HomeMy WebLinkAboutCC Resolution 14225 (Artworks Downtown Grant Agr)RESOLUTION NO. 14225
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL
AUTHORIZING EXECUTION OF A GRANT AGREEMENT WITH ARTWORKS
DOWNTOWN INC TO PROVIDE ARTWORKS WITH $97,000 FROM THE IN LIEU
HOUSING FUND FOR THE REHABILITATION OF AFFORDABLE HOUSING AT
1325-1337 FOURTH STREET
WHEREAS, the City of San Rafael General Plan contains policies to encourage
affordable housing units for very low, low and moderate income households in residential
projects; and
WHEREAS, such affordable units provided by developers to comply with the General
Plan are known as Below Market Rate Housing ("BMR") units, and each developer of a BMR
unit executes enforceable restrictions so that these units remain affordable over time; and
WHEREAS, in April 1999 the San Rafael Redevelopment Agency used housing funds to
provide a grant to Artworks Downtown, Inc. ("Artworks") of $340,000 to purchase a building
with 17 BMR units and in July 2009 the Agency provided a subsequent grant to Artworks for
$130,000 to help cover the cost of building renovations including sprinklers; and
WHEREAS, the City of San Rafael adopted an in -lieu affordable housing fee for
residential developments in 1988 and an in -lieu affordable housing fee for non-residential
developments in 2005 (collectively, the "Affordable Housing In -Lieu Fund"); and
WHEREAS, the City of San Rafael desires to assure that the BMR units at 1325-1337
Fourth Street will remain as a housing resource for future generations by allocating funds for the
renovation of this building; and
WHEREAS, Artworks has requested a grant in the amount of $97,000 to assist it in
making needed electrical upgrades to its building, and it is proposed that the cost of the grant to
Artworks in this amount be paid from the Affordable Housing In -Lieu Fund in exchange for an
extension of the enforceable restrictions on the 17 BMR units for an additional 11 years through
2065.
NOW, THEREFORE, BE IT RESOLVED that the City Council hereby approves the
Second Modification and First Restatement of the Grant Agreement ("Grant Agreement") with
Artworks Downtown Inc. for the rehabilitation of its building located at 1325-1337 Fourth Street,
and authorizes the City Manager to execute the Grant Agreement in the form attached as Exhibit
A hereto, subject to final approval as to form by the City Attorney.
BE IT FURTHER RESOLVED that the City Council hereby approves appropriation of
Ninety Seven Thousand Dollars ($97,000) from the City's Affordable Housing In -Lieu Fund for
the additional grant to Artworks Downtown Inc.
BE IT FURTHER RESOLVED that this Resolution shall take immediate effect upon
adoption.
141\01\1989607.1
I, ESTHER C. BEIRNE, City Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the
City Council held on the seventh day of November 2016, by the following vote, to wit:
AYES:
COUNCILMEMBERS:
NOES:
COUNCILMEMBERS:
ABSENT:
COUNCILMEMBERS:
141\01\1989607.1
Bushey, Colin, McCullough & Mayor Phillips
None
Gamblin
=OY�L- A
ESTHER C. BEIRNE , City Clerk
SECOND MODIFICATION AND FIRST RESTATEMENT OF
GRANT AGREEMENT
by and between
THE CITY OF SAN RAFAEL
and
ARTWORKS DOWNTOWN, INC.,
a California nonprofit public benefit corporation
141\01\1989943.1
TABLE OF CONTENTS
Page
ARTICLE1: DEFINITIONS.........................................................................................................3
1.1 Definitions................................................................................................................3
1.2 Exhibits....................................................................................................................5
ARTICLE 2: SECOND MODIFIED GRANT PROVISIONS......................................................5
2.1 Second Modified Grant............................................................................................5
2.2 Use of Second Modified Grant Funds.....................................................................5
2.3 Disbursement of Additional Grant Funds................................................................5
2.4 Acquisition of Development....................................................................................6
ARTICLE 3: CONTINUING OBLIGATIONS.............................................................................6
3.1 Applicability............................................................................................................6
3.2 Use, Maintenance and Operation.............................................................................6
3.3 Entry by the City......................................................................................................7
3.4 Indemnity; Insurance...............................................................................................7
3.5 Hazardous Materials................................................................................................8
3.6 Non-Discrimination.................................................................................................9
3.7 Mandatory Language in All Subsequent Deeds, Leases and
Contracts..................................................................................................................9
3.8 Affordability Definitions.......................................................................................10
3.9 Occupancy Requirements......................................................................................11
3.10 Allowable Rent......................................................................................................11
3.11 Increased Income of Occupying Households........................................................11
3.12 Lease Provisions....................................................................................................11
3.13 Tenant Income Certification..................................................................................12
3.14 Tenant Selection.....................................................................................................12
i
141\01\1989943.1
3.15
Security Deposits...................................................................................................12
3.16
Annual Report to City............................................................................................12
3.17
Additional Information..........................................................................................13
3.18
Records..................................................................................................................13
3.19
Specific Enforcement of Affordability Restrictions..............................................13
3.20
Fees and Taxes.......................................................................................................13
3.21
Compliance with Applicable Law.........................................................................13
3.22
Relocation Obligations...........................................................................................13
3.23
Equal Opportunity..................................................................................................14
3.24
Mechanics Liens, Stop Notices, and Notices of Completion.................................14
ARTICLE 4:
ASSIGNMENT AND TRANSFERS....................................................................14
4.1
Definitions..............................................................................................................14
4.2
Purpose of Restrictions on Transfer.......................................................................14
4.3
Prohibited Transfers...............................................................................................15
4.4
Permitted Transfers Without Prior City Approval.................................................15
4.5
Permitted Transfers With Prior City Approval......................................................16
4.6
Effectuation of Certain Permitted Transfers..........................................................16
ARTICLE 5:
DEFAULTS AND REMEDIES............................................................................16
5.1
Developer Events of Default..................................................................................16
5.2
City Events of Default...........................................................................................17
5.3
No Default Termination.........................................................................................17
5.4
Remedies Cumulative............................................................................................17
5.5
Waiver of Terms and Conditions...........................................................................17
ARTICLE 6:
SECURITY FINANCING AND RIGHTS OF HOLDERS..................................18
6.1
Encumbrances Only for Development Purposes...................................................18
ii
141\01\1989943.1
6.2
Holder Not Obligated to Construct........................................................................18
6.3
Notice of Default and Right to Cure......................................................................18
6.4
Right of City to Cure..............................................................................................19
6.5
Right of City to Satisfy Other Liens......................................................................19
ARTICLE 7:
GENERAL PROVISIONS....................................................................................19
7.1
Notices, Demands and Communications...............................................................19
7.2
Termination............................................................................................................20
7.3
Non -Liability of Officials, Employees and Agents...............................................20
7.4
Forced Delay..........................................................................................................20
7.5
Inspection of Books and Records..........................................................................20
7.6
Title of Parts and Sections.....................................................................................20
7.7
Applicable Law......................................................................................................20
7.8
Severability............................................................................................................21
7.9
Legal Actions.........................................................................................................21
7.10
Binding Upon Successors; Covenants to Run With Land.....................................21
7.11
Parties Not Co-Venturers.......................................................................................21
7.12
Entire Understanding of the Parties.......................................................................21
7.13
Approval................................................................................................................22
7.14
Counterparts; Multiple Originals...........................................................................22
7.15
Amendments..........................................................................................................22
7.16
Enforcement...........................................................................................................22
7.17
Database.................................................................................................................22
Exhibit A Legal Description of the Property
Exhibit B: Modification of Memorandum of Grant Agreement
Exhibit C: First Modified Notice of Affordability Restrictions on Transfer of Property
141\01\1989943.1
SECOND MODIFICATION AND FIRST RESTATEMENT OF
GRANT AGREEMENT
(ARTWORKS DOWNTOWN, INC.)
This Second Modification and First Restatement of the Grant Agreement (the
"Agreement") is dated as of November 7, 2016 by and between the City of San Rafael, a
municipal corporation and charter city (the "City"), in its capacities as the city and as the
successor to the housing assets and functions of the San Rafael Redevelopment Agency (the
"Former Agency"), and Artworks Downtown Inc., a California nonprofit public benefit
corporation (the "Developer"). This Agreement restates and amends in their entireties the
Original Grant Agreement and the First Modification Agreement between the Former Agency
and the Developer as further defined below.
RECITALS
A. The Former Agency and the Developer entered into that certain Grant Agreement
dated as of April 19, 1999 (the "Original Grant Agreement"), pursuant to which the Former
Agency granted the Developer Three Hundred Forty Thousand Dollars ($340,000) from its Low
and Moderate Income Housing Fund (the "Original Grant") in connection with Developer's
acquisition and rehabilitation of the property located at 1325-1337 Fourth Street, San Rafael,
California, Marin County, State of California, that is described in the attached Exhibit A,
incorporated herein by this reference (the "Development").
B. A Memorandum of Grant Agreement dated as of April 19, 1999 was recorded
against the Development in the Official Records of the County of Marin on August 5, 1999 as
Document No. 1999-0058482 (the "Original Memorandum of Grant Agreement").
C. The Original Grant Agreement required the Developer to operate the
Development as multifamily housing and that all seventeen (17) of the units in the Development
be rented to very -low income households with an Adjusted Income (as defined in Section 3.8(a))
that does not exceed fifty percent (50%) of Median Income (as defined in Section 3.8(b)) at
affordable rents as defined in Section 3.10 (the "Affordability Restrictions").
D. Under the Original Grant Agreement, the Developer agreed to operate the
Development pursuant to the Affordability Restrictions for a term of forty (40) years from the
date of execution of the Original Grant Agreement or a date no earlier than April 19, 2039.
E. The Former Agency and the Developer entered into that certain First Modification
of Grant Agreement dated as of July 1, 2009 (the "First Modification Agreement"), pursuant to
which the Former Agency granted the Developer an additional One Hundred Thirty Thousand
Dollars ($130,000) of Low and Moderate Income Housing Fund monies to install fire sprinklers
in the Development, for a total Grant amount of Four Hundred Seventy Thousand Dollars
($470,000) (the "First Modified Grant"). In exchange, the Developer agreed to extend the term
of the Affordability Restrictions applicable to the Development by an additional fifteen years.
141\01\1989943.1
F. Another Memorandum of Grant Agreement was dated as of , 2016
and recorded against the Development in the Official Records of the County of Marin
, 2016 as Document No. to reflect the First Modified
Grant and extended term of the Affordability Restrictions (the "First Modified Memorandum of
Grant Agreement").
G. In connection with the First Modification Agreement, a Notice of Affordability
Restrictions on Transfer of Property was dated as of , 2016 and recorded against
the Development in the Official Records of the County of Marin on , 2016 as
Document No. (the "Notice of Affordability Restrictions").
11. On February 1, 2012, the Former Agency was dissolved pursuant to California
IIealth & Safety Code Section 34172. The San Rafael City Council approved Resolution 13279
on January 3, 2012 electing to become the housing successor to the Former Agency and to retain
the housing assets and functions performed by the Former Agency in accordance with Health and
Safety Code Section 34176. Pursuant to 1 lealth and Safety Code Section 34176(a)(2), the State
Department of Finance has reviewed and approved, by letter dated October 1, 2012, the list of
housing assets of the dissolved RDA ("Housing Asset List"). The First Modified Grant and
documents evidencing the First Modified Grant are on the approved Housing Asset List.
I. The Developer desires to make some building upgrades to the Development, the
cost of which is about Ninety -Seven Thousand Dollars ($97,000).
J. The City and the Developer desire to modify and restate the Original Grant
Agreement, as modified by the First Modification Agreement, to reflect an increase in the Grant
by Ninety -Seven Thousand Dollars ($97,000) ("Additional Grant"), which will be funded by
City housing in -lieu fees, for a total grant amount of Five Hundred Sixty -Seven Thousand
Dollars ($567,000) ("Second Modified Grant").
K. The City desires and the Developer has agreed to increase the term of the
Affordability Restrictions by an additional eleven (11) years to July 1, 2065.
L. The California Environmental Quality Act (Public Resources Code Sections
21000 et M .) ("CEQA") imposes no conditions on the City's consideration and approval of this
Agreement, because the project undertaken pursuant to this Agreement is exempt from CEQA
requirements under categorical exemption set forth 14 CCR Section 15301.
M. Article XXXIV of the California Constitution imposes no conditions on the City's
consideration and approval of this Agreement, because the project undertaken pursuant to this
Agreement is the grant of funds for rehabilitation of an existing low rent housing project, and
such projects are exempt from Article XXXIV.
NOW, THEREFORE, WITH REFERENCE TO THE FACTS RECITED ABOVE, in
consideration of the mutual benefits accruing to the parties hereto and other valuable
consideration, the receipt and sufficiency of which consideration are hereby acknowledged, the
2
141\01\1989943.1
City and the Developer (referred to individually as the "Party" and collectively as the "Parties")
agree as follows:
ARTICLE 1: DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, the following definitions
shall apply:
(a) "Additional Grant" has the meaning as set forth in Recital J.
(b) "Affordability Restrictions" has the meaning set forth in Recital C.
(c) "Agreement" means this Second Modification and First Restatement of
Grant Agreement.
(d) "Approved Development Loan" means any loans to the Developer in
connection with the Development, as approved by the City in its sole discretion, provided,
however, that the City shall use its reasonable discretion to approve loans necessary for purchase
of the Development, or refinancing of such loans so long as the refinancing does not allow the
Developer to draw cash out of the Development.
(e) "City" means the City of San Rafael, California, a municipal corporation
and charter city.
the City.
designee.
(f) "City Council" means the city council of the City, the governing body of
(g) "City Manager" means the city manager of the City, or the city manager's
(h) "Development" means the Property and the Improvements.
(i) "Developer" means Artworks Downtown, Inc., a California nonprofit
public benefit corporation.
0)
(k)
(1)
(m)
forth in Recital F.
141\01\1989943.1
"Developer Event of Default" has the meaning given in Section 5.1.
"First Modification Agreement" has the meaning set forth in Recital E.
"First Modified Grant" has the meaning set forth in Recital E.
"First Modified Memorandum of Grant Agreement" has the meaning set
(n) "First Modified Notice of Affordability Restrictions on Transfer of
Property" means the first modified notice of affordability restrictions on transfer of property to
be recorded against the Property, in substantially the form attached to this Agreement as Exhibit
C.
(o) "Former Agency" means the San Rafael Redevelopment Agency, a public
body corporate and politic, organized and existing pursuant to the California Community
Redevelopment Law (Ilealth and Safety Code Sections 33000 et SeMc .), which was dissolved on
February 1, 2012.
(p) "Improvements" means the seventeen (17) residential units on the
Property to be operated under this Agreement.
(q) "Modification of Memorandum of Grant Agreement" means the
memorandum of this Agreement to be recorded against the Property, in substantially the form
attached to this Agreement as Exhibit B.
(r) "Notice of Affordability Restrictions" has the meaning set forth in Recital
G.
(s) "Original Grant" has the meaning set forth in Recital A.
(t) "Original Grant Agreement" has the meaning set forth in Recital A.
(u) "Original Memorandum of Grant Agreement" has the meaning set forth in
Recital B.
(v) "Parties" means the City and the Developer.
(w) "Property" means the property described in the attached Exhibit A, upon
which are located the Improvements to be operated pursuant to this Agreement.
(x) "Rent" has the meaning given in Section 3.8.
(y) "Second Modified Grant" has the meaning as set forth in Recital J.
(z) "Security Financing Interest" means the security interest created by any
mortgage, deed of trust, or similar financing encumbrance on the Property securing an Approved
Development Loan.
(aa) "Term" has the meaning given in Section 7.2.
(bb) "Transfer" has the meaning given in Section 4.1.
(cc) "Unit" has the meaning given in Section 3.8.
(dd) "Very Low Income Household" has the meaning given in Section 3.8.
4
141\01\1989943.1
1.2 Exhibits.
The following exhibits are attached to and incorporated into this Agreement:
Exhibit A: Legal Description of the Property
Exhibit B: Modification of Memorandum of Grant Agreement
Exhibit C: First Modified Notice of Affordability Restrictions on Transfer of
Property
ARTICLE 2: SECOND MODIFIED GRANT PROVISIONS
2.1 Second Modified Grant.
The Former Agency previously disbursed the Original Grant and the First Modified Grant
in the cumulative amount of Four Hundred Seventy Thousand Dollars ($470,000). The City
shall disburse the Additional Grant in the amount of Ninety -Seven Thousand Dollars ($97,000)
to the Developer in the manner described in Section 2.3 below in exchange for the extension of
the term of the Affordability Restrictions placed upon the Development by this Agreement.
2.2 Use of Second Modified Grant Funds.
The Developer shall use the Additional Grant funds to pay for upgrades to the
Improvements, as approved by the City. The Developer shall not use any of the Second
Modified Grant funds for any other purpose without the prior written consent of the City.
2.3 Disbursement of Additional Grant Funds.
The City shall have no obligation to disburse any of the Additional Grant unless the
following conditions have been and continue to be satisfied:
(a) The Developer has signed this Agreement, and signed, notarized and
delivered to the City the Modification of Memorandum of Grant Agreement in substantially the
form attached to this Agreement as Exhibit B and the First Modified Notice of Affordability on
Transfer of Property in substantially the form attached to this Agreement as Exhibit C.
(b) The Modification of Memorandum of Grant Agreement and the First
Modified Notice of Affordability on Transfer of Property have been recorded against the
Property in the official records of the County of Marin.
(c) The Developer has ftunished the City with evidence of insurance coverage
satisfying the requirements of Section 3.4(b) and (c).
(d) The City has received evidence reasonably satisfactory to the City that the
Developer exists in good standing at the time of the proposed disbursement, and that the
Developer has duly authorized entry into and performance under this Agreement.
141\01\1989943.1
(e) The Second Modified Grant, together with other funds or firm
commitments for funds that the Developer has obtained in connection with the Development, are
not less than the amount that the City determines is necessary to pay for the upgrades of the
Improvements and to satisfy all of the covenants contained in this Agreement.
(f) Developer has obtained all permits and approvals necessary for the
upgrades to the Development.
(g) The City has received a written draw request from the Developer,
including a copy of the bill or invoice covering the cost incurred. When a disbursement is
requested to pay any contractor in connection with Improvements on the Property, the written
request must be accompanied by conditional lien releases and/or mechanics lien title insurance
endorsements reasonably acceptable to City.
(h) Draw requests can be submitted no more often than once a month. The
Developer shall apply all disbursements for the purpose requested and shall directly pay the
vendor as set forth on the approved invoice no later than thirty (30) days following receipt of
such invoice. The Developer shall provide the City with documentation reasonably requested by
the City to document the use of the Additional Grant for the purposes set forth in the draw
requests. The City shall withhold disbursements to Developer if use of funds or work is found
not to comply with City, federal, state, or local law, or any applicable contract, until such time
matter has been corrected.
2.4 Acquisition of Development.
The Developer acquired the Development with the proceeds of the Original Grant.
ARTICLE 3: CONTINUING OBLIGATIONS
3.1 Amlicability.
The Developer shall comply with this Article 3 throughout the Tenn. The Developer
may not terminate this Agreement by tendering repayment of any portion of the $567,000
Second Modified Grant received by the Developer from the City and the Former Agency.
3.2 Use, Maintenance and Operation.
The Developer shall:
(a) Continuously operate and maintain the Improvements as multifamily
housing rented to occupants and at rent levels in conformity with Sections 3.9 and 3.10.
(b) During the course of such operation, maintain the Development in good
repair and in a neat, clean, and orderly condition. Subject to the requirements of lenders, if any
Improvements are damaged or destroyed, then the Developer shall, at its cost and expense,
diligently undertake to repair or restore such Improvements consistent with the plans and
specifications (or other rehabilitation design documents) approved by the City prior to
6
141\01\1989943.1
commencement of such work. The work or repair shall be commenced within one hundred
twenty (120) days after the damage or loss occurs and shall be complete within one (1) year
thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to
the cost of such repairs or restoration.
(c) Operate and maintain the Development in full compliance with all
applicable local, state, and federal laws and regulations.
3.3 Entry by the Citv.
After notice to the Developer, the Developer shall permit the City, through its officers,
agents, or employees, at all reasonable times, to enter onto the Property to inspect the
Development for compliance with this Agreement. The City shall not unreasonably disturb any
residential tenants in the course of any inspection conducted pursuant to this Section 3.3.
3.4 Indemnity: Insurance.
(a) The Developer shall indemnify, defend (with counsel reasonably chosen
by the City, at the City's option), and hold the City, and its employees, officers, agents, and
council members harmless against all claims which arise out of or in connection with the
ownership or occupancy of or construction on or in connection with the Development by the
Developer or the Developer's contractors, subcontractors, agents, employees, or tenants. This
indemnity shall not extend to any claim arising solely from the City's negligence or the City's
failure to perform its obligations under this Agreement. This Section 3.4(a) shall survive the
termination of this Agreement.
(b) The Developer shall maintain the following minimum insurance coverage,
issued by an insurer and in a form reasonably acceptable to the City:
(i) Worker's Compensation insurance, including Employer's Liability
coverage, with limits not less than $2,000,000 each accident.
(ii) Comprehensive General Liability insurance with limits not less
than $2,000,000 each occurrence combined single limit for Bodily Injury and Property Damage,
including coverages for Contractual Liability, Personal Injury, Broadform Property Damage
Projects and Completed Operations.
(iii) Property insurance covering the Improvements covering all risks of
loss for 100% of the replacement value, with deductible, if any, acceptable to the City.
If a holder of a Security Financing Interest requires greater insurance coverage, then such
greater coverage shall apply in the place of the coverage described above for purposes of this
subsection (b).
(c) The required insurance shall be provided under an occurrence form, and
the Developer shall maintain such coverage continuously throughout the Term. Should any of
the required insurance be provided under a form of coverage that includes an annual aggregate
7
141\01\1989943.1
limit or provides that claims investigation or legal defense costs be included in such annual
aggregate limit, such annual aggregate limit shall be two times the occurrence limits specified
above. Comprehensive General Liability, Comprehensive Automobile Liability and Property
insurance policies shall be endorsed to name as additional insured the City and its respective
council members, officers, agents, and employees. All policies and bonds shall be endorsed to
provide thirty (30) days prior written notice of cancellation, reduction in coverage, or intent not
to renew to the address established for notices to the City pursuant to Section 7.1 below. Upon
the City's request at any time during the Term, the Developer shall provide certificates of
insurance, in a form and with insurers reasonable acceptable to the City, evidencing compliance
with the requirements of this Section 3.4.
3.5 Hazardous Materials.
The Developer shall not use, generate, manufacture, store, or dispose of, on, under, or
about the Development, or transport to or from the Development, 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 as "Hazardous Materials") except such of the
foregoing as may be customarily and lawfully kept and used in and about residential rental
property.
The Developer shall immediately advise the City in writing if at any time it receives
written notice of (a) any and all enforcement, cleanup, removal, or other governmental or
regulatory actions instituted, completed, or threatened against the Developer or the Development
pursuant to any applicable federal, state, or local laws, ordinances, or regulations relating to any
Hazardous Materials ("Hazardous Materials Law"); (b) all claims made or threatened by any
third party against the Developer or the Development relating to damage, contribution, cost
recovery compensation, loss, or injury resulting from any Hazardous Materials (the matters set
forth in clauses (a) and (b) above are referred to as "Hazardous Materials Claims"); and (c) the
Developer's discovery of any occurrence or condition on any real property adjoining or in the
vicinity of the Development that could cause the Development or any part thereof to be classified
as "border -zone property" under California Health and Safety Code Sections 25220 et M. or
corresponding regulations, or to be otherwise subject to any restrictions on the ownership,
occupancy, transferability, or use of the Development under any Hazardous Materials Law.
The Developer shall indemnify, defend (with counsel reasonably chosen by the City, at
the City's option), and hold harmless the City and its council members, officers, employees, and
agents from and against any loss, damage, cost, expense, or liability 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 Development, including (without
limitation): (a) all foreseeable consequential damages; (b) the costs of any required or necessary
repair, cleanup, or detoxification of the Development and the preparation and implementation of
any closure, remedial, or other required plans; and (c) all reasonable costs and expenses incurred
by the City in connection with clauses (a) and (b), including (but not limited to) reasonable
attorneys' fees. This paragraph shall survive termination of this Agreement.
141\01\1989943.1
3.6 Non -Discrimination.
The Developer covenants by and for itself and its successors and assigns that there shall
be no discrimination against or segregation of a person or of a group of persons on account of
race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in
the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Development, nor
shall the Developer or any person claiming under or through the Developer establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the
Development. The foregoing covenant shall run with the land and shall survive termination of
this Agreement.
3.7 Mandatory Laneuas?e in All Subsequent Deeds, Leases and Contracts.
All deeds, leases, or contracts entered into by the Developer as to any portion of the
Development shall contain the following language:
(a) In deeds:
"Grantee herein covenants by and for itself, its successors and assigns that
there shall be no discrimination against or segregation of a person or of a
group of persons on account of race, color, religion, creed, sex, sexual
orientation, marital status, ancestry or national origin 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 such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees in the property herein conveyed. The foregoing covenant shall
run with the land."
(b) In leases:
"The lessee herein covenants by and for the lessee and lessee's heirs,
personal representatives and assigns and all persons claiming under the
lessee or through the lessee that this lease is made subject to the condition
that there shall be no discrimination against or segregation of any person
or of a group of persons on account of race, color, religion, creed, sex,
sexual orientation, marital status, ancestry or national origin in the leasing,
subleasing, transferring, use, occupancy, tenure or enjoyment of the land
herein leased nor shall the lessee or any person claiming under or through
the lessee establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, sublessees, subtenants, or
vendees in the land herein leased."
(c) In contracts:
141\01\1989943.1
Z
"There shall be no discrimination against or segregation of any person or group of
persons on account of race, color, religion, creed, sex, sexual orientation, marital
status, ancestry or national origin in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the property nor shall the transferee or any
person claiming under or through the transferee establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, or vendees of the land."
3.8 Affordabilitv Definitions.
The following definitions shall apply:
(a) "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. If no such program exists, then the City shall provide
the Developer with a method of calculation of adjusted income reasonably similar to that
provided in Section 6914.
(b) "Median Income" means the median income adjusted by actual household
size for households in the County of Marin, California, as published fiom time to time by the
State of California. If such income determinations are no longer published, or are not updated
for a period of at least eighteen (18) months, then the City shall provide the Developer with other
income determinations which are reasonably similar with respect to methods of calculation to
those previously published by the State.
(c) "Rent" means the total of monthly payments by the tenants of a 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 the Developer which are
required of all tenants, other than security deposits; the cost of an adequate level of service for
utilities paid by the tenant, including garbage collection, sewer, water, and electricity, gas, other
heating, cooking, and refrigeration fuel, but not telephone or cable television 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 the Developer, and paid by the tenant.
(d) "Unit" means one of the seventeen (17) dwelling units on the Property to
be operated pursuant to this Agreement.
(e) "Very Low Income Household" means a household with an Adjusted
Income that does not exceed fifty percent (50%) of Median Income.
(f) "Very Low Income Units" means the Units which, pursuant to Section 3.9
below, are required to be occupied by Very Low Income Ilouseholds.
10
141\01\1989943.1
3.9 Occupancy Requirements.
All of the Units shall be occupied by or, if vacant, available for rental and occupancy by
Very Low Income Households; provided, however, that any tenant lawfully residing in the
Development as of the date of this Agreement shall be entitled to remain a resident of the
Development if such tenant does not meet the income criteria of this Section 3.9. If and when
such non -qualifying pre-existing tenant vacates the Unit, such Unit shall be rented to a Very Low
Income Household.
3.10 Allowable Rent.
(a) Subject to Section 3.11 below, the Rent charged the occupants of the Very
Low Income Units shall not exceed one -twelfth of thirty percent (30%) of sixty percent (60%) of
Median Income.
(b) In calculating the allowable Rent for the Units, the following assumed
household sizes shall be utilized:
Number of Bedrooms Assumed Household Size
Studio 1
One 2
Two 3
Three 4
(c) Rents for the Units may be increased no more than one (1) time per year,
and the maximum Rent levels following an increase, or upon a new occupancy, shall not exceed
the Rent levels set forth in subsection (a) above, corresponding to the Median Income figures
published by the State of California for that year.
3.11 Increased Income of Occupvinia Households.
There shall be no violation of the occupancy requirements of Section 3.9 on account of
the continuous occupancy of a Unit by a household that was a Very Low Income Household
upon initial occupancy of the Unit but that is no longer a Very Low Income Household. When
such a household vacates its Unit, the Developer shall rent the Unit to a Very Low Income
Household to satisfy the above occupancy and rent requirements.
3.12 Lease Provisions.
The Developer shall utilize a form of lease or rental agreement approved by the City for
all Units. The City shall not withhold approval from any form that:
(a) authorizes the Developer to immediately terminate the tenancy of any
household one (1) or more of whose members misrepresented any fact material to the
household's qualification as a Very Low Income Household;
11
141\01\1989943.1
(b) provides that the tenant's income is subject to annual certification in
accordance with Section 3.13;
(c) provides that if the household refuses to provide information requested by
the Developer for the annual recertification described in Section 3.13, then the household's
tenancy shall be subject to immediate termination; and
(d) otherwise complies with this Agreement.
3.13 Tenant Income Certification.
The Developer shall obtain, complete, and maintain on file income certifications from
each Very Low Income Household dated no more than thirty (30) days prior to initial occupancy
and annually thereafter. The Developer shall make a good faith effort to verify that the income
reported by an applicant in an income certification is accurate by obtaining one (1) or more of
the following as a part of the verification process: (1) a pay stub for the most recent pay period;
(2) an income tax return for the most recent tax year; (3) an income verification form from the
applicant's current employer; (4) 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 (5) if none of the previously mentioned forms of
verification is possible, then another form of independent verification. If an occupant of a Unit
refuses to provide information requested by the Developer for the annual certification, then the
Developer shall immediately terminate such household's tenancy in a manner consistent with
applicable laws.
3.14 Tenant Selection.
The Developer shall not discriminate against Very Low Income llousehold applicants on
the basis of source of income or rent payment (for example, AFDC or Section 8), and the
Developer shall consider a prospective tenant's satisfactory credit history and previous
satisfactory rent history of at least one (1) year as sufficient evidence of the ability to pay the
applicable Rent on a timely basis when due.
3.15 Securitv Deposits.
The Developer shall not require security deposits on the Units in excess of one month's
Rent for such Units, and shall not require for such Units any other deposits, including (without
limitation) key deposits, cleaning deposits, or final month rent deposits.
3.16 Annual Report to Citv.
Each year commencing on the first June 30 after the date of this Agreement, and no later
than June 30 of each year thereafter, the Developer shall submit an annual report to the City, in a
form approved by the City. The annual report shall include for each Unit the Rent, and the
income and household size of each household occupying a Unit. The report shall also state the
date the tenancy commenced for each Unit and such other information as the City may be
required by law to obtain.
12
141\01\1989943.1
3.17 Additional Information.
The Developer shall provide any additional information reasonably requested by the City.
3.18 Records.
The Developer shall maintain complete, accurate, and current records pertaining to the
Units for five (5) years after creating such records, and shall permit any duly authorized
representative of the City to inspect and copy such records, including the records pertaining to
income and household size of tenant households as described in Section 3.13.
3.19 Specific Enforcement of Affordabilitv Restrictions.
Specific enforcement of the Developer's agreement to comply with the rent and
occupancy restrictions of this Article 3 is the only means by which the City may obtain the
benefits of the Units, and the Developer therefore agrees to the imposition of the remedy of
specific performance against it in the case of any Developer non-compliance with the rent and
occupancy restrictions of this Article 3. In addition to the remedies specified in this Section
3.19, the City shall have the right to pursue any of the remedies set forth in Article 6 below.
3.20 Fees and Taxes.
The Developer shall be solely responsible for payment of all fees, assessments, taxes,
charges, and levies imposed by any public authority or utility company with respect to the
Development, and shall pay such charges prior to delinquency. However, the Developer shall
not be required to pay and discharge any such charge so long as (a) the legality thereof is being
contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the
City, the Developer deposits with the City any funds or other forms of assurance that the City in
good faith from time to time determines appropriate to protect the City from the consequences of
the contest being unsuccessful.
3.21 Compliance with Applicable Law.
The Developer shall cause any construction work performed in connection with the
Development to be performed in compliance with all applicable laws, ordinances, riles, and
regulations of federal, state, county or municipal governments or agencies now in force or that
may be enacted hereafter. The work shall proceed only after procurement of each permit,
license, or other authorization that may be required by any governmental City having
jurisdiction, and the Developer shall be responsible to the City for the procurement and
maintenance thereof, as may be required of the Developer and all entities engaged in work on the
Development.
3.22 Relocation Obligations.
Although the Parties do not anticipate the relocation of any tenants residing in the
Development as of the date of this Agreement, if any such relocation is necessary or desirable,
the Developer shall follow all applicable state and federal relocation laws and regulations in
13
141\01\1989943.1
connection with such relocation and shall pay, at its sole expense, any and all costs associated
with such relocation.
3.23 Equal Owortunity.
There shall be no discrimination on the basis of race, color, creed, religion, sex, sexual
orientation, marital status, national origin, ancestry, or handicap in the hiring, firing, promoting,
or demoting of any person engaged in any construction work on the Development.
3.24 Mechanics Liens. Stop Notices, and Notices of Completion.
(a) If any claim of lien is filed against the Property or a stop notice affecting
the Second Modified Grant is served on the City or any lender or other third party in connection
with the Development, then the Developer shall, within twenty (20) days after such filing or
service, either pay and fully discharge the lien or stop notice, effect the release of such lien or
stop notice by delivering to the City a surety bond in sufficient form and amount, or provide the
City with other assurance satisfactory to the City that the claim of lien or stop notice will be paid
or discharged.
(b) The Developer shall file a valid notice of cessation or notice of completion
upon cessation of construction on the Development for a continuous period of thirty (30) days or
more, and take all other reasonable steps to forestall the assertion of claims of lien against the
Property.
ARTICLE 4: ASSIGNMENT AND TRANSFERS
4.1 Definitions.
The term "Transfer" means:
(a) Any total or partial sale, lease, assignment, or other conveyance, or any
trust or power, or any transfer in any other mode or form, of or with respect to this Agreement or
of any part of or interest in the Development, or any agreement to do any of the foregoing; or
(b) Any total or partial sale, assignment, or other conveyance, or any trust or
power, or any transfer in any other mode or form, of or with respect to any ownership interest in
the Developer or any agreement to do any of the foregoing.
4.2 Purpose of Restrictions on Transfer.
This Agreement is entered into solely for the purpose of the operation of the
Improvements in accordance with the terms of this Agreement. The qualifications and identity
of the Developer are of particular concern to the City, in view of:
(a) The importance of the operation of the Development as set forth in this
Agreement to the general welfare of the community;
14
141\01\1989943.1
(b) The public aid that has been made available by law and by the government
for the purpose of making such redevelopment possible;
(c) The fact that a change in ownership or control of the owner of the
Property, or of a substantial part thereof, or any other act or transaction involving or resulting in
a significant change in ownership or with respect to the identity of the parties in control of the
Developer or the degree thereof, is for practical purposes a transfer or disposition of the
Property; and
(d) The importance to the City of the standards of use, operation, and
maintenance of the Property.
It is because of the qualifications and identity of the Developer that the City is entering
into this Agreement and that Transfers are permitted only as provided in this Agreement.
4.3 Prohibited Transfers.
The limitations on Transfers set forth in this Article 4 shall apply throughout the Term.
Except as expressly permitted in this Agreement, the Developer represents that it has not made or
created, and agrees that it will not make or create or suffer to be made or created, any Transfer,
either voluntarily or by operation of law, without the prior written approval of the City, which
shall not be unreasonably withheld.
Any Transfer made in contravention of this Section 4.3 shall, at the City's discretion, be
void and shall be deemed to be a default under this Agreement, whether or not the Developer
knew of or participated in such Transfer.
City:
4.4 Permitted Transfers Without Prior Citv Approval.
The following Transfers shall be permitted at any time without the prior approval of the
(a) the rental of a Unit in the ordinary course of business;
(b) the Transfer of a Security Financing Interest to a lender making an
Approved Development Loan, subject to the City's approval of the loan as described in Section
1.1(d);
(c) a Transfer pursuant to enforcement rights associated with a Security
Financing Interest, subject to Section 4.6; and
(d) if the holder of a Security Financing Interest acquires fee title to the
Property pursuant to enforcement rights associated with the Security Financing Interest (as by
foreclosure or deed in lieu of foreclosure), then one (1) subsequent Transfer, subject to Section
4.6.
15
141\01\1989943.1
4.5 Permitted Transfers With Prior Citv Approval.
Except as permitted under Section 4.4, any Transfer shall be permitted only after (a) the
City, in its reasonable discretion, has delivered to the Developer its prior written approval of
such Transfer, and (b) the transferee has assumed the Developer's obligations under this
Agreement by signing this Agreement or such other reasonable documentation as the City may
require.
4.6 Effectuation of Certain Permitted Transfers.
Immediately upon a transferee described in Sections 4.4(c), or (d) obtaining ownership of
the Property, such transferee shall, as a condition of the effectiveness of the Transfer, assume the
Developer's obligations under this Agreement arising from and after the date of the assumption
by signing this Agreement or such other reasonable documentation as the City may require.
ARTICLE 5: DEFAULTS AND REMEDIES
5.1 Developer Events of Default.
(a) Each of the following shall constitute a "Developer Event of Default"
under this Agreement:
(i) A failure by the Developer to comply with the occupancy and
affordability standards of Article 3.
(ii) Any Transfer other than as permitted by Article 4.
(iii) A failure by the Developer to comply with any other requirement
of this Agreement.
(iv) Any Developer representation or warranty contained in this
Agreement, or in any application, financial statement, certificate, or report submitted to the City
in connection with this Agreement, proving to have been incorrect in any material respect when
made.
(v) Any monetary default by the Developer under an instrument
creating or secured by a Security Financing Interest for which the holder has accelerated or has
the right to accelerate the repayment obligation.
(b) The Developer shall have a cure period after notice from the City before
any facts set forth in subsections (a)(i)-(iii) constitute a Developer Event of Default. With
respect to facts set forth in subsections (a)(i)-(iii), the cure period shall be thirty (30) days, or
such longer period as may reasonably be necessary to cure so long as the Developer commences
to cure within thirty (30) days and diligently prosecutes the cure to completion.
(c) The existence of any Developer Event of Default shall relieve the City of
any obligation to make or continue disbursements under this Agreement and shall give the City
16
141\01\1989943.1
the right to terminate this Agreement and shall give the City the right to proceed with any and all
remedies at law or in equity, including actions for damages or specific performance.
5.2 Citv Events of Default.
Each of the following shall constitute a "City Event of Default" under this Agreement:
(a) A failure by the City to make a disbursement of Additional Grant funds as
required by Article 2.
(b) A failure by the City to comply with any other requirement of this
Agreement applicable to the City.
The City shall have a cure period after notice from the Developer before any facts set
forth in subsections (a) or (b) constitute an City Event of Default. The cure period shall be thirty
(30) days, or such longer period as may reasonably be necessary to cure so long as the City
commences to cure within thirty (30) days and diligently prosecutes the cure to completion.
The occurrence of any City Event of Default shall relieve the Developer of any obligation
to perform under this Agreement, and shall give the Developer the right to proceed with any and
all remedies at law or in equity, including actions for damages or specific performance.
5.3 No Default Termination.
Either Party may terminate this Agreement upon the condemnation, seizure, or
appropriation of any part of the Property in a manner that impairs the Developer's ability to
comply with the occupancy and affordability requirements of Sections 3.8 through 3.19. The
disposition of condemnation proceeds shall be as otherwise determined by law.
5.4 Remedies Cumulative.
No right, power, or remedy given to a Party by the terms of this Agreement is intended to
be exclusive of any other right, power, or remedy; and each and every such right; power, or
remedy shall be cumulative and in addition to every other right, power, or remedy given to the
Party. Neither the failure nor any delay on the part of a Party to exercise any such rights and
remedies shall operate as a waiver thereof, nor shall any single or partial exercise by a Party of
any such right or remedy preclude any other or further exercise of such right or remedy, or any
other right or remedy.
5.5 Waiver of Terms and Conditions.
A Party may at its discretion waive in writing any of the terms and conditions of this
Agreement, without completing an amendment to this Agreement. No waiver of any default or
breach shall be implied from any omission by the non -breaching Party to take action on account
of such default if such default persists or is repeated, and no express waiver shall affect any
default other than the default specified in the waiver, and such waiver shall be operative only for
the time and to the extent therein stated. Waivers of any covenant, term, or condition contained
17
141\01\1989943.1
herein shall not be construed as a waiver of any subsequent breach of the same covenant, term,
or condition.
ARTICLE 6: SECURITY FINANCING AND RIGHTS OF HOLDERS
6.1 Encumbrances Only for Development Purposes.
Notwithstanding any other provision of this Agreement, only the following
encumbrances are permitted to be placed upon the Property:
(a) Security Financing Interests for the purpose of securing Approved
Development Loans;
(b) Other documents (such as regulatory agreements) required in connection
with Approved Development Loans;
(c) Construction liens for the benefit of laborers or suppliers, so long as they
are in good faith contested or discharged promptly; and
(d) Vendor liens for the benefit of suppliers of fixtures such as washers and
dryers obtained in the ordinary course of business, or as approved by the City (in its reasonable
discretion) and by all holders of Security Financing Interests.
6.2 Holder Not Obligated to Construct.
The holder of any Security Financing Interest authorized by this Agreement is not
obligated to construct or complete any improvements or to guarantee such construction or
completion. However, nothing in this Agreement shall be deemed to permit or authorize any
such holder to devote the Property or any portion thereof to any uses, or to construct any
improvements thereon, other than those uses or improvements provided for or authorized by this
Agreement.
6.3 Notice of Default and RiRht to Cure.
(a) Whenever the City delivers any notice of default or demand to the
Developer, the City shall at the same time deliver to each holder of record of any permitted
Security Financing Interest a copy of such notice or demand. Each such holder shall (insofar as
the rights of the City are concerned) have the right (but not the obligation) to (i) cure the default
within ninety (90) days after the receipt of the notice or such longer period as may reasonably be
necessary to cure so long as (x) the holder commences to cure within ninety (90) days and
diligently prosecutes the cure to completion, or (y) the holder has commenced, within such
ninety (90) day period, appropriate proceedings, under the instrument creating its Security
Financing Interest, to obtain possession (through foreclosure or appointment of a receiver) of the
Property, and diligently prosecutes such proceedings and proceeds to cure after obtaining
possession any default under this Agreement that can reasonably be cured, and (ii) add the cost
thereof to the security interest debt and the lien on its security interest.
18
141\01\1989943.1
(b) Whenever the Developer delivers any notice of default or demand to the
City, the Developer shall at the same time deliver to each holder of record of any permitted
Security Financing Interest a copy of such notice or demand.
6.4 Right of Citv to Cure.
In the event of a default or breach by the Developer of a permitted Security Financing
Interest, the City may cure the default, prior to the completion of any foreclosure. In such event
the City shall be entitled to reimbursement from the Developer of all costs and expenses incurred
by the City in curing the default. The City shall also be entitled to a lien upon the Property to the
extent of such costs and disbursements. Such lien shall be subordinate to any permitted Security
Financing Interest, and the City shall execute from time to time any documentation reasonably
requested by the Developer to effect such subordination.
6.5 Right of Citv to Satisfv Other Liens.
After the Developer has had a reasonable time to challenge, cure, or satisfy any liens or
encumbrances on the Property, the City shall have the right to satisfy any such lien or
encumbrances. Nothing in this Agreement shall require the Developer to pay or make provision
for the payment of any tax, assessment, lien or charge so long as the Developer in good faith
contests the validity or amount therein and such delay in payment does not subject the Property
to forfeiture or sale.
ARTICLE 7: GENERAL PROVISIONS
7.1 Notices, Demands and Communications.
Formal notices, demands, and communications between the City and the Developer shall
be sufficiently given if, and shall not be deemed given unless, dispatched by certified mail, return
receipt requested, or delivered by an express delivery service with a receipt showing date of
delivery to the principal offices of the Parties as follows:
City: City of San Rafael
1313 Fifth Avenue
San Rafael, California 94915
Attn: City Manager
Developer: Artworks Downtown, Inc.
1337 Fourth Street
San Rafael, California 94901
Attn: President
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 7.1. Delivery shall be deemed to have occurred at the time indicated on the
receipt for delivery or refusal of delivery.
19
141\01\1989943.1
7.2 Termination.
Unless earlier terminated pursuant to Section 5. 1, the term of this Agreement (the
"Term") shall commence as of the date of execution of this Agreement and shall terminate on
July 1, 2065 (the 'Expiration Date"). Following the Expiration Date, neither Party shall have
any further rights or obligations under the Agreement except as otherwise provided herein.
7.3 Non -Liability of Officials, EmWovees and Agents.
No member, official, employee or agent of the City shall be personally liable to the
Developer, or any successor in interest, in the event of any default or breach by the City or for
any amount which may become due to the Developer or any successor or on any obligation
under the terms of this Agreement.
7.4 Forced Delay.
In addition to specific provisions of this Agreement, performance by either Party shall not
be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-
outs; riots; floods; earthquakes; fires; quarantine restrictions; freight embargoes; lack of
transportation; or court order; or any other similar causes (other than lack of funds of the
Developer) beyond the control or without the fault of the Party claiming an extension of time to
perform. An extension of time for any cause will be deemed granted if notice by the Party
claiming such extension is sent to the other within ten (10) days from the commencement of the
cause and such extension of time is not rejected in writing by the other Party within ten (10) days
of receipt of the notice. In no event shall the City be required to agree to cumulative delays in
excess of one hundred eighty (180) days.
7.5 Inspection of Books and Records.
The City has the right at all reasonable times to inspect on a confidential basis the books,
records, and all other documentation of the Developer pertaining to its obligations under this
Agreement. The Developer also has the right at all reasonable times to inspect the books,
records, and all other documentation of the City pertaining to its obligations under this
Agreement.
7.6 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and shall be disregarded in interpreting any part of its provision.
7.7 Applicable Law.
This Agreement shall be interpreted under and pursuant to the laws of the State of
California.
20
141\01\1989943.1
7.8 Severabilitv.
If any term, provision, covenant or condition of this Agreement is held in a final
disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall continue in full force and effect unless the rights and obligations of
the Parties have been materially altered or abridged by such invalidation, voiding or
unenforceability.
7.9 Leaal Actions.
In the event any legal action is commenced to interpret or to enforce the terms of this
Agreement or to collect damages as a result of any breach thereof, the Party prevailing in any
such action shall be entitled to recover against the Party not prevailing all reasonable attorneys'
fees and costs incurred in such action.
In the event legal action is commenced by a third party or parties, the effect of which is to
directly or indirectly challenge or compromise the enforceability, validity, or legality of this
Agreement and/or the power of the City to enter into this Agreement or perform its obligations
hereunder, either the City or the Developer may (but shall have no obligation to) defend such
action. Upon commencement of any such action, the City and the Developer shall meet in good
faith and seek to establish a mutually acceptable method of defending such action.
7.10 Binding Upon Successors; Covenants to Run With Land.
This Agreement shall be binding upon and inure to the benefit of the heirs,
administrators, executors, successors, and assigns of each of the Parties. However, there shall be
no Transfer except pursuant to the terms of this Agreement. Any reference in this Agreement to
a specifically named Party shall be deemed to apply to any successor, heir, administrator,
executor, or assign of such Party who has acquired an interest in compliance with the terms of
this Agreement, or under law.
The covenants and restrictions set forth in this Agreement shall run with the land, and
shall bind all successors in title to the Property. However, on the termination of this Agreement,
such covenants and restrictions shall expire (except where survival of such covenants and
restrictions is otherwise provided). Each and every contract, deed, or other instrument hereafter
executed covering or conveying the Property 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 City
expressly releases the Property fiom the requirements of this Agreement.
7.11 Parties Not Co -Venturers.
Nothing in this Agreement is intended to or does establish the Parties as partners, co -
venturers, or principal and agent with one another.
7.12 Entire Understanding of the Parties.
This Agreement constitutes the entire understanding and agreement of the Parties.
21
141\01\1989943.1
7.13 Approval.
Whenever this Agreement calls for City approval, consent, or waiver, the approval,
consent, or waiver of the City Manager shall constitute the approval, consent, or waiver of the
City, without further authorization required from the City Council. The City hereby authorizes
the City Manager to deliver such approvals or consents as are required by this Agreement, or to
waive requirements under this Agreement, on behalf of the City, and to take such actions and
execute such documents on behalf of the City as may be necessary to carry out this Agreement.
Any consents or approvals required under this Agreement shall not be unreasonably withheld or
made, except where it is specifically provided that a sole discretion standard applies. Except as
expressly provided, nothing in this Agreement limits the discretion of the City in the granting or
withholding any approval in connection with future rehabilitation or operation of the
Development.
7.14 Counterparts; Multiple Originals.
This Agreement may be executed in counterparts. This Agreement may be executed in
multiple originals, each of which is deemed to be an original.
7.15 Amendments.
The Parties can amend this Agreement, including any deadlines provided in this
Agreement, only by means of a writing signed by both Parties.
7.16 Enforcement.
Notwithstanding any other provision of law, all covenants and restrictions contained
herein which implement Health and Safety Code Section 33334.3 and/or 33413(c)(3), or
successor provisions, shall run with the land and shall be enforceable by the City and any of the
parties listed in Health and Safety Code Section 33334.3(b)(7), so long as such provision or
successor provisions remains in effect.
7.17 Database.
Developer hereby acknowledges and agrees that Health and Safety Code Section
33418(c) requires that the Property 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 Property.
22
141\01\1989943.1
above.
BY SIGNING BELOW, the Parties agree to this Agreement as of the date first written
CITY: CITY OF SAN RAFAEL, a municipal corporation and
charter city, in its capacities as the city and as the
successor to the housing assets and functions of the San
Rafael Redevelopment Agency
By:
Its: / I
V
DEVELOPER: ARTWORKS DOWNTOWN, INC.,
a California nonprofit pubic benefit corporation
By:�
Its: President
By: A�X� )
Its: EXECUTIVE p\e-t.c\o?'
23
141\01\1989943.1 _
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
PARCEL 1:
BEGINNING at a point on the Southerly line of Fourth Street, distant thereon North 83" 15' West 147 feet
from the intersection with the Westerly line of "C" Street, in Block 14, San Rafael, Townsite Map, filed
October 14, 1873 in Rack One, Pull 4, Marin County Records; and running thence along said Fourth
Street line North 83" 15' West 120.04 feet; thence leaving Fourth Street, South 6" 48' West 100.58 feet;
thence South 6" 41' West 22.20 feet to the Northerly line of the United States Post Office property as
described in Deed to United States of America recorded in Book 276 of Official Records at Paae 225
Marin County Records; thence South 83" 34' East 115.18 feet; thence South 4" 38' West 0.37 feet; thence
South 83" 15' East 11.50 feet; thence North 6" 45' East 57.46 feet; thence North 83" 15' West 6.58 feet;
thence North 6" 45' East 65 feet to the point of beginning.
PARCEL 2:
AN EASEMENT for ingress and egress as appurtenant thereto with the obligation of maintenance so long
as it is used over a strip of land having a full width of 9.83 feet, lying Northerly of a line described as
follows:
BEGINNING at a point distant and North 6" 41' East 4.17 feet from the Southwesterly corner of the lands
above described and running thence North 83° 34', West 38.67 feet to the Easterly line of "D" Street with
an overhead clearance of 10.17 feet.
(End of Legal Description)
APN: 011-253-02
A-1
141\01\1989943.1
RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
City of San Rafael
1313 Fifth Avenue
San Rafael, California 94915
Attn: City Manager
No fee for recording pursuant
to Government Code Section 27383
Illlllllllllllllll IIIIIIIIIIIIIII 1111111
2016-006037
Recorded I REC FEE 0.00
Official Records I
County of I COHFORHED COPY 0.00
Harin I
RICHARD Il. BENSON I
Assessor -Recorder I
County Clerk I
I
11:26AII 23 -Dec -2016 I Page 1 of 5
MODIFICATION OF MEMORANDUM OF GRANT AGREEMENT
iF��O�,��%/w\Q� �J�C1:.i.`�pll} �EC.r.,o� WL ► "�j`��./ � � 1 l i l 1y� � � `J �(
TRIS MODIFICATION OF MEMORANDUM OF GRANT AGREEMENT is made as
of November 2016, by and between the City of San Rafael, a municipal corporation and
charter city, in its capacities as the city and as the successor to the housing assets and functions
of the San Rafael Redevelopment Agency (the "City"), and Artworks Downtown, Inc., a
California nonprofit public benefit corporation (the "Owner"), to confirm that the City and the
Owner have entered into that certain Second Modification and First Restatement Grant
Agreement by and between the City and the Owner dated as of November 7, 2016 (the "Second
Modified Grant Agreement"). The Second Modified Grant Agreement imposes use restrictions
(including occupancy and affordability restrictions) on, and pursuant to California Health and
Safety Code Section 33334.3(f) is being recorded against, the real property in San Rafael,
California, described in the attached Exhibit A. The Second Modified Grant Agreement is a
public document and may be reviewed at the principal office of the City.
CITY: CITY OF SAN RAFAEL,
a municipal corporation and charter city, in its capacities
as the city and as the successor to the housing assets and
functio of the San R ael lopment Agency
By:
Its:
DEVELOPER: ARTWORKS DOWNTOWN, INC.,
a California nonprnM�c benefit corporation
By: %,
Its: President
141\01\1989617.1
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
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:
Notary Public
141\01\1989617.1
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Pi4R/ji
On Ii -L7 Z- 2-0 f 6 before me, - !�G I IPNc� Ajvr-0 1 RY
(insert name and title of the officer)
personally appeared ;:sl �`i 9c" or
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(ss/are
subscribed to the within instrument and acknowledged to me that�i'7she/they executed the same in
ii her/their authorized capacity(ies), and that b hi 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 '4' 'F ' (Seal)
E. BEIRNE b
COMM. #2112433 z
Notary Public - California o
Marin County
MV Comm. Exoires June 10, 2019
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
COUNTY OF H -41C I A.> )
On /X/%4Zr6 , before me, G -Zel R c
o , Notary Public,
personally appeared j'Rrctc 14c,R5j4 v , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s is re subscribed to the within
instrument and acknowledged to me that le he/they executed the same in&/her/their
authorized capacity(ies), and that byou /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.
0 COMM.B#21 2433 z
Notary Public - California �
EIR
Marin County °
z9My Comm. Expires June 10, 2019
141\01\1989617.1
Name: L • 201Pei c
Notary Public
A
EXHIBIT A
PROPERTY DESCRIPTION
PARCEL 1:
BEGINNING at a point on the Southerly line of Fourth Street, distant thereon North 83" 15' West 147 feet
from the intersection with the Westerly line of "C" Street, in Block 14, San Rafael, Townsite Map, filed
October 14, 1873 in Rack One, Pull 4, Marin County Records; and running thence along said Fourth
Street line North 83" 15' West 120.04 feet; thence leaving Fourth Street, South 6" 48' West 100.58 feet;
thence South 6" 41' West 22.20 feet to the Northerly line of the United States Post Office property as
described in Deed to United States of America recorded in Book 276 of Official Records at Paoe 225
Marin County Records; thence South 83" 34' East 115.18 feet; thence South 4" 38' West 0.37 feet; thence
South 83" 15' East 11.50 feet; thence North 6" 45' East 57.46 feet; thence North 83' 15' West 6.58 feet;
thence North 6° 45' East 65 feet to the point of beginning.
PARCEL 2:
AN EASEMENT for ingress and egress as appurtenant thereto with the obligation of maintenance so long
as it is used over a strip of land having a full width of 9.83 feet, lying Northerly of a line described as
follows:
BEGINNING at a point distant and North 6° 41' East 4.17 feet from the Southwesterly corner of the lands
above described and running thence North 83" 34', West 38.67 feet to the Easterly line of "D" Street with
an overhead clearance of 10.17 feet.
(End of Legal Description)
APN: 011-253-02
A-1
141\01\1989617.1
5
mjoa
402 RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of San Rafael
1313 Fifth Avenue
San Rafael, CA 94915 RECORD WITHOUT
Attn: City Manager FEE PER G.C. 27363
II Illlillllllllllllllllllllllillllllllll III
2016-0066373
Recorded I REC FEE 0.00
Official Records I
County of I CONFORMED COPY 0.00
Harin I
RICHARD 11. BENSON I
Assessor -Recorder I
County Clerk I
I
11:26AM 23 -Dec -2016 I Page 1 of 5
MODIFICATION OF NOTICE OF AFFORDABILITY RESTRICTIONS
MOO
TRANSFER OF PROPERTY!_
t1L OO y C. a VIJU` - i 0166 i LQ Qd`
NOTICE IS HEREBY GIVEN, that the City of San Rafael, a municipal
corporation and charter city, as the successor to the housing assets and functions of
the San Rafael Redevelopment Agency (the "City"), to carry out certain obligations
under the Community Redevelopment Law of the State of California (Health and
Safety Code Section 33000 et seq.), has required Artworks Downtown, Inc., a
California nonprofit public benefit corporation (the "Owner"), to enter into certain
affordability covenants and restrictions contained within the Second Modification
and First Restatement of Grant Agreement (the "Restrictions"), with reference to a
housing development (the "Development") located on that certain real property
(the "Property"), 1325-1337 Fourth Street, City of San Rafael, Marin County,
Assessor's Parcel No. 11-253-02 , 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. All seventeen (17) units in the Development are restricted for occupancy
by Very Low Income Households, at rents affordable to Very Low
Income Households; and
2. 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.
141;0111964417.1
The Agreement shall remain in effect until July 1, 2065.
This Notice is being recorded and filed by the Agency in compliance with Health
and Safety Code Sections 33334.3(f)(3) and (4) and/or Section 33413(c)(5), as
amended effective this date, and shall be indexed against the Agency and the
Owner.
IN WITNESS WHEREOF, the parties have executed this Notice of Affordability
Restrictions on Transfer of Property on or as of December 22, 2016.
CITY:
CITY OF SAN RAFAEL, a municipal
corporation and charter city
By:
J' chutz
City Manager
141\01\1964417.1 2
OWNER:
ARTWORKS DOWNTOWN, INC. ,
a California nonprofit public benefit
corporation
By: f l
Name:tELLCAz ,e1O ALL
Its: p(Lvr'l pel�JT
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF /4,4iPf�J
On /14 2142-o(6 , before me, C - ae7RNS , Notary
Public, personally appeared E R 1 eaG ri D P&A v , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s)oare
subscribed to the within instrument and acknowledged to me that(j)/she/they executed
the same in l § her/their authorized capacity(ies), and that byO/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: C •LAG/ 1eAj1
Notary Public
E. BEIRk
COMM. #2112433
�► Notary Public - California c
Z Marin County
My Comm. Expires June 10, 20191
141\01\1964417.1
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF N,ak f r)
On (112 -j -I 2of6 , before me, E - )3C1Au C , Notary
Public, personally appeared ,S —ek ScN vT Z . who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s)/are
subscribed to the within instrument and acknowledged to me thaO)e/she/they executed
the same in l&/her/their authorized capacity(ies), and that bye/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.
1 E. BEIRk t
COMM. #2112433 zz
Notary Public - California o
z Mann County
MY Comm. Expires June 10, 20191
141\0W964417.1 964417.1
Name: - �e i ie N is
Notary Public
EXHIBIT A
LEGAL DESCRIPTION
The land is situated in the State of California, County of Marin, City of San Rafael, and is
described as follows:
PARCEL 1:
BEGINNING at a point on the Southerly line of Fourth Street, distant thereon North 83° 15' West 147 feet
from the intersection with the Westerly line of "C" Street, in Block 14, San Rafael, Townsite Map, filed
October 14, 1873 in Rack One, Pull 4, Marin County Records: and running thence along said Fourth
Street line North 83° 15' West 120.04 feet; thence leaving Fourth Street, South 6° 48' West 100.58 feet;
thence South 6° 41' West 22.20 feet to the Northerly line of the United States Post Office property as
described in Deed to United States of America recorded in Book 276 of Official Records at Paoe 225
Marin County Records; thence South 83` 34' East 115.18 feet; thence South 4° 38' West 0.37 feet; thence
South 83° 15' East 11.50 feet; thence North 6° 45' East 57.46 feet; thence North 83' 15' West 6.58 feet;
thence North 6° 45' East 65 feet to the point of beginning.
9cVtd:11.F
AN EASEMENT for ingress and egress as appurtenant thereto with the obligation of maintenance so long
as it is used over a strip of land having a full width of 9.83 feet, lying Northerly of a line described as
follows:
BEGINNING at a point distant and North 6° 41' East 4.17 feet from the Southwesterly corner of the lands
above described and running thence North 83° 34', West 38.67 feet to the Easterly line of "D" Street with
an overhead clearance of 10.17 feet.
(End of Legal Description)
APN: 011-253-02
A-1
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of PpAl k/,J
On 2o16 before me, P - f�✓Gl iPn�� , /1�07b R�/ l�e� t. > t
(insert name and title of the officer)
personally appeared -Of—f`i 5cau-r Z
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(,9 /are
subscribed to the within instrument and acknowledged to me thahe/they executed the same in
&her/their authorized capacity(ies), and that by i 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 - F-j'e--+ F"J' (Seal)
E. BEIAE I
COMM. #2112433 z
Notary Public • California o
z Marin County
M� Comm. Expires June 10, 2019 i
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of "AR/,l)
On 6 before me, E, • 9 i✓ije.)t;, AJrsT00e►/ 16&40c
(insert name and title of the officer)
personally appeared GIefc-K Ilogl--A v
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)Ts/are
subscribed to the within instrument and acknowledged to me thaoe/she/they executed the same in
bs/her/their authorized capacity(ies), and that by�/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 "L' F'.e4'ep-a J (Seal)
E. BEIRNE j
COMM. #2112433 z
ZNotary Public . California
Marin County o
My Comm. Expires June 10, 2019
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Noe tJv
On before me, F Lej oN6-., 1jal aie y Pv.91-C.
(insert name and title of the officer)
personally appeared C: L/ 2#10 f,079-1 Se77COJ w IA&754-b
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(sLl/are
subscribed to the within instrument and acknowledged to me that he6e/they executed the same in
his/5�2 /their authorized capacity(ies), and that by hi /moi /their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature "` ' � /? (Seal)
E. BEIRNE
°�
COMM. #2112433 z s�►• Notary Public . California
Z Marin County °
My Comm. Expires June 10, 2019f