HomeMy WebLinkAbout121412 spmtg ncc combined NOTICE A SPECIAL MEETING
ATASCADERO CITE COUNCIL
AGENDA
Friday, December 14, 2012
12:30 p.m
City of Atascadero City Mail
6907 El Camino Real, Atascadero, California
ROLL CALL:
MANAGEMENT REPORTS:
1, North County Connection In-Lieu Affordable Housing Fuad Allocation
Fiscal Impact:
Recommendation: Council authorize the City Manager to negotiate and execute
any additional agreements necessary for $100,000 from the In-Lieu Affordable
Housing Fund to North County Connection for one low-income affordable
housing unit on the property at 8600 Atascadero Avenue.
ADJOURNMENT:
The City Council will adjourn to the next Special Meeting scheduled for 1:00 p.m.
STATE OF CALIFORNIA j
COUNTY OF SAN LUIS OBISPO }
CITY OF ATASCADERO }
LISA CAVA, Deputy City Clerk., being fully sworn, deposes, and says: That she is the Deputy City Clerk
of the City of Atascadero and that on Thursday, December 13, 2012, she caused the above Notice to be posted
on the doors of the City's Administration Building, 6907 EI Camino Re l in Atascadero, California.
LISA CAVA
Deputy City Clerk
City of Atascadero
ITEM NUMBER: 1
DATE: 12-14-12
7-9
,i9is F � is�a�
Atascadero City Council
Staff Report — Community Development Department
North County Connection
In-Lieu Affordable Housing Fund Allocation
RECOMMENDATION:
Council authorize the City Manager to negotiate and execute any additional agreements
or revisions necessary for the $100,000 from the In-Lieu Affordable Housing Fund to
North County Connection for one low-income affordable housing unit on the property at
8600 Atascadero Avenue.
DISCUSSION:
Background:
On November 27, 2012, the City Council approved a loan for $100,000 from the In-Lieu
Affordable Housing Fund to North County Connection (NCC) for one low-income
affordable housing unit on the property at 8600 Atascadero Avenue. At the time of
approval, it was disclosed that North County Connection has secured a conventional
real-estate loan from Rabobank for $280,000. The loan would require monthly mortgage
payments equal to what NCC has been paying for rent for over 10 years. NCC would
be contributing $10,000 of private donations which they have secured to date. With the
City loan, NCC would have enough money to purchase the property. Rabobank had
stipulated that the bank's loan will need to be in first position, with the affordable
housing deed restriction and the City's $100,000 loan recording in junior on title. If the
bank were to foreclose on the loan, the City's affordable deed restriction would be lost
and the loan may be lost or reduced.
Because of a mix-up on the appraisal, Rabobank will not be able to provide long-term
funding in time to complete the sale of the property. Rabobank has offered to provide a
short-term (90 day) bridge loan for NCC to purchase the property. Due to regulations,
the Bridge Loan may not be recorded against the property. If the City records against
the property at the time of the Bridge Loan/Sale, Rabobank would be in second position
which is of concern to Rabobank. Rabobank has submitted a preliminary agreement
that includes the following:
ITEM NUMBER: 1
DATE: 12-14-12
1. City agrees indebtedness owed to them by North County Connection in the
amount of $100,000.00 ("City Loan") is subordinated to the Bank's unsecured
bridge loan.
2. City agrees that in the event of a default under the City Loan, the City shall
not to foreclose pursuant to its deed of trust until after the Bank's take out
loan if funded and its Deed of Trust is recorded in a first lien position.
3. The Bank's "take out" or conversion of the bridge loan is subject to full
satisfaction of the following conditions
a. Bank's deed of trust is in a first lien position.
b. The City of Atascadero executes subordinations of the City's deed of
trust and the regulatory agreement and affordable housing agreement
on terms and conditions satisfactory to Rabobank in its sole discretion.
c. The subordinations from the City of Atascadero must be acceptable to
First American Title to issue a lender's policy acceptable to the Bank in
its sole discretion such that the Bank takes the subject property free
and clear of the City's deed of trust and the regulatory agreement and
affordable housing agreement in the event of a foreclosure.
d. Loan to Value per the Bank's appraisal meets Rabobank underwriting
standards or cannot exceed 75%.
Because this is a very late development with the City receiving the proposed agreement
on December 12, 2012 after 5 pm, the City's attorneys and Rabobank are still reviewing
and revising the agreement. By signing the agreement, the City is taking on additional
short-term risk. Rabobank is not required to fund the long-term loan, thus putting NCC
in a tenuous position if they are unable to obtain long-term financing before the Bridge
Loan expires. While staff feels confident that Rabobank intends to convert the bridge
loan to a conventional loan, there is no guarantee. Because this and other items risk
areas are different than original presented to Council, staff is returning this to Council.
Staff is recommending that Council set general guidelines and authorize staff to
negotiate and execute a final agreement.
FISCAL IMPACT:
There is no direct fiscal impact for the revisions being proposed
ATTACHMENTS:
Attachment 1: November 27, 2012 Staff Report and attachments
ITEM NUMBER: 1
DATE: 12-14-12
Attachment 1
gri 19-5 /
\A' C"
Atascadero City Council
Staff Report — Community Development Department
North County Connection
In-Lieu Affordable Housing Fund Allocation
RECOMMENDATION:
Council authorize a loan of $100,000 from the In-Lieu Affordable Housing Fund to North
County Connection for one low-income affordable housing unit on the property at 8600
Atascadero Avenue.
DISCUSSION:
Background:
On March 27, 2012, the City Council reviewed requests from North County Connection
(NCC) and EI Camino Homeless Organization (ECHO) for funding from the City's In-
Lieu Affordable Housing Fund (In-lieu fund.) At that meeting, the Council authorized
$100,000 for NCC in exchange for one low-income affordable housing unit. Final loan
documents were to be brought back to be reviewed by Council when purchase details
and funding sources were finalized.
Analysis:
Over the past several months North County Connection has worked on finalizing the
purchase terms and funding sources for acquisition of the site at 8600 Atascadero
Avenue. NCC has operated their social service programs at this site since 1998, and
the property is currently for sale.
NCC had originally planned to use $133,614 in City and County CDBG funds; however,
the County found that NCC was not able to demonstrate that the project qualified for
CDBG funds. CDBG funds must be used for projects in which over 50% of the clientele
is in the low income category. Upon meeting with federal auditors and fund
administrators, County staff determined that the level of client reporting which was
ITEM NUMBER: 1
DATE: 12-14-12
required for the CDBG funds could not be obtained due to the confidentiality
requirements which NCC has with their clientele.
Upon learning that the CDBG funds were not going to be available, NCC contacted the
local Rabobank about a conventional real estate loan. NCC has been approved for a
$280,000 loan from Rabobank, which will require monthly mortgage payments equal to
what NCC has been paying for rent for over 10 years. NCC will be contributing $10,000
of private donations which they have secured to date. With the City loan, NCC would
have enough money to purchase the property. Rabobank has stipulated that the bank's
loan will need to be in first position, with the affordable housing deed restriction and the
City's $100,000 loan recording in junior on title. If the bank were to foreclose on the
loan, the City's affordable deed restriction would be lost and the loan may be lost
or reduced.
NCC has also obtained a property appraisal, as requested by the City to ensure that the
loan on the property did not exceed the value of the site. Obtaining the appraisal took
some time, as the property is unique due to potential for subdivision and current use as
NCC resource center and service facility. The appraisal was completed in August and
valued the property at $390,000. The owners and NCC adjusted the original purchase
agreement to match the lower appraised value.
Costs to purchase 8600 Atascadero Ave:
Purchase Price $390,000
Funding Source:
■ Loan from Rabobank $280,000
• City of Atascadero (in-lieu fee allocation) $100,000
• Private donations secured to date $10,000
Total funding available $390,000
In exchange for the City's $100,000 loan assistance in purchasing the property, NCC
will be providing one deed restricted affordable housing unit (low income) for 55 years.
There is an existing space in the main building which was once used as a one-bedroom
apartment. The unit has not been used as permanent residence since NCC began their
operations on the site over ten years ago, but it could easily be fixed up to be rented
again. Plumbing, gas lines, a fireplace, private entrance and full bathroom remain in the
space. Cosmetic work, code compliance upgrades, kitchen cabinets and appliances
would be required to be installed or repaired. In order to remain in compliance with
NCC's use permit, the unit cannot be used for overnight or transitional care of NCC's
clients; however, an affordable income manager's unit or permanent rental unit is in
compliance with the residential zoning and the approved business license for NCC.
This one-bedroom low-income unit would rent for no more than $905 per month, with
the rental income going directly to NCC.
ITEM NUMBER: 1
DATE: 12-14-12
If approved by City Council at tonight's meeting, the City's loan of $100,000 of in-lieu
funds would be released into an escrow account as a loan in exchange for a deed
restriction for one low-income affordable unit for a period of 55 years. The loan would
be structured similar to the City's previous Downtown Affordable Housing Loan
Program. There would be no payments required during the term of the loan. If NCC
sells the property, or if either NCC or the City chooses not to renew the agreement at
the end of the 55 years, then NCC would be required to repay the original $100,000
loan back to the City. In addition, there is also an equity share component to the
program implemented as Contingent Interest. The contingent interest is paid to the City
at time of sale or in 55 years, whichever occurs first. Contingent Interest is equal to a
percentage of loan to value the City made at the time of purchase (2012). The City is
investing $100,000 towards the site which has appraised at $390,000 (approximately
25.6% City investment). If the property later sold for $1,000,000, the deed restriction
would be released and the City would be repaid the initial $100,000 loan, plus 25.6% of
the $610,000 increase in value (equal to $156,160 in contingent interest). If the
property sold for less than $390,000, only the original principal amount of $100,000
would be due. The draft affordable housing agreement, promissory notes, and
associated loan documents related to the City's funding are attached to this staff report.
City Funding Points:
■ $100,000 of in-lieu funds, structured as a no payment loan by City to NCC
- Loan due at either 55 years, or at time of sale
- Contingent interest based on loan to value at time of purchase, and property
value appreciation at time of sale
■ North County Connection will provide one (1) low-income unit on-site
- Affordable unit to be deed restricted for a period of 55 years
- North County Connection will provide annual verification of rental to qualified
tenant, with monthly rent to be per County standard for a low-income one
bedroom unit
■ Property to be maintained in good condition and continue to operate in
compliance with the conditions of the business license
Property Repairs & Construction
The existing building on the site, which NCC currently uses, will require some
substantial repairs and renovations in the near future. NCC has identified a budget of
$53,000 that is needed in addition to the purchase price for immediate repairs, including
a new roof, improvements to the exterior bathrooms, and fixing up the low-income unit
for rent. NCC will be working with a Cal Poly Construction Management class to do
much of the work in the spring. As property owners, they will also be eligible for
additional grants for property repairs and will begin a capital campaign for additional
donations, relying on volunteers to help with the work.
ITEM NUMBER: 1
DATE: 12-14-12
City Planning staff and building inspectors will be meeting on site with NCC to identify
what work is required on the affordable rental unit to ensure it meets health and safety
codes in order to rent. Per the Affordable Housing Agreement, NCC will submit plans
and obtain a building permit for the work on the affordable housing unit within six (6)
months of property purchase. Construction on the unit will be completed within twelve
(12) months of property purchase so that affordable unit can be leased and occupied by
a qualified tenant at the restricted affordable housing price.
FISCAL IMPACT:
The Council's Inclusionary Housing Policy, adopted in 2003, requires developers of
Planned Developments to either provide 20% percent of the project as deed restricted
affordable units, or contribute 5.0% of the construction value of the market-rate units to
the City's In-Lieu Housing Fund. The money must be used to create long term
affordable housing units.
At the March 2012 meeting, the Council decided to reserve at least $100,000 in the in-
lieu housing fund in order to continue to administer the existing low and moderate
income affordable housing loan program.
CONCLUSION:
If the Council is satisfied with the conditions outlined above, Council may choose to
allocate the requested $100,000 of in-lieu funds. Funds would be placed into an escrow
account and would be available the first week of December to complete North County
Connection's site purchase. Loan documents and deed restrictions are attached for
Council review.
ATTACHMENTS:
Attachment 1: Affordable Housing Participation checklist
Attachment 2: Letter from North County Connection
Attachment 3: Affordable Housing Agreement with Attachments
Attachment 1: City of Atascadero Affordable Housing Participation Checklist
City of Atascadero - Affordable Housing Participation Checklist
Organization Name: North Counct Connection (NCC) Date: 10/7/12
Project Name: 8600 Atascadero Ave.
Contact Person Sue Warren Project Type:
Phone: 805 462-8600 New Construction
Email Address: nccat@pacbell.net Rehabilitation es
Application Number:
Is this an update to an existing checklist? no
Instructions:Please insert the appropriate number of points in the"Points"column.Except where there is a range of points offered,there is no
graduated point allowance for less than full compliance. In addition to the minimum optional points,all projects must meet the applicable mandatory
requirements.
Optional Points value 2 points
Encouraged Points value 4 points
High Priority Points value 10 points
Mandatory Points value 18 points
Criteria Description Requirement Type Points
Section 1- Project Funding
1-1 Funding Leveraged Are there funds from other sources? 140%=0 pts,40-80%=9 pts,>80%=18 pts 9
1-2 Principal Sum Public Investment Will principal sum be recovered in specified time? 18
1-3 Return on Investment Will there be a reasonable return on investment? 4
1 4 Cost Per Unit Lower City cast per unit given higher priority 1$20,000=10 pts,$20,000-40,000=8 pts,
$40,001-60,000=6 pts,$60,001-80,000=4 pts, 2
$80,001-100,000=2 pts,>$100,000=0 pts
SUBTOTAL 33
Section 2- Site, Location, and Neighborhood Consistency
2-1 Neighborhood Compatibility Does the project ft the neighborhood? 2
2-2 Adherence-Zoning Requirements Does the project follow General Plan Consistency? 4
2-3 Environmental Suitability Are there no significant environmental issues? 2
2-4 Neighborhood Acceptance Does the neighborhood support?(neighborhood meeting 2
required
2-5 Green Development Plan Is the project LEED certified? 0
2-6 Building Appearance Does project provide high quality architecture? 2
2-7 Landscape Does project provide high quality landscape? 2
2-8 Commercial Component Project includes mixed use? 10
2-9 Downtown Site Project in downtown zone? 0
SUBTOTAL 24
Section 3-Affordability
3-1 Very Low Income Percentage very low income units? <10%=5pts,10-30%=10pts,>30%=18pts 0
3-2 Low Income Percentage very low income units? <10%=Opts,10-30%=5pts,>30%=10pts 10
3-3 Moderate Income Will there be any Moderate Income units? 0
3-4 Rental Units Project Does project include rental units? <50%=Opts,50-75%=5pts,>75%=10pts 10
3-5 Number of units/density Is Project at maximum General Plan density? 4
3-6 Variety of Unit Size Is there a mix of unit size/bedrooms?(min 25%of units) 0
SUBTOTAL 24
Section 4-Term of Affordability
4-1 Ownership Units Deed Restriction Term 45 year term required
18
4-2 Rental Unit Deed Restriction Term 55 year term required
4-3 Additional Time Restriction Proposing to deed restrict at lease 10 years more than 45/55 0
years?
SUBTOTAL 18
Section 5- Proponent/ Partnerships
5-1 Local Non-profit/For Profit Is project a SLO County non-profit involved in the project? 18
5-2 Local Proponent Is project proponent located in SLO County? 18
5-3 Experience of Proponent Is developer experienced in affordable housing/good 10
references?
5-4 Project Timing&Readiness Are project entitlements approved? 4
SUBTOTAL 50
Percentage of Points Received = 78% Point Scored 149
Out of Total Points 190
Attachment 2: Letter From North County Connection
North County Connection
8600 Atascadero Avenue Property Acquisition Update
September 14,2012
The SLO County Planning Department has said that their inquiry to HUD on
using CDBG funding for the NCC project would not fit within the HUD
guidelines. We are awaiting written documentation from the HUD official.
We are working with Carol Bezkostny and Jeff Mercer of Rabobank to
obtain a commercial loan to purchase the property outright from Jim and
Darlene Watson. The agreed price is at the new appraisal amount of
$390,000. The down payment will consist of the$100,000 of the designated
Atascadero City in-lieu fees and the current$10,000 of donations held by
NCC. Sally Twiford of First American Title Company is preparing our
escrow papers with Marci Bloomgren continuing as the agent for both the
Watson's and NCC. Things are progressing smoothly.
We met with Trevor Harding,Ph.D.professor and chair of Cal Poly
Materials Engineering Department this week. He will be speaking with the
chair of the Construction Management department, and together they will
take on the renovation of the low-income apartment and outside bathroom
and update the plumbing as a combined department student project. NCC
will only have to supply the materials. We will patch the only roof leak
which is at the back corner of the building for now. We can then identify the
funds for a future roof replacement through a grant,donations,etc. We are
also on the list for a service learning project with Cal Poly students for
painting the interior of the facility, again with NCC supplying the materials.
We are an integral part of the new North County Homeless Coalition and
will be collaborating with our partners on housing grants. We will be
developing a system of care with ECHO and our other partners to help
stabilize people in early recovery through transitional housing and peer
support services. This will help to free up shelter beds and provide housing
for men who often can't find a bed at the shelter.
Today we found out that the committee formed from the NCC presentation
on the"Integration of Behavioral Health into Primary Care" will be a
recipient of the five county pilot programs in the state to receive technical
assistance from the California Alcohol and Drug Program consultants,
E.T.T.A. They will help us design and implement a pilot"system of care-
for the FQHC(CHCCC),primary care and emergency room doctors to refer
their patients to with the January 1, 2014 mandate for SB1RT(screen,brief
intervention and referral to treatment). We have also written a grant to Blue
Shield to develop our plan beginning January 1, 2013 and implement it in
the north SLO county area beginning July 1,2013 with a six month
evaluation. This grant focuses on our existing north county community
based providers,CHCCC sites,NCC,Lifestyles, Cambria Connection and
the development of options for those needing medical detox. We will
provide two organizational charts to show the community need for services
and the flow chart of how we expect to expand our north county's ability to
provide these services.
On Wednesday,October 17, 2012 at 7 pm at the Atascadero Lake Pavilion,
NCC is sponsoring a community education opportunity with Mario San
Bartolome,MD,ASAM (American Society of Addiction Medicine). His
topic is Addiction and Substance Use Disorders: A New Look at an Old
Problem. He will discuss how society and individuals deal with substance
use disorders and explain what the future may hold for treatment.
A ribbon cutting ceremony will begin several funding endeavors for NCC.
• A capital campaign($20,000 per year can be paid on the mortgage.)
• A memorial "Brick Campaign" for meditation gardens.
• Silent Auction for renovation materials,sponsoring a bed,etc.
• We already have our first"Endowment"donor(NCC is in their will)
• More collaborative grant opportunities and sustainability plans
We look forward to being part of a truly collaborative north county
community based system of care that serves all members of the community.
No one should have to go to jail or lose their children in order to receive
treatment for substance abuse disorders and addiction. This plan can reduce
the city and county costs for law enforcement,emergency room visits,other
medical costs,school attendance losses,and work place injuries. We have to
reduce the horrible loss of life,as SLO County prescription drug deaths are
twice the state averages.
North County Connection Business Plan (fiscalyear2012-2013)
Where people matter and recovery happens!
Our Vision is for a community of healthy individuals and families.
Our Mission is to provide a resource center for the prevention of and
recovery from substance abuse,other addictions and related problems.
Coals:
• Prorrx)te the development of prevention and recovery activities and services for
the entire community.
• Increase community awareness of alcohol and other drug related issues.
• Facilitate on-going support for those recovering from alcohol and other drug
related problems.
Objectives:
• Increase operating revenue from$50,000 to$80,000 through grants&contracts.
• Launch"Capital Campaign'to pay Atascadero Avenue property mortgage off.
• Increase donor base revenue from$2,000 to$20,000+.
• Provide at kast four community education programs about NCC and our services.
• Increase advocacy training and opportunities for facility participants.
• Increase educational programs and services for community participants.
• Develop and maintain data collection system for drop-in and case management.
• Increase collaborative efforts in order to decrease expenses.
Strategies:
• Develop an advisory board of skilled community members
• Create a marketing plan for education,volunteer,and donor solicitation.
• Create a"Capital Campaign'committee and then a plan.
• Develop Advocacy training and plan through Faces and Voices of Recovery.
• Launch the use of the Matrix anonymous resource center participant data system.
• Develop services/programs: find contract funding to enhance recovery services.
• Reduce expenses through collaborative efforts for staff,supplies,trainings etc.
Action Plans:
• Establish"Capital Campaign"committee&plan by December 5,2012
• Develop market/advocacy strategy for September Recovery Happens month.
• Begin using the Matrix data collection system December 31,2012.
• Work with PEFS to find&develop services and contracts by Dec.31,2012
Attachment 3:Affordable Housing Agreement with Attachments
See Following
Affordable Housing Agreement
Attachment A - Calculation of Affordable Rent
Attachment B - Promissory Note
Attachment C - Deed of Trust
Attachment D - Regulatory Agreement
Attachment E - Scope of Work
Attachment F - Legal Description
Attachment G - Parcel Map
Attachment H - Affordable Unit Location
AFFORDABLE HOUSING AGREEMENT
[Atascadero In-Lieu Fee Program]
by and between
the
CITY OF ATASCADERO
and
NORTH COUNTY CONNECTION
.1
Dated 92012
LA#4840-2809-0894 vl
AFFORDABLE HOUSING AGREEMENT
This Affordable Housing Agreement (the "Agreement"), which is dated for reference as
indicated on the cover page, is hereby entered into by and between the CITY OF
ATASCADERO, a public body, corporate and politic ("City") and NORTH COUNTY
CONNECTION ("Participant"), on the following terms and conditions:
RECITALS
A. General Purpose. This Agreement provides a mechanism whereby Participant
may participate in the provision of affordable housing in the City in a manner consistent with the
goals, objectives, policies and standards of the laws and regulations of the City and the State of
California. This Agreement is in accord with applicable state and federal laws.
B. Specific Purpose. The specific purpose of this Agreement is to facilitate
development of the Project by Participant as described herein. This Agreement is, therefore,
intended to set forth the obligations of Participant to develop the Project and the manner in which
and the extent to which the City will assist Participant in that endeavor. Specifically, this
Agreement will set forth Participant's obligation to provide housing at an Affordable Rent on the
Site and City's obligation to assist in the funding of the purchase and renovations to the Site.
C. Speculation not Permitted. Participant understands and acknowledges that the
purpose of this Agreement is not to facilitate speculation or excess profit-taking in the Project or
Site within the meaning of California Health and Safety Code § 33437.5 as that section exists on
the date of this Agreement or as it may thereafter be amended, repealed and reenacted, or
otherwise modified. ,.
DEFINITIONS
"Action" shall mean any suit (whether legal, equitable, or declaratory in nature),
proceeding or hearing (whether administrative or judicial), arbitration or mediation (whether
voluntary, court-ordered, binding, or non-binding), or other alternative dispute resolution
process, and the filing, recording, or service of any process, notice, claim, demand, lien, or other
instrument which is a prerequisite or prelude to commencement of the Action.
"Administering Agency" shall mean the San Luis Obispo Housing Authority, the City, or
another agency as determined by the Community Development Director that has experience in
the administration of affordable housing programs.
"Affordable Rent" shall mean "affordable housing cost" as that term is defined and
applied under California Health and Safety Code § 50052.5 and the implementing regulations
contained in Title 25 Cal. Code Regs. § 6910, et seq., to renter-occupied housing for Lower
Income Households. Affordable rent is further defined as the monthly housing expenses,
including all fees for housing services and a reasonable allowance for utilities, that for Lower
Income Households, is equal to or less than one-twelfth (1/12) of thirty percent (30%) of eighty
percent (80%) of Area Median Income, as adjusted for Appropriately-Sized households.
Affordable Rent shall be calculated by the City as shown in Attachment A or as issued on a
monthly basis by San Luis Obispo County.
LA#4840-2809-0894 v
11/19/2012 2:26 PM Page 2 of 22
"Affordable Unit" shall mean the one bedroom unit with kitchen an full bath which will
be located within the existing habitable building as shown per Attachment "H" [Affordable Unit
Location]
"Appreciation Amount"shall mean the difference between the original fair market value
of the Site as appraised pursuant to Section 4.1.2.2 and the appraised fair market value upon sale
of the Site.
"City" shall mean the City of Atascadero, a general law city and municipal corporation
formed and existing under the laws of the State of California. The term "City" shall also include
any assignee of, or successor to, its rights, powers, and responsibilities.
"City Loan"shall mean the amount paid by the City pursuant to Section 4.1.1.
"City Manager" shall mean the City Manager of the City of Atascadero and/or any
person designated and authorized by the City Manager to act in the City Manager's capacity with
regard to this Agreement.
"Completion" shall mean the completion of the Project as provided for in Section 2.2
r�r.
[Completion] of this Agreement. ffffff,.
"Contingent Interest" shall be determined by dividing the amount of the City Loan by
original fair market value of the Site as appraised pursuant to Section 4.1.2.2 and then applying
that percentage to the Appreciation Amount.
"Default" shall mean the failure of a party to perform any material action or covenant
required by and within the time periods provided herein following notice and opportunity to
cure, as set forth in Section 6.1 [Default] of this Agreement.
"Development Costs" shall mean all the costs and expenses which must necessarily be
incurred in the design, development, construction and completion of the Project, including but
not limited to: predevelopment costs; Participant's overhead and related costs; costs of acquiring
the Site; design and engineering costs; development costs; construction costs; fees payable to
accountants, appraisers, architects, attorneys, biologists, construction managers, engineers,
geologists, hydrologists, inspectors, planners, testing facilities, and other consultants; impact,
development, park, school and other fees and charges imposed by governmental entities as a
condition approval on the Project; costs for obtaining permits and approvals; taxes; assessments;
costs related to testing for and remediation of Hazardous Substances; utility connection fees and
other utility related charges;costs relating to financing including principal, interest, points, fees
and other lender charges; escrow fees and closing costs; recording fees; court costs; costs relating
to insurance; costs relating to title insurance; costs relating to bonds; Development Fees, and all
other costs and expenses of Participant related to the performance of this Agreement.
"Development Fees" shall mean those fees, charges, and exactions imposed by the City
upon the development of the Project on the Site, including, but not limited to, application fees,
processing fees, development fees, impact fees, mitigation fees, park fees, storm drain fees,
sewer fees, and other related charges.
LA#4840-2809-0894 v
11/19/2012 2:26 PM Page 3 of 22
"Effective Date" shall mean the date the Agreement has been formally approved by the
City's governing board and executed by the appropriate authorities of the City and Participant.
"Environmental Review" shall mean the investigation and analysis of the Project's
impacts on the environment as may be required under the California Environmental Quality Act
("CEQA"), Public Resources Code § 21000, et seq., and/or the Project's impacts on any species
of plant or animal listed as a species of concern, a threatened species, or an endangered species,
or habitat therefore, as may be required by the California Endangered Species Act ("CESA"),
Fish and Game Code § 2050, et seq., and/or the U.S. Endangered Species Act ("USESA"), 16
U.S.C. § 1531, et seq., or other applicable California or federal law or regulation.
"Hazardous Substances" shall mean any and all of the following:
(i) any substance, product, waste or other material of any nature whatsoever which is
or becomes listed, regulated, or for which liability arises for misuse, pursuant to the
Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), 42
U.S.C. §9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §1801, et seq.; the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §6901, et seq.; the Toxic
Substances Control Act, 15 U.S.C.S. §2601, et seq.; the Clean Water Act, 33 U.S.C. §1251, et
seq.; the Insecticide, Fungicide, Rodenticide Act, 7 U.S.C. §136, et seq.; the Superfund
Amendments and Reauthorization Act, 42 U.S.C. §6901, et seq.; the Clean Air Act, 42 U.S.C.
§7401, et seq.; the Safe Drinking Water Act, 42 U.S.C. §300f, et seq.; the Solid Waste Disposal
Act, 42 U.S.C. §6901, et seq.; the Surface Mining Control and Reclamation Act, 30 U.S.C.
§1201, et seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. §11001,
et seq.; the Occupational Safety and Health Act, 29 U.S.C. §§655 and 657; the Hazardous Waste
Control Act, California Health and Safety Code ("H.&S.C.") §25100, et seq.; the Hazardous
Substance Account Act, H.&S.C.§25330, et seq.; the California Safe Drinking Water and Toxic
Enforcement Act, H.&S.C. §25249.5, et seq.; the Underground Storage of Hazardous
Substances, H.&S.C. §25280, et ,req.; the Carpenter-Presley-Tanner Hazardous Substance
Account Act, H.&S.C. §25300, et seq.; the Hazardous Waste Management Act, H.&S.C.
§25170.1, et seq.; the Hazardous Materials Response Plans and Inventory, H.&S.C. §25001, et
seq.; the Porter-Cologne Water Quality Control Act, Water Code §13000, et seq., all as they may
from time to time be amended;
(ii) any substance, product, waste or other material of any nature whatsoever which is
or becomes listed, regulated, or for which liability for misuse arises pursuant to any other federal,
state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree due to its
hazardous, toxic or dangerous nature;
(iii) any petroleum, crude oil or any substance, product, waste, or other material of any
nature whatsoever which contains gasoline, diesel fuel or other petroleum hydrocarbons other
than petroleum and petroleum products contained within regularly operated motor vehicles; and
(iv) polychlorinated biphenyls (PCB), radon gas, urea formaldehyde, asbestos, and
lead.
"Litigation Expenses" shall mean all costs and expenses, to the extent reasonable in
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amount, actually and necessarily incurred by a party in good faith in the investigation,
prosecution or defense of an Action or to cure a Default of another party, including, but not
limited to, court costs, filing, recording, and service fees, copying costs, exhibit production costs,
special media rental costs, attorneys fees, consultant fees, fees for investigators, witness fees
(both lay and expert), travel expenses, deposition and transcript costs, and any other costs or
expenses, the award of which a court of competent jurisdiction may determine to be just and
reasonable.
"Lower Income Household" shall mean "lower income households" as that term is
defined and used in Health and Safety Code § 50079.5. A "lower income household" means a
person or family whose income does not exceed eighty percent (80%) of the area median income
for the applicable geographic area of the state, adjusted for family size, and revised annually by
the California Department of Housing and Community Development.
"Local Regulations" shall mean all the provisions of the City's General Plan, the City's
Municipal Code (including but not limited to, all zoning, development, subdivision, and building
standards, regulations, and procedures, and all uniform codes incorporated therein), any
applicable specific plan, the conditions of any applicable map being processed or having been
approved under the Subdivision Map Act (Government Code § 66410, et seq.), any mitigation
measures imposed as a result of Environmental Review for the Project, all as they exist on the
date of this Agreement or as they may thereafter be amended, repealed and reenacted, or
otherwise modified.
"Participant" shall mean North County Connection, a
. The term "Participant" shall, to the extent such is expressly permitted
under this Agreement, include any assignee of, or successor to, the rights and responsibilities of
the Participant under this Agreement.
"Project" shall mean the renovation or purchase by the Participant of the Affordable Unit
located on the Site under the terms and conditions set forth in this Agreement. The Project shall
specifically require, but not be limited to, the items of construction and renovation defined and
described in Attachment "E" [Scope of Project].
"Project Approvals" shall mean any permit, approval, determination, and/or entitlement
required by the City and pertaining to the design, development, construction, and installation of
the Project, including, but not limited to, General Plan amendments, Specific Plan amendments,
zone changes, zone variances, conditional use permits, site development plans, change plans,
planned sign programs, grading permits, building permits, actions under the Subdivision Map
Act, encroachment permits, business licenses and other such approvals as may be required under
the Atascadero Municipal Code, and all other applicable ordinances, codes, policies, and
procedures approved by the City and effective as of the Effective Date of the Agreement.
"Project Plans" shall mean all construction, building, engineering, and architectural
plans, drawings, and diagrams for grading, drainage, traffic, parking, construction and/or
building, landscaping and other plans related to the Project and all designs, diagrams, drawings,
specifications and other representations of or documents associated with the Project Plans.
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"Regulatory Agreement" shall mean that certain agreement executed by Participant and
recorded against the Site containing the covenants and restrictions provided for in this
Agreement referenced as Attachment"D" [Regulatory Agreement].
"Site" shall mean that certain parcel of real property consisting of approximately 2.14
acres located at 8600 and 8580 Atascadero Avenue and commonly known as Assessor's Parcel
Number 056-231-023, as more particularly described in the legal description attached hereto and
incorporated herein by reference as Attachment "F" [Legal Description] and as depicted on the
diagram attached hereto and incorporated herein by reference as Attachment "G" [Site Location].
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises and covenants made by
the parties and contained herein and other consideration, the value and adequacy of which are
hereby acknowledged, the parties agree as follows
ARTICLE 1 - SITE PURCHASE
1.1. Participant shall, at its sole cost and expense, notwithstanding any City Loan
assistance that may be provided by the City under this Agreement, negotiate and complete the
purchase of the Site.
1.2. When Participant and the seller of the Site have opened an escrow (the "Escrow"),
Participant shall inform City of that fact and City shall segregate the amount of the City Loan in
preparation for placing it into the Escrow account.
1.3. City shall, within fifteen (15) days after Participant provides proof that it has
completed the requisites for funding outlined in Section 4.1.2 of this Agreement, deposit in the
Escrow the total amount of the City Loan.
1.4. Participant agrees that if Escrow does not close within ten (10) days of the deposit
of the City Loan proceeds into the Escrow, the City may in its sole discretion request the return
of the funds and the termination of this Agreement.
1.5. Upon close of Escrow and transfer of title to the Site to Participant, Participant
shall begin development of the Project in accordance with Article 2 of this Agreement.
ARTICLE 2 - DEVELOPMENT OF THE PROJECT
2.1. Scope of Development. Participant shall, at its sole cost and expense,
notwithstanding any City Loan assistance that may be provided by the City under this
Agreement, design, develop, and construct the Project on the Site in accordance with the
following provisions:
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2.1.1. Quality. It is the intent of the parties that the Project exhibits the highest
standards of competent design and good workmanship. As such, all work for the Project shall be
undertaken by qualified consultants/contractors.
2.1.2. Project Approvals. Participant shall prepare, file, process applications
for, and obtain all Project Approvals, whether ministerial or discretionary, which the City and/or
any other governmental entity having jurisdiction requires for the Project. Participant agrees to
comply with the Local Regulations and all established procedures and policies of the City's
planning, building, and public works departments regarding the submittal and review of
applications. Participant understands, acknowledges, and agrees that nothing in this Agreement
is, or shall be interpreted to be, an agreement by the City or the City to approve or issue any
permit, approval, or entitlement for the Project. "' '
2.1.3. Affordable Housing. City agrees to assist in the Project by partially
funding the affordable housing unit(s) to be purchased, or renovated on the Site. City shall loan
to Participant, on the terms and conditions set forth in this Agreement, an amount not to exceed
One Hundred Thousand Dollars ($100,000.00) toward the cost of providing the affordable
housing unit. This assistance shall be provided out of the City's affordable housing in-lieu fee
fund. In consideration for receipt of these funds, Participant shall record against the Site the
Affordable Rent housing covenants and restrictions as part of the Regulatory Agreement required
by Section 3.1 of this Agreement.
2.1.4. Tenant Parking. Participant shall provide reserved off street parking for
the affordable housing unit in conformance with the requirements of the zoning ordinance. In no
case shall fewer than one reserved, off-street parking space be provided for each housing unit.
Participant shall include and enforce a provision in its rental agreement with each tenant that the
tenant will not park any vehicles or trailers on City streets.
•. 2.1.5. Development Costs. Notwithstanding any assistance to be provided by
the City under this Agreement, Participant shall be solely responsible for payment of all
Development Costs.
2.1.6. Development Fees. Notwithstanding any assistance to be provided by the
City under this Agreement, Participant shall be solely responsible for payment of all
Development Fees.
2.1.7. Compliance with Prevailing Wage Law. Participant acknowledges that
the construction and construction-related activities for the Project may be subject to the
California Prevailing Wage Law and Participant is required to pay the general prevailing wage
rates of per diem wages and overtime and holiday wages determined by the Director of the
Department of Industrial Relations under Section 1720, et seq., of the California Labor Code for
all covered work performed on the Project. The Director's determination of prevailing rates is on
file with, and open to inspection at, the office of the City Clerk and is referred to and made a part
hereof. Participant acknowledges the possibility of wage increases during construction of the
Project and that Participant and/or its contractors shall be responsible for paying such increases.
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Participant acknowledges that it is aware of and shall comply with, and that its contractors shall
be aware of and shall comply with, the following sections of the California Labor Code: (i)
Section 1775 prescribing sanctions for failure to pay prevailing wage rates; (ii) Section 1776
requiring the making, keeping and disclosing of detailed payroll records and prescribing
sanctions for failure to do so; (iii) Section 1777.5 prescribing the terms and conditions for
employing registered apprentices; (iv) Section 1810 providing that eight hours of labor shall be
a day's work; and (v) Section 1813 prescribing sanctions for violations of the provisions
concerning eight-hour work days and forty-hour work weeks.
2.2. Schedule of Performance. Participant shall undertake, commence, and thereafter
diligently pursue the Project to Completion as provided herein according to the Schedule of
Performance attached hereto as Attachment "E" [Scope of Projectl:
2.2.1. Amendments to Schedule. The Schedule of Performance is subject to
revision from time-to-time as mutually agreed upon in writing by Participant and the City
Manager. In the event that Participant desires a change to the Schedule of Performance, it shall
submit a written request to the City specifying the nature of the change, the reason for the
change, that the change is not due to the negligence or Default of the Participant, and evidence
that the change is reasonably necessary to implement this Agreement. The City Manager shall
either approve or disapprove the request in writing within ten (10) days of its receipt. Extensions
of time required by acts of God and other force majeure events shall be controlled by Section 7.2
[Enforced Delays; Extension of Times] of this Agreement.
2.3. Compliance with Laws. Participant shall design, develop, and construct the
Project in compliance with all applicable federal and state laws, regulations, and rules, and all
Local Regulations (including but not limited to the obtaining of building permits for all
construction related work as required by the California Building Code).
ARTICLE 3 - USE AND MAINTENANCE OF THE SITE
3.1. Regulatory Agreement. Participant covenants and agrees that the provisions set
forth in this Article 3 [Use and Maintenance of the Site] of the Agreement shall be incorporated
into a Regulatory Agreement in a form substantially similar in all material respects to the form
set forth in Attachment "D". The Regulatory Agreement shall be recorded against the Site and
shall have provisions addressing the Site and Affordable Rent provisions. The Regulatory
Agreement shall run with title to the Site and shall be binding upon the Participant, its successors
and its assigns throughout the term of the Operating Covenant.
3.2. Management of Site. The unique qualifications and expertise of Participant are
of particular significance to the success of the Project and long-term viability of the Site. It is
because of this expertise and experience that the City has entered into this Agreement with
Participant. Participant therefore agrees that it will continue to own and manage the Site in a
professional manner. Participant agrees to require and enforce, as a condition of renting
Affordable Unit, that Tenants will not create any nuisances including but not limited to noise,
parking on City streets, outdoor storage of property, interfering with commercial businesses or
the accumulation of solid waste. Participant further agrees to address any complaints against
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Tenants in a timely and professional manner. As a condition of this agreement, the City may
require Participant to hire a third party management company if nuisance issues are not resolved
to the satisfaction of the City.
3.3. Affordable Housing Covenants.
3.3.1. Affordable Rent Unit. In exchange for the City Loan provided in Section
4.1.1, Participant covenants and agrees that the Affordable Unit in the residential portion of the
Site shall only be leased to a person or family qualifying as Lower Income. Maximum rents
shall not exceed the City's adopted standards for Lower Income rental rates as per Attachment A
[Calculation of Affordable Rents].
3.3.2. Affordable Unit Reporting. Following completion of renovation, the
Participant shall rent the Affordable Unit to Lower Income Households at Affordable Rents
calculated in compliance with Attachment "A" [Calculation of Affordable Rents] attached hereto
and the Regulatory Agreement. Participant shall refer potential tenants to the Administering
Agency for income certification and not enter into a binding rental agreement with a tenant until
income and asset certification has been completed, and Participant has been informed in writing
by the Administering Agency that the potential tenant is income-eligible to occupy the rental
Affordable Unit. Participant shall submit a copy of rental agreement and approval certificate to
the City upon rental of Affordable Unit. Thereafter, rental certification shall be submitted by
February 1 of each year on a form specified by the City and certified as correct under penalty of
perjury by Participant. Participant shall retain all records related to compliance with obligations
under this Agreement, the Ordinance, and the Inclusionary Policy for a period not less than five
(5) years from the date of origination of such records, and make them available to the City for
inspection and copying on five (5) business days' written notice. Participant shall permit the City
or others designated by the City to inspect the Rental Affordable Unit Property to monitor
compliance with this Agreement or the Regulatory Agreement following two (2) business days'
written notice to Participant.
3.3.3. Recordation of Affordability Covenant. The Lower Income rental
restrictions on the unit shall remain in place for a period of fifty-five (55) years and shall be
recorded against the Site as part of the Regulatory Agreement required by Section 4.1.
3.3.4. Eviction and Reletting of Unit. Notwithstanding this rental restriction,
the covenant shall not prohibit Participant from exercising any of its rights to evict a tenant and
reclaim possession of any Affordable Unit as may be allowed under the terms of its recorded
security instruments and the law. In such event, Participant shall use its best efforts to timely
complete any eviction and/or any unlawful detainer action and to relet said unit at an Affordable
Rent to a person or family qualifying as a Lower Income Household.
3.4. Maintenance of the Site. The Participant covenants and agrees for itself, its
tenants, its successors and assigns, and any successor-in-interest to the Site, or part thereof, that
it will, at its sole cost and expense: (i) maintain the appearance and safety of the Site (including
all improvements, fixtures, and landscaping) in good order, condition, and repair, and free from
the accumulation of trash, waste materials, and other debris; (ii) remove all graffiti placed upon
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the Site (including all improvements, fixtures, and landscaping) within seventy-two (72) hours of
its appearance; (iii) maintain in good order, condition and repair, properly functioning landscape
irrigation systems on the Site; and (iv) remove and promptly replace all dead or diseased
landscaping material on the Site. In the event of a default of this covenant and of a failure to
cure the default within fifteen (15) days after service of a written notice by City, City or its
agents, employees and contractors, shall have the right to enter upon the Site without further
notice and to take such actions as are necessary to cure the default. Participant shall reimburse
City for all costs associated with cure of the default (including but not limited to, staff services,
administrative costs, legal services, and third-party costs), within fifteen (15) days after service
of a written notice by City. If Participant fails to pay within the time provided, such costs shall
be a lien upon the Property, as provided by California Civil Code § 2881. The City may enforce
and foreclose such lien in any manner legally allowed.
3.5. Taxes and Encumbrances. Participant shall pay, when due: (i) all ad valorem
property taxes imposed on the Site under Article XIII A of the California Constitution; (ii) all
special taxes imposed on the Site; (iii) all special assessments imposed on the Site; (iv) all taxes
payable under the California Bradley-Burns Uniform Local Sales & Use Tax Law, Revenue and
Taxation Code § 7200, et seq.; and (v) all other taxes, assessments, fees, exactions, or charges,
any portion of which are allocated to, or received by, the City or the City and which are imposed
due to the ownership, use, or possession of the Site or interest therein or due to the construction
or operation of the Project. Upon failure to so pay, Participant shall remove any lien, levy, or
encumbrance made on the Site within ninety (90) days of the attachment of such. Participant
hereby waives any right it may have to contest the imposition of such taxes, assessments, fees,
exactions, or charges against the Site or upon the construction or operation of the Project which
are levied by the City, the County of San Luis Obispo, or the State of California, or any special
district of any of the foregoing.
3.6. Compliance with Laws. The Participant covenants and agrees for itself, its
successors and assigns and any successor-in-interest to the Project and/or Site or part thereof,
that it shall operate and maintain the Site and Project in conformity with the Local Regulations,
the Regulatory Agreement, and all applicable state and federal laws, including all applicable
labor standards, disabled and handicapped access requirements, including without limitation, the
Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. and the Unruh Civil Rights Act,
California Civil Code § 51, et seg.
3.7. Effect of Violation. The City is deemed the beneficiary of the terms and
provisions of this Agreement and for the purposes of protecting the interest of the community
and other parties, public or private, in whose favor and for whose benefit this Agreement has
been provided. The City shall have the right, if the Agreement or covenants are breached, to
exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other
proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries
of the Agreement and covenants may be entitled.
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ARTICLE 4 - CITY ASSISTANCE
4.1. Method of Assistance. Subject to and conditioned upon Participant's satisfaction
and continued compliance with the provisions of Section 4.3 [Conditions of Providing
Assistance] of this Agreement, the City agrees to provide Participant with certain assistance
related to the Project as follows:
4.1.1. Funding. The City shall loan to Participant a City Loan in an amount not
to exceed One Hundred Thousand Dollars and No Cents ($100,000.00) for the creation of the
Affordable Housing Unit.
4.1.2. Requisites for Funding. Prior to City being obligated to advance any
funds to Participant, Participant shall be required to provide the following:
4.1.2.1. Proof of funding the remainder of the purchase price of the
Site;
4.1.2.2. An appraisal of the Site by a California licensed appraiser
chosen by Participant and approved by City in its reasonable discretion;
4.1.2.3. A preliminary title report of the Site from a title company
chosen by Participant and approved by City in its reasonable discretion;
4.1.2.4. Execution of Regulatory Agreement, Deed of Trust and
Promissory Note and deposit of same into Escrow as set forth in Section 1 of this Agreement.
4.1.2.5. Execution of Escrow instructions by Participant and the seller
that require, among other things to be decided between Participant and the seller, that (a)
should the Escrow not close within ten (10) days of the City Loan proceeds being placed into
Escrow the Escrow agent shall return the City Loan proceeds to City upon City's request.
4.1.2.6. Timing of Funding. Upon receipt and verification by City of
the requisites for funding set forth in Section 4.1.2, Participant shall request in writing that the
City disburse proceeds of the City Loan into the escrow as set forth in Section 1 of this
Agreement. City shall disburse the proceeds within fifteen (15) days of the receipt of
documentation.
4.2. Security for City Loan. Participant shall make and give to the City the
following types of security for the City Loan :
4.2.1. Reimbursement. Participant covenants and agrees that in the event that
Participant is in Default of this Agreement, which Default remains uncured after the period
provided for cure in Section 7.1 [Default] of this Agreement, Participant shall repay to the City
on demand all City Loan proceeds paid or advanced to Participant by the City under Section 4.1.
[Method of Assistance], in addition to all Contingent Interest as determined on the date that
demand is made by the City, without further notice or demand by the City.
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4.2.2. Promissory Note. Participant's obligation to reimburse the City for City
Loan proceeds paid or advanced by the City to Participant under Section 4.1 [Method of
Assistance] shall be further evidenced by a promissory note having a form and content the same
in all material respects to the promissory note attached hereto and incorporated herein by
reference as Attachment `B" (the "Note") and shall provide:
4.2.2.1. That neither principal nor interest shall be payable under the
Note for the term of 55 years; or until such time as Participant sells or otherwise transfers the
Site and that the City shall have first right of refusal to purchase the Site prior to any voluntary
or involuntary transfer of a fee interest by Participant per Sections 8 through 12 of Regulatory
Agreement;
4.2.2.2. That the interest due on the Note shall be Contingent Interest
reflecting the City's equity share of the Site based on the appraised fair market value of the Site
as of the disbursement of the City Loan;
4.2.2.3. That Participant may at any time, without selling or otherwise
transferring the Site, decide to repay the City Loan amount and that any such repayment will
trigger the requirement that Participant also repay the Contingent Interest;
4.2.2.4. That any Default of this Agreement by Participant which
remains uncured after the period provided for cure under Section 7.1 [Default] of this
Agreement, shall be a breach of the Note in which event the entire outstanding principal
balance of the Note plus accrued Contingent Interest shall become due and payable by
Participant on demand by the City;
4.2.2.5. That the Note shall be secured by a deed of trust and
assignment of rents having a form and content the same in all material respects to the deed of
trust attached hereto and incorporated herein by reference as Attachment "C" ("Deed of
Trust"). The Deed of Trust shall provide that, by incorporating this Agreement by reference, it
is subordinate and junior only to prior encumbrances and subsequent encumbrances as may
approved by the City. The rights established in this Section and under the Deed of Trust are
not intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any
other right, power and remedy authorized herein or now or hereafter existing at law or in
equity. These rights are to be interpreted in light of the fact that the City will have provided
public funds to assist the development of a private Project.
4.3. Conditions on Assistance. The following are conditions upon the City's
obligation to provide the City Loan assistance specified in Section 4.1 [Method of Assistance]:
4.3.1. Limit on Assistance. Except as is expressly provided for in Section 4.1
[Method of Assistance], the City shall have no obligation to provide Participant with additional
assistance, to make any other contribution toward the Project, to pay any Development Cost or
Development Fee, or to carry-out or complete the Project or any phase thereof. Nothing in this
Agreement is or shall be construed to be a pledge or commitment by the City of any specific tax
revenue, grant funds, or other specific monies, funds, or revenues to which the City is in
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possession of or may become entitled to receive. This Agreement does not, and shall not be
construed to, grant or vest the Participant with any right to make a claim or impose a lien against
any specific tax revenue, grant funds, or other specific monies, funds, or revenues to which the
City is in possession of or may become entitled to receive. The City, in its sole discretion, may
use any revenue, funds, or monies available to the City, as may be allowed for by law, to provide
the Assistance provided under this Agreement;
4.3.2. Development of the Project. Participant's commencement and diligent
construction of the Project to Completion within the time provided and otherwise in strict
compliance with Article 1 [Development of the Project] of this Agreement;
4.3.3. Use of the Site. Participant's compliance with the covenants and
agreements made under Article 2 [Use and Maintenance of the Site] of this Agreement;
4.3.4. Insurance Policies. Participant delivering to the City the insurance
policies and evidence of insurance as required under Article 5 [Insurance] of this Agreement
prior to the City's payment or advancement of assistance to Participant; n ; „
4.3.5. Payment of Taxes. Participant's payment, when due, of all ad valorem
property taxes levied against the Site under Article XIII A of the California Constitution, as well
as any special assessments or special taxes levied against the Site (collectively "Property
Taxes"), payment of all taxes payable under the California Bradley-Burns Uniform Local Sales
& Use Tax Law, Revenue and Taxation Code §7200, et seq., and payment of all other taxes, any
portion of which is allocated to, or received by, the City.
.t......
ARTICLE 5 - INSURANCE k
5.1. Participant's Liability Insurance. Participant shall, at its sole expense, obtain
and keep in force until the expiration of term of the Operating Covenant, a policy of commercial
general liability insurance in an occurrence form providing for broad form property damage
coverage, broad form contractual coverage, personal injury, bodily injury, and advertising injury
coverage with employee exclusion as to each named insured deleted, and products and complete
operations coverage, insuring Participant, and naming City as an additional named insured,
against any liability arising out of or in connection with Participant's possession and use of the
Site and all improvements thereon, City's activities in connection with the Project, or any other
claim arising out of or relating to the Project or work on the Site. Such insurance policy shall
have (a) a combined single limit for both bodily injury or death in an amount not less than One
Million Dollars ($1,000,000.00), and (b) a limit for both bodily injury or death in one accident or
occurrence or for property damage in an amount not less than One Million Dollars
($1,000,000.00), which amounts shall be increased from time to time as reasonably required by
City. Such insurance policy and each portion thereof shall be in the broadest and most
comprehensive form available in the market at the time such policy is issued or amended. The
policy shall insure performance by Participant of the indemnity provisions of Section 6.1
[General Indemnity] of this Agreement. The limits of said insurance shall not limit the liability
of Participant hereunder.
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5.2. Participant's Casualty Insurance. Participant shall, at its sole expense, obtain
and/or cause to be maintained by any tenant on the Site, and shall keep in force on all buildings
and improvements constructed as part of the Project until the expiration of term of the Operating
Covenant, a policy of standard "all risk" fire and extended coverage insurance, with vandalism
and malicious mischief endorsements, to the extent of one hundred percent (100%) of full
replacement value against "all risks of physical loss" including without limitation a guaranteed
replacement cost and code compliance coverage endorsement (including without limitation, if
recommended by a seismic engineer retained by City, earthquake coverage with deductible
related thereto of no more than ten percent (10%) of the replacement value of the all buildings
and improvements constructed as part of the Project, including boiler and machinery insurance
coverage, heating, air conditioning equipment, and other equipment of such nature), and
insurance against loss or damage to personal property located on the Site by fire and other
hazards covered by such insurance (without any deductible clause unless approved in writing by
City). In the event any tenant on the Site fails to maintain coverage to the extent of one hundred
percent (100%) of full replacement value for the Site, then Participant shall maintain such
additional or gap insurance to satisfy the requirements of this Section. All such insurance shall
be payable to City. Such insurance policy and each portion thereof shall be in the broadest and
most comprehensive form available in the market at the time such policy is issued or amended.
Such policy shall, if required by City, contain an agreed value clause sufficient (as determined by
City) to eliminate any risk of City's coinsurance.
5.3. Worker's Compensation Insurance. Participant shall, at its expense, obtain and
keep in effect (or cause any contractor to procure and keep in effect), Worker's Compensation
Insurance (including employer's liability in an amount satisfactory to City and if applicable,
insurance covering claims of workers against employers arising under Federal law) covering all
employees of Participant and any contractor and, if required under applicable law, any
subcontractor engaged in work on, or with respect to, the Property, in such amount as is
reasonable satisfactory to City and in the minimum amount for one (1) person of not less than
One Million Dollars ($1,000,000.00), and in the minimum amount for one (1) accident or
occurrence of not less than Five Hundred Thousand Dollars ($500,000.00).
5.4. Insurance Policies. All of Participant's insurance shall be primary insurance
written in a form satisfactory to City by companies licensed in California acceptable to City
(which must be Class IX A or better as rated by Best's Insurance Reports) and shall specifically
provide that such policies shall not be subject to cancellation or other change except after at least
thirty (30) days prior written notice of City. Copies of the policies, together with satisfactory
evidence of payment of premiums shall be deposited with City as provided herein, and upon each
renewal of such policies, which shall be effected not less than thirty (30) days prior to the
expiration date of the term of such coverage.
5.5. Other Insurance Provisions. Said policy or policies, as applicable, shall
combine aggregate limits for Bodily Injury, Property Damages, Personal Injury, and Advertising
Injury, in the amounts specified above, that apply specifically to and can only be exhausted in
connection with claims arising out of or relating to the Property. If any claim, event, or loss
occurs during the policy period which will or may decrease the aggregate amount of insurance
coverage available under the policy, Participant shall immediately secure additional coverage
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sufficient to provide total aggregate limits at least equal to the amounts set forth above on a
going forward basis. Should any part of the coverage required above be provided by "excess" or
"umbrella" policies, those policies shall specifically provide that the coverage under those
policies shall "drop down" as to both defense and indemnity obligations in the event of
insolvency of the primary or underlying carrier. Such "excess" or "umbrella" policies shall also
contain all the other provisions required by this Agreement.
ARTICLE 6 - INDEMNITY
6.1. General Indemnity. Except as to the sole negligence, active negligence or
willful misconduct of the City, Participant expressly agrees to, and shall, indemnify, defend,
release, and hold the City and its respective officials, officers, employees, agents, and contractors
harmless from and against any Action, liability, loss, damage, entry, judgment, order, lien, and
Costs and Expenses which arises out of, or are in any way related to, any act or omission of
Participant, or its officers, directors, employees, agents, or contractors, connected with the
performance under this Agreement, the obligations set forth in Section 2.1.9 [Compliance with
Prevailing Wage Law], the construction, use, or operation of the Project or Site, notwithstanding
that the City may have benefited therefrom, or any challenge to this Agreement. This Section
shall apply to any acts or omissions, willful misconduct or negligent conduct, whether active or
passive, on the part of Participant's officers, directors, employees, agents and contractors. The
Parties expressly agree that any payment, or Costs and Expenses the City incurs or makes to, or
on behalf of, an injured employee under the City's self administered workers' compensation, is
included as a loss or Costs and Expenses for the purpose of this Section. The City shall not be
responsible for any acts, errors or omissions of any person or entity except the City and its
officers, agents, servants, employees or contractors. The Parties expressly agree that the
obligations of Participant under this Section shall survive the expiration or early termination of
the Agreement.
6.2. Hazardous Substances Indemnity. Participant expressly agrees to indemnify,
defend, and hold the City and its officials, officers, employees, agents, and contractors harmless
from and against any Action, liability, loss, damage, entry, judgment, order, lien, encumbrance,
and Costs and Expenses that, foreseeably or unforeseeably, directly or indirectly, arises from, or
is in any way related to, the release, treatment, use, generation, transportation, storage, or
disposal in, on, under, to, or from the Site of any Hazardous Substances by Participant or its
officers, directors, employees, agents, and contractors. For the purposes of this Section, "Costs
and Expenses" include, but are not limited to, the cost of any necessary, ordered, adjudicated, or
otherwise required remediation or removal of Hazardous Substances, any cost of repair of
improvements on the Site or surrounding property necessitated by or related to the remediation
or removal of Hazardous Substances, the cost of any tests, samples, studies, investigations, or
other preparation reasonably undertaken in preparation or furtherance of remediation or removal
of Hazardous Substances, and the cost of preparing plans for the remediation or removal of
Hazardous Substances. Notwithstanding the foregoing, Participant expressly agrees to, at its sole
expense, and with legal counsel of the City's choice, defend the City and its officials, officers,
employees, agents, and contractors in any Action in which the City or its officials, officers,
employees, agents, and contractors become or may become involved as a result of the release,
treatment, use, generation, transportation, storage, or disposal in, on, under, to, or from the Site
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of any Hazardous Substances by Participant or its officers, directors, partners, employees, agents,
and contractors. Participant's obligations under this Section shall survive the Termination of this
Agreement.
ARTICLE 7 - DEFAULT AND REMEDIES
7.1. Default. Either party's failure or unreasonable delay to perform any term or
provision of this Agreement constitutes a Default of this Agreement. In the event of a Default,
the injured party shall give written "Notice of Default" to the defaulting party, specifying the
Default. Delay in giving such notice shall not constitute a waiver of the Default. If the
defaulting party fails to cure the Default within thirty (30) days after receipt of a notice
specifying the Default, or, if the Default is of a nature that cannot be cured within thirty (30)
days, the defaulting party fails to commence to cure the Default within said thirty (30) days and
thereafter diligently prosecute such cure to completion, then the defaulting party shall be liable to
the injured party for any and all damages caused by such Default, unless otherwise provided for
by this Agreement.
7.2. No Waiver. Failure to insist on any one occasion upon strict compliance with
any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any rights or powers hereunder
at any one time or more times be deemed a waiver or relinquishment of such other right or power
at any other time or times.
7.3. Specific Performance. If a Default under this Agreement is not fully cured by
the defaulting party as provided in Section 7.1 [Default], the non-defaulting party may, at its
option, thereafter commence an action for specific performance of the terms of this Agreement.
7.4. Legal Actions. In addition to any other rights and remedies any party may
institute a legal action to require the cure of any default and to recover damages for any default,
or to obtain any other remedy consistent with the purpose of this Agreement. The following
provisions shall apply to any such legal action:
7.4.1. Jurisdiction and Venue. Legal actions must be instituted and maintained
in the Superior Court of the County of San Luis Obispo, State of California, , or, if appropriate,
in the United States District Court for the Central District of California. Participant specifically
waives any rights provided to it pursuant to California Code of Civil Procedure §394 and any
federal statute or rule of similar effect.
7.4.2. Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
7.4.3. Attorney's Fees. In the event either party commences an Action against
the other party which arises out of a Default of, breach of, failure to perform, or that is otherwise
related to, this Agreement, then the Prevailing Party (as defined herein) in the Action shall be
entitled to recover its Litigation Expenses (as defined herein) from the other party in addition to
whatever relief to which the prevailing party may be entitled. For purposes of this section,
"Litigation Expenses" includes all Costs and Expenses, to the extent such are reasonable in
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amount, that are actually and necessarily incurred in good faith by the Prevailing Party directly
related to the Action. For the purposes of this section, "Prevailing Party" shall have the meaning
ascribed in §1032(a)(4) of the California Code of Civil Procedure.
7.5. Rights and Remedies are Cumulative. The rights and remedies of the Parties
are cumulative, and the exercise by a party of one or more of its rights or remedies shall not
preclude the exercise by it, at the same or different time, of any other rights or remedies for the
same Default or any other Default by another Party.
7.6. Termination by City. The City may terminate this Agreement upon the
occurrence of any of the following events:
7.6.1. Participant (or any successor in interest) Assigns or attempts to Assign the
Agreement or any rights therein or in the Site in violation of this Agreement;
7.6.2. Participant (or any successor in interest) becoming insolvent or Participant
(or any successor in interest) voluntarily or involuntarily making an assignment or transfer for
the benefit of creditors other than the City, and/or the voluntary or involuntary appointment of a
receiver, custodian, liquidator or trustee of Participant's property and/or the Site;
7.6.3. Participant is otherwise in Default of this Agreement and fails to cure such
Default within the time set forth in Section 7.1 [Default] hereof.
If, after the occurrence of any of the above-entitled events, the City elects, in its
sole discretion, to terminate this Agreement, then all rights of Participant and any person or
entity claiming by or through Participant arising under this Agreement or with regard to the Site
as may arise under this Agreement shall immediately cease and be terminated, except that any
obligations of the Participant to indemnify or reimburse the City or the City shall continue in full
force and effect and the City shall have all of the remedies to enforce a breach or a Default of
this Agreement as may be provided hereunder and under the law.
7.7. Termination by Participant. In the event that Participant is not in default under
this Agreement and the City is otherwise in default and which is not cured within the time set
forth in Section 7.1 [Default] hereof, and any such failure is not cured within the applicable time
period after written demand by Participant, then this Agreement may, at the option of Participant,
be terminated by written notice thereof to the City. From the date of the written notice of
termination of this Agreement by Participant to the City and thereafter, this Agreement shall be
deemed terminated and there shall be no further rights or obligations between the parties, except
that Participant may pursue any remedies it has hereunder.
ARTICLE 8 - GENERAL PROVISIONS
8.1. No Excuse for Changes in Economic Conditions. Participant agrees that
foreseeable or unforeseeable future changes in economic or market conditions may make
performance of its obligations and covenants under this Agreement impracticable, difficult or
economically infeasible. However, Participant expressly assumes the risk of foreseeable and
unforeseeable future changes in economic and general market conditions and expressly agrees
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that such changes shall not excuse or delay the strict performance of Participant's obligations and
covenants hereunder. Without limiting the generality of the foregoing, Participant agrees that
future foreseeable or unforeseeable changes in economic and market conditions shall not operate
to relieve Participant of its (or its successors) obligation to abide by the terms, conditions, and
Covenants of this Agreement.
8.2. Enforced Delays; Extension of Times. In addition to specific provisions of this
Agreement, performance by either party hereunder shall not be deemed to be in Default, and all
performance and other dates specified in this Agreement shall be extended, where delays or
Defaults are due to: litigations challenging the validity of this transaction or any element thereof
or the right of either party to engage in the acts and transactions contemplated by this
Agreement; inability to secure necessary labor materials or tools; delays of any contractor, sub-
contractor or supplier; or withdrawal of financing not caused by any act or omission of
Participant; war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts
of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of
transportation; governmental entity (other than the acts of failures to act of the City which shall
not excuse performance by the City); or any other causes beyond the control or without the fault
of the party claiming an extension of time to perform. Notwithstanding anything to the contrary
in this Agreement, an extension of time for any such cause shall be for the period of the enforced
delay and shall commence to run from the time of the commencement of the cause, if notice by
the party claiming such extension is sent to the other party within forty-five (45) days of the
commencement of the cause.
8.3.Tax Consequences.
8.3.1. Participant understands and acknowledges that it may experience adverse
federal, state, and/or local tax consequences resulting from or related to the performance of this
Agreement. Participant acknowledges and agrees that City is in no manner responsible or liable
for any of Participant's federal, state, or local tax liabilities arising out of, or in any way related
to, this Agreement.
8.3.2. Participant acknowledges that performance of this Agreement may create a
taxable possessory interest in real or personal property and that Participant will be responsible
for the payment of any and all tax upon such possessory interest. Participant expressly agrees
that by inclusion of this Section in the Agreement, City has satisfied all of its obligations under
Revenue and Taxation Code § 107.6. Participant hereby waives, releases and holds City and
City harmless from any right to damages which may now or in the future accrue to Participant
against City or City under Revenue and Taxation Code § 107.6 or such comparable section of the
United States Internal Revenue Code in any way relating to this Agreement.
8.3.3. Participant acknowledges that neither City nor any elected official, officer,
employee, agent, or consultant thereof has provided Participant with any tax, legal, accounting,
or other advice or opinions, or made any representations or warranties, concerning the tax
consequences, legal effect, financial effect, or other effects that performance of the Agreement
may have on Participant.
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8.3.4. Participant acknowledges that it has been represented in this transaction by
Participant's own independent advisors, including, but not limited to, attorneys, accountants,
and/or financial consultants. Participant represents and warrants that it is entering into this
Agreement based solely upon its own independent investigation, conducted with due diligence,
of the facts and possible effects of this Agreement on Participant.
8.4. Non-liability of City Officials and Employees. No board member, official,
consultant, attorney, or employee of the City shall be personally liable to Participant, or any
successor, or assign, or any person claiming under or through them, in the event of any default or
breach by the City or for any amount which may become due to Participant or to its successor, or
on any obligations arising under this Agreement.
8.5. Conflicts of Interest. No board member, official, consultant, attorney, or
employee of the City shall have any personal interest, direct or indirect, in this Agreement nor
shall any such member, official or employee participate in any decision relating to this
Agreement which affects his or her personal interests or the interests of any corporation,
partnership or association in which he or she is, directly or indirectly, interested.
8.6. Warranty Against Payment of Consideration for Agreement. Participant
represents and warrants that it has not paid or given, and will not pay or give, any third party any
money or other consideration for obtaining this Agreement, other than payments to attorneys or
consultants retained by Participant to assist it in the negotiation of this Agreement, excepting
however, any contributions which this Agreement requires Participant to make to the Project.
8.7. No Third Party Beneficiaries. This Agreement and the Regulatory Agreement
are for the sole and exclusive benefit of the City and Participant. No other parties or entities are
intended to be, or shall be considered, a beneficiary of the performance of any of the parties_
obligations under this Agreement.
8.8. Integration. This Agreement consists of pages 1- 22, inclusive, and Attachments
attached hereto and incorporated herein by this reference, which constitute the entire
understanding and agreement of the parties and supersedes all negotiations or previous
agreements between the parties with respect to all or any part of the subject matter hereof.
8.9. Recitals and Definitions. The Recitals and Definitions set forth at the beginning
of this Agreement are a substantive and integral part of this Agreement and are incorporated by
reference in the Operative Provisions of this Agreement.
8.10. Titles and Captions. Titles and captions are for convenience of reference only
and do not define, describe or limit the scope or the intent of this Agreement or any of its terms.
References to section numbers are to sections in this Agreement unless expressly stated
otherwise.
8.11. Interpretation. The City and Participant acknowledge that this Agreement is the
product of mutual arms-length negotiation and drafting and each represents and warrants to the
other that it has been represented by legal counsel in the negotiation and drafting of this
Agreement. Accordingly, the rule of construction, which provides the ambiguities in a document,
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shall be construed against the drafter of that document shall have no application to the
interpretation and enforcement of this Agreement. In any action or proceeding to interpret or
enforce this Agreement, the finder of fact may refer to such extrinsic evidence not in direct
conflict with any specific provision of this Agreement to determine and give effect to the
intention of the parties hereto.
8.12. Severability. Each provision, term, condition, covenant, and/or restriction, in
whole and in part, in this Agreement shall be considered severable. In the event any provision,
term, condition, covenant, and/or restriction, in whole and/or in part, in this Agreement is
declared invalid, unconstitutional, or void for any reason, such provision or part thereof shall be
severed from this Agreement and shall not affect any other provision, term, condition, covenant,
and/or restriction, of this Agreement and the remainder of the Agreement shall continue in full
force and effect.
8.13. Amendments to Agreement. Any amendments to this Agreement must be in
writing and signed by the appropriate authorities of the City and Participant.
8.14. Administration. This Agreement shall be administered and executed by City's
City Manager, or his or her designated representative, following approval of this Agreement by
City's city council. City shall maintain authority of this Agreement through the City Manager
(or his or her authorized representative). The City Manager shall have the authority to issue
interpretations and to make minor amendments to this Agreement on behalf of City as provided
in Section 7.13 [Amendments to Agreement]. All other changes, modifications, and
amendments shall require the prior approval of City's governing board.
8.15. Communications Between the Parties. Formal notices, demands and
communications between the parties shall be given in writing and personally served or
dispatched by registered or certified mail, postage prepaid, return receipt requested, to the
principal offices of the parties, as designated in this Section, or telefaxed to the facsimile number
listed below followed by dispatch as above described. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as either party may
from time to time designate by mail as provided in this Section. Any such notice shall be deemed
to have been received (i) upon the date personal service is effected, if given by personal service,
(ii) upon the expiration of one (1) business day, if telefaxed, or (iii) upon the expiration of three
(3) business days after mailing, if given by certified mail, return receipt requested, postage
prepaid.
If notice is to be made to the City:
City of Atascadero
Attn: City Manager
6907 El Camino Real
Atascadero, California 93422
Facsimile transmission may be made to: (805) 461-7612
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If notice is to be made to Participant:
North County Connection
Attn: ?
8600 Atascadero Avenue
Atascadero, California 93422
Facsimile transmission may be made to:
8.16. Ceremonies. To ensure proper protocol and recognition of the City Council
Members, Participant shall cooperate with the City and City staff in the organization or any
project-related groundbreakings, grand openings or any such inaugural events/ceremonies
sponsored by Participant celebrating the development, which is the subject of this Agreement.
8.17. Computation of Time. The time in which any act is to be done under this
Agreement is computed by excluding the first day and including the last day, unless the last day
is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall
mean all holidays as specified in Government Code § 6700 and § 6701. If any act is to be done
by a particular time during a day, that time shall be Pacific Standard Zone time.
8.18. Authority. The individuals executing this Agreement on behalf of Participant
and the instruments referenced on behalf of Participant represent and warrant that they have the
legal power, right and actual authority to bind Participant to the terms and conditions hereof and
thereof.
8.19. Counterpart Originals. This Agreement may be executed in duplicate originals,
each of which is deemed to be an original.
8.20. Effective Date of Agreement. This Agreement shall not become effective until
the date it has been formally approved by the City's City Council and executed by the
appropriate authorities of the City and Participant.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first-above written.
CITY:
CITY OF ATASCADERO
By:
Rachelle Rickard
Administrative Services Director
PARTICIPANT:
NORTH COUNTY CONNECTION
By:
John Roland Dearhart
I Chairperson
George H. Rowland III
Its: Treasurer
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ATTACHMENT A
CALCULATION OF AFFORDABLE RENT
The Affordable Rent for Rental Affordable Units shall be calculated using the procedures and
formulas described below or per the San Luis Obispo County Affordable Housing Standards as
issued on a monthly basis by County of San Luis Obispo.
The current City of Atascadero Moderate, Lower, and Very Low Income Limits as established
pursuant to the Inclusionary Policy shall be used in these calculations.
1. Determine the area median income for a household size that is one person larger
than the number of bedrooms in the Affordable Rental Unit.
2. Multiply the income limit as follows to obtain the annual housing allowance;
Lower Income: 30% of 80% of the area median income, adjusted
for household size appropriate to the unit.
3. Divide the annual housing allowance determined in the previous step by twelve
(12) to determine the monthly housing allowance;
4. Calculate the average monthly cost of utilities (excluding telephone) and all
mandatory fees charged for use of the property.
5. Subtract the amount calculated in Step 4 from the monthly housing allowance
calculated in Step 3 to compute the Affordable Rent.
ATTACHMENT `B"
PROMISSORY NOTE SECURED BY DEED OF TRUST
Borrower: North County Connection Lender: City of Atascadero
8600 Atascadero Avenue 6907 El Camino Real
Atascadero, California 93422 Atascadero, California 93422
$100,000.00 . 2012 Atascadero, California
1. For value received, North County Connection (the "Borrower"), promises to pay to City
of Atascadero, a public body, corporate and politic (the "City"), or order, at City's office
located at the above address, or at such other place as City from time to time may
designate, the principal sum One Hundred Thousand Dollars and no cents ($100,000.00)
(the "Maximum Loan Amount"), or such lesser amount as may be advanced under this
promissory note (the "Note"), plus contingent interest as specified in this Note plus any
amounts due the City as Excess Rents pursuant to Section 5.1 of the Regulatory
Agreement and Option to Purchase ("Regulatory Agreement") executed by Borrower and
City. This Note is secured by a Deed of Trust dated the same date as this note. This Note
evidences a loan (the "Loan") from City to Borrower, pursuant to that Affordable
Housing Agreement dated , 2012 ("Agreement"), the terms of which
are hereby incorporated herein and made a part of this Note.
2. Borrow shall pay Contingent Interest (as defined in the Agreement) equal to [to be
calculated after appraisal is received] percent (TBD%) of the Appreciation Amount, (i)
in the event of a default by Borrower under this Note, or the Deed of Trust, or (ii) on the
date a Transfer is made, or (iii) in the event of any prepayment of the balance due under
this Note. In the event the Appreciation Amount is less than zero upon sale of the
Property at Fair Market Value, no Contingent Interest shall be due.
3. Borrower agrees that prior to any voluntary or involuntary transfer of the Site, Borrower
shall provide the City notice of the planned transfer and a first right of refusal to purchase
the Site per Section 11 of the Regulatory Agreement at the fair market value as
determined per Section 16 of the Regulatory Agreement less the principal sum advanced
under this note and less any interest accrued pursuant to Section 2. Should City not opt to
purchase the site, then Borrower shall repay the entirety of the principal sum and any
interest accrued pursuant to Section 2 of this Note.
4. Borrower understands that advances under this Note will be made subject to and only as
provided in the Agreement. The City has no obligation to make any advance under this
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Note at any time when an Event of Default exists under this Note or under any of the
Loan documents. The City is not required under any circumstances to make any advance
if that would cause the outstanding principal of this Note to exceed the Maximum Loan
Amount.
5. Borrower's obligations under this Note are in addition to its obligations to pay Loan Fees
and all other amounts payable by the Borrower under the other Loan documents.
6. Borrower understands that term ("Term") of this Note commences on the date of
execution of this Note and expires fifty-five (55) years from execution date unless sooner
repaid or prepaid. Borrower further understands that repayment of this Note is deferred
for the Term of the Note, except as provided in subsection 6.1 below.
6.1. The total amount of the principal and any Contingent Interest owed under this
Note shall immediately become due and payable: (i) in the event of a default by
the Borrower under this Note, Agreement, the Regulatory Agreement, the Deed of
Trust, or the First Lender Loan, (ii) on the date a Transfer is made whether
voluntarily, involuntarily, or by operation of law and whether by deed, contract of
sale, gift, devise, bequest or otherwise. Failure to declare such amounts due shall
not constitute a waiver on the part of the City to declare them due in the event of a
subsequent Transfer.
7. If any of the following "Events of Default" occur, any obligation of the City to make
advances under this Note terminates and at the City's option, exercisable in its sole
discretion, all sums of principal and interest under this Note will become immediately
due and payable without notice of default, presentment or demand for payment, protest or
notice of protest, nonpayment or dishonor, or other notices or demands of any kind or
character:
7.1. An Event of Default (as defined therein) occurs under the Agreement or any other
Loan document.
8. All amounts payable under this Note are payable in lawful money of the United States
during normal business hours on a Banking Day, as defined below. Checks constitute
payment only when collected.
9. The Borrower agrees to pay all costs and expenses (including, without limitation,
attorneys' fees) incurred by the City in connection with or related to this Note, or its
enforcement, whether or not suit is brought. The Borrower's agreement to pay all costs
and expenses includes any matter arising out of or relating to any Insolvency Proceeding
or any other situation in which the City incurs cost and expenses to enforce or protect the
City's rights or interests under this Note or any of the other Loan Documents. From the
time(s) incurred until paid in full to the City, all such sums will bear interest at the
Default Rate. The Borrower further waives presentment, demand for payment, notice of
dishonor, notice of nonpayment, protest, notice of protest, and any and all other notices
and demands in connection with the delivery, acceptance, performance, default, or
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enforcement of this Note, and the Borrower hereby waives the benefits of any statute of
limitations with respect to any action to enforce or otherwise related to this Note.
10. This Note, and all acts and transactions pursuant or relating hereto, and all rights and
obligations of the parties hereto shall be governed, construed, and interpreted in
accordance with the laws of the State of California without regard for principles of
conflicts of laws. Borrower (i) agrees that all actions or proceedings relating directly or
indirectly hereto shall, at the option of City, be litigated in courts located within the
county in the State of California where the Loan is payable; (ii) consents to the
jurisdiction of any such court and consents to the service of process in any such action or
proceeding by personal delivery or any other method permitted by law; and (iii) waives
any and all rights Borrower may have to transfer or change the venue of any such action
or proceeding. Borrower and City hereby waive the right to a jury trial in any action,
proceeding, claim or counterclaim in connection with this Note or the Loan Documents.
11. The City may accept additional or substitute security for this Note, or release any security
or any party liable for this Note, or extend or renew this Note, all without notice to the
Borrower and without affecting the liability of the Borrower.
12. If the City delays in exercising or fails to exercise any of its rights under this Note, that
delay or failure will not constitute a waiver of any of the City's rights, or of any breach,
default or failure of condition of or under this Note. No waiver by the City of any of its
rights, or of any such breach, default or failure of condition is effective, unless the waiver
is expressly stated in a writing signed by a duly authorized officer of the City. All of the
City's remedies in connection with this Note or under applicable law are cumulative, and
the City's exercise of any one or more of those remedies will not constitute an election of
remedies.
13. This note inures to the benefit of and binds the heirs, legal representatives, successors and
assigns of the Borrower and the City; provided, however, that the Borrower may not
assign this Note or any Loan funds, or assign or delegate any of its rights or obligations,
without the City's prior written consent in each instance which consent may be granted or
withheld in the City's sole discretion. The City in its sole discretion may transfer this
Note and may sell or assign participation or other interests in all or part of the Loan, on
the terms and subject to the conditions of the Loan Documents, all without notice to or
the consent of the Borrower. Also without notice to or the consent of the Borrower, the
City may disclose to any actual or prospective purchaser of any securities issued or to be
issued by the City or its affiliates, and to any actual or prospective purchaser or assignee
of any participation or other interest in this Note, the Loan or any other loans made by the
City to the Borrower (whether evidenced by this Note or otherwise), any financial or
other information, data or material in the City's possession relating to the Borrower, the
Loan or the Property, including any improvements on it. If the City so requests, the
Borrower agrees to sign and deliver a new note, in the form and substance of this Note, to
be issued in exchange for this Note.
14. The term "Banking Day" means a day, other than a Saturday or Sunday, that the City is
open for business in Atascadero, California.
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BORROWER:
By:
John Roland Dearhart
Its: Chairperson
By:
George H. Rowland III
Its: Treasurer
LA#4850-5054-3630 v]
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ATTACHMENT "C"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
(Document exempt from recording fees
pursuant to Cal. Gov. Code § 27383)
City of Atascadero
Attn: Affordable Housing
6907 El Camino Real
Atascadero, California 93422
Space Above This Line For Recorder's Use
DEED OF TRUST AND ASSIGNMENT OF RENTS
This DEED OF TRUST AND ASSIGNMENT OF RENTS, made as of , 2012 between
NORTH COUNTY CONNECTION herein called TRUSTOR, whose mailing address is 8600 ATASCADERO
AVENUE,ATASCADERO,CA 93422,FIRST AMERICAN TITLE COMPANY herein called TRUSTEE,and
CITY OF ATASCADERO,a charter law city and municipal corporation,herein called BENEFICIARY.
Trustor irrevocably grants, transfers and assigns to Trustee in Trust,with Power of Sale, that property in the City of
Atascadero,County of San Luis Obispo,State of California,described as:
SEE EXHIBIT"A" ATTACHED HERETO
(hereinafter referred to as"Property")
Together with the rents, issues and profits 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.
For the Purpose of Securing: (1) repayment of the sum of One Hundred Thousand Dollars and no cents
($100,000.00),plus contingent interest thereon as may accrue,according to the terms of that Agreement entered into
by and between Trustor and Beneficiary dated 2012 (hereinafter referred to as the
"Agreement")and that Regulatory Agreement executed by Trustor on , 2012
(hereinafter refered to as the "Regulatory Agreement") and as reflected in the Promissory Note (hereinafter referred
to as"Promissory Note")executed by Trustor and dated , 2012; (2) the
performance of Trustor's covenants, promises, agreements, obligations and responsibilities under the Agreement,
Regulatory Agreement, and Promissory Note, which are incorporated herein by reference; (3) payment of Excess
Rents as defined in Section 5.1 of the Regulatory Agreement, and (4) additional sums and interest thereon which
may hereafter be loaned or otherwise disbursed to Trustor, or its successors or assigns, when evidenced by an
amendment to the Agreement or other instruments reciting that they are secured by this Deed of Trust.
LA#4850-5054-3630 v1
Trustor acknowledges that this Deed of Trust secures not only the repayment of money and the obligations
recited herein, but also the performance by the undersigned of certain covenants, promises, agreements,
obligations and responsibilities created in Trustor under the Agreement and Promissory Note incorporated
herein. Any default or breach by the undersigned of any covenant, promise, agreement or obligation of
Trustor under any of said instruments secured hereby that is not timely cured as required in such
instruments,shall allow Beneficiary to take all actions to which it is entitled,including but not limited to,the
exercise of its right to declare the loan immediately due and payable and foreclose on the Property under this
Deed of Trust.
A. To protect the security of this Deed of Trust,Trustor agrees:
(1) To keep said Property in good condition and repair; not to remove or demolish any building thereon; to
complete or restore promptly and in good and workmanlike manner any building which may be constructed,
damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor;
to comply with all laws affecting said Property or requiring any alterations or improvements to be made thereon;not
to commit or permit waste thereof;not to commit, suffer,or permit any act upon said Property in violation of law;to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said Property
may be reasonably necessary,the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary insurance satisfactory to Beneficiary pursuant to the
Agreement. The amount collected under any insurance policy may be applied by Beneficiary upon any indebtedness
secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so
collected or any part thereof may be released to Trustor. 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.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee;and to pay all costs and expenses,including cost of evidence of title and attorney's
fees in a reasonable sum, in any action or proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed of Trust.
(4) To pay, at least ten days before delinquency all taxes and assessments affecting said Property, including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said
Property or any part thereof,which appear to be prior or superior hereto;all costs,fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, 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, 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;
appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge, or lien which in the
judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary
expenses,employ counsel and pay reasonable attorney's fees.
(5) To pay immediately and without demand all sums so expanded by Beneficiary or Trustee, with interest
from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement
provided for by law in effect at the date hereof regarding the obligation secured hereby, any amount demanded by
the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
(1) That 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 him or her in the same manner and with the same effect as provided above in paragraph A(2)
regarding disposition of proceeds of fire or other insurance.
LA#4850-5054-3630 vl
(2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its
right either to require prompt payment when due of all other sums so secured or to declare default for failure to so
pay.
(3) That upon written request of Beneficiary stating that all sums secured hereby have been paid or forgiven,
and upon surrender of this Deed of Trust and said Promissory Note to Trustee for cancellation and retention or other
disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey,
without warranty, the Property then held hereunder. The recitals in such reconveyance of any matters or facts shall
be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person
or persons legally entitled thereto."
(4) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of the
Agreement and Promissory Note,Beneficiary may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale and 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 also
shall deposit with Trustee this Deed of Trust, said Promissory Note and all documents evidencing expenditures
secured hereby.
After the lapse of such time as may then be required by law following the recordation of said 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 said notice of sale, either as a whole or in separate parcels, and in
such order as it may determine,at public auction to the highest bidder for cash 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 recitals in such deed of any matters or facts
shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined,may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title
in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms
hereof,not then repaid,with accrued interest at the amount allowed by law in effect at the date hereof;all other sums
then secured hereby;and the remainder,if any,to the person or persons legally entitled thereto.
(5) That Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to
time,by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder,
which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of
the county or counties where said Property is situated, shall be conclusive proof of proper substitution of such
successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title,
estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and
Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new
Trustee.
(6) That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,their heirs,legatees,
devisees, administrators,executors, successors, and assigns. The term Beneficiary shall mean the owner and holder,
including pledgees of the Promissory Note secured hereby,whether or not named as Beneficiary herein.
(7) 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.
(8) That in the event of any Transfer (as defined below) of said Property, Beneficiary shall have the absolute
right at its option, without prior demand or notice,to declare all sums secured hereby immediately due and payable.
As used herein, `Transfer' means any sale, conveyance, lease, transfer or disposition of all or any part of said
Property or any interest of Trustor therein, or the further hypothecation or encumbering of said Property or any part
thereof,or the entry into any agreement to do any of the foregoing,without the prior written consent of Beneficiary
LA#4850-5054-3630 vl
Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge
thereof does not exceed the maximum allowed by laws.
The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be
mailed to him at his address hereinbefore set forth.
TRUSTOR
NORTH COUNTY CONNECTION
By:
John Roland Dearhart
Its: Chairperson
By:
George H.Rowland III
Its: Treasurer
STATE OF CALIFORNIA )ss
COUNTY OF SAN LUIS OBISPO)
On before me, Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s),or the entity upon behalf of which the person(s)acted,executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
STATE OF CALIFORNIA ) ss
COUNTY OF SAN LUIS OBISPO)
On before me, Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s),or the entity upon behalf of which the person(s)acted,executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
LA#4850-5054-3630 v1
EXHIBIT A
LEGAL DESCRIPTION
PARCEL 2 OF PARCEL MAP NO. AT-85-008 IN THE CITY OF ATASCADERO, COUNTY OF SAN LUIS
OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED JANUARY 15, 1987 IN BOOK
40, PAGE 74 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM ALL MINERALS AND OIL IN, UNDER OR UPON THAT PORTION OF SAID
LAND LYING WITHIN LOT 5 OF BLOCK 6 OF AMENDED MAP OF ATASCADERO COLONY FILED
JULY 6, 1915 IN BOOK 3, PAGE 5A OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
APN: 056-231-023
11/3/2012 1 0:28 AM A-1
ATTACHMENT "D"
OFFICIAL BUSINESS.
Document entitled to free
recording per Government
Code § 27837.
Recording Requested by and
When Recorded Mail to:
City of Atascadero
6907 El Camino Real
Atascadero California 93422
Attn: Affordable Housing
SPACE ABOVE THIS LINE
FOR RECORDING USE
� 1
REGULATORY AGREEMENT
Owner: NORTH COUNTY CONNECTION
Property Address: 8600 & 8580 ATASCADERO AVENUE
Fair Market Value: TBD
This Regulatory Agreement ("Regulatory Agreement"), dated for reference purposes as
of is made and entered into by and between NORTH COUNTY
CONNECTION, ("Owner") and the CITY OF ATASCADERO, a charter law city and
municipal corporation ("City") with reference to the following:
RECITALS
A. This Regulatory Agreement is made and recorded in accordance with, and subject
to, that certain AFFORDABLE HOUSING AGREEMENT dated , 2012
("Agreement"), by and between Owner and the City. The Agreement and all associated
documents are public records maintained on file with the Office of the City Clerk located at 6907
El Camino Real, Atascadero, California 93422, or as may thereafter, from time to time, be
established.
B. Unless otherwise specified herein, all definitions in the Agreement will have the
same meaning when referred to herein.
C. This Agreement affects that parcel of real property commonly know as Assessor's
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Parcel Number 056-231-023, generally located at 8600 and 8580 Atascadero Avenue, in the City
of Atascadero, County of San Luis Obispo, State of California, as more particularly described on
the legal description attached hereto as Exhibit"A", and incorporated herein ("Property"):
D. The term "Owner" as used in this Regulatory Agreement includes NORTH
COUNTY CONNECTION and its successors and assigns to the Property described herein, and
all lessees, tenants, contractors, agents, and all persons claiming an interest in the Property, or
claiming an interest by and through any of the foregoing.
E. Owner has proposed and by the recording of this document will have commenced
construction on the Property of the Project as defined in the Agreement.
NOW, THEREFORE, Owner, in consideration of City entering into the Agreement,
hereby covenants, agrees, and declares that the Property shall be owned, held, used, maintained,
occupied, rented, and otherwise transferred pursuant to the following restrictive covenants
("Covenants") and that such Covenants shall be binding upon all Owner's successors and assigns
to the Property, and all lessees, tenants, contractors, agents, and all persons claiming an interest
in the Property, or claiming an interest by and through any of the foregoing:
COVENANTS
1. Covenants Run With the Land. The Covenants set forth herein are limitations on the
ownership and use of the land as provided in California Civil Code § 784. The
Covenants are made for the direct benefit of the Property and shall run with the land and
be binding upon the Owner, as defined herein, as provided in California Civil Code §
1460 through § 1468. The Covenants set forth herein benefit, and may be enforced by,
City, the City of Atascadero ("City"), and their respective successors or assigns. Owner
shall not challenge the Restrictions as set forth in this Regulatory Agreement or any right
of City or the City created under this Regulatory Agreement or the Agreement. Owner
expressly acknowledges and agrees that the Covenants are reasonable restraints on
Owner's right to own, use, maintain, and transfer the Property and any estate or interest
therein and are not and shall not be construed to be an unreasonable restraint or
alienation.
2. Term. The parties agree that these Covenants shall remain in effect for a period of not
less than fifty-five (55) years from and after Completion of the Project as anticipated by
the Agreement ("Term") The Term shall run continuously from the date of Completion
until expiration, unless tolled by operation of law, order of a court of competent
jurisdiction, or as may be provided for in the Agreement.
3. Management of Site. The unique qualifications and expertise of Owner are of particular
significance to the success of the Project and long-term viability of the Site. It is because
of this expertise and experience that the City has entered into this Agreement with
Owner. Owner therefore agrees that it will continue to own and manage the Site in a
professional manner or will contract with a third party management company to verse
tenant selection and oversight. Owner agrees to require and enforce, as a condition of
renting affordable unit, that Tenants will not create any nuisances including but not
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limited to noise, parking on City streets, outdoor storage of property, interfering with
commercial businesses or the accumulation of solid waste. Owner further agrees to
address any complaints against Tenants in a timely and professional manner. As a
condition of this agreement, the City may require Owner to hire a third party
management company if nuisance issues are not resolved to the satisfaction of the City.
4. Affordable Housing Covenants.
4.1. Affordable Rent Unit. Owner covenants and agrees that the unit in the
residential portion of the Site shall only be leased to a person or family qualifying
as Lower Income. Maximum rents shall not exceed the City's adopted standards
for Lower Income rental rates. In the event the Owner leases the Property in
excess of the established rental rates, the amount over the allowable rate (Excess
Rents) shall be due and payable to the City immediately upon receipt by the
Owner. Such Excess Rents shall be considered a recourse debt of the Owner to
the City, which the City may collect by legal action against the Owner and/or the
Note shall be due.
4.2. Affordable Units Reporting. Following completion of renovation, the
Participant shall rent the Affordable Unit to Lower Income Households at
Affordable Rents calculated in compliance with Attachment "A" attached hereto.
Participant shall refer potential tenants to the Administering Agency for income
certification and not enter into a binding rental agreement with a tenant until
income and asset certification has been completed, and Participant has been
informed in writing by the Administering Agency, as defined in the Agreement,
that the potential tenant is income-eligible to occupy the rental Affordable Unit.
Participant shall submit a copy of rental agreement and approval certificate to the
City upon rental of Affordable Unit. Thereafter, rental certification shall be
submitted by February 1 of each year on a form specified by the City and certified
as correct under penalty of perjury by Participant. Participant shall retain all
records related to compliance with obligations under this Agreement, the
Ordinance, and the Inclusionary Policy for a period not less than five (5) years
from the date of origination of such records, and make them available to the City
for inspection and copying on five (5) business days' written notice. Participant
shall permit the City or others designated by the City to inspect the Rental
Affordable Unit Property to monitor compliance with this Agreement or the
Regulatory Agreement following two (2) business days' written notice to
Participant.
4.3. Recordation of Affordability Covenant. The Lower Income rental restriction
on the unit shall remain in place for a period of fifty-five (55) years in compliance
with California Health & Safety Code § 33334.3(f)(1).
4.4. Eviction and Reletting of Unit(s). Notwithstanding this rental restriction, Owner
may exercise its rights to evict a tenant and reclaim possession of any Affordable
Cost unit as may be allowed under the terms of its recorded security instruments
and the law. In such event, Owner shall use its best efforts to timely complete any
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eviction and/or any unlawful detainer action and to relet said unit at an Affordable
Cost to a person or family qualifying as a Lower Income Household.
5. Maintenance of the Site. The Owner covenants and agrees for itself, its tenants, its
successors and assigns, and any successor-in-interest to the Site, or part thereof, that it
will, at its sole cost and expense: (i) maintain the appearance and safety of the Site
(including all improvements, fixtures, and landscaping) in good order, condition, and
repair, and free from the accumulation of trash, waste materials, and other debris; (ii)
remove all graffiti placed upon the Site (including all improvements, fixtures, and
landscaping) within seventy-two (72) hours of its appearance; (iii) maintain in good
order, condition and repair, properly functioning landscape irrigation systems on the Site;
and (iv) remove and promptly replace all dead or diseased landscaping material on the
Site. In the event of a default of this covenant and of a failure to cure the default within
fifteen (15) days after service of a written notice by City, City or its agents, employees
and contractors, shall have the right to enter upon the Site without further notice and to
take such actions as are necessary to cure the default. Owner shall reimburse City for all
costs associated with cure of the default (including but not limited to, staff services,
administrative costs, legal services, and third-party costs), within fifteen (15) days after
service of a written notice by City. If Owner fails to pay within the time provided, such
costs shall be a lien upon the Property, as provided by California Civil Code § 2881. The
City may enforce and foreclose such lien in any manner legally allowed.
6. Transfer of the Property; Restrictions on Resale of Property
6.1. Any Transfer of the Property will be subject to the provisions of this Agreement
including, without limitation, the City's Right of First Refusal described in
Section 7 of this Agreement. "Transfer" means any sale, assignment, or transfer,
voluntary or involuntary, of any interest in the Property, including, but not limited
to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest,
or an interest evidenced by a land contract by which possession of the Property is
transferred and Owner retains title. Any Transfer that does not satisfy the
provisions of this Agreement is prohibited.
6.2. Notwithstanding Section 6.1, the following shall not be considered a Transfer for
the purposes of this Agreement, but all such transferees shall continue to be bound
by the requirements of this Agreement: (i) a good faith Transfer by an Owner to a
spouse or Domestic Partner where the spouse or Domestic Partner becomes the
co-owner of the Property; (ii) a Transfer between spouses as part of a dissolution
proceeding, or between Domestic Partners as part of the dissolution of a domestic
partnership; (iii) a Transfer by an Owner into an inter vivos trust in which Owner
is the beneficiary; (iv) Transfers by devise or inheritance to an existing spouse,
child, or Domestic Partner of Owner following death of Owner; (v) a Transfer by
devise, inheritance, or operation of law on the death of a joint tenant; (vi)
refinance of the First Lender Loan in accordance with Section 21 of this
Agreement; or (vii) Transfer by deed of trust or imposition of a lien subordinate to
the City Deed of Trust. For purposes of this Section 6, 'Domestic Partner" shall
be as defined in Section 297 of the California Family Code or successor
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provision. An individual shall be considered a Domestic Partner of Owner upon
presentation of the Declaration of Domestic Partnership filed with the California
Secretary of State.
6.3. Owner shall provide notice to the City of any Transfers described in Sections
6.2(i) through (vii) of this Agreement no later than fifteen (15) days before the
sale, assignment, or other Transfer occurs, except where the Transfer is by devise,
inheritance, or operation of law after death of the Owner, in which event notice
shall be provided within thirty (30) days of the date of Transfer.
7. Grant of First Right of Refusal to Purchase; Assignment of Option by City
7.1. In consideration of the economic benefits received by the Owner resulting from
City Loan, Owner hereby grants and gives to the City a right to purchase all of
Owner's right, title and interest in and to the Property ("Option") at Fair Market
Value upon the occurrence of the events specified in Section 8 of this Agreement,
subject to the terms and conditions included in this Agreement.
7.2. The City may assign the Option to another public agency or non-profit
organization (the "Assignee"). The City's assignment of the Option shall not
extend any time limits with respect to the exercise of the Option or the purchase
of the Property. Notice of any such assignment shall be given to the beneficiary
of record under any deed of trust that secures any financing used to purchase the
property
7.3. If the City or the Assignee exercises the Option, the City shall charge a two
percent (2%) transaction fee (the "Transaction Fee"), payable in equal shares by
the Owner and the Assignee.
S. Events Giving Rise to Right to Exercise First Right of Refusal
8.1. The City shall have the right to exercise or to assign its First Right of Refusal if
either of the following events occurs (an "Option Event"):
8.1.1. The City receives a Notice of Intent to Transfer (defined in Section 9 of
this Agreement); or
8.2. If the City receives a Notice of Intent to Transfer, the City may exercise its Right
pursuant to the procedures in Sections 10 and 13 of this Agreement.
9. Notice of Intent to Transfer
9.1. If the Owner desires to Transfer the Property, the Owner shall promptly give City
written notice of such intent (the "Notice of Intent to Transfer") in the form shown
in Exhibit D attached to this Agreement. The Notice of Intent to Transfer shall be
sent to the Executive Director by certified mail, return receipt requested, at the
address provided in Section 8.15 of the Affordable Housing Agreement.
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9.2. The Owner's Notice of Intent to Transfer shall include the following information:
Tenant Information, the date property will be placed on the market; and contact
information for the City to schedule an inspection of the property and send
response.
9.3. The Owner may not wish to contract with a real estate broker to sell the
Property until the Owner has received from the City a Notice of Exercise or
Consent to Transfer pursuant to Section 10 of this Agreement, as the services
of a broker will not be required if the City exercises the Right to purchase
the Property and because the City will charge a transaction fee, as detailed
in Section 7.3 of this Agreement, that will be payable by Owner and the
Assignee,in addition to any broker's fees.
10. City Response to Owner's Notice of Intended Transfer
10.1. The City shall respond in writing to the Owner's Notice of Intent to Transfer
within thirty (30) days of City receipt of a complete Owner's Notice of Intent to
Transfer that includes all information required under Section 9.2 of this
Agreement. The City shall inform the Owner of the City's election to proceed
under one of the following two alternatives
10.1.1. City Exercise of Right. The City's response may notify the Owner that
the City elects to exercise the Option, or assign its right to another public
agency or non-profit organization or low or moderate-income household,
to purchase the Property ("Notice of Exercise"). The Notice of Exercise
shall include the City's calculation of the Fair Market Value as defined in
Section 14 of this agreement; all outstanding sums, including principal and
interest, due on the City Note; and the amount of the Transaction Fee
described in Section 7.3.
Consent to Transfer. Alternatively, the City's response may notify the
JI Owner that the City will not at this time exercise the Right to purchase the
Property and that the Owner may proceed to Transfer the Property through
sale (a "Consent to Transfer"). The Consent to Transfer shall include the
outstanding principal due on the City Note and shall describe the
procedure for calculating all additional sums due on the City Note.
11. Repayment of City Note
11.1. Upon any Transfer of the Property (including Transfer following exercise of the
Right by the City or Assignee), all outstanding principal and interest due, if any,
under the City Note shall be repaid pursuant to the City Note
12. Sale of Property by Owner if City Consents to Tranfer
12.1. If the City has provided a Consent to Transfer for the Property, then, at least
fifteen (15) days prior to the close of escrow for the Transfer of the Property, the
Owner shall provide the City with the following documentation:
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12.1.1. the name and address of the purchaser;
12.1.2. the final sales contract and all other documents setting forth all the terms
of the sale of the Property, including at least (a) the sales price; (b) the
price to be paid for the Owner's personal property or services, if any, and
any credits, allowances or other consideration, if any; and (c) the amount
of any real estate commission to be paid
12.1.3. a copy of the appraisal
12.1.4. a written declaration from the Owner and the purchaser under penalty of
perjury, in a form acceptable to the City, that the sale shall be closed in
accordance with the terms of the sales contract and other documents
submitted to the City and that the property has been sold at Fair Market
Value. The certification shall also provide that neither the purchaser nor
any other party has paid nor will pay to the Owner, nor has the Owner
received nor will receive from the purchaser or any other party, money or
other consideration, including personal property, in addition to what is
included in the sales contract and documents submitted to the City. The
written certification shall also include a provision that in the event a
Transfer is made in violation of the terms of this Agreement or false or
misleading statements are made in any documents or certification
submitted to the City, the City shall have the right to exercise its Option or
file an action at law or at equity as may be appropriate. All costs and legal
expenses shall be borne by the prevailing party;
12.1.5. The name of the title company escrow holder for the sale of the Property,
the escrow number, and name, address, and phone number of the escrow
officer.
12.2. Upon the close of escrow, the Owner shall provide the City with a copy of the
HUD-1 Settlement Statement showing the purchase price paid for the Property
and all other payments from escrow, escrow instructions, and any other
documents which the City may reasonably request.
13. Exercise of City Right
13.1. Escrow. Promptly after delivering a Notice of Exercise, the City shall open an
escrow account for its purchase of the Property. Close of escrow shall take place
on such date which is the later to occur of the following: (a) forty-five (45) days
after a Notice of Exercise has been delivered by City to Owner, or (b) ten (10)
days after Owner has done all acts and executed all documents required for close
of escrow.
13.2. Deposit of Funds Into Escrow. Prior to the close of escrow, the City shall ensure
that funds are deposited to pay the Fair Market Value of the Property, as defined
in Section 16 of this Agreement, minus any principal and interest due on the City
Note, and minus all Advances previously paid by the City. "Advances" include
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any payment by the City of costs including, but not limited to, principal, interest,
taxes, assessments, insurance premiums, homeowners' fees, and associated late
fees, costs, interest, attorneys' fees, pest inspections, resale inspections, and other
expenses related to the Property, which Owner has failed to pay or has permitted
to become delinquent. Closing costs and title insurance shall be paid by City and
Owner pursuant to the custom and practice in the County of San Luis Obispo at
the time of the opening of escrow, or as may be provided otherwise by mutual
agreement. Owner agrees to do all acts and execute all documents necessary to
enable the close of escrow and transfer of the Property to the City.
13.3. Removal of Exceptions to Title. The Owner shall convey title to the Property at
the close of escrow free and clear of any mortgage, lien, or other encumbrance,
unless approved in advance in writing by the City. If the amounts deposited into
escrow by the City are not sufficient to satisfy all liens and encumbrances
recorded against the Property, then the Owner shall deposit into escrow the
additional sums that are required to remove the liens and encumbrances.
14. Determination of Fair Market Value
14.1. When the City chooses to exercise its Right and when the Owner wishes to
refinance the First Lender Loan as described in Section 23 of this Agreement, the
"Fair Market Value" of the Property shall be as determined by a certified MAI or
other qualified real estate appraiser approved in advance by the City. If possible,
the appraisal shall be based upon the sales prices of comparable properties sold in
the market area during the preceding three (3)-month period. If City chooses to
exercise its Right after receiving a Notice of Intent to Transfer, the cost of the
appraisal shall be paid by the City. In all other circumstances, the cost of the
appraisal shall be paid by the Owner. Nothing in this Section 16 shall preclude
the Owner and the City from establishing the Fair Market Value of the Property
by mutual agreement, based on sales of comparable properties, in lieu of an
appraisal.
15. Nondiscrimination in Employment. The Owner covenants and agrees for itself, its
successors and assigns and any successor-in-interest to the Site or part thereof, that all
persons employed by or applying for employment by it, its affiliates, subsidiaries, or
holding companies, and all subcontractors, bidders and vendors, are and will be treated
equally by it without regard to, or because of race, color, religion, ancestry, national
origin, sex, age, pregnancy, childbirth, or related medical condition, medical condition
(cancer related) or physical or mental disability, and in compliance with Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 200, et seq., the Federal Equal Pay Act of 1963, 29
U.S.C. § 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621, et
seq., the Immigration Discrimination in Employment Act of 1967, 29 U.S.C. § 621, et
seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. § 1324b, et seq., 42
U.S.C. § 1981, the California Fair Employment and Housing Act, California Government
Code § 12900, et seq., the California Equal Pay Law, California Labor Code § 1197.5,
California Government Code § 11135, the Americans with Disabilities Act, 42 U.S.C. §
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12101, et seq., and all other anti-discrimination laws and regulations for the United States
and the State of California as they now exist or may hereafter be amended.
16. Nondiscrimination and Nonsegregation. Owner covenants and agrees for itself, its
successors and assigns and any successor-in-interest to the Site or part thereof, that it
shall abide by the following provisions:
16.1. Obligation to Refrain from Discrimination. They shall refrain from restricting
the rental, sale, lease, sublease, transfer, use, development, occupancy, tenure, or
enjoyment of the Site (or any part thereof) on the basis of race, color, creed,
religion, sex, marital status, ancestry, national origin, familial status, physical
disability, mental disability, or medical condition (including, but not limited to,
Acquired Immune Deficiency Syndrome (AIDS), the Human Immune Deficiency
Virus (HIV), or condition related thereto), of any person or group of persons, and
shall comply with the applicable anti-discrimination provisions of the Americans
with Disabilities Act (42 U.S.C. § 12101, et seq.) and the California Fair
Employment and Housing Act (Cal. Government Code § 12900, et seq.) as they
exist on the date of this Agreement or as they may thereafter be amended,
repealed and reenacted, or otherwise modified. They shall not establish or permit
any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, or vendees in the land herein conveyed.
16.2. Nondiscrimination and Nonsegregation Clauses. Any deeds, leases, or
contracts which are proposed to be, or which are, entered into with respect to the
rental, sale, lease, sublease, transfer, use, development, occupancy, tenure, or
enjoyment of the Site (including improvements and fixtures) (or party thereof),
shall be subject to, and shall expressly contain, nondiscrimination or
nonsegregation clauses in substantially the following form:
16.2.1. In Deeds. "The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that it shall
,Q, , comply with the applicable anti-discrimination provisions of the
Americans with Disabilities Act (42 U. S. C. § 12101, et seq.) and the
California Fair Employment and Housing Act (Cal. Government Code
§ 12900, et seq.), as they currently exist or as they may thereafter be
amended, repealed and reenacted, or otherwise modified, and that there
shall be no discrimination against or segregation of, any person or group
or persons on account of race, color, creed, religion, sex, marital status,
ancestry, national origin, familial status, physical disability, mental
disability, or medical condition (including, but not limited to, Acquired
Immune Deficiency Syndrome (AIDS), the Human Immune Deficiency
Virus (HIV), or condition related thereto) in the rental, sale, lease,
sublease, transfer, use, occupancy, or tenure of the land herein conveyed,
nor shall the grantee itself or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or
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occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
land herein conveyed. The foregoing covenants shall run with the land."
16.2.2. In Leases. "The lessee covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that it shall
comply with the applicable anti-discrimination provisions of the
Americans with Disabilities Act (42 U.S.C. § 12101, et seq.) and the
California Fair Employment and Housing Act (Cal. Gov. Code § 12900, et
seq.), as they currently exist or as they may thereafter be amended,
repealed and reenacted, or otherwise modified, and that there shall be no
discrimination against or segregation of, any person or group of persons
on account of race, color, creed, religion, sex, marital status, ancestry,
national origin, familial status, physical disability, mental disability, or
medical condition (including, but not limited to, Acquired Immune
Deficiency Syndrome (AIDS), the Human Immune Deficiency Virus
(HIV), or condition related thereto) in the rental, sale, lease, sublease,
transfer, use, occupancy, or tenure of the land herein conveyed, nor shall
the grantee itself or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees, or vendees in the premises herein leased."
16.2.3. In Contracts. "There shall be no discrimination against or segregation of,
any person or group or persons on account of race, color, creed, religion,
sex, marital status, ancestry, national origin, familial status, physical
disability, mental disability, or medical condition (including, but not
limited to, Acquired Immune Deficiency Syndrome (AIDS), the Human
Immune Deficiency Virus (HIV), or condition related thereto) in the
rental, sale, lease, sublease, transfer, use, occupancy, or tenure of the land
or premises affected by this instrument, nor shall the contracting or
subcontracting party or parties, or other transferees under this instrument,
or any person claiming under or through it, violate the applicable anti-
discrimination provisions of the Americans with Disabilities Act (42
U.S.C.§ 12 10 1, et seq.), and the California Fair Employment and Housing
Act (Cal. Gov. Code § 12900, et seq.) as they currently exist or as they
may thereafter be amended, repealed and reenacted, or otherwise
modified, nor establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or
vendees of the land. This provision shall obligate the contracting and
subcontracting party or parties, and other transferees under this
instrument, or any person claiming under or through it."
17. Taxes and Encumbrances. Owner shall pay, when due: (i) all ad valorem property
taxes imposed on the Site under Article XIII A of the California Constitution; (ii) all
special taxes imposed on the Site; (iii) all special assessments imposed on the Site; (iv)
all taxes payable under the California Bradley-Burns Uniform Local Sales & Use Tax
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Law, Revenue and Taxation Code § 7200, et seq.; and (v) all other taxes, assessments,
fees, exactions, or charges, any portion of which are allocated to, or received by, the City
or the City and which are imposed due to the ownership, use, or possession of the Site or
interest therein or due to the construction or operation of the Project. Upon failure to so
pay, Owner shall remove any lien, levy, or encumbrance made on the Site within ninety
(90) days of the attachment of such. Owner hereby waives any right it may have to
contest the imposition of such taxes, assessments, fees, exactions, or charges against the
Site or upon the construction or operation of the Project which are levied by the City, the
City, the County of San Luis Obispo, or the State of California, or any special district of
any of the foregoing.
18. Compliance with Laws. The Owner covenants and agrees for itself, its successors and
assigns and any successor-in-interest to the Project and/or Site or part thereof, that it shall
operate and maintain the Site and Project in conformity with the Redevelopment Plan,
Local Regulations, and all applicable state and federal laws, including all applicable labor
standards, disabled and handicapped access requirements, including without limitation,
the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. and the Unruh Civil
Rights Act, California Civil Code § 51, et seq.
19. Effect of Violation. The City is deemed the beneficiary of the terms and provisions of
this Regulatory Agreement and for the purposes of protecting the interest of the
community and other parties, public or private, in whose favor and for whose benefit this
Regulatory Agreement has been recorded. The City shall have the right, if the
Regulatory Agreement is breached, to exercise all rights and remedies, and to maintain
any actions or suits at law or in equity or other proper proceedings to enforce the curing
of such breaches to which it or any other beneficiaries of the Regulatory Agreement and
covenants may be entitled.
20. Subordination. This Regulatory Agreement is subject and subordinate to the following
Senior loan(s):
Name of Lender Amount
a. Rabobank, N.A $ TBD
The First Lender Loan is secured by one [1] deeds of trust executed by the Owner
and recorded in the County of San Luis Obispo concurrently with this Agreement
(collectively, the "First Lender Deed of Trust").]
Request for Notice of Default. A request for notice of default and notice of sale regarding
the Loan(s) referenced above shall be recorded in the Office of the Recorder of the
County of San Luis Obispo for the benefit of the City.
21. Refinance of First Lender
21.1. 14.1 City Consent Required. The Owner covenants and agrees not to place any
additional mortgage or deed of trust, including line of credit, on the Property
without obtaining prior written consent of the City.
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21.2. Permitted Debt. At no time shall the total principal amount of all the Debt secured
by the property exceed the "Permitted Debt", which is defined as the greater of:
(1) seventy percent (70%) of the fair market value of the Site as appraised
pursuant to Section 3.1.2.2; or (ii) the outstanding balance of the existing First
Lender Loan as of the date of the Owner Request to Refinance. If escrow does
not close on the refinance or subordinate loan within one hundred twenty (120)
days of the date of the Owner Request to Refinance, the City shall have the right
to recalculate the Permitted Debt.
21.3. Refinance of First Lender Loan. The City Deed of Trust shall be subordinated to a
refinanced First Lender Loan only if:
21.3.1. following such refinance, the principal amount of all debt secured by the
Property will not exceed the Permitted Debt;
21.3.2. the refinanced First Lender Loan is fully amortized with a fixed rate of
interest for a minimum five (5) year period, permits no negative
amortization, and required no balloon payments;
21.3.3. if the remaining balance of the original First Lender Loan exceeds seventy
percent (70%) of the fair market value of the Site as appraised pursuant to
Section 3.1.2.2, then the refinanced First Lender Loan reduces the
Owner's principal and interest payments; and
21.3.4. the new payment amount after the refinance does not exceed the Owner's
ability to pay.
21.4. Junior Loans and Equity Lines of Credit. Mortgage loans or equity lines of credit
junior in lien priority to this Agreement and the City Deed of Trust are not
permitted, except as expressly approved by the City in writing. The City shall
approve junior mortgage loans or equity line of credit only if:
21.4.1. following such refinance, the principal amount of all debt secured by the
Property will not exceed the Permitted Debt;
21.4.2. the refinanced First Lender Loan is fully amortized with a maximum rate
of interest no greater than five percent (5%) above the initial rate, permits
no negative amortization, and requires no balloon payments; and
21.4.3. the new payment amount after the refinance does not exceed the Owner's
ability to pay.
21.5. Request for Notice of Default. A request for notice of default and notice of sale
regarding the Loan(s) referenced above shall be recorded in the Office of the
Recorder of the County of San Luis Obispo for the benefit of the City.
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IN WITNESS WHEREOF, the parties has caused this instrument to be executed by themselves
or by their respective officers duly authorized this day of The parties hereby
approve each of the Covenants set forth in this Regulatory Agreement.
"Owner"
NORTH COUNTY CONNECTION
By:
John Roland Dearhart, Chairperson
By:
George H. Rowland I11, Treasurer
«City"
CITY OF ATASCADERO
By:
Rachelle Rickard, Administrative Services Director
STATE OF CALIFORNIA ) ss
COUNTY OF SAN LUIS OBISPO)
On before me, Notary Public, personally appeared
, who proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s),or the entity upon behalf of which the person(s) acted,executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public
LA#4850-5054-3630 v1
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STATE OF CALIFORNIA )ss
COUNTY OF SAN LUIS OBISPO)
On before me, Notary Public, personally appeared
, who proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s),or the entity upon behalf of which the person(s)acted,executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WITNESS my hand and official seal.
Signature
STATE OF CALIFORNIA ) ss
COUNTY OF SAN LUIS OBISPO)
On before me, Notary Public, personally appeared
who proved to me on th?`basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s),or the entity upon behalf of which the person(s) acted,executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
�'Wt�w
WITNESS my hand and official seal.
Signature
a
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ATTACHMENT A
CALCULATION OF AFFORDABLE RENT
The Affordable Rent for Rental Affordable Units shall be calculated using the procedures and
formulas described below. The current City of Atascadero Moderate, Lower, and Very Low
Income Limits as established pursuant to the Inclusionary Policy shall be used in these
calculations.
1. Determine the area median income for a household size that is one person larger
than the number of bedrooms in the Affordable Rental Unit.
2. Multiply the income limit as follows to obtain the annual housing allowance;
Lower Income: 30% of 80% of the area median income, adjusted
for household size appropriate to the unit.
3. Divide the annual housing allowance determined in the previous step by twelve
(12) to determine the monthly housing allowance; IMMMS,
4. Calculate the average monthly cost of utilities (excluding telephone) and all
mandatory fees charged for use of the property.
5. Subtract the amount calculated in Step 4 from the monthly housing allowance
calculated in Step 3 to compute the Affordable Rent.
hm
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EXHIBIT A
LEGAL DESCRIPTION
PARCEL 2 OF PARCEL MAP NO. AT-85-008 IN THE CITY OF ATASCADERO, COUNTY OF SAN LUIS
OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED JANUARY 15, 1987 IN BOOK
40, PAGE 74 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM ALL MINERALS AND OIL IN, UNDER OR UPON THAT PORTION OF SAID
LAND LYING WITHIN LOT 5 OF BLOCK 6 OF AMENDED MAP OF ATASCADERO COLONY FILED
JULY 6, 1915 IN BOOK 3, PAGE 5A OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
APN: 056-231-023
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ATTACHMENT "E"
SCOPE OF PROJECT
The following Scope outlines the Milestones and Schedule of Performance for construction and
occupancy of the affordable housing unit at 8580 Atascadero Avenue:
Milestones#1: Complete Plans and Building Permit for Affordable Unit
Timeframe: To be Completed within Six (6) Months of Property Purchase
• Site walk with City Building Inspector to discuss work to be completed and address any
code compliance requirements;
• Participant to have building plans completed to identify proposed construction on
affordable unit;
• Participant to submit building permit application with plans for City review;
• Building permits to be finalized and issued within six (6) months of property purchase.
Milestones#2: Complete Construction of Affordable Unit
Timeframe: To be Completed within Twelve (12)Months of Property Purchase
• Once City Building Permits are issued, begin construction on affordable unit space;
• Complete construction on unit. Affordable unit to meet all building, health and safety
codes, as well as zoning ordinance requirements prior to occupancy.
• Final occupancy to be signed off within twelve (12) months of property purchase so that
affordable unit can be leased and occupied by a qualified tenant at the restricted
affordable housing price.
ATTACHMENT "F"
LEGAL DESCRIPTION
PARCEL 2 OF PARCEL MAP NO. AT-85-008 IN THE CITY OF ATASCADERO, COUNTY OF SAN LUIS
OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED JANUARY 15, 1987 IN BOOK
40, PAGE 74 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM ALL MINERALS AND OIL IN, UNDER OR UPON THAT PORTION OF SAID
LAND LYING WITHIN LOT 5 OF BLOCK 6 OF AMENDED MAP OF ATASCADERO COLONY FILED
JULY 6, 1915 IN BOOK 3, PAGE 5A OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
APN: 056-231-023
ATTACHMENT G
PARCEL MAP, SITE LOCATION
APN 056-231-023
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ATTACHMENT "H"
AFFORDABLE UNIT LOCATION
One Affordable Unit shall be provided on the Site in the specified location on the northwest side
of the existing 3196 square foot facility as identified in the diagram below.
The Affordable Unit shall be a fully habitable, conditioned space, equip with private kitchen, full
bathroom and private entrance within the one bedroom unit. The Affordable Unit shall be a
residential unit independent of the rest of the North County Connection day use facility.
The main building used for North County Connection day use operations shall continue to be
addressed as 8600 Atascadero Avenue. The affordable unit created within this existing structure
per the diagram below, shall be addresses as 8580 Atascadero Avenue.
Floor Plan Diagram
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19.5'
General Area of
25.5' Affordable Unit
21' Location
24' Garage 24,
21'