Item 4.1 - 3rd Amendment to the DDLA for the Villa De Vida Affordable Housing ProjectG��Y W9h
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DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summa:
City of Poway
COUNCIL AGENDA REPORT
April 2, 2019
Honorable Mayor and Members of the City Council
APPROVED
APPROVED AS AMENDED
❑
(SEE MINUTES)
DENIED
❑
REMOVED
❑
CONTINUED
RESOLUTION NO.
Honorable Chairman and Members of the HousingAuthority
Robert Manis, Director of Development Services M
Robert Manis, Director of Development Services
(858) 668-4601 or bmanisapoway.org
Third Amendment to the Disposition, Development and Loan Agreement
for the Villa de Vida Affordable Housing Project
The Disposition, Development and Loan Agreement (DDLA) for the Villa de Vida affordable
housing development was approved by the Poway Housing Authority and City Council on October
4, 2016. Since its approval, the DDLA has been amended twice. In October 2018, the project
received 9% tax credits from the Tax Credit Allocation Committee (TCAC), without which the
project would not be feasible. The project also received a loan from the County of San Diego,
Innovative Housing Trust Fund earlier this year. Since then, the Developers, Villa de Vida and
Mercy Housing, have been working to finalize all the requirements needed to close escrow and
implement the project within the 180 -day TCAC deadline. Modifications to the DDLA and some of
the ancillary documents are needed to close escrow no later than April 9, 2019.
Recommended Action:
It is recommended that the City Council and the governing body of the Poway Housing Authority:
1) Approve the third amendment to the Disposition, Development and Loan Agreement for the
Villa de Vida project (Attachment A) and authorize the Executive Director of the Poway Housing
Authority to execute the DDLA and all ancillary documents.
Discussion:
The Villa de Vida affordable housing project is proposed on a 2.71 -acre site owned by the Poway
Housing Authority, located at 12341 Oak Knoll Road. The 54 -unit project will provide 53 units for
developmentally disabled adults with extremely low, very low, and low incomes. One unit will be
provided for an on-site manager. The DDLA was approved on October 4, 2016 and the
Development Review (DR) for the project was approved by the City Council on February 21, 2017.
The first amendment to the DDLA was approved by the Poway Housing Authority and City Council
on June 20, 2017 to reflect an increased loan amount resulting from a new appraisal of the
property. The second amendment to the DDLA was approved on February 6, 2018 to increase
the Authority's construction loan amount from $500,000 to $750,000 and to give the Developers
additional opportunities to apply for 9% tax credits to finance the project. The full loan amount
from the Authority is $3,450,000 ($2,700,000 property purchase price plus $750,000 for
construction).
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attention: Executive Director
NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE
SECTIONS 6103 AND 27383
APN: 317-152-14-00
(Space above this line for Recorder's Use)
THIRD AMENDMENT TO LAND DISPOSITION, DEVELOPMENT
AND LOAN AGREEMENT
(Villa De Vida Poway)
This Third Amendment to Land Disposition, Development and Loan Agreement (the "Third
Amendment") is entered into as of April 2, 2019, by and among the Poway Housing Authority, a
public body, corporate and politic (the "Authority"), and Villa de Vida Poway, L.P., a California
limited partnership (the "Developer") with reference to the following facts:
RECITALS
A.Capitalized terms used in this Third Amendment, but not defined, shall have the
meaning set forth in the Original DDA (as defined herein below).
B.The Authority and the Developer entered into that certain Land Disposition,
Development and Loan Agreement dated as of October 4, 2016 and recorded in the Official
Records of San Diego County, California (the "Official Records") on April 10, 2017 as
Document No. 2017-016002, as amended by that certain First Amendment to the Land
Disposition, Development and Loan Agreement dated as of June 20, 2017 and recorded in the
Official Records on July 10, 2017 as Document No. 2017-03098, as further amended by that
certain Second Amendment to the Land Disposition, Development and Loan Agreement dated as
of February 6, 2018 and recorded in the Official Records on March 22, 2018 as Document No.
2018-0113457, as such may be further amended from time to time (collectively, the "Original
DDA").
C.The purpose of this Third Amendment, authorized under Section 10.18 of the
Original DDA, is to: (1) incorporate comments provided by the Investor to protect the Investor's
interest and approved Lender for the conventional loan and necessary to close the transaction; (2)
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revise the terms for the use of the Supportive Services Reserve (as defined herein below) and the
conditions for disbursements thereunder; and (3) to make necessary conforming amendments.
NOW, THEREFORE, the Authority and the Developer, agree as follows:
ARTICLE 1.
AMENDMENTS TO ORIGINAL DDA
Section 1.1 Amendment to Section 1.1(c)(9). Section 1.1(c)(9) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(9) Cash deposited into the "Operating Reserve" to replenish the Operating
Reserve (initially capitalized by the Developer in the approximate amount of Two
Hundred Fifty-Five Thousand Four Hundred Forty Dollars ($255,440), the total sum
on deposit in the Operating Reserve at any one time shall be capped at six (6) months
of gross rent from the Development, as such rent may vary from time to time; or such
other amount approved by the Authority as part of the approved Financing Plan and
annual operating budgets)."
Section 1.2 Amendment to Section 1.1(c)(10). Section 1.1(c)(10) of the Original
DDA is hereby deleted in its entirety and replaced and amended as follows:
"(10) Asset management fee and, for the first fifteen (15) years of the Term,
including the limited partner partnership management fee in the amount of Five
Thousand Dollars ($5,000) per year which amount may increase annually by up to
three percent (3%) and a general partner partnership management fee in the amount
of Twelve Thousand Five Hundred Dollars ($12,500) per year which amount may
increase annually by up to three percent (3%)."
Section 1.3 Amendment to Section 1.1(d). Section 1.1(d) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(d) "Approved Financing" means the loans, grants, and other financing to be
secured by the Developer, and approved by the Authority for the purpose of financing
the costs of the Development which shall be consistent with the approved Financing
Plan, and is anticipated to include:
(1)A construction loan from Wells Fargo Bank, National Association in the
approximate amount of Nineteen Million Five Hundred Six Thousand Four Hundred
Eighty-Seven Dollars ($19,506,487) (the "Bank Loan"). The Bank Loan is intended
to be paid down at the close of permanent financing to the approximate amount of
Two Million Eight Hundred Twenty-Two Thousand Dollars ($2,822,000);
(2)Low Income Housing Tax Credit investor limited partner capital
contribution in the approximate amount of Nineteen Million Eight Hundred Twenty-
Nine Thousand Nineteen Dollars ($19,829,019) (the "Tax Credit Investor Equity");
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(3)A loan from the County of San Diego in the approximate amount of Three
Million Four Hundred Forty-Five Thousand Dollars ($3,445,000) (the "County
Loan");
(4) Subject to the terms of Section 6.9(c) below, a loan from Villa de Vida, Inc.,
used to capitalize a resident services reserve in the amount not less than Two Million
Five Hundred Thousand Dollars ($2,500,000) (the "Supportive Services Reserve")."
Section 1.4 Amendment to Section 1.1(qq). Section 1.1(qq) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(qq) "County Loan" means the loan from the County of San Diego as further
described in Section 1.1(d)(3) above."
Section 1.5 Amendment to Section 1.1(tt). Section 1.1(tt) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(tt) "Investor" means Wells Fargo Affordable Housing Community
Development Corporation, its successors and/or assigns, as the Investor of the
Developer."
Section 1.6 Amendment to Section 2.4(b)(4). Section 2.4(b)(4) of the Original DDA
is hereby deleted in its entirety and replaced and amended as follows:
"(4) A copy of the commitment or commitments obtained by the Developer for
any loans, grants, or other financial assistance (including, but not limited to, a Tax
Credit Reservation letter from TCAC, evidence of the County Loan from the County,
and construction and permanent loans from private lenders) to assist in financing the
construction of the Improvements certified by the Developer to be true and correct
copies thereof."
Section 1.7 Amendment to Section 2.6. Section 2.6 of the Original DDA is hereby
deleted in its entirety and replaced and amended as follows:
"Section 2.6 Other Financing.
As of the date of the Third Amendment, the Developer has secured financing
commitments for the Development and no other financing applications are necessary
to fund the construction of the Development. The Developer shall also submit to the
Authority evidence reasonably satisfactory to the Authority that any conditions to the
release or expenditure of funds described in the approved Financing Plan as the
sources of funds to pay the costs of constructing the Improvements have been met or
will be met by the Close of Escrow and subject to the Developer's satisfaction of
standard disbursement preconditions required to be satisfied on a periodic basis, for
constructing the Improvements. Submission by the Developer, and approval by the
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Authority, of such evidence of funds availability shall be a condition precedent to the
Authority's obligation to convey the Property to the Developer"
Section 1.8 Amendment to Section 3.2. Section 3.2 of the Original DDA is hereby
deleted in its entirety and replaced and amended as follows:
"Section 3.2 Purchase Price.
The purchase price for the Property is Two Million Seven Hundred Thousand Dollars
($2,700,000), to be paid to the Authority by the Developer at the Close of Escrow."
Section 1.9 Amendment to Section 6.9. Section 6.9 of the Original DDA is hereby
deleted in its entirety and replaced and amended as follows:
"Section 6.9 Resident Services Plan and Resident Services Budget.
(a) Resident Services Funded from Operating Income. Developer hereby
agrees to contract for a resident services coordinator at least one (1) month prior to
completion of the Improvement pursuant to Section 5.4 above. As part of the
Approved Financing Plan, the Authority has approved an annual sum of Ninety-Five
Thousand Dollars ($95,000), increased by two percent (2%) per year for the entire
Term, for Resident Services to be paid out of Operating Expenses. The Resident
Services to be paid out of Operating Expenses shall be used to pay for one fulltime
resident services coordinator, site events and activities, supplies, and reasonable costs
associated with the oversight and management of site-based staff not to exceed 10%
of staffing costs (inclusive of benefits) consistent with the Resident Services Plan.
(b) Additional Resident Services Funded from Supportive Services Reserve. In
addition, the Developer has committed to fund a "Supportive Services Reserve"
which the Developer is capitalizing with: (1) a deposit of One Million Seven
Hundred Two Thousand Five Hundred Ninety-Two Dollars ($1,702,592) at the Close
of Escrow; (2) an additional deposit of Seven Hundred Ninety-Seven Thousand Four
Hundred Eight Dollars ($797,408) which will be made at least two (2) months prior
to the completion of construction; and (3) commencing ten (10) years from the
Completion of Construction of the Development and continuing for the entire Term
of the Agreement, the Developer shall make additional deposits of the Developer's
share of Residual Receipts in the amounts shown on the Reserve Draw Schedule (the
"Partnership Cash Flow Deposits", and collectively the "Supportive Services
Deposits"). The Supportive Services Deposits are to be held in the Supportive
Service Reserve and shall be used exclusively to fund "Additional Resident Services"
(defined below) at the Development in excess of those payable from Annual
Operating Expenses. The Additional Resident Services shall be proposed by the
Developer on an annual basis as part of the updates to the Resident Service Plan
required under subsection (d) below, consistent with the requirements of this
subsection (b). The Parties agree and acknowledge that the Supportive Services
Reserve was established to pay solely for Additional Services to be provided to
residents of the Development, including a part-time activity coordinator and
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reasonable costs associated with the oversight and management of site-based staff,
not to exceed ten percent (10%) of direct staffing costs (inclusive of benefits). No
funds deposited into the Supportive Services Reserve may be used for any other
purposes without prior written approval from the Authority. The expenditures from
the Supportive Services Reserve shall be excluded from Annual Operating Expenses
and any future deposits into the Supportive Services Reserve shall be excluded from
Operating Income and shall instead be solely dedicated to paying for the Additional
Resident Services approved by the Authority under the Services Budget and Services
Plan. Notwithstanding anything to the contrary, the Partnership Cash Flow Deposits
required hereunder shall be subject to the rights of the Investor under the Developer's
partnership agreement, including but not limited to requirements to pay credit
adjusters, investor loans, unpaid asset management fees (including investor asset
management fees in excess of $5,000 which are payable under the terms of the
Developer's partnership agreement), replenishment of the Operating Reserve to the
full amount required under the Developer's partnership agreement, and 10% of the
remaining balance to the Investor (collectively, "LPA Priority Payments"). If and to
the extent the Partnership Cash Flow Deposits are not funded as a result of the
payment of LPA Priority Payments, then the Developer's general partners shall make
available the funds necessary to fully fund the Partnership Cash Flow Deposits and
any remaining Partnership Cash Flow is reserved to fund the Partnership Cash Flow
Deposits.
(c) As of the date of this Agreement, the Parties agree and acknowledge that the
Supportive Services Reserve draw down schedule, attached hereto as Attachment H,
incorporated herein by this reference (the "Reserve Draw Schedule"), will serve as a
baseline for the authorized annual expenditures from the Supportive Services
Reserve. The Reserve Draw Schedule, which is hereby approved by the Housing
Authority, allows for a maximum annual withdrawal of up to Fifty Thousand Dollars
($50,000) per year, increased by two percent (2%) per year for the Term, which the
Developer will use to fund Additional Services (the "Maximum Reserve Annual
Draw"), thereby ensuring that the Additional Resident Services shall be available to
the Residents of the Development for the entire Term. The Maximum Reserve
Annual Draw represents the baseline of Additional Resident Services that are
intended to remain relatively constant for the entire Term, subject to minor
modifications approved in writing by the Authority (including for example temporary
services or pilot programs not intended to continue for the Term) as part of the
Services Plan and Services Budget.
(d) Other than as provided in subsection (c) above, if the Developer desires to
provide services in excess of the Maximum Reserve Annual Draw, the Developer
shall be required to make additional deposits into the Supportive Services Reserve or
increase the Partnership Cash Flow Deposits in an amount necessary to fund the
additional services for the remainder of the Term or intended duration of such
Additional Services, as applicable, and shall also provide to the Authority for its
review and approval any necessary revisions to the Reserve Draw Schedule which, if
approved would also include a revision to the Maximum Reserve Annual Draw.
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(e) Services Budget. The Resident Services Budget attached hereto as
Attachment I, incorporated herein by this reference, is the approved initial Resident
Services Budget. No later than six (6) months prior to the completion of construction
of the Development pursuant to the Development Schedule, the Developer shall
submit to the Authority updates to the Resident Services Budget showing: (1) the
annual sum of Resident Services to be paid out of Operating Expenses pursuant to
subsection (a) above and provide details about the services to be provide utilizing
such funds; and (2) the actual amount of funds necessary to fund Additional Resident
Services for the upcoming year to be paid from the Support Services Reserve, which
subject to the terms specified in subsection (c) above, shall not exceed the Maximum
Reserve Annual Draw. Annually each year thereafter, within sixty (60) days prior to
the end of the Developer's fiscal year, the Developer shall submit to the Authority, for
its review and approval, any updates or revisions to the Resident Services Budget.
(f) Service Plan. The Resident Services Plan attached hereto as Attachment J,
incorporated herein by this reference is the approved initial Resident Services Plan for
the Development. No later than six (6) months prior to the completion of
construction of the Development pursuant to the Development Schedule, the
Developer shall submit to the Authority updates to the Resident Services Plan
showing: (1) detailed description of the required services being provided to the
Residents of the Development and being funded from Operating Expenses; and (2) a
detailed description of the Additional Resident Services being provided to the
Residents of the Development and being funded from the Supportive Services
Reserve. Annually each year thereafter, within sixty (60) days prior to the end of the
Developer's fiscal year, the Developer shall submit to the Authority, for its review
and approval, any updates or revisions to the Resident Services Plan.
Notwithstanding anything herein to the contrary, the Authority shall not prohibit the
Developer from providing any services required by any governmental agency or
lender or required under the TCAC use agreement.
(g) Review and Approval. Upon receipt by the Authority of the proposed
Resident Services Plan and Resident Services Budget, the Authority shall promptly
review the same and approve or disapprove the Resident Services Plan and the
Resident Services Budget within ten (10) working days after submission. If the
Resident Services Plan or Resident Services Budget are not approved by the
Authority, the Authority shall set forth in writing and notify the Developer of the
Authority's reasons for withholding such approval, which may include a request by
the Authority for a change in the nature or scope of resident services or a change in
service provider. The Developer shall thereafter submit a revised Resident Services
Plan and Resident Services Budget for Authority approval, which approval shall be
granted or denied within seven (7) working days in accordance with the procedures
set forth above. The approval of the Resident Services Plan and Resident Services
Budget required hereunder shall not be unreasonably conditioned, withheld or
delayed. Notwithstanding anything to the contrary, the Developer agrees and
acknowledges that the Authority shall have the right to disapprove changes to the
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Resident Services Plan and Resident Services Budget which: (1) are in excess of the
Maximum Reserve Annual Draw; or (b) cause fluctuations and disruption in the
services being provided to Residents of the Development. If the Authority does not
approve or disapprove updates to Resident Services Plan or Resident Services Budget
within the timeframe specified in this subsection (g), then the Resident Services Plan
or Resident Services Budget, as applicable, from the prior year shall remain in effect
and the Resident Services Budget from the prior year shall be subject to the two
percent (2%) escalators pursuant to subsections (a) and (c) respectively."
Section 1.10 Amendment to Section 7.4(f). Section 7.4(f) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(f) The Authority also hereby approves future Transfers of the limited partner
interest provided that: (1) such Transfers do not affect the timing and amount of the
limited partner capital contributions provided for in the Partnership Agreement
approved by the Authority, which shall be payable by either the existing limited
partner or the transferee of the limited partner's interest; and (2) in such Transfers, a
wholly owned affiliate of the limited partner retains a membership or partnership
interest and serves as a managing member or managing general partner of the
successor limited partner."
Section 1.11 Amendment to Section 8.4(a). Section 8.4(a) of the Original DDA is
hereby deleted in its entirety and replaced and amended as follows:
"(a) In the event that, following the Close of Escrow, this Agreement is
terminated as a result of an uncured Event of Default as defined in Section 8.4 and
such termination occurs prior to issuance of a Certificate of Completion for the
Improvements, then the Authority shall have the right to reenter and take possession
of the applicable portion of the Property still owned by the Developer, and all
Improvements thereon, and to revest in the Authority the estate of the Developer in
that portion of the Property."
Section 1.12 Amendment to Section 8.4(a)(13). Section 8.4(a)(13) of the Original DDA
is hereby deleted in its entirety and replaced and amended as follows:
"(13) The Developer breaches any other material provision of this Agreement
(including without limitation the failure to make the Supportive Services Deposits
and the Partnership Cash Flow Deposits required under Section 6.9 of this
Agreement) or any material provision in any of the other Authority Documents which
remains uncured after expiration of any applicable cure periods."
Section 1.13 Amendment to Section 8.5. Section 8.5 of the Original DDA is hereby
deleted in its entirety and replaced and amended as follows:
"(a) Upon the happening of any of the above-described events in Section 8.4, the
Authority shall first notify the Developer in writing of its purported breach, failure or
act above described, giving the Developer in writing forty-five (45) days from receipt
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of such notice to cure, or, if cure cannot be accomplished within said forty-five (45)
days, to commence to cure such breach, failure, or act. In the event the Developer
fails to cure within said forty-five (45) days, or if such breach is of a nature that it
cannot be cured within forty-five (45) days, Developer fails to commence to cure
within said forty-five (45) days and diligently complete such cure within a reasonable
time thereafter but in no event later than one hundred twenty (120) days, then the
Authority shall be afforded all of its rights at law or in equity by taking any or all of
the following remedies:
(1) Terminating this Agreement;
(2) Prosecuting an action for damages or specific performance; and
(3) Any of the remedies specified in Section 8.6 through Section 8.10.
(b) Notwithstanding the notice and cure periods set forth above, with respect to
a Developer Event of Default described in subsection 8.4(a)(6), (7), or (8) above, the
Authority may initiate enforcement action, without the provision of any notice, or the
passage of any cure period."
Section 1.14 Amendment to Section 8.6. Section 8.6 of the Original DDA is hereby
deleted in its entirety and replaced and amended as follows:
"Section 8.6 Right of Reverter.
(a) In the event that, following the Close of Escrow, this Agreement is
terminated pursuant to Section 8.5 and such termination occurs prior to issuance of a
Certificate of Completion for the Improvements, then the Authority shall have the
right to reenter and take possession of the applicable portion of the Property still
owned by the Developer, and all Improvements thereon, and to revest in the
Authority the estate of the Developer in that portion of the Property.
(b) Upon vesting or revesting in the Authority of title to any applicable portion
of the Property, the Authority shall promptly use its best efforts to resell such portion
of the Property consistent with the Authority's obligations under applicable laws.
Upon sale the proceeds shall be applied as follows:
(1) First, to reimburse the Authority for any costs it incurs in managing or
selling the Property (after exercising its right of reverter), including but not limited to
amounts to discharge or prevent liens or encumbrances arising from any acts or
omissions of the Developer;
(2) Second, to reimburse the Authority for reasonable damages to which it is
entitled under this Agreement by reason of the Developer's default;
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(3) Third, to the Developer for the reasonable cost of the Improvements the
Developer has placed on the Property and such other reasonable costs Developer has
incurred directly in connection with development of the Property that were not
financed by the Authority; and
(4) Fourth, any balance to the Authority.
(c) Notwithstanding anything herein to the contrary, the Authority confirms that
the right of reverter pursuant to this Section 8.6 and the Grant Deed shall be limited
by and shall not defeat, render invalid or limit any Security Financing Interest in
connection with the Bank Loan with respect to the Property or any rights or interest
of the Investor with respect to the Property.
(d) In the event of any foreclosure of any Security Financing Interest of Bank
(or any conveyance by deed in lieu thereof) and after the Authority receiving notice
of a default and an opportunity to cure (as provided in the subordination agreement
between the Bank, Authority and the Developer), Authority agrees that any right of
reverter set forth in this Section 8.6 and the Grant Deed shall be terminated and be
non-enforceable by the Authority. Notwithstanding anything to the contrary, the
Authority's rights and remedies under the Regulatory Agreement would remain in full
force and effect in the event of any foreclosure described in this subsection (d)."
Section 1.15 Amendment to Section 8.7. Section 8.7 of the Original DDA is hereby
deleted in its entirety and replaced and amended as follows:
"Section 8.7 Option to Repurchase, Reenter and Repossess.
(a) The Authority shall have the additional right at its option to repurchase,
reenter and take possession of the Property or any portion thereof owned by the
Developer with all improvements thereon, if after conveyance of title to any portion
of the Property, and prior to the issuance of the Certificate of Completion for the
Improvements, there is an uncured Developer Event of Default pursuant to Section
8.5.
(b) Such right to repurchase, reenter and repossess, to the extent provided in this
Agreement, shall be subordinate and subject to and be limited by and shall not defeat,
render invalid or limit:
(1) Any approved Senior Lien permitted by this Agreement; or
(2) Any rights or interest provided in this Agreement for the protection
of the holder of such Senior Lien Interests.
(c) To exercise its right to repurchase, reenter and take possession with respect
to the Property owned by the Developer, the Authority shall pay to the Developer in
cash an amount equal to:
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(1) The Purchase Price paid to the Authority for the applicable portion
of the Property pursuant to Section 3.2 not financed by the Authority; plus
(2) The fair market value of the improvements existing on the
applicable portion of the Property at the time of the repurchase, reentry and
repossession; less
(3) Any gains or income withdrawn or made by the Developer from
the applicable portion of the Property or the improvements thereon; less
(4) The value of any unpaid liens or encumbrances on the applicable
portion of the Property which the Authority assumes or takes subject to said
encumbrances.
(d) Notwithstanding anything herein to the contrary, the Authority confirms that
the option to purchase pursuant to this Section 8.7 and the Grant Deed shall be limited
by and shall not defeat, render invalid or limit any Security Financing Interest in
connection with the Bank Loan with respect to the Property or any rights or interest
of the Investor with respect to the Property.
(e) In the event of any foreclosure of any Security Financing Interest of Bank
(or any conveyance by deed in lieu thereof) and after the Authority receiving notice
of a default and an opportunity to cure (as provided in the subordination agreement
between the Bank, Authority and the Developer), Authority agrees that any option to
purchase set forth in this Section 8.7 and the Grant Deed shall be terminated and be
non-enforceable by the Authority. Notwithstanding anything to the contrary, the
Authority's rights and remedies under the Regulatory Agreement would remain in full
force and effect in the event of any foreclosure described in this subsection (e)."
Section 1.16 Amendment to Subsection 10.1. Section 10.1 of the Original DDA is
amended to add the Investor's address to read as follows:
"To the Investor:
Wells Fargo Affordable Housing
Community Development Corporation
MAC D1053-170
301 South College Street
Charlotte, NC 28288
Attention: Director of Tax Credit Asset Management"
Section 1.17 Amendment to Section 10.21. The Original DDA is hereby amended to
add Section 10.21 which shall read as follows:
"10.21 Investor's Rights.
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The Authority agrees to the following provisions for the benefit of the Developer's
Investor:
(a) The Authority will give the Investor a copy of any written notice that the
Authority gives to Borrower under this Agreement and the other Authority
Documents;
(b) The Authority will give the Investor forty-five (45) days after the Investor's
receipt of such notice to cure any default under the Authority Documents;
(c) If a default is incapable of being cured within the forty-five (45) day period
set forth in item (b) above, so long as such cure is commenced within the forty-five
(45) days and is being diligently pursued to completion, the Authority will give the
Investor additional time to cure such default, but in no event later than one hundred
twenty (120) days;
(d) If the Investor makes any such payment or otherwise cures such default, the
Authority will accept such action as curing such Default as if such payment or cure
were made by Borrower;
(e) The Authority will permit insurance and condemnation proceeds to be used
to rebuild the Development provided that: (1) sufficient funds are provided from other
sources to effectively rebuild the Affordable Development to a lawful multifamily
housing complex, and (2) subject to the rights of any senior lenders, the Authority
shall hold all such proceeds and disburse them based on the progress of construction,
subject to such additional reasonable conditions as the Authority may impose."
Section 1.18 Amendment to Exhibit D: Approved Financing Plan. The Financing
Proposal attached to the Original DDA as Exhibit D, is hereby replaced with the Financing Plan
attached to this Amendment as Attachment B, incorporated herein by this reference and is
approved as the Financing Plan pursuant to Section 5.11 of the Original Agreement.
Section 1.19 Amendment to Exhibit F: Form of Authority Promissory Note. The Form
of Authority Promissory Note attached to the Original DDA as Exhibit F, is hereby replaced with
the Form of Authority Promissory Note attached to this Amendment as Attachment C,
incorporated herein by this reference.
Section 1.20 Amendment to Exhibit G: Form of Authority Deed of Trust. The Form of
Authority Deed of Trust attached to the Original DDA as Exhibit G, is hereby replaced with the
Form of Authority Deed of Trust attached to this Amendment as Attachment D, incorporated
herein by this reference.
Section 1.21 Amendment to Exhibit B: Development Schedule. The Development
Schedule attached to the Original DDA as Exhibit B, is hereby replaced with the revised
Development Schedule attached to this Amendment as Attachment E, incorporated herein by this
reference.
14 of 119 April 2, 2019, Item # 4.1
1552\12\2547457.7 12
Section 1.22 Amendment to Exhibit E: Form of Authority Regulatory Agreement. The
form of Authority Regulatory Agreement attached to the Original DDA as Exhibit E, is hereby
replaced with the form of Authority Regulatory Agreement attached to this Amendment as
Attachment F, incorporated herein by this reference.
Section 1.23 Amendment to Exhibit H: Form of Notice of Affordability Restrictions on
Transfer of Property. The Form of Notice of Affordability Restrictions on Transfer of Property
attached to the Original DDA as Exhibit H, is hereby replaced with the Form of Notice of
Affordability Restrictions on Transfer of Property attached to this Amendment as Attachment G,
incorporated herein by this reference.
ARTICLE 2.
MISCELLANEOUS
Section 2.1 No Other Changes to the Agreement. Except as expressly modified by
this Third Amendment, all other provisions of the Original DDA remain unmodified and
continue in full force and effect.
Section 2.2 Conflicts with the Agreement. In the event of any conflict between this
Third Amendment and the Original DDA, the provisions of this Third Amendment shall prevail.
Section 2.3 Effective Date. This Third Amendment shall be effective on the date first
set forth above.
Section 2.4 Successors and Assigns. This Third Amendment shall be binding on and
inure to the benefit of the legal representatives, heirs, successors and assigns of the parties.
Section 2.5 California Law. This Third Amendment shall be governed by and
construed in accordance with the laws of the State of California.
Section 2.6 Counterparts; Multiple Originals. This Third Amendment may be
executed in multiple originals, each of which is deemed to be an original, and may be signed in
counterparts.
Section 2.7 Recordation. This Third Amendment shall be recorded against the
Developer's interest in the Property described in the attached Attachment A, at the Close of
Escrow.
15 of 119 April 2, 2019, Item # 4.1
13
1552\12\2547457.7
IN WITNESS WHEREOF, the Authority and the Developer have executed this
Agreement in triplicate on or as of the date first above written.
DEVELOPER:
VILLA DE VIDA POWAY, L.P., a California limited partnership
By: Villa de Vida GP, LLC, a California limited liability
company, its Managing General Partner
By: Mercy Housing Calwest, a California nonprofit
public benefit corporation, its sole member and
manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
By: VDV POWAY LLC, a California limited liability
company, its Administrative General Partner
By: Villa de Vida, Inc., a California nonprofit public
benefit corporation, its sole member and manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
16 of 119 April 2, 2019, Item # 4.1
1552\12\2547457.7 14
AUTHORITY:
POWAY HOUSING AUTHORITY, a public body
corporate and politic
B y: ________________________________
Tina White, Executive Director
Date: _________________________
APPROVED AS TO FORM:
GOLDFARB & LIPMAN LLP,
Authority Special Counsel
B y: _______________________
Rafael Yaquian
17 of 119 April 2, 2019, Item # 4.1
1552\12\2547457.7 15
STATE OF CALIFORNIA )
)
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.
______________________________________
Name: ______________________________
Name: Notary Public
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.
18 of 119 April 2, 2019, Item # 4.1
1552\12\2547457.7 16
STATE OF CALIFORNIA )
)
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.
______________________________________
Name: ______________________________
Name: Notary Public
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.
19 of 119 April 2, 2019, Item # 4.1
A-1
1552\12\2547457.7
ATTACHMENT A
LEGAL DESCRIPTION
The land is situated in the State of California, County of San Diego, City of Poway, and is
described as follows:
20 of 119 April 2, 2019, Item # 4.1
B-1
1552\12\2547457.7
ATTACHMENT B
FINANCING PLAN
The attached Financing Plan hereby supersedes the Financing Proposal attached as Exhibit D of
the Original DDA.
21 of 119 April 2, 2019, Item # 4.121 of 119 April 2, 2019, Item # 4.1
Villa de Vida - Poway
Prepared For:Mercy Housing California
Prepared By:California Housing Partnership Corporation
Version:v 2.27 (pre-closing)
Revised:3/28/19
Notes:
Sources of Funds…………………………………..……..1 Threshold Basis Limits……………………...……………7
Uses of Funds…………………………………...……….1a 15-Year Cash Flow……………………...……………8
Unit Mix & Rental Income…………………………………..2 Outstanding Debt & Reserves……………………...……………8a
Rent Comparison Table………..……………………………………..2a Schedule of Deductions……………………...……………9
Tax Credit Calculation…………………………………..3 Analysis of Taxable Income……………………...……………10
Base Year Income & Expense…………………………………..4 Capital Account & Exit Tax Liability……………………...……………11
Mortgage Calculation & Bond Ratios…………………………………..4a Investment Summary……………………...……………12
Lease-up/Placed-in-Service Schedule…………………………………..5 Net Quarterly Benefits……………………...……………13
Net Syndication Proceeds…………………………………..6
PAGE 1
PERMANENT OID TERM /
AMOUNT INT RATE INT RATE AMORT COMMENTS
CCRC Permanent Loan 2,822,000 5.19% 15 All-in rate (underwriting & cash flow):5.19%
City Land Loan 2,700,000 3.00%1.76%57
City of Poway 750,000 3.00%1.76%57
GP Loan (Villa de Vida fundraising)2,500,000 0.00%0.00%55
SD County IHTF NOFA 3,445,000 3.00%1.79%55 Mandatory Interest payment:0.00%
Deferred Developer Fee 600,000 0.00%City of Poway requires $600K deferred fee 2.53%
Capital Contributions NET FIGURES (TCAC)Total currently paid developer fee:1,400,000$
General Partner 100 % ownership:0.01%
Limited Partners (WFAHCDC)19,829,019 19,679,019 % ownership:99.99%
Credit pricing (Federal LIHTC):$1.0050
TOTAL SOURCES 32,646,119 32,496,119 Credit pricing (State LIHTC):$0.800
Surplus/(Shortfall)(0)
CONSTRUCTION
AMOUNT INT RATE TERM (Mo.)
WFB Construction Loan 19,506,487 5.60%28 6,310,000$
City Land Loan 2,700,000 3.00%28
City of Poway 700,000 3.00%28 $50,000 hold back until Permanent Conversion
GP Loan (Villa de Vida fundraising)1,702,592 0.00%28
SD County IHTF NOFA 3,445,000 3.00%28
Costs Deferred Until Completion*1,909,038
Deferred Developer Fee 600,000
Capital Contributions NET FIGURES (TCAC)
General Partner 100 0.00%
Limited Partners (WFAHCDC)2,082,902 1,932,902
TOTAL SOURCES 32,646,119 32,496,119
Surplus/(Shortfall)0
COSTS DEFERRED UNTIL CONVERSION DEVELOPER FEE PAYMENT SCHEDULE
TCAC Monitoring Fee 21,730 Total paid developer fee 1,400,000$
Operating Reserve (6 mos) 369,900
Syndication consulting - LP Admission 600,000
GP Loan (Services Reserve)797,408 100% Completion -
Legal: Perm Close - Completion (Equity as source)100,000
Title/Recording/Escrow - Permanent 20,000 Permanent Conversion 400,000
Audit/Cost Certification - 8609 300,000
Developer Fee 700,000
Total 1,400,000
1,909,038
INTEREST RATE STACK Construction Permanent HCIDLA LEVERAGING SCORE
Tranche A Tranche B Total Sources (not including HCID or equity)3,572,000$
Total Development Costs 32,646,119
30-day LIBOR/est. rate 2.500%2.440%0.000%
Lender Spread 1.600%2.650%2.650%Ratio Sources to TDC 10.942%
Cushion 1.500%0.000%0.100%0.000%
TOTAL 5.60%0.00%5.19%2.65%
Rates Revised:3/22/19
TABLE OF CONTENTS
SOURCES OF FUNDS
22 of 119 April 2, 2019, Item # 4.1
Villa de Vida - Poway PAGE 1-A
Uses of Funds Version:
Revised:
Total Hard Costs 15,978,268 100.00%
TOTAL TOTAL DEPRECIABLE TAX CREDIT ELIGIBLE
RESIDENTIAL COMM NON- CONST/
TOTAL 100.00%0.00%DEPREC RESIDENTIAL COMM EXPENSE AMORTIZE REHAB ACQUIS.
ACQUISITION COSTS
Acquisition: Land 2,700,000 2,700,000 0 2,700,000
Offsite Improvements 0 0 0 0 0 0
GENERAL DEVELOPMENT COSTS
Residential Construction 12,271,650 12,271,650 0 0 12,271,650 0 0 12,271,650
Parking 59,778 59,778 0 0 59,778 0 0 59,778
Demolition 117,958 117,958 0 117,958 0 0 0 0
Site Improvements/Landscape 1,006,034 1,006,034 0 0 1,006,034 0 1,006,034
Furnishings (included in contract)520,147 520,147 0 520,147 0 520,147
Contractor General Conditions 931,216 931,216 0 0 931,216 0 931,216
Contractor O&P 783,249 783,249 0 0 783,249 0 783,249
GC Bond & Insurance 288,236 288,236 0 0 288,236 0 288,236
Construction Contingency 2,305,517 2,305,517 0 0 2,305,517 0 2,305,517
Local Permits/Fees 375,000 375,000 0 0 375,000 0 375,000
Local Development Impact Fees 786,481 786,481 0 0 786,481 0 786,481
Phase I/Asbestos/Toxics 25,000 25,000 0 0 25,000 0 25,000
Wage Monitoring 45,000 45,000 0 45,000 0 45,000
Architecture 642,579 642,579 0 642,579 0 642,579
Survey & Engineering 330,000 330,000 0 330,000 0 330,000
Appraisal 15,000 15,000 0 0 15,000 0 0 15,000
Market Study 15,000 15,000 0 15,000 0 15,000
Predevelopment Loan Interest & Fees 50,360 50,360 0 50,360 0 0 0 0
Construction Interest Reserve 1,733,200 1,733,200 0 1,114,200 0 619,000 1,114,200 0
Title/Recording/Escrow - Acquisition 20,000 20,000 0 20,000 0 0 0 0
Title/Recording/Escrow - Construction 65,000 65,000 0 65,000 0 65,000 0
Title/Recording/Escrow - Permanent 20,000 20,000 0 20,000
Insurance 98,000 98,000 0 98,000 0 0 98,000 0
Real Estate Taxes 55,978 55,978 0 55,978 0 0 55,978 0
Soft Cost Contingency 349,228 349,228 0 349,228 0 349,228
TCAC Application/Monitoring Fee 157,858 157,858 0 157,858
Legal: Acquisition 0 0 0 0 0 0
Construction Closing 85,000 85,000 0 85,000 0 85,000 0
Permanent Closing 20,000 20,000 0 20,000
Syndication Consulting 65,000 65,000 0 65,000 0 0 0
Audit/Cost Certification 35,000 35,000 0 0 0 35,000 0 0
Furnishings (common area)225,000 225,000 0 225,000 0 225,000
Replacement Reserve 20,250 20,250 0 20,250
Operating Reserve (6 mos) 369,900 369,900 0 369,900
Marketing/Lease-Up Account 135,000 135,000 0 135,000
Utility Connection Fees 750,000 750,000 0 750,000 0 750,000
Construction Management 336,000 336,000 0 336,000 0 336,000
Supportive Services Reserve* 2,500,000 2,500,000 0 2,500,000 0 0 0
Syndication Costs 50,000 50,000 0 50,000 0 0 0
Developer Fee 2,000,000 2,000,000 0 2,000,000 0 1,400,000 0
COSTS OF ISSUANCE/FINANCING FEES
Lender Expenses & Inspections 40,000 40,000 0 40,000 0 40,000
Lender Counsel 80,000 80,000 0 80,000 0 80,000
Lender/Credit Enhancement Fees (constr loan)146,300 146,300 0 146,300 146,300
Lender/Credit Enhancement Fees (perm loan)21,200 21,200 0 21,200 0
Subtotal -Costs of Issuance 287,500 287,500 0 0 266,300 0 0 21,200 266,300 0
TOTAL DEVELOPMENT COSTS 32,646,119 32,646,119 0 5,893,468 25,744,593 0 789,000 219,058 25,144,593 0
TDC per Unit 604,558
*This reserve is fundraised by Villa de Vida.
Maximum Seller Loan 6%MAXIMUM DEVELOPER FEE CALCULATION
Syndication Costs:150,000 Constr Acq Total
Purchase Price 2,700,000 Max TCAC Fee (Per Limit)2,200,000 - 2,200,000
Max. TCAC Fee in TDC (cost efficiency)1,585,848 - 1,585,848
Payoff: first mortgage 96,428 Max. TCAC Fee in basis 1,400,000 - 1,400,000
-
Maximum Seller Note*2,603,572 Ratio 100.00%0.00%100.00%
Maximum Fee per Poway 2,000,000 - 2,000,000
MAXIMUM FEE PER TCAC APP 2,000,000 - 2,000,000
v 2.27 (pre-closing)
March 28, 2019
23 of 119 April 2, 2019, Item # 4.1
Villa de Vida - Poway PAGE 2
Unit Mix & Rental Income Version:
Revised:
UTILITY
AVERAGE AFFORDABILITY FOR UNIT MIX ALLOWANCES
SPECIAL NEEDS UNITS 40.00%0 BR 0 $0
1 BR 50 $37
AVERAGE AFFORDABILITY FOR 2 BR 4 $47
ALL UNITS (%AMI) 44.53%3 BR 0 $0
4 BR 0 $0
RESIDENTIAL INCOME
TAX-CREDIT ELIGIBLE - TIER 1:30%AMI LIHTC CA RDL: ELI TCAC SN Percentage of Targeted Units:13.2%
* 6 1BR and 1 2BR unit restricted to CA RDL: ELI per Poway Reg Agmt
% MEDIAN PER-UNIT PER-UNIT TOTAL TOTAL
PER UNIT TOTAL INCOME MONTHLY MONTHLY MONTHLY ANNUAL
UNIT TYPE NUMBER SQ FT SQ FT AFFORDABLE GROSS RENT NET RENT NET RENT NET RENT
1 BR 6 600 3,600 26.9%491 454 2,724 32,688
2 BR 1 850 850 25.2%552 505 505 6,060
TOTAL 7 4,450 3,229 38,748
TAX-CREDIT ELIGIBLE - TIER 2:40%AMI LIHTC TCAC SN Percentage of Targeted Units:49.1%
* 6 1BR and 1 2BR unit restricted to CA RDL: VLI; 11 1BR unit restricted to CA RDL: LI per Poway Reg Agmt
% MEDIAN PER-UNIT PER-UNIT TOTAL TOTAL
PER UNIT TOTAL INCOME MONTHLY MONTHLY MONTHLY ANNUAL
UNIT TYPE NUMBER SQ FT SQ FT AFFORDABLE GROSS RENT NET RENT NET RENT NET RENT
1 BR 25 600 15,000 40.0%730 693 17,325 207,900
2 BR 1 850 850 40.0%876 829 829 9,948
TOTAL 26 15,850 18,154 217,848
TAX-CREDIT ELIGIBLE - TIER 3:50%AMI LIHTC TCAC SN Percentage of Targeted Units:13.2%
* 1 2BR unit restricted to CA RDL: VLI per Poway Reg Agmt
% MEDIAN PER-UNIT PER-UNIT TOTAL TOTAL
PER UNIT TOTAL INCOME MONTHLY MONTHLY MONTHLY ANNUAL
UNIT TYPE NUMBER SQ FT SQ FT AFFORDABLE GROSS RENT NET RENT NET RENT NET RENT
1 BR 6 600 3,600 50.0%913 876 5,256 63,072
2 BR 1 850 850 42.0%920 873 873 10,476
TOTAL 7 4,450 6,129 73,548
TAX-CREDIT ELIGIBLE - TIER 4:50%AMI LIHTC SN (non-TCAC)Percentage of Targeted Units:3.8%
% MEDIAN PER-UNIT PER-UNIT TOTAL TOTAL
PER UNIT TOTAL INCOME MONTHLY MONTHLY MONTHLY ANNUAL
UNIT TYPE NUMBER SQ FT SQ FT AFFORDABLE GROSS RENT NET RENT NET RENT NET RENT
1 BR 2 600 1,200 50.0%913 876 1,752 21,024
2 BR 0 850 0 0.0%0 873 0 0
TOTAL 2 1,200 1,752 21,024
TAX-CREDIT ELIGIBLE - TIER 5:60%AMI LIHTC SN (non-TCAC)Percentage of Targeted Units:20.8%
% MEDIAN PER-UNIT PER-UNIT TOTAL TOTAL
PER UNIT TOTAL INCOME MONTHLY MONTHLY MONTHLY ANNUAL
UNIT TYPE NUMBER SQ FT SQ FT AFFORDABLE GROSS RENT NET RENT NET RENT NET RENT
1 BR 11 600 6,600 60.0%1,095 1,058 11,638 139,656
2 BR 0 850 0 0.0%0 1,267 0 0
TOTAL 11 6,600 11,638 139,656
* All units underwritten at 2007 50% AMI rents
MANAGER UNITS
% MEDIAN PER-UNIT PER-UNIT TOTAL TOTAL
PER UNIT TOTAL INCOME MONTHLY MONTHLY MONTHLY ANNUAL
UNIT TYPE NUMBER SQ FT SQ FT AFFORDABLE GROSS RENT NET RENT NET RENT NET RENT
2 BR 1 600 600 0.0%0 0 0 0
TOTAL 1 600 0 0
SECTION 8 (PBVs) - 20-year contract from HACSD
PER-UNIT PER UNIT PER-UNIT TOTAL TOTAL
INCOME MONTHLY SECTION 8 MONTHLY MONTHLY ANNUAL
UNIT TYPE NUMBER TIER NET RENT NET RENT S8 PREMIUM SECTION 8 PREMIUM S8 PREMIUM
1 BR 6 30%454 1,543 1,089 6,534 78,408
1 BR 25 40%693 1,543 850 21,250 255,000
1 BR 6 50%876 1,543 667 4,002 48,024
1 BR 2 50%876 1,543 667 1,334 16,008
1 BR 11 60%1,058 1,543 485 5,335 64,020
2 BR 1 30%505 2,003 1,498 1,498 17,976
2 BR 1 40%829 2,003 1,174 1,174 14,088
2 BR 1 50%873 2,003 1,130 1,130 13,560
TOTAL 53 42,257 507,084
SECTION 8 PREMIUM (annual Section 8 income less total annual base rents)507,084
TOTAL - BASE RENT PLUS SECTION 8 PREMIUM 83,159 997,908
TOTAL RESIDENTIAL INCOME TOTAL TOTAL TOTAL
UNITS MONTHLY (Net)ANNUAL
54 83,159 997,908
TOTAL SQ FT - TAX CREDIT ELIGIBLE 28,100
TOTAL SQ FT - NON-TAX CREDIT ELIGIBLE 0
TOTAL RENTABLE SQ FT 28,100
MISCELLANEOUS INCOME PER-UNIT TOTAL TOTAL
MONTHLY MONTHLY ANNUAL
Laundry/Vending 4.58 248 2,970
Financial & Other Revenue 2.00 108 1,296
v 2.27 (pre-closing)
March 28, 2019
24 of 119 April 2, 2019, Item # 4.1
Villa de Vida - Poway PAGE 3
Tax Credit Calculation Version:
Revised:
FEDERAL CALIFORNIA
CONST/ CONST/
ACQUIS REHAB TOTAL ACQUIS REHAB TOTAL
TOTAL ELIGIBLE COSTS 0 25,144,593 25,144,593 0 25,144,593 25,144,593
Less:
Non-Eligible (Parking): 0 0 0 0 0
ELIGIBLE BASIS 0 25,144,593 25,144,593 0 25,144,593 25,144,593
THRESHOLD BASIS LIMIT 19,657,092
Voluntary Reduction 0
REQUESTED ELIGIBLE BASIS 0 19,657,092 19,657,092 0 25,144,593 25,144,593
HIGH COST ADJUSTMENT (Y/N)Y 100.0%130.0%2018 SADDA 100.0%100.0%
ADJUSTED ELIGIBLE BASIS 0 25,554,219 25,554,219 0 25,144,593 25,144,593
APPLICABLE FRACTION*100.0%100.0%100.0%100.0%
QUALIFIED CREDIT BASIS 0 25,554,219 25,554,219 0 25,144,593 25,144,593
CREDIT REDUCTION 0.00%0 0 0
ADJUSTED QUALIFIED CREDIT BASIS 0 25,554,219 25,554,219
CREDIT RATE Federal Annual/Yr 1-3 State 3.32%9.00%3.32%9.00%
Year 4 - State 3.04%3.00%
MAXIMUM CREDIT AMOUNT PER COSTS
Federal Annual/Yr 1-3 State 0 2,299,880 2,299,880 0 6,789,040 6,789,040
Year 4 - State 0 754,338 754,338
Total 0 7,543,378 7,543,378
ACTUAL TCAC CREDIT RESERVATION
Federal Annual/Total State N/A N/A 1,973,234 N/A N/A N/A
MAXIMUM ALLOWABLE CREDITS
Federal Annual/Total State 0 1,973,234 1,973,234 7,543,378
Adjustment to State Credit for Gap -7,543,378
MAXIMUM ALLOWABLE - TEN YEAR TOTAL 19,732,340 0
v 2.27 (pre-closing)
March 28, 2019
25 of 119 April 2, 2019, Item # 4.1
Villa de Vida - Poway PAGE 4
Base Year Income & Expense Version:
Revised:
INCOME
Scheduled Gross Income - Special Needs 330,144
Scheduled Gross Income - Special Needs (non-TCAC restricted)160,680
Section 8 Premium 507,084
Misc. Income 4,266
Vacancy Loss - Special Needs 5.0%(24,541)
Vacancy Loss - Section 8 Premium 5.0%(25,354)
Vacancy Loss - Misc Income 5.0%(213)
EFFECTIVE GROSS INCOME 952,065
EXPENSES - RESIDENTIAL
Administrative
Advertising 540
Legal 5,500
Accounting/Audit 8,100
Misc. Admin Expense 9,726
Telephone & Cable 15,070
Total Administrative 38,936
Management Fee 47,952
Utilities
Electricity 27,000
Gas 8,586
Total Utilities 35,586
Water/Sewer 32,940
Payroll/Payroll Taxes
Manager Payroll 102,000
Maintenance Payroll 74,880
Health Insurance & Other Employee Benefits 42,202
Total Payroll/Payroll Taxes 219,082
Insurance (Hazard)64,500
Property Taxes 2,500
Maintenance
Painting 500
Trash Removal 14,580
Grounds 5,900
Exterminating 5,316
Elevator 5,584
Misc. operating supplies, contracts and expenses 28,234
Total Maintenance 60,114
Replacement Reserve ($375/du per City)20,250
Other
Resident Services 95,000
Annual Monitoring Fee (SD HCD)4,000
Transit Passes 5,832
Total Other 104,832
TOTAL EXPENSES - RESIDENTIAL 626,692
Per Unit Per Year (incl. Reserves)11,605
Per Unit Per Year (w/o Reser., Taxes, Tenant Serv.)9,317
NET AVAILABLE INCOME 325,373
NET AVAILABLE INCOME (w/o Section 8)(156,357)
v 2.27 (pre-closing)
March 28, 2019
26 of 119 April 2, 2019, Item # 4.1
Villa de Vida - Poway PAGE 4-B
Mortgage Calculation & Bond Ratios Version:
Revised:
MAXIMUM MORTGAGE CALCULATION
Permanent Loan
Financing Type:CCRC Permanent Loan
Net Operating Income (less Operating Subsidy)(156,356)
Section 8 Income 95%481,730
Adjusted NOI 325,373
DSC 1.20
Available for Debt Service 271,144
Less: debt service on VHHP -
Less: debt service on AHSC loan -
Less: debt service on Seller Financing -
Available for Debt Service 271,144
Underwriting Maximum
Constraint Loan Amount
Debt Service Coverage 1.20 2,822,000
Max Loan Necessary for Feasibility 2,822,000
Loan-to-Value 80.0%3,386,230
Percent of Transaction Costs 100.0%32,646,119
Statutory Limit 19,657,092
Commitment NA
Bond Loan Commitment NA
MAXIMUM MORTGAGE NA
MAXIMUM MORTGAGE 2,822,000
LOAN CONSTANT/TIC CALCULATION
Tranche A IRP Tranche B
Underwriting Tranche Underwriting
Bond/Loan Rate 5.19000%5.19000%2.65000%2.65000%2.65000%
Term (Yr)15.00 15.00 20.00 20.00 20.00
Mortgage Insurance Premium 0.00000%0.00000%0.00000%0.00000%0.00000%
Amort (P&I)4.41872%4.41872%3.79689%3.79689%3.79689%
Loan Constant 9.60872%9.60872%6.44689%6.44689%6.44689%
Imputed Total Interest Cost (TIC)5.19000%7.42029%2.65000%2.65000%2.65000%
v 2.27 (pre-closing)
March 28, 2019
27 of 119 April 2, 2019, Item # 4.1
Villa de Vida - Poway PAGE 5
Lease-up/Placed-in-Service Schedule Version:
Revised:
LIHTC LEASE-UP SCHEDULE BUILDING PLACED-IN-SERVICE SCHEDULE OPERATIONS SCHEDULE
Lease-Up Start (Year):2020 Start Year:2020 Start Year:2020
Month # Units Percent Month Building ## Units Percent Month No. Units Percent
Jan-20 0 0.0%Jan-20 0 0 0.0%Jan-20 0 0.0%
Feb-20 0 0.0%Feb-20 0 0 0.0%Feb-20 0 0.0%
Mar-20 0 0.0%Mar-20 0 0 0.0%Mar-20 0 0.0%
Apr-20 0 0.0%Apr-20 0 0 0.0%Apr-20 0 0.0%
May-20 0 0.0%May-20 0 0 0.0%May-20 0 0.0%
Jun-20 0 0.0%Jun-20 0 0 0.0%Jun-20 0 0.0%
Jul-20 0 0.0%Jul-20 0 0 0.0%Jul-20 0 0.0%
Aug-20 0 0.0%Aug-20 0 0 0.0%Aug-20 0 0.0%
Sep-20 0 0.0%Sep-20 0 0 0.0%Sep-20 0 0.0%
Oct-20 8 15.1%Oct-20 1 9 16.7%Oct-20 9 16.7%
Nov-20 9 17.0%Nov-20 0 9 16.7%Nov-20 9 16.7%
Dec-20 9 17.0%Dec-20 0 9 16.7%Dec-20 9 16.7%
TOTAL 26 49.1%TOTAL 27 50.0%TOTAL 27 50.0%
% Q.O. in First Year 8.0%% PIS in First Year 8.3%% Operating in First Year 8.3%
LIHTC LEASE-UP SCHEDULE BUILDING PLACED-IN-SERVICE SCHEDULE OPERATIONS SCHEDULE
Lease-Up Start (Year):2021 Start Year:2021 Start Year:2021
Month # Units Percent Month Building ## Units Percent Month No. Units Percent
Jan-21 35 66.0%Jan-21 1 36 66.7%Jan-21 36 66.7%
Feb-21 9 17.0%Feb-21 0 9 16.7%Feb-21 9 16.7%
Mar-21 9 17.0%Mar-21 0 9 16.7%Mar-21 9 16.7%
Apr-21 0 0.0%Apr-21 0 0 0.0%Apr-21 0 0.0%
May-21 0 0.0%May-21 0 0 0.0%May-21 0 0.0%
Jun-21 0 0.0%Jun-21 0 0 0.0%Jun-21 0 0.0%
Jul-21 0 0.0%Jul-21 0 0 0.0%Jul-21 0 0.0%
Aug-21 0 0.0%Aug-21 0 0 0.0%Aug-21 0 0.0%
Sep-21 0 0.0%Sep-21 0 0 0.0%Sep-21 0 0.0%
Oct-21 0 0.0%Oct-21 0 0 0.0%Oct-21 0 0.0%
Nov-21 0 0.0%Nov-21 0 0 0.0%Nov-21 0 0.0%
Dec-21 0 0.0%Dec-21 0 0 0.0%Dec-21 0 0.0%
TOTAL 53 100.0%TOTAL 54 100.0%TOTAL 54 100.0%
% Q.O. in First Year 95.8%% PIS in First Year 95.8%% Operating in First Year 95.8%
DEVELOPMENT SCHEDULE
Closing 2Q 2019
Construction start May 2019 17 months construction
Construction completion October 2020 4Q 2020
Placed in service 4Q 2020
Qualified occupancy 1Q 2021
Permanent conversion 3Q 2021July 2021
Lease Up/Mo Bldg. PIS by Month Completed Lease Up/Mo
Bldg. PIS by Month
March 2021
Completed Lease Up/Mo
v 2.27 (pre-closing)
March 28, 2019
Lease Up/Mo
October 2020
April 2019
28 of 119 April 2, 2019, Item # 4.1
Villa de Vida - Poway67.932 PAGE 8 55-Year Cash Flow (True Debt)Attachment 5BVersion:Revised:ASSUMPTIONS:Perm Loan - % Debt Svc Yr 00.00% Rent Increase:2.50%Perm Loan - % Debt Svc Yr 141.67%Year 1 income @ current HAP rents:83.33%10 mos @ post-rehab rentsTransition Expenses Increase:3.50%Perm Loan - % Debt Svc Yr 2100.00%Year 1 income @ MUB HAP rents:16.67%2 mos @ post-rehab rentsReserve Reserve Increase:0.00%Percent Lease-up Yr 1100.00% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2018201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042GROSS POTENTIAL INCOME - SPECIAL NEEDS27,512 324,298 346,858 355,529 364,417 373,528 382,866 392,437 402,248 412,305 422,612 433,178 444,007 455,107 466,485 478,147 490,101 502,353 514,912 527,785 540,979 554,504 568,366 GROSS POTENTIAL INCOME - SPECIAL NEEDS (NON-TCAC)13,390 157,835 168,814 173,035 177,361 181,795 186,340 190,998 195,773 200,667 205,684 210,826 216,097 221,499 227,037 232,713 238,530 244,494 250,606 256,871 263,293 269,875 276,622 Section 8 Premium 42,257 498,104 532,755 546,074 559,726 573,719 588,062 602,764 617,833 633,278 649,110 665,338 681,972 699,021 716,496 734,409 752,769 771,588 790,878 810,650 830,916 851,689 872,981 Misc. Income356 4,190 4,482 4,594 4,709 4,827 4,947 5,071 5,198 5,328 5,461 5,597 5,737 5,881 6,028 6,178 6,333 6,491 6,654 6,820 6,990 7,165 7,344 Vacancy Loss - Special Needs5.0%(573)(16,215)(17,343)(17,776)(18,221)(18,676)(19,143)(19,622)(20,112)(20,615)(21,131)(21,659)(22,200)(22,755)(23,324)(23,907)(24,505)(25,118)(25,746)(26,389)(27,049)(27,725)(28,418)Vacancy Loss - Section 8 Premium5.0%(880)(24,905)(26,638)(27,304)(27,986)(28,686)(29,403)(30,138)(30,892)(31,664)(32,456)(33,267)(34,099)(34,951)(35,825)(36,720)(37,638)(38,579)(39,544)(40,532)(41,546)(42,584)(43,649)Vacancy Loss - Misc & non-SN5.0%(286)(8,101)(8,665)(8,881)(9,103)(9,331)(9,564)(9,803)(10,049)(10,300)(10,557)(10,821)(11,092)(11,369)(11,653)(11,945)(12,243)(12,549)(12,863)(13,185)(13,514)(13,852)(14,198)GROSS EFFECTIVE INCOME 81,775 935,206 1,000,265 1,025,272 1,050,905 1,077,178 1,104,109 1,131,712 1,160,006 1,189,007 1,218,733 1,249,202 1,280,433 1,312,445 1,345,256 1,378,888 1,413,361 1,448,696 1,484,914 1,522,037 1,560,089 1,599,092 1,639,069 TOTAL OPERATING EXPENSES 42,079 500,839 540,906 559,838 579,433 599,713 620,703 642,427 664,912 688,184 712,271 737,200 763,002 789,707 817,347 845,954 875,562 906,207 937,924 970,752 1,004,728 1,039,893 1,076,290 REAL ESTATE TAXES2.00%2,500 2,550 2,601 2,653 2,706 2,760 2,815 2,872 2,929 2,988 3,047 3,108 3,171 3,234 3,299 3,365 3,432 3,501 3,571 3,642 3,715 3,789 3,865 SUPPORTIVE SERVICES EXPENSES2.00%7,917 92,863 98,838 100,815 102,831 104,888 106,985 109,125 111,308 113,534 115,804 118,121 120,483 122,893 125,350 127,857 130,415 133,023 135,683 138,397 141,165 143,988 146,868 Annual Monitoring Fee (SD HCD)1.00%0 4,000 4,040 4,080 4,121 4,162 4,204 4,246 4,289 4,331 4,375 4,418 4,463 4,507 4,552 4,598 4,644 4,690 4,737 4,785 4,832 4,881 4,930 NET OPERATING INCOME29,279 334,954 353,879 357,886 361,814 365,656 369,401 373,042 376,569 379,970 383,236 386,355 389,315 392,103 394,708 397,114 399,308 401,275 402,998 404,462 405,649 406,540 407,117 REPLACEMENT RESERVE1,688 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 NET INCOME AVAILABLE FOR DEBT SERVICE27,592 314,704 333,629 337,636 341,564 345,406 349,151 352,792 356,319 359,720 362,986 366,105 369,065 371,853 374,458 376,864 379,058 381,025 382,748 384,212 385,399 386,290 386,867 CCRC Permanent Loan Debt Service0112,982271,158271,158271,158271,158271,158271,158271,158271,158271,158271,158271,158271,158271,158271,1580000000 Principal052,408137,427144,732152,425160,526169,059178,045187,508197,475207,971219,025230,667242,927255,840269,438283,760298,842314,726331,455-1,159,84700 Interest5.190%060,574133,731126,426118,733110,632102,09993,11383,65073,68363,18752,13340,49128,23115,3181,720-283,760-298,842-314,726-331,4551,159,84700TOTAL DEBT SERVICE0112,982271,158271,158271,158271,158271,158271,158271,158271,158271,158271,158271,158271,158271,158271,1580000000NET CASH FLOW27,592 201,721 62,471 66,478 70,406 74,248 77,993 81,634 85,161 88,562 91,828 94,947 97,907 100,695 103,300 105,706 379,058 381,025 382,748 384,212 385,399 386,290 386,867 27,592 0 Debt Service Coverage RatioN/A2.791.231.251.261.271.291.301.311.331.341.351.361.371.381.39#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!CHECKCHECKDISTRIBUTION OF CASH FLOWLP/PM fees limited by City of Poway as belowLP Investor Services Fee - Current3%7,500 7,500 7,725 7,957 8,195 8,441 8,695 8,955 9,224 9,501 9,786 10,079 10,382 10,693 11,014 11,344 11,685 LP Investor Services Fee - Deferred0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Deferred Developer Fee20,092 193,996 54,514 58,282 61,965 65,553 69,038 72,410 4,149 0 0 0 0 0 0 0 0 0 0 0 0 0 0 600,000 Partnership Management Fee3%12,500 0 0 0 0 0 0 0 0 15,835 16,310 16,799 17,303 17,822 18,357 18,907 19,475 0 0 0 0 0 0 0 Partnership Management Fee - Deferred0 0 0 0 0 0 0 0 55,676 55,478 0 0 0 0 0 0 0 0 0 0 0 0 0 City Land Loan19.58%0 0 0 0 0 0 0 0 0 1,368 12,717 13,169 13,586 13,965 14,302 14,596 74,217 74,602 74,940 75,226 75,459 75,633 75,746 SD County IHTF NOFA24.98%0 0 0 0 0 0 0 0 0 1,746 16,226 16,803 17,335 17,818 18,249 18,623 94,696 95,187 95,618 95,983 96,280 96,502 96,647 City of Poway5.44%0 0 0 0 0 0 0 0 0 380 3,532 3,658 3,774 3,879 3,973 4,054 20,616 20,723 20,817 20,896 20,961 21,009 21,041 General Partner90.00%0 0 0 0 0 0 0 0 0 3,145 29,227 30,268 31,226 32,096 32,872 33,546 170,576 171,461 172,237 172,895 173,429 173,830 174,090 Limited Partner10.00%0 0 0 0 0 0 0 0 0 349 3,247 3,363 3,470 3,566 3,652 3,727 18,953 19,051 19,137 19,211 19,270 19,314 19,343 v 2.27 (pre-closing)March 28, 201929 of 119April 2, 2019, Item # 4.1
Villa de Vida - Poway55-Year Cash Flow (True Debt)ASSUMPTIONS:Perm Loan - % Debt Svc Yr 0 Rent Increase:2.50%Perm Loan - % Debt Svc Yr 1 Expenses Increase:3.50%Perm Loan - % Debt Svc Yr 2 Reserve Increase:0.00%Percent Lease-up Yr 1 20182019GROSS POTENTIAL INCOME - SPECIAL NEEDSGROSS POTENTIAL INCOME - SPECIAL NEEDS (NON-TCAC)Section 8 Premium Misc. IncomeVacancy Loss - Special Needs5.0%Vacancy Loss - Section 8 Premium5.0%Vacancy Loss - Misc & non-SN5.0%GROSS EFFECTIVE INCOME TOTAL OPERATING EXPENSES REAL ESTATE TAXES2.00%SUPPORTIVE SERVICES EXPENSES2.00%Annual Monitoring Fee (SD HCD)1.00%NET OPERATING INCOMEREPLACEMENT RESERVENET INCOME AVAILABLE FOR DEBT SERVICE CCRC Permanent Loan Debt Service Principal Interest5.190%TOTAL DEBT SERVICENET CASH FLOWDebt Service Coverage RatioDISTRIBUTION OF CASH FLOWLP/PM fees limited by City of Poway as belowLP Investor Services Fee - Current3%7,500 LP Investor Services Fee - DeferredDeferred Developer Fee600,000 Partnership Management Fee3%12,500 Partnership Management Fee - DeferredCity Land Loan19.58%SD County IHTF NOFA24.98%City of Poway5.44%General Partner90.00%Limited Partner10.00%23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 2043204420452046204720482049205020512052205320542055205620572058205920602061582,576 597,140 612,069 627,370 643,054 659,131 675,609 692,499 709,812 727,557 745,746 764,390 783,499 803,087 823,164 843,743 864,837 886,458 908,619 283,538 290,626 297,892 305,339 312,973 320,797 328,817 337,037 345,463 354,100 362,952 372,026 381,327 390,860 400,631 410,647 420,913 431,436 442,222 894,806 917,176 940,105 963,608 987,698 1,012,391 1,037,700 1,063,643 1,090,234 1,117,490 1,145,427 1,174,063 1,203,414 1,233,500 1,264,337 1,295,946 1,328,344 1,361,553 1,395,592 7,528 7,716 7,909 8,107 8,309 8,517 8,730 8,948 9,172 9,401 9,636 9,877 10,124 10,377 10,637 10,903 11,175 11,454 11,741 (29,129)(29,857)(30,603)(31,369)(32,153)(32,957)(33,780)(34,625)(35,491)(36,378)(37,287)(38,219)(39,175)(40,154)(41,158)(42,187)(43,242)(44,323)(45,431)(44,740)(45,859)(47,005)(48,180)(49,385)(50,620)(51,885)(53,182)(54,512)(55,874)(57,271)(58,703)(60,171)(61,675)(63,217)(64,797)(66,417)(68,078)(69,780)(14,553)(14,917)(15,290)(15,672)(16,064)(16,466)(16,877)(17,299)(17,732)(18,175)(18,629)(19,095)(19,573)(20,062)(20,563)(21,077)(21,604)(22,145)(22,698)1,680,047 1,722,048 1,765,100 1,809,228 1,854,459 1,900,821 1,948,341 1,997,050 2,046,977 2,098,152 2,150,606 2,204,371 2,259,480 2,315,967 2,373,867 2,433,214 2,494,044 2,556,395 2,620,305 1,113,960 1,152,948 1,193,302 1,235,067 1,278,295 1,323,035 1,369,341 1,417,268 1,466,872 1,518,213 1,571,350 1,626,348 1,683,270 1,742,184 1,803,161 1,866,271 1,931,591 1,999,197 2,069,168 3,942 4,021 4,102 4,184 4,267 4,353 4,440 4,528 4,619 4,711 4,806 4,902 5,000 5,100 5,202 5,306 5,412 5,520 5,631 149,805 152,802 155,858 158,975 162,154 165,397 168,705 172,079 175,521 179,031 182,612 186,264 189,990 193,789 197,665 201,618 205,651 209,764 213,959 4,979 5,029 5,079 5,130 5,181 5,233 5,285 5,338 5,391 5,445 5,500 5,555 5,610 5,666 5,723 5,780 5,838 5,896 5,955 407,360 407,248 406,760 405,873 404,562 402,803 400,570 397,837 394,573 390,751 386,338 381,303 375,611 369,228 362,116 354,238 345,552 336,018 325,592 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 387,110 386,998 386,510 385,623 384,312 382,553 380,320 377,587 374,323 370,501 366,088 361,053 355,361 348,978 341,866 333,988 325,302 315,768 305,342 0000000000000000000000000000000000000000000000000000000000000000000000000000387,110 386,998 386,510 385,623 384,312 382,553 380,320 377,587 374,323 370,501 366,088 361,053 355,361 348,978 341,866 333,988 325,302 315,768 305,342 #DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 75,794 75,772 75,676 75,503 75,246 74,902 74,464 73,929 73,290 72,542 71,678 70,692 69,578 68,328 66,935 65,393 63,692 61,826 59,784 96,707 96,679 96,557 96,336 96,008 95,569 95,011 94,328 93,513 92,558 91,456 90,198 88,776 87,181 85,405 83,436 81,267 78,885 76,280 21,054 21,048 21,021 20,973 20,902 20,806 20,685 20,536 20,358 20,151 19,911 19,637 19,327 18,980 18,593 18,165 17,692 17,174 16,607 174,200 174,149 173,930 173,530 172,940 172,149 171,144 169,914 168,445 166,725 164,740 162,474 159,912 157,040 153,840 150,294 146,386 142,096 137,404 19,356 19,350 19,326 19,281 19,216 19,128 19,016 18,879 18,716 18,525 18,304 18,053 17,768 17,449 17,093 16,699 16,265 15,788 15,267 30 of 119April 2, 2019, Item # 4.1
Villa de Vida - Poway55-Year Cash Flow (True Debt)ASSUMPTIONS:Perm Loan - % Debt Svc Yr 0 Rent Increase:2.50%Perm Loan - % Debt Svc Yr 1 Expenses Increase:3.50%Perm Loan - % Debt Svc Yr 2 Reserve Increase:0.00%Percent Lease-up Yr 1 20182019GROSS POTENTIAL INCOME - SPECIAL NEEDSGROSS POTENTIAL INCOME - SPECIAL NEEDS (NON-TCAC)Section 8 Premium Misc. IncomeVacancy Loss - Special Needs5.0%Vacancy Loss - Section 8 Premium5.0%Vacancy Loss - Misc & non-SN5.0%GROSS EFFECTIVE INCOME TOTAL OPERATING EXPENSES REAL ESTATE TAXES2.00%SUPPORTIVE SERVICES EXPENSES2.00%Annual Monitoring Fee (SD HCD)1.00%NET OPERATING INCOMEREPLACEMENT RESERVENET INCOME AVAILABLE FOR DEBT SERVICE CCRC Permanent Loan Debt Service Principal Interest5.190%TOTAL DEBT SERVICENET CASH FLOWDebt Service Coverage RatioDISTRIBUTION OF CASH FLOWLP/PM fees limited by City of Poway as belowLP Investor Services Fee - Current3%7,500 LP Investor Services Fee - DeferredDeferred Developer Fee600,000 Partnership Management Fee3%12,500 Partnership Management Fee - DeferredCity Land Loan19.58%SD County IHTF NOFA24.98%City of Poway5.44%General Partner90.00%Limited Partner10.00%42 43 44 45 46 47 48 49 50 51 52 53 54 55 20622063206420652066206720682069207020712072207320742075931,335 954,618 978,483 1,002,946 1,028,019 1,053,720 1,080,063 1,107,064 1,134,741 1,163,109 1,192,187 1,221,992 1,252,542 1,283,855 453,278 464,609 476,225 488,130 500,334 512,842 525,663 538,805 552,275 566,081 580,234 594,739 609,608 624,848 1,430,482 1,466,244 1,502,900 1,540,472 1,578,984 1,618,459 1,658,920 1,700,393 1,742,903 1,786,475 1,831,137 1,876,916 1,923,839 1,971,935 12,034 12,335 12,644 12,960 13,284 13,616 13,956 14,305 14,663 15,029 15,405 15,790 16,185 16,590 (46,567)(47,731)(48,924)(50,147)(51,401)(52,686)(54,003)(55,353)(56,737)(58,155)(59,609)(61,100)(62,627)(64,193)(71,524)(73,312)(75,145)(77,024)(78,949)(80,923)(82,946)(85,020)(87,145)(89,324)(91,557)(93,846)(96,192)(98,597)(23,266)(23,847)(24,443)(25,054)(25,681)(26,323)(26,981)(27,655)(28,347)(29,056)(29,782)(30,526)(31,290)(32,072)2,685,813 2,752,958 2,821,782 2,892,326 2,964,634 3,038,750 3,114,719 3,192,586 3,272,401 3,354,211 3,438,066 3,524,017 3,612,117 3,702,420 2,141,589 2,216,545 2,294,124 2,374,418 2,457,523 2,543,536 2,632,560 2,724,700 2,820,064 2,918,766 3,020,923 3,126,656 3,236,088 3,349,352 5,743 5,858 5,975 6,095 6,217 6,341 6,468 6,597 6,729 6,864 7,001 7,141 7,284 7,429 218,238 222,603 227,055 231,596 236,228 240,953 245,772 250,687 255,701 260,815 266,031 271,352 276,779 282,314 6,015 6,075 6,136 6,197 6,259 6,322 6,385 6,449 6,513 6,579 6,644 6,711 6,778 6,846 314,227 301,877 288,492 274,020 258,408 241,598 223,534 204,154 183,394 161,187 137,466 112,158 85,188 56,479 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 293,977 281,627 268,242 253,770 238,158 221,348 203,284 183,904 163,144 140,937 117,216 91,908 64,938 36,229 293,977 281,627 268,242 253,770 238,158 221,348 203,284 183,904 163,144 140,937 117,216 91,908 64,938 36,229 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 57,559 55,141 52,520 49,687 46,630 43,339 39,802 36,007 31,943 27,595 22,950 17,995 12,715 7,093 73,441 70,356 67,012 63,396 59,496 55,297 50,784 45,943 40,756 35,209 29,283 22,960 16,223 9,051 15,989 15,317 14,589 13,802 12,953 12,039 11,056 10,002 8,873 7,665 6,375 4,999 3,532 1,970 132,290 126,732 120,709 114,196 107,171 99,607 91,478 82,757 73,415 63,422 52,747 41,359 29,222 16,303 14,699 14,081 13,412 12,688 11,908 11,067 10,164 9,195 8,157 7,047 5,861 4,595 3,247 1,811 31 of 119April 2, 2019, Item # 4.1
C-1
1552\12\2547457.7
ATTACHMENT C
FORM OF AUTHORITY PROMISSORY NOTE
The attached Form of Promissory Note hereby supersedes the Promissory Note attached as
Exhibit F of the Original DDA.
22 of 119 April 2, 2019, Item # 4.132 of 119 April 2, 2019, Item # 4.1
1552\12\1949060.8 1
PROMISSORY NOTE
(Villa de Vida)
$3,450,000 Poway, California
April __, 2019
FOR VALUE RECEIVED, VILLA DE VIDA POWAY, L.P., a California limited partnership
("Borrower"), promises to pay to THE POWAY HOUSING AUTHORITY, a public body,
corporate and politic ("Holder") the principal sum of Three Million Four Hundred Fifty
Thousand Dollars ($3,450,000) or so much thereof as is disbursed pursuant to the DDLA (as
defined in Section 1 below). All capitalized terms used but not defined in this Note have the
meanings set forth in the DDLA.
1. Borrower's Obligation. This Note evidences the Borrower's obligation to pay the
Holder the principal amount of Three Million Four Hundred Fifty Thousand Dollars
($3,450,000) for the funds loaned to Borrower by Holder (the "Loan"). The Borrower intends to
use Two Million Seven Hundred Thousand Dollars ($2,700,000) of the Loan funds to finance
land acquisition costs for the Development and Seven Hundred Fifty Thousand Dollars
($750,000) of the Loan funds to finance related construction costs of the Development, pursuant
to that certain Disposition, Development and Loan Agreement dated as of October 4, 2016, and
recorded in the Official Records of San Diego County, California (the "Official Records") on
April 10, 2017, as Document No. 2017-016002, as amended by that certain First Amendment to
the Land Disposition, Development and Loan Agreement dated as of June 20, 2017, and
recorded in the Official Records on July 10, 2017, as Document No. 2017-03098, as further
amended by that certain Second Amendment to the Land Disposition, Development and Loan
Agreement dated as of February 6, 2018, and recorded in the Official Records on
March 22, 2018, as Document No. 2018-0113457, as further amended by that certain Third
Amendment to the Land Disposition, Development and Loan Agreement dated as of
April 2, 2019, as such may be amended from time to time, by and between Borrower and Holder
(collectively, the "DDLA ").
2. Interest. The Loan will bear simple interest at three percent (3%) per annum;
provided, however, in the event of an uncured Developer Event of Default under the Authority
Documents and the failure of the Borrower to cure the same within the time specified in the
Authority Documents, interest shall accrue following the Developer Event of Default at the
default rate of the lesser of ten percent (10%), compounded annually, or the highest rate
permitted by law.
3. Term and Repayment Requirements. Payments due under this Note are due in
accordance with this Note and as set forth in Section 4.5 of the DDLA. In any event, the unpaid
principal balance is due and payable not later than the expiration of the Term of the DDLA.
Repayment of this Note shall be non-recourse to the Borrower pursuant to Section 4.10 of the
DDLA
4. No Assumption. This Note is not assumable by the successors and assigns of
Borrower without the prior written consent of the Holder except as provided in the DDLA.
33 of 119 April 2, 2019, Item # 4.1
1552\12\1949060.8 2
5. Security. This Note is secured by the Assignment of Collateral Documents, dated
concurrently with the DDLA (the "Assignment") and the Loan Deed of Trust executed
concurrently herewith.
6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the
United States of America to Holder at the Poway Housing Authority, 13325 Civic Center Drive,
Poway, CA 92064, Attention: Executive Director, or such other place as Holder may from time
to time designate.
(b) All payments on this Note are without expense to Holder. Borrower shall
pay all costs and expenses, including reconveyance fees and reasonable attorney's fees of Holder,
incurred in connection with the payment of this Note and the release of any security hereof.
(c) The obligations of Borrower under this Note are absolute and Borrower
waives any and all rights to offset, deduct or withhold any payments or charges due under this
Note for any reason whatsoever.
7. Default.
(a) Upon the occurrence of an uncured Developer Event of Default, the entire
unpaid principal balance, and together with all other sums then payable under this Note, will, at
the option of the Holder, become immediately due and payable upon written notice by the Holder
to the Borrower without further demand.
(b) The Holder's failure to exercise the remedy set forth in subsection 7(a)
above or any other remedy provided by law upon the occurrence of an uncured Developer Event
of Default will not constitute a waiver of the right to exercise any remedy at any subsequent time
in respect to the same or any other uncured Developer Event of Default. The acceptance by
Holder hereof of any payment which is less than the total of all amounts due and payable at the
time of such payment will not constitute a waiver of the right to exercise any of the foregoing
remedies or options at that time or at any subsequent time, or nullify any prior exercise of any
such remedy or option, without the express consent of the Holder, except as and to the extent
otherwise provided by law.
8. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and
notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.
Borrower expressly agrees that this Note or any payment hereunder may be extended from time
to time, and that Holder may accept further security or release any security for this Note, all
without in any way affecting the liability of Borrower.
(b) Any extension of time for payment of this Note or any installment hereof
made by agreement of Holder with any person now or hereafter liable for payment of this Note
34 of 119 April 2, 2019, Item # 4.1
1552\12\1949060.8 3
must not operate to release, discharge, modify, change or affect the original liability of Borrower
under this Note, either in whole or in part.
9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower are to be given in the manner and at the
addresses set forth in the DDLA, or to such addresses as Holder or Borrower may therein
designate.
(b) Borrower promises to pay all costs and expenses, including reasonable
attorney's fees, incurred by Holder in the enforcement of the provisions of this Note, regardless
of whether suit is filed to seek enforcement.
(c) This Note is governed by the laws of the State of California.
(d) The times for the performance of any obligations hereunder are to be
strictly construed, time being of the essence.
(e) The Authority Documents, of which this Note is a part, contain the entire
agreement between the parties as to the Loan. This Note may not be modified except upon the
written consent of the parties.
This Note replaces, supersedes, and makes null and void any previously executed promissory
note in favor of the Lender.
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IN WITNESS WHEREOF, this Promissory Note is executed by Borrower as of the day and year
written below and is effective as of the date first written above.
DEVELOPER:
VILLA DE VIDA POWAY, L.P., a California limited partnership
By: Villa de Vida GP, LLC, a California limited liability
company, its Managing General Partner
By: Mercy Housing Calwest, a California nonprofit
public benefit corporation, its sole member and
manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
By: VDV POWAY LLC, a California limited liability
company, its Administrative General Partner
By: Villa de Vida, Inc., a California nonprofit public
benefit corporation, its sole member and manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
36 of 119 April 2, 2019, Item # 4.1
D-1
1552\12\2547457.7
ATTACHMENT D
FORM OF AUTHORITY DEED OF TRUST
The attached Form of Authority Deed of Trust hereby supersedes the Authority Deed of Trust
attached as Exhibit G of the Original DDA.
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1552\12\1949162.11 1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attention: Attention: Executive Director
NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE
SECTIONS 6103 AND 27383
APN: 317-152-14-00
(Space above this line for Recorder's Use)
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT, AND FIXTURE FILING
THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT, AND FIXTURE FILING ("Deed of Trust") is made as of April __, 2019, by and
among Villa de Vida Poway, L.P., a California limited partnership ("Trustor"), Commonwealth
Land Title Company, a California corporation ("Trustee"), and the Poway Housing Authority, a
public body, corporate and politic ("Beneficiary").
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions
hereinafter set forth, Trustor's fee interest in the property located in the City of Poway, County of
San Diego, State of California, that is described in the attached Exhibit A, incorporated herein by
this reference (the "Property").
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights-of-way and rights used in connection therewith
or as a means of access thereto, including (without limiting the generality of the foregoing) all
tenements, hereditaments and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings and improvements of every kind and
description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property;
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TOGETHER WITH all building materials and equipment now or hereafter delivered to
said Property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to
or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all deposits made with or other security given by Trustor to utility companies, the
proceeds from any or all of such property, including the Property, claims or demands with
respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may
hereafter acquire, any and all awards made for the taking by eminent domain or by any
proceeding or purchase in lieu thereof of the whole or any part of such property, including
without limitation, any awards resulting from a change of grade of streets and awards for
severance damages to the extent Beneficiary has an interest in such awards for taking as
provided in Paragraph 4.1 herein;
TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures
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 complete 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 will be, attached to said building or buildings in any
manner; and
TOGETHER WITH all of Trustor's interest in all building materials, fixtures, equipment,
work in process and other personal property to be incorporated into the Property; all goods,
materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other
personal property now or hereafter appropriated for use on the Property, whether stored on the
Property or elsewhere, and used or to be used in connection with the Property; all rents, issues
and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles,
chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance
and condemnation awards and proceeds, trade names, trademarks and service marks arising from
or related to the Property and any business conducted thereon by Trustor; all replacements,
additions, accessions and proceeds; and all books, records and files relating to any of the
foregoing.
All of the foregoing, together with the Property, is herein referred to as the "Security."
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
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FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (collectively, the
"Secured Obligations"):
A. Payment of just indebtednesses of Trustor to Beneficiary of all sums at any time
owing under, or in connection with, the Authority Promissory Note (defined in Article 1 below)
until paid or cancelled and any other amounts owing under the Authority Documents. Said
principal and other payments are due and payable as provided in the Authority Promissory Note.
The Authority Promissory Note and all its terms are incorporated herein by reference, and this
conveyance secures any and all extensions thereof, however evidenced;
B. Payment of any sums advanced by Beneficiary to protect the Security pursuant to
the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to
advance said sums and the expiration of any applicable cure period, with interest thereon as
provided herein;
C. Performance of every obligation, covenant or agreement of Trustor contained
herein and in the Authority Documents (defined in Article 1 below); and
D. All modifications, extensions and renewals of any of the Secured Obligations
(including without limitation: (1) modifications, extensions or renewals at a different rate of
interest; or (2) deferrals or accelerations of the required principal payment dates or interest
payment dates or both, in whole or in part), however evidenced, whether or not any such
modification, extension or renewal is evidenced by a new or additional promissory note or notes
(defined in Article 1 below).
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
ARTICLE 1:
DEFINITIONS
Section 1.1 Definitions. In addition to the terms defined elsewhere in this Deed of
Trust, the following terms have the following meanings in this Deed of Trust:
(a) "Authority Documents" means this Deed of Trust, the Authority
Promissory Note, the Authority Regulatory Agreement, the Disposition and Loan Agreement,
and any other debt, loan or security instruments between Trustor and the Beneficiary relating to
the Property.
(b) "Authority Loan" means the loan made by the Beneficiary to the Trustor
in the amount of up to Three Million Four Hundred Fifty Thousand Dollars ($3,450,000).
(c) "Authority Promissory Note" means that certain promissory note in the
amount of Three Million Four Hundred Fifty Thousand Dollars ($3,450,000) dated as of April 2,
2019, herewith executed by the Trustor in favor of the Beneficiary, the payment of which is
secured by this Deed of Trust. (A copy of the Authority Promissory Note is on file with the
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1552\12\1949162.11 4
Beneficiary and terms and provisions of the Authority Promissory Note are incorporated herein
by reference.)
(d) "Authority Regulatory Agreement" means that certain Regulatory
Agreement and Declaration of Restrictive Covenants that will be recorded in the Official
Records against the Developer's fee interest of the Property upon the Close of Escrow securing
the Authority's interest in the Authority Loan.
(e) "Disposition and Loan Agreement" means that certain Disposition,
Development and Loan Agreement between Trustor and Beneficiary, as of October 4, 2016, and
recorded in the Official Records of San Diego County, California (the "Official Records") on
April 10, 2017, as Document No. 2017-016002, as amended by that certain First Amendment to
the Land Disposition, Development and Loan Agreement dated as of June 20, 2017, and
recorded in the Official Records on July 10, 2017, as Document No. 2017-03098, as further
amended by that certain Second Amendment to the Land Disposition, Development and Loan
Agreement dated as of February 6, 2018, and recorded in the Official Records on
March 22, 2018, as Document No. 2018-0113457, as further amended by that certain Third
Amendment to the Land Disposition, Development and Loan Agreement dated as of
April 2, 2019, as such may be amended from time to time, providing for the Beneficiary to make
the Authority Loan.
(f) "Principal" means the aggregate of the amounts required to be paid under
the Authority Promissory Note.
ARTICLE 2:
MAINTENANCE AND MODIFICATION OF THE PROPERTY AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.
(a) The Trustor agrees that at all times prior to full payment of the sum owed
and performance of the Secured Obligations under the Authority Promissory Note, the Trustor
will, at the Trustor's own expense, maintain, preserve and keep the Security or cause the Security
to be maintained and preserved in good condition. The Trustor will from time to time make or
cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The
Beneficiary has no responsibility in any of these matters or for the making of improvements or
additions to the Security.
(b) Trustor agrees to pay fully and discharge (or cause to be paid fully and
discharged) all claims for labor done and for material and services furnished in connection with
the Security, diligently to file or procure the filing of a valid notice of cessation upon the event of
a cessation of labor on the work or construction on the Security for a continuous period of thirty
(30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien
against the Security or any part thereof. Trustor irrevocably appoints, designates and authorizes
Beneficiary as its agent (said agency being coupled with an interest) with the authority, but
without any obligation, to file or record any notices of completion or cessation of labor or any
other notice that Beneficiary deems necessary or desirable to protect its interest in and to the
41 of 119 April 2, 2019, Item # 4.1
1552\12\1949162.11 5
Security or the Authority Documents; provided, however, that Beneficiary exercises its rights as
agent of Trustor only in the event that Trustor fails to take, or fails to diligently continue to take,
those actions as hereinbefore provided.
(c) Upon demand by Beneficiary, Trustor shall make or cause to be made
such demands or claims as Beneficiary specifies upon laborers, materialmen, subcontractors or
other persons who have furnished or claim to have furnished labor, services or materials in
connection with the Security. Nothing herein contained requires Trustor to pay any claims for
labor, materials or services which Trustor in good faith disputes and is diligently contesting
provided that Trustor shall, within thirty (30) days after the filing of any claim of lien, record in
the Office of the Recorder of the County of San Diego, a surety bond in an amount equal to the
amount of such claim item to protect against a claim of lien, or to provide other form of security
acceptable to the Beneficiary at the Beneficiary's sole and absolute discretion.
Section 2.2 Granting of Easements. Trustor may not grant easements, licenses, rights-
of-way or other rights or privileges in the nature of easements with respect to any property or
rights included in the Security except those required or desirable for installation and maintenance
of public utilities, including, without limitation, water, gas, electricity, sewer, telephone, or those
required by law and as approved, in writing, by Beneficiary.
Section 2.3 Assignment of Rents.
(a) Subject to the rights of any approved senior mortgage lender, as part of the
consideration for the indebtedness evidenced by the Authority Promissory Note, Trustor hereby
absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of
the Property including those now due, past due, or to become due by virtue of any lease or other
agreement for the occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or
Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each tenant of
the Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that
prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant
or agreement of Trustor in the Authority Documents, Trustor shall collect and receive all rents
and revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the
rents and revenues so collected to the Secured Obligations with the balance, so long as no such
breach has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that
this assignment of rents constitutes an absolute assignment and not an assignment for additional
security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor
of any covenant or agreement of Trustor in the Authority Documents, and without the necessity
of Beneficiary entering upon and taking and maintaining full control of the Property in person,
by agent or by a court-appointed receiver, Beneficiary shall immediately be entitled to
possession of all rents and revenues of the Property as specified in this Section as the same
becomes due and payable, including but not limited to rents then due and unpaid, and all such
rents will, immediately upon delivery of such notice, be held by Trustor as trustee for the benefit
of Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the
breach by Trustor contains a statement that Beneficiary exercises its rights to such rents. Trustor
agrees that commencing upon delivery of such written notice of Trustor's breach by Beneficiary
to Trustor, each tenant of the Property shall make such rents payable to and pay such rents to
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1552\12\1949162.11 6
Beneficiary or Beneficiary's agents on Beneficiary's written demand to each tenant thereof,
delivered to each tenant personally, by mail or by delivering such demand to each rental unit,
without any liability on the part of said tenant to inquire further as to the existence of a default by
Trustor.
(b) Subject to the rights of any approved senior mortgage lender, the Trustor
hereby covenants that Trustor has not executed any prior assignment of said rents, that Trustor
has not performed, and will not perform, any acts or has not executed and will not execute, any
instrument which would prevent Beneficiary from exercising its rights under this Section, and
that at the time of execution of this Deed of Trust, there has been no anticipation or prepayment
of any of the rents of the Property for more than two (2) months prior to the due dates of such
rents. Trustor covenants that Trustor will not hereafter collect or accept payment of any rents of
the Property more than two (2) months prior to the due dates of such rents. Trustor further
covenants that Trustor will execute and deliver to Beneficiary such further assignments of rents
and revenues of the Property as Beneficiary may from time to time request.
(c) Upon Trustor's breach of any covenant or agreement of Trustor in the
Authority Documents, after applicable notice and cure periods, Beneficiary may in person, by
agent or by a court-appointed receiver, regardless of the adequacy of Beneficiary's security, enter
upon and take and maintain full control of the Property in order to perform all acts necessary and
appropriate for the operation and maintenance thereof including, but not limited to, the
execution, cancellation or modification of leases, the collection of all rents and revenues of the
Property, the making of repairs to the Property and the execution or termination of contracts
providing for the management or maintenance of the Property, all on such terms as are deemed
best to protect the security of this Deed of Trust. In the event Beneficiary elects to seek the
appointment of a receiver for the Property upon Trustor's breach of any covenant or agreement of
Trustor in this Deed of Trust, Trustor hereby expressly consents to the appointment of such
receiver. Beneficiary or the receiver will be entitled to receive a reasonable fee for so managing
the Property.
(d) All rents and revenues collected subsequent to delivery of written notice
by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the
Authority Documents after applicable notice and cure periods, are to be applied first to the costs,
if any, of taking control of and managing the Property and collecting the rents, including, but not
limited to, attorney's fees, receiver's fees, premiums on receiver's bonds, costs of repairs to the
Property, premiums on insurance policies, taxes, assessments and other charges on the Property,
and the costs of discharging any obligation or liability of Trustor as lessor or landlord of the
Property and then to the sums secured by this Deed of Trust. Beneficiary or the receiver is to
have access to the books and records used in the operation and maintenance of the Property and
will be liable to account only for those rents actually received. Beneficiary is not liable to
Trustor, anyone claiming under or through Trustor or anyone having an interest in the Property
by reason of anything done or left undone by Beneficiary under this Section.
(e) If the rents of the Property are not sufficient to meet the costs, if any, of
taking control of and managing the Property and collecting the rents, any funds expended by
Beneficiary for such purposes will become part of the Secured Obligations. Unless Beneficiary
and Trustor agree in writing to other terms of payment, such amounts are payable by the Trustor
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to the Beneficiary, upon notice from Beneficiary to Trustor requesting payment thereof and will
bear interest from the date of disbursement at the rate stated in Section 3.3.
(f) If the Beneficiary or the receiver enters upon and takes and maintains
control of the Property, any application of rents as provided herein will not cure or waive any
default hereunder or invalidate any other right or remedy of Beneficiary under applicable law or
provided herein. This assignment of rents of the Property will terminate at such time as this
Deed of Trust ceases to the Secured Obligations.
ARTICLE 3:
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.
(a) Trustor shall pay, or cause to be paid prior to the date of delinquency, all
taxes, assessments, charges and levies imposed by any public authority or utility company that
are or may become a lien affecting the Security or any part thereof; provided, however, that
Trustor is not required to pay and discharge any such tax, assessment, charge or levy so long as:
(1) the legality thereof is promptly and actively contested in good faith and by appropriate
proceedings; and (2) Trustor maintains reserves adequate to pay any liabilities contested pursuant
to this Section. With respect to taxes, special assessments or other similar governmental charges,
Trustor shall pay such amount in full prior to the attachment of any lien thereof on any part of
the Security; provided, however, if such taxes, assessments or charges may be paid in
installments, Trustor may pay in such installments. Except as provided in clause (2) of the first
sentence of this paragraph, the provisions of this Section shall not be construed to require that
Trustor maintain a reserve account, escrow account, impound account or other similar account
for the payment of future taxes, assessments, charges and levies.
(b) In the event that Trustor fails to pay any of the items required by this
Section to be paid by Trustor, Beneficiary may (but is under no obligation to) pay the same, after
the Beneficiary has notified the Trustor in writing of such failure to pay and the Trustor fails to
fully pay such items within seven (7) business days after receipt of such notice. Any amount so
advanced therefor by Beneficiary, together with interest thereon from the date of such advance at
the maximum rate permitted by law, will become part of the Secured Obligations secured hereby,
and Trustor agrees to pay all such amounts.
Section 3.2 Provisions Respecting Insurance.
(a) Trustor agrees to provide insurance conforming in all respects to that
required under the Authority Documents at all times and until all amounts secured by this Deed
of Trust have been paid and all Secured Obligations hereunder have been fulfilled, and this Deed
of Trust has been reconveyed.
(b) All such insurance policies and coverages are to be maintained at Trustor's
sole cost and expense. Certificates of insurance for all of the above insurance policies, showing
the same to be in full force and effect, are to be delivered to the Beneficiary upon demand
therefor at any time prior to the Trustor's satisfaction of the Secured Obligations.
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(c) The Trustor is aware that California Civil Code Section 2955.5(a)
provides as follows: "No lender shall require a borrower, as a condition of receiving or
maintaining a loan secured by real property, to provide hazard insurance coverage against risks
to the improvements on that real property in an amount exceeding the replacement value of the
improvements on the property."
Section 3.3 Advances. In the event the Trustor fails to maintain the full insurance
coverage required by this Deed of Trust or fails to keep the Security in accordance with the
Authority Documents, the Beneficiary, after at least seven (7) days ' prior written notice to
Trustor, may (but is under no obligation to): (a) take out the required policies of insurance and
pay the premiums on the same; and (b) make any repairs or replacements that are necessary and
provide for payment thereof. All amounts so advanced by the Beneficiary will become part of
the Secured Obligations (together with interest as set forth below) and will be secured hereby,
which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid,
will bear interest from the date of the advance at the lesser of ten percent (10%) per annum or the
maximum rate permitted by law.
ARTICLE 4:
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages. All judgments, awards of damages, settlements
and compensation made in connection with or in lieu of: (a) a taking of all or any part of or any
interest in the Property by or under assertion of the power of eminent domain; (b) any damage to
or destruction of the Property or in any part thereof by insured casualty; and (c) any other injury
or damage to all or any part of the Property ( collectively, the "Funds"), are hereby assigned to
and are to be paid to the Beneficiary by a check made payable to the Beneficiary. The
Beneficiary is authorized and empowered (but not required) to collect and receive any Funds and
is authorized to apply them in whole or in part to any indebtedness or obligation secured hereby,
in such order and manner as the Beneficiary determines at its sole option. The Beneficiary is
entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust
and may deduct and retain from the proceeds of such insurance the amount of all expenses
incurred by it in connection with any such settlement or adjustment. All or any part of the
amounts so collected and recovered by the Beneficiary may be released to Trustor upon such
conditions as the Beneficiary may impose for its disposition. Application of all or any part of the
Funds collected and received by the Beneficiary or the release thereof will not cure or waive any
default under this Deed of Trust. The rights of the Beneficiary under this Section are subject to
the rights of any senior mortgage lender. The Beneficiary shall release the Funds to Trustor to be
used to reconstruct the improvements on the Property provided that Beneficiary reasonably
determines that Trustor (taking into account the Funds) has sufficient funds to rebuild the
improvements in substantially the form that existed prior to the casualty or condemnation.
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ARTICLE 5:
AGREEMENTS AFFECTING THE PROPERTY; FURTHER
ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property. The Trustor shall duly and
punctually perform all terms, covenants, conditions and agreements binding upon it under the
Authority Documents and any other agreement of any nature whatsoever now or hereafter
involving or affecting the Security or any part thereof.
Section 5.2 Agreement to Pay Attorneys' Fees and Expenses. In the event of any
Event of Default hereunder, and if the Beneficiary employs attorneys or incurs other expenses
for the collection of amounts due or the enforcement of performance or observance of an
obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it
will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such
other reasonable expenses so incurred by the Beneficiary (including, but not limited to, other
professional services fees and costs). Any such amounts paid by the Beneficiary will be added to
the Secured Obligations, and will bear interest from the date such expenses are incurred at the
lesser of ten percent (10%) per annum or the maximum rate permitted by law.
Section 5.3 Payment of the Principal. The Trustor shall pay to the Beneficiary the
Principal and any other payments as set forth in the Authority Promissory Note in the amounts
and by the times set out therein.
Section 5.4 Personal Property. To the maximum extent permitted by law, the
personal property subject to this Deed of Trust is deemed to be fixtures and part of the real
property and this Deed of Trust constitutes a fixtures filing under the California Commercial
Code. As to any personal property not deemed or permitted to be fixtures, this Deed of Trust
constitutes a security agreement under the California Commercial Code. The Trustor hereby
grants the Beneficiary a security interest in such items.
Section 5.5 Financing Statement. The Trustor shall execute and deliver to the
Beneficiary such financing statements pursuant to the appropriate statutes, and any other
documents or instruments as are required to convey to the Beneficiary a valid perfected security
interest in the Security. The Trustor agrees to perform all acts which the Beneficiary may
reasonably request so as to enable the Beneficiary to maintain such valid perfected security
interest in the Security in order to secure the payment of the Authority Promissory Note in
accordance with its terms. The Beneficiary is authorized to file a copy of any such financing
statement in any jurisdiction(s) as it shall deem appropriate from time to time in order to protect
the security interest established pursuant to this instrument. Trustor shall pay all costs of filing
such financing statements and any extensions, renewals, amendments, and releases thereof, and
shall pay all reasonable costs and expenses of any record searches for financing statements, and
releases thereof, as the Beneficiary may reasonably require. Without the prior written consent of
the Beneficiary, Trustor shall not create or suffer to be created pursuant to the California
Commercial Code any other security interest in the Security, including replacements and
additions thereto.
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Section 5.6 Operation of the Security. The Trustor shall operate the Security (and, in
case of a transfer of a portion of the Security subject to this Deed of Trust, the transferee shall
operate such portion of the Security) in full compliance with the Authority Documents.
Section 5.7 Inspection of the Security. At any and all reasonable times upon forty-
eight (48) hours' prior written notice, the Beneficiary and its duly authorized agents, attorneys,
experts, engineers, accountants and representatives, may inspect the Security without payment of
charges or fees.
Section 5.8 Nondiscrimination.
(a) In satisfaction of California Health and Safety Code Sections 33345 and
33436, the Trustor herein covenants by and for itself, its successors and assigns, and all persons
claiming under or through them, that there will be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision (a) and (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 Property herein conveyed, nor shall the grantee or any person claiming under or through
the grantee, 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 property herein conveyed. The foregoing covenant shall run with
the land.
(b) Notwithstanding paragraph (a), with respect to familial status, paragraph
(a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of
the Government Code. With respect to familial status, nothing in paragraph (a) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating
to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code
and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to
paragraph (a).
ARTICLE 6:
HAZARDOUS MATERIALS
(a) Trustor shall keep and maintain the Property in compliance with, and shall
not cause or permit the Property to be in violation of any federal, state or local laws, ordinances
or regulations relating to industrial hygiene or to the environmental conditions on, under, or
about the Property including, but not limited to, soil and ground water conditions. Trustor shall
not use, generate, manufacture, store or dispose of on, under, or about the Property or transport
to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic
substances or related materials, including without limitation, any substances defined as or
included in the definition of "hazardous substances," hazardous wastes," "hazardous materials,"
or "toxic substances" under any applicable federal or state laws or regulations (collectively
referred to hereinafter as "Hazardous Materials") except such of the foregoing as may be
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customarily used in construction and operation of the improvements on the Property or as may
be kept and used in and about residential development of this type.
(b) Trustor shall promptly advise Beneficiary in writing if at any time it
receives written notice of: (1) any and all enforcement, cleanup, removal or other governmental
or regulatory actions related to the Property instituted, completed or threatened against Trustor or
the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations
relating to any Hazardous Materials Law ("Hazardous Materials Law"); (2) all claims made or
threatened by any third party against Trustor or the Property relating to any loss, damage, cost,
expense or liability, contribution, cost recovery compensation, loss or injury directly or indirectly
arising out of or attributable to the use, generation, storage, release, threatened release, discharge,
disposal, or presence of Hazardous Materials on or under the Property (the matters set forth in
clauses (1) and (2) above are hereinafter referred to as "Hazardous Materials Claims"); and
(3) Trustor's discovery of any occurrence or condition on any real property adjoining or in the
vicinity of the Property that could cause the Property or any part thereof to be classified as
"border-zone property" under the provision of California Health and Safety Code, Sections
25220 et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to
any restrictions on the ownership, occupancy, transferability or use of the Property under any
Hazardous Materials Law.
(c) Beneficiary has the right to join and participate in, as a party if it so elects,
any legal proceedings or actions initiated in connection with any Hazardous Materials Claims
and to have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall
indemnify and hold harmless Beneficiary and its council members, supervisors, directors,
officers, employees, and agents (collectively, "Indemnified Parties") from claims arising from
Trustor's breach of its obligations under the first section of this Article 6, including without
limitation claims for: (1) all foreseeable consequential damages; (2) the costs of any required,
reasonable and necessary repair, cleanup or detoxification of the Property and the preparation
and implementation of reasonable and necessary closure, remedial or other required plans all to
the extent required by an environmental regulatory agency asserting jurisdiction under
Hazardous Materials Laws; and (3) all reasonable costs and expenses incurred by Beneficiary in
connection with clauses (1) and (2), including but not limited to reasonable attorneys' fees and
other professional services fees and costs. This indemnification applies whether or not any
government agency has issued a cleanup order. Losses, claims, costs, suits, liability, and
expenses covered by this indemnification provision include, but are not limited to: (i) losses
attributable to diminution in the value of the Property; (ii) loss or restriction of use of rentable
space on the Property; (iii) adverse effect on the marketing of any rental space on the Property;
and (iv) penalties and fines levied by, and remedial or enforcement actions of any kind issued by
any regulatory agency (including but not limited to the costs of any required testing, remediation,
repair, removal, cleanup or detoxification of the Property and surrounding properties). The
forgoing indemnity shall not apply to any claims, losses, damages, liabilities, fines, penalties, or
charges that are caused by the sole negligence or willful misconduct of the Indemnified Parties.
(d) Without Beneficiary's prior written consent, which shall not be
unreasonably withheld, Trustor may not take any remedial action in response to the presence of
any Hazardous Materials on, under, or about the Property, nor enter into any settlement
agreement, consent decree, or other compromise in respect to any Hazardous Material Claims,
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which remedial action, settlement, consent decree or compromise might, in Beneficiary's
reasonable judgment, impairs the value of the Beneficiary's security hereunder; provided,
however, that Beneficiary's prior consent shall not be necessary in the event that the presence of
Hazardous Materials on or under the Property either poses an immediate threat to the health,
safety or welfare of any individual or is of such a nature that an immediate remedial response is
necessary and it is not reasonably practicable to obtain Beneficiary's consent before taking such
action, provided that in such event Trustor shall notify Beneficiary as soon as practicable of any
action so taken. Beneficiary agrees not to withhold its consent, where such consent is required
hereunder, if either: (1) a particular remedial action is ordered by a court of competent
jurisdiction; (2) Trustor will or may be subjected to civil or criminal sanctions or penalties if it
fails to take a required action; (3) Trustor establishes to the reasonable satisfaction of Beneficiary
that there is no reasonable alternative to such remedial action which would result in less
impairment of Beneficiary's security hereunder; or (4) the action has been agreed to by
Beneficiary.
(e) The Trustor hereby acknowledges and agrees that: (1) this Article is
intended as the Beneficiary's written request for information (and the Trustor's response)
concerning the environmental condition of the Property as required by California Code of Civil
Procedure Section 726.5; and (2) each representation and warranty in this Deed of Trust or any
of the other Authority Documents (together with any indemnity applicable to a breach of any
such representation and warranty) with respect to the environmental condition of the property is
intended by the Beneficiary and the Trustor to be an "environmental provision" for purposes of
California Code of Civil Procedure Section 736.
(f) In the event that any portion of the Property is determined to be
"environmentally impaired" (as that term is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of
Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the
Beneficiary's or the Trustee's rights and remedies under this Deed of Trust, the Beneficiary may
elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to: (1)
waive its lien on such environmentally impaired or affected portion of the Property; and (2)
exercise: (i) the rights and remedies of an unsecured creditor, including reduction of its claim
against the Trustor to judgment; and (ii) any other rights and remedies permitted by law. For
purposes of determining the Beneficiary's right to proceed as an unsecured creditor under
California Code of Civil Procedure Section 726.5(a), the Trustor will be deemed to have
willfully permitted or acquiesced in a release or threatened release of hazardous materials, within
the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or
threatened release of hazardous materials was knowingly or negligently caused or contributed to
by any lessee, occupant, or user of any portion of the Property and the Trustor knew or in the
exercise of reasonable diligence should have known of the activity by such lessee, occupant, or
user which caused or contributed to the release or threatened release. All costs and expenses,
including (but not limited to) reasonable attorneys' fees, incurred by the Beneficiary in
connection with any action commenced under this paragraph, including any action required by
California Code of Civil Procedure Section 726.5(b) to determine the degree to which the
Property is environmentally impaired, plus interest thereon at the default rate specified in the
Disposition and Loan Agreement until paid, will be added to the indebtedness secured by this
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Deed of Trust and will be due and payable to the Beneficiary upon its demand made at any time
following the conclusion of such action.
ARTICLE 7:
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. The following constitute events of default following
the expiration of any applicable notice and cure periods (each an "Event of Default"): (a) failure
to make any payment to be paid by Trustor under the Authority Documents; (b) failure to
observe or perform any of Trustor's other covenants, agreements or obligations under the
Authority Documents, including, without limitation, the provisions concerning discrimination,
subject to applicable notice and cure periods, if any, included in the Authority Documents; (c)
failure to make any payment, observe or perform any of Trustor's other covenants, agreements,
or obligations under any Secured Obligations; and failure to make any payments or observe or
perform any of Trustor's; or (d) failure to make any payments or observe or perform any of
Trustor's other covenants, agreements or obligations under any other debt instrument or
regulatory agreement secured by the Property, which default is not cured within the time and in
the manner provided therein.
Section 7.2 Acceleration of Maturity. If an Event of Default has occurred and is
continuing, then at the option of the Beneficiary, the amount of any payment related to the Event
of Default and all unpaid Secured Obligations are immediately due and payable, upon written
notice by the Beneficiary to the Trustor (or automatically where so specified in the Authority
Documents), and no omission on the part of the Beneficiary to exercise such option when
entitled to do so may be construed as a waiver of such right.
Section 7.3 The Beneficiary's Right to Enter and Take Possession. If an Event of
Default has occurred and is continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Property and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts that it deems necessary
or desirable to preserve the value or marketability of the Property, or part thereof or interest
therein, increase the income therefrom or protect the security thereof. The entering upon and
taking possession of the Security shall not cure or waive any Event of Default or Notice of Sale
(as defined in Section 7.3(c) below) hereunder or invalidate any act done in response to such
Event of Default or pursuant to such Notice of Sale and, notwithstanding the continuance in
possession of the Security, Beneficiary will be entitled to exercise every right provided for in this
Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise
the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
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(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold
("Notice of Sale"), which notice Trustee or Beneficiary shall cause to be duly filed for record in
the Official Records of the County of San Diego, California; or
(d) Exercise all other rights and remedies provided herein, in the instruments
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing the Secured Obligations.
Section 7.4 Foreclosure By Power of Sale.
(a) Should the Beneficiary elect to foreclose by exercise of the power of sale
herein contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit
with Trustee the Authority Promissory Note which is secured hereby (and the deposit of which
will be deemed to constitute evidence that the unpaid Principal amount of the Secured
Obligations are immediately due and payable), and such receipts and evidence of any
expenditures made that are additionally secured hereby as Trustee may require.
(b) Upon receipt of such Notice of Sale from the Beneficiary, Trustee shall
cause to be recorded, published and delivered to Trustor such Notice of Sale as then required by
law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such
time as may then be required by law and after recordation of such Notice of Sale having been
given as required by law, sell the Security, at the time and place of sale fixed by it in said Notice
of Sale, whether as a whole or in separate lots or parcels or items as Trustee deems expedient and
in such order as it may determine unless specified otherwise by the Trustor according to
California Civil Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful
money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but
without any covenant or warranty, express or implied. The recitals in such deed or any matters
of facts will be conclusive proof of the truthfulness thereof. Any person, including, without
limitation, Trustor, Trustee or Beneficiary, may purchase at such sale.
(c) After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of: (1) the unpaid Principal amount of the Authority Promissory Note; (2) all
other Secured Obligations owed to Beneficiary under the Authority Documents; (3) all other
sums then secured hereby; and (4) the remainder, if any, to Trustor.
(d) Trustee may postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time thereafter, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new Notice of Sale.
Section 7.5 Receiver. If an Event of Default occurs and is continuing, Beneficiary, as
a matter of right and without further notice to Trustor or anyone claiming under the Security, and
without regard to the then value of the Security or the interest of Trustor therein, may apply to
any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof),
51 of 119 April 2, 2019, Item # 4.1
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and Trustor hereby irrevocably consents to such appointment and waives further notice of any
application thereof. Any such receiver or receivers will have all the usual powers and duties of
receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as
provided herein, and will continue as such and exercise all such powers until the date of
confirmation of sale of the Security, unless such receivership is sooner terminated.
Section 7.6 Remedies Cumulative. No right, power or remedy conferred upon or
reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right,
power or remedy, but each and every such right, power and remedy will be cumulative and
concurrent and will be in addition to any other right, power and remedy given hereunder or now
or hereafter existing at law or in equity.
Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default will exhaust or impair any such right, power or
remedy, and may not be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
Beneficiary's express or implied consent to breach, or waiver of, any obligation of the Trustor
hereunder will not be deemed or construed to be a consent to any subsequent breach, or further
waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the
part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, will not constitute a waiver by the Beneficiary of
its right hereunder or impair any rights, power or remedies consequent on any Event of Default
by the Trustor.
(b) If the Beneficiary: (1) grants forbearance or an extension of time for the
payment or performance of any Secured Obligations; (2) takes other or additional security or the
payment of any sums secured hereby; (3) waives or does not exercise any right granted in the
Authority Documents; (4) releases any part of the Security from the lien of this Deed of Trust, or
otherwise changes any of the terms, covenants, conditions or agreements in the Authority
Documents; (5) consents to the granting of any easement or other right affecting the Security; or
(6) makes or consents to any agreement subordinating the lien hereof, any such act or omission
will not release, discharge, modify, change or affect the original liability under this Deed of
Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any
part thereof, or any maker, co-signer, endorser, surety or guarantor (unless expressly released);
nor will any such act or omission preclude the Beneficiary from exercising any right, power or
privilege herein granted or intended to be granted in any Event of Default then made or of any
subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or
instruments executed by the Beneficiary will the lien of this Deed of Trust be altered thereby.
Section 7.8 Suits to Protect the Security. The Beneficiary has the power to: (a)
institute and maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Security and the rights of the Beneficiary as may be unlawful or any violation
of this Deed of Trust; (b) preserve or protect its interest (as described in this Deed of Trust) in
the Security; and (c) restrain the enforcement of or compliance with any legislation or other
52 of 119 April 2, 2019, Item # 4.1
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governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the
enforcement for compliance with such enactment, rule or order would impair the Security
thereunder or be prejudicial to the interest of the Beneficiary.
Section 7.9 Trustee May File Proofs of Claim. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting the Trustor, its creditors or its property, the Trustee and/or the Beneficiary,
to the extent permitted by law, will be entitled to file such proofs of claim and other documents
as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such
proceedings and for any additional amount that becomes due and payable by the Trustor
hereunder after such date.
Section 7.10 Waiver. The Trustor waives presentment, demand for payment, notice of
dishonor, notice of protest and nonpayment, protest, notice of interest on interest and late
charges, and diligence in taking any action to collect any Secured Obligations, including but not
limited to sums owing under the Authority Promissory Note, or in proceedings against the
Security, in connection with the delivery, acceptance, performance, default, endorsement or
guaranty of this Deed of Trust.
Section 7.11 Investor Rights. If a default or an Event of Default shall have occurred,
whenever the Authority delivers any notice or demand to the Trustor, the Authority shall at the
same time deliver to the Approved Lenders and the Investor, a copy of such notice or demand.
The Investor shall (insofar as the rights of the Authority are concerned) have the right, but not
the obligation, at its option to cure such default or Event of Default as follows: (a) forty-five (45)
days after the Investor's receipt of such notice to cure any default under the Loan Documents;
and (b) If a default is incapable of being cured within the forty-five (45) day period set forth in
item (a) above, so long as such cure is commenced within the forty-five (45) days and is being
diligently pursued to completion, the Authority will give the Investor additional time to cure
such default, but in no event later than one hundred twenty (120) days, and Beneficiary agrees to
accept cures thereunder by Investor.
ARTICLE 8:
MISCELLANEOUS
Section 8.1 Amendments. This Deed of Trust cannot be waived, changed, discharged
or terminated orally, but only by an instrument in writing signed by Beneficiary and Trustor.
Section 8.2 Reconveyance by Trustee. Upon written request of Beneficiary stating
that all Secured Obligations have been paid or forgiven, and all obligations under the Authority
Documents have been performed, and upon surrender of this Deed of Trust to Trustee for
cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee
shall fully reconvey the Security to Trustor, or to the person or persons legally entitled thereto.
Section 8.3 Notices.
53 of 119 April 2, 2019, Item # 4.1
1552\12\1949162.11 17
(a) If at any time after the execution of this Deed of Trust it becomes
necessary or convenient for one of the parties hereto to serve any notice, demand or
communication upon the other party, such notice, demand or communication must be in writing
and is to be served personally, by reputable overnight delivery service (which provides a delivery
receipt) or by depositing the same in the registered United States mail, return receipt requested,
postage prepaid and, (1) if intended for Beneficiary is to be addressed to:
Authority:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attention: Executive Director
and (2) if intended for Trustor shall be addressed to:
Villa de Vida, L.P.
c/o Villa de Vida
10620 Treena Street, Suite 230
San Diego, CA 92131
Attn: Executive Director
Mercy Housing California
1500 South Grand Avenue, Suite 100
Los Angeles, CA 90015
Attn: Vice President
with copies to:
Wells Fargo Affordable Housing
Community Development Corporation
MAC D1053-170
301 South College Street
Charlotte, NC 28288
Attention: Director of Tax Credit Asset Management
Any notice, demand or communication will be deemed given, received, made or communicated
on the date personal delivery is effected or, if mailed in the manner herein specified, on the
delivery date or date delivery is refused by the addressee, as shown on the return receipt. A copy
of any notice sent to the Beneficiary must also be sent to the Office of the City Clerk at the above
address. Either party may change its address at any time by giving written notice of such change
to Beneficiary or Trustor as the case may be, in the manner provided herein, at least ten (10) days
prior to the date such change is desired to be effective. Trustor's limited partner shall have all the
notice and cure rights set forth in the Disposition and Loan Agreement.
Section 8.4 Successors and Joint Trustors. Where an obligation created herein is
binding upon Trustor, the obligation also applies to and binds any transferee or successors in
interest. Where the terms of the Deed of Trust have the effect of creating an obligation of the
Trustor and a transferee, such obligation will be deemed to be a joint and several obligation of
54 of 119 April 2, 2019, Item # 4.1
1552\12\1949162.11 18
the Trustor and such transferee. Where more than one entity or person is signing as Trustor, all
obligations of Trustor will be deemed to be a joint and several obligation of each and every
entity and person signing as Trustor.
Section 8.5 Captions. The captions or headings at the beginning of each Section
hereof are for the convenience of the parties and are not a part of this Deed of Trust.
Section 8.6 Invalidity of Certain Provisions. Every provision of this Deed of Trust is
intended to be severable. In the event any term or provision hereof is declared to be illegal or
invalid for any reason whatsoever by a court or other body of competent jurisdiction, such
illegality or invalidity will not affect the balance of the terms and provisions hereof, which terms
and provisions will remain binding and enforceable. If the lien of this Deed of Trust is invalid or
unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of
the Security, the unsecured or partially secured portion of the debt, and all payments made on the
debt, whether voluntary or under foreclosure or other enforcement action or procedure, will be
considered to have been first paid or applied to the full payment of that portion of the debt that is
not secured or partially secured by the lien of this Deed of Trust.
Section 8.7 Governing Law. This Deed of Trust is to be governed by and construed in
accordance with the laws of the State of California.
Section 8.8 Gender and Number. In this Deed of Trust the singular includes the plural
and the masculine includes the feminine and neuter and vice versa, if the context so requires.
Section 8.9 Deed of Trust, Mortgage. Any reference in this Deed of Trust to a
mortgage also refers to a deed of trust and any reference to a deed of trust also refers to a
mortgage.
Section 8.10 Actions. Trustor agrees to appear in and defend any action or proceeding
purporting to affect the Security.
Section 8.11 Substitution of Trustee. 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 will be
vested with all title, powers, and duties conferred upon any Trustee herein named or acting
hereunder. Each such appointment and substitution is to 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, will
be conclusive proof of proper appointment of the successor trustee.
Section 8.12 Statute of Limitations. 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.
Section 8.13 Acceptance by Trustee. 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 a pending
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sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or
Trustee is to be a party unless brought by Trustee.
Section 8.14 Tax Credit Provisions.
(a) Notwithstanding anything to the contrary contained herein or in any
documents secured by this Deed of Trust or contained in any subordination agreement, and to the
extent applicable, the Beneficiary acknowledges and agrees that in the event of a foreclosure or
deed-in-lieu of foreclosure (collectively, "Foreclosure") with respect to the Security encumbered
by this Deed of Trust, the following rule contained in 26 U.S.C. Section 42(h)(6)(E)(ii), as
amended, applies:
(b) For a period of three (3) years from the date of Foreclosure, with respect
to any unit that had been regulated by the Regulatory Agreement with the California Tax Credit
Allocation Committee: (a) none of the tenants occupying those units at the time of Foreclosure
may be evicted or their tenancy terminated (other than for good cause); (b) nor may any rent be
increased except as otherwise permitted under Section 42 of the Internal Revenue Code.
[Signature Page Follows]
56 of 119 April 2, 2019, Item # 4.1
Deed of Trust
Signature Page
1552\12\1949162.11
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year first above written.
TRUSTOR:
VILLA DE VIDA POWAY, L.P., a California limited partnership
By: Villa de Vida GP, LLC, a California limited liability
company, its Managing General Partner
By: Mercy Housing Calwest, a California nonprofit
public benefit corporation, its sole member and
manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
By: VDV POWAY LLC, a California limited liability
company, its Administrative General Partner
By: Villa de Vida, Inc., a California nonprofit public
benefit corporation, its sole member and manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
57 of 119 April 2, 2019, Item # 4.1
1552\12\1949162.11
STATE OF CALIFORNIA )
)
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.
______________________________________
Name: ______________________________
Name: Notary Public
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.
58 of 119 April 2, 2019, Item # 4.1
1552\12\1949162.11
STATE OF CALIFORNIA )
)
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.
______________________________________
Name: ______________________________
Name: Notary Public
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.
59 of 119 April 2, 2019, Item # 4.1
A-1
1552\12\1949162.11
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land referred to is situated in the County of San Diego, City of Poway, State of California,
and is described as follows:
60 of 119 April 2, 2019, Item # 4.1
E-1
1552\12\2547457.7
ATTACHMENT E
DEVELOPMENT SCHEDULE
The attached Development Schedule hereby supersedes the Development Schedule attached as
Exhibit B of the Original DDA.
This Development Schedule summarizes the schedule for various activities under the Disposition
and Development Agreement to which this exhibit is attached. The description of items in this
Development Schedule is meant to be descriptive only, and shall not be deemed to modify in any
way the provisions of the Agreement to which such items relate. Section references herein to the
Agreement are intended merely as an aid in relating this Development Schedule to other
provisions of the Agreement and shall not be deemed to have any substantive effect. Times for
performance are subject to Force Majeure, as further provided in Section 10.3 of the Agreement.
Whenever this Development Schedule requires the submission of plans or other
documents at a specific time, such plans or other documents, as submitted, shall be complete and
adequate for review by the Authority or other applicable governmental entity within the time set
forth herein. Prior to the time set forth for each particular submission, the Developer shall
consult with Authority and City staff informally as necessary concerning such submission in
order to assure that such submission will be complete and in a proper form within the time for
submission set forth herein.
Obligation Section Schedule
Community Outreach Meeting ERNA September 2016
Developer shall submit to the Authority
Concept Drawings.
2.3(a)(1) Not later than November 1, 2016. (Deemed
completed)
Parties shall have negotiated mutually
acceptable Tenant Selection Plan
2.13 Not later than sixty (60) days from the Effective Date
(December 5, 2016) (Deemed completed)
Developer shall submit to the Authority
Schematic Design Drawings.
2.3(a)(2) Not later than February 15, 2017. (Deemed
completed)
Developer shall submit applications
governmental approvals for the
Improvements.
2.2(a) Not later than November 1, 2016 for all entitlement
applications and no later than 120 days prior to the
Close of Escrow for all building plan and site
improvements. (Deemed completed)
Developer shall submit to the Authority
Final Construction Drawings.
2.3(a)(2) Prior to the Close of Escrow and in no event later than
April 22, 2019. (Deemed completed)
Developer shall submit a first round
application for a Tax Credit Reservation.
2.5(b) February 28, 2018 or such other date set forth by
TCAC for the first competitive application fund round.
(Deemed completed)
Developer shall submit three (3)
proposals from prospective contractors.
2.9(a) Not later than March 1, 2018. (Deemed completed)
Developer shall submit a timely and
complete application for a County Loan
which is administered through a Notice
of Funding Availability process
administered through the County of San
2.6(c) Not later than June 1, 2016. (Deemed completed)
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1552\12\2547457.7 2
Obligation Section Schedule
Diego Department of Housing and
Community Development.
Developer shall submit a timely and
complete application for a County
Project Based Vouchers which is
administered through a Notice of
Funding Availability process
administered through the County of San
Diego Department of Housing and
Community Development.
2.6(d) Not later than October 31, 2016. (Deemed completed)
Intentionally Deleted
2.6(b) Intentionally Deleted.
Developer shall submit any updates to
the Financing Proposal.
2.4(b) Promptly, as necessary to reflect material amendments
to the initial Financing Proposal and the later approved
Financing Plan, including but not limited to any
material amendments or modifications to the
development budget (including the unavailability of
any sources of financing identified in Sections 2.5 and
2.6. (Note- Approved Financing Plan is appended to
the Third Amendment to which this Schedule is
attached.)
Developer shall receive all necessary
governmental approvals for the
Improvements.
3.4 Prior to Closing for all building and infrastructure
permits, but in no case later than May 1, 2019.
(Deemed completed)
Developer shall submit the proposed
Construction Contracts for the
Improvements for Authority approval.
2.9(a) Not later than thirty (30) days prior to the Close of
Escrow. (Deemed completed)
Authority shall promptly review and
approve Construction Contract.
2.9(b) Within ten (10) days following the Authority's receipt
of the complete Construction Contract. (Deemed
completed)
Developer will grant to the Authority,
pursuant to the Assignment Agreement,
a valid, second priority continuing
security interest in Collateral Documents
4.11 On the Effective Date and as necessary upon
Developer's execution of additional Collateral
Documents.
Close of Escrow (recording of the
Memorandum of DDLA, the Authority
Deed of Trust, the Authority Regulatory
Agreement, and the Notice of
Affordability Restrictions in the Official
Records).
3.4 No later than 180 days following an award of 9% tax
credits, but in no event later than April 22, 2019.
(Note- Close of Escrow is expected on April 9, 2019)
Developer shall furnish to the Authority
evidence of the insurance coverage
meeting the requirements of Section
6.10
2.11 On or before the Close of Escrow.
Developer shall obtain one (1) labor and
material bond and one (1) performance
bond for construction of the
Improvements meeting the requirements
2.10 On or before the Close of Escrow.
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Obligation Section Schedule
of Section 2.10 for Authority approval.
Commence Construction 5.3 Within ten (10) days of the Close of Escrow, but in no
event later than May 1, 2019.
Developer shall submit to the Authority
and updates to Resident Services Plan
and Resident Services Budget
6.9 Not later than six (6) months after commencement of
construction of Improvements. (Note- Initial Resident
Services Plan and Resident Services Budget are
appended to the Third Amendment to which this
Schedule is attached.)
Developer shall submit to the Authority
an initial proposed Management Plan.
2.8(a) Not later than six (6) months after commencement of
construction of Improvements.
Authority shall approve or disapprove
the Management Plan in writing.
2.8(b), 6.8 Within fifteen (15) calendar days following the
Authority's receipt of the complete Management Plan
and in no event later than no later than six (6) months
after commencement of construction of the
Development.
Complete Construction 5.4 No later than 18 months following commencement of
construction, but in no case later than December 31,
2020.
Developer shall provide to Authority a
draft financial accounting of all sources
and uses of funds for the Development
5.16 No later than ninety (90) days following completion of
construction of the Development and issuance of the
Certificate of Completion, expected to be
approximately May 1, 2021.
Developer shall submit to the Authority
a copy of the Development's cost
certification report prepared by the
Developer's accountant
No later than one hundred fifty (150) days following
completion of construction, expected to be
approximately June 1, 2021
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F-1
1552\12\2547457.7
ATTACHMENT F
FORM OF AUTHORITY
REGULATORY AGREEMENT
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attention: Attention: Executive Director
NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE
SECTIONS 6103 AND 27383
APN: 317-152-14-00
REGULATORY AGREEMENT AND DECLARATION
OF RESTRICTIVE COVENANTS
(Villa De Vida)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement") is made
and entered into as of April __, 2019, by and between the Poway Housing Authority, a public
body, corporate and politic (the "Authority") and Villa de Vida Poway, L.P. (the "Owner").
RECITALS
A. These Recitals refer to and utilize certain capitalized terms which are defined in
Article 1 of this Agreement. The Parties intend to refer to those definitions in connection with
the use of capitalized terms in these Recitals.
B. The Authority and the Owner executed that certain Disposition, Development and
Loan Agreement, as of October 4, 2016, and recorded in the Official Records of San Diego
County, California (the "Official Records") on April 10, 2017, as Document No. 2017-016002,
as amended by that certain First Amendment to the Land Disposition, Development and Loan
Agreement dated as of June 20, 2017, and recorded in the Official Records on July 10, 2017, as
Document No. 2017-03098, as further amended by that certain Second Amendment to the Land
Disposition, Development and Loan Agreement dated as of February 6, 2018, and recorded in
the Official Records on March 22, 2018, as Document No. 2018-0113457, as further amended by
that certain Third Amendment to the Land Disposition, Development and Loan Agreement dated
as of April 2, 2019, as such may be amended from time to time (collectively, the "Disposition
and Loan Agreement"), under which the Authority agreed to loan and the Owner agreed to
borrow up to Three Million Four Hundred Fifty Thousand Dollars ($3,450,000) (the "Authority
Loan"), which the Owner will use, together with funds obtained from other sources, for the
acquisition, development and construction of approximately fifty-four (54) affordable units.
C. The funds loaned to the Owner pursuant to the Disposition and Loan Agreement
consist of Housing Fund Proceeds. Pursuant to Health and Safety Code Section 33334.3, the
Authority must restrict developments assisted with Housing Fund Proceeds, so that the
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Developments remain affordable to low and moderate income households for the longest feasible
time. The Authority is requiring the execution of this Agreement in order to implement the
requirements Health and Safety Code Section 33334.3.
D. The Authority has agreed to make the Authority Loan to the Owner on the
condition that the Development be maintained and operated in accordance with Health and
Safety Code Sections 33334.2 et seq., and 33413(b)(2)(A)(i) and 34176.1 and in accordance with
additional restrictions concerning affordability, operation, and maintenance of the Development,
as specified in this Regulatory Agreement, and the Disposition Agreement. The Authority has
determined that restriction of seven (7) Units for Extremely Low Income Households pursuant to
Section 2.1 below, will satisfy the requirements of Health and Safety Code 34167.1.
E. In consideration of receipt of the Authority Loan, the Owner has further agreed to
observe all the terms and conditions set forth below.
F. In order to ensure that the entire Development will be used and operated in
accordance with these conditions and restrictions, the Authority and the Owner wish to enter into
this Agreement, which is secured by the Authority Deed of Trust.
THEREFORE, the Authority and the Owner hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Definitions. When used in this Agreement, the following terms shall have the
respective meanings assigned to them in this Article 1.
(a) "Actual Household Size" means the actual number of persons in the
applicable household.
(b) "Adjusted Income" means the total anticipated annual income of all
persons in a household, as calculated in accordance with 25 California Code of Regulations
Section 6914 or pursuant to a successor State housing program that utilizes a reasonably similar
method of calculation of adjusted income. In the event that no such program exists, the
Authority shall provide the Owner with a reasonably similar method of calculation of adjusted
income as provided in said Section 6914.
(c) "Agreement" means this Regulatory Agreement and Declaration of
Restrictive Covenants.
(d) "Authority Deed of Trust" means the deed of trust in favor of the
Authority encumbering the Property which secures repayment of the Authority Loan and
performance of this Agreement.
(e) "Authority Loan" means the loan from the Authority to the Owner in an
amount not to exceed Three Million Four Hundred Fifty Thousand Dollars ($3,450,000).
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(f) "Assumed Household Size" shall have the meaning set forth in
Section 2.2(d). The definition is utilized to calculate affordable rent and is not intended to be a
limit on the number of persons occupying a unit.
(g) "City" means the City of Poway, a municipal corporation.
(h) "Development" means the Property and the Improvements.
(i) "Disposition and Loan Agreement" has the meaning set forth in Recital B.
(j) "Dissolved RDA" means the dissolved Poway Redevelopment Agency, a
public body, corporate and politic.
(k) "Extremely Low Income Household" means a household with an Adjusted
Income that does not exceed the qualifying limits for extremely low income households, adjusted
for Actual Household Size, as established and amended from time to time pursuant to Section 8
of the United States Housing Act of 1937, and as published by the State of California
Department of Housing and Community Development.
(l) "Extremely Low Income Rent" means the rent permitted to be charged for
an Extremely Low Income Unit pursuant to Section 2.2(a) below.
(m) "Extremely Low Income Unit" means the Units, which, pursuant to
Section 2.1(g) below, are required to be occupied by Low Income Households.
(n) "Housing Fund Proceeds" means any of the funds transferred to the
Authority, together with any funds generated from housing assets, maintained in the Low and
Moderate Income Housing Asset Fund, created in the accounts of the Authority pursuant to
Health and Safety Code Section 34176(d).
(o) "Improvements" means the approximately fifty-four (54) units of
affordable housing to be constructed on specified portions of the Property, including the
manager's unit, all common areas, amenities, plans, entitlements, appurtenances, improvement
easements, buildings and fixtures associated with the Property.
(p) "Investor Limited Partner" means, Wells Fargo Affordable Housing
Community Development Corporation, its successors and/or assigns, as the Investor of the
Developer, the tax credit limited partner or partners, and their respective successors and assigns,
admitted to the Owner's partnership in connection with the issuance of low income housing tax
credits to the Development, which admission will occur concurrent with closing of construction
financing for development of the Improvements.
(q) "Low Income Household" shall mean a household with an Adjusted
Income that does not exceed the qualifying limits for lower income households, adjusted for
Actual Household Size, as established and amended from time to time pursuant to Section 8 of
the United States Housing Act of 1937, and as published by HCD.
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(r) "Low Income Rent" shall mean the maximum allowable rent for a Low
Income Unit pursuant to Section 2.2(c) below.
(s) "Low Income Units" shall mean the Units, which, pursuant to
Section 2.1(c) below, are required to be occupied by Low Income Households.
(t) "Median Income" means the median gross yearly income adjusted for
Actual Household Size (to qualify residents) or Assumed Household Size (to calculate rents), as
applicable, in the County of San Diego, California, as published from time to time by the State of
California Department of Housing and Community Development. In the event that such income
determinations are no longer published, or are not updated for a period of at least eighteen (18)
months, the Authority shall provide the Owner with other income determinations which are
reasonably similar with respect to methods of calculation to those previously published by the
State of California Department of Housing and Community Development.
(u) "Owner" means Villa de Vida Poway, L.P., a California limited
partnership and its successors and assigns.
(v) "Property" means the real property located in the City of Poway, County
of San Diego, more particularly described in Exhibit A attached hereto and incorporated herein,
also referred to as the "Property")
(w) "Rent" means the total of monthly payments by the residents of a Unit
(other than the manager's unit) for the following: use and occupancy of the Unit and land and
associated facilities, including parking; any separately charged fees or service charges assessed
by Owner which are required of all residents, other than security deposits; the cost of an
adequate level of service for utilities paid by the resident, including garbage collection, sewer,
water, electricity, gas and other heating, cooking and refrigeration fuel, but not cable or
telephone service; and any other interest, taxes, fees or charges for use of the land or associated
facilities and assessed by a public or private entity other than Owner, and paid by the Resident.
(x) "Resident" means a household legally occupying a Unit pursuant to a valid
lease with Owner.
(y) "Term" means the term of this Agreement, which commences as of the
date of this Agreement and, unless terminated earlier or extended by the Parties pursuant to this
Agreement, ends fifty-seven (57) years from the date this Agreement is recorded against the
Property.
(z) "Unit" means one (1) of the approximately fifty-four (54) units (including
the manager's unit) to be constructed as part of the Development.
(aa) "Very Low Income Household" means a household with an Adjusted
Income that does not exceed the qualifying limits for very low income households, adjusted for
Actual Household Size, as established and amended from time to time pursuant to Section 8 of
the United States Housing Act of 1937, and as published by the State of California Department
of Housing and Community Development.
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(bb) "Very Low Income Rent" means the rent permitted to be charged for a
Very Low Income Unit pursuant to Section 2.2(b) below.
(cc) "Very Low Income Units" means the Units, which, pursuant to
Section 2.1(b) below, are required to be occupied by Very Low Income Households.
ARTICLE 2.
AFFORDABILITY COVENANTS
2.1 Occupancy Requirements. The Units shall be occupied by Residents meeting the
following income requirements:
(a) Extremely Low Income Units. Seven (7) Units, including six (6) one-
bedroom Units and one (1) two-bedroom Units shall be rented to and occupied by or, if vacant,
available for occupancy by Extremely Low Income Households; and
(b) Very Low Income Units. Eight (8) Units, including six (6) one-bedroom
Units, and two (2) two-bedroom Units shall be rented to and occupied by or, if vacant, available
for occupancy by Very Low Income Households.
(c) Low Income Units. Eleven (11) Units, including eleven (11) one-bedroom
Units shall be rented to and occupied by or, if vacant, available for occupancy by Low Income
Households.
(d) Manager's Unit. One (1) one-bedroom Unit shall be available for
designation as the manager's unit.
(e) Preservation of Extremely Low Income Units. In the event of a
foreclosure of the Construction Loan prior to Construction Loan Payoff, then the Authority and
the entity acquiring the Development at foreclosure shall apportion the affordability targeting in
a manner consistent with Health and Safety Code Section 34176.1. In the event of a loss of the
Section 8 subsidy, then the Authority and the entity the Developer shall apportion the
affordability targeting in a manner consistent with Health and Safety Code Section 34176.1. In
no event will the occupancy requirements imposed after a foreclosure of the Construction Loan
or deed in lieu of foreclosure require the Owner's successor in interest to provide more than
seven (7) Extremely Low Income Units.
(f) Fair Housing. The Development shall be operated at all times in
compliance with the provisions of: (1) the Unruh Act; (2) the California Fair Employment and
Housing Act, (3) Section 504 of the Rehabilitation Act of 1973; (4) the United States Fair
Housing Act, as amended, and (5) any other applicable law or regulation (including the
Americans With Disabilities Act, to the extent applicable to the Development). Owner agrees to
indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the
Authority) the Authority, and its boardmembers, officers and employees, from all suits, actions,
claims, causes of action, costs, demands, judgments and liens arising out of Owner's failure to
comply with applicable legal requirements related to housing for persons with disabilities. The
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provisions of this subsection shall survive expiration of the Term or other termination of this
Agreement, and shall remain in full force and effect.
2.2 Allowable Rent.
(a) Extremely Low Income Rent. Subject to Section 2.3 below, the Rent
charged to Residents of the Extremely Low Income Units shall not exceed one-twelfth (1/12th) of
thirty percent (30%) of thirty percent (30%) of Median Income, adjusted for Assumed Household
Size.
(b) Very Low Income Rent. Subject to Section 2.3 below, the Rent charged to
Residents of the Very Low Income Units shall not exceed one-twelfth (1/12th) of thirty percent
(30%) of fifty percent (50%) of Median Income, adjusted for Assumed Household Size.
(c) Low Income Rent. Subject to Section 2.3 below, the Rent charged to
Residents of the Low Income Units shall not exceed one-twelfth (1/12th) of thirty percent (30%)
of sixty percent (60%) of Median Income, adjusted for Assumed Household Size.
(d) Assumed Household Size. In calculating the allowable Rent for the Units,
the following "Assumed Household Sizes" shall be utilized, provided that the Development
receives an allocation of low income housing tax credits, otherwise Assumed Household Size
shall be determined pursuant to the terms of Health and Safety Code Section 50052.5(h):
Number of Bedrooms Assumed Household Size
One 2
Two 3
Three 5
(e) No later than November 1 of each calendar year, the Authority shall
provide the Owner with a schedule of permissible maximum Extremely Low Income Rents, Very
Low Income Rents and Low Income Rents for the succeeding year. Under no circumstance may
Owner raise rents above the permissible maximum rents as allowed under the annual rent
schedule provided by the Authority.
2.3 Increased Income of Residents.
(a) Extremely Low Income Household to Very Low or Low Income
Household. If, upon recertification of a Resident's income, the Owner determines that a former
Extremely Low Income Household's Adjusted Income has increased and exceeds the qualifying
income for an Extremely Low Income Household set forth in Section 1.1 above, but does not
exceed the qualifying limit for a Very Low Income Household or Low Income Household as set
forth in Section 1.1 above, then, upon expiration of the Resident's lease:
(1) Such Resident's Unit may be considered a Very Low Income Unit
or Low Income Unit, as applicable;
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(2) Such Resident's Rent may be increased to a Very Low Income
Rent or a Low Income Rent, as applicable, upon sixty (60) days written notice to the Resident;
and
(3) The Owner shall rent the next available Unit to an Extremely Low
Income Household at an Extremely Low Income Rent.
(b) Very Low Income Household to Low Income Household. If, upon
recertification of a Resident's income, the Owner determines that a former Very Low Income
Household's Adjusted Income has increased and exceeds the qualifying income for a Very Low
Income Household set forth in Section 1.1above, but does not exceed the qualifying limit for a
Low Income Household as set forth in Section 1.1 above, then, upon expiration of the Resident's
lease:
(1) Such Resident's Unit may be considered a Low Income Unit;
(2) Such Resident's Rent may be increased to a Low Income Rent,
upon sixty (60) days written notice to the Resident; and
(3) The Owner shall rent the next available Unit to a Very Low
Income Household at a Very Low Income Rent.
(c) Non-Qualifying Household. If, upon recertification of the income of a
resident, the Owner determines that a former Extremely Low Income Household, Very Low
Income Household or Low Income Household has an Adjusted Income exceeding the maximum
qualifying income for a Low Income Household, such Resident shall be permitted to continue
occupying the Unit and upon expiration of the Resident's lease and upon sixty (60) days written
notice, the Rent may be increased to the lesser of one-twelfth (1/12th) of thirty percent (30%) of
actual Adjusted Income of the Resident, or fair market rent (subject to 24 C.F.R. 92.252(i)(2)
regarding low income housing tax credit requirements) and the Owner shall rent the next
available Unit to a Extremely Low Income Household, Very Low Income Household or Low
Income Household to meet the requirements of Section 2.1 above.
(d) Termination of Occupancy. Upon termination of occupancy of a Unit by a
Resident, such Unit shall be deemed to be continuously occupied by a household of the same
income level (e.g., Extremely Low Income Household, Very Low Income Household or Low
Income Household) as the income level of the vacating Resident, until such Unit is reoccupied,
at which time the income character of the Unit (e.g., Extremely Low Income Unit, Very Low
Income Unit or Low Income Unit) shall be redetermined. In any event, Owner shall maintain the
occupancy requirements set forth in section 2.1 above.
2.4 Resident Selection.
(a) The Owner must provide the Authority for its review and approval the
Owner's written marketing plan in compliance with the tenant selection plan approved pursuant
to Section 2.13 of the Disposition and Loan Agreement.
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(b) The Owner shall not discriminate against any applicants for tenancy on the
basis of source of income or rent payment (for example, without limitation, Temporary
Assistance for Needy Families (TANF) or Section 8), and the Owner shall consider a prospective
Resident's previous rent history of at least one (1) year, or such other time period the Owner
deems reasonable, as evidence of the prospective Resident's ability to pay the applicable Rent.
The ability to pay shall be demonstrated if the prospective Resident can document that the
prospective Resident's gross income is at least two (2) times the prospective rent. The Owner, in
the reasonable exercise of its discretion, may waive the requirement that the prospective
Resident's gross income equal at least two (2) times the prospective rent, and admit prospective
Residents with lower gross incomes.
2.5 Lease Provisions. The Owner shall include in leases for all Units provisions
which authorize the Owner to immediately terminate the tenancy of any household one or more
of whose members misrepresented any fact material to the household's qualification as an
Extremely Low Income Household, Very Low Income Household or Low Income Household, as
applicable. Each lease or rental agreement shall also provide that the household is subject to
annual certification in accordance with Section 3.1 below, and that, if the household's income
increases above the applicable limits for an Extremely Low Income Household, Very Low
Income Household or Low Income Household, as applicable, such household's Rent may be
subject to increase.
2.6 Condominium Conversion. The Owner shall not convert the Development units
to condominium or cooperative ownership or sell condominium or cooperative conversion rights
to the Property during the Term of this Agreement.
2.7 Units Available to the Disabled. Owner shall construct the Development to
comply with all applicable federal and state disabled persons accessibility requirements
including the Federal Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, Title II
and/or Title III of the Americans with Disabilities Act of 1990, and Title 24 of the California
Code of Regulations.
ARTICLE 3.
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification. The Owner will obtain, and complete, as a condition to
initial occupancy and maintain on file annually thereafter, income certifications from each
Resident renting any of the Units. The Owner shall make a good faith effort to verify that the
income provided by an applicant or occupying household in an income certification is accurate
by taking two or more of the following steps as a part of the verification process: (a) obtain a
minimum of the three (3) most current pay stubs for all adults age eighteen (18) or older; (b)
obtain an income tax return for the most recent tax year; (c) conduct a credit agency or similar
search; (d) obtain the three (3) most current savings and checking account bank statements; (e)
obtain an income verification form from the applicant's current employer; (f) 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; or (g) if the
applicant is unemployed and has no such tax return, obtain another form of independent
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verification. Copies of Resident income certifications shall be available to the Authority upon
request.
3.2 Annual Report to Authority. The Owner shall submit to the Authority: (a) not
later than the forty-fifth (45th) day after the close of each calendar year, or such other date as may
be requested by the Authority, a statistical report, including income and rent data for all Units, an
assessment of compliance with the Resident Services Plan (including an assessment of the
Resident Services Plan outcomes), an assessment of compliance with the approved Management
Plan, an evaluation of the Management Agent, and (b) within fifteen (15) days after receipt of a
written request, any other information or completed forms requested by the Authority.
3.3 Additional Information. The Owner shall provide any additional information
reasonably requested by the Authority. The Authority shall have the right to examine and make
copies of all books, records or other documents of the Owner which pertain to the Development.
3.4 Records.
(a) The Owner shall keep and maintain at the Development, or elsewhere with
the Authority's written consent, complete, accurate and current records pertaining to the
Development, and shall permit any duly authorized representative of the Authority to inspect
records, including records pertaining to income and household size of Residents, Rent charged
Residents and affirmative marketing requirements. All Resident lists, applications and waiting
lists relating to the Development shall at all times be kept separate and identifiable from any
other business of the Owner and shall be maintained as required by the Authority, in a reasonable
condition for proper audit and subject to examination during business hours by representatives of
the Authority. The Owner shall retain copies of all materials obtained or produced with respect
to occupancy of the Units for a period of at least five (5) years.
(b) The Authority shall notify Owner of any records it deems insufficient.
Owner shall have fifteen (15) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the Authority in such notice, or if a period longer than
fifteen (15) days is reasonably necessary to correct the deficiency, then Owner shall begin to
correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably
possible.
3.5 Annual Operating Budget. The Owner, at least sixty (60) days prior to the end of
each of the Owner's fiscal year, shall furnish the Authority an Annual Operating Budget. Upon
receipt by the Authority of the proposed Annual Operating Budget, the Authority shall promptly
review the same and approve or disapprove it within ten (10) business days. If the Annual
Operating Budget is not approved by the Authority, the Authority shall set forth in writing and
notify the Owner of the Authority's reasons for withholding such approval. The Owner shall
thereafter submit a revised Annual Operating Budget for Authority approval, which approval
shall be granted or denied within ten (10) business days in accordance with the procedures set
forth above.
3.6 Approval of Use of Reserve Funds. The Owner agrees to create and maintain the
reserves required by the Approved Financing (as defined in the Disposition and Loan
Agreement) and the reserves in the amounts approved by the Authority as part of the Financing
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Plan submitted by the Owner pursuant to Section 2.4 of the Disposition and Loan Agreement.
Prior to the use of funds from the reserves, the Owner must submit a written request to withdraw
funds from the reserve account. The written request shall specify the amount requested and state
how the funds will be used. The Authority shall approve such request within thirty (30) days of
receipt of the written request for use of reserves; such request shall not be unreasonably
withheld. If the Authority fails to approve a request within the thirty (30) days, such request
shall be deemed approved.
3.7 Resident Services Plan.
(a) Not less than six (6) months prior to completion and not less than sixty
(60) days prior to the end of the Owner's fiscal year thereafter, Owner shall furnish to the
Authority a draft "Resident Services Plan." Upon receipt by the Authority of the proposed
Resident Services Plan, the Authority shall promptly review the same and approve or disapprove
it within ten (10) business days. If the Resident Services Plan is not approved by the Authority,
the Authority shall set forth in writing and notify the Owner of the Authority's reasons for
withholding such approval, which may include a request by the Authority for a change in the
nature or scope of resident services or a change in service provider, consistent with applicable
low income housing tax credit regulations. The Owner shall thereafter submit the revised
Resident Services Plan within ten (10) business days of notification of disapproval. The
Authority shall either approve or disapprove the submitted revised Resident Services Plan within
ten (10) business days of the date such revised Resident Services Plan is received by the
Authority, and shall approve the revised Resident Services Plan if the requested changes have
been made.
(b) If, as a result of a periodic review, the Authority determines, in its
reasonable judgment, that the Residents of the Development are not receiving material services
and/or there is a failure to achieve outcomes identified in the approved Resident Services Plan,
the Authority shall deliver notice to the Owner of its intention to, in addition to any other
remedies available to the Authority hereunder, require the Owner to: (1) replace the resident
service coordinator or resident services provider; or (2) meet in good faith to consider methods
for improving the resident services being offered to Residents of the Development; or (3) deliver
notice to the Owner requiring the Owner to cause the replacement of the resident services
coordinator or resident services provider with a resident services coordinator or resident services
provider selected by the Authority.
(c) If, after the above procedure, the Authority requires in writing the
replacement of the resident services coordinator or the resident services provider, the Owner
shall promptly dismiss the then resident services coordinator or resident services provider, as
applicable, and shall appoint as the resident services coordinator or resident services provider, as
applicable, a person or entity capable of meeting the standards for a resident services coordinator
or resident services provider, as applicable, under the Resident Services Plan and approved by
the Authority at the Authority's reasonable discretion.
(d) Any contract for the resident services coordinator or resident services
provider, as applicable, for the Development entered into by the Owner shall provide that the
contract can be terminated as set forth above. Failure to remove the resident services coordinator
or the resident services provider, as applicable, in accordance with the provisions of this Section
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shall constitute default under this Agreement, and the Authority may enforce this provision
through legal proceedings as specified in Section 6.5 below.
3.8 On-site Inspection. The Authority shall have the right to perform an on-site
inspection of the Development at least one (1) time per year upon forty-eight hours (48) prior
notice. The Owner agrees to cooperate in such inspection.
ARTICLE 4.
OPERATION OF THE AFFORDABLE DEVELOPMENT
4.1 Residential Use.
(a) The Development shall be operated only for residential use. No part of the
Development shall be operated as transient housing in which the term of Resident occupancy is
less than thirty (30) days.
(b) All Units in the Development shall be made available to and occupied by
income qualified households that include a "special needs" person, meaning a person with
disabilities that meets the requirements under 24. C.F.R. 5.403, who is in need of services or
would benefit from services to be provided at the Development.
4.2 Taxes and Assessments. The Owner shall pay all real and personal property
taxes, assessments, if any, and charges and all franchise, income, employment, old age benefit,
withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such
manner as to prevent any penalty from accruing, or any line or charge from attaching to the
Development; provided, however, that the Owner shall have the right to contest in good faith,
any such taxes, assessments, or charges. In the event the Owner exercises its right to contest any
tax, assessment, or charge against it, the Owner, on final determination of the proceeding or
contest, shall immediately pay or discharge any decision or judgment rendered against it,
together with all costs, charges and interest.
4.3 Nondiscrimination.
(a) All of the Units shall be available for occupancy on a continuous basis to
members of the general public who are income eligible. Developer shall not give preference to
any particular class or group of persons in renting the Units, except to the extent that the Units
are required to be leased to Extremely Low Income Households, Very Low Income Households,
or Low Income Households, or pursuant to Section 4.5 below.
(b) 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
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reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased.
(c) Notwithstanding the preceding paragraph, with respect to familial status,
the preceding paragraph shall not be construed to apply to housing for older persons, as defined
in Section 12955.9 of the Government Code. With respect to familial status, nothing in the
preceding paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51
and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the
Government Code shall apply to the preceding paragraph.
(d) The provisions of this Section shall run with the land and survive
termination of this Agreement.
4.4 Section 8 Certificate Holders. The Owner will accept as residents, on the same
basis as all other prospective residents, persons who are recipients of federal certificates or
vouchers for rent subsidies pursuant to the existing housing program under Section 8 of the
United States Housing Act, or its successor. The Owner shall not apply selection criteria to
Section 8 certificate or voucher holders that are more burdensome than criteria applied to all
other prospective residents, nor shall the Owner apply or permit the application of management
policies or lease provisions with respect to the Development which have the effect of precluding
occupancy of units by such prospective Residents.
4.5 Priority to City, Dissolved RDA and Authority Displacees. To the maximum
extent permitted by law and provided that the applicants meet standard applicant screening
standards for the Development Borrower shall give a priority in the rental of any Units to eligible
households displaced by activity of the City, the Authority, or the Dissolved RDA, as provided in
Health and Safety Code Section 33411.3.
ARTICLE 5.
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities. The Owner is responsible for all management
functions with respect to the Development, including without limitation the selection of
residents, certification and recertification of household size and income, evictions, collection of
rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of
capital items, and security. The Authority shall have no responsibility over management of the
Development. The Owner shall retain a professional property management company, approved
by the Authority in its reasonable discretion, to perform its management duties hereunder. A
resident manager shall also be required. Prior to the commencement of construction of the
Development, the Owner shall submit a proposed "Management Plan" to the Authority for
approval by the Authority. The Authority shall approve or disapprove (with written explanation
for disapproval) of the proposed management plan by notifying the Owner in writing within sixty
(60) days of the date of submission to the Authority.
5.2 Management Agent; Periodic Reports. The Development shall at all times be
managed by an experienced management agent reasonably acceptable to the Authority, with
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demonstrated ability to operate residential facilities like the Development in a manner that will
provide decent, safe, and sanitary housing (as approved, the "Management Agent"). As of the
date of this Agreement, Mercy Housing Management is approved as the Management Agent.
The Owner shall submit for the Authority's approval the identity of any proposed Management
Agent and on-site resident manager. The Owner shall also submit such additional information
about the background, experience and financial condition of any proposed Management Agent
and on-site resident manager as is reasonably necessary for the Authority to determine whether
the proposed Management Agent or on-site resident manager meets the standard for a qualified
Management Agent or on-site resident manager set forth above. If the proposed Management
Agent or on-site resident manager meets the standard for a qualified Management Agent or on-
site resident manager set forth above, the Authority shall approve the proposed Management
Agent or on-site resident manager by notifying the Owner in writing. Unless the proposed
Management Agent or on-site resident manager is disapproved by the Authority within thirty
(30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it
shall be deemed approved.
5.3 Performance Review. In addition to the reporting requirements under Section 5.2
above, the Authority reserves the right to conduct an annual (or more frequently, if deemed
reasonably necessary by the Authority) review of the management practices and financial status
of the Development. The purpose of each periodic review will be to enable the Authority to
determine if the Development is being operated and managed in accordance with the
requirements and standards of this Agreement. The Owner shall cooperate with the Authority in
such reviews.
5.4 Replacement of Management Agent or On-Site Resident Manager.
(a) If, as a result of a periodic review, the Authority determines, in its
reasonable judgment, that the Development is not being operated and managed in accordance
with any of the material requirements and standards of this Agreement, the Authority shall
deliver notice to the Owner of its intention to cause replacement of the Management Agent or
on-site resident manager, including the reasons therefor. Within fifteen (15) days of receipt by
Owner of such written notice, Authority staff and the Owner shall meet in good faith to consider
methods for improving the financial and operating status of the Development. If, after a
reasonable period as determined by the Authority (not to exceed sixty (60) days after the meeting
between the Authority and the Owner), the Authority determines that the Owner is not operating
and managing the Development in accordance with the material requirements and standards of
this Agreement, the Authority may require replacement of the Management Agent or on-site
resident manager.
(b) If, after the above procedure, the Authority requires in writing the
replacement of the Management Agent or on-site resident manager, the Owner shall promptly
dismiss the then Management Agent or on-site resident manager within thirty (30) days notice,
and shall appoint as the Management Agent or on-site resident manager a person or entity
meeting the standards for a Management Agent or on-site resident manager set forth in
Section 5.2 above and approved by the Authority pursuant to Section 5.2 above.
(c) Any contract for the operation or management of the Development entered
into by the Owner shall provide that the contract can be terminated as set forth above. Failure to
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remove the Management Agent or on-site resident manager in accordance with the provisions of
this Section shall constitute default under this Agreement, and the Authority may enforce this
provision through legal proceedings as specified in Section 6.5, below.
5.5 Maintenance Requirements.
(a) The Owner agrees, for the entire Term of this Agreement, to maintain all
interior and exterior improvements, including landscaping, on the Development in good
condition and repair (and, as to landscaping, in a healthy condition), normal 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 and all their respective departments, bureaus, and officials, and in
accordance with the following maintenance conditions:
(1) Landscaping. The Owner agrees to have landscape maintenance
performed at least every other week, including replacement of dead or diseased plants with
comparable plants. Owner agrees to adequately water the landscaping on the Development in
compliance with City policies. No improperly maintained landscaping on the Development shall
be visible from public streets and/or rights of way.
(2) Yard Area. No yard areas on the Development shall be left
unmaintained, including:
(i) broken or discarded furniture, appliances and other,
household equipment stored in yard areas for a period exceeding one (1) week;
(ii) packing boxes, lumber, trash, dirt and other debris in areas
visible from public improvements or neighboring properties; and
(iii) vehicles parked or stored in other than approved parking
areas.
(3) Building. No buildings located on the Development may be left in
an unmaintained condition so that any of the following exist:
(i) violations of state law, uniform codes, or City ordinances;
(ii) conditions that constitute an unsightly appearance that
detracts from the aesthetics or value of the Development or constitutes a private or public
nuisance;
(iii) broken windows;
(iv) graffiti (must be removed within seventy-two (72) hours);
and
(v) conditions constituting hazards and/or inviting trespassers,
or malicious mischief.
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(4) Sidewalks. The Owner shall maintain, repair, and replace as
necessary all private sidewalks adjacent to the Development.
(b) The Authority places prime importance on quality maintenance to protect
its investment and to ensure that all Authority-assisted affordable housing projects within the
City are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of
the Development will be acceptable to the Authority assuming the Owner agrees to provide all
necessary improvements to assure the Development is maintained in good condition. The Owner
shall make all repairs and replacements necessary to keep the Improvements in good condition
and repair.
(c) In the event that the Owner breaches any of the covenants contained in
this Section, and such default continues for a period of seven (7) days after written notice from
the Authority with respect to graffiti, debris, waste material, and general maintenance or thirty
(30) days after written notice from the Authority with respect to landscaping and building
improvements, then the Authority, in addition to whatever other remedy it may have at law or in
equity, shall have the right to enter upon the Development and perform or cause to be performed
all such acts and work necessary to cure the default. Pursuant to such right of entry, the
Authority shall be permitted (but is not required) to enter upon the Development and perform all
acts and work necessary to protect, maintain, and preserve the Improvements and landscaped
areas on the Development, and to attach a lien on the Development, or to assess the
Development, in the amount of the expenditures arising from such acts and work of protection,
maintenance, and preservation by the Authority and/or costs of such cure, including a ten percent
(10%) administrative charge, which amount shall be promptly paid by the Owner to the
Authority upon demand.
5.6 Safety Conditions.
(a) The Owner acknowledges that the Authority places a prime importance on
the security of Authority assisted projects and the safety of the residents and surrounding
community. The Owner agrees to implement and maintain throughout the Term the following
security measures in the Development:
(1) to the extent feasible employ defensible space design principles
and crime prevention measures in the operation of the Development including but not limited to
maintaining adequate lighting in parking areas and pathways;
(2) use its best efforts to work with the San Diego Sheriff's
Department to implement and operate an effective neighborhood watch program and participate
in the Crime Free Multi-Housing Program; and
(3) provide added security including dead-bolt locks for every entry
door, and where entry doors are damaged, replace them with solid-core doors.
(b) The Authority shall have the right to enter on the Development and/or
contact the San Diego County Sherriff's Department if it becomes aware of or is notified of any
conditions that pose a danger to the peace, health, welfare or safety of the Residents and/or the
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surrounding community, and to perform or cause to be performed such acts as are necessary to
correct the condition.
ARTICLE 6.
MISCELLANEOUS
6.1 Term. The provisions of this Agreement shall apply to the Development for the
entire Term even if the entire Authority Loan is paid in full prior to the end of the Term;
provided, however, that the provisions of Sections 2.1 and 4.3 of the Agreement shall run with
the Development and shall remain in effect in perpetuity. This Agreement shall bind any
successor, heir or assign of the Owner, whether a change in interest occurs voluntarily or
involuntarily, by operation of law or otherwise, except as expressly released by the Authority.
The Authority makes the Authority Loan on the condition, and in consideration of, this
provision, and would not do so otherwise.
6.2 Notice of Expiration of Term. The Owner must comply with all notice
requirements of Government Code Section 65863.10, Section 65863.11 and 65863.13, or
successor statutes. The Owner shall also file a copy of any notices sent by the Owner pursuant to
this Section with the Authority Executive Director.
6.3 Compliance with Disposition and Loan Agreement and Program Requirements.
The Owner's actions with respect to the Development shall at all times be in full conformity
with: (a) all requirements of the Disposition and Loan Agreement; (b) all requirements of the
Authority Deed of Trust; and (c) all requirements imposed on projects assisted with Housing
Fund Proceeds under California Health and Safety Code Section 33334.2 et seq.
6.4 Covenants to Run With the Land. The Authority and the Owner hereby declare
their express intent that the covenants and restrictions set forth in this Agreement shall run with
the land, and shall bind all successors in title to the Development, provided, however, that on the
expiration of the Term of this Agreement said covenants and restrictions shall expire, unless
otherwise expressly stated herein. Each and every contract, deed or other instrument hereafter
executed covering or conveying the Development or any portion thereof shall be held
conclusively to have been executed, delivered and accepted subject to such covenants and
restrictions, regardless of whether such covenants or restrictions are set forth in such contract,
deed or other instrument, unless the Authority expressly releases such conveyed portion of the
Development from the requirements of this Agreement.
6.5 Enforcement by the Authority. If the Owner fails to perform any obligation under
this Agreement, and fails to cure the default within thirty (30) days after the Authority has
notified the Owner in writing of the default or, if the default cannot be cured within thirty (30)
days, failed to commence to cure within thirty (30) days and thereafter diligently pursue such
cure, the Authority shall have the right to enforce this Agreement by any or all of the following
actions, or any other remedy provided by law:
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(a) Calling the Loan. The Authority may declare a default under the
Promissory Note, accelerate the indebtedness evidenced by the Promissory Note, and proceed
with foreclosure under the Authority Deed of Trust.
(b) Action to Compel Performance or for Damages. The Authority may bring
an action at law or in equity to compel the Owner's performance of its obligations under this
Agreement, and/or for damages.
(c) Remedies Provided Under Disposition and Loan Agreement. The
Authority may exercise any other remedy provided under the Disposition and Loan Agreement.
(d) Cure by Investor Limited Partner. The Authority hereby agrees to accept
a cure of any default made or tendered hereunder by Investor Limited Partner on the same terms
and conditions as if such cure was made or tendered by the Owner.
6.6 Rights of Third Parties to Enforce Covenants. Notwithstanding any other
provisions of law, all covenants and restrictions contained herein which implement Health and
Safety Code Sections 33334.3 and/or 33413(b)(4), or successor provisions, shall run with the
land and shall be enforceable by the Authority, the City, and any of the parties listed in Health
and Safety Code Section 33334.3(f)(7), so long as such provision or successor provision remains
in effect.
6.7 Listing of Development in Database. The Owner hereby acknowledges and
agrees that Health and Safety Code Section 33418(c) requires that the Development be listed in a
database that shall be made available to the public on the internet and which will include the
street address, assessor's parcel number, and other information about the Development. The
Owner must disclose this requirement to all Residents and prospective Residents.
6.8 Attorneys Fees and Costs. In any action brought to enforce this Agreement, the
prevailing party shall be entitled to all costs and expenses of suit, including attorneys' fees. This
Section shall be interpreted in accordance with California Civil Code Section 1717 and judicial
decisions interpreting that statute.
6.9 Recording and Filing. The Authority and the Owner shall cause this Agreement,
and all amendments and supplements to it, to be recorded against the Development in the
Official Records of the County of San Diego.
6.10 Governing Law. This Agreement shall be governed by the laws of the State of
California.
6.11 Amendments. This Agreement may be amended only by a written instrument
executed by all the parties hereto or their successors in title, and duly recorded in the real
property records of the County of San Diego, California.
6.12 Notice. Formal notices, demands, and communications between the Authority
and the Owner shall be sufficiently given if and shall not be deemed given unless dispatched by
registered or certified mail, postage prepaid, return receipt requested, or delivered by express
81 of 119 April 2, 2019, Item # 4.1
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delivery service, return receipt requested, or delivered personally, to the principal office of the
Authority and the Owner as follows:
If to the Owner:
Villa de Vida, L.P.
c/o Villa de Vida
10620 Treena Street, Suite 230
San Diego, CA 92131
Attn: Executive Director
Mercy Housing California
1500 South Grand Avenue, Suite 100
Los Angeles, CA 90015
Attn: Vice President
with copy to Investor Limited Partner:
Wells Fargo Affordable Housing
Community Development Corporation
MAC D1053-170
301 South College Street
Charlotte, NC 28288
Attention: Director of Tax Credit Asset Management
If to the Authority:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 22604
Attention: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected party may from time to time designate by mail as provided in this
Section. Receipt shall be deemed to have occurred on the date shown on a written receipt for
delivery or refusal of delivery.
A copy of all notices delivered to Owner hereunder shall be delivered simultaneously to
the Investor Limited Partner.
6.13 Waiver of Requirements. Any of the requirements of this Agreement may be
expressly waived by the Authority in writing, but no waiver by the Authority of any requirement
of this Agreement shall, or shall be deemed to, extend to or affect any other provision of this
Agreement.
6.14 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions of this
Agreement shall not in any way be affected or impaired thereby.
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6.15 Multiple Originals; Counterparts. This Agreement may be executed in multiple
originals, each of which is deemed to be an original, and may be signed in counterparts.
6.16 Tax Credit Program. Notwithstanding anything contained herein to the contrary,
for as long as the Property is subject to the requirements of the California and/or Federal Low-
Income Housing Tax Credit Program under the provisions of Section 42 of the Code and Section
23610.5 of the California Revenue and Taxation Code, as applicable (collectively, the "Tax
Credit Program") and there is a conflict between the requirements of the Tax Credit Program and
the affordability provisions set forth in 2.3 above, inclusive, then the provisions of the Tax Credit
Program shall prevail. That notwithstanding, the fact that this Regulatory Agreement and the
Tax Credit Program provide for greater, lesser or different obligations or requirements shall not
be deemed a conflict unless the applicable provisions are inconsistent and could not be
simultaneously enforced or performed.
[Signature Page Follows]
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1552\12\1949376.8 20
IN WITNESS WHEREOF, the Authority and the Owner have executed this Agreement
by duly authorized representatives, all on the date first written above.
AUTHORITY:
POWAY HOUSING AUTHORITY, a public body
corporate and politic
By: ______________________
Tina White, Executive Director
APPROVED AS TO FORM:
GOLDFARB & LIPMAN LLP,
Authority Special Counsel
By: _______________________
Rafael Yaquian
84 of 119 April 2, 2019, Item # 4.1
1552\12\1949376.8 21
OWNER:
VILLA DE VIDA POWAY, L.P., a California limited partnership
By: Villa de Vida GP, LLC, a California limited liability
company, its Managing General Partner
By: Mercy Housing Calwest, a California nonprofit
public benefit corporation, its sole member and
manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
By: VDV POWAY LLC, a California limited liability
company, its Administrative General Partner
By: Villa de Vida, Inc., a California nonprofit public
benefit corporation, its sole member and manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
85 of 119 April 2, 2019, Item # 4.1
1552\12\1949376.8
STATE OF CALIFORNIA )
)
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.
______________________________________
Name: ______________________________
Name: Notary Public
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.
86 of 119 April 2, 2019, Item # 4.1
1552\12\1949376.8
STATE OF CALIFORNIA )
)
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.
______________________________________
Name: ______________________________
Name: Notary Public
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.
87 of 119 April 2, 2019, Item # 4.1
1552\12\1949376.8 A-1
EXHIBIT A
PROPERTY LEGAL DESCRIPTION
The land referred to is situated in the County of San Diego, City of Poway, State of California,
and is described as follows:
88 of 119 April 2, 2019, Item # 4.1
G-1
1552\12\2547457.7
ATTACHMENT G
NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
28 of 119 April 2, 2019, Item # 4.189 of 119 April 2, 2019, Item # 4.1
1552\12\1949743.5 1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attention: Executive Director
NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE
SECTIONS 6103 AND 27383
APN: 317-152-14-00
(Space above this line for Recorder's Use)
NOTICE OF AFFORDABILITY RESTRICTIONS
ON TRANSFER OF PROPERTY
NOTICE IS HEREBY GIVEN, that the Poway Housing Authority, a public
body, corporate and politic (the "Authority"), to carry out certain obligations under
the Community Redevelopment Law of the State of California (Health and Safety
Code Section 33000 et seq.), and the Redevelopment Plan for the Paguay
Redevelopment Project, has required Villa de Vida Poway, L.P., a California
limited partnership (the "Owner") to enter into certain affordability covenants and
restrictions entitled, Regulatory Agreement and Declaration of Restrictive
Covenants (the "Restrictions"), with reference to a housing development (the
"Development") to be constructed on that certain real property (the "Property")
located in the City of Poway, San Diego County, Assessor's Parcel No. 317-152-
14-00, and further described in Exhibit A incorporated herein by reference.
The affordability covenants and restrictions contained in the Restrictions include
without limitation and as further described in the Restrictions:
1. Seven (7) Units, including six (6) one-bedroom Units and one (1) two-
bedroom Units shall be rented to and occupied by or, if vacant, available
for occupancy by Extremely Low Income Households;
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2. Eight (8) Units, including six (6) one-bedroom Units, and two (2) two-
bedroom Units shall be rented to and occupied by or, if vacant, available
for occupancy by Very Low Income Households;
3. Eleven (11) Units, including eleven (11) one-bedroom Units shall be
rented to and occupied by or, if vacant, available for occupancy by Low
Income Households;
4. Additional requirements concerning operation, management, and
maintenance of the Development are also imposed by the Restrictions.
In the event of any conflict between this Notice of Affordability Restrictions on
Transfer of Property (the "Notice") and the Restrictions, the terms of the
Restrictions shall prevail.
The Restrictions have been recorded concurrently herewith, and shall remain in
effect for fifty-seven (57) years from the date the Regulatory Agreement is
recorded with the Office of the San Diego County Recorder or until
_________ __, 20__.
This Notice is being recorded and filed by the Authority in compliance with Health
and Safety Code Sections 33334.3(f)(3) and (4) and Section 33413(c)(5), as
amended, and shall be indexed against the Authority and the Owner.
[Remainder of Page Left Intentionally Blank]
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1552\12\1949743.5
IN WITNESS WHEREOF, the parties have executed this Notice of Affordability
Restrictions on Transfer of Property on or as of ____________ __, 20__.
AUTHORITY:
POWAY HOUSING AUTHORITY, a public body
corporate and politic
By: _______________________
Tina White, Executive Director
APPROVED AS TO FORM:
GOLDFARB & LIPMAN LLP,
Authority Special Counsel
By: _______________________
Rafael Yaquian
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OWNER:
VILLA DE VIDA POWAY, L.P., a California limited partnership
By: Villa de Vida GP, LLC, a California limited liability
company, its Managing General Partner
By: Mercy Housing Calwest, a California nonprofit
public benefit corporation, its sole member and
manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
By: VDV POWAY LLC, a California limited liability
company, its Administrative General Partner
By: Villa de Vida, Inc., a California nonprofit public
benefit corporation, its sole member and manager
By: ________________________________
Name: ________________________________
Its: ________________________________
Date: _____________________
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STATE OF CALIFORNIA )
)
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.
______________________________________
Name: ______________________________
Name: Notary Public
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.
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STATE OF CALIFORNIA )
)
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.
______________________________________
Name: ______________________________
Name: Notary Public
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.
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EXHIBIT A
LEGAL DESCRIPTION
The land is situated in the State of California, County of San Diego, City of Poway, and is
described as follows:
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ATTACHMENT H
RESERVE DRAW SCHEDULE
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ATTACHMENT I
APPROVED INITIAL
RESIDENT SERVICES BUDGET
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ATTACHMENT J
APPROVED INITIAL RESIDENT
SERVICES PLAN
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