HomeMy WebLinkAboutHousing Agreement First Amendment - Sares Regis aka Lomas de Arena Ord 1066REQUEST:
SUBMITTED BY:
DATE:
CONTENTS:
Recommendation:
CITY OF PALM DESERT
STAFF REPORT
APPROVE THE FIRST AMENDMENT TO THE HOUSING
AGREEMENT BY AND BETWEEN THE CITY OF PALM DESERT
AND SARES REGIS ALSO KNOWN AS LOMAS DE ARENA, L.P.
JANET M. MOORE, HOUSING AUTHORITY ADMINISTRATOR
APRIL 27, 2006
FIRST AMENDMENT TO THE HOUSING AGREEMENT
ASSIGNMENT
COPY OF THE ORIGINAL AGREEMENT DATED MAY 27, 2004
By Minute Motion that the City Council:
1. Approve the First Amendment to the Housing Agreement between
the City of Palm Desert and Sares Regis (also known as Lomas De
Arena, L.P.) dated May 27, 2004, authorizing an option for the
payment of an in lieu fee in the amount of $9,600,000.
2. Authorize the City Manager to execute any additional documents to
facilitate the amendment as presented.
Executive Summary:
Approval of this request will amend the Housing Agreement between the City of Palm Desert and
Sares Regis ("Developer") also known as Lomas De Arena, a Delaware Limited Partnership, dated
May 27, 2004, in order to include an in lieu payment option of $9,600,000. The original Agreement
requires the developer to provide 64 residential units to moderate income households at an
affordable housing cost. Failure to approve the Amendment will require the developer to perform
the original obligations of the Agreement.
Discussion:
In May of 2004, Sares Regis entered into a Housing Agreement with the City of Palm Desert in
order to effectuate a change of zone. The Agreement required the developer to rent or sell 64 units
within the development, now known as The Enclave, to households of moderate income. During
the original negotiations of the housing agreement an in lieu fee was discussed, however, it did not
make it into the final agreement. The developer has since opted for the condominium conversion
and will sell the units instead of operating the units as a rental project.
As a rental project, the onus is on the developer or owner to maintain the units as affordable. The
City's involvement is limited to monitoring. In a for -sale development the subsequent sales become
the responsibility of the City such as Desert Rose. Where there are no restrictions on increases to
uncontrolled fees and charges such as homeowners association fees or interest rates it will limit
the affordability after the initial sales requiring the City to expend monies for resales to ensure
G:\RDA\patty Leon\Wpdocs\JMM\staff report\First Amendment to Agreement Sares Regis.wpd
Staff Report
Sares Regis - First Amendment to the Housing Agreement
April 27, 2006
Page 2 of 2
continued affordability. The City is also tasked with monitoring the restrictions in the 45 year
affordability covenant that would include violations, foreclosures, bankruptcies, HOA non -payments,
and facilitating resales.
The "First Amendment" will add an in lieu fee option for the development in the aggregate amount
of $9,600,000. The fee would be paid in an initial payment of 10% with the remaining amount to
be secured by a Trust Deed against the property, payable in equal installments at close of escrow
for each of the 320 units in the development.
Moderate income housing is desirable in the City, and payment of the in lieu fee will provide the
City the flexibility to do some long range planning to develop, acquire, or rehabilitate affordable
housing units for all income levels. The Redevelopment Agency has demonstrated that more
households can be assisted at lower incomes for the same amount of money based on the
experience of its own rental properties. Because the subsidies that are required for very low and
low income households are excessive in this market, it is very difficult for new market rate
developments to support anything other than moderate income housing, although, more very low
and low income units are needed than moderate.
Rising construction costs have also affected the market drastically, however, the City can
programmatically subsidize rents for low income families (60% of the county median) in existing
independently owned market rate units at a cost of approximately $200,000 per year for 64 units.
The City might also utilize a First Time Homebuyer Program that could provide silent seconds to
approximately 96 moderate income individuals who would like to purchase a home anywhere in the
City. This will accomplish another goal of dispersing affordable housing throughout the City.
In the event the Amendment is approved and the developer exercises the option to pay the in lieu
fee, the City will be able to utilize the funding to assist the targeted incomes that are most
appropriate for the City's overall need as opposed to just moderate income households.
Because of this, staff recommends approval of the First Amendment to the Agreement in order to
provide the option of an lieu fee.
Submitted by:
l
Ja -. Moore
Ho g Authority Administrator
JMM:p1
Approval:
Justin McCrthy°ACM/Redevelopment
Carlos Ortega, k'ecutive Director
---g
Dave Yrigoy
Director oj5 edevelopment/Housing
Paul Gibson, Director of Finance
G:\RDA\Patty Leon\WpdocsVMM\staff report\Fitst Amendment to Agreement Sares Regis.wpd
ORDINANCE NO. 1066
E X H I B I T A
ROUSING AGREEMENT
THIS Agreement is entered into this 27th , day of Nav , 2004,
between Bares Regis Group (hereinafter "Property Owner"),and the City of Palm
Desert, (hereinafter "City"), a municipal corporation organized and existing under the
laws of the state of California.
RECITALS:
This Agreement is predicated upon the following facts:
A. Property Owner is owner of certain real property located within the City of
Palm Desert, California, which property is described in Exhibit A attached hereto and
made a part hereof (hereinafter "Property"). In consideration of the Property Owner
entering into this Agreement, City has granted approval of general plan amendment
through a general plan update) from low density residential (3-5 dwelling units per acre)
to high density residential (10-22 units, per acre), a change of zone from PR-5 (planned
residential, five units per acre) to PR 13 (planned residential, 13 units per acre), a
precise plan/conditional use permit, including a height exception to allow a 27 foot high
roof element, and tentative tract map for apartment) condominium purposes to construct
320 residential apartment condominium units.
B. City has approved an increase in the permitted maximum density from five
dwelling units per acre to a maximum of 13 dwelling units per acre in return for providing
dwelling units affordable to moderate income occupants.
C. As a condition of said approval, City has required that a specified number
of units associated with the project be set aside at an affordable housing cost to certain
households.
NOW, THEREFORE, the parties agree:
Definitions. In this Agreement, unless the context otherwise requires:
(a) "City" is the City of Palm Desert.
(b) "Project" is the development to be constructed in the City pursuant
to Precise Plan/Conditional Use Permit 03-06.
(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 successors in interest and assigns.
(d) "Real Property" is the real property referred to in paragraph 2.
(e) "Useful Life of the Project" is 55 years.
P6402-0001\77451 I vl.doc
ORDINANCE NO. 1066
EX. A
2. Description of Real Property. The real property which is the subject of this
Agreement is described in Exhibit A. ,
3. Interest of Property Owner. Property Owner represents that he has a full
legal and equitable interest in the Real Property and that all other persons holding legal
or equitable interests in the Property are to be bound by the Agreement.
4. Assianment. The rights of the Property Owner under this Agreement may
not be transferred or assigned by the Property Owner prior to the completion of the
construction of the Project unless the written consent of the City is first obtained, which
consent shall not be unreasonably withheld. The City shall have two weeks from the
date of receipt of the request to respond. Upon the, ' completion of the Project as
evidenced by the issuance of a certificate of occupancy terefor, the written consent of
the City shall no longer be required to transfer the rights of the Property Owner under
this Agreement to any successor in interest in the Real Property. Upon the assignment
of this Agreement by the Property Owner to a successor in interest in the Real Property,
the City agrees that it will look solely to such successor in interest to thereafter perform
all of the covenants, terms and conditions of this Agreement and the assigning Property
Owner shall be released from liability accruing under this Agreement from and after the
effective date of such assignment. Notwithstanding the foregoing, the Property Owner
and its assignees shall have the right to collaterally assign this Agreement without the
City's consent to Property Owner's lender in connection with the financing, of this
Project.
5. Bindina effect of Aareement. The burdens and the benefits of the
Agreement shall constitute covenants that shall run with the Real Property and shall be
binding upon and inure to the benefit of the successors in interest to the Real Property.
6. , Relationship of oarties. It is understood that the contractual relationship
between the City and Property Owner is such that the Property Owner is not an agent of
the City.
7. Affordable Units.
(a) City has amended the general plan and granted a change of zone
increasing the permitted maximum density on the property from five units per
acre to 13 units per acre. Based on these amendments, the City has approved
the Precise Plan / Conditional Use Permit 03-06 for a 320-unit apartment
/condominium project, including a height exception to allow a 27-foot high roof
element on the Property. In exchange for increasing the permitted density from
five units per acre to 13 units per acre, the Property Owner agrees to set aside.
20% of total project units as units affordable to moderate income households.
The exchange is required pursuant to the goals and objectives of the General
Plan with respect to the provision of affordable housing. The project's affordable
housing requirement shall therefore be established at 64 units. For the entire
period that the Project is operated as an apartment project, at least 64 units in
the Project shall be rented to and shall be affordable to moderate -income families
P6402-0001\77451 I vl.doc -2- 052004
ORDINANCE NO. 1066
lim
at 100, 105, 110 and 115 percent of area median income on a prorated basis
per unit sizes for the Useful Life of the Project, as follows:
No. of Units % of Income
7 @ up to 100%
32 @ 101 — 105%
19 @ 106 -- 110%
6 @ Ill --115%
64
If in the event the Property Owner, after fifteen (15) days of
vacancy, cannot fill an affordable unit at the required level of affordability, and it
has made such vacant unit(s)'available to moderate income families from the
City's Housing Authority's tenant waiting list, the Property Owner will be
permitted to fill such vacant affordable unit(s) with moderate income tenants at
higher incomes. No more than six of the sixty-four units will be permitted to be
occupied outside the permitted affordability levels at any given time without prior
written consent of the City's Housing Authority administrator.
(b) (b) If the Project is later converted to condominium units, at
least 64 units in the Project shall be sold to and shall thereafter be affordable to
moderate income families at 100, 105, 110 and 115 percent of area median
income on a prorated basis per unit sizes for the longer of 45 years or temaining
Useful Life of the Project.
The 64 affordable units shall be further designated as follows:
One (1) Bedroom Units
Two (2) Bedroom Units
Three (3) Bedroom Units
TOTAL
AFFORDABLE UNITS
19
39
6
64
(c) Maximum rental rates for such affordable units shall be set by the
Palm Desert Housing Authority pursuant to state law at the time the units first
become available for rent. Annual rent increases shall not exceed the increases
permitted by state law.
(d) Sales prices in the affordable units shall be set by the Palm Desert
Redevelopment Agency pursuant to state law an amount such that the units will
qualify as affordable to moderate income persons pursuant to state law.
P6402-0001\77451 I vl.doc -3- 052004
ORDINANCE NO. 1066
EK. A
(e) City shall cause the Palm Desert Redevelopment Agency to
provide second trust deed financing to buyers to secure 45-year affordability
Covenants. The amount of such financing shall be at the sole and'absolute
discretion of the Agency.
(t) Subsequent sales of any affordable units shall be subject to resale
controls substantially in the form of the deed restrictions attached hereto as
Exhibit " A ", which will assure that said units may only be sold or rented to
income qualified persons provided for in this paragraph 7.
(g) Property Owner or its assigned management agent shall be
responsible for determining the eligibility of prospective tenants in the affordable
units.
(h) Property Owner shall advise the City in writing prior to obtaining
building permit regarding the method to be used to satisfy affordable housing
requirement of the project.
(i) Property Owner shall not discriminate on the basis of race, color or
creed, sex, or national origin.
6) Chanoe in Proiect. Property Owner hereby agrees that prior to the
initial completion of the Project as evidenced by the issuance of a certificate of
occupancy, no change, modification, revision or alteration may be made in the
approved precise plan without review and approval by the City and those
agencies and departments of the City approving the plan in the first instance. A
change, modification, revision or alteration in the approved precise
plan/conditional use permit prior to the initial completion of the Project is not
effective until the parties amend this Agreement to incorporate it.
(k) Hold Harmless. Property Owner agrees to and shall hold the City,
its officers, agents, consultants, employees and representatives harmless from
any liability for damage or claims for damage which may arise from the direct or
indirect operations of the Property Owner or those of his contractor,
subcontractor, agent, employee or other person acting on his behalf which
relates to the Project. Property Owner agrees to and shall defend the City and its
officers, agents, employees and representatives from third party actions for
damages caused or alleged to have been caused by reason of Property Owner's
activities in connection with the Project.
This hold harmless agreement applies to all third party damages and .
claims for damages suffered, or alleged to have been suffered, by reason of the
operation referred to in this paragraph, regardless of whether or not the City
prepared, supplied, or approved plans or specifications or both for the Project.
Property Owner further agrees to indemnify, hold harmless, pay all costs
and provide a defense for City in any action challenging the validity of this
Agreement.
P6402-0001\774511v1.doc -4- 052004
ORDINANCE NO. 1066
E%. A
(1) Periodic Review of Compliance with Aareement. So long as the
Project is an apartment project, the Property Owner shall, at his expense,
prepare an annual report and deliver such report to the City regarding
compliance with the affordable housing provisions of this Agreement. The City
may inspect the affordable units pursuant to applicable law regarding
inspections. The City may, at the expense of the Property Owner, cause to be
performed an audit of the affordable units in the Project.
(m) Amendment or Cancellation of Aareement. This Agreement may
be amended or canceled in whole or in part by mutual consent of the parties.
(n) Enforcement. Unless amended gr canceled as provided in
paragraph (m), this 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.
(o) Events of Default. Property Owner is in default under this
Agreement upon the happening of one or more of the' following events or
conditions:
(i) If a warranty, representation or statement set forth in this
Agreement by Property Owner to City is false or proves to have been false
in any material respect when it was made;
(ii) A determination by the City that Property Owner has not
complied with any term or condition of this Agreement.
(iii) Property Owner's failure to maintain the Real Property in
substantially the same condition as it exists on the date that City issues
the Certificate of Occupancy with respect to the Project ordinary wear and
tear and casualty excepted.
(iv) Property Owner's failure to appear in and defend any action
or proceeding purporting to affect the rights or powers of City under the
terms of this Agreement, and to pay all costs and expenses, including -
attorneys' fees in a reasonable sum, in any such action or proceeding in
which City may appear.
(p) Procedure upon Default. If the City determines that the Property
Owner is in default, the City shall notify the Property Owner in writing as to the
nature of the default. Property Owner has 30 days upon receipt of such
notification to take and complete remedial action. If Property Owner fails to take
and complete remedial action within the 30-day period described above, the City
may pursue all legal and equitable remedies the City may have at law or in
equity, and City shall be entitled to specific performance" and enforcement of
each and every term, condition and covenant set forth herein.
P6402-000 1 \77451 1 v Ldoc -5- 052004
ORDINANCE N0. 1066
EX. A
(q) Damaaes upon Canc6llation. Termination of Aareement. In no
event shall Property Owner be entitled to any damages against the City upon
termination of this Agreement or exercise by City of its rights under this
Agreement.
(r) Attornev's 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.
(s) Notices. All notices required or provided for under this Agreement
shall be in writing and delivered in person or sent by certified mail, postage
prepared. Notice required to be given to City shall.be addressed as follows: City
Manager, City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert,
California 92260.
Notices required to be given to Property Owner shall be addressed as
follows:
Sares Regis Group, c/o Greg Albert, 18825 Bardeen Avenue, Irvine, California
92612.
A party may change the address by giving notice in writing to the other
party and therefore notices shall be addressed and transmitted to the new
address.
(t) (I) Rules of Construction and Miscellaneous Items. The singular
includes the plural; the masculine gender includes the feminine; "shall" is
mandatory, "r0by" is permissive.
(ii) If there is more than one signer of this Agreement, on behalf of
the Property Owner, obligations are joint and several.
(u) Duration of Aareement. This Agreement shall remain in effect
during the Useful Life of the Project.
(v) ADDlicable Law. This Agreement shall be construed according to
the laws of the State of California.
(w) Severability. If any portion of this Agreement is for any reason held
to be unenforceable, such determination shall not affect the validity of the
remaining portions.
(x) Authority. Each of the parties hereto covenants 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.
P6402-000 177451 1 v I .doc -6- 052004
ORDINANCE NO. 1066
EX. A
IN WITNESS WHEREOF this Agreement has been executed by the parties on
the day and year first' above written.
Approved as to form:
Dave E in, City Attorney
Attest:
MAN
MOORWIM IMMLIRR�'M
CITY OF PALM DESERT,
A Municipal Corporation
A.
SARES
By:
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,uBy.
P6402-000IV7451IvLdoc -7- 052004
State of California
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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
signatures(s) on the instrument the person(s),
or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
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NOTARY'S SIGNATURE(/
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The information below is not required by law. However, it could prevent fraudulent attachment of this acknowl-
edgment to an unauthorized document.
CAPACITY CLAIMED BY SIGNER (PRINCIPAL) DESCRIPTION OF ATTACHED DOCUMENT
❑ INDIVIDUAL
❑ CORPORATE OFFICER
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❑
PARTNER(S)
❑
ATTORNEY -IN -FACT
❑
TRUSTEE(S)
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GUARDIAN/CONSERVATOR
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OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IESI
TITLE OR TYPE OF DOCUMENT
NUMBER OF PAGES
DATE OF DOCUMENT
RIGHT THUMBPRINT
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SIGNER
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APA 5/99
VALLEY -SIERRA, 800-362-3369
ORDINANCE NO. 1066
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE )
EK.
On this day of , 2004, before me; a Notary Public in
and for said State, personally appeared , known to me or
proved to me on the basis of satisfactory evidence to be the person who executed the
within instrument on behalf of and acknowledged to me
that executed the same.
P6402-000 1 \77451 1 N* Ldoc -8- 052004
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
SARESREGIS GROUP
18802 Bardeen Avenue
Irvine, California 92612-1521
Attention: Michael J. Winter
(Space Above For Recorder's Use)
FIRST AMENDMENT TO HOUSING AGREEMENT
This FIRST AMENDMENT TO HOUSING AGREEMENT ("Amendment") is made and entered
into as of April ___, 2006, by and between LOMAS DE ARENA, L.P., a Delaware limited partnership
("Property Owner"), and the CITY OF PALM DESERT, a municipal corporation organized and existing
under the laws of the State of California (the "City").
R E C I T A L S
A. Property Owner is the owner of that certain real property located within the City of Palm
Desert, California, more particularly described in Exhibit "A" attached hereto (the "Property").
B. Property Owner is developing the Property as a 320-unit residential condominium project
to be commonly known as The Enclave (the "Project").
C. On or about May 27, 2004, Property Owner and the City entered into that certain
Housing Agreement (the "Housing Agreement"). The Housing Agreement was approved by the City
Council of the City of Palm Desert on May 27, 2004, pursuant to City Ordinance No. 1066 ("Ordinance
1066"). The Housing Agreement and Ordinance 1066 were recorded as Instrument No. 2004-0623203 in
the Official Records of Riverside County. Pursuant to the terms of the Housing Agreement, at least
twenty percent (20%) of the units (i.e., 64 units) constructed in the Project (each, a "Unit") are required to
be sold as "affordable units" (as defined in the Housing Agreement).
D. Property Owner has requested that the City accept payment of a fee in lieu of
performance of all obligations imposed upon Property Owner under the Housing Agreement.
E. Property Owner and the City wish to amend the Housing Agreement to provide Property
Owner with the option to make payments to the City in connection with the sale of each Unit in lieu of
performance of, and in exchange for the release by the City of Property Owner from, all obligations
imposed upon Property Owner under the Housing Agreement. Terms not otherwise defined in this
Amendment shall have the meanings attributed to them in the Housing Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Property Owner and the City hereby amend the Housing Agreement and agree as follows:
772996.02/OC
S7335-304/4-11-06/jwk/lag
1. In-Lieu Payment Option.
(a) Grant of Option. The City hereby grants to Property Owner the option
("Option") to pay a fee in the cumulative amount of Nine Million Six Hundred Thousand Dollars
($9,600,000) (the "In-Lieu Payment"), which payment shall be accepted by the City in lieu of
performance by Property Owner of, and in exchange for the release by the City of Property Owner from,
all obligations imposed upon Property Owner under the Housing Agreement. If Property Owner elects to
exercise the Option, Property Owner will do so by providing the City with written notice of such election
within ten (10) business days following written notice from the City that the City has obtained final and
unappealable approval of this Amendment from the City Council of the City of Palm Desert (the
"Approval Date"). Property Owner and the City agree to execute and deliver to each other counterpart
originals of this Amendment within five (5) business days following the Approval Date.
(b) Deliver of In-Lieu Payments. Within ten (10) days following the Approval Date,
Property Owner and the City shall execute mutually acceptable escrow instructions and shall establish an
escrow (the "Escrow") with Fidelity National Title Company ("Escrow Holder"). Within thirty (30) days
following the Approval Date (the "Outside Option Date"), Property Owner shall deposit with Escrow
Holder the sum of Nine Hundred Sixty Thousand Dollars ($960,000), which amount represents ten
percent (10%) of the total In-Lieu Payment amount (the "Initial Payment"). Concurrently with the
delivery of the Initial Payment, Property Owner shall deliver to Escrow Holder a Promissory Note in the
principal amount of Eight Million Six Hundred Forty Thousand Dollars ($8,640,000) (the "Note"), in the
form attached hereto as Exhibit "B", made by Property Owner in favor of the City, and Property Owner
shall also deposit with Escrow Holder a Long Form Deed of Trust and Assignment of Rents (the "Deed of
Trust"), in the form attached hereto as Exhibit "C", executed by Property Owner, as trustor, in favor of the
City, as beneficiary, which Deed of Trust shall encumber the Property and secure the obligations of
Property Owner to the City under the Note. The Note shall be for a term of seven (7) years, shall be non-
interest bearing, and may be prepaid in part or in full at any time without penalty or premium. The
Escrow Holder shall transfer the Initial Payment to the City upon recordation of the Deed of Trust. While
no regular monthly payments shall be required under the Note, Property Owner will be required to make
principal reduction payments in the amount of Twenty Seven Thousand Dollars ($27,000) in connection
with the closing of the sale of each Unit (each, a "Unit Sale Payment"). Each Unit Sale Payment shall be
delivered to Escrow Holder directly from the escrow through which the applicable Unit is sold.
(c) Subordination of Deed of Trust and Partial Reconveyances. The City hereby
agrees, and the Deed of Trust shall provide, that the City will subordinate the Deed of Trust to the lien of
all existing or future lenders and investors providing funds for the purpose of developing the Project, and
agrees to execute such documents as are commercially reasonable and necessary or required to effectuate
such subordination. As and when provided hereinbelow, the City shall deliver to Escrow Holder partial
reconveyances of the Deed of Trust for each Unit (each, a "Partial Reconveyance"), as well as a full
reconveyance of the Deed of Trust (the "Full Reconveyance"), all properly executed and acknowledged.
Partial Reconveyances will be delivered by the City to Escrow Holder on a project phase basis. Property
Owner shall provide the City with a written request for Partial Reconveyances for those Units in the phase
of the Project specified in Property Owner's written request. Within thirty (30) days following receipt of
such request, the City shall deliver to Escrow Holder the Partial Reconveyances for those Units in the
specified phase. Property Owner may request Partial Reconveyances for not more than one (1) phase of
the Project in any fifteen (15) day period. At any time following closing of the sale of ninety percent
(90%) or more of Units within the Project, within thirty (30) days following written request by Property
Owner, the City shall deliver the Full Reconveyance to Escrow Holder. Upon receipt of a Unit Sale
Payment, Escrow Holder shall release and deliver to Property Owner the Partial Reconveyance for the
corresponding Unit. Upon full repayment of the Note, Escrow Holder shall release and deliver to
Property Owner the Full Reconveyance.
772996.02/OC
-2-
S7335-304/4-11-06/jwk/lag
(d) Effectiveness of Exercise of Option. Property Owner's exercise of the Option
shall become effective only upon (i) recordation of the Deed of Trust, and (ii) receipt and recordation (if
applicable) of such other documents as are necessary to effectuate the subordination of the Deed of Trust
as provided above, at which time Escrow Holder shall release the Initial Payment to the City. If, for any
reason, the conditions to the effective exercise of the Option are not satisfied on or prior to the Outside
Option Date, the Option provided to the Property Owner pursuant to Section 1 hereof shall terminate, and
this Amendment shall be of no further force or effect; provided that such failure shall under no
circumstances constitute a default or breach by Property Owner under the terms of the Housing
Agreement or provide a basis for recourse against or recovery from Property Owner.
(e) Payment in Full. Upon full repayment of the Note, the Housing Agreement shall
automatically terminate without further action required by either party, and Property Owner shall be
deemed released from all obligations and liability thereunder.
2. Miscellaneous. Except to the extent the Housing Agreement is modified by this
Amendment, the remaining terms and provisions of the Housing Agreement shall remain unmodified and
in full force and effect. In the event of conflict between the terms of the Housing Agreement and the
terms of this Amendment, the terms of this Amendment shall prevail. This Amendment may be executed
in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one
in the same Amendment. This Amendment shall be interpreted and construed only by the contents
hereof, and there shall be no presumption or standard of construction in favor of or against either party.
This Amendment shall be construed and enforced in accordance with, and governed by, the laws of the
State of California. Invalidation of any of the provisions contained herein or the application thereof to
any person or entity by judgment or court order shall in no way affect any of the other provisions hereof,
or the application thereof to any other person or entity and the same shall remain in full force and effect.
The individuals signing this Amendment on behalf of each party hereby warrant and represent to the other
party (a) that they have the power and authority to bind the entity for which they are signing, (b) that the
signatories are all of the signatories for the respective party necessary for the full and valid execution of
this Amendment for such party, (c) that all corporate, partnership or other action necessary for the
respective party to execute, bind and perform under the terms of this Amendment have been duly taken,
and (d) that no other signature, act or authorization is necessary to bind the respective party. Except as
provided elsewhere in this Amendment, the terms, covenants and conditions herein contained shall be
binding upon and inure to the benefit of the heirs, successors, transferees and assigns of the parties. In the
event of any conflict between the provisions of this Amendment and the provisions of the Housing
Agreement, the provisions of this Amendment shall govern.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first
set forth above.
LOMAS DE ARENA, L.P.,
a Delaware limited partnership
By: SRG Lomas, L.P.,
a California limited partnership
Its: General Partner
By: Regis Homes, LLC,
a California limited liability company
Its: General Partner
By: Regis Homes, L.P.,
a California limited partnership
Its: Sole Member
By: Regis Contractors, Inc.,
a California corporation
Its: General Partner
By:
Name:
Title:
CITY OF PALM DESERT,
a municipal corporation
By:
Name:
Title:
Approved as to form:
By:
Name:
Title:
Attest:
By:
Name:
Title:
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STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ____________________, before me, ________________________, a Notary Public in and
for said state, personally appeared _________________________________, personally known to me (or
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.
WITNESS my hand and official seal.
Signature____________________________________ Seal
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ____________________, before me, ________________________, a Notary Public in and
for said state, personally appeared _________________________________, personally known to me (or
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.
WITNESS my hand and official seal.
Signature____________________________________ Seal
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LEGAL DESCRIPTION OF PROPERTY
EXHIBIT "A"
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NOTE
EXHIBIT "B"
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DEED OF TRUST
EXHIBIT "C"
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ASSIGNMENT OF HOUSING AGREEMENT
This ASSIGNMENT OF HOUSING AGREEMENT ("Assignment") is entered into and
effective as of April __, 2006 (the "Effective Date"), by and between SARESREGIS GROUP, a
California general partnership ("Assignor"), LOMAS DE ARENA, L.P., a Delaware limited
partnership ("Assignee"), and the CITY OF PALM DESERT, a municipal corporation (the
"City"), with respect to the following:
R E C I T A L S
A. Assignee, successor-in-interest to Assignor, is the owner of that certain real
property located within the City of Palm Desert, California (the "Property"). The Property is
being developed as a 320-unit residential condominium project to be commonly known as The
Enclave (the "Project").
B. On or about May 27, 2004, Assignor and the City entered into that certain
Housing Agreement (the "Housing Agreement"). The Housing Agreement was approved by the
City Council of the City of Palm Desert on May 27, 2004, pursuant to City Ordinance No. 1066
("Ordinance 1066"). The Housing Agreement and Ordinance 1066 were recorded as Instrument
No. 2004-0623203 in the Official Records of Riverside County.
C. Assignor desires to assign all of its right, title and interest in and to the Housing
Agreement to Assignee, and Assignee desires to accept such assignment and assume the
obligations of Assignor thereunder, all as provided hereinbelow.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing Recitals, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Assignment of Housing Agreement. Assignor hereby assigns, transfers, conveys
and delivers to Assignee all of Assignor's right, title and interest in and to the Housing
Agreement, and Assignee hereby accepts such assignment. The City hereby acknowledges and
agrees that Assignor is hereby released from any and all liability and/or obligation under the
Housing Agreement.
2. Assumption of Obligations. Concurrently with acceptance of the foregoing
assignment, Assignee hereby assumes and shall perform, pay and discharge, as and when due, all
of the obligations, covenants, terms, conditions and agreements of Assignor under the Housing
Agreement from and after the Effective Date.
3. Consent to Assignment. The City hereby consents and approves the assignment
by Assignor to Assignee as provided for in this Assignment.
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4. Miscellaneous.
(a) Effect of Assignment. Except as set forth in this Assignment, all terms
and conditions of the Housing Agreement shall remain unmodified and in full force and effect.
(b) Time of Essence. Time is of the essence of each and every term,
condition, obligation and provision hereof.
(c) Counterparts. This Assignment may be executed in one or more
counterparts, including facsimile counterparts, each of which shall be deemed an original, but all
of which, taken together, shall constitute the same Assignment.
(d) Applicable Law. This Assignment shall be governed by and construed
and enforced in accordance with the laws of the State of California, without regard to conflicts of
law principles.
(e) Successors and Assigns. This Assignment shall be binding upon and inure
to the benefit of the successors and assigns of the respective parties thereto.
IN WITNESS WHEREOF, this Assignment has been executed as of the day and year set
forth above.
"Assignor" SARES•REGIS GROUP,
a California general partnership
By: Sares Company,
a California corporation
Its: General Partner
By:
Name:
Title:
By: Regis-Stack Partners,
a California general partnership
Its: General Partner
By: The Regis Group,
a California corporation
Its: Managing Partner
By:
Name:
Title:
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"Assignee" LOMAS DE ARENA, L.P.,
a Delaware limited partnership
By: SRG Lomas, L.P.,
a California limited partnership
Its: General Partner
By: Regis Homes, LLC,
a California limited liability company
Its: General Partner
By: Regis Homes, L.P.,
a California limited partnership
Its: Sole Member
By: Regis Contractors, Inc.,
a California corporation
Its: General Partner
By:
Name:
Title:
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"City" CITY OF PALM DESERT,
a municipal corporation
By:
Name:
Title:
Approved as to form:
By:
Name:
Title:
Attest:
By:
Name:
Title:
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