HomeMy WebLinkAboutResolution 92-021 02/03/1992~.es®lt„Itl®I~ Nom. 92-21 N.C.~.
t~f thF~ City of I't~t~~lurnr~, Ci`~liforni~a
RESOLUTION AUTHORIZING THE CITY MANAGER TO
SIGN SUBORDINATION AGREEMENT FOR CAULFIELD STREET
ELDER APARTMENTS
WHEREAS the City Council of Petaluma has as a goal the provision of safe, sanitary, and
decent housing for the elders of our community; and
WHEREAS Petaluma Ecumenical Project is continuing in its efforts to implement that
goal by developing another elder apartment complex, Caulfield Lane Apartments; and
WHEREAS the financing of this project involves the participation of various lending
partners; and
WHEREAS said financing requires the subordination of City of Petaluma documents in
favor of State and private lending institutions;
NOW, THEREFORE, BE IT RESOLVED that the City of Petaluma approves the
Subordination Agreement with modifications as required by the City Attorney's office
(Exhi~,~ bi„~ t A) and authorizes the City Manager to execute same on behalf of the City
Council..
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Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to
Council of the City of Petaluma at a (Regular) (BiCd~~~~ meeting ~° °
on the _.-.-3r~..-•----...... day of .............~.8~21=].185:~1...:......................, i9..92., by th ~/
following vote: - -- - -- ••--•••-----•------
Attor y
AYES: Read, Davis, Cavanagh, Nelson, Vice Mayor Woolsey, Mayor Hilligoss }
NOES: None
ABSENT: Sobel
ATTEST : .............. .. ....- ..... .... ..............................
city I~I~U'~ CIT L
. ~ ~~
Mayor
Council Filenn.........--•y ........................
CA 10-85 Res. No......+!.2.-.2.J............ N.C.S.
frees recording .in accord°ance
with Califo,ni'a G`overniuei3t
Cade Sections 6'-103 and 72'3-83
RECORDLN.G REQUESTED 8Y:
State of~ California,
Department of Housing and
Community Development
WHEN RECORDED MA°IL T0:
Department cf.Hqusng and
Community Development
Rental iiousng Congtru:ction Program
P. 0. BoX 95,2454
Sacramento CA 94.252-2Og4
Attn: Rental Housing Cotts.tru~tion
Program Manager
SUBORDINATION AC,~$~,~"MENT AND ESTOPPEL CERTIFICATE
(CITY DEED OF TRUST ANU cz~1~Y AFFORDABILITY AGREEMENT)
NOTICE: THIS AGREEMENT RE8ULT8 IN YOUR SECURITY iNTERE$T IN THE
PROPERTY AND AGREEMENT AFFECTING THE PROPERTY BECOMYNQ SUBJECT TO AND.
OF h0~4ER PRIORITY THAN THE LIEN OF SOME OTHER OR L1~-TER $ECURiTY
INSTRUMENT.
TITS SUBORbTNATTON AGREEMENT AND ESTOPPEL CERTIFICATE (the"
"Agreement") is dabad ,as of , 19.92 and is entered.
into by and among the City of_Petaluma, a mun cipal corporation (tike
"City"} , Caulfield Lana Senior I~ousing Associates, a California limited
partnership, (the "Bcrrowar"), Fetal"uma Ecumenical Projects," a
Ca~.iforri~a nonpro~ t public bens'fit corporation ("PEP") and State of
Caliror.nia Department o:P`HOUSing and Community Development, an agenoy
of the State oP California. (the "Lender").
F3F.~ITP;LS
A. PEP` isa the owner 'of the:. f.e.e simple interest in tha"t .rea"1
property located at 14Q5 Caulfield Lane, Petaluma, CaliEornia,-sonoma
County, as described in Exhibit A .(the "Property"). PEP entexed into
a ground lease with the :Borrower, a memorandum of which was recorded
August. 30, 1991" as; Dacumerrt No. 1.99.1 0086;946 in the 4f~icial Records oa=
Sonoma "County (the "Leasehold Estate"). The Borrower has constructed
a 22-unit residential rental development an the Leasehold Estate (the
"Trnpravements")."
B. Thee .City loaned t~21ca Borrower the principal sum of Two Hundrefl
Thousand Do lays ($:20'0,000) (the "Git Loan"),subject to the terms and
conditions of an affordability agreement, described `below, and secured
by a deed of "trust in Favor og the City, recorded August 30, 1991 as
OGOoity.ealrov.8/1 b191
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Document No. 199::1 0086'948 in the Official Records of Sonoma County (the
"City Deed of Trust").
G. The. City ~l.s'c made a grant ( the "Gra~nt'~ ) to PAY, . as the
initial y,eneral partt7er of the Borrower, in the principal amount of Two
Hundred Thousand Dollar ($200,000) subject to the terms and conditions
of that certain gratst agreement dated AuqusL- 13, 2991 '(the "City Grant
Agreement" ) .
D. In conjunction wii:h making the City Lawn and thQ Grant, the
City required that an agreement (tho "City Affordability Agreement")
giving the City the authority- to regulate and control the sale and
occupancy of the Property as part of the C.ity~s low and. moderate income
housing program be recorded against. the Property. The City
Affordability Agreement was recorded August 30, 1991 as Document No.
1991 008G;949 in the Official Records of Sonoma .County.
E. Yn order to finance construction of the Improvements, Lender
has agreed to ~laan Borrower the sum, og Seven Hundred nifty Thousand
Dollars ($7'50,00.0) (the "BCD Loan'), subject to tha~ terms and
conditions. og: (i} a development agreement (the "HCD Development
Agreement"), (:ii) a regulatory agreement (the "HCD Regulatory
Agreement") to 'be recorded against the~Property and the Improvements
which. rc~str-ices the use and occupancy of the Property and the
Improvements and the income derived therefrom., and (iii) other loan
documents. The. HCD Loan will be evidenced by a promissory note (the
"HCD Note"), tike repayment a~ which will be secured by, among other
things., a deed of trust by Borrower,, as Trustor, to Lender, as
Beneficiary (the "HCD Deed of Trust".) and 'by such other security as is
identified in the HCD Development Agreement.
~'.. Lender is willing to .make the. HCD Loan provided, the HCD Nate,
HCD Deed oP Truest and- the HGD Regulatory Agreement are liens, claims or
charges upon the Property prior and superior to the City Deed of Trust
and the City Affordability Agreement,. and provided that the City
speciricalSy and unconditionally subordinate and subject the City Deed
of Trust and the City Affordability Agreement to the li~ens,~clams or
charges of 1:.tla HCD Note, HCD Used of Trust and HCD Regulatory
Agreement'.
ASREEME~(T
.. NOW,_ THEREFORE, inn consideration of the mutual benefits accruing
to the parties hereto and other valuable consideration, the receipt and
sufficiency df which is hereby acltnow.ledged;, and in order to inducQ
Lender to.maka the HCD Loan, it is hereby declared, understood and
agreed as follows:
1. The HcD Deed of Trust securing the Hca Note in favor of
Lender, and the HCD Regulatory Agreement recorded against the Property
and the Improvements, and any and all renewals, modifications,
extensions or advances thereunder or secured thereby (including
interest therepn) shall unconditionally ba and .remain at all times
liens, claims, or c)Yarges on the Property and the Ymprovements prior
and superior t'o tte City Daed of Trust and the. City AFfordability
060city,ealrov,S/14/91
Agreement-, and' to all rights and privileges of the City thereunder, and
the City Deed oP~.Trust and the City Affordability Agreement, together
with a1.1 rights and.. pr vileges oP tho city thereunder is hereby
irrevocably and unconditionally subject and made ubordinata to the
liens, claims or ctia>"ges of the HCD Note, HCD Deed of Trust and the HCD
Regulatory Agreement in favor of Lender.
2. This Agreement shall bQ the whole and only agreement with
regard. to the, bubardinaton of the- City Deed oP Trust and the city
Affordability Agreement, together with all rights and privileges or the
City thereunder, to the liens, claims or charges of the HCD Deed ot•
Trust, the HCD Note and tho HCD Regulatory Agreement, and ;shall
supersede and cancel, but only inso-Par as would affect the priority
between the claims, liens or charges of the City Ueed oP Trust and the
city Affordability Agreement to the HCD Deed of Trust, the HCD Note and
tlYe HCD Regulatory Agreement including, but not limited to, °those
provisions, if any, contained in the City need of Trust and the City
Affordability Agreement which provide for the subordination of the lien
or charge thereof to arYather lien or charge on the Property.
3. The City deelares, ac}cnowledges and certifies that:
(a) The City consents and approves (f.) all provisions pf the
HCD Deed of Trust, HCD. Note and the HCD Regulatory Agreement, and
(ii) all agreements among the Borrower and Lender for the
disbursement of the proceeds of t2ie HcD Loan, including bu,t not
limited to the HCD Development Agreement pertaining to the
Improvements and .any loan escrow agreements which have been
prov°ided to the City for review;
(b) That none of the execut on, delivery or recordation o>:
the HCD Deed of Trust or the HCD Regulatory Agreement, or the
perx'armance of any provision, condition, covenant or other term
thereof will c;anfl ct with or constitute a breach of the City
Attord`aibility Agreement, the City Deed of Trust or the city Grant
Agreement.
(c) The Lender, in ,making disbursements of the HCD, Loan
pursuant to the HCD bevelopment Agreement pertaining to the
Improveiuents, the. HCD Note or any other agreement, is under no
obligation or duty to, nor has Lender represented that it 'will,
see tb the appl_cr~tion of such proceeds by the person or persons
to whom 'Lender disburses such proceeds, and any application yr use
of such .;proceeds for purposes other than those provided for in
such agreement or agreements shall not defeat the subordination
here-in made in w2iole ar in part;
(d) The City Affordability Agreement, the City Deed of Trust
and the City Grant Agreement are not. void, voidable or terminable
at ttze optiarl at any party thereto or oP any other person or
entity claiming an interest in or to such documents or the
Property, and to the k~est of City's knowledge there has been no
breach or de'ault thereunder on the part o~ the Borrower or PEP,
ncr has any event, omission ar failure of condition occurred
which, with the giving of notice or the passage of time, or~both,
060oity.wlmv.8/14/91 3
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would :be an event of breach or defauat thereunder. The City has
not been inf,or-mad of •and has not atherwi a received notice from
the Borrower or PEP or from any other person or entity concerning
any alleged default on the part of bhe Borrower or PEP under the
City APgorelaibilty Agreement, tha City Di?ed of Trust or thQ City
Grant Agreement. There exist no defenses or oL'fsets to
enforcement of_the City Affordability Agreement, the City Deed of
Trust or the City Grant Agreement by tha Borrower or PEP.
(e) That the improvements, a constructed, have been
approved by• the city and such.. improvements satisfy n21
requirements af?Pee,ting the construction of the same, if any,
pursuant to the terms of the city Affordability Agreement and the
city Grant Agreement.
(P) That all notices, copies o€ policies and receipts
required to ba delivered to the City have been so delivered and
are hereby approved.
(g) That, if so required by •the City,' the form o~ rental
agreement to be used. by-the Borrower for ranting the units to
lower i~i:comr~ or elderly households (as such terms are defined in
the City Affordability Agreement} has been approved.
(h) The City intentionally and unconditionally subjects and
subordinates the claims.., liens or charges -upon the Property of the
City Deed of Trust and the City Affordability Agreement., a21
preson:t and future indebtedness and obligations secured thereby,
in favor of the claims, liens or charges upon the Property or
Improvemen~t~ o~ the HCD Deed o~ Trust, the HCD Note and the HC1J
Regulatory Agreement, and understands that in reliance upon and in
consideration of this gubj:ectiof- and subordination, the .HCD Loan
and adva-noes thereof are being and will be made and, as part and
parcel thereof, specific monetary and other obligations are being
and will be entered into which would not be made or entered into
but far. said reliance upon this subjection and subordination;
4. 'At the tune Lender notifies Borrower that a default or breach
exists under the terms of the HCD Regulatory Agreement ar the HCD Deed
of Trust, Lender shall promptly send a copy of such notice to the City
and the cf,ty s2ia7:1 have the right to:
(a;) cur-e the noticed default, within forty-five (45) days
following Lender's notice to Borrower, or within such longer
period of time approved in'advance by the Department, such
approval shall not be unreasonably withheld;
(b`} negotiate with Lender regarding the noticed default,
provided that such negotiat on is commenced within forty-five,(45)
days following lender's notice to BOrrOwer, or within such longer
per~:od oP time approved in advance by the Department, such
approval shall not be unreasonably withheld;
(c) purc:taase the Property and the Improvements from
Borrower, provided such transfer of ownership is approved by
060city,~alrov,8/14/P 1 4
~eso `~a-~,.~ rleS
Ler-der at ~ha time of traiisPer, wtri.r;h app,r-avai may not be
unreasonab~l:y withheld, pursuant to the terms of the HCD Regulatory
Agreement; Rand
(d,) assume the, HCD Loan, provided the City has been approved
by Lander, which approval may not be unreasonably withheld, as a
trans-fares of the Property and tt~e Impraventents pursuant to the
terms of the IiCD Regu story Agreement, such transfer has taken
place, and the default specified in the notice from Lender to
borrower has been cured Uy the City..
5. Lender agrees that following the cure of a noticed dePaul.t by
the City, Linder.will not exercise its right to accaierate the amounts
due under the I~iCD Loan by reason of the default cured by the City.
6. This Agreement. shall not. be deemed to terminate.,, release,
modify ar amend the obligation's of Y~Y, the 'Borrower or successors in
interest to comply with the ciay Afzordability Agreement prior to the
consummation of a foreclosure of the HCD Deed o€ Trust ar to l mit ir1
any way the City~s right to enforce the City Affordability Agreement.
prior to the car summation of a foreclosure of the HCD Deed-of Trust:
7. This Agreement aha11 be binding on and inure to the benefit
of the 1ega1 rep~esei~tatives,- heirs, suc:ce~sssort:s atYd ae3siyris of the
partiel3. .
8. This Agreement shall be governed by and Construed in
accordance with the laws of the State of California.
9. This Agreement may be signed by difrarent parties .hereto in
counterpart's with the same effect as if the signatures to each
ccunterp,art were upon a eingie .instrument.. All counterparts sha~li be
deemed an. original at this Agreement.
460oity.ao~rsv.8/1191 ~ 5
Re.so 9 a - a i ~fG,S
•
- NoTICB: c THLt~. A4R~iEMENT REBULT$ IN • YOUR BECURxTY INTEREST IN I+gE
PROPERTY AND ~AOREEMENT AFFECTING THE PRO1'HRTY BECOMING
8~U$JECT .T.O AND OI:' L0~9'ER PRIORITY THAN THE LIEN OF SOME OTHER
OR L1~TER SLCUR'ITY INSTRUMENT o
XN WITNESS WHEREOF, the parties .have executed this Agreement as of
• the day of 1992.
CZ : LENDER.:
The City of Petaluma, State o£ Gal•Pornia
a Municipal Corporatioiz Depar~mant of Housing and
community Development
By•
Name • _. _
Its:
Approved as to Form:
By:
City Attorney
BORROWE,$ ;
Caulfield Lane Senior Housing
Associates, a California
limited partnership
By: Caul~feld Lane Senior
Housing, Inc., a California
nonprofit public benefit
corporation
I•ts General Partner
'D
Dy:
Name:. Rus's SChmunk
Itsc Manager,-Rental Housing
construction Program
By :.
Name:
Its: -'~
~E.$
Petaluma Ecumenical_Projects,
a Califlornaa nonprofit public
benefit carporat'ion
By•
Name:
Yts:
SIGNATURES MUST BE ACKNOWLEDC3ED
o6ooicr.en~,~cY. si ~ aro i
h
(peso ~ a - a.r Nes