HomeMy WebLinkAboutRES HA-120RESOLUTION NO. HA-120
A RESOLUTION OF THE PALM DESERT HOUSING AUTHORITY
PALM DESERT, AS SELLER, AND PALM COMMUNITIES, A
CALIFORNIA LIMITED COMPANY, AS
PURCHASER/BORROWER/DEVELOPER, IN CONNECTION WITH
APPROXIMATELY 10.49 ACRES OF PROPERTY OWNED BY THE CITY,
APPROPRIATING FUNDS IN CONNECTION THEREWITH, AND TAKING
RELATED ACTIONS
RECITALS:
A. Pursuant to AB X1 26 (enacted in June 2011) and the California Supreme
solved as of February 1, 2012.
B. Pursuant to Health and Safety Code Section 34176(b), the City Council of
-07, electing for the City to
not retain the responsibility for performing housing functions previously performed by the
Former Agency, and determining that all of the assets, as allowed by law, and all rights,
powers, liabilities, duties, and obligations associated with the housing activities of the
Former Agency be transferred to the Palm De
C. The City owns that approximately ten and one-half (10.49) acre site located
in the City, identified as APN 694-120-028 and a portion of APN 694-120-029, as more
particularly described in Exhibit A to the form of the Amended and Restated Disposition,
D. The City, Authority and Developer previously entered into a Disposition,
Development and Loan Agreement, dated November 23, 2022, and the Amended and
o provide for the conveyance of the Property to the
Developer and the construction by the Developer of 239 affordable housing units, which
shall be made available to and occupied by low and extremely low income households,
and two on-
E. The City Council, Authority Board and Developer desire to enter into the
Second Amended and Restated DDLA to replace the First Amended and Restated DDLA
and provide, subject to the terms and conditions of the Second Amended and Restated
DDLA, for: (i) the City to process a Parcel Map to divide the Property into the Phase I
Parcel (consisting of approximately 6.02 acres) and Phase II Parcel (consisting of
Resolution No. HA-120 Page 2
approximately 4.47 acres) and to convey the Property to the Developer in two phases; (ii)
the Developer to construct 121 units on the Phase I Parcel and 120 units on the Phase II
Parcel; (iii) the Authority to make a purchase money/ acquisition loan to the Developer in
the amount of $1,965,539 to purchase the Phase I Parcel and a purchase money/
acquisition loan to the Developer in the amount of $4,789,461 to purchase the Phase II
Parcel; (iv) concurrently with the conveyance of the Phase I Parcel to the Developer, the
City and Developer to grant to each other reciprocal easements over the Phase I and
Phase II Parcel for ingress and egress; and (v) concurrently with the conveyance of the
Phase I Parcel to the Developer, the City to grant an easement over Parcel 9, an adjacent
City-owned parcel, to allow ingress and egress to the Phase I Parcel through the Phase
II Parcel, and an access easement over Parcel 9 to allow the Developer to clear any
accumulated sand against the Phase I and Phase II boundary wall.
NOW, THEREFORE, THE PALM DESERT HOUSING AUTHORITY DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are a substantive part of
this Resolution.
SECTION 2. The Second Amended and Restated DDLA, in the form attached
hereto as Authority is
hereby authorized to execute and deliver the Second Amended and Restated DDLA, for
and in the name of the Authority, in substantially such form, with such changes thereto
as the Executive Director may deem appropriate or necessary and consistent with the
purposes of this Resolution (such approval to be conclusively evidenced by the execution
and delivery thereof).
SECTION 3. The Developer is hereby authorized to submit an application,
including the Second Amended and Restated DDLA, to the California Tax Credit
Allocation Committee for tax credits as contemplated by the Second Amended and
Restated DDLA.
SECTION 4. The Director of Finance is hereby authorized to appropriate
$6,755,000 from the Unobligated Housing Asset Fund Balance to the appropriate budget
line item(s). The Board hereby finds that the use of the Housing Fund moneys in
accordance with the Second Amended and Restated DDLA is of benefit to the project
areas of the Former Agency.
SECTION 5. The Second Amended and Restated DDLA does not bind the
Authority to make the Authority loans unless the applicable tax credits and other debt and
equity necessary to complete the Project shall have been awarded/committed, and all
other conditions described in the Second Amended and Restated DDLA to the closing
shall have been satisfied.
SECTION 6. The members of this Board and the officers and staff of the Authority
are hereby authorized, jointly and severally, to take any other such actions as they deem
necessary or proper to effectuate the purposes of this Resolution and the Second
Resolution No. HA-120 Page 3
Amended and Restated DDLA, including the exhibits thereto. Such actions include
negotiating and preparing agreements and documents, and any such actions previously
taken are hereby ratified and confirmed. The Executive Director of the Authority is
authorized to execute, deliver and record, on behalf of the Authority, all documents
contemplated by the Second Amended and Restated DDLA.
SECTION 7. The Secretary shall certify to the adoption of this Resolution and
the same shall take effect and be in force.
ADOPTED ON APRIL 11, 2024.
I, Anthony J. Mejia, City Clerk of the City of Palm Desert, hereby certify that
Resolution No. HA-120 is a full, true, and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Desert on April 11, 2024, by the following
vote:
AYES: HARNIK, KELLY, NESTANDE, and TRUBEE
NOES: QUINTANILLA
ABSENT: NONE
ABSTAIN: NONE
RECUSED: NONE
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of Palm Desert, California, on ___________________.
______________________________
ANTHONY J. MEJIA
CITY CLERK
KARINA QUINTANILLA
CHAIRMAN
ATTEST:
ANTHONY J. MEJIA
SECRETARY
PALM DESERT HOUSING AUTHORITY
Resolution No. HA-120 Page 4
FORM OF SECOND AMENDED AND RESTATED DDLA
(Attached.)
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SECOND AMENDED AND RESTATED DISPOSITION, DEVELOPMENT AND LOAN
AGREEMENT
AMONG
CITY OF PALM DESERT
PALM DESERT HOUSING AUTHORITY
AND
PALM COMMUNITIES
(PALM VILLAS AT MILLENNIUM)
TABLE OF CONTENTS
PAGE
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Section 1.1 Definitions ................................................................................................................... 3
Section 1.2 Exhibits ........................................................................................................................ 8
ARTICLE 2. PREDISPOSITION CONDITIONS FOR CONVEYANCE OF EACH PHASE 9
Section 2.1 City Right to Terminate for Failure to Timely Obtain Tax
Credits .......................................................................................................................... 9
Section 2.2 City Approvals ........................................................................................................... 9
Section 2.3 Parcel Map .................................................................................................................. 9
Section 2.4 Financing ..................................................................................................................... 9
Section 2.5 Permits .......................................................................................................................... 9
Section 2.6 Tax Credits .................................................................................................................. 9
Section 2.7 Loan Closings ............................................................................................................ 9
Section 2.8 Construction Plans .................................................................................................. 10
Section 2.9 Construction Contract ............................................................................................ 10
Section 2.10 Cost Estimate............................................................................................................ 10
Section 2.11 Construction Bonds ................................................................................................ 10
Section 2.12 Developer Organizational Documents .............................................................. 11
Section 2.13 Authority Loan ......................................................................................................... 11
Section 2.14 Tax Credit Equity .................................................................................................... 11
Section 2.15 City Easements ........................................................................................................ 11
Section 2.16 Phase II Conveyance .............................................................................................. 11
Section 2.17 HCD Confirmation of Exemption ...................................................................... 11
Section 2.18 AHAP ......................................................................................................................... 11
Section 2.19 Title Report ............................................................................................................... 11
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ARTICLE 3. DISPOSITION OF PROPERTY ...................................................................................... 11
Section 3.1 Conveyance of Phase I Parcel and Phase II Parcel ....................................... 11
Section 3.2 Purchase Prices ........................................................................................................ 11
Section 3.3 Deposit ....................................................................................................................... 11
Section 3.4 Opening Escrow ...................................................................................................... 12
Section 3.5 Close of Escrow ....................................................................................................... 13
Section 3.6 Costs of Escrow and Closing ............................................................................... 14
Section 3.7 Condition of Title .................................................................................................... 14
Section 3.8 Condition of Property ............................................................................................ 14
ARTICLE 4. CONSTRUCTION OF DEVELOPMENT .................................................................... 17
Section 4.1 Construction and Operation Consistent with Agreements .......................... 17
Section 4.2 Commencement of Development ....................................................................... 17
Section 4.3 Completion of the Development ......................................................................... 17
Section 4.4 Equal Opportunity................................................................................................... 17
Section 4.5 Construction Under Laws ..................................................................................... 17
Section 4.6 Progress Reports ...................................................................................................... 18
Section 4.7 Construction Responsibilities .............................................................................. 18
Section 4.8 Mechanics Liens, Stop Notices, and Notices of Completion ..................... 18
Section 4.9 Inspections ................................................................................................................ 19
Section 4.10 Records ...................................................................................................................... 19
Section 4.11 Certificate of Completion ..................................................................................... 19
ARTICLE 5. AUTHORITY LOAN PROVISIONS ............................................................................. 19
Section 5.1 Authority Loans ....................................................................................................... 19
Section 5.2 Use of Authority Loan ........................................................................................... 20
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Section 5.3 Delivery of Promissory Notes ............................................................................. 20
Section 5.4 Term of the Authority Loan ................................................................................. 20
Section 5.5 Interest ........................................................................................................................ 20
Section 5.6 Disbursement of Authority Loans ...................................................................... 20
Section 5.7 Repayment Schedule .............................................................................................. 21
Section 5.8 Reports and Accounting of Residual Receipts ............................................... 21
Section 5.9 Non-Recourse ........................................................................................................... 22
ARTICLE 6. ONGOING DEVELOPER OBLIGATIONS ................................................................ 22
Section 6.1 Applicability ............................................................................................................. 22
Section 6.2 Use of Development ............................................................................................... 22
Section 6.3 Maintenance ............................................................................................................. 23
Section 6.4 Taxes and Assessments ......................................................................................... 23
Section 6.5 Mandatory Language in All Subsequent Deeds, Leases and
Contracts .................................................................................................................... 23
Section 6.6 Management Agent ................................................................................................ 25
Section 6.7 Insurance Requirements ........................................................................................ 26
Section 6.8 Audits ......................................................................................................................... 29
ARTICLE 7. ASSIGNMENTS AND TRANSFERS ........................................................................... 29
Section 7.1 Definitions ................................................................................................................. 29
Section 7.2 Purpose of Restrictions on Transfer .................................................................. 29
Section 7.3 Prohibited Transfers ............................................................................................... 30
Section 7.4 Permitted Transfers ................................................................................................ 30
Section 7.5 Other Transfers with City Consent .................................................................... 31
Section 7.6 Termination of Limitations on Transfers ......................................................... 31
ARTICLE 8. DEFAULT AND REMEDIES .......................................................................................... 31
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Section 8.1 General Applicability ............................................................................................. 31
Section 8.2 Fault of City .............................................................................................................. 31
Section 8.3 Fault of Authority ................................................................................................... 31
Section 8.4 Fault of Developer .................................................................................................. 31
Section 8.5 Notice and Cure Period Regarding City/Authority Defaults ...................... 33
Section 8.6 Remedies ................................................................................................................... 33
Section 8.7 Rights of Mortgagees ............................................................................................. 34
Section 8.8 Remedies Cumulative ............................................................................................ 34
ARTICLE 9. SECURITY FINANCING AND RIGHTS OF HOLDERS ..................................... 34
Section 9.1 No Encumbrances Except for Development Purposes ................................. 34
Section 9.2 Holder Not Obligated to Construct .................................................................... 34
Section 9.3 Notice of Default and Right to Cure .................................................................. 34
Section 9.4 Failure of Holder to Complete Development .................................................. 35
Section 9.5 Right of Cure ............................................................................................................ 35
Section 9.6 Right of City to Satisfy Other Liens .................................................................. 35
Section 9.7 Holder to be Notified ............................................................................................. 36
Section 9.8 Estoppel Certificates .............................................................................................. 36
ARTICLE 10 GENERAL PROVISIONS ................................................................................................. 36
Section 10.1 Notices, Demands and Communications ......................................................... 36
Section 10.2 Non-Liability of Officials, Employees and Agents ....................................... 36
Section 10.3 Forced Delay ............................................................................................................ 37
Section 10.4 Inspection of Books and Records ....................................................................... 37
Section 10.5 Title of Parts and Sections .................................................................................... 37
Section 10.6 No Third-Party Beneficiaries ............................................................................... 37
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Section 10.7 Applicable Law ........................................................................................................ 37
Section 10.8 No Brokers ................................................................................................................ 37
Section 10.9 Legal Actions ........................................................................................................... 37
Section 10.10 Severability ............................................................................................................... 38
Section 10.11 Binding Upon Successors ..................................................................................... 38
Section 10.12 Parties Not Co-Venturers ...................................................................................... 38
Section 10.13 Discretion Retained by City ................................................................................. 38
Section 10.14 Time of the Essence ............................................................................................... 38
Section 10.15 Representation and Warranties of Developer ................................................. 38
Section 10.16 Entire Understanding of the Parties ................................................................... 39
Section 10.17 Amendments ............................................................................................................. 39
Section 10.18 Approvals .................................................................................................................. 39
Section 10.19 Counterparts ............................................................................................................. 39
SECOND AMENDED AND RESTATED DISPOSITION, DEVELOPMENT, AND LOAN
AGREEMENT
(Palm Villas at Millennium)
This SECOND AMENDED AND RESTATED DISPOSITION, DEVELOPMENT AND
LOAN AGREEMENT (the “Agreement”) is dated as of April 11, 2024, and is entered into by and
among the CITY OF PALM DESERT, a municipal corporation (the “City”), the PALM DESERT
HOUSING AUTHORITY, a public body corporate and politic (the “Authority”) and PALM
COMMUNITIES, a California corporation (the “Developer”), each individually a “Party” and
collectively the “Parties,” with reference to the following facts, understandings and intentions of
the Parties:
RECITALS
A. Defined terms used but not defined in these recitals are as defined in Article 1 of
this Agreement.
B. The City owns that approximately ten and one-half (10.49) acre site located in the
City of Palm Desert as more particularly described in Exhibit A (the “Property”). The City intends
to process a Parcel Map to divide the Property into the Phase I Parcel (consisting of approximately
6.02 acres) and Parcel II Parcel (consisting of approximately 4.47 acres); the Phase I Parcel and
Phase II Parcel are described on Exhibits A-1 and A-2.
C. The Property has been declared exempt surplus land by the City Council of the City
under Government Code Section 54221(f)(1)(A) and has concluded based on the Developer’s site
plan and proposed affordability that proposed Development meets the affordability and design
requirements of Government Code Section 37364. The California Department of Housing and
Community Development has confirmed such exemption in writing.
D. The City, the Authority and the Developer previously entered into that certain
Disposition, Development and Loan Agreement dated November 23, 2022, as amended by that
certain Amended and Restated Disposition, Development and Loan Agreement dated June 22,
2023 (the “Existing DDLA”); this Agreement replaces the Existing DDLA.
E. The Developer intends to construct in two phases at least two hundred forty-one
(241) units of housing, two hundred thirty-nine (239) of which shall be made available to and
occupied by low-income households, very low-income households, and extremely low-income
households, and two (2) of which shall be on-site manager’s units.
F. The Developer intends to construct one hundred twenty-one (121) units on the
Phase I Parcel, with one hundred twenty (120) of the units restricted to Extremely-Low
Households, Very-Low Income Households and Low Income Households, at affordable rents, and
the other unit used as an on-site manager’s unit. The Phase I Development will be composed of
one, two and three bedroom units.
G. The Developer intends to construct one hundred twenty (120) units on the Phase II
Parcel, with one hundred nineteen (119) of the units restricted to Extremely-Low Households,
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Very-Low Income Households and Low Income Households, at affordable rents, and the other
unit used as an on-site manager’s unit. The Phase II Development will also be composed of one,
two and three bedroom units.
H. To effectuate this purpose, the City will convey the Property to the Developer in
two phases, subject to the terms and conditions of this Agreement.
I. To assist the Developer in acquiring the Phase I Parcel from the City, the Authority
intends to make a purchase money/acquisition loan to the Developer in the amount of
$1,965,539.00, subject to the terms and conditions of this Agreement. To assist the Developer in
acquiring the Phase II Parcel from the City and developing/construction the Phase II Development,
the Authority intends to make a purchase money and construction loan to the Developer in the
amount of $4,789,461, subject to the terms and conditions of this Agreement.
J. The Authority shall disburse the construction loan portion of the Phase II loan by
Authority itself, but upon request of Developer, will consider entering into an agreement with the
Developer’s construction lender for the Phase II Development providing that the construction
lender will disburse the remaining proceeds of the Authority’s loan following the Close of Escrow
to the construction lender for the payment of construction costs of the Phase II Development. The
agreement will provide that the Authority Loan funds will be disbursed pari-passu with the
construction lender’s loan. The construction lender shall not have a security interest in such
Authority funds.
K. Concurrently with the conveyance of the Phase I Parcel to the Developer, the
Developer and City intend to grant to each other reciprocal easements over the Phase I and Phase
II Parcel for ingress and egress. The Developer also intends to grant the Phase II Parcel owner
reasonable rights to use the Phase I Development’s common area facilities upon the completion of
the Phase II Development (the “Phase I and Phase II Access Easement”). The Parties intend that
the Phase I and Phase II Access Easement will include a provision that the Phase I and Phase II
Access Easement may be amended by the Parties if the City intends to convey the Phase II Parcel
to a party that is not affiliated with the Developer.
L. Concurrently with the conveyance of the Phase I Parcel to the Developer, the City
intends to grant (i) an easement over the Parcel 9, an adjacent City-owned parcel, to allow ingress
and egress to the Phase I Parcel through the Phase II Parcel (the “Parcel 9 Easement”); and (ii) an
access easement over Parcel 9 to allow the Developer and the Phase II Parcel owner to clear any
accumulated sand against the Phase I and the Phase II boundary wall (the “Maintenance
Easement”).
M. The City has determined that the Developer has the necessary expertise, skill and
ability to carry out the commitments set forth in this Agreement and that this Agreement is in the
best interests of, and will materially contribute to the implementation of, the City’s affordable
housing goals through the development of the Property.
N. Developer has applied for and received a density bonus (including reduced parking
and increased density) for both the Phase I Development and the Phase II Development.
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In consideration of the foregoing, and the mutual terms and conditions herein, the Parties
agree as follows:
AGREEMENT
The foregoing recitals are hereby incorporated by reference and made part of this
Agreement.
ARTICLE 1 DEFINITIONS AND
EXHIBITS
Section 1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, the following definitions apply throughout this Agreement. “Affordable Units” means
the Two Hundred Thirty-Nine (239) Units restricted by the Housing Agreements to be developed
on the Property to be occupied by Extremely-Low, Very-Low and Low-Income Households and
to be available at affordable rent as defined in accordance with Health & Safety Code Section
50053.
“Annual Financial Statement” means for any calendar year: (i) the financial statement
of operating expenses and revenues for a Phase, prepared at the Developer’s expense, by an
independent certified accountant reasonably acceptable to the Authority, and showing the Residual
Receipts for the applicable calendar year; (ii) sufficient back-up data to support the revenues and
expenses claimed on the statement; and (iii) such additional information reasonably requested by
the Authority, all of which shall form the basis for determining Residual Receipts.
“Approved Financing” means the loans, equity, and other financing obtained by the
Developer for the purpose of financing the costs of the Development that are approved by the City
and consistent with the Financing Proposal.
“Approved Plans” means all designs for the Development approved by the City in
conjunction with the City Approvals prior to or concurrent with the Effective Date.
“Authority” is defined in the introductory paragraph of this Agreement.
“Authority Loans” or “Authority Loan”, as applicable, mean loans by the Palm Desert
Housing Authority to the Developer in the amount of: (i) $1,965,539 to pay the purchase price for
the Phase I Parcel and (ii) $4,789,461 to pay the purchase price for the Phase II Parcel and
construction costs for the Phase II Development.
“Building Permit” means the building permit and all other ministerial construction permits
required from the City to construct the Development.
“Certificate of Completion” is defined in Section 4.11.
“Certificate of Occupancy” means a final certificate of occupancy issued by the City for
the Development, or equivalent final inspection.
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“City” is defined in the introductory paragraph of this Agreement.
“City/Authority Documents” means, collectively, this Agreement, the Promissory Notes,
the Deed of Trusts, the Housing Agreements, the Notice of Restrictions for each phase of the
Development and any other documents executed by the City and/or the Authority and Developer.
“City Approvals” means the permits and entitlements issued by the City to allow for the
commencement of construction for the respective Phase.
“City Event of Default” is defined in Section 8.3.
“Close of Escrow” means the date on which a fee interest in each of the Phase I Parcel and
the Phase II Parcel is conveyed to the Developer, as appropriate.
“Construction Plans” means the final construction plans for the construction of the
Development as approved by the City in accordance with Section 2.5.
“Control” means the power to direct the day-to-day management responsibilities for the
activities of Developer, and, with respect to a limited liability company, means the: (1) managing
member or members; or (2) the right to exercise, directly or indirectly, more than fifty percent
(50%) of the voting rights attributable to the limited liability company.
“Declaration of Default” is defined in Section 8.5.
“Deeds of Trust” shall mean the deeds of trust, assignment of rents, and security
agreement placed on the Developer’s interest in the Phase I Parcel and Phase II Parcel, as security
for the Authority Loans by the Developer as trustor with the Authority as beneficiary, as well as
any amendments to, modifications of, and restatements of said deed of trusts, in the forms attached
hereto as Exhibit F.
“Defaulting Party” is defined in Section 8.5.
“Density Bonus Agreement” shall mean the Density Bonus Agreement for each Phase in
the form attached hereto as Exhibits D-1 and D-2
“Deposit” is defined in Section 3.3.
“Developer” has the meaning in the introductory paragraph of this Agreement.
“Developer Event of Default” is defined in Section 8.4.
“Development” means the development of two hundred forty-one (241) apartment units
to be developed on the Property.
“Effective Date” shall mean the later of: (i) the date the Developer has executed this
Agreement; (ii) the date the Authority has executed this Agreement and (iii) the date the City has
executed this Agreement.
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“Escrow” means the escrow opened with the Title Company to accomplish the transfer of
Phase I and Phase II, respectively, from the City to the Developer.
“Extremely Low Income” means a household with an income that does not exceed the
qualifying limits for extremely low-income households, adjusted for actual household size, for
Riverside County, as published and periodically updated by HCD under Section 50106 of the
California Health and Safety Code, or successor provision.
“Financing Proposal” means the Developer’s initial proposal for financing the acquisition
of the Property and the construction of the Development, including an estimate of the sources and
uses of funds, which is attached hereto as Exhibit K.
“Grading Permit” means the permit to commence grading on the Phase I Parcel and the
permit for the Phase II Parcel.
“Hazardous Materials” means any substance, material, or waste which is: (1) defined as
a “hazardous waste”, “hazardous material,” “hazardous substance,” “extremely hazardous waste,”
“restricted hazardous waste,” “pollutant” or any other terms comparable to the foregoing terms
under any provision of California law or federal law; (2) petroleum; (3) asbestos;
(4) polychlorinated biphenyls; (5) radioactive materials; (6) MTBE; or (7) determined by
California, federal or local government authority to be capable of posing a risk of injury to health,
safety or property. Without limiting the foregoing, Hazardous Materials means and includes any
substance or material defined or designated as hazardous or toxic waste, hazardous or toxic
material, a hazardous, toxic or radioactive substance, or other similar term, by any Hazardous
Materials Laws including any federal, state or local environmental statute, regulation or ordinance
presently in effect that may be promulgated in the future, as such statutes, regulations and
ordinances may be amended from time to time.
The term “Hazardous Materials” does not include: (1) construction materials, gardening
materials, household products, office supply products or janitorial supply products customarily
used in the construction or maintenance, of residential developments, or typically used in office or
residential activities; or (2) certain substances which may contain chemicals listed by the State of
California under California Health and Safety Code Sections 25249.8 et seq., which substances
are commonly used by a significant portion of the population living within the region of the
Development, including, but not limited to, alcoholic beverages, aspirin, tobacco products,
nutrasweet and saccharine, so long as such materials and substances are stored, used and disposed
of in compliance with all applicable Hazardous Materials Laws.
“Hazardous Materials Laws” means all federal, state, and local laws, ordinances,
regulations, orders and directives pertaining to Hazardous Materials in, on or under the
Development or any portion thereof.
“Housing Agreements” or “Housing Agreement”, as applicable, means the Housing
Agreements between the Developer and the Authority in the form of Exhibit H that will be
recorded against the Developer’s fee interest in the Phase I Parcel and Phase II Parcel and all
improvements thereon, and will restrict the household income levels for occupancy of the Units
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thereon to Extremely Low, Very-Low and Low Income Households and will restrict the rent to
affordable rent.
“Low Income Household” means a household with an income that does not exceed the
qualifying limits for lower income households, adjusted for actual household size, for Riverside
County, as published and periodically updated by HCD under Section 50079.5 of the California
Health and Safety Code, or successor provision.
“Maintenance Easement” means an easement over Parcel 9 prepared by the Developer
and approved by the City granting the Developer and the Phase II Parcel owner the right of access
to clear sand from the outside of the Phase I Wall and the Phase II Wall abutting the Maintenance
Easement area, substantially in the form of Exhibit B-3.
“Notices of Restrictions” or “Notice of Restrictions”, as applicable, shall mean the
Notices of Affordability Restrictions in the form attached hereto as Exhibit G, which are to be
recorded against the Phase I Parcel and the Phase II Parcel upon the closing of the sales thereof.
“Notice of Default” is defined in Section 8.5.
“Official Records” means the official land records of Riverside County.
“Parcel” means either the Phase I Parcel or the Phase II Parcel, as the context requires.
“Parcel Map” means the Parcel Map prepared by the Developer and approved by the City
subdividing the Property into the two Phases and recorded in the Official Records of the County
of Riverside with any recording costs paid by the Developer.
“Parcel 9” means the City-owned parcel abutting the Phase I Parcel and the Phase II Parcel
described in Exhibit A-3.
“Parcel 9 Easement” means the easement for ingress and egress of over a portion of Parcel
9 prepared by the Developer and approved by the City benefiting Parcel I and granting the right to
the Developer to improve the easement with street improvements, substantially in the form of
Exhibit B-2.
“Parties” means collectively the City, the Authority and the Developer and the term Party
refers to each of them individually.
“Phase” shall mean the Phase I Development or the Phase II Development, as the context
requires.
“Phase I Development” means the development of at least one hundred twenty-one (121)
units of housing, required offsite infrastructure improvements and parking constructed on the
Phase I Parcel, all as more fully set forth in the Scope of Development.
“Phase II Development” means the development of at least one hundred twenty (120)
units of housing, required offsite infrastructure improvements and parking constructed on the
Phase II Parcel, all as more fully set forth in the Scope of Development.
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“Parcel I and Parcel II Access Easement” means the reciprocal easement prepared by
the Developer and approved by the City for ingress and egress of over Parcel I and Parcel II and
granting the Phase II Parcel owner the right of reasonable access to the Phase I Development
common facilities, substantially in the form of Exhibit B-1.
“Phase I Parcel” means the property generally described in Exhibit A-1.
“Phase II Parcel” means the property generally described in Exhibit A-2.
“Promissory Notes” or “Promissory Note”, as applicable, shall mean the promissory
notes that will evidence the Developer’s obligation to repay the applicable Authority Loan for a
Phase as set forth in this Agreement, and shall be in the form of Exhibit E. Each Phase of the
Development will have its own Promissory Note and shall not be cross-collateralized.
“Property” means the property generally described in the legal description attached as
Exhibit A, consisting of the Phase I Parcel and the Phase II Parcel.
“Residual Receipts” in a particular calendar year for a Phase shall mean the cash (without
regard to the source) derived from the operation of such Phase of the Development minus the
following for that Phase, determined on a cash basis: (i) all real estate and personal property taxes
and assessments, insurance premiums and reasonable costs of maintenance, operation and
management incurred by the Developer in connection with the operation and maintenance,
(ii) property management fees not to exceed four and one-half percent (4.5%) of the gross revenue
of the Phase, (iii) the costs of servicing the senior construction loan/financing (and any approved
refinancing thereof) and other sources of permitted financing; (iv) amounts necessary to maintain
a guaranty or other form of security or bond for an operation reserve account, (v) amounts
deposited into a replacement initially capitalized reserve account in the minimum sum of Three
Hundred Twenty-Five Dollars ($325.00) per unit per annum, (vi) the repayment of any amounts
loaned by the Developer for material development costs which costs were not reasonably
foreseeable, (vii) deferred developer fees (viii) a limited partner monitoring fee in the annual
amount of Five Thousand Dollars ($5,000.00) per year unless fully paid a permanent loan
conversion; (ix) a managing general partner fee in the annual amount of Fifteen Thousand Dollars
($15,000.00), increasing three percent (3%) annually; and (xi) an administrative general partner
fee in the annual amount of Ten Thousand Dollars ($10,000.00), increasing three percent (3%)
annually. In no event shall depreciation/amortization be deducted from cash revenues. Residual
Receipts shall be determined by Developer and Authority on a cash basis without regard to any
carry-over profit or loss from any prior calendar year, and shall be determined annually, on or
before June 1st for the preceding calendar year. Any deferred developer fee, limited partner
monitoring fee, managing general partner fee, and administrative general partner fee may not
accrue interest.
“Schedule of Performance” means the schedule attached as Exhibit C setting forth the
schedule for the Developer’s acquisition and development of the Phase I Parcel and the acquisition
and development of the Phase II Parcel and the construction of the Phase I Development and the
Phase II Development and other deadlines.
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“Scope of Development” shall mean the description of the Development, including a basic
site plan, which will serve as a basis for the Developer’s application for the City Approvals. The
Scope of Development is attached to this Agreement as Exhibit I.
“Security Financing Interest” means a mortgage, deed of trust, or other reasonable
method of security encumbering the Developer’s fee interest in the Phase I Parcel and the Phase
II Parcel that: (i) meets the requirements of this Agreement; and (ii) secures any construction or
permanent loan shown on the Financing Proposal, or any refinancing approved by the Authority.
“TCAC” means the California Tax Credit Allocation Committee.
“TCAC Regulatory Agreement” means the regulatory agreement entered into between
the Developer and TCAC regulating the affordability of each Phase to be recorded as an
encumbrance on the Property.
“Title Company” means First American Title Company, or such other title company as
the Parties may mutually select.
“Title Report” is defined in Section 2.19.
“Transfer” has the meaning set forth in Section 7.1.
“Unit” means one of the residential units to be constructed on the Property.
“Very Low Income Household” means a household with an income that does not exceed
the qualifying limits for very low income households, adjusted for actual household size, for
Riverside County, as published and periodically updated by HCD under Section 50105 of the
California Health and Safety Code, or successor provision.
Exhibits. The following exhibits are attached to and incorporated in this Agreement:
Exhibit A: Legal Description of the Property
Exhibit A-1: Legal Description of Phase I Parcel
Exhibit A-2: Legal Description of Phase II Parcel
Exhibit A-3: Depiction of Parcel 9
Exhibit B-1: Phase I and Phase II Access Easement
Exhibit B-2: Parcel 9 Easement
Exhibit B-3: Maintenance Easement
Exhibit C: Form of Grant Deed
Exhibit D-1: Form of Phase I Density Bonus Agreement
Exhibit D-2: Form of Phase II Density Bonus Agreement
Exhibit E: Form of Promissory Note
Exhibit F: Form of Deed of Trust
Exhibit G-1: Form of Phase I Notice of Affordability Restrictions
Exhibit G-2: Form of Phase II Notice of Affordability Restrictions
Exhibit H-1: Form of Phase I Housing Agreement
Exhibit H-2: Form of Phase II Housing Agreement
Exhibit I: Scope of Development (Phase I and Phase II)
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Exhibit J: Schedule(s) of Performance (Phase I and Phase II)
Exhibit K-1: Financing Plan – Phase I
Exhibit K-2: Financing Plan – Phase II
ARTICLE 2
CONDITIONS FOR
CONVEYANCE OF EACH PHASE
Section 2.1 City Right to Terminate for Failure to Timely Obtain Tax Credits;
Other City Conditions Precedent to Conveyance. The City Manager may terminate this Agreement
on behalf of the City in his or her sole and absolute discretion if Developer fails to obtain by
December 31, 2024 an award of tax credits that is materially consistent with the Financing
Proposal. The requirements set forth in this Article 2 are conditions precedent to the City’s
obligation to convey a Phase to the Developer. The City has no obligation to convey a Phase to
the Developer unless the conditions precedent set forth in this Article 2 have been satisfied in the
manner set forth below and within the timeframe set forth in the Schedule of Performance. The
closing of the conveyance of the Phase I Parcel must occur on or before March 1, 2025 (or either
party who is not in default may terminate this Agreement by written notice to the other). The
closing of the conveyance of the Phase II Parcel must occur on or before March 1, 2026 (or either
party who is not in default may terminate this Agreement by written notice to the other).
Section 2.2 City Approvals. Prior to or concurrently with the conveyance of a
Phase, the Developer must have obtained the City Approvals for the Phase and the Developer must
have paid the required fees to the City and must have provided letters from the applicable bonding
company(s) agreeing to issue the required improvement bonds upon the Close of Escrow.
Section 2.3 Parcel Map. The Parcel Map subdividing the Property into the
Phase I Parcel and the Phase II Parcel must be approved by the City, in its sole and absolute
discretion, and the Developer; the Parcel Map must be been recorded prior to the Close of Escrow
for the conveyance of Phase I; and the Developer must have paid the costs related to recording the
Parcel Map. All applicable subdivision improvement agreements and “CC&Rs” and the like that
are conditions of approval of the Parcel Map must be executed and delivered/recorded prior to or
concurrently with the applicable Close of Escrow.
Section 2.4 Financing. The financing listed in the Financing Proposal shown in
Exhibit C for the appropriate Phase must close concurrently with the Close of Escrow for the
Phase.
Section 2.5 Permits. The City must have issued a “Ready to Issue” letter
regarding the Building Permit, and the Developer must have paid the Building Permit fees prior to
or concurrently with the applicable Close of Escrow, and must have executed and delivered all
agreements and other documents required in connection with the Building Permit (such as a
grading agreement).
Section 2.6 Tax Credits. The tax credits necessary to help finance the applicable
development must have been awarded, and Developer shall have provided evidence thereof to
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City, together with reasonable evidence that tax credit investors shall have legally committed to
provide equity funds sufficient to pay all development costs not being paid with loans/debt.
Section 2.7 Loan Closings. All loans necessary to finance costs in the City-
approved revised Financing Proposal/Plan shall have closed (or shall close concurrently with the
applicable Close of Escrow) such that the lenders are conditionally obligated to disburse their loan
funds (so that the applicable development can be completed), and copies of the applicable loan
documents (or drafts that are final in all material respects) shall have been provided to City.
Section 2.8 Construction Plans. The Developer shall prepare construction plans
for the construction of the development of each Phase. The final construction plans for the
development of each submitted by the Developer for City approval shall consist of all construction
documentation upon which the Developer and its contractors shall rely in building the Phase I
Development and the Phase II Development. Such construction plans shall include (without
limitation) final architectural drawings, landscaping plans and specifications, final elevations,
building plans and specifications (also known as “working drawings”). The construction plans
shall be based upon the Approved Plans and shall not materially deviate from them without the
written consent of the City. As set forth in Section 10.14, the Developer acknowledges that
execution of this Agreement by the City does not constitute approval by the City of any required
permits and in no way limits the discretion of the City in the permit approval process.
As part of the Developer’s application for a Building Permit, the City shall also have the
right to review and approve the proposed construction plans for conformance with the Approved
Plans and the other commitments made by the Developer to the City. The Developer
acknowledges that the City’s right to review and approve the proposed construction plans as
allowed by this paragraph is in addition to, and shall not be limited by, the City’s obligation to
review the Developer’s proposed construction plans for consistency with applicable building and
construction code requirements.
As approved, these construction plans for the applicable component of the Development
shall be referred to as the “Construction Plans”.
Section 2.9 Construction Contract. Developer shall have delivered to City a
copy of an executed Guaranteed Maximum Price or Stipulated Sum construction contract for the
applicable Phase, which shows a development cost consistent with the revised Financing
Proposal/Plan and equity and debt funds committed to the applicable development.
Section 2.10 Cost Estimate. The Developer’s construction lender must have
shared its construction cost estimate with the City or, in the alternative, if the construction lender
is unwilling to share its cost estimate, the City has obtained an independent cost estimate at the
Developer’s cost to confirm the reasonableness of the construction costs.
Section 2.11 Construction Bonds. At least seven (7) days prior to Close of
Escrow, the Developer shall deliver to the City forms of one (1) labor and material bond and one
(1) performance bond for the Development issued by a reputable insurance company licensed to
do business in California, and named in the current list of “Surety Companies Acceptable on
Federal Bonds” as published in the Federal Register by the Audit Staff Bureau of Accounts, U.S.
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Treasury Department, and reasonably acceptable to the City, each in a penal sum of not less than
one hundred percent (100%) of the scheduled cost of construction of the Phase for the City’s
review and approval. The bonds shall name the City as co-obligee. Upon receipt by the City of
the proposed payment and performance bonds, the City shall promptly review such bonds and
approve them if they satisfy the criteria set forth above and include any other modification
reasonably requested by the City. If the payment and performance bonds are not approved by the
City, the City shall set forth in writing and notify the Developer of the City’s reasons for
withholding such approval. The Developer shall thereafter submit revised payment and
performance bonds for City approval, which approval shall be granted or denied in five (5)
business days in accordance with the criteria and procedures set forth above.
Section 2.12 Developer Organizational Documents. The Developer has provided
the Developer organizational documents to the City for its review and the City has approved the
documents.
Section 2.13 Authority Loans. The Authority must be ready to make the
applicable Authority Loan in the amount necessary to acquire the Phase I Parcel or Phase II Parcel,
as appropriate, and the Developer shall have delivered the applicable City/Authority Documents,
duly executed, to the Authority.
Section 2.14 Tax Credit Equity. The City has approved the Developer’s proposed
uses of any tax credit equity paid as of the Close of Escrow to the Developer.
Section 2.15 City Easements. The Developer and City have agreed upon the final
forms of the Phase I and Phase II Access Easement, the Parcel 9 Easement and the Maintenance
Easement.
Section 2.16 Phase II Conveyance. As a condition to the Close of Escrow for the
Phase II Parcel only, the Close of Escrow for the Phase I Parcel shall have occurred, and Developer
shall not be in default under this DDLA or under the Authority loan relating to the Phase I Parcel.
Section 2.17 AHAP. The Developer and the Housing Authority of the County of
Riverside have entered into an Agreement to Enter into a Housing Assistance Payments Contract.
Section 2.18 Title Report Approved. The Developer has approved the following
preliminary report and the title exceptions therein (the “Title Report”) from the Title Company:
Amended Preliminary Report issued on August 22, 2022 under Order Number 997-30064151-A-
TC1. City shall not further encumber the Property after the date hereof without the prior written
consent of Developer.
ARTICLE 3
DISPOSITION OF PROPERTY
Section 3.1 Conveyances of Phase I Parcel and Phase II Parcel. Subject to the
satisfaction of the conditions to closing set forth above (which apply to each Phase, except as noted
in Section 2.15), the City will sell to the Developer, and the Developer will purchase from the City,
the Property under the terms, covenants, and conditions of this Agreement.
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Section 3.2 Purchase Prices. The Purchase Price for the Phase I Parcel shall be
One Million Nine Hundred Sixty-Five Thousand Five Hundred Thirty-Nine Dollars
($1,965,539.00). The Purchase Price for the Phase II Parcel shall be One Million Four Hundred
Fifty-Nine Thousand Four Hundred Sixty-One Dollars ($1,459,461.00).
Section 3.3 Deposits. Within thirty (30) days following the Effective Date,
Developer shall deposit $58,966.00 into Escrow as a good faith deposit for the acquisition of the
Phase I Parcel (the “Phase I Deposit”). Upon the Close of Escrow for Phase I, the Phase I Deposit
shall not be applied to the purchase price for the Phase II Parcel, but shall be returned to Developer,
as the Purchase Price is being paid by the loan from the Authority. If this Agreement is terminated
prior to the Close of Escrow for the Phase I Parcel for any reason other than a default by the
Developer, the Phase I Deposit shall be immediately refunded to the Developer upon the date the
Agreement is terminated.
Within thirty days after the Close of Escrow for Phase I Parcel, the Developer shall deposit
$43,784 into a Phase II Escrow as a good faith deposit for the acquisition of the Phase II Parcel
(the “Phase II Deposit”). Upon the Close of Escrow for Phase II, the Phase I Deposit shall not be
applied to the purchase price for the Phase II Parcel, but shall be returned to Developer, as the
Purchase Price is being paid by the loan from the Authority. If this Agreement is terminated as to
Phase II, and the termination is not due to a default by the Developer, the Phase II Deposit shall
be immediately refunded to the Developer upon the date the Agreement is terminated. The Phase
I Deposit and the Phase II Deposit shall each constitute liquidated damages to the City upon a
termination of this Agreement as to the applicable Phase/parcel due to a default by Developer.
BUYER ACKNOWLEDGES THAT BY ENTERING INTO THIS AGREEMENT,
SELLER MAY REMOVE THE PROPERTY FROM THE ACTIVE REAL ESTATE MARKET
AND THUS SUSTAIN MISSED OPPORTUNITIES AND EXTENDED CARRYING COSTS,
AS WELL AS OTHER DAMAGES. IN THE EVENT THAT THE ESCROW AND THIS
TRANSACTION FAIL TO CLOSE AS A RESULT OF THE DEFAULT OF BUYER IN THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, BUYER AND
SELLER AGREE THAT SELLER WILL SUSTAIN THESE AND OTHER DAMAGES, AND
THAT SELLER’S ACTUAL DAMAGES WOULD BE IMPRACTICABLE OR EXTREMELY
DIFFICULT TO DETERMINE. THE PARTIES THEREFORE AGREE THAT IN THE EVENT
THAT ESCROW AND THIS TRANSACTION FAIL TO CLOSE AS A RESULT OF A
MATERIAL DEFAULT OF BUYER, AND SELLER IS READY, WILLING AND ABLE TO
PERFORM ITS OBLIGATIONS HEREUNDER, SELLER, AS SELLER’S SOLE AND
EXCLUSIVE REMEDY, IS ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
THE INITIAL DEPOSIT THERETOFORE MADE. IN THE EVENT ESCROW FAILS TO
CLOSE SOLELY AS A RESULT OF BUYER’S DEFAULT AND SELLER IS READY,
WILLING AND ABLE TO PERFORM ITS OBLIGATIONS HEREUNDER, THEN (A) THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF BUYER AND SELLER
HEREUNDER AND THE ESCROW CREATED HEREBY SHALL TERMINATE, AND (B)
ESCROW AGENT SHALL, AND IS HEREBY AUTHORIZED AND INSTRUCTED TO,
RETURN PROMPTLY TO BUYER AND SELLER ALL DOCUMENTS AND INSTRUMENTS
TO THE PARTIES WHO DEPOSITED THE SAME. THE PAYMENT OF SUCH AMOUNT
AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY
WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369 BUT IS
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INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO
CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER AND BUYER
ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF
THIS SECTION 3.3(b), AND BY THEIR INITIALS IMMEDIATELY BELOW, AGREE TO BE
BOUND BY ITS TERMS.
SELLERS’ INITIALS:
__________________________
BUYER’S INITIALS
_________________
Section 3.4 Opening Escrow. To accomplish the transfer of the Phase I Parcel
and the Phase II Parcel from the City to the Developer, the Parties will promptly establish an
escrow for each transfer with the Title Company after the Effective Date. The Parties will execute
and deliver reasonable written instructions to the Title Company to accomplish the terms hereof,
which instructions must be consistent with this Agreement.
Section 3.5 Close of Escrow. The Close of Escrow shall occur within thirty (30)
days after the Developer has met all of the closing conditions as set forth in Article 2 above for a
particular Parcel, but in no event shall the Close of Escrow occur later than March 1, 2025 for the
Phase I Parcel, and in no event shall the Close of Escrow occur later than March 1, 2026 for the
Phase II Parcel. At the applicable Close of Escrow, the City shall convey a fee interest in the
applicable Parcel to the Developer by the delivery of a Grant Deed to Escrow in the form set forth
in the attached Exhibit C for recording at the Close of Escrow.
At the Close of Escrow for Phase I, the Developer shall execute and deliver to Escrow for
recording at the Close of Escrow, the Phase I and Phase II Access Easement, the Parcel 9 Easement
and the Maintenance Easement.
Developer’s obligation to proceed with the acquisition of the Property from the City
pursuant to the terms of this Agreement is subject to the fulfillment or waiver by Developer of
each and all of the conditions precedent described below (“Developer Conditions Precedent”). The
Developer Conditions Precedent are solely for the benefit of the Developer and shall be fulfilled
or waived within the time periods provided for herein, and in any event, no later than the date
specified in the Schedule of Performance.
There exists no condition, event or act which would constitute a breach or default under
this Agreement, the City Documents, the Development Approvals, or under any other project
financing agreements or contracts related to the Development, or which, upon the giving of notice
or the passage of time, or both, would constitute such a breach or default by the City.
Subject to payment of the applicable fees, City shall be ready to issue the building permit(s)
necessary for the Developer to Commence Construction of the Development.
The Title Company shall, upon payment of Title Company’s regularly scheduled premium,
be irrevocably committed to issue an owner’s title policy upon recordation of the applicable Grant
Deed insuring Developer’s interest in the Property, subject only to the exceptions in Section 3.7
below.
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The Parcel Map has been approved by the City and the Developer and has been recorded
or is ready to be recorded currently with the Close of Escrow in the Official Records of Riverside
County.
There shall be an absence of any condemnation, environmental or other pending
governmental or any type of administrative or legal proceedings with respect to the Property which
would materially and adversely affect Developer’s intended uses of the Property or the value of
the Property.
The City has executed and delivered to Escrow (x) the Phase I and Phase II Access
Easement, (y) the Parcel 9 Easement and (z) the Maintenance Easement.
The City has executed and delivered to Escrow applicable Housing Agreement and Notice
of Affordability Restrictions, duly executed and acknowledged.
There shall not have occurred between the Effective Date and the Closing a material
adverse change to the physical condition of the Property.
There is no existing, pending or threatened litigation, suit, action or proceeding before any
court or administrative agency affecting the City or the Developer or the Property that would, if
adversely determined, materially adversely affect the Development or the Developer’s or the
City’s ability to perform their obligations under this Agreement or the Developers’ ability to
develop and operate the Development.
Section 3.6 Costs of Escrow and Closing. The Developer must pay all of the
City’s and Authority’s legal fees and costs, the cost of title insurance, transfer tax, Title Company
document preparation, recordation fees, and the escrow fees of the Title Company, if any, and any
additional costs to close the applicable escrow. The costs borne by the Developer are in addition
to the Purchase Prices of the Parcels.
Section 3.7 Condition of Title. Upon the Close of Escrow for each Phase, the
Developer will take title subject to all title exceptions in the Title Report and all other liens,
encumbrances, clouds and conditions, rights of occupancy or possession, except, applicable
building and zoning laws and regulations;
(a) The conditions and easements on the Parcel Map;
(b) the Phase I and Phase II Access Easement;
(c) the applicable Housing Agreement;
(d) the applicable Density Bonus Agreement;
(e) the applicable Deed of Trust and Notice of Restrictions;
(f) any lien for current taxes and assessments or taxes and assessments
accruing subsequent to Close of Escrow;
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(g) the liens of any Approved Financing (approved by the City);
(h) any other matters created by or with the consent of Developer.
Section 3.8 Condition of Property; City Information. In fulfillment of the
purposes of Health and Safety Code Section 25359.7(a), to the City’s Current Actual Knowledge,
no release of Hazardous Materials has come to be located on or beneath the Property except as
previously disclosed by the City to the Developer. The Developer has completed all due diligence
activities, including but not limited to a physical adequacy determination of the Property, and may
not terminate this Agreement as a result of the purported physical unsuitability of the Property. As
used in this Agreement, the phrase “to the City’s Current Actual Knowledge” and words of similar
import shall mean the actual knowledge of the City Manager (the “City Representative”), on behalf
of the City, as of the Effective Date, without any duty of separate inquiry and investigation. The
City represents and warrants that the City Representative is that person affiliated with the City
most knowledgeable regarding the ownership and operation of the Property. Developer hereby
agrees that the foregoing person shall not have or incur any personal liability for the breach of any
representation or warranty in this Agreement, and that Developer’s sole remedy for any such
breach shall be against the City.
Section 3.9 “As is” Conveyance. Prior to the effective date, the Developer was
provided the opportunity to investigate the Property and has approved the physical condition of
the Property. The Developer specifically acknowledges and agrees that the City is selling each
Phase of the Property to the Developer and the Developer is buying each Phase of the Property
from the City (and all thereon) on an “as is with all faults” basis and that the Developer is not
relying on any representations or warranties of any kind whatsoever, express (except as expressly
set forth in this agreement) or implied, from the City as to any matters concerning the Property,
including without limitation: (1) the quality, nature, adequacy and physical condition of the
Property (including, without limitation, topography, climate, air, water rights, water, gas,
electricity, utility services, grading, drainage, sewers, access to public roads and related
conditions); (2) the quality, nature, adequacy, and physical condition of soils, geology, and
groundwater; (3) the existence, quality, nature, adequacy and physical condition of utilities serving
the Property; (4) the development potential of the Property, and the Property’s use, habitability,
merchantability, or fitness, suitability, value or adequacy of the Property for any particular
purpose; (5) public or private restrictions on the use of the Property; (6) the compliance of the
Property or its operation with any applicable codes, laws, regulations, statutes, ordinances,
covenants, conditions and restrictions of any governmental or quasi-governmental entity or of any
other person or entity; (7) the presence or absence of hazardous materials on, under or about the
Property or the adjoining or neighboring property; and (8) the condition of title to the Property.
The Developer affirms that the Developer has not relied on the skill or judgment of the City or any
of its agents, employees or contractors to select or furnish the Property for any particular purpose,
and that the City makes no warranty that the Property is fit for any particular purpose. The
Developer acknowledges that it shall use its independent judgment and make its own determination
as to the scope and breadth of its due diligence investigation which it shall make relative to the
Property and shall rely upon its own investigation of the physical, environmental, economic, and
legal condition of the Property (including, without limitation, whether the Property is located in
any area which is designated as a special flood hazard area, dam failure inundation area, earthquake
fault zone, seismic hazard zone, high fire severity area or wildland fire area, by any federal, state
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or local agency). The Developer undertakes and assumes all risks associated with all matters
pertaining to the Property’s location in any area designated as a special flood hazard area, dam
failure inundation area, earthquake fault zone, seismic hazard zone, high fire severity area or
wildland fire area by any federal, state or local agency.
Section 3.10 Survival. The terms and conditions of this Section expressly survive
the Close of Escrow. The City is not liable or bound in any manner by any oral or written
statements, representations, or information pertaining to the Property furnished by any contractor,
agent, employee, servant, or other person. The Developer acknowledges that the lease price will
reflect the “as is” nature of this sale and any faults, liabilities, defects, or other adverse matters that
may be associated with the Property. The Developer has fully reviewed the disclaimers and
waivers set forth in this Agreement with the Developer’s counsel and understands the significance
and effect thereof.
Section 3.11 Acknowledgment. The Developer acknowledges and agrees that:
(1) to the extent required to be operative, the disclaimers of warranties contained in this Section
are “conspicuous” disclaimers for purposes of all applicable laws and other legal requirements;
and (2) the disclaimers and other agreements set forth in such sections are an integral part of this
Agreement, that the lease price will be adjusted to reflect the same and that the City would not
have agreed to lease the Property to the Developer without the disclaimers and other agreements
set forth in this Section.
Section 3.12 Developer’s Release. The Developer, on behalf of itself and anyone
claiming by, through or under the Developer hereby waives its right to recover from and fully and
irrevocably releases the City and the Authority, and City Council members, Authority board
members and the officers, directors, representatives, consultants, employees and agents of City
and/or Authority (the “Released Parties”) from any and all claims, responsibility, and/or liability
that the Developer may have or hereafter acquire against any of the Released Parties for any costs,
loss, liability, damage, expenses, demand, action or cause of action arising from or related to:
(1) the condition (including any construction defects, errors, omissions or other conditions, latent
or otherwise), valuation, salability or utility of the Property, or its suitability for any purpose
whatsoever; (2) any presence of Hazardous Materials; and (3) any information furnished by the
Released Parties under or in connection with this Agreement.
Section 3.13 Scope of Release. The release set forth in Section 3.7(e) above
includes claims of which the Developer is presently unaware or which the Developer does not
presently suspect to exist which, if known by the Developer, would materially affect the
Developer’s release of the Released Parties. The Developer specifically waives the provision of
any statute or principle of law that provides otherwise. In this connection and to the extent
permitted by law, the Developer agrees, represents and warrants that the Developer realizes and
acknowledges that factual matters now unknown to the Developer may have given or may hereafter
give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses and
expenses which are presently unknown, unanticipated and unsuspected, and the Developer further
agrees, represents and warrants that the waivers and releases herein have been negotiated and
agreed upon in light of that realization and that the Developer nevertheless hereby intends to
release, discharge and acquit the Released Parties from any such unknown causes of action, claims,
demands, debts, controversies, damages, costs, losses and expenses. Accordingly, the Developer,
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on behalf of itself and anyone claiming by, through or under the Developer, hereby assumes the
above-mentioned risks and hereby expressly waives any right the Developer and anyone claiming
by, through or under the Developer, may have under Section 1542 of the California Civil Code,
which reads as follows:
“A general release does not extend to claims which the creditor
or released party does not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him
or her must have materially affected his or her settlement with
the debtor or released party.”
Developer’s Initials: __________
Notwithstanding the foregoing, this release does not apply to, nor will the City be released from,
the City’s actual fraud or misrepresentation.
ARTICLE 4
CONSTRUCTION OF DEVELOPMENT
Section 4.1 Construction and Operation Consistent with Agreements. Unless
modified by operation of Section 4.2, the Development must be constructed in accordance with
the Scope of Development, the Construction Plans and the terms and conditions of the Approved
Plans and the City Approvals. The Developer shall comply with all standards and requirements
for construction, use, operation, maintenance, management and encumbrance of the Development
which are set forth in this Agreement and the City Approvals. As between the City and the
Developer, the Developer shall be solely responsible for all costs necessary for the construction
and operation of the Development, including, but not limited to, any construction cost overruns.
Developer shall defend, indemnify and hold City harmless from and against any and all claims,
liabilities, damages, losses, costs and expenses arising directly or indirectly from or relating to any
allegations that City is liable for failure by Developer to pay prevailing wages and/or comply with
California Labor Code Sections 1720 et seq. (The foregoing is not an admission by Developer or
City that prevailing wages are required in connection with any development on either Phase.)
Section 4.2 Commencement of Developments; Interim Deadlines. The
Developer must commence construction of the Phase I Development no later than May 30, 2025.
The Developer must commence construction of the Phase II Development no later than May 30,
2026. For purposes of this Section 4.2, commencement of construction means the material
commencement of grading of the Phase.
Section 4.3 Completion of the Developments. Subject to Section 10.3 below,
the Developer must diligently prosecute to completion the construction of each Phase, and the
Phase I Development must be completed no later than May 30, 2027, and the Phase II Development
must be completed no later than May 30, 2028.
Section 4.4 Equal Opportunity. During the construction of the Development,
the Developer, and its successors, assigns, and subcontractors must not discriminate against any
employee or applicant for employment in connection with the construction of the Development on
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any basis listed in Section 12940 of the Government Code. Each of the following activities must
be conducted in a non-discriminatory manner: hiring; upgrading; demotion and transfers;
recruitment and recruitment advertising; layoff and termination; rate of pay and other forms of
compensation; and selection for training including apprenticeship.
Section 4.5 Construction Under Laws.
(a) Compliance with Project Documents. Developer shall construct the
Development in conformance with the Approved Plans, Approved Financing, and Financing
Proposal and consistent with the City Approvals. Developer shall notify the City in a timely
manner of any changes in the work required to be performed under this Agreement, including any
additions, changes, or deletions to the plans and specifications approved by the City.
(b) Compliance with Laws. Developer shall cause all construction work
to be performed in compliance with, without limitation: (1) all applicable laws, ordinances, rules
and regulations of federal, state, county or municipal governments or agencies now in force or that
may be enacted hereafter, including without limitation state prevailing wages pursuant to Labor
Code Sections 1770 et seq., and the regulations pursuant thereto; (2) all applicable federal and
state accessibility requirements; and (3) all directions, rules and regulations of any fire marshal,
health officer, building inspector, or other officer of every governmental agency now having or
hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit,
license, or other authorization that may be required by any governmental agency having
jurisdiction, and Developer shall be responsible to the City for the procurement and maintenance
thereof, as may be required of Developer and all entities engaged in work on the construction.
(c) Prevailing Wage Laws. The Project is a work of public improvement
such that Developer shall pay prevailing wages under California Labor Code Sections 1770 et seq.
and shall comply with the other requirements of such statutes. Developer shall defend, indemnify
and hold City and Authority harmless from and against any and all claims, liabilities, losses,
damages, costs and expenses arising from or relating to any failure by Developer to do so.
Section 4.6 Progress Reports. Until such time as the Developer has completed construction of
the Development, as evidenced by the Certificate of Completion, the Developer must provide the
City with quarterly progress reports regarding the status of the construction of the Development.
Section 4.7 Construction Responsibilities. The Developer shall comply with the
Schedule of Performance.
(a) The Developer is solely responsible for all aspects of the
Developer’s conduct in connection with the Development, including but not limited to the quality
and suitability of the Construction Plans, the supervision of construction work, and the
qualifications, financial condition, and performance of all architects, engineers, contractors,
subcontractors, suppliers, consultants, and property managers. Any review or inspection
undertaken by the City with reference to the Development is solely for the purpose of determining
whether the Developer is properly discharging its obligations to the City and should not be relied
upon by the Developer or by any third parties as a warranty or representation by the City as to the
quality of the design or construction of the Development.
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Section 4.8 Mechanics Liens, Stop Notices, and Notices of Completion. If any
claim of lien is filed against the Property or the Development or a stop notice is served on any
lender or other third party in connection with the Development, then the Developer must, within
twenty (20) days after such filing or service, either pay and fully discharge or cause the
Developer’s contractor to pay and fully discharge, the lien or stop notice, effect the release of such
lien or stop notice by delivering to the City a surety bond from a surety reasonably acceptable to
the City in sufficient form and amount, or provide the City with other assurance reasonably
satisfactory to the City that the claim of lien or stop notice will be paid or discharged.
(a) If the Developer fails to discharge any lien, encumbrance, charge,
or claim in the manner required in this Section or obtain a surety bond, then in addition to any
other right or remedy, the City may (but is under no obligation to) discharge such lien,
encumbrance, charge, or claim at the Developer’s expense. Alternatively, the City may require
the Developer to immediately deposit with the City the amount necessary to satisfy such lien or
claim and any costs, pending resolution thereof. The City may use such deposit to satisfy any
claim or lien that is adversely determined against the Developer.
(b) The Developer must file a valid notice of cessation or notice of
completion upon cessation of construction of the Development for a continuous period of thirty
(30) days or more and take all other reasonable steps to forestall the assertion of claims of lien
against the Property or the Development. The Developer authorizes the City, but without any
obligation, to record any notices of completion or cessation of labor, or any other notice that the
City deems necessary or desirable to protect its interest in the Development and Property.
Section 4.9 Inspections. The Developer must permit and facilitate, and require
its contractors to permit and facilitate, observation and inspection at the Development by the City
and the Authority during business hours with reasonable notice.
Section 4.10 Records. The Developer must maintain complete, accurate, and
current records pertaining to the Development for a period of seven (7) years after the creation of
such records, and permit any duly authorized representative of the City to inspect and copy records
during regular business days/hours. Records must be kept accurate and current, and shall be kept
at Developer’s corporate office at 100 Pacifica, Suite 203, Irvine, California. Upon reasonable
written notice from the City requesting to review specified Developer records, the Developer shall
deliver the records to the City’s offices within fifteen (15) days following the City’s request.
(a) The City will notify the Developer of any records it deems
insufficient. The Developer will have thirty (30) days after delivery of such a notice to correct any
deficiency in the records specified by the City in such notice, or if a period longer than thirty (30)
days is reasonably necessary to correct the deficiency, then the Developer must begin to correct
the deficiency within thirty (30) days and complete the correction of the deficiency as soon as
reasonably possible.
Section 4.11 Certificate of Completion. Promptly after completing the
Development on a Parcel (Phase I or II) in accordance with those provisions of this Agreement
that relate solely to the obligations of Developer to construct the Development (including the dates
for beginning and completion thereof), the City will provide a Certificate of Completion so
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certifying (the “Certificate of Completion”). The Certificate of Completion will be the conclusive
determination that certain covenants in this Agreement with respect to the obligations of the
Developer to construct the Development (excluding the Developer’s compliance with Section 4.6)
and the dates for the beginning and completion thereof have been met. The Certificate of
Completion shall be in such form as will enable such certificate to be recorded in the Official
Records. The Certificate of Completion will not constitute evidence of compliance with or
satisfaction of any obligation of the Developer to: (a) any holder of a Security Financing Interest.
The Certificate of Completion may not be deemed a notice of completion under the California
Civil Code.
ARTICLE 5
AUTHORITY LOAN PROVISIONS
Section 5.1 Authority Loans. Subject to the terms and conditions set forth in
this Agreement, the Authority shall make a loan to the Developer for the Phase I Development in
the original principal amount of $1,965,539 and a loan for the Phase II Development in the original
principal amount of not less than $4,789,461. The Authority Loan shall be evidenced by two
promissory notes: (a) a Promissory Note for the Phase I Development executed by Developer in
favor of City in the amount of $1,965,539 secured by the Deed of Trust executed by the Developer
as trustor in favor of the City as beneficiary and recorded against the Developer’s fee interest in
the Phase I Parcel. and (b) a Promissory Note for the Phase II Development executed by Developer
in favor of City in the amount not less than $4,789,461 secured by the Deed of Trust executed by
the Developer as trustor in favor of the City as beneficiary and recorded against the Developer’s
fee interest in the Phase II Parcel.
Section 5.2 Use of Authority Loan. The proceeds of the Authority Loans shall
be used to fund the acquisition (pay the purchase prices) of the Parcels, and the remainder of the
Authority Loan for the Phase II Development shall be used for construction costs of the Phase II
Development.
Section 5.3 Delivery of Promissory Notes; Recording of Housing Agreements;
Deeds of Trust; Notices of Restrictions. Prior to the Close of Escrow and in accordance with the
Schedule of Performance, the City shall cause escrow holder to first record the Subdivision Map.
Upon and as a condition to the Close of Escrow for a Parcel, the escrow holder shall first record
the applicable grant deed, and then the applicable Housing Agreement and Density Bonus
Agreement for that Phase, the applicable Notice of Restrictions and then the applicable Deed of
Trust for the applicable Agency Loan (with no intervening recordings). The Housing Agreement
and Notice of Restrictions shall remain in full force and effect for fifty-five (55) years after the
issuance of the final Certificate of Occupancy for the Development on the applicable Phase,
regardless of any repayment of the applicable Authority Loan following a Developer Event of
Default or otherwise. The Executive Director of the Authority shall have the authority to execute
reasonable subordination agreements subordinating the Authority Deed of Trust for a Phase to the
deeds of trust securing other construction and permanent financing, provided copies of the senior
loan documents shall have been provided for the City’s reasonable review.
Section 5.4 Term of the Authority Loan. Unless sooner due under the terms of
the applicable Note, all principal and interest on the applicable Authority Loan shall be due upon
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the earliest of: a Transfer of any portion of the applicable collateral Property or the Developer’s
interest in such Property other than a Transfer permitted or approved by the Authority as provided
in Section 10.6;
(a) the occurrence of a Developer Event of Default for which the
Authority exercises its right to cause the Authority Loan indebtedness to become immediately due
and payable, or
(b) a default under the Housing Agreement which has not been cured
within the time periods specified therein.
(c) Fifty-five (55) years from the date of the applicable final Certificate
of Occupancy.
Section 5.5 Interest; Payments. Simple interest at three percent (3%) per annum
shall accrue on the outstanding principal amount of the applicable Authority Loan except in a
Developer Event of Default, whereupon interest shall accrue from and after the date of the
applicable Promissory Note until paid at the rate of ten percent (10%) or the highest rate permitted
by law. Payments shall be structured as residual receipts payments over the course of the
applicable Authority Loan and shall first be applied to interest then to principal.
Section 5.6 Disbursement of Authority Loans; Disbursement of Authority Loan
for Phase I. The Authority shall deposit into Escrow the Phase I loan. The Phase I funds shall be
disbursed by escrow holder to pay the Phase I Purchase Price.
Section 5.7 Disbursement of Authority Loan for Phase II. The Authority shall
deposit into Escrow the Phase II loan in the amount of the Phase II Parcel purchase price. The
Authority shall also deposit into Escrow the remainder of such loan together with a counterpart of
the agreement with the primary construction lender governing that lender’s holding and
disbursement of the City’s construction loan funds, with instructions to deliver such funds to such
lender provided Escrow has an executed counterpart of such agreement from such lender that is to
be delivered to the Authority. If no such agreement is reached or executed and delivered, then
Authority shall disburse the construction loan portion of its Phase II loan, not more often that once
every thirty (30) days, pursuant to normal and reasonable construction loan disbursement
conditions, including that Developer not be in default under the applicable loan documents, that
Developer shall have submitted a draw request certifying that the Authority loan is “in balance”
(enough undisbursed funds from committed loans exist to pay all Project construction costs) and
specifying the costs to be paid (by line item in the budget) with reasonable evidence of such costs,
conditional partial mechanics lien releases from payees of the current draw and unconditional
partial mechanics lien releases for the costs/work paid with the previous draw of construction loan
funds.
Section 5.8 Repayment Schedule. The Authority Loans shall be repaid as
follows:
(a) Payments. Commencing on the first June 1st following the
completion of the Phase, and on each June 1st thereafter until the applicable Promissory Note is
paid in full, the Developer shall make repayments of the applicable Authority Loan from fifty
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percent (50%) of Residual Receipts. The Authority will share the fifty percent (50%) of Residual
Receipts payment with the other public entities providing loans to the Developer for the respective
Phase. The Authority’s percentage share of fifty percent (50%) of Residual Receipts shall be equal
to the percentage derived by dividing the Authority loan amount by the combined total of the
Authority Loan and the other public entity loans committed to the Developer. The Developer shall
provide the Authority, within one hundred eighty (180) days following the end of each calendar
year, an Annual Financial Statement showing the actual income and expenditures with respect to
the Development for the immediately preceding calendar year. Payments made shall be credited
first against accrued interest and then against outstanding principal.
(b) Payment in Full. All principal and interest, if any, on the applicable
Authority Loan shall, at the option of the Authority, be due and payable upon the earliest of: (1) a
Transfer other than a Transfer permitted or approved by the Authority as provided in Article 7
below; (2) the occurrence of an Event of Default for which the Authority exercises its right to
cause the applicable Authority Loan indebtedness to become immediately due and payable; or (3)
the maturity date of the applicable Promissory Note.
(c) Prepayment. The Developer shall have the right to prepay the
Authority Loans at any time.
Section 5.9 Reports and Accounting of Residual Receipts; Audited Financial
Statement. In connection with the annual repayment of the Authority Loans, the Developer shall
furnish to the Authority an Annual Financial Statement.
Section 5.10 Books and Records. The Developer shall keep and maintain full,
complete and appropriate books, record and accounts relating to the Development, including all
such books, records and accounts necessary or prudent to evidence and substantiate in full detail
the Developer’s calculation of the applicable Residual Receipts, at the Developer’s corporate
office currently at 100 Pacifica, Suite 203 in the City of Irvine. Books, records and accounts
relating to the Developer’s compliance with the terms, provisions, covenants and conditions of this
Agreement shall be kept and maintained in accordance with generally accepted accounting
principles consistently applied and shall be consistent with requirements of this Agreement which
provide for the calculation of Residual Receipts on a cash basis. All such books, records, and
accounts shall be open to and available for inspection by the Authority, its auditors or other
authorized representatives at reasonable intervals during normal business hours on reasonable prior
notice to the Developer. Copies of all tax returns and other reports that the Developer may be
required to furnish any governmental agency shall at all reasonable times be open for inspection
by the Authority at the place that the books, records and accounts of the Developer are kept. The
Developer shall preserve records on which any statement of Residual Receipts is based for a period
of not less than five (5) years after such statement is rendered.
Section 5.11 Non-Recourse. Following recordation of the applicable Deed of
Trust, and except as provided below, the Developer shall not have any direct or indirect personal
liability for payment of the principal of, or interest on, the applicable Authority Loan or the
performance of the covenants of the Developer under the applicable Deed of Trust. The sole
recourse of the Authority with respect to the principal of, or interest on, the applicable Promissory
Note and defaults by the Developer in the performance of its covenants under the applicable Deed
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of Trust shall be to the property described in such Deed of Trust; provided, however, that nothing
contained in the foregoing limitation of liability shall: (a) limit or impair the enforcement against
all such security for the applicable Promissory Note of all the rights and remedies of the Authority
thereunder; or (b) be deemed in any way to impair the right of the Authority to assert the unpaid
principal amount of the applicable Promissory Note as demand for money within the meaning and
intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision
thereto.
The foregoing limitation of liability is intended to apply only to the obligation for the
repayment of the principal of, and payment of interest on the applicable Promissory Note, except
as hereafter set forth; nothing contained herein is intended to relieve the Developer of personal
liability for (1) fraud or willful misrepresentation; (2) the failure to pay taxes, assessments or other
charges (which are not contested by Developer in good faith) which may create liens on the
Property or Phase that are payable or applicable prior to any foreclosure under the applicable Deed
of Trust (to the full extent of such taxes, assessments or other charges); (3) the Developer’s
indemnification obligations under this Agreement; (4) misappropriation of any rents, security
deposits, insurance proceeds, condemnation awards or any other proceeds derived from the
collateral security and (5) payment to the Authority of any rental income or other income arising
with respect to the Property received by the Developer after the Authority has given notice to the
Developer of the occurrence of an Event of Default, subject to the rights of any lender providing
a loan secured by the Property to which Authority has subordinated the Deed of Trust.
ARTICLE 6
ONGOING DEVELOPER OBLIGATIONS
Section 6.1 Applicability. The conditions and obligations set forth in this
Article 6 apply throughout the term of the Regulatory Agreement, unless a different period of
applicability is specified for a particular condition or obligation.
Section 6.2 Use of Development. The Developer hereby agrees that, for the
entire Term, the Development will be used and continuously operated only as affordable housing
in accordance with all applicable requirements of the California Community Redevelopment Law
(the “Law”), including, but not limited to, the requirement that such housing be provided to
households described in Section 50079.5 of the Law, at rents not exceeding the amounts set forth
in Section 50053(b)(3). In the event of any conflict between the terms of this Agreement and the
Regulatory Agreement, the Developer shall comply with the stricter requirement. In addition, the
Developer shall comply with the TCAC Regulatory Agreement (each while they are in effect) all
other applicable laws, statutes, and regulations governing the Development, including, but not
limited to affordability restrictions of all other public entities encumbering the Phase and the
applicable requirements of Code Section 42, and all TCAC regulations, for such time that the
Development is subject to such regulations.
Section 6.3 Maintenance. The Developer agrees to maintain all interior and
exterior portions of the Development, including landscaping, of the Development in first-class
condition and repair and in a sanitary condition (and, as to landscaping, in a healthy condition,
subject to any restrictions on water use) and all applicable laws, rules, ordinances, orders, and
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regulations of all federal, state, municipal, and other governmental agencies and bodies having or
claiming jurisdiction and all their respective departments, bureaus, and officials.
(a) The Developer acknowledges the great emphasis the City places on
quality maintenance to protect its investment and to provide quality affordable and market-rate
housing for area residents. In addition, the Developer must keep the Development free from all
graffiti, and any accumulation of shopping carts, debris or waste material. The Developer must
promptly make all repairs and replacements necessary to keep the Development in first-class
condition and repair and promptly eliminate all graffiti and replace dead and diseased plants and
landscaping with comparable approved materials.
(b) In the event that the Developer breaches any of the covenants
contained in this Section and such default continues for a period of seven (7) days after written
notice from the City with respect to graffiti, debris, waste material, and general maintenance or
thirty (30) days after written notice from the City with respect to landscaping and building
maintenance, then the City, in addition to whatever other remedy it may have at law or in equity,
will have the right to enter upon the Property and perform or cause to be performed all such acts
and work necessary to cure the default. Under such right of entry, the City will be permitted (but
is not required) to enter upon the Property and perform all acts and work necessary to protect,
maintain, and preserve the Development and landscaped areas on the Property, and Developer
shall reimburse City for the costs thereof and a ten percent (10%) administrative charge within ten
(10) days after written demand with evidence of the costs.
Section 6.4 Taxes and Assessments. The Developer must pay all real and
personal property taxes, assessments and charges and all franchise, income, employment, social
security benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such
times and in such manner as to prevent any penalty from accruing, or any lien or charge from
attaching to the Property; provided, however, that the Developer has the right to contest in good
faith, any such taxes, assessments, or charges. In the event the Developer exercises its right to
contest any tax, assessment, or charge against it, the Developer, on final determination of the
proceeding or contest, must immediately pay or discharge any decision or judgment rendered
against it, together with all costs, charges and interest.
Section 6.5 Mandatory Language in All Subsequent Deeds, Leases and
Contracts; Basic Requirement. The Developer may not restrict the rental, sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the Development on any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code. Developer or any person
claiming under or through the Developer may 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 Development. The
foregoing covenant runs with the land.
Section 6.6 Provisions in Conveyance Documents. All deeds, leases or
contracts made or entered into by Developer, and its successor and assigns permitted under this
Agreement, as to any portion of the Property must contain therein the following language:
(1) In Deeds:
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“(1) Grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of any basis listed in
subdivision (a) and (d) of Section 12955 of the Government Code, as those bases are defined in
Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955
and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the property herein conveyed, nor shall the grantee or any person claiming
under or through the grantee, establish or permit any practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall
run with the land.
(2) Notwithstanding paragraph (1), with respect to familial
status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph
(1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code,
relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil
Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to
paragraph (1).”
(2) In Leases:
“(1) Lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of any basis listed in
subdivision (a) and (d) of Section 12955 of the Government Code, as those bases are defined in
Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955
and Section 12955.2 of the Government Code in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee or any person
claiming under or through the lessee, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.
(2) Notwithstanding paragraph (1), with respect to familial
status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph
(1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code,
relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil
Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to
paragraph (1).”
(3) In Contracts:
“(1) There shall be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision (a) and (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision
(m) and paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of the Government
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Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor
shall the transferee or any person claiming under or through the transferee establish or permit any
such practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land.
(2) Notwithstanding paragraph (1), with respect to familial
status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph
(1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code,
relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil
Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to
paragraph (1).”
Section 6.7 Management Agent. The Developer shall manage or cause the
Development to be managed in a prudent and business-like manner, consistent with good property
management standards for other comparable high quality, well-managed affordable rental housing
projects in the City of Palm Desert. The Developer shall be responsible for all repair and
maintenance functions of the Development, including ordinary maintenance and replacement of
capital items. The Developer shall ensure maintenance of units and common areas in accordance
with local health, building and housing codes. Developer may contract with an experienced
property management company or property manager, to operate and maintain the Development
(“Property Manager”). The Property Management contract shall be subject to prior written
approval by the City and shall contain a provision allowing the Developer, with the approval of
the lenders and the California Tax Allocation Committee, to terminate the contract without penalty
upon no more than thirty (30) days’ notice.
(a) The Developer will develop a management plan and deliver a copy
thereof to City as a condition to the closing of each Phase (a “Property Management Plan”). The
Property Management Plan shall include the following:
(1) The role and responsibility of the Developer and its
delegation of authority, if any, to the Property Manager;
(2) Personnel policy and staffing arrangements, including
ongoing training of staff in best practices for serving the Project tenants;
(3) Plans and procedures for publicizing and achieving early and
continued occupancy;
(4) Procedures for determining tenant eligibility, and selecting
tenants, and for certifying and annually recertifying household status, income and size;
(5) Plans for carrying out an effective maintenance and repair
program;
(6) Rent collection policies and procedures;
(7) Plans for enhancing tenant-management relations;
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(8) Appeal and grievance procedures;
(9) Description of how service staff and property management
staff will work together to prevent evictions and to facilitate the implementation of reasonable
accommodation policies.
(b) Upon a determination by the City that the Property Manager has
failed to operate the Development in accordance with the Management Plan, the City shall provide
written notice to the Developer specifying the Property Manager’s breach of the Management Plan
and providing the Developer at least thirty (30) days to cure the specified breach. Within thirty
(30) days the Developer must either use good faith efforts to cure the breach or, if such cure is of
the nature to take longer than thirty (30) days, the Developer shall commence the cure during the
thirty (30) day period and complete the cure by the conclusion of one hundred eighty (180) days
the Developer’s receipt of the City’s notice, or in such other time period as the parties may
mutually agree. If the Developer has failed to cure the breach of the Management Plan by the
expiration of the relevant cure period, the City may immediately provide a written notice to the
Developer requiring that the Developer promptly terminate the existing Property Manager and
contract with an alternative qualified management agent to operate the Project, each with the
approval of the lenders and the California Tax Allocation Committee, or to make such other
arrangements as the City deems reasonably necessary to ensure performance of the functions and
obligations set forth in the applicable Property Management Plan.
Section 6.8 Insurance Requirements; Required Coverage. The Developer must
maintain and keep in force, at the Developer’s sole cost and expense, the following insurance
applicable to the Development:
(a) Workers’ Compensation insurance, as required by the State of
California and consistent with statutory limits, and Employers’ Liability coverage, with limits not
less than One Million Dollars ($1,000,000) each accident for bodily injury or disease.
(b) Commercial General Liability insurance with limits not less than
One Million Dollars ($1,000,000) each occurrence and Five Million Dollars ($5,000,000)
aggregate combined single limit for Bodily Injury and Property Damage, including coverages for
Contractual Liability, Personal Injury, Broad form Property Damage, Products and Completed
Operations. Products and Completed Operations coverage must be obtained no later than
completion of construction of the Development. The Developer shall cause the Developer’s
general contractor to maintain Commercial General Liability insurance with limits not less than
Two Million Dollars ($2,000,000) each occurrence and Four Million Dollars ($4,000,000)
aggregate combined single limit for Bodily Injury and Property Damage, including coverages for
Contractual Liability, Personal Injury, Broad form Property Damage, Products and Completed
Operations.
(c) Commercial Automobile Liability insurance with limits not less
than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for owned, non-owned and hired vehicles, as
applicable; provided, however, that if the Developer does not own or lease vehicles, or operate any
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non-owned vehicles for purposes of this Agreement, then no automobile liability insurance will be
required and both Parties to this Agreement must initial this provision signifying same.
(d) Professional liability insurance in an amount not less than One
Million Dollars ($1,000,000) each occurrence and Two Million Dollars ($2,000,000) aggregate
policy limit. Developer may meet this requirement by requiring any design professional retained
by the Developer or general contractor to maintain professional liability insurance in the minimum
amounts specified in this subsection.
(e) Builders’ risk insurance during the course of construction (and upon
completion of construction, property insurance) covering the Development and covering all risks
of loss, excluding earthquake and including flood (if required), for one hundred percent (100%) of
the replacement value, with deductible, if any, acceptable to the City.
Section 6.9 Subcontractor’s Insurance. Developer must require and verify that
all subcontractors and agents working on the Development maintain Workers’ Compensation
insurance meeting all the requirements stated in this Section, and Developer must ensure that City
and the Authority are both additional insureds on insurance required from subcontractors as
described in subsection (c)(2) of this Section.
(a) General Requirements.
(1) Except for professional liability, the required insurance must
be provided under an occurrence form, and the Developer must maintain such coverage
continuously throughout the Term. Should any of the required insurance be provided under a form
of coverage that includes an annual aggregate limit or provides that claims investigation or legal
defense costs be included in such annual aggregate limit, such annual aggregate limit must be three
(3) times the occurrence limits specified above.
(2) All Commercial General Liability, Commercial Automobile
Liability and Property insurance policies (including builders’ risk) must be endorsed to name as
additional insureds the City, the Authority and their elected officials, officers, directors,
representatives, consultants, employees, and agents. The endorsement must include liability
arising out of work or operations performed by or on behalf of Developer including materials,
parts, or equipment furnished in connection with such work or operations and automobiles owned,
leased, hired or borrowed by or on behalf of Developer. For commercial general liability, the
policy must be endorsed with a form at least as broad as ISO form CG 20 10 11 85 or both CG 20
10 and CG 20 37 forms if later revisions used.
(3) Developer’s insurance must be primary to any other
insurance (including self-insurance) available to the City or the Authority (including elected
officials, officers, directors, representatives, consultants, employees, and agents) with respect to
any claim arising out of this Agreement. Any insurance maintained by the City or Authority shall
be excess of the Developer’s insurance and shall not contribute with it.
(4) No policy shall be canceled, limited, or allowed to expire
without renewal until after thirty (30) days written notice has been given to the City and Authority
by first class mail.
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(5) Insurance is to be placed with insurers with a current A.M.
Best’s rating of no less than A:VII, unless otherwise acceptable to the Entity. Exception may be
made for the State Compensation Insurance Fund when not specifically rated.
(b) Deductibles. Any deductibles or self-insured retentions must be
declared to and approved by City. At the option of City, either:
(1) Developer must reduce or eliminate such deductibles or self-
insured retentions as respects the City and its elected officials, officers, directors, representatives,
consultants, employees, and agents; or,
(2) Developer must provide a financial guarantee satisfactory to
City guaranteeing payment of losses and related investigations, claim administration, and defense
expenses.
(c) Subrogation Waiver. Developer hereby grants to City and the
Authority a waiver of any right to subrogation which any insurer of Developer may acquire against
the City by virtue of the payment of any loss under such insurance. Developer agrees to obtain
any endorsement that may be necessary to effect this waiver of subrogation. The Workers’
Compensation policy must be endorsed with a waiver of subrogation in favor of City for all work
performed by Developer, its employees, agents, and subcontractors. This provision applies
regardless of whether or not the City or Authority has requested or received a waiver of subrogation
endorsement from the insurer.
Section 6.10 Certificates of Insurance. As a condition to the Close of Escrow for
each Phase, the Developer must provide certificates of insurance, in form and with insurers
reasonably acceptable to the City, evidencing compliance with the requirements of this Section,
and must provide complete copies of such insurance policies, including endorsements as required
by this Section. However, failure to obtain the required documents before the work beginning
shall not waive Developer’s obligation to provide them. City reserves the right to require
complete, certified copies of all required insurance policies, including endorsements, required by
these specifications, at any time.
Section 6.11 Additional Coverage. Developer may carry, at its own expense, any
additional insurance it deems necessary or prudent. If Developer maintains higher levels than the
minimums shown above, City requires and shall be entitled to coverage for the higher limits
maintained by Developer. Any available insurance proceeds in excess of the specified minimum
levels of insurance and coverage shall be available to the City.
Section 6.12 Audits. The Developer must make available for examination at
reasonable intervals and during normal business hours to the Authority and the City all books,
accounts, reports, files, and other papers or property with respect to all matters covered by this
Agreement, and permit the Authority and the City to audit, examine, and make excerpts or
transcripts from such records, and such records shall be kept at 100 Pacifica, Suite 203 in the City
of Irvine. The Authority and the City may make audits of such records.
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ARTICLE 7
ASSIGNMENTS AND TRANSFERS
Section 7.1 Definitions. As used in this Article 7, the term “Transfer” means:
Any total or partial sale, assignment or conveyance, or any trust or power, or any transfer in any
other mode or form, of or with respect to this Agreement or of the Development or any part thereof
or any interest therein or any contract or agreement to do any of the same;
(a) Any total or partial sale, assignment or conveyance, or any trust or
power, or any transfer in any other mode or form, of or with respect to any ownership interest in
Developer or any contract or agreement to do any of the same;
(b) Any merger, consolidation, sale or lease of all or substantially all of
the assets of the Developer; or
(c) The leasing of part or all of the Development thereon; provided,
however, that leasing of the Units included within the Development to tenant occupants in
accordance with the Regulatory Agreement or the leasing of the Commercial Space in the
Development in accordance with this Agreement shall not be deemed a Transfer for purposes of
this Article 7.
Section 7.2 Purpose of Restrictions on Transfer. This Agreement is entered into
solely for the purpose of the development and operation of the Development and its subsequent
use in accordance with the terms hereof. The Developer recognizes that the qualifications and
identity of Developer are of particular concern to the City, in view of:
(a) The importance of the redevelopment of the Property to the general
welfare of the community;
(b) The land acquisition assistance and other public aids that have been
made available by law and by the government for the purpose of making such redevelopment
possible;
(c) The reliance by the City upon the unique qualifications and ability
of the Developer to serve as the catalyst for development of the Property;
(d) The fact that a change in ownership or Control of the Developer, or
of a substantial part thereof, or any other act or transaction involving or resulting in a significant
change in ownership or with respect to the identity of the parties in Control of the Developer is for
practical purposes a transfer or disposition of the Property;
(e) The fact that the Property is not to be acquired or used for
speculation, but only for development and operation by the Developer in accordance with this
Agreement and the Regulatory Agreement; and
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(f) The Developer further recognizes that it is because of such
qualifications and identity that the City is entering into this Agreement with the Developer and
that Transfers are permitted only as provided in this Agreement.
Section 7.3 Prohibited Transfers. Any Transfer made in contravention of this
Section and is void and are deemed to be a Developer Event of Default under this Agreement
whether or not the Developer knew of or participated in such Transfer. Except for permitted
Transfers described in Section 7.4, no Transfer shall be permitted in the absence of specific written
agreement by the City, and, unless approved by the City in writing, no Transfer or assignment will
be deemed to relieve the Developer or any other party from any obligations under this Agreement.
Section 7.4 Permitted Transfers. Notwithstanding the provisions of Section 7.3,
the following Transfers are permitted and are hereby approved by the City without further review.
Any consent by the City under this Section 7.4 shall constitute the consent of the Authority:
(a) Notwithstanding the provisions of Section 7.3, the following
Transfers shall be permitted and are hereby approved by the City:
(1) Any Transfer creating a Security Financing Interest
permitted pursuant to the approved Financing Proposal;
(2) Any Transfer of an entire Phase to a limited partnership in
which the Developer or an entity Controlled by the Developer is the administrative general partner
of such limited partnership (provided City shall have been given a copy of the limited partnership,
and copies of the organizational documents of the general partner).
(3) The Transfer of an entire Phase to a nonprofit managing
general partner pursuant to a right of first refusal agreement given by a limited partnership owner
of the Phase.
(4) The Transfer of an entire Phase to the administrative general
partner pursuant to an option agreement given by a limited partnership owner of the Phase.
(5) The admission of a tax credit investor limited partner to
Developer, and any subsequent transfer of investor limited partner interest thereafter.
(6) Any Transfer directly resulting from the foreclosure of a
Security Financing Interest or the granting of a deed in lieu of foreclosure of a Security Financing
Interest or as otherwise permitted under Article;
(7) The leasing of residential units within the Development in
accordance with the applicable Housing Agreement;
(8) The granting of reasonable easements or permits to facilitate
the Development of the Property.
Section 7.5 Other Transfers with City Consent. Any Transfers not permitted
under Section 7.4 shall require the prior written approval of the City Manager.
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(a) No Transfer of this Agreement permitted under this Section will be
effective unless, at the time of the Transfer, the transferor and transferee enter into and records an
assignment and assumption agreement in a form reasonably approved by the City Manager.
Section 7.6 Termination of Limitations on Transfers. The limitations on
Transfers set forth in this Article 7 shall apply with respect to the Property or a Phase until issuance
by the City of a Certificate of Completion for the Phase.
ARTICLE 8 DEFAULT
AND REMEDIES
Section 8.1 General Applicability. The provisions of this Article 8 govern the
Parties’ remedies for breach or failure of this Agreement. If a closing condition does not occur,
then either Party shall not be obligated to convey or accept the applicable parcel, may terminate
the obligation to convey/accept and the Deposit shall be returned to the Developer; however, the
foregoing does not relieve a party from the implied covenant of good faith and fair dealing (with
the understanding that such implied covenant does not apply to the City acting in its governmental
capacity).
Section 8.2 Fault of City. Each of the following events, if uncured after
expiration of the applicable cure period in constitutes a “City Event of Default”. The City, without
good cause, fails to sell the Property to the Developer in the manner set forth in Article 3 and the
Developer is otherwise entitled by this Agreement to such conveyance; or
(a) The City breaches any other material provision of this Agreement
which is materially adverse to Developer.
Section 8.3 Fault of Authority. Each of the following events, if uncured after
expiration of the applicable cure period, constitutes an “Authority Event of Default”:
(a) The Authority, without good cause, fails to disburse the Authority
Loan to the Developer in the manner set forth in Article 5 and the Developer is otherwise entitled
by this Agreement to the disbursement; or
(b) The Authority breaches any other material provision of this
Agreement which is materially adverse to Developer.
Section 8.4 Fault of Developer. Each of the following events, if uncured after
expiration of the applicable cure period, constitutes a “Developer Event of Default”:
(a) The Developer fails to exercise good faith and diligent efforts to
satisfy, within the time and in the manner set forth in Article 3, one or more of the conditions
precedent to the City’s obligation to convey the Property to the Developer;
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(b) The Developer refuses to accept conveyance from the City of the
Property within the time periods and under the terms set forth in Article 3 and fails to cure the
default within thirty (30) days after notice of default from City or Authority;
(c) The Developer fails to construct the Development in violation of
Article 4 cure the default within thirty (30) days after notice of default from City or Authority;
(d) The Developer fails to comply with any construction deadlines in
the Schedule of Performance.
(e) Any default by the Developer under the Housing Agreement shall
also be a Developer Event of Default under this Agreement and the Authority Loan Documents,
subject to any required notice and cure period under the Housing Agreement;
(f) A Transfer occurs, either voluntarily or involuntarily, in violation of
Article 7;
(g) Any representation or warranty contained in this Agreement or in
any application, financial statement, certificate, or report submitted to the City in connection with
this Agreement proves to have been incorrect in any material and adverse respect when made;
(h) A court having jurisdiction makes or enters any decree or order:
(1) adjudging the Developer to be bankrupt or insolvent; (2) approving as properly filed a petition
seeking reorganization of the Developer, or seeking any arrangement for the Developer, under the
bankruptcy law or any other applicable debtor’s relief law or statute of the United States or any
state or other jurisdiction; (3) appointing a receiver, trustee, liquidator, or assignee of the
Developer, in bankruptcy or insolvency or for any of their properties; or (4) directing the winding
up or liquidation of the Developer, if any such decree or order described in clauses (1) to (4),
inclusive, continued unstayed or undischarged for a period of ninety (90) days unless a lesser time
period is permitted for cure under any other mortgage on the Property, in which event such lesser
time period will apply under this subsection (i) as well; or the Developer, admits in writing its
inability to pay its debts as they fall due or voluntarily submits to or files a petition seeking any
decree or order of the nature described in clauses (1) to (4), inclusive;
(i) The Developer assigns its assets for the benefit of its creditors or
suffered a sequestration or attachment of or execution on any substantial part of its property, unless
the property so assigned, sequestered, attached or executed upon have been returned or released
within ninety (90) days after such event (unless a lesser time period is permitted for cure under
any other mortgage on the Property, in which event such lesser time period will apply under this
subsection as well) or prior to sooner sale under such sequestration, attachment, or execution;
(j) The Developer voluntarily suspends its business or, the Developer
is dissolved or terminated;
(k) There occurs any default declared by any entity under any loan
document to which City or Authority is not a party/beneficiary, and which is related to any loans
secured by a deed of trust on the Development or any such deed of trust or any regulatory
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agreement recorded against the Property (other than the Housing Agreement), after the expiration
of applicable cure periods in the applicable documents; or
(l) The Developer breaches any other provision of this Agreement and
fails to cure the default within thirty (30) days after notice of default from City or Authority, or
the Developer breaches any other provision of any Authority Loan Documents and fails to cure
the same within: (a) the cure period in the Authority Loan Documents, if any applicable to the
default; or (b) if no cure period applies, and the default is not included/described in the preceding
subsections, then Developer fails to cure the default within thirty (30) days after written notice
from Authority.
Section 8.5 Notice and Cure Period Regarding City/Authority Defaults. Before
initiating any action for relief against City or Authority for an alleged breach of this Agreement,
Developer must deliver to City or Authority, as applicable, a written notice of breach specifying
all of the reasons for the allegation of default with reasonable particularity. Within thirty (30)
days, City or Authority (as applicable) must either: (1) use good faith efforts to cure the breach
or, if such cure is of the nature to take longer than thirty (30) days, to follow the procedures
specified in subsection (b) below; or (2) if in the determination of the City or Authority, the event
does not constitute a breach of this Agreement, the City or Authority, as applicable, within thirty
(30) days of receipt of the Notice of Default, must deliver to Developer a notice which sets forth
with reasonable particularity the reasons that a default has not occurred. Failure to respond within
the thirty (30) day period may not be deemed an admission of the default.
(a) If the City or Authority, as applicable, believes that the Default
cannot practically be cured within the thirty (30)-day period, it shall not be in Default provided
that: (1) the cure is commenced during the thirty (30) day period after receipt of the Notice of
Default; (2) within the thirty (30) day period, the Defaulting Party provides a schedule to
Developer for cure, ; and (3) the cure is thereafter diligently prosecuted to completion, and City or
Authority as applicable uses good faith efforts to comply with the schedule.
Section 8.6 Remedies; City Remedies. With respect to an uncured Developer
Event of Default, the City shall be entitled to take any or all of the following remedies:
(a) Terminating this Agreement by giving written notice to the
Developer; provided, however, that the City’s remedies under this Article 8 and the
indemnification provisions of this Agreement survive such termination. If the City elects to
terminate this Agreement, the provisions of this Agreement that are specified to survive such
termination shall remain in full force and effect.
(b) Prosecuting an action for damages (excluding specific performance,
punitive damages and indirect consequential damages); or seeking any other remedy available at
law or in equity (excluding punitive damages and indirect consequential damages).
Section 8.7 Developer Remedies. With respect to an uncured City Event of
Default or Authority Event of Default, the Developer shall be entitled to take any or all of the
following remedies:
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(a) Terminating this Agreement by giving written notice to the
Developer; provided, however, that the Developer’s remedies under this Article 8 and the
indemnification provisions of this Agreement survive such termination. If the Developer elects to
terminate this Agreement, the provisions of this Agreement that are specified to survive such
termination shall remain in full force and effect.
(b) Prosecuting an action for damages (excluding specific performance,
punitive damages, lost profits and indirect consequential damages); or seeking any other remedy
available at law or in equity (excluding punitive damages and indirect consequential damages).
Section 8.8 Authority Remedies. With respect to an uncured Developer Event
of Default as to a Phase, the Authority shall be entitled to exercise any or all remedies permitted
at law or in equity, and any remedies under the Promissory Note and Deed of Trust for that Phase
(including acceleration of the applicable loan).
Section 8.9 Rights of Mortgagees. Any rights of the City or Authority under
this Article 8 will not defeat, limit or render invalid any Security Financing Interest permitted by
this Agreement or any rights provided for in this Agreement for the protection of holders of
Security Financing Interests.
Section 8.10 Remedies Cumulative. No right, power, or remedy given to the City
by the terms of this Agreement is intended to be exclusive of any other right, power, or remedy;
and each and every such right, power, or remedy will be cumulative and in addition to every other
right, power, or remedy given by the terms of any such instrument, or by any statute or otherwise.
Neither the failure nor any delay to exercise any such rights and remedies will operate as a waiver
thereof, nor will any single or partial exercise of any such right or remedy preclude any other or
further exercise of such right or remedy, or any other right or remedy.
ARTICLE 9
SECURITY FINANCING AND RIGHTS OF HOLDERS
Section 9.1 No Encumbrances Except for Development Purposes.
Notwithstanding any other provision of this Agreement, mortgages and deeds of trust, or any other
reasonable method of security are permitted to be placed upon the Developer’s fee interest in the
Property, but only for the purpose of securing loans approved by the City under the approved
Financing Proposal. Mortgages, deeds of trust, or other reasonable security instruments securing
loans approved by the City under the approved Financing Proposal are each referred to as a
“Security Financing Interest.” The words “mortgage” and “deed of trust” as used in this
Agreement include all other appropriate modes of financing real estate acquisition, construction,
and land development.
Section 9.2 Holder Not Obligated to Construct. The holder of any Security
Financing Interest authorized by this Agreement is not obligated to construct or complete any
Development or to guarantee such construction or completion; nor will any covenant or any other
provision in conveyances from the City to the Developer evidencing the realty comprising the
Property or any part thereof be construed so to obligate such holder. However, no such holder
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shall devote the Property or any portion thereof to any uses, or to construct any Development
thereon, other than the Development provided for or authorized by this Agreement and the Housing
Agreement.
Section 9.3 Notice of Default and Right to Cure. Whenever the City under its
rights set forth in Article 8 of this Agreement delivers any notice or demand to the Developer with
respect to the commencement, completion, or cessation of the construction of the Development,
the City will at the same time deliver to each holder of record of any Security Financing Interest
creating a lien upon the Developer’s fee interest in the Property or any portion thereof, and the
Investor, a copy of such notice or demand provided City shall have been given written notice of
its address for notice by the Developer. Each such holder (insofar as the rights of the City are
concerned) has the right, but not the obligation, at its option, within ninety (90) days after the
delivery of the notice, to cure or remedy or commence to cure or remedy any such default or breach
affecting the Property which is subject to the lien of the Security Financing Interest held by such
holder and to add the cost thereof to the security interest debt and the lien on its security interest.
Nothing contained in this Agreement is deemed to permit or authorize such holder to undertake or
continue the construction or completion of the Development (beyond the extent necessary to
conserve or protect such Development or construction already made) without first having
expressly assumed in writing the Developer’s obligations to the City relating to such Development
under this Agreement under an assignment and assumption agreement prepared by the City and
recordable among the Official Records (the “Security Financing Interest Assignment”). The
holder in that event must agree to complete, in the manner provided in this Agreement (or as may
be amended by the Security Financing Interest Assignment; provided, however, the City is under
no obligation to extend the dates for performance set forth in this Agreement), the Development
to which the lien or title of such holder relates. Any such holder properly completing such
Development under this paragraph must assume all rights and obligations of Developer under this
Agreement and will be entitled, upon completion and written request made to the City, to a
Certificate of Completion from the City.
Section 9.4 Failure of Holder to Complete Development. In any case where six
(6) months after default by the Developer in completion of construction of the Development under
this Agreement, the holder of record of any Security Financing Interest, having first exercised its
option to construct under the Security Financing Interest Assignment, has not proceeded diligently
with construction (as reasonably determined by the City), the City and Authority must be afforded
those rights against such holder it would otherwise have against Developer under this Agreement.
Section 9.5 Right of Cure. In the event of a default or breach by the Developer
of a Security Financing Interest prior to the completion of the Development, and the holder has
not exercised its option to complete the Development on the Property, the City or Authority may
cure the default, prior to the completion of any foreclosure. In such event the City or Authority as
applicable will be entitled to reimbursement from the Developer of all costs and expenses incurred
bin curing the default. The City will also be entitled to a lien upon the Property or any portion
thereof to the extent of such costs and disbursements, or in the case of the Authority, the
Developer’s obligation to reimburse for costs and disbursements shall be included in the
obligations secured by the applicable Deed of Trust. The City agrees that such lien will be
subordinate to any Security Financing Interest, and the City will execute from time to time any
and all documentation reasonably requested by Developer to effect such subordination.
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Section 9.6 Right of City to Satisfy Other Liens. After the conveyance of title
to the Property or any portion thereof and after the Developer has had a reasonable time to
challenge, cure or satisfy any liens or encumbrances on the Property or any portion thereof, the
City will have the right to satisfy any such lien or encumbrances; provided, however, that nothing
in this Agreement will require the Developer to pay or make provision for the payment of any tax,
assessment, lien or charge so long as the Developer in good faith may contest the validity or
amount therein and so long as such delay in payment is not subject the Property or any portion
thereof to forfeiture or sale.
Section 9.7 Holder to be Notified. The Developer will insert each term
contained in this Article 9 into each Security Financing Interest or will procure acknowledgement
of such terms by each prospective holder of a Security Financing Interest prior to its coming into
any security right or interest in the Property or portion thereof.
Section 9.8 Estoppel Certificates. Any Party may at any time, and from time to
time, deliver written notice to another Party requesting such other party to certify in writing that,
to the knowledge of the certifying Party: (a) this Agreement is in full force and effect and a binding
obligation of the Parties; (b) this Agreement has not been amended or modified either orally or in
writing, or if so amended, identifying the amendments; and (c) the requesting Party is not in default
in the performance of its obligations under this Agreement, or if in default, the notice shall describe
the nature and amount of any such default. A Party receiving a request shall execute and return
such certificate within fifteen (15) days following receipt of the request. The City Manager is
authorized to execute any estoppel certificate requested by the Developer on behalf of the City.
The Authority’s Executive Director is authorized to execute any estoppel certificate requested by
the Developer on behalf of the Authority.
ARTICLE 10
GENERAL PROVISIONS
Section 10.1 Notices, Demands and Communications. Formal notices, demands,
and communications between the City and the Developer will be sufficiently given if, and not be
deemed given unless, dispatched by registered or certified mail, postage prepaid, return receipt
requested, or delivered by reputable overnight delivery service, to the principal office of the City
and the Developer as follows:
City and Authority: City of Palm Desert/Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Housing Division
Developer: Palm Communities
100 Pacifica, Suite 203
Irvine, CA 92618
Attn: President
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Such written notices, demands and communications may be sent in the same manner to such other
addresses as the affected Party may from time to time designate by notice as provided in this
Section.
Section 10.2 Non-Liability of Officials, Employees and Agents. No City Council
members, or Authority board members, or any of the officers, directors, representatives,
consultants, employees and agents of the City or Authority may be personally liable to the
Developer, or any successor in interest, in the event of any default or breach by the City or
Authority or for any amount which may become due to the Developer or successor or on any
obligation under the terms of this Agreement. Absent fraud or willful misconduct by the
responsible party, no members, officers, directors, representatives, consultants, employees and
agents of the Developer may be personally liable to the City or Authority, or any successor in
interest, in the event of any default or breach by the Developer or for any amount which may
become due to the City or Authority or successor or on any obligation under the terms of this
Agreement.
Section 10.3 Forced Delay. In addition to specific provisions of this Agreement,
any Party hereunder shall not be deemed to be in default with respect to a construction
obligation/deadline where delays or defaults are due to war; insurrection; strikes; lock-outs; riots;
floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation; governmental restrictions or priority (except
for restrictions or priorities established by the Party required to perform the action required under
this Agreement); unusually severe weather; inability to secure necessary labor, materials or tools;
acts or the failure to act of any public or governmental agency or entity (except that acts or the
failure to act of a Party shall not excuse performance by such Party, including without limitation
the Developer’s inability to obtain financing for the Development or the economic infeasibility of
the Development) (“Force Majeure”). An extension of time for Force Majeure shall only be for
the period of the enforced delay, which period shall commence to run from the time of the
notification of the delay by the Party requesting the extension to the other Party. The Party
requesting an extension of time under this Section 10.3 shall give notice promptly following
knowledge of the delay to the other Party. If, however, notice by the Party claiming such extension
is sent to the other Party more than thirty (30) days after knowledge of the commencement of the
delay, the period shall commence to run upon the earlier of (i) thirty (30) days prior to the giving
of such notice or (ii) the date that the other Party received knowledge of the events giving rise to
the delay.
Section 10.4 Inspection of Books and Records. Upon request, the Developer
must permit the City and Authority to inspect at reasonable times and on a confidential basis those
books, records and all other documents of the Developer necessary to determine Developer’s
compliance with the terms of this Agreement. Title of Parts and Sections. Any titles of the articles,
sections or subsections of this Agreement are inserted for convenience of reference only and should
be disregarded in construing or interpreting any part of its provision.
Section 10.5 No Third-Party Beneficiaries. There are no third party beneficiaries
to this Agreement.
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Section 10.6 Applicable Law. This Agreement must be interpreted under and
under the laws of the State of California. Venue shall be Riverside County.
Section 10.7 No Brokers. Each Party represents to the other that it has not had
any contact or dealings regarding the Property, or any communication in connection with the
subject matter of this transaction, through any real estate broker or other person who can claim a
right to a commission or finder’s fee. If any broker or finder makes a claim for a commission or
finder’s fee based upon a contact, dealings, or communications, the Party through whom the broker
or finder makes this claim must indemnify, defend with counsel of the indemnified Party’s choice,
and hold the indemnified Party harmless from all expense, loss, damage and claims, including the
indemnified Party’s reasonable attorneys’ fees, if necessary, arising out of the broker’s or finder’s
claim. The provisions of this Section survive expiration of the Term or other termination of this
Agreement and will remain in full force and effect.
Section 10.8 Legal Actions. In the event any legal action is commenced to
interpret or to enforce the terms of this Agreement or to collect damages as a result of any breach
thereof, each Party shall bear their own attorneys’ fees and no attorneys’ fees may be awarded to
the Party prevailing in the action.
Section 10.9 Severability. If any term, provision, covenant or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions will continue in full force and effect unless the rights and obligations
of the Parties have been materially altered or abridged by such invalidation, voiding or
unenforceability.
Section 10.10 Binding Upon Successors. This Agreement is binding upon and
inures to the benefit of the heirs, administrators, executors, successors in interest and assigns of
each of the Parties hereto, except that there may be no Transfer of any interest by any of the Parties
hereto except under the terms of this Agreement. Any reference in this Agreement to a specifically
named Party is deemed to apply to any successor, heir, administrator, executor or assignee of such
Party who has acquired an interest in compliance with the terms of this Agreement, or under law.
Section 10.11 Parties Not Co-Venturers. Nothing in this Agreement is intended to
or does establish the Parties as partners, co-venturers, or principal and agent with one another.
Section 10.12 Discretion Retained by City. The City’s execution of this
Agreement does not constitute approval by the City and in no way limits the discretion or any
governmental rights or powers of the City in the permit and approval process in connection with
construction of the Development.
Section 10.13 Time of the Essence. In all matters under this Agreement, the
Parties agree that time is of the essence.
Section 10.14 Representation and Warranties of Developer. The Developer
hereby represents and warrants to the City and Authority as follows:
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(a) Organization. The Developer is a duly organized, validly existing
corporation, is in good standing under the laws of the State of California and has the power and
authority to own its property and carry on its business as now being conducted.
(b) Authority of Developer. The Developer has full power and
authority to execute and deliver this Agreement and to perform and observe the terms and
provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and
all other documents or instruments executed and delivered, or to be executed and delivered, under
this Agreement have been executed and delivered by persons who are duly authorized to execute
and deliver the same for and on behalf of Developer, and all actions required under the Developer’s
organizational documents and applicable governing law for the authorization, execution, delivery
and performance of this Agreement and all other documents or instruments executed and delivered,
or to be executed and delivered, under this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and all other
documents or instruments which have been executed and delivered under or in connection with
this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered
constitute, legal, valid and binding obligations of the Developer enforceable against it in
accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery
of this Agreement or of any other documents or instruments executed and delivered, or to be
executed or delivered, under this Agreement, nor the performance of any provision, condition,
covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule
or regulation, or any judgment, decree or order of any court, City Council, commission or agency
whatsoever binding on the Developer, or any provision of the organizational documents of the
Developer, or will conflict with or constitute a breach of or a default under any agreement to which
the Developer is a party.
Section 10.15 Entire Understanding of the Parties. This Agreement constitutes the
entire understanding and agreement of the Parties. All prior discussions, understandings and
written agreements are superseded by this Agreement.
Section 10.16 Amendments. The Parties can amend this Agreement only by
means of a writing executed by the Developer, the Authority and the City.
Section 10.17 Approvals. Whenever this Agreement permits City approval,
consent, or waiver, to be authorized by the City Manager, the City Manager’s signature shall
constitute the approval, consent, or waiver of the City, without further authorization required from
the City Council unless required by law or the terms of this Agreement. Whenever this Agreement
permits Authority approval, consent, or waiver, to be authorized by the Authority’s Executive
Director, the Authority’s Executive Director signature shall constitute the approval, consent, or
waiver of the Authority, without further authorization required from the Authority’s governing
board unless required by law or the terms of this Agreement.
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Section 10.18 Counterparts; Multiple Originals. This Agreement may be executed
in counterparts, each of which is deemed to be an original.
The City, the Authority and the Developer are signing this Agreement as of the Effective
Date.
CITY:
CITY OF PALM DESERT,
a municipal corporation
By:
L. Todd Hileman
City Manager
DEVELOPER:
PALM COMMUNITIES,
a California corporation
By:
Danavon L. Horn
President
APPROVED AS TO FORM:
Richard, Watson & Gerson
By:
Special Counsel
AUTHORITY:
PALM DESERT HOUSING AUTHORITY
By: ___
L. Todd Hileman
Executive Director
APPROVED AS TO FORM:
Richard, Watson & Gerson
By:
Special Counsel
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land referred to is situated in the City of Palm Desert, State of California, and is described as
follows:
THOSE PORTIONS OF PARCEL 8 AND PARCEL 9 OF PARCEL MAP NO. 36792, IN THE.
CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS
SHOWN BY MAP ON FILE IN BOOK 239 OF PARCEL MAPS, PAGES 9 THROUGH 15,
INCLUSIVE, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 8; THENCE ALONG THE
SOUTH LINE OF SAID PARCEL 9, SOUTH 89°56’08” WEST 72.55 FEET TO A LINE THAT
IS PARALLEL WITH AND DISTANT EASTERLY 138.45 FEET, MEASURED AT RIGHT
ANGLES, FROM THE EAST RIGHT OF WAY LINE OF DINAH SHORE DRIVE, AS SHOWN
ON SAID PARCEL MAP NO. 36792; THENCE LEAVING SAID SOUTH LINE AND ALONG
SAID PARALLEL LINE, NORTH 0°00’00” EAST 31711 FEET; THENCE NORTH 90°00’00”
EAST 65.55 FEET TO A LINE THAT IS PARALLEL WITH AND DISTANT WESTERLY 7.00
FEET, MEASURED AT RIGHT ANGLES FROM THE WEST LINE OF SAID PARCEL 8;
THENCE NORTH 0°00’00” EAST 102.00 FEET ALONG LAST SAID PARALLEL LINE TO
A LINE THAT IS PARALLEL WITH AND DISTANT NORTHERLY 1,00 FEET; MEASURED
AT RIGHT ANGLES, FROM THE NORTH LINE OF SAID PARCEL 8; THENCE NORTH
90°00’00” EAST 275.69 FEET ALONG LAST SAID PARALLEL LINE TO AN
INTERSECTION WITH THE NORTHWESTERLY PROLONGATION OF THE
NORTHEASTERLY LINE OF SAID PARCEL 8; THENCE SOUTH 68°15’29” EAST 409,78
FEET ALONG SAID NORTHWESTERLY PROLONGATION AND SAID
NORTHEASTERLY LINE OF PARCEL 8 TO A TANGENT CURVE, CONCAVE
SOUTHWESTERLY HAVING A RADIUS OF 1445.00 FEET; THENCE SOUTHEASTERLY
ALONG SAID CURVE AND SAID NORTHEASTERLY LINE OF PARCEL 8 AN ARC
LENGTH OF 535.73 FEET, THROUGH A CENTRAL ANGLE OF 21°14’32” TO A NON-
TANGENT LINE, SAID NON- TANGENT LINE BEING PARALLEL WITH AND DISTANT
WESTERLY 36.00 FEET, MEASURED AT RIGHT ANGLES, FROM THE MOST EASTERLY
LINE OF SAID PARCEL 8; THENCE LEAVING SAID NORTHEASTERLY LINE OF
PARCEL 8, ALONG LAST SAID PARALLEL LINE, SOUTH 07°03’09” EAST 105.97 FEET
TO A POINT ON THE SOUTHEASTERLY LINE OF SAID PARCEL 8, BEING A NON-
TANGENT CURVE, CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 73.00 FEET,
A RADIAL LINE TO SAID POINT BEARS NORTH 36°36’07” WEST; THENCE ALONG THE
SOUTHEASTERLY LINE OF SAID PARCEL 8 THE FOLLOWING FIVE (5) COURSES,.
SOUTHERLY ALONG SAID NON-TANGENT CURVE AN ARC LENGTH OF 28.61 FEET,
THROUGH A CENTRAL ANGLE OF 22°27’11” TO THE BEGINNING OF A REVERSE
CURVE, CONCAVE NORTHWESTERLY HAVING A RADIUS OF 60.00 FEET; A LINE
RADIAL TO SAID BEGINNING OF CURVE BEARS SOUTH 59°03’18” EAST; THENCE
SOUTHWESTERLY LONG LAST SAID CURVE AN ARC LENGTH OF 38.39 FEET
THROUGH A CENTRAL ANGLE OF 36°39’18” TO THE BEGINNING OF A REVERSE
CURVE, CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 336.00 FEET; A LINE
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RADIAL TO LAST SAID BEGINNING OF CURVE BEARS NORTH 22°24’00” WEST;
THENCE SOUTHEASTERLY ALONG LAST SAID CURVE AN ARC LENGTH OF 120.80
FEET; THROUGH A CENTRAL ANGLE OF 20°36’00”; THENCE SOUTH 47°00’00” WEST
102.69 FEET; THENCE NORTH 89°13’34” WEST 25.84 FEET TO THE BEGINNING OF A
NON-TANGENT CURVE, CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 1075.00
FEET, A LINE RADIAL TO SAID BE-GINNING OF CURVE BEARS NORTH 44°07’38”
EAST; THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL 8 THE FOLLOWING
TWO (2) COURSES NORTHWESTERLY ALONG LAST SAID CURVE AN ARC LENGTH
OF 829.14 FEET; THROUGH A CENTRAL ANGLE OF 44°11’30”; THENCE SOUTH
89°56’08” WEST 112.85 FEET TO SAID SOUTHWEST CORNER OF PARCEL 8 AND THE
POINT OF BEGINNING.
EXHIBIT A-1
LEGAL DESCRIPTION OF PHASE I PARCEL
EXHIBIT A-2
LEGAL DESCRIPTION OF PHASE II PARCEL
EXHIBIT A-3
LEGAL DESCRIPTION OF PARCEL 9
EXHIBIT B-1
PHASE II EASEMENT
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B-1-10
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B-1-13
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B-1-16
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B-1-17
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EXHIBIT B-2
PARCEL 9 EASEMENT
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B-2-23
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B-2-24
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B-2-26
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EXHIBIT B-3
MAINTENANCE EASEMENT
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EXHIBIT C
FORM OF GRANT DEED
Recording Requested By:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attention: Housing Division
AFTER RECORDATION MAIL TO AND
MAIL TAX STATEMENTS TO:
_____________________________
100 Pacifica, Suite 203
Irvine, CA 92618
Attn: President
_______________ _______________________________________________________
SPACE ABOVE THIS LINE FOR RECORDER’S USE
APN# ________________
THE UNDERSIGNED GRANTOR(S) DECLARE(S):
Documentary Transfer Tax is $___________City Transfer Tax is $0
computed on full value of property conveyed, or
computed on full value less value of liens and/or encumbrances remaining at time of sale,
Unincorporated Area [___], County of Riverside
EXEMPT FROM BUILDING HOMES AND JOBS ACTS FEE PER GOVERNMENT CODE
27388.1(a)(2)
GRANT DEED
For valuable consideration, the receipt of which is hereby acknowledged,
City of Palm Desert, a municipal corporation (herein called “Grantor”) grants to
________________________, a California limited partnership (herein called “Grantee”), the real
property located at __________________________ in the City of Palm Desert, CA (the
“Property”), as legally described in the document attached hereto, labeled Exhibit A, and
incorporated herein by this reference, together with all of Grantor’s right, title and interest in and
to all easements, privileges and rights appurtenant to the Property, subject to (a) all non-delinquent
real property taxes, (b) all non-delinquent special assessments, if any, (c) all other liens, leases,
easements, encumbrances, covenants, conditions, restrictions and other matters of record, and
(d) all matters affecting the status of title that would be revealed by an accurate survey of the
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subject property. Grantor disclaims any and all express or implied warranties regarding the
Property other than the implied warranties stated in Section 1113 of the California Civil Code.
1. The Property is conveyed subject to the Amended and Restated Disposition,
Development and Loan Agreement dated in April, 2024, by and between Grantor and Palm
Communities, predecessor in interest to Grantee, (the “Agreement”). The Agreement shall apply
to this Grant Deed only until the termination of the Agreement by its terms and thereafter shall
have no further force or effect by reference in this Grant Deed.
2. Grantee herein covenants by and for itself, its successors and assigns that there shall
be no discrimination against or segregation of a person or of a group of persons on account of race,
color, religion, creed, national origin, ancestry, disability (actual or perceived), medical condition,
age, source of income, familial status, marital status, domestic partner status, sex, sexual
preference/orientation, Acquired Immune Deficiency Syndrome (AIDS) – acquired or perceived,
or any additional basis listed in subdivision (a) or (d) of Section 12955 of the Government Code,
as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, as such provisions
may be amended from time to time, in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property herein conveyed nor shall the Grantee or any person claiming under or
through the Grantee establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, vendees, or employees in the Property herein conveyed. The foregoing
covenant shall run with the land.
All deeds, leases or other real property conveyance contracts entered into by the Grantee
on or after the date of this Grant Deed as to any portion of the Property shall contain the following
language:
(a) In Deeds:
“Grantee herein covenants by and for itself, its successors and assigns that there
shall be no discrimination against or segregation of a person or of a group of persons
on account of race, color, religion, creed, national origin, ancestry, disability (actual
or perceived), medical condition, age, source of income, familial status, marital
status, domestic partner status, sex, sexual preference/orientation, Acquired
Immune Deficiency Syndrome (AIDS) – acquired or perceived, or any additional
basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as
those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph
(1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government
Code, as such provisions may be amended from time to time, in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the property herein
conveyed nor shall the grantee or any person claiming under or through the grantee
establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees, vendees, or employees in the property herein
conveyed. The foregoing covenant shall run with the land.”
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(b) In Leases:
“The lessee herein covenants by and for the lessee and lessee’s heirs, personal
representatives and assigns and all persons claiming under or through the lessee
that his lease is made subject to the condition that there shall be no discrimination
against or segregation of any person or of a group of persons on account of race,
color, religion, creed, national origin, ancestry, disability (actual or perceived),
medical condition, age, source of income, familial status, marital status, domestic
partner status, sex, sexual preference/orientation, Acquired Immune Deficiency
Syndrome (AIDS) – acquired or perceived, or any additional basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, as
such provisions may be amended from time to time, in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall
the lessee or any person claiming under or through the lessee establish or permit
any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants, vendees, or employees in the land herein leased.”
(c) In Contracts:
“There shall be no discrimination against or segregation of any person or group of
persons on account of race, color, religion, creed, national origin, ancestry,
disability (actual or perceived), medical condition, age, source of income, familial
status, marital status, domestic partner status, sex, sexual preference/orientation,
Acquired Immune Deficiency Syndrome (AIDS) – acquired or perceived, or any
additional basis listed in subdivision (a) or (d) of Section 12955 of the Government
Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the
Government Code, as such provisions may be amended from time to time, in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property
nor shall the transferee or any person claiming under or through the transferee
establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees, vendees, or employees of the land.”
3. The covenants contained in this Grant Deed shall be construed as covenants running
with the land.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Grantor has caused this Grant Deed to be executed by its
duly authorized representative.
Executed as of the __ day of _______________, 202_
CITY
CITY OF PALM DESERT
a municipal corporation
By: __________________________
Mayor
ATTEST:
By: __________________________
_____________, City Clerk
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EXHIBIT A
LEGAL DESCRIPTION OF LAND
THE LAND IN THE CITY OF PALM DESERT, IN THE COUNTY OF RIVERSIDE, STATE
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
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A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of
County of
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.
(Seal)
EXHIBIT D
FORMS OF DENSITY BONUS AGREEMENTS
Exhibit D-1
Form of Density Bonus Agreement for Phase I
RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: _________________
SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY
This Document is recorded for the benefit of the City of Palm Desert and is exempt
from recording fees pursuant to Sections 6103, 27383 and 27388.1
of the California Government Code.
HOUSING AGREEMENT
(Density Bonus Agreement; Phase I)
by and between
the CITY OF PALM DESERT,
and
__________________________
DATED AS OF _________ ____, 202__
HOUSING AGREEMENT
THIS HOUSING AGREEMENT (the “Agreement”) is dated as of ______________ ___, 202__,
and is by and between the CITY OF PALM DESERT, a municipal corporation (the “City”), and
____________________________ (the “Owner”). City and Owner are sometimes referred to
herein individually as a “Party” and collectively as “Parties”.
RECITALS
This Agreement is predicated upon the following facts:
A. The Owner is the owner of the land described in “Exhibit A” attached hereto (the
“Property”).
B. The City, the Palm Desert Housing Authority (“Authority”) and Owner have
entered into that certain Amended and Restated Disposition, Development and Loan Agreement
dated in April, 2024 (“DDLA”), pursuant to which the City conveyed the Property to the Owner
for the development described in the DDLA (“Development” or “Apartment Community”) and
the Authority made a loan to Owner for the purchase price of the Property (“Authority Loan”).
Capitalized terms used but not defined herein shall have the meaning set forth in the DDLA.
C. Pursuant to the DDLA, the Owner executed a Promissory Note in favor of
Authority and a deed of trust in favor of Authority securing such Promissory Note and the
Authority is obligated to make disbursements of loan proceeds subject to and in accordance with
the DDLA.
D. Additionally, Owner has applied for and obtained a density bonus from the City for
the Development which permits greater density and less parking that would otherwise be required,
and in exchange, City also requires that the apartment units be so restricted of record, and that such
restrictions not be subordinate or subordinated to any deeds of trust or other consensual liens.
E. This Agreement is that density bonus restrictions agreement.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth
herein and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the City and the Owner hereby agree as follows:
ARTICLE 1. DEFINITIONS AND INTERPRETATION.
1.1 Definitions.
Capitalized terms used herein shall have the following meanings unless the context in
which they are used clearly requires otherwise.
“Affordable Units” shall mean twelve (12) of the units in the Apartment Community
available to and occupied by, or held vacant for occupancy only by, Very Low Income Households
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and rented at an Affordable Rent. The Affordable Units will include the number of bedrooms
shown on the following table:
Bedroom
Size
Very Low
Income
Household
Units
One 2
Two 7
Three 3
Total: 12
“Affordable Rent” shall mean rent for an Affordable Unit, including a Reasonable Utility
Allowance, determined pursuant to California Health and Safety Code Section 50053(b) and the
state regulations adopted by the California Department of Housing and Community Development
(“HCD”) pursuant thereto, as amended from time to time, based upon the AMI adjusted for a
Household Size Appropriate to the Affordable Unit. More specifically, the maximum monthly
Affordable Rent, including a Reasonable Utility Allowance, may not exceed thirty percent (30%)
of fifty percent (50%) of the AMI, adjusted for a Household Size Appropriate to the Affordable
Unit, divided by twelve.
“AMI” shall mean the area median income for Riverside County as published by the
California Department of Housing and Community Development pursuant to Health and Safety
Code Section 50052.5, or successor statute, as adjusted for family size in accordance with the state
regulations adopted pursuant to California Health and Safety Code Section 50052.5.
“Household Size Appropriate to the Affordable Unit” in the absence of pertinent federal
statutes or regulations applicable to the Apartment Community, shall have the meaning set forth
in California Health and Safety Code Section 50052.5(h), as amended from time to time.
“Reasonable Utility Allowance” shall mean a utility allowance for utilities paid by a
tenant (not including telephone, internet or cable service) utilizing the utility allowance schedule
published annually by the Housing Authority of the County of Riverside.
“Required Covenant Period” shall mean the period commencing on the date all units in
the Apartment Community have been completed as evidenced by the City’s issuance of a final
Certificate of Occupancy for the Apartment Community, and ending as of the fifty-fifth (55th)
anniversary thereof.
“Very Low Income Household” shall mean persons and families who meet the fifty
percent (50%) or less of AMI income qualification limits set forth in California Health and Safety
Code Section 50105 and Title 25 of the California Code of Regulations, including Section 6910,
as such statute and regulations are amended from time to time.
1.2 Rules of Construction.
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1.2.1 The singular form of any word used herein, including the terms defined herein shall
include the plural and vice versa. The use herein of a word of any gender shall include correlative
words of all genders.
1.2.2 Unless otherwise specified, references to articles, sections, and other subdivisions
of this Agreement are to the designated articles, sections, and other subdivisions of this Agreement
as originally executed. The words “hereof,” “herein,” “hereunder,” and words of similar import
shall refer to this Agreement as a whole.
1.2.3 All of the terms and provisions hereof shall be construed to effectuate the purposes
set forth in this Agreement and to sustain the validity hereof.
1.2.4 Headings or titles of the several articles and sections hereof and the table of contents
appended to copies hereof shall be solely for convenience of reference and shall not affect the
meaning, construction, or effect of the provisions hereof.
ARTICLE 2. ONGOING APARTMENT COMMUNITY OBLIGATIONS.
2.1 Apartment Community and Affordable Units.
The Owner shall develop and construct the Apartment Community on the Property in conformity
with the DDLA. Thereafter, during the Required Covenant Period, the Owner agrees that not less
than twelve (12) units in the Apartment Community shall be Affordable Units under this
Agreement, meaning that such units shall be continually available to and occupied by, or held
vacant for occupancy only by, Very Low Income Households. All of the rental units in the
Apartment Community shall be similarly constructed and all of the Affordable Units shall be
generally constructed at the same time as those units which are available to other tenants, and
distributed in terms of location throughout the Apartment Community. The Affordable Units shall
be of comparable quality to those rental units in the Apartment Community which are available to
other tenants. The Owner agrees that, to the extent commercially reasonable, Affordable Units
will not be underutilized. No persons shall be permitted to occupy any Affordable Unit in excess
of applicable limit of maximum occupancy set by the City’s Municipal Code and the laws of the
State of California.
2.2 Residential Rental Property.
The Owner covenants to operate the Apartment Community as residential rental property. During
the Required Covenant Period, the Affordable Units will be held and used for the purpose of
providing residential living, and the Owner shall own, manage and operate, or cause the
management and operation of, the Apartment Community to provide such affordable rental
housing. All of the rental units in the Apartment Community with the exception of one (1) manager
unit will be available for rental on a continuous basis to members of the general public and the
Owner will not give preference to any particular class or group in renting the units in the Apartment
Community, except as required under this Agreement. The Owner shall not convert any Affordable
Unit(s) to condominiums or cooperative ownership or sell condominium or cooperative conversion
rights to any Affordable Unit(s) during the term of this Agreement.
2.3 Very Low Income Households.
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2.3.1 Income Qualification; Initial Certification. Subject to the applicable provisions
hereof, throughout the Required Covenant Period, the Affordable Units restricted by this
Agreement will be exclusively occupied by, or available for occupancy only by Very Low Income
Households on a continuous basis. Prior to the rental or lease of an Affordable Unit and in
accordance with Section 2.6 hereof, the Owner will obtain and maintain on file a Household
Income Certification (“Income Certification”) substantially in the form attached hereto as Exhibit
“B” and incorporated herein by this reference for each Very Low Income Household, and shall
provide copies of same to the City at such times as the City may, from time to time, reasonably
require. In addition, the Owner will provide such further information as may reasonably be
required in the future by the City. The Income Certification shall be dated immediately prior to
the applicable household’s initial occupancy of an Affordable Unit. The Owner shall make a good
faith effort to verify that the income provided by an applicant in an Income Certification is accurate
by taking any one or more of the following steps as part of the verification process for all household
members over the age of eighteen (18) as appropriate:
(i) Obtain two (2) pay stubs for the two (2) most recent pay periods;
• Obtain a true copy of an income tax return for the most recent tax year in which a return
was filed;
(ii) Obtain an income verification form from the household member’s current
employer;
(iii) Obtain an income verification form from the Social Security Administration
and/or the State Department of Social Services, or its equivalent, if the household member receives
assistance from either of those agencies;
(iv) If the household member is unemployed and has no tax return, obtain
another form of independent verification; or
(v) Obtain such other documentation as may be reasonably acceptable pursuant
to Title 25 of the California Code of Regulations, as amended from time to time, to verify income.
2.3.2 Certificate of Continuing Program Compliance; Annual Report. Throughout the
Required Covenant Period, the Owner will prepare and submit to the City, at such periodic
frequency as the City might reasonably require, but not more than once annually, a Certificate of
Continuing Compliance in substantially the form attached hereto as Exhibit “C” and incorporated
herein by this reference, and executed by the Owner. The Owner will also prepare and submit to
the City on or before each anniversary date of the commencement of the Required Covenant
Period, and for the preceding calendar year, a report in form and substance reasonably satisfactory
to the City summarizing the vacancy rate of the Apartment Community, including the number of
Affordable Units held vacant for occupancy by Very Low Income Households for such calendar
year.
2.4 Affordable Rent. Throughout the Required Covenant Period, an Affordable Rent shall be
charged to the Very Low Income Household occupants of Affordable Units, as more specifically
described above.
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2.5 Rent Increases. Rents for Affordable Units may be increased not more than once per year
and twelve (12) months must have elapsed since the date of the tenant’s initial occupancy or the
last rent increase. The rents charged following such an increase, or upon a vacancy and new
occupancy by a Very Low Income Household shall not exceed an Affordable Rent. The Owner
shall, consistent with applicable law, give proper written notice to tenants of all rent increases, and
upon written request, provide the City with reasonable detail concerning the amount of and
rationale for such rent increases.
2.6 Income Recertification of Affordable Units. Annually, on the anniversary date of
occupancy of an Affordable Unit by a Very Income Household, the Owner shall obtain and
maintain on file an annual income certification, in form and substance reasonably satisfactory to
the City, from each household occupying an Affordable Unit, based upon the current income of
each household member over the age of eighteen (18). The Owner shall make a good faith effort
to verify that the income provided by the household is accurate in accordance with Section 2.3.1,
above.
2.6.1 A rental unit occupied by a household that qualifies as a Very Low Income
Household at the time the household first occupies an Affordable Unit shall be deemed to continue
to be so occupied until a recertification of such household’s income demonstrates that such
household no longer qualifies as a Very Low Income Household. At such time as a household
ceases to qualify as a Very Low Income Household based on income recertification, the Owner
shall designate the next available unit (one that is not occupied by a tenant) with the same number
of bedrooms as the occupied Affordable Unit and it shall be leased to a Very Low Income
Household, so that the number of Affordable Units occupied by or reserved for occupancy by Very
Low Income Households will remain constant. For purposes of this Agreement, such designated
unit will be considered an Affordable Unit if it is held vacant and available solely for occupancy
by a Very Low Income Household and, upon occupancy, the income eligibility of the household
as a Very Low Income Household is verified and the unit is rented at Affordable Rent.
2.7 Lease or Occupancy Agreement. Prior to the rental or lease of an Affordable Unit to a
Very Low Income Household, the Owner shall require the tenant to execute a written lease or
occupancy agreement. The Owner shall maintain on file throughout the Required Covenant Period
and for a four (4) year period thereafter, the executed lease or occupancy agreement of each tenant
occupying an Affordable Unit. The form of lease or occupancy agreement used by the Owner for
the lease or rental of Affordable Units shall be that which is reasonable and customary in residential
leasing. In addition, each lease or occupancy agreement for an Affordable Unit shall (i) provide
that the tenants of such Affordable Unit shall be subject to annual recertification of income and
subject to rental increases in accordance with Sections 2.5 and 2.6 of this Agreement, and (ii)
contain a provision to the effect that the Owner has relied on the income certification and
supporting information supplied by the tenant in determining qualification for occupancy of the
Affordable Unit, and that any material misstatement in such certification (whether or not
intentional) may be cause for immediate termination of such lease or occupancy agreement.
2.7.1 The Owner shall refrain from restricting the rental or lease of Affordable Units on
the basis of race, color, religion, sex, marital status, disability, ancestry or national origin of any
person.
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2.7.2 The covenants established herein shall, without regard to technical classification
and designation, be binding for the benefit and in favor of the City, and its successors and assigns,
and shall burden and run with the Property.
2.7.3 The City is deemed to be the beneficiary of the terms and provisions of the
covenants herein, both for and in its own right and for the purposes of protecting the interests of
the community and other parties, public or private, for whose benefit these covenants running with
the land have been provided.
2.8 Security Deposits. The Owner may require security deposits on Affordable Units in
amounts which are consistent with applicable law.
2.9 Additional Information; Books and Records. The Owner shall provide any additional
information concerning the Affordable Units reasonably requested by the City. The Owner will
maintain complete and accurate records pertaining to the Affordable Units throughout the
Covenant Period and for a four (4) year period thereafter. The City shall have the right upon
written notice of no less than two (2) business days to the Owner, at any time during normal
business hours of 9:00 am to 5:00 pm, to examine of all books, records or other documents
maintained by the Owner or by any of the Owner’s agents which pertain to any Affordable Unit,
including all executed leases or occupancy agreements and all Income Certifications, and obtain
copies of any requested executed leases, occupancy agreements and Income Certifications within
ten (10) business days following such examination and the City’s written request.
2.10 Specific Performance. The Owner hereby agrees that specific enforcement of the Owner’s
agreement to comply with the allowable rent and occupancy restrictions and covenants contained
herein is one of the reasons and consideration for the City having granted a density bonus and that,
in the event of the Owner’s breach of such requirements, potential monetary damages to the City,
as well as to existing and prospective Very Low Income Households, would be difficult, if not
impossible, to evaluate and quantify. Therefore, in addition to any other relief to which the City
may be entitled as a consequence of the breach hereof, the Owner agrees to the imposition of the
remedy of specific performance against it in the case of any event of default by the Owner in
complying with any provision of this Agreement beyond any applicable notice and cure period.
2.11 Audit. The City shall have the right to perform an audit of the Apartment Community to
determine compliance with the provisions of this Agreement. Such audit shall not be undertaken
more often than once each calendar year. All costs and expenses associated with the audit shall
be paid by the Owner.
2.12 Management. The Owner and/or the management agent (if not the Owner) shall operate
the Apartment Community in a manner that will provide decent, safe and sanitary residential
facilities to the occupants thereof, and will comply with provisions of this Agreement. Upon the
written request of the City, the Owner shall cooperate with the City in the periodic review (but not
more than once each calendar year) of the management practices and financial status of the
Affordable Units. The purpose of each periodic review will be to enable the City to determine if
the Affordable Units are being operated and managed in accordance with the requirements and
standards of this Agreement. Results of such City review shall be provided to the Owner, and the
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City shall have the authority to require the Owner to make modifications that are reasonably
necessary to ensure the objectives of this Agreement are met.
2.13 Binding for Term. It is intended by the Parties that except as may be otherwise expressly
provided herein, the provisions of this Agreement shall apply to the Apartment Community
throughout the entire term hereof, as established in Section 3.1 below.
ARTICLE 3. TERM AND RECORDATION.
3.1 Term of Agreement. This Agreement shall remain in full force and effect for the Required
Covenant Period, unless the Owner and the City agree, in writing, to terminate this Agreement
prior to the expiration of the Required Covenant Period. Unless terminated earlier pursuant to the
prior sentence of this Section 3.1, or Section 3.3 below, the Parties intend that the provisions and
effect of this Agreement and specifically of Article 2 hereof, shall remain in full force and effect
for the entire Required Covenant Period.
3.2 Agreement to Record. The Owner represents, warrants, and covenants that this Agreement
will be recorded in the real property records of Riverside County.
3.2 Suspension of Restrictions. Notwithstanding the generality of the foregoing provisions of
this Article 3 or any other provisions hereof, this Agreement and all of the terms and restrictions
contained herein shall be suspended for any period of involuntary noncompliance as a result of
unforeseen events such as fire or act of God which leaves the entire Apartment Community
uninhabitable (and the proceeds of insurance available to the Owner as a result thereof are
insufficient to reconstruct the Apartment Community), or a change in a federal or state law or an
action by the federal government, the State or a court of competent jurisdiction, after the date of
recordation hereof, that prevents the City from enforcing the provisions of this Agreement, or a
condemnation or a similar event.
ARTICLE 4. DEFAULT; REMEDIES.
4.1 An Event of Default. Each of the following shall constitute an “Event of Default” by the
Owner under this Agreement:
4.1.1 Failure by the Owner to duly perform, comply with and observe any of the
conditions, terms, or covenants of any agreement with the City concerning the Apartment
Community, or of this Agreement, if such failure remains uncured thirty (30) days after written
notice of such failure from the City to the Owner in the manner provided herein or, with respect to
a default that cannot be cured within thirty (30) days, if the Owner fails to commence such cure
within such thirty (30) day period or thereafter fails to diligently and continuously proceed with
such cure to completion. However, if a different period or notice requirement is specified under
any other section of this Agreement, then the specific provision shall control.
4.1.2 Any representation or warranty contained in this Agreement or in any application,
financial statement, certificate, or report submitted by the Owner to the City proves to have been
incorrect in any material respect when made.
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4.1.3 A court having jurisdiction shall have made or rendered a decree or order: (i)
adjudging the Owner to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking
reorganization of the Owner or seeking any arrangement on behalf of the Owner under the
bankruptcy laws or any other applicable debtor’s relief law or statute of the United States or of any
state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of the Owner
in bankruptcy or insolvency or for any of its properties; or (iv) directing the winding up or
liquidation of the Owner, providing, however, that any such decree or order described in any of
the foregoing subsections shall have continued unstayed or undischarged for a period of ninety
(90) days.
4.1.4 The Owner shall have assigned its assets for the benefit of its creditors or suffered
a sequestration or attachment or execution on any substantial part of its property, unless the
property so assigned, sequestered, attached, or executed upon shall have been returned or released
within ninety (90) days after such event (unless a lesser time period is permitted for cure hereunder)
or prior to sale pursuant to such sequestration, attachment, or execution. If the Owner is diligently
working to obtain a return or release of the property and the City’s interests hereunder are not
imminently threatened in its reasonable business judgment, then the City shall not declare a default
under this subsection.
4.1.5 The Owner shall have voluntarily suspended its business or dissolved.
4.1.6 The seizure or appropriation of all or, in the reasonable opinion of the City, a
substantial part of the Apartment Community, except for condemnation initiated by the City or
any governmental agency or authority.
4.1.7 There should occur any default declared by any lender under any loan document or
deed of trust relating to any loan made in connection with the Apartment Community, which loan
is secured by a deed of trust or other instrument affecting the Apartment Community, and such
default remains uncured following the expiration of any applicable cure period.
4.2 City’s Option to Lease. [INTENTIONALLY OMITTED}
4.3 City Remedies. The City shall have the right to mandamus or other suit, action or
proceeding at law or in equity to require the Owner to perform its obligations and covenants under
this Agreement or to enjoin acts or things which may be unlawful or in violation of the provisions
hereof, provided that in any such case the City has first provided the required notice of any alleged
default and the Owner has had the requisite opportunity to cure pursuant to Section 4.1.1, above.
4.4 Action at Law; No Remedy Exclusive. The City may take whatever action at law or in
equity as may be necessary to enforce performance and observance of any obligation, agreement
or covenant of the Owner under this Agreement. No remedy herein conferred upon or reserved by
the City is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law, in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or shall
be construed to be a waiver of such right or power, but any such right or power may be exercised
from time to time and as often as the City may deem expedient. In order to entitle the City to
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exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice,
other than such notice as may be herein otherwise expressly required or required by law to be
given.
ARTICLE 5. GENERAL PROVISIONS.
5.1 Limitations on Recourse. Notwithstanding anything to the contrary contained in this
Agreement, except in the event of fraud, waste, or illegal acts, or with regard to any indemnity
obligations imposed upon the Owner under the terms of this Agreement, (i) no partner, member,
officer or director, as applicable, of the Owner (each, an “Owner Affiliate”) shall have any direct,
indirect or derivative personal liability for the obligations of the Owner under this Agreement, and
(ii) the City shall not exercise any rights or institute any action against any Owner Affiliate directly,
indirectly or derivatively for the payment of any sum of money that is or may become payable
hereunder.
5.2 Maintenance, Repair, Alterations. The Owner shall maintain and preserve the Apartment
Community in good condition and repair in accordance with the Ground Lease, and shall otherwise
comply with the Ground Lease and all laws, ordinances, rules, regulations, covenants, conditions,
restrictions, and orders of any governmental authority now or hereafter affecting the conduct or
operation of the Apartment Community or any part thereof or requiring any alteration or
improvement to be made thereon. The Owner shall not commit, suffer, or permit any act to be
done in, upon, or to the Apartment Community or any part thereof in violation of any such laws,
ordinances, rules, regulations, or orders. The Owner hereby agrees that the City may conduct from
time to time through representatives, upon reasonable notice of no less than twenty-four (24) hours,
on-site inspections and observation of: (i) the maintenance and repair of the Apartment
Community, including a review of all maintenance and repair programs and practices and all
reports and records pertaining thereto, including records of expenditures relating thereto; and (ii)
such other facilities, practices, and records of the Owner relating to the Affordable Units as the
City reasonably deems to be necessary or appropriate in order to monitor the Owner’s compliance
with the provisions of this Agreement.
5.3 Notices. All notices (other than telephone notices), certificates or other communications
(other than telephone communications) required or permitted hereunder shall be sufficiently given
and should be deemed given when sent by certified mail, postage prepaid, or twenty-four (24)
hours following delivery of such notice to Federal Express or similar commercial carrier for next
business day or overnight delivery, addressed as follows:
If to the City:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: Housing Division
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If to the Owner
100 Pacifica, Suite 203
Irvine, CA 92618
Attn: President
5.4 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or
understood by any of the Parties, or by any third persons, as creating the relationship of employer
and employee, principal and agent, limited or general partnership, or joint venture between the
City and the Owner or the Owner’s agents, employees or contractors, and the Owner shall at all
times be deemed an independent contractor and shall be wholly responsible for the manner in
which it or its agents, or both, perform the services required of it by the terms of this Agreement
for the operation of the Apartment Community. The Owner has and hereby retains the right to
exercise full control of employment, direction, compensation and discharge of all persons assisting
in the performance of services hereunder. In regards to the on-site operation of the Apartment
Community, the Owner shall be solely responsible for all matters relating to payment of its
employees, including compliance with Social Security, withholding and all other laws and
regulations governing such matters. The Owner agrees to be solely responsible for its own acts
and those of its agents and employees.
5.5 No Claims. Nothing contained in this Agreement shall create or justify any claim against
the City by any person the Owner may have employed or with whom the Owner may have
contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the
performance of any work or services with respect to the operation of the Affordable Units.
5.6 Conflict of Interests. No member, official or employee of the City shall make 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. No
officer or employee of the Owner shall acquire any interest in conflict with or inimical to the
interests of the City.
5.7 Non-Liability of City Officials, Employees and Agents. No member, official, employee or
agent of the City shall be personally liable to the Owner, or any successor in interest, in the event
of any default or breach by the City or for any amount which may become due to the Owner or
successor in connection with this Agreement or on any obligation of the City under the terms of
this Agreement.
5.8 Unavoidable Delay; Extension of Time of Performance. In addition to specific provisions
of this Agreement, performance by either Party hereunder that relates to a construction obligation
shall not be deemed to be in default where it is due to an “Unavoidable Delay.” “Unavoidable
Delay” means a delay due to the elements (including unseasonable weather), fire, earthquakes or
other acts of God, strikes, pandemics, labor disputes, lockouts, shortages of construction materials
experienced generally in the construction industry in the local area, acts of the public enemy, riots,
insurrections or governmental regulation of the sale or transportation of materials, supply or labor;
provided, however, that to the extent a delay is caused by any other reason that the Owner
reasonably believes is beyond its control, the Owner may request, on a case-by-case basis, that the
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City excuse any such delay as an Unavoidable Delay and the City shall make its determination as
to whether such delay constitutes an Unavoidable Delay using its reasonable judgment.
5.9 Indemnity. The Owner shall indemnify, defend and hold harmless the City and all officials,
employees and agents of City (with counsel reasonably satisfactory to the City) against any costs,
liabilities, damages or judgments arising from claims or litigation of any nature whatsoever
brought by third parties and directly or indirectly arising from the Owner’s ownership or operation
of the Apartment Community, or the Owner’s performance of its obligations under this Agreement,
and in the event of settlement, compromise or judgment hold the City free and harmless therefrom.
Notwithstanding the foregoing, the indemnity provisions contained in this Section 5.9 shall not
apply with respect to any costs, liabilities, damages or judgments arising directly or indirectly from
the City’s rental of units within the Apartment Community as described in Section 4.2 hereof. The
provisions of this Section 5.9 shall survive the term of this Agreement.
5.10 Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement,
the rights and remedies of the Parties are cumulative, and the exercise or failure to exercise one or
more of such rights or remedies by either Party shall not preclude the exercise by it, at the same
time or different times, of any right or remedy for the same default or any other default by the
other Party. No waiver of any default or breach by the Owner hereunder shall be implied from
any omission by the City to take action on account of such default if such default persists or is
repeated, and no express waiver shall affect any default other than the default specified in the
waiver, and such wavier shall be operative only for the time and to the extent therein stated.
Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of
any subsequent breach of the same covenant, term or condition. The consent or approval by the
City to or of any act by the Owner requiring further consent or approval shall not be deemed to
waive or render unnecessary the consent or approval to or of any subsequent similar act. The
exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default
under this Agreement, nor shall it invalidate any act done pursuant to notice of default, or prejudice
the City in the exercise of any right, power, or remedy hereunder or under any agreements ancillary
or related hereto.
5.11 Applicable Law. This Agreement shall be interpreted under and pursuant to the laws of
the State of California.
5.12 Severability. If any term, provision, covenant or condition of this Agreement is held in a
final disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall continue in full force and effect unless the rights and obligations of the
Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.
5.13 Legal Actions. In the event any legal action is commenced to interpret or to enforce the
terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing
in any such action shall be entitled to recover against the Party not prevailing all reasonable
attorneys’ fees and costs incurred in such action (including all legal fees incurred in any appeal or
in any action to enforce any resulting judgment), as awarded by a court of competent jurisdiction.
5.14 Binding Upon Successors. This Agreement shall be binding upon and inure to the benefit
of the permitted heirs, administrators, executors, successors in interest and assigns of each of the
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Parties. Any reference in this Agreement to a specifically named Party shall be deemed to apply
to any successor, heir, administrator, executor or assign of such Party who has acquired an interest
in compliance with the terms hereof or under law.
5.15 Time of the Essence. In all matters under this Agreement, time is of the essence.
5.16 Approvals by the City. Any approvals required under this Agreement shall be made by the
City Manager or his or her designee, and shall not be unreasonably withheld, conditioned, delayed
or made, except where it is specifically provided herein that another standard applies, in which
case the specified standard shall apply.
5.17 Complete Understanding of the Parties. This Agreement and the attached Exhibits
constitute the entire understanding and agreement of the Parties with respect to the matters
described herein.
5.18 Covenants to Run With the Land. The Owner hereby subjects the Apartment Community
to the covenants, reservations, and restrictions set forth in this Agreement. The City and the Owner
hereby declare their express intent that the covenants, reservations, and restrictions set forth herein
shall be deemed covenants running with the land and shall pass to and be binding upon the Owner’s
successors in title to the Apartment Community; provided, however, that on the termination of this
Agreement said covenants, reservations and restrictions shall expire. Each and every contract,
deed or other instrument hereafter executed covering or conveying the Apartment Community or
any portion thereof shall conclusively be held to have been executed, delivered and accepted
subject to such covenants, reservations and restrictions, regardless of whether such covenants,
reservations and restrictions are set forth in such contract, deed or other instruments. No breach
of any of the provisions of this Agreement shall defeat or render invalid the lien of a mortgage or
deed of trust made in good faith and for value encumbering the Property or any interest of the
Owner therein.
5.19 Burden and Benefit. The City and the Owner hereby declare their understanding and intent
that: (i) the burden of the covenants, reservations, restrictions, and agreements set forth herein
touch and concern the Property and the Apartment Community, in that Owner’s legal interest in
the Apartment Community is rendered less valuable thereby, (ii) the covenants, reservations,
restrictions, and agreements set forth herein directly benefit the Property and the Apartment
Community (a) by enhancing and increasing the enjoyment and use of the Apartment Community
by certain Very Low Income Households, the intended beneficiaries of such covenants,
reservations, restrictions, and agreements, (b) by making possible the obtaining of advantageous
financing for the Property and the Apartment Community, and (c) by furthering the public
purposes advanced by the City, and (iii) the covenants, reservations, restrictions and agreements
set forth herein shall run with the Property and shall be binding for the benefit of and enforceable
by the City and its successors and assigns for the entire Term of this Agreement.
5.20 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which shall constitute one and the same instrument.
5.21 Amendments. This Agreement may be amended only by the written agreement of the City
and the Owner.
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WHEREFORE, the undersigned has executed this Agreement as of the date first-above
written.
OWNER:
_____________________________
CITY:
CITY OF PALM DESERT
By: ________________________
Print Name: ___________________
Title: ________________________
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
P6401-0001\2940764v2.doc
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
EXHIBIT “A”
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Palm Desert, County of Riverside, State of California, described as
follows:
EXHIBIT “B”
HOUSEHOLD INCOME CERTIFICATION
(Attached)
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EXHIBIT “C”
CERTIFICATE OF CONTINUING COMPLIANCE
(Attached)
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Exhibit D-1
Form of Density Bonus Agreement for Phase II
RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: _________________
SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY
This Document is recorded for the benefit of the City of Palm Desert and is exempt
from recording fees pursuant to Sections 6103, 27383 and 27388.1
of the California Government Code.
HOUSING AGREEMENT
(Density Bonus Agreement; Phase II)
by and between
the CITY OF PALM DESERT,
and
__________________________
DATED AS OF _________ ____, 202__
HOUSING AGREEMENT
THIS HOUSING AGREEMENT (the “Agreement”) is dated as of ______________ ___, 202__,
and is by and between the CITY OF PALM DESERT, a municipal corporation (the “City”), and
____________________________ (the “Owner”). City and Owner are sometimes referred to
herein individually as a “Party” and collectively as “Parties”.
RECITALS
This Agreement is predicated upon the following facts:
A. The Owner is the owner of the land described in “Exhibit A” attached hereto (the
“Property”).
B. The City, the Palm Desert Housing Authority (“Authority”) and Owner have
entered into that certain Amended and Restated Disposition, Development and Loan Agreement
dated in April, 2024 (“DDLA”), pursuant to which the City conveyed the Property to the Owner
for the development described in the DDLA (“Development” or “Apartment Community”) and
the Authority made a loan to Owner for the purchase price of the Property and for construction
costs (“Authority Loan”). Capitalized terms used but not defined herein shall have the meaning set
forth in the DDLA.
C. Pursuant to the DDLA, the Owner executed a Promissory Note in favor of
Authority and a deed of trust in favor of Authority securing such Promissory Note and the
Authority is obligated to make disbursements of loan proceeds subject to and in accordance with
the DDLA.
D. Additionally, Owner has applied for and obtained a density bonus from the City for
the Development which permits greater density and less parking that would otherwise be required,
and in exchange, City also requires that the apartment units be so restricted of record, and that such
restrictions not be subordinate or subordinated to any deeds of trust or other consensual liens.
E. This Agreement is that density bonus restrictions agreement.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth
herein and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the City and the Owner hereby agree as follows:
ARTICLE 1. DEFINITIONS AND INTERPRETATION.
1.1 Definitions.
Capitalized terms used herein shall have the following meanings unless the context in
which they are used clearly requires otherwise.
“Affordable Units” shall mean twelve (12) of the units in the Apartment Community
available to and occupied by, or held vacant for occupancy only by, Very Low Income Households
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and rented at an Affordable Rent. The Affordable Units will include the number of bedrooms
shown on the following table:
Bedroom
Size
Very Low
Income
Household
Units
One 2
Two 7
Three 3
Total: 12
“Affordable Rent” shall mean rent for an Affordable Unit, including a Reasonable Utility
Allowance, determined pursuant to California Health and Safety Code Section 50053(b) and the
state regulations adopted by the California Department of Housing and Community Development
(“HCD”) pursuant thereto, as amended from time to time, based upon the AMI adjusted for a
Household Size Appropriate to the Affordable Unit. More specifically, the maximum monthly
Affordable Rent, including a Reasonable Utility Allowance, may not exceed thirty percent (30%)
of fifty percent (50%) of the AMI, adjusted for a Household Size Appropriate to the Affordable
Unit, divided by twelve.
“AMI” shall mean the area median income for Riverside County as published by the
California Department of Housing and Community Development pursuant to Health and Safety
Code Section 50052.5, or successor statute, as adjusted for family size in accordance with the state
regulations adopted pursuant to California Health and Safety Code Section 50052.5.
“Household Size Appropriate to the Affordable Unit” in the absence of pertinent federal
statutes or regulations applicable to the Apartment Community, shall have the meaning set forth
in California Health and Safety Code Section 50052.5(h), as amended from time to time.
“Reasonable Utility Allowance” shall mean a utility allowance for utilities paid by a
tenant (not including telephone, internet or cable service) utilizing the utility allowance schedule
published annually by the Housing Authority of the County of Riverside.
“Required Covenant Period” shall mean the period commencing on the date all units in
the Apartment Community have been completed as evidenced by the City’s issuance of a final
Certificate of Occupancy for the Apartment Community, and ending as of the fifty-fifth (55th)
anniversary thereof.
“Very Low Income Household” shall mean persons and families who meet the fifty
percent (50%) or less of AMI income qualification limits set forth in California Health and Safety
Code Section 50105 and Title 25 of the California Code of Regulations, including Section 6910,
as such statute and regulations are amended from time to time.
1.2 Rules of Construction.
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1.2.1 The singular form of any word used herein, including the terms defined herein shall
include the plural and vice versa. The use herein of a word of any gender shall include correlative
words of all genders.
1.2.2 Unless otherwise specified, references to articles, sections, and other subdivisions
of this Agreement are to the designated articles, sections, and other subdivisions of this Agreement
as originally executed. The words “hereof,” “herein,” “hereunder,” and words of similar import
shall refer to this Agreement as a whole.
1.2.3 All of the terms and provisions hereof shall be construed to effectuate the purposes
set forth in this Agreement and to sustain the validity hereof.
1.2.4 Headings or titles of the several articles and sections hereof and the table of contents
appended to copies hereof shall be solely for convenience of reference and shall not affect the
meaning, construction, or effect of the provisions hereof.
ARTICLE 2. ONGOING APARTMENT COMMUNITY OBLIGATIONS.
2.1 Apartment Community and Affordable Units.
The Owner shall develop and construct the Apartment Community on the Property in
conformity with the DDLA. Thereafter, during the Required Covenant Period, the Owner agrees
that not less than twelve (12) units in the Apartment Community shall be Affordable Units under
this Agreement, meaning that such units shall be continually available to and occupied by, or held
vacant for occupancy only by, Very Low Income Households. All of the rental units in the
Apartment Community shall be similarly constructed and all of the Affordable Units shall be
generally constructed at the same time as those units which are available to other tenants, and
distributed in terms of location throughout the Apartment Community. The Affordable Units shall
be of comparable quality to those rental units in the Apartment Community which are available to
other tenants. The Owner agrees that, to the extent commercially reasonable, Affordable Units
will not be underutilized. No persons shall be permitted to occupy any Affordable Unit in excess
of applicable limit of maximum occupancy set by the City’s Municipal Code and the laws of the
State of California.
2.2 Residential Rental Property.
The Owner covenants to operate the Apartment Community as residential rental property.
During the Required Covenant Period, the Affordable Units will be held and used for the purpose
of providing residential living, and the Owner shall own, manage and operate, or cause the
management and operation of, the Apartment Community to provide such affordable rental
housing. All of the rental units in the Apartment Community with the exception of one (1) manager
unit will be available for rental on a continuous basis to members of the general public and the
Owner will not give preference to any particular class or group in renting the units in the Apartment
Community, except as required under this Agreement. The Owner shall not convert any Affordable
Unit(s) to condominiums or cooperative ownership or sell condominium or cooperative conversion
rights to any Affordable Unit(s) during the term of this Agreement.
2.3 Very Low Income Households.
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2.3.1 Income Qualification; Initial Certification. Subject to the applicable provisions
hereof, throughout the Required Covenant Period, the Affordable Units restricted by this
Agreement will be exclusively occupied by, or available for occupancy only by Very Low Income
Households on a continuous basis. Prior to the rental or lease of an Affordable Unit and in
accordance with Section 2.6 hereof, the Owner will obtain and maintain on file a Household
Income Certification (“Income Certification”) substantially in the form attached hereto as Exhibit
“B” and incorporated herein by this reference for each Very Low Income Household, and shall
provide copies of same to the City at such times as the City may, from time to time, reasonably
require. In addition, the Owner will provide such further information as may reasonably be
required in the future by the City. The Income Certification shall be dated immediately prior to
the applicable household’s initial occupancy of an Affordable Unit. The Owner shall make a good
faith effort to verify that the income provided by an applicant in an Income Certification is accurate
by taking any one or more of the following steps as part of the verification process for all household
members over the age of eighteen (18) as appropriate:
(i) Obtain two (2) pay stubs for the two (2) most recent pay periods;
• Obtain a true copy of an income tax return for the most recent tax year in which a return
was filed;
(ii) Obtain an income verification form from the household member’s current
employer;
(iii) Obtain an income verification form from the Social Security Administration
and/or the State Department of Social Services, or its equivalent, if the household member receives
assistance from either of those agencies;
(iv) If the household member is unemployed and has no tax return, obtain
another form of independent verification; or
(v) Obtain such other documentation as may be reasonably acceptable pursuant
to Title 25 of the California Code of Regulations, as amended from time to time, to verify income.
2.3.2 Certificate of Continuing Program Compliance; Annual Report. Throughout the
Required Covenant Period, the Owner will prepare and submit to the City, at such periodic
frequency as the City might reasonably require, but not more than once annually, a Certificate of
Continuing Compliance in substantially the form attached hereto as Exhibit “C” and incorporated
herein by this reference, and executed by the Owner. The Owner will also prepare and submit to
the City on or before each anniversary date of the commencement of the Required Covenant
Period, and for the preceding calendar year, a report in form and substance reasonably satisfactory
to the City summarizing the vacancy rate of the Apartment Community, including the number of
Affordable Units held vacant for occupancy by Very Low Income Households for such calendar
year.
2.4 Affordable Rent. Throughout the Required Covenant Period, an Affordable Rent shall be
charged to the Very Low Income Household occupants of Affordable Units, as more specifically
described above.
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2.5 Rent Increases. Rents for Affordable Units may be increased not more than once per year
and twelve (12) months must have elapsed since the date of the tenant’s initial occupancy or the
last rent increase. The rents charged following such an increase, or upon a vacancy and new
occupancy by a Very Low Income Household shall not exceed an Affordable Rent. The Owner
shall, consistent with applicable law, give proper written notice to tenants of all rent increases, and
upon written request, provide the City with reasonable detail concerning the amount of and
rationale for such rent increases.
2.6 Income Recertification of Affordable Units. Annually, on the anniversary date of
occupancy of an Affordable Unit by a Very Income Household, the Owner shall obtain and
maintain on file an annual income certification, in form and substance reasonably satisfactory to
the City, from each household occupying an Affordable Unit, based upon the current income of
each household member over the age of eighteen (18). The Owner shall make a good faith effort
to verify that the income provided by the household is accurate in accordance with Section 2.3.1,
above.
2.6.1 A rental unit occupied by a household that qualifies as a Very Low Income
Household at the time the household first occupies an Affordable Unit shall be deemed to continue
to be so occupied until a recertification of such household’s income demonstrates that such
household no longer qualifies as a Very Low Income Household. At such time as a household
ceases to qualify as a Very Low Income Household based on income recertification, the Owner
shall designate the next available unit (one that is not occupied by a tenant) with the same number
of bedrooms as the occupied Affordable Unit and it shall be leased to a Very Low Income
Household, so that the number of Affordable Units occupied by or reserved for occupancy by Very
Low Income Households will remain constant. For purposes of this Agreement, such designated
unit will be considered an Affordable Unit if it is held vacant and available solely for occupancy
by a Very Low Income Household and, upon occupancy, the income eligibility of the household
as a Very Low Income Household is verified and the unit is rented at Affordable Rent.
2.7 Lease or Occupancy Agreement. Prior to the rental or lease of an Affordable Unit to a
Very Low Income Household, the Owner shall require the tenant to execute a written lease or
occupancy agreement. The Owner shall maintain on file throughout the Required Covenant Period
and for a four (4) year period thereafter, the executed lease or occupancy agreement of each tenant
occupying an Affordable Unit. The form of lease or occupancy agreement used by the Owner for
the lease or rental of Affordable Units shall be that which is reasonable and customary in residential
leasing. In addition, each lease or occupancy agreement for an Affordable Unit shall (i) provide
that the tenants of such Affordable Unit shall be subject to annual recertification of income and
subject to rental increases in accordance with Sections 2.5 and 2.6 of this Agreement, and (ii)
contain a provision to the effect that the Owner has relied on the income certification and
supporting information supplied by the tenant in determining qualification for occupancy of the
Affordable Unit, and that any material misstatement in such certification (whether or not
intentional) may be cause for immediate termination of such lease or occupancy agreement.
2.7.1 The Owner shall refrain from restricting the rental or lease of Affordable Units on
the basis of race, color, religion, sex, marital status, disability, ancestry or national origin of any
person.
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2.7.2 The covenants established herein shall, without regard to technical classification
and designation, be binding for the benefit and in favor of the City, and its successors and assigns,
and shall burden and run with the Property.
2.7.3 The City is deemed to be the beneficiary of the terms and provisions of the
covenants herein, both for and in its own right and for the purposes of protecting the interests of
the community and other parties, public or private, for whose benefit these covenants running with
the land have been provided.
2.8 Security Deposits. The Owner may require security deposits on Affordable Units in
amounts which are consistent with applicable law.
2.9 Additional Information; Books and Records. The Owner shall provide any additional
information concerning the Affordable Units reasonably requested by the City. The Owner will
maintain complete and accurate records pertaining to the Affordable Units throughout the
Covenant Period and for a four (4) year period thereafter. The City shall have the right upon
written notice of no less than two (2) business days to the Owner, at any time during normal
business hours of 9:00 am to 5:00 pm, to examine of all books, records or other documents
maintained by the Owner or by any of the Owner’s agents which pertain to any Affordable Unit,
including all executed leases or occupancy agreements and all Income Certifications, and obtain
copies of any requested executed leases, occupancy agreements and Income Certifications within
ten (10) business days following such examination and the City’s written request.
2.10 Specific Performance. The Owner hereby agrees that specific enforcement of the Owner’s
agreement to comply with the allowable rent and occupancy restrictions and covenants contained
herein is one of the reasons and consideration for the City having granted a density bonus and that,
in the event of the Owner’s breach of such requirements, potential monetary damages to the City,
as well as to existing and prospective Very Low Income Households, would be difficult, if not
impossible, to evaluate and quantify. Therefore, in addition to any other relief to which the City
may be entitled as a consequence of the breach hereof, the Owner agrees to the imposition of the
remedy of specific performance against it in the case of any event of default by the Owner in
complying with any provision of this Agreement beyond any applicable notice and cure period.
2.11 Audit. The City shall have the right to perform an audit of the Apartment Community to
determine compliance with the provisions of this Agreement. Such audit shall not be undertaken
more often than once each calendar year. All costs and expenses associated with the audit shall
be paid by the Owner.
2.12 Management. The Owner and/or the management agent (if not the Owner) shall operate
the Apartment Community in a manner that will provide decent, safe and sanitary residential
facilities to the occupants thereof, and will comply with provisions of this Agreement. Upon the
written request of the City, the Owner shall cooperate with the City in the periodic review (but not
more than once each calendar year) of the management practices and financial status of the
Affordable Units. The purpose of each periodic review will be to enable the City to determine if
the Affordable Units are being operated and managed in accordance with the requirements and
standards of this Agreement. Results of such City review shall be provided to the Owner, and the
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City shall have the authority to require the Owner to make modifications that are reasonably
necessary to ensure the objectives of this Agreement are met.
2.13 Binding for Term. It is intended by the Parties that except as may be otherwise expressly
provided herein, the provisions of this Agreement shall apply to the Apartment Community
throughout the entire term hereof, as established in Section 3.1 below.
ARTICLE 3. TERM AND RECORDATION.
3.1 Term of Agreement. This Agreement shall remain in full force and effect for the Required
Covenant Period, unless the Owner and the City agree, in writing, to terminate this Agreement
prior to the expiration of the Required Covenant Period. Unless terminated earlier pursuant to the
prior sentence of this Section 3.1, or Section 3.3 below, the Parties intend that the provisions and
effect of this Agreement and specifically of Article 2 hereof, shall remain in full force and effect
for the entire Required Covenant Period.
3.2 Agreement to Record. The Owner represents, warrants, and covenants that this Agreement
will be recorded in the real property records of Riverside County.
3.2 Suspension of Restrictions. Notwithstanding the generality of the foregoing provisions of
this Article 3 or any other provisions hereof, this Agreement and all of the terms and restrictions
contained herein shall be suspended for any period of involuntary noncompliance as a result of
unforeseen events such as fire or act of God which leaves the entire Apartment Community
uninhabitable (and the proceeds of insurance available to the Owner as a result thereof are
insufficient to reconstruct the Apartment Community), or a change in a federal or state law or an
action by the federal government, the State or a court of competent jurisdiction, after the date of
recordation hereof, that prevents the City from enforcing the provisions of this Agreement, or a
condemnation or a similar event.
ARTICLE 4. DEFAULT; REMEDIES.
4.1 An Event of Default. Each of the following shall constitute an “Event of Default” by the
Owner under this Agreement:
4.1.1 Failure by the Owner to duly perform, comply with and observe any of the
conditions, terms, or covenants of any agreement with the City concerning the Apartment
Community, or of this Agreement, if such failure remains uncured thirty (30) days after written
notice of such failure from the City to the Owner in the manner provided herein or, with respect to
a default that cannot be cured within thirty (30) days, if the Owner fails to commence such cure
within such thirty (30) day period or thereafter fails to diligently and continuously proceed with
such cure to completion. However, if a different period or notice requirement is specified under
any other section of this Agreement, then the specific provision shall control.
4.1.2 Any representation or warranty contained in this Agreement or in any application,
financial statement, certificate, or report submitted by the Owner to the City proves to have been
incorrect in any material respect when made.
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4.1.3 A court having jurisdiction shall have made or rendered a decree or order: (i)
adjudging the Owner to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking
reorganization of the Owner or seeking any arrangement on behalf of the Owner under the
bankruptcy laws or any other applicable debtor’s relief law or statute of the United States or of any
state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of the Owner
in bankruptcy or insolvency or for any of its properties; or (iv) directing the winding up or
liquidation of the Owner, providing, however, that any such decree or order described in any of
the foregoing subsections shall have continued unstayed or undischarged for a period of ninety
(90) days.
4.1.4 The Owner shall have assigned its assets for the benefit of its creditors or suffered
a sequestration or attachment or execution on any substantial part of its property, unless the
property so assigned, sequestered, attached, or executed upon shall have been returned or released
within ninety (90) days after such event (unless a lesser time period is permitted for cure hereunder)
or prior to sale pursuant to such sequestration, attachment, or execution. If the Owner is diligently
working to obtain a return or release of the property and the City’s interests hereunder are not
imminently threatened in its reasonable business judgment, then the City shall not declare a default
under this subsection.
4.1.5 The Owner shall have voluntarily suspended its business or dissolved.
4.1.6 The seizure or appropriation of all or, in the reasonable opinion of the City, a
substantial part of the Apartment Community, except for condemnation initiated by the City or
any governmental agency or authority.
4.1.7 There should occur any default declared by any lender under any loan document or
deed of trust relating to any loan made in connection with the Apartment Community, which loan
is secured by a deed of trust or other instrument affecting the Apartment Community, and such
default remains uncured following the expiration of any applicable cure period.
4.2 City’s Option to Lease. [INTENTIONALLY OMITTED}
4.3 City Remedies. The City shall have the right to mandamus or other suit, action or
proceeding at law or in equity to require the Owner to perform its obligations and covenants under
this Agreement or to enjoin acts or things which may be unlawful or in violation of the provisions
hereof, provided that in any such case the City has first provided the required notice of any alleged
default and the Owner has had the requisite opportunity to cure pursuant to Section 4.1.1, above.
4.4 Action at Law; No Remedy Exclusive. The City may take whatever action at law or in
equity as may be necessary to enforce performance and observance of any obligation, agreement
or covenant of the Owner under this Agreement. No remedy herein conferred upon or reserved by
the City is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law, in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or shall
be construed to be a waiver of such right or power, but any such right or power may be exercised
from time to time and as often as the City may deem expedient. In order to entitle the City to
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exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice,
other than such notice as may be herein otherwise expressly required or required by law to be
given.
ARTICLE 5. GENERAL PROVISIONS.
5.1 Limitations on Recourse. Notwithstanding anything to the contrary contained in this
Agreement, except in the event of fraud, waste, or illegal acts, or with regard to any indemnity
obligations imposed upon the Owner under the terms of this Agreement, (i) no partner, member,
officer or director, as applicable, of the Owner (each, an “Owner Affiliate”) shall have any direct,
indirect or derivative personal liability for the obligations of the Owner under this Agreement, and
(ii) the City shall not exercise any rights or institute any action against any Owner Affiliate directly,
indirectly or derivatively for the payment of any sum of money that is or may become payable
hereunder.
5.2 Maintenance, Repair, Alterations. The Owner shall maintain and preserve the Apartment
Community in good condition and repair in accordance with the Ground Lease, and shall otherwise
comply with the Ground Lease and all laws, ordinances, rules, regulations, covenants, conditions,
restrictions, and orders of any governmental authority now or hereafter affecting the conduct or
operation of the Apartment Community or any part thereof or requiring any alteration or
improvement to be made thereon. The Owner shall not commit, suffer, or permit any act to be
done in, upon, or to the Apartment Community or any part thereof in violation of any such laws,
ordinances, rules, regulations, or orders. The Owner hereby agrees that the City may conduct from
time to time through representatives, upon reasonable notice of no less than twenty-four (24) hours,
on-site inspections and observation of: (i) the maintenance and repair of the Apartment
Community, including a review of all maintenance and repair programs and practices and all
reports and records pertaining thereto, including records of expenditures relating thereto; and (ii)
such other facilities, practices, and records of the Owner relating to the Affordable Units as the
City reasonably deems to be necessary or appropriate in order to monitor the Owner’s compliance
with the provisions of this Agreement.
5.3 Notices. All notices (other than telephone notices), certificates or other communications
(other than telephone communications) required or permitted hereunder shall be sufficiently given
and should be deemed given when sent by certified mail, postage prepaid, or twenty-four (24)
hours following delivery of such notice to Federal Express or similar commercial carrier for next
business day or overnight delivery, addressed as follows:
If to the City:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: Housing Division
If to the Owner:
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_________________________
100 Pacifica, Suite 203
Irvine, CA 92618
Attn: President
5.4 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or
understood by any of the Parties, or by any third persons, as creating the relationship of employer
and employee, principal and agent, limited or general partnership, or joint venture between the
City and the Owner or the Owner’s agents, employees or contractors, and the Owner shall at all
times be deemed an independent contractor and shall be wholly responsible for the manner in
which it or its agents, or both, perform the services required of it by the terms of this Agreement
for the operation of the Apartment Community. The Owner has and hereby retains the right to
exercise full control of employment, direction, compensation and discharge of all persons assisting
in the performance of services hereunder. In regards to the on-site operation of the Apartment
Community, the Owner shall be solely responsible for all matters relating to payment of its
employees, including compliance with Social Security, withholding and all other laws and
regulations governing such matters. The Owner agrees to be solely responsible for its own acts
and those of its agents and employees.
5.5 No Claims. Nothing contained in this Agreement shall create or justify any claim against
the City by any person the Owner may have employed or with whom the Owner may have
contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the
performance of any work or services with respect to the operation of the Affordable Units.
5.6 Conflict of Interests. No member, official or employee of the City shall make 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. No
officer or employee of the Owner shall acquire any interest in conflict with or inimical to the
interests of the City.
5.7 Non-Liability of City Officials, Employees and Agents. No member, official, employee or
agent of the City shall be personally liable to the Owner, or any successor in interest, in the event
of any default or breach by the City or for any amount which may become due to the Owner or
successor in connection with this Agreement or on any obligation of the City under the terms of
this Agreement.
5.8 Unavoidable Delay; Extension of Time of Performance. In addition to specific provisions
of this Agreement, performance by either Party hereunder that relates to a construction obligation
shall not be deemed to be in default where it is due to an “Unavoidable Delay.” “Unavoidable
Delay” means a delay due to the elements (including unseasonable weather), fire, earthquakes or
other acts of God, strikes, pandemics, labor disputes, lockouts, shortages of construction materials
experienced generally in the construction industry in the local area, acts of the public enemy, riots,
insurrections or governmental regulation of the sale or transportation of materials, supply or labor;
provided, however, that to the extent a delay is caused by any other reason that the Owner
reasonably believes is beyond its control, the Owner may request, on a case-by-case basis, that the
City excuse any such delay as an Unavoidable Delay and the City shall make its determination as
to whether such delay constitutes an Unavoidable Delay using its reasonable judgment.
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5.9 Indemnity. The Owner shall indemnify, defend and hold harmless the City and all officials,
employees and agents of City (with counsel reasonably satisfactory to the City) against any costs,
liabilities, damages or judgments arising from claims or litigation of any nature whatsoever
brought by third parties and directly or indirectly arising from the Owner’s ownership or operation
of the Apartment Community, or the Owner’s performance of its obligations under this Agreement,
and in the event of settlement, compromise or judgment hold the City free and harmless therefrom.
Notwithstanding the foregoing, the indemnity provisions contained in this Section 5.9 shall not
apply with respect to any costs, liabilities, damages or judgments arising directly or indirectly from
the City’s rental of units within the Apartment Community as described in Section 4.2 hereof. The
provisions of this Section 5.9 shall survive the term of this Agreement.
5.10 Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement,
the rights and remedies of the Parties are cumulative, and the exercise or failure to exercise one or
more of such rights or remedies by either Party shall not preclude the exercise by it, at the same
time or different times, of any right or remedy for the same default or any other default by the
other Party. No waiver of any default or breach by the Owner hereunder shall be implied from
any omission by the City to take action on account of such default if such default persists or is
repeated, and no express waiver shall affect any default other than the default specified in the
waiver, and such wavier shall be operative only for the time and to the extent therein stated.
Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of
any subsequent breach of the same covenant, term or condition. The consent or approval by the
City to or of any act by the Owner requiring further consent or approval shall not be deemed to
waive or render unnecessary the consent or approval to or of any subsequent similar act. The
exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default
under this Agreement, nor shall it invalidate any act done pursuant to notice of default, or prejudice
the City in the exercise of any right, power, or remedy hereunder or under any agreements ancillary
or related hereto.
5.11 Applicable Law. This Agreement shall be interpreted under and pursuant to the laws of
the State of California.
5.12 Severability. If any term, provision, covenant or condition of this Agreement is held in a
final disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall continue in full force and effect unless the rights and obligations of the
Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.
5.13 Legal Actions. In the event any legal action is commenced to interpret or to enforce the
terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing
in any such action shall be entitled to recover against the Party not prevailing all reasonable
attorneys’ fees and costs incurred in such action (including all legal fees incurred in any appeal or
in any action to enforce any resulting judgment), as awarded by a court of competent jurisdiction.
5.14 Binding Upon Successors. This Agreement shall be binding upon and inure to the benefit
of the permitted heirs, administrators, executors, successors in interest and assigns of each of the
Parties. Any reference in this Agreement to a specifically named Party shall be deemed to apply
to any successor, heir, administrator, executor or assign of such Party who has acquired an interest
in compliance with the terms hereof or under law.
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5.15 Time of the Essence. In all matters under this Agreement, time is of the essence.
5.16 Approvals by the City. Any approvals required under this Agreement shall be made by the
City Manager or his or her designee, and shall not be unreasonably withheld, conditioned, delayed
or made, except where it is specifically provided herein that another standard applies, in which
case the specified standard shall apply.
5.17 Complete Understanding of the Parties. This Agreement and the attached Exhibits
constitute the entire understanding and agreement of the Parties with respect to the matters
described herein.
5.18 Covenants to Run With the Land. The Owner hereby subjects the Apartment Community
to the covenants, reservations, and restrictions set forth in this Agreement. The City and the Owner
hereby declare their express intent that the covenants, reservations, and restrictions set forth herein
shall be deemed covenants running with the land and shall pass to and be binding upon the Owner’s
successors in title to the Apartment Community; provided, however, that on the termination of this
Agreement said covenants, reservations and restrictions shall expire. Each and every contract,
deed or other instrument hereafter executed covering or conveying the Apartment Community or
any portion thereof shall conclusively be held to have been executed, delivered and accepted
subject to such covenants, reservations and restrictions, regardless of whether such covenants,
reservations and restrictions are set forth in such contract, deed or other instruments. No breach
of any of the provisions of this Agreement shall defeat or render invalid the lien of a mortgage or
deed of trust made in good faith and for value encumbering the Property or any interest of the
Owner therein.
5.19 Burden and Benefit. The City and the Owner hereby declare their understanding and intent
that: (i) the burden of the covenants, reservations, restrictions, and agreements set forth herein
touch and concern the Property and the Apartment Community, in that Owner’s legal interest in
the Apartment Community is rendered less valuable thereby, (ii) the covenants, reservations,
restrictions, and agreements set forth herein directly benefit the Property and the Apartment
Community (a) by enhancing and increasing the enjoyment and use of the Apartment Community
by certain Very Low Income Households, the intended beneficiaries of such covenants,
reservations, restrictions, and agreements, (b) by making possible the obtaining of advantageous
financing for the Property and the Apartment Community, and (c) by furthering the public
purposes advanced by the City, and (iii) the covenants, reservations, restrictions and agreements
set forth herein shall run with the Property and shall be binding for the benefit of and enforceable
by the City and its successors and assigns for the entire Term of this Agreement.
5.20 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which shall constitute one and the same instrument.
5.21 Amendments. This Agreement may be amended only by the written agreement of the City
and the Owner.
WHEREFORE, the undersigned has executed this Agreement as of the date first-above
written.
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OWNER:
_____________________________
CITY:
CITY OF PALM DESERT
By: ________________________
Print Name: ___________________
Title: ________________________
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
EXHIBIT “A”
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Palm Desert, County of Riverside, State of California, described as
follows:
EXHIBIT “B”
HOUSEHOLD INCOME CERTIFICATION
(Attached)
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EXHIBIT “C”
CERTIFICATE OF CONTINUING COMPLIANCE
(Attached)
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EXHIBIT E
FORM OF PROMISSORY NOTE
SECURED PROMISSORY NOTE
, 202___
Palm Desert, California
$ .00
FOR VALUE RECEIVED, the undersigned, _________________________ (“Maker” or
“Developer”), having its principal place of business at 100 Pacifica, Suite 203, Irvine, CA 92618
promises to pay to the order of the PALM DESERT HOUSING AUTHORITY (“Payee”), at 73-
510 Fred Waring Drive, Palm Desert, CA 92260, Attn: _____________________, or at such other
place as the holder of this Note from time to time may designate in writing, the principal sum of
$______________________ (the “Principal Amount”), together with interest on the unpaid
principal amount disbursed under this promissory note (“Note”) from time to time outstanding at
the “Applicable Interest Rate,” as defined below, in lawful money of the United States of America.
This Note is being delivered, and the loans evidenced hereby are being made, pursuant to the terms
of an Amended and Restated Disposition, Development and Loan Agreement between Developer
and Payee dated in April, 2024 (“DDLA”). All capitalized terms used herein which are not
separately defined herein shall have the meanings set forth therefor in the DDLA.
As of the date of this Note, $__________________ of principal has been disbursed to the City of
Palm Desert as a purchase money loan to Maker for its acquisition from the City of the property
encumbered by the deed of trust securing this Note (the “Property”).
[FOR PHASE II NOTE ONLY:][The remainder of the Principal Amount shall be disbursed as a
construction loan as described in Section 5.6 of the DDLA.]
“Applicable Interest Rate” means three percent (3%) per annum, simple interest, accruing on all
principal sums disbursed and outstanding, except that amounts not paid when due shall accrue
interest from the date due until the date paid at the lesser of: (i) ten percent (10%) per annum,
simple interest, or (ii) the maximum rate permitted by applicable law.
1. Payments. Payments under this Note shall be due and payable as follows: ____
percent of Residual Receipts, as defined in the DDLA, from the Development on the Property for
each calendar year shall be paid to Payee on an annual basis on the first June 1st after the issuance
of a final certificate of occupancy for such Development , and each June 1st thereafter (with respect
to the Residual Receipts for the preceding calendar year, until all outstanding principal and accrued
interest under this Note has been paid in full. Payments shall first be applied to accrued interest,
then to remaining outstanding principal. In addition, the entire amount of outstanding principal
and accrued interest and any additional amounts which become owing hereunder shall be paid by
Maker to Payee as of the earliest of: (i) an Event of Default by Maker under the DDLA (including,
without limitation, an uncured default under the Housing Agreement for the Property, any uncured
default under any other loan provided by Maker to Payee or any affiliate of Payee, and any uncured
default under any other Housing Agreement following the expiration of any applicable cure period
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executed by Payee or any affiliate of Payee in connection with the remainder of the Property
described in the DDLA); (ii) as provided in Section 4 below; or (iii) fifty-five (55) years after the
date a final certificate of occupancy is issued for the Development (the “Maturity Date”).
2. Secured by Deed of Trust. Repayment of this Note is secured by a deed of trust
(the “Deed of Trust”) executed by Maker for the benefit of Payee encumbering the Property
described in the Deed of Trust on which a portion of the Development described in the DDLA is
to be developed/constructed.
3. Prepayment. Maker shall have the right to prepay amounts owing under this Note
at any time, without premium.
4. Due on Sale or Encumbrance. In the event of any transfer of the Property, or any
portion thereof or interest therein, not permitted by the DDLA or approved in writing by Payee,
Payee shall have the absolute right at its option, without prior demand or notice, to declare all sums
secured hereby immediately due and payable. Failure of Payee to exercise the option to declare
all sums secured hereby immediately due and payable upon a Transfer will not constitute waiver
of the right to exercise this option in the event of any subsequent Transfer.
5. Miscellaneous.
(a) Governing Law. All questions with respect to the construction of this Note
and the rights and liabilities of the parties to this Note shall be governed by the laws of the State
of California.
(b) Attorneys’ Fees.
(i) Maker shall reimburse Payee for all reasonable attorneys’ fees, costs
and expenses, incurred by Payee in connection with the enforcement of Payee’s rights under this
Note, including, without limitation, reasonable attorneys’ fees, costs and expenses for trial,
appellate proceedings, out-of-court negotiations, workouts and settlements or for enforcement of
rights under any state or federal statute, including, without limitation, reasonable attorneys’ fees,
costs and expenses incurred to protect Payee’s security and attorneys’ fees, costs and expenses
incurred in bankruptcy and insolvency proceedings such as (but not limited to) seeking relief from
stay in a bankruptcy proceeding. The term “expenses” means any expenses incurred by Payee in
connection with any of the out-of-court, or state, federal or bankruptcy proceedings referred to
above, including, without limitation, the fees and expenses of any appraisers, consultants and
expert witnesses retained or consulted by Payee in connection with any such proceeding.
(ii) Payee shall also be entitled to its attorneys’ fees, costs and expenses
incurred in any post-judgment proceedings to collect and enforce the judgment. This provision is
separate and several and shall survive the merger of this Note into any judgment on this Note.
(c) Entire Agreement. This Note, the DDLA, the Deed of Trust and the
Housing Agreement required by the DDLA, Density Bonus Agreement, and the other documents
described in the DDLA constitute the entire agreement and understanding between and among the
parties in respect of the subject matter of such agreements and supersede all prior agreements and
understandings with respect to such subject matter, whether oral or written.
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(d) Time of the Essence. Time is of the essence with respect to every provision
hereof.
(e) Waivers by Maker. Maker waives: presentment; demand; notice of
dishonor; notice of default or delinquency; notice of acceleration; notice of protest and
nonpayment; notice of costs, expenses or losses and interest thereon; and diligence in taking any
action to collect any sums arising under this Note or in any proceeding against any of the rights or
interests in or to properties securing payment of this Note.
(f) Non-waivers. No previous waiver and no failure or delay by Maker in
acting with respect to the terms of this Note, the DDLA the Deed of Trust or any Housing
Agreement, shall constitute a waiver of any breach, default, or failure of condition under any of
them. A waiver of any term must be made in writing and shall be limited to the express written
terms of such waiver.
(g) Non-Recourse. Repayment of this Note and all other obligations of
Borrower hereunder, under the DDLA, Housing Agreement or Deed of Trust shall be a non-
recourse obligation of Borrower, such that the general partner of Maker shall not have any personal
obligation to make any payments or perform any other obligations of Maker.
(h) Cure by Limited Partner(s). Payee hereby agrees that any cure of any
default made or tendered by Maker’s limited partner (whose name and notice address is as set forth
below in this Section 5(h)) shall be deemed to be a cure by Maker and shall be accepted or rejected
on the same basis as if made or tendered by Maker.
Investor Limited Partner Name and Notice Address:
______________________
MAKER:
_______________________________
a California limited partnership
By:
Print Name:
Title:
EXHIBIT F
FORM OF DEED OF TRUST
RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: _______________
SPACE ABOVE THIS LINE FOR RECORDER'S USE
DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST AND ASSIGNMENT OF RENTS (this “Deed of Trust”) is dated
as of _________, 202__, and is executed by ______________________ (“Trustor”), in favor of
FIRST AMERICAN TITLE COMPANY, as “Trustee,” for the benefit of the PALM DESERT
HOUSING AUTHORITY (“Beneficiary”).
Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST,
WITH POWER OF SALE, that certain land in the City of Palm Desert, Riverside County,
California, described on Exhibit “A” attached hereto;
TOGETHER WITH the rents, issues and profits thereof and all leases and rental agreements
related thereto, SUBJECT, HOWEVER, to the right, power, and authority hereinafter given to
Trustor to collect and apply such rents, issues, and profits;
TOGETHER WITH all buildings and improvements of every kind and description now or
hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric
fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry
equipment, steam and hot water boilers, stoves, ranges, elevators and motors, bath tubs, sinks,
water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantels, cabinets,
refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and
appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby
agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be
permanently affixed to and a part of the realty;
TOGETHER WITH all building materials and equipment now or hereafter delivered to the
premises and intended to be installed therein;
TOGETHER WITH all articles of personal property owned by the Trustor now or hereafter
attached to or used in and about the building or buildings now erected or hereafter to be erected on
the lands described which are necessary to the complete and comfortable use and occupancy of
such building or buildings for the purposes for which they were or are to be erected, including all
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other goods and chattels and personal property as are ever used or furnished in operating a building,
or the activities conducted therein, similar to the one herein described and referred to, and all
renewals or replacements thereof or articles in substitution therefor, whether or not the same are,
or shall be attached to the building or buildings in any manner.
All of the foregoing, together with the real property, is herein referred to as the “Property.”
For the purpose of securing (a) payment of the indebtedness evidenced by that certain promissory
note (the “Note”) of substantially even date herewith, in the stated principal sum of
$_______________________, executed by Trustor, as maker, in favor of Beneficiary, as payee,
and all amendments thereof; and (b) sums owing by Trustor to Beneficiary under this Deed of
Trust.
(2) That it shall faithfully perform each and every covenant contained in the Note, the
Disposition, Development and Loan Agreement (“Loan Agreement”) between Trustor and
Beneficiary dated substantially concurrently herewith and the Housing Agreement and other
documents described therein. Upon an Event Default under (and as defined in) the Loan
Agreement, Beneficiary may accelerate the loan evidenced by the Note, and if not paid, may
exercise any and all remedies permitted by law, including foreclosure of this Deed of Trust.
(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 attorneys’ fees in a reasonable sum, in any such 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 (10) calendar days before delinquency all property taxes and
assessments and any other taxes affecting the Property, including assessments on appurtenant
water stock; when due, all encumbrances, charges and liens, with interest, on the Property or any
part thereof, which appear to be prior or superior hereto (provided, however, that Trustor may
dispute in good faith any such tax or assessment after posting bond on same).
(5) That should Trustor fail to make any payment or to do any act as herein provided, then
Beneficiary, without obligation so to do 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 the Property for such purposes with written notice to Trustor; 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 its reasonable fees.
(6) To pay immediately and without demand all sums so expended by Beneficiary hereunder,
or under the Maintenance Agreement, in accordance with the terms thereof.
(7) The Trustor further covenants that it will not voluntarily create, suffer, or permit to be
created against the Property any lien or liens except for deeds of trust securing financing used to
pay for construction of the Project, as defined in the Loan Agreement (or securing refinancing of
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such construction loans) and further that it will keep and maintain the Property free from the claims
of all persons supplying labor or materials which will enter into the construction of any and all
buildings now being erected or to be erected on the Property, or will cause the release of or will
provide a bond against any such liens within ten (10) days of the attachment of the lien or liens.
(8) That any award of damages in connection with any condemnation for public use of or injury
to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may
apply or release such moneys it receives in the same manner and with the same effect as above
provided for disposition of proceeds of fire or other insurance.
(9) 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 so to pay.
(10) That at any time or from time to time, without liability therefor and without notice, upon
written request of Beneficiary, and without affecting the personal liability of any person for
payment of the indebtedness secured hereby, Trustee may: reconvey any part of the Property;
consent to the making of any map or plat thereof; join in granting any easement thereon; or join in
any extension agreement or any agreement subordinating the lien or charge hereof.
(11) That upon written request of Beneficiary stating that all sums secured hereby have been
paid or forgiven by Beneficiary, and upon surrender of the Note to Trustee for cancellation and
retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then
held hereunder. The recitals in such reconveyance of any matters 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.”
(12) That Trustor hereby absolutely and unconditionally assigns and transfers to Beneficiary all
the rents, income and profits of the Property encumbered hereby, and hereby give to and confer
upon Beneficiary the right, power and authority to collect such rent, income, and profits, and
Trustor irrevocably appoints Beneficiary Trustor’s true and lawful attorney at the option of
Beneficiary, at any time, to give receipts, releases and satisfactions and to sue, either in the name
of Trustor or in the name of Beneficiary, for all income, and apply the same to the indebtedness
secured hereby; provided, however, so long as no default by Trustor in the payment of any
indebtedness secured hereby shall exist and be continuing beyond any applicable cure period
expressly provided therein, then, Trustor shall have the right to collect all rent, income and profits
from the Property and to retain, use and enjoy the same. Upon any such default, Beneficiary may
at any time without notice, either in person, by agent, or by a receiver to be appointed by a court,
and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon
and take possession of the Property or any part thereof, in its own name sue for or otherwise collect
such rents, issues and profits, including those past due and unpaid, and apply the same, less costs
and expenses of operation and collection, including reasonable attorney’s fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon
and taking possession of the Property, the collection of such rents, issues and profits and the
application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder
or invalidate any act done pursuant to such notice.
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(13) That upon a Default by Trustor under the Loan Agreement (after all notice and cure periods
have elapsed), 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 election to cause to be sold the Property, which notice Trustee shall cause to be filed
for record. Beneficiary also shall deposit with Trustee this Deed of Trust, the 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 the notice of default, and notice of sale having been
given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the
time and place fixed by it in the 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 the
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 the 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.
(14) 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 the 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. The 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.
(15) 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 Note, whether or not named as
Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender
includes the feminine and/or neuter, and the singular number includes the plural.
(16) If Trustor shall sell, convey, hypothecate, transfer, encumber or alienate the Property, or
any part thereof, or any interest therein, or any interest in Trustor is transferred, or Trustor shall be
divested of title or any interest in the Property in any manner or way, whether voluntarily or
involuntarily, without the prior written consent of the Beneficiary being first had and obtained (if
and to the extent such consent is required in the Loan Agreement or if the failure to get such
consent would be an Event of Default under the Loan Agreement), or if an Event of Default by
Trustor shall occur under the Loan Agreement, then Beneficiary shall have the right, at its option,
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to declare any indebtedness or obligations secured hereby, irrespective of the maturity date
specified in any note evidencing the same, immediately due and payable.
(17) That Trustor shall promptly pay when due the payments of interest, principal, and all other
charges accruing under any superior or prior trust deed, mortgage, or other instrument
encumbering the Property. Beneficiary shall have the right, but not the obligation, to cure any
defaults on any superior or prior deed of trust or promissory note secured thereby and upon curing
such default Trustor shall immediately reimburse Beneficiary for all costs and expenses incurred
thereby, together with interest thereon at the maximum legal rate permitted to be charged by non-
exempt lenders under the State of California, and Trustor’s failure to pay such amount on demand
shall be a breach hereof. Trustor’s breach or default of any covenant or condition of any superior
or prior trust deed, mortgage or other instrument encumbering the Property shall be a default under
this Deed of Trust, whereupon Beneficiary shall have the right to declare all sums under the Note
secured hereby immediately due and payable as provided in the Note.
(18) The undersigned Trustor requests that a copy of any Notice of Default and of any Notice
of Sale hereunder (and any other notices hereunder) be mailed to it at its address for notices in the
DDLA.
(19) Trustor shall not commit waste with respect to the Property.
(20) Any notices, requests or approvals given under this Deed of Trust from one party to another
must be in writing and may be personally delivered; or deposited with the United States Postal
Service, postage prepaid, for delivery by registered or certified mail, return receipt requested; or
sent by next business day delivery service such as FedEx, to the following address:
If to Borrower: Palm Desert Palm Villas Partners LP,
a California limited partnership
100 Pacifica, Suite 203
Irvine, CA 92618
Attn:
If to Beneficiary: Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Either party may change its address for notice by giving written notice of its change of address to
the other party. Notices are considered delivered on the date received if given next business day
delivery service and three (3) business days after mailing if sent by United States Postal Service
registered or certified mail. If a notice is sent by registered or certified mail and receipt is rejected
it shall be considered delivered on the date delivery was attempted by the United States Postal
Service.
(21) Beneficiary acknowledges that Trustor and the California Tax Credit Allocation
Committee have or intend to enter into, or concurrently with the execution and delivery of the
Loan Documents are entering into, a Regulatory Agreement (the “TCAC Regulatory Agreement”),
which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B)
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of the Internal Revenue Code, as amended (the “Code”). Beneficiary acknowledges and agrees
that, in the event of a foreclosure of its interest under the Deed of Trust or delivery by the Trustor
of a deed in lieu thereof (collectively, a “Foreclosure”), the following rule contained in Section
42(h)(6)(E)(ii) of the Code shall apply: For a period of three (3) years from the date of Foreclosure,
with respect to any unit that had been regulated by the TCAC Regulatory Agreement, (i) none of
the eligible tenants occupying those units at the time of Foreclosure may be evicted or their tenancy
terminated (other than for good cause, including but not limited to, the tenants’ ineligibility
pursuant to Section 42 of the Code), (ii) nor may any rent be increased except as otherwise
permitted under Section 42 of the Code.
TRUSTOR:
______________________________
a California limited partnership
By:
Name:
Title:
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State of California )
County of ______ )
On _________________________, before me, ,
(insert name and title of the officer) 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 (Seal)
EXHIBIT "A"
DESCRIPTION OF LAND
Real property in the City of Palm Desert, County of Riverside, State of California, described as
follows:
[LEGAL DESCRIPTION TO BE PROVIDED.]
EXHIBIT G-1
FORM OF PHASE I NOTICE OF AFFORDABILITY RESTRICTIONS
RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Executive Director
SPACE ABOVE THIS LINE FOR RECORDER’S USE
FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE §6103
NOTICE OF AFFORDABILITY RESTRICTIONS
IMPORTANT NOTICE TO OWNERS, PURCHASERS, TENANTS, LENDERS, BROKERS,
ESCROW AND TITLE COMPANIES, AND OTHER PERSONS, REGARDING
AFFORDABLE HOUSING RESTRICTIONS ON THE REAL PROPERTY DESCRIBED IN
THIS NOTICE: RESTRICTIONS HAVE BEEN RECORDED WITH RESPECT TO THE
PROPERTY DESCRIBED BELOW WHICH RESTRICT OCCUPANCY TO EXTREMELY
LOW, VERY LOW AND LOW-INCOME HOUSEHOLDS AND THE RENTS WHICH MAY
BE CHARGED. THESE RESTRICTIONS MAY LIMIT THE RENTS FOR EACH UNIT TO AN
AMOUNT WHICH IS LESS THAN FAIR MARKET RENT. THESE RESTRICTIONS LIMIT
THE INCOME OF PERSONS AND HOUSEHOLDS WHO ARE PERMITTED TO RENT AND
OCCUPY THE UNITS.
This NOTICE OF AFFORDABILITY RESTRICTIONS (the “Notice”), is dated as of
___________, ___, 202__, and is executed by ___________________, a __________________
(“Owner”), whose address is _________________, and by the PALM DESERT HOUSING
AUTHORITY (the “PDHA”) in connection with that certain Housing Agreement (LMIHF
Agreement, and City Loan Restrictions Agreement) among Owner, the City of Palm Desert and
the PDHA dated substantially concurrently herewith and recorded in the Official Records of
Riverside County substantially concurrently herewith (the “Housing Agreement”).
RECITALS
A. Owner owns the land described on Exhibit “A” in the City of Palm Desert, State of
California and the improvements thereon (the “Property”), which is [part of] APN
_________________ [ADDRESS?]
B. Owner, City and PDHA are entering into and recording the Housing Agreement
substantially concurrently herewith, which relates to and encumbers the Property.
A. Capitalized terms used herein but not defined shall have the meaning set
forth in the Housing Agreement.
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TERMS OF NOTICE
1. Requirement for Recorded Notice. This Notice is being executed and recorded
pursuant to California Health and Safety Code Section 33334.3(f)(3)(B).
2. Housing Agreement (Regulatory Agreement). This Notice is being recorded
substantially concurrently with the recordation of the Housing Agreement, which is incorporated
herein by reference.
3. General Recitation of Affordability Restrictions; Term. The Housing Agreement
restricts the occupancy of 120 rental units on the Property to occupancy by extremely low, very
low and low-income households as their principal residence at an affordable rent (as more
particularly described in and required by the Housing Agreement), and in compliance with
California Health & Safety Code Sections 50052.5, 50053, 50079.5, 50106 and Title 25 of the
California Code of Regulations Section 6910, et. seq., for a term commencing on the date thereof
and continuing until fifty-five (55) years after issuance of a Certificate of Occupancy by the City
of Palm Desert for the improvements required to be made by Owner to the Property under that
certain Amended and Restated Disposition, Development and Loan Agreement among Owner, the
PDHA and the City of Palm Desert dated in April, 2024. An additional unit is restricted to be used
by an on-site manager as its residence.
4. Summary of Affordable Housing Restrictions. The Housing Agreement restricts
the occupants (tenants) of the apartments on the Property to extremely low, very low and low
income households and restrict the amount of rent which may be charged for the apartment, as
follows:
(a) Thirty-six (36) units shall be restricted to households whose income does
not exceed thirty percent (30%) of Area Median Income (as defined below), adjusted by family
size appropriate to the unit. Such units consist of 6 one-bedroom units, 27 two-bedroom units, and
3 three-bedroom units;
(b) Sixty-one (61) units shall be restricted to households whose income does
not exceed fifty-fine percent (59%) of Area Median Income (as defined below), adjusted by family
size appropriate to the unit. Such units consist of 9 one-bedroom units, 48 two-bedroom units and
4 three-bedroom units.
(c) Twenty-three (23) units shall be restricted to households whose income
does not exceed eighty percent (80%) of Area Median Income, adjusted by family size appropriate
to the unit. Such units consist of 23 three-bedroom units.
(d) The remaining unit shall be used solely as a manager’s unit for on-site
apartment managers.
“Adjusted by family size appropriate to the unit” shall have the meaning set forth
in California Health and Safety Code Section 50052.5(h). “Area Median Income” shall have the
meaning set forth in California Health and Safety Code Sections 50106 and 50079.5.
Rent Restrictions: Rent is restricted to an “affordable” rent for extremely low,
very low and low-income households pursuant to Section 50053(b) of the California Health &
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Safety Code. However, households at 59% of Area Median Income households are to pay
affordable rent based on 59% of the Area Median Income.
This Notice does not contain a full description of the details of all of the terms and
conditions of the Housing Agreement. You will need to obtain and read the Housing Agreement
to fully understand the restrictions and requirements which apply to the Property.
IN WITNESS WHEREOF, this Notice has been executed and made effective on the day
and year first above written.
PDHA:
PALM DESERT HOUSING AUTHORITY
By:
____________________,
Executive Director
OWNER:
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P6401-0001\2940216v1.doc
State of California )
County of ___________________ )
On _________________________, before me, ,
(insert name and title of the officer)
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 (Seal)
G-1-62-
P6401-0001\2940216v1.doc
State of California )
County of _________________ )
On _________________________, before me, ,
(insert name and title of the officer)
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 (Seal)
EXHIBIT “A”
LEGAL DESCRIPTION OF LAND
Real property in the City of Palm Desert, County of Riverside, State of California, described as
follows:
EXHIBIT G-2
FORM OF PHASE II NOTICE OF AFFORDABILITY RESTRICTIONS
RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Executive Director
SPACE ABOVE THIS LINE FOR RECORDER’S USE
FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE §6103
NOTICE OF AFFORDABILITY RESTRICTIONS
IMPORTANT NOTICE TO OWNERS, PURCHASERS, TENANTS, LENDERS, BROKERS,
ESCROW AND TITLE COMPANIES, AND OTHER PERSONS, REGARDING
AFFORDABLE HOUSING RESTRICTIONS ON THE REAL PROPERTY DESCRIBED IN
THIS NOTICE: RESTRICTIONS HAVE BEEN RECORDED WITH RESPECT TO THE
PROPERTY DESCRIBED BELOW WHICH RESTRICT OCCUPANCY TO EXTREMELY
LOW, VERY LOW AND LOW-INCOME HOUSEHOLDS AND THE RENTS WHICH MAY
BE CHARGED. THESE RESTRICTIONS MAY LIMIT THE RENTS FOR EACH UNIT TO AN
AMOUNT WHICH IS LESS THAN FAIR MARKET RENT. THESE RESTRICTIONS LIMIT
THE INCOME OF PERSONS AND HOUSEHOLDS WHO ARE PERMITTED TO RENT AND
OCCUPY THE UNITS.
This NOTICE OF AFFORDABILITY RESTRICTIONS (the “Notice”), is dated as of
___________, ___, 202__, and is executed by ___________________, a __________________
(“Owner”), whose address is _________________, and by the PALM DESERT HOUSING
AUTHORITY (the “PDHA”) in connection with that certain Housing Agreement (LMIHF
Agreement, and City Loan Restrictions Agreement) among Owner, the City of Palm Desert and
the PDHA dated substantially concurrently herewith and recorded in the Official Records of
Riverside County substantially concurrently herewith (the “Housing Agreement”).
RECITALS
A. Owner owns the land described on Exhibit “A” in the City of Palm Desert, State of
California and the improvements thereon (the “Property”), which is [part of] APN
_________________ [ADDRESS?]
B. Owner, City and PDHA are entering into and recording the Housing Agreement
substantially concurrently herewith, which relates to and encumbers the Property.
C. Capitalized terms used herein but not defined shall have the meaning set forth in
the Housing Agreement.
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P6401-0001\2940216v1.doc
TERMS OF NOTICE
1. Requirement for Recorded Notice. This Notice is being executed and
recorded pursuant to California Health and Safety Code Section 33334.3(f)(3)(B).
2. Housing Agreement (Regulatory Agreement). This Notice is being recorded
substantially concurrently with the recordation of the Housing Agreement, which is incorporated
herein by reference.
3. General Recitation of Affordability Restrictions; Term. The Housing
Agreement restricts the occupancy of 119 units on the Property to occupancy by extremely low,
very low and low-income households as their principal residence at an affordable rent (as more
particularly described in and required by the Housing Agreement), and in compliance with
California Health & Safety Code Sections 50052.5, 50053, 50079.5, 50106 and Title 25 of the
California Code of Regulations Section 6910, et. seq., for a term commencing on the date thereof
and continuing until fifty-five (55) years after issuance of a Certificate of Occupancy by the City
of Palm Desert for the improvements required to be made by Owner to the Property under that
certain Amended and Restated Disposition, Development and Loan Agreement among Owner, the
PDHA and the City of Palm Desert dated in April, 2024. An additional unit is restricted to be used
by an on-site manager as its residence.
4. Summary of Affordable Housing Restrictions. The Housing Agreement
restricts the occupants (tenants) of the apartments on the Property to extremely low, very low and
low income households and restrict the amount of rent which may be charged for the apartment,
as follows:
(a) Thirty-six (36) units shall be restricted to households whose income does
not exceed thirty percent (30%) of Area Median Income (as defined below), adjusted by family
size appropriate to the unit. Such units consist of 6 one-bedroom units, 47 two-bedroom units, and
4 three-bedroom units;
(b) Sixty (60) units shall be restricted to households whose income does not
exceed fifty-fine percent (59%) of Area Median Income (as defined below), adjusted by family
size appropriate to the unit. Such units consist of 9 one-bedroom units, 47 two-bedroom units and
4 three-bedroom units.
(c) Twenty-three (23) units shall be restricted to households whose income
does not exceed eighty percent (80%) of Area Median Income, adjusted by family size appropriate
to the unit. Such units consist of 23 three-bedroom units.
(d) The remaining unit shall be used solely as a manager’s unit for on-site
apartment managers.
“Adjusted by family size appropriate to the unit” shall have the meaning set forth
in California Health and Safety Code Section 50052.5(h). “Area Median Income” shall have the
meaning set forth in California Health and Safety Code Sections 50106 and 50079.5.
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Rent Restrictions: Rent is restricted to an “affordable” rent for extremely low,
very low and low-income households pursuant to
Section 50053(b) of the California Health & Safety Code.
However, the sixty (60) units with households of 59% of
Area Median Income households are to pay affordable rent
based on 59% of the Area Median Income.
This Notice does not contain a full description of the details of all of the terms and conditions of
the Housing Agreement. You will need to obtain and read the Housing Agreement to fully
understand the restrictions and requirements which apply to the Property.
IN WITNESS WHEREOF, this Notice has been executed and made effective on the day
and year first above written.
PDHA:
PALM DESERT HOUSING AUTHORITY
By:
____________________,
Executive Director
OWNER:
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P6401-0001\2940216v1.doc
State of California )
County of ___________________ )
On _________________________, before me, ,
(insert name and title of the officer)
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 (Seal)
G-2-68-
P6401-0001\2940216v1.doc
State of California )
County of _________________ )
On _________________________, before me, ,
(insert name and title of the officer)
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 (Seal)
Exhibit H-1 goes here
RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: _________________
SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY
This Document is recorded for the benefit of the City of Palm Desert and is exempt
from recording fees pursuant to Sections 6103, 27383 and 27388.1
of the California Government Code.
HOUSING AGREEMENT
(LMIHF Agreement; Phase I)
by and between the
PALM DESERT HOUSING AUTHORITY,
and
__________________________
DATED AS OF _________ ____, 202__
HOUSING AGREEMENT
THIS HOUSING AGREEMENT (the “Agreement”) is dated as of ______________ ___,
202__, and is by and between the PALM DESERT HOUSING AUTHORITY, a public body,
corporate and politic (the “Authority”)and ____________________________ (the “Owner”).
Authority, City and Owner are sometimes referred to herein individually as a “Party” and
collectively as “Parties”.
RECITALS
This Agreement is predicated upon the following facts:
A. The Owner is the owner of the land described in “Exhibit A” attached hereto (the
“Property”).
B. The City, the Authority and Owner have entered into that certain Amended and
Restated Disposition, Development and Loan Agreement dated in April, 2024 (“DDLA”),
pursuant to which the City conveyed the Property to the Owner for the development described in
the DDLA (“Development” or “Apartment Community”) and made a loan to Owner for the
purchase price of the Property (“City Loan”). Capitalized terms used but not defined herein shall
have the meaning set forth in the DDLA.
C. Pursuant to the DDLA, the Owner executed a Promissory Note in favor of
Authority and a deed of trust in favor of Authority securing such Promissory Note and the
Authority is obligated to make disbursements of loan proceeds subject to and in accordance with
the DDLA.
D. The Authority loan was made with moneys in the Low and Moderate Income
Housing Asset Fund established and held by the Authority as successor to the housing assets of
the former Palm Desert Redevelopment Agency, and California law and the DDLA require that
the Authority obtain recorded restrictions on the Property and Development thereon restricting the
apartment units on the Property to extremely low and low income households at an affordable rent.
E. Additionally, the Owner has applied for and obtained a density bonus from the City
for the Development which permits greater density and less parking than would otherwise be
required, and in exchange, the City also requires that the apartment units be so restricted, and that
such restrictions not be subordinate or subordinated to any deeds of trust or other consensual liens.
Such restrictions are contained in a separate Housing Agreement between the City and the Owner.
F. This Agreement is the restriction agreement described in Recital D above.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth
herein and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the City and the Owner hereby agree as follows:
ARTICLE 1. DEFINITIONS AND INTERPRETATION.
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1.1 Definitions.
Capitalized terms used herein shall have the following meanings unless the context in
which they are used clearly requires otherwise.
“Affordable Units” shall mean 120 of the 121 units in the Apartment Community
available to and occupied by, or held vacant for occupancy only by, Extremely Low Income
Households, 59% AMI Low Income Households and 80% AMI Low Income Households and
rented at an Affordable Rent. Specifically, the Affordable Units consist of 36 units for Extremely
Low Income Households, 61 units for 59% AMI Low Income Households and 23 units for 80%
AMI Low Income Households. The Affordable Units will include the number of bedrooms shown
on the following table:
Bedroom
Size
Extremely
Low
Income
Household
Affordable
Units
59% AMI
Low
Income
Household
Affordable
Units)
80% AMI
Low
Income
Household
Affordable
Units
One 6 9 0
Two 27 48 0
Three 3 4 23
Total 36 61 23
“Affordable Rent” hall mean rent for an Affordable Unit, including a Reasonable Utility
Allowance, determined pursuant to California Health and Safety Code Section 50053(b) and the
state regulations adopted by the California Department of Housing and Community Development
(“HCD”) pursuant thereto, as amended from time to time, based upon the AMI adjusted for a
Household Size Appropriate to the Affordable Unit. More specifically, (1) for each of the 36
Affordable Units reserved for Extremely Low Income Households, the maximum monthly
Affordable Rent, including a Reasonable Utility Allowance, may not exceed thirty percent (30%)
of thirty percent (30%) of the AMI, adjusted for a Household Size Appropriate to the Affordable
Unit, divided by twelve, (2) for each of the 61 Affordable Units reserved for 59% AMI Low
Income Households, the maximum monthly Affordable Rent, including a Reasonable Utility
Allowance, may not exceed thirty percent (30%) of fifty-nine percent (59%) of the AMI, adjusted
for a Household Size Appropriate to the Affordable Unit, divided by twelve, and (3) for each of
the 23 Affordable Units reserved for 80% AMI Low Income Households , the maximum monthly
Affordable Rent, including a Reasonable Utility Allowance, may not exceed thirty percent (30%)
of fifty-nine percent (59%) of the AMI, adjusted for a Household Size Appropriate to the
Affordable Unit, divided by twelve.
“AMI” shall mean the area median income for Riverside County as published by the
California Department of Housing and Community Development pursuant to Health and Safety
Code Section 50052.5, or successor statute, as adjusted for family size in accordance with the state
regulations adopted pursuant to California Health and Safety Code Section 50052.5.
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“Extremely Low Income Household” shall mean persons and families whose income
does not exceed the qualifying limits for extremely low income households set forth in California
Health and Safety Code Section 50106 and Title 25 of the California Code of Regulations, as such
statute and regulations may be amended from time to time.
“Household Size Appropriate to the Affordable Unit” in the absence of pertinent federal
statutes or regulations applicable to the Apartment Community, shall have the meaning set forth
in California Health and Safety Code Section 50052.5(h), as amended from time to time.
“59% AMI Low Income Household” shall mean persons and families whose income does
not exceed the 59% of the AMI as set forth in California Health and Safety Code Section 50079.5
and Title 25 of the California Code of Regulations, including Section 6912, as such statute and
regulations may be amended from time to time.
“80% AMI Low Income Household” shall mean persons and families whose income does
not exceed the qualifying limits for lower income households set forth in California Health and
Safety Code Section 50079.5 and Title 25 of the California Code of Regulations, including Section
6912, as such statute and regulations may be amended from time to time.
“Reasonable Utility Allowance” shall mean a utility allowance for utilities paid by a
tenant (not including telephone, internet or cable service) utilizing the utility allowance schedule
published annually by the Housing Authority of the County of Riverside.
“Required Covenant Period” shall mean the period commencing on the date all units in
the Apartment Community have been completed as evidenced by the City’s issuance of a final
Certificate of Occupancy for the Apartment Community, and ending as of the fifty-fifth (55th)
anniversary thereof.
1.2 Rules of Construction.
1.2.1 The singular form of any word used herein, including the terms defined herein shall
include the plural and vice versa. The use herein of a word of any gender shall include correlative
words of all genders.
1.2.2 Unless otherwise specified, references to articles, sections, and other subdivisions
of this Agreement are to the designated articles, sections, and other subdivisions of this Agreement
as originally executed. The words “hereof,” “herein,” “hereunder,” and words of similar import
shall refer to this Agreement as a whole.
1.2.3 All of the terms and provisions hereof shall be construed to effectuate the purposes
set forth in this Agreement and to sustain the validity hereof.
1.2.4 Headings or titles of the several articles and sections hereof and the table of contents
appended to copies hereof shall be solely for convenience of reference and shall not affect the
meaning, construction, or effect of the provisions hereof.
ARTICLE 2. ONGOING APARTMENT COMMUNITY OBLIGATIONS.
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2.1 Apartment Community and Affordable Units.
The Owner shall develop and construct the Apartment Community within a portion of the
Project on the Property in conformity with the DDLA. Thereafter, during the Required Covenant
Period, the Owner agrees that not less than 239 units in the Apartment Community shall be
Affordable Units, meaning that (a) 36 of such units shall be continually available to and occupied
by, or held vacant for occupancy only by, Extremely Low Income Households, (b) 61 of such units
shall be continually available to and occupied by, or held vacant for occupancy only by, 59% AMI
Low Income Households, and (c) 23 of such units shall be continually available to and occupied
by, or held vacant for occupancy only by, 80% AMI Low Income Households. All of the rental
units in the Apartment Community shall be similarly constructed and generally constructed at the
same time. The Affordable Units shall be of comparable quality to those rental units in the
Apartment Community which are available to other tenants. The Owner agrees that, to the extent
commercially reasonable, Affordable Units will not be underutilized. No persons shall be
permitted to occupy any Affordable Unit in excess of applicable limit of maximum occupancy set
by the City’s Municipal Code and the laws of the State of California, or by Authority Resolution
HA-84 adopted on December 14, 2017 (and the occupancy policy attached as Exhibit A thereto)
and any amendments or replacements thereof.
2.2 Residential Rental Property.
The Owner covenants to operate the Apartment Community as residential rental property.
During the Required Covenant Period, the Affordable Units will be held and used for the purpose
of providing residential living, and the Owner shall own, manage and operate, or cause the
management and operation of, the Apartment Community to provide such affordable rental
housing. All of the rental units in the Apartment Community with the exception of one
(1)manager’s units, will be available for rental on a continuous basis to members of the general
public and the Owner will not give preference to any particular class or group in renting the units
in the Apartment Community, except as required under this Agreement. The Owner shall not
convert any Affordable Unit(s) to condominiums or cooperative ownership or sell condominium
or cooperative conversion rights to any Affordable Unit(s) during the term of this Agreement.
2.3 Extremely Low, 59% AMI Low and 80% AMI Low Income Households.
2.3.1 Income Qualification; Initial Certification. Subject to the applicable provisions
hereof, throughout the Required Covenant Period, Affordable Units will be exclusively occupied
by, or available for occupancy only by, Extremely Low, 59% AMI Low and 80% AMI Low
Income Households as described above. Prior to the rental or lease of an Affordable Unit and in
accordance with Section 2.6 hereof, the Owner will obtain and maintain on file a Household
Income Certification (“Income Certification”) substantially in the form attached hereto as Exhibit
“B” and incorporated herein by this reference for each Extremely Low, 59% AMI Low and 80%
AMI Low Income Households, as applicable, and shall provide copies of same to the Authority at
such times as the Authority may, from time to time, reasonably require. In addition, the Owner
will provide such further information as may reasonably be required in the future by the Authority.
The Income Certification shall be dated immediately prior to the applicable household’s initial
occupancy of an Affordable Unit. The Owner shall make a good faith effort to verify that the
income provided by an applicant in an Income Certification is accurate by taking any one or more
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of the following steps as part of the verification process for all household members over the age
of eighteen (18) as appropriate:
(i) Obtain two (2) pay stubs for the two (2) most recent pay periods;
(ii) Obtain a true copy of an income tax return for the most recent tax year in
which a return was filed;
(iii) Obtain an income verification form from the household member’s current
employer;
(iv) Obtain an income verification form from the Social Security Administration
and/or the State Department of Social Services, or its equivalent, if the household member receives
assistance from either of those agencies;
(v) If the household member is unemployed and has no tax return, obtain
another form of independent verification; or
(vi) Obtain such other documentation as may be reasonably acceptable pursuant
to Title 25 of the California Code of Regulations, as amended from time to time, to verify income.
2.3.2 Certificate of Continuing Program Compliance; Annual Report; Annual
Monitoring/Administration Fee. Throughout the Required Covenant Period, the Owner will
prepare and submit to the Authority, at such periodic frequency as the Authority might reasonably
require, but not more than once annually, a Certificate of Continuing Compliance in substantially
the form attached hereto as Exhibit “C” and incorporated herein by this reference, and executed
by the Owner. The Owner will also prepare and submit to the Authority on or before each
anniversary date of the commencement of the Required Covenant Period, and for the preceding
calendar year, a report in form and substance reasonably satisfactory to the Authority summarizing
the vacancy rate of the Apartment Community, including the number of Affordable Units held
vacant for occupancy by Extremely Low, 59% AMI Low and 80% AMI Low Income Households
for such calendar year. Owner shall pay an annual monitoring/administration fee in the amount of
Ten Thousand Dollars ($10,000.00), increasing by three percent (3%) annually, concurrently with
Developer’s annual payments of Residual Receipts to Authority under the Authority Loan.
2.4 Affordable Rent. Throughout the Required Covenant Period, an Affordable Rent shall be
charged to the Extremely Low, 59% AMI Low and 80% Low Income Household occupants of
Affordable Units, as more specifically described above.
2.5 Rent Increases. Rents for Affordable Units may be increased not more than once per year
and twelve (12) months must have elapsed since the date of the tenant’s initial occupancy or the
last rent increase. The rents charged following such an increase, or upon a vacancy and new
occupancy by an Extremely Low, 59% AMI Low or 80% AMI Low Income Household, as
applicable, shall not exceed an Affordable Rent. The Owner shall, consistent with applicable law,
give proper written notice to tenants of all rent increases, and upon written request, provide the
Authority with reasonable detail concerning the amount of and rationale for such rent increases.
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2.6 Income Recertification of Affordable Units. Annually, on the anniversary date of
occupancy of an Affordable Unit by an Extremely Low, 59% AMI Low or 80% AMI Low Income
Household, as applicable, the Owner shall obtain and maintain on file an annual income
certification, in form and substance reasonably satisfactory to the Authority, from each household
occupying an Affordable Unit, based upon the current income of each household member over the
age of eighteen (18). The Owner shall make a good faith effort to verify that the income provided
by the household is accurate in accordance with Section 2.3.1, above.
2.6.1 A rental unit occupied by a household that qualifies as an Extremely Low, 59%
AMI Low or 80% AMI Low Income Household, as applicable, at the time the household first
occupies an Affordable Unit shall be deemed to continue to be so occupied until a recertification
of such household’s income demonstrates that such household no longer qualifies as an Extremely
Low, 59% AMI Low or 80% AMI Low Income Household, as applicable. At such time as a
household ceases to qualify as an Extremely Low, 59% AMI Low or 80% AMI Low Income
Household, as applicable, based on income recertification, the Owner shall designate the next
available unit (one that is not occupied by a tenant) with the same number of bedrooms as the
occupied Affordable Unit and it shall be leased to an Extremely Low, 59% AMI Low or 80% AMI
Low Income Household, as applicable, so that the number of Affordable Units occupied by or
reserved for occupancy by Extremely Low, 59% AMI Low or 80% Low Income Households will
remain constant. For purposes of this Agreement, such designated unit will be considered an
Affordable Unit if it is held vacant and available solely for occupancy by an Extremely Low, 59%
AMI Low or 80% AMI Low Income Household, as applicable, and, upon occupancy, the income
eligibility of the household as an Extremely Low, 59% AMI Low or 80% AMI Low Income
Household is verified and the unit is rented at Affordable Rent.
2.7 Lease or Occupancy Agreement. Prior to the rental or lease of an Affordable Unit to an
Extremely Low, 59% AMI Low or 80% AMI Low Income Household, the Owner shall require
the tenant to execute a written lease or occupancy agreement. The Owner shall maintain on file
throughout the Required Covenant Period and for a four (4) year period thereafter, the executed
lease or occupancy agreement of each tenant occupying an Affordable Unit. The form of lease or
occupancy agreement used by the Owner for the lease or rental of Affordable Units shall be that
which is reasonable and customary in residential leasing. In addition, each lease or occupancy
agreement for an Affordable Unit shall (i) provide that the tenants of such Affordable Unit shall
be subject to annual recertification of income and subject to rental increases in accordance with
Sections 2.5 and 2.6 of this Agreement, and (ii) contain a provision to the effect that the Owner
has relied on the income certification and supporting information supplied by the tenant in
determining qualification for occupancy of the Affordable Unit, and that any material misstatement
in such certification (whether or not intentional) may be cause for immediate termination of such
lease or occupancy agreement.
2.7.1 No Discrimination. Owner covenants, by and for itself and any successors in
interest, that there shall be no discrimination against or segregation of any person or group of
persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government
Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Owner, itself or any
person claiming under or through it, establish or permit any such practice or practices of
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discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, subleases or vendees in the Site.
2.7.2 Required Clauses. All deeds, subleases or contracts made relative to the Site, the
improvements thereon or any part thereof, shall contain or be subject to substantially the following
nondiscrimination and nonsegregation clauses:
"(1) Grantee herein covenants by and for itself, its successors and assigns, and
all persons claiming under or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in subdivision (a)
and (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the property herein conveyed, nor shall the grantee or any person claiming under or
through the grantee, establish or permit any practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the
land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph
(1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of
the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed
to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing
for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(1)."
(a) In leases: “The lessee herein covenants, by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions:
(b) That there shall be no discrimination against or segregation of any
person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955
of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m)
and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government
Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land
herein leased, nor shall the lessee, himself or herself or any person claiming under or through him
or her, 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, subleases,
subtenants or vendees in the land herein leased.
(c) Notwithstanding paragraph (a), with respect to familial status,
paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section
12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall
be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating
to housing for senior citizens. Subdivisions (d) of Section 51 and Section 1360 of the Civil Code
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and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(a).”
(3) In contracts: “There shall be no discrimination against or segregation of
any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the
transferee, himself or herself or any person claiming under or through him or her, 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, subleases, subtenants or vendees
in the land.
2.7.3 The Owner shall refrain from restricting the rental or lease of Affordable Units on
the basis of race, color, religion, sex, marital status, disability, ancestry or national origin of any
person.
2.7.4 The Owner shall refrain from restricting the rental or lease of Affordable Units on
the basis of race, color, religion, sex, marital status, disability, ancestry or national origin of any
person.
2.7.5 The Authority is the beneficiary of the terms and provisions of the covenants herein,
both for and in its own right and for the purposes of protecting the interests of the community and
other parties, public or private, for whose benefit these covenants running with the land have been
provided.
2.8 Security Deposits. The Owner may require security deposits on Affordable Units in
amounts which are consistent with applicable law.
2.9 Additional Information; Books and Records. The Owner shall provide any additional
information concerning the Affordable Units reasonably requested by the Authority. The Owner
will maintain complete and accurate records pertaining to the Affordable Units throughout the
Covenant Period and for a four (4) year period thereafter. The Authority shall have the right upon
written notice of no less than two (2) business days to the Owner, at any time during normal
business hours of 9:00 am to 5:00 pm, to examine of all books, records or other documents
maintained by the Owner or by any of the Owner’s agents which pertain to any Affordable Unit,
including all executed leases or occupancy agreements and all Income Certifications, and obtain
copies of any requested executed leases, occupancy agreements and Income Certifications within
ten (10) business days following such examination and the Authority’s written request.
2.10 Specific Performance. The Owner hereby agrees that specific enforcement of the Owner’s
agreement to comply with the allowable rent and occupancy restrictions and covenants contained
herein is one of the reasons and consideration for the Authority having entered into the DDLA,
and that, in the event of the Owner’s breach of such requirements, potential monetary damages to
the Authority and City, as well as to existing and prospective Extremely Low, 59% AMI Low or
80% AMI Low Income Households, would be difficult, if not impossible, to evaluate and quantify.
Therefore, in addition to any other relief to which the Authority or City may be entitled as a
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consequence of the breach hereof, the Owner agrees to the imposition of the remedy of specific
performance against it in the case of any event of default by the Owner in complying with any
provision of this Agreement beyond any applicable notice and cure period.
2.11 Audit. The Authority shall have the right to perform an audit of the Apartment Community
to determine compliance with the provisions of this Agreement. Such audit shall not be undertaken
more often than once each calendar year. All costs and expenses associated with the audit shall
be paid by the Owner.
2.12 Management. The management agent of the Owner and any other contractor of Owner
who provides services to occupants of the Apartment Community shall be subject to the reasonable
written approval of the Authority. The Owner and/or the management agent (if not the Owner)
shall operate the Apartment Community in a manner that will provide decent, safe and sanitary
residential facilities to the occupants thereof, and will comply with provisions of this Agreement.
Upon the written request of the Authority, the Owner shall cooperate with the Authority in the
periodic review (but not more than once each calendar year) of the management practices and
financial status of the Affordable Units. The purpose of each periodic review will be to enable the
Authority to determine if the Affordable Units are being operated and managed in accordance with
the requirements and standards of this Agreement. Results of such Authority review shall be
provided to the City and to the Owner, and the Authority shall have the right to require the Owner
to make modifications that are reasonably necessary to ensure the objectives of this Agreement are
met.
2.13 Binding for Term. t is intended by the Parties that except as otherwise expressly provided
herein, the provisions of this Agreement shall apply to the Apartment Community throughout the
entire term hereof, as established in Section 3.1 below.
ARTICLE 3. TERM AND RECORDATION.
3.1 Term of Agreement. This Agreement shall remain in full force and effect for the Required
Covenant Period, unless the Owner and the Authority agree, in writing, to terminate this
Agreement prior to the expiration of the Required Covenant Period. Unless terminated earlier
pursuant to the prior sentence of this Section 3.1, or Section 3.3 below, the Parties intend that the
provisions and effect of this Agreement and specifically of Article 2 hereof, shall remain in full
force and effect for the entire Required Covenant Period.
3.2 Agreement to Record. The Owner represents, warrants, and covenants that this Agreement
will be recorded in the real property records of Riverside County.
3.2 Early Termination of Restrictions. Notwithstanding the generality of the foregoing
provisions of this Article 3 or any other provisions hereof, this Agreement and all of the terms and
restrictions contained herein shall be suspended during involuntary noncompliance as a result of
unforeseen events such as fire or act of God which leaves the entire Apartment Community
uninhabitable (and the proceeds of insurance available to the Owner as a result thereof are
insufficient to reconstruct the Apartment Community), or a change in a federal or state law or an
action by the federal government, the State or a court of competent jurisdiction, after the date of
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recordation hereof, that prevents the Authority from enforcing the provisions of this Agreement,
or a condemnation or a similar event.
ARTICLE 4. DEFAULT; REMEDIES.
4.1 An Event of Default. Each of the following shall constitute an “Event of Default” by the
Owner under this Agreement:
4.1.1 Failure by the Owner to duly perform, comply with and observe any of the
conditions, terms, or covenants of any agreement with the Authority or the City concerning the
Apartment Community, or of this Agreement, if such failure remains uncured thirty (30) days after
written notice of such failure from the Authority to the Owner in the manner provided herein or,
with respect to a default that cannot be cured within thirty (30) days, if the Owner fails to
commence such cure within such thirty (30) day period or thereafter fails to diligently and
continuously proceed with such cure to completion. However, if a different period or notice
requirement is specified under any other section of this Agreement, then the specific provision
shall control.
4.1.2 Any representation or warranty contained in this Agreement or in any application,
financial statement, certificate, or report submitted by the Owner to the Authority or the City
proves to have been incorrect in any material respect when made..
4.1.3 A court having jurisdiction shall have made or rendered a decree or order: (i)
adjudging the Owner to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking
reorganization of the Owner or seeking any arrangement on behalf of the Owner under the
bankruptcy laws or any other applicable debtor’s relief law or statute of the United States or of any
state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of the Owner
in bankruptcy or insolvency or for any of its properties; or (iv) directing the winding up or
liquidation of the Owner, providing, however, that any such decree or order described in any of
the foregoing subsections shall have continued unstayed or undischarged for a period of ninety
(90) days.
4.1.4 The Owner shall have assigned its assets for the benefit of its creditors or suffered
a sequestration or attachment or execution on any substantial part of its property, unless the
property so assigned, sequestered, attached, or executed upon shall have been returned or released
within ninety (90) days after such event (unless a lesser time period is permitted for cure hereunder)
or prior to sale pursuant to such sequestration, attachment, or execution. If the Owner is diligently
working to obtain a return or release of the property and the City’s and the Authority’s interests
hereunder are not imminently threatened in its reasonable business judgment, then the City shall
not declare a default under this subsection.
4.1.5 The Owner shall have voluntarily suspended its business or dissolved.
4.1.6 The seizure or appropriation of all or, in the reasonable opinion of the Authority, a
substantial part of the Apartment Community, except for condemnation initiated by the City, the
Authority or any other governmental agency or authority.
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4.1.7 The seizure or appropriation of all or, in the reasonable opinion of the Authority, a
substantial part of the Apartment Community, except for condemnation initiated by the City, the
Authority or any other governmental agency or authority.
4.1.8 There should occur any default declared by any lender under any loan document or
deed of trust relating to any loan made in connection with the Apartment Community, which loan
is secured by a deed of trust or other instrument affecting the Apartment Community, and such
default remains uncured following the expiration of any applicable cure period.
4.2 Option to Lease. [INTENTIONALLY OMITTED}
4.3 Authority Remedies. The Authority and City shall each have the right to mandamus or
other suit, action or proceeding at law or in equity to require the Owner to perform its obligations
and covenants under this Agreement or to enjoin acts or things which may be unlawful or in
violation of the provisions hereof, provided that in any such case the Authority has first provided
the required notice of any alleged default and the Owner has had the requisite opportunity to cure
pursuant to Section 4.1.1, above.
4.4 Action at Law; No Remedy Exclusive. The Authority and/or the City may take whatever
action at law or in equity as may be necessary to enforce performance and observance of any
obligation, agreement or covenant of the Owner under this Agreement. No remedy herein
conferred upon or reserved by the Authority or City is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter existing at law, in
equity or by statute. No delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver of such right or power,
but any such right or power may be exercised from time to time and as often as the Authority may
deem expedient. In order to entitle the Authority or City to exercise any remedy reserved to it in
this Agreement, it shall not be necessary to give any notice, other than such notice as may be herein
otherwise expressly required or required by law to be given.
ARTICLE 5. GENERAL PROVISIONS.
5.1 Limitations on Recourse. Notwithstanding anything to the contrary contained in this
Agreement, except in the event of fraud, waste, or illegal acts, or with regard to any indemnity
obligations imposed upon the Owner under the terms of this Agreement, (i) no partner, member,
officer or director, as applicable, of the Owner (each, an “Owner Affiliate”) shall have any direct,
indirect or derivative personal liability for the obligations of the Owner under this Agreement, and
(ii) the Authority and the City shall not exercise any rights or institute any action against any
Owner Affiliate directly, indirectly or derivatively for the payment of any sum of money that is or
may become payable hereunder.
5.2 Maintenance, Repair, Alterations. The Owner shall maintain and preserve the Apartment
Community in good condition and repair and in a prudent and businesslike manner. The Owner
shall comply with all laws, ordinances, rules, regulations, covenants, conditions, restrictions, and
orders of any governmental authority now or hereafter affecting the conduct or operation of the
Apartment Community or any part thereof or requiring any alteration or improvement to be made
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thereon. The Owner shall not commit, suffer, or permit any act to be done in, upon, or to the
Apartment Community or any part thereof in violation of any such laws, ordinances, rules,
regulations, or orders. The Owner hereby agrees that the Authority may conduct from time to time
through representatives, upon reasonable notice of no less than twenty-four (24) hours, on-site
inspections and observation of: (i) the maintenance and repair of the Apartment Community,
including a review of all maintenance and repair programs and practices and all reports and records
pertaining thereto, including records of expenditures relating thereto; and (ii) such other facilities,
practices, and records of the Owner relating to the Affordable Units as the Authority reasonably
deems to be necessary or appropriate in order to monitor the Owner’s compliance with the
provisions of this Agreement.
5.3 Notices. All notices (other than telephone notices), certificates or other communications
(other than telephone communications) required or permitted hereunder shall be sufficiently given
and should be deemed given when mailed by certified mail, postage prepaid, or twenty-four (24)
hours following delivery of such notice to Federal Express or similar commercial carrier for
overnight or next business day delivery, addressed as follows:
If to the Authority or City:
Palm Desert Housing Authority
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: Housing Division
If to the Owner:
_____________________________
100 Pacifica, Suite 203
Irvine, CA 92618
Attn: President
5.4 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or
understood by any of the Parties, or by any third persons, as creating the relationship of employer
and employee, principal and agent, limited or general partnership, or joint venture between the
City and the Owner or the Owner’s agents, employees or contractors, or the Authority and the
Owner or the Owner’s agents, employees or contractors, and the Owner shall at all times be
deemed an independent contractor and shall be wholly responsible for the manner in which it or
its agents, or both, perform the services required of it by the terms of this Agreement for the
operation of the Apartment Community. The Owner has and hereby retains the right to exercise
full control of employment, direction, compensation and discharge of all persons assisting in the
performance of services hereunder. In regards to the on-site operation of the Apartment
Community, the Owner shall be solely responsible for all matters relating to payment of its
employees, including compliance with Social Security, withholding and all other laws and
regulations governing such matters. The Owner agrees to be solely responsible for its own acts
and those of its agents and employees.
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5.5 No Claims. Nothing contained in this Agreement shall create or justify any claim against
the City or the Authority by any person the Owner may have employed or with whom the Owner
may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing
or the performance of any work or services with respect to the operation of the Affordable Units.
5.6 Conflict of Interests. No member, official or employee of the Authority or City shall make
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.
No officer or employee of the Owner shall acquire any interest in conflict with or inimical to the
interests of the City or the Authority.
5.7 Non-Liability of City Officials, Employees and Agents. No member, official, employee or
agent of the City or the Authority shall be personally liable to the Owner, or any successor in
interest, in the event of any default or breach by the City or the Authority or for any amount which
may become due to the Owner or successor in connection with this Agreement or on any obligation
of the City or the Authority under the terms of this Agreement.
5.8 Unavoidable Delay; Extension of Time of Performance. In addition to specific provisions
of this Agreement, and except for performance under the DDLA (which is governed by the terms
of the DDLA), performance of a construction obligation by any Party hereunder shall not be
deemed to be in default where it is due to an “Unavoidable Delay.” “Unavoidable Delay” means
a delay due to the elements (including unseasonable weather), fire, earthquakes or other acts of
God, strikes, pandemics, labor disputes, lockouts, shortages of construction materials experienced
generally in the construction industry in the local area, acts of the public enemy, riots, insurrections
or governmental regulation of the sale or transportation of materials, supply or labor; provided,
however, that to the extent a delay is caused by any other reason that the Owner reasonably believes
is beyond its control, the Owner may request, on a case-by-case basis, that the City and/or
Authority excuse any such delay as an Unavoidable Delay and the City and Authority shall make
their determinations as to whether such delay constitutes an Unavoidable Delay using their
reasonable judgment.
5.9 Indemnity. The Owner shall indemnify, defend and hold harmless the Authority and the
City and all officials, employees and agents of the Authority and/or the City (with counsel
reasonably satisfactory to the Authority) against any costs, liabilities, damages or judgments
arising from claims or litigation of any nature whatsoever brought by third parties and directly or
indirectly arising from the Owner’s ownership or operation of the Apartment Community, or the
Owner’s performance of its obligations under this Agreement, and in the event of settlement,
compromise or judgment hold the City and the Authority free and harmless therefrom. The
provisions of this Section 5.9 shall survive the term of this Agreement.
5.10 Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement,
the rights and remedies of the Parties are cumulative, and the exercise or failure to exercise one or
more of such rights or remedies by either Party shall not preclude the exercise by it, at the same
time or different times, of any right or remedy for the same default or any other default by the
other Party. No waiver of any default or breach by the Owner hereunder shall be implied from
any omission by the Authority or the City to take action on account of such default if such default
persists or is repeated, and no express waiver shall affect any default other than the default
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specified in the waiver, and such wavier shall be operative only for the time and to the extent
therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed
as a waiver of any subsequent breach of the same covenant, term or condition. The consent or
approval by the City or the Authority to or of any act by the Owner requiring further consent or
approval shall not be deemed to waive or render unnecessary the consent or approval to or of any
subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a
cure or a waiver of any default under this Agreement, nor shall it invalidate any act done pursuant
to notice of default, or prejudice the Authority in the exercise of any right, power, or remedy
hereunder or under any agreements ancillary or related hereto.
5.11 Applicable Law. This Agreement shall be interpreted under and pursuant to the laws of
the State of California.
5.12 Severability. If any term, provision, covenant or condition of this Agreement is held in a
final disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall continue in full force and effect unless the rights and obligations of the
Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.
5.13 Legal Actions. In the event any legal action is commenced to interpret or to enforce the
terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing
in any such action shall be entitled to recover against the Party not prevailing all reasonable
attorneys’ fees and costs incurred in such action (including all legal fees incurred in any appeal or
in any action to enforce any resulting judgment), as awarded by a court of competent jurisdiction.
5.14 Binding Upon Successors. This Agreement shall be binding upon and inure to the benefit
of the permitted heirs, administrators, executors, successors in interest and assigns of each of the
Parties. Any reference in this Agreement to a specifically named Party shall be deemed to apply
to any successor, heir, administrator, executor or assign of such Party who has acquired an interest
in compliance with the terms hereof or under law.
5.15 Time of the Essence. In all matters under this Agreement, time is of the essence.
5.16 Approvals by the Authority or City. Any approvals required under this Agreement to be
made by the Authority shall be made by the Executive Director of the Authority or his or her
designee, and any approvals by the City shall be made by the City Manager or his or her designee.
Any such approval or consent shall not be unreasonably withheld, conditioned, delayed or made,
except where it is specifically provided herein that another standard applies, in which case the
specified standard shall apply.
5.17 Complete Understanding of the Parties. The DDLA, this Agreement and the attached
Exhibits constitute the entire understanding and agreement of the Parties with respect to the matters
described herein.
5.18 Covenants to Run With the Land. The Owner hereby subjects the Apartment Community
to the covenants, reservations, and restrictions set forth in this Agreement. The Authority, the City
and the Owner hereby declare their express intent that the covenants, reservations, and restrictions
set forth herein shall be deemed covenants running with the land and shall pass to and be binding
upon the Owner’s successors in title to the Apartment Community; provided, however, that on the
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termination of this Agreement said covenants, reservations and restrictions shall expire. Each and
every contract, deed or other instrument hereafter executed covering or conveying the Apartment
Community or any portion thereof shall conclusively be held to have been executed, delivered and
accepted subject to such covenants, reservations and restrictions, regardless of whether such
covenants, reservations and restrictions are set forth in such contract, deed or other instruments.
No breach of any of the provisions of this Agreement shall defeat or render invalid the lien of a
mortgage or deed of trust made in good faith and for value encumbering the Property or any interest
of the Owner therein.
5.19 Burden and Benefit. The Authority, the City and the Owner hereby declare their
understanding and intent that: (i) the burden of the covenants, reservations, restrictions, and
agreements set forth herein touch and concern the Property and the Apartment Community, in that
Owner’s legal interest in the Apartment Community is rendered less valuable thereby, (ii) the
covenants, reservations, restrictions, and agreements set forth herein directly benefit the Property
and the Apartment Community (a) by enhancing and increasing the enjoyment and use of the
Apartment Community by certain Extremely Low, 59% AMI Low or 80% AMI Low Income
Households, the intended beneficiaries of such covenants, reservations, restrictions, and
agreements, (b) by making possible the obtaining of advantageous financing for the Property and
the Apartment Community, and (c) by furthering the public purposes advanced by the Authority
and the City, and (iii) the covenants, reservations, restrictions and agreements set forth herein shall
run with the Property and shall be binding for the benefit of and enforceable by the Authority and
the City and their successors and assigns for the entire term of this Agreement.
5.20 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which shall constitute one and the same instrument.
5.21 Amendments. This Agreement may be amended only by the written agreement of the
Authority, the City and the Owner.
WHEREFORE, the undersigned has executed this Agreement as of the date first-above
written.
OWNER:
_____________________________
AUTHORITY:
PALM DESERT HOUSING AUTHORITY, a
public body, corporate and politic
By: ________________________
Print Name: ___________________
Title: ________________________
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
EXHIBIT “A”
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Palm Desert, County of Riverside, State of California, described as
follows:
EXHIBIT “B”
HOUSEHOLD INCOME CERTIFICATION
(Attached)
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EXHIBIT “C”
CERTIFICATE OF CONTINUING COMPLIANCE
(Attached)
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Exhibit H-2 goes here
RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: _________________
SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY
This Document is recorded for the benefit of the City of Palm Desert and is exempt
from recording fees pursuant to Sections 6103, 27383 and 27388.1
of the California Government Code.
HOUSING AGREEMENT
(LMIHF Agreement; Phase I)
by and between
the PALM DESERT HOUSING AUTHORITY
and
__________________________
DATED AS OF _________ ____, 202__
HOUSING AGREEMENT
THIS HOUSING AGREEMENT (the “Agreement”) is dated as of ______________ ___,
202__, and is by and between the PALM DESERT HOUSING AUTHORITY, a public body,
corporate and politic (the “Authority”),and ____________________________ (the “Owner”).
Authority, City and Owner are sometimes referred to herein individually as a “Party” and
collectively as “Parties”.
RECITALS
This Agreement is predicated upon the following facts:
A. The Owner is the owner of the land described in “Exhibit A” attached hereto (the
“Property”).
B. The City, the Authority and Owner have entered into that certain Amended and
Restated Disposition, Development and Loan Agreement dated in April, 2024 (“DDLA”),
pursuant to which the City conveyed the Property to the Owner for the development described in
the DDLA (“Development” or “Apartment Community”) pursuant to which the Authority made a
loan to Owner for the purchase price of the Property (“City Loan”). Capitalized terms used but not
defined herein shall have the meaning set forth in the DDLA.
C. Pursuant to the DDLA, the Owner executed a Promissory Note in favor of
Authority and a deed of trust in favor of Authority securing such Promissory Note and the
Authority is obligated to make disbursements of loan proceeds subject to and in accordance with
the DDLA.
D. The Authority loan was made with moneys in the Low and Moderate Income
Housing Asset Fund established and held by the Authority as successor to the housing assets of
the former Palm Desert Redevelopment Agency, and California law and the DDLA require that
the Authority obtain recorded restrictions on the Property and Development thereon restricting the
apartment units on the Property to extremely low and low income households at an affordable rent.
E. Additionally, the Owner has applied for and obtained a density bonus from the City
for the Development which permits greater density and less parking than would otherwise be
required, and in exchange, the City also requires that the apartment units be so restricted, and that
such restrictions not be subordinate or subordinated to any deeds of trust or other consensual liens.
Such restrictions are contained in a separate Housing Agreement between the City and the Owner.
G. This Agreement is the restriction agreement described in Recital D above.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth
herein and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Authority, the City and the Owner hereby agree as follows:
ARTICLE 1. DEFINITIONS AND INTERPRETATION.
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1.1 Definitions.
Capitalized terms used herein shall have the following meanings unless the context in
which they are used clearly requires otherwise.
“Affordable Units” shall mean 119 of the 120 units in the Apartment Community
available to and occupied by, or held vacant for occupancy only by, Extremely Low Income
Households, 59% AMI Low Income Households and 80% AMI Low Income Households and
rented at an Affordable Rent. Specifically, the Affordable Units consist of 36 units for Extremely
Low Income Households, 60 units for 59% AMI Low Income Households and 23 units for 80%
AMI Low Income Households. The Affordable Units will include the number of bedrooms shown
on the following table:
Bedroom
Size
Extremely
Low
Income
Household
Affordable
Units
59% AMI
Low
Income
Household
Affordable
Units)
80% AMI
Low
Income
Household
Affordable
Units
One 6 9 0
Two 27 48 0
Three 3 4 23
Total 36 61 23
“Affordable Rent” shall mean rent for an Affordable Unit, including a Reasonable Utility
Allowance, determined pursuant to California Health and Safety Code Section 50053(b) and the
state regulations adopted by the California Department of Housing and Community Development
(“HCD”) pursuant thereto, as amended from time to time, based upon the AMI adjusted for a
Household Size Appropriate to the Affordable Unit. More specifically, (1) for each of the 36
Affordable Units reserved for Extremely Low Income Households, the maximum monthly
Affordable Rent, including a Reasonable Utility Allowance, may not exceed thirty percent (30%)
of thirty percent (30%) of the AMI, adjusted for a Household Size Appropriate to the Affordable
Unit, divided by twelve, (2) for each of the 60 Affordable Units reserved for 59% AMI Low
Income Households, the maximum monthly Affordable Rent, including a Reasonable Utility
Allowance, may not exceed thirty percent (30%) of fifty-nine percent (59%) of the AMI, adjusted
for a Household Size Appropriate to the Affordable Unit, divided by twelve, and (3) for each of
the 23 Affordable Units reserved for 80% AMI Low Income Households , the maximum monthly
Affordable Rent, including a Reasonable Utility Allowance, may not exceed thirty percent (30%)
of fifty-nine percent (59%) of the AMI, adjusted for a Household Size Appropriate to the
Affordable Unit, divided by twelve.
“AMI” shall mean the area median income for Riverside County as published by the
California Department of Housing and Community Development pursuant to Health and Safety
Code Section 50052.5, or successor statute, as adjusted for family size in accordance with the state
regulations adopted pursuant to California Health and Safety Code Section 50052.5.
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“Extremely Low Income Household” shall mean persons and families whose income
does not exceed the qualifying limits for extremely low income households set forth in California
Health and Safety Code Section 50106 and Title 25 of the California Code of Regulations, as such
statute and regulations may be amended from time to time.
“Household Size Appropriate to the Affordable Unit” in the absence of pertinent federal
statutes or regulations applicable to the Apartment Community, shall have the meaning set forth
in California Health and Safety Code Section 50052.5(h), as amended from time to time.
“59% AMI Low Income Household” shall mean persons and families whose income does
not exceed the 59% of the AMI as set forth in California Health and Safety Code Section 50079.5
and Title 25 of the California Code of Regulations, including Section 6912, as such statute and
regulations may be amended from time to time.
“80% AMI Low Income Household” shall mean persons and families whose income does
not exceed the qualifying limits for lower income households set forth in California Health and
Safety Code Section 50079.5 and Title 25 of the California Code of Regulations, including Section
6912, as such statute and regulations may be amended from time to time.
“Reasonable Utility Allowance” shall mean a utility allowance for utilities paid by a
tenant (not including telephone, internet or cable service) utilizing the utility allowance schedule
published annually by the Housing Authority of the County of Riverside.
“Required Covenant Period” shall mean the period commencing on the date all units in
the Apartment Community have been completed as evidenced by the City’s issuance of a final
Certificate of Occupancy for the Apartment Community, and ending as of the fifty-fifth (55th)
anniversary thereof.
1.2 Rules of Construction.
1.2.1 The singular form of any word used herein, including the terms defined herein shall
include the plural and vice versa. The use herein of a word of any gender shall include correlative
words of all genders.
1.2.2 Unless otherwise specified, references to articles, sections, and other subdivisions
of this Agreement are to the designated articles, sections, and other subdivisions of this Agreement
as originally executed. The words “hereof,” “herein,” “hereunder,” and words of similar import
shall refer to this Agreement as a whole.
1.2.3 All of the terms and provisions hereof shall be construed to effectuate the purposes
set forth in this Agreement and to sustain the validity hereof.
1.2.4 Headings or titles of the several articles and sections hereof and the table of contents
appended to copies hereof shall be solely for convenience of reference and shall not affect the
meaning, construction, or effect of the provisions hereof.
ARTICLE 2. ONGOING APARTMENT COMMUNITY OBLIGATIONS.
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2.1 Apartment Community and Affordable Units.
The Owner shall develop and construct the Apartment Community within a portion of the
Project on the Property in conformity with the DDLA. Thereafter, during the Required Covenant
Period, the Owner agrees that not less than 239 units in the Apartment Community shall be
Affordable Units, meaning that (a) 36 of such units shall be continually available to and occupied
by, or held vacant for occupancy only by, Extremely Low Income Households, (b) 61 of such units
shall be continually available to and occupied by, or held vacant for occupancy only by, 59% AMI
Low Income Households, and (c) 23 of such units shall be continually available to and occupied
by, or held vacant for occupancy only by, 80% AMI Low Income Households. All of the rental
units in the Apartment Community shall be similarly constructed and generally constructed at the
same time. The Affordable Units shall be of comparable quality to those rental units in the
Apartment Community which are available to other tenants. The Owner agrees that, to the extent
commercially reasonable, Affordable Units will not be underutilized. No persons shall be
permitted to occupy any Affordable Unit in excess of applicable limit of maximum occupancy set
by the City’s Municipal Code and the laws of the State of California, or by Authority Resolution
HA-84 adopted on December 14, 2017 (and the occupancy policy attached as Exhibit A thereto)
and any amendments or replacements thereof.
2.2 Residential Rental Property.
The Owner covenants to operate the Apartment Community as residential rental property.
During the Required Covenant Period, the Affordable Units will be held and used for the purpose
of providing residential living, and the Owner shall own, manage and operate, or cause the
management and operation of, the Apartment Community to provide such affordable rental
housing. All of the rental units in the Apartment Community with the exception of one
(1)manager’s units, will be available for rental on a continuous basis to members of the general
public and the Owner will not give preference to any particular class or group in renting the units
in the Apartment Community, except as required under this Agreement. The Owner shall not
convert any Affordable Unit(s) to condominiums or cooperative ownership or sell condominium
or cooperative conversion rights to any Affordable Unit(s) during the term of this Agreement.
2.3 Extremely Low, 59% AMI Low and 80% AMI Low Income Households.
2.3.1 Income Qualification; Initial Certification. Subject to the applicable provisions
hereof, throughout the Required Covenant Period, Affordable Units will be exclusively occupied
by, or available for occupancy only by, Extremely Low, 59% AMI Low and 80% AMI Low
Income Households as described above. Prior to the rental or lease of an Affordable Unit and in
accordance with Section 2.6 hereof, the Owner will obtain and maintain on file a Household
Income Certification (“Income Certification”) substantially in the form attached hereto as Exhibit
“B” and incorporated herein by this reference for each Extremely Low, 59% AMI Low and 80%
AMI Low Income Households, as applicable, and shall provide copies of same to the Authority at
such times as the Authority may, from time to time, reasonably require. In addition, the Owner
will provide such further information as may reasonably be required in the future by the Authority.
The Income Certification shall be dated immediately prior to the applicable household’s initial
occupancy of an Affordable Unit. The Owner shall make a good faith effort to verify that the
income provided by an applicant in an Income Certification is accurate by taking any one or more
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of the following steps as part of the verification process for all household members over the age
of eighteen (18) as appropriate:
(i) Obtain two (2) pay stubs for the two (2) most recent pay periods;
(ii) Obtain a true copy of an income tax return for the most recent tax year in
which a return was filed;
(iii) Obtain an income verification form from the household member’s current
employer;
(iv) Obtain an income verification form from the Social Security Administration
and/or the State Department of Social Services, or its equivalent, if the household member receives
assistance from either of those agencies;
(v) If the household member is unemployed and has no tax return, obtain
another form of independent verification; or
(vi) Obtain such other documentation as may be reasonably acceptable pursuant
to Title 25 of the California Code of Regulations, as amended from time to time, to verify income.
2.3.2 Certificate of Continuing Program Compliance; Annual Report; Annual
Monitoring/Administration Fee. Throughout the Required Covenant Period, the Owner will
prepare and submit to the Authority, at such periodic frequency as the Authority might reasonably
require, but not more than once annually, a Certificate of Continuing Compliance in substantially
the form attached hereto as Exhibit “C” and incorporated herein by this reference, and executed
by the Owner. The Owner will also prepare and submit to the Authority on or before each
anniversary date of the commencement of the Required Covenant Period, and for the preceding
calendar year, a report in form and substance reasonably satisfactory to the Authority summarizing
the vacancy rate of the Apartment Community, including the number of Affordable Units held
vacant for occupancy by Extremely Low, 59% AMI Low and 80% AMI Low Income Households
for such calendar year. Owner shall pay an annual monitoring/administration fee in the amount of
Ten Thousand Dollars ($10,000.00), increasing by three percent (3%) annually, concurrently with
Developer’s annual payments of Residual Receipts to Authority under the Authority Loan.
2.4 Affordable Rent. Throughout the Required Covenant Period, an Affordable Rent shall be
charged to the Extremely Low, 59% AMI Low and 80% Low Income Household occupants of
Affordable Units, as more specifically described above.
2.5 Rent Increases. Rents for Affordable Units may be increased not more than once per year
and twelve (12) months must have elapsed since the date of the tenant’s initial occupancy or the
last rent increase. The rents charged following such an increase, or upon a vacancy and new
occupancy by an Extremely Low, 59% AMI Low or 80% AMI Low Income Household, as
applicable, shall not exceed an Affordable Rent. The Owner shall, consistent with applicable law,
give proper written notice to tenants of all rent increases, and upon written request, provide the
Authority with reasonable detail concerning the amount of and rationale for such rent increases.
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2.6 Income Recertification of Affordable Units. Annually, on the anniversary date of
occupancy of an Affordable Unit by an Extremely Low, 59% AMI Low or 80% AMI Low Income
Household, as applicable, the Owner shall obtain and maintain on file an annual income
certification, in form and substance reasonably satisfactory to the Authority, from each household
occupying an Affordable Unit, based upon the current income of each household member over the
age of eighteen (18). The Owner shall make a good faith effort to verify that the income provided
by the household is accurate in accordance with Section 2.3.1, above.
2.6.1 A rental unit occupied by a household that qualifies as an Extremely Low, 59%
AMI Low or 80% AMI Low Income Household, as applicable, at the time the household first
occupies an Affordable Unit shall be deemed to continue to be so occupied until a recertification
of such household’s income demonstrates that such household no longer qualifies as an Extremely
Low, 59% AMI Low or 80% AMI Low Income Household, as applicable. At such time as a
household ceases to qualify as an Extremely Low, 59% AMI Low or 80% AMI Low Income
Household, as applicable, based on income recertification, the Owner shall designate the next
available unit (one that is not occupied by a tenant) with the same number of bedrooms as the
occupied Affordable Unit and it shall be leased to an Extremely Low, 59% AMI Low or 80% AMI
Low Income Household, as applicable, so that the number of Affordable Units occupied by or
reserved for occupancy by Extremely Low, 59% AMI Low or 80% Low Income Households will
remain constant. For purposes of this Agreement, such designated unit will be considered an
Affordable Unit if it is held vacant and available solely for occupancy by an Extremely Low, 59%
AMI Low or 80% AMI Low Income Household, as applicable, and, upon occupancy, the income
eligibility of the household as an Extremely Low, 59% AMI Low or 80% AMI Low Income
Household is verified and the unit is rented at Affordable Rent.
2.7 Lease or Occupancy Agreement. Prior to the rental or lease of an Affordable Unit to an
Extremely Low, 59% AMI Low or 80% AMI Low Income Household, the Owner shall require
the tenant to execute a written lease or occupancy agreement. The Owner shall maintain on file
throughout the Required Covenant Period and for a four (4) year period thereafter, the executed
lease or occupancy agreement of each tenant occupying an Affordable Unit. The form of lease or
occupancy agreement used by the Owner for the lease or rental of Affordable Units shall be that
which is reasonable and customary in residential leasing. In addition, each lease or occupancy
agreement for an Affordable Unit shall (i) provide that the tenants of such Affordable Unit shall
be subject to annual recertification of income and subject to rental increases in accordance with
Sections 2.5 and 2.6 of this Agreement, and (ii) contain a provision to the effect that the Owner
has relied on the income certification and supporting information supplied by the tenant in
determining qualification for occupancy of the Affordable Unit, and that any material misstatement
in such certification (whether or not intentional) may be cause for immediate termination of such
lease or occupancy agreement.
2.7.1 No Discrimination. Owner covenants, by and for itself and any successors in
interest, that there shall be no discrimination against or segregation of any person or group of
persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government
Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Owner, itself or any
person claiming under or through it, establish or permit any such practice or practices of
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discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, subleases or vendees in the Site.
2.7.2 Required Clauses. All deeds, subleases or contracts made relative to the Site, the
improvements thereon or any part thereof, shall contain or be subject to substantially the following
nondiscrimination and nonsegregation clauses:
"(1) Grantee herein covenants by and for itself, its successors and assigns, and
all persons claiming under or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in subdivision (a)
and (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the property herein conveyed, nor shall the grantee or any person claiming under or
through the grantee, establish or permit any practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the
land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph
(1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of
the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed
to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing
for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(1)."
(a) In leases: “The lessee herein covenants, by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions:
(b) That there shall be no discrimination against or segregation of any
person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955
of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m)
and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government
Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land
herein leased, nor shall the lessee, himself or herself or any person claiming under or through him
or her, 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, subleases,
subtenants or vendees in the land herein leased.
(c) Notwithstanding paragraph (a), with respect to familial status,
paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section
12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall
be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating
to housing for senior citizens. Subdivisions (d) of Section 51 and Section 1360 of the Civil Code
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and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(a).”
(3) In contracts: “There shall be no discrimination against or segregation of
any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the
transferee, himself or herself or any person claiming under or through him or her, 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, subleases, subtenants or vendees
in the land.
2.7.3 The Owner shall refrain from restricting the rental or lease of Affordable Units on
the basis of race, color, religion, sex, marital status, disability, ancestry or national origin of any
person.
2.7.4 The Owner shall refrain from restricting the rental or lease of Affordable Units on
the basis of race, color, religion, sex, marital status, disability, ancestry or national origin of any
person.
2.7.5 The Authority is the beneficiary of the terms and provisions of the covenants herein,
both for and in its own right and for the purposes of protecting the interests of the community and
other parties, public or private, for whose benefit these covenants running with the land have been
provided.
2.8 Security Deposits. The Owner may require security deposits on Affordable Units in
amounts which are consistent with applicable law.
2.9 Additional Information; Books and Records. The Owner shall provide any additional
information concerning the Affordable Units reasonably requested by the Authority. The Owner
will maintain complete and accurate records pertaining to the Affordable Units throughout the
Covenant Period and for a four (4) year period thereafter. The Authority shall have the right upon
written notice of no less than two (2) business days to the Owner, at any time during normal
business hours of 9:00 am to 5:00 pm, to examine of all books, records or other documents
maintained by the Owner or by any of the Owner’s agents which pertain to any Affordable Unit,
including all executed leases or occupancy agreements and all Income Certifications, and obtain
copies of any requested executed leases, occupancy agreements and Income Certifications within
ten (10) business days following such examination and the Authority’s written request.
2.10 Specific Performance. The Owner hereby agrees that specific enforcement of the Owner’s
agreement to comply with the allowable rent and occupancy restrictions and covenants contained
herein is one of the reasons and consideration for the Authority having entered into the DDLA,
and that, in the event of the Owner’s breach of such requirements, potential monetary damages to
the Authority and City, as well as to existing and prospective Extremely Low, 59% AMI Low or
80% AMI Low Income Households, would be difficult, if not impossible, to evaluate and quantify.
Therefore, in addition to any other relief to which the Authority or City may be entitled as a
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consequence of the breach hereof, the Owner agrees to the imposition of the remedy of specific
performance against it in the case of any event of default by the Owner in complying with any
provision of this Agreement beyond any applicable notice and cure period.
2.11 Audit. The Authority shall have the right to perform an audit of the Apartment Community
to determine compliance with the provisions of this Agreement. Such audit shall not be undertaken
more often than once each calendar year. All costs and expenses associated with the audit shall
be paid by the Owner.
2.12 Management. The management agent of the Owner and any other contractor of Owner
who provides services to occupants of the Apartment Community shall be subject to the reasonable
written approval of the Authority. The Owner and/or the management agent (if not the Owner)
shall operate the Apartment Community in a manner that will provide decent, safe and sanitary
residential facilities to the occupants thereof, and will comply with provisions of this Agreement.
Upon the written request of the Authority, the Owner shall cooperate with the Authority in the
periodic review (but not more than once each calendar year) of the management practices and
financial status of the Affordable Units. The purpose of each periodic review will be to enable the
Authority to determine if the Affordable Units are being operated and managed in accordance with
the requirements and standards of this Agreement. Results of such Authority review shall be
provided to the City and to the Owner, and the Authority shall have the right to require the Owner
to make modifications that are reasonably necessary to ensure the objectives of this Agreement are
met.
2.13 Binding for Term. t is intended by the Parties that except as otherwise expressly provided
herein, the provisions of this Agreement shall apply to the Apartment Community throughout the
entire term hereof, as established in Section 3.1 below.
ARTICLE 3. TERM AND RECORDATION.
3.1 Term of Agreement. This Agreement shall remain in full force and effect for the Required
Covenant Period, unless the Owner and the Authority agree, in writing, to terminate this
Agreement prior to the expiration of the Required Covenant Period. Unless terminated earlier
pursuant to the prior sentence of this Section 3.1, or Section 3.3 below, the Parties intend that the
provisions and effect of this Agreement and specifically of Article 2 hereof, shall remain in full
force and effect for the entire Required Covenant Period.
3.2 Agreement to Record. The Owner represents, warrants, and covenants that this Agreement
will be recorded in the real property records of Riverside County.
3.2 Early Termination of Restrictions. Notwithstanding the generality of the foregoing
provisions of this Article 3 or any other provisions hereof, this Agreement and all of the terms and
restrictions contained herein shall be suspended during involuntary noncompliance as a result of
unforeseen events such as fire or act of God which leaves the entire Apartment Community
uninhabitable (and the proceeds of insurance available to the Owner as a result thereof are
insufficient to reconstruct the Apartment Community), or a change in a federal or state law or an
action by the federal government, the State or a court of competent jurisdiction, after the date of
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recordation hereof, that prevents the Authority from enforcing the provisions of this Agreement,
or a condemnation or a similar event.
ARTICLE 4. DEFAULT; REMEDIES.
4.1 An Event of Default. Each of the following shall constitute an “Event of Default” by the
Owner under this Agreement:
4.1.1 Failure by the Owner to duly perform, comply with and observe any of the
conditions, terms, or covenants of any agreement with the Authority or the City concerning the
Apartment Community, or of this Agreement, if such failure remains uncured thirty (30) days after
written notice of such failure from the Authority to the Owner in the manner provided herein or,
with respect to a default that cannot be cured within thirty (30) days, if the Owner fails to
commence such cure within such thirty (30) day period or thereafter fails to diligently and
continuously proceed with such cure to completion. However, if a different period or notice
requirement is specified under any other section of this Agreement, then the specific provision
shall control.
4.1.2 Any representation or warranty contained in this Agreement or in any application,
financial statement, certificate, or report submitted by the Owner to the Authority or the City
proves to have been incorrect in any material respect when made..
4.1.3 A court having jurisdiction shall have made or rendered a decree or order: (i)
adjudging the Owner to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking
reorganization of the Owner or seeking any arrangement on behalf of the Owner under the
bankruptcy laws or any other applicable debtor’s relief law or statute of the United States or of any
state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of the Owner
in bankruptcy or insolvency or for any of its properties; or (iv) directing the winding up or
liquidation of the Owner, providing, however, that any such decree or order described in any of
the foregoing subsections shall have continued unstayed or undischarged for a period of ninety
(90) days.
4.1.4 The Owner shall have assigned its assets for the benefit of its creditors or suffered
a sequestration or attachment or execution on any substantial part of its property, unless the
property so assigned, sequestered, attached, or executed upon shall have been returned or released
within ninety (90) days after such event (unless a lesser time period is permitted for cure hereunder)
or prior to sale pursuant to such sequestration, attachment, or execution. If the Owner is diligently
working to obtain a return or release of the property and the City’s and the Authority’s interests
hereunder are not imminently threatened in its reasonable business judgment, then the City shall
not declare a default under this subsection.
4.1.5 The Owner shall have voluntarily suspended its business or dissolved.
4.1.6 The seizure or appropriation of all or, in the reasonable opinion of the Authority, a
substantial part of the Apartment Community, except for condemnation initiated by the City, the
Authority or any other governmental agency or authority.
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The seizure or appropriation of all or, in the reasonable opinion of the Authority, a
substantial part of the Apartment Community, except for condemnation initiated by the City, the
Authority or any other governmental agency or authority.
4.1.7 There should occur any default declared by any lender under any loan document or
deed of trust relating to any loan made in connection with the Apartment Community, which loan
is secured by a deed of trust or other instrument affecting the Apartment Community, and such
default remains uncured following the expiration of any applicable cure period.
4.2 Option to Lease. [INTENTIONALLY OMITTED}
4.3 Authority Remedies. The Authority and City shall each have the right to mandamus or
other suit, action or proceeding at law or in equity to require the Owner to perform its obligations
and covenants under this Agreement or to enjoin acts or things which may be unlawful or in
violation of the provisions hereof, provided that in any such case the Authority has first provided
the required notice of any alleged default and the Owner has had the requisite opportunity to cure
pursuant to Section 4.1.1, above.
4.4 Action at Law; No Remedy Exclusive. The Authority and/or the City may take whatever
action at law or in equity as may be necessary to enforce performance and observance of any
obligation, agreement or covenant of the Owner under this Agreement. No remedy herein
conferred upon or reserved by the Authority or City is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter existing at law, in
equity or by statute. No delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver of such right or power,
but any such right or power may be exercised from time to time and as often as the Authority may
deem expedient. In order to entitle the Authority or City to exercise any remedy reserved to it in
this Agreement, it shall not be necessary to give any notice, other than such notice as may be herein
otherwise expressly required or required by law to be given.
ARTICLE 5. GENERAL PROVISIONS.
5.1 Limitations on Recourse. Notwithstanding anything to the contrary contained in this
Agreement, except in the event of fraud, waste, or illegal acts, or with regard to any indemnity
obligations imposed upon the Owner under the terms of this Agreement, (i) no partner, member,
officer or director, as applicable, of the Owner (each, an “Owner Affiliate”) shall have any direct,
indirect or derivative personal liability for the obligations of the Owner under this Agreement, and
(ii) the Authority and the City shall not exercise any rights or institute any action against any
Owner Affiliate directly, indirectly or derivatively for the payment of any sum of money that is or
may become payable hereunder.
5.2 Maintenance, Repair, Alterations. The Owner shall maintain and preserve the Apartment
Community in good condition and repair and in a prudent and businesslike manner. The Owner
shall comply with all laws, ordinances, rules, regulations, covenants, conditions, restrictions, and
orders of any governmental authority now or hereafter affecting the conduct or operation of the
Apartment Community or any part thereof or requiring any alteration or improvement to be made
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thereon. The Owner shall not commit, suffer, or permit any act to be done in, upon, or to the
Apartment Community or any part thereof in violation of any such laws, ordinances, rules,
regulations, or orders. The Owner hereby agrees that the Authority may conduct from time to time
through representatives, upon reasonable notice of no less than twenty-four (24) hours, on-site
inspections and observation of: (i) the maintenance and repair of the Apartment Community,
including a review of all maintenance and repair programs and practices and all reports and records
pertaining thereto, including records of expenditures relating thereto; and (ii) such other facilities,
practices, and records of the Owner relating to the Affordable Units as the Authority reasonably
deems to be necessary or appropriate in order to monitor the Owner’s compliance with the
provisions of this Agreement.
5.3 Notices. All notices (other than telephone notices), certificates or other communications
(other than telephone communications) required or permitted hereunder shall be sufficiently given
and should be deemed given when mailed by certified mail, postage prepaid, or twenty-four (24)
hours following delivery of such notice to Federal Express or similar commercial carrier for
overnight or next business day delivery, addressed as follows:
If to the Authority or City:
Palm Desert Housing Authority
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: Housing Division
If to the Owner:
__________________________
100 Pacifica, Suite 203
Irvine, CA 92618
Attn: President
5.4 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or
understood by any of the Parties, or by any third persons, as creating the relationship of employer
and employee, principal and agent, limited or general partnership, or joint venture between the
City and the Owner or the Owner’s agents, employees or contractors, or the Authority and the
Owner or the Owner’s agents, employees or contractors, and the Owner shall at all times be
deemed an independent contractor and shall be wholly responsible for the manner in which it or
its agents, or both, perform the services required of it by the terms of this Agreement for the
operation of the Apartment Community. The Owner has and hereby retains the right to exercise
full control of employment, direction, compensation and discharge of all persons assisting in the
performance of services hereunder. In regards to the on-site operation of the Apartment
Community, the Owner shall be solely responsible for all matters relating to payment of its
employees, including compliance with Social Security, withholding and all other laws and
regulations governing such matters. The Owner agrees to be solely responsible for its own acts
and those of its agents and employees.
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5.5 No Claims. Nothing contained in this Agreement shall create or justify any claim against
the City or the Authority by any person the Owner may have employed or with whom the Owner
may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing
or the performance of any work or services with respect to the operation of the Affordable Units.
5.6 Conflict of Interests. No member, official or employee of the Authority or City shall make
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.
No officer or employee of the Owner shall acquire any interest in conflict with or inimical to the
interests of the City or the Authority.
5.7 Non-Liability of City Officials, Employees and Agents. No member, official, employee or
agent of the City or the Authority shall be personally liable to the Owner, or any successor in
interest, in the event of any default or breach by the City or the Authority or for any amount which
may become due to the Owner or successor in connection with this Agreement or on any obligation
of the City or the Authority under the terms of this Agreement.
5.8 Unavoidable Delay; Extension of Time of Performance. In addition to specific provisions
of this Agreement, and except for performance under the DDLA (which is governed by the terms
of the DDLA), performance of a construction obligation by any Party hereunder shall not be
deemed to be in default where it is due to an “Unavoidable Delay.” “Unavoidable Delay” means
a delay due to the elements (including unseasonable weather), fire, earthquakes or other acts of
God, strikes, pandemics, labor disputes, lockouts, shortages of construction materials experienced
generally in the construction industry in the local area, acts of the public enemy, riots, insurrections
or governmental regulation of the sale or transportation of materials, supply or labor; provided,
however, that to the extent a delay is caused by any other reason that the Owner reasonably believes
is beyond its control, the Owner may request, on a case-by-case basis, that the City and/or
Authority excuse any such delay as an Unavoidable Delay and the City and Authority shall make
their determinations as to whether such delay constitutes an Unavoidable Delay using their
reasonable judgment.
5.9 Indemnity. The Owner shall indemnify, defend and hold harmless the Authority and the
City and all officials, employees and agents of the Authority and/or the City (with counsel
reasonably satisfactory to the Authority) against any costs, liabilities, damages or judgments
arising from claims or litigation of any nature whatsoever brought by third parties and directly or
indirectly arising from the Owner’s ownership or operation of the Apartment Community, or the
Owner’s performance of its obligations under this Agreement, and in the event of settlement,
compromise or judgment hold the City and the Authority free and harmless therefrom. The
provisions of this Section 5.9 shall survive the term of this Agreement.
5.10 Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement,
the rights and remedies of the Parties are cumulative, and the exercise or failure to exercise one or
more of such rights or remedies by either Party shall not preclude the exercise by it, at the same
time or different times, of any right or remedy for the same default or any other default by the
other Party. No waiver of any default or breach by the Owner hereunder shall be implied from
any omission by the Authority or the City to take action on account of such default if such default
persists or is repeated, and no express waiver shall affect any default other than the default
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specified in the waiver, and such wavier shall be operative only for the time and to the extent
therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed
as a waiver of any subsequent breach of the same covenant, term or condition. The consent or
approval by the City or the Authority to or of any act by the Owner requiring further consent or
approval shall not be deemed to waive or render unnecessary the consent or approval to or of any
subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a
cure or a waiver of any default under this Agreement, nor shall it invalidate any act done pursuant
to notice of default, or prejudice the Authority in the exercise of any right, power, or remedy
hereunder or under any agreements ancillary or related hereto.
5.11 Applicable Law. This Agreement shall be interpreted under and pursuant to the laws of
the State of California.
5.12 Severability. If any term, provision, covenant or condition of this Agreement is held in a
final disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall continue in full force and effect unless the rights and obligations of the
Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.
5.13 Legal Actions. In the event any legal action is commenced to interpret or to enforce the
terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing
in any such action shall be entitled to recover against the Party not prevailing all reasonable
attorneys’ fees and costs incurred in such action (including all legal fees incurred in any appeal or
in any action to enforce any resulting judgment), as awarded by a court of competent jurisdiction.
5.14 Binding Upon Successors. This Agreement shall be binding upon and inure to the benefit
of the permitted heirs, administrators, executors, successors in interest and assigns of each of the
Parties. Any reference in this Agreement to a specifically named Party shall be deemed to apply
to any successor, heir, administrator, executor or assign of such Party who has acquired an interest
in compliance with the terms hereof or under law.
5.15 Time of the Essence. In all matters under this Agreement, time is of the essence.
5.16 Approvals by the Authority or City. Any approvals required under this Agreement to be
made by the Authority shall be made by the Executive Director of the Authority or his or her
designee, and any approvals by the City shall be made by the City Manager or his or her designee.
Any such approval or consent shall not be unreasonably withheld, conditioned, delayed or made,
except where it is specifically provided herein that another standard applies, in which case the
specified standard shall apply.
5.17 Complete Understanding of the Parties. The DDLA, this Agreement and the attached
Exhibits constitute the entire understanding and agreement of the Parties with respect to the matters
described herein.
5.18 Covenants to Run With the Land. The Owner hereby subjects the Apartment Community
to the covenants, reservations, and restrictions set forth in this Agreement. The Authority, the City
and the Owner hereby declare their express intent that the covenants, reservations, and restrictions
set forth herein shall be deemed covenants running with the land and shall pass to and be binding
upon the Owner’s successors in title to the Apartment Community; provided, however, that on the
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termination of this Agreement said covenants, reservations and restrictions shall expire. Each and
every contract, deed or other instrument hereafter executed covering or conveying the Apartment
Community or any portion thereof shall conclusively be held to have been executed, delivered and
accepted subject to such covenants, reservations and restrictions, regardless of whether such
covenants, reservations and restrictions are set forth in such contract, deed or other instruments.
No breach of any of the provisions of this Agreement shall defeat or render invalid the lien of a
mortgage or deed of trust made in good faith and for value encumbering the Property or any interest
of the Owner therein.
5.19 Burden and Benefit. The Authority, the City and the Owner hereby declare their
understanding and intent that: (i) the burden of the covenants, reservations, restrictions, and
agreements set forth herein touch and concern the Property and the Apartment Community, in that
Owner’s legal interest in the Apartment Community is rendered less valuable thereby, (ii) the
covenants, reservations, restrictions, and agreements set forth herein directly benefit the Property
and the Apartment Community (a) by enhancing and increasing the enjoyment and use of the
Apartment Community by certain Extremely Low, 59% AMI Low or 80% AMI Low Income
Households, the intended beneficiaries of such covenants, reservations, restrictions, and
agreements, (b) by making possible the obtaining of advantageous financing for the Property and
the Apartment Community, and (c) by furthering the public purposes advanced by the Authority
and the City, and (iii) the covenants, reservations, restrictions and agreements set forth herein shall
run with the Property and shall be binding for the benefit of and enforceable by the Authority and
the City and their successors and assigns for the entire term of this Agreement.
5.20 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which shall constitute one and the same instrument.
5.21 Amendments. This Agreement may be amended only by the written agreement of the
Authority, the City and the Owner.
WHEREFORE, the undersigned has executed this Agreement as of the date first-above
written.
OWNER:
_____________________________
AUTHORITY:
PALM DESERT HOUSING AUTHORITY, a
public body, corporate and politic
By: ________________________
Print Name: ___________________
Title: ________________________
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of )
On ____________, 2022, before me, ________________________________________________, (insert name and title of the officer)
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 (Seal)
EXHIBIT “A”
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Palm Desert, County of Riverside, State of California, described as
follows:
EXHIBIT “B”
HOUSEHOLD INCOME CERTIFICATION
(Attached)
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EXHIBIT “C”
CERTIFICATE OF CONTINUING COMPLIANCE
(Attached)
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EXHIBIT I
SCOPE OF DEVELOPMENT (PHASE I AND PHASE II)
Pursuant to that certain Amended and Restated Disposition, Development and Loan
Agreement (“DDLA”) dated in 2024 executed by and among the City of Palm Desert, a municipal
corporation (the “City”), the Palm Desert Housing Authority, a public body corporate and politic
(the “Authority”) and Palm Companies, LLC (“Palm”), the single asset tax credit limited
partnership created and controlled by Palm and approved by the City Manager as the entity who
will take title to the Property at the Close of Escrow shall develop a two hundred forty-one (241)
unit multifamily rental housing development, including units for extremely low, very low, and low
income households (i.e., the Development) on the Property. All capitalized terms not defined
herein shall have the meaning ascribed to such terms in the DDLA.
The Development shall conform to plans approved by City (Precise Plan 22-0003/Tentative
Parcel Map 38366, and Environmental Assessment 22-0003), including all conditions and
mitigation measures imposed by the City in connection with the entitlement/development approval
process of the City. This shall include any subsequent updates or extensions to the approvals as
approved by the City.
The Development shall be constructed on the Property (such property consisting of
approximately 10.49 acres of city-owned vacant land located at the north side of Gerald Ford
Drive, between Portola Road and Cook Street in the City of Palm Desert). The
project/development, which will be called “Palm Villas at Millennium”, will be built as in two
phases, and each phase will include on on-site manager’s unit. The quality of construction shall be
of a high level.
PHASES: The Development shall be constructed in two phases, one phase on the Phase I Parcel
and the second Phase on the Phase II Parcel. Phase I shall consist of 120 affordable units and one
manager’s unit; Phase II shall consist of 119 affordable units and one manager’s unit.
HOUSING TYPE
Palm Villas at Millennium will target families with incomes from 30% to 80% AMI and will
consist of a mix of one, two and three-bedroom units. Units will be restricted by recorded Housing
Agreements on each Phase (one with the City in connection with a density bonus; the other with
the Authority, required due to the Authority’s purchase money loan for Phase I and purchase
money and construction loan for Phase II, as described in the DDLA). One two-bedroom unit and
one three-bedroom unit, respectively, will be used for the on-site property managers.
SITE AMENITIES---TO BE CONSTRUCTED AS PART OF PHASE I, UNLESS LOCATED ON PHASE II
PARCEL
(31) Community Center
o Leasing Office
o Computer Lab
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o Flex-Space
(32) Surveillance Cameras
(33) Picnic Areas (covered)
(34) Laundry Facilities
(35) Tot-Lot/Playground (covered)
(36) Swimming Pool(s):
- One pool will be a minimum of 935 square feet and shall include pool restrooms; the
other pool will be a minimum of 700 square feet
- Alternatively, a single pool, no smaller than 1600 square feet, shall be completed
• On-Site Property Management
• Gated Access
• Assigned Parking
CONSTRUCTION TYPE & ARCHITECTURAL GOALS
All buildings will be garden style Type V walk-ups with concrete slab-on-grade foundations. The
building architecture will be designed to blend with the character of the area and will incorporate
Universal Design concepts throughout that emphasizes overall project accessibility. The site will
have a spacious feel with open desert landscaped areas and surface parking. Construction of the
project is subject to California State prevailing wages, and may be subject to Federal Davis Bacon
prevailing wages.
SUSTAINABLE BUILDING / GREEN BUILDING PRACTICES
Palm Communities strives to implement building technologies that produce “green” and
sustainable developments. Palm Villas at Millennium will be built per minimum TCAC
requirements, which based on current regulations includes achieving minimum CalGreen and CAS
compliance.
UNIT AMENITIES
• Energy Star Appliances
o Oven/Stove
o Refrigerator
o Dishwasher
o Garbage Disposal
• Solid Surface Countertops
• Upgraded Cabinets
• Central Air Conditioning/Heating
• Window Blinds
• Carpet/Vinyl or Tile
• Patio or Balcony
SOCIAL SERVICE PROGRAMS
• Service amenities will be conducted in the community buildings and available for all
tenants free of charge. A program coordinator will be hired to provide family appropriate
classes for the residents, as well as collaborate with outside nonprofits and agencies to
expand program options. Residents will have input as to which classes and programs are
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offered at the center. Typically, the classes will include the following:
English as a Second Language
• Literacy Programs
• Computer Training
• “Basics of Life” Courses
• Entering the Workforce Courses
• Nutrition and Wellness Programs
The developer shall commence and complete the Development in accordance with the
Schedule of Performance. The Development shall conform to and shall complete and satisfy any
and all conditions from the City’s entitlement approval of Project number PP22-0003/TPM 38366.
I. DEVELOPMENT STANDARDS
The Improvements shall conform to all applicable Governmental Requirements, including
without limitation local subdivision, zoning, building code and other applicable ordinances,
resolutions, policies, applicable general and Specific Plans, and regulations of the City of Palm
Desert (“City Ordinances”) and the following development standards:
A. General Requirements:
1. Vehicular Access. The placement of vehicular driveways shall be
coordinated with the needs of proper street traffic flow as approved by the City in accordance with
City Ordinances. In the interest of minimizing traffic congestion, the City of Palm Desert will
control the number and location of curb breaks for access to the Site for off-street parking and
truck loading. All access driveways shall require written approval of the City.
2. Building Signs. Signs shall be limited in size, subdued and otherwise
designed to contribute positively to the environment. Signs identifying the building use will be
permitted, but their height, size, location, color, lighting and design will be subject to City
approval, and signs must conform to the City Ordinances.
3. Screening. All outdoor storage of materials or equipment shall be enclosed
or screened to the extent and in the manner required by the City.
4. Landscaping. The developer shall provide and maintain landscaping
within the public rights-of-way and within setback area along all street frontages and conforming
to the plans as hereafter approved by the City. Landscaping shall consist of trees, shrubs and
installation of an automatic irrigation system adequate to maintain such plant material. The type
and size of trees to be planted, together with a landscaping plan.
5. Utilities. All utilities on the Property provided to service the units
constructed by developer shall be underground at developer’s expense.
6. Building Design. Buildings shall be constructed such that the
Improvements shall be of high architectural quality, and shall be effectively and aesthetically
designed and in conformance with City approvals.
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7. Energy Considerations. The design of the Improvements shall include,
where feasible, energy conservation construction techniques and design, including co-generation
facilities and active and passive solar energy design. The developer shall be required to
demonstrate consideration of such energy features during the design review process and to
consistency with energy conservation provisions of the building code.
8. Site Preparation. Palm, at its cost and expense, shall prepare Property (also
sometimes referred to herein as the “Site”) for development. Such Site preparations shall consist
of the complete demolition and removal of all existing improvements if any.
9. Environmental Impact Mitigation Measures. To the extent required
under the terms of the DDLA, the developer shall implement any and all mitigation measures
and/or mitigation monitoring requirements as identified in any certified environmental document
or mitigated negative declaration certified in connection with the project.
10. Construction Fence. The developer shall install a temporary construction
chain link fence. The construction fence shall be maintained free of litter and in good repair for
the duration of its installation.
11. Development Identification Signs. Prior to commencement of
construction on the Site, the developer shall prepare and install, at its cost and expense, one sign
on the barricade around the Site which identifies the development. The sign shall be at least four
(4) feet by six (6) feet and be visible to passing pedestrians and vehicular traffic. The design of
the sign, as well as the proposed location, shall be submitted to the City and Authority for review
and approval prior to installation. The sign shall, at a minimum, include:
- Illustration of development
- Development name
- Palm
- Logo of the City of Palm Desert
- List of City Council Members
- Information number
- Completion Date
B. Design Features:
The following design features are considered essential components to the
Improvements:
Handicapped Units – An agreed upon number of units are to be fully handicapped
accessible in compliance with State Housing Code – Title 24 requirements.
Overall Design Quality, Materials, Colors, Design Features – Quality of design is
important, materials and colors are to be approved by City.
Housing Type – The project shall consist of development of a multi-family
apartment complex with two hundred forty-one (241) units, in the two Phases described
above.
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Mobility – All facilities shall comply, to the extent feasible, with current CTCAC
standards.
Green Building Standards – All facilities shall comply, to the extent feasible, with
CTCAC minimum green building standards.
II. DEMOLITION AND SOILS
Except to the extent otherwise expressly provided in the DDLA, the developer assumes all
responsibility for surface and subsurface conditions at the Site, and the suitability of the Site for
the Improvements. The developer has undertaken all investigation of the Site as it shall deem
necessary and has not received or relied upon any representations of City or the Authority, or their
respective officers, agents and employees.
III. SPECIAL AMENITIES
The developer shall undertake all improvements required by the City as a condition of
development of the Site, as more particularly provided in the City approvals given for the Site.
IV. MAINTENANCE OF SITE
The developer shall maintain the site free of all weeds and trash prior to start of
construction.
EXHIBIT J
SCHEDULES OF PERFORMANCE (PHASE I AND PHASE II)
All of the construction deadlines described below shall be subject to extension as a result “Force
Majeure” in accordance with Section 10.3 of the DDLA.
PHASE I SCHEDULE OF PERFORMANCE:
# TASK DEADLINE
1 Open escrow for Phase I Parcel Promptly after execution of DDLA
2 Developer shall obtain the City Approvals
and obtain permit ready letter for all permits
necessary to construct the Development, and
pay the grading permit fees and all Final Map
fees, and shall cause all security required for
the Final Map under the conditions thereto
(including security under the Subdivision
Improvement Agreement, which must be
signed and delivered as a condition to Close
of Escrow).
Prior to or concurrent with the conveyance
of the Phase I Parcel.
3 Developer shall submit evidence of financing
commitments consistent with the Financing
Plan.
At least thirty (30) days prior to Close of
Escrow.
4 All construction financing to close, and
evidence of committed equity to be provided
(all consistent with final Project Budget)
By or concurrently with Close of Escrow
5 Closing of the conveyance of the Phase I
Parcel
January 1, 2025
6 Developer and City to execute and deliver all
documents required for Closing into Escrow,
as applicable, and satisfy all applicable
closing conditions
Prior to Close of Escrow.
7 Developer commences Construction March 30, 2025
8 Completion of Grading October 1, 2025
J-77
P6401-0001\2938077v2.doc
# TASK DEADLINE
9 Completion and issuance of final Certificate
of Occupancy
May 30, 2027
PHASE II SCHEDULE OF PERFORMANCE:
# TASK DEADLINE
1 Parties to open escrow for the conveyance of
the Phase II Parcel.
Upon closing of conveyance of Phase I
Parcel.
2 Developer shall obtain the City Approvals
and obtain permit ready letter for all permits
necessary to construct the Development, and
pay the grading permit fees and all Final Map
fees, and shall cause all security required for
the Final Map under the conditions thereto
(including security under the Subdivision
Improvement Agreement, which must be
signed and delivered as a condition to Close
of Escrow).
Prior to or concurrent with the conveyance
of the Phase II Parcel.
3 Developer shall submit evidence of financing
commitments consistent with the Financing
Plan.
At least thirty (30) days prior to Close of
Escrow.
4 All construction financing to close, and
evidence of committed equity to be provided
(all consistent with final Project Budget)
By or concurrently with Close of Escrow
5 Closing of the conveyance of the Phase II
Parcel
March 1, 2026
6 Developer and City to execute and deliver all
documents required for Closing into Escrow,
as applicable, and satisfy all applicable
closing conditions
Prior to Close of Escrow.
7 Developer commences Construction May 30, 2026
8 Completion of Grading October 1, 2026
9 Completion and issuance of final Certificate
of Occupancy
May 30, 2028
EXHIBIT K-1
FINANCING PLAN – PHASE I
APPENDIX A - TABLE 1
ESTIMATED DEVELOPMENT COSTS 1
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
I.Land Assemblage Costs
Acquisition Price 2 121 Units $16,248 /Unit $1,966,000
Closing Costs 0%of Purchase Price 0
Total Land Assemblage Costs 121 Units $16,200 /Unit $1,966,000
II.Direct Costs 3
Off-site Improvements 4 Allowance $4,487,000
On-site Improvements 262,231 Sf Land $34 /Sf Land 8,953,000
Extraordinary Costs 5 121 Units $8,653 /Unit 1,047,000
Residential Structure 122,513 Sf GBA $251 /Unit 30,752,000
Community Building 3,781 Sf GBA $519 of Construction Costs 1,963,000
Furnishings, Fixtures & Equipment 121 Units $620 of Construction Costs 75,000
Contractor Fees / General Requirements 14%of Construction Costs 6,621,000
Construction Insurance / Bonds 1%of Construction Costs 538,000
Contingency Allowance 5%of Other Direct Costs 2,718,000
Total Direct Costs 121 Units $472,300 /Unit $57,154,000
III.Indirect Costs
Architecture, Engineering & Consultants 4%of Direct Costs $2,133,000
Permits & Fees 6 121 Units $21,033 /Unit 2,545,000
Taxes, Insurance, Legal & Accounting 2%of Direct Costs 1,396,000
Marketing & Leasing 121 Units $496 /Unit 60,000
Developer Fee 7 10,070,000
Contingency Allowance 3%of Other Indirect Costs 500,000
Total Indirect Costs 121 Units $138,000 /Unit $16,704,000
IV.Financing Costs
Tax-Exempt Bonds Interest 8 $44,853,250 TEBs 8.00%Interest $4,662,000
Taxable Bonds Interest $0 Txble Bonds 8.00%Interest 0
Financing Fees
Construction Loan $44,853,250 Loan 1.11 Points 498,000
Permanent Loan $13,910,000 Loan 1.14 Points 159,000
Issuance Costs $44,853,250 TEBs 0.52 Points 231,000
Tax Credit Fees 121 Units $1,044 /Unit 126,000
Capitalized Reserves
Operating Reserves $186,046 /Mo 3 Months 558,000
SLP Fee 20 Years $5,000 /Year 100,000
Total Financing Costs 121 Units $52,300 /Unit $6,334,000
V.Total Development Costs 121 Units $679,000 /Unit $82,158,000
1
2
3
4
5
6
7
8
Based on Developer's estimates, which KMA determined to be reasonable based on experience.
Based on City appraisal from June 2022.
Project will be required to pay both Federal and State prevailing wages.
Includes solar, swimming pool and parking space shade covers.
Maximum developer fee allowed by TCAC.
Assumes a 24-month development period and a 65% average outstanding balance.
All offsite improvements required will be constructed in Phase I.
Does not include SCE and TUMF fees, which will be waived or refunded.
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 2A
AFFORDABILITY MIX
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
Number Applicable Utility Applicable
of Units TCAC Rent HCD Rent DB Rent Gross Rent Allowance Net Rent
30% TCAC, ELI HCD, VLI DB 12 30% AMI ELI HCD VLI HCD
1-Bdrm Units 2 $524 $567 $945 $524 $29 $495
2-Bdrm Units 7 $629 $638 $1,063 $629 $24 $605
3-Bdrm Units 3 $727 $709 $1,181 $709 $20 $689
30% TCAC, ELI HCD 24 30% AMI ELI HCD N/A
1-Bdrm Units 4 $524 $567 N/A $524 $29 $495
2-Bdrm Units 20 $629 $638 N/A $629 $24 $605
3-Bdrm Units 0 $727 $709 N/A $709 $20 $689
30% TCAC, 59% HCD 14 30% AMI 59% Low N/A
1-Bdrm Units 9 $524 $1,115 N/A $524 $29 $495
2-Bdrm Units 1 $629 $1,254 N/A $629 $24 $605
3-Bdrm Units 4 $727 $1,394 N/A $727 $20 $707
30% TCAC, Low HCD 10 30% AMI Low N/A
1-Bdrm Units 0 $524 $1,134 N/A $524 $29 $495
2-Bdrm Units 0 $629 $1,276 N/A $629 $24 $605
3-Bdrm Units 10 $727 $1,418 N/A $727 $20 $707
60% TCAC, 59% HCD 47 60% AMI 59% Low N/A
1-Bdrm Units 0 $1,049 $1,115 N/A $1,049 $29 $1,020
2-Bdrm Units 47 $1,258 $1,254 N/A $1,254 $24 $1,230
3-Bdrm Units 0 $1,454 $1,394 N/A $1,394 $20 $1,374
60% TCAC, Low HCD 13 60% AMI Low N/A
1-Bdrm Units 0 $1,049 $1,134 N/A $1,049 $29 $1,020
2-Bdrm Units 0 $1,258 $1,276 N/A $1,258 $24 $1,234
3-Bdrm Units 13 $1,454 $1,418 N/A $1,418 $20 $1,398
Manager Unit 1
1-Bdrm Units 0
2-Bdrm Units 0
3-Bdrm Units 1
PBV Overhang 60 FMR Tenant Rent Overhang
Utility
Allowance
Net
Overhang
1-Bdrm Units 15 $1,772 $495 $1,277 $29.37 $1,248.00
2-Bdrm Units 28 $2,211 $605 $1,606 $24.06 $1,582.00
3-Bdrm Units 3 $2,977 $689 $2,288 $20.48 $2,268.00
3-Bdrm Units 14 $2,977 $707 $2,270 $20.48 $2,250.00
Note: Rents are based on 2023 rents and the utility allowances are based on Developer CAUC estimates on 3/12/24 for all electric building.
TOTAL UNITS 121 AVERAGE AFFORDABILITY:45%
1-Bdrm Units 15 POTENTIAL GROSS INCOME - BASE:$1,347,475
2-Bdrm Units 75 POTENTIAL GROSS INCOME - PBV:$1,215,840
3-Bdrm Units 31
PBV SUBSIDY 60 LMIHAF City Regulatory Agreement:120
1-Bdrm Units 15 ELI HCD Units 36
2-Bdrm Units 28 VLI HCD Units 0
3-Bdrm Units 17 59% HCD Units 61
Low HCD Units 23
TCAC Regulatory Agreement:
30% AMI Units 60 Density Bonus City Regulatory Agreement
40% AMI Units 0 VLI HCD Units 12
50% AMI Units 0
60% AMI Units 60
70% AMI Units 0
Total Restricted Units 120
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; AFF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 2B
STABILIZED NET OPERATING INCOME
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 1 121 Units $928 /Unit/Mo $1,347,475
Projected Gross Income - PBV Subsidy 1 60 PBVs $1,689 /Unit/Mo 1,215,840
Miscellaneous Income 2 121 Units $12 /Unit/Mo 18,000
Projected Gross Income $2,581,315
(Less) Vacancy & Collection Allowance 2 5%of PGI (129,065)
Effective Gross Income $2,452,249
II.Operating Expenses 2
General Operating Expenses 121 Units $8,130 /Unit $983,712
Property Taxes & Assessments 121 Units $58 /Unit 7,000
Social Services 121 Units $653 /Unit 78,972
County Monitoring Fee 121 Units $100 /Unit 12,100
City Monitoring Fee 121 Units $41 /Unit 4,961
Bond Issuer Fee Allowance 5,000
Replacement Reserves 121 Units $350 /Unit 42,350
Total Operating Expenses 121 Units $9,373 /Unit $1,134,095
III.Net Operating Income $1,318,154
1
2
See Table 2A.
Based on Developer estimates, which KMA determined to be reasonable based on experience.Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 3
FINANCIAL GAP ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
I.Available Funding Sources
A.Permanent Loan 1.20 DCR $1,098,462 Debt Svc $13,910,000
7.50%Interest 40 Years
B.Federal Tax Credit Equity $40,147,466 Gross TC $0.86 Equity $34,523,000
C.State Tax Credit Equity $22,659,500 Gross TC $0.78 Equity $17,618,000
D.County Loan 2 121 Units $55,400 /Unit $6,700,000
E.Contributed Developer Fee 3 0%of Developr Fee $0
F.Deferred Developer Fee 74%of Developr Fee $7,441,000
Total Available Funding Sources 121 Units $662,700 /Unit $80,192,000
II.Financial Gap Calculation
Total Development Costs $82,158,000
(Less) Available Funding Sources (80,192,000)
Financial Gap 121 Units $16,200 /Unit $1,966,000
III.Authority Funding Sources
HOME Funds $0
LMIHAF Funds 1,966,000
PLHA Funds 0
Total Authority Assistance 121 Units $16,200 /Unit $1,966,000
1
2
3
Based on Developer estimates, which KMA determined to be reasonable based on experience.
Previously awarded by County for entire Project; however, County has verified willingness to allow the entire amount to be used
in Phase I only.
Per TCAC draft guidelines, a portion of the deferred fee may be requried to be contributed to the Project.Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year $1,347,475 $1,381,161 $1,415,691 $1,451,083 $1,487,360 $1,524,544 $1,562,657 $1,601,724 $1,641,767 $1,682,811
Projected Gross Income - PBV Subsidy 102.5%/Year 1,215,840 1,246,236 1,277,392 1,309,327 1,342,060 1,375,611 1,410,002 1,445,252 1,481,383 1,518,418
Miscellaneous Income 102.5%/Year 18,000 18,450 18,911 19,384 19,869 20,365 20,874 21,396 21,931 22,480
Projected Gross Income $2,581,315 $2,645,847 $2,711,994 $2,779,793 $2,849,288 $2,920,521 $2,993,534 $3,068,372 $3,145,081 $3,223,708
(Less) Vacancy & Collection Allowance 5%of PGI (129,065)(132,292)(135,599)(138,989)(142,464)(146,026)(149,676)(153,418)(157,254)(161,185)
Effective Gross Income $2,452,249 $2,513,555 $2,576,394 $2,640,804 $2,706,824 $2,774,495 $2,843,857 $2,914,954 $2,987,827 $3,062,523
II.Operating Expenses
General Operating Expenses 103.5%/Year $983,712 1,018,142 1,053,777 1,090,659 1,128,832 1,168,341 1,209,233 1,251,556 1,295,361 1,340,698
Property Taxes & Assessments 102.0%/Year 7,000 7,140 7,283 7,428 7,577 7,729 7,883 8,041 8,202 8,366
Social Services 103.5%/Year 78,972 81,736 84,597 87,558 90,622 93,794 97,077 100,474 103,991 107,631
County Monitoring Fee 103.5%/Year 12,100 12,524 12,962 13,415 13,885 14,371 14,874 15,395 15,933 16,491
City Monitoring Fee 103.0%/Year 4,961 5,110 5,263 5,421 5,584 5,751 5,924 6,101 6,284 6,473
Bond Issuer Fee 103.5%/Year 5,000 5,175 5,356 5,544 5,738 5,938 6,146 6,361 6,584 6,814
Replacement Reserves 103.5%/Year 42,350 43,832 45,366 46,954 48,598 50,299 52,059 53,881 55,767 57,719
Total Operating Expenses $1,134,095 $1,173,659 $1,214,604 $1,256,979 $1,300,835 $1,346,223 $1,393,196 $1,441,810 $1,492,122 $1,544,192
III.Net Operating Income $1,318,154 $1,339,897 $1,361,790 $1,383,825 $1,405,989 $1,428,272 $1,450,661 $1,473,144 $1,495,705 $1,518,331
(Less) Annual Debt Service (1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)
(Less) AGP Asset Management Fee 2 103.0%/Year (5,000)(5,150)(5,305)(5,464)(5,628)(5,796)(5,970)(6,149)(6,334)(6,524)
(Less) MGP Asset Management Fee 2 103.0%/Year (10,000)(10,300)(10,609)(10,927)(11,255)(11,593)(11,941)(12,299)(12,668)(13,048)
IV.Cash Flow Available for Distribution $204,692 $225,985 $247,415 $268,972 $290,645 $312,421 $334,289 $356,234 $378,242 $400,298
V.Deferred Developer Fee Payment 3 $7,441,000 $204,692 $225,985 $247,415 $268,972 $290,645 $312,421 $334,289 $356,234 $378,242 $400,298
Accrued Payment 204,692 430,677 678,092 947,064 1,237,709 1,550,130 1,884,419 2,240,652 2,618,894 3,019,192
VI.Residual Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
VII.Authority Loan
Beginning Balance $1,966,000 $2,024,980 $2,083,960 $2,142,940 $2,201,920 $2,260,900 $2,319,880 $2,378,860 $2,437,840 $2,496,820
Beginning Balance (Interest Calc)1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000
Add: Interest 3.00%58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980
(Less) Payments 4 11.34%0 0 0 0 0 0 0 0 0 0
Ending Balance 2,024,980 2,083,960 2,142,940 2,201,920 2,260,900 2,319,880 2,378,860 2,437,840 2,496,820 2,555,800
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years per
IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 38.65% of the residual receives based on the
size of the County loan.Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $7,441,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 11.34%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years per
IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 38.65% of the residual receives based on the
size of the County loan.
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
$1,724,881 $1,768,003 $1,812,204 $1,857,509 $1,903,946 $1,951,545 $2,000,334 $2,050,342 $2,101,601 $2,154,141
1,556,378 1,595,287 1,635,170 1,676,049 1,717,950 1,760,899 1,804,921 1,850,044 1,896,295 1,943,703
23,042 23,618 24,208 24,813 25,434 26,069 26,721 27,389 28,074 28,776
$3,304,301 $3,386,908 $3,471,581 $3,558,371 $3,647,330 $3,738,513 $3,831,976 $3,927,775 $4,025,970 $4,126,619
(165,215)(169,345)(173,579)(177,918)(182,366)(186,925)(191,598)(196,388)(201,298)(206,331)
$3,139,086 $3,217,563 $3,298,002 $3,380,452 $3,464,964 $3,551,588 $3,640,378 $3,731,387 $3,824,672 $3,920,289
1,387,623 1,436,190 1,486,456 1,538,482 1,592,329 1,648,061 1,705,743 1,765,444 1,827,234 1,891,188
8,533 8,704 8,878 9,055 9,236 9,421 9,609 9,802 9,998 10,198
111,398 115,297 119,332 123,509 127,832 132,306 136,936 141,729 146,690 151,824
17,068 17,666 18,284 18,924 19,586 20,272 20,981 21,716 22,476 23,262
6,667 6,867 7,073 7,285 7,504 7,729 7,961 8,200 8,446 8,699
7,053 7,300 7,555 7,820 8,093 8,377 8,670 8,973 9,287 9,613
59,739 61,830 63,994 66,234 68,552 70,951 73,434 76,005 78,665 81,418
$1,598,081 $1,653,852 $1,711,572 $1,771,309 $1,833,132 $1,897,116 $1,963,335 $2,031,868 $2,102,795 $2,176,201
$1,541,005 $1,563,711 $1,586,430 $1,609,144 $1,631,831 $1,654,472 $1,677,042 $1,699,519 $1,721,876 $1,744,088
(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)
(6,720)(6,921)(7,129)(7,343)(7,563)(7,790)(8,024)(8,264)(8,512)(8,768)
(13,439)(13,842)(14,258)(14,685)(15,126)(15,580)(16,047)(16,528)(17,024)(17,535)
$422,385 $444,486 $466,582 $488,654 $510,681 $532,641 $554,510 $576,265 $597,878 $619,323
$422,385 $444,486 $466,582 $488,654 $510,681 $532,641 $554,510 $576,265 $425,606 $0
3,441,576 3,886,062 4,352,644 4,841,298 5,351,978 5,884,619 6,439,129 7,015,394 7,441,000 7,441,000
$0 $0 $0 $0 $0 $0 $0 $0 $172,272 $619,323
$2,555,800 $2,614,780 $2,673,760 $2,732,740 $2,791,720 $2,850,700 $2,909,680 $2,968,660 $3,027,640 $3,067,079
1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000
58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980
0 0 0 0 0 0 0 0 (19,541)(70,251)
2,614,780 2,673,760 2,732,740 2,791,720 2,850,700 2,909,680 2,968,660 3,027,640 3,067,079 3,055,808
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $7,441,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 11.34%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years per
IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 38.65% of the residual receives based on the
size of the County loan.
Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30
$2,207,994 $2,263,194 $2,319,774 $2,377,768 $2,437,212 $2,498,143 $2,560,596 $2,624,611 $2,690,226 $2,757,482
1,992,295 2,042,103 2,093,155 2,145,484 2,199,121 2,254,099 2,310,452 2,368,213 2,427,419 2,488,104
29,495 30,232 30,988 31,763 32,557 33,371 34,205 35,060 35,937 36,835
$4,229,785 $4,335,529 $4,443,917 $4,555,015 $4,668,891 $4,785,613 $4,905,253 $5,027,885 $5,153,582 $5,282,421
(211,489)(216,776)(222,195)(227,750)(233,444)(239,280)(245,262)(251,394)(257,679)(264,121)
$4,018,296 $4,118,753 $4,221,722 $4,327,265 $4,435,447 $4,546,333 $4,659,991 $4,776,491 $4,895,903 $5,018,301
1,957,379 2,025,887 2,096,794 2,170,181 2,246,138 2,324,752 2,406,119 2,490,333 2,577,495 2,667,707
10,402 10,610 10,822 11,038 11,259 11,484 11,714 11,948 12,187 12,431
157,138 162,637 168,330 174,221 180,319 186,630 193,162 199,923 206,920 214,162
24,076 24,919 25,791 26,694 27,628 28,595 29,596 30,632 31,704 32,814
8,960 9,229 9,506 9,791 10,085 10,387 10,699 11,020 11,350 11,691
9,949 10,297 10,658 11,031 11,417 11,816 12,230 12,658 13,101 13,559
84,268 87,217 90,270 93,429 96,699 100,083 103,586 107,212 110,964 114,848
$2,252,171 $2,330,797 $2,412,169 $2,496,385 $2,583,544 $2,673,749 $2,767,106 $2,863,726 $2,963,722 $3,067,212
$1,766,124 $1,787,956 $1,809,553 $1,830,880 $1,851,902 $1,872,584 $1,892,885 $1,912,765 $1,932,182 $1,951,088
(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)
(9,031)(9,301)(9,581)(9,868)(10,164)(10,469)(10,783)(11,106)(11,440)(11,783)
(18,061)(18,603)(19,161)(19,736)(20,328)(20,938)(21,566)(22,213)(22,879)(23,566)
$640,571 $661,590 $682,349 $702,814 $722,949 $742,715 $762,074 $780,984 $799,401 $817,278
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000
$640,571 $661,590 $682,349 $702,814 $722,949 $742,715 $762,074 $780,984 $799,401 $817,278
$3,055,808 $3,042,127 $3,026,061 $3,007,641 $2,986,900 $2,963,874 $2,938,607 $2,911,143 $2,881,535 $2,849,838
1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000
58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980
(72,661)(75,045)(77,400)(79,721)(82,005)(84,248)(86,443)(88,588)(90,677)(92,705)
3,042,127 3,026,061 3,007,641 2,986,900 2,963,874 2,938,607 2,911,143 2,881,535 2,849,838 2,816,112
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $7,441,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 11.34%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years per
IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 38.65% of the residual receives based on the
size of the County loan.
Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 Year 40
$2,826,419 $2,897,080 $2,969,506 $3,043,744 $3,119,838 $3,197,834 $3,277,780 $3,359,724 $3,443,717 $3,529,810
2,550,307 2,614,064 2,679,416 2,746,401 2,815,061 2,885,438 2,957,574 3,031,513 3,107,301 3,184,983
37,756 38,700 39,668 40,659 41,676 42,718 43,786 44,880 46,002 47,152
$5,414,482 $5,549,844 $5,688,590 $5,830,805 $5,976,575 $6,125,989 $6,279,139 $6,436,117 $6,597,020 $6,761,946
(270,724)(277,492)(284,429)(291,540)(298,828)(306,299)(313,956)(321,805)(329,850)(338,097)
$5,143,758 $5,272,352 $5,404,161 $5,539,265 $5,677,747 $5,819,690 $5,965,183 $6,114,312 $6,267,170 $6,423,849
2,761,077 2,857,714 2,957,734 3,061,255 3,168,399 3,279,293 3,394,068 3,512,861 3,635,811 3,763,064
12,680 12,933 13,192 13,456 13,725 13,999 14,279 14,565 14,856 15,153
221,658 229,416 237,446 245,756 254,358 263,260 272,474 282,011 291,881 302,097
33,962 35,151 36,381 37,655 38,972 40,336 41,748 43,209 44,722 46,287
12,042 12,403 12,775 13,158 13,553 13,960 14,378 14,810 15,254 15,712
14,034 14,525 15,034 15,560 16,104 16,668 17,251 17,855 18,480 19,127
118,868 123,028 127,334 131,791 136,403 141,178 146,119 151,233 156,526 162,004
$3,174,320 $3,285,171 $3,399,896 $3,518,630 $3,641,515 $3,768,694 $3,900,318 $4,036,544 $4,177,530 $4,323,444
$1,969,438 $1,987,182 $2,004,265 $2,020,635 $2,036,232 $2,050,996 $2,064,864 $2,077,769 $2,089,640 $2,100,405
(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)(1,098,462)
(12,136)(12,500)(12,875)(13,262)(13,660)(14,069)(14,491)(14,926)(15,374)(15,835)
(24,273)(25,001)(25,751)(26,523)(27,319)(28,139)(28,983)(29,852)(30,748)(31,670)
$834,568 $851,219 $867,177 $882,388 $896,792 $910,327 $922,928 $934,528 $945,056 $954,438
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000
$834,568 $851,219 $867,177 $882,388 $896,792 $910,327 $922,928 $934,528 $945,056 $954,438
$2,816,112 $2,780,426 $2,742,850 $2,703,465 $2,662,354 $2,619,609 $2,575,329 $2,529,620 $2,482,595 $2,434,375
1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000
58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980
(94,667)(96,555)(98,365)(100,091)(101,725)(103,260)(104,689)(106,005)(107,199)(108,264)
2,780,426 2,742,850 2,703,465 2,662,354 2,619,609 2,575,329 2,529,620 2,482,595 2,434,375 2,385,092
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $7,441,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 11.34%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years per
IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 38.65% of the residual receives based on the
size of the County loan.
Year 41 Year 42 Year 43 Year 44 Year 45 Year 46 Year 47 Year 48 Year 49 Year 50
$3,618,055 $3,708,507 $3,801,219 $3,896,250 $3,993,656 $4,093,498 $4,195,835 $4,300,731 $4,408,249 $4,518,455
3,264,608 3,346,223 3,429,879 3,515,626 3,603,516 3,693,604 3,785,944 3,880,593 3,977,608 4,077,048
48,331 49,539 50,778 52,047 53,349 54,682 56,049 57,451 58,887 60,359
$6,930,994 $7,104,269 $7,281,876 $7,463,923 $7,650,521 $7,841,784 $8,037,829 $8,238,774 $8,444,744 $8,655,862
(346,549)(355,213)(364,093)(373,195)(382,525)(392,088)(401,891)(411,938)(422,236)(432,792)
$6,584,445 $6,749,057 $6,917,783 $7,090,728 $7,267,996 $7,449,696 $7,635,938 $7,826,836 $8,022,507 $8,223,070
3,894,771 4,031,088 4,172,176 4,318,203 4,469,340 4,625,767 4,787,668 4,955,237 5,128,670 5,308,173
15,456 15,765 16,081 16,402 16,730 17,065 17,406 17,754 18,109 18,472
312,671 323,614 334,941 346,664 358,797 371,355 384,352 397,804 411,728 426,138
47,907 49,584 51,319 53,115 54,974 56,899 58,890 60,951 63,084 65,292
16,183 16,668 17,169 17,684 18,214 18,760 19,323 19,903 20,500 21,115
19,796 20,489 21,206 21,949 22,717 23,512 24,335 25,186 26,068 26,980
167,675 173,543 179,617 185,904 192,411 199,145 206,115 213,329 220,795 228,523
$4,474,459 $4,630,753 $4,792,509 $4,959,920 $5,133,183 $5,312,502 $5,498,090 $5,690,165 $5,888,955 $6,094,694
$2,109,986 $2,118,304 $2,125,274 $2,130,808 $2,134,813 $2,137,194 $2,137,848 $2,136,671 $2,133,552 $2,128,376
(16,310)(16,799)(17,303)(17,823)(18,357)(18,908)(19,475)(20,059)(20,661)(21,281)
(32,620)(33,599)(34,607)(35,645)(36,715)(37,816)(38,950)(40,119)(41,323)(42,562)
$2,061,056 $2,067,906 $2,073,364 $2,077,340 $2,079,741 $2,080,470 $2,079,423 $2,076,493 $2,071,569 $2,064,532
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000
$2,061,056 $2,067,906 $2,073,364 $2,077,340 $2,079,741 $2,080,470 $2,079,423 $2,076,493 $2,071,569 $2,064,532
$2,385,092 $2,210,282 $2,034,696 $1,858,491 $1,678,609 $1,493,059 $1,301,859 $1,105,042 $902,653 $694,751
1,966,000 1,966,000 1,966,000 1,858,491 1,678,609 1,493,059 1,301,859 1,105,042 902,653 694,751
58,980 58,980 58,980 55,755 50,358 44,792 39,056 33,151 27,080 20,843
(233,789)(234,566)(235,185)(235,636)(235,909)(235,991)(235,873)(235,540)(234,982)(234,184)
2,210,282 2,034,696 1,858,491 1,678,609 1,493,059 1,301,859 1,105,042 902,653 694,751 481,410
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024
APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE I
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $7,441,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 11.34%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years per
IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 38.65% of the residual receives based on the
size of the County loan.
Year 51 Year 52 Year 53 Year 54 Year 55
$4,631,417 $4,747,202 $4,865,882 $4,987,529 $5,112,217
4,178,974 4,283,449 4,390,535 4,500,298 4,612,806
61,868 63,415 65,000 66,625 68,291
$8,872,259 $9,094,065 $9,321,417 $9,554,452 $9,793,314
(443,612)(454,702)(466,070)(477,722)(489,665)
$8,428,647 $8,639,363 $8,855,347 $9,076,731 $9,303,649
5,493,960 5,686,248 5,885,267 6,091,251 6,304,445
18,841 19,218 19,602 19,994 20,394
441,053 456,490 472,467 489,003 506,118
67,578 69,943 72,391 74,925 77,547
21,749 22,401 23,073 23,765 24,478
27,925 28,902 29,914 30,961 32,044
236,522 244,800 253,368 262,236 271,414
$6,307,626 $6,528,002 $6,756,081 $6,992,135 $7,236,441
$2,121,021 $2,111,361 $2,099,266 $2,084,596 $2,067,208
(21,920)(22,577)(23,254)(23,952)(24,671)
(43,839)(45,154)(46,509)(47,904)(49,341)
$2,055,262 $2,043,630 $2,029,502 $2,012,740 $1,993,196
$0 $0 $0 $0 $0
7,441,000 7,441,000 7,441,000 7,441,000 7,441,000
$2,055,262 $2,043,630 $2,029,502 $2,012,740 $1,993,196
$481,410 $262,720 $38,789 $0 $0
481,410 262,720 38,789 0 0
14,442 7,882 1,164 0 0
(233,132)(231,813)(39,952)0 0
262,720 38,789 0 0 0
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024
EXHIBIT K-2
FINANCING PLAN – PHASE II
APPENDIX B - TABLE 1
ESTIMATED DEVELOPMENT COSTS 1
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
I.Land Assemblage Costs
Acquisition Price 2 120 Units $12,158 /Unit $1,459,000
Closing Costs 0%of Purchase Price 0
Total Land Assemblage Costs 120 Units $12,200 /Unit $1,459,000
II.Direct Costs 3
Off-site Improvements 4 Allowance $0
On-site Improvements 194,713 Sf Land $46 /Sf Land 8,953,000
Extraordinary Costs 5 120 Units $7,000 /Unit 840,000
Residential Structure 121,877 Sf GBA $250 /Unit 30,498,000
Community Building 0 Sf GBA $0 of Constructio 0
Furnishings, Fixtures & Equipment 120 Units $625 of Constructio 75,000
Contractor Fees / General Requirements 14%of Construction Costs 5,651,000
Construction Insurance / Bonds 1%of Construction Costs 459,000
Contingency Allowance 5%of Other Direct Costs 2,320,000
Total Direct Costs 120 Units $406,600 /Unit $48,796,000
III.Indirect Costs
Architecture, Engineering & Consultants 4%of Direct Costs $1,783,000
Permits & Fees 6 120 Units $22,267 /Unit 2,672,000
Taxes, Insurance, Legal & Accounting 3%of Direct Costs 1,239,000
Marketing & Leasing 120 Units $500 /Unit 60,000
Developer Fee 7 8,784,000
Contingency Allowance 3%of Other Indirect Costs 500,000
Total Indirect Costs 120 Units $125,300 /Unit $15,038,000
IV.Financing Costs
Tax-Exempt Bonds Interest 8 $41,391,683 TEBs 8.00%Interest $4,779,000
Taxable Bonds Interest $0 Txble Bonds 8.00%Interest 0
Financing Fees
Construction Loan $41,391,683 Loan 1.12 Points 464,000
Permanent Loan $14,032,000 Loan 1.00 Points 140,000
Issuance Costs $41,391,683 TEBs 0.55 Points 229,000
Tax Credit Fees 120 Units $1,002 /Unit 120,000
Capitalized Reserves
Operating Reserves $184,705 /Mo 3 Months 554,000
SLP Fee 20 Years $5,000 /Year 100,000
Total Financing Costs 120 Units $53,200 /Unit $6,386,000
V.Total Development Costs 120 Units $597,300 /Unit $71,679,000
1
2
3
4
5
6
7
8
Based on Developer's estimates.
Based on City appraisal from June 2022.
Project will be required to pay both Federal and State prevailing wages.
Includes solar, swimming pool and parking space shade covers.
Maximum developer fee allowed by TCAC.
Assumes a 24-month development period and a 72% average outstanding balance.
All offsite improvements required will be constructed in Phase I.
Does not include SCE and TUMF fees, which will be waived or refunded.
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 2A
AFFORDABILITY MIX
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
Number Applicable Utility Applicable
of Units TCAC Rent HCD Rent DB Rent Gross Rent Allowance Net Rent
30% TCAC, ELI HCD, VLI DB 12 30% AMI ELI HCD VLI HCD
1-Bdrm Units 2 $524 $567 $945 $524 $29 $495
2-Bdrm Units 7 $629 $638 $1,063 $629 $24 $605
3-Bdrm Units 3 $727 $709 $1,181 $709 $20 $689
30% TCAC, ELI HCD 24 30% AMI ELI HCD N/A
1-Bdrm Units 4 $524 $567 N/A $524 $29 $495
2-Bdrm Units 20 $629 $638 N/A $629 $24 $605
3-Bdrm Units 0 $727 $709 N/A $709 $20 $689
30% TCAC, 59% HCD 14 30% AMI 59% Low N/A
1-Bdrm Units 9 $524 $1,115 N/A $524 $29 $495
2-Bdrm Units 1 $629 $1,254 N/A $629 $24 $605
3-Bdrm Units 4 $727 $1,394 N/A $727 $20 $707
30% TCAC, Low HCD 10 30% AMI Low N/A
1-Bdrm Units 0 $524 $1,134 N/A $524 $29 $495
2-Bdrm Units 0 $629 $1,276 N/A $629 $24 $605
3-Bdrm Units 10 $727 $1,418 N/A $727 $20 $707
60% TCAC, 59% HCD 46 60% AMI 59% Low N/A
1-Bdrm Units 0 $1,049 $1,115 N/A $1,049 $29 $1,020
2-Bdrm Units 46 $1,258 $1,254 N/A $1,254 $24 $1,230
3-Bdrm Units 0 $1,454 $1,394 N/A $1,394 $20 $1,374
60% TCAC, Low HCD 13 60% AMI Low N/A
1-Bdrm Units 0 $1,049 $1,134 N/A $1,049 $29 $1,020
2-Bdrm Units 0 $1,258 $1,276 N/A $1,258 $24 $1,234
3-Bdrm Units 13 $1,454 $1,418 N/A $1,418 $20 $1,398
Manager Unit 1
1-Bdrm Units 0
2-Bdrm Units 1
3-Bdrm Units 0
PBV Overhang 60 FMR Tenant Rent Overhang
Utility
Allowance
Net
Overhang
1-Bdrm Units 15 $1,772 $495 $1,277 $29 $1,248
2-Bdrm Units 28 $2,211 $605 $1,606 $24 $1,582
3-Bdrm Units 3 $2,977 $689 $2,288 $20 $2,268
3-Bdrm Units 14 $2,977 $707 $2,270 $20 $2,250
Note: Rents are based on 2023 rents and the utility allowances are based on Developer CAUC estimates on 3/12/24 for all electric building.
TOTAL UNITS 120 AVERAGE AFFORDABILITY:45%
1-Bdrm Units 15 POTENTIAL GROSS INCOME - BASE:$1,332,715
2-Bdrm Units 75 POTENTIAL GROSS INCOME - PBV:$1,215,840
3-Bdrm Units 30
PBV SUBSIDY 60 LMIHAF City Regulatory Agreement:119
1-Bdrm Units 15 ELI HCD Units 36
2-Bdrm Units 28 VLI HCD Units 0
3-Bdrm Units 17 59% HCD Units 60
Low HCD Units 23
TCAC Regulatory Agreement:
30% AMI Units 60 Density Bonus City Regulatory Agreement
40% AMI Units 0 VLI HCD Units 12
50% AMI Units 0
60% AMI Units 59
70% AMI Units 0
Total Restricted Units 119
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; AFF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 2B
STABILIZED NET OPERATING INCOME
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 1 120 Units $925 /Unit/Mo $1,332,715
Projected Gross Income - PBV Subsidy 1 60 PBVs $1,689 /Unit/Mo 1,215,840
Miscellaneous Income 2 120 Units $12 /Unit/Mo 17,850
Projected Gross Income $2,566,405
(Less) Vacancy & Collection Allowance 2 5%of PGI (128,320)
Effective Gross Income $2,438,085
II.Operating Expenses 2
General Operating Expenses 120 Units $8,087 /Unit $970,446
Property Taxes & Assessments 120 Units $58 /Unit 7,000
Social Services 120 Units $658 /Unit 78,972
County Monitoring Fee 120 Units $0 /Unit 0
City Monitoring Fee 120 Units $41 /Unit 4,920
Bond Issuer Fee Allowance 5,000
Replacement Reserves 120 Units $350 /Unit 42,000
Total Operating Expenses 120 Units $9,236 /Unit $1,108,338
III.Net Operating Income $1,329,747
1
2
See Table 2A.
Based on Developer estimates, which KMA determined to be reasonable based on experience.
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 3
FINANCIAL GAP ANALYSIS
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
I.Available Funding Sources
A.Permanent Loan 1.20 DCR $1,108,122 Debt Svc $14,032,000
7.50%Interest 40 Years
B.Federal Tax Credit Equity $35,018,207 Gross TC $0.86 Equity $30,112,000
C.State Tax Credit Equity $20,202,812 $0.82 Equity $16,524,000
D.County Loan 2 120 Units $0 /Unit $0
E.Contributed Developer Fee 3 0%of Developr Fee $0
F.Deferred Developer Fee 71%of Developr Fee $6,222,000
Total Available Funding Sources $66,890,000
II.Financial Gap Calculation
Total Development Costs $71,679,000
(Less) Available Funding Sources (66,890,000)
Financial Gap 120 Units $39,908 /Unit $4,789,000
III.Authority Funding Sources per Developer Request
HOME Funds $0
LMIHAF Funds 4,789,000
PLHA Funds 0
Total Authority Assistance 120 Units $39,908 /Unit $4,789,000
1
2
3
Previously awarded by County for entire Project; however, County has verified willingness to allow the entire amount
to be used in Phase I only.
Per TCAC draft guidelines, a portion of the deferred fee may be requried to be contributed to the Project.
Based on Developer estimates, which KMA determined to be reasonable based on experience.
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year $1,332,715 $1,366,033 $1,400,184 $1,435,189 $1,471,068 $1,507,845 $1,545,541 $1,584,180 $1,623,784 $1,664,379
Projected Gross Income - PBV Subsidy 102.5%/Year 1,215,840 1,246,236 1,277,392 1,309,327 1,342,060 1,375,611 1,410,002 1,445,252 1,481,383 1,518,418
Miscellaneous Income 102.5%/Year 17,850 18,296 18,754 19,222 19,703 20,196 20,701 21,218 21,748 22,292
Projected Gross Income $2,566,405 $2,630,565 $2,696,330 $2,763,738 $2,832,831 $2,903,652 $2,976,243 $3,050,649 $3,126,916 $3,205,089
(Less) Vacancy & Collection Allowance 5%of PGI (128,320)(131,528)(134,817)(138,187)(141,642)(145,183)(148,812)(152,533)(156,346)(160,255)
Effective Gross Income $2,438,085 $2,499,037 $2,561,513 $2,625,551 $2,691,189 $2,758,469 $2,827,431 $2,898,117 $2,970,570 $3,044,834
II.Operating Expenses
General Operating Expenses 103.5%/Year $970,446 1,004,412 1,039,566 1,075,951 1,113,609 1,152,585 1,192,926 1,234,678 1,277,892 1,322,618
Property Taxes & Assessments 102.0%/Year 7,000 7,140 7,283 7,428 7,577 7,729 7,883 8,041 8,202 8,366
Social Services 103.5%/Year 78,972 81,736 84,597 87,558 90,622 93,794 97,077 100,474 103,991 107,631
County Monitoring Fee 103.5%/Year 0 0 0 0 0 0 0 0 0 0
City Monitoring Fee 103.0%/Year 4,920 5,068 5,220 5,376 5,538 5,704 5,875 6,051 6,233 6,419
Bond Issuer Fee 103.5%/Year 5,000 5,175 5,356 5,544 5,738 5,938 6,146 6,361 6,584 6,814
Replacement Reserves 103.5%/Year 42,000 43,470 44,991 46,566 48,196 49,883 51,629 53,436 55,306 57,242
Total Operating Expenses $1,108,338 $1,147,000 $1,187,013 $1,228,423 $1,271,279 $1,315,633 $1,361,536 $1,409,042 $1,458,207 $1,509,090
III.Net Operating Income $1,329,747 $1,352,037 $1,374,500 $1,397,128 $1,419,910 $1,442,836 $1,465,895 $1,489,075 $1,512,362 $1,535,744
(Less) Annual Debt Service (1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)
(Less) AGP Asset Management Fee 2 103.0%/Year (5,000)(5,150)(5,305)(5,464)(5,628)(5,796)(5,970)(6,149)(6,334)(6,524)
(Less) MGP Asset Management Fee 2 103.0%/Year (10,000)(10,300)(10,609)(10,927)(11,255)(11,593)(11,941)(12,299)(12,668)(13,048)
IV.Cash Flow Available for Distribution $206,624 $228,464 $250,464 $272,615 $294,905 $317,325 $339,862 $362,505 $385,238 $408,050
V.Deferred Developer Fee Payment 3 $6,222,000 $206,624 $228,464 $250,464 $272,615 $294,905 $317,325 $339,862 $362,505 $385,238 $408,050
Accrued Payment 206,624 435,089 685,553 958,168 1,253,073 1,570,398 1,910,260 2,272,764 2,658,003 3,066,052
VI.Residual Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
VII.Authority Loan
Beginning Balance $4,789,000 $4,932,670 $5,076,340 $5,220,010 $5,363,680 $5,507,350 $5,651,020 $5,794,690 $5,938,360 $6,082,030
Beginning Balance (Interest Calc)4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000
Add: Interest 3.00%143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670
(Less) Payments 4 50.00%0 0 0 0 0 0 0 0 0 0
Ending Balance 4,932,670 5,076,340 5,220,010 5,363,680 5,507,350 5,651,020 5,794,690 5,938,360 6,082,030 6,225,700
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years
per IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 0.00% of the residual receives based on
the size of the County loan.Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years
per IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 0.00% of the residual receives based on
the size of the County loan.
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
$1,705,988 $1,748,638 $1,792,354 $1,837,163 $1,883,092 $1,930,169 $1,978,423 $2,027,884 $2,078,581 $2,130,546
1,556,378 1,595,287 1,635,170 1,676,049 1,717,950 1,760,899 1,804,921 1,850,044 1,896,295 1,943,703
22,850 23,421 24,006 24,606 25,222 25,852 26,498 27,161 27,840 28,536
$3,285,216 $3,367,346 $3,451,530 $3,537,818 $3,626,264 $3,716,920 $3,809,843 $3,905,089 $4,002,716 $4,102,784
(164,261)(168,368)(172,577)(176,891)(181,313)(185,846)(190,492)(195,255)(200,136)(205,140)
$3,120,955 $3,198,979 $3,278,953 $3,360,927 $3,444,950 $3,531,074 $3,619,351 $3,709,834 $3,802,580 $3,897,645
1,368,910 1,416,822 1,466,411 1,517,735 1,570,856 1,625,836 1,682,740 1,741,636 1,802,593 1,865,684
8,533 8,704 8,878 9,055 9,236 9,421 9,609 9,802 9,998 10,198
111,398 115,297 119,332 123,509 127,832 132,306 136,936 141,729 146,690 151,824
0 0 0 0 0 0 0 0 0 0
6,612 6,810 7,015 7,225 7,442 7,665 7,895 8,132 8,376 8,627
7,053 7,300 7,555 7,820 8,093 8,377 8,670 8,973 9,287 9,613
59,245 61,319 63,465 65,686 67,985 70,365 72,827 75,376 78,015 80,745
$1,561,751 $1,616,251 $1,672,655 $1,731,030 $1,791,444 $1,853,969 $1,918,678 $1,985,648 $2,054,958 $2,126,690
$1,559,204 $1,582,727 $1,606,298 $1,629,897 $1,653,506 $1,677,105 $1,700,673 $1,724,186 $1,747,622 $1,770,955
(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)
(6,720)(6,921)(7,129)(7,343)(7,563)(7,790)(8,024)(8,264)(8,512)(8,768)
(13,439)(13,842)(14,258)(14,685)(15,126)(15,580)(16,047)(16,528)(17,024)(17,535)
$430,923 $453,842 $476,789 $499,747 $522,695 $545,613 $568,480 $591,271 $613,963 $636,530
$430,923 $453,842 $476,789 $499,747 $522,695 $545,613 $226,340 $0 $0 $0
3,496,975 3,950,817 4,427,606 4,927,352 5,450,047 5,995,660 6,222,000 6,222,000 6,222,000 6,222,000
$0 $0 $0 $0 $0 $0 $342,140 $591,271 $613,963 $636,530
$6,225,700 $6,369,370 $6,513,040 $6,656,710 $6,800,380 $6,944,050 $7,087,720 $7,060,320 $6,908,355 $6,745,043
4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000
143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670
0 0 0 0 0 0 (171,070)(295,636)(306,982)(318,265)
6,369,370 6,513,040 6,656,710 6,800,380 6,944,050 7,087,720 7,060,320 6,908,355 6,745,043 6,570,448
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years
per IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 0.00% of the residual receives based on
the size of the County loan.
Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30
$2,183,809 $2,238,404 $2,294,365 $2,351,724 $2,410,517 $2,470,780 $2,532,549 $2,595,863 $2,660,759 $2,727,278
1,992,295 2,042,103 2,093,155 2,145,484 2,199,121 2,254,099 2,310,452 2,368,213 2,427,419 2,488,104
29,249 29,981 30,730 31,498 32,286 33,093 33,920 34,768 35,637 36,528
$4,205,354 $4,310,488 $4,418,250 $4,528,706 $4,641,924 $4,757,972 $4,876,921 $4,998,844 $5,123,815 $5,251,911
(210,268)(215,525)(220,913)(226,436)(232,097)(237,899)(243,846)(249,943)(256,191)(262,596)
$3,995,086 $4,094,963 $4,197,337 $4,302,271 $4,409,827 $4,520,073 $4,633,075 $4,748,902 $4,867,624 $4,989,315
1,930,983 1,998,567 2,068,517 2,140,915 2,215,847 2,293,402 2,373,671 2,456,749 2,542,735 2,631,731
10,402 10,610 10,822 11,038 11,259 11,484 11,714 11,948 12,187 12,431
157,138 162,637 168,330 174,221 180,319 186,630 193,162 199,923 206,920 214,162
0 0 0 0 0 0 0 0 0 0
8,886 9,153 9,427 9,710 10,001 10,301 10,610 10,929 11,257 11,594
9,949 10,297 10,658 11,031 11,417 11,816 12,230 12,658 13,101 13,559
83,571 86,496 89,523 92,657 95,900 99,256 102,730 106,326 110,047 113,899
$2,200,928 $2,277,760 $2,357,277 $2,439,572 $2,524,743 $2,612,890 $2,704,117 $2,798,533 $2,896,247 $2,997,377
$1,794,158 $1,817,203 $1,840,060 $1,862,699 $1,885,084 $1,907,183 $1,928,958 $1,950,369 $1,971,377 $1,991,938
(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)
(9,031)(9,301)(9,581)(9,868)(10,164)(10,469)(10,783)(11,106)(11,440)(11,783)
(18,061)(18,603)(19,161)(19,736)(20,328)(20,938)(21,566)(22,213)(22,879)(23,566)
$658,944 $681,176 $703,196 $724,972 $746,470 $767,654 $788,486 $808,927 $828,936 $848,467
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000
$658,944 $681,176 $703,196 $724,972 $746,470 $767,654 $788,486 $808,927 $828,936 $848,467
$6,570,448 $6,384,646 $6,187,728 $5,979,800 $5,760,984 $5,531,419 $5,291,262 $5,040,688 $4,779,895 $4,508,824
4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,779,895 4,508,824
143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,397 135,265
(329,472)(340,588)(351,598)(362,486)(373,235)(383,827)(394,243)(404,464)(414,468)(424,233)
6,384,646 6,187,728 5,979,800 5,760,984 5,531,419 5,291,262 5,040,688 4,779,895 4,508,824 4,219,855
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years
per IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 0.00% of the residual receives based on
the size of the County loan.
Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 Year 40
$2,795,460 $2,865,347 $2,936,981 $3,010,405 $3,085,665 $3,162,807 $3,241,877 $3,322,924 $3,405,997 $3,491,147
2,550,307 2,614,064 2,679,416 2,746,401 2,815,061 2,885,438 2,957,574 3,031,513 3,107,301 3,184,983
37,442 38,378 39,337 40,320 41,329 42,362 43,421 44,506 45,619 46,759
$5,383,209 $5,517,789 $5,655,734 $5,797,127 $5,942,055 $6,090,606 $6,242,872 $6,398,943 $6,558,917 $6,722,890
(269,161)(275,890)(282,787)(289,857)(297,103)(304,531)(312,144)(319,948)(327,946)(336,145)
$5,114,048 $5,241,899 $5,372,946 $5,507,270 $5,644,952 $5,786,076 $5,930,728 $6,078,996 $6,230,971 $6,386,745
2,723,842 2,819,176 2,917,847 3,019,972 3,125,671 3,235,070 3,348,297 3,465,487 3,586,779 3,712,317
12,680 12,933 13,192 13,456 13,725 13,999 14,279 14,565 14,856 15,153
221,658 229,416 237,446 245,756 254,358 263,260 272,474 282,011 291,881 302,097
0 0 0 0 0 0 0 0 0 0
11,942 12,300 12,669 13,049 13,441 13,844 14,260 14,687 15,128 15,582
14,034 14,525 15,034 15,560 16,104 16,668 17,251 17,855 18,480 19,127
117,885 122,011 126,282 130,702 135,276 140,011 144,911 149,983 155,232 160,666
$3,102,041 $3,210,362 $3,322,470 $3,438,495 $3,558,575 $3,682,852 $3,811,473 $3,944,589 $4,082,357 $4,224,941
$2,012,007 $2,031,537 $2,050,477 $2,068,775 $2,086,377 $2,103,224 $2,119,255 $2,134,407 $2,148,613 $2,161,803
(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)(1,108,122)
(12,136)(12,500)(12,875)(13,262)(13,660)(14,069)(14,491)(14,926)(15,374)(15,835)
(24,273)(25,001)(25,751)(26,523)(27,319)(28,139)(28,983)(29,852)(30,748)(31,670)
$867,476 $885,913 $903,728 $920,868 $937,276 $952,893 $967,658 $981,506 $994,369 $1,006,176
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000
$867,476 $885,913 $903,728 $920,868 $937,276 $952,893 $967,658 $981,506 $994,369 $1,006,176
$4,219,855 $3,912,713 $3,587,138 $3,242,888 $2,879,740 $2,497,495 $2,095,973 $1,675,023 $1,234,521 $774,372
4,219,855 3,912,713 3,587,138 3,242,888 2,879,740 2,497,495 2,095,973 1,675,023 1,234,521 774,372
126,596 117,381 107,614 97,287 86,392 74,925 62,879 50,251 37,036 23,231
(433,738)(442,957)(451,864)(460,434)(468,638)(476,447)(483,829)(490,753)(497,185)(503,088)
3,912,713 3,587,138 3,242,888 2,879,740 2,497,495 2,095,973 1,675,023 1,234,521 774,372 294,515
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years
per IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 0.00% of the residual receives based on
the size of the County loan.
Year 41 Year 42 Year 43 Year 44 Year 45 Year 46 Year 47 Year 48 Year 49 Year 50
$3,578,426 $3,667,886 $3,759,584 $3,853,573 $3,949,912 $4,048,660 $4,149,877 $4,253,624 $4,359,964 $4,468,963
3,264,608 3,346,223 3,429,879 3,515,626 3,603,516 3,693,604 3,785,944 3,880,593 3,977,608 4,077,048
47,928 49,127 50,355 51,614 52,904 54,227 55,582 56,972 58,396 59,856
$6,890,962 $7,063,236 $7,239,817 $7,420,813 $7,606,333 $7,796,491 $7,991,403 $8,191,189 $8,395,968 $8,605,867
(344,549)(353,162)(361,991)(371,041)(380,317)(389,825)(399,571)(409,560)(419,799)(430,294)
$6,546,413 $6,710,074 $6,877,826 $7,049,771 $7,226,016 $7,406,666 $7,591,833 $7,781,628 $7,976,169 $8,175,573
3,842,248 3,976,726 4,115,912 4,259,969 4,409,068 4,563,385 4,723,104 4,888,412 5,059,507 5,236,589
15,456 15,765 16,081 16,402 16,730 17,065 17,406 17,754 18,109 18,472
312,671 323,614 334,941 346,664 358,797 371,355 384,352 397,804 411,728 426,138
0 0 0 0 0 0 0 0 0 0
16,049 16,531 17,027 17,537 18,064 18,605 19,164 19,739 20,331 20,941
19,796 20,489 21,206 21,949 22,717 23,512 24,335 25,186 26,068 26,980
166,289 172,109 178,133 184,367 190,820 197,499 204,412 211,566 218,971 226,635
$4,372,509 $4,525,235 $4,683,299 $4,846,888 $5,016,195 $5,191,421 $5,372,772 $5,560,462 $5,754,713 $5,955,755
$2,173,904 $2,184,839 $2,194,527 $2,202,883 $2,209,820 $2,215,245 $2,219,061 $2,221,167 $2,221,456 $2,219,819
(16,310)(16,799)(17,303)(17,823)(18,357)(18,908)(19,475)(20,059)(20,661)(21,281)
(32,620)(33,599)(34,607)(35,645)(36,715)(37,816)(38,950)(40,119)(41,323)(42,562)
$2,124,974 $2,134,440 $2,142,616 $2,149,415 $2,154,748 $2,158,521 $2,160,635 $2,160,988 $2,159,472 $2,155,975
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000
$2,124,974 $2,134,440 $2,142,616 $2,149,415 $2,154,748 $2,158,521 $2,160,635 $2,160,988 $2,159,472 $2,155,975
$294,515 $0 $0 $0 $0 $0 $0 $0 $0 $0
294,515 0 0 0 0 0 0 0 0 0
8,835 0 0 0 0 0 0 0 0 0
(303,350)0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024
APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1
PALM VILLAS AT MILLENNIUM - PHASE II
PALM DESERT, CALIFORNIA
I.Project Income
Projected Gross Income - Base Rents 102.5%/Year
Projected Gross Income - PBV Subsidy 102.5%/Year
Miscellaneous Income 102.5%/Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5%of PGI
Effective Gross Income
II.Operating Expenses
General Operating Expenses 103.5%/Year
Property Taxes & Assessments 102.0%/Year
Social Services 103.5%/Year
County Monitoring Fee 103.5%/Year
City Monitoring Fee 103.0%/Year
Bond Issuer Fee 103.5%/Year
Replacement Reserves 103.5%/Year
Total Operating Expenses
III.Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0%/Year
(Less) MGP Asset Management Fee 2 103.0%/Year
IV.Cash Flow Available for Distribution
V.Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI.Residual Receipts
VII.Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1
2
3
4
Based on Table 2B and typical escalations for affordable housing
LP fee is provided for in development costs as a capitalized fee.
While deferred fee is not projected to be paid off within 15 years
per IRS requiremetns; this issue can be managed by contributing a
portion of the deferred fee if it is still an issue once the funding
sources are secured.
The County will receive 0.00% of the residual receives based on
the size of the County loan.
Year 51 Year 52 Year 53 Year 54 Year 55
$4,580,687 $4,695,205 $4,812,585 $4,932,899 $5,056,222
4,178,974 4,283,449 4,390,535 4,500,298 4,612,806
61,352 62,886 64,458 66,070 67,722
$8,821,014 $9,041,539 $9,267,578 $9,499,267 $9,736,749
(441,051)(452,078)(463,380)(474,964)(486,838)
$8,379,963 $8,589,462 $8,804,198 $9,024,303 $9,249,911
5,419,870 5,609,565 5,805,900 6,009,107 6,219,425
18,841 19,218 19,602 19,994 20,394
441,053 456,490 472,467 489,003 506,118
0 0 0 0 0
21,569 22,216 22,882 23,569 24,276
27,925 28,902 29,914 30,961 32,044
234,567 242,777 251,274 260,069 269,171
$6,163,824 $6,379,168 $6,602,039 $6,832,702 $7,071,429
$2,216,138 $2,210,294 $2,202,159 $2,191,601 $2,178,482
(21,920)(22,577)(23,254)(23,952)(24,671)
(43,839)(45,154)(46,509)(47,904)(49,341)
$2,150,380 $2,142,563 $2,132,396 $2,119,745 $2,104,470
$0 $0 $0 $0 $0
6,222,000 6,222,000 6,222,000 6,222,000 6,222,000
$2,150,380 $2,142,563 $2,132,396 $2,119,745 $2,104,470
$0 $0 $0 $0 $0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
Prepared by: Keyser Marston Associates, Inc.
Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024