HomeMy WebLinkAbout1997-052 CA Manor Notification of Development r
City of Atascadero
s Contract#97052
MODIFICATION OF DEVELOPMENT
AGREEMENT ENTERED INTO MARCH 15, 19859
BETWEEN CALIFORNIA MANOR AND
THE CITY OF ATASCADERO
CALIFORNIA MANOR, a Limited Partnership,hereinafter referred to as "CM",
and [lie CITY OF ATASCADERO, herei��after referred to as "City", mutually desire and
do hereby modify the Development Agreement and specifically, Attachment B thereto,
executed by the parties on or about March 15, 1985.
WHEREAS, both parties acknowledge that the purpose of the Community
Development Block Grant was to provide funds necessary to purchase the land for the
California Manor complex so as to reduce the project development costs; and,
WHEREAS,the Community Development Block Grant was used to purchase said
site with the understanding that by way of such purchase,the total loan amount required to
develop the project would be proportionately reduced; and,
WHEREAS, both parties acknowledge that as a result of the reduced loan amount,
said loan secured by Farmers Home Administration, a resultant reduction in rents has been
incorporated for the benefit of tenants since the commencement of operation of the CM
project, and CM has fulfilled its agreement with the City by passing on said savings to
tenants; and,
Modification of Development Agreement
California Manor
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f
City of Atascadero
Contract#97052
WHEREAS, the project has been operating in accord with FmHA, now R.E.C.D.
regulations pertaining to rent change approvals and agrees hereby to continue to do so
consistent with the original agreement as modified herein; and,
WHEREAS, the appraised value of the project is negatively affected as a result of
the City's thirty-year restrictive covenant, effectively reducing and perhaps eliminating
opportunities to maintain and improve needed affordable housing; and,
WHEREAS, bot the City and CM acknowledge that neither is obligated at any time
to provide rent subsidy or mortgage interest credit.
IT IS HEREBY AGREED that CM, or its successors in interest, may elect to
exercise a buy-out option of the Development Agreement and specifically the regulatory
agreement set forth in Attachment B of the original Development Agreement as follows:
Commencing February 1, 1998, CM and/or its successors shall have the option to
buy-out the City's interest in the project in the form of the restrictive covenant and as a
result of the initial Community Development Block Grant used to purchase the property on
the following terms:
1) Commencing February 1, 1998, the amount payable for the City's interest is
agreed to be $150,000.
2) Each year the amount payable to buy-out the City's interest will be reduced
$5,882.35, an amount equivalent to seventeen(17) equal divisions of
$100,000. A minimum of$50,000 payable to buy-out the City's interest
will be required through the term of the original agreement.
Modification of Development Agreement
California Manor
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City of Atascadero
Contract#97052
This modification supersedes the original Attachment B to the Development
Agreement entered into between the City and CM on March 15, 1985. All other terms and
conditions of the original Development Agreement consistent with this modification
remain in full force and effect.
Dated: /�-!V9 (
CALIFORNIA MANOR
A Limited Partnership
By: -Z
l
Dated:
CITY OF ATASCADERO
By:
ade G. McKinney
City Manager
RESOLUTION OF CITY COUNCIL ATTACHED HERETO and incorporated by
reference as though fully set forth herein.
Modification of Development Agreement
California Manor
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