HomeMy WebLinkAboutJune 6, 2006F AR
" CITY OF ARCADIA El
CITY COUNCIL /REDEVELOPMENT AGENCY
REGULAR MEETING
TUESDAY; JUNE 6, 2006
AGENDA
6:00 p.m.
Location: City Council Chamber Conference Room, 240 W. Huntington Drive
CALL TO ORDER
ROLL CALL OF CITY COUNCIL/REDEVELOPMENT AGENCY MEMBERS:
Roger Chandler, Mayor /Agency Chair
Mickey Segal, Mayor Pro Tem /Agency Vice Chair
Peter Amundson, Council /Agency Member
Bob Harbicht, Council /Agency Member
John Wuo, Council /Agency Member
CLOSED SESSION /STUDY SESSION PUBLIC COMMENTS (5 minutes per person)
Any person wishing to address the City Council /Redevelopment Agency during the Public
Comments period is asked to complete a "Public Comments" card available in the Council
Chamber Lobby. The completed form should be submitted to the City Clerk/Agency Secretary
prior to the start of the Closed Session /Study Session .
In order to conduct a timely meeting, there will be a five (5) minute time limit per person. All
comments are to be directed to the City Council /Redevelopment Agency and we ask that proper
decorum be practiced during the meeting. State law prohibits the City Council /Redevelopment
Agency from discussing topics or issues unless they appear on the posted Agenda.
CLOSED SESSION
a. Pursuant to Government Code Section 54956.9(a) to confer with legal counsel
regarding subrogation of the workers' compensation case of Larry Weston.
STUDY SESSION
City Council Team Building.
7:00 p.m., City Council Chamber
RECONVENE CITY COUNCIL /REDEVELOPMENT AGENCY MEETING TO OPEN SESSION
INVOCATION
Reverend Gary Gaulton, Arcadia Police Department Chaplain
PLEDGE OF ALLEGIANCE
ROLL CALL OF CITY COUNCIL /REDEVELOPMENT AGENCY MEMBERS:
Chandler, Segal, Amundson, Harbicht, - and Wuo
REPORT FROM CITY ATTORNEY /AGENCY COUNSEL ON CLOSED SESSION /STUDY - -
SESSION ITEMS
SUPPLEMENTAL INFORMATION FROM CITY MANAGER/EXECUTIVE DIRECTOR
REGARDING AGENDA ITEMS
MOTION TO READ ALL ORDINANCES AND RESOLUTIONS BY TITLE ONLY AND WAIVE
THE READING IN FULL
PRESENTATIONS AND PROCLAMATIONS
a. Presentation - 2006 Arcadia Beautiful Awards
b. Proclamation — In Honor of the Special Olympics
C. Presentation by Arcadians Supporting a Committee for Measure "A ".
d. Presentation by the Highland Oaks Elementary School PTA President
1. PUBLIC HEARING
All interested persons are invited to appear at the Public Hearing and to provide evidence or
testimony concerning the proposed items of consideration. You are hereby advised that should
you desire to legally challenge any action taken by the City Council with respect to any Public
Hearing item on this agenda, you may be limited to raising only those issues and objections
which you or someone else raised at or prior to the time of the Public Hearing.
REDEVELOPMENT AGENCY ITEM:
a. RESOLUTION NO. ARA -221, APPROVING AN AFFORDABLE HOUSING
AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
ARCADIA AND TRADEMARK DEVELOPMENT COMPANY CONCERNING THE
CITY COUNCIL ITEM:
31
Recommended Action: Adopt
Recommended Action: Adopt
PUBLIC COMMENTS (5 minutes per person) -
Any person wishing to address the City Council /Redevelopment Agency during the Public
Comments period is asked to complete a "Public Comments" card available in the Council
Chamber Lobby. The completed form should be submitted to the City Clerk/Agency Secretary
prior to the start of the 7:00 p.m. Open Session.
In order to conduct a timely meeting, there will be a five (5) minute time limit per person. All
comments are to be directed to the City Council /Redevelopment Agency and we ask that proper
decorum be practiced during the meeting. State law prohibits the City Council /Redevelopment
Agency from discussing topics or issues unless they appear on the posted Agenda.
REPORTS FROM ELECTED OFFICIALS
2. CONSENT CALENDAR
All matters listed under the Consent Calendar are considered to be routine and all will be
enacted by one roll call vote. There will be no separate discussion of these items unless
members of the City Council /Redevelopment Agency request specific items be removed from
the Consent Calendar for separate action.
REDEVELOPMENT AGENCY ITEMS:
a. . REGULAR MEETING MINUTES. MAY 16. 2006 AND MAY 25, 2006
Recommended Action: Approve
b. RESOLUTION ARA -220 ADOPTING LOCAL GUIDELINES FOR
IMPLEMENTING THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA).
Recommended Action: Adopt
C.
Q
e.
Recommended
Recommended Action: Adopt
Recommended Action: Adopt
s
Recommended Action: Adopt
h.
$73,613.73.
Recommended Action: Approve
Recommended Action: Approve
j. WAIVE THE FORMAL BID PROC
UNIFORM EXPRESS, AND WEST
FOR THE POLICE DEPARTMENT.
Recommended Action: Approve
k.
Recommended Action: Approve
I.
Recommended Action: Approve
M. AUTHORIZE THE CITY MANAGER TO ENTER INTO AN AMENDED
AGREEMENT WITH EIP ASSOCIATES IN AN AMOUNT NOT TO EXCEED
$502.540 THROUGH THE DRAFT' EIR AND MEYER, MOHADDES
ASSOCIATES, INC. IN AN AMOUNT NOT TO EXCEED $99,793: AND
AUTHORIZE THE CITY MANAGER TO APPROVE ANY SUBSEQUENT
AMENDMENTS TO THE SCOPE OF WORK AND COSTS OF SERVICES AS
NECESSARY TO COMPLETE THE ENVIRONMENTAL REVIEW PROCESS
FOR THE "SHOPS AT SANTA ANITA PARK" PROJECT. ALL COSTS TO BE
PAID BY THE APPLICANT.
Recommended Action: Approve
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3. CITY MANAGER REPORTS.
a. AUTHORIZE THE CITY MANAi
Recomme
b.
Approve
Recommended Action: Approve
ADJOURNMENT
The next Regular Meeting, of the City Council /Redevelopment Agency will be June 20, 2006 at
6:00 p.m. in the City Council Chamber Conference Room located at 240 W. Huntington Drive,
Arcadia.
PURSUANT TO THE AMERICANS WITH DISABILITIES ACT, PERSONS WITH A DISABILITY
WHO REQUIRE A. DISABILITY- RELATED MODIFICATION OR ACCOMODATION IN ORDER
TO PARTICIPATE IN A MEETING, INCLUDING AUXILIARY AIDS OR SERVICES, MAY
REQUEST SUCH MODIFICATION OR ACCOMODATION FROM THE CITY CLERK AT (626)
574 -5455. NOTIFICATION 48 HOURS PRIOR TO THE MEETING WILL ENABLE THE CITY
TO MAKE REASONABLE ARRANGEMENTS TO ASSURE ACCESSIBILITY THE
MEETING.
Recommended Action: Approve
Recommended Action: Approve
I
}' CITY COUNCIL /REDEVELOPMENT AGENCY MEETING
ANNOTATED AGENDA
JUNE 6, 2006
STUDY SESSION
a. City Council Team Building
CLOSED SESSION
a. Pursuant to Government Code Section 54956.9(a) to confer with legal counsel
regarding subrogation of the workers' compensation case of Larry Weston.
PUBLIC HEARING
REDEVELOPMENT AGENCY ITEM:
a.
CITY COUNCIL ITEM:
Q
1. CONSENT CALENDAR
REDEVELOPMENT AGENCY ITEMS:
a. REGULAR MEETING MINUTES, MAY 16. 2006 AND MAY 25. 2006.
1
C( EQA).
CITY COUNCIL ITEMS:
c. REGULAR MEETING MINUTES, MAY 16. 2006 AND MAY 25. 2006.
r.■
e. RESOLUTION NO. 6523, APPROVING THE APPLICATION FOR GRANT FUNDS
UNDER THE USED OIL RECYCLING ENHANCEMENT ACT.
f. RESOLUTION NO. 6528, ADOPTING LOCAL GUIDELINES FOR IMPLEMENTING
THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA).
NO REPORTABLE
ACTION
NO REPORTABLE
ACTION
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
g. RESOLUTION NO. 6529, AUTHORIZING THE CITY MANAGER TO EXECUTE APPROVED 4 -0
THE JOINT POWERS AGREEMENT FOR THE CALIFORNIA INSURANCE POOL Harbicht absent
AUTHORITY (CIPA), THE CIPA WORKERS' COMPENSATION PROGRAM. AND
THE CIPA LITIGATION MANAGEMENT GUIDELINES: AND DELEGATE THE
AUTHORITY TO THE CITY MANAGER TO APPOINT A REPRESENTATIVE AND
ALTERNATE TO SERVE AS A DIRECTOR ON THE CIPA BOARD.
h. AUTHORIZE THE CITY MANAGER TO RENEW THE ANNUAL PROFESSIONAL
SERVICES AGREEMENT WITH PASADENA HUMANE SOCIETY & SPCA FOR
ANIMAL CONTROL SERVICES IN THE AMOUNT OF $73.613.73.
i. AUTHORIZE THE CITY MANAGER TO RENEW THE ANNUAL PROFESSIONAL
SERVICES AGREEMENT WITH ALL CITY MANAGEMENT SERVICES FOR
CROSSING GUARD SERVICES IN THE AMOUNT OF $133.199.
j. WAIVE THE FORMAL BID PROCESS AND APPROVE TOM'S UNIFORMS,
UNIFORM EXPRESS, AND WEST END UNIFORMS AS UNIFORM VENDORS
FOR THE POLICE DEPARTMENT.
k. WAIVE THE FORMAL BID PROCESS AND APPROVE AARDVARK TACTICAL
AND ADAMSON INDUSTRIES AS POLICE FIELD TACTICAL EQUIPMENT
VENDORS FOR THE POLICE DEPARTMENT.
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
AUTHORIZE THE CITY MANAGER TO ENTER INTO A CONTRACT WITH APPROVED 4 — 0
ARCADIA UNIFIED SCHOOL DISTRICT TO PROVIDE BUS TRANSPORTATION Harbicht absent
SERVICES FOR THE RECREATION AND COMMUNITY SERVICES
DEPARTMENT FOR THE PERIOD OF APPROXIMATELY JUNE 19, 2006
THROUGH AUGUST 18, 2006 IN THE AMOUNT OF $33,100.
m. AUTHORIZE THE CITY MANAGER TO ENTER INTO AN AMENDED
AGREEMENT WITH EIP ASSOCIATES IN AN AMOUNT NOT TO EXCEED
$502,540 THROUGH THE DRAFT EIR AND MEYER, MOHADDES ASSOCIATES,
INC. IN AN AMOUNT NOT TO EXCEED $99,793: AND AUTHORIZE THE CITY
MANAGER TO APPROVE ANY SUBSEQUENT AMENDMENTS TO THE SCOPE
OF WORK AND COSTS OF SERVICES AS NECESSARY TO COMPLETE THE
ENVIRONMENTAL REVIEW PROCESS FOR THE "SHOPS AT SANTA ANITA
PARK" PROJECT. ALL COSTS TO BE PAID BY THE APPLICANT.
n. AUTHORIZE THE RETENTION OF ANIMAL PEST MANAGEMENT SERVICES,
INC. IN AN AMOUNT OF UP TO $30,000 FOR COYOTE MANAGEMENT
SERVICES IN FISCAL YEAR 2006 -2007.
I!E
CITY MANAGER'S REPORTS
a. AUTHORIZE THE CITY MANAGER TO ENTER IN TO A CONTRACT WITH G-
2000 CONSTRUCTION, INC. IN THE AMOUNT OF $7,116,000 FOR THE
CONSTRUCTION OF A NEW FIRE STATION.
b. DIRECT THE PUBLIC WORKS SERVICES DEPARTMENT TO CONDUCT A
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 -0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
APPROVED 4 — 0
Harbicht absent
CITY COUNCIL /REDEVELOPMENT AGENCY
REGULAR, MEETING MINUTES
TUESDAY, JUNE 6, 2006
CALL TO ORDER
PRESENT: Chandler, Segal, Amundson, Wuo
ABSENT: Harbicht
CLOSED SESSION /STUDY SESSION PUBLIC COMMENTS (5 minutes per person)
None.
CLOSED SESSION
48:0048
a. Pursuant to Government Code Section 54956.9(a) to confer with legal counsel
regarding subrogation of the workers' compensation case of Larry Weston.
STUDY SESSION
a. City Council'Team Building.
Bill Kelly, City Manager, facilitated a "team building" exercise with the City Council in order to
discuss various management styles and their impact on group decision - making.
RECONVENE CITY COUNCIL /REDEVELOPMENT AGENCY MEETING TO OPEN SESSION
The Mayor reconvened the meeting at 7:00 p.m.
INVOCATION
Reverend Gary Gaulton, Arcadia Police Department Chaplain
PLEDGE OF ALLEGIANCE
Eileen Hubbard, Chair of the Arcadia Beautiful Commission
ROLL CALL OF CITY COUNCIL /REDEVELOPMENT AGENCY MEMBERS:
PRESENT: Agency Council/Member Chandler, Segal, Amundson, Wuo
ABSENT: Agency /Council Member Harbicht
MOTION TO EXCUSE COUNCIL/AGENCY MEMBER FROM MEETING
''A motion was made by Council /Agency Member Segal, seconded by Council /Agency Member
Wuo, and carried without objection to excuse Council /Agency Member Harbicht from tonight's
meeting.
1 06 -06 -2006
48:0049
REPORT FROM CITY ATTORNEY /AGENCY COUNSEL ON CLOSED SESSION /STUDY
SESSION ITEMS
Steve Deitsch, City Attorney, noted that the Council met to discuss Closed Session item (a).
There was no reportable action taken. He further noted that the Council conducted a "team
building", Study Session (item a.) There was no reportable action taken.
SUPPLEMENTAL INFORMATION FROM CITY MANAGER/EXECUTIVE DIRECTOR
REGARDING AGENDA ITEMS
None.
MOTION TO READ ALL ORDINANCES AND RESOLUTIONS BY TITLE ONLY AND WAIVE
THE READING IN FULL
It was moved by Council /Agency Member Amundson, seconded by Council /Agency Member
Segal, and carried by unanimous vote to read all Ordinance and Resolutions by title only and
waive the reading in full.
PRESENTATIONS AND PROCLAMATIONS
a. Proclamation — In Honor of the Special Olympics
Dick Van Kirk, Bill Schumard, and Roberta Abner, representing the Special Olympics
Organization, accepted the proclamation.
b. Presentation by Arcadians Supporting a Committee for Measure "A ".
Gary Kovacic and Bob Hoherd, representing the "Arcadians Supporting a Committee For
Measure "A" group, presented a donation to the City: The donation, in the amount of
$7,042.60, represented the remaining funds from the group's successful Measure A
campaign.
C. Presentation - 2006 Arcadia Beautiful Awards
Eileen Hubbard, President of the Arcadia Beautiful Commission, and members of the
commission were present to make the awards. Award recipients were:
The Wu Family - 63 Birchcroft Street
Fran and Jerry Jones -527 Rosemarie Drive
The Chang Family - 420 West Le Roy Avenue
Maltez and Socorro Bracher - 2001 South Seventh Place
Jonathan and Hilary Barrier - 2014 South Seventh Place
Jeanette and Dick Parker - 315 Arbolada Drive
Norm and Cindy Doerges -1101 Fallen Leaf Road
The Merlo Family - 100 West Sycamore Avenue
Ching Chen Ouyang - 508 Monte Vista Road
Stephen and Felicity Chen -1049 Panorama Drive
The Wong Family - 522 West Woodruff Avenue
Dino Clarizio, MD -1505 South Baldwin Avenue
2 06 -06 -2006
48:0050
Presentation by the Highland Oaks Elementary School PTA President — not in
attendance.
PUBLIC HEARING
REDEVELOPMENT AGENCY ITEM:
a.
CITY COUNCIL ITEM:
ral
Don Penman, Agency Deputy Executive Director /Assistant City Manager /Development Services
Director, and Brian Saeki, Economic Development Manager, presented the report; staff noted
that at the direction of the Agency Board, a two - phased Request for Qualification /Request for
Proposals process was prepared for the development of six (6) moderate — income housing units
at 119 and 121 Alta Street; Trademark Development Company, LLC is the proposed developer;
staff noted that Redevelopment Agencies are required to expend at least 20% of their gross tax
increment for affordable housing purposes; Agency staff has worked with the developer on the
terms of the affordable housing agreement for this project; the agreement articulates that the
units be sold and owned by moderate income qualified households for 45 years, must be owner-
occupied, and must be sold to another qualified buyer; pursuant to direction from the Agency
Board, an equity sharing agreement could be incorporated into the agreement at a later date;
also, pursuant to Agency Board direction, tenant selection priority for three of the units will be to
qualified City of Arcadia employees living in Arcadia; the other three units will be prioritized
based first on Arcadia residency, and then to non - resident rentors.
The Public Hearing was opened and there were no public comments from members of the
audience.
A motion was made by Council /Agency Member Segal, seconded by Council /Agency Member
Wuo, and carried without objection to close the Public Hearing.
Council /Agency Members Segal and Wuo noted that the Council /Agency received a lengthy
Study Session presentation on this item, which was open to the public; Council /Agency member
Wuo also noted that Council provided direction to staff regarding the tenant priority.
06 -06 -2006
HOUSING PROJECT LOCATED AT 119 AND 121 ALTA STREET IN THE CITY
OF ARCADIA.
Recommended Action: Adopt
HOUSING PROJECT LOCATED AT 119 AND 121 ALTA STREET IN THE CITY
Recommended Action: Adopt
48:0051
Mr. Penman noted a lottery system, that would be supervised by the Fair Housing Authority, will
govern the tenant selection process.
A motion was made by Council /Agency Member Segal, seconded by Council /Agency Member
Wuo, and carried on roll call vote, to adopt ARA Resolution No. 221, City Council Resolution
No. 6530, approve an appropriation of $760,000 from unencumbered affordable housing funds
for the Alta Street Affordable Housing Project, and to approve the design review which provides
for four (4) guest parking spaces in lieu of six (6).
AYES: Council /Agency Members Segal, Wuo, Amundson, and Chandler
NOES: None
ABSENT: Harbicht
PUBLIC COMMENTS (5 minutes per person)
Paul Paquette, appeared to speak regarding the development project proposed at the Santa
Anita Race Track.
Morley Saraiya, appeared to thank the Public Works Services Department for their prompt and
effective attentiveness to his request for services on a street condition.
Rebecca Ruiz, representing the "Arcadia Wins" group, appeared to speak against the Westfield
Corporation's advertisement regarding their proposed initiatives.
Dr. Francis Yu, appeared to speak regarding two Arcadia Municipal Code issues.
REPORTS FROM ELECTED OFFICIALS
Council /Agency Member Wuo noted the upcoming "Relay for Life" which will be held at Santa.
Anita Race Track on Saturday, June 10` 2006.
Council /Agency Member Amundson reported on allegations of code violations by adult
businesses in Arcadia; affirmed the democratic purpose of the initiative process, although he
noted that he feels the petitions currently being circulated in the community are unnecessary;
reaffirmed his stance on "strict standards" for evaluating new development projects;
commented on the anniversary of "D Day;" sent a belated thank you to all families who have lost
loved ones in battle for their sacrifices.
Council /Agency Member Segal hoped that the Westfield Corporation would stop their
aggressive and attacking tactics which are created a divisive environment within the City.
Mayor /Agency Chair Chandler noted a conference where elected officials were educated on the
impacts of the initiative, referendum and recall processes in California; stated that the current
style of attacks by the Westfield Corporation will continue and is designed to make the public
lose confidence in their elected officials; he further noted that Westfield's motivation is to force
the City to adopt laws that favor Westfield so that they can avoid competition. Mayor /Agency
Chair Chandler also notified the public regarding a phone scam designed to illegally obtain
people's credit card numbers.
4 06 -06 -2006
48:0052
City Clerk Jim Barrows thanked Supervisor Mike Antonovich for his support of the recent
,Memorial Day celebration in LA County Park; congratulated the 2006 graduates of Arcadia High
School; thanked Police Agent Bruce Smith and members of the Arcadia Police Department for
their efforts in reducing traffic around Baldwin Stocker Elementary School.
2. CONSENT CALENDAR
REDEVELOPMENT AGENCY ITEMS:
REGULAR MEETING MINUTES, MAY 16. 2006 AND MAY 25. 2006.
Recommended Action: Approve
R1
Recommended Action: Adopt
CITY COUNCIL ITEMS:
C. REGULAR MEETING MINUTES, MAY 16. 2006 AND MAY 25, 2006.
Recommended Action: Approve
9
PERTAINING TO THE REGULATION OF MASSAGE THERAPY.
Recommended Action: Introduce
e.
Adopt
g. RESOLUTION NO. 6529, AUTHORIZING THE CITY MANAGER TO EXECUTE
THE JOINT POWERS AGREEMENT FOR THE CALIFORNIA INSURANCE
POOL AUTHORITY (CIPA). THE CIPA WORKERS' COMPENSATION
h. AUTHORIZE THE CITY MANAGER TO RENEW THE ANNUAL
06 -06 -2006
Recommended Action: Adopt
Recommended Action: Approve
f
48:0053
k: -
Recommended Action: Approve
I. AUTHORIZE THE CITY MANAGER TO ENTER INTO A CONTRACT WITH
M.
n.
SERVICES IN FISCAL YEAR 2006 -2007.
Recommended Action: Approve
M
TRIPLE COMBINATION FIRE PUMPER FROM PIERCE MANUFACTURING.
Recommended Action: Approve
a
RELATED TO THE LIVE BROADCAST OF CITY COUNCIL MEETINGS
DURING FISCAL YEAR 2006 -2007.
Recommended Action: Approve
6 06 -06 -2006
Recommended Action: Approve
Recommended Action: Approve
Recommended Action: Approve
PAID BY THE APPLICANT.
Recommended Action: Approve
48:0054
A motion was made by Council /Agency. Member Wuo, seconded by Council /Agency Member
Amundson, and carried on roll call vote to approve the Consent Calendar items.
AYES: Council Agency Members Wuo, Amundson, Segal, and Chandler
NOES: None
3. CITY MANAGER REPORTS:
a.
CONSTRUCTION OF A NEW FIRE STATION.
Recommended Action: Approve
Mr. Penman, Assistant City Manager /Development Services Director, David Lugo, Fire Chief,
and Brian Saeki, Economic Development Manager, presented the report; staff noted that
pursuant to Council direction, the process of building a new fire headquarters facility at its
current location on Santa Anita was initiated; after a competitive bidding process, G -2000 was
selected as the construction firm for the project; $5.92 million was approved for this project as
part of the Fiscal Year 2005 -2006 Capital Improvement Budget,; the low bid for the project is
$1.7 million higher than the estimate, however, this is attributed to the significant increases in
construction materials; staff is recommending approval of the contract with G -2000
Construction, Inc. in the amount of $7,116,000.00.
Council /Agency Member Amundson requested information regarding a Study Session
conducted on February 15, 2005 regarding this issue and comparison costs for comparable fire
stations. Mr. Penman noted that staff would provide this information to the Council.
Council /Agency Member Segal, noted that although the final bid was considerably higher than
originally estimated, he affirmed the reality of high construction costs in the market and their
escalation over the past year.
Council Member Amundson noted that he would have preferred to table this item until he had
more time for consideration, however he affirmed that he did not have the supporting votes of
the Council to make a motion to that effect.
Mr. Kelly, City Manager, noted that the City will be using an independent third -party construction
manager on this project, as was done on the Police Headquarters project, in order to prevent
change orders and keep the project "on track" and `on budget."
A motion was made by Council /Agency Member Segal, seconded by Council /Agency Member
Wuo, and carried on roll call vote to enter into a contract with G -2000 Construction, Inc. in the
amount of $7,116,000.00 for the construction of a new Fire Station 105 Headquarters.
AYES: Council Agency Members Segal, Wuo, Amundson, and Chandler
NOES: None
ABSENT: Harbicht
06 -06 -2006
j ,
r -
48:0055
i b.
Pat Malloy, Public Works Services Director, Tom Tait, Deputy Public Works Services Director,
and Susannah Turney, Environmental Services Officer, presented the report; staff noted that in
accordance with the Residential Refuse and Recycling Agreement Between the City of Arcadia
and Waste Management Collection and Recycling, .Inc., the vendor has requested that the
Council adjust the service rates for refuse /recycling collection to reflect the change in Consumer
Price Index (CPI) for the period of March 2005 to March 2006, and landfill disposal facility rates
increased based on the previous year's percent change.
A motion was made by Council /Agency Member Segal, seconded by Council /Agency Member
Wuo, and carried on roll call vote to direct the Public Works Services Department to conduct a
public hearing at the June 20, 2006 meeting and prepare a Resolution authorizing the proposed
refuse rate schedule for fiscal year 2006/2007 for presentation to the Council.
AYES: Council Agency Members Segal, Wuo, Amundson, and Chandler
NOES: None
ABSENT: Harbicht
ADJOURNMENT
The meeting was adjourned at 8:56 p.m.
The next Regular Meeting of the City Council /Redevelopment Agency will be June 20, 2006 at
6:00 p.m. in the City Council Chamber Conference Room located at 240 W. Huntington Drive,
Arcadia.
James H. Barrows, City Clerk
IN
Vida Tolman
Chief Deputy City Clerk
06 -06 -2006
COUNCIL.
Recommended Action: Approve
1
STAFF REPORT
Arcadia Redevelopment Agency
June 6, 2006
TO: I Redevelopment Agency Board and City Council
FROM: Don Penman, Deputy Executive,Director and Assistant City Manager/
Development Services Director
By: Brian Saeki, Economic Development Manager
SUBJECT: Joint Public Hearing: Alta Street Affordable Housing Project
Arcadia Redevelopment Agency
1. Adoption of Resolution No. ARA -221 — A resolution of the
Redevelolment Agency of the City of Arcadia, California, approving an
affordable housing agreement between the Redevelopment Agency of
the City of Arcadia and Trademark Development Company, LLC
concerning the development of a six (6) unit owner occupied affordable
housing project located at 119 and 121 Alta Street in the City of
Arcadia.
2. Approval of appropriation of $760,000 from unencumbered affordable
housing funds for the Alta Street Project.
City Council
Adoption of Resolution No. 6530 — A resolution of the City of Arcadia,
California, approving an affordable housing agreement between the
Redevelopment Agency of the City of Arcadia and Trademark
Development Company, LLC concerning the development of a six (6) unit
owner occupied affordable housing project located at 119 and 121 Alta
Street in the City of Arcadia and making certain findings pursuant to
California Health and Safety Code Section 33433 in connection therewith.
Recommendation: Adoption
SUMMARY
At the direction of the Agency Board, a two- phased Request for Qualifications /Request
for Proposals (RFQ /RFP) was prepared for the development of six (6) moderate - income
housing units at 119 and 121 Alta Street. Based upon responses received during this
process, Trademark Development Company, LLC was able to provide a unique building
Arcadia Redevelopment Agency and City Council
June 6, 2006
Page 2
design and an innovative site plan. Based upon this and their previous experience and
positive references, staff is recommending that the Agency Board and City Council
approve an Affordable Housing Agreement (AHA) with Trademark to develop these
units.
BACKGROUND
In 1996 the Redevelopment Agency purchased two adjacent 8,000 square foot parcels
( "Site ") on the north side of Alta Street in downtown Arcadia (119 & 121 Alta Street) with
unrestricted redevelopment funds (Attachment 1). These lots were identified as a
potential affordable housing site in the Agency's 2005 -2010 Implementation Plan
adopted in December 2004. In November 2005, the Agency Board directed staff to
prepare a RFQ /RFP and distribute it to affordable housing developers for this Site. As
part of the project, the two parcels would be sold to the selected developer.
The Site is currently being used sporadically as a parking lot for patrons and employees
of the downtown area. It is bordered by commercial /retail uses to the north and west, a
private parking lot to the east and residential. uses to the south. It has a. General Plan
designation of "Multi- Family Residential" and is zoned R -3 or multi - family residential.
The RFQ /RFP was•a two (2) phased process. The first phase required that interested
developers submit references, qualifications /experience and financial capability in the
affordable housing field. Phase II required that selected developers submit detailed
project design proposals which included a site plan and elevations and a project
proforma. The proformas were submitted to Keyser Marston Associates Inc., a
recognized affordable housing expert in the Los Angeles area, for review.
Five (5) firms submitted Phase I responses. The firms included Henry Nunez, Dynamo
Construction, Bourne Construction, Bowden Development and Trademark
Development. Based upon the Phase I criteria, staff was able to select three (3) firms to
continue to Phase II of the process. These firms included, Bourne Construction,
Bowden Development and Trademark Development. Bourne Construction and
Trademark Development provided Phase II responses. Bowden Development informed
staff that they would not be providing a response.
The Phase II responses were analyzed by staff and Keyser Marston (proformas) for
conformity with the RFQ /RFP, proposed design and financial requirements. According
to Keyser Marston, both firms were requesting equivalent subsidies from the Agency.
Therefore, it was Keyser Marston's recommendation that the firm should be selected
based upon conformity with the RFQ /RFP and proposed design.
It is staff's opinion that Trademark Development provided a more unique site plan and
architectural design for the buildings. In addition, Trademark's response fully
conformed with the requirements of the RFQ /RFP while the Bourne proposal did not.
For example, a major element of the RFQ /RFP was to include three 3- bedroom units
and three 2- bedroom units in the project. Bourne's proposal included four 2- bedroom
units and two 4- bedroom units.
Arcadia Redevelopment Agency and City Council
June 6, 2006
Page 3
Staff informed .both Trademark and Bourne that it would be recommending to the
Agency Board and City Council that Trademark be selected as the developer for the
project. Staff then began negotiations with Trademark with the understanding that the
Agency Board and City Council would be considering the AHA and project design at a
future meeting.
DISCUSSION
Redevelopment agencies in California are legally required to expend at least 20% of
their gross tax increment for affordable housing purposes. The State also prepares a
Regional Housing Needs Assessment (RHNA) which provides each city with its fair
share requirement of affordable housing. The City of Arcadia's requirement is currently
50 very low, 7 low and 16 moderate income units. Fortunately, the City of Arcadia can
utilize its redevelopment agency to assist in achieving these numbers. In cities without
an Agency, they must require that private developers include affordable housing in
market rate developments through inclusionary housing ordinances and the like. The
proposed Alta Street affordable housing project will satisfy 6 of the 16 moderate - income
production requirement.
Keyser Marston, Trademark and staff have spent several weeks refining the design of
the project and the AHA including any financial subsidies. It is staffs recommendation
that the Agency Board and City Council approve the AHA and project design as
presented in this report. In addition, Keyser Marston also believes that the financial
component of the project is consistent with other affordable housing projects in today's
market.
The following provides a summary of the proposed AHA and project design:
The Affordable Housing Agreement
The AHA as currently structured, requires that the Agency provide the Developer with a
$760,000 loan and sell the Site to the Developer for one dollar. The market value for
the vacant properties was determined to be $1.5 million and the properties were sold to
the Agency affordable housing fund. The $760,000 loan would be provided to the
developer in two allotments. The first allotment of the Agency loan ($123,000) would
include costs for pre- development expenses such as architectural and engineering fees
and would be available at the close of escrow. The remaining $637,000 loan will be
deposited into an escrow account and will be drawn upon in conjunction with the
Developer's construction loan. The Agency's loan and land interest is protected during
construction as an Agency Deed of Trust and a Promissory Note will be recorded on the
properties. The Agency Promissory, Note provides that concurrent with the close of
escrow for the sale of each unit to a qualified household, an amount equal to one -sixth
(1/6) of the total of the fair market value of the Property and the Agency Development
Loan shall be credited to the principal balance of this Agency Promissory Note and the
principal balance of the Agency Promissory Note shall be reduced by the
aforementioned credited amount.
Arcadia Redevelopment Agency and City Council
June 6, 2006
Page 4
The AHA also incorporates a Regulatory Agreement (RA) which provides for several
assurances to the Agency. The RA requires that the units be sold and owned by
moderate income qualified households (up to 120% of area median income, or $67,400
for a family of four) for 45 years; the units must be owner occupied and cannot be sublet .
(however, a room can be rented after the first 5 years of residency); if the owners wish
to sell the property, it must be sold to another qualified buyer; the owners must maintain
the exterior of the homes; the Agency has the right of first refusal to purchase the units.
This document must be signed by each buyer prior to close of escrow. In addition, a
performance deed of trust will also be recorded on each unit which enforces the
requirements of the RA and provides the Agency with the ability to foreclose if the RA is
breached by an owner.
It should be noted that the Agency Promissory Note also provides that upon the
recordation of each Regulatory Agreement executed by a qualified household, the
Agency shall release and reconvey that unit from the development deed of trust.
An equity sharing arrangement, while NOT currently included in the AHA, could be
incorporated into the Agreement at a later date, though staff currently believes that
sales of the units will not be difficult and have had several inquiries to date.
Equity sharing would allow for buyers to sell their units, after a certain period of time,
and share in the equity with the Agency. In order to keep the unit "affordable" the
Agency would then have to re- subsidize the unit to the moderate- income sales price. It
should be noted that equity sharing is a common practice and can be found in many
affordable housing projects, and there are several alternative equity sharing options that
could be incorporated into the project should the Agency Board desire to include such a
provision. This issue of equity sharing will be further studied and returned to the
Agency Board and City Council at a future date.
The Proiect
The rDeveloper is proposing a unique site plan which promotes an inviting front elevation
off Alta Street. One of the key goals of the project was to minimize paved area and
create an active streetscape. A method of achieving this is to feature the "front door"
from Alta Street as opposed to garage doors. In this case all six units will have a two -
car attached garage but the front four units will access their garages off a central drive
leading into a motor court designed with a stamped concrete inlay. This also promotes
a cleaner Alta elevation as garages will not be a major focal point. Meandering
walkways along the east and west sides of the Site and an abundance of landscaping
are also proposed, creating a park -like setting for the residents. The units will also have
private patios. Stamped concrete is also proposed for the entry way to the shared
driveway leading to the motor court and directly behind the four guest parking spaces
off of the alley to the rear of the site.
The design of the buildings is of high quality. The buildings feature multi - colored stucco
exterior wall treatments, and Craftsman inspired elements such as oversized eave
overhangs, window treatments and detailing. The Developer will be required to use
quality materials on all exterior finishes which include windows and doors, window
Arcadia Redevelopment Agency and City Council
June 6, 2006
Page 5
treatments, roofing material, etc. The intent of the quality design is to set an example
for quality "assisted" housing.
The Project is fully compliant with the Municipal Code with one exception. The
Developer is proposing 4 guest parking spaces in lieu of the 6 required. Staff is
confident that this is acceptable for several reasons. First, the project includes three 2-
bedroom units which , are no longer being constructed in the City due to lack of market
demand for a 2- bedroom product. Staff believes that 2 covered spaces would be
sufficient for a 2- bedroom unit. Second, the rear two units have attached garages that
include a 15 -foot apron off the alley. This could potentially serve as an additional two or
more guest spaces to these units. Finally, it should be noted that the State has passed
SB 1818 that allows and sometimes requires that municipalities provide for concessions
to developers for the creation of affordable housing. Examples of concessions could
include relief from setback requirements, guest and covered parking. In this case, staff
is recommending that the Agency Board utilize the intent of SB 1818 and approve the
design of the project with two fewer guest parking spaces for the reasons mentioned
above.
Buyer Selection
Staff presented this project to the Agency Board at a study session on May 16, 2006.
At this meeting the Board directed staff to give priority to City of Arcadia employees, i.e.,
public safety first and then other City employees for three (3) units and create a
weighted lottery process for the remaining three with a priority given to Arcadia
residents who currently rent in the City and would like to purchase a unit. Similar to the
lottery system for the Heritage Park Project on Las Tunas, residents would be given
more opportunities in the lottery process based upon years of residency in the City. The
actual selection process for the three units for City employees will need further
refinement and staff will bring back this information to the Board at a later date..
California Redevelopment Law Section 33433 Requirements
As required by State Redevelopment law, notices informing the public of the date, time
and place of this joint public hearing for consideration of the AHA were published in the
Arcadia Weekly. The notices included information on the availability for public
inspection of the AHA and the Disposition Report (Attachment 2) as required by Health
and Safety Code Section 33433. The documents have been available at the
Development Services office at City Hall.
ENVIRONMENTAL IMPACT
This project is categorically exempt under the State CEQA Guidelines, Section 15332:
Infill Development Projects. Staff has prepared a Preliminary Exemption Assessment
(Attachment 3) and Notice of Exemption for the project.
Arcadia Redevelopment Agency and City Council
June 6, 2006
Page 6
FINANCIAL IMPACT
The total Agency subsidy for the project is $2.26 million or $760,000 cash plus $1.5
million for the land (to be sold to the Developer for one dollar). As mentioned earlier in
this report, the cash subsidy will be dispersed in two payments. The first or $123,000
will be given to the Developer at the close of escrow for pre - development fees. The
remaining balance or $637,000 will be deposited into an escrow account and disbursed
in conjunction with the Developer's construction loan. Architecture, site planning and
lowering the number of units from allowable of eight to six increased the required
financial assistance. However, there are sufficient funds available in the unencumbered
affordable housing fund for this project. The project pro forma is provided as
Attachment 4.
It should be noted that the Agency is required to spend at least 20% of it gross tax
increment annually. for affordable housing purposes. This amount is approximately
$700,000 annually. 'If the Agency does not expend these funds, the State could cease
all general Agency activities until the funds are spent or choose to take the affordable
housing funds away from the Agency and build a housing project in the City where the
City would have little to no authority during the entitlement process.
RECOMMENDATION
Open the Public Hearing and take any public testimony on the
environmental documents and /or Disposition Report.
2. Agency: Adopt Agency Resolution No. ARA -221 — approving an Affordable
Housing Agreement with Trademark Development Company, LLC.
3. Agency: Approve an appropriation of $760,000 from unencumbered
affordable housing funds for the Alta Street Affordable Housing Project.
4. City Council: Adopt City Council Resolution No. 6530 — A Resolution of the
City Council of the City of Arcadia approving the sale of property. pursuant
to an Affordable Housing Agreement between the Arcadia Redevelopment
Agency and Trademark Development Company, LLC and make certain
findings pursuant to California Health and Safety Code Section 33433 in
connection therewith.
Approved:
William R. Kelly, Executive Director and City Manager
Attachments: 1) Site Map
2) Disposition Report
3) Preliminary Exemption Assessment
4) Development Pro forma
5) Resolution No. ARA -221
6) Resolution No. 6530
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Attachment 1
ALTA STREET AFFORDABLE HOUSING PROJECT
REAL PROPERTY DISPOSITION REPORT
Introduction
This real property disposition report ( "Report") has been prepared by the Redevelopment
Agency of the City of Arcadia ( "Agency") pursuant to California Health and Safety Code Section
33433. Section 33433 requires that before any Agency -owned property acquired with tax
increment revenues is sold for development, the sale must first be approved by resolution of the
City Council of the City of Arcadia ("City"), following a public hearing regarding the sale.
This Report sets forth certain details of a proposed Affordable Housing Agreement
( "Agreement") between the Agency and Trademark Development Company, LLC, a California
limited liability company ( "Developer") that, among other things, provides for the sale and
development of certain Agency -owned property that was acquired by the Agency with tax
increment revenues. A copy of the proposed Agreement is attached to this Report as Exhibit "C"
and is also on file with the Agency and available for inspection at the office of the Agency, located
at 240 West Huntington Drive, Arcadia, California, 91066 during the Agency's regular business
hours.
Summary of Proposed Agreement
The City Council of the City adopted a redevelopment plan ( "Redevelopment Plan ") for
the Central Redevelopment Project Area ( "Project Area ") on December 26, 1973, by Ordinance
Number 1490. The Agency owns two parcels of real property located at 119 Alta Street and
121 Alta Street in the City and identified as Assessor Parcel Numbers 5773 - 014 -912 and 5773-
014 -913 ( "Property "). The. Property is more particularly described in Exhibit A and depicted in
Exhibit B attached to the Agreement.
The Property is currently unimproved and is being used as a parking lot for patrons and
employees of the downtown area. The Property is bordered by commerciallretail uses to the
north and west, a private parking lot to the east and residential uses to the south. The Property
is approximately sixteen thousand (16,000) square feet (eight thousand (8,000) square feet per
parcel), has a General Plan designation of "Multi - Family Residential" and is zoned R -3 or multi-
family.
Pursuant to the terms of the proposed Agreement, the Developer would acquire the
Property from the Agency and construct on the Property the following housing project
( "Project"): six (6) condominium style owner - occupied multifamily residences ( "New Homes ")
reserved for occupancy, for a period of at least forty-five (45) years, by families whose
household earnings do not exceed one hundred twenty percent (120 %) of Los Angeles County
median income ("Qualified Households "). Pursuant to the proposed Agreement, the residences
will incorporate a unique architectural style and a mix of private patio and common space areas.
RVPUB\KV ARNER \712931.1
Attachment 2
The Project is more particularly described in the scope of development attached to the
Agreement as Exhibit C .
The Agreement also provides that the Agency would assist in the Development of the
Project on the Property as follows: (1) transfer the Agencys fee interest in the Property.to the
Developer for a purchase price of One Dollar ($1.00) ( "Purchase Price "); and (ii) provide the
Developer a loan in an amount not to exceed Seven Hundred Sixty Thousand Dollars
($760,000) to assist the Developer in financing the development of the Project on the Property
("Agency Development Loan ").
The Agreement provides that promptly following the acquisition of the Property, the
Developer must commence development of the Project on the Property. As described in the
proposed Agreement, the Project consists of the planning, entitlement, design, construction and
installation of six (6) condominium style owner - occupied multi - family residences on the Property
(three 2- bedroom units and three 3- bedroom units) in accordance with the terms and conditions
of the Agreement. The Developer is responsible for satisfying all obligations and conditions
within the times established in the Schedule of Performance. The Developer is also responsible
for developing he Project in accordance with the Scope of Development. The Developer is
further responsible under the proposed Agreement to construct the Project in full compliance
with all provisions of state, federal, and local laws and all rules and regulations.
Agency Cost Incurred In Connection With the Property (Prior To Proposed Agreement)
The costs previously incurred by the Agency in connection with the Property include all
of the following:
Acquisition Costs (1996) $200,000
Acquisition Costs (2005) $1,500,000
Demolition and Clearance Costs $0
Relocation Costs $0
On -Site Improvement Costs $0
Off-Site Improvement Costs $0
Total Agency Expenditures $1,700,000
The total expenditures by the Agency in connection with the Property to date are in the
amount of One Million Seven Hundred Thousand Dollars ($1,700,000).
RVPUB\KV ARNER \712931.1
Estimated Cost of the Proposed Agreement to the Agency
A) Agency Provision of Financial Assistance Pursuant To Proposed
Agreement
The Agreement provides that the Agency will assist in the development of the Project on
the Property by providing the Developer the Agency Development Loan in an amount not to
exceed Seven Hundred Sixty Thousand Dollars ($760,000) to assist the Developer in financing
the development of the Project on the Property. The Agreement provides that the first
installment of the Agency Development Loan in an amount not to exceed One Hundred Twenty
Three Thousand Dollars ($123,000) ( "First Installment') will be distributed to the Developer at
the close of escrow The Agreement further provided that the remaining balance of the Agency
Development Loan ( °Remaining Balance ") will be deposited by the Agency into an escrow
account opened by the Developer and in which the Developer also receives the proceeds of the
Developer's conventional financing ( "Construction Loan "). According to the Agreement, the
lender of the Construction _ Lender and the Agency shall disburse the proceeds of the
Construction Loan and the Remaining Balance of the Agency Development Loan in the
following order: (i) first, all of the Developer's funds on deposit with the Construction Lender, (ii)
second, fifty percent (50 %) of the proceeds of the Remaining Balance of the Agency
Development Loan (iii) third, fifty percent (50 %) of the proceeds of the Construction Loan; (iv)
fourth, an additional thirty,percent (30 %) of the proceeds of the Remaining Balance of the
Agency Development Loan; (v) fifth, an additional thirty percent (30 %) of the proceeds of the
Construction Loan; (vi) sixth, an additional twenty percent ?O %) of the proceeds of the
Remaining Balance of the Agency Development Loan; and (viii seventh, an additional twenty
percent (20 %) of the proceeds of the Construction Loan.
Pursuant to the Agreement, the Developer is obligated to repay: (i) the fair market value
of the Property (as of the Effective Date of the Agreement), and (ii) the Agency Development
Loan over a period of five (5) years with no interest accruing pursuant to the terms and
conditions of the Agency Development Promissory Note attached to the Agreement as Exhibit I .
The Agency Development Promissory Note is to be secured by the Agency Development Deed
of Trust which is attached to the Agreement as Exhibit J and shall be subordinate only to the
First Mortgage Financing.
The Agency Development Promissory Note provides that concurrent with the close of
escrow for the sale of each New Home to a Qualified Household, an amount equal to one -sixth
(1/6) of the total of the fair market value of the Property and the Agency Development Loan shall
be credited to the principal balance of this Agency Development Promissory Note and the
principal balance of the Agency Development Promissory Note shall thereafter be reduced by
the aforementioned credited amount. The Agency Development Promissory Note also provides
that upon the recordation of each Regulatory Agreement executed by a Qualified Household
against the New Home which is the subject of a sale between the Developer and such Qualified
Household, the Agency shall release and reconvey that New Home from the Development Deed
of Trust.
R V PUBVK V ARNER \712931.1
The Agreement does not require the Agency to spend any other money on land
acquisition, clearance, relocation, improvements or financing, except for the Agency
Development Loan and customary transaction costs, such as escrow and title charges.
B) Agency Expenses to Date Related to the Agreement: (Table 1)
R V PUB\K V ARNER \712931.1
The following chart illustrates all costs incurred by the Agency specific to the Agreement
to date as well as projected costs through June 6, 2006. These costs will not be recovered from
the Developer under the terms of the Agreement.
C) Projected Future Agency Expenditures:
Estimated Value of the Interest to be Conveyed
The Agency requested that a local real estate broker (Henry.Nunez Real Estate
Company, Inc.) provide an opinion letter to determine the value of the Property based upon
current zoning, land use, and redevelopment requirements. Based upon this analysis, it was
determined that the Property is valued at Seven Hundred Fifty Thousand Dollars ($750,000) to
Eight Hundred Thousand Dollars ($800,000) per parcel which together total One Million Five
Hundred Thousand Dollars ($1,500,000) to One Million Six Hundred Thousand Dollars
($1,600,000) for the Property. This opinion letter is attached as Exhibit "B" to this Report.
Purchase Price to be Paid by the Developer
The Agreement provides that the Developer will purchase the Property from the Agency for
a Purchase Price of One Dollar ($1.00). The Purchase Price is to be paid by the Developer and
delivered to the Agency at the close of the escrow.
Because the fair market value of the Property is estimated to be One Million Five
Hundred Thousand Dollars ($1,500,000) to One Million Six Hundred Thousand Dollars
($1,600,000) and the Purchase Price to be paid by the Developer is One Dollar ($1.00) the
consideration paid by the Developer for the Property is less tharr-the fair market value of the -
Property at its higheM,and best use permitted under the Redevelopment Plan.
Future Agency Revenue
Affordable housing projects do not produce significant revenue to the Agency or City.
Based upon State mandated sales prices for affordable units, the total revenue (property tax) to
the Agency will be approximately Twelve Thousand One Hundred Eighty Dollars ($12,180)
annually.
Affordable Housing Benefits
The creation of affordable housing in City is a requirement by the California
Redevelopment Law ( "CRL "). In fact, twenty percent (20 %) of the Agency's annual gross tax
increment is required to be-used to create affordable housing ( "Housing Funds "). The proposed
project is consistent with redevelopment goals as outlined in the Redevelopment Plan and the
Implementation Plan. It assists. the City in meeting its Regional Housing Needs Assessment
( "RHNA") requirement for moderate income housing and relieves the Agency of any legal
requirements for excess surplus for FY 2005 -06 (the Agency will continue to face excess
RVPUB\KV ARNER \712931.1
surplus issues because on average, the Agency collects approximately Seven Hundred
Thousand Dollars ($700,000) Housing Funds annually.)
Bliaht Alleviation
The Property is currently unimproved and is being used as a parking lot for patrons and
employees of the downtown area. While the Property serves as overflow parking for
businesses and patrons in the downtown area, it is also used as parking /storage for inoperable
vehicles which creates police and code enforcement problems.
The Property has constituted a blighting influence on the Project Area because: (1) it has
remained in an underutilized and economically stagnant condition, (ii) it has not contributed to the
general health and welfare of the City and (iii) it has detracted from the City's image as a positive
and healthy place to live and work.
The proposed Agreement provides for the redevelopment of the Property by the
construction of six (6) condominium style owner - occupied multi family residential units. Pursuant to
the proposed Agreement, residences will incorporate a unique architectural style and a mix of
private patio and common space areas. Such redevelopment activity will alleviate blight in the
Project Area by: (i) alleviating the underutilized and economically stagnant condition of the
Property, (ii) promoting the City's image as a positive and healthy place to live and work, (iii)
increasing available housing within the Project Area, and (iv) introducing new economic- activity to
the Project Area.
Conformance with the Agency's Five Year Implementation Plan
The Agency's Implementation Plan Fiscal Years 2004/05 through 2008/09 (adopted on
December 7, 2004 by Resolution No. ARA 211) ( "Implementation Plan "), is on file and available
for review in the Development Services Department. The Agency's Five -Year Implementation
Plan contains several broad redevelopment goals and objectives. Among these are the following:
Encourage the revitalization of the Project Area's underutilized and economically
stagnant areas to create an aesthetic, healthy and functional environment;
• Promote the productive and efficient use of property and improving the tax base within
the Project Area;
Arrest and eliminate deterioration of property within the Project;
RVPUBVNARNER \712931.1
Improve the image of the City as a positive and healthy place to live and work; and
Providing affordable housing within the Project Area.
The proposed Agreement will assist the Agency in meeting, the goals and objectives of the
Agency, as established in the Agency's Five -Year Implementation Plan, in the following ways:
The Property will be revitalized by new residential development that will: (1) alleviate the
underutilized and economically. stagnant condition of the Agency Parcel, and (ii) promote
the City's image as a positive and healthy place to live and work.
The residential development will increase the available housing stock within the City and
strengthen the City's economic base in order to encourage additional new private
enterprises and development.
Based on the preceding factors, the proposed Agreement is consistent with the Agency's Five -Year
Implementation Plan.
Consistent With the General Plan
The Planning Commission at its meeting on April 10, 2006, found that the proposed
Project is consistent with the General Plan.
Exhibit A — Location Map
Exhibit B — Opinion Letter
Exhibit C — Agreement
R V PUB\K V ARNER17l 2931.1
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GOORUIRATEy LAR SERVICES
March 27, 2005
Brian Saeld
Economic Development Manager
City of Arcadia
240 West Huntington Dr.
Arcadia, CA 91006
I have conducted a price analysis for the subject properties at 119 & 121 Alta`
Street in Arcadia Parcel no. 5773 -014 -912 and 5773- 014 -013 both measure 50 x
160 for acombined total of 16,000 square fed and have alley access at the rear of
the lots. The properties are currently used as parking lots but for this analysis a
high density R-3 use has been presumed.
The value range for each lot is $750,000 to $800;000.
If I can be of more help or detail, please do not hesitate to call.
S1nee�,
HmryNunez
Henry Nunez Real Estate Company, Inc.
EXHIBIT B
11 E Huntington Drive * Arcadia, CA * 91006 * 626- 254 -0524
PRELIMINARY EXEMPTION ASSESSMENT
(Certificate of Determination when attached to Notice of Exemption)
Name or description of project: Alta Street Affordable Housing Project
Location: 119 and 121 Alta Street
3. Entity or person undertaking project:
X A. Arcadia Redevelopment Agency
B. Other (Private)
(1) Name:_
(2) Address:
4. Staff Determination:
The City's Staff, having undertaken and completed a preliminary review of this project in
accordance with the City's "Local Guidelines for Implementing the California
Environmental Quality Act (CEQA)" has concluded that this project does not require
further environmental assessment because:
a. The proposed action does not constitute a project under CEQA.
b. The project is a Ministerial Project.
C. The project is an Emergency Project.
d. The project constitutes a feasibility or planning study.
e. X The project is categorically exempt.
Applicable Exemption Class: 32
f. The project is statutorily exempt.
Applicable Exemption:
g. The project is otherwise exempt on the following basis:
The project involves another public agency which constitutes the
Lead Agency: Name of Lead Agency
Date: June 6, 2006 Brian Saeki
Staff
Attachment 3 7/02
LAND RESIDUAL ANALYSIS
119 E. ALTA (8.0 Single- Family Unite)
CITY OF ARCADL44 CA
Average Sales Price
Unit Size (Average)
Total Sq. ft.
Lot Size
Construction Loan Amount
Less: Sales Commission
Less: Devekmment Profit
Lend Acquisition
Direct Costs
Demolition
Off -Site Work
On-She Work
Building Shell
Total Direct Costs
Indirect Costs
Architecture] Fees
Engineering Fees
Permits & Fees
Legal & Accounting Fees
Insurance
CloanglEsww Fees
Marketing
General Contractor Fee
Developer Fee as a % of Sales
Contingency
Total Indirect Coate
Financing Cost
Loan Few (as a % of Construction Loan)
Construction Interest @ 80% AOB, 8.75 %,
Total Financing Cost
Building Shell (Cost per st)
On -Site Work (Cost per unit)
OLfsits Work (Cost per unit).
Non -lend Cost per Unit
Non -land Cost per Square foot
Construction Period
4.0% of sales
15.0% of sales
93.75
3.00 5.65
6.00 11.31
93.00
$ 109.99
� ne
8,000
16,000
131,595
S 155,595
(47,604)
(178,515)
11 ae see
48,000
96,000
OUR ,.
% of Direct Cost
$ /sf bldg
msuna
I ..,_
7.7%
8.48
12,000
72,000
3.0%
3.30
4,668
28,007
4.3%
4.73
6,700
40,200
2.4%
2.64
3,734
22,406
26.8%
29.45
41,667
250,000
1.0%
1.10
1,556
9,336
1.0%
1.10
1,556
9,336
15.0%
16.49
23,339
140,036
4.2%
5.89
.8,333
50,000
7.0%
7.70
10,892
65,350
$ 80.88
S 114,445
��:: >« ?its`' "' . ..................
. ...�..,...... »
2.50%
2.59
3,671
72,024
8.75%
5.45
7,708
46,249
7.31%
$ 8.04
$ 11,578
PROJECT FEASIBILITY GAP.';' i" . i';a'. ° '
redanen oewcr nema any, uc Attachment 4 NO Crebled: 020108
Nte SeeetPrtpoeodIA.1V Derebpmanf Gate N O d: 0YnU06
OeN Printed: 5,P2008
RESOLUTION NO. ARA -221
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF
THE CITY OF ARCADIA, CALIFORNIA, APPROVING AN
AFFORDABLE HOUSING AGREEMENT BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
AND TRADEMARK DEVELOPMENT COMPANY
CONCERNING THE DEVELOPMENT OF A SIX (6)- UNIT
OWNER OCCUPIED AFFORDABLE HOUSING PROJECT
LOCATED AT 119 AND 121 ALTA STREET IN THE CITY OF
ARCADIA
WHEREAS, pursuant to the provisions of California Community
Redevelopment Law (California Health and Safety Code Section 33000 et gq.)
( "CRL "), the City Council ( "City Council ") of the City of Arcadia ( "City") approved
and adopted a redevelopment plan ( "Redevelopment Plan") for the'
Redevelopment Project Area ( "Project Area "); and
WHEREAS, the Agency is engaged in activities necessary to execute and
implement the Redevelopment Plan for the Project Area; and
WHEREAS, the Agency owns two (2) parcels of real property within the Project
Area approximately sixteen thousand (16,000) square feet in size located at 119 Alta
Street and 121 Alta Street the City and identified as Assessor Parcel Numbers 5773-
014 -912 and 5773 - 014 -913 ( "Property"); and
WHEREAS, Trademark Development Company, a California limited liability
company ( "Developer ") desires to acquire the Property from the Agency and construct
on the Property six (6) owner - occupied multifamily residences ( "Project ") reserved for
occupancy, for a period of at least forty-five (45) years by families whose household
earnings do not exceed one hundred twenty percent (120 %) of Los Angeles County
median income; and
WHEREAS, to assist in the development of the Project on the Property, the
Agency desires to provide the Developer a loan in an amount not to exceed Seven
Hundred Sixty Thousand Dollars ($760,000) to assist the Developer in financing the
development of the Project on the Property ( "Agency Development Loan"); and
WHEREAS, the Agency and the Developer have negotiated the terms of an
affordable housing agreement entitled "Affordable Housing Agreement (119/121 Alta
Street)" ( "Agreement "), which provides, among other things, for the Developer's
development of the Project on the Property and the Agency's provision of the Agency
Development Loan to the Developer; and
WHEREAS, a copy of the Agreement is attached to this resolution
( "Resolution ") as Exhibit "A' and incorporated into this Resolution by this reference;
and
WHEREAS, the Agency has determined that implementation of the Agreement:
(i) is in the best interests of the City and the Agency and the health, safety and welfare
of the City's taxpayers and residents and is in accordance with the public purposes set
forth in the Redevelopment Plan and CRL, (ii) strengthens the City's land use and
2
i
social structure; (iii) alleviates economic and physical blight in the City; and (iv)
provides needed affordable housing in the City; and
WHEREAS, pursuant to Government Code Section 65402, the Planning
Commission of the City must determine prior to the time of conveyance of the Property
to the Developer that the location, purpose, extent and development of the Project are
in conformance with the City's general plan; and
WHEREAS, pursuant to CRL Section 33433 the City Council of the City (acting
as the Agency's legislative body) must make certain findings and determinations in
connection with Agency 's sale of the Property which was acquired with Agency tax
increment revenue; and
WHEREAS, pursuant to CRL Section 33433, the Agency has prepared, and the
City Council has reviewed and considered, a summary report ( "Summary Report")
setting forth: (1) the cost of the Agreement to the Agency; (2) the estimated value of
the interest to be conveyed; and (3) an explanation of how the acquisition and
conveyance of that interest will assist in the elimination of blight within the Project
Area and the Agency has made the Summary Report available for public inspection in
accordance with CRL Section 33433; and
WHEREAS, pursuant to CRL Section 33433, on May 22, 2006, and May 29,
2006, the Agency caused notice of the a joint public hearing of the City Council and
3
the Agency's Governing Board to be published in a newspaper of general circulation
within the Agency's territorial jurisdiction; and
WHEREAS, pursuant to provisions of CRL Section 33433, on June 6, 2006, the
City Council and the Agency's Governing Board held a duly noticed joint public
hearing on the proposed Project and on the proposed Agreement; and
WHEREAS, the Project is a "project" subject to the California Environmental
Quality Act ( "CEQA "); and
WHEREAS, the Agency, as the lead agency, determines that the Project is
categorically exempt from further CEQA review pursuant to State CEQA Guidelines-
Sections 15303 and 15332 because (i) the Project involves the construction of limited
numbers of new and small multi - family residential structures totaling no more than six
(6) dwelling units in an urbanized area;, and (ii) the Project is an in -fill development
project meeting the conditions described in CEQA Guidelines Section 15332; and
WHEREAS, the Agency has determined that the requirements of Article
XXXIV of the California Constitution (which requires an election to be held in the
City in the event of the acquisition, construction or development of a low -rent housing
project) does not apply to the Project because the Project will not be developed,
constructed or acquired by the Agency; and
WHEREAS, all other legal prerequisites to the adoption of this Resolution have
occurred.
!1
I
THE ARCADIA REDEVELOPMENT AGENCY OF THE CITY OF
ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE
AS FOLLOWS:
SECTION I . The Agency's Board of Directors approves the Agreement,
in substantially the form presented to the Board of Directors and attached hereto as
Exhibit "A" and incorporated herein by reference.
SECTION 2 . The Executive Director is hereby authorized and directed to
execute the Agreement on behalf of the Agency, together with such changes and
amendments as may be approved by both the Executive Director and Agency Counsel.
The Executive Director is further authorized to take any actions and execute any and
all necessary documents to implement the Agreement.
SECTION 3 . The Agency determines that approval of the Agreement is
categorically exempt from the requirements of CEQA pursuant to State CEQA
Guidelines Sections 15303 and 15332 and directs Agency staff to file a Notice of
Exemption with the Los Angeles County Clerk's Office within three (3) days of the
adoption of this Resolution.
SECTION 4 . This Resolution shall take effect immediately upon its
adoption.
5
SECTION 5. The Agency Secretary shall certify to the adoption of this
Resolution.
Passed, approved and adopted this 6th day of June , 2006.
/S/ ROGER CHANDLER
Chairman
Arcadia Redevelopment Agency
ATTEST:
T&
•
Secretary of the
Arcadia Redevelopment Agency
APPROVED AS TO FORM:
4 (). /��
Agency Attorney
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS:
CITY OF ARCADIA )
I, JAMES H. BARROWS, Secretary of the Arcadia Redevelopment Agency of
the City of Arcadia, hereby certifies that the foregoing Resolution No. ARA -221 was
passed and adopted by the Arcadia Redevelopment Agency of the City of Arcadia,
signed by the Chairperson and attested to by the Secretary at a regular meeting of said
Agency held on the 6th day of June, 2006 and that said Agency Resolution was
adopted by the following vote, to wit:
AYES: Agency Members Amundson, Segal, Wuo and Chandler
NOES: None.
ABSENT: Agency Member Harbicht
a m/ JAMES H. BARROWS
Secretary of the Arcadia
Redevelopment Agency
7
` 19 6USSION DRAFT 1
MAY 9, 2006
AFFORDABLE HOUSING AGREEMENT
(119 Alta Street 1121 Alta Street)
between
THE REDEVELOPMW AGENCY OF THE CITY OF ARCADIA
a public body, corporate and politic
and
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
[Dated as of June 6, 2006, for reference purposes only]
RV PUB VCV ARNER1710715.1
This AFFORDABLE HOUSING AGREEMENT (119 Alta Street / 121 Alta Street)
( "Agreement ") is reference dated as of June 6, 2006, by and between THE REDEVELOPMENT
AGENCY OF THE CITY OF ARCADIA, a public body corporate and politic ( "Agency "), and
TRADEMARK DEVELOPMENT COMPANY, a California limited liability company ( "Developer ").
The Agency and the Developer are sometimes referred to in this Agreement, individually, as a "Party"
and, collectively, as "Parties." This Agreement is entered into with reference to the following recitals of
fact ( "Recitals "):
RECITALS
A. Pursuant to the provisions of California Community Redevelopment Law (Health and
Safety Code Section 33000 et seg.) ( "CRL'), the City Council ( " City:Council') of the City of Arcadia
( "City ") approved and adopted a redevelopment plan ( " Redevelopment Plan') for the Central
Redevelopment Project Area ( "Project Area ") on December 26, 1973 by Ordinance Number 1490.
B. The Agency is engaged in activities necessary to execute and implement the
Redevelopment Plan for the Project Area.
C. The Agency owns two (2) parcels of real property approximately sixteen thousand
(16,000) square feet in size located at 119 Alta Street and 121 Alta Street the City and identified as
Assessor Parcel Numbers 5773 -014 -912 and 5773- 014 -913 ( "Property"). The Property is legally
described in Exhibit A attached to this Agreement and incorporated into this Agreement by this reference.
A site map depicting the,Properlyis attached to this Agreement as Exhibit B and is incorporated into this
Agreement by this reference. ThB Property is located within the Project-,Area.
D. The Developer desires to acquire the Property from the Agency and construct on the
Property six (6) owner- occupied multifamily residences ( "Project ") reserved for occupancy, for a period
of at least forty-five (45) years, by families whose household earnings do not exceed one hundred twenty
percent (120 %) of Los Angeles County median income. The Project is more particularly described in the
scope of development ( "Scope of Development ") attached to this Agreement as Exhibit C and
incorporated into this Agreement by this reference.
E. To assist in the development of the Project on the Property, the Agency desires to: (i)
transfer the Agency's fee interest in the Property to the Developer for a purchase price of One Dollar
($1.00); (ii) provide the Developer a loan in an amount not to exceed Seven Hundred Sixty Thousand
Dollars ($760,000) to assist the Developer in financing the development of the Project on the Property
("Agency Development Loan").
F. This Agreement and the exhibits attached to this Agreement ( "Exhibits ") implement the
goals and objectives of the Agency and the City for the disposition of the Property and the development
of the Project on the Property which will benefit the affordable housing needs of the City and assist the
Agency in meeting its inclusionary housing, obligations as set forth in the Redevelopment Plan and CRL.
The development of the Project'on the Property pursuant to this Agreement is in the best interests of the
City and the Agency and the health, safety and welfare of the City's taxpayers and residents and is in
accordance with the public purposes set forth in the Redevelopment Plan and CRL. Implementation of
this Agreement will further the goals and objectives of the Redevelopment Plan and the City's general
plan by: (i) strengthening the City's land use and social structure; (ii) alleviating economic and physical
blight within the Project Area; and (iii) providing needed affordable housing in the City.
RVPUBVCVARNER1710715.1 -I-
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the
Agency and the Developer, the Parties agree as follows:
TERMS AND CONDITIONS
ARTICLE I
DEFINITIONS; PARTIES; REPRESENTATIONS
AND WARRANTIES; EFFECTIVE DATE
1.1 Definitions All initially capitalized terms not otherwise defined in this Agreement shall
have the following meanings:
1.1.1 Adiusted Family Income The term "Adjusted Family Income" shall mean
the anticipated total annual income (adjusted for family size) of each individual or family residing or
treated as residing in a New Home as calculated in accordance with Treasury Regulation 1.167(k) -
3(b)(3) under the United States Internal Revenue Code, as adjusted, based upon family size in accordance
with the household income adjustment factors adjusted and amended from time to time, pursuant to
Section 8 of the United States Housing Act of 1937, as amended.
1.1.2 Affordable Housing Cost The term "Affordable Housing Costs" shall have
the meaning set forth in California Health and Safety Code Section 50052.5, as it may be amended from
time to time through the term of the Regulatory Agreement.
1.13- Affordable Housing Funds The term "Affordable Housing Funds" shall
mean that portion of the Agency's'general property tax increment allocation set aside pursuant to CRL
Section 33334.2 for the purposes of increasing, improving, providing and preserving the community's
supply of affordable housing available to persons and families of low or moderate income.
1.1.4 Agency The term "Agency" shall mean the Redevelopment Agency of the
City of Arcadia, a public body corporate and politic, and any assignee of or successor to its rights, powers
and responsibilities.
1.1.5 Agency Development Deed Of Trust The term "Agency Development Deed
of Trust" shall mean that certain Agency Development Deed of Trust attached hereto as Exhibit J
securing the Developer's obligation to repay the Agency Development Loan and the fair market value of
the Property pursuant to the terms'of this Agreement and the Agency Development Promissory Note.
1.1.6 Agency Development Loan The term "Agency Development Loan" shall
mean a loan in an amount not to exceed Seven Hundred Sixty Thousand Dollars ($760,000) from the
Agency to the Developer in order to assist the Developer in financing the development of the Project on
the Property.
1.1.7 Agency Development Promissory Note The term "Agency Development
Promissory Note" shall mean that certain promissory note attached hereto as Exhibit I evidencing the
Developer's obligation to repay the Agency Development Loan and the fair market value of the Property
pursuant to the terms of this Agreement and the Agency Development Promissory Note. The Agency
Development Promissory Note shall be secured by the Agency Development Deed of Trust.
RVPUB\KVARNER \710715.1 •2-
1.1.8 Agencv Ouitclaim Deed The term "Agency Quitclaim Deed" shall mean the
Quitclaim Deed for the conveyance of the Property from the Agency to the Developer, substantially in the
form of Exhibit E attached to this Agreement.
1.1.9 Agency's Conditions Precedent The term "Agency's Conditions Precedent"
shall mean the conditions precedent to the Closing for the benefit of the Agency as set forth in Section
2.8.2.
1.1.10 Agency's Title Notice The term "Agency's Title Notice" shall have the
meaning ascribed to the term in Section 2.1.1.
1.1.11 Agreement The term "Agreement" shall mean this Affordable Housing
Agreement between the Agency and the Developer, including the Exhibits attached to this Agreement.
1.1.12 AMI The term "AMI" shall mean the area median income for Los Angeles
County, California adjusted for family size appropriate for a New Home by the California Department of
Housing and Community Development in accordance with adjustment factors adopted and amended from
time to time by the United States Department of Housing and Urban Development pursuant to Section 8
of the United States Housing Act of 1937, and California Health and Safety Code Section 50093.
1.1.13 CEO A . The term "CEQA" shall mean that California Environmental Quality
Act, California Public Resources Code Section 21000 et M.
1.1.14 Certificate of Co?slpletion The term "Certificate of Completion" shall mean
the Agency's written certification • that the Project is complete and in compliance with the terms and
conditions of this Agreement, substantially in the form of Exhibit F attached to this Agreement.
1.1.15 Cam. The term "City" shall mean the City of Arcadia, a California municipal
corporation and any assignee of or successor to its rights, powers and responsibilities.
1.1.16 City Council The term "City Council" shall mean the duly elected
governing body of the City.
1.1.17 ' Close of Escrow: Closing The terms "Close of Escrow" and "Closing" shall
mean the date when the Escrow Holder is in receipt of all necessary documents and the Escrow Holder is
in a position to comply with the final written instructions of the Parties and causes the Agency Quitclaim
Deed to be recorded and the Developer's Title Policy to be delivered to the Developer.
1.1.18 Closing Date The term "Closing Date" shall mean the date of the Closing,
as set forth in Section 2.11.
1.1.19 Closing Statement The term "Closing Statement" shall mean the statement
prepared by the Escrow Holder indicating among other things, the Escrow Holder's estimate of all funds
to be deposited or received by the Agency or the Developer and all charges to be paid by the Agency or
the Developer through the Escrow.
1.1.20 Completion Guarantee The term "Completion Guarantee" shall mean a
guarantee from the Developer guaranteeing to the Agency the completion of the Project in accordance
with this Agreement, substantially in the form of Exhibit K attached hereto.
RVPUB\KVAMER \710715.1 -3-
1.1.21 Completion of Construction The term "Completion of Construction" shall
mean the issuance by the City of all final (not temporary) certificates of occupancy required for the
occupancy of each and every New Home in Project.
1.1.22 Construction The term "Construction" shall mean the work of improvement
to be performed on the Property in accordance with the terms and conditions of this Agreement.
1. 123 Construction Loan The term "Construction Loan" shall mean a Loan
obtained by the Developer from an institutional Lender or other Lender making such Loans in the normal
course of its business to finance all or part of the Project Costs, which shall be secured by a Lien..
1.1.24. CRL. The term "CRL" shall mean California Community Redevelopment
Law (California Health and Safety Code Section 33000 et sec .)>
1.1.25 Default The term "Default" shall mean the failure of a Party to perform any
action or covenant required by this Agreement within the time period provided for such performance in
this Agreement following any provided notice and opportunity to cure.
1.1.26 Developer The terns "Developer" shall mean Trademark Development
Company, LLC, a California limited liability company, and any voluntary successors and assigns to
which a Permitted Transfer of the Project may be made, as authorized by the provisions of this
Agreement.
1.1.27 Developer's Conditions Precedent -„ The term "Developer's Conditions
Precedent" shall mean -the conditions precedent to the Closing for the benefit of the Developer as set forth
in Section 2.8.1.
1.1.28 Developer's Due Diligence Completion Certificate The term "Developer's
Due Diligence Completion Certificate" shall have the meaning ascribed to the term in Section 2.3.1.7.
1.1.29 Developer's Prelimiriga Title Repork The term "Developer's Preliminary
Title Report" shall have the meaning ascribed to the term in Section 2.1.1. "
1.1.30 Developer's Survey The term "Developer's Survey" shall mean a survey of
the Property prepared by a land surveyor duly licensed by the State of California and in compliance with
ALTA/ASCM land survey standards.
1.1.31 Developer's Survey Obiection Notice The term "Developer's Survey
Objection Notice" shall have the meaning ascribed to the term in Section 2.2.
1.1.32 Developer's Title Objection Notice The term "Developer's Title Objection
Notice" shall have the meaning ascribed to the term in Section 2.1.1.
1.1.33 Developer's Title Policy The term "Developer's Title Policy" shall mean
the Title Company's ALTA extended owner's policy of title insurance, with liability in an amount equal
to the fair market value of the Property insuring fee title to the Property vested in the Developer and
subject only to: (i) non - delinquent real property taxes and assessments; (ii) non - monetary title exceptions
approved by the Developer pursuant to Section 2.1; (iii) the provisions of the Agency Quitclaim Deed;
(iv) the applicable provisions of this Agreement; and (v) such other title exceptions, if any, resulting from
documents being recorded or delivered through Escrow.
RVPUB\RVARNER \710715.1 A.
1.134 Due Diligence Period The term "Due Diligence Period" shall mean the date
commencing upon the Effective Date of this Agreement and expiring at 5:00 p.m. Pacific Standard Time
(GMT — 8:00) on the thirtieth (30th) calendar day thereafter.
1.1.35 Effective Date The term "Effective Date" shall have the meaning ascribed
to the term in Section 1.5.
1.1.36 Environmental Laws The term `Environmental. Laws" shall mean all
federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes; decrees, or
requirements of any government authority regulating, relating to, or imposing liability of standards of
conduct concen any hazardous substance (as later defined), or pertaining to occupational health or
industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws,
ordinances, or regulations relate to hazardous substances on, udder, or about the Property), occupational
or environmental conditions on, under, or about the Property, as now or may at any later time be in effect,
including without limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ( "CERCLA'� [42 USC Section 9601 et sue.]; the Resource Conservation and Recovery Act
of 1976 ( "RCRA'� [42 USC Section 6901 et M.]; the Clean Water Act, also known as the Federal Water
Pollution Control Act_;("FWPCA') [33 USC Section 1251 et M.]; the Toxic Substances Control Act
( "TSCA') [15 USC Section 2601 gt gq.]; the Hazardous Materials Transportation Act ( "HMTA ") [49
USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seMc .] the
Clean Air Act [42 USC Section 7401 et M.]; the Safe Drinking Water Act [42 USC Section 300f et
nq.]; the Solid Waste Disposal Act [42 USC Section 6901 et saq.]; the Surface Mining Control and
Reclamation Act [30 USC Section 101 et Ms .] the Emergency Planning and Community Right to Know
Act [42 USC Section 11061 et seq.] the Occupational Sd2'ety and Health Act (29 USC Sectiop 655 and
657]; the California Underground Storage of Hazardous Substances Act [California Health and Safety
Code Section 25288 et MJ; the California Hazardous Substances Account Act [California Health and
Safety Code Section 25300 et gN.]; the California Safe Drinking Water and Toxic Enforcement Act
[California Health and Safety Code'Section 24249.5 et M.] the Porter - Cologne Water Quality Act
[California Water Code Section 13000 et Mg.] together with any amendments of or regulations
promulgated under the statutes cited above and any, other federal, state, or local law, statute, ordinance, or
regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and
only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to
hazardous substances on, under, or about the Property, or the regulation or protection of the environment,
including ambient air, soil, soil vapor, groundwater, surface water, or land use.
1.1.37' Escrow The term "Escrow" shall mean an escrow account opened with
Escrow Holder for the conduct of the purchase and sale transaction described in this Agreement
1.1.38 Escrow Holder The term "Escrow Holder" shall mean
located at California.
1.1.39 Executive Director The term "Executive Director" shall mean the Executive
Director of the Agency or his or her designee or successor in function.
1.1.40 Fair Market Value The term "Fair Market Value" shall have the meaning
ascribed to the term in Section 2.5.
1.1.41 Financing Commitments The term "Financing Commitments" shall mean
irrevocable commitments, subject only to customary and reasonable conditions precedent from a Lender
for financing the construction, ownership and use of the Project.
RVPUBVCVARNER1710715.1 -
"r
1.1.42 Financing Plan The term "Financing Plan" shall mean the description of the
proposed method of financing the Construction of the Project on the Property, which is attached as
Exhibit H to this Agreement, which, together with the Project Budget, illustrates the financing structure of
the Project.
1.1.43 FIRPTA The term "FIRPTA" shall mean the United States Foreign
Investment in Real Property Transfer Act.
1.1.44 First Installment The term "First Installment" shall mean the first
installment of the Agency Development Loan distributed by the Agency to the Developer as provided in
Section 3.4.1.2.1.
1.1.45 First Mortgage Financing The term "First Mortgage Financing" shall mean
any of the following: (i) the Construction Loan; (ii).the Permanent Loan; or (iii) any Replacement Loan
refinancing any Construction,Loan and/or any Permanent Loan so long as the total amount refinanced
does not exceed the total original principal amount of each Construction Loan and/or Permanent Loan.
1.1.46 Fiscal Year The term "Fiscal Year' shall mean a twelve (12) calendar
month period commencing on July 1 of one year and ending on June 30 of the immediately following
year.
1.1.47 Governing Bodv The term "Governing Body" shall mean the governing
body of the Agency.
1.1.48 Gove'ttimental Agency The term "Governmental Agency" shall mean any
and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any
governmental entity (federal, state, county, district, municipal, city, or otherwise) whether now or later in
existence.
1.1.49 Governmental Requirements The term "Governmental Requirements" shall
mean all codes, statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated
thereunder of any Governmental Agency having jurisdiction, partial or otherwise over the Property or the
Project.
1.1.50 Hazardous Substances The term "Hazardous Substances" shall mean: (i)
those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous
material;' "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA,
HMTA, or under any other Environmental Laws; (ii) those substances listed in the United States
Department of Transportation (`DOT ") Table [49 CFR 172.1011, or by the EPA, or any successor agency,
as hazardous substances [40 CFR Part 302]; (iii) other substances, materials, and wastes that are or
become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and
(iv) any material, waste, or substance that is a petroleum or refined petroleum product, asbestos,
polychlorinated biphenyl designated as a hazardous substance pursuant to 33 USC Section 1321 or listed
pursuant to 33 USC Section 1317, a flammable explosive, or a radioactive material.
1.1.51 Land Use Laws The term "Land Use Laws" shall have the meaning
ascribed to the term in Section 2.4.1.
1.1.52 Lender The term "Lender" shall mean a mortgagee or a beneficiary of a
Lien and shall include its successors and assigns.
RVPUB\KVARNER \710715.1 -6-
1.1.53 Lien. The term' "Lien" shall mean any mortgage, deed of trust or other
security instrument encumbering the Developer's fee interest in the Property and/or Project, or any part
thereof.
1.1.54 Loan. The term "Loan" shall mean any loan made as permitted by this
Agreement.
1.1.55 Marketing Application and Initial Owner Selection Plan The term
"Marketing Application and Initial Owner Selection Plan" shall mean the 'marketing application and
initial owner selection plan attached to this Agreement as Exhibit L and incorporated into this Agreement
by this reference.
1.1.56 Net Proceeds The term "Net Proceeds" shall mean the proceeds of any Loan
less the repayment from such Net Proceeds of any Loan made prior in time to said Loan and less any fees
or charges paid out of or reimbursed from the gross proceeds of such Loan, including, without limitation,
broker's commissions and fees, loan commitment fees or other charges assessed by the Lender for making
the Loan, normal closing costs, title insurance premiums, and attorneys' fees. Net Proceeds shall be
determined on a cash basis:
1.1.57 New Homes The term "New Homes" shall mean the six (6) multi- family
residences constituting the Project. The term "New Home" shall mean one (1) of the multi- family
residences in the Project.
1.1.58 Normal Business Hours The term "Normal Business Hours" shall mean any
weekday, Monday througl Friday, between the hours of 8:00 a.m. and 5:00 p.m. Pacific Standard Time.
1.1.59 Opening of Escrow The term "Opening of Escrow" shall have the meaning
ascribed to the term in Section 2.6.
1.1.60' Outside Closing Date The term "Outside Closing Date" shall mean June
30th, 2006.
1.1.61 PCO Statement The term "PCO Statement" shall mean a preliminary
change of ownership statement provided for in California Revenue and Taxation Code Section 480.3.
1.1.62 Permanent Loan The term "Permanent Loan" shall mean any Loan secured
by a Lien, the Net Proceeds of which are used in whole or in part to pay any Lender's Construction Loan.
1.1.63 Permitted Transfer The term . "Permitted Transfer" shall mean any sale,
transfer, assignment or conveyance of the Property or the Project that is approved by the Agency or is
expressly permitted by the terms of this Agreement.
1.1.64 Prime Rate The term "Prime. Rate ".shall mean the prime rate of interest or
the equivalent thereof established by Bank of America or if Bank of America is no longer in existence,
then by the largest commercial bank located in California on the date of payment.
1.1.65 Proiect The term "Project' shall mean the Construction, of six (6) multi-
family owner - occupied residences to be owned and occupied by Qualified Households. The Project is
more particularly described in the scope of development ( "Scope of Development ") attached to this
Agreement as Exhibit C and incorporated into this Agreement by this reference.
RVPUB\KVARNM \710715.1 -7-
1.1.66 Proiect Area The term "Project Area" shall mean the Central
Redevelopment Project Area adopted by the City Council of the City on December 26, 1973 by
Ordinance Number 1490.
1.1.67 Proiect Budget The term "Project Budget" shall mean the budget of costs
and expenses projected to be necessary for the Developer to acquire the Property and construct the Project
on the Property which is attached to this Agreement as Exhibit H and incorporated into this Agreement by
this reference.
1.1.68 Project Costs The term "Project Costs" shall mean the total cost incurred by
the Developer in acquiring the Property and constructing the Project on the Property, consistent with the
Project Budget and in accordance with terms and conditions of this Agreement.
1.1.69 Project Entitlements The term "Project Entitlements" shall mean the precise
plan, parcel map, variances, zone changes, and grading permits necessary for development of the Project
on the Property to be approved by the City. Project Entitlements shall not include building permits or the
formation or approval of districts, bonds or exactions (including, but not limited to, special assessments
and special taxes) necessary to finance, directly or indirectly, the construction of public improvements or
the provision of public services necessary for the Project. Project Entitlements also shall not include
permits to occupy or operate after initial completion of construction has occurred.
1.1.70 Property The term "Property" shall mean the real property legally described
in Exhibit A and depicted in Exhibit B which is owned by the Agency and shall be conveyed to the
Developer pursuant to the terms and conditions of this Agreement.
1.1.71 Purchase Price The term "Purchase Price" shall have the meaning ascribed
to the term in Section 2.4.
1.1.72 4ualified Households The term "Qualified Households" shall mean persons
and/or families who have an Adjusted Family Income which does not exceed one hundred twenty percent
(120 %) of the AMI for Los Angeles County.
1.1.73 Qualified Residence Period The term "Qualified Residence Period" as to a
particular New Home shall mean the period of time beginning on the date escrow closes for the first sale
of the New Home to a Qualified Household and ending on the date which is forty-five (45) years
thereafter.
1.1.74 Redevelopment Plan The term "Redevelopment Plan" shall mean the
redevelopment plan for the Project Area, as amended from time to time.
1.1.75 Regulatory Agreement The term "Regulatory Agreement" shall mean that
certain regulatory agreement entitled "Regulatory Agreement" to be recorded against each New Home
upon the initial sale of such New Home from the Developer to a Qualified Household, substantially in the
form attached hereto as Exhibit G ensuring that the New Home may only be sold, transferred, or
conveyed to a Qualified Household at an Affordable Housing Cost during the Qualified Residence Period.
1.1.76 Remaining_ Balance The tern "Re mainin g Balance" shall mean the
difference between the total sum of the Agency Development Loan and the First Installment distributed
by the Agency to the Developer as provided in Section 3.4.1.2.2.
RVPCBTKVARNER \710715.1 -8-
1.1.77 Schedule of Performance The term "Schedule of Performance" shall mean
the schedule for the performance of certain actions by the. Agency and the Developer, pursuant to this
Agreement which is attached to this Agreement as Exhibit D and is incorporated into this Agreement by "
this reference.
1.138 Scope of Development The term "Scope of Development" shall mean the
detailed description of the primary elements of the Project which is attached to this Agreement as Exhibit
C and is incorporated into this Agreement by this reference.
1.1.79 Title Company The term "Title Company" shall mean
Title Company located at California
1.1.80 Transfer The term "Transfer" shall mean any voluntary or involuntary sale,
transfer, assignment or conveyance of the Property, any portion thereof or interest therein, or any
agreement to do so, except for a Permitted Transfer.
1.2 Parties to Agreement
1.2.1 Agency The Agency is a public body, corporate an& politic, exercising
governmental functions and powers and organized and existing under CRL. The principal office and
mailing address of the Agency, for the purposes of this Agreement, is 240 West Huntington Drive,
Arcadia, California 91066, Attention; Executive Director, telephone (626) 574 -5401; facsimile (626)
446 -5729; with copies to Best Best & Krieger LLP, 3750 University Avenue; Suite 400, Riverside,
California 92501, Attention: Kevin,K. Randolph, Esq.; telephone (951) 686 -14a; facsimile (951) 686-
3083.
1.2.2 Developer The Developer is Trademark Development Company, LLC a
California limited liability company. The principal office and mailing address of the Developer, for the
purposes of this Agreement, is Attention: ; telephone:
facsimile with copies to
; telephone ; facsimile
1.3 Representations and Warranties
1.3.1 Agencyepresentations and Warranties The representations and warranties
of the Agency contained in this Section 1.3.1 shall be based upon the actual current knowledge of
William R. Kelly, Executive Director of the Agency, as of the Effective Date. All representations and
warranties contained in this Section•13.1 are true and correct as "of the Effective Date. The Agency's
liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in
this Agreement, shall survive the execution and delivery of this Agreement and the Closing. The Agency
hereby makes the following representations, covenants and warranties and acknowledges that the
execution of this Agreement by the Developer has been made in material reliance by the Developer on
such covenants, representations and warranties:
1.3.1.1 The Agency is a community redevelopment agency, duly formed and
operating under the CRL. The Agency has the legal power, right and authority to enter into this
Agreement and to execute the instruments and documents referenced herein, and to consummate the
transactions contemplated hereby:
1.3.1.2 The persons executing any instruments for or on behalf of the Agency
have been authorized to act on behalf of the Agency and this Agreement is valid and enforceable against
RVPUBTVARNER \710715.1 -9-
the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant
hereto or in connection therewith will, when executed, shall be valid and enforceable against the Agency
in accordance with its terms. No approval, consent, order or authorization of or designation or
declaration of any other person, is required in connection with the valid execution and delivery. of and
compliance with this Agreement by the Agency.
1.3.1.3 The Agency has taken all requisite action and obtained all requisite
consents for agreements or matters to which the Agency is a party in connection with entering into, this
Agreement and the instruments and documents referenced herein and in connection with the
consummation of the transactions contemplated hereby.
1.3.1.4 The fiords used by the Agency to provide the Agency Development
Loan, originated solely from Affordable Housing Funds. There are no sources of funds other than
Affordable Housing Funds used or to be used by the Agency with respect to the funding of the Agency
Development Loan.
1.3.2, Developer Representations and Warranties The representations and
warranties of the Developer contained in this Section 1.3.2 shall be based upon the actual current.
knowledge of as of the Effective Date. All representations and warranties contained in this
Section 1.3.2 are true and correct as of the Effective Date. The Developer's liability for misrepresentation
or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive
the execution and delivery of this Agreement and the Closing. The Developer hereby makes the
following representations, covenants and warranties and acknowledges that the execution of this
Agreement by the Agency has been made in material reliance by the Agency on suClr covenants,
representations and warranties:
1.3.2.1 The Developer is a Trademark Development Company, LLC, a
California limited liability company, lawfully entitled to do business in the City. The Developer has the
legal right, power and authority to enter into this Agreement and the instruments and documents
referenced herein and to consummate the transactions contemplated hereby. The persons executing this
Agreement and the instruments referenced herein on behalf of the Developer hereby represent and
warrant that such persons have the power, right and authority to bind the Developer.
1.3.2.2 The Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement and the instruments and documents referenced
herein and the consummation of the transactions contemplated hereby, and no consent of any other party
is required for the Developer's authorization to enter into Agreement.
1.3.2.3 Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby shall result in a breach of or constitute a default under any other
agreement, document, instrument or other obligation to which the Developer is a party or by which the
Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ,
injunction, order or decree of any court or governmental body applicable to the Developer or to the
Property.
1.3.2.4 This Agreement is, and all agreements, instruments and documents to
be executed by the Developer pursuant to this Agreement shall be, duly executed by and shall be valid
and legally binding upon the Developer and enforceable in accordance with their respective terms. No
approval, consent, order or authorization of, or designation or declaration of any other person, is required
in connection with the valid execution and delivery of in compliance with this Agreement by the
Developer.
Rvrus\tcvARNeRV10715.1 -10-
1.4 Prohibition Against Change in Ownership. Management and Control of the Developer
and Assignment of Agreement The qualifications and identity of the Developer is of particular concern
to the Agency. It is because of those qualifications and identity that the Agency has entered into this
Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer shall
acquire any rights or powers under this Agreement except as expressly set forth herein.
1.4.1 The Developer shall not assign all or any part of this Agreement or any rights
hereunder prior to the issuance of the Certificate of Completion for the Project without the prior written
approval of the Agency Executive Director, which approval shall not be unreasonably conditioned,
withheld or delayed.
1.4.2 This Agreement may be terminated by the Agency prior to the Close of
Escrow if there is any material change, whether voluntary or involuntary, in membership, ownership,
management or control of the Developer (other than such changes occasioned by the death or incapacity
of any individual) that has not been approved by the Agency prior to the time of such change or the
Agency may seek other appropriate relief in the event that at any time following the Close of Escrow and
prior to issuance of the Certificate of Completion, a material change in the ownership or control of the
Developer occurs; provided, however, that (i) the Agency shall first notify the Developer in writing of its
intention to terminate this Agreement or assert any other such remedy, and (ii) the Developer shall have
thirty (30) calendar days following its receipt of such written notice to commence and thereafter diligently
and continuously proceed with the cure of the default of the Developer hereunder and submit evidence of
the initiation of satisfactory completion of such cure to the Agency in a form and substance deemed
satisfactory to the Agency, in its reasonable discretion.
1.4.3 For the purpose of Section 1.4 the words "material change" refer to any total
or partial sale, assignment, or conveyance, or any trust power or any transfer in any other mode or form
by the Developer.
1`:5 Effective Date This Agreement is dated June 6, 2006 for reference purposes only. This
Agreement shall not become effective until the date on which all of the following are true ("Effective
Date'): (i) this Agreement is approved and executed by the appropriate authorities of the Developer and
delivered to the Agency; (ii) following all legally required: notices and hearings, this Agreement is
approved by the Agency's Governing Board after the City Council of the City has made the findings
required by CRL Section 33433; and (iii) this Agreement is executed by the authorized representatives of
the Agency and delivered to the Developer.
1.6 Exhibit List The following is a list of the Exhibits attached to this Agreement. Each of
the Exhibits is incorporated by this reference into this Agreement.
Exhibit A
Legal Description of Property
Exhibit B
Site Map of Property
Exhibit C
Project Scope of Development
Exhibit D
Project Schedule of Performance
Exhibit E
Agency Quitclaim Deed
Exhibit F
Certificate of Completion
Exhibit 'G
Regulatory Agreement
Exhibit
Project Budget and Financing Plan
Exhibit I
Agency Development Promissory Note
Exhibit 7
Agency Development Deed of Trust
Exhibit K
Completion Guarantee
Exhibit L
Marketing Application and Initial Owner Selection Plan.
RVPU13\KVA2NER \710715.1 •I 1-
ARTICLE lI
ACQUISMON AND CONVEYANCE OF PROPERTY
2.1 Review and Approval of Condition of Title of Property by the Developer
2.1.1 As soon as practicable following the Opening of Escrow, the Agency shall
cause to be delivered to the Developer a preliminary title report for an ALTA extended owner's policy of
title insurance issued by the Title Company, together with copies of all documents identified in Schedule
'B" of the report ( "Developer's Preliminary Title Report'), for the Property. The Developer shall notify
the Agency in writing ( "Developer's Title Objection Notice') prior to the expiration of the Due Diligence
Period of any objections the Developer may have to the matters set forth in Schedule "B" of the
Developer's Preliminary Title Report. The Agency shall have a period of twenty (20) calendar days after
receipt of the Developer's Title Objection Notice in which to deliver written notice to the Developer
( "Agency's Title Notice ") of the Agency s election to either: (i) remove the objectionable items prior to
the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the
Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the
Agency's activities. If the Agency notifies the Developer of its election to decline to remove any such
title exceptions objected to in the Developer's Title Objection Notice, the Developer shall have the right,
by written notice delivered to the Agency within five (5) business days after the Developer's receipt of
the Agency's Title Notice, to agree to either accept the Property subject to the objectionable items
identified in the Developer's Title Objection Notice and the Developer shall take title to the Property as
the Close of Escrow subject to such objectionable title matters, or terminate this Agreement and cancel
the Escrow at no liability to either the Agency or the Developer: In the event that the Escrow is
terminated by the Developer under this Section 2.1.1, the Agency shall be responsible for paying for all
Escrow cancellation costs of the Escrow Holder.
2.1.2 Upon the issuance of any amendment or supplement to the Developer's
Preliminary Title Report for the Property that adds additional exceptions (including, but not limited to,
adding additional exceptions for matters shown on the Developer's Survey), the foregoing right of review
and approval shall also apply to said amendment or supplement (provided that the period for the
Developer to review such amendment or supplement shall be the later of the expiration of the Due
Diligence Period or ten (10) calendar days from receipt of the amendment or supplement) and Escrow
shall be deemed extended by the amount of time necessary to allow such review and approval in the time
and manner set forth in this Section 2.1.2.
2.2 Developer's Survey The Developer, at its sole cost and expense, may obtain a survey of
the Property ("Developer's Survey "). The Developer's Survey shall be in a form acceptable to the Title
Company for the deletion of the standard survey exception in the Agency's Title Policy relating to
boundaries, without the addition of further exceptions, unless the same are acceptable to the Developer, in
its sole and absolute discretion. The Developer shall have until the end of the Due Diligence Period to
complete and examine the Developer's Survey and to notify the Agency in writing of any objections the
Developer has to the Developer's Survey ( "Developer's Survey Objection Notice "), The Agency shall
have a period of five (5) business days after receipt of the Developer's Survey Objection Notice in which
to deliver written notice to the Developer ( "Agency's Survey Notice') of the Agency's election to either:
(i) agree to remove objectionable items identified in the Developer's Survey Objection Notice prior to the
Close of Escrow or (ii) decline to remove such items and terminate this Agreement and the Escrow. If the
Agency notifies the Developer of its intention not to remove objectionable items identified in the
Developer's Survey Objection Notice, the Developer shall have the right, by written notice delivered to
RVPUHVNARNER \710715.1 -12-
the Agency within five (5) business days after the Developer's receipt of the Agency's Survey Notice, to
agree to accept the Property subject to the objectionable items, in which event, the Agency's election to
terminate this Agreement and cancel the Escrow shall be of no further effect, and the Developer shall
accept the Property at the Close of Escrow subject to such objectionable items identified in the
Developer's Survey Objection Notice. In the event that this Agreement is terminated by the Agency
under this Section 2.2, the Agency shall be responsible for paying for all Escrow cancellation costs of the
Escrow Holder.
2.3 Due Diligence Investigations During the Due Diligence Period, the Developer shall
have the right to examine, inspect and investigate the Property to determine, in its sole and absolute
discretion, whether the conditions of the Property are acceptable to the Developer (`Due Diligence
Investigations').
2.3.1 Developer's Due Diligence Investigation of the Property.
2.3.1.1 No Due Diligence Investigations of the Property shall unreasonably
disrupt any then existing use or occupancy of the Property or the business operations of the Agency. The
Developer shall be liable for any damage or injury to any person or property arising from the acts of the
Developer, its employees, agents or representatives during the course of any Due Diligence Investigations
on the Property, and the Developer shall indemnify, defend with counsel reasonably acceptable to the
Agency and hold harmless the Agency and its elected officials, officers, directors, attorneys, agents and
employees from any and all liens, claims, demands or liability arising from any Due Diligence
Investigations on the Property.
2.3.1.2 Prior to commencing any Due Diligence Investigations on the
Property, the Developer shall deliver copies of policies of insurance to the Agency evidencing compliance
by the Developer with the insurance requirements of Section 4.1.19.
2.3.1.3 Due Diligence Investigations on the Property may be conducted by
the Developer and/or its agents during Normal Business Hours upon seventy-two (72) hours prior notice
to the Agency, which notice shall include a description of any investigation work or tests to be conducted
by the Developer on the Property and identifying any consultants of the Developer that will be conducting
the investigations or testing.
2.3.1.4 The Developer shall complete all of its Due Diligence Investigations
within the Due Diligence Period and shall conduct all of its Due Diligence Investigations at its sole cost
and expense. The Developer shall rely solely and exclusively upon the results of its Due Diligence
Investigations of the Property with regard to any physical condition or state of the Property, including,
without limitation, geotechnical soil conditions, compliance with applicable laws pertaining to the use of
the Property by the Developer and any other matters relevant to the physical condition or suitability of the
Property for the Project and not on any express or implied representation or warranty of the Agency.
2.3.1.5 The Agency makes no representation or warranty to the Developer
relating to the condition or suitability of the Property for any intended use or development by the
Developer. Without limiting the foregoing, the Agency makes no representations or warranties as to
whether the Property presently comply with Environmental Laws or whether the Property contain any
Hazardous Substance, except as required by law. Furthermore, to the extent that the Agency has provided
the Developer with any environmental assessments or other information relating to the condition of the
Property, including information and reports prepared by or on behalf of the Agency, the Agency makes no
representation or warranty with respect to the accuracy, completeness, methodology,or content of any
such reports or information.
RVPUBUCVARNEM710715.1 -13-
2.3.1.6 Without 'limiting the foregoing, except to the extent covered by an
express representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of
itself, and its successors and assigns, as of the Closing, waives and releases City and the Agency and its
successors and assigns from any and all demands, claims, legal or administrative proceedings, losses,
liability, damages, penalties, fines, judgments, costs or expenses whatsoever (including, without
limitation, attorneys' fees and costs), whether direct or indirect, known or unknown, foreseen or
unforeseen, arising from or relating to the condition of the Property or any law or regulation applicable to
the Property, including the presence or alleged presence of harmful or Hazardous Substances in, under or
about the Property including, without limitation, any claims under or on account of (i) CERCLA and
similar statutes and any regulations promulgated thereunder or (ii) any other Environmental Laws. As of
the Closing, the Developer expressly waives any rights or benefits available to it with respect to the
foregoing release under any provision of applicable law that generally provides that a general release does
not extend to claims that the creditor does not know or suspect to exist in his or her favor at the time the
release is agreed to; which, if known to such creditor; would materially affect a settlement. By initialing .
below, the Developer acknowledges that it fully understands the foregoing, and with this understanding,
nonetheless elects to and does assume all risk for claims known or unknown, described in this Section
2.3.1.6. Without limiting the generality of the foregoing, the undersigned acknowledges that it has been
advised by legal counsel of its own selection, and is familiar with the provisions of California Civil Code
Section 1542, and hereby expressly waives any rights it may have under such law, as well as under any
other statutes or common law principles of similar effect to California Civil Code Section 1542, which
reads, as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS/HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HMMI; MUST HAVE MATERIALLY AFFECTED HIS/HER
SETTLEMENT WITH THE DEBTOR."
Initials of the Developer
2.3.1.7 Within the Due Diligence Period, the Developer shall complete all of
its Due Diligence Investigations of the Property and deliver a certificate signed by the authorized
representative(s) of the Developer to the Agency and Escrow Holder indicating either: (i) the Developer's
unconditional acceptance of the condition of the Property, or (ii) setting forth matters or exceptions
relating to the condition of the Property that the Developer is not able to accept or resolve to its
satisfaction during the Due Diligence Period ( "Developer's Due Diligence Completion Certificate').
2.3.1.8 If the Developer does not unconditionally accept the condition of the
Property by the end of the Due Diligence Period as evidenced by the Developer's delivery of the
Developer's Due Diligence Completion Certificate, the Developer shall be deemed to have rejected the
condition of the Property and refused to accept conveyance of title to the Property. Upon such
occurrence, the Developer or the Agency shall have the right to cancel the Escrow and terminate this
Agreement, in the terminating Party's sole discretion, without liability to the other Party or any other
person, by delivery of a written notice of termination to the other Party and Escrow Holder. The
Developer shall accept all conditions of the Property, without any liability of the Agency whatsoever,
upon the Developer's acceptance of the condition of the Property.
2.3.1.9 The Due Diligence Completion Certificate indicating the Developer's
unconditional acceptance of the condition of the Property shall evidence the acceptance of the c &dition
of the Property by the Developer in its existing "AS IS," "WHERE IS" and "SUBJECT TO ALL
RVPUB\KVARNBR \710715.1 -14-
FAULTS" condition as of the last day of the Due Diligence Period. In its sole discretion, the Developer
may accept the Property in its "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition at
any time before the end of the Due Diligence Period
2.4 Project Entitlements
2.4.1 The Developer acknowledges and agrees that the Developer's use or
development of the Property shall be subject to the City's, zoning, building and land use regulations
(whether contained in ordinances, the municipal code of the City, conditions of approval or elsewhere)
(collectively "Land Use Laws'. No action by the City with reference to this Agreement or any related
documents shall be deemed to constitute a waiver of any Land Use Laws regarding the Property, the
Developer, any successor -in- interest of the Developer or any successor -in- interest to the Property. Land
Use Laws may only be changed or waived by modification or variance approved by the City. Under no
circumstances shall the Developer commence Construction of the Project on any portion of the Property
prior to the Close of Escrow. Any Project Entitlement, permit or other approval regarding the
Construction of the Project that must attach to the Property prior to the Close of Escrow shall be the
property of the Agency, without further action of either Party or any other person, but shall be transferred
to the Developer at the Close of Escrow. Notwithstanding the foregoing, the Developer and the Agency
hereby acknowledge that at the time the Developer attempts to obtain the Project Entitlements, permits
and other approvals, the Agency will be the fee simple owner of the Property. The Agency shall sign any
applications, or any other documents required by the City in connection with the obtaining of the Project
Entitlements or permit the Developer to sign such applications on behalf of the Agency, within a timely
manner.
2.4.2 The Developer shall be responsible for obtaining all Project Entitlements and
the Developer shall submit all applications therefor and shall be responsible for the costs incurred in
connection with obtaining any such Project Entitlement, unless otherwise provided herein. The
Developer shall also be responsible for satisfying all conditions of approval and mitigation measures. The
Agency shall reasonably cooperate with the Developer's efforts in obtaining any Project Entitlements.
2.4.3 The Developer shall submit the location, purpose and extent of the sale of the
Property to the City under this Agreement to the planning agency of the City, and request that such
planning agency report on the transaction contemplated in this Agreement pursuant to the provisions of
California Government Code Section 65402(c).
2.4.4 The Developer shall notify the Agency immediately upon approval of any
Project Entitlements.
2.5 Purchase and Sale of the Property: Fair Market Value of Property, Purchase Price The
Agency shall sell the Property to the Developer and the Developer shall purchase the Property from the
Agency pursuant to the terms and conditions of this Agreement. The Agency and the Developer
acknowledge and agree that the Fair Market Value of the Property as of the Effective Date of this
Agreement is One Million Svc Hundred Thousand Dollars ($1,600,000) ( "Fair Market Value "). The
Agency agrees to sell the Property to the Developer and the Developer agrees to purchase the Property
from the Agency for One Dollar ($1.00) ( "Purchase Price'), which is significantly less than the Fair
Market Value of the Property.
2.6 Opening of Escrow: Escrow Instructions The purchase and sale of the Property shall
take place through the Escrow to be administered by the Escrow Holder. The Developer shall cause the
Escrow to be opened by delivering a fully executed copy of this Agreement with Escrow Holder
( "Opening of Escrow') within ten (10) calendar days from the Effective Date. The Escrow Holder shall
RVPUB\KVARNM \710715.1 -15-
promptly confirm in writing to both of the Parties the date of the Opening of Escrow, the Escrow number
and title insurance order numbers assigned to the Escrow. The Opening of Escrow shall occur no later
than May 31, 2006 ( "Opening Date "). If, for any reason, the Opening of Escrow has not occurred by the
Opening Date, then any Party not then in Default of this Agreement may terminate this Agreement,
without liability to the other Party or any other person for such termination and cancellation, by delivering
written notice of termination to the other Party. Without limiting the termination rights of the Parties
provided for in the previous sentence, if Escrow does not open on or before the Opening Date, and no
Party has yet exercised its contractual right to terminate this Agreement, the Opening of Escrow shall
occur as soon as reasonably possible
2.7 Escrow Instructions This Agreement constitutes the joint escrow instructions of the
Parties to the Escrow Holder for completion of the Escrow for the purchase and sale of the Property, as
contemplated by this Agreement. The Developer and the Agency shall execute such further Escrow
instructions consistent with the provisions of this Agreement as may be reasonably requested by Escrow
Holder. In the event of any conflict between the provisions of this Agreement and any further Escrow
instructions requested by Escrow Holder, the provisions of this Agreement shall control.
2.8 Conditions to Close of Escrow The conditions set forth in this Section 2.8 shall be
satisfied or waived by the respective benefited Party on or before the Escrow Closing Date or the Party
benefited by any unsatisfied condition shall not be required to proceed to close the Escrow. Where
satisfaction of any of the foregoing conditions requires action by the Developer or by the Agency, each
Party shall use its reasonable best efforts, in good faith, and at its own cost, to satisfy such condition.
Where satisfaction of any of the conditions requires the approval of a Party, such approval shall be in
such Party's reasonable discretion. Either Party may waive any of the conditions set forth in; this
Agreement, but any such waiver shall be effective only if contained in a writing signed by the waiving
Party and delivered to the Escrow Holder and the other Party.
2.8.1 Developer's Conditions Precedent The Developer's obligation to purchase
the Property from the Agency on the Escrow Closing Date shall be conditioned upon the fulfillment of the
following conditions precedent ( "Developer's Conditions Precedent'), all of which shall be satisfied (or
waived in writing by the Developer pursuant to Section 2.8) prior to the Close of Escrow:
2.8.1.1 The Developer delivers the Developer's Due Diligence Completion
Certificate to both the Agency and Escrow Holder indicating the Developer's unconditional acceptance of
the condition and conveyance of the Property from the Agency, subject only to the other terms and
conditions of this Agreement, prior to the expiration of the Due Diligence Period;
2.8.1.2 The Title Company is unconditionally committed to issue the
Developer's Title Policy to the Developer, and
2.8.13 The Agency deposits all of the items into Escrow required by Section
2.10.
2.8.2 Agency's Conditions Precedent the Agency's obligation to sell the Property
to the Developer on the Escrow Closing Date shall be conditioned upon the fulfillment of the following
conditions precedent ( "Agency's Conditions Precedent "), all of which shall be satisfied (or waived in
writing pursuant to Section 2.8) prior to the Close of Escrow:
2.8.2.1 The Developer delivers the Developer's Due Diligence Completion
Certificate to both the Agency and Escrow Holder indicating the Developer's unconditional acceptance of
RVPLB\KVARNER \710715.1 -16-
the condition and conveyance of the Property from the Agency, subject only to the other terms and
conditions of this Agreement, prior to the expiration of the Due Diligence Period;
2.8.2.2 The Developer deposits all of the items into Escrow required by
Section 2.9;
2.8.2.3 The Title Company is unconditionally committed to issue the
Developer's Title Policy to the Developer,
2.8.2.4 The guarantor under the Completion Guarantee has executed and
delivered the Completion Guarantee to the Agency;
2.8.2.5 The Developer has provided the Agency with satisfactory evidence of
Lenders Financing Commitments to provide the Construction Loan and Permanent Loan in an aggregate
amount no less than Dollars ($ ) ;
2.8.2.6 The Developer has provided the Agency with satisfactory evidence of
the insurance required by Section 4.1.19;
2.8.2.7 The Developer has obtained the Project Entitlements that are required
for the development of the Project on the Property;
2.8.2.8 The Developer performs all of its material obligations required to be
performed by the Developer under this Agreement prior to Close of Escrow; and
2.8.2.9 The representations, warranties and covenants of the Developer set
forth in this Agreement are true and correct in all material respects on the Effective Date and on the
Escrow Closing Date.
2.9 Developer's Escrow Deposits Following satisfaction or waiver of each of the
Developer's conditions precedent to Close of Escrow set forth in Section 2.8.1, the Developer shall .
deposit the following items into Escrow and, concurrently, provide a copy of each such item to the
Agency, at least two (2) business days prior to the Escrow Closing Date scheduled by Escrow Holder by
written notice delivered to each of the Parties:
2.9.1 The Development Promissory Note and the Agency Development Deed of
Trust, duly executed and acknowledged by the authorized representatives of the Developer.
2.9.2 An acknowledgment and acceptance of the Agency Quitclaim Deed, duly
executed and acknowledged by the authorized representatives of the Developer.
2.9.3 Two (2) duplicate original copies of the Closing Statement described in
Section 2.14.2, duly executed by the authorized representatives of the Developer.
2.9.4 A PCO Statement executed by the authorized representative(s) of the
Developer for the Property.
2.9.5 A FIRPTA affidavit executed by the authorized representative(s) of the
Developer, in the customary form provided by the Escrow Holder, California Franchise Tax Board Form
593 -W executed by the Developer.
RVPUB\KVARNER \710715.1 -17-
2.9.6 Evidence of the existence, organization and authority of the Developer
reasonably requested by Escrow Holder or Title Company.
2.9.7 A copy of all homeowner's association documents and materials, which have
been approved by the Agency in its reasonable discretion, required for the formation of the homeowner's
association necessary for the maintenance and operation of the common areas of the Project.
2.9.8 Any other documents, instruments or funds required to be delivered by the
Developer under the terms of Agreement or as otherwise reasonably requested by Escrow Holder or Title
Company in order to close Escrow that have not previously been delivered by the Developer.
2.10 Agency's Escrow Deposits Following satisfaction or waiver of each of the Agency's
conditions precedent to Close of Escrow set forth in Section 2.8.2, the Agency shall deposit the following
items into Escrow and, concurrently, provide a copy of each such item to the Developer, at least two (2)
business days prior to the Escrow Closing Date scheduled by Escrow Holder by written notice delivered
to each of the Parties:
2.10.1 The first installment of the Agency Development Loan in an amount not to
exceed Dollars ($
2.10.2 The Agency Quitclaim Deed executed by the authorized representative of the
Agency
2.10.3 A FIRPTA affidavit executed by the authorized representative of the Agency,
in the customary form provided by the Escrow Holder; California Franchise Tax Board Form �s93 -W
executed by the Agency.
2.10.4 Two (2) duplicate original copies of the estimated Closing Statement
described in Section 2.14.2, duly executed by the authorized representative of the Agency.
2.10.5 Any other documents, instruments, funds and records required to be
delivered by the Agency under the terms of this Agreement or as otherwise reasonably requested by
Escrow Holder or Title Company in order to close Escrow that have not been previously delivered by the
Agency.
2.11 Closing Procedure When each of the Developer's Escrow deposits, as set forth in
Section 2.9, and each of the Agency's Escrow deposits, as set forth in Section 2.10, are deposited into
Escrow, Escrow Holder shall request confirmation in writing from both the Agency and the Developer
that each of their respective conditions to the Close of Escrow, as set forth in Section 2.8, are satisfied or
waived. Upon Escrow Holder's receipt of written confirmation from both the Agency and the Developer
that each of their respective conditions to the Close of Escrow are satisfied, or waived, Escrow Holder
shall "Close Escrow" by doing all of the following:
2.11.1 Recordation of Documents File the Agency Quitclaim Deed and the Agency
Development Deed of Trust with the Office of the Recorder of Los Angeles County, California, for
recordation in the order set forth in Section 2.13;
2.11.2 Distribution of Recorded Documents Distribute each recorded document to
the Party or other person designated for such distribution in Section 2.13;
RVPUBTKVARNER \710715.1 -18-
2.11.3 PCO Statements File the PCO Statements with the Office of the Recorder of
Los Angeles County, Califomia;
2.11.4 FIRPTA Affidavits File the FIRPTA Affidavits with the United States
Internal Revenue Service;
2.11.5 Forms 593 File Form 593 -W with the California Franchise Tax Board;
2.11.6 Title Policv Obtain and deliver to the Developer the Developer's Title
Policy issued by the Title Company; and
2.11.7 Purchase Price: First Instalhnmt of the Agency Development Loan Deliver
the Purchase Price to the Agency and the first installment of the Agency Development Loan to the
Developer, less the Developer's share of Escrow closing costs and any other charges to the account of the
Developer.
2.12 Close of Escrow Close of Escrow shall occur following satisfaction of all conditions
precedent therefor set forth in Section 2.8 and elsewhere in this Agreement have occurred If the Close of
Escrow has not occurred by the Outside Closing Date, then any Party not then in default of this
Agreement may terminate this Agreement and cancel the Escrow, without liability to the other Party or
any other person for such termination and cancellation, by delivering written notice of termination to the
other Party and Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section 2.16.
2.13 Recordation and Distribution of Documents Escrow Holder shall cause the following
documents to be recorded in the official records of the Recorder of Los Angeles County, Ckifornia, in the
following order at Close of Escrow: (i) the Agency Quitclaim Deed, (ii) the Agency Development Deed
of Trust, (iii) this Agreement, and (iv) any other documents to be recorded through Escrow upon the joint
instructions of the Parties. Immediately after Closing, Escrow Holder shall deliver: (i) a certified copy of
the Agency Quitclaim Deed to the Developer and a copy to the Agency, each showing all recording
information, (ii) the original of this Agreement to the Agency and a copy to the Developer, (iii) the
original of the Completion Guarantee to the Agency, (iv) a certified copy of the Agency Development
Deed of Trust to the Agency and a copy to the Developer, each showing all recording information, (v) the
original of the Agency Development Promissory Note to the Agency and a copy to the Developer, and
(vi) the original of any other documents recorded at the Close of Escrow to the Party or other person
designated in the joint escrow instructions of the Parties for such recordation and a copy of each such
document to the other Party or Parties, each showing all recording information.
2.14 Escrow Costs The Agency shall pay one -half ( %:) of the customary and reasonable
escrow fees that may be charged by the Escrow Holder in connection with the Close of Escrow. The
Developer shall pay the cost of the premiums for the Developer's Title Policy, together with one -half ( %:)
of the customary and reasonable escrow fees that may be charged by the Escrow Holder in connection
with the Close of Escrow. The Developer shall pay the additional cost of the Developer's Survey, any the
Developer Title Policy endorsements requested by the Developer, additional ALTA extended policy
costs, and any and all survey and subdivision costs associated with the development of the Project on the
Property in compliance with the California Subdivision Map Act and the City's municipal code.
2.14.1 Any other Escrow - related transaction expenses or Escrow closing costs
incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the
Parties to this Agreement in the manner customary in Los Angeles County, California.
RVPUB\RVARNER%710715.1 -19-
2.14.2 No later than five (5) business days prior to the Closing Date, the Escrow
Holder shall prepare and deliver for approval by the Developer and the Agency the Closing Statement on
the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all
closing costs, pay -off amounts for the release and reconveyance of all.non -tax liens secured by the
Property and prorations made pursuant to this Agreement, if any. The Developer and the Agency shall
assist the Escrow Holder in determining the amount of any and all prorations.
2.15 Escrow Cancellation Charges If the Escrow fails to close due to the Agency's material
Default under this Agreement, the Agency shall pay all ordinary and reasonable Escrow and title order
cancellation charges. If the Escrow fails to close due to the Developer's material Default under this
Agreement, the Developer shall pay all ordinary and reasonable Escrow and title order cancellation
charges. If the Escrow fails to close for any reason other than the material Default of either the Developer
or the Agency, the Developer and the Agency shall each pay one -half (1/2) of any, ordinary and
reasonable Escrow and title order cancellation charges.
2.16 Escrow Cancellation If this Agreement is terminated pursuant to a contractual right
granted to a Parry in this Agreement to terminate this Agreement (other than due to the default of another
Party), the Parties shall do each of the following: '
2.16.1 Cancellation Instructions The Parties shall, within three (3) business days of
Escrow Holder's written request, execute any reasonable Escrow cancellation instructions requested by
Escrow Holder;
2.16.2 Return of Funds and Documents Within ten (10) business days of receipt by
the Parties of a settlement statement of Escrow and title order cancellation charges from Escrow Holder.
(i) the Developer or Escrow Holder shall return to the Agency any documents previously delivered by the
Agency to the Developer or Escrow Holder, (ii) the Agency or Escrow Holder shall return to the
Developer all documents previously delivered by the Developer to the Agency or Escrow.Holder, and (iii)
Escrow Holder shall return to the Developer any funds deposited in Escrow, less the Developer's share of
customary and reasonable Escrow and title order cancellation charges, if any.
2.17 Breach of Article M Liquidated Damages
2.17.1 Breach of Article H By the Agency: Liquidated Damages IN THE EVENT
THAT ESCROW FAILS TO CLOSE DUE TO A MATERIAL BREACH BY AGENCY OF ITS
OBLIGATIONS UNDER THIS AR'T'ICLE lI PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES
THAT DEVELOPER WILL INCUR BY REASON OF SUCH MATERIAL BREACH ARE AND WILL
BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. DEVELOPER AND
AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT DEVELOPER'S DAMAGES
WOULD BE IN THE EVENT OF SUCH A BREACH BY AGENCY, HAVE AGREED THAT SUCH
DAMAGES SHALL BE A LIQUIDATED AMOUNT OF DOLLARS
($ ) . SUCH LIQUIDATED DAMAGES AMOUNT SHALL BE PAID TO
DEVELOPER IN THE EVENT OF MATERIAL BREACH BY AGENCY RESULTING IN THE
TERMINATION OF THIS AGREEMENT AND CANCELLATION OF THE ESCROW, AS
LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE DEVELOPER'S SOLE. AND
EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH
MATERIAL BREACH BY AGENCY, ALL OTHER REMEDIES (INCLUDING THE REMEDY OF
SPECIFIC PERFORMANCE AND THE RIGHT TO RECORD A NOTICE OF PENDENCY OF
ACTION AGAINST THE PROPERTY) BEING HEREBY EXPRESSLY WAIVED.
RVPUB\KVARNER \710715.1 -20-
Initials of the Developer Initials of the Agency
2. 17.2 Breach of Article II By the Developer: Liquidated Damages IN THE
EVENT THAT ESCROW FAILSTO CLOSE DUE TO A MATERIAL BREACH BY DEVELOPER OF
ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE
DAMAGES THAT AGENCY WILL INCUR BY REASON OF SUCH MATERIAL BREACH.ARE
AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. DEVELOPER
AND AGENCY, IN A- REASONABLE EFFORT TO ASCERTAIN WHAT AGENCY'S DAMAGES
WOULD BE IN THE EVENT OF SUCH A MATERIAL BREACH BY DEVELOPER, HAVE
AGREED THAT SUCH DAMAGES SHALL BE A ? LIQUIDATED AMOUNT OF
DOLLARS ($ SUCH LIQUIDATED DAMAGES AMOUNT
SHALL BE PAID TO AGENCY IN THE EVENT OF A MATERIAL BREACH BY DEVELOPER AS
LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE AGENCY'S SOLE AND EXCLUSIVE
REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH MATERIAL BREACH
BY DEVELOPER, ALL OTHER REMEDIES BEING HEREBY EXPRESSLY WAIVED.
ANYTHING IN THIS SECTION 2.17.2 TO THE CONTRARY
NOTWITHSTANDING, THIS SECTION 2.17.2 SHALL NOT APPLY TO THE REMEDIES
AVAILABLE TO THE AGENCY UPON THE DEVELOPER'S BREACH OF ITS OBLIGATIONS
UNDER THE AGENCY PROMISSORY NOTE AND AGENCY DEED OF TRUST, WHICH SHALL
CONTINUE. TO BE ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS
NOTWITHSTANDING ANY LIQUIDATED DAMAGES PAID TO THE AGENCY AS
HEREINABOVE DESCRIBED.
Initials of the Developer Initials of the Agency
2.18 Resort to IRS After the Close of Escrow and prior to the last date on which such report
is required to be filed with Internal Revenue Service, if such report is required pursuant to Section
6045(e) of the Internal Revenue Code, Escrow Holder shall report the gross proceeds of the purchase and
sale of the Property to the Internal Revenue Service on Form 1099 -B, W -9 or such other form(s) as may
be specified by the Internal Revenue Service pursuant to Section 6045(e). Concurrently with the filing of
such reporting form with IRS, Escrow Holder shall deliver a copy of the filed form to the Agency and the
Developer.
2.19 Condemnation In the event that, prior to the Close of Escrow, any governmental entity,
other than the Agency, shall commence any eminent domain or similar proceedings to take any portion of
the Property, following notice of such proceedings, the Developer shall have the option either: (i) to elect
not to acquire the Property and terminate this Agreement; or (ii) the Developer may complete the
acquisition of the Property, in which case the Developer shall be entitled to all the proceeds of such taking
to which the Agency would otherwise have been entitled; provided however, that the Agency agrees that
it shall not settle or compromise the proceedings before the Close of Escrow without the Developer's
prior written consent, which consent will not be unreasonably withheld or delayed. The Developer shall
confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty
(30) calendar days of its receipt of notice of the proceedings.
2.20 Maintenance of Property The Agency shall, prior to the Close of Escrow, continue to
maintain the Property in substantially the same condition as of the Effective Date of this Agreement and
shall not further encumber, or suffer to be encumbered, the Property with any liens or other non - statutory
encumbrances, nor shall the Agency enter into any contracts with respect to the Property which will
RVPUB\KVARNER \710715.1 -21-
survive the Close of Escrow without the Developer's prior written consent, which may be given or
conditioned in the Developer's sole and absolute discretion.
ARTICLE III
FINANCING OF PROJECT
3.1 Project Costs The Developer hasprovided a detailed scope of work for the Construction
of the Project in the Scope of Development which is,attached to this Agreement as Exhibit C . The Project
Costs shall be subject to change from time to time in accordance with this Agreement, subject to prior
written approval by the Agency (which approval shall not be unreasonably withheld), The Executive
Director is hereby authorized to act on behalf of the Agency to approve any revisions to the Project Costs
which do not in any way increase the Agency's financial obligations hereunder.
3.2 Proiect Budget and Financing. Plan The Developer has submitted to the Agency the
Project Budget and a Financing Plan based on the best, good faith estimate of the Developer of the Project
Costs and sources and uses of funds to pay for the estimated Project Costs. The Parties recognize that
events and circumstances not currently contemplated, some of which are outside of the control of the
Parties, could result in changes in the Project Costs, necessitating changes in the Project Budget and
Financing Plan. To the extent that there are changes to the Project Budget and Financing Plan between
the date of this Agreement and the Closing, the Developer shall submit a revised Project Budget and
Financing Plan to the Agency for the Agency's review and approval as to the sufficiency of the Financing
Commitments to meet revised Project Budget requirements not later than ten (10) business days prior to
Closing.
3.3
3.4 Development Financing
3.4.1 Agency Development Loan Subject to the terms and conditions of this
Agreement, the Agency Development Promissory Note and the Agency Development Deed of Trust, the
Agency shall pay to or for the benefit of the Developer amounts constituting the Agency Development
Loan in an amount not to exceed Seven Hundred Sixty Thousand Dollars ($760,000) in order to assist the
Developer in developing the Project on the Property, as specified in the Project Budget
3.4.1.1 Use of Agency Development Loan The Developer shall use the
Agency Development Loan as set forth in this Agreement solely for the Project Costs associated with
completing the Project and in accordance with the Project Budget or to pay down the Construction, Loan
or the Permanent Loan. The Developer shall not be entitled to use any portion of the Agency
Development Loan to reimburse the Developer, for any internal management, administrative or overhead
expenses or for any purpose other than paying for expenses directly attributable to the development of the
Project on the Property or paying down the Construction Loan or the Permanent Loan.
3.4.1.2 Disbursement of Aeencv Development Loan
3.4.1.2.1 First Installment The first installment of the Agency
Development Loan in an amount not to exceed Dollars ($ ) ( "First
Instaliment'� shall be distributed to the Developer at the Close of Escrow as provided in Article II.
3.4.1.2.2 Remaining Balance of Agency Development Loan The
total amount of the Agency Development Loan less the First Installment shall be referred to in this
Agreement as the "Remaining Balance." The Developer shall open an escrow account with an escrow
RVPUBVNARNER \710715.1 -22-
agent reasonable acceptable to the Agency through which the Developer shall receive and withdraw any
and all proceeds of the Construction Loan and the Remaining Balance of the Agency Development Loan.
The Construction Lender and the Agency shall disburse the proceeds of the Construction Loan and the
Remaining Balance of the Agency Development Loan in the following order: (i) first, all of the
Developer's funds on deposit with the Construction Lender, (ii) 'second, fifty percent (50 %). of the
proceeds of the Remaining Balance of the Agency Development Loan (iii) third, fifty percent (50 %) of
the proceeds of the Construction Loan; (iv) fourth, an additional thirty percent (30 of the proceeds of
the Remaining Balance of the Agency Development Loan; (v) fifth, an additional thirty percent (30 %) of
the proceeds of the Construction Loan; (vi) sixth, an' additional ten percent (10 %) of the proceeds of the
Remaining Balance of the Agency Development Loan; and (vii) seventh, an additional ten percent (10 %)
of the proceeds of the Construction Loan.
3.4.1.3 Renavment of Agency Development Loan The Developer shall repay
the Agency Development Loan over a period of five (5) years with no interest accruing on'the balance of
the Agency Development Loan pursuant to the terms and conditions of the Agency Development
Promissory Note attached to this Agreement as Exhibit I . The Agency Development Promissory Note
shall be secured by the Agency Development Deed of Trust attached to this Agreement as Exhibit J and
shall be subordinate only to the First Mortgage Financing. As provide in the Agency Development
Promissory Note, the Developer's repayment of the Agency Development Loan shall be callable in full on
demand, including accrued interest upon Developer's failure to receive permanent certificates of
occupancy for the entire Project within the time period set forth in the Schedule of Performance.
3.4.2. Construction Loan The proceeds of the Construction Loan shall be used to
defray the costs of developing the Project on the Property, as specified in the Project Budget. During
development of the Project on the Property, a portion of the cost of development shall be funded by a
conventional Construction Loan, to be made by an institutional Lender acceptable to Agency in the
amount of approximately Dollars ($ ) . The Lender for
the Construction Loan shall be an institutional Lender subject to the approval of the Agency, which may
be conditioned or withheld in the Agency's reasonable' discretion. The term's and provisions of the
Constructi on Loan shall be similar to ordinary and customary provisions of Lenders on Loans similar to
the Construction Loan. Documentation for the Construction Loan shall be subject to the review and
approval of the Agency, which shall not be unreasonably withheld or delayed. The Construction Loan
shall provide for normal and customary disbursement controls, the payment of normal and customary fees
and expenses for a Construction Loan of similar size and purpose, and for the payment of other expenses
contained in the Project Budget. The Agency's Executive Director shall approve or disapprove the terms
and provisions and documentation for the Construction Loan within five (5) business days of receipt of
such documentation. If the Agency shall disapprove any such financing or Construction Loan documents,
it shall do so by written notice to the Developer stating reasons for such disapproval. In such event, the
Developer shall promptly obtain and submit to the Agency new or revised Construction Loandocuments,
as appropriate. The Agency shall approve or disapprove of such new or revised Construction Loan
documents in the same manner and within the same -times established in this section for the approval or
disapproval of the Construction Loan documents as initially submitted to Agency.
3.4.3 Permanent Loan The Developer shall obtain for the Agency's review and
approval, which may be withheld or conditioned in Agency's reasonable discretion, a conditional forward
loan commitment for the Permanent Loan in an amount of approximately Dollars
($ ) from a Lender' reasonably acceptable to the Agency. Upon completion
of the development of the Project on the Property, a Permanent Loan shall be obtained from the Lender
which provides the original conditional Loan commitment or from another Lender reasonably acceptable
to Agency, on the best terms then commercially available. The Net Proceeds of the Permanent Loan shall
be used to pay off the Construction Loan.
RVPUE\KVARNER \710715.1 -23-
3.5 Refinancins The Developer shall be permitted to refinance (a "Refinancing') the First
Mortgage Financing with the express written consent of the Agency.
3.6 No Subordination of Affordability Covenants and Related Encumbrance The Agency
has found, concurrently with its approval of this Agreement, that an economically feasible method of
financing for the development of the Project, without the subordination of this Agreement, excluding the
Regulatory Agreement, is not reasonably available. The Agency consequently agrees that this,Agreement
(excluding the Regulatory Agreement), the Agency Development Promissory Note, the Agency
Development Deed of Trust, (all of the foregoing, "Subordinate Instruments'), may be made junior and
subordinate to the deeds of trust and other documents required in connection with the Constluction,Loan
and Permanent Loan for the Project established and obtained pursuant to and in compliance with the
provisions of this Agreement. The Executive Director is hereby authorized to execute such subordination
agreements and/or other documents as may be reasonably necessary to evidence subordination, without
further authorization from the Agency, provided that such subordination agreements contain written
commitments which the Executive Director finds are reasonably designed to protect the Agency's
investment in the event of default, such as one or more of the following: (i) the right of the Agency to
cure it default on a senior loan prior to foreclosure; (ii) the right of the Agency to negotiate with a Lender
after notice of default from the Lender and prior to foreclosure; (iii) an agreement that if, prior to
foreclosure on a Loan, the Agency takes title to the Property and cures the default on the Loan, the Lender
will not exercise any right it may have to accelerate the Loan by reason of transfer of title to the Agency;
and (iv) a right of the Agency to reacquire the Property from the Developer at any time after a material
default on a Loan: Nothing set forth herein shall be construed to require the Agency to subordinate any of
the Subordinate Instruments in favor of any person holding any interest in the Property other than the
Lender for the Construction Loan, the Lender for the Permanent Loan, and any other person claiming
under or through any of the foregoing.
3.2.1 No Other Agency Financial Assistance The sole source of funds for the
payment of the proceeds of the Agency Development Loan pursuant to this Agreement shall be
Affordable Housing Funds. No funds of the Agency other than Affordable Housing Funds shall be
committed, pledged, 'obligated or encumbered by the terms of this Agreement. The Agency does not,
currently, have adequate funds available to pay for the costs to construct or operate the Project in excess
of the Agency Development Loan and the Agency shall be under no obligation to contribute any other
financial assistance to the construction or operation of the Project other than the Agency Development
Loan.
ARTICLE IV
DEVELOPMENT OF THE PROJECT
4.1 Development of Proiect and Prouerty It is the intent of the Parties that the Property be
developed as follows: the construction on the Property of the Project comprised of six (6) owner-
occupied multi- family New Homes reserved for occupancy by Qualified Households during the Qualified
Residence Period, together with all on and off site improvements such as streets, curbs, sidewalks, storm
drains, gutter, utilities, etc (e.g., the public improvements necessary for the development of the Property).
The Project is more particularly described in the Scope of Development.
4.1.1 The City's zoning ordinance and the City's building requirements shall be
applicable to the use and development of the Property pursuant to this Agreement. The Developer
acknowledges that any change in the plans for development of the Project on the Property as set forth in
the Scope of Development shall be subject to the City's zoning ordinance and building requirements. No
action by the Agency or the City with reference to this Agreement or related documents shall be deemed
RVPU13UNARNER \710715.1 -24-
_
to constitute a waiver of any lawful City requirements which are applicable to the Property or to the
Developer, any successor in interest of the Developer or any successor in interest pertaining to the
Property, except by modification or variance approved by the City consistent with this Agreement.
41,2 The Project shall be developed and completed in conformance with the
approved Scope of Development and any and all other plans, specifications and similar development
documents required by this Agreement, except for such changes as may be mutually agreed upon in
writing by and between the Developer and the Agency and the mutual approval of any such change shall
not be unreasonably conditioned, withheld or delayed: The approval by the City shall be deemed to be
approved by•the Agency of the preliminary and final construction plans for the Project, if such plans
approved by the City are reasonably consistent with the Scope of Development.
4.1.3 The approval of the Scope of Development by the Agency shall not be
binding upon the City Council of the City or the planning commission of the City with respect to any
regulatory approvals relating to the development of the Project and/or the public improvements necessary
for the development of the Property as may be required by such other bodies. If any material change of
the Scope of Development as previously approved by the Agency shall be required by another .
government official, agency, department or bureau having jurisdiction over the development of the
Property, the Developer and the Agency shall cooperate in efforts to obtain waivers of such revisions, or
to obtain approvals of any such revisions which have been made by the Developer and have thereafter
been approved by the Agency.' The Agency shall not unreasonably withhold or delay approval of such
revisions to the Scope of Development; provided however that no such change may result in, the reduction
of the number of New Homes that shall be constructed by the Developer and reserved for occupancy by
Qualified Households.
4.1.4 Notwithstanding any provision to the contrary in this Agreement, the
Developer agrees to obtain all necessary permits, follow all necessary processes and pay all necessary
fees relating to the completion of the Project on the Property, unless otherwise provided herein,
4.1.5 The Developer agrees to accept and comply fully with any and all lawful
conditions of approval applicable to all permits and other governmental actions affecting the development
of the Property and consistent with this Agreement.
4.1.6 The Developer shall prepare and submit to the City all development plans,
construction drawings and related documents for the development of the Project on the Property,
including the public improvements necessary for the development of the Property, consistent with the
Scope of Development. The development plans, construction drawings and related documents submitted
by the Developer to the City shall be in the form of final drawings, plans and specifications. Such final
drawings, plans and specifications are hereby defined as those which contain sufficient detail necessary to
obtain a building permit from the City.
4.1.7 During the preparation of all drawings, plans, specifications and related
documents in connection with the development of the Project on the Property, including the public
improvements necessary for the development of the Property, the Developer shall provide to the Agency
regular progress reports to advise the Agency of the status of the preparation by the Developer, and the
submission to and review by the City of the drawings, plans, specifications and related documents. The
Developer shall communicate and consult with the Agency as frequently as is necessary to ensure that any
such drawings, plans, specifications and related documents submitted by the Developer to the City are
being processed in a timely fashion.
RVPUB\KVARNER \710715.1 -25-
4.1.8 The Agency shall.cooperate with and'shall assist the Developer in order for
the Developer to obtain the approval of any and all drawings, plans, specifications and related documents
submitted by the Developer to the City consistent with the Schedule of Performance. Any failure by the
City to approve any such plans or to issue necessary permits for the development of the Project on the
Property within the period provided in the Schedule of Performance shall constitute an enforced delay
hereunder, and the Schedule of Performance shall be extended by that period of time beyond the period
described in the Schedule of Performance in which the City approves said documents; provided, however,
that in the event that the City disapproves of any of such documents, the Developer shall within thirty
(30) calendar days after receipt -of such disapproval revise and resubmit such documents in accordance
with the City's requirements and in such form and substance so as to obtain the City's approval thereof.
4.1.9 The Agency shall approve any modified or revised drawings, plans,
specifications and related documents to which reference is made in this Agreement as long as such
modified or revised drawings, plans, specifications and related documents are generally consistent with
the Scope of Development and any other documents related to the development of the Project on the
Property which have been approved by the Agency. Upon any disapproval of such modified or revised
drawings, plans, specifications or related documents, the Agency shall state in writing the reasons for
such disapproval. the Developer, upon receipt of notice of any disapproval, shall promptly revise such
disapproved portions of the drawings, plans, specifications or related documents in a manner that
addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to
obtain the Agency's approval thereof. the Developer shall resubmit such revised drawings, plans,
specifications and related documents to the Agency as soon as possible after its receipt of the notice of
disapproval and, in any event, no later than thirty (30) calendar days thereafter. the Agency shall approve
or disapprove -such revised drawings, plans, specifications and related documents in the same manner and
within the same time as provided for approval or disapproval of drawings, plans, specifications and
related documents initially submitted to the Agency, and if no specific time for approval is specified then
the Agency shall so approve or disapprove the proposed modifications or revisions promptly, upon the
written request of the Developer.
4.1.10 If the Developer desires to make any material change in the final
construction drawings, plans, specifications and related documents after their approval by the Agency
and/or the City, the Developer shall submit the proposed change in writing to the Agency and/or the City
for approval. The Agency shall notify the Developer of approval or disapproval thereof in writing within
fifteen (15) calendar days after submission to the Agency. This fifteen (15) calendar day period may be
extended by mutual consent of the,Developer and the Agency. Any such change shall, in any event, be
deemed to be approved by the Agency unless rejected, in whole or in part, by written notice thereof
submitted by the Agency to the Developer, setting forth in detail the reasons therefore, and such rejection
shall be made within said fifteen (15) calendar day period unless extended as permitted herein. The
Agency shall use its best efforts to cause the City to review and approve or disapprove any such change.
4.1.11 The Developer, upon receipt of a notice of disapproval by the Agency and/or
the City, may revise such portions of the proposed change in the drawings, plans, specifications and
related documents as are rejected and shall thereafter resubmit such revisions to the Agency and/or the
City for approval in the manner provided in Section 4.1.10.
4.1.12 The Developer shall have the right during the course of construction to make
changes in construction concerning the interior design of the New Homes and minor field changes with
respect to the New Homes; and to make minor field changes to the public improvements necessary for the
development of the Project on the Property without seeking the approval of the Agency; provided,
however, that such changes do not affect the type of use to be conducted within all or any portion of a
New Home or the ability of the City to accept the completion of the public improvements necessary for
RVPUB\KVARNER \710715.1 -26-
the development of the Project on the Property and fiuther provided that the City has approved any such
minor field change to either a New Home or the public improvements necessary for the development of
the Project on the Property' in accordance with the standards and practices of the City Building
Department and/or City Public Works Department, as applicable. The term "minor field changes" shall
be defined as those changes from the approved final construction drawings, plans and specifications
which have no substantial effect on the improvements and are made in order to expedite the work of
construction in response to field conditions. Nothing contained in this Section 4.1.12 shall be deemed to
constitute a waiver of or change in the City's Building Code or Public Works Department requirements
governing such minor field changes or in any and all approvals by the City otherwise required for such
minor field changes.
4.1.13 Except as otherwise specified in this Agreement, the cost of constructing the
Project on the Property and all other improvements.on the Property shall be paid for by the Developer.
4.1.14 Except as otherwise provided in this Agreement, the Developer shall, at its
expense, cause to be prepared, and shall pay any and all fees pertaining to the review and approval thereof
by the City, all required construction, planning and other documents reasonably required by governmental
bodies pertinent to the development of the Project on the Property hereunder including, but not limited to
the public improvements necessary for the development of the Project on .the Property and to the
specifications, drawings, plans, maps, permit applications, land use applications, zoning applications and
design review documents for the New Homes,
4.1.15 Except as otherwise provided in this Agreement, the Developer shall.pay for
any and all costs, including but not limited to the costs of design, construction, relocation and securing of
permits for utility improvements and connections, which may be required in developing the Property.
The Developer shall obtain any and all necessary approvals prior to the commencement of applicable
portions of said construction, and the Developer shall take reasonable precautions to ensure the safety and
stability of surrounding properties during said construction.
4.1.16 The Developer shall begin and complete all construction and development
and undertake all obligations and responsibilities of,the Developer within the times specified in the
Schedule of Performance, or within such reasonable extensions of such times as may be granted by the
Agency or as otherwise provided for in this Agreement. The Schedule of Performance shall be subject to
revision from time to time as mutually agreed upon in writing by and between the Developer and the
Agency. Any and all deadlines for performance by the, Parties shall be extended for any time attributable
to delays which are not the fault of the performing Party and are caused by the other Party, other than
periods for review and approval or reasonable disapprovals of plans, drawings and related documents,
specifications or applications for permits as provided in this Agreement.
4.1.17 Prior to and during the period of construction of the Project on the Property
and the public improvements necessary for the development of the Property, the Developer shall submit
to the Agency written progress reports when and as reasonably requested by the Agency, but in no event
more frequently than every four (4) weeks. The reports shall be in such form and detail as may
reasonably be required by the Agency. In addition, the Developer shall attend the Agency meetings when
requested to do so by the Agency staff.
4.1.18 Prior to the commencement. of Due Diligence Investigations pursuant to
Section 2.3.1.2 or of any construction on the Property, the Developer_ shall furnish, or shall cause to be
furnished, to the Agency duplicate originals or appropriate, certificates of public indemnity and liability
insurance in the amount of Two Million Dollars ($2,000,000) combined single limit, naming the Agency
and the City as additional insureds. Said insurance shall cover comprehensive general liability including,
RVPUBUNARNER \710715.1 -27-
but not limited to, contractual liability; acts of subcontractors; premises- operations; explosion, collapse
and underground hazards, if applicable; broad form property damage, and personal injury including libel,
slander and , false arrest. The Developer agrees to have its general liability coverage endorsed so that all
coverage limits required by this Agreement are available separately for each and every location at which
the Developer conducts operations of any type on behalf of the Agency. The Developer warrants that
these limits will not be reduced except by losses attributable to those specific locations and not by losses
from any other operations of the Agency; In addition, the Developer shall provide to the Agency adequate
proof of comprehensive automobile liability insurance covering owned, non -owned and hired vehicles,
combined single limit in the amount of Two Million Dollars ($2,000,000) each occurrence; and proof of
workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained
from insurance companies admitted in California and rated at least B +: XII in Best's Insurance Guide. All
said insurance policies shall provide that they may not be canceled unless the Agency and the City receive
written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation.
Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance
which the Agency and/or City may otherwise carry, including self insurance, which for all purposes of
this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance
policies governing the Property as obtained by the Agency shall not be transferred from the Agency to the
Developer. Any and all insurance required hereunder shall be maintained and kept in force until the
Agency has issued the Certificate of Completion for the Project.
4.1.19 The Developer for itself and its successors and assigns agrees that in the
construction of the Project on the Property and the public improvements necessary for the development of
the Property, the Developer shall not discriminate against any employee or applicant for employment
because of sex, marital status, race, color, religion, creed, national origin, or ancestry. Notwithstanding
the foregoing, the Developer shall use best efforts to offer employment opportunities to local residents
and will seek to acquire goods and services from local vendors.
4.1.20 The Developer shall carry out its construction of the Project on the Property
and the public improvements necessary for the development of the Property in conformity with all
applicable laws, including all applicable California labor standards and requirements and with respect to
the development of the Property. The Developer further agrees and acknowledges that it shall pay no less
than the prevailing per diem rate of wages to all laborers providing labor to the work of improvements on
the Project, as determined by the Director of the California Department of Industrial. Relations. The
Developer further agrees to keep all necessary related records in accordance with State of California law.
The Developer agrees to pass through all prevailing wage requirements to any and all subcontractors
hired by the Developer if and when applicable. The Developer hereby agrees to indemnify, defend and
hold the Agency harmless from and against any and all liability arising out of or related to the Developer's
failure to comply with any and all applicable prevailing wage requirements or to require its
subcontractors to comply with any and all applicable prevailing wage requirements.
4.1.21 The Developer shall, at its own expense, secure or shall cause to be secured,
any and all permits which may be required for such construction, development or work by the City or any
other governmental agency having jurisdiction thereof. the Agency shall cooperate in good faith with the
Developer in the Developer's efforts to obtain from the City or any other appropriate governmental
agency any and'all such permits including, but not limited to, permits for flags and signs on the Property
and, upon completion of applicable portions of the development of the Project on the Property,
certificates of occupancy.
4.1.22 Officers, employees, agents or representatives of the Agency and the City
shall have the right of reasonable access to the Project and the Property, without the payment of charges
or fees, during Normal Business Hours during the period of construction in order to inspect the work
RVPUBVNARNER \710715.1 -28-
being performed in constructing the Project on the Property and to ensure, that the Developer is complying
with this Agreement. Such officers, employees, agents or representatives of the Agency and/or the City
shall be those persons who are so identified by the Executive Director. Any and all officers, employees,
agents or representatives of the Agency and the City who enter the Property pursuant hereto shall identify
themselves at the Project I office upon their entrance on to the Property and shall at all times be
accompanied by a representative of the Developer while on the Property; provided, however, that the
Developer shall make a representative of the Developer available for this purpose at all times during
Normal Business Hours upon reasonable notice from the Agency. The Agency shall .indemnify, defend
and hold the Developer harmless from injury, property damage or liability arising out of the exercise by
the Agency and/or the City of this right of access, other than injury, property damage or liability relating
to the negligence of the Developer w its officers, agents or employees. `
4.1.23 The Agency shall inspect relevant portions of the construction of the Project.
on the Property prior to issuing any written statements reflecting adversely - on the Developer's compliance
with the ternvs and conditions of this Agreement pertaining to development of the Project on the Property;
provided however, that the Developer has not objected to such an inspection by the Agency or otherwise
prevented the Agency from conducting such an inspection.
4.2 Prooerty Taxes and Assessments The Developer shall pay,prior to the delinquency all
real property taxes and assessments assessed and levied on or against the Property subsequent to the Close
of Escrow. Nothing herein contained shall be deemed to prohibit the Developer from contesting the
validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the
Developer in respect thereto, or for claiming exemptions available under California Revenue and
Taxation Coda 214 (g).
4.3 Prohibition Against Transfer
4.3.1 Except as expressly provided in Section.4.4, prior to the recordation of the
Certificate of Completion with respect to development of the Project on the Property, the Developer shall
not, without prior written approval of the Agency, which may not be unreasonably withheld, delayed or
conditioned, or except' as permitted by this Agreement, (i) assign or attempt to assign this Agreement or
any right herein or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment
of the whole or any part of the Property or the improvements thereon or permit to be placed on any of the
Property any unauthorized mortgage, Deed of Trust,. deed of trust encumbrance or Lien. This prohibition
shall not apply to the reasonable grant by the Developer of utility easements or permits to facilitate the
development of the Property.
4.3.2 In the absence of specific written agreement or approval by the Agency, no
unauthorized sale, transfer, conveyance, lease, leaseback or assignment of the Property shall be deemed to .
relieve the Developer or any other party from any obligations under this Agreement.
4.4 Security Financing: Right of Holders
4.4.1 Notwithstanding any provision of Section 4.3 to the contrary, any Lien
required for any reasonable method of financing the construction and improvement of the Property is
permitted before the recordation of any Certificate of Completion. The Developer shall notify the Agency
in writing in advance of any Lien if the Developer proposes to enter into the same before the recordation
of any Certificate of Completion. The Developer shall not enter into any such Lien without first
providing written notice to the Agency.. The following restrictions apply to any Lien: (i) it must be given
to a responsible financial or lending institution including, without limitation, banks, savings and loan
institutions, insurance companies, real estate investment trusts, pension programs and the like, or other
RVPUBUNARNER \710715.1 -29-
acceptable persons or entities for the purpose of financing the construction of the Project on the Property,
and (ii) any Loan made in connection with the Lien must contain customary construction lender
disbursement controls.
4.4.2 The Developer shall promptly notify the Agency of any Lien that has been
created or attached thereto prior to completion of the construction of the Project on the Property whether
by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary
notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to
foreclose such mechanic's lien.
4.4.3 The holder of any mortgage, deed of trust or other security interest
authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to
construct the Project on the Property or to guarantee such construction or completion. Nothing in this
Agreement shall be deemed to permit or authorize any such holder to devote the Property to any other
use, or to construct any other improvement thereon, except those uses or improvements provided for or
authorized by this Agreement.
4.4.4 Whenever the Agency shall deliver any notice or demand to the Developer
with respect to any breach or Default by the Developer in the completion of construction of the Project on
the Property, or any breach or Default of any other obligations which, if not cured by the Developer,
entitle the Agency to terminate this Agreement or exercise its right to re -enter the Property, or a portion
thereof, the Agency shall at the same time deliver to each holder of record of any Lien authorized by this
Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency
are'concerned) have the right, at its option, to commence the cure or remedy of any such Default and to
diligently and continuously proceed with such cure or remedy, within sixty (60) calendar days after the
receipt of the notice; and to add the cost thereof to the security interest debt and the lien of its security
interest. If the Default can only be remedied or cured by such holder upon obtaining possession, such
holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and
shalttremedy or cure such default within sixty (60) calendar days after obtaining possession; provided that
in the case of a Default which cannot with diligence be remedied or cured, or the remedy or cure of which
cannot be commenced, within such sixty (60) calendar day period, such holder shall have such additional
time as is reasonably necessary to remedy or cure such Default of the Developer, not to exceed one
hundred eighty (180) calendar days. Nothing contained in this Agreement shall be deemed to permit or
authorize such holder to undertake or continue the construction or completion of the Project on the
Property (beyond the extent necessary to conserve or protect the improvements or construction already
made) without first having expressly assumed the Developer's obligations by written agreement
satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in
this Agreement, the improvements to which the Lien relates and must submit evidence satisfactory to the
Agency that it has the qualifications and financial responsibility necessary to perform such obligations.
Any such holder completing such improvements in accordance herewith shall be entitled, upon written
request made to the Agency, to be issued the Certificate of Completion by the Agency.
4.4.5 In any case where, one hundred eighty (180) calendar days after Default by
the Developer under this Agreement, the holder of any such Lien has not exercised the option to construct
the applicable portions of the Project on the Property, or has exercised the option but has not proceeded
diligently and continuously with the completion of the construction of the Project on the Property, then in
such event, the Agency may purchase the Lien by payment to the holder of the amount of the unpaid debt,
including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable
to the holder by the Developer under the loan documents between holder and the Developer. If the
ownership of the Property has vested in the holder, the Agency, if it so desires, shall be entitled to a
RVPUBVCVARNER1710715.1 -30-
conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of
the following:
4.4.5.1 The unpaid Lien debt, including principal, accrued and unpaid
interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the
loan documents between the holder and the Developer, -at the time title became vested in the holder (less
all appropriate credits, including those resulting from collection and application of rentals and other
income received during foreclosure proceedings).
4.4.5.2 All expenses, if any, incurred by the holder with respect to
foreclosure.
4.4.5.3 The net expenses, if any (exclusive of general overhead), incurred by
the holder as a direct result of the subsequent ownership or management of the Property, such as
insurance premiums and real estate taxes.
4.4.5.4 The cost of any improvements made by such holder.
4.4.5.5 An amount equivalent to the interest that would have accrued on the
aggregate on such amounts had all such amounts become part of the Lien had the Lien continued in
existence to the date of payment by the Agency.
4.4.6 In the event of a default or breach by the Developer of a Lien: with respect to
the Property (or any portion thereof) prior to the issuance of a Certificate of Completion for the Project,
and the holder hasmot exercised its option to complete the development, the Agency may cure the default
but is under no obligation to do so prior to completion of any, foreclosure. In such event, the Agency shall
be entitled to reimbursement from the Developer of all costs and expenses, incurred by the Agency in
curing the default. The Agency shall also be deemed to have a Lien of the Agency as may arise under this
Section 4.4.6 upon the Property (or any portion thereof) to the extent of such costs and disbursements.
Any such Lien shall be subordinate and subject to mortgages, deeds of trust or other security instruments
executed by the Developer for the purpose of obtaining the funds to construct and improve the Property as
authorized herein.
4.5 Rieht of the Aeencv to Satisfv Other Liens on the _Pr onerty. after Conveyance of Title
After the conveyance of title to the Property by the Agency to the Developer and prior to the recordation
of the Certificate of Completion, and after the Developer has had a reasonable time to challenge, cure or
satisfy any unauthorized Liens on the Property, the Agency shall after sixty (60) calendar days prior
written notice to the Developer have the right to satisfy any such Liens; provided, however, that nothing
in this Agreement shall. require the Developer to pay or make provisions for the payment of any tax,
assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount
thereof, and so long as such delay in payment shall not subject the Property or any portion thereof, to
forfeiture or sale.
4.6 Certificate of Completion
4.6.1 Following the written request therefor by the Developer and the completion
of construction of the Project on the Property, excluding minor building punch -list items to be completed
by the Developer upon any New -Home in the Project, the Agency shall furnish the Developer with a
Certificate of Completion for the Project, substantially in the form set forth in Exhibit F, and such
Certificate of Completion r shall be recorded after the Developer's completion of construction of the
Project on the Property if requested by the Developer. Notwithstanding any provision set forth herein to
RVPUB\KVARNER \710715.1 -31-
the contrary, the completion of construction of the Project on the Property shall include the completion of
construction of all of the New Homes on the Property and any related improvements necessary to support
or which meet the requirements applicable to occupancy of each New Home comprising the Project.
4.6.2 The Agency shall not unreasonably withhold the issuance of a Certificate of
Completion. A Certificate of Completion shall be, and shall so state, that it is a conclusive detennimtion
of satisfactory completion of all of the obligations of this Agreement with respect to construction of the
Project. After the recordation of the Certificate of Completion, any party thereafter leasing or otherwise
acquiring any interest in a New Home shall not (because of such lease or acquisition) incur any obligation
or liability under this Agreement, except that such party shall be bound by any covenants contained in the
Agency Quitclaim Deed or other instrument of transfer, which the Agency Quitclaim Deed or other
instrument of transfer shall include the provisions of Section 5.2 and 5.3 of this Agreement.
4.6.3 The Certificate of Completion shall be in such form as to permit it to be
recorded in the Recorder's Office of Los Angeles County, California.
4.6.4 If the Agency refuses or fails to fimnish a Certificate of Completion after
written request from the Developer, the Agency shall, within fifteen (15) calendar days of the written
request or within three (3) calendar days after the next regular meeting of the Agency, whichever date
occurs later, provide to the Developer a written statement setting forth the reasons with respect to the
Agency's refusal or failure to famish a Certificate of Completion. The statement shall also contain the
Agency's opinion of the action the Developer must take to obtain a Certificate of Completion. If the
reason for such refusal is confined to the immediate unavailability of specific items or materials for
construction (iFlandscaping at a price reasonably acceptable to the Developer or other minor building
"punch -list" items the Agency may issue its Certificate of Completion upon, the posting of a bond or
irrevocable letter of credit, reasonably approved as to form and substance by the Agency Counsel and
obtained by the Developer in an amount representing a fair value of the work not yet completed as
reasonably determined by the Agency. If the Agency shall have failed to provide such written statement
within the foregoing period, the Developer shall be deemed conclusively and without further action of the
Agency to have satisfied the requirements of this Agreement with respect to the construction of the
Project on the Property as if a Certificate of Completion had been issued therefore.
4.6.5 A Certificate of Completion shall not constitute evidence of compliance with
or satisfaction of, any obligation of the Developer to any holder of a Lien securing money loaned to
finance the construction of the Project on the Property, or any part of the Project. A Certificate of
Completion shall not be deemed to constitute a notice of completion as referred to in California Civil
Code Section 3093, nor shall it act to terminate the continuing covenants or conditions subsequent
contained in this Agreement, the Agency Quitclaim Deed, or a Regulatory Agreement.
4.7 Marketing Annlication and Initial Owner Selection Plan The Developer shall comply
with the Marketing Application and Initial Owner Selection Plan attached as Exhibit N, and with any
amendment thereto which are imposed by any state or federal agency. The Marketing, Application and
Initial Owner Selection Plan is incorporated herein by this reference.
ARTICLE V
USE OF THE PROPERTY
5.1 Proieci Restricted to Oualified Households The Developer shall record a duly executed
Regulatory Agreement against each New Home concurrently with the initial conveyance of such New
Home to a Qualified Household. As more particularly provided in the Regulatory Agreement, the
RVPUBUNARNER \710715.1 -32-
Developer covenants and agrees for itself, its successors, and assigns that each New Home in the Project
remain affordable to Qualified Households for a period of forty-five (45) years following the close of
escrow for the initial conveyance of such New Home to a Qualified Household. The covenants of this
Section 5.1 shall run with the land.
5.2 Obligation to Refrain from Discrimination the Developer covenants and agrees for
itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that
there shall be no discrimination against or segregation of any person, or group of persons, on account of
sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Developer, itself or any person
claiming under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessee or vendees of the Property.
5.3 Form of Nondiscrimination and Nonsegreeation Clauses the Developer covenants and
agrees for itself, its successors, its assigns, and every successor in interest to the Property, or any part
thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease,
sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part thereof) on the
basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All
deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
5.3.1 In Deeds "The grantee herein covenants by for itself, its successors and
assigns, and all persons claiming undez -or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through
it, establish,or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land."
5.3.2 In Leases "The Lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, and this lease is made and accepted upon and
subject to the following conditions: That there shall be no discrimination against or segregation of any
person or group of persons, oil account of race, color, creed, religion, sex, marital status, national origin,
or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein
leased."
5.3.3 In Contracts "There shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion sex, marital status, national origin, or
ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein
transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or
parties and any subcontracting party or parties, or other transferees under the instrument.
RVPUBUCVARNER%710715.1 -33-
5.4 Effect and Duration of Covenants The covenants established against discrimination shall
remain in effect in perpetuity. The covenants respecting use, occupancy and maintenance of the Project
shall remain in effect for a period of forty-five (45) years following the close of escrow for the initial
conveyance of a New Home to a Qualified Household. All of the covenants set forth in Section 5.1
through 5.3 shall run with the land and shall constitute equitable servitudes thereon, and shall, without
regard to technical classification and designation, be binding for the benefit and in favor of the Agency,
its successors and assigns and the City.
5.4.1 The Agency may enforce the terms and provisions of this Agreement and the
covenants runnin with the land for and in its own rights and for the purposes of protecting the interests
of the Community. the Agency shall have the right, if such covenants are breached, to exercise all rights
and remedies and to maintain any actions or suits at or in equity or such other proper proceedings to
enforce the curing of such breaches to which it or any other beneficiary of such covenants may be
entitled, including, without limitation, to specific performance, damages and injunctive relief. The
Agency shall have the right to assign all of its rights and benefits hereunder to the City.
ARTICLE VI
DEFAULTS, REMEDIES AND TERMINATION
6.1 Defaults
6.1.1 Subject to the extensions of time set forth in Section 7.5 hereof, failure or
delay by either Party to perform any term or provision of this- Agreement shall constitute a default under
this Agreement; provided, however, that if a Party otherwise in default commences to cure, correct or
remedy such default within thiry (30) calendar days after receipt of written notice specifying such default
and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where
any time limits for the completion of such cure, correction or remedy are specifically set forth in this
Agreement, then within said time limits), such Party shall not be deemed to be in default hereunder.
6.1.2 The injured Party shall give written notice of default to the Party in default,
specifying the default complained of by the non - defaulting Party. Delay in giving such notice shall not
constitute a waiver of any default nor shall it change the time of default.
6.1.3 Any failure or delays by either Party in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies.
Delays by either Party in asserting any of its rights and remedies shall not deprive either Party of its right
to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or
enforce any such rights or remedies.
6.2 Leeal Actions
6.2.1 In addition to any other rights or remedies, either Party may institute legal
action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other
remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the
Superior Court of Los Angeles County, California, or in any other appropriate court in Los Angeles
County, California.
6.2.1.1 The laws of California shall govern the interpretation and
enforcement of this Agreement.
RVPUB\KVARNER \710715.1 -34-
6.2.1.2 In the event that any legal action is commenced by the Developer
against the Agency, service of process on the Agency shall be made by personal service upon the
Executive Director or Chairperson of the Agency, or in such other manner as may be provided by law.
6.2.1.3 In the event that any legal action is commenced by the Agency
against the Developer, service of process on the Developer shall be made by personal service on the
Executive Director or the Chairperson of the Board (or such other agent for service of process and at such
address as may be specified in written notice to the Agency), or in such other manner as may be provided
by law, and shall be valid whether made in or outside of California.
6.3 Rights and Remedies are Cumulative Except with respect to any rights and remedies
expressly declared to' be exclusive in this Agreement, the rights and remedies of the Parties are
cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude
the exercise by it, at the 'same or different times, of any other rights or remedies for the same default or
any other default by the other Party.
6.4 Damages If either Party defaults with regard to any provision of this Agreement
following the Close of Escrow, the non - defaulting Party shall serve written notice of such default upon
the defaulting Party. If the defaulting Party does not diligently commence to cure such default within
thirty (30) calendar days after service of the notice of default and promptly complete the cure of such
default within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may
otherwise be specified in this Agreement for any specific default), after the service of written notice of
such default, and slkb�ect to the provisions of Section 7. 10, the defaulting Party shall be liable to the other
Party for damages caused by such default.
6.5 Specific Performance If the Developer defaults under any of the provisions or covenants
set forth in Article V of this Agreement, the Agency shall serve written notice of such default upon the
Developer. If the Developer does not commence to'cure the default and diligently and continuously
proceeds with such cure within thirty '(30) calendar days after service of the notice of default; and such
default is not cured within a reasonable time thereafter, the Agency, at its option and in addition to any
other remedies available to it for such default; may institute an action for specific performance of the
terms of Article V.
6.6 Aaencv Rights of Termin Following Close of Escrow
' 6.6.1 Subject to written notice of default which shall specify the Developer's
default and the action requited to commence cure of same and upon thirty (30) calendar days notice to the
Developer of the Agency's intent to terminate this Agreement pursuant to this Section,6:6, the Agency at
its option may terminate this Agreement following the Close of Escrow, if the Developer is in breach of
this Agreement, assigns or attempts to assign this Agreement, or any right therein, or attempts to make
any total or partial sale, lease or leaseback, transfer or conveyance of the whole or any part of the
Property or the improvements to be developed thereon in violation of the terms of this Agreement, and the
Developer does not correct such violation within thirty (30) calendar days from the date of receipt of such
notice.
6.6.2 Subject to written notice of default, which shall specify the Developer's
default and the action required to commence cure of same and upon thirty (30) calendar days notice to the
Developer of the Agency's intent to terminate this Agreement pursuant to this Section 6.6, following the
Close of Escrow, the Agency at its option may terminate this Agreement if the Developer: (i) does not
within the time limits set forth in this Agreement or as specifically provided in the Schedule of
Performance, subject to extensions authorized by this Agreement due to force majeure or otherwise,
RVPUR\KVARNER \710715.1 -35-
submit development plans, Construction drawings and related documents acceptable to the Planning
Division and Building Division of the City for plan check purposes and in order to obtain building
permits for the improvement of the Property, together with applicable fees therefor prepared to the
minimum acceptable standards as required by the Planning Department and Building Division of the City
for commencement of formal review of such documents and as required by this Agreement, or (ii) does
not carry out its other responsibilities under this Agreement or in accordance with any modification or
variance, precise plan, design review and other environmental or governmental approvals and such
default is not cured or the Developer does not commence and diligently and continuously proceed with
such cure within thirty (30) calendar days after the date of receipt of written demand therefore from the
Agency.
6.7 Right.to Reenter. Repossess and Revest
6.7.1 Following the Close of Escrow, the Agency shall, upon thirty (30) calendar
days notice to the Developer which notice shall specify this Section 6.7, have the right; at its option, to re-
enter and take possession of all or any portion of the Property, together. with all improvements thereon;
and to terminate and revest in the Agency the estate conveyed to the Developer hereunder, if after
conveyance of title and prior to the recordation of the Certificate of Completion, the Developer (or its
successors in interest) shall:
_mil 6.7.1.1 Fail to commence Construction of all or any portion of the Project as
required by this Agreement for a period of ninety (90) calendar days after. the time specified for such
commencement in the Schedule of Performance; provided that the Developer shall not have obtained an
1`
extension or postponement to which the Developer may be entitled pursuant to Section 7.5 hereof, or
6.7.1.2 Abandon or substantially suspend Construction of all or any portion
of the Project as required by this Agreement for a period of ninety (90) calendar days after written notice
of such-abandonment or suspension from the Agency-, provided that the Developer shall not have obtained
an extension or postponement to which the Developer may be entitled to pursuant to Section 7.5 hereof;
or
6.7.1.3 Assign or attempt to assign this Agreement, or any rights herein, or
transfer, or suffer any involuntary transfer, of the Property or any part thereof, in violation of this
Agreement, and such violation shall not have been cured within fifteen (15) calendar days after the date of
receipt of written notice thereof from the Agency to the Developer;
6.7.1.4 Fail to complete Construction of the entirety of the Project as required
by this Agreement for a period of ninety (90) calendar days after the time specified for completion in the
Schedule of Performance; provided that the Developer shall not have obtained an extension or
postponement to which the Developer may be entitled pursuant to Section 7.5 hereof, or
6.7.2 The thirty (30) calendar day written notice specified in Section 6.7.1 shall
specify that the Agency proposes to take action pursuant to this Section and shall specify which of the
Developer's obligations set forth in Section 6.7.1 have been breached. The Agency shall proceed with its
remedy set forth herein only in the event that the Developer continues in Default of said obligation(s) for
a period of thirty (30) calendar days following such notice or, upon commencing to cure such Default,
fails to diligently and continuously prosecute said cure to satisfactory conclusion..
6.7.3 The right of the Agency to terminate this Agreement and reenter, repossess
and revest in title in the Property shall be subject and subordinate to, shall be limited by and shall not
defeat, render invalid or limit:
RVPUWKVARNER1710715.1 -36-
6.7.3.1 Any mortgage, deed of trust or other security interest permitted by
this Agreement;
6.7.3.2 Any rights or interests provided in this Agreement for the protection
of the holders of such mortgages, deeds of trust or other security interests;
6.7.3.3 Any leases, declarations of covenants, conditions and restrictions,
easement agreements or other recorded documents previously approved or authorized by the Agency and
applicable to -the Property.
6.7.4 Upon the revesting in the Agency of title to the Property, or any part thereof,
as provided in this Section 6, the Agency shall, pursuant to its responsibilities under California law, use
its best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner
as the Agency shall find feasible and consistent with the objectives of such law, to. a qualified and
responsible party or parties (as determined by the Agency) who will assume the obligations of making or
completing the improvements, or such other improvements in their stead as shall be satisfactory to the
Agency and in accordance with the uses specified for the Property, or any part thereof. Upon such resale
of the Property, or any part thereof, the proceeds thereof shall be applied:
6.7.4.1 First, to make any payment made or necessary to be made to
discharge or prevent from attaching or being made any subsequent Liens (defined in the Agreement) due
to obligations incurred with respect to the making or completion of the agreed improvements or any part
thereof on the Property or anygortion thereof; next to reimburse the Agency for all actual costs and
expenses incurred by the Agency; including but not limited to -customary and reasonable fees or salaries
to third party personnel engaged in such action (but excluding the Agency's general overhead expense), in
connection with the recapture, management and resale of the Property or any portion thereof; all taxes,
assessments and water and sewer charges paid by the Agency with respect to the Property or any portion
thereof; any amounts otherwise owing to the Agency by the Developer and its successor transferee and
6.7.4.2 Second, to the extent that any and all funds which are proceeds from
such resale are thereafter available, to reimburse the Developer, or its successor transferee the costs
incurred for the development of the Property, or applicable part thereof, or for the Construction of the
improvements thereon including, but not limited to, costs of carry, taxes, and items set forth in the
Developer's cost statement which shall be submitted to and approved by the Agency.
6.7.4.3 Any balance remaining after the foregoing application of proceeds
shall be retained by the Agency.
ARTICLE VII
GENERAL PROVISIONS
7.1 Notices. Demands and Communications Between the Parties
7.1.1 Any and all notices, demands or communications submitted by any Parry to
another Party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by
messenger for immediate personal delivery, or by registered or certified United States mail, postage
prepaid, return receipt requested, to the principal office of the Agency and the Developer, as applicable,
as designated in Section 1.2 hereof. Such written notices, demands and communications may be sent in
the same manner to such other addresses as either Party may from time to time designate as provided in
this Section 7.1.1. Any such notice, demand or communication shall be deemed to be received by the
RVPUMKVARNER \710715.1 -37-
addressee, regardless of whether or when any return receipt is received by the sender or the date set forth
on such return receipt, on the day that it is dispatched by messenger, for immediate personal delivery, or
two (2) calendar days after it is placed in the United States mail as heretofore provided.
7.1.2 In addition to the submission of notices, demands or communications to the
Parties as set forth above, copies of all notices shall also be delivered by facsimile as follows:
to the Developer. with copy to:
Trademark Development Company, LLC
to the Agency:
Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91066
Attention: Executive Director Facsimile:
(626) 446 -5729
with copy to:
Best Best and Krieger LLP
3750 University Avenue
Suite 400
Riverside, California 92501
Attention: Kevin K. Randolph
Facsimile: (951) 686 -3083
7.2 Conflict of Interest No member, official, employee or agent of the Developer shall have
any personal interest, direct or indirect, in this Agreement, or in the development of the Project on
Property, nor shall any such member, official, employee or agent of the Developer participate in any
decision relating to the Agreement. The Parties represent and warrant that they do not have knowledge of
any such conflict of interest.
7.3 Warranty Against Payment of Consideration for Agreement The Developer warrants
that it has not paid or given, and will not pay or give, any third party any money or other consideration for
obtaining this Agreement. Third parties, for the purposes of this Section 7.3, shall not include persons to
whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants,
engineers, architects and the like when such fees are considered necessary by the Developer:
7.4 Nonliability of the Ag_encv Officials and Emulovees No member, official or employee
of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any
default or breach by the Agency or for any amount which may become due to the Developer or to its
successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful
acts of such member, officer or employee.
7.5 Enforced Delay: Extension of Time of Performance In addition to specific provisions of
this Agreement, performance by either Party hereunder shall not be deemed to be in default, or considered
to be a default, where delays or defaults are due to the force majeure events of war, acts of terrorism
insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public
enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather- caused
delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or
supplier, which are not attributable to the fault of the Party claiming an extension of time to prepare or
RVPUBT,VARNER \710715.1 -38 -'
acts or failure to act of any public or governmental agency or entity (provided that acts or failure to act of
the City, or the Agency shall not extend the time for the Agency to act hereunder except for delays
associated with a lawsuit or injunction including but without limitation to lawsuits pertaining to the
approval of the Agreement, and the like). An extension of time for any such force majeure cause shall be
for the period'of the enforced delay and shall commence to run from the date of occurrence of the delay;
provided however, that the Party which claims the existence of the delay has first provided the other Party
with written notice of the occurrence of the delay within ten (10) calendar days of the commencement of
such occurrence of delay. The inability of the Developer to, obtain a satisfactory commitment from a
construction Lender for the improvement of the Property or to satisfy any other condition of this
Agreement relating to the redevelopment of the Property shall not be deemed to be a force majeure event
or otherwise provide grounds for the assertion of the existence of a delay under this. Section 7.5. The
Parties hereto expressly acknowledge and agree that changes in either general economic conditions or
changes in the economic assumptions of any of them which may have provided a basis for entering into
this Agreement and which occur at any time after the execution of this Agreement, are not force majeure
events and do not provide, any Party with grounds for asserting the existence of a delay in the performance
of any covenant or undertaking which may arise under this Agreement, Each Party expressly assumes the
risk that changes in general economic conditions or changes'in such economic assumptions relating to the
terms and covenants of this'Agreement could impose an inconvenience or hardship on the continued
performance of such Party finder this Agreement, but that such inconvenience or hardship is not a force
majeure event and does not excuse the performance by such Party of its obligations under this Agreement.
7.6 Inspection of Books and Records The Agency have the right at all reasonable times
at the Agency's cost and expense to inspect the books and records of the Developer pertaining to the
.Property, and/or the development of the Project on the Property, as nftessary for the Agency, in its
reasonable discretion, to enforce its rights under this Agreement. Matters discovered by the Agency shall
not be disclosed to third parties unless required by law or unless otherwise resulting from or related to the
pursuit of any remedies or the assertion of any rights of the Agency hereunder.
7.7 Annrovals Except as otherwise provided in this Agreement, approvals required of the
Agency `or the Developer,' or any officers, agents or employees of either the Agency or the Developer,
shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in
the Schedule of Performance or, if no time is given, within a reasonable time.
7.8 Real Estate Commissions The Agency shall not be liable for any real estate
commissions, brokerage fees or finder fees which may arise from or relate to this Agreement.
7.9 Indemnification The Developer agrees to indemnify and hold the City and the Agency,
and their officers, employees and agents, harmless from and against all damages, judgments, costs,
expenses and fees arising from or related to any act or omission of the Developer in performing its
obligations hereunder: The Agency agrees to indemnify and hold the Developer and its officers,
employees and agents, harmless from and against all damages, judgments, costs, expenses and fees
arising from or related to any act or omissioa of the Agency in performing its obligations hereunder.
7.10 Release of the Developer from Liability Notwithstanding any provision herein to the
contrary, the 'Developer shall be relieved of any and all liability for the obligations of, the Developer
hereunder with regard to the development of the Property when a Certificate of Completion has been
issued by the Agency hereunder with respect thereto, other than any covenants and obligations provided
by the Regulatory Agreement or the Agency Quitclaim Deed. The provisions of this Section 7.10 shall
extend to any permitted successor of the Developer. Nothing contained in this Section 7.10 shall be
deemed to impair any security interest held by the Agency in the Project or the Property or to preclude the
RVPUB\KVARNER \710715.1 -39-
Agency from foreclosing thereon or from realizing upon any security encumbered in favor of the Agency
in the event of a default by the Developer.
7.11 Attorneys' Fees. If either Party hereto files any action or brings any action or proceeding
against the other arising out of this Agreement, or is made a party to any action or proceeding brought by
the Escrow Bolder or a third party, then as between the Developer and the Agency, the prevailing Party
shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys'
fees and costs of experts as fixed by the. Court, in such action or proceeding or in a separate action or
proceeding brought to recover such attorneys' fees. For the purposes hereof the words `reasonable
attorneys' fees" mean and include, in the case of the Agency, salaries and expenses of the lawyers
employed by the Agency (allocated on an hourly basis) who may provide legal services to the Agency in
connection with the representation of the Agency in any such matter.
7.12 Effect. This Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns.
7.13 Further Assurances The Parties agree to reasonably consider such additional actions or
the execution of such other documents as may be reasonably necessary or convenient to the financing,
development, and operation of the Project, although nothing in this Section 7.13 shall be deemed a
representation, guarantee or commitment by either Party to take any action or execute any document.
Without limiting the generality of the foregoing, the Agency agrees that it will not unreasonably withhold
its approval of any amendment to this Agreement requested by any Lender providing financing for the
Project in accordance with the terms of the Financing Plan and Project Budget.
ARTICLE VIII
ENTIRE AGREEMENT, WAIVERS AND AMENDMENT
8.1 Entire Agreement This Agreement integrates all of the terms and conditions mentioned
herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties
with respect to all or any portion of the Property and the development thereof.
8.2 No Merger With Quitclaim Deed None of the terms, covenants, agreements or
conditions set forth in this Agreement shall be deemed to be merged with the Agency Quitclaim Deed,
and this Agreement shall continue in full force and effect before and after such conveyance.
8.3 Waivers and Amendments All waivers of the provisions of this Agreement and all
amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the
Developer.
8.3.1 Authority of Executive Director The Executive Director of the Agency is
authorized to sign on his or her own authority amendments to this Agreement which are of routine or
technical nature, including minor adjustments not exceeding in the aggregate sixty (60) calendar days to
the Schedule of Performance.
ARTICLE IX
EXECUTION AND RECORDATION OF AGREEMENT
9.1 Execution of Agreement
aVPUB\KVARNER \710715.1 -40-
9.1.1 Counteroarts This Agreement shall be executed in three (3) triplicate
originals each of which is deemed to be an original. This Agreement includes forty three (43) pages
(including signature pages) and fourteen (14) Exhibits, which constitute the entire understanding and
Agreement of the Parties.
9.1.2 Acceptance of Agreement By the Agencv Following its execution by the
Developer and prompt delivery thereafter to the Agency, this Agreement shall be subject to the review
and approval by the Governing Board of the Agency in its sole and absolute discretion within forty-five
(45) calendar days after the date of signature by the Developer. In the event that the Agency has not
approved, executed and delivered this Agreement to the Developer within the foregoing period, then the
Parties shall be mutually released from any further duties or obligations hereunder.
IN WITNESS WIIEREOF, the Parties hereto have duly executed this Agreement as of the dates
set forth below.
[Signatures on Following Pages]
RVPU]3\KVARNER \710715.1 -41-
SIGNATURE PAGE
TO
AFFORDABLE HOUSING AGREEMENT
AGENCY:
THE REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA,
a public body, corporate and politic
Date:
ME
William R. Kelly
Executive Director
ATTEST:
0
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
Lo
Agency Counsel
RVPUBVCVARNER \710715.1 -42-
SIGNATURE PAGE
TO
AFFORDABLE HOUSING AGREEMENT
DEVELOPER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
Date: By:
Its:
By:
Its:
RVPUBWVARNERV 10715.1 43-
EXHIBIT C
TO
AFFORDABLE HOUSING AGREEMENT
Project Scope of Development
As part of the Project and pursuant to the terms and conditions of the Agreement, the Developer
shall: (i) acquire the Property, and (ii) construct on the Property six (6) owner - occupied multi- family
residences which shall be reserved for occupancy, for a period of at least forty-five (45) years, by families
whose household earnings do not exceed one hundred twenty percent (120 %) of the Los Angeles County
median income.
The Developer shall construct three (3) two- bedroom New Homes approximately thirteen
hundred (1,300) square feet in size and three (3) three- bedroom New Homes approximately fifteen
hundred (1,500) square feet in size. Every New Home shall contain two (2) bathrooms.
[May wish to add detail showing elevations, architecture, etc.]
RVPUB\KV ARNER \710715.1
The Developer to submit to the Agency an ALTA lender's title insurance
May 23, 2006
policy in the amount of the fair market value of the Property
The Developer to submit to the Agency Proof of Insurance in accordance with
May 23, 2006
Section 4.1.19 of the Agreement
The Developer shall open Escrow with Escrow Holder.
May 25, 2006
The Developer shall submit tentative tract map application to the Planning
May 30, 2006
Division. (Thus process can run concurrently with the plan check process —
developer assumes all potential risks)
The Developer shall submit Construction documents for plan check to the
May 30, 2006
Building Division. (This process can run concurrently with the tentative tract
map process — developer assumes all potential risks)
The City to provide the Developer with corrections to plans from plan checker
No later than 28 days
from first submittal.
from submittal to the
City
The Developer to submit revised Construction documents to the Building No later than 14 days
Division for second plan check. from receipt of City
comments.
The City to provide the Developer with final corrections to plans from second No later than 28 days
submittal. from re- submittal to the
City.
The Planning Commission to consider the tentative tract map for the Project by July 25, 2006
public hearing.
The Developer to submit final plans for permits and pay fees at the Building
Division.
The Developer to comply with Section 2.8.1 of the Agreement entitled
Developer's Conditions Precedent
The Developer to commence Construction of the Project on the Property
The Developer to submit to the Agency the final tract map for the Project.
No later than 14 days
upon receipt of City's
final comments.
Prior to the close of
escrow.
No later than 90 days
after conveyance of the
Property to the
Developer.
No later than 60 days
before request for
Certificate of
Completion
RVPUB\KV ARNER \710715.1
The Agency Board shall consider final tract map for the Project.
Completion of Construction of the Project on the Property.
No later than 30 days
before request for
Certificate of
Completion
Within 12 months after
commencement of
Construction of the
Property.
RV P UB\KV ARNER \710715.1
EXHIBIT E
TO
AFFORDABLE HOUSING AGREEMENT
Agency Quitclaim Deed
[Attached Behind This Page]
Y�
RV P MKV ARNER \710715.1
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, CA 91066
Attention: William R. Kelly
Trademark Development Company, LLC
Attention:
THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
QUITCLAIM DEED
CONTAINING POWER OF TERMINATION AND OTHER COVENANTS
AFFECTING THE FUTURE USE AND OCCUPANCY
OF CERTAIN PROPERTY
PART ONE
For valuable consideration, the receipt of which is hereby acknowledged, The
Redevelopment Agency of the City of Arcadia, a public body, corporate and politic ( "Grantor'), hereby
remises, releases and quitclaims to Trademark Development Company, LLC, a California limited liability
company ( "Grantee ") the real property legally described in Attachment 1 and by this reference
incorporated into this Quitclaim Deed ( "Property").
PART TWO
The quitclaim of the Property by the Grantor to the Grantee in Part One is subject to the
following Community redevelopment terms, conditions and covenants:
Section 1. Conveyance Pursuant to Terms of Affordable Housing Agreement The Property
is conveyed pursuant to that certain Affordable Housing Agreement, dated as of June 6, 2006, by and
between the Grantor and the Grantee ( "Agreement"). All capitalized terms not otherwise defined in this
Quitclaim Deed shall have the meaning ascribed to the terms in the Agreement..
Section 2. Condition of Property The Grantee acknowledges and agrees that the Property
are quitclaimed by the Grantor to the Grantee in its "AS IS," "WHERE IS" and "SUBJECT TO ALL
FAULTS CONDITION," as of the date of.recordation of this Quitclaim Deed, with no warranties,
expressed or implied, as to the environmental or other physical condition of the Property, the presence or
absence of any patent or latent environmental or other physical condition on or in the Property, or any
other matters affecting the Property.
Section 3. Proiect Restricted to Oualified Households Grantee covenants and agrees for
itself, its successors and assigns that each New Home the Developer is to construct as part of the Project
EXHIBIT Ul
RVPUB\KVARNER\710715.1
shall remain affordable to Qualified Households for a period of forty-five (45) years following the close
of escrow for the initial sale of the New Home to a Qualified Household.
Section 4. Obligation to Refrain from Discrimination The Grantee covenants and agrees
for itself, its successors, its assigns and every successor -in- interest to the Property,. or any part thereof,
that there shall be no discrimination against or segregation of any person, or group of persons, on account
of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Grantee, itself or any person
claiming under or through it establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-
tenants, sub - lessees or vendees of the Property.
Section 5. Form of Non - Discrimination and Non - Segregation Clauses The Grantee
covenants and agrees for itself, its successors, its assigns, and every successor -in- interest to the Property,
or any part thereof, that the Grantee, such successors and such assigns shall refrain from restricting the
sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part
thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any
person. All deeds, leases or contracts pertaining to the Property shall contain or be subject to
substantially the following non - discrimination or non - segregation covenants:
5.1 In deeds `°The Grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there. shall be no discrimination against
or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through
it, establish or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sub - tenants, sub - lessee, or vendees in
the premises herein conveyed. The foregoing covenants shall run with the land."
5:2 In leases "The Lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease is made and accepted upon
and subject to the following conditions: That there shall be no discrimination against or segregation of
any person or group of persons; on account of race, color, creed, religion, sex, marital status, national
origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure; or enjoyment of the
premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use, or occupancy, of tenants lessees, sub - lessees, sub- tenants, or vendees in the
premises herein leased."
5.3 In contracts "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status, national
origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the
premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy, of tenants, lessees, sub - lessees, sub - tenants, or vendees of
the prerr ses herein transferred. The foregoing provision shall be binding upon and shall obligate the
contracting party or parties and any subcontracting party or parties, or other transferees under the
instrument.
RV PUa\xV ARNER \710715.1
EXHIBIT E -2
Section 6. Power of T ermination .
6.1 Following the Close of Escrow, Grantor shall, upon thirty (30) calendar
days notice to Grantee which notice shall specify'this Section 6, have the right, at its option, to re -enter
and take possession of all a any portion of the Property, together with all improvements thereon, and to
terminate and revest in Grantor the estate conveyed to Grantee hereunder, if after conveyance of title, and
prior to the recordation of the Certificate of Completion, Grantee (or its successors in interest) shall:
6.1.1 Fail to commence Construction of all or any portion of the
Project as required by the Agreement for a period of ninety (90) calendar days after the time specified for
such commencement in the Schedule of Performance; provided that Grantee shall not have obtained an
extension or postponement to which Grantee may be entitled pursuant to Section 7.5 of the Agreement; or
6.1.2 Abandon or substantially suspend Construction of all or any
portion of the Project for a period of ninety (90) calendar days after written notice of such abandonment
or suspension from Grantor, provided that Grantee shall not have obtained an extension or postponement
to which Grantee may be entitled to pursuant to Section 7.5 of the Agreement; or
6.1.3 Assign or attempt to assign the Agreement, or any rights the
Agreement, or transfer, or suffer any involuntary transfer, of the Property or any part thereof, in violation
of the Agreement, and such violation shall not have been cured within fifteen (15) calendar days after the
date of receipt of written notice thereof from Grantor to Grantee; or
6.1.4 Fail to complete Construction of thq- entirety of the Project for a
period of ninety (90) calendar days after the time specified for completion in the- Schedule of
Performance; provided that Grantee shall not have obtained an extension or postponement to which
Grantee may be entitled pursuant to Section 7.5 of the Agreement.
6.2 The thirty (30) calendar day written notice specified in Section 6.1 shall
specify that Grantor proposes to take action pursuant to this Section 6 and shall specify which of
Grantee's obligations set forth in Section 6.1 have been breached. Grantor shall proceed with its, remedy
set forth herein only in the event that Grantee continues in default of said obligation(s) for a period of
thirty (30) calendar days following such notice or, upon commencing to cure such default, fails to
diligently and continuously prosecute said cure to satisfactory conclusion.
6.3 The right of Grantor to terminate the Agreement and reenter, repossess
and revest in title in the Property shall be subject and subordinate to, shall be limited by and shall not
defeat, render invalid or limit:
6.3.1 Any mortgage, deed of trust or other security interest permitted
by the Agreement;
6.3.2 Any rights or interests provided in the Agreement for the
protection of the holders of such mortgages, deeds of trust or other security interests;
6.3.3 Any leases, declarations of covenants, conditions and
restrictions, easement agreements or other recorded documents previously approved or authorized by
Grantor and applicable to the Property.
6.4 Upon the revesting in Grantor of title to the Property, or any part thereof,
as provided in this Section 6, Grantor shall, pursuant to its responsibilities under California law, use its
EXHIBIT E-3
RV PUB\KV ARNER \710715.1
best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner as
Grantor shall find feasible and consistent with the objectives of such law, to a qualified and responsible
party or parties (as determined by Grantor) who will assume the obligations of making or completing the
improvements, or such other improvements in their stead as shall be satisfactory to Grantor and in
accordance with the uses specified for the Property, or any part thereof. Upon such resale of the Property,
or any part thereof, the proceeds thereof shall be applied:
6.4.1 First, to make any payment made or necessary to be made to
discharge or prevent from attaching or being made any subsequent Liens due to obligations . incurred with
respect to the making or completion of the Project, next to reimburse Grantor for all actual costs and
expenses incurred by Grantor, including but not limited to customary and reasonable fees or salaries to
third party personnel engaged in such action, in connection with the recapture, management and resale of
the Property or any portion thereof; all taxes, assessments and water and sewer charges paid by the
Grantor with respect to the Property or any portion thereof, any amounts otherwise owing to Grantor by
Grantee and its successor transferee; and
6.4.2 Second, to the extent that any and all funds which are proceeds
from such resale are thereafter available, to reimburse Grantee, or its successor transferee, up to the
amount equal to the costs incurred for the development of the Property, or applicable part thereof, or for
the Construction of the improvements thereon including, but not limited to, costs of carry, taxes and items
set forth in Grantee's cost statement which shall be submitted to and approved by Grantor.
6.4.3 Any balance remaining after the foregoing application of
proceeds shall be retained by Grantor.
PART THREE
Section 7. Covenants Run with the Land of the Property Each of the covenants and
agreements contained in this Quitclaim Deed touch and concern the Property and each of them is
expressly declared to be a Community redevelopment covenant that runs with the land for the benefit of
the Grantor, and such covenants run with the land in favor of the Grantor for the entire period that such
covenants are in full force and effect, regardless of whether the Grantor is or remains an owner of any
land or interest in land to which such covenants relate. The Grantor, in the event of any breach of any
such covenants, has the right to exercise all of the rights and remedies, and to maintain any actions at law
or suits in equity or other proper proceedings, to enforce the curing of such breach, as provided in the
Agreement or by law. The covenants contained in this Quitclaim Deed are for the benefit of and are
enforceable only by the Grantor and shall survive the Close of Escrow, execution and recordation of this
Quitclaim Deed and the issuance and recordation of a Certificate of Completion, for the time period set
forth for each covenant.
Section 8. Costs and Attorneys' Fees for Enforcement Proceeding If legal proceedings are
initiated to enforce the rights, duties or obligations of any of the covenants set forth in this Quitclaim
Deed, then the prevailing party in such proceeding shall be entitled to collect its reasonable attorney fees
and costs from the other party in addition to any other damages or relief obtained in such proceedings.
Section 9. Effect of Unlawful Provision: Severability In the event that any provision of this
Quitclaim Deed may be held to be invalid or unlawful by a final judgment of a court of competent
jurisdiction, such invalidity shall not affect the validity of any other provision of this Quitclaim Deed.
IN WITNESS WHEREOF, the Grantor has caused this Quitclaim Deed to be executed by its
authorized representative(s) on this _ day of 2006.
RV PUBUNARNER \710715.1
EXHIBIT E-4
SIGNATURE PAGE
TO
AGENCY QUI'T'CLAIM DEED
GRANTOR:
THE REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA,
a public body, corporate and politic
Date:
ATTEST:
By:
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST and KRIEGER LLP
By:
Agency Counsel
[SIGNATURE MUST BE ACKNOWLEDGED]
By:
William R Kelly
Executive Director
EXHIBIT E -5
RV PUB\KVARNER \710715.1
CERTIFICATE OF ACCEPTANCE
OF
TBE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
QUITCLAIM DEED
The undersigned hereby acknowledges acceptance by Trademark Development Company, LLC, a
California limited liability company, the Grantee, in the Redevelopment Agency of the City of Arcadia
Quitclaim Deed, of the delivery of the subject property described within the Redevelopment Agency of
the City of Arcadia Quitclaim Deed, subject to all of the community redevelopment covenants expressly
set forth or incorporated within the Redevelopment Agency of the City of Arcadia Quitclaim Deed.
GRANTEE:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
By:
Its:
Date: By:
Its:
[ALL SIGNATURES MUST BE ACKNOWLEDGED]
EXHIBIT E -6
RVPUBWVARNERM0715.1
ATTACHMENT 1
TO
THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
QUITCLAIM DEED
Legal Description of Property
[Insert Legal Description of Property on this Page]
EXHIBIT E -7
RVPUBWV ARNER \710715.1
DATED AND ISSUED this _ day of
Date:
0
Executive Director
ATTEST:
02
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
i�
Agency Counsel
EXHIBIT F4
R V PUB\KV ARNER\710715,1
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91006
Attention: Executive Director
EXEMPT FROM RECORDING PEE PER GOVERNMENT CODE SEMON 27383
REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
FOR
OWNER OCCUPIED PROPERTY
LOCATED AT 119 AND 121 ALTA STREET IN THE CITY OF ARCADIA
RVPUB\ICCN675631.1
THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS FOR OWNER - OCCUPIED PROPERTY LOCATED AT 119 AND 121 ALTA STREET
( "Regulatory Agreement ") is dated ' 2006 for reference purposes only, and is made
by and among (i) THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body
corporate and politic ( "Agency "), (ii) TRADEMARK DEVELOPMENT COMPANY, LLC a California
limited liability company ( "Developer's, and (iii) ( "Qualified
Homebuyer'�. This Regulatory Agreement is entered into with reference to the following recitals of fact
("Recitals"):
RECITALS
A. The Developer is the fee simple owner of certain real property located at 119 and 121
Alta Street in the City of Arcadia ( "City's identified as Assessor's Parcel Numbers 5773 -014 -912 and
5773- 014 -913 ( "Property"). The Property is legally described in Exhibit A attached to this Regulatory
Agreement and incorporated into this Regulatory Agreement by this reference.
B. The Developer acquired the Property from the Agency pursuant to the terms of an
Affordable Housing Agreement dated June 6, 2006 ( "Agreement ") between the Agency and the
Developer which, among. other things, provided for: (i) the Agency's conveyance of its fee interest in the
Property to the Developer for a purchase price of One Dollar ($1); (ii) the Developer's development of
six (6) owner - occupied multifamily residences reserved for occupancy for persons and families of
moderate income ( "Project ") on the Property, and (iii) the Agency's loan to the Developer of an amount
not to exceed Seven Hundred Sixty Thousand Dollars ($760,000) to assist the Developer in financing
certain development expenses ("Agency Development Loan").
C. The Developer has agreed that in return for the Agency's conveyance of the Property,
and the Agency Development Loan, the Developer will develop the Project on the Property and, upon
selling the Property, will make the Property available at an affordable housing cost for persons and
families of moderate income, all as more specifically set forth in this Regulatory Agreement.
D. The Qualified Homebuyer proposes to acquire one of the New Homes in the Project
("New Home ") to be owned and occupied by the Qualified Homebuyer as their principal residence. The
legal description of the New Home is attached hereto as Exhibit B and incorporated herein by this
reference.
E. Pursuant to the terms of this Regulatory Agreement, the Agency, Developer and the
Qualified Homebuyer agree that the New Home shall be restricted in certain respects for the term as
provided herein in order to ensure that the New Home will be used and occupied in accordance housing
affordability goals and objectives of the Agency.
RVPUBUCCV1675631.1
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND
UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY
ACKNOWLEDGED, THE AGENCY, THE DEVELOPER AND THE QUALIFIED HOMEBUYER
DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEM SUCCESSORS AND
ASSIGNS AS FOLLOWS:-
Section 1. Definitions of Certain Terms As used in this Regulatory Agreement, the following
terms shall have the meaning as provided in this Section 1 unless the specific context of usage of a
particular word or term may otherwise require:
1.1 Adjusted Family Income The term "Adjusted Family Income" means the
anticipated total annual income (adjusted for family size) of each individual or family residing or treated
as residing in the New Home as calculated in accordance with Treasury. Regulation 1. 167(k) - 3b)(3)
under the Code, as adjusted, based upon family size in accordance with the household income
adjustment factors adjusted and amended from time to time, pursuant to Section 8 of the United States
Housing Act of 1937, as amended.
1.2 Affordable Housing Cost The term "Affordable Housing Cost" shall have the
meaning as set forth in California Health and Safety Code Section 50052.5(b)(4), as that section may
hereafter be amended from time -to -time. In the event that either the Qualified Homebuyer on the
Delivery Date, or later that a proposed Successor -In- Interest may be (but shall not be required to be) an
"extremely low income household," a "very low income household" or a "lower income household ", as
these terms are defined in the California Health and Safety Code, then in such event the amount of the
maximum Affordable Housing Cost payable by any such Successor -In- Interest household in connection
with the acquisition of the New Home at any time during the Qualified Residence Period shall be
calculated as set forth in Health and Safety Code 50052.5(b)(1), (2) or (3), as applicable.
1.3 Code The term "Code" means the Internal Revenue Code of 1986, as amended,
and any regulation, rulings or procedures with respect thereto.
1.4 Deed of Trust The term "Deed of Trust" means the performance deed of trust
attached to this Regulatory Agreement as Exhibit C and incorporated into this Regulatory Agreement by
this reference which secures the prompt and complete observance and performance of each.and every
monetary and non - monetary condition, obligation, covenant and agreement contained in this Regulatory
Agreement.
1.5 Delivery Date The term "Delivery Date" means the date of delivery of title and
possession of the New Home from the Developer to the Qualified Homebuyer at the close of the New
Home Escrow. In the case of a Successor -In- Interest, the words "Delivery Date" refers to the date on
which such Successor -In- Interest acquires the New Home from the Qualified Home Buyer; provided
however, that for the purpose of establishing the termination date of the Qualified Residence Period, the
Delivery Date shall refer to the date on which this Regulatory Agreement are recorded.
1.5 First Mortaaee Lender The term "First Mortgage Lender" shall have the
meaning ascribe to it in Section 5.1.
RVPUB\KCVW75631.1
1.6 Maintenance Deficiency The term "Maintenance Deficiency" shall have the
meaning ascribed to the term in Section 4, 1.
1.7 Moderate- Income Household The term "Moderate- Income Household" means
persons and families whose income does not exceed one hundred twenty percent (120 %) of. the then -
current area median income of the County of Los Angeles adjusted for family size by the California
Department of Housing and Community Development in accordance with adjustment factors adopted
and amended from time to time by the United States Department of Housing and Urban Development
pursuant to Section 8 of the United States Housing Act of 1937, as amended, and California Health and
Safety Code Section 50093, as - that section may hereafter be amended from time -to -time.
1.8 New Home The term "New Home" means the owner- occupied multi- family
residence sold from the Developer to the Qualified Homebuyer. The legal description of the New Home
is attached hereto as Exhibit B and incorporated into this Regulatory Agreement by this reference.
1.9 New Home Escrow The term "New Home Escrow" means and refer to the real
estate conveyance transaction or escrow by and between the Developer and the Qualified Homebuyer (or
later, by and between the.Qualified Homebuyer and the Successor -In- Interest). The transfer of the New
Home from the Developer to the Qualified Homebuyer (or later, by and between the Qualified.
Homebuyer and the Successor-In-Interest) shall be accomplished upon the close of the New Home
Escrow.
1.10 Notice of Agency Concurrence The term "Notice of Agency Concurrence"
means the acknowledgment in recordable firm in which the Agency confirms that the proposed
Successor -In- Interest of the Qualified Homebuyer satisfies all of the Adjusted Family Income and other
requirements of this Regulatory Agreement for occupancy of the New -Home by the Successor-In-
Interest at any time during the Qualified Residence Period.
1.11 Qualified Homebuyer The term "Qualified Homebuyee'. means the purchaser
of the New Home from the Developer (e.g.: all persons, identified as having a property ownership
interest vested in the New Home as of the close of the New Home Escrow). At the close of the New
Home Escrow, the ,Qualified Homebuyer shall: (i) have an annual Adjusted Family Income which does
not exceed the household income qualification limits of a Moderate- Income Household, and (ii) pay no
more than an Affordable Housing Cost for the New Home pursuant to the terms of the purchase
transaction for the New Home, including all sums payable by the Qualified Homebuyer for its purchase
money mortgage financing, insurance, escrow and other fees and costs.
1.12 Oualified Residence Period The term "Qualified Residence Period" means the
period of time beginning on the Delivery Date and ending on the date which is forty-five (45) years after
the Delivery Date.
1.13 Performance Deed of Trust The term "Performance Deed of Trust" shall mean
the Performance Deed of Trust attached to this Regulatory Agreement as Exhibit C securing the
Qualified Homebuyer's obligations under this Regulatory Agreement
RVPUH\RCV\675631.1
1.14 Regulatory Agreement - The .term,.,' 'Regulatory Agreement' shall mean this
Regulatory Agreement among the Agency, the and the Qualified Homebuyer.
1.15 Successor -In- Interest The term "Successor -In- Interest' means the person,
family or household which may acquire the New Home from the Qualified Homebuyer at any time
during the Qualified Residence Period by purchase, assignment, transfer or otherwise. The Successor -
In- Interest shall have an income level for the twelve (12) months prior to the date on which the
Successor -In- Interest acquires the New Home which does not exceed the maximum Adjusted Family
Income level for a Moderate - Income Household. Upon acquisition of the New Home the Successor -In-
Interest shall be bound by each of the covenants, conditions and restrictions of this Regulatory
Agreement.
Section 2. Acknowledgments and Representations of the Qualified Homebuver The Qualified
Homebuyer hereby acknowledges and represents that as of the Delivery Date:
2.1 The total household income for the Qualified Homebuyer does not exceed the
maximum amount permitted as Adjusted Family Income for a Moderate - Income Household, adjusted for
actual family size.
2.2 The Qualified Homebuyer shall promptly occupy the New Home after the
Delivery Date as the principal place of residence and the Qualified Homebuyer has not entered into any
arrangement and shall not sell, transfer or assign the New Home to any third party during the Qualified
Residence Period so as to frustrate the purpose of this Regulatory Agreement.
2:3 The Qualified Homebuyer has no present intention to lease or rent any room or
sublet or rent a portion of the New Home to any relative of the Qualified Homebuyer or to.any third
person at any time during the first five (5) years following the Delivery Date.
2.4 The aggregate sum payable each month by the Qualified Homebuyer following
the close of the New Home Escrow as principal and interest, property taxes and, property casualty
insurance for the acquisition of the New Home does not exceed the Affordable Housing Cost for the
household.
2.5 The Qualified Homebuyer agrees to provide the Agency with the following
items of information for inspection by the Agency promptly upon written request of the Agency:
2.5.1 State and federal income tax returns filed by all persons who reside in
the New Home for the three (3) most recent tax years preceding the close of the New Home Escrow for
inspection of such State and federal income tax returns; and
2.5.2 current wage, income and salary statements for all persons residing in
the New Home at the close of the New Home Escrow;
2.6 The Qualified Homebuyer has been informed by the Developer that this
Regulatory Agreement imposes certain restrictions on the use and occupancy of the New Home during
the term of this Regulatory Agreement and that this Regulatory Agreement imposes certain restrictions
RVPUB\KCV\675631.1
on the resale of the New Home during the Qualified Residence Period. The Qualified Homebuyer
acknowledges and understands that these restrictions shall be applicable to the New Home and to any
resale of the New Home from the Delivery Date to the end of the Qualified Residence Period which is
20
I Initials of
Qualified Homebuyer
Section 3. Covenant of the Qualified Homebuyer to Maintain Affordability of the New Home
3.1 The Qualified Homebuyer for itself, its heirs, successors and assigns, hereby
covenants and agrees that during the term of the Qualified Residence Period the New Home shall be
used and occupied by the Qualified Homebuyer as its principal residence, and that the New Home shall
be reserved for sale, use and occupancy by the Qualified Homebuyer and/or for another Moderate -
Income Household as a Successor -In- Interest at an Affordable Housing Cost. The Qualified
Homebuyer, for itself, its heirs, successors and assigns, further covenants and agrees that, during the
Qualified Residence Period, the Agency shall have the right and `duty as provided in this Section 3 to
verify that each proposed Successor -In- Interest of the Qualified Homebuyer in the New Home satisfies
the income requirements and Affordable Housing Cost limitations of a Moderate- Income Household
(based upon the Adjusted Family Income of each household).
32 The Qualified Homebuyer, for itself, its successors and assigns, hereby
covenants and agrees that during the term of the Qualified Residence Period the Qualified Homebuyer
shall not sell, transfer or otherwise dispose of the New Home (or any interest therein) to a Successor -In-
Interest without first giving written notice to the Agency and without first obtaining the written
concurrence of the Agency as provided herein. At least forty-five (45) calendar days prior to the date on
which the Qualified Homebuyer proposes to transfer title in the New Home to a Successor -In- Interest,
the Qualified Homebuyer shall send a written notice to the Agency as provided in Section 17 of the
intention of the Qualified Homebuyer to sell the New Home to a Successor -In- Interest which includes
the following true and correct information:
3.2.1 name of the proposed Successor -In- Interest (including the identity of all
persons in the household of the Successor -In- Interest, proposing to reside in the New Home);
3.2.2 copies of state and federal income tax returns for the Successor -In-
Interest for the calendar year preceding the year in which the notice of intention to sell the New Home is
given to the Agency;
3.2.3 resale price of the New Home payable by the Successor -In- Interest,
including the terms of all purchase money mortgage financing to be assumed, provided or obtained by
the Successor -In- Interest, escrow costs and charges, realtor broker fees and all other resale costs or
charges payable by either the Qualified Homebuyer or the Successor- In-Interest;
RVPUBUCCV1675631.1
3.2.4 name address, and telephone number of the escrow company which
shall coordinate the transfer of the New Home from the Qualified Homebuyer to the Successor -In-
Interest;
3.2.5 appropriate mortgage credit reference for the Successor -In- Interest with
a written authorization signed by the Successor -In- Interest authorizing the Agency to contact each such
reference; and
3.2.6 such other relevant information as the Agency may reasonably request.
3.3 Within twenty (20) days following receipt of the notice of intention described in
Section 3.2, the Agency shall provide the Qualified Homebuyer with either a preliminary confirmation
of approval or a preliminary rejection of approval in writing of the income and household occupancy
qualifications of the Successor -In- Interest. The Agency shall not unreasonably withhold approval of any
proposed sale of the New Home to a Successor -In- Interest who satisfies the Adjusted Family Income and
the Affordable Housing Cost requirements for occupancy of the New Home and for whom the other
information as described in Section 3.2 has been provided to the Agency. In the event that the Agency
may request additional information relating to the confirmation of the matters described in Section 3.2,
the Qualified Homebuyer shall provide such information to the Agency as promptly as feasible.
3.4 Upon its final confirmation of approval of the Adjusted Family Income and
Affordable Housing Cost eligibility of the Successor- In- hiterest to acquire the New Home, the Agency
shall deliver a written acknowledgment and approval of the resale of the New Home to the Successor -In-
Interest in recordable form to the escrow holder referenced in Section 3.2 above, and thereafter the
Successor -In- Interest may acquire the New Home subject to the satisfaction of the following conditions:
3.4.1 the recordation of the Notice of Agency Concurrence executed by the
a Successor -In- Interest and the Agency at the close of the resale escrow;
3.4.2 the escrow holder shall have provided the Agency with a copy of the
customary form of the final escrow closing statement of the Qualified Homebuyer and the final escrow
closing statement for the Successor -In- Interest; and
3.4.3 the other conditions of the resale escrow as established by the Qualified
Homebuyer and Successor -In- Interest shall have been satisfied.
3.5 The Qualified Homebuyer for itself, its successors and assigns hereby covenants
and agrees that until the forty -fifth (45th) anniversary of the Delivery Date, the New Home shall not be
leased, subleased, or rented to any third person, except for a temporary period (not to exceed twelve (12)
months) in the event of an emergency or other unforeseen circumstance as may be expressly approved in
writing by the Agency subject to compliance during the temporary rental period with the reasonable
temporary rental occupancy conditions required by the Agency. The Qualified Homebuyer shall submit
a written request to the Agency prior to the commencement of the temporary occupancy, as practicable,
but in anyevent within not more than (60) calendar days following the commencement of a temporary
rental occupancy of the New Home by a third party, which notice shall set forth the grounds on which
RVPUB\KCV%75631.1
the Qualified Homebuyer believes an emergency or other unforeseen circumstance has occurred and that
a temporary rental occupancy in necessary.
Section 4. Maintenance Condition of the New Home The Qualified Homebuyer, for itself, its
successors and assigns, hereby covenants and agrees that:
4.1 The exterior areas of the New Home which are subject to public view (e.g.: all
improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good repair
and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time
during the term of the Qualified Residence Period, there is an occurrence of an adverse condition on any
area of the New Home which is subject to public view in contravention of the general maintenance
standard described above, ("Maintenance Deficiency') then the Agency shall notify the Qualified
Homebuyer in writing of the Maintenance Deficiency and give the Qualified Homebuyer thirty (30)
calendar days from the date of such notice to cute the Maintenance Deficiency as identified in the notice.
The words 'Maintenance Deficiency" include without limitation the following inadequate or non-
confirming property maintenance conditions and/or breaches of single family dwelling residential
property use restrictions:
4.1.1 failure to properly maintain the windows, structural elements, and
painted exterior surface areas of the New Home in a clean and presentable manner;
4.1.2 failure to keep the front and side yard areas of the New Home free of
accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of
lumber, building materials or equipment not regularly in use on the Ndw Home;
4.1.3 failure to regularly mow lawn areas or permit grasses planted in lawn
areas to exceed nine inches (9') in height, or failure to otherwise maintain the landscaping in a
reasonable condition free of weeds and debris;
4.1.4 parking of any commercial motor vehicle in excess of seven thousand
(7,000) pounds gross weight anywhere on the New Home property, or the parking of motor vehicles,
boats, camper shells, trailers, recreational vehicles and the like in any side yard or on any other parts of
the New Home property which are not covered by a paved and impermeable surface;
4.1.5 the use of the garage area of -the dwelling New Home for purposes other
than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of
persons residing in the New Home.
4.2 In the event the Qualified Homebuyer fails to cure or, commence to cure the
Maintenance Deficiency within the time allowed, the Agency may thereafter conduct a public hearing
following transmittal of written notice thereof to the Qualified Homebuyer ten (10) calendar days prior
to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists
and whether the Qualified Homebuyer has failed to comply with the provision of this Section 4.2. If,
upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency
exists and that there appears to be non- compliance with the general maintenance standard, as described
above, thereafter the Agency shall have the right to enter the New Home (exterior areas only) and
RVPU13\RCV\675631.1
perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity
the Agency may then have to accomplish the abatement of the Maintenance Deficiency. Any sum
expended by the Agency for the abatement of a Maintenance Deficiency as authorized by Section 4 shall
become a lien on the New Home. If the amount of the lien is not paid within thirty (30) calendar days
after written demand for payment by the Agency to the Qualified Homebuyer, the Agency shall have the
right to enforce the lien in the manner as provided in Section 4.4.
4.3 Graffiti which is visible from any public right -of -way which is adjacent or
contiguous to the New Home shall be removed by the Qualified Homebuyer from any exterior surface of
a structure or improvement on the New Home by either painting over the evidence of such vandalism
with a paint which has been color- matched to the surface on which the paint is applied, or graffiti may be
removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the New
Home (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right -of-
way and thereafter such graffiti is not removed within seventy -two (72) hours following the time of its
application; then in such event and without notice to the Qualified Homebuyer, the Agency shall have
the right to enter the New Home and remove the graffiti. Any sum expended by the Agency for the
removal of graffiti from the New Home as authorized by this Section 4.3 shall become a lien on the New
Home. If the amount of the lien is not paid within thirty (30) calendar days after written demand for
payment by the Agency to the Qualified Homebuyer, the Agency shall have the right to enforce its lien
in the manner as provided in Section 4.4.
4.4 The parties hereto further mutually understand and agree that the rights
conferred upon the Agency under this Section 4 expressly include the power to establish and enforce a
lien or other enci tiftance against the New Home in the manner provided under Civil Code Sections
2924, 2924b and 2924c in the amount as reasonably necessary to restore the New Home to the
maintenance standard required under Section 4, including attorneys' fees and costs of the Agency
associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of
the costs of the Agency in connection with such action. In any legal proceeding for enforcing such a lien
against the New Home, the prevailing party shall be entitled to recover its attorneys' fees and costs of
suit. The provisions of this Section 4, shall be a covenant running with the land for the Qualified
Residence Period and shall be enforceable by the Agency in its discretion, cumulative with any other
rights or powers granted by the Agency under applicable law. Nothing in the foregoing provisions of
this Section 4 shall be deemed to preclude the Qualified Homebuyer from making any alterations,
additions, or other changes to any structure or improvement or landscaping on the New Home, provided
that such changes comply with the zoning and development regulations of the Agency and other
applicable law:
Section 5. Acknowledgment of Priority of the Provisions of Section 3 and Section 6.2 of this
Regulatory Agreement to the Mortgage Security Interest of the First Mortgage Lender
5.1 Concurrently upon the execution and recordation of this Regulatory Agreement
the Qualified Homebuyer shall obtain certain purchase money mortgage financing for the acquisition of
the New Home from ., ("First Mortgage Lender). As of the Delivery Date, the Qualified
Homebuyer has provided the Agency with a true and correct copy of the loan agreement by and between
the First Mortgage Lender and the Qualified Homebuyer. The provisions of Section 3 and Section 6.2 of
P,VPUB\KCV1675631.1
this Regulatory Agreement shall be prior and senior to the security interest of the First Mortgage Lender
in the New Home.,
5.2 No breach or default by the Qualified Homebuyer of any provision of Section 3
and/or Section 6.2 of this Regulatory Agreement, nor the exercise by the Agency of anyremedy it may
have against the Qualified Homebuyer in the event of such a breach or default shall affect or render
invalid the lien of the First Mortgage Lender in the New Home. In the event that the First Mortgage
Lender (or its assignee) may foreclose the lien of the First Mortgage Lender in the New Home through
trustee sale, judicial foreclosure or by acceptance of deed in lieu of foreclosure; the-First Mortgage
Lender, and its good faith purchasers for value, shall receive title in the New :Home - subject to the
provisions of Section 3 and Section 6.2 of this Regulatory Agreement.
Section 6. Foreclosure of Purchase Money Mortgage Loan and Agency Right of First Refusal
6.1 During the Qualified Residence Period the Agency shall have the right (but not
the obligation) to bid on the purchase of any mortgage loan lien secured by the New Home at the time of
any trustee foreclosure sale or any judicial foreclosure sale.
6.2 During the Qualified Residence Period the Agency shall have the right of first
refusal to purchase the New Home from the Qualified Homebuyer on the same terms which the
Qualified Homebuyer may propose to offer the New Home for resale to a Successor -In- Interest. The
Agency must exercise such a right of first refusal within thirty (30) calendar days following written
notificatiol�of the intention of the Qualified Homebuyer to resell the New Home, and if the Agency
accepts the offer in writing within such time period the Agency shall be bound to complete the purchase
of the New Home strictly in accordance with the offer. Thereafter the Agency shall pay the "resale
price" to the Qualified Homebuyer and close an escrow for the transfer of the New Home to the Agency
within sixty (60) calendar days following written notification of the intention of the Qualified
Homebuyer to resell the New House.
Section 7. Covenants to Run With the Land The Developer, the Agency and the Qualified
Homebuyer hereby declare their specific intent that the covenants, reservations and restrictions set forth
herein shall be deemed covenants running with the land and shall pass to and be binding upon the New
Home and each Successor -In- Interest of the Qualified Homebuyer in the. New Home for the term
provided in Section 9. The Qualified Homebuyer hereby expressly assumes the duty and obligation to
perform each of the covenants and to honor each of the reservations and restrictions set. forth in this
Regulatory Agreement. Each and every contract, deed or other instrument hereafter executed covering
or conveying the New Home or any interest therein shall conclusively be held to have been executed,
delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether
such covenants, reservations and restrictions are set forth in such contract, deed or other instrum
Section 8. Burden and Benefit The Agency, the Developer and the Qualified Homebuyer hereby
declare their understanding and intent that the burden of the covenants set forth herein touch and concern
the land in that the Qualified Homebuyer's legal interest in the New Home is affected by the affordable
single family dwelling use and occupancy covenants hereunder. The Agency and the Qualified
Homebuyer- hereby further declare their understanding and intent that the benefit of such covenants
RVPUBUCCV\675631.1
touch and concern the land by enhancing and increasing the enjoyment and use of the New Home by the
intended beneficiaries of such covenants, reservations and restrictions.
Section 9. Terns. This Regulatory Agreement shall apply` to the New Home and the Qualified
Homebuyer and to each Successor -In- Interest as of the Delivery Date for the Qualified Residence Period
-- e.g.: this Regulatory Agreement shall remain in full force and effect for forty five (45) years after the
Delivery Date. Any provision or section hereof, may be terminated after the Delivery Date upon
agreement by the Agency and the Qualified Homebuyer (or the Successor -In- Interest in the New Home),
if there shall have been provided to the Agency an opinion of special legal counsel that such a
termination under the terms and conditions approved by the Agency in its reasonable discretion will not
adversely affect the Agency.
Section 10. Breach and Default and Enforcement
10.1 Failure or delay by the Qualified Homebuyer to honor or perform any material
term or provision of this Regulatory Agreement shall constitute a breach under this Agreement; provided
however, that if the Qualified Homebuyer commences to cure, correct or remedy the alleged breach
within thirty (30) calendar days after the date of written notice specifying such breach and shall
diligently complete such cure, correction or remedy, the Qualified Homebuyer shall not be deemed to be
in default hereunder.
10.2 The Agency shall give the Qualified Homebuyer written notice of breach
specifying the alleged breach which if uncured by the Qualified Homebuyer within thirty (30) calendar
days, shall be deemed to be an')�vent of default. Delay in giving such notice shall not constitute a waiver
of any breach or event of default nor shall it change the time of breach or event of default; provided,
however, the Agency shall not exercise any remedy for an event of default hereunder without first
delivering the written notice of breach as specified in this Section 10.
10.3 Except with respect to rights and remedies expressly declared to be exclusive in
this Regulatory Agreement, the rights and remedies of the Agency are cumulative with any other right or
power of the Agency or the Agency or other applicable law, and the exercise of one or more of such
rights or remedies shall not preclude the exercise by the Agency at the same or different times, of any
other right or remedy for the same breach or event of default.
10.4 In the event that a breach of the Qualified Homebuyer may remain uncured for
more than thirty (30) calendar days following written notice, as provided above, an event of default shall
be deemed to have occurred. In addition to the remedial provisions of Section 4 as related to a
Maintenance Deficiency at the New Home, upon the occurrence of any event of default the Agency shall
be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows:
10.4.1 by mandamus or other suit, action or proceeding at law or in equity, to
require the Qualified Homebuyer to perform its obligations and covenants hereunder, or enjoin any acts
or things which may be unlawful or in violation of the rights of the Agency; or
10.4.2 by other action at law or in equity as necessary or convenient to enforce
the obligations, covenants and agreements of the Qualified Homebuyer to the Agency.
RVPUBVCCV\675631.1
10.4.3 No third party shall have any right or power to enforce any provision of
this Regulatory Agreement on behalf of the Agency or to compel the Agency to enforce any provision of
this Regulatory Agreement against the Qualified Homebuyer on the New Home.
Section 11. Governing Law This Regulatory Agreement shall be governed by the laws of the State of
California.
Section 12. Amendment This Regulatory Agreement may be amended after the Delivery Date only
by a 'Written instrument executed by the Qualified Homebuyer (or the Successor -In- Interest, as
applicable) and by the Agency. The Developer shall have not any right or power to approve any such
amendment to this Regulatory Agreement, and the execution by the Developer of any such amendment
after the Delivery Date shall not be required.
Section 13. Attorneys' Fees In the event that the Agency brings an action to enforce any condition or
covenant, representation or warranty in this Regulatory Agreement or otherwise arising out of this
Regulatory Agreement, the prevailing party in such action shall be entitled to recover from the other
party reasonable attorneys' fees to be fixed by the court in which a judgment is entered, as well as the
costs of such suit.
Section 14. Severabilitv If any provision of this Regulatory Agreement shall be declared invalid,
inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such
invalidity or unenforceability of such provision shall not affect the remaining parts of this Regulatory
Agreement which are hl reby declared by the parties to be severable from any other part which is fqund
by a court to be invalid or unenforceable.
Section 15. Time is of the Essence For each provision of this Regulatory Agreement which states a
specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed
to be of the essence.
Section 16. Titles and Headings The titles and headings of the sections of this Regulatory Agreement
have been inserted for convenience of reference only and are not to be considered a part hereof and shall
not in any way modify or restrict the meaning any of the terms or provisions hereof.
Section 17. Notice Any notice required to be given under this Regulatory Agreement shall be given
by the Agency or by the Qualified Homebuyer, as applicable, by personal delivery or by First Class
United States mail at the addresses specified below or at such other address as may be. specified in
writing by the parties heretm
If to the Agency: The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91066
Attention: Executive Director
RVPUB'KCV\675631.1
n;
If to the Developer: Trademark Development Company, LLC
Attention:
if to the Qualified Homebuyer:
Attention:
Notice shall be deemed given five (5) calendar days after the date of mailing to the party, or, if
personally delivered, when received by the Agency, Developer, or the Qualified Homebuyer, as
applicable.
Section 18. Obligations Secured By Performance Deed of Trust The prompt and complete
observance and performance of each and monetary and non - monetary condition, obligation,
covenant and agreement contained in this Regulatory Agreement shall be secured by the Deed of Trust
attached to this Regulatory Agreement as Exhibit C and incorporated into this Regulatory Agreement by
this reference.
IN WITNESS WHEREOF, the Agency, the Developer and the Qualified Homebuyer have
caused this Regulatory Agreement to be signed, acknowledged and attested on their behalf by duly
authorized representatives in counterpart original copies which shall upon execution by all of the parties
be deemed to be one original document.
[Signatures on Following Pages]
RVPUB%KCV\675631.1
SIGNATURE PAGE
TO
REGULATORY AGREEMENT
Date:
Date:
Date:
Date:
QUALIFIED HOMEBUYER:
By:
Its:
By:
Its:
DEVELOPER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a Califomia limited liability company
am
Its:
Its:
RVPUBVCCV\675631.1
SIGNATURE PAGE
TO
REGULATORY AGREEMENT
Date:
AGENCY:
THE REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA,
a public body, corporate and politic
By:
William R. Kelly
Executive Director
ATTEST:
By:
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
By:
Agency Counsel
RVPUB\KCV\675631.1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Redevelopment Agency of the City of Arcadia
Attention: Executive Director
204 West Huntington Drive
Arcadia, California 91006 -6021
(Space above for Recorder's use only)
PERFORMANCE DEED OF TRUST SECURITY AGREEMENT AND FIXTURE FILIN G
(WITH ASSIGNMENT OF RENTS)
THIS PERFORMANCE DEED OF TRUST, SECURITY AGREEMENT, AND FIXTURE
FILING (WITH ASSIGNMENT OF RENTS) ( "Deed of Trust") is made as of 2006, by
( "Trustor"); whose address is
California to ( "Trustee"), whose address is
, for the benefit of the REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA, a public body corporate and politic, its successors and assigns ( "Beneficiary"),
whose address, is 204 West Huntington Drive, Arcadia, California 91006 -6021, and is executed to secure
that certain Regulatory Agreement of even date herewith between Trustor Beneficiary. The provisions of
the Regulatory Agreement are incorporated in the Trust Deed by this reference.
Trustor hereby IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its
successors and assigns; in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND
POSSESSION, the following property ( "Trust Estate "):
A. All of that certain real property in the City of Arcadia, Los Angeles County;
California, more particularly described in Exhibit "A" attached hereto and by this reference made a part
hereof ( "Subject Property");
B. All buildings, structures and other improvements now or in the future located or
to be constructed on the Subject Property ("Improvements");
C. All tenements, hereditament, appurtenances, 1 privileges franchises and other
rights and interests now or in the future benefitting or otherwise relating to the Subject Property or the
Improvements, including easements, rights -of -way and development rights ( "Appurtenances ").
(Appurtenances, together with the Subject Property and the Improvements, are hereafter collectively
referred to as the "Real Property";
D. Subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents,
issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise
derived from the Trust Estate or the ownership, use, management operation, leasing or occupancy of the
Trust Estate', including those past due and unpaid ( "Rents ");
E. All present and future right, title and interest of Trustor in and to all inventory,
equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform
Commercial Code ( "UCC ")), whether existing now or in the future) located at upon or about, or affixed
or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise
relating to the Real Property or the ownership, use, development, construction, maintenance,
EXHMrr G
RVPUBTVARNERI7 t 0715.1
management, operation, marketing, leasing or occupancy of the Real Property, including furniture,
furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water
tanks, heating, ventilating and air conditioning equipment and all other types of tangible personal property
of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs,
replacements and substitutions of or to any of such property ( "Goods," and together with the Real
Property, collectively the "Property D; and
F. All present and future right, title and interest of Trustor in and to all accounts,
general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms
are defined in the UCC) and all other agreements, obligations, rights and written material (in each case
whether existing now or in the future) now or in the future relating to or otherwise arising in connection
with or derived from the Property or any other part of the Trust Estate or the ownership; use,
development, construction, maintenance, management operation, marketing, leasing, occupancy, sale or
financing of the property or any other part of the Trust Estate, including (to the extent applicable to the
Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental
authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with
contractors, subcontractors,_ suppliers, project managers, supervisors, designers, architects, engineers,
sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent
loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance
payments and unearned insurance premiums, (vi) claims, demands, awards, settlements,. and other
payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of
injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or
public use of any of the Property, (vii) license agreements, service. and maintenance agreements, purchase
and sale agreements and purchase options, together with advauoe payments, security deposits and other
amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits bonds,
deferred payments, refunds rebates, discounts, cost savings, escrow proceeds, sale proceeds and other,
rights to the payment of money, trade names, trademarks, goodwill and all other types on intangible
personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals,
extensions, proceeds, replacements and substitutions of or to, any of such property (collectively,
"Intangibles'n.
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all
present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the
Trust Estates described above in which a security interest may be created under the UCC (collectively, the
"Personal Property"). This Deed of Trust constitutes a security agreement under the UCC, conveying a
security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall have,
in addition to all rights and remedies provided herein, all the rights and remedies of a "secured party"
under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust
constitutes a fixture filing under Sections 9313 and 94020 of the UCC.
FOR THE PURPOSE OF SECURING, due, prompt and complete observance, performance
and discharge of each and evey monetary and non - monetary condition, obligation, covenant and
agreement contained herein or contained in the Regulatory Agreement ( "Secured Obligations').
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor shall perform the obligations of the Qualified Homebuyer as set forth in the
Secured Obligations at the time and in the manner respectively provided therein;
EXHIBIT G
RV PU9\K V ARNER \710715.1
2. That Trustor shall not permit or suffer the use of any of the property for any purpose
other than the use for which the same was intended at the time this Deed of Trust was executed;
3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust.
Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable
cure period, the Beneficiary, at its option may declare the whole of the indebtedness secured hereby to be
due and payable. This Deed of Trust shall cover, and the property subject hereto shall include, all property
now or hereafter affixed or , attached to or incorporated upon the Subject Property in, to or under which
Trustor now has' or hereafter acquires any right, title or interest, which, to the fullest extent permitted by
law, shall be deemed fixtures and a part of the Subject Property. To the extent any of the property subject
to this Deed of Trust consists of rights in action or personal property covered by the Uniform Commercial
Code, this Deed of Trust shall also constitute a security agreement, and Trustor hereby grants to
Beneficiary, as secured party, a security interest in such property, including all proceeds thereof, for the
purpose of securing the Secured Obligations: In addition, for the purpose of securing the Secured
Obligations, Trustor hereby grants to Beneficiary, as secured party, a security interest in all of the
property described herein in, to, or under which Trustor now has or hereafter acquires any right, title or
interest, whether present future or contingent, including, but not limited to; all equipment, inventory,
accounts, general intangibles, instruments, documents and chattel paper, as those terms are defined in the
Uniform Commercial Code, and all other personal property of any Idnd (including, without limitation,
money and rights to the payment of money), whether now existing or hereafter created, that are now or at
any time hereafter (i) in the possession or control of Beneficiary in any capacity; (ii) erected upon,
attached to or appurtenant to the Subject Property; (iii) located or used on the Subject Property or
-. identified for use on the Subject Property (whether stored on the Subject Property or elsewhere); or (iv)
s used in connection with, arising from, related to, or associated with the Subject Property or any of the
a personal property described herein, the coalruction of any improvements on the Subject Property, the
ownership, development,' maintenance, management or operation of the Subject Property, the use or
IL enjoyment of the Subject Property or the operation of any business conducted thereon, including, without
limitation, all such property described as the Trust Estate hereinabove. The security interests granted in
2 this paragraph are hereinafter severally and collectively called the "Security Interest'. The Security
Interest shall be self- operative with respect to the real property described herein but Trustor shall execute
and deliver on demand such additional security agreements, financing statements and other instruments as
may be requested in order to impose the Security Interest more specifically upon the real and personal
property encumbered hereby. The Security Interest, at all times, shall be prior to any other interest in the
personal property encumbered hereby. Trustor shall act and perform as necessary and shall execute and
file all security agreements, financing statements, continuation statements and other documents requested
by Beneficiary to establish, maintain and continue the perfected Security Interest. Trustor, on demand,
shall promptly pay all costs and expenses of filing and recordation, to ensure the continued priority of the
Security Interest. Thistor shall not sell, transfer, assign or otherwise dispose of any personal property
encumbered hereby without obtaining the prior written consent of Beneficiary, except that the Trustor
may, in the ordinary course of business, replace personal property or dispose of personal property that
will not be replaced because of,its obsolescence. Unless Beneficiary then agrees otherwise in writing, all
proceeds from any permitted sale or disposition in excess of that required for full replacement shall be
paid to Beneficiary to be applied on the Note. Although proceeds of personal property are covered
hereby, this shall not be construed to mean that Beneficiary consents to any sale of such personal
property. Upon its recordation in the real property records of Riverside County, this Deed of Trust shall
be effective as a financing statement filed as a fixture filing. In that regard, the following information is
provided:
Name of Debtor:
Address of Debtor: See the initial paragraph of this Deed of Trust
Name of Secured Party: The Redevelopment Agency of the City of Arcadia
EXHIBIT 0
RV PUB\KV ARNER \710715.1
Address of Secured Party: See the initial paragraph of this Deed of Trust
In addition, a carbon, photostatic or other reproduced copy of this Deed of Trust and/or any financing
statement relating hereto shall be sufficient for filing and/or recording as a financing statement;
4. That all rents, profits and income from the property covered by this Deed of Trust are
hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is .
hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration
of any applicable cure period, to collect such rents; profits and income for use in accordance with the
provisions of the Secured Obligations;
5': That upon default hereunder or under the aforementioned agreements, and after the
giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the
appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect
the property described herein and operate same. and collect the rents, profits and income therefrom;
6. That Trustor will keep the improvements now existing or hereafter erected on the
property insured against loss by fire and such other hazards, casualties, and contingencies as may be
required by applicable provisions of the Secured Obligations; and all such insurance shall be evidenced by
standard fire and extended coverage insurance policy or policies. Such policies shall be endorsed with
standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies
of original policies, if requested, shall be deposited with the Beneficiary;
7. To pay before- delinquency any taxes and assessments affdating said Property; to pay,
when due, all encumbrances, chargr!s and liens, with interest, on. said Property or any, part thereof which
appear- to be prior or superior hereto; and to pay all costs, fees, and, expenses of this Trust.
Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be required to
pay and discharge any such.tax, assessment charge or levy so long as Trustor is contesting the legality
thereof in good faith and by appropriate proceedings, and Trustor has adequate ftmds to pay any liabilities
contested pursuant to this Section;
8. As it is provided more specifically in the Secured Obligations, to keep said property in
good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or
demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner
any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims
for labor performed and materials furnished therefor; to comply with all laws affecting said property or
requiring any alterations or improvements to be made thereon, (subject to Trustor's right to contest the
validity or applicability of laws or regulations); not to commit or permit waste thereof-, 'not to commit,
suffer or permit any act upon said. property in violation of law and/or covenants, conditions and/or
restrictions affecting said property; not to permit or suffer any material alteration of or addition to the
buildings or improvements hereafter constructed in or upon said property without the consent of the
Beneficiary;
9. To appear in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee, and to pay all costs and : expenses, including cost of
evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or proceeding in
which Beneficiary or Trustee may appear;
10. Should Trustor fail, after the giving of notice and the expiration of any applicable cure
period, to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without
obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any
EXH Brr G
RV PUB\KV ARNER \710715.1
obligation hereof, may make or do the same in such manner and to such extent as either may deem
necessary to protect the security hereof. Following default, after the giving of notice and the expiration of
any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such
purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or
compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or
superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and
pay his reasonable fees;
11. Beneficiary shall have the right to pay fire and other property insurance premiums when
due should Trustor fail to make any required premium payments. All such payments made by the
Beneficiary shall be added to the sums securedhereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee,
under permission given under this Deed of Trust, with interest from date of expenditure, at the highest
rate of interest permitted by law;
13. That the funds to be advanced hereunder are to be used in accordance with applicable
provisions of the Affordable Housing Agreement and the Secured Obligations; upon the failure of Trustor
to do so, after the giving of notice and the expiration of any applicable cure period, Trustor shall be in
default hereunder.
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created.,
against the. property subject to this Deed of Trust any lien or liens except as authorized by Beneficiary
and/or as provided in the Secured Obligations ind further that it will keep and maintain the property free
-. from the claims, of all persons supplying labor or materials which will enter into .the construction of any
and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the
s contrary contained in this Deed of Trust Trustor shall not be obligated to pay any claims for labor,
a materials or services which Trustor in good faith disputes and is diligently contesting, provided that
Trustor shall, at Beneficiary's written request, within thirty (30) days after the filing of any claim or lien
(but in any event, and without any requirement that Beneficiary must fast provide a written request prior
to foreclosure) record in the Office of the Recorder of Riverside County, a surety bond in the amount
required by law to protect against a claim of lien, or provide such other security reasonably: satisfactory
to Beneficiary;
15. That any and all improvements made or about to be made upon the premises covered by
this Deed of Trust and all plans and specifications, comply with all applicable municipal. ordinances and
regulations and all other applicable regulations made or promulgated, now or hereafter,, by lawful.
authority, and that the same will upon completion comply with all such municipal ordinances and
regulations and with the rules of the applicable fire rating or inspection organization, bureau, association
or office.
IT IS MUTUALLY AGREED THAT:
16. Should. the Property or any part thereof be taken or damaged by reason of any public
improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any,other manner,
Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are
not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or
damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any
action or proceedings, or to make any compromise or settlement, in connection with such taking or
damage. All such compensation, awards, damages, rights of action and proceeds which are not used to
EXHIBIT G
RV PUB\KV ARNER \710715.1
reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged,
including the proceeds of any policies of fire and other insurance affecting said property, are ,hereby
assigned to Beneficiary;
17. Upon default by Trustor in taking any action or in making any payments provided for
herein, or in the Secured Obligations; if Truster shall fail to perform any covenantor agreement in this
Deed of Trust within 30 days after written demand therefor by Beneficiary (or, in the event that more than.,
30 days is reasonably required to cure such default, should Trustor fail to promptly commence such cure,
and diligently prosecute same to completion), after the giving of notice and the expiration of any
applicable cure period; Beneficiary may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration -of 'default and demand for sale, and of written notice of default
and of election to cause the property to be sold, which notice Trustee shall cause 'to be duly filed for
record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this
Deed of Trust and all documents evidencing expenditures secured hereby;
28. After the lapse of such time as may then be required by law following the recordation of
said notice of default, and notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as
a whole or in separate parcels, and in such order as it may determine at public auction to the highest
bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale
of all or any portion of said property by public announcement at the time and place of sale, and from time
to time thereafter may postpone the sale by public announcement at the time and place of sale, and from
time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding
postponement. 'Trustee shall deliver to the purchaser its Deed conveying the property sAbld; but without
any covenant or warranty,' express or implied: lie recitals in the Deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Trustor; Trustee or Beneficiary, may
purchase at the sale. The Trustee shall apply the proceeds of sale to payment of (1) the expenses of such .
sale, togetlier "with the reasonable expenses of this trust including therein reasonable Trustee's fees or
attorney "s fads l'or' conducting the gale, and the actual cost of publishing, recording;` mailing and posting
notice of the sale; (2) the 'Cost 'of any search and/or other evidence 'of title procured in connection with
such sale and revenue stamps on Trustee's Deed; (3) all sums expended under the terms hereof, not then
repaid, with accrued interest at the maximum rate allowed bylaw; (4) all other sums then secured hereby;
and (5) the remainder, if any, to the person or persons legally entitled thereto;
19. Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein "or acting hereunder to execute this Trust. Upon such appointment;' and without conveyance
to the successor trustee, the latter shall be vested with all title, powers; and duties conferred upon any
Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by
written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of
record, which, when duly recorded in the proper office of the county or counties in which the property is
situated, shall be conclusive proof of proper appointment of the successor trustee;
20. The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law;
21. Upon written request of Beneficiary stating that all sums secured hereby have been paid
and all obligations secured hereby have been, satisfied, and upon surrender of this Deed of Trust to
Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without
warranty, the property then held hereunder-; The recitals in such reconveyance of any matters of fact shall
be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as
"the person or persons legally entitled thereto";
EXHIBIT G
RV PUB\KVARNER \710715.1
22. The trust created hereby is irrevocable by Trustor;.
23. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their
heirs, legatees, devisees, administrators, executors, successors, and assigns. The term `Beneficiary" shall
include not only the original Beneficiary hereunder but also any future successor in interest to
Beneficiary. In this Deed of Trust, whenever the context so requires, the masculine gender includes the
feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder
are joint and several;
24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law, the Trustee is not obligated
to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in
which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee;
25. The undersigned Trustor requests that a copy of any notice of default and of any notice of
sale hereunder be mailed to it at the address set forth in the Deed of Trust.
26. Trustor agrees at any time and from time to time, upon receipt of a written request from
Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits, and
operating expenses of the premises, and the names of the occupants and tenants in possession, together
with the expiration dates of their leases and full information regarding all rental and occupancy
agreements, and the rents provided for by such leases and rental and occupancy agreements, and such
other information regarding the premises and their use as may be requested by Beneficiary.
27. - Trustor agrees that the obligations secured by this Deed of Trust are made expressly for
e the purpose of financing the acquisition of the Property, and the rehabilitation and operation of the
improvements on the Property, which will be maintained as affordable housing for persons and families
of very low income and low income, as is more specifically provided in the Secured Obligations.
38. As is provided more specifically in the Secured Obligations, the obligations of Trustor
thereunder are nonrecourse obligations of the Trustor. Neither Trustor nor any of its principals, nor any
other -party, shall have any personal liability for payment of obligations arising from the Secured.
Obligations, except as specifically provided therein. The sole recourse of Beneficiary shall be the
exercise of its rights against the Property except as otherwise provided in the Secured Obligations and any
related security.
29. Notwithstanding specific provisions of this Deed of Trust, non - monetary performance
hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection;
strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or
priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays
of any contractor or supplier, acts of the other party; acts or failure to act of the City, the Agency, or any
other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not
excuse performance by Beneficiary unless such act or failure to act is allowed or required by law); or any
other causes beyond the reasonable control or without the fault of the party claiming an extension of time
to perform. An extension of time for any such cause (a "Force Majeure Delay ") shall be for the period of
the enforced delay and shall commence to run from the time of the commencement of the cause. If,
however, notice by the party claiming such extension is sent to the other party more than thirty (30) days
after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the
giving of such notice. Times of performance under this Deed of Trust may also be extended in writing by
the Beneficiary and Trustor.
EXHIBIT G
RV PUB XV ARNER \710715.1
30. If the rights and liens created by this Deed of Trust shall be held by. a court of competent
jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the unsecured
portion of such obligations shall be completely performed and paid prior to the performance and payment
of the remaining and secured portion of the obligations, and all performance and payments made by
Trustor shall be considered to have been performed and paid on and applied first to the complete payment
of the unsecured portion of the obligations.
31. Subject to the extensions of time set forth in Section 29, and subject to the further
provisions of this Section 31, failure or delay by Trustor to perform any term or provision respectively
required to be performed under the Secured Obligations or this Deed of Trust constitutes a default under
this Deed of Trust.
B. Beneficiary shall give written notice of default to Trustor, specifying the default
complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default
nor shall it change the time of default.
C. Any failures or delays by Beneficiary in asserting any of its rights and remedies
as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by
Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary of its right to institute
and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any
such rights "or remedies.
D. If an event of default occurs under the terms of this Deed of Trust, 'prior to
exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor written notice of slhch
default: Trustor shall have reasonable period of time after such notice is given within which to cure the
default prior to exercise of remedies by Beneficiary under this Deed of Trust. In no event shall
Beneficiary be precluded from exercising 'remedies if its security becomes or is about to become
materially jeopardized by any failure to cure a default or the default is not cured within thirty (30) days
after the notice of default is fast given.
E. If an event of default occurs under the terms of the Secured Obligations, prior to
exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of such default.
As is provided more specifically in the Secured Obligations, if the default is reasonably capable of being
cured within thirty (3 0) days, Trustor shall have such period to effect a cure prior to exercise of remedies
by the Beneficiary under the Secured Obligations, or this Deed of Trust. If the default is such that it is not
reasonably capable of being cured within thirty (30) days, and Trustor (i) initiates corrective action within
said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Trustor
shall have such additional time as is' reasonably - necessary to cure the default prior to exercise of any
remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its
security becomes or is about to become' materially jeopardized by any failure to cure a default.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year set
forth above.
TRUSTOR
By:
By:
EXHIBIT Q
RVPU13\KVARNER \710715.1
STATE OF CALIFORNIA )
ss.
COUNTY OF RIVERSIDE )
O , 200_ before me, , Notary Public, 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 of Notary
[SEAL]
EXHIBIT G
R V PUBUNARNBR \710715.1
AGENCY DEVELOPMENT PROMISSORY NOTE
Fair Market Value of the Property + $760,000 2006
This Agency Development Promissory Note Secured by a Deed of Trust ( "Agency Development
Promissory Note') is entered into between the Arcadia Redevelopment the Agency, a California public
body, corporate and politic. ("Holder") and Trademark Development.Company, LLC, a California limited
liability company ("Maker'D. This Agency Development Promissory Note is made and given pursuant to
that certain Affordable Housing Agreement dated June 6, 2006 ("Agreement") by and between the Maker
(as the Agency therein) and Holder (as the Developer therein). The Agreement is incorporated herein by
reference. All initially capitalized terms used but not defined herein shall have the meanings given to
them in the Agreement.
1. Principal.
FOR VALUE RECEIVED, Maker promises to pay to the Holder at such place as the Holder may,
from time to time, designate by written notice to the Maker, the principal sum of the Fair Market Value of
the Property plus Seven Hundred Sixty Thousand Dollars ($760,000) (`Principal Sum "). The Principal
Sum represents the Fair Market Value of the Property as described in Section 2.5 of the Agreement and
Agency Development Loan advanced to or on behalf of Maker pursuant to Section 3.4.1 of the
Agreement
2. No Interest Accruals
The Agency Development Loan shall not accrue interest.
3. R_pe avment Reduction of Principal: Release and Reconvevance
a. Revavment of the Aeencv Development Loan Concurrent with the close of
escrow for the sale of each New Home to a Qualified Household, an amount equal to one -sixth (116) of
the total of the Fair Market Value of the Property and the Agency Development Loan shall be credited to
the principal balance of this Agency Development Promissory Note and the principal balance of this
Agency Development Promissory Note shall thereafter be reduced by the aforementioned credited
amount.
b. Release and Reconvevance Upon (i) . the recordation of each Regulatory
Agreement executed by a Qualified Household against the New Home which is the subject of a sale
between the Maker and such Qualified Household; and (ii) credit of the amounts due and payable
pursuant to Section 3(a) hereof, Holder shall release and reconvey that New Home from the Development
Deed of Trust.
4. Maturity Date
The Maturity Date of this Agency Development Promissory Note shall be the fifth ( 511 )
anniversary of the date of execution of this Agency Development Promissory Note by Maker.
R V PUBVNARNER \710715.1
5. Prepavment
This Agency Development Promissory Note may be prepaid in whole or part at any time and
from time to time without penalty or premium. Principal and interest shall be payable in lawful money of
the United States of America. Interest shall be computed based on an actual day year and the actual
number of days elapsed.
6 Security for Note
This Agency Development Promissory Note is secured by that certain Agency Development
Deed of Trust executed and dated herewith by Maker.
7: Acceleration Uroon Certain Events or Upon Event of Default
7.1 Anything to the contrary in this Agency Development Promissory Note
notwithstanding, the entire unpaid principal balance and accrued interest of this Agency Development
Promissory Note shall be due and payable prior to the Maturity Date upon the occurrence of any of the
following events ( "Events of Default "):
7.1.1 Maker materially breaches any of the obligations of this Agency
Development Promissory Note or the Agreement; or
7.1.2 Maker (i) becomes insolvent or unable to pay Maker's debts generally as
they mature, (ii) makes a general asdignment for the benefit of creditors, (iii) admits im'writing Maker's
inability to pay Maker's debts generally as they mature, (iv) files or has filed against it a petition in
bankruptcy or a petition or answer seeking a reorganization, arrangement with creditors or other similar
relief under the federal bankruptcy laws or under any other applicable law of the United States of
America or any state thereof, or (v) consents to the appointment of a trustee or receiver for it or for a
substantial part of Maker's property; or
7.1.3 Any order, judgment or decree is entered appointing, without Maker's
consent, a trustee or receiver for it or for a substantial part of Makers property that is not removed within
sixty (66) days from such entry; or
7.1.4 Maker voluntarily or involuntarily transfers, in any way, the Property or
any potion thereof without the Holders prior written consent, except as permitted in the Agreement; or
7.1.5 Termination of the Agreement and the Escrow due to Maker's uncured
material default.
7.2 Upon the occurrence of one or more of the aforementioned Events of Default, the
Holder may, at Holder's option, without prior notice (unless prior notice is required by California law),
declare the unpaid balance of this Agency Development Promissory Note, including interest thereon, to
be immediately due and payable, and the same shall immediately become due and payable.
Notwithstanding the above, in the event of an actual or deemed entry of an order for relief with respect to
Maker under the Federal Bankruptcy Code, this Agency Development Promissory Note and all interest
and other amounts due hereon shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly waived by Maker. The
Holder may exercise Holder's option to accelerate after any Event of Default, regardless of any prior
forbearance. Any amounts which become due to, the Agency pursuant to this Section 7.2 shall be payable
from all of Maker's legally available funds and assets.
R V PUB\KV ARNER \710715. I
8. Costs and Attorneys' Fees Paid by Maker
Maker agrees to pay the following costs, expenses and attorneys fees paid or incurred by the
Holder, or as adjudged by a court of competent jurisdiction: (a) reasonable costs of collection, costs and
expenses, fees of experts, and attorneys fees paid or incurred in connection with the collection or
enforcement of this Agency Development Promissory Note, whether or not suit is filed; and (b) costs of
suit in such sum as the court may adjudge reasonable as attorneys fees in any action to enforce payment
of this instrument.
9. Waiver
Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and
nonpayment of this instrument, and expressly agrees that, without in any way affecting the liability of
Maker hereunder, the Holder may extend any maturity date or the time for payment of any installment
due hereunder, accept additional security, release any party liable hereunder or release any security now
or hereafter securing this Agency Development Promissory Note. Maker hereby waives, to the fullest
extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand
on this instrument or any deed of trust, security agreement, guarantee or other agreement now or hereafter
securing this Agency Development Promissory Note.
10. Severabilitv
If any provision of this Agency Development Promissory Note is determined by a court of
competent jurisdiction to be void or unenforceable, such determination shall not affect any - other
provision of this instrument, and all other provisions hereof shall remain valid and in full force and effect.
11. Non Waiver
No delay in demanding or failure to demand performance hereunder shall constitute a waiver by
the Agency of its right to subsequently demand such performance or to exercise any remedies for any
default hereunder. Further, in order to be effective, any waiver of any of the Agency's rights and
remedies hereunder shall be expressed in a writing signed by a duly appointed representative of the
Holder. Further, waiver by the Holder of any right hereunder shall not constitute a waiver of any other
right, including, but not limited to, the right to exercise any and all remedies for a different or subsequent
event of default hereunder.
MAKER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
Date: By:
Its:
Date: By:
Its:
RVPUBIKVARNERV 10715.1
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91066
Attention: Executive Director
AGENCY DEVELOPMENT DEED OF TRUST
(Space above for Recorder's Use)
THIS AGENCY DEVELOPMENT DEED OF TRUST ( "Agency Development Deed of
Trust') is made this _ day of , 2006, between Trademark Development Company, LLC a
California limited liability company ( "Trustor'); in favor of ("Trustee'), and
the Redevelopment Agency of the City of Arcadia, a public body, corporate and politic, whose address is
240 West Huntington Drive, Arcadia, California 91066 ('Beneficiary"), and is executed to secure that
certain Agency Development Promissory Note ( "Agency Development Promissory Note') of even date
herewith in the principal amount plus interest thereon as provided by the Agency Development
Promissory Note.
Section 1. Agreement: Definitions This Agency Development Deed of Trust is made with respect
to that certain Affordable Housing Agreement ( "Agreement ") dated as of June 6; 2006 between Trustor as
"Developer" and Beneficiary as "Agency." All initially capitalized terms used but not defined herein
shall have the meanings given to them in the Agreement
Section 2. Grant in Trust and Security Agreement Trustor irrevocably grants, transfers and assigns
to Trustee, in trust, with power of sale, for the benefit of Beneficiary, the following property ( "Trust
Estate'):
2.1 that certain real property located at 119 and 121 Alta Street in the City of Arcadia
( "City's and identified as Assessor's' Parcel Numbers 5773 =014 -912 and 5773 -014 -913 more particularly
described in Exhibit A" attached hereto and incorporated herein by reference ( "Land "); and
2.2 all buildings, structures and other improvements now or in the future located or
to be constructed on the Land ( "Improvements'j; and
2.3 all other rights and interests now or in the future benefiting or otherwise relating
to the Land or the Improvements, including easements, rights -of -way, water rights and water stock (the
"Appurtenances," and together with the Land and the Improvements, the "Property').
Section 3. Obligations Secured This Agency Development Deed of Trust is given for the purpose
of securing payment and performance of the following ( "Secured Obligations'): (a) all present and future
indebtedness evidenced by the Promissory Note, (b) all present and future obligations of Trustor to
Beneficiary under this Agency Development Deed of Trust and the Agreement; and (c) all additional
R V PWKVARNER \710715.1
, ,
present and future obligations of Trustor to Beneficiary under any other agreement which is secured by
this Agency Development Deed of Trust.
Section 4. Trustor's Covenants To protect the security of this Agency Development Deed of Trust,
Trustor agrees as follows:
4.1 Payment and Performance of Secured Obligations Trustor shall pay and perform
all Secured Obligations in accordance with their respective terms.
4.2. Liens and Taxes Trustor, shall pay, prior to delinquency, all taxes and perform
all other obligations which are or may become a lien affecting any part of the Trust Estate.
Section 5. Obligations With Respect to Trust Estate Neither Beneficiary nor Trustee shall be under
any obligation to preserve, maintain or protect the Trust Estate or any of Trustor s rights or interests in the
Trust Estate, or take any action with respect to any other matters relating to the Trust Estate. Beneficiary
and Trustee do not assume and shall have no liability for any of Trustor's obligations with respect to any
rights or any other matters relating to the Trust Estate.
Section 6. Remedies Upon Event of Default Upon the occurrence of any Event of Default (defined
in Section 7 hereof): (i) all Secured Obligations shall immediately become due and payable without
further notice to Trustor, (ii) upon demand by Beneficiary, Trustor shall pay to Beneficiary sums which
will be sufficient to pay all taxes which are or may become a lien affecting the Trust Estate and the
premiums for any policies of insurance to be maintained hereunder. In addition, Beneficiary may,
without notice to or demand upon Trustor, exercise any o>ye or more. of. the following remedies, either.
directly or through Trustee, an agent or court- appointed receiver:
(a) enter, take possession of, manage, and exercise any other rights of an owner of
the Trust Estate, and use any other properties of Trustor relating to the Trust Estate, all without payment
of rent or other compensation to Trustor,
(b) conduct any business of Trustor in relation to the Trust Estate and deal with
Trustors creditors, debtors, tenants, agents and employees and any other persons having any relationship
with Trustor in relation to the Trust Estate;
(c) take such other action as Beneficiary deems appropriate to protect the security of
this Agency Development Deed of Trust.
6:1 Beneficiary may execute and deliver to Trustee written notice of default and of
its election to cause all or any part of the Trust Estate to be sold, which notice Trustee shall cause to be
filed for record; and after the lapse of such time as may then be required by law following the recordation
of such notice of default; and notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell such Property at the time and place fixed by it in such notice of sale, either
as a whole or in separate parcels and in such order as Beneficiary may direct ( Trustor waiving any right to
direct the order of sale), at public auction to the highest bidder for cash in lawful money of the United
States (or cash equivalents acceptable to Trustee to the extent permitted by applicable law), payable at the
time of sale. Any person, including Trustee or Beneficiary, may purchase at such sale, and any bid by
Beneficiary may be, in whole or in part, in the form of cancellation of all or any part of the Secured
Obligations: Any such sale shall be free and clear of any interest of Tnlstor and any lease, encumbrance
or other matter affecting the property so sold which is subject or subordinate to this Agency Development
Deed of Trust.
RV PUB\KV ARNM \710715.1
n41 -x
6.2 All proceeds of collection, sale or other liquidation of the Trust Estate shall be
applied first to all costs, fees, expenses and other amounts (including interest) payable by Trustor under
this Agency Development Deed of Trust and to all other Secured Obligations not otherwise repaid in such
order and manner as Beneficiary may determine, and the remainder, if any, to the person or persons
legally entitled thereto.
6.3 Each of the remedies provided in this Agency Development Deed of Trust is
cumulative and not exclusive of, and shall not prejudice, any other remedy provided in this Agency
Development Deed of Trust or by applicable laws and shall be subject and subordinate to the remedies of
any holder of a senior lien permitted hereunder. Trustor, for itself and for any other person claiming by or
through Trustor, waives, to the fullest extent permitted by applicable laws, all rights to require, a
marshaling of assets by Trustee or Beneficiary or to require Trustee or Beneficiary to first resort to any
particular portion of the Trust Estate or any other security (whether such portion shall, have been retained
or conveyed by Trustor) before resorting to any other portion, and all rights of redemption, stay and
appraisal.
Section 7. Event of Default An "Event of Default" shall be deemed to occur if Trustor is in
material breach of any of its obligations under any of the following: (i) the Promissory Note; (ii) this
Agency Development Deed of Trust; or (iii) the Agreement and such breach is not cured within ten (10)
days after Trustor receives written notice of such breach.
Section 8. Costs. Fees and Expenses Trustor shall pay, on demand, all costs, fees, expenses,
advances, charges, losses and liabilities of Trustee and Beneficiary under or in connection with this
Agency Development Deed of Trust or the enforcement of, or the exercise of any remedy or any other
action taken by Trustee or Beneficiary under, this Agency Development Deed of Trust or the collection of
the Secured Obligations, in each case including (i) reconveyance and foreclosure fees of Trustee, (ii) costs
and expenses in connection with the operation, maintenance, preservation, or sale of the Trust Estate or
k. foreclosure of this Agency Development Deed of Trust, (iii) advances made by Beneficiary to complete
or partially construct all or any part of any Construction on the Land, (iv) cost of evidence of title, and (v)
the reasonable fees and disbursements of Trustee's and Beneficiary's legal counsel.
Section 9. Late Payments By accepting payment of any part of the Secured Obligations after its
due date, Beneficiary does not waive its right either to require prompt payment when due of all other
Secured Obligations or to declare a default for failure to so pay.
Section 10. Reconvevance Upon written request of Beneficiary and surrender of this Agency
Development Deed of Trust and the Promissory Note to Trustee for cancellation or endorsement, and
upon payment of its fees and charges and compliance with all other requirements for reconveyance as
specified in the Promissory Note and Agreement, Trustee shall reconvey, without warranty, all or any part
of the Property then subject to this Agency Development Deed of Trust. Any reconveyance, whether full
or partial, may be made in terms to "the person or persons legally entitled thereto," and the recitals in such
reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. Beneficiary
shall not be required to cause any Property to be released from this Agency Development Deed of Trust
until final payment and performance in full of all Secured Obligations and termination of all obligations
of Beneficiary under or in connection with the Promissory Note or until the Secured Obligations are
forgiven.
Section 11. Substitution of Trustee Beneficiary may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named in or acting under this Agency Development
Deed of Trust.
RV PUBV{VAWER \710715.1
Section 12. Successors and' Assigns This Agency Development Deed of Trust applies to and shall be
binding on and inure to the benefit of all parties to this Agency Development Deed of Trust and their
respective successors and permitted assigns.
Section 13. Accmtance Notice of acceptance of this Agency Development Deed of Trust by .
Beneficiary or Trustee is waived by Trustor. Trustee accepts this Agency Development Deed of Trust
when this Agency Development Deed of Trust duly executed and acknowledged, is made a public record
as provided by law.
Section 14. Governing La This' Agency Development Deed' of Trust shall be governed by, and
construed and enforced in accordance with, the Laws of California.
Section 15. Request for Notice - Trustor requests that a copy of any notice of default and a copy of
any notice of sale be mailed to Trustor at Trustor's address set forth above.
[Signatures on Following Pages]
Rvru3vcvARNER\710715, t
SIGNATURE PAGE
TO
AGENCY DEVELOPMENT DEED OF TRUST
TRUSTOR:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
By:
Its:
By:
Its:
RV PLB%VARNER \710715.1
NOTARY ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On 2006, before
undersigned notary public, personally
❑ personally known to me OR 13 proved to me on the
satisfactory evidence to be the person(s) whose name(s) is/ar
subscribed to the within instrument and acknowledged to me
that helshelthey 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 of Notary Public
R V PUH\INARNER \710715.1
NOTARY ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On
undersigned notary public,
ss.
2006, before me, the
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.
W=SS my hand and official seal.
Signature of Notary Public
RV PUBVNARNER \710715.1
EXK BIT A
TO
AGENCY DEVELOPMENT DEED OF TRUST
Legal Description of the Land
That real property located in the City of Arcadia, Los Angeles County, California, more
particularly described as follows:
RVPUB\KV ARNHR \710715.1
EXHIBIT K
TO
AFFORDABLE HOUSING AGREEMENT
Completion Guarantee
This GUARANTY AGREEMENT ( "Guaranty ") is made and entered into as of , by
. , a ( "Guarantor') in favor of the Redevelopment Agency of
the City of Arcadia, a public body corporate and,politic ( "Agency ").
WHEREAS, the Agency and Trademark Development Company, LLC, a. California
limited liability company ( "Developer") have entered into that certain Affordable Housing Agreement
dated as of May 16 ,2006 ( "Agreement ") under which the Developer has agreed to construct a six (6)
New Home, owner - occupied multi-family affordable housing project, as more specifically defined in the
Agreement ( "Project").
NOW, THEREFORE, for other good and valuable consideration, receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, Guarantor hereby covenants. and
agrees as follows:
1. Guarantor hereby unconditionally guarantees that the Developer. shall construct
and complete the Project in accordance with the Agreement on or before the completion date specified in
the Schedule of Performance attached to the Agreement (subject to applicable notice, cure and extensions
as contained in the Agreement and shall pay all costs and expenses with respect, to the Construction and
completion of the Project.
2. If the Developer does not perform as specified in Section 1 hereof, Guarantor
unconditionally and irrevocably covenants and agrees that Guarantor shall construct and complete the
Project on or before the times required by, and otherwise in accordance with, the Agreement and pay all
costs and expenses and discharge all liabilities, with respect to such Construction and completion.
3. This Guaranty shall remain in full force and effect until such time as a Certificate
of Completion (as defined in the Agreement) has been issued by the Agency for the Project.
4. In the event,the ' D ' eveloper does not perform its obligations set forth in Section I
of the Guaranty on or prior to the time suh performance, (or -any portion thereof) is required, the Agency
may, at its option, proceed to enforce this Guaranty against Guarantor in the first instance without first
proceeding against the Developer or any other person and without first resorting to any security held by or
on behalf of the Agency as security or to any other remedies, and the liability of Guarantor hereunder
shall be in no manner affected or impaired by any failure, delay, neglect, omission or election by the
Agency not to realize upon or pursue any persons or security liable for obligations of the Developer under
the Agreement.
5. The Agency, from time to time and before or after any events of default by the
Developer under the Agreement and with or without further notice to or assent from Guarantor and
without in any manner affecting the liability of Guarantor and upon such terms and conditions as it may
deem advisable, may: (a) extend in whole or in part (by renewal or otherwise), modify, accelerate,
change or release (or consent to any of the. foregoing) any other agreements, documents or instruments in
any way related to the obligations hereby guaranteed and any other indebtedness, liability or obligation of
the Developer or of any other person secondarily or otherwise liable for any such indebtedness, liability
RV PUMV ARNER\7 r 0715.1
Y �
or obligation of the Developer, or waive any default with respect thereto; (b) sell, release, surrender,
modify, impair, exchange, substitute or extend any and all security at any time held by the Agency as
security for the payment or performance of the obligations of the Developer under the Agreement and any
other indebtedness, liability or obligation of the Developer to the Agency; and (c) settle, adjust or
compromise any claim of the Agency against the Developer or any other person secondarily or otherwise
liable (including, but not limited to, Guarantor) for the obligations of the Developer under the Agreement
or any other indebtedness, liability or obligation of the Developer. Guarantor hereby ratifies and confirms
any such extension, renewal, change, release, waiver', surrender; exchange, modification, impairment,
substitution, settlement, adjustment, 'compromise or consent and agrees that the same shall. be binding
upon Guarantor, and Guarantor hereby expressly waives any and all 'defenses, bounterclaims or offsets'
which Guarantor might or could have by reason thereof, it being understood that Guarantor shall at all
times be bound by this Guaranty and remain liable to'the Agency hereunder until all of the obligations
hereunder shall have been performed in full. Guarantor agrees that its obligations hereunder shall not be
discharged, linpted'or otherwise affected by any circumstances which otherwise would constitute a legal
or equitable discharge of Guarantor as surety or guarantor. -
6. the Agency may without the consent of Guarantor at any time and from time to
time: (a) amend any provisions of the Agreement, and any other agreements, instruments or documents
relating in any way to the obligations hereby guaranteed and any change in the obligations to be
performed thereunder, (b) make any agreement with the Developer for the extension; renewal,
modification, payment, compounding, compromise, discharge, exchange, settlement, waiver or release of
any provision of Agreement, and any other agreements documents or instruments relating in any way
to the obligations' hereby guaranteed, or'of any person liable for or any security for the performance of
"any'ofthe obligations hereby guaranteed, without notice to or the consent of Guarantor;! and (c) without
limiting the generality of the foregoing, surrender to the Developer, or to deal with or, modify the form of,
any security which the Agency may at any time hold or which is held on its behalf to secure the
performance of any obligation hereby guaranteed, and the obligations herein undertaken by Guarantor
shall not'be impaired or affected by any of the foregoing but shall include any other obligations thereby
undertaken by the Developer.
7. (a) Guarantor hereby waives all requirements that the Agency shall institute
any action or proceedings at law or in equity against the Developer or anyone else or with respect to any
security held by the Agency as a condition precedent to bringing'an' action against Guarantor upon this
Guaranty, and Guarantor further agrees to make and perform its obligations hereunder whether or not any
one or more of the following events have occurred: (a) the Agency have made any demand on the
Developer, (b) the Agency have taken any action of any nature' against or has pursued any rights which
the Agency have against any other person, partnership; corporation, association, company or entity who
may liable for performance of the obligations with respect to the completion of the Project; (c) the
Agency holds or has resorted to ariy security for the obligations of the Developer under the Agreement or
any other liabilities or obligations hereby guaranteed; or (d) the Agency has invoked any other remedies
or rights the Agency has available with respect to the obligations of the Developer under the Agreement
or the liabilities or obligations hereby guaranteed.
(b) Guarantor shall not be released by any act or thing which might, but for
this provision of this Guaranty, be deemed a legal or equitable discharge of's surety or guarantor, or by
reason of any waiver, extension, modification, forbearance or delay of the Agency or its failure to proceed
promptly or otherwise in the enforcement of the Agreement or any other agreement;' document or
instrument relating in anyway to the obligations hereby guaranteed, and Guarantor hereby expressly
waives and surrenders any defense to their liability under this Guaranty based upon any of the foregoing
acts, things, agreements or waivers, including without limitation, any benefits it may have under
California Civil Code Section 2815 (or any similar law in any jurisdiction).
RV PUB\K V ARN ER \710715.1
Y 1• n
8. Guarantor hereby waives presentment for payment, demand, protest, notice of
protest and of dishonor, notice of acceptance hereof, notices of default and all other notices now or
hereafter provided by law.
9. Guarantor hereby agrees that this instrument contains the entire agreement
between the parties and there is and can be no other oral or written agreement or understanding whereby
the provisions of this instrument have been or can be affected, varied, waived or modified in any manner
unless the same be set forth in writing and signed by the Agency, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.
10. . This Guaranty is and shall be deemed to be a contract entered into under and
p ursuan t to the laws of the State of California without regard to the choice of law principles thereof.
11. Guarantor shall not, by reason of the performance of the terms and provisions of
this Guaranty, succeed to or be subrogated to the rights and privileges of the Agency against the
Developer or any other party or be deemed to be the successor or assign of either the Agency, unless and
until each and every indebtedness, liability and obligation of any ]dnd of the Developer to the Agency
shall have been performed and discharged. In addition and without the foregoing or any other waiver
herein, Guarantor hereby waives, in accordance with California Civil Code Section 2856(a)(1), if
applicable, all rights, benefits and defenses including, without limitation, all rights of subrogation,
reimbursement, indemnification and contribution, under California Civil Code Section 2787 to 2855,
inclusive 2899 and 3433, and under, or based upon, directly or indirectly, California Code of Civil
Procedure Section 580x, 580b, 580d and 726, if applicable (or any similar law in any other jurisdiction)
and no other provision of this Guaranty shall be constructed as the limiting the generality of any
covenants and waivers set forth in this Section 15.
12. No delay on the part of the Agency in exercising any rights hereunder or failure
to exercise the same shall operate as a waiver of such rights. All of the rights, powers and remedies
hereunder and under any other agreement entered into between Guarantor and the Agency, shall be
cumulative and not alternative, and such rights, powers and remedies shall be in addition to all of such the
Agency's rights, powers and remedies provided by law.
13. Guarantor agrees to pay all costs and expenses which may be incurred by the
Agency, their successors and assigns, in the enforcement of this Guaranty or otherwise relating to this
Guaranty, including, but not limited to, reasonable attorneys' fees.
14. This Guaranty shall not be deemed to affect, limit, modify or otherwise have any
impact or effect upon, or be affected, limited or modified by, any other agreement of guaranty or
suretyship given by Guarantor with respect to the Agreement. Notwithstanding anything to the contrary
herein contained, this Guaranty shall be deemed supplemental to, and not in derogation of, any such
agreement of guaranty or suretyship or any other instrument now or hereafter executed by Guarantor in
favor of the Agency.
15. In case any one or more of the provisions of this Guaranty shall be invalid, illegal
or unenforceable in any respect, the validity of the remaining provisions shall be in no way affected,
prejudiced or disturbed thereby.
16. In the event any party is added to become an additional guarantor under this
Guaranty, all obligations of Guarantor hereunder shall be joint and several with any such other party or
parties, and, under such circumstances, all references to Guarantor herein shall thereafter be deemed to
RV PUB\K V ARNER \710715.1
J y
refer to each of such parties comprising Guarantor both individually and collectively with the other such
party or parties.
IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the day and year first
above written.
GUARANTOR:
Date:
a
By:
Its:
Date: By
Its:
RV PUBVCVARNER \710715.1
EXHIBIT L
TO
AFFORDABLE HOUSING AGREEMENT
Marketing Application and Initial Owner Selection Plan
1.
2.
Overall Marketing Objective
a. To sell, as much as permitted by law and regulations, (i) two (2) of the New Homes to
income- qualified City employees who are cwrently,living within the City limits; and (ii)
four (4) of the New Homes to income - qualified persons living within the City limits, but
who are not employees of the City.
b. In the event that no City employees living within the City limits desire to purchase the
New Homes, then to sell all six (6) New Homes to income- qualified persons living within
the City limits.
Marketing Strategy
The following marketing strategy will be utilized to achieve the overall marketing objective.
• Generate awareness of Project among City residents through the programs below:
Z-
- Direct Marketing
- Public Relations
- Directory Advertising
3.
Media Advertising
Generate and maintain prospect communication through an initial interest list comprised of
telephone inquiries resulting from publicity about the project in local news media, signage at
the development site, groundbreaking news release, and local advertising in the City.
• Build and maintain prospect and Community influencer relationships through a Community
relations program with the City departments, non - profits Community service organizations,
and churches.
In the event sufficient interest is not generated
effort to the San Gabriel Valley, and then to th e
press and audio /visual armouncements.
4.
Geographic Market
from the City area, expand the marketing
greater Los Angeles/Long Beach area by
• Primary Market Area (PMA) is within the City limits of Arcadia.
5.
Basic Eligibility
RVPUa\KCV\710715
9 . . y
Income ranges from Dollars $ for a single person (moderate
income) to $ Dollars $ for three people (moderate
income). (See below)
Income Limits (2005) 1 Person 2 People 3 Pe le
Moderate
6. Marketing Programs
6.1 Direct Advertising`in Neighborhood and Pntilic Service Directories
- Pacific Bell and General Telephone
- Donnelly Directory
- Chamber of Commerce list of Community organizations
- Co Service Organizations themselves
-City area real estate guides
- Housing Authority of the County of Los Angeles
-City Churches, Temples, Synagogues and other places of worship
6.2 Media Advertising
- Primary Market Area (PMA) - Advertise in the Arcadia Weekly.
Wait LIst Policy and Procedures
7.1 Names will be placed on the interest list in order of the inquiry. An Interest Form will be
mailed to each interested party (see Attachment 1).
7.2 Only one (1) name per address/household will be permitted to submit an Interest Form
and be placed on the waiting list. Should more than one (1) application per name or household be
discovered, all applications from that name and household will be disqualified.
7.3 In order to be put on the "Waiting List" each applicant must return the signed "Interest
Form," (Attachment 2).
7.4 Once a wait list applicant has signed and returned the completed Interest Form, they will
be given a receipt with a number. This will act as the applicant's Wait List Number. There will be only
one Wait List Number assigned to each application, no matter how many people are listed on the Interest
Form.
7.5 The Interest Form, deposit account and Wait List records and Wait List Number will be
kept at the Agency office.
7.6 Monthly contact will be made keeping the Wait List applicants aware of the selection and
subsequently the Construction progress, etc.
7.7 Applicant Screening Process- to begin 90 days prior to occupancy and the applicant
screening process will be based upon each applicant's Wait List Number.
RVPUB\KCV\710715
i . Y
7.8 All applicant names on the Wait List will be placed in two lotteries — one lottery for City
employees and one lottery non -City employees (by Wait List Number). Note — only the Applicant's Wait
List Number will be entered.
7.9 The following priority shall be made%
7.9.1 Eligible applicants residing in the City for twenty (20) or more years (e.g., 6,936
days) from December 31, 2006 shall have five (5) balls with their Wait List Number placed in the Lottery
drum.
7.9.2 Eligible applicants residing in the City for more than five (5) years (e.g., 1461
days) but less than twenty (20) years (e.g., 6935 days) shall have three (3) balls with their Wait List
Number placed in the Lottery drum.
7.9.3 Eligible applicants residing in the City for more than two (2) years (e.g., 730
days) but less than five (5) years (e.g., 1,460 days) shall have two (2) balls with their Wait List Number
placed in the Lottery drum.
7.9.4 All other eligible applicants shall have one (1) ball with their Wait List Number
placed in the appropriate lottery drum.
7.10 The initial selection for the two separate lotteries shall be made on at
a.m./p.m. in Arcadia City Hall Council Chambers, 240 West Huntington Drive.
7.11 A list of the winners of the two lotteries in the order drawn shall be prepared by the
Agency
7.12 A certified letter, return receipt requested, shall be sent to the fast twelve (12) names
drawn. The first six (6) applicants shall be informed of their opportunity to purchase a New Home; the
six (6) others shall be informed they may have an opportunity to purchase a New Home if one of the
initial six (6) are ineligible for any reason.
7.13 Each applicant selected then will have twenty one (21) calendar days to complete a
detailed in- person questionnaire.
7.14 Applicants will need to provide proof of social security
7.15 Applicants will need to provide proof of all income and assets (equity).
7.16 Applicants will need to review and execute a purchase agreement.
7.17 Applicants must not be in a current bankruptcy.
RVPUMM710715
ATTACHMENT 1
TO
MARKETING APPLICATION AND INITIAL OWNER SELECTION PLAN
INTEREST FORM
Note: This form must be completely and accurately filled out, signed by all potential interested initial
owner s, and returned to the Agency.
1.
Applicant Name
Address
City
Birth Date
Apt.
State Zip Code
Telephone Fax E -mail
2. Length of time you have lived at this address.
3. If you have lived at the above address less than three (3) years, please provide your previous
address.
Address City
4. Length of time at this address. from to
5. Spouse's Name:
(if to be co- owner) Birth
6. Other third -party (non - spouse) proposing to share tenancy, (if any):
Name:
Birth Date
7. Relationship to applicant:
8. Assets/Equity — Per federal guidelines, the value of each applicant's and co -owner 's assets (net of
mortgages, etc.) will be calculated. This amount shall be multiplied by a ten percent (10 %) interest
factor and that figure shall be added to income. Eligibility shall be based on total annual income.
Annual Income Restrictions (per 2002 — U.S., Federal Housing and Urban Development).
RVPUB\KM710715
I Person 2 People 3 People
Moderate
Certification
a. I/We certify that my /our annual income is less than shown in "Annual Income Restrictions"
above.
B. I/We certify that I/We are reasonably certain that my /our assets /equity as defined in paragraph
S above will not be sufficient to disqualify me/us on the basis of income.
d. I/We certify that my /our current (and previous address) is as stated in paragraphs 1 to 4 above.
If you are initially selected through the Lottery, you (and your spouse and/or other third party) will be
required to provide additional information and documentation verifying all of the information above and
as may then be requested
Applicant
Signature:
Applicant
Date
Print name
Other
Signature:
(if any) Spouse
Print name
Signature:
(if any) Other Party Date
Print name
RVPUBIKCV\710715
RESOLUTION NO. 6530
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, APPROVING AN AFFORDABLE
HOUSING AGREEMENT BETWEEN THE REDEVELOPMENT
AGENCY OF THE CITY OF ARCADIA AND TRADEMARK
DEVELOPMENT COMPANY CONCERNING THE
DEVELOPMENT OF A SIX (6)- UNIT OWNER OCCUPIED
AFFORDABLE HOUSING PROJECT LOCATED AT 119 AND
121 ALTA STREET IN THE CITY OF ARCADIA AND
MAKING CERTAIN FINDINGS PURSUANT TO CALIFORNIA
HEALTH AND SAFETY CODE SECTION 33433 IN
CONNECTION THEREWITH
WHEREAS, pursuant to the provisions of California Community
Redevelopment Law (California Health and Safety Code Section 33000 et sec.)
( "CRL "), the City Council ( "City Council") of the City of Arcadia ( "City") approved
and adopted a redevelopment plan ( "Redevelopment Plan") for the Central
Redevelopment Project Area ( "Project Area "); and
WHEREAS, the Agency is engaged in activities necessary to execute and
implement the Redevelopment Plan for the Project Area; and
WHEREAS, the Agency owns two (2) parcels of real property within the Project
Area approximately sixteen thousand (16,000) square feet in size located at 119 Alta
Street and 121 Alta Street the City and identified as Assessor Parcel Numbers 5773-
014 -912 and 5773- 014 -913 ( "Property"); and
WHEREAS, Trademark Development Company, a California limited liability
company ( "Developer ") desires to acquire the Property from the Agency and construct
".i
on the Property six (6) owner- occupied multifamily residences ( "Project ") reserved for
occupancy, for a period of at least forty-five (45) years, by families whose household
earnings do not exceed one hundred twenty percent (120 %) of Los Angeles County
median income; and
WHEREAS, to assist in the development of the Project on the Property, the
Agency desires to provide the Developer a loan in an amount not to exceed Seven
Hundred Sixty Thousand Dollars ($760,000) to assist the Developer in financing the
development of the Project on the Property ( "Agency Development Loan"); and
WHEREAS, the Agency and the Developer have negotiated the terms of an
affordable housing agreement entitled "Affordable Housing Agreement (119/121 Alta
Street)" ( "Agreement "), which provides, among other things, for the Developer's
development of the Project on the Property and the Agency's provision of the Agency
Development Loan to the Developer; and
WHEREAS, a copy of the Agreement is attached to this resolution
( "Resolution ") as Exhibit "A' and incorporated into this Resolution by this reference;
and
WHEREAS, the Agency has determined that implementation of the Agreement:
(i) is in the best interests of the City and the Agency and the health, safety and welfare
of the City's taxpayers and residents and is in accordance with the public purposes set
forth in the Redevelopment Plan and CRL, (ii) strengthens the City's land use and
2
social structure; (iii) alleviates economic and physical blight in the City; and (iv)
provides needed affordable housing in the City; and
WHEREAS, pursuant to Government Code Section 65402, the Planning
Commission of the City must determine prior to the time of conveyance of the Property
to the Developer that the location, purpose, extent and development of the Project are
in conformance with the City's general plan; and
WHEREAS, pursuant to CRL Section 33433 the City Council of the City (acting
as the Agency's legislative body) must make certain findings and determinations in
connection with Agency 's sale of the Property which was acquired with Agency tax
increment revenue; and
WHEREAS, pursuant to CRL Section 33433, the Agency has prepared, and the
City Council has reviewed and considered, a summary report ( "Summary Report")
setting forth: (1) the cost of the Agreement to the Agency; (2) the estimated value of
the interest to be conveyed; and (3) an explanation of how the acquisition and
conveyance of that interest will assist in the elimination of blight within the Project
Area and the Agency has made the Summary Report available for public inspection in
accordance with CRL Section 33433; and
WHEREAS, pursuant to CRL Section 33433, on May 22, 2006, and May 29,
2006, the Agency caused notice of the a joint public hearing of the City Council and
i
the Agency's Governing Board to be published in a newspaper of general circulation
within the Agency's territorial jurisdiction; and
WHEREAS, pursuant to provisions of CRL Section 33433, on June 6, 2006, the
City Council and the Agency's Governing Board held a duly noticed joint public
hearing on the proposed Project and on the proposed Agreement; and
WHEREAS, all other legal prerequisites to the adoption of this Resolution have
occurred.
THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES
HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. The City Council finds and determines, based on the
information made available in the Summary Report, the staff report accompanying this
Resolution, the oral presentation of staff, and the other written and oral evidence
presented to the City at or prior to the public hearing, that, pursuant to CRL Section
33433:
(i) The sale of the Property and development of the Project will
assist in the elimination of blight and provide housing for
moderate - income persons;
(ii) The sale of the Property is consistent with the implementation
plan adopted by the Agency for the Project Area; and
0
(iii) The consideration to be paid for the Property by the Developer is
not less than fair reuse value of the Property with the covenants,
conditions and development costs.
SECTION 2. The City Council approves the Agreement together with non-
substantive changes and amendments as may be approved by both the City Manager
and the City Attorney.
SECTION 3. The City Council hereby authorizes and directs the City
Manager to take any action and execute any documents necessary to implement the
Agreement.
SECTION 4. This Resolution shall take effect upon its adoption.
SECTION 5. The City Clerk shall certify to the adoption of this
Resolution.
[SIGNATURES ON NEXT PAGE]
N7
Passed, approved and adopted this 6th day of .rune 1 2006.
/S/ ROGER CHANDLER
Mayor of the City of Arcadia
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
2
i
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS:
CITY OF ARCADIA )
I, JAMES H. BARROWS, City Clerk of the City of Arcadia, hereby certifies
that the foregoing Resolution No. 6530 was passed and adopted by the City Council of
the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular
meeting of said Council held on the 6th day of June, 2006 and that said Resolution was
adopted by the following vote, to wit:
AYES: Council Member Amundson, Segal, Wuo and Chandler
NOES: None
ABSENT: Council Member Harbicht
1 S1 JAMES H. BARRO
City Clerk of the City of Arcadia
7
DISCUSSION DRAFT 1
MAY 9, 2006
AFFORDABLE HOUSING AGREEMENT
(119 Alta Street / 121 Alta Street)
between
THE REDEVELOPMENT AGENCY OF �,HE CITY OF ARCADIA
a public body, corporate and politic
and
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
[Dated as of June 6, 2006, for reference purposes only]
RV PUB\KV ARNER \7l 0715.1
This AFFORDABLE HOUSING AGREEMENT (119 Alta Street / 121 Alta Street)
( "Agreement ") is reference dated as of June 6, 2006, by and between THE REDEVELOPMENT
AGENCY OF THE CITY OF ARCADIA, a public body corporate and politic ( "Agency "), and
TRADEMARK DEVELOPMENT COMPANY, a California limited liability company ( "Developer ").
The Agency and the Developer are sometimes referred to in this Agreement, individually, as a "Party"
and, collectively, as "Parties." This Agreement is entered into with reference to the following recitals of
fact ("Recitals'):
RECITALS
A. Pursuant to the provisions of California Community Redevelopment Law (Health and
Safety Code Section 33000 et sec.) ( "CRL'), the City Council ("City Council') of the City of Arcadia
( "City') approved and adopted a redevelopment plan ( " Redevelopment Plan") for the Central
Redevelopment Project Area ( "Project Area") on December 26, 1973 by Ordinance Number 1490.
B. The Agency is engaged in activities necessary to execute and implement the
Redevelopment Plan for the Project Area.
C. The Agency owns two (2) parcels of real property approximately sixteen thousand
(16,000) square feet in size located at 119 Alta Street and 121 Alta Street the City and identified as
Assessor Parcel Numbers 5773- 014 -912 and 5773 -014 -913 ( "Property'). The Property is legally
described in Exhibit A attached to this Agreement and incorporated into this Agreement by this reference.
A site map depicting the Property is attached to this Agreement as Exhibit B and is incorporated into this
Agreement by this reference. The Property is locate - within the Project Area.
D. The Developer desires to acquire the Property from the Agency and construct on the
Property six (6) owner- occupied multifamily residences ( "Project ") reserved for occupancy, for a period
of at least forty-five (45) years, by families whose household earnings do not exceed one hundred twenty
percent (120 %) of Los Angeles County median income. The Project is more particularly described in the
scope of development ("Scope of Development') attached to this Agreement as Exhibit C and
incorporated into this Agreement by this reference.
E. To assist in the development of the Project on the Property, the Agency desires to: (i)
transfer the Agency's fee interest in the Property to the Developer for a purchase price of One Dollar
($1.00); (ii) provide the Developer a loan in an amount not to exceed Seven Hundred Sixty Thousand
Dollars ($760,000) to assist the Developer in financing the development of the Project on the Property
( "Agency Development Loan").
F. This Agreement and the exhibits attached to this Agreement ( "Exhibits ") implement the
goals and objectives of the Agency and the City for the disposition of the Property and the development
of the Project on the Property which will benefit the affordable housing needs of the City and assist the
Agency in meeting its inclusionary housing obligations as set forth in the Redevelopment Plan and CRL.
The development of the Project on the Property pursuant to this Agreement is in the best interests of the
City and the Agency and the health, safety and welfare of the City's taxpayers and residents and is in
accordance with the public purposes set forth in the Redevelopment Plan and CRL. Implementation of
this Agreement will further the goals and objectives of the Redevelopment Plan and the City's general
plan by: (i) strengthening the City's land use and social structure; (ii) alleviating economic and physical
blight within the Project Area; and (iii) providing needed affordable housing in the City.
RVPUB\KVARNER \710715.1 -1-
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the
Agency and the Developer, the Parties agree as follows:
TERMS AND CONDITIONS
ARTICLE I
DEFINITIONS; PARTIES; REPRESENTATIONS
AND WARRANTIES; EFFECTIVE DATE
1.1 Definitions All initially capitalized terms not otherwise defined in this Agreement shall
have the following meanings:
1.1.1 Adiusted Family Income The term "Adjusted Family Income" shall mean
the anticipated total annual income (adjusted for family size) of each individual or family residing or
treated as residing in a New Home as calculated in accordance with Treasury Regulation 1.167(k) -
3(b)(3) under the United States Internal Revenue Code, as adjusted, based upon family size in accordance
with the household income adjustment factors adjusted and amended from time to time, pursuant to
Section 8 of the United States Housing Act of 1937, as amended.
1.1.2 Affordable Housing Cost The term "Affordable Housing Costs" shall have
the meaning set forth in California Health and Safety Code Section 50052.5, as it may be amended from
time to time through the term of the Regulatory Agreement.
1.1.3 Affordable Housing Funds The term "Affordable Housing Funds" shall
mean that portion of the Agency's general property tax increment allocation set aside pursuant to CRL
Section 33334.2 for the purposes of increasing, improving, providing and preserving the community's
supply of affordable housing available to persons and families of low or moderate income.
1.1.4 Agency The term "Agency" shall mean the Redevelopment Agency of the
City of Arcadia, a public body corporate and politic, and any assignee of or successor to its rights, powers
and responsibilities.
. 1.1.5 Agency Development Deed Of Trust The term "Agency Development Deed
of Trust" shall mean that certain Agency Development Deed of Trust attached hereto as Exhibit J
securing the Developer's obligation to repay the Agency Development Loan and the fair market value of
the Property pursuant to the terms of this Agreement and the Agency Development Promissory Note.
1.1.6 Agency Development Loan The term "Agency Development Loan" shall
mean a loan in an amount not to exceed Seven Hundred Sixty Thousand Dollars ($760,000) from the
Agency to the Developer in order to assist the Developer in financing the development of the Project on
the Property.
1.1.7 Agency Development Promissory Note The term "Agency Development
Promissory Note" shall mean that certain promissory note attached hereto as Exhibit I evidencing the
Developer's obligation to repay the Agency Development Loan and the fair market value of the Property
pursuant to the terms of this Agreement and the Agency Development Promissory Note. The Agency
Development Promissory Note shall be secured by the Agency Development Deed of Trust.
RVPUBUCVARNER \710715.1 -2-
1.1.8 Agency Quitclaim Deed The term "Agency Quitclaim Deed" shall mean the
Quitclaim Deed for the conveyance of the Property from the Agency to the Developer, substantially in the
form of Exhibit E attached to this Agreement.
1.1.9 AAzency's Conditions Precedent The term "Agency's Conditions Precedent"
shall mean the conditions precedent to the Closing for the benefit of the Agency as set forth in Section
2.8.2.
1.1.10 Agency's Title Notice The term "Agency's Title Notice" shall have the
meaning ascribed to the term in Section 2.1.1.
1.1.11 Agreement The term "Agreement" shall mean this Affordable Housing
Agreement between the Agency and the Developer, including the Exhibits attached to this Agreement.
1.1.12 Alvil. The term "AMP' shall mean the area median income for Los Angeles
County, California adjusted for family size appropriate for a New Home by the California Department of
Housing and Community Development in accordance with adjustment factors adopted and amended from
time to time by the United States Department of Housing and Urban Development pursuant to Section 8
of the United States Housing Act of 1937, and California Health and Safety Code Section 50093.
1.1.13 CEO A . The term "CEQA" shall mean that California Environmental Quality
Act, California Public Resources Code Section 21000 et se
1.1.14 Certificate of Completion The terms "Certificate of Completion" shall mean
the Agency's written certification that the Project is complete and in compliance with the terms and
conditions of this Agreement, substantially in the form of Exhibit F attached to this Agreement.
1.1.15 Cam. The term "City" shall mean the City of Arcadia, a California municipal
corporation and any assignee of or successor to its rights, powers and responsibilities.
1.1.16 City Council The term "City Council" shall mean the duly elected
governing body of the City.
1.1.17 Close of Escrow, Closing The terms "Close of Escrow" and "Closing" shall
mean the date when the Escrow Holder is in receipt of all necessary documents and the Escrow Holder is
in a position to comply with the final written instructions of the Parties and causes the Agency Quitclaim
Deed to be recorded and the Developer's Title Policy to be delivered to the Developer.
1.1.18 Closing Date The term "Closing Date" shall mean the date of the Closing,
as set forth in Section 2.11.
1.1.19 Closing Statement The term "Closing Statement" shall mean the statement
prepared by the Escrow Holder indicating among other things, the Escrow Holder's estimate of all funds
to be deposited or received by the Agency or the Developer and all charges to be paid by the Agency or
the Developer through the Escrow.
1.1.20 Comnletion Guarantee The term "Completion Guarantee" shall mean a
guarantee from the Developer guaranteeing to the Agency the completion of the Project in accordance
with this Agreement, substantially in the form of Exhibit K attached hereto.
RVPUBVCVARNER \710715.1 -3-
1.1.21 Comletion of Construction The term "Completion of Construction" shall
mean the issuance by the City of all final (not temporary) certificates of occupancy required for the
occupancy of each and every New Home in Project.
1.1.22 Construction The term "Construction" shall mean the work of improvement
to be performed on the Property in accordance with the terms and conditions of this Agreement.
1.1.23 Construction Loan The term "Construction Loan" shall mean a Loan
obtained by the Developer from an institutional Lender or other Lender making such Loans in the normal
course of its business to finance all or part of the Project Costs, which shall be secured by a Lien.
1.1.24 CRL. The term "CRL" shall mean California Community Redevelopment
Law (California Health and Safety Code Section 33000 et seq.).
1.1.25 Defaul . The term "Default" shall mean the failure of a Party to perform any
action or covenant required by this Agreement within the time period provided for such performance in
this Agreement following any provided notice and opportunity to cure.
1.1.26 Developer The term "Developer" shall mean Trademark Development
Company, LLC, a California limited liability company, and any voluntary successors and assigns to
which a Permitted Transfer of the Project may be made, as authorized by the provisions of this
Agreement.
1.1.27 ;, Developer's Conditions Precedent The term "DeveIgper's Conditions
Precedent" shall mean the conditions precedent to the Closing for the benefit of the Developer as set forth
in Section 2.8.1.
1.1.28 Developer's Due Diligence Completion Certificate The term "Developer's
Due Diligence Completion Certificate" shall have the meaning ascribed to the term in Section 2.3.1.7.
1.1.29 Developer's Preliminary Title Report The term "Developer's Preliminary
Title Report" shall have the meaning ascribed to the term in Section 2.1.1.
1.1.30 Developer's Survey The term "Developer's Survey" shall mean a survey of
the Property prepared by a land surveyor duly licensed by the State of California and in compliance with
ALTA/ASCM land survey standards.
1.1.31 Developer's Survey Objection Notice The term "Developer's Survey
Objection Notice" shall have the meaning ascribed to the term in Section 2.2.
1.1.32 Develo Title Obiection Notice The term "Developer's Title Objection
Notice" shall have the meaning ascribed to the term in Section 2.1.1.
1.1.33 Devel9per's Title Policy The term "Developer's Title Policy" shall mean
the Title Company's ALTA extended owner's policy of title insurance, with liability in an amount equal
to the fair market value of the Property insuring fee title to the Property vested in the Developer and
subject only to: (i) non - delinquent real property taxes and assessments; (ii) non - monetary title exceptions
approved by the Developer pursuant to Section 2.1; (iii) the provisions of the Agency Quitclaim Deed;
(iv) the applicable provisions of this Agreement; and (v) such other title exceptions, if any, resulting from
documents being recorded or delivered through Escrow.
RVPUB\KVARNER \710715.1 -4-
1.1.34 Due Diligence' Period The term "Due Diligence Period" shall mean the date
commencing upon the Effective Date of this Agreement and expiring at 5:00 p.m. Pacific Standard Time
(GMT — 8:00) on the thirtieth (30th) calendar day thereafter.
1.1.35 Effective Date The term "Effective Date" shall have the meaning ascribed
to the term in Section 1.5.
1.1.36 Environmental Laws The term "Environmental Laws" shall mean all
federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or
requirements of any government authority. regulating, relating to, or imposing liability of standards of
conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or
industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws,
ordinances, or regulations relate to hazardous substances on, under, or about the Property), occupational
or environmental conditions on, under, or about the Property, as now or may at any later time be in effect,
including without limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ( "CERCLA ") [42 USC Secti on 9601 et M.]; the Resource Conservation and Recovery Act
of 1976 ( "RCRA ") [42 USC Section 6901 et M.]; the Clean Water Act, also known as the Federal Water
Pollution Control Act ( "FWPCA'� [33 USC Section 1251 et seMJ; the Toxic Substances Control Act
( "TSCA'� [15 USC Section 2601 et seine]; the Hazardous Materials Transportation Act ('IRXrA ") [49
USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et sec .] the
Clean Air Act [42 USC Section 7401 et s�Mc.]; the Safe Drinking Water Act [42 USC Section 300f et
se=c .]; the Solid Waste Disposal Act [42 USC Section 6901 et sec .]; the Surface Mining Control and
Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know
Act [42 USC Secd6h 11001, et M.]; the Occupational Safety and Health A [29 USC Section 655 and
657]; the California Underground Storage of Hazardous Substances Act [California Health and Safety
Code Section 25288 et seMC .]; the California Hazardous Substances Account Act [California Health and
Safety Code Section 25300 et sN.]; the California Safe Drinking Water and Toxic Enforcement Act
[California Health and Safety Code Section' 24249.5 e) M.] the Porter - Cologne Water Quality Act
[California Water Code 'Section 1300b et sec .] together with any amendments' of or regulations
promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or
regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and
only to the extent the occupational health or industrial hygiene laws, ordinances, of "regulations relate to
hazardous substances on, under, or about the Property, or the regulation or protection of the environment,
including ambient air, soil, soil vapor, groundwater, surface water, or land use.
1.1.37 Escrow The term "Escrow" shall mean an escrow account opened with
Escrow Holder for the conduct of the purchase and sale transaction described in this Agreement.
1.1.38 Escrow Holder The term "Escrow Holder" shall mean
located at California.
1.1.39 Executive Director The term "Executive Director" shall mean the Executive
Director of the Agency or his or her designee or successor in function.
1.1.40 Fair Market Value The term "Fair Market Value" shall have the meaning
ascribed to the term in Section 2.5.
1.1.41 Financing Commitments The term "Financing Commitments" shall mean
irrevocable commitments, subject only to customary and reasonable conditions precedent from a Lender
for financing the construction, ownership and use of the Project.
RVPUB\KVARNER \710715.1 -5-
1.1.42 Financing Plan. The term "Financing Plan" shall mean the description of the
proposed method of financing the Construction of the Project on the Property, which is attached as
Exhibit H to this Agreement, which, together with the Project Budget, illustrates the financing structure of
the Project.
1.1.43 FIRPTA The term "FIRPTA" shall mean the United States Foreign
Investment in Real Property Transfer Act.
1.1.44 First Installment The term "First Installment" shall mean the first
installment of the Agency Development Loan distributed by the Agency to the Developer as provided in
Section 3.4.1.2.1.
1.1.45 First Mortgage Financing The term "First Mortgage Financing" shall mean
any of the following: (i) the Construction Loan;, (ii) the Permanent Loan; or (iii) any Replacement Loan
refinancing any Construction Loan and/or any Permanent Loan so long as the total amount refinanced an
does not exceed the total original principal amount of each Construction Loan and/or Permanent Lo.
1.1.46 Fiscal Year The term "Fiscal Year" shall mean a twelve (12) calendar
month period commencing on July 1 of one year and ending on June 30 of the immediately following
year.
1.1.47 Governing Bodv The term "Governing Body" shall mean the governing
body of the Agency.
1.1.48 Governmental Agency The term "Governmental Agency" shall mean any
and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any
governmental entity (federal, state, county, district, municipal, city, or otherwise) whether now or later in
existence.
1:1.49 Governmental Requirements The term "Governmental Requirements" shall
mean all codes, statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated
thereunder of any Governmental Agency having jurisdiction, partial or otherwise over the Property or the
Project.
1.1.50 Hazardous Substances The term "Hazardous Substances" shall mean: (i)
those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous
material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA,
HMTA, or under any other Environmental Laws; (ii) those substances listed in the United States
Department of Transportation ("DOT') Table [49 CFR 172.101], or by the EPA, or any successor agency,
as hazardous substances [40 CFR Part 302]; (iii) other substances, materials, and wastes that are or
become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and
(iv) any material, waste, or substance that is a petroleum or refined petroleum product, asbestos,
polychlorinated biphenyl, designated as a hazardous substance pursuant to 33 USC Section 1321 or listed
pursuant to 33 USC Section 1317, a flammable explosive, or a radioactive material.
1.1.51 Land Use Laws The term "Land Use Laws" shall have the meaning
ascribed to the term in Section 2.4.1.
1.1.52 Lender The term "Lender" shall mean a mortgagee or a beneficiary of a
Lien and shall include its successors and assigns.
RVPUB\KVARNER \730715.1 -6-
1.1.53 Lien. The term "Lien" shall mean any mortgage, deed of trust or other
security instrument encumbering the Developer's fee interest in the Property and/or Project, or any part
thereof.
1.1.54 Loan. The term "Loan" shall mean any loan made as permitted by this
Agreement'{
1.1.55 Marketing Application and Initial Owner Selection Plan The term
"Marketing Application and Initial Owner Selection Plan" shall -mean. the marketing application and
initial owner selection plan attached to this Agreement as Exhibit L and incorporated into this Agreement
by this reference.
1.1.56 Net Proceeds The term "Net Proceeds" shall mean the proceeds of any Loan
less the repayment from such Net Proceeds of any Loan made prior in time to said Loan and less any fees
or charges paid out of or reimbursed from the gross proceeds of such Loan, including, without limitation,
broker's commissions and fees, loan commitment fees or other charges assessed by the Lender for making
the Loan, normal closing costs, title insurance premiums, and attorneys' fees. Net Proceeds shall be
determined on a cash basis.
1.1.57 New Homes The term "New Homes" shall mean the six (6) multi - family
residences constituting the Project. The term "New Home" shall mean one (1) of the multi - family
residences in the Project.
1.1.58 Normal Business Hours The term "Normal Business Hours" shall mean any
weekday, Monday through Friday, between the hours of 8:00 a.m. and 5:00 p.m. Pacific Standard Time.
1.1.59 Opening of Escrow The term "Opening of Escrow" shall have the meaning
ascribed to the term in Section 2.6.
1.1.60 Outside Closing Date The term "Outside Closing Date" shall mean June
30th, 2006.
1.1.61 PCO Statement The tern "PCO Statement" shall mean a preliminary
change of ownership statement provided for in California Revenue and Taxation Code Section 480.3.
1.1.62 Permanent Loan The term "Permanent Loan" shall mean any Loan secured
by a Lien, the Net Proceeds of which are used in whole or in part to pay any Lender's Construction Loan.
1.1.63 Permitted Transfer The term "Permitted Transfer" shall mean any sale,
transfer, assignment or conveyance of the Property or the Project that is approved by the Agency or is
expressly permitted by the terms of this Agreement.
1.1.64 Prime Rate The tern "Prime Rate" shall mean the prime rate of interest or
the equivalent thereof established by Bank of America or if Bank of America is no longer in existence,
then by the largest commercial bank located in Califomia on the date of payment.
1.1.65 Proiect The'term "Project" shall mean the Construction of six (6) multi-
family owner- occupied residences to be owned and occupied by Qualified Households. The Project is
more particularly described in the scope of development ( "Scope of Development ") attached to this
Agreement as Exhibit C and incorporated into this Agreement by this reference.
RVPUB\RVARNER \710715.1 -7-
1.1.66 Proiect Area The term "Project Area" shall mean the Central
Redevelopment Project Area adopted by the City Council of the City on December 26, 1973 by
Ordinance Number 1490.
1.1.67 Proiect Budget The term "Project Budget" shall mean the budget of costs
and expenses projected to be necessary for the Developer to acquire the Property and construct the Project
on the Property which is attached to this Agreement as Exhibit H and incorporated into this Agreement by
this reference.
1.1.68 Project Costs The term `Project Costs" shall mean the total cost incurred by
the Developer in acquiring the Property and constructing the Project on the Property, consistent with the
Project Budget and in accordance with terns and conditions of this Agreement.
1.1.69 Proiect Entitlements The term "Project Entitlements" shall mean the precise
plan, parcel map, variances, zone changes, and grading permits necessary for development of the Project
on the Property to be approved by the City. Project Entitlements shall not include building permits or the
formation or approval of districts, bonds or exactions (including, but not limited to, special assessments
and special taxes) necessary to finance, directly or indirectly, the construction of public improvements or
the provision of public services necessary for the Project. Project Entitlements also shall not include
permits to occupy or operate after initial completion of construction has occurred.
1.1.70 ProDertv The term "Property" shall mean the real property legally described
in Exhibit A and depicted in Exhibit B which is owned by the Agency and shall be conveyed to the
Developer pursuant to the terms and conditions of this Agreement.
1.1.71 Purchase Price The term `Purchase Price" shall have the meaning ascribed
to the term in Section 2.4.
1.1.72 Oualified Households The term "Qualified Households" shall mean persons
and/or families who have an Adjusted Family Income which does not exceed one hundred twenty percent
(120 %) of the AMI for Los Angeles County.
1.1.73 Oualified Residence Period The term "Qualified Residence Period" as to a
particular New Home shall mean the period of time beginning on the date escrow closes for the first sale
of the New Home to a Qualified Household and ending on the date which is forty -five (45) years
thereafter.
1.1.74 Redevelonment Plan The term "Redevelopment Plan" shall mean the
redevelopment plan for the Project Area, as amended from time to time.
1.1.75 Regulatory Agreement The term "Regulatory Agreement" shall mean that
certain regulatory agreement entitled "Regulatory Agreement" to be recorded against each New Home
upon the initial sale of such New Home from the Developer to a Qualified Household, substantially in the
form attached hereto as Exhibit G ensuring that the New Home may only be sold, transferred, or
conveyed to a Qualified Household at an Affordable Housing Cost during the Qualified Residence Period.
1.1.76 Remaining Balance The term "Remaining Balance" shall mean the
difference between the total sum of the Agency Development Loan and the First Installment distributed
by the Agency to the Developer as provided in Section 3.4.1.2.2.
RVPUB\KVARNER \710715.1 -8-
1.1.77 Schedule of Performance The term "Schedule of Performance" shall mean
the schedule for the performance of certain actions by the Agency and the Developer, pursuant to this
Agreement which is attached to this Agreement as Exhibit D and is incorporated into this Agreement by
this reference.
1.1.78 Scope of Development The term "Scope of Development" shall mean the
detailed description of the primary elements of the Project which is attached to this Agreement as Exhibit
C and is incorporated into this Agreement by this reference.
1.1.79
Title Company The term "Title Company" shall mean
Title Company located at California
1.1.80 Transfer The term "Transfer" shall mean any voluntary or involuntary sale,
transfer, assignment or conveyance of the Property, any portion thereof or interest therein, or any
agreement to do so, except for a Permitted Transfer.
1.2 Parties to Agreement
1.2.1 Agency The Agency is a public body, corporate and politic, exercising
governmental functions and powers and organized and existing under CRL. The principal office and
mailing address of the Agency, for the purposes of this Agreement, is 240 West Huntington Drive,
Arcadia, California 91066, Attention: Executive Director, telephone (626) 574 -5401; facsimile (626)
446 -5729; with copies to Best Best & Krieger LLP, 3750 University Avenue, Suite 400, Riverside,
California 92501, Attention: Kevin K. Randolph, Esq.; telephone (951) 686 -1450; facsirrlIe (951) 686-
3083.
1.2.2 Developer The Developer is Trademark Development Company, LLC, a
California limited liability company. The principal office.and mailing address of the Developer, for the
purposes of this Agreement, is . , Attention: • telephone:
facsimile with copies to
; telephone ; facsimile
1.3 Representations and Warranties
1.3.1 Agency Representations and Warranties The representations and warranties
of the Agency contained in this Section 1.3.1 shall be based upon the actual current knowledge of
William R. Kelly, Executive Director of the Agency, as of the Effective Date. All representations and
warranties contained in this Section 1.3.1 are true and correct as of the Effective Date. The Agency's
liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in
this Agreement, shall survive the execution and delivery of this Agreement and the Closing. The Agency
hereby makes the following representations, covenants and warranties and acknowledges that the
execution of this Agreement by the Developer has been made in material reliance by the Developer on
such covenants, representations and warranties:
1.3.1.1 The Agency is a community redevelopment agency, duly formed and
operating under the CRL. The Agency has the legal power, right and authority to enter into this
Agreement and to execute the instruments and documents referenced herein,, and to consummate the
transactions contemplated hereby.
1.3.1.2 The persons executing any instruments for or on behalf of the Agency
have been authorized to act on behalf of the Agency and this Agreement is valid and enforceable against
RVPUBVCV ARNERV 10715.1 -9-
the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant
hereto or in connection therewith will, when executed, shall be valid and enforceable against the Agency
in accordance with its terms. No approval, consent, order or authorization of, or designation or
declaration of any other person, is required in connection with the valid- execution and delivery of and
compliance with this Agreement by the Agency.
1.3.1.3 The Agency has taken all requisite action and obtained all requisite
consents for agreements or matters to which the Agency is a parry in connection with entering into this
Agreement and the instruments and documents referenced herein and in connection with the
consummation of the transactions contemplated hereby.
1.3.1.4 The funds used by the Agency to provide the Agency Development
Loan, originated solely from Affordable Housing - Funds. There are no sources of funds other than
Affordable Housing Funds used or to be used by the Agency with respect to the funding of the Agency
Development Loan.
1.3.2 Develoner Representations and Warranties The representations and
warranties of the Developer contained in this Section 1.3.2 shall be based upon the actual current
knowledge of as of the Effective Date. All representations and warranties contained in this
Section 1.3.2 are true and correct as of the Effective Date. The Developer's liability for misrepresentation
or, breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive
the execution and delivery of this Agreement and the Closing. The Developer hereby makes the
following representations, covenants and warranties and acknowledges that the execution of this
Agreement by the Agency has been made in mate`rlal reliance by the Agency on such covenants,
representations and warranties:
1.3.2.1 The Developer is a Trademark Development Company, LLC, a
California limited liability company, lawfully entitled to do business in the City. The Developer has the
legal right, power and authority to enter into this Agreement and the instruments and documents
referenced herein and to consummate the transactions contemplated hereby. The persons executing this
Agreement and the instruments referenced herein on behalf of the Developer hereby represent and
warrant that such persons have the power, right and authority to bind the Developer.
1.3.2.2 The Developer has taken all requisite action and obtained all requisite
consents in connection with entering into this Agreement and the instruments and documents referenced
herein and the consummation of the transactions contemplated hereby, and no consent of any other party
is required for the Developer's authorization to enter into Agreement.
1.3.2.3 Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby shall result in a breach of or constitute a default under any other
agreement, document, instrument or other obligation to which the Developer is a party or by which the
Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ,
injunction, order or decree of any court or governmental body applicable to the Developer or to the
Property.
1.3.2.4 This Agreement is, and all agreements, instruments and documents to
be executed by the Developer pursuant to this Agreement shall be, duly executed by and shall be valid
and legally binding upon the Developer and enforceable in accordance with their respective terms, No
approval, consent, order or authorization of, or designation or declaration of any other person, is required
in connection with the valid execution and . delivery of in compliance with this Agreement by the
Developer.
RVPUBVCVARNER1710715.1 -10-
1.4 Prohibition Against Change in Ownership Management and Control of me Developer
and Assignment of Agreement The qualifications and identity of the Developer is of particular concern
to the Agency. It is because of those: qualifications and identity that the Agency has entered into this
'Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer shall
acquire any rights or powers under this Agreement except as expressly set forth herein.
1.4.1 The Developer shall not assign all or any part of this Agreement or any rights
hereunder prior to the issuance of the Certificate of Completion for the Project without the prior written
approval of the Agency Executive Director, which approval shall not be unreasonably conditioned,
withheld or delayed.
1.4.2 This Agreement may be terminated by the Agency prior to the Close of
Escrow if there is any material change, whether voluntay or involuntary, in membership, ownership,
management or control of the Developer (other than such changes occasioned by the death or incapacity
of any individual) that has not been approved by the Agency prior to the time of such change or the
Agency may seek other appropriate relief in the event that at any time following the Close of Escrow and
prior to issuance of the Certificate of Completion, a material change in the ownership or control of the
Developer occurs; provided, however, that (i) the Agency shall first notify the Developer in writing of its
intention to terminate this Agreement or assert any other'such remedy, and (ii) the Developer shall have
thirty (30) calendar days following its receipt of such written notice to commence and thereafter diligently
and continuously proceed with the cure of the default of the Developer hereunder and submit evidence of
the initiation of satisfactory completion of such cure to the Agency in `a form and substance deemed
satisfactory to the' Agency, in its reasonable discretion.
1.4.3 For the purpose of Section 1.4 the words "material change" refer to any total
or partial sale, assignment, or conveyance, or any trust power or any transfer in any other mode or form
by the Developer.
1.5 Effective Date This Agreement is dated June 6, 2006 for reference purposes only. This
Agreement shall not become effective until the date on which all of the following are true (`Effective
Date': (i) this Agreement is approved and executed by the appropriate authorities of the Developer and
delivered to the Agency; (ii) following all legally required notices and hearings, this Agreement is
approved by the Agency's Governing Board after the City Council of the City has made the findings
required by CRL Section 33433; and (iii) this Agreement is executed by the authorized representatives of
the Agency and delivered to the Developer.
1.6 Exhibit List The following is a list of the Exhibits attached to this Agreement. Each of
the Exhibits is incorporated by this reference into this Agreement.
Exhibit A
Legal Description of Property
Exhibit B
Site Map of Property
Exhibit C
Project Scope of Development
Exhibit D ".
Project Schedule of Performance
Exhibit E
Agency Quitclaim Deed
Exhibit F
Certificate of Completion
Exhibit G
Regulatory Agreement
Exhibit H
Project Budget and Financing Plan
Exhibit I
Agency Development Promissory Note
Exhibit J
Agency Development Deed of Trust
Exhibit K
Completion Guarantee
Exhibit L
Marketing Application and Initial Owner Selection Plan.
RVPUB\KVARNER \710715.1 -11-
ARTICLE 11
ACQUISITION AND CONVEYANCE OF PROPERTY
2.1 Review and Apuroval of Condition of Title of Prong= by the Developer
2.1.1 As soon as practicable following the Opening of Escrow, the Agency shall
cause to be delivered to the Developer a preliminary title report for an ALTA extended owner's policy of
title insurance issued by the Title Company, together with copies of all documents identified in Schedule
'B" of the report ( "Developer's Preliminary Title Report"), for the Property. The Developer shall notify
the Agency in writing ( "Developer's Title Objection Notice'l prior to the expiration of the Due Diligence
Period of any objections the Developer may have to the matters set forth in Schedule `B" of the
Developer's Preliminary Title Report The Agency shall have a period of twenty (20) calendar days after
receipt of the Developer's Title Objection Notice in which to deliver written notice to the Developer
("Agency's Title Notice') of.the Agency's election to either: (i) remove the objectionable items prior to
the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the
Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the
Agency's activities. If the Agency notifies the Developer of its election to decline to remove any such
title exceptions objected to in the Developer's Title Objection Notice, the Developer shall have the right,
by.-written notice delivered to the Agency within five (5) business days after the Developer's receipt of
the Agency's Title Notice, to agree to either accept the Property subject to the objectionable items .
identified in the Developer's Title Objection Notice and the Developer shall take title to the Property at
the Close of Escrow subject to such objectionable title matters, or terminate this Agreement and cancel
the Escrow at no liability to either the Agency or the Developer. In the event that the Escrow is
terminated by the Developer under this Section 2.1.1, the Agency shall be responsible for paying for all
Escrow cancellation costs of the Escrow Holder.
2.1.2 Upon the issuance of any amendment or supplement to the Developer's
Preliminary Title Report for the Property that adds additional exceptions (including, but not limited to,
adding additional exceptions for matters shown on the Developer's Survey), the foregoing right of review
and approval shall also apply to said amendment or supplement (provided that the period for the
Developer to review such amendment or supplement shall be the later of the expiration of the Due
Diligence Period or ten (10) calendar days from receipt of the amendment or supplement) and Escrow
shall be deemed extended by the amount of time necessary to allow such review and approval in the time
and manner set forth in this Section 2:1.2.
2.2' Developer's Survev The Developer, at its sole cost and expense, may obtain a survey of
the Property ( "Developer's Survey'). The Developer's Survey shall be in a form acceptable to the Title
Company for the deletion of the standard survey exception in the Agency's Title Policy relating to
boundaries, without the addition of further exceptions, unless the same are acceptable to the Developer, in
its sole and absolute discretion. The Developer shall have until the end of the Due Diligence Period to
complete and examine the Developer's Survey and to notify the Agency in writing of any objections the
Developer has to the Developer's Survey ( "Developer's Survey Objection Notice'). The Agency shall
have a period of five (5) business days after receipt of the Developer's Survey Objection Notice in which
to deliver written notice to the Developer ("Agency's Survey Notice') of the Agency's election to either:
(i) agree to remove objectionable items identified in the Developer's Survey Objection Notice prior to the
Close of Escrow or (ii) decline to remove such items and terminate this Agreement and the Escrow. If the
Agency notifies the Developer of its intention not to remove objectionable items identified in the
Developer's Survey Objection Notice, the Developer shall have the right, by written notice delivered to
RVPUMVARNERM0715.1 -12-
the Agency within five (S) business days after the Developer's receipt of the Agency's Survey Notice, to
agree to accept the Property subject to the objectionable items, in which event, the Agency's election to
terminate this Agreement and cancel the Escrow shall be of no further effect, and the Developer shall
accept the Property at the Close of Escrow subject to such objectionable items identified in the
Developer's Survey Objection Notice. In the event that this Agreement is terminated by the Agency
under this Section 2.2, the Agency shall be responsible for paying for all Escrow cancellation costs of the
Escrow Holder.
2.3 Due Diligence Investigations During the Due Diligence Period, the Developer shall
have the right to examine, inspect and investigate the Property to deteimine,'in its sole and absolute
discretion, whether the conditions of the Property are acceptable to the Developer ( "Due Diligence
Investigations ").
2.3.1 Developer's Due Di ligence Investigation of the Pro
2.3.1.1 No Due Diligence Investigations of the Property shall unreasonably
disrupt any then existing use or occupancy of the Property or the business operations of the Agency. The
Developer shall be liable for any damage or injury to any person or property arising from the acts of the
Developer, its employees, agents or representatives during the course of any Due Diligence Investigations
on the Property, and the Developer shall indemnify, defend with counsel reasonably acceptable to the
Agency and hold harmless the Agency and its elected officials, officers, directors, attorneys, agents and
employees from any and all liens, claims, demands or liability arising from any Due Diligence
Investigations on the Property.
2.3.1.2 Prior to commencing any Due Diligence Investigations on the
Property, the •Developer shall deliver copies of policies of insurance to the Agency evidencing compliance
by the Developer with the insurance requirements of Section 4.1:19.
2.3.1.3 Due Diligence Investigations on the Property may be conducted by
the Developer and/or its agents during Normal Business Hours upon seventy -two (72) hours prior notice
to the Agency, which notice shall include a description of any investigation: work or tests to be conducted
by the Developer on the Property and identifying any consultants of the Developer that will be conducting
the investigations or testing.
2.3.1.4 The Developer shall complete all of its Due Diligence Investigations
within the Due Diligence Period and shall conduct all of its Due Diligence Investigations at its sole cost
and expense. The Developer shall rely solely and exclusively upon the results of its Due Diligence
Investigations of the Property with regard to any physical condition or state of the Property, including,
without limitation, geotechnical soil conditions, compliance with applicable laws pertaining to the use of
the Property by the Developer and any other matters relevant to the physical condition or suitability of the
Property for the Project and not on any express or implied representation or warranty of the Agency.
2.3.1.5 The Agency makes no representation or warranty to the Developer
relating to the condition or suitability of the Property for any intended use or development by the
Developer. Without limiting the foregoing, the Agency makes no representations or warranties as to
whether the Property presently comply with Environmental Laws or whether the Property contain any
Hazardous Substance, except as required by law. Furthermore, to the extent that the Agency has provided
the Developer with any environmental assessments or other information relating to the condition of the
Property, including information and reports prepared by or on behalf of Agency, the Agency makes no
representation or warranty with respect to the accuracy, completeness, methodology or content of any
such reports or information.
RVPUBVCVARNER1710715.1 -13-
2.3.1.6 Without limiting the foregoing, except to the extent covered by an
express representation or warranty of the Agency set forth in this Agreement, the Developer, on behalf of
itself, and its successors and assigns, as of the Closing, waives and releases City and the Agency and its
successors and assigns from any and all demands, claims, legal or administrative proceedings, losses,
liability, damages, penalties, fines, judgments, costs or expenses whatsoever (including, without
limitation, attorneys' fees and costs), whether direct or indirect, known or unknown, foreseen or
unforeseen, arising from or relating to the condition of the Property or any law or regulation applicable to
the Property, including the presence or alleged presence of harmful or Hazardous Substances in, under or
about the Property including, without limitation, any claims under or on account of (i) CERCLA and
similar statutes and any regulations promulgated thereunder or (ii) any other Environmental Laws. As of
the Closing, the Developer expressly waives any rights or benefits available to it with respect to the
foregoing release under any provision of applicable law that generally provides that a general release does
not extend to claims that the creditor does not know or suspect to exist in his or her favor at the time the
release is agreed to, which, if known to such creditor, would materially affect a settlement. By initialing
below, the Developer acknowledges that it fully understands the foregoing, and with this understanding,
nonetheless elects to and does assume all risk for claims known or unknown, described in this Section
2.3.1.6. Without limiting the generality of the foregoing, the undersigned acknowledges that it has been
advised by legal counsel of its own selection and is familiar with the provisions of California Civil Code
Section 1542, and hereby expressly waives any rights it may have under such law, as well as under any
other statutes or common law principles of similar effect to California Civil Code Section 1542, which
reads, as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS/HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM/HER, MUST HAVE MATERIALLY AFFECTED HISMER
SETTLEMENT WITH THE DEBTOR."
Initials of the Developer
2.3.1.7 Within the Due Diligence Period, the Developer shall complete all of
its Due Diligence Investigations of the Property and deliver a certificate signed by the authorized
representative(s) of the Developer to the Agency and Escrow Holder indicating either: (i) the Developer's
unconditional acceptance of the condition of the Property, or (ii) setting forth matters or exceptions
relating to the condition of the Property that the Developer is not able to accept or resolve to its
satisfaction during the Due Diligence Period ("Developer's Due Diligence Completion Certificate').
2.3.1.8 If the Developer does not unconditionally accept the condition of the
Property by the end of the Due Diligence Period as evidenced by the Developer's delivery of the
Developer's Due Diligence Completion Certificate, the Developer shall be deemed to have rejected the
condition of the Property and refused to accept conveyance of title to the Property. Upon such
occurrence, the Developer or the Agency shall have the right to cancel the Escrow and terminate this
Agreement, in the terminating Party's sole discretion, without liability to the other Party or any other
person, by delivery of a written notice of termination to the other Party and Escrow Holder. The
Developer shall accept all conditions of the Property, without any liability of the Agency whatsoever,
upon the Developer's acceptance of the condition of the Property.
2.3.1.9 The Due Diligence Completion Certificate indicating the Developer's
unconditional acceptance of the condition of the Property shall evidence the acceptance of the condition
of the Property by the Developer in its existing "AS IS," "WHERE IS" and `SUBJECT TO ALL
RVPUBT,VARNBRl710715.1 -14-
FAULTS" condition as of the last day of the Due Diligence Period. In its sole discretion, the Developer
may accept the Property in its "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition at
any time before the end of the Due Diligence Period.
2.4 . Proiect Entit
2.4.1 The Developer acknowledges and agrees that the Developer's use or
development of the Property shall be subject to the City's, zoning, building and land use regulations
(whether contained in ordinances, the municipal code of the City, conditions of approval or elsewhere)
(collectively, "Land Use Laws'). No action by the City with reference to this Agreement or any related
documents shall be deemed to constitute a waiver of any Land Use Laws regarding the Property, the
Developer, any successor -in- interest of the Developer or any successor -in- interest to the Property. Land
Use Laws may only be changed or waived by modification or variance approved by, the City. Under no
circumstances shall the Developer commence Construction of the Project on any portion of the Property
prior to the Close of Escrow. Any Project Entitlement, permit or other approval regarding the
Construction of the Project that must attach to the Property prior to the Close of Escrow shall be the
property of the Agency, without further action of either Party or any other person, but shall be transferred
to the Developer at the Close of Escrow. Notwithstanding the foregoing, the Developer and the Agency
hereby acknowledge that at the time the Developer attempts to obtain the Project Entitlements, permits
and other approvals, the Agency will be the fee simple owner of the Property. The Agency shall sign any
applications, or any other documents required by the City in connection with the obtaining of the Project
Entitlements or permit the Developer to sign such applications on behalf of the Agency, within a timely
manner.
2.4.2 The Developer shall be responsible for obtaining all Project Entitlements and
the Developer shall- submit all applications therefor and shall be responsible for the costs incurred in
connection with obtaining any such Project Entitlement, unless otherwise provided herein. The
Developer shall also be responsible for satisfying all conditions of approval and mitigation measures. The
Agency shall reasonably cooperate with the Developer's efforts in obtaining any Project Entitlements.
2.4.3 The Developer shall submit the location, purpose and extent of the sale of the
Property to the City under this Agreement to the planning agency of the City, and request that such
planning agency report on the transaction contemplated in this Agreement pursuant to the provisions of
California Government Code Section 65402(c).
2.4.4 The Developer shall notify the Agency immediately upon approval of any
Project Entitlements.
2.5 Purchase and Sale of the Property: Fair Market Value of Proverty: Purchase Price The
Agency shall sell the Properly to the Developer and the Developer shall purchase the Property from the
Agency pursuant to the terms and conditions of this Agreement. The Agency and the Developer
acknowledge and agree that the Fair Market Value of the Property as of the Effective Date of this
Agreement is One Million Six Hundred Thousand Dollars ($1,600,000) ("Fair Market Value The
Agency agrees to sell the Property to the Developer and the Developer agrees to purchase the Property
from the Agency for One Dollar ($1.00) ( "Purchase Price'), which is significantly less than the Fair
Market Value of the Property.
2.6 Opening of Escrow: Escrow Instructions The purchase and sale of the Property shall
take place through the Escrow to be administered by the Escrow Holder. The Developer shall. cause the
Escrow to be opened by delivering a fully executed copy of this Agreement with Escrow Holder
( "Opening of Escrow ") within ten (10) calendar days from the Effective Date. The Escrow Holder shall
RVPUSWVARNER1710715.1 -15-
promptly confirm in writing to both of the Parties the date of the Opening of Escrow, the Escrow number
and title insurance order numbers assigned to the Escrow. The Opening of Escrow shall occur no later
than May 31, 2006 ( "Opening Date'). If, for any reason, the Opening of Escrow has not occurred by the
Opening Date, then any Party not then in Default of this Agreement may terminate this Agreement,
without liability to the other Party or any other person for such termination and cancellation, by delivering
written notice of termination to the other Party. Without limiting the termination rights of the Parties
provided for in the previous sentence, if Escrow does not open on or before the Opening Date, and no
Party has yet exercised its contractual right to terminate this Agreement, the Opening of Escrow shall
occur as soon as reasonably possible
2.7 Escrow Instructions This Agreement constitutes the joint escrow instructions of the
Parties to the Escrow Holder for completion of the Escrow for the purchase and sale of the Property, as
contemplated by this Agreement. The Developer and the Agency shall execute such further Escrow
instructions consistent with the provisions of this Agreement as may be reasonably requested by Escrow
Holder. In the event of any conflict between the provisions of this Agreement and any further Escrow
instructions requested by Escrow Holder, the provisions of this Agreement shall control.
2.8 Conditions to Close of Escrow The conditions set forth in this Section 2.8 shall be
satisfied or waived by the respective benefited Party on or before the Escrow Closing Date or the Party
benefited by any unsatisfied condition shall not be required to proceed to close the Escrow. Where
"satisfaction of any of the foregoing conditions requires action by the Developer or by the Agency, each
Party shall use its reasonable best efforts, in good faith, and at its own cost, to satisfy such condition.
Where satisfaction of any of the conditions requires the approval of a Party, such approval shall be in
such Party's reasonable discretion. Either Party may waive any of the conditions set `Forth in this
Agreement, but any such waiver shall be effective only if contained in a writing signed by the waiving
Party and delivered to the Escrow Holder and the other Party.
2.8.1 Developer's Conditions Precedent The Developer's obligation to purchase
the Property from the Agency on the Escrow Closing Date shall be conditioned upon the fulfillment of the
following conditions precedent ( "Developer's Conditions Precedent'), all of which shall be satisfied (or
waived in writing by the Developer pursuant to Section 2.8) prior to the Close of Escrow:
2.8.1.1 The Developer delivers the Developer's Due Diligence Completion
Certificate to both the Agency and Escrow Holder indicating the Developer's unconditional acceptance of
the condition and conveyance of the Property from the Agency, subject only to the other terms and
conditions of this Agreement, prior to the expiration of the Due Diligence Period;
2.8.1.2 The Title Company is unconditionally committed to issue the
Developer's Title Policy to the Developer; and
2.10.
2.8.1.3 The Agency deposits all of the items into Escrow required by Section
2.8.2 Agency's Conditions Prece dent the Agency's obligation to sell the Property
to the Developer on the Escrow Closing Date shall be conditioned upon the fulfillment of the following
conditions precedent ( "Agency's Conditions Precedent "), all of which shall be satisfied (or waived in
writing pursuant to Section 2.8) prior to the Close of Escrow:
2.8.2.1 The Developer delivers the Developer's Due Diligence Completion
Certificate to both the Agency and Escrow Holder indicating the Developer's unconditional acceptance of
RVPUB\KVARNER \7107151 -16-
the condition and conveyance of the Property from the Agency, subject only to the other terms and
conditions of this Agreement, prior to the expiration of the Due Diligence Period;
2.8.2.2 The Developer deposits all of the items into Escrow required by
Section 2.9;'
2.8.2.3 The Title Company is unconditionally committed to issue the
Developer's Title Policy to the Developer,
2.8.2.4 The guarantor under the Completion Guarantee has executed and
delivered the Completion Guarantee to the Agency;
2.8.2.5 The Developer has provided the Agency with satisfactory evidence of
Lenders Financing Commitments to provide the Construction Loan and Permanent Loan in an aggregate
amount no less than Dollars
2.8.2.6 The Developer has provided the Agency with satisfactory evidence of
the insurance required by Section 4.1.19;
2.8.2.7 The Developer has obtained the Project Entitlements that are required
for the development of the Project on the Property;
2.8.2.8 The Developer performs all of its material obligations required to be
performed by the Developer under this Agreement prior to Close of Escrow; and
2.8.2.9 The representations, warranties and covenants of the Developer set
forth in this Agreement are true and correct in all material respects on the Effective Date and on the
Escrow Closing Date.
2.9 Developer's Escrow Deposits Following satisfaction or waiver of each of the
Developer's conditions precedent to Close of Escrow set forth in Section 2.8.1, the Developer shall
deposit the following items into Escrow and, concurrently, provide a copy of each such item to the
Agency, at least two (2) business days prior to. the Escrow Closing Date scheduled by Escrow Holder by
written notice delivered to each of the Parties:
2.9.1 The Development Promissory Note and the Agency Development Deed of
Trust, duly executed and acknowledged by the authorized representatives of the Developer.
2.9.2 An acknowledgment and acceptance of the Agency Quitclaim Deed, duly
executed and acknowledged by the authorized representatives of the Developer.
2.9.3 Two (2) duplicate original copies of the Closing Statement described in
Section 2.14.2, duly executed by the authorized representatives of the Developer.
2.9.4 A PCO Statement executed by the authorized representative(s) of the
Developer for the Property.
2.9.5 A FlRPTA affidavit executed by the authorized representative(s) of the
Developer, in the customary form provided by the Escrow Holder, California Franchise Tax Board Form
593 -W executed by the Developer.
RVPUB\KVARNER \710715.1 -17-
2.9.6 Evidence of the existence, organization and authority of the Developer
reasonably requested by Escrow Holder or Title Company.
2.9.7 A copy of all homeowner's association documents and materials, which have
been approved by the Agency in its reasonable discretion, required for the formation of the homeowner's
association necessary for the maintenance and operation of the common areas of the Project.
2.9.8 Any other documents, instruments or funds required to be delivered by the
Developer under the terms of Agreement or as otherwise reasonably requested by Escrow Holder or Title
Company in order to close Escrow that have not previously been delivered by the Developer.
2.10 Agency °s Escrow Deposits Following satisfaction or waiver of each of the Agency's
conditions precedent to .Close of Escrow set forth in Section 2.8.2, the Agency shall deposit the following
items into Escrow and, concurrently, provide a copy of each such item to the Developer, at least two (2)
business days prior to the Escrow Closing Date scheduled by Escrow Holder by written notice delivered
to each of the Parties:
2.10.1 The fast installment of the Agency Development Loan in an amount not to
exceed Dollars
2.10.2 The Agency Quitclaim Deed executed by the authorized representative of the
Agency.
2.10.3 A FIRPTA affidavit executed by the authorized representative of the Agency,
in the customary form provided by the Escrow Holder; California Franchise Tax Board Form 5934
executed by the Agency.
2.10.4 Two (2) duplicate original copies of the estimated Closing Statement
described in Section 2.14.2, duly executed by the authorized representative of the Agency.
2.10.5 Any other documents, instruments, funds and records required to be
delivered by the Agency under the terms of this Agreement or as otherwise reasonably requested by
Escrow Holder or Title Company in order to close Escrow that have not been previously delivered by the
Agency.
2.11 Closing Procedure When each of the Developer's Escrow deposits, as set forth in
Section 2.9, and each of the Agency's Escrow deposits, as set forth in Section 2.10, are deposited into
Escrow, Escrow Holder shall request confirmation in writing from both the Agency and the Developer
that each of their respective conditions to the Close of Escrow, as set forth in Section 18, are satisfied or
waived. Upon Escrow Holder's receipt of written confirmation from both the Agency and the Developer
that each of their respective conditions to the Close of Escrow are satisfied or waived, Escrow Holder
shall "Close Escrow" by doing all of the following:
2.11.1 Recordation of Documents File the Agency Quitclaim Deed and the Agency
Development Deed of Trust with the Office of the Recorder of Los Angeles County, California, for
recordation in the order set forth in Section 2.13;
2.11.2 Distribution of Recorded Documents Distribute each recorded document to
the Party or other person designated for such distribution in Section 2.13;
RVPUBBCVARNER \710715.1 -18- -
2.11.3 PCO Statements File the PCO Statements with the Office of the Recorder of
Los Angeles County, California;
2.11.4 '. FIRPTA Affidavits File the FIRPTA Affidavits with the United States
Internal Revenue Service;
2.11.5 Forms 593 File Form 593 -W with the California Franchise Tax Board;
2.11.6 Title Policy Obtain and deliver to the Developer the Developer's Title
Policy issued by the Title Company; and
2.11.7 Purchase Price: First Installment of the Agency Develooment Loan Deliver
the Purchase Price to the Agency and the first installment of the Agency Development Loan to the
Developer, less the Developer's share of Escrow closing costs and any other charges to the account of the
Developer.
2.12 Close of Escrow Close of Escrow shall occur following satisfaction of all conditions
precedent therefor set forth in Section 2.8 and elsewhere in this Agreement have occurred. If the Close of
Escrow has not occurred by the Outside Closing Date, then any Party not then in default of this
Agreement may terminate this Agreement and cancel the Escrow, without liability to the other Party or
any other person for such termination and cancellation, by delivering written notice of termination to the
other Party and Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section 2.16.
2.13 Recordation and Distribution of Documents Escrow Holder shall cause the following
documents to be recorded in the official records of the Recorder of Los Angeles County, California, in the
following order at Close of Escrow: (i) the Agency Quitclaim Deed, (ii) the Agency Development Deed
of Trust, (iii) this Agreement, and (iv) any other documents to be recorded through Escrow upon the joint
instructions of the Parties. Immediately after Closing, Escrow Holder shall deliver: (i) a certified copy of
the Agency Quitclaim Deed to the Developer and a copy to the Agency, each showing all recording
information, (ii) the original of this Agreement to the Agency and a copy to the Developer, (iii) the
original of the Completion Guarantee to the Agency, (iv) a certified copy of the Agency Development
Deed of Trust to the Agency and a copy to the Developer, each showing all recording information, (v) the
original of the Agency Development Promissory Note to the Agency and a copy to the Developer, and
(vi) the original of any other documents recorded at the Close of Escrow to the Party or other person
designated in the joint escrow instructions of the Parties for such recordation and a copy of each such
document to the other Party or Parties, each showing all recording information.
2.14 Escrow Costs The Agency shall pay one -half ( %:) of the customary and reasonable
escrow fees that may be charged by the Escrow Holder in connection with the Close of Escrow. The
Developer shall pay the cost of the premiums for the Developer's Title Policy, together with one -half ( %:)
of the customary and reasonable escrow fees that may be charged by the Escrow Holder in connection
with the Close of Escrow. The Developer shall pay the additional cost of the Developer's Survey, any the
Developer Title Policy endorsements requested by the Developer, additional ALTA extended policy
costs, and any and all survey and subdivision hosts associated with the development of the Project on the
Property 'in compliance with the California Subdivision Map Act and the City's municipal code.
2.14.1 Any other Escrow - related transaction expenses or Escrow closing costs
incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the
Parties to this Agreement in the manner customary in Los Angeles County, California.
RVPUBVNARNER \710715.1 -19-
2.14.2 No later than five (5) business days prior to the Closing Date, the Escrow
Holder shall prepare and deliver for approval by the Developer and the Agency the Closing Statement on
the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all
closing costs, pay -off, amounts for the release and reconveyance of all non -tax liens secured by the
Property and protations made pursuant to this Agreement, if any. The Developer and the Agency shall
assist the Escrow Holder in determining the amount of any and all proration.
2.15 Escrow Cancellation Charges If the Escrow fails to close due to the Agency's material
Default under this Agreement, the Agency shall pay all ordinary and reasonable Escrow and title order
cancellation charges. If the Escrow fails to close due to the Developer's material Default under this
Agreement, the Developer shall pay all ordinary and reasonable Escrow and title order cancellation
charges. If the Escrow fails to close:for any reason other than'the material Default of either the Developer
or the Agency, the Developer and the Agency shall each pay one -half (1 /2) of any ordinary and
reasonable Escrow and title order cancellation charges.
2.16 Escrow Cancellation If this Agreement is terminated pursuant to a contractual right
granted to a Party in this Agreement to terminate this Agreement (other than due to the default of another
Party), the Parties shall do each of the following:
2.16.1 Cancellation Instructions The Parties shall, within three (3) business days of
Escrow Holder's written request, execute any reasonable Escrow cancellation instructions requested by
Escrow Holder;
2.16.2 Return of Funds and Documents Within ten (10) business days of receipt by
the Parties of a settlement statement of Escrow and title order cancellation charges from Escrow Holder.
(i) the Developer or Escrow Holder shall return to the Agency any documents previously delivered by the
Agency to the Developer or Escrow Holder, (ii) the Agency or Escrow Holder shall return to the
Developer all documents previously delivered by the Developer to the Agency or Escrow Holder, and (iii)
Escrow Holder shall return to the Developer any funds deposited in Escrow, less the Developer's share of
customary and reasonable Escrow and title order cancellation charges, if any.
2.17 Breach of Article II: Liauidated Damages
2.17.1 Breach of Article II By the Agency: Liquidated Damages IN THE EVENT
THAT ESCROW FAILS TO CLOSE DUE TO A MATERIAL BREACH BY AGENCY OF ITS
OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES
THAT DEVELOPER WILL INCUR BY REASON OF SUCH MATERIAL BREACH ARE AND WILL
BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. DEVELOPER AND
AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT DEVELOPER'S DAMAGES
WOULD BE IN THE EVENT OF SUCH A BREACH BY AGENCY, HAVE AGREED THAT SUCH
DAMAGES SHALL BE A LIQUIDATED AMOUNT OF . DOLLARS
($ ) . SUCH LIQUIDATED DAMAGES AMOUNT SHALL BE PAID TO
DEVELOPER IN THE EVENT OF MATERIAL BREACH BY AGENCY RESULTING IN THE
TERMINATION OF THIS AGREEMENT AND CANCELLATION OF THE ESCROW, AS
LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE DEVELOPER'S SOLE AND
EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH
MATERIAL BREACH BY AGENCY, ALL OTHER REMEDIES (INCLUDING THE REMEDY OF
SPECIFIC PERFORMANCE AND THE RIGHT TO RECORD A NOTICE OF PENDENCY OF
ACTION AGAINST THE PROPERTY) BEING HEREBY EXPRESSLY WAIVED.
RVPUBVCVARNER \710715.1 -20-
Initials of the Developer Initials of the Agency
2.17.2 Breach of Article II By the Developer. Liquidated Damages IN THE
EVENT THAT ESCROW FAILS TO CLOSE DUE TO `A MATERIAL BREACH BY DEVELOPER OF
ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE
DAMAGES THAT AGENCY WILL INCUR BY REASON OF SUCH MATERIAL, BREACH ARE
AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. DEVELOPER
AND AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT AGENCY S DAMAGES
WOULD BE IN THE EVENT OF SUCH A MATERIAL BREACH BY DEVELOPER, HAVE
AGREED THAT SUCH DAMAGES SHALL BE, A LIQUIDATED AMOUNT OF
DOLLARS SUCH LIQUIDATED DAMAGES AMOUNT
SHALL BE PAID TO- AGENCY IN THE EVENT OF A MATERIAL.BREACH BY DEVELOPER AS
LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE AGENCY'S SOLE AND EXCLUSIVE
REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH MATERIAL BREACH
BY DEVELOPER, ALL OTHER REMEDIES BEING HEREBY EXPRESSLY WANED.
ANY'T'HING IN THIS SECTION 2.17.2 TO THE CONTRARY
NOTWITHSTANDING, THIS SECTION 2.17.2 SHALL NOT APPLY TO THE REMEDIES
AVAILABLE TO THE AGENCY UPON THE DEVELOPER'S BREACH OF ITS OBLIGATIONS
UNDER THE AGENCY PROMISSORY NOTE AND AGENCY DEED OF TRUST, WHICH SHALL
CONTINUE TO BE ENFORCEABLE. IN ACCORDANCE. WITH THEIR TERMS
NOTWITHSTANDING ANY LIQUIDATED DAMAGES PAID TO THE AGENCY AS
HEREINABOVE DESCRIBED.
Initials of the Developer Initials of the Agency
2.18 Report to IRS After the Close of Escrow and prior'to the last date on which such report
is required to be filed with Internal Revenue. Service, if such report is required pursuant to Section
6045(e) of the Internal Revenue Code, Escrow Holder shall report the gross proceeds of the purchase and
sale of the Property to the Internal Revenue Service on Form 1099 -B, W -9 or such other form(s) as may
be specified by the Internal Revenue Service pursuant to Section 6045(e). Concurrently with the filing of
such reporting form with IRS, Escrow Holder shall deliver a copy of the filed form to the Agency and the
Developer.
2.19 Condemnation In the event that; prior to the Close of Escrow, any governmental entity,
other than the Agency, shall commence any eminent domain or similar proceedings to take any portion of
the Property, following notice of such proceedings, the Developer shall have the option either: (i) to elect
not to acquire the Property and terminate this Agreement; or (ii) the Developer may complete the
acquisition of the Property, in which case the Developer shall be entitled to all the proceeds of such taking
to which the Agency would otherwise have been entitled; provided however, that the Agency agrees that
it shall not settle or compromise the proceedings before the Close of Escrow without the Developer's
prior written consent, which consent will not be unreasonably withheld or delayed. The Developer shall
confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty
(30) calendar days of its receipt of notice of the proceedings.
2.20 Maintenance of Properly The Agency shall, prior to the Close of Escrow, continue to
maintain the Property in substantially the same condition as of the Effective Date of this Agreement and
shall not further encumber, or suffer to be encumbered, the Property with any liens or other non - statutory
encumbrances, nor shall the Agency enter into any contracts with respect to the Property which will
RVPUB\KVARNER \710715.1 -21-
survive the Close of Escrow without the Developer's prior written consent, which may be given or
conditioned in the Developer's sole and absolute discretion.
ARTICLE III
FINANCING OF PROJECT
3.1 Proiect Costs The Developer has provided a detailed scope of work for the Construction
of the Project in the Scope of Development which is attached to this Agreement as Exhibit C . The Project
Costs shall be subject to change from time to time in accordance with this-Agreement, subject to prior
written approval by the Agency (which approval shall not be unreasonably withheld). The Executive
Director is hereby authorized to act on behalf of the Agency to approve any revisions to the Project Costs
which do not in any way increase the Agency's financial obligations hereunder.
3.2 Proiect Budget and Financing Plan The Developer has submitted to the Agency the
Project Budget and a Financing. Plan based on the best, good faith estimate of the Developer of the Project
Costs and sources and uses of funds to pay for the estimated Project Costs. The Parties recognize that
events and circumstances not currently contemplated, some of which are outside of the control of the
Parties, could result in changes in the Project Costs, necessitating changes in the Project Budget and
Financing Plan. To the extent that there are changes to the Project Budget and Financing Plan between
the date of this Agreement and the Closing, the Developer shall submit a revised Project Budget and
Financing Plan to the Agency for the Agency's review and approval as to the sufficiency of the Financing'
Commitments to meet revised Project Budget requirements not later than ten (10) business days prior to
Closing.
3.3
3.4 Development Financing
3.4.1 Agency'Develonment Loan Subject to the terms and conditions of this
Agreement, the Agency Development Promissory Note and the Agency Development Deed of Trust, the
Agency shall pay to or for the benefit of the Developer amounts constituting the Agency Development
Loan in an amount not to exceed Seven Hundred Sixty Thousand Dollars ($760,000) in order to assist the
Developer in developing the Project on the Property, as specified in the Project Budget
3.4.1.1 Use of Agency Development Loan . The Developer shall use the
Agency Development Loan as set forth in this Agreement solely for the Project Costs associated with
completing the Project and in accordance with the Project Budget or to pay down the Construction Loan
or the Permanent Loan. The Developer shall not be entitled to use any portion of the Agency
Development Loan to reimburse the Developer for any internal management, administrative or overhead
expenses or for any purpose other than paying for expenses directly attributable to the development of the
Project on the Property or paying down the Construction Loan or the Permanent Loan. .
3.4.1.2 Disbursement of Agency Development Loan
3.4.1.2.1 First Installment The first installment of the Agency
Development Loan in an amount not to exceed Dollars ($ ) ("First
hstallment") shall be distributed to the Developer at the Close of Escrow as provided in Article H.
3.4.1.2.2 Remaining Balance of Agency Development Loan The
total amount of the Agency Development Loan less the First Installment shall be referred to in this
Agreement as the "Remaining Balance." The Developer shall open an escrow account with an escrow
RVPUBVCVARNBER \710715.1 -22-
agent reasonable acceptable to the Agency through which the Developer shall receive and withdraw any
and all proceeds of the Construction Loan and the Remaining Balance of the Agency Development Loan.
The Construction Lender and the Agency shall disburse the proceeds of the Construction Loan and the
Remaining Balance of the Agency Development Loan in the following order: (i) first, all of the
Developer's funds on deposit with the Construction Lender, (ii) second, fifty percent (50 %) of the
proceeds of the Remaining Balance of the Agency Development Loan (iii) third, fifty percent (50 %) of
the proceeds of the Construction Loan; (iv) fourth, an additional' thirty percent (30 %) of the proceeds of
the Remaining Balance of the Agency Development Loan; (v) fifth, an additional thirty percent (30 %) of
the proceeds of the Construction Loan; (vi) sixth, an additional ten percent (10 of the'proceeds of the
Remaining Balance of the Agency Development Loan; and (vii) seventh, an additional ten percent (10 %)
of the proceeds of the Constructi on Loan:
3.4.1.3 Repayment of Agency Develonment Loan The Developer shall repay
the Agency Development Loan over a period of five (5) years with no interest accruing on the balance of
the Agency Development Loan pursuant to the terms and conditions of the 'Agency Development
Promissory Note attached to this Agreement as Exhibit I . The Agency Development Promissory Note
shall be secured by the Agency Development Deed of Trust attached to this Agreement as Exhibit J and
shall be subordinate only to the First Mortgage Financing. As provide in the Agency Development
Promissory Note the Developer's repayment of the Agency Development Loan shall be callable in full on
demand, including accrued interest, upon Developer's failure to receive permanent certificates of
occupancy for the entire Project within the time period set forth in the Schedule of Performance.
3.4.2 Construction Loan The proceeds of the Construction Loan shall be used to
defray-, the costs of developing the Project on the Property, as specified in the Project Budget. During
development of the Project on the Property, a portion of the cost of development shall be funded by a
conventional Construction Loan, to be made by an institutional Lender acceptable to Agency in the
amount of approximately Dollars ($ ) . The Lender for
the Construction Loan shall be an institutional Lender subject to the approval of the Agency, which may
be conditioned or withheld in the Agency's reasonable discretion. The terms and provisions of the
Construction Loan shall be similar to ordinary and customary provisions of Lenders on Loans similar to
the Construction Loan. Documentation for the Construction Loan shall be subject to the review and
approval of the Agency, which shall not be unreasonably withheld or delayed. The Construction Loan
shall provide for normal and customary disbursement controls, the payment' of normal and customary fees
and expenses fora Construction Loan of similar size and purpose, and for the payment of other expenses
contained in the Project Budget. The Agency's Executive Director shall approve or disapprove the terms
and provisions and documentation for the Construction Loan within five (5) business days of receipt of
such documentation. if the Agency shall disapprove any such financing or Constriction Loan documents,
it shall do so by written notice to the Developer stating reasons for such disapproval. In such event, the
Developer shall promptly obtain and submit to the Agency new or revised Construction Loan documents,
as appropriate. The Agency shall approve or disapprove of such new or revised Construction Loan
documents in the same manner and within the same times established in this section for the approval or
disapproval of the Construction Loan documents as initially submitted to Agency.
3.4.3 Permanent Loan The Developer shall obtain for the Agency's review and
approval, which may be withheld or conditioned in Agency's reasonable discretion, a conditional forward
loan commitment for the Permanent Loan in an amount of approximately Dollars
($ ) from a Lender reasonably acceptable to the Agency. Upon completion
of the development of the Project on the Property, a Permanent Loan shall be obtained from the Lender
which provides the original conditional Loan commitment or from another Lender reasonably acceptable
to Agency, on the best terms then commercially available. The Net Proceeds of the Permanent Loan shall
be used to pay off the Construction Loan.
RVPU3\KVARNER \710715.1 -23-
3.5 Refinancine The Developer shall be permitted to refinance (a "Refinancing ") the First
Mortgage Financing with the express written consent of the Agency.
3.6 No Subordination of Affordability Covenants and Related Encumbrance The Agency
has found," concurrently with its approval of this Agreement, that an economically feasible method of
financing for the development of the Project, without the subordination of this Agreement, excluding the
Regulatory Agreement, is not reasonably available. The Agency consequently agrees that this Agreement
(excluding the Regulatory Agreement), the Agency Development Promissory Note, the Agency
Development Deed of Trust, (all of the foregoing, "Subordinate Instruments "), may be made junior and
subordinate to the deeds of trust and other documents required in connection with the Construction Loan
and Permanent Loan for the Project established and obtained pursuant to and in compliance with the
provisions of this Agreement. The Executive Director is hereby authorized to execute such subordination
agreements and/or other documents as may reasonably necessary to evidence subordination, without
further authorization from the Agency, provided that such subordination agreements contain written
commitments which the Executive Director finds are reasonably designed to protect the Agency's
investment in the event of default, such as one or more of the following: (i) the right of the Agency to
cure a default on a senior loan prior to foreclosure; (ii) the right of the Agency to negotiate with a Lender
after notice of default from the Lender and prior to foreclosure; (iii) • an agreement that if, prior to
foreclosure on a Loan, the Agency takes title to the Property and cures the default on the Loan, the Lender
will not exercise any right it may have to accelerate the Loan by reason of transfer of title to the Agency;
and' (iv) a right of the Agency to reacquire the Property from the Developer at any time after a material
default on a Loan. Nothing set forth herein shall be construed to require the Agency to subordinate any of
the Subordinate Instruments in favor of any person holding any interest in the Property other than the
Lender for the Constructign Loan, the Lender for the Permanent Loan, and any other person claiming
under-or through any of the foregoing.
3.2.1 No Other Agency Financial Assistance The sole source of funds for the
payment of the proceeds of the Agency Development Loan pursuant to this Agreement shall be
Affordable Housing Funds. No funds of the Agency other than Affordable Housing Funds shall be
committed, pledged, obligated or encumbered by the terms of this Agreement. The Agency does not
currently, have adequate funds available to pay for the costs to construct or operate the Project in excess
of the Agency Development Loan and the Agency shall be under no obligation to contribute any other
financial assistance to the construction or operation of the Project other than the Agency Development
Loan.
ARTICLE IV
DEVELOPMENT OF THE PROJECT
4.1 Development of Proieect and Proper[v It is the intent of the Parties that the Property be
developed as follows: the construction on the Property of the Project comprised of six (6) owner-
occupied multi- family New Homes reserved for occupancy by Qualified Households during the Qualified
Residence Period, together with all on and off site improvements such as streets, curbs, sidewalks, storm
drains, gutter, utilities, etc (e.g., the public improvements necessary for the development of the Property).
The Project is more particularly described in the Scope of Development.
4.1.1 The City's zoning ordinance and the City's building requirements shall be
applicable to the use and development of the Property pursuant to this Agreement. The Developer
acknowledges that any change in the plans for development of the Project on the Property as set forth in
the Scope of Development shall be subject to the City's zoning ordinance and building requirements. No
action by the Agency or the City with reference to this Agreement or related documents shall be deemed'
RVPUB\KVARNER \710715.1 -24.
to constitute a waiver of any lawful City requirements which are applicable to the Property or to the
Developer, any successor in interest of the Developer or any successor in •interest pertaining to the
Property, except by modification or variance approved by the City consistent with this Agreement.
4.1.2 The Project shall be developed and completed in conformance with the
approved Scope of Development and any. and all other plans, specifications and similar development
documents required by this Agreement, except for such changes as may be mutually agreed upon in
writing by and between the Developer and the Agency and the mutual approval of any such change shall
not be unreasonably conditioned, withheld or delayed. The approval by the City 'shall be deemed to be
approved by the Agency of the preliminary and final construction plans for the Project, if such plans
approved by the City are reasonably consistent with the Scope of Development. .
4.1.3 The approval of the Scope of Development by the Agency shall not be
binding upon the City Council of the City or the planning commission of the City with respect to any
regulatory approvals relating to the development of the Project and/or the public improvements necessary
for the development of the Property as may be required by such other bodies. If any material change of
the Scope of Development as previously approved by the Agency shall be required by another
government official, agency, department or bureau having jurisdiction over the development of the
Property, the Developer and the Agency shall cooperate in'efforts to obtain waivers of such revisions, or
to obtain approvals of any such revisions which have been made by the Developer and have thereafter
been approved by the Agency. The Agency shall not unreasonably withhold or delay approval of such
revisions to the Scope of Development; provided however that no such change may result in the reduction
of the number of New Homes that shall be constructed by the Developer and reserved for occupancy by
Qualified Households.
4.1.4 Notwithstanding any provision to the contrary in this Agreement, the
Developer agrees to obtain all necessary permits, follow all necessary processes and pay necessary
fees relating to the completion of the Project on the Property, unless otherwise provided herein.
4.1.5 The Developer agrees to accept and comply fully with any and all lawful
conditions of approval applicable to all permits and other governmental actions affecting the development
of the Property and consistent with this Agreement.
4.1.6 The Developer shall prepare and submit to the City all development plans,
construction drawings and related documents for the development of the Project on the Property,
including the public improvements necessary for the development of the Property, consistent with the
Scope of Development. The development plans, construction drawings and related documents submitted
by the Developer to the City shall be in the form of final drawings, plans and specifications. Such final
drawings, plans and specifications are hereby defined as those which contain sufficient detail necessary to
obtain a building permit from the City.
4.1.7 During the preparation of all drawings, plans, specifications and related
documents in connection with the development of the Project on the Property, including the public
improvements necessary for the development of the Property, the Developer shall provide to the Agency
regular progress reports to advise the Agency of the status of the preparation by the Developer, and the
submission to and review by the City of the drawings, plans, specifications and related documents. The
Developer shall communicate and consult with the Agency as frequently as is necessary to ensure that any
such drawings, plans, specifications and related documents submitted by the Developer to the City are
being processed in a timely fashion.
RVPUB\KVARNER \710715.1 -25-
4.1.8 The Agency shall cooperate with and shall assist the Developer in order for
the Developer to obtain the approval of any and all drawings, plans, specifications and related documents
submitted by the Developer to the City consistent with the Schedule of Performance. Any failure by the
City to approve any such plans or to issue necessary permits for the development of the Project on the
Property within the period provided in the Schedule of Performance shall constitute an enforced delay
hereunder, and the Schedule of Performance shall be extended by that period of time beyond the period
described in the Schedule of Performance in which the City approves said documents; provided, however,
that in the event that the City disapproves of any of such documents, the Developer shall within thirty
(30) calendar days after receipt of such disapproval revise and resubmit such documents in accordance
with the City's requirements and in such form and substance so as to obtain the City's approval thereof.
4.1.9 The Agency shall approve any modified or revised drawings, plans,
specifications and related documents to which reference is made in this Agreement as long as such
modified or revised drawings, plans, specifications and related documents are generally consistent with
the Scope of Development and any other documents related to the development of the Project on the
Property which have been approved by the Agency. Upon any disapproval of such modified or revised
drawings, plans, specifications or related documents, the Agency shall state in writing the reasons for
such disapproval, the Developer, upon receipt of notice of any disapproval, shall promptly revise such
disapproved portions of the drawings, plans, specifications or related documents in a manner that
addresses the reasons for disapproval and reasonably meets the requirements of the Agency in order to
obtain the Agency's approval thereof. the Developer shall resubmit such revised drawings, plans,
specifications and related documents to the Agency as soon as possible after its receipt of the notice of
disapproval and, in any event, no later than thirty (30) calendar days thereafter. the Agency shall approve
or disapprove such revised drawings, plans, specifications and related documents in the same manner and
within the same time as provided for approval or disapproval of drawings, plans, specifications and
related documents initially submitted to the Agency, and if no specific time for approval is specified then
the 'Agency shall so approve or disapprove the proposed modifications or revisions promptly upon the
written request of the Developer.
4.1.10 If the Developer desires to make any material change in the final
construction drawings, plans, specifications and related documents after their approval by the Agency
and/or the City, the Developer shall submit the proposed change in writing to the Agency and/or the City
for approval. The Agency shall notify the Developer of approval or disapproval thereof in writing within
fifteen (15) calendar days after submission to the Agency. This fifteen (15) calendar day period may be
extended by mutual consent of the Developer and the Agency. Any such change shall, in any event, be
deemed to be approved by the Agency unless rejected, in whole or in part, by written notice thereof
submitted by the Agency to the Developer, setting forth in detail the reasons therefore, and such rejection
shall be made within said fifteen (15) calendar day period unless extended as permitted herein. The
Agency shall use its best efforts to cause the City to review and approve or disapprove any such change.
4.1.11 The Developer, upon receipt of a notice of disapproval by the Agency and/or
the City, may revise such portions of the proposed change in the drawings, plans, specifications and
related documents as are rejected and shall thereafter resubmit such revisions to the Agency and/or the
City for approval in the manner provided in Section 4.1.10.
4.1.12 The Developer shall have the right during the course of construction to make
changes in construction concerning the interior design of the New Homes and minor field changes with
respect to the New Homes, and to make minor field changes to the public improvements necessary for the
development of the Project on the Property without seeking the approval of the Agency; provided,
however, that such changes do not affect the type of use to be conducted within all or any portion of a
New Home or the ability of the City to accept the completion of the public improvements necessary for
RVPUBVCVARNER \710715.1 -26-
the development of the Project on the Property; and further provided that the City has approved any such
minor field change to either a New Home or the public improvements necessary, for the development of
the Project on the Property in accordance with the standards and practices of the City Building
Department and/or City Public Works Department, as applicable. The term "minor field changes" shall
be defined as those changes from the approved final construction drawings, plans and specifications
which have no substantial effect on the improvements and are made in order to expedite the work of
construction in response to field conditions. Nothing contained in this Section 4.1.12 shall be deemed to
constitute a waiver of or change in the City's Building Code or Public Works Department requirements
governing such minor field changes' or in any and all approvals by the City otherwise required for such
minor field changes.
4.1:13 Except as otherwise specified in this Agreement, the cost of constructing the
Project on the Property and all other improvements on the Property shall be paid for by the Developer.
4.1.14 Except as otherwise provided in this Agreement, the Developer shall at its
expense, cause to be prepared, and shall pay any and all fees pertaining to the review and approval thereof
by the City, all required construction, planning and other documents reasonably required by governmental
bodies pertinent to the development of the Project on the Property hereunder including, but not limited to
the public improvements necessary for the development of the Project on. the Property and to the
specifications, drawings, plans, maps, permit applications, land use applications, zoning applications and
design review documents for the New Homes.
4.1.15 Except as otherwise provided in this Agreement, the Developer shall pay for
any and all costs; includingbut not limited to the costs of design, construction, relocation and securing of
permits for utility improvements and connections, which may be: required in developing the Property.
The Developer shall obtain any and all necessary approvals prior to the commencement of applicable
portions of said construction, and the Developer shall take reasonable precautions to ensure the safety and
stability of surrounding properties during said construction.
4.1.16 The Developer shall begin and complete all construction and development
and undertake all obligations and responsibilities of the Developer within the times specified in the
Schedule of Performance, or within such reasonable extensions of such times as may be granted by the
Agency or as otherwise provided for in this Agreement. The Schedule of Performance shall be subject to
revision from time to time as mutually agreed upon in writing by and between the Developer and the
Agency. Any and all deadlines for performance by the Parties shall be extended for any time attributable
to delays which are not the fault of the performing Party and are caused by the other Party, other than
periods for review and approval or reasonable disapprovals of plans, drawings and related documents,
specifications or applications for permits as provided in this Agreement.
4.1.17 Prior to and during the period of construction of the Project on the Property
and the public improvements necessary for the development of the Property, the Developer shall submit
to the Agency written progress reports when and as reasonably requested by the Agency, but in no event
more frequently than every four (4) weeks. The reports shall be in such form and detail as may
reasonably be required by the Agency. In addition, the Developer shall attend the Agency meetings when
requested to do so by the Agency staff.
4.1.18 Prior to the commencement of Due Diligence Investigations pursuant to
Section 2.3.1.2 or of any construction on the Property, the Developer shall furnish, or shall cause to be
furnished, to the Agency duplicate originals or appropriate certificates:of public indemnity and liability
insurance in the amount of Two Million Dollars ($2,000,000) combined single limit, naming the Agency
and the City as additional insureds. Said insurance shall cover comprehensive general liability including,
RVPUB\KVARNERV 10715.1 -27-
but not Iimited to, contractual liability; acts of subcontractors; premises - operations; explosion, collapse
and underground hazards, if applicable; broad form property damage, and personal injury including libel,
slander and false arrest. The Developer agrees to have its general liability coverage endorsed so that all
coverage limits required by this Agreement are available separately for each and every location at which
the Developer conducts operations of any type on behalf of the Agency. The Developer warrants that
these limits will not be reduced except by losses attributable to those specific locations and not by losses
from any other operations of the Agency. In addition, the Developer shall provide to the Agency adequate
proof of comprehensive automobile liability insurance covering owned, non -owned and hired vehicles,
combined single limit in the amount of Two Million Dollars ($2,000,000) each occurrence; and proof of
workers' compensation insurance. Any and all insurance policies required hereunder shall be obtained
from insurance companies admitted in Californa and rated at least B +: XII in Best's Insurance Guide. All
said insurance policies shall provide that they may not be canceled unless the Agency and the City receive
written notice of cancellation at least thirty (30) calendar days prior to the effective date of cancellation.
Any and all insurance obtained by the Developer hereunder shall be primary to any and all insurance
which the Agency and/or City may otherwise carry, including self insurance, which for all purposes of
this Agreement shall be separate and apart from the requirements of this Agreement. Any insurance
policies governing the Property as obtained by the Agency shall not be transferred from the Agency to the
Developer. Any and all insurance required hereunder shall be maintained and kept in force until the
Agency has issued the Certificate of Completion for the Project.
4.1.19 The Developer for itself and its successors and assigns agrees that in the
construction of the Project on the Property and the public improvements necessary for the development of
the Property, the Developer shall not discriminate against any employee or applicant for employment
becdilse of sex, marital status, race, color, religion, creed, national origin, or ancestry. Notwithstanding
the foregoing, the Developer shall use best efforts to offer employment opportunities to local residents
and will seek to acquire goods and services from local vendors.
4.1.20 The Developer shall carry out its construction of the Project on the Property
and the public improvements necessary for the development of the Property in conformity with all
applicable laws, including all applicable California labor standards and requirements and with respect to
the development of the Property. The Developer further agrees and acknowledges that it shall pay no less
than the prevailing per diem rate of wages to all laborers providing labor to the work of improvements on
the Project, as determined by the Director of the California Department of Industrial Relations. The
Developer further agrees to keep all necessary related records in accordance with State of California law.
The Developer agrees to pass through all prevailing wage requirements to any and all subcontractors
hired by the Developer if and when applicable. The Developer hereby agrees to indemnify, defend and
hold the Agency harmless from and against any and all liability arising out of or related to the Developer's
failure to comply with any and' all applicable prevailing wage requirements or to require its
subcontractors to comply with any and all applicable prevailing wage requirements.
4.1.21 The Developer shall, at its own expense, secure or shall cause to be secured,
any and all pen which may be required for such construction, development or work by the City or any
other governmental agency having jurisdiction thereof. the Agency shall cooperate in good faith with the
Developer in the Developer's efforts to obtain from the City or any other appropriate governmental
agency any and all such permits including, but not limited to, permits for flags and signs on the Property
and, upon completion of applicable portions of the development of the Project on the Property,
certificates of occupancy.
4.1.22 Officers, employees, agents or representatives of the Agency and the City
.shall have the right of reasonable access to the Project and the Property, without the payment of charges
or fees, during Normal Business Hours during the.period of construction in order to inspect the work
RVPUB\KVARNER \710715.1 -28-
being performed in constructing the Project on the Property and to ensure that the Developer is complying
with this Agreement. Such officers, employees, agents or representatives of the Agency and/or the City
shall be those persons who are so identified by the Executive Director. Any and all officers, employees;
agents or representatives of the Agency and the City who enter the Property pursuant hereto shall identify
themselves at the Project office upon their entrance on to the Property and shall at all times be
accompanied by a representative of the Developer while on the Property; provided, however, that the
Developer shall Make a representative of the Developer available for this purpose at all times during
Normal Business Hours upon reasonable notice from the Agency. The Agency shall indemnify, defend
and hold the Developer harrnless from injury, property damage or liability arising out of the exercise by
the Agency and/or the City of this right of access, other than injury, property damage or liability relating
to the negligence of the Developer or its officers, agents or employees.
4.1.23 The Agency shall inspect relevant portions of the construction of the Project
on the Property prior to issuing any written statements reflecting adversely on the Developer's compliance
with the terms and conditions of this Agreement pertaining to development of the Project on the Property;
provided however, that the Developer has not objected to such an inspection by the Agency or otherwise
prevented the Agency from conducting such an inspection.
4.2 Property Taxes and Assessments The Developer shall pay prior to the delinquency all
real property taxes and assessments assessed and levied on or against the Property subsequent to the Close
of Escrow. Nothing herein contained shall be deemed to prohibit the Developer from contesting the
validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the
Developer in respect thereto, or for claiming exemptions available under California Revenue and
y ' Taxation Code Section 214 (g),
4.3 Prohibition Against Transfer
4.3.1 Except as expressly provided in Section 4.4, prior to, the recordation of the
Certificate of Completion with respect to development of the Project on the Property, the Developer shall
not, without prior written approval of the Agency, which may not be unreasonably withheld, delayed or
conditioned, or except as permitted by this Agreement, (i) assign or attempt to assign this Agreement or
any right herein or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment
of the whole or any part of the Property or the improvements thereon or permit to be placed on any of the
Property any unauthorized mortgage, Deed of Trust,, deed of trust, encumbrance or Lien. This prohibition
shall not apply to the reasonable grant by the Developer of utility easements or permits to facilitate the
development of the Property.
4.3.2 In the absence of specific written agreement or approval by the Agency, no
unauthorized sale, transfer, conveyance, lease, leaseback or assignment of the Property shall be deemed to
relieve the Developer or any other party from any obligations under this Agreement.
4.4 Security Financing: Right of Holders
4.4.1 Notwithstanding any provision of Section 4.3 to the contrary, any Lien
required for any reasonable method of financing the construction and improvement of the Property is
permitted before the recordation of any Certificate of Completion. The Developer shall notify the Agency
in writing in advance of any Lien if the Developer proposes to enter into the same before the recordation
of any Certificate of Completion. The Developer shall not enter into any such Lien without first
providing written notice to the Agency. The following restrictions apply to any Lien: (i) it must be given
to a responsible financial or lending institution including, without : limitation,- banks, savings and loan
institutions, insurance companies, real estate investment trusts, pension programs and the like, or other
RVPUEVCVARNERM07151 -29-
acceptable persons or entities for the purpose of financing the construction of the Project on the Property,
and (ii) any Loan made in connection with the Lien must contain customary construction lender
disbursement controls.
4.4.2 The Developer shall promptly notify the Agency of any Lien that has been
created or attached thereto prior to completion of the construction of the Project on the Property whether
by voluntary act of the Developer or otherwise; provided, however, that no notice of filing of preliminary
notices or mechanic's liens need be given by the Developer to the Agency prior to suit being filed to
foreclose such mechanic's lien.
4.4.3 The holder of any mortgage, deed of trust or other security interest
authorized by this Agreement shall in no manner be obligated by the provisions of this Agreement to
construct the Project on the Property or to guarantee such construction or completion. Nothing in this
Agreement shall be deemed to permit or authorize any such holder to devote the Property to any other
use, or to construct any other improvement thereon, except those uses or improvements provided for or
authorized by this Agreement.
4.4.4 Whenever the Agency shall deliver any notice or demand to the Developer
with respect to any breach or Default by the Developer in the completion of construction of the Project on
the Property, or any breach or Default of any other obligations which, if not cured by the Developer,
entitle the Agency to terminate this Agreement or exercise its right to re-enter the Property, or a portion
thereof, the Agency shall at the same time deliver to each holder of record of any Lien authorized by this
Agreement copy of such notice or demand. Each such holder shall (insofar as the rights of the Agency
are concerned) Dave the right, at its option, to commence the cure or remedy of any such Default and to
diligently and continuously proceed with such cure or remedy, withni` sixty (60) calendar days after the
receipt of the notice; and to add the cost thereof to the security interest debt and the lien of its security
interest. If the Default can only be remedied or cured by such holder upon obtaining possession, such
holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and
shall remedy or cure such default within sixty (60) calendar days after obtaining possession; provided that
in the case of a Default which cannot with diligence be remedied or cured, or the remedy or cure of which
cannot be..commenced, within such sixty (60) calendar day period, such holder shall have such additional
time as is reasonably necessary to remedy or cure such Default of the Developer, not to exceed one
hundred eighty (180) calendar days. Nothing contained in this Agreement shall be deemed to permit or
authorize such holder to undertake or continue the construction or completion of the Project on the
Property (beyond the extent necessary to conserve or protect the improvements or construction already
made) without first having expressly assumed the Developer's obligations by written agreement
satisfactory to the Agency. The holder in that event must agree to complete, in the manner provided in
this Agreement, the improvements to which the Lien relates and must submit evidence satisfactory to the
Agency that it has the qualifications and financial responsibility necessary to perform such obligations.
Any such holder completing such improvements in accordance herewith shall be entitled, upon written
request made to the Agency, to be issued the Certificate of Completion by the Agency.
4.4.5 In any case where, one hundred eighty (180) calendar days after Default by
the Developer under this Agreement, the holder of any such Lien has not exercised the option to construct
the applicable portions of the Project on the Property, or has exercised the option but has not proceeded
diligently and continuously with the completion of the construction of the Project on the Property, then in
such event, the Agency may purchase the Lien by payment to the holder of the amount of the unpaid debt,
including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable
to the holder by the Developer under the loan documents between holder and the Developer. If the
ownership of the Property has vested in the holder, the Agency; if it so desires, shall be entitled to a
RVPUMNARNERM0715.1 -30-
conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of
the following: ' '
4.4.5.1 The unpaid Lien debt, including principal, accrued and unpaid
interest, late charges, costs, expenses and other amounts payable to the holder by the Developer under the
loan documents between the holder and the Developer, at the time title became vested in the holder (less
all appropriate credits, including those resulting from collection and 'application of rentals and other
income received during foreclosure proceedings).
4.4.5.2 All expenses, if any, incurred by the holder with respect to
foreclosure.
4.4.5.3 The net expenses, if any (exclusive of general overhead), incurred by
the holder as a direct result of the subsequent ownership or management of the Property, such as
insurance premiums and real estate taxes.
4,4.5.4 The cost of any improvements made by such holder.
4.4.5.5 An amount equivalent to the interest that would have accrued on the
aggregate on such amounts had all such. amounts become part of the Lien had the Lien continued in
existence to the date of payment by the Agency.
4.4.6 In the event of a default or breach by the Developer of a Lien with respect to
the PrZperty (or any portion thereof) prior to the issuance.of a Certificate of Completion for the Project,
and the holder has not exercised its option to complete the development, the Agency may cure the default
but is under no obligation to do so prior to completion of any foreclosure. In such event, the Agency shall
be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in
curing the default. The Agency shall also be deemed to have a Lien of the Agency as may arise under this
Section 4.4.6 upon the Property (or any portion thereof) to the extent of such costs and disbursements.
Any such Lien shall be subordinate and subject to mortgages, deeds of trust or other security instruments
executed by the Developer for the purpose of obtaining the funds to construct and improve the Property as
authorized herein.
4.5 Right of the Agency to Satisfy Other Liens on the Property'after Conveyance of Title
After the conveyance of title to the Property by the Agency to the Developer and prior to the recordation
of the Certificate of Completion, and after the Developer has had a reasonable time to challenge, cure or
satisfy any unauthorized Liens on the Property, the Agency shall after sixty (60) calendar, days prior
written notice to the Developer have the right to satisfy any such Liens; provided, however, that nothing
in this Agreement shall require the Developer to pay or make provisions for the payment of any tax,
assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount
thereof, and so long as such delay in payment shall not subject the Property or any portion thereof, to
forfeiture or sale.
4.6 Certificate•.of Completion
4.6.1 Following the written request therefor by the Developer and the completion
of construction of the Project on the Property, excluding minor building punch -list items to be completed
by the Developer upon any New Home in the Project, the Agency shall furnish the Developer with a
Certificate of Completion for the Project, substantially in the form set forth in Exhibit F, and such
Certificate of Completion shall be recorded after the Developer's completion of construction of the
Project on the Property if requested by the Developer. Notwithstanding any provision set forth herein to
RVPUB\KVARNHR \710715.1 -31-
the contrary, the completion of construction of the Project on the Property shall include the completion of
construction of all of the New Homes on the Property and any related improvements necessary to support
or which meet the requirements applicable to occupancy of each New Home comprising the Project.
4.6.2 The Agency shall not unreasonably withhold the issuance of a Certificate of
Completion. A Certificate of Completion shall be, and shall so state, that it is a conclusive determination
of satisfactory completion of all of the obligations of this Agreement with respect to construction of the
Project. After the recordation of the Certificate of Completion, any party thereafter leasing or otherwise
acquiring any interest in a New Home shall not (because of such lease or acquisition) incur any obligation
or liability under this Agreement, except that such party shall be bound by any covenants contained in the
Agency Quitclaim Deed or other instrument of transfer, which the Agency Quitclaim Deed or other
instrument of transfer shall include the provisions of Section 5.2 and 5.3 of this Agreement.
4.6.3 The Certificate of Completion shall be in such form as to permit it to be
recorded in the Recorder's Office of Los Angeles County, California.
4.6.4 If the Agency refuses or fails to furnish a Certificate of Completion after
written request from the Developer, the Agency shall, within fifteen (15) calendar days of the written
request or within three (3) calendar days after the next regular meeting of the Agency, whichever date
occurs later, provide to the Developer a written statement setting forth the reasons with respect to the
Agency's refusal or failure to famish a Certificate of Completion. The statement shall also contain the
Agency's opinion of the action the Developer must take to obtain a Certificate of Completion. If the
reason for such refusal is. confined to the immediate unavailability of specific items or materials for
construction or landscapin�at a price reasonably acceptable to the Developer or other minor building
"punch -list" items, the Agency may issue its Certificate of Completion upon the posting of a bond or
irrevocable letter of credit, reasonably approved as to form and substance by the Agency Counsel and
obtained by the Developer in an amount representing a fair value of the work not yet completed as
reasonably determined by the Agency. If the Agency shall have failed to provide such written statement
within the foregoing period, the Developer shall be deemed conclusively and without further action of the
Agency to have satisfied the requirements of this Agreement with respect to the construction of the
Project on the Property as if a Certificate of Completion had been issued therefore.
4.6.5 A Certificate of Completion shall not constitute evidence of compliance with
or satisfaction of any obligation of the Developer to any holder of a Lien securing money loaned to
finance the construction of the Project on the Property, or any part of the Project. A Certificate of
Completion shall not be deemed to constitute a notice of completion as referred to in California Civil
Code Section 3093, nor shall it act to terminate the continuing covenants or conditions subsequent
contained in this Agreement, the Agency Quitclaim Deed, or a Regulatory Agreement.
4.7 Marketing Application and Initial Owner Selection Plan The Developer shall comply
with the Marketing Application and Initial Owner Selection Plan attached as Exhibit N, and with any
amendment thereto which are imposed by any state or federal agency. The Marketing, Application and
Initial Owner Selection Plan is incorporated herein by this reference.
ARTICLE V
USE OF THE PROPERTY
5.1 Proiect Restricted to Qualified Households The Developer shall record a duly executed
Regulatory Agreement against each New Home concurrently with the initial conveyance of such New
Home to a Qualified Household. As more particularly provided in the Regulatory Agreement, the
RVPUB\KVARNER \710715.1 -32-
Developer covenants and agrees for itself, its successors, and assigns that each New Home in the Project
remain affordable to Qualified Households for a period of forty-five (45) years following the close of
escrow for the initial conveyance of such New Home to a Qualified Household. The covenants of this
Section 5.1 shall run with the land.
5.2 Obligation to Refrain from Discrimination the Developer covenants and agrees for
itself; its successors, its assigns and every successor in interest to the Property'or any part thereof, that
there shall be no discrimination against or segregation of any person, or group of persons, on account of
sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer; use, occupancy, tenure or enjoyment of the Property; nor shall the Developer, itself or any person
claiming. under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection; location, number, use or occupancy of tenants, lessees,
subtenants, sublessee or vendees of the Property.
5.3 Form of Nondiscrimination and Nonseereeation Clauses the Developer "covenants and
agrees for itself, its successors, its assigns, and every successor in interest to the Property, or any part
thereof, that the Developer, such successors and such assigns shall refrain from restricting the sale, lease,
sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part thereof) on the
basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All
deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
54 In Deeds "The grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital
status; national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through
it, establish or permit any such practice or practices of dis or "segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land."
5.3.2 In Leases "The Lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, and this lease is made and accepted upon and
subject to the following conditions: That there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin,
or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation' with reference to the selection, location,
number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein
leased."
5.3.3 In Contracts "There shall be no discrimination against or segregation of any
person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or
ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein
transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or
parties and any subcontracting party or parties, or other transferees under the instrument.
RVPUB\KVARNBR \710715.1 -33-
5.4 Effect and Duration of Covenants The covenants established against discrimination shall
remain in effect in perpetuity. The covenants respecting use, occupancy and maintenance of the Project
shall remain in effect for a period of forty-five (45) years following the close of escrow for the initial
conveyance of a New Home to a Qualified Household. All of the covenants set forth in Section 5.1
through 5.3 shall run with the land and shall constitute equitable servitudes thereon, and shall, without
regard to technical classification and designation; be binding for the benefit and in favor of the Agency,
its successors and assigns and the City.
5.4.1 The Agency may enforce the terms and provisions of this Agreement and the
covenants running with the land for and in its own rights and for the purposes of protecting the interests
of the Community. the Agency shall have the right, if such covenants are breached, to exercise all rights
and remedies and to maintain any actions or suits at law or in equity or such other proper proceedings to
enforce the curing of such breaches to which it or any other beneficiary of such covenants may be
entitled, including, without limitation, to specific performance, damages and injunctive relief. The
Agency shall have the right to assign all of its rights and benefits hereunder to the City.
ARTICLE VI
DEFAULTS, REMEDIES AND TERMINATION
6.1 Defaults
6.1.1 Subject to the extensions of time set forth in Section 7.5 hereof, failure or
delay by either Party to perform any te?ih or provision of this Agreement shall constitute a default under
this Agreement; provided, however, that if a Party otherwise in default commences to cuie; correct or
remedy. such default within thirty (30) calendar days after receipt of written notice specifying such default
and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where
any time limits for the.completion of such cure, correction or remedy are specifically set forth in this
Agreement, then within said time limits), such Party shall not be deemed to be in default hereunder.
6.1.2 The injured Party shall give written notice of default to the Party in default,
specifying the default complained of by the non - defaulting Party. Delay in giving such notice shall not
constitute a waiver of any default nor shall it change the time of default.
6.1.3 Any failure or delays by either Party in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies.
Delays by either Party in asserting any of its rights and remedies shall not deprive either Party of its right
to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or
enforce any such rights or remedies.
6.2 Legal Actions
6.2.1 In addition to any other rights or remedies, either Party may, institute legal
action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other
remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the
Superior Court of Los Angeles County, California, or in any other appropriate court in Los Angeles
County, California.
6.2.1.1 The laws of California shall govern the interpretation and
enforcement of this Agreement,
RVPUB\KVARNER \710715.1 -34-
6.2.1.2 In the event that any legal action is commenced by the Developer
against the Agency, service of process on the Agency shall be made by personal service upon the
Executive Director or Chairperson of the Agency, or in such other manner as may be provided by law.
6.2.1.3 In the event that any legal action is commenced by the Agency
against the Developer, service of process on the Developer shall be made by personal service on the
Executive Director or the Chairperson of the Board (or such other agent for service of process and at such
address as may be specified in written notice to the Agency), or in such other manner as may be provided
by law, and shall be valid made in or outside of California.
6.3 Rights and Remedies are Cumulative Except" with respect to any rights and remedies
expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are
cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude
the exercise by it, at the same or different times, of any other rights or remedies for the same Aefault or
any other default by the other Party.
6.4 Damages If either Party defaults with regard to any provision of this Agreement
following the Close of Escrow, the non - defaulting Party shall serve written notice of such default upon
the defaulting Party. If the 'defaulting Party does not diligently commence to cure such default within
thirty (30) calendar days after service of the notice of default and promptly complete the cure of such
default within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may
otherwise be specified in this Agreement for any specific default), after the service of written notice of
such default, and subject to the of Section 7. 10, the defaulting Party shall be liable to the other
Party for damages caused by such default.
6.5 Specific Performance If the Developer defaults under any of the provisions or covenants
set forth in Article V of this Agreement, the Agency shall serve written notice of such default upon the
Developer. If the Developer does not commence to cure the default and diligently and continuously
proceeds with such cure within thirty (30) calendar days after service of the notice of default, and such
default is not cured within a reasonable time thereafter, the Agency, at its option and in addition to any
other remedies available to it for such default, may institute an action for specific performance of the
terms of Article V. '
6.6 Agency Rights of Termination Following Close of Escrow
6.6.1 Subject to written notice of default which shall specify the Developer's
default and the action required to commence.cure of same and upon thirty (30) calendar days notice to the
Developer of the Agency's intent to terminate this Agreement pursuant to this Section 6.6, the Agency at
its option may terminate this Agreement following the Close of Escrow, if the Developer is in breach of
this Agreement, assigns or attempts to assign this Agreement, or any right therein, or attempts to make
any total or partial sale, lease or leaseback, transfer or conveyance of the whole or any part of the
Property or the improvements to be developed thereon in violation of the terms of this Agreement, and the
Developer does not correct such violation within thirty (30) calendar days from the date of receipt of such
notice.
6.6.2 Subject to "written notice of default, which shall specify the Developer's
default and the action required to commence cure of same and upon thirty (30) calendar days notice to the
Developer of the Agency's intent to terminate this Agreement pursuant to this Section 6.6, following the
Close of Escrow, the Agency at its option may terminate this Agreement if the Developer: (i) does not
within the time limits set forth in this Agreement or as specifically provided in the Schedule of
Performance, subject to extensions authorized by this Agreement due to force majeure or otherwise,
RVPUBUCVARNER \710715.1 -35-
submit development plans, Construction drawings and related documents acceptable to the Planning
Division and Building Division of the City for plan check purposes and in order to obtain building
permits for the improvement of the Property, together with applicable fees therefor prepared to the
minimum acceptable standards as required by the Planning Department and Building Division of the City
for commencement of formal review of such documents and as required by this Agreement, or (ii) does
not carry out its other responsibilities under this Agreement or in accordance with any modification or
variance, precise plan, design review and other environmental or governmental approvals and such
default is not cured or the Developer does not commence and diligently and continuously proceed with
such cure within thirty (30) calendar days after the date of receipt of written demand therefore from the
Agency.
6.7 Right to Reenter. Repossess and Revest
6.7.1 Following the Close of Escrow, the Agency shall, upon thirty (30) calendar
days notice to the Developer which notice shall specify this Section 6.7, have the right, at its option, to re-
enter and take possession of all or any portion of the Property, together with all improvements thereon,
and to terminate and revest in the Agency the estate conveyed to the Developer hereunder, if after
conveyance of title and prior to the recordation of the Certificate of Completion, the Developer (or its
successors in interest) shall:
6.7.1.1 Fail to commence Construction of all or any portion of the Project as
required by this Agreement for a period of ninety (90) calendar days after the time specified for such
commencement in the Schedule of Performance; provided that the Developer shall not have obtained an
extension or postponement to which the Developer maybe entitled pursuant to Section 7.5 hereof; or
6.7.1.2 Abandon or substantially suspend Construction of all or any portion
of the Project as required by this Agreement for a period of ninety (90) calendar days after written notice
of such - abandonment or suspension from the Agency; provided that the Developer shall not have obtained
an extension or postponement to which the Developer may be entitled to pursuant to Section 7.5 hereof;
or
6.7.1.3 Assign or attempt to assign this Agreement, or any rights herein, or
transfer, or suffer any involuntary transfer, of the Property or any part thereof, in violation of this
Agreement, and such violation shall not have been cured within fifteen (15) calendar days after the date of
receipt of written notice thereof from the Agency to the Developer,
6.7.1.4 Fail to complete Construction of the entirety of the Project as required
by this Agreement for a period of ninety (90) calendar days after the time specified for completion in the
Schedule of Performance; provided that the Developer shall not have obtained an extension or
postponement to which the Developer may be entitled pursuant to Section 7.5 hereof; or
6.7.2 The thirty (30) calendar day written notice specified in Section 6.7.1 shall
specify that the Agency proposes to take action pursuant to this Section and shall specify which of the
Developer's obligations set forth in Section 6.7.1 have been breached. The Agency shall proceed with its
remedy set forth herein only in the event that the Developer continues in Default of said obligation(s) for
a period of thirty (30) calendar days following such notice or, upon commencing to cure such Default,
fails to diligently and continuously prosecute said cure to satisfactory conclusion.
6.7.3 The right of the Agency to terminate this Agreement and reenter, repossess
and revest in title in the Property shall be subject and subordinate to, shall be limited by and shall not
defeat, render invalid or limit:
RVPUB\KVARNBR \710715.1 -36-
6.7.3.1 Any mortgage, deed of trust or other security interest permitted by
this Agreement;
6.7.3.2 Any rights or interests provided in this Agreement for the protection
of the holders of such mortgages, deeds of trust or other security interests;
6.7.3.3 Any leases, declarations of covenants, conditions and restrictions,
easement agreements or other recorded documents previously approved or authorized by the Agency and
applicable to the Property.
6.7.4 Upon the revesting in the Agency of title to the Property, or any part thereof,
as provided in this Section 6, the Agency shall, pursuant to its responsibilities under California law, use
its best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner
as the Agency shall find feasible and consistent with the objectives of such law, to a qualified and
responsible party or parties (as determined by the Agency) who will assume the obligations of making or
completing the improvements, or such other improvements in their stead as shall be satisfactory to the
Agency and in accordance with the uses specified for the Property, or any part thereof. Upon such resale
of the Property, or any part thereof, the proceeds thereof shall be applied:
6.7.4.1 First, to make any payment made or necessary to be made to
discharge or prevent from attaching or being made any subsequent Liens (defined in the Agreement) due
to obligations incurred with respect to the making or completion of the agreed improvements or any part
thereof on the Property or any portion thereof; next to reimburse the Agency for all actual costs and
expenses incurred by the Agency, including but not limited to customary and reasonable fees,or salaries
to third party personnel engaged in such action (but excluding the Agency's general overhead expense), in
connection with the recapture, management and resale of the Property or any portion thereof, all taxes,
assessments and water and sewer charges paid by the Agency with respect to the Property or any portion
thereof; any amounts otherwise owing to the Agency by the Developer and its successor transferee; and
6.7.4.2 Second, to the extent that any and all funds which are proceeds from
such resale are thereafter available, to reimburse the Developer, or its successor transferee the costs
incurred for the development of the Property; or applicable part thereof, or for the Construction of the
improvements thereon including, but not limited to; costs of carry, taxes and items set forth in the
Developer's cost statement which shall be submitted to and approved by the Agency.
6.7.4.3 Any balance remaining after the foregoing application of proceeds
shall be retained by the Agency.
GyfflY [elm *I 1 I
GENERAL PROVISIONS
7.1 Notices. Demands and Communications Between the Parties
7.1.1 Any and all notices, demands or communications submitted by any Party to
another Party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by
messenger for immediate personal delivery, or by registered or certified United States mail, postage
prepaid, return receipt requested, to the principal office of the Agency and the Developer, as applicable,
as designated in Section 1.2 hereof. Such written notices, demands and communications may be sent in
the same manner to such other addresses as either Party may from time to time designate as provided in
this Section 7.1.1. Any such notice, demand or communication shall be deemed to be received by the
RVPUB\RVARNER1710715.1 -37-
addressee, regardless of whether or when any return receipt is received by the sender or the date set forth
on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or
two (2) calendar days after it is placed in the United States mail as heretofore provided.
7.1.2 In addition to the submission of notices, demands or communications to the
Parties as set forth above, copies of all notices shall also be delivered by facsimile as follows:
to the Developer.
with copy to:
Trademark Development Company, LLC
to the Agency:
Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91066
Attention: Executive Director Facsimile:
(626) 446 -5729
with copy to:
Best Best and Krieger LLP
3750 University Avenue
Suite 400
Riverside, California 92501
Attention: Kevin K. Randolph
Facsimile: (951) 686 -3083
7.2 Conflict of Interest No member, official, employee or agent of the Developer shall have
any personal interest, direct or indirect, in this Agreement, or in the development of the Project on
Property, nor shall any such member, official, employee or agent of the Developer participate in any
decision relating to the Agreement. The Parties represent and wan-ant that they do not have knowledge of
any such conflict of interest.
7.3 Warranty Against Payment of Consideration for Agreement The Developer warrants
that it has not paid or given, and will not pay or give, any third party any money or, other consideration for
obtaining this Agreement. Third parties, for the purposes of this Section 7.3, shall not include persons to
whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants,
engineers, architects and the like when such fees are considered necessary by the Developer.
7.4 Nonliability of the Acv Officials and Employees No member, official or employee
of the Agency shall be personally liable to the Developer, or any successor in interest, in the event of any
default or breach by the Agency or for any amount which may become due to the Developer or to its
successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful
acts of such member, officer or employee.
7.5 Enforced.Delav: Extension of Time of Performance In addition to specific provisions of
this Agreement, performance by either Party hereunder shall not be deemed to be in default, or considered
to be a default, where delays or defaults are due to the force majeure events of war, acts of terrorism,
insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public
enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather - caused
delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or
supplier, which are not attributable to the fault of the Party claiming an extension of time to prepare or
RVPUB\KVARNER \710715.1 -38-
acts or failure to act of any public or governmental agency or entity (provided that acts or failure to act of
the City or the Agency shall not extend the time for the Agency to act hereunder except for delays
associated with a lawsuit or injunction including but without limitation to lawsuits pertaining to the
approval of the Agreement, and the like). An extension of time for any such force majeure cause shall be
for the period of the enforced delay and shall commence to run from the date of occurrence of the delay;
provided however, that the Parry which claims the existence of the delay has first provided the other Party
with written notice of the occurrence of the delay within ten (10) calendar days of the commencement of
such occurrence of delay. The inability of the Developer to obtain a satisfactory commitment from a
construction Lender for the improvement of the Property or to satisfy any other condition of this
Agreement relating to the redevelopment of the Property shall not be deemed to be a force majeure event
or otherwise provide grounds for the assertion of the existence of a delay under this Section 7.5. The
Parties hereto expressly acknowledge and agree that changes in either general economic conditions or
changes in the economic assumptions of any of them which may have provided a basis for entering into
this Agreement and which occur at any time after the execution of this Agreement, are not force majeure
events and do not provide, any Party with grounds for asserting the existence of a delay in the performance
of any covenant or undertaking which may arise under this Agreement. Each Party expressly assumes the
risk that changes in general economic conditions or changes in such economic assumptions relating to the
terms and covenants of this Agreement could impose an inconvenience or hardship on the continued
performance of such Party under this Agreement, but that such inconvenience or hardship is not a force
majeure event and does not excuse the performance by such Party of its obligations under this Agreement.
7.6 Insvection of Books and Records The Agency shall have the right at all reasonable times
at the Agency's cost and expense to inspeot books and records of the Developer pertaining to the
`Property, and/or the development of the Project on the Property, as necessary for the Agency, in its,_
reasonable discretion, to enforce its rights under this Agreement. Matters discovered by the Agency shall
not be disclosed to third parties unless required by law or unless otherwise resulting from or related to the
pursuit of any remedies or the assertion of any rights of the Agency hereunder.
7.7 Avvrovals Except as otherwise provided in this Agreement, approvals required of the
Agency or the Developer, or any officers, agents or employees of either the Agency or the Developer,
shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in
the Schedule of Performance or, if no time is given, within a reasonable time.
7.8 Real Estate Commissions The Agency shall not be liable for any real estate
commissions, brokerage fees or fmder fees which may arise from or relate to this Agreement.
7.9 Indemnificati on . The Developer agrees to indemnify and hold the City and the Agency,
and their officers, employees and agents, harmless from and against all damages, judgments, costs,
expenses and fees arising from or related to any act or omission of the Developer in performing its
obligations hereunder. The Agency agrees to indemnify and hold the Developer and its officers,
employees and agents, harmless from and against all damages, judgments, costs, expenses and fees
arising from or related to any act or omission of the Agency in performing its obligations hereunder.
7.10 Release of the Developer from Liability Notwithstanding any provision herein to the
contrary, the Developer shall be' relieved of any and all liability for the obligations of the Developer
hereunder with regard to the development of the Property' when a Certificate' of Completion has been
issued by the Agency hereunder with respect thereto, other than any covenants and obligations provided
by the Regulatory Agreement or the Agency Quitclaim Deed. The provisions of this Section 7.10 shall
extend to any permitted successor of the Developer. Nothing contained in this Section 7.10 shall be
deemed to impair any security interest held by the Agency in the Project or the Property or to preclude the
RVPUB\KVARNER \710715.1 -39-
Agency from foreclosing thereon or from realizing upon any security encumbered in favor of the Agency
in the event of a default by the Developer.
7.11 Attorneys' Fees If either Party hereto files any action or brings any action or proceeding
against the other arising out of this Agreement, or is made a parry to any action or proceeding brought by
the Escrow Holder or a third party, then as between the Developer and the Agency, the prevailing Party
shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys'
fees and costs of experts as fixed by the Court, in such action or proceeding or in a separate action or
proceeding brought to recover such attorneys' fees. For the purposes hereof the words 'reasonable
attorneys' fees" mean and include, in the case of the Agency, salaries and expenses of the lawyers
employed by the Agency (allocated on an hourly basis) who may provide legal services to the Agency in
connection with the representation of the Agency in any such matter.
7.12 Effect. This Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns.
7.13 Further Assurances The Parties agree to reasonably consider such additional acti ons or
the execution of such other documents as may be reasonably necessary or convenient to the financing,
development, and operation of the Project, although nothing in this Section 7.13 shall be deemed a
representation, guarantee or commitment by either Party to take any action or execute any document.
Without limiting the generality of the foregoing, the Agency agrees that it will not unreasonably withhold
its approval of any amendment to this Agreement requested by any Lender providing financing for the
Project in accordance with the terms of the Financing Plan and Project Budget.
ARTICLE VIII
ENTIRE AGREEMENT, WAIVERS AND AMENDMENT
8.1 Entire Agreement This Agreement integrates all of the terms and conditions mentioned
herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties
with respect to all or any portion of the Property and the development thereof.
8.2 No Merger With Ouitclaim Deed None of the terms, covenants, agreements or
conditions set forth in this Agreement shall be deemed to be merged with the Agency Quitclaim Deed,
and this Agreement shall continue in full force and effect before and after such conveyance.
8.3 Waivers and Amendments All waivers of the provisions of this Agreement and all
amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the
Developer.
8.3.1 Authority of Executive Director The Executive Director of the Agency is
authorized to sign on his or her own authority amendments to this Agreement which are of routine or
technical nature, including minor adjustments not exceeding in the aggregate sixty (60) calendar days to
the Schedule of Performance.
ARTICLE IX
AND RECORDATION OF AGREEMENT
9.1 Execution of Agreement
RVPUMVARNERM0715.1 -40-
9.1.1 Counterparts This Agreement shall be executed in three . (3) triplicate
originals each of which is deemed to be an original. This Agreement includes forty three (43) pages
(including signature pages) and fourteen (14) Exhibits, which constitute the entire understanding and
Agreement of the Parties.
9.1.2 Acceptance of Agreement By the Agency Following its execution by the
Developer and prompt delivery thereafter to the Agency, this Agreement shall be subject to the review
and approval by the Governing Board of the Agency in its sole and absolute discretion within forty-five
(45) calendar days after the date of signature by the Developer. In the event that the Agency.has not
approved, executed and delivered this Agreement to the Developer within the foregoing period, then the
Parties shall be mutually released from any further duties or obligations hereunder.
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the dates
set forth below.
[Signatures on Following Pages]
Z-
RVPUBUCVARNER\710715.1 -41-
SIGNATURE PAGE
TO
AFFORDABLE HOUSING AGREEMENT
Date:
ATTEST:
AGENCY:
THE REDEVELOPMENT AGENCY OF THE
CTI'Y OF ARCADIA,
a public body, corporate and politic
William R. Kelly
Executive Director
By: - Z>
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
Lin
Agency Counsel
RVPUB\KVARNER \710715.1 -42-
SIGNATURE PAGE
TO
AFFORDABLE HOUSING AGREEMENT
DEVELOPER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
By:
Its:
Date: By:
Its:
Z-
RVPUB\KVARNERV 10715.1 -43-
EXHIBIT C
TO
AFFORDABLE HOUSING AGREEMENT
Project Scope of Development
As part of the Project and pursuant to the terms and conditions of the Agreement, the Developer
shall: (i) acquire the Property, and (ii) construct on the Property six (6) owner - occupied multi - family
residences which shall be reserved for occupancy, for a period of at least forty-five (45) years, by families
whose household earnings do not exceed one hundred twenty percent (120 %) of the Los Angeles County
median income.
The Developer shall construct three (3) two- bedroom New Homes approximately thirteen
hundred (1,300) square feet in size and three (3) three- bedroom New Homes approximately fifteen
hundred (1,500) square feet in size. Every New Home shall contain two (2) bathrooms.
[May wish to add detail showing elevations, architecture, etc.]
'r
R V PUB\KV ARNER \710715.1
The Developer to submit to the Agency an ALTA lender's title insurance May 23, 2006
policy in the amount of the fair market value of the Property
The Developer to submit to the Agency Proof of Insurance in accordance with May 23, 2006
Section 4.1.19 of the Agreement
The Developer shall open Escrow with Escrow Holder. May 25, 2006
The Developer shall submit tentative tract map application to the Planning May 30, 2006
Division. Jbis process can run concurrently with the plan check process —
developer assumes all potential risks)
The Developer shall submit Construction documents for plan check to the May 30, 2006
Building Division. (This process can run concurrently with the tentative tract
map process — developer assumes all potential risks)
The City to provide the Developer with corrections to plans from plan checker No later than 28 days
from first submittal. from submittal to the
City
The Developer to submit revised Construction documents to the Building No later than 14 days
Division for second plan check. from receipt of City
comments.
The City to provide the Developer with final corrections to plans from second No later than 28 days
submittal. from re- submittal to the
City.
The Planning Commission to consider the tentative tract map for the Project by July 25, 2006
public hearing.
The Developer to submit final plans for permits and pay fees at the Building No later than 14 days
Division. upon receipt of City's
final comments.
The Developer to comply with Section 2.8.1 of the Agreement entitled
Develgper's Conditions Precedent
The Developer to commence Construction of the Project on the Property
The Developer to submit to the Agency the final tract map for the Project.
Prior to the close of
escrow.
No later than 90 days
after conveyance of the
Property to the
Developer.
No later than 60 days
before request for
Certificate of
Completion
'z>
RV P UB\KV ARN ER \710715.1
The Agency Board shall consider final tract map for the Project.
Completion of Construction of the Project on the Property.
No later than 30 days
before request for
Certificate of
Completion
Within 12 months after
commencement of
Construction of the
Property.
R V PUB\KV ARNER \710715.1
shall remain affordable to Qualified Households for a period of forty-five (45) years following the close
of escrow for the initial sale of the New Home to a Qualified Household.
Section 4. Obligation to Refrain from Discrimination The .Grantee covenants and agrees
for itself, its successors, its assigns and every successor -in- interest to the Property, or any part thereof,
that there shall be no discrimination against or segregation of any person, or group of persons, on account
of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Grantee, itself or any person
claiming under or through it establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-
tenants, sub - lessees or vendees of the Property.
Section 5. Form of Non - Discrimination and Non - Segregation Clauses The Grantee
covenants and agrees for itself, its successors, its assigns, and every successor -in- interest to the Property,
or any part thereof, that the Grantee, such successors and such assigns shall refrain from restricting the
sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part
thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any
person. All deeds, leases or contracts pertaining to the Property shall contain or be subject to
substantially the following non - discrimination or non - segregation covenants:
5.1 In deeds "The Grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that there shall be no discrimination against
or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment df the premises herein conveyed,.nor shall the grantee or any person claiming under or through
it, establish or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sub - tenants, sub - lessee, or vendees in
the premises herein conveyed. The foregoing covenants shall run with the land."
5.2 In leases "The Lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease is made and accepted upon
and subject to the following conditions: That there shall be no discrimination against or segregation of
any person or group of persons, on account of race, color, creed, religion, sex, marital status, national
origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the
premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use, or occupancy, of tenants lessees, sub - lessees, sub - tenants, or vendees in the
premises herein leased."
5.3 In contracts "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status, national
origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the
premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy, of tenants, lessees, sub- lessees, sub - tenants, or vendees of
the premises herein transferred. The foregoing provision shall be binding upon and shall obligate the
contracting party or parties and any subcontracting party or parties, or other transferees under the
instrument.
RV PUBLIC V ARN ERV 10715.1
EXHIBIT E -2
Section 6. Power of Termination.
6.1 Following the Close of Escrow, Grantor shall, upon thirty (30) calendar
days notice to Grantee which notice shall specify this Section 6, have the right, at its option, to re -enter
and take possession of all or any portion of the Property, together with all improvements thereon, and to
terminate and revest in Grantor the estate conveyed to Grantee hereunder, if after conveyance of title, and
prior to the recordation of the Certificate of Completion, Grantee (or its successors in interest) shall:
6.1.1. Fail to commence Construction of all or any portion of the
Project as required by the Agreement, for a period of ninety (90) calendar days after the time specified for
such commencement in the Schedule of Performance; provided that Grantee shall not have obtained an
extension or postponement to which Grantee may be entitled pursuant to Section 7.5'of the Agreement; or
6.1.2 Abandon or substantially suspend Construction of all or any
portion of the Project for a period of ninety (90) calendar days after written notice of such abandonment
or suspension from Grantor; provided that Grantee shall not have obtained an extension or postponement
to which Grantee may be entitled to pursuant to Section 7.5 of the Agreement; or
6.1.3 Assign or attempt to assign the Agreement, or any rights the
Agreement, or transfer, or suffer any involuntary transfer, of the Property or any part thereof, in violation
of the Agreement, and such violation shall not have been cured within fifteen (15) calendar days after the
date of receipt of written notice thereof from Grantor to Grantee; or
6:1.4 Fail to complete Construction of the entirety of the Project for a
period of ninety (90) calendar days after the time specified for completion in the Schedule of
Performance; provided that Grantee shall not have obtained an extension or postponement to which
Grantee may be entitled pursuant to Section 7.5 of the Agreement.
6.2 The thirty (30) calendar day written notice specified in Section 6.1 shall
specify that Grantor proposes to take action pursuant to this Section 6 and shall specify which of
Grantee's obligations set forth in Section 6.1 have been breached. Grantor shall proceed with its remedy
set forth herein only in the event that Grantee continues in default of said obligation(s) for a period of
thirty (30) calendar days following such notice or, upon • commencing to cure such default, fails to
diligently and continuously prosecute said cure to satisfactory conclusion.
6.3 The right of Grantor to terminate the Agreement and reenter, repossess
and revest in title in the Property shall be subject and subordinate to, shall be limited by and shall not
defeat, render invalid or limit:
6.3.1 Any mortgage, deed of trust or other security interest permitted
by the Agreement;
6.3.2 Any rights or interests provided in the Agreement for the
protection of the holders of such mortgages, deeds of trust or other security interests;
6.3.3 Any leases, declarations of covenants, conditions and
restrictions, easement agreements or other recorded documents previously approved or authorized by
Grantor and applicable to the Property.
6.4' Upon the revesting in Grantor of tide to the Property, or any part thereof,
as provided in this Section 6, Grantor shall, pursuant to its responsibilities under California law, use its
EXHIBrr E-3
R V PUBQCV ARNER%710715.1
best efforts to resell the Property, or any part thereof, at fair market value as soon and in such manner as
Grantor shall find feasible and consistent with the objectives of such law, to a qualified and responsible
party or parties (as determined by Grantor) who will assume the obligations of making or completing the
improvements, or such other improvements in their stead as shall be satisfactory to Grantor and in
accordance with the uses specified for the Property, or any part thereof. Upon such resale of the Property,
or any part thereof, the proceeds thereof shall be applied:
6.4.1 First, to make any payment made or necessary to be made to
discharge or prevent from attaching or being made any subsequent Liens due to obligations incurred with
respect to the making or completion of the Project, next to reimburse Grantor for all actual costs and
expenses incurred by Grantor, including but not limited to customary and reasonable fees or salaries to
third party personnel engaged in such action, in connection with the recapture, management and resale of
the Property or any portion thereof; all taxes, assessments and water and sewer charges paid by the
Grantor with respect to the Property or any portion thereof; any amounts otherwise owing to Grantor by
Grantee and its successor transferee; and
6.4.2 Second, to the extent that any and all funds which are proceeds
from such resale are thereafter available, to reimburse Grantee, or its successor transferee, up to the
amount equal to the costs incurred for the development of the Property, or applicable part thereof, or for
the Construction of the improvements thereon including, but not limited to, costs of carry, taxes and items
set.forth in Grantee's cost statement which shall be submitted to and approved by Grantor.
6.4.3 Any balance remaining after the foregoing application of
proceeds shall be retained by Grantor.
PART THREE
Section 7. Covenants Run with the Land of the Property Each of the covenants and
agreements contained in this Quitclaim Deed touch and concern the Property and each of them is
_ expressly declared to be a Community redevelopment covenant that runs with the land for the benefit of
the Grantor, and such covenants run with the land in favor of the Grantor for the entire period that such
covenants are in full force and effect, regardless of whether the Grantor is or remains an owner of any
land or interest in land to which such covenants relate. The Grantor, in the event of any breach of any
such covenants, has the right to exercise all of the rights and remedies, and to maintain any actions at law
or suits in equity or other proper proceedings, to enforce the curing of such breach, as provided in the
Agreement or by law. The covenants contained in this Quitclaim Deed are for the benefit of and are
enforceable only by the Grantor and shall survive the Close of Escrow, execution and recordation of this
Quitclaim Deed and the issuance and recordation of a Certificate of Completion, for the time period set
forth for each covenant.
Section 8. Costs and Attomevs' Fees for Enforcement Proceedine If legal proceedings are
initiated to enforce the rights, duties or obligations of any of the covenants set forth in this Quitclaim
Deed, then the prevailing party in such proceeding shall be entitled to collect its reasonable attorney fees
and costs from the other party in addition to any other damages or relief obtained in such proceedings.
Section 9. Effect of Unlawful Provision. Severability In the event that any provision of this
Quitclaim Deed may be held to be invalid or unlawful by a final judgment of a court of competent
jurisdiction, such invalidity shall not affect the validity of any other provision of this Quitclaim Deed.
IN WITNESS WHEREOF, the Grantor has caused this Quitclaim Deed to be executed by its
authorized representative(s) on this _ day of . 2006.
EXHIBIT E -4
R V PUBUNARNER \710715.1
SIGNATURE PAGE
TO
AGENCY QUITCLAIM DEED
Date:
ATTEST:
By:
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST and KRIEGER LLP
GRANTOR:
THE REDEVELOPMENT AGENCY OF T11E
CITY OF ARCADIA,
a public body, corporate and politic
William R Kelly
Executive Director
By:
Agency Counsel
[SIGNATURE MUST BE ACKNOWLEDGED)
EXHIBIT E -5
RV PUBVCV ARNER1710715.1
CERTIFICATE OF ACCEPTANCE
OF
THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
QUITCLAIM DEED
The undersigned hereby acknowledges acceptance by Trademark Development Company, LLC, a
California limited liability company, the Grantee, in the Redevelopment Agency of the City of Arcadia
Quitclaim Deed, of the delivery of the subject property described within the Redevelopment Agency of
the City of Arcadia Quitclaim Deed, subject to all of the community redevelopment covenants expressly
set forth or incorporated within the Redevelopment Agency of the City of Arcadia Quitclaim Deed.
GRANTEE:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
By:
Its:
Date: By:
Its:
[ALL SIGNATURES MUST BE ACKNOWLEDGED]
EXHIBIT E -6
R V P US\KV ARNEX \710715.1
ATTACHMENT 1
TO
THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA
QUITCLAIM DEED
Legal Description of Property
[Insert Legal Description of Property on this Page[
EXHIBIT E-7
RVPUMUARNEW710715.1
DATED AND ISSUED this _ day of
Date:
0
Executive Director
ATTEST:
0
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
By.
Agency Counsel
RVPUB\KVAMERV 10715.1
EXHIBIT F -2
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91006
Attention: Executive Director
EXEMPT FROM RECORDING FEE PER GOVERNM57 CODE SECTION 27383
REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
FOR
OWNER OCCUPIED PROPERTY
LOCATED AT 119 AND 121 ALTA STREET IN THE CITY OF ARCADIA
RVPUB\ICCV\675631.1
THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS FOR OWNER- OCCUPIED PROPERTY LOCATED AT 119 AND 121 ALTA STREET
( "Regulatory Agreement ") is dated ' 2006 for reference purposes only, and is made
by and among (i) THE REDEVELOPMENT AGENCY OF THE CITY OF ARCADIA, a public body
corporate and politic ( "Agency "), (ii) TRADEMARK DEVELOPMENT COMPANY, LLC a California
limited liability company ( "Developer'), and (iii) ( "Qualified
Homebuyer"). This Regulatory Agreement is entered into with reference to the following recitals of fact
(`Recitals "):
RECITALS
A. The Developer is the fee simple owner of certain real property located at 119 and 121
Alta Street in the City of Arcadia ( "City's identified as Assessor's Parcel Numbers 5773 -014 -912 and
5773- 014 -913 ( "Property's. The Property,is legally described in Exhibit A attached to this Regulatory
Agreement and incorporated into this Regulatory Agreement by this reference.
B. The Developer acquired the Property from the Agency pursuant to the terms of an
Affordable Housing Agreement dated June 6,. 2006 ( "Agreement") between the Agency and the
Developer which, among other things, provided for: (i) the Agency's conveyance of its fee interest in the
Property to the Developer for a purchase price of One Dollar ($1); (ii) the Developer's development of
six (6) owner - occupied multifamily residences reserved for occupancy for persons and families of
moderate income ( "Project ") on the Property, and (iii) the Agency's loan to the Developer of an amount
not to exceed Seven Hundred Sixty Thousand Dollars ($760,00) to assist the Developer in financing
certain development expenses ( "Agency Development Loan').
C. The Developer has agreed that in return for the Agency's conveyance of the Property,
and the Agency Development Loan, the Developer will develop the Project on the Property and, upon
selling the Property, will make the Property available at an affordable housing cost for persons and
families of moderate income, all as more specifically set forth in this Regulatory Agreement.
D. The Qualified Homebuyer proposes to acquire one of the New Homes in the Project
( "New Home ") to be owned and occupied by the Qualified Homebuyer as their principal residence. The
legal description of the New Home is attached hereto as Exhibit B and incorporated herein by this
reference.
E. Pursuant to the terms of this Regulatory Agreement, the Agency, Developer and the
Qualified Homebuyer agree that the New Home shall be restricted in certain respects for the term as
provided herein in order to ensure that the New Home will be used and occupied in accordance housing
affordability goals and objectives of the Agency.
RVPUBQCCV1675631.1
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND
UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY
ACKNOWLEDGED, THE AGENCY, THE DEVELOPER AND THE QUALIFIED HOMEBUYER
DO HEREBY COVENANT AND AGREE' FOR THEMSELVES, THEIR SUCCESSORS AND
ASSIGNS AS FOLLOWS:
Section 1. Definitions of Certain Terms As used in this Regulatory Agreement, the following
terms shall have the meaning as provided in this Section 1 unless the specific context of usage of a
particular word or term may otherwise require:
1.1 Adjusted Family Income The term "Adjusted Family Income" means the
anticipated total annual income (adjusted for family size) of each individual or family residing or treated
as residing in the New Home as calculated in accordance with Treasury Regulation 1.167(k) - 3b)(3)
under the Code, as adjusted, based upon family size in accordance with the household income
adjustment factors adjusted and amended from time to time, pursuant to Section 8 of the United States
Housing Act of 1937, as amended
1.2 Affordable Housing Cost The term "Affordable Housing Cost" shall have the
meaning as set forth in California Health and Safety Code Section 50052.5(b)(4), as that section may
hereafter be amended from time -to -time. In the event that either the Qualified Homebuyer on the
Delivery Date, or later that a proposed Successor -In- Interest may be (but shall not be required to be) an
"extremely low income household," a "very low income household" or a "lower income household ", as
these -terms are defined in the California Health and Safety Code, then in such event the amount of the
maximum Affordable Housing Cost payable by any such Successor -In- Interest household in connection
with the acquisition of the New Home at any time during the Qualified Residence Period shall be
calculated as set forth in Health and Safety Code 50052.5(b)(1), (2) or (3), as applicable.
1.3 Code. The term "Code" means the Internal Revenue Code of 1986, as amended,
and any regulation, rulings or procedures with respect thereto.
1.4 Deed of Trust The term "Deed of Trust" means the performance deed of trust
attached to this Regulatory Agreement as Exhibit C and incorporated into this Regulatory Agreement by
this reference which secures the prompt and complete observance and performance of each and every
monetary and non - monetary condition, obligation, covenant and agreement contained in this Regulatory
Agreement.
1.5 Delivery Date The term "Delivery Date" means the date of delivery of title and
possession of the New Home from the Developer to the Qualified Homebuyer at the close of the New
Home Escrow. In the case of a Successor -In- Interest, the words "Delivery Date" refers to the date on
which such Successor -In- Interest acquires the New Home from the Qualified Home Buyer; provided
however, that for the purpose of establishing the termination date of the Qualified Residence Period, the
Delivery Date shall refer to the date on which this Regulatory Agreement are recorded.
1.5 First Mortgage Lender
meaning ascribe to it in Section 5.1.
The term "First Mortgage Lender" shall have the
RVPUB1xCV\675631.1
1.6 Maintenance Deficiency The term "Maintenance Deficiency ", shall have the
meaning ascribed to the term in Section 4.1.
1.7 Moderate- Income Household The term 'Moderate-Income Household" means
persons and families whose income does not exceed one hundred twenty percent (120 %) of the then-
current area median income of the County of Los Angeles adjusted for family size by the California
Department of Housing and Community Development in accordance with adjustment factors adopted
and amended from time to time by the United States Department of Housing and Urban Development .
pursuant to Section 8 of the United States Housing Act'of 1937, as amended, and California Health and
Safety Code Section 50093, as that section may hereafter be amended from time -to -time.
1.8° New Home The term "New Home means the owner- occupied multi- family
residence sold from the Developer.to the Qualified Homebuyer. The legal description of the New Home
is attached hereto as Exhibit B and incorporated into this Regulatory Agreement by this reference.
1.9 New Home Escrow The term "New Home Escrow" means and refer to the real
estate conveyance transaction or escrow by and between the Developer and the Qualified Homebuyer (or
later, by and between the Qualified Homebuyer and the Successor -In- Interest). The transfer of the New
Home from the Developer to the Qualified Homebuyer (or later, by and between the Qualified
Homebuyer and the Successor -In- Interest) shall be accomplished upon, the close of the New Home
Escrow.
1.10. Notice of Agency Concurrence The term "Notice of Agency Concurrence"
z> means the acknowledgment in recordable form in which the Agency confirms that the proposed
Successor -In- Interest of the Qualified Horebuyer satisfies all of the Adjusted Family Income and other
requirements of this Regulatory Agreement for occupancy of the New Home by the Successor -In-
Interest at any time during the Qualified Residence Period.
1.11 Oualified Homebuyer The term "Qualified Homebuyer" means the purchaser
of the New Home from the Developer (e.g.: all persons identified as having. a property . ,ownership
interest vested in the,New Home as of the close of the New Home Escrow). At the close of the New
Home Escrow, the Qualified Homebuyer shall: (i) have an annual Adjusted Family. Income which does
not exceed the household income qualification limits of a Moderate - Income Household, and (ii) pay no
more than an Affordable Housing Cost for the New Home pursuant to the terms of the purchase
transaction for the'New Home, including all sums payable by the Qualified Homebuyer for its purchase
money mortgage financing, insurance, escrow and other fees and costs.
1.12 Oualified Residence Period The term "Qualified Residence Period" means the
period of time beginning on the Delivery Date and ending on the date which is forty -five (45) years after
the Delivery Date.
1.13 Performance Deed of Trust The term "Performance Deed of Trust" shall mean
the Performance Deed of -Trust attached to this Regulatory Agreement as Exhibit C securing the
Qualified Homebuyer's obligations under this Regulatory Agreement
RVPUB\RCV\675631.1
1.14 Regulatory Agreement The term "Regulatory Agreement' shall mean this
Regulatory Agreement among the Agency, the Developer and the Qualified Homebuyer.
1.15 Successor -In- Interest The term "Successor -In- Interest' means the person,
family or household which may acquire the New Home from the Qualified Homebuyer at any time
during the Qualified Residence Period by purchase, assignment, transfer or otherwise. The Successor -
In- hlterest shall have an income level for the twelve (12) months prior to the date on which the
Successor -In- Interest acquires the New Home which does.not exceed the maximum Adjusted Family
Income level for a Moderate - Income Household. Upon acquisition of the New Home the Successor -In-
Interest shall be bound by each of the covenants, conditions and restrictions of this Regulatory
Agreement.
Section 2. Acknowledgments and Representations of the Oualified 1-Iomebuver The Qualified
Homebuyer hereby acknowledges and represents that, as of the Delivery Date:
2.1 The total household income for the Qualified Homebuyer does not exceed the
maximum amount permitted as Adjusted Family Income for a Moderate- Income Household, adjusted for
actual family size.
2.2 The Qualified Homebuyer shall promptly occupy the New Home after the
Delivery Date as the principal place of residence and the Qualified Homebuyer has not entered into any
arrangement and shall not sell, transfer or assign the New Home to any third party during the Qualified
Residence Period so as to frustrate the purpose of this Regulatory Agreement. _
2.3 The Qualified Homebuyer has no present intention to lease or rent any room or
sublet or rent a portion of the New Home to any relative of the Qualified Homebuyer or to any third
person at any time during the first five (5) years following the Delivery Date.
2.4 The aggregate sum payable each month by the Qualified Homebuyer following
the close of the New Home Escrow as principal and interest, property taxes and, property casualty
insurance for the acquisition of the New Home does not exceed the Affordable Housing Cost for the
household.
2.5 The Qualified Homebuyer agrees to provide the Agency with the following
items of information for inspection by the Agency promptly upon written request of the Agency:
2.5.1 State and federal income tax returns filed by all persons who reside in
the New Home for the three (3) most recent tax years preceding the close of the New Home Escrow for
inspection of such State and federal income tax returns; and
2.5.2 current wage, income and salary statements for all persons residing in
the New Home at the close of the New Home Escrow;
2.6 The Qualified Homebuyer has been informed by the Developer that this
Regulatory Agreement imposes certain restrictions on the use and occupancy of the New Home during
the term of this Regulatory Agreement and that this Regulatory Agreement imposes certain restrictions
RVPUMKCV1675631.1
on the resale of the New Home during the Qualified Residence Period. The Qualified Homebuyer
acknowledges and understands that these restrictions shall be applicable to the New Home and to any
resale of the New Home from the Delivery Date to the end of the Qualified Residence Period which is
' , 20_
11 Initials of
Qualified Homebuyer
Section 3.
During the Oualified Residence Period to a Successor -In- Interest
3.1 The Qualified - Homebuyer for itself, its heirs, successors and assigns, hereby
covenants and agrees that during the term of the Qualified Residence Period the New Home shall be
used and occupied by the Qualified Homebuyer as its principal residence, and that the New Home shall
be reserved for sale, use and occupancy by the Qualified Homebuyer and/or for another Moderate -
Income Household as a Successor -In- Interest at an Affordable Housing Cost. The Qualified
Homebuyer, for itself, its heirs, successors and assigns, further covenants and agrees that, during the
Qualified Residence Period, the Agency shall have the right and duty as provided in this Section 3 to
verify that each proposed Successor -In- Interest of the Qualified Homebuyer in the New Home satisfies
the income requirements and Affordable Housing Cost limitations of a Moderate - Income Household
(based upon the Adjusted Family Income of each household).
3.2 The Qualified Homebuyer, for itself, its successors and assigns, hereby
covenants and agrees that during the term of the Qualified Residence Period the Qualified Homebuyer
shall not sell, transfer or otherwise dispose of the New Home (or any interest therein) to a Successor-In-
Interest without first giving written notice to the Agency and without first obtaining the written
concurrence of the Agency as provided herein. At least forty-five (45) calendar days prior to the date on
which the Qualified Homebuyer proposes to transfer title in the New Home to a Successor -hi- Interest,
the Qualified Homebuyer shall send a written notice to the Agency as provided in Section 17 of the
intention of the Qualified Homebuyer to sell the New Home to a Successor -In- Interest which includes
the following true and correct information:
3.2.1 name of the propose &Successor -In- Interest (including the identity of all
persons in the household of the Successor -In- Interest, proposing to reside in the New Home);
3.2.2 copies of state and federal income tax returns for the Successor -In-
Interest for the calendar year preceding the year in which the notice of intention to sell the New Home is
given to the Agency;
3.2.3 resale price of the New Home payable by the Successor -In- Interest,
including the terms of all purchase money mortgage financing to be assumed, provided or obtained by
the Successor -In- Interest, escrow costs and charges, realtor broker fees and all other resale costs or
charges payable by either the Qualified Homebuyer or the Successor -In- Interest;
RVI'MICM675631.1
3.2.4 name address, and telephone number of the escrow company which
shall coordinate the transfer of the New Home from the Qualified Homebuyer to the Successor -In-
Interest;
3.2.5 appropriate mortgage credit reference for the Successor -In- Interest with
a written authorization signed by the Successor- In- hrterest authorizing the Agency to contact each such
reference; and
3.2.6 such other relevant information as the Agency may reasonably request.
3.3 within twenty (20) days following receipt of the notice of intention described in
Section 3.2, the Agency shall provide the Qualified Homebuyer with either a preliminary confirmation
of approval or a preliminary rejection of approval in writing of the income and household occupancy
qualifications of the Successor -In- Interest. The Agency shall not unreasonably withhold approval of any
proposed sale of the New Home to a Successor -In- Interest who satisfies the Adjusted Family Income and
the Affordable Housing Cost requirements for occupancy of the New Home and for whom the other
information as described in Section 3.2 has been provided to the Agency. In the event that the Agency
may request additional information relating to the confirmation of the matters described in Section 3.2,
the Qualified Homebuyer shall provide such information to the Agency as promptly as feasible.
3.4 Upon its final confirmation of approval of the Adjusted Family Income and
Affordable Housing Cost eligibility of the Successor -hi- Interest to acquire the New Home, the Agency
shall deliver a written acknowledgment and approval of the resale of the New Home to the Successor -In-
Interest in recordable form to the escrow holder referenced in Section 3.2 above, and thereafter the
Successor -In- Interest may acquire the New Home subject to the satisfaction of the following conditions:
3.4.1 the recordation of the Notice of Agency Concurrence executed by the
Successor -In- Interest and the Agency at the close of the resale escrow;
3.4.2 the escrow holder shall have provided the Agency with a copy of the
customary form of the final escrow closing statement of the Qualified Homebuyer and the final escrow
closing statement for the Successor -In- Interest; and
3.4.3 the other conditions of the resale escrow as established by the Qualified
Homebuyer and Successor- hl- hiterest shall have been satisfied.
3.5 The Qualified Homebuyer for itself, its successors and assigns hereby covenants
and agrees that until the forty-fifth (45th) anniversary of the Delivery Date, the New Home shall not be
leased, subleased, or rented to any third person, except for a temporary period (not to exceed twelve (12)
months) in the event of an emergency or other unforeseen circumstance as may be expressly approved in
writing by the Agency subject to compliance during the temporary rental period with the reasonable
temporary rental occupancy conditions required by the Agency. The Qualified Homebuyer shall submit
a written request to the Agency prior to the commencement of the temporary occupancy, as practicable,
but in any event within not more than (60) calendar days following the commencement of a temporary
rental occupancy of the New Home by a third party, which notice shall set forth the grounds on which
RVPUBIKCV%675631.1
the Qualified Homebuyer believes an emergency or other unforeseen circumstance has occurred and that
a temporary rental occupancy in necessary.
Section 4. Maintenance Condition of the New Home The Qualified Homebuyer, for itself, its
successors and assigns hereby covenants and agrees that:
4.1 The exterior areas of the New Home which are subject to public view (e.g.: all
improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good repair
and a neat, clean and orderly condition; ordinary wear and tear excepted. In the event that at any time
during the term of the Qualified Residence Period, there is an occurrence of an adverse condition on any
area of the New Home which is subject to public view in contravention of the general maintenance
standard described above, ( "Maintenance Deficiency') then the Agency shall notify the Qualified
Homebuyer in writing of the Maintenance Deficiency and give the Qualified Homebuyer thirty (30)
calendar days from the date of such notice to cure the Maintenance Deficiency as identified in the notice.
The words "Maintenance Deficiency" include without limitation the following inadequate or non -
confirining property maintenance conditions and/or breaches of single family dwelling residential
property use restrictions:
4.1.1 failure to properly maintain the windows, structural elements, and
painted exterior surface areas of the New Home in a clean and presentable manner;
4.1.2 failure to keep the front and side yard areas of the New Home free of
accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of
lum.Q, building materials or equipment not regularly in use on the New Home;
4.1.3 failure to regularly mow lawn areas or permit grasses planted in lawn
areas to exceed nine inches (9') in height, or failure to otherwise maintain the landscaping in a
reasonable condition free of weeds and debris;
4.1.4 parking of any commercial motor vehicle.in excess of seven thousand
(7,000) pounds gross weight anywhere on the New Home property, or the parking of motor vehicles,
boats, camper shells, trailers, recreational vehicles and the like in any side yard or on any other parts of
the New Home property which are not covered by a paved and impermeable surface;
4.1.5 the use of the garage area of the dwelling New Home for purposes other
than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of
persons residing in the New Home.
4.2 In the event the Qualified Homebuyer fails to cure or commence to cure the
Maintenance Deficiency within the time allowed, the Agency may thereafter conduct a public hearing
following transmittal of written notice thereof to the Qualified Homebuyer ten (10) calendar days prior
to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists
and whether the Qualified Homebuyer has failed to comply with the provision of this Section 4.2. If,
upon the conclusion of a public hearing, the Agency makes a fording that a Maintenance Deficiency
exists and that there appears to be non - compliance with the general maintenance standard as described
above, thereafter the Agency shall have the right to enter the New Home (exterior areas only) and
RVPUB\KCV\675631.1
perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity
the Agency may then have to accomplish the abatement of the Maintenance Deficiency. Any sum
expended by the Agency for the abatement of a Maintenance Deficiency as authorized by Section 4 shall
become a lien on the New Home. If the amount of the lien is not paid. within thirty (30) calendar days
after written demand for payment by the Agency to the Qualified Homebuyer, the Agency shall have the
right to enforce the lien in the manner as provided in Section 4.4.
4.3 Graffiti which is visible, from any public right -of -way which is adjacent or
contiguous to the New Home shall be removed by the Qualified Homebuyer from any exterior surface of
a structure or improvement on the New Home by either painting over the evidence of such vandalism
with a paint which has been color - matched to the surface on which the paint is applied, or graffiti may be
removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the New
Home (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right -of-
way and thereafter such graffiti is not removed within seventy -two (72) hours following the time of its
application; then in such event and without notice to the Qualified Homebuyer, the Agency shall have
the right to enter the New Home and remove the graffiti. Any sum expended by the Agency for the
removal of graffiti from the New Home as authorized by this Section 4.3 shall become a lien on the New
Home. If the amount of the lien is not paid within thirty (30) calendar days after written demand for
payment by the Agency to the Qualified Homebuyer, the Agency shall have the right to enforce its lien
in the manner as provided in Section 4.4.
4.4 The parties hereto further mutually understand and agree that the rights
conferred upon the Agency under this Section 4 expressly include the power to establish and enforce a
lien or other encumbranceZagainst the New Home in the manner provided under Civil Code Sections
2924, 2924b and 2924c in the amount as reasonably necessary to restore the New Home to the
maintenance standard required under Section 4, including attorneys' fees and costs of the Agency
associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of
the costs of the Agency in connection with such action. In any legal proceeding for enforcing such a lien
against the New Home, the prevailing party shall be entitled to recover its attorneys' fees and costs of
suit. The provisions of this Section 4, shall be a covenant running with the land for the Qualified
Residence Period and shall be enforceable by the Agency in its discretion, cumulative with any other
rights or powers granted by the Agency under applicable law. Nothing in the foregoing provisions of
this Section 4 shall be deemed to preclude the Qualified Homebuyer from making any alterations,
additions, or other changes to any structure or improvement or landscaping on the New Home, provided
that such changes comply with the zoning and development regulations of the Agency and other
applicable law.
Section 5. Acknowledgment of Priority of the Provisions of Section 3 and Section 6.2 of this
5.1 Concurrently upon the execution and recordation of this Regulatory Agreement
the Qualified Homebuyer shall obtain certain purchase money mortgage financing for the acquisition of
the New Home from ( "First Mortgage Lender"). As of the Delivery Date, the Qualified
Homebuyer has provided the Agency with a true and correct copy of the loan agreement by and between
the First Mortgage Lender and the Qualified Homebuyer. The provisions of Section 3 and Section 6.2 of
RVPUBUCCV\675631.1
this Regulatory Agreement shall be prior and senior to the security interest of the First Mortgage Lender
in the New Home.
5.2 No breach or default by the Qualified_Homebuyer of any provision of Section 3
and/or Section 6.2 of this Regulatory Agreement, nor the exercise by the Agency of any remedy it may
have against the Qualified Homebuyer in the event of such a breach or default shall affect or render
invalid the lien of the First Mortgage Lender in the New Home. In the event that the First Mortgage
Lender (or its assignee) may foreclose the lien of the First Mortgage Lender in the New Home through
trustee sale, judicial foreclosure or by acceptance of deed in lieu of foreclosure, the First Mortgage,
Lender, and its good faith purchasers for value, shall receive title in the New Home subject to the
provisions of Section 3 and Section 6.2 of this Regulatory Agreement.
Section 6. Foreclosure of Purchase Money Mortgage Loan and Agency Right of First Refusal
6.1 During the Qualified Residence Period the Agency shall have the right (but not
the obligation) to bid on the purchase of any mortgage loan lien secured by the New Home at the time of
any trustee foreclosure sale or any judicial foreclosure sale.
6.2 During the Qualified Residence Period the Agency shall have the right of first
refusal to purchase the New Home from the Qualified Homebuyer on the same terms which the
Qualified Homebuyer may propose to offer the New Home for resale to a Successor -In- Interest. The
Agency must exercise such a right of first refusal within thirty (30) calendar days following written
notification of the intention of the Qualified Homebuyer to resell the New Home, and if the Agency
accepts the offer in vriting within such time period the Agency shall be bound to complete the purchase
of the New Home strictly in accordance with the offer. Thereafter the Agency shall pay the `resale
price" to the Qualified Homebuyer and close an escrow for the transfer of the New Home to the Agency
within sixty (60) calendar days following written notification of the intention of the Qualified
Honiebuyer to resell the New House.
Section 7. Covenants to Run With the Land The Developer, the Agency and the Qualified
Homebuyer hereby declare their specific intent that the covenants, reservations and restrictions set forth
herein shall be deemed covenants running with the land and shall pass to and be binding upon the New
Home and each Successor -In- Interest of the Qualified Homebuyer in the New Home for the term
provided in Section 9. The Qualified Homebuyer hereby expressly assumes the duty and obligation to
perform each of the `covenants and to honor each of the reservations and restrictions set forth in this
Regulatory Agreement: Each and every contract, deed or other instrument hereafter executed covering
or conveying, the New Home or any interest therein shall conclusively be held to have been executed,
delivered and accepted subject to.such covenants, reservations, and restrictions, regardless of whether
such covenants, reservations and restrictions are set forth in such contract, deed or other instrument.
Section 8. Burden and Benefit. The Agency, the Developer and the Qualified Homebuyer hereby
declare their understanding and intent that the burden of the covenants set forth herein touch and concern
the land in that the Qualified Homebuyer's legal interest in.the New Home is affected by the affordable
single family dwelling use and occupancy covenants hereunder. The Agency and the Qualified
Homebuyer hereby further declare their understanding and intent that the benefit of such covenants
RVPUB\RCV\675631.1
touch and concern the land by enhancing and increasing the enjoyment and use of the New Home by the
intended beneficiaries of such covenants, reservations and restrictions.
Section 9. Term. This Regulatory Agreement shall apply to the New Home and the Qualified
Homebuyer and to each Successor -In- Interest as of the Delivery Date for the Qualified Residence Period
-- e.g.: this Regulatory Agreement shall remain in full force and effect for forty five (45) years after the
Delivery Date. Any provision or section hereof, may be terminated after the Delivery Date upon
agreement by the Agency and the Qualified Homebuyer (or the Successor -In- Interest in the New Home),
if there shall have been provided to the 'Agency an opinion of special legal counsel that such a
termination under the terms and conditions approved by the Agency in its reasonable discretion will not
adversely affect the Agency.
Section 10. Breach and Default and Enforcement
10.1 Failure or delay by the Qualified Homebuyer to honor or perform any material
term or provision of this Regulatory Agreement shall constitute a breach under this Agreement; provided
however, that if the Qualified Homebuyer commences to cure, correct or remedy the alleged breach
within thirty (30) calendar days after the date of written notice specifying such breach and shall
diligently complete such cure, correction or remedy, the Qualified Homebuyer shall not be deemed to be
in default hereunder.
10.2 The Agency shall give the Qualified Homebuyer written notice of breach
specifying the alleged breach which if uncured by the Qualified Homebuyer within thirty (30) calendar
days, shall be deemed to be an event oNefault. Delay in giving such notice shall not constitute a waiver
of any breach or event of default nor shall it change the time of breach or event of default; provided,
however, the Agency shall not exercise any remedy for an event of default hereunder without first
delivering the written notice of breach as specified in this Section 10.
10.3 Except with respect to rights and remedies expressly declared to be exclusive in
this Regulatory Agreement, the rights and remedies of the Agency are cumulative with any other right or
power of the Agency or the Agency or other applicable law, and the exercise of one or more of such
rights or remedies shall not preclude the exercise by the Agency at the same or different times, of any
other right or remedy for the same breach or event of default.
10.4 In the event that a breach of the Qualified Homebuyer may remain uncured for
more than thirty (30) calendar days following written notice, as provided above, an event of default shall
be deemed to have occurred. In addition to the remedial provisions of Section 4 as related to a
Maintenance Deficiency at the New Home, upon the occurrence of any event of default the Agency shall
be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows:
10.4.1 by mandamus or other suit, action or proceeding at law or in equity, to
require the Qualified Homebuyer to perform its obligations and covenants hereunder, or enjoin any acts
or things which may be unlawful or in violation of the rights of the Agency; or
10.4.2 by other action at law or in equity as necessary or convenient to enforce
the obligations, covenants and agreements of the Qualified Homebuyer to the Agency.
RVPUa\KCV\675631.1
10.4.3 No third party shall have any right or power to enforce any provision of
this Regulatory Agreement on behalf of the Agency or to compel the Agency to enforce any provision of
this Regulatory Agreement against the Qualified Homebuyer on the New Home.
Section 11. Governing Law This Regulatory Agreement shall be governed by the laws of the State of
California.
Section 12. Amendment This Regulatory Agreement may be amended after the Delivery Date only
by a written instrument executed by the Qualified Homebuyer (or the Successor -In- Interest, as
applicable) and by the Agency. The Developer shall have not any right or power to approve any such
amendment to this Regulatory Agreement, and the execution by the Developer of any such amendment
after the Delivery Date shall not be required.
Section 13. Attorneys' Fees In the event that the Agency brings an action to enforce any condition or
covenant, representation or warranty in this Regulatory Agreement or otherwise arising out of this
Regulatory Agreement, the prevailing party in such action shall be entitled to recover from the other
party reasonable attorneys' fees to be fixed by the court in which a judgment is entered, as well as the
costs of such suit.
Section 14. Severabilitv If any provision of this Regulatory Agreement shall be declared invalid,
inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such
invalidity or unenforceability of such provision shall not affect the remaining parts of this Regulatory
Agreement which are hereby de@lared by the parties to be severable from any other part which is found
by a court to be invalid or unenforceable.
Section 15. Time is of the Essence For each provision of this Regulatory Agreement which states a
specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed
to be of the essence.
Section 16: Titles and Headings The titles and headings of the sections of this Regulatory Agreement
have been inserted for convenience of reference. only and are not to be considered a part hereof and shall
not in any way modify or restrict the meaning any of the terms or provisions hereof.
Section 17. Notice Any notice required to be given under this Regulatory Agreement shall be given
by the Agency or by the Qualified Homebuyer, as applicable, by personal delivery or by First Class
United States mail at the addresses specified below or at such other address as may be specified in
writing by the parties hereto:
If to the Agency: The Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia California 91066
Attention: Executive Director
RVPUBVCCV1675631.1
If to the Developer: Trademark Development Company, LLC
Attention:
If to the Qualified Homebuyer:
Attention:
Notice shall be deemed given five (5) calendar days after the date of mailing to the party, or, if
personally delivered, when received by the Agency, Developer, or the Qualified Homebuyer, as
applicable.
Section 18. Obligations Secured By Performance Deed of Trust The prompt and complete
observance and performance of each and every monetary and non - monetary condition, obligation,
covenant and agreement contained in this Regulatory Agreement shall be secured by the Deed of Trust
attached to this Regulatory Agreement as Exhibit C and incorporated into this Regulatory Agreement by
this reference.
IN WITNESS WHEREOF, the Agency, the Developer and the Qualified Homebuyer have
caused this Regulatory Agreement to be signed, acknowledged and attested on their behalf by duly
authorized representatives in counterpart original copies which shall upon execution by all of the parties
be deemed to be one original document.
[Signatures on Following Pages]
RVPUBUCCV\675631.1
SIGNATURE PAGE
TO
REGULATORY AGREEMENT
Date:
QUALIFIED HOMEBUYER:
M
Its:
Date: By:
Its:
Z>
DEVELOPER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
Date: By:
Its:
Date:
RVPCBVCCV\675631.1
0
Its:
SIGNATURE PAGE
TO
REGULATORY AGREEMENT
AGENCY:
Date:
THE REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA,
a public body, corporate and politic
0
William R. Kelly
Executive Director
ATTEST:
By:
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
By:
Agency Counsel
RVPUB\KCV\675631.1
C
SIGNATURE PAGE
TO
REGULATORY AGREEMENT
AGENCY:
Date:
THE REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA,
a public body, corporate and politic
0
William R. Kelly
Executive Director
ATTEST:
By:
Agency Secretary
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
By:
Agency Counsel
RVPUB\KCV\675631.1
EXHIBIT B
TO
REGULATORY AGREEMENT
Legal Description of the New Home
[Insert Legal Description of New Home on this Page]
EXHIBIT G
RVPUMKVARNER \710715.1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Redevelopment Agency of the City of Arcadia
Attention: Executive Director
204 West Huntington Drive
Arcadia, California 91006 -6021
(Space above for Recorder's use only)
PERFORMANCE DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
THIS PERFORMANCE DEED OF TRUST, SECURITY AGREEMENT, AND FIXTURE
FILING (WITH ASSIGNMENT OF RENTS) ( "Deed of Trust ") is made as of 2006, by
("Trustor'), whose address is
California to ("Trustee"), whose address is
, for the benefit of the REDEVELOPMENT AGENCY OF THE
CITY OF ARCADIA, a public body corporate and politic, its successors and assigns ( "Beneficiary"),
whose address is 204 West Huntington Drive, Arcadia, California 91006 -6021, and is executed to secure
that certain Regulatory Agreement of even date herewith between Trustor Beneficiary. The provisions of
the Regulatory Agreement are incorporated in the Trust Deed by this reference.
's.
Trustor heieby IRREVOCABLY GRANTS, TRANSFERS AND . ASSIGNS to Trustee, its
successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND
POSSESSION, the following property ( "Trust Estate'):
A. All of that certain real property in the City of Arcadia, Los Angeles County,
California, more particularly described in Exhibit "A" attached hereto and by this reference made a part
hereof ("Subject Property';
B. All buildings, structures and other improvements now or in the future located or
to be constructed on the Subject Property ( "Improvements ");
C. All tenements, hereditament, appurtenances, privileges, franchises and other
rights and interests now or in the future benefitting or otherwise relating to the Subject Property or the
Improvements, including easements, rights -of -way and development rights ( "Appurtenances ").
(Appurtenances, together with the Subject Property and the Improvements, are hereafter collectively
referred to as the "Real Property";
D. Subject to the assignment to Beneficiary set forth. in Paragraph 4 below, all rents,
issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise
derived from the Trust Estate or the ownership, use, management operation, leasing or occupancy of the
Trust Estate, including those past due and unpaid ( "Rents ");
E. All present and future right, title and interest of Trustor in and to all inventory,
equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform
Commercial Code ( "UCC ")), whether existing now or in the future) located at upon or about, or affixed
or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise
relating to the Real Property or the ownership, use, development, construction, maintenance,
EXHIBIT G
RVPUB\KVARNER \710715.1 -
management, operation, marketing, leasing or occupancy of the Real Property, including furniture,
furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water
tanks, heating, ventilating and air conditioning equipment and all other types of tangible personal property
of any kind or nature, and all accessories, additions, attachments, parts,' proceeds, products, repairs,
replacements and substitutions of or to any of such property ( "Goods," and together with the Real
Property, collectively the "Property"); and
F. All present and future right, title and interest of Trustor in and to all accounts,
general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms
are defined in the UCC) and all other agreements, obligations, rights and written material (in each case
whether existing now or in the future) now or in the future relating to or otherwise arising in connection
with or derived from the Property or any other part of the Trust Estate. or the ownership, use,
development, construction, maintenance, minagement operation, marketing, leasing, occupancy, sale or
financing of the property or any other part of the Trust Estate, including (to the extent applicable to the
Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental
authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with
contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers,
sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent
loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance
payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other
payments arising or resulting -from or otherwise relating to any insurance or any loss or destruction of,
injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or
public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase
and soe Weements and purchase options, together with advance payr'Aents, security deposits and other
amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds,
deferred payments; refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other
rights to the payment of money, trade names, trademarks, goodwill and all other types on intangible
personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals,
extensions, proceeds, replacements and substitutions of , or to any of such property (collectively,
"Intangibles'.
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all
present and future right; title and interest of Trustor in and to all Goods and' Intangibles and all of the
Trust Estates described above in which a security interest may be created under the UCC (collectively, the
"Personal, Property"). This Deed of Trust constitutes a security agreement under the UCC, conveying a
security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall have,
in addition to all rights and remedies provided` herein, all the rights and remedies of a "secured party"
under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust
constitutes a fixture filing under Sections 9313 and 9402(6) of the UCC.
FOR THE PURPOSE OF SECURING, due, prompt and complete observance, performance
and discharge of each and 'every monetary and non - monetary condition, obligation; covenant and
agreement contained herein or contained in the Regulatory Agreement ( "Secured Obligations "). .
AND TO PROTECT TBE SECURITY OF TMS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor shall perform the obligations of the Qualified Homebuyer as set forth in the
Secured Obligations at the time and in the manner respectively provided therein;
EXHMIT'G
RVPUBVNAMER \710715.1
2. That Trustor shall not permit or suffer the use of any of the property, for any purpose
other than the use for which the same was intended at the time this Deed of Trust was executed;
3. That the Secured Obligations are incorporated in and made part of this Deed of Trust.
Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable
cure period; the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be
due and payable. This Deed of Trust shall cover, and the property subject hereto shall include, all property
now or hereafter affixed or attached to or incorporated upon the Subject Property in, to or under which
Trustor now has or hereafter acquires any right, title or interest, which, to the fullest extent permitted by
law, shall be deemed fixtures and a part of the Subject Property. To the extent any of the propertyaubject
to this Deed of Trust consists of rights in action or personal property covered by the Uniform Commercial
Code, this Deed of Trust shall also constitute a security agreement, and Trmtor hereby grants to
Beneficiary, as secured party, a security interest in such property, including all proceeds thereof, for the
purpose of securing the Secured Obligations. In addition, for the purpose of securing the Secured
Obligations, Trustor hereby grants to Beneficiary, as secured party, a security interest in all of the
property described herein in, to, or under which Trustor now has or hereafter acquires any right, title or
interest, whether present, future or contingent, including, but not limited to, all equipment, inventory,
accounts, general intangibles, instruments, documents and chattel paper, as those terms are defined in the
Uniform Commercial Code, and all other personal property of any Idnd (including, without limitation,
money and rights to the payment of money), whether now existing or hereafter created, that are now or at
any time hereafter (i) in the possession or control of Beneficiary in any capacity; (ii) erected upon,
attached to or appurtenant to the Subject Property; (iii) located or used on the Subject Property or
identified for use on the Subject Property (whether stored on the Subject Property or elsewhere); or (iv)
used in connection with, a;ising from, related to, or associated with the Subject Property-@; any of the
personal property described herein, the construction of any improvements on the Subject Property, the
ownership, development, maintenance, management or operation of the Subject Property, the use or
enjoyment of the Subject Property or the operation of any business conducted thereon, including without
limitation, all such property described as the Trust Estate hereinabove. The security interests granted in
this paragraph are hereinafter severally and collectively called the "Security Interest'. The Security
Interest shall be self - operative with respect to the real property described herein but Trustor shall execute
and deliver on demand such additional security agreements, financing statements and other instruments as
may be "requested in order to impose the Security Interest more specifically upon the real and personal
property encumbered hereby. The Security Interest, at all times, shall be prior to any other interest in the
personal property encumbered hereby. Trustor shall act and perform as necessary and shall execute and
file all security agreements, financing statements, continuation statements and other documents requested
by Beneficiary to establish, maintain and continue the perfected Security Interest. Trustor, on demand,
shall promptly pay all costs and expenses of filing and recordation, to ensure the continued priority of the
Security Interest. Trustor shall not sell, transfer, assign or otherwise dispose of any personal property
encumbered hereby without obtaining the prior written consent of Beneficiary, except that the Trustor
may, in the ordinary course of business, replace personal property or dispose of personal property that
will not be replaced because of its obsolescence. Unless Beneficiary then agrees otherwise in writing, all
proceeds from any permitted sale or disposition in excess of that required for full replacement shall be
paid to Beneficiary to be applied on the Note. Although proceeds of personal property are covered
hereby, this shall not be construed to mean that Beneficiary consents to any sale of such personal
property. Upon its recordation in the real property records of Riverside County, this Deed of Trust shall
be effective as a financing statement filed as a fixture filing. In that regard, the following information is
provided:
Name of Debtor:
Address of Debtor: . See the initial paragraph of this Deed of Trust
Name of Secured Party: The Redevelopment Agency of the City of Arcadia
RV PUB\KV ARNER \710715.1
F NIff1TYdol
Address of Secured Party: See the initial paragraph of this Deed of Trust
hl addition, a carbon, photostatic or other reproduced copy of this Deed of Trust and/or any financing
statement relating hereto shall be sufficient for filing and/or recording as a financing statement;
4. That all rents, profits and income from the property covered by this Deed of Trust are
hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is
hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration
of any applicable cure period, to collect such rents, profits and income for use in accordance with the
provisions of the Secured Obligations;
5. That upon default hereunder or under the aforementioned agreements, and after the
giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the
appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect
the property described herein and operate same and collect the rents, profits and income therefrom;
6. That Trustor will keep the improvements now existing or hereafter erected on the
property insured against loss by fire and such other hazards, casualties,.and contingencies as may be
required by applicable provisions of the Secured Obligations, and all such insurance shall be evidenced by
standard fire and extended coverage insurance policy or policies. Such policies shall be endorsed with
standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies
of original policies, if requested, shall be deposited with the Beneficiary;
7. 'o.pay before delinquency any taxes and assessments affecting said Property; to pay,
when due, all encumbrances, charges and liens, with interest; on said Propery or any part thereof which
appear to be prior or superior, hereto; and to pay all costs, fees, and expenses of this Trust.
Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall, not be required to
pay and discharge, any such tax, assessment charge or levy so long as. Trustor is contesting the legality
thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities
contested pursuant to this Section;
8. As it is provided more specifically in the Secured Obligations, to keep said property in
good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or
demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner
any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims
for labor performed and materials famished therefor, to comply. with all laws affecting said property or
requiring any alterations or improvements to be made thereon (subject to Trustor's right to contest the
validity or applicability of laws or regulations); not to commit or permit waste thereof; not to commit,
suffer or permit. any act upon said property in violation of law and/or covenants, conditions and/or
restrictions affecting said property; not to permit or suffer any material alteration of or addition to the
buildings or improvements hereafter constructed in or upon said property without the consent of the
Beneficiary;
9. To appear in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of
evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or proceeding in
which Beneficiary or Trustee may appear;
10. Should Trustor fail, after the giving of notice and the expiration of any applicable cure
period, to make any payment or do any act as herein provided; ,then Beneficiary or Trustee, but without
obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any
EXHIBIT 4
RV PUaIRV ARNER \710715.1
obligation hereof, may make or do the same in such manner and to such extent as either may deem
necessary to protect the security hereof. Following default, after the giving of notice and the expiration of
any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such
purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or
compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or
superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and
pay his reasonable fees;
11. Beneficiary shall have the right to pay fire and other property insurance premiums when
due should Trustor fail to make any required premium payments. All such payments made by the
Beneficiary shall be added to the sums secured hereby;
12, To pay immediately and without demand all sums so expended by Beneficiary or Trustee,
under permission given under this Deed of Trust, with interest from date of expenditure, at the highest
rate of interest permitted by law;
13. That the funds to be advanced hereunder are to be used in accordance with applicable
provisions of the Affordable Housing Agreement and the Secured Obligations; upon the failure of Trustor
to do so, after the giving of notice and the expiration of any applicable cure period, Trustor shall be in
default hereunder.
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created
it against the property subject to this Deed of Trust any lien or liens except as authorized, by BeneficiarX
:x and/or as provided in the Secured Obligations and further that it will keep and maintain the property free
from the claims of all persons supplying labor or materials which will enter into the construction of any
and all buildings now being erected or to be erected on said premises. Notwithstanding anything to,the
contrary contained in this Deed of Trust Trustor shall not be obligated to pay any claims for labor,
a: materials or services which Trustor in good faith disputes and is diligently contesting, provided that
Trustor shall, at Beneficiary's written request, within thirty (30) days after the filing of any claim or lien
(but in any event, and without any requirement that Beneficiary must first provide a written request prior
to foreclosure) record in the Office of the Recorder of Riverside County, a surety bond in the amount
required by law to protect against a claim of lien, or provide such other security reasonably satisfactory
to Beneficiary;
15. That any and all improvements made or about to be made upon the premises covered by
this Deed of Trust and all plans and specifications, comply with all applicable municipal ordinances and
regulations and all other applicable regulations made or promulgated now or hereafter, by lawful
authority, and that the same will upon completion comply with all such municipal ordinances and
regulations and with the rules of the applicable fire rating or inspection organization, bureau, association
or office.
IT IS MUTUALLY AGREED THAT:
16. Should the Property or any part thereof be taken or damaged by reason of any public
improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner,
Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are
not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or
damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any
action or proceedings, or to make any compromise or settlement, in connection with such taking or
damage. All such compensation, awards, damages, rights of action and proceeds which are,not used to
EXHIBIT G
RV PUBIK V ARNEP \710715.1
reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged,
including °the proceeds of any policies of fire and other insurance affecting said property, are hereby
assigned to Beneficiary;
17. Upon default by Trustor in taking any action or in making any payments provided for
herein, or in the Secured Obligations, if Trustor shall fail to perform any covenant or agreement in this
Deed of Trust within 30 days after written demand therefor by Beneficiary (or, in the event that more than
30 days is reasonably required to cure such default, should Trustor fail to promptly commence such cure,
and diligently prosecute same to completion), after the giving of notice and the expiration of any
applicable cure period, Beneficiary may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale, and of written notice of default
and of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for
record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this
Deed of Trust and all documents evidencing expenditures secured hereby;
28. After the lapse of such time as may then be required by law following the recordation of
said notice of default, and notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as
a whole or in separate' parcels, and in such order as it may determine at public auction to the highest
bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale
of all or any portion of said property by public announcement at the time and place of sale, and from time
to time thereafter may postpone the sale by public announcement at the time and place of sale, and from
time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding
postponement. Tmstee shalldeliver to thepurchaser its Deed conveying the property so sold, butswithout
any covenant or wa'r'ranty, express of implied. The recitals in the Deed of any:,matters or ,facts shall be
conclusive proof of the truthf lhess thereof. Any person, including Trustor, Trustee or Beneficiary, may
purchase at the sale. The Trustee shall apply the proceeds of sale to payment of (1) the expenses of such
sale, together with the reasonable expenses of this trust including therein reasonable Trustee's fees or
attorney's fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting
notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with
such sale and revenue stamps on Trustee's Deed; (3) all sums expended under the terms hereof, not then
repaid, with accrued interest at the maximum rate allowed by law; (4) all other sums then secured hereby;
and (5) the remainder, if any, to the person or persons legally entitled thereto;
19. Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance
to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any
Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by
written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of
record, which, when duly recorded in the proper office of the county or counties in which the property is
situated, shall be conclusive proof of proper appointment of the successor trustee;
20. The pleading of any statute of limitations as a defense to any and all obligations secured
by this Deed of Trust is hereby waived to the full extent permissible by law;
21. Upon written request ofBeneficiary stating that all sums secured hereby have been paid
and all obligations secured hereby have been satisfied, and upon surrender of this Deed of Trust to
Trustee for cancellation and retention and upon` payment of its fees, Trustee shall reconvey, without
warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall
be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as
"the person or persons legally entitled thereto"
RV PUB\KV ARNER \710715.1
EXHIBIT G
22. The trust created hereby is irrevocable by Trustor;
23. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their
hens, legatees, devisees, administrators, executors, successors, and assigns. The term `Beneficiary" shall
include not only the original Beneficiary hereunder but also any future successor in interest to
Beneficiary. In this Deed of Trust, whenever the context so requires, the masculine gender includes the
feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder
are joint and several;
24. Trustee accepts this Trust when this Deed of Trust, duly executed and: acknowledged, is
made public record as provided by law. Except as otherwise provided by law, the Trustee is not obligated
to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in
which Trustor; Beneficiary, or Trustee shall be a party unless brought by Trustee;
25. The undersigned Trustor requests that a copy of any notice of default and of any notice of
sale hereunder be mailed to it at the address set forth in the Deed of Trust.
26. Trustor agrees at any time and from time to time, upon receipt of a written request from
Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits, and
operating expenses of the premises, and the names of the occupants and tenants in possession, together
with the expiration dates of their leases and full information regarding all rental and occupancy
agreements, and the rents provided for by such leases and rental and occupancy agreements, and such
other information regarding the premises and their use as may be requested by Beneficiary.
27. Trustor agrees that the obligations §ecf ed by this Deed of Trust are made expressly for
the purpose of financing the acquisition of the Property, and the rehabilitation and operation of the
improvements on the Property, which will be maintained as affordable housing for persons and families
of very low income and low income, as is more specifically provided in the Secured Obligations.
38. As is provided more specifically in the Secured Obligations, the obligations of Trustor
thereunder are nonrecourse obligations of the Trustor. Neither Trustor nor any of its principals, nor any
other party, shall have any personal liability for payment of obligations arising from the Secured
Obligations, except as specifically provided therein. The sole recourse of Beneficiary shall be the
exercise of its rights against the Property except as otherwise provided in the Secured Obligations and any
related security.
29. Notwithstanding specific provisions of this Deed of Trust, non - monetary performance
hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection;
strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or
priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays
of any contractor or supplier; acts of the other party; acts or failure to act of the City, the Agency, or any
other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not
excuse performance by Beneficiary unless such act or failure to act is allowed or required by law); or any
other causes beyond the reasonable control or without the fault of the party claiming an extension of time
to perform. An extension of time for any such cause (a "Force Majeure Delay's shall be for the period of
the enforced delay and shall commence to run from the time of the commencement of the cause. If,
however, notice by the party claiming such extension is sent to the other party more than thirty (30) days
after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the
giving of such notice. Times of performance under this Deed of Trust may also be extended in writing by
the Beneficiary and Trustor.
EXHIBIT G
RV PUBVNARNP.R \710715.1
30. If the rights and liens created by this Deed of Trust shall be held by a court of competent
jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the unsecured
portion of such obligations shall be completely performed and paid prior to the performance and payment
of the remaining and secured portion of the obligations, and all performance and payments made by
Trustor shall be considered to have been performed and paid on and applied first to the complete payment
of the unsecured portion of the obligations.
31. Subject to the extensions of time set forth in Section 29, and subject to the further
provisions of this Section 31, failure or delay by Trustor to perform any term or provision respectively
required to be performed under the Secured Obligations or this Deed of Trust constitutes a default under
this Deed of Trust.
B. Beneficiary shall give written notice of.default to Trustor, specifying the default
complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default
nor shall it change the time of default.
C. Any failures or delays by Beneficiary in asserting any of its rights and remedies
as to any defaultshall not operate as a waiver of any default or of any such rights or remedies. Delays by
Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary of its right to institute
and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any
such rights or remedies.
D. If an event of default occurs under the terms of. this Deed of Trust, prior to
exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor written notice of such
default. Trustor shall have a reasonable period of time after such notice is given within which to cure the
default prior to exercise of remedies by Beneficiary under this Deed of Trust. In no event shall
Beneficiary be precluded from exercising remedies if its security becomes or is about to become
materially jeopardized by any. failure to cure a default or the default is not cured within thirty (30) days
after the notice of default is first given.
E. If an event of default occurs under the terms of the Secured Obligations, prior to
exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of such default.
As is provided more specifically in the Secured Obligations, if the default is reasonably capable of being
cured within thirty (30) days, Trustor shall have such period to effect a cure prior to exercise of remedies
by the Beneficiary under the Secured Obligations, or this Deed of Trust. If the default is such that it is not
reasonably capable of being cured within thirty (30) days, and Trustor (i) initiates corrective action within
said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Trustor
shall have such additional time as is reasonably necessary to cure the default prior to exercise of any
remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its
security becomes or is about to become materially jeopardized by any failure to cure a default.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year set
forth above.
TRUSTOR:
By:
By:
EXHIBIT G
RVPUB\KVARNER \710715.1
STATE OF CALIFORNIA )
) as.
COUNTY OF RIVERSIDE )
On . 200, before me, , Notary Public, personally
appeared personally ]mown 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 of Notary
[SEAL]
EXHIBIT a
R V PUB \KV ARNERV ! 07 t 5.1
AGENCY DEVELOPMENT PROMISSORY NOTE
Fair Market Value of the Property + $760,000 2006
This.Agency Development Promissory Note Secured by a Deed of Trust ( "Agency Development
Promissory Note') is entered into between the Arcadia Redevelopment the Agency, a California public
body, corporate and politic ( "Holder ") and Trademark Development Company, LLC, a California limited
liability company ( "Maker "). This Agency Development Promissory Note is made and given pursuant to
that certain Affordable Housing Agreement dated June 6, 2006 ( "Agreement') by and between the Maker
(as the Agency therein) and Holder (as the Developer therein). The Agreement is incorporated herein by
reference. All initially capitalized terms used but not defined herein shall have the meanings given to
them in the Agreement.
Principal
FOR VALUE RECEIVED, Maker promises to pay to the Holder at such place as the Holder may,
from time to time, designate by written notice to the Maker, the principal sum of the Fair Market Value of
the Property plus Seven Hundred Sixty Thousand Dollars ($760 ( "Principal Sum's. The Principal
Sum represents the Fair Market Value of the Property as described in Section 2.5 of the Agreement and
Agency Development Loan advanced to or on behalf of Maker pursuant to Section 3.4.1 of the
Agreement.
2. No Interest Accruals
The Agency Development Loan shall not accrue interest.
3. RRe avment Reduction of Principal: Release and Reconvevance
a. Repayment of the Agency Develonment_Loan Concurrent with the close of
escrow for the sale of each New Home to a Qualified Household, an amount equal to one -sixth (116) of
the total of the Fair Market Value of the Property and the Agency Development Loan shall be credited to
the principal balance of this Agency Development Promissory Note and the principal balance of this
Agency Development Promissory Note shall thereafter be reduced by the aforementioned credited
amount.
b. Release and Reconvevance Upon (i) the recordation of each Regulatory
Agreement executed by a Qualified Household against the New Home which is the subject of a sale
between the Maker and such Qualified Household; and (ii) credit of the amounts due and payable
pursuant to Section 3(a) hereof, Holder shall release and reconvey that New Home from the Development
Deed of Trust.
4. Maturity Date
The. Maturity Date of this Agency Development Promissory Note shall be the fifth (5`q
anniversary of the date of execution of this Agency Development Promissory Note by Maker.
RVPUB\KV ARNER \710715.1
Preoavment
This Agency Development' Promissory Note may be prepaid in whole or part at any time and
from time to time without penalty or premium Principal and interest shall be payable in lawful money of
the United States of America. Interest shall be computed based on an actual day year and the actual
number of days elapsed.
6. Security for Note
This Agency Development Promissory Note is secured by that certain Agency Development
Deed of Trust executed and dated herewith by Maker.
7. Acceleration Upon Certain Events or Upon Event of Default
7.1 Anything to the contrary in this Agency Development Promissory Note
notwithstanding , the entire unpaid principal balance and accrued interest of this Agency Development
Promissory Note shall be due and payable prior to the Maturity Date upon the occurrence of any of the
following events ( "Events of Default"):
7.1.1 Maker materially breaches any of the obligations of this Agency
Development Promissory Note or the Agreement; or
7.1.2 Maker (i) becomes insolvent or urlable to pay Maker's debts generally as
they mature, (ii) makes a general - assignment for the benefit of creditors, (iii) admits i i writing Maker's
inability to pay Maker's debts, generally as they mature, (iv) files or has filed against it a petition in
bankruptcy or a petition or answer seeking a reorganization, arrangement with creditors or other similar
relief under the federal bankruptcy laws or under any other applicable law of the United States of
America or any state thereof, or (v) consents to the appointment of a trustee or receiver for it or for a
substantial part of Maker's property; or
7.1.3 Any order, judgment or decree is entered appointing, without Maker's
consent, a trustee or receiver for it or for a substantial part of Maker's property that is not removed within
sixty (60) days from such entry; or
7.1.4 Maker voluntarily or involuntarily transfers, in any way, the Property or
any potion thereof without the Holders prior written consent, except as permitted in the Agreement; or
7.1.5 Termination of the Agreement and the Escrow due to Maker's uncured
material default.
7.2 Upon . the occurrence of one or more of the aforementioned Events of Default, the
Holder,may, at Holder's option, without prior notice (unless prior notice is required by California law),
declare the unpaid balance of this. Agency Development Promissory Note, including interest thereon, to
be immediately due and payable, and the same shall immediately become due and payable.
Notwithstanding the above, in the event of an actual or deemed entry of an order for relief with respect to
Maker under the Federal Bankruptcy Code, this Agency Development Promissory Note and all interest
and other amounts due hereon shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly waived by Maker. The
Holder may exercise Holder's option to accelerate after any Event of Default, regardless of any prior
forbearance. Any amounts which become due to the Agency pursuant to this Section 7.2 shall be payable
from all of Maker's legally available funds and assets.
RVPUB"ARNER1710715.1
8. Costs and Attorneys' Fees Paid by Maker
Maker agrees to pay the following costs, expenses and attorneys fees paid or incurred by the
Holder, or as adjudged by a court of competent jurisdiction: (a) reasonable costs of collection, costs and
expenses, fees. of experts, and attorneys fees paid or incurred in connection with the collection or
enforcement of this Agency Development Promissory Note, whether or not suit is filed; and (b) costs of
suit in such sum as the count may adjudge reasonable as attorneys fees in any action to enforce payment
of this instrument.
9. Waiver
Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and
nonpayment of this instrument, and expressly agrees that, without in any way affecting the liability of
Maker hereunder, the Holder may extend any maturity date or the time for payment of any installment
due hereunder, accept additional security, release any party liable hereunder or release any security now
or hereafter securing this Agency Development Promissory Note. Maker hereby waives, to the fullest
extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand
on this instrument or any deed of trust, security agreement, guarantee or other agreement now or hereafter
securing this Agency Development Promissory Note.
10. Seyerabilitv
if any provision of this Agency Development Promissory Note is determined by a court of
competent jurisdiction to be void or unenforceable, such determination shall not affect any other
i,, provision of this instrument, and all other provisions hereof shall remain valid and in full force and effect.
A
11. Non Waiver
No delay in demanding or failure to demand performance hereunder shall constitute a waiver by
the Agency of its right to subsequently demand such performance or to exercise any remedies for any
default hereunder. Further, in order to be effective, any waiver of any of the Agency's ,rights and
remedies hereunder shall be expressed in a writing signed by a duly appointed representative of the
Holder. Further, waiver by the Holder of any right hereunder shall not constitute a waiver of any other
right, including, but not limited to, the right to exercise any and all remedies for a different or subsequent
event of default hereunder.
MAKER:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
Date: By:
Its:
Date: By:
Its:
RVPUMVARNER1710715.1
r z
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
Redevelopment Agency of the
City of Arcadia
240 West Huntington Drive
Arcadia, California 91066
Attention: Executive Director
fFce Fxenrot -6av't Code Section
(Space above for Recorder's Use).
AGENCY DEVELOPMENT DEED OF TRUST
THIS AGENCY DEVELOPMENT DEED OF TRUST ( "Agency Development Deed of
Trust ") is made this _ day of , 2006, between Trademark Development Company, LLC, a
California limited liability company ( "Trustor'; in favor of ( "Trustee'), and
the Redevelopment Agency of the City of Arcadia, a public body, corporate and politic, whose address is
240 West Huntington Drive, Arcadia, California 91066 ( "Beneficiary'j, and is executed to secure that
certain Agency Development Promissory Note ( "Agency Development Promissory Note") of even date
herewith in the principal amount plus interest thereon as provided by the Agency Develop''ment
Promissory Note.
Section 1. Agreement: Definitions This Agency Development Deed of Trust is made with respect
to that certain Affordable Housing Agreement ( "Agreement's dated as of June 6, 2006 between Trustor as
"Developer" and Beneficiary as "Agency." All initially capitalized terms used but not defined herein
shall have the meanings given to them in the Agreement
Section 2. Grant in Trust and Security Agreement Trustor irrevocably grants, transfers and assigns
to Trustee, in trust, with power of sale, for the benefit of Beneficiary, the following property ( "Trust
Estate "):
2.1 that certain real property located at 119 and 121 Alta Street in the City of Arcadia
( "City') and identified as Assessor's Parcel Numbers 5773 - 014 -912 and 5773- 014 -913 more particularly
described in Exhibit A" attached hereto and incorporated herein by reference( "Land "); and
2.2 all buildings, structures and other improvements now or in the future located or
to be constructed on the Land ( "Improvements "); and
2.3 all other rights and interests now or in the future benefiting or otherwise relating
to the Land or the Improvements, including easements, rights -of -way, water rights and water stock (the
"Appurtenances," and together with the Land and the Improvements, the "Property").
Section 3. Obligations Secured This Agency Development Deed of Trust is given for the purpose
of securing payment and performance of the following ( "Secured Obligations "): (a) all present and future
indebtedness evidenced by the Promissory Note, (b) all present and future obligations of Trustor to
Beneficiary under this Agency Development Deed of Trust and the Agreement; and (c) all additional
RVPUMKV ARNER17107151
present and future obligations of Trustor to Beneficiary under any other agreement which is secured by
this Agency Development Deed of Trust.
Section 4. Trustor's Covenants To protect the security of this Agency Development Deed of Trust,
Trustor agrees as follows:
4.1 Payment and Performance of Secured Obligations Trustor shall pay and perform
all Secured Obligations in accordance with their respective terms.
4.2. Liens and Taxes Trustor shall pay, prior to delinquency, all taxes and perform
all other obligations which are or may become a lien affecting any part of the Trust Estate.
Section 5. Obligations With Respect to Trust Estate Neither Beneficiary nor Trustee shall be under
any obligation to preserve, maintain or protect the Trust Estate or any of Trustor s rights or interests in the
Trust Estate, or take any action with respect to any other matters relating to the Trust Estate. Beneficiary
and Trustee do not assume and shall have no liability for any of Trustor's obligations with respect to any
rights or any other matters relating to the Trust Estate,
Section 6. Remedies Upon Event of Default Upon the occurrence of any Event of Default (defined
in Section 7 hereof): (i) all Secured Obligations shall immediately become due and payable without
further notice to Trustor; (ii) upon demand by Beneficiary, Trustor shall pay to Beneficiary sums which
will be sufficient to pay all taxes which are or may become a lien affecting the Trust Estate and the
premiums for any policies of insurance to be maintained hereunder. In addition, Beneficiary may,
without notice to or demand upon Trustor, exercise any one or more of the following remedies, either
directly or through Trustee, an agent or court- appointed receiver:
(a) enter, take possession of, manage, and exercise any other rights of an owner of
the Trust Estate; and use any other properties of Trustor relating to the Trust Estate, all without payment
of rent or other compensation to Trustor,
(b) conduct any business of Trustor in relation to the Trust Estate and deal with
Trustor's creditors, debtors, tenants, agents and employees and any other persons having any relationship
with Trustor in relation to the Trust Estate;
(c) take such other action as Beneficiary deems appropriate to protect the security of
this Agency Development Deed of Trust.
6.1 Beneficiary may execute and deliver to Trustee written notice of default and of
its election to cause all or any part of the Trust Estate to be sold, which notice Trustee shall cause to be
filed for record; and after the lapse of such time as may then be required by law following the recordation
of such notice of default, and notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell such Property at the time and place fixed by it in such notice of sale, either
as a whole or in separate parcels and in such order as Beneficiary may direct ( Trustor waiving any right to
direct the order of sale), at public auction to the highest bidder for cash in lawful money of the United
States (or cash equivalents acceptable to Trustee to the extent permitted by applicable law), payable at the
time of sale. Any person, including Trustee or Beneficiary, may purchase at such sale, and any bid by
Beneficiary may be, in whole or in part, in the form of cancellation of all or any part of the Secured
Obligations. Any such sale shall be free and clear of any interest of Trustor and any lease, encumbrance
or other matter affecting the property so sold which is subject or subordinate to this Agency. Development
Deed of Trust.
RVPUB"ARNER1710715.1
6.2 All proceeds of collection, sale or other liquidation of the Trust Estate shall be
applied first to all costs, fees, expenses and other amounts (including interest) payable by Trustor under
this Agency Development Deed of Trust and to all other Secured Obligations not otherwise repaid in such
order and manner as Beneficiary may determine, and the remainder, if any, to the person or persons
legally entitled thereto.
6.3 Each of the remedies provided in this Agency Development Deed of Trust is
cumulative and not exclusive of, and shall not prejudice, any other remedy provided in this Agency
Development Deed of Trust or by applicable laws and shall be subject and subordinate to the remedies of
any holder of a senior lien permitted hereunder. Trustor, for itself and for any other person claiming by or
through Trustor, waives, to the fullest extent permitted by applicable laws, all rights to require a
marshaling of assets by Trustee or Beneficiary or to require Trustee or Beneficiary to first resort to any
particular portion of the Trust Estate or any other security (whether such portion shall have been retained
or conveyed by Trustor) before resorting to any other portion, and all rights of redemption, stay and
appraisal.
Section 7. Event of Default An "Event of Default" shall be deemed to occur if Trustor is in
material breach of any of its obligations under any of the following: (i) the Promissory Note; (ii) this
Agency Development Deed of Trust; or (iii) the Agreement and such breach is not cured within ten (10)
days after Trustor receives written notice of such breach.
Section 8. Costs. Fees and Expenses Trustor shall pay, on demand, all costs, fees, expenses,
advances, charges, losses and liabilities of Trustee and Beneficiary under or in connection with this
Agency Development Deed of Trust or the enforcement of, or the exercise of any remedy or any other
action taken by Trustee or Beneficiary under, this Agency Development Deed of Trust or the collection of
the Secured Obligations, in each case including (i) reconveyance and foreclosure fees of Trustee, (ii) costs
and expenses in connection with the operation, maintenance, preservation, or sale of the Trust Estate or
foreclosure of this Agency Development Deed of Trust, (iii) advances made by Beneficiary to complete
or partially construct all or any part of any Construction on the Land, (iv) cost of evidence of title, and (v)
the reasonable fees and disbursements of Trustee's and Beneficiary's legal counsel.
Section 9. Late Payments By accepting payment of any part of the Secured Obligations after its
due date, Beneficiary does not waive its right either to require prompt payment when due of all other
Secured Obligations or to declare a default for failure to so pay.
Section 10. Reconveyance Upon written request of Beneficiary and surrender of this Agency
Development Deed of Trust and the Promissory Note to Trustee for cancellation or endorsement, and
upon payment of its fees and charges and compliance with all other requirements for reconveyance as
specified in the Promissory Note and Agreement, Trustee shall reconvey, without warranty, all or any part
of the Property then subject to this Agency Development Deed of Trust. Any reconveyance, whether full
or partial, may be made in terms to "the person or persons legally entitled thereto," and the recitals in such
reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. Beneficiary
shall not be required to cause any Property to be released from this Agency Development Deed of Trust
until final payment and performance in full of all Secured Obligations and termination of all obligations
of Beneficiary under or in connection with the Promissory Note or until the Secured Obligations are
forgiven.
Section 11. Substitution of Trustee Beneficiary may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named in or acting under this Agency Development
Deed of Trust.
RVPUB\KVARNERV 10715.1
Section 12. Successors and Assigns This Agency Development Deed of Trust applies to and shall be
binding on and inure to the benefit of all parties to this Agency Development Deed of Trust and their
respective successors and permitted assigns.
Section 13. Acceptance Notice of acceptance of this Agency Development Deed of Trust by
Beneficiary or Trustee is waived by Trustor. Trustee accepts this Agency Development Deed of Trust
when this Agency Development Deed of Trust, duly executed and acknowledged, is made a public record
as provided by law.
Section 14. Governing Law This Agency Development Deed of Trust shall be governed by, and
construed and enforced in accordance with, the Laws of California.
Section 15. Request for Notice Trustor requests that a copy of any notice of default and a copy of
any notice of sale be mailed to Trustor at Trustor's address set forth above.
[Signatures on Following Pages]
RV PUBVNARNER \710715.1
SIGNATURE PAGE
TO
AGENCY DEVELOPMENT DEED OF TRUST
TRUSTOR:
TRADEMARK DEVELOPMENT COMPANY, LLC
a California limited liability company
By:
Its:
By:
Its:
R V PUB\K V ARNER \710715.1
NOTARY ACKNOWLEDGMENT
STATE OF CALIFORNIA )
as.
COUNTY OF LOS ANGELES )
On , 2006, before
undersigned notary public, personally
❑ personally known to me OR ❑ proved to me on. the
satisfactory evidence to be the person(s) whose name(s) is/m
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 of Notary Public
RV PUB\KV ARNER \710715. l
NOTARY ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On
undersigned notary public,
ss..
2006, before me, t
personally appear
❑ personally known to me OR ❑ proved to me on the basis
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.
Z-
Signature of Notary Public
RV PUBVCV ARNERM 0715.1
EXHIBIT A
TO
AGENCY DEVELOPMENT DEED OF TRUST
Legal Description of the Land
That real property located in the City of Arcadia, Los Angeles County, California, more
particularly described as follows:
Z:
RV PUB\RVARNER \710715.1
EXHIBIT K
TO
AFFORDABLE HOUSING AGREEMENT
Completion Guarantee
This GUARANTY AGREEMENT ( "Guaranty ") is made and entered into as of _ , by
, a ( "Guarantor ") in favor of the Redevelopment Agency of
the City of Arcadia, a public body corporate and politic ( "Agency"),
WHEREAS, the Agency and Trademark Development Company, LLC, a California
limited liability company ( "Developer ") have entered into that certain Affordable Housing Agreement
dated as of May 16, 2006 ( "Agreement ") under which the Developer has agreed to construct a six (6)
New Home, owner- occupied multi- family affordable housing project, as more specifically defined in the
Agreement (`Project').
NOW, THEREFORE, for other good and valuable consideration, receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, Guarantor hereby covenants and
agrees as follows:
1. Guarantor hereby unconditionally guarantees that the Developer shall construct
and complete the Project in accordance with the Agreement on or before the completion date specified in
the Schedule-9f Performance attached to the Agreement (subject to applicable notice, cure and extensiona
as contained in the Agreement and shall pay all costs and expenses with respect to the Construction and
completion of the Project-
2.- : If the Developer does not perform as specified in Section 1 hereof, Guarantor
unconditionally and irrevocably covenants and agrees that Guarantor shall construct and complete the
Project on or before the times required by, and otherwise in accordance with, the Agreement and pay all
costs and expenses and discharge all liabilities, with respect to such Construction and completion.
3. This Guaranty shall remain in full force and effect until such time as a Certificate
of Completion (as defined in the Agreement) has been issued by the Agency for the Project.
4. In the event the Developer.does not perform its obligations set forth in Section 1
of the Guaranty on or prior to the time such performance (or any portion thereof) is required, the Agency
may, at its option, proceed to enforce this Guaranty against Guarantor in the first instance without first
proceeding against the Developer or any other person and without first resorting to any security held by or
on behalf of the Agency as security or to any other remedies, and the liability of Guarantor hereunder
shall be in no manner affected or impaired by any failure, delay, neglect, omission or election by the
Agency not to realize upon or pursue any persons or security liable for obligations of the Developer under
the Agreement.
5. The Agency, from time to time and before or after any events of default by the
Developer under the Agreement and with or without further notice to or assent from Guarantor and
without in any manner affecting the liability of Guarantor and upon such terms and conditions as it may
deem advisable, may: (a) extend in whole or in part (by renewal or otherwise), modify, accelerate,
change or release (or consent to any of the foregoing) any other agreements, documents or instruments in
any way related to the obligations hereby guaranteed and any other indebtedness, liability or obligation of
the Developer or of any other person secondarily or otherwise liable, for any such indebtedness, liability
RV PU9UNARNER \710715.1 -
or obligation of the Developer, or waive any default with respect thereto; (b) sell, release, surrender,
modify, impair, exchange, substitute or extend any and all security at any time held by the Agency as
security for the payment or performance of the obligations of the Developer under the Agreement and any
other indebtedness, liability or obligation of the Developer ,to the Agency; and (c) settle, adjust or
compromise any claim of the Agency against the Developer or any other person secondarily or otherwise
liable (including, but not limited to, Guarantor) for the obligations of the Developer under the Agreement
or any other indebtedness, liability or obligation of the Developer. Guarantor hereby ratifies and confirms
any such extension, renewal, change, release, waiver, surrender, exchange, modification, impairment,
substitution, settlement, adjustment, compromise or consent and agrees that the same shall be binding
upon Guarantor, and Guarantor hereby expressly waives any and all defenses, counterclaims or offsets
which Guarantor might or could have by reason thereof, it being understood that Guarantor shall at all
times be bound by this Guaranty and remain liable to the Agency hereunder until all of the obligations
hereunder shall have been performed in full. Guarantor agrees that its obligations hereunder shall not be
discharged, limited or otherwise affected by any circumstances which otherwise would constitute a legal
or equitable discharge of Guarantor as surety or guarantor.
6. the Agency may without the consent of Guarantor at any time and from time to
time: (a) amend any provisions of the Agreement, and any other agreements, instruments or documents
relating in any way 'to the obligations hereby guaranteed and any change in the obligations to be
performed thereunder, (b) make any agreement with the Developer for the extension, renewal,
modification, payment, compounding, compromise, discharge, exchange, settlement, waiver or release of
any provision of the Agreement, and any other agreements, documents or instruments relating in any way
to the obligations hereby guaranteed; or of any person liable for or any security for the performance of
any oMe obligations hereby guaranteed, without notice to or the consent-of Guarantor, and (c) without
limiting the generality of the foregoing, surrender to the Developer, or to deal with or modify the form of,
any security which the Agency may at any time hold or which is held on its behalf to secure the
performance of any obligation hereby guaranteed, and the obligations herein undertaken by Guarantor
shall not be impaired or affected by any of the foregoing but shall include any other obligations thereby
undertaken by the Developer.
7. (a) Guarantor hereby waives all requirements that the Agency shall institute
any action or proceedings at law or in equity against the Developer or anyone else or with respect to any
security held by the Agency as a condition precedent to bringing an action against Guarantor upon this
Guaranty, and Guarantor further agrees to make and perform its obligations hereunder whether or not any
one or more of the following events have occurred: (a) the Agency have made any demand on the
Developer, (b) the Agency have taken any action of any nature against or has pursued any rights which
the Agency have against any other person, partnership; corporation, association, company or entity who
may be liable for performance of the obligations with respect to the completion of the Project; (c) the
Agency holds or has resorted to any security for the obligations of the Developer under the Agreerrient or
any other liabilities or obligations hereby guaranteed; or (d) the Agency has invoked any other remedies
or rights the Agency has available with respect, to the obligations of the Developer under the Agreement
or the liabilities or obligations hereby guaranteed.
(b) Guarantor shall not be released by any act or thing which might, but for
this provision of this Guaranty, be deemed a legal or equitable discharge of a surety or guarantor, or by
reason of any waiver, extension, modification, forbearance or delay of the Agency or its failure to proceed
promptly or otherwise in the enforcement of the Agreement or any other agreement, document or
instrument relating in any way to the obligations hereby guaranteed, and Guarantor hereby expressly
waives and surrenders any defense to their liability under this Guaranty based upon any of the foregoing
acts, things; agreements or waivers, including without limitation', any benefits it may have under
Califomia Civil Code Section 2815 (or any similar law in any jurisdiction).
RV PUBVNARNER1710715.1
A
8. Guarantor hereby waives presentment for payment, demand, protest, notice of
protest and of dishonor, notice of acceptance hereof, notices of default and all other notices now or
hereafter provided by law.
9. Guarantor hereby agrees that this instrument contains the entire agreement
between the parties and there is and can be no other oral or written agreement or understanding whereby
the provisions of this instrument have been or can be affected, varied, waived or modified in any manner
unless the same be set forth in writing and signed by the Agency, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.
10. This Guaranty is and shall be deemed to be a contract entered into under and
pursuant to the laws of the State of California without regard to the choice of law principles thereof.
11. Guarantor shall not, by reason of the performance of the terms and provisions of
this Guaranty, succeed to or be subrogated to the rights and privileges of the Agency against the
Developer or any other party or be deemed to be the successor or assign of either the Agency, unless and
until each and every indebtedness, liability and obligation of any kind of the Developer to the Agency
shall have been performed and discharged. In addition and without the foregoing or any other waiver.
herein, Guarantor hereby waives, in accordance with Califomia Civil Code Section 2856(a)(1), if
applicable, all rights, benefits and defenses including, without limitation, all rights of subrogation,
reimbursement, indemnification and contribution, under California Civil Code Section 2787 to 2855,
inclusive, 2899 and 3433, and under, or based upon, directly or indirectly, California Code of Civil
Procedure Section 580a, 580b, 580d and 726, if applicable (or any similar law in any other jurisdiction)
and no other prevision of this Guaranty shall be constructed as the limiting the generality of any
covenants and waivers set forth in this Section 15.
12. No delay on the part of the Agency in exercising any rights hereunder or failure
to exercise the same shall operate as a waiver of such rights. All of the rights, powers and remedies
hereunder and under any other agreement entered into between Guarantor and the Agency, shall be
cumulative and not alternative, and such rights, powers and remedies shall be in addition to all of such the
Agency's rights, powers and remedies provided by law.
13. Guarantor agrees to pay all costs and expenses which.may be incurred by the
Agency, their successors and assigns, in the enforcement of this Guaranty or otherwise relating to this
Guaranty, including, but not limited to, reasonable attorneys' fees.
14. This Guaranty shall not be deemed to affect, limit, modify or otherwise have any
impact or effect upon, or be affected, limited or modified by, any other agreement of guaranty or
suretyship given by Guarantor with respect to the Agreement. Notwithstanding anything to the contrary
herein contained, this Guaranty shall be deemed supplemental to, and not in derogation of, any such
agreement of guaranty or suretyship or any other instrument now or hereafter executed by Guarantor in
favor of the Agency.
15. In case any one or more of the provisions of this Guaranty shall be invalid, illegal
or unenforceable in any respect, the validity of the remaining provisions shall be in no way affected,
prejudiced or disturbed thereby.
16. In the event any party is added to become an additional guarantor under this
Guaranty, all obligations of Guarantor hereunder shall be joint and several with any such other party or
parties, and, under such circumstances, all references to Guarantor herein shall thereafter be deemed to
RV PUB\KV ARNER \710715. I
refer to each of such parties comprising Guarantor both individually and collectively with the other such
party or parties.
IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the day and year first
above written.
GUARANTOR:
Date: By:
Its:
Date: By:
Its:
'z>
R V PUBVNARNER \710715.1
HY ,.
EXHIBIT L
TO
AFFORDABLE HOUSING AGREEMENT
Marketing Application and Initial Owner Selection Plan
1. Overall Marketing Objective
a. To sell, as much as permitted by law and regulations, (i) two (2) of the New Homes to
income - qualified City employees who are currently living within the City limits; and (ii)
four (4) of the New Homes to income - qualified persons living within the City limits, but
who are not employees of the City.
In the event that no City employees living within the City limits desire to purchase the
New Homes, then to sell all six (6) New Homes to income - qualified persons living within
the City limits.
2. Marketing Strategy
The following marketing strategy will be utilized to achieve the overall marketing objective.
• Generate awareness of Project among City residents through the programs below:
- Direct Marketing
- Public Relations
- Directory Advertising
3. Media Advertising
• Generate and maintain prospect communication through an initial interest list comprised of
telephone inquiries resulting from publicity about the project in local news media, signage at
the development site, groundbreaking news release, and local advertising in the City.
• Build and maintain prospect and Community influencer relationships through a Community
relations program with the City departments, non - profits, Community service organizations,
and churches .
In the event sufficient interest is not generated from the City area, expand the marketing
effort to the San Gabriel Valley, and then to the greater Los Angeles/Long Beach area by
press and audio /visual announcements.
4. Geographic Market
• Primary Market Area (PMA) is within the City limits of Arcadia.
5. Basic Eligibility
RVPUB\KCVV lo715
Income ranges from Dollars $ for a single person (moderate
income) to $ Dollars ,$ for three people (moderate
income). (See below)
Income Limits (2005) 1 Person 2 People 3 People
Moderate
6. Marketing Programs
6.1 Direct Advertising in Neighborhood and Public Service Directories
- Pacific Bell and General Telephone
- Donnelly Directory
- Chamber of Commerce list of Community organizations
- Community Service Organizations themselves
-City area real estate guides
- Housing Authority of the County of Los Angeles
-City Churches, Temples, Synagogues and other places of worship
6.2 Media Advertising
- Primary Market Area (PMA) - Advertise in the Arcadia Weekly.
Wait List Policy and Procedures
7.1 Names will be placed on the interest list in order of the inquiry. An Interest Form will be
mailed to each interested party (see Attachment 1).
7.2 Only one (1) name per address/household will be permitted to submit an Interest Form .
and be placed on the waiting list. Should more than one (1) application per name or household be
discovered, all applications from that name and household will be disqualified.
7.3 In order to be put on the "Waiting List" each applicant must return the signed "Interest
Form," (Attachment 2).
7.4 Once a wait list applicant has signed and returned the completed Interest Form, they will
be given a receipt with a number. This will act as the applicant's Wait List Number. There will be only
one Wait List Number assigned to each application, no matter how many people are listed on the Interest
Form.
7.5 The Interest Form, deposit account and Wait List records and Wait List Number will be
kept at the Agency office.
7.6 Monthly contact will be made keeping the Wait List applicants aware of the selection and
subsequently the Construction progress, etc.
7.7 Applicant Screening Process- to begin 90 days prior to occupancy and the applicant
screening process will be based upon each applicant's Wait List Number.
RVPUB\KCV\710715
7.8 All applicant names on the Wait List will be placed in two lotteries — one lottery for City
employees and one lottery non -City employees (by Wait List Number). Note — only the Applicant's Wait
List Number will be entered.
7.9 The following priority shall be made%
7.9.1 Eligible applicants residing in the City for twenty (20) or more years (e.g., 6,936
days) from December 31, 2006 shall have five (5) bails with their Wait List Number placed in the Lottery
drum.
7.9.2 Eligible applicants residing in the City for more than five (5) years (e.g., 1461
days) but less than twenty (20) years (e.g., 6935 days) shall have three (3) balls with their Wait List
Number placed in the Lottery drum.
7.9.3 Eligible applicants residing in the City for more than two (2) years (e.g., 730
days) but less than five (5) years (e.g., 1,460 days) shall have two (2) balls with their Wait List Number
placed in the Lottery drum
7.9.4 All other eligible applicants shall have one (1) ball with their Wait List Number
placed in the appropriate lottery drum.
7.10 The initial selection for the two separate lotteries shall be made on at
a.m. /p.m. in Arcadia City Hall Council Chambers, 240 West Huntington Drive.
7.11 A list of the winners of le two lotteries in the order drawn shall be prepared by the
Agency
7.12 A certified letter, return receipt requested, shall be sent to the first twelve (12) names
drawn. The first six (6) applicants shall be informed of their opportunity to purchase a New Home; the
six (6) others shall be informed they may have an opportunity to purchase a New Home if one of the
initial six (6) are ineligible for any reason.
7.13 Each applicant selected then will have twenty one (21) calendar days to complete a
detailed in- person questionnaire.
7.14 Applicants will need to provide proof of social security
7.15 Applicants will need to provide proof of all income and assets (equity).
7.16 Applicants will need to review and execute a purchase agreement.
7.17 Applicants must not be in a current banRruptcy.
RVPUBHCCV1710715
A,
TO
MARKETING APPLICATION AND INITIAL OWNER SELECTION PLAN
INTEREST FORM
Note: This form must be completely and accurately filled out signed by all potential interested initial
owner s, and returned to the Agency.
1.
Applicant Name Birth Date
Apt.
City State Zip Code
Fax E -mail
2. Length of time you have lived at this address.
3. If you have lived at the above address less than three (3) years, please provide your previous
address.
Address City
4. Length of time at this address. from to
5. Spouse's Name:.
(if to be co- owner) Birth
6. Other third -party (non - spouse) proposing to share tenancy, (if any):
Name:
7. Relationship to applicant:
Birth Date
S. Assets/Equity — Per federal guidelines, the value of each applicant's and co -owner 's assets (net of
mortgages, etc.) will be calculated. This amount shall be multiplied by a ten percent (10 %) interest
factor and that figure shall be added to income. Eligibility shall be based on total annual income.
Annual Income Restrictions (per 2002 — U.S. Federal Housing and Urban Development).
RVPUBIKCV010715
1 Person 2 People 3 People
Moderate
Certification
a. I/We certify that my /our annual income is less than shown in "Annual Income Restrictions"
above.
B. I/We certify that We are reasonably certain that my /our assets /equity as defined in paragraph
8 above will not be sufficient to disqualify me /us on the basis of income.
I I/We certify that my /our current (and previous address) is as stated in paragraphs 1 to 4 above.
If you are initially selected through the Lottery, you (and your spouse and/or other third party) will be
required to provide additional information and documentation verifying all of the information above and
as may then be requested.
Applicant
Signature:
Date
Date
Date
RVPUBVCCV\710715
Applicant
Print name
Other
Signature:
(if any)
Spouse
Print name
Signature:
(if any)
Other Party
Print name
Date
Date
Date
RVPUBVCCV\710715
,
°••• •PP MEMORANDUM
Office of the City Attorney
Date: June 6. 2006
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: STEPHEN P. DEITSCH, CITY ATTORNEY. <;� 4".
SUBJECT: ORDINANCE : NO. 2215 AMENDING, IN ITS ENTIRETY,
ARTICLE VI, CHAPTER 4, PART I, DIVISION 8 OF THE
THE ARCADIA MUNICIPAL CODE PERTAINING TO THE
REGULATION OF MASSAGE THERAPY
Recommendation: Introduce
SUMMARY
As of January 1, 2006 changes to State law relating to the regulation of massage
therapists and owners and operators of massage therapy businesses became
effective. In order to address the changes in the law, certain amendments to the
City's existing massage therapy regulations have been proposed by City Staff and
the City Attorney. It is recommended that the City Council introduce Ordinance
No. 2215, amending Article VI, Chapter 4, Part I, Division 8, entitled "Regulations
Regarding Massage Therapists and Owners /Operators of Businesses that Provide
Massage Therapy ".
DISCUSSION
Amendments to the City's existing massage therapy regulations were adopted on
May 6, 2003. The City's regulations provide for the licensing and regulation of
massage therapists within the City, and require that massage therapists obtain a
Massage Therapist Identification Card by providing certain required information to
the City's Police Department, including disclosure of whether the massage therapist
is required to register as a sex offender. The City's regulations provide that a
Massage Therapist Identification Card shall be denied by the City if the massage
therapist applicant is required to register as a sex offender.
In working with the Police Department and the Development Services Department,
the City Attorney has made certain amendments and additions to the existing
massage therapy regulations to bring these regulations into conformance with the
recent changes in State'law. AB 665 requires that any city that has adopted an
ordinance providing for the licensing and regulation of massage within the city
must provide that such license be denied to both massage therapists who are
required to register as'sex offenders, as well as to owners /operators of massage
therapy businesses who are required to register as sex offenders. The City's current
massage therapy regulations govern only massage therapists, and not
owners /operators of massage therapy businesses.
Therefore, City Staff is recommending the following ordinance for consideration
by the City Council. Ordinance No. 2215 includes the following changes to the
existing massage therapy regulations:
• Adds a requirement that owners /operators of a business that provides
massage therapy applyTor and obtain an Owner /Operator Identification
Card.
• Requires the applicant for an Owner /Operator Identification Card to pay a
nonrefundable application fee at the time of filing the application.
• Requires that applicants for an Owner /Operator Identification Card disclose,
among other things, whether the applicant is required to register as a sex
offender pursuant to Penal Code section 290.
• Requires the denial of an application for an Owner /Operator Identification
Card if the applicant is required to register as a sex offender.
• Provides an appeal process for an applicant who is denied an
Owner /Operator Identification Card.
• Provides for the suspension and revocation of an Owner /Operator
Identification Card.
• Requires the annual renewal of the Owner /Operator Identification Card,
including the payment of a nonrefundable, application renewal fee.
2
The City Council on April 4, 2006 adopted a resolution establishing, among other
City fees, a nonrefundable filing fee for the processing of initial applications and
renewals for Owner /Operator Identification Card effective July 1, 2006.
FISCAL IMPACT
Due to the adoption of the application fee for processing initial applications and
renewal applications for the Owner /Operator Identification Card, it is expected that
there will be no fiscal impact to the City in regard to the City Council's action on
this item.
RECOMMENDATION
It is recommended that the City Council waive further reading and introduce
Ordinance No. 2215, an Ordinance of the City Council of the City of Arcadia,
California, amending in its entirety, Article VI, Chapter 4, Part I, Division 8 of the
Arcadia Municipal Code pertaining to the regulation of massage therapy.
CONCUR:
uw �
William R. Kelly
City Manager
3
ORDINANCE NO. 2215
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA AMENDING, IN ITS ENTIRETY,
ARTICLE VI, CHAPTER 4, PART I, DIVISION 8 OF THE
ARCADIA MUNICIPAL CODE PERTAINING TO THE
REGULATION OF MASSAGE THERAPY
WHEREAS, pursuant to AB 665, the State Legislature has amended Government Code
section 51032 relating to the regulation of massage therapists and owners and operators of
massage therapy businesses; and
WHEREAS, as amended, Government Code section 51032 requires that any city that has
adopted an ordinance providing for the licensing and regulation of massage within the city must
provide that such license be denied upon proof that the massage therapist or the owners or
operators of the massage therapy business are required to register as sex offenders; and
WHEREAS, the City has previously adopted Article VI, Chapter 4, Part I, Division 8 of
the Arcadia Municipal Code which requires, in part, that all massage therapists obtain a Massage
Therapist Identification Card by providing certain required information to the Arcadia Police
Department and obtain a City business license upon presenting such identification card to the
City's Business License Office; and
WHEREAS, an applicant for a Massage Therapist Identification Card must disclose
whether such applicant is required to register as a sex offender; and
WHEREAS, the Arcadia Municipal Code provides that an application for a Massage
Therapist Identification Card shall be denied if the applicant is required to register as a sex
offender; and
WHEREAS, in order to comply with Government Code section 51032, as amended, the
provisions of Division 8, as set forth above, must be extended to cover owners and operators of
businesses that provide massage therapy.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES ORDAIN AS FOLLOWS:
SECTION 1. The title of Article VI, Chapter 4, Part I, Division 8 of the Arcadia
Municipal Code is hereby amended to read as follows:
REGULATIONS REGARDING MASSAGE THERAPISTS AND OWNERS/
OPERATORS OF BUSINESSES THAT PROVIDE MASSAGE THERAPY
SECTION 2. Article VI, Chapter 4, Part I, Division 8 of the Arcadia Municipal Code is
hereby amended in its entirety to read as follows:
6418. FINDINGS AND PURPOSE.
The City of Arcadia is authorized, by virtue of the State Constitution and Section 51031
of the Government Code, to regulate massage therapists by imposing reasonable standards
relative to their skill and experience, and to regulate owners and operators of massage therapy
businesses to ensure the safety of clients receiving massage therapy.
The City Council finds and determines that licensing standards pertaining to massage
therapy business activities are necessary to protect the public health and safety and the personal
safety of massage therapists.
The City Council further finds that the public health and safety are best served by the
adoption of an ordinance providing for regulation of massage therapy business activities in a
manner that is consistent throughout the City of Arcadia.
The establishment of reasonable standards for issuance of a license and restrictions on
massage therapy business activities would serve to reduce the risk of illegal activities.
There is a significant risk of injury to massage clients by improperly trained and/or
uneducated massage therapists and this Division provides reasonable safeguards against injury
and economic loss.
6418.1. DEFINITIONS.
"Acupressure" shall mean the stimulation or sedation of specific meridian points and
trigger points near the surface of the body by the use of pressure applied in order to prevent or
modify perception of pain or to normalize physiological functions, including pain control, in the
treatment of certain diseases or dysfunctions of the body.
"Applicant" means the individual seeking a permit pursuant to this Division.
"Certified copy" shall mean a copy of a document that is certified by the issuer as being a
true and accurate copy of the original document or a similar document bearing an original
signature of the issuer.
"Chief of Police" means the Chief of Police of the City of Arcadia, or his or her
designated representative.
"City regulatory officials" shall mean the City's licensing authority, Building and
Planning Services, Code Services Officers, Fire Department and the Police Department.
"Disqualifying conduct" means any of the following:
(A) Pandering;
(B) Keeping or residing in a house of ill -fame;
(C) Keeping a house for the purpose of assignation or prostitution, or other disorderly
house;
(D) Prevailing upon a person to visit a place of illegal gambling or prostitution;
(E) Lewd conduct;
(F) Prostitution activities;
(G) Any offense committed in any other state which, if committed or attempted in this
state, would have been punishable as a felony;
(H) Any felony offense involving the sale of any controlled substance;
(1) Any offense committed in any other state which, if committed or attempted in this
state, would have been punishable as a felony offense involving the sale of any controlled
substance;
(J) Any misdemeanor or felony offense which relates directly to the practice of massage
therapy, whether as a massage therapy business owner or operator, or as a massage
therapist; or
(K) Any felony the commission of which occurred on the business premises where
message therapy services are performed.
"Employ" shall include, without limitation, contracting with independent contractors as
well as hiring or employing persons.
"Employee" shall include, without limitation, independent contractors and persons hired
or employed by an operator or owner of a massage therapy business.
"Health Department" means the Health Services Agency of the County of Los Angeles.
"License" shall mean the license to operate a massage therapy business in the City of
Arcadia.
"Licensing Authority" shall mean the Business License Officer or the designated official
responsible for issuing, revoking and otherwise administering the provisions of this Division.
"Massage" or "massage therapy" shall mean any method of pressure on, or friction
against, or stroking, kneading, rubbing, tapping, pounding, vibrating, or stimulating the external
parts of, the human body with the hands or with the aid of any mechanical or electrical apparatus
or appliance, with or without supplementary aids such as creams, ointments, or other similar
preparations commonly used in the practice of massage, under such circumstances that it is
reasonably expected that the person to whom the treatment is provided or some third person on
his or her behalf will pay money or give any other consideration or any gratuity therefor.
"Massage therapy business" shall mean any establishment having a fixed place of
business for the purpose of deriving income or compensation from massage therapy services.
"Massage therapist" shall mean any person who, for any consideration whatsoever,
performs or offers to perform a massage in a massage therapy business.
"Minor" means any individual under the age of eighteen (18).
"Nudity" or "semi- nudity" shall mean any of the following:
(A) The appearance or display of an anus, male or female genital, pubic region or a
female breast; or
(B) A state of undress which less than completely covers an anus, male or female genital,
pubic region or a female breast.
"Operator" or "Owner" means the individual(s) who are responsible for the management
and/or supervision of a massage therapy business. Whenever the term owner or operator is used
in this Division, it shall be deemed to include, without limitation, the manager of any massage
therapy business.
"Patron" shall mean any person who receives a massage in exchange for any form of
consideration including, but not limited to, the payment of money.
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"Recognized school of massage" shall mean any school or institution of learning which
teaches, through State certified instructors, the theory, ethics, practice, profession or work of
massage, which school or instruction complies with California Education Code Sections 94700
through 94999 and any and all successor statutes, and all regulations promulgated pursuant
thereto, and which requires a resident course of study before the student shall be furnished with a
diploma or a certificate of graduation from such school or institution of learning following the
successful completion of such course of study or learning; and shall further mean any similar
school or institution of learning in another state of the United States which has standards and
requirements equivalent to those of California Education Code Sections 94700 through 94999
and regulations promulgated pursuant thereto.
"Specified anatomical area" shall mean human genitals, pubic region or a female breast.
6418.2. ACUPRESSURE.
This Division shall also apply to the administration of acupressure.
6418.3. PERMISSIBLE MASSAGE THERAPY BUSINESS ACTIVITIES.
It shall be unlawful for any person to own, conduct, permit, or manage a business
establishment having a fixed place of business for the sole and primary purpose of deriving
income or compensation from massage therapy business activities. Massage therapy business
activities shall be purely incidental and secondary to any established business.
Massage therapists may operate at (a) an established medical office, including without
limitation an office of an acupuncturist or a physical therapist and (b) a day spa or salon.
All such established businesses shall comply with all building and zoning regulations, the
regulations of this Division, and all other applicable requirements of law.
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6418.4. NUMBER OF LICENSES PERMITTED.
Each medical office, including that of an acupuncturist, shall be limited to two (2)
massage therapists at any given time.
6418.5. HOURS OF OPERATION.
No massage therapist'shall administer a massage in any established business between the
hours of 9:00 p.m. and 7:00 a.m. The hours of operation must be displayed in a conspicuous
public place within the established business.
6418.6. BUSINESS OWNER/OPERATOR RESPONSIBILITY.
All business owners and/or operators shall be responsible for the conduct of all
employees and independent contractors. Any act or omission of any employee or independent
contractor constituting a violation of the provisions of this Division shall be deemed the act or
omission of the business owner for purposes of determining whether the owner's license shall be
revoked, suspended, denied or renewed.
No business owner and/or operator shall employ any person, or allow any person, to
conduct a massage or act as an independent contractor conducting massage who does not have a
valid Massage Therapist Identification Card and Business License issued pursuant to this
Division.
No business owner or operator shall operate a business that provides massage therapy
unless such owner and/or operator has a current Owner /Operator Identification Card, as provided
in this Division.
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6418.7 BUSINESS OWNER/OPERATOR IDENTIFICATION CARD
REQUIRED.
Any person owning or operating a business that provides massage therapy shall apply for
and obtain from the City of Arcadia a Business Owner /Operator Identification Card. The
applicant shall file a written application on the required form provided by the Arcadia Police
Department. The following information, documents and other requirements shall be included
with the submission of such application:
(A) A statement of the exact location of the business, including the full.street address and
all telephone numbers associated with said location. Operators shall provide a letter of
verification from the owner of the business, signed and dated, indicating the intent to employ the
applicant.
(B) Applicants shall also provide the following information:
(1) Full name, and all aliases used by the applicant, along with complete residence
address and telephone number.
(2) Previous residential addresses for five (5) years immediately preceding the current
address of the applicant.
(3) Driver's license number or identification number.
(4) Social security number.
(5) Whether or not the applicant is required to register as a sex offender pursuant to Penal
Code section 290.
(6) All criminal convictions, including pleas of nolo contendre (no contest), within the
last ten (10) years, including without limitation those dismissed or expunged pursuant to Penal
Code Section 1203.4, but excluding minor traffic violations; and the date and place of each such
conviction.
(7) A statement in writing and dated by the applicant certifying under penalty of perjury
that all information contained in the application is true.and correct.
(8) A statement in writing and dated by the applicant certifying under penalty of perjury
that he or she: (a) has received a copy of this Division; (b) understands its contents; and (c)
understands the duties of regarding owners /operators of businesses that provide massage therapy
as provided in this Division.
(C) Two (2) front -face portrait photographs at least two inches (2 ") by two inches (2 ") in
size taken within thirty days immediately preceding the date of application.
(D) A complete set of fingerprints taken on the date of application by the Arcadia Police
Department.
(E) Such other information and identification as the Chief of Police may require in order
to discover the truth of the matters herein specified and as required to be set forth in the
application.
(F) The applicant shall pay a nonrefundable application fee at the time of filing an
application, in the amount established by resolution of the City Council.
6418.8. MASSAGE THERAPIST IDENTIFICATION CARD REQUIRED.
Any person performing massage or massage therapy shall apply for and obtain from the
City of Arcadia a Massage Therapist Identification Card. The applicant shall file a written
application on the required form provided by the Arcadia Police Department. The following
information, documents and other requirements shall be included with the submission of such
application:
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(A) A statement of the exact business location at or from which the applicant will be
working as a massage therapist, including the full street address and all telephone numbers
associated with said location, and a letter of verification from the owner of the business, signed
and dated, indicating the intent to employ the applicant, and the following personal information
concerning the applicant:
(1) Full name, and all aliases used by the applicant, along with complete residence
address and telephone number.
(2) Previous residential addresses for five (5) years immediately preceding the current
address of the applicant.
(3) Written proof that the applicant is at least eighteen (18) years of age.
(4) Height, weight, color of hair and eyes, and gender.
(5) Driver's license number or identification number.
(6) Social security number.
(7) The occupation and employment history of the applicant, including without limitation
names, addresses and telephone numbers of all employers, for the five (5) years immediately
preceding the date of application.
(8) The complete permit history of the applicant concerning massage or massage therapy
services provided by the applicant, including without limitation whether the applicant has ever
had any license or permit, issued by any agency, board, city, or other jurisdiction, denied,
revoked or suspended, and if so, the date, location and reason for the denial, revocation or
suspension.
(9) Whether or not the applicant is required to register as a sex offender pursuant to Penal
Code section 290.
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(10) All criminal convictions; including pleas of nolo contendre (no contest), within the
last ten (10) years, including without limitation those dismissed or expunged pursuant to Penal
Code Section.1203.4, but excluding minor traffic violations; and the date and place of each such
conviction.
(11) A statement in writing and dated by the applicant certifying under penalty of perjury
that all information contained in the application is true and correct.
(12) A statement in writing and dated by the applicant certifying under penalty of perjury
that he or she: (a) has received a copy of this Division; (b) understands its contents; and (c)
understands the duties of a massage therapist as provided in this Division.
(B) Two (2) front -face portrait photographs at least two inches (2 ") by two inches (2 ") in
size taken within thirty days immediately preceding the date of application.
(C) A complete set of fingerprints taken on the date of application by the Arcadia Police
Department.
(D) A,certified copy of the applicant's diploma or certificate of graduation and certified
transcript of graduation for completion of five hundred (500) hours of instruction from a
recognized school of massage. Notwithstanding the foregoing, an applicant may renew, prior to
its expiration, a permit obtained from the City prior to the effective date of this Section 6418.7
with fewer than five hundred (500) hours of instruction; provided, however, that the requirement
for a minimum of five hundred (500) hours of instruction shall apply to any and all subsequent
renewals of the permit.
(E) Such other information and identification as the Chief of Police may require in order
to discover the truth of the matters herein specified and as required to be set forth in the
application.
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(F) The applicant shall pay a nonrefundable application fee at the time of filing an
application, in the amount established by resolution of the City Council.
6418.9. PROCESSING THE APPLICATION.
All Massage Therapist Identification Card applications, and Business Owner /Operator
Identification Card applications, together with the application fee, shall be submitted to the
Arcadia Police Department.
Following the determination by the Chief of Police that the application is complete, the
Chief of Police shall conduct an investigation, in such manner as deemed appropriate, in order to
ascertain whether such application should be approved as requested.
Once it is deemed complete, the Chief of Police shall approve, conditionally approve or
disapprove the application, within fifteen (15) business days, unless delayed by fingerprint
checking or other facts which require additional investigation to determine the qualifications of
the applicant. If the investigation requires processing beyond the fifteen (15) business day limit,
the applicant shall be notified of the delay by mail prior to the expiration of the fifteen (15)
business days.
6418.10. ISSUANCE OF IDENTIFICATION CARD.
The Chief of Police shall issue a Massage Therapist Identification Card or a Business
Owner /Operator Identification Card if there are no grounds to disapprove the application as set
forth in section 6418.16 and Section 6418.17 of this Division.
6418.11. BUSINESS LICENSE REQUIRED.
Upon receipt of a Massage Therapist Identification Card, the applicant shall furnish the
Card to the Business License Office and obtain the required business license, which includes
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obtaining approval from the Department of Development Services, Planning Services, of the
proposed business location.
Owners of businesses providing massage therapy services shall furnish the
Owner /Operator Identification Card to the Business License Office and shall maintain a current
business license. No business owner shall operate a business that provides massage therapy
services unless such owner has a current business license, and a current Owner /Operator
Identification Card.
6418.12. RENEWAL OF BUSINESS LICENSE.
A massage therapist shall annually apply for renewal of the business license and the
Massage Therapist Identification Card on forms provided by the Arcadia Police Department. The
massage therapist applicant shall pay a nonrefundable application renewal fee at the time of
filing arenewal application in the amount established by resolution of the City Council.
The massage therapist applicant must complete the entire application process if the
business license expires, or the business has been closed more than one (1) year.
Owners and/or operators of businesses that provide massage therapy shall annually apply
for renewal of the Owner /Operator Identification Card on forms provided by the Arcadia Police
Department. The owner and/or operator applicant shall pay a nonrefundable application renewal
fee at the time of filing a renewal application in the amount established by resolution of the City
Council. The owner of a business that provides massage therapy shall maintain a current
business license.
6418.13. TRANSFER OF LICENSE.
No Massage Therapist Identification Card, Business License or Owner /Operator
Identification Card shall be sold or transferred to any other person or persons.
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6418.14. CHANGE OF INFORMATION.
If, during the term of a Massage Therapist Identification Card or Business License, a
massage therapist has any change of information submitted on the original application or license
renewal application, the massage therapist shall notify the Arcadia Police Department and the
Business License Officer of such change in writing within ten (10) business days thereafter.
If, during the term of an Owner /Operator Identification Card, an owner and/or operator
has any change of information submitted on the original application or the renewal application,
the owner and/or operator shall notify the Arcadia Police Department of such change in writing.
An owner shall also notify the Business License Officer of such change, within the same time
period.
6418.15. CLOSURE OF MASSAGE THERAPIST BUSINESS LICENSE.
The massage therapist is required to notify the Business License Office by written notice,
filed within fifteen (15) business days after the last date of the performance or offering of
massage therapy services, if he or she no longer performs or offers massage therapy services in
the City of Arcadia.
6418.16. DISAPPROVAL OF BUSINESS OWNER/OPERATOR
IDENTIFICATION CARD.
If the Owner /Operator Identification Card application is denied, the Chief of Police shall
provide written notice of the disapproval to the applicant. In cases where the Chief of Police does
not respond to the applicant within fifteen (15) business days after the application is deemed
complete, the application shall automatically be deemed disapproved on the sixteenth (16th)
business day after the application was submitted and deemed complete.
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If the application is disapproved, the applicant shall not be eligible to apply for any
Owner /Operator Identification Card for a minimum of one (1) year from the date the application
was disapproved. An owner and/or operator who is denied an Owner /Operator Identification
Card may not operate a business that provides massage therapy until such owner and/or operator
obtains an Owner /Operator Identification Card.
The application shall be disapproved if the Chief of Police finds any one or more of the
following:
(A) The application is incomplete or any required information or document has not been
provided with the application;
(B) The applicant has made one or more false, misleading or fraudulent statements or
omissions of fact on the application or during the application process;
(C) The applicant has, within ten (10) years preceding the date of the application, been
convicted of disqualifying conduct, or of a lesser included offense;
(D) The applicant is required to register as a sex offender;
(E) The applicant has not met the requirements of this Division;
(F) The granting of the identification card or license would pose a threat to public health,
safety or welfare;
(G) The applicant has been convicted of an act involving dishonesty, fraud, deceit or
moral turpitude, or an act of violence, which act or acts are substantially related to the
qualifications, functions or duties of a massage therapist;
(H) The applicant has, within five (5) years preceding the date of application, had a
similar permit or license denied, suspended or revoked for cause by a licensing authority, city,
county or state.
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6418.17. DISAPPROVAL OF MASSAGE THERAPIST IDENTIFICATION
W "I "I
If the Massage Therapist Identification Card application is denied, the Chief of Police
shall provide written notice of the disapproval to the applicant. In cases where the Chief of
Police does not respond to the applicant within fifteen (15) business days after the application is
deemed complete, the application shall automatically be deemed disapproved on the sixteenth
(16th) business day after the application was submitted and deemed complete.
If the application is disapproved, the applicant shall not be eligible to apply for any
Massage Therapist Identification Card or Business License within the City of Arcadia for a
minimum of one (1) year from the date the application was disapproved.
The application shall be disapproved if the Chief of Police finds any one or more of the
following:
(A) The applicant is not eighteen (18) years of age or older;
(B) The application is incomplete or any required information or document has not been
provided with the application;
(C) The applicant has made one or more false, misleading or fraudulent statements or
omissions of fact on the application or during the application process;
(D) The applicant has, within ten (10) years preceding the date of the application, been
convicted of disqualifying conduct, or of a lesser included offense;
(E) The applicant is required to register as a sex offender;
(F) The applicant has not met the requirements of this Division;
(G) The granting of the identification card or license would pose a threat to public health,
safety or welfare;
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(1) The applicant has been convicted of an act involving dishonesty, fraud, deceit or
moral turpitude, or an act of violence, which act or acts are substantially related to the
qualifications, functions or duties of a massage therapist;
(1) The applicant has, within five (5) years preceding the date of application, had a
massage therapist permit or similar permit or license denied, suspended or revoked for cause.by a
licensing authority, city, county or state.
6418.18. PROHIBITED ACTIVITIES.
(A) It is unlawful for any massage therapist, employee, patron, or any other person
present where massage therapy services are being offered or performed, to expose or touch the
genitals or anal area, or the breast of any female, whether his or her own, or those of another
person.
(B) It is unlawful for any massage therapist, employee, patron, or any other person
present where massage therapy services are being offered or performed,, to engage in any sexual
activities.
(C) It is unlawful for any massage therapist, employee, patron, or any other person
present where massage therapy services are being offered or performed, to be in a state of nudity
or semi- nudity.
(D) No massage therapist shall provide, or offer to provide any massage therapy services
to a minor unless the minor's parent or legal guardian provides written permission.
(L) No person shall enter, be in, or remain in, any area where massage therapy services
are offered or performed while in the possession of, consuming, using or under the influence of,
any alcoholic beverage or controlled substance. Service of alcoholic beverages shall not be
permitted at any established business where massage therapy services are being performed.
17
(F) Patrons shall not be prohibited from the use of, or possession of, cellular phones,
pagers or any communication devices while massage therapy services are being offered or
performed.
(G) It is unlawful for any massage therapist, employee, patron, or any other person
present where massage therapy services are being offered or performed, to wear or have in their
possession such items as nightgowns, negligees, bathrobes, sex paraphernalia or condoms. Every
business owner and/or operator shall assure that such items are not being kept, possessed, stored
or used on the business premises. ,
(II) No electrical, mechanical or artificial device shall be used for audio and/or video
recording or for monitoring the performance of a massage, or the conversation or other sounds in
any massage room.
6418.19. OPERATIONS.,
(A) Identification Cards. Each massage therapist shall at all times have in his or her
possession the Massage Therapist Identification Card required by this Division and a valid photo
identification. Such Card and identification shall be provided to City regulatory officials upon
demand. Each owner and/or operator shall at all times have in his or her possession the
Owner /Operator Identification Card required by this Division and a valid photo identification.
Such Card and identification shall be provided to City regulatory officials upon demand.
(B) Display of License. Each massage therapist shall display. the Business License
Certificate issued pursuant to this Division in an open and conspicuous place on the business
premises where massage therapy services are performed.
(C) Clothing. Each massage therapist and all other employees shall be fully clothed at all
times. Clothing shall be fully opaque, non - transparent uniforms, similar to uniforms worn in
M
medical offices, and shall provide complete covering of the genitals, pubic area, buttocks, anal
area and chest area:
(D) Sterilizing Equipment. Each massage therapist shall provide and maintain at the
business location where the massage is performed adequate equipment for disinfecting and
sterilizing instruments used in massage.
(E) Covering. Each massage therapist shall provide to all patrons clean, sanitary and
opaque coverings capable of covering the patron specified anatomical areas, including the
genital, anus and chest area. Re -use is prohibited unless the covering is adequately cleaned.
(F) Linen. Towels and linen shall be changed and laundered promptly after each use.
Separate cabinets or containers shall be provided for the storage of clean and soiled towels and
linen.
(G) Advertising. No massage therapist operating under this Division shall place, publish
or distribute, or cause to be placed, published or distributed, any advertising matter that depicts
nudity or semi- nudity or employs language in the text of such advertising that would reasonably
suggest to a prospective patron that any other services are available other than those services
authorized by this Division.
(H) Discrimination. No massage therapist may discriminate or exclude patrons on the
basis of their race, sex, religion, age, handicap or any other classification protected under federal
or state laws, rules or regulations.
(1) Inspections and Searches. The business owner operator, and massage therapist, as a
condition to the issuance of each Massage Therapist Identification Card, Owner /Operator
Identification Card and Business License, shall be deemed to consent to the inspection of the
business premises by the City Development Services Department, Fire Department, Police
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Department and the Los Angeles County Health Department for the purpose of determining that
the provisions of this Division or other applicable laws or regulations are met.
(J) Lighting. The lighting in each massage room shall be at least one (1) sixty watt white
light bulb and shall be activated at all times while a patron is in such room or enclosure. No
strobe flashing lights may be used. No colored lights shall be used nor shall any coverings be
used which change the color of the primary light source.
(K) Ventilation. Ventilation shall be provided in accordance with the applicable
provisions of the building and construction codes adopted by the City of Arcadia.
(L) Building Permits. All building, plumbing and electrical installations shall be installed
under permit and inspected by the Development Services Department. Such installations shall be
installed in accordance with the applicable provisions of the building and construction codes
adopted by the City of Arcadia.
(M) Bath Facilities. A minimum of one (1) toilet and one (1) separate washbasin shall be
provided for patrons. Soap or detergent and hot running water shall be provided to patrons and
employees at all times and shall be located within close proximity to the area devoted to the
performance of massage therapy services. A permanently installed soap dispenser, filled with
soap, and a single service towel dispenser shall be provided at the restroom hand wash sink. No
bar soap may be used. A trash receptacle shall be provided in each toilet room.
(1) Separate Rooms. If male and female patrons are to be treated simultaneously, the
following shall be provided: separate treatment rooms, separate dressing rooms and separate
toilet facilities for each patron.
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(0) Maintenance. All facilities where massage therapy services are offered must be in
good repair and shall be thoroughly cleaned and sanitized each day the business is in operation.
All walls, floors and ceilings of each restroom and shower area shall be easily cleanable.
(P) Massage Table. A massage table shall be provided in each massage room or enclosure
and the massage shall be performed on this massage table. The tables shall have a minimum
height of eighteen inches (18 "). Two -inch (2 ") thick foam pads with maximum width of four feet
(4) may be used on a massage table and must be covered with durable, washable plastic or other
waterproof material. Beds, floor mattresses and waterbeds are not permitted on the business
premises.
(Q) Doors. No massage therapy services shall be given within any room or enclosure that
is fitted with a door capable of being locked. The business premises' exterior doors and any
doors separating the waiting or reception area from the remainder of the premises shall remain
unlocked during business hours.
(R) Posting. Each service offered, the price thereof and the minimum length of time such
service is performed shall be posted in "a conspicuous public location on the business premises.
No services shall be performed and no sums shall be charged for such services other than those
posted.
(S) Notices. The following notice shall be conspicuously posted in a location within the
business where massage, therapy services are performed that is easily visible to any person
entering the premises and in each massage room or enclosure:
IN COOPERATION WITH THE ARCADIA POLICE DEPARTMENT OUR DOORS
ARE TO REMAIN-UNLOCKED AT ALL TIMES FOR PERIODIC INSPECTION TO
INSURE OUR PROFESSIONALISM.
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(T) Roster of Employees. The business owner and/or operator shall maintain a register of
all "massage therapists and employees, showing the name, nicknames and aliases used by the
massage therapist or employee, home address, age, birth date, gender, height, weight, color of
hair and eyes, phone numbers social security number, date of employment and termination, if
any, and duties of each employee. The above information concerning each massage therapist and
employee shall be maintained at the premises of the business for a period of two (2) years
following termination. The business owner and/or operator shall make the register of massage
therapists and employees available immediately for inspection by the City regulatory officials
upon demand at all reasonable times.
(U) Records of Treatment. The business owner and/or operator shall keep a record of the
dates and hours of each treatment or service, the name and address of the patron, the name of the
massage therapist administering such service and a description of the treatment or service
rendered. A short medical history form shall be completed by the massage therapist to determine
if the patron has any communicable diseases, areas of pain, high blood pressure or any physical
condition that may be adversely affected by massage. These records shall be prepared prior to
administering any massage or treatment, and shall be retained for a period of twenty-four (24)
months after such treatment or service. These records shall be open to inspection upon demand
only by officials charged with enforcement of this Division and for no other purpose. The City
regulatory officials shall periodically inspect the records to ensure compliance with this Division.
Such records shall be kept at the business. The information furnished or secured as a result of
any such records shall be used only to ensure and enforce compliance with this Division, or any
other applicable State or Federal laws, and shall remain confidential. Any unauthorized
22
disclosure or use of such information by any officer or employee of the City shall constitute a
misdemeanor.
6418.20 SUSPENSION AND REVOCATION OF OWNER/ OPERATOR
IDENTIFICATION CARD.
The Licensing Authority shall suspend or revoke an Owner /Operator Identification Card
for any one or more of the following:
(B) The owner or operator has violated a provision of this Division;
(C) The owner or operator is convicted of any disqualifying conduct or is required to
register as a sex offender;
(D) Information contained in the approved application is false, misleading or fraudulent;
(E) The owner and/or operator refuses to allow representatives of the City to inspect
business records or the owner or operator refuses to allow representatives of the City to inspect
business premises owned or operated by the licensee and utilized for massage therapy services;
(F) The owner or operator has ceased to meet any of the requirements of this Division.
In the event of suspension or revocation of a,card issued under this Division, the
Licensing Authority shall send to the owner and/or operator a revocation or suspension notice ten
(10) business days prior to the effective date of suspension or revocation. The card shall be
deemed revoked or suspended on the eleventh (11th) business day after the City mails or
otherwise delivers notice of suspension or revocation.
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6418.21. SUSPENSION AND REVOCATION OF MASSAGE THERAPIST
IDENTIFICATION CARD AND BUSINESS LICENSE.
The Licensing Authority shall suspend or revoke a Massage Therapist Identification Card
and Business License for any one or more of the following:
(A) The administering of massage therapy services has been conducted in a manner that
does not comply with all applicable laws, including but not limited to this Division and the
City's building and zoning regulations;
(B) The license holder has violated a provision of this Division;
(C) The license holder is convicted of any disqualifying conduct or is required to register
as a sex offender;
(D) Information contained in the approved application is false, misleading or fraudulent;
(E) The license holder refuses to allow representatives of the City to inspect business
records or any premises utilized by the licensee for massage therapy services;
(F) The license holder has ceased to meet any of the requirements of this Division.
In the event of suspension or revocation of a license or card issued under this Division,
the Licensing Authority shall send to the license holder a revocation or suspension notice ten
(10) business days prior to the effective date of suspension or revocation. The license and/or card
shall be deemed revoked or suspended on the eleventh (11th) business day after the City mails or
otherwise delivers notice of suspension or revocation.
6418.22. RETURN OF LICENSE CERTIFICATE AND IDENTIFICATION
CARD.
If a Business License, Massage Therapist Identification Card, or Owner /Operator
Identification Card is suspended or revoked, the license certificate and identification card shall
i
be returned to the Licensing Authority no later than the end of the third (3rd) business day after
the effective date of suspension or revocation.
6418.23. APPEALS.
Within five (5) business days following the date of issuance by the Licensing Authority
of the revocation or suspension notice, the applicant may file a written appeal to ,the Business
Permit and License Review Board. The written appeal shall be filed at the City's Business
License Office. In the event of an appeal, the effective date of license and/or card revocation or
suspension shall automatically be continued until the date the City makes a determination
concerning the appeal. Within ten (10) business days from the filing of such appeal, a hearing
shall be conducted by the Business Permit and License Review Board at which time the
applicant may present evidence in his/her favor and in opposition to the revocation or
suspension. Within ten (10) business days from the conclusion of the hearing the Board shall
make findings and render a final decision.
6418.24. REAPPLICATION AFTER REVOCATION.
An applicant foi either a license or an identification card under this Division whose
license or identification card has been revoked may not reapply for such license or identification
card for a period of five (5) years from the date of revocation. However, the applicant may
reapply prior to five (5) years if the applicant provides clear and convincing evidence that the
ground or grounds for revocation no longer exist.
25
6418.25. EXEMPTIONS.
The provisions of this Division shall not apply to any of the following:
(A) State licensed physicians, surgeons, chiropractors, physical therapists, osteopaths, or
any registered or licensed vocational nurses working on the premises of; and under the direct
supervision of, a State licensed physician, surgeon, chiropractor or osteopath;
(B) Barbers, beauticians, manicurists and pedicurists who are duly licensed under the
laws of the State of California, except that this exemption shall apply solely to the massaging of
the scalp, face, neck, arms, hands, or feet of the client for cosmetic or beautifying purposes; and
(C) Athletic trainers certified by the State of California performing training services for
professionals, amateur or school athletic events or practices.
SECTION 3. The City Clerk shall certify to the adoption of this Ordinance and shall
cause a copy or summary of same to be published in the official newspaper of said City within
fifteen (15) days after its adoption.
Passed, approved and adopted this day of 2006.
Mayor of the City of Arcadia
ATTEST:
City Clerk
APPROVED AS TO FORM:
P_ 1 - ) Pv
City Attorney
26
CX z C '
Mryl S - M 1 3
fealty of STAFF REPORT
Public Works Services Department
June 6, 2006
To: Mayor and City Council
From: Pat Malloy, Public Works Services Direct r
Prepared by: Tom Tait, Deputy Public Works Se ices Director
Susannah Turney, Environmental ervices> Officer
Subject:
Summary
In October of 2005, the City received notice of our 11` cycle block grant from the
California Integrated Waste Management Board, to continue the City's Used Oil
Recycling Program. Since the block grants are not competitive, the City of Arcadia only
needs to submit an application package to receive each next year's 'grant. It is
recommended that the City Council adopt Resolution No. 6523 approving the
applications for grants under the Used Oil Recycling Fund under the Oil Recycling
Enhancement Act, for the next three cycles: 12 13' & 14 th .
Discussion
The California Oil Recycling Enhancement Act of 1991 mandated that the Integrated
Waste Management Board provide annual block grants to local governments for used
oil collection programs.. Each year since 1991, the City has applied for, and received
block grant funding for this program. In October of 2005, the City of Arcadia was
awarded a block grant in the amount of $14,766. Block grant funding is based on
..population rather than a competitive application process.. To continue, funding, the City
is required to submit a new resolution for subsequent years' programs.
Grant funds for used oil recycling are dispersed for a 3 -year cycle fund term.
Additionally, funds that are not spent during the first two years of the block grant cycle
will be rolled over into the last year of the block grant cycle. After the end of the third
year, (i.e., June 30, 2009) any unspent block grant funds will be returned to the State.
Mayor and City Council
June 6, 2006
Page 2
Since 1996, the program has expanded to include five used oil collection centers for
residents to recycle their used motor oil. The following five (5) locations are used for oil
collection:
• Kragen Auto Parts
37 Las Tunas Drive
• Firestone
1500 S. Baldwin Avenue
• VJ's Auto Service
400 North First.Avenue
• Jiffy Lube.
5 W. Huntington Drive
• C & L Collision Center
132 Las Tunas Drive
Similar to past years, the City will continue to purchase used oil collection containers,
funnels, reusable oil changing' mats and shop rags to distribute to Arcadia residents -
free of charge. Grant funds will also be used to'promote the proper collection and
disposal of used -oil through various public education mediums (i.e., brochures,
newspaper ads and public service announcements).
Staff recommends, that the City Council, approve Resolution No. 6523 approving the
filing of the City of Arcadia's used oil applications for the 12 through 10 block grant
cycles and authorize the City Manager to . execute. any ' agreement, contracts, and
requests for payment regarding this matter on behalf of the City.
Fiscal Impact
By approving the next used oil grant application, the .City will receive approximately
$14,485 (according to population) to implement used oil recycling activities for fiscal
years 2007 -09 without impacting the General Fund.
Recommendation
1. Adopt Resolution No. 6523, approving the applicationlor,grant.funds
under the Used Oil Recycling Enhancement Act
2. Authorize the City Manager'to execute. and file : on behalf of the City
of Arcadia all forms necessary regarding this Grant with' the
California Integrated Waste Management Board.
3. Appropriate $14,465 to Implement the used, oll collection program
trust fund. .
Approved, by:
William R. Kelly, City Manager
PM:TT:ST:dw
Attachment — Resolution No. 6523
RESOLUTION NO. 6523
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, APPROVING THE APPLICATION
FOR GRANT FUNDS UNDER THE USED OIL RECYCLING
ENHANCEMENT ACT
WHEREAS, the people of the State of California have enacted the
California Oil Recycling Enhancement Act that provides funds to cities and
counties for establishing and maintaining local used oil collection programs
that encourage recycling or appropriate disposal of used oil; and
WHEREAS, the people of the State of California have enacted
Assembly Bill 1220 (Eastin, 1993) that provides grants to local govergments
to establish and implement waste diversion and separation programs to
prevent disposal of hazardous waste, including household hazardous waste,
in solid waste landfills; and
WHEREAS, the California Integrated Waste Management Board has
been delegated the responsibility for the administration of these programs
within the state, setting up necessary procedures governing application by
cities and counties under these programs; and
WHEREAS, the applicant will enter into an agreement with the State of
California for implementation of a used oil collection program.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA DOES HEREBY RESOLVE AS FOLLOWS:
1
SECTION 1. The City Council authorizes the submittal of 12` 13` &
14 cycle block grant applications to the California Integrated Waste
Management Board for the Used Oil Block Grant, Fiscal years 2007 through
2009.
SECTION 2. The City Council appoints the City Manager, or his/her
designee, to conduct all negotiations and to execute and submit all required
documents including, but not limited to applications, agreements,
amendments, and payment requests for the purposes of securing grant funds
and to implement and carry out the purposes specified in the grant
application.
SECTION 3. The City Clerk shall certify to the adoption of this
Resolution.
Passed, approved and adopted this 6th day of June , 2006.
/S/ ROGER CHANDLER
Mayor of the City of Arcadia
ATTEST:
City Clerk
APPROVED AS TO FORM:
� 1 )
City Attorney
2
s
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS:
CITY OF ARCADIA )
I, JAMES H. BARROWS, City Clerk of the City of Arcadia, hereby certifies
that the foregoing Resolution No. 6523 was passed and adopted by the City Council of
the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular
meeting of said Council held on the 6th day of June, 2006 and that said Resolution was
adopted by the following vote, to wit:
AYES: Council Member Amundson, Segal, Wuo and Chandler
NOES: None
ABSENT: Council Member Harbicht
"' / JAMES H. BARR
City Clerk of the City of Arcadia
3
V
0 POR.Tm9 STAFF REPORT
Development Services Department
June 6, 2006
TO: Mayor and City Council
Chairperson and Agency Board Members
FROM: Don Penman, Assistant City Manager /Development Services Director
By: Jason Kruckeberg, Community Development Administrator 7LX
SUBJECT: ARA Resolution No. 220 and City Council Resolution No. 6528 adopting
local guidelines for implementing the California Environmental Quality
Act (Public Resources Code section 21000 et seq.)
Recommendation: Adopt
SUMMARY
Attached for City Council and Redevelopment Agency consideration is City Resolution
No. 6528 and ARA Resolution No. 220 adopting revised 2006 local guidelines for
implementing the California Environmental Quality Act (CEQA).
The proposed 2006 Guidelines are an update of the previous guidelines adopted by
the City Council and the Agency Board on June 27, 2005.
The Development Services Department is recommending that the Redevelopment
Agency and the City Council take the following two separate actions:
Acting as the Redevelopment Agency, adopt ARA Resolution No. 220;
amending and adopting local guidelines for implementing the California
Environmental Quality Act (Public Resources Code § § 21000 et seq.); and
2. Acting as the City Council, adopt Resolution No. 6528; adopting local
guidelines for implementing the California Environmental Quality Act (Public
Resources Code §§ 21000 et seq.)
BACKGROUND
The California Environmental Quality Act (CEQA), a part of the Public Resources
Code (Sections 21000 et seq.), is California's most important environmental law. It
requires all public agencies within the state to evaluate the environmental effects of
their actions, avoiding or reducing, when feasible, the significant environmental
impacts of their decisions.
Adoption CEQA Guidelines
June 6, 2006
Page 2
CEQA requires that all agencies adopt specific objectives, criteria and procedures for
evaluating public and private projects.
On June 27, 2005, the City Council adopted Resolution No. 6431 and the
Redevelopment Agency adopted ARA Resolution No. 210 adopting the 2005 CEQA
guidelines. Due to the changes in CEQA during the past year, new guidelines are
proposed for adoption.
DISCUSSION
There have been very few significant statutory changes to CEQA during the last year.
In 2005, the Legislature passed and the Governor signed only two bills relating to
CEQA; all other CEQA bills failed to pass. The following is a brief summary of these
bills:
1. Assembly Bill 1170 (AB 1170):
Specific exemption from CEQA for seismic retrofit work and joint use
agreements undertaken by the San Francisco Bay Area Rapid Transit
District (BART). The impact of the bill is limited to certain BART facilities and
has no impact on local guidelines.
2. Senate Bill 648 (SB 648):
Modifies the way the public review period is calculated for documents
submitted to the State Clearinghouse. Essentially, the bill extends the public
review period for as long as the state review period lasts. Because the State
Clearinghouse has three days after receipt to distribute environmental
documents, the public review period should be calculated as beginning
three (3) business days after the State Clearinghouse receives the
documents. Previously, it had been generally accepted that the review
period began the day the documents are received by the Clearinghouse.
Provides new language covering lead agency disputes (e.g. situations
where there is confusion over which jurisdiction should assume the lead role
on environmental documentation). The bill prohibits the state from
designating a lead agency in the absence of a "dispute ".
The City Attorney's office has prepared a set of updated Local CEQA Guidelines for
the City and Redevelopment Agency to adopt in compliance with the above - described
CEQA requirements. These guidelines are tailored to the City's and Agency's specific
needs and provide step -by -step procedures for evaluating projects prior to approval.
The updated guidelines also provide instructions and revised forms for preparing any
environmental documents required by CEQA.
M
Adoption CEQA Guidelines
June 6, 2006
Page 3
FISCAL IMPACT
None
RECOMMENDATION
It is recommended that there be two separate actions as follows:
Redevelopment Agency
That the Redevelopment Agency adopt Resolution No. ARA 220, a resolution of
the Arcadia Redevelopment Agency of the City of Arcadia, California, amending
and adopting local guidelines for implementing the California Environmental
Quality Act (Pub. Resources Code Section 21000 et seq.).
City Council
That the City Council adopt Resolution No. 6528, a resolution of the City Council
of the City of Arcadia, California, amending and adopting local guidelines for
implementing the California Environmental Quality Act (Pub. Resources Code
Section 21000 et seq.).
Approved:
William R. Kelly, City Manager /Executive Director
Attachment: 1) ARA Resolution No. 220
2) City Council Resolution No. 6528
RESOLUTION NO. ARA -220
A RESOLUTION OF THE ARCADIA REDEVELOPMENT
AGENCY OF THE CITY OF ARCADIA, CALIFORNIA,
AMENDING AND ADOPTING LOCAL GUIDELINES
FOR IMPLEMENTING THE CALIFORNIA ENVIRONMENTAL
QUALITY ACT (PUB. RESOURCES CODE SECTION
21000 ET SEQ.)
WHEREAS, the California Legislature has amended the California
Environmental Quality Act ( "CEQA ") (Pub. Resources Code §§ 21000 et seq.) and
the State CEQA Guidelines (Cal. Code of Regs, title 14, §§ 15000 et seq.) and the
California courts have interpreted specific provisions of CEQA; and
WHEREAS, Section 21082 of CEQA requires all public agencies to adopt
objectives, criteria and procedures for the evaluation of public and private projects
undertaken or approved by such public agencies, and the preparation, if required,
of environmental impact reports and negative declarations in connection with that
evaluation; and
WHEREAS, the Arcadia Redevelopment Agency ( "Agency ") must revise its
local guidelines for implementing CEQA to make them consistent with the current
provisions and interpretations of CEQA;
NOW, THEREFORE, THE ARCADIA REDEVELOPMENT AGENCY
HEREBY RESOLVES AS FOLLOWS:
SECTION 1. The Agency adopts "Local Guidelines for Implementing the
California Environmental Quality Act (2006 Revision)," a copy of which is on file
at the offices of the Agency and is available for inspection by the public.
SECTION 2. All prior actions of the Agency enacting earlier
guidelines are hereby repealed.
SECTION 3. The Secretary of the Agency shall certify to the adoption
of this Resolution.
Passed, approved and adopted this 6th day of June 2006.
/S/ ROGER CHANDLER
Chairperson
Arcadia Redevelopment Agency
ATTEST:
Secretary .
Arcadia Redevelopment Agency
APPROVED AS TO FORM:
P
Stephen P. Deitsch
Agency Attorney
z
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS:
CITY OF ARCADIA )
I, JAMES H. BARROWS, Secretary of the Arcadia Redevelopment Agency of
the City of Arcadia, hereby certifies that the foregoing Resolution No. ARA -220 was
passed and adopted by the Arcadia Redevelopment Agency of the City of Arcadia,
signed by the Chairperson and attested to by the Secretary at a regular meeting of said
Agency held on the 6th day of June, 2006 and that said Agency Resolution was
adopted by the following vote, to wit:
AYES: Agency Members Amundson, Segal, Wuo and Chandler
NOES: None
ABSENT: Agency Member Harbicht
..
.. �.
Secretary of the Arcadia
Redevelopment Agency
3
RESOLUTION NO. 6528
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARCADIA, CALIFORNIA, AMENDING AND ADOPTING
LOCAL GUIDELINES FOR IMPLEMENTING THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT (PUB.
RESOURCES CODE §§ 21000 ET SEQ.)
WHEREAS, the California Legislature has amended the California
Environmental Quality Act ( "CEQA ") (Public Resources Code §§ 21000 et seq.)
and the State CEQA Guidelines (California Code of Regs., title 14, §§ 15000 et
seq.) and the California courts have interpreted specific provisions of CEQA; and
WHEREAS, Section 21082 of CEQA requires all public agencies to adopt
objectives, criteria and procedures for -the evaluation of public and private projects
undertaken or approved by such public agencies and the preparation, if required, of
environmental impact reports and negative declarations in connection with that
evaluation; and
WHEREAS, the City of Arcadia ( "City") must revise its local guidelines for
implementing CEQA to make them consistent with the current provisions and
interpretations of CEQA.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, HEREBY RESOLVES AS FOLLOWS:
SECTION 1. The City adopts "Local Guidelines for Implementing the
California Environmental Quality Act (2006 Revision)," a copy of which is on file
1
at the Development Services Department and is available for inspection by the
public.
SECTION 2. All prior actions of the City enacting earlier guidelines
are hereby repealed.
SECTION 3. The City Clerk shall certify to the adoption of this
Resolution.
Passed, approved and adopted this bth day of j,,ne 2006.
/S /ROGER CHANDLER
Mayor of the City of Arcadia
ATTEST:
It"' t,6A,AAF 1 ,q H, B.AR DNS
City Clerk
APPROVED AS TO FORM:
Stephen P. Deitsch
City Attorney
2
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS:
CITY OF ARCADIA )
I, JAMES H. BARROWS, City Clerk of the City of Arcadia, hereby certifies
that the foregoing Resolution No. 6528 was passed and adopted by the City Council of
the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular
meeting of said Council held on the 6th day of June, 2006 and that said Resolution was
adopted by the following vote, to wit:
AYES: Council Member Amundson, Segal, Wuo and Chandler
NOES: None
ABSENT: Council Member Harbicht
■
City Clerk of the City of Arcadia
3
y
STAFF REPORT
Administrative Services Department
DATE: June 6, 2006
TO: Mayor and City Council
FROM: Tracey L. Hause, Administrative Services Directo ''w �
By: Michael A. Casalou, Human Resources Admin4isrator
SUBJECT: Resolution No. 6529 authorizing the City Manager to execute the Joint
Powers Agreement for the California Insurance Pool Authority (CIPA), the
CIPA Workers' Compensation Program, and the CIPA Litigation
Management Guidelines: and delegate the authority to the City Manager
Recommendation: Adopt
SUMMARY
Staff is recommending the City Council adopt Resolution No. 6529 authorizing the City
Manager to execute the Joint Powers Agreement for the California Insurance Pool
Authority (CIPA), the CIPA Workers' Compensation Program, and the CIPA Litigation
Management Guidelines; and delegate the authority to the City Manager to appoint a
representative and alternate to serve as a director on the CIPA Board.
BACKGROUND
The City of Arcadia has been a member of the Independent Cities Risk Management
Authority (ICRMA) since 1980. This JPA provides member cities with excess insurance
coverage for general liability and workers' compensation as well as other risk
management services.
Currently, the City of Arcadia participates in ICRMA's liability, workers' compensation
and property insurance programs. The ICRMA Bylaws require member cities to commit
to three full years of participation. This year represents the City of Arcadia's third year
of participation in all three programs. As a result, staff began to explore alternative
coverage options back in June 2005 that would provide similar programs and services.
This process involved researching other JPA's, as well as considering stand -alone
policies. To help with this process, staff solicited recommendations from several other
cities as well as Colen and Lee, the City's Third Party Administrators for both liability
and workers' compensation. As a result, staff is recommending withdrawing from
ICRMA and begin participating in the California Insurance Pool Authority (CIPA)
effective July 1, 2006.
j t
Mayor and City Council
June 6, 2006
Page 2 of 2
CIPA was in 1978 for the purpose of reducing insurance costs through the
joint purchase of liability insurance. In 1986, the liability program shifted to a "pooling"
format. CIPA has purchased excess workers' compensation insurance since 1986. In
2002, CIPA established a workers' compensation pool. Since CIPA's inception, group
purchase options have been broadened to include Property, Boiler & Machinery,
Faithful Performance Bond,. and Employment Practices Liability. These fully insured
policies are offered through joint purchase programs with no risk sharing between
members.
As of June 2006, the cities in CIPA's pooled liability program include Brea, Cypress,
Irvine, Laguna Beach, Los Alamitos, Montclair, Orange, Tustin, Westminster and Yorba
Linda. The City of Buena Park is also expected to begin participation effective July 1,
2006.
The primary factor behind staffs recommendation to withdraw from ICRMA is the cost
of coverage. Though final costs for CIPA and ICRMA for the 2006107 fiscal year will not
be available until later this month, estimates provided by both indicate the premium for
both liability and workers' compensation for ICRMA is expected to be $500,000, while
CIPA's programs are expected to come in at $270,000. Therefore, staff estimates a
savings from workers' compensation and liability premiums of $230,000 by joining CIPA
rather than remaining with ICRMA. In addition, CIPA's premiums have historically been
stable and not varied more than 10 percent annually.
As one of the original cities in ICRMA, Arcadia has enjoyed a long- standing relationship
with the Authority and has appreciated the expertise provided by both professional staff
and other member cities. However, like most public agencies, we must continually
explore new coverage options and services to reduce losses and associated costs and
as a result, staff is of the opinion that withdrawal from ICRMA and participation in CIPA
is necessary to achieve our present fiscal goals.
FISCAL IMPACT
Participation in CIPA's liability and workers' compensation programs is estimated to
save approximately $230,000 in premiums for fiscal year 2006107.
RECOMMENDATION
Adopt Resolution No. 6529 authorizing the City Manager to execute the Joint
Powers Agreement for the California Insurance Pool Authority (CIPA), the CIPA
Workers' Compensation Program, and the CIPA Litigation Management
Guidelines; and delegate the authority to the City Manager to appoint a
representative and alternate to serve as a director on the CIPA Board.
Approved: W "I
William R. Kelly, City Manager
RESOLUTION NO. 6529
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ARCADIA, CALIFORNIA, AUTHORIZING
THE CITY MANAGER TO EXECUTE THE JOINT
POWERS AGREEMENT FOR THE CALIFORNIA
INSURANCE POOL AUTHORITY (CIPA), THE CIPA
WORKERS' COMPENSATION PROGRAM, AND THE
CIPA LITIGATION MANAGEMENT GUIDELINES;
AND DELEGATE THE AUTHORITY TO THE CITY
MANAGER TO APPOINT A REPRESENTATIVE AND
ALTERNATE TO SERVE AS A DIRECTOR ON THE
CIPA BOARD
WHEREAS, the City of Arcadia is presently participating in the
Independent Cities Risk Management Authority ( "ICRMA ") Joint Powers
Authority ( "JPA ") for - ,liability, workers' compensation and other risk
programs; and
WHEREAS, the City will end participation in the ICRMA JPA and its
risk programs effective July 1, 2006; and
WHEREAS, the City of Arcadia desires to participate in the
California Insurance Pool Authority ( "CIPA ") Joint Powers Authority
effective July 1, 2006, for the purpose of minimizing risk through any, all or
any combination of the following: pooling of risk, joint funding of
insurance or risk reserves in any legal manner, formation or rental of a
captive insurer, establishing certain self - insured reserves against losses and
jointly purchasing insurance, excess insurance, re- insurance and
1
administrative services in connection with a cooperative program of risk
management.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA DOES HEREBY FIND, DETERMINE, AND
RESOLVE AS FOLLOWS:
SECTION 1. The City Council hereby approves, and the City
Manager is hereby authorized and directed to execute, the Joint Powers
Agreement for CIPA, the CIPA Workers' Compensation Program
application, the CIPA Litigation Management Guidelines, and any and all
other documents required of the City to participate in CIPA programs.
SECTION 2. The City Council authorizes the City Manager to
appoint a representative and alternate to serve on behalf of the City as a
director on the CIPA Board.
SECTION 3. The City Clerk shall certify to the adoption of this
Resolution.
[SIGNATURES ON NEXT PAGE]
Passed, approved and adopted this 6 day of June 2 2006
/S/ ROGER CHANDLER
Mayor of the City of Arcadia
ATTEST:
/ S/ JAMES H. BA RRO WS
City Clerk of the City of Arcadia
APPROVED AS TO FORM:
9:N P l�q�
City Attomey
3
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS:
CITY OF ARCADIA )
I, JAMES H. BARROWS, City Clerk of the City of Arcadia, hereby certifies
that the foregoing Resolution No. 6529 was passed and adopted by the City Council of
the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular
meeting of said Council held on the 6th day of June, 2006 and that said Resolution was
adopted by the following vote, to wit:
AYES: Council Member Amundson, Segal, Wuo and Chandler
NOES: None
ABSENT: Council Member Harbicht
/ S/ JADES H. BARRO
City Clerk of the City of Arcadia
9
. �\,
°��ajA�tA°e� STAFF REPORT
Police Department
DATE: June 6, 2006
TO: Mayor and Members of the City Council
FROM: Robert P. Sanderson, Chief of PoliceA"
By: Nancy Chik, Management Analys
SUBJECT: Renewal of Professi Services Agreement Animal Control
Services
Recommendation: Authorize the City Manager to renew the annual
professional services agreement with Pasadena Humane Society &
SPCA for animal control services in the amount of $73,613.73.
SUMMARY
The City has a professional services agreement with the Pasadena Humane
Society & SPCA (PHS) for animal control services, and the current agreement will
expire on June 30, 2006. It is recommended that the City Council approve the
professional services agreement renewal with PHS from July 1, 2006, through June
30, 2007, in the amount of $73,613.73.
DISCUSSION
Since 1993, the City has had an agreement with PHS for animal control services,
and they have provided adequate service to this community. The agreement
defines our access to PHS reports and specifies that, whenever practicable,
unarmed humane officers will be dispatched to handle Arcadia calls for service. In
an effort to resolve our dog licensing concerns, PHS has a canvasser go door -to-
door in the City to make sure dog owners are in compliance. PHS also has a
computerized licensing renewal system and is working with local veterinarians in
obtaining vaccination records and conducting follow -up contacts with pet owners.
In addition, PHS offers low cost spay /neutering and vaccination services to Arcadia
residents.
The City's current annual agreement with PHS requires the City to pay $71,469.64
for animal control services. Due to additional operational cost, PHS has increased
the renewal fee by three percent (3 %), which equates to an increase of $2,144.09
per annum.
FISCAL IMPACT
For the term of the professional services agreement, from July 1, 2006, to June 30,
2007, the fees for animal control services will be $73,613.73. This amount will
need to be budgeted in the City's Operating Budget for FY 2006 -2007.
RECOMMENDATION
Authorize the City Manager to renew the annual professional services
agreement with Pasadena Humane Society & SPCA for animal control
services, from July 1, 2006, to June 30, 2007, in the amount of $73,613.73.
Approved:
=—g
William R. Kelly, City Manager
STAFF REPORT
Police Department
DATE:
June 6, 2006
TO: Mayor and Members of the City Council
FROM: Robert P. Sanderson, Chief of Police' l�
By: Nancy Chik, Management Analw_�K
SUBJECT: Renewal of Professional Services Aareement — Crossina Guard
Services
Recommendation: Authorize the City Manager to renew the annual
professional services agreement with All City Management
Services for crossing guard services in the amount of $133,199.
SUMMARY
The City has a professional services agreement with All City Management
Services for crossing guard services, and the current agreement will expire on
June 30, 2006. The Police Department administers the agreement on behalf of
the City and recommends the renewal from July 1, 2006, to June 30, 2007, at a
cost of $133,199.
BACKGROUND & DISCUSSION
In 2000, as a long -term cost savings strategy, the City opted to enter into a
professional services agreement with All City Management Services to provide
crossing guards for the City of Arcadia. Since the adoption of the agreement, All
City Management Services has adhered to all conditions and has proven to be a
responsible service provider.
Prior to acquiring the crossing guard services, the Police Department was
continually using staff members, including police officers, to fill vacant posts that
occurred as a result of sickness or injury to crossing guards. During the past six
years, the Department has not had to use any staff, nor been required to provide
oversight to crossing guard operations, other than designating a staff member to
monitor agreement compliance. Further, the City has recognized a cost savings
in the area of worker's compensation insurance and liability management.
All City Management Services provides crossing guard services to over 70 cities
and school districts throughout the State. They are the only company with
proven experience and the infrastructure to provide such service. Thus, the
Police Department considers that they are a sole source provider for crossing
guards.
Due to additional operational cost, as well as cost of living adjustments made
within the company, All City Management Services has increased the contract
fee by 5.5% which equates to an increase of $6,924 per. annum. Last year, the
company agreed to forego a contract fee increase; therefore, this will be the first
rate increase in two years.
FISCAL IMPACT
Renewal of the professional services agreement will cost $133,199, and the
amount has been budgeted in the City's General Fund.
RECOMMENDATION
Authorize the City Manager to renew the annual professional services
agreement, from July 1, 2006, to June 30, 2007, with All City Management
Services for crossing guard services in the amount of $133,199.
Approved:
William R. Kelly, City Manager
t o STAFF STAFF REPORT
Police Department
DATE: June 6, 2006
TO: Mayor and Members of the City Council, �/
FROM: Robert P. Sanderson, Chief of Police ` { l0
By: Nancy Chik, Management Analys�
SUBJECT: Uniform Vendors — Police Department
Recommendation: Waive the formal bid process and approve
Tom's Uniforms, Uniform Express, and West End Uniforms as
uniform vendors for the Police Department.
SUMMARY
The Police Department budget allocated $80,400 to purchase uniforms, leather
gear, and related support equipment for employees, reserve officers, and
volunteers. The Department uses Tom's Uniforms, Uniform Express, and West
End Uniforms as vendors.
City of Arcadia purchasing guidelines require City Council approval for open
purchase order expenditures exceeding $5,000 with any single vendor. Because
each of the aforementioned uniform vendors generally exceed that threshold on
an annual basis, the Police Department requests approval to use these vendors
for Fiscal Year 2006 -2007.
BACKGROUND AND DISCUSSION
The Police Department has used Tom's Uniforms in Alhambra, Uniform Express
in Montebello, and West End Uniforms in Montclair as uniform vendors for the
past 15 years. Our experience with these suppliers has been very good.
Although the amount of money expended with each vendor varies from year to
year, each vendor generally receives a minimum of $5,000 in expenditures that
are paid through pre- approved open purchase orders. Expenditures made with
each vendor are dependent upon what specific items are needed and whether
certain items are routinely available through the vendor. A number of variables
affect which vendor officers and employees select, and some factors include:
uniform material, size, proximity to the officers' homes, and hours of operation.
The current practice of using' multiple vendors to meet the uniform needs of the
Police Department has been cost effective and efficient from an operational
standpoint. In previous cost comparisons, the prices for items were all
competitive between the vendors.
FISCAL IMPACT
The amount of $80,400 has been allocated in the Police Department budget for
uniforms and related support equipment for FY 2006 -2007.
Waive the formal bid process and approve Tom's Uniforms, Uniform
Express, and West End Uniforms as uniform vendors for Police Department
uniforms.
Approved:
q
William R. Kelly, City Manager
STAFF REPORT
Police Department
DATE: June 6, 2006
TO: Mayor and Members of the City Council
FROM: Robert P. Sanderson, Chief of Police
By: Nancy Chik, Management Analyst-
SUBJECT: Police Tactical Field Eauioment Vendors —P
Recommendation: Waive the formal bid process and approve
Aardvark Tactical and Adamson Industries as police field tactical
equipment vendors for the Police Department.
SUMMARY
The Police Department budget allocated $70,000 to purchase police field
supplies and equipment. Aardvark Tactical and Adamson Industries are two of
the primary vendors used by the Department.
City of Arcadia purchasing guidelines require City Council approval for open
purchase order expenditures exceeding $5,000 with any single vendor. Because
each of the aforementioned vendors generally exceed that threshold on an
annual basis, the Police Department requests approval to use these vendors for
Fiscal Year 2006 -2007.
BACKGROUND AND DISCUSSION
The Police Department has used Aardvark Tactical and Adamson Industries as
vendors for over 15 years. Our experience with these suppliers has been very
good.
Adamson Industries is the primary supplier of police field tactical equipment in
Southern California, and they have a large inventory and competitive pricing.
Aardvark Tactical supplies our officers with ballistic vests and other
miscellaneous support equipment, and they also offer competitive pricing.
Although the amount of money expended with each vendor varies from year to
year, each vendor generally receives a minimum of $5,000 in expenditures that
are paid through pre- approved open purchase orders. Expenditures made with
each vendor are dependent upon what specific items are needed and whether
certain items are routinely available through the vendor.
FISCAL IMPACT
The. amount of $70,000 has been allocated in the Police Department budget for
police field tactical equipment for FY 2006 -2007.
RECOMMENDATION
Waive the formal bid process and approve Aardvark Tactical and Adamson
Industries as police field tactical equipment vendors' for the Police
Department
Approved:
William R. Kelly, City Manager
4"
Z;
STAFF REPORT
RECREATION AND COMMUNITY SERVICES DEPARTMENT
June 6, 2006
TO: ARCADIA CITY COUNCIL
FROM: '�ROBERTA M. WHITE, DIRECTOR OF RECREATION AND COMMUNITY SERVICES
SUBJECT: Authorize the City Manager to enter into a contract with Arcadia Unified School
District to provide bus transportation services for the Recreation and Community
Services Department for the period of approximately June 19, 2006 through August
18, 2006 in the amount of $33,100
Recommendation: Approve
SUMMARY
It is recommended that the City Council accept the bid from the Arcadia Unified School District to
provide bus transportation services for the Recreation and Community Services Department for the 2006
Summer Season and authorize the City Manager to enter into a contract with Arcadia Unified School
District in the amount of $33,100.
BACKGROUND
The City of Arcadia Recreation and Community Services Department has operated a Summer Day Camp
Program at Wilderness Park for over 40 years. There is also a Sports Camp Program offered at the
Arcadia High School campus that has operated for almost the same number of years. During this time the
camping program has grown in terms of the number of weeks offered and the number of campers
attending. The department also offers weekly family excursions on Fridays each summer.
DISCUSSION
On April 25, 2006, the City Purchasing Officer posted notice that the City of Arcadia was accepting bids
to provide bus transportation services. The Quotation Request was sent to nine (9) transportation
companies and the City received two (2) responses at the bid opening on May 16, 2006, The Notice
Inviting Bids was published on May 1 & 4, 2006. The bids received were Arcadia Unified School
District and Elite School Services, with the school district being the lowest responsive bidder. These
prices are based on the quoted cost per day, per bus, times the number of busses needed per activity.
DISCUSSION (Cont.)
For 2006 there will be nine (9) weeks of Day Camp for elementary school -aged children and three (3)
weeks of Sports Camp for elementary and middle school -aged youth. The Friday Family Excursions are
for all ages. The bid quotation requested two to four (2 -4) busses per day, Monday through Thursday and
(3 -6) busses per day on Fridays.
Staff is familiar and satisfied with transportation services provided by the Arcadia Unified School District
and have met with them to determine that they can meet the bid specifications. The Arcadia Unified
School District previously provided bus transportation for the Arcadia camp and excursion programs.
FISCAL IMPACT
The proposed bus transportation cost of $33,100 has been included in the camping and excursion program
budgets for the Recreation and Community Services Department for the 2006 -07 budget year. The cost of
transportation will be recovered in fees charged to participants. Both camping and family excursions are
self - supporting programs.
RECOMMENDATION
Authorize the City Manager to enter into a contract with the Arcadia Unified School District to provide
bus transportation services for the Recreation and Community Services Department for the period of
approximately June 19, 2006 through August 18, 2006 in the amount of $33,100.
APPROVED: q" �
William R. Kelly, City Manager
.�.. N\
ARCAD
PpRPT89 STAFF REPORT
°
ppR ,
Development Services Department
June 6, 2006,
TO: Mayor and City Council
FROM: Don P � en�r� p J an, Assistant City Manager /Development Services
Director'W
By: Jason Kruckeberg, Community Development Administrator
SUBJECT: Recommend-that the City Council auth the City Manager to
amend the existing professional services agreements with EIP
Associates and Meyer, Mohaddes Associates, Inc, for preparation
of the Revised Environmental Impact Report for the "Shops at
Santa Anita Park" Proiect.
Recommendation: Approve
SUMMARY
On April 10, 2006, Caruso Affiliated (Caruso) filed revised applications for a
specific plan, zone change, general plan amendment, draft architectural design
review, and design guidelines. These materials reflect the applicant's revisions to
the Shops at Santa Anita project (removal of the residential component of the
project and addition of office space). Prior to processing these applications, a
revised Environmental Impact Report (EIR) will be prepared.
EIP Associates prepared the original EIR along with Meyer, Mohaddes
Associates for the related traffic study and these same firms will continue work
on the revised EIR. As was the case with the original, the project applicant will
oav for all costs for preparation of the revised EIR and othe related reports as
necessary.
The Development Services Department is recommending that the City Council
authorize the City Manager to enter into a contract for preparation of the revised
EIR with EIP Associates in an amount not to exceed $502,540 through the
completion of the Draft EIR and Meyer, Mohaddes Associates, Inc. for the traffic
and parking study in an amount not to exceed $99,793.
DISCUSSION
Originally, the Development Services Department interviewed three
environmental consultants for preparation of the EIR: Bonterra Consultants,
Impact Science and EIP Associates. All three firms are well qualified to prepare
the environmental impact report. Based on their proposal, experience and other
related factors, EIP Associates was selected to prepare the EIR.
The City contracted with Meyer, Mohaddes Associates to update the
Transportation Master Plan. Because of their familiarity with the City and their
experience, staff selected Meyer, Mohaddes Associates to prepare the traffic and
parking analysis for inclusion in the environmental impact report to be prepared
by EIP Associates.
The project applicant, Caruso Affiliated, pays for all costs for preparation of
the environmental impact . report and traffic analysis. The City will not incur
any costs for the preparation, review, and processing of these documents.
The Development Services Department is recommending that the City Council
authorize the City Manager to amend the existing professional services
agreement with both firms. The agreement with EIP would authorize payment
through the completion of the Draft EIR. Because the scope of services to create
the final EIR is dependent on public input and response to comments, the scope
and budget for completion of the Final EIR will be established following
completion of the Draft EIR. To address the Final EIR, we are recommending
that the Council authorize the City Manager to approve any amendments to the
scope of work and costs of services as necessary to complete the environmental
analysis.
FISCAL IMPACT
As noted, there will be no costs to the City for the preparation of the Revised
Environmental Impact Report and related traffic /parking study. The applicant,
Caruso Affiliated, pays for all costs including staff time to review and comment on
the documents.
RECOMMENDATION
It is recommended that the City Council:
A. Authorize the City Manager to enter into an amended agreement with
EIP Associates in an amount not to exceed $502,540 through the
Draft EIR and Meyer Mohaddes Associates, Inc. in an amount not to
exceed $99,793; and
CC REVISED EIR Report
Page 2
June 6, 2006
B. Authorize the City Manager to approve any subsequent amendments
to the scope of work and costs of services as necessary to complete
the environmental review process. All costs to be paid by the
applicant.
Approved: . Wn
William R. Kelly, City Manager
CC REVISED EIR Report
Page 3
June 6, 2006
7 :
\%
STAFF • • •
O ffice
DATE: June 6, 2006
TO: Mayor and City Council ��I�����errr���
FROM: William R. Kelly, City Manage Linda Garcia, Communications, Marketing and Special
Projects Manager,
SUBJECT: RETENTION OF ANIMAL PEST MANAGEMENT SERVICES, INC.
IN AN AMOUNT OF UP TO $30,000.00 FOR COYOTE
MANAGEMENT SERVICES IN FISCAL YEAR 2006 -2007
Recommendation: Approve
SUMMARY
In March 2005 the City Council directed staff to implement a coyote
management/trapping program on a trial basis. In November 2005 the City Council
authorized the continuation of said program for an „ ongoing /indefinite period of time.”
This staff report requests City Council approval to continue using Animal Pest
Management Services, Inc. (APM) for coyote management services in the 2006 -2007
fiscal year at a cost of up to $30,000.00.
BACKGROUND
The coyote management program was initiated at the request of Arcadia residents
worried about the increased sightings of "bold" coyotes and the concern over the impact
of their living and roaming in areas that are inhabited by people. Because of our lush
landscaping, the Arboretum, pets and the racetrack, there is an abundance of food and
water available in our neighborhoods and as long as this is the case, Arcadia will remain
an attractive home to the animals.
While staff believes it is wise to continue to ask the public to be on the watch for coyotes
and to refrain from leaving things in yards that are attractants, the reality of the situation
(based on experience) is that it is unlikely that people will change their lifestyle and
immediate environment in large enough numbers that our streets will no longer be of
interest to coyotes that are not finding adequate food and water in the foothills.
Mayor and City Council - coyote management
June 6, 2006
Page 2
DISCUSSION
The coyote management program operates whereby residents in the most affected
areas are provided with a direct contact at APM that they can call to report a coyote
sighting. Upon request, APM works with the resident to install and monitor a trap(s)
until the animal is caught. The cost of this service is borne entirely by the City.
Between May 2005 and April 2006, 58 coyotes were captured within the City of Arcadia
(excluding Santa Anita Park and the Arboretum).
APM's fee is $2,500 per 10 -day trapping period. Trapping is done on an as- needed
basis only.. Because trapping occurred in most months over the last year, staff has
budgeted for one 10 -day trapping period in each month for the upcoming fiscal year.
The expertise and experience required to conduct this type of work puts the services in
the category of being a "professional service," which means that competitive bidding is
not required. APM has proven to be a responsible and effective contractor and they are
able to meet the City's insurance requirements. Both the community and staff have
been pleased with APM's work, sensitivity and responsiveness and we believe they are
the right company for the job.
FISCAL IMPACT
APM's fee to deal with coyotes is $2,500 per 10 -day trapping period. Since March of
2005 the City has spent $22,500 on this program (we may still need services in June).
Trapping is done on an as- needed basis, and money is only spent when services are
required. Because trapping occurred in most months over the last year and we have no
reason to believe this will change in the near future, staff has budgeted a total of
$30,000.00 for fiscal year 2006 -2007, which. will cover one 10 -day trapping period in
each of the next 12 months (although there is flexibility in terms of scheduling a trapping
period should a special situation arise). Sufficient funds are included in the proposed
fiscal year 2006 -2007 operating budget. Whatever money is not used will be returned
to the General Fund at the end of the year.
RECOMMENDATION
Staff recommends that the City Council authorize the retention of Animal Pest
Management, Inc. to provide coyote management services in fiscal year 2006-
2007 and approve an expenditure of up to $30,000.00 for said program.
U �*_4 STAFF REPORT
Fire Department
DATE: June 6, 2006
TO: Honorable Mayor and Members of the City Council
FROM: David R. Lugo, Jr., Fire Chief -2g ' DL_
Pat Malloy, Public Works Services Director
By: David Haney, Battalion Chief
SUBJECT: Recommendation to Waive the Normal Purchasing Procedures and
Appropriate $495,000 from the Equipment Fund for the Purchase of one
(1) Triple Combination Fire Pumper from Pierce Manufacturing
Recommendation: Approve
SUMMARY
The Fire and Public ) ilorks Services Departments are requesting that one (1) 1988
fire pumper originally scheduled to be replaced in FY 2008 -09, be replaced now
(FY 2006 -07). The pumper is 18 years old, has over 112,000 miles, and is becoming
more unreliable for emergency service.
Staff recommends the City Council approve the waiver of the normal purchasing
procedures for this pumper and appropriate funds in the amount of $495,000 for the
purchase of one (1) triple combination fire pumper from Pierce Manufacturing.
BACKGROUND
In February of 2005, the City of Arcadia purchased two (2) Pierce triple combination fire
pumpers. At that time, the dealer, South Coast Fire Equipment, Inc., who is the local
Pierce Manufacturing dealer, provided a seven (7) year option for purchasing additional
vehicles at the original price plus a Consumer Price Index (CPI) cost adjustment.
Exercising this option will save the City of Arcadia time and money and maintain
consistency of apparatus within the Fire Department and Public Works Services for
maintenance and service performance during emergencies. Also, utilizing the same
vendor for this purchase will eliminate pre - construction inspection meetings that were
necessary during the 2005 purchase, and which would be required if another vendor was
utilized.
The Fire Department's current fleet of four (4) Pierce pumpers has served the City
extremely well. Pierce Manufacturing has consistently maintained the highest level of
reliability, safety, customer service and warranty repair of our Pierce pumpers.
Mayor and City Council
June 6, 2006
Page 2
DISCUSSION
The Fire and Public Works Services Departments are requesting that one (1) triple
combination pumper, scheduled to be replaced in FY 2008 -09, be removed from service
and a new triple combination pumper be purchased. The 1988 fire pumper
(City asset ##70153) is 18 years old, has over 112,000 miles, and is presently on the City's
vehicle replacement plan for replacement in FY 2008 -09. According to the City's vehicle
replacement plan, this type of emergency vehicle is deemed undependable as an
emergency vehicle upon reaching 20 years of age and 100,000 miles. In addition, this
vehicle is costly to repair due to the age of the vehicle. The Arcadia Public Works
Department is often unable to locate parts to facilitate repairs requiring the fabrication of
parts or the purchase of used parts from salvage facilities.
To further justify the early replacement, recent changes in EPA regulations have
mandated significant and costly changes in diesel engine emissions beginning with the
2007 models. Vehicle purchases after June 13 2006 will require compliance with
these regulations Changes include a reduction of emissions containing nitrous oxide
gasses and particulate matter. The new Diesel engines will be larger and operate
20 % -40% hotter than previous models. Also changes are anticipated with:
• The design of the chassis creating a wider and longer vehicle;
• The cooling design requiring larger radiator systems;
• The operation and maintenance of the vehicle; and
• The type of fuel used.
For the last two (2) years, the Fleet Services employees from the Public Works Services
Department have taken training classes specifically designed for trouble shooting and
maintenance of Detroit Diesel Series 60 engines, the most common diesel engine in the
Arcadia Fire Department fleet. Training the members of Fleet Services employees
reduces the need to out - source the repair of vehicles with Series 60 engines, reducing
downtime from unnecessary pickup, delivery, and waiting time for our units to be
repaired.
Currently the department has three (3) vehicles with Detroit Diesel Series 60 engines; the
addition of a fourth vehicle with the same engine type makes the training and further
education of personnel at Fleet Services and the Fire Department easier and consistent
when dealing with specialized tools, parts and familiarity.
During conversations with Detroit Diesel, staff attempted to determine the amount of
increased maintenance costs that could be anticipated with the new 2007 EPA compliant
engines over the 20 -year life span of the vehicle. Projected repair and maintenance costs
are not available at this time.
Mayor and City Council
June 6, 2006
Page 3
Of more concern to both Departments is the performance of new engines that must be
compliant with new EPA requirements. These engines have not been tested or proven in
fire service use and performance may be compromised from a complex computerized
exhaust management system and other mechanical changes to comply with the new
regulations. The addition of the new exhaust system will require two turbo chargers
rather than one that is standard on existing equipment. As new technology is developed,
mechanical and performance problems are anticipated. Past experience has shown that
purchasing first production vehicles with new untested technology increases downtime of
the equipment and increases maintenance costs overall.
Purchasing a 2006 Pierce pumper would standardize four (4) units providing consistency
of training, maintenance procedures and tools and testing of equipment at a considerable
savings to the City. Staff recommends that the City Council award a purchase contract
and appropriate funds in the amount of $495,000 from the Equipment Fund for the
purchase of one (1) 2006 triple combination pumper from Pierce Manufacturing.
FISCAL IMPACT
Funding from the purchase of this pumper is scheduled for FY 2008 -09. Purchasing the
pumper at this time will save the City of Arcadia a minimum of $75,000 from EPA
changes, CPI estimate increases and re- engineering fees. The cost for this purchase will
be $495,000. Sufficient funds are available in the Equipment Fund. Payment will be due
upon delivery of the vehicle on or about Spring of 2007.
RECOMMENDATION
It is recommended that the City Council:
1. Appropriate $495,000 from the Equipment Fund;
2. Waive any informalities in the bid or bidding process;
3. Approve the purchase of one (1) triple combination fire pumper from Pierce
Manufacturing in the amount of $495,000; and
4. Authorize the Purchasing Officer to issue a purchase order for this acquisition.
Approved: ( M J
William R. Kelly, City Manager
A , 1r r
STAFF REPORT
DATE: June 6, 2006 Office of the City Manager
TO: Mayor and City Council
FROM: William R. Kelly, City Manager A Q
By: Linda Garcia, Co unications, arketing and Special
Projects Manage
SUBJECT: RETENTION OF STUDIO SPECTRUM, INC. IN AN AMOUNT NOT
TO EXCEED $31,000.00 TO FILM, PROGRAM AND PROVIDE
ANCILLARY SERVICES RELATED TO THE LIVE BROADCAST
OF CITY COUNCIL MEETINGS DURING FISCAL YEAR 2006-
2007
Recommendation: Approve
SUMMARY
Since the City of Arcadia began filming and televising City Council meetings we have
used the firm of Studio Spectrum, Inc. for these services due to their experience with
and knowledge of our system, their competitive rates and their quality of work. This
staff report requests City Council approval to continue using Studio Spectrum in fiscal
year 2006 -2007 to produce a live broadcast of City Council meetings.
DISCUSSION
Studio Spectrum, Inc. designed and installed the City's original audiovisual system in
the Council Chambers as well as the various upgrades that have been made over the
years. They have conducted all of the maintenance and service for the video
equipment and have also filmed City Council meetings since we first began providing
this service. Their work, both in terms of product knowledge and application, as well as
their performance with regard to the live broadcast, has been excellent. They are
familiar with the City's needs and expectations and have been very responsive to issues
and concerns staff has brought to them. Additionally, Studio Spectrum is able to meet
the City's insurance requirements.
For fiscal year 2006 -2007, the fee to broadcast live City Council meetings held in the
Council Chambers remains the same as the last three years - $750.00 per meeting or
$18,000.00 annually. For this fee, Studio Spectrum provides a two- person crew for up
to five hours to perform the following services:
• Arrive two hours prior to the meeting to check the equipment and perform any
necessary control room maintenance. (In the past, this two -hour period has
not been considered part of the above referenced "five hours' and Studio
Spectrum has agreed to continue with this policy.)
Mayor and City Council - Studio Spectrum, Inc. 2006 -2007
June 6, 2006
Page 2
• Maintain equipment service records and coordinate required manufacturer
service.
• Create graphics for display before, during and after the meeting.
• Prepare the City Clerk's area for audio and video recording.
• Provide support to staff with regard to any additional audio or video needs
they may have for presentations.
• Control the lighting during City Council meetings.
• Provide a live broadcast of the City Council meeting and additional videotape
copies of the meeting for the Library and City Clerk.
• Program meetings for future broadcast.
• Provide on -call technical support (at a separate cost).
Other costs included in this agreement are related to maintenance, supplies and this
coming year the unusual need to film up to two City Council meetings at an off -site
location due to the large crowd expected for hearings on either the proposed Caruso
Project or Westfield Expansion Project. The cost of filming such meetings and have
them be broadcast live is $3,000 per meeting.
Because there are a limited number of companies that have the amount of. experience
Studio Spectrum does in providing this type of service to local government, as well as
the fact that their record with Arcadia is quite good, staff is recommending that we
continue to use Studio Spectrum to film City Council meetings in the coming year
without seeking proposals from other companies. They produce a quality product, are
of considerable value to the City in terms of our particular cable equipment/system, and
they endeavor to keep the cost as low as possible.
Although we are not recommending such at this time, staff wishes to note that the City's
cable broadcast equipment is becoming quite antiquated in terms of what it is capable
of doing, as well as the fact that the need for repairs increases every year, as does the
difficulty of finding parts. We expect to present in the 2007 -2008 Capital Improvement
Program a plan for updating and improving the cable system relative to the government
access channel.
FISCAL IMPACT
At $750.00 per meeting the annual cost to film City Council meetings is $18,000.00. On
occasion, there are meetings that go extraordinarily long resulting in additional cost and,
as noted above, this year we expect to have up to two off -site broadcasts at a cost of
$3,000 each. The remaining $7,000 is to pay for extended City Council meetings, any
maintenance or service that needs to be done to the cameras, microphones, lights,
computers and playback decks, as well as supplies such as videotapes and batteries.
Only the services and materials necessary will be purchased. If the money is not used
it will go back to the General Fund at the end of the fiscal year. Sufficient funds are
included in the proposed fiscal year 2006 -2007 operating budget.
Mayor and City Council - Studio Spectrum, Inc. 2006 -2007
June 6, 2006
Page 3
RECOMMENDATION
Staff recommends that the City Council authorize the retention of Studio
Spectrum, Inc., in an amount not to exceed $31,000.00, to film, program and
provide ancillary services related to the live broadcast of City Council meetings
during fiscal year 2006 -2007.
It
STAFF PIZEEP10
Development Services Deparqtme
DATE: June 6, 2006
TO: Mayor and City Council
FROM: Don Penman, Assistant City Manager /Development Services Director
David Lugo, Fire Chief
By: Brian Saeki, Economic Development Manager
SUBJECT: Award of Contract for the Construction of Fire Station 105
Recommendation: Authorize the City Manager to enter into a contract
with G -2000 Construction, Inc. in the amount of $7,116,000 for the
construction of a new Fire Station
SUMMARY
The City advertised for bids for the construction of a new Fire Station headquarters
facility at 710 S. Santa Anita in April 2006. Bids were opened on May 2, 2006 and five
(5) general contracting firms submitted bids for the project. The low bid was submitted
by G -2000 Construction, Inc. in the amount of $7,116,000. Staff is recommending that
the City Council authorize the City Manager to enter into a contract with G -2000
Construction, Inc. in the amount of $7,116,000 for the construction of a new Fire Station
Headquarters Facility at 710 S. Santa Anita Avenue.
BACKGROUND
When the City sought professional services to conduct a Needs Assessment for a new
Police Facility in 1999, services were also solicited to conduct a Space Needs
Assessment for Fire Station 105 (Fire Headquarters). From that process the firm of
Gonzalez Goodale Architects was selected to provide the services for the Fire Station.
The study addressed a number of options including remodeling the current station,
rebuilding a headquarters station in its current location or building a new neighborhood
(smaller) station at its current location or at another location. Variations within these
options included moving either or both Administration and Fire Prevention Bureau to
Station 106.
The option of remodeling Station 105 was eliminated because it would not be possible
to bring the station up to current seismic standards, which is critical as fire stations are
essential facilities and need to withstand strong seismic activity.
14
Mayor and City Council
June 6, 2006
Page 2
As noted, staff also conducted an analysis of other possible locations within the same
general area where a new station could be constructed and not significantly alter fire
response times, while not requiring acquisition of land which would increase the overall
project costs.
One of the alternatives studied was to be the construction of a new neighborhood Fire
Station 105 at its current location on Santa Anita Avenue and relocating the
Administration and Fire Prevention functions to Station 106. Adding the Administrative
and Fire Prevention functions to Station 106 required that .the existing facility be
expanded and would require the acquisition of additional land from Westfield. Several
months were spent negotiating with. Westfield to acquire the additional land.
Unfortunately, the City was unable to reach an agreement and was required to rethink
the project. Additionally, due to the complexity of the design of Fire Station 106, cost
estimates were high for a remodel /addition.
The final alternative for the project would be to construct a new headquarters facility
including a suppression function at its current location on Santa Anita. This would
include the temporary relocation of Administration, Fire Prevention and suppression to
other facilities during construction. At staffs direction, Gonzalez Goodale prepared
preliminary schematic drawings based upon the Needs Assessment study in order to
ensure that the existing site could accommodate a new, appropriately sized facility.
Once it was determined that the site was acceptable, Gonzalez Goodale began the
process of designing the new facility. This process took approximately 16 months.
Once construction documents were near completion, Fire Administration was relocated
into the Station 106 building and Fire Prevention into a modular facility in the parking lot
at Station 106. Suppression staff was relocated into a house owned by the Arcadia
Presbyterian Church on Alice Street. This site is approximately 2 blocks from the
existing station and did not create any increases in response times for that area.
DISCUSSION
Bids for construction of the Fire Station Headquarters Facility project were distributed
on April 3, 2006 and opened on May 2, 2006. A total of five (5) bids were submitted for
the project. As part of the bid process, one (1) bid alternate was included. The bid
alternate proposed to add a climbing /repelling wall at the east side of the building for
training purposes. Due to the overall cost of the new facility, staff is not recommending
that the bid alternate be included in the project at this time. In addition, the proposed
cost for the alternate was nearly three times the Architect's cost estimate for the wall.
Provided below is a chart which shows the base and alternate bids for each. of the five
firms. It should be noted that under State law, the City must award the bid to the lowest
responsible bidder and must define how the lowest bid will be determined. In the City
of Arcadia's process, the lowest responsible bidder was defined as the bidder with the
lowest base bid. It must also be noted that the City is not obligated to include the
alternative bid items in the contract.
•
Mayor and City Council
June 6, 2006
Page 3
The low bidder is G -2000 Construction, Inc., a firm located in Agoura Hills. G -2000 has
been in the business of general contracting for twenty -two (22) years. They have
operated as G -2000 Construction, Inc. for six (6) years, Guy Construction and Guy
Construction Co. Inc. for the prior 16 years. The bulk of their experience is in school
renovation and construction, however, they have completed a community center and
garden for the Rancho Simi Recreation and Park District and a courthouse facility in
Santa Monica.
Gonzalez Goodale, the construction manager for this project, and staff have all
performed reference checks for this firm and have received similar positive comments.
In fact, Gonzalez Goodale was the project architect for a school project in Pasadena
where G -2000 was the general contractor and was satisfied with their workmanship and
knowledge of the construction field.
Schedule
The bid documents require the construction to be completed 450 calendar days from
the Notice to Proceed. This equates to a fifteen (15) month construction time period.
.Staff is optimistic, however, that weather permitting, the project could be completed
,sooner. Typically, a contractor will commence work on a project approximately thirty
(30) days from award, though this still must be established between G -2000 and the
City. The contract for this project has a clause requiring that the contractor pay
liquidated damages of $1,000 per day for every day beyond the scheduled completion
date.
FISCAL IMPACT
As part of the FY 2005 -06 Capital Improvement Budget, $5.92 million ($750,000 —
Redevelopment Funds and $5,170,000 — Capital Outlay Funds) was approved for the
construction of this project. Costs incurred thus far have included architectural and
engineering fees, relocation costs and lead and asbestos removal from the existing
building. It should be noted that the Architect's estimate to construct the building was
$5.4 million in June 2005
The low bid for the project is $1.7 million higher than this estimate. According to
Gonzalez Goodale and other construction information reviewed, this can be attributed
to increases in the market including labor, fuel, material costs and specialized
equipment (e.g., vehicle exhaust systems).
As an example, Saylor Publications Inc., a nationally recognized market leader in
research and development of construction costs, has found that there were significant
G -2000
Construction
Morillo
Construction
I Earl
I Corporation
USS Cal
Builders
CTP
Construction
Total Base Bid
$7,116,000
1 $7,254,400
1 $7,870,471
$7,978,000
1 $8,434,000
Alternate #1
$100,0001
$38,0001
$36,500
1 $92,0001
$39,000
The low bidder is G -2000 Construction, Inc., a firm located in Agoura Hills. G -2000 has
been in the business of general contracting for twenty -two (22) years. They have
operated as G -2000 Construction, Inc. for six (6) years, Guy Construction and Guy
Construction Co. Inc. for the prior 16 years. The bulk of their experience is in school
renovation and construction, however, they have completed a community center and
garden for the Rancho Simi Recreation and Park District and a courthouse facility in
Santa Monica.
Gonzalez Goodale, the construction manager for this project, and staff have all
performed reference checks for this firm and have received similar positive comments.
In fact, Gonzalez Goodale was the project architect for a school project in Pasadena
where G -2000 was the general contractor and was satisfied with their workmanship and
knowledge of the construction field.
Schedule
The bid documents require the construction to be completed 450 calendar days from
the Notice to Proceed. This equates to a fifteen (15) month construction time period.
.Staff is optimistic, however, that weather permitting, the project could be completed
,sooner. Typically, a contractor will commence work on a project approximately thirty
(30) days from award, though this still must be established between G -2000 and the
City. The contract for this project has a clause requiring that the contractor pay
liquidated damages of $1,000 per day for every day beyond the scheduled completion
date.
FISCAL IMPACT
As part of the FY 2005 -06 Capital Improvement Budget, $5.92 million ($750,000 —
Redevelopment Funds and $5,170,000 — Capital Outlay Funds) was approved for the
construction of this project. Costs incurred thus far have included architectural and
engineering fees, relocation costs and lead and asbestos removal from the existing
building. It should be noted that the Architect's estimate to construct the building was
$5.4 million in June 2005
The low bid for the project is $1.7 million higher than this estimate. According to
Gonzalez Goodale and other construction information reviewed, this can be attributed
to increases in the market including labor, fuel, material costs and specialized
equipment (e.g., vehicle exhaust systems).
As an example, Saylor Publications Inc., a nationally recognized market leader in
research and development of construction costs, has found that there were significant
Mayor and City Council
June 6, 2006
Page 4
increases in the construction trades between 2005 and 2006. Costs for framing
increased by 30 %, exterior paving by 41%, interior building slabs by 22% and vehicle
exhaust systems by 85 %. Therefore, of the $1.7 million increase from the June 2005
estimate, approximately $1 million to $1.35 million can be attributed to general cost
increases in the construction industry. Other factors include the increased cost of
specialty items selected during the preparation of construction documents.
Upon an analysis of the bid, staff believes that the bid submitted by G -2000 is
consistent with the bidding environment for fire station projects in 2006. Based upon
the low bid, an additional appropriation of $2,775,000 was included in.the proposed FY
2006 -07 Capital Improvement Budget to complete this project. This amount is required
to fund the difference between the base bid and the Architect's estimate of last year
($1.7 million) and also _includes costs for the following: monthly rental fess for the
modular unit at Station 106 and the Alice Street house; architectural and engineering
fees through the construction. of the project; costs for specialty inspections; fees for a
part time construction manager; and a 5% project contingency. The overall project
budget including construction is $8,695,000.
Provided below is a more detailed breakdown of the costs (already incurred and
projected) for the project.
Construction bid
$7,116,000
Lead and asbestos removal
70,000
Relocation /miscellaneous expenses — modular units, storage
sheds, improvements to property on Alice Street; miscellaneous
expenses
220,400
Monthly rental of Church property and trailer at Fire.Station 106
84,600
Architect and Engineering fees
637,000
Construction management
96,000
S ec a ty inspections
116,000
Project contin enc 5% of base bid
355,000
TOTAL
$8,695,000
RECOMMENDATION
That the City Council authorize the City, Manager to enter into a contract with 0-2000
Construction, Inc. in the amount of $7,116,000 for the.construction of a new fire station
at 710 S:' Santa Anita, and approve a 5% project contingency of $355,800 from the total
project budget of $8,695,000.
Approved: N
William R. Kelly, City Manager
� o4 STAFF REPORT
Public Works Services Department
June 6, 2006
TO: Mayor and City Council
FROM: Pat Malloy, Public Works Services Director
Prepared by: Tom Tait, Deputy Public Work)Servic s Director
Susannah Tumey, Environmental Services Officer
SUBJECT: Residential Refuse and Recycling Rate
Recommendation: Direct the Public Works Services Department to
conduct a public hearing at the June 20, 2006 meeting and prepare a
Resolution authorizing the proposed refuse rate schedule for fiscal year
2006/07 for presentation to the City Council
SUMMARY
In accordance with the Residential Refuse and Recycling Agreement Between the City
of Arcadia and Waste Management Collection and Recycling, Inc., Waste Management
has requested that the City Council adjust the service rates for residential
refuse /recycling collection to reflect the change in the Consumer Price Index (CPI) for
the period of March 2005 to March 2006, and landfill disposal facility rates increase
based on the previous year's percent change.
The impact of this proposed adjustment on a typical single - family household with a
standard 90- gallon collection service (1 -90 gal. refuse, 1 -60 gal recycling, 1 -90 gal.
greenwaste) will be 0.53 cents, bringing the standard monthly service rate to $15.12, up
from the previous amount of $14.59. While the CPI increase from last year was 4.67
percent, the final recommended change (calculated per the formula provided in the
Agreement) represents a combined adjustment of 3.95 percent based on last years CPI
and disposal increases. An increase to multi - family service rates is not being proposed.
Staff is recommending that the City Council review the proposed rate schedule (Exhibits
Al and A2) and direct staff to prepare a report for a public hearing at the June 20, 2006
meeting and prepare a Resolution authorizing the proposed refuse rate schedule for
fiscal year 2006/07.
Mayor and City Council
June 6; 2006
Page 2
DISCUSSION
Waste Management's request for this year's refuse service rate adjustment was
received by the City Manager's Office on May f, 2006, per the terms of the Agreement.
Rate increases are based on changes in the CPI and disposal fees. The actual March -
to -March change in the CPI is 4.67 percent. However, Waste Management's request
was calculated per the formula provided in the Agreement (see Table One). The CPI
change was measured from March 2005 to March 2006 and is specific to the -Los
Angeles- Riverside- Orange County statistical area in accordance with the Agreement.
Single- Family Refuse Rate -
The impact of this proposed adjustment on a typical single - family household with a
standard 90- gallon collection service will be a CPI /disposal adjustment of 3.95 percent
or 0.53 cents, bringing the standard monthly service rate to $1.5.12, up from the
previous amount of $14.59.
Table One:
Disposal Rate Increase Calculation for SINGLE - FAMILY RESIDENTS
Cost Component
Year 1
Year 2
% Change
Weight
Product
CPI
199.2
208.5
4.67%
78%
3.64
Disposal Facility Rate
$23.49
$23.82
1.40%
22%
0.31
Total,
Change 3.95
Multi - Family Refuse Rate
Standard bin service base rates (3 -yard bin picked up once per week) for multi - family
residences will remain at their current rate of $86.66. Costs to Waste Management for
this service have not increased in the last year, therefore no ,rate adjustments are
recommended.
This Program significantly contributed to the City's 2004 Annual AB 939 diversion rate
of 69 %.
During the past. year, Waste Management has performed the services set forth in. the
terms of the Residential Refuse and Recycling Agreement. Along with standard
residential refuse collection, they also provide a full range of residential recycling
activities and special services. These include:
Mayor and City Council
June 6, 2006
Page 3
• Commingled curbside recycling
• Greenwaste recycling
• Free Backyard Service for Residents with a Physical Hardship
• Bulky Item Pick -ups
• Holiday tree recycling
• Waste -to- Energy Program (multi - family units only)
• Residential recycling education
Staff has worked with Waste Management representatives and thoroughly reviewed and
verified all rate adjustment data. Based on the contractor's service record and
continuing satisfactory performance, staff is in concurrence with Waste Management's
request for a rate adjustment, as provided for in the Agreement. In May a rate survey
(Exhibit "B ") was conducted, indicating the City of Arcadia's refuse rates are among the
lowest in Los Angeles County, even with the proposed rate adjustment.
Staff recommends that the. City Council review the proposed rate schedule (Exhibits Al
and A2) and direct staff to prepare a report for a public hearing at the June 20, 2006
meeting and prepare a Resolution authorizing the proposed refuse rate schedule for
fiscal year 2006/07.
ENVIRONMENTAL IMPACT
Refuse rates are exempt from the requirements of the California Environmental Quality
Act as specified in Title 14, Section 15273 of the California Administrative Code.
FISCAL IMPACT
Residential refuse and recycling collection service rates are a fee - for - service that is paid
directly to the contractor by the residential customer. The proposed rates will not impact
the City's budget.
RECOMMENDATION
Direct the Public Works Services Department to conduct a public hearing at the June
20, 2006 meeting and prepare a Resolution authorizing the proposed refuse rate
schedule for fiscal year 2006/07 for presentation to the City Council.
Approved:
William R. Kelly, City Manager
PM:TT:ST:dw
Attachments
Exhibit "Al"
City of Arcadia Residential Refuse and Recycling Collection Service
. I Single Family Rate Schedule
Effective July 1, 2006 the monthly residential refuse and recycling service rates are:
STANDARD SERVICE RATES
2006 0 Green Total -
Service Base GIN Wears Recycling AS 939 Monthly Service
Category Rate carts Rate Charge -' Foe In Category '
SENIOR CRILEN SERVICE RATES
2006 9 Own
Base OW Waste Recycling
Rate calls Rate Charge
Tote]
AB 939 Monthly
In Rate
Single Family
$10.12 1
$167
$0.78
$0.30
$12.77 ' Single Family
$9.12
.1
$1.41
$0.78
$0.30$11.61
Dealing. (1)
$10.12 2
$2.25
$0.78
$0.30.$13.45
a Dwelling, it)
$9.12
2
$202
$0.78
$0.30 $12.22
BO Galion Can
$7042 3
$3.02
$0.78
$0.30
$74.22 ne Callon Can
$9.12
3
$2.72
$0.78
$0.30 $12.92
$10.12 4
$3.75
$0.78
$0.30
$14.95 t¢f
$9.12
4
$3.38
$0.78
$0.30 $1356
$70.72 6
$LBO
$0.78
$0.30
$76.80
$9.12
5
$4.15
$0.78
$0.30 $14.35
Single Family
$12.47 1
$1.67
$0.78
$0.30
'''
$15.12 Singb Family
' $11.23
1
$1.41
$0.78
$0.30 $13.72
Dweang,(1)
$12A7 2
$225
$0.78
$0.30
$15.80 �, Dwalling,(1)
$11.23
2
$2.02
$0.78
$0.30 $14.33
90 Galion Can
$12.47 3
$3.02
$0.78
$0.30
$te.571, 90 Callon Can
$77.23
3
$2.72
$0.78
$0.30 $15.03
$12.47 4
$3.75
$0.78
' $0.30
$17.30
$11.23
4
$3.38
$0.78
$0.30 WAS
$12.47 5
$4.60
$0.76
$0.30
$18.15
$11.23
5
$4.76
$0.78
$0.30 $78.46
Singe Family 60g
$7.93
$0.00
$0.00
$7.83 Single Family Bog
$7.14
$0.00
$0.00 $7.14
Dwegng,(1) flop
$8.07
$0.00
$0.00
$8.07 Dwelling, it) Bog
$7.26
Well
SD.DO $7.26
Time Par Can
Time Pm Can
Unscheduled Pickup
Unscheduled Pickup
Monthly Per Bog
$5.58
$0.00
$0.00
$5.58 Monthly Per dog
$5.02
$0.00
$0.00 $5.02
Additional Can 90g
$6.89
$0.00
$0.00
$6.89 Additional Can 90g
$6.21
$0.00
$0.00 ' $621
Ely Automated
$31.01
$5.33
50.30
$39.64 ON Automated
$30.61
$6.33
$0.30 $3624
Collection Sm.
Collection Ser.
..
Bly Collection
$12.23
$0.00
$0.00
$12.23 BfY Coeecdon
- $11.01
$0.00
$0.00 $77.01
1 Time PIU
-
1 Time Plu
Per Can
Per Can
BIY Additional
$16.67
$0.00
$0.00
$1667 B/Y Additional
$16.70
$0.00
$0.00 $16.70
Container
Container
'Buky Item PIU
$25.89
$0.00
$0.00
525.69 'Bulky dean PAl
$23.12
- -
$0.00
$0.00 $23.12
Slurps Program
$28.50 Size -One Quart
Additional
aloes available r%a Sharps Program
$28.50 Size One
Quart
Additional
dzes available
$37.28 Sae- One Gallon
Additional strea ovaiable
537.28 Siz One Gallon
Additional elms available
s,
Temporary 3 - Yard Bin
Semi":
-
Temporary RaIFOR Bin Sahw:
-
Three Day Rendal
.656.81
R81m an rbpatiated under SM wrranBrclal non9%tlutive contact
-
Seven Day Rental
$102.89
Additional Rate Per Day
$4.84
' This pricing applies only
to residents, that exceed the 4
free Bulky Item
collections
-
Exhibit "A2"
City of Arcadia
Refuse Collection Service
Multi- family Base Rate Schedule
2006107 NOINCREASE
Number of Bins STAB RATE
and size NUMBER OF PICK -UPS PER -WEEK
1 - 1.5 Yard
$61.73
$123.47
$185.21
$246.95
$308.69
$370.42
2 - 1.5 yard
$112.25
$224.50
$336.74
$448.97
$561.23
$673.48
3 - 1.5 yard
$168.37
$336.75
$505.12
$673.50
$841.86
$1,010.25
4 - 1.5 yard
$224.51
$449.01
$673.51
$898.01
$1,122.53
$1,347.02
5 -1.5 yard
$280.62
$561.26
$841.89
$1,122.54
$1,403.17
$1,683.80
1 - 3 yard
$73.55
$136.57
$220.65
$294.20
$367.76
$441.31
2 - 3 yard
$131.32
$273.18
$393.97
$525.28
$656.60
$787.92
3 - 3 yard
$189.14
$409.76
$567.37
$756.49
$945.62
$1,134.75
4 -3yard
$246.91
$546.33
$740.71
$987.62'.
$1,234.53
$1,481.43
5 -3yard
$304.71
$682.91
$914.10
$1,218.79
$1,523.50
$1,828.17
1 - 6 yard
$137.83
$275.69
$413.52
$551.36
$689.20
$827.05
Number of Bins
DISMOUNT RATE
and Size
NUMBER
OF PICK -UPS PER WEEK
MaElmosom
1
2
3
4
5
6
1 - 1.5 yard
$69.60
$139.22
$208.82
$278.43
$348.03
$417.64
2 - 1.5 yard
$126.56
$253.12
$379.68
$506.25
$632.80
$759.36
3 -1.5 yard
$189.83
$379.66
$569.49
$759.32
$949.15
$1,138.96
4 - 1.5 yard
$253.11
$506.23
$759.33
$1,012.43
$1,265.55
$1,518.66
5- 1.5 yard
$316.40
$632.77
$949.17
$1,265.56
$1,581.95
$1,898.34
1 - 3 yard
$82.95
$151.04
$240.33
$320.36
$400.54
$480 -64
2 - 3 yard
$145.79
_ $302.04
$437.33
$583.13
$726.90
$874.69
3 -3yard
$211.44
$452.78
$634.32
$845.76
$1,057.20
$1,268.65
4 - 3 yard
$277.09
- $604.12
$831.30
$1,108.40
$1,385.51
$1,662.59
5. 3 yard
$342.78
$755.17
$1,028.31
$1,371.10
$1,713.87
$2,056.64
1 - 6 yard
$150.89
$301.81
$452.68
$603.57
$754.45
$905.35
Number of Bins
STAGE RATE
and Size
NUMBER
OF PICK -UPS PER WEEK
RNMEMNOMMM
1
2
3
4
5
6
1 - 1.5 yard
$76.15
$152.33
$228.49
$304.65
$380.81
$456.97
2 - 1.5 yard
$138.50
$276.99
$415.49
$553.98
$592.48
$830.97
3 - 1.5 yard
$207.75
$415.50
$623.25
$830.99
$1,038.74
$1,246.49
4 - 1.5 yard
- $277.00
$554.00
$831.00
$1,108.00
$1,385.02
$1,662.02
5 - 1.5 yard
$346.25
$692.49
$1,038.73
$1,384.98
$1,731.23
$2,077.48
1 - 3 yard
$86.66
$164.15
$260.03
$346.70
$433.39
$520.06
2 - 3 yard
$160.22
$328.34
$480.64
$640.86
$801.08
$961.30
3 -3yard
$233.77
$492.49
$701.31
$935.08
$1,168.84
$1,402.60
4 -3yard
$307.33
$656.66
$921.99
$1,229.33
$1,536.65
$1,844.00
5 -3yard
$380.86
$820.82
$1,142.58
$1,523.43
$1,904.30
$2,285.16
1 - 6 yard
$163.81
$327.67
$491.43
$655.24
$819.04
$982.86
'Please add the following fees to the rates listed above:
Recycling Fee (Reso If 6269):
2 -6 units = $1.00
per unit
7 or more units = $1.50 per unit
AB 939 Fee
= $0.30 per unit
Exhibit "AT'
City of Arcadia
Refuse and Recycling Collection Service
Single- family Base Rate Schedule NO INCREASE
. 2066/07
Single Family Greenwaste Bin Service: Includes one (1) greenwaste bin, one (1) refuse
and one (1) recycling container serviced once weekly
Curbside Bin Service:
Resident rolls bin and containers to their curb and the trash
truck drives directly to the container then empties the bin and containers.
Backyard Bin Service
Waste Management enters residents backyard, rolls out their greenwaste
bin.and refuse /recycling containers to the curb, empties them, then return
them to their original location on the same day.
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Honorable Mayor, Council members, City Manager, ladies and gentlemen:
My name is Francis Yu. I am a resident of Arcadia and I also own a business in Arcadia.
I am here this evening to bring your attention to two issues:
1. Tattoo parlor located at 813 W. Huntington Drive
2. A Request for Modification, Application No. MC 06 -19 for 813 W. Huntington Drive to allow
medical use in an existing building with drastically insufficient parking spaces. If approved,
this medical facility would be the third business located at 813 W. Huntington Drive and they
all would share only 7 parking spaces.
Fib the tattoo parlor - should not have been allowed because:
* Change in use - Arcadia Municipal Code Section 9269.3 - should have to meet current
parking requirements. Previous exception not apply.
* No public hearing
Secondly the Request for Modification to allow medical use should not be approved because:
* Very inadequate parking. Only 7 spaces for 3 businesses. No handicap parking.
Patients of medical facility would probably be disabled somewhat and need handicap parking.
Employees and owners of the businesses would park on street to save the few parking spots for
customers and patients.
Compete with residents, their guests and other existing businesses nearby for street parking.
Delivery services like UPS would have problems finding convenient parking.
* The request for modification is an unreasonable request and seeks a great deviance from
code requirements - only a third of required parking spaces.
* Creates traffic safety problems - cars backing out of the parking spots onto Huntington
Drive
Conclusion:
All I ask is that the city apply its laws in a fair manner. It appears to me that the city is very
accommodating to the property at 813 W. Huntington Drive and have allowed things that should
not have been approved. If this medical use is approved, it will set a new low standard for
parking requirements in our city. Soon, other applicants will seek unreasonable modifications,
pointing to this example. What criteria then, will the city use in deciding such applications? The
City of Arcadia has a code for such matters and should stick to that code, or allow reasonably l�¢
modifications. Application MC 06 -19, seeking approval of 7 instead of 20 parking spaces, is not k4li�
such a reasonable modification request and must be denied. -T
While it appears to be a big burden on the property owner not to allow a third business at 813 W.
Huntington Drive, the property owner should not have leased space to the tattoo parlor in the first
place, or should not have approved a sublease by the liquor store to the tattoo parlor. The owner
knew of the inadequate parking and the exception it enjoyed for the then existing businesses. The
owner should have waited for a tenant who could take up the remainder of the property to
maintain the number of businesses at the property at two. The owner was in the best position to
prevent the current situation but took no action to avoid it. The owner should bear the
consequences instead of the residents and other business owners in the area.
Though it may take some time, the owner can still refuse to renew the lease for the tattoo parlor
and get another tenant in who can use up the entire remaining space at the property. And it can
also refuse to renew the lease for the liquor store and lease the entire property to a tenant who can
use the entire space.
NOTICE OF A PUBLIC HEARING
BEFORE THE
ARCADIA CITY MODIFICATION COMMITTEE
To: Property owners and'Qcwpanfsbvithin a 100 -foot radius
From: City of Arcadia Community Development Division
Pursuant to law, the Modification Committee hereby gives notice that a public hearing will be held to
determine whether the following request should be approved, conditionally approved, or denied:
Application No.: MC 06 -19
Location: 813 W. Huntington Drive
Applicant: Bruce Baptie
Request: A Modification to allow a medical use in a 1413 square foot unit within an
existing commercial building with 7 on -site parking spaces in lieu of the 20
parking spaces required (A.M.C. Sec. 9269.5).
Time of Public Hearing: Tuesday, June 12, 2006, at 7:45 a.m.
Place of Public Hearing: Arcadia City Council Chambers Conference Room
240 West Huntington Drive, Arcadia, California
The application file and plans are available for review at the Planning Services office.
All interested persons are invited to appear at the Public Hearing and to provide evidence or
testimony concerning the proposed modification request. You are hereby advised that should you
desire to legally challenge any action taken by the Modification Committee with respect to the
proposed modification, you may be limited to raising only those issues and objections which you or
someone else raised at or prior to the time of the Public Hearing. Persons wishing to comment on
the modification request may do so at the Public Hearing or by writing to Planning Services prior to
the June 12"' Public Hearing. For further information regarding this matter, or to submit comments,
please contact Assistant Planner, Andrew Gonzales by writing to' Planning Services at 240 West
Huntington Drive, Arcadia, CA 91007, or by calling (626) 574 -5444.
In compliance with the Americans with Disabilities Act, if you need special assistance to participate
in the Public Hearing, please contact Planning Services at (626) 574 -5423 at least three (3) working
days before the public hearing date. This notification will help city staff in making reasonable
arrangements to provide you with access to the Public Hearing.
Arcadia City Hall is open Monday through Thursday, from 7:30 a.m. to 5:30 p.m., and on alternate
Fridays from 7:30 a.m. to 4:30 p.m. City Hall will be closed on June 9"'
DEVELOPMENT SERVICES DEPARTMENT
Community Development Division / Planning Services
Andrew Gonzales, Assistant Planner
92693. CHANGES IN USE.
9268.6.10.1
9268.6.10.1. STORAGE. OUTSIDE.
RECYCLABLES.
Recyclables that are collected and loaded outside a
building shall be stored in covered containers and in
accordance with the California Solid Waste Reuse
and Recycling Access Act of 1991. The collection
and loading containers shall be kept in a paved area
that is completely screened from view by an enclo-
sure of which three (3) sides shall consist of six (6)
foot high, fully grouted, decorative masonry walls,
and fully enclosed with solid metal gates painted a
color that is compatible with the enclosure walls. The
interior dimensions of the enclosure shall provide for
convenient access to the containers. The interior of
the enclosure shall be equipped with minimum three
(3) inch thick bumpers to prevent the containers from
damaging the enclosure. The enclosures shall not be
located in any required front, side or rear yard.
(Added by Ord. 1995 adopted 9 -7 -93)
9268.6.11. MAXIMUM BUILDING SIZE.
No portion of any building containing more than
20,000 square feet of gross Floor area shall be con-
structed within one hundred (100) feet of any lot or
parcel of property in Zone R -3 or any more restric-
tive zone unless a conditional use permit be first ob-
tained pursuant to Division 5 of Part 7 of this Chap-
ter. (Amended by Ord. 1346 adopted 5- 16 -67)
(Title 6, Sections 9268.6 through 9268.6.11, added
by Ord. 1336 adopted 3 -7 -67: effective 4 -7 -67)
DIVISION 9
GENERAL PARKING REGULATIONS
9269.1. GENERAL.
The regulations set forth in this Division shall ap-
ply in all commercial and industrial zones unless oth-
erwise specified in this Chapter.
9269.2. ADDITIONS.
Structures that are enlarged in area shall provide
parking facilities in accordance with the standards set
forth in this division.
verthe extWing=u of-a =s tun- orlot3is3
Tchattged m'anathery a requiring a larger number of
parking spaces than required for an existing use,
paikirig.: facilities < shall a lie =prov ided � in`_accordance,
'with the:standards setforth in P.art.6 iDtvtsioi£9:aii3f
PaR'8;6Division 4�of this Chapter)
9269.4. MIXED USES.
In the event that two (2) or more uses occupy the
same building, lot or parcel of land, the total re-
quirements for off -street parking shall be the sum of
the requirements of the various uses computed sepa-
rately.
9269.5. OFF - STREET PARKING
REQUIREMENTS.
No less than the following number of off - street
parking spaces shall be provided and maintained for
each of the following uses. except those temporary
reductions permitted by the Business Permit and Li-
cense Review Board for parking lot sales and for
promotional entertainment events. When the number
of required parking spaces results in a fraction of
one -half or higher, the requirements shall be rounded
up to the next whole space.
463
rAMWO syp. 140 . 9.$441
Parking Spaces
Use
Required
Architects/Engineers
4 spaces per 1.000 sq. ft.
of gross floor area
Day Care and'or
I space per staff+ 1 per 5
preschool facilities
children or 1 per 10
children if adequate drop
off area provided
Fast Food without drive
15 spaces per 1.000 sq. ft.
through
of gross floor area
Fast Food with drive
10 spaces per 1.001 sq. R
through
of gross floor area
Financial Institutions
4 spaces per 1.000 sq. ft.
including but not limited
of gross floor area
to banks. savings and
loans. credit unions
463
rAMWO syp. 140 . 9.$441
9269.5
(Arndt supp. No. 9. ")
464
Parking Spaces
Use
Required
Health Clubs, Fitness
I space per 35 sq. ft. of
Centers
gross floor area in all
occupying more than
workout areas
Hotels/Motels
I space per room plus the
dinin ar area
number of spaces required
Regional Shopping
for ancillary uses such as
Centers
restaurants, large meeting
Senior Citizen affordable
rooms, etc.
Industrial,
3 spaces per 1,000 sq. ft.
Manufacturing
of gross floor area for
I iving facili
projects less than 10,001
Senior Citizen Market
sq. ft. in area.
rate housing units
2 spaces per 1,000 sq. ft.
Movie theater,
of gross floor area for
p erforming arts center
projects 10,001 sq. ft. in
Tutorial schools;
area or greater
Martial Arts Studios
I space per 100 sq. ft. of
schools, Private schools
instructional floor area
roffices,•GW6ziS?
a'spaces;pe 1,000 v
of gross floor area
Offices. MedicaVDental
6 spaces per 1.000 sq. ft.
of gross floor area
Optometrists and
5 spaces per 1.000 sq. ft.
Opticians
of cross floor area
Public/Private Assembly
I space per 5 permanent
buildings, churches,
fixed seats: I space per 35
recreation community
sq. ft. ofarea w/ non -fixed
buildings, private clubs
seating: I space per 28
including but not limited
linear feet of bench area
Psychologists.
4 spaces per 1.000 sq. ft.
Psychiatrist and
of gross floor area
Counseling offices
Restaurants/Bars
10 spaces per 1.000 sq. ft.
unless otherwise set forth in other sections of the
of gross floor area for
restaurants,bars
contain ing less than 5,001
sq. ft. of floor area
15 spaces per 1,000 sq. ft.
of gross floor area for
restaurants/bars
containing 5.001 sq. ft. of
floor area or greater -
(Arndt supp. No. 9. ")
464
9269.6. LOCATION.
Required parking spaces shall be located either (a)
on the same lot or sit, or (b) on a lot or site contigu-
ous thereto or within one hundred (100) feet of the
building or land use the parking spaces will serve, or
Parking Spaces
Use
Required
Restaurants with bars
20 spaces per 1,000 sq. R
and/or cocktail lounges
of gross floor area
occupying more than
30 of the total
dinin ar area
Regional Shopping
4.75•per 1,000 sq. ft, of
Centers
modified floor area
Senior Citizen affordable
l space per unit
apartment housin
Senior Citizen assisted
1.5 spaces per unit
I iving facili
Senior Citizen Market
2 spaces per unit
rate housing units
Movie theater,
I space per 3 fixed seats
p erforming arts center
Tutorial schools;
Facilities for children
learning centers: Trade
under high school age: I
schools, Private schools
space per employee plus I
space for every 5 students
Trade Schools/Private
schools, Learning centers
for students of high
school age or older. I
space per employee plus I
space for every 3 students
Warehouses
2 spaces per 1,000 sq. ft.
of aross floor area
rDtN etr "m gOUses,
US pa n W0034.11?
including but not limited
of gross Floor area
".to MlI ervice uses.
nail and tgyjy salfin`x
A_sNadul tent' ►ertatn' Rena'
Land uses not specifically listed in the above chart shall
provide parking as noted in "Other Permitted Uses -
unless otherwise set forth in other sections of the
Arcadia Municipal Code.
9269.6. LOCATION.
Required parking spaces shall be located either (a)
on the same lot or sit, or (b) on a lot or site contigu-
ous thereto or within one hundred (100) feet of the
building or land use the parking spaces will serve, or
I t l ?t "
142 40 0
T C M HEALING INSTITUTE
FRANCIS C. YU
Ph.D., DIPL. Ac., CA.
DOCTOR OF ORIENTAL MEDICINE
FOUNDED 1888
June 1, 2006
Andrew Gonzales, Assistant Planner
Planning Services, City of Arcadia
240 West Huntington Drive
Arcadia, CA 91007
Re: Application MC 06 -19, 813 W. Huntington Drive
Dear Mr. Gonzales:
As owner of the property adjacent to the above referenced address, I oppose the
modification to allow medical use, to prevent detriment to myself and to obviate further
traffic haiards on Huntington Drive. Even though I would welcome a professional
practice of the stature of Dr. Baptie's next to my office, placing this enterprise into a
building with parking inadequate to serve it, along with the other two businesses already
housed there, is ill advised.
The proposal under consideration would allow a third business to operate at 813 W.
Huntington Drive, which has barely enough parking for one. (Currently, a liquor store and
a tattoo business occupy the building.) When I developed my property, I agreed to
restrictions imposed by the city to prevent parking problems and maintain a high level of
appeal and impressive property value along this distinctive corridor. The extra vehicle
traffic and demand for parking which an additional business would bring to 813 W.
Huntington Drive would necessitate parking along the street, because the present 7
parking spaces simply will not be adequate. Since messengers and other calling on Merrill
Lynch, the tenant in the downstairs portion of my building, often park on the street, which
customers and employees park in our lot. These necessary visitors would be in
competition which clientele and employees from next door and would, at times, have no
place to park. It is unfair to make exceptions to those same rules with which my tenants
and I have complied, and thus impair our ability to conduct business.
In addition, current regulations require at least 22 parking spaces per 3,750 square feet of
medical and retail office space, the approximate size of this building, as well as a
handicapped space, larger than a regular parking place. The practice of Dr. Bruce Baptie,
physical therapy and acupuncture, probably serves a significant number of injures and
disabled patients, who must be accompanied by care givers and possibly arrive in vans,
making the city's claim that the practice would be strictly "one patient/ one doctor"
insufficient reason for making an exception. Patient parking, combined with the parking
801 WEST HUNTINGTON DR. • SUITE 800 • ARCADIA, CA 91007
626.254.8520 ♦ 800.600•HEAL A FAX 626.254.0366
www.tcmhealing.com
0412
T C M HEALING INSTITUTE
FRANCIS C. YU
Ph.D., DIPL. AD., CA.
DOCTOR OF ORIENTAL MEDICINE
FOUNDED 1898
needs of the existing businesses, make the present 7 available spaces completely
inadequate to support the proposed change. The requested modification, then, is an
unreasonable and extreme departure from established regulations and should not be
considered.
Perhaps the most important reason to reject this application is the traffic danger which an
additional business would create. I not only work in Arcadia: I live here and own property
here. One has to wonder how the current tattoo parlor, which was opened as a third retail
business housed in this property (before the saddle shop vacated), was allowed without a
hearing such as the city is conducting in the present matter. Originally, this property
housed only two businesses, the liquor store and the saddle shop. This time, the city needs
to listen to its residents and property owners.
It is critically important to me to keep Arcadia's enviable way of life and maintain its
dignified business climate. Property values and quality of life are at stake, and officials
who plan our city's future need to be sensitive to the concerns of those who live here.
Presently, on busy days, all available parking on this property is taken. I picture increased
volume of traffic and resulting unsafe conditions along this busy boulevard, due to
dangerously restricted ingress and egress of this property, reason enough to reject the
current application.
It is my intention to raise these concerns at the hearing on June 12, 2006
Sincerely,
e ; P z m 4-
Francis C. Yu
CC: Roger Chandler, Mayor, City of Arcadia, Mickey Segal, Mayor Pro Tern, Peter
Amundson, City Council Member, Robert C. Harbicht, City Council Member, John Wuo,
City Council Member, Bill Kelly, City Manager, and Don Penman, City Assistant
Manager.
801 WEST HUNTINGTON DR. • SUITE 800 • ARCADIA, CA 91007
626.254.8520 A 800-600-HEAL A, FAX 626.254.0366
www.tcmhealing.com