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HomeMy WebLinkAbout _ 4.2(b)--Development Agreement for Piper Way Senior Housing GI �" Y � F
� � � ° � � � " � � CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: July 18, 2023 FROM: Steve Bade, Assistant City
ITEM NO. 4.2(b} Manager
***APPROVED BY***
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t�ue a e; ss � �r 7f1Q/2023 ry ip}�in,Ci ana � 7/11(2423
sbade@cityofredding.org btippin@cityofredding.org
SUBJECT: 4.2(b)--Consider approving Development Agreement for Piper Way Senior
Housin .
Recommendation
Authorize and approve the following actions:
(1) Authorize the Mayor to execute a Development Agreement with Piper Way Senior
Ho�using LP, providing a City of Redding Loan in an amount not-to-exceed $2,000,000
financed by the Community Development Block Grant Disaster Recovery Multifamily
Housing Program fund for the development of the Piper Way Senior Housing located at
3294 Piper Way;
(2) Authorize the City Manager, or designee, to allocate funds and execute the necessary
documents to complete the project transaction;
(3) Find that entering into a Development Agreement is not considered a project under the
California Environmental Quality Act; and
(4) Find that entering into a Development Agreement is exempt from review under the
National Environmental Policy Act under Title 24 CFR 58.34(a)(3).
Fiscal Impact
The State of California Department of I�ousing and Community Development (HCD) is the lead
agency administering Community Development Block Grant Disaster Recovery - Multifamily
Housing Program (CDBG DR-1VIHP) funds. These funds are granted to jurisdictions to provide
financing to build income-qualifying housing projects. The City of Redding (City) was allocated
$16,660,145 in grant funds to be utilized for eligible projects and staff activity delivery costs.
CDBG DR-MHP are grant funds which have no impact to the General Fund. With the approval
of this project, all CDBG DR-1VIHP grant funds from the HCD have been allocated to income-
qualifying housing projects in the City.
Report to Redding City Council July 11, 2023
Re: 4.2(b)--DevelopmentAgreement for Piper Way Senior Housing Page 2
Alternative Action
The City Council (Council) could modify the terms or conditions of the Development Agreement
(DA) and provide alternative direction to staf£ Any modifications would require additional
negotiations with the Piper Way Senior Housing, LP (Developer). This action may delay the
project or prohibit the project from moving forward.
Alternately, the Council may choose not to approve the DA. In this case, the Developer would
need to identify other funding resources to keep the project moving forward.
Background/Analysis
As a result of the wildfires that affected California in 2018, the Federal Emergency Management
Agency proclaimed a presidentially declared disaster in five counties, including Shasta County
for the Carr Fire. In recognition of the unmet recovery needs, the U.S. Department of Housing
and Urban Development (HUD) allocated CDBG DR-MHP funds to HCD to serve as the lead
and responsible agency to administer the distribution of the funds.
HCD undertook an extensive needs assessment to determine the specific priorities of the affected
counties including community outreach and analysis that resulted in four CDBG DR-MHP
Program categories: housing, infrastructure, economic revitalization, and planning. The majority
of funds are allocated to housing recovery to address the unmet rental housing needs in affected
counties. To meet the unmet rental housing needs, HCD created the CDBG DR-MHP. The City
was awarded $16,660,145 in grant funds to be utilized for eligible projects and staff activity
delivery costs. To date, Council has awarded $12,994,416 in CDBG DR-MHP funds to five
income-eligible projects.
Under this DA, loaned CDBG DR-MHP fullds would assist the Project in crea�ing a 60-unit
affordable housing development, compris�d of 59 affordable one-bedroom units and one
inanager's unit. The Project is located at 3294 Piper Way, adjacent to the First Christian Church
of Redding and north w�st of San Franciseo Avenue in West Redding. The targeted population
is Senior citizens over the age of 62 earning belaw 50 percen� of the Area Median Income. The
tatal cost of the Project is $31,508,104. All CDBG DR-MHP projects must receive a Notice to
Proceed from HCD no later than December 31, 2023.
The proposed City Loan, in an amount nat-to-exceed $2,000,000, has a term of 55-years at three
pere�nt int�rest. Repayment of th� City's Loan is contingant upon the ability of the Project to
generate residual receip�s; tha� is, revenue in excess of approved operatin�; expenses. Residual
receipts payments wi11 commence aftar an initial 15-year deferral. At the end of the SS-year loan
term, any principal and interest balanee will be due and payable �o the City.
Environmental Review
Entering into a DA is not considered a projeet under the California Environmental Quality Act
(CEQA). The construction project itself has also been reviewed for CEQA requirements and
complies.
Report to Redding City Council July 11, 2023
Re: 4.2(b)--DevelopmentAgreement for Piper Way Senior Housing Page 3
Under the National Environmental Policy Act (NEPA), administrative and management
activities such as entering into agreements is considered exempt activities and no further action is
required. The construction project itself has also been reviewed for NEPA requirements and has
received the Authority to Use Grant Funds authorization from HUD and the State of California.
Council PNio�^ity/City Manager Goals
� Government of the 21st Century — `Be relevant and proactive to the opportunities and
challenges of today's residents and workforce. Anticipate the future to make better
decisions today."
• Economic Development- "Facilitate and become a catalyst for economic development in
Redding to create jobs, retain current businesses and attract new ones, and encourage
investment in the coinmunity."
Attachments
Piper Way Development Agreement
Piper Way Exhibits
DEVELOPMENT AGREEMENT
Community Development Block Grant (CDBG}
Disaster Recovery—Multifamily Housing Program (DR-MHP)
Piper Way Senior Housing
3294 Placer Street, Redding, CA 96001
(Accessor Parcel Number: 104-680-003-000)
By and Between the
City of Redding
and
Piper Way Senior Housing, LP
DEVELOPMENT AGREEMENT
This DEVELOPMENT AGREEMENT ("Agreement") is made and entered into by
and between the CITY OF REDDING, a municipal corporation and general law city ("City") and
PIPER WAY SENIOR HOUSING, LP, a California limited partnership ("Developer").
RECITALS
A. City is a California municipal corporation and general law city.
B. Developer is a California Lirnited Partnership organized under the laws of the State
of California.
C. Christian Church Homes is the legal owner of record of the Property particularly
described in Exhibit lA ("Legal Description"), Assessor's Parcel Number 104-680-003-000 (the
"Property")and depicted visually in Exhibit 1 B. The Property is currently vacant,undeveloped land.
D. PWS Housing, LLC is the general partner of Developer. Developer intends to
develop,construct and manage a 60-unit rental housing deve(opment consisting of 59 one-bedrooms,
1 two-bedrooms (manager's unit), and no three-bedroom units with related amenities thereon
(hereinafter, collectively, referred to as the "Project").
E. The Project has obtained an award of 9% low income housing tax credits ("Tax
Credits") from the California Tax Credit Allocation Committee ("CTCAC") to partly finance the
development of the Project.
F. The United States Department of Housing and Urban Development ("HUD")
allocates funds to the Community Development Block Grant (CDBG) Program. The State of
California (State) was appropriated Community Development Block Grant-Disaster Recovery
(CDBG-DR)funding under Public Law 115-123, by HUD via Federal RegisterNotice 83 FR 40314.
The State's Housing and Community Development (HCD) Department serves as the lead agency
and responsible entity for administering CDBG-DR funds for the State's unmet recovery needs
re(ated to the Federal Ernergency Management Agency (FEMA) Major Disaster Declarations 4344
and DR 4353. Recognizing the requirement included in Federal Register Notice 83 FR 5844,
published February 9,201 S,and 83 FR 40314,published August 14,2018,to address housing needs
first, HCD developed the Disaster Recovery Multifamily Housing Program (DR-MHP). DR-MHP
projects are funded to assist the unmet rental housing need, including the needs of individuals
displaced from rental homes and individuals who became homeless as the result of the disasters.
G. As required,the City of Redding and HCD have entered into a Master Standard
Agreement, numbered 21-DRMHP-21008, executed on August 6, 2021 which provides the
overarching terms and conditions for implementing the Program and the terms of the Assistance
common to all projects to be completed by the Subrecipient(the "Master Standard AgreemenY').
H. City and Developer now desire to enter into this Agreement to set forth the mutual
obligations of the City and Develaper in connection with the planning, designing, financing,
construction, and completion of the Project.
AGREEMENT
1. DEFINITIONS. The following definitions shall apply for the purposes of this Agreement:
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P .i � c �1
1.1 "Affordable Rent" shall have the meaning as set forth by the City Declaration of
Affordability Restrictions.
1.2 "Affordable Units"shall mean the rental housing units in the Project that are restricted
by the City's Declaration of Affordability Restrictions and pursuant to the LIHTC Program.
1.3 "Area Median Income or AMI" shall mean the current area median income adjusted
for fainily size appropriate to the size of the rental unit applicable to Shasta County, as determined by
the United States Department of Housing and Urban Development.
1.4 "Certificate of Completion" shall mean the document attached as Exhibit 9.
1.5 "Change Order" shall mean a modification of the Plans that is either a Substantial
Change, a change which will result in a material net increase in cost (for purposes of this Section 1.5
a material net increase in cost shall mean$50,000 for any individual change or any change that exceeds
$150,000 in the aggregate with all other changes) or extend the period of construction beyond the
Completion Date,or other change necessitated by circumstances, such as the unforeseen unavailability
of particular materials or products required in the Project's plans and specifications.
1.6 "City"shall mean the City of Redding. The City is a municipal corporation and general
law city. City as it is used in this Agreement includes the City Council of the City of Redding and any
assignees of or successors to its right, powers, and responsibilities. The principal office of the City is
located at ?77 Cypress Avenue, Redding, California 96001. The phone number for voice
communication with the City (Scott Badger, Housing Manager) is 530.225.4045 and for email
transmittal to the City is sbadgerCa�cityofreddinq.org .
1.7 "City Affordability Period" shall mean a period commencing upon the date of
recordation of a Certificate of Completion by the City for the Project and continuing for fifty(55)years
or as indicated in any Declaration of Affordability Restrictions.
1.8 "City Declaration of Affordability Restrictions" shall mean that certain Department
of Housing and Community Development Community Development Block Grant—Disaster Relief
Multifamily Housing Program Regulatory Agreement(Contract No. 21-DRMHP-21008 ) between
the Developer and the City that will restrict 12 (6 units are 30°/a or below of AMI) units in the Project
as required by HCD in connection with the CDBG-DR-MHP program.
1.9 "City Assistance" shall meant the City Loan(s).
1.10 "City Loan(s)" shall mean the financial assistance provided by the City pursuant to
Section 3.1.1.
1.11 "City Loan Promissory Note(s)" shall mean the promissory note to be executed by
Developer, or other party authorized by this Agreement which evidences the City Loan, a
representative form of which is attached as Exhibit 2A for CDBG DR-MHP funds.
1.12 "City Manager" shall mean the City Manager of the City of Redding.
1.13 "Code of Federal Regulations" or "CFR" is the codification of the general and
permanent rules published in the Federal Register by the executive departments and agencies of the
Federal Government.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a _ �� �2
1.14 "Completion Date" shall mean the date stated in the Schedule of Performance for the
completion of construction of the Project.
1.15 "Conflicting Language" shall mean any difference or conflict within the Agreement.
Conflicting language involving Exhibits 4a and 4b shall be resolved in favor of the aforementioned
exhibits.
1.16 "Construction" (whether or not capitalized), unless the context clearly indicates
otherwise, shall mean construction of the Project on the Property in accordance with the final Project
Specifications and this Agreement.
1.17 "Construction Loan(s)" is a loan to the Developer to be used for the construction of
improvements on real estate, usually short-term in nature, with the funds advanced in stages as
construction occurs and with repayment made from the permanent (long-tenn) mortgage loan placed
on the property when construction is completed. The Developer's construction loan with regard to this
development will be provided by U.S. Bank.
1.18 "Contractor" is the contractor or contractors with whom Developer contracts for the
construction,and"subcontractors"are those contractors with whom Contractor contracts or with whom
another subcontractor contracts for a portion of the construction. Contractor (and all subcontractors
who must,by law,hold a contractor's license)shall have a current and valid contractor's license,issued
by the California Contractors' State License Board, for the work they are performing.
1.19 "Days" shall mean calendar days unless expressly stated otherwise. If the date or time
period for any action under this Agreement falls or ends on a Saturday, Sunday or federal,state or legal
holiday, then such date or time period shall automatically be extended until 5 p.m. Pacific Time of the
next Day which is not a Saturday, Sunday or federal, state or legal holiday.
1.20 "Deed of Trust(s)" shall mean the deed of trust recorded against the Property to secure
the City Loan, a representative form of which is attached hereto as Exhibit ZB for CDBG DR-MHP
funds.
1.21 "Developer"is Piper Way Senior Housing,LP,a California Limited Partnership. The
principal office ofthe Developer is located at 1855 Olympic Blvd, Suite 300, Walnut Creek,CA 94596
The phone number for voice communication with the Developer is 510.746.4120 and for email
transmittal to the Developer is sstone@cchnc.org. Developer as it is used in this Agreement shall
include any permitted nominee, assignee, or successor in interest as herein provided.
1.22 "Development AgreemenY' or "Agreement" is this agreement which includes this
document and the referenced exhibits and attachments to this Agreement, which are all incorporated
in this Agreement as if set forth in full in the body of the Agreement.A default of any of the referenced
exhibits or attachments shall be deemed a default of this Agreement.
123 "Effective Date" shall mean the date this Agreement is signed by the City or its
designee authorized to sign on behalf of the City.
1.24 "Final Plans" are the complete set of architectural and civil engineering plans and
specifications for the Project which include the City's Development Services and Land Development
Divisions' conditions of approval and have been approved by the City's Building Division,
Engineering Division and the Housing Division's Project Coordinator prior to construction.
1.25 "HUD" shall mean the U.S. Department of Housing and Urban Development.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P �i <�c �3
1.26 RESERVED
1.27 RESERVED
1.28 RESERVED
1.29 "Lender" shall mean a(1 holders, including the holder of any construction or any
permanent loan(s) with a lien in first position or encumbrance as security for financing on all or any
part of the Property and references to the Property shall mean that portion of the Property so
encumbered.
1.30 "Low-Income Household"or"Lower-Income Household" shall have the meanings
set forth in the City of Declaration of Affordability Restrictions.
1.31 "Low Income Housing Tax Credit (LIHTC) Program" or "Tax Credit Program" shall
mean the federal and state Low Income Housing Tax Credit Programs administered by the California
Tax Credit Allocation Committee.
1.32 "Notice of Completion" is the document attached as Exhibit 8.
1.33 "Other Financing" shall mean the non-City financing sufficient to cover the remaining
costs to complete the Project pursuant to Section 3.5.
1.34 "Permanent Loan"or"take-out loan"shall mean the loan provided to the Developer at
the end of construction period to repay the short-term (non-permanent) construction loan. The
permanent loan provider for Developer is U.S. Bank.
1.35 "Plans" are the Preliminary Plans and/or the Final Plans, or both, as the context
requires.
1.36 "Preliminary Plans" are all the necessary plans, documents, and supplemental
information to comprise a complete application for the entitlements necessary to develop the Project,
as required by the City's Development Services Department.
1.37 "Preliminary Project BudgeY' shall mean the document attached as Exhibit 6.
1.38 "ProjecY' shall mean the development of the improvements to be constructed on the
Property in accordance with the Project Final Plans and this Agreement. The development of the
impravements include but are nat limited to the construction of a 60-unit affordable rental housing
development consisting of 59 one-bedrooms, 1 two-bedroom (manager's unit) and no three-bedroom
units and common areas with infrastructure to support the housing development. The rental housing
units (except the manager's unit) will be restricted as follows: 17 units for tenants not exceeding 60
percent of AMI, 18 units for tenants with incomes not exceeding 50 percent of the AMI, 18 units for
tenants with incomes not exceeding 45 percent of the AMI, 6 units for tenants with incomes not
exceeding 30 percent of the AMI and no units for tenants with incomes not exceeding 25 percent of
the AMI. Additional Project detail is further described and provided in this Agreement,the Scope of
Development and the Project Final Plans.
1.39 "Project Budget" is the identification of costs for all Project development activities as
required in Section 6.1 of this Agreement. A Preliminary Project Budget is attached as Exhibit 6.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a �� c �4
1.40 "Project Coordinator" shall mean the City's designee of a City staff person to review
the Project Final Plans, oversee construction progress, verify development progress, approve and
process construction draw requests and ensure construction compliance pursuant to this Agreement.
1.41 "Property"or"Project Site"shall mean the real property located in the City of Redding,
Shasta County,California,identified as APN 104-680-003-000,more specifically described in Exhibit
lA and depicted in Exhibit 1B.
1.42 "Regulatory Agreement" for the DR-MHP is attached as Exhibit 2C.
1.43 "Rider to the Development Agreement" for DR-MHP is attached as Exhibit 3.
1.44 "Schedule of Performance" is attached as Exhibit 7.
1.45 "Scope of Development" is attached as Exhibit 5.
1.46 "Security Documents" shall mean the following documents related to the City Loan:
the City Loan Deed of Trust,the City Loan Promissory Note and the City Declaration of Affordability
Restrictions.
1.47 "Subcontractor" shall mean those contractors or material suppliers with whom the
Developer contracts with or with whom another subcontractor contracts for a portion of the
construction. Subcontractors must have a current and valid contractor's license, issued by the
California Contractors' State License Board, for the work they are performing.
1.48 "Substantial Change" is a change as described in subsection 5.4.2 of this Agreement.
2. THE AGREEMENT.
2.1 Purpose of the At�reement. The purpose of this Agreement is to further the goals of
the City to increase, improve, and preserve affordable housing by assisting the Developer with the
development of the Property and the completion of the Project in accordance with the Final Plans and
this Agreement.
The City represents that the development of the Property and completion of the Project, under
this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of
the City of Redding and the health, safety, morals and welfare of its residents; for the purpose of
community improvement and welfare; and to improve,preserve, and increase the supply of affordable
housing. Except for the risks and speculation inherent with respect to real estate development projects,
Developer represents and agrees that its development of the Project under the Agreement is not
intended for speculation in land holding.
It is contemplated by the parties that all activities undertaken by Developer will be in
accordance with this Agreement. All attachments and exhibits are hereby incorporated into this
Agreement by reference.
2.2 Scope of Work. It is contemplated by the parties that the Developer will construct an
affordable rental housing development consisting of 60-unit affordable rental housing development
consisting of 59 one-bedrooms, 1 two-bedroom (manager's unit) and no three-bedroom units, along
with common areas and infrastructure to support the housing development. The specific scope of work
to be carried out by the Developer under this Agreement is more particularly described in this
Agreement, the Scope of Development and the Project Final Plans.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a � e �5
2.3 Term. This Agreement shall commence as of the Effective Date and proceed as
required by the Agreement and the Schedule of Performance, and, except for any deed restrictions,
covenants running with the land, deed of trust or promissory note, or other agreements or provisions
which by their terms survive the term of the Agreement, shall terminate upon the completion of all of
the following:
a) Completion of the construction of the Project in accordance with the
Agreement and Project Specifications;
b) Fulfillment by the parties of their obligations under this Agreement.
3. PROJECT FINANCING.
3.1 Citv Assistance. The City Assistance shall consist of the following:
3.1.1 City Loan-CDBG DR-MHP. In order to effectuate the completion of the Project
on the Property by the Developer,the City shall provide a loan in an amount not to exceed Two Million
($2,000,000} pursuant to the terms and conditions described in subsection 32., 15.27 and this
Agreement (the "City Loan") for the construction of affordable housing and any necessary
infrastructure improvements for development of the Project. The City Loan shall be funded with
CDBG DR-MHP funds or any other funds deemed necessary to fulfill the City's obligation under this
Agreement.
3.2 City Loan Term(s). The City Loan shall each be loaned pursuant to the terms and
conditions described in this Agreement.
3.2.1 Terms and Conditions. The City Loan shall be evidenced by the City Loan
Promissory Note in favor of City for the full amount of the City Loan. All payments of principal and
interest on the City Loan will be residual receipts in nature as described in the City Loan Promissory
Note. The term of the City Loan and interest accrual shall commence upon the date of the City Loan
Promissory Note and mature Fifty-�ve (55)years therefrom. The City Loan shall bear simple interest
at Three(3%)per annum.
The City Loan Promissory Note shall be secured by the City Loan Deed of Trust which
shall be recorded on the Property. The City Loan Deed of Trust shall be a lien on the Property which
shall be junior only to City Declaration of Affordability Restrictions,deeds of trust securing the private
financing, and any security documents required by the state and/or federal Low-Income Tax Credit
Program or the CDBG DR-MHP.
Subject to Section 11.3.3 of this Agreement, the City Loan Promissory Note shall not
be assumable by the successors and assigns of Developer,or other party authorized by this Agreement
without the prior written consent of the City, whereby such consent shall not reasonably be withheld.
3.3 Prepayment of Citv Loan. Developer, or other party authorized by this Agreement,
including any successors and assigns, may pay in full, or any part of, the City Loan, prior to the due
date without penalty.
3.4 Citv Additional Financing Terms. Subject to the notice and cure rights set forth in
Section 13.1, the full amount of the City Loan, including principal and all accrued interest, sha(1
become immediately due and payable upon the occurrence of any of the following:
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a G_c �6
a) Developer's failure to proceed with and complete the Project in accordance
with the Schedule of Performance; or
b) Developer abandons or substantially suspends construction of the Project for a
period of three (3) months after written notice of such abandonment or
suspension from the City;
c) Developer fails to utilize the Property for the Project within the timeframe set
forth in the Schedule of Performance or as authorized in writing; or
d) Developer fails to comply with the affordability covenants set forth in this
Agreement and the exhibits to the Agreement.
e) Other material breach of this Agreement following expiration of applicable
notice and cure periods.
3.5 Other Financin�. Developer shall obtain private financing, LIHTC Program financing
and other financing which, when combined with the City Assistance shall be sufficient for the
completion of the Project and its operation in conformity with this Agreement.
It is further anticipated that Developer shall complete the processing requirements for any other
financing on behalf of the Project and according to the time line stated in the Schedule of Performance.
Developer shall provide to the City evidence of such private and other financing firm commitments no
later than one year from the effective date of this agreement, unless otherwise approved by the City
Manager or their designee.
3.5.1 Approval of Other Financin� Commitments. Developer shall provide to City
for review and approval evidence of a firm and binding cornmitment for any private financing
necessary for the Project pursuant to the time specified in the Schedule af Performance. Such
commitments shall be subject only to reasonable conditions of the Lender necessary to assure the value
and security of its loan. Such commitments shall not be subject to conditions which require amendment
of this Agreement or other agreements between Developer and City without City approval. Said
commitments shall be, in the aggregate, in a total amount sufficient to complete development of the
Project as provided in the Project Budget and to fulfill all other obligations of this Agreement.
3.5.2 Cit��proval of Private Financing Security Documents. All non-City
financing security documents shall be in a form and substance so as to be considered within the
convention set by generally accepted commercial lending practices and shall be acceptable to the City
and their lega(counsel,which acceptance shall not be unreasonably withheld, conditioned or delayed.
Any non-City financing security documents for the Project shall comply with this Agreement.
3.6 Limitation on Encumbrances. Prior to the completion of the Project, Developer shall
not engage in any financing or any other transaction creating any encumbrance or lien on the Property,
whether by express agreement or operation of law, except to obtain funds to be used only for actual
costs of the Project including construction short-term financing and subsequent permanent financing
along with other expenditures necessary and appropriate to develop the Property in accordance with
this Agreement. Developer shall notify the City in advance of any proposed financing to be secured
by the Property. In any event, Developer shall promptly notify City of any encumbrance or lien that
has been created on or attached to the Property. If Developer is not in default of this Agreement, and
if City approves all of the private financing documents, including the terms of any subordination
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP I' �� ;;r �'7
agreement,which approval shall not be unreasonably withheld, City will subordinate its Deed of Trust
to the lien of a construction deed of trust and permanent deed of trust, for such financing.
3.7 Provisional Refinancin�. Developer may, without City consent which consent shall
not be unreasonably withheld, conditioned or delayed, refinance any indebtedness secured by an
encumbrance which is superior to the City's Deed of Trust,provided that the refinanced encumbrance
shall have the following characteristics:
3.7.1 Amount. The refinanced encumbrance shall not secure indebtedness in a dollar
amount greater than the balance owed on the indebtedness plus reasonable costs related to the
refinancing to which the City's interest was originally subordinated.
3.7.2 Debt Service. The debt service of the refinanced indebtedness shall be an
amount which does not exceed the amount of the debt service of the indebtedness to which the City's
interest was originally subordinated.
3.7.3 No Monies to Develo�er. Developer shall receive no fees or monies as a result
of the refinancing of the indebtedness of the Project unless otherwise approved by the City which
approval shall not be unreasonably withheld, conditioned or delayed.
3.7.4 Subordination Agreement. Subject to City approval, which approval shall not
be unreasonably withheld, upon request, City shall execute any document reasonably required to
evidence the subordination of the City Loan Deed of Trust to a permitted indebtedness including
construction short-term financing to permanent loan or refinancing. City shall allow the Declaration
of Affordability Restrictions to be recorded on the Property junior only to 1)the lien of the construction
lender securing funds for construction of the Project; 2} the lien of a pennanent loan so long as the
permanent loan is for an arnount not greater than the amount due and owing by the Developer pursuant
to the construction loan plus customary fees and costs payable for the benefit of the permanent lender
in connection with the permanent loan and upon satisfaction and release and reconveyance of the deed
of trust securing repayment of the construction loan; and 3) such regulatory agreement as may be
required by the LIHTC Program. In the event a subordination agreement meets these requirements,
the City Manager shall be authorized to execute the subordination agreement on behalf of the City
without additional authorization by the City Council.
3.8 Assurances to Lenders. City and Developer shall in good faith consider making such
reasonable modifications to this Agreement and executing such further instruments and agreements as
a Lender secured by an interest in the Property may reasonably request to acknowledge and protect
such Lender's rights, provided such modifications, instruments and agreements do not materially or
adversely affect any party's rights or obligations under this Agreement and provided such
modifications, instruments, and agreements serve a material economic purpose. In conjunction with
any financing City agrees to execute, and deliver to Developer, when requested by Developer, an
Estoppel Certificate regarding the status of this Agreement. This certificate will be in substantially the
same form as it appears in Exhibit 11 and delivered to the Developer within 10 business days after
receipt of the written request for the certificate.
3.9 Na Reimbursement. Except as expressly provided in this Agreement, no person shall
have the right of reimbursement from the City for any funds expended by them for the Project. This
provision does not preclude any person from receiving reimbursement from persons other than the
City.
4. DISBURSEMENT OF CITY ASSISTANCE ESCROW• RECORDATION OF SECURITY
DOCUMENTS.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a �� c �8
4.1 Disbursement of Proceeds from City Loan(s). Upon execution and recordation of the
City Loan Deed of Trust, a portion of the proceeds of the City Loan shall be disbursed to Developer
by the City for payment of authorized title and escrow costs associated with the recording of the City
Loan Deed ofTrust. Alternatively, the Developer may choose to pay all title and escrow charges
utilizing non-City resources. Following the disbursement of these funds, any balance remaining of
the City Loan may be utilized by Developer for authorized infrastructure and/or construction costs
associated with the Project that are incurred by Developer which will be disbursed through the City's
Finance Division pursuant to Section 6.2.
4.2 Compliance Monitoring Fees. Developer will be charged a reasonable fee for
compliance monitoring. The Monitoring fee will be paid by the closing of the LIHTC financing period
by the Developer. The fee is based upon the average cost of the City of Redding performing the
required monitoring of CDBG-DR-assisted approved projects through the period of affordability. The
basis for the fee is documented and the fee must be included in the costs of the project as part of the
project. The current compliance monitoring fee is a one-time $20,000 fee per project and will cover
the required monitoring for the minimum 20-year affordability term.
5. PREPARATION OF PROJECT PLANS AND RELATED DOCUMENTS.
5.1 Project Coordinator. Subject to the terms of this Agreement,the City shall designate a
Project Coordinator who shall,in addition to other responsibilities under this Agreement,have the right
of architectural and site planning review of all plans and drawings, including, but not limited to
complete structural and engineering plans, and landscape plans associated with the Project as well as
any changes therein.
5.2 Preparation of Project Final Plans. In accordance with the time line set forth in the
Schedule of Performance, the Developer shall prepare the Final Plans. The Final Plans shall include
all construction plans, drawings, specifications and other documents required to obtain the required
building permits for the construction of the Project. The Final Plans shall conform in all material
aspects with the Scope of Development, unless otherwise approved by the Project Coordinator.
The Project Coordinator and the Developer shall hold regular progress meetings as
necessary to coordinate the preparation, submission and review of the Final Plans. The Project
Coordinator and the Developer shall communicate and consult informally to ensure that the formal
submittal of all or any part of the Final Plans to the City can receive prompt consideration.
5.3 Review of Project Final Plans. Developer shall provide the Project Coordinator with a
complete set of Final Plans for the Project prior to or concurrently with the initial submittal of the Plans
to the City's Building Division. The Final Plans shall be accepted by the Project Coordinator, if a)the
Plans conform in all material respects to the Scope of Development and this Agreement, and b) no
Substantial Changes, as hereinafter defined, have been made.
5.4 Review af Substantial Chan�es to Proiect Final Plans.
5.4.1 Citv Review. Notwithstanding the foregoing, any Substantial Change in the
Final Plans is subject to City review. If the Developer desires to make a Substantial Change in the
Final Plans, the Developer shall submit such proposed change, in writing, to the Project Coordinator
for review.
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City of Redding and Piper Way Seniar Housing,LP P a �c �9
5.4.2 Substantial Chan�e. A Substantial Change in the Final Plans shall mean any
of the following changes, with respect to the Project:
(a) "Change Order" as previously defined in Section 1.5.
(b) Changes in size or design resulting in an increase or decrease of greater
than ten percent(10%)of square footage of a unit or an increase or decrease in the number of bedrooms.
(c) Changes in use or the mix of Units or Changes in the number of Units.
(d) Changes in use of exterior finishing or landscape materials
substantially affecting architectural appearance or functional use and operation of the Project.
(e} Material changes in size or placement of public service facilities; or
material changes in general pedestrian or vehicular circulation in, around or through the Public areas
of the Project.
(fl Any changes required by or requiring approval of the City of Redding,
the County of Shasta, or any state or federal board, body, or commission.
(g) Any change which would preclude or materially reduce the ability to
use the Project as set forth in the Final Plans and this Agreement.
5.5 Purpose of Review, Project Coordinator's review of Final Plans and any Substantial
Changes is not an assurance of the adequacy or correctness of the Plans. Project Coordinator has
reserved review rights to: a) assure that the Final Plans conform to the Scope of Development and the
requirements of this Agreement; and b) assure that City funds which may be obligated under this
Agreement are used as intended by the City.
5.5.1 Misrepresentation_ If Project Coordinator's approval of the Final Plans or the
changes to the Final Plans delivered to the City is based upon a willful and material misrepresentation
of Developer made in conjunction with the Final Plans or changes to the Final Plans, nothing in this
Section shall be construed to preclude or limit the rights or claims of the City with regard to such
misrepresentations, including any rights the City may have to rescind such approval.
6. DEVELOPMENT OF THE PROJECT.
6.1 Project Bud�et. At the times called for in the Schedule of Performance,the Developer
shall provide a complete final Project Budget in a form and with specificity reasonably satisfactory to
the Project Coordinator,including all"hard"and"soft"costs for the Project and reflecting,as possible,
executed contracts. The final Project Budget will include a final construction bid from the Project's
Contractor. All Project costs that are not part of the Contractor's construction bid shall be listed
separately as line items in the final Project Budget. Such final Project Budget shall be substantially in
conformance with the Preliminary Project Budget. Reductions in total Project cost that occur as a
result of competitive bid solicitation by the Contractor, are encouraged and shall be considered
substantially in conformance with the Preliminary Project Budget.
6.2 Disbursement of Remainina Proceeds of City Loan(s). The parties agree that upon
recording of the City Loan Deed of Trust as described in Section 4.1, the remaining proceeds of the
City Loan not previously expended will be controlled by the City's Finance Department or upon City
Manager approval, a construction account controlled by the lenders. Each and any disbursement of
funds from such account shall require a written authorization signed by the Project Coordinator
authorizing the release of the requested disbursement. The Project Coordinator shall provide such
written approval within ten(10) business days of receipt of the request from Developer.
Development Agreement Be[ween
City of Redding and Piper Way Senior Housing LP i' a ,, c �10
6.2.1 Disbursement during Construction. Prior to any disbursement for
construction, the Project Coordinator, Developer and Contractor shall develop a mutually agreeable
disbursement format. This format shall include certifications from the Project Coordinator,Developer
and Contractor that all materials and construction included in the request for disbursement are
consistent with approved final Project Specifications and supplemental specifications and that all
materials have been delivered to either the Property or installed and inspected as required. All
disbursements shall be based on a percentage of completion and all disbursements shall reflect ten
percent (10%) retention not including the costs of stored materials. {Retention shall be released
following the recording of the Notice of Completion and completion of the 30-Day mechanics lien
period.)
The proceeds of the City Loan shall be disbursed in accordance with the mutually
agreed upon draw schedule described above. Disbursement shall be based upon satisfaction af the
construction component upon which the draw request is based as determined in good faith by the
Project Coordinator. Disbursements shall not exceed aggregate amounts set forth in the accepted and
approved construction contract(s)for the Project. Developer and City acknowledge that it shall be the
sole responsibility of the Developer to obtain the required written authorization for any request for
disbursement.
6.3 Developer Fee. It is expressly agreed and acknowledged that the parties mutually are
entering into this Agreement (including without limitation all attachments and exhibits hereto)for the
purpose of the development and operation of affordable housing. To that end, the Developer is
authorized to charge to the Project budget a developer fee not to exceed the maximum amount
allowable under the LIHTC Program. Developer agrees that, if necessary to facilitate the construction
of the Project,all or a portion of the developer fee shall be considered a"Deferred Developer Fee"and
shall be provided by the Developer as part of the Project's development budget and be available as
needed, during construction of the Project. It is hereby agreed that any cost savings realized during
construction shall first be applied to pay back to Developer the amount of the Deferred Developer Fee.
Any balance owed to the Developer, remaining after all construction costs savings are realized, may
be repaid to the Developer from allowable residual operating cash. The non-deferred portion of the
developer fee amount may be utilized by the Developer in any manner permitted by law. The
Developer fee will be funded solely by the LIHTC program.
6.4 Procurement. The Developer shall coordinate the solicitation of bids with the General
Contractor based upon the Final Plans. Developer and General Contractor shall obtain a minimum of
three bids per subcontractor and, to the greatest extent possible, utilize local suppliers and
subcontractors frorn within Shasta County. The General Contractor will comply with the applicable
procurement requirements in 24 CFR Part 85. The Project Coordinator will coordinate with the
Developer and provide the required documents to complete the bid procurement process. The Project
Coordinator will complete a cost analysis and ensure that the bids are cost reasonable and conform to
the proposed budget. The Project Coordinator's cost analysis includes initial subcontract bids,contract
modifications and change orders.
The f`inal construction bid from the Contractor must have all non-construction categories,
including, but not limited to, general conditions; profit and overhead; and permits, clearly identified as
separate line items.
6.5 Construction. Developer shall construct the Project according to the requirements
established in this Agreement, including but not limited to the Scope of Development, Schedule of
Performance and the Fina( Plans. In the event that the cost of construction of the Project, or any part
of the Project exceeds the costs projected by Developer, Developer shall, nevertheless, bear the
responsibility to complete, at Developer's cost and without right of contribution from City, the
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP I' a s c �I1
construction of the Project in accordance with this Agreement. The parties agree that such obligations
of Developer shall be covenants running with the land and that they shall, in any event, and without
regard to technical classification or designation, be to the fullest extent permitted by law and equity,
binding for the benefit of the City and enforceable by the City against the Developer, its successors
and assigns. These covenants shall terminate upon the City issuing a Certificate of Completion for the
Project.
6.6 Substantial Chan,�es. Developer covenants and agrees that Developer shall not make
or per►nit to be made any construction of the Project which incorporates a Substantial Change in the
Project Final Plans, as described in subsection 5.42,without City review of such changes as provided
in that section.
6.7 Chan�es durin� Construction. Developer shall, prior to their occurrence, notify the
Project Coordinator of all Substantial Changes (as that term is defined in subsection 5.42) in the
construction as well as changes which result in a material net increase in cost or may extend the period
of construction beyond the Completion Date. To the extent feasible, the Developer agrees to submit
all proposed Change Orders to the Project Coordinator for review and approval prior to
implementation.
6.8 Payment and Performance Bonds. As part of the construction contract for the Project,
Developer shall require the general Contractor to obtain payment and pei-formance bonds in favor of
the City for one hundred percent (100%) of the face amount of the construction contract price unless
other security approved in advance by the City. All bonds shall be issued by a corporate surety
authorized by the State of California. All payment and performance bonds are to be submitted to the
Project Coordinator to complete the City Attorney approval process. City Attorney approval is a
condition precedent to the Developer starting construction.
In the event that the City Loan Deed of Trust is recorded prior to the closing of private
financing for the development of the Project and Developer intends to utilize City Loan proceeds to
construct the infrastructure improvements that are a part of the Project,this Section 6.8 shall be deemed
satisfied if Developer, or the general contractor obtain payment and performance bonds in favor of the
City for one hundred (100%) of the face amount of the construction contract price for such
infrastructure improvements.
Notwithstanding anything to the contrary contained herein, Developer shall not
commence construction on any component of the Project until payment and performance bonds
meeting the requirements of this Section 6.8 have been obtained for such component.
6.9 No Construction over Utility Easements. Developer shall not construct any of the
Project on, over, or within the boundary lines of any easement for public utilities on the Property,
unless such construction is provided for in such easement or has been approved by the beneficiary of
the easement.
6.10 Conditions Precedent to Construction. The Developer shall not begin construction
until the following conditions precedent have been satisfied or waived by the City:
6.10.1 The City Loan Deed of Trust has recorded pursuant to the terms of this
Agreement;
6.10.2 The Developer has submitted payment and performance bonds as required by
Section 6.8 of this Agreement to the City and the City Attorney has approved the bonds.
Development Agreement Be[ween
City of Redding and Piper Way Senior Housing,LP P n �_ � �IZ
6.10.3 The Developer has obtained all consents, approvals, entitlements, and permits
required for construction, including any and all environmental approvals and/or clearances required by
any Project Lender;
6.10.4 The City has reviewed the construction bid documents, construction contract
and final selection of the Contractor for the Project.
6.10.5 The Developer has obtained the proper building permits from the City;
6.10.6 The Developer has requested a notice to proceed from the City, and the City
has notified the Developer in writing that it may proceed with construction; and
6.10.7 The Developer has issued a notice to proceed under the executed construction
contract, if any.
6.10.8 The Developer has cured all existing breaches of this Agreement to the
satisfaction of the City.
6.10.9 The Developer has paid the monitoring fee pursuant to 4.2 of this agreement.
6.11 Commencement and Completion of Construction. Developer shall promptly begin and
thereafter diligently pursue to complete the construction of the Project and the development of the
Property in accordance with the provisions of this Agreement and at the times specified in the Schedule
of Performance; and complete construction not later than the date set forth in the Schedule of
Performance, unless otherwise approved by the City. Time is of the essence.
6.12 Reports. During the period of construction, the Developer shall submit to the City a
written report of the progress of the work when reasonably requested by the City, but not more often
than once each month. The report shall be in such form and detail as may reasonably be required by
the City and shall include a reasonable number of construction photographs taken since the last report
if previously requested by the City.
6.13 Local, State and Federal Laws. The Developer shall carry out the construction of the
Project in conformity with all applicable laws,including all applicable federal and state labor standards.
6.14 Anti-Discrimination during Construction. The Developer for itself and its successors
and assigns, agrees that the following provisions shall apply to, and be contained in all contracts and
subcontracts for the construction of the Project. (For purposes of this Section 6.14 Developer shall also
mean Contractor or Subcontractor.)
6.14.1 Emplo„yment. The Developer shall not discriminate against any employee or
app(icant for employment because of race,color,religion,creed,age,disability,sex,sexual orientation,
marital status, ancestry or national origin. The Developer shall ensure that applicants are employed,
and that employees are treated during employment, without regard to their race, color, religion, creed,
age, disability, sex, sexual orientation, marital status, ancestry or national arigin. Such action shall
include, but not limited to, the following: employment, upgrading, demotion or transfer; recruitment
or recruitment advertising; layout or termination; rates of pay or other forms of compensation; and
selection for training, including apprenticeship. The Developer agrees to post in conspicuous places,
available to emplayees and applicants for employment, notices to be provided by the City setting forth
the provisions of this nondiscrimination clause.
6.14.2 Advertisin�. The Developer will, in all solicitations or advertisements for
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a ���• �13
employees placed by or on behalf of the Developer, state that all qualified applicants will receive
consideration for employment without regard to race, color, creed, religion, sex, marital status, or
national origin.
6.15 City Access to the Property. Deve(oper shall permit City representatives' access,
without charge,to the entire Property at any time and for any purpose which City reasonably considers
necessary to carry out its obligations and protect its interests under this Agreement. Purposes for City
entry may include, without limitation, inspection of all work being performed in connection with the
construction of the Project. Any City personnel entering on the Property shal( register immediately at
Developer's construction office, shall be escorted by Developer's designee and shall wear proper
clothing and safety equipment. City assumes all liability and responsibility for failure of its
representatives to comply with such requirements and for any injury to person or damage to property
arising out of or related to the presence of City personnel on the Property. At Developer's request,
City shall provide evidence that such representatives are adequately insured.
6.16 Notification of Contractors, Architects and En i�rs. Developer shall notify its
Project Contractors, architects and engineers in writing of the requirements of this Agreement.
Developer shall include, where applicable, the provisions of this Agreement in contracts and
subcontracts for the Project, and Developer shall enforce such provisions.
6.17 Supervision of the Work. Developer shall be solely responsible for monitoring all
construction, ensuring that the construction is performed in a workmanlike manner, and enforcing the
terms of this Agreement and the construction contracts. City inspections of construction are made
solely for assuring Developer's performance under this Agreement and protecting City's security
interest in the Property.
6.18 Certificate of Completion. After the Certificate of Occupancy has been issued by the
City's Building Division and the Project Coordinator has determined that the Developer has completed
the Project in accordance with Developer's obligations under this Agreement,the Project Coordinator
will coordinate with the Developer to execute and record a Notice of Completion. Following the Notice
of Completion 30-Day lien period,the City will furnish the Developer with a Certificate of Completion
certifying such completion. Such certification shall be a conclusive determination of satisfaction and
termination of the agreements in the Agreement with respect to the obligations of the Developer to
construct the Project and of the dates for the commencement and completion of construction, subject
to any qualifications or limitations stated in such certification. Such certification and such
determination shall not constitute evidence of compliance with or satisfaction of any governmental
requirements other than City or any obligation of the Developer to any holder of a mortgage, or any
insurer of a mortgage, securing money loaned to finance all or any part of the Project.
6.18.1 Refusal to Issue. If the City shall refuse or fail to provide a Certificate of
Completion, the City shall, within five (5} Days after written request by the Developer, provide the
Developer with a written statement, indicating in adequate detail in what respects the Developer has
failed to complete the Project in accordance with the provisions of the Agreement, or is otherwise in
default, and what measure or acts it wil( be necessary, in the opinion of the City, for the Developer to
take or perform in order to obtain such certification.If the City wrongfully refuses to issue a Certificate
of Completion,or upon passage of the five(5)business day period,Developer may seek a writ or order
compelling City to issue the Certificate.
7. USE OF PROJECT PROPERTY
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP I' �i � r �14
7.1 Uses. The Developer covenants and agrees for itself, its successors, its assigns and
every successor in interest to the Property, that during construction and through the Affordability
Period the Developer, its successors and assigns, shall devote, use, operate, and maintain the Property
in accordance with the Declaration of Affordability Restrictions and this Agreement. All uses
conducted on the Property, including, without limitation, all activities undertaken by the Developer
pursuant to this Agreement,shall conform to all applicable provisions of the City of Redding Municipal
Code, and any restrictions of record or any of the recorded documents against the Property.
7.2 Affordable HousinQ.
7.2.1 Number and Type of Units• Income Eli ibilit� The Developer agrees to
develop an affordable rental housing developinent that will include 60 apartment style units,consisting
of 59 one-bedrooms, 1 two-bedrooms(manager's unit)and no three-bedroom units and common areas
with infrastructure to support the housing development. The rental housing units(except the manager's
unit)will be restricted as follows: 17 units for tenants with incomes not exceeding 60 percent of AMI,
18 units for tenants with incomes not exceeding 50 percent of the AMI, 18 units for tenants with
incomes not exceeding 45 percent of the AMI, 6 units for tenants with incomes not exceeding 30
percent of the AMI and no units for tenants with incomes not exceeding 25 percent of the AMI.
Additional Project detail is further described and provided in this Agreement, the Scope of
Development and the Project Final Plans. All work shall be completed as specified in this Agreement,
the Declaration of Affordability Restrictions and the Final Plans. All of the Affordable Units shall be
subject to the most restrictive rent limitations as required by the LIHTC Program, the City's
Declaration of Affordability Restrictions and/or any other rent limitations as provided by any other
funding source.
�.2.2 Affordability Restrictions. The City Declaration of Affordability Restrictions
shall evidence the affordability restrictions required by the CDBG-DR MHP as Exhibits 2C and 2D.
The covenants contained in the Declaration of Affordability Restrictions shall remain
in effect throughout the Affordability Period, and issuance of a Notice of Completion by the City shall
not affect the Developer's obligations under those documents.
7.3 Management and Maintenance. The Developer shall manage and maintain, or cause
to be managed and maintained, the Project. The Developer shall maintain the Property in good
condition throughout the Affordability Period. The Developer shall keep parking areas, lighting
fixtures, trash enclosures, and all areas which can be seen from adjacent streets, free from any
accumulation of debris or waste materials by regularly scheduled maintenance. The Developer shall
maintain the planted areas and all landscaping, in accordance with the landscape plan, for the term of
the Affordability Period. Maintenance shal( include,but not be limited to watering,weeding,mowing,
cultivating, pruning, staking and tying, trash pick-up and removal, and repairing any damage caused
by pedestrian or vehicle encroachment into the planting and/or turf areas.
If at any time the Developer fails to maintain such areas in the manner required pursuant to this
Agreement, and said condition is not corrected within the time set forth in Section 13.1 upon written
natice by the City pursuant to Section 14.9 of this Agreement,the City may, but shall not be obligated
to, perform the necessary maintenance and the Developer shall pay such costs as are reasonably
incurred for such maintenance, together with interest at the maximum lawful rate until full payment is
made to the City. The monies expended by the City shall become a lien against the Property and the
Developer hereby consents to the recordation of such lien without prior notice by City to Developer.
Said lien shall be junior and subordinate to deeds of trust for financing or refinancing of the Project as
allowed pursuant to this Agreement.
Development Agreement Between
Ciry of Redding and Piper Way Senior Housing LP P a �� �15
Notwithstanding the above,the City reserves for itself the right to exercise any and all remedies
available to it under this Agreement and the Deeds of Trust securing the City's rights under this
Agreement.
8. COVENANTS REGARDING USE AND OPERATION OF THE PROJECT AND
PROPERTY.
The Developer covenants and agrees for itself, its successors, its assigns and every successor-
in-interest to all or any part of the Property that the Developer, such successors and such assignees
shall act as follows:
8.1 Nondiscrimination.Developer, its successors and assigns,shall not discriminate on the
basis of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or
national origin in the sale, lease or rental or in the use or occupancy of the Property and the Project.
$.2 Fair Housin�. The Fair Housing Act(42 U.S.C. 3600, et seq.)prohibits discrimination
in the sale, rental, and financing of housing because of race, color, religion, sex, handicap, familial
status, or national origin. Section 804(c), as amended, makes it unlawful to make, print, publish, or
cause to be made,printed or published,any notice,statement, or advertisement,with respect to the sale
or rental of a dwelling, that indicates any preference, limitation, or discrimination because of race,
color, religion, sex, handicap, familial status, or national origin, or an intention to make any such
preference, limitation, or discrimination.
All advertising of the Units shall contain an equal housing opportunity logotype,
statement, or slogan as a means of educating the home-seeking public that the property is available to
all persons regardless of race, color, religion, sex, national origin, familial status, or disability. A Fair
Housing poster(Exhibit 10) must be prominently displayed at rental offices and project sites from the
beginning of construction through occupancy, or in front of the existing multifamily building. The
Fair Housing poster shall be 11 inches by 14 inches (24 CFR 110.25). A failure to display a Fair
Housing poster as required shall be deemed prima facie evidence of a discriminatory housing practice
(24 CFR Part 110.30).
8.3 24 CFR Section 8.4. Develaper shall comply fully with 24 CFR Section 8.4 that
provides that no qualified individual with a disability shall, only by reason of his or her disability, be
excluded from the participation in, be denied the benefits of, or be subject to discrimination under any
program or activity receiving Federal financial assistance.
8.4 Payment of Taxes, Assessments, Encumbrances and Liens. The Developer shall pay
prior to delinquency all real estate taxes and assessments assessed and levied on the Property, at all
times. The Developer shall not allow to be placed on the Property any mortgage, trust deed,
encumbrance or lien other than such deeds of trust as the Developer may grant to secure construction
or other financing related to the development of the Property unless expressly authorized by this
Agreement or the City. The Developer shall promptly remove or satisfy any levy or attachment made
an all or any part of the Property. Nothing contained in this Agreement shall prohibit the Developer
from reasonably contesting the validity or amounts of any tax assessment,encumbrance or lien, nor to
limit the remedies available to the Developer in respect to such contest.
8.5 Effect and Duration of Covenants. It is intended and agreed that the agreements and
covenants provided in the Declaration of Affordability Restrictions shall be covenants running with
the land and equitable servitudes thereon for the duration of the Affordability Period and that they
Development Agreement Beriveen
City of Redding and Piper Way Senior Housing,LP P a �� � �1G
shall, in any event, and without regard to technical classifications or designation, be binding, to the
fullest extent permitted by law and equity, for the benefit and in favor of,and enforceable by,the City,
the City's successors and assigns, any other governmental entity acting within its authority and any
successor in interest to all or any part of the Property against the Developer, its successors and assigns
and every successor in interest to all or any part of the Property, and any party in possession or
occupancy of the Property and any subcontracting party or parties or other transferees under this
Agreement.
8.6 Effect of Violation. The City is deemed the beneficiary of the terms and provisions of
this Agreement,the Declaration of Affordability Restrictions,and the covenants running with the land,
both for its own rights and for the purposes of protecting the interests of the community and other
parties, public or private, in whose benefit this Agreement and the covenants running with the land
have been provided. The Agreement, the Declaration of Affordability Restrictions, and the covenants
shall run in favor of the City without regard to whether the City has had or does have any interest in
the Property.
9. INDEMNIFICATION AND WAIVER.
9.1 Developer hereby agrees to protect, defend, indemnify and hold harmless, City, its
officers, elected or appointed officials, employees, agents and volunteers from and against any and all
claims, damages, losses, expenses, judgments, demands, penalties, fines, defense costs, and
consequential damage or liability of any kind or nature, however caused, arising directly or indirectly
out of the obligations or operations herein undertaken by Developer,but only to the extent such damage
or liability is caused in whole or in part by any act or omission of the Developer, any contractors or
subcontractors of Developer or anyone for whose acts Developer may be liable, including, but not
limited to,concurrent active or passive negligence, except where caused by the active negligence, sole
negligence or willful misconduct of the City or resulting or arising from allegations that the City failed
to administer the program in accordance with applicable law. Developer will conduct all defense at its
sole cost and expense and City shall have right to approve or disapprove legal counsel defending the
City. City shall be reimbursed for all costs and attorney's fees incurred in enforcing this obligation.
This indemnity shall apply to all claims and liability regardless of whether any insurance policies are
applicable,but it is the intent of the parties that nothing in this provision is intended to otherwise reduce
any insurance coverage on any policy of insurance held by the Developer or its subcontractors to which
the City would otherwise be entitled to in the absence of this provision; accordingly the indemnity
obligations hereunder shall not apply to the extent this indemnity would reduce or eliminate existing
insurance coverage that would inure directly or indirectly to the benefit of the City. The policy limits
do not act as a limitation upon the amount of indemnification to be provided by Developer. This
Section 9 shall survive the termination of this Agreement, irrespective of the reason for its termination,
until a date that is ten (10) years following the date the City furnishes the Developer a Certificate of
Completion; provided however that nothing in this provision is intended to extend the statute of
limitations by which any party other than the City can bring their claim.
9.2 In addition to the indemnity provided in Section 9.1, Developer hereby agrees to
indemnify,defend,protect and hold the City harmless from and against any and all liability, damages,
penalties, claims, suits, actions, proceedings, loss, cost or expense (including, but not limited to,
attorney's fees and court costs) arising out of the failure of Developer to comply with the Prevailing
Wage Law (Labor Code section 1720 et seq.) including, but not limited to the payment of prevailing
wages, if required by law in connection with the activities authorized by this Agreement. Developer
further agrees to waive all claims and causes of action it may have against City pursuant to Labor Code
section 1781.
10. INSURANCE REQUIREMENTS AND PUBLIC SAFETY PROTECTIONS.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a �� c �17
Developer shall promptly take steps to protect the public from the risk af injury whether from
the condition of the Property or Developer's activities in connection with the Property. The Developer
shall obtain and maintain, or require the contractor and subcontractors for the Project to purchase and
maintain the following insurance for claims which may result from the operations under the Agreement
of the Developer, any contractor, subcontractor or anyone directly or indirectly employed by any of
them, or by anyone for whose acts any of them may be liable.
10.1 Developer Insurance Requirements. Developer shall procure and maintain for the
duration of the Agreement insurance against claims for injuries to persons or damages to Property
which may arise from or in connection with Developer's activities hereunder. The cost of such
insurance shall be borne by Developer. Developer shall maintain the following noted insurance:
Covera�e Required Not Required
Commercial General Liability X (if Contractor does not carry)
Comprehensive Vehicle Liability X
Workers Compensation and Employee Liability X
Hazard/Builders Risk/All Risks X
10.1.1 Hazard Insurance. Prior to the recording of the City Loan Deed of Trust,
Developer shall provide proof of insurance covering the improvements now existing or hereafter
erected on the Property for full replacement value against loss by fire,hazards included within the term
"extended coverage," and such other hazards as the City may require and in such amounts for the full
remaining term of the City Loan. The City shall be named as a mortgagee and as an additional insured
loss payee on all policy documents.
10.2 Contractor Insurance Requirements. During the course of construction, Developer
shall ensure that the Contractor and Subcontractors maintain the following noted insurance:
Covera�e Re uq ired Not Required
Commercial General Liability X
Comprehensive Vehicle Liability X
Workers Compensation and Employee Liability X
Builder's Risk/Course of Construction X
Hazard/All Risks X
10.3 Minimum Scope and Limits of Insurance. Coverage shall be at least as broad as:
(a) Insurance Services Office form number CG-0001, Commercial General Liability
Insurance, in an amount not less than $1,000,000 per occurrence $2,000,000 general aggregate for
bodily injury,personal injury and property damage;
(b) Insurance Services Office form number CA-0001, Comprehensive Automobile
Liability Insurance, which provides for total limits of not less than $1,000,000 combined single limits
per accident applicable to all owned/non-owned and hired vehicles;
(c) Statutory Workers Compensation required by the Labor Code of the State of
California and Employers' Liability Insurance in an amount not less than $1,000,000 per occurrence.
Both the Workers Compensation and Employers' Liability policy shall contain the insurer's waiver of
subrogation in favor of the City, its elected officials, officers, agents, employees and volunteers;
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a v� � �18
(d) Deductibles and Self-Insured Retentions: Any deductibles or self-insured
retentions, and any modifications thereof, must be declared to and approved by the Risk Manager of
the City of Redding.
10.4 Other Insurance Provisions. The general liability policy is to contain, or be endorsed
to contain, the fo(lowing provisions:
(a) The City, its officers, officials, employees, agents, and volunteers are to be
covered as insured as respects: 1 iability arising out of activities performed by or on behalf of Developer;
products and completed operations of the Developei; premises owned, occupied, or used by the
Developer. The coverage shall contain no special limitations of the scope of protection afforded to the
City, its officers, officials,employees, agents, or volunteers.
(b) Developer's insurance coverage shall be primary insurance as respects the City,
its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained
by the City, its officers, officials, employees, agents, or volunteers shall be in excess af Developer's
insurance and shall not contribute with it.
(c) Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits
except after thirty(30) Days prior written notice has been given to the entity.
(d) All insurance policies and renewals thereof shall be in form acceptable to the City.
Developer shall promptly furnish to City copies of all renewal notices and all receipts of paid
premiums. In the event of loss, Developer shall give prompt notice to the insurance carrier and City.
City may make proof of loss if not made promptly by Developer.
10.5 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M.
Best's rating of no less than A: VII.
10.6 Verification of Covera�e. Developer shall furnish the Risk Manager of the City of
Redding with certificates of insurance and original endorsements effecting coverage required by this
Agreement. The endorsements are to be signed by a person authorized by that insurer to bind coverage
on its behalf. All endorsements are to be received and approved by the Risk Manager of the City of
Redding as a condition precedent to the obligation of the City to disburse funds under this Agreement.
10.7 Failure to Maintain. If Developer fails to obtain or maintain, or cause to be obtained
and maintained, any insurance required by this Agreement, the City shall have the right to purchase
the insurance and Developer shall reimburse the full costs to City of obtaining such insurance.
11. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER.
1 L 1 Prohibition a�ainst Transfer of Ri�hts or ObIi at� ions. City has entered into this
Agreement in reliance upon the identity and qualifications of the Developer. Developer may not assign
or otherwise transfer Developer's rights or obligations under this Agreement without the prior written
consent of City.
11.2 Prohibition a�ainst Transfer of Interest. Developer represent that it is informed, and
Developer shall inform any successors in interest, of the provisions of this Section 11. Subject to
restriction of federal and state securities regulation and prior to issuance of a Certificate of Completion,
Development Agreement 8etween
City of Redding and Piper Way Senior Housing,LP P a �� c �19
Developer shall not permit transfers of ownership which would result in a change in management
authority or fiscal ability with respect to Developer or, with respect to any of the parties in control of
the Developer, by any method or means, including, but not limited to sale, transfer, increased
capitalization, rnerger with another corporation, corporate or other amendments, or otherwise. With
respect to this provision, the Developer represents that it has the authority to agree to and bind
Developer to this provision.
11.3 Transfer or Assi�nment.
11.3.1 Transfer or Assi�nment of Interests, Ri�hts, or Obligations in the Agreement.
Except as required to obtain the financing approved by City, Developer shall not,prior to the issuance
of the Certificate of Completion, make any total or partial sale, assignment or transfer of any interest
in the Agreement without the prior written approval of the City.
11.3.2 Transfer or Assi�nment of Interests in the Property. Except as required to
obtain the financing approved by the City, Developer shall not, prior to the issuance of the Certificate
of Completion, make any total or partial sale, assignment or transfer of any interest in the Property
without the prior written approval of the City.
11.33 One-Time Assignment to Controlled EntitX. Notwithstanding the foregoing,
the City Manager or designee, is hereby authorized to approve, in writing, a one-time assignment by
Developer of all of its rights and obligations under the Agreement,and all of its interest in the Property,
to a limited partnership of which Developer, or its wholly controlled affiliate, is a general partner,and
which shall acquire the Property from the Developer. Such transfer shall be subject to Developer's
compliance with the requirements of this Agreement.
11.3.4 Conditions of Approval. With exception of the assignment described in
Section 11.3.3 hereof, City shall be entitled to require the following as conditions to any approval of
any assignment or transfer of any interest in the Property, the Agreement, or the Developer:
(a) Qualifications and Financial Responsibi(ity. Any proposed transferee
shall have the qualifications and financial responsibility, as determined by City, necessary and
adequate to fulfill Developer's obligations under the Agreement (or, in the event of transfer of a part
of the Property, such obligations to the extent that they relate to such part).
(b) Assumption of Obli at�; ions. Any proposed transferee shall, for itself
and its successors and assigns, expressly assume all of Developer's obligations under this Agreement
and shall agree ta be subject to all the conditions and restrictions to which Developer is subject(or, in
the event the transfer is of or relates to part of the Property,such obligations,conditions and restrictions
to the extent that they relate to such part). Said assumption of obligations shall be in writing in
recordable form approved by City and shall expressly be for the benefit of City. The fact that any such
transferee shall not have assumed such obligations or so agreed, shall not relieve such transferee from
such obligations, conditions, or restrictions, or deprive the City of any rights or remedies or controls
with respect to all or any part of the Property or this Agreement that the City would have had,had there
been no such transfer or change.
(c) Review of Documents. Developer shall submit to the City for review
all legal documents involved in effecting such transfer. Such documents shall be subject to City's prior
written approval.
(d) Limits on Consideration. Prior to issuance of the Certificate of
Cornpletion,the consideration payable for the transfer by such transferee of any interest in the Property
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or the Agreement shall not exceed the actual costs incurred for tlle Project, if any, actually made. It is
the intent of this provision to preclude assignment of the Agreement or transfer of the Property for
profit prior to the completion of the Project.
(e) Other Conditions. Developer and such transferee shall comply with
such other conditions as City may find necessary and reasonable in order to achieve and safeguard the
purposes of the Agreement.
(fl Permitted Transfers. Notwithstanding any other provision of this
Agreement, City approval shall not be required for sale of limited partner interests related to the
syndication of Low-Income Housing Tax Credits, or by the tax credit investor.
(g) Tax Credit E uity Investor. The City agrees and acknowledges that the
development of the Project will be financed in part with proceeds of an equity investment made by one
or more limited partners of the Developer (collectively,the"Limited Partner") in connection with the
allocation of federal and/or state low income housing tax credits to the Developer. Notwithstanding
anything to the contrary set forth in this Agreement, the following provisions shall apply at aIl times
during which a Limited Partner is a partner of the Developer:
(1) Removal of General Partner. The withdrawal, removal and/or
replacement of a general partner(s) for cause in accordance with Developer's Amended and Restated
Agreement of Limited Partnership shall not constitute a default under any of the Loan Documents or
accelerate the maturity of the Loan. If a Limited Partner exercises its right to remove a general partner
of Developer, City shall not unreasonably withhold its consent to the substitute general
partner. Notwithstanding the preceding sentence, the City's consent will not be required if the
substitute general partner is an affiliate of the limited partner. Notwithstanding the foregoing, the
substitute general partner shall assume all of the rights and obligations of the removed general partner
under all of the Loan Documents.
(2) Notice and Cure Rights. The City hereby agrees that any cure
of any default made or tendered by a Limited Partner shall be deemed to be a cure by Developer and
shall be accepted or rejected on the same basis as if made or tendered by Developer. Copies of all
notices which are sent to Developer under the terms of the Loan Docuinents shall also be sent to each
Limited Partner at an address to be provided ta City in writing by said Limited Partner.
(3) Extended Use Agreement. The City acknowledges that
Developer and the California Tax Credit Allocation Committee (CTCAC) intend to enter into an
extended use agreement, which constitutes the extended low-income housing commitment described
in Section 42(h)(6)(B) of the Internal Revenue Code (IRC}, as amended. As of the date hereof, IRC
Section 42(h) (6) (E) (ii) does not permit the eviction or termination of tenancy (other than for good
cause) of an existing tenant of any low-income unit or any increase in the gross rent with respect to
such unit not atherwise permitted under Section 42 for a period of three (3) years after the date the
building is acquired by foreclosure or instrument in lieu of foreclosure. In the event the extended use
agreement required by CTCAC is recorded against the Property, the City agrees to comply with the
provisions set forth in IRC Section 42(h) (6){E) (ii).
(4) Assi�nment of Limited Partner Interests. The interests of
Developer's limited partner shall be transferable to any entity that is directly or indirectly owned or
managed by U.S Bank National Association, without the consent of the City.
11.4 Developer Obli�ations Not Relieved. In the absence of specific written
agreement by the City ta the contrary, no such transfer or approval of transfer by the City shall relieve
the Developer or any other party bound in any way by the Agreement,from any of its obligations under
the Agreement.
Development Agreement Between
City of Redding and Piper Way Senior Housing LP P n � c �21
12. FINANCING DEFAULTS.
12.1 Lender's Option to Cure Defaults. After any default of Developer's obligations under
the Agreement, each Lender (or successor to Lender) shall have the right, at its option, to cure or
remedy such default (or to the extent that it relates to the part of the Property covered by its lien),
within the time for cure allowed to Developer as stated in Section 13.1, and to add the cost of such
cure to the debt and the lien secured by the Property. If the breach or default relates to construction of
the Project, however, Lender shall not undertake or continue the construction of the Project (beyond
the extent necessacy to conserve or protect Project or construction already made) unless Lender
assumes in writing Developer's obligations to complete the Project on the Property in the manner
provided in the Agreement. Any Lender{or successor to Lender)who properly completes the Project
as provided in the Agreement shall be entitled, upon written request made to the City, to receive a
Certificate of Completion from the City in a manner provided in the Agreement. Such certification
shall mean that any remedies or rights with respect to vesting of title to the Property that the City may
have because of Developer's failure to cure any default with respect to the construction of the Project
on other parts of the Property, or because of any other default of the Agreement by the Developer shall
not apply to the part of the Property to which such certification relates.
12.2 Cit 'v s Option to Pay Debt or Purchase Property. If, after Developer's default under
the Agreement and after sixty(60)Days prior written notice from the City,the Lender fails to exercise
its option to construct the Project or undertakes, but does not diligently prosecute to completion,
construction of the Project, City shall have the option, exercisable only by written notice to Lender
within ten (10)Days after expiration of the sixty(60) Day period, to do one of the following:
12.2.1 Pav Debt. City shall be entitled, at its option, to pay to the Lender the amount
of the secured debt and acquire or terminate Lender's secured position.
12.2.2 Deed in Lieu. If title to the Property has vested in Lender by way of a deed in
lieu of foreclosure, City shall be entitled, at its option within sixty (60) Days from notice to City of
Lender's acceptance of such a deed, to a conveyance to it of the Property upon payment to Lender of
an amount equal to the sum of the following:
(a) The secured debt at the time of the deed in lieu of foreclosure (less
application of rentals and other income received during foreclosure
proceedings).
(b) All expenses with respect to the deed in lieu of foreclosure.
(c) The costs of any Project improvements made by Lender.
12.2.3 Foreclosure. City shall have the right to bid at any foreclosure sale held by or
for any Lender on the Property.
122.4 Eminent Domain. Nothing in this Agreement shall limit any exercise of City's
power of eminent domain over the Property.
12.3 City's Option to Cure Loan Default. In the event of a default prior to the completion
of the Project by the Developer, or any successor in interest to Developer by reason of any of its
obligations under any mortgage or other instrument creating an encumbrance or lien upon the Property,
the City may at its option cure such default or breach following the expiration of any applicable cure
period(or sooner upon notice to Developer}, in which case the City shall be entitled, in addition to any
of its other rights or remedies,to reimbursement from the Developer of al(costs and expenses incurred
Development Agreement Beriveen
City of Redding and Piper Way Senior Housing LP !' a t� e �22
by the City in curing such default and to a lien upon the Property for such reimbursement, provided
that any such lien shall be subject always ta the lien of any existing liens on the Property authorized
by this Agreement including, but not limited to, any construction financing.
12.4 Lender and Pro�ertX. For the purposes of the Agreement, the term "Lender" shall
include all holders of any lien or encumbrance as security for a loan made to the Developer on all or
any part of the Property and references to the Property shall mean that portion of the Property so
encumbered.
13. DEFAULTS AND REMEDIES.
The provisions of this Section 13 are in addition to any provisions in the City Loan Deed of
Trust regarding default and remedies. Subject to any extension of time permitted by this Agreement,
a failure or delay by a party to perform any term or provision of this Agreement constitutes a default
of this Agreement.
13.1 Cure. Except as otllerwise provided in this Agreement, if either party shall default in,
or breach, this Agreement, such party shall cure such default or breach within thirty (30) Days after
receipt of such written notice from the other party of such default or breach or, if such default or breach
cannot be cured within such thirty (30) day period the defaulting party shall commence cure of such
default or breach within thirty (30) days of recent notice from the other party and diligently pursue
cure until its completion. If the defaulting party does not cure or demonstrate to the reasonable
satisfaction of the other party that it has acted and continues to act promptly and diligently to cure the
default within such time, the aggrieved party may declare an "Event of Default" and institute
proceedings to cure and remedy such default or breach, including, but not limited to, proceedings to
compel specific performance by the party in default. While neither party is relieved of any obligation
under this Agreement to give notice,mere failure to notify the other party shall not be deemed a waiver
of the defaulting party's default. Notwithstanding anything to the contrary contained herein,City shall
provide a copy of any notice delivered pursuant to this Section 13.1 to Develaper's limited partner and
shall accept cure from such limited partner on the same terms as though such cure was tendered by the
Developer.
13.2 Termination Prior to Completion of Construction.
13.2.1 Termination bv Cit� If, prior to completion of construction of the Project by
Developer and without City approval, Developer assigns any interest in the Agreement or the Property
(other than as permitted in this Agreement),permits a change in the ownership or control in Developer
in violation of this Agreement, or fails to perform any obligation under the Agreement,then City may
elect to declare an Event of Default and terminate, subject to the applicable notice and cure periods
provided in Section 13.1. In such event,the City reserves all remedies for any damages incurred.
13.2.2 Termination by Develo�er., If, prior to completion of construction of the
Project by Developer, City fails to perform any obligation under the Agreement, then Developer may
elect to declare an Event of Default and terminate, subject to the cure period provided in Section 13.1.
In such event, Developer reserves all remedies for specif`ic performance and/or any damages incurred.
In no event shall the failure by the City to approve the Project or any Project Plans for the Project be
deemed a default by the City.
13.3 Other Rights and Remedies of City. City shall have the right to institute such actions
or proceedings as it may deem desirable to carry out the purposes of this Section 13, including the right
to record in the public land records a written declaration of the termination of all the rights of the
Developer in the Property provided by this Agreement.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a �� � �23
13.4 No Waivin�y Delav. Any delay by a party in asserting any rights under this Section
13 shall not operate as a waiver of such rights or to deprive such party of, or lirnit, such rights in any
way. Any waiver in fact made by a party with respect to any specific default shall not be considered
as a waiver of the rights of such party with respect to any other defaults or with respect to the particular
default except to the extent specifically waived in writing.
13.5 Delav for Causes bevond Control of Part,y. For the purposes of any of the provisions
of the Agreement, neither City nor Developer shall be considered in breach of, or default in, its
obligations with respect to the Property or the Project, or the beginning, prosecution and completion
of construction of the Project, if delay in the performance of such obligations is due to causes beyond
the delayed party's control and without its fault or negligence including, but not limited to,acts of God,
acts of a public enemy, acts of any federal, state or local governmental body or City, delays in
availability, procurements or delivery of adequate materials, equipment, supplies or personnel which
are outside the control of Developer, acts of the other parties, fires, floods, epidemics, discovery of
protected species or historical artifacts upon the Property, discovery of pre-existing hazardous
materials, quarantine restrictions, strikes, freight embargoes, a general moratorium on financing for
projects of the same type, and unusually severe weather (as for example, floods, tornadoes, or
hurricanes) or delays of subcontractors due to such causes. In the event of the occurrence of any such
enforced delay, the time or times for performance of such obligations of the City and Developer shall
be extended for the period of the enforced delay, provided that the party seeking the benefit of the
provisions of this Section shall, within thirty (30) Days after the party has or should have knowledge
of any such enforced delay, have first notified the other party, in writing, of the delay and its cause,
and requested an extension for the period of the enforced delay. In no event,however, shall any period
of enforced delay exceed ninety (90} Days if the party claiming enforced delay has not demonstrated,
to the reasonable satisfaction of the other party, that it has acted and continues to act promptly and
diligently, to the extent reasonably possible, to terminate such enforced delay.
13.6 Ri�hts and Remedies Cumulative. The rights and remedies of the parties to the
Agreement shall be cumulative, and the exercise by either party of any one or more of such remedies
shall not preclude the exercise by it, at the same or different times, of any other such remedies for the
same default or breach or of any of its remedies for any other default or breach by the other party.
Further, the remedies set forth in the City's Deed of Trust shall not be canstrued as being limited by
the terms and conditions set forth in this Agreement and shall be available to the City without
restriction. No waiver made by either such party with respect to the performance of any obligation of
the other parties or any condition to its own obligation under the Agreement shall be considered a
waiver of any rights beyond those expressly waived in writing.
14. GENERAL PROVISIONS.
14.1 Time for Actions. City and Developer shall each do the actions required of them, on
or before the times specified in this Agreement. Unless otherwise provided, City shall give required
approvals or disapprovals within fourteen (14) Days after submission, except matters which must be
decided by the Redding City Council, which shall be decided within forty-five (45)Days.
14.2 Counterparts. This Agreement may be executed in two (2)counterpart originals, each
of which shall constitute one and the same instrument.
14.3 Priority of Contents of Agreement. In the event of a conflict between the terms of this
Agreement and the Exhibits, this Agreement shall be given precedence.
14.4 Inspection of Books and Records. City has the right, at all reasonable times and upon
reasonable notice, to inspect the books and records of the Developer pertaining to the Project as
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP I' ;i � �� �Z4
necessary to assure compliance with the provisions of this Agreement. Developer shall keep such
books and records as City may reasonably require to assure Developer's performance of its obligations
under this Agreement.
14.5 Fees Commissions Gifts or Interests. Neither party sha(1 be liable for any real estate
commissions, brokerage fees or finder's fees which may arise through the other party from this
Agreement. City and Developer each represent that neither-has engaged any broker, agent or finder,
and that neither claims such a commission or fee, in connection with this Agreement. Developer shall
pay no fee or commission, make no gifts and provide no interest in the City Loans to any employee or
official of the City.
14.6 Entire Agreement. This Agreement, including all of the exhibits and attachments,
integrates al( of the terms and conditions related or incidental to its subject matter, and supersedes all
negotiations or previous agreements between the parties with respect to its subject matter.
14.7 Waivers and Amendments. All waivers of the provisions of this Agreement must be
in writing and signed by the appropriate authorities of the City or the Developer, and all amendments
hereto must be in writing and signed by the appropriate authorities of the City and the Developer. Such
amendments will not invalidate this DA. Amendments stipulated within this Agreement that are
considered minor, that do not result in a substantial or functional change to the original intent of the
Agreement,or that do not qualify as substantial amendments as written in 5.4.2 shall be deemed"minor
amendments" and may be agreed to in writing between Developer and the City Manager or designee
without requiring approval of the City Council.
14.8 Non-liabilit oy f Citv Officials and Emplo,yees. No member, official or employee of
the City shall be personally liable to the Developer or any successor in interest, in the event of any
default or breach by the City or for any amount which may become due to the Developer or its
successors, or on any obligations under the terms of this Agreement.
14.9 Notices and Demands. Any notice, demand or other communication under the
Agreement by either party to the other shall be deemed to have been full and properly given when
made in writing,enclosed in a sealed envelope,and deposited in the United States Post Office,certified
mail, postage prepaid, to the addresses for City and Developer stated in Sections 1.6 and 1.21,
respectively, or delivered by email to the email address listed for the City and Developer in Sections
1.6 and 1.21, respectively.
14.10 Jurisdiction, Venue and AttorneXs' Fees.
14.10.1 Jurisdiction and Venue. Any legal action(s)concerning the Agreement or the
performance of any party thereunder shall be brought only in the court of appropriate jurisdiction in
the County of Shasta. The Developer and the City agree that jurisdiction and venue shall only be in
said courts.
14.10.2 Attornevs' Fees. In the event any legal action, including arbitration,is brought
by either party to this Agreement to enforce this Agreement or for breach of this Agreement or for a
declaration of the rights and duties under this Agreement,the prevailing party shall recover costs and
reasonable attorney's fees in addition to any other relief to which that party may be entitled.
14.10.3 No Party Deemed Drafter. In the event of a dispute between the parties hereto
over the meaning of this Agreement, no party shall be deemed to have been the drafter hereof, and the
principle of law that contracts are construed against the drafter does not apply.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP i' r � c �25
15. Special CDBG Administrative Requirements
15.1 Financial Mana ement
15.1.1 Accountin� Standards. Developer agrees to comply with 24 CFR 84.21-28
and agrees to adhere to the accounting principles and procedures required therein, utilize adequate
internal controls, and maintain necessary source documentation for all costs incurred.
15.1.2 Cost Princi lp es• Developer shall expend City funds and administer its
Project in conformance with OMB Circulars A-122, "Cost Principles for Non-Profits
Organizations," or A-21, "Cost Principles for Educational Institutions," as applicable. These
principles shall be applied for all costs incurred whether charged on a direct or indirect basis.
15.2 Documentation and Record Keeping
15.2.1 Records to be Maintained. Developer shall maintain all records required by
the regulations specified in 24 CFR 5�0.506 that are pertinent to the activities to be funds under
this DA. Such records shall include, but not be limited to:
Records providing a full description of each activity undertaken;
a. Records demonstrating that each activity undertaken meets one of the
National objectives of the CDBG program;
b. Records required to determine the eligibility of activities;
c. Records required to document the acquisition, improvement, or use or
disposition of real property acquired or improved with CDBG assistance;
d. Records documenting compliance with the fair housing and equal opportunity
components of the CDBG program;
e. Financial records as required by 24 CFR 570.502, and 24 CFR 84.21-28; and
f. Other records necessary to document compliance with Subpart K of 24 CFR
Part 570.
15.2.2 Retention. Developer shall retain all financial records, supporting
documents, statistical records, and all other records pertinent to this DA for a period of five years
beyond the affordability period. The retention period begins on the date of the submission of
City's annual performance and evaluation report to HUD in which the activities assisted under this
DA are reported on for the final time. Notwithstanding the above, if there is litigation, claims,
audits, negotiations or other actions that involve any of the records cited and that have started
before the expiration of the five-year period, then such records must be retained until completion
of the actions and resolution of all issues, or the expiration of the five-year period, whichever
occurs later.
15.3 Client Data. If required, Developer shall maintain client data dernonstrating client
eligibility for services provided. Such data shall include, but not be limited to, client name,
address,income level or other basis for determining eligibility,and description of service provided.
Such information shall be made available to City monitors or their designees for review upon
request. Developer shall also take appropriate measures to maintain confidentiality of client
information.
Development Agreement Between
City of Redding and Piper Way Senior Housing LP I' a �� c �26
15.4 Disclosure. Recognizing that Developer may from time to time render services
to recipients, which are highly personal and confidential in nature, City shall only disclose such
information as required by law.
1 S.5 Close-Outs. Developer's obligation to City pursuant to this DA shall not end
until all close-out requirements are completed. Activities during this close-out period shall
include, but are not limited to: making final payments, disposing of program assets (including the
return of all unused materials, equipment, unspent cash advances, program income balances, and
accounts receivable to City), and determining the custodianship of records. Notwithstanding the
foregoing,the terms of this DA shall remain in effect during any period that Developer has control
over CDBG funds, including program income or remains liable for payment to City under the
Deed of Trust.
15.6 Audits and Inspections. All Developer records with respect to any matters covered
by this DA shall be made available to City, state, and/or federal authorities or any authorized
representatives, at any time during normal business hours, as often as deemed necessary, to audit,
examine, and make excerpts ar transcripts of all relevant data. Any deficiencies noted in
audit/monitoring reports must be fully cleared by Developer within 30 days after receipt of notice
of deficiency or deficiencies by Developer. Failure of Developer to comply with the above
audit/monitoring requirements will constitute a violation of this DA and may result in the
withholding of future payments. Developer agrees to comply and provide requested information
from third-party auditors conducting financial audits of City of Redding.
15.7 Reportin�; and Fundin� Availability City shall pay to Developer funds available
under this DA based upon information submitted by the Developer and consistent with any
approved budget and City policy concerning payments. With the exception of certain advances,
payments will be made for eligible expenses actually incurred by Developer, and not to exceed
actual cash requirements. In addition, City reserves the right to liquidate funds available to
Developer under this DA for costs incurred by City on behalf of Developer insofar as those costs
incurred on behalf of Developer relate to the obligations of Developer under this DA.
15.8 Procurement and Subcontracts
15.8.1 OMB Standards. Unless specified otherwise with this DA, Developer
shall procure all materials, property, or services in accordance with the requirements of 24 CFR
84.40-48.
15.9 Subcontracts
15.9.1 Monitorin�. Developer shall monitor all subcontracted services on a
regular basis to assure compliance with this DA. The City shall be notified immediately if the
subcontractee is found to be out of compliance with any aspect of the agreement.
15.9.2 Content. Developer shall require any contractor or subcontractor to
comply with certain requirements included but not limited to procurement standards, Equal
Employment Opportunity clauses, Fair Housing Laws, Labor Standards and MBE/WBE. These
requirements will be more fully detailed in any subsequent bidding documents.
15.9.3 Selection Process. Developer shall undertake to ensure th�t all
subcontracts let in the performance of this DA shall be awarded on a fair and open competition
Development Agreement Beriveen
City of Redding and Piper Way Senior Housing,LP P n <� e �27
basis in accordance with applicable procurement requirements contained in this DA. Executed
copies of all subcontracts shall be forwarded to City along with documentation concerning the
selection process.
15.10 Use and Reversion of Assets. The use and disposition of real property and
equipment under this DA shall be in compliance with the requirement of 24 CFR Part 84 and 24
CFR 570.502, 570.503, and 570.504, as applicable, which include but are not limited to the
following:
15.10.1 Developer shall transfer to City any CDBG funds on hand and any accounts
receivable attributable to the use of funds under this DA at the time of expiration, cancellation, or
termination.
15.10.2 Developer shall ensure that any real property that was acquired or
improved in whole or part with CDBG funds in excess of$25,000 is either: Used to meet one of
the CDBG national objectives pursuant to 24 CFR§507.208 until five years after expiration of this
DA, or such longer period of time as determined to be appropriate by City; or if not used in
accordance with this DA Developer shall pay to City an amount equal to the current fair market
value of the property less any portion of the value attributable to expenditures of non-CDBG funds
for acquisition of,or improvement to,the property. Such payment shall constitute program income
to City. In all cases in which equipment acquired, in whole or in part, with funds under this DA is
sold,proceeds shall be program income prorated to reflect the extent that funds received under this
DA were used to acquire the equipment). Equipment acquired with funds under this DA that is
not needed by the Developer for activities under this DA shall be 1) transferred to City for the
CDBG program;or 2)retained after compensating City(an amount equal to the current fair market
value of the equipment less the percentage of non-CDBG funds used to acquire the equipment).
15.11 FAIR HOUSING AND EQUAL OPPORTUNITY COMPLIANCE
15.11.1 Com liance. Developer shall comply with all state and local civil rights
ordinances, laws and regulations and with Title VI of the Civil Rights Act of 1964 as amended,
Title VIII of the Civil Rights Act of 1968 as amended, Section 104(b) and Section 109 of Title I
of the Housing and Community Development Act (HCDA) of 1974 as amended, Section 504 of
the Rehabilitation Act (RA) of 1973, the Americans with Disabilities Act of 1990, the Age
Discrimination Act of 1975, Executive Order 11063, and Executive Order 11246 (as amended by
Executive Orders 11375, 11478, 12107 and 12086).
It is the intent of the City that services funded under this DA are provided in a manner that
encourages participation by all persons regardless of age, race, color, religion, sex, disability,
familial status, national origin, veteran status, or English language proficiency.
15.11.2 Non-Discrimination (HCDA Section 109,� Developer shall comply with the non-
discrimination in employment and contracting opportunities laws, regulations, and executive
orders referenced in 24 CFR 570.607, as revised by Executive Order 13279. The applicable non-
discrimination provisions in Section 109 of the Housing and Community Development Act
(HCDA)of 1974 are still applicable. Pursuant to Section 109,the Developer must provide services
in a manner which will not cause discrimination on the basis of race,calor,religion,sex,disability,
familial status, or national origin. Segregated facilities, services, or benefits and different
treatment are prohibited.
Development Agreement Between
City of Redding and Piper Way Senior FIousing,LP P a � c �28
15.11.3 Non-Discrimination Noticin�. Pursuant to Section 504 af the Rehabilitation Act
(RA) of 1973 (29 U.S.C. 794), the Developer shall include a non-discrimination notice in
informational, advertising, and marketing materials. This clause applies if the Developer has 15
or more employees.
15.12 Accessibilitv (RA Section 504� Developer shall comply with all federal
regulations issued pursuant to compliance with Section 504 of the Rehabilitation Act(RA)of 1973
(29 U.S.C. 794), which prohibits discrimination against individuals with disabilities or handicaps
in any federally assisted program. City shall furnish Developer with any guidelines necessary for
compliance with that portion of the regulations in force during the term of this DA.
15.12.1 Program Accessibilit� Pursuant to Section 504, the Developer shall be
receptive to requests and needs of disabled person(s) within the community when determining
which auxiliary aids or services are necessary particularly for service recipients that may be
hearing impaired, mobility impaired, developmentally disabled, or vision impaired; and those
persons requiring in-home care or institutional care.
15.12.2 Facilities Accessibilitv. Pursuant to Section 504, Developer shall ensure
that the location in which the services are provided is readily accessible and usable by persons
with disabilities or persons with physical handicaps. Providing separate or different programs is
illegal unless necessary to achieve equal opportunity.
15.13 Af�rmative Action and Employment Provisions. The Developer shall ensure that
employment opportunities may not be denied on the basis of race, color, national arigin, sex, age,
religion, familial status, or disability. Developer agrees that it shall be committed to carry out
pursuant to City's specifications an Affirmative Action Plan in keeping with the principles as
provided in President's Executive Order 11246 of September 24, 1996. City shall provide
Affirmative Action guidelines to Developer to assist in the formulation of such program.
Developer shall submit a plan for an Affirmative Action Program for approval prior to the award
of funds.
15.13.1 Prohibited Activitv. Developer is prohibited from using funds furnished
herein or personnel employed in the administration of the program for: political activities,
inherently religious activities, lobbying, political patronage, and nepotism activities.
15.13.2 Labor Standards. Developer shall comply with the requirements of the
Secretary of Labor in accordance with the Davis-Bacon Act as arnended,the provisions of Contract
Work Hours and Safety Standards Act (40 U.S.C. 327 et seq.) and all other applicable Federal,
state and local laws and regulations pertaining to labor standards insofar as those acts apply to the
performance of this DA. Developer shall comply with the Copeland Anti-Kick Back Act (18
U.S.C. §874 et seq.) and the implementing regulations of the U.S. Department of Labor at 29 CFR
Part 5. Developer shall maintain documentation that demonstrates compliance with hour and wage
requirements of this part. Such documentation shall be made available to City for review upon
request.
Developer shall, except with respect to the rehabilitation or construction of
residential property containing less than eight units, ensure that all contractors engaged under
contracts in excess of$2,000.00 for construction, renovation ar repair work financed in whole or
in part with assistance provided under this DA, comply with federal requirements adopted by City
pertaining to such contracts and with the applicable requirements of the regulations of the
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a �c �29
Department of Labor, under 29 CFR Parts l, 3, 5 and� governing the payment of wages and ratio
of apprentices and trainees to journey workers; provided that, if wage rates higher than those
required under the regulations are imposed by state or local law, nothing hereunder is intended to
relieve Developer of its obligation, if any,to require payment of the higher wage. Developer shall
cause or require to be inserted in full, in all contracts subject to such regulations, provisions
meeting the requirements of this paragraph.
15.13.3 Notification. Developer shall send to each labor union or representative of
workers with which it has a collective bargaining agreement or other contract or understanding, a
notice, to be provided by City's contracting officer, advising the labor union ar worker's
representative of Developer's commitments hereunder, and shall post copies of the notice in
conspicuous places available to employees and applicants for employment.
15.13.4 Equal Op ortunitv and Affirmative Action Statement (EEO/AA).
Developer shall, in all solicitations or advertisements for employees placed by or on behalf of
Developer, state that it is an Equal Opportunity or Affirmative Action employer.
15.14 Contracts and Subcontracts. With regard to subcontract agreements as approved
by the City,the Developer shall ensure compliance with all state and local civil rights ordinances,
laws and regulations and with Title VI of the Civil Rights Act of 1964 as amended, Title VIII of
the Civil Rights Act of 1968 as amended, Section 104(b}and Section 109 of Title I of the Housing
and Community Development Act(HCDA)of 1974 as amended, Section 504 of the Rehabilitation
Act (RA) of 1973, the Americans with Disabilities Act of 1990, the Age Discrimination Act of
1975, Executive Order 11063, and Executive Order 11246 (as amended by Executive Orders
11375, 11478, 12107 and 12086).
15.14.1 Women- and Minarity-Owned Businesses (W/MBE� Developer shall use
its best efforts to afford small businesses, minority business enterprises, and women's business
enterprises the maximum practicable opportunity to participate in the performance of this DA. As
used in this DA, the terms "small business" means a business that meets the criteria set forth in
section 3(a) of the Small Business Act, as amended (15 U.S.C. 632), and "minority and women's
business enterprise"means a business at least 51 percent owned and controlled by minority group
members or women. For the purpose of this definition, "minority group members" are Afro-
Americans, Spanish-speaking, Spanish surnamed or Spanish-heritage Americans, Asian-
Americans, and American Indians. Developer may rely on written representations by businesses
regarding their status as minority and female business enterprises in lieu of an independent
investigation.
15.14.2 Access to Records. Developer shall furnish and cause each of its own sub
recipients or subcontractors to furnish all information and reports required hereunder and shall
permit access to its books, records and accounts by City, HUD or its agent, or other authorized
federal officials far purposes of investigation ta ascertain compliance with the rules, regulations
and provisions stated herein.
15.14.3 Subcontract Provisions. Developer shall include the provisions related to
Non-Discrimination,Accessibility, Affirmative Action and Employment Provisions,and Minority
and Women-Owned Businesses, Access to Records, and "Section 3" Clause contained within this
DA in every subcontract or purchase order, specifically or by reference, so that such provisions
will be binding upon each of its sub recipients or subcontractors.
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP i' a ��� �30
15.15 Section 3 Clause. Section 3 of the Housing and Urban Development Act of 1968,
as amended requires the provision of opportunities for training and employment that arise through
HUD-financed projects to lower-income residents of the project area. It is also required that
contracts be awarded to businesses that provide economic opportunities for low- and very low-
income persons residing in the area.
15.15.1 Com lip ance• Compliance with the provisions of Section 3 of the HUD Act
of 1968, as amended, and as implemented by the regulations set forth in 24 CFR 135, and all
applicable rules and orders issued hereunder prior to the execution of this DA, shall be a condition
of the federal financial assistance provided under this DA and binding upon City, Developer and
any of Developer's sub recipients and subcontractors. Failure to fulfill these requirements shall
subject City, Developer and any of Developer's sub recipients and subcontractors,their successors
and assigns, to those sanctions specified by the DA through which federal assistance is provided.
Developer certifies and agrees that no contractual or other disability exists that would prevent
compliance with these requirements.
Developer shall comply with these "Section 3" requirements and include the
following Language in all subcontracts executed under this DA:
"The work to be performed under this DA is a project assisted under a program
providing direct federal financial assistance from HUD and is subject to the requirements of
Section 3 of the Housing and Urban Development Act of 1968, as amended (12 U.S.C. 1701).
Section 3 requires that to the greatest extent feasible, opportunities for training and employment
be given to low- and very low-income residents of the project area, and that contracts for work in
connection with the project be awarded to business concerns that provide economic opportunities
for low- and very low-income persons residing in the metropolitan area in which the project is
located."
Developer certifies and agrees that no contractual ar other legal incapacity exists
that would prevent compliance with these requirements.
15.15.2 Subcontracts. Developer shall include this Section 3 clause in every
subcontract and shall take appropriate action pursuant to the subcontract upon a finding that the
subcontractor is in violation of applicable regulations. Developer shall not subcontract with any
entity where it has notice or knowledge that the latter has been found in violation of regulations
under 24 CFR Part 135 and shall not let any subcontract unless the entity has first provided it
with a preliminary statement of ability to comply with the requirements of the applicable
regulations.
15.16 General Compliance. Developer agrees to comply with the requirements of Title
24 of the Code of Federal Regulations, Part 570 (the U.S. Housing and Urban Development
regulations concerning Community Development Block Grants) including subpart K of those
regulations, except that (1) Developer does not assume the recipient's environmental
respansibilities described in 24 CFR 570.604 and (2) Developer does not assume the recipient's
responsibility for initiating the review process under the provisions of 24 CFR Part 52. Developer
also agrees to comply with all other applicable Federal, state and local laws, regulations, and
policies governing the funds provided under this DA. Developer further agrees to utilize funds
available under this DA to supplement rather than supplant funds otherwise available.
15.17 Independent Contractor. Nothing contained in this DA is intended to, or shall be
construed in any manner, as creating or establishing the relationship of employer/employee
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP (' :i �, c �31
between the parties. Developer shall at all times remain an"independent contractor" with respect
to the services to be performed under this DA. City shall be exempt from payment of all
Unemployment Compensation, FICA, retirement, life and/or medical insurance and Worker's
Compensation Insurance, as Developer is an independent contractor.
15.18 Reco nig tion. Developer shall insure recognition of the role of City in providing
services through this DA. All activities, facilities, and items utilized pursuant to this DA shall be
prominently labeled as to funding source. In addition, the Developer will include a reference to
the support provided herein in all publications made possible with funds made available under this
DA.
15.19 RESERVED
15.20 Assi nabilit� Except for permitted transfers pursuant to Sections 11.3.4(�and(g)
hereof, Developer shall not assign or transfer any interest in this DA without the prior written
consent of City thereto; provided, however, that claims for money due or to become due to
Developer from City under this DA rnay be assigned to a bank, trust company, or other financial
institution without such approval. Notice of any such assignment or transfer shall be furnished
promptly to City.
15.21 Hatch Act. Developer agrees that no funds provided, nor personnel employed
under this DA, shall be in any way or to any extent engaged in the conduct of political activities
in violation of Chapter 15 of Title V of the U.S.C.
15.22 Conflict of Interest. Developer shall abide by the provisions of 24 CFR 84.42 and
570.61 l, which include (but are not limited to)the following:
Developer shall maintain a written code or standards of conduct that shall govern the performance
of its officers,employees or agents engaged in the award and administration of contracts supported
by f�deral funds.
No employee, officer or agent of Developer shall participate in the selection, or in the award, or
administration of, a contract supported by federal funds if a conflict of interest, real or apparent,
would be involved.
No covered persons who exercise or have exercised any functions or responsibilities with respect
to CDBG-assisted activities, or who are in a position to participate in a decision-making process
or gain inside information with regard to such activities, may obtain a financial interest in any
contract, or have a financial interest in any contract, subcontract, or agreement with respect to the
CDBG-assisted activity, or with respect to the proceeds from the CDBG-assisted activity, either
for thernselves or those with whom they have business or immediate family ties,during their tenure
ar for a period of one year thereafter. For purposes of this paragraph, a"covered person" includes
any person who is an employee, agent, consultant, officer, or elected or appointed official of City,
Developer, or any designated public agency.
15.23 Lobbving_ Developer shall execute the Anti-Lobbying Certification (Exhibit 13),
attached and incorporated herein.
15.24 Copyri� If this DA results in any copyrightable material or inventions, City
and/or grantor agency reserves the right to royalty-free, nonexclusive and irrevocable license to
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a �� � �32
reproduce, publish or otherwise use and to authorize others to use, the work or materials for
governmental use.
15.25 Reli�ious Activities. Developer agrees that funds provided under this DA will not
be utilized for inherently religious activities prohibited by 24 CFR 570.200(j), such as worship,
religious instruction, or proselytization.
15.26 Travel. Developer shall obtain written approval from City for any travel outside the
County of Shasta with funds provided under this DA, if applicable.
15.27 Suspension or Termination. In accordance with 24 CFR 85.43, City may suspend
or terminate this DA if Developer materially fails to comply with any terms of this DA, after the
expiration of applicable notice and cure periods hereunder, which include (but are not limited to),
the following:
Failure to comply with any of the rules,regulations or provisions referred to herein,or such
statutes, regulations, executive orders, and HUD guidelines,policies or directives as may become
applicable at any time after expiration of applicable notice and cure periods;
Failure, for any reason,of Developer to fulfill in a timely and proper manner its obligations
under this DA after the expiration of applicable notice and cure periods;
Ineffective or improper use of funds provided under this DA; or
Submission by Developer to City of reports required under this DA that are incorrect or
incomplete in any material respect.
This DA may also be terminated for convenience pursuant to 24 CFR 85.44 except that the
termination for convenience set forth in 24 CFR 85.44(b) may only be exercised upon the mutual
agreement of City and Developer.
In the event that City fails to receive CDBG funds, due to the action or inaction of the
Developer, or the allacation of such funds is reduced by HUD, City may reduce the CDBG-DR
MHP City loan to equal the amount funded by HCD or, in the event that the amount of CDBG-
DR MHP funds are reduced to an amount that makes Project infeasible, terminate and void this
DA by giving notice to Developer by registered mail.
Upon termination,Developer shall transfer to City the balance of any CDBG funds on hand
at the time of termination and any accounts receivable attributable to the use of CDBG funds.
15.28 Severabilitv. If any provision of this DA is held invalid, the remainder of this DA
shall not be affected thereby and all other parts of this DA shall nevertheless be in full force and
effect.
15.29 Section Headin�s and Subheadings. The section headings and subheadings
contained in this DA are included for convenience only and shall not limit or otherwise affect the
terms of this DA.
15.30 Waiver. City's failure to act with respect to a breach by Developer does not waive
its right to act with respect to subsequent or similar breaches. The failure of City to exercise or
Development Agreement Between
City of Redding and Piper Way Senior Housing LP P a ��c �33
enforce any right or provision shall not constitute a waiver of such right or provision.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
Development Agreement Between
City of Redding and Piper Way Senior Housing LP i' a e c �34
IN WITNESS WHEREOF,the City and the Developer have executed this Agreement on the respective
dates set forth below:
City of Redding,a municipal corparation
Date:
` By: Michael Dacquista,Mayor �
ATTEST: APPROVED AS TO FORM:
By: Pamela Mize,City Clerk By:Barry E. DeWalt,City Attorney
PARTNERSHIPBCIRROWER/OWNER:
PI.PER WAY SENIOR HOUSING LP,
a California limited partnership
By: PWS Housing,LLC,
a California limited liability company,
its General Partner
By: Christian Church Homes,
a California nonprofit public benefit corparation,
its sole member and manaper
�.--�—
BY� � '"�'L
Sidney Stone,
Vice President of Real Estate Development
PARTNERSHIP'S GENERAL PARTNER:
PWS HOUSING,LLC,
a Ca(ifornia limited liability company
By: Christian Church Homes,
a California nonprafit public benefit corporation,
its sale mernb �and man r
BY� _ C -`Z
Sidney Stone,
Vice President of Real Estate Development
Development Agreen�cnt Between
City of Redding and 1'iper Way Senior Hausing,LP 1'a g e �35
IN WITNESS WHEREOF,the City and the Developer have executed this Agreement on the respective
dates set forth below:
City of Redding,a municipai corporation
Date:
� �� By: Michael Dacquisto,Mayor
ATTEST: APPROVED AS T4 FORM:
By: Pamela Mize,City Clerk By:Barry E. DeWalt,City Attorney
PARTNERSHIP/BORROWER/QWNER:
PIPER WAY SENIOR HOUSING LP,
a California limited partnership �
By: PWS Housing,LLC,
a California limited liability company,
its Genera}Partner
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and man ger
� ,-�...._
By: ��
Sidney Stone,
Vice President of Real Estate Development
PARTIYERSHIP'S GENERAL PARTNER:
PWS HOUSTNG, LLC,
a California limited liability company
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole mem,er,�and n a�r
By' - �?f �� --..
Sidney Stone,
Vice President of Real Estate Development
Developmcnt Agreement Setween
City of Rcdding and PiPer Way Senior Housing,LP P a g e (35
LIST OF �XHIBITS
EXHIBIT lA: Property Legal Description
EXHIBIT 1B: Parcel Map
EXHIBIT 2A: Promissory Note Secured By Deed of Trust CDBG DR-MHP
EXHIBIT 2B: Deed of Trust CDBG DR-MHP
EXHIBIT 2C: Draft Senior Regulatory Agreernent CDBG DR-MHP
EXHIBIT 2D: Draft Junior Regulatory Agreement CDBG DR-MHP
EXHIBIT 3: Rider to Development Agreement
EXHIBIT 4: Reserved
EXHIBIT 5: Scope of Development
EXHIBIT 6: Preliminary Project Budget
EXHIBIT 7: Schedule of Performance
EXHIBIT 8: Form of Notice of Completion
EXHIBIT 9: Form of Certificate of Completion
EXHIBIT 10: Fair Housing Poster
EXHIBIT 11: Estoppel Certificate
EXHIBIT 12: Reserved
EXHIBIT 13: Anti-Lobbying Certificate
Development Agreement Between
City of Redding and Piper Way Senior Housing,LP P a �� c �36
EXHIBIT 1A
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EXHIBIT 1B
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EXHIBIT 2A
PROMISSORY NOTE SECURED BY DEED TRUST
DO NOT DESTROY THIS NOTE: When paid,this note,with Deed of Trust securing same,
must be surrendered to Trustee for cancellation before reconveyance will be made.
Amount: $2,000,000 June 8,2023
Redding,California
FOR VALUE RECEIVED,Piper Way Senior Housing LP,a California limited partnership,
("Borrower"),promises to pay ta the order of the City of Redding("Holder"), the principal sum of Two
Million and no/100($2,000,000), pursuant to Section 4 below.
1. Borrower's Obli ation. This promissory note("Note")evidences Borrower's obligation to pay
Holder the principal amount of Two Million and no/100($2,000,000)for the funds loaned to Borrower by
Holder to assist with the development of certain real property("Project")pursuant to a Development
Agreement between Borrower and Holder dated June ,2023("Agreement").
2. Interest. The principal balance of this Note shall bear simple interest from the date of the
promissory note until repaid in full at Three(3%)per annum; provided,however, if an event of default occurs,
interest on the principal bala�lce shall begin to accrue,as of the date of the event of default and continuing
until the earlier of the Loan funds being paid in full or cure of such event of default, at the default rate of the
lesser of:ten percent(10%),compounded annually; or the highest rate permitted by law.
3. Term and Repayment Requirements. The term of this Note("Term")shall commence with the
date of this Note and shall expire Fifty-five(55}years from the date of recordation of a Notice of Completion
by the City, so long as there is no event of default as described in Section 4 below. Payment of tl�e Note shall
be required as follows:
The term of the note will not exceed 55 years.All principal and interest payments shall be paid to the City of
Redding.No payments will be due for the first fifteen(15)years of the term. Beginning the sixteenth(16th)
year following the completion of construction,no later than one hundred twenty(120)days after the end of
each fiscal year during the terrn of the proposed City loan, Developer,Borrower or other party authorized by
the Development Funding Agreement(DFA), including any successors and assigns, shall provide City with a
written year-end cash flow analysis and audited financial statement far the project prepared by a certified
public accountant. Fifty percent(50%)of any residual receipts realized from the operation of the Project as
shown by the annual audit, shall be split proportionately between the City and the lenders of any other project-
related loans approved by the City for which residual receipts payments are due.Any such residual receipts
received by the City shall be credited as a payment on the City loan and shall be app(ied first to reducing the
accrued interest, if any,on the loan, and subsequently,to reducing the principal. The remaining 50%of
residual receipts will be available for distribution to the Borrower.
Payments are required as stated above, until the expiration of the Term at which time all outstanding principal
and accrued interest shall be due and payable.
a. All payments are payable in lawful money of the United States.
b. All payments on this Note shall be paid to the City of Redding at?77 Cypress Avenue,
Redding, California, or to such other place as holder of this Note may from time to time designate.
c. All payments an this Note shall be without expense to Holder,and Borrower agrees to pay
all costs and expellses, including reconveyance fees and reasonable attorney's fees of Holder, incurred in
connection with the payment of this Note and the release of any security hereof.
d. Notwithstanding any other provision of this Note, or any instrument securing the
obligations of Borrower under this Note, if,for any reason whatsoever, the payment of all sums by Borrower
pursuant to the terms of this Note would result in tlie payment of interest which would exceed 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 shall automatically be deducted from the principal balance owing on this Note,
so that in no event shall Borrower be obligated under the terms of this Note to pay any interest which would
exceed the lawful rate.
e. The whole of this Note shall be nonrecourse to Borrower and its partners.
4. Default.
a. Any of the following shall constitute an event of default under this Note and are subject to
the applicable notice and cure rights.
1) Any failure to pay, in full,any payment required under this Note when due.
2) Any failure in the performance by Borrower of any term, candition, provision, or
covenant set forth in this Note.
3)The occurrence of any event of default under the Agreement,the Deed of Trust,or
the Declaration of Affordability Restrictions,(as defined in the Agreement).
b. Upon the occurrence af such an event of default and the expiration of tlle applicable cure
period,the entire unpaid principal balance,together with all interest thereon, and together with all sums then
payable under this Note and the Deed of Trust shall at the option of Holder become immediately due and
payable upon written notice by Holder to Borrower without further demand.
c. The failure to exercise the remedy set forth in subsection 4b above or any other remedy
provided by law upon the occurrence of one or more of the foregoing events of default shall not constitute a
waiver of the right to exercise any remedy at any subsequent time in respect to the same or any other default.
The acceptance by Holder hereof of any payment which is less that the total of all amounts due and payable at
the time of such payment shall 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.
5. No Assumption. This Note shall not be assumable by the successors and assigns of Borrower
without the prior written consent of Holder.
6. Securitv. This Note is secured by a Deed of Trust and Security Agreement("Deed of Trust"),of
even date herewith, wherein Borrower is the Trustor and Holder is the Beneficiary, covering the Property.
7. Waivers.
a. Borrower hereby waives diligence,presentment, protest and demand, and notice of protest,
notice of demand, notice of dishonor and notice of nonpayment 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
agreeinent by Holder with any person now or hereafter liable for payment of this note shall operate to release,
discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in
part.
c. The obligations of Borrower under this Note shall be absolute and Borrower waives any
and all rigllts to offset, deduct, or withhold any payments or charges due under this Note for any reason
whatsoever.
8. Miscellaneous Provisions.
a. 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.
b. This Note may not be changed orally, but only by an agreement in writing signed by the
party against whom enforcement of any waiver,change,modification or discharge is sought.
c. This Nate shall be governed by and construed in accordance with the laws of the State of
California.
PARTNERSHIP/SORROWER/OWNER:
PIPER WAY SENIOR HOUSING LP,
a Califoniia limited partnership
By: PWS Housing, LLC,
a California limited liability company,
its General Partner
By; Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
PARTNERSHIP'S GENERAL PARTNER:
PWS HOUSING, LLC,
a California limited liability company
By: Christian Church Homes,
a California nonprafit public benefit corporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
EXHIBIT 2B
RECORDiNG REQUESTED BY:
City of Redding
CITY BUSINESS -NO FEE
Section 6103 of the Government Code
of the State of California
AND WHEN RECORDED MAIL TO:
City of Redding—Housing Division
P.O. Box 496071
777 Cypress Avenue
Redding, CA 96049-6071
CITY OF REDDING DEED OF TRUST WITH ASSIGNMENTS OF RENTS
THIS DEED OF TRUST is made this June 8, 2023, by Piper Way Senior Housing, LP, a
California limited partnership, as to equitable title, herein called "Trustor," and/or `Borrower" whose
address is 303 Hegenberger Road, Suite ZO1,Oakland,CA 94621; Commonwealth Land Title Company
herein called "Trustee," whose address is 601 S. Figueroa Street (40t" Floor), Suite 4000 Los Angeles,
CA 90017; and the CITY OF REDDING,a municipal corporation and general law city,whose address is,
777 Cypress Avenue, Redding, California 96001, herein called`Beneficiary"and/or the"Lender".
WITNESSETH: That Trustor Irrevocably, Grants, Transfers and Assigns, to Trustee, in Trust,
with Power of Sale, that property in the City of Redding ("City"), County of Shasta, State of California,
described as:
EXHIBIT A-Legal Description
ASSESSOR'S PARCEL NUMBER: 104-680-003-000
TOGETHER WITH: (a) all buildings, improvements and fixtures, now or in the future thereon,
it being understood and agreed that all classes of property attached or unattached used in connection
herewith shall be deemed fixtures, (b)rents, issues and profits thereof, and (c) all sums of money payable
on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale
thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon
Beneficiary to collect and apply such rents, issues, and profits, and all sums of money payable on the
purchase price of said properly secured by a lien thereon or payable under any agreement.
BORROWER HEREBY expressly acknowledges and agrees that the subject loan, this Deed of
Trust, and the properly which serves as security for the Note and Deed of Trust, involves a multifamily
residential transaction, one that the Borrower is expressly entering into for the provision of affordable
housing and not for profit,and not in any way related to Borrower's home or residence.As such,Borrower
further acknowledges and agrees tl�at Lender likewise is making this loan on the aforesaid basis, and thus
intends to enforce any and all of its rights accordingly. FOR THE PURPOSE OF SECURING:
1. Payment of the sum of two million dollars ($2,000,000) with interest thereon according
to the terms of a certain Promissory Note of even date herewith,designated as the"Promissory Note"made
by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof.
2. Payment of such additional sums with interest thereon as; (a) may be hereafter borrowed
from the Beneficiary by the then record owner or owners of said property when evidenced by another
Promissory Note or Notes reciting that they are secured hereby, or(b)as may be added to the indebtedness
secured hereby in accordance with the provisions of this Deed of Trust.
3. Perforrnance of each and every obligation, covenant, promise, or agreement of Trustor
contained herein.
4. Payment,with interest thereon,of any other present or future indebtedness or obligation of
the Trustor(or of any successor in interest of the Trustor to said property)to the Beneficiary reciting that
they are secured hereby, whether created directly or acquired by assignment, whether absolute or
contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the
execution of the Deed of Trust,or arising thereafter.
5. Performance of each agreement of Trustor contained in any Development Funding
Agreement and/or Disposition and Development Agreement (including without limitation the Exhibits
thereto)entered into between Trustor and Beneficiary for the development, construction of improvements,
adoption af rent restrictions or other affordability covenants,or operation of certain activities on the above-
described property.
TO PROTECT THE SECURITY OF THIS DE�D OF TRUST,TRUSTOR AGREES:
1. To keep said property in good condition and repair; to allow Beneficiary ar its
representatives to enter and inspect the premises at all reasonable times and access thereto shall be permitted
for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without
the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the
premises without Beneficiary's written consent; to complete or restore promptly and in good and
workmanlike manner any building which may be constructed, damaged, or destroyed thereon, including,
without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all
claims for labor performed and materials furnished in connection with such properly and not to permit any
mechanic's lien against such property; to comply with all laws affecting such property or requiring any
alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification
without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer, or
permit any act upon such properiy in violation of the law;and to paint,cultivate, irrigate,fertilize,fumigate,
prune, and do all other acts that from the character or use of said property may be reasonably necessary;to
promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures,furnishings,
and equipment located thereon.
If the loan secured hereby or any part thereof is being obtained or should any additional loan be made
hereafter for the purpose of financing rehabilitation improvements or construction of affordable housing on
said properly, Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding: (a)to
complete the same in accordance with City approved plans and specifications satisfactory to Beneficiary;
(b) to allow Beneficiary to inspect such property at all times during construction; (c)to replace any work
or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from
Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to its
last known address, or by personal service of the same; (d)that work shall not cease on the construction of
such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whetl�er
consecutive or not, withaut the written permission of the Beneficiary; (e)to pay when due all claims for
labor and materials furnished in connection with the said construction and/or rehabilitation and not to permit
any claims of lien for said work or material to be filed of record against the said property; and (fl not to
permit any stop notice claims to be presented to Beneficiary. If the said property is part of a larger tract
upon which improvements will be constructed, Trustor shall make separate contracts and subcontracts for
said construction, which shall pertain to the said property only and shall keep separate, full, aud complete
records of al( work and materials furnished to the said properiy. Trustee, upon presentation to it of an
affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is
authorized to accept as true and conclusive all facts and statements therein and to act thereon hereunder.
2. To provide and maintain in force at all times with respect to said properiy, fire and other
types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable
endorsement in favor of Beneficiary,shall contain an endorsement that such insurance shall not be canceled
or modified without thirty(30)days advance written notice to Beneficiary, shall be for a term and in form,
content, amount, and with such companies as may be satisfactory to Beneficiary, and the policies therefor
shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance
of Trustor hereunder.
At least thirty(30)days prior to the expiration of any insurance policy,a policy or policies renewing
or extending such expiring insurance shall be delivered to Beneficiary together with written evidence
showing payment of the premium therefor and, in the event any sucl� insurance policy and evidence of the
payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor, by executing this
Deed of Trust, specifically requests Beneficiary to obtain such insurance and Beneficiary, without
obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any
obligation hereof,may obtain such insurance through or from any insurance agency or company acceptable
to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby,which
amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or
any other person,any information contained in or extracted from any insurance policy theretofore delivered
to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee
nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies,or for
any insolvency of any insurer or insurance underwriter. In case of insurance loss, Benef`iciary is hereby
authorized either(a)upon prior notice to Trustor,to settle and adjust any claim under the insurance policies
provided for in this document without the consent of the Trustor, or(b)to allow Trustor to agree with the
insurance company or companies on the amount to be paid upon the loss. In either case,the Beneficiary is
authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or
replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which
are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in
cancellation or tennination of such lease, such proceeds, after deducting therefrom any expenses incurred
in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the
buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of
the Trustor, shall either be used for the cost of rebuilding or restoring the building or improvements on said
premises or applied in reduction of the indebtedness secured hereby whether due or not. If Trustor elects
to apply such proceeds to a reduction of the indebtedness secured hereby such application shall be in such
order as Beneficiary may determine. Such buildings and improvements shall be so restored or rebuilt as to
be of at least equa( value and substantially the same character as prior to the damage or destruction, and
shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all
unexpired insurance shall inure to the benefit of,and pass to the purchaser of,the property conveyed at any
Trustee sale held hereunder.
3. To pay: (a)all general and special City and County taxes affecting such property;(b)when
due, all special assessments for public improvements, without permitting any improvement bond to issue
for any special assessment; (c) when due, all encumbrances, charges and liens, with interest, on said
property, or any part tl�ereof, which are or appears to be prior or superior hereto; (d) if the security of this
Deed of Trust is a leasehald estate,to make any payment or do any act required of the Lessee or its successor
in interest under the terms of the instrument or instruments creating said leasehold; (e) all costs, fees and
expenses of this trust; (fl for any statement regarding the obligation secured hereby any amount demanded
by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made;
(g)such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any
successor in interest to Trustor as the Beneficiary may deem reasonable.
If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor,
any tax is due or becomes due in respect to the issuance of the Note hereby secured,the Trustor covenants
and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such
payment, Beneficiary may elect to make such payment and any amount so paid may be added by
Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest.
4. That, should Trustor fail to make any payment or do any act as provided in this Deed of
Trust, then Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon
Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such
manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or
Trustee being authorized to enter upon said property for such purposes;(b)commence,appear in,or defend
any action or proceeding purporting to affect the security hereof or the properiy covered by this Deed of
Trust, or the rights or powers of Beneficiary or Trustee; (c) pay, purchase, contest, or compromise any
encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto;
and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable
fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so,
expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a (ike rate of
interest. This provision is not intended to curtail the right of Trustor to contest any such payment in good
faith.
5. To perform each agreement of Trustor contained in any Development Funding Agreement
(including without limitation the Exhibits thereto) entered into between Trustor and Beneficiary for the
development, construction of improvements, adoption of rent restrictions or other affordability covenants,
or operation of certain activities on the above-described property.
6. To appear in and defend any action or proceeding purporting to affect the security hereof
or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee,
and whether or not Trustor so appears or defends,to pay all costs and expenses, including cost of evidence
of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiaiy or
Trustee may appear by virtue of being made a party defendant ot• otherwise irrespective of whether the
interest of Beneficiary or Trustee in such property is directly questioned by such action, including any
action for the condemnation or partition of said premises,and in any suit brought by Beneficiary to foreclose
this Deed of Trust.
7. To pay immediately and without demand, all sums expended under the terms of this Deed
of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate that the principal
obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall
be secured hereby.
8. That, should the Trustor or any successor in interest to Trustor in such property drill or
extract, or enter into a lease for dri11ii1g or extraction of oil, gas, or other hydrocarbon substances or any
mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any part
thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way,
whether voluntarily or involuntarily except as allowed by the Agreement, Beneficiary shall have the right,
at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date
specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall
be effective unless in writing.
9. That any award, settlement, or damages for injury or damages to such property, or in
connection with the transaction financed by such loan, and any award of damages in connection with any
condemnation for public use of or injury to said property, or any part thereof, is hereby assigned and shall
be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the
same effect as above provided for the disposition of proceeds of fire or other insurance.
10. That,by accepting payment of any sum secured hereby after its due date,or by making any
payment, or performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to
make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby,
Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or
to declare a default for failure so to pay.
I 1. That at any time, or from time to time, without liability of the Beneficiary or Trustee
thereof, and without notice,upon written request of Beneficiary and presentation of this Deed of Trust and
any Note secured hereby for endorsement, and without affecting the personal liability of any person for
payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said
property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers
of Beneficiary or the Trustee with respect to the remainder of said property,Trustee may: (a)reconvey any
part of said property;(b)consent to the making of any map or plat thereof;(c)join in granting any easement
thereon; (d)join in any agreement subordinating the lien or charge hereof.
12. That the lien hereof shall remain in full force and effect during any postponement or
extension of time of payment of the indebtedness secured hereby, or any part thereof.
13. That upon written request of Beneficiary stating that all sums secured hereby have been
paid, and upon surrender of this Deed of Trust and said Note or Notes to Trustee for cancellation and
retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive evidence of the
truthfulness thereof. The grantee in such reconveyance may be described as "the person or pet•sons legally
entitled thereto." Such request and reconveyance shall operate as a re-assignment of the rents, issues,
royalties and profits hereinafter assigned to Beneficiary. Five (5) years after issuance of such full
reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to
retain them).
14. That as additional security,Trustor irrevocably assigns to Beneficiary the rents, issues,and
profits of the property affected by this Deed of Trust for the purposes and upon the terms and conditions
set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the
property affected by this Deed of Trust, ar cause Beneficiary to be (a) "mortgagee in possession" far any
pui-pose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c)
responsible for any waste committed by lessees or any other parties, for any dangerous or defective
condition of the property affected by this Deed of Trust,or for any negligence in the management,upkeep,
repair,or control of such property. This is an absolute assignment, not an assignment for security only, and
Beneficiary's right to rents, issues, and profits is not contingent upon, and may be exercised without
possession of,the property affected by this Deed of Trust.
Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues, and
profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence
of a default hereunder. Upon such default,the License shall be automatically revoked and Beneficiary may
collect and retain the rents, issues, and profits without notice and without taking possession of the property
affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary
or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor
termination of the License, shall impose upon City or Trustee the duty to produce rents, issues, or profits
or maintain all or any part of the property affected by this Deed of Trust. If Trustor shall default as aforesaid,
Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without
taking possession of the property affected hereby,to collect all rents, issues,royalties, and profits and shall
be authorized,and may,without notice and irrespective of whetl�er declaration of default has been delivered
to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either
personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed
by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make, cancel,
enforce, and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to
sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property
affected hereby, and after paying such costs of maintenance, operation of said property, and of collection
including reasonable attorneys'fees, as in its judgment it may deem proper,to apply the balance upon any
indebtedness then secured hereby, the rents, issues, royalties, and profits of said property being hereby
assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties, and profits shall
not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust
or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to
time, to collect any such rents, issues, royalties, or profits shall not in any manner affect the subsequent
enforcement by Beneficiary of the right,power and authority to collect the same.The receipt and application
by said Beneficiary of all such rents, issues, royalties, and profits pursuant hereto, after execution and
delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of
Trustee's sale proceedings hereunder,shall not cure such breach or default nor affect said sale proceedings,
or any sale made pursuant thereto, but such rents, issues, royalties, and profits, less all costs of operation,
maintenance, collection, and reasonable attorneys' fees, when received by Beneficiary, shall be applied in
reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may
determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be
constr-ued to be,an affirmation by Beneficiary of any tenancy,lease or option,nor an assumption of liability
under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option.
15. That if the security of this Deed of Trust is a leasehold estate, the Trustot� agrees that: (a)
the term "Lease" as used herein shall mean the lease creating the "leasehold estate"; (b) Trustor shall not
amend,cllange,or modify his leasehold interest,or the Lease,or agree to do so,without the written consent
of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request, or demand
received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such
notice,request or demand;(d)as long as any of the indebtedness secured hereby shall remain unpaid,unless
the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee
title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party;
(e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all
covenants, agreements, terms, conditions, and provisions under any lease affecting the premises and to
neither do anything,nor to permit anything to be done which may cause modification or termination of any
such lease or of the obligations of any lessee or person claiming through such lease or the rents provided
for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he
will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that
is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this
paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately
due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or
waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "said
property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context
so requires for the protection of the Beneficiary.
16. Subject to any applicable notice and cure rights,any default by Trustor in payment of any
indebtedness secured hereby or performance of any covenant or condition set fortl� in a Development
Agreement between Trustor and Beneficiary sllall constitute a default under this Deed of Trust, and upon
default by Trustor under the terms of any encumbrance, charge, or lien which is or appears to be prior or
superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery
to Trustee of written declaration of default and demand for sale of written notice of default and of election
to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary shall
also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures
secured hereby.After the lapse of such time as then may be required by law following recordation of such
notice of default,and notice of sale having been given as then required by law,Trustee,without demand on
Trustor, shall sell said property at the time and place fixed by it in such notice of sale,whether as a whole
or in separate parcels,and in such order as it may determine,at public auction to the highest bidder in lawful
money of the United States,payable at time of sale. Trustee may postpone sale of all or any portion of said
property by public announcement at such time and place of sale, and from time to time thereafter may
postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall
deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty,
express or implied. The recital in such Deed of any matters of fact shall be conclusive evidence of the
truthfulness thereo£ Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may
purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate
stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale.
(Beneficiary at its option may also foreclose on such shares by independent pledge sale,and Trustor waives
dem�nd and notice of such sale.)After deducting all costs,fees and expenses of Trustee,and of this Trust,
including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to
payment, first, of all sums expended under the terms hereof, not then repaid, with accrued interest at the
rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and,
if there are any proceeds remaining, shall distribute them to the person or persons legally entitled tllereto.
17. To waive, �o the fullest exteiit permissible by law, the right to piead any statute of
limitations as a defense to any demand secured hereby.
18. That Beneficiary may, from time to time, by instrument in writing, substitute a successor
or successors to any Trustee named herein or acting hereunder, wliich instrument, executed and
acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where
such property is situated, shall be conclusive proof of property substitution of such successor Trustee or
Trustees,who shall,without conveyances from the Trustee predecessor,succeed to all its title,estate,rights,
powers,and duties, including but not limited to the power to reconvey the whole or any part of the property
covered by this Deed of Trust. Such instrument must contain the name of the original Trustor,Trustee,and
Beneficiary hereunder, and the book and page where this Deed of Trust is recorded. If notice of default
shall have been recorded, this power of substitution cannot be exercised until after the costs, fees, and
expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof
upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of
other provisions for substitution provided by law.
19. That this Deed of Trust applies to, inures to the benefit of,and binds all parties hereto,their
heirs, legatees, devisees, administrators, executors, transferees, successors, and assigns. The term
Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or
not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine
gender includes the feminine and/or neuter, and the singular number includes the plural.
20. Trustor agrees to file with Beneficiary annually during October of each calendar year a
written opei�ational report which concerns the fiscal year ending on the immediately preceding June 30th
and confonns to the standards set forth by the Participating Jurisdiction and 24 CFR Part 92 (with respect
to the real property first described in this Deed of Trust) necessary or convenient for Beneficiary to make
the annual reports.
21. That in the event of a demand for, and the preparation and delivery of a written statement
regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil
Code of California (or successor statutes), Beneficiary shall be entitled to make a reasonable charge, not
exceeding the maximum amount which is permitted by law at the time the statement is furnished.
Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered
in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's
records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said
property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary
and replacing the same with another such policy.
22. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged,
is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending
sale under any other Deed of Trust or of any action or proceeding in which Trustor,Beneficiary,or Trustee
shall be a party unless brought by Trustee.
23. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment
of any indebtedness secured hereby,Trustor agrees to pay said fee, if any,if said indebtedness shall be paid �
prior to the due date thereof stated in said Note or this Deed of Trust even if and notwithstanding that
Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and
Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable.
24. That Trustor has made certain representations and disclosures in order to induce
Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures,
and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact,
Beneficiary at its option and without notice,shall have the right to declare the indebtedness secured hereby,
irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on
failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph
No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth
facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all
facts and statements therein, and to act thereon hereunder. Any notice which any party hereto may desire
or be required to give to the other party shall be in writing. The mailing thereof must be certified mail
addressed to the Trustor at his address herein above set forth or to the Beneficiary at his office or at such
other place as such parties hereto may designate in writing.
THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any
notice of sale hereunder be mailed to him at his address hereinbefore set forth.
Dated: June 8, 2023
Signature of Trustor(s):
PIPER WAY SENIOR HOUSiNG LP,
a California limited partnership
By: PWS Housing, LLC,
a California limited liability company,
its General Partner
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By
Sidney Stone,
Vice President of Real Estate Development
This document must be notarized.
�XHIBIT 2C
FREE RECORDING IN ACCORDANCE WITH
CALIFORNIA GOVERNMENT CODE
SECTION 27383
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Redding — Housing Division
P.O. Box 496071
Redding, CA 96049-6071
Attn: CDBG-DR MHP Program
�
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
COMMUNITY DEVELOPMENT BLOCK GRANT— DISASTER RECOVERY
MULTIFAMILY HOUSING PROGRAM
SENIOR REGULATORY AGREEMENT
(Affordability Restrictionsj
CONTRACT NUMBER 21-DRMHP-21008
This Senior Regulatory Agreement (Affordability Restrictions) (the "Agreement") dated
June , 2023, for reference purposes only, is made and entered into by and between Piper
Way Senior Housing LP a California limited partnership (the "Developer"), and City of Redding,
a municipal corporation (the "Subrecipient"), pursuant to the requirements of the Community
Development Block Grant- Disaster Recovery Multifamily Housing Program administered by the
Department of Housing and Community Development, a public agency of the State of California
(the "Department").
RECITALS:
A. Developer has applied to the Subrecipient's Community Develapment Block Grant —
Disaster Recovery Multifamily Housing Program for financial assistance (the
"Assistance") for the development of a rental housing development located at
Assessor's Parcel Number 104-680-003-000 in Redding, California, consisting of a total
of 60 Housing Units (the "Development"), of which 12 DR-MHP Assisted Units (the "DR-
MHP Assisted Units"} will be occupied by eligible Households as provided in this
Agreement. The Development is located on the real property described in Exhibit A hereta
(the "Property"). The Subrecipient, with the Department's approval, has agreed to
provide the Assistance under the Community Development Block Grant — Disaster
Recovery Multifamily Housing Program (the "Program") and the Program Policies and
Procedures Manual (the "DR-MHP Policies and Procedures"). The obligations imposed
on the Developer by the Program and the DR-MHP Policies and Procedures are
collectively referred to herein as the "Program Requirements."
Page 1 of 22
EXHIBIT 2C
B. Community Development Block Grant Disaster Recovery (CDBG-DR) funding was
appropriated under Public Laws 115-254 and 116-20, and awarded by the U.S.
Department of Housing and Urban Development (HUD) to the Department via Federal
Register Notice 83 FR 4681. The Department serves as the lead agency and responsible
entity for administering CDBG-DR funds. CDBG-DR supports the State of California's
unmet recovery needs related to the Federal Emergency Management Agency (FEMA)
Major Disaster Declarations DR-4407 and DR- 4382 in August 2018. HCD performed an
unmet needs assessment that covered the areas affected by DR 4407 and DR 4382, and
included data from FEMA, Small Business Administration (SBA), California's Department
of Forestry and Fire Protection (CAL FIRE), and California Department of Insurance
(CDI). The Department developed the DR-MHP Program. DR-MHP projects are funded
to assist with meeting the unmet rental housing need, including the needs of individuals
displaced from rental homes and individuals who became homeless as the result of the
disasters.
C. As required by the Program, Subrecipient and the Department have entered into that
certain Master Standard Agreement, numbered 21-DRMHP-21008, and dated August
6, 2023, which provides the overarching terms and conditions for implementing the
Program and the terms of Assistance common to all projects to be completed by the
Subrecipient (the "Master Standard Agreement").
D. As required by the Program and the Master Standard Agreement, Department has issued
to Subrecipient a Notice to Proceed for the Development, dated June , 2023_,
which provides the specific terms and conditions for the Development (the "Notice to
Proceed").
E. As required by the Program, Developer and the Subrecipient have entered into that
certain Development Agreement dated June , 2023, governing the terms and
conditions of the Development and governing the terms of the Assistance for the
Development (the "Development Agreement"). As required by the Program,
Subrecipient has made a part of the Development Agreement the DR-MHP Rider to
Development Agreement (the "Development Agreement Rider") to include terms
required by the Department for the Development.
F. In addition ta this Agreement and the Master Standard Agreement, Developer has
executed or will execute each of the following documents in form approved by the
Subrecipient:
1. A promissory note evidencing the Loan specifying, inter alia, the principal amount
thereof, the interest accruing thereon, and the terms of repayment thereof (the
"Note").
2. A deed of trust, assignment of rents, security agreement, and fixture filing securing
the Note and naming the Department as beneficiary and the Developer as trustor
and recorded or to be recorded against the Property (the "Deed of Trust"). The
Deed of Trust shall have such priority and be subject only to such matters of record
as may be approved in writing by the Department; provided, however, this
Page 2 of 22
EXHIBIT 2C
Agreement shall be senior to and have priority over the Deed of Trust and the
Senior Deed of Trust (defined belaw.)
3. The Department's customary regulatory agreement regulating and restricting the
occupancy, rents, operation, ownership and management of the Development and
Property in compliance with Program Requirements and recorded or to be
recorded against the Property (the "Junior Regulatory Agreement").
4. Such other documents and instruments as the Subrecipient and Departrnent may
reasanably require, including but not limited to, a Development Agreement.
G. The Master Standard Agreement, the Notice to Proceed, the Development Agreement,
the Develapment Agreement Rider, Ground Lease Rider (as applicable), the Junior
Regulatory Agreement, this Agreement and such other documents and instruments as
are reasonably required by the Subrecipient and Department are collectively referred to
herein as the "Program Legal Documents."
H. The senior construction and permanent loan encumbering the Property ("Senior Loan")
is from US Bank, a National banking association (the "Senior Lender") in the amount of
$24,394,689 which will be paid down at permanent-conversion to a maximum amount of
approximately $24,394,689. The Senior L.oan is evidenced by a promissory note and
secured by a deed of trust to be recorded against the Property ("Senior Deed of Trust").
The construction term of the loan is for 24 months, with certain extension rights as further
described in the Senior Lender's loan agreement with Developer ("Senior Loan
Agreement") and the Development Agreement between the Senior Lender, U.S. Bank
National Association and the Developer. The Senior Loan will be fully amortized at 20
years and due in 20 years from the conversion of the construction phase to the permanent
phase. Pursuant to applicable authority, the affordability restrictions of the Junior
Regulatory Agreement being executed and recorded against the Property must be senior
to the Senior Loan, the Senior Deed of Trust, and the Deed of Trust. Accordingly, this
Agreement, which repeats and contains such affordability restrictions, and the Junior
Regulatory Agreement shall both be executed in connection with the closing of the Loan
and recorded in a manner which ensures that this Agreement shall be prior and senior to
the Senior L.oan, the Senior Deed of Trust, the Deed of Trust, and the Junior Regulatory
Agreement.
I. As further consideration for the Assistance and in furtherance of the purposes of the
Program, Developer has agreed to enter into this Agreement and consent to its
recordation against the Development. The purpose and intent of this Agreement is to
regulate and restrict the occupancy and rents of the Development in compliance with the
Program Requirements and put such regulations on title for the term of this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Recitals. The foregoing recitals are true and correct and made a part of this Agreement.
2. PropertX. Developer is the owner in fee of the Property and all improvements now and
hereafter located thereon.
Page 3 of 22
EXHIBIT 2C
3. Definitions. Unless the context requires otherwise, or the terms are defined herein, the
terms used in this Agreement shall be governed by the definitions set forth in the Program
Policies and Procedures and Master Standard Agreement. The following terms shall have
the respective meanings assigned to them in this paragraph unless the context in which
they are used clearly requires otherwise:
a. Affordable Rents: means rents that are at or below the "High" HOME Program
rents published by HUD for different metropolitan areas.
b. Affordable Units: means a "dwelling" that is rented at an Affordable Rent to a
household that earns less than 80 percent of Area Median Income adjusted for
household size as calculated by HUD for different metropolitan areas within the
State and published annually by the Department or HUD.
c. Area Median Income (AMI): means the median family income for specific
geographic areas, adjusted for household size, as calculated by HUD, and
published annually by HCD for the CDBG program.
d. Commercial Space: any nonresidential space located in or on the property of the
Development that is, or is proposed to be, rented or leased by the owner of the
Project, the income from which shall be included in Operating Income, as
applicable, which ensures the fiscal integrity of the Development.
e. Developer Fee: All Funds paid at any time as compensation for developing the
Development, to include all development consultant fees, processing agent fees,
developer overhead and profit, construction management oversight fees if
provided by the developer, personal guarantee fees, syndicator consulting fees,
and reserves in excess of those customarily required by multi-family housing
lenders.
f. Distributions: the amount of cash or other benefits received from the operation of
the Development and available to be distributed to the Developer or any party
having a beneficial interest in the Development after payment of all due and
outstanding obligations incurred in connection with the Development.
g. Disability: any disability, including mental or physical disability, that limits a major
life activity, including a disability that falls within the definitions in Government
Code (G.C.) Sections 11135, 12926, and 12926.1 or within the definition of
disability used in the federal Americans with Disabilities Act of 1990, codified at 42
U.S.C. 12102.
h. DR-MHP Assisted Units: An Affordable Unit that is subject to rent and occupancy
restriction as a result of the financial assistance provided by DR-MHP, as specified
in this Regulatory Agreement.
i. Elderly Person: A person at least 62 years of age (24 CFR Part 5.100).
Page 4 of 22
EXHIBIT 2C
j. Extremely Low Income (E�I): ELI individuals or families whose income is at or
below 30%of the area median income (AMI) or the federal poverty level, whichever
is higher for the area of the Development.
k. Fiscal Year: the Fiscal Year for the Development shall mean the annual period
commencing on July 1 and concluding on June 30 each year.
I. Household: One or more persons occupying a housing unit.
m. Initial Operating Year: the initial period of operation of the Development, beginning
at the time of the initial occupancy of the completed project and ending on the last
day of the Fiscal Year for the Development.
n. Low-to Moderate-Income (LMI): Low to moderate income people are those having
incomes not more than the "moderate-income" level (80% Area Median Family
Income) set by the federal government for the HUD-assisted Housing Programs.
This income standard changes from year to year and varies by household siZe,
county and the metropolitan statistical area.
o. Operating Expenses: the amount approved by the Subrecipient that is necessary
to pay for the recurring expenses of the Development, such as utilities,
maintenance, management, taxes, licenses, and Supportive Services costs, but
not including debt service or required reserve account deposits.
p. Operating Income: all income generated in connection with operation of the
Development including rental income for DR-MHP Assisted Units and non-DR-
MHP Assisted Units, rental income for Commercial Space or commercial use,
laundry and equipment rental fees, rental subsidy payments, and interest on any
accaunts, other than approved reserve accounts, related to the Development.
"Operating Income" does not include security and equipment deposits, payments
to the Developer for Supportive Services not included in the operating budget, cash
contributed by the Developer, or tax benefits received by the Developer.
q. Ordinary Maintenance and Repair: means regular or usual care, upkeep or
replacement of any part, or putting back together that which is deteriorated or
broken, of an existing property, building or structure to affect the maintenance af a
decent, safe, sanitary condition.
r. Project Closeout Documentation: required documentation to be submitted to the
Department by the Subrecipient and includes, but is not limited to: project
completion report, final activity report, recorded notice of completion, relocation
repor� (if applicable) and a resolution from the governing body.
s. Reconstruction: Demolishing and re-building a housing unit on the same lot in
� substantially the same manner. Reconstruction is rehabilitation for purposes of
DR-MHP.
t. Rehabilitation: Repair or restaration of housing units in the disaster-impacted
areas to applicable construction codes and standards.
Page 5 of 22
EXHIBIT 2C
u. Rent: means all mandatory charges, other than deposits, paid by the tenant for the
use and occupancy of a DR-MHP Assisted Unit, plus a utility allowance established
in accordance with HOME Regulations at 24 CFR 92.252(a).
v. Restricted Unit: DR-MHP Assisted Units and any units that are subject to Rent and
occupancy restrictions that are comparable to those applicable to DR-MHP
Assisted Units. Restricted Units include units subject to a TCAC regulatory
agreement, and all units subject to similar long-term, low-income or occupancy
restrictions imposed by other public agencies.
w. Special Needs or Special Needs Populations: means agricultural workers,
individuals living with physical or sensory disabilities and transitioning from
hospitals, nursing homes, development centers, or other care facilities; individuals
living with developmental disabilities, serious mental illness or substance abuse
disorders; individuals who are survivors of domestic violence, sexual assault, and
human trafficking; individuals who are experiencing Homelessness; individuals
with HIV; homeless youth as defined in Government Code (GC) Section
12957(e)(2); families in the child welfare system for whom the absence of housing
is a barrier to family reunification, as certified by a county; frequent users of public
health or mental health services, as identified by a public health or mental health
agency; Frail Elderly Persons; or other specific groups with unique housing needs
as determined by the Department. "Special Needs Populations" do not include
seniors unless they otherwise qualify as a Special Needs Population.
x. Substantial Rehabilitation: Rehabilitation as defined in 24 CFR 5.100.
y. Supportive Housing: means housing with no limit on length of stay, that is occupied
by the target population and that is linked to onsite or offsite services that assist
the Supportive Housing resident in retaining the housing, improving his or her
health status, and maximizing his or her ability to live and, when possible, work in
the community.
z. Supportive Services: social, health, educational, income support and employment
services and benefits, coordination of community building and educational
activities, individualized needs assessment, and individualized assistance with
obtaining services and benefits.
aa. TCAC: means the California Tax Credit Allocation Committee.
bb. Uniform Relocatian Assistance and Real Property Acquisition Act (URA) (42
U.S.C. Chapter 61): A federal law that establishes minimum standards for federally
funded programs and Projects that require the acquisition of real property (real
estate) or the displacement of persons from their homes, businesses, or farms.
cc. Unit: A residential unit that is used as a primary residence by its occupant.
4. Compliance with Program Requirements. The Developer agrees that at all times its
actions regarding the Development and the use of funds provided under the Master
Page 6 of 22
EXHIBIT 2C
Standard Agreement and the Notice to Proceed shall be in conformity with all Program
Requirements, including the requirements of this Agreement and the Program Legal
Documents. The Developer acknowledges that it is familiar with the Program
Requirements, the requirements imposed on the Developer in the Program Legal
Documents, and has access to professional advice to the extent necessary to enable the
Developer to fully comply with the Program Requirements and the applicable provisions
of the Program Legal Documents.
5. Term of Rqreement. This Agreement shall commence on the date hereof and remain in
full force and effect and shall apply to the Development through and including the
twentieth (20t") anniversary of the date of Department acceptance of the Project Closeout
Documentation hereof regardless of any prepayment of the Loan or sale, assignment,
transfer, or conveyance of the Development or the Property, unless terminated earlier by
the Department or extended by the mutual consent af the parties.
6. DR-MHP Assisted Units Restricted Units Special Needs Populations Units and
Supportive Housing Units.
a. For the full term of this Agreement, Developer shall provide within the
Development, the number, type, and size of DR-MHP Assisted Units set forth in
Exhibit B, Part II, attached hereto and incorporated herein.
b. Restricted Units shall not differ substantially in size or amenity level from non-
Restricted Units within the Development with the same number of bedrooms, and
Restricted Units shall not be segregated from non-Restricted Units.
c. Within the limits of subparagraph b. abave, and subject to the requirements of
subparagraph a. above, Develaper may change the designation of a particular Unit
from DR-MHP Assisted Unit to non-Assisted Unit, and vice versa, over time, only
to address situations when a tenar�t in a DR-MHP Assisted Unit is no longer
qualified to reside in that unit or if the unit is no longer habitable. Any other
proposed changes to the unit designation must be approved in writing in advance
by the Subrecipient.
7. Affirmative Marketinq and Tenant Selection Procedures. Affirmative Marketing involves
special outreach and advertising efforts designed to communicate the availability of DR-
MHP assisted housing to those groups or individuals who might otherwise be unlikely to
apply. Affirmative marketing efforts must be commenced by the Developer at least 90
days prior to initial or renewed occupancy for new construction and Substantial
Rehabilitation Prajects, respectively. The Department has determined that in addition to
the required demographic analysis, individuals and families that were impacted by the
disasters and Section 8 Housing Choice Voucher holders are least likely to apply.
Examples of renters impacted by the disasters include renters that have lost rental units
or have been displaced due to the impacts of DR-4407 and DR-4382. The Affirmative
Marketing Plan shall be updated and submitted to Subrecipient for approval every five (5)
years during the term of this Agreement.
Developer shall rent DR-MHP Assisted Units in the Development to Eligible Households
and otherwise operate the Property in accordance with the Management Plan developed
Page 7 of 22
EXHIBIT 2C
by the Developer and approved by and on file with the Subrecipient and Department (the
"Management Pian") pursuant to paragraph 13 of this Agreement. The Management
Plan shall, at minimum:
a. detail actions to be taken by Developer to affirmatively market all Units in a manner
that ensures equal access to all persons in any category protected by federal,
state, or local laws governing discrimination and without regard to any arbitrary
factor;
b. specify reasonable criteria for determination of tenant eligibility, including
household size;
c. require that eligible tenants be selected based on order of application, lottery, or
other reasonable method approved by the Subrecipient;
d. require eligible applicants to be notified of eligibility and, based on turnover history,
when a Unit may be available;
e. require ineligible applicants to be notified of the reason for their ineligibility;
f. specify procedures through which applicants deemed to be ineligible may appeal
this determination;
g. require maintenance of a waiting list of eligible applicants;
h. specify procedures for obtaining information regarding prospective tenants'
incomes as necessary to certify that such income does not exceed the income limit
limitations; and
i. be made available to prospective tenants upon request.
8. Non-Discrimination. Developer shall not discriminate against any tenant or prospective
tenant on the basis of any class or status prohibited by Government Code section 12920
and United States Code 42 U.S.0 section 3601 — 3019, including: race, color, religion,
sex, gender, gender identity, gender expression, sexual orientation, marital status,
national origin, ancestry, familial status, source of income, disability, genetic informatian,
or any other arbitrary factor in violation of any federal, state, or local law governing
discrimination in rental housing. The restriction of housing to elderly and Special Needs
Populations is permitted where the housing is intended to benefit those targeted groups
in compliance with applicable law and only with prior approval of the selection criteria by
the Subrecipient.
9. Rental Aqreement and Occupancv Procedures.
a. Each Eligible Household selected to occupy a DR-MHP Assisted Unit in the
Development shall enter into a written rental or occupancy agreement with the
Developer, the form of which shall be subject to approval by the Subrecipient and
be consistent with the Program Requirements. Such rental agreement shall, inter
alia, provide for good cause eviction, reference the appeal and grievance
Page 8 of 22
EXHIBIT 2C
procedures set forth in the Management Plan, and require the tenant annually
recertify household income and size.
b. The Developer may establish reasonable rules of conduct and occupancy. Such
rules shall be consistent with state law and the Program Requirements and shall
not distinguish or discriminate between Restricted Units and non-Restricted Units.
The rules shall be in writing and shall be given to each tenant upon occupancy.
Any change to such rules shall become effective no less than thirty (30) days after
giving written notice thereof to each household in the Development.
10. DR-MHP Assisted Unit Rents and Maximum Income.
a. For the Initial Operating Year, Developer shall charge Rents for the
DR-MHP Assisted Units in the Development in accordance with Exhibit B hereto.
b. After the Initial Operating Year, Rents for DR-MHP Assisted Units may be adjusted
no more often than every twelve (12) months. Developer shall provide tenants of
DR-MHP Assisted Units not less than 30 days prior written notice, or a longer
period as required by state or local law, before implementing any increase in rents.
In no event shall the rents exceed the High HOME Rents as designated for the
area and published by HUD. If the Project is assisted with tax credits, the amount
and method of rent adjustment far DR-MHP Assisted Units shall be in accordance
with the Tax Credit Allocation Committee (TCAC) policy or a longer period as
required by state or local law.
c. Notwithstanding the previous subparagraph, Rents for DR-MHP Assisted Units
subsidized under section 8 of the Housing Act of 1937 or any comparable federal
or state rental assistance program may be adjusted as required by the respective
rental assistance program, for as long as the DR-MHP Assisted Units continue to
receive the rental assistance.
d. For DR-MHP Assisted Units in the Develapment that are covered by approved
project-based rental assistance (if applicable), the Developer shall:
(1) In good faith timely apply for and accept all available renewals of project-
based rental assistance; and
(2) If the project-based rental assistance is terminated, Rents for DR-MHP
Assisted Units previously covered by this assistance, with written
permission from the department, may be increased, but only to the minimum
extent required for project feasibility, as determined by the Subrecipient and
Department in their discretion. In addition, Rents for DR-MHP Assisted
Units designated in Exhibit B, shall not in any event be increased to an
amount in excess of the high HOME rent limit for the county, as published
by the Department.
e. The maximum income of a Household occupying a DR-MHP Assisted Unit shall
not exceed eighty percent (80%) of the Area Median Income at initial Household
Page 9 of 22
EXHIBIT 2C
income certification, consistent with Section 4.11 of the DR-MHP Policies and
Procedures.
11. Certification of Tenant Income and Household Size.
a. The income and household size of all households occupying DR-MHP Assisted
Units shall be certified by the Developer prior to occupancy and recertified annually
thereafter in the manner specified in the Development's approved Management
Plan and in accordance with applicable rules, regulations, and procedures
governing the Program.
b. If, at the time of tenant recertification, the income of a household occupying a DR-
MHP Assisted Unit exceeds the income level applicable to new tenants for
respective DR-MHP Assisted Units, and, to the extent a rent increase for the
household is permitted by statutes and regulations, the Developer shall:
(1) Increase the tenant's rent to the lesser of 30 percent of adjusted income,
fair market rent, or the rent lirnitations of other funding programs governing
the unit; and
(2) To the extent another non-DR-MHP Assisted Unit becomes available within
the Development, designate the next available comparable non-DR-MHP
Assisted Unit as a DR-MHP Assisted Unit at the income level originally
applicable to the Household until the unit mix required by this Agreement is
achieved. A Housing Unit shall be deemed "comparable" if it has the same
number of bedrooms, the same or similar features, and is similar is size to
the original DR-MHP Rssisted Unit.
c. At any time, and from time to time during the term of this Agreement, the
Department or Subrecipient or their designee(s) may, upon reasonable notice to
Developer and accompanied by a representative of Developer, enter and inspect
the physical premises of the Development and the Property and inspect and copy
all accounting records pertaining to the Development's or Property's compliance
with the covenants and agreements set forth in this Agreement and other Program
Legal Documents. Upon request by the Department or Subrecipient, the Developer
shall notify occupants of upcoming inspections of their Units in accordance with
state law.
12. Manaqement and Maintenance.
a. Developer is responsible for all maintenance, repair, and management functions,
including without limitation, the following: selection of tenants; recertification of
family income and size; evictions; collection of Rents; ordinary and extraordinary
maintenance and repairs; and replacement of capital items. Developer shall
maintain all Units, common areas and Commercial Space in a safe and sanitary
manner in accordance with local health, building, and housing codes and the
Management Plan described above.
Page 10 of 22
EXHIBIT 2C
b. Developer is responsible for operating the Development in accordance with the
Management Plan. All amendments to this plan require prior written approval of
the Subrecipient.
c. Developer may, with the prior written approval of the Subrecipient, contract with a
management agent for the performance of the services or duties required in
subparagraphs a. and b. of this paragraph. However, such an arrangement does
not relieve the Developer of responsibility for proper and timely perFormance of
these duties. Such contract shall be subject to prior written approval by the
Subrecipient and shall contain a provision allowing the Developer to terminate the
contract without penalty upon no more than thirty (30) days' notice. Upon a
determination by the Subrecipient, and notice to the Developer thereof, that the
contractor performing the functions required in subparagraphs a. and b. of this
paragraph has failed to operate the Development in accordance with this
Agreement and the approved Management Plan, the Developer shall exercise
such right of termination forthwith and make immediate arrangements, which shall
be subject to Subrecipient approval, for continuing performance of the functions
required in subparagraphs a. and b. of this paragraph.
d. Upon a determination by the Subrecipient, and notice to the Developer thereof,
that the Developer has failed to operate the Development in accordance with this
Agreement, the Subrecipient may require the Developer to contract with a qualified
management agent to operate the Development, or to make such other
arrangements as the Subrecipient deems necessary to ensure perFormance of the
functions required in subparagraphs a. and b. of this paragraph.
e. Developer shall operate, maintain and repair both Restricted and non-Restricted
Units equally without regard to their designation as Restricted Units or non-
Restricted Units.
13. Periodic Reports.
Developer shall submit to the Subrecipient such periodic reports as deemed necessary
by the Subrecipient and the Department to monitor the Developer's compliance with the
affordability provisions of this Agreement. The reports may include, but are not limited to:
a. an income and expense statement for the reporting period;
b. a summary of the occupancy of the Development, indicating the number and type
of Units reserved for eligible Households, the number of vacant Units, income
recertification, and the number of evictions completed or in process;
c. a report on maintenance or other issues anticipated to impact the current budget
needs of the Development;
d. information on the status of waiting lists for the DR-MHP Assisted Units, including
the number of households on lists for different Unit sizes and by income group, as
well as evidence of compliance with Project's Affirmative Marketing Plan; and
Page 11 of 22
EXHIBIT 2C
e. any other information as required by the Subrecipient to accurately monitor
Developer's performance hereunder.
14. Violation of Agreement by Developer.
a. In the event of the Developer's breach, violation, or default in the perFormance of
any covenant, agreement, or obligation of the Developer set forth in this
Agreement, the Subrecipient shall give the Developer written notice in the manner
specified in this Agreement, specifying the nature of the violation, breach, or
default and the action needed to cure. If the default, breach, or violation is not
cured to the reasonable satisfaction of the Subrecipient pursuant to paragraph 15
below, the Subrecipient may declare a default hereunder and may, as its exclusive
remedy pursuant to this Agreement or applicable law, apply to a court af applicable
jurisdiction to seek Equitable Relief (as defined below). As defined herein,
"Equitable Relief° shall mean seeking, applying for, pursuing, and obtaining any
one or more of the following:
(1) An order for specific performance enforcing the covenants, agreements,
and obligations of the Developer set forth herein, and in connection
therewith, Developer acknowledges and agrees that the injury to the
Subrecipient or Department arising from a failure or default under this
Agreement would be irreparable and that the amount of compensation,
which would provide adequate relief to the Subrecipient or Department, in
light of the purposes and requirements of the Program, would be impossible
to ascertain;
(2) A temporary restraining order, preliminary injunction, or permanent
injunction with respect to or against the breach or violation of the covenants,
agreements, and obligations set forth herein;
(3) Declaratory Relief;
(4) Conducting a Subrecipient or Department investigation or holding a
Subrecipient or Department hearing to determine whether or what action, if
any, is appropriate with respect to the project; and/or
(5) Seeking the payment and/or reimbursement of any and all court costs,
attorneys' fees, witness fees, and the like incurred by the Subrecipient or
Department in pursuing any or all of the foregoing.
(6) Seek such other appropriate remedies as may be available under the law.
b. The Equitable Relief remedies af the Subrecipient or Department referenced
above are cumulative and non-exclusive, and the exercise of one or more of such
remedies shall not be deemed an election of remedies and shall not preclude the
exercise by the Subrecipient or Department of any one or more of its other
remedies hereunder. The Subrecipient or Department hereby waives the right to
seek any other remedy here under for breach, violation, or default of any of the
Page 12 of 22
EXHIBIT 2C
covenants set forth in this Agreement, provided, however, notwithstanding the
foregoing or any other provision of this Agreement:
(1) The limitations of rights to Equitable Relief as provided above shall apply
solely and exclusively to breaches, defaults, and violations of this
Agreement only;
(2) The limitations on remedies set forth herein shall not limit what causes of
action may be plead but shall circumscribe the relief available thereunder;
(3) The limitations set forth herein do not apply to the Junior Regulatory
Agreement, or any of the other Loan Documents, or other actions at law
that are not brought as a contract cause of action premised on this
Agreement;
(4) Nothing contained herein shall restrict a court of competent jurisdiction from
providing, on its own motion, any other remedial relief or orders with respect
to any breach, violation, or default of the terms of this Agreement in addition
to that contemplated by subsections (1),(2),(3),(4) and (5} of subparagraph
a. of this paragraph..
(5) The tenants of the Assisted Units shall be considered third party
beneficiaries of this Agreement and shall have such rights to seek Equitable
Relief as set forth above as may be available to third party beneficiaries
under the law.
15. Time to Cure. If a breach, violation, or default occurs with respect to the covenants set
forth in this Agreement, prior to exercising the exclusive remedy described in paragraph
14 hereunder, the Subrecipient shall give Developer and its limited partner (if applicable)
written notice of such default. If the default is reasonably capable of being cured within
thirty (30) days, Developer shall have such period to effect a cure prior to exercise of the
Subrecipient's remedy. If the default is such that it is not reasonably capable of being
cured within such 30-day period and if Developer(a) initiates corrective action within said
period, and (b) diligently, continually, and in good faith works to effect a cure as soon as
possible, then Developer shall have such additional time, not to exceed an additional 180
days, to cure the default prior to exercise of the remedy by the Subrecipient. If Developer
or its successor in interest is a limited partnership, if Developer fails to take corrective
action or to cure the default within such a specified time, the Subrecipient shall give
Developer written notice thereof, whereupon the limited partner may remove and replace
the general partner with a substitute general partner who shall effect a cure within a
reasonable time thereafter in accordance with the foregoing provisians.
16. Assiqnment af Subrecipient Riqhts. The Subrecipient retains the right at its sole discretion
to assign all or part of its rights under this Agreement to another governmental entity or
agency for the purpose of ensuring compliance and enforcement of Developer's duties
and obligations hereunder. In addition, the Subrecipient may designate or hire an agent
to act on its behalf in monitoring compliance and enforcing the provisions hereof. In the
event Subrecipient assigns all or part of its rights for the purpose of ensuring compliance
and enforcement, or designates or hires an agent ta act on its behalf with respect to
Page 13 of 22
EXHIBIT 2C
monitoring and enforcement as described in this paragraph, Subrecipient shall remain
obligated under, and ultimately responsible for fulfilling, the terms of this Agreement, and
no such assignment shall relieve Developer of any of its duties or obligations under this
Agreement or any of the other Program Legal Documents.
17. Amendment. This Agreement shall not be altered or amended except in writing, executed
between or among all the parties hereto, with prior written approval by the Department.
18. Partial Invaliditv. If any provision of this Agreement shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
19. Binding on Successors. This Agreement shall bind, and the benefits hereof shall inure to,
the respective parties hereto, their legal representatives, executors, administrators,
transferees, successors in interest and assigns, pravided, however, that the Developer
may not assign this Agreement or any of its obligations hereunder, voluntarily or by
operation of law, without the prior written approval of the Subrecipient. The term
"Developer" as used herein shall include and apply to any person or entity succeeding to
the legal, equitable, proprietary, or possessory interest of Developer in the Development.
20. Recordinq Aqreement. This Agreement, and all amendments hereto, shall be executed
by each of the parties and their respective signatures acknowledged. This Agreement
shall be recorded against the Property in the official records of the county(ies) in which
the Development is situated, prior and superior to the lien of the Senior Lender, the Senior
Deed of Trust, and all other matters of record except as may be approved by the
Department, before construction begins, but not more than 180 days subsequent to the
issuance of a Notice to Proceed by the Department.
21. Indemnification of Department; Civil Code $1542 Waiver.
a. Developer agrees to indemnify and defend the Department and its agents,
employees and officers against, and hold the Department and its agents,
employees and officers harmless from, any and all costs, losses, damages,
liabilities, claims, demands, actions, judgments, court costs and legal or other
expenses (including attorneys' fees) of every name, kind and description, which
the Department may incur as a direct or indirect consequence of any of the
following: (1)the making of the Assistance to the Developer; (2) Developer's failure
to perform any obligations as and when required by this Agreement or any of the
other Program Legal Documents; (3) any failure at any time of any of Developer's
representations or warranties to be materially true and correct; {4) any act or
omission by Developer, any contractor, subcontractor, material supplier, engineer,
architect or other person or entity with respect to the Property or the construction,
management, maintenance or operation of the Development; or (5) the presence
of any recognized environmental conditions at the Development or on the Property.
Developer shall pay immediately upon the Department's demand any amounts
owing under this indemnity together with interest from the date the indebtedness
arises until paid at the rate of ten percent (10%) per annum. Developer's duty to
indemnify and hold harmless includes the duties to defend as set forth in section
2778 of the Civil Code. Developer shall indemnify and hold harmless the
Page 14 of 22
EXHIBIT 2C
Department and its agents, officers and employees as set forth herein regardless
of the existence or degree of fault or negligence whether active or passive, primary
or secondary on the part of the Department, the Subrecipient, or their respective
agents, officers, employees, contractors or subcontractor; provided, however, that
Developer's duty to indemnify and hold harmless hereunder shall not extend to
liability arising from the gross negligence or willful misconduct of the Department.
Developer's duty to indemnify and defend the Department shall survive the term of
this Agreement. In the event the United States Department of Housing and Urban
Development ("HUD") acquires title to the Development, this indemnification
provision will not apply to HUD.
b. The Developer waives and releases any and all rights to any types of express or
implied indemnity against the Department or its agents, officers, or employees.
c. The Developer expressly waives the protections of section 1542 of the Civil Code
in relation to subparagraphs a. and b. above. Said section 1542 provides as
follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN
BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY".
22. Indemnification of Subrecipient; Civil Code §1542 Waiver .
a. Developer agrees to indemnify the Subrecipient and its agents, employees and
officers ag�inst, and holds the Subrecipient and its agents, employees and officers
harmless from, any losses, damages, liabilities, claims, actions, judgments, court
costs and legal or other expenses (including attorney's fees) of every name, kind
and description, which the Subrecipient may incur as a direct or indirect
consequence of: (1) the making of the Assistance to the Developer; (2)
Developer's failure to perform any obligations as and when required by this
Agreement or any af the other Program Legal Documents; (3) any failure at any
time of any of Developer's representations or warranties ta be materially true and
correct; (4) any act or omission by Developer, any contractor, subcontractor,
material supplier, engineer, architect or other person ar entity with respect to the
Property or the construction, management, maintenance or operation of the
Development; or (5) the presence of any recognized environmental conditions at
the Development or on the Property. Developer shall pay immediately upon the
Subrecipient's demand any amounts owing under this indemnity together with
interest from the date the indebtedness arises until paid at the rate of ten percent
(10%) per annum. Developer's duty to indemnify and hold harmless includes the
duties to defend as set forth in section 2778 of the Civil Code. Developer shall
indemnify and hold harmless the Subrecipient and its agents, officers and
employees as set forth herein regardless of the existence or degree of fault or
negligence whether active or passive, primary or secondary on the part of the
Subrecipient, or their respective agents, officers, employees, contractors or
subcontractor; provided, however, that Developer's duty to indemnify and hold
harmless hereunder shall not extend to liability arising from the gross negligence
or willful misconduct of the Subrecipient. Developer's duty to indemnify the
Page 15 of 22
EXHIBIT 2C
Subrecipient shall survive the term of this Agreement. In the event HUD acquires
title to the Development, this indemnification provision will nat apply to HUD.
b. The Developer waives and releases any and all rights to any types of express or
implied indemnity against the Subrecipient or its agents, officers or employees.
c. The Developer expressly waives the protections of section 1542 of the Civil Code
in relation to subparagraphs a. and b. above. Said section 1542 provides as
follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE
AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED
PARTY.".
22. No Waiver. No waiver by the Department or Subrecipient of any breach or violation of or
default under this Agreement shall be deemed to be a waiver of any other or subsequent
breach or violation thereof or default thereunder. All waivers must be in writing and signed
by the party making the waiver in order for such waiver ta be effective.
23. Captions. The captions used in this Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit, or describe the scope or the
intent of this Agreement.
24. Governinq Law. This Agreement shall be construed in accordance with and governed by
the laws of the State of California. All code references herein refer to the California Codes,
unless specifically indicated otherwise.
25. Notice. Except for any notice required under applicable law to be given in another manner,
any notices, demands, or communications between the parties hereto shall be sufficiently
given if, and shall not be deemed given unless, dispatched by certified mail, postage
prepaid, return receipt requested, or delivered by express delivery service with delivery
receipt, to the address of the respective party as set forth below or to such other address
as the respective party may have designated by written notice given to the other party in
the manner provided herein. Such written notices, demands, and communications shall
be effective on the date shown on the delivery receipt as the date delivered, the date on
which delivery was refused, or the date on which delivery was attempted.
Address for Notice:
777 Cypress Avenue
Redding, CA 96001
Copies of any and all notices of default and any and all other notices that may be given by
the Department or Subrecipient to Developer shall be sent, in the same manner as the notice
is given to Developer, to Developer's limited partner (if applicable).
Piper Way Senior Housing LP
3592 Piper Way
Redding, CA 96001
Page 16 of 22
EXHIBIT 2C
Developer's limited partner may change its address for receipt of copies of notices by
giving notice in writing stating its new address to the Department or Subrecipient.
Commencing on the tenth (10th) day after the giving of such notice, such newly
designated address shall be effective for purposes of all such copies of notices required
to be sent by the Department or Subrecipient to Developer's limited partner.
26. Attorneys' Fees. The prevailing party in any action to enforce this Agreement, including
residents of Assisted Units, shall be entitled to reasonable attorneys' fees as determined
by the trier of fact in that forum.
27. Subrecipient's Approval, etc. Whenever this Agreement or any of the other Program Legal
Documents requires the approval, consent, or other determination by the Subrecipient or
Department, the Subrecipient or Department shall act reasonably and in good faith.
28. Compliance with IRC section 42(h)(6)(E)tii). In the event a regulatory agreement required
by TCAC is recorded against the Property as a condition of the award of federal tax
credits, the Department agrees to comply with the provisions set forth in Internal Revenue
Code ("IRC") section 42(h)(6)(E)(ii). As of the date of this Agreement, IRC section
42(h)(6)(E)(ii) does not permit the eviction or termination of tenancy (other than for good
cause) of an existing tenant of any low-income unit or any increase in the gross rent with
respect to such unit not otherwise permitted under section 42 for a period of three (3)
years after the date the building is acquired by foreclosure or instrument in lieu of
foreclosure.
29. Special Conditions. The Developer agrees to comply with and be bound by the special
conditions, if any, set forth in Exhibit C hereto.
30. Construction. Each party hereto acknowledges and agrees that it has had independent
caunsel review and participate in the drafting of this Agreement, and it hereby fully waives
the application of any law, statute, or rule of construction or interpretation, including
without limitation California Givil Code section 1654, to the effect that any ambiguities are
to be construed against the drafting party.
31. Exhibits. The following exhibits are attached hereto, incorporated herein and made a part
of this Agreement:
Exhibit A: Legal Description of the Property; and
Exhibit B: Unit Designation and Rent Schedule and requirements for
DR-MHP Priority, Supportive Housing Units or Special Needs
Population Units, Project Based Vouchers Rent Schedule.
jSignatures of the Developer and the Subrecipient fol/ow on page 19 of these Affordability
Restrictions. The remainder of this page is intentionally left blank.]
Page 17 of 22
EXHIBIT 2C
IN WITNESS WHEREOF, the City and the Developer have executed this Agreement on the respective
dates set forth below:
City of Redding, a municipal corporation
Date:
By: Michael Dacquisto, Mayor
ATTEST: APPROVED AS TO FORM:
By: Pamela Mize, City Clerk By: Barry E. DeWalt, City Attorney
PARTNERSHIP/BORROWER/OWNER:
PIPER WAY SENIOR NOUSING LP,
a California limited partnership
By: PWS Housing,LLC,
a California limited liability company,
its General Partner
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By;
Sidney Stone,
Vice President of Real Estate Development
PARTNERSHIP'S GENERAL PARTNER:
PWS HOUSING, LLC,
a California lirnited liability company
By: Christian Church Homes,
a California nonprofit public benefit carporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
Page 18 of 22
EXHIBIT 2C
EXHIBIT A TO REGULATORY AGREEMENT
LEGAL DESCRIPTION OF THE PROPERTY
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Rs�car�e R�t�e�h 3,1389 in Boc#t o1�Id Ptats.�t����3�,uh�st�Caunty Recnrc4s.
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Page 19 of 22
EXHIBIT 2C
EXHIBIT B TO REGULATORY AGREEMENT
I. UNIT DESIGNATIONS AND RENT SCHEDULE
Developer shall comply with Rent provisions of all regulatory agreements regulating the
Property.
The Initial Operating Year ends at the end of the initial Fiscal Year, which is:
, 2Q .
During the Initial Operating Year:
A. Developer shall charge Rents for DR-MHP Assisted Units that do not exceed
Rents set forth in the schedule below; and
B. Developer shall charge Rents for Units other than Assisted Units in amounts not
less than the amounts shown herein.
After the Initial Operating Year, Rents may be increased in accordance with paragraph 10
of this Agreement.
II. UNIT MIX
DR- Restricted Non- Net Ren
No. of Total Utility (gross—Annual Ne
Bedrooms MHP Units Restricted Units Rent Allowance util. Rent �ncome Limit
Assisted ��ncluding Units allw.}
Units DR-MHP
units
1 47 59 388 $27,936 30°/ AMI
1 18 18 70 59 11 $131,976 45°/ AM)
1 18 18 '745 59 86 $148,176 50°/ AMI
1 12 1'7 17 894 59 835 1'70,340 60°/ AMI
t t Manage AMI
°/ AMI
� Market
Rate
0 Mngr.
Totals 12 59 1 0 $478,428
The above Unit Mix chart is based on the following:
12 High HOME Program Rents and CDBG-DR Income Limits for Shasta County,
California
Page 20 of 22
EXHIBIT 2C
ill. DR-MHP PRIORITY PROVISIONS AND/OR SUPPORTIVE HOUSING UNITS
REQUIREMENTS
[SUPPORTIVE HOUSING)
A. For the full term of this Agreement, Developer shall restrict occupancy of 6
Units within the Development as permanent Supportive Housing Units to be
occupied by eligible Households experiencing Chronic Homelessness, as a
housing type that meets the requirements of the 2019 Multifamily Housing
Program Guidelines, Article 2, Section 7302(e)(4).
B. For these units, Developer shall select tenants in strict accordance with the
criteria and procedures identified in the supportive services plan for the
Development approved by the Subrecipient, as may be amended from time
to time. For the full term of this Agreement, Developer shall make a good-
faith effort to provide all the supportive services identified in the supportive
services plan for the Development approved by the Subrecipient. At a
minimum, Developer shall provide without cost to tenant the following
services, or arrange for their provision:
C. No later than ninety (90) days after the end of each Fiscal Year far the
Development, Developer shall submit for Subrecipient review and approval a
report on the Supportive Housing Units households in the Development. This
report shall be on a form provided by the Subrecipient, and shall include a
listing of the number and type of Supportive Housing Units residents, a
description of the supportive services provided to them, and such other
matters as the Subrecipient may require.
D. For the full term of this Agreement, Developer shall restrict occupancy of_
units within the Development for the following Special Needs Population or
Populations:
IELDERLY]
E. For the full term of this Agreement, Developer shall restrict occupancy of 59
Units within the Development for low-income Elderly Persons, defined in the
DR-MHP Policies and Procedures as persons 62 years of age or older, or in
the State Multifamily Housing Program Guidelines as residents who are 62
years of age or older under applicable provisions of Cal. Civ. Code, Section
51.3 and the federal Fair Hausing Act, or the Project is for residents who are
55 years of age or older, per 24 CFR 100.300-308 subpart E. Developer
shall restrict at least 59 Units, [Policy requires at least 5% of the total units]
for extremely low income Elderly Persons with a household income at or
below 50% AMI.
[DISRBILITY]
F. For the full term of this Agreement, Developer shall restrict occupancy of 9
Page 21 of 22
EXHIBIT 2C
Units, or 15°l0 of the total Units, within the Development for persons with at
least one Disability. Developer shall restrict at least 9 Units, [Policy requires
at least 3% of the total Units] for persons with at least one Disability with a
household income at our below 50% AM1.
Page 22 of 22
EXHIBIT 2D
FREE RECORDING IN
ACCORDANCE WITH CALIFORNIA
GOVERNMENT CODE SECTIONS
27383 and 27388.1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
777 Cypress Avenue
Redding, CA 96001
Attn: Housing Division
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
COMMUNITY DEVELOPMENT BLOCK GRANT - DISASTER RECOVERY
MULTIFAMILY HOUSING PROGRAM
REGULATORY AGREEMENT
CONTRACT NUMBER 21-DRMHP-21008
This Regulatory Agreement (the "Agreement") dated June , 2023, for reference
purpases only, is made and entered into by and between Piper Way Senior Housing,
LP, a limited partnership (the "Developer"), and City of Redding, a municipal
corporation, (the "Subrecipient"), pursuant to the requirements of the Community
Development Block Grant- Disaster Recovery Multifamily Housing Program administered
by the Department of Housing and Community Development, a public agency of the State
of California (the "Department").
RECITALS:
A. Developer has applied to Subrecipient for Community Development Block Grant -
Disaster Recavery Multifamily Housing Program financial assistance (the
"Assistance")for the development of a rental housing development located at 3294
Placer Street, Redding., California 96001, consisting of a total of 60 Housing Units
(the "Development"), of which 12 DR-MHP Assisted Units are to be occupied
by eligible Households as provided in this Agreement. The Development is located
on the real property described in Exhibit A hereto (the "Property"). The
Subrecipient, with Department's approval, has agreed to provide the Assistance
under the Community Development Block Grant - Disaster Recovery Multifamily
Housing Program (the "Program") and the DR-MHP Palicies and Procedures
Manual {the "DR-MHP Policies and Procedures"). The obligations imposed on the
Page 1 of 39
EXHIBIT 2D
Developer by the Program and the Program policies and procedures are
collectively referred to herein as the "Program Requirements."
B. Community Development Block Grant Disaster Recovery (CDBG-DR) funding was
appropriated under Public Laws 115-254 and 116-20, and awarded by the U.S.
Department of Housing and Urban Development (HUD) to the Department via
Federal Register Notice 83 FR 4681. The Department serves as the lead agency
and responsible entity for administering CDBG-DR funds. CDBG-DR supports the
State of California's unmet recovery needs related to the Federal Emergency
Management Agency (FEMA) Major Disaster Declarations DR-4407 and DR-4382
in August 2018. HCD performed an unmet needs assessment that covered the
areas affected by DR 4407 and DR 4382, and included data frorn FEMA, Small
Business Administration (SBA), California's Department of Forestry and Fire
Protection (CAL FIRE), and California Department of Insurance (CDI). The
Department developed the Disaster Recovery Multifamily Housing Program (DR-
MHP). DR-MHP projects are funded to assist with meeting the unmet rental housing
need, including the needs of individuals displaced from rental homes and
individuals who became homeless as the result of the disasters.
C. As required by the Program, Subrecipient and the Department have entered into a
Master Standard Agreement, numbered 21-DRMHP-21008, and dated August 6,
2021, which provides the overarching terms and conditions for implementing the
Program and the terms of the Assistance common to all projects to be completed
by the Subrecipient (the "Master Standard Agreement").
D. As required by the Program and the Master Standard Agreement, Department has
issued to Subrecipient a Notice to Proceed for the Development, dated ,
2023, which provides the specific terms and conditions for the Development (the
"Notice to Proceed").
E. As required by the Program, Developer and the Subrecipient have entered into that
certain Development Agreement dated June . 2023 governing the terms and
conditions of the Development and governing the terms of the Assistance for the
Development (the "Development Agreement"). As required by the Program,
Subrecipient has made a part of the Development Agreement the DR-MHP
Development Agreement Rider (the "Development Agreement Rider"} to include
terms required by the Department for the Development.
F. The Master Standard Agreement, the Notice to Proceed, the Development
Agreement, the Development Agreement Rider, Ground Lease Rider (as
applicable), this Agreement and such other documents which govern and secure
the Development as are reasonably required by the Subrecipient and Department
are collectively referred to herein as the `Program Legal Documents."
G. As further consideration for the Assistance and in furtherance of the purposes of
the Program, Developer has agreed to enter into this Agreement and consent to
its recordation against the Development. The purpose of this Agreement is to
Page 2 of 39
EXHIBIT 2D
regulate and restrict the occupancy, rents, operation, ownership and management
of the Development in compliance with the Program Requirements and put such
regulations and restrictions on title for the term of this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Recitals. The foregoing recitals are a part of this Agreement and are incorporated
herein by reference as if fully stated herein.
2. Proqerty. Developer is the owner in fee of the Property and all improvements now
and hereafter located thereon.
3. Definitions. Unless the context requires otherwise, or the terms are defined herein,
the terms used in this Agreement shall be governed by the definitions set forth in
the Program policies and procedures. The following terms shall have the
respective meanings assigned to them in this paragraph unless the context in
which they are used clearly requires otherwise:
a. Affordable Rents: means rents that are at or below the "High" HOME Program
rents published by HUD for different metropolitan areas.
b. Affordable Units: means a "dwelling" that is rented at an Affordable Rent to a
household that earns less than 80 percent of Area Median Income adjusted for
household size as calculated by HUD for different metropolitan areas within
the State and published annually by the Department and HUD.
c. Area Median Income (AMI): means the median family income for specific
geographic areas, adjusted for household size, as calculated by HUD, and
published annually by HCD for the CDBG program.
d. Commercial Space: any nonresidential space located in or on the property of
the Development that is, or is proposed to be, rented or leased by the owner
of the Project, the income from which shall be included in Operating Income,
as applicable, which ensures the fiscal integrity of the Development.
e. Developer Fee: All Funds paid at any time as compensation for developing the
Development, to include all development consultant fees, processing agent
fees, developer overhead and profit, construction management oversight fees
if provided by the developer, personal guarantee fees, syndicator consulting
fees, and reserves in exc�ss of those customarily required by multi-family
housing lenders.
f. Distributions: the amount of cash or other benefits received from the operation of
the Development and available to be distributed to the Developer or any party
having a beneficial interest in the Development after payment of all due and
outstanding abligations incurred in connection with the Development.
g. Disability: any disability, including mental or physical disability, that limits a
Page 3 of 39
EXHIBIT 2D
major life activity, including a disability that falls within the definitions in
Government Code (G.C.) Sections 11135, 12926, and 12926.1 or within the
definition of disability used in the federal Americans with Disabilities Act of
1990, codified at 42 U.S.C. 12102.
h. Elderly Person: A person at least 62 years of age (24 CFR Part 5.100).
i. Extremely Low Income (ELI): ELI individuals or families whose income is at or
below 30% of the area median income (AMI) or the federal poverty level,
whichever is higher for the area of the Development.
j. Fiscal Year: the Fiscal Year for the Development shall mean the annual period
commencing on July 15t and concluding on June 30t" each year.
k. Household: One or more persons occupying a housing unit.
I. Initial Operating Year: the initial period af operation of the Development,
beginning at the time of the initial occupancy of the completed project and
ending on the last day of the Fiscal Year for the Development.
m. Low- to Moderate-Income (LMI): Low to moderate income people are those
having incomes not more than the "moderate-income" level (80%Area Median
Family Income} set by the federal government for the HUD-assisted Housing
Programs. This income standard changes from year to year and varies by
household size, county and the metropolitan statistical area.
n. Operating Expenses: the amount approved by the Subrecipient that is
necessary to pay for the recurring expenses of the Development, such as
utilities, maintenance, management, taxes, licenses, and Supportive Services
costs, but not including debt service or required reserve account deposits.
o. Operating Income: all income generated in connection with operation of the
Development including rental income for DR-MHP Assisted Units and non-DR-
MHP Assisted Units, rental income for Commercial Space or commercial use,
laundry and equipment rental fees, rental subsidy payments, and interest on
any accounts, other than approved reserve accounts, related to the
Development. "Operating Income" does not include security and equipment
deposits, payments to the Developer for Supportive Services not included in
the operating budget, cash contributed by the Developer, or tax benefits
received by the Developer.
p. Ordinary Maintenance and Repair: means regular or usual care, upkeep or
replacement of any part, or putting back together that which is deteriorated or
broken, of an existing property, building or structure to affect the maintenance
of a decent, safe, sanitary condition.
q. Project Closeout Documentation: required documentation to be submitted to
the Depa�tment by the Subrecipient and includes, but may not be limited to:
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EXHIBIT 2D
project completion report, final activity report, recorded notice of completion,
relocation report (if applicable) and a resolution from the governing body.
r. Reconstruction: Demolishing and re-building a housing unit on the same lot in
substantially the same manner. Reconstruction is rehabilitation for purposes
of DR-MHP.
s. Rehabilitation: Repair or restoration of housing units in the disaster-impacted
areas to applicable construction codes and standards.
t. Rent: means all mandatory charges, other than deposits, paid by the tenant
for the use and occupancy of a DR-MHP Assisted Unit, plus a utility allowance
established in accordance with HOME Regulations at 24 CFR 92.252(a).
u. Restricted Unit: DR-MHP Assisted Units and any units that are subject to Rent
and occupancy restrictions that are comparable to those applicable to DR-
MHP Assisted Units. Restricted Units include units subject to a TCAC
regulatory agreement, and all units subject to similar long-term, low-income or
occupancy restrictions imposed by other public agencies.
v. Special Needs or Special Needs Populations: means agricultural workers,
individuals living with physical or sensory disabilities and transitioning from
hospitals, nursing homes, development centers, or other care facilities;
individuals living with developmental disabilities, serious mental illness or
substance abuse disorders; individuals who are survivors of domestic
violence, sexual assault, and human trafficking; individuals who are
experiencing Homelessness; individuals with HIV; homeless youth as defined
in Government Code (GC) Section 12957(e)(2); families in the child welfare
system for whom the absence of housing is a barrier to family reunification, as
certified by a county; frequent users of public health or mental health services,
as identified by a public health or mental health agency; Frail Elderly Persons;
or other specific groups with unique housing needs as determined by the
Department. "Special Needs Populations" do not include seniors unless they
otherwise qualify as a Special Needs Population.
w. Substantial Rehabilitation: Rehabilitation as defined in 24 CFR 5.100.
x. Supportive Housing: means housing with no limit on length of stay, that is
occupied by the target population and that is linked to onsite or offsite services
that assist the Supportive Housing resident in retaining the housing, improving
his or her health status, and maximizing his or her ability to live and, when
possible, work in the community.
y. Supportive Services: social, health, educational, income support and
employment services and benefits, coordination of community building and
educational activities, individualized needs assessment, and individualized
assistance with obtaining services and benefits.
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EXHIBIT 2D
z. TCAC: means the California Tax Credit Allocation Committee.
aa.Uniform Relocation Assistance and Real Property Acquisition Act (URA) (42
U.S.G. Chapter 61): A federal law that establishes minimum standards for
federally funded programs and Projects that require the acquisition of real
property (real estate) or the displacement of persons from their homes,
businesses, or farms.
4. Compliance with Program Requirements. The Developer agrees that at all times
its actions regarding the Development and the use of funds provided under the
Master Standard Agreement and the Notice to Proceed shall be in conformity with
all Program Requirements, including the requirements of this Agreement and the
Program Legal Documents. The Developer acknowledges that it is familiar with the
Program Requirements, the requirements imposed on the Developer in the
Program Legal Documents, and has access to professional advice to the extent
necessary to enable the Developer to fully comply with the Program Requirements
and the applicable provisions of the Program Legal Documents.
5. Term of Agreement. This Agreement shall commence on the date set forth above
and remain in full force and effect and shall apply to the Development through and
including the twentieth (20th) anniversary of the date of Department acceptance of
the Project Closeout Documentation hereof regardless of any prepayment of the
Assistance or sale, assignment, transfer or conveyance of the Development,
unless terminated earlier by the Department or Subrecipient or extended by the
mutual consent of the Parties.
6. DR-MHP Assisted Units, Restricted Units Special Needs Populations Units and
Supportive Housing Units.
a. For the full term of this Agreement, Developer shall provide within the
Development, the number, type and size of DR-MHP Assisted Units set forth
in Exhibit B, Part I, attached hereto and incorporated herein.
b. Restricted Units shall not differ substantially in size or amenity level from non-
Restricted Units within the Development with the same number of bedrooms,
and Restricted Units shall not be segregated from non-Restricted Units.
c. Within the limits of subparagraph b. above, and subject to the requirements of
subparagraph a. above, Developer may change the designation of a particular
Unit from DR-MHP Assisted Unit to non-DR-MHP Assisted Unit, and vice
versa, over time, only to address situations when a tenant in a DR-MHP
Assisted Unit is no longer qualified to reside in that unit or if the unit is no longer
habitable. Any other proposed changes to the unit designation must be
approved in writing in advance by the Subrecipient.
7. Affirmative Marketinq and Tenant Selection Procedures. Affirmative Marketing
involves special outreach and advertising efforts designed to communicate the
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EXHIBIT 2D
availability of DR-MHP assisted housing ta those groups or individuals who might
otherwise be unlikely to apply. Affirmative marketing efforts must be commenced
by the Developer at least 90 days prior to initial or renewed occupancy for new
construction and Substantial Rehabilitation Projects, respectively. The Department
has determined that in addition to the required demographic analysis, individuals
and families that were impacted by the disasters and Section 8 Housing Choice
Voucher holders are least likely to apply. Examples of renters impacted by the
disasters include renters that have lost rental units or have been displaced due to
the impacts of DR-4382 and DR-4407. The Affirmative Marketing Plan shall be
updated and submitted to Subrecipient every five (5) years during the term of this
Agreement.
Developer shall rent DR-MHP Assisted Units in the Development to eligible
Households in accordance with the management plan prepared by the Developer
and approved by and on file with the Subrecipient and Department (the
"Management Plan") pursuant to paragraph �3 of this Agreement. The
Management Plan shall, at minimum:
a. detail actions to be taken by Developer to affirmatively market all Housing Units
in a manner that ensures equal access to all persons in any category
protected by federal, state or local laws governing discrimination, and without
regard to any arbitrary factor;
b. specify reasonable criteria for determination of tenant eligibility, including
Household size;
c. require that eligible tenants be selected based on order of application, lottery,
or other reasonable method approved by the Subrecipient;
d. require eligible applicants to be notified of eligibility and, based on turnover
history, when a DR-MHP Assisted Unit may be available;
e. require ineligible applicants to be notified of the reason for their ineligibility;
f. specify procedures through which applicants deemed to be ineligible may
appeal this determination;
g. require maintenance of a waiting list of eligible applicants;
h. specify procedures for obtaining information regarding prospective tenants'
incomes as necessary to certify that such income does not exceed the income
limit limitations; and
i. be made available to prospective tenants upon request.
8. Non-Discrimination. Developer shall not discriminate against any tenant or
prospective tenant on the basis of any class or status prohibited by Government
Code section 12920 and United States Code 42 U.S.0 section 3601 — 3019,
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EXHIBIT 2D
including: race, color, religion, sex, gender, gender identity, gender expression,
sexual orientation, marital status, national origin, ancestry, familial status, source
of income, disability, genetic information, or any other arbitrary factor in violation
of any state, federal ar local law governing discrimination in rental housing. The
restriction af housing to Elderly and Special Needs Po�ulations is permitted where
the housing is intended to benefit those targeted groups in compliance with
applicable law, and only with prior approval of the selection criteria by the
Subrecipient.
9. Rental Aqreement and Occupancy Procedures.
a. Each eligible Household selected to occupy a DR-MHP Assisted Unit in the
Development shall enter into a written rental or occupancy agreement with the
Developer, the form of which shall be subject to approval by the Subrecipient
and be consistent with the Program Requirements. Such rental agreement
shall provide for, inter alia, good cause eviction, reference the appeal and
grievance procedures set forth in the Management Plan, and require the tenant
annually recertify household income and size.
b. The Developer may establish reasonable rules of conduct and occupancy.
Such rules shall be consistent with state law and the Program Requirements
and shall not distinguish or discriminate between Restricted Units and non-
Restricted Units. The rules shall be in writing and shall be given to each tenant
upon occupancy. Any change to such rules shall become effective no less than
thirty (30) days after giving written notice thereof to each Household in the
Development.
10. DR-MHP Assisted Unit Rents and Maximum Income.
a. For the Initial Operating Year, Developer shall charge Rents for the DR-MHP
Assisted Units in the Development in accordance with Exhibit B hereto.
b. After the Initial Operating Year, Rents for DR-MHP Assisted Units may be
adjusted no more often than every twelve (12) months. Developer shall provide
tenants of DR-MHP Assisted Units not less than 30 days prior written notice,
or a longer period as required by state or local law, before implementing any
increase in rents. In no event shall the rents exceed the High HOME Rents as
designated for the area and published by HUD. If the Praject is assisted with
tax credits, the amount and method of rent adjustment for DR-MHP Assisted
Units shall be in accordance with the Tax Credit Allocation Committee
(TCAC) policy or a longer period as required by state or local law.
c. Notwithstanding the previous subparagraph, Rents for DR-MHP Assisted Units
subsidized under Section 8 of the Housing Act of 1937 or any comparable
federal or state rental assistance program may be adjusted as required by the
respective rental assistance program, for as long as the DR-MHP Assisted
Units continue to receive the rental assistance.
Page 8 of 39
EXHIBIT 2D
d. The maximum income of a Household occupying a DR-MHP Assisted Unit
shall not exceed 80% of the Area Median Income at initial Household income
certification, consistent with Section 4.11 of t.
11. Rents for non-DR-MHP Assisted Units and Commercial Space.
Developer shall establish and implement a rent structure and operations budget
for non-DR-MHP Assisted Units and Commercial Space, if applicable, in order for
the Department to ensure continued financial viability throughout the affordability
period.
a. For the Initial Operating Year, rent for non-DR-MHP Assisted Units and
Commercial Space shall be in accordance with Exhibit B attached hereto.
After the Initial Operating Year, rents for non-DR-MHP Assisted Units and
Commercial Space may be adjusted in accordance with the provisions outlined
by other funding sources and requirements of state and local laws.
b. Developer shall estimate all income and expenses attributable to the non-DR-
MHP Assisted Units and, if applicable, .Commercial Space, in the annual
operating budget described in para_qraph 16 herein, and shall repart all income
and expenses attributable to non-DR-MHP Assisted Units and Commercial
Space in the annual report described in paraqraph 18 herein.
12. Certification of Tenant Income and Household Size.
a. The income and Household size of all Hauseholds occupying DR-MHP
Assisted Units shall be certified by the Developer prior to occupancy and
recertified annually thereafter in the manner specified in the Development's
approved Management Plan and in accordance with applicable rules,
regulations, and procedures governing the Program.
b. If, at the time of tenant recertification, the income of a Household accupying a
DR-MHP Assisted Unit exceeds the income level applicable to new tenants for
respective DR-MHP Assisted Units, the Developer shall:
Page 9 of 39
EXHIBIT 2D
1) increase the tenant's rent to the lesser of 30 percent of adjusted income,
fair market rent, or the rent limitations of other funding programs
governing the unit; and
2) to the extent another non-DR-MHP Assisted Unit becomes available
within the Development, designate the next available comparable non-
DR-MHP Assisted Unit as a DR-MHP Assisted Unit at the income level
originally applicable to the Household until the unit mix required by this
Agreement is achieved. A Housing Unit shall be deemed "comparable"
if it has the same number of bedrooms, the same or similar features,
and is similar in size to the original DR-MHP Assisted Unit.
13. Manaqement and Maintenance.
a. Developer is responsible for all maintenance, repair, and management
functions, including without limitation, the following: selection of tenants;
recertification af family income and size; evictions; collection of Rents; ordinary
and extraordinary maintenance and repairs; and replacement of capital items.
Developer shall maintain all Housing Units, common areas and Commercial
Space in a safe and sanitary manner in accordance with local health, building,
and housing codes and the Management Plan described above.
b. Developer is responsible for operating the Development in accordance with
the Management Plan. All amendments to this plan require prior written
approval of the Subrecipient.
c. Developer may, with the prior written approval of the Subrecipient, contract
with a management agent for the perFormance of the services or duties
required in subpara_qraphs a, and b. of this paracrraph �3. However, such an
arrangement does not relieve the Developer of responsibility for proper
performance of these duties. Such contract shall be subject ta prior written
approval by the Subrecipient and shali contain a provision allowing the
Developer to terminate the contract without penalty upon no more than thirty
(30) days' notice. Upon a determination by the Subrecipient, and notice to the
Developer thereof, that the contractor perForming the functions required in
subparaqraphs a, and b. has failed to operate the Development in
accordance with this Agreement and the approved Management Plan, the
Developer shall exercise such right of termination forthwith and make
immediate arrangements, which shall be subject to Subrecipient approval, for
continuing perFormance of the functians required in subpara_qraphs a, and b.
d. Upon a determination by the Subrecipient, and notice to the Developer thereaf,
that the Developer has failed to operate the Development in accordance with
this Agreement, the Subrecipient may require the Developer to contract with a
qualified management agent to operate the Development, or to make such
other arrangements as the Subrecipient deems necessary to ensure
performance of the functions required in subparapraphs a, and b.
Page 10 of 39
EXHIBIT 2D
e. Developer shall operate, maintain and repair both Restricted and non-
Restricted Units equally without regard ta their designation as Restricted Units
or non-Restricted Units.
14. Insurance.
Subrecipient, its Developers and Contractors shall comply with all requirements outlined
in the (A) General Provisions section and (B) Project Insurance Requirements outlined
herein. These requirements are in addition to, and not in lieu of, any other insurance
coverages required elsewhere in the Development Agreement and elsewhere in the
Master Standard Agreement. The Department reserves the right to waive or adjust
required insurance coverages from time to time in its sole discretion.
a. General Provisions Applvin� to All Policies
1) Coverage Term — Subrecipient's coverage needs to be in force for the
complete term of the Agreement, unless otherwise noted herein. The
Developer's coverage needs to be in force for the complete affordability
period of each Approved Project. The Developer's coverage needs to be in
force until a certificate of occupancy is issued for each Approved Project.
No work may be performed by Subrecipient, Developer, or a contractor until
and unless all insurances required by this Agreement are in full force and
effect. If insurance expires during the term of the Agreement/affordability
period/certificate af occupancy issuance, as applicable, a new certificate
must be received by the Department at least thirty (30) days prior to the
expiration of said insurance. Any new insurance must comply with the
original terms of this Agreement.
2) Policv Cancellation or Termination & Notice of Non-Renewal—Subrecipient
is responsible to notify the Department within fifteen (15) business days
prior to any actual or proposed cancellation, non-renewal or material
change that affects required insurance coverage. No policy may be
cancelled upon less than thirty (30) days' prior written notice from the
insurer to the insured and the Department. New certificates of insurance
are subject to the approval of the Department and the Subrecipient agrees
no services will be commenced or performed prior to obtaining such
approval. In the event Subrecipient and Developer fails to keep in effect at
all times the specified insurance coverage, the Department may, in addition
to any other remedies it may have, terminate this Agreement and/or
Approved Project upon the occurrence of such event, subject ta the
provisions of this Agreement.
3) Premiums, Assessments and Deductibles — Subrecipient, Developer and
contractors for each Approved Project are responsible for the payment of
all premiums, policy assessments, deductibles or self-insured retentions
associated with their respective insurance programs.
Page 11 of 39
EXHIBIT 2D
4) Primarv Clause—Any required insurance contained in this Agreement shall
be primary, and not excess or contributory, to any other insurance carried
by the Department.
5) Insurance Carrier Required Ratina — All insurance companies must carry
an AM Best rating of at least"A—"with a financial category rating of no lower
than VII. If the Subrecipient, Developer and/or contractor is self-insured for
a portion or all of its insurance, review of financial information including a
letter of credit may be required. Acceptance of self-insurance is within the
sole discretion of the Department, and the Department reserves the right to
require insurance from third-party commercial insurers.
6) Endorsements—Any required endorsements requested by the Department
must be physically attached to all requested certificates of insurance and
not substituted by referring to such coverage on the certificate of insurance.
7) Inadequate Insurance — Inadequate or lack of insurance does not negate
the Subrecipient's, Developer's, or contractor's obligations under this
Agreernent or the terms specific to the relevant Approved Project, nor does
the availability or limits of any insurance policies required herein in any way
limit the liability of Subrecipient, or any Developer or contractor, to the
Department hereunder, nor does it in any way limit the liability of such
parties to the Department in regards to any indemnification obligations of
such parties herein.
8) Available Coveraqes/Limits — All coverage and limits available to the
Subrecipient, Developer, or contractor shall also be available and
applicable to the Department.
9) Satisfying an SIR - All insurance required by this Agreement and any
required by the terms specific to the relevant Approved Project must allow
the Department to pay and/or act as the Subrecipient's, Developer's, or
contractor's agent in satisfying any self-insured retention (SIR). The choice
to pay andlor act as the Subrecipient's, Developer's, or contractor's agent
in satisfying any SIR is at the Department's discretion.
10) Use of Subcontractors - In the case of Developer or contractor's utilization
of subcontractors to complete the contracted scope of work for the relevant
Approved Project, Developer or contractor shall include all subcontractors
as insureds under Developer's or contractor's insurance or supply evidence
to the Subrecipient of subcontractor's insurance equal to policies,
coverages, and limits required of Developer and contractor.
Page 12 of 39
EXHIBIT 2D
b. Proiect Insurance Requirements
Developer, and/or contractor shall display evidence, as applicable for the relevant
Approved Project, of the following on a certificate of insurance evidencing the
below coverages. No work shall be commenced on any Approved Project prior to
such coverages being in effect and the required certificate(s) have been provided
to the Department.
1) Commercial General Liabilitv — Subrecipient and Developer or contractor
on an Approved Project shall maintain commercial general liability
insurance on an occurrence form with limits not less than $1,000,000 per
occurrence for bodily injury and property damage liability combined with a
$2,000,000 annual policy aggregate for the duration of this Agreement. The
policy shall include coverage for liabilities arising out of premises,
operations, independent contractors, products, completed operations,
personal & advertising injury, and liability assumed under an insured
contract. This insurance shall apply separately to each insured against
whom claim is made or suit is brought subject to the Developer's or
contractor's limit of liability.
The policy must name The State of California, its officers, agents, and
employees as additional insureds, but only with respect to work performed
under this Agreement.
2) Automobile Liabilitv—Developer or Contractor shall maintain, as applicable,
business automobile liability insurance for limits not less than $1,000,000
combined single limit. Such insurance shall cover liability arising out of a
motor vehicle including owned, hired and non-owned motor
vehicles. Should the scope of the relevant Approved Project involve
transportation of hazardous materials, evidence of an MCS-90
endorsement is required.
The policy must name The State of California, its officers, agents, and
employees as additional insured, but only with respect to work performed
under this Agreement.
3) Workers' Compensation and Employer's Liabilitv — Subrecipient and
Developer or Contractor shall maintain statutory worker's compensation
and employer's liability coverage for all its employees who will be engaged
in the perforrnance of this Agreement and the relevant Approved Project. In
addition, employer's liability limits of $1,000,000 are required. By signing
this Agreement, Subrecipient acknowledges compliance with these
regulations. A Waiver of Subrogation or Right to Recover endorsement in
favor of the State of California must be attached to certificate.
Page 13 of 39
EXHIBIT 2D
4) Flood Insurance — The Subrecipient shall ensure that Developer complies
with the requirements of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4001). Subrecipient shall ensure flood insurance coverage is
provided by the Developer for the Approved Project if required by the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4001). The Subrecipient shall
assure that for activities located in an area identified by the Federal
Emergency Management Agency (FEMA) as having special flood hazards,
that flood insurance under the National Flood Insurance Program is
obtained and maintained as a condition of financial assistance for
acquisition or construction purposes (including rehabilitation).
5) Builders Risk insurance — Developer or Developer's contractor on an
Approved Project shall maintain builders risk coverage prior to or upon
commencement of construction of the Approved Project, including any
delivery and storage of materials to be incorporated into the Approved
Project, through the completion of construction and until property insurance
can be secured. This coverage must cover all risk of physical damage or
risk of loss for an amount equal to the full amount of the cost of construction.
This coverage must include coverage for flood if the Property is located in
a Special Flood Hazard Area as determined by the Federal Emergency
Management Agency. Additionally, Developer or Developer's general
contractor must obtain a builder's risk installation floater for coverage of the
contractor's labor, materials, and equipment to be used for completion of
work performed under the construction contract. The minimum amount of
coverage to be carried must be equal to the full amount of the cost of
construction.
6} Property Insurance — Developer on an Approved Project shall maintain
including all risk coverage or standard fire and e�ended
coverage insurance, with vandalism and malicious mischief endorsements
to the extent of full replacement value of the Approved Project for the
duration of the term of the Affordability Period. Coverage amount may be
adjusted for fluctuation in replacement values. This coverage is required
upon completion of canstruction of the Rpproved Project, or upon closing of
the financing for the Approved Project if it is a rehabilitation project.
15. Condemnation.
a. The Developer shall at all times keep the Development insured against loss by
fire and such other hazards, casualties, liabilities and contingencies, and in
such amounts and for such periods as required by the Subrecipient. All
insurance policies and renewals thereof shall be issued by a carrier and in form
acceptable to the Subrecipient.
b. In the event of any fire or other casualty to the Development or eminent domain
proceedings resulting in condemnation of the Development or any part thereof,
Developer shall be obligated to rebuild the Development, and to use all
Page 14 of 39
EXHIBIT 2D
available insurance or condemnation proceeds therefore, provided that, as
determined by the Subrecipient in its sole discretion, (i) such proceeds are
sufficient to keep the Assistance in balance and rebuild the Development in a
manner that provides adequate security to the Subrecipient for repayment of
the Assistance or if such proceeds are insufficient, then Developer shall have
funded any deficiency (ii) the Subrecipient shall have the right to approve plans
and specifications for any major rebuilding and the right to approve
disbursements of insurance or condemnation proceeds for rebuilding under a
construction escrow or similar arrangement, and (iii) no material breach or
default then exists under the Program Legal Documents. If the casualty or
condemnation affects only part of the Development and total rebuilding is
infeasible, then proceeds may be used for partial rebuilding and partial
repayment of the Assistance in a manner that provides adequate security to
the Subrecipient far repayment of the remaining balance of the Assistance.
c. In the event that the Developer fails to commence or to complete the
rebuilding, repair, replacement or restoration of the Project timely, the
Department and Subrecipient shall have the right, in addition to any
other remedies granted in the Program Legal Documents or at law or in equity,
to repair, restore, rebuild or replace the Project so as to prevent the occurrence
of a default hereunder.
16. Annual Operatinq Budqet.
a. For the Initial Operating Year, Developer shall operate the Development and
expend Operating Income in accordance with the initial operating budget
approved by and on file with the Subrecipient. Such budget shall show all
anticipated Operating Income, debt service, Operating Expenses and amount
payable to reserves for the Initial Operating Year.
b. No later than sixty (60) days prior to the beginning of each subsequent Fiscal
Year of the Development, the Developer shall submit to the Subrecipient a
proposed annual operating budget on a form provided by the Subrecipient. The
proposed annual operating budget shall set forth the Developer's estimate of
Operating Income, Operating Expenses and debt service for the upcoming
year, amounts payable to reserves, and proposed Rent adjustments.
c. If the Development contains either non-Restricted Units or Commercial Space,
or both, each annual operating budget shall show amounts, sources and uses
of income allocated between DR-MHP Assisted Units, Restricted Units, non-
Restricted Units, and Commercial Space. The allocation method used for each
budget line item shall be subject to Subrecipient approval, and shall apportion
income and expenses in a manner that accurately reflects the particular
physical, operational and economic characteristics of the Development.
Page 15 of 39
EXHIBIT 2D
17. Periodic Reports. Developer shall submit to the Subrecipient such periodic reports
as deemed necessary by the Subrecipient to monitor the Developer's compliance
with this Agreement. The reports may include, but are not limited to:
a. an income and expense statement for the reporting period;
b. a summary of the occupancy of the Development, indicating the number and
type of Units reserved for eligible Households, the number of vacant Units, and
the number of evictions completed or in process;
c. a report on maintenance or other issues anticipated to impact the current
budget needs of the Development;
d. information on the status of waiting lists for the DR-MHP Assisted Units,
including the number of households on lists for different Unit sizes and by
income group, as well as evidence of compliance with Project's Affirmative
Marketing Plan; and
e. other information as required by the Subrecipient to accurately monitor
Developer's performance hereunder.
If, after the Initial Operating Year, the Subrecipient determines that such periodic
reports continue to be necessary, the Subrecipient shall so notify the Developer as
part of the annual budget approval process. Upon such notification, Developer
shall submit the requested reparts.
18. Annual Report and Audit.
a. Developer shall file an annual report with the Subrecipient no later than ninety
(90) days after the end of each Fiscal Year for the Development. The report
shall be in such form and contain such information as required by the
Subrecipient.
b. As part of the annual report, the Developer shall submit an audit of the
Develapment prepared by an independent certified public accountant in
accordance with Subrecipient audit requirements, and as specified in the
Department's Audit Handbook, titled "Audited Financial Statements for
Multifamily Rental Housing", published April 2018, as periodically updated,
located on the Department's website here: https://www.hcd.ca.gov/grants-and-
funding/reporting-and-compliance-loan-programs
19. Required Reserves. Developer shall establish,fund and maintain reserve accounts
for the term of this Agreement as listed below. All such accounts shall be in the
name of the Developer, earn interest, and, unless otherwise approved in writing by
the Subrecipient, be insured by an agency of the federal government or other
comparable federal insurance program. All interest earned on a reserve account
shall become a part of the account. Withdrawals from the reserve accounts shall
require prior written approval of the Subrecipient, except as specifically noted in
Page 16 of 39
EXHIBIT 2D
Exhibit C. Should the Subrecipient fail to take action on a request for a withdrawal
from a reserve account within thirty(30)days of documented receipt of the request,
that request will be deemed approved.
a. Replacement Reserve Account. Commencing no later than the date funds are
disbursed pursuant to the Program Legal Documents, Developer shall
establish a segregated replacement reserve account. Developer shall make
annual deposits from Operating Income to the replacement reserve account in
the amount set forth in Exhibit C, unless the Subrecipient determines, in its
sole discretion, that more frequent deposits are required. Developer shall also
deposit any Development funds designated for replacement reserves into this
account, including those identified in Exhibit C. The amount of the minimum
annual deposit may be adjusted, as determined by the Subrecipient, in its sole
discretion, based on the results of reserve studies, performed by an
independent third party at the Developer's expense as requested by the
Subrecipient or as based on other reliable indicators of the need for reserve
funds aver time.
b. Operating Reserve Account. Developer shall establish an operating reserve
account or sub-account within the Development's general operating account
no later than sixty (60) days from the date of recordation of this Agreement.
Developer shall fund the operating reserve account with an initial deposit in an
amount as specified in Exhibit C, and through monthly deposits from
Operating Incorne in amounts as specified in Exhibit C or in approved annual
operating budgets. Developer shall fully replace any withdrawals from the
operating reserve accaunt using available cash flow prior to use of any cash
flow to pay deferred Developer Fee, partnership management or similar fees,
or Distributions.
c. Other Reserve Accounts. Developer certifies that Exhibit C hereto contains a
complete listing of all reserve accounts established or to be established for the
Development. All withdrawals from these accounts shall require prior written
Subrecipient approval, except as specifically noted in Exhibit C.
20. Accountinq System. In a manner subject to Subrecipient approval, Developer shall
maintain an accrual or modified accrual basis general ledger accounting system
that is posted monthly and that accurately and fully shows all assets, liabilities,
income and expenses of the Development.
21. Records Retention. All records and books relating to the initial development phase
of the Development (application through project completion) shall be retained for
a minimum period of five (5) years after the Department notifies the Subrecipient
that the grant agreement between HUD and the State of California has been
closed. Subsequent to close out of the grant agreement between HUD and the
State of California, all records and books relating to the operational phase of the
Development shall be retained for the most recent five (5) year period, until five
years after the affordability period terminates. All records must be maintained in
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EXHIBIT 2D
such a manner as to ensure that the records are reasonably protected from
destruction or tampering. All records shall be subject ta inspection and audit by the
Subrecipient, the Department, HUD, or its representative.
22. Use of Income from Operations.
a. The Developer, or Developer's management agent, shall promptly deposit all
Operating Income in a segregated account established in the Developer's
name exclusively for the Development and insured by an agency of the federal
government or other comparable federal insurance program.
b. Withdrawals from the account shall be made only in accordance with the
provisions of this Agreement, and the approved annual operating budget, and
shall be disbursed, applied, or reserved and set aside for payment when due,
in the following priority, to the extent available:
1) salaries, wages, and any other compensation due and payable to the
employees or agents of the Developer employed on site in connection
with the maintenance, administration or operation of the Development,
along with all withholding taxes, insurance premiums, Social Security
payments and other payroll taxes or payments required in connection
with such employees;
2) all charges incurred in the operation of the Development in connection
with utilities, real estate taxes and assessments, and liability, fire and
other hazard insurance premiums;
3) regularly scheduled non-contingent payments of interest, principal,
impounds, fees and charges, if any, required on loans, including the
Assistance when such Assistance is provided as a loan, which are
secured by liens on the Property, which have been approved by the
Subrecipient, payments on which are to be made prior to the
determination of net cash flow, as specified in Exhibit C, hereto;
4) all other incurred Operating Expenses, including the fee of the
managing agent and any extraordinary expenses, in accordance with
the approved annual operating budget of the Development or as
otherwise approved in advance by the Subrecipient;
5) deposits to required reserve accaunts;
6) deferred Developer Fee;
7) asset management, partnership management and similar fees, to the
extent such fees are specified under the terms of financing from a public
entity and approved by the Subrecipient, or if there is no public entity
financing, asset management, partnership management and similar
fees, in accordance with the UMR Section 8314(a).
Page 18 of 39
EXHIBIT 2D
8) Distributions, in accordance with paragraph 23 of this Agreement.
The withdrawals permitted under subparapraph 22 (b) (6), (7) and(8) shall
also be subject to the restrictions of paragraph 99 (b) above.
The Developer may depart from the foregoing priorities of payment only upon
the express written approval of the Subrecipient. Net Cash Flow shall be
distributed in accordance with paraqraph 24 hereto.
23. Distributions.
a. Commencing at the beginning of the 16th year following the recordation of this
Agreement, Developer shall be limited to annual Distributions equal to fifty-
percent (50%) of the annual Operating Income rernaining after payment of the
items allowed in clauses (1) through (7) of subparagraph b of paragraph 22
above. Prior to the 16th year following recordation of this Agreement, Developer
shall be entitled to receive Distributions of the annual Operating Income
remaining after payment of the items allowed in clauses (1) through (7} of
subparagraph b of paragraph 22 above. If the Development generates
insufficient cash flow to permit payment of Distributions in a particular year,
Distributions in future years shall not be increased to cover the lack of
Distributions in prior years.
b. Developer may deposit all or a portion of the amount permitted for Distributions
into a Development account for distribution in subsequent years. Such future
Distributions shall not reduce the otherwise permitted Distributions in those
subsequent years.
c. Distributions shall be permitted for a particular Fiscal Year, including
Distributions from an accumulated Distributions account, only after the
Developer submits a complete annual report and operating budget and the
Subrecipient determines that the report and budget demonstrate compliance
with all Program Requirements.
d. Circumstances under which no Distributions, deferred Develaper Fee, asset
management fees, partnership management fees, and/or similar fees shall be
made or paid include:
1) when written notice of default has been issued by any entity, (including
the Subrecipient) with an equitable or beneficial interest in the
Development or which has a contractual relationship with the Developer
regarding the Development;
2) when the Developer is in default under the terms of this Agreement, the
Development Agreement, the Development Agreement Rider, or the
Policies and Procedures as they may be amended from time to time;
3) when the Subrecipient determines that the Developer or Developer's
Page 19 of 39
EXHIBIT 2D
management agent has failed to comply with the Subrecipient's written
notice of any reasonable requirement for proper maintenance or
operation of the Development;
Page 20 of 39
EXHIBIT 2D
4) if all currently required debt service, including mandatory payments on
the Assistance, and Operating Expenses have not been paid; or
5} if the replacement reserve account, operating reserve account or any
other required reserve account has not been funded in accordance with
this Agreement.
24. Use of Net Cash Flow.
Net Cash Flow shall be applied to payment of interest, principal, impound fees and
charges, if any, on loans which are secured by liens on the Property, including the
Assistance (if made as a loan), which have been approved by the Subrecipient
and which are to be paid from Net Cash Flow in the amounts, proportion and in
accordance with the terms specified in Exhibit C hereto.
25. Department or Subrecipient Review and Inspections.
a. At any time during the term of this Agreement, the Department, the
Subrecipient, or their designee may enter and inspect the physical premises
and inspect all accounting records pertaining to the construction, development
or operation of the entire Development. Upon request by the Department or
Subrecipient, the Developer shall notify occupants of upcoming inspections of
their Units in accordance with state law.
b. In addition to the annual audit required in paraqraph 18 above, and at the
Department's or Subrecipient's request, the Developer shall provide, at
Developer's expense, a special audit of the Development certified by an
independent certified public accountant. The Department or Subrecipient may
also perForm or cause to be performed audits of any and all phases of the
Developer's activities related to the Development.
c. The Department or Subrecipient may request any other information that it
deems necessary to monitor compliance with the Program Requirements and
the requirements set forth in this Agreement and the Program Legal
Documents. The Developer shall promptly provide such information.
26. Restrictions on_Sale, Encumbrance and Other Acts.
Prior to makina anv of the below changes or enterinq into any of the below
agreements, Developer shall qive written notice to Subrecipient and the
Department no less than 60 days of its intention to take such action
a. Except with the Subrecipient's prior written approval, and Department's prior
written approval at the Department's sole discretion, Developer shall not:
1) make any direct or indirect sale, encumbrance, hypothecation,
assignment, refinancing, pledge, conveyance, or transfer in any other
form of the Property or Development or of any of Developer's interest
Page 21 of 39
EXHIBIT 2D
in either of them;
2) substantially add to, remodel, remove, reconstruct, or demolish any part
of the Development;
3) permit the use of the Development for any purpose other than that
permitted by this Agreement;
4) incur any liability or obligation in connection with the Property or
Development, other than for current Operating Expenses, nor incur any
liability, charge, assessment, or obligation whatsoever that is secured
in whole or in part by any interest in or lien or encumbrance on the
Property provided that the Subrecipient may permit refinancing or
additional financing secured by the Property to the extent necessary to
maintain or improve the Development's fiscal integrity, or to maintain
Affordable Rents;
5) enter into any contract relating to rehabilitating or managing the
Development;
6) enter into any lease for more than a single rental Unit, a ground lease
of the Property or any interest therein, except for the rental of
Commercial Space in the Development; or
7) if the Developer or its successor in interest is a limited partnership,
discharge or replace any general partner or amend, modify or add to its
partnership agreement, or amend, modify or add to the organizational
documents of the general partner; except that it may transfer limited
partner interests without such approval. The withdrawal, removal,
and/or replacement of a general partner of the partnership pursuant to
the terms of the partnership agreement shall not constitute a default
under any of the Program Legal Documents, and any such actions shall
not accelerate the maturity of the Assistance, provided that any required
substitute general partner is reasonably acceptable ta the Subrecipient
and the Department, and is selected with reasonable promptness.
b. Any and all proposed sale, transfer, conveyance of the Property or
Development, or proposed refinancing of any loans for the Development, must
be approved in writing by both the Subrecipient and the Department, in the
Department's sole discretion. In evaluating such requests, the Department will
consider, among other factors, the following:
1) The transferor Developer (or Developer, as applicable) is in compliance
with this Agreement, or the sale, transfer, conveyance or refinance will
result in the cure of any existing violations of this Agreement.
2) The transferee Developer agrees to assume all obligations of the
Page 22 of 39
EXHIBIT 2D
transferor Developer pursuant to this Agreement, the other Program
Legal Documents and the Program Requirements.
3) The transferee Developer demonstrates to the Subrecipient's
satisfaction that it has the ability and capacity to own and operate the
Development in full compliance with this Agreement and the Program
Requirements for the duration of this Agreement.
4) Any terms of the sale, transfer, conveyance or refinance shall not
jeopardize the Subrecipient's security or the transferee Developer's (or
Developer's, as applicable) ability to comply with all Program
Requirements.
5) The Subrecipient and Department will not approve any cash payment
to the selling party, or to any party related to or affiliated with the selling
party. The Developer may not cash out its equity. Deferred developer
fee, and seller carry back loans, cannot be cashed out from the
proceeds of a sale, transfer, conveyance or refinance.
c. The Subrecipient and Department may grant its approval for a sale, transfer,
conveyance or refinance of the Property or Development subject to such terms
and conditions as may be necessary to preserve or establish the fiscal integrity
of the Development or to ensure compliance with the Program Requirements.
Such conditions may include, but are not limited to, the deposit of sales
proceeds, or a portion thereof, to maintain required reserves or to offset
negative cash flow.
d. If Developer or its successor in interest is a limited partnership, the execution
and delivery of the purchase option and right of first refusal agreement
described in the partnership agreement, if any, shall not constitute a default
under the Program Legal Documents or accelerate the maturity of the
Assistance thereunder, provided that such purchase option is and remains
subordinate to the documents securing the Assistance. Any requisite consent
of the Subrecipient and Department to (a) the exercise of said purchase option
and right of first refusal agreement by the Developer identified therein, and to
(b) the assumption without penalty of Assistance obligations by the Developer
and the release of Developer from such obligatians shall not be unreasonably
withheld, but may be conditioned upon the execution of an operating guaranty
from the Developer in form provided by the Subrecipient. Subject to any such
consent requirement, the exercise of rights under the partnership agreement
shall not constitute a default under the Program Legal Documents or
accelerate maturity of the Assistance.
e. If the Developer or its successor in interest is a limited liability company, the
execution and delivery of the purchase option and right of first refusal
agreement described in the operating agreement, if any, shall not constitute a
default under the Program Legal Documents or accelerate the maturity of the
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EXHIBIT 2D
Assistance thereunder, provided that such purchase option is and remains
subordinate to the documents securing the Assistance. Any requisite consent
of the Subrecipient and Department to (a) the exercise of said purchase option
and right of first refusal agreement by the Developer identified therein, and to
(b) the assumption without penalty of Assistance obligations by the Developer
and the release of Developer from such obligations shall not be unreasonably
withheld, but may be conditior�ed upon the execution of an operating guaranty
from the Developer in form provided by the Subrecipient. Subject to any such
consent requirement, the exercise of rights under such the operating
agreement shall not constitute a default under the Program Legal Documents
or accelerate maturity of the Assistance.
f. If Developer or its successor in interest is a limited partnership or limited liability
company and the purchase option and right of first refusal agreement
described in the partnership or operating agreement, if any, is not exercised
and the Development is sold subject to low-income housing use restrictions
contained in this Rgreement, the requisite consent of the Subrecipient and
Department to said sale, and to the assumption without penalty of Assistance
obligations by the purchaser and the release of Developer from such
obligations, shall not be unreasonably withheld, but may be conditioned upon,
among other requirements, the execution of an operating guaranty from the
Developer in form provided by the Subrecipient.
g. The Developer agrees that if it is organized as a partnership or limited liability
company, Developer shall not dissolve the partnership or limited liability
company prior to the expiration of the term of this Agreement, without the prior
written approval of the Subrecipient and the Department.
27. Breach of Aqreement by Developer.
a. In the event of the Developer's breach, violation or default in the performance
of any covenant, agreement or obligation of the Developer set farth in this
Agreement including, but not limited to, Developer's covenant to perform its
obligations under the Program Legal Documents, the Subrecipient shall give
the Developer written notice in the manner specified in para_qraph 42 of this
Agreement, specifying the nature of the violation, breach or default and the
action needed to cure. If the default, breach or violation is not cured to the
satisfaction of the Subrecipient within the time period specified in the notice,
which shall not be less than the applicable time to cure as stated in para_qraph
28 of this Agreement, the Subrecipient may declare a default hereunder and
may take any one or more of the following actions:
1) Collect all Rents and income in connection with the operation of the
Development and use the same and the reserve funds for the operation
and maintenance of the Development.
2) Take possession of the Development and bring any action necessary
Page 24 of 39
EXHIBIT 2D
to enforce any rights of the Developer growing out of the operation of
the Development, and operate the Development in accordance with the
terms of this Agreement until such time as the Subrecipient, in its sole
discretion, shall determine that the Developer is again in a position to
operate the Development in accordance with the terms of this
Agreement.
3) Apply to any court, state or federal, for specific perFormance of this
Agreement or for the appointment of a receiver to take over and operate
the Development in accordance with the terms of this Agreement, or for
such other relief as may be appropriate. It is agreed by the Developer
that the injury to the Subrecipient arising from a default under any of the
terms of this Agreement would be irreparable and that the amount of
compensation, which would provide adequate relief to the Subrecipient,
in light of the purposes and requirements of the Program, would be
impossible to ascertain.
4) Accelerate all amounts including outstanding principal and interest, due
under the terms of the Program Legal Documents (if any) and demand
immediate repayment thereof. Upon a failure to repay such accelerated
amount in full, the Note provides that the Subrecipient may proceed with
a foreclosure or sale under the power of sale in accordance with the
provisions of the Deed of Trust and state law regarding foreclosures.
5) Seek such other appropriate remedies as may be available under the
law.
b. In the event that the breach or violation involves charging tenants Rent or other
charges in excess of those permitted under this Agreement, the Subrecipient
may demand that Developer immediately return all such excess Rents or other
charges to the affected households. If legal action is necessary to enforce the
provisions of this Agreement, the Subrecipient may seek the return of such
overcharges to the affected households.
c. The remedies of the Subrecipient hereunder and under the other Program
Legal Documents are cumulative, and the exercise of one or more of such
remedies shall not be deemed an election of remedies and shall not preclude
the exercise by the Subrecipient of any one or more of its other remedies.
d. The tenants of the DR-MHP Assisted Units shall be considered third party
beneficiaries of this Agreement, all shall have such rights and remedies to
enforce the Pragram Requirements of this Agreement as may be available to
third party beneficiaries under the law.
28. Time To Cure.
a. If a monetary event of default occurs under the terms of any of the Program
Page 25 of 39
EXHIBIT 2D
Legal Documents, prior to exercising any remedies thereunder the
Subrecipient shall give Developer written notice af such default. Developer
shall have a period of seven (7) days after such notice is given within which to
cure the default prior to exercise of remedies by the Subrecipient under the
Program Legal Documents, or such longer period of time as may be specified
in the Program Legal Documents.
b. If a non-monetary event of default occurs under the terms of any of the
Program Legal Documents, prior to exercising any remedies thereunder, the
Subrecipient shall give Developer written notice of such default. If the default
is reasonably capable of being cured within thirty (30) days, as determined by
the Subrecipient in its sole discretion, Developer shall have such period to
effect a cure prior to exercise of remedies by the Subrecipient under the
Program Legal Documents, or such longer period of time as may be specified
in the Program Legal Documents. If the default is such that it is not reasonably
capable of being cured within thirty (30) days, as determined by the
Subrecipient in its sole discretion, or such longer period if so specified, and if
Developer (a) initiates corrective action within said period, and (b) diligently,
continually, and in good faith works to effect a cure as soon as possible, then
Developer shall have such additional time as is determined by the
Subrecipient, in its sole discretion, to be reasonably necessary to cure the
default prior to exercise of any remedies by the Subrecipient. If Developer or
its successor in interest is a limited partnership, if Developer fails to take
corrective action or to cure the default within such a specified time, the
Subrecipient shall give Developer written notice thereof, whereupon the lirnited
partner may remove and replace the general partner with a substitute general
partner who shall effect a cure within a reasonable time thereafter in
accordance with the foregoing provisions. In no event shall the Subrecipient
be precluded from exercising remedies if its security becomes or is about to
become materially jeopardized by any failure to cure a default or the default
is not cured within ninety (90) days after the first notice of default is given, or
such longer period of time as may be specified in the Pragram Legal
Documents.
c. In the event of either a monetary or non-monetary default under the Program
Legal Documents by the Developer, Subrecipient shall provide notice of such
default to the Department simultaneously with the giving of notice to the
Developer.
29. Property Tax Exemption.
To the extent the property tax exemption provisions of section 214 of the Revenue
and Taxation Code are applicable to the Developer and the Development,
Developer shall take all actions necessary to qualify the Development for the
maximum exemption from property taxes available pursuant to said section 214 of
the Revenue and Taxation Gode within 18 months of the recordation date of this
Agreement. Such actions may include, but are not limited to the following:
Page 26 of 39
EXHIBIT 2D
a. Modify, add to or delete from the articles of incorporation, bylaws or other
organizational documents of Developer or of the managing general partner of
Developer;
b. Apply for nonprofit, tax-exempt status to the appropriate state or federal
agency;
c. Provide the certifications and assurances required by section 214 of the
Revenue and Taxation Code; and
d. Comply with the procedures and requirements imposed by local government
agencies as a condition of receiving the property tax exemption.
e. Developer's failure to qualify the Development for the maximum exemption
from property taxes as described in this Section 29 shall constitute a default
under the terms of this Agreement, and may also constitute a default under the
Program Legal Documents, subject to applicable notices and cure periods.
30. Controlling Aqreement.
a. Developer specifically agrees and acknowledges that, notwithstanding any
internal accounting procedures or provision pertaining to the use of receipts,
payments, reserves and distributions contained in its partnership or other
organizational documents or agreements, the terms of this Agreement, the
Notice to Praceed and the Program Requirements shall control as to the use
of the funds provided under the Development Agreement and all Operating
Income from the Development.
b. In the event of any inconsistencies or conflicts between the terms of this
Agreement and the terms of the other Program Legal Documents, the terms of
this Agreement shall control.
31. Assiqnment of Subrecipient Riqhts.
The Subrecipient retains the right at its sole discretion to assign all or part of its
rights under this Agreement for the purpose of ensuring compliance and
enforcement of Developer's duties and obligations hereunder to a Subrecipient-
owned or controlled entity such as its Housing Authority. In addition, the
Subrecipient may designate or hire an agent to act on its behalf in monitoring
compliance and enforcing the provisions hereof. In the event Subrecipient assigns
all or part of its rights for the purpose of ensuring compliance and enforcement, or
designates or hires an agent to act on its behalf with respect to monitoring and
enforcement as described in this paragraph, Subrecipient shall remain obligated
under, and ultimately responsible for fulfilling, the terms of this Agreement.
32. Amendment.
This Agreement shall not be altered or amended except in writing, executed by all
Page 27 of 39
EXHIBIT 2D
of the parties hereto, with prior written approval by the Department.
33. Partiallnvaliditv.
If any provision of this Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions hereof shall not in
any way be affected or impaired thereby.
34. Bindinq on Successors.
This Agreement shall bind, and the benefits hereof shall inure to, the respective
parties hereto, their legal representatives, executors, administrators, transfers,
successors in interest and assigns, provided, however, that the Developer may not
assign this Agreement or any of its obligations hereunder, voluntarily or by
operation of law, without the prior written approval of the Subrecipient. The term
"Developer" as used herein shall include and apply to any person or entity
succeeding to the legal, equitable, proprietary or possessory interest of Developer
in the Development.
35. Recordinq of Agreement.
This Agreement, and all amendments hereto, shall be executed by each of the
parties and their respective signatures acknowledged. This Agreement, shall be
recorded against the Property in the official records of the county(ies) in which the
Development is situated before construction begins, but not more than 180 days
subsequent to the issuance of a Notice to Proceed by the Department and shall
have priority over other liens, encumbrances and other matters of record except
as may be approved by the Department. Exceptions to the position of this
Agreement must be approved in writing and in advance by the Department.
36. Indemnification of Department� Waiver.
a. Developer agrees to indemnify and defend the Department and its agents,
employees and officers against, and hold the Department and its agents,
employees and officers harmless from, any and all costs, losses, damages,
liabilities, claims, demands, actions, judgments, court costs and legal or other
expenses (including attorneys' fees) of every name, kind and description,
which the Department may incur as a direct or indirect consequence of any of
the following: (1) the making of the Assistance to the Developer; (2)
Developer's failure to perform any obligations as and when required by this
Agreement or any of the other Program �egal Documents; (3) any failure at
any time of any of Developer's representations or warranties to be materially
true and correct; (4) any act or omission by Developer, any contractor,
subcontractor, material supplier, engineer, architect or other person or entity
with respect to the Property or the construction, management, maintenance or
operation of the Development; ar (5) the presence of any recognized
environmental conditians at the Development or on the Property. Developer
Page 28 of 39
EXHIBIT 2D
shall pay immediately upon the Department's demand any amounts owing
under this indemnity together with interest from the date the indebtedness
arises until paid at the rate of ten percent (10%) per annum. Developer's duty
to indemnify and hold harmless includes the duties to defend as set forth in
section 2778 of the Civil Code. Developer shall indemnify and hold harmless
the Department and its agents, officers and employees as set forth herein
regardless of the existence or degree of fault or negligence whether active or
passive, primary or secondary on the part of the Department, the Subrecipient,
or their respective agents, officers, employees, contractors or subcontractor;
provided, however, that Developer's duty to indemnify and hold harmless
hereunder shall not extend to liability arising from the gross negligence or
willful misconduct of the Department. Developer's duty to indemnify and
defend the Department shall survive the term of this Agreement. In the event
the United States Department of Housing and Urban Development ("HUD")
acquires title to the Development, this indemnification provision will not apply
to HUD.
b. The Developer waives and releases any and all rights to any types of express
or implied indemnity against the Department or its agents, officers or
employees.
c. The Developer expressly waives the protections of section 1542 of the Givil
Code in relation to subAara_qraphs a, and b. above. Said section 1542
provides as follows: "A general release does not extend to claims that the
creditor or releasing party does not know or suspect to exist in his or her favor
at the time of executing the release and that, if known by him or her, would
have materially affected his or her settlement with the debtor or released
party".
37. Indemnification of Subrecipient� Waiver.
a. Developer agrees to indemnify the Subrecipient and its agents, employees and
officers against, and holds the Subrecipient and its agents, employees and
ofFicers harmless from, any losses, damages, liabilities, claims, actions,
judgments, court costs and legal or other expenses (including attorney's fees)
of every name, kind and description, which the Subrecipient may incur as a
direct or indirect consequence of: (1) the making of the Assistance to the
Developer; (2) Developer's failure to perform any obligations as and when
required by this Agreement or any of the other Program Legal Documents; (3)
any failure at any time of any of Developer's representations or warranties to
be materially true and correct; (4) any act or omission by Developer, any
contractar, subcontractor, material supplier, engineer, architect or other person
or entity with respect to the Praperty or the construction, management,
maintenance or operation of the Development; or (5) the presence of any
recognized environmental conditions at the Development or on the Property.
Developer shall pay immediately upon the Subrecipient's demand any
amounts owing under this indemnity together with interest from the date the
Page 29 of 39
EXHIBIT 2D
indebtedness arises until paid at the rate of ten percent (10%) per annum.
Developer's duty to indemnify and hold harmless includes the duties to defend
as set forth in section 2778 of the Civil Code. Developer shall indemnify and
hold harmless the Subrecipient and its agents, officers and employees as set
forth herein regardless of the existence or degree of fault or negligence
whether active or passive, primary or secondary on the part of the
Subrecipient, or their respective agents, officers, employees, contractors or
subcontractor; provided, however, that Developer's duty to indemnify and hold
harmless hereunder shall not extend to liability arising from the gross
negligence or willful misconduct of the Subrecipient. Developer's duty to
indemnify the Subrecipient shall survive the term of this Agreement. In the
event HUD acquires title to the Development, this indemnification provision will
not apply to HUD.
b. The Developer waives and releases any and all rights to any types of express
or implied indemnity against the Subrecipient or its agents, officers or
employees.
c. The Developer expressly waives the protections of section 1542 of the Civil
Code in relation to subpara_qraphs a. and b. above. Said section 1542
provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR OR RE�EASING PARTY DOES NOT
KN4W OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY."
38. No Waiver.
No waiver by the Department or Subrecipient of any breach or violation of or default
under this Agreement shall be deemed to be a waiver of any other or subsequent
breach or violation hereof or default hereunder. All waivers must be in a writing
signed by the party making the waiver in order for such waiver to be effective.
39. Third-Party Beneficiaries.
The Developer and Subrecipient expressly agree and acknowledge that the
Department is an intended third-party beneficiary to the provisions of this
Agreement. Among other things, the performance of this Agreement benefits the
Department by creating, rehabilitating, or otherwise making available, affordable
housing units within the State of California, and allows the Department to ensure
compliance with applicable program requirements governing the Development.
The Department is the sole third-party beneficiary and no other parties are
intended or should be deemed as such.
Page 30 of 39
EXHIBIT 2D
40. Captions.
The captions used in this Agreement are inserted only as a matter of convenience
and for reference and in no way define, limit, or describe the scope or the intent of
this Agreement.
41. Governinq Law.
This Agreement shall be construed in accordance with and governed by the laws
of the State of California and the United States of America. All code references
herein refer to the Califarnia state statutes, unless specifically indicated otherwise.
42. Notice.
Except for any notice required under applicable law to be given in another manner,
any notices, demands or communications between the parties hereto shall be
sufficiently given if, and shall not be deemed given unless, dispatched by certified
mail, postage prepaid, return receipt requested or delivered by express delivery
service with delivery receipt, to the address of the respective party as set forth
below, or to such other address as the respective party may have designated by
written notice given to the other party in the manner pravided herein. Such written
notices, demands and communications shall be effective on the date shown on the
delivery receipt as the date delivered, the date on which delivery was refused, or
the date on which delivery was attempted.
43. Attorneys' Fees.
The prevailing party in any action to enforce this Agreement, including residents of
DR-MHP Assisted Units, shall be entitled to reasonable attorneys' fees and costs
as determined by the trier of fact in that forum.
44. Subrecipient's Approval, Etc.
Whenever this Agreement or any of the other Program Legal Documents requires
the approval, consent, or other determination by the Subrecipient, the Subrecipient
shall act reasonably and in good faith.
45. Compliance with IRC Section 42(h)(6)(E)(ii).
In the event a regulatory agreement required by TCAC is recorded against the
Property as a condition of the award of federal tax credits, the Department and
Subrecipient agree to camply with the provisions set forth in Internal Revenue
Code ("IRC") Section 42(h)(6)(E)(ii). As of the date of this Agreement, IRC Section
42(h)(6)(E)(ii) does not permit the eviction or termination of tenancy (other than for
good cause) of an existing tenant of any low-income unit or any increase in the
gross rent with respect to such unit not otherwise permitted under Section 42 for a
period of three (3) years after the date the building is acquired by foreclosure or
instrument in lieu of foreclosure.
Page 31 of 39
EXHIBIT 2D
46. Special Conditions.
The Developer agrees to comply with and be bound by the special conditions, if
any, set forth in Exhibit C hereto.
47. Exhibits. The following exhibits are attached hereto, incorporated herein and
made a part of this Agreement:
Exhibit A: Legal Description of the Property
Exhibit B: Unit Designation and Rent Schedule and requirements for
Supportive Housing Units or Special Needs Population
Units; and
Exhibit C: Special Conditions.
[Signatures of the Developer and the Subrecipient fo//ow on page 32 of this
Regulatory Agreement. The remainder of this page is intentionally left blank.J
Page 32 of 39
EXHIBIT 2D
IN WITNESS WHEREOF, the City and the Developer have executed this Agreement on the respective
dates set forth below:
City of Redding, a municipal corporation
Date:
By: Michael Dacquisto, Mayor
ATTEST: APPROVED AS TO FORM:
By: Pamela Mize, City Clerk By: Barry E. DeWalt, City Attorney
PARTNERSHIP/BORROWER/OWNER:
PIPER WAY SENIOR HOUSING LP,
a California limited partnership
By: PWS Housing, LLC,
a California limited liability company,
its General Pa�tner
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
PARTNERSHIP'S GENERA� PARTNER:
PWS HOUSING, LLC,
a California limited liability company
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
Page 33 of 39
EXHIBIT 2D
EXHIBIT A TCZ REGULATORY AGREEMENT
LEGAL DESCRIPTION OF THE PRC?PERTY
LE�GAL�ESCF�iPTIC�CV
T}�E Lt'sND F�EFEf2r^�Es�TO N�REIt+�BE�t�1'�"15 51FlfrATE�J REL7CI�NG IN TF�E�f3l��PdTY�F Stit"tSTA�,a�T,4TE
t}�=�AU�G�''lIA.r"�P�1L��5 L?ES��:I�ED F�Fr'JIL�'{e+`�:
l�ai 7, �s shamun cn tts� m�3p aC Fefar .Ar�d�t�n �o i�9r�o€ii�wn �ubd�visinn, �c�z>ard�i in ffi� oP�� ����� Cc�urrt}�
F�ecerr�e�.��c�h 3. i�i89 I�s Boc�s a1 tkld P�aCs.af pa�e 3�,Sh�sE�Caurrt f R�catds.
AP(^�: 10A-f 8�-+DQ3-�8fF0
Page 34 of 39
EXHIBIT 2D
EXHIBIT B TO REGULATORY AGREEMENT
I. UNIT DESIGNATIONS AND RENT SCHEDULE
Developer shail comply with Rent provisions of all regulatory agreements
regulating the Property.
The Initial Operating Year ends at the end of the initial Fiscal Year, which is:
, 20
During the Initial Operating Year:
A. Developer shall charge Rents for DR-MHP Assisted Units that do not
exceed Rents set forth in the schedule below; and
B. Developer shall charge Rents for Units other than DR-MHP Assisted
Units in amounts not less than the amounts shown herein.
After the Initial Operating Year, Rents may be increased in accordance
with paragraphs 10 and 11 of this Agreement.
II. UNIT MIX
DR- Restricted Non- Net Rent
No. of Total Utility (gross—Annual Net
Bedrooms MHP Units Restricted Units Rent Allowance util. Rent �ncome Limit
Assisted tincluding Units a��W�
Units DR-MHP
units
1 47 59 388 27,936 30°/ AMI
1 18 18 70 59 11 131,976 45°/ AMI
I 18 18 '745 59 86 $148,176 50°/ AMI
1 12 17 17 894 59 835 170,340 60°/ AMI
1 1 Manage AMI
°/ AMI
� Market
Rate
0 Mngr.
TOt21s l2 59 I Q $478,428
The above Unit Mix chart is based an the following:
2022 High HOME Program Rents and CDBG Income Limits for Shasta
County, California.
Page 35 of 39
EXHIBIT 2D
iii. DR-MHP PRIORITY PROVISIONS AND/OR SUPPORTIVE HOUSING
UNITS REQUIREMENTS
[SUPPORTIVE HOUSING]
A. For the full term of this Agreement, Developer shall restrict
occupancy of 6 Units within the Development as permanent
Supportive Housing Units to be occupied by eligible Households
experiencing Chronic Homelessness, as a housing type that meets
the requirements of the 2019 Multifamily Housing Program
Guidelines, Article 2, Section 7302(e)(4).
B. For these units, Developer shall select tenants in strict accordance
with the criteria and procedures identified in the supportive
services plan for the Development approved by the Subrecipient,
as may be amended from time to time. For the full term of this
Agreement, Developer shall make a good-faith effort to provide all
the supportive services identified in the supportive services plan
for the Development approved by the Subrecipient. At a minimum,
Developer shall provide without cost to tenant the following
services, or arrange for their provision: Case management and
social service caordination provided by Shasta County Health and
Human Services Aqency.
C. No later than ninety (90) days after the end of each Fiscal Year for
the Development, Developer shall submit for Subrecipient review
and approval a report on the Supportive Housing Units households
in the Develapment. This report shall be on a form pravided by the
Subrecipient, and shall include a listing of the number and type of
Supportive Housing Units residents, a description of the supportive
services provided to them, and such other matters as the
Subrecipient may require.
D. For the full term of this Agreement, Developer shall restrict
occupancy of_ units within the Development for the following
Special Needs Population or Populations:
a.
[ELDERLY]
E. For the full term of this Agreement, Developer shall restrict
occupancy of 59 Units within the Development for low-income
Elderly Persons, defined in the DR-MHP Policies and Procedures
as persons 62 years of age or older, or in the State Multifamily
Housing Program Guidelines as residents who are 62 years of age
or older under applicable provisions of Cal. Civ. Code, Section 51.3
Page 36 of 39
EXHIBIT 2D
and the federal Fair Housing Act, or the Project is for residents who
are 55 years of age or older, per 24 CFR 100.300-308 subpart E.
Developer shall restrict at least 6 Units, for extremely low income
Elderly Persons with a household income at or below 30% AMI.
[DISABI�ITY)
F. For the full term of this Agreement, Develaper shall restrict
occupancy of 9 Units, or 15% of the total Units, within the
Development for persons with at least one Disability. Developer
shall restrict at least 9 Units, [Policy requires at least 3% of the total
Units) for persons with at least one Disability with a household
income at our below 30% AMI.
Page 37 of 39
EXHIBIT C TO REGULATORY AGREEMENT
Speciai Conditions
In the event of any inconsistencies or conflicts between these Special Gonditions and
the terms of this Agreement or any of the other Program Legal Documents, the terms of
these Special Conditions shall control.
I. Required Reserves (paragraph 19).
A. Replacement Reserves (paragraph 19.a). � 2
Annual Deposit Amount 3: $30,000
Initial Capitalization Amount: $
Date of Deposit: close of escrow
Withdrawals Require Prior YES
Subreci ient A roval?
B. Operating Reserve (paragraph 19.b).
Deposit Amount: $140,814
Initial Capitalization Amount: $
Date of Deposit: close of escrow
Withdrawals Require Prior YES
Subreci ient A roval?
' The Subrecipient defers to the reserve requirements of the HUD capital advance grant("Grant")for the term of
the Grant, however upon termination of the Grant, reserve requirements will revert to the SubrecipienYs
requirements. [use footnote only for HUD-811, delete otherwise]
2 The annual deposit of$will be held and controlled by CaIHFA. The initial capitalized portion of
$ will be placed by Developer in a separate account pursuant ta the Subrecipient's regulations and
requirements.When CaIHFA no longer controls and actively manages the reserves,the CaIHFA controlled balance
will be combined with the capitalized reserve account and subject to the Subrecipient's regulations and
requirements. [alternate reserve footnote for projects jointly funded with CaIHFA, delete otherwise]
3 The first annual deposit amount shall be prorated from the close of escrow to the end of the Fiscal Year(defined
in Section 3}.
Page 38 of 40
C. Other Reserves (paragraph 19.c).
If applicable, approved transition reserve account established to prevent
tenant displacement resulting from the termination of rent subsidies.
Name:
Deposit Amount: $ per
Initial Capitalization Amount:
Withdrawals Require Prior
Subreci ient A roval?
Name:
Deposit Amount: $ per
Initial Capitalization Amount:
Withdrawals Require Prior
Subreci ient A roval?
II. Payments to be made Prior to Determinatian of Net Cash Flow (paraqraph
22b.(3)).
Lender: U.S. Bank National Association
Initial Principal Amount: $1,214,1Q0
Pa ment Amount 3 $9,471 per month for 20 years
Term to Maturity: 20 years
Lien Position: First
Interest Rate and Type: 7.08%
[Add additional lenders and details as required]
III. Deferred Developer Fee (paraqraph 22 b ).
The Subrecipient approved Deferred Developer Fee from paragraph 22.b.(6)
is $ 0
3 Payment Amount to include details on future adjustme�ts, caps, and balloons
Page 39 of 40
IV. Use of Net Cash Flow (paraqraph 24).
Net Cash Fiow shall be applied towards payment of the following loans, in the
percentages noted:
CA Housing & Community Development (CDBG-DR)
Lender:
Initial Principal Amount: $2,000,000
Percentage of Net Cash Flow: 17.87%
Term to Maturity: 55 years
Lien Position: second
Interest Rate: 3 %
CA Housing & Community Development (IIG)
Lender:
Initial Principal Amount: $2,500,000
Percentage of Net Cash Flow: 22.34%
Term to Maturity: 55 years
Lien Position: th;rd
Interest Rate: 3%
CA Housing & Community Development (NPLH)
Lender:
Initial Principal Amount: $1,094,849
Percentage of Net Cash Flow: 9.78%
Term to Maturity: 55 years
Lien Pasition: fourth
Interest Rate: 3%
Christian Church Homes
Lender:
Initial Principal Amount: $1,452,340
Percentage of Net Cash Flow: 50%
Page 40 of 40
Term to Maturity: 55 years
Lien Position: fifth
Interest Rate: 3%
CA Department of Developmental Services
Lender:
Initial Principal Amount: $739,130
Percentage of Net Cash Flow: 0% deferred
Term to Maturity: 55 years
Lien Position:
Interest Rate: 3%
[Add additional lenders and details as required)
[Include as appropriate]
Limited Partner Cure Rights. Notwithstanding anything to the contrary herein, the
Subrecipient hereby agrees that any cure of any default offered by the limited partners of
the Developer shall be accepted or rejected on the same basis as if cure was offered by
the Developer. Copies of all notices of default sent hereunder shall be sent to the limited
partners of the Developer at the following address:
(name of equity partner/Financial Institution)
U.S. Bank National Association
633 W 5t" Street, 29th Floor,
Los Angeles, CA 90071
Attn: Annie H. Wong
The Subrecipient's failure to provide a duplicate copy will nat be a breach by the
Subrecipient, nor will it impair the Subrecipient's or Department's foreclosure or other
remedies in any way.
�lnsert additional project specific Special Conditions,]
Page 41 of 40
EXHIBIT 3
RIDER TO DEVELOPMENT AGREEMENT
State of California
Department of Housing and Community Development
Community Development Block Grant - Disaster Recovery
2018 Disaster Recovery Multifamily Housing Program
PIPER WAY SENIOR HOUSING/ CITY OF REDDING
Pursuant to that certain Master Standard Agreement ("MSA") number 21-DRMHP-21008,
entered into on the 6t" day of August 2021, by and between the California Department of
Housing and Community Development ("Department") and City of Redding
("Subrecipient"), this RIDER TO DEVELOPMENT AGREEMENT ("RIDER") is
incorporated into and made a part of that certain Development Agreement, defined as the
legal instrument that conveys the Project Funds to the development, entered into on the
day of , 2023 by and between City of Redding, ("Subrecipient")
and Piper Way Senior Housing, LP, ("Developer") (the "Development Agreement") to
include terms required by the Department for the individual multifamily affordable housing
development project proposed by Subrecipient located at Assessor's Parcel Number 104-
680-003-000 consisting of 59 affordable housing units (plus one managers unit) including
12[twelve] CDBG-DR restricted units, (the "Approved Project").
This Approved Project is subject to the terms af the MSA, this Rider, and the funding
amount and conditions determined by the Department set forth in the Notice to Proceed
("NTP") for the Approved Project. The Subrecipient and Developer agree to abide by the
following terms required by Department applicable to the Approved Project.
1. Performance Milestones
A. Subrecipient shall record in the applicable County Recorder's office the DR-
MHP Regulatory Agreement, substantially in the form provided by the
Department, against the property before construction begins but not more
than 180 days subsequent to the issuance of a NTP by the Department.
The DR-MHP Regulatory Agreement, and specifically the affordability and
rent covenants therein, must have priority over other liens, encumbrances
and other matters of record except as may be approved by the Department.
Exceptions to the position of the DR-MHP Regulatory Agreement must be
approved in writing and in advance by the Department.
B. Subrecipient shall monitor the Project construction schedule, as provided in
the Project Applic�tion and NTP, to ensure progress is being made as
proposed. If any milestone dates identified in the Project canstruction
21-DRMHP-21008-NTPX
Page 1 of 30
schedule increase or decrease by more than 30 calendar days,
Subrecipient must notify the Department in writing as described in
subsection F of the NTP.
C. No later than April 30, 2024, Subrecipient shall provide the Department with
written certification on its letterhead evidencing that physical construction
work is underway for the Approved Project.
D. No later than May 31, 2026, Subrecipient shall provide the Department with
a copy of the Certificate of Occupancy for all Approved Projects.
E. No later than August 31, 2026, Subrecipient shall provide all required
Project closeout documentation as detailed in MSA Exhibit B, Section 6, for
all Approved Projects.
2. Prioritv of Use of Funds
Subrecipient and Developer must utilize funds available under the NTP ("Project
Funds") to supplement rather than supplant funds otherwise available. To the
extent available, Subrecipient and Developer should disburse funds available to
the Approved Project from, among other sources, program income, rebates,
refunds, contract settlements, audit recoveries, insurance and condemnation
proceeds and interest earned on such funds before disbursing Project Funds.
3. Method of Pavment
Payments will be made directly to Subrecipient as reimbursements based on the
documented and satisfactory completion of Approved Project activities. The
Department shall not authorize payments or reimbursements unless it has
determined the activities indicated in the Financial Repart have been performed in
compliance with the terms of the MSA and any other agreements executed by the
parties in connection herewith.
A. Reimbursements for costs incurred
1) The Subrecipient may use Project Funds for reimbursement by the
Department of Eligible Expenses as defined in the MSA, applied to
Approved Projects.
2) Financial Reports for Project Funds shall be submitted to the
Department by Subrecipient on a pro rata basis based on the
percentage of construction completed.
3) Subrecipient shall withhold as retainage 10% of all DR-MHP funded
Developer payments. No retainage payments shall be released to
the Developer or reimbursed to the Subrecipient until receipt and
approval by the Department of all required Approved Project
closeout documents identified in Section 6 of the MSA.
21-DRMHP-21008-NTPX
Page 2 of 30
4) To receive reimbursement for Approved Project activities, the
Subrecipient must timely submit all required Department forms via
Grants Network. Financial Reports must include the level of
documentation specified by the Department in the Department's
most recent version of the Grant Rdministration Manual located on
the Department's website, in order to be reviewed and processed.
5) Developer shall provide Subrecipient with documentation as
requested to evidence expenditure of eligible costs on the Approved
Project.
4. Duplication of Benefits
A Duplication of Benefits (DOB) occurs when a program beneficiary receives
assistance from multiple sources for a cumulative amount that exceeds the total
need for a particular recovery purpose. The amount of the duplication is the
amount of assistance provided in excess of the need. It is the Department's
responsibility to ensure that the DR-MHP provides assistance only to the extent
that the disaster recovery need has not been fully met by funds that have already
been paid, or will be paid, from another source.
The Subrecipient must report all funds obtained for the activity by the Project owner
from any source fram the date of the disaster until the Project is completed.
Additionally, the Department, in coordination with the Subrecipient, will perform a
check for DOB prior to issuing a Notice to Proceed to ensure that duplicative
assistance is not provided for multifamily housing. The Department also reserves
the right to require that the Subrecipient perForm additional DOB checks throughout
the course of the Approved Project's period/performance, up to and through the
closeout of each Approved Project, to ensure there is no duplicative assistance
throughout the course of the Approved Project. Any person wha knowingly makes
a false claim or statement to HUD may be subject to civil or criminal penalties
under 18 U.S.C. 287, 1001 and 31 U.S.C. 3729.
The Subrecipient agrees to repay to the Department any assistance later received
for the same purpose as the CDBG—DR funds and that exceeds the total need for
the particular recovery purpose.
5. Developer Responsibilities
A. Developer for the Approved Project shall be responsible for all project
management functions of the Approved Project, including praject design
and develapment, construction and/or rehabilitation, maintenance,
selection of tenants, annual recertification of Household income and size,
and management of the Approved Project and units in accordance with local
requirements, the most recent version of the DR-MHP Policies and
Procedures Manual, the requirements of the MSA and DR-MHP Regulatory
21-DRMHP-21008-NTPX
Page 3 of 30
Agreement for the duration of the affordability period.
B. Developer shall be responsible for all repair and maintenance functions of
the Approved Project, including ordinary maintenance and repair, and
replacement of capital items. "Ordinary maintenance and repair" means
regular or usual care, upkeep or replacement of any part, or putting back
together that which is deteriorated or broken, of an existing property,
building or structure so that the Approved Project is in decent, safe, and
sanitary condition at all times. Developer shall ensure maintenance of
residential units, commercial space and common areas in accordance with
all federal, state, and local health, building, and housing codes, and the
Management Plan described below.
C. If Developer hires a separate entity to manage the property after
construction is complete, Developer for the Approved Project shall ensure
that the Approved Project is managed by an entity approved by the
Subrecipient that is actively in the business of managing affordable housing.
Any property management contract entered into for this purpose shall be
subject to Subrecipient approval and must contain a provision allowing
Developer to terminate the contract upon 30-days' notice. Developer shall
terminate said contract as directed by Subrecipient upon a determination
that management does not comply with DR-MHP requirements and/or the
provisions of any recorded regulatory agreement for the Approved Project.
D. Developer for the Approved Project shall develop a management plan for
the Approved Project ("Management Plan") subject to Subrecipient
approval prior to the start of construction. Any change to the Management
Plan shall be subject to the approval of Subrecipient. The Management Plan
shall be consistent with program requirements and must include provisions
addressing the following:
• The role and responsibility of Developer and the delegation of its
authority;
• Personnel policy and staffing arrangements including key personnel
and lines of authority;
• Plans and procedures for publicizing and achieving early and
continued occupancy by eligible low- to moderate-income tenants;
• Procedures for determining tenant eligibility and selecting tenants and
for certifying and annually recertifying Household income and size;
• Plans for carrying out, and budgeting for, an efifective maintenance and
repair program including ordinary maintenance and repair, and a
capital needs assessment prepared every 5 years, except that for
newly constructed projects, this requirement shall apply beginning with
21-DRMHP-21008-NTPX
Page 4 of 30
year 10;
• Rent collection policies and procedures;
• Policies and Procedures for managing funds that meet generally
accepted accounting principles;
� A program for maintaining adequate accounting records and handling
necessary forms and vouchers;
• Plan for safeguarding all tenant personally identifiable information (PII)
such as social security numbers, names and birthdates, against
possible identity theft as applicable.
• Plans for enhancing tenant-management relations;
• The property management contract if any;
• Provisions for periodic update of the Management Plan;
• Appeal and grievance procedures;
• Policies and procedures for collections for tenant-caused damages,
pracessing evictions and terminations; and
• A supportive services plan for Approved Projects serving Special
Needs Populations, including Supportive Housing and/or providing
supportive services to the general tenant population.
E. Annually, during the term of the MSA, Subrecipient shall perform monitoring
of Developer and Approved Project to ensure compliance with federal and
state requirements, timely praject completion and the terms of the DR-MHP
Regulatory Agreement. Developer shall be required to resolve any
monitoring findings to the Subrecipient's satisfaction by the deadlines set
by the Subrecipient.
Developer shall retain all books, records, accounts, documentation, and all
other materials relevant to this RIDER and the initial development phase of
this Approved Project for a minimum period of five (5) years after the
Department notifies the Subrecipient that the grant agreement between
HUD and the State of California has been closed. Subsequent to closeout
of the grant agreement between HUD and the State of California, all records
and books relevant to this RIDER and the operational phase of this
Approved Project shall be retained for the most recent five (5) year period,
until five years after the affordability period terminates. All records must be
maintained in such a manner as to ensure that the records are�reasonably
protected from destruction or tampering. All records shall be subject to
21-DRMHP-21008-NTPX
Page 5 of 30
inspection and audit by the Subrecipient, the Department, HUD, federal
Office of the Inspector General or their respective representatives.
Subrecipient may charge Developer a reasonable annual fee for
compliance monitoring during the term of affordability period. The fee must
be based upon the average actual cost of perForming the monitoring of
CDBG-DR-assisted Approved Projects. The basis for determining the
amount of the fee must be documented and the fee must be included in the
costs of the project as part of the project underwriting.
Should Developer fail to perForm its duties as described above, including a
failure constituting a material default pursuant to the Development
Agreement, such that the Approved Project's ability to meet its stated goals
under the Program is materially impaired or wholly prevented, or that
materially impacts the delivery of an eligible and compliant project on a
timely basis pursuant to the NTP, such failure shall constitute a default
under this RIDER.
Subrecipient shall be responsible for curing such default, by way of
corrective action or hiring a new Developer. The Developer shall not be
removed or substituted with a new developer entity without the prior written
consent of both the Department and Subrecipient, and the Development
Agreement shall contain a provision to this effect. No Developer may be
listed on any state or federal debarment list and must be in good standing
with the Department and the State of California. Any proposed cure of such
default must be provided to the Department in writing for approval prior to
implementation. If such default is not cured timely, Subrecipient will be
responsible for repayment to the Department of the funding for the
Approved Project.
6. Suspension and Debarment
By executing this RIDER, Developer verifies and affirms that it has not been
suspended or debarred from participating in or receiving federal government
contracts, subcontracts, loans, grants or other assistance programs. Developer
further agrees to verify that its partners, contractors, and subcontractors have not
been suspended or debarred from participating or receiving federal government
contracts, subcontracts, loans, grants, or other assistance programs. Subrecipient
and the Department each reserve the right ta request documented confirmation
that Developer and its partners, contractors and subcontractors have not been
suspended or debarred from receiving federal government contracts,
subcontracts, loans, grants or other assistance programs, and are in good standing
with the Department and the State of California.
7. Compliance with State and Federal Laws and Requlations
21-DRMHP-21008-NTPX
Page 6 of 30
Subrecipient and Developer shail comply with all local, state, and federal laws,
statutes, and regulations, as well as the CDBG-DR Grant Administration Manual
for 2017 and 2018 Disasters and the DR-MHP Policies and Procedures Manual,
as the same may be amended from time to time.
8. Authoritv to Impose Additional Special Conditions
In accordance with 2 CFR 200.2Q8, Department reserves the right and authority to
impose additional special conditions within any NTP or NTP revision issued under
the MSA under any of the following circumstances:
A. When, in the Department's sole discretion, Department finds that
Subrecipient or Developer has a history of failure to comply with the general
or specific terms and conditions applicable to the CDBG-DR funds allocated
under the MSA, this RIDER, or to other awards of Federally-funded grant or
loan assistance passed through the Department.
B. When Subrecipient or Developer fails to meet expected performance goals
under this RIDER.
C. When Subrecipient or Developer poses an increased risk for
noncampliance based on factors including, but not limited to, financial
stability, quality of management systems, history of performance under
Federal awards, history of timeliness under Federal awards, history of
conformance with terms and conditions of previous federal awards, and
reports and findings from audits.
D. When, in the Department's sole discretion, such conditions are necessary
to ensure timely and compliant performance under the Federal award.
Such specific special conditions may include withholding of reimbursement of
project costs until receipt of evidence of acceptable performance within a given
period of perFormance, requiring additional detailed financial reports, requiring
additional project monitoring, requiring the Subrecipient or Developer to obtain
technical or management assistance, establishing additional prior approvals, or
any other condition the Department deems reasonable and necessary to
safeguard Federal funds.
Such additional specific special conditions shall be included in the NTP or NTP
revision for the Approved Project and shall include the nature of the additional
requirements, the reason why the additional requirements are being imposed, the
nature of the action needed to remove the additional requirement (if applicable),
the time allowed for completion of the actions (if applicable), and the method for
requesting reconsideration of the additional requirements imposed.
9. The Training, Employment, and Contractinq Opportunities for Business
and Lower-Income Persons Assurance of Compliance (Section 3)•
21-DRMHP-21008-NTPX
Page 7 of 30
Developers and Developer's Contractors shall comply with Section 3 of the
Housing and Urban Development Act of 1968 (12 U.S.C. 1701 u) ("Section 3")
and implementing regulation at 24 CFR, Part 75. The responsibilities outlined in
24 CFR Part 75.19 include:
A. Implementing procedures designed to notify Section 3 workers about
training and employment opportunities generated by Section 3 cavered
assistance and Section 3 business concerns about contracting
opportunities generated by Section 3 covered assistance.
B. Notifying potential Contractors for Section 3 covered projects of the
requirements of Part 75, Subpart C and incorporating the Section 3
Clause set forth below in all solicitations and contracts in excess of
$100,00 as required at 24 CFR 75.27.
Section 3 Clause
The work to be performed under this contract is subject to the
requirements of Section 2 of the Housing and Urban Development Act of
1968, as amended, 12 U.S.C. 1701 u (Section 3). The purpose of Section
3 is to ensure that employment and other economic opportunities
generated by HUD assistance or HUD-assisted projects covered by
Section 3, shall to the greatest extent feasible, be directed to low- and
very low-income persons, particularly persons who are recipients of HUD
assistance for housing.
The parties to this contract agree to comply with HUD's regulations in 24
CFR Part 75,.which implement Section 3. As evidenced by their executian
of this contract, the parties to this contract certify that they are under no
contractual or other impediment that would prevent them from complying
with the Part 75 regulations.
The contractor agrees to send to each labor organization or representative
of workers with which the contractor has a collective bargaining
agreement or other understanding, if any, a notice advising the labor
organizatian or workers' representative of the contractor's commitments
under this Section 3 clause, and will post copies of the notice in
conspicuous places at the work site where both employees and applicants
for training and employment positions can see the notice. The notice shall
describe the Section 3 preference, shall set forth minimum number and
job titles subject to hire, availability of apprenticeship and training
positions, the qualifications for each; the name and location of the
person(s) taking applications for each of the positions; and the anticipated
date the work shall begin.
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The contractor agrees to include this Section 3 clause in every
subcontract subject to compliance with regulations in 24 CFR Part 75 and
agrees to take appropriate action, as provided in an applicable provision of
the subcontract or in this Section 3 clause, upon a finding that the
subcontractor is in violation of the regulations in 24 CFR Part 75. The
contractor will not subcontract with any subcontractor where the contractor
has notice or knowledge that the subcontractor has been found in violation
of the regulations in 24 CFR Part 75.
The contractor acknowledges that subrecipients, contractors, and
subcontractors are required to meet the employment, training, and
contraction requirements of 24 CFR 75.19, regardless of whether Section
3 language is included in recipient or subrecipient agreements, program
regulatory agreements, or contracts.
The contractor will certify that any vacant employment positions, including
training positions, that are filled (1) after the contractor is selected but
before the contract is executed, and (2) with persons other than those to
whom the regulations of 24 CFR Part 75 require employment opportunities
to be directed, were not filled to circumvent the contractor's obligations
under 24 CFR Part 75.
Noncompliance with HUD's regulations in 24 CFR Part 75 may result in
sanctions, termination of this contract for default, and debarment or
suspension from future HUD assisted contracts.
The contractor agrees to submit, and shall require its subcontractors to
submit to them, annual reports detailing the total number of labor hours
worked on the Section 3 Project, the total number of labor hours worked
by Section 3 Workers, and the total number of hours worked by Targeted
Section 3 Workers, and any affirmative efforts made during the quarter to
direct hiring efforts to low- and very low-income persons, particularly
persons who are Section 3 workers and Targeted Section 3 workers.
C. Facilitating the training and employment of Section 3 workers and the
award of contracts to Section 3 business concerns by undertaking
activities such as described in Section 75.25(b), as appropriate, to reach
the goals set forth in Section 75.23 and in Federal Register Vol. 85, Na.
189, page 60909, until superseded by HUD in a subsequent publication.
As of October 29, 2020, the minimum Section 3 benchmark is twenty-five
(25) percent or more of the total number of labor hours worked by all
workers on a Section 3 project are Section 3 workers; and five (5) percent
or more of the total number of labor hours worked by all workers on a
Section 3 project are Targeted Section 3 workers.
D. Documenting actions taken to comply with the foregoing requirements, the
results of those actions taken and impediments, if any.
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10. Assurance of Compiiance with the "Violence Aqainst Women
Reauthorization Act of 2013" (VAWA) (S.47 - 113th Conqress (2013-2014)) (as
amended or reauthorized) Title VI - Safe Homes for Victims of Domestic
Violence, Datinq Violence, Sexual Assault, and Stalkinq — Sec 601-603 See
also 81 CFR 80724:
VAWA provides housing protections for survivors of domestic and dating violence,
sexual assault, and stalking when it comes to finding and keeping a home, they
can feel safe in.
VAWA applies for all victims of domestic violence, dating violence, sexual assault,
and stalking, regardless of sex, gender identity, or sexual orientation, and which
must be applied consistently with all nondiscrimination and fair housing
requirements. VAWA now expands housing protections to HUD programs beyond
HUD's public housing program and HUD's tenant-based and project-based
Section 8 programs. VAWA now provides enhanced protections and options for
victims of domestic violence, dating violence, sexual assault, and stalking.
During the performance of this Approved Project, Developer shall assure that all
requirements of VAWA are complied with (including but not limited to):
A. Domestic Violence survivors are not denied assistance as an applicant, or
evicted or have assistance terminated as a tenant, because the applicant
or tenant is or has been a victim of domestic violence, dating violence,
sexual assault, and stalking.
B. It will implement an `emergency transfer plan', which allows for domestic
violence survivors to move to another safe and available unit if they fear for
their life and safety.
C. It will provide "Protections against denials, terminations, and evictions that
directly result from being a victim of domestic violence, dating violence,
sexual assault, or stalking, if the applicant or tenant otherwise qualifies for
admission, assistance, participation, or occupancy."
D. It will implement a `Low-barrier certification process' where a domestic
violence survivor need only to self-certify in order to document the domestic
violence, dating violence, sexual assault, or stalking, ensuring third party
documentatian does not cause a barrier in a survivor�xpressing their rights
and receiving the protections needed to keep themselves safe.
11. Procurement of Recovered Materials
In accordance with Section 6002 of the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act, the Developer shall cause
contractor to procure items designated in guidelines of the Environmental
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Protection Agency (EPA) at 40 CFR Part 247 that contain the highest percentage
of recovered materials practicable, consistent with maintaining a satisfactory level
of competition. The Developer shall cause contractors to procure items designated
in the EPA guidelines that contain the highest percentage of recovered materials
practicable unless the contractor determines that such items: (1) are not
reasonably available in a reasonable period of time; (2) fail to meet reasonable
performance standards, which shall be determined on the basis of the guidelines
of the National Institute of Standards and Technology, if applicable to the item; or
(3) are only available at an unreasonable price.
This clause shall apply to iterns purchased under this RIDER where: (1) the
contractor purchases in excess of $10,OOQ of the item under this contract; or (2)
during the preceding Federal fiscal year, the contractor: (i) purchased any amount
of the items for use under a contract that was funded with Federal appropriations
and was with a Federal agency or a State agency or agency of a political
subdivision of a State; and (ii) purchased a total of in excess of$10,000 of the item
both under and outside that contract.
12. Construction Standards
The Subrecipient and Developer shall ensure that all Rpproved Projects comply
with the following requirements:
A. California Buildinq Codes (CBC) (Cal Code Reqs Title 24)
All residential construction projects shall comply with the housing
construction codes of the State of California, including all units developed
under DR-MHP.
B. The Architectural Barriers Act of 1968 (42 U S C �§ 4151-4157)
The Architectural Barriers Act (ABA) stands as the first measure by
Congress to ensure access to the built environment for people with
disabilities. The law requires that buildings or facilities that were designed,
built, or altered with federal dollars or leased by federal agencies after
August 12, 1968 be accessible.
C. California Green Buildinqs Standards Code (CALGreen) (Title 24 Part 11
of the California Code of Requlations)
All new canstruction of residential buildings or reconstruction of
substantially damaged buildings must incorporate California Green
Buildings Standards Code (CALGreen).
D. Sustainabilitv Requirements
All rehabilitation, reconstruction, and new construction must be designed to
incorporate principles of sustainability, including water and energy
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efficiency, resilience, and mitigating the impact of future disasters.
Wherever feasible, the Subrecipient, Subrecipient's Developers and
contractors must follow best practices, such as thase provided by the U.S.
Department of Energy, Home Energy Professionals: Professional
Certifications and Standard work specifications.
E. National Floodplain Elevation Standards
Subrecipient, Developer, and contractors must comply with the national
floodplain elevation standards for new construction, repair of substantially
damaged structures, or substantial impravements to residential structures
in flood hazard areas. All structures designed for residential use within a
100-year(or one percent annual chance)floodplain will be elevated with the
lowest floor at least two feet above the base flood elevation level and
comply with the requirements of 83 FR 5850 and 83 FR 5861.
F. Wildland-Urban InterFace buildinq codes M/UI codes)
All Approved Projects under this program that are located in a CAL FIRE
high fire zone must comply with applicable WUI codes, found in Title 24,
Chapter 7a of the California Building Code, which offer specific material,
design and construction standards to maximize ignition- resistance.
Federal Labor Standards Provisions
The Subrecipient and the Developer shall at all times comply, and cause all
Approved Project contractors to comply, with applicable federal labor standards,
including without limitation, the following:
A. Davis-Bacon Act (40 U.S.C. �� 3141-3148) requires that workers receive
no less than the prevailing wages being paid for similar work in their locality.
Prevailing wages are computed by the Federal Department of Labor and
are issued in the form of federal wage decisions for each classification of
work. The law applies to most construction, alteration, or repair contracts
over $2,000.
B. "Anti-Kickback Act of 1986" (41 U.S.C. $� 51-58)• The act prohibits
attempted as well as completed "kickbacks," which include any money,
fees, commission, credit, gift, gratuity, thing of value, or compensation of
any kind. The act also provides that the inclusion of kickback amounts in
contract prices is prohibited conduct in itself. This act requires that the
purpose of the kickback was for improperly abtaining or rewarding favorable
treatment. It is intended to embrace the full range of government
contracting.
C. Contract Work Hours and Safetv Standards Act - CWHSSA (40 U S C §
3702) requires that workers receive "overtime" compensation at a rate of
one and one-half (1-1/2) times their regular hourly wage after they have
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worked forty (40) hours in one week.
D. Title 29, Code of Federal Requlations CFR Subtitle A Parts 1 3 and 5 are
the regulations and procedures issued by the Secretary of Labor for the
administration and enforcement of the Davis-Bacon Act, as amended.
Developer shall provide and Subrecipient shall maintain documentation that
demonstrates compliance with hour and wage requirements of this part. Such
documentation shall be made available to the Department for review upon request.
Subrecipient shall be responsible for monitoring Developer, contractors, and
subcontractors for compliance, as applicable.
13. State Prevailinq Waqes
A. Developer shall comply and Subrecipient shall ensure that the requirements
of California Labor Code (LAB), Chapter 1, commencing with Section 1720,
Part 7 [LAB Section 1720-1743) pertaining to the payment af prevailing
wages and administered by the California Department of Industrial
Relations are met. Projects may be exempt from these requirements under
State Prevailing Wage rules.
B. For the purposes of this requirement"construction work" includes, but is not
limited to rehabilitation, alteration, demolition, installation, or repair done
under contract and paid for, in whole or in part, through this Agreement. All
construction work shall be done through the use of a written contract with a
properly licensed building contractor incorporating these requirements (the
"Construction Contract"). Where the Construction Contract will be between
the Subrecipient and a licensed building contractor, the Subrecipient shall
serve as the "awarding body" as that term is defined in the LAB. Where the
Subrecipient will provide funds to a third party that will enter into the
Construction Contract with a licensed building contractor, the third party
shall serve as the "awarding body."
C. The applicable wage rate determination on construction work will be the
more restrictive of the rate prescribed in LAB Section 1770-1784 or the
Davis-Bacon Wage Determination.
14. Aqreements with Developers and Contractors
A. The Subrecipient shall not enter into any agreement, written or oral, with
any contractor, Developer or other party without the prior determination that
the contractor, Developer or other party is eligible to receive federal funds
and is not listed on the Federal Consolidated List af Debarred, Suspended,
and Ineligible contractors.
1) The terms "other party" is defined as public or private non-profit
agencies or organizations and certain (limited) private for-profit
entities who receive Grant Funds from a Subrecipient to undertake
Approved Projects.
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B. An agreement between the Subrecipient and any contractor, Developer or
other party shall require:
1) Compliance with all State and federal requirements described in this
RIDER including without limitation those that pertain to labor
standards, nondiscrimination, Americans with Disabilities Act, Equal
Employment Opportunity and Drug-Free Workplace, and prevailing
wages. In addition to these requirements, all contractors and
subcontractors shall comply with the applicable provisions of the
California Labor Code.
2) Maintenance of at least the minimum State-required Workers'
Compensation Insurance for those employees who will perform the
Approved Project activities.
3) Maintenance, as required by law, of unemployment insurance,
disability insurance and liability insurance, which is reasonable to
compensate any person, firm, or corporation, who may be injured or
damaged by the contractor, or any subcontractor in performing the
Approved Project activities.
4) Compliance with the applicable Equal Opportunity Requirements
described in Section 17 of this Rider.
C. Developer, contractors, and subcontractors shall:
1) Perform the Approved Project activities in accordance with federal,
state and local housing and building codes, as are applicable.
2) Provide security to assure completion of the Approved Project(s) by
furnishing the Subrecipient with proof of sufficient insurance and
perFormance and payment bonds, or other security approved in
advance in writing by the Department, as determined by the
particulars of each individual project will be required.
D. Developer, contractors and subcontractors: Drug-Free Workplace Act of
1988
1) Publish and give a policv statement to all covered employees
informing them that the unlawful manufacture, distribution,
dispensation, possession or use of a controlled substance is
prohibited in the covered workplace and specifying the actions that
will be taken against employees who violate the policy.
2) Establish a drug-free awareness program to make employees aware
of a) the dangers of drug abuse in the workplace; b) the policy of
maintaining a drug-free workplace; c) any available drug counseling,
rehabilitation, and employee assistance programs; and d) the
penalties that may be imposed upon employees for drug abuse
violations.
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3) Notifv employees that as a condition of employment on a federal
contract or grant, the employee must a) abide by the terms of the
policy statement; and b) notify the employer, within (5) five calendar
days, if he or she is convicted of a criminal drug violation in the
workplace.
4) Notifv the contractina or qranting a ency within 10 (ten) days after
receiving notice that a covered employee has been convicted of a
criminal drug violation in the workplace.
5) Impose a penaltV on or require satisfactory participation in a drug
abuse assistance or rehabilitation program by any employee who is
canvicted of a reportable workplace drug conviction.
6) Make an ongoing, good faith effort to maintain a druq-free workplace
by meeting the requirements of the act.
15. Special Conditions Pertaininq to Hazards, Safetv Standards and Accident
Prevention
A. Use of Explosives: When the use of explosives is necessary for the
prosecution of the work, Developer shall ensure the contractor observes all
local, state and federal laws in purchasing and handling explosives.
Developer shall ensure contractors take all necessary precautions to
protect completed work, neighboring property, water lines, or other
underground structures. Where there is danger to structures or property
from blasting, the charges shall be reduced, and the material shall be
covered with suitable timber, steel or rope mats.
The Developer shall notify or cause contractors ta notify all owners of public
utility property of intention to use explosives at least 8 haurs before blasting
is done close ta such property. Any supervisian or direction of use of
explosives by the engineer does not in any way reduce the responsibility of
the Developer or contractors or their Surety for damages that may be
caused by such use.
B. Danqer Siqnals and Safety Devices: Developer shall cause contractors to
make all necessary precautions to guard against damages to property and
injury to persons. Contractors shall put up and maintain in good condition,
sufficient red or warning lights at night, suitable barricades and other
devices necessary to protect the public. In case contractors fail or neglect
to take such precautions, the Developer may have such lights and
barricades installed and charge the cost of this work to the contractor. Such
action by the Developer does not relieve the contractor af any liability
incurred under these specifications or contract.
C. Protection of Lives and Health: The Developer shall exercise proper
precautions and cause contractors to exercise proper precautions at all
times for the protection of persons and property and shall be responsible
for all damages to persons or property, either an or off the worksite, which
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occur as a result of prosecution of the work. The safety provisions of
applicable laws and building and construction codes, in addition to specific
safety and health regulations described by Chapter XIII, Bureau of Labor
Standards, Department of Labor, Part 1518, Safety and Health Regulations
for Construction, as outlined in the Federal Register, Volume 36, No. 75,
Saturday, April 17, 1971, Title 29 - LABOR, shall be observed and the
Developer and its contractors and their subcontractors shall take or cause
to be taken, such additional safety and health measures as the Developer
may determine to be reasonably necessary.
16. Equal Opportunitv Requirements and Responsibilities
The obligations undertaken by Subrecipient and Developer include, but are not
limited to, the obligation to comply with all federal laws and regulations described
in Subpart K of 24 CFR Part 570 and specifically with each of the following, among
other things, as the same may be amended from time to time:
A. Title VI of the Civil Riqhts Act of 1964: This act provides that no person
shall be excluded from participation, denied program benefits, or subject to
discrimination based on race, color, and/or national origin under any
program or activity receiving federal financial assistance.
B. Title VII of the Civil Riqhts Act of 196$ (The Fair Housinq Act}: This act
prohibits discrimination in housing on the basis of race, color, religion, sex
and/or national origin. This law also requires actions which affirmatively
promote fair housing.
C. Restoration Act of 1987: This act restores the broad scope of coverage
and clarifies the application of the Civil Rights Act of 1964. It also specifies
that an institution which receives federal financial assistance is prohibited
from discriminating on the basis of race, color, national origin, religion, sex,
disability or age in a program or activity which does not directly benefit from
such assistance.
D. Section 109 of Title 1 of the Housinq and Communitv Development Act
of 1974 f42 U.S.C. 53091: This section of Title 1 provides that no person
shall be excluded from participation (including employment), denied
program benefits, or subject to discrimination on the basis of race, color,
national origin, or sex under any program or activity funded in whole or in
part under Title 1 of the Act.
E. The Fair Housinq Amendment Act of 1988: This act amended the
original Fair Housing Act to provide for the protection of families with
children and people with disabilities, strengthen punishment for acts of
housing discrimination, expand the Justice Department jurisdiction to bring
suit on behalf of victims in federal district courts, and create an exemption
to the provisions barring discrimination on the basis of familial status for
those housing developments that qualify as housing for persons age 55 or
older.
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F. The Aqe Discrimination Act of 1975: This act provides that no person
shall be excluded from participation, denied program benefits, or subject to
discrimination on the basis of age under any program or activity receiving
federal funding assistance. Effective January 1987, the age cap of 70 was
deleted from the laws. Federal law preempts any State law currently in
effect on the same topic.
G. Section 504 of the Rehabilitation Act of 1973: It is unlawful to
discriminate based on disability in federally assisted programs. This
Section provides that no atherwise qualified individual shall, solely by
reason of his or her disability, be excluded from participation (including
employment), denied program benefits, or subjected to discrimination under
any program or activity receiving federal funding assistance. Section 504
also contains design and construction accessibility provisions for
multi-family dwellings developed or substantially rehabilitated for first
occupancy on or after March 13, 1991.
H. The Americans with Disabilities Act of 1990 (ADA): This act modifies
and expands the Rehabilitation Act of 1973 to prohibit discrimination against
"a qualified individual with a disability" in employment and public
accommodations. The ADA requires that an individual with a physical or
mental impairment who is otherwise qualified to perForm the essential
functions of a job, with or without reasonable accommodation, be afforded
equal employment opportunity in all phases of employment.
I. Executive Order 11063: This executive order provides that no person shall
be discriminated against on the basis of race, color, religion, sex, or national
origin in housing and related facilities provided with federal assistance and
lending practices with respect to residential property when such practices
are connected with loans insured or guaranteed by the federal government.
J. Executive Order 12259: This executive order pravides that the
administration of all federal programs and activities relating to housing and
urban development be carried out in a manner to further housing
oppartunities throughout the United States.
K. The Equal Emplovment Opportunitv Act: This act empowers the Equal
Employment Opportunity Commission (EEOC)to bring civil action in federal
court against private sector employers after the EEOC has investigated the
charge, found "probable cause" of discrimination, and failed to obtain a
conciliation agreement acceptable to the EEOC. It also brings federal,
state, and local governrnents under the Civil Rights Act of 1964.
L. The Uniform Guidelines on Emplovee Selection Procedures adopted
by the Equal Employment Opportunitv Commission in 1978: This
manual applies to employee selection procedures in the areas of hiring,
retention, promotion, transfer, demotion, dismissal and referral. It is
designed to assist employers, labor organizations, employment agencies,
licensing and certification boards in complying with the requirements of
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federal laws prohibiting discriminatory employment.
M. The Vietnam Era Veterans' Readiustment Act of 1974 (revised Jobs for
Veterans Act of 20Q2): This act was passed to ensure equal employment
opportunity for qualified disabled veterans and veterans of the Vietnam War.
AfFirmative action is required in the hiring and promotion of veterans.
N. Executive Order 11246: This executive order applies to all federally
assisted construction contracts and subcontracts. It provides that no person
shall be discriminated against on the basis of race.
17. Affirmativelv Furtherinq Fair Housinq
The Subrecipient and Developer shall affirmatively further fair housing, in
accordance with the Civil Rights Act of 1964 (42 U.S.0 2000a, et seq.), and the
Fair Housing Act (42 U.S.C. 3601, et seq.), according to 42 U.S.C. 5306, et seq.
and in compliance with California Gov. Code sections 65583, et seq. and 8899.5,
et seq.), as each may be amended from time to time. Subrecipient shall also
comply with the Fair Housing Amendment Act of 1988 (Public �aw 100-430), as
may be amended from time to time.
18. Reportinq Requirements
A. Developer shall provide information and data for required reports as
requested by Subrecipient. Subrecipient must timely submit the reports
prescribed below. The Department reserves the right to request additional
detail and suppart for any report made and request additional reports
outside of what is prescribed below. Reports must be made according to
the dates identified, in the formats provided by the Department, and via the
Department's Grants Network unless otherwise specified at the discretion
of the Department. The Subrecipient's performance under the MSA will be
assessed based in part on whether it has submitted the reports on a timely
basis.
1) Monthlv Activity Report: Developer shall provide Subrecipient with
information sufficient for Subrecipient to submit a Monthly Activity
Report to Department that addresses the following, at a minimum:
(1) a description of the current status of the Approved Project,
including number of units leased, and Households assisted; (2) a
description of activities ta be undertaken in the next reporting period;
(3) a description of problems or delays encountered with the
Approved Praject and course of action taken to address them; (4) a
description af actions taken to achieve MSA expenditure deadlines;
and (5} a summary af the MSA fiscal status, including allocation
amount, funds drawn, and remaining balance. Unless otherwise
waived in writing by the Department, Monthly Activity Reports must
begin on the 10t" calendar day of the second month following
execution of the MSA and must continue through the receipt and
approval by the Department of the Project Completion Report,
detailed below.
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2) Monthlv Proqram Income Report: Program Income, if identified as a
funding source for any Approved Project, must be included in the
project budget and must be substantially expended prior to drawing
Grant Funds. During the term of this RIDER, if Program Income is
generated, the Subrecipient must submit a Monthly Program Income
Report certifying the amount of Program Income generated, retained
and expended. Program Income remaining at the end of each quarter
and at the expiration of the MSA in excess of $35,000.00 must be
remitted to the Department.
3) Semi-Annual Labor Standards Report� During the term of
construction for each Approved Project, each April 1St and October
1 St, the Subrecipient must submit the Labor Standards Cover Memo,
the HUD Form 4710 and the Davis Bacon Labor Standards Report
5.7 (if applicable). These forms are located on the Department's
website and are alsa available upon request.
4) Proiect Completion Report: At the completion of construction and
once an Approved Project is placed in service, the Subrecipient must
submit a Project Completion Report that includes the total number of
units built and leased, affordable units built and leased, DR-MHP
units built and leased, an accomplishment narrative, and the tenants'
names, demographics and income for each DR-MHP unit.
5) Annual Beneficiary Report: Once an Approved Project is placed in
service and through the Affordability Period described in Exhibit D,
Section 4 of the MSA, the Subrecipient must submit an Annual
Beneficiary Report providing the tenants names, demographics, and
income for each DR-MHP unit. Information shall be derived from
documentation submitted by Developer to Subrecipient for review
and approval.
19. Monitoring Requirements
During the term of the MSA, the Department shall perForm program and/or fiscal
monitoring of the Subrecipient and Approved Projects to ensure campliance with
federal and state requirements and timely project completion. The Subrecipient
shall be required to resolve any monitoring findings to the Department's
satisfaction by the deadlines set by the Department. In the event Subrecipient
disagrees with a finding and/or any accompanying corrective actions or sanction(s)
that are associated with such finding, Subrecipient shall follow the Department's
appeals process and rights contained as an exhibit within the Department's CDBG-
DR Monitoring Plan located on the Department's CDBG-DR website at
https://hcd.ca.qov/communitv-developmentldisaster-recoverv-programslcdbq-
dr/qrant-manaaement-resources/index shtml
Subrecipient shall ensure their Developers and Approved Projects are in
compliance with CDBG-DR requirements and shall perform regular, ongoing
monitoring of the Developer and Approved Project for the term of this RIDER and
the affordability period defined in the DR-MHP Regulatory Agreement.
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Subrecipient shall ensure their Developers resolve any monitoring findings to the
Subrecipient's satisfaction by the deadlines set by the Subrecipient. Subrecipients
may charge Developers a reasonable annual fee for compliance monitoring during
the term of affordability period. The fee must be based upon the average actual
cost of performing the manitoring of CDBG-DR-assisted Approved Projects. The
basis for determining the amount of the fee must be documented and the fee must
be included in the costs of the project as part of the project. If a monitoring fee is
charged, Subrecipient shall remit 10% of the manitoring fee collected from each
Appraved Project to the Department not less than annually and within 90 days of
receipt of the fees.
20. Inspections of Proiect Activities
The Department reserves the right to inspect any Approved Project activities
performed hereunder to verify that the Approved Project activities are being and/or
have been perFormed in accordance with the applicable federal, state and/or local
requirements and this RIDER.
A. The Subrecipient shall inspect any Approved Project activity perFormed by
Developers, contractors and subcontractors hereunder to ensure that the
Approved Project activities are being and have been performed in
accordance with the applicable federal, State and/or local requirements and
the MSA.
B. The Subrecipient shall require that all Approved Project activities found by
such inspections that do not conform to the applicable requirements be
promptly corrected, and shall withhold payment to its Developer, contractor
or subcontractor, respectively, until it is so corrected.
C. Access by the Subrecipient, the federal grantor agency, the State, the
Comptroller General of the United States, or any of their duly autharized
representatives to any books, documents, papers, and records of the
Subrecipient, Developer, contractors or subcontractors which are directly
pertinent to that specific contract for the purpose of monitoring, making
audit, examination, excerpts, and transcriptions pursuant to 2 CFR 200.336
shall be permitted. Developer shall include in its agreements with
contractars, or subcontractors, as applicable, provisions requiring such
parties to provide access to its records for the purposes specified above.
21. Si ns
If the Subrecipient or Developer places signs stating that the Approved Project is
funded with private or public dollars and the Department is also providing financing,
it shall indicate in a typeface and size commensurate with the Department's
funding portion of the Approved Project that the Department is a source of
financing through the CDBG-DR Program.
22. Insurance
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Subrecipient, its Developers and Contractors shall comply with all requirements
outlined in the (A) General Provisions section and (B) Project Insurance
Requirements outlined in this Section 21. These requirements are in addition to,
and not in lieu of, any other insurance coverages required elsewhere in the
Development Agreement and elsewhere in the MSA. No payments will be made
under the terms of any Approved Project until the Subrecipient confirms to the
Department that Developer and all contractors on the specified Approved Project
fully comply with all requirements. The Department reserves the right to waive or
adjust required insurance coverages from time to time in its sole discretion.
A. General Provisions A�plyinq to All Policies
1) Coveraae Term — Subrecipient's coverage needs to be in force for
the complete term of the Agreement. The Developer's coverage
needs to be in force for the complete affordability period of each
Approved Praject. The Developer's coverage needs to be in force
until a certificate of occupancy is issued for each Approved Project.
No work may be perFormed by Subrecipient, Developer, or a
contractor until and unless all insurances required by this Agreement
are in full force and effect. If insurance expires during the term of the
Agreement/affordability period/certificate of occupancy issuance, as
applicable, a new certificate must be received by the Department at
least thirty (30) days prior to the expiration of said insurance. Any
new insurance must comply with the original terms of this
Agreement.
2) Policv Cancellation or Termination & Notice of Non-Renewal —
Subrecipient is responsible to notify the Department within fifteen
(15) business days prior to any actual or proposed cancellation, non-
renewal or material change that affects required insurance
coverage. No policy may be cancelled upon less than thirty (30)
days' prior written notice from the insurer to the insured and the
Department. New certificates of insurance are subject to the
approval of the Department and the Subrecipient agrees no services
will be commenced or perFormed prior to obtaining such approval. In
the event Subrecipient and Developer fails to keep in effect at all
times the specified insurance coverage, the Department may, in
addition to any other remedies it may have, terminate this Agreement
and/or Approved Project upon the occurrence of such event, subject
to the provisions of this Agreement.
3) Premiums, Rssessments and Deductibles—Subrecipient, Developer
and contractors for each Approved Project are responsible for the
payment of all premiums, policy assessments, deductibles or self-
insured retentions associated with their respective insurance
programs.
21-DRMHP-21008-NTPX
Page 21 of 30
4) Primarv Clause — Any required insurance contained in this
Agreement shall be primary, and not excess or contributory, to any
other insurance carried by the Department.
5) Insurance Carrier Required Ratinq —All insurance companies must
carry an AM Best rating of at least "A—" with a financial category
rating of no lower than VII. If the Subrecipient, Developer and/or
contractor is self-insured for a portion or all of its insurance, review
of financial information including a letter of credit may be required.
Acceptance of self-insurance is within the sole discretion of the
Department, and the Department reserves the right to require
insurance from third-party commercial insurers.
6) Endorsements — Any required endorsements requested by the
Departrnent must be physically attached to all requested certificates
of insurance and not substituted by referring to such coverage on the
certificate of insurance.
7) Inadequate Insurance — Inadequate or lack of insurance does not
negate the Subrecipient's, Developer's, or contractor's obligations
under this Agreement or the terms specific to the relevant Approved
Project, nor does the availability or limits of any insurance policies
required herein in any way limit the liability of Subrecipient, or any
Developer or contractor, to the Department hereunder, nor does it in
any way limit the liability of such parties to the Department in regards
to any indemnification obligations of such parties herein.
S) Available CoverageslLimits —All coverage and limits available to the
Subrecipient, Develaper, or contractor shall also be available and
applicable to the Department.
9) Satisfyin an SIR -All insurance required by this Agreement and any
required by the terms specific to the relevant Approved Project must
allow the Department to pay and/or act as the Subrecipient's,
Developer's, or contractor's agent in satisfying any self-insured
retention (SIR). The choice to pay and/or act as the Subrecipient's,
Developer's, or contractor's agent in satisfying any SIR is at the
Department's discretion.
10) Use of Subcontractors - In the case of Developer or contractor's
utilization of subcontractors to complete the contracted scope of
work for the relevant Approved Project, Developer or contractor shall
include all subcontractors as insureds under Developer's or
contractor's insurance or supply evidence of subcontractor's
insurance to the Department equal to policies, coverages, and limits
required of Developer and contractor.
21-DRMHP-21008-NTPX
Page 22 of 30
B. Proiect Insurance Requirements
Subrecipient, Developer, andlor contractor shall display evidence, as
applicable for the relevant Approved Project, of the following on a certificate
of insurance evidencing the below coverages. No work shall be commenced
on any Approved Project prior to such coverages being in effect and the
required certificate(s) have been provided to the Department.
1) Commercial General Liability — Developer or contractor on an
Approved Project shall maintain commercial general liability
insurance on an occurrence form with limits not less than $1,000,000
per occurrence for bodily injury and property damage liability
combined with a $2,000,000 annual policy aggregate. The policy
shall include coverage for liabilities arising out of premises,
operations, independent contractors, products, completed
operations, personal &advertising injury, and liability assumed under
an insured contract. This insurance shall apply separately to each
insured against whom claim is made or suit is brought subject to the
Developer's or contractor's limit of liability.
The policy must name The State of California, its officers, agents,
and employees as additional insureds.
2) Automobile Liabilitv — Developer or Contractor shall maintain, as
applicable, business automobile liability insurance for limits not less
than $1,000,000 combined single limit. Such insurance shall cover
liability arising out of a motar vehicle including owned, hired and non-
owned motor vehicles. Should the scope of the relevant Approved
Project involve transportation of hazardous materials, evidence of an
MCS-90 endorsement is required.
The policy must name The State of California, its officers, agents,
and employees as additional insured.
3) Workers' Compensation and Emplover's Liabilitv— Developer or
Contractor shall maintain statutory worker's compensation and
employer's liability coverage for all its employees who will be
engaged in the performance of this Agreement and the relevant
Approved Project. In addition, employer's liability limits of
$1,00O,OOQ are required. By signing this Agreement, Subrecipient
acknowledges compliance with these regulations. A Waiver of
Subrogatian or Right to Recover endorsement in favor of the State
of California must be attached to certificate.
4) Flood Insurance — The Subrecipient shall ensure that Developer
complies with the requirements of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4001). Subrecipient shall ensure flood insurance
21-DRMHP-21008-NTPX
Page 23 of 30
coverage is provided by the Developer for the Approved Project if
required by the Flood Disaster Protection Act of 1973 (42 U.S.C.
4001). The Subrecipient shall assure that for activities located in an
area identified by the Federal Emergency Management Agency
(FEMA) as having special flood hazards, that flood insurance under
the National Flood Insurance Program is obtained and maintained as
a condition of financial assistance for acquisition or construction
purposes (including rehabilitation).
5) Builders Risk Insurance — Developer or Developer's contractor on
an Approved Project shall maintain builders risk coverage prior to or
upon commencement of construction of the Approved Project,
including any delivery and storage of materials to be incorporated
into the Approved Project. This coverage must cover all risk of
physical damage or risk of loss for an amount equal to the full amount
of the construction contract. This coverage must include coverage
for flood if the Property is located in a Special Flood Hazard Rrea as
determined by the Federal Emergency Management Agency.
Additionally, Developer or Developer's general contractor must
obtain a builder's risk installation floater for coverage of the
contractor's labor, materials, and equipment to be used for
completion of work performed under the construction contract. The
minimum amount of coverage to be carried must be equal to the full
amount of the construction contract.
6) Propertv Insurance — Developer on an Approved Project shall
maintain including all risk coverage or standard fire and extended
coverage insurance, with vandalism and malicious mischief
endorsements ta the extent of full replacement value of the
Approved Project for the duration of the term of the Affordability
Period. Coverage amount may be adjusted for fluctuation in
replacement values. This coverage is required upon completion of
construction of the Approved Project, or upon closing of the
financing for the Approved Project if it is a rehabilitation project.
23. Condemnation
A. The Developer shall at all times keep the Development insured against loss
by fire and such other hazards, casualties, liabilities and contingencies, and
in such amounts and for such periods as required by the Subrecipient. All
insurance policies and renewals thereof shall be issued by a carrier and in
form acceptable to the Subrecipient.
B. In the event of any fire or other casualty to the Development or eminent
domain proceedings resulting in condemnation of the Development or any
part thereof, Developer shall be obligated to rebuild the Development, and
21-DRMHP-21008-NTPX
Page 24 of 30
to use all available insurance or condemnation proceeds therefore,
provided that, as determined by the Subrecipient in its sole discretion, (i)
such proceeds are sufficient to keep the Assistance in balance and rebuild
the Development in a manner that provides adequate security to the
Subrecipient for repayment of the Assistance or if such proceeds are
insufficient, then Developer shall have funded any deficiency (ii) the
Subrecipient shall have the right to approve plans and specifications for any
majar rebuilding and the right to approve disbursements of insurance or
condemnation proceeds for rebuilding under a construction escrow or
similar arrangement, and (iii) no material breach or default then exists under
the Program Legal Documents. If the casualty or condemnation affects only
part of the Development and total rebuilding is infeasible, then proceeds
may be used for partial rebuilding and partial repayment of the Assistance
in a manner that provides adequate security to the Subrecipient for
repayment of the remaining balance of the Assistance.
C. In the event that the Developer fails to commence or to complete the
rebuilding, repair, replacement or restoration of the Project timely, the
Department and Subrecipient shall have the right, in addition to any
other remedies granted in the Program Legal Documents or at law or in
equity, to repair, restore, rebuild or replace the Project so as to prevent the
occurrence of a default hereunder.
24. Anti-�obbvinq Certification
The Subrecipient shall require that the language of this certification be included in
all contracts or subcontracts entered into in connection with the Approved
Project(s) and shall certify and disclose accordingly. This certification is a material
representation of fact upan which reliance was placed when this transaction was
made or entered into.
Submission of this certification is a prerequisite for making or entering into this
transaction imposed by 31 U.S.C. § 1352. Any person who fails to file the required
certification shall be subject to a civil penalty of not less than $10,000 and no more
than $100,000 for such failure.
A. No federal appropriated funds have been paid or will be paid, by or on behalf
of it, to any person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection with the
awarding of any federal contract, the cooperative agreement, and the
extension, continuation, renewal, amendment, or modification of any federal
contract, grant, loan, or cooperative agreement.
B. If any funds other than federal appropriated funds have been paid or will be
paid to any person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection with this
21-DRMHP-21008-NTPX
Page 25 of 30
federal contract, grant, loan, or cooperative agreement, it will complete and
submit Standard Form LLL, "Disclosure Form to Report Lobbying," in
accordance with its instructions.
25. Conflict of Interest
Pursuant to 24 CFR § 570.489(h), no member, officer, or employee of the
Developer, or its designees or agents, no member of the governing body of the
locality in which the Approved Project is situated, and no other public official of
such locality or localities who exercise or have exercised any functions or
responsibilities with respect to CDBG-DR activities assisted under this part, or who
are in a position to participate in a decision-making process or gain inside
information with regard to such activities, including members and delegates to the
Congress of the United States, may obtain a financial interest or benefit from a
CDBG-DR-assisted activity, or have a financial interest in any contract,
subcontract or agreement with respect to a CDBG-DR-assisted activity or its
proceeds, either for themselves or those with whom they have business or
immediate family ties, during their tenure, or for one (1) year thereafter.
26. Enerqy Policv and Conservation Act
This Agreement is subject to mandatory standards and policies relating to energy
efficiency which are contained in the State Energy Conservation Plan issued in
compliance with the federal Energy Policy and Conservation Act (Pub. L. 94-163,
89 Stat. 871).
27. State Contract Manual Requirements (Section 311, Federallv Funded
Contracts (Rev. 3/03):
A. All contracts, except for State construction projects that are funded in whole
or in part by the Federal government, must contain a 30-day cancellation
clause and the following provisions:
1) It is mutually understood between the parties that this contract may
have been written for the mutual benefit of both parties before
ascertaining the availability af congressional appropriation of funds
to avoid program and fiscal delays that would occur if the contract
were executed after that determination was made.
2) This contract is valid and enforceable only if sufficient funds are
made available to the State by the United States Government for the
purpose of this Program. In addition, this contract is subject to any
additional restrictions, limitations, or conditions enacted by the
Congress or to any statute enacted by the Congress that may affect
the provisions, terms, or funding of this contract in any manner.
3) The parties mutually agree that if the Congress does not appropriate
sufficient funds for the program, this contract shall be amended to
21-DRMHP-21008-NTPX
Page 26 of 30
reflect any reduction in funds.
4) The Department has the option to invalidate the contract under the
30-day cancellation clause or to amend the contract to reflect any
reduction in funds.
B. Exemptions from provisions A.1 through A.4 above may be granted by the
Department of Finance provided that the director of the State agency can
certify in writing that Federal funds are available for the term of the contract.
C. Gov. Code § 8546.4(e) provides that State agencies receiving Federal
funds shall be primarily responsible for arranging for Federally required
financial and compliance audits, and shall immediately notify the Director of
Finance, the State Auditor, and the State Controller when they are required
to obtain Federally required financial and compliance audits.
28. Indemnification
Subrecipient and Developer, at their sole cost and expense, shall jointly and
severally indemnify, defend, and hold harmless the Department, its employees,
representatives, attorneys, agents, and their respective successors, heirs, and
assigns (collectively, the "Department Indemnified Parties") from and against any
and all claims, demands, actions, costs, losses, damages, and liabilities, whether
direct or indirect(collectively, "Damages"), and regardless of their nature or source,
which in any way relate to or arise from the actions or inactions of Subrecipient,
Developer, or its contractors, subcontractors, agents, or representatives
(collectively, the "Developer Parties") in connection with this RIDER and any
agreement or instruments executed in connection herewith. The obligations of the
Developer Parties under this Section 26 shall apply to all actions or omissions of
Developer Parties as described above which cause or are alleged to have caused
Damages in connection with the Project. Further, the obligations of the Developer
Parties under this Section 26 shall survive the expiration or earlier termination of
the Development Agreement or this RIDER.
29. Conflictinq Provisions
Should any of the provisions of this RIDER be found to be in conflict with any other
provision of the Development Agreement to which this RIDER is attached, the
terms of this RIDER shall prevail.
30. Third Partv Beneficiaries
The Developer and Subrecipient expressly agree and acknowledge that the
Department is an intended third-party beneficiary to the provisions of the
Development Agreement and this RIDER. Among other things, the performance
of the Development Agreement and this RIDER benefit the Department by
creating, rehabilitating, or otherwise making available, affordable housing units
within the State of California. The Department is the sole third-party benefici�ry
21-DRMHP-21008-NTPX
Page 27 of 30
and no other parties are intended or should be deemed as such.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
21-DRMHP-21008-NTPX
Page 28 of 30
IN WITNESS WHEREOF, the City and the Developer have executed this Agreement on the
respective dates set forth below:
City of Redding, a municipal corporation
Date:
By: Michael Dacquisto, Mayor
ATTEST: APPROVED AS TO FORM:
By: Pamela Mize, City Cierk By: Barry E. DeWalt, City Attorney
PARTNERSHIP/BORROWER/OWNER:
PIPER WAY SENIOR HOUSING LP,
a California limited partnership
By: PWS Housing, LLC,
a California limited liability company,
its General Partner
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
PARTNERSHIP'S GENERA� PARTNER:
PWS HOUSING, LLC,
a California limited liability company
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
21-DRMHP-21008-NTPX
Page 29 of 30
21-DRMHP-21008-NTPX
Page 30 of 30
EXHIBIT 4 RESERVED
EXHIBIT 5
SCOPE OF DEVELOPMENT
I. GENERAL
The location of the Project is the Property or Project Site further described and specifically delineated on
the Legal Description associated with this Development Agreement("Agreement"). The Developer agrees
that all work completed on tl�e Property and/or Project Site will be in accordance with the provisions of this
Agreement and the plans, drawings, Exhibits and related documents approved by the City and Developer
pursuant hereto.
II. DEVELOPMENT
The Developer shall develop, construct, operate, manage and maintain a 60-unit affordable rental housing
development consisting of 59 one-bedroom, one two-bedroom and no three-bedroom units and common
areas and infrastructure to support the housing development. The rental housing units (less the manager's
unit)will be restricted for tenants at initial occupancy.
The development will be pursuant to the Agreement, this Exhibit, and all conditions set forth in any City
Permit issued for the Project.
With specific regard to the DR-MHP funding, the Developer shall commence and complete the
Improvements by the respective timeframes found in the Schedule of Performance. Please note that CDBG
DR-MHP funding may be utilized to construct the housing units and eligible site improvement costs,
including on-site improvements(sidewalks, utility connections, sewer and water lines, etc)where none are
present. Funding other than CDBG DR-MHP may pay for any required offsite infrastructure:
l. Street frontage improvements shall be installed in accordance with City Construction Standards, as
follows:
a. Vertical curb,gutter,and 5-foot-wide sidewalk and a bus turnout for Redding Area Bus Authority service
positioned to properly connect and align with existing improvements installed along the full frontage of
Lake Boulevard.
b. Necessary transitions and tie-in paving, as well as asphalt overlay work on the existing street sections as
necessary to provide a uniform cross slope from centerline ta the new gutter.
c. Street storm-drainage facilities.
d. Standard City of Redding driveway at approved locations.
e.New pavement striping and street signage as needed.
f. Streetlights as needed.
2. Sewer, Water, and Drainage Utilities. Sewer lines, waterlines, electric-service facilities, and other
utilities; drainage facilities; necessary electric- and publio-service easements; and street dedications are to
be provided in accordance with the Redding Municipal Code and as specified by the Engineering Division.
The developer shall extend sewer and water lines and electric substructures and conduits as necessary to
serve the property and provide logical extensions of service through the property boundaries to adjacent
properties.New utilities within the project,including,but not limited to,electric,cable television,and phone,
shall be installed underground.Applicant shall note that the California Green Building Code Section 5.304.2
requires a separate water meter and water service for irrigation of landscape areas when a commercial project
includes more than 1,000 square feet or irrigated landscape. All utility and landscape plans shall depict the
proposed location of the water meter and identify the total area of landscape proposed with the project.
3. Electric Utility. The developer shall be responsible for all costs associated with the relocation or
modification of existing utility facilities or structures necessitated by the construction of the project or of
improvements required as a condition of approval of this project, including reimbursement of any costs to
City of Redding Electric Utility for work performed to support the project
4. Fire Protection. On-site and street-side fire hydrants are to be installed in accordance with the California
Fire Code in locations approved by the City Fire Marshal. Fire hydrants shall have a fire flow meeting
Appendix B of the California Fire Code. In no case shall the water mains be less tha�16 inches in diameter.
If a hydrant is located on private property, adequate access shall be provided to and around the hydrant as
determined by the Fire Marshal
5. Streetlights. The developer shall install streetlights on all public-street frontages as required by the
Engineering Division in accordance with the City Construction Standards. Streetlights shall be provided in
accordance with applicable Redding Electric Utility Construction Standards 553.0, et seq.
IIL DEVELOPMENT STANDARDS
The Improvements shall conform to all applicable state laws and regulations and to applicable provisions of
the Municipal Code of the City of Redding (the "Municipal Code"); all applicable City of Redding
development and zoning code reGuirements;and any and all permits issues for the Project. Housing Project
Coordinator must also provide written approval the Final Plans prior to commencing of construction.
EXHIBIT 6
HL 8hE 8ri HO BP
3 SOUFiCES ANU USES OF FUHOS
4
5 SOi1RCES Qf�tJtiD3 TOTAL USES PERM CONSTRUCTION
6 r��rnaLee�n ��rrra t.2?A_?UO 7.2�4,7ff3
T C:ity at Rclditty CCA5G�UR tan5t 2,D�O.vQQ 2.Oi�D.p�F 2�t7D0,tlDD
$ 52,1d2 52.tAe'
4 &trs7e Ft�BIG(Sp�nsr,�Loan) �ivst Z.5��}.L�tJ 2.SDD.O� 2.50U,OfiD
f� 65,177 GS.iTi
ii CCff S�n�o�Lu�.�-baianeing hrre penr, t.452.330 1.d52,'s4�
12 �
t3 5i�t'r H;A NFLN
�+tn 7,D5�2.5�;�9 7.09�7.&fl�
�4 ��&4Q'('{'{:(J(+�(.�{.��(ii�it`L'i u5t^Y�lyl'Pe 4TFU{t1t'':t31 Q Q
SS CA State L�DS LOrm �ron�t T99.T3D 739.13�� 738,t30
16 'l3.ZT0 19,27U'
t7 hHP t,;an{3pc�^5g�{.e�anj ennsk 635 GGO 885.D4"- E95.00U
?8 SLS.e C�ErC?icatc»�9 Cs�dit�Y�wn5or Lo:se) penn 3�.645.G65 3.8b5.�5
t9 Gast�Vuct��Luzn canet 2A,^s5�:.589 2d,394.fi69
20 L'+etzrred Dcwebti�r Fee o a
21 GPr;arsl Pahn�EquM iDG 166 4�C1
22 limited P&tYne�g"i3 49.99".ti 13.t8d.�+94 19.78d.fit3s ^y99235
23 FOTAL$OURCES 68.046.561 33,65t.673 31,5Q6.i5d�
24 y3a D 0 4
25
as
27 tiSES OF FU1t08 TOTAL CO5T5 PERM COHStRUCTION
28 LantlatqWsltiGtt F,199.000 1.196,OR:e 1,t98,00D
Z9 h�i�'nan V�r7 fltpr86GYeeS p � �
3o i�cq�us:ticn!_�a�a dos�re�casEs 3s,t�.� ss,ao,�� is.L�ao
31 C&teyetb e65t4 0 0 G
..� L�P;1t4,EC�(iYlfQtilll£NIC�i CEfTSfi�iOtlOn t'AISffmC2 f7 � C5
� 4YM.i3rs-,^�"�3s5 �ttt 78�,3<3:3 i90.393� 7'�.393
3d S�*e Irnprn�errie,a2s 5 u�ih�iea 21,339.597 2.37qEp3 @,37d,t�3 2375,123
35 BUEr:ture�NaW Ctitt�rucUnr3 id.832.£59 id.892.$53 i4,892.859
?fi C�tr�targer�zalreqUkw�nt�fare;Y�etsd'pteflt 2.754.ST6 Z.751,6Te 2.757,8Tfi
37 CceeVr�torGa�,3srtQ�r:su;aiic� 5�.54fi 536,14fi 530,4.#6
38 PV�y3.4estt 0 0 �
38 ParS�ttai Prc�eriy in Censc;uc2f6n Gontnlct
0 o ca
�0 Fum;ast�:r Puf�te3efi by0'�Vatw 6"v.0".A 60,OP� E�1.G00
dt �3UucCwt c�+tti�gEYrCf 5.09�i 4,D88;?FO 7,058.976� 1.466.97Q
-02 ImpScfFaes 614�t61 639.1D2 c39,tD7
d3 lTeimJts at'Hi uBRiy ht7Ge��:s S EnBiP�m�nt co8{ 9tQ.6^�U f 10.RD� tt0,21W
UC nt'G,h3e,N�� T,7�,CU0 t.7D0.O1k3 1.?(lO.OW
e5 Surwsy.en{��rirg.M:3SirvB t€s,9�8QA t66.6�� &�fl,&00
+i6 C�54ucGetr msn:sg�rrten! 122a.}CO 1�26,DD3 t20,COD
A? SEcutftVduHa+✓��rastrWct,icn D 0 6
4$ PttYel�iITp Wa�ti @Io21D/;1y' 3o3.Qull 3C�.� 3D�G0a
a9 [a�v�onment:ilrep;;ats Sy#,0�-0 SD,OU�'= SO.WO
�A So`3cis3if;oMfrs�enri c'.r��iCO 206.OL� 2�70,C�W
51 Ca.�.strur.L�n Los�n Feee�t� 2d3.9GF 2dS,9G? 2d3.9d7
52 Ci�y L�a&n Ft� D 0 tE
sa ca��,ry��,Fzes o a �a
SS inte��si cw�snft lo�s d��g cc��truc€nn 13�5.5&9 136.583� ik
� TaxesdurinnwnsttucFian 25.6;n] 25,00� 25.G00
56 C[etsUuce.ro7 toan Iniete$t du(�g canStruCivt<n CasS�15 n�o t.577.t50 1.577,15AS 1�5T7.150
S7 Cos`shucY�rj�.vn{nt�rnst past cnR§�trucG�n-3 mo T,S�.c68 1.556,669 tv56,668
58 Castsduc*.��Cwttlta It+;sl and c»�3s 93,�D �J,OP;� s0.G00
59 Cour�n1 Cunstr�tion€nswaf�ce 32G.G�0 320.OtY' 32A.Q4D
et! Title-C.ce�.slruca.Km L¢�n Cloain9 58,{k;,0 55.�3 Si.Ea]0
87 .�,,pr� 12.�'.� 12,� t2.G00
d2 t8kCi'201tf4�`,.oCeCk.wnCixr�natCeeFaBs 716.fl2? 1i8.8Y2 Ri6,is�2
�S3 l..eg�l Fees�Ceg�ntzati¢n 5.� S.ODD 5.C40
cd tegal Fees�ConsGuc,ia�Lc�an C&�tny d@.00A 40,00� 4U.f�0
�5 Lc'�g�l,.3yat�1{caEi�t 85.09A 35.0� 35.CU0
€fi ter�sl•}'ernrsrse-�t lo.s�.n�ia�ln5 dC.� dtl,06;i 4
c7 Legsl-Catirtty�6 C 4y be�ai w3te D 0 f�
68 in�vsir�Legsl&Ccns3rv:��rr 4�s,.^ec:lons 6s�.b"6 6D,0� aA.4�00
89 Tipe-Pattnane�2laa�e14e(c7y 25.D�'0 25,0� G
7[I DAg:xed SNdp' 9Q.dn."0 1D.00kS t0_G0�
?i �as[�t�1�tY•&r7tt5c�S�cv't 55.�0 55.6IX2 5b_�0
72�Aafce4ing SS.D30 SS,U49 �a.Otla
73 Froject A2rYlt `s.i',5e�0 3d.5U� 3».500
78 6^a.efsSing Fieservas•3 n�CP=� id6.$fd 1 tD.614
78 HCD'.ranstttonReservcPc�e t�t.3t5 tU1,'st�
76 Setv�es€ie�rve 0 0
n cr�ersungoae�xr��:re o a
38 tea:.�-UW Ra�re 0 0
7H klCC-NPLM COS�id{ttald try HC6} D 0
�1 i}eveFYytrsl.a5t Fee 2�.�'s�,:-.GdO 2,206AM s:,fl,�;AO
81 ReAa•�rr�st oC Cor�strucL�n Lo�n 2d.:s�3S.a`88 p
L�2 TO?AL PRQlECT COST5 SS.Oi6.561 53.65t.8T2 31.50$,753
EXHIBIT 7
Piper Way Senior Fi�€�sing[?evelopment Schedule
IVlilestone Estimate Note
J�tquisitiora 8/ij2020 �ption Agre�ment
Feasibilit JOue-dili ence 1Z/i/2Q20 Completed
Site E?euelopment Permit/Entitlement 6f 30/2021 Compteted
Submit 99�t1H1'C 8/��J2Q22 5etond Round
9r6 LINTCAward 12/26/2022
Construction Loan Glosing 6/15f2�23
Eonstruction Start 5/28/2023 ig0 days from LIH7C Award
Construction Complefe llj2/2tI24 i5 months
S00%Oceupied 12i31/2024
Perma�ent Conversian 6/iJ�Q25 Perrnan�nt Conversion
���� 2/Sf20�6
EXHIBIT 8
RECORDING REQUESTED BY
CITY OF REDDING
WHEN RECORDED, MAIL TO:
CITY OF REDDING
P.O. Box 496071
Redding, CA 96049-6071
Loan No.:
THIS SPACE FOR RECORDER'S USE ONLY
NOTICE OF COMPLETION
Notice pursuant to Civil Code Section 3093 must be filed within 10 days after completion.
NOTICE IS HEREBY GNEN THAT:
1. The undersigned is the owner or authorized agent of the owner of the interest or estate stated below in
the property hereinafter described.
2. The full name of the owner is: Piper Way Senior Housing LP
3. The full address of the owner is: 303 Hegenberger Road, Suite 201,Oakland, CA 94621
4. The nature of the interest or estate of the undersigned is: In Fee
5. The full names and full addresses of all persons, if any, who hold title witli the undersigned as joint
tenants or as tenants in common are: None
6. Work or improvement on the property hereinafter described was construction and was completed
on
7. Said work or improvement was undertaken on said property pursuant to a contract dated ,2023
with General Contractor —
The street address of the property on which said work or improvement was completed is 3294 Placer Street,
Redding, CA 96001, County of Shasta, State of California, APN: 104-680-003-000
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
I,the undersigned, state that I am the declarant of the foregoing Notice of Completion;that I have read
said Notice of Completion and, to the best of my knowledge,I declare under penalty of peijury tliat the
foregoing is true and correct.
Dated:
PIPER WAY SENIOR HOUSING LP,
a California limited partnership
By: PWS Housing, LLC,
a California limited liability company,
its General Partner
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
PARTNERSHIP'S GENERAL PARTNER:
PWS HOUSING, LLC,
a California limited liability company
By: Christian Church Homes,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Sidney Stone,
Vice President of Real Estate Development
EXHIBIT 9
CERTIFICATE OF COMPLETION
THIS C�RTIFICATE OF COMPLETION (the "Certificate") is made by the CITY OF
REDDING a municipal corporation and general law city (the "CITY"), in favor of Piper Way Senior
Apartments,LP a California limited partnership(the "OWNER"), as of the date set forth below.
RECITALS
A. The CITY and the OWNER have entered into that certain Development Agreement(DA)
dated June ,2023 concerning the development of certain real propeMy situated in Redding,California,
including a Portion of Assessor Parcel Number(s} 104-680-003-00 as more fulIy described in Exhibit A
attached hereto and made a part hereof(the Property).
B. The DA sets forth the obligations of Piper Way Senior Apartments, LP, referred to as
Developer, under the DA.
C. The CITY has conclusively determined that the Developer has satisfactorily completed the
obligations of the DEVELOPER relative to development of the Property required by the DA and now
desires to furnish DEVELOPER or its successors with a Certificate of Completion. This Certificate is in
such form as to pennit conclusive determination of satisfactory completion of all of the obligations of the
DEVELOPER required by the DA regarding development of the property.
NOW,THEREFORE,the CITY hereby certifies as follows:
1. The obligations of the DEVELOPER regarding development of the Site as stated in the
DA have been fully and satisfactorily completed in conformance with the DA except as to
those breaches of contract or defects in construction that could not have reasonably been
discovered by CITY at the time of issuance of the Certificate of Completion.
2. Nothing contained in this instrument shall modify in any way any other provisions of the
DA.
IN WITNESS WHEREOF,the CITY has executed this Certificate this day of , 202
CITY OF REDDING,a municipal corporation
BARRY TIPPIN, City Manager
EXHIBIT A to CERTIFICATE OF COMPLETION
LEGAL�►E�CF21PTi{�N
i'1-€E Lt�MD f2EFEr'C�E�7 TO H�REIt3 EE�CYL1'15 SITlFa3TE� REdD1NG IhJ TI�E CC'Jl8N7S�CDF�aHAST.�t,STfhTE
f�"CALIFt7RNit�.,tix'VD 1S DESC�IBED AS FC?LLfJb'Y�:
lGi 7. a� sha�n�n an ihe map of Fern .dtddita�n ao YVa«11s�vn Subdivision, res�ar�ie� dn the aifi€� s�£�Fie County
F2�cord�f d.f�ir�h 3,1 B2'3R in 8r�o�:of�Id Pkat�.at pa�e�38.�h�sla Cau�fy�Reeorr�s_
„Ph� 1fJd-68R?-dlQ3-040
�XHl�fl C it}
l=,��Fi F•iC?US1NG PC)ST�R
tk.S_�apartmrnt of HausEng ans!llrtsan O�vaiapm�art:t
i�
�
�
ECtUAL F�{7U5ihlG
(�i��t7RTUNITY
t�Ne Do Business i�a Rccord�n�e 'VYith �he Federat Fair
Hausinc� L�w
{The Fa�r Nousing Ar�er�drne�ts�,ct crf 1�88}
�t �� I11���� �o C�is+�rimir���e A���r��� �4r�y �ers��n
�e�a�us� of R��e, �c�l�►r, ��li�i�►r�, :��x,
��r�dicap, ��m��ial ������, �r ���ic�r��l �►r�c��n
� in tf�e ��{e ar ren��l �f hc�usir�g or � !n t�� prc�visic�n c�f re�l �state
resid�ntia! I�ts br�k��a�e seruic�:s
■ In adv�r�isir�� the sale ar r�n�ai � En the appraisaf of h�rusing
�f ho�sir�g
■ Ir� the fin�n�ing �f h�using � Blc�ckbusting is �Ise� i�le�a�
_ _._.
�,r�y�n�•,=nc��fe�is he a�s€�e�as be�� tl.S.D�partr»�rtt of Housing and
discr�rnrnste�i�gaissst rt�ay fil�s�c�np�aint ct ll��n Devekapm�ni
t�a�ssirsg discr�m�nali��: Asslstant Secretary for Fair Hausing and
t•8fl�-56�-9773 r;T�{i Fr�e} Equa�Cipp�rtun3ty
�-�§���27-�275(TD�.?E Washington,C3.G.2(}d10
r�r��it�,az e+in�,ns�ea���,'�t� form Y��,�Cl-ye?3%A[�:�,�i
EXHIBIT 11
ESTOPPEL CERTIFICATE
This Estoppel Certificate ("Certificate") dated as of , 2023 ("Date Hereof') is
executed by the City of Redding ("City") in favor of
Piper Way Senior Housing LP, a California limited partnership ("Developer") loan with US
Bank("Lender").
NOW THEREFORE,the City certifies to Lender:
1. As of the date of this Certificate,to the best of the City's knowledge,Developer has performed
all obligations required of City under the Declaration; no offsets, claims or breach of the
Declaration exist as of the Date Hereof and no events have occurred that are known to the
Declarant which would constitute an uncured breach of the Declaration.
2. From the Date of this Certificate, the City agrees to notify Lender in the event of discovery of
facts that would make this Certificate inaccurate.
DATED:
CITY OF REDDING
By:
Barry, Tippin, City Manager
a
EXHIBIT 12—RESERVED
ExxlsiT 13
ANTI-LOBBYING CERTIFICATION
The undersigned certifies,to the best of his or her knowledge and belief,that:
1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned,to
any person for influencing or attempting to influence an officer or employee of any agency, a
Member of Congress,an officer or employee of Congress,or an employee of a Member of Congress
in connection with the awarding of any Federal contract,the making of any Federal grant,the making
of any Federal loan,the entering into of any cooperative agreement,and the extension,continuation,
renewal,amendment,or modification of any Federal contract,grant, loan,or cooperative agreement.
2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for
influencing or attempting to influence an officer or employee of any agency,a Member of Congress,
an officer or employee of Congress, or an employee of a Member of Congress in connection with
this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and
submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instruc-
tions.
3. The undersigned shail require that the language of this certification be included in the award
documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose
accordingly.
This certification is a material representation of fact upon which reliance was placed when this transaction
was made or entered into. Submission of this certification is a prerequisite for making or entering into this
transaction imposed by section 1352,title 31,U.S.C. Any person who fails to file the required certification
shall be subject to a civil penalty of not less than$10,000 and not more than$100,000 for each such failure.
DATE: SIGNATURE: