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HomeMy WebLinkAboutStaff Report 3.B 05/16/2016DATE: May 16, 2016 Agenda Item #3.B TO: Honorable Mayor and Members of the City Council through City Manager FROM: Sue Castellucci, Housing Administrator SUBJECT: Resolution Approving an Affordable Housing Regulatory Agreement with an Affiliate of The Reliant Group in Connection with the Development of Altura Apartments, and Authorizing the City Manager to Sign Documents Related to the Affordable Regulatory Agreement. RECOMMENDATION It is recommended that the City Council adopt the attached Resolution Approving an Affordable Housing Regulatory Agreement with an Affiliate of the Reliant Group in Connection with the Development of Altura Apartments, and Authorizing the City Manager to Sign Documents Related to the Affordable Regulatory Agreement. BACKGROUND The Altura Apartment project is a proposed 150 unit family rental community, located on Baywood Drive in Petaluma. The project will be in conformance with current zoning, which permits up to 30 units per acre. The City of Petaluma Planning Commission, at their November 10, 2015 meeting, adopted Resolution No. 2015-21 which approved the Site Plan and Architectural Review for the Altura Apartments. The City of Petaluma's Housing Element 2015-2023 establishes there is an existing unmet need for very low and low income housing units and insufficient public funds to facilitate their construction. Petaluma's Inclusionary Housing Program 4.3 of the 2015-2023 Housing Element states that the City will continue to require residential projects of five or more units to contribute to the provision of below-market rate housing in one of the following ways: a. Dedicate 15% of the units on-site, or a portion of the project site or property to the City of a non-profit organization for use as affordable housing. b. Within a half -mile radius of the planned SMART stations, developers are encourage to provide at least 15 percent of the units in a rental housing project at rents affordable to very low- and -low income households for a minimum of 30 years. C. Within a half -mile radius of the planned SMART stations, developers may be required to provide at least 15 percent of the units in a for -sale project at prices affordable to low- and moderate -income household for a minimum of 30 years. d. The developer can make an in -lieu payment to the City's Housing Fund. e. Use alternative methods to meet the intent of the inclusionary requirement, subject to approval by the City Council. The developer of the Altura project, The Reliant Group, has agreed to contribute 15% of the total units to affordable housing. The project provides a significant public benefit by providing affordable housing units at no cost to the public, contributing towards the City of Petaluma's Regional Housing Needs Allocation. DISCUSSION The Reliant Group has General Partnership interests in four California tax credit properties, one of which is an affordable senior complex in Rohnert Park. In the Site Plan and Architectural Review Conditions of Approval for the project, Section 20 requires that prior to building permit issuance, an affordable housing agreement shall be executed to implement the affordable housing as proposed by the Owner. The attached Affordable Housing Regulatory Agreement and Inclusionary Housing Covenants, Conditions and Restrictions is the document to insure affordable housing will restrict 23 units for affordable housing for thirty years. The unit mix for the affordable units will be as follows: • 5 — 1 bedroom units at 50% Area Median Income (AMI) • 4 — 2 bedroom units at 50% AMI • 9 —1 bedroom units at 60% AMI • 5 — 2 bedroom units at 60% AMI The twenty-three affordable units will reduce Petaluma's Regional Housing Needs Allocation for the Very Low Income category from199 units to 190 units and the Low Income category from 103 units to 89 units for the current housing element planning period. The recommended resolution presented for the City Council's approval authorizes the City Manager to execute the Regulatory Agreement and any necessary related documents. FINANCIAL IMPACTS This project fulfills the City Council's goals and priorities of the 2015-2023 Housing Element and the 2015-2020 Consolidated Plan in creating affordable housing in Petaluma. There will be no City housing funds allocated for this project. ATTACHMENTS 1. Resolution 2. Affordable Housing Regulatory Agreement 2 ATTACHMENT #1 RESOLUTION NO. RESOLUTION APPROVING AN AFFORDABLE HOUSING REGULATORY AGREEMENT WITH AN AFFILIATE OF THE RELIANT GROUP IN CONNECTION WITH THE DEVELOPMENT OF ALTURA APARTMENTS, AND AUTHORIZING THE CITY MANAGER TO SIGN DOCUMENTS RELATED TO THE AFFORDABLE REGULATORY AGREEMENT. WHEREAS, The Reliant Group or an affiliate of The Reliant Group will serve as the general partner in Baywood Equities LP., a California limited partnership that intends to develop the property at the Northwest corner of Baywood Drive and Perry Lane in Petaluma, CA consisting of 150 multifamly housing units which include 23 units of affordable units (the "Project"); and WHEREAS, in connection with the construction of the Project, the term of affordability for the low income housing units will be for a term of 30 years commencing upon completion of the certificate of occupancy; and WHEREAS, the Planning Commission held a duly noticed public hearing to consider the Site Plan and Architectural Review of the Project on November 10, 2015 and adopted Resolution No. 2015-21 approving the Site Plan and Architectural Review for the Project; and WHEREAS, The City's Housing Element 2015-2023 establishes there is an existing unmet need for very low and low income housing units and insufficient public funds to facilitate their construction; and WHEREAS, Petaluma's Inclusionary Housing Program 4.3 3 of the 2015-2023 Housing Element states that the City will continue to require residential projects of five or more units to contribute to the provision of below-market rate housing in one of the following ways: a. Dedicate 15% of the units on-site, or a portion of the project site or property to the City of a non-profit organization for use as affordable housing. b. Within a half -mile radius of the planned SMART stations, developers are encourage to provide at least 15 percent of the units in a rental housing project at rents affordable to very low- and -low income households for a minimum of 30 years. C. Within a half -mile radius of the planned SMART stations, developers may be required to provide at least 15 percent of the units in a for -sale project at prices affordable to low- and moderate -income household for a minimum of 30 years. d. The developer can make an in -lieu payment to the City's Housing Fund. e. Use alternative methods to meet the intent of the inclusionary requirement, subject to approval by the City Council; and WHEREAS, the Owner has chosen to fulfill their inclusionary requirement by providing 15% of affordable units on-site; and WHEREAS, the project provides a significant public benefit by providing affordable housing units at no cost to the public and which contribute towards the City of Petaluma's Regional Housing Needs Allocation; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Petaluma hereby: 1. Finds that the foregoing recitals are true and correct and incorporated herein by reference. 2. Approves the Affordable Regulatory Agreement and Declaration of Restrictive Covenants, and authorizes the City Manager or his designee to execute and deliver such document to which the City is a party substantially in the form provided for City Council review, with such modifications as may be approved by the City Manager in consultation with the City Attorney, provided that such modifications are consistent with the intent of this Resolution and do not substantially increase the obligations or impair the rights of the City. 3. Authorizes and directs the City Manager and his designees to execute all documents and to take all actions reasonably necessary to implement this Resolution and the transactions described herein. PASSED AND ADOPTED AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF PETALUMA ON , 2016 BY THE FOLLOWING VOTE: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk L! ATTACHMENT #2 AFFORDABLE HOUSING REGULATORY AGREEMENT e INCLUSIONARY HOUSING COVENANTS, CONDITIONS AND RESTRICTIONS TO INSURE AFFORDABLE HOUSING by and between THE CITY OF PETALUMA and BAYWOOD EQUITIES, LP This Affordable Housing Regulatory Agreement and Inclusionary Housing Covenants, Conditions and Restrictions (the "Agreement") is entered into effective as of May 1, 2016, ("Effective Date") by and between the City of Petaluma, a municipal corporation ("City") and CAP VIII — Altura, LLC, a California limited liability company ("Owner"). The City and the Owner are collectively referred to herein as the "Parties." RECITALS A. Owner currently holds title to a 5.03 -acre parcel of land located on Baywood Drive at Perry Lane in the city of Petaluma, California, Sonoma County Assessor Parcel Number 005-201-001and more particularly described in Exhibit A attached hereto (the "Property"). B. Owner wishes to develop the property with a 150 -unit multi -family rental apartment project (the "Project"). C. The Housing Element of the General Plan includes quantified objectives for providing housing affordable to very low, low and moderate income households. D. Inclusionary Housing Program 4.3 of the 2015-2023 Housing Element states that the City will continue to require residential projects of five or more units to contribute to the provision of below-market rate housing in one of the following ways: a. Dedicate 15% of the units on-site, or a portion of the Property to the to the City or to a non-profit organization, for use as affordable housing. b. Within a half -mile radius of the planned SMART stations, developers are encourage to provide at least 15 percent of the units in a rental housing project at rents affordable to very low- and -low income households for a minimum of 30 years. C. Within a half -mile radius of the planned SMART stations, developers may be required to provide at least 15 percent of the units in a for -sale project at prices affordable to low- and moderate -income household for a minimum of 30 years. d. The developer can make an in -lieu payment to the City's Housing Fund e. Use alternative methods to meet the intent of the inclusionary requirement, subject to approval by the City Council. E. To fulfill the inclusionary requirement, the Owner has chosen to provide twenty- three (23) residential units in the Project as affordable to very -low and low income households for a period of not less than 30 years. F. The purpose of this Agreement is to satisfy the City's affordability requirements and to regulate and restrict the occupancy and rents of the Project's Restricted Units (as defined herein) for the benefit of the Project occupants. The Parties intend the covenants set forth in this on Agreement to run with the land and to be binding upon Owner and Owner's successors and assigns for the full term of this Agreement. AGREEMENT NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. 1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. "Actual Household Size" means the actual number of persons in the applicable household. "Adjusted for Family Size Appropriate for the Unit" shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code, subject to the application of federal rules and regulations applicable to Project financing sources, including Section 42(g)(2) of the Internal Revenue Code of 1986 as amended (or successor provision). "Affordable Rent" means the following amounts, less a utility allowance and other fees and charges required to be paid by tenants of the Project on a non -optional basis: (i) for units that are restricted for rental to households with incomes of not more than fifty percent (50%) of AMI, as defined herein, ("50% Units"), a monthly rent that does not exceed one -twelfth of thirty percent (30%) of fifty percent (50%) of AMI , Adjusted for Family Size Appropriate for the Unit, and (ii) for units that are restricted for rental to households with incomes of not more than sixty percent (60%) of AMI ("60% Units"), a monthly rent that does not exceed one -twelfth of thirty percent (30%) of sixty percent (60%) of AMI, Adjusted for Family Size Appropriate for the Unit. "Area Median Income" or "AMI" means the median income for Sonoma County, California, adjusted for Actual Household Size, as determined by the U.S. Department of Housing and Urban Development ("HUD") pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development ("HCD") in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c). "City's Authorized Representative" means the City Manager of the City of Petaluma. "City Documents" means this Agreement. 7 "Eligible Household" means a household for which gross household income upon initial occupancy does not exceed the maximum income level for a Restricted Unit as specified in the definition of Affordable Rent in this section. "Regulations" means Title 25 of the California Code of Regulations. "Rent Restricted" is defined in Section 4. "Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable Rent by Eligible Households of specified household income levels as set forth in the definition of Affordable Rent in this section. 2. Term of Agreement. 2.1 Term of Restrictions. This Agreement shall remain in effect through the thirtieth (30th) anniversary of the City's issuance of a final certificate of occupancy or equivalent for the Project, unless the term is extended by mutual agreement of the Parties. 2.2 Effectiveness Succeeds Conveyance of Property. This Agreement shall remain effective and fully binding for the full term hereof, as such may be extended pursuant to Section 2. 1, regardless of (i) any sale, assignment, transfer, or conveyance of the Property or the Project or any part thereof or interest therein. 2.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the term as such may be extended pursuant to Section 2.1. 3. Location and Design of Restricted Units. a. Location. Restricted units shall be evenly distributed throughout the Project to the maximum feasible extent. b. Unit Mix/Number of Bedrooms. The twenty three (23) Restricted units shall be divided amongst one (1) bedroom apartment units and two (2) bedroom apartment units, in accordance with the following matrix: Income Category No. of 1 -bedroom units No. of 2 -bedroom units 50% Units 6 3 60% Units 10 4 Notwithstanding the foregoing unit mix matrix, Owner may include a higher proportion of Restricted Units with more bedrooms and remain in compliance with this Agreement. c. Household size assumptions. In determining the maximum rent of Restricted Units, the following household assumptions shall be used for the specified unit size, unless the Project is subject to different assumptions imposed by other governmental regulations: 1 bedroom 2 persons 2 bedroom 3 persons 4. Use and Affordability Requirements. a. For a term of thirty (30) years commencing upon the date of City's issuance of a final certificate of occupancy or equivalent for the Project: (i) not less than nine (9) of the residential units in the Project shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose income is less than or equal to fifty percent (50%) of AMI; and (11) not less than an additional fourteen (14) of the residential units in the Project shall be both Rent Restricted and occupied (or is vacant, available for occupancy) by Eligible Households whose income is less than or equal to sixty percent (60%) of AMI. b. Rents for Restricted Units shall be limited to Affordable Rents for households of the applicable income limit in accordance with the definition of Affordable Rent in section 1 of this Agreement and paragraph(a) of this section. Notwithstanding the foregoing, no tenant qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Project because, after admission, such tenant's household income increases to exceed the qualifying limit for such Restricted Unit. A household which at initial occupancy qualifies in a particular income category shall be treated as continuing to be of such income category, and the unit such household occupies shall continue to qualify as a Restricted Unit, so long as the household's gross income does not exceed one hundred forty percent (140%) of the applicable income limit. 5. Occupancy of Affordable Units. a. Owner shall not permit a household to occupy a Restricted Unit unless such household is initially determined to be an Eligible Household. Owner shall recertify income eligibility of those households occupying a Restricted Unit on not less than an annual basis to determine the continuing eligibility of the household. b. Owner shall not be obligated to rent a Restricted Unit unless the applicant for the unit meets Owner's normal tenant selection criteria, including, but not limited to satisfactory credit and rent history, in accordance with State and federal discrimination laws. In the event an eligible household is a Section 8 Program participant, Owner will consider eligible households without regard to the household's source of income or rent payment assistance. The Owner shall obtain, complete and maintain on file, immediately prior to initial occupancy and 9 annually thereafter, income certifications for each tenant renting a Restricted Unit. Owner shall make a good faith effort to verify and document that the income statement provided by an applicant or tenant occupying a Restricted Unit is accurate by taking at least two (2) of the following steps as a part of the verification process: (i) obtain a minimum of the three (3) most current pay stubs and/or obtain a verification of income from the current employer for all adults age eighteen (18) or older who are employed; (ii) obtain an income tax return for the most recent tax year; (iii) obtain the three (3) most current savings and checking account bank statements; (iv) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; (v) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. Copies of tenant income certifications shall be made available to the City's Housing Administrator upon request. C. Owner and any manager it employs shall not incur any liability under this Agreement as a result of fraud or misrepresentation (intentional or unintentional) by an applicant for a Restricted Unit or a tenant of such unit. d. Fair Housing. Owner shall comply with state and federal fair housing laws in the marketing and rental of the units in the Project. Owner shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. C. Nondiscrimination. Owner shall not discriminate against any prospective tenant in the use, enjoyment, occupancy, conveyance, lease, or rental of any part of the Project on the basis of race, color, ancestry, national origin, religion, sex, sexual preference, marital status, family status, source of income, physical or mental disability, Acquired Immune Deficiency Syndrome (AIDS) or AIDS-related conditions, or any other arbitrary basis that violates applicable laws. The Owner shall otherwise comply with all applicable local, state and federal laws concerning discrimination in housing. Owner shall comply with state and federal fair housing laws in the marketing and rental of the units in the Project. Owner shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates of vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 10 6. Certification and Annual Report. a . The income and household size of all households occupying Restricted Units shall be certified by the Owner prior to occupancy in accordance with Section 4. b. Owner shall submit to the City's Housing Administrator on or before September of each year for the term of this Agreement an annual report and certification covering the period of the immediately preceding fiscal year ending June 30 identifying the Restricted Units, the Affordable Rents charged, and income eligibility data on Eligible Households occupying the Restricted Units on a form in substantial conformance to attached as "Exhibit D". In addition to the above information, the City's Housing Administrator may request additional tenant information collected by Owner (such as: household income, household size, age of occupants, type of employment, and place of employment) to be added to the annual report and certification, so long as that request is made on or before July 15 of the corresponding reporting year. C. Subject to the terms of Section 4.b, if the income of a tenant upon re -certification exceeds the upper limit for residents of Restricted Units, the Owner may increase the rent to existing market rate rents for that unit in accordance with the tenant lease. If the tenant vacates the unit, the unit shall remain a Restricted Unit, and shall be rented to a new income -eligible tenant for the applicable income level for that unit. If the tenant remains and agrees to pay the adjusted rent, the Owner shall then make available a comparable vacant unit as a Restricted Unit (if such vacant unit then exists), or shall rent the next available comparable vacant unit as a Restricted Unit, in order to satisfy the Restricted Unit requirements specified in Section 3 and Exhibit B. d. If the events identified in subsection (c) above occur, and no unit is immediately available for rent as a Restricted Unit at the low-income rent level, Owner shall nonetheless be deemed in compliance with this Agreement, so long as the next comparable vacant unit for the low-income rent level is rented to a qualified tenant as outlined in subsection (c) above. 7. Annual Monitoring Fees. Owner shall pay to the City on or before Augustl of each year for the term of this Agreement an annual fee, covering the period of the immediately preceding fiscal year ending June 30, in the amount of $70 per Restricted Unit to defray a portion of the cost incurred by the City to monitor Owner's compliance with the terms of this Agreement. The Annual Monitoring Fee may be increased on an annual basis by the lesser of three percent (3%) of the then current fee or the increase in the Consumer Price Index (CPI) for each corresponding year. Violation of Regulatory Agreement. a. Any violation, non-performance or breach by Owner of any representation, obligation, warranty or covenant hereunder, which is not cured within thirty (3 0) days after notice thereof given by the City, or where cure is not possible within thirty (3 0) days, whose cure is not commenced within thirty (3 0) days and 11 diligently prosecuted to completion shall constitute an Event of Default, in which event the City shall be entitled to declare a default and to the following non- exclusive list of legal and equitable remedies: i. Specific performance of this Agreement. It is agreed by the Owner that the injury to the City arising from a default under any of the terms of this Agreement would be irreparable and that the amount of compensation which would provide adequate relief to the City would be impossible to ascertain. ii. Liquidated damages. The Owner shall pay the City as liquidated damages $500 per month from the date of original non-compliance until the Restricted Unit is in compliance with this Agreement. iii. Seek such other remedies as may be available under law or equity. iv. Written notice to any lender then holding a lien on the Property declaring that Owner is in default under this Agreement and providing the lender the opportunity to cure Owner's default. b. In the event that the breach, non-performance or violation involves the rents to tenants or other charges in excess of those permitted under this Agreement, the City shall be entitled to, as an additional remedy, the return of such excess rents or other charges to the affected households, if such households can be located. Any violation, non-performance or breach by the City of any representation, obligation, warranty or covenant hereunder, which is not cured within thirty (30) days after notice thereof given by the Owner, or where cure is not possible within thirty days, whose cure is not commenced within thirty (30) days and diligently prosecuted to completion shall constitute an Event of Default, in which event the Owner shall be entitled to declare a default and to seek all remedies at law or in equity. d. No partner, member, employee, officer, agent or affiliate of Owner and no official, officer, employee, attorney or agent of City shall have any liability under this Agreement. 9. Accounting Records. Owner shall maintain records and books accurately and fully showing the amount of rent charged to and received from each of the Restricted Units. Owner shall not be required to maintain such records and books relating to a particular rental of a particular affordable unit for more than three (3) years following termination of a tenancy. 10. Amendment. This Agreement shall not be altered or amended except in writing, executed by the Parties hereto. 11. Bindin)z on Successors. This Agreement shall bind, and benefits thereof shall inure to, the respective parties hereto, their legal representatives, executors, administrators, 12 successors in interest, and assigns; provided, however, that Owner shall not be released from liability for any violation, non-performance, or breach of any representation, warranty, or covenant occurring prior to any such transfer, and any legal representative, executive, administrator, successor in interest, and assign shall take subject to the City's right to declare a default pursuant to Section 8, above, and the City's right to all its legal and equitable remedies in relation thereto. 12. Recording Agreement, This Agreement, and all amendments thereto, shall be executed by each of the parties and recorded against the Property in the official records of the Sonoma County. 13. Indemnification. To the fullest extent permitted by law, Owner agrees to defend (with legal counsel selected by the City), indemnify and hold harmless City, its elected and appointed officials, officers, attorneys, agents, and employees and each of them from and against any and all liability, loss, damage, expense, and costs of every nature arising out of or in connection with Owner's performance hereunder or its failure to comply with any of its obligations contained in this Agreement, including, without limitation, attorney's fees and costs and reasonable fees of litigation, except such loss or damage which is caused by the negligence or willful misconduct of the City. a. General. This obligation to indemnify and defend City as set forth herein is binding on the successors, assigns, or heirs of Owner and shall survive the termination of this Agreement or this Section. By execution of this Agreement, Owner acknowledges and agrees that it has read and understands the provisions hereof and that this Section is a material element of consideration. The parties agree that if any part of this indemnification is found to conflict with applicable laws, such part shall be unenforceable only insofar as it conflicts with said laws, and that this indemnification shall be judicially interpreted and rewritten to provide the broadest possible indemnification legally allowed and shall be legally binding upon Owner. b. Survival. Owner's responsibility for such defense and indemnity obligations shall survive the termination or completion of this Agreement for the full period of time allowed by law. 14. Attorney's Fees. In the event any party to this Agreement brings an action to enforce or interpret the provisions of this Agreement, the prevailing party in such action shall be entitled to recover reasonable attorney's fees from the other party, whether or not such action or proceeding is prosecuted to judgement. 15. Time of Essence. Time is of the essence in the performance of this Agreement. 16. Severability. The provisions of this Agreement are severable. If any portion is held invalid by a court of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect. 13 17. Waiver. No waiver by the City or Owner of any breach of or default under this Agreement shall be deemed to be a waiver of any other or subsequent breach or default hereunder. 18. Notice. Written notices and other written communications by and between the Parties hereto shall be addressed as follows: TO CITY: City of Petaluma 11 English Street Petaluma, CA 94952 Attention: City Manager With a copy to: City of Petaluma 27 Howard Street Petaluma, CA 94952 Attention: Housing Administrator TO OWNER: CAP VIII — Altura, LLC c/o Reliant Group Management 275 Battery Street, Suite 500 San Francisco, California 94111 Attention: Chief Operating Officer 19. Enforced Delay. A party hereto shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of the public enemy; terrorism; epidemics; quarantine restrictions; freight embargoes; governmental restrictions; unusually severe weather; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Owner shall not excuse performance by Owner, and except that acts or the failure to act of City shall not excuse performance by City); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the Enforced Delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, 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 one hundred twenty (120) days after the sending party has actual knowledge of the commencement of the cause. 20. Entire Agreement. This Agreement, including all documents incorporated herein by reference, comprises the entire integrated understanding between the parties concerning the subject matter described herein and supersedes all previous negotiations and agreements, whether oral or written. No obligations other than those set forth in this Agreement shall be recognized by or be finding upon the parties. 21. Counterparts. This Agreement may be executed in counterparts, and upon signature by each of the parties hereto, shall constitute one and the same instrument. 14 22. Termination; Quitclaim. If necessary as determined by a reputable title company, City agrees to execute a termination agreement, quitclaim, or other recordable document to remove this Agreement of record upon the expiration of the term and termination of this Agreement. 23. Financing. Owner shall be responsible for providing all funds and/or financing for the construction of the Restricted Units. 24. Obligations Run With the Land. The terms and conditions set forth herein are intended to run with the title to the subject Property and shall bind Owner and all successors, heirs, grantees, and assigns. 25. Foreclosure. In the event of foreclosure or transfer of deed in lieu thereof for a Restricted Unit, title to such Restricted Unit shall be taken subject to these restrictions. 26. Agreement Interpretation. Each party to this Agreement has had an opportunity to review the Agreement, confer with legal counsel regarding the meaning of the Agreement, and negotiate revisions to the Agreement. Accordingly, neither party shall rely upon Civil Code section 1654 in order to interpret any uncertainty in the meaning of the Agreement. 27. Jurisdiction. This Agreement shall be governed and construed in accordance with California law. The venue for any legal action in State court filed by a party to this Agreement for the purpose of interpreting or enforcing any provision of this Agreement shall be in the Superior Court of California, County of Sonoma. The venue for any legal action in Federal court filed by a party to this Agreement for the purpose of interpreting or enforcing any provision of this Agreement within the jurisdiction of the Federal courts shall be the Northern District of California. The appropriate venue for arbitration, mediation or similar legal proceeding under this Agreement shall be in Sonoma County, California; however nothing in this Agreement Section shall obligate a party to submit to arbitration any dispute arising under this Agreement. 28. Signatures. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Agreement on behalf of the respective legal entities of Owner and City. Signatures on Next Page 15 negotiate revisions to the Agreement. Accordingly, neither party shall rely upon Civil Code section 1654 in order to interpret any uncertainty in the meaning of the Agreement. 2$, Jurisdiction. This Agreement shall be governed and construed in accordance with California law. The venue for any legal action in State could filed by a party to this Agreement for the purpose of interpreting or enforcing any provision of this Agreement shall be in the Superior Court of California, County of Sonoma. The venue for any legal action in Federal court filed by a party to this Agreement for the purpose of interpreting or enforcing any provision of this Agreement within the jurisdiction of the Federal courts shall be the Northern District of California. The appropriate venue for arbitration, mediation or similar legal proceeding under this Agreement shall be in Sonoma County, California, however nothing in this Agreement Section shall obligate a party to submit to arbitration any dispute arising under this Agreement. 29. Sianatures. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Agreement on behalf of the respective legal entities of Owner and City, IN WITNESS THEREOF, the Parties have executed this Regulatory Agreement as of the date first written above. CAP VIII — Altura, LLC a California limited liability company By: Reliant CAP V111, LLC a California limited liability company Its: Sole Member By: Reliant Group Management, LLC a California limited liability company Its: Manag41sla" By; acoliett— Its: Chief Operating Officer Sign(ttlirm Continue on Next Page 16 IN WITNESS THEREOF, the Parties have executed this Regulatory Agreement as of the date first written above. OWNER: CAP VIII — Altura, LLC a California limited liability company By: Reliant CAP VIII, LLC a California limited liability company Its: Sole Member By: Reliant Group Management, LLC a California limited liability company Its: Manager By: J. Caskie Collet Its: Chief Operating Officer CITY: CITY OF PETALUMA A Municipal Corporation By: _ Attest: By: John C. Brown, City Manager City Clerk APPROVED AS TO FORM: Eric Danly, City Attorney 17 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On , before me, , Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] 18 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY [to be provided by the title company] z Exhibit B Number of Units by Unit Size and Targeted Area Median Income (AMI) Levels 20 50% Units 60% Units Total 1 -Bedroom 6 10 16 2 -Bedroom 3 4 7 Total 9 14 23 20 Exhibit C INSURANCE REQUIREMENTS Prior to initiating work on the Project and continuing through throughout the tern of this Agreement, Owner shall obtain and maintain the following policies of insurance: (a) a commercial general liability policy in the amount of Two Million Dollars ($2,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) Owner shall furnish or cause to be furnished to City evidence satisfactory to City that Owner and any contractor that has contracted for the performance of work on the Property or otherwise pursuant to this Agreement caries statutory Workers' Compensation insurance and Employer's Liability insurance in a minimum amount of One Million Dollars ($1,000,000) per accident. (c) Upon commencement of construction and continuing until issuance of a Certificate of Completion, Owner and all contractors working on behalf of Owner shall maintain a policy of builder's all-risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis. (d) Upon completion of Project construction, Owner shalt maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for 100% of the replacement value of the Project. (e) Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M. Best's rating of no less than A: VII. The Commercial General Liability policy required hereunder shall name the Indemnitees as additional insureds. (f) Prior to commencement of rehabilitation or construction work, Owner shall furnish City with certificates of insurance evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City of any material adverse change, cancellation, termination or non -renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non -renewal. (g) If any insurance policy or coverage required hereunder is canceled or reduced, Owner shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a 21 certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. (h) Coverage provided by Owner shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City. Owner shall furnish the required certificates and endorsements to City prior to the commencement of rehabilitation or construction work on the Project, and shall provide City with certified copies of the required insurance policies upon request of City. 22 EXHIBIT D � E § ( j § 7 � / / » 7 § \ q 23 / ® E� - - - - _ _ _ _ - (A w /(( &q c) \k ` (( c / � E(®( B ® 7 2 - - - - - - - ® - - 0 - / y@E §�$ � 7 / o/E ®)� � ■ zg (© � E § ( j § 7 � / / » 7 § \ q 23