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HomeMy WebLinkAboutRural Communities Housing Development Corporation 2015-11-09When recorded return to: City of Ukiah City Clerk Ukiah Civic Center 300 Seminary Avenue Ukiah, CA. 95482 2015-15189 Recorded at the request of: CITY OF UKIAH 11/10/2015 01:40 PM Fee: $40.00 Pgs: 1 of 10 OFFICIAL RECORDS Susan M. Ranochak - Clerk -Recorder Mendocino County, CA 1111 RR"161i'llART141II OPTION AGREEMENT TO PURCHASE EASEMENT IN REAL PROPERTY This Option Agreement to Purchase an Easement in Real Property (the "Option Agreement") is made and entered on mo-_m8r-e d , 2015 ("Effective Date"), in Ukiah, California by and between Rural Communities Housing Development Corporation ("RCHDC"), a non-profit public benefit corporation in good standing under the laws of the State of California and the City of Ukiah ("City"), a California general law municipal corporation. Collectively, RCHDC and City are called "the Parties" in this Agreement. RECITALS A. RCHDC owns fee title to certain real property located contiguous to but outside the boundaries of the City of Ukiah, in an unincorporated area of Mendocino County, California, consisting of approximately 2 acres more or less, known as 509 Brush Street, Ukiah, California, Mendocino County Assessor's Parcel Number 002-101-27, located on the north side of Orrs Creek and fronting on Brush Street ("the Property"). B. RCHDC develops and manages housing of various types for Lower Income Families, as defined in Health and Safety Code §50079.5 ("Low Income Housing"), using various grants, low interest loans and tax credit financing to finance the construction of such housing. As a condition of qualifying for much of this financial assistance, RCHDC is required to enter and record an agreement and declaration of restrictive covenants requiring that the housing constructed by RCHDC remain available and affordable (rents generally no greater than 30% of a family's adjusted income) to Lower Income Families for fifty or more years (an "Affordability Covenant"), C. City operates a municipal water utility to pump from wells and divert from Russian River underflow, treat and deliver water to commercial and residential property in the City. D. RCHDC acquired the Property for the purpose of developing Low Income Housing and has submitted an application to annex the Property to the City prior to its development. E. The City and RCHDC have entered and the Mendocino Local Agency Formation Commission has approved an Out -of -City Water Service Agreement, dated May 13, 2004, under which the City has agreed to provide water service to the Property for a project consisting of an apartment complex with approximately 152 units which will be and remain for the useful life of the complex affordable to persons of very low, low and moderate income as the terms "affordable" and "very low," low" and "moderate" income are defined by the California Department of Housing and October 30, 2015 1 Community Development and/or the United States Department of Housing and Urban Development ("the Project"). The City also has identified an area on the Property that it believes may be suitable for an additional well to serve the City's water system. The area (the "Wellsite Easement") is depicted and described on Exhibit A to the Easement Grant Deed, attached hereto as Exhibit 1. There may be other locations on the Property suitable for a municipal production well ("Additional Well Sites") which, when described as required by Section 1.6, below, shall be considered the Wellsite Easement, if the City exercises its Option to purchase that site as provided in Section 3, below. F. The purpose of this Agreement is to state the terms and conditions under which the City will investigate the suitability of the Wellsite Easement for the development of an additional well to serve the City's water system and to provide the City with an option to purchase the Wellsite Easement, if the City determines that it is suitable for this purpose. It also provides an opportunity to investigate Additional Well Sites, if the Wellsite Easement is determined not to be suitable for a municipal water system production well. AGREEMENTS In consideration of the above -recited facts and the terms and conditions as further stated herein the parties hereby agree as follows: 1. License and Right of Entry. RCHDC hereby grants to the City a license and right of entry for the following purposes on, over and under that portion of the Wellsite Easement and further depicted on the map attached hereto as Exhibit 2 and incorporated herein ("Well Site"), Additional Well Sites and the right to bring in utilities over other portions of the Property: 1.1. The evaluation of the water producing potential of the Well Site and, as further provided herein, Additional Well Sites, by various means, including, but not limited to, test borings, the drilling, pumping and evaluation of test wells, and the surveying and examination of the topography and geology of the Well Site and Additional Well Sites. 1.2. A right of access to the Well Site and Additional Well Sites for the City and its employees and contractors to engage in the activities described in paragraph 1.1, above. 1.3. The City agrees to restore the Property to a substantially similar condition to the condition it was in prior to conducting the tests and inspections authorized by this Agreement, if this Agreement terminates without the City and the RCHDC or its successors or assigns exercising the Option in accordance with Sections 2 and 3, below. In particular, City agrees to fill any test borings or drillings. In using the Well Site or Additional Well Sites, the City shall not unreasonably interfere with the RCHDC's use or access to the Well Site or the Property and RCHDC shall not unreasonably interfere with the City's investigation of the Well Site or Additional Well Sites as authorized by this Agreement. 1.4. City will indemnify the RCHDC for any damage to the Property caused by the City or its agents and contractors while performing work pursuant to this Agreement. City will indemnify and defend RCHDC against any claim by a third party against RCHDC for damages or personal injuries, including death, which damages are proximately caused by the negligent or willfully October 30, 2015 - 2 wrongful act or omission of City or its authorized agents or contractors in performing under this Agreement or the City's use of the easement purchased pursuant to Section 3 of this Agreement. City agrees to keep the Property free of liens for both labor and materials. If such a lien is recorded against the Property in connection with the performance of the work authorized herein by City or its authorized agents or contractors, City or its agents or contractors shall immediately obtain a release of the lien by posting bond or other means authorized by law. In the event that City assigns this agreement, its assignee shall assume City's obligations under this Section 1.4 for any events occurring on or after such assignment, and City shall be released from any obligation to indemnify RCHDC for any such events. City shall require third parties admitted to the Property to provide City with evidence of insurance in amounts deemed satisfactory by City prior to admission to the Property. 1.5. RCHDC makes no representations as to the condition of the Property or its suitability for the activities to be undertaken by the City. RCHDC makes no representations as to the availability or prior rights of any parties to any water produced on the Well Site, Additional Well Sites or the Property. City shall be solely responsible for obtaining any and all permits and approvals necessary for the activities to be conducted by City on the Well Site or Additional Well Sites. 1.6 The City shall investigate the well site potential of Additional Well Sites only if it concludes following its investigation as authorized by Section 1. 1, above, that the Well Site is not a suitable site for a municipal water system production water well. Before it commences any investigation of Additional Well Sites, it shall notify RCHDC in writing of each such site's location and adequately describe the site so that its boundaries can be reliably and accurately located on the ground which location must be approved by RCHDC, such approval not to be unreasonably withheld or delayed. The City shall not investigate more than two such sites and shall only investigate the second site, if it determines from its investigation of the first such site that the first site is not a suitable site for a municipal water system production well. 2. Option. For the period of one year (the "Option Period"), beginning on the Effective Date, and continuing until , 2016, RCHDC hereby grants to City an irrevocable option ("Option"), as defined herein, to purchase the Wellsite Easement or an Additional Well Site for the Purchase Price," defined below, and on other commercially reasonable terms and conditions upon which the parties will agree as provided in Section 3.4 below. For the Option, City shall pay RCHDC Twenty -Two Thousand, Four Hundred Dollars ($22,400.00), which together with City's efforts to investigate the suitability of the Well Site or Additional Well Sites for a production water well, the Parties agree is reasonable consideration. If the City exercises the Option under Section 3, below, the $22,400 paid for the Option ("Option Price") shall be applied to the Purchase Price of the Wellsite Easement and reduce the balance owing for the Purchase Price. During the Option Period, RCHDC shall not offer the Wellsite Easement or any interest therein for sale and shall not accept any offers to purchase the Wellsite Easement. Further, RCHDC shall not convey title to the Wellsite Easement or any interest therein. RCHDC shall not make any changes to the Property that would affect the use or value of the Wellsite Easement without the prior written consent of City; 3. Terms of Purchase of the Wellsite Easement. To validly exercise the Option, City shall, prior to the expiration of the Option Period, give RCHDC written notice that City is exercising its Option to purchase the Property in accordance with the terms of this paragraph 3 ("Option Notice"). October 30, 2015 3 The date when the notice is given shall be called in this Agreement "the Option Notice Date." 3.1. Purchase Price: RCHDC agrees to accept from City and City agrees to pay RCHDC as the total consideration and purchase price for the Wellsite Easement, excluding only closing costs and pro -rations paid by City pursuant to Section 3.3(d), below, and the property taxes attributable to the potion of the Property encumbered by the easement ("Easement Property Tax") One Hundred Seventeen Thousand Six Hundred Dollars ($117,600), consisting of a Purchase Price of One Hundred Forty Thousand Dollars ($140,000.00) less the Option Price of Twenty -Two Thousand Four Hundred Dollars ($22,400). In addition, the City will pay at Close of Escrow Four Thousand Dollars ($4,000) as the Easement Property Tax, calculated at the rate of $400/year for 10 years. 3.2. Condition of Title: RCHDC shall possess fee simple title to the Wellsite Easement which shall be free and clear of all liens, except for any property taxes not yet due, and all leases, liens, easements and encumbrances not approved by City prior to the close of the escrow established pursuant to paragraph 3.3, below. RCHDC shall execute and deposit in escrow an Easement Grant Deed substantially in the form of Exhibit 1, attached hereto. 3.3. Escrow: City shall open escrow with Redwood Empire Title Company ("Title Company") within five (5) days from the Option Notice Date. The parties shall deliver escrow instructions to the escrow agent within fourteen (14) days from the Option Notice Date, which shall include the following: a. Closing date: Escrow for the acquisition of the Property shall close ("Close of Escrow") not later than sixty (60) days from the Option Notice Date, unless otherwise extended by the mutual consent of City and RCHDC, which consent shall not be unreasonably withheld by either party. b. Preliminary title report and title insurance: City shall have procured a preliminary report during its investigation of the Well Site pursuant to Section 1, above. The City shall provide RCHDC with notice of any exceptions in the policy to which it objects within fifteen (15) days of its receipt of the report. RCHDC shall use its best efforts to remove any exceptions disapproved in the City's notice to RCHDC within thirty (30) of its receipt of those objections, including any approval required by the holder of any deed of trust or other security interest in the Property. If RCHDC is unable to address the exception to City's reasonable satisfaction, the City may discontinue its investigation of the Well Site and RCHDC shall refund to the City the Option Price. The Title Company must issue prior to closing title insurance in the amount of the $140,000, listing only those exceptions approved by City. c. RCHDC Disclosures: RCHDC discloses and agrees to provide to City and/or cooperate with City on the following information concerning the condition of the Property: (1) Flood Hazard Area Disclosure: The Property or a portion thereof [is] [is not] located within a Federal Emergency Management City (FEMA) "Special Flood Hazard Area." October 30, 2015 4 (2) Geologic Hazard Zone: The Property is not located within a Special Studies Zone as designated under Public Resources Code §§ 2021-2625. (3) Information: To provide the City with copies of all documents, reports, data, field notes and other information relating to the condition of the Property in RCHDC's possession or within its control as City may reasonably request. (4) Presence of Underground Utilities: To provide the City copies of documents and other information in RCHDC's possession or available to RCHDC regarding the location or construction of underground utilities on the Property. d. Closing costs: City and RCHDC shall agree on the appropriate allocation between them of all closing, escrow and title insurance costs of said conveyance. Subject to Section 3.1, above, assessments, property taxes and insurance premiums (collectively, "pro -rations"), if any, shall be prorated between the parties from the date the deed is recorded in the official records of Mendocino County. All pro -rations shall be made on the basis of a 365 day year or thirty (3 0) day month as applicable. e. Right of Possession: City's right of possession shall commence upon Close of Escrow on the purchase of the Property. 3.4. The parties may, but are not required to, negotiate additional and commercially reasonable terms and conditions for the purchase of the Wellsite Easement and/or close of escrow. 3. Miscellaneous provisions. 3.1. Notices. Except as otherwise expressly provided herein, any written notice required by this Option Agreement shall be deemed given and received when personally served by personal delivery, overnight delivery or fax (with acknowledgement of receipt) or forty-eight (48) hours after being placed in the United States mail, with proper first class postage prepaid, and addressed as follows: To City: Attention: City Manager Ukiah Civic Center 300 Seminary Ave. Ukiah, CA. 95482 FAX: (707) 462-6204 To RCHDC: Chief Executive Officer 499 Leslie Street Ukiah, CA. 95482 FAX: (707) 463-1975 Any party hereto may give notice of an address change under the provisions of this paragraph and thereafter all notices shall be given to that address. 3.2. Waivers. No waiver of any breach of any covenant or provision contained herein will be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision contained herein. No extension of time for performance of any obligation or act will be October 30, 201555 deemed an extension of time for performance of any other obligation or act except those of the waiving party, which will be extended by a period of time equal to the period of the delay. 3.3. Successors and Assigns. City shall have the right to assign its interest in this Option Agreement to such third parties as City shall determine in its reasonable discretion. This Option Agreement is binding upon and inures to the benefit of the Parties' successor and assigns. 3.4. Entire Agreement. This Option Agreement (including all Exhibits attached hereto) constitutes the entire contract between the parties hereto and may not be modified except by an instrument in writing signed by the party to be charged. 3.5. Time of Essence. City and City hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation, and provision hereof. 3.6. Construction. The Parties agree and their respective advisors believe that this Agreement is the product of all of their efforts, that it expresses their agreement and that it should not be interpreted in favor of or against either party. 3.7. Governing Law. The Parties expressly agree that this Option Agreement will be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California. The Parties mutually consent to jurisdiction and venue in the courts of Mendocino County and waive any objections to the jurisdiction or venue of such courts. 3.8. Paragraph Headings. The paragraph headings contained herein are for convenience and reference only and are not intended to define or limit the scope of this Option Agreement. 3.9. Recordation. Each party shall have the signature of its authorized representative signing this Option Agreement notarized and the Title Company shall record the original agreement in the Official Records of Mendocino County. 3.10. Third Party Beneficiaries. This agreement is for the sole and exclusive benefit of the Parties and their successors and assigns. No other person or entity, private or public, has any rights under this Agreement or any standing to enforce the terms thereof 3.11 Well House Standards. City agrees to paint the well house within the improved Wellsite Easement in a color that is compatible with development of the Property by RCHDC or its successors. The City shall allow RCHDC or its successor to incorporate landscape design and treatments within the Wellsite Easement that coincide with the future design of the development. The City agrees to obtain approval of the Property's owner for any improvements intended to provide security for the City's well and appurtenances. Entered on the Effective Date. CITY RCHDC October 30, 2015 6 City of Ukiah By: Sa S&r gia , City Mana r Rural Communities Housing Development Corp. By: NOTARY ACKNOWLEDGMENT Attach Notary Acknowledgement October 30, 2015 % ACKNOWLEDGMENT State of California County of On Q�-�o� u 7 o a -o f before me, nsz o V-0 41L r � l' C - (insert name and title of the off icg-r-)- personally r) personally appeared T a ej E& Z2 u / .' , who proved to me on the basis of satisfactory evidence to be the p rson( whose name(�si &are s scribed to the within instrument and acknowled ed to me that she/the executed the same in li her/their authorized capacityesj; and that by is er/their signature4s�the instrument the persorV43-r,or the entity upon behalf of which the person cted, 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. ROSE M. POPLIN COMM. N 2008645 �+ NOTARY PUBLIC • CALIFORNIA 9 LAKE COUNTY MY Comm"February ton Wms Signature (Seal) CALIFORNIA• • •CODE § 1189 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 P1ENJ061"y On /Vrf ►Ntc3&!L at, <2©1 S before me, Date l s n rvt� A -t -IA t W Here Insert Name and Title of the Officer personally appeared S k L G k -5-:C— SA -1V& f 14-6,0 A4 0 Name(s) of Signer(s) 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. KRISTfNE ROBIN LAWLER WITNESS my hand and official seal. COMM. #1998485 = l?��' `�✓ _ i tl► Notary Public • California A Mendocino County Signature My Comm. Ex 'res Nov. 17, 2016 Signature of Notary Public Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: ewi ew4 ?0-1-c hO-V Document Date: 111111,5- Number of Pages: 7— Signer(s) Other Than Named Above: 9r'" M `1)Jr)'W1 Capacity(ies) Claimed by Signer(s) Signer's Name: -51,4,0 s �gcd''ho /corporate Officer - Title(s): ❑ Partner — ❑ Limited ElGeneral ❑ Individual ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: frj v �ttr� L► Signer's Name: • Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General Individual ❑ Attorney in Fact Trustee ❑ Guardian or Conservator Other: Signer Is Representing: RECORDING REQUESTED BY AND MAILED TO: NAME: ( (//� /o a ✓STREET: vr vi a r CITY: ��4/ld 2016-12183 Recorded at the request of: CITY OF UKIAH 09/13/2016 12:22 PM Fee: $52.00 Pgs: 1 of 14 OFFICIAL RECORDS Susan M. Ranochak - Clerk -Recorder Mendocino County, CA 1112"Iftl1wwIV11111 (TITLE OF DOCUMENT) / J r Dom' �1�a/mac vz� o This page added to prpvide adequate space for recording information (Additional recording fee applies)