HomeMy WebLinkAboutMINUTES - 12022014 - C.76RECOMMENDATION(S):
1. APPROVE and AUTHORIZE the Conservation and Development Interim Director, or designee, to execute the
Amended and Restated Predevelopment Loan Agreement with Community Housing Development Corporation of
North Richmond for predevelopment activities for the Heritage Point Project, to increase the payment limit by
$152,000 to a new payment limit of $283,700 and extend the term from June 30, 2014 to December 31, 2016.
2. APPROVE and AUTHORIZE the Conservation and Development Interim Director, or designee, to execute the
First Amendment to Technical Assistance Loan Agreement with Community Housing Development Corporation of
North Richmond for predevelopment activities for the Heritage Point Project to extend the term from December 31,
2014 to December 31, 2016, to replace the predevelopment budget, incorporate a predevelopment schedule, and
reflect that a default under the Predevelopment Loan Agreement is a default under the Technical Assistance Loan
Agreement.
FISCAL IMPACT:
No General Funds will be used for this loan. The loans are comprised of funds from the Successor Agency to the
Former Redevelopment Agency, ($283,700) and federal housing funds from the HOME program, ($48,000).
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 12/02/2014 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Candace Andersen, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Karen Mitchoff, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: Maureen Toms,
674-7878
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: December 2, 2014
David Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc:
C. 76
To:Board of Supervisors
From:John Kopchik, Interim Director, Conservation & Development Department
Date:December 2, 2014
Contra
Costa
County
Subject:Revised Loan Agreements with Community Housing Development Corporation of North Richmond for the Heritage
Point Project in North Richmond
BACKGROUND:
Predevelopment Loan Agreement
On April 5, 2011, the former Contra Costa County Redevelopment Agency entered into a Predevelopment Loan
Agreement with Community Housing Development Corporation of North Richmond (CHDC) for Phase II of the
North Richmond Town Center Project. Phase I was completed several years ago and includes the award winning
Heritage Senior Apartments, North Richmond Health Center, County Service Integration Team and streetscape
improvements along Fred Jackson Way between Chesley Avenue and Grove Street. Phase II is on the eastern side
of Fred Jackson Way, directly across the street from Phase I. It encompasses six parcels and is referred to as
Heritage Point. The site is flat and, in March 2009, was occupied by a mix of residential single & multi-family
housing, blighted under-performing commercial outlets, a vacant office/community building, and a vacant lot
previously occupied by an auto body repair shop. The former Redevelopment Agency acquired the parcels,
demolished existing structures, and relocated affected residents. Upon dissolution of the former Redevelopment
Agency, the property was transferred to the County, the Housing Successor to the former Redevelopment Agency.
The funding agreement for the Predevelopment Loan Agreement was transferred to the Successor Agency as an
enforceable obligation. The term of the original Predevelopment Agreement terminated on December 31, 2012.
On December 11, 2012, the Board of Supervisors extended the Agreement's term to December 31, 2013 so that it
remained an enforceable obligation of the Successor Agency. The Second Amendment extended the term of the
agreement to June 30, 2014, consistent with the Recognized Obligation Payment Schedule 13/14B.
The proposed Amended and Restated Loan Agreement increases the loan amount from the original $131,700
Redevelopment Agency Loan by $152,000, for a new total loan amount of $283,700. The additional $152,000 are
Successor Agency funds authorized for expenditure by the Oversight Board.
This predevelopment loan to CHDC will offset the cost of entitling the Housing Successor-owned property in
North Richmond. The purpose of the Predevelopment Loan Agreement is to: 1) fully define the project; 2)
determine project feasibility; 3) identify infrastructure needs; 4) perform studies to inform a project level
environmental review process; 5) initiate land use entitlement proceedings; and 6) designate CHDC as Master
Developer. If a project is feasible, this Agreement will provide market studies, project administration, conceptual
site documents, design concepts, land use applications, a financing plan, and input from the North Richmond
community on what residents would like to see incorporated into Heritage Point.
The predevelopment loan will be rolled into the permanent financing if the project moves forward. If the project is
not feasible, the loan will be forgiven and all deliverables will be assigned to the County for use with another
future developer.
Technical Assistance Loan Agreement
On April 1, 2014, the County entered into a loan agreement with CHDC for $48,000 in HOME Funds for
technical assistance associated with the project. CHDC has completed the scope of work in the Technical
Assistance Loan Agreement and fully expended the $48,000. However, the project is not fully entitled and the
loan is due December 2014. In order to provide sufficient time for CHDC to perform tasks under the
Predevelopment Loan Agreement, staff recommends that the Technical Assistance Loan Agreement be extended
to have the same term as the Predevelopment Loan Agreement.
CONSEQUENCE OF NEGATIVE ACTION:
The developer will be unable to complete the entitlement process on the County-owned property, a housing asset
of the Housing Successor, and the project will not move forward.
CHILDREN'S IMPACT STATEMENT:
No impact for the predevelopment activities. However, a completed project would support outcome number 3 of
the Children's Report Card: Families are economically self-sufficient.
ATTACHMENTS
Predevelopment Loan Agreement-2014
Predevelopment Loan Agreement-2014
Amended Note
First Amendment to Loan Agreement
Tech Asst Note
AMENDED AND RESTATED
PREDEVELOPMENT LOAN AGREEMENT
(Heritage Point)
This Amended and Restated Predevelopment Loan Agreement (the "Agreement") is
dated ____________, 2014, and is between the COUNTY OF CONTRA COSTA, a political
subdivision of the State of California (the "County"), and COMMUNITY HOUSING DEVELOPMENT
CORPORATION OF NORTH RICHMOND, 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. Borrower and the Redevelopment Agency of Contra Costa County (the
“Agency”) are parties to a predevelopment loan agreement dated April 12, 2011 (the “Original
Loan Agreement”). Pursuant to the Original Loan Agreement, Borrower borrowed One Hundred
Thirty-One Thousand Seven Hundred Dollars ($131,700) (the “Original Loan”) of low and
moderate income housing funds from the Agency. The Original Loan is evidenced by a
promissory note executed by Borrower for the benefit of the Agency in the amount of the
Original Loan (the “Original Note”). The Original Loan was used to finance certain
predevelopment costs in connection with the potential development of six parcels located in the
1500 block of Fred Jackson Way in North Richmond, as more particularly described in Exhibit A
(the “Property”). In furtherance of Borrower’s proposal to construct rental housing on the
Property that is affordable to low-income households (such housing, the “Development”), the
Agency acquired the Property.
C. As a result of the dissolution of the Agency in February 2012, and pursuant to
California Health and Safety Code Section 34176(a), the County is the Housing Successor
Agency to the Agency. As the Housing Successor Agency, the County is the owner of the
Property, the lender under the Original Loan Agreement, and the holder of the Original Note.
D. The County and Borrower are also parties to a Technical Assistance Loan
Agreement dated April 1, 2014 (the “HOME Loan Agreement”). Pursuant to the HOME Loan
Agreement, Borrower borrowed Forty-Eight Thousand Dollars ($48,000) (the “HOME Loan”) in
HOME Funds from the County to enable Borrower to assess the feasibility of the Development.
E. The County and Borrower are also parties to an Assignment Agreement dated
April 1, 2014 (the “Assignment Agreement”). Pursuant to the Assignment Agreement, Borrower
pledged to the County all of Borrower’s right, title, interest and claims in contract rights and
general intangibles, then existing or thereafter arising, in the Collateral, to secure Borrower’s
obligation to repay the HOME Loan.
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F. To finance additional predevelopment costs associated with Borrower's proposed
development of the Property, Borrower desires to borrow up to One Hundred Fifty-Two
Thousand Dollars ($152,000) of additional low and moderate income housing funds (the
"Additional Funds") from the County. Together, the Original Loan and the Additional Funds
total Two Hundred Eighty-Three Thousand Seven Hundred Dollars ($283,700) (the “Loan”).
G. Concurrent with the execution of this Agreement, (i) Borrower is executing a new
promissory note evidencing its obligation to repay the Loan in a form satisfactory to the County
(the “Note”), (ii) the County is cancelling the Original Note, and (iii) Borrower and the County
are amending the HOME Loan Agreement to cause it to be coterminous with this Agreement and
to cause a default under this Agreement to be a default under the HOME Loan Agreement.
H. If the Development is determined to be feasible and Borrower proceeds to acquire
the Property from the County, Borrower and the County will record a regulatory agreement that
will restrict the use of the Property to ensure the residential units constructed on the Property are
affordable to low-income households.
I. The County concluded that the preliminary planning activities of the
Development are exempt from the California Environmental Quality Act (Public Resources
Code Sections 21000 et seq.) ("CEQA") under the general rule of applicability CEQA Guidelines
Sections 15061(b)(3).
J. The County concluded that the preliminary planning activities of the
Development are exempt from National Environmental Policy Act of 1969, as amended (42
U.S.C. Sections 4321-4347) ("NEPA"). Should a project move forward, the County will
complete all applicable environmental review for the activities proposed to be undertaken.
The parties therefore amend and restate the Original Loan Agreement to read in its
entirety as follows:
ARTICLE 1
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions
The following capitalized terms have the meanings set forth in this Section 1.1 wherever
used in this Agreement, unless otherwise provided:
(a) “Additional Funds” has the meaning set forth in Recital F.
(b) "Agency" has the meaning set forth in the Recital B.
(c) "Agreement" means this Amended and Restated Predevelopment Loan
Agreement.
(d) "Architect" means Kodama Diseno Architects, or a successor Architect
approved by the County.
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(e) "Assignment Agreement" has the meaning set forth in Recital E.
(f) "Borrower" has the meaning set forth in the introductory paragraph.
(g) "CEQA" has the meaning set forth in Recital I.
(h) "County" has the meaning set forth in the introductory paragraph.
(i) "Collateral" has the meaning set forth in the Assignment Agreement.
(j) "Default Rate" means the lesser of the maximum rate permitted by law
and ten percent (10%) per annum.
(k) "Design Development Documents" has the meaning set forth in Section
3.5 below.
(l) "Development" has the meaning set forth in Recital B.
(m) "Event of Default" has the meaning set forth in Section 6.1 below.
(n) "Financing Plan" has the meaning set forth in Section 3.9 below.
(o) "Financing Proposal" has the meaning set forth in Section 3.3 below.
(p) "Home(s)" means the homes which are proposed to be constructed by
Borrower on the Property to be sold to Eligible Purchasers pursuant to the Regulatory
Agreement.
(q) “HOME Funds” means HOME Investment Partnerships Act (HOME)
funds the County received from the United States Department of Housing and Urban
Development pursuant to the Cranston-Gonzales National Housing Act of 1990 (42 U.S.C.
Section 12704 et seq.).
(r) “HOME Loan” has the meaning set forth in Recital D.
(s) “HOME Note” means the First Amended and Restated Promissory Note of
even date herewith that evidences Borrower’s obligation to repay the HOME Loan.
(t) “Infeasibility” has the meaning set forth in Section 2.8 of the HOME Loan
Agreement.
(u) "Infeasibility Condition" has the meaning set forth in Section 2.8 below.
(v) "Land Use Approvals" means the permits and approvals necessary for the
construction of the Development, including, but not limited to, general plan amendment,
preliminary development plan, subdivision, final development plan, and overall design and
architectural review and approval by the County and any other applicable government entity.
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(w) “Loan” has the meaning set forth in Recital F.
(x) "Loan Documents" means this Agreement, the Note, the HOME Loan
Agreement, the HOME Note, and the Assignment Agreement.
(y) “Note” has the meaning set forth in Recital G.
(z) "Predevelopment Activities" means the activities to be performed by
Borrower during the Term, as described in Article 3 below.
(aa) "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.
(bb) "Predevelopment Costs" means costs and fees associated with the
Predevelopment Activities and related activities, including but not limited to financial and legal
services, and preparation of funding applications, as shown in the Predevelopment Budget.
(cc) "Predevelopment Schedule" means the schedule of performance for the
Predevelopment Activities, attached hereto and incorporated herein as Exhibit C, which may be
amended with the approval of the County as set forth in this Agreement.
(dd) "Property" has the meaning set forth in Recital E.
(ee) “Site Plans” has the meaning set forth in Section 3.3(c).
(ff) "Subsequent Loan" has the meaning set forth in Section 2.7(b).
(gg) "Subsequent Loan Agreement" has the meaning set forth in Section 2.7(b).
(hh) “Additional Funds” has the meaning set forth in Recital F.
(ii) "Term" means the term of this Agreement, which commences on the date
of this Agreement and terminates on December 31, 2016, unless sooner terminated pursuant to
the terms of this Agreement.
(jj) "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.
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
EXHIBIT C: Predevelopment Schedule
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ARTICLE 2 LOAN PROVISIONS
Section 2.1 Loan
On and subject to the terms and conditions of this Agreement, the County shall lend to
Borrower the Additional Funds, which is the unfunded balance of the Loan. The Loan may only
be used for the purposes set forth in Section 2.3. Borrower’s obligation to repay the Loan is
evidenced by the Note.
Section 2.2 Interest
Interest will accrue on the outstanding principal balance of the 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, interest on the outstanding principal
balance of the Loan will begin to accrue at the Default Rate, beginning on the date of such
occurrence and continuing until the date the Loan is repaid in full or the Event of Default is
cured.
Section 2.3 Use of Loan Funds
Borrower shall use the Loan to pay for Predevelopment Activities in accordance with the
Predevelopment Budget. The Borrower may not use the Loan for any other purpose 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 is required to change the Predevelopment Budget.
Section 2.5 Security.
Pursuant to the Assignment Agreement, Borrower has assigned to the County all of
Borrower’s right, title, interest, and demands in and to the Collateral.
Section 2.6 Conditions Precedent to Disbursement of Predevelopment Loan Funds.
The disbursements made pursuant to this Section 2.6 may not exceed the amount of the
Additional Funds. The County is not obligated to disburse any portion of the Additional Funds,
or take any other action under this Agreement, unless the following conditions have been and
continue to be satisfied:
(a) There exists no Event of Default nor any act, failure, omission or
condition that would constitute an Event of Default under this Agreement.
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(b) Borrower has delivered to the County all Borrower's organizational
documents and a copy of a corporate resolution authorizing Borrower's execution of this
Agreement.
(c) There exists no material adverse change in the financial condition of
Borrower from that shown by the financial statements and other data and information furnished
by Borrower to the County prior to the date of this Agreement.
(d) Borrower has furnished the County with evidence of the insurance
coverage meeting the requirements of Section 4.5 below.
(e) Borrower has executed and delivered the Loan Documents to the County
and has caused all other documents, instruments, and policies required by the Loan Documents
to be delivered to the County.
(f) The County has determined that the undisbursed proceeds of the Loan,
together with other funds or firm commitments for funds that the Borrower has obtained in
connection with assessing the feasibility of the Development, are not less than the amount that is
necessary to pay the Predevelopment Costs and to satisfy all of the covenants contained in this
Agreement.
(g) The County has received a written draw request from 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 has no obligation to
disburse any portion of the Loan to Borrower following: (i) termination of this Agreement; or (ii)
the occurrence of an Event of Default.
Section 2.7 Repayment of the Predevelopment Loan.
(a) Payment in Full. Subject to Section 2.9, Borrower shall pay all
outstanding principal and interest on the Loan on the earliest to occur of: (i) the expiration of the
Term, (ii) the termination of this Agreement pursuant to Section 2.8, and (iii) an Event of
Default.
(b) If Subsequent Loan is Approved and Funded. If the County agrees to lend
Borrower additional funds for the purpose of constructing the Development (the “Subsequent
Loan”) and the parties enter into a loan agreement that sets forth the terms of the Subsequent
Loan (a “Subsequent Loan Agreement”), on the effective date of the Subsequent Loan
Agreement (i) this Agreement will terminate, (ii) the Note will be cancelled and replaced by a
promissory note that relates to the Subsequent Loan, and (iii) Borrower will be obligated to repay
the Loan in accordance with the terms of the Subsequent Loan Agreement.
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Section 2.8 Infeasibility
(a) The County may, in its sole discretion, determine that impediments to the
construction of the Development exist that are beyond the reasonable control of Borrower (such
act, a determination of “Infeasibility”). The County may make a determination of Infeasibility
upon the occurrence of any of the following conditions:
(i) The Borrower does not obtain the Land Use Approvals required to
construct the Development.
(ii) Either of the conditions set forth in 3.6(b) below.
(iii) A determination is made by the County that the Design
Development Documents are not acceptable.
(iv) The Borrower does not receive commitments of projected financial
assistance or reasonable substitutions for such commitments to enable it to construct the
Development, despite Borrower's good faith efforts to obtain financing.
(v) A determination is made by the County that the Financing Plan is
not acceptable.
(vi) Any other condition exists that is an impediment to the
construction of the Development, as determined by the County in its sole discretion.
(b) If the County makes a determination of Infeasibility, the County may
terminate this Agreement.
(c) If the County exercises its discretion to terminate the Agreement, the
following sections of this Agreement will remain in full force and effect: Sections 2.9, 3.10, 4.3,
and 7.4.
Section 2.9 Forgiveness of Loan in Certain Circumstances
If the County exercises its discretion to terminate the Agreement pursuant to Section 2.8,
the County will waive Borrower’s obligation to repay the Loan if both of the following
conditions exist:
(a) No Event of Default has occurred and is continuing under this
Agreement.
(b) The Assignment Agreement is in full force and effect, including all
necessary consents.
Section 2.10 Prepayment of Loan
Borrower may prepay the Loan at any time without penalty.
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ARTICLE 3
PREDEVELOPMENT ACTIVITIES
Section 3.1 Predevelopment Activities.
(a) The County, in its sole discretion, may waive one or more of Borrower’s
obligations under Sections 3.2 through Section 3.8 below.
(b) Borrower shall satisfy the obligations set forth in Section 3.3 through
Section 3.8 no later than the dates set forth in the Predevelopment Schedule or as set forth below,
as applicable. If there is a conflict between the Predevelopment Schedule and the dates set forth
below, the dates set forth below will prevail.
(c) All site plans, designs, development plans and related documents created
pursuant to this Agreement will be used by the County solely for the purpose of determining the
feasibility of the Development and are subject at all times to acceptance in accordance with the
applicable laws, rules, regulations, and requirements of all government agencies and entities that
have jurisdiction over the Property or the Development. Nothing in this Agreement, and none of
the County actions taken pursuant to this Agreement, constitutes approval by the County of any
required permit, application, map, license, or other required approval, or in any way limits the
discretion of the County acting in its regulatory capacity with respect to the Property or the
Development.
Section 3.2 Progress Reports; Periodic Development Evaluation
On the first day of each month of the Term, and as reasonably requested by the County,
Borrower shall provide the County with written progress reports regarding the status of each of
the Predevelopment Activities.
Section 3.3 Financing Proposal
(a) Borrower shall prepare a Financing Proposal and submit it to the County
for review no later than April 1, 2015.
(b) The “Financing Proposal” is a statement that sets forth (i) a preliminary
estimate of the cost of constructing the Development, based on the Site Plans, and (ii) an
estimate of the funds available from government and private sources to pay the cost of
constructing the Development.
(c) Borrower shall attach to the Financing Proposal any site plans prepared by
Architect that show the basic physical characteristics of the Development, including the location
and scale of any improvements (the "Site Plans"). The Site Plans may include preliminary
building plans, sections and elevations. Borrower shall cause the Site Plans to serve as the basis
for the Borrower's application for Land Use Approvals and for the preparation of the Design
Development Documents.
(d) The County shall review and comment on the Financing Proposal within
thirty (30) days after receipt. If the County requires modifications to the Financing Proposal, the
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County will give Borrower specific comments on the Financing Proposal and Borrower shall
submit a revised Financing Proposal within thirty (30) days after notification of the County’s
request for revision. Borrower shall follow this procedure for resubmission of a revised
Financing Proposal until the Financing Proposal is found by the County to be feasible.
(e) Borrower shall identify and apply for any government loans and grants,
private loans and grants, and equity financing necessary for the construction of the Development.
Section 3.4 Predevelopment Schedule.
(a) The current Predevelopment Schedule is attached to this Agreement as
Exhibit C.
(b) Borrower shall submit any material revision to the approved
Predevelopment Schedule to the County for its review and approval. The County shall review
the revised Predevelopment Schedule and shall either approve or disapprove it in writing within
thirty (30) 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, Borrower shall resubmit a revised Predevelopment
Schedule within thirty (30) days of notification of disapproval. The County shall either approve
or disapprove the submitted revised Predevelopment Schedule within thirty (30) days of the date
such revised Predevelopment Schedule is received by the County.
Section 3.5 Design Development Documents
(a) Borrower shall cause the Architect to prepare design documents that
establish the scope, relationships, forms, size and appearance of improvements proposed to
comprise the Development using plans, sections and elevations, and typical construction details
(together, the "Design Development Documents"). Borrower shall cause the Design
Development Documents to (i) be based on, and in substantial conformity with, the Site Plans,
(ii) include specifications that identify major materials and systems, and (iii) establish the quality
levels of major materials and systems.
(b) The County shall perform a preliminary review of the Design
Development Documents to aid in the determination to be made by the County pursuant to
Section 2.8(a)(iii) above. If the Design Development Documents could result in a determination
of Infeasibility, the County will provide the Borrower with specific comments. If Borrower
desires the County to evaluate revised Design Development Documents, Borrower shall submit
the revised Design Development Documents to the County for review. Borrower shall follow this
procedure for resubmission of revised Design Development Documents until the Design
Development Documents are accepted by the County or the County makes a determination of
Infeasibility.
Section 3.6 CEQA Environmental Review.
(a) Prior to submitting an application for the Land Use Approvals and within
the time set forth in the Predevelopment Schedule, the Borrower shall perform any additional
environmental studies required by the County in connection with its environmental review of the
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Development in accordance with CEQA. The Borrower acknowledges that the environmental
review process under CEQA may involve preparation and consideration of additional
information, as well as consideration of input from interested organizations and individuals; that
approval or disapproval of the Development following completion of the environmental review
process is within the sole, complete, unfettered, and absolute discretion of the County without
limitation by or consideration of the terms of this Agreement; and that the County makes no
representation regarding the ability or willingness of the County to approve the Development at
the conclusion of the environmental review process required by CEQA, or regarding the
imposition of any mitigation measures as conditions of any approval that may be granted. The
Parties recognize that, as a result of the environmental review process, the County has the
absolute discretion and right to terminate this Agreement, and no cost shall be incurred by the
County as a result of such termination. In addition, the Borrower acknowledges that any
required approvals by any other local, state or federal agency may require additional
environmental review, and that any approval by the County does not bind any other local, state
or federal agency to approve the Development or to impose mitigation measures that are
consistent with the terms of this Agreement or with the terms of any mitigation measures
required by the County pursuant to the County's environmental review.
(b) If the County approves the Development following completion of the
environmental review process and such approval is conditioned upon implementation of
specified environmental mitigation measures, the Borrower is responsible for implementing such
mitigation measures as part of the Development; provided, however, this Agreement shall be
terminated pursuant to Section 2.8 above upon the occurrence of any of the following:
(i) County disapproval of the Development following completion of
the environmental review process; or,
(ii) A determination by the Borrower and the County that
implementation by the Borrower of any required environmental mitigation measures would
cause the Development to become economically infeasible.
Section 3.7 Land Use Approvals
Borrower shall apply for, and exercise diligent good faith efforts to obtain, all Land Use
Approvals within the time set forth in the Predevelopment Schedule.
Section 3.8 Financing Plan
(a) Within the time set forth in the Predevelopment Schedule, Borrower shall
submit a Financing Plan to the County approval. The “Financing Plan” is a set of documents that
includes the following:
(i) An updated version of the Financing Proposal that sets forth the
sources and uses of funds, including a cost breakdown of anticipated construction costs, all
assumptions for all debt and equity financing, the timing of the use of each source of financing,
and a breakdown of which expenses each source of financing is funding.
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(ii) A proforma operating budget for the Development over a fifty-five
(55) year term that shows debt service on all loans.
(iii) A copy of any commitment letter issued to Borrower for loans,
grants, or other financial assistance to be used to finance construction of the Development
("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 the cost of
constructing the Development and the amount available to the Borrower through the
Commitments.
(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 Development.
(b) The County shall review the Financing Plan and any proposed
amendments to it to aid in the determination to be made by the County pursuant to Section
2.8(a)(v) above, including determining whether the Borrower has the financial capability to pay
all the estimated cost of constructing the Development. If the Financing Plan is not approved,
the County will give Borrower specific reasons for disapproval. If Borrower desires the County
to reevaluate the Financing Plan, Borrower shall submit a revised Financing Plan for review.
Borrower shall follow this procedure for resubmission of a revised Financing Plan until the
Financing Plan is approved by the County or the County makes a determination of Infeasibility.
(c) 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 the
California Tax Credit Allocation Committee, Borrower shall exercise diligent good faith efforts
to obtain a funding commitment from a reputable equity investor.
Section 3.9 State Prevailing Wages
To the extent applicable, 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 Development 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"). Borrower shall, and shall cause the consultants, contractors, and subcontractors to,
comply with the other applicable provisions of California Labor Code Sections 1720 et seq.,
1777.5 et seq., and implementing regulations of the DIR. 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 as 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 construction of the Development, 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
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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 Loan.
Section 3.10 Equal Opportunity
During the performance of the Predevelopment Activities, Borrower may not permit
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 Predevelopment Activities.
Section 3.11 Borrower Supervision of Predevelopment Activities
Borrower is 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 construction of the Development 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 Development.
Section 3.12 Right of Entry.
The County hereby grants Borrower and Borrower's designated contractors,
subcontractors, agents, employees, licensees, invitees and guests during the Term, the right to
enter the Property as necessary to perform the Predevelopment Activities provided that (a) the
County is given at least 24 hours’ notice, in writing, where feasible, or such shorter oral notice as
it reasonably consents to, including a description of the activities being conducted; (b) all
activities are conducted in compliance with all applicable laws, codes, and regulations; (c) the
results of all such activities, including copies of any reports, are provided to the County at no
cost; and (d) any physical damage or alteration of the physical condition of the Property that
results from any activity under this Section is promptly repaired by Borrower. Borrower shall
indemnify, defend (with counsel reasonably acceptable to County) and hold harmless the County
and its directors, officers, contractors, agents and employees against any claims made against
them that arise out of the activities Borrower or its designated contractors, subcontractors,
agents, employees, licensees, invitees or guests on or concerning the Property during the term of
this Agreement. Borrower’s indemnification of the County will survive the expiration of this
Agreement.
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ARTICLE 4
LOAN REQUIREMENTS
Section 4.1 Match Requirement
The Borrower shall cause there to be a minimum of Twelve Thousand Dollars ($12,000)
in other, non-federal sources used to fund Predevelopment Activities.
Section 4.2 Information.
Borrower shall provide any information reasonably requested by the County in
connection with the Development and Borrower's use of the Predevelopment Loan funds.
Section 4.3 Records
(a) 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,
records and accounts necessary or prudent to evidence and substantiate in full detail Borrower's
compliance with the terms and provisions of this Agreement. Borrower shall cause all books,
records and accounts relating to its compliance with the terms, provisions, covenants and
conditions of this Agreement to be kept and maintained in accordance with generally accepted
accounting principles consistently applied, and are to be consistent with requirements of this
Agreement. Borrower shall cause all such books, records, and accounts are to be open to and
available for inspection and copying by HUD, the County, its auditors or other authorized
representatives at reasonable intervals during normal business hours. Borrower shall cause
copies of all tax returns and other reports that Borrower may be required to furnish to any
government agency to be open for inspection by the County at all reasonable times at the place
that the books, records and accounts of Borrower are kept. Borrower shall preserve such records
for a period of not less than five (5) years after their creation 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 Loan is pending at the end of the record
retention period stated herein, then Borrower shall retain such records until such action and all
related issues are resolved. Borrower shall cause the records to include all invoices, receipts, and
other documents related to expenditures from the Loan funds. Borrower shall cause records to
be kept accurate and current and in a form that allows the County to comply with the record
keeping requirements contained in 24 C.F.R. Section 92.508.
(b) The County shall notify Borrower of any records it deems insufficient.
Borrower has 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 must 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 may, at any time, audit all of Borrower's books, records,
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and accounts pertaining to the Development. Any such audit is to be conducted during normal
business hours at the principal place of business of Borrower and wherever records are kept.
Immediately after the completion of an audit, the County shall deliver a copy of the results of the
audit to Borrower.
Section 4.5 Notice of Litigation.
Borrower shall promptly notify the County in writing of any litigation that has the
potential to materially affect Borrower or the Property and of any claims or disputes that involve
a material risk of such litigation.
Section 4.6 Affordability Restrictions
If Borrower purchases the Property in order to construct the Development, the County
and Borrower shall cause a regulatory agreement to be recorded against the Property
concurrently with the close of escrow. The regulatory agreement will obligate Borrower to,
among other matters, cause the operator of the Development to rent a certain number of units in
the Development to low income households. The regulatory agreement will be in effect for a
time period of no less than fifty-five (55) years.
Section 4.7 Nondiscrimination
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,
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 may 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 4.8 Mandatory Language in All Subsequent Deeds, Leases and Contracts.
All deeds, leases or contracts made or entered into by Borrower, its successors or assigns,
as to any portion of the Development shall contain therein the following language:
(a) In Deeds:
"(1) Grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of, any person or
group of persons on account of any basis listed in subdivision (a)
and (d) of Section 12955 of the Government Code, as those bases
are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955 and Section
12955.2 of the Government Code, in the sale, lease, sublease,
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transfer, use, occupancy, tenure or enjoyment of the property
herein conveyed, nor shall the grantee or any person claiming
under or through the grantee, establish or permit any 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 herein conveyed.
The foregoing covenant shall run with the land.
(2) Notwithstanding paragraph (1), with respect to familial status,
paragraph (1) shall not be construed to apply to housing for older
persons, as defined in Section 12955.9 of the Government Code.
With respect to familial status, nothing in paragraph (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 1360 of the Civil Code
and subdivisions (n), (o), and (p) of Section 12955 of the
Government Code shall apply to paragraph (1)."
(b) In Leases:
"(1) Lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of, any person or
group of persons on account of any basis listed in subdivision (a)
and (d) of Section 12955 of the Government Code, as those bases
are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955 and Section
12955.2 of the Government Code in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the premises
herein leased nor shall the lessee or any person claiming under or
through the lessee, 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,
sublessees, subtenants, or vendees in the premises herein leased.
(2) Notwithstanding paragraph (1), with respect to familial status,
paragraph (1) shall not be construed to apply to housing for older
persons, as defined in Section 12955.9 of the Government Code.
With respect to familial status, nothing in paragraph (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 1360 of the Civil Code
and subdivisions (n), (o), and (p) of Section 12955 of the
Government Code shall apply to paragraph (1)."
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(c) In Contracts:
"(1)There shall be no discrimination against or segregation of, any
person or group of persons on account of any basis listed in
subdivision (a) and (d) of Section 12955 of the Government Code,
as those bases are defined in Sections 12926, 12926.1, subdivision
(m) and paragraph (1) of subdivision (p) of Section 12955 and
Section 12955.2 of the Government Code in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the
property nor shall the transferee or any person claiming under or
through the transferee 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 of the land.
(2) Notwithstanding paragraph (1), with respect to familial status,
paragraph (1) shall not be construed to apply to housing for older
persons, as defined in Section 12955.9 of the Government Code.
With respect to familial status, nothing in paragraph (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 1360 of the Civil Code
and subdivisions (n), (o), and (p) of Section 12955 of the
Government Code shall apply to paragraph (1)."
Section 4.9 Transfer.
No Transfer is permitted without the prior written consent of the Countyy, which the
County may withhold in its discretion. The Loan will automatically accelerate and be due in full
upon any unauthorized Transfer.
Section 4.10 Insurance Requirements
(a) Borrower shall maintain the following insurance coverage throughout the
Term of the 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) Commercial 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.
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(iii) 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.
(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).
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) Authority of Borrower. Borrower has full power and authority to execute
and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to
execute and deliver the Loan Documents and all other documents or instruments executed and
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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.
(c) Authority of Persons Executing Documents. The Loan Documents and all
other documents or instruments executed and delivered, or to be executed and delivered,
pursuant to this Agreement have been executed and delivered by persons who are duly
authorized to execute and deliver the same for and on behalf of Borrower, and all actions
required under Borrower's organizational documents and applicable governing law for the
authorization, execution, delivery and performance of the 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.
(d) Valid Binding Agreements. The Loan Documents and all other
documents or instruments that 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.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
the Loan Documents or of any other documents or instruments executed and delivered, or to be
executed or delivered, pursuant to this Agreement, nor the performance of any provision,
condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any
statute, rule or regulation, or any judgment, decree or order of any court, board, commission or
agency whatsoever binding on Borrower, or any provision of the organizational documents of
Borrower, or will conflict with or constitute a breach of or a default under any agreement to
which Borrower is a party, or will result in the creation or imposition of any lien upon any assets
or property of Borrower, other than liens established pursuant hereto.
(f) Compliance with Laws; Consents and Approvals. The Development 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.
(g) Pending Proceedings. Borrower is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever. 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 Loan or impair the security to be given to the County
pursuant hereto.
(h) 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.
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(i) 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
Any one or more of the following constitutes an "Event of Default" by Borrower under
this Agreement:
(a) Failure to Make Payment. If Borrower fails to make any payment when
such payment is due pursuant to the Loan Documents.
(b) Breach of Covenants. If Borrower fails to duly perform, comply with, or
observe any other condition, term, or covenant contained in this Agreement (other than as set
forth in Section 6.1(a) and Section 6.1(c) through Section 6.1(h)), or in any other Loan
Document, and Borrower fails to cure such default within 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.
(c) Assignment Agreement. If Borrower fails to take all actions necessary to
implement the Assignment Agreement.
(d) Unauthorized Transfer. If any Transfer occurs, other than as permitted by
Section 4.4.
(e) Representation or Warranty Incorrect. If 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 Loan Documents, proves to have
been incorrect in any material respect when made.
(f) Insolvency. If 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
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(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 Note.
(g) Assignment; Attachment. If 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
Note.
(h) Suspension; Termination. If Borrower or Borrower's general partner, if
Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability
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
Upon the occurrence of an Event of Default and until such Event of Default is cured or
waived, the County is relieved of any obligation to make or disburse any portion of the Loan. In
addition, upon the occurrence of an Event of Default and following the expiration of all
applicable notice and cure periods, the County may proceed with any and all remedies available
to it under law, this Agreement, and the other Loan Documents. Such remedies include but are
not limited to the following:
(a) Acceleration of Note. The County may cause all indebtedness of
Borrower to the County under this Agreement and the Note, together with any accrued interest
thereon, to become immediately due and payable. Borrower waives all right to presentment,
demand, protest or notice of protest or dishonor. The 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. 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 Loan.
(b) Exercise of Assignment. The County may exercise its rights under the
Assignment Agreement.
(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
20
covenants under the Loan Documents or to enjoin acts on things that may be unlawful or in
violation of the provisions of the 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 Loan.
Upon demand, Borrower shall reimburse the County for any funds advanced by the County to
cure a monetary default by Borrower, together with interest thereon from the date of expenditure
until the date of reimbursement at the Default Rate.
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.
Section 6.4 Remedies Cumulative
No right, power, or remedy given to the County by the terms of this Agreement or the
Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and
every such right, power, or remedy 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 creates 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. Borrower is at all times an independent
contractor, wholly responsible for the manner in which it and its agents perform the services
required 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 performing the Predevelopment Activities,
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.
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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 for
the purchase of materials, supplies or equipment, or the furnishing or the performance of any
work or services related to Predevelopment Activities. Borrower shall include similar
requirements in any contracts entered into related to Predevelopment Activities.
Section 7.3 Amendments
No alteration or variation of the terms of this Agreement is valid unless made in writing
by the parties.
Section 7.4 Indemnification
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) that arise out of or in connection with this
Agreement, including but not limited to environmental review under CEQA, the performance of
the Predevelopment Activities, except to the extent such claim arises from the grossly negligent
or willful misconduct of the County, its agents, or its employees. The provisions of this Section
will survive the termination or expiration of this Agreement.
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 of this Agreement by the County or for any amount that may
become due from the County pursuant to this Agreement.
Section 7.6 No Third Party Beneficiaries
There are no third party beneficiaries to this Agreement.
Section 7.7 Future County Actions
This Agreement does not constitute the County’s (i) agreement to lend the Subsequent
Loan, (ii) consent to construction of the Development, or (iii) agreement to issue any Land Use
Approvals. The County retains full discretion to approve or disapprove the Subsequent Loan and
the Land Use Approvals.
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
22
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.
(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
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) 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
All notices required or permitted by this Agreement must be in writing and sent 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
30 Muir Road
Martinez, CA 94553
Attention: Housing Successor Manager
Borrower:
Community Housing Development Corporation of North Richmond
1535-A Fred Jackson Way
Richmond, CA 94604
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
23
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
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 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 7.15 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 7.16 Entire Understanding of the Parties
The Loan Documents constitute the entire understanding and agreement of the parties
with respect to the Loan.
24
Section 7.17 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.
The parties are executing this Agreement as of the date first above written.
COUNTY:
COUNTY OF CONTRA COSTA, a political
subdivision of the State of California
By: ________________________________
________________________, Director
Department of Conservation and Development
Approved as to form:
Sharon L. Anderson
County Counsel
By:_____________________
Kathleen Andrus
Deputy County Counsel
BORROWER:
COMMUNITY HOUSING DEVELOPMENT
CORPORATION OF NORTH RICHMOND,
a California nonprofit public benefit corporation
By:__________________________
Name:_______________________
Its: _________________________
25
EXHIBIT A
Legal Description of the Property
[This is a description of only the property that is owned by the County]
EXHIBIT B
Predevelopment Budget
C-1
EXHIBIT C
Predevelopment Schedule
C-1
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND EXHIBITS ............................................................................2
Section 1.1 Definitions................................................................................................... 2
Section 1.2 Exhibits ....................................................................................................... 4
ARTICLE 2 LOAN PROVISIONS ..............................................................................................5
Section 2.1 Loan ............................................................................................................ 5
Section 2.2 Interest......................................................................................................... 5
Section 2.3 Use of 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.................................................................................................. 5
Section 2.7 Repayment of the Predevelopment Loan. ................................................... 6
Section 2.8 Infeasibility ................................................................................................. 7
Section 2.9 Forgiveness of Loan in Certain Circumstances .......................................... 7
Section 2.10 Prepayment of Loan .................................................................................... 7
ARTICLE 3 PREDEVELOPMENT ACTIVITIES ......................................................................8
Section 3.1 Predevelopment Activities. ......................................................................... 8
Section 3.2 Progress Reports; Periodic Development Evaluation ................................. 8
Section 3.3 Financing Proposal...................................................................................... 8
Section 3.4 Predevelopment Schedule. .......................................................................... 9
Section 3.5 Design Development Documents ............................................................... 9
Section 3.6 CEQA Environmental Review. ................................................................... 9
Section 3.7 Land Use Approvals ................................................................................. 10
Section 3.8 Financing Plan .......................................................................................... 10
Section 3.9 State Prevailing Wages ............................................................................. 11
Section 3.10 Equal Opportunity ..................................................................................... 12
Section 3.11 Borrower Supervision of Predevelopment Activities ............................... 12
Section 3.12 Right of Entry. .......................................................................................... 12
ARTICLE 4 LOAN REQUIREMENTS.....................................................................................13
Section 4.1 Match Requirement ................................................................................... 13
Section 4.2 Information. .............................................................................................. 13
Section 4.3 Records ..................................................................................................... 13
Section 4.4 County Audits ........................................................................................... 13
Section 4.5 Notice of Litigation. .................................................................................. 14
Section 4.6 Affordability Restrictions ......................................................................... 14
Section 4.7 Nondiscrimination..................................................................................... 14
Section 4.8 Mandatory Language in All Subsequent Deeds, Leases and
Contracts. .................................................................................................. 14
Section 4.9 Transfer. .................................................................................................... 16
Section 4.10 Insurance Requirements ............................................................................ 16
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER ........................17
i
TABLE OF CONTENTS
(continued)
Page
Section 5.1 Representations and Warranties ................................................................ 17
ARTICLE 6 DEFAULT AND REMEDIES ...............................................................................19
Section 6.1 Events of Default ...................................................................................... 19
Section 6.2 Remedies ................................................................................................... 20
Section 6.3 Right of Contest ........................................................................................ 21
Section 6.4 Remedies Cumulative ............................................................................... 21
ARTICLE 7 GENERAL PROVISIONS ....................................................................................21
Section 7.1 Relationship of Parties .............................................................................. 21
Section 7.2 No Claims ................................................................................................. 22
Section 7.3 Amendments ............................................................................................. 22
Section 7.4 Indemnification ......................................................................................... 22
Section 7.5 Non-Liability of County Officials, Employees and Agents...................... 22
Section 7.6 No Third Party Beneficiaries .................................................................... 22
Section 7.7 Future County Actions .............................................................................. 22
Section 7.8 Conflict of Interest .................................................................................... 22
Section 7.9 Notices, Demands and Communications .................................................. 23
Section 7.10 Applicable Law ......................................................................................... 24
Section 7.11 Parties Bound ............................................................................................ 24
Section 7.12 Attorneys' Fees .......................................................................................... 24
Section 7.13 Severability ............................................................................................... 24
Section 7.14 Waivers ..................................................................................................... 24
Section 7.15 Title of Parts and Sections ........................................................................ 24
Section 7.16 Entire Understanding of the Parties .......................................................... 24
Section 7.17 Multiple Originals; Counterpart ................................................................ 25
EXHIBIT A Legal Description of the Property
EXHIBIT B Predevelopment Budget
EXHIBIT C Predevelopment Schedule
AMENDED AND RESTATED
PREDEVELOPMENT LOAN AGREEMENT
Between
THE COUNTY OF CONTRA COSTA
and
COMMUNITY HOUSING DEVELOPMENT
CORPORATION OF NORTH RICHMOND
_______________, 2014
FIRST AMENDED AND RESTATED
PROMISSORY NOTE
(Heritage Point)
$283,700 Martinez, California
____________, 2014
FOR VALUE RECEIVED, the undersigned Community Housing Development
Corporation of North Richmond, 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 Two Hundred Eighty-
Three Thousand Seven Hundred Dollars ($283,700), plus interest thereon pursuant to Section 2
below.
This First Amended and Restated Promissory Note (the “Note”) replaces in its entirety
that promissory note executed by Borrower for the benefit of Holder dated April 12, 2011, in the
principal amount of One Hundred Thirty-One Thousand Seven Hundred Dollars ($131,700) (the
“Original Note”). Upon execution of this Note by Borrower, the Original Note will be cancelled
and returned to Borrower.
All capitalized terms used but not defined in this Note have the meanings set forth in the
Loan Agreement.
1. Borrower's Obligation. This Note evidences Borrower's obligation to repay
Holder the principal amount of Two Hundred Eighty-Three Thousand Seven Hundred Dollars
($283,700) with interest for the funds loaned to Borrower by Holder to finance predevelopment
expenses in connection with Heritage Point pursuant to the Amended and Restated
Predevelopment Loan Agreement between Borrower and Holder of even date herewith (the
"Loan Agreement").
2. Interest.
(a) Subject to the provisions of Subsection (b) below, the Loan bears simple
interest at a rate of three percent (3%) per annum from the date of disbursement until full
repayment of the principal balance of the Loan.
(b) If an Event of Default occurs, interest will accrue on all amounts due
under this Note at the Default Rate until such Event of Default is cured by Borrower or waived
by Holder.
3. Term and Repayment Requirements. Principal and interest under this Note is due
and payable as set forth in Section 2.7 of the Loan Agreement. In any event, the unpaid principal
balance, together with any accrued interest, is due and payable not later than December 31, 2016.
4. No Assumption. This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of Holder.
1
5. Collateral. As security for this Note, Borrower has assigned to Holder Borrower’s
rights and obligations in and to various contracts and work products, which are more particularly
described in the Assignment Agreement. The terms of the Assignment Agreement are hereby
incorporated into this Note and made a part hereof.
6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the
United States of America to Holder at Department of Conservation and Development, 30 Muir
Road, Martinez, CA 94553, Attention: Housing Successor Manager, or to such other place as
Holder may from time to time designate.
(b) All payments on this Note are without expense to Holder. Borrower shall
pay all costs and expenses, including reasonable attorney's fees of Holder, incurred in connection
with the payment of this Note and the release of any security hereof.
(c) All payments received will be applied first to accrued interest then to the
outstanding principal amount.
(d) Notwithstanding any other provision of this Note, if, for any reason
whatsoever, the payment of any sums by Borrower pursuant to the terms of this Note would
result in the payment of interest that exceeds the amount that 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 that would exceed
the lawful rate.
(e) The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
7. Event of Default; Acceleration.
(a) Upon the occurrence of an Event of Default, the entire unpaid principal
balance, together with all interest thereon, and together with all other sums then payable under
this Note will, at the option of Holder, become immediately due and payable without further
demand.
(b) 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 an Event of Default 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
Holder, except as and to the extent otherwise provided by law.
2
8. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time
to time, and that Holder may accept further security or release any security for this Note, all
without in any way affecting the liability of Borrower.
(b) No extension of time for payment of this Note or any installment hereof
made by agreement of 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 Borrower
under this Note, either in whole or in part.
9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower are to be given in the manner and at the
addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may
therein designate.
(b) Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by 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 Loan. This Note may not be modified except upon the
written consent of the parties.
IN WITNESS WHEREOF, Borrower is executing this Promissory Note as of the day and
year first above written.
COMMUNITY HOUSING DEVELOPMENT
CORPORATION OF NORTH RICHMOND,
a California nonprofit public benefit corporation
By:__________________________
Name:______________________
Its: _________________________
3
FIRST AMENDED AND RESTATED
PROMISSORY NOTE
(Heritage Point)
$48,000 Martinez, California
____________, 2014
FOR VALUE RECEIVED, the undersigned Community Housing Development
Corporation of North Richmond, 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 Forty-Eight Thousand
Dollars ($48,000), plus interest thereon pursuant to Section 2 below.
This First Amended and Restated Promissory Note (the “Note”) replaces in its entirety
that promissory note executed by Borrower for the benefit of Holder dated April 1, 2014, in the
principal amount of Forty-Eight Thousand Dollars ($48,000) (the “Original Note”). Upon
execution of this Note by Borrower, the Original Note will be cancelled and returned to
Borrower.
All capitalized terms used but not defined in this Note have the meanings set forth in the
Loan Agreement.
1. Borrower's Obligation. This Note evidences Borrower's obligation to repay
Holder the principal amount of Forty-Eight Thousand Dollars ($48,000) with interest for the
funds loaned to Borrower by Holder to assess the feasibility of constructing rental housing
affordable to low-income households pursuant to the First Amended Technical Assistance Loan
Agreement between Borrower and Holder of even date herewith (the "Loan Agreement").
2. Interest.
(a) Subject to the provisions of Subsection (b) below, the Loan bears simple
interest at a rate of three percent (3%) per annum from the date of disbursement until full
repayment of the principal balance of the Loan.
(b) If an Event of Default occurs, interest will accrue on all amounts due
under this Note at the Default Rate until such Event of Default is cured by Borrower or waived
by Holder.
3. Term and Repayment Requirements. Principal and interest under this Note is due
and payable as set forth in Section 2.7 of the Loan Agreement. In any event, the unpaid principal
balance, together with any accrued interest, is due and payable not later than December 31, 2016.
4. No Assumption. This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of Holder.
5. Collateral. As security for this Note, Borrower has assigned to Holder Borrower’s
rights and obligations in and to various contracts and work products, which are more particularly
1
described in the Assignment Agreement. The terms of the Assignment Agreement are hereby
incorporated into this Note and made a part hereof.
6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the
United States of America to Holder at Department of Conservation and Development, 30 Muir
Road, Martinez, CA 94553, Attention: Affordable Housing Program Manager, or to such other
place as Holder may from time to time designate.
(b) All payments on this Note are without expense to Holder. Borrower shall
pay all costs and expenses, including reasonable attorney's fees of Holder, incurred in connection
with the payment of this Note and the release of any security hereof.
(c) All payments received will be applied first to accrued interest then to the
outstanding principal amount.
(d) Notwithstanding any other provision of this Note, if, for any reason
whatsoever, the payment of any sums by Borrower pursuant to the terms of this Note would
result in the payment of interest that exceeds the amount that 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 that would exceed
the lawful rate.
(e) The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
7. Event of Default; Acceleration.
(a) Upon the occurrence of an Event of Default, the entire unpaid principal
balance, together with all interest thereon, and together with all other sums then payable under
this Note will, at the option of Holder, become immediately due and payable without further
demand.
(b) 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 an Event of Default 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
Holder, except as and to the extent otherwise provided by law.
2
8. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time
to time, and that Holder may accept further security or release any security for this Note, all
without in any way affecting the liability of Borrower.
(b) No extension of time for payment of this Note or any installment hereof
made by agreement of 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 Borrower
under this Note, either in whole or in part.
9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower are to be given in the manner and at the
addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may
therein designate.
(b) Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by 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 Loan. This Note may not be modified except upon the
written consent of the parties.
IN WITNESS WHEREOF, Borrower is executing this Promissory Note as of the day and
year first above written.
COMMUNITY HOUSING DEVELOPMENT
CORPORATION OF NORTH RICHMOND,
a California nonprofit public benefit corporation
By:__________________________
Name:______________________
Its: _________________________
3