HomeMy WebLinkAboutORD 53811 Z&31
RECORDING REQUESTED BY, AND
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WHEN RECORDED MAIL TO:
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City Clerk's Office
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City of Palm Desert
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73-510 Fred Waring Drive
Palm Desert, CA 92260
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THE BENEFIT OF THE
CITY OF PALM DESERT
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NO FEE
6103 OF THE GOVT. CODE
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AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PALM DESERT, CALIFORNIA, APPROVING A DEVELOITINP
AGREEMENT RELATING TO CITY ASSISTANCE FOR A LOW
INCCME SENIOR HOUSING PROJECT.
CASE NO. DA 88-1
WHEREAS, the City Council of the City of Palm Desert, California, did on
the 12th day of May, 1988, hold a duly noticed public hearing to consider a
Senior Housing Development Agreement between the City of Palm Desert and Cable
and Rylee concerning city participation in a 60 unit low income senior housing
project;
WHEREAS, at said public hearing, upon hearing and considering all
testimony and arguments, if any, of all interested persons desiring to be
heard, said city council did find the following facts and reasons to exist to
justify a recommendation of approval:
1. The proposed agreement is consistent with the goals of providing
affordable senior citizen housing as described in the City of Palm
Desert Housing Element, Palma Village Specific Plan and the Senior
Housing Overlay.
2. The proposed project is an appropriate use of the Senior Housing
In -Lieu Fee Fund.
3. The proposed agreement provides the city with sufficient security in
the form of real property to protect the city's financial interest in
the project.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Palm
Desert, California, as follows:
1. That the above recitations are true and correct and constitute the
findings of the council in this case.
2. That DA 88-1 Exhibit "A" is hereby approved.
PASSED, APPROVED and ADOPTED at a regular meeting of the Palm Desert City
Council, held on this 26th day of My, 1988, by the following Vote, to wit:
AYES: CRITES
NOES: NONE
ABSENT: KELJLY
ABSTAIN: NONE
SNYDER, WILSON, BENSON
ATTEST:
SHEILA R. "LLICC,
City of Palm Desert, Cali;
/tm
AC��g• <..�
JEW M. BENSON, ayor
EACH TIOCUMENT TO WHICH THIS CERTIFICATE 18
ATTACHED. IS CERTIREO TO BE A FULL, TRUE AND
CORRECT COPY OF THE ORIGINAL ON FILE AND ON
RECORD IN MY OFFICE.
SHEILA R. GILLIGAN, City Clerk
,r City 01 O C•IHOrnia
u
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SENIOR HOUSING DEVELOPMENT AGREEMENT
BETWEEN CITY OF PALM DESERT AND CABLE & RYLEE
TABLE OF CONTENTS
1. Definitions.
2. Exhibits.
3. Description of Real Property.
4. Acquisition of Real Property.
5. Assignment.
6. Binding effect of Agreement.
7. Relationship of parties.
8. Agreements by Developer.
9. Agreements by City.
10. Changes in project.
11. Effect of transfer of Real Property to another
jurisdiction.
12. Hold Harmless.
13. Periodic Review of Compliance With Agreement.
14. Amendment or Cancellation of Agreement.
15. Enforcement.
16. Events of default.
17. Procedure upon default.
18. Damages upon modification, termination or
exercise of remedies by City.
19. Attorneys fees and costs.
20. Notices.
21. Rules of construction and miscellaneous terms.
22. Duration of Agreement.
23. Applicable Law.
24. Severability.
25. Authority.
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SENIOR HOUSING DEVELOPMENT AGREEMENT
BETWEEN CITY OF PALM DESERT AND CABLE & RYLEE
THIS AGREEMENT is entered into this 21st day of Decembec—,
1988, between CITY OF PALM DESERT, A California Municipal
Corporation (hereinafter "City"), and CABLE & RYLEE, A
California General Partnership (hereinafter "Developer").
RECITALS
This Agreement is predicated upon the following facts:
1. Government Code Sections 65864-65869.5 authorize the
City to enter into binding development agreements with persons
having legal or equitable interests in real property for the
development of such property;
2. Under Section 65865 the City has adopted rules and
regulations establishing procedures and requirements for
consideration of development agreements.
3. City intends to acquire the real property which is
the subject of this Agreement and thereafter convey the real
property to Developer subject to the terms and conditions of
this Development Agreement of Deverloper's compliance with and
in consideration of each and every term, covenant and
condition hereof.
4. Developer has requested that the City consider
entering into a development agreement and proceedings have
been taken in accordance with the City's rules and
regulations.
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5. The City Council of City has found that this
development agreement is consistent with the general plan and
The Palma Village specific plan; and
6. On May 26 , 1988, the City Council of
the City of Palm Desert adopted Ordinance No. 538
approving this development agreement with Developer and the
ordinance thereafter took effect on June 25 ,
iLI:i:�l
NOW, THEREFORE, the parties agree:
1. Definitions. In this Agreement, unless the context
otherwise requires
(a) "City" is the City of Palm Desert;
(b) "Project" is the sixty (60) unit lower income
senior citizen apartment project, approved by the City of Palm
Desert to be built by Developer;
(c) "Property Owner" means the person having a
legal or equitable interest in the real property as described
in paragraph 3 and includes the Property Owner's successor in
interest;
(d) "Real property" is the real property referred
to in paragraph 3;
(e) "Developer" is Cable and Rylee, A California
General Partnership.
(f) "Useful Life of the Project" is the greater of
thirty (30) years or the period of time which the Project
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remains habitable, with reasonable care and maintenance, as
determined by City.
2. Exhibits. The following documents are referred to
in this Agreement, attached hereto and made a part hereof by
this reference:
Exhibit
Description
Referred to in
Designation
Paragraph
"A"
Real property
4
"B"
Affordable Housing 8
Income and Rent
Schedule,
February 1987
"C"
Power of Sale
17
Provisions
"D"
Subordination
9
Agreement
3. Description
of real property.
The Real Property
which is the subject
of this Agreement is
described in Exhi-
bit "A".
4. Acquisition of Real Property. City represents
that it shall, subject to the conditions and limitations
provided hereinbelow, acquire full legal and equitable title
and possession to the Real Property and thereafter City
shall transfer the same to Developer subject to the terms
and conditions described hereinbelow and in consideration of
Developer's compliance with each and every term, condition
and convenant hereof.
5. Assignment. The rights of the Developer under
this Agreement may not be transferred or assigned unless the
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written consent of the City is first obtained.
6. Binding effect of Agreement. The burdens of this
Agreement bind and the benefits of the Agreement inure to
the successors in interest to the parties to it.
7. Relationship of parties. It is understood that
the contractual relationship between City and Developer is
such that Developer is an independent contractor and not the
agent of City.
8. Agreements by Developer. In consideration of the
agreements by City contained in this Agreement, Developer
agrees:
(a) Approvals from City. Developer shall apply
to City for approval of a conditional use permit/precise
plan to allow construction of a sixty unit senior housing
project located on the real property described on Exhibit
"A", generally described as follows:
Twelve (12) studio units (450 sq. ft.);
Twenty-four (24) one bedroom units (625 sq. ft.); and
Twenty-four (24) two bedroom units (880 sq. ft.).
With respect to the twenty-four (24) two bedroom units,
priority shall be given to two household shared units and
households with special medical needs required by two person
households.
Such application shall take place not later than sixty
(60) days from the effective date of the ordinance approving
this Development Agreement but shall not be required earlier
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than thirty (30) days after City's conveyance of the Real
Property to Developer.
(b) Affordable units. Developer agrees that all
of the units within the project shall be AFFORDABLE UNITS
for the Useful Life of the Project as follows:
(1) Developer shall reserve for rent one
hundred percent (100%) of the units for lower income house-
holds. Such units shall be referred to as "AFFORDABLE
UNITS" for purposes of this Agreement.
(2) As used herein, "lower income house-
holds" shall refer to families or individuals whose gross
income does not exceed eighty percent (80%) of the Riverside
County median income based on financial and demographic
information received from the United States Department of
Housing and Community Development (HUD) or its successor
agency. This information (effective February 1987) is con-
tained in Exhibit "B" and shall be up -dated automatically as
information is distributed by HUD. If, in the future, more
relevant data is made available by other officially recog-
nized agencies, Developer may request amendment of this
Agreement to include such data, which request shall be
considered by City in its sole discretion.
(3) The maximum initial rents charged for
the AFFORDABLE UNITS, during the first twelve (12) months
following completion of the Project, shall be determined as
follows: Total months expenses (including mortgage, taxes,
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management fees, insurance, utilities, pool maintenance,
landscape maintenance, general maintenance, miscellaneous
and contingency expenses, and excluding depreciation and the
cost of land) divided by total square feet of the units in
the Project, times the number of square feet in that unit
which rental is being computed.
Illustration: If the total monthly
expenses equal $23,166.00 and the total square feet of units
is 41,250, then rent equals $.55 per square foot.
Twelve (12) studio units $247 per month
(450 sq. ft.) per unit
Twenty-four (24) one bedroom units $357 per month
(625 sq. ft.) per unit
Twenty-four (24) two bedroom units $484 per month
(880 sq. ft.) per unit
(4) Developer or its assigned management
agent shall be responsible for determining the eligibility
of prospective tenants. Prior to opening the apartment
project, Developer shall submit for approval a plan to City
describing the procedure for determining and enforcing
eligibility requirements. This plan shall include annual
qualification by all eligible households and shall be
subject to review and approval by City.
(5) On each anniversary -date of the date of
completion of the Project, the rent for each unit shall be
adjusted in accordance with the Affordable Housing Income
and Rent Schedule precentage increase or decrease issued by
HUD relative to the initial rental term hereunder for each
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subsequent year hereof, but in no event shall the rent
charged hereunder be less than the maximum initial rents
charged hereinabove.
(6) Developer shall not discriminate on the
basis of race, color or creed, sex, or national origin.
(7) Developer or its successors in interest
shall reserve the AFFORDABLE UNITS as set forth in this
Agreement for the Useful Life of the Project and Developer
shall not sell or otherwise change the use of the Project
without prior written consent of City.
(c) Age limits. The minimum age for all Project
occupants shall be sixty-two (62) years.
(d) Time of approval. Developer shall obtain
approval of the conditional use permit and precise plan for
the project from City not later than one hundred eighty
(180) days from:
1) the effective date of the ordinance
approving this Development Agreement, or
2) the date of conveyance of the Real
Property to Developer, whichever occurs later.
(e) Prior to transfer by City of the Real
Property to Developer, Developer shall obtain a binding
construction loan commitment and a binding permanent
financing loan commitment subject to the terms and
conditions provided in the Subordination Agreement attached
hereto as Exhibit "D".
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(f) Time to commence construction. Developer
shall obtain building permits and commence construction of
the project not later than two hundred seventy (270) days
(nine months) from:
1) the effective date of the ordinance
approving this Development Agreement, or
2) the date of conveyance of the Real
Property by City to Developer, whichever is later.
Extensions to this time limit may be granted by
City if Developer demonstrates that Developer has made a
diligent good faith effort to proceed and that the delays
are temporary in nature and are beyond Developer's control.
(g) Completion of construction. Developer agrees
to diligently prosecute the completion of construction of
the Project and to complete construction within two hundred
seventy (270) days (nine months) after the actual date
construction begins.
(h) Progress reports until construction of
Proiect,is complete. Developer shall make reports of the
Project construction in such detail and at such time as City
reasonably requests.
(i) City to receive construction contracts and
documents. Developer shall furnish City with copies of the
Project construction contracts and documents.
(j) Disbursement of Construction Loan Funds.
Developer shall submit all proposed construction loan dis-
bursements to the City in advance of disbursement, which
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City shall approve or reject within five (5) working days of
submittal to City. Should City decide to disallow a
disbursement, City shall provide Developer and the
contruction lender and the construction lender's funding
agent with written notice of said decision within such five
(5) day period. This Notice shall specify the amount of the
proposed disbursement disallowed and shall state the reasons
therefor. Neither the construction lender or its funding
agent shall disburse amounts disallowed by City. Failure by
City to give written notice of its disapproval of a proposed
disbursement within five (5) working days of its receipt of
said proposed disbursement shall constitute approval of said
construction loan disbursement(s) submitted to City. The
purpose of this paragraph is to provide City reasonable
control over disbursement of construction loan funds.
9. Agreements by City. City desires to insure the
economic viability of the project, desires to make the pro-
ject affordable to lower income senior households, and
desires to implement City's general plan housing goals. In
consideration of these desires and in consideration of the
agreements set forth herein, the City agrees:
(a). Contribution. in the event City approves an
M.A.I. appraisal procured by it and an A.L.T.A. preliminary
title report of the Real Property, City shall take all
reasonable steps and use its best efforts to acquire said
Real Property. Such acquisition may be by purchase or, if
necessary, by eminent domain. Any agreement of City to
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acquire the Real Property by eminent domain is subject to
and contingent upon the adoption of a resolution of
necessity by the City of Palm Desert in accordance with
California eminent domain law. Should City, in its discre-
tion, not pass a resolution of necessity with respect to the
condemnation of the Real Property and, if City is unable to
purchase the Real Property, this Development Agreement shall
be of no further force or effect. Upon satisfaction of each
of the conditions precedent to the transfer of title and
possession to the Real Property provided in this Development
Agreement, City shall transfer said Real Property to
Developer subject to the terms of this Agreement, including
the Mortgage provisions hereof, which Development Agreement
containing said mortgage provisions or a memorandum thereof,
shall be recorded immediately after the recordation of the
deed transferring title.
The Mortgage provisions hereof shall be subject to
interest at the same rate and terms as the construction
loan, and interest shall accrue on the Mortgage from the
date of transfer of the Real Property from City to
Developer. Developer shall not be obligated to currently
pay the accrued interest on the Mortgage during the
construction phase of the Project so long as Developer is
not in breach of any of the terms and conditions of this
Development Agreement. In the event Developer breaches any
term or condition of this Development Agreement during the
construction phase of the Project, the entire balance of the
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Mortgage and all accrued interest shall immediately become
due and payable and subject to the Power of Sale Provisions
provided on Schedule "C" attached hereto. Upon satisfactory
completion of the construction phase of the Project and upon
the pay off of the construction loan and recordation of the
permanent financing on the Project, the outstanding balance
of the Mortgage herein and all accrued interest shall be
counted as principal and shall be amortized monthly at the
same initial interest rate of the permanent financing over a
period of thirty (30) years. Developer shall not be
obligated to pay any of the amortized monthly payments
during the thirty (30) year period so long as Developer is
not in breach of any of the terms and conditions of this
Development Agreement. in the event Developer breaches any
term or condition of this Development Agreement during the
thirty (30) year period, the remaining entire unamortized
balance of the Mortgage shall immediately become due and
payable and subject to the Power of Sale Provisions provided
in Schedule "C" attached hereto. Further, Developer shall
be obligated to pay any and all future amortized monthly
payments of the Mortgage. Notwithstanding the foregoing,
Developer agrees that Developer's obligation to perform all
of the terms and conditions of this Development Agreement
shall survive the construction phase, thirty (30) year
period herein, and satisfaction of the Mortgage. Developer
understands that compliance with the terms and conditions of
this Development Agreement are a material consideration to
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this Development Agreement and that money damages are
inadequate and insufficient to compensate City in the event
of a'breach by Developer of such terms and conditions and,
therefore, Developer hereby waives the defense, in a suit in
equity for specific performance, that legal remedies or
damages would be sufficient.
City's contribution to this Project, by
acquisition of the Real Property, shall not exceed the sum
Six Hundred Thousand Dollars ($600,000.00,). City reserves
the right, in its sole discretion, to terminate this
Development Agreement if City:
1) Does,not approve the appraisal or the
preliminary title report; or
2) Developer fails to assign all
Developer's rights to the Real Property to City; or
3) If City is unable to acquire the Real
Property for $600,000.00 or less.
Should City acquire the Real Property, then City
agrees, subject to the conditions set forth herein, to
convey said Real Property to Developer for the construction
of the affordable senior housing project described in this
Development Agreement. Conveyance of the Real Property to
Developer is contingent upon and shall be subject to the
following conditions:
1) City's receipt and approval of a bonafide
construction loan commitment to Developer satisfactory to
City and City's Attorney;
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2) City's receipt and approval of a
bonafide permanent loan commitment to Developer satisfactory
to City and City's Attorney;
3) City's receipt and approval of an
A.L.T.A. lender's policy of title insurance, to be paid for
by Developer, insuring to City the priority of this
Development Agreement senior to all liens and encumbrances
with respect to the Real Property, except for the lien of
general and special taxes which are not then due and
payable.
4) An assignment by Developer to City, in
the event of a default under this Development Agreement, of
all of Developer's rights to the Project, including all land
and improvements, all contracts, plans, sales reports,
architectural surveys and civil engineering documents.
City agrees that this Development Agreement may be
subordinated to any bonafide construction loan or permanent
take-out loan for the construction of the Project described
in this Development Agreement, in accordance with the
specific terms and conditions contained in the Subordination
Clause attached hereto as Exhibit "D" and made a part hereof
by this reference.
(b) Proceedings. City shall conduct, in a timely
manner, those proceedings necessary to consider Developer's
application for approval of a conditional use permit and
precise plan for the Project.
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(c) Certificate of Completion. Promptly after
completion of the Project, City shall provide Developer with
an instrument ("Certificate of Completion") so certifying.
The Certificate of Completion shall be the conclusive
determination that the obligation of Developer with respect
to construction of the Project has been met. The
Certificate of Completion shall be in such form as will
enable it to be recorded in the official records of the
County of Riverside.
10. Changes in Project. No change, modification,
revision or alteration may be made in the approved develop-
ment plan without review and approval by those agencies of
City approving the plan in the first instance. A change,
modification, revision or alteration in the approved
development plan is not effective until the parties amend
this Agreement to incorporate it.
11. Hold Harmless. Developer agrees to and shall hold
City, its officers, agents, employees and representatives
harmless from liability for damage or claims for damage for
personal injury including death and claims for property
damage which may arise from the direct or indirect
operations of Developer or those of his contractor, subcon-
tractor, agent, employee or other person acting on his
behalf which relate to the Project. Developer agrees to and
shall defend City and its officers, agents, employees and
representatives from actions for damages caused or alleged
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to have been caused by reason of Developer's activities in
connection with the Project.
This hold harmless agreement applies to all damages and
claims for damages suffered or alleged to have been suffered
by reason of the operations referred to in this paragraph,
regardless of whether or not City prepared, supplied, or
approved plans or specifications or both for the Project.
Developer further agrees to indemnify, hold harmless,
pay all costs and provide a defense for City in any action
challenging the validity of this Development Agreement.
12. Periodic Review of Compliance With Agreement.
(a) City Planning Commission shall review this
Development Agreement whenever substantial evidence exists
to indicate a possible breach of the terms of this
Agreement.
(b) At least once each year,, Developer shall
demonstrate good faith compliance with the terms of this
Development Agreement. Developer agrees to furnish such
evidence of good faith compliance as City, in the exercise
of its discretion, may require. City shall have the right
to audit the books and records of Developer or its manage-
ment company that apply to the Project at City's cost and
expense at least annually.
13. Amendment or Cancellation of Agreement. This
Development Agreement may be amended or cancelled in whole
or in part by mutual consent of the parties and in the
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manner provided for in Government Code, sections 65868,
65867 and 65867.5.
14. Enforcement. Unless amended or cancelled as
provided in paragraph 14, this Development Agreement is
enforceable by any party to it notwithstanding a change in
the applicable general or specific plan, zoning, subdivision
or building regulations adopted by City which alter or amend
the rules, regulations or policies governing permitted uses
of the land, density, design, improvement and construction
standards and specifications.
15. Events of default. Developer is in default under
this Development Agreement upon the happening of one or more
of the following events or conditions:
(a) if a warranty, representation or statement
made or furnished by Developer to City is false or proves to
have been false in any material respect when it was made;
(b) a finding and determination by City made
following a periodic review under the procedure provided for
in Governmeht Code, section 65865.1, that upon the basis of
substantial evidence Developer has not complied in good
faith with any of the terms or conditions of this Agreement.
creditors;
(c) Filing of a bankruptcy petition by Developer;
(d) Assignment for the benefit of Developer's
(e) Recordation of a notice of default with
respect to any construction loan or other loan for the
development of the housing project on the Real Property;
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(f) The occurrence of any event that would impair
City's rights with respect to the subject Real Property,
including but not limited to the filing of a suit to fore-
close a mechanic's lien;
(g) Developer's failure to maintain the Real
Property in substantially the same condition as it existed
on the date that City issued the Certificate of Occupancy
with respect to the Project or to restore promptly in good
and workmanlike manner any building which may be damages or
destroyed.
(h) To provide, maintain and deliver to City fire
insurance satisfactory to and with loss payable to City.
Such fire insurance shall provide that any amount collected
thereon will be applied by City upon any indebtedness
secured by the Real Property and in such order as City may
determined or, at the option of City, the entire amount so
collected or any part thereof may be released to Developer;
(i) Developer's failure to appear in and defend
and action or proceeding purporting to effect the rights or
powers of City under the terms of this Development
Agreement, and to pay all costs and expenses, including cost
of evidence of title and attorney's fees in a reasonable
sum, in any such action or proceeding in -which City may
appear, and in any suit brought by City to foreclose under
the terms of this Development Agreement;
(j) Developer's failure to pay the following:
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(i) All taxes and assessments affecting said
Real Property at least ten (10) days before delinquency;
(ii) When due, all encumbrances, charges and
liens, within interest, on said Real Property, or any part
thereof, which appear to be prior or superior to this
Development Agreement.
16. Procedure upon default. If, as a result of peri-
odic review, or other review of this Agreement, the Planning
Commission of City finds and determines, on the basis of
substantial evidence, that Developer has not complied with
the terms or conditions of this Agreement, the Planning
Commission of City shall recommend to the City Council of
City that this Development Agreement be modified,
terminated, or that the remedies set forth in this paragraph
be exercised by the City. If the City Council of City
concurs with the recommendation of the City's Planning
Commission, the City Council may modify this Development
Agreement, terminate this Development Agreement, or may
employ one or more of the remedies set forth in this
paragraph. Proceedings before the City Council shall be by
noticed public hearing -pursuant to Chapter 25.66 of the
Municipal Code of the City of Palm.Desert. In the
event of a default, City may employ one or more of the
following remedies, in its sole discretion:
1) City may revoke all previous approvals,
entitlements and permits granted by the City to Developer
with respect to this Project and the'subject Real Property.
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2) City may enter onto the Real Property
and take possession thereof, including all improvements on
said property.
3) City may foreclose on the Real Property
pursuant to those provisions found at Civil Code, section
2924, et seq., pursuant to the power of sale provisions set
forth on Exhibit "C" attached hereto and made a part hereof
by this reference.
4) City may complete construction of any
improvements on the Real Property and operate the completed
Project as is contemplated by this Development Agreement.
5) City may pursue all other legal or
equitable remedies City may have under California law or as
set forth in this Development Agreement and City shall be
entitled to specific performance and enforcement of each and
every term, condition and covenant set forth herein.
6) Upon any default by Developer as
described hereinabove, City may terminate all rights of
Developer, including any rights of cure or reinstatment,
except as the same would relate to a nonjudicial foreclosure
action by City pursuant to the Mortgage provisions hereof.
17. Damages upon cancellation, termination or fore-
closure of securitv by City. In no event shall Developer be
entitled.to any damages against the City upon modification,
termination of this Development Agreement or exercise by
City of its rights under this Development Agreement.
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18. Attorneys fees and costs. If legal action by
either party is brought because of breach of this Agreement
or to enforce a provision of this Agreement, the prevailing
party is entitled to reasonable attorneys fees and court
costs.
19. Notices. All notices required or provided for
under this Development Agreement shall be in writing and
delivered in person or sent by certified mail, postage
prepaid. Notice required to be given to City shall be
addressed as follows: City of Palm Desert, 73-510 Fred
Waring Drive, Palm Desert, California 92260.
Notices required to be given to Developer shall be
addressed as follows: Cable & Rylee, 73-720 Shadow Mountain
Drive, Palm Desert, California 92260.
A party may change the address by giving notice in
writing to the other party and thereafter notices shall be
addressed and transmitted to the new address.
20. Rules of construction and miscellaneous terms.
(a) The singular includes the plural; the mascu-
line gender includes the feminine; "shall" is mandatory,
"may" is permissive.
(b) If a part of this Agreement is held to be
invalid, the remainder of this Agreement is not affected.
(c) If there is more than one signer of this
Agreement their obligations are joint and several.
(d) The time limits 'set forth in this Agreement
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may be extended by mutual consent of the parties in accor-
dance with the procedures for adoption of an agreement.
21. Duration of Agreement. This Agreement shall
expire only upon total destruction of the apartment, project
which is the subject of this Development Agreement.
22. Applicable Law. This Agreement shall be construed
according to the laws of the State of California.
23. Severability. If any portion of this Agreement is
for any reason held to be unenforceable, such determination
shall not effect the validity of the remaining portions.
24. Authority. Each of the parties hereto covenant
and agrees that it has the legal capacity to enter into this
Agreement contained herein, that each agreement is binding
upon that party and that this Agreement is executed by a
duly authorized official acting in his official capacity.
IN WITNESS WHEREOF this Development Agreement has been
executed by the parties on the day and year first above
written.
Approved as to form:
DOUGL S S. PHILLIPS
Deputy City Attorney
CITY OF PALM DESERT
A Municipal Corporation
By: I iV✓k� v`/
1
Attester/j/`��'
-21-
OSP14/3
cr/6.1.88
112531
CABLE & RYLEE
A California
Partnershi
By : /✓
I-/
GenWal
(f
By:. 'i 24k�
STATE OF-CALIFORNIA )
COUNTY 'DF RIVERSIDE )
On this ,:-,�`/day of 1988, before me,
a.Notary Pu is in and for said State, personally appeared
Itnew- it -- proved to me on the
basis of satisfactory evidence to be the person who executed
the within instrument on behalf of CABLE & RYLEE, A
California General Partnership, and acknowledged to me that
CABLE & RYLEE, A California General Partnership, executed
the same.
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
On this '��ay of _J/�CG/Yl�.vti , 1988, before me, a
Notary Pyblic nand for said State, personally appeared
3�nl rn . . and
' �-e,..e, or proved to me on
the basis of satisfactory evidence, to be the Mayor of the
CITY OF PALM DESERT, and known to me to be the person who
executed the within instrument on behalf of said municipal
corporation and acknowledged to me that such municipal
corporation executed the same.
...........................................
OFFICIAL SEAL
L
MARY P. FRAZIER
NOTARY PUBLIC-CALIFORNIA
NTARY BOND FILED IN
R i V ERSI DE COUNTY _'ZL -
My Commission
%
Expires July 23, 1990
.............................................
1225131
STATE OF CALIFOR
COUNTY
A'
ACKNOWLEDGMENT—General—Wolulls Form 209CA—Rev 5-02
1902 WOLCOTTS. INC Ipnce class 0.21
lss.
On this day of f' 2,7- �� v in the year 19 f,,
before, the undersigned, Notary Public in and for said State, personally appeared
, persanaHy-kaeMnrleme•
(or proved to me on the basis of satisfactory evidence) to be the person Zwhose name!
subscribed to the within instrument, and acknowledged to me that She—::'
executed it.
WITNESS my hand and official al.
Notary Public in and for said State.
112531
ORDINANCE NO. 538
EXHIBIT "A"
Lot 14 of Palma Village Groves as per map recorded in Book 20,
page 51. of Maps, Records of Riverside County, California.
I
AFFORDABLE HOUSING
INCOME AND
RENT SCHEDULE
LO
LO
FEBRUARY, 1907
ti
ei
INCOME
MONTHLY
RENT
HOUSEHOLDS
MODERATE
MEDIAN
LOWER
VERY LOW
UNIT SIZE
MODERATE
MEDIAN
LOWER
VERY LOW
Studio
I
$24;167
$20,139
$16 050
$10,150
450 sq. ft.
$604
$503
$402
$252
minimum
1 Bedroom
2
27.631
23,026
18,450
11:600
600 sq. ft.
6.90
575.
461
286
m
minimum
m
e
2 Bdrm/I Bath
m
3
31,095
25,913
20.750
13.050
800 so. ft.
777
647
516
323
=
X
minimum
W
2 Bdrm/2 Bath
4
34,560
28.800
23,050
14.500
950 sq. ft.
863
719
576
359
minimum
3 Bdrm/2 Bath
5
36,734
30.612
24.500
15,650
1100 sq. ft.
921
765
612
387
minimum
3 Bdrm/2 Bath
6
38,910
3Z.425
25.950
16.800
1250 sq. ft.
973
810
648
417
minimum
DSP14/3 �12J` 31
cr/2.22.88
EXHIBIT "C"
POWER OF SALE PROVISIONS
Upon any default of the terms and conditions of the
Development Agreement, City may declare all sums secured
hereby immediately due and payable by recording a written
Notice of Default pursuant to the terms and provisions of
California Civil Code, sections.2924, et seq. After the
lapse of such time as may then be required by law following
the recordation of said Notice of Default, and Notice of
Sale having been given as then required by law, City,
without demand upon Developer, shall sell the Real Property
at the time and place fixed by it in said Notice of Sale,
either as a whole or in separate parcels, in such order as
City may determine, at public auction to the highest bidder
for cash in lawful money of the United States, payable at
time of sale. City may postpone sale of all or any portion
of said property by public announcement at such time and
place of sale and, from time to time thereafter, may
postpone such sale by public announcement at the time fixed
by the preceding postponement. City shall deliver to such
purchaser a 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
Developer or City, may purchase at such sale. After
deducting all costs, fees and expenses of City, in
connection with such sale, City shall apply the proceeds of
the sale to payment of the following: 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.
EXHIBIT "C"
112531
EXHIBIT "D"
SUBORDINATION AGREEMENT
The City hereby agrees to subordinate its rights under
the Development Agreement dated Mav 26 , 1988 by and
between City and Developer to the deeds of trust listed
hereinbelow subject to the following terms and conditions:
(1) A deed of trust, to be hereafter executed by
Developer or his or her successor in interest, covering the
property, to secure a loan (hereafter called "construction
loan") from a bank, life insurance company or correspondent
thereof, building and loan association, savings and loan
association, or other institutional lender for the purpose
of constructing improvements on the property, provided:
(a) The total amount of the construction loan
shall not exceed $ ;
(b) Any funds derived from the construction loan
shall be used only for the construction on
the property of an apartment building
containing at least sixty (60) units, and
such apartment building shall have a value,
as determined by the institutional lender
making the permanent or take-out loan on that
property, of at least 5
BMLf/22 -1-
112531
(c) The construction loan placed on the property
shall not exceed percent of the
anticipated value of the property after
completion of the improvements that the loan
was obtained to finance;
(d) No portion of the construction loan shall be
used to pay loan fees, interest, or other
charges not directly connected with the
construction of the apartment building;
(e) The maximum loan fees, interest, or other
loan charges that may be deducted from the
principal amount of the construction loan arm
as follows:
(i) Loan Fees: S
(ii) interest: $
(iii) Other Loan charges $
(f) The construction loan shall not bear
interest, exclusive of late charges,
penalties, or fees payable in case cf
default, greater than percent
per annum;
(g) The construction loan shall be payable in
equal monthly installments over a period o:
time of not less than months or me
than years;
BMLf/22 -2-
112531
(h) Additional payments may be made, without
penalty, on the principal and accrued
interest of the construction loan at any time
prior to maturity, provided that, there is no
prepayment penalty;
(i) The total payments due on the construction
loan shall not exceed $ per month;
(j) The proceeds -of the construction loan shall
be disbursed by the lender either through its
own offices or through a bonded disbursement
control agency only after inspection of the
work completed, on the property and
presentation of vouchers signed by the
Developer or, his or her successors in
interest for, the cost of work, labor, or
materials actually performed or used" in the
construction of the apartment building on the
property;
(k) Developer has delivered to city a binding
written commitment from an institutional
lender to make a permanent loan on the
property; and
(1) The remaining terms and provisions of any
construction loan shall be as required by the
lender.
BMLf/22 -3-
112531
(2) A deed of trust, to be hereafter executed b}
Developer or his or her successor in interest, on completion
of the apartment building on the property to secure a
permanent loan (hereafter called "take-out loan") from a
bank, life insurance company or correspondent thereof,
building and loan association, savings and loan association,
or other institutional lender, provided:
(a) The proceeds of the take-out loan shall be
used first to pay in full any construction
loans an the property, and any mechanics'
liens or other charges levied or leviable
against the property by Developer, or his or
her successors in interest;
(b) The total amount of the take-out loan shall
not exceed $
(c) The total amount of the take-out loan shall
not exceed percent of the value, as
determined by the lender thereof, of the
property as improved by Developer or his or
her successor in interest;
(d) The maximum loan fees, interest, or other
loan charges that may be deducted from the
principal amount of the take-out loan are as
followsr
J
BMLf/22
-4-
f
-12531
BMLf/22
(i) Loan Fees: $
(ii) interest: $
(iii) Other Loan charges: $
(e) The take-out loan shall not bear interest,
exclusive of late charges, penalties, or fees
payable in case of default, greater than
percent per annum;
(f) The take-out loan shall be payable in equal
monthly installments over a period of time of
not less than months or more than
years:
(g) Additional payments may be made, without
penalty, on the principal and accrued
interest of the take-out loan at any time
prior to maturity;
(h) The total payments due on the take-out loan
shall not exceed $ per month;
(i) The proceeds of the take-out loan shall be
disbursed by the lender either through its
own offices or through a bonded disbursement
control agency; and
(j) The remaining terms and provisions of the
take-out loan shall be as required by the
lender.
-5-
AN ORDINANCE OF THE CITY COUNCIL OF THE CIIi' OF
PALM DESERT, CALIFORNIA, APPROVING A DEVELOYMQNT
AGREEMENT RELATING TO CITY ASSISTANCE FOR A LOW
INCCME SENIOR HOUSING PROJECT.
CASE NO. DA 88-1
WHEREAS, the City Council of the City of Palm Desert, California, did on
the 12th day of May, 1988, hold a duly noticed public hearing to consider a
Senior Housing Development Agreement between the City of Palm Desert and Cable
and Rylee concerning city participation in a 60 unit low income senior housing
project;
WHEREAS, at said public hearing, upon hearing and considering all
testimony and arguments, if any, of all interested persons desiring to be
heard, said city council did find the following facts and reasons to exist to
justify a recommendation of approval:
1. The proposed agreement is consistent with the goals of providing
affordable senior citizen housing as described in the City of Palm
Desert Housing Element, Palma Village Specific Plan and the Senior
Housing Overlay.
2. The proposed project is an appropriate use of the Senior Housing
In -Lieu Fee Fund.
3. The proposed agreement provides the city with sufficient security in
the form of real property to protect the city's financial interest in
the project.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Palm
Desert, California, as follows:
1. That the above recitations are true and correct and constitute the
findings of the council in this case.
2. That DA 88-1 Exhibit "A" is hereby approved.
PASSED, APPROVED and ADOPTED at a regular meeting of the Palm Desert City
Council, held on this 26th day of May, 1988, by the following vote, to wit:
AYES: CRITES,
NOES: NONE
ABSENT: KELJ Y
ABSTAIN: NONE
ATTEST:
SNYDER, WILSON, BENSON
SHEILA R. GILLIGAN, City
City of Palm Desert, Cal
/tm
C
rnia
EM. BENISON, Mayor
RESCINDED I
BY ORDINANCE #.... lx_�_�-------- --
[DATED: __� �_�.�y_� .................
SENIOR HOUSING DEVELOPMENT AGREEMENT
BETWEEN CITY OF PALM DESERT AND CABLE & RYLEE
TABLE OF CONTENTS
1. Definitions.
2. Exhibits.
3. Description of Real Property.
4. Acquisition of Real Property.
5. Assignment.
6. Binding effect of Agreement.
7. Relationship of parties.
8. Agreements by Developer.
9. Agreements by City.
10. Changes in project.
11. Effect of transfer of Real Property to another
jurisdiction.
12. Hold Harmless.
13. Periodic Review of Compliance With Agreement.
14. Amendment or Cancellation of Agreement.
15. Enforcement.
16. Events of default.
17. Procedure upon default.
18. Damages upon modification, termination or
exercise of remedies by City.
19. Attorneys fees and costs.
20. Notices.
21. Rules of construction and miscellaneous terms.
22. Duration of Agreement.
23. Applicable Law.
24. Severability.
25. Authority.
a
SENIOR HOUSING DEVELOPMENT AGREEMENT
BETWEEN CITY OF PALM DESERT AND CABLE & RYLEE
THIS AGREEMENT is entered into this 21st day of December ,
1988, between CITY OF PALM DESERT, A California Municipal
Corporation (hereinafter "City"), and CABLE & RYLEE, A
California General Partnership (hereinafter "Developer").
RECITALS
This Agreement is predicated upon the following facts:
1. Government Code Sections 65864-65869.5 authorize the
City to enter into binding development agreements with persons
having legal or equitable interests in real property for the
development of such property;
2. Under Section 65865 the City has adopted rules and
regulations establishing procedures and requirements for
consideration of development agreements.
3. City intends to acquire the real property which is
the subject of this Agreement and thereafter convey the real
property to Developer subject to the terms and conditions of
this Development Agreement of Deverloper's compliance with and
in consideration of each and every term, covenant and
condition hereof.
4. Developer has requested that the City consider
entering into a development agreement and proceedings have
been taken in accordance with the City's rules and
regulations.
DSP14/3
cr/6.1.88
5. The City Council of City has found that this
development agreement is consistent with the general plan and
The Palma Village specific plan; and
6. On May 26 , 1988, the City Council of
the City of Palm Desert adopted Ordinance No. 538
approving this development agreement with Developer and the
ordinance thereafter took effect on June 25
1988.
NOW, THEREFORE, the parties agree:
1. Definitions. In this Agreement, unless the context
otherwise requires
(a) "City" is the City of Palm Desert; ■
(b) "Project" is the sixty (60) unit lower income
senior citizen apartment project, approved by the City of Palm
Desert to be built by Developer;
(c) "Property Owner" means the person having a
legal or equitable interest in the real property as described
in paragraph 3 and includes the Property Owner's successor in
interest;
(d) "Real property" is the real property referred
to in paragraph 3;
(e) "Developer" is Cable and Rylee, A California
General Partnership.
(f) "Useful Life of the Project" is the greater of
thirty (30) years or the period of time which the Project
-2-
DSP14/3
cr/6.1.88
remains habitable, with reasonable care and maintenance, as
determined by City.
2. Exhibits. The following documents are referred to
in this Agreement, attached hereto and made a part hereof by
this reference:
Exhibit Description
Designation
"A" Real property
"Bit Affordable Housing
Income and Rent
Schedule,
February 1987
licit Power of Sale
Provisions
"D" Subordination
Agreement
Referred to in
Paragraph
4
3
17
9
3. Description of real property. The Real Property
which is the subject of this Agreement is described in Exhi-
bit "A".
4. Acquisition of Real Property. City represents
that it shall, subject to the conditions and limitations
provided hereinbelow, acquire full legal and equitable title
and possession to the Real Property and thereafter City
shall transfer the same to Developer subject to the terms
and conditions described hereinbelow and in consideration of
Developer's compliance with each and every term, condition
and convenant hereof.
5. Assignment. The rights of the Developer under
this Agreement may not be transferred or assigned unless the
-3-
DSP14/3
cr/6.1.88
written consent of the City is first obtained.
6. Binding effect of Agreement. The burdens of this
Agreement bind and the benefits of the Agreement inure to
the successors in interest to the parties to it.
7. Relationship of parties. It is understood that
the contractual relationship between City and Developer is
such that Developer is an independent contractor and not the
agent of City.
8. Agreements by Developer. In consideration of the
agreements by City contained in this Agreement, Developer
agrees:
(a) Approvals from City. Developer shall apply
to City for approval of a conditional use permit/precise a
plan to allow construction of a sixty unit senior housing
project located on the real property described on Exhibit
"A", generally described as follows:
Twelve (12) studio units (450 sq. ft.);
Twenty-four (24) one bedroom units (625 sq. ft.); and
Twenty-four (24) two bedroom units (880 sq. ft.).
With respect to the twenty-four (24) two bedroom units,
priority shall be given to two household shared units and
households with special medical needs required by two person
households.
Such application shall take place not later than sixty
(60) days from the effective date of the ordinance approving
this Development Agreement but shall not be required earlier
-4-
DSP14/3
cr/6.1.88
than thirty (30) days after City's conveyance of the Real
Property to Developer.
(b) Affordable units. Developer agrees that all
of the units within the project shall be AFFORDABLE UNITS
for the Useful Life of the Project as follows:
(1) Developer shall reserve for rent one
hundred percent (100%) of the units for lower income house-
holds. Such units shall be referred to as "AFFORDABLE
UNITS" for purposes of this Agreement.
(2) As used herein, "lower income house-
holds" shall refer to families or individuals whose gross
income does not exceed eighty percent (80%) of the Riverside
County median income based on financial and demographic
information received from the United States Department of
Housing and Community Development (HUD) or its successor
agency. This information (effective February 1987) is con-
tained in Exhibit "B" and shall be up -dated automatically as
information is distributed by HUD. If, in the future, more
relevant data is made available by other officially recog-
nized agencies, Developer may request amendment of this
Agreement to include such data, which request shall be
considered by City in its sole discretion.
(3) The maximum initial rents charged for
the AFFORDABLE UNITS, during the first twelve (12) months
following completion of the Project, shall be determined as
follows: Total months expenses (including mortgage, taxes,
-5-
DSP14/3
cr/6.1.88
management fees, insurance, utilities, pool maintenance,
landscape maintenance, general maintenance, miscellaneous
and contingency expenses, and excluding depreciation and the
cost of land) divided by total square feet of the units in
the Project, times the number of square feet in that unit
which rental is being computed.
Illustration: If the total monthly
expenses equal $23,166.00 and the total square feet of units
is 41,250, then rent equals $.55 per square foot.
Twelve (12) studio units $247 per month
(450 sq. ft.) per unit
Twenty-four (24) one bedroom units $357 per month
(625 sq. ft.) per unit
Twenty-four (24) two bedroom units $484 per month
(880 sq. ft.) per unit
(4) Developer or its assigned management
agent shall be responsible for determining the eligibility
of prospective tenants. Prior to opening the apartment
project, Developer shall submit for approval a plan to City
describing the procedure for determining and enforcing
eligibility requirements. This plan shall include annual
qualification by all eligible households and shall be
subject to review and approval by City.
(5) On each anniversary date of the date of
completion of the Project, the rent for each unit shall be
adjusted in accordance with the Affordable Housing Income
and Rent Schedule precentage increase or decrease issued by
HUD relative to the initial rental term hereunder for each
DSP14/3
cr/6.1.88
subsequent year hereof, but in no event shall the rent
charged hereunder be less than the maximum initial rents
charged hereinabove.
(6) Developer shall not discriminate on the
basis of race, color or creed, sex, or national origin.
(7) Developer or its successors in interest
shall reserve the AFFORDABLE UNITS as set forth in this
Agreement for the Useful Life of the Project and Developer
shall not sell or otherwise change the use of the Project
without prior written consent of City.
(c) Age limits. The minimum age for all Project
occupants shall be sixty-two (62) years.
(d) Time of approval. Developer shall obtain
approval of the conditional use permit and precise plan for
the project from City not later than one hundred eighty
(180) days from:
1) the effective date of the ordinance
approving this Development Agreement, or
2) the date of conveyance of the Real
Property to Developer, whichever occurs later.
(e) Prior to transfer by City of the Real
Property to Developer, Developer shall obtain a binding
construction loan commitment and a binding permanent
financing loan commitment subject to the terms and
conditions provided in the Subordination Agreement attached
hereto as Exhibit "D".
-7-
DSP14/3
cr/6.1.88
(f) Time to commence construction. Developer
shall obtain building permits and commence construction of
the project not later than two hundred seventy (270) days
(nine months) from:
1) the effective date of the ordinance
approving this Development Agreement, or
2) the date of conveyance of the Real
Property by City to Developer, whichever is later.
Extensions to this time limit may be granted by
City if Developer demonstrates that Developer has made a
diligent good faith effort to proceed and that the delays
are temporary in nature and are beyond Developer's control.
(g) Completion of construction. Developer agrees t
to diligently prosecute the completion of construction of
the Project and to complete construction within two hundred
seventy (270) days (nine months) after the actual date
construction begins.
(h) Progress reports until construction of
Project is complete. Developer shall make reports of the
Project construction in such detail and at such time as City
reasonably requests.
(i) City to receive construction contracts and
documents. Developer shall furnish City with copies of the
Project construction contracts and documents.
(j)
Disbursement of Construction Loan Funds.
Developer shall submit all proposed construction loan dis-
bursements to the City in advance of disbursement, which
MM
DSP14/3
cr/6.1.88
City shall approve or reject within five (5) working days of
submittal to City. Should City decide to disallow a
disbursement, City shall provide Developer and the
contruction lender and the construction lender's funding
agent with written notice of said decision within such five
(5) day period. This Notice shall specify the amount of the
proposed disbursement disallowed and shall state the reasons
therefor. Neither the construction lender or its funding
agent shall disburse amounts disallowed by City. Failure by
City to give written notice of its disapproval of a proposed
disbursement within five (5) working days of its receipt of
said proposed disbursement shall constitute approval of said
construction loan disbursement(s) submitted to City. The
purpose of this paragraph is to provide City reasonable
control over disbursement of construction loan funds.
9. Agreements by City. City desires to insure the
economic viability of the project, desires to make the pro-
ject affordable to lower income senior households, and
desires to implement City's general plan housing goals. In
consideration of these desires and in consideration of the
agreements set forth herein, the City agrees:
(a) Contribution. In the event City approves an
M.A.I. appraisal procured by it and an A.L.T.A. preliminary
title report of the Real Property, City shall take all
reasonable steps and use its best efforts to acquire said
Real Property. Such acquisition may be by purchase or, if
necessary, by eminent domain. Any agreement of City to
DSP14/3
cr/6.1.88
acquire the Real Property by eminent domain is subject to
and contingent upon the adoption of a resolution of
necessity by the City of Palm Desert in accordance with
California eminent domain law. Should City, in its discre-
tion, not pass a resolution of necessity with respect to the
condemnation of the Real Property and, if City is unable to
purchase the Real Property, this Development Agreement shall
be of no further force or effect. Upon satisfaction of each
of the conditions precedent to the transfer of title and
possession to the Real Property provided in this Development
Agreement, City shall transfer said Real Property to
Developer subject to the terms of this Agreement, including
the Mortgage provisions hereof, which Development Agreement
containing said mortgage provisions or a memorandum thereof,
shall be recorded immediately after the recordation of the
deed transferring title.
The Mortgage provisions hereof shall be subject to
interest at the same rate and terms as the construction
loan, and interest shall accrue on the Mortgage from the
date of transfer of the Real Property from City to
Developer. Developer shall not be obligated to currently
pay the accrued interest on the Mortgage during the
construction phase of the Project so long as Developer is
not in breach of any of the terms and conditions of this
Development Agreement. In the event Developer breaches any
term or condition of this Development Agreement during the
construction phase of the Project, the entire balance of the
-10-
DSP14/3
cr/6.1.88
Mortgage and all accrued interest shall immediately become
due and payable and subject to the Power of Sale Provisions
provided on Schedule "C" attached hereto. Upon satisfactory
completion of the construction phase of the Project and upon
the pay off of the construction loan and recordation of the
permanent financing on the Project, the outstanding balance
of the Mortgage herein and all accrued interest shall be
counted as principal and shall be amortized monthly at the
same initial interest rate of the permanent financing over a
period of thirty (30) years. Developer shall not be
obligated to pay any of the amortized monthly payments
during the thirty (30) year period so long as Developer is
not in breach of any of the terms and conditions of this
Development Agreement. In the event Developer breaches any
term or condition of this Development Agreement during the
thirty (30) year period, the remaining entire'unamortized
balance of the Mortgage shall immediately become due and
payable and subject to the Power of Sale Provisions provided
in Schedule "C" attached hereto. Further, Developer shall
be obligated to pay any and all future amortized monthly
payments o.f the Mortgage. Notwithstanding the foregoing,
Developer agrees that Developer's obligation to perform all
of the terms and conditions of this Development Agreement
shall survive the construction phase, thirty (30) year
period herein, and satisfaction of the Mortgage. Developer
understands that compliance with the terms and conditions of
this Development Agreement are a material consideration to
-11-
DSP14/3
cr/6.1.88
this Development Agreement and that money damages are
inadequate and insufficient to compensate City in the event
of a breach by Developer of such terms and conditions and,
therefore, Developer hereby waives the defense, in a suit in
equity for specific performance, that legal remedies or
damages would be sufficient.
City's contribution to this Project, by
acquisition of the Real Property, shall not exceed the sum
Six Hundred Thousand Dollars ($600,000.00). City reserves
the right, in its sole discretion, to terminate this
Development Agreement if City:
1) Does not approve the appraisal or the
preliminary title report; or
2) Developer fails to assign all
Developer's rights to the Real Property to City; or
3) If City is unable to acquire the Real
Property for $600,000.00 or less.
Should City acquire the Real Property, then City
agrees, subject to the conditions set forth herein, to
convey said Real Property to Developer for the construction
of the affordable senior housing project described in this
Development Agreement. Conveyance of the Real Property to
Developer is contingent upon and shall be subject to the
following conditions:
1) City's receipt and approval of a bonafide
construction loan commitment to Developer satisfactory to
City and City's Attorney;
9
-12-
DSP14/3
cr/6.1.88
2) City's receipt and approval of a
bonafide permanent loan commitment to Developer satisfactory
to City and City's Attorney;
3) City's receipt and approval of an
A.L.T.A. lender's policy of title insurance, to be paid for
by Developer, insuring to City the priority of this
Development Agreement senior to all liens and encumbrances
with respect to the Real Property, except for the lien of
general and special taxes which are not then due and
payable.
4) An assignment by Developer to City, in
the event of a default under this Development Agreement, of
all of Developer's rights to the Project, including all land
and improvements, all contracts, plans, sales reports,
architectural surveys and civil engineering documents.
City agrees that this Development Agreement may be
subordinated to any bonafide construction loan or permanent
take-out loan for the construction of the Project described
in this Development Agreement, in accordance with the
specific terms and conditions contained in the Subordination
Clause attached hereto as Exhibit "D" and made a part hereof
by this reference.
(b) Proceedings. City shall conduct, in a timely
manner, those proceedings necessary to consider Developer's
application for approval of a conditional use permit and
precise plan for the Project.
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DSP14/3
cr/6.1.88
(c) Certificate of Completion. Promptly after
completion of the Project, City shall provide Developer with
an instrument ("Certificate of Completion") so certifying.
The Certificate of Completion shall be the conclusive
determination that the obligation of Developer with respect
to construction of the Project has been met. The
Certificate of Completion shall be in such form as will
enable it to be recorded in the official records of the
County of Riverside.
10. Changes in Project. No change, modification,
revision or alteration may be made in the approved develop-
ment plan without review and approval by those agencies of
City approving the plan in the first instance. A change, ■
modification, revision or alteration in the approved
development plan is not effective until the parties amend
this Agreement to incorporate it.
11. Hold Harmless. Developer agrees to and shall hold
City, its officers, agents, employees and representatives
harmless from liability for damage or claims for damage for
personal injury including death and claims for property
damage which may arise from the direct or indirect
operations of Developer or those of his contractor, subcon-
tractor, agent, employee or other person acting on his
behalf which relate to the Project. Developer agrees to and
shall defend City and its officers, agents, employees and
representatives from actions for damages caused or alleged
-14-
DSP14/3
cr/6.1.88
to have been caused by reason of Developer's activities in
connection with the Project.
This hold harmless agreement applies to all damages and
claims for damages suffered or alleged to have been suffered
by reason of the operations referred to in this paragraph,
regardless of whether or not City prepared, supplied, or
approved plans or specifications or both for the Project.
Developer further agrees to indemnify, hold harmless,
pay all costs and provide a defense for City in any action
challenging the validity of this Development Agreement.
12. Periodic Review of Compliance With Agreement.
(a) City Planning Commission shall review this
Development Agreement whenever substantial evidence exists
to indicate a possible breach of the terms of this
Agreement.
(b) At least once each year, Developer shall
demonstrate good faith compliance with the terms of this
Development Agreement. Developer agrees to furnish such
evidence of good faith compliance as City, in the exercise
of its discretion, may require. City shall have the right
to audit the books and records of Developer or its manage-
ment company that apply to the Project at City's cost and
expense at least annually.
13. Amendment or Cancellation of Agreement. This
Development Agreement may be amended or cancelled in whole
or in part by mutual consent of the parties and in the
-15-
DSP14/3
cr/6.1.88
manner provided for in Government Code, sections 65868,
65867 and 65867.5.
14. Enforcement. Unless amended or cancelled as
provided in paragraph 14, this Development Agreement is
enforceable by any party to it notwithstanding a change in
the applicable general or specific plan, zoning, subdivision
or building regulations adopted by City which alter or amend
the rules, regulations or policies governing permitted uses
of the land, density, design, improvement and construction
standards and specifications.
15. Events of default. Developer is in default under
this Development Agreement upon the happening of one or more
of the following events or conditions:
(a) if a warranty, representation or statement
made or furnished by Developer to City is false or proves to
have been false in any material respect when it was made;
(b) a finding and determination by City made
following a periodic review under the procedure provided for
in Government Code, section 65865.1, that upon the basis of
substantial evidence Developer has not complied in good
faith with any of the terms or conditions of this Agreement.
creditors;
(c) Filing of a bankruptcy petition by Developer;
(d) Assignment for the benefit of Developer's
(e) Recordation of a notice of default with
respect to any construction loan or other loan for the
development of the housing project on the Real Property;
a
-16-
DSP14/3
cr/6.1.88
(f) The occurrence of any event that would impair
City's rights with respect to the subject Real Property,
including but not limited to the filing of a suit to fore-
close a mechanic's lien;
(g) Developer's failure to maintain the Real
Property in substantially the same condition as it existed
on the date that City issued the Certificate of Occupancy
with respect to the Project or to restore promptly in good
and workmanlike manner any building which may be damages or
destroyed.
(h) To provide, maintain and deliver to City fire
insurance satisfactory to and with loss payable to City.
Such fire insurance shall provide that any amount collected
thereon will be applied by City upon any indebtedness
secured by the Real Property and in such order as City may
determined or, at the option of City, the entire amount so
collected or any part thereof may be released to Developer;
(i) Developer's failure to appear in and defend
and action or proceeding purporting to effect the rights or
powers of City under the terms of this Development
Agreement, and to pay all costs and expenses, including cost
of evidence of title and attorney's fees in a reasonable
sum, in any such action or proceeding in which City may
appear, and in any suit brought by City to foreclose under
the terms of this Development Agreement;
(j) Developer's failure to pay the following:
-17-
DSP14/3
cr/6.1.88
(i) All taxes and assessments affecting said
Real Property at least ten (10) days before delinquency;
(ii) When due, all encumbrances, charges and
liens, within interest, on said Real Property, or any part
thereof, which appear to be prior or superior to this
Development Agreement.
16. Procedure upon default. If, as a result of peri-
odic review, or other review of this Agreement, the Planning
Commission of City finds and determines, on the basis of
substantial evidence, that Developer has not complied with
the terms or conditions of this Agreement, the Planning
Commission of City shall recommend to the City Council of
City that this Development Agreement be modified, ■
terminated, or that the remedies set forth in this paragraph
be exercised by the City. If the City Council of City
concurs with the recommendation of the City's Planning
Commission, the City Council may modify this Development
Agreement, terminate this Development Agreement, or may
employ one or more of the remedies set forth in this
paragraph. Proceedings before the City Council shall be by
noticed public hearing pursuant to Chapter 25.86 of the
Municipal Code of the City of Palm Desert. In the
event of a default, City may employ one or more of the
following remedies, in its sole discretion:
1) City may revoke all previous approvals,
entitlements and permits granted by the City to Developer
with respect to this Project and the subject Real Property.
-18-
DSP14/3
cr/6.1.88
2) City may enter onto the Real Property
and take possession thereof, including all improvements on
said property.
3) City may foreclose on the Real Property
pursuant to those provisions found at Civil Code, section
2924, et seq., pursuant to the power of sale provisions set
forth on Exhibit "C" attached hereto and made a part hereof
by this reference.
4) City may complete construction of any
improvements on the Real Property and operate the completed
Project as is contemplated by this Development Agreement.
5) City may pursue all other legal or
equitable remedies City may have under California law or as
set forth in this Development Agreement and City shall be
entitled to specific performance and enforcement of each and
every term, condition and covenant set forth herein.
6) Upon any default by Developer as
described hereinabove, City may terminate all rights of
Developer, including any rights of cure or reinstatment,
except as the same would relate to a nonjudicial foreclosure
action by City pursuant to the Mortgage provisions hereof.
17. Damages upon cancellation, termination or fore-
closure of security by City. In no event shall Developer be
entitled to any damages against the City upon modification,
termination of this Development Agreement or exercise by
City of its rights under this Development Agreement.
-19-
DSP14/3
cr/6.1.88
18. Attorneys fees and costs. If legal action by
either party is brought because of breach of this Agreement
or to enforce a provision of this Agreement, the prevailing
party is entitled to reasonable attorneys fees and court
costs.
19. Notices. All notices required or provided for
under this Development Agreement shall be in writing and
delivered in person or sent by certified mail, postage
prepaid. Notice required to be given to City shall be
addressed as follows: City of Palm Desert, 73-510 Fred
Waring Drive, Palm Desert, California 92260.
Notices required to be given to Developer shall be
addressed as
follows: Cable &
Rylee, 73-720 Shadow Mountain
Drive, Palm
Desert, California
92260.
A party may change the address by giving notice in
writing to the other party and thereafter notices shall be
addressed and transmitted to the new address.
20. Rules of construction and miscellaneous terms.
(a) The singular includes the plural; the mascu-
line gender includes the feminine; "shall" is mandatory,
"may" is permissive.
(b) If a part of this Agreement is held to be
invalid, the remainder of this Agreement is not affected.
(c) If there is more than one signer of this
Agreement their obligations are joint and several.
(d) The time limits set forth in this Agreement
-20-
DSP14/3
cr/6.1.88
may be extended by mutual consent of the parties in accor-
dance with the procedures for adoption of an agreement.
21. Duration of Agreement. This Agreement shall
expire only upon total destruction of the apartment project
which is the subject of this Development Agreement.
22. Applicable Law. This Agreement shall be construed
according to the laws of the State of California.
23. Severability. If any portion of this Agreement is
for any reason held to be unenforceable, such determination
shall not effect the validity of the remaining portions.
24. Authority. Each of the parties hereto covenant
and agrees that it has the legal capacity to enter into this
Agreement contained herein, that each agreement is binding
upon that party and that this Agreement is executed by a
duly authorized official acting in his official capacity.
IN WITNESS WHEREOF this Development Agreement has been
executed by the parties on the day and year first above
written.
Approved as to form:
DOUGL S S. PHILLIPS
Deputy City Attorney
a
CITY OF PALM DESERT
A Municipal Corporation
By:
1
Attest.
-21-
DSP14/3
cr/6.1.88
CABLE & RYLEE
A California General
Partnershi�
By:
By:
c-
STATE OF CALIFORNIA )
COUNT'i OF RIVERSIDE )
�J�
On this,:��day of SSGG�� ��yx�-:� 1988, before me,
a -Notary Pu0j.1c in and for said State, personally appeared
n-,e• `- - proved to me on the
basis of sa isfactory evidence to be the person who executed
the within instrument on behalf of CABLE & RYLEE, A
California General Partnership, and acknowledged to me that
CABLE & RYLEE, A California General Partnership, executed
the same. r_
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE )
On this '__�ay of ��C i✓/nQ£/S 1988, before me, a
Notary P4blic },n_ and for said State, personally appeared
-T n1 N) . 16�4Q5C4 , or proved to me on
the basis of satisfactory evidence, to be the Mayor of the
CITY OF PALM DESERT, and known to me to be the person who
executed the within instrument on behalf of said municipal
corporation and acknowledged to me that such municipal
corporation executed the same.
..........................................%
_ OFFICIAL SEAL
MARY P. FRAZIER
• L ��' �>
NOTAF'f PUBLIC-CALIFORNIA
a-r�`• N;,7ARY BOND FILED IN
R'VERSIDE COUNTY
: My Comrrssicn Expires July 23, 1990 -22-
ti....................................... .... :
STATE OF CALIFOR
ss.
COUNTY OF "
On this day of 72_ Gib ✓ in the year 19ao
before Te, the undersigned • Notary/Public in and for said State, personally appeared
ACKNOWLEDGMENT —General —wolcotts Form 233CA—Rev 5-82
1982 WOLCOTTS. INC ICruclass 8.2)
' Pei Sul
(or proved to me on the basis of satisfactory evidence) to be the person whose name!
subscribed to the within instrument, and acknowledged to me that She
executed it.
WITNESS my hand and official al. J
7
Notary Public in and for said State.
ORDINANCE NO. 538
EXHIBIT "A"
Lot 14 of Palma Village Groves as per map recorded in Book 20,
page 51, of Maps, Records of Riverside County, California.
ORDINANCE NO. 538
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EXHIBIT "C"
POWER OF SALE PROVISIONS
Upon any default of the terms and conditions of the
Development Agreement, City may declare all sums secured
hereby immediately due and payable by recording a written
Notice of Default pursuant to the terms and provisions of
California Civil Code, sections 2924, et seq. After the
lapse of such time as may then be required by law following
the recordation of said Notice of Default, and Notice of
Sale having been given as then required by law, City,
without demand upon Developer, shall sell the Real Property
at the time and place fixed by it in said Notice of Sale,
either as a whole or in separate parcels, in such order as
City may determine, at public auction to the highest bidder
for cash in lawful money of the United States, payable at
time of sale. City may postpone sale of all or any portion
of said property by public announcement at such time and
place of sale and, from time to time thereafter, may
postpone such sale by public announcement at the time fixed
by the preceding postponement. City shall deliver to such
purchaser a 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
Developer or City, may purchase at such sale. After
deducting all costs, fees and expenses of City, in
connection with such sale, City shall apply the proceeds of
the sale to payment of the following: 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.
EXHIBIT "C"
EXHIBIT "D"
SUBORDINATION AGREEMENT
The City hereby agrees to subordinate its rights under
the Development Agreement dated May 26 1988 by and
between City and Developer to the deeds of trust listed
hereinbelow subject to the following terms and conditions:
(1) A deed of trust, to be hereafter executed by
Developer or his or her successor in interest, covering the
property, to secure a loan (hereafter called "construction
loan") from a bank, life insurance company or correspondent
thereof, building and loan association, savings and loan
association, or other institutional lender for the purpose
of constructing improvements on the property, provided:
(a) The total amount of the construction loan
shall not exceed $
(b) Any funds derived from the construction loan
shall be used only for the construction on
the property of an apartment building
containing at least sixty (60) units, and
such apartment building shall have a value,
as determined by the institutional lender
making the permanent or take-out loan on that
property, of at least 5
BMLf/22 -1-
(c) The construction loan placed on the property
shall not exceed percent of the
anticipated value of the property after
completion of the improvements that the loan
was obtained to finance;
(d) No portion of the construction loan shall be
used to pay loan fees, interest, or other
charges not directly connected with the
construction of the apartment building;
(e) The maximum loan fees, interest, or other
loan charges that may be deducted from the
principal amount of the construction loan arin
as follows:
(i) Loan Fees: $
(ii) Interest: $
(iii) Other Loan Charges $
(f) The construction loan shall not bear
interest, exclusive of late charges,
penalties, or fees payable in case of
default, greater than percent
per annum;
(g) The construction loan shall be payable in
equal monthly installments over a period o-
time of not less than months or mo
than years;
BMLf/22 -2-
(h) Additional payments may be made, without
penalty, on the principal and accrued
interest of the construction loan at any time
prior to maturity, provided that, there is no
prepayment penalty;
(i) The total payments due on the construction
loan shall not exceed $ per month;
(j) The proceeds of the construction loan shall
be disbursed by the lender either through its
own offices or through a bonded disbursement
control agency only after inspection of the
work completed on the property and
presentation of vouchers signed by the
Developer or his or her successors in
interest for the cost of work, labor, or
materials actually performed or used in the
construction of the apartment building on the
property;
(k) Developer has delivered to City a binding
written commitment from an institutional
lender to make a permanent loan on the
property; and
(1) The remaining terms and provisions of any
construction loan shall be as required by the
lender.
BMLf/22 -3-
(2) A deed of trust, to be hereafter executed b�
Developer or his or her successor in interest, on completion
of the apartment building on the property to secure a
permanent loan (hereafter called "take-out loan") from a
bank, life insurance company or correspondent thereof,
building and loan association, savings and loan association,
or other institutional lender, provided:
(a) The proceeds of the take-out loan shall be
used first to pay in full any construction
loans on the property, and any mechanics'
liens or other charges levied or leviable
against the property by Developer, or his or
her successors in interest; ■
(b) The total amount of the take-out loan shall
not exceed $ ;
(c) The total amount of the take-out loan shall
not exceed percent of the value, as
determined by the lender thereof, of the
property as improved by Developer or his or
her successor in interest;
(d) The maximum loan fees, interest, or other
loan charges that may be deducted from the
principal amount of the take-out loan are as
follows:
BMLf/22 -4-
(i) Loan Fees: $
(ii) Interest: $
(iii) Other Loan Charges: $
(e) The take-out loan shall not bear interest,
exclusive of late charges, penalties, or fees
payable in case of default, greater than
percent per annum;
(f) The take-out loan shall be payable in equal
monthly installments over a period of time of
not less than months or more than
years:
(g) Additional payments may be made, without
penalty, on the principal and accrued
interest of the take-out loan at any time
prior to maturity;
(h) The total payments due on the take-out loan
shall not exceed $ per month;
(i) The proceeds of the take-out loan shall be
disbursed by the lender either through its
own offices or through a bonded disbursement
control agency; and
(j) The remaining terms and provisions of the
take-out loan shall be as required by the
lender.
BMLf/22 -5-