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HomeMy WebLinkAbout2009-04-08 e-packet_~ 3AN~' c~0" a~:,. +Q v ~ ~ t u: _ _ ~`~LIFOR~IF~ ~C~EI~TDA RF;~EVELOPNILN'T AGENCY CITY OF SOUTH SAN r I? A NCISCO P.EC;ULAit NiEETINC7 l~.~IUNICIPAL SERVICES BUILDRvC7 COMMUNITY ROOM WEDNESDAY APRIL 8, 2009 6:30 P.M. PEOPLE OF SOUTH SALT FP.ANCISC'O You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follows: The regular meeting of the Redevelopment Agency is held on the second tiVednesday of each month at 6:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South Sar. Francisco, California. Public Comment: For those wishing to address the Board on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents Redevelopment Agency from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER-. Thank you for your cooperation. The Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. KARYL MATSUMOTO Chair MARK N. ADDIEGO Vice Chair RICHARD A. GARBARINO Boardmember RICHARD BATTAGLIr~ Investment Officer BARRY M. NAGEL Executive Director PEDRO GONZAI,EZ Boardmember KEVIN MULLIN Boardmember KRISTA MARTINELLI-CARSON Clerk STEVEN T. MATTAS Counsel PLEASE SILENCE CELL PHONES AlV'D PAGERS HEARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS In accordance with Cal jornia Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and r.'s distributed less than 72 hours prior to a reg7ilar meeting will be made available for public inspection in the City Clerk's Office located at Cis y Hall. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080. CALL TO ORDER RGLL CALL AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR Motion to approve the minutes of March 1 1, 2009 & March 25, 2009. 2. Motion to confii7n t]Ie expense claims of April 8, 2009. 3. Resolution authorizing waivE;r of rent increases far the Sitilce Counseling Center for one year. 4. Resolution authorizing the provision of an $88,000 loan to Tipton Metro, LLC, for the Metropolitan Hotel, authorizing the execution of loan documents in connection with such financing, and approving an amendment to the Redevelopment Agency's operating budget. 5. Motion to accept the building; demolition of 212 & 216 Baden Avenue Project No. 58-13232-920 as complete in. accordance with plans and specifications. 6. Resolution rejecting all base and alternate bids for the construction of the Lux Avenue and Linden Avenue 'Temporary Parking Lot #17 Project. 7. Resolution authorizing the E:~ecutive Director to execute an Exclusive Negotiating Rights Agreement regarding 415-417 Grand Avenue. CLOSED SESSION 8. Conference with :Real Property Negotiator (Pursuant to Government Code section 54956.8) Property: 415-417 Grand Avenue. Negotiating Parties: Dalal Metwalli and SSF RDA Agency negotiator: Marty Van Duyn. Under Negotiation: Terms and Conditions for Purchase of Property. REGULAR REDEVELOPMENT AGENCY MEETING APRIL 8, 2009 AGENDA PAGE 2 9. Conference with. Real Property Negotiator (Pursuant to Government Code Section 5^~9~C.8) Property: City owned property located at Oyster Point IViarina, ivegotiating Parties: Oyster P.:. `v'~ntL~res LLC, Shore:.stein,/SKS, tl-ie City ~f South San Fr ;~ ~cisro a?~d the City of South San Francisco Redevelopment Agency Agency Negotiator: Marty Van Duyz: Under Negotiation: City owned property located at Oyster Point Marina. ADJOURNMENT REGULAR REDEVELOPMENT AGENCY MEETING APR]:L 8, 2009 AGENDA PAGES ,~x sA~; ~ 50~ .,~_,,..~ '~~ >. ,~ (E-t- 61~~ - `~ 1 ~ RDA AGENDA ITEM # 1 T~IINLTTE~ ~~~,F~ RI?-DEVELGEiyIEN'I' AGENT ~' ~iTY OF ~~T ITH SAN FRANCISr~ REGLTL AR 1vIEETING MUNICIPAL SERVICES BUILDII~,TG COMMUNITY ROOM WEDNESDAY MARCH 1 1, 2009 6:30 P.M. CALLED TO ORDER: ROLL CALL: AGENDA REVIE ~~ None. PUBLIC COMMENTS CONSENT CALENDAR 6:32 p.m. Present: Boardmembers Garbarino, Gonzalez and Mullin, Vice Chairman Addiego a.nd Chairwoman Matsumoto. Absent: None. 1. Motion to approve the minutes of February 11, 2009 and February 18, 2009. 2. Motion to approve the expense claims of March 11, 2009 in the amount of $1,900,471.25. 3. Resolution No. 3-2009 approving a loan for the remodel of Bronstein's Music Store, 363 Grand Avenue, in an amount not to exceed $350,000 and authorizing the Executive Director to execute loan documents. 4. Resolution No. 4-2009 awarding an Environmental Consulting Services Contract to Technology, Engineering & Construction, Inc. (TEC), of South San Francisco., CA, in an amount not to exceed $297,114.63 for the new Caltrain Station site located at 296 Airport Boulevard (Project No. 58-13232-0320). 5. Resolution No.:~-2009 authorizing the expenditure of up to $300,000 from the Low-and Moderate-Income Housing Fund to subsidize the purchase of yap to six Below Market Rate Units at: City Lights, adopting findings in connection therewith, and approving an amendment to the Agency's Low-Moderate Income Housin€; Fund Operating Budget. Motion - Boardir~en~ber Garbarino/Second. - Boardmember Mullin: to approve Consent Calendar Items Nos. 1, 2, 4 and 5. Unanimously approved by voice vote. Item 3: 1~oardmember Gonzalez req~_«ted more information ors the item. i~~ai.w~er of ~~ousmg anal Rcu~ve~opn~ent _ _ago:,o .,xplained t~~~ ~.,a._ wou~u t:~ce the ~orn1 of a business assistance loan from the Redevelopment Agency in the Downtown Project Area. Such loans permit the City to retain local, regionally and nationally established businesses. She noted that Bronstein's owners Richard Walker and Don Edwards were; present. Boardmember Gonzalez stated he was excited about the improvement to the 300 block and questioned when repayi~nent would begin and whether the loan payment would come back to the Agency. Manager Fragoso responded that pa.y~nents would begin after construction was completed and construction was expected to take several months. The loan was standard at 30 years with a 4% interest rate. Payments would go right back into the Agency's budget. Chairwoman T~latsumoto stated she would like to add the condition that anon-cost prohibitive green construction element be incorporated in the project. Director of Economic and Community Development Van Duyn stated the Agency cou d direct staff to work with the owners to ensure that green objectives were included as part of the design, but he didn't believe the loan would have to be modified to this effect. Manager Fragoso stated staff would work with the owners and the Building Division to make sure green features were included. Chairwoman Matsumoto requested that future loans of this type include a suggestion that business owners pursue a marketing; class. Vice Chairman Addiego observed the owners of Bronstein's knew how to market, but the Chairwoman's suggestion more generally applied to future loans of this type was a good one. Manager Fragoso stated staff was looking into offering marketing and business courses through the Chamber. Counsel Mattas clarified the request from the Agency was that staff work with the owners and designers to include green features in construction; however this condition did not. need to be incorporated into the loan agreement. The Agency agreed. Motion -Boardmember Gonzalez/Second -Boardmember Garbarino: to approve Resolution 3-2009. Unanimously approved by voice vote. REGULAR REDEVELOPMENT AGEN(:Y MEETING MARCH 11, 2009 MINUTES PAGE 2 PUBLIC HEARI~TCT 6. Hyatt P] ice Hotel Vijay Patel/applicant SRI Krisli~a Enterprisesiowner 550 Gateway Blvd P07-0073: PP07-0001, SIGN07-0047, VARO 7-0004; TDl~i08-0003, DR07-0046 &. MND07-0003 Precise Plan, Type "C" Sign Permit, Design Review, Transportation Demand Management Plan &. Variance applications fora 166 roam, eight-story Hyatt Place Hotel, at 550 Gateway Boulevard, in the Gateway Specific Plan District in accordance with SSFMC chapters 20.57, 20.85, 20.86 & 20.120. Continticed from regular meetings of November 12, 2008, December 10, 2008, January 14, 2009 and February 11, 2009. Public Hearing opened: 6:45 p.m. Senior P1amler Beaudin presented the staff report reintroducing the proposed application for a hotel development at 550 Gateway Blvd. The applicant proposed a 166 room Hyatt Place Hotel and was originally scheduled for hearing before the Agency on November 12, 2008. The Hearing was continued to December 10, 2008 and heard at that time. At the December hearing, the Agency provided staff and the applicant with a list of follow-up items, including the Transportation Demand Management ("TDM") Plan, local hiring, sustainable design and a table top model that would demonstrate how the proposed hotel would fit into the Gateway area neighborhood. The staff report focused on these outstanding issues and progress macie since December. Preliminary TDM: Staff updated the Preliminary TDM and included it as an attachment to the staff report. A final TDM Plan would be submitted by the applicant during the Building Permit process. Local Hiring: The agreement, which had been signed by the applicant, included local hiring provisions related to both co~~lstriction and operations. Construction terms established the applicant would use best efforts to hire 15% local. Operations terms extended out five (5) years and applied to 50% of hotel staff. Sustainable Design: The applicant would address this topic, but staff pointed to condition of approval seven (7), which would ensure the incorporation of green features in the overall design. Table Top Model: The applicant would explain why no model was provided. Senior Planner Beaudin closed by stating that if the Agency did not approve the project, staff believed a finding without prejudice was warranted based upon the Gateway Specific Plan. It was no longer prudent to continue the hearing. Applicant Vijay Patel addressed the Agency and provided updates with respect to the outstanding items as follows: REGULAR REDEVELOPMENT AGENCY MEETING MARCH 11, 2009 MINUTES PAGE 3 Table Top Model: The Preliiiiiiiary TDM had been updated and the Local Hiring Agreement was not challenging and lead been signed. Mr. Patel then explained there had been slight changes to the design p>ii~suant to Hyatt Corporate's requests. After three monihs of back and forth oil tilc~e SLlf7~ectS, Hyatt had finally approved the plan as presented iii the staff report. >~ue thE; extended nature of these negotiations, which ended just 10 days ago, the Table Top Model had riot been prepared. SustainaL-le Design: Mr. Patel advised he had investigated energy efficiencies and met with companies that do the work. He stated the size of the roof presented certain limitations to pursuing energy efficiencies, but two (2) of the three (3) concerns could >=-e accommodated. A battery back-up system would take care of emergency egress lighting in the event of a power loss. In addition 59 solar panels situated along the roof line were proposed. Public Hearing closed: 7:00 p.m. Boardmember Gonzalez stated he was prepared to deny the application with prejudice t:o permit the applicant to work on a model. He questioned the amount of time necessary to prepare a model. Mr. Patel advised that depending on the size and scale it would take approximately four (4) - six (6) weeks to prepare a model. Boardmember Garbarina stated he was ready to deny the application with prejudice and provide Mr. Patel with as much tune; as necessary to resolve the remaining issues. Boardmember Mullin stated approval for the overall direction and inclusion of the solar piece. He noted, however, that he would like the benefit of staff's review of the sustainability upgrades. He further stated that although he was not entirely wed to the concept of a model, he would prefer to see one. Accordingly, he encouraged Mr. Patel to move forward and come back beforE; the Agency when the outstanding issues were resolved. Boardmember Garbarino commendE;d Mr. Patel for moving forward with the project given the current economic climate. He stated that production of a model was significant because when approvals had been granted based on conceptual rendering in the past, the final project did not yield the desired result. Vice Chairman Addiego appreciated the majority of the Agency's request for a model, but stated he was more interested in the direction on hiring requirements for employees of the hotel. He noted the local hiring terms pertained to San Mateo County. He questioned the benefit of excluding residents of Saii Francisco. He commented that he would prefer a smaller local hiring requirement confined to residents of South San Francisco. Counsel Mattas explained the definition of San Mateo County set forth in the agreeme~lt applied to both criteria, including construction and operations. San Mateo County was selected to address the construction issue. He noted that if the Agency desired to modify the percentage and the geographic designation for operations, this change could be made. REGULAR REDEVELOPMENT AGENCY MEETING MARC)~ 11, 2009 MINUTES PAGE 4 Mr. Patel noted that his Company had operated the Hampton Inn in the Gateway area for t he past seven (1)years. Only one (1.1 elr~ployee of the Hampton Inn lived outside of pan Mateo Co.xnty and 97% of t11e employees lived within a seven (7) mile radius of the li~~~tel. Based upon Mr. Patel's comments, Vice Chairman Addiego stated that local miring criteria for operations might be superfluous. It might be better to strike the language and trust i.r_ market forces. Counsel Mattas stated that if the Agency were to deny the application without prejudice the applicant could come back when prepared to provide the additional detail mentioned, including a table top model and ei~llanced information relating to the sustainability features. The Agency could further provide staff with direction on revisions to the Local Hiring Agreement. Chairwoman Matsumoto recommended maintaining the portion of the Local Hiring Agreement pertaining to constnlctio:n, but eliminating the portion pertaining to operations. Mr. Patel stated that he would be agreeable to this revision. Chairwoman Matsumoto questioned the procedure for bringing the applicant back if a table top model could be prepared within four (4) to six (6) weeks. Counsel Mattas advised that if the Agency denied the application without prejudice, the time period would start anew upon the applicant's submission of new data. Accordingly, a public hearing would be noticed and. the item would be brought back before the Agency. Mr. Patel stated that as an applicant he had done everything requested. He understood the importance of the model and respecl;ed the need for it, but noted he was facing a time constraint imposed by Hyatt Hotels and could be close to missing the opportunity to work with Hyatt on the project. Counsel Mattas as advised the City could be prepared to hear the application at the April 8th regular meeting of the Agency; l~~owever, it would be up to the developer to have a model prepared by this time. Vice Chairman Addiego stated he did not need to see a model, but three (3) of the Agency members wanted one. Boardmember Gonzalez stated a model was important because it would provide the community with insight as to the planned development. Boardmember Garbarino stated the model did not have to include topography and landscaping. Mr. Patel requested an approval with conditions. Boardmember Mullin stated his primary concern was not the lack of a model, but, rather, the sustainability issues that had just been presented that evening. REGULAR REDEVELOPMENT AGENCY MEETING MARCH 11, 2009 MINUTES PAGE 5 Chairwoman Matsumoto requested the Board's preference. %ice Chairman Addiego slated that although he would make a motion to apr, ove, it appeared as though the Board was leaning ire favcr of denial of the application without rrej~~dice. Counsel Mattas stated he understood the Agency to be in favor of a finding of denial without prejudice with direction to staff that the project come back before the Agency when sustainability design features could be better explained and a model is prepared b;y the applicant. In addition, the Local Hiring Agreement would be modified to maintain the construction terms as drafted, but the; operations piece would be eliminated. Motion - Boardmember Mullin/Second - Boardmember Gonzalez: to deny the application without prejudice and to direct staff 1:hat the project come back before the Agency when sustainability design features could be better explained and a model is prepared by the applicant. In addition, the Local Hiring Agreement would be modified to maintain the construction terms as drafted, but thE; operations piece would be eliminated. Unanimously approved by voice vote. Recess: 7:29 p.m. Meeting Resumed: 8:40 p.m. Chairwoman Matsumoto recognized- Koray Ergur who had s>>bmitted a public comment card pertaining to Closed Session Item No. 9. Mr. Ergur addressed the Agency and advised he was prepared to use the justice system to hold staff and others responsible for actions pertaining to the property located at 938 Linden Avenue. Recess: 8:45 p.m. Meeting Resumed: 8:55 p.m. CLOSED SESSION Prior to entering Closed Session it was announced that Vice Chairman Addiego would not participate in discussions pertaining to Closed Session Items 9 and 10 due to potential conflict of interest. Closed Session opened: 8:55 p.m. Open Session resumed: 10:4` p.m. REGULAR REDEVELOPMENT AGENCY MEETING MARCH 11, 2009 MINUTES PAGE 6 7. Conference v~~ith F.eai Property Negotiator (Pursuant to Govei-r:.ent Code section 54956.8) Property: 4 ~ 5-4i? Grand Avenue. Negotiating Parties: Dalai Met~vaili and SSF RDA Hgency negotiator: Mariy Vail Duyn. Under egotiation: Terms an.c1 Conditions for Purchase of Property. Report Out of Closed Session: Direction given. 8. Conference with :Legal Counsel: Existing Litigation (Pursuant to Government Code section 54956.9(x)) South San Francisco Redeve'.~opment Agency v. Clear Channel. Report Out of Closed Session: Direction given. 9. Conference with Real Property Negotiator (Pursuant to Goveriunent Code section 54956.8) Property: 938 Linden Avenue. Negotiating Parties: 15SSF I)EV, LLC and SSF RDA Agency negotiator: Marty Van Duyn. Under Negotiation: Terms and Conditions for Purchase of Property. Report Out of Closed Session: Direction given. 10. Conference with Real Property Negotiator (Pursuant to Goverrunent Code section 54956.8) Property: 344 Grand Avenue; Negotiating Parties: St Vincent de Paul and SSF RDA Agency negotiator: Marty Van Duyn. Under Negotiation: Terms and Conditions for Purchase of Property. Report Out of Closed Session: Direction given. ADJOURNMENT Being no filrther business, Chairwoman Matsumoto adjourned the meeting at 10:45 p.m. Submitted by: ~""r/ to Ma ~nelli-Larson, Clerk City o outh San Francisco Approved: Karyl Matsumoto, Chairwoman City of South San Francisco REGULAR REDEVELOPMENT AGENCY MEETING MINUTES MARCH 11, 2009 PAGE 7 ' '.~' 1~i~T ~T~L ~ ° ~'' ''' , SPECIAL MEETING G REDEVELOPMENT AGENCY ~ ~ CITY CF SOU T H SAN FRANCISCO c'°LrFOR~~~ & CITY COUNCIL OF THE CIT'i' OF SGUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 MUNICIPAL BUILDING COMMUNITY ROOM 33 ARROYO DRIVE SOUTH SAN FRANCISCO WEDNESDAY, MARCH 25, 2009 City Council Meeting Called to Order: 6:33 p.m. Redevelopment Agency :Meeting Called to Order: 6:33 p.m. City Council and Redevelopment A4;ency Roll Call: Present: Councilmen/Boardmembers* Garbarino, Gonzalez and Mullin, Vice Mayor/Vice Chairman Addiego and Mayor/Chairwoman Matsumoto. Absent: None. *For reporting purposes, Participants are referred to by their titles affiliated with the City Council. Public Comments -Comments were limited to items on the Special Meeting Agenda. None. Closed Session opened: 6:35 p.m. Open Session resumed: 7:02 p.m. Recess: 7:02 p.m. Meeting resumed: 10:05 p.m. Closed Session resumed: 10:05 p.m. Open Session resumed: 11:45 p.m. 2. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code ~ 54956.8) Property under negotiation: City Owned Property at Oyster Point Marina (APN #'s 015-010-240, 015-010-260, 015-010-270, 015-010-500, 015-010-600, 015- 010-630, 015-190-170, 015-190-190) Agency negotiator: Marty Van Duyn Negotiating Parties: City of Mouth San Francisco, South San Francisco Redevelopment Agency, and Oyster Point Ventures, LLC. Report out of Closed Session: Direction given. 3. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code § 54956.8) Property under negotiation: 296 Airport Boulevard Agency negotiator: Marty Van Duyn Negotiating Parties: South Sian Francisco Redevelopment Agency and the California Department of Transportation. Report out of Closed Session: Direction given. 4. Adjournment of City Council Meeting and Redevelopment Meeting. Being no further business, Mayor Matsumoto adjourned the meeting at 11:45 p.m. Submitted by: (~ ~` ~ j to Martinelli arson, City lerk: City of South San Francisco Clerk, Redevelopment Agency Approved: Karyl Matsumoto, Mayor City of South San Francisco Chairwoman, Redevelopment Agency SPECIAL REDEVELOPMENT AGENCY AND CITY COUNCIL MEETING MARC~Ei 25, 2009 MINUTES PAGE 2 Ks ~o~~,,,,,~~ o ,~ v o ~~LIFOR~~~ I certify that the demands set forty:. on this payment register are accurate and funds are available for p~.* ~` r`~ t DAT.~D: s` « ~ ~ ~ ~+`d as ~ ff~~INANCE DIRECTOR ~~ *Note: Items beloVr do not include payroll related payments Checks: Date Amount 03/11/09 $ 6,199.64 03/18/09 2:?,065.81 03/25/09 129,276.33 04/01/09 20,072.43 RDA AGENDA ITEM # 2 Electronic Payments: Date Amount To Description 03/.31/09 260,507.31 Bank of New York Debt Service Total Payments $ 43$,121.52 This is to certify that the above bills were confirmed at the regular meeting of the Redevelopment Ager.~cy of South San Francisco held April 8, 2009. 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L7 L7 C7 L7 L7 L7 E~ E-+ H r r+ r E' H Ei ^~ Fy ~ ~ ~ H H H ~ w w w ~ Q ~ w w ~ .[ w~ a a a a a a v U U ~ ~ 0 0 0 0 0 0 ~ ~ :~ ~ ~ z a a a a w a w w w 0 0 0 0 0 0 v L7 W W W W W W :- H H Q Q Q Q W W ' c, o O i a ~ a x a a a =7 i a ry [~. ~ w ~ w M c N O O N a H 0 Ei a 0 Q z w M N O O N H 0 E~ Q 0 m x 0 v W a m RDA A GENDA ITEM # 3 °~H S ~ ~edevelo meat A enc p g y y Sta Re opt .f .f ALj ~~~ p FOR DATE: April 8, 2009 TO: Redevelopment Agency Board FROM: Marty Van Duyn, A;>sistant Executive Director SUBJECT: A RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO WAIVE RENT INCREASES FOR THE SITIKE COUNSELING CENTER FOR ONE YEAR RECOMMENDATION It is recommended that the Redevelapment Agency Board adopt a resolution authorizing the Executive Director to waive rent increases for the Sitike Counseling Center for one .year. BACKGROUND/DISCUSSION The Housing and Community Develapment Division seeks to support organizations providing services to our local residents. The current economic situation has increased the number of individuals seeking aid at the various non-profit agencies serving our community. The higher number of resident's requiring assistance has re:>ulted in expenses that many organizations did not budget for during the last fiscal year. Sitike Counseling Center is currently facing this situation. Sitike operates out of a Redevelopment Agency owned building located at 306 Spruce Avenue. During their Community Development monitoring visit this year, they mentioned the need to cut costs if they were to avoid laying-off staff and cutting services. One possible way to cut expenses would be to waive their yearly 5% rent increase. Staff has determined that a rent increase waiver is a simple way for our office to assist this organization while maintaining a high level of service. In light o:f current economic conditions, a rental waiver is also a prudent business decision for keeping the building fully occupied. It is common practice during difficult economic times to waive rental increases. This is done to prevent tenants from taking advantage of lower rental costs and to support long time tenants. By allowing the Executive Director to have the flexibility to waive rental increases on an as needed basis, the City can quickly and efficiently meet the economic needs of our office as well as t:he needs of our tenants. Sitike Counseling Center serves a wide array of individuals and supports the counties only special program designed to help mothers with their children. Last year, Sitike Counseling Center served 66 local residents in need of counseling services. A total of 85% of these individuals were classified as Extremely Low Income meaning that the;ir household is at or below 30% of the Area Median Income levels. Staff Report Subject: Resolution for Sitike Counseling; Center Page 2 FUNDING The Housing and Community Development Staff has determined this step would significantly ease the financial burden of Sitike Counseling Center without causing any significant repercussions to the Agency's current budget. The office space in question is renting for $6,882.75 per month. A 5% increase would total an additional $344.14 per month or $4,129.65 per year. Staff has deem~.ed this as an acceptable revenue deferment. Furthermore, the current asking rents in our downtown area are averaging around $1 to $1.50 per square foot. Sitike is currently being charged about $1.21 per square foot which is comparable with t:he prices of the current market. CONCLUSION It is recommended that the Redevelopment Agency Board adopt the Resolution authorizing the Executive Director to waive rent increases for the Sitike Counseling Center for one year. This waiver will help the City maintain service levels at the Sitike Counseling Center without causing. stress to the Agency's current budget. By Marty Van Duyn Assistant Executi Attachment: Resolution Approved: ~ . Nagel Executive Director 1214874.1 RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO WAIVE RENT INCREASES FOR THE SITIKE COUNSELING CENTER FOR ONE YEAR WHEREAS, the Redevelopment Agency Board seeks to support organizations that provide important services for residents of South San Francisco; and WHEREAS, during economic recessions, non-profit organizations such .as the Sitike Counseling Center ("Sitike") cope with a rising demand for services, higher operating costs, and decreased funding; and WHEREAS, Sitike is a tenant of the Redevelopment Agency that provides substance abuse treatment services for individuals in the City; and WHEREAS, staff recommends that the Redevelopment Agency Board waive Sitike's 2009 rent increase to assist Sitike in its effort to maintain a high quality and level of services. NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency Board of the City of South San Francisco hereby: 1. Authorizes the Executive Director to waive Sitike's yearly 5%~ rent increase for 2009. 1 I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the day of 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: 1214881.1 ATTEST: City Clerk 2 .~ ~ RDA A GENDA ITEM # 4 ~ ~~~zx„s~,~ o - ~ Redevelo ment A enc p g y Sta Re opt ~. .ff p '~LIFOR~1 DATE: April 8, 2009 TO: Redevelopment Agency Board FROM: Marty Van Duyn, Assistant Executive Director SUBJECT: A RESOI~UTION AUTHORIZING THE PROVISION OF AN $88,000 LOAN TO TIPTON METRO, LLC FOR THE METROPOLITAN HOTEL, AUTHORIZING THE EXECUTION OF LOAN DOCUMENTS IN CONNECTION WITH SUCH FINANCING, AND APPROVING AN AMENDMENT TO THE REDEVELOPMENT AGENCY'S OPERATING BUDGET RECOMMENDATION It is recommended that the Redevelopment Agency Board approve a Resolution authorizing an X88,000 loan to Tipton Metro, LLC for payment of outstanding property taxes; authorizing the execution of loan documents in connection with such loan, including an Amended and Restated Rent Regulatory Agreement extending the period of affordability at the Metropolitan ]Motel from 25 years to 35 years; and approving a budget amendment to the Redevelopment Agency's Operating Budget. BACKGROND/DIS CUS SION The Metropolitan Hotel, located at 220 Linden Avenue, is a 62 unit single room occupancy (SRO) hotel with commercial space on the ground floor occupied by Thai Satay Restaurant, the Wine Vault and Rodelca Enterprises. The Metropolitan Hotel occupies a prominent corner in the City's downtown and is listed in the National Register of Historic Places. In October 1995, the Redevelopment Agency adopted Resolution 123-95 approving an Owner Participation Agreement (OPA) between the Redevelopment Agency, Martin Metro, Inc and Tipton Management Company to rehabilitate and seismically retrofit the building. Pursuant to the OPA, the Agency provided a $893,950 loan and the City provided a $430,000 HOME grant for the project. In consideration for the Agency and City loans, Martin Metro and Tipton Management Company entered into a Rent Regulatory Agreement with the Agency which required all of the SRO units be rented to low-income tenants at an affordable rent for a period of 25 years. In 1997, the OPA was amended to provide an additional $200,000 to Titpon Management Company to complete the rehabilitation. Staff Report Subject: Metropolitan Hotel Loan Page 2 In 1998, the OPA was amended a second time to provide an additional $100,000 to Tipton Management Company for improvements to the retail space to attract a quality restaurant. In addition, the Agency approved assigiunent of the OPA to Tipton Metro, LLC. In connection ~avith the assigrunent, Tipton Metro executed a promissory note in the amount of $1,742.060 evidencing all prior Agency and City loans provided to Tipton Management pursuant to the OPA. In 2006, Tipton Metro purchased the property from Martin Metro. Following such purchase, t11e County reassessed the value of the property. The new assessed value of the property is more than six times the previous assessment value. As a result, the County recently issued Tipton :Metro a retroactive tax bill in the amount of $88,000. The retroactive tax bill has caused Tipton Metro a short-teen cash-flow problem because the revenue generated by the rent controlled affordable units and the commercial space is insufficient to cover such an uncommon expense. Therefore., Tipton Metro has requested an Agency loan in the amount of $88,000 to help pay the retroactive tax bill in return for agreeing to extend the affordability of the SRO units for an additional ten years. The proposed loan would be amortized over five years and carry a simple interest of four perce~~t (4%). The rent revenue generated from the property will be sufficient to repay the Agency loan and to pay the mortgage and the on-going property taxes in the future years. It should be noted that the Agency's financial assistance to Tipton Metro and its predece:;sor has resulted not only in the long-term preservation of affordable housing and the beautification of a historic building in the Downtown, but has also resulted in increased tax revenue to the Ager.~cy. The reassessment of the property has increased tax increment in the Downtown Central Redevelopment Project Area by $18,000 per year. This is an excellent example of how Redevelopment .Agency expenditures and partnerships benefit the community on many levels. FUNDING Funds in the amount of up to $88,000 are currently available for the proposed loan upon Agency Board approval of a budget amendment to the Redevelopment Agency's (80%) Operating Budget in the amount of $20,000, and a budget amendment to the Agency's Low gild Moderate-:[ncome Housing Fund ("Low/Mod Fund") Operating Budget in the amount of $68,000. CONCLUSION It is recommended that the Redevelopment Agency Board approve a Resolution authorizing an $88,000 loan to Tipton Metro, LLC for payment of outstanding property taxes, authorizing the execution of loan documents in connection with such loan, including an Amended and Restated Rent Regulatory Agreement that extends the period of affordability at the Metropolitan Hotel from 25 years to 35 years, and approving a budget amendment to the Redevelopment Agency's Operating Budget. Staff Report Subject: Metropolitan Hotel Loan Page 3 arty Van Duyn Assistant Executive Di ctor Approved• ai-r .Nagel '~ Executive Director Attachment: Resolution Loan Agreement Amended and Restated Rent Regulatory Agreement Secured Promissory Note Deed of Trust ..°3 1216311.2 RESOLUTION NO REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION A1:JTHORIZING AN $88,000 LOAN TO TIPTON METRO, LLC FOR PAYMENT OF PROPERTY TAXES, AUTHORIZING EXECUTION OF LOAN DOCUMENTS IN CONNECTION THEREWITH, AND APPROVING AN AMENDMENT TO THE REDEVELOPMENT AGENCY'S OPERATING BUDGETS WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Agency") is a redevelopment agency existing pursuant to the Community Redevelopment Law, California Health and Safety Code Section 33000, et seq. (the "CRL"), and pursuant to the authority granted thereunder, has the responsibility to carry out the Redevelopment Plan ("Redevelopment Plan") for the Downtown/Central Redevelopment Project Area ("Project Area "); and WHEREAS, Tipton Metro, LLC, a California limited liability company ("Owner") purchased the real property located at 220 Linden Avenue in South San Francisco, California ("Property") in 2006; and WHEREAS, Owner operates a 62-unit single room occupancy hotel on the Property known as the Metropolitan Hotel ("Metropolitan Hotel"}; and WHEREAS, the Property is subject to a Rent Regulatory Agreement dated April 30, 1996 executed by the Agency and Owner's predecessor in interest, Tipton Management Company, Incorporated ("1996 Rent Regulatory Agreement"); and WHEREAS, the 1996 Rent Regulatory Agreement requires Owner to rent all of the units in the Metropolitan Hotel to very low-income households at affordable rents for a period of 25 years; and WHEREAS, in connection with Owner's purchase of the Property in 2006, the San Mateo Cowlty Assessor's office reassessed the value of the Property and the improvements thereon; and WHEREAS, as a result o:f such reassessment, Owner recently received a retroactive tax bill in the a.~nount of $88,000; and WHEREAS, $68,000 of the outstanding taxes is related to the residential portic-n of the Property and the remaining $20,000 is related to the commercial portion of the Property; and WHEREAS, the revenue generated from the Metropolitan Hotel is insufficient to cover the additional taxes; and WHEREAS, Owner has requested, and Agency has agreed, to provide a loan to Owner in the amount of $88,000 for payment of the additional taxes ("Loan"); and WHEREAS, the Agency will. fund the Loan using $68,000 from its Low- and Moderating Income Housing Fund ("Low/Mod Fund") and $20,000 from its non- housing funds; and WHEREAS, in exchange for the Loan, Owner has agreed to extend the affordability of all of the units in the Metropolitan Hotel for an additional 10 years; and WHEREAS, the Agency and Owner have negotiated (i) a Loan Agreement ("Loan Agreement"), (ii) a Promissory Note ("Note") in the amount of the Loan, (iii) a Deed of Trust, Assigrunent of Rents, Security Agreement and Fixture Filing which shall provide Agency with a security interest in the Property ("Deed of Trust"); alld (iv) a:n Amended and Restated Rent Regulatory Agreement substantially in the forms on file with the Agency Secretary ("Regulatory Agreement"). The Loan Agreement, the Note;, the Deed of Trust and the Regulatory Agreement are collectively referred to as the "Loan Documents;" and WHEREAS, the Agency has determined that provision of the Loan to Owner pursuant to the terms of the Loan Documents is consistent with the Redevelopment Plan and is in the interests of the health, safety and welfare of the residents of the Project Area and the City of South San Francisco. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that it hereby: 1. Authorizes the provision of the Loan to Owner pursuant to the terms of the Loan Documents. 2. Approves the Loan Agreement, the Note, the Deed of Trust and the Regulatory Agreement substantially in the forms on file with the Agency Secretary. 3. Approves an amendment to the Redevelopment Agency's Operating Budgets. 4. Authorizes the Executive Director of the Agency (or his designee) to execute the Loan Documents substantially in the forms on file with the Agency Secretary; to mane revisions to the Loan Documents, subject to the approval of counsel, which do slot materially or substantially increase the Agency's obligations thereunder; to record the Regulatory Agreement in the Official Records of San Mateo County; to sign all documents, to make all approvals and take all actions necessary or appropriate to carry out and implement the intent of this Resolution. * * * * ~ I hereby certify that the foregoing Resolution was regularly introduced anti adopted by the Redevelopment Agency of the City of South San Francisco at a ineetinl; held on the 8th day of April, 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary 1216759.1 LOAN AGREEMENT This Loan Agreement (this "Agreement") is entered into effective as of 2009 ("Effective Date") by and between Tipton Metiro LLC, a California limited liability company ("Borrower') and the Redevelopment Agency of the City of South San Francisco, a public body corporate and politic ("Agency"). Agency and Borrower are hereinafter collectively referred to as the "Parties." RECITALS A. Borrower is the fee simple owner of that certain teat property located in the Downtown Central Redevelopment Project Area ("Project Area") at 220 Linden Avenue in South San Francisco, California and commonly'known as :San Mateo County Assessor's Parcel Number 012-316-010 ("Property"). B. Borrower operates a 62-unit single -room occupancy ("SRO") hotel on the Property known as the Metropolitan Hotet ("Metropo tan Hotel"). C. The Property is subjecfito an Owner Participation Agreement by and between the Agency and Borrower's predecessor in interest, Tipton Management Company, Incorporated ("Tipton Management") pursuant to which Agency provided a loan to Tipton Management for the purposes of rehabilitating and seismically retrofitting the Metropolitan Hotel.. C. In consideration for the Agency's loan, the Agency__an'd Tipton Management executed a Rent Regulatory Agreement dated April 30, 1996 ("1996 Regulatory Agreement") which requires all of the SRO units in the Metropolitan Hotel to be rented to .very low-income .tenants at affordable rents for 25 years. D`. In'eonnection with Borrower's purchase of the Property in 2006, the San Mateo County Assessor's office reassessed the value of the Property and the improvements located thereon ("Improvements"j. E. As a result of such reassessment, Borrower recently received a retroactive tax bill in the amount of $88,000. F. The retroactive tax .bill has created ashort-term cash flow problerri for Borrower because the revenue generated by the Metropolitan Hotel is insufficient to cover the additional taxes. C. Borrower has requested, and Agency has agreed to provide a loan in the amount of $88,000 (the "Loan") pursuant to the terms and conditions hereof for the purpose of paying the outstanding property taxes. D. In consideration for the Agency's Loan, Borrower has agreed to extend the affordability of the SRO units for an additional ten years. -P. 5 D. The Agency has determined that provision of the Loan to Borrower pursuant to the terms of this Agreement is consistent with the redevelopment plan for the Project Area and is in the interests of the health, safety and welfare of the residents of the Project Area and the City of South San Francisco ("City"). E. Concurrently herewith Borrower shall execute a promissory note ("2009 Note") in the amount of the Loan, an Amended and Restated Regulatory Agreement ("2009 Regulatory Agreement"), and a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("2009 Deed of Trust") which shall provide Agency with a security interest in the Property and the Improvements. 'This Agreement, the 2009 Deed of Trust, the 2009 Note and the 2009 Regulatory Agreement are collectively hereinafter referred to as the "Loan Documents." NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. ARTICLE 1 ~C~7~ i~~ ~~~`? 1.1 LOAN AND NOTE. Agency agrees to loan to Borrower, and Borrower agrees to borrow from and repay to Agency, the sum of Eighty-Eight Thousand Dollars ($88,000) upon the terms and conditions and for the purposes set forth in this Agreement. The Loan shall be evidenced by the 2009 Note which shall be dated as of the Effective Date and executed by Borrower:-substantially in the form attached hereto as Exhibit B. The 2009 Note shall be secured by the 2009 Died of Trust executed by Borrower as trustor for the benefit of the Agency substantially in the form attached hereto as Exhibit C. Provided that' Borrower has complied with all conditions precedent to disbursement of the Loan set forth in Section 2.3, the Loan Proceeds shall be disbursed in accordance with Section 2.2 hereof. Agency shall disburse Loan Proceeds only for the :purposes set .forth in Section 2.1. 1.2 INTEREST RATE; PAYMENT_DATES; MATURITY DATE. Interesir shall accrue on the outstanding principal balance of the Loan at a rate of four percent (4%) simple interest per annum. Monthly payments shall be due and payable in accordance with the terms set forth in the 2009 Note. The entire outstanding principal balance of the Loan together with accrued interest and all other sums due under the Loan Documents shall be payable in full on the fifth (5th) anniversary of the Effective Date (the "Maturity Date"). Notv-)ithstanding the foregoing, the Agency shall have the right to accelerate the Maturity Cate and declare all sums payable under the 2009 Note immediately due and payable upon the occurrence of an Event of Default. 1.3 SECURITY. As security for repayment of the 2009 Note, Borrower shall execute the 2009 Deed of Trust in favor of Agency as beneficiary pursuant to which Agency shall be provided a lien against Borrower's interest in the Property and the Improvements. The Deed of Trust shall be dated as of the Effective Date, shall k-e -P. 6 substantially in the form attached hereto as Exhibit C, and shall be recorded in the Official Records of San Mateo County ("Official Records"). The Deed of Trust may be subordinated to such liens and encumbrances as Agency shall approve in writing. 1.4 PREPAYMENT; ACCELERATION. (a) Prepayment. The Note or any portion of the outstanding principal balance due under the Note may be prepaid at any time and from time to time, without penalty or premium. Any prepayment of principal must be accompanied by interest accrued (if any) but unpaid to the date of receipt of prepayment. Prepayments shall be applied first to accrued but unpaid interest (if any) and then to principal. Prepayments of the Note shall not affect the term of the 2009 Regulatory Agreement. (b) Due On Transfer. Unless Agency agrees otherwise in writing, the entire unpaid principal balance and all interest and -other sums accrued under the Note shall be due and payable upon the Transfer absent the prior written consent of Agency, of all or any part of or interest in the Property. "Transfer" shall include any assignment, sale or other conveyance of the Property or the Improvements: ARTICLE II USE AND DISBURSEMENT OF PROCEEDS 2.1 USE OF PROCEEDS. Borrower shall use the proceeds of the Loan ("Loan Proceeds") solely and exclusively to pay for property taxes billed to Borrower by the County of San Mateo. 2.2 DISBURS;E~ILENT OF PROCEEDS: Provided that Borrower has satisfied all of the conditions set forth in Section 2.3, the Loan Proceeds shall be disbursed to __ Borrower within thirty (30) days of the Effective Date. 2;3 CONDITIONS PRECEDENT TO DISBURSEMENT OF PROCEEDS. Agency's obligation to find the Loan and disburse the proceeds thereof is conditioned upon the satisfaction of all of the following conditions: (a) Borrower's execution and delivery to Agency of this Agreement, the 2009 Note, the 2009 Deed of Trust and the 2009 Regulatory Agreement; (b) Recordation'of the 2009 Deed of Trust and the 2009 Regulatory Agreement in the Official,'Records. (c) Borrower's delivery to Agency of each of the following: (i) certificate of good standing, certified by the Secretary of State indicating that Borrower is in good standing and authorized to do business in the State of California, (ii) a certified resolution indicating that Borrower has authorized this transaction and that the persons P. 7 executing the Loan Documents on behalf of Borrower have been duly authorized to do so, and (iii) certified copy of Borrower's LLC-1 and operating agreement. (d) No material adverse change as determined by Agency in its reasonable judgment shall have occurred in the condition of the Property or in the financial or other condition of Borrower since the date of this Agreement. 2.4 _NO OBLIGATION TO DISBURSE PROCEEDS UPON DEFAULT Notwithstanding any other provision of this Agreement, the Agency shall have n~o obligation to disburse or authorize the disbursement of any portion of the Loan Proceeds following: (i) the failure of any of Borrower's representations and warranties set forth in this Agreement to be true and correct in all material respects; (ii) the termination of this Agreement by mutual agreement of the Parties; (iii) the conditions fo disbursement of the Loan set forth in Section 2.3 have not been satisfied within 30 days following the Effective Date, unless an extension: of such date is approved.by Agency. in writing; or (iv) the occurrence of any Event of Default hereunder. ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS 3.1 Borrower makes the following representations, warranties and covenants and acknowledges that Agency is relying thereupon in making the Loan: (a) LEGAL STATUS; AUTHORITY; OWNERSHIP. Borrower is a limited liability company duly organized and is in good standing under the laws of the State of California. The persons executing this agreement on behalf of Borrower have been duly authorized to do so. Borrower has all requisite power and authority to execute, deliver and perform its obligations -under the Loan Documents. Borrower is the fee simple owner of the Property and the Improvements, subject only to liens, encumbrancc~s, easements, restrictions, conditions, and other matters of record or disclosed in vrriting to Agency. (b) NO VIOLATION. The execution of the Loan Documents and Borre~wer's performance thereunder do not and will not result in a breach of or constitute a dlefault ~P. 8 under any agreement, indenture or other instrument to which Borrower is a parity or by which Borrower may be bound. (c) AUTHORIZATION. The Loan Documents and the transactions contemplated thereby have each been duly authorized by Borrower, and when executed and delivered will each constitute a valid and binding obligation of Borrower, enforceable in accordance with the respective terms thereof. (d) LITIGATION. There are no pending or to Borrower's knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect the financial condition or operation of Borrower oc Borrower's interest in the Property and the Improvements. (e) COMPLIANCE WITH LAWS. Borrower is n compliance in all material respects with all local, state and federal laws,-rules, regulations, orders and decrees which are applicable to the Property or to Borrower. in relation thereto ("Applicable Law") including without limitation, all environmental, health and safety and employment laws. Borrower has received no notice from any governmental authority regarding ..any threatened or pending zoning, building, fire, or health node violation or violation of -other governmental regulations concerning the Property that has not been corrected, and no condition on the Property violates any Applicable Law. (f) DISCLOSURE. No representation or warranty made by Borrower in this Agreement or in the-Loan Documents contains any untruestatement of a material fact or omits to state. any material fact necessary fo make the statements therein not misleading. There is 'no fact known to Borrower which has or might reasonably be anticipated to have a material adverse effect on the business, assets, financial condition of Borrower which has not :been disclosed to Agency in writing. ARTICLE IV AFFIRMATIVE COVENANTS 4.1 USE OF FUNDS. Borrower-covenants that it shall use the Loan Proceeds solely for purposes set forth in Section 2.1. 4.2 PUNCTUAL PAYMENT. Borrower covenants to punctually pay the principal balance of the'-2009 Note and interest (if any) accrued thereon at the tirnes and place and in the manner specified in the Note. 4.3 ACCOUNTING RECORDS; PROPERTY INSPECTION. Borrower covenants to maintain accurate books and records relating to the operation of the Metropolitan Hotel and the Loan in accordance with standard accounting principles consistently applied, and to permit the Agency, during business hours and upon reasonable notice to inspect, audit and examine such books and records and to iinspect the Property during normal business hours upon reasonable notice to ensure compliance with this Agreement. ~P. 9 4.4 COMPLIANCE WITH LAWS. Borrower covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the operation of the Metropolitan Hotel. Without limiting the generality of the foregoing, Borrower shall comply with all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. 4.5 INSURANCE. Borrower shall maintain and keep in force at Borrower's expense, insurance coverage with respect to the Property and the Improvements in accordance with the requirements set forth in Exhibit A attached hereto .and incorporated herein. 4.6 FACILITIES. Borrower shall keep the Property and the Improvements, and the personal property used in Borrower's operations in good repair and condition, and from time to time make necessary repairs; renewals and replacements thereto so that the Property and Improvements shall be preserved and maintained. 4.7 INDEMNIFICATION: Borrower shall indemnify, defend (with coun:5el approved by Agency), and hold harmless the Agency, the City, and their respective elected and appointed officials, officers., agents, employees, consultants and contractors (collectively, the Indemnitees"), from and against, and shall pay on demand, any and all losses, liabilities, damages, costs, claims, demands, penalties, deficiencies, fines, orders, judgments, actions; suits, judicial or ,administrative proceedings, injunctive or other relief, expenses- and :charges (including,attorneys` fees and court costs) (collectively "Claims") arising directly or indirectly in any manner in connection with or as a result of (a) any .breach of Borrower's covenants under the Loan Documents, (b) any failure of Borrower's representations and warranties to be true and correct in all material respects when made, (c) injury or death to persons or damage to property or other loss occurring on the Property, whither caused by the negligence or any other act or .omission of Borrower-or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, or (d) any claim; demarid or cause of action, or any action or other proceeding; whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, the Improvements, the Loan, the Loan Documents, or any.transaction contemplated thereby, or~ any failure of Borrower to comply with all applicable state, federal and local laws and regulations in connection with the operation of he: Metropolitan Hotel, provided that no Indemnitee shalt be entitled to indemnificajion -under this Section for matters caused by such Indemnitee's gross negligence orwillful-misconduct. The obligations of Borrower under this Section shall survive the expiration or termination of this Agreement and the making and repayment of the Loan. 4.8 TAXES AND OTHER LIABILITIES. Borrower shall pay and discharge when due any and all indebtedness, obligations, assessments, taxes, including federal and state payroll and income taxes which are the obligations of Borrower in relation to the Property or the Improvements except those that Borrower may in good faith ~:,ontest P.10 or as to which a bona fide dispute may arise, provided provision is make to the satisfaction of Agency for eventual payment thereof in the event that it is found that the same is an obligation of Borrower. 4.9 NON-DISCRIMINATION. Borrower shall not restrict the rental, stale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or Improvements, or any portion thereof, on the basis of race, color,. religion, creed, sex, sexual orientation, marital status, ancestry, or national original of any person. Eorrower covenants for itself and all persons claiming under or through it, and'this Agreement is made and accepted upon and 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 any basis listed in subdivision (a) or (d) of Section 129.55 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Goverrlmenl: Code in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment: of the Property, or any portion thereof, nor shall Borrower or any person claiming undE~r or through it 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 property herein transferred. The foregoing provisions shall run with the land, be binding upon any subcontracting parties, successors, assigns and other Frans#erees under this.Agreement and shall remain in effect in perpetuity. All deeds, leases or contracts for the sale,:-lease, .sublease, or other trans>fer of the Property, or any`portion thereof made or entered into by Borrower, its successors or assigns, shall contain therein the .following language: (a) In :Deeds: "The grantee herein.covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed'n subdivision (a) or (d) of Section 12955 of the Government bode, as those bases are defined in Sections 12926, 1295.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease;transfer,.:use, occupancy, tenure or enjoyment of the property herein conveyed, nor shall the grantee or any person claiming undler or through it 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 covenants shall run with the land." (b) In Leases: P.11 "The lessee herein covenants by and for itself and its successors and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the conditions that there shall be no discrimination against or segregation of any person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in SE~ctions 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in t:he leasing, subleasing, transferring, use, occupancy, tenure or enjoyiment of the property herein leased nor shall the lessee or any person claiming under or through it 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 property herein leased." (c) In Contracts: "The contractor herein covenants by and for itself and its successors and assigns, and all persons~~laiming under or through it, and this contract is made and accepted upon and subject to the conditions that there shall be no discrimination against or segregation of any person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,`subdivision (m) and paragraph_(1) of subdivision (p) of Sec#ion 12955, and Section 12955:2 of the Government Code in the leasing, subleasing, ransferring, use, occupancy, tenure or enjoyment of the property herein transferred nor shall the contractor or any person claiming under or through it 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 vendee in the property herein transferred. The foregoing provisions shall be binding upon any subcontracting Parties, successors, `assigns and other transferees under the contract." 4.10 AFFORDABLE HOUSING. Borrower covenants and agrees for itself, its successors and assigns that all of the SRO units in the Metropolitan Hotel shall be rented at an affordable cost to households of ow-income in accordance with the terms the 2009 Regulatory Agreement which the Parties shall execute substantially in the form attached hereto as Exhibit D concurrently with the execution of this Agreement, and which shall be recorded in the Official Records. ARTICLE V EVENTS OF DEFAULT P.12 The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) If Borrower fails to pay when due the principal and interest payable under the 2009 Note and such failure continues for ten (10) days after Agency notifies Borrower thereof in writing. (b) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating o insolvency or relief of debtors ("Bankruptcy Law"), Borrower (i) commences a volun#ary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for:-the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (c) If a court of competent jurisdic#ion enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower in.an involuntary case., (ri) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower~~r substantially all of Borrower's assets, (iii) orders the liquidation of Borrower, or (i~) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Improvements, and in each-case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. (d) 1f the Borrower fails to maintain insurance as required pursuuant to the Loan Documents, and Borrower fails to cure such default within 15 days. (e) If any. representation or warranty contained in the Loan Documents or any certificate furnished in connection with the foregoing or in connection with any request"for disbursement of -Loan Proceeds proves.tb have been false or misleading in any, material adverse respect when made.: (f) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond ariy applicable cure period suchthat the holder of such security instrument has the right to accelerate repayment of such loan. (g) If the Borrower defaults in the performance of any term, provision, covenant or agreement (other than an obligation enumerated in this Article V) contained in this Agreement or in any-other Loan Document, and unless such document specifies a shorter cure period for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which Agency shall have given written notice of the default to Borrower (or such longer time as Agency may agree upon in writing), provided that in each case Borrower commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith. ARTICLE VI P.13 REMEDIES 6.1 REMEDIES AND RIGHTS UPON DEFAULT. Upon the occurrence of an Event of Default, Agency shall have all remedies available to it under law or equity, including, but not limited to the following, and Agency may, at its election, without notice to or demand upon Borrower, except for notices or demands required by law or expressly required pursuant to the Loan Documents, exercise one or more of the following remedies: a) Accelerate and declare the balance of the 2009 Note and interest accrued thereon immediately due and payable; b) Seek specific performance to enforce the: terms of the Loan Docurents; c) Foreclose on the Property pursuant to the 2009 Deed of Trust; d) Pursue any and all other remedies available under law or equity o~.enforce the terms of the Loan Documents and Agency's rights thereunder, 6.2 REMEDIES CUMULATIVE;... Each of the remedies provided herein is cumulative and not exclusive of, and shall not prejudice any other remedy provided in any other Loan Document. The Agency may exercise from time to time any rights and remedies available to it under applicable law, in addition to, and not in -lieu of, any rights and remedies expressly granted in this Agreemen# or in any other instrument or notice, demand or legal .process of any kind. ` ARTICLE ;VII ``MISCELLANEOUS 7.1 NOTICES.. All notices to be.sent pursuant to this Agreement shall be made in writing, and sent to thee-Parties at their respective addresses specified below or to such other address as a Party nnay rtesignate by written notice delivered to the other Party in accordance with this Sectior. ,A11 such notices shall be sent by: (a) 'personal delivery, in which case notice shall be deemed delivered upon receipt; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; (c) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or P.14 (d) facsimile transmission, in which case notice shall be deemed clelivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. Agency: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director Borrower: Tipton Metro LLC 433 Hamilton Palo Alto, CA 94302 Attn: Richard Tipton 7.2 COUNTERPARTS. This Agreement .may be executed in multiple counterparts each of which shall be an original and aN of which taken together shall constitute one and the same instrument_ 7.3 SEVERABILITY. If any term, provision, covenant~.or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and,: obligations of the Parties are materially altered or abridged by such invalidation; voiding or unenforceability. 7.4 LEGAL ACTIONS .ATTORNEYS' FEES. In the-event any legal action is commenced to interpret or to enforce the terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing in any such action shall be entitled to recover against the other Party all reasonable. attorneys' fees and costs incurred in such action. 7.5 CAPTIONSINTERPRETATION. The captions of the Sections and Articles of this-Agreement are for convenience only and are not intended to affect the interpretation or construction of fhe provisions herein contained. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Pasty.. Time is of the essence in the performance of this Agreement. 7.6 FURTHER ASSURANCES. The Parties agree to execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement. 7.7 PARTIES NOT CO-VENTURERS. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. P.15 7.8 GOVERNING LAW; VENUE. This Agreement shall in all respects be construed and enforced in accordance with laws of the State of California without regard to principles of conflicts of laws. The Parties consent to the jurisdiction of any federal or state court in the jurisdiction in which the Property is located (the "Property Jurisdiction"). Borrower agrees that any controversy arising under or in relation to this Agreement or any other Loan Document shall be litigated exclusively in courts having jurisdiction in the Property Jurisdiction. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual-residence or otherwise. 7.9 WAIVER; MODIFICATION AND AMENDMENT. No failure or delay on the part of the Agency in exercising any right, power,. or :remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy hereunder. No modification oi- waiver of any provision of this Agreement, nor any consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which giiven. No notice to or demand on the Borrower in any case shall entitle the Borrower tc~ any other or further notice or demand in similar or other circumstances. No amendment to or modification of this Agreement shall be effective unless and until such amendment or modification is in writing, properly approved in accordance with applicable procedures, and executed by the Parties:.. 7.10 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Parties, and their respective successors and assigns. Notwithstanding the foregoing, Agency's obligation to make the Loan is personal to Borrower, and shall not be assignable by>Borrower by operation of law or otherwise absent the express written consent of Agency, and any such assignment by operation of law or otherwise shall be void. 7.11 NO THIRD PARTY BENEFICIARIES. There shall be no third party beneficiaries o this Agreement. 7.12 ENTIRE AGREEMENT; EXHIBITS. This Agreement, together witr~ the other Loan Documents, constitt~t~s the entire agreement between the Parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written agreements and negotiations between the Parties with respect thereto. Exhibits A:through D attached hereto are incorporated herein by reference as though fully set forth herein. 7.13 SURVIVAL. All representations made by Borrower herein and the provisions of Sections 4.7 and 4.10 hereof shall survive the expiration or termination of this Agreement and the making and repayment of the Loan. The representations of Borrower made herein have been or will be relied upon by the Agency, notwithstanding any investigation made by the Agency or on its behalf. P.16 ~~ 7.14 AGENCY STATUS. Borrower recognizes and agrees that Agency is not a commercial lending institution, but a public agency exercising its authority to protect the public health, safety and welfare,. Any duties or obligations which a commercial lending institution may have to Borrower shall not apply to this transaction except as set forth herein and in the Loan Documents. 7.15 ACTION BY THE AGENCY. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Agency is required or permitted under this Agreement, such action sha11 be in writing, and such action may be given, made or taken by the Agency Executive Director or by any person who shall have been designated by the Agency Executive Director,. without further approval by the Agency governing board. Agency shall use reasonable best efforts to respond to requests for any such approval, notice, dii'~cton, or consent.in a timely manner. 7.16 NON-LIABILITY OF AGENCY AND~AGENCY OFFICIALS, EMPLOYEES AND AGENTS. No member, official, employee or agent of: the Agency shall be _ personally liable to Borrower or any successor in interest to any of the foregoing in the event of any default or breach by the Agency, or for any amount of money which-may become due to Borrower or Borrower's successor in interest or for any obligation of Agency under this Agreement. SIGNATURES ON FOLLaWING PAGE. P.17 1 J IN WITNESS WHEREOF, the Parties have each caused this Agreement to be duly executed as of the date first written above. BORROWER: Tipton Metro LLC a California limited liability company By: Print Name: Title: AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, a public body corporate and politic APPROVED AS TO FORM: Agency Counsel P.18 ~+ Fxhihit A INSURANCE REQUIREMENTS (a) Borrower shall maintain a commercial general liability policy iin the amount of One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate or such other policy limits as Agency may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees.as additional insureds. (b) Borrower and all contractors working on behalf of Borrower shall maintain a comprehensive automobile liability coverage in `the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and n~on- owned vehicles and shall furnish or cause to be furnished to Agency evidence satisfactory to Agency that Borrower and any contractor with.. whom Borrower h,as contracted for the performance of work on the Property or otherwise pursuant tip this Agreement carries workers' compensation insurance as required; by law. Autornobla liability policies shall name the Indemnitees as additional insureds. (c) Borrower shall maintain property insurance covering all risks of loss (other than earthquake), including flood `(if required) for 100% of ` he replacement value of the Improvements with-deductible, if any, in an amount acceptable to Agency, naming Agency as loss payee. (d) Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M. Best's rating of~;no less ,than A: VII. The Commercial General Liabiility and comprehensive automobile.Policies required hereunder shall name the Indemnitees as additional insureds. 'P~operty insurance sha11 name Agency and City as loss payees as their interests may appear: (e) Borrower shall furnish Agency with certificates of insurance in form acceptable-to Agency evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City and Agency of any material adverse change, cancel ation, termination or non-renewal of the cover~~ge at least thirty (30) days in advance`of the effective date of any such material adverse change, cancellation, termination or non-renewal. (f) If any insurance policy or coverage required hereunder is canceled or reduced, Borrower shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Agency and City a certificate showing that they required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Agency or City may, without P.19 further notice and at its option, procure such insurance coverage at Borrower's expense, and Borrower shall promptly reimburse Agency or City for such expense upon receipt of billing from Agency or City. (g) Coverage provided by Borrower shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by Agency or City, and the policies shall so provide. The insurance policies shall .contain a waiver of subrogation for the benefit of the City and Agency. Borrower shall furnish the required certificates and endorsements to Agency, and shall provide Agency with certified copies of the required insurance policies upon request of Agency: P. 2 0 Exhibit B FORM OF PROMISSORY NOTE P.21 Exhibit C FORM OF DEED OF TRUST P. 2 2 Exhibit D FORM OF REGULATORY AGREEMENT P. 2 3 P. 2 4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 P. 2 5 This Amended and Restated Rent Regulatory Agreement (this "Agreement") is entered into effective as of , 2009 ("Effective Date") by and between the Redevelopment Agency of the City of South San Francisco, a public body, corporate, and politic ("Agency") and Tipton Metro, LLC, a California limited liability company ("Owner"). Agency and Owner are hereinafter collectively referred to .as the "Parties." This Agreement amends and restates in its entirety a Rent Regulatory Agreement dated as of April 30, 1996 by and between Agency and Owner's predecessor in interest, Tipton Management Company, Inc..,("Tipton Management"). RECITALS A. Owner owns that certain real property located in-the City of South .San Francisco ("City") at 220 Linden Avenue, known. as Sane Mateo County Assessor's Parcel No. 012-316-010 and more particularly<described in Exhibit A attached hereto (the "Properly"). B. Owner operates a 62-unit single room occupancy ("SRO") hotel {thee "Metropolitan Hotel") on the Property. C. The Property is subject to a Rent Regulatory Agreement dated April 30, 1996 ("1996 Regulatory Agreement") executed by the Agency and Tipton Management. D. The 19.96 Regulatory Agreement provides that all of the SRO units in the Hotel shall be rented at an affordable cost to eligible very low-income (defined below) households for, a ..period of 25 years. E. Subjecf tQ the conditions set forth in the Loan Agreement executed by Owner and Agency and dated as of the date hereof:.,("Loan Agreement"), Agency has agreed to provide to Owner a loan in the amount of Eighty-Eight Thousand Dollars ($88,000) (the "Loan") for the purposes of payingoutstanding property taxes resulting from reassessment of the Property in 2006. 'The Loan is evidenced by a Secured Promissory Note (the "Note") executed,.by Owner and dated as of the date hereof, and is secured by a Deed of Trust, Assignment-:of Rents, Security Agreement and Fixture Filing ("Deed. of Trust") dated as of the date hereof and executed by Owner for the benefit of Agency: The Deed df Trust will be recorded in the Official Records of San Mateo County ("Official Records") substantially concurrently herewith. F. In exchange for the Agency's Loan, Owner has agreed to extend the affordability of all of the SRO units in the Metropolitan Hotel for an additional ten (10) years and to execute andrecord this Agreement. G. The purpose of this Agreement is to regulate and restrict the occupancy and rents of the SRO units in the Metropolitan Hotel for the benefit of the hotel occupants. The Parties intend the covenants set forth in this Agreement to run ~nrith the land and to be binding upon Owner and Owner's successors and assigns for they full term of this Agreement. 1215436.1 2 P. 2 6 NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. 1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. "Actual Household Size'" means the actual number of~persons in the applicable household. "Adjusted for Family Size Appropriate for the Unit" shall be determined consistent with Section 50052.5(h) of the California Heath and Safety Code. "Affordable Rent" means a rent, including u~ifites; that does:not .exceed one- twelfth of thirty percent (30%) of sixty percent (60%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. "Area Median Income" or "AMI" means the median'' iricome for San Mateo. County, California, adjusted for Actual Household Size, as.published by the U.S. Department of Housing and Urban Development ("HUD") pursuant to Section ~i of the United States Housing Act of 1937. "Claims" is defined in Section 10: "Eligible Household'` means a household for which..gross household income upon initial occupancy does not exceed Very Low-Income., "Indemnitees". is=defined-'in Section 10. ."Regulations" means Title 25 of..the California-Code of Regulations. "Restricted Unit`':means a dwelling unit which is reserved for occupancy at an Affordable Rent by Very Low-Income households in accordance with and as set forth in Sections 2.1. and 2.2. "Low-Income" means an annual;gross household income not greater than sixty percent (60%) of the unadjusted ;Area Median Income as published by HUD. 2. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the operation of a SRO hotel.in compliance with the Loan Agreement and the requirements set forth herein.. Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of Agency. 2.1 Affordability Requirements. For a term of thirty-five (35) years 1215436.1 3 P. 2 7 commencing April 30, 1996 ("Commencement Date"), all SRO units in the Metropolitan Hotel shall be shall be both Rent Restricted (as defined below) and occupied (or if vacant, available for occupancy) by Eligible Households who qualify as Low-Income. A dwelling unit shall qualify as "Rent Restricted" if the gross rent charged for such unit does not exceed the Affordable Rent for Very Low-Income households. 2.2 Rents for Restricted Units. Rents for Restricted Units shall be limited to Affordable Rents for Low-Income households. Notwithstanding the foregoing, no tenant qualifying for a Restricted Unit shall be denied con#inued occupancy of a unit in the Metropolitan Hotel because, after admission, such tenant`s adjusted income increases to exceed Low-Income. A household which at initial occupancy qualifies as Low-Income, shall be treated as continuing to be of such .income category so loing as the household's gross income does not exceed 140% of Low-Income. In the event the gross household income of a household that gbalified as Low-Income at initial occupancy exceeds Low-Income, the unit vvll continue to ~be considered as sati>fying the income limit if the unit remains Rent-Restricted. 2.2.1 Notice of Affordability Restrictions on Transfer of Property. Pursuant to the requirements of Ca{ifornia Community Redevelopment Law, Owner and Agency shall execute a Notice of Affordability-Restrictions on Transfer of Property substantially in the form attached hereto as Exhibit C, and shall cause such notice to be recorded substantially concurrently with the recordation of this Agreement. 2.3 No.Condominium Conversion..-Owner shall notconvert the Metropolitan Hotel to condominium or cooperative ownership or sell condominium or cooperative rights to the Metropolitan Hotel or.any part thereof during the~term of this Agreement. 2.4 Non=Discrimination;.: Compliance with' Fair ;Housing Laws. 2.4.1 Fair Housing. Owner' shall comply with state and federal fair housing laws in the marketing aril rental of the units in the Metropolitan Hotel Owner shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.4.2 Non-Discrimination. Owner shall not. restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Owner covenants for ii:self and atl persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases; are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, 1215436.1 4 P. 2 8 nor shall Owner or any person claiming under or through Owner 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, of, or for the Property or part thereof. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith. All deeds, leases or contracts made or entered into by Owner, its successors or assigns, as to any portion of the Property or the Improvements shall contain the following language: (a) (1) In Deeds, the following language shall appear: "Grantee herein covenants by and .for itself, its successors. and assigns, and all persons claiming under: or through it, .that there shall be no discrimination against or segregation of a person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 1.2955 of the Government Code, as those bases. are defined in Sections 12926; 12926.1, subdivision'(m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, tease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall he grantee or any person claiming under or through the grantee establish. or permit,any such practice or practices of discrimination or segregation with reference o the selection, location, nurr~ber, use or occupancy of tenants; lessees; subtenants, sublessees or vendees. in the property herein conveyed. The foregoing covenant shall run with the land." 2) Notwithstanding paragraph (1),'with respect to familial status, paragraph (1) shall not be .construed to :apply to housing for older persons, as defned~~in Section 12955.9 of the government Code. With respect to familial status:,..., nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, >51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955.. of the Government Code shall apply to paragraph (1). (b) (1)'1n Leases, the following language shall appear: "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, crE~ed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee or any 1215436.1 5 P. 2 9 person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees„ sublessees, subtenants, or vendees in the property herein leased." (2) Notwithstanding paragraph (1), with respect to familial statues, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1). (c) In Contracts "There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as chose -bases are definE~d in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955., and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment. of the property nor shall the ransferee or any person claiming under o~ through the transferee establish or permit any such practice or practices of discrimination or segregation with .reference to selection, location; number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land." 3. Reporting- Requirements: 3.1 Tenant Certification: Owner or Owner's authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary.. thereafter, a written certificate containing all of the following in such format and with such supporting documentation as Agency may reasonably require: (a) The identity of each household member; (b) The total gross household income; Owner shall retain. such certificates for not less than three (3) years, and upon Agency's request, shall provide copies of such certificates to Agency and make the originals available for Agency inspection. 3.2 Annual Report; Inspections. By not later than April 30 of each year during the term of this Agreement, Owner shall submit an annual report ("Annual Report") to the Agency in form satisfactory to Agency, together with a certification that the Metropolitan Hotel is in compliance with the requirements of this Agreement. The 1215436.1 6 P. 3 0 Annual Report shall, at a minimum, include the following information for each dwelling unit in the Metropolitan Hotel: (i) unit number; (ii) number of bedrooms; (iii) current rent and other charges; (iv) dates of any vacancies during the previous year; (v) number of people residing in the unit; (vi) total gross household income of residents; (vii) documentation of source of household income; and (viii) the information requirE~d by Section 3.1. Owner shall include with the Annual Report, an income `recertification for each household, documentation verifying tenant eligibility, and such additional information as Agency may reasonably request from time to time in order #o demonstrate compliance with this Agreement. The Annual Report shall conform to the format requested by Agency; provided however, during such time that the Metropolitan Hotel is subject to a regulatory agreement restricting occupancy and./or rents pursuant to requirements imposed in connection with the use of state or federal low-income housing tax credits or tax-exempt financing, Owner may satisfy the requirements of this Section by providing Agency with a copy of compliance reports required in connection with such financing. Owner shall permit representatives of Agency to enter anal inspect the Property and the Metropolitan Hotel during reasonable business hours in order to monitor compliance with this Agreement upon 48-.hours advance nonce of such visit to Owner or to Owner's management agent. 4. Term of Acreement 4.1 Term of Restrictions. This Agreement shall remain. in effect through the 35th anniversary of the Commencement Date, unless the term is extended by mutual agreement of the Parties. 4:2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement haN remain effective and fully binding for the full term hereof, as such may be extended pursuant to Section 4:1, regardless of (i) any sale, assignment, transfer, or conveyance of`the Property or the Metropolitan Hotel or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Loan or (Note, or (iii)-any reconveyance of the Deed of Trust. 4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided; however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the term as such may be extended pursuant to Section 4.1. 5. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects its interest in the Property and the Metropolitan Hotel to the covenants and restrictions set forth in this Agreement. The Agency and Owner hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benE~fit of the heirs, administrators, executors, successors in interest, transferees, and assigns of 1215436.1 7 P. 31 Owner and Agency, regardless of any sale, assignment, conveyance or transfer of the Property, the Metropolitan Hotel or any part thereof or interest therein. Any successor- in-interest to Owner, including without limitation any purchaser, transferee or lessee of the Property or the Metropolitan Hotel (other than the tenants of the individual dwelling units within the Metropolitan Hotel) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, ground lease or other instrument affecting or conveying the Property or the Metropolitan Hotel or any pant thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties.:and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, ground lease or other instrument. If any such contract, deed, ground lease or other instrument has been executed prior to the date hereof, Owner hereby covenants to obtain and deliver to Agency an instrument in recordable form signed by the parties to such contract, deed, ground lease or other instrument pursuant to which such parties acknowledge and accept this Agreement. and agree to be bound hereby. Owner agrees for itself and for its successors that in the event that a court of" competent jurisdiction determines that the covenants herein do not run with the,land, such covenants shall be enforced as equi#able servitudes against the Property and the Metropolitan Hotel in favor of Agency. 6. Property Management; Repair and Maintenance; Marketing. 6.1 Management Responsibilities. `Owner shall be responsible for all management functions with respect to the Property and the.Metrt~politan Hotel, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and. extraordinary repairs, replacement of capital items, and security. Agency shall have. no responsibility for management or maintenance of the Property or the.Metropoltan Hotel. 6.2 Management Entity., Agency shall have the right to review and approve the qualifications of the management entity-.proposed by Owner for the Metropolitan Hotel. The contracting of management services to a management entity shall not relieve Owner of its primary responsibility for proper performance of management duties. The Agency hereby approves Owner as the management entity for the Metropolitan Hotel. 6.3 Repair, Maintenance and Security. Throughout the term of this Agreement, Owner shall at its own expense, maintain the Property and the Metropolitan Hotel in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Owner agrees to maintain the Metropolitan Hotel and the Property (including without limitation, the residential units, common areas, meeting rooms, landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance, debris, unmaintained 1215436.1 R P. 3 2 landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Metropolitan Hotel. Owner shall prevent and/or rectify any physical deterioration of the Property and the Metropolitan Hotel and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Owner shall provide adequate security services for occupants of the Metropolitan Hotel. 6.3.1 Agency's Right to Perform Maintenance. 1n the..event that Owner breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) days after written notice from Agency (with fiespect to graffiti, debris, and waste material) or thirty (30) days after written notci? from Agency (with respect to landscaping, building improvements and general maintenance), then: Agency, iin addition to any other remedy it may have under this Agreement or at law,or in equity, shall have the right, but not the obligation, to enter upon the Property and';perform all acts and work necessary to protect, maintain, and ,preserve the improvements and the landscaped areas on the Property. All costs expended by Agency in connection-....with the foregoing, shall constitute an indebtedness secured by the Deed of Trust, and shall be paid by Owner to Agency upon demand. All such sums remaining unpaid thirty (30) days following delivery of Agency's invoice therefor shall bear interest at the lesser of 10% per annum or the highest rate permitted by applicable lave. Notwithstanding anything to the contrary set forth in this'Section, Agency agrees.that it will provide Owner with not less than thirty (30) days' written notice prior to undertaking any work for which Owner will incur a :financial obligation. 6.4 Reserved. 6.5 Reserved 6.6 Fees, Taxes, and Other Levies. Owner shall be responsible. for payment of,all fees, assessments taxes, charges; lien`s and levies applicable to the Property or th"e Metropolitan Hotel, including without limitation possessory interest taxes, if applicable, ~~mposed by any public entity.,.., and shall pay such charges prior to delinquency.~However, Owner shall not be required to pay any such charge so long as (a) Owner is contesting such charge in .good faith and by appropriate proceedings, (b) Owner maintains reserves adequate to pay any contested liabilities, and (c) on final determination of -the proceeding ar contest, Owner immediately pays or discharc~es any decision or judgment rendered against it, together with all costs, charges and interest. 6.7 Insurance Coverage. Throughout the term of this Agreement Owner shall comply with the insurance requirements set forth in Exhibit B, and shall, at Owner's expense, maintain in full force and effect insurance coverage as specified in Exhibit B. 6.8 Property Damage or Destruction. If any part of the Metropolitan Hotel is damaged or destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced within one hundred twenty (120) days after the damage or loss 1215436.1 9 P. 3 3 occurs and shall be completed within one (1) year thereafter or as soon as reasonably practicable, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financiallly feasible. During such time that lenders or low-income housing tax credit investors providing financing for the Metropolitan Hotel impose requirements that differ frc-m the requirements of this Section the requirements of such lenders and investors shall prevail. 7. Recordation; Subordination- This Agreement shall be recorded in the Official Records of San Mateo County. Owner hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of Agency, -this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Property or the Metropolitan Hotel. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Metropolitan Hotel in position supE~rior to this Agreement, upon the request of Agency, Owner hereby covenants and agrE~es to promptly undertake all action necessary to clear such matter from title or to subordinate such interest to this Agreement consistent with the intent of and in accordance with this Section 7, and to provide such evidence thereof as Agency may reasonably request. 8. Transfer and Encumbrance-. 8.1 Restrictions on Transfer and> -Encumbrance. During the term of this Agreement, except as permitted pursuant to the Loan Agreement or this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempf any total or partial sale, transfer, conveyance, assignment or lease (collectively, "Transfer") of the whole or any part of the Property, the Metropolitan Hotel, or the improvements located on the Property, without the prior written consent of the Agericy, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement or the Loan Agreement, Owner shall no# undergo any significant change of ownership without the prior written approval of Agency. For purposes of this Agreement; a "significant change of ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking 'all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision. 8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of temporary easements or permits to facilitate development of the Property; (ii) the lease of individual dwelling units to tenants for occupancy as their principal residence in accordance with this Agreement; or (iii) Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest. 1215436.1 10 P. 3 4 In addition, Agency shall not withhold its consent to the sale, transfer or other disposition of the Metropolitan Hotel, in whole or in part, provided that (1) the Metropolitan Hotel is and shall continue to be operated in compliance with this Agreement; (2) the transferee expressly assumes all obligations of Owner impc-sed by this Agreement; (3) the transferee executes all documents reasonably requested by the Agency with respect to the assumption of the Owner's obligations under this Agreement, and upon Agency's request, delivers to the Agency an opinion of its counsel to the effect that such dacument and this Agreement are valid, binding and enforceable obligations of such transferee; and (4) either (A);the transferee has at least three (3) years' experience in the ownership, operation :and management of low-income multifamily rental housing projects of similar size to that of the Metropolitan Hotel, without any record of material violations of nondiscrimination provisions or other state or federal laws or regulations applicable to such projects; or (B) the transferee agrees to retain a property management firm with the experience and record described in subclause (A). Consent to any proposed Transfer may be given by the Agency's Executive Director unless the Executive Director, in his or herdiscretion, refers the matter. of approval to the Agency's governing board. If a proposed Transfer has not been approved by Agency in writing within thirty (30) days following Agency's receipt of written request by Owner, it shall be deemed rejected. Owner shall reimburse Agency for all Agency .costs, including but not limited to reasonable attorneys' fees, :incurred in reviewing instruments and other legal documents proposed to effect a,.Transfer und±er~thi5 Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following Agency's delivery of an invoice detailing such costs. 8.3 Encumbrances. Owner agrees to use best efforts to ensure that all deeds of trust-or other security instruments recorded_ againstthe Property, the Metropolitan Hotel or part thereof for the benefit of a lender other than Agency ("Third-Party Lender~)shall contain e.ach.of the following provisions: (i) Third-Party Lender shall use its best efforts to provide to Agency a copy of any notice of default issued to Owwner concurrently with provision of such notice to Owner; (ii) Agency shall have the reasonable righ#, ,but not the t~blgation, to cure any default by Owner within the same period of time provided to Owner for such cure extended by an additional ninety (90) days; (iii) provided that Agency: has cured any default under Third-Party Lender's deed of trust and other loan documents, Agency shall have the right to foreclose Agency's Deed of Trust and take title to.`t~e Metropolitan Hotel without acceleration of Third-Party Lender's debt; and (iv) Agency shall have the right to transfer the Metropolitan Hotel without acceleration of Third-Party Lender's debt to a nonprofit corporation or other entity which shall own and operate the. Metropolitan Hotel as an affordable rent<~I housing project, subject to the prior written consent of the Third-Party Lender. Owner agrees to provide to Agency a copy of any notice of default Owner receives frorn any Third-Party Lender within three (3) business days following Owner's receipt thereof. 8.4 Mortgagee Protection. No violation of any provision contained herein shall 1215436.1 11 P. 3 5 defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Metropolitan Hotel or the Property, and lthe purchaser at any trustee's sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Such purchaser shall be bound by and subject to this Agreement from and after such trustee's sale or foreclosure sale. Promptly upon determining that a violation of this Agreement has occurred, Agency shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Metropolitan'Hotel or the Property that such violation has occurred. 9. Default and Remedies. 9.1 Events of Default. The occurrence 6f any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) The occurrence of a Transfer. in violation of Section 8 hereof; (b) Owner's failure to maintain insurance,on the Property and the Metropolitan Hotel as required hereunder, and the failure of Owner to cure such default within ten (10) days; (c) Subject to Owner's right tb contest the following charges, C)wner's failure to pay taxes or assessments due on the Property or the ~Metcopolitan Hotel or failure to pay any other charge that may result in a lien on the Property or the Metropolitan Hotel, and Owner's failure to cure such default,within thirty (30) days of delinquency; (d) A default arises under any Iban secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond .any applicable cure. period such #hat the ho~dei- of such security instrument has the right to accelerate repayment of such loan; (e) An event. of default has been declared under the Loan Agreement, the Note or the Deed of Trust; (f) Owner's default in the performance of any term, provision c-r covenant under this Agreement (other than an obligation enumerated in this Subsection 9.1), and unless such provision specifies a shorter cure period for such default, the continuation of such default for ten (10) days in the event of a monetary default or thirty (30) days in the event of anon-monetary default following the date upon which ,Agency shall have given written notice of the default to Owner, or if the nature of any such non- monetarydefault is such that it cannot be cured within thirty (30) days, Owner's failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default with due diligence and in good faith, but in no event longer than ninety (90) days from receipt of the notice of default. 9.2 Remedies. Upon the occurrence of an Event of Default and its 1215436.1 12 P. 3 6 continuation beyond any applicable cure period, Agency may proceed with any of the following remedies: (a) Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; (b) Accelerate and declare the balance of the Note and interest accrued thereon immediately due and payable and proceed"vvith foreclosure under the Deed of Trust; (c) For violations of obligations with respect to rents for Restricted Units, impose as liquidated damages a charge in-an amount equal fo the actual amount collected in excess of the Affordable Rent; (d) Pursue any other remedy .allowed at law or in equity. Each of the remedies provided herein is cumulative: -:and. not exclusive. 1"he Agency may exercise from time try #ime any rights and remedies available to it under applicable law or in equity, in addition'to., and not in lieu of, :any rights and remedies expressly provided in this Agreement. 10. Indemnity. Owner shall indemnify, defend:(with counsel approved by Agency) and hold Agency, the City; and their respective elected and appointed officers, officials, employees, agents; and representatives (collectively, the "lndemntees") harmless from and against all liability, loss, cost; expense (including without limitation attorneys' fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively "Claims") arising directly or indirectly,. in whole or in part, as'a result of or in connection with Owner's construction, management; or operation of thee-Property and the Metropolitan Hotel or any failure to perform arry obligation as and vvhen required by this Agreement. Ovvner's: indemnification obligations under this Section 10 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of~;this Section 1O shall survive the expiration or earlier termination of this Agreement. It~is further agreed that Agency does not and shall not waive any ric~hts against Owner that it may have.. by reason of this indemnity and hold harmless agreement because of the acceptance by Agency, or the deposit with Agency by Owner, of any of the. insurance :policies described in this Agreement or the Loan Agreement. 11. Miscellaneous. 11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties. 11.2 No Waiver. Any waiver by Agency of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by 1215436.1 13 P. 3 7 Agency to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by Agency .at any time to require strict performance by Owner of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of thE~ same or any other provision hereof or a relinquishment for the future of such election. 11.3 Notices. Except as otherwise specified herein, ,all'notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon. delivery; (ii) certified or registered mail, return receipt,requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice` is effective on delivery if delivery is confirmed by the delivery service; (iv) facsirriile -transmission, in=which case notice shall be deemed dlelivered upon transmittal, provided that (a) a duplicate cbpy of the notice is promptly delivered~by first-class or certified mail or by overnight delivery, or (b) a transmission" report is generated reflecting the accurate transmission thereof. Any notice given, by,facsimile shall be considered to have been received on the next 'business day if it is received after 5:00.p.m..recipient's time or on a non- business day. Agency: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San.. Francisco, CA 94080 Attention: Executive. Director Owner: T~,pton Metro, LLC I'O. Box 60221 Palo Alto, CA 94306 Attention: Richard Tipton 11.4 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement. 1215436.1 14 P. 3 8 11.5 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 11.6 Action by the Agency Except as may be otherwise specifically pirovided herein, whenever any approval, notice, direction, consent or request by the Agency is. required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the Agency Executive Director or by any person who shall have been designated by the Agency Executive Director, without further approval by the governing board of the Agency. 11.7 Non-Liability of Agency and Agency Officials, Employees and AgE~nts. No member, official, employee or agent of the Agency or he City shalt be personally liable to Owner or any successor in interest, in the event of any default or breach by i:he Agency, or for any amount of money which may become due to Owner or: its successor or for any obligation of Agency under this Agreement. 11.8 Headings; Construction. The headings of the sections and paragraphs >of this Agreement are for convenience only and shall not be used fo interpret this Agreement. The language of this Agreement shall be construed as a whole ac~~ording to its fair meaning and not strictly for or.against any Party. 11.9 Time is of the Essence. Time is of the.essence in the.performanc:e of this Agreement. 11.10 G,overning Lavv. This Agreement shall be construed in accordance with the laws of the-State of~California :without regard to principles of conflicts of law.. 11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to .recover all reasonable. attorneys' fees and costs incurred in such action. 11.1.2 Severability. °If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions hall not be affected or impaired thereby. 11.13 Entire Agreement; Exhibits. This Agreement, together with the Loan Agreement, the Note and the Deed of Trust contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibits A through C, attached hereto are incorporated herein by this reference. 11.14 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. SIGNATURES ON FOLLOWING PAGE. 1215436.1 15 P. 3 9 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. AGENCY REDEVELOPMENT AGENCY OF~ THE CITY OF SOUTH SAN FRANCISCO, a public body, corporate and politic By: Name: Title: Executive Director ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: Agency Counsel OWNER TIPTON' METRO, LLC a California limited liability company By: Name: Title: SIGNATURES MUST BE NOTARIZED. 1215436.1 P. 4 0 STATE OF CALIFORNIA ) COUNTY OF SAN MATED) On , 2009, before me, , (here insert name and title of the officer), personally appeared _, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged ~to me that he/shel'they executed the same in his/her/their authorized capacity(ies), and.that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal: Signature {.Seal) STATE OF CALIFORNIA ) `' COUNTY OF SAN MATED) Qn , 2009, before me, , (here insert name and title of.the officer), personally appeared _, who proved to me, on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within. instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the nstrument'the person(s), or the entity upon behalf of which 'the person(s) acted, executed the,nstrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph ~s true and correct. WITNESS my hand and official seal. Signature (Seal) 1215436.1 P. 41 Exhibit A PROPERTY {Attach legal description.) 1215436.1 P. 4 2 Exhibit B INSURANCE REQUIREMENTS Throughout the term of this Agreement, Owner shall obtain and maintain the following policies of insurance: (a) a commercial general liability policy in the amount of`One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggreg<~te, or such other policy limits as Agency may require in its reasonable. discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) a comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non-owned vehicles and shall furnish or cause to be furnished to Agency evidence satisfactory to Agency that Owner and any contractor with whom Owner has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds. (c) Owner shall maintain property insurance covering all risks of loss I;other than earthquake), including flood (if required) for 100% of the replacement value of the Metropolitan Hotel with deductiblE~, if any, in an amount acceptable to Agency, naming Agency as loss payee. (d) Companies writing the insurance required hereunder shall be licensed to do business in the -State of California. `insurance shall be placed with insurers with a current A.M. Best's rating of no: less thanA: VII. The Commercial General Liability and comprehensive automoble~policies required hereunder shall name the Indemnitees as additionalinsureds. Property insurance shall name Agency and City as loss payees as their interests. may appear. (f) Owner shall furnish Agency with certificates of insurance in form acceptable to Agency evidencing`the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on tiie part of the carrier to notify City and Agency of any material adverse change, cancellation, termination or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non-renewal. (g) If any insurance policy or coverage required hereunder is canceled or reduced, Owner shall, within fifteen (15) days after receipt of notice of such can~:,ellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Agency and City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. 1215436.1 P. 4 3 Upon failure to so file such certificate, Agency or City may, without further notice and at its option, procure such insurance coverage at Owner's expense, and Owner shall promptly reimburse Agency or City for such expense upon receipt of billing from Agency or City. (h) Coverage provided by Owner shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by Agency or City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit. of the City and Agency. Owner shall furnish the-required certificates and endorsements to Agency prior to the commencement of construction of the Metropolitan Hotel, and shall provide Agency with certified copies of the required insurance policies upon request of Agency. 1215436.1 P. 4 4 Exhibit C RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 above this line for Recorder's use. NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (this "Notice") is dated as of , 2009 with reference to that certain real property located in the City of South`San Francisco ("City") at z'20 Linden Avenue Street, known as San Mateo County Assessor's Parcel No. 012-316= 010, and more particularly described in Exhibit A attached hereto (the "Property"). 1. The Redevelopment Agency of the Ctyof South Sari Francisco, a public body, corporate, and politic ("Agency") and Tipton Metro,, LLC, a California limited liability company ("Owner") have entered into thatcertain Amended and- Restated Rent Regulatory Agreement (the "Regulatory Agreement").dated as of , 2009 and recorded in the Official Records of San Mateo County substantially concurrently herewith: 2. The Regulatory Agreement requires all of the single room occupancy units on the Property to be rented at affordable -rents to households who qualify as Very Low- Income: 3. -The restrictions set forth in the Regulatory Agreement will be in effect for a period of thirty-five (35) years,. commencing on April 30, 1996 and terminating on April 29, 2031. 4. The Regulatory Agreement amends and restates in its entirety a Rent Regulatory Agreement dated as of April 30, 1996 by and between Agency and Owner's predecessor in interest, Tipton- Management Company, Inc.. This Notice is intended to .provide notice of documents that affect title to the Property. Reference should be made'to the Regulatory Agreement for a more detailed description of all matters described in this Notice. In the event of any conflict between the terms of this Notice and the terms of -the Regulatory Agreement, the Regulatory Agreement shall prevail. This Notice is being recorded and filed in compliance with California Health and Safety Code Section 33334.3(f)(3) and (4), and shall be indexed by the Agency and the current owner of the Property. 1215436.1 P. 4 5 IN WITNESS WHEREOF, Agency and Owner have executed this Notices as of the date first written above. AGENCY: REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, A PUBLIC BODY CORPORATE AND POLITIC By: Name: Title: ATTEST: By: Agency Secretary APPROVED AS TO FORM: By: Agency Counsel OWNER: TIPTON METRO, LLC A CALIFORNIA LIMITED LIA~ILI~TY COMPANY By: Name: Title: 1215436.1 P. 4 6 P. 4 7 SECURED PROMISSORY NOTE $88,000 South San Francisco, California 2009 FOR VALUE RECEIVED, Tipton Metro LLC, a California limited liability company ("Borrower") promises to pay to the Redevelopment Agency of the City of South San Francisco, a public body, corporate and politic ("Agency"), in lawful rnoney of the United States of America, the principal sum of Eighty-Eight Thousand Dollars ($88,000), or so much thereof as may be advanced by Agency pursuant to the Loan Agreement referred to below, together with inte"rest on the outstanding principal b<~lance in accordance with the terms and conditions described herein. This Secured Promissory Note (this "Note") has beer executed and delivered pursuant to a Loan Agreement dated as of the date hereof by anal between Borrbwer and Agency (the "Loan Agreement"),,.. and is subject to the terms and conditions of the Loan Agreement, which are by this reference incorporated herein and made a pert hereof. Capitalized terms used but not:defned herein shall ..have the meaning ascribed to such terms in the Loan Agreement. ` ~' This Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") dated as of the date hereof, executed by Borrower for he benefit of Agency and encumbering the property described therein. Agency shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants .and agreements contained herein, in the Deed of Trust, .the Loan Agreement and the Amended and Restated Rent Regulatory Agreement executed by'Borrower and Agency and dated as of the date hereof...("2009 Regulatory Agreement"). The 2009 Regulatory Agreement shall remain effective for the full term thereof and shall survive repayment of this Note. 1. INTEREST RATE; REPAYMENT..-Interest shall accrue on the outstanding principal balance. of this Note at the rate of four percent (4%) simple interest per annum, commencing upon the date of disbursement thereof. Interest shall be calculated on the basis of a year of 36.5 days, and charged for the actual number of days elapsed. 2. PAYMENT DATES; MATURITY DATE. Commencing upon May 15, 2009 (the "First Payment Date"), and on the fifteenth (151h) day of each calendar month thereafter, Borrower shall make monthly payments of combined principal and interest until the entire indebtedness evidenced hereby is fully paid, except that all remaining indebtedness, if not sooner paid, shall be due and payable upon the Maturity Date (defined below). The amount of the monthly payments to be paid beginning on the First Payment Date will be an amount equal to the payment necessary to fully amortize the principal amount of this Note, together with interest at the interest rate specified in P. 4 8 Section 1 above over a 60-month period. The entire outstanding principal balance of this Note, together with accrued interest and all other sums accrued hereunder shall be payable in full on the fifth (5th) anniversary of the date of this Note (the "NUlaturity Date"). Payments shall be credited first to any unpaid late charges and other costs and fees then due, then to accrued interest, and then to principal. In no event ~~hall any amount due under this Note become subject to any rights, offset, deduction or counterclaim on the part of Borrower. 3. DUE ON SALE OR DEFAULT. The entire unpaid~princpal balance and all sums accrued hereunder shall be immediately due and payable upon the Transfer (as defined in Section 1.4 of the Loan Agreement) absent Agency consent, of -all or any part of the Property or the Improvements, or any interest therein, or upon the occurrence o~F an Event of Default under the Loan Documents, subject to the expiration of~ any applicable cure period. Without limiting the generality~of the foregoing, this Note shall. not be assumable without Agency's prior written consent; which consent may be granted or denied in Agency's sole discretion. 4. PREPAYMENT. Borrower rnay, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance flue under this Note provided that each such .repayment is accompanied by accrued interest on the amount of principal prepaid calculated to-the date of such repayment. Prepayment of this Note shall not affect the term of the 2009 Regulatory Agreement. Prepayments shall be applied first to any unpaid late.cherges and other costs and fees then due, then to accrued- but unpaid interest; and then to principal: 5. MANNER OF,`PAYMENT. All payments on this Note shall be made to Agency at 400 Grand Avenue, South San Francisco, CA 940:80 or such other place as Agency shall designate `to Borrover in writing; or by wire transfer of immediately available funds to an account designated by Agency in writing. 6. ::EVENTS OF DEFAULT. Theoccurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after Agency notifies Borrower thereof in writing. (b) Borrower fails to maintain insurance on the Property and the Improvements as required pursuant to the Loan Documents and Borrower fails to cure such default within 10 days. (c) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Borrower (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the 2 P. 4 9 appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing it:s inability to pay its debts as they become due. (d) A court of competent. jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or substantially all of Borrower's assets, (iii) orders the liquidation of Borrower; or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Improvements, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. (e) Borrower shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachmE~nt of or execution on any substantial part of its property,'unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is .permitted for cure under any other mortgage on the Property; .in which event such lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution; (f) Borrower shall have voluntarily suspended its business or Borrower shall have been dissolved or terminated; (g) A default arises under any debt instrument secured by a mortgage or deed of trust on the f'roperty~and remains uncured beyond any applicable cure period such that the holder of such:ins#rument has the right to accelerate payment thereunder. ~(h) Subject to Borrower's right to contest the -following charges pursuant to the Loari Documents,`if Borrower fails to pay prior to delinquency taxes or assessments due on'the Property orthee-Improvements or fails to pay when due any other charge that may result in a lien on the Property or the Improvements, and Borrower fails to cure such default within thirty (30) days of date of delinquency, but in all events upon the imposition of any such tax or other lien. (i) Ariy. representation or warranty contained in this Agreement or any application, financial statement, certificate or report furnished in connection with the Loan or in connectionwvth any request for disbursement of Loan Proceeds proves to have been false or misleading in any material adverse respect when made. (j) An event of default shall have been declared under any other Loan Document subject to the applicable cure periods set forth in such documents. (k) Borrower defaults in the performance of any term, provision, covenant or agreement (other than an obligation enumerated in this Section 6) contained in this Note or in any other Loan Document, and unless such document specifies a diffE~rent 3 P. 5 0 cure period for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which Agency shall have given written notice of the default to Borrower (or such longer time as Agency may agree upon in writing), provided that in each case Eorrower commences to cure the default within thirty (30) days and thereafter prosecute:> the curing of such default with due diligence and in good faith. 7. REMEDIES. Upon the occurrence of an Event of Default hereunder, Agency may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note, together with all accrued interestahereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to Agency under this Note and the other Loan Documents, including without lim"nation the right to pursue foreclosure under the Deed of Trust. Borrower shall pay all reasonable costs. and expenses:incurred by or on behalf of Agency including, without limitation, reasonable :attorneys' fees, incurred in connection with Agency's enforcement of this Note and the exercise of any or aJl of -its rights and remedies hereunder andall such sums shall be a part of the indebtedness secured by the Deed of Trust. 8. DEFAULT RATE. Upon the occurrence of an Event of Default, interest :>hall automatically be increased without notice to the rats of ten percent {.10%) per annum (the "Default Rate"); provided however, if~any payment due hereunder is not paid when due, the Default Rate shall apply commencing, upon the due date for such payment. When Borrower is no Jonger in„default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in Section 1 of this Note. Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum legal `rate of interest,: the 'rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a defatalt under this Note.or prevent Agency from-~~xercising any of its other rights or remedies. Reserved. 9. MISCELLANEOUS 9.1 WAIVER. The rights and remedies of Agency under this Note shall be cumulative and not alternative. No waiver by Agency of any right or remedy under this Note shall be effective. unless in a writing signed by Agency. Neither the failure nor any delay in exercising any right, povaer or privilege under this Note will operate as .a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by Agency will preclude any other or further exercise of such right, power or privilege or the exercisE~ of any other right, power or privilege. To the maximum extent permitted by applicable law (a) no claim or right of Agency arising out of this Note can be discharged by Agency, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by Agency; (b) no waiver that may be given by Agency will be applicable except in the specific instance for which 4 P.51 it is given; and (c) no notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the right of Agency to take further action without notice or demand as provided in this Note. Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. 9.2 NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 7.1 of the Loan Agreement. 9.3 SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction; the .other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 9.4 GOVERNING LAW; 'VENUE. This Note shall be governed by the laws of the State of California without regard to principles of ~confiicts of laws. All persons and entities in any manner obligated under this Note consent to the jurisdiction of any federal or state court having in the jurisdiction in which the Property is located (the "Property Jurisdiction"). Borrower agrees that any controversy. arising under or in relation to the Note or any other Loan Document shall be litigated exclusively in the Property Jurisdiction. The state and federal. courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Note and any other Loan Document. Borrower irrevocably consents to service;.jurisdiction, and'venue of such-courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual.: residence or otherwise.: 9.5 PARTIES IN INTEREST. This Nate-shall bind Borrower and its successors and assigns and shall accrue to the benefit of Agency and its succe:>sors and assigns. 9.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation. 9.7 RELATfONSHIP OF THE PARTIES. The relationship of Borrower and Agency under this Note is solely that of borrower and lender, and the loan evidenced by this Note and secured by~' he Deed of Trust will in no manner make Agency the partner or joint venturer of Borrower. 9.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note. 5 P. 5 2 9.9 JOINT AND SEVEF~AL OBLIGATION. If Borrower consists of two or more individuals, the obligations of such individuals hereunder shall be joint and sevE;ral. SIGNATURES ON FOLLOWING PAGE. 6 P. 5 3 IN WITNESS WHEREOF, Borrower has executed and delivered this NotE~ as of the date first written above. BORROWER Tipton Metro LLC, a California limited liability company By: Print Name: Title: 7 P. 5 4 P. 5 5 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 Space above this line for Recorder's use. DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust''). is made as of , 2009 by Titpon Metro LLC, a California limited liability company ("Trustor") to Title Company as trustee ("Trustee"), for the benefit of the Redevelopment Agency of the City of South San Francisco, a public body, corporate, and politic ("Beneficiary"'). RECITALS A. Trustor-owns fee simple title to the land located at 220 Linden Avenue in South San Francisco; California and more particularly described in Exhibit A attached hereto and incorporated-herein by this reference (the "Land"). The Land is located within the Downto~ivn Central Redevelopment Project Area ("Project Area"). B. Beneficiary and Trustor have entered into a Loan Agreement dated as of the date hereof (the "Loan Agreement") pursuant to which Beneficiary will provide a loan to Trustor in the amount of Eighty-Eight Thousand Dollars ($88,000) (the "Loan") for the purpose .of paying outstanding property taxes. Trustor has issued to Beneficiary a secured promissory note dated as of the date hereof (the "Note") to evidence Trustor's obligation to repay the Loan. C. As a condition precedent to the making of the Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and secdrity interest in the Property (defined below) to secure repayment of the Note. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows. 1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section P. 5 6 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or~ hereafter acquired: a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land ("Improvements"); b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or fhe Improvements or as a means of access thereto, whether now or hereafter owned or constructed or pl<~ced upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores. or strips, of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land. and Improvements (collectively, "Appurtenances"); c. All machinery, equipment, fixtures, goods and .:other personal proK>erty of the Trustor, whether moveable or not, now-owned or hereafter acquired by the Trustor and now or hereafter located at or used 'in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment"); d. All exis#ing and future leases, subleases, licenses, and other agreements relating to the use or :occupancy of all or any portion of the Land or Improvements (collectively, "Leases"), all. amendments, extensions, renewals or modifications thereof, and all rent; royalties, or other payments which mays now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited°to security deposits (collectively, "Rents"); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances,, Equipment; Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands. relating toinsurance' awards which the Trustor now has or may hereafter acquire; including all `-advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding ("Proceeds"); f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor ("Gross Revenues"); g. All architectural, structural and mechanical plans, specifications, dE:sign documents and studies produced in connection with development of the Land ar~d construction of the Improvements (collectively, "Plans"); and P. 5 7 h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, "Financing"). All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans ;and Financing as hereby conveyed to Trustee or made subject to the ecurity intere:>t herein described are collectively referred to herein as the "Property." 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, .:the "Seecured Obligations"): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the Corms of the Note; (ii) all present and future obligations of Trustor #o Beneficiary under the Loan Documents (defined below); (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it, is or such obligations are; secured by this Deed of Trust; (iv;) all obligations of Trustor'to Beneficiary under` all. modifications, supplements, amendments, renewals, o~ extensions of any of the foregoing, whether evidenced by new or additional documen#s; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust or any other Loan Document as such may be..modified„ supplemented, amended, renewed or extended. The Note, the Loan. Agreement, this Deed of Trust and the Amended and Restated Regulatory Agreement dated as of the date hereof, executed_by and between Trustor and Beneficiary and recorded substantially concurrently herewith. ("Regulatory Agreement") are hereafter collectively referred to as the "Loan Documents." 3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, .income and proceeds of the Property. This is an absolute assignment and not an assignment for security on y. Beneficiary hereby confers upon Trustor a license to collect and retain such Ren#s, :royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event`:of DDefault, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and 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, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's, right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any P. 5 8 default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise .and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shalt not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of Trustor under any Lease, shall nat be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsiblE: for any waste committed by Trustor, lessees or any third parties;. or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary's written consent, .Trustor shall not accept;_prepayrnent of Rents for any rental period exceeding one;rnonth. 4. Security Agreement. The parties intend for. this Deed of Trust to create a Tien on the Property, and an absolute assignment of the Rents and Leases, all in favor;of Beneficiary. The parties acknowledge that some of th'e Property may be determined under applicable law to be personal property or fixtures. T~~the extent that any (Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the__Secured t~bligations. This Deed of Trust: constitutes a security agreement under the .California Uniform Commercial Code, as amended or recodified from time to time (the "UCC"), covering all suchF Property. To the. extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assigrirnent set forth above, it is'the intention-of the parties that such Property sha l constitute "proceeds, products, offspring, rents, or profits" (as defined in and for"the .purposes of Section 552{b).of the United~States Bankruptcy Code, as such section "may be modified or supplemented) of the Land and Improvements. 5. 'F:inancing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured"party., to file such financing statements and amendments `thereof and such continuation statements with respect thereto as Beneficiary may-deem appropriate to perfect and preserve Beneficiary's security interest in the Property and .Rents, without requiring any signature or further authorization by Trustor. If requested'by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary m"ay` reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in ary way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such iteim is P. 5 9 physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by -this instrument or impugning the priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to ,be solelyfor the protection of Beneficiary in the event any court or judge shall; at any.,time hold, with .:respect to the matters set forth in the foregoing clauses (1), (2) and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal. government, and any subdivisions or entity of the federal government. 6. Fixture Filing. This Deed of.Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and~filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that-this Deed of Trust is to be filed in the real estate records of San' Matey County and shall also operate from the date of such filing as a fixture filing in,accordance with_ Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also tie effective as a financing statement` covering minerals or the like (including oil'and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. 7. Trustor's Representations,''Warranties ,and Covenants; Rights and Duties of the Parties. 7.1 Representations 'and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses.and holds a fee simple interest in the Land and the Improvements, (ii) Trustor has good and marketable title to all of the Property; (iii) other than as limited by the Loan Documents, Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the Loan Documents or otherwise approved in writing by Beneficiary ("Permitted Encumbrances"), this Deed of Trust creates a valid lien on Trustor's entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor's office is specified in Section 10.2. P. 6 0 7.2 Condition of Property Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Property that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings :affecting the Property or any portion thereof;. (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a' material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor's agents have disclosed to Beneficiary all material facts concerning the Property. 7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c),do not violate the p.rovisioris of any agreement to which ,. Trustor is a party or vvhich affects. the Property. Trustor furtler._represents and ~rvarrants that there are no pending, or to Trustor's knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor's ownership of he Property. 7.4 Payment:-and Performance. of Secured Obligations. Trustor shall promptly pay when due the principal and any, interest due ori'the indebtedness evidenced by the Note, arid..shall promptly,pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the Loan Documents in accordance with the respective terms thereof. 7.5 Use of Loan Proceeds; Preservation and Maintenance of Property~ Compliance with Laws. Trustor covenants that it shall use the Loan Proceeds solely for purposes authorized by the Loan Documents. Trustor covenants that it shall keep the Land and Improvements 'in go+~d repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the. Property shall be preserved and maintained. Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property, including without limitation all applicable requiremernts of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary's consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, P.61 or destroyed thereon, and shall pay when due all claims for labor performed anti materials furnished therefor. Trustor shall use the Land and the Improvements :solely for purposes authorized by the Loan Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the Loan Documents. 7.6 Restrictions on Conveyance and Encumbrance:;..Acceleration. It shall be an Event of Default hereunder if the Property, any part thereof, or interest therein is sold, assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered in violation of the Loan Documents or if any other Transfer (as defined in the Loan Agreement) occurs in violation of the Loan Documents. f any such Transfer shall occur in violation of such requirements, without lirnitirg the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Eeneficiary, and without demand, immediately° become due and payable, subject to any applicable cure period:. 7.7 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at,any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the Loan Documents. Trustor shall maintain complete and accurate books of .account and other records (including copies of supporting bills and invoices) adequate to document the use of the Loan Proceeds and he operation of the Property;. together with copies of all written contracts, Leases and other instrumerts-which affect the Property. The books, records, contracts, Leases and other instruments. shall be subject to examination and inspection by Beneficiaryat any reasonable timefollowing two business days prior notice... 7.8 Charges, Liens, Taxes and`Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor'sexpense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. Trustor shall immediately discharge or cause to be discharged any lien on the Property (other than encumbrances approved by Beneficiary as of the date hereof in writing). Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest in it, whether or not such lien, charge or P. 6 2 encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, levy, charge or assessment so long as its validity is being actively contested in good faith and by appropriate actions and/or proceedings. 7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust. 7.10 Hazard, Liability and Workers' Compensation Insurance. At all times during the term hereof, Trustor shall at Trustor's expense, maintain insurance policies in accordance with the requirements set forth in the Loan Documents. Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may reasonably require, inclining without limitation copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required pursuant to the Loan Documents, and such certificates (or policies) shall provide that at least`thirty (30) days' prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change iri coverage under each such policy.,, If any insurance policy required pursuant to the Loan Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that. the required insurance has been reinstated or provided through another insurance company or companies. Upon ~failgre to so file such certificate, Beneficiary` may, without further notice anal at its option, procure such insurance coverage at Trustor's-.expense, and Trustor shall promptly reimburse Beneficiary for such e~cpense'upc~n receipt of billing from Beneficiary. 7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof Ito the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined. below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; ni Trustor has received no notice. warning, notice of violation, administrative (~ ~) complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the p©te.ntial violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerr~ny the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession ar reasonably available to Trustor relating to the Land concerning Hazardous Materials. Trustor shall not cause or permit any Hazardous Material (as defined below) to P. 6 3 be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in connection with the construction, rehabilitation, repair, and operation of commercial developments and in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from,.the Land, Trustor shall promptly take all actions at its sole expense as are necessa"ry to comply with all Environmental Laws (as defined below). Trustor shall indemnify, defend (with counsel reasonably-acceptable to Beneficiary), and hold Beneficiary and its elected and' appointed officials, officers, agents and employees (collectively, "Indemnitees"):harmless from and-against any and all loss, claim, liability, damage, demand, judgments order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses ofi~attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of acaion (all of the foregoing, hereafter individually "Claim" and collectively "Claims") arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all. costs;of determining :: whether the Land is~in comp'tiance with Envrronmental Laws, all costs associated with bringing the Land into compliance with all applicable Envrronmental Laws, and all costs associated with claims,for damages or injury to tiersons, property, or natural resources. Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do a l of the following: - a. pay or satisfy any:jud.gment or decree'that may be entered against any Indemntee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are :entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and c. reimburse Indemnitees for any and all expenses, including without: limitation out-of-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under- this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding. Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration P. 6 4 for any of the following: (i) any amendment or modification of any Loan Document; (ii) any extensions of time for performance required by any Loan Document; (iii) any provision in any of the Loan Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or ;any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any Loan Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of la~,,from performance of any obligation under any Loan Document; (vi) the release oi- substitution in whale or in part of any security for the Secured Obligations; and (vii) Beneficiary's failure to properly perfect any lien or security interest given as security for the Secured Obligations. The provisions of this Section 7.11 shall be in addition to an.y and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without`re;gard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the Loan Documents or applicable law. The obligations of Trustor to indemnify the Indemntees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust. Without limiting any of..the remedies provided in this Deed of Trust, Trustor acknowledges and agrees~that~each of the provisions in this Section 7.11 is an environmental ,provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Tau for relating to real property security ;(the "Environmental Provisions"), and that Tru tor's failure to comply-with any of the Environmental Provisions will be~a breach of contract that will entitle .Beneficiary to pursue the remedies provided. by Section 7~6 of the California Code of Civil Procedure ("Section 736") for the recovery of~damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of ~he~ California Code of Civil Procedure or constitute a money judgment~for a deficiency; or a deficiency judgment within the meaning of Sections 580a,`580b, 580d, or 726(b) o~ the California Code of Civil Procedure.. "Hazardous Materials'' means any substance, material or waste which is or becomes regulated by any~federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by- product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Ac;t [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et P. 6 5 seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251 ], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and To:Xic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.J, and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.J, as they now exist or are hereafter amended, together with-any regulations promulgated thereunder; (iv) any substance, material or`waste which is defined as such or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law; including without limitation, asbestos, polychlorinated bpherayls, petroleum, natural gas, and synthetic fuel products and by-prcducts. "Environmental Law" means -all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other.operating authorizations regulating, or relating to, or imposing liability or stand-aids of conduct concerning, (i) pollution ar protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products; wastes, emissions, discharges or releases of chemical'substances from industrial or commercial activities; (iv) the manufacture, _use or introduction into commerce of .chemical substances, including without~limitation; their manufacture,`formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous. Materials or the remediaton of air, surface waters, g~oundwaters or soil, as now or may ~t any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 960'1, et seq.], the Hazardous Materials Transportation Authorization Act (49 U.S.C. Section ~10~ , et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251 ], the Clean Air Act [42 U.S:C. Section' i~401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous';Substances Account Act [California Health and Safety Code Section 25300, et seq.J; the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act (California Health and Safety Code Section 25249.5, et seq.J, and the Porter-Cologne Water Quality Control Act [California Water Code Section 130001, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. P. 6 6 7.12 Notice of Claims; Defense of Security' Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within three business days of the occurrence of such loss. Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice `and allowing such right to cure shall be included in all such documents. Within three business days of Trustor's receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof. b. Defense of Securit~-. At Trustor's sole expense, Trustor shall ,.protect, preserve and defend the Property and title to and.right of possession of the Property, the security of this Deed of Trust and the rights and powers. of Beneficiary and Trustee created under it, against all adverse claims. c. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render ih connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance~ Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses ahd other advances which may be incurred or.made by Beneficiary or Trustee in any efforts to enforce any terms of his Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys` fees and other legal costs, costs .of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Cha~n~es. Trustor sl-all give Beneficiary prior written notice of any change ih he address of Trustor anal the location of any Property, including books and records pertaining to the Property. 7.13 Indemnification. Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and ~t~old harmless the Trustee and the Indemnitees (as defined in Section 7.11) from and against all Claims arising directly or indirectly in any manner in connection wifh or as a result of (a) any breach of Trustor's covenants under any Loan Document, (b) any representation by Trustor in any Loan Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) P. 6 7 any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to nor arises out of the Property, or any Loan Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust. 7.14. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a c:onsequence>of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or- refusal to perform or discharge~ny obligation or liability of Trustor under any agreement related:to the Property or under this Deed of Trust; (iii) any waste committed by Trustor,- the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any -act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the ypes described in this Section 7.14 and agrees that Trustor shall assert no claim::-related to :any of the foregoing against Beneficiary. ~ ` 7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholderst,,any aw,ard,of damages in connec#ion with any condemnation for public use of, of injury.to the Proper#y or any part thereof is hereby assigned and shall be paid to Beneficiary who may.. apply such rnoneys'to any indebtedness secured 17ereby in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application br release shall`'not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, so long as the value of Beneficiary's lien is not impaired, insurance and/or condemnation proceeds may be used. to repair and/or restore the Improvements. 7.16 Release; Extension, Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed°`of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of P. 6 8 payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations. 7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations. have been paid in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconueyance executed under this Deed of Trust of any matters or facts shall be conclusive proof 'of the truthfulness thereof. Trustor shall pay all fees, of Trustee and all recordation fees related to such reconueyance. 7.18 Cure; Protection of Securit .Either Beneficiary or Trustee may cure any breach or default of Trustor, and if it chooses to do so in ,connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all o#her things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, -' contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's or Trustee's sole judgment is or may be senior in.priority to this Deed of Trust, such judgment of Beneficiary or Taus#ee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to~ be .carried hereunder; :otherwise caring for and :protecting any and all of the Property; and/or employing counsel; accountants,:-contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section 7:18 either with or without giving notice, except for notices required .under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph.shall become~additional indebtedness secured by this Deed of Trust. 8 Default and Remedies. 8.1. °~Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this'Deed of Trust upon the occurrence of any one or amore of the following events: a. Beneficiary's declaration of an Event of Default under any Loan Document, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails 'to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; c. If Trustor's interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in P. 6 9 violation of Section 7.6 hereof or ifs any other Transfer occurs in violation of the Loan Agreement and Trustor fails to rescind such conveyance or otherwise cure such breach within the time period specified in paragraph j below; d. Trustor fails to maintain the insurance coverage required hereunder or otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within the time specified in Section 7.10; e. Subject to Trustor's right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails toy cure such default within 10 days. f. Any representation or warran#y of Trustor contained in or made in connection with the execution and delivery of,this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other Loan~Document proves' o have been false or misleading in any material adverse respect when made; g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Trustor (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor in an involuntary case; (iii) consents to the appointment of a trustee, :receiver, assignee, liquidator ,or similar official for Trustor; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they becomedue. h. If a court ofcompetent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor in an involuntary case, (ii;- appoints. a rustee, receiver, assignee, liquidator or similar official for Trustor or substantially all of such Trustor's assets,-{.iii) orders the liquidation of Trustor, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property. or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60.days after its issuance. i, The holder of any oche"r debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated hn this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default P. 7 0 within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than sixty (60) days following receipt of notice of default. 8.2 Remedies. Subject to the applicable notice and cure provisions sE~t forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any Loan Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary's;.rights and remedies shall be cumulative, and the exercise of any one or more~ofthem shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonak~le attorneys' fees and costs. a. Acceleration. Beneficiary: may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and phis Deed of Trust, to be due and payable immediately. b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment~of, a receiver for the Property. c. Entry• Beneficiary,'in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or,any part of the Property, and may also downy and all other,things,in connection~with those actions that Beneficiary may in its sole discretion consider.. necessary and appropriate to protect the security of this,Deed~of Trust. Such other things>may include: taking and possessing copies of all of Trustor's or the`then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may conside~.proper obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payrfient of money owing to Trustor; completing any unfinished construction.; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and`make a l of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in- fact to perform such acts and execute such documents as Beneficiary in its solE~ discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments. d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC. e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement: of any of the covenants or agreements of this Deed of Trust. f. Power of Sale. Under the power of sale hereby granted, P. 71 Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination ar~d in any manner permitted by applicable law. 8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold 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 as required by law and this Deed of Trust. 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 o proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. Notice of sale having been given as then required by aw, 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 placF fixed by it in the 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, and at`Beneficiary's request shall, postpone sale of all or any portion of theProperty by public announcement at such time and place of sale, and from.:#ime to time tliereafter: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 +~r 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 the trust hereby created, including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee. under the terms hereof and.,all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the Loan Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note. At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may. bid for and acquire the Property or any part of it to the extent permitted by then P. 7 2 applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the salves price of the property against the following obligations: a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.12(c); and b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose. 8.4 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, 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 the Loan Documents if the Secured Obligations had no acceleration provision; (h) Trustor cures all breaches of any tither 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 #ees; and (d) Trustor takes such action as Beneficiary rnay'reasonably require to assure that the lien of this Deed of Trust, Beneficiary's ir~teres#-in~the Property anal Trustoe'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 ahe obligations secured hereby shall remain in full force and effect as if no acceleration had occurred: 9. Trustor's .Waivers. To the fulesf extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense. to any action or:proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling it tha event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor,: notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind. 10. Miscellaneous Provisions. 10.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property. 10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also tl-ie P. 7 3 mailing address of Trustor as debtor under the UCC. Beneficiary's address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; c. nationally recognized overnight courier, in which case. notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. Beneficiary: Redevelopment Agency of the. City of-South San Francisco -400 Grand Avenue South San;Francisco, CA '94080 Attention: Executive Director Trustor: Tipton Metro LLC P:O. Box 60221 Palo Alto, CA 94306 Attn: Richard Tipton Trustee: Title Company Attn: 10.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 10.3 does not waive any provision of the Loan Documents imposing restrictions on transfer. 10.4 Substitution of Trustee. Beneficiary may from time to time or at any time P. 7 4 substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for rec:ord in the office of the Recorder of San Mateo County, 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 named herein. 10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees. 10.6 Governing Law; Severability; Interpretation. This :Deed of Trust shall be governed by the laws of the State of California without. regard to principles of conflicts of laws. Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction"). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Loan Documents. Trustor-:irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitted key virtue of domicile, habitual residence'or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions .used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained: In .this Deed of Trust, vvhenev~r .the context so requires, the singular number includes the plural. 10.7 Waiver; Modification `and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder...must-be in writing, and,:no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee Stu any act or omission by Trustor shall nc~t be construed as a consent to any other or subsequent actor omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any fbture or other instance. No amendment to or modification of this Deed of Trust shall be- effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the fore'g4ing, Beneficiary's acceptance of payment of any sum secured hereby after its due date.shall,not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 10.8 Action by Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and .such action may be given, made or takE~n by Beneficiary's Executive Director or by any person who shall have been designated by Beneficiary's Executive Director, without further approval by the governing board of Beneficiary. Beneficiary shall use P. 7 5 reasonable best efforts to respond 'to requests for any such approval, notice, direction, or consent in a timely manner. In any approval, consent, or other determination key Beneficiary required hereunder, Beneficiary shall act reasonably and in good faith. 10.9 Joint and Several Liabilit If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all c>f Trustor's obligations under this Deed of Trust. 10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust. SIGNATURES ON FOLL .OWING-PAGE. P. 7 6 IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. TRUSTOR: TIPTON METRO, LLC, a California limited liability compainy By: _ Its: P. 7 7 STATE OF CALIFORNIA ) COUNTY OF SAN MATED) On , .2009 before rne, , (here insert name and title of the officer), personally appeared _, who proved to me on the basis of satisfactory evidence to be the .person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA ) COUNTY OF SAN MATED) On , 209, before. me, , (here insert name and title. of the officer), personally ~pp~ared _, who proved to me.on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within-instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY `OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) P. 7 8 P. 7 9 Exhibit A LAND (Attach legal description.) 1215429.1 P. 8 0 RDA AGENDA ITEM # S °~x~~s=~~~ Redevelo anent A enc o ~ p g y H ~'ta ~Z e o ~t .ff p ~~LIFOR~~~ DATE: April 8, 2009 TO: Redevelopment Agency Board FROM: Terry White, Public Works Director SUBJECT: MOTION TO ACCF;PT THE BUILDING DEMOLITION OF 212 & 216 ]3ADEN AVENUE PROJECT AS COMPLETE IN ACCORDANCE WITH PLANS AND SPECIFICATIONS RECOMMENDATION It is recommended that the Redevelopment Agency Board, by motion, accept the k-uilding demolition of 212 and 216 Baden Avenue Project (Project No. 58-13232-0920) as complete in accordance with plans and specifications. BACKGROUND/DISCUSSION The Redevelopment Agericy Board purchased 212 Baden Avenue, previously known as Hot Shots Coffee, and 216 Baden Avemae, a former furniture warehouse occupied by the Giorgi ]Brothers Furniture Company. The project involved minor asbestos abatement and removal of both buildings from the site to allow for the temporary use of parking until future developments are completed. The demolition work conformed to the City's Construction and Demolition Waste Ordinance. Interstate Grading and Paving, Inc., of South San Francisco, California, was awarded the contract for building demolition of 212 & 216 Baden Avenue on January 14, 2009; the project was completed per the plans and specifications on March 10, 2009. FUNDING This project was included in the City of South San Francisco's 2008-2009 Capital Improvement Program (CIP/58-13232-0920) and sufficient Redevelopment Agency funds were ava~~lable to complete the work. A budget of $94,560 was allotted to cover the demolition costs. The actual demolition cost incurred for the project was $82,958.14 as summarized below: Demolition $78,800.00 Demolition Change Orders $ 4,15 8.14 Total Project Cost $82,958.14 Staff Report Subject: MOTION TO ACCEPT THE BUILDING DEMOLITION OF 212 & 216 BADEN AVENUE PROJECT' AS COMPLETE IN ACCORDANCE WITH PLANS AND SPECIFICATIONS Page 2 CONCLUSION The project was inspected by City staff and completed in accordance with the plans and specifications. Staff recommends acceptance of this project as complete. Staff will file a Notice of Completion and release the payment performance bonds and retention funds at the end of the: thirty- day lien period. .~ By ~1 ~ - Terry White Public Works Director Approve ' ~ ~ 1 rry M. Nagel Executive Director rd/bh/h1/rr °~x~~s~'~~ Redevelo meat A enc o n p g y Sta Re opt ~~ ~~ ~~~ p LIFOI~ RDA A GENDA ITEM # 6 DATE: April 8, 2009 TO: Redevelopment Agf;ncy Board F ROPdI: Terry `JVhite, Director of Public `~Jorks SUBJECT: A RESOLUTION REJECTING ALL BASE AND ALTERNATE BIDS FOR THE CONSTRUCTION OF THE LUX AVENUE AND LINDEN AVENUE TEMPORARY PARKING LOT #17 PROJECT RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a resolution rejecting; all base and alternate bids for the construction of the Lug Avenue and Linden Avenue Temporary Parking Lot #17 project. BACKGROUND/DISCUSSIQN Temporary Parking Lot # 17, located at 418 Linden Avenue, will provide additional parking for the downtown area to supplement the loss of parking spaces during the construction of the Miller Avenue Parking Garage. The metal and glass lbuilding once located on the site has been demolishF;d. Staff advertised the project to repave the lot and restripe it including a bioswale for stormwatf;r clarity purposes. An alternate to the bid was also included to install a permeable concrete surface. 'This was not originally part of a CII' plan. The project was advertised and on M~~rch 5, 2009, staff received eleven (11) bids in response. The lowest responsible bidder, based on t:he base bid, was Jos. J. Albanese, Inc. of Santa Clara, CA. Below is the summary of all Base Bids received: Jos. J. Albanese, Inc. of Santa Clara, CA O`Grady Paving, Inc. of Mountain. View, CA Top Grade Construction of Foster City, CA Galedrige Construction of Alviso, CA Robert A. Bothman, Inc. of San Jose, CA W.R. Forde Associates of Richmc-nd, CA C.F. Archibald Paving of Redwoad City, CA Interstate Grading & Paving of South San Francisco, CA Half Moon Bay Grading & Pavin€;, Inc. of Half Moon Bay, CA Ghilotti Bros. Inc. of San Rafael, CA Bragato Paving, Co. Inc. of San Carlos, CA $ 79,220.78 $ 85,663.00 $ 86,770.00 $ 87,230.00 $ 89,014.00 $ 97,667.00 $ 97,794.00 $ 99,440.20 $101,563.24 $106,736.50 $128,933.50 Staff Report Subject: A RESOLUTION REJECTING ALL BASE AND ALTERNATE BIDS FC>R THE CONSTRUCTION C-F THE LUX AVENUE AND LINDEN AVENUE TEMPORARY PARKING LOT #17 PROJECT Page 2 of 2 Upon review of the construction bids, staff has determined that a reduction in the scope of'work is necessary and prudent since this lot is only for temporary use. Staff will examine alternate methods of construction and materials used; therefore, staff is recommending the rejection of all base and alternate bids for the project giving staff ample time to consider alternatives. CONCLUSION The rejection of all bids for the prc-ject will allow the City's Public Works staff to consider modifications to the scope of work. _ .~ By: ~ . Terry White ' Director of lic Works Approved 40~` ti'~_____ Barry M. Nagel Executive Directo dc/hUrr Attachment: Resolution RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION REJECTING ALL BASE AND ALTERNATE BIDS FOR THE CONSTRUCTION OF THE LUX AVENUE AND LINDEN AVENUE TEMPORARY PARKING LOT ;~17 PROJECT WHEREAS, on March `>, 2009, eleven bids were received and Jos. J. Albanese was the lowest responsible bidder in the amount of $79,220.78; and WHEREAS, staff recommends rejecting all base and alternate bids fc-r the construction of the Lux Avenue and Linden Avenue New Parking Lot #17 Project; and WHEREAS, pursuant to Public Contract Code Section 20166, a public entity retains the discretion to reject all. bids it receives on a given project; and WHEREAS, the Agency Board now wishes to reject all bids submitted fir the Project. NOW, THEREFORE, BE IT RESOLVED, that the Redevelopment Agency Board of Directors hereby rejects all base and alternate bids for the construction •of the Lux Avenue and Linden Avenue; New Parking Lot #17 project. ~ * ~ ~ I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the day c-f 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: 1216885.1 ATTEST: City Clerk 1 ~o ,.,,,,;~~ °~x s~ R ed evel o m en t o en c o ~ p g Y y Sta Re vet o .ff p c'~LIFOR~lA RDA A GE1'VDA ITEM # 7 DATE: April 8, 2009 TO: Redevelopment Agency Board FROM: Marty Van Duyn, Assistant Executive Director SUBJECT: A RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR 'TO EXECUTE AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT FOR PROPERTY LOCATED AT 415-417 GRAND AVENUE RECOMMENDATION It is recommended that the Agency Board adopt the attached Resolution authorizing the Executive Director to execute an Exclusive Negotiating Rights Agreement with Dalal Metwally for property located at 415-417 Grand Avenue. BACKGROUND/DISCUSSION The property located at 415-417 Grand Avenue consists of two, three story buildings, on two parcels (APN 012305230 and APN 012305220 respectively) that are joined by a common hallway and currently house numerous commercial tenants. The two parcels combined contain a total of approximately 27,000 square feet, with the smaller buildin€; (417 Grand Avenue) being 7,000 square feet. The Redevelopment Agency has entertained the idea of acquiring the property for several years and has recently agreed on terms for an Exclusive Negotiating Rights Agreement, or ENRA, with the owner. The terms of the ENRA include a three month period for the good faith negotiation of a Purchase and Sale Agreement which would govern the transfer of property from the owner to the Redevelopment Agency. The ENRA further anticipates relocation needs and requires the owner to cooperate with the Agency to limit relocation obligations and, in fact, requires that the cost of any required relocation be deducted from the purchase price of the property. It is a well documented fact that code deficiencies exist in the property and it has been agreed that c~nforcement of code action will be stayed during the term of the ENRA. It is for this reason that the City of South San Francisco is also a party to the Exclusive Negotiating Rights Agreement and must be a co-signer to the ENRA. The ENRA further states that the cost of bringing the buildings up to code will be taken into account for the appraised valuation of the property. The appraisal is currently underway and shall be completed in time for the negotiation of the Purchase and Sale Agreement. Once the Purchase and Sale Agreement is finalized it will come before the Redevelopment Agency Board for formal action. It is anticipated that the Agreement could be agendized for review within the next two or three months. Staff Report Subject: ENRA for 415-417 Grand Avenue Page 2 FUNDING While the property would not go into escrow until the Purchase and Sale Agreement is finalized and approved by the Redevelopment Agency Board; funds are in place in the current budget which has anticipated this potential acquisition. It is understood that extensive rehabilitation of the building would be required and finds are available for that purpose in the current and in next year's Agency budget. It is proposed that the property would serve as new space for city offices which are in very tight quarters, having outgrown current space allocations. Further, there is potential to create dance studio space and hearing/meeting rooms for the benefit of the community. It may be possible to allocate some amount of space for the provision of social services and a variety of programs for the community at large. The third floor of the property has magnificent views of City Hall and our historic downtown which could be taken advantage of by creating space for events and meetings. CONCLUSION It is recommended that the Agency Board adopt the attached Resolution authorizing the Executive Director to execute an Exclusive Negotiating Rights Agreement with Dalal Metwally, the owner of 415-417 Grand Avenue. ,. Marty Van Duyn Assistant Executive Director BMN: MVD: NF Attachment: Resolution -.,.~.\ Approved: ' ~ ~_ B M. Nagel Executive Director Exclusive Negotiating Rights Agreement RESOLUTION NO REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING THE EXECUTION OF AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT WITH THE OWNER OF PROPERTY LOCATED AT 415-417 GRAND AVENUE WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Agency") is a redevelopment agency existing pursuant to the Corrununity Redevelopment Law, California Health and Safety Code Section 33000, et sf;q. (the "CRL"), and pursuant to the authority granted thereunder, has the responsibility Ito carry out the Redevelopment Plan (the "Redevelopment Plan") for the Downtown/'Central Redevelopment Project Area (the "Project Area"); WHEREAS, the Agency seeks to negotiate regarding the potential acquisition of certain real property located in the City of South San Francisco in the Project Area at 415-417 Grand Avenue (the "Property"); WHEREAS, the owner of the Property has agreed to enter into an Exclusive Negotiating Rights Agreement. (the "Agreement") with the Agency and to grant the Agency the exclusive right to negotiate for acquisition of the Property during the term of the Agreement; WHEREAS, the City Council has agreed to stay action on code enforcement and liens related to the Property during the term of the Agreement (with the exception. of any items posing an immediate health and safety threat). NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that it hereby: 1. Approves the Agreement and authorizes the Executive Director or his designee to execute and deliver the Agreement substantially in the form presented to the Agency Board and on file with the Agency Secretary. 2. Authorizes the Executive Director to execute and deliver such other instruments and to take such other actions as necessary to carry out the intent of this Resolutior.~. * ~ ]2]4656-1 I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a :meeting held on the day of , 2009 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary 1214656-1 THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this "Agreement'') is entered into effective as of _, 2009 ("E;'~Act~ive Date") by and betweer_ Da1_al ?,~Ietwally, Trustee of The Metwally Living Trust dated October 27, 1998 ("Owner"), the Redevelopment Agency of the City of South San Francisco, a pubaic body corporate and politic ("Agency"), and the City of South San Francisco, a municipal corporation ("City"). Agency, City and Owner are hereinafter collectively referred to as the "Parties." RECITALS A. Owner is the owner of that certain r eal property (the "Property") located at 41 - and 417 Grand Avenue in the City of South San Francisco (the "City"), known as San Mateo County Assessor's Parcel Nos. 012-305-230 and 012-305-220. B. The Property is located within the Downtown Redevelopment Project Area (the "Downtown Project Area") established by the Redevelopment Flan adopted for the Downtown Project Area pursuant to Ordinance No. i 056-89, adopted on July 12, 1989 (as subsequently amended, hereafter the "Redevelopment Plan"). The Agency seeks to acquire the exclusive right to acquire the Property for potential rehabilitation a-~d redevelopment consistent with tl-e Redevelopment Plan. C. At its meeting of , 2009, the Agency's governing board ("Agenc;y Board") directed staff to pursue negotiations with Owner regarding the potential acquisition of t:he Property, and authorized Agency staff to negotiate and the Executive Director to sign, an agreement granting Agency exclusive rights to negotiate for the purpose of reaching agreement on a purchase and sale agreement ("PSA") whose terms and conditions would, upon approval of the Agency Board, govern the conveyance of the Property. NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which ~~re hereby acknowledged, the Parties agree as follows.. 1. Good Faith Efforts to Negotiate. The Parties shall use their best efforts to succF;ssfully negotiate a PSA which shall describe the terms and conditions governing conveyance ol'the Property. The Parties shall diligently and in good faith pursue such negotiations. This Agreement does not impose a binding obligation on Owner to convey the Property to Agency, nor does it obligate the Agency to acquire the Property. Without limiting the generality of the foregoing, Owner expressly acknowledges that a PSA resulting from negotiations contemplated hereby shall become effective only if the PSA is approved by the Agency Board following compliance with all applicable requirements of law. The Parties agree that any PSA negotiated by the Parties: (i) will provide for close of escrow for conveyance of the Property to the Agency. to take place by no later than four (4) months following execution of the PSA (or such longer period as the ]parties shall mutually agree upon), and (ii) will include the provisions described in Section 8 below. ]072282-7 2. Agency's Exclusive Fci~ht to Ne otiate. Owner agrees that it will not, daring the term of this Agreement (the "'I'erni") direc;tly or_ in~?irectly, through ai1y officer, employee, agent, or otherwise, solicit, initiate or encourage the subrr~ission of kids, offers or proposals by a.ay person or entity with respect to the acquisition of any interest in the Property, ar_d Owner shall not engage any broker, financial adviser or consultant to initiate or encourage proposals or offers from other parties with respect to the disposition or development of the Property or any portion thereof. 3. Term. The Term shall commence on the Effective Date, and shall terminate ninety (90) days following the Effective Date, unless extended or earlier terminated as provided herein. The Agency's Executive Director is authorized to extend the Term by an additional ninety (90) days upon the mutual written agreement of the Parties without further approval of the Agenc:y Board. 4. Right of Entry. During the 'T'erm, Agency shall use its best efforts to prepare, at. Agency's expense, any studies, surveys, plans, specifications and reports ("Agency Studies") Agency deems necessary or desirable in Agency's sole discretion, to determine the suitability of the Property for Agency's intended purposes. Such studies may include, without limitation, physical inspections, title investigation, relocation analyses, marketing, feasibility, soils, seismic and environmental studies, financial feasibility analyses and design and engineering studies. Upon reasonable prior request from the Agency, Owner agrees to provide Agency with access; to the Property as maybe reasonably necessary to enable Agency to prepare the Agency Studies; provided that Owner or a representative of Owner shall have the right to be present for and accompany Agency or any agent, employee, representative, consultant, contractor, or subcontractor of Agency while such party is conducting any activities pursuant to this Section 4 on the Property. Agency shall provide Owner with a copy of all reports, studies, or other documents generated by or on behalf of the Agency regarding the Property under this Sc;ction 4, except that Agency shall not be required to provide Owner with any document that is subject to the attorney-client privilege. In connection with entry onto the Property, Agency agree;> to indemnify, defend and hold Owner harmless from and against all liability, loss, cost, claim, and expense resulting from or arising in connection with entry upon the Property by Agency or Agency's agents, employees, consultants, contractors or subcontractors, and further agrees to conduct all of its activities on the Property pursuant to this Section 4 in a manner so as to minimize disruption of the use and enjoyment of the Property by Owner and all tenants of the Property. Agency's obligations under the preceding sentence shall survive termination of this Agreement without the parties entering into a PSA. 5. Reports and Documents.. Within five (5) business days following the Effective Date, Owner shall provide to Agency a rent roll certified by Owner as accurate as of the date of delivery, and copies of all studies, surveys, plans, specifications, reports, leases, rental agreements., contracts and other documents relating to the Property that Owner has in Owner's possession or control. The Parties acknowledge that Owner has provided Agency with a copy of that certain Phase I Environmental Site Assessm~°nt, dated November 2008, prepared by ERM for th~° Property. 6. Appraisal. Prior to the expiration of the term of this Agreement, Agency and Ov~~ner shall each obtain an appraisal of the Property. The appraisals shall be the basis for the Parties to ~o~z2sz-7 2 establish the "as-is" fair market value for the Property and negotiate the j~ul=chase price to be specified in the PSA. T'ne Parties acknowledge that the purchase price for the Property shall retlect its "as-is" fair market value subject to negotiation between the Parties and adjusui~ent to take into account the costs that Agency will incur, i f any, for relocation payrr!ents to tenants, for the correction of building code violations, and any other relevant factors. I~otwithstar~ding any other provision of this Agreement, if the appraised "as-is" value of the Property stated i:n either of the appraisals obtained by the parties is less than Four Million Dollars ($4,000,000), the;n Owner shall have the option at any time thereafter to terminate this Agreement by giving Agency a written termination notice, which termination will be effective immediately upon Agenc;y's receipt of Owner's w7itten notice. During the term of this Agreement, City agrees to stay action on all lien and code enforcement issues relating to the Property (with the exception of anything posing an irrunediate health or safety threat); provided, however, if this Agreement is terminated or Agency decides not to purchase the Property, then the City's stay on the lien and code enforcement issues shall immediately terminate and the City may immediately resume or reinstate its enforcement efforts with respect to such issues. 7. Expenses. Except as otherwise expressly provided herein, all costs and expenses incurred in connection with this Agreement and the activities contemplated hereby shall be paid by the Party incurring such expenses. 8. Relocation. Throughout the: Term, Owner agrees to fully cooperate with Agency with respect to the delivery to existing and prospective tenants of the Property all notices and information that Agency deems necessary or advisable in order to enable Agency to comply with applicable laws relating to the provision of relocation. benefits to eligible persons and enitities. In addition to, and without limiting the generality of the foregoing, Owner agrees that throughout the Term: (i) Agency shall have the right to review and approve all extensions of existing rental agreements and leases and all new rental agreements .and leases for any part of the Property, and Owner will not enter into any such amendments or new leases or rental agreements without Agency's prior written approval, which Agency shall not unreasonably withhold, delay or condition; (ii) using notices in form approved by Agency, Owner shall, at an appropriate time mutually agreed upon by the Parties, inform existing and prospective tenants that Owner is in negotiations with Agency for the sale: of the Property; and (iii) Owner shall include in all extensions of existing rental agreements and leases and all new rental agreements and leases for any part of the Property such information with respect to eligibility for or waiver of relocation benefits as Agency shall reasonably require. The Parties pledge to reasonably cooperate regarding the timing and content of communication with tenants and prospective tenants regarding such matters. The Parties acknowledge that some current tenants lease portions of the Property :pursuant to month-to-month lease or rental agreements and/or agreements that provide for termination upon the acquisition of the Property by a public agency. If the Parties successfully negotiate a PSA, if requested by Agency, Owner agrees t~o use best efforts to obtain from all existing tenants of the Property lease amendments in form approved by Agency that provide that: (i) the tenant's lease ~on2s2-~ 3 will not automatically terminate upon Agency acquisition of the Property, but viii instz:ad be terminable upon receipt of notice of agreed upon duraiion, and (ii) the tenant waives a1i claims with respect to ally other relocation benefits ar~d payments. The provisions set forth in this Section 8 will be included in any purchase and sale agreement negotiated by the Parties.. 9. Termination. In addition to Owner's termination right set forth in Section 6 above, the Parties may terminate this Agreement as set forth in this Section 9. This Agreement may be terminated at any time by mutual consent of the Parties. Either Party shall have the right to terminate this Agreement upon ten (10) days written notice upon its good faith determination that the other Party is not proceeding diligently and in good faith to carry out its obligations pursuant to this Agreement. Agency shall have the right to terminate this Agreement upon ten days' written notice if the results of its investigation cf the Property are unsatisfactory with respect to Agency's desired redevelopment activities. Neither Party shall have the right to seek an award of damages as a result of the termination of this Agreement pursuant to this Section. 10. Effect of Termination. Upori termination as provided herein, or upon the expiration of the Term and any extensions thereof without the Parties having successfully negotiated a PSA, this Agreement shall forthwith be void, and there shall be no further liability or obligation on the part of either of the Parties or their respective officers, employees, agents or other representatives; provided however, the provisions of Section 7 (Expenses), Section. l5 (No Brokers), and any other provisions that expressly so state, shall survive such termination. 1 l . Notices. Except as otherwise; specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmit>sion, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first- class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's. time or on a nonbusiness day. ~o~2za2-~ 4 Agency: Redevelopment Agency of ±he City of South San :Francisco 400 Grand Ave. South San Francisco, CA 94080 Facsimile: (650) Attn: Owner: Dalal Metwally c/o Michael Peterson Archer Norris 2033 North Main Street, Suite $00 Walnut Creek, CA 94596 Facsimile: (925) 930-6620 12. Severability. If any term or provision of this Agreement or the application thereof shall, to any extent, be held to be invalid or unenforceable, such term or provision shall be ineffective to the extent of such invalidity or unen:forceability without invalidating or rendering unenforceable the remaining terms and provisions of this Agreement or the application of such terms and provisions to circumstances other than those as to which it is held invalid or unenforceable unless an essential purpose of this Agreement would be defeated by loss of the invalid or unenforceable provision. 13. Entire Agreement; Amendments in Writing; Counterparts. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral and written, between the Parties with respect to such subject matter. This Agreement may be amended only by a written instrument executed by the Parties or their successors in interest. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which tol;ether shall constitute one agreement. 14. Successors and Assigns; No Third-Party Beneficiaries. This Agreement shall be. binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided however, that neither Party shall transfer or assign any of such Party's rights hereunder by operation of law or otherwise without the prior written consent of-the other Party, and any such transfer or assignment without such consent shall be void. Subject to the immediately preceding sentence, this Agreement is not intended to benefit, and shall not run to the benefit of or be enforceable by, any other person or entity other than the Parties and their permitted successors and assigns. 15. No Brokers. Agency and Owner (each an "Indemnitor") warrants and represents to the other that no brokers have been retained or consulted in connection with this transaction other than as disclosed in writing to the other Party. Each Indemnitor agrees to defend, indemnify and hold harmless the other Party from arty claims, expenses, costs or liabilities arising in connection with such Indemnitor's breach of this warranty and representation. The terms of this Section shall survive the expiration or earlier termination of this Agreement. ~o~z2g2-~ 16. Ca lions. The captions of the sections and articles of this Agreement are far con~.~enience only and are not intended to affect the interpretation or `o~struction of the provisions hereof. 17. Governin Law. This Agreement shall be governed by andconsti ~:ed in accordance with the laws of the State of California. IlV WITNESS WHEREOF, t]Ze Parties have executed this Agreement as of the date first written above. REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN j! RANCISCO By: Name: Executive Director APPROVED AS TO FORM: By: Agency Counsel ATTEST: By: Agency Secretary CITY OF SOUTH SAN FRANCISCO By: Name: City Manager APPROVED AS TO FORM: By: City Attorney ATTEST: By: _ City Clerk ~on2az-~ 6 OV~~~1<t P~'TWALLY Tl;e 1Vletwally Living Trust dated O~~tober 27, 1998 By: Dalai Metwally, Trustee ~o~zzs2-~