Agency Regulatory Agreement and Declaration of Restrictive Covenants 2010-0500089NO FEE DOCUMENT PURSUANT TO
GOVERNMENT CODE SECTION 27383
D O C# 2010
1l1111111111IIII111 IIII 1111 II1II111 II
SEP 21, 2010 8:00 AM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
DAVID L BUTLER, COUNTY RECORDER
FEES: 0 00 WAYS 2
PAGES: 22
IIIIIIVIIIVIIIVIIIVIIIVIIIIIIIIVIIIVIIIVIIIVIIIVIIIVIIIVIIIVIIIIIIIIIII
AGENCY REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Brighton Place)
This Agency Regulatory Agreement and Declaration of Restrictive Covenants (the
"Regulatory Agreement ") is made and entered into as of September 1, 2010, by and between the
Poway Redevelopment Agency, a public body, corporate and politic (the "Agency ") and
Brighton Place, L.P., a California limited partnership (the "Developer ").
RECITALS
I. The Agency and the Developer have entered into a Land Disposition and Loan
Agreement dated as of March 3,2009 (the "Disposition Agreement "), as amended by the First
Amendment to the Disposition, Development and Loan Agreement dated as of March 17, 2010,
under which the Agency agreed to ground lease to the Developer approximately four (4) acres of
real property located east of Midland Road between Edgemoor Street and Adrian Street,
Assessor's Parcel Numbers: 314- 220 -69 and 314- 220 -70 in the City of Poway and more
particularly described in Exhibit A attached hereto and incorporated herein (the "Property "), and
to loan an amount not to exceed Five Million Three Hundred Eighty -One Thousand Dollars
($5,381,000) (the "Agency Loan ") to the Developer to finance the construction and development
of a seventy -seven (77) -unit affordable apartment complex on the Property (the "Development ").
Capitalized terms used but not defined in this Regulatory Agreement shall have the meanings set
Forth in the Disposition Agreement.
2. The Agency Loan consists of an amount not to exceed Five Million Three
Hundred Eighty -One Thousand Dollars (S5,39 1 .000) of Agency Low and Moderate Income
Housing Fund monies.
3. Pursuant to Health and Safety Code Section 33334.3, the Agency must restrict
developments assisted with funds from the Agency's Housing Fund, so that the developments
remain affordable to'low'and moderate income households for the longest feasible time The
Agency intends to restriathirty -eight (38) of the units in the Development to very low income
households, and thirty -eight (38) of the units in the Development to moderate income
households.
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RECORDED AT THE REQUEST OF
'
CHICkGOTITLE',CONIPANY
SUBDIVISION DEPT.
'BY
RECORDING REQUESTED
AND WHEN RECORDED MAIL TO:
The Poway Redevelopment Agency
13325 Civic Center Drive
Poway, CA 92064 12039
Attn: Executive Director
NO FEE DOCUMENT PURSUANT TO
GOVERNMENT CODE SECTION 27383
D O C# 2010
1l1111111111IIII111 IIII 1111 II1II111 II
SEP 21, 2010 8:00 AM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
DAVID L BUTLER, COUNTY RECORDER
FEES: 0 00 WAYS 2
PAGES: 22
IIIIIIVIIIVIIIVIIIVIIIVIIIIIIIIVIIIVIIIVIIIVIIIVIIIVIIIVIIIVIIIIIIIIIII
AGENCY REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
(Brighton Place)
This Agency Regulatory Agreement and Declaration of Restrictive Covenants (the
"Regulatory Agreement ") is made and entered into as of September 1, 2010, by and between the
Poway Redevelopment Agency, a public body, corporate and politic (the "Agency ") and
Brighton Place, L.P., a California limited partnership (the "Developer ").
RECITALS
I. The Agency and the Developer have entered into a Land Disposition and Loan
Agreement dated as of March 3,2009 (the "Disposition Agreement "), as amended by the First
Amendment to the Disposition, Development and Loan Agreement dated as of March 17, 2010,
under which the Agency agreed to ground lease to the Developer approximately four (4) acres of
real property located east of Midland Road between Edgemoor Street and Adrian Street,
Assessor's Parcel Numbers: 314- 220 -69 and 314- 220 -70 in the City of Poway and more
particularly described in Exhibit A attached hereto and incorporated herein (the "Property "), and
to loan an amount not to exceed Five Million Three Hundred Eighty -One Thousand Dollars
($5,381,000) (the "Agency Loan ") to the Developer to finance the construction and development
of a seventy -seven (77) -unit affordable apartment complex on the Property (the "Development ").
Capitalized terms used but not defined in this Regulatory Agreement shall have the meanings set
Forth in the Disposition Agreement.
2. The Agency Loan consists of an amount not to exceed Five Million Three
Hundred Eighty -One Thousand Dollars (S5,39 1 .000) of Agency Low and Moderate Income
Housing Fund monies.
3. Pursuant to Health and Safety Code Section 33334.3, the Agency must restrict
developments assisted with funds from the Agency's Housing Fund, so that the developments
remain affordable to'low'and moderate income households for the longest feasible time The
Agency intends to restriathirty -eight (38) of the units in the Development to very low income
households, and thirty -eight (38) of the units in the Development to moderate income
households.
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4. Through this Regulatory Agreement the Agency is imposing occupancy and
affordability restriciions the, Development in order to satisfy the sfatutorily mandated
affordable housing production requirements for the Project Area under Health and Safety Code
Section 33413(b)(2) and to meet replacement housing requirements applicable to the
Redevelopment Area pursuant to,Health and Safety Code Section 33413(a). The Agency
restricted units are required to remain affordable to very low income' households and moderate
income households, for fifty-seven (57) years. This Regulatory Agreement is also intended to
implement this requirement.
5. The Agency hm!: greed to provide the Agency Loan to the Developer and to
ground lease.the Property to the Developer on the condition that the Development be maintained
and operated in accordance with Health and Safety Sections 33334.2 et seq., 33413(a) and
33413(b)(2)(A), and in accordance with additional restrictions concerning affordability,
operation, and maintenance of the Development, as specified in this Regulatory Agreement, the
Ground Lease and the Disposition Agreement.
6. In consideration -of receipt of the Agency Loan, the Developer has further agreed
to observe all the terms and conditions set forth below.
7. In order to ensure that the entire Development will be used and operated in
accordance with these conditions and restrictions, the Agency, the City, and the Developer wish
to enter into this Regulatory Agreement.
THEREFORE, the Agency and the Developer hereby agree as follows:
ARTICLE 1:
DEFINITIONS
Section 1.1 Definitions When used in this Regulatory Agreement, the following,
terms shall have the respective meanings assigned to them in this Article I.
(a) "Actual Household Size" shall mean the actual member of persons in the
applicable household.
(b) "Adjusted Income" shall mean the total anticipated annual income of all
persons in a household, as calculated in accordance with 25 California Codc of Regulations
Section 6914.or pursuant to a successor State housing program that utilizes a reasonably similar
method of Calculation ofadlusted income. In the event that no such program exists, the Agency
shall provide the.Developer with a reasonably similar method of calculation of adjusted income
as provided in said Section 6914.
(c) "Agency" shall mean the Poway Redevelopment Agency, a public body,
corporate and politic.
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(d) "Agency Leasehold' Deed of Trust" shall mean the leasehold deed of trust
in favor of the Agency on the Property which secures repayment of the Loan and performance of
this Regulatory Agreement.
(e) "Agency Promissory Note" shall mean the promissory note from the
Developer to the Agency evidencing all or any part of the Loan of even date herewith.
(f) "Assumed Household Size" shall mean the assumed household size
"adjusted for family size appropriate to the unit" as such term is defined in California Health and
Safety Code Section 50052.5(h). 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" shall mean the City of Poway, a municipal, corporation
(h) "Developer" shall mean Brighton Place, L.P.,.a California limited
partnership, and its successors, and assigns to the Development.
(i) "Development" shall mean the Property and the seventy- seven,(77)
residential units to be constructed on the Property, as well as all additional, improvements, and all
landscaping, roads and parking spaces existing thereon, as the same may exist from time to time.
(j) "Disposition Agreement" shall mean the Land - Disposition, Development
and Loan Agreement entered into by -and between the Agency avid "the Developer, dated as of
March 3, 2009, and as amended by the First Amendment to Land Disposition, Development and
Loan Agreement dated as of March 17 2010.
(k) "Ground Lease" shall mean the Ground Lease between the Developer and
the Agency dated of even date herewith.
(1) "Interfaith Housing' shall mean Interfaith Housing Assistance
Corporation, the approved initial Management Agent pursuant to Section 5.2 below.
(m) "Median Income" shall mean the median gross yearly income adjusted for
Actual Household Size (to qual_ify,residents) or Assumed Household &ze (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 ( "I-ICD "). In the event that
such income determinations are no longer published, or are not updated fora period orat least
eighteen (1 S) months, the Agency shall provide the Developer with other income determinations
which are reasonably similar with respect to methods of calculatiorrto'those previously
published by HCD.
(n) "Other Income household" shall mean a household with an Adjusted
Income which does not exceed ninety percent (90 %) of Median Income, adjusted for Actual
Household Size.
(o) "Other Income Units" shall mean the Units which, pursuant to
Section 2.1(c) below, are required to be occupied by Other Income Households.
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(p) "Property" shall mean the real property described in Exhibit 'A attached
hereto and incorporated herein.
(q) "Regulatory Agreement" shall mean'this'Agency Regulatory Agreement
and Declaration of Restrictive Covenants.
(r) "Rent" shalLmean 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 Developer which are required of all residents, other than security deposits; the cost of an
adequate.level ofservice 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; 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 Developer, and paid by the
Resident.
(s) "Resident" shall mean a household occupyinga Unit pursuant to a valid
lease with the Developer.
(t) "Units" shall mean the seventy -seven (77) rental units to be constructed by
the Developeron'the Property.
(u) "Very Low Income Household" shall mean a household with an Adjusted
Income that does not excced'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 HCD.
(v) "Very Low Rent" shall mean the rent permitted to be charged for a
Very Low Income Unit pursuant to Section 2.3(a) below.
(w) "Very Low Income Units" shall mean the Units, which, pursuant to
Section 2.2(a) below, are required to be occupied by Very Low Income Households.
ARTICLE 2:
AFFORDABILITY AND OCCUPANCY COVENANTS
Section 2.1 Occupancy Requirements
The Developer shall regulate the use and occupancy of the Units in the following manner:
(a) Very Low Income Units Twenty (20) two- bedroom Units and eighteen
(18),thiec- bedroom Units shall be rented to and occupied by or, if vacant, available for
occupancy by Very Low Income households
(b) Other Income Units Twenty -four (24) two - bedroom Units and fourteen
(14) three - bedroom Units shall bcrented to and occupied by or, if vacant, available for
occupancy by Other Income I- louseholds.
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(c) Manager's Unit One (1) three - bedroom unit, shall be available for
'designation as the manager's unit.
Section 2.2 Allowable Rent
(a) 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 (1/12` of thirty percent
(30 %) of fifty percent (50 %) of Median Income, adjusted for Assumed Household Size.
(b) Other Income Rent Subject to Section 2.3 below, the Rent charged to
Residents of the Other Income Units shall not exceed one - twelfth (1 /12` of thirty percent (30 %)
of ninety percent (90 %) of Median Income, adjusted for Assumed Household Size.
(c) Assumed Household Size In calculating the allowable Rent for the Units,
the Assumed Household Sizes�shall mean the household size "adjusted for family size
appropriate to the unit" as such term is defined in California Health and Safety Code Section
50052.5(h) and shall be:
Number of Bedrooms Assumed Household Size
Two 3
Three d
(d) Approval of Rents Initial rents for all Units shall be approved by the
Agency prior to occupancy. No later than thirty (30) days after IICD publishes Median Income
for the County of San Diego for each calendar year, the Agency shall provide the Developer with
a schedule of permissible maximum Very Low Income Rents and other Income Rents for the
succeeding year. Under no circumstance may Developer raise rents above the permissible
maximum rents, as allowed under.the annual rent schedule provided by the Agency.
Section 2.3 Increased Income of Residents
(a) Increased Income Over Very Low Income If, upon recertification of a
Resident's income, the Developer 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 11(u) above, but has an Adjusted Income not exceeding the
qualifying income for an Other Income Household as set forth in Section 1. 1(o) above, then,
upon expiration of the Resident's lease:
(i) Such Resident's Unit maybe considered an Other Income Unit,
(ii) Such Resident's Rent may be increased to an Other Income Rent,
upon sixty (60) days written notice to the Resident; and
(iii) The Developer shall rent the next available Unit to a Very Low
Income Household at ,a Very Low Income Rent.
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(b) Non- oualifvine Household If, upon recertification of a Resident's
income, the Developer determines that a former Very Low Income, Household "has increased and
exceeds the,qualifying'income for Other Income Households'set forth'in' Section 1.1(o) (above
ninety percent" (90 %) of area median income), then upon expiration the Resident's Lease:
(i) Developer shall send such resident a written notice of termination
of tenancy informing Resident that Resident must vacate the unit. Developer shall allow
Resident at one hundred twenty (120) days between the notice of termination of tenancy
and move out Such period maybe extended for family circumstances at Developer's discretion
and upowapproval by the Agency; and
(ii) The Developer shall rent the next available Unitto•a Very Low
Income Household or Other Income Fousehold at Rent not exceeding the maximum Rent
specified in Section 2.2(a) or 2'2(b), as applicable, to comply with the requirements of
Section 2.1(a) and Section 2.1(b) above.
(c) Termination of Occupancy Except if,the character of a Unit as a Very
Low Income Unit or Other income Unit has been redetermined pursuant ,to Section 2.3 above
due to the increased. income of a Resident, upon termination of occupancy of Unit by a
Resident, such Unit shall be deemed,to be continuously occupied by a household of the same
income level (e.g., Very Logy Income Household or Other Income. Household as the initial
income level of the vacating Resident, until such Unit is reoccupied, at which time the income
character of the Unit (e.g., Very Low Income Unit or Other Income Unit) shall be redetermined.
If the character of the Unit as a Very Low Income Unit or an Other Income Unit has been
redetermined pursuant to Section 2.3 above, 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., Very Low Income Household or Other 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., Very Low Income Unit or Other Income Unit) shall be redetermined.
Section 2.4 Resident, Selection.
(a) Before leasing,any vacant Units in the Development, the Developer must
provide the Agency for its review and the Developer's Management Plan, including a
written marketing and resident selection plan, as required under Section 2.3 of the Disposition
Agreement.
(b) The Developer shall not discriminate against any applicants for tenancy on
the basis of source.of income or rent payment (for example, wrthoutlimitation, Temporary
Assistance for Needy Families (TANF) or Section 3), and Developer: shall consider a prospective
Resident's previous rent history of at least one ( I) year, or such other time period the Developer
deemsremonable.as evidence of the prospective Resident's ability to pay the applicable Rent.
The;ability.topay 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
Developer, 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.
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Section >2:5 Lease Provisions Developer shall include in leases for all Units
provisions authorize Developer to immediately terminate the tenancy of any household
one or more of whose members misrepresented any fact material.to the houschold's qualification
as a.Very'Low Income Household'or Other Income Household: Each lease or rental agreement
shall'also provide that the household is subject to annual certification in accordance with Section
3. I below, and that, if the household's income increases above the applicable.limits for a Very
Low Income Household or Other Income Household, as applicable, such household's Rent may
be subject to increase and may lead to termination of the Resident's occupancy pursuant to
Section 2.3(b)(i) above.
Section 2.6 Condominium Conversion The Developer shall not convert Development
units to condominium or cooperative ownership or sell condominium or cooperative conversion
rights to the Property during the Term of this Regulatory Agreement.
ARTICLE 3:
fNCOME CERTIFICATION AND REPORTING
Section 3.1 Income Certification The Developer shall obtain, complete and maintain
on file, immediately prior to initial occupancy and annually thereafter, income certifications from
each Resident renting any.of the Units (excluding the manager's unit). The Developer 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 one or more of the following steps as a
part of the verification process: (i)vobtain a mininum of the three(3) most current pay stubs for
all adults age eighteen (18) or older; (ii) obtain an income tax return for the most recent tax year;
(iii) conduct a credit agency or similar search; (iv) obtain an income verification form from the
applicant's current employer; (v) obtain the three (3) most current savings and checking account
bank statements; (vi) 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 (vii) if the applicant is unemployed and has'no such tax return, obtain
another form of independent verification. Copies of Resident income certifications shall be
available to the Agency upon request.
Section 3.2 Annual Report,to Agency Developer shall submit to the Agency (i) not
later than the sixtieth (60 day after the close of each calendar year, or xIch other date as may
be requested by the Agency, a statistical report, including mcome and rent data for all Units,
setting forth the information called for therein, and (ii) withinfifteen (15) days after receipt of a
written request, any other information or completed forms requested by the Agency.
Section 3.3 Additional Information Developer shall pro�,icle,any additional
information reasonably requested by the Agency. The Agency shall have the right to examine
and make copies of all books, records or other documents of Developer which pertain to any
' Unit-
Section 3:4. Records Developer shall maintain complete, accurate and Current records
pertaining to the Development, and shall permit any duly authorized representative of the
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Agency tolinspect records including records pertaining to income,and household size of
Residents. 'All Resident lists; and waiting lists relating,to the Development shall at
all times be kept separate and identifiable from any other business of the Developer and shall' be
maintained as required by the Agency, in a reasonable condition for proper audit and subject to
examination during- business hours by representatives of the Agency. The Developer 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.
Section 3.5 Annual Operating Budget Developer and Management Agent shall make
available to the Agency for inspection all books and records with respect to the Development. In
addition, the Developer shall provide the Agency with: (1) by not later,than thirty. (30) days
prior to commencement of each Fiscal Year, the Annual Operating Budget for the upcoming
Fiscal Year; (2) within ninety(90) days following the end of each Fiscal Year, a report showing
the actual income and expend itures'with respect to the Development for the immediately
preceding Fiscal Year and the status of all reserve funds; and (3) within one hundred twenty
(120) days following the end of each Fiscal Year, a copy of the Developer's federal income tax
filings for the Fiscal Year.
Section 3.6 Approval of Use of Reserve Funds Developer agrees to create and
maintain two reserves: Operating Reserve with an initial capitalization of One Hundred Sixty -
Three Thousand Dollars ($163,000) and a Replacement Reserve with no initial capitalization to
use for emergency repairs, transitional management costs, and other costs related to the
construction and lease up of the Development. The Operating kescrve shall be capitalized at
closing of the Permanent financing. Prior to the use of finds from the Operating Reserve or
Replacement Reserve in excessof Five Thousand Dollars ($5,000) or not part of the approved
Operating Budget, Developer must submit a written request to withdraw funds from the reserve'
account. The written request +shall specify the amount requested and statelhow the funds will be
used. The Agency 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 Agency fails
to approve a request within the thirty (30) days, such request shall be deemed approved.
Section 3.7 On -site Inspection The Agency, upon reasonable notice, shall have the
right to perform an on -site inspectionofthe Development at least one (1) time per year. The
Developer agrees to cooperate in such inspection. Such right to annually inspect the
Development shall be in addition to the City's right to inspect the Development in accordance
with the City's municipal code as may be amended from time to time.
ARTICLE 4:
OPERATION OF THE DEVELOPMENT
Section 4.1 Residential Use The Development shall be operated only for residential
use as permanent multifamily rental housing.
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Section'4;2 Compliance with Disposition Agreement and Ground Lease The
Developer. i shall comply with alhthe terms and provisions:of the Disposition,Agreement and the
Ground Lease.
Section 4.3 Taxes and Assessments Developer 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 anypenaltyfrom accruing, or any lien or'charge from attaching to
the Property; provided, however, that Developer shall have the right to contest in good faith, -any
such taxes, assessments, or charges. In the event Developer exercises its right to contest any tax,
assessment, or charge against it, Developer, on final determination, of the`proceeding or.contest,
shall immediately pay or discharge any decision orjudgment rendered against it, together with
all costs, charges and interest.
Section 4.4 Nondiscrimination All of the Units shall be available for occupancy on a
continuous basis to members of the,geperal 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 Very Low Income Households or Other Income
Households, or pursuant to Section 4.6 below. There shall be no discrimination against or
segregation of any person or group of persons, on account of race,;color, creed, religion, sex,
sexual orientation, marital status; national origin, source of income, disability, or ancestry, in the
leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall
Developer or any person claiming,under or through the Developer, establish or any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, 4residents „lessees, sublessees, subtenants, or vendees of any Unit
or in connection with the,employnient of persons for the operation and management of the
Development. All deeds, leases or.contracts made or entered into by Developer as to the Units
or the Development or portion thereof, shall contain covenants concerning discrimination as
Prescribed by the Disposition Agreement.
Section 4.5 Section 8 Certificate Holders The Developer 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 Developer shall not apply selection criteria to
Section 8 certificate or voucher holders that is more burdensome than criteria applied to all other
prospective residents, nor shall the Developer apply m 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.
Section 4.6 Preference to City and Agency Displacees Developer shall give a
preference in the rental of any Units to eligible households displaced by activity of the Agency or
the City, as provided in Health and Safety Code Section 3341 1.3. The preferences stated in this
section apply to rentals of.Units throughout the Term.
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ARTICLE 5:
PROPERTY AND MAINTENANCE
Section 5.1 Management Responsibilities The Developer 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 repair,
replacement of capital items, and security. The Agency shall have no responsibility over
management of the Development. The Developer shall retain a.pr_ ofessional property
management company, approved by the Agency in its reasonable discretion, to perform its
management duties hereunder: A resident manager shall also be required. Pursuant to Section
2.8 of the Disposition Agreement, the Developer shall submit to the Agency an initial proposed
Management Plan no later than six (6) months after the commencement of construction of the
Development pursuant to the' Schedule of Perfonnance as set forth in Section 4.3 of the
Disposition Agreement. The Agency shall approve or disapprove the - proposed Management
Plan in writing within fifteen (.1 -5) calendar days following the Agency's receipt of the proposed
Management Plan, which approval shall not be unreasonably denied. if the proposed
Management Plan is disapproved'by the Agency, the Agency shall deliver a written notice to the
Developer setting forth, in reasonable detail, the reasons for such disapproval. The Developer
shall have fifteen (15) calendar days following the receipt of such notice to submit a revised
Management Plan modification, in any way necessary to ensure that policies comply with
the provisions of this Regulatory.Agreement. The Agency's approval of the amendments to the
Management Plan shall not be unreasonably withheld.
Section 5.2 Management Agent; Periodic Reports The Development shall at all times
be managed by an experienced management agent reasonably acceptable to the Agency, with
demonstrated ability to operate residential facilities like the Development in it manner that will
provide decent, safe, and sanitary housing (as approved, the "Management Agent "). The Agency
approves Inteifinth Housing as initial Management Agent. The Developer shall submit for
the Agency's approval the identity ,ofany proposed Management Agent and on -site resident
manager. The',Developer 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 Agency to determine whether the proposed
Management Agent or'on -site resilient manager meets the standard for a qualified Management
Agent or on -site resident mandgcrset forth above. If the proposed Management Agent or on -site
resident manager meets the standard for a qualified Management Agent or on -site resident
nianagerset forth above, the Agency shall approve the proposed Management Agent or on -site
resident managerny notifying the Developer in writing. Unless the proposed Management
Agent or on -site resident manager is disapproved by the Agency within thirty (30) days, which
disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed
approved.
Section 53 Periodic'Performance Review The Agency reserves the right to conduct a
periodic review of the management practices and financial status of the Development within
thirty'(30) days after each anniversary of the issuance of the Certificate of Occupancy. The
purpose of each periodic review will be to enable the Agency to determine if the Development is
552'os64720" 6 1 0
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being operated and managed in accordance with the requirements and�standards of this
Regulatory ' Agreement., The Developer shall cooperate with the.Agency in such reviews.
Section 5.4 Replacement of Management Agent or On -Site Resident Manaeer
(a) If, as a result of a periodic review, the Agency determines in its reasonable
judgment that the Development.is not being operated and managed in accordance with any of the
requirements and standards.of this.Regulatory Agreement, the Agency shall deliver notice to the
Developer of its intention to cause replacement of the Management Agent. Within thirty (30)
days of receipt by the Developer of such written notice, Agency staff and the Developershall
meet in good faith to consider methods for improving the financial and operating status of the
Development, including, without limitation, replacement of the Management Agent.
(b) If, after such meeting, Agency staff recommends in writing the
replacement of the Management Agent, the Developer shall promptly dismiss the then
Management Agent, and shall appoint as the Management Agent a_person or entity meeting the
standards for a Management Agent set forth in subsection (a) above and approved by the Agency
pursuant to subsection (a) above.
(c) Any contract for the operation or management of the Development entered
into by the Developer shall provide'that the contract can be terminated as set forth above.
Failure to remove the Management Agent in accordance with the provisions of this Section shall
constitute a Developer Event of Default under this Regulatory Agreement, and the Agency may
enforce this provision through legal proceedings as specified in Section 6.4.
Section 5.5 Approval of Managenncnt Plan Modifications Each year, within sixty
(60) days of the end of the Developer's Fiscal Year, the Developer shall submit to the Agency
any proposed changes to the Management Plan. The Agency shall approve or disapprove the
proposed changes to the Management Plan in writing within fifteen (15) calendar days following
the Agency's receipt of the request to ,intend the Management Plan, which approval shall not be
unreasonably denied. If the change to the Management Plan is disapproved by the Agency, the
Agency shall deliver a written notice to the Developer setting forth, in reasonable detail, the
reasons for such disapproval. The Developer shall have fifteen (I5)'calendar days following the
receipt of such notice to submit a revised Management Plan modification in any way necessary
to ensure that such policies coniply with the provisions of this Regulatory Agreement. The
Agency's approval of the amendments to the Management Plan shall not be unreasonably
withheld.
Section 5.6 Property Maintenance
(a) The Developer shall cause the Property and the Development to be %yell
maintamed.and repaired in a condition reasonably acceptable to,the Agency during the Term,
including ,but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care
and such othermamtenance a repairs as may be necessary. The Developer shall perform, or
cause'to be performed, all maintenance and repairs necessary to maintain the Development in
good repair, and tenantable The Agency shall have the right, upon reasonable notice to
the Developer, to enter the Development to make inspections to determine the Developer's
1 512'05\6,47.00 6 11
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compliance with this Section 5.6. The Agency shall have adHiti_onal';rights and remedies
regarding6maintenance,as, "set forth in this Regulatory Agreement. As between the Agency and
the Developer; all,costs incurred in the operation and maintenance of the Improvements shall be
paid by the Developer
(b) The Developer shall, for the entire Term of this Regulatory Agreement,
cause the Property and the Development to be well maintained and repaired in a condition
reasonably acceptable by the Agency, including but not limited to cleaning, painting, decorating,
plumbing, carpentry, grounds care and such other maimenance,and repairs as may be necessary.
The Developer shall perform, or cause to be performed, all maintenance and repairs necessary to
maintain the Development in good repair and tenantable condition. The Agency shall have the
right, upon reasonable notice to the.Developer, to enter the Development to make inspections to
determine the Developer's compliance with this Section 5.6. The Agency shall have additional
rights and remedies regarding maintenance as set forth in this Regulatory Agreement. As
between the Agency and the.Develop"er, all costs incurred in the operation and maintenance of
the Improvements shall be paid by the Developer.
(c) The Developer shall, for the entire Term ofthis Regulatory Agreement,
maintain all interior and exterior improvements on the Property in good condition and repair as
required under Section 5.6 and -in accordance with all applicable laws„mles, 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:
(i) Landscaping The Developer agrees to have landscape
maintenance performed every other week, including replacement of dead or diseased'plants with
comparable plants. Developer agrees to adequately water the landscaping on the Property and to
keep the landscaping in:a healthy condition. No improperly maintained landscaping on the
Property shall be visible from pu_blicstreets and /or rights of way.
(ii) Yard Area No yard areas on the Property shall be left
unmaintaincd, including:
(A) broken or discarded furniture, appliances and other,
household equipment stored in yard areas for a period exceeding one,(1) week,
(B) shopping carts, packing boxes, lumber trash, dirt and other
debris in areas visible from public property or neighboring properties, and
(C) vehicles parked or stored in other than approved parkin
areas.
(iii) Building No buildings located oil the Property may be left in an
unmaintained condition so that any of the following exist:
(A) violations of state law, uniform codes, or City ordinances:
11s2\051e 47200 6 12
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(B) conditions that constitute;an unsightly appearance that
detracts4front the aesthetics'or value of the Property or constitutes.a private or public nuisance;
(C) broken windows;
(D) graffiti (must be removed within twenty -four (24) hours);
and
(E) conditions constituting hazards and /or inviting trespassers,
or malicious mischief
(iv) Sidewalks The Lessee shall maintain, repair, and replace as
necessary all public sidewalks adjacent to the Development.
(d) The Agency, places prime importance on quality maintenance to protect its
investment and to ensure that all Agency and City - 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 Agency assuming the agrees to provide all
necessary improvements to assure the Development is maintained in good condition. The
Developer shall make all repairs and replacements necessary to keep the improvements in good.
condition and repair.
(e) In the event that the Developer breaches any of the covenants contained in
this section and such default,continues.for a period of seven (7) clays after written notice from the
Agency with respect to graffiti, debris, waste material, and general maintenance or thirty (30)
days after written notice from,the Agency with respect to landscaping and building
improvements, then the Agency, in addition to whatever other remedy it may have at law or in
equity, shall have the right to enter ipon the Property and perform or, cause to be performed all
such acts and work necessary to cure the default. Pursuant to such right of entry, the Agency
shall be permitted (but is not required) to enter upon the Property and perform all acts and work
necessary to protect, maintain, and preserve the improvements and landscaped areas on the
Property, and to attach a lien on the Property, or to assess the Property, in the amount of the
expenditures arising from such acts and work of protection, maintenance, and.preservation by the
Agency and /or costs of such cure; including a ten percent (10 %) administrative charge, which
amount shall be promptly paid by the Developer to the Agency upon demand Developer's
Limited partner shall have a right to core if Developer breaches any of the covenants contained
in this section and such cure shall be deemed a cure by Developer.
Section 5.7 SatetyConditions
(a) The Developer acknowledges that the Agency places a prime importance
on the security of Agency assisted projects and the safety of the residents and surrounding
community. The Developenagrees to implement and maintain throughout the Term the
following security treasures in the Development
( i)" to the extent feasible employ defensible space clesign principles
and'crime prevention measures the operation of the Development including but not limited to
maintaining adequate Iighting!m parking areas and pathways,
1552'05164720() 6 13
120,52•
(ii) use its best:efforts to work with the County Sheriff Department to
implement and operate an effective neighborhood watch program;•and
(iii) 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 Agency shall have the right to enter on the Property and/or contact the
City Police 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 surrounding community, and to
perform or cause to be performed such acts as are necessary to correct the condition.
ARTICLE 6:
MISCELLANEOUS
Section 6.1 Tenn. The provisions of this Regulatory Agreement shall apply to the
Property for the entire Term even.if the entire Loan is paid in full priorto the end of the Term;
provided, however, that the provisions of Article 2 of this Regulatory Agreement shall run with
the Property.and shall remain in effect in perpetuity. This Regulatory Agreement shall bind any
successor, heir or assign of Developer, .whether a change in interest occurs voluntarily or
involuntarily, by operation of.law or otherwise, except as expressly released by the Agency. The
Agency makes the Agency Loan on the condition, and in consideration of, this provision, and
would not do so otherwise.
Section 6.2 Compliance witli "Disposition Atzrcement and Program Requirements The
Developer's actions with respect to the Property shall at all times be in full conformity with: (i)
all requirements of the Disposition_ Agreement; (ii) all requirements imposed on projects assisted
with Redevelopment Low and Moderate Income Housing Fund monies under California Health
and Safety Code Section 33334.2 et sec.
Section 6.3 Covenants to Run Vith the Land The Agency and Developer hereby
declare their express intent that the covenants and restrictions set forth in this Regulatory
Agreement shall run with the land,.and shall bind all successors in title to the Property, provided,
however, that on the expiration of the Term of this Regulatory Agreement said covenants and
restrictions shall expire. Each and every contract, decd or other instrument hereafter executed
covering or conveying the Property 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 to such contract, deed or other instrument,
unless the Agency expressly releases such conveyed portion of the Property from the
requirements of this Regulatory Agreement.
Section 6.4 Enforcement by the Aaencv If Developer fails to perform any obligation
under this Regulatory Agreement, and fads to cure the default within thirty (30) days after the
Agency has notified the Developer in writing of the default or,,if the default cannot be cured
within thirty (30) "days,.fail`ed't6 commence to cure within thirty (30) days and thereafter
diligenfly pursue such cure, the.Agency shall have the right to enforce;this Regulatory
Agreement by any or all of the following actions, or any other remedy provided by law:
1552'05'64720116 14
12053'
(a) Calling4he Loan The Agency may declare a under. the Agency
Promissory Note, accelerate the indebtedness evidenced by,th'e Agency Promissory Note, and
proceed with foreclosure under the Agency Leasehold Deed of Trust.
(b) Action to;Compel Performance or for Damages The Agency may bring
an action at law or in equity to,coinpcl Developers performance of its'obligations under this
Regulatory Agreement, and/or for damages.
(c) Remedies Provided Under Disposition Agreement The Agency may
exercise any other remedy provided under the Disposition Agreement.
(d) Agency Sublease of Units If and to the extent necessary to correct any
Developer default, the Developer, hereby grants to the Agency the option to lease, from time to
time, Units in the Development for a rental of One Dollar ($1.00) per Unit per year for the
purpose of subleasing such units to comply with Article 2 of this Regulatory Agreement: Upon
the request of the Agency following such default by the Developer the Developer hereby agrees
to execute such documents as reasonably requested by the Agency, as applicable, including but
not limited to; rental agreement(s) in a form prepared by the Agency, to implement the sublease
of the Unit(s). Any rents received by "the Agency under any such sublease shall be paid to the
Developer after the Agency has been reimbursed for any expenses incurred in connection with
such sublease.
Section 6.5 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 333343 and /or 33413(6)(4), or successor provisions, shall run with the
land and shall be enforceable by the Agency, the City of Poway, and any of the parties listed in
Health and Safety Code Section 33334.3(t)(7), so long as such provision or successor provision
remains in effect.
Section 6.6 Notice of Expiration of Term At least six (6) months prior to the
expiration of the Term, Borrower shall provide by first -class mail, postage prepaid, a notice to all
Tenants containing (a) the anticipated date of the expiration of the Term, (b) any anticipated
increase in Rent upon the expiration of the Tenn, (c) a statement that a copy of such notice will
be sent to the Agency, and (d) a statement that a public hearing may be held by the Agency on
the issue and that the Tenant will receive notice of the hearing at least fifteen (.15) days ri
advance of any such hearing. Borrower shall also file a copy of the above-described notice with
the Agency's [-lousing Manager. In addition, Borrower shall comply with the requirements set
forth in California Government Code Sections 65563.10 and 65863.11
Section 6:7 Listing of Property in Database Developer hereby acknowledges and
agrees that Health and Safety Code Section 33418(c) requires that the Properly be listed in a
database that shall be made available to the public oil the internet and which will include the
slrect'address, assessor's Marcel iiufnber, and other information about the Property. The
Developer must disclose this requirement to all Residents and prospective Residents.
15s1i05\647200 6 15
12054
Section 6.8 Attorneys Fees and.Costs In any actiowbrought to enforce this
Regulatory , on
the pfevailing party shall be entitled to all costs and expenses of suit,
including attorney's fees. This`section shall be interpreted in accordance with California Civil
Code Section 1717 andjudicial. decisions interpreting that statute.
Section 6.9 Recording and Filine The Agency and Developer shall cause this
Regulatory Agreement, and all amendments and supplements to it, to be recorded against the
Property in the Official Records of the County of San Diego.
Section 6.10 Governing Law This Regulatory Agreement shall be governed by the
laws of the State of California.
Section 6.1 1 Amendments This Regulatory Agreement maybe 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.
Section 6.12 Notice Alt notices given or certificates delivered under this Regulatory
Agreement shall be in writing and be deemed received on the delivery or refusal date shown on
the delivery receipt„ if: (i) personally delivered by a commercial service which furnishes signed
receipts of delivery or (ti) mailed by certified mail, return receipt requested, postage prepaid,
addressed as follows:
To Agency: Poway Redevelopment Agency
13325 Civic Center Drive
Poway CA 92064
Attn:, Executive Director
To Developer: Brighton Place, L.P.
7956 Lester Avenue
Lemon Grove, CA 91945
Attn: Executive Director
To Developer's
Limited Partner: WFCIH Investment Fund I LLC
c/o NEF Assignment Corporation
120 S. Riverside Plaza, 15 ° i Floor
Chicago, IL 66606
Attn: Senior Vice President- Asset Management
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.
Isi210s\6ar_o0 6 16
12055
Section 6.13 Rider. If a default or a Developer Event of Default shall have occurred,
whenever the Agency delivers any notice or demand to the Trustor,jheAgency 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 of the Agency are concerned) have the right, but not the
obligation, at its option to'cure such default or Developer Event of Default as follows: (a) with
respect to monetary defaults, within ten (10) days after the receipt of said notice of such
monetary default;. and (b) with respect to any nonmonetary default under this Regulatory
Agreement, within thirty (30) days after the receipt of such notice of such nonmonetary default
to cure such default, and Beneficiary agrees to accept cures thereunder by Investor. Beneficiary
agrees that the Regulatory Agreement will not be considered to be.in default until the expiration
of all contractual notice and cure periods provided to Trustor and Investor.
Section 6.14 Severability If any provision of this Regulatory Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
portions of this Regulatory Agreement shall not in any way be affected or impaired thereby.
Section 6.15 Multiple Originals :.Counterparts This Regulatory Agreement may be
executed in multiple originals, each of which is deemed to be an original, and may be signed in
counterparts.
[Signature Page Follows]
1552'US647200 6 17
12056
IN WITNESS WHEREOF, the Agency and Developer have executed this Regulatory
Agreement by duly authorized representatives, all on the date first written above.
DEVELOPER:
BRIGHTON PLACE, L.P., a California Limited Partnership
By: Brighton Avenue Interfaith Housing Corporation, a
California nonprofit corporation, its General Partner
/�.
AGENCY:
POWAY REDEVELOPMENT AGENCY, a public body
corporate and politic
By:
Name:
Its:
APPROVED AS TO FORM
GOLDFARB K LIPMAN,
Agency Special Counsel
By:
15 52 6 1
12057
IN WITNESS'WH'EREOF, the Agency and Developer have executed this Regulatory
Agreement by duly authorized representatives, all on the date first written above.
DEVELOPER:
BRIGHTON PLACE, L.P., a California Limited Partnership
By: Brighton Avenue Interfaith Housing Corporation, a
California nonprofitcorporation, its General Partner
By:
Name:
Its:
AGENCY:
POWAY REDEVELOPMENT AGENCY, a public body
corporate and politic
APPROVED AS TO FORM
GOLDFARB & LIPMAN,
Agency Special Counsel
r h
B - U
Name: / trw —m, N `i
Its: A55 15fkrt+ F& litlp- b iree�
1552 \05\647200.6 18
120'58
STATE OF CA_L_IFOR
COUNTY OF ✓ U/t U
On JEt2`tt ltilGc-K ly , 20 /d before me, A H Vz t is ' F'V / /1/A/
Notary Public, personally. appeared �111 I/In . LJ H / 77
who proved to me on the basis of, satisfactory evidence to be the personN whose name(
is /ark subscribed to the within instrument and acknowledged to me that /she /th*y executed
the same in 13is /her /tflsir authorized capacity(i�s), and that'by r-.
her,th6signature(� the
instrument the person 'o), or the entity upon behalf of which the p'erson(S) acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is trite and correct.
WITNESS my Ilan and official seal.
Signature (Seal)
STATE OF CALIFORNIA
COUNTY OF
On
20 before me,
Notary Public, personally appeared
PHYLLIS SHINN
COMMIS311 n # 1778898
-e Notary Public • Calllornla
San Dlego County
Comm. Nov9,2011
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 capacitv(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
Instrtmient.
I certify under PENALTY" OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
15s2 os�6aroo 6
12059
State of California
County of San Diego )
On September 10, 2oio me, Adelle Michaelson, a Notary Public,
personally appeared Matthew B. Jumper, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the
within instrument and acknowledged to me that he /she /they executed the same
in his /her /their authorized capacity(ies), and that by his /her /their signature(s)
on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Affix Seal)
ADELLE MICHAELSON
Commission # 1776279
Notary Public • California
Bon Diego County
L� Caryn.D tree NO+24,2011
12060
EXHIBIT A
PROPERTY DESCRIPTION
The land is situated in the.State of California, County of San Diego, City of Poway, and
is described as follows:
Brighton Parcel:
PARCEL 2� 'OF PARCEL MAP. NO'. '1'91'98, IN; THE CITY OF'POWAY;1 ;COUNTY IOF. SAN .DIEGO,
STATE'OF AC : TO NAP THEREOF FILED QN'T_EE OFFICE O_F "THE�SAN
DIEGO COUNTY RECORDER; APRIL 1; 2003.
City Parcel:
PARCEL' 1 "6F 'PARCEL MAP NO. 19198, IN THE CITY OP POWAY, COUNTY'OF SFS7 DIEGO,
NE - FO A CCORDING .. P _- . ,
STA'PE �OF. CALIFORNIA, ACCORDING TO MAP THEREOF ?ICED IN THE OFFICE OF THE SAN
DIEGO COUNTY RECORDER, APRIL 1, X2003.
A -1
1552 ns(,a7200 6