City of Culver City, California
Agenda Item Report
Meeting Date: 07/26/10 Item Number: A-1
REDEVELOPMENT AGENCY BOARD AGENDA ITEM: (1) Approval of an Affordable
Housing Agreement with 4043 Irving Place Investors, LLC. to Create Nine Moderate
and Three Low Income Housing Units at 4043 Irving Place; (2) Approval and
Adoption of the Mitigated Negative Declaration and Mitigation Monitoring Program;
and (3) Approval of a Related Budget Amendment.
Contact Person/Dept.: Todd Tipton,
Redevelopment Administrator, Tevis
Barnes, Housing Division Manager
Phone Number: (310) 253-5783 and 5782
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (USPS) All businesses, occupants and property owners within a 500
foot radius of the site (07/12/10); (E-Mail) Meetings and Agendas – Redevelopment
Agency (07/21/10).
Department Approval:
Sol Blumenfeld: (07/14/10)
Agency General Counsel Approval:
Murray Kane: (07/22/10)
Chief Financial Officer Approval:
Jeff Muir (by N. Kimball) (07/22/10)
Executive Director Approval:
P. Lamont Ewell (07/22/10)
RECOMMENDATION:
Staff recommends the Redevelopment Agency Board (Agency Board) approve an
Affordable Housing Agreement with 4043 Irving Place Investors, LLC. (Developer) to
provide approximately $6 million in funding for the creation of nine moderate and
three low income housing units at 4043 Irving Place (Property).
BACKGROUND:
In 2008, the Agency Board adopted a Comprehensive Housing Strategy (CHS) that
outlines the allocation of Housing Set Aside Funds to satisfy the requirements of the
Regional Housing Needs Assessment (RHNA), State Housing Element Law and
California’s Community Redevelopment Law. The CHS is based on the concept of
providing mixed-income, low-density, scattered site affordable housing
developments.
On December 15, 2008, the City Council voted to allow construction of a mixed-use
project with 28 residential units, one 1,403 square foot commercial unit and 66
subterranean parking spaces on the Property. The building height was limited to 45
feet. At that same meeting, the City Council, as lead agency, made certain findings
and adopted a Mitigated Negative Declaration and Mitigation Monitoring program for
the project. The proposed Agreement does not change the approved plans for the City of Culver City, California
Agenda Item Report
project (including, but not limited to, number of units, parking spaces, building height,
building envelope, and setbacks).
In early 2010, the Developer requested that the Agency Board consider participating
in the development by creating affordable housing units within the project. The
Agency Board’s participation would restrict 12 of the 28 housing units to income
eligible tenants. The remaining 16 units would remain market rate units.
DISCUSSION:
If the Agency Board were to approve 12 affordable units, the units would be
comprised of 9 moderate income units (e.g., $67,000 maximum annual income,
based upon 2010 limits for a three-person household) and 3 low income units (e.g.,
$59,650 maximum annual income, based upon 2010 limits for a three-person
household). The 9 moderate units would be comprised of 5 one bedroom and 4 two
bedroom units and the 3 low income units would be comprised of 1 one bedroom
and 2 two bedroom units. In consideration for Agency assistance, the affordable
units would be subject to covenants restricting rents to the maximum allowable
under Community Redevelopment Law for Los Angeles County based upon limits
published by the California Department of Housing and Community Development
(HCD).
The total amount of assistance required is approximately $6 million. Assistance is
necessary due to the existence of both a Feasibility and Affordability gap. The
Affordability Gap (approx. $2.6 million) results due to the property owner discounting
the rents for the 12 affordable units and the Feasibility Gap (approx. $3.4 million)
results from the property owner foregoing the potential to convert the units to
condominiums during the 55-year covenant period. The Agency’s financial analyst,
Keyser Marston Associates (“KMA”), has reviewed the property owner’s proposal
and believes the amount of assistance to be accurate.
The proposed deal points are as follows:
1. The units would be secured for 55 years via income and affordability covenants.
The covenants will be superior to any third party financing including first trust
deeds so that it will not be eliminated in the event of a default.
2. The property would not be transferrable without permission from the Agency
Executive Director, based upon the proposed transferee’s qualifications, financial
capability and experience.
3. The Affordability Gap would be funded in the form of a $2,626,000 grant or
forgivable loan and is conditioned on recordation of Affordable Covenants.
4. The Feasibility Gap would be funded in the form of a $3,366,000 loan with a
1.5% interest rate (payable from 25% of the net cash flow generated by the
project each year). The Agency loan shall be subordinated to any construction
and permanent loans. City of Culver City, California
Agenda Item Report
5. The loan would be secured by a subordinate trust deed on the property, and
other security documents.
6. Agency funds would be deposited in an escrow account and distributed
proportionally with the construction loan in accordance with an Intercreditor
Agreement.
7. Change orders that alter the predetermined size, layout, appliances, fixtures and
finishes of the affordable units will not be permitted during the construction
process without Agency approval. The Agency will receive 50 percent of any
cost savings that occur during construction, to be applied toward repayment of
the Agency Loan.
8. The Agency would receive 50 percent of any revenues generated through the
sale or a cash-out refinancing of the Property. The maximum loan-to-value ratio
at the time the property is refinanced and net revenues are generated is 75
percent, unless the Agency Executive Director agrees otherwise.
9. The Developer will be required to reimburse the Agency up to $75,000 (subject to
cost verification) in the event of agreement termination prior to the closing of
construction financing.
10. Construction is scheduled to begin in October 2011 and conclude in April 2013.
11. The Developer will be obligated to give priority in renting the affordable units to
three groups, (i) first, persons who have been displaced by activities of the City
or the Agency, (ii) second, employees of the City and the Culver City Unified
School District, and (iii) third, persons on the Agency’s Rental Assistance
Program Waiting List. The priority to be given to employees of the City and the
School District will promote the public welfare by helping to assure that City and
School District employees have adequate opportunities to live in the community
they serve.
12. The Agency will monitor the project to assure that the Developer is complying
with the rent and income restrictions on the affordable units and with the
approved Management Plan and Maintenance Program. The Developer will pay
a $5,000 annual monitoring fee to the Agency to help offset the Agency’s costs in
this regard.
FISCAL ANALYSIS:
The approximate $6 million in proposed financial assistance equates to $499,000
per affordable unit. Assuming an average unit size of 1,200 square feet, this
equates to a per square foot cost of $416. This amount is in an affordable unit cost
range that is consistent with what Santa Monica ($460 per square foot) expends on
affordable units and what the Agency Board will likely spend on the Globe Avenue
project ($433 per square foot).
The financial assistance will be funded from the Low/Moderate Income Housing
Fund (LMIHF), which has an available appropriable balance of approximately $16
million. The available appropriable balance is the amount available after making the
$11 million loan to the Redevelopment Agency to pay their FY 2009-10 SERAF City of Culver City, California
Agenda Item Report
obligation. Should the Agency Board approve the requested financial assistance,
the available appropriable balance would decrease to approximately $10 million,
then increase incrementally over the next five years as the SERAF loan is repaid to
the LMIHF.
ATTACHMENTS:
1. Draft Affordable Housing Agreement
2. Correspondence
3. Mitigated Negative Declaration and Mitigation Monitoring Program
MOTION:
That the Agency Board:
1. Approve and adopt the Mitigated Negative Declaration and Mitigation
Monitoring Program for the project, in the form previously adopted by the City
Council; and,
2. Approve a Budget Amendment appropriating $6 million from the
Low/Moderate Income Housing Fund pursuant to the Affordable Housing
Agreement; and,
3. Approve an Affordable Housing Agreement with 4043 Irving Place Investors,
LLC. to create nine Moderate and three Low Income affordable housing units
at 4043 Irving Place; and,
4. Authorize the Agency General Counsel to review/prepare the necessary
documents; and,
5. Authorize the Executive Director to execute such documents on behalf of the
Agency.
MEETING DATE: 07.26.10
AGENDA ITEM: Authorization to Execute an Affordable Housing
Agreement with 4043 Irving Place Investors, LLC. to
Create Nine Moderate and Three Low Income Housing
Units at 4043 Irving Place.
ATTACHMENTS
Pages
1. Draft Affordable Housing Agreement 1-141
2. Correspondence 142-144
AFFORDABLE HOUSING AGREEMENT
By And Between
THE CULVER CITY REDEVELOPMENT AGENCY,
a public body, corporate and politic,
and
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
(4043 Irving Place)
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ........................................................................................................... 1
ARTICLE II SUBJECT OF THIS AGREEMENT; TERMS OF FINANCING........................ 11
Section 201 Purpose of Agreement..............................................................................11
Section 202 The Redevelopment Plan ...........................................................................11
Section 203 Prohibition Against Transfers..................................................................12
Section 204 Agency Assistance.....................................................................................13
Section 205 Developer’s Conditions Precedent to Construction Financing Event......14
ARTICLE III DEVELOPMENT OF THE PROJECT ................................................................. 15
Section 301 Scope of Development...............................................................................15
Section 302 Construction Drawings and Related Documents .......................................15
Section 303 Agency Approval of Plans, Drawings and Related Documents ..............16
Section 304 Cost of Development .................................................................................16
Section 305 Schedule of Performance ...........................................................................17
Section 306 Local, State, and Federal Laws................................................................17
Section 307 Nondiscrimination During Construction..................................................19
Section 308 Insurance..................................................................................................19
Section 309 Indemnification........................................................................................20
Section 310 Disclaimer of Responsibility by the Agency .............................................21
Section 311 Rights of Access ......................................................................................21
Section 312 Taxes, Assessments, Encumbrances and Liens .........................................22
Section 313 Security Financing; Right of Holders ......................................................22
Section 314 Rights to Plans ...........................................................................................23
Section 315 Hazardous Materials ................................................................................23
Section 316 Release of Construction Covenants ...........................................................23
ARTICLE IV USE OF THE SITE.............................................................................................. 24
Section 401 Uses..........................................................................................................24
Section 402 Management Plan; Annual Project Budget; Bi-Annual Reports ...............25
Section 403 Maintenance of the Property....................................................................25
Section 404 Lead-Based Paint. ....................................................................................26
Section 405 Barriers to the Disabled .............................................................................27
Section 406 Creation of Capital Reserve Account ......................................................27
Section 407 Capital Reserves.........................................................................................27
Section 408 Obligation to Refrain from Discrimination..............................................27
Section 409 Form of Nondiscrimination and Nonsegregation Clauses.........................27
Section 410 Effect and Duration of Covenants............................................................28
Section 411 Effect of Violation of Covenants ...............................................................29
Section 412 Monitoring .................................................................................................29
ARTICLE V DEFAULTS, REMEDIES AND TERMINATION.............................................. 30
Section 501 Defaults; Notice of Cure; Cure Rights.......................................................30
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Section 502 Institution of Legal Actions .......................................................................30
Section 503 Applicable Law........................................................................................31
Section 504 Acceptance of Service of Process............................................................31
Section 505 Rights and Remedies Are Cumulative.......................................................31
Section 506 Specific Performance.................................................................................31
Section 507 Termination by Agency .............................................................................31
Section 508 Termination by Developer .........................................................................31
Section 509 Termination by Either Party.......................................................................32
Section 510 Limited Recourse Obligations ...................................................................33
Section 511 Litigation Costs........................................................................................33
ARTICLE VI GENERAL PROVISIONS .................................................................................. 34
Section 601 Developer’s Warranties. ..........................................................................34
Section 602 Notices, Demands and Communications between the Parties...................34
Section 603 Conflicts of Interest..................................................................................35
Section 604 Nonliability of Agency Officials and Employees....................................35
Section 605 Effect of Redevelopment Plan Amendment ............................................36
Section 606 Extension of Times of Performance ........................................................36
Section 607 Inspection of Books and Records ............................................................36
Section 608 Action or Approval ..................................................................................36
Section 609 Assurances to Act in Good Faith ...............................................................36
Section 610 Real Estate Commissions...........................................................................37
Section 611 Interpretation............................................................................................37
Section 612 Severability ..............................................................................................37
Section 613 No Third Party Beneficiaries .....................................................................37
Section 614 Authority to Sign......................................................................................37
Section 615 Titles and Captions. ...................................................................................37
Section 616 Gender and Number...................................................................................38
ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS ........................... 38
ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY THE AGENCY; DATE OF
AGREEMENT.................................................................................................... 38
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EXHIBITS
EXHIBIT NO. 1 - LEGAL DESCRIPTION
EXHIBIT NO. 2 - SITE MAP
EXHIBIT NO. 3 - METHOD OF FINANCING
EXHIBIT NO. 4 - SCHEDULE OF PERFORMANCE
EXHIBIT NO. 5 - SCOPE OF DEVELOPMENT
EXHIBIT NO. 6 - PROJECT BUDGET
EXHIBIT NO. 7 - AGENCY PROMISSORY NOTE
EXHIBIT NO. 8 - AGENCY DEED OF TRUST
EXHIBIT NO. 9 - AGREEMENT CONTAINING COVENANTS
EXHIBIT NO. 10 - ASSIGNMENT OF RENTS AND LEASES
EXHIBIT NO. 11 - ASSIGNMENT OF AGREEMENTS
EXHIBIT NO. 12 - ENVIRONMENTAL INDEMNITY
EXHIBIT NO. 13 - UCC1 FINANCING STATEMENT
EXHIBIT NO. 14 - NOTICE OF AFFORDABILITY RESTRICTIONS ON
TRANSFER OF PROPERTY
EXHIBIT NO. 15 - RELEASE OF CONSTRUCTION COVENANTS
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Affordable Housing Agmt.doc [7/21/2010]
AFFORDABLE HOUSING AGREEMENT
This AFFORDABLE HOUSING AGREEMENT (“Housing Agreement”) dated for
identification purposes only July 26, 2010 is entered into by and between THE CULVER CITY
REDEVELOPMENT AGENCY, a public body, corporate and politic, (“Agency”) and 4043
IRVING PLACE INVESTORS, LLC, a California limited liability company (“Developer”). The
Agency and Developer (collectively, the “Parties”) hereby agree as follows:
RECITALS
A. Developer holds fee title to the “Property” (as such term is defined herein) and
intends to implement the “Project” (as such term is defined herein) on the Property in accordance
with the terms of this Housing Agreement.
B. The Agency is a public body, corporate and politic, exercising governmental
functions and powers and organized and existing under the Community Redevelopment Law of
the State of California (California Health and Safety Code Section 33000 et seq.).
C. Pursuant to the Community Redevelopment Law, the Agency has established a
Housing Set Aside Fund and has deposited therein certain tax revenues made available to the
Agency exclusively for the purpose of increasing, improving and preserving the community’s
supply of affordable low and moderate income housing (“Set Aside Funds”).
D. The Agency desires to meet its affordable housing goals pursuant to the
Community Redevelopment Law by making a grant or forgivable loan (to be determined as
provided herein) of Set Aside Funds in the approximate amount of TWO MILLION SIX
HUNDRED THOUSAND SIX HUNDRED TWENTY-SIX DOLLARS ($2,626,000) (the “the
Agency Grant”) and a loan of Set Aside Funds in the approximate amount of THREE MILLION
THREE HUNDRED SIXTY-SIX THOUSAND DOLLARS ($3,366,000.00) (the “the Agency
Loan”) to assist Developer in funding the development of the Property with one commercial unit
and 28 residential rental units, of which 12 will be restricted for occupancy by low and moderate
income households at affordable housing cost for a period of 55 years, more specifically, the
Project as hereinafter defined.
NOW, THEREFORE, in consideration of the promises and covenants contained herein,
the above recitals, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
For purposes of this Housing Agreement, the following capitalized terms shall have the
following meanings:
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The term “Affiliate” shall mean (i) any party directly or indirectly controlling, controlled
by or under common control with another party, (ii) any party owning or controlling 10% or
more of the outstanding voting securities of such other party, (iii) any officer, director or partner
of such party, or (iv) if such other party is an officer, director or partner, any company for which
such party acts in any such capacity.
The term “Affordable Rent” shall mean the monthly payments charged to and paid by
tenants to the Developer for the use and occupancy of a Restricted Unit and facilities associated
therewith, including a reasonable allowance for utilities, but shall not include any optional
services provided by Developer to residents (i.e., concierge, cleaning or other personal services
that are not customarily included in rent). Affordable Rent shall mean
(a) for Low Income Units, rental rates not to exceed thirty percent (30%) times sixty
percent (60%) of Area Median Income adjusted for household size appropriate to the unit.
(b) for Moderate Income Units, rental rates not to exceed thirty percent (30%) times
one hundred ten percent (110%) of Area Median Income adjusted for household size appropriate
to the unit
As used in this definition of “Affordable Rent” the phrase “adjusted for household size
appropriate to the unit” means a household size equal to the number of bedrooms in the unit plus
one. Affordable Rent shall include a reasonable utility allowance for tenant-paid utilities based
on the Los Angeles County Housing Authority’s published utility schedules.
The term “Agency” shall mean the Culver City Redevelopment Agency, a public body,
corporate and politic, having its offices at 9770 Culver Boulevard, Culver City, CA 90230-0507,
and any assignee of, or successor to, the rights, powers, and responsibilities of the Agency.
The term “Agency Deed of Trust” shall mean the Deed of Trust with Assignment of
Rents attached as Exhibit No. “8” hereto, in which Developer is the Trustor and the Agency is
the Beneficiary, which secures the Agency Loan.
The term “Agency Executive Director” shall mean the individual duly appointed to the
position of Executive Director of the Agency, or authorized designee. Whenever an
administrative action is required by the Agency to implement the terms of this Housing
Agreement, the Agency Executive Director, or an authorized designee, shall have authority to act
on behalf of the Agency, except with respect to matters reserved under California law wholly for
determination by the Agency’s governing body. By way of example, the Executive Director shall
have the authority to issue interpretations, waivers and/or enter into certain implementing
agreements to this Agreement on behalf of the Agency and such interpretations, waivers and/or
implementing agreements may include extensions of time to perform as specified in any adopted
schedule of performance, Permitted Transfer of rights or obligations of Developer, or Permitted
Transfer of Developer’s interest in the Project, subordination agreements or estoppels in a form
acceptable to the Agency Executive Director to evidence that the Agency Loan and Agency
Grant is subordinate to the Senior Loan, and other documents in accordance with this
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Agreement, as reasonably requested by the Investor or the Senior lender in order to effect a
closing of the financing of the Project.
The term “Agency Grant” shall mean the Agency’s grant or forgivable loan to
Developer in an amount not to exceed TWO MILLION SIX HUNDRED TWENTY SIX
THOUSAND DOLLARS ($2,626,000.00) of Set Aside Funds, as evidenced by such documents
as are reasonably and customarily required to effect a transfer of such funds to Developer or an
entity controlled by Developer for payment of Project Costs. The form of the Agency Grant shall
be determined pursuant to paragraph (b) of Section 204 of this Agreement.
The term “Agency Loan” shall mean the Agency’s loan to Developer in an amount not to
exceed THREE MILLION THREE HUNDRED SIXTY-SIX THOUSAND DOLLARS
($3,366,000.00) of Set Aside Funds, as evidenced by the Agency Note and secured by the
Agency Deed of Trust.
The term “Agency Loan Documents” mean the Agency Note, the Agency Deed of
Trust, Assignment of Rents, Assignment of Agreements, and Environmental Indemnity.
The term “Agency Note” shall mean that certain Promissory Note evidencing the Agency
Loan, substantially in the form attached hereto as Exhibit No. “7.”
The term “Agreement Containing Covenants” shall mean that certain Agreement
Containing Covenants and Declaration of Covenants and Restrictions, substantially in the form
attached hereto as Exhibit No. “9”, which is incorporated herein by this reference.
The term “Area Median Income” shall mean the area median income of Los Angeles
County, with adjustments for household size, as estimated annually 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 published by California’s Housing and Community
Development Department pursuant to Health and Safety Code section 50093.
The term “Assignment of Agreements” shall mean the assignments by Developer to the
Agency and City of plans, contracts and permits, substantially in the form attached hereto as
Exhibit No. “11”, which is incorporated herein by this reference.
The term “Assignment of Rents and Leases” shall mean a document substantially in the
form attached hereto as Exhibit No. “10”, which is incorporated herein by this reference.
The term “Completion” shall mean, with regard to development of the Project, the
satisfaction of each of the following events: (i) the Agency shall have determined that
development of the Project has been completed substantially in accordance with the plans
approved by the Agency, (ii) certificates of occupancy shall have been issued with respect to all
of the Units, (iii) the time for Developer’s contractor, suppliers and subcontractors to file a claim
pursuant to Civil Code Sections 3115-3117 has expired or Developer has delivered to the
Agency unconditional lien releases for its contractor, suppliers and subcontractors, and any
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mechanic’s liens that have been recorded or stop notices that have been delivered have been
paid, settled or otherwise extinguished, discharged, released, waived, bonded around or insured
against, provided that a notice of completion pursuant to Civil Code Section 3117 has been duly
recorded in the land records of Los Angeles County.
The term “Construction Deed of Trust” shall mean the deed of trust securing the
Construction Loan.
The term “Construction Financing Event” shall mean the point in time when all
conditions precedent to the funding of the Agency Grant and the Agency Loan have been
satisfied, in accordance with the Method of Financing.
The term “Construction Lender” shall mean an institutional lender reasonably approved
by the Agency Executive Director.
The term “Construction Loan” shall mean a loan of construction funds from the
Construction Lender in the amount set forth in the final approved Project Budget.
The term “Construction Loan Documents” shall mean, in addition to the Construction
Deed of Trust, a loan agreement, promissory note, financing statement, guaranties, and similar
documents and instruments to be executed by Developer in connection with the Construction
Loan.
The term “Construction Period” shall mean the period of time commencing upon the
Construction Financing Event and ending upon the Conversion Date.
The term “Conversion Date” shall mean the date that all of the conditions precedent to
the funding of the Permanent Loan have been satisfied and the Construction Loan has been
repaid in full.
The term “Days” shall mean calendar days and the statement of any time period herein
shall be calendar days and not working days, unless otherwise specified.
The term “Developer” shall mean 4043 IRVING PLACE INVESTORS, LLC, a
California limited liability company, whose address is 6060 Center Drive, Suite 800, Los
Angeles, California, 90045, and any permitted assignee or nominee. The manager of the
Developer is Renaissance Holding Company, LLC, a California limited liability company whose
sole manager is George H. Mitsanas and whose authorized representative is Silvestre Gregory
Gonzales. The Developer has been formed as a California limited liability company in which
one or more Investors will be admitted in consideration of a capital contribution that will be used
by Developer to fund a portion of the cost of acquiring and developing the Site and operating the
Project. George Mitsanas shall have sole and exclusive authority to act on behalf of the
Developer in all matters under this Agreement and any consent, act, approval or statement by
him shall be deemed conclusive evidence of Developer’s action with respect to any matter under
this Agreement and shall be binding upon Developer.
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The term “Developer Equity” shall mean funds provided by the Developer for payment
of Project Costs and shall not include the Agency Grant or the Construction Loan, the Agency
Loan, or any other borrowed funds, and shall include the Deferred Developer Fee and any other
funds of the Developer.
The term “Developer Fee” means the fee paid to an Affiliate of Developer for
development services with respect to the development of the Project, in the amount set forth in
the final approved Project Budget, the payment of which shall be due at Completion of the
Project but some or all of which may be deferred and payable as an Operating Expense.
The term “Effective Date” shall mean the date this agreement is executed by the Agency.
The term “Eligible Tenant” shall mean any person entitled to rent a Low Income Unit or
a Moderate Income Unit as set forth in the Agreement Containing Covenants.
The term “Environmental Indemnity” shall mean the indemnity by Developer,
substantially in the form attached hereto as Exhibit No. “12”, which is incorporated herein by
this reference.
The term “Escrow” shall mean that certain escrow with First American Title Company,
or another escrow company mutually acceptable to the Agency and the Developer, which has
been established for the Construction Financing Event.
The term “Fannie Mae” shall mean the government-sponsored enterprise of the same
name chartered by United States Congress and under the conservatorship of Federal Housing
Finance Agency, and any successor or other entity that shall carry on the purpose of Fannie Mae.
The term “Freddie Mac” shall mean the government-sponsored enterprise of the same
name chartered by United States Congress and under the conservatorship of Federal Housing
Finance Agency, and any successor or other entity that shall carry on the purpose of Freddie
Mac.
The term “Force Majeure” or “Force Majeure Event” shall mean the following events,
provided that they actually delay and interfere with the timely performance of the matter to
which it would apply and despite the exercise of diligence and good business practices are or
would be beyond the reasonable control of the party claiming such interference: war;
insurrection; strikes; lock-outs; riots; systemic failure of the financial markets; 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 including litigation challenging the validity of this transaction or any element thereof;
unusually severe weather; inability to secure necessary labor, materials or tools; delays of any
contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any
Governmental Agency (except acts or failure to act of the Agency shall not excuse performance
by the Agency); the imposition of any applicable moratorium by a Governmental Agency; or any
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other causes which despite the exercise of diligence and good business practices are or would be
beyond the reasonable control of the party claiming such delay and interference.
Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure
Event unless and until the party claiming such delay and interference delivers to the other party
written notice describing the event, its cause, when and how such party obtained knowledge, the
date the event commenced, and the estimated delay resulting therefrom. Any party claiming a
Force Majeure Delay shall deliver such written notice within ten (10) business days after it
obtains actual knowledge of the event.
The term “Force Majeure Delay” shall mean any delay in taking any action required by
this Housing Agreement, proximately caused by the occurrence of any Force Majeure Event.
The term “Governmental Approvals” shall mean and include any and all general plan
amendments, zoning approvals or changes, required approvals and certifications under the
California Environmental Quality Act, tentative and final tract maps, variances, conditional use
permits, demolition permits, excavation/foundation permits, grading permits, building permits,
inspection reports and approvals, certificates of occupancy, and other approvals, permits,
certificates, authorizations, consents, orders, entitlements, filings or registrations, and actions of
any nature whatsoever required from any Governmental Agency in order to commence and
complete the Project.
The term “Governmental Agency” means the United States, the State of California, the
County of Los Angeles, the City of Culver City or any other political subdivision in which the
Property is located, and any court or political subdivision, agency or instrumentality having
jurisdiction over the Property.
The term “Hazardous Substances” shall have the meaning set forth in the
Environmental Indemnity.
The term “Housing Agreement” or “Agreement” shall mean this Affordable Housing
Agreement executed by and between the Agency and Developer, including all exhibits attached
hereto, which exhibits are incorporated herein by this reference and all other documents
incorporated herein by reference.
The term “Improvements” shall mean the improvements to be developed on the Property
in accordance with this Housing Agreement, including but not limited to the Scope of
Development.
The term “Investor” shall mean a person or entity, or Affiliate of such person or entity
who (i) has been properly qualified as an investor in the Developer under applicable federal and
state law and (ii) has obtained or is contractually obligated to obtain an ownership interest in the
Developer for value under terms deemed reasonable by Developer and (iii) will not exercise
management or control of the Developer, other than customary investor democracy rights. The
term “Investor” shall not include (i) elected officials, officers or employees of the Agency or the
City of Culver City or any member of such person’s immediate family and (ii) persons or entities
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who are listed in the Specially Designated Nationals records maintained by the United States
Department of Treasury’s Office of Foreign Assets Control.
The term “Land Lender” shall mean 1st Century Bank or another institutional lender
selected by the Developer.
The term “Land Loan” shall mean a loan of Property acquisition funds from the Land
Lender, which loan will be repaid in full at the Construction Financing Event.
The term “Lease” means the lease entered into between Developer and an Eligible
Tenant of a Low Income Unit or a Moderate Income Unit in the Project.
The term “Low Income Household” shall have the meaning given to “lower income
household” in Health and Safety Code section 50079.5(a), generally being a household whose
income does not exceed 80% of the Area Median Income adjusted for family size.
The term “Low Income Unit” shall mean one of the two (2) two-bedroom and one (1)
one-bedroom rental dwelling units in the Project restricted to occupancy by Low Income
Households.
The term “Managing Member” shall mean Renaissance Holding Company, LLC, a
California limited liability company.
The term “Method of Financing” shall mean the Method of Financing attached hereto as
Exhibit No. “3”, which is incorporated herein by this reference.
The term “Moderate Income Household” shall mean a household whose income does
not exceed 120% of Area Median Income adjusted for family size.
The term “Moderate Income Unit” shall mean one of the five (5) two-bedroom and four
(4) one-bedroom rental dwelling units in the Project restricted to occupancy by Moderate Income
Households.
The term “Net Proceeds” shall mean the proceeds of a sale, transfer or refinancing after
repayment of existing indebtedness and other liens and charges on the Property, less the
reasonable and customary costs of the transaction.
The term “Notice of Affordability Restrictions” shall mean the notice required by
Health & Safety Code Section 33334.3(f) to be recorded against the Property, substantially in the
form of Exhibit No. “14” attached hereto.
The term “Operating Costs” shall have the same meaning as the definition of Annual
Operating Expenses set forth in the Agency Note.
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The term “Permanent Deed of Trust” shall mean the deed of trust securing the
Permanent Loan.
The term “Permanent Lender” shall mean an institutional lender reasonably approved
by the Agency Executive Director.
The term “Permanent Loan” shall mean a loan from the Permanent Lender to repay the
Construction Loan, in the amount set forth in the final approved Project Budget.
The term “Permanent Loan Documents” shall mean, in addition to the Permanent Deed
of Trust, a loan agreement, promissory note, financing statement, guaranties, and similar
documents and instruments to be executed by Developer in connection with the Permanent Loan.
The term “Permitted Transfer” shall mean any Transfer that is approved by the Agency
or expressly permitted by the terms of this Housing Agreement.
The term “Plans” shall mean any architectural and construction plans and drawings
prepared on behalf of Developer for the Project in accordance with this Housing Agreement.
The term “Project” shall mean generally the development on the Property of one
commercial unit and 28 residential Units (including one manager’s unit), and the subsequent
rental of the three (3) Low Income Units and the nine (9) Moderate Income Units to Eligible
Tenants, all at Affordable Rent for a period of not less than 55 years, pursuant to the procedures
set forth herein and more particularly described in the Scope of Development and Agreement
Containing Covenants.
The term “Project Budget” shall mean the sources and uses of funds for development of
the Project as set forth in Exhibit No. “6.” The Project Budget and Developer’s proposed method
of financing shall be subject to change from time-to-time, subject to the prior written approval of
Developer and the Agency Executive Director and subject to and conditioned on such further
review and approval by the Agency’s governing board as is needed to satisfy applicable law,
policies and procedures, upon which approval the Project Budget shall be replaced by the
approved revised Project Budget.
The term “Project Costs” shall mean all costs which are actually incurred by Developer
for the development of the Project, and shall include, without limitation, all of the items of cost
set forth in the Project Budget and similar costs, fees and expenses as approved by the Agency
Executive Director, but not including Operating Costs.
The term “Property” shall mean that certain real property located in the City of Culver
City, County of Los Angeles, State of California, commonly known as 4043 Irving Place, Culver
City, California, and legally described in Exhibit No. “1” and depicted on the Property Map
attached hereto as Exhibit No. “2”.
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The term “Release of Construction Covenants” shall have the meaning set forth in
Section 316 of this Housing Agreement.
The term “Restricted Period” shall mean not less than fifty-five (55) years from the
recordation of the Release of Construction Covenants for the Project.
The term “Restricted Units” shall mean the Low Income Units and the Moderate Income
Units.
The term “RHC” shall mean Renaissance Holding Company, LLC, a California limited
liability company and the sole manager of 4043 Irving Place Investors, LLC, the Developer.
The term “Schedule of Performance” shall mean that certain schedule attached hereto as
Exhibit No. “4”, setting forth the times upon which performance by the parties under this
Housing Agreement is due.
The term “Scope of Development” shall mean that certain exhibit attached hereto as
Exhibit No. “5.”
The term “Senior Deed of Trust” shall mean, individually and collectively, the
Construction Deed of Trust and the Permanent Deed of Trust.
The term “Senior Lender” shall mean, individually and collectively, the Construction
Lender and the Permanent Lender.
The term “Senior Loan” shall mean, individually and collectively, the Construction Loan
and the Permanent Loan.
The term “Senior Loan Documents” shall mean, individually and collectively, the
Construction Loan Documents and the Permanent Loan Documents.
The term “Set Aside Funds” shall mean and be limited to that portion of the Agency’s
general property tax increment allocation set aside pursuant to CRL Section 33334.2 for the
purposes of increasing, providing and preserving the community’s supply of low and moderate
income housing available at an affordable housing cost to persons and families of low or
moderate income.
The term “Transfer” shall mean:
(i) the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any
portion thereof or interest therein, whether voluntary, involuntary, by operation of law or
otherwise, the execution of any installment sale contract or similar instrument affecting all or a
portion of the Property or Project, or the lease of all or substantially all of the Property or Project,
except as provided in subparagraph (iii), below.
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(ii) “Transfer” shall also include the transfer, assignment, hypothecation or conveyance
of legal or beneficial ownership of any interest in Developer, or any conversion of Developer to
an entity form other than that of Developer at the time of execution of this Housing Agreement,
except that, a cumulative change in ownership interest of any member of the Developer of forty-
nine percent (49%) or less shall not be deemed a “Transfer” for purposes of this Housing
Agreement.
(iii) Notwithstanding paragraphs (i) and (ii), “Transfer” shall not include any of the
following Permitted Transfers:
(A) Any mortgage, deed of trust, or other form of conveyance for the Senior
Loan, but Developer shall deliver to the Agency in advance the proposed documents for
effectuating any such mortgage, deed of trust, or other form of conveyance for the Senior Loan.
(B) Any mortgage, deed of trust, or other form of conveyance for refinancing
of the Senior Loan, provided that, Developer must not receive any Net Proceeds from such
refinancing and Developer shall deliver to the Agency in advance the proposed documents for
effectuating the refinancing.
(C) The granting of easements to any appropriate governmental agency or
utility or permits to facilitate the development of the Property.
(D) A Transfer resulting from or in connection with a reorganization, merger
or conversion of Developer in which the ownership interests of Developer are assigned directly
or by operation of law to a person or persons, partnership, limited liability company or
corporation (“Resulting Entity”) which acquires the control or the ownership of Developer or all
or substantially all of the assets of Developer so long as such Resulting Entity is under the
control of either (i) RHC for so long as George H. Mitsanis remains the sole manager of RHC, or
(ii) George H. Mitsanas directly.
(E) the conveyance of title to the Property or Project in connection with a
foreclosure, a deed in lieu of foreclosure or similar conversion of such loan;
(F) A conveyance of the Project to a limited liability company in which the
Managing Member is Developer or Developer’s Managing Member, or a sale back from such
company to Developer or Developer’s Managing Member.
(F) Any refinancing that repays any of the Permanent Loan and results in Net
Proceeds to the Developer (such refinancing referred to herein as a “Take-out Loan”), if (i) the
Agency Executive Director reasonably determines (which determination shall not be
unreasonably withheld) that the resulting loan-to-value ratio (including the Take-out Loan, any
of the remaining Permanent Loan not repaid by the refinancing, and the Agency Loan) will not
exceed seventy-five percent (75%) and the debt service coverage ratio for the Take-out Loan is
at least 1.25 and (ii) the Agency receives its share of Net Proceeds due and payable to the
Agency under the Agency Note.
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(G) The leasing for occupancy of all or any part of the Property or Project in
accordance with this Housing Agreement and the Agreement Containing Covenants.
(H) The inclusion of equity participation by Developer by transfer or addition of
Investors or similar mechanism.
(I) A sale or Transfer of an ownership interest in Developer to an Investor and the
admission of Investor to the Developer or the redemption or sale of any interest of an Investor to
any other Investor;
(J) A sale or Transfer of ownership interests in Developer owned beneficially by
George H. Mitsanas, whether directly or indirectly, made for the purpose of effecting personal
estate planning for George H. Mitsanas or his estate and heirs and which does not diminish in
any way the management or control of Developer by George H. Mitsanas.
The term “Units” shall mean the one commercial unit and the twenty-eight (28) dwelling
units, including one manager’s unit, comprising the Project.
ARTICLE II SUBJECT OF THIS AGREEMENT; TERMS OF FINANCING
Section 201 Purpose of Agreement
(a) The purpose of this Housing Agreement is to promote affordable
housing by providing the Agency Grant in an amount equal to TWO MILLION SIX HUNDRED
TWENTY-SIX THOUSAND DOLLARS ($2,626,000), and the Agency Loan in an amount
equal to THREE MILLION THREE HUNDRED SIXTY-SIX THOUSAND DOLLARS
($3,366,000), as evidenced by the Agency Note secured by the Agency Deed of Trust, to assist
Developer in the construction and operation of affordable housing in the City of Culver City.
(b) This Housing Agreement is intended to facilitate Developer’s
construction of the Project and rental of the Low Income Units and the Moderate Income Units
to Low Income and Moderate Income Households for a period of not less than 55 years. The
Project pursuant to this Housing Agreement and the fulfillment generally of this Housing
Agreement are in the vital and best interests of the Agency and the City and the health, safety
welfare of the City’s residents, and are in accordance with the public purposes and provisions of
applicable federal, state, and local laws and requirements under which the Project has been
undertaken and is being assisted.
Section 202 The Redevelopment Plan
The purpose of this Agreement is to implement the Community Redevelopment Law of
the State of California (California Health and Safety Code Sections 33000 et seq.) (the “CRL”)
and the Redevelopment Plan (“Redevelopment Plan”) for the Culver City Redevelopment
Project (“Project Area”) by increasing, improving and preserving the supply of moderate income
housing in the community. The Agency intends this Housing Agreement to meet its obligations
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pursuant to Health and Safety Code Sections 33413, 33334.2 and, if applicable,
33413(b)(2)(A)(ii).
Section 203 Prohibition Against Transfers
(a) The qualifications and identity of the Developer are of particular concern to the
Agency. It is because of those qualifications and identity that the Agency has entered into this
Housing Agreement with the Developer. No voluntary or involuntary successor in interest of the
Developer shall acquire any rights or powers under this Housing Agreement except as expressly
set forth herein.
(b) Except for the Permitted Transfers set forth in this Housing Agreement’s
definition of the term “Transfer,” the Developer shall not assign all or any part of this Housing
Agreement without the prior written approval of the Agency Executive Director which shall be
given or withheld within thirty (30) days of the Agency’s receipt of all of the information,
documents and instruments required under this paragraph. The Agency’s approval shall not be
unreasonably withheld or delayed, and the Agency shall consent to any such Transfer by the
Developer, without any adjustment to the financial terms and conditions of this Agreement, if
prior to such Transfer, each of the following requirements is satisfied: (1) the Developer submits
or causes to be submitted to the Agency all information reasonably requested for the Agency to
make its determination required hereunder; (2) there is no event of default continuing under this
Agreement, the Agreement Containing Covenants or the Agency Loan Documents; (3) the
transferee executes an assumption agreement that is reasonably acceptable to the Agency and
that, among other things, requires the transferee to perform all obligations of the Developer set
forth in this Agreement, the Agreement Containing Covenants and the Agency Loan Documents;
(4) the Developer pays, or causes the proposed transferee to pay, the amount of the Agency’s
out-of-pocket costs (including reasonable attorneys’ fees) incurred in reviewing the Transfer
request; and (5) the Agency reasonably determines that the proposed transferee has the
qualifications and financial responsibility necessary and adequate to fulfill the obligations
undertaken in this Housing Agreement by the Developer. There shall be submitted to the
Agency for review all instruments and other legal documents proposed to affect any such
Transfer, and if approved by the Agency Executive Director, its approval shall be indicated to
the Developer in writing.
(c) For the reasons cited above, the Developer represents and agrees for itself and any
successor in interest that, except for the Permitted Transfers set forth in this Housing
Agreement’s definition of the term “Transfer,” without the prior written approval of the Agency
Executive Director, there shall be no cumulative change in ownership interest of any managing
member of greater than 49%, or with respect to the identity of the parties in control of the
Developer or the degree thereof, by any method or means.
(d) The Developer shall promptly notify the Agency of any and all changes
whatsoever in the identity of the parties in control of the Developer or the degree thereof, of
which it or any of its officers have been notified or otherwise have knowledge or information.
This Housing Agreement may be terminated by the Agency and the Agency may exercise any
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and all available remedies, if there is any significant change (voluntary or involuntary) in
membership, management or control, of the Developer (other than such changes occasioned by
the death or incapacity of any individual) other than Permitted Transfers.
(e) A Transfer approved by the Agency Executive Director shall be deemed to relieve
the Developer from its obligations under this Housing Agreement only if the approved transferee
expressly assumes all of the obligations of the Developer under this Housing Agreement and
agrees to be subject to all conditions and restrictions applicable to the Developer in this Housing
Agreement. Notwithstanding the foregoing, no Transfer, approved or otherwise, shall operate to
relieve the Developer of its indemnification obligations related to the Developer’s ownership and
operation of the Project.
(f) Consent to one Transfer shall not be deemed to be a waiver of the right to require
consent to future or successive Transfers.
Upon expiration of the term of the Agreement Containing Covenants, the provisions of
this Section 203 shall be of no further force or effect.
Section 204 Agency Assistance
(a) The total estimated cost of the Project is approximately $14,021,400, as further
described in the Project Budget and Method of Finance. This estimated cost includes the
Property acquisition costs and the hard and soft costs of constructing the Project. The “Agency
Assistance” consists of the Agency Loan and the Agency Grant. Developer shall use all Agency
Assistance for approved Project costs and Developer shall certify such use to Agency upon
Completion, in a form reasonably acceptable to the Agency Executive Director.
(b) The Agency will cooperate with the Developer in providing the Grant to Developer
in a manner which minimizes any adverse tax consequences to the Developer associated with the
receipt of the Agency Grant. In this regard, the parties contemplate that the Agency Grant will
be converted to a forgivable loan. However, if a forgivable loan creates a substantial risk of
adverse tax consequences to the Developer, Developer and Agency will determine an appropriate
alternative form for providing such funds, which may among other alternatives include providing
the Agency Grant to a corporation affiliated with Developer so as to effect a nonshareholder
contribution under Section 118 of the Internal Revenue Code or providing the Agency Grant to
an exempt organization, so long as the proceeds of the Agency Grant are used for the purposes
intended under this Agreement and so long as the recipient of the Agency Grant is under the
control of the Developer.
(c) The Agency agrees that this Agreement and the Agency Loan Documents and any
Agency Grant documents, but not the Agreement Containing Covenants, shall be made junior
and subordinate to the Senior Loan Documents given in connection with the Senior Loan,
including any Agency approved refinancing thereof established and obtained pursuant to and in
compliance with the provisions of this Agreement. The Executive Director of the Agency is
hereby authorized to execute such subordination agreements, intercreditor agreements, stand still
agreements, modifications to this Agreement and the Agency Loan Documents and any Agency
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Grant documents, and/or other documents as may be reasonably requested by the Senior
Lender(s) to evidence subordination to the Senior Loans, without further authorization from the
Agency, provided that such agreements contain written provisions as are reasonably designed to
protect the Agency’s investment in the Project and which are consistent with the standard
requirements imposed by Fannie Mae or Freddie Mac, as applicable, on subordinate cash flow
obligations under their then existing financing programs.
(d) Developer acknowledges that the Agency Loan and all Set Aside Funds
expenditures are subject to all terms and conditions of the Agency, this Agreement, and any
other local, state or federal agency with jurisdiction over the source of these funds and that the
Project will be developed, constructed, and operated in accordance with the City of Culver City’s
standards and regulations and this Agreement. It is expressly understood and agreed by the
parties that this section does not limit the amount of costs that may be charged or imposed by the
City for the Project or the Project approvals.
Section 205 Developer’s Conditions Precedent to Construction Financing Event
(a) The Developer’s obligation to accept the Agency Loan and the Agency Grant
shall be conditioned and contingent upon satisfaction or Developer’s waiver of each of the
following conditions precedent (collectively, the “Developer’s Conditions to Closing”):
(i) Developer shall have obtained evidence of financing commitments in an
amount sufficient to develop the Project on reasonable terms and
conditions contemplated by the Developer, after using commercially
reasonable efforts to obtain such commitments.
(ii) Developer shall have obtained Developer Equity in the amount set forth in
the Method of Financing and the Project Budget, after using commercially
reasonable efforts to obtain such Developer Equity.
(iii) Developer shall have obtained from the City all required approvals and
permits, including site plan review, conditional use, subdivision, building,
grading, landscaping, and others for the development of the Property as
the Project, after using commercially reasonable efforts to obtain such
approvals and permits.
(iv) No litigation shall be threatened or pending which seeks to prevent the
construction or operation of the Project, or any part thereof, according to
the terms set forth in this Agreement.
(v) The Agency Loan and the Agency Grant are not deposited in the escrow
established for the disbursement of those funds and such failure of the
Agency is not the result of Developer’s failure to satisfy the Agency’s
Conditions to Closing set forth in the Method of Financing.
(vi) The Agency shall not be in material default in any of its obligations set
forth in this Agreement and all representations and warranties of Agency
contained herein shall be true and correct in all material respects.
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(b) In the event any of the Developer’s Conditions to Closing are not satisfied (or
waived by the Developer) by the date set forth in the Schedule of Performance for the occurrence
of the Construction Financing Event, and the Developer is not in default under the Housing
Agreement, the Developer may cancel the Escrow and terminate the Housing Agreement by
delivering ten (10) days prior written notice to the Agency and the Escrow agent. Agency may
nullify the notice to terminate if such notice is given as a result of Agency’s failure to deposit the
Agency Loan and the Agency Grant into Escrow, within such ten (10) day period Agency (at no
cost to the Developer) cures such unsatisfied Developer’s Condition to Closing and notifies the
Escrow agent of such cure. In the event of termination pursuant to this paragraph, (i) the Escrow
shall be cancelled and any funds deposited by the parties shall be returned to them with any
interest earned on such funds; (ii) Developer shall be responsible for any escrow cancellation
fees imposed by the Escrow agent unless the termination is a result of Agency’s uncured failure
to deposit the Agency Loan and the Agency Grant into Escrow, in which case the Agency shall
be responsible for the escrow cancellation fees; and (iii) the Housing Agreement shall be
terminated and the parties shall have no further rights or obligations thereunder.
ARTICLE III DEVELOPMENT OF THE PROJECT
Section 301 Scope of Development
The Property shall be developed in accordance with and within the limitations established
in the Scope of Development and plans approved by the Agency pursuant to this Housing
Agreement and permits issued by the City of Culver City. It is anticipated that Developer will
contract for performance of specific activities, including but not limited to activities such as site
inspections and management of the Units. Such contracts shall not in any way diminish or waive
Developer’s obligations under this Housing Agreement. During the construction process, the
Developer may, without the consent of the Agency, make any modification or change to the
Scope of Development and the Project Budget and the sources and uses of funds from time to
time required by Senior Lenders or Investors and approved by the Project architect and any
governmental authority whose approval is required, so long as the modification or change does
not (i) change the number, layout or size of the Restricted Units, (ii) change the appliances,
fixtures or finishes of the Restricted Units, (iii) increase the Agency’s financial obligations, (iv)
increase the amount of the Construction Loan, or (iv) constitute a breach of the Developer’s
express obligations, warranties or covenants hereunder; provided that the Developer shall deliver
a copy of any revised Scope of Development and/or Project Budget to the Agency.
Section 302 Construction Drawings and Related Documents
(a) Developer shall prepare and submit construction drawings and related documents,
including bid sets, for the development of the Project to the Agency for review (including, but
not limited to, architectural review) and written approval at the times established in the Schedule
of Performance. The construction drawings and related documents shall be submitted in two
stages, preliminary and final drawings, plans and specifications. Final drawings, plans, and
specifications are hereby defined as those in sufficient detail to obtain a building permit. Any
items so submitted and approved in writing by the Agency shall not be subject to subsequent
disapproval. Agency approval shall not be unreasonably withheld.
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(b) Progressively detailed plans shall be approved by the Agency if building elevations,
exterior spaces and areas open to public view do not vary and the plans otherwise do not
materially vary from previously approved plans, and if they are a logical evolution of previously
approved plans and conform to the provisions of the Scope of Development. In the event of the
disapproval by the Agency of any plans submitted by Developer, the Agency shall promptly
communicate in writing to Developer all reasons for such disapproval and all requirements for
subsequent approval of revised plans.
(c) During the preparation of all drawings and plans, the Agency staff and Developer
shall hold regular progress meetings to coordinate the preparation of, submission to, and review
of construction plans and related documents by the Agency. The Agency staff and Developer
shall communicate and consult informally as frequently as is necessary to insure that the formal
submittal of any documents to the Agency can receive timely consideration.
(d) If any revisions or corrections of plans approved by the Agency shall be required by
a governmental official, agency, department or bureau having jurisdiction over the development
of the Property, Developer and the Agency shall cooperate in efforts to obtain waiver of such
requirements or to develop a mutually acceptable alternative. Neither the Agency nor Developer
shall unreasonably withhold approval of a mutually acceptable alternative.
Section 303 Agency Approval of Plans, Drawings and Related Documents
(a) As provided in Section 302, the Agency shall have the right of reasonable review
(including, but not limited to, architectural review) of all plans, drawings and related documents
for the development of the Property, including any proposed changes therein. The Agency
Executive Director or designee shall approve or disapprove such plans, drawings, and related
documents referred to in this Housing Agreement (and any proposed changes therein), in writing,
within the times established in the Schedule of Performance. Any disapproval shall state, in
writing, the reasons for disapproval. Developer, upon receipt of a disapproval shall revise such
portions of the plans, drawings or related documents in a manner that satisfactorily addresses the
reasons for disapproval and resubmit such revised portions to the Agency as soon as possible
after receipt of the notice of disapproval. The Agency shall approve or disapprove such revised
portions in the same manner and within the same times as provided in this Section 303 for
approval or disapproval of plans, drawings, and related documents initially submitted to the
Agency. No matter once approved shall be subsequently disapproved.
Section 304 Cost of Development
(a) Except as otherwise expressly set forth in this Housing Agreement and except
for the Agency Loan and the Agency Grant, the cost of developing the Property shall be the
responsibility of the Developer, as provided in the Method of Financing. The Project Costs are
set forth in the Project Budget, which shall be subject to change from time-to-time as provided in
the Method of Financing.
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(b) The Developer has proposed, and the Agency has approved, the Project
Budget appended to this Housing Agreement. Developer acknowledges that the Agency is
relying on Developer’s experience and expertise in establishing the costs for the Project and
Developer represents that the Project Budget is based on the best, good faith estimate of the
Developer of the costs that are likely to be incurred for the Project.
Section 305 Schedule of Performance
(a) Developer and the Agency shall perform all acts respectively required of such party
in this Housing Agreement within the times provided in the Schedule of Performance.
(b) After the Construction Financing Event, Developer shall promptly begin and
thereafter diligently prosecute to completion the development of the Property as provided in the
Scope of Development. Developer shall begin and complete all development within the times
specified in the Schedule of Performance, with such reasonable extensions of said times as may
be granted by the Agency. The Schedule of Performance is subject to revision from time to time
as mutually agreed upon in writing by Developer and the Agency Executive Director.
(c) During periods of construction, Developer shall submit to the Agency a written report
of the progress of construction when and as requested by the Agency, but not more frequently
than monthly. The report shall be in such form and detail as may be reasonably required by the
Agency and shall include a reasonable number of construction photographs (if requested) taken
since the last report by Developer.
Section 306 Local, State, and Federal Laws
(a) Developer hereby agrees to carry out development, construction (as defined by
applicable law) and operation of the Project on the Property, including, without limitation, any
and all public works (as defined by applicable law), in conformity with all applicable local, state
and federal laws, rules and regulations and all applicable federal and state labor laws (including,
without limitation, any requirement to pay state prevailing wages). As all of the Agency
Assistance to Developer is from Set-Aside Funds and is being used exclusively for the low
income housing portion of the Project, the parties do not anticipate that the Project would be
considered to be a “public work” “paid for in whole or in part out of public funds,” as described
in California Labor Code Section 1720. Nevertheless, Developer hereby expressly
acknowledges and agrees that neither City of Culver City nor the Agency has ever previously
affirmatively represented to the Developer or its contractor(s) for the Project in writing or
otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is not
a “public work,” as defined in Section 1720 of the Labor Code. Developer hereby agrees that
Developer shall have the obligation to provide any and all disclosures, representations,
statements, rebidding, and/or identifications which may be required by Labor Code Sections
1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other
provision of law. Developer hereby agrees that Developer shall have the obligation to provide
and maintain any and all bonds to secure the payment of contractors (including the payment of
wages to workers performing any public work) which may be required by the Civil Code, Labor
Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any
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other provision of law. The Developer hereby agrees that the Developer shall have the
obligation, at the Developer’s sole cost, risk and expense, to obligate any party as may be
required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or
amended from time to time, or any other provision of law. Developer shall indemnify, protect,
defend and hold harmless the Agency, City and their respective officers, employees, contractors
and agents, with counsel reasonably acceptable to the Agency and City, from and against any
and all loss, liability, damage, claim, cost, expense, and/or “increased costs” (including labor
costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert
witnesses) which, in connection with the development, construction (as defined by applicable
law) and/or operation of the Project, including, without limitation, any and all public works (as
defined by applicable law), results or arises in any way from any of the following: (1) the
noncompliance by Developer of any applicable local, state and/or federal law, including, without
limitation, any applicable federal and/or state labor laws (including, without limitation, if
applicable, the requirement to pay state prevailing wages); (2) the implementation of Sections
1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to
time, or any other similar law; (3) failure by Developer to provide any required disclosure,
representation, statement, rebidding and/or identification which may be required by Labor Code
Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or
any other provision of law; (4) failure by Developer to provide and maintain any and all bonds to
secure the payment of contractors (including the payment of wages to workers performing any
public work) which may be required by the Civil Code, Labor Code Section 1781, as the same
may be enacted, adopted or amended from time to time, or any other provision of law; and/or (5)
failure by the Developer to obligate any party as may be required by Labor Code Sections 1726
and 1781, as the same may be enacted, adopted or amended from time to time, or any other
provision of law. It is agreed by the parties that, in connection with the development,
construction (as defined by applicable law) and operation of the Project, including, without
limitation, any public work (as defined by applicable law), Developer shall bear all risks of
payment or non-payment of state prevailing wages and/or the implementation Labor Code
Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time,
and/or any other provision of law. At the request of the Developer, the Agency shall reasonably
cooperate with and assist the Developer in its defense of any such claim, action, suit, proceeding,
loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense; provided that
the Agency shall not be obligated to incur any expense in connection with such cooperation or
assistance. “Increased costs” as used in this Section shall have the meaning ascribed to it in
Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time.
The foregoing indemnity shall survive termination of this Housing Agreement and shall continue
after recordation of the Release of Construction Covenants.
(b) Developer shall be responsible for obtaining all Permits and land use approvals
required by the City for the development of the Property, ensuring that the use of the Property for
the purposes described in this Housing Agreement complies with the zoning and other City land
use regulations (including any applicable exemptions and/or exceptions) applicable to the
Property at the time of Construction Financing Event.
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(c) Prior to or concurrently with the Construction Financing Event, Developer shall
satisfy all conditions to the issuance of any Permit required for the development of the Property.
The Agency shall provide reasonable assistance to Developer in obtaining these permits.
(d) This Housing Agreement is not a “Development Agreement” as provided in
Section 65864 et seq. of the California Government Code. Developer shall comply with all
applicable conditions of approval required by the City of Culver City.
Section 307 Nondiscrimination During Construction
Developer, for itself and its successors and assigns, agrees that during the construction of
the Improvements provided for in the Housing Agreement, Developer will not discriminate
against any employee or applicant for employment because of race, color, religion, sex, or
national origin.
Section 308 Insurance
Developer shall procure and maintain, during the term of this Housing Agreement, at its
sole cost and expense, until the date that the Agency waives any such insurance requirement or
requirements in writing, the following policies of insurance on a Project specific basis:
(a) Workers’ Compensation Insurance. Pursuant to California Labor Code Section
1861, Developer acknowledges awareness of Section 3700 et seq. of said code, which requires
every employer to be insured against liability for workers’ compensation. Developer covenants
that it will comply with such laws and provisions prior to commencing any work of construction
on the Property. To the extent Developer directly employs personnel at the Project, Developer
shall maintain such Workers’ Compensation Insurance in an amount not less than the statutory
requirements in California for bodily injury and disease and must maintain employer’s liability
coverage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00). Developer
shall require all contractors to provide such Workers’ Compensation Insurance for all of the
contractors’ and subcontractors’ employees. Developer shall furnish the Agency with a
certificate of waiver of subrogation under the terms of the Workers’ Compensation Insurance
and Developer shall similarly require all contractors and subcontractors to waive subrogation.
(b) General Liability and Auto Insurance. Developer shall carry general commercial
liability insurance, including coverage for bodily injury, property damage, products/completed
operations and blanket contractual liability in an amount not less than TWO MILLION
DOLLARS ($2,000,000.00) per occurrence and FOUR MILLION DOLLARS ($4,000,000.00)
annual aggregate, combined single limit for bodily injury and property damage. All such
insurance shall be provided by insurance companies admitted in California, or if not admitted in
California, then reasonably acceptable to the Agency. Such insurance shall name the Agency
and its officers, agents, and employees acting in their official capacity, as additional insureds.
Developer shall carry automobile insurance, including liability coverage for bodily injury and
property damage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per
occurrence. Developer shall require its insurer to waive its subrogation rights against the Agency
and shall provide certificates of insurance evidencing same.
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(c) Property Insurance. Developer shall obtain and maintain in force, all-perils (to
include fire and vandalism protection) property insurance with extended coverage endorsements
thereon, on the Property, in an amount equal to the full replacement costs and/or value thereof;
this policy shall contain a replacement cost endorsement naming the Agency as insured and shall
not contain a coinsurance penalty provision. The policy shall contain a lender’s loss payable
endorsement that such proceeds shall be used to repair or rebuild any Units or other
improvements situated on the Property so damaged or destroyed; and, if not so used, such
proceeds shall be paid to the Agency. The proceeds of any such insurance payable to the Agency
shall be used for rebuilding or repair as necessary to restore the site at the sole discretion of the
Agency. The policy shall name the Agency and its officers, agents and employees acting in their
official capacity as additional insureds.
(d) Certificate of Insurance; Additional Insured Endorsements. Prior to the
Construction Financing Event, Developer shall furnish to the Agency certificates of insurance
and additional insured endorsements evidencing the foregoing insurance coverages as required
by this Housing Agreement. Such certificates and endorsements shall be subject to the
reasonable approval of the Agency’ legal counsel and shall provide the name and policy number
of each carrier and policy and shall state that the policy is currently in force and shall promise to
provide that such policies will not be cancelled without thirty (30) days prior written notice to the
Agency.
(e) If Developer fails or refuses to procure or maintain insurance as required by this
Housing Agreement, the Agency shall have the right, at the Agency’s election, and upon ten (10)
days prior notice to Developer, to procure and maintain such insurance. The premiums paid by
the Agency shall be treated as a loan, due from Developer, to be paid on the first day of the
month following the date on which the premiums were paid. The Agency shall give prompt
notice of the payment of such premiums, stating the amounts paid and the name of the insured(s).
Section 309 Indemnification
(a) Developer and its successors-in-interest shall indemnify, defend and hold
harmless the City and the Agency, their elected and appointed officials, officers, employees,
agents, contractors and consultants (individually and collectively, the “Indemnitees”) from and
against any and all claims, lawsuits, judgments, liability, injury or damage, including without
limitation associated and reasonably incurred attorneys’ fees and court and litigation costs arising
out of the defense of any such claims and/or lawsuits, and actual attorneys’ fees and court and
litigation costs that may be awarded by the court and required to be paid by the Indemnitees
arising from or as a result of (i) Developer’s failure to perform any obligations as and when
required by this Agreement or any document referred to herein, and (ii) the death of any person
or any accident, injury, loss, or damage whatsoever caused to any person or to the property of
any person which shall occur on the Property and which shall be directly or indirectly caused by
the acts of, or any errors or omissions of, the Developer or its officers, shareholders, directors,
members, agents, servants, employees, contractors, or invitees. Developer shall not be
responsible for any liability, loss, damage, cost, or expense (including reasonable attorney’s fees
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and court costs) arising from or as a result of the sole negligence or sole willful misconduct of
the Indemnitees. No deficiency judgment may be obtained against the Developer except for
actual or constructive fraud, material intentional misrepresentation, intentional bad faith waste of
or on the Project and such other matters as are referred to below. Consequently, no deficiency
amount may be recovered from Developer under the provisions hereof, except as may be
provided herein. Notwithstanding the generality of the foregoing, however, Developer shall,
except as to the sole negligence or willful misconduct of Indemnitees, indemnify, defend, protect
and hold Indemnitees harmless from and against any and all loss, damage, liability, action, cause
of action, cost or expense, including, without limitation, reasonable attorneys fees and expenses
incurred by the Indemnitees, arising as a result of any (i) fraud or material intentional
misrepresentation by the Developer under or in connection with this Agreement, the Agreement
Containing Covenants or the Agency Loan Documents; (ii) intentional bad faith waste of the real
property encumbered by the Agency Deed of Trust; and (iii) losses resulting from the
Developer’s failure to maintain insurance as required under the provisions of the Agency Deed
of Trust.
(b) The City and/or Agency shall have the sole discretion to select legal counsel to
represent the City’s and/or Agency’s legal interests in the defense of any such lawsuits, claims or
other actions filed against the City and/or Agency. City and Agency shall hire joint outside legal
counsel, except to the extent separate counsel is necessary, such as where there may be a
potential conflict of interest between them.
Section 310 Disclaimer of Responsibility by the Agency
Except as otherwise expressly provided in this Housing Agreement, the Agency neither
undertakes nor assumes nor will have any responsibility, right or duty to Developer or to any
third party to review, inspect, supervise, pass judgment upon or inform Developer or any third
party of any matter in connection with the Property, whether with respect to the quality,
adequacy or suitability of the plans, any labor, service, equipment or material furnished to the
Project, any person furnishing the same or otherwise. Developer and all third parties shall rely
upon its or their own judgment regarding such matters, and any review, inspection, supervision,
exercise of judgment or information supplied to Developer or to any third party by the Agency in
connection with such matter is for the public purpose of providing affordable housing, and
neither Developer (except for the purposes set forth in this Housing Agreement) nor any third
party is entitled to rely thereon.
Section 311 Rights of Access
The Agency shall have the right, at its sole risk and expense, to enter the Property or any
part thereof at reasonable times and with as little interference as possible, for the purpose of
inspecting the Property to determine Developer’s compliance with this Housing Agreement. All
residential leases shall provide for such right of the Agency. The representatives of the Agency
entering the Property shall be identified in writing in advance by the Agency Executive Director
(or his or her designee). Any such entry shall be made only after reasonable notice to Developer,
and the Agency shall indemnify and hold Developer harmless from any claims or liabilities
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pertaining to such entry. Any damage or injury to the Property resulting from such entry shall be
promptly repaired at the sole expense of the Agency.
Section 312 Taxes, Assessments, Encumbrances and Liens
Subject to Developer’s right to claim any exemption to which it may be entitled under
State law, Developer shall be responsible for paying when due all real estate taxes and
assessments, if any, assessed and levied on or against the Property or any portion thereof or
interest therein. Developer shall not place, or allow to be placed, on the Property or any portion
thereof or interest therein, any mortgage, trust deed, encumbrance (excluding easements not
unreasonably interfering with the use of the Property) or lien (excluding mechanic’s liens paid
prior to foreclosure or liens for current year property taxes not paid) except the Permitted
Transfers. Developer shall remove, or shall have removed, any levy or attachment made on the
Property (or any portion thereof or interest therein), or shall assure the satisfaction thereof within
a reasonable time but in any event prior to foreclosure. Nothing herein contained shall be
deemed to prohibit Developer from contesting the validity or amount of any tax, assessment,
encumbrance or lien, nor to limit the remedies available to Developer in respect thereto. The
covenants of Developer set forth in this Section 312 relating to the placement of any
unauthorized mortgage, trust deed, encumbrance or lien, shall remain in effect until issuance of
the Release of Construction Covenants.
Section 313 Security Financing; Right of Holders
(a) Permitted Encumbrances. Developer shall be permitted to enter into
mortgages, deeds of trust or other form of conveyance in which the Property is used as security
for the purpose of securing the Senior Loans and any other loans of funds to be used for the
implementation of the Project provided such conveyance (i) is for the purposes permitted herein
and (ii) is given to a financial or lending institution or other acceptable person or entity capable
of performing or causing to be performed Developer’s obligations under this Agreement,
including without limitation a pension fund, insurance company, or real estate investment trust.
Any and all such loan amounts and security conveyances shall be subject to the prior approval of
the Agency’s Executive Director, which approval shall not be unreasonably withheld.
(b) Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders;
Right to Cure. Whenever the Agency shall deliver any notice or demand to Developer with
respect to any breach by Developer in performance of this Housing Agreement, it will endeavor
at the same time to deliver a copy of such notice or demand to each approved holder of record of
any mortgage, deed of trust, or other security interest which has previously requested such notice
in writing. Each such holder shall (insofar as the rights of the Agency are concerned) have the
right, at its option within ninety (90) days after the receipt of the notice, to commence and
thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the
security interest debt and the lien on its security interest. Any holder completing the
development of the Property in accordance with this Housing Agreement shall be entitled to a
Release of Construction Covenants upon written request made to the Agency.
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Section 314 Rights to Plans
(a) Subject to the rights of, and senior assignments to, the beneficiaries of the Senior
Deed of Trust (the “Senior Beneficiaries”), all work product prepared pursuant to this Housing
Agreement, including (but not limited to), all Plans, construction documents, soils tests and
similar reports, Permits and other entitlements are hereby assigned to the Agency as security for
Developer’s obligations hereunder. In the event that this Housing Agreement is terminated by
the Agency due to a default by Developer which is not timely cured, Developer shall, within ten
(10) days of such termination, transmit all such work product to the Agency.
(b) To effectuate the assignment described in paragraph (a), concurrently with
executing this Housing Agreement, Developer shall execute and deliver to the Agency an
Assignment of Agreements (the “Assignment”), substantially in the form attached to this
Housing Agreement as Exhibit No. 11”, granting to the Agency all of Developer’s rights to: (1)
the Plans prepared pursuant to this Housing Agreement; (2) the contracts between Developer and
its architect and between Developer and its general contractor; (3) all Permits relating to the
Project; and all similar rights and property interests.
Section 315 Hazardous Materials
(a) Indemnification. Developer, from and after the Construction Financing Event
shall indemnify, defend, and hold harmless the Agency and its officers, employees, agents and
representatives (collectively, the “Indemnified Parties”) from and against any and all liabilities
(including penalties, fines and monetary sanctions) arising from a violation of state or federal
law pertaining to (i) the storage of Hazardous Materials on the Property or (ii) contamination of
the Property by a release of Hazardous Materials. Developer, prior to the Construction
Financing Event, shall provide to the Agency a copy of any notices, orders, or reports concerning
the presence of any Hazardous Materials on or affecting the Property that is in Developer’s
possession. As a condition precedent to the Construction Financing Event, Developer shall
execute and deliver to the Agency an Environmental Indemnity, substantially in the form of
Exhibit No. “12” to this Housing Agreement.
Section 316 Release of Construction Covenants
(a) Promptly after Completion of the development of the Property, as generally and
specifically required by this Housing Agreement and in particular the Scope of Development, the
Agency shall furnish Developer with a Release of Construction Covenants in the form of Exhibit
No.15” to this Housing Agreement, upon written request therefor by Developer. The Agency
shall not unreasonably withhold such Release of Construction Covenants and such Release of
Construction Covenants shall be issued so long as Developer has developed the Property in
accordance with this Housing Agreement and the Plans approved by the Agency pursuant hereto.
Such Release of Construction Covenants shall be, and shall so state, conclusive determination of
satisfactory completion of all of the construction required by this Housing Agreement.
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(b) The Release of Construction Covenants shall be in such form as to permit it to be
recorded in the Recorder’s Office of Los Angeles County. A Release of Construction Covenants
for development of less than the entire Property shall not be recorded.
(c) If the Agency refuses or fails to furnish a Release of Construction Covenants for the
Property after written request from Developer, the Agency shall, within thirty (30) days of the
written request, provide Developer with a written statement of the reasons the Agency refused or
failed to furnish a Release of Construction Covenants. The statement shall also contain the
Agency’s opinion of the action Developer must take to obtain a Release of Construction
Covenants. If the reason for such refusal is confined to the immediate availability of specific
items or materials for landscaping, and/or minor items, the Agency will issue its Release of
Construction Covenants upon the posting of a bond by Developer with the Agency in an amount
representing the fair value of the work not yet completed.
(d) Such Release of Construction Covenants shall not constitute evidence of compliance
with, or satisfaction of any obligation of Developer to the beneficiary of, the Senior Deed of
Trust. Such Release of Construction Covenants is not a notice of completion as referred to in
Section 3093 of the California Civil Code.
ARTICLE IV USE OF THE SITE
Section 401 Uses
(a) Developer covenants and agrees (for itself, its successors, its assigns, and every
successor in interest to the Property or any part thereof or any interest therein) that during the
Restricted Period Developer, its successors and assigns shall use the Property (except for the one
commercial Unit) exclusively to provide rental housing, including affordable housing for Low
Income and Moderate Income Households as set forth in this Housing Agreement. Developer
further covenants and agrees, for itself, its successors, its assigns, and every successor in interest
to the Property, or any part thereof, that for the period beginning on the Construction Financing
Event and ending on the expiration date of the Agreement Containing Covenants, Developer and
such successors shall not use the Property in a manner that is inconsistent with the applicable
zoning restrictions, this Agreement, and the Agreement Containing Covenants; provided that, in
the event of any inconsistency between this Agreement and the Agreement Containing
Covenants, the provisions of the Agreement Containing Covenants shall prevail.
(b) No part of the Project will at any time during the Restricted be owned by a
cooperative housing corporation nor shall Developer take any steps in connection with a
conversion to such ownership or uses. Other than obtaining (but not recording) a final
subdivision map on the Project or obtaining a Final Subdivision Public Report from the
California Department of Real Estate, Developer shall not take any steps in connection with
converting the Project to a condominium ownership during the Restricted Period.
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Section 402 Management Plan; Annual Project Budget; Bi-Annual Reports
(a) Prior to the Construction Financing Event, Developer shall submit to the Agency
Executive Director a Management Plan reasonably acceptable to the Agency Executive Director,
describing the proposed plans for managing and operating the Property. Approval of the
Management Plan by the Agency Executive Director or designee shall be a condition precedent
to the Construction Financing Event. Developer shall manage and operate the Property in
accordance with the approved Management Plan, including such amendments as may be
approved in writing from time to time by the Developer and the Agency Executive Director or
designee, for the entire Restricted Period.
(b) In addition, the Developer shall submit on or before the first day of each fiscal year
of the Restricted Period an estimated annual budget for management of the Property (the
“Annual Project Budget”) in accordance with the Management Plan. The Annual Project Budget
shall include all necessary operating expenses, current maintenance charges, expenses of
reasonable upkeep and repairs, taxes and special assessment levies, prorated amount required for
insurance and all other expenses incident to the operation of the Project; and shall show the
expected revenues to pay such expenses, including annual debt service requirements and reserve
fund deposits and balances. The Annual Project Budget, including any amendments proposed by
the Developer, shall be subject to the approval of the Agency Executive Director which shall not
be unreasonably withheld.
(c) Beginning on the date of first occupancy, and for each fiscal year thereafter of the
Restricted Period, Developer shall also submit on a bi-annual basis a report for the management
of the Property (the “Bi-Annual Report”). The Bi-Annual Report shall include a profit and loss
statement, budget to date figures, and occupancy report and shall clearly show project revenues,
operating expenses, deposits to and withdrawals from the Project’s Capital Reserve Account, and
cash flow available for residual receipts payments. The Bi-Annual Report shall be in a form that
is reasonably acceptable to the Agency Executive Director. The Agency Executive Director, in
his/her sole discretion may waive the requirement of the Bi-Annual Report for one or more
quarterly reporting periods. However, such waiver shall not operate to waive any subsequent
requirement of the Bi-Annual Report during the Restricted Period. After receipt of such certified
financial statements for the Project, the Agency may request additional financial analyses or
obtain a third party review at the Agency’s own expense, of financial statements for the Project
to verify the accuracy of the payments by Developer on the Agency Note or the required deposits
into the Capital Reserve Account. If the Agency’s review of Developer’s Bi-Annual Report
reveals material errors in the calculation of the payments by Developer on the Agency Note or
reveals that the required deposits into the Capital Reserve Account have not been made, then
Developer shall be required to submit such reports on a quarterly basis for a reasonable time
thereafter, as determined by the Agency Executive Director.
Section 403 Maintenance of the Property
(a) Prior to the Construction Financing Event, the Developer shall prepare and submit
to the Agency Executive Director or his designee for review and approval a program (the
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“Maintenance Program”) for the exterior and interior maintenance of the Property and the
Improvements. The Agency and the City shall have the right at all reasonable times to enter and
inspect the Property in order to ensure compliance with the foregoing requirements.
(b) The Maintenance Program shall describe in reasonable detail the standards to be
followed in maintaining the interior and exterior of the Improvements, including a schedule
indicating the proposed frequency of each element of maintenance, and shall include, at a
minimum, the following: periodic cleaning of the interior and exterior of the Improvements,
including windows; removing graffiti; removing debris and waste materials and otherwise
maintaining indoor and outdoor areas of the Property; maintaining any lawns, plants, shrubs and
trees or other landscaping planted on the Property; performing inspections of all exterior features
to determine whether repairs are required; conducting periodic protective treatments such as rust
removal and caulking; conducting repairs to facades, roof, doors, windows and other exterior
features; maintaining fencing and other security devices and systems; periodic repainting of the
exterior; periodic repainting of the interior units and common areas; periodic replacing of the
interior unit carpets; checking building systems, including, but not limited to the heating and
cooling systems, smoke alarms and water heaters; checking interior unit appliances; and
monitoring interior unit bathrooms for mold/mildew. The Maintenance Program, including any
amendments proposed by the Developer, shall be subject to the approval of the Agency
Executive Director.
(c) At all times during the Restricted Period, the Developer shall maintain the
Property and the Improvements in accordance with the approved Maintenance Program and in
compliance with applicable state and local laws and codes. To implement this requirement,
Developer agrees to budget sufficient funds to pay for all reasonably anticipated costs (as
indicated in the Annual Maintenance Budget). In the event Developer fails to maintain the
Property as required by this Section, Developer shall, within thirty (30) days after the Agency’s
notification or Developer’s own discovery of any deficiency, take all necessary steps to correct
such deficiency, provided that, if such deficiency is not reasonably capable of being cured within
thirty (30) days, Developer shall commence to cure said deficiency within thirty (30) days and
diligently and in good faith continue to take all necessary steps to correct such deficiency. In the
event the Developer fails to cure said deficiency within the time allowed, the Agency shall have
the right, but not the obligation, to enter the Property, correct any violation, and hold the
Developer responsible for the cost thereof, and such cost, until paid, shall constitute a lien on the
Property.
Section 404 Lead-Based Paint.
Developer shall ensure that it and its contractors and subcontractors shall not use lead-
based paint in the development or maintenance of the Project. Developer shall insert this
provision in all contracts and subcontracts for work performed on the Project which involves the
application of paint.
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Section 405 Barriers to the Disabled
Developer shall ensure that the Project will be developed and operated to comply with all
federal, state, and local requirements for access for disabled persons that apply to newly
constructed multi-family rental units.
Section 406 Creation of Capital Reserve Account
Concurrently with the Permanent Financing Event, Developer shall create a “Capital
Reserve Account” in the initial amount shown on the Project Budget. No later than thirty (30)
days after the Capital Reserve Account has been created, Developer shall provide to the Agency
a pro forma statement concerning the account, for review and approval. At any time thereafter
during the term of this Agreement, the Agency, on ten (10) days prior written notice to
Developer, may request that Developer submit to it an updated, revised Capital Reserve Account
statement. The Agency, at its own expense, may audit any updated, revised Capital Reserve
Account statement submitted to it by Developer.
Section 407 Capital Reserves.
Beginning at the Permanent Financing Event and every succeeding year during the
Restricted Period, Developer shall deposit the amount set forth in the definition of Operating
Expenses in the Agency Note into the Capital Reserve Account for repairs to the Property. The
Capital Reserve Account shall only be used to fund the cost of repairs and improvements to the
Property and to maintain the Property in compliance with the requirements of Section 403.
Developer shall exhaust funds in the Capital Reserve Account prior to utilizing operating
revenues to pay for repairs and improvements to the Property. Interest earned on the Capital
Reserve Account shall remain in said account and be used as Capital Reserves.
Section 408 Obligation to Refrain from Discrimination
There shall be no discrimination against or segregation of any person, or group of
persons, on account of race, color, creed, age, class, income, religion, sex, sexual orientation,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the Property, or any part thereof, or in the awarding of contracts for the
Project, nor shall Developer, 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, sublessees or vendees of the
Property, or any part thereof, or in the awarding of contracts for the Project. Developer shall
comply with all applicable federal, state and local nondiscrimination, fair housing, and equal
opportunity requirements.
Section 409 Form of Nondiscrimination and Nonsegregation Clauses
The Developer shall refrain from restricting the rental, sale or lease of the Property or the
Units on the basis of race, color, creed, age, class, income, religion, sex, sexual orientation,
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marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall
contain or be subject to substantially the following nondiscrimination or nonsegregation clause:
(a) In Deeds: “The grantee herein covenants by and for himself or herself, his or
her heirs, executors, administrators, and assigns, and all persons claiming under or through them,
that there shall be no discrimination against or segregation of, any person or group of persons on
account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as
those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale,
lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed,
nor shall the grantee or any person claiming under or through him or her, establish or permit any
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises
herein conveyed. The foregoing covenants shall run with the land.”
(b) In Leases: “The lessee herein covenants by and for himself or herself, his or
her heirs, executors, administrators, and assigns, and all persons claiming under or through him
or her, and this lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of
persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the lessee himself or herself, or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased.”
(c) In Contracts: “There shall be no discrimination against or segregation of any
person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment
of the land, nor shall the transferee itself or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants,
or vendees of the land.”
Section 410 Effect and Duration of Covenants
The covenants established in this Housing Agreement shall, without regard to technical
classification and designation, be binding on Developer and any successor in interest to the
Property or any part thereof or interest therein for the benefit and in favor of the Agency, its
successors and assigns. Every covenant and condition and restriction contained in the
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Agreement Containing Covenants shall remain in effect commencing upon the recordation of the
Agreement Containing Covenants and throughout the Restricted Period (regardless of whether
the Agency Loan has been repaid prior to the end of the Restricted Period), except that the
covenants against discrimination set forth in the Agreement Containing Covenants and in Section
408 and Section 409 hereof shall remain in effect in perpetuity.
Section 411 Effect of Violation of Covenants
The Agency is the intended beneficiary of the terms and provisions of this Housing
Agreement and the covenants herein, both for and in its own right and for the purposes of
protecting the interests of the community and other parties, public or private, for whose benefit
this Housing Agreement and the covenants running with the land have been provided. The
Agency shall have the right if the covenants contained in this Housing Agreement are breached,
to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or
other proper proceedings to enforce the curing of such breaches to which it or any other
beneficiaries of this Housing Agreement and covenants are entitled.
Section 412 Monitoring
(a) The parties acknowledge that this Housing Agreement is subject to the provisions
of Section 33418(a) of the California Health and Safety Code, which provides in pertinent part:
“An Agency shall monitor, on an ongoing basis, any housing affordable to persons and
families of low or moderate income developed or otherwise made available pursuant to any
provisions of this part. As part of this monitoring, an agency shall require owners or managers
of the housing to submit an annual report to the agency. The annual reports shall include for
each rental unit the rental rate and the income and family size of the occupants. The income
information required by this section shall be supplied by the tenant in a certified statement of a
form provided by the agency.”
Developer shall submit to the Agency on an annual basis the annual report required by
said Section 33418. The annual report shall include for each Low Income Unit and each
Moderate Income Unit the rental rate and the income and family size of the occupants. The
income information shall be supplied by the tenant in a certified statement on a form provided by
the Agency. Developer shall provide for the submission of such information in its lease or
occupancy agreement with tenants.
(b) Health and Safety Code Section 33418(b) requires the Agency to adequately fund its
compliance monitoring activities and authorizes the Agency to impose fees upon the owners of
properties monitored pursuant to Section 33418 to defray the cost of complying with the
Agency’s monitoring and reporting obligations. Therefore, Developer agrees that, commencing
upon the Completion of the Project, Developer will pay to the Agency an annual monitoring fee
in the amount set forth in the definition of “Annual Operating Expenses” in the Agency Note.
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ARTICLE V DEFAULTS, REMEDIES AND TERMINATION
Section 501 Defaults; Notice of Cure; Cure Rights
(a) Subject to Force Majeure Delay, as such term is defined in this Housing
Agreement, failure or delay by either party to perform any term or provision of this Housing
Agreement constitutes a default under this Housing Agreement. The party who fails or delays
must immediately commence to cure, correct or remedy such failure or delay and shall complete
such cure, correction or remedy with reasonable diligence.
(b) The injured party shall give written notice of default to the party in default,
specifying the default complained of by the injured party. Failure or delay in giving such notice
shall not constitute a waiver of any default, nor shall it change the time of default. Except as
otherwise expressly provided in this Housing Agreement, any failures 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.
(c) If a monetary event of default occurs, prior to exercising any remedies hereunder,
the injured party shall give the party in default written notice of such default. The party in
default shall have a period of ten (10) days after such notice is given within which to cure the
default prior to exercise of remedies by the injured party.
(d) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, the injured party shall give the party in default notice of such default. If the default is
reasonably capable of being cured within thirty (30) days, the party in default shall have such
period to effect a cure prior to exercise of remedies by the injured party. If the default is such
that it is not reasonably capable of being cured within thirty (30) days, and the party in default (i)
initiates corrective action within said period, and (ii) diligently, continually, and in good faith
works to effect a cure as soon as possible, then the party in default shall have such additional
time as is reasonably necessary to cure the default prior to exercise of any remedies by the
injured party. In no event shall the injured party 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 ninety (90) days after the first notice of default is given.
Section 502 Institution of Legal Actions
Subject to the notice and cure provisions of Section 501and the limited recourse
provisions of Section 510, in addition to any other rights or remedies (and except as otherwise
provided in this Housing Agreement), 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 purpose of this Housing Agreement. Such legal actions must be instituted in the
Superior Court of the County of Los Angeles, State of California, in any other appropriate court
of that county, or in the United States District Court for the Central District of California.
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Section 503 Applicable Law
The internal laws of the State of California without regard to principles of conflicts of
laws, shall govern the interpretation and enforcement of this Housing Agreement.
Section 504 Acceptance of Service of Process
(a) 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 upon the
Developer (or upon an officer of the Developer) and shall be valid whether made within or
without the State of California, or in such manner as may be provided by law.
(b) 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 of the Agency or the Agency Secretary or in such other manner as may be provided by
law.
Section 505 Rights and Remedies Are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in this
Housing 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.
Section 506 Specific Performance
If either party defaults with regard to any of the provisions of this Housing Agreement,
subject to the notice and cure provisions of Section 501, the non-defaulting party, at its option,
may, after such notice and opportunity to cure (but not before) commence an action for specific
performance of the terms of this Housing Agreement pertaining to such default.
Section 507 Termination by Agency
Notwithstanding anything in this Housing Agreement to the contrary, the Agency shall
have the right to terminate this Housing Agreement, in its sole discretion after first providing
notice to Developer and following the expiration of any cure period, in the event that, subject to
Force Majeure Delay, the Construction Financing Event fails to occur within the time specified
in the Schedule of Performance.
Section 508 Termination by Developer
(a) Prior to the Construction Financing Event and provided that the Developer is not in
default under this Agreement and
(i) One or more of the Developer’s Conditions to Closing is not satisfied on or
before the time set forth in the Schedule of Performance, and any such Condition that is to be
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satisfied by the Agency is not satisfied after notice and an opportunity to cure as provided in
Section 501 hereof, and such failure is not caused by Developer; or
(ii) Agency’s Conditions to Closing have been either satisfied or waived by the
Agency and the Agency does not tender the Agency Loan or the Agency Grant in the manner
and condition and by the date provided in this Agreement, or
(iii) In the event of any default of any material provision of this Agreement by
Agency prior to the Construction Financing Event which is not cured within the time set forth in
Section 501 hereof, or
(iv) Developer fails to receive any necessary approvals or permits to the
development of the Project
and any such failure of the Agency is not cured within the applicable time period after written
demand by the Developer, then this Agreement may, at the option of the Developer, be
terminated by Notice thereof to Agency given in the manner provided in Section 602. In the
event Developer terminates this Agreement pursuant to this Section 508 and Developer is not in
Default, then ten (10) days from the date of the Notice of termination of this Agreement by
Developer to Agency, this Agreement shall be deemed terminated, Agency shall not be obligated
to make any payments of the Agency Loan or the Agency Grant, and there shall be no further
rights or obligations between the parties, except that if the Agency is in Default hereunder the
Developer, after delivery of notice and expiration of the cure period, may pursue any remedies it
has at law or equity.
(b) In all events, at any time prior to the Construction Financing Event, Developer shall
have the right to terminate this Agreement for any reason whether or not Developer is in default
of this Agreement, by Notice thereof to Agency in the manner provided in Section 602. From
the date of the Notice of termination of this Agreement by Developer to Agency and thereafter,
this Agreement shall be deemed terminated, Agency shall not be obligated to make any
payments of the Agency Loan or the Agency Grant, and there shall be no further rights or
obligations between the parties, except as follows. If the Developer exercises this termination
right, then Developer shall be obligated to reimburse the Agency for all of Agency’s reasonable
costs incurred in the negotiation and preparation of this Agreement and in reviewing plans and
specifications, negotiating and preparing closing documents, reviewing lender documents, and
other customary actions in preparation for the Construction Financing Event (“Agency Costs”),
with the amount of such reimbursement not to exceed $75,000. Agency Costs shall be
documented to the reasonable satisfaction of the Developer and shall include the Agency’s out of
pocket costs such as attorneys’ fees and consultant fees and shall also include costs attributable
to time spent by Agency staff. Developer shall pay the Agency Costs not later than fifteen (15)
days following Developer’s receipt of the documentation of such costs.
Section 509 Termination by Either Party
Prior to the Construction Financing Event, either party shall have the right to terminate
this Housing Agreement in the event the other party is in default of any material term or
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provision of this Housing Agreement, and, following notice, fails to cure such default within the
time provided in Section 501.
Section 510 Limited Recourse Obligations
Each obligation of the Developer under this Housing Agreement is a nonrecourse
obligation of the Developer. Except as provided otherwise in this Housing Agreement, neither
the Developer nor any of its members, nor any other party, shall have any personal liability for
payment of obligations to the Agency. The sole recourse of the Agency shall be the exercise of
its rights against the Property and the Project and any related security for the Agency Loan.
Except as otherwise provided herein below, no member, shareholder, partner, officer, director,
employee, agent, or attorney of Developer shall be personally liable to Agency in the event of
any default or breach by Agency or for any amount which may become due to Agency or on any
obligations under the terms of the Agreement.
Notwithstanding the foregoing, the Agency may obtain a judgment or order (including,
without limitation, an injunction) requiring Developer or any other party to perform (or refrain
from) specified acts other than repayment of the Agency Loan; may proceed against any person
or entity whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of
credit, reimbursement agreements or similar rights to payment or performance; and may recover
directly from Developer or any other party:
(a) any damages, costs and expenses incurred by the Agency as a result of fraud or any
criminal act or acts of Developer or any member, officer, director or employee of Developer or
of any of Developer’s members;
(b) any damages, costs and expenses incurred by the Agency as a result of any
misappropriation of funds provided for the development of the Property, rents and revenues from
the operation of the Project, or proceeds of insurance policies or condemnation proceeds;
(c) any and all amounts owing by Developer pursuant to Developer’s indemnification
regarding Hazardous Substances; and
(b) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon
any of the foregoing exceptions.
Section 511 Litigation Costs.
If litigation arises out of this Agreement for the performance thereof, then the court shall
award costs and expenses, including attorney’s fees, to the prevailing party. In awarding
attorney’s fees, the court shall not be bound by any court fee schedule but shall award the full
amount of costs, expenses and attorney’s fees paid or incurred in good faith.
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ARTICLE VI GENERAL PROVISIONS
Section 601 Developer’s Warranties.
Developer represents and warrants (1) that it has access to professional advice and
support to the extent necessary to enable Developer to fully comply with the terms of this
Housing Agreement; (2) that it and its members are duly organized, validly existing and in good
standing under the laws of the State of California; (3) that it has the full power and authority to
undertake the Project and to execute this Housing Agreement; (4) that the persons executing and
delivering this Housing Agreement are authorized to execute and deliver such documents on
behalf of Developer; (5) except as disclosed to the Agency in writing, there are no actions or
proceedings pending or, to the best of the Developer’s knowledge, threatened against the
Developer or Developer’s members before any court or administrative agency in any way
connected with the Property or the Project which could adversely affect the Developer’s ability
to perform the activities contemplated hereunder; (6) neither this Housing Agreement nor
anything provided to be done hereunder violates or shall violate any contract, agreement or
instrument to which the Developer or a member of Developer is a party or which affects the
Project or any part thereof; (7) the Developer is not in default in respect of any of its obligations
or liabilities pertaining to this Housing Agreement, nor is there any state of facts or
circumstances or conditions or events which, after notice, lapse of time, or both, would constitute
or result in any such default under this Housing Agreement; and (8) neither the Developer nor its
members has entered into any agreements which will adversely affect the title to the Project or
the Developer’s right to develop and use the Project as provided in this Housing Agreement, and
neither the Developer nor its members will enter into any such agreements after the date hereof.
Section 602 Notices, Demands and Communications between the Parties
Formal notices, demands, and communications between the Agency and Developer shall
be sufficiently given if: (i) personally delivered; (ii) delivered by same day or overnight courier
(acknowledged by receipt showing date and time of delivery); or (iii) dispatched by registered or
certified mail, postage prepaid, return receipt requested, to the addresses set forth below:
If to Developer: 4043 Irving Place Investors, LLC
6060 Center Drive, Suite 800
Los Angeles, CA 90045
Telecopier: 310-846-5310
Attention: George H. Mitsanas
4043 Irving Place Investors, LLC
c/o Culver City Volvo
11201 West Washington Boulevard
Culver City, CA 90230
Telecopier: 310-313-0950
Attention: Sal Gonzales
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With a copy to: Cox Castle Nicholson LLP
555 California Street, 10
th
Floor
San Francisco, CA 94104
Telecopier: (415) 392-4250
Attention: Stephen C. Ryan
If to Agency: Culver City Redevelopment Agency
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Executive Director
With a copy to: City Attorney’s Office
City of Culver City
9770 Culver Boulevard
Culver City, CA 90230-0507
And a copy to: Kane, Ballmer & Berkman
515 S. Figueroa St., Suite 1850
Los Angeles, California 90071
Attn: Deborah Rhoads, Esq.
Notices personally delivered or delivered by courier shall be effective upon receipt or
refusal to accept delivery. Mailed notices shall be effective on the earlier of (i) receipt of refusal
to accept delivery, or (ii) noon on the second business day following deposit in the United States
mail.
Section 603 Conflicts of Interest
(a) No member, official or employee of the Agency shall have any personal interest,
direct or indirect, in this Housing Agreement nor shall any such member, official or employee
participate in any decision relating to this Housing Agreement which affects his personal
interests or the interests of any corporation, partnership or association in which he is, directly or
indirectly, interested.
(b) 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 Housing Agreement.
Section 604 Nonliability of Agency Officials and Employees
No member, official, employee or consultant 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 that may become due to the Developer or to its successor, or on any
obligations under the terms of this Housing Agreement.
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Section 605 Effect of Redevelopment Plan Amendment
Pursuant to the provisions of the Redevelopment Plan relating to the modification or
amendment of the Redevelopment Plan, Agency agrees that no further amendment to the
Redevelopment Plan which changes the uses or development permitted on the Property, or
changes the restrictions or controls that apply to the Property, or otherwise affects the Property,
shall be made or become effective as to the Property without the prior written consent of
Developer. Further amendments to the Redevelopment Plan applying to other property in the
Project Area shall not require the consent of Developer.
Section 606 Extension of Times of Performance
(a) In addition to the specific provisions of this Housing Agreement, performance by any
party hereunder shall not be deemed to be in default during a Force Majeure Event. An
extension of time for a Force Majeure Event shall be limited to the period of such event, and
shall commence to run from the time of the commencement of the cause, provided notice by the
party claiming such extension is sent to the other party within ten (10) business days of the
commencement of the cause. In the event of such delay, the party delayed shall continue to
exercise reasonable diligence to minimize the period of delay.
(b) Times of performance under this Agreement may also be extended by mutual written
agreement by the Agency Executive Director and Developer.
Section 607 Inspection of Books and Records
The Developer shall maintain at a location in Los Angeles County complete, accurate,
and current records pertaining to the Property and the Project for a period of five (5) years after
the creation of such records, and shall permit any duly authorized representative of the Agency to
inspect and copy records, during regular business hours. Records must be kept accurate and
current.
Section 608 Action or Approval
Whenever action and/or approval by the Agency is required under this Agreement, the
Agency Executive Director or his or her designee may act on and/or approve such matter unless
specifically provided otherwise
Section 609 Assurances to Act in Good Faith
Developer and the Agency agree to execute all documents and instruments and to take all
action, including timely depositing funds as required hereby, and shall use their respective best
efforts to accomplish the development of the Property in accordance with the provisions hereof.
Approvals required of the Agency or the Developer shall not be unreasonably withheld. . Any
reference in this Agreement or the Agency Loan Documents to an action, approval, or consent on
the part of the Agency or Developer shall require such party to act reasonably in all respects
except as otherwise expressly provided. Any request made by Developer for an action, approval,
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or consent on the part of Agency shall be presumed a reasonable request if such request is made
in order to satisfy the reasonable requirements of a Senior Lender in order to obtain financing for
the Project.
Section 610 Real Estate Commissions
Neither the Agency nor the Developer shall be liable for any real estate commissions,
brokerage fees or finders fees which may arise from this transaction. The Agency and the
Developer each represent to the other that it has employed no broker, agent, or finder in
connection with this transaction.
Section 611 Interpretation
The terms of this Housing Agreement shall be construed in accordance with the meaning
of the language used and shall not be construed for or against any party by reason of the
authorship of this Housing Agreement or any other rule of construction which might otherwise
apply.
Section 612 Severability
If any provision of this Housing Agreement shall be adjudged invalid, illegal or
unenforceable by a court of competent jurisdiction, the remaining provisions of this Housing
Agreement shall not be affected thereby, but this Housing Agreement shall be construed as if
such invalid, illegal or unenforceable provisions had not been contained herein, and the
remainder of this Housing Agreement shall be valid and enforceable to the fullest extent
permitted by law.
Section 613 No Third Party Beneficiaries
This Housing Agreement is made solely and specifically between the Agency and
Developer and their respective successors and assigns; and, except as expressly provided
otherwise in this Housing Agreement, no other person will have any rights, interest or claims
under this Housing Agreement or be entitled to any benefits under or on account of this Housing
Agreement as a third party beneficiary or otherwise.
Section 614 Authority to Sign
Developer hereby represents that the person executing this Housing Agreement on behalf
of Developer has full authority to do so and to bind Developer to perform pursuant to the terms
and conditions of this Housing Agreement.
Section 615 Titles and Captions.
Titles and captions are for convenience only and shall not be construed to limit or extend
the meaning of this Agreement.
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Section 616 Gender and Number.
As used in this Agreement, masculine, feminine or neuter gender and the singular or
plural number shall each be deemed to include the others wherever and whenever the context so
dictates.
ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
(a) This Housing Agreement shall be executed in three duplicate originals each of
which is deemed to be an original. This Housing Agreement and its attached Exhibits shall
constitute the entire understanding and agreement of the parties.
(b) This Housing 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 part of or any interest in) the Property. This Housing
Agreement and all documents incorporated herein contain the entire understanding among the
parties hereto relating to the transactions contemplated herein and all prior or contemporaneous
agreements, understandings, representations, and statements, oral or written.
(c) All waivers of the provisions of this Housing Agreement must be in writing and
signed by the appropriate authorities of the Agency or the Developer, and all amendments hereto
must be in writing and signed by the appropriate authorities of the parties to be bound thereby.
This Housing Agreement and any provisions hereof may be amended by mutual written
agreement by the Developer and the Agency Executive Director, subject to review and approval
by the Agency Board as needed to comply with applicable law and internal policies and
procedures. The waiver by the Agency or Developer of any term, covenant, or condition herein
contained shall not be a waiver of such term, covenant, or condition on any subsequent breach.
(d) This Housing Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall be an original, but all of which together shall
constitute one agreement binding on the Agency and the Developer.
ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY THE AGENCY; DATE
OF AGREEMENT
(a) This Housing Agreement does not take effect until executed by the Developer and the
Agency. This Housing Agreement, when executed by the Developer and delivered to the
Agency, must be authorized, executed and delivered by the Agency within thirty (60) days after
the date of signature by the Developer, or the Developer shall have the right to withdraw its offer
to enter into this Housing Agreement by providing written notice to the Agency. This
Housing Agreement shall not be effective until executed by the Agency Executive Director.
(b) The Agency Executive Director is hereby authorized and directed to take such other
and further actions, and sign such other and further agreements and documents on behalf of the
Agency as may be necessary or proper to effect the terms of this Housing Agreement.
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the
Effective Date.
“DEVELOPER”
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
By: Renaissance Holding Company, LLC,
a California limited liability company
Its: Manager
By: _________________________
George H. Mitsanas
Its: Manager
By:__________________________
Silvestre Gregory Gonzales
Its: Authorized Representative
“AGENCY”
CULVER CITY REDEVELOPMENT
AGENCY, a public body corporate and politic
By: _________________________________
Executive Director
ATTEST:
By: _________________________________
Agency Secretary
APPROVED AS TO FORM:
By: _________________________________
General Counsel
By: _________________________________
KANE, BALLMER & BERKMAN
Agency Special Counsel
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EXHIBIT NO. 1
Legal Description
Real property in the City of Culver City, County of Los Angeles, State of California,
described as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per map
recorded in Book 21 Pages 190 and 191 of Maps, in the Office of the County Recorded of
said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all of the
above described real property, but without any right to penetrate, use of disturb the
surface of said property or any portion of said property within five hundred (500) feet of
the surface thereof as reserved in deed recorded August 30, 1985 as Instrument No. 85-
1016436 of Official Records.
APN: 4207-007-907
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METHOD OF FINANCING
This is the Method of Financing attached to the Affordable Housing Agreement (the “Housing
Agreement”) between the Culver City Redevelopment Agency (the “Agency”) and 4043 Irving
Place Investors, LLC (“Developer”), relating to the development of a 28-Unit multifamily rental
housing project (plus one commercial Unit), which shall include 12 housing Units to be rented,
at Affordable Rents, to Low Income and Moderate Income Households. Any capitalized term not
otherwise defined herein shall have the meaning ascribed to it in the Housing Agreement.
The Project will be financed by a combination of the Construction Loan, the Agency Loan, the
Agency Grant and Developer Equity.
2. Total Project Cost. The parties estimate that the total Project Costs shall be
approximately $14,021,400, including Property acquisition costs of approximately $3,501,400.
The Land Loan described in the Housing Agreement will be repaid in full at the Construction
Financing Event.
3. Sources of Construction Financing. The parties anticipate that the Project Costs
shall be financed during the Construction Period with the following combinations of funds.
Developer must make every reasonable effort to structure the terms of the construction financing
in a way that will minimize the amount of the Agency funds needed.
(a) The Construction Loan in the original principal amount of $6,250,000.
(b) The Agency Grant in the amount of $2,626,000.
(c) The Agency Loan in the amount of $3,366,000.
(d) The payment by the Agency in the amount of $577,400 pursuant to the
Settlement Agreement between the Agency and the Developer dated June
30, 2009 (the “Settlement Payment”).
(e) Developer Equity consisting of $1,202,000. In addition, Developer shall
be responsible during the Construction Period to provide funds, if and as
needed, to pay for any cost overruns not funded and contingencies not
otherwise funded by the sources of funds as described herein.
4. Sources of Permanent Financing. The parties anticipate that the Project Costs
shall be financed during the Permanent Period with the following combinations of funds.
Developer must make every reasonable effort to structure the terms of the permanent financing
in a way that will minimize the amount of the Agency funds needed.
(a) The Permanent Loan in the original principal amount of $6,250,000.
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(b) The Agency Grant referenced in paragraph 3(b).
(c) The Agency Loan referenced in paragraph 3(c).
(d) The Settlement Payment referenced in paragraph 3(d).
(e) The Developer Equity referenced in paragraph 3(e).
5. Project Budget. The parties anticipate that all Project Costs shall be as set forth
in the Project Budget attached to the Housing Agreement as Exhibit No. “6”. The Project
Budget shall be subject to change from time-to-time, subject to the prior written approval of the
Agency Executive Director, upon which approval the Project Budget shall be replaced by the
approved revised Project Budget.
6. Evidence of Financing. The sum of the Construction Loan, the Agency Grant,
the Agency Loan, and the Developer Equity, as provided in Sections 3 and 4 above, shall, at all
times, be sufficient to pay all Project Costs as set forth in the most recently approved Project
Budget. Prior to the Construction Financing Event, Developer shall submit for Agency review
and approval evidence of such financing, including: (a) copies of all documents required by the
Construction Lender; and, (b) any other documents reasonably required by the Agency. The
Agency shall not unreasonably withhold its approval of the Developer’s evidence of financing.
7. Agency Loan and Agency Grant.
(a) In accordance with and subject to the terms and conditions of the Housing
Agreement and this Method of Financing, the Agency agrees to make the Agency Loan to
Developer and Developer agrees to borrow such funds for the purpose of payment of Project
Costs.
(b) In accordance with and subject to the terms and conditions of the Housing
Agreement and this Method of Financing, the Agency agrees to make the Agency Grant to
Developer and Developer agrees to use such funds for the purpose of payment of Project Costs.
(c) The Agency Loan and the Agency Grant shall be used exclusively to pay
Project Costs identified in the Project Budget. Developer hereby acknowledges that the Agency
Assistance is intended to be “gap” financing, not to exceed the amount needed to bridge the gap
between the total Project Costs and the maximum Senior Loan obtainable by Developer plus the
maximum amount of Developer’s Equity set forth above, but in any event not to exceed the
dollar amount set forth above.
(d) At the Construction Financing Event, the Agency and the Developer shall
execute and deliver such instruments and documents as may be necessary to evidence and secure
the affordability restrictions on the Property and to evidence and secure the Agency Loan,
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consistent with the terms of the Housing Agreement and this Method of Financing, and each in a
form that is acceptable to the Agency Executive Director, including the following:
(1) Agreement Containing Covenants;
(2) Agency Note;
(3) Agency Deed of Trust;
(4) Assignment of Rents and Leases;
(5) Assignment of Agreements;
(6) Environmental Indemnity; and
(7) Notice of Affordability Restrictions.
8. Subordination. The Agreement Containing Covenants shall unconditionally be
and at all times remain prior and superior to the lien created by the Senior Deed of Trust and any
other of the Senior Loan Documents and all of the terms and conditions contained in the Senior
Loan Documents. However, the Agency shall subordinate the Agency Loan Documents and the
Agency Grant to the lien created by the Senior Deed of Trust and any other of the Senior Loan
Documents and all of the terms and conditions contained in the Senior Loan Documents.
Subject to the terms and conditions of this Section 8, prior to the Construction Financing
Event, the Executive Director of the Agency shall execute subordination agreements to, among
other things, subordinate the Agency Loan Documents to the Senior Deed of Trust and other
Senior Loan Documents consistent with the Housing Agreement, provided, however, that such
subordination agreement must contain provisions reasonably satisfactory to the Agency
Executive Director to protect the Agency’s investment in the event of default.
9. Recordation. Upon the Construction Financing Event, the Title Company shall
record the Agreement Containing Covenants, the Construction Loan Documents and the Agency
Loan Documents in accordance with instructions provided by the Agency, the Construction
Lender and the Developer, and shall be prepared to issue to the Agency ALTA policies of title
insurance, insuring the priority of the Agency Deed of Trust, in amounts and with endorsements
as the Agency may require. Developer agrees that the cost of the premium for the Agency’s title
policy, as well as all other closing costs, shall be paid by Developer as a Project Cost.
10. Agency’s Conditions Precedent to Construction Financing Event.
(a) The Agency’s obligation to fund the Agency Loan and the Agency Grant
shall be conditioned and contingent upon satisfaction or Agency’s waiver of each of the
following conditions precedent (collectively, the “Agency’s Conditions to Closing”):
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(i) Developer submits and the Agency Executive Director approves
evidence that the final working drawings have been approved by
the City, and, to the extent required by the Housing Agreement, by
the Agency;
(ii) Developer submits and the Agency Executive Director approves
the bid set for construction of the Project;
(iii) Developer submits and the Agency Executive Director approves a
copy of the fully executed general construction contract with a
licensed general contractor, covering all construction work
required by the Housing Agreement and the approved final
working drawings;
(iv) Developer submits and the Agency Executive Director approves a
final Project Budget, current as of the Construction Financing
Event, demonstrating to the satisfaction of the Agency Executive
Director the availability of sufficient funds to pay all Project Costs;
(v) Developer submits evidence satisfactory to the Agency Executive
Director that Developer has satisfied all conditions precedent to the
issuance of all Permits necessary for the Project, other than
payment of fees (for which funds have been budgeted in the
Project Budget);
(vi) Developer submits and the Agency Executive Director approves
the Maintenance Program, including the Maintenance Budget, as
required by the Housing Agreement;
(vii) Developer submits and the Agency Executive Director approves
the Annual Project Budget for the first year of operation, as
required by the Housing Agreement;
(viii) Developer submits and the Agency Executive Director approves
the Management Plan, as required by the Housing Agreement;
(ix) Developer, the Agency and Construction Lender shall have agreed
upon the terms of the Intercreditor Agreement described in Section
11 of this Method of Financing.
(x) Title Insurance Company is prepared to issue the title insurance
policy required by the Agency Executive Director;
(xi) Developer submits to the Agency and the Agency Executive
Director approves the certificates of insurance and endorsements
showing that Developer has obtained the insurance policies
required by the Housing Agreement;
ATTACHMENT 1
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METHOD OF FINANCING
PAGE 5
Method of Financing.doc [7/21/2010]
(xii) Developer deposits into Escrow all of the funds and duly executed
instruments required of it by the Housing Agreement and this
Method of Financing to close the Escrow;
(xiii) Developer delivers to the Agency and the Agency Executive
Director approves the final Construction Loan Documents;
(xiv) Developer delivers to the Agency and the Agency Executive
Director approves documentary evidence that Developer is in
current good standing and is duly authorized to execute and
implement the Housing Agreement; and
(xv) Developer is in full compliance with the terms and conditions of
the Housing Agreement and all documents and instruments
referred to therein or executed by Developer in furtherance of the
Housing Agreement, all representations and warranties of
Developer contained therein shall be true and correct in all material
respects.
(xvi) No litigation shall be threatened or pending which seeks to prevent
the construction or operation of the Project, or any part thereof,
according to the terms set forth in the Housing Agreement.
In the event any of the Agency’s Conditions to Closing are not satisfied (or waived by the
Agency) by the date set forth in the Schedule of Performance for the occurrence of the
Construction Financing Event, the Agency may cancel the Escrow and terminate the Housing
Agreement by delivering ten (10) days prior written notice to Developer and the Escrow agent.
Developer may nullify the notice to terminate if, within such ten (10) day period Developer (at
no cost to the Agency) cures any unsatisfied Conditions to Closing and notifies the Escrow agent
of such cure. In the event of termination pursuant to this paragraph, (i) the Escrow shall be
cancelled and any funds deposited by the parties shall be returned to them with any interest
earned on such funds; (ii) Developer shall be responsible for any escrow cancellation fees
imposed by the Escrow agent; and (iii) the Housing Agreement shall be terminated and the
parties shall have no further rights or obligations thereunder.
(b) Waiver of Conditions Precedent. Notwithstanding the foregoing, the
Agency, in the sole discretion of the Agency Executive Director, may waive any of the foregoing
conditions precedent to the Agency’s Construction Financing Event. A waiver of any of the
foregoing conditions shall not operate in any way as a waiver, or estoppel with respect to, any
subsequent or other failure to comply with such condition, or any other condition contained in
this Method of Financing, the Housing Agreement or any of the Agency Loan Documents.
11. Disbursement of Agency Loan and Agency Grant. Disbursement of the
Agency Assistance (i.e., the total amounts of the Agency Loan and Agency Grant) shall occur on
a pari passu basis with disbursement of the Construction Loan. Not less than fifteen (15) days
prior to the Construction Financing Event, the Agency shall have deposited the Agency Loan and
the Agency Grant into a third party escrow account. The Agency shall have no obligation to
ATTACHMENT 1
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METHOD OF FINANCING
PAGE 6
Method of Financing.doc [7/21/2010]
authorize disbursement of any portion of either the Agency Loan or the Agency Grant until the
Developer Equity have been fully disbursed. Disbursement of the Agency Loan and the Agency
Grant shall be subject to a ten percent (10%) retention, which shall be released to Developer
upon Completion of the Project. The Agency Loan and the Agency Grant shall be disbursed for
the payment of Project Costs in accordance with a disbursement agreement and escrow
instructions among the Agency, Construction Lender and Developer that are consistent with the
terms of this Method of Financing and the Housing Agreement and are in form and substance
that is mutually acceptable to the Agency Executive Director, Developer and Construction
Lender (the “Intercreditor Agreement”). The Intercreditor Agreement shall, among other things,
set forth the Agency’s approval rights over disbursements of the Agency Loan and Agency Grant
and shall assure the Agency’s right to fully participate in monthly draw meetings.
12. Repayment Terms. The repayment terms of the Agency Loan shall be as
follows, as more fully set forth in the Agency Note. The Agency Loan will be repaid with annual
payments from Residual Receipts (as defined in the Agency Note). Developer must utilize
twenty-five percent (25%) of Residual Receipts with respect to each calendar year to repay the
Agency Loan. The term of the Agency Loan shall be thirty (30) years from the Conversion Date.
The rate of interest shall be one and one-half percent (1.5%) per annum. The Agency Loan shall
become all due and payable upon the Maturity Date, as defined in the Agency Note.
ATTACHMENT 1
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SCHEDULE OF PERFORMANCE
PAGE 1
Schedule of Performance.doc [7/21/2010]
EXHIBIT NO. 4
SCHEDULE OF PERFORMANCE
ACTION ITEM TIME OF
PERFORMANCE
REFERENCE
1. Submittal - Final Construction
Drawings and Specifications and Bid
Set. Developer shall prepare and
submit to the Agency for approval the
Final Construction Drawings and
Specifications and the Bid Set for the
Project.
At least thirty (30) days
prior to the Construction
Financing Event.
Section 302
2. Submittal - Management Plan.
Developer shall submit to the Agency
for approval the proposed Management
Plan.
At least thirty (30) days
prior to the Construction
Financing Event.
Section 402 and
Section 4.4 of the
Agreement
Containing
Covenants
3. Submittal - Annual Project Budget.
Developer shall submit to the Agency
for approval the proposed Annual
Project Budget for the first year o
f
operation.
At least thirty (30) days
prior to the Construction
Financing Event.
Section 402 and
Section 4.4(a)(5) of
Agreement
Containing
Covenants
4. Submittal – Maintenance Program.
Developer shall submit to the Agency
for approval the proposed Maintenance
Program for the Project.
At least thirty (30) days
prior to the Construction
Financing Event.
Section 403
5. Evidence of Financing. The Developer
shall submit to the Agency final Land
Loan Documents and substantially
final Construction Loan Documents
and documentation of Developer
Equity, as provided in the Method of
Financing.
Within thirty (30) days
prior to the scheduled
date for the Construction
Financing Event.
Section 6 of Method
of Financing
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SCHEDULE OF PERFORMANCE
PAGE 2
Schedule of Performance.doc [7/21/2010]
6. Deposits Into Escrow. The Developer,
and Agency shall execute documents
and deposit documents and funds into
Escrow as provided in the Method of
Financing.
Not later than twelve
noon on the business day
immediately prior to the
scheduled Construction
Financing Event.
Sections 7 and 10.(a)
of the Method of
Financing
7. Construction Financing Event. All
conditions precedent to the
Construction Financing Event shall
have been satisfied.
Not later than October 1,
2011.
Section 10.(a) of
Method of Financing
8. Commencement of Construction. The
Developer shall commence
construction of the Improvements on
the Property.
Within thirty (30) days
after the Construction
Financing Event.
Section 305
9. Completion of Construction. The
Developer shall achieve Completion of
construction of the Improvements on
the Property.
Not later than eighteen
(18) months following
commencement of
construction.
Section 305
10.
Submission - Tenant Lease. The
Developer shall prepare and submit to
the Agency for approval the proposed
tenant lease for the Restricted Units as
provided in the Agreement Containing
Covenants.
Within thirty (30) days
prior to initial occupancy,
but no later than March
31, 2013.
Section 4.4(a)(4) of
Agreement
Containing
Covenants
11. Submission – Annual Reports. The
Developer submits annual financial
statements and rent records/tenant
eligibility certifications to the Agency.
Within one hundred
twenty (120) days after
the end of each calendar
year.
Sections 4.3 and
4.4(a)(5) of
Agreement
Containing
Covenants
NOTES:
It is understood that this Schedule of Performance is subject to all of the terms and conditions of the
text of the Housing Agreement. The summary of the items in this Schedule of Performance is not
intended to supersede or modify the more complete description in the text; in the event of any conflict
or inconsistency between this Schedule of Performance and the text of the Housing Agreement, the text
shall govern.
The time periods set forth in this Schedule of Performance may be altered or amended only by written
agreement signed by the Developer and the Agency. The Agency Executive Director shall have the
authority to approve extensions of time without action of the Agency’s governing board, not to exceed
a cumulative total extension of one (1) year.
ATTACHMENT 1
53EXHIBIT NO. 5
Scope of Development
The Scope of Development allows no more than twenty-eight (28) dwelling units
(including not more than one (1) commercial unit of approximately one thousand four
hundred and three (1,403) square feet with required parking; shall not exceed four (4)
stories in height ranging from thirty-three (33) to forty-five (45) feet in height; and shall
contain no less than sixty-six (66) parking spaces, pursuant to the plans prepared by J.S.
Egan Design, Inc., dated January 26, 2009 and labeled “Irving Place Residences, 4043
Irving Place, Culver City, California – Appeal Hearing Submittal 01.26.09” immediately
following this page. Additionally, the Scope of Development includes the requirement
that Owner, if such work is approved by the Neighborhood Traffic Management Program
Group and City grants the necessary approvals, remove the existing traffic barrier at “A”
Street and construct a partial cul-de-sac adjacent to the Property on Irving Place in
accordance with a plan approved by the City’s Public Works Director/City Engineer.
The one thousand four hundred and three square feet (1,403) square feet of commercial
use shall be of a type that generates low customer traffic as mutually agreed to by the
Agency and Owner.
The “amenity room” as shown on the plans shall be used as a party room, game room,
storage, etc. (but not for commercial or residential purposes).
Scope of Development.doc [7/21/2010]
ATTACHMENT 1
54PROJECT BUDGET
PAGE 1
Project Budget.doc [7/21/2010]
EXHIBIT NO. 6
PROJECT BUDGET
SOURCES OF ACQUISITION AND CONSTRUCTION FUNDS:
Construction Loan $ 6,250,000
Agency Grant $ 2,626,000
Agency Loan $ 3,366,000
Agency Settlement Payment $ 577,400
Developer Equity $ 1,202,000
TOTAL SOURCES: $ 14,021,400
SOURCES OF PERMANENT FUNDS:
Permanent Loan $ 6,250,000
Agency Grant $ 2,626,000
Agency Loan $ 3,366,000
Agency Settlement Payment $ 577,400
Developer Equity $ 1,202,000
TOTAL SOURCES: $ 14,021,400
PROJECT COSTS:
Property Acquisition; Closing Costs $ 3,501,400
Direct Construction Costs $ 7,750,000
Developer Fee $ 409,000
Other Indirect Costs $ 1,250,000
Replacement and Operating Reserves $ 250,000
Financing Costs $ 861,000
TOTAL PROJECT COSTS: $ 14,021,400
ATTACHMENT 1
55
AGENCY PROMISSORY NOTE
PAGE 1
Agency Note.doc [7/21/2010]
RESIDUAL RECEIPTS PROMISSORY NOTE
SECURED BY DEED OF TRUST
TO THE CULVER CITY REDEVELOPMENT AGENCY
1.5% Interest Culver City, California
$3,366,000 ______________, 2010
FOR VALUE RECEIVED, 4043 IRVING PLACE INVESTORS, LLC, a California
limited liability company (“Borrower”), hereby promises to pay to the CULVER CITY
REDEVELOPMENT AGENCY, a public body, corporate and politic, (“Agency”) or order, a
principal amount of Three Million Three Hundred Sixty Six Thousand Dollars ($3,366,000), or
so much thereof as may be advanced by the Agency to the Borrower as the Agency Loan
pursuant to the Affordable Housing Agreement dated as of July 26, 2010 (the “Housing
Agreement”) between Borrower (“Developer” therein) and the Agency, incorporated herein by
this reference. The Housing Agreement is a public record on file in the offices of the Agency.
The Borrower shall pay interest at the rate, in the amount and at the time hereinafter provided.
1. Definitions. Any capitalized term not otherwise defined herein shall have the
meaning ascribed to such term in the Housing Agreement. In addition, the following terms shall
have the following meanings:
The term “Net Proceeds” shall mean the proceeds of a sale, transfer or refinancing after
repayment of existing indebtedness and other liens and charges on the Property, less the
reasonable and customary costs of the transaction.
The term “Residual Receipts” shall mean, in each calendar year, the amount by which
Gross Revenue (as defined below) exceeds Annual Operating Expenses (as defined below), as
determined by a certified statement to be completed not later than ninety (90) days after the end
of each calendar year by Borrower using generally accepted accounting principles and based on
the accrual method (the “Audit”).
(i) “Gross Revenue,” with respect to each calendar year, shall mean all
revenue, income, receipts, and other consideration actually received from operation or leasing of
the Project. “Gross Revenue” shall include, but not be limited to: all rents, fees and charges paid
by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units,
deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental
adjustments to leases or rental agreements; proceeds from vending and laundry room machines;
the proceeds of business interruption or similar insurance; the proceeds of casualty insurance to
the extent not utilized to repair or rebuild the Project; and condemnation awards for a taking of
part or all of the Project for a temporary period. “Gross Revenue” shall also include the fair
market value of any goods or services provided in consideration for the leasing or other use of
any portion of the Project, except that the value of services provided by on-site manager(s) shall
not be treated as “Gross Revenue” if no more than one dwelling unit is leased to or otherwise
used by on-site manager(s). “Gross Revenue” shall not include tenants’ security deposits,
ATTACHMENT 1
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AGENCY PROMISSORY NOTE
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Agency Note.doc [7/21/2010]
required reserves or deposits, proceeds from the Senior Loan, the Agency Loan, the Agency
Grant, Developer Equity, or other financing provided to the Developer, including financing
provided by Investors, including capital contributions or similar advances, or interest that is
earned on and allocated to reserve accounts.
(ii) “Annual Operating Expenses,” with respect to each calendar year shall
mean the following costs reasonably and actually incurred for operation and maintenance of the
Project to the extent that they are consistent with Borrower’s annual certified statement of
revenues and expenses prepared using generally accepted accounting principles: property and
other taxes and assessments imposed on the Project; premiums for property damage and liability
insurance; utility services not paid for directly or reimbursed by tenants, including but not
limited to water, sewer, trash collection, gas and electricity; maintenance and repair including but
not limited to pest control, landscaping and grounds maintenance, painting and decorating,
installation of appliances, cleaning, common systems repairs, general repairs, janitorial, supplies,
and similar customary utility services; any license or certificate of occupancy fees required for
operation of the Project; general administrative expenses including but not limited to advertising
and marketing, security services and systems, professional fees for Borrower’s legal, audit,
accounting and tax returns, and similar customary administrative expenses; property
management fees, expenses and costs, not to exceed six percent (6%) of Gross Revenue and
pursuant to a management contract approved by the Agency; cash deposited into a replacement
reserve in the amount of $200 per unit per year, subject to annual increases not to exceed three
percent (3%) or such higher amount as required by the Senior Lender or Investors; cash
deposited into an operating reserve in such reasonable amounts as are required by Senior Lender,
all other fees and expenses which may be provided in Developer’s approved annual budget;
repayments of loans made by a member or affiliate of a member of the Developer for payment of
operating deficits or similar operating shortfalls, deferred Developer Fee; necessary capital
expenditures for the upkeep and repair of the Project and any expenditures required based upon a
physical needs assessment by the Senior Lender (not paid from reserves);; fixed debt service
payments (excluding debt service contingent upon the availability of residual receipts or surplus
cash of the Project) on loans associated with the Project and approved by the Agency; and
monitoring fees to the Agency in the amount of $5,000 in the first year with annual increases of
3%. “Annual Operating Expenses” shall not include the following: book depreciation,
amortization, depletion or other non-cash expenses or any amount expended from a reserve
account. Annual Operating Expenses shall be subject to the reasonable approval of the Agency.
The term “Senior Loan” shall mean, individually and collectively, the Construction Loan
and the Permanent Loan, or any other loan secured by a deed of trust or other instrument to
which the Agency agrees to subordinate this Note, the Agency Deed of Trust and the other
Agency Loan Documents.
2. This Note evidences the obligation of the Borrower to the Agency for the
repayment of the Agency Loan. Borrower may prepay the principal balance of this Note at any
time without penalty. However, even if Borrower prepays the entire balance of this Note including
all accrued interest, costs and penalties, the covenants, conditions and restrictions imposed on the
ATTACHMENT 1
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AGENCY PROMISSORY NOTE
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Agency Note.doc [7/21/2010]
Property by the Agreement Containing Covenants shall remain in full force and effect for the full
term as specified therein.
3. This Note is payable at the principal office of Agency, 9770 Culver Boulevard,
Culver City, California 90230-0507, or at such other place as the holder hereof may inform the
Borrower in writing, in lawful money of the United States.
4. This Note is secured by the Agency Deed of Trust.
5. This Note shall accrue simple interest at the rate of one and one-half percent
(1½%) per annum on a “draw down” basis on the principal amount disbursed by the Agency,
from the date of disbursement. However, if any event occurs giving the Agency the right to
accelerate repayment of this Note, the entire unpaid principal balance owing hereunder shall, as of
the date of such default, commence to accrue interest at a rate equal to maximum interest rate
permitted by law (the “Default Rate”). Further, in the event Borrower fails to reimburse the
Agency for any amount advanced by or for the account of the Agency which is due hereunder or
under the Agency Deed of Trust within ten (10) days after written notice of such advance is
made by the Agency to Borrower, then such unreimbursed amount shall thereafter bear interest
at the Default Rate until paid
6. The unpaid principal balance of this Note and all accrued but unpaid interest shall
be due and payable on the earliest to occur of the following (which shall be referred to herein as
the “Maturity Date”):
(a) June 30, 20__;
(b) the thirtieth (30
th
) anniversary of the Conversion Date, evidenced by the
recording against the Property of a reconveyance of the Construction Loan Deed of Trust upon
repayment in full of the Construction Loan;
(c) the date the Property or the improvements thereon or any portion thereof
or interest therein is sold, transferred, assigned or refinanced, without the prior written approval
of the Agency, except as permitted by the provisions of Section 203 (“Prohibition Against
Transfers”) of the Housing Agreement; or
(d) the date on which there is a Default by the Borrower under the terms of
this Note, the Housing Agreement , the Agency Deed of Trust, the Agreement Containing
Covenants, or any deed of trust or other instrument securing the Senior Loan, which is not cured
or waived within the respective time period provided herein and therein.
7. Prior to the Maturity Date, Borrower shall be obligated to repay the Agency Loan
as follows:
(a) Borrower shall be obligated to repay the principal amount of this Agency
Note and the accrued interest, without set off or deduction, by paying to the Agency, on each
ATTACHMENT 1
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AGENCY PROMISSORY NOTE
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May 1 in “Residual Receipts ,” to the extent Residual Receipts are available, for the calendar
year, or portion thereof, ending on the immediately preceding December 31 (as the term
“Residual Receipts ” are defined in Section 1 of this Agency Note), twenty-five percent (25%) of
that year’s Residual Receipts. The first such repayment under this Section 7 shall be due on the
first May 1 which is one full calendar year following the Conversion Date (as defined in the
Affordable Housing Agreement), and the last payment shall be due on May 1 thirty (30) years
later. Notwithstanding the foregoing, this Agency Note shall be fully due and payable on the
Maturity Date.
(b) The Agency Loan evidenced by this Note is based on the assumption that,
upon completion, all Project Costs will be $14,021,400. To induce the Agency to make the
Agency Loan evidenced hereby, Borrower covenants and agrees as follows. To the extent final
Project Costs, as determined by a cost certification performed not later than 90 days following
completion of construction, at Borrower's expense, by a Certified Public Accountant reasonably
acceptable to the Agency, are less than $14,021,400, an amount equal to fifty percent (50%) of
the resulting cost savings shall be allocated to pay accrued interest on and then reduce the
principal amount of the Agency Loan.
(c) Upon any sale or transfer of the Project or a refinance of the Senior Loan,
Borrower shall pay fifty percent (50%) of the Net Proceeds to the Agency.
(d) All payments to the Agency shall be applied first to the payment of all
expenses, charges, costs and fees incurred by or payable to Agency by Borrower pursuant to the
terms of the Agency Loan Documents (in such order and manner as Agency, in its sole
discretion, may elect), then to the payment of all interest accrued to the date of such payment,
and then to reduce the principal amount owed. All prepayment of principal on this Note shall be
applied to the most remote principal installment or installments until paid. Notwithstanding
anything to the contrary contained herein, after the occurrence and during the continuation of a
default under the Agency Deed of Trust, all amounts received by the Agency from any party
shall be applied in such order as the Agency, in its sole discretion, may elect.
8. Any breach by Borrower of the provisions of Section 203 (“Prohibition Against
Transfers”) of the Housing Agreement shall constitute a default under this Note. The cure
periods under the Housing Agreement and this Note in connection with such a default shall run
concurrently.
9. Borrower waives presentment for payment, demand, protest, and notices of
dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on
the ground of any extension or extensions of the time of payment or of any due date under this
Note, in whole or in part, whether before or after maturity and with or without notice. Borrower
hereby agrees to pay all costs and expenses, including reasonable attorney’s fees, which may be
incurred by the holder hereof, in the enforcement of this Note, the Agency Deed of Trust or any
term or provision of either.
ATTACHMENT 1
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AGENCY PROMISSORY NOTE
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Agency Note.doc [7/21/2010]
10. Upon the failure of Borrower to perform or observe any term or provision of this
Note, or upon the occurrence of any event of default under the terms of the Housing Agreement,
the Agency Deed of Trust, the Environmental Indemnity, or the Agreement Containing
Covenants, the holder may exercise its rights or remedies hereunder or thereunder. All such
rights and remedies shall be cumulative. Upon the event of a default that is not cured or waived
within the time provided therefore, the whole of the unpaid principal and interest owing on this
Note shall, at the option of Agency and without notice, become immediately due and payable.
This right of the Agency to declare amount owing on this Note immediately due and payable
may be exercised at any time after any such event and the acceptance of one or more payments
from any person thereafter shall not constitute a waiver of Agency’s right. Agency’s failure to
exercise said right in connection with any particular event or series of events shall not be
construed as a waiver of the provisions hereof as regards that event or any subsequent event.
11. (a) Subject to the extensions of time set forth in Section 12, and subject to the
further provisions of this Section 11, failure or delay by Borrower to perform any material term
or provision of this Note, the Housing Agreement, the Agency Deed of Trust, the Environmental
Indemnity, or the Agreement Containing Covenants constitutes a default under this Note.
(b) Agency shall give written notice of default to Borrower, specifying the
default complained of by the Agency. 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 Agency 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 Agency in asserting any of its rights and remedies shall not deprive Agency
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 a monetary event of default occurs, prior to exercising any remedies
hereunder, the Agency shall give the Borrower written notice of such default. The Borrower
shall have a period of ten (10) days after such notice is given within which to cure the default
prior to exercise of remedies by the Agency.
(e) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, the Agency shall give Borrower notice of such default. If the default is reasonably
capable of being cured within thirty (30) days, Borrower shall have such period to effect a cure
prior to exercise of remedies by the Agency. If the default is such that it is not reasonably
capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within
said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as
possible, then Borrower shall have such additional time as is reasonably necessary to cure the
default prior to exercise of any remedies by the Agency. In no event shall the Agency 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 ninety (90) days
after the first notice of default is given.
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Agency Note.doc [7/21/2010]
(f) Any notice of default shall be deemed given only if either (i) dispatched
by first class mail, registered or certified, postage prepaid, return receipt requested, to the address
specified for the Borrower in Section 16 of this Note, or (ii) by electronic facsimile transmission
to the facsimile number specified for the Borrower in Section 16 of this Note, followed by
delivery by the method described in clause (i), or (iii) by personal delivery (including by means
of professional messenger or courier service such as United Parcel Service or Federal Express) to
the address specified for the Borrower in Section 16 of this Note. Receipt shall be deemed to
have occurred on the earlier of (i) the date of successfully completed electronic facsimile
transmission or (ii) the date marked on a written postal service or messenger or courier service
receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). If
either party gives notice of a change of address in the manner specified in this paragraph, all
notices, demands and communications originated after receipt of the change of address (or the
effective date specified in the notice of change of address, if later) shall be transmitted, delivered
or sent to the new address.
12. Notwithstanding specific provisions of this Note, non-monetary performance
hereunder shall not be deemed to be in default where delays are due to causes beyond the control
and without the fault of the party claiming an extension of time to perform (a “Force Majeure
Delay”), provided that they actually delay and interfere with the timely performance of the
matter to which they would apply and despite the exercise of diligence and good business
practices are or would be beyond the reasonable control of the party claiming such interference,
including: war; insurrection; strikes; lock-outs; riots; systemic failure of the financial markets;
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 including litigation challenging the validity of this transaction or any element
thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays
of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any
Governmental Agency (except acts or failure to act of Agency shall not excuse performance by
Agency); the imposition of any applicable moratorium by a Governmental Agency; or any other
causes which despite the exercise of diligence and good business practices are or would be
beyond the reasonable control of the party claiming such delay and interference.
Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure
Delay unless and until the party claiming such delay and interference delivers to the other party
written notice describing the event, its cause, when and how such party obtained knowledge, the
date the event commenced, and the estimated delay resulting therefrom. Any party claiming a
Force Majeure Delay shall deliver such written notice within ten (10) business days after it
obtains actual knowledge of the event.
13. If the rights created by this Note shall be held by a court of competent jurisdiction
to be invalid or unenforceable as to any part of the obligations described herein, the remaining
obligations must be completely performed and paid.
14. The Agency Deed of Trust securing this Note shall be subordinate and junior in
all respects to the liens, terms, covenants and conditions of the Senior Deed of Trust, to the extent
and in the manner provided in that certain subordination agreement with Senior Lender dated on or
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about the date hereof (the “Subordination Agreement”). The rights and remedies of the payee and
each subsequent holder of this Note under the Agency Deed of Trust securing this Note are subject
to the restrictions and limitations set forth in the Subordination Agreement. Each subsequent holder
of this Note shall be deemed, by virtue of such holder’s acquisition of the Note, to have agreed to
perform and observe all of the terms, covenants and conditions to be performed or observed by the
Agency under the Subordination Agreement.
15. The obligation to repay the Agency Loan is a nonrecourse obligation of the
Borrower and its members. In the event of any default under the terms of this Note or the Deed
of Trust, the sole recourse of the Agency for any and all such defaults shall be by judicial
foreclosure or by the exercise of the trustee’s power of sale, and Borrower and its partners shall
not be personally liable for the payment of this Note or for the payment of any deficiency
established after judicial foreclosure or trustee’s sale; provided, however, that the foregoing shall
not in any way affect any rights the Agency may have (as a secured party or otherwise)
hereunder or under the Affordable Housing Agreement or Deed of Trust. The sole recourse of
the Agency with respect to repayment of the Agency Loan shall be the exercise of its rights
against the Property and the improvements thereon and any related security for the Agency Loan.
Notwithstanding the foregoing, the Agency
(a) may obtain a judgment or order (including, without limitation, an
injunction)requiring Borrower or any other party to perform (or refrain from) specified acts other
than repayment of the Agency Loan; and
(b) may recover directly from Borrower or any other party:
(i) any damages, costs and expenses incurred by Agency as a result of
fraud or any criminal act or acts of Borrower or any member, shareholder, officer, director or
employee of Borrower or of any member of Borrower;
(ii) any damages, costs and expenses incurred by Agency as a result of
any misappropriation of funds provided for the Project, rents and revenues from the operation of
the Project, or proceeds of insurance policies or condemnation proceeds;
(iii) any and all amounts owing by Borrower pursuant to Borrower's
indemnification regarding Hazardous Substances; and
(iv) all court costs and attorneys’ fees reasonably incurred in enforcing
or collecting upon any of the foregoing exceptions.
16. The address of Borrower for purposes of receiving notices pursuant to this Note is
as follows:
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4043 Irving Place Investors, LLC
6060 Center Drive, Suite 800
Los Angeles, CA 90045
Telecopier: 310-846-5310
Attention: George H. Mitsanas
4043 Irving Place Investors, LLC
c/o Culver City Volvo
11201 West Washington Boulevard
Culver City, CA 90230
Telecopier: 310-313-0950
Attention: Sal Gonzales
With a copy to: Cox Castle Nicholson LLP
555 California Street, 10
th
Floor
San Francisco, CA 94104
Telecopier: (415) 392-4250
Attention: Stephen C. Ryan
17. In addition to the other terms of this Note, the Borrower hereby agrees and
acknowledges that, notwithstanding any internal accounting procedures or provision pertaining
to the use of receipts, payments, reserves and distributions contained in its operating agreement
or other organizational document, the terms of this Note and the Housing Agreement shall
control as to the use of the Agency funds provided under the Housing Agreement and all
operating income from the Project.
18. Neither this Note nor any term hereof may be waived, amended, discharged,
modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective
except by an instrument in writing signed by the Agency and Borrower.
19. Notwithstanding any provision in this Note, the Agency Deed of Trust or other
document securing same, the total liability for payment in the nature of interest shall not exceed the
limit imposed by applicable laws of the State of California.
20. This Note has been executed and delivered by Borrower in the State of California
and is to be governed and construed in accordance with the internal laws thereof, disregarding the
rules governing conflict of laws.
21. Every provision of this Note is intended to be severable. In the event any term or
provision hereof is declared by a court of competent jurisdiction to be illegal, invalid or
unenforceable for any reason whatsoever, such illegality, invalidity or unenforceability shall not
affect the balance of the terms and provisions hereof, which terms and provisions shall remain
binding and enforceable, and this Note shall be construed as if such illegal, invalid or
unenforceable term or provision had not been contained herein.
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22. Time is of the essence in the performance of each provision hereof.
IN WITNESS WHEREOF Borrower has executed this Note as of the day and year set
forth above.
BORROWER:
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
By: Renaissance Holding Company, LLC,
a California limited liability company
Its: Manager
By: _________________________
George H. Mitsanas
Its: Manager
By:__________________________
Silvestre Gregory Gonzales
Its: Authorized Representative
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FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CULVER CITY REDEVELOPMENT AGENCY
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Executive Director
(Space Above This Line for Recorder’s Office Use Only)
(Exempt from Recording Fee per Gov. Code §27383)
APN: 4207-007-907
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
BY 4043 IRVING PLACE INVESTORS, LCC FOR THE BENEFIT OF
THE CULVER CITY REDEVELOPMENT AGENCY
This Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents),
dated for identification purposes only, July __, 2010 is made by 4043 IRVING PLACE
INVESTORS, LLC, a California limited liability company (hereinafter referred to as “Trustor”)
(whose address is 6060 Center Drive, Suite 800, Los Angeles, California, 90045, to
________________________, (hereinafter called “Trustee”), for the benefit of the CULVER CITY
REDEVELOPMENT AGENCY, a public body corporate and politic (hereinafter called
“Beneficiary”), whose address is 9770 Culver Boulevard, Culver City, CA 90230-0507.
Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee,
its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF
ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the
following property (the “Trust Estate”):
(1) All of Trustor’s rights, title and interest in and to that certain real property in the City of
Culver City, County of Los Angeles, State of California more particularly described in Exhibit “A”
attached hereto and by this reference made a part hereof (hereafter referred to as the “Subject
Property”);
(2) All buildings, structures and other improvements now or in the future located or to be
constructed on the Subject Property (the “Improvements”);
(3) all tenements, hereditaments, appurtenances, privileges, franchises and other rights
and interests now or in the future benefiting or otherwise relating to the Subject Property or the
Improvements, including easements, rights-of-way and development rights (the “Appurtenances”).
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(The Appurtenances, together with the Subject Property and the Improvements, are hereafter
referred to as the “Real Property”);
(4) 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 (the “Rents”);
(5) all inventory, equipment, fixtures and other goods (as those terms are defined in
Division 9 of the California Uniform Commercial Code (the “UCC”), and whether existing now or
in the future) 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, 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, but not including personal property that is donated to
Trustor (the “Goods,” and together with the Real Property, the “Property”); and
(6) 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 advance 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 (the “Intangibles”).
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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 Estate 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 9502(c) and
9604 of the UCC.
FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect,
all of the following:
(1) Due, prompt and complete observance, performance and discharge of each and every
condition, obligation, covenant and agreement contained herein or contained in the following (the
“Secured Obligations”):
(a) a promissory note in the original principal amount of $3,366,000, payable
from the residual receipts of the Project, executed by Trustor (“Borrower” therein) of
even date herewith (the “Agency Note”);
(b) the Affordable Housing Agreement dated as of July 26, 2010, by and between
Trustor (“Developer” therein) and Beneficiary (“Agency” therein) (the “Housing
Agreement”); and
(c) the Agreement Containing Covenants Affecting Real Property (Including
Affordable Housing Restrictions) dated as of July __, 2010 by and between Trustor
(“Owner” therein) and Beneficiary (“Agency” therein), recorded concurrently
herewith (“Agreement Containing Covenants”).
(2) Payment of indebtedness of the Trustor to the Beneficiary in the principal sum of
$3,400,000 or so much thereof as shall be advanced, evidenced by the Agency Note, with interest,
according to the terms of the Agency Note.
(3) Payment and performance of all future advances and other obligations that the then
record owner of all or part of the Property may agree to pay and/or perform (whether as principal,
surety or guarantor) for the benefit of Beneficiary, when such future advance of obligation is
evidenced by a writing which recites that it is secured by this Deed of Trust.
The Housing Agreement, including all Attachments thereto, and the documents and instruments
executed by Trustor in connection with the Project, including the Agreement Containing Covenants,
the Agency Note, the Assignment of Rents, the Assignment of Agreements, and the UCC1
Financing Statement, all as described in the Housing Agreement and all of their terms are
incorporated herein by reference and this conveyance shall secure any and all extensions,
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amendments, modifications or renewals thereof however evidenced. Any capitalized term that is not
otherwise defined in this Deed of Trust shall have the meaning ascribed to such term in the Housing
Agreement.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
1. That Trustor shall pay the Agency Note at the time and in the manner provided
therein, and perform the obligations of the Trustor as set forth in the Secured Obligations at the time
and in the manner respectively provided therein;
2. That Trustor shall not permit or suffer the use of any of the Property for any purpose
other than the uses permitted by the Secured Obligations;
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.
4. That, subject to the prior rights, if any, of a lender whose lien is senior to this Deed of
Trust (“Senior Lender”), all rents, profits and income from the Trust Estate are 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 Trust Estate and operate same and collect the rents, profits and income therefrom;
6. That Trustor will keep the Improvements insured against loss by fire and such other
hazards, casualties, and contingencies as may reasonably be required in writing from time to time by
the Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage
insurance policy or policies. In no event shall the amounts of coverage be less than 100 percent of
the insurable value of the Property. Such policies shall be endorsed with standard mortgage clause
with loss payable to the Beneficiary and certificates thereof together with copies of original policies
shall be deposited with the Beneficiary;
7. To pay, at least 10 days before delinquency, any taxes and assessments affecting the
Property; to pay, when due, all encumbrances, charges and liens, with interest, on the 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
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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 7.
8. To keep the 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 the 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 the
Property in violation of law and/or covenants, conditions and/or restrictions affecting the Property;
not to permit or suffer any material alteration of or addition to the Improvements 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 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 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 reasonable attorney fees.
Notwithstanding the foregoing, in the event of default under this Deed of Trust, the Beneficiary may
also require Trustor to maintain and submit additional records. Beneficiary shall specify in writing
the particular records that must be maintained and the information or reports that must be submitted;
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 principal sum 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 rate specified in the Agency Note;
13. That the funds to be advanced hereunder are to be used in accordance with the
Secured Obligations and upon the failure of Trustor to keep and perform all the covenants,
conditions, and agreements of said agreements, the principal sum and all arrears of interest, and
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other charges provided for in the Agency Note shall at the option of the Beneficiary of this Deed of
Trust become due and payable, anything contained herein to the contrary notwithstanding;
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 permitted by the
Secured Obligations or otherwise approved by Beneficiary, 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, 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 Los Angeles County, a surety bond in an amount one-and-one-half (12) times the
amount of such claim item 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 the 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;
16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing
representative of the Beneficiary a reasonable charge for providing a statement regarding the
obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2 Title 14,
Division 3, of the California Civil Code.
IT IS MUTUALLY AGREED THAT:
17. 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, subject to the rights of Senior Lender, 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. Subject to the rights of the
Senior Lenders, all such compensation, awards, damages, rights of action and proceeds which are
not used to 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 the Property,
are hereby assigned to Beneficiary. After deducting therefrom all its expenses, including attorney’s
fees, the balance of the proceeds which are not used to reconstruct, restore or otherwise improve the
Property or part thereof that was taken or damaged, shall be applied to the amount due under the
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Agency Note secured hereby. No amount applied to the reduction of the principal shall relieve the
Trustor from making regular payments as required by the Agency Note. If the Agency Note has been
repaid in full, the remainder of the balance shall revert to the Trustor;
18. Upon default by Trustor in making any payments provided for in the Agency Note
secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the
Secured Obligations, and if such default is not cured within the respective time provided therefor in
Section 34 of this Deed of Trust, below, 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, the Note and all documents
evidencing expenditures secured hereby;
19. a. Prior to the repayment in full of the Agency Loan, the Trustor shall not assign
or attempt to assign the Housing Agreement or any right therein, nor make any total or partial sale,
transfer, conveyance or assignment of the whole or any part of the Property, the Improvements, or
any portion thereof or interest therein (referred to hereinafter as a “Transfer”), without prior written
approval of the Beneficiary, except as otherwise permitted in the Secured Obligations. Consent to
one such transaction shall not be deemed to be a waiver of the right to require consent to future or
successive transactions. Beneficiary shall not unreasonably withhold or delay its consent. If consent
should be given, any such transfer shall be subject to this Section 19, and any such transferee shall
assume all obligations hereunder and agree to be bound by all provisions contained herein, subject to
the provisions of paragraph e.(3) of this Section 19, below.
b. Any such proposed transferee shall have the qualifications and financial
responsibility necessary and adequate as may be reasonably determined by the Beneficiary, to fulfill
the obligations undertaken by Trustor in the Secured Obligations. Any such proposed transferee, by
instrument in writing satisfactory to the Beneficiary and in form recordable among the land records
of Orange County, for itself and its successors and assigns, and for the benefit of the Beneficiary
shall expressly assume all of the obligations of the Trustor under the Secured Obligations, and agree
to be subject to all conditions and restrictions applicable to the Trustor in this Deed of Trust, subject
to the provisions of paragraph e.(3) of this Section 19. There shall be submitted to the Beneficiary
for review all instruments and other legal documents proposed to effect any such transfer; and if
approved by the Beneficiary its approval shall be indicated to the Trustor in writing.
c. In the absence of specific written agreement by the Beneficiary, no Transfer,
or approval thereof by the Beneficiary, shall be deemed to relieve the Trustor or any other party
from any obligations under the Secured Obligations.
d. In the event of a Transfer prior to the time the Agency Loan is paid in full and
without the prior written consent of the Beneficiary, the net proceeds (after repayment in full of the
Senior Loan and the reconveyance of the Senior Deed of Trust), shall be paid to the Beneficiary to
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the extent necessary to pay in full the accrued interest, if any, current interest and remaining
principal balance of the Agency Loan.
e. (1) As used herein, “Transfer” includes the sale, agreement to sell, transfer
or conveyance of the Property, the Project, or any portion thereof or interest therein, whether
voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale
contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all
or substantially all of the Property or Project, except as provided in subparagraph e.(3) of this
Section 19, below.
(2) “Transfer” shall also include the transfer, assignment, hypothecation or
conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor
to an entity form other than that of Trustor at the time of execution of the Housing Agreement,
except that a cumulative change in ownership interest of any member of forty-nine percent (49%) or
less shall not be deemed a “Transfer” for purposes of this Deed of Trust.
(3) Notwithstanding paragraphs (1) and (2), above, “Transfer” shall not
include any of the following Permitted Transfers:
(a) a conveyance of a security interest to the beneficiary of the Senior
Deed of Trust or the conveyance of title to the Property or Project in connection with a foreclosure,
a deed in lieu of foreclosure or similar conversion of such loan;
(b) a conveyance of the Property or Project to a limited liability
company in which the Managing Member is Trustor or Trustor’s Managing Member or a sale back
from such limited liability company to Trustor or Trustor’s Managing Member.
(c) the leasing for occupancy of all or any part of the Property or
Project in accordance with the Housing Agreement and the Agreement Containing Covenants.
(d) the inclusion of equity participation by Trustor by transfer or
addition of members to Trustor or similar mechanism.
f. Beneficiary shall not unreasonably withhold, condition or delay its approval
of any matter for which its approval is required hereunder. Any disapproval shall be in writing and
contain Beneficiary’s reasons for disapproval.
20. After the lapse of such time as may then be required by law following the recordation
of a notice of default, and notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale,
either as a whole or in separate parcels, and in such order as it may determine at public auction to the
highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of the Property by public announcement at the time and place of
sale, and from time to time thereafter may postpone the sale by public announcement at the time and
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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 so sold, but without any covenant or warranty, express or implied. The 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, 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 rate specified in the Agency Note; (4) all other sums then secured hereby; and (5) the
remainder, if any, to the person or persons legally entitled thereto;
21. 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;
22. 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;
23. Upon written request of Beneficiary stating that all sums secured hereby have been
paid and all obligations secured hereby have been satisfied, including but not limited to the
obligations set forth in the Agreement Containing Covenants, and upon surrender of this Deed of
Trust and any note, instrument or instruments setting forth all obligations secured hereby to Trustee
for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without
warranty, the Property then held hereunder. The recitals in such reconveyance of any matters or fact
shall be conclusive proof of the truthfulness thereof. To the extent permitted by law, the grantee in
such reconveyance may be described as “the person or persons legally entitled thereto.” Neither
Beneficiary nor Trustee shall have any duty to determine the rights of persons claiming to be rightful
grantees of any reconveyance. When the Property has been fully reconveyed, the last such
reconveyance shall operate as a reassignment of all future rents, issues and profits of the Property to
the person or persons legally entitled thereto;
24. The trust created hereby is irrevocable by Trustor;
25. 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 owner
and holder including pledgees, of the Agency Note secured hereby. In this Deed of Trust, whenever
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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;
26. 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.
Beneficiary, at its option, may from time to time remove Trustee and appoint a successor trustee to
any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall
succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law;
27. The undersigned Trustor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this Deed of
Trust.
28. 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.
29. Trustor agrees that the loan secured by this Deed of Trust is made expressly for the
purpose of financing the construction of Improvements on the Property, including 12 dwelling units
of affordable housing for Low Income and Moderate Income Households, and such dwelling units
shall be occupied exclusively by such persons as set forth in the Secured Obligations.
30. Trustor agrees that, except as otherwise provided in the Agency Note, upon sale or
refinancing of the property, the entire principal balance of the debt secured by this Deed of Trust,
plus any accrued but unpaid interest thereon, shall at the option of Beneficiary be immediately due
and payable.
31. The obligation to repay the Agency Loan is a nonrecourse obligation of the Trustor
and its members. Neither Trustor nor any of its members, nor any other party, shall have any
personal liability for repayment of the loan. The sole recourse of Beneficiary shall be the exercise of
its rights against the Property and any related security for the Agency Loan. Notwithstanding the
foregoing, Beneficiary may obtain a judgment or order (including, without limitation, an injunction)
requiring Trustor or any other party to perform (or refrain from) specified acts other than repayment
of the Agency Loan; and may recover directly from Trustor or from any other party:
(a) any damages, costs and expenses incurred by Beneficiary as a result of fraud or any
criminal act or acts of Trustor or any member, shareholder, officer, director or employee of
Trustor, or of any member of Trustor;
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(b) any damages, costs and expenses incurred by Beneficiary as a result of any
misappropriation of funds provided for the construction of the Improvements on the Property
as described in the Housing Agreement, rents and revenues from the operation of the Project,
or proceeds of insurance policies or condemnation proceeds;
(c) any and all amounts owing by Trustor pursuant to the indemnification regarding
Hazardous Substances pursuant to the Environmental Indemnity; and
(d) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon
any of the foregoing exceptions.
32. 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 proximately caused by
any of the following Force Majeure events, provided such event actually delays and interferes with
the timely performance of the matter, and, despite the exercise of diligence and good business
practices, such event is beyond the reasonable control of Trustor: 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 including litigation challenging the validity of this transaction or any element
thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of
any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any
Governmental Authority (except acts or failure to act of the Beneficiary shall not excuse
performance by the Beneficiary); the imposition of any applicable moratorium by a Governmental
Authority; or any other causes which despite the exercise of diligence and good business practices
are or would be beyond the reasonable control of the party claiming such delay and interference.
Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event
unless and until Trustor delivers to Beneficiary written notice describing the event, its cause, when
and how Trustor obtained knowledge, the date the event commenced, and the estimated delay
resulting therefrom. Trustor shall deliver such written notice within ten (10) business days after it
obtains actual knowledge of the event.
33. 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 Secured Obligations, 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.
34. (a) Subject to the extensions of time set forth in Section 32, and subject to the further
provisions of this Section 34, 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.
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(b) Beneficiary shall give written notice of default to Trustor, specifying the
default complained of by the Beneficiary. Failure or 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 a monetary event of default occurs, prior to exercising any remedies
hereunder, Beneficiary shall give Trustor written notice of such default. Trustor shall have a period
of ten (10) days after such notice is given within which to cure the default prior to exercise of
remedies by Beneficiary.
(e) If a non-monetary event of default occurs, prior to exercising any remedies
hereunder, Beneficiary shall give Trustor notice of such default. 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 Beneficiary. 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, continually, 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 or the
default is not cured within ninety (90) days after the first notice of default is given.
(f) Except as otherwise required to comply with the provisions of California Civil
Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by
electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered
upon its transmission; any notice of default that is personally delivered (including by means of
professional messenger service, courier service such as United Parcel Service or Federal Express, or
by U.S. Postal Service), shall be deemed received on the documented date of receipt by Trustor; and
any notice of default that is sent by registered or certified mail, postage prepaid, return receipt
required shall be deemed received on the date of receipt thereof.
35. This Deed of Trust shall be subordinate and junior to the Senior Deed of Trust, as
described in the Housing Agreement. The Executive Director of the Beneficiary or his designee
shall execute such instruments as may be necessary to subordinate the lien of this Deed of Trust, to
the deed of trust securing any Senior Loan. In the event of a default or breach by Trustor of any
security instrument securing a Senior Loan described in this Section 35, Beneficiary shall have the
right to cure the default prior to completion of any foreclosure. In such event, Beneficiary shall be
entitled to reimbursement by Trustor of all costs and expenses incurred by Beneficiary in curing the
default. The amount of any such disbursements shall be a lien against the Property and added to the
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obligation secured by this Deed of Trust until repaid, with interest at the highest rate permitted by
law.
38. This Deed of Trust shall be subject to the terms and conditions set forth in that certain
Subordination Agreement, dated on or about the date hereof, by and among the Trustor, Senior
Lender and Beneficiary, as the same may be amended, restated, supplemented or modified from time
to time.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day and year set
forth above.
“TRUSTOR”
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
By: Renaissance Holding Company, LLC
A California limited liability company
Its: Manager
By: _______________________________
George H. Mitsanas
Its: Manager
By: _______________________________
Silvestre Gregory Gonzales
Its: Authorized Representative
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APPROVED BY:
“AGENCY”
CULVER CITY REDEVELOPMENT AGENCY,
a public body corporate and politic
By: _________________________________
Executive Director
ATTEST:
By: _________________________________
Agency Secretary
APPROVED AS TO FORM:
By: _________________________________
General Counsel
By: _________________________________
KANE, BALLMER & BERKMAN
Agency Special Counsel
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State of California )
County of Los Angeles )
On ________________________________________ before me, __________________,
a Notary Public, personally appeared ______________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
State of California )
County of Los Angeles )
On ________________________________________ before me, __________________,
a Notary Public, personally appeared ______________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
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AGENCY DEED OF TRUST
LEGAL DESCRIPTION
Agency Deed of Trust.doc [7/21/2010]
Exhibit A
LEGAL DESCRIPTION
The land referred to herein is situated in the State of California, County of Los Angeles, and
described as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per map recorded
in Book 21 Pages 190 and 191 of Maps, in the Office of the County Recorded of said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all of the above
described real property, but without any right to penetrate, use of disturb the surface of said
property or any portion of said property within five hundred (500) feet of the surface thereof as
reserved in deed recorded August 30, 1985 as Instrument No. 85-1016436 of Official Records.
APN: 4207-007-907
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FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CULVER CITY REDEVELOPMENT AGENCY
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Executive Director
(Space Above This Line for Recorder’s Office Use Only)
(Exempt from Recording Fee per Gov. Code §27383)
APN: 4207-007-907
AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY
(INCLUDING AFFORDABLE HOUSING RESTRICTIONS)
THIS AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY
(INCLUDING AFFORDABLE HOUSING RESTRICTIONS) (“Agreement”) dated for
identification purposes only July __, 2010 is entered by and between THE CULVER CITY
REDEVELOPMENT AGENCY, a public body, corporate and politic (“Agency”) and 4043
IRVING PLACE INVESTORS, LLC, a California limited liability company (“Owner”).
RECITALS:
A. Agency is responsible for the use of certain low- and moderate-income housing
funds pursuant to California’s Community Redevelopment Law [California Health & Safety
Code §§33000, et seq.] (“Set Aside Funds”).
B. Agency and Owner (“Developer” therein) have entered into that certain
Affordable Housing Agreement, dated as of July 26, 2010 (the “Housing Agreement”),
concerning Owner’s development and operation of that certain real property more particularly
described in Exhibit No. 1 attached hereto and incorporated by reference herein (the “Property”).
The Housing Agreement describes the “Project” which generally consists of Owner’s
development on the Property of a total of twenty-eight (28) dwelling units and one (1)
commercial unit and subsequent operation thereof as a rental housing complex. Twelve of the
dwelling units are to be restricted to occupancy by Low Income and Moderate Income
Households. The Housing Agreement is hereby incorporated herein by this reference as though
fully set forth herein. Any capitalized terms not defined herein shall have the meanings ascribed
to such terms in the Housing Agreement.
D. Owner has executed that certain promissory note (the “Agency Note”) dated on or
about the date hereof, pursuant to which Agency has provided Owner with a loan of Set Aside
Funds in the principal amount of Three Million Three Hundred Sixty Six Thousand Dollars
($3,366,000). The Agency Note is secured by a Deed of Trust with Assignment of Rents dated
on or about the date of the Note, naming Agency as beneficiary (“Agency Deed of Trust”).
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F. Agency and Owner now desire to place restrictions upon the use and operation of
the Project, in order to ensure that twelve (12) of the dwelling units in the Project shall be
operated continuously as affordable housing available for rental to Low Income and Moderate
Income Households in accordance with the terms set forth below for the term of this Agreement.
AGREEMENT:
NOW, THEREFORE, the Owner and Agency declare, covenant and agree, by and for
themselves, their heirs, executors, administrators and assigns, and all persons claiming under or
through them, that the Property, for the term of this agreement, shall be held transferred,
encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and restrictions
hereinafter set forth:
1. DEFINITIONS.
1.1 Affordable Rent. The term “Affordable Rent” shall mean the monthly
payments charged to and paid by tenants to the Owner for the use and occupancy of a Low
Income Unit or a Moderate Income Unit and facilities associated therewith, including a
reasonable allowance for utilities, but shall not include any optional services provided by Owner
to residents (i.e., concierge or other personal services that are not customarily included in rent).
Affordable Rent shall mean:
a. for Low Income Units, rental rates not to exceed thirty percent (30%)
times sixty percent (60%) of Area Median Income adjusted for household size appropriate to the
unit.
b. for Moderate Income Units, rental rates not to exceed thirty percent (30%)
times one hundred ten percent (110%) of Area Median Income adjusted for household size
appropriate to the unit
As used in this definition of “Affordable Rent” the phrase “adjusted for household size
appropriate to the unit” means a household size equal to the number of bedrooms in the unit plus
one. Affordable Rent shall include a reasonable utility allowance for tenant-paid utilities based
on the Los Angeles County Housing Authority’s published utility schedules.
1.2 Area Median Income. The term “Area Median Income” shall mean the
area median income of Los Angeles County, with adjustments for household size, as estimated
annually 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 published by California’s
Housing and Community Development Department pursuant to Health and Safety Code section
50093.
1.3 Eligible Tenant. The term “Eligible Tenant” shall mean any person
entitled to rent a Low Income Unit or a Moderate Income Unit as set forth in this Agreement.
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1.4 Low Income Household. The term “Low Income Household” shall have
meaning given to “lower income households” in Health and Safety Code section 50079.5(a),
generally being a household whose income does not exceed 80% of the Area Median Income
adjusted for family size.
1.5 Low Income Unit. The term “Low Income Unit” shall mean one of the
two (2) two-bedroom and one (1) one-bedroom rental dwelling units in the Project restricted to
occupancy by Low Income Households.
1.6 Moderate Income Household. The term “Moderate Income Household”
shall mean a household whose income does not exceed 120% of Area Median Income adjusted
for family size.
1.7 Moderate Income Unit. The term “Moderate Income Unit” shall mean one
of the five (5) two-bedroom and four (4) one-bedroom rental dwelling units in the Project
restricted to occupancy by Moderate Income Households.
1.8 Restricted Unit. The term “Restricted Unit” shall mean each of the Low
Income Units and Moderate Income Units. The Restricted Units shall be distributed throughout
the Project, the intent being that Restricted Units will not be clustered together.
2. TERM OF AGREEMENT; PRIORITY OF AGREEMENT; USE OF
PROPERTY. As required by California Health and Safety Code Section 33334.3, this
Agreement shall commence upon its execution and shall remain in effect for the longest feasible
period but not less than the period terminating fifty-five (55) years following the date on which a
Release of Construction Covenants is recorded for the Project. This Agreement shall remain in
effect throughout its full term, notwithstanding the payment in full of the Agency Loan. This
Agreement is secured by the Agency Deed of Trust and Owner shall not be entitled to a
reconveyance of the Agency Deed of Trust prior to the expiration of the full term of this
Agreement. This Agreement shall unconditionally be and remain at all times prior and superior
to the lien created by the Senior Deed of Trust and any other of the Senior Loan Documents and
all of the terms and conditions contained in the Senior Loan Documents and to the lien of any
new mortgage debt which is for the purpose of refinancing all or any part of the Senior Loan.
Owner hereby agrees that the Low Income Units and the Moderate Income Units in the Project
are to be owned, managed, and operated as a project for Eligible Tenants for the term of this
Agreement. To that end, and for the term of this Agreement, the Owner hereby represents,
covenants, warrants and agrees as follows:
2.1 Schedule. The Project activities shall be accomplished within the time
provided in the Schedule of Performance, which is attached to the Housing Agreement.
2.2 Tasks and Budget. The Project Costs are indicated in the Project Budget
attached to the Housing Agreement. The Set Aside Funds shall be used exclusively for
development of the Project.
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2.3 Construction Covenant. Owner hereby covenants and agrees on behalf of
itself and its successors and assigns in the Property or any portion thereof or any improvements
thereon or any interest therein that Owner and such successors and assigns shall develop the
Project in accordance with the Housing Agreement (including but not limited to the Scope of
Development), the Redevelopment Plan for the Culver City Redevelopment Project, this
Agreement, and plans approved by the Agency and the City of Culver City.
2.4 Facilities. All of the Units in the Project shall contain facilities
adequate for living, sleeping, eating, cooking and sanitation in accordance with all applicable
federal, state and local laws and codes. The construction and maintenance of the Units shall
comply with the City’s building code and all other applicable local codes, building standards,
ordinances and zoning ordinances in effect, and the Units shall be decent, safe and sanitary and
shall conform to the building, electrical, plumbing, mechanical and energy codes that have been
adopted by the City of Culver City. To the extent applicable, the Project shall comply with the
accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation
Act of 1973 (29 U.S.C. 794) and, if applicable, the design and construction requirements at 24
CFR 100.205 for covered multifamily dwellings, as defined at 24 CFR 100.201, which
implements the Fair Housing Act (42 U.S.C. 3601-3619).
2.5 Residential Use. None of the Units in the Project will at any time be
utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house,
sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, or any
other use that is inconsistent or incompatible with this Agreement.
2.6 Conversion of Units. No part of the Project will at any time be owned by
a cooperative housing corporation nor shall the Owner take any steps in connection with the
conversion to such ownership or uses to condominiums, or to any other form of ownership.
2.7 Tenant Preference. All of the Restricted Units will be made available to
Eligible Tenants for rental in accordance with the terms of this Agreement, and the Owner shall
not give preference to any particular class or group in renting those Units, except to the extent
that the Restricted Units are required to be leased or rented to Eligible Tenants and except as
provided in Section 3.6 below.
2.8 Tenant Protections. Owner shall comply with the following tenant
protections:
a. The lease of a Restricted Unit must be for not less than one year,
unless by mutual agreement between tenant and Owner.
b. The lease of a Restricted Unit may not contain any of the following
provisions:
(1) Agreement by the tenant to admit guilt or to a judgment in
favor of Owner in a lawsuit brought in connection with the lease;
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(2) Agreement by the tenant that the Owner may take, hold, or sell
personal property of household members without notice to the tenant and a court decision on the
rights of the parties. This prohibition, however, does not apply to an agreement by the tenant
concerning disposition of personal property remaining in the Unit after the tenant has moved out
of the Unit. The Owner may dispose of this personal property in accordance with state law.
(3) Agreement by the tenant not to hold the Owner or the Owner’s
agents legally responsible for any action or failure to act, whether intentional or negligent;
(4) Agreement by the tenant that the Owner may institute a lawsuit
without notice to the tenant;
(5) Agreement by the tenant that the Owner may evict the tenant
or household members without instituting a civil court proceeding in which the tenant has the
opportunity to present a defense, or before a court decision on the rights of the parties;
(6) Agreement by the tenant to waive any right to a trial by jury;
(7) Agreement by the tenant to waive the tenant’s right to appeal,
or to otherwise challenge in court, a court decision in connection with the lease; and
(8) Agreement by the tenant to pay attorney’s fees or other legal
costs if the tenant wins in a court proceeding by the Owner against the tenant. The tenant,
however, may be obligated to pay costs if the tenant loses.
Owner shall adhere to a fair lease and grievance procedure approved by the Agency.
2.9 Termination of Tenancy. Owner, its successors or assigns, may not
terminate the tenancy or refuse to renew the lease of a tenant of a Restricted Unit, except (i) for
serious or repeated violation of the terms and conditions of the lease; (ii) for violation of
applicable federal, state, or local law; (iii) violation of occupancy rules as described in Section 3
below; or (iv) for other good cause. Any termination or refusal to renew must be preceded by not
less than 30 days by the Owner’s service upon the tenant of a written notice specifying the
grounds for the action.
3. OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Owner
hereby represents, warrants, and covenants as follows:
3.1 Income Restrictions. Except as expressly provided herein, throughout the
term of this Agreement, the Restricted Units shall be rented only to, and occupied only by,
Eligible Tenants.
3.2 Rental Rates. Owner shall rent the Restricted Units to Eligible Tenants at
no more than the allowable Affordable Rents for a household size appropriate to the unit, which
is the number of bedrooms plus one. The rental rates for the Restricted Units shall be adjusted
annually based upon annual updates of the applicable income and rent standards, including but
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not limited to updates published by the California Housing and Community Development
Department. In no event shall any of the Restricted Units be rented at a rate greater than the
applicable Affordable Rent. Failure to comply with the affordability requirements of this
Agreement is an event of default under the terms of the Agency Loan. Subject to the right to
cure, the Agency Loan of Set Aside Funds will be due and payable immediately if the Restricted
Units do not meet the requirements of this Agreement.
3.3 Occupancy By Eligible Tenant. If at any time a Restricted Unit
tenant’s household income increases, resulting in disqualification of such tenant as a Low
Income Household or Moderate Income Household, as applicable, such tenant shall have a
period of ninety (90) days to relocate from the Property. The disqualified tenant shall be fully
responsible for the costs and expenses related to the relocation. Should such tenant face
extraordinary hardship in relocating from the Property, the tenant may submit a written appeal to
the Agency requesting an extension of the time period within which the tenant must relocate. If
the Agency’s Executive Director determines in his or her sole discretion that a hardship
exception is justified by the circumstances, he or she may extend the relocation period for up to a
maximum of ninety (90) additional days.
The provisions set forth in this Section 3.3 shall apply only to the extent such provisions are not
in conflict with any applicable federal or state law or any regulatory agreement affecting the
Project that is recorded in superior priority to this Agreement.
3.4 Maximum Occupancy. The maximum number of persons residing in a
Unit may not exceed the maximum occupancy standards of the City of Culver City. Owner shall
be responsible for enforcing this maximum occupancy limit. Upon discovery of a violation of
this Section 3.4, Owner shall immediately notify the tenant of record in writing (“Occupancy
Violation Notice”). In the Occupancy Violation Notice, Owner shall inform the tenant of the
occupancy violation and provide the tenant with an opportunity to cure the violation within thirty
(30) days from the date of the Notice.
3.5 Income Computation. Immediately prior to a prospective tenant’s
occupancy of a Restricted Unit, Owner shall obtain and maintain on file an income computation
and certification form from such prospective tenant dated immediately prior to the date of initial
occupancy of a Restricted Unit by such prospective tenant. Owner shall verify that the income
information provided by an applicant is accurate by following all applicable Agency policies and
procedures and by taking one or more of the following steps as a part of the verification process:
(i) obtain two (2) pay stubs from the most recent pay periods; (ii) obtain a written verification of
income and employment from applicant’s current employer; (iii) obtain an income verification
form from the Social Security Administration and/or California Department of Social Services if
the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not
file a tax return for the previous calendar year, obtain other verification of such applicant’s
income as is reasonably satisfactory; or (v) obtain such other information as may be reasonably
required. Owner shall update the foregoing records annually and shall provide copies of updated
tenant eligibility records and monthly rental records relating to the Restricted Units to the
Agency for review. Health and Safety Code Section 33418(b) requires the Agency to adequately
fund its compliance monitoring activities and authorizes the Agency to impose fees upon the
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owners of properties monitored pursuant to Section 33418 to defray the cost of complying with
the Agency’s monitoring and reporting obligations. Therefore, Developer agrees that,
commencing upon the Completion of the Project and continuing throughout the term of this
Agreement, Developer will pay to the Agency an annual monitoring fee in the amount set forth
in the definition of “Annual Operating Expenses” in the Agency Note. Upon review of records
submitted to it, the Agency may at its option perform an independent audit of the tenant
eligibility records in order to verify compliance with the income and affordability requirements
set forth herein. Costs for such an audit performed by the Agency shall be an expense of the
Agency. Owner shall retain the records described in this Section for a period of five (5) years
after the date the respective records were created.
3.6 Rental Priority. Subject to Owner’s policies and procedures for screening
potential tenants, which must be approved by the Agency, the Restricted Units shall be rented
according to the following priorities, as such units become available for occupancy:
a. Owner shall give first priority in renting the Restricted Units to
Eligible Tenants who have been displaced by activities of the City or the Agency, pursuant to
California Health & Safety Code Section 33411.3.
b. Owner shall, to the extent permitted by applicable law, give second
priority in renting the Restricted Units to Eligible Tenants who are employees of the City of
Culver City and the Culver City School District.
c. Owner shall give third priority in renting the Restricted Units to
Eligible Tenants who are listed on the Agency’s Rental Assistance Program (RAP) Waiting List.
Except as otherwise set forth above, Restricted Units shall be rented to Eligible Tenants on a
first-come, first-served basis; provided, however, that Owner shall maintain an “interest list” or
“eligibility list” of potential tenants. The rental priority provision set forth in this Section 3.6
shall apply only to the extent such provisions are not in conflict with any applicable federal or
state law or any regulatory agreement affecting the Project that is recorded in superior priority to
this Agreement.
3.7 Maintenance of Records. Owner shall maintain complete and accurate
records pertaining to the Restricted Units, and shall permit any duly authorized representative of
the Agency to inspect the books and records of Owner pertaining to the Project including, but not
limited to, those records pertaining to tenant eligibility and occupancy of the Restricted Units.
Records pertaining to the Project and the Restricted Units shall be retained for a period of five
(5) years after the termination of this Agreement.
To assist the Agency in meeting its reporting requirements under California’s
Community Redevelopment Law, Owner shall prepare, maintain and submit to the Agency the
following records and reports:
a. Records which demonstrate that the Property meets the affordability and income
targeting requirements of California Health and Safety Code Sections 50079.5, 50093 and 50053
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for the duration of this Agreement. Records shall be kept for each family occupying a Restricted
Unit;
b. Records which demonstrate that each lease complies with the tenant and
participant protections, as specified in Section 2.8 of this Agreement. Records shall be kept for
each family occupying a Restricted Unit;
c. Equal opportunity and fair housing records;
d. Documentation of the Owner’s affirmative steps to assure that minority business
and women’s business enterprises have an equal opportunity to obtain or compete for contracts
and subcontracts as sources of supplies, equipment, construction and services; and
e. Documentation of the actions the Owner has taken to affirmatively further fair
housing.
Owner shall retain all books and records relevant to the Housing Agreement for a minimum of
five years after the project completion date, except that records of individual tenant income
verifications, project rents and project inspections shall be retained for the most recent five year
period until five years after the affordability period terminates, or until the conclusion or
resolution of any and all audits or litigation relevant to the Housing Agreement, whichever is
later. The Agency and its representatives shall have the right of access to any pertinent books,
documents, papers or other records of the Owner, in order to make audits, examinations, excerpts
and transcripts.
3.8 Reliance on Tenant Representations: Each tenant lease shall contain a
provision to the effect that Owner has relied on the income certification and supporting
information supplied by the tenant in determining qualification for occupancy of a Restricted
Unit, and that any material misstatement in such certification (whether or not intentional) will be
cause for immediate termination of such lease.
4. MAINTENANCE
4.1 Maintenance Covenant.
(a) Owner agrees to maintain all interior and exterior improvements,
including landscaping, on the Property in good condition and repair (and, as to landscaping, in a
healthy condition), reasonable wear and tear excepted, and in accordance with all applicable
laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other
governmental agencies and bodies having or claiming jurisdiction. In addition, Owner shall keep
the Property free from all graffiti and any accumulation of debris or waste material. Owner shall
make all repairs and replacements necessary to keep the improvements in good condition and
repair and shall promptly eliminate all graffiti and replace dead and diseased plants and
landscaping with comparable materials. The maintenance covenant contained in this Section
shall remain in effect for the term of this Agreement.
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(b) The Project shall comply with the lead-based paint standards in 24
C.F.R. §92.355.
4.2 Agency Rights. The Agency shall have the right to enter upon the
Property to inspect the Property and both the interiors and exteriors of the Units, upon seventy-
two (72) hours notice to Owner. The Agency may, but is not obligated to, perform or cause to be
performed the maintenance necessary to cure any default of these maintenance covenants and
Owner shall be liable for payment of reasonable costs to perform such required maintenance;
provided, however, that Owner first be given written notice of the actions required to cure any
default, and Owner, after receipt of such notice, shall have thirty (30) days to cure such defaults,
but Owner shall not be deemed in default of the foregoing maintenance covenant if such default
cannot reasonably be cured within the thirty (30) day period referenced above so long as Owner
has commenced to cure such default within the same thirty (30) day period and is diligently
proceeding with the work to cure such default. Notwithstanding the foregoing, if any property
conditions are reasonably identified by the Agency after a property inspection attended by a
representative of Owner that pose an immediate danger to life or limb, Owner shall have three
(3) days to effect corrections of such condition(s) to the Agency’s reasonable satisfaction.
4.3 Annual & Bi-Annual Reports. Owner covenants and agrees to submit to
the Agency an annual report (the “Annual Report”), which shall include the information required
by Section 3.5 of this Agreement and by California Health & Safety Code Section 33418. The
Annual Report shall include for each Restricted Unit the rental rate and the income and family
size of the occupants, and shall also include the records described in Section 3.5 herein and the
financial statements required by Section 402 of the Housing Agreement. The income
information shall be supplied by the tenant in a certified statement on a form provided by the
Agency. The Owner shall submit the Annual Report on or before April 30 of the year following
the year covered by the Annual Report. The Owner shall provide for the submission of
household information and certification in its leases with tenants.
Beginning on the date of first occupancy, and for each fiscal year thereafter during the term of
this Agreement, Owner shall also submit on a bi-annual basis a report for the management of the
Property (the “Bi-Annual Report”). The Bi-Annual Report shall include a profit and loss
statement, budget to date figures, and occupancy report and shall clearly show project revenues,
operating expenses, deposits to and withdrawals from the Project’s Capital Reserve Account, and
cash flow available for residual receipts payments. The Bi-Annual Report shall be in a form that
is reasonably acceptable to the Agency Executive Director. The Agency Executive Director, in
his/her sole discretion may waive the requirement of the Bi-Annual Report for one or more
reporting periods. However, such waiver shall not operate to waive any subsequent requirement
of the Bi-Annual Report for the Restricted Period. After receipt of such Bi-Annual Report for the
Project, the Agency may request additional financial analyses or obtain a third party review at
the Agency’s own expense, of financial statements for the Project to verify the accuracy of the
payments by Owner on the Agency Note or the required deposits into the Capital Reserve
Account. If the Agency’s review of Owner’s Bi-Annual Report reveals material errors in the
calculation of the payments by Owner on the Agency Note or reveals that the required deposits
into the Capital Reserve Account have not been made or reveals that Owner has rented a
Restricted Unit to a person who is not an Eligible Tenant or has charged rent for a Restricted
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Unit in excess of the Affordable Rent, then Owner shall be required to submit such reports on a
quarterly basis for a reasonable time thereafter, as determined by the Agency Executive Director.
4.4 Management Plan. Within the time set forth in the Schedule of
Performance attached to the Housing Agreement, Owner shall prepare and submit to the Agency
for approval a management plan in accordance with the following (“Management Plan”):
(a) The Management Plan, including such amendments as may be
approved in writing by the Agency, shall remain in effect for the term of this Agreement. Owner
shall not amend the Management Plan or any of its components without the prior written consent
of the Agency. The components of the Management Plan shall include:
(1) Management Agent. The name and qualifications of the
proposed management agent, which may include but shall not be limited to
__________________. The Agency shall approve or disapprove the proposed management
agent, if other than _________________, in writing based on the experience and qualifications
of the management agent. The management agent shall have demonstrated experience in
operating affordable housing.
(2) Management Program. A description of the proposed
management, maintenance, tenant selection and occupancy policies and procedures for the
Restricted Units, which shall include procedures to assure that advertising of the Restricted Units
will reach a broad cross-section of Culver City residents.
(3) Management Agreement. A copy of the proposed
management agreement specifying the amount of the management fee and the relationship and
division of responsibilities between Owner and management agent.
(4) Tenant Lease or Rental Agreement. A copy of the proposed
tenant lease or rental agreement to be used in renting the Restricted Units.
(5) Annual Operating Budget. Within the time set forth in
the Schedule of Performance attached to the Housing Agreement and annually thereafter not
later than fifteen (15) days prior to the beginning of the next fiscal or calendar year of the
Project, Owner shall submit a projected operating budget to the Agency for review and approval.
After Owner’s initial projected operating budget submittal, Owner shall annually reconcile each
previous year’s projected budget with actual operating results for the Project (“Budget
Reconciliation”). In each Budget Reconciliation, Owner shall set forth an explanation for any
major discrepancies between projected and actual budgets. For purposes of this Agreement, a
“major discrepancy” shall mean a line item difference between projected and actual budgets of
20% or more.
The Agency shall not unreasonably withhold, condition or delay its approval of any matter for
which its approval is required hereunder, but such matter shall be deemed disapproved unless the
Agency provides to Owner its written approval within thirty (30) days after receipt of a request
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for approval. Any express disapproval shall be in writing and contain the Agency’s reasons for
disapproval.
(b) Owner hereby covenants and agrees the Agency shall have the
right, at any time and from time to time, to give notice to Owner if the Agency determines that
the Project is not being managed or maintained in accordance with the Management Plan. The
Agency may require the Owner to change management practices or to terminate the management
agent and retain a different management agent, approved by the Agency. The Agency agrees
that prior to requiring the Owner to change its management agent or the management practices
the Agency shall informally consult with Owner, in an attempt to resolve the dispute. If the
Agency determines that such an attempt at informal resolution has been unsuccessful, it shall
give the Owner thirty (30) days written notice to change the management agent or practice, as
the case may be. If Owner fails to do as requested by the Agency in the written notice, the
Agency may then require the immediate change of the management practice or agent, as the case
may be. The management agreement shall provide that it is subject to termination by the Owner
without penalty, upon thirty (30) days prior written notice. Within ten (10) business days
following a direction of the Agency to replace the management agent, the Owner shall select
another management agent or make other arrangements satisfactory to the Agency for continuing
management of the Project. The Owner shall notify the Agency upon learning that there is a
voluntary change in the management or control of the management agent, and, if the change is
unsatisfactory to the Agency, the Agency shall be entitled to require the Owner to change the
management agent in accordance with the terms of this paragraph.
5. DEFAULT; ENFORCEMENT If the Owner defaults in the performance or
observance of any covenant, agreement or obligation of the Owner set forth in this Agreement,
and if such default remains uncured for a period of 30 days after notice thereof shall have been
given by the Agency to the Owner, or for a period of 30 days from the date the Owner should,
with reasonable diligence, have discovered such default, then the Agency shall declare an “Event
of Default” to have occurred hereunder; provided, however, that if the default is of such a nature
that it cannot be corrected within 30 days, such default shall not constitute an Event of Default
hereunder so long as the Owner institutes corrective action within said 30 days and diligently
pursues such action until the default is corrected.
Following the declaration of an Event of Default hereunder, the Agency may take any one or
more of the following steps, in addition to all other remedies provided by law or equity:
(i) by mandamus or other suit, action or proceeding at law or in equity,
including injunctive relief, require the Owner to perform its obligations and covenants
hereunder or enjoin any acts or things that may be unlawful or in violation of the rights of
the Issuer or the Trustee hereunder;
(ii) have access to and inspect, examine and make copies of all of the books
and records of the Owner pertaining to the Project; and
(iii) take such other action at law or in equity as may appear necessary or
desirable to enforce the obligations, covenants and agreements of the Owner hereunder,
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including acceleration of the Agency Note and exercise of the Agency’s power of sale
under the Agency Deed of Trust.
The Owner hereby agrees that specific enforcement of the Owner’s agreements contained herein
is the only means by which the Agency may fully obtain the benefits of this Agreement made by
the Owner herein, and the Owner therefore agrees to the imposition of the remedy of specific
performance against it in the case of any Event of Default by the Owner hereunder. Provided
however, the rights and remedies of the Agency are cumulative, and the exercise by the Agency
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
Owner.
6. NONDISCRIMINATION. There shall be no discrimination against or
segregation of any person, or group of persons, on account of race, color, creed, age, class,
income, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any part
thereof, or in the awarding of contracts for the Project, nor shall participant, 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, sublessees or vendees of the Property, or any part thereof, or in the awarding
of contracts for the Project (except as permitted by this Agreement). Owner shall comply with
all applicable federal, state and local nondiscrimination, fair housing, and equal opportunity
requirements.
6.1 Form of Nondiscrimination and Nonsegregation Clauses. The Owner
shall refrain from restricting the rental, sale or lease of the property on the basis of race, color,
creed, age, class, income, religion, sex, sexual orientation, marital status, national origin or
ancestry of any person. All such deeds, leases or contracts shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
(a) In deeds: “The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any person or group
of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed, nor shall the grantee or any person claiming under or through him or her, establish or
permit any practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land.”
(b) In leases: “The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions:
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That there shall be no discrimination against or segregation of any person or group of persons, on
account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as
those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing,
subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor
shall the lessee himself or herself, or any person claiming under or through him or her, establish
or permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or
vendees in the premises herein leased.”
(c). In contracts: There shall be no discrimination against or
segregation of any person or group of persons, on account of any basis listed in subdivision (a) or
(d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the land, nor shall the transferee itself or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees of the land.”
7. COVENANTS TO RUN WITH THE LAND. Owner hereby subjects the
Property to the covenants, reservations, and restrictions set forth in this Agreement. Agency and
Owner hereby declare their express intent that all such covenants, reservations, and restrictions
shall be deemed covenants running with the land and shall pass to and be binding upon the
Owner’s successors in title to the Property; provided, however, that on the termination of this
Agreement said covenants, reservations and restrictions shall expire, except the
nondiscrimination covenants contained in Section 6 and Section 6.1 shall remain in perpetuity.
All covenants without regard to technical classification or designation shall be binding for the
benefit of the City of Culver City and the Agency, and such covenants shall run in favor of the
City and Agency for the entire term of this Agreement, without regard to whether the City or
Agency is or remains an owner of any land or interest therein to which such covenants relate.
8. ATTORNEYS’ FEES. In the event that any action, suit or other proceeding
is brought to enforce the obligations of under this Agreement, each party shall bear its own costs
and expenses of suit, including attorneys’ fees, expert witness fees and all costs incurred in each
and every such action, suit or other proceeding, including any and all appeals or petitions
therefrom.
9. AMENDMENTS. This Agreement shall be amended only by a written
instrument executed by the parties hereto or their successors in title, and duly recorded in the
Official Records of the County of Los Angeles, State of California.
10. NOTICE. Any notice required to be given hereunder shall be made in writing
and shall be given by (i) personal delivery, (ii) courier service that provides a receipt showing
date and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt
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requested, at the addresses specified below, or at such other addresses as may be specified in
writing by the parties hereto:
Agency: Culver City Redevelopment Agency
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Agency Executive Director
With a copy to: City Attorney’s Office
City of Culver City
9770 Culver Boulevard
Culver City, CA 90230-0507
Owner: 4043 Irving Place Investors, LLC
6060 Center Drive, Suite 800
Los Angeles, CA 90045
Attention: George H. Mitsanas
With a copy to: Cox Castle Nicholson LLP
555 California Street, 10
th
Floor
San Francisco, CA 94104
Telecopier: (415 392-4250
Attention: Stephen C. Ryan
Notices personally delivered or delivered by courier shall be effective upon receipt. Mailed
notices shall be effective on the earlier of receipt or Noon on the second business day following
deposit in the United States mail.
11. SEVERABILITY/WAIVER/INTEGRATION.
11.1 Severability. If any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall
not in any way be affected or impaired thereby.
11.2 Waiver. A waiver by either party of the performance of any
covenant or condition herein shall not invalidate this Agreement nor shall it be considered a
waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in
exercising any remedy or right be considered a waiver of, or an estoppel against, the later
exercise of such remedy or right.
11.3 Integration. This Agreement contains the entire Agreement between the
parties and neither party relies on any warranty or representation not contained in this
Agreement.
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12. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the State of California without regard to the principles of conflicts of laws.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall constitute one original and all of which shall be one and the
same instrument. This Agreement may be executed by each party on a separate signature page,
and when the executed signature pages are combined, shall constitute one single instrument.
14. TRANSFER OF THE PROJECT. For the term of this Agreement, the Owner
shall not Transfer the Project, in whole or in part, without the prior written consent of the
Agency, which consent shall not be unreasonably withheld or delayed if the following conditions
are satisfied: (A) the receipt by the Agency of evidence acceptable to the Agency that (1) the
Owner shall not be in default hereunder or the transferee undertakes to cure any defaults of the
Owner to the reasonable satisfaction of the Agency; (2) the continued operation of the Project
shall comply with the provisions of this Agreement; (3) the transferee or its property manager
has at least seven years’ experience in the ownership, operation and management of similar size
rental housing projects, and at least five years’ experience in the ownership, operation and
management of rental housing projects containing below-market-rate units, without any record of
material violations of income and affordability restrictions, discrimination restrictions or other
state or federal laws or regulations or local governmental requirements applicable to such
projects; and (4) the person or entity that is to acquire the Project does not have pending against
it, and does not have a history of significant and material building code violations or complaints
concerning the maintenance, upkeep, operation, and regulatory agreement compliance of any of
its projects as identified by any local, state or federal regulatory agencies; (B) the execution by
the transferee of any document reasonably requested by the Agency with respect to the
assumption of the Owner’s obligations under this Agreement, including without limitation an
instrument of assumption hereof and thereof, and delivery to the Agency of an opinion of such
transferee’s counsel to the effect that each such document and this Agreement are valid, binding
and enforceable obligations of such transferee, subject to bankruptcy and other standard
limitations affecting creditor’s rights; and (C) receipt by the Agency of all payments, fees and/or
expenses then currently due and payable to the Agency by the Owner.
15. LIMITATION ON LIABILITY. Notwithstanding the foregoing or any other
provision or obligation to the contrary contained in this Agreement and except as otherwise
provided herein below, (i) the liability of the Owner under this Agreement to any person or
entity, including, but not limited to, the Agency and its successors and assigns, is limited to the
Owner’s interest in the Project, and such persons and entities shall look exclusively thereto, or to
such other security as may from time to time be given for the payment of monetary obligations
arising out of this Agreement or any other agreement securing the obligations of the Owner
under this Agreement; and (ii) from and after the date of this Agreement, no deficiency or other
personal judgment, nor any order or decree of specific performance (other than pertaining to this
Agreement, any other agreement pertaining to the Project or any other agreement securing the
Owner’s obligations under this Agreement), shall be rendered against the Owner, the assets of
the Owner (other than the Owner’s interest in the Project), its partners, members, successors,
transferees or assigns and each of their respective officers, directors, employees, partners, agents,
heirs and personal representatives, as the case may be, in any action or proceeding arising out of
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this Agreement or any agreement securing the obligations of the Owner under this Agreement, or
any judgment, order or decree rendered pursuant to any such action or proceeding.
Notwithstanding the foregoing, the Agency may obtain a judgment or order (including, without
limitation, an injunction) requiring Owner or any other party to perform (or refrain from)
specified acts; may proceed against any person or entity whatsoever with respect to the
enforcement of any guarantees, surety bonds, letters of credit, reimbursement agreements or
similar rights to payment or performance; and may recover directly from Owner or any other
party:
(a) any damages, costs and expenses incurred by the Agency as a result of fraud or any
criminal act or acts of Owner or any member, officer, director or employee of Owner or
of any of Owner’s members;
(b) any damages, costs and expenses incurred by the Agency as a result of any
misappropriation of funds provided for the development of the Property, rents and
revenues from the operation of the Project, or proceeds of insurance policies or
condemnation proceeds;
(c) any and all amounts owing by Owner pursuant to Owner’s indemnification regarding
Hazardous Substances; and
(d) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon
any of the foregoing exceptions.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, the Agency and Owner have executed this Agreement Containing
Covenants by duly authorized representatives on the date first written hereinabove.
“OWNER”
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
By: Renaissance Holding Company, LLC,
a California limited liability company
Its: Manager
By: _________________________
George H. Mitsanas
Its: Manager
By:__________________________
Silvestre Gregory Gonzales
Its: Authorized Representative
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“AGENCY”
CULVER CITY REDEVELOPMENT AGENCY,
a public body, corporate and politic
_____________________________
Executive Director
ATTEST:
_____________________________
Agency Secretary
APPROVED AS TO FORM:
_____________________________
General Counsel
______________________________
KANE, BALLMER & BERKMAN
Agency Special Counsel
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EXHIBIT NO. 1
LEGAL DESCRIPTION OF PROPERTY
The land referred to herein is situated in the State of California, County of Los Angeles, and
described as follows:
Real property in the City of Culver City, County of Los Angeles, State of California, described
as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per map recorded
in Book 21 Pages 190 and 191 of Maps, in the Office of the County Recorded of said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all of the above
described real property, but without any right to penetrate, use of disturb the surface of said
property or any portion of said property within five hundred (500) feet of the surface thereof as
reserved in deed recorded August 30, 1985 as Instrument No. 85-1016436 of Official Records.
APN: 4207-007-907
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State of California )
County of Los Angeles )
On ________________________________________ before me, __________________,
a Notary Public, personally appeared ______________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
State of California )
County of Los Angeles )
On ________________________________________ before me, __________________,
a Notary Public, personally appeared ______________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
ATTACHMENT 1
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ASSIGNMENT OF RENTS AND LEASES
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Assignment of Rents and Leases.doc [7/21/2010]
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CULVER CITY REDEVELOPMENT AGENCY
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Executive Director
(Space Above This Line for Recorder’s Office Use Only)
(Exempt from Recording Fee per Gov. Code §27383)
APN: 4207-007-907
ASSIGNMENT OF RENTS AND LEASES FROM 4043 IRVING PLACE
INVESTORS, LCC TO THE CULVER CITY REDEVELOPMENT AGENCY
THIS ASSIGNMENT OF RENTS AND LEASES (the “Assignment”) dated for
identification purposes only July __, 2010 is made by 4043 IRVING PLACE
INVESTORS, LLC, a California limited liability company (“Assignor”), in favor of THE
CULVER CITY REDEVELOPMENT AGENCY, a public body corporate and politic
(the “Assignee”).
RECITALS
A. Assignor is the owner of the real property described in Exhibit “A”
attached hereto and the owner of all of the personalty, fixtures, and improvements now or
hereafter located thereon or attached thereto now existing or to be constructed thereon.
Said real property, personalty, fixtures, and the improvements are herein referred to
collectively as the “Property”.
B. Assignee has agreed to make a loan (the “Loan”) to Assignor in the
original principal amount of Three Million Three Hundred Sixty-Six Thousand Dollars
($3,366,000), pursuant to the terms of that certain Affordable Housing Agreement by and
between Assignor and Assignee dated as of July 26, 2010 (the “Housing Agreement”).
The Loan is evidenced by a Residual Receipts Promissory Note Secured by Deed of
Trust, of even date herewith, executed by Assignor in favor of Assignee (the “Note”).
The Loan is secured by a Deed of Trust, Security Agreement and Fixture Filing (With
Assignment of Rents), of even date herewith, executed by Assignor, as Trustor, for the
benefit of Assignee, as Beneficiary (the “Deed of Trust”).
In order to induce Assignee to make the Loan to Assignor, Assignor has agreed to
execute this Assignment.
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NOW THEREFORE, with reference to the foregoing and in reliance thereon and
for good and valuable consideration, the receipt of which is hereby acknowledged,
Assignor agrees as follows:
AGREEMENT
1. All initially capitalized terms used herein, unless otherwise defined or
required by context, shall have the meaning ascribed to them in the Housing Agreement.
2. Subject to the prior rights, if any, of a lender whose lien is senior to the
Deed of Trust held by Assignee (“Senior Lender”), Assignor hereby absolutely grants,
sells, assigns, transfers, and sets over to Assignee, by this Assignment, all of Assignor’s
interests, whether now existing or hereafter acquired, in all leases and other occupancy
agreements of any nature, now or hereafter covering all or any part of the Property,
together with all extensions, renewals, modifications, or replacements of said leases and
occupancy agreements, and together with any and all guarantees of the obligations of the
lessees and occupants (the “Lessees”) thereunder, whether now existing or hereafter
executed, and all extensions and renewals of said guarantees. (Said leases and occupancy
agreements, together with any and all guarantees, modifications, extensions and renewals
thereof, are hereinafter referred to collectively as the “Leases” and individually as a
“Lease”.)
3. Assignor’s purpose in making this Assignment is to relinquish to Assignee
its right to collect and enjoy the rents, royalties, issues, profits, income, and other benefits
at any time accruing by virtue of the Leases (hereinafter called “Rents and Profits”).
4. The parties intend that this Assignment shall be a present, absolute and
unconditional assignment and shall, immediately upon execution, give the Assignee the
right to collect the Rents and Profits and to apply them in payment of the principal and
interest and all other sums payable on the indebtedness and other obligations under the
Note and other Loan documents, as well as all other sums payable under the Deed of
Trust or any other instrument given as security for the indebtedness. However, the
Assignee hereby grants to Assignor a license to collect and use, subject to the provisions
set forth below, the Rents and Profits as they respectively become due and to enforce the
Leases, so long as there is no Default by Assignor in performance of the terms,
covenants, or provisions of the Deed of Trust, the Note, the Housing Agreement, this
Assignment or any other Loan document. Nothing contained herein, nor any collection of
Rents and Profits by Assignee or by a receiver, shall be construed to make Assignee a
“mortgagee in possession” of the Property so long as Assignee has not entered into actual
possession of the Property.
5. Upon the occurrence of any Default or Event of Default under the terms
and conditions of this Assignment, the Note, the Deed of Trust, the Housing Agreement
or any other loan document, this Assignment shall constitute a direction and full authority
to each Lessee under any Lease and each guarantor of any Lease to pay all Rents and
Profits to Assignee without proof of the Default relied upon. Assignor hereby irrevocably
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authorizes each Lessee and guarantor to rely upon and comply with any notice or demand
by Assignee for the payment to Assignee of any Rents and Profits due or to become due.
6. Assignor represents and warrants as to each Lease now or hereafter
covering all or any portion of the Property, unless Assignee has been otherwise advised
in writing by Assignor:
a. That each Lease is in full force and effect;
b. That no material default exists on the part of the Lessee thereunder
or Assignor;
c. That no rent in excess of one month’s rent has been collected in
advance;
d. That no Lease or any interest therein, except to the extent required
by the Senior Lender, has been previously assigned or pledged; and
e. That all rent due to date under each Lease has been collected and
no concession has been granted to any Lessee in the form of a waiver, release, reduction,
discount, or other alteration of rent due or to become due except as previously disclosed
to Assignor in writing.
7. Assignor agrees with respect to each Lease:
a. If any Lease provides for a security deposit paid by the Lessee to
Assignor and subject to the prior rights, if any, of a Senior Lender, this Assignment
transfers to Assignee all of Assignor’s right, title, and interest in and to each such security
deposit; provided, however, that Assignor shall have the right to retain said security
deposit so long as Assignor is not in Default under this Assignment, the Deed of Trust,
the Note, the Housing Agreement or any other Loan document; and provided further that
Assignee shall have no obligation to the Lessee with respect to such security deposit
unless and until Assignee comes into actual possession and control of said security
deposit.
b. If any Lease provides for the abatement of rent during repair of the
leased premises by reason of fire or other casualty, Assignor shall furnish rental insurance
to Assignee, the policies to be with companies and in form, content, policy limits, and
terms as are customary in the case of entities owning similar property or assets similarly
situated.
c. Each Lease shall remain in full force and effect despite any merger
of the interest of Assignor and any Lessee thereunder. Except as otherwise provided in
the Housing Agreement, Assignor shall not terminate any Lease (except pursuant to the
terms of the Lease upon a default by any Lessee thereunder), or materially modify or
amend any Lease or any of the terms thereof, or grant any concessions in connection
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therewith or accept a surrender thereof, without the prior written consent of Assignee,
which consent shall not be unreasonably withheld.
d. Assignor shall not collect any Rents and Profits more than thirty
(30) days in advance of the date on which they become due under the terms of any Lease.
e. Assignor shall not discount any future accruing Rents and Profits.
f. Assignor shall not consent to any assignment of any Lease, or any
subletting thereunder, whether or not in accordance with its terms, on any terms less
favorable than those that would reflect an arm’s length transaction in light of prevailing
market conditions (subject to the rent restrictions applicable to the Property), without the
prior written consent of Assignee.
g. Assignor shall not execute any further assignment of any of the
Rents and Profits or any interest therein or suffer or permit any such assignment to occur
by operation of law.
h. Assignor shall faithfully perform and discharge all obligations of
the lessor under each Lease, and shall give prompt written notice to Assignee of any
notice of Assignor’s default received from any Lessee or any other person and furnish
Assignee with a complete copy of said notice. Assignor shall appear in and defend, at no
cost to Assignee, any action or proceeding arising under or in any manner connected with
any Lease. If requested by Assignee, Assignor shall enforce each Lease and all remedies
available to Assignor against the Lessee in the case of default under the Lease by the
Lessee.
i. Except for residential leases entered into in the ordinary course of
business, Assignor shall give Assignee written notice immediately upon entering into a
Lease of any part of the Property and shall promptly upon request of Assignee provide to
Assignee a true and correct copy of each executed Lease. Upon written notice from
Assignee to Assignor, such Lease shall be deemed included in this Assignment as though
originally listed herein. At Assignee’s option, such notice may be recorded, without cost
to Assignor, in the Official Records of Los Angeles County, California, which notice
shall refer to this Assignment.
j. Except as otherwise provided in the Housing Agreement, Assignor
shall not hire, retain, or contract with any third party for property management services
with respect to the Property without the prior written approval of Assignee, at Assignee’s
option, of such party and the terms of its contract for management services.
k. Nothing herein shall be construed to impose any liability or
obligation on Assignee under or with respect to any Lease. Assignor shall indemnify,
defend, and hold Assignee, its officers, directors, agents, employees, and representatives
(the “Indemnitee(s)”) harmless from and against any and all liabilities, losses, and
damages that any Indemnitee may incur under any Lease or by reason of this
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Assignment, and of and from any and all claims and demands whatsoever that may be
asserted against any Indemnitee by reason of any alleged obligations to be performed or
discharged by Assignee under any Lease or this Assignment. Should any Indemnitee
incur any liability, loss, or damage under any Lease or by reason of this Assignment and
such liability, loss, or damage falls within the foregoing indemnification, Assignor shall
immediately upon demand reimburse such Indemnitee for the amount thereof together
with all costs and expenses and reasonable attorneys’ fees and court costs incurred by
such Indemnitee. All of the foregoing sums shall bear interest at the maximum rate
permitted by law from demand by Indemnitee until paid. Any Rents and Profits collected
by Assignee may be applied by Assignee, in its discretion, in satisfaction of any such
liability, loss, damage, claim, demand, cost, expense, or fees.
8. Assignor hereby grants to Assignee the following rights:
a. Upon a default under the Housing Agreement or any of the other
Loan documents, which is not cured within the time provided therefor, Assignee shall be
deemed to be the creditor of each Lessee in respect of any assignments for the benefit of
creditors and any bankruptcy, arrangement, reorganization, insolvency, dissolution,
receivership, or other debtor relief proceedings affecting such Lessee, without obligation
on the part of Assignee, however, to file timely claims in such proceedings or otherwise
pursue creditor’s rights therein.
b. Assignee shall have the right to assign Assignor’s right, title, and
interest in the Leases to any subsequent holder of the Note or any participating interest
therein or to any person acquiring title to all or any part of the Property through
foreclosure or otherwise. Any subsequent assignee shall have all the rights and powers
herein provided to Assignee.
c. Assignee shall have the right (but not the obligation), upon any
default under the Housing Agreement or any of the other Loan documents, which is not
cured within the time provided therefor, to take any action as Assignee may deem
necessary or appropriate to protect its security, including but not limited to appearing in
any action or proceeding and performing any obligations of the lessor under any Lease;
and Assignor agrees to pay, on demand, all costs and expenses, including without
limitation reasonable attorneys’ fees and court costs incurred by Assignee in connection
therewith, together with interest thereon at the rate of ten percent (10%) per annum.
d. Upon any default under this Assignment, the Housing Agreement
or any of the other Loan documents, which is not cured within the time provided therefor,
and without notice to or consent of Assignor, Assignee shall have the following rights
(none of which shall be construed to be obligations of Assignee):
i. Assignee shall have the right under this Assignment to use
and possess, without rental or charge, the Fixtures, Equipment, and Personal Property of
the Assignor located in or on the Property and used in the operation or occupancy thereof.
Assignee shall have the right to apply any of the Rents and Profits to pay installments due
ATTACHMENT 1
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ASSIGNMENT OF RENTS AND LEASES
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for Personal Property rented or purchased on credit, insurance premiums on Personal
Property, or other charges relating to Personal Property in or on the Property. However,
this Assignment shall not make Assignee responsible for the control, care, management,
or repair of the Property or any Personal Property or for the carrying out of any of the
terms or provisions of any Lease.
ii. Assignee shall have the right to apply the Rents and Profits
and any sums recovered by Assignee hereunder to the outstanding Indebtedness, as well
as to charges for taxes, insurance, improvements, maintenance, and other items relating to
the operation of the Property.
iii. Assignee shall have the right to take possession of the
Property, manage and operate the Property and Assignor’s business thereon, and to take
possession of and use all books of account and financial records of Assignor and its
property managers or representatives relating to the Property.
iv. Assignee shall have the right to execute new Leases of any
part of the Property, including Leases that extend beyond the term of the Deed of Trust.
v. Assignee shall have the right to cancel or alter any existing
Leases.
vi. Assignee shall have the irrevocable authority, as Assignor’s
attorney-in-fact, such authority being coupled with an interest, to sign the name of
Assignor and to bind Assignor on all papers and documents relating to the operation,
leasing and maintenance of the Property.
e. All of the foregoing rights and remedies of Assignee are
cumulative, and Assignee shall also have upon the occurrence of any such Default or
Event of Default all other rights and remedies provided under the Note, the Housing
Agreement, the Deed of Trust, or any other Loan document or other agreement between
Assignor and Assignee, or otherwise available at law or in equity or by statute.
9. Failure of Assignee to avail itself of any terms, covenants, or conditions of
this Assignment for any period of time or for any reason shall not constitute a waiver
thereof.
10. Notwithstanding any future modification of the terms of the Note, the
Deed of Trust, the Housing Agreement, or any other Loan document, this Assignment
and the rights and benefits hereby assigned and granted shall continue in favor of
Assignee in accordance with the terms of this Assignment.
11. This Assignment shall be binding upon and inure to the benefit of the
respective heirs, legal representatives, successors, and assigns of the parties hereto
(including without limitation in the case of Assignee, any third parties now or hereafter
acquiring any interest in the Indebtedness or other obligations of Assignor under the Note
ATTACHMENT 1
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ASSIGNMENT OF RENTS AND LEASES
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Assignment of Rents and Leases.doc [7/21/2010]
or Deed of Trust or a part thereof, whether by virtue of assignment, participation, or
otherwise). The words Assignor, Assignee, and Lessee, wherever used herein, shall
include the persons and entities named herein or in any Lease and designated as such and
their respective heirs, legal representatives, successors and assigns, provided that any
action taken by the named Assignee (or any successor designated as such by an
instrument recorded in the Official Records of Los Angeles County, California referring
to this Assignment) shall be sufficient for all purposes notwithstanding that Assignee may
have theretofore assigned or participated any interest in the obligation to a third party. All
words and phrases shall be taken to include the singular or plural number, and the
masculine, feminine, or neuter gender, as may fit the case.
12. Any change, amendment, modification, abridgment, cancellation, or
discharge of this Assignment or any term or provision hereof shall be invalid without the
written consent of Assignee.
13. Upon payment to Assignee of the full amount of the Indebtedness and the
full performance of other obligations secured hereby and by the Note and Deed of Trust,
as evidenced by a recorded satisfaction or release of the Deed of Trust, this Assignment
shall be void and of no further effect. In such event, Assignee shall cooperate with
Assignor to execute such instruments as may be reasonably necessary to remove the lien
of this instrument from the Official Records of Los Angeles County.
14. All notices, demands, approvals, and other communications provided for in
this Assignment shall be sufficiently given if: (i) personally delivered; (ii) delivered by
same day or overnight courier (acknowledged by receipt showing date and time of
delivery); or (iii) dispatched by registered or certified mail, postage prepaid, return receipt
requested, to the addresses set forth below:
If to Assignor: 4043 Irving Place Investors, LLC
6060 Center Drive, Suite 800
Los Angeles, CA 90045
Attention: George H. Mitsanas
If to Assignee: Culver City Redevelopment Agency
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Agency Executive Director
With a copy to: City Attorney’s Office
City of Culver City
9770 Culver Boulevard
Culver City, CA 90230-0507
Notices personally delivered or delivered by courier shall be effective upon receipt or
refusal to accept delivery. Mailed notices shall be effective on the earlier of (i) receipt of
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refusal to accept delivery, or (ii) noon on the second business day following deposit in the
United States mail.
15. This Assignment may be recorded in the Official Records of Los Angeles
County, California, and Assignor shall pay all fees, charges, costs, and expenses of such
recording.
16. If any provision hereof is determined to be illegal or unenforceable for any
reason, the remaining provisions hereof shall not be affected thereby.
17. This Assignment shall be governed by and construed in accordance with
the internal laws of the State of California, without regard to the principles governing
conflicts of law.
18. If Assignee should bring any action to enforce its rights hereunder at law
or at equity, Assignor shall reimburse Assignee for all reasonable attorneys’ fees and
costs expended in connection therewith.
19. This Assignment shall be subject to the terms and conditions set forth in
that certain Subordination Agreement, dated on or about the date hereof, by and among
Assignor, [bank] and Assignee, as the same may be amended, restated, supplemented or
modified from time to time.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURES
APPEAR ON FOLLOWING PAGE]
ATTACHMENT 1
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PAGE S-1
Assignment of Rents and Leases.doc
IN WITNESS WHEREOF, the undersigned Assignor has executed this Assignment as of
the date first above written.
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
By: Renaissance Holding Company, LLC,
a California limited liability company
Its: Manager
By: ________________________________
George H. Mitsanas
Its: Manager
By: ________________________________
Silvestre Gregory Gonzales
Its: Authorized Representative
ATTACHMENT 1
110State of California )
County of Los Angeles )
On ________________________________________ before me,
__________________, a Notary Public, personally appeared
______________________________, who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
State of California )
County of Los Angeles )
On ________________________________________ before me,
__________________, a Notary Public, personally appeared
______________________________, who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
ATTACHMENT 1
111
EXHIBIT A
LEGAL DESCRIPTION
The land referred to herein is situated in the State of California, County of Los Angeles,
and described as follows:
Real property in the City of Culver City, County of Los Angeles, State of California,
described as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per map
recorded in Book 21 Pages 190 and 191 of Maps, in the Office of the County Recorded of
said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all of the
above described real property, but without any right to penetrate, use of disturb the
surface of said property or any portion of said property within five hundred (500) feet of
the surface thereof as reserved in deed recorded August 30, 1985 as Instrument No. 85-
1016436 of Official Records.
APN: 4207-007-907
ASSIGNMENT OF RENTS AND LEASES
LEGAL DESCRIPTION
ATTACHMENT 1
112ASSIGNMENT OF AGREEMENTS
PAGE S-1
Assignment of Agreements.doc [7/21/2010]
ASSIGNMENT OF AGREEMENTS FROM 4043 IRVING PLACE INVESTORS,
LLC TO THE CULVER CITY REDEVELOPMENT AGENCY
1. FOR VALUE RECEIVED, the undersigned, 4034 IRVING PLACE
INVESTORS, LLC, a California limited liability company (“Developer”), by this
assignment dated July 26, 2010 for identification purposes only, assigns to THE
CULVER CITY REDEVELOPMENT AGENCY, a public body, corporate and politic,
(the “Assignee”), all of its right, title and interest in and to:
a. All architectural, design, engineering and development agreements, and
any and all amendments, modifications, supplements, addenda and general
conditions thereto (collectively, “Architectural Agreements”); and
b. All plans and specifications, shop drawings, working drawings,
amendments, modifications, changes, supplements, general conditions and
addenda thereto (collectively “Plans and Specifications”)
heretofore or hereafter entered into or prepared by any architect, engineer or other person
or entity (collectively “Architect”), for or on behalf of Developer in connection with the
construction of the Improvements on the Property described in Exhibit A attached. This
assignment is subject to the prior rights, if any, of a lender whose lien is senior to the
Deed of Trust held by Assignee. The Plans and Specifications, as of the date hereof, are
those which Developer has heretofore, or will hereafter deliver to Assignee. The
Architectural Agreements include, but are not limited to, the architectural contracts for
this project between Developer and [insert name of architect].
2. This ASSIGNMENT OF AGREEMENTS (“Assignment”) constitutes a present
and absolute assignment to Assignee as of the Effective Date, subordinate to a lender
whose lien is senior to the Deed of Trust held by Assignee (“Senior Lender”); provided,
however, Assignee confers upon Developer the right to enforce the terms of the
Architectural Agreements and Developer’s rights to the Plans and Specifications so long
as no Default or event which would constitute a Default after notice or the passage of
time, or both, has occurred under the Affordable Housing Agreement dated as of July 26,
2010 between Assignee and Developer (the “Housing Agreement”). Upon the
occurrence of a Default or event which would constitute a Default after notice or the
passage of time, or both, under the Housing Agreement, Assignee may, in its sole
discretion, give notice to Architect of its intent to enforce the rights of Developer under
the Architect Agreements and of its rights to the Plans and Specifications and may initiate
or participate in any legal proceedings respecting the enforcement of said rights.
Developer acknowledges that by accepting this Assignment, Assignee does not assume
any of Developer’s obligations under the Architectural Agreements or with respect to the
Plans and Specifications.
3. Developer represents and warrants to Assignee, as of the Effective Date, that: (a)
all Architectural Agreements entered into by Developer are in full force and effect and
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are enforceable in accordance with their terms and no default, or event which would
constitute a default after notice or the passage of time, or both, exists with respect to said
Architectural Agreements; (b) all copies of the Architectural Agreements and Plans and
Specifications delivered to Assignee are complete and correct; and (c) Developer has not
assigned any of its rights under the Architectural Agreements or with respect to the Plans
and Specifications except as expressly permitted by the Housing Agreement.
4. Developer agrees: (a) to pay and perform all obligations of Developer under the
Architectural Agreements; (b) to enforce the payment and performance of all obligations
of any other person or entity under the Architectural Agreements; (c) not to modify the
existing Architectural Agreements nor to enter into any future Architectural Agreements
without Assignee’s prior written approval except as otherwise expressly permitted in the
Housing Agreement; and (d) not to further assign (other than assignment in connection
with a loan which is senior in priority to Assignee’s assignment), for security or any other
purposes, its rights under the Architectural Agreements or with respect to the Plans and
Specifications without Assignee’s prior written consent.
5. This Assignment secures performance by Developer of all obligations of
Developer under the Housing Agreement. This Assignment is supplemented by the
provisions of the Housing Agreement and said provisions are incorporated herein by
reference.
6. The term “Housing Agreement” as used herein shall mean the Affordable
Housing Agreement dated as of July 26, 2010 between Developer and Assignee, as well
as any future amendments and implementation agreements between Developer and
Assignee which refer to this Assignment. Capitalized terms not otherwise defined herein
shall have the meaning set forth in the Housing Agreement.
7. This Assignment shall be governed by the internal laws of the State of California
without reference to the principles regarding conflict of laws, except to the extent that
Federal laws preempt the laws of the State of California, and Developer consents to the
jurisdiction of any Federal or State Court within the State of California having proper
venue for the filing and maintenance of any action arising hereunder. If Assignee should
bring any action to enforce its rights hereunder at law or at equity, Developer shall
reimburse Assignee for all reasonable attorneys’ fees and costs expended in connection
therewith.
8. This Assignment shall be binding upon and inure to the benefit of the heirs, legal
representatives, assigns, and successors-in-interest of Developer and Assignee; provided,
however, this shall not be construed and is not intended to waive any restrictions on
assignment, sale, transfer, mortgage, pledge, hypothecation or encumbrance by
Developer contained in the Housing Agreement.
9. The attached Architect’s/Engineer’s Consent, Schedule 1 and Exhibit A are
incorporated by reference.
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10. The Effective Date of this Assignment shall be the date it is executed by
Developer.
11. This Assignment shall be subject to the terms and conditions set forth in that
certain Subordination Agreement, dated on or about the date hereof, by and among
Developer, [insert bank] and Assignee, as the same may be amended, restated,
supplemented or modified from time to time.
IN WITNESS WHEREOF, the undersigned has executed this Assignment as of the date
set forth below.
Dated: ________________ “TRUSTOR”
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
By: Renaissance Holding Company, LLC,
a California limited liability company
Its: Manager
By: ________________________________
George H. Mitsanas
Its: Manager
By: ________________________________
Silvestre Gregory Gonzales
Its: Authorized Representative
ATTACHMENT 1
115
ARCHITECT’S CONSENT
The undersigned architect (“Architect”) hereby consents to the foregoing Assignment to
which this Architect’s Consent (“Consent”) is part, and acknowledges that there presently
exists no unpaid claims due to the Architect except as set forth on Schedule 1 attached
hereto, arising out of the preparation and delivery of the Plans and Specifications to
Developer and/or the performance of the Architect’s obligations under the Architectural
Agreements.
Architect agrees that if, at any time, Assignee, pursuant to its rights under the Housing
Agreement or the loan documents, elects to undertake or cause the completion of the
construction of the Improvements on any portion of the Property, in accordance with the
Plans and Specifications, and gives Architect written notice of such election; THEN, so
long as Architect has received, receives or continues to receive the compensation called
for under the Architectural Agreements, Assignee may, at its option, use and rely on the
Plans and Specifications for the purposes for which they were prepared, and Architect
will continue to perform its obligations under the Architectural Agreements for the
benefit and account of Assignee in the same manner as if performed for the benefit or
account of Developer in the absence of the Assignment.
Architect further agrees that, in the event of a breach by Developer of the Architectural
Agreements, or any agreement entered into with Architect in connection with the Plans
and Specifications, so long as Developer’s interest in the Agreements and Plans and
Specifications is assigned to Assignee, Architect will give written notice to Assignee of
such breach at the address shown below. Assignee shall have thirty (30) days from the
receipt of such written notice of default to remedy or cure said default. Nothing herein
shall require Assignee to cure said default or to undertake completion of the construction
of the Improvements.
Architect warrants and represents that it/he/she has no knowledge of any prior
assignment(s) of any interest in the Plans and Specifications and/or the Architectural
Agreements. Except as otherwise defined herein, the terms used herein shall have the
meanings given them in the Assignment.
Dated as of the date set forth below.
[insert name of architect]
Date: _______________, 2011 By: _______________________
Its:
[insert address]
ASSIGNMENT OF AGREEMENTS
ARCHITECT’S CONSENT
Assignment of Agreements.doc [7/21/2010]
ATTACHMENT 1
116
ASSIGNMENT OF AGREEMENTS
ARCHITECT’S CONSENT
Assignment of Agreements.doc [7/21/2010]
Assignee’s Address:
Culver City Redevelopment Agency
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Agency Executive Director
With a copy to: City Attorney’s Office
City of Culver City
9770 Culver Boulevard
Culver City, CA 90230-0507
ATTACHMENT 1
117
SCHEDULE OF UNPAID CLAIMS
Schedule 1 to Assignment of Agreements dated for identification purposes only, July 26,
2010 between 4043 IRVING PLACE INVESTORS, LLC, as Developer and THE
CULVER CITY REDEVELOPMENT AGENCY, as Assignee.
ASSIGNMENT OF AGREEMENTS
ARCHITECT’S CONSENT
Assignment of Agreements.doc
ATTACHMENT 1
118
PROPERTY DESCRIPTION
Exhibit A to Assignment of Agreements dated for identification purposes only July 26,
2010, between 4043 IRVING PLACE INVESTORS, LLC, as Developer and THE
CULVER CITY REDEVELOPMENT AGENCY, as Assignee.
The land referred to herein is situated in the State of California, County of Los Angeles,
and described as follows:
Real property in the City of Culver City, County of Los Angeles, State of California,
described as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per map
recorded in Book 21 Pages 190 and 191 of Maps, in the Office of the County Recorded of
said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all of the
above described real property, but without any right to penetrate, use of disturb the
surface of said property or any portion of said property within five hundred (500) feet of
the surface thereof as reserved in deed recorded August 30, 1985 as Instrument No. 85-
1016436 of Official Records.
APN: 4207-007-907
ASSIGNMENT OF AGREEMENTS
LEGAL DESCRIPTION
Assignment of Agreements.doc [7/21/2010]
ATTACHMENT 1
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ENVIRONMENTAL INDEMNITY BY 4043 IRVING PLACE INVESTORS, LCC FOR
THE BENEFIT OF THE CULVER CITY REDEVELOPMENT AGENCY
THIS ENVIRONMENTAL INDEMNITY (this “Indemnity”), dated for identification
purposes only July __, 2010, and made by 4034 IRVING PLACE INVESTORS, LLC, a
California limited liability company (referred to as “Borrower”), whose address for purposes of
giving notices is 6060 Center Drive, Suite 800, Los Angeles, CA 90045 , in favor of THE
CULVER CITY REDEVELOPMENT AGENCY, a public body corporate and politic (the
“Agency”), whose address for purposes of giving notice is 9770 Culver Boulevard, Culver City,
CA 90230-0507.
WITNESSETH
WHEREAS, Borrower is the owner of the real property in the City of Culver City,
California described on Exhibit “A” attached hereto and made a part hereof, and the
improvements thereon (collectively referred to as the “Property”);
WHEREAS, Borrower and the Agency, entered into that certain Affordable Housing
Agreement, dated as of July 26, 2010 (the “Housing Agreement”), pursuant to which the
Agency agreed to make a loan to Borrower for the purpose of constructing a 28-unit multifamily
rental housing project thereon (the “Loan”) (the Housing Agreement and the documents and
instruments referred to therein which are being executed by Borrower concurrently herewith are
referred to collectively as the “Loan Documents”);
WHEREAS, Borrower has agreed to execute and deliver to the Agency this Indemnity to
induce the Agency to make the Loan.
NOW, THEREFORE, in consideration of the foregoing and in consideration of the
mutual agreements hereinafter set forth, Borrower hereby agrees with the Agency as follows:
1. DEFINITIONS
For the purpose of this Indemnity, “Hazardous Materials” or “Hazardous Substances”
shall include, but not be limited to, oil, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar
materials, including, without limitation, any substances defined as “extremely hazardous
substances,” “hazardous substances,” “hazardous materials,” “hazardous waste” or “toxic
substances” in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, including the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. Sections 9601 et seq. (“CERCLA”); the Hazardous Materials Transportation Act, 49
U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Sections 6901, et seq.; the Toxic Substances Control Act, as amended, 15
U.S.C. Section 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
Federal Water Pollution Control Act, as emended, 33 U.S.C. Section 1251 et seq.; the
Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651; the Emergency
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Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the
Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.; and those substances defined as
“hazardous waste” in Section 25117 of the California Health and Safety Code, as “infectious
waste” in Section 25117.5 of the California Health and Safety Code, or as “hazardous
substances” in Section 25316 of the California Health and Safety Code or “hazardous materials”
as defined in Section 353 of the California Vehicle Code; and in the regulations adopted and
orders and publications promulgated pursuant to said laws. Such term shall not include
household consumer products or similar products readily available in the retail markets and
utilized in the quantity and manner commonly utilized in the occupancy, ownership or
development of multifamily rental real estate projects similar to the Project. Other capitalized
terms used in this Indemnity shall have the meanings ascribed to them in the Housing Agreement
with the same force and effect as if set forth in full below.
2. COVENANTS AND INDEMNITY
The following covenants, and indemnities are hereby given and made by Borrower:
2.1 Covenants.
(a) Borrower covenants that it will strictly comply with any and all laws,
regulations, and/or orders which may be promulgated from time to time relating to Hazardous
Materials (“Hazardous Materials Laws”), to immediately take, at Borrower’s sole expense, all
remedial action required by any Hazardous Materials Law or any judgment, consent decree,
settlement or compromise in respect to any Hazardous Materials Claim (as defined herein
below), and to keep the Property free of any lien imposed pursuant to any Hazardous Materials
Law or in relation to any Hazardous Materials Claim.
(b) Borrower covenants that the Property will not, while Borrower is the
owner of any portion thereof, be used for any activities involving, directly or indirectly, the use,
generation, treatment, storage, release, transportation, presence, discharge or disposal of any
Hazardous Materials, except for de minimis quantities used at the Property in strict compliance
with all Hazardous Materials Laws and required in connection with the routine construction,
operation and maintenance of the Property.
(c) The Agency shall have the right, at any time, to conduct an environmental
audit of the Property at the Agency’s expense, unless Hazardous Materials are found in
quantities or conditions that violate the Hazardous Materials Laws, then at Borrower’s sole cost
and expense, and Borrower shall cooperate in the conduct of any such environmental audit.
Other than in an emergency, such audit shall be conducted only after prior notice has been given
to Borrower and only in the presence of a representative of Borrower. Borrower shall give the
Agency and its agents and employees access to the Property to remove, or otherwise to mitigate
the effects of, Hazardous Materials and Borrower shall not unreasonably delay or condition such
access.
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(e) Borrower shall not install, or permit to be installed, on the Property friable
asbestos or any substance containing asbestos and deemed hazardous by any Hazardous
Materials Laws, and, with respect to any such material currently present in the Property,
Borrower shall promptly either (i) remove or cause to be removed any material that such
Hazardous Materials Laws deem hazardous and require to be removed, or (ii) otherwise comply
with such Hazardous Materials Laws, all at Borrower’s sole cost and expense. If Borrower shall
fail to so do within the cure period permitted under applicable law, regulation, or order, the
Agency may do whatever is necessary to eliminate said substances from the premises or to
otherwise comply with all Hazardous Materials Laws, and the costs thereof shall be added to the
Obligations (as hereinafter defined) of Borrower under this Section 2.
(f) Borrower shall immediately advise the Agency in writing of any of the
following: (i) any pending or threatened claim against Borrower or the Property by any
governmental entity or agency or by any other person or entity relating to Hazardous Materials
or pursuant to the Hazardous Materials Laws (“Hazardous Materials Claims”), (ii) any known
condition or occurrence on the Property that (A) results in noncompliance by Borrower with any
Hazardous Materials Laws, (B) could reasonably be anticipated to cause the Property to be
subject to any restrictions on the ownership, occupancy, use or transferability of the Property
under any Hazardous Materials Law, or (C) could reasonably be anticipated to form the basis of
a Hazardous Materials Claim against the Property or Borrower.
2.2 Indemnity. Borrower hereby agrees to defend, indemnify, protect, and hold
harmless the Agency and its members, officers, officials, employees, agents, representatives,
servants, contractors, successors and assigns from and against any and all damages, losses,
liabilities, obligations, penalties, claims (including, without limitation, any third party tort
claims), litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements, or
expenses (including, without limitation, attorneys’ and experts’ fees and disbursements) of any
kind or of any nature whatsoever, whether foreseeable or unforeseeable, (collectively, the
“Obligations”) which may at any time be imposed upon, incurred by or asserted or awarded
against the Agency as a direct or indirect consequence of:
(a) The presence of any Hazardous Materials on, in, under, or affecting all or
any portion of the Property or any surrounding areas;
(b) The breach of any covenant made by Borrower in Section 2.1 hereof; or
(c) The enforcement by the Agency of any of the provisions of this Section
2.2 or the assertion by Borrower of any defense to its obligations hereunder.
3. BORROWER’S UNCONDITIONAL OBLIGATIONS
3.1 Unconditional Obligations. Borrower hereby agrees that the Obligations will be
paid and performed strictly in accordance with the terms of this Indemnity, regardless of any
law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of the Loan
Documents or affecting any of the rights of the Agency with respect thereto. The obligations of
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Borrower hereunder shall be absolute and unconditional irrespective of, and Borrower waives
any defense based upon,
(a) The validity, regularity, or enforceability of the Loan Documents or any
other instrument or document executed or delivered in connection therewith;
(b) Any alteration, amendment, modification, release, termination, or
cancellation of any of the Loan Documents, or any change in the time, manner, or place of
payment of, or in any other term in respect of, all or any of the obligations of Borrower contained
in any of the Loan Documents;
(c) Any extension of the maturity of the Loan or any waiver of, or consent to
any departure from, any provision contained in any of the Loan Documents;
(d) Any exculpatory provision in any of the Loan Documents limiting the
Agency’s recourse to property encumbered by the Deed of Trust securing the Loan, or to any
other security, or limiting the Agency’s rights to a deficiency judgment against Borrower;
(e) Any exchange, addition, subordination, or release of, or nonperfection of
any lien on or security interest in, any collateral for the Loan, or any release, amendment, waiver
of, or consent to any departure from any provision of, any other surety or guarantee given in
respect of the Loan;
(f) The insolvency or bankruptcy of Borrower or Borrower’s members or of
any indemnitor or guarantor under any other indemnity or guarantee given in respect of the
Loan; or
(g) Any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Borrower, Borrower’s members, or any other indemnitor or
guarantor with respect to the Loan or any or all of the Obligations.
3.2 Continuation. The term of this Indemnity will continue until such time as no legal
action can be successfully brought against the Agency due to applicable statutes of limitation.
This Indemnity (a) is a continuing indemnity and shall remain in full force and effect until the
satisfaction in full of all of the Obligations (notwithstanding the payment in full of the Loan or
the release or other extinguishment of the Deed of Trust, or any other security for the Loan); and
(b) shall continue to be effective or shall be reinstated, as the case may be, if at any time any
payment of any of the Obligations is rescinded or must otherwise be returned by the Agency
upon the insolvency, bankruptcy, or reorganization of Borrower, Borrower’s memberes or
otherwise, all as though such payment had not been made.
3.3 Survival. Borrower’s duty to indemnify shall survive any judicial or non-judicial
foreclosure under the Agency Deed of Trust or transfer of the Property in lieu thereof, the release
and reconveyance or cancellation of the Agency Deed of Trust, and the satisfaction of all of
Borrower’s obligations under the Loan Documents.
ATTACHMENT 1
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Environmental Indemnity.doc [7/21/2010]
4. WAIVER
Borrower acknowledges that possible defenses to the enforceability of the Obligations
may presently exist and/or may arise hereafter and as part of the Agency’s consideration for
entering into the Housing Agreement, they have specifically bargained for the waiver and
relinquishment by Borrower of all such defenses. Borrower agrees that it has had the opportunity
to seek and receive legal advice from skilled legal counsel of its choosing and represents and
confirms that Borrower is fully informed regarding, and thoroughly understands, the nature of
such possible defenses, the circumstances under which they may arise, the benefits that they
might confer upon Borrower and the legal consequences to Borrower of waiving such defenses.
Borrower makes this Indemnity with the intent that this Indemnity and all of the waivers herein
shall each and all be fully enforceable by the Agency and that the Agency is induced to enter into
the Housing Agreement in material reliance upon such presumed full enforceability. Without
limitation to the foregoing, Borrower hereby waives the following:
(a) Promptness and diligence;
(b) Notice of acceptance and notice of the incurrence of any Obligation by Borrower;
(c) Notice of any action taken by the Agency, Borrower, or any other interested party
under any Loan Document or under any other agreement or instrument relating thereto;
(d) All other notices, demands, and protests, and all other formalities of every kind, in
connection with the enforcement of the Obligations, the omission of or delay in which, but for
the provisions of this Section 4, might constitute grounds for relieving Borrower of its
Obligations hereunder;
(e) To the fullest extent allowed by law, the right to a trial by jury with respect to any
dispute arising under, or relating to, this Indemnity;
(f) Any requirement that the Agency protect, secure, perfect, or insure any security
interest or lien in or on any property subject thereto;
(g) Any requirement that the Agency exhaust any right or take any action against
Borrower or any other person or collateral; and
(h) Any defense that may arise by reason of:
(1) The incapacity, lack of authority, death or disability of, or revocation
hereof by, any person or persons;
(2) The failure of the Agency to file or enforce any claim against the estate (in
probate, bankruptcy, or any other proceedings) of any person or persons; or
(3) Any defense based upon an election of remedies by the Agency including,
without limitation, an election to proceed by nonjudicial foreclosure or which
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destroys or otherwise impairs the subrogation rights of Borrower or any other
right of Borrower to proceed against a guarantor by the operation of Section 580d
of the California Code of Civil Procedure or otherwise.
5. NOTICES
Any notice, demand, statement, request, or consent made hereunder shall be in writing
and shall be personally served, mailed by first-class registered mail, return receipt requested, to
the address set forth in the first paragraph of this Indemnity, above, or given by electronic
facsimile (“fax”) transmission to the fax numbers stated below, with confirmations mailed by
first class registered mail, return receipt requested to the address set forth above, of the party to
whom such notice is to be given (or to such other address as the parties hereto, shall designate in
writing):
In the case of the Agency: [insert fax]
In the case of Borrower: [insert fax]
Any notice that is transmitted by fax transmission followed by delivery of a “hard” copy, shall be
deemed delivered upon its transmission; any notice that is personally delivered (including by
means of professional messenger service, courier service such as United Parcel Service or
Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of
receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt
required shall be deemed received on the date of receipt thereof.
6. MISCELLANEOUS
6.1 Borrower shall make any payment required to be made hereunder in lawful
money of the United States of America, and in same day funds, to the Agency, as applicable, at
its address specified in the first paragraph hereof.
6.2 No amendment of any provision of this Indemnity shall be effective unless it is in
writing and signed by Borrower and the Agency, and no waiver of any provision of this
Indemnity, and no consent to any departure by Borrower from any provision of this Indemnity,
shall be effective unless it is 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.
6.3 No failure on the part of the Agency to exercise, and no delay in exercising, any
right hereunder or under any Loan Document shall operate as a waiver hereof or thereof, nor
shall any single or partial exercise of any right preclude any other or further exercise thereof or
the exercise of any other right. The rights and remedies of the Agency provided herein and in the
Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or
remedies provided by law. The rights of the Agency hereunder or under any Loan Document
against any party thereto are not conditional or contingent on any attempt by the Agency to
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exercise any of its rights hereunder or under any other Loan Document against such party or
against any other person or collateral.
6.4 If any provision of this Indemnity shall be determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable, then that provision shall, as to such
jurisdiction, be deemed ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof and without affecting the validity or enforceability of
such provision in any other jurisdiction.
6.5 This Indemnity shall (a) be binding upon Borrower, and Borrower’s successors
and assigns; and (b) inure, together with all rights and remedies of the Agency hereunder, to the
benefit of the Agency, its directors, officers, employees, and agents, any successors to the
Agency’s interest in the Property, any other person who acquires any portion of the Property at a
foreclosure sale or otherwise through the exercise of the Agency’s rights and remedies under the
Loan Documents, any successors to any such person, and all directors, officers, employees, and
agents of all of the aforementioned parties. Without limiting the generality of clause (b) of the
immediately preceding sentence, the Agency may, subject to, and in accordance with, the
provisions of the Loan Documents, assign or otherwise transfer all or any portion of its rights
and obligations under any Loan Document, to any other person, and such other person shall
thereupon become vested with all of the rights and obligations in respect thereof that were
granted to the Agency herein or otherwise. None of the rights or obligations of Borrower
hereunder may be assigned or otherwise transferred without the prior written consent of the
Agency.
6.6 Borrower hereby (a) irrevocably submits to the jurisdiction of any California or
federal court sitting, in each instance, in Los Angeles County in any action or proceeding arising
out of or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum
non conveniens or similar rules or doctrines, and (c) irrevocably agrees that all claims in respect
of any such action or proceeding may be heard and determined in such California or federal
court. Borrower irrevocably consents to the service of any and all process which may be required
or permitted in any such action or proceeding to the address specified in the first paragraph of
this Indemnity or in any other manner provided by law. Borrower agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in any other jurisdiction
by suit on the judgment or in any other manner provided by law.
6.7 The title of this document and the captions used herein are inserted only as a
matter of convenience and for reference and shall in no way define, limit, or describe the scope
or the intent of this Indemnity or any of the provisions hereof.
6.8 This Indemnity shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of California applicable to contracts made and to be
performed therein without regard to the principles regarding conflicts of law, except to the extent
that the laws of the United States preempt the laws of the State of California.
6.9 This Indemnity may be executed in any number of counterparts, each of which
shall constitute an original and all of which together shall constitute one agreement.
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IN WITNESS WHEREOF, Borrower has duly executed this Indemnity as of the date set
forth below.
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
By: Renaissance Holding Company, LLC, a
California limited liability company
Its: Manager
Date: ____________________ By: _________________________
George H. Mitsanas
Its: Manager
Date: ____________________ By:__________________________
Silvestre Gregory Gonzales
Its: Authorized Representative
ATTACHMENT 1
127ENVIRONMENTAL INDEMNITY
EXHIBIT A – LEGAL DESCRIPTION
Environmental Indemnity.doc [7/21/2010]
EXHIBIT A
LEGAL DESCRIPTION
The land referred to herein is situated in the State of California, County of Los Angeles, and
described as follows:
Real property in the City of Culver City, County of Los Angeles, State of California, described
as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per map recorded
in Book 21 Pages 190 and 191 of Maps, in the Office of the County Recorded of said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all of the above
described real property, but without any right to penetrate, use of disturb the surface of said
property or any portion of said property within five hundred (500) feet of the surface thereof as
reserved in deed recorded August 30, 1985 as Instrument No. 85-1016436 of Official Records.
APN: 4207-007-907
ATTACHMENT 1
128B. SEND ACKNOWLEDGMENT TO: (Name and Address)
FILING OFFICE COPY — NATIONAL UCC FINANCING STATEMENT (FORM UCC1) (REV. 07/29/98)
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) - do not abbreviate or combine names
4. This FINANCING STATEMENT covers the following collateral:
COUNTRY
5. ALTERNATIVE DESIGNATION [if applicable]: NON-UCC FILING AG. LIEN SELLER/BUYER BAILEE/BAILOR CONSIGNEE/CONSIGNOR LESSEE/LESSOR
This FINANCING STATEMENT is to be filed [for record] (or recorded) in the REAL
ESTATE RECORDS. Attach Addendum
6.
All Debtors Debtor 1 Debtor 2
Check to REQUEST SEARCH REPORT(S) on Debtor(s)
[ADDITIONAL FEE]
7.
[if applicable] [optional]
OR
SUFFIX
POSTAL CODE CITY
FIRST NAME
2c. MAILING ADDRESS
OR
OR
2d. TAX ID #: SSN OR EIN ADD'L INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION 2f. JURISDICTION OF ORGANIZATION
3b. INDIVIDUAL'S LAST NAME FIRST NAME
POSTAL CODE 3c. MAILING ADDRESS
1a. ORGANIZATION'S NAME
2b. INDIVIDUAL'S LAST NAME
CITY
MIDDLE NAME
STATE
2g. ORGANIZATIONAL ID #, if any
MIDDLE NAME
STATE
SUFFIX
COUNTRY
1d. TAX ID #: SSN OR EIN
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b) - do not abbreviate or combine names
POSTAL CODE CITY 1c. MAILING ADDRESS
ADD'L INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION 1f. JURISDICTION OF ORGANIZATION
NONE
1b. INDIVIDUAL'S LAST NAME
2a. ORGANIZATION'S NAME
FIRST NAME MIDDLE NAME
STATE
1g. ORGANIZATIONAL ID #, if any
SUFFIX
COUNTRY
NONE
3a. ORGANIZATION'S NAME
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert only one secured party name (3a or 3b)
8. OPTIONAL FILER REFERENCE DATA
ATTACHMENT 1
129
UCC-1 ATTACHMENT
EXHIBIT A – LEGAL DESCRIPTION
UCC1 ATTACHMENT.DOC [7/21/2010]
EXHIBIT “A”
LEGAL DESCRIPTION
All of the following real property in the City of Culver City, Los Angeles County, State of
California (the “Property”):
Real property in the City of Culver City, County of Los Angeles, State of California, described
as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per map recorded
in Book 21 Pages 190 and 191 of Maps, in the Office of the County Recorded of said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all of the above
described real property, but without any right to penetrate, use of disturb the surface of said
property or any portion of said property within five hundred (500) feet of the surface thereof as
reserved in deed recorded August 30, 1985 as Instrument No. 85-1016436 of Official Records.
APN: 4207-007-907
ATTACHMENT 1
130
UCC-1 ATTACHMENT
SCHEDULE A – COLLATERAL DESCRIPTION
UCC1 ATTACHMENT.DOC [7/21/2010]
SCHEDULE “A”
Item 4. Collateral Description
All buildings, structures and improvements of every nature whatsoever now or hereafter situated
on the Property; and
Together with the rents, issues and profits thereof; and together with all buildings and
improvements of every kind and description now or hereafter erected or placed thereon, and all
fixtures, including but not limited to all gas and electric fixtures, engines and machinery,
radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers,
stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and
other plumbing and heating fixtures, mantles, cabinets, refrigerating plant and refrigerators,
whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings,
screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings
shall to the extent permitted by law be deemed to be permanently affixed to and a part of the
realty; and
Together with all building materials and equipment now or hereafter delivered to said premises
and intended to be installed therein; and
Together with all plans, drawings, specifications, etc., and articles of personal property now or
hereafter attached to or used in and about the building or buildings now erected or hereafter to be
erected on the Property which are necessary to the completion and comfortable use and
occupancy of such building or buildings for the purposes for which they were or are to be
erected, including all other goods and chattels and personal property as are ever used or
furnished in operating a building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals or replacements thereof or articles in substitution
therefor, whether or not the same are, or shall be attached to said building or buildings in any
manner.
ATTACHMENT 1
131
NOTICE OF AFFORDABILITY RESTRICTIONS
PAGE 1
Notice of Affordability Restrictions.doc [7/21/2010]
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CULVER CITY REDEVELOPMENT AGENCY
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Executive Director
(Space Above This Line for Recorder’s Office Use Only)
(Exempt from Recording Fee per Gov. Code §27383)
APN: 4207-007-907
NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF
PROPERTY
NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code
Section 33334.3(f) as amended effective January 1, 2008, the Culver City
Redevelopment Agency is recording this Notice of Affordability Restrictions on
Transfer of Property (hereinafter the “Notice”) with regard to the property located
at 4043 Irving Place, Culver City, California and more particularly described in
Exhibit “A” attached hereto (the “Property”).
The Property is subject to the Agreement Containing Covenants Affecting
Real Property (Including Affordable Housing Restrictions) (the “Agreement
Containing Covenants”) recorded concurrently herewith, which restricts the use of
the Property as follows:
(1) One (1) one-bedroom and two (2) two-bedroom units
shall be rented exclusively to Low Income households at an
Affordable Rent as provided in California Health and Safety Code
Section 50053.
(2) Four (4) one-bedroom units and five (5) two-bedroom
units shall be rented exclusively to Moderate Income households at an
ATTACHMENT 1
132
NOTICE OF AFFORDABILITY RESTRICTIONS
PAGE 2
Notice of Affordability Restrictions.doc [7/21/2010]
Affordable Rent as provided in California Health and Safety Code
Section 50053.
The maximum incomes of eligible tenants shall be determined on the
basis of the income limits for Low Income and Moderate Income
households in Los Angeles County, published approximately annually
by the California Department of Housing and Community
Development (“HCD”). If HCD discontinues publishing such income
limits, the term “Low Income” shall mean a household income that
does not exceed 80% of the area median income, adjusted for family
size and the term “Moderate Income” shall mean a household income
that does not exceed 120% of the area median income, adjusted for
family size.
Any rents charged to a tenant shall not exceed rents that are affordable
to Low Income and Moderate Income Households, as applicable. The
maximum rents, including a reasonable utility allowance for utilities
and services (excluding telephone) to be paid by Low Income and
Moderate Income Households are as follows:
(i) In the case of any Low Income Household, the maximum
rent shall be a rent that does not exceed 30 percent of sixty percent
(60%) of the area median income adjusted for household size
appropriate to the unit, as determined by the California Department of
Housing and Community Development.
(ii) In the case of any Moderate Income Household, the
maximum rent shall be a rent that does not exceed 30 percent of one
hundred ten percent (110%) of the area median income adjusted for
household size appropriate to the unit, as determined by the California
Department of Housing and Community Development.
The affordability restrictions imposed on the Site by the Regulatory
Agreement are scheduled to expire on the date that is fifty-five (55) years after the
recordation of the Release of Construction Covenants for the construction of the
Improvements on the Property.
ATTACHMENT 1
133
NOTICE OF AFFORDABILITY RESTRICTIONS
PAGE 3
Notice of Affordability Restrictions.doc [7/21/2010]
This Notice is recorded for the purpose of providing notice only and in no
way modifies the provisions of the Agreement Containing Covenants.
“AGENCY”
CULVER CITY REDEVELOPMENT
AGENCY, a public body, corporate and
politic
_____________________________
Executive Director
ATTEST:
_____________________________
Agency Secretary
APPROVED AS TO FORM:
_____________________________
General Counsel
_______________________________
KANE, BALLMER & BERKMAN
Agency Special Counsel
ATTACHMENT 1
134
CONSENT TO RECORDATION
4043 Irving Place Investors, LLC (“Owner”), owner of the fee interest in the
real property legally described in Exhibit “A” hereto, hereby consents to the
recordation of the foregoing Notice of Affordability Restrictions on Transfer
of Property against said real property.
4043 IRVING PLACE INVESTORS, LLC,
a California limited liability company
By: Renaissance Holding Company, LLC,
a California limited liability company
Its: Manager
By: ________________________________
George H. Mitsanas
Its: Manager
By: ________________________________
Silvestre Gregory Gonzales
Its: Authorized Representative
ASSIGNMENT OF AGREEMENTS
PAGE S-1
Notice of Affordability Restrictions.doc [7/21/2010]
ATTACHMENT 1
135
State of California )
County of Los Angeles )
On ________________________________________ before me, __________________,
a Notary Public, personally appeared ______________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
State of California )
County of Los Angeles )
On ________________________________________ before me, __________________,
a Notary Public, personally appeared ______________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
ATTACHMENT 1
136
Exhibit “A”
The land referred to herein is situated in the State of California, County of Los
Angeles, and described as follows:
Real property in the City of Culver City, County of Los Angeles, State of
California, described as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per
map recorded in Book 21 Pages 190 and 191 of Maps, in the Office of the County
Recorded of said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all
of the above described real property, but without any right to penetrate, use of
disturb the surface of said property or any portion of said property within five
hundred (500) feet of the surface thereof as reserved in deed recorded August 30,
1985 as Instrument No. 85-1016436 of Official Records.
APN: 4207-007-907
ATTACHMENT 1
137
RELEASE OF CONSTRUCTION COVENANTS
PAGE S-1
Release of Construction Covenants.doc [7/21/2010]
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CULVER CITY REDEVELOPMENT AGENCY
9770 Culver Boulevard
Culver City, CA 90230-0507
Attn: Executive Director
(Space Above This Line for Recorder’s Office Use Only)
(Exempt from Recording Fee per Gov. Code §27383)
APN: 4207-007-907
RELEASE OF CONSTRUCTION COVENANTS BY THE CULVER CITY
REDEVELOPMENT AGENCY TO 4043 IRVING PLACE INVESTORS, LCC
WHEREAS, 4043 IRVING PLACE INVESTORS, LLC, a California limited liability
company (the “Developer”) is the owner of that certain real property situated in the City of
Culver City, California described in Exhibit “A” which is attached hereto and made a part hereof
(the “Property”), and has agreed to construct the improvements thereon (the “Improvements”);
and
WHEREAS, the Agreement Containing Covenants Affecting Real Property (Including
Affordable Housing Restrictions) entered into by and between the Culver City Redevelopment
Agency (the “Agency”) and the Developer and recorded in the Official Records of Los Angeles
County, California on _______________, 2010 as Instrument No. __________ (the “Agreement
Containing Covenants”) obligates the Developer and its successors or assigns to construct the
Improvements in accordance with the Affordable Housing Agreement (“Housing Agreement”)
dated as of July __, 2010 by and between the Agency and the Developer.
WHEREAS, pursuant to the Housing Agreement, the Agency has agreed to furnish the
Developer with a Release of Construction Covenants (“Release”) upon the completion of the
construction of the Improvements, and such certificate is to be in such form as to permit it to be
recorded in the Official Records of Los Angeles County; and
WHEREAS, the Housing Agreement states that the Release shall be conclusive
determination of satisfactory completion of the construction of the Improvements as required by
the Housing Agreement; and
WHEREAS, the Agency has determined that the construction of the Improvements on the
Property as required by the Housing Agreement has been satisfactorily completed by Developer.
NOW THEREFORE, it is hereby acknowledged and agreed by the parties hereto that:
ATTACHMENT 1
138
RELEASE OF CONSTRUCTION COVENANTS
PAGE S-1
Release of Construction Covenants.doc [7/21/2010]
1. The Agency hereby certifies that the construction of the Improvements on the
Property has been fully and satisfactorily performed and completed as required by the Housing
Agreement and the Agreement Containing Covenants.
2. Nothing contained in this instrument shall modify any provisions of the Housing
Agreement or the Agreement Containing Covenants.
3. This Release shall constitute a conclusive determination of satisfaction of the
agreements and covenants contained in the Housing Agreement requiring the Developer, and its
successors and assigns, to construct the improvements and the dates for the beginning and
completion thereof.
“AGENCY”
CULVER CITY REDEVELOPMENT AGENCY, a
public body corporate and politic
Date: _____________________ By: _________________________________
Executive Director
ATTEST:
By: _________________________________
Agency Secretary
APPROVED AS TO FORM:
By: _________________________________
General Counsel
By: _________________________________
KANE, BALLMER & BERKMAN
Agency Special Counsel
ATTACHMENT 1
139
RELEASE OF CONSTRUCTION COVENANTS
LEGAL DESCRIPTION
Release of Construction Covenants.doc [7/21/2010]
EXHIBIT A
LEGAL DESCRIPTION OF SITE
The land referred to herein is situated in the State of California, County of Los Angeles, and
described as follows:
Lots 3, 20 and 21, in Block 21 of Tract No. 1775, in the City of Culver City, as per map recorded
in Book 21 Pages 190 and 191 of Maps, in the Office of the County Recorded of said County.
EXCEPT therefrom all oil, gas, and other hydrocarbon substances in and under all of the above
described real property, but without any right to penetrate, use of disturb the surface of said
property or any portion of said property within five hundred (500) feet of the surface thereof as
reserved in deed recorded August 30, 1985 as Instrument No. 85-1016436 of Official Records.
APN: 4207-007-907
ATTACHMENT 1
140
State of California )
County of Los Angeles )
On ________________________________________ before me, __________________,
a Notary Public, personally appeared ______________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
State of California )
County of Los Angeles )
On ________________________________________ before me, __________________,
a Notary Public, personally appeared ______________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature_______________________________________ (Seal)
ATTACHMENT 1
141
From: Booby2 [mailto:boopy2@ca.rr.com]
Sent: Friday, July 16, 2010 12:14 PM
To: Tipton, Todd
Cc: Redevelopment
Subject: Slow Growth?
I have lived on Irving Place for 75 years and have always been afraid this would eventually happen.
Instead of trying to preserve the residential areas as single family homes, you are now starting the
eventual creep up the street to apartments. You do this under the guise of affordable housing for low
income folks. In truth we all know what this means. More traffic on Irving Place, more impact on the local
school, and more head aches for the Irving Place home owners. With the investment that CC has made
in the very close by down town area, I would think that you would want to preserve this area as up scale.
Leave Irving Place alone! We have done quite well without you for the last 100 years. These so called
"investors" are only interested in profit and could care less about the people who live on and love Irving
Place. We don't need redeveloping, we are already well developed.
This is not a blighted area that needs help.
I assume you have already made all of you back room deals and there is nothing that the people who
have lived on and cared for Irving Place can do. You are just like the Federal and State governments.
You will do what you do no matter what the people think or want. No fancy word like "Investors group"
changes anything. How about "money hungry with no vested interest in the home owners" instead.
What is the motive behind this? More taxes for the City of Culver City? How about a city that needs less
taxes because they don't over spend and are fiscally responsible to the citizens. We don't need to be a
fancy city, just a city that cares about the people and their dream of owning a good home and are willing
to pay for it, care for it, and stay long term because Culver City is a good place to live.
My father served on the Planning Commission and on the City Council in the 1940's. I grew up knowing
all of our city father's of that time. None of them could imagine what you are planning for the home
owners and our fair city. They would be among the first to show their contempt.
Ann Douglas
boopy2@ca.rr.com
CORRESPONDENCE
ATTACHMENT 2
142From: Meghan Sahli-Wells [meghan@ccnan.org]
Sent: Monday, July 19, 2010 3:58 PM
To: Armenta, Chris; Mehaul O'Leary; Weissman, Andrew; Malsin, Scott; Jeffery
Cooper
Cc: Blumenfeld, Sol; Tipton, Todd; Steve Hadland; Andre Herndon; Gary Walker;
Judith Martin-Straw; Ari Noonan
Subject: Community position on the proposed affordable housing component for 4043
Irving Place
July 19, 2010
Dear Redevelopment Agency Members,
The Downtown Neighborhood Association wishes to advise you of our
position on the affordable housing component for 4043 Irving Place.
The DNA supports the development of affordable housing in Culver City.
Before appropriating approximately $6 million of redevelopment funds, as well
as an undisclosed amount of grant money for this project, we ask that the
Agency perform its due diligence and make comprehensive site visits to
affordable housing properties currently owned and managed by the
developers.
Site visits should include an assessment of the physical condition of the
properties, the level of maintenance, interviews with residents, and an
assessment of their fiscal management. Site visits are customarily performed
to evaluate a developer's capacity to adequately manage an affordable
housing project. Findings should be reported back to the Agency and the
community before approval is given.
Since the 4043 Irving project has been a controversial one and the city has
not involved the Planning Commission in what is clearly a significant change
in the project, it would seem incumbent on the Redevelopment Agency to
base their decision making on the most thorough evaluation.
True due diligence would not only allay concerns about funding this project,
but will also contribute to a better project, one which serves community
development.
Sincerely,
Meghan Sahli-Wells
President, Downtown Neighborhood Association
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CORRESPONDENCE
ATTACHMENT 2
143cc: Sol Blumenfeld
Todd Tipton
Steve Hadland
Andre Herndon
Gary Walker
Judith Martin-Straw
Ari Noonan
______________
(310)845-5831
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CORRESPONDENCE
ATTACHMENT 2
144