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Home My WebLink AboutED BMR; 33 Northcarr of Agenda Item No:n. 11 Meeting Date: May 17, 2010 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Economic Development Prepared by: Nancy Mackl�46f/tCef At"- ki/L City Manager Approval: SUBJECT: AUTHORIZING THE SIGNING OF BELOW MARKET RATE HOUSING AGREEMENTS BETWEEN MC2 CAPITAL PARTNERS LLC AND THE CITY OF SAN RAFAEL RE: 33 NORTH AVENUE AKA 33 SAN PABLO RECOMMENDATION: Adopt Resolution authorizing the Mayor and the City Clerk to execute the Below Market Rate Agreement ("BMR") for 33 North Avenue in North San Rafael. BACKGROUND: Chapter 14.16.030 of the City of San Rafael Zoning Ordinance requires that all new development contribute to the City's affordable housing stock. The affordable units are either rental or ownership. Economic Development staff administers the affordable rental program. San Rafael and the majority of the cities in Marin contract with the Marin County Housing Authority ("Marin Housing") to administer the BMR program for ownership units. The City's Economic Development staff oversees the contract for the ownership program. Marin Housing maintains a list of qualified purchasers and conducts a lottery from that list each time a new or resale BMR unit becomes available. Qualified purchasers are defined as first time homebuyers whose income does not exceed 120% of Area Median Income. First time homebuyer is defined as a household, in its current configuration, that has not owned a home in the past three years. This definition does not exclude people that owned a home with a previous spouse or partner. There is also a priority for households that currently live or work in Marin County. San Rafael General Plan Policy H-21 requires any units created pursuant to the City affordable housing requirements remain affordable for a minimum of 40 years. To meet this requirement, a 50 year resale restriction and an option to purchase constituting a right of first refusal to Marin Housing ("Resale Restriction") is recorded on each ownership unit. FOR CITY CLERK ONLY File No.: .2"W � /9—/& Council Meeting: eV ! �b10 o Disposition: /[ e5o 4.UT/o AJ pf SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paue: 2 ANALYSIS: 33 North will consist of 82 unit residential condominiums on an approximately two acre site. The project was previously called 33 San Pablo and is located across from the Marin Civic Center off North San Pedro Road. Twenty percent of the 82 units will be affordable to low and moderate income households. Eight units will be affordable to low income households and eight will be affordable to moderate income households. The sales prices for the low income units (all one bedroom units) are projected to be $169,000. The prices for the moderate units (all two bedroom units) are projected to be $ 277,000. The prices will be based on the 2010 Area Median Income. We anticipate the release of the 2010 Area Median Income figures in the next few weeks. The minimum household size for the two bedroom units is two persons. The addition of the 16 units at 33 North will increase the total number of BMR ownership units in the City from 115 to 131. There were previously 116 units, but the City Council declined to purchase the unit at 1116 Mission Avenue so that unit will be lost to the program. The developer requested numerous changes to the standard BMR Agreement to respond to changes in the real estate market, and lender reluctance to underwrite mortgages, especially on condominiums. The developer's lenders required that the BMR Agreement include a rental provision in case the project could not be sold. In previous projects, the City has filed separate rental and ownership BMR Agreements on the property and removed the rental agreement once the first unit entered into a sales contract. This standard arrangement was not acceptable to the developer's lenders. The attached proposed BMR Agreement allows the developer to cancel all sales and rent the full development any time prior to the close of the first sale, as required by the lending community. The developer also expressed concern about the ability of Marin Housing to find 16 qualified buyers and requested the performance window be reduced by 30 days. The attached proposed BMR Agreement provides Marin Housing 120 days to find and qualify buyers with an additional 90 days to close the transaction. Previous developer agreements provided 120 days to find buyers and an additional 120 days instead of 90 days, to close the unit. Marin Housing is confident that they will be able to perform within the proposed Agreement deadlines. However, there are some concerns including; the shrinking gap between BMR prices and market rate housing with no restrictions, the lack of completed models to show the potential buyers, the continued reluctance of lenders to underwrite mortgages, and the difficulty in selling higher density housing to Marin consumers. On the plus side, Marin Housing has many new financing programs and grants for first time homebuyers, 33 North has a good location and is currently the only new housing being built in the County. Many buyers only want to purchase brand new units. The attached BMR Agreement allows the developer to sell the BMR units, without restrictions, if Marin Housing cannot sell and close the units within 210 days. This is 30 days less than the standard BMR Agreement. The standard and proposed BMR Agreements require the developer to first provide Marin Housing a 10 day option to purchase the unsold units at the BMR price. This option can be assigned to another non profit entity including the City of San Rafael. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paye: 3 If the units are sold on the open market, the City will receive 60% of the difference between the BMR sales price and the actual sales price and the City is required to pay Marin Housing a minimum of 10% of that fee for their efforts. The reminder of the funds will be deposited into the Redevelopment Agency's affordable housing account. The standard BMR Agreement provided 100% of the difference to the City but our experience with the 1116 Mission sale shows that the 100% arrangement removes the owners' incentive to negotiate for a higher sales price. A higher sales price should result in more funding for the affordable housing account. FISCAL IMPACT: The Economic Development Department has spent over $6,000 in attorney's fees to revise the standard developer BMR agreement for this development. The fees were paid from the Agency's affordable housing fund. If all of the affordable units are sold to qualified buyers there will be no cost to the City of San Rafael. Marin Housing staffing costs to qualify buyers and close the units will be paid from a fee charged to the BMR purchasers. Marin Housing will request the City to exercise the option to purchase units that remain unsold after the contract period in order to keep the units in the BMR program. The City's Exercise of the Purchase Option will require a separate action by the City Council. OPTIONS: The City Council may choose one of the following options. Approve the attached Resolution and BMR Agreement between MC2 Capital Partners, LLC, and the City of San Rafael Direct staff to make alterations to the attached Agreement Do not adopt the attached Resolution ACTION REQUIRED: Staff recommends that the City Council adopt the Resolution and the BMR Agreement, with such changes to the Agreement as may be approved by the City Attorney. ATTACHMENTS: A: Proposed BMR Agreement RESOLUTION NO. 12955 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE SIGNING OF A BELOW MARKET RATE HOUSING AGREEMENT BETWEEN MC2 CAPITAL PARTNERS LLC AND THE CITY OF SAN RAFAEL RE: 33 NORTH AVENUE AKA 33 SAN PABLO THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES as follows: The Mayor or the City Manager and the City Clerk are authorized to execute on behalf of the City of San Rafael, a Below Market Rate Housing Agreement between MC2 Capital Partners, LLC and the City of San Rafael, copy of which is hereby attached and by this reference made a part hereof, with such changes, deletions and insertions as may be approved by the City Attorney. 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 17th day of May 2010, by the following vote, to wit: AYES: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None �ZSt c�a� C . Agw '&" . Esther C. Beirne, City Clerk 010-00' 7`tEz, RECORDING REQUESTED BY:-_- �rtii;^;rt: nr L:f San Rafael JJP�4 WHEN RECORDED MAIL TO: City of San Rafael �v Attention: Esther C. Beirne , City Clerk P.O. Box 151560 San RafaelCA 94915-1560 THIS SPACE FOR RECORDERS USE ONLY DOCUMENT TITLE BELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS PAGE IS ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ADDITIONAL RECORDING FEE APPLIES Recording Requested b),.- City y: City of San Rafael When Recorded Return to: City of San Rafael Attention: Esther C. Beirne, City Clerk P. O. Box 151560 San Rafael, CA 94915-1560 BELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS Project Name: 33 San Pablo Condominiums Location: 33 San Pablo Avenue, San Rafael, CA 94903 Developer: MC2 Capital Partners LLC This Below Market Rate Housing Agreement and Declaration of Restrictive Covenants (the "Agreement") is made and entered into this 34Zb day of ./wuE , 201 a , among the CITY OF SAN RAFAEL, a municipal corporation ("City"), the HOUSING AUTHORITY OF THE COUNTY OF MARIN, a public body, corporate and politic, created under the Housing Authority Law of the State of California ("Marin Housing Authority"), and, MC2 CAPITAL PARTNERS LLC, a California limited liability company, or any successor in interest ("Developer"), collectively the "Parties," with reference to the following: A. The Developer is the owner of that certain real property situated within the corporate limits of the City, which real property is more particularly described in Exhibit "A" attached hereto (the "Property"). B. The City has adopted Affordable Housing Requirements in accordance with the provisions of the Housing Element of its General Plan and Zoning Ordinance Section 14.16.030 of the San Rafael Municipal Code (the "Affordable Housing Requirements"). C. The Developer has received a discretionary approval from the City to construct a total of 82 residential units on the Property (the "Development"). The Developer intends to meet the Affordable Housing Requirements by constructing or causing to be constructed 16 on site dwelling units to be sold at prices that are affordable to low, and/or moderate income households ("Affordable Units"). The remaining units in the Development are "Market Rate Units." The Developer has not yet determined whether the Affordable Units will be sold or rented upon initial occupancy. 12201071619702.5 city revised 5/3/2010 Final -1- ORIGINAL D. Pursuant to the Affordable Housing Requirements and the conditions of approval for the Development, the Developer is required to enter into this Agreement on terms acceptable to the City. This Agreement shall be executed and recorded against the Property prior to the recordation of any parcel map or final map or issuance of any building permit for the Development. The purpose of this Agreement is to set forth the terms and conditions for producing and marketing the Affordable Units in greater specificity and to ensure that the Affordable Units are built as part of the Development. E. Marin Housing Authority is authorized by law to participate in programs that provide housing for households of very low, low, and moderate income and is by experience qualified to screen and determine the eligibility of applicants for very low, low, and moderate income housing. F. The Parties hereto desire, by this Agreement, to cooperate in implementing the efforts of the Developer to comply with the Affordable Housing Requirements. NOW THEREFORE, it is hereby agreed by and between the Parties hereto as follows: Section 1. Definitions. In addition to those terms defined in the Recitals and elsewhere in this Agreement, the following terms are specially defined for the purposes of this Agreement: (a) "Affordable Ownership Price" means a sales price calculated by the Marin Housing Authority that includes a reasonable down payment and results in a Monthly Housing Payment during the first calendar year of a household's occupancy that (i) for Low Income Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of sixty five percent (65%) of Area Median Income, as adjusted for Assumed Household Size; and (ii) for Moderate Income Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of ninety percent (90%) of Area Median Income, as adjusted for Assumed Household Size. An example of the calculations and methodology to be used to determine the Affordable Ownership Price is illustrated in Exhibit "C" attached hereto. (b) "Affordable Rent" means total monthly housing expenses as calculated by the Marin Housing Authority for use and occupancy of an Affordable Unit and for land and associated facilities, including parking; any separately charged fees or service charges assessed which are required of all tenants, other than security deposits; and including any charges assessed by a public or private entity and paid by the tenant; and a reasonable allowance for utilities (pursuant to a schedule provided by the Marin Housing Authority), including garbage collection, sewer, water, electricity, gas, other heating, cooking and refrigeration fuel, but not telephone or cable television service, that: (i) for Very Low Income Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of Area Median Income, as adjusted for Assumed Household Size; and (ii) for Low Income Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Area Median Income, as adjusted for Assumed Household Size. An example of the calculations and methodology to be used to determine the Affordable Rent is illustrated in Exhibit "D" attached hereto. (c) "Affordable Unit Property" means the legal parcel(s) of land on which the Affordable Units will be constructed, together with any Affordable Unit and appurtenant improvements constructed on such land. 1220 07 619702.5 city revised 5 5 2010 (d) "Agency" means the Redevelopment Agency of the City of San Rafael. -2- (e) "Assumed Household Size" shall be based on presumed maximum occupancy levels of one person in a studio apartment, two (2) persons in a one -bedroom unit, three (3) persons in a two-bedroom unit, and one additional person for each additional bedroom thereafter. (f) "Area Median Income" means median yearly income in Marin County as published pursuant to California Code of Regulations, Title 25, Section 6932, or successor provision. (g) "BMR Rental Agreement" means that Below Market Rate Rental Unit Agreement and Declaration of Restrictive Covenants between the Developer and the City, to be recorded against the Property if the Developer chooses to initially rent the Affordable Units. (h) "Deed of Trust" means the deed of trust, in the form provided by the Marin Housing Authority, executed by each buyer of an Affordable Unit, securing the buyer's performance under the Resale Agreement and the Note. (i) "Eligible Household" means a household that has been determined by the Marin Housing Authority to be eligible to purchase an Affordable Unit pursuant to the requirements for eligibility adopted by the City and specified in Exhibit `B" attached hereto. 0) "Low Income Household" means a household whose income does not exceed the lower income limits applicable to Marin County, adjusted for household size, as published annually by the California Department of Housing and Community Development. (k) "Low Income Affordable Unit" means an Affordable Unit reserved for occupancy by Low Income Households at an Affordable Ownership Price or Affordable Rent. (1) "Moderate Income Household" means a household whose income does not exceed the moderate income limits applicable to Marin County, adjusted for household size, as published annually by the California Department of Housing and Community Development. (m) "Moderate Income Affordable Unit" means an Affordable Unit reserved for purchase by Moderate Income Households at an Affordable Ownership Price. (n) "Monthly Housing Payment" is determined by the Marin Housing Authority and includes monthly payment of mortgage interest and principal, property taxes, mortgage insurance, homeowner's insurance, homeowners' association dues, assessments paid by homeowners, and a reasonable allowance for utilities and property maintenance costs. (o) "Note" means the promissory note, in the form provided by the Marin Housing Authority, executed by each buyer of an Affordable Unit. (p) "Notice of Affordability Restrictions" means a Notice of Affordability Restrictions on Transfer of Property in the form required by Health & Safety Code Section 33334.3(f)(3)(B) or successor provision. (q) "Resale Agreement" means the Resale and Refinancing Restriction Agreement and Option to Purchase, in the form provided by the Marin Housing Authority, executed by each buyer of an Affordable Unit, the City, and Marin Housing Authority. If required by California Community Redevelopment Law, the Agency may also be a party to the Resale Agreement. 1220`.07'•619702.5 city revised 5:'5;2010 -3- (r) "Very Low -Income Household" means a household whose income does not exceed the very low income limits applicable to Marin County, adjusted for household size, as published annually by the California Department of Housing and Community Development. (s) "Very Low -Income Affordable Unit" means an Affordable Unit reserved for rent by Very Low -Income Households at an Affordable Rent. Section 2. Satisfaction of Affordable Housina Reauirement. The Affordable Housing Requirements shall be satisfied with respect to the Property if. (a) the Developer constructs or causes to be constructed the Affordable Units meeting the requirements of Sections 3 through 5 below, in compliance with the schedule set forth in Section 6 below; and (b) Developer either: (i) offers all dwelling units in the Development for sale and sells all Affordable Units to Eligible Households in compliance with Sections 7 through 9 below, or, (ii) offers all dwelling units in the Development for rent, and rents all Affordable Units to Eligible Households in compliance with Section 10 below. Section 3. Number of Affordable Units. Developer shall construct, or cause to be constructed, at least sixteen (16) Affordable Units. If the Affordable Units are initially sold, eight (8) 2 bedroom units shall be Moderate Income Affordable Units and eight (8) one bedroom units shall be Low Income Affordable Units. If the Affordable Units are initially rented, eight (8) two bedroom units shall be Low Income Affordable Units and eight (8) one bedroom units shall be Very Low Income Affordable Units. Section 4. Location of Affordable Units. The Affordable Units shall be constructed on the Property in the location(s) shown or described in Exhibit "E" attached hereto. Section 5. Anuearance. Size. Bedroom Count and Tenure. The Affordable Units shall be of the same general design and exterior appearance as the Market Rate Units, of comparable quality of construction, and with the same number of average bedrooms as the Market Rate Units. Interior features of the Affordable Units shall be durable and of good quality. The Affordable Units shall include the number of bedrooms, square footage, and tenure indicated in Exhibit "E" attached hereto. Section 6. Schedule for DeveloDina Affordable Units; Decision Reaardina Tenure. Developer shall provide the Affordable Units pursuant to the following schedule: (a) Prior to recordation of any final or parcel map or issuance of any building permit for the Development, this Agreement shall be duly executed by the City, Marin Housing Authority, and the Developer and recorded against the Property. (b) Building permits for the Affordable Units shall be issued concurrently with building permits for the Market Rate Units, such that, of the units that have been issued building permits, at least twenty percent (20%) shall be Affordable Units. (c) Certificates of occupancy or final inspections for the Affordable Units shall be issued concurrently with certificates of occupancy or final inspections for the Market Rate Units, such that, of the units that have been issued certificates of occupancy or final inspections, at least twenty percent (20%) shall be Affordable Units. (d) At least one hundred twenty (120) days before issuance of any certificate of occupancy or approval of a final inspection for any dwelling unit in the Development, Developer shall inform Marin Housing Authority and City whether all dwelling units in the Development will be offered for sale or whether all dwelling units in the Development will be offered for rent. If Developer chooses to offer all dwelling units in the Development for sale, then the Affordable Units 1220 07.619702.5 city revised 5 5 2010 shall be offered for sale to Eligible Households. The Developer reserves the right to change the development from ownership to rental up until the time a minimum of one unit has been sold. For the purposes of this Section, a unit will not be considered sold until the close of escrow to a third party. If Developer chooses to offer all the dwelling units in the Development for rent, then the Affordable Units shall be rented to Eligible Households. If Developer chooses to sell the Affordable Units, Developer shall follow the procedures in Sections 7 9 of this Agreement. If Developer chooses to rent the Affordable Units, Developer shall follow the procedures in Section 10 of this Agreement. Section 7. Sale of Affordable Units to Eligible Households. Following completion of construction, if the Developer has determined that all dwelling units in the Development shall be initially offered for sale, the Developer shall sell all Affordable Units to Eligible Households at the Affordable Ownership Price established by the Marin Housing Authority as described in this Section. Developer shall make a good faith effort to market the Affordable Units to Eligible Households. (a) The Developer shall provide the Marin Housing Authority with written notice at least one hundred twenty (120) days before issuance of any certificate of occupancy or approval of a final inspection for any dwelling unit in the Development or approval of any final inspection for an Affordable Unit. The notice shall include the number of bedrooms and required income level of the unit. (b) The Developer agrees that the Affordable Ownership Price for the Affordable Units shall not exceed the prices set forth in Exhibit "C" attached hereto, unless modified by the Marin Housing Authority as described in subsections (c) and (d) below. Developer acknowledges and agrees that the Affordable Ownership Prices as shown in Exhibit "C" shall be calculated by Marin Housing Authority in its reasonable discretion in interpreting the requirements of this Agreement, and that Marin Housing Authority's calculation of the Affordable Ownership Prices shall be consistent with the methodology illustrated in Exhibit "C", shall be adjusted annually consistent with the Area Median Income determinations and shall be binding on the Developer. The Affordable Ownership Price shall be the absolute maximum price that the Developer or any other seller may receive as compensation for the sale of an Affordable Unit. Any options or upgrades shall be purchased outside of escrow and not increase the sales price of the unit. The Affordable Ownership Price does not include proration of taxes, utilities, and homeowner's association fees, nor does it include such closing costs as insurance premiums, escrow costs, transfer taxes, recording fees, document preparation cost or similar items. (c) Recalculation of the Affordable Ownership Price shall be permitted at the time that the Developer provides written notice to Marin Housing Authority one hundred twenty (120) days prior to the issuance of any certificate of occupancy or approval of any final inspection for an Affordable Unit if: (i) the mortgage rate shown in Exhibit "C" is different from the then -current market interest rate; (ii) Area Median Income has changed from that set forth in Exhibit "C"; or (iii) the final approved homeowners association dues are different from the estimate shown in Exhibit «C .39 (d) Upon receipt of the Developer's 120 -day notice, the Affordable Ownership Price shall be recalculated by Marin Housing Authority using: (i) the most affordable available mortgage rate for a thirty (30) -year, fixed-rate mortgage as determined by Marin Housing Authority; (ii) the current Area Median Income; and (iii) the final approved homeowners association dues. Such an adjustment to the Affordable Ownership Price shall be allowed more than one time only if mutually agreed by all the Parties to this Agreement. 1220.07 619702.5 city revised 5/5/2010 -5- (e) Developer agrees to offer the Affordable Units for sale only to Eligible Households. Marin Housing Authority agrees to process applications and certify the eligibility of applicants as Low Income Households or Moderate Income Households. In certifying eligibility of applicants, Marin Housing Authority shall adhere to the requirements for eligibility adopted by the City and specified in Exhibit "B". Selection of Eligible Households falling within any of the priorities established in Exhibit "B" shall be determined by a drawing or other equitable method mutually agreed upon by the City and Marin Housing Authority and administered by the Marin Housing Authority. Developer shall not unreasonably delay its review and acceptance or rejection of any purchase offer submitted by an applicant supplied by Marin Housing Authority. (f) Within the 120 day notice period (Selling Period), the Marin Housing Authority will provide a letter describing the sales status of each affordable unit to the Developer showing the number of units sold and ready to close escrow and the Developer shall verbally report confidential sales status information to the Marin Housing Authority. (g) In the event that Affordable Unit(s) do not close escrow on the date which is the later to occur of the following: (i) 90 days after the expiration of the 120 notice period, or (ii) 90 days after the certificate of occupancy has been issued; the Developer will, in writing, offer Affordable Units which did not close escrow for sale to the Marin Housing Authority or assignee at the Affordable Ownership Price. Within ten (10) working days after receipt of such written notice, Marin Housing Authority shall notify the Developer in writing whether or not it will purchase the Affordable Unit at the Affordable Ownership Price or whether it has assigned the offer to the City, another public agency, a non-profit organization, or an Eligible Purchaser. If Marin Housing Authority notifies the Developer that it or its assignee will purchase the Affordable Unit, the Developer shall execute a purchase and sale agreement and other documents described in Sections 8 and 9 below, as applicable, to sell the Affordable Unit to Marin Housing Authority or its assignee at the Affordable Ownership Price. Close of escrow shall take place on the date which is the later to occur of the following: (i) thirty (30) days after the date that the purchase and sale agreement is executed, or (b) ten (10) days after Developer has done all acts and executed all documents required for close of escrow. The Developer shall convey title to the Affordable Unit at the close of escrow free and clear of any mortgage, lien, or other encumbrance, unless approved in advance in writing by the Marin Housing Authority or assignee. (h) In the event that Marin Housing Authority declines to purchase the Affordable Unit or to assign the offer provided pursuant to subsection (f) of this Section within ten (10) working days after receipt of such written notice or does not close escrow on the unit within 30 days, the Affordable Unit may be sold by the Developer without restrictions as to price, and Sections 8 and 9 below will not apply to the sale of the Affordable Unit. In such event, the Developer shall pay to the City at close of escrow sixty (60%) of the difference between the sales price (less any real estate commissions and seller escrow expenses not to exceed six percent (6%) of the sales price) and the Affordable Ownership Price. The City shall pay to Marin Housing Authority a minimum of ten percent (101/0) of this sum for administrative costs related to administration of the City's Affordable Housing Requirements and shall utilize the remaining amount to provide housing affordable to Very Low, Low, and Moderate Income Households. Following payment of all sums due to the City, City shall release the property from this Agreement as specified in Section 13. 1220 07 619702.5 city revised 5 5 2010 -6- Section 8. Marin Housina Authority Approval of Homebuyer Documents. Approval of the following documents by the Marin Housing Authority shall be required prior to the offering for sale of the Affordable Units. (a) Form of Purchase and Sale Agreements for the Affordable Units (to be prepared by Developer and submitted to the Marin Housing Authority). Purchase and sale agreements between Developer and Eligible Households shall include requirements that: (i) Eligible Households shall execute documents for the benefit of the City and Marin Housing Authority as described in Section 9 below; and (ii) Marin Housing Authority shall be paid a transaction fee of 1% of the Affordable Ownership Price by the Eligible Household at close of escrow. Except for terms required to effectuate this Agreement, the Affordable Units shall be offered to Eligible Purchasers on the same terms as the Market Rate Units are offered to purchasers. (b) Form of Resale Agreement, Note, Deed of Trust, Notice of Affordability Restrictions, Request for Notice of Default and Sale, and Borrower's Disclosure (to be prepared by the Marin Housing Authority, following Developer's 120 -day notice to Marin Housing Authority). (c) The preliminary Department of Real Estate public report for the Development, including the Affordable Units (to be obtained by the Developer and submitted to the Marin Housing Authority). (d) Developer's form escrow instructions (to be prepared by the Developer and submitted to the Marin Housing Authority). Section 9. Homebuver Documents and Security Instruments. Prior to the sale of each Affordable Unit, Developer shall ensure that: (a) The Eligible Household, the City, and the Marin Housing Authority execute the Resale Agreement and the Notice of Affordability Restrictions in the form provided by the Marin Housing Authority. If the Agency's Low and Moderate Income Housing Funds have been granted or loaned to the Development or the Affordable Units, or if the Agency intends that the Affordable Units will assist in meeting the Agency's affordable housing production requirements required by Health and Safety Code Section 33413(b) (2), the Agency shall also be a party to the Resale Agreement and Notice of Affordability Restrictions. The escrow instructions shall stipulate that the Resale Agreement and the Notice of Affordability Restrictions shall be recorded against the Affordable Unit at close of escrow on the sale to the Eligible Household; and that the Resale Agreement and the Notice of Affordability Restrictions shall be recorded junior only to the lien of the deed of trust securing the Eligible Household's first mortgage loan, or to a second mortgage loan only if such loan is provided by a public agency which requires such subordination, or as otherwise approved in writing by the Marin Housing Authority. (b) The Eligible Household signs the Note in the form provided by the Marin Housing Authority. (c) The Eligible Household signs the Deed of Trust to secure performance of the Eligible Household's covenants under the Resale Agreement and payment of the amounts due under the Note. The Deed of Trust shall be recorded against the Affordable Unit, subordinate only to the Resale Agreement and the lien of the deed of trust securing the Eligible Household's first mortgage loan or to a second mortgage loan only if such loan is provided by a public agency which requires such subordination, or as otherwise approved in writing by the Marin Housing Authority. 1220.07 .G 19702.5 city revised 5 5 2010 —7— (d) A Request for Notice of Default and Sale is recorded for each deed of trust recorded at close of escrow. (e) The Eligible Household signs the Borrower's Disclosure in the form provided by the Marin Housing Authority. Within five (5) days following closing of the sale of any Affordable Unit, Developer shall forward to the Marin Housing Authority copies of the buyer's and seller's settlement statement and all closing documents, including Resale Agreement, Notice of Affordability Restrictions, the original Note, Deed of Trust, Request(s) for Notice of Default and Sale, and Borrower's Disclosure executed in connection with the sale. Developer shall retain all records related to compliance with obligations under this Agreement and the Affordable Housing Requirements for a period not less than two (2) years from the date of sale of all units in the Development and make them available on five (5) business days' written notice to Marin Housing Authority or City employees or others designated by the Marin Housing Authority or City for the purposes of inspection and copying. Section 10. Affordable Units. If the Developer elects to initially rent the Affordable Units following completion of construction, the Developer shall rent any Affordable Units to Eligible Households at Affordable Rents in compliance with this Agreement. Prior to issuance of any certificate of occupancy or approval of a final inspection for any dwelling unit in the Development, Developer shall enter into and record a BMR Rental Agreement with the City with a term of fifty-five (55) years, which BMR Rental Agreement shall include, but not be limited to, provisions regarding allowable rent, procedures for qualifying tenants, reporting, marketing procedures, and the like. Pursuant to Section 6, the Developer reserves the right to change the development from ownership to rental up until the time a minimum of one unit has been sold. If prior to the close of the escrow on the first ownership unit, the Developer chooses to change the property from ownership to rental, the City shall prepare and the Developer shall enter into and record a BMR Rental Agreement, as shown above. (a) The Developer agrees that the initial Affordable Rent for the Affordable Units shall not exceed the prices set forth in Exhibit "D" attached hereto, unless modified by the Marin Housing Authority as described in subsections (b) and (c) below. Developer acknowledges and agrees that the Affordable Rents as shown in Exhibit "D" shall be calculated by Marin Housing Authority in its reasonable discretion in interpreting the requirements of this Agreement, and that Marin Housing Authority's calculation of the Affordable Rents shall be consistent with the methodology illustrated in Exhibit "D" and shall be binding on the Developer. Annual Rent increases shall be based on the increases in the Area Median Income and shall not be less that the baseline rents established in this agreement. The Affordable Rent shall be the absolute maximum price that the Developer or any other seller may receive as compensation for the rental of an Affordable Unit, including all fees for housing services, parking, and other services. The Developer or successor may not charge or receive any additional compensation for an Affordable Unit. (b) Recalculation of the Affordable Rents shall be permitted at the time that the Developer provides written notice to the City one hundred twenty (120) days prior to the issuance of any certificate of occupancy or approval of any final inspection for an Affordable Unit if: (i) Area Median Income has changed from that set forth in Exhibit "D"; (ii) utilities included in the contract rent have changed from that set forth in Exhibit "D"; (iii)Marin Housing Authority has prepared a new schedule of assumed utility costs; or (iv) other fees charged to tenants are different from that shown in Exhibit "D." 1220 07 619702.5 city revised 5.5 2010 - 8 - (c) Upon receipt of the Developer's 120 -day notice, the Affordable Rents shall be recalculated by Marin Housing Authority using: (i) the current Area Median Income; (ii) utilities included in contract rent; (iii) Marin Housing Authority schedule of assumed utility costs; and (iv) any changes in other fees charged to tenants. Such an adjustment to the Affordable Rents shall be allowed more than one time only if mutually agreed by all the Parties to this Agreement. (d) Procedures for qualifying tenants, reporting, marketing procedures, and the like shall be as provided in the BMR Rental Agreement entered into between the Developer and the City. The City or Marin Housing Authority may impose a reasonable fee for annual monitoring of the Affordable Units. Section 11. Affordable Units Not Subiect to Costa -Hawkins Act. If Developer elects to initially rent the Affordable Units, Developer hereby acknowledges that the option of the Developer to rent the Affordable Units rather than offer them for sale is a regulatory incentive, which is a form of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code. As consideration for this regulatory incentive, Developer hereby agrees and acknowledges that Civil Code Section 1954.51 et seq. (Costa -Hawkins Act) does not apply to the Affordable Units that Developer has chosen to rent. Section 12. Sale of Affordable Units Offered for Rent. If Affordable Units initially offered for rent are located on a separate legal parcel due to recordation of a final or parcel map at any time, then Developer or a future owner of the Affordable Units may sell the Affordable Units pursuant to the terms of this Section 12. The Affordable Units shall be sold to Eligible Purchasers at an Affordable Ownership Price to Low Income, or Moderate Income Households, as established by this agreement, except that each Affordable Unit shall first be offered for sale to the existing tenant at the Affordable Ownership Price as adjusted for the current year's Area Median Income. At least one hundred twenty (120) days before offering a rental Affordable Unit for sale, the Developer or current owner shall provide the City and the Marin Housing Authority with written notice of the proposed sale of the Affordable Unit, including the number of bedrooms and required income level of the unit, and shall comply with the procedures specified in Sections 7 through 9 of this Agreement in the sale of the Affordable Unit. Additional requirements for sale of Affordable Units initially rented may be established in the BMR Rental Agreement, including but not limited to provisions for notice to tenants, rights of first refusal, limitations on rents, and extended lease provisions. Section 13. Release of Property From ALreement. (a) Covenant Runnine with the Land. The covenants and conditions herein contained shall apply to and bind, during their respective periods of fee ownership, Developer and its heirs, executors, administrators, successors, transferees, and assignees having or acquiring any right, title or interest in or to any part of the Property and shall run with and burden the Property until terminated in accordance with this Section 13. Until the Property is released from the burdens of this Agreement pursuant to this Section 13, the owners of fee title to the Property shall expressly make the conditions and covenants contained in this Agreement a part of any deed or other instrument conveying any interest in the Property. (b) Affordable Units Offered for Rent. If the Affordable Units are initially offered for rent, all parts of the Property shall be released from the burdens of this Agreement upon recordation of the BMR Rental Agreement and Notice of Affordability Restrictions against the Property. 12201071619702.5 city revised 5/5/2010 (c) Affordable Units Offered for Sale. If the Affordable Units are initially offered for sale, all parts of the Property except for the Affordable Units shall be released from the burdens of this Agreement upon recordation of the final map and the City's inspection of the units. The Owner shall request the City to execute, and record, with the Marin County Recorders Office, Exhibit "F" to this Agreement specifying the market rate units that will be released. Each Affordable Unit offered for sale shall be released from the burdens of this Agreement when it is: (i) sold to an Eligible Household in compliance with this Agreement; and (ii) a Resale Agreement, Deed of Trust, Notice of Affordability Restrictions, and Request for Notice of Default are recorded against the Affordable Unit. Upon sale of all of the Affordable Units to Eligible Households as prescribed in this Agreement or offered for sale to the Marin Housing Authority pursuant to section 7(g), the entire Property shall be released from this Agreement, and the Agreement shall be released from record against any portion of the Property. Section 14. Default and Remedies. Failure of the Developer to cure any default in the Developer's obligations under the terms of this Agreement within thirty (30) days after the delivery of a written notice of default from the Marin Housing Authority or the City (or such longer period of time up to an additional one hundred twenty (120) days as may be necessary to remedy such default, provided that the Developer has commenced action during the thirty (30) days necessary to remedy such default, and the Developer is proceeding with reasonable diligence to remedy such default) will constitute a default under this Agreement and the Affordable Housing Requirements, and, in addition to any other remedy authorized by law or equity for breach of this Agreement, Marin Housing Authority and.lor the City may exercise any and all remedies available to it with respect to the Developer's failure to satisfy the terms of this Agreement and the Affordable Housing Requirements, including but not limited to: (a) withholding, conditioning, suspending, or revoking any permit, license, subdivision approval or map, or other entitlement for the Development, including without limitation final inspections for occupancy and/or certificates of occupancy; (b) exercising any remedies available under the Subdivision Map Act, the Affordable Housing Requirements, the City's Municipal Code, or otherwise, with respect to the Developer's failure to satisfy the terms of this Agreement and the Affordable Housing Requirements; (c) instituting against the Developer, or other parties, a civil action for declaratory relief, injunction or any other equitable relief, or relief at law, including without limitation an action to rescind a transaction and/or to require repayment of any funds received in connection with such a violation; (d) where one or more persons have received a financial benefit as a result of violation of this Agreement or of any requirement imposed under the Affordable Housing Requirements, assessing, and instituting legal action to recover as necessary, a penalty in any amount up to and including the amount of financial benefit received, in addition to recovery of the benefit received; or Section 15. Remedies Cumulative. No right, power, or remedy given to the Marin Housing Authority or to the City by the terms of this Agreement or the Affordable Housing Requirements 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 Marin Housing Authority and the City by the terms of any such document, the Affordable Housing Requirements, or any statute or otherwise against Developer and any other person. Neither the failure nor any delay on the part of the Marin Housing Authority or the City to exercise any such rights and remedies shall operate as a waiver 1220 07 619702.5 city revised 5 5 20 10 -10- thereof, nor shall any single or partial exercise by the Marin Housing Authority or the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. Section 16. Attornevs Fees and Costs. If the Marin Housing Authority, the City, or the Developer is required to initiate legal proceedings to enforce its rights under this Agreement, the prevailing party in such action shall be entitled to an award of reasonable attorneys' fees and costs in addition to any other recovery under this Agreement. Section 17. Hold Harmless and Indemnification. Except for an award of attorneys fee and any other recovery to Developer pursuant to Section 16, Developer will indemnify and hold harmless Marin Housing Authority and City and their elected officials, officers, employees, and agents in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating in any manner to the Development, the Affordable Units, or Developer's performance or non-performance under this Agreement, including without limitation the construction or sale of any unit in the Development, and shall protect and defend Inderrinitees, and any of them with respect thereto, except to the extent arising from the gross negligence or willful misconduct of the Marin Housing Authority or the City. The provisions of this Section 17 shall survive expiration or other termination of this Agreement or any release of part or all of the Property from the burdens of this Agreement, and the provisions of this Section 17 shall remain in full force and effect. Developer's damages in no case shall exceed its rights to and value of the property subject to this agreement. Section 18. Hold Harmless — City. The City shall indemnify and hold harmless Marin Housing Authority, its officers, officials, employees and agents, from and against all claims, damages, loses and expenses including attorneys fees arising out of the performance of this Agreement, caused in whole or part by any negligent act or omission of the City, except where caused by the active negligence, sole negligence, or willful misconduct of the Marin Housing Authority. Section 19. Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, or by express courier service, to the Party to receive such notice at the addresses set forth below: To the City: City of San Rafael Attention: Economic Development Department P.O. Box 151560 San Rafael, CA 94915-1560 To Marin Housing Authority: Marin Housing Authority Executive Director 4020 Civic Center Drive San Rafael, CA 94903-4173 1220.07.619702.5 city revised 5!512010 To the Developer: MC2 Capital Partners, LLC Thomas M. Monahan 1101 Fifth Avenue, Suite 300 San Rafael, CA 94901 -11- Section 20.Any party may change the address to which notices are to be sent by notifying the other parties of the new address, in the manner set forth above. Section 21. Integrated Agreement. This Agreement constitutes the entire Agreement between the parties and no modification shall be binding unless reduced to writing and signed by the Parties. Section 22. Amendment of Agreement. This Agreement shall remain in effect for so long as the Property is subject to inclusionary housing obligations pursuant to the Affordable Housing Requirements, unless released pursuant to Section 13. This Agreement, and any section, subsection, or covenant contained herein, may be amended only upon the written consent of the City, Marin Housing Authority, and Developer. Section 23. No Joint Venture or Partnership. Nothing contained in this Agreement or any document executed pursuant to this Agreement shall be construed as creating a joint venture or partnership between Marin Housing Authority, City, and Developer. Nothing contained in this Agreement shall create or justify any claim against the Marin Housing Authority or City by any person that Developer may have employed or with whom Developer may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the Property or the construction of the Development. Section 24. Applicable Law and Venue. This Agreement shall be governed by California law. Venue for any dispute arising out of this Agreement shall be Marin County. Section 25. Waivers. Any waiver by Marin Housing Authority or the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by Marin Housing Authority or the City to take action on any breach or default of Developer or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Developer to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by Marin Housing Authority or the City to any act or omission by Developer shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for Marin Housing Authority's or the City's written consent to future waivers. Section 26. 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 the Agreement's provisions. Section 27. Multiple Originals, Countemart. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. Section 28. Severabilitv. In the event any limitation, condition, restriction, covenant, or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, or if any provision of this Agreement is rendered invalid or unenforceable pursuant to any California statute which became effective after the effective date of this Agreement, the remaining portions of this Agreement shall nevertheless remain in full force and effect. Section 29. Exhibits. The following exhibits are attached to this Agreement: 1220 07 619702.5 city revised 5 5 2010 Exhibit A Legal Description of the Property Exhibit B Eligibility Requirements and Priorities Exhibit C Sample Calculation of Affordable Ownership Price Exhibit D Sample Calculation of Affordable Rent -12- Exhibit E Location of Affordable Units Exhibit F Notice of Release of Below Market Rate Housing Agreement IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. DEVELOPER: MC2 Capital Partners LLC, a California limited liability company By: Monahan Pacific Corporation Its: Managin Me By: omas M. Monahan, President MARIN HOUSING AUTHORITY: Housing Authority of the County of Marin, a public body, corporate and politic, created under the Housing Authority Law of the State of California B . / tz Its: DSI til A-C—K GTP, (tiA-,.l 1220\07\619702.5 city revised 5/3/2010 CITY: City of fan R fel, a municipa oration By: � Cita} Wn, ager ATTEST: 1 54c� Esther C. Beirne, City Clerk APPROVED AS TO FORM: By: �L City Attorney - 13 - STATE OF CALIFORNIA COUNTY OF MARIN�- 5"-A 10 ,mc On , before me, ninjk Q. roll, ns, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person) whose name(, is/am subscribed to the within instrument and acknowledged to me that he/4aeA0iey executed the same in his/kerftheir authorized capacity;(ieS1, and that by his/heA4heif-signature on the instrument the person, or the entity upon behalf of which the person(A 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 / q,( STATE OF CALIFORNIA (seal) MINDY R. COLLINS Commission # 1872535 Notary Public - California Marin County @WCmmE0resD9c30,20l3 M 2(o Zai COUNTY OF MARIN ), On, before me, SOI 1�4 ZQYigit , Notary Public, personally appeared, w o proved to me on the basis of satisfactory evidence to be the person( -s-) whose name(a) is/are. subscribed to the within instrument and acknowledged to me that he/sheMiey executed the same in his/hen4heir authorized capacity(4"), and that by his/herMwir signature(( on the instrument the person(&}, or the entity upon behalf of which the personEe� 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 eauz 4' 1220\07\619702.5 3/19/2009 CAROL J. KAZARIAN Commission # 1675252 @My Notary Public - Colifornla (seal) Marin County., Comm. Expires Jun 15, 2010 CALIFORNIA -ALL--PURPOSE-ACKNOWLEDGMENT State of California County of On V�i ' ��l� before me, Mrl—& 9• (,D �ll Date � Here Insert Name an Title of he Officer personally appeared C4 hQ Name(s) of Signer(s) MINDY R. COLLINS Commission # 1872535 Z Notary Public - California y Marin County 6WC0rrME0re5D9c30,20l3 who proved to me on th basis of satisfactory evidence to be the person( whose name) isfa;s- subscribed to the within instrument and acknowledged to me that he/s4e4h+ executed the same in his/he## eir authorized capacity(aes•), and that by his/heOtheir signature(o on the instrument the person(, or the entity upon behalf of which the personA 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: • ��c?,� Place Notary Seal and/or Stamp Above Signature o ot'gry Public OPTIONAL Though the information below is not required by law, it may prove valuable to person ging on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document:' Document Date: y ' U \ Number of Pages: oRC) 1 Yt CT di Signer(s) Other Than Named Above: 1401u—,�- Capacity(ies) Claimed by Signer(s) may] Signer's Name: 0Wa!_ M. / / 0 104P Signer's Name: ❑ Corporate Officer — Title(s): ❑ Individual=:- ❑ Partner — Limited General Top of thumb here ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator XOther: Signer Is Representing: ❑ Corporate Officer— Title(s): ❑ IndividualN 0 r` ❑ Partner — Limited General Top of thumb here ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: 02008 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 -Chatsworth, CA 91313-2402 - www.NationalNotary.org Item #5907 Reorder: Call Toll -Free 1-800.876-6827 ACKNOWLEDGMENT State of California County of Marin On June 3, 2010 before me, Esther C. Beirne, Notary Public (insert name and title of the officer) personally appeared Ken Nordhoff , who proved to me on the basis of satisfactory evidence to be the person(s) whose name( is are subscribed to the within instrument and acknowledged to me th fii /she/they executed the same in her/their authorized capacity(ies), and that by(!5/her/their signature(s) on the instrument the erson(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 IS&G-- j&4e-4{ - (Seal) ESTHER C. BEIRNE CommisIlon #E 1744802 Notary Public - California Marin County MVCamn E I's - Jun 10, 2011 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY The land referred to herein is situated in the State of California, County of Marin, City of San Rafael, and described as follows: Beginning at a point on the Westerly line of San Pablo Avenue, distant thereon South 230 46' West 300 feet from the intersection thereof with the Southwesterly line of Manzanita Lane; thence running along said Avenue line, South 23° 46' West 140.0 feet; thence leaving said line and running North 66° 14' West 150.0 feet; thence South 23° 46' West 50.0 feet to a point in the Southwesterly line of the parcel of land conveyed by Louis Martini, et ux to Jacob Inauen, et ux, by Deed recorded August 21, 1946 in Book 527 of Official Records at Page 358, Marin County Records; thence running Northwesterly along the Southwesterly line of said parcel so conveyed to Inauen to a point in the Easterly line of the lot conveyed to Robert Lauchenauer by Deed recorded November 8, 1921 in Book 233 of Deeds at Page 279, Marin County Records; thence running Northeasterly along said Easterly line to the Southerly line of Block 20, as shown upon that certain Map entitled "Map of Golf Links Tract Near San Rafael, Marin County, California", filed for record January 14, 1908 in Volume 2 of Maps, at Page 107, Marin County Records; thence running Easterly along the Southerly line of Lots 5, 6 and 7, Block 20 of the above mentioned Map to the Southeast corner of said Lot 7 of the above mentioned map; thence running South 23° 46' West 100 feet; thence Southeasterly in a straight line to a point which bears North 661 14' West 110 feet from the point of beginning; thence running South 669 14' East 110 feet to the point of beginning. (End of Legal Description) 1220\07\619702.5 city revised 5/5/2010 EXHIBIT B ELIGIBILITY REOUIREMENTS AND PRIORITIES Eligibility Reauirements In determining and certifying eligibility of applicants for the Development, Marin Housing Authority shall adhere to the following criteria: 1. Applicants shall be Very Low Income Households, Low Income Households, or Moderate Income Households, as applicable, as defined in this Agreement. 2. For ownership Affordable Units, the total value of the applicant household's assets may not exceed 75 percent of the sales price of the unit. 3. For ownership Affordable Units, the applicant must qualify as a first time homebuyer defined as not having owned residential real property within a three-year period preceding purchase of an Affordable Unit. 4. The applicant must have at least two persons in his/her household to purchase or rent a two- bedroom unit, three persons to purchase or rent a three-bedroom unit, and one additional person for each additional bedroom, unless a reasonable accommodation is required for a caretaker for a disabled person. 5. Eligible households must provide Marin Housing Authority with pre approval documentation from an acceptable lender demonstrating financial capacity to purchase the Affordable Unit at the Affordable Ownership Price. Selection of Homebuvers In selecting prospective purchasers from among all eligible applicants, a drawing shall be conducted. The City of San Rafael has determined that the following priorities shall be employed in conducting the drawing to select prospective purchasers. All names shall be drawn from the group of applicants falling within the first priority before names are drawn from the second and subsequent priority groups. 1. First priority in the drawing shall go to applicants living or working in Marin County. 2. Second priority in the drawing shall go to all other applicants. 1220\07.619702.5 city revised 5:5;'20 10 EXHIBIT C SAMPLE CALCULATION OF AFFORDABLE OWNERSHIP PRICE Moderate Income Units 2009: 30 vear loan @5.5% Affordability target: 90% Eligibility limit: 120% Number of bedrooms 3BR 2138 1 BR Household size (for calculation purposes) 4 persons 3 persons 2 persons Median income for household size (see chart below) 96,800 87,100 77,450 Median income reduced to affordability target shown above 87,120 78,390 69,710 Monthly income (annual income divided by 12) 7,260 6,530 5,810 33% Housing -expense -to income ratio 2,400 2,150 1,920 Breakdown of monthly housing expense Property Tax (estimated @ 1.25% of sales price) 325 290 255 Homeowners Association Dues (estimated) 250 200 200 Mortgage Insurance (estimated at 75 basis points) 180 165 145 Debt Service on home purchase financing (P & 1) 1,645 1,495 1,320 Total Housing Expense 2,400 2,150 1,920 Financing -- assuming 30 -year, fixed-rate mortgage 4 persons $96,800 $116,160 Rate (current prevailing rate / to be updated at completion) 5.50% 5.50% 5.50% Term (months) 360 360 360 Loan amount 289,700 263,300 232,500 Loan -to -value ratio 95% 95% 95% Purchase price 1 304,9001 1 277,2001 1 244,7001 Downpayment 15,200 13,900 12,200 Estimated closing costs (@ 4%) 12,200 11,100 9,800 Estimated cash required for downpayment plus closing costs 27,400 25,000 22,000 EXHIBIT C Page 1 of 2 FY2009 Marin County HUD Median Family Income effective 3/19/09 HH Size Median 120% 1 person $67,750 $81,300 2 persons $77,450 $92,940 3 persons $87,100 $104,520 4 persons $96,800 $116,160 EXHIBIT C SAMPLE CALCULATION OF AFFORDABLE OWNERSHIP PRICE Low Income Units 2009: 30 vear loan@ 5.5% Affordability target: Eligibility limit: Number of bedrooms Household size (for calculation purposes) Median income for household size (see chart below) Median income reduced to affordability target shown above Monthly income (annual income divided by 12) 33% Housing -expense -to income ratio Breakdown of monthly housing expense Property Tax (estimated @ 1.25% of sales price) Homeowners Association Dues (estimated) Mortgage Insurance (estimated at 75 basis points) Debt Service on home purchase financing (P & 1) Total Housing Expense Financing -- assuming 30 -year, fixed-rate mortgage Rate (current prevailing rate /to be updated at completion) Term (months) Loan amount Loan -to -value ratio Purchase price Downpayment Estimated closing costs (@ 4%) Estimated cash required for downpayment plus closing costs EXHIBIT C Page 2 of 2 65% 1 80% 1 3BR 2BR 11131R 4 persons 3 persons 2 persons 96,800 87,100 77,450 62,920 56,615 50,340 5,240 4,720 4,200 1,730 1,560 1,390 225 205 180 225 200 200 125 115 100 1,155 1,040 910 1,730 1,560 1,390 5.50% 5.50% 5.50% 360 360 360 203,400 183,200 160,300 95% 95% 95% 1 214,1001 192,8001 168,7001 10,700 9,600 8,400 8,600 7,700 6,700 19,300 17,300 15,100 FY2009 Marin County HUD Median Family Income effective 3/19/2009 HH Size Median 80% 1 person $67,750 $54,200 2 persons $77,450 $61,960 3 persons $87,100 $69,680 4 persons $96,800 $77,440 EXHIBIT D SAMPLE CALCULATION OF AFFORDABLE RENT TOTAL NUMBER OF VERY LOW AND LOW INCOME UNITS: 16 Seven 1 Bedroom units @ Very Low and Nine 2 Bedroom Units @ low income ALLOWABLE RENT CALCULATION: Housing expense includes utility allowance per schedule below (allowances from Marin Housing). Very Low Income is 50% of Area Median Income, Low Income is 60% of Area Median Income and Moderate Income is 80% of Area Median Income. The applicable household and unit sizes are listed below. Actual households can exceed the household size indicated but the rental calculation will not change. For example, using the 2009 Area Median Income such calculation would be as follows: The One Bedroom Housing Expense shall not exceed 1/12 of 30% of 50% (very low income) or 60% (low income) of the Area Median Income for a 2 -person household. The Two Bedroom Housing Expense shall not exceed 1/12 of 30% of 50% (very low income) or 60% (low income) of the Area Median Income for a 3 -person household. The maximum qualifying tenant income is 50% of Area Median Income for very low and 80% of Area Median Income for low income or a lesser income as defined by the Owner. Household Size 2 Person 3 Person Unit Type 1 BRM 2 BRM Median Income 77,450 87,100 50% 38,700 43,550 Monthly Income 3,225 3,629 30% of Income 968 1,089 Monthly Utility I I Allowance (46) (64) Allowable Rent 922 1,025 60% 46,500 52,250 Monthly Income 3,875 4,354 30% of Income 1,162 1,306 Monthly Utility Allowance (46) I I (64) Allowable Rent 1,117 1,242 1220\07'.619702.5 city revised 5!5 2010 EXHIBIT E LOCATION OF AFFORDABLE UNITS Unit Bedroom/ Income Garage Low Income Moderate Income 2 Number Bath Level Parking 1 Bdrms Bdrms 101 1/1 Low 1 101 102 1/1 Low 1 102 103 2/1 Moderate 1 103 202 1/1 Low 1 202 204 2/1 Moderate 1 204 210 2/1 Moderate 1 210 214 1/1 Low 1 214 312 2/1 Moderate 1 312 313 1/1 Low 1 313 314 1/1 Low 1 314 315 2/1 Moderate 1 315 316 2/1 Moderate 1 316 413 1/1 Low 1 413 414 1/1 Low 1 414 415 2/1 Moderate 1 415 416 2/1 Moderate 1 416 8 8 r L X01 i LOCATION OF AFFORDABLE UNITS First Level Plan EXHIBIT E PAGE 1 OF 5 BMR UNIT SUMMARY LEVEL 18 2B TOTAL 1 2 1 3 2 1 2 3 9 2 3 5 2 3 5 5 0 0 0 e o o a TOTAL 7 9 10 Conceptual BMR Exhibit BMR COUNT: 1 Bedroom - 2 2 Bedroom -1 Eliff IN 49 0 a 9120 J EXHIBIT E LOCATION OF AFFORDABLE UNITS [Insert Legal Description(s) of Affordable Unit Property or, if no legal description is available, attach map of Property showing general location and distribution of Affordable Units.] BMRUNITSUMMARY 4 -lin LEVEL 10 2B YOTAL f!t! 2 2 1 a 2 1 2 3 3 2 3 6 6 3 6 6 0 0 0 0 � 8 0 0 0 TOTAL 7 B 16 LJ 0 0 Cn M Second Level Plan EXHIBIT E PAGE 2 OF 5 Conceptual BMR Exhibit BMR COUNT: 1 Bedroom -1 2 Bedroom - 2 B130� L, r EXHIBIT E LOCATION OF AFFORDABLE UNITS BMR UNIT SUMMARY LEVEL 1B 20 TOTAL 1 2 1 3 2 1 2 3 3 2 3 5 4 2 3 5 5 10 0 6 0 0 0 TOTAL 7 8 10 Second Level Plan 1220107\619702.5 EXnoff E city revised 5/6/2010 PAGE 3 OF 5 Conceptual BMR Exhibit BMR COUNT: 1 Bedroom -1 2 Bedroom - 2 0 ; B® J L- r 1220\07\619702.5 1220107\619702.5 city revised 5!6/2010 EXHIBIT E LOCATION OF AFFORDABLE UNITS, BMR UNIT SUMMARY LEVEL 18 26 TOTAL 1 2 t 3 2 1 2 3 3 2 3 6 4 2 3 S 6 1 0 0 0 6 0 0 0 TOTAL 7 9 16 D D Third Level Plan EXHIBIT E PAGE 4 OF 5 Conceptual BMR Exhibit BMR COUNT: 1 Bedroom - 2 2 Bedroom - 3 J L r EXHIBIT E LOCATION OF AFFORDABLE UNITS, BMRUMTSUMMARY LEVEL 19 29 TOTAL 1 2 1 3 2 1 2 3 3 2 3 6 4 2 3 6 6 0 0 0 6 0 0 0 TOTAL 7 9 16 Fourth Levet Plan EXHHBIT E 1220\OT%619702.5 PAGE 5 OF 5 city revised 5/6/2010 Conceptual BMR Exhibit BMR COUNT: 1 Bedroom - 2 2 Bedroom - 3 0 J 0 M O O m'O o zoE z o`A � voto N O O O '1- .DL O U) -0 NO� rO- co), V O O O LO LO O O O O LO O O O U') O O ap cc > C) ao d Q) O M LO ti O 00 M 00 O ti ti O r-:70, �`d EU3- O m 00 CA O LL Z i v t N d U O N a) C cn _ QO C O CLL c U C 0 a) Q _ a) > Z O = CU '^ U) O E O O O O O O O O O O -0' u) E O O m O CD m LO LO d_ O to LO CO O M 0 N O N m r- m N' OE s c N E,, _ ) O) CD O) ti CA 00 CA 0) ti O r LO r- r C N r M �- CA M 3 f- f` O 4-. C O LL v-� O U) N r N O c m tn�U) a) C) N Es -:6 W fU a) U) cn cn L U > f0 N O O O 3 O O O O O O LO LO a) O O o ai O p N c0 O O) co CD LO O ti p i a) U IL J CD CD C6CD CD fl_ 00 O Ci O) (6 O r N O U •:•C > t E� m :. CO � j c O C O J O LO O O O O O LO O LO O LO O LO O LO O O C N U s a) a) C 'a a) N '=' O G (D ti O M 'It 06 r-- M O C�0 CO N CD O N O N S a) -0 a) E ca) CD O U) U V M T IT LO LO m w ti ti > O U O,Z) QJ Q N= U� N CD , 0 N = • p a) a) a)-0 •N O O O O O O O O C) �+� � V 7 p 0 CO0 O N 000 �t O CO � N CO .N c v N N N M M M O � -0� O •- ti � O— ro a o O N O cu -aN Q) M _ O N p CD N r O °•=•Nod M O = o r An O C J No O c c N N U) c CO N M c1 to M ti 00 CA O M p c 0c a cn L- s Cn 0 N O O t �' D N .O 'y C 2 EXHIBIT F RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Rafael P.O. Box 151560 San Rafael, CA 94915-1560 Attn: Esther C. Beirne, City Clerk No fee for recording pursuant to Government Code Section 27383 (SPACE ABOVE THIS LINE FOR RECORDER'S USE) NOTICE OF RELEASE OF BELOW MARKET RATE HOUSING AGREEMENT This Notice of Release of Below Market Rate Housing Agreement (the "Notice") is made as of the _ day of , 200_, by the City of San Rafael, a municipal corporation (the "City"), and a ("Developer"). 1. This Notice relates to that certain Below Market Rate Housing Agreement by and between the City and the Developer dated , and recorded in the Official Records of the County of Marin (the "Official Records") on as Document No. (the "Housing Agreement"). 2. The City and the Developer hereby release the real property described in Exhibit A attached hereto and incorporated herein from the encumbrance of the Housing Agreement. 3. This Notice may be signed in multiple counterparts, which, when signed by all parties, shall constitute a binding agreement. IN WITNESS WHEREOF, the City and the Developer have executed this Notice as of the day first above written. DEVELOPER: By: Its: 1220\07\619702.5 city revised 5; 5i2010 CITY: a CITY OF SAN RAFAEL, a municipal corporation By: Its: SIGNATURES MUST BE NOTARIZED INSTRUCTIONS FROM: DEPARTMENT: DATE CITY OF SAN RAFAEL ROUTING SLIP / APPROVAL FORM USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY. Stephanie Lovette Economic Development SRRA / SRCC AGENDA ITEM NO.. DATE OF MEETING: 5/17/2010 TITLE OF DOCUMENT: AUTHORIZING THE SIGNING OF BELOW MARKET RATE HOUSING AGREEMENTS BETWEEN MC2 CAPITAL PARTNERS LLC AND THE CITY OF SAN RAFAEL RE: 33 NORTH AVENUE AKA 33 SAN PABLO Department Head (shgnature) *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** (LOWER HALF OF FORM FOR APPROVALS ONLY) APPROVED AS COUNCIL / AGENCY A�ENDA ITEM: 1. Ci ersi oana nature g (signature) NOT APPROVED APPROVED AS TO FORM: City Attorney (signature) U jtat' REMARKS:bat, - W, B M k Al, Lisp - ergttch, f RESOLUTION NO. 12955 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE SIGNING OF A BELOW MARKET RATE HOUSING AGREEMENT BETWEEN MC2 CAPITAL PARTNERS LLC AND THE CITY OF SAN RAFAEL RE: 33 NORTH AVENUE AKA 33 SAN PABLO THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES as follows: The Mayor or the City Manager and the City Clerk are authorized to execute on behalf of the City of San Rafael, a Below Market Rate Housing Agreement between MC2 Capital Partners, LLC and the City of San Rafael, copy of which is hereby attached and by this reference made a part hereof, with such changes, deletions and insertions as may be approved by the City Attorney. 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 17th day of May 2010, by the following vote, to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro None None "!FsjAE'lz G . Re-, R-•fc . Esther C. Beirne, City Clerk .1 if J RESOLUTION NO. 12955 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE SIGNING OF A BELOW MARKET RATE HOUSING AGREEMENT BETWEEN MC2 CAPITAL PARTNERS LLC AND THE CITY OF SAN RAFAEL RE: 33 NORTH AVENUE AKA 33 SAN PABLO THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES as follows: The Mayor or the City Manager and the City Clerk are authorized to execute on behalf of the City of San Rafael, a Below Market Rate Housing Agreement between MC2 Capital Partners, LLC and the City of San Rafael, copy of which is hereby attached and by this reference made a part hereof, with such changes, deletions and insertions as may be approved by the City Attorney. 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 17th day of May 2010, by the following vote, to wit: AYES: Brockbank, Connolly, Heller, Levine & Mayor Boro None None COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: G - ge-leuc Esther C. Beirne, City Clerk