5
Section 2.2 Interest......................................................................................................... 5
Section 2.3 Use of Predevelopment Loan Funds........................................................... 5
Section 2.4 Predevelopment Budget; Revisions to Budget. .......................................... 5
Section 2.5 Security....................................................................................................... 5
Section 2.6 Conditions Precedent to Disbursement of Predevelopment
Loan Funds.................................................................................................. 6
Section 2.7 Periodic Disbursement Limits..................................................................... 7
Section 2.8 Repayment of the Predevelopment Loan.................................................... 7
Section 2.9 Termination of Agreement for Infeasibility................................................ 7
Section 2.10 Forgiveness of Predevelopment Loan in Certain
Circumstances............................................................................................. 8
Section 2.11 Prepayment of Loan.................................................................................... 8
ARTICLE 3 PREDEVELOPMENT ACTIVITIES......................................................................8
Section 3.1 Predevelopment Activities.......................................................................... 8
Section 3.2 Progress Reports; Periodic Development Evaluation................................. 9
Section 3.3 Conceptual Site Documents........................................................................ 9
Section 3.4 Financing Proposal...................................................................................... 9
Section 3.5 Predevelopment Schedule......................................................................... 10
Section 3.6 Design Development Documents. ............................................................ 10
Section 3.7 Land Use Approvals. ................................................................................ 11
Section 3.8 Financing Plan. ......................................................................................... 11
Section 3.9 Construction Plans.................................................................................... 12
Section 3.10 State Prevailing Wages............................................................................. 12
Section 3.11 Equal Opportunity..................................................................................... 13
Section 3.12 Borrower Supervision of Predevelopment Activities............................... 13
ARTICLE 4 LOAN REQUIREMENTS.....................................................................................13
Section 4.1 Match Requirement................................................................................... 13
Section 4.2 Information. .............................................................................................. 14
Section 4.3 Records. .................................................................................................... 14
Section 4.4 County Audits........................................................................................... 14
Section 4.5 HOME Requirements................................................................................ 15
Section 4.6 Notice of Litigation................................................................................... 18
Section 4.7 Affordability Restrictions......................................................................... 18
Section 4.8 Nondiscrimination..................................................................................... 18
Section 4.9 Transfer..................................................................................................... 19
Section 4.10 Insurance Requirements............................................................................ 19
Section 4.11 Anti-Lobbying Certification..................................................................... 20
TABLE OF CONTENTS
(continued)
Page
863\82\791500.5
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER........................21
Section 5.1 Representations and Warranties................................................................ 21
ARTICLE 6 DEFAULT AND REMEDIES...............................................................................22
Section 6.1 Events of Default...................................................................................... 22
Section 6.2 Remedies................................................................................................... 24
Section 6.3 Right of Contest........................................................................................ 24
Section 6.4 Remedies Cumulative............................................................................... 25
ARTICLE 7 GENERAL PROVISIONS....................................................................................25
Section 7.1 Relationship of Parties.............................................................................. 25
Section 7.2 No Claims................................................................................................. 25
Section 7.3 Amendments............................................................................................. 25
Section 7.4 Indemnification......................................................................................... 26
Section 7.5 Non-Liability of County Officials, Employees and Agents...................... 26
Section 7.6 No Third Party Beneficiaries.................................................................... 26
Section 7.7 Future City and County Actions............................................................... 26
Section 7.8 Conflict of Interest.................................................................................... 26
Section 7.9 Notices, Demands and Communications.................................................. 27
Section 7.10 Applicable Law......................................................................................... 27
Section 7.11 Parties Bound............................................................................................ 28
Section 7.12 Attorneys' Fees.......................................................................................... 28
Section 7.13 Severability............................................................................................... 28
Section 7.14 County Approval....................................................................................... 28
Section 7.15 Waivers..................................................................................................... 28
Section 7.16 Title of Parts and Sections. ....................................................................... 28
Section 7.17 Entire Understanding of the Parties.......................................................... 28
Section 7.18 Multiple Originals; Counterpart................................................................ 29
EXHIBIT A Legal Description of the Property
EXHIBIT B Predevelopment Budget
PREDEVELOPMENT LOAN AGREEMENT
Between
COUNTY OF CONTRA COSTA
and
RESOURCES FOR COMMUNITY DEVELOPMENT
863\82\791500.5
PROMISSORY NOTE
(Berrellesa Palms)
$650,000 Martinez, California
March _____, 2010
FOR VALUE RECEIVED, the undersigned Resources for Community Development, a
California nonprofit public benefit corporation, (the "Borrower") hereby promises to pay to the
order of the County of Contra Costa, a political subdivision of the State of California ("Holder"),
the principal amount of Six Hundred Fifty Thousand Dollars ($650,000), plus interest thereon
pursuant to Section 2 below.
This Promissory Note (the "Note") is made pursuant to the terms of the Predevelopment
Loan Agreement dated of even date herewith, and entered into by the Borrower and the Holder
(the "Predevelopment Loan Agreement"). All capitalized terms used but not defined in this Note
have the meanings set forth in the Predevelopment Loan Agreement.
1. Borrower's Obligation. This Note evidences the Borrower's obligation to repay
the Holder the principal amount of up to Six Hundred Fifty Thousand Dollars ($650,000), for the
funds loaned to the Borrower by Holder to finance certain Predevelopment Activities pursuant to
the Predevelopment Loan Agreement.
2. Interest. Interest will accrue on the outstanding principal balance of the
Predevelopment Loan at a per annum rate of interest equal to three percent (3%) commencing on
the date of disbursement; provided, however, upon the occurrence of an Event of Default
(defined below), interest on the outstanding principal balance of the Predevelopment Loan will
begin to accrue at the Default Rate, and continue until such time as the Predevelopment Loan is
repaid in full or the Event of Default is cured.
3. Term and Repayment Requirements. Payments due under this Note are due in
accordance with this Note and Section 2.8 of the Predevelopment Loan Agreement. In any
event, the unpaid principal balance, together with any accrued interest, is due and payable not
later than December 31, 2012.
4. No Assumption. This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of the Holder, except as provided in the
Predevelopment Loan Agreement.
5. Security. As the security for this Note, Borrower has assigned to the Holder its
rights and obligations with respect to the Project Documents as provided in the Assignment of
Documents. Upon acquisition of the Property by Borrower, the Assignment of Documents will
863\82\796538.4
1
terminate and Borrower will execute and record the Deed of Trust against the Property as
security for the Predevelopment Loan.
6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the
United States of America.
(b) All payments on this Note must be paid to Holder at Department of
Conservation and Development, 2530 Arnold Drive, Suite 190, Martinez, California 94553,
Attention: Deputy Director - Redevelopment or to such other place as the Holder of this Note
may from time to time designate.
(c) All payments received will be applied first to accrued interest then to the
outstanding principal amount.
(d) All payments on this Note are without expense to the Holder, and the
Borrower shall pay all costs and expenses, including re-conveyance fees and reasonable
attorney's fees of the Holder, incurred in connection with the payment of this Note and the
release of any security hereof.
(e) Notwithstanding any other provision of this Note, or any instrument
securing the obligations of the Borrower under this Note, if, for any reason whatsoever, the
payment of any sums by the Borrower pursuant to the terms of this Note would result in the
payment of interest that exceeds the amount that the Holder may legally charge under the laws of
the State of California, then the amount by which payments exceed the lawful interest rate will
automatically be deducted from the principal balance owing on this Note, so that in no event is
Borrower obligated under the terms of this Note to pay any interest which would exceed the
lawful rate.
(f) The obligations of the Borrower under this Note are absolute and the
Borrower waives any and all rights to offset, deduct or withhold any payments or charges due
under this Note for any reason whatsoever.
7. Default; Acceleration.
(a) The entire unpaid principal balance, together with all interest thereon, and
together with all other sums payable under this Note, will at the option of the Holder become
immediately due and payable without further demand, upon occurrence of any of the following
(each, an "Event of Default"):
(i) Any failure of Borrower to pay, in full, any payment required
under this Note when due;
863\82\796538.4
2
(ii) Any failure in the performance by the Borrower of any term,
condition, provision or covenant set forth in this Note subject to the notice and cure period set
forth in Section 6.1(b) of the Predevelopment Loan Agreement;
(iii) The occurrence of any event of default under any of the Loan
Documents or other instrument securing the obligations of the Borrower under this Note or under
any other promissory notes hereafter issued by the Borrower to the Holder pursuant to the
Predevelopment Loan Agreement or the Deed of Trust, subject to notice and cure periods, if any,
set forth therein.
(b) The Holder's failure to exercise the remedy set forth in Subsection 7(a)
above or any other remedy provided by law upon the occurrence of one or more of the foregoing
Events of Default described in subsections (i)-(iii) above, does not constitute a waiver of the
right to exercise any remedy at any subsequent time in respect to the same or any other event of
default. The acceptance by Holder of any payment that is less than the total of all amounts due
and payable at the time of such payment does not constitute a waiver of the right to exercise any
of the foregoing remedies or options at that time or at any subsequent time, or nullify any prior
exercise of any such remedy or option, without the express consent of the Holder, except as and
to the extent otherwise provided by law.
8. Non-Recourse Provisions.
(a) Prior to recordation against the Property of the Deed of Trust, this Note is
fully recourse against the Borrower and any judgment or execution thereof entered in any action,
legal or equitable, on this Note may be enforced personally against the Borrower.
(b) Following recordation against the Property of the Deed of Trust, and
except as provided below, the Borrower will not have any direct or indirect personal liability for
payment of the principal of, or interest on, the Predevelopment Loan, and the sole recourse of the
Holder with respect to the principal of, or interest on, the Predevelopment Loan will be to the
property described in the Deed of Trust; provided, however, that nothing contained in the
foregoing limitation of liability (a) limits or impairs all of the rights and remedies of the County
against all such security for the Note, or (b) impairs the right of the County to assert the unpaid
principal amount of the Note as demand for money within the meaning and intent of Section
431.70 of the California Code of Civil Procedure or any successor provision thereto. The
foregoing limitation of liability is intended to apply only to the obligation to repay the principal
of, and payment of interest on the Predevelopment Loan. Except as hereafter set forth; nothing
contained herein is intended to relieve the Borrower of its obligation to indemnify the County
under Sections 2.9, 3.10, 4.5(b)(vi), 4.5(b)(xi), and 7.4 of the Predevelopment Loan Agreement,
or liability for (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or
other charges which may create liens on the Property that are payable or applicable prior to any
foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other
charges); (iii) the fair market value of any personal property or fixtures removed or disposed of
by Borrower other than in accordance with the Deed of Trust; and (iv) the misappropriation of
any proceeds under any insurance policies or awards resulting from condemnation or the
exercise of the power of eminent domain or by reason of damage, loss or destruction to any
portion of the Property.
863\82\796538.4
3
863\82\796538.4
4
9. Waivers.
(a) The Borrower hereby waives diligence, presentment, protest and demand,
and notice of protest, notice of demand, notice of non-payment, and notice of dishonor of this
Note. The Borrower expressly agrees that this Note or any payment hereunder may be extended
from time to time, and that the Holder may accept further security or release any security for this
Note, all without in any way affecting the liability of the Borrower.
(b) No extension of time for payment of this Note or any installment hereof
made by agreement by the Holder with any person now or hereafter liable for payment of this
note will operate to release, discharge, modify, change or affect the original liability of the
Borrower under this Note, either in whole or in part.
10. Miscellaneous Provisions.
(a) All notices to the Holder or the Borrower are to be given in the manner
and at the addresses set forth in the Predevelopment Loan Agreement, or to such addresses as the
Holder and the Borrower may hereinafter designate.
(b) The Borrower promises to pay all costs and expenses, including
reasonable attorney's fees, incurred by the Holder in the enforcement of the provisions of this
Note, regardless of whether suit is filed to seek enforcement.
(c) This Note is governed by the laws of the State of California.
(d) The times for the performance of any obligations hereunder are to be
strictly construed, time being of the essence.
(e) The Loan Documents, of which this Note is a part, contain the entire
agreement between the parties as to the Predevelopment Loan. This Note may not be modified
except upon the written consent of the parties.
SIGNATURES ON THE FOLLOWING PAGE
BORROWER:
RESOURCES FOR COMMUNITY
DEVELOPMENT, a California
nonprofit public benefit corporation
By:__________________________
Name:______________________
Its: _________________________
Promissory Note
Signature Page
863\82\796538.4
5
863\82\796582.4 1
PREDEVELOPMENT LOAN AGREEMENT
ASSIGNMENT OF DOCUMENTS
(Berrellesa Palms)
This agreement is dated March ___, 2010 and is between Resources for Community
Development, a California nonprofit public benefit corporation ("Assignor"), and the County of
Contra Costa, a political subdivision of the State of California (the "Assignee").
RECITALS
A. The Borrower has entered into a Purchase and Sale Agreement dated February 8,
2008, as amended, with Earl D. Dunivan and Joanne Dunivan, trustees of the Dunivan Family
Trust under Declaration of Trust, dated February 20, 2007 (the "Purchase Agreement"), for the
purchase of real property located at 310 Berrellesa Street in the City of Martinez, County of
Contra Costa, State of California (the “Property”).
B. The Borrower intends to purchase the Property in accordance with the terms of
the Purchase Agreement. Following acquisition of the Property, the Borrower intends to develop
the Property with forty-nine (49) units of rental housing affordable to low-income households
and attendant site improvements (together, the "Improvements")
C. The Borrow and the County are parties to a loan agreement of even date herewith
under which the County is lending Borrower up to Six Hundred Fifty Thousand Dollars
($650,000) in HOME Funds to finance Predevelopment Activities in connection with the
Improvements (the “Predevelopment Loan”) (the “Predevelopment Loan Agreement”).
D. As security for the Predevelopment Loan, Assignor desires to assign to Assignee,
and Assignee desires to accept from Assignor, the assignment of Assignor’s right, title, and
interest in the Project Documents, as defined below.
E. All capitalized terms used but not defined in this agreement have the meanings
set forth in the Predevelopment Loan Agreement.
F. Architect’s consent to the Assignment, as defined below, is attached hereto as
Exhibit A and incorporated herein by reference.
The parties therefore agree as follows:
AGREEMENT
1. Assignment by Assignor. Assignor hereby assigns and delegates to Assignee, and
Assignee hereby accepts from Assignor, all of Assignor's right, title, and interest in and
obligations under the Project Documents (the “Assignment”). For purposes of this agreement,
“Project Documents” means (i) the Project Contracts, (ii) the Reports, Plans and Specifications,
(iii) the Land Use Approvals, and (iv) the General Documents. For purposes of this agreement,
“Project Contracts” means all architectural design, construction, engineering and consulting
863\82\796582.4 2
contracts and development agreements that are entered into by Assignor and any Consultant, as
defined below, in connection with the Improvements and any and all amendments,
modifications, supplements, addenda and general conditions thereto. For purposes of this
agreement, “Reports, Plans, and Specifications” means all plans and specifications, shop
drawings, working drawings, reports, studies, amendments, modifications, changes, supplements,
general conditions, addenda and work product thereto that are prepared by Assignor or any
Consultant in connection with the Improvements. For purposes of this agreement, “Land Use
Approvals” means all land use approvals, conditional use permits, building permits and other
governmental entitlements and approvals of any nature obtained for the Improvements. For
purposes of this agreement, “General Documents” means all financing or other applications and
all other tangible documents, except those of a proprietary or confidential nature, that relate to
the Improvements. For purposes of this Agreement, "Consultant" means any architect,
contractor, engineer, consultant or other person or entity that does any of the following: (i)
enters into Project Contracts with Assignor (other than attorneys' agreements for the provision of
legal services), or (ii) prepares Reports, Plans and Specifications for Assignor. It is intended that
all Project Documents, whenever produced, be assigned through this Assignment to Assignee as
security for the Predevelopment Loan.
The Architect's consent to the Assignment is attached as Exhibit A. The Assignor shall obtain
similar consents from each Consultant with whom Assignor has entered into a Project Contract.
The Assignment made hereunder is subject to any conditions or limitations in the Project
Documents existing as of the date of this agreement.
2. Purpose. The Assignment secures: (i) payment to Assignee of all sums now or
hereafter owing under the Note, and (ii) payment and performance by Assignor of all its
obligations under the Predevelopment Loan Agreement.
3. No Assumption of Obligations. Neither this agreement nor any action by
Assignee constitutes an assumption by Assignee of any of Assignor’s obligations or duties under
any Project Documents, including, but not limited to, the obligation to pay for the preparation of
any Project Documents. The Assignor continues to be liable for all obligations under the Project
Documents. Assignee's acceptance of the Assignment does not constitute approval of the Project
Documents by Assignee.
4. Attorney-In-Fact. Assignor hereby irrevocably appoints Assignee as its attorney-
in-fact, which power is coupled with an interest, so that Assignee has the right to demand,
receive, and enforce any and all of Assignor's rights with respect to the Project Documents, and
to perform any and all acts in the name of Assignor or in the name of Assignee with the same
force and effect as if performed by Assignor in the absence of this Assignment, upon the
occurrence of any of the following events (each a “Triggering Event”): (i) an Event of Default
by Assignor under the Predevelopment Loan Agreement, (ii) any termination of the
Predevelopment Loan Agreement. Until a Triggering Event occurs, Assignor is entitled to
exercise all rights pertaining to the Project Documents.
5. No Previous Assignment. Assignor represents and warrants to Assignee that no
previous assignment(s) of its rights or interest in or to the Project Documents has or have been
863\82\796582.4 3
made, and Assignor agrees not to assign, sell, pledge, transfer, mortgage, or hypothecate its
rights or interest in the Project Documents as long as Assignee holds or retains any security
interest in the Project Documents under the Predevelopment Loan Agreement.
6. Governing Law. This agreement is governed by the laws of the State of
California.
7. Binding Upon Successors and Assigns. This agreement is binding upon and
inures to the benefit of the heirs, legal representatives, successors-in-interest, and assigns of
Assignor and Assignee; provided, however, this is not to be construed and is not intended to
waive the restrictions on assignment, sale, transfer, mortgage, pledge, hypothecation, or
encumbrance by Assignor contained in the Predevelopment Loan Agreement.
8. Headings. Section headings contained in this agreement are for ease of reference
only and are to be disregarded for all other purposes, including the construction or enforcement
of this agreement or any of its provisions.
9. Termination. This agreement, and the lien on the Project Documents hereby
created, terminate on the earlier to occur of: (i) Assignor's repayment in full of the
Predevelopment Loan; (ii) Assignee's forgiveness of the Predevelopment Loan; (iii) recordation
of the Deed of Trust as an encumbrance on the Property; and, (iv) recordation of a deed of trust
as an encumbrance on the Property as security for a Subsequent Loan.
10. Counterparts. This agreement may be executed in counterparts by the parties
hereto, each of which will be deemed to be an original, and all such counterparts will constitute
one and the same instrument.
[Remainder of this page intentionally left blank.]
Assignment of Project Documents
Signature Page
863\82\796582.4
4
The parties are signing this agreement as of the date set forth in the introductory
paragraph.
Approved as to form:
Sharon L. Anderson
County Counsel
By:_____________________
Kathleen Andrus
Deputy County Counsel
ASSIGNOR:
RESOURCES FOR COMMUNITY
DEVELOPMENT, a California nonprofit
public benefit corporation
By: ______________________________
Name:____________________________
Its:_______________________________
ASSIGNEE:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By: ________________________________
James Kennedy
Deputy Director – Redevelopment
Consent to Assignment of
Project Documents
863\82\796582.4
A-1
EXHIBIT A
ARCHITECT'S CONSENT
(Berrellesa Palms)
KTGY Group, Inc., a California Corporation, (“Architect”) hereby consents to the
assignment by Resources for Community Development (“RCD”) to the County of Contra Costa
(the “County”) all documents and materials that relate to the development of forty-nine (49) units
of rental housing affordable to low-income households and attendant site improvements that
RCD intends to construct at 310 Berrellesa Street, in Martinez, California (the “Project”),
including all of the following: (i) architectural design, construction, engineering and consulting
contracts and development agreements that are entered into by RCD and Architect in connection
with the Project and any and all amendments, modifications, supplements, addenda and general
conditions thereto (together, the “Architect Contracts”), and (ii) all plans and specifications, shop
drawings, working drawings, reports, studies, amendments, modifications, changes, supplements,
general conditions, addenda and work product thereto that are prepared by Architect in
connection with the Project (together, the “Architect Documents”). Architect acknowledges that
there are presently no unpaid claims or amounts due to the undersigned in connection with the
Project.
The undersigned agrees that if, at any time, the County elects to undertake or cause the
completion of the Architect Documents and gives the undersigned written notice of such
election; then so long as the undersigned has received, receives, or continues to receive the
compensation called for under the Architect Contracts, the County may, at its option, use and
rely on the Architect Documents for the purposes for which they are prepared, and the
undersigned will continue to perform its obligations under the Architect Contracts for the benefit
and account of the County in the same manner as if performed for the benefit or account of RCD
in the absence of the assignment to the County.
The undersigned further agrees that, in the event of a default by RCD under the Architect
Contracts, or any agreement entered into with the undersigned in connection with the Architect
Documents, so long as RCD's interest in the Architect Contracts and Architect Documents is
assigned to the County, the undersigned will give written notice to the County of such default.
The County will have thirty (30) days from the receipt of such written notice to remedy or cure
the default; provided, however, nothing herein requires the County to cure the default.
Formal notices, demands, and communications among the County, RCD, and the
Architect must be sufficiently given if and must not be deemed given unless dispatched by
registered or certified mail, postage prepaid, return receipt requested, or delivered by express
delivery service, return receipt requested, or delivered personally, to the principal office of the
parties as follows:
County:
County of Contra Costa
Consent to Assignment of
Project Documents
863\82\796582.4
A-2
Department of Conservation and Development
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attention: Deputy Director - Redevelopment
RCD:
Resources for Community Development
2730 Telegraph Avenue
Berkeley, CA 94705
Attn: Executive Director
Architect:
KTGY Group, Inc.
283 4th Street, Third Floor
Oakland, CA 94607
Attn: Jill D. Williams
The undersigned represents that it has no knowledge of any prior assignment(s) of any
interest in either the Architect Contracts or the Architect Documents.
Executed on ____________, 2010
Title of
Architect Contract(s):
__________________________
Date of
Architect Contract(s):
__________________________
By: ______________________________
Name: ____________________________
Its: _______________________________
863\82\796582.4 1
PREDEVELOPMENT LOAN AGREEMENT
ASSIGNMENT OF DOCUMENTS
(Berrellesa Palms)
This agreement is dated March ___, 2010 and is between Resources for Community
Development, a California nonprofit public benefit corporation ("Assignor"), and the County of
Contra Costa, a political subdivision of the State of California (the "Assignee").
RECITALS
A. The Borrower has entered into a Purchase and Sale Agreement dated February 8,
2008, as amended, with Earl D. Dunivan and Joanne Dunivan, trustees of the Dunivan Family
Trust under Declaration of Trust, dated February 20, 2007 (the "Purchase Agreement"), for the
purchase of real property located at 310 Berrellesa Street in the City of Martinez, County of
Contra Costa, State of California (the “Property”).
B. The Borrower intends to purchase the Property in accordance with the terms of
the Purchase Agreement. Following acquisition of the Property, the Borrower intends to develop
the Property with forty-nine (49) units of rental housing affordable to low-income households
and attendant site improvements (together, the "Improvements")
C. The Borrow and the County are parties to a loan agreement of even date herewith
under which the County is lending Borrower up to Six Hundred Fifty Thousand Dollars
($650,000) in HOME Funds to finance Predevelopment Activities in connection with the
Improvements (the “Predevelopment Loan”) (the “Predevelopment Loan Agreement”).
D. As security for the Predevelopment Loan, Assignor desires to assign to Assignee,
and Assignee desires to accept from Assignor, the assignment of Assignor’s right, title, and
interest in the Project Documents, as defined below.
E. All capitalized terms used but not defined in this agreement have the meanings
set forth in the Predevelopment Loan Agreement.
F. Architect’s consent to the Assignment, as defined below, is attached hereto as
Exhibit A and incorporated herein by reference.
The parties therefore agree as follows:
AGREEMENT
1. Assignment by Assignor. Assignor hereby assigns and delegates to Assignee, and
Assignee hereby accepts from Assignor, all of Assignor's right, title, and interest in and
obligations under the Project Documents (the “Assignment”). For purposes of this agreement,
“Project Documents” means (i) the Project Contracts, (ii) the Reports, Plans and Specifications,
(iii) the Land Use Approvals, and (iv) the General Documents. For purposes of this agreement,
“Project Contracts” means all architectural design, construction, engineering and consulting
863\82\796582.4 2
contracts and development agreements that are entered into by Assignor and any Consultant, as
defined below, in connection with the Improvements and any and all amendments,
modifications, supplements, addenda and general conditions thereto. For purposes of this
agreement, “Reports, Plans, and Specifications” means all plans and specifications, shop
drawings, working drawings, reports, studies, amendments, modifications, changes, supplements,
general conditions, addenda and work product thereto that are prepared by Assignor or any
Consultant in connection with the Improvements. For purposes of this agreement, “Land Use
Approvals” means all land use approvals, conditional use permits, building permits and other
governmental entitlements and approvals of any nature obtained for the Improvements. For
purposes of this agreement, “General Documents” means all financing or other applications and
all other tangible documents, except those of a proprietary or confidential nature, that relate to
the Improvements. For purposes of this Agreement, "Consultant" means any architect,
contractor, engineer, consultant or other person or entity that does any of the following: (i)
enters into Project Contracts with Assignor (other than attorneys' agreements for the provision of
legal services), or (ii) prepares Reports, Plans and Specifications for Assignor. It is intended that
all Project Documents, whenever produced, be assigned through this Assignment to Assignee as
security for the Predevelopment Loan.
The Architect's consent to the Assignment is attached as Exhibit A. The Assignor shall obtain
similar consents from each Consultant with whom Assignor has entered into a Project Contract.
The Assignment made hereunder is subject to any conditions or limitations in the Project
Documents existing as of the date of this agreement.
2. Purpose. The Assignment secures: (i) payment to Assignee of all sums now or
hereafter owing under the Note, and (ii) payment and performance by Assignor of all its
obligations under the Predevelopment Loan Agreement.
3. No Assumption of Obligations. Neither this agreement nor any action by
Assignee constitutes an assumption by Assignee of any of Assignor’s obligations or duties under
any Project Documents, including, but not limited to, the obligation to pay for the preparation of
any Project Documents. The Assignor continues to be liable for all obligations under the Project
Documents. Assignee's acceptance of the Assignment does not constitute approval of the Project
Documents by Assignee.
4. Attorney-In-Fact. Assignor hereby irrevocably appoints Assignee as its attorney-
in-fact, which power is coupled with an interest, so that Assignee has the right to demand,
receive, and enforce any and all of Assignor's rights with respect to the Project Documents, and
to perform any and all acts in the name of Assignor or in the name of Assignee with the same
force and effect as if performed by Assignor in the absence of this Assignment, upon the
occurrence of any of the following events (each a “Triggering Event”): (i) an Event of Default
by Assignor under the Predevelopment Loan Agreement, (ii) any termination of the
Predevelopment Loan Agreement. Until a Triggering Event occurs, Assignor is entitled to
exercise all rights pertaining to the Project Documents.
5. No Previous Assignment. Assignor represents and warrants to Assignee that no
previous assignment(s) of its rights or interest in or to the Project Documents has or have been
863\82\796582.4 3
made, and Assignor agrees not to assign, sell, pledge, transfer, mortgage, or hypothecate its
rights or interest in the Project Documents as long as Assignee holds or retains any security
interest in the Project Documents under the Predevelopment Loan Agreement.
6. Governing Law. This agreement is governed by the laws of the State of
California.
7. Binding Upon Successors and Assigns. This agreement is binding upon and
inures to the benefit of the heirs, legal representatives, successors-in-interest, and assigns of
Assignor and Assignee; provided, however, this is not to be construed and is not intended to
waive the restrictions on assignment, sale, transfer, mortgage, pledge, hypothecation, or
encumbrance by Assignor contained in the Predevelopment Loan Agreement.
8. Headings. Section headings contained in this agreement are for ease of reference
only and are to be disregarded for all other purposes, including the construction or enforcement
of this agreement or any of its provisions.
9. Termination. This agreement, and the lien on the Project Documents hereby
created, terminate on the earlier to occur of: (i) Assignor's repayment in full of the
Predevelopment Loan; (ii) Assignee's forgiveness of the Predevelopment Loan; (iii) recordation
of the Deed of Trust as an encumbrance on the Property; and, (iv) recordation of a deed of trust
as an encumbrance on the Property as security for a Subsequent Loan.
10. Counterparts. This agreement may be executed in counterparts by the parties
hereto, each of which will be deemed to be an original, and all such counterparts will constitute
one and the same instrument.
[Remainder of this page intentionally left blank.]
Assignment of Project Documents
Signature Page
863\82\796582.4
4
The parties are signing this agreement as of the date set forth in the introductory
paragraph.
Approved as to form:
Sharon L. Anderson
County Counsel
By:_____________________
Kathleen Andrus
Deputy County Counsel
ASSIGNOR:
RESOURCES FOR COMMUNITY
DEVELOPMENT, a California nonprofit
public benefit corporation
By: ______________________________
Name:____________________________
Its:_______________________________
ASSIGNEE:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By: ________________________________
James Kennedy
Deputy Director – Redevelopment
Consent to Assignment of
Project Documents
863\82\796582.4
A-1
EXHIBIT A
ARCHITECT'S CONSENT
(Berrellesa Palms)
KTGY Group, Inc., a California Corporation, (“Architect”) hereby consents to the
assignment by Resources for Community Development (“RCD”) to the County of Contra Costa
(the “County”) all documents and materials that relate to the development of forty-nine (49) units
of rental housing affordable to low-income households and attendant site improvements that
RCD intends to construct at 310 Berrellesa Street, in Martinez, California (the “Project”),
including all of the following: (i) architectural design, construction, engineering and consulting
contracts and development agreements that are entered into by RCD and Architect in connection
with the Project and any and all amendments, modifications, supplements, addenda and general
conditions thereto (together, the “Architect Contracts”), and (ii) all plans and specifications, shop
drawings, working drawings, reports, studies, amendments, modifications, changes, supplements,
general conditions, addenda and work product thereto that are prepared by Architect in
connection with the Project (together, the “Architect Documents”). Architect acknowledges that
there are presently no unpaid claims or amounts due to the undersigned in connection with the
Project.
The undersigned agrees that if, at any time, the County elects to undertake or cause the
completion of the Architect Documents and gives the undersigned written notice of such
election; then so long as the undersigned has received, receives, or continues to receive the
compensation called for under the Architect Contracts, the County may, at its option, use and
rely on the Architect Documents for the purposes for which they are prepared, and the
undersigned will continue to perform its obligations under the Architect Contracts for the benefit
and account of the County in the same manner as if performed for the benefit or account of RCD
in the absence of the assignment to the County.
The undersigned further agrees that, in the event of a default by RCD under the Architect
Contracts, or any agreement entered into with the undersigned in connection with the Architect
Documents, so long as RCD's interest in the Architect Contracts and Architect Documents is
assigned to the County, the undersigned will give written notice to the County of such default.
The County will have thirty (30) days from the receipt of such written notice to remedy or cure
the default; provided, however, nothing herein requires the County to cure the default.
Formal notices, demands, and communications among the County, RCD, and the
Architect must be sufficiently given if and must not be deemed given unless dispatched by
registered or certified mail, postage prepaid, return receipt requested, or delivered by express
delivery service, return receipt requested, or delivered personally, to the principal office of the
parties as follows:
County:
County of Contra Costa
Consent to Assignment of
Project Documents
863\82\796582.4
A-2
Department of Conservation and Development
2530 Arnold Drive, Suite 190
Martinez, CA 94553
Attention: Deputy Director - Redevelopment
RCD:
Resources for Community Development
2730 Telegraph Avenue
Berkeley, CA 94705
Attn: Executive Director
Architect:
KTGY Group, Inc.
283 4th Street, Third Floor
Oakland, CA 94607
Attn: Jill D. Williams
The undersigned represents that it has no knowledge of any prior assignment(s) of any
interest in either the Architect Contracts or the Architect Documents.
Executed on ____________, 2010
Title of
Architect Contract(s):
__________________________
Date of
Architect Contract(s):
__________________________
By: ______________________________
Name: ____________________________
Its: _______________________________