HomeMy WebLinkAboutDanco 2021-03-08 DISPOSITION AGREEMENT
This Disposition Agreement (the "Agreement"), is entered into as of March 8, 2021
("Effective Date") by and between the City of Ukiah, a municipal corporation (the "City"), and
Danco Communities, a California corporation ("Danco Communities" or the "Developer")
with reference to the following facts,understandings and intentions of the parties:
RECITALS
A. These Recitals refer to and utilize certain capitalized terms defined in Article 1.
The parties intend to refer to those definitions in connection with the use of capitalized terms in
these Recitals.
B. The City is the fee owner of certain unimproved real property located in the City,
as more particularly described in the legal description in Exhibit A attached hereto(the "Site").
The City selected Developer to be the developer of the Site. The parcels are designated with the
following APNs:003-040-77; 003-040-78; 003-040-79.
C. The City desires to convey the Site to Developer, together with rights, privileges,
easements, servitudes and appurtenances thereto (the "Property" as further defined in Article 1
for development of approximately 71 dwelling units for lease to qualifying lower income tenants
including one market rate manager's unit and approximately 1,932 square feet of commercial
space and associated infrastructure such as, but not limited to, roads, driveways, parking areas,
drainage facilities, and necessary facilities for the provision of utility services, including water,
sewer, electricity, natural gas and solid waste collection (collectively, the "Improvements", and
together with the Property, the "Project").
D. The attached Exhibit B is a conceptual site plan for development of the Site (the
"Conceptual Site Plan") showing the general design and layout of the Project on the Site, and
also showing the general location and boundaries of the Property.
E. To facilitate the development of the Project, as reflected in this Agreement, the
City has agreed to sell the Property to Developer as described in Article 2 below. As a condition
of the sale, the Developer will maintain and operate the Development in accordance with Health
and Safety Code Sections 33334.2 et seq., 33413(a) and 33413(b)(2)(A)(ii). Developer and the
City will enter into a regulatory agreement(the "City Regulatory Agreement")that will restrict
one hundred percent(100%) of the units (except the manager's unit) to lower-income households
earning no more than eighty percent (80%)of area median income.
F. The Developer intends to finance the remainder of the costs of development from
certain loans, grants and investor capital contributions. In connection with such financing, the
Developer will form a limited partnership (the "Partnership") that has Developer or its affiliate
as the administrative general partner. Upon or before the transfer of the Property to the
Developer in accordance with this Agreement, the Developer intends to assign all of its rights,
title, interest and obligations under this Agreement and its accompanying exhibits to the
Partnership. Upon such assignment, all references to the Developer hereunder shall be a
reference to the Partnership.
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G. The City has determined that the Developer has the necessary expertise, skill and
ability to carry out the commitments set forth in this Agreement and that this Agreement is in the
best interests of the City.
NOW, THEREFORE, the City and the Developer agree as follows:
ARTICLE 1
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, the following definitions shall apply throughout this Agreement.
(a) "Actually known to the City" or"actual knowledge" means
information possessed by a City officer or employee which has been reduced to writing and
retained as a permanent record of the City.
(b) "City Council" means the governing body of the City.
(c) "City Deed of Trust" means the deed of trust in favor of the City by the
Partnership, substantially in the form of Exhibit G attached hereto, to be recorded against the
Property.
(d) "City Grant Deed" means the grant deed of the Property to the
Developer, substantially in the form of Exhibit D.
(e) "City Note" means the promissory note issued by the Partnership to the
City, substantially in the form of Exhibit F attached hereto.
(f) "City Regulatory Agreement" means the Regulatory Agreement and
Declaration of Restrictive Covenants, substantially in the form of Exhibit C, to be recorded
against the Property pursuant to Section 4.3, which shall impose income limitations on tenants of
the residential units in the Project.
(g) "City" means the City of Ukiah.
(h) "Construction Plans" means all construction documentation upon which
the Developer and the Developer's contractors shall rely in building each and every part of the
Project(including landscaping, parking, and common areas) and a time schedule for
construction.
(i) "Developer" means Danco Communities, and its successors and assigns
as permitted by this Agreement.
0) "Escrow" means the escrow established with the Escrow Company for
the purpose of conveying the Property from the City to the Developer.
(k) "Escrow Company" means Commonwealth Land Title Insurance
Company.
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(1) "Event of Default" has the meaning set forth in Section 6.3 or 6_4 as
applicable.
(m) "Hazardous Materials" means:
(i) any "hazardous substance"as defined in Section 101(14) of
Comprehensive Environmental Response, Compensation, and Liability Act 1980 ("CERCLA")
(42 U.S.C. Section 9601(14))or Section 25281(d) or 25316 of the California Health and Safety
Code at such time;
(ii) any "hazardous waste," "infectious waste" or"hazardous
material" as defined in Section 25117, 25117.5 or 255010) of the California Health and Safety
Code at such time;
(iii) any other waste, substance or material designated or regulated
in any way as "toxic"or"hazardous" in the RCRA (42 U.S.C. Section 6901 et seq.), CERCLA
Federal Water Pollution Control Act(33 U.S.C. Section 1521 et seq.), Safe Drinking Water Act
(42 U.S.C. Section 3000 (f) et seq.),Toxic Substances Control Act (15 U.S.C. Section 2601 et
seq.), Clear Air Act (42 U.S.C. Section 7401 et seq.), California Health and Safety Code
(Section 25100 et seq., Section 3900 et seq.), or California Water Code(Section 1300 et seq.) at
such time; and
(iv) any additional wastes, substances or material which at such
time are classified, considered or regulated as hazardous or toxic under any other present or
future environmental or other similar laws relating to the Project.
The term "Hazardous Materials" shall not include: (i) construction materials,
gardening materials, household products, office supply products or janitorial supply products
customarily used in the construction, maintenance, rehabilitation, or management of residential
property or associated buildings and grounds, or typically used in household activities, or(ii)
certain substances which may contain chemicals listed by the State of California pursuant to
California Health and Safety Code Sections 25249.8 et seq., which substances are commonly
used by a significant portion of the population living within the region of the Project, including,
but not limited to, alcoholic beverages, aspirin, and tobacco products.
(n) "Hazardous Materials Laws" means all federal, state, and local laws,
ordinances, regulations, orders and directives pertaining to Hazardous Materials in, on or under
the Project or any portion thereof.
(o) "Improvements" has the meaning in Recital C, to be managed in
accordance with Exhibit C.
(p) "Load' has the meaning set forth in Section 3.4 hereof.
(q) "Management Agent" means Danco Communities or other management
agent retained by Developer and approved by the City in accordance with the provisions of
Section 5.14 to manage the Improvements.
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Disposition Agreement Danco-City of Ukiah 2021
(r) "Outside Date" means December 31, 2022.
(s) "Partnership" means the limited partnership formed to own the Project
that will have Developer or its affiliate, as approved by the City Manager or his.'her designee, as
the administrative general partner.
(t) "Project" has the meaning given in Recital C.
(u) "Property" means the real property described in Paragraph C in the
Recitals to be transferred to and developed by the Developer pursuant to this Agreement.
(v) `'Site" has the meaning defined in Recital B.
(w) "Term" means the term of this Agreement, which shall consist of the
period commencing on the Effective Date and continuing until the Outside Date; provided,
however, that the Term shall extend until the Developer has fully complied with the provisions in
Articles 4 and 5 of this Agreement.
(x) "Title Company" means Commonwealth Land Title Insurance Company.
(y) "Transfer" has the meaning set forth in Section 7.1.
Section 1.2 Exhibits. The following exhibits are attached to and incorporated in
the Agreement:
Exhibit A: Legal Description of the Site
Exhibit B: Conceptual Site Plan
Exhibit C: Form of City Regulatory Agreement
Exhibit D: Form of Grant Deed
Exhibit E: Public Utilities Easement
Exhibit F: Form of City Note
Exhibit G: Form of City Deed of Trust
ARTICLE 2
PREDISPOSITION_REQUIREMENTS
Section 2.1 Conditions Precedent to Disposition of Property. The requirements
set forth in this Article 2 are conditions precedent to the City's obligations to convey the
Property to the Developer and make the Loan. Except as such date may be extended pursuant
to Section 10.3, the City's obligation to convey the Property to the Developer shall be subject
to the satisfaction of all such conditions precedent prior to the Outside Date, unless a later date
is mutually agreed upon by the City's City Manager and the Developer. Additional conditions
precedent to the City's obligation to convey the Property are set forth in Sections 3.4 and 3.5.
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Section 2.2 Ri ht of Entry to Perform Studies.
(a) Compliance with the California Environmental Quality Act ("CEQA"). At
Developer's expense, the City has certified the appropriate environmental review documents
required by CEQA and the certification has become final and not subject to judicial review. No
provision of this Agreement shall be deemed to limit in any way the exercise of the City's
discretion in reviewing and certifying environmental documents or in exercising its authority to
adopt or amend zoning ordinances, land use and subdivision approvals or other exercises of its
local police powers. The Developer shall execute and comply with the City's standard agreement
requiring the Developer to indemnify and defend the City in any action to review, set aside or
annul decisions made by the City to comply with CEQA or other land use or subdivision
approvals made by the City in connection with the Developer's pursuit of the Project.
(b) Temporary Right of Entry. The City hereby grants a right of entry to the
Property to the Developer and its agents, contractors and subcontractors for the sole purposes of
performing a land survey, and conducting soils and other testing which require access to the
Property(the "Temporary Right of Entry"). The Developer agrees at all times to keep the
Property free and clear of all liens, encumbrances, and clouds upon title that could result from
the exercise of the Temporary Right of Entry.
(c) Indemnity. Without limiting the generality of the indemnification set forth
in Section 10.7, the Developer agrees to indemnify, defend, and hold the City harmless against
all claims, including but not limited to mechanics liens and personal or property damage, arising
from the entry of the Developer or its agents, employees, contractors or subcontractors onto the
Property, or created as a result of the exercise of this Temporary Right of Entry. The Developer
further agrees that all survey and testing work performed pursuant to this Temporary Right of
Entry shall be made at the Developer's sole cost. If Developer fails to purchase the Property
from the City and this Agreement is terminated, Developer shall restore the Property to the
condition it was in before the Developer performed any soils or other testing pursuant to Section
2.2(b),
ARTICLE 3
DISPOSITION OF PROPERTY
Section 3.1 Sale and Purchase of Property. Provided the pre-disposition
requirements set forth in Article 2, and the additional closing conditions set forth in Section 3.4
and Article 4 have been satisfied, the City shall sell the Property to the Developer, the
Developer shall purchase the Property from the City, and the City shall make the Loan
pursuant to the terms, covenants, and conditions of this Agreement.
Section 3.2 Purchase Price. The purchase price for the Property shall be One
Million Six Hundred Twenty Thousand Dollars ($1,620,000) (`Purchase Price"). The City
shall loan the Purchase Price to the Developer(the "Loan"), which Loan shall be evidenced by
a promissory note from the Partnership in favor of the City substantially in the form attached
hereto as Exhibit F (the "City Note") having a term of 55 years and bearing simple interest at
3% which shall be repayable solely from, and to the extent of, no less than 80% of Project net
cash flow in the priority to be set forth in the Partnership's Amended and Restated Agreement
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Disposition Agreement Danco-City of Ukiah?Of 1
of Limited Partnership(the "Partnership Agreement"). The Loan shall be secured by a
subordinate deed of trust encumbering the Project substantially in the form attached hereto as
Exhibit G. The Developer shall use commercially reasonable best efforts to apply for
additional sources of soft subsidies to finance the development of the Project ("Additional
Subsidy"). Subject to the requirements of the California Tax Credit Allocation Committee
("CTCAC") and the Project's senior lender. Developer hereby agrees to reduce the amount of
the Loan by the amount of the Additional Subsidy and the City and Developer shall amend this
Agreement accordingly. Developer intends to submit an application to CTCAC for an
allocation of 9% low-income housing tax credits to finance the Project in the first allocation
round of 2021. If such application is unsuccessful, Developer and the City shall meet and
confer in good faith to determine if changes to this Agreement are necessary to improve the
competitiveness of future applications and shall make such changes to this Agreement as are
mutually agreed upon between the City and the Developer.
Section 3.3 Opening,Escrow. To accomplish the purchase and sale of the
Property from the City to the Developer, the parties shall establish the Escrow with the Escrow
Company. The parties shall execute and deliver all written instructions to the Escrow
Company to accomplish the terms hereof, which instructions shall be consistent with this
Agreement.
Section 3.4 Close of Escrow for the Property. Escrow for the conveyance of the
Property shall close on a date mutually acceptable to the parties, prior to the Outside Date. The
City shall convey the Property to the Developer by executing and delivering the City Grant
Deed to the Developer, substantially in the form of Exhibit D.
In addition to the conditions precedent to conveyance set forth in Article 2, the following
conditions shall be satisfied prior to or concurrently with, and as conditions of, conveyance of
the Property by the City to the Developer:
(a) The Developer shall provide the City with certified copies of corporate
authorizing resolutions authorizing the purchase of the Property.
(b) The Developer shall have furnished the City with evidence of the
insurance coverage meeting the general insurance requirements set forth in Section 6.8.
(c) The City Regulatory Agreement and City Deed of Trust shall have been
recorded against the Property, as liens subject only to the exceptions authorized by this
Agreement.
(d) The Developer shall have provided documentation to the City that
Developer has commitments for all loans needed to construct the Project and a reservation of low
income housing credits from CTCAC.
(e) There shall exist no condition, event or act which would constitute a
material breach or default under this Agreement or which, upon the giving of notice or the
passage of time, or both, would constitute such a material breach or default.
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(f) All representations and warranties of the Developer contained in this
Agreement shall be true and correct in all material respects as of the close of Escrow.
Section 3.5 Condition of Title.
(a) Upon the close of Escrow on the Property, the Developer or its permitted
assignee hereunder shall have insurable fee title to the Property which shall be free and clear of
all liens, encumbrances, clouds and conditions, rights of occupancy or possession, except:
(i) applicable building and zoning laws and regulations;
(ii) the provisions of this Agreement;
(iii) the provisions of the City Regulatory Agreement and City
Deed of Trust;
(iv) any lien for current taxes and assessments or taxes and
assessments accruing subsequent to recordation of the City Grant Deed;
(v) a public utility easement as described in the attached Exhibit E;
and
(vi) conditions, covenants, restrictions or easements shown as
exceptions in the preliminary title reports for the Property approved by the Developer, which
approval shall not be unreasonably withheld.
Section 3.6 Condition of Property.
(a) The City hereby represents and warrants that without any obligation to
investigate and without having undertaken any such investigation, other than as reported in the
Report of Findings for the Phase I1 Environmental Site Assessment at 2 10 East Gobbi Street
(APN 003-040-78-00), Ukiah, Mendocino County, dated July 19, 2019, a copy of which has
been provided to Developer, it has no actual knowledge, that any release of hazardous substances
has come to be located on or beneath the Property.
(b) The City and the Developer understand and agree that the Property shall
be accepted "as is" by the Developer and that the City shall in no way be responsible for
demolition, site preparation or any other removal or replacement of improvements thereon. The
Developer agrees to accept conveyance of the Property in its present condition "as is"and
without representation or warranty from the City except as set forth in subsection (a) above, with
respect to the condition of the Property including, but not limited to, the condition of the soil,
presence of hazardous materials or contaminants, and all other physical characteristics. The
Developer has performed and relies solely upon its own independent investigation concerning
the physical condition of the Property or compliance of the Property with any statutes,
ordinances, rules or regulations.
(c) If after conveyance of the Property, the conditions of the Property are not
in all respects entirely suitable for the use or uses to which the Property will be put as described
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Disposition Agreement Danco-City of Ukiah 2021
in this Agreement, then it is the sole responsibility and obligation of the Developer to correct any
soil conditions, correct any subsurface condition, correct any structural condition, demolish any
improvements and otherwise put the Property in a condition suitable for the Project to be
constructed pursuant to this Agreement. The Developer hereby waives any right to seek
reimbursement or indemnification from the City of the Developer costs related to correction of
any physical conditions on the Property except to the extent such costs are related to hazardous
materials conditions actually known to the City but not disclosed pursuant to subsection (a)
above.
Section 3.7 Costs of Escrow and Closing. Ad valorem taxes, if any, shall be
prorated as of the date of conveyance. All costs of closing the conveyance of the Property,
including but not limited to, the cost of title insurance, transfer tax, Title Company document
preparation, recordation fees and the escrow fees of the Title Company and Escrow Company
shall be paid by the Developer.
PREDEVELOPMENT AND CONSTRUCTION OF IMPROVEMENTS
Section 4.1 Final Development Plans, The Developer has applied or intends to
apply for approval by the City of the development plans for the Project (the approved
development plans shall be referred to as the "Final Development Plans"). Developer shall
provide a copy of the Final Development Plans to the City.
Section 4.2 Other Governmental Approvals. Promptly following City approval
of the Final Development Plans, the Developer shall apply for and exercise diligent good faith
efforts to obtain all other governmental approvals, including but not limited to any applicable
use or site development and building permits necessary for development and operation of the
Project..
Section 4.3 Construction Pursuant to Laws. The Developer shall cause all work
performed in connection with the Project to be performed in compliance with all applicable
laws, ordinances, rules and regulations of federal, state, county or municipal governments or
agencies, including, if applicable, the prevailing wage provisions set forth in Section 5.11.
Each element of the work shall proceed only after procurement of each permit, license, or other
authorization that may be required for such element by any governmental agency having
jurisdiction, and the Developer shall be responsible to the City for the procurement and
maintenance thereof, as may be required of the Developer and all entities engaged in work on
the Project.
Section 4.4 Equal Ormortunity. During the construction of the Project there shall
be no discrimination on the basis of race, color. creed, religion, sex, sexual orientation, marital
status, age, national origin or ancestry in the hiring, firing, promoting or demoting of any
person engaged in the construction work.
Disposition Agreement Danco-City of Uktah.2021
Section 4.5 Prevailinl? Wares. As material consideration to the City for entering
into this Agreement, Developer agrees that, to the extent state law requires prevailing wages to
be paid on the Project, Developer's construction contract with its general contractor for the
initial Improvements and any replacement improvements or any material alterations or new
construction on the Premises shall require the general contractor(and all subcontractors) to pay
the then general prevailing rate of per diem wages, in the locality where said work is being
performed, as ascertained by the California Department of Industrial Relations for each craft,
classification or type of worker employed to perform the work. The City acknowledges that
the Developer has determined that the payment of prevailing wages is not necessary for the
construction of the Project.
Section 4.6 Developer Fee. Developer shall be entitled to a developer fee in an
amount not exceeding the maximum amount allowed by California Tax Credit Allocation
Committee.
Section 4.7 Management Amement. Developer is hereby approved as the initial
Management Agent for the Project. Upon request, Developer shall provide the City with a
copy of the management agreement.
ARTICLE 5
ONGOING DEVELOPER OBLIGATIONS
Section 5.1 Applicability. The conditions and obligations set forth in this Article
5 shall apply after conveyance of the Property to the Developer throughout the term of the
Regulatory Agreement, unless a shorter period of applicability is specified for a particular
condition or obligation.
Section 5.2 Use. The Developer hereby agrees that, for the entire term of the
Regulatory Agreement, the Project will be used only for residential use consistent with the City
Regulatory Agreement and the Final Development Plans,
Section 5.3 Mandatory Language in All Subsequent Deeds, Leases and
Contracts.
(a) Basic Requirement. The Developer covenants by and for itself, its
successors and assigns that, there shall be no discrimination against or segregation of a person or
of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital
status, age, national origin, ancestry or disability in the sale, lease, sublease transfer, use,
occupancy, tenure or enjoyment of the Project nor shall the Developer or any person claiming
under or through the Developer establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the Project. The foregoing covenant
shall run with the land.
Notwithstanding any provision of this Agreement to the contrary, with respect to familial
status, Section 6.6(a) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the California Government Code and shall not be construed to affect Sections
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51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the California Civil Code relating to housing for
senior citizens.
(b) Provisions In Conveyance Documents. All deeds, leases or contracts
made or entered into by the Developer, its successors or assigns, as to any portion of the Property
shall contain therein the following language:
(i) In Deeds:
"Grantee herein covenants by and for itself, its successors and assigns that there
shall be no discrimination against or segregation of a person or of a group of
persons on account of race, color, creed, religion, sex, sexual orientation, marital
status, age, national origin, ancestry or disability in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor
shall the grantee or any person claiming under or through the grantee establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the property herein conveyed. The foregoing
covenant shall run with the land."
(ii) In Leases:
"The lessee herein covenants by and for the lessee and lessee's heirs, personal
representatives and assigns and all persons claiming under the lessee or through
the lessee that this lease is made subject to the condition that there shall be no
discrimination against or segregation of any person or of a group of persons on
account of race, color, creed, religion, sex, sexual orientation, marital status, age,
national origin, ancestry or disability in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the land herein leased nor shall the lessee or
any person claiming under or through the lessee establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the land herein leased."
(iii) In Contracts:
"There shall be no discrimination against or segregation of any person or group of
persons on account of race, color, creed, religion, sex, sexual orientation, marital
status, age, national origin or ancestry or disability in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the property nor shall the
transferee or any person claiming under or through the transferee establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the land."
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Section 5.4 Hazardous Materials.
(a) Certain Covenants and Agreements. The Developer hereby covenants and
agrees that:
G) The Developer shall not knowingly permit the Project or any
portion thereof to be a site for the use, generation, treatment, manufacture, storage, disposal or
transportation of Hazardous Materials or otherwise knowingly permit the presence of Hazardous
Materials in, on or under the Project.
(ii) The Developer shall keep and maintain the Project and each
portion thereof in compliance with, and shall not cause or permit the Project or any portion
thereof to be in violation of, any Hazardous Materials Laws.
(iii) Upon receiving actual knowledge of the same, the Developer
shall immediately advise the City in writing of (A) any and all enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or threatened against the
Developer or the Project pursuant to any applicable Hazardous Materials Laws; (B) any and all
claims made or threatened by any third party against the Developer or the Project relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous
Materials (the matters set forth in the foregoing clause (A) and this clause(B) are hereinafter
referred to as "Hazardous Materials Claims"); (C) the presence of any Hazardous Materials in,
on or under the Project; or(D) the Developer discovery of any occurrence or condition on any
real property adjoining or in the vicinity of the Project classified as "borderzone property" under
the provisions of California Health and Safety Code, Sections 25220 et seq., or any regulation
adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership,
occupancy, transferability or use of the Project under any Hazardous Materials Laws. The City
shall have the right to join and participate in, as a party if it so elects, any legal proceedings or
actions initiated in connection with any Hazardous Materials Claims, and to have its reasonable
attorney's fees in connection therewith paid by the Developer.
(iv) Without the City's prior written consent, which shall not be
unreasonably withheld, and which the City shall promptly grant or deny, the Developer shall not
take any remedial action in response to the presence of any Hazardous Materials on, under, or
about the Project(other than in emergency situations or as required by governmental agencies
having jurisdiction in which case the City agrees to provide its consent), nor enter into any
settlement agreement, consent decree, or other compromise in respect to any Hazardous
Materials Claims.
(b) Indemnity. Without limiting the generality of the indemnification set forth
in Section 7.4, the Developer hereby agrees to indemnify, protect, hold harmless and defend (by
counsel reasonably satisfactory to the City), the City, its City Council members, officers, and
employees from and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders,judgments, remedial action
requirements, enforcement actions of any kind, and all costs and expenses incurred in connection
therewith(including, but not limited to, the fees and expenses of attorneys, experts, consultants
or investigators), arising directly or indirectly, in whole or in part, out of: (1) the failure of the
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Developer or its employees, agents, contractors or subcontractors to comply with any Hazardous
Materials Law relating in any way whatsoever to the handling, treatment, presence, removal,
storage, decontamination, cleanup, transportation or disposal of Hazardous Materials into, on,
under or from the Project; (2)the presence in, on or under the Project of any Hazardous
Materials or any releases or discharges of any Hazardous Materials into, on, under or from the
Project occurring from and after Developer's acquisition of the Property; or(3) except to the
extent such costs are related to hazardous materials conditions actually known to the City but not
disclosed pursuant to Section 3.6(a), any activity carried on or undertaken on or off the Property,
prior or subsequent to the conveyance of the Property to the Developer and whether by the
Developer or any employees, agents, contractors or subcontractors of the Developer, in
connection with the handling, treatment, removal, storage, decontamination, cleanup, transport or
disposal of any Hazardous Materials at any time located or present on or under the Property
provided, however, that the indemnification for activities undertaken off the Property shall only
apply to activities undertaken by the Developer or its employees, agents, contractors or
subcontractors. The foregoing indemnity shall further apply to any residual contamination on or
under the Project, or affecting any natural resources, and to any contamination of any property or
natural resources arising in connection with the generation, use, handling, treatment, storage,
transport or disposal of any such Hazardous Materials, and irrespective of whether any of such
activities were or will be undertaken in accordance with Hazardous Materials Laws.
(c) No Limitation. The Developer hereby acknowledges and agrees that the
Developer's duties, obligations and liabilities under this Agreement, including, without
limitation, under subsection (b) above, are in no way limited or otherwise affected by any
information the City may have concerning the Project and/or the presence within the Project of
any Hazardous Materials, whether the City obtained such information from the Developer or
from its own investigations, unless such information was actually known to the City at the time
of execution of this Agreement and/or the time of the close of escrow for the conveyance of the
Property to the Developer but not disclosed pursuant to Section 3.6(a).
Section 5.5 Insurance Requirements.
(a) Required Coverage. The Developer and its successors and assigns to the
Property pursuant to this Agreement shall maintain and keep in force, at the Developer(or its
successors') sole cost and expense, the following insurance applicable to the Project:
(i) Worker's Compensation insurance, including Employer's
Liability coverage, with limits not less than One Million Dollars($1,000,000) each accident, to
the extent required by law, which must be increased if required by California Workers'
Compensation Laws; provided, however, that if the Developer does not have employees, then no
such insurance shall be required.
(ii) Comprehensive General Liability insurance with limits not less
than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury
and Property Damage, including coverages for Contractual Liability, Personal Injury, Broad
Form Property Damage, Products and Completed Operations(this requirement maybe satisfied
by Comprehensive General Liability insurance with limits not less than One Million Dollars
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($1,000,000) each occurrence and umbrella coverage providing the remaining One Million
Dollars ($1,000,000) of coverage).
(iii) Comprehensive Automobile Liability insurance with limits not
less than One Million Dollars($1,000,000) each occurrence combined single limit for Bodily
Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as;
provided, however, that if the Developer does not own or lease vehicles for purposes of this
Agreement, then no automobile insurance shall be required.
(iv) After completion of construction, property insurance covering
the Project covering all risks of loss (other than earthquake), including flood (if required), for
one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the
City, naming the City as Loss Payees, as its interest may appear.
(v) During construction of the Improvements, Builder's Risk
insurance in an amount required by the Construction Lender.
(vi) Insurance policy limits shall be subject to an increase,
whenever the CPI increases by more than 10%over the base year or over the year of the most
recent adjustment in the policy limit. "CPI" means the Consumer Price Index For San Francisco-
Oakland-Hayward, CA, All Items (base year 1982-1984— 100), published by the United States
Department of Labor, Bureau of Labor Statistics. "Base year" means the first full year after the
Effective Date. "Year of the most recent adjustment" means the year in which the policy limit
was most recently increased based on the CPI. The CPI in any year shall be the average monthly
CPI for that year.
(b) Contractor's Insurance. The Developer shall cause any general contractor
or agent working on the Improvements under direct contract with the Developer to maintain
insurance of the types and in at least the minimum amounts described in subsections(a)(i),
JaILD, and a iii above, and shall require that such insurance shall meet all of the general
requirements of subsection(c) below. Subcontractors working on the Project under indirect
contract with the Developer shall be required to maintain the insurance described in subsections
a i , fqj(D and f&ijij above, except that the Comprehensive General Liability insurance limits
shall not be less than One Million Dollars ($1,000,000)each occurrence combined single limit.
Liability and Comprehensive Automobile Liability insurance to be maintained by such
contractors and agents pursuant to this subsection shall name as additional insureds the City, the
City Council, and their officers, agents, and employees.
(c) General Requirements. The required insurance shall be provided under an
occurrence form, and the Developer shall maintain such coverage continuously throughout the
term of the Regulatory Agreement. Should any of the required insurance be provided under a
form of coverage that includes an annual aggregate limit or provides that claims investigation or
legal defense costs be included in such annual aggregate limit, such annual aggregate limit shall
be three times the occurrence limits specified above.
13
Disposition Agreement Danco-City or MAIM
Comprehensive General Liability, Comprehensive Automobile Liability and Property
insurance policies shall be endorsed to name as additional insureds the City and its City Council
members, officers, agents, and employees.
All policies and bonds shall be endorsed to provide thirty(30) days prior written notice of
cancellation, reduction in coverage, or intent not to renew to the address established for notices
to the City pursuant to Section 7.1.
(d) Certificates of Insurance. Upon the City's request at any time during the
term of the Regulatory Agreement, the Developer shall provide certificates of insurance and
policy endorsements or complete insurance policies, in form and with insurers reasonably
acceptable to the City, evidencing compliance with the requirements of this Section.
ARTICLE 6
DEFAULT AND REMEDIES
Section 6.1 General Applicability. The provisions of this Article 6 shall govern
the parties' remedies for breach or failure of this Agreement.
Section 6.2 No Fault of Parties. The following events constitute a basis for a
party to terminate this Agreement without the fault of the other:
(a) The Developer, despite good faith and diligent efforts, is unable to satisfy
all of the conditions precedent to the City's obligation to convey the Property to the Developer,
set forth in Article 2 by the Outside Date or if Developer determines in its sole discretion that(i)
the Property is not suitable for the development of the Project or(ii) it will be unable to obtain
the financing and/or land-use approvals needed to construct the Project, by not later than the
Outside Date or such later date mutually agreed upon by the City and the Developer; or
(b) The City, despite good faith and diligent efforts, is unable to convey the
Property to the Developer, and the Developer is otherwise entitled to such conveyance.
Upon the happening of any of the above-described events. and at the election of any party, this
Agreement may be terminated by written notice to the other party. After termination, neither
party shall have any rights against nor liability to the other party under this Agreement, except
that the indemnification provisions of Sections 2.2(c), 5.4)(b) and 7_4 shall survive such
termination and remain in full force and effect.
Section 6.3 Fault of City. The following events each constitute an Event of
Default by the City and a basis for the Developer to take action against the City:
(a) The City, without good cause and without making good faith and diligent
efforts, fails to convey the Property to the Developer within the time and in the manner set forth
in Article 3, and the Developer is otherwise entitled by this Agreement to such conveyance; or
(b) The City breaches any other material provision of this Agreement.
Disposition Agreement Danco-City of Ukiah 2021 14
Upon the happening of any of the above-described events, the Developer shall first notify
the City in writing of its purported breach or failure, giving the City sixty(60) days from receipt
of such notice to cure or, if cure cannot be accomplished within sixty(60)days, to commence to
cure such breach, failure, or act. In the event the City does not then so cure within said sixty(60)
days, or if the breach or failure is of such a nature that it cannot be cured within sixty(60) days,
the City fails to commence to cure within such sixty(60) days and thereafter diligently complete
such cure within a reasonable time thereafter but in no event later than one hundred twenty(120)
days, then the Developer shall be afforded all rights and remedies available at law or in equity.
Notwithstanding the foregoing, in the event that an event of default by the City occurs after the
receipt by Developer of a tax credit reservation, the cure periods herein shall not apply, and
Developer shall have the immediate right to seek to compel the City's specific performance
hereunder.
Section 6.4 Fault of the Developer. Except as to events constituting a basis for
termination under Section 6.2, and except with respect to the exercise of the City's police
powers, and provided that the City has satisfied its obligations hereunder with respect to
conveying title to the Property and giving consents and approvals under the terms of this
Agreement, as reasonably requested by Developer, the following events in subsections (a)
through(d)below, shall each constitute an Event of Default by the Developer and a basis for
the City to take action against the Developer:
(a) The Developer fails to exercise good faith and diligent efforts to satisfy
one or more of the conditions precedent to the City's obligation to convey the Property to the
Developer; or
(b) The Developer refuses to accept conveyance from the City of the
Property; or
(c) Any representation or warranty contained in this Agreement or in any
application, financial statement, certificate or report submitted to the City in connection with this
Agreement proves to have been incorrect in any material and adverse respect when made and
continues to be materially adverse to the City; or
(d) Developer is in material breach of any other provision of this Agreement;
or
(e) A court having jurisdiction shall have made or entered any decree or order
(1) adjudging the Developer to be bankrupt or insolvent, (2) approving as properly filed a
petition seeking reorganization of the Developer or seeking any arrangement for either of the
Developer under the bankruptcy law or any other applicable debtor's relief law or statute of the
United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or
assignee of the Developer in bankruptcy or insolvency or for any of its properties, or(4)
directing the winding up or liquidation of the Developer. The occurrence of any of the Events of
Default in this subsection (e) shall not be subject to the cure rights set forth below.
(0 Remedies. Upon the happening of any of the above-described events,the
City shall first notify the Developer in writing of its purported breach, failure or act above
15
Disposition Agreement Danco-City of Ukiah 2021
described, giving the Developer sixty(60) days from receipt of such notice to cure, or, if cure
cannot be accomplished within said sixty(60) days, to commence to cure such breach, failure, or
act. In the event the Developer fails to cure within said sixty(60)days, or if such breach is of a
nature that it cannot be cured within sixty(60) days, the Developer fails to commence to cure
within said sixty(60) days and diligently complete such cure within a reasonable time thereafter
but in no event later than one hundred twenty(120) days, then, the City shall be afforded all of
the rights and remedies available under law or in equity.
ARTICLE 7
GENERAL PROVISIONS
Section 7.1 Notices, Demands and Communications. Formal notices, demands,
and communications between the City and the Developer shall be sufficiently given if and shall
not be deemed given unless dispatched in writing and (a) addressed as follows and(b)
delivered in one of the following ways, and shall be deemed to have been delivered or received
(i) five (5)days after the date when deposited in the United States registered or certified mail,
return receipt requested, with postage prepaid (except in the event of a postal disruption, by
strike or otherwise, in the United States), or(ii) when personally delivered, (iii) when sent by
email, provided a read receipt was promptly confirmed in writing by another means of notice
allowed in this Section 7.1, or (iv) one business day after the date deposited with the courier
when sent by personal delivery by a nationally recognized courier service(e.g., Federal
Express) for next day delivery. The current addresses and email addresses of the City and the
Developer are as follows:
City:
City of Ukiah
Ukiah Civic Center
300 Seminary Avenue
Ukiah, CA 95482
Fax 707-463-6204
Attn:
Developer:
Danco Communities
5251 Ericson Way
Arcata, CA 95521
Attn: Chris Dart (cdart`zz danco-group.com)
When the Agreement is assigned to a Partnership pursuant to Section 7.14, then the City shall
send to the limited partner of the Partnership a copy of all notices of default and all other notices
that City sends to Developer and:-or the Partnership, at the address provided by any such limited
partner. The City shall accept a cure by such limited partner as a cure by the Developer and/or the
Partnership.
16
Disposition Agreement Danco-City of Ukiah 2021
Section 7.2 Non-Liabilityof City Officials,_Employees and Agents. No
member, official, employee or agent of the City shall be personally liable to the Developer, or
any successor in interest, in the event of any default or breach by the City or for any amount
which may become due to the Developer or successor or on any obligation under the terms of
this Agreement.
Section 7.3 Forced Delay. In addition to specific provisions of this Agreement,
performance by either party hereunder shall not be deemed to be in default where delays or
defaults are due directly or indirectly to war; insurrection; strikes or other labor unrest; lock-
outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; governmental restrictions or priority,
litigation(including suits filed by third parties concerning or arising out of this Agreement);
unseasonable weather or soils conditions which, in the opinion of the Developer' s contractors,
will necessitate delays; acts of the other party; acts or failure to act of any public or
governmental agency or entity(other than the acts or failure to act of the City) despite the
diligent and good faith efforts of the party claiming the delay; or any other causes (other than
the Developer's inability to obtain financing for the Project) beyond the control or without the
fault of the party claiming an extension of time to perform. An extension of time for any cause
will be deemed granted if notice by the party claiming such extension is sent to the other within
thirty (30) days from the date the party seeking the extension first discovered the cause and
such extension of time is not rejected in writing by the other party within ten(10) days of the
date the notice is deemed received under Section 7.1.
Section 7.4 General Indemnification. The Developer agrees to indemnify,
protect, hold harmless and defend (by counsel acceptable to the City) the City, the City Council
members, and their officers and employees, from all suits, actions, claims, causes of action,
costs (including attorney's fees), demands,judgments and liens arising out of the Developer's
performance or non-performance under any of the City Regulatory Agreement or this
Agreement, or any other agreement executed pursuant to the City Regulatory Agreement,
except as caused by the City's willful misconduct or gross negligence.
Section 7.5 Applicable Law. This Agreement shall be interpreted under and
pursuant to the laws of the State of California.
Section 7.6 No Brokers. All parties represent to the other parties that it has not
had any contact or dealings regarding the Property, or any communication in connection with
the subject matter of this transaction, through any real estate broker or other person who can
claim a right to a commission or finder's fee. If any broker or finder makes a claim for a
commission or finder's fee based upon a contact, dealings, or communications, the party
through whom the broker or finder makes this claim shall indemnify, defend with counsel of
the indemnified party's choice, and hold the indemnified party harmless from all expense, loss,
damage and claims, including the indemnified party's attorneys' fees, if necessary, arising out
of the broker's or finder's claim. The provisions of this section shall survive expiration of the
Term or other termination of this Agreement, and shall remain in full force and effect.
Section 7.7 Binding Upon Successors. This Agreement shall be binding upon
and inure to the benefit of the heirs, administrators, executors, successors in interest and
17
Disposition Agreement Danco-City of Uktah.2021
assigns of each of the parties hereto except that there shall be no Transfer of any interest by
any of the parties hereto except pursuant to the terms of this Agreement. Any reference in this
Agreement to a specifically named party shall be deemed to apply to any successor, heir,
administrator, executor or assign of such party who has acquired an interest in compliance with
the terms of this Agreement, or under law.
Section 7.8 Parties Not Co-Venturers. Nothing in this Agreement is intended to
or does establish the City and the Developer as partners, co-venturers, or principal and agent
with one another.
Section 7.9 Warranties. The City expresses no warranty or representation to the
Developer as to fitness or condition of the Property the subject of this Agreement for the
building or construction to be conducted thereon.
Section 7.10 Representations and Warranties.
(a) The City hereby covenants and warrants that it has full right, power and
authority to enter into this Agreement and to carry out all actions on its part contemplated by this
Agreement; that the execution and delivery of this Agreement were duly authorized by proper
action of the City and no consent, authorization or approval of the City Council or any board,
commission or person is necessary in connection with such execution and delivery or to carry out
all actions on the City's part contemplated by this Agreement, except as have been obtained and
are in full force and effect or are not required to be obtained until a later date; that the person
executing this Agreement on behalf of the City has full corporate authority to do so; and that this
Agreement constitutes the valid, binding and enforceable obligation of the City.
(b) The Developer hereby covenants and warrants: that the Developer is an
entity duly authorized and existing under California law; that the Developer is and shall remain
in good standing and qualified to do business in the State of California; that the Developer has
full right, power and authority to enter into this Agreement and to carry out all actions on its part
contemplated by this Agreement; that the execution and delivery of this Agreement were duly
authorized by proper action of the Developer and no consent, authorization or approval of any
person is necessary in connection with such execution and delivery or to carry out all actions on
the Developer's part contemplated by this Agreement_ except as have been obtained and are in
full force and effect or are not required to be obtained until a later date; that the person executing
this Agreement on behalf of the Developer has full corporate authority to do so; and that this
Agreement constitutes the valid, binding and enforceable obligation of the Developer.
Section 7.11 Complete Understanding of the Parties. This Agreement may be
executed in one or more duplicate originals, each of which shall be deemed to be an original.
This Agreement and the attached exhibits constitute the entire understanding and agreement of
the parties with respect to the matters set forth in this Agreement. This Agreement has been
jointly negotiated and drafted. The language of this Agreement shall be construed as a whole
according to its fair meaning, and not strictly for or against any Party.
18
Disposition Agreement Danco•City of Ukiah.2021
Section 7.12 Conflict With City Re ug latoEy Agreement. In the event of a conflict
between the terms of this Agreement and the City Regulatory Agreement, the terms of this
Agreement shall control to the extent of such conflict.
Section 7.14 Assignment. Developer shall be permitted to assign its interest in
this Agreement to the Partnership.
19
Disposition Agreement Danco-City of Ukiah.2021
IN WITNESS WHEREOF, the City,and the Developer have executed this Agreement in
triplicate on or as of the date first above written.
DEVELOPER:
DANCO COMMUNITIES, a California corporation
By:
Chris Dart
President
CITY OF UKIAH,a municipal corporation
By:
Print Name: S q e, Sanat&z oy^o
Title : M6t-h.aqe'K
19
Disposition Agreement Danco-City of Ukiah 2021
EXHIBIT A
Legal Description of the Site
All that certain real property situated in the County of Mendocino,State of California.more particularly described as follows:
Tract One:
Parcel One:
Commencing at a 1 1/4 inch iron pipe on the westerly right of way line of the Northwestern Pack Railroad at the southerly terminus of the
course"South 09'47'26"East,225.30 feet"as shown on a Parcel Map filed in Map Case2.Drawer 48,Page 25,Mendocino County
Records,the said iron pipe also marking the northeast corner of that4.68 acre parcel as shown on a Record of Survey map filed in Map Case
2,Drawer 22,Page 71,Mendocino County Records;thence South 82'25'02"West(Record South 82*15'08"West along the north line of the
said 4.68acre parcel 226,87 feet to the POINT OF BEGINNING:thence continuing along the said north line of the 4.68 acre parcel South
82'25'02"West,71.18 feet;thence leaving the said north line of the 4.68 acre parcel North 08'00'59"West,126.94 feet(Record North 08'
16'08"West 127.00 feet)to the southwest comer of Parcel 1 as shown on the said Parcel Map;thence along the west line of the said Parcel
1,North 07'51'10"West(Record North08'04'42"West),271.13 feet to the southerly right of way line of Gobbi Street as shown on the said
Parcel Map;thence North 72"49'02"East(Record North 72"39'31"East),102.29 feet;thence leaving the said southerly right of way line of
Gobbi Street South 62*0611"East,15.95 feet;thence from a tangent that bears South 14'10'15"East,along the arc of a curve to the right
with a radius of 375.00 feet,a central angle of 21*57'17"and an arc length oft 43,69 feet;thence along a reverse curve to the left with a
radius of 825.00 feet,a central angle of 15'22"00"and an are length of 221.26 feet;thence South 07'34'58"East,44.85 feet to the point of
beginning.
APN: 003-040.77
Parcel Two:
TOGETHER with,as an appurtenance to the above described parcel of land,a non-exclusive easement for ingress,egress and public utility
purposes more particularly described as follows:Commencing at a 1'/4 inch iron pipe on the westerly right of way line of the Northwestern
Pacific Railroad at the southerly terminus of the course"South 09'47'26"East,225.30 feet as shown on a Parcel Map filed in Map Case 2,
Drawer 48.Page 25,Mendocino County Records,the said iron pipe also marking the northeast comer of that 4.68 acre parcel as shown on a
Record of Survey map filed in Map Case 2,Drawer 22,Page 71,Mendocino County Records;thence South 82'25'02"West(Record South
82'1 5'08"West)along the north line of the said 4.68 acre parcel 176.87 feet to the POINT OF BEGINNING:thence continuing along the said
north line of the 4.68 acre parcel South 82'2602"West,50.00 feet;thence leaving the said north line of the 4.68 acre parcel North 07'34'58"
West,44,85 feel:thence along a curve to the right with a radius of 825.00 feet,a central angle of 15'22'00"and an arc length of221.26 feet;
thence along a reverse curve to the left with a radius of 375.00 feet,a central angle of 21'57'17"and an are length of 143.69 feet;thence
North 62'06'11"West,15.95 feet to the southerly right of way line of Gobbi Street;thence along the said southerly right of way I ne of Gobbi
Street North 72'49'02"East(Record North72'39'31"East),72.79 feet;thence leaving the said southerly right of way I'ne of Gobbi Street
South 28'51'04'West,15,92 feet;thence along a curve to the right with a radius of 425,00 feet,a central angle of 22'20'30"and an arc
length of 165.72 feet;thence along a reverse curve to the left with a radius of 775.00 feet,a central angle oft5'22'00"and an arc length of
207.86 feet;thence South 07'34'58"East,44,85 feet to the point of beginning.
Tract Two:
Parcel One:
Commencing at a 1 '/.inch iron pipe on the westerly right of way line of the Northwestern Pacific Railroad at the southerly term nus of the
course"South 09'47'26"East,225.30 feet"as shown on a Parcel Map filed in Map Case2,Drawer 48,Page 25,Mendocino County Records,
the said iron pipe also marking the northeast comer of that4.68 acre parcel as shown on a Record of Survey map filed in Map Case 2,
Drawer 22,Page 71,Mendocino County Records;thence North 09'37'32"West(Record North 09"47'26"West along the said westerly right
of way line of the Northwestern Pack Railroad,225.30 feet to the POINT OF BEGINNING:thence leaving the said westerly right of way line
of the Northwestern Pacific Railroad South 82"25'02"West,147.57 feet;thence from a tangent that bears North 05`52'15"East a ong the are
of a curve to the right with a radius of 775.00 feet,a central angle of 01'54'47"and an arc length of 25.88 feet;thence along a reverse curve
to the left with a radius of 425.00feet,a central angle of 22"20'30"and an arc length of 165.72 feet;thence North 28'51 '04"East. 15.92 feet
to the southerly right of way line of Gobbi Street;thence along the said southerly right of way line of Gobbi Street North72-49'02"East
(Record North 72'39'31"East),113.33 feet to the said westerly right of way line of the Northwestern Pacific Railroad:thence'saving the said
southerly right of way line of Gobbi Street and along the said westerly right of way line of the Northwestern Pacific Rai road,South 09'37'32"
East(Record South09'47'26"East),221.14 feet to the point of beginning.
APN: 003-040-78
Parcel Two:
TOGETHER with,as an appurtenance to the above described parcel of land,a non-exclusive easement for ingress,egress and public utility
purposes more particularly described as follows:Commencing at a 1 Y.inch iron pipe on the westerly right of way line of the Northwestern
Pacific Railroad at the southerly terminus of the course"South 09'47'26"East,225.30 feet as shown on a Parcel Map filed in Map Case 2,
Drawer 48,Page 25,Mendocino County Records,the said iron pipe also marking the northeast comer of that 4.68 acre parcel as shown on a
Record of Survey map filed in Map Case 2,Drawer 22,Page 71,Mendocino County Records;thence South 82'2602"West(Record South
82*15'08"West)along the north line of the said 4.68 acre parcel 176.87 feet to the POINT OF BEGINNING:thence cont nuing along the said
north line of the 4.68 acre parcel South 82'25'02"West,50.00 feet;thence leaving the said north line of the 4.68 acre parce North 07'34'58"
West,44.85 feet;thence along a curve to the right with a radius of 825.00 feet,a central angle of 15'22'00"and an are length of221 26 feet;
thence along a reverse curve to the left with a radius of 375.00 feet,a central angle of 21"57'17"and an arc length of 143 69 feet.thence
North 62'06'11"West,15.95 feet to the southerly right of way line of Gobbi Street;thence along the said southerly right of way line of Gobbi
21
Disposition Agreement Danco-City of Ukiah.2021
Street North 72-49'02"East; Record North72°39'31"East).72.79 feet:thence leaving the said southerly right of way line of Gobbi Street
South 28 51'04"West,15.92 feet;thence along a curve to the nght with a radius of 425.00 feet,a central angle of 22°20'30"and an arc
length of 165.72 feet;thence along a reverse curve to the left with a radius of 775.00 feet,a central angle of15"22'00"and an arc length of
207.86 feet:thence South 07°34'58"East,44.85 feet to the point of beginning.Tract Three:Parcel One:Beginning at a 1 V.inch iron pipe on
the westerly right of way ine of the Northwestern Pacific Railroad at the southerly terminus of the course"South 09'47'26"East,225.30 feet"
as shown on a Parcel Map filed in Map Case2,Drawer 48,Page 25,Mendocino County Records,the said iron pipe also marking the
northeast comer of that4.68 acre parcel as shown on a Record of Survey map fled in Map Case 2,Drawer 22.Page 71,Mendocino County
Records;thence leaving the said westerly right of way line of the Northwestern Pacific Railroad South82°25'02"West(Record South
82`11 5'08"West}along the north line of the said 4.68 acre parcel,176.87 feet;thence leaving the said north line North 07"34'58"West,44.85
feet;thence along a curve to the right with a radius of 775.00 feet,a central ang a of 13°27'13"and an arc length of 181.98 feet;thence
North 82'25'02"East, 147.57feet to the said westerly right of way line of the Northwestern Pack Railroad;thence South 09'37'32"
East(Record South 09"47'26"East)a ong the sa d wester y right of way line,225.30 feet to the point of beginning.
APN: 003-040-79
Parcel Two:
TOGETHER with.as an appurtenance to the above described parcel of land a non-exclusive easement for ingress,egress and public utility
purposes more particularly described as follows:Commencing at a 1 Y.inch ironpipe on the westerly right of way line of the Northwestern
Pacific Railroad at the southerly term nus of the course"South 09'4726"East,225.30 feet as shown on a Parcel Map filed in Map Case 2,
Drawer 48 Page 25.Mendocino County Records,the said iron pipe a so marking the northeast comer of that 4.68 acre parcel as shown on a
Record of Survey map fi ed'n Map Case 2. Drawer 22.Page 71 Mendocino County Records;thence 82°25'02"West(Record South
821508"West)along the north line of the said 4.68 acre parcel 176.87 feel to the POINT OF BEGINNING:thence continuing along the said
north line of the 4.68 acre parce'South 82'25'02"West,50.00 feet;thence leaving the said north line of the 4.68 acre parcel North 07"34'58"
West,44.85 feet thence along a curve to the right with a radius of 825 00 feet,a central angle of 15'22'00"and an arc length of221.26 feet;
thence along a reverse curve to the left with a radius of 375,00 feet,a central ang a of 21"57'17"and an arc length of 143.69 feet;thence
North 62'06'11"West 15.95 feet to the southerly right of way line of Gobbi Street;thence along the said southerly right of way line of Gobbi
Street North 72'49'02'East; Record North72°3911'East),72.79 feet.thence eaving the said southerly right of way line of Gobbi Street
South 28 51'04"West, 15.92 feet;thence along a curve to the right with a radius of 425.00 feet,a central angle of 22"20'30"and an arc
length of 165 72 feet;thence along a reverse curve to the left with a radius of 775.00 feet,a central angle oft 5"22'00"and an arc length of
207 86 feet;thence South 07°34'58"East.44.85 feet to the point of beginning
22
Disposition Agreement Danco-City of Ukiah.2021
EXHIBIT B
Conceptual Site Plan
23
Disposition Agreement Danco-City of Ukiah.2021
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EXHIBIT C
Form of City Regulatory Agreement
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Ukiah as Housing Successor
300 Seminary Avenue
Ukiah, CA 95482
Attn: Executive Director
No fee document pursuant to
Government Code Section 27383
REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement")
is made and entered into as of , 2021.1 by and between the City of Ukiah ("City"), a
general law city, acting in its capacity as the City's Housing Successor(the "Housing
Successor") and [Partnership] (the "Developer"). The Housing Successor and the Developer are
sometimes referred to in this Agreement individually as a "Party" and collectively as the
"Parties".
RECITALS
1. The Housing Successor has entered into a Disposition Agreement (the "Agreement") with
Developer under which the Housing Successor agrees to convey for fair market value
undeveloped land to Developer located in the City of Ukiah, County of Mendocino, more
particularly described in Exhibit A attached to and incorporated in this Agreement(the
"Property"). The Property will be used for construction and development of a mixed-use
affordable housing and commercial project.
2. The City acquired the Property using funds set aside for low- and moderate-income
housing and the Developer financed the acquisition of the Property with a seller carryback loan
from the City (the "Loan"). The City has determined that the terms of the Loan assure the
recovery of the City's investment and a reasonable interest rate to allow City to use the full value
of its investment for low- and moderate- income housing in compliance with legal requirements.
24
Disposition Agreement Danco-City of Ukiah 2021
3. The expenditure of monies to acquire the Property and convey it to the Developer
will serve the purposes of Health and Safety Code Section 33334.2, by improving and increasing
the community's supply of affordable housing.
4. The Housing Successor has agreed to convey the Property to Developer on the
condition that the Development be maintained and operated in accordance with Health and
Safety Code Sections 33334.2 et M., 33413(a) and. 33413(b)(2)(A)(ii), and in accordance with
additional restrictions concerning affordability, operation, and maintenance of the Development,
as specified in this Agreement.
5. As an inducement to the City to transfer the Property and make the Loan to
Developer, Developer has further agreed to observe all the terms and conditions set forth below.
6. In order to ensure that the entire Development will be used and operated in
accordance with these conditions and restrictions, the Housing Successor and Developer wish to
enter into this Agreement.
THEREFORE, the Housing Successor and Developer agree as follows.
ARTICLE 1.
DEFINITIONS
1.1 Definitions. When used in this Agreement, the following terms shall have the
respective meanings assigned to them in this Article 1.
(a) "Actual Household Size" shall mean the actual number of persons in the
applicable household.
(b) "Adjusted Income" shall mean the total anticipated annual income of all
persons in a household, as calculated in accordance with 25 California Code of Regulations
Section 6914 or pursuant to a successor State housing program that utilizes a reasonably similar
method of calculation of adjusted income. In the event that no such program exists, the Housing
Successor shall provide the Developer with a reasonably similar method of calculation of
adjusted income as provided in said Section 6914.
(c) "Agreement" shall mean this Regulatory Agreement and Declaration of
Restrictive Covenants.
(d) "Assumed Household Size" shall have the meaning set forth in Section
2.2(c).
(e) "Housing Successor" means the City of Ukiah, acting in the capacity of
the Housing Successor in accordance with Health and Safety Code Sections 34176 and 34176.
"City" shall mean the City of Ukiah, a municipal corporation.
25
Disposition Agreement Danco-City of.ikiah.2021
(f) "Developer" shall mean Danco Communities, a California corporation,
and its successors and assigns as permitted by this Agreement.
(g) "Development" shall mean the Property and the Improvements.
(h) "Improvements" shall mean the improvements to be constructed by the
Developer on the Property, including the Units, and appurtenant landscaping and improvements.
(i) "Median Income" shall mean the median gross yearly income adjusted for
Actual Household Size or Assumed Household Size, as specified in this Agreement, in the
County of Mendocino, California, as published from time to time by HUD and the California
Department of Housing and Community Development("HCD"). In the event that such income
determinations are no longer published, or are not updated for a period of at least eighteen(l 8)
months, the Housing Successor shall provide the Developer with other income determinations
which are reasonably similar with respect to methods of calculation to those previously
published by HUD and HCD.
0) "Property" shall mean the real property described in Exhibit A attached o
and incorporated in this Agreement.
(k) "Rent" shall mean the total of monthly payments by the tenants of a Unit
for the following: use and occupancy of the Unit and land and associated facilities, including
parking; other than security deposits; and the cost of an adequate level of service for utilities paid
by the tenant, including garbage collection, sewer, water, electricity, and gas, but not cable or
telephone service.
(1) "Tenant" shall mean a household occupying a Unit.
(m) "Term" shall mean the term of this Agreement which shall commence on
the date of recordation of this Agreement and shall continue until the date that is 55 years
thereafter.
(n) "Units" shall mean the rental units to be constructed by the Developer on
the Property.
ARTICLE 2.
OCCUPANCY AND AFFORDABILITY
2.1 Occupancy Requirements. Except for the manager's unit, Developer shall ensure
that all Units are occupied as follows: 8 of the Units will be occupied by households at or
below 300}b of Median Income, 21 of the Units will be occupied by households at or below
40% of Median Income, 25 of the Units will be occupied by households at or below 50%' of
Median Income, 8 of the Units will be occupied by households at or below 60% of Median
Income, and 7 of the Units will be occupied by households at or below 80%of Median
Income. One Unit shall be an unrestricted manager's unit.
26
Disposition Agreement Danco-City of Ukiah.2021
2.2 Allowable Rent.
(a)Low Income Rent. Subject to Section 2.3 below, the Rent charged to Tenants
of the Units shall not exceed one-twelfth(1 121h) of thirty percent (30%)of the applicable
Median Income, adjusted for Assumed Household Size.
(b) In calculating the allowable Rent for the Units, the following Assumed
Household Sizes shall be utilized, provided, however, that if the Project is financed with low
income housing tax credits, the assumed household size required by the California Tax Credit
Allocation Committee shall control:
Number of Bedrooms Assumed Household Size
Studio 1
One 2
Two 3
Three 4
(c)Rent Increases. Annual rent increases, if any, shall be limited to: (i) the
percentage of increase in Median Income since the last rent increase; (ii) the percentage increase,
allowed by any other regulatory agreement applicable to the Development, whichever is lower.
2.3 Increased Income of Tenants.
(a)Increase Above Low Income Limit. In the event, upon recertification of a
Tenant's household's income, the Developer determines that the income of a household exceeds
the income level applicable to the Unit, such household's Unit shall be redesignated as a higher
Median Income level and such household's rent shall be increased to a level applicable to the
Units at such income level, and the Developer shall rent the next available Unit at the income
level originally applicable to the household until the unit mix required by this Agreement is
achieved..
(b) Termination of Occupancy. Upon termination of occupancy of a Unit by a
Tenant, such Unit shall be deemed to be continuously occupied by a household of the same
Median Income level as the initial income level of the vacating Tenant, until such Unit is
reoccupied, at which time the Median Income level of the Unit shall be redetermined.
2.4 Tenant Selection.
All of the Units shall be available for occupancy on a continuous basis to members of the
general public who are income eligible. Developer shall not give preference to any particular
class or group of persons in renting the Units, except to the extent that the Units are required to
be leased to Low Income Households. There shall be no other discrimination against or
segregation of any person or group of persons, on account of race, color, creed, religion, sex,
sexual orientation, marital status, national origin, source of income, disability, or ancestry, in the
leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit.
27
Disposition Agreement Danco-City of Ukiah.2021
2.5 Lease Provisions. Developer shall include in leases for all Units provisions which
authorize Developer to terminate the tenancy of any household only for"good cause" in
accordance with the rules and regulations of the low-income housing tax credit ("LIHTC")
program.. Each lease or rental agreement shall also provide that the household is subject to
annual income recertification, and that, if the household's income increases above the applicable
limits for applicable Median Income, such household's Rent may be subject to increase.
2.6 Income Certification. The Developer will obtain, complete and maintain on file,
immediately prior to initial occupancy and annually thereafter, income and household size
certifications from each Tenant renting any of the Units in accordance with the rules and
procedures of the LIHTC program. Copies of tenant income certifications shall be available to
the Housing Successor upon request.
2.7 Annual Reports to Housing Successor. Developer shall submit to the Housing
Successor not later than the ninetieth (90') day after the close of each calendar year during the
Term, a statistical report, including income and rent data for all Units.
2.8 Records. Developer shall maintain complete, accurate and current records pertaining
to the Development, and shall permit any duly authorized representative of the Housing
Successor to inspect records, including records pertaining to income and household size of
Tenants upon no less than 48 hours written notice to Developer. The Developer shall retain
copies of all materials obtained or produced with respect to occupancy of the Units for a period
of at least five (5) years.
2.9 On-site Inspection. The Housing Successor shall have the right to perform an on-
site inspection of the Development at least one time per year upon no less than 48 hours written
notice to Developer. The Developer agrees to cooperate in such inspection.
ARTICLE 3.
OPERATION OF THE DEVELOPMENT
3.1 Mixed Use. The Development shall be used only for rental residential use for
lower income households, related amenities and commercial space.
3.2 Taxes and Assessments. Developer shall pay all real and personal property taxes,
assessments, if any, and charges and all franchise, income, employment, old age benefit,
withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such
manner as to prevent any penalty from accruing, or any line or charge from attaching to the
Property; provided, however, that Developer shall have the right to contest in good faith, any
such taxes, assessments, or charges. In the event Developer exercises its right to contest any tax,
assessment, or charge against it, Developer, on final determination of the proceeding or contest,
shall immediately pay or discharge any decision or judgment rendered against it, together with
all costs, charges and interest.
28
Disposition Agreement Danco-City of Ukiah 2021
ARTICLE 4.
PROPERTY MANAGEMENT AND MAINTENANCE
4.1 Management Responsibilities. The Developer is responsible for all management
functions with respect to the Development, including without limitation the selection of tenants,
certification and recertification of household size and income, evictions, collection of rents and
deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital
items, and security. The Housing Successor shall have no direct responsibility over management
of the Development. The Developer shall retain a professional property management company
approved by the Housing Successor in its reasonable discretion to perform its management duties
under this Agreement. A resident manager shall also be required.
4.2 Management Agent. The Development shall at all times be managed by an
experienced management agent reasonably acceptable to the Housing Successor(as approved,
the "Management Agent"), with demonstrated ability to operate residential facilities like the
Development in a manner that will provide decent, safe, and sanitary housing. The Housing
Successor agrees that Danco Communities is approved as the initial Management Agent of the
Development. The Developer shall submit for the Housing Successor's approval the identity of
any proposed substitute Management Agent. The Developer shall also submit such additional
information about the background, experience and financial condition of any proposed substitute
Management Agent as is reasonably necessary for the Housing Successor to determine whether
the proposed Management Agent meets the standard for a qualified Management Agent set forth
above. If the proposed substitute Management Agent meets the standard for a qualified
Management Agent set forth above, the Housing Successor shall approve the proposed
Management Agent by notifying the Developer in writing. Unless the proposed Management
Agent is disapproved by the Housing Successor within thirty(30)days, which disapproval shall
state with reasonable specificity the basis for disapproval, it shall be deemed approved. if the
proposed Management Agent is disapproved by the Housing Successor for failing to meet the
standard for a qualified Management Agent set forth above, the Housing Successor shall provide
the specific reasons for such disapproval, and the Developer shall submit for the Housing
Successor's approval a new proposed Management Agent within thirty(30)days following the
Housing Successor's disapproval. The Developer shall continue to submit proposed
Management Agents for Housing Successor approval until the Housing Successor approves a
proposed Management Agent.
4.3 Property Maintenance. The Developer agrees, for the entire Term of this
Agreement, to maintain all interior and exterior improvements, including landscaping, on the
Property in good condition and repair(and, as to landscaping, in a healthy condition) and in
accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state,
county, municipal, and other governmental agencies and bodies having or claiming jurisdiction
and all their respective departments, bureaus, and officials.
The Housing Successor places prime importance on quality maintenance to protect its
investment and to ensure that all Housing Successor assisted affordable housing projects within
the City are not allowed to deteriorate due to poor maintenance. Normal wear and tear of the
Development will be acceptable to the Housing Successor assuming the Developer agrees to
provide all necessary improvements to assure the Development is maintained in good condition.
29
Disposition Agreement Danco-City of Ukiah.2021
The Developer shall make all repairs and replacements necessary to keep the improvements in
good condition and repair.
ARTICLE 5.
ASSIGNMENT AND TRANSFERS
5.1 Definitions.
As used in this Article, the term "Transfer" means:
(a)Any total or partial sale, assignment or conveyance, or any trust or power, or
any transfer in any other mode or form, of or with respect to this Agreement or of the
Development or any part of the Developer or any interest in the Developer or any contract or
agreement to do any of the same; or
(b) Any total or partial sale, assignment or conveyance, of any trust or power,
or any transfer in any other mode or form, of or with respect to any ownership interest in
Developer; or
(c)Any merger, consolidation, sale or lease of all or substantially all of the assets
of Developer; or
(d) The leasing of part or all of the Property or the Improvements on the
Property; provided, however, that leases of the units included within the Development to tenant
occupants, in accordance with the Regulatory Agreement, shall not be deemed a "Transfer" for
purposes of this Article.
5.2 Purpose of Restrictions on Transfer.
This Agreement is entered into solely for the purpose of the development and operation
of the Development and its subsequent use in accordance with the terms of this Agreement. The
Developer recognizes that the qualifications and identity of Developer are of particular concern
to the Housing Successor, in view of:
(a)The importance of the redevelopment of the Property to the general welfare of
the community; and
(b) The land acquisition assistance and other public aids that have been made
available by law and by the government for the purpose of making such redevelopment possible;
and
(c)The reliance by the Housing Successor upon the unique qualifications and
ability of the Developer to serve as the catalyst for development of the Property and upon the
continuing interest which the Developer will have in the Property to assure the quality of the use,
operation and maintenance deemed critical by the Housing Successor in the development of the
Property; and
Disposition Agreement Danco-City of Ukiah.2021 30
(d) The fact that a change in ownership or control of the Developer as owner of
the Property, or of a substantial part of the Property, or any other act or transaction involving or
resulting in a significant change in ownership or with respect to the identity of the parties in
control of the Developer or the degree those parties' control of the Developer is for practical
purposes a transfer or disposition of the Property; and
(e)The fact that the Property is not to be acquired or used for speculation, but only
for development and operation by the Developer in accordance with the Agreement; and
(0 The importance to the Housing Successor and the community of the standards
of use, operation and maintenance of the Property.
The Developer further recognizes that it is because of such qualifications and identity that the
Housing Successor is entering into this Agreement with the Developer and that Transfers are
permitted only as provided in this Agreement.
5.3 Prohibited Transfers.
The limitations on Transfers set forth in this Article shall apply throughout the Term.
Except as expressly permitted in this Agreement, the Developer represents and agrees that the
Developer has not made or created, and will not make or create or suffer to be made or created,
any Transfer, either voluntarily or by operation of law without the prior written approval of the
Housing Successor.
Any Transfer made in contravention of this Section shall be void and shall be deemed to
be a default under this Agreement whether or not the Developer knew of or participated in such
Transfer.
5.4 Permitted Transfers.
Notwithstanding the provisions of Section 5.3, the following Transfers shall be permitted
and by execution of this Agreement are approved by the Housing Successor, subject to
satisfaction of the requirements of Section 5.5:
(a)Any Transfer creating a mortgage, deed of trust, or other method of security to
finance acquisition, development, rehabilitation of repair of the Development (a "Secured
Financing");
(b) Any Transfer directly resulting from the foreclosure of a Secured Financing
or the granting of a deed in lieu of foreclosure of a Secured Financing; and
(c)The admission of an investor as a limited partner of the Developer for the
purposes of syndicating the tax credits to an investor to obtain funds for acquisition,
development, rehabilitation or repair of the Development, and any subsequent transfers by the
31
Disposition Agreement Danco-City of L kiah.2021
investor limited partner. The Housing Successor, by execution of this Agreement, approves the
sale of limited partnership interests in the Developer to investors.
(d) Any transfer to an affiliate of Developer or a limited partnership in which
Developer or an entity controlled by Developer or Danco Communities is the general partner or
to a limited liability company of which Developer or an entity controlled by Developer or Danco
Communities is the managing member.
(e) The removal by the investor limited partner of a general partner of the Developer and
its replacement pursuant to the terms of the Developer's Partnership Agreement.
5.5 Effectiveness of Certain Permitted Transfers.
No Transfer of this Agreement permitted pursuant to Section 5.4(other than a Transfer
pursuant to a Secured Financing under Section 5.4(a)or(b)) or Section 5.6 shall be effective
unless, at the time of the Transfer, the person or entity to which such Transfer is made, by an
instrument in writing reasonably satisfactory to the Housing Successor and in form recordable
among the land records of Mendocino County, shall expressly assume the obligations of the
Developer under this Agreement and agree to be subject to the conditions and restrictions to
which the Developer is subject arising during this Agreement, to the fullest extent that such
obligations are applicable to the particular portion of or interest in the Development conveyed in
such Transfer. Anything to the contrary notwithstanding, the holder of a Secured Financing
whose interest shall have been acquired by, through or under a Secured Financing or shall have
been derived immediately from any holder of a Secured Financing shall not be required to give
to Housing Successor such written assumption until such holder or other person is in possession
of the Property or entitled to possession of the Property pursuant to enforcement of the Secured
Financing.
In the absence of specific written agreement by the Housing Successor, no such Transfer,
assignment or approval by the Housing Successor shall be deemed to relieve the Developer or
any other party from any obligations under this Agreement.
5.6 Other Transfers with Housinp,Successor Consent.
The Housing Successor may, in its sole discretion, approve in writing other Transfers as
requested by the Developer. In connection with such request, there shall be submitted to the
Housing Successor for review all instruments and other legal documents proposed to effect any
such Transfer. If a requested Transfer is approved by the Housing Successor such approval shall
be indicated to the Developer in writing. Such approval shall be granted or denied by the
Housing Successor within thirty(30) days of receipt by the Housing Successor of Developer's
request for approval of a Transfer.
ARTICLE 6.
MISCELLANEOUS
32
Disposition Agreement Danco-City of Ukiah.2621
6.1 Term. The provisions of this Agreement shall apply to the Property for the entire
Term even if the entire Loan is paid in full prior to the end of the Term.
6.2 Compliance with Program Requirements. The Developer's actions with respect to
the Property shall at all times be in full conformity with the requirements imposed on projects
assisted with Redevelopment Low and Moderate Income Housing Fund monies under California
Health and Safety Code Section 33334.2 et seq.
6.3 Covenants to Run With the Land. The Housing Successor and Developer declare
their express intent that the covenants and restrictions set forth in this Agreement shall run with
the land, and shall bind all successors in title to the Property,provided, however, that on the
expiration of the Term of this Agreement said covenants and restrictions shall expire.
6.4 Developer Default; Enforcement by the Housing Successor. If Developer fails to
cure a default under this Agreement within thirty(30) days after the Housing Successor has
notified the Developer in writing of the default or, if the default cannot be cured within thirty
(30) days, failed to commence to cure within thirty(30)days and thereafter diligently pursue
such cure, the Housing Successor shall have the right to enforce this Agreement by bringing an
action at law or in equity, including, but not limited to, an action to compel Developer's
performance of its obligations under this Agreement.
6.5 Attorneys Fees and Costs. In any action brought to enforce this Agreement, the
prevailing party shall be entitled to all costs and expenses of suit, including attorneys' fees.
6.6 Recording and Filing. The Housing Successor and Developer shall cause this
Agreement, and all amendments and supplements to it, to be recorded against the Property in the
Official Records of the County of Mendocino.
6.7 Governing Law. This Agreement shall be governed by the laws of the State of
California.
6.8 Amendments. This Agreement may be amended only by a written instrument
executed by all the Parties or their successors in title, and duly recorded in the real property
records of the County of Mendocino, California.
6.9 Notice. Formal notices, demands, and communications between the Housing
Successor and the Developer shall be sufficiently given if and shall not be deemed given unless
dispatched by registered or certified mail,postage prepaid, return receipt requested, or delivered
by reputable overnight delivery service, return receipt requested, or delivered personally with a
delivery receipt, to the principal office of the Housing Successor and the Developer as follows:
Housing Successor:
Ukiah Redevelopment Housing Successor
300 Seminary Avenue
Ukiah, CA 95482
Attn: Executive Director
33
Disposition Agreement Danco-Cily of Ukiah.2021
Developer:
[ 1
c/o Danco Communities
5251 Ericson Way
Arcata, CA 95521
Attn: President
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected Party may from time to time designate by mail as provided in this
Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the
date of delivery or refusal of delivery(or attempted delivery if undeliverable).
6.10 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions of this
Agreement shall not in any way be affected or impaired by such invalidity, illegality or
uneforceability.
6.11 Multiple Originals; Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original.
6.12 Estoppel Certificates. The City agrees, from time to time, within fifteen (15)
days after receipt of written notice from Developer, to execute and deliver to Developer a written
statement certifying that, to the knowledge of the City, (a)this Agreement is in full force and
effect and a binding obligation of the Parties (if such be the case); (b) this Agreement has not
been amended or modified either orally or in writing, and if so amended, identifying the
amendments; (c) Developer is not in default in the performance of its obligations under this
Agreement, or if in default, to describe therein the nature and amount of any such defaults; and
(d) such other matters reasonably required by any lender or the tax credit investor.
z4
Disposition Agreement Danco-City of Ukiah 2021
IN WITNESS WHEREOF, the Housing Successor and Developer have executed this
Agreement by duly authorized representatives, all on the date first written above.
HOUSING SUCCESSOR:
City of Ukiah
By: _
Its:
DEVELOPER:
[PARTNERSHIP]
APPROVED AS TO FORM
Housing Successor Counsel
By:
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document
STATE OF CALIFORNIA )
COUNTY OF )
On , 20_before me, , Notary
Public, personally appeared , personally
known to me (or 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
heishelhey executed the same in his/her..-'their authorized capacity(ies), and that by
his..heritheir signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
IJ_sposition Agreement Dania(:iiy a l lkiah.ZA2l
WITNESS my hand and official seal.
Signature (Seal)
STATE OF CALIFORNIA )
COUNTY OF )
On , 20�before me, , Notary
Public, personally appeared , personally
known to me (or 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.`sheithey 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.
WITNESS my hand and official seal.
Signature (Seal)
Disposition Agreement Danco-City of UkiahIM
EXHIBIT D
Form of City Grant Deed
]TO FOLLOW AFTER EXECUTION]
Page 37
EXHIBIT E
Public Utilities Easement
(To be completed;info below from preliminary title report)
Easement(s)for the purposes stated herein and incidental purposes as provided in the document(s):
Recorded: April 24, 1968 in Book 762,Page 746 of Official Records
For: public utilities,ingress and egress
In favor of: Pacific Gas and Electric Company
Easements,terms and provisions as contained in an instrument,
Entitled: Agreement and Grant of Easement
Recorded: April 13,1989 in Book 1745.Page 82 of Official Recwrds6.Easements,building setback lines,notations and/or recitals as shown
or provided for on the map recorded April 27,1989 in Map Case 2,Drawer 48,Page 24 Mendocino County Records,
Page 38
EXHIBIT F
Form of City Note
PROMISSORY NOTE
(City Loan)
$[ 1 202_
For value received, [ 1, a California limited partnership(hereinafter referred to as
"Maker"), promises to pay to the order of The City of Ukiah, a municipal corporation (together
with any future holders of this Note,`'Holder"),at 300 Seminary Avenue, Ukiah, CA 95482, or as
directed otherwise in writing by Holder,the principal sum of[ ($ A.
This Note is secured by the Deed of Trust (as defined below) on real property upon which Maker
intends to construct a 71-unit multifamily apartment complex and related improvements (the
"Project"). All capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Maker's Amended and Restated Agreement of Limited Partnership dated
as of , 202 ("Partnership Agreement"). [Capitalized terms to be revised based upon
the selection of the Tax Credit Investor.]
1. The Loan. This Promissory Note (the ''Note") evidences the obligation of the Maker to
the Holder for the repayment of funds loaned to the Holder by the Maker(the "Loan") as a seller
carryback to pay Project property acquisitions costs.
2. Interest. This Promissory Note ("Note'') shall bear simple interest at 3% annually.
3. Payments. Annually each year during the term of this Note commencing on the first
Payment Date following the Final Closing, Maker shall pay to Holder the 80% of Net Cash Flow
remaining after payment of items noted as clauses U through (__) of Section [: of the
Partnership Agreement. Accompanying each payment of Net Cash Flow, Maker shall provide
Holder with a detailed accounting of all revenue sources and expenses used to calculate Net Cash
Flow. Maker shall maintain accurate financial records in compliance with Generally Accepted
Accounting Principals ("GAAP") which are auditable and available to the Holder to review, copy
and audited during regular business hours. If any audit or review of such revenues and expenses
establishes that Net Cash Flow was greater than reported to Maker, Holder shall pay all costs
incurred by Maker to conduct the Audit in addition to liquidated damages of °u of the
understated amount.
4. Maturity Date. The principal amount of this Note along with all accrued and unpaid interest
and/or other amounts due shall be due and payable on the fifty-fifth (55) anniversary of the date
of issuance of certificates of occupancy for the Project (the "Maturity");provided, however,
that the Maturity Date may be accelerated in accordance with the terms and provisions of this Note.
Page 39
5. Security. Payment of the indebtedness evidenced by this Note is secured by that certain
Subordinated Deed of Trust (the "Deed of Trust"), of even date herewith, and made by Maker, as
trustor, to Commonwealth Land Title Insurance Company, as trustee, for the benefit of Holder, as
beneficiary, which encumbers real property in the County of Mendocino, State of California, as
more particularly described in Exhibit A to the Deed of Trust, together with the improvements
located thereon.
6. Default. If any of the following events (`Events of Default") shall occur:
(a) a default in the payment when due of any amount hereunder and such payment is
not made within 10 business days after Maker received written notice thereof;
(b) failure to pay all outstanding principal and accrued interest on the indebtedness
evidenced by this Note on the Maturity Date; or
(c) any breach or default under the Deed of Trust past any applicable notice and cure
period,
then, subject to the provisions of the Deed of Trust, all sums of interest and principal remaining
outstanding under this Note shall be deemed automatically and immediately due and payable,
without any declaration or other determination by Holder and without notice of default,
presentment, demand, protest, or further notice of any kind, all of which are hereby expressly
waived by Maker. The rights of Holder under this Section 6 are in addition to other rights and
remedies which Holder may have.
7. Notice and Cure. [ I (the "'Limited Partner") or any other successor entity
in such entity's capacity as a limited partner of the Maker, shall have the right, but not the
obligation, to cure any defaults hereunder following 10 business days notice (with respect to
monetary defaults) and 30 business days notice (with respect to non-monetary defaults). In the
event such default requires the removal of the general partner of Maker, the Limited Partner shall
have such additional time as is reasonably necessary to effectuate such removal and cause such
cure. Any default cure tendered by the Maker's Limited Partner shall be accepted or rejected as
if tendered by the Maker. In the event Maker is provided notice by Holder under the Loan
Documents, Holder shall provide the Limited Partner with simultaneous written notice at the
following address:
8. Prepayment. The principal amount of this Note may be prepaid, in whole or in part, at any
time without penalty.
9. Interest Rate After Acceleration or Maturity. When this Note becomes due in full,whether
by acceleration (upon an Event of Default or otherwise), by the occurrence of the Maturity Date,
or in any other manner, if Maker fails to pay all amounts due the unpaid principal and interest (if
any)balance and costs incurred (and any judgment or decree with respect thereto) shall, from and
after the date due, bear interest until paid at an annual rate of ten percent(10%)per annum.
Page 40
10. Waivers by Holder. Holder shall not by any act of omission or commission be deemed to
waive any of its rights or remedies hereunder unless such waiver be in writing and signed by
Holder, and then only to the extent specifically set forth therein. A waiver as to any one event
shall not be construed as continuing or as a bar to or waiver of such right or remedy as to the same
event on any other occasion or as to a different event on the same or any other occasion.
11. Waivers by Maker. Maker waives presentment for payment, demand, notice of non-
payment, notice of protest, and protest of this Note and all of the notices in connection with the
delivery, acceptance, performance, default or enforcement of the payment of this Note. Maker
consents to any and all extensions of time,renewals,waivers, or modifications that may be granted
by Holder with respect to the payment or other provisions of this Note, and to the release of the
collateral or any part thereof with or without substitution and agree that additional makers,
endorsers, guarantors, or sureties may become parties hereto without notice to them and without
affecting their liability hereunder.
12. Analication of Payments. All payments under this Note shall be made in lawful money of
the United States of America. Payments shall be credited first against any costs or expenses due
under this Note, then to any accrued interest(if any), and finally to principal.
13. Interest Rate Limitation. In no event shall the interest rate charged under this Note exceed
the maximum rate permitted under applicable law. In calculating whether any interest exceeds the
lawful maximum, all such interest shall be amortized, prorated, allocated and spread over the full
amount and term of all principal indebtedness of Maker to Holder, and if through any contingency
or event, Holder receives or is deemed to receive interest in excess of the lawful maximum, any
such excess shall be deemed to have been applied toward payment of the principal of any and all
then outstanding indebtedness of Maker to Holder, or if there is no such indebtedness, shall
immediately be returned to Maker.
14. No Acceleration Unon Transfer or Refinancing. The Maker shall be permitted to sell or
refinance the Project or any interest therein, and, provided such transferee agrees to assume
Maker's obligations under this Note, the Note shall not become due and payable.
15. Non-Recourse. This Note shall be non-recourse to the Maker, the partners of Maker, and
its or their successors or assigns, and Holder shall look solely to the Property (as such term is
defined in the Deed of Trust) and other collateral granted to the Holder under and pursuant to the
Deed of Trust for satisfaction of its obligations under this Note.
16. Enforcement Costs. Should suit on this Note or foreclosure of the Deed of Trust be
commenced, Maker agrees to pay the costs of foreclosure and such additional sums as a court may
adjudge reasonable as attorneys fees in any suit.
17. Governing Law. Maker hereby agrees and acknowledges that this Note shall be construed
in accordance with the laws of the State of California. Any alteration, change or modification of
or to this Note, in order to become effective, shall be made by written instrument executed by both
Maker and Holder.
Page 41
[Signature Page Follows]
Page 42
IN WITNESS WHEREOF, Maker has executed this Note as of the date first written above.
MAKER-
1 11
a California limited partnership
EXHIBIT G
Form of City Deed of Trust
Recording Requested by and
After Recording Return to:
[ 1
c/o Danco Communities
5251 Ericson Way
Arcata, CA 95521
DEED OF TRUST
(CITY LOAN)
NOTE: This deed of trust contains a subordination clause which may result in your
security interest in the property becoming subject to and of lower priority than the lien of
some other or later security instrument.
THIS DEED OF TRUST is made as of by[_ _ , a California
limited partnership ("Trustor"), in favor of COMMONWEALTH LAND TITLE INSURANCE
COMPANY ("Trustee"), for the benefit of THE CITY OF UKIAH (together with any successor
to its rights, duties and obligations), a municipal corporation and existing under the laws of the
State of California ("B_eneficiary").
TRUSTOR, in consideration of the indebtedness herein recited and the trust herein
created, irrevocably grants and conveys to Trustee, in trust, with power of sale, that real property
located in the County of Mendocino, State of California as more fully described in Attachment A
("Real Property").
TOGETHER with all the improvements now or hereafter erected on the Real Property,
and all easements, rights, appurtenances and rents (subject however to the rights and authorities
given herein to Beneficiary to collect and apply such rents), all of which shall be deemed to be
and remain a part of the property covered by this Deed of Trust; and all of the foregoing,
together with said property and the Real Property are hereinafter referred to as the "Proper".
TO SECURE to Beneficiary the payment of the indebtedness evidenced by a Promissory
Note, of even date herewith, and extensions and renewals thereof(herein "Note"), in the
principal sum of$ --
Trustor covenants that it is lawfully seized of the estate hereby conveyed and has the
right to grant and convey the Property, and that, to the best of Trustor's knowledge,the Property
is unencumbered except for encumbrances of record. Trustor warrants and will defend generally
the title to the Property against all claims and demands, subject to encumbrances of record.
-2-
A. To protect the security of this Deed of Trust, Trustor agrees as follows:
1. Preservation and Maintenance of Property. Trustor agrees to keep the Property in
good condition and repair; not to remove or demolish any building thereon; to the extent of
available insurance proceeds to complete or restore promptly and in good and workmanlike
manner any building which may be constructed, damaged, or destroyed thereon and to pay when
due all claims for labor performed and materials furnished therefore; to comply with all laws
affecting the Property or requiring any alterations or improvements to be made thereon; not to
commit or permit waste thereof; not to commit, suffer, or knowingly permit any act upon the
Property in violation of law or which constitutes a nuisance under applicable law.
2. Charges, Liens. Trustor shall pay at least ten days before delinquency all taxes
and assessments affecting the Property; when due, all encumbrances, charges, and liens, with
interest, on the Property or any part thereof, which appear to be prior or superior hereto; all costs,
fees, and expenses of this Deed of Trust. Trustor shall give sufficient notice to Beneficiary of
any default under any mortgage, deed of trust or other security agreement with a lien on the
Property to provide Beneficiary with adequate time to protect its legal interests.
3. Hazard Insurance. Trustor shall keep the improvements and personal property
now existing or hereafter erected on the Property insured against loss by fire, vandalism and
malicious mischief by a policy of standard fire and extended all-risk insurance with sufficient
policy limits to cover the full costs of repair or replacement.
Subject to the rights of senior mortgagees, the insurance policy shall be issued in the
name of the Trustor and the Beneficiary, as their interests appear. The insurance policy shall
contain an endorsement which provides that any proceeds shall be disbursed and used to repair
or rebuild any such improvements so damaged or destroyed.
The full replacement value of the improvements to be insured hereunder shall be
determined by the company issuing the policy at the time the policy is initially obtained.
4. Defense of Security. Trustor agrees to appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or
Trustee; and to pay all costs and expenses, including cost of evidence of title and attorneys' fees
in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may
appear.
5. Reimbursement of Costs. Trustor agrees to pay immediately and without demand
all reasonable sums expended by Beneficiary or Trustee pursuant to the provisions hereof, with
interest from date of expenditure at the maximum amount allowed by law in effect at the date
hereof.
6. Right to Cure. Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do and with 10 business days
(for payment defaults) and 30 days (for non payment defaults) notice to or demand upon Trustor
-3-
and without releasing Trustor from any obligation hereof, may make or do the same in such
manner and to such extent as either may deem necessary to protect the security hereof,
Beneficiary or Trustee being authorized to enter upon said Property for such purposes; appear in
and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee; pay, purchase, contest, or compromise any encumbrance,
charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in
exercising any such powers, or in enforcing this Deed of Trust by judicial foreclosure, pay
necessary expenses, employ counsel, and pay reasonable attorneys' fees. Beneficiary may make
or cause to be made reasonable entries upon and inspections of the Property, subject to tenant
leases, provided that Beneficiary shall give Trustor notice prior to any such inspection specifying
reasonable cause therefor related to Beneficiary's interest in the Property, provided, however,
that Beneficiary and Trustee will provide Trustor's limited partners with written notice and a
reasonable opportunity to cure upon receipt of such written notice. In the event the limited
partner tenders a cure for Trustor's default, such cure shall be accepted or rejected on the same
basis as if made or tendered by Trustor.
B. It is mutually-agreed that:
1. Condemnation_Award. Subject to the rights of senior mortgagees, any proceeds
of any insurance on the Property or award of damages in connection with any condemnation for
public use of or injury to the Property or any part thereof is hereby assigned and shall be paid to
Beneficiary who may apply such moneys received by it to any indebtedness secured hereby and
in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so
collected or any part thereof may be released to Trustor. Such application or release shall not
cure or waive any default or notice of default hereunder or invalidate any act done pursuant to
such notice. Notwithstanding anything herein to the contrary, if the Trustor is not then in default
and proceeds are sufficient therefor, or additional funds are made available to be sufficient
therefor, such proceeds shall be applied to the restoration of the Property.
2. Late Payment. By accepting payment of any sum secured hereby after its due
date, Beneficiary does not waive its right either to require prompt payment when due of all other
sums so secured or to declare default for failure so to pay.
3. Release and Subordination. At any time or from time to time, without liability
therefor and without notice, upon written request of Beneficiary and presentation of this Deed of
Trust and Note for endorsement, Trustee may reconvey all or any part of said property; consent
to the making of any map or plat thereof;join in granting any easement thereon; or join in any
extension agreement or any agreement subordinating the lien or charge hereof.
4. Reconveyance. Upon written request of Beneficiary stating that all sums secured
hereby have been paid, upon surrender of this Deed of Trust and the Note to Trustee for
cancellation, and upon payment of its fees, Trustee shall reconvey, without warranty, the
Property. The recitals in any reconveyance executed under this Deed of Trust of any matters or
facts shall be conclusive proof of the truthfulness thereof.
-4-
5. Rents, Issues, and Profits. As additional security, Trustor hereby gives to and
confers upon Beneficiary the right, power, and authority, during the continuance of these Trusts,
to collect the rents, issues, and profits of the Property, reserving unto Trustor the right, prior to
any default by Trustor in payment of any indebtedness secured hereby or in performance of any
agreement hereunder, to collect and retain such rents, issues, and profits as they become due and
payable. Upon any such default, Beneficiary may at any time without notice, either in person, by
agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, enter upon and take possession of said property or
any part thereof, in its own name sue for or otherwise collect such rents, issues, and profits,
including those past due and unpaid, and apply the same, less costs and expenses of operation
and collection, including reasonable attorneys' fees, upon any indebtedness secured hereby, and
in such order as Beneficiary may determine. The entering upon and taking possession of said
Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid,
shall not cure or waive any default or notice of default hereunder or invalidate any act done
pursuant to such notice.
6. Notice. Except for any notice required under applicable law to be given in
another manner, (a) any notice to Trustor provided for in this Deed of Trust shall be given by
delivering it or by mailing such notice by certified mail return receipt requested addressed to
Trustor at [ 1, c/o Danco Communities, 5251 Ericson Way, Arcata, CA 95521 Attn:
President, with copies to: [_INVESTOR ]
Attention: [ ], or at such other address as Trustor may designate by notice to
Beneficiary as provided herein, and (b) any notice to Beneficiary shall be given by certified mail
return receipt requested to Beneficiary's address stated herein or to such other address as
Beneficiary may designate by notice to Trustor as provided herein. Any notice provided for in
this Deed of Trust shall be deemed to have been given to Trustor or Beneficiary when given in
the manner designated herein two (2) days after deposit into the United States Mail, or on the
date when personally served on the Trustor or Beneficiary.
7. Assignment. Trustor shall be permitted to assign the Note and this Deed of Trust
and provided such transferee agrees to assume Trustor's obligations under the Note and this
Deed of Trust, the Note shall not become due and payable.
8. Powers of Sale. Upon default by Trustor in payment of any indebtedness secured
hereby or in performance of any agreement hereunder, after the expiration of applicable notice
and cure periods, all sums secured hereby shall immediately become due and payable at the
option of the Beneficiary. In the event of default, Beneficiary may employ counsel to enforce
payment of the obligations secured hereby, and shall execute or cause the Trustee to execute a
written notice of such default and of its election to cause to be sold the Property to satisfy the
obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of
each county wherein the Property or some part thereof is situated.
Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of
Trust and the Note or other evidence of indebtedness which is secured hereby, together with a
written request for the Trustee to proceed with a sale of the Property described herein, pursuant
to the provisions of law and this Deed of Trust.
-5-
Notice of sale having been given as then required by law, and not less than the time then
required by law having elapsed after recordation of such notice of default, Trustee, without
demand on Trustor, shall sell the Property at the time and place fixed by it in said notice of sale,
either as a whole or in separate parcels and in such order as it may determine, at public auction to
the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee
may postpone sale of all or any portion of the Property by public announcement at such time and
place of sale, and from time to time thereafter may postpone such sale by public announcement
at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser
its deed conveying the property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including Trustor,Trustee, or Beneficiary, may purchase at
such sale.
After deducting all costs, fees, and expenses of Trustee and of this Deed of Trust,
including cost of evidence of title and reasonable attorneys' fees in connection with sale,Trustee
shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not then
repaid; all other sums then secured hereby; and the remainder, if any, to the person or persons
legally entitled thereto.
9. Trustor's Riuht to Reinstate. Notwithstanding Beneficiary's acceleration of the
sums secured by this Deed of Trust due to Trustor's breach, Trustor shall have the right to have
any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time
prior to five days before sale of the Property pursuant to the power of sale contained in this Deed
of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if. (a)Trustor
pays Beneficiary all sums which would be then due under this Deed of Trust if the Note had no
acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of
Trustor contained in this Deed of Trust; (c)Trustor pays all reasonable expenses incurred by
Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this
Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein,
including, but not limited to, reasonable attorney's fees; and (d)Trustor takes such action as
Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's
interest in the Property and Trustor's obligation to pay the sums secured by this Deed of Trust
shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the
obligations secured hereby shall remain in full force and effect as if no acceleration had
occurred.
10. Successors and Assigns. This Deed of Trust applies to, inures to the benefit of,
and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors,
and assigns. The term Beneficiary shall mean the holder and owner of the Note secured hereby;
or, if the Note has been pledged, the pledgee thereof. In this Deed of Trust, whenever the
context so requires, the singular number includes the plural.
11. Other Sales, Actions, or Proceedings. Trustee is not obligated to notify any party
hereto of pending sale under any other deed of trust or of any action or proceeding in which
Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
,6,
12. Substitution of Trustee. Beneficiary may from time to time or at any time
substitute a Trustee or Trustees to execute the trust hereby created, and when any such
substitution has been filed for record in the office of the Recorder of the county in which the
Property is situated, it shall be conclusive evidence of the appointment of such Trustee or
Trustees, and such new Trustee or Trustees shall succeed to all of the powers and duties of the
Trustee or Trustees named herein.
15. Subordination. Trustor's indebtedness evidenced by the Note is and shall be
subordinate in right of payment to the prior payment in full of all amounts then due and payable
(including, but not limited to, all amounts due and payable by virtue of any default or
acceleration or upon maturity) with respect to: (i) [senior construction Ioan TBD],
16. Extended Use Agreement. In order to receive an allocation of federal low-income
housing tax credits,Trustor will be required to record against the Real Property in the real
property records of the County in which the Property is located, an "extended low-income
housing commitment" (as defined in Section 42(h)(6)(B) of the Internal Revenue Code of 1986,
as amended ("Code")) ("'Extended Use Agreement"). Beneficiary acknowledges and agrees that.
in the event of a foreclosure of its interest under this Deed of Trust or delivery by the Trustor of a
deed in lieu thereof(collectively, a "Foreclosure"), Beneficiary agrees to comply with the
following rule contained in Section 42(h)(6)(E)(ii) of the Code: For a period of three(3) years
from the date of Foreclosure, with respect to any unit that had been regulated by the Extended
Use Agreement, (i) none of the eligible tenants occupying those units at the time of Foreclosure
may be evicted or their tenancy terminated (other than for good cause, including but not limited
to, the tenants' ineligibility pursuant to regulations of Section 42 of the Code), (ii) nor may any
rent be increased except as otherwise permitted under Section 42 of the Code.
[Signatures appear on next page]
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date set
forth above.
TRUSTOR:
NOTARY ACKNOWLEDGMENT
A notary public or other officer completing
this certificate verifies only the identity of the
individual who signed the document to which
this certificate is attached, and not the
truthfulness,accuracy, or validity of that
document.
STATE OF CALIFORNIA
COUNTY OF
On , 201_,before me, ,a notary
public,personally appeared ,who proved to me on
the basis of satisfactory evidence to be the person whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s)on the instrument the person(s),or the entity upon
behalf of which the person(s)acted,executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
[Seal)
Notary Public
ATTACHMENT A
LEGAL DESCRIPTION OF PROPERTY
Disposition Agrmt Danco-City o£Ukiah-2021(Developer Revisions A)