HomeMy WebLinkAboutReso 119-2017 (17-541)File Number: 17 -541
City of South San Francisco
P.O. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Resolution: RES 119 -2017
Enactment Number: RES 119 -2017
RESOLUTION APPROVING A PURCHASE AND SALE AND
AFFORDABLE HOUSING AGREEMENT WITH ROEM
DEVELOPMENT CORPORATION, FOR THE DISPOSITION OF
CITY-OWNED PARCEL AT 418 LINDEN AVENUE, (APN
012 - 314 -010), AND 201 -219 GRAND AVENUE (APNS 012 -316 -110,
012 - 316 -100, 012 - 316 -090 AND 012 -316 -080) FOR $1,700,000.
WHEREAS, the City of South San Francisco ( "City ") is the owner of certain real property located in the
City of South San Francisco, California, with the address of 418 Linden Avenue, known as County
Assessor's Parcel Numbers ( "APN ") 012 - 314 -010 ( "418 Linden "); and
WHEREAS, the City is the owner of certain real property located in the City of South San Francisco,
California, with the address of 201 -219 Grand Avenue, known as APNs 012 - 316 -100, 012 - 316 -110,
012 - 316 -080 and 012 - 316 -090 ( "201 Grand "); and
WHEREAS, on June 29, 2011, the Legislature of the State of California (the "State ") adopted Assembly
Bill xl 26 ( "AB 26 "), which amended provisions of the State's Community Redevelopment Law (Health
and Safety Code sections 33000 et seq)(the "Dissolution Law "), pursuant to which the former
Redevelopment Agency of the City of South San Francisco was dissolved on February 1, 2012, The City
became the Successor Agency to the Redevelopment Agency of the City of South San Francisco
( "Successor Agency "), and in accordance with the Dissolution Law, the Successor Agency prepared a
Long Range Property Management Plan ( "LRPMP "), which was approved by a resolution of the
Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San
Francisco ( "Oversight Board ") on May 21, 2015, and was approved by the Department of Finance
( "DOF ") on October 1, 2015; and
WHEREAS, consistent with the Dissolution Law and the LRPMP, certain real properties located in the
City of South San Francisco, that were previously owned by the former Redevelopment Agency was
transferred to the Successor Agency ( "Agency Properties "); and
WHEREAS, on October 18, 2016, the City entered into an Amended and Restated Master Agreement for
Taxing Entity Compensation ( "Compensation Agreement ") with the various local agencies who receive
shares of property tax revenues from the former redevelopment project area ( "Taxing Entities "), which
provides that upon approval by the Oversight Board of the sale price, and consistent with the LRPMP,
the proceeds from the sale of any of the Agency Properties will be distributed to the Taxing Entities in
accordance with their proportionate contributions to the Real Property Tax Trust Fund for the former
Redevelopment Agency; and
City of South San Francisco Page 1
File Number: 17 -541
Enactment Number: RES 119 -2017
WHEREAS, on February 8, 2017, the City adopted Resolution 16 -2017 approving the transfer of the
Agency Properties from the Successor Agency to the City and in accordance with the requirements set
forth in the LRPMP, and on February 21, 2017, the Oversight Board adopted a resolution approving the
transfer of the Redevelopment Properties from the Successor Agency to the City; and
WHEREAS, consistent with the LRPMP and the Oversight Board resolution, the Successor Agency and
City executed and recorded grant deeds transferring the Agency Properties to the City; and
WHEREAS, 201 Grand is one of the Agency Properties and is subject to the provisions of the LRPMP
and the Compensation Agreement; and
WHEREAS, 418 Linden is entitled for 38 housing units, with some potential ground floor live /work
spaces; and
WHEREAS, 201 Grand is entitled for 46 housing units with ground floor commercial, a leasing office
and a resident lounge; and
WHEREAS, ROEM Development Corporation ( "Developer ") was selected as the developer; and the
City and Developer entered into an Exclusive Negotiating Rights Agreement ( "ENRA "); and
WHEREAS, the ENRA was effective on April 4, 2017, with an initial term of 120 days; and
WHEREAS, on July 31, 2017, Developer opted to extend the ENRA term and paid the $25,000 fee with
the new expiration date of October 31, 2017; and
WHEREAS, City staff recommends providing $3,500,000 in grant funding to Developer, with
$2,450,000 being drawn from the City Housing Fund ( "Fund 241 "), and $1,050,000 being drawn from
the Affordable Housing Trust Fund ( "Fund 205 "); and
WHEREAS, the City and Developer have negotiated a Purchase and Sale Agreement ( "PSA ") or the
disposition 418 Linden, which is attached to this resolution as Exhibit A; and
WHEREAS, the City and Developer have negotiated a PSA for the disposition of 201 Grand, which is
attached to this resolution as Exhibit B; and
WHEREAS, the City and Developer have also negotiated an Affordable Housing Agreement ( "AHA ")
for 418 Linden and 201 Grand, and are included as Exhibit C and Exhibit D, respectively; and
WHEREAS, pursuant to redevelopment law and the Master Compensation Agreement, final approval of
the sale price of 201 Grand must be approved by the Oversight Board to the Successor Agency of South
San Francisco; and
WHEREAS, the City and the Developer now wish to enter into a Purchase and Sale Agreement ( "PSA ")
City of South San Francisco page 2
File Number. 17 -541
for 418 Linden, attached hereto and incorporated herein as Exhibit A; and
Enactment Number. RES 119 -2017
WHEREAS, the City and the Developer now wish to enter into a Purchase and Sale Agreement ( "PSA ")
for 201 Grand, attached hereto and incorporated herein as Exhibit B; and
WHEREAS, approval of the PSAs are considered a "project" for purposes of the California
Environmental Quality Act, Pub. Resources Code § 21000, et seq. ( "CEQA "); and
WHEREAS, on January 28, 2015, the City Council certified an Environmental Impact Report ( "EIR "),
State Clearinghouse number 2013102001, in accordance with the provisions of the California
Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA ") and CEQA Guidelines,
which analyzed the potential environmental impacts of the development of the Downtown Station Area
Specific Plan; and
WHEREAS, on January 28, 2015, the City Council also adopted a Statement of Overriding
Considerations ( "SOC ") in accordance with the provisions of the California Environmental Quality Act
(Public Resources Code, §§ 21000, et seq., "CEQA ") and CEQA Guidelines, which carefully considered
each significant and unavoidable impact identified in the EIR and found that the significant
environmental impacts are acceptable in light of the Downtown Station Area Specific Plan's economic,
legal, social, technological and other benefits; and
WHEREAS, CEQA allows for limited environmental review of subsequent projects under a program
EIR when an agency finds that a project would not create any new environmental effects beyond those
previously analyzed under a program EIR and would not require any new mitigation measures (CEQA
Guidelines § 15168 (c)(2)); and
WHEREAS, the development of the City Property was contemplated in the DSAP EIR, and the
execution of a Purchase and Sale Agreement for development consistent with the DSAP would not result
in any new significant environmental effects or a substantial increase in the severity of any previously
identified effects beyond those disclosed and analyzed in the Downtown Station Area Specific Plan
Program EIR certified by the City Council, nor would any new mitigation measures be required.
NOW THEREFORE IT BE RESOLVED that the City Council of the City of South San Francisco does
hereby resolve as follows:
Determines that the recitals are true and correct.
Approves a PSA with ROEM in substantially the same form attached hereto as Exhibit A, for the
disposition of the City -owned parcel at 418 Linden Avenue (APN 012 - 314 -010) for $500,000.
City of South San Francisco Page 3
File Number: 17 -541
Enactment Number. RES 119 -2017
Subject to approval by the Oversight Board of the final sale price, approves a PSA with ROEM in
substantially the same form attached hereto as Exhibit B, for the disposition of 201 -219 Grand Avenue
(APNs 012- 316 -110, 012- 316 -100, 012 - 316 -090 and 012 - 316 -080) for $1,200,000.
Approves the Affordable Housing Agreements for 418 Linden and 201 Grand, in substantially the same
form attached hereto as Exhibit C and Exhibit D, respectively.
Approves Budget Amendment 18.003, providing ROEM Development with $3,500,000 in grant funding
($1,050,000 from Fund 205 and $2,450,000 from Fund 241) for the provision of Below Market Rate
(BMR) rental units, as set forth in the PSAs.
Authorizes the City Manager to enter into and execute on behalf of the City Council the PSAs and the
AHAS, in substantially the same form attached hereto as Exhibits A, B, C and D; to make any revisions,
amendments or modifications deemed necessary to carry out the intent of this Resolution and which do
not materially or substantially increase the City's obligations thereunder.
At a meeting of the Special City Council on 9/6/2017, a motion was made by Mark Addiego, seconded
by Richard Garbarino, that this Resolution be approved. The motion passed.
Yes: 5 Matsumoto, Normandy, Addiego, Gupta, and Garbarino
Attest b
City of South San Francisco Page 4
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PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
418 Linden Avenue
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (“this Agreement”), dated _______, 2017, for reference purposes only, is made
by and between the City of South San Francisco, a municipal corporation, (“City” or the “Seller”)
and ROEM Development Corporation, a California corporation (“Buyer”). Seller and Buyer are
collectively referred to herein as the “Parties.”
RECITALS
A. City is the owner of the real property located in the City of South San Francisco at
418 Linden Avenue, known as San Mateo County Assessor’s Parcel Nos. 012-314-010 and more
particularly described in Exhibit A-1 attached hereto (the “Linden Property” or, the
“Property”).
B. The City desires to sell the Linden Property to Buyer for the construction of a
high density, 38-unit multi-family apartment building (the “Linden Project”), eight (8) units of
which are required to be made available at below market rates as further described in the Linden
Affordable Housing Agreement substantially in the form attached hereto as Exhibit B (the
“AHA”). Development of the Linden Project is described and defined in the Development
Agreement between the City and Buyer, substantially in the form attached hereto as Exhibit C
(the “DA”). Upon Closing, the AHA and the DA will be recorded in the official records of San
Mateo County.
C. In order to assist in the construction of affordable units, upon Closing, Seller will
provide Buyer a grant in the amount Five Hundred and Twenty Five Thousand Dollars
($525,000.00) from City Affordable Housing In-Lieu Fees, and a grant in the amount of One
Million Two Hundred and Twenty Five Thousand ($1,225,000.00) from City Affordable
Housing Bond Funds to partially finance the Project on the Linden Property (“City Grants”), as
set forth in this Agreement and the DA. The terms and conditions associated with Buyer’s use of
the City Grants after the Closing are set forth in the DA.
D. On April 4, 2017, City of South San Francisco and Agency and Buyer entered into
an Exclusive Negotiation Rights Agreement (“ENRA”) that provided the Buyer the exclusive right
to collaborate and negotiate with the City for the purpose of reaching agreement on a project
description, appropriate land uses, economic feasibility, and a definitive agreement whose terms
and conditions would govern any conveyance and development of the Property. In furtherance
thereof, Buyer submitted a deposit in the amount of Two Hundred Thousand Dollars ($200,000.00)
to City to reimburse the costs Seller would incur in preparation of this Agreement and the Purchase
and Sale Agreement for the Grand Project (“ENRA Deposit”). Upon execution of the ENRA,
City provided Buyer with copies, but not ownership, of all City owned non-privileged studies,
surveys, plans, specifications, reports, and other documents with respect to the Property that City
had in its possession or control, which had not already been provided to Buyer (“Bridging
Documents”).
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D. The Linden Property and the Linden Project are fully entitled, and have obtained
planning approval from the Design Review Board, Planning Commission, Successor Agency and
City Council as well as the Oversight Board. The Linden Project entitlements include Planning
Project P15-0016; Use Permit UP15-0002; Design Review DR15-0015; Parking Exception PE15-
0002; and Affordable Housing Agreement AHA15-0004 (collectively herein the “Project
Approvals”). Buyer acknowledges and agrees that execution of this Agreement by Agency does
not constitute approval for the purpose of the issuance of building permits for the Project, does
not limit in any manner the discretion of Agency in such approval process if any, and does not
relieve Buyer from the obligation to apply for and obtain any, if necessary, entitlements, approvals,
and permits, for construction of the Linden Project on the Linden Property including without
limitation, the approval of architectural plans, the issuance of any certificates regarding historic
resources required in connection with the Project (if any), and any required environmental review
in the event Buyer seeks revisions to any of the above Project Approvals.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged by the parties, Seller and Buyer hereby agree as
follows:
AGREEMENT
1. INCORPORATION OF RECITALS AND EXHIBITS. The Recitals set forth
above and the Exhibits attached to this Agreement are each incorporated into the body of this
Agreement as if set forth in full.
2. PURCHASE AND SALE.
2.1. Subject to the terms and conditions set forth herein, Seller agree to sell
the Property to Buyer, and Buyer hereby agrees to acquire the Property from Seller.
2.2. The purchase price for the Property to be paid by Buyer to City is five
hundred thousand dollars ($500,000.00), payable in all cash at Closing.
3. ESCROW.
3.1. Escrow Account. This sale shall be consummated through an “Escrow”
established with Chicago Title Insurance Company; Escrow Agent: Sherri Keller, 675 N. First
Street, San Jose, CA 95112 (“Escrow Holder”). Escrow Holder shall perform all escrow and
title services in connection with this Agreement.
3.2. Opening of Escrow; Effective Date. Within three (3) business days of
the date that Seller has obtained approval of this executed Agreement by the City Council,
approval of the sale price by the Oversight Board, and approval of the executed DA and the
executed AHA by the City Council, Seller shall open an escrow account with Escrow Holder
by depositing this executed Agreement, the executed DA and the executed AHA into Escrow.
The date the executed Agreement, DA and AHA are received by Escrow Holder, as established
and confirmed by Escrow Holder, shall be deemed the “Effective Date.” By such deposit
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Escrow Holder is authorized and instructed to act in accordance with the provisions of this
Agreement, which Agreement shall constitute Escrow Holder’s escrow instructions.
3.3. Buyer’s Deposit; Application of Prior ENRA Deposit. Within three (3)
business days of the Effective Date, Seller will deposit the one half of the remaining, unused,
portion of the ENRA Deposit into Escrow, and Buyer will deposit the difference between the
amount deposited by Seller and $100,000.00, so that the total deposit held in Escrow for the
Linden Property as Buyer’s deposit is One Hundred Thousand Dollars ($100,000.00) (the
“Deposit”). Note that the other one half of the remaining, unused, portion of the ENRA Deposit
will be deposited into the Grand Property Escrow. The Deposit is non-refundable, except in the
event of a Seller breach, and is applicable toward the Purchase Price.
3.4. Seller’s Administration Fee. Within three (3) business days of the
Effective Date, Buyer shall deposit funds in the amount of Fifteen Thousand Dollars
($15,000.00) with Escrow Holder (the “Administration Fee”). Escrow Holder shall
immediately release the Administration Fee to Seller, and throughout the term of this Agreement,
Seller may draw upon the Administration Fee to compensate it for the cost of reasonably
necessary third-party assistance, legal fees and staff time incurred by Seller in administering the
sale of the Property. Seller will notify Buyer of the identify, qualifications, scope of work and
budget for any third party consultants that will be paid for from the Administration Fee, prior to
authorizing work under any such third party contract, and will provide Buyer a written account
of the Administration Fee, including copies of any third party invoices under approved scopes
of work (excluding any information subject to attorney client privilege) upon Buyer’s request.
All costs and fees shall be charged at City’s actual cost and all staff time shall be charged at
City’s standard rate. Seller shall deposit the Administration Fee in a separate interest bearing
account of Seller and any interest, when received by Seller, will become part of the
Administration Fee. City shall account for all deposits, interest earnings and withdraws from
the Administration Fee consistent with all reporting requirements of the State of California
Department of Finance. The unused portion of the Administration Fee, if any, shall be credited
against the Purchase Price at Closing, or returned to Buyer if this Agreement is terminated, for
any reason, prior to Closing.
4. APPROVAL OF CONDITION OF TITLE; PROPERTY DISCLOSURE
REQUIREMENTS.
4.1. Condition of Title/Preliminary Title Report. At the Closing, Seller shall
convey title to the Property to Buyer by grant deed in Escrow Holder’s standard form (the “Grant
Deed”). As a condition to Buyer’s obligation to close escrow hereunder, title to the Property to be
conveyed to Buyer shall be subject only to the Permitted Exceptions (as defined below).
Promptly following the execution of this Agreement, Seller shall deliver or cause the
Escrow Holder to deliver to Buyer a preliminary title report issued by Escrow Holder and dated
within ten (10) days of the mutual execution of this Agreement (the “Preliminary Title Report”)
showing the state of title to the Property, together with copies of all matters shown as exceptions
therein. Buyer may also obtain a survey or updated survey of the Proper ty (the “Survey”), at
Buyer's sole cost and expense. Buyer shall have the right within the first twenty (20) days
following the Effective Date (the “Title Review Period”), to give Seller written notice (“Buyer’s
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Title Notice”) of Buyer’s disapproval of any title exceptions or matters set forth in the Title Report
or Survey, or any other matters affecting Title to the Property (collectively, the “Title
Objections”). If Buyer timely gives the Buyer’s Title Notice, Seller shall elect, within fifteen (15)
days following receipt of Buyer’s Title Notice, by written notice given to Buyer, whether to
remove or delete from the title to be conveyed to Buyer prior to the Closing any or all of the Title
Objections. If Buyer fails to timely give the Buyer’s Title Notice, or if Seller fails to make such
election within the aforementioned fifteen (15) day period, then Seller shall be deemed to have
elected not to remove any Title Objections. Upon receipt of Seller’s written notice (or deemed
election not to remove the Title Objections), Buyer may elect, within the Title Review Period, to
either (i) terminate this Agreement, in which event all rights and obligations hereunder (except for
those that expressly survive the termination of this Agreement) shall cease and the Deposit shall
be promptly returned to Buyer, or (ii) waive any title or survey objections it may have, without a
reduction of the Purchase Price. If Buyer fails to make an election referred to in the immediately
preceding sentence, by written notice to Seller within the Title Review Period, then Buyer shall be
deemed to have elected the option to terminate this Agreement as set forth in clause (i) above.
As used herein, “Permitted Exceptions” shall mean: (i) non-delinquent liens for
real estate taxes and assessments; (ii) any other liens, easements, encumbrances, covenants,
conditions and restrictions of record described in the Preliminary Title Report, except those that
Seller has expressly agreed to remove pursuant to Paragraph 5(b) above; provided, however, that
the lien of any deed of trust shall not be a Permitted Exception in any event; (iii) the DA; (iv) the
AHA; and (v) local, state and federal laws, ordinances or governmental regulations including, but
not limited to, building and zoning laws, ordinances and regulations, now or hereafter in effect
relating to the Property. Seller will provide Buyer with standard owner affidavits regarding
tenants, work on site, etc. if applicable as may reasonably be required by the Title to permit Title
Company’s issuance of an ALTA title insurance policy.
Delivery of title in accordance with the foregoing shall be evidenced by the
willingness of the Escrow Holder to issue, at Closing, at Buyer’s cost, an ALTA Owner’s Policy
of Title Insurance in the amount of the Purchase Price showing fee simple title to the Property
vested in Buyer (or its assignee), subject only to the Permitted Exceptions and the standard
exclusions to coverage shown on such Policy of Title Insurance (the “Title Policy”).
4.2 Environmental and Natural Hazards Disclosure. California Health &
Safety Code section 25359.7 requires owners of non-residential real property who know, or have
reasonable cause to believe, that any release of hazardous substances are located on or beneath
the real property to provide written notice of same to the buyer of real property. Other applicable
laws require Seller to provide certain disclosures regarding natural hazards affecting the
Property. During the period of time between the execution of the ENRA and the execution of
this Agreement, Seller shall make all necessary disclosures required by law
5. BUYER’S SCHEDULE OF PERFORMANCE
5.1. Buyer’s Schedule of Performance. Subject to Force Majeure Delays (as
defined in Section 8.4), Buyer shall complete the following milestones in furtherance of the
Closing, in accordance with the following schedule:
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Deadline Milestone
(a) Within two (2)
months after
Effective Date
Buyer shall have completed 50% of the Construction Drawings and
submitted the Financial ProForma to Seller
(b)
Within four (4)
months after
Effective Date
Buyer shall have completed all Final Plans and submitted 100%
construction drawings to the City for building permits, and submitted an
Updated Proforma to Seller
(c)
Within five (5)
months after
Effective Date
Buyer shall have secured Construction Financing and executed a contract
with a general contractor for construction of the Project in accordance with
the final plans
(d)
Within six (6)
months after
Effective Date
Buyer and Seller shall have satisfied (or waived in writing) all
contingencies to Closing set forth in this Agreement, and be prepared to
Close Escrow
6. CLOSING AND PAYMENT OF PURCHASE PRICE
6.1. Closing. The close of escrow (the “Closing” or “Close of Escrow”) shall
be deemed to occur on the date the Grant Deed is recorded and Buyer’s funds are released to
Seller and the City Grants are released to Buyer, which shall occur within ten (10) days of the
date that all of Buyer’s contingencies to Closing set forth in Section 6.2 and Seller’s
contingencies to Closing set forth in Section 6.3 have been satisfied, or waived in writing, or
such other date that the Parties agree in writing, each in their sole discretion.
6.2. Buyer’s Conditions to Closing. Buyer's obligation to purchase the
Property is subject to the satisfaction of all of the following conditions or Buyer's written waiver
thereof (in Buyer’s sole discretion) on or before the Closing Date:
(a) Buyer has approved the condition of the Property and Waived any
further Due Diligence Contingency. Buyer has used the period of time between the execution of
the ENRA and the date of the execution of this Agreement as its “Due Diligence Contingency
Period” to complete physical inspections of the Property and due diligence related to the purchase
of the Property. Pursuant to paragraph 9 of the ENRA, Seller has made available to Buyer for
review or copying at Buyer’s expense all non-privileged studies, surveys, plans, specifications,
reports, and other documents with respect to the Property that Seller has in its possession or control,
which have not already been provided. Buyer understands that notwithstanding the delivery by
City to Buyer of any materials, including, without limitation, third party reports, Buyer has relied
entirely on Buyer’s own experts and consultants and its own independent investigation in
proceeding with the acquisition of the Property. Studies or documents prepared by Seller and its
agents solely for the purpose of negotiating the terms of the Purchase Agreement were not required
to be provided by Seller to Buyer. Buyer acknowledges that it has completed its due diligence
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with respect to the physical condition of the Property and is satisfied with respect to such and will
provide Seller further written evidence of its acceptance of the condition of the property and its
wavier of any due diligence contingency prior to Closing.
(b) Seller have performed all obligations to be performed by Seller
pursuant to this Agreement.
(c) Seller’s representations and warranties herein are true and correct in
all material respects as of the Closing Date.
(d) Buyer has approved the Title Report, and Title Company is
irrevocably committed to issue a ALTA Extended Title Policy to Buyer upon recordation of the
Grant Deed and effective as of the Closing Date, insuring title to Buyer in the full amount of the
Purchase Price, subject only to the Permitted Exceptions.
(e) Seller has deposited the City Grants into Escrow with instructions
to release the City Grants to Buyer, only upon the Closing.
(f) The Property is free of all occupants, licensees, tenants, and is
prepared to be delivered “vacant” to Buyer at Closing.
(g) Buyer has secured binding commitments, subject only to
commercially reasonable conditions, for all funding necessary for the successful and feasible
purchase of the Property and completion of the Project.
(h) Thirty (30) days prior to Closing, Buyer’s construction loan, if any,
for the Project shall have closed, or shall be ready to close concurrently with the Closing.
(i) Five (5) days before closing, Buyer shall have obtained approval of
Buyer’s Final Proforma from City, and shall have deposited the approved Final Proforma into
Escrow.
(j) Buyer has completed all Final Plans and construction drawings and
has obtained all building and other permits from the City and other issuing agencies required to
construct the Project pursuant to all Final Plans and as required and necessary for the Buyer to
satisfy the obligations set forth in the DA and AHA.
(k) Buyer shall have executed a construction contract with a qualified
and reputable general contractor for the Project, which construction contract shall be enforceable,
contain a “prevailing wage” requirement, and require contractor to commence construction
promptly upon issuance of the final building permit, and shall have deposited a copy thereof into
Escrow five (5) days before Closing.
(l) Buyer or Buyer’s General Contractor shall obtain, or cause to be
obtained, and deliver to Seller the following bonds: (a) a labor and materials/payment bond or
bonds for the general contract, which shall be equal to one hundred percent (100%) of all costs of
construction to be incurred pursuant to the general contract, and (b) a performance bond or bonds
for the general contractor in an amount equal to one hundred percent (100%) of all costs to be
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incurred pursuant to the general contract (collectively, the "Bonds"). The Bonds shall be in
commercially reasonable form and substance, and name Seller as obligee.
(m) Buyer’s General Contractor shall have submitted to City’s Building
Department for City’s approval, detailed final construction plans for construction of the Project on
the Property (the “Construction Plans”). As used herein “Construction Plans” means the final
construction documents that are in conformance with the Bridging Construction Documents
(“BCDs”) and Owner’s Minimum Requirements (“OMRs”) and upon which Buyer and Buyer’s
contractors shall rely in constructing the Project (including the landscaping, parking, and common
areas) and shall include, without limitation, the site development plan, final architectural drawings,
landscaping, exterior lighting and signage plans and specifications, materials specifications, final
elevations, and building plans and specifications. The Construction Plans shall be based upon the
scope of development set forth in the BCDs and upon the Project Approvals, and shall not
materially deviate therefrom without the express written consent of Seller. Provided the
Construction Plans are consistent with the BCDs, approval of the Construction Plans by City shall
be deemed approval thereof by Seller.
(n) Buyer is prepared to deliver a guaranty of completion of the Project
in accordance with the terms of this Agreement, substantially in the form of Exhibit D
("Completion Guaranty") attached hereto.
6.3. Seller’s Conditions to Closing. The Close of Escrow and Seller’s
obligation to sell and convey the Property to Buyer are subject to the satisfaction of the following
conditions or Seller’s written waiver (in Seller’s sole discretion) of such conditions on or before
the Closing Date or any sooner date stated below:
(a) Buyer has performed all obligations to be performed by Buyer
pursuant to this Agreement before Closing Date.
(b) Buyer's representations and warranties set forth herein are true and
correct in all material respects as of the Closing Date.
(c) Buyer’s Financing Commitments. Forty-five (45) days prior to
Closing, Buyer has provided Seller written confirmation, acceptable to Seller, which approval shall
not be unreasonably withheld, that Buyer has obtained financing commitments for the acquisition
and construction financing for the acquisition and development of the Property:
(d) Construction Loan. Thirty (30) days prior to Closing, Buyer’s
construction loan, if any, for the Project shall have closed, or shall be ready to close concurrently
with the Closing.
(e) Proforma. Thirty (30) days before closing, Buyer shall have
obtained approval of Buyer’s Final Proforma from City, and shall have deposited the approved
Final Proforma into Escrow.
(f) Buyer shall have completed all Final Plans and construction
drawings and has obtained all building and other permits from the City and other issuing agencies
8
required to construct the Project pursuant to all Final Plans and as required and necessary for the
Buyer to satisfy the obligations set forth in the DA and AHA.
(g) Buyer shall have executed a construction contract with a qualified
and reputable general contractor for the Project, which construction contract shall be enforceable,
contain a “prevailing wage” requirement, and require contractor to commence construction
promptly upon issuance of the final building permit, and shall have deposited a copy thereof into
Escrow five (5) days before Closing.
(h) Buyer or Buyer’s General Contractor shall have obtained and
delivered to Seller the following bonds: (a) a labor and materials/payment bond or bonds for the
general contract, which shall be equal to one hundred percent (100%) of all costs of construction
to be incurred pursuant to the general contract, and (b) a performance bond or bonds for the general
contractor in an amount equal to one hundred percent (100%) of all costs to be incurred pursuant
to the general contract (collectively, the "Bonds"). The Bonds shall be in commercially reasonable
form and substance and shall name Seller as obligee.
(i) Construction Plans. Buyer’s General Contractor shall have
submitted to City’s Building Department for City’s approval, detailed final construction plans for
construction of the Project on the Property (the “Construction Plans”). As used herein
“Construction Plans” means the final construction documents that are in conformance with the
Bridging Construction Documents (“BCDs”) and Owner’s Minimum Requirements (“OMRs”)
and upon which Buyer and Buyer’s contractors shall rely in constructing the Project (including the
landscaping, parking, and common areas) and shall include, without limitation, the site
development plan, final architectural drawings, landscaping, exterior lighting and signage plans
and specifications, materials specifications, final elevations, and building plans and specifications.
The Construction Plans shall be based upon the scope of development set forth in the BCDs and
upon the Project Approvals, and shall not materially deviate therefrom without the express written
consent of Seller. Provided that the Construction Plans are consistent with the BCDs, approval of
the Construction Plans by City shall be deemed approval thereof by Seller.
(j) Buyer’s Completion Guaranty. Buyer has delivered its Completion
Guaranty to Escrow Holder.
6.4. Closing Deliveries.
6.4.1 Delivery of Documents and Closing Funds. At or prior to Closing,
Seller and Buyer shall each deposit such other instruments as are reasonably required by the Title
Company or otherwise required to close the escrow and consummate the conveyance of the
Property in accordance with the terms hereof, including but not limited to the following:
6.4.1.1 Deliveries by Seller. At or before Closing, Seller shall
deposit the following into escrow: (i) one (1) original executed and acknowledged Grant Deed;
(ii) one (1) duly executed non-foreign certification for the Property in accordance with the
requirements of Section 1445 of the Internal Revenue Code of 1986, as amended; (iii) one (1) duly
executed California Form 593-W Certificate for the Property or comparable non-foreign person
affidavit to satisfy the requirements of California Revenue and Taxation Code Section 18805(b)
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and 26131; (iv) title to all Bridging Documents; and (v) funds in the total amount of One Million
Seven Hundred Fifty Thousand Dollars ($1,750,000.00) for the City Grants.
6.4.1.2 Condition to disbursement of City Grants. City’s obligation
to provide Seller with City Grants in the total amount of One Million Seven Hundred Fifty
Thousand Dollars ($1,750,000.00) at the Closing Date is conditioned upon Close of Escrow. If the
Closing does not occur, for any reason whatsoever, the Cit y has no obligation to deliver the City
Grants to Buyer.
6.4.1.3 Deliveries by Buyer. No less than five (5) business days
prior to the close of escrow, Buyer shall deposit into escrow: (i) immediately available funds
which together with the Deposit plus interest thereon, if any, is equal to: a) the Purchase Price as
adjusted by any prorations between the Parties; (b) all escrow fees (including the costs of preparing
documents and instruments) and recording fees and all transfer taxes; (c) the cost of the Title
Policy and title report costs (d) any other costs that are the responsibility of Buyer under this
Agreement; (ii) a fully executed Completion Guarantee executed by Buyer; and, (iii) one (1)
original executed Preliminary Change of Ownership Report for the Property.
6.4.2. Escrow Instructions. This Agreement constitutes the joint escrow
instructions (JEI) of Seller and Buyer with respect to the conveyance of the Property to Buyer, and
the Escrow Agent to whom these instructions are delivered is hereby empowered to act under this
Agreement. The parties shall use reasonable good faith efforts to close the escrow for the
conveyance of the Property in the shortest possible time. All funds received in the escrow shall be
deposited in interest-bearing accounts for the benefit of the depositing Party in any state or national
bank doing business in the State of California. All disbursements shall be made by check or wire
transfer from such accounts. If, in the opinion of either Party, it is necessary or convenient in order
to accomplish the Closing, such Party may provide supplemental escrow instructions; provided
that if there is any inconsistency between this Agreement and the supplemental escrow
instructions, then the provisions of this Agreement shall control. Th e Closing shall take place as
set forth in Section 6.4.3 below. Escrow Agent is instructed to release Seller’s and Buyer’s escrow
closing statements to the respective parties.
6.4.3 Authority of Escrow Agent. Escrow Agent is authorized to, and shall:
(a) Pay and charge Buyer for the premium of the Title Policy, including any
endorsements requested by Buyer.
(b) Pay and charge Buyer for escrow fees, charges, and costs as provided in
Section 6.4.1.2.
(c) Disburse to Seller the Purchase Price, less Seller’s share of any escrow
fees, costs and expenses, and record the Grant Deed when both the Buyer Conditions Precedent
and Seller Conditions Precedent have been fulfilled or waived in writing by Buyer and Seller, as
applicable. Immediately following recordation of the Grant Deed, Escrow Agent shall record the
DA and AHA.
(d) Disburse to Buyer the City Grants.
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(e) Do such other actions as necessary, including obtaining and issuing the
Title Policy, to fulfill its obligations under this Agreement.
(f) Direct Seller and Buyer to execute and deliver any instrument, affidavit,
and statement, and to perform any act, reasonably necessary to comply with the provisions of
FIRPTA, if applicable, and any similar state act and regulations promulgated thereunder.
(g) Prepare and file with all appropriate governmental or taxing authorities
uniform settlement statements, closing statements, tax withholding forms including IRS 1099 -S
forms, and be responsible for withholding taxes, if any such forms are provided for or required by
law.
(h) Deliver to Buyer the certificate of title to those Bridging Documents for
which Buyer has previously requested transfer of ownership from Seller to Buyer, the Non-Foreign
Affidavit, the California Certificate and the original recorded grant deed;
6.4.4 Pro-Rations. At the close of escrow, the Escrow Agent shall make
the following prorations: (i) property taxes will be prorated as of the close of escrow based upon
the most recent tax bill available, including any property taxes which may be assessed after the
close of escrow but which pertain to the period prior to the transfer of title to the Property to Buyer,
regardless of when or to whom notice thereof is delivered; and (ii) any Seller reimbursement for
the unapplied portion of the Administrative Fee.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
7.1. Seller’s Representations, Warranties. In addition to the representations,
warranties and covenants of Seller contained in the other sections of this Agreement, Seller
hereby represents, warrants and covenants to Buyer that the statements below in this Section 7.1
are each true and correct as of the Closing Date provided however, if to Seller’s actual knowledge
any such statement becomes untrue prior to Closing, Seller will notify Buyer in writing and
Buyer will have three (3) business days thereafter to determine if Buyer wishes to proceed with
Closing. If Buyer determines it does not wish to proceed, then the terms of Section 8 will apply.
As used herein, the term “to Seller’s best knowledge” shall mean the knowledge of
:_______________, with duty of inquiry.
(a) Authority. Seller is a public agency, lawfully formed, in existence
and in good standing under the laws of the State of California. Seller has the full right, capacity,
power, authority, and all necessary approvals to enter into and carry out the terms of this
Agreement. This Agreement has been duly executed by Seller, and upon delivery to and execution
by Buyer is a valid and binding agreement of Seller.
(b) Encumbrances. Other than the approval and recordation of the DA
and AHA at Closing, Seller has not alienated, encumbered, transferred, mortgaged, assigned,
pledged, or otherwise conveyed its interest in the Property or any portion thereof, nor entered into
any Agreement to do so, and there are no liens, encumbrances, mortgages, covenants, conditions,
reservations, restrictions, easements or other matters affecting the Property, except for the
Permitted Exceptions. Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage,
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assign, pledge, or otherwise convey its interest prior to the Close of Escrow, as long as this
Agreement is in force.
(c) There are no agreements affecting the Property except those which
have been disclosed by Seller. There are no agreements which will be binding on the Buyer or the
Property after the Close of Escrow.
(d) Condemnation. To Seller’s best knowledge, there are not presently
pending any eminent domain or condemnation actions against the Property or any part thereof;
and Seller has not received written notice of any eminent domain or condemnation actions being
contemplated that would affect the Property or any part thereof.
(e) Claims. To Seller’s best knowledge, Seller has not received written
notice of any claims or of any legal actions or proceedings in any court pending against the
Property or against Seller that may affect the Property or Seller’s ability to consummate the
transaction contemplated in this Agreement. To Seller’s best knowledge, Seller has not received
any written notice that the condition of the Property is in violation of any laws or regulations or
the requirements of any insurance underwriters or policies.
(f) Lease; Occupancy Rights; Superior Rights. There are no leases,
occupancy rights, rights of first refusal or rights of first offer that affect the Property. Seller will
deliver the property vacant and free of any lease agreements or occupancy rights prior to or at close
of escrow.
(g) No Conflict. The execution and delivery of this Agreement, and the
sale and conveyance of the Property contemplated hereby, do not and will not (a) violate the terms
of any order, writ or decree of any court or judicial or regulatory authority or body binding upon
Seller, (b) conflict with or result in a breach of any condition or provision or constitute a default
under or pursuant to the terms of any contract, mortgage, lien, lease, agreement, debenture or
instrument to which Seller is a party, or which is or purports to be binding upon Seller or upon the
Property, or (c) to Seller’s best knowledge, violate any rule, regulation, statute or law applicable
to Seller.
(h) Historical Designation of the Property. To Seller’s best knowledge,
Seller has not received written notice of any pending applications for or current designations of
the Property as a historic building or landmark.
(i) Property Documents. All Bridging Documents provided by Seller
to Buyer are true, correct and complete copies of all documents and information relating to the
Property in Seller’s possession and control. To the extent that Seller’s Bridging Documents were
prepared by third parties or for third parties, including a previous potential buyer of the Property,
Seller represents to Buyer that Seller has the right to provide such materials to Buyer and is not
prohibited by contract or otherwise from disclosing such materials to Buyer, but Seller does not
make any representation about Buyer’s ability or inability to use or rely on any such materials, or
the accuracy or completeness thereof. Seller shall not be liable to Buyer or any other party for any
detrimental reliance on such third-party materials.
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(j) Environmental Laws. To Seller’s best knowledge, the Property is
not in violation of any federal, state, local or administrative agency ordinance, law, rule, regulation,
order or requirement relating to environmental conditions or Hazardous Material (“Environmental
Laws”). To Seller’s best knowledge, Seller has not used, manufactured, generated, treated, stored,
disposed of, or released any Hazardous Materials on, under or about the Property or transported
any Hazardous Materials over the Property except in compliance with Environmental Laws. For
the purposes hereof, “Hazardous Material” shall mean any substance, chemical, waste or other
material which is listed, defined or otherwise identified as “hazardous” or “toxic” under any
federal, state, local or administrative agency ordinance or law, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et
seq. and the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., or any
regulation, order, rule or requirement adopted thereunder, as well as any formaldehyde, urea,
polychlorinated biphenyls, petroleum, petroleum product or by-product, crude oil, natural gas,
natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel or mixture thereof, radon,
asbestos, and “source,” “special nuclear” and “by-product” material as defined in the Atomic
Energy Act of 1985,42 U.S.C. §§ 3011 et seq.
7.2. Seller’s Covenants. From the Effective Date, through the Closing, Seller
covenants as follows:
(a) Seller shall terminate all maintenance or service contracts and
utilities relating to and servicing the Property, as of the Closing Date.
(b) Seller shall remove all fixtures, furnishings and equipment and
personal property (“FF&E”) that is not adhered to or an integral improvement to the Property as
of the Closing Date, so that the Property is delivered in a vacant, broom-clean condition with all
trash and personal effects removed.
(c) Seller shall maintain and operate the Property in its present state of
repair and in substantially the same condition as on the Effective Date.
(d) Seller shall pay all liens, encumbrances, taxes, penalties, interest and
assessments on the Property, and perform all covenants thereunder, before they become delinquent
or a default would occur thereunder.
(e) Seller shall maintain in effect all insurance policies relative to the
Property in full force and effect.
(f) Seller shall promptly notify Buyer if any of the representations and
warranties set forth in this Agreement become untrue prior to the Closing Date.
The truth and accuracy of each of the representations and warranties, and the
performance of all covenants of Seller contained in this Agreement are conditions precedent to
Buyer’s obligation to proceed with the Closing hereunder. The foregoing representations and
warranties shall survive the expiration, termination, or close of escrow of this Agreement and shall
not be deemed merged into the deed upon closing.
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7.3. Buyer’s Representations and Warranties. In addition to the
representations, warranties and covenants of Buyer contained in the other sections of this
Agreement, Buyer hereby represents, warrants and covenants to Seller that the statements below
in this Section 7.3 are each true as of the Effective Date, and, if to Buyer’s actual knowledge any
such statement becomes untrue prior to Closing, Buyer shall so notify Seller in writing and Seller
shall have at least three (3) business days thereafter to determine if Seller wishes to proceed with
Closing.
(a) Buyer has the full right, capacity, power and authority to enter into
and carry out the terms of this Agreement. This Agreement has been duly executed by Buyer, and
upon delivery to and execution by Seller shall be a valid and binding agreement of Buyer.
(b) Buyer is not bankrupt or insolvent under any applicable federal or
state standard, has not filed for protection or relief under any applicable bankruptcy or creditor
protection statute, and has not been threatened by creditors with an involuntary application of any
applicable bankruptcy or creditor protection statute.
(c) Buyer accepts and acknowledges that after the Closing, the Property
will be subject to the DA and AHA, which will be recorded against the Property at Closing.
The truth and accuracy of each of the representations and warranties, and the
performance of all covenants of Buyer contained in this Agreement are conditions precedent to
Seller’s obligation to proceed with the Closing hereunder.
7.4. Property Sold, “AS IS”. Buyer specifically acknowledges that the Seller
is selling the Property on an “AS IS”, “WHERE IS” and “WITH ALL FAULTS” basis and that,
subject to Seller's representations, warranties, covenants and obligations set forth in this
Agreement, and all exhibits attached hereto and incorporated herein, and any obligations arising
under applicable law, Buyer is not relying on any representations or warranties of any kind
whatsoever, express or implied, from Seller, or its employees, appointed or elected officials,
agents, or brokers as to any matters concerning the Property. The Seller makes no
representations or warranties as to any matters concerning the Property, including without
limitation: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the
quality, nature, adequacy, and physical condition of soils, geology and any groundwater, (iii) the
existence, quality, nature, adequacy and physical condition of utilities serving the Property, (iv)
the development potential of the Property, and the Property's use, habitability, merchantability,
or fitness, suitability, value or adequacy of the property for any particular purpose, (v) except as
otherwise provided in this Agreement, the zoning or other legal status of the Property or any
other public or private restrictions on use of the Property, (vi) the compliance of the Property or
its operation with any Environmental Laws, covenants, conditions and restrictions of any
governmental or quasi-governmental entity or of any other person or entity, (vii) the presence or
removal of Hazardous Materials, substances or wastes on, under or about the Property or the
adjoining or neighboring property; (viii) the quality of any labor and materials used in any
improvements on the Property, (ix) the condition of title to the Property, (x) the leases, service
contracts, or other agreements affecting the Property, or (xi) the economics of the operation of
the Property.
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8. DEFAULT, REMEDIES, TERMINATION.
8.1. Default Remedies – General. Failure by either Party to perform any
action or covenant required by this Agreement within sixty (60) days following receipt of written
Notice from the other Party specifying the failure shall constitute a “Default” under this
Agreement; provided, however, that if the failure to perform cannot be reasonably cured within
such sixty (60) day period, a Party shall be allowed additional time as is reasonably necessary to
cure the failure so long as such Party commences to cure the failure within the sixty (60) day
period and thereafter diligently prosecutes the cure to completion.
8.2. Default.
8.2.1 Remedies.
8.2.1.1 Default by Buyer; Seller’s Remedies. Upon the occurrence
of an uncured Default by Buyer, Seller’s remedies shall be limited to (i) liquidated damages
pursuant to Section 8.2.2 and (ii) termination of this Agreement pursuant to Section 8.3.
8.2.1.2 Default by Seller; Buyer’s Remedies. Upon the occurrence
of a Default by Seller under this Agreement, Buyer’s remedies shall be limited to obtaining specific
performance or injunctive relief, or terminating this Agreement, and in either event, return of the
Deposit and any unused portion of the Administrative Fee.
8.2.2 Liquidated Damages. SUBJECT TO NOTICE AND EXPIRATION
OF APPLICABLE CURE PERIODS AND ANY PERMITTED EXTENSIONS OF TIME AS
PROVIDED IN THIS AGREEMENT, IF IN THE EVENT OF A BUYER DEFAULT AS SET
FORTH IN 8.2.1.1, SELLER WILL SUFFER DAMAGES AND THAT IT IS IMPRACTICABLE
AND INFEASIBLE TO FIX THE ACTUAL AMOUNT OF SUCH DAMAGES. THEREFORE,
CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF TH IS
AGREEMENT, IN THE EVENT OF AN UNCURED DEFAULT, BUYER, WITHIN THIRTY
(30) DAYS FOLLOWING SELLER’S WRITTEN DEMAND THEREFOR, SHALL TURN
OVER ALL REPORTS AND PLANS IN THE BUYER’S ACTUAL OR CONSTRUCTIVE
POSSESSION THAT HAVE BEEN PREPARED BY AND FOR BUYER RELATED TO THE
PROJECT AND THE PROPERTY (WITH THE EXCEPTION OF BUYER’S INTELLECTUAL
PROPERTY, CONFIDENTIAL FINANCIAL INFORMATION, AND ANY INFORMATION
SUBJECT TO LEGAL PRIVILEGE) (THE “MATERIALS”). THE BUYER’S DEPOSIT AND
MATERIALS SHALL SERVE AS LIQUIDATED DAMAGES TO THE SELLER FOR A
DEFAULT SPECIFIED IN SECTION 8.2.1.1. THE VALUE OF THE BUYER’S DEPOSIT AND
MATERIALS CONSTITUTES A REASONABLE ESTIMATE OF THE DAMAGES THAT
THE SELLER WOULD INCUR IN THE EVENT OF A DEFAULT. RETENTION OF THE
BUYER’S DEPOSIT, AND MATERIALS SHALL BE THE SELLER’S SOLE AND
EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT OF A DE FAULT A DEFAULT
SPECIFIED IN SECTION 8.2.1.1, AND THE SELLER WAIVES ANY AND ALL RIGHT TO
SEEK OTHER RIGHTS OR REMEDIES AGAINST BUYER, INCLUDING WITHOUT
LIMITATION, SPECIFIC PERFORMANCE. THE LIQUIDATED DAMAGES PROVIDED
FOR HEREIN IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE
MEANING OF SECTIONS 3275 OR 3369 OF THE CALIFORNIA CIVIL CODE, BUT IS
15
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO THE SELLER PURSUANT TO
SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE. SELLER WAIVES
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. BY PLACING ITS
INITIALS BELOW, BUYER AND SELLER SPECIFICALLY CONFIRMS THE ACCURACY
OF THE STATEMENTS MADE ABOVE, THE REASONABLENESS OF THE AMOUNT OF
LIQUIDATED DAMAGES AGREED UPON, AND THE FACT THAT EACH PARTY WAS
REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT
WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
INITIALS: _________ ______________
SELLER BUYER
8.3. Termination. This Agreement may be terminated by the Party for whom
a condition is intended to benefit: (i) if there is an uncured Default, after notice from the Party
not in default and expiration of all cure periods, (ii) if there is a failure of an express Buyer
Contingency to Closing (Section 6.2) or Seller Contingency to closing (6.3) (which is not waived
by the Party whom the condition benefits) by timely notice from the Party whom the condition
benefits, (iii) a representation or warranty of a Party becomes untrue prior to Closing under
Section 7.1 or 7.3 (which is not waived by the Party whom the condition benefits), or Seller
cannot satisfy a covenant to Closing set forth in Section 7.3 , (iv) upon mutual written consent
of the Parties, each in its sole discretion. Upon termination, the Parties will also cooperate to
record a notice of termination or quitclaim deed.
8.4 Force Majeure Delay. All obligations in this Agreement shall not be deemed
to be in default, all performance and other dates specified in those sections shall be extended,
where delays are due to: war; insurrection; strikes and labor disputes; lockouts; riots; floods;
earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; litigation and arbitration, including court delays; legal challenges
to this Agreement, legal challenges to the Project Approvals, or legal challenges to any other
approval required from any public agency other than the Seller for the Project, or any initiatives
or referenda regarding the same; environmental conditions, pre-existing or discovered, delaying
the construction or development of the Property or any portion thereof; unusually severe weather
but only to the extent that such weather or its effects (including, without limitation, dry out time)
result in delays that cumulatively exceed thirty (30) days for every winter season occurring after
commencement of construction of the Project; acts or omissions of the other Party; or acts or
failures to act of any public or governmental agency or entity (except that acts or f ailures to act of
Seller shall not excuse performance by Seller); moratorium; or a Severe Economic Recession (each
a “Force Majeure Delay”). An extension of time for any such cause shall be for the period of the
enforced delay and shall commence to run from the time of the commencement of the cause, if
notice by the Party claiming such extension is sent to the other Party within sixty (60) days of the
commencement of the cause. If notice is sent after such sixty (60) day period, then the extension
shall commence to run no sooner than sixty (60) days prior to the giving of such notice. Buyer’s
inability or failure to obtain financing or otherwise timely satisfy shall not be deemed to be a cause
outside the reasonable control of the Buyer and shall not be the basis for an excused delay unless
such inability, failure or delay is a direct result of a Severe Economic Recession. “Severe
Economic Recession” means a decline in the monetary value of all finished goods and services
produced in the United States, as measured by initial quarterly estimates of United States Gross
16
Domestic Product (“GDP”) published by the United States Department of Commerce Bureau of
Economic Analysis (and not subsequent monthly revisions), lasting more than four (4) consecutive
calendar quarters. Any quarter of flat or positive GDP growth shall end the period of such Severe
Economic Recession.
9. BROKERS. Seller represents that no real estate broker has been retained by Seller
in the sale of the Property or the negotiation of this Agreement. Buyer represents that no real estate
broker has been retained by Buyer in the procurement of the Property or negotiation of this
Agreement. Neither Seller nor Buyer shall pay or be liable for any commissions or brokerage fees
for the sale of the Property. Buyer and Seller shall indemnify, hold harmless and defend each other
from any and all claims, actions and liability for any breach of the preceding sentence, and any
commission, finder’s fee, or similar charges arising out of Buyer’s or Seller’s conduct.
10. ASSIGNMENT. Buyer may not assign its rights or delegate its duties under this
Agreement without Seller’s prior written consent, which may be withheld in Seller’s sole
discretion, except for an assignment to a “Buyer Permitted Transferee”, set forth in subsections
(a)-(c) below, which shall not require Seller’s consent under this Section 10 (each a “Buyer
Permitted Transferee”):
(a) Any transfer for financing purposes to secure the funds necessary for construction
and/or permanent financing of the Project;
(b) An assignment of this Agreement to an Affiliate of Buyer;
(c) A special purpose entity created by Buyer for the development of the Linden
Property to serve as the ownership entity for the Project.
For the purposes of this Section 10, “Affiliate of Buyer” means an entity or person that is directly
or indirectly controlling, controlled by, or under common control with Buyer. For the purposes of
this definition, “control” means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of an entity or a person, whether through the
ownership of voting securities, by contract, or otherwise, and the terms “controlling” and
“controlled” have the meanings correlative to the foregoing. Upon execution of an assignment and
assumption agreement between Buyer, as assignor, and a Buyer Permitted Transferee, ROEM
Development Corporation shall be released from all obligations under this Agreement, and
thereafter, for purposes of this Agreement and where the context warrants, a reference to the Buyer
shall be to the applicable Permitted Transferee.
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11. ENVIRONMENTAL INDEMNITY. Effective upon Close of Escrow, to the fullest
extent allowed by law, Buyer agrees to unconditionally and fully indemnify, protect, defend (with
counsel satisfactory to Seller), and hold Seller, and their respective elected and appointed officers,
officials, employees, agents, consultants and contractors harmless from and against any and all
claims (including without limitation third party claims for personal injury, real or personal property
damage, or damages to natural resources), actions, administrative proceedings (including without
limitation both formal and informal proceedings), judgments, damages, punitive damages,
penalties, fines, costs (including without limitation any and all costs relating to investigation,
assessment, analysis or clean-up of the Property), liabilities (including without limitation sums
paid in settlements of claims), interest, or losses, including reasonable attorneys’ and paralegals’
fees and expenses (including without limitation any such fees and expenses incurred in enforcing
this Agreement or collecting any sums due hereunder), together with all other costs and expenses
of any kind or nature (collectively, the “Costs”) that arise directly or indirectly from or in
connection with the presence, suspected presence, release, or suspected release, of any Hazardous
Materials in, on or under the Property or in or into the air, soil, soil gas, groundwater, or s urface
water at, on, about, around, above, under or within the Property, or any portion thereof, except
those Costs that arise solely as a result of actions by Seller or actions by the Seller. The
indemnification provided pursuant to this Section shall specifically apply to and include claims or
actions brought by or on behalf of employees of Buyer or any of its predecessors in interest and
Buyer hereby expressly waives any immunity to which Buyer may otherwise be entitled under any
industrial or worker’s compensation laws. In the event the Seller suffers or incurs any Costs, Buyer
shall pay to Seller the total of all such Costs suffered or incurred by the Seller upon demand
therefore by Seller. The indemnification provided pursuant to this Section shall include, without
limitation, all loss or damage sustained by the Seller due to any Hazardous Materials: (a) that are
present or suspected by a governmental agency having jurisdiction to be present in the Property or
in the air, soil, soil gas, groundwater, or surface water at, on, about, above, under, or within the
Property (or any portion thereof) or to have emanated from the Property, or (b) that migrate, flow,
percolate, diffuse, or in any way move onto, into, or under the air, soil, soil gas, groundwater, or
surface water at, on, about, around, above, under, or within the Property (or any portion thereof)
after the date of this Agreement as a result of Seller’s or its predecessors’ activities on the Property.
The provisions of this Section 10 shall survive the termination of this Agreement and the Close of
Escrow.
12. HAZARDOUS MATERIALS; DEFINITIONS.
12.1. Hazardous Materials. As used in this Agreement, “Hazardous
Materials” means any chemical, compound, material, mixture, or substance that is now or may
in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws
(defined below) as a “hazardous substance”, “hazardous material”, “hazardous waste”,
“extremely hazardous waste”, infectious waste”, toxic substance”, toxic pollutant”, or any other
formulation intended to define, list or classify substances by reason of deleterious properties
such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term “Hazardous
Materials” shall also include asbestos or asbestos-containing materials, radon, chrome and/or
chromium, polychlorinated biphenyls, petroleum, petroleum products or by-products, petroleum
components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, and
synthetic gas usable as fuel, perchlorate, and methyl tert butyl ether, whether or not defined as a
hazardous waste or hazardous substance in the Environmental Laws.
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12.2. Environmental Laws. As used in this Agreement, “Environmental
Laws” means any and all federal, state and local statutes, ordinances, orders, rules, regulations,
guidance documents, judgments, governmental authorizations or directives, or any other
requirements of governmental authorities, as may presently exist, or as may be amended or
supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling,
treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the
environment or human, plant or animal health, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801 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.
§ 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Porter-Cologne
Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act
(Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement
Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act
(Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans
& Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter-Presley-Tanner
Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et seq.).
13. RELEASE BY BUYER. Effective upon the Close of Escrow, and subject to
Seller's representations under this Agreement and any obligations arising under this Agreement or
applicable law, Buyer waives releases, remises, acquits and forever discharges Seller, and its
officers, directors, appointed and elected officials, managers, employees and agents, and any other
person acting on behalf of Seller, from any and all claims, actions, causes of action, demands,
rights, damages, costs, expenses and compensation whatsoever, direct or indirect, known or
unknown, foreseen or unforeseen, which Buyer now has or which may arise in the future on
account of or in any way arising from or in connection with the physical condition of the Property
or any law or regulation applicable thereto including, without limiting the generalit y of the
foregoing, any federal, state or local law, ordinance or regulation pertaining to Haz ardous
Materials. This Section 13 shall survive the termination of this Agreement and the Close of
Escrow.
BUYER ACKNOWLEDGES THAT BUYER IS FAMILIAR WITH SECTION 1542 OF
THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
BY INITIALING BELOW, BUYER EXPRESSLY WAIVES THE BENEFITS OF SECTION
1542 OF THE CALIFORNIA CIVIL CODE WITH RESPECT TO THE FOREGOING
RELEASE:
19
Buyer’s initials: _____________
14. LOSS BY FIRE OR OTHER CASUALTY/CONDEMNATION
(a) If prior to the Closing Date the Property is materially damaged or
condemned, or if Seller receives notice of pending or threatened condemnation proceedings, as
defined in subparagraph (c) below, Buyer shall have the right, exercisable by giving written notice
of such decision to Seller within fifteen (15) calendar days after receiving written notice of such
damage, condemnation, or threatened condemnation to elect to proceed with this Agreement,
subject to the terms and conditions of this Section 14. If Buyer fails to give such written notice of
its intent to proceed with the transaction, Buyer shall be deemed to have elected to terminate this
Agreement, in which case neither party shall have any further rights or obligations hereunder
(except for those that expressly survive the termination of this Agreement) and the Deposit shall
be returned to Buyer.
(b) In the event of any damage to or condemnation of the Property,
whether or not material, upon the Closing all insurance or condemnation proceeds payable to Seller
by reason of such damage, destruction, or condemnation shall be paid or assigned to Buyer, less
such sums as may have been expended by Seller for the repair or restoration of the Property.
(c) For the purpose of this paragraph, the phrase “materially damaged
or condemned” shall be deemed to mean a loss or damage to the Property the cost of repair or
replacement of which exceeds Five Hundred Thousand Dollars ($500,000.00) or which results in
diminution in land area which results in a loss of any net square footage of the Property or any
condemnation of the Property, threatened or actual. Seller shall notify Buyer in writing within two
(2) days of any material damage, condemnation or threatened condemnation.
15. MISCELLANEOUS.
15.1. Attorneys’ Fees. If any party employs counsel to enforce or interpret this
Agreement, including the commencement of any legal proceeding whatsoever (including
insolvency, bankruptcy, arbitration, mediation, declaratory relief or other litigation), the
prevailing party shall be entitled to recover its reasonable attorneys’ fees and court costs
(including the service of process, filing fees, court and court reporter costs, investigative fees,
expert witness fees, and the costs of any bonds, whether taxable or not) and shall include the
right to recover such fees and costs incurred in any appeal or efforts to collect or otherwise
enforce any judgment in its favor in addition to any other remedy it may obtain or be awarded.
Any judgment or final order issued in any legal proceeding shall include reimbursement for all
such attorneys’ fees and costs. In any legal proceeding, the “prevailing party” shall mean the
party determined by the court to most nearly prevail and not necessarily the party in whose favor
a judgment is rendered.
15.2. Interpretation. This Agreement has been negotiated at arm’s length and
each party has been represented by independent legal counsel in this transaction and this
Agreement has been reviewed and revised by counsel to each of the Parties. Accordingly, each
party hereby waives any benefit under any rule of law (including Section 1654 of the California
20
Civil Code) or legal decision that would require interpretation of any ambiguities in this
Agreement against the drafting party.
15.3. Survival. All indemnities, covenants, representations and warranties
contained in this Agreement shall survive Close of Escrow.
15.4. Successors. Except as provided to the contrary in this Agreement, this
Agreement shall be binding on and inure to the benefit of the Parties and their successors and
assigns.
15.5. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of California.
15.6. Integrated Agreement; Modifications. This Agreement (and all exhibits
incorporated herein) contains all the agreements of the Parties concerning the subject hereof any
cannot be amended or modified except by a written instrument executed and delivered by the
parties. There are no representations, agreements, arrangements or understandings, either oral
or written, between or among the parties hereto relating to the subject matter of this Agreement
that are not fully expressed herein. In addition there are no representations, agreements,
arrangements or understandings, either oral or written, between or among the Parties upon which
any party is relying upon in entering this Agreement that are not fully expressed herein.
15.7. Severability. If any term or provision of this Agreement is determined to
be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal,
unenforceable, or invalid provisions or part thereof shall be stricken from this Agreement, any
such provision shall not be affected by the legality, enforceability, or validity of the remainder
of this Agreement. If any provision or part thereof of this Agreement is stricken in accordance
with the provisions of this Section, then the stricken provision shall be replaced, to the extent
possible, with a legal, enforceable and valid provision this is in keeping with the intent of the
Parties as expressed herein.
15.8. Notices. Any delivery of this Agreement, notice, modification of this
Agreement, collateral or additional agreement, demand, disclosure, request, consent, approval,
waiver, declaration or other communication that either party desires or is required to give to the
other party or any other person shall be in writing. Any such communication may be served
personally, or by nationally recognized overnight delivery service (i.e., Federal Express) which
provides a receipt of delivery, or sent by prepaid, first class mail, return receipt requested, with
a courtsey copy delivered via e-mail, to the party’s address as set forth below:
To Buyer: ROEM Development Corporation
1650 Lafayette Street
Santa Clara, CA 95050
Attention: Alex Sanchez
Telephone: (408) 984-5600 x16
Email: asanchez@roemcorp.com
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with a copy to: Situs Law, PC
Attn: Summer Ludwick
10 Almaden Blvd., Suite 1250
San Jose, CA 95113
Tel (408) 299-0100
Email: sludwick@situslaw.com
To Seller: City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
Attn: Executive Director
Tel (650) 877-8501
Email
with a copy to: Meyers Nave
Attn: Jason Rosenberg
555 12th Street, Suite 1500
Oakland, CA 94607
Tel (510) 808-2000
Email: jrosenberg@meyersnave.com
If to Escrow Holder: Chicago Title Insurance Company
Escrow Agent: Sherri Keller
675 N. First Street
San Jose, CA 95112
Tel (408)993-2325
Email: Sherri.keller@ctt.com
Any such communication shall be deemed effective upon p ersonal delivery or on the date of first
refusal to accept delivery as reflected on the receipt of delivery or return receipt, as applicable.
Any party may change its address by notice to the other party. Each party shall make an ordinary,
good faith effort to ensure that it will accept or receive notices that are given in accordance with
this section and that any person to be given notice actually receives such notice.
15.9. Time. Time is of the essence to the performance of each and every
obligation under this Agreement.
15.10. Days of Week. If any date for exercise of any right, giving of any notice,
or performance of any provision of this Agreement falls on a Saturday, Sunday or federal
observed holiday, the time for performance will be extended to 5:00 p.m. on the next business
day.
15.11. Reasonable Consent and Approval. Except as otherwise provided in this
Agreement, whenever a Party is required or permitted to give its consent or approval under this
Agreement, such consent or approval shall not be unreasonably withheld or delayed. If a Party
is required or permitted to give its consent or approval in its sole and absolute discretion or if
22
such consent or approval may be unreasonably withheld, such consent or approval may be
unreasonably withheld but shall not be unreasonably delayed.
15.12. Cooperation and Further Assurances. Each Party agrees to cooperate with
the other in this transaction and, in that regard, shall at their own cost and expense execute and
deliver such further documents and instruments and shall take such other actions as may be
reasonably required or appropriate to carry out the intent and purposes of this Agreement.
15.13. Waivers. Any waiver by any Party shall be in writing and shall not be
construed as a continuing waiver. No waiver will be implied from an y delay or failure to take
action on account of any default by any Party. Consent by any Party to any act or omission by
another Party shall not be construed to be consent to any other subsequent act or omission or to
waive the requirement for consent to be obtained in any future or other instance.
15.14. Signatures/Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Any one of such completely executed counterparts shall be
sufficient proof of this Agreement. Copies of original signatures shall suffice for all purposes.
15.15. Access to Property. Prior to the Closing, Seller shall cooperate to enable
representatives of Buyer to obtain the right of access to all portions of the Property for the
purposes of implementing this Agreement. Buyer agrees to provide written notice to Seller at
least twenty four (24) hours prior to undertaking any studies or work upon the Property. Buyer
shall indemnify, defend, protect and hold Seller and Seller Parties harmless from any Claims
arising out of the acts, omissions, negligence or willful misconduct of Buyer or its employees,
agents, contractors, subcontractors or representatives (each a “Buyer Party” and, collectively,
the “Buyer Parties”) in connection with such studies and investigations, except for Claims
arising from or related to any pre-existing condition on or of the Property or Claims to the extent
caused by the active negligence or willful misconduct of Seller or its employees, agents,
contractors or representatives. In addition, in the event Buyer or any Buyer Party causes any
damage to any portion of the Property, Buyer shall promptly restore the Property as nearly as
possible to the physical condition existing immediately prior to Buyer’s entry onto the Property.
Buyer’s indemnification obligations set forth in this Section 15.15 shall survive Closing or the
termination of this Agreement.
15.16. Memorandum of Agreement. A Memorandum of Agreement in
substantially the form of Exhibit E attached hereto and incorporated herein by this reference shall
be executed and recorded against the Property immediately following recordation of the Grant
Deed.
15.17. Relationship Between Seller and Buyer. It is hereby acknowledged that
the relationship between Seller and Buyer is not that of a partnership or joint venture and that
Seller and Buyer shall not be deemed or construed for any purpose to be the agent of the other.
Accordingly, except as expressly provided herein or in the exhibits hereto, Seller shall have no
rights, powers, duties or obligations with respect to the development, operation, maintenance or
management of the Project.
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15.18. Seller Approvals and Actions. Whenever a reference is made herein to an
action or approval to be undertaken by Seller, the City Manager of the City of South San
Francisco, or its designee is authorized to act on behalf of Seller.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
SELLER:
CITY OF SOUTH SAN FRANCISCO
By: _______________________________
Mike Futrell
City Manager
ATTEST:
By: _______________________________
City Clerk
APPROVED AS TO FORM:
By: _______________________________
Jason Rosenberg
City Attorney
BUYER:
ROEM DEVELOPMENT CORPORATION,
a California corporation
By: _______________________________
Robert Emami, President
APPROVED AS TO FORM:
By: _______________________________
Counsel for Buyer
24
Chicago Title Insurance Company agrees to act as Escrow Holder in accordance with the
terms of this Agreement.
CHICAGO TITLE INSURANCE COMPANY
By:
Name:
Its:
Dated:
25
LIST OF EXHIBITS
Exhibit A Legal Description
Exhibit B Affordable Housing Agreement
Exhibit C Development Agreement
Exhibit D Completion Guaranty
Exhibit E Memorandum of Agreement
26
Exhibit A
LEGAL DESCRIPTION
For APN/Parcel ID(s): 012-314-010
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH
SAN FRANCISCO, COUNTY OF SAN MATEO, STATE OF CALIFORNIA AND IS
DESCRIBED AS FOLLOWS:
LOTS 10 AND 11, BLOCK 138, AS DELINEATED UPON THAT CERTAIN MAP
ENTITLED "SOUTH SAN FRANCISCO, SAN MATEO CO., CAL. PLAT NO. 1", FILED
FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO,
STATE OF CALIFORNIA, ON MARCH 1ST, 1892 IN BOOK
"B" OF MAPS, AT PAGE 6 AND COPIED INTO BOOK 2 OF MAPS AT PAGE 52.
27
Exhibit B
AFFORDABLE HOUSING AGREEMENT
[to be provided upon execution]
28
Exhibit C
DEVELOPMENT AGREEMENT
[to be provided upon execution]
29
Exhibit D
COMPLETION GUARANTY
[to be provided upon execution]
30
Exhibit E
FORM OF MEMORANDUM OF AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
APN: Space above this line for recorder’s use
MEMORANDUM OF PURCHASE AGREEMENT
THIS MEMORANDUM OF PURCHASE AGREEMENT (this “Memorandum”)
is made effective as of the ____ day of _______, _____, by and between_______, a
California____________ (“Seller”), and _____________________ (“Buyer”), with reference to
the following facts:
A. Seller and Buyer have entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions, dated _________, 2017 (the “Agreement”), providing
for, among other things, the sale by Seller to Buyer of the real property more particularly described
on Exhibit “A” (the “Property”).
B. Seller and Buyer now desire to set forth a memorandum of public record of
such Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the
parties hereto, it is hereby agreed as follows:
1. Purchase. Seller has agreed to sell to Buyer, and Buyer has agreed to
purchase from Seller, the Property upon the terms and subject to the conditions contained in the
Agreement, all of which terms and conditions are hereby incorporated herein by this reference as
though fully set forth herein.
2. Termination. If not acquired by Buyer pursuant to the Purchase
Agreement, this Memorandum shall terminate as of the date the Agreement terminates in
accordance with its terms and in no event later than ______________.
3. Purpose. This Memorandum is prepared solely for the purpose of
recordation, and it in no way modifies the provisions of the Agreement.
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4. No Change in Ownership. The recording of this document does not
constitute a change in ownership. The recording is for the sole purpose of placing third parties on
notice that the Seller has entered into a contract to sell the subject property and that the sale is
pending until such time as a Grant Deed is recorded or a Quitclaim Deed releasing the
Memorandum is recorded.
IN WITNESS WHEREOF, the parties hereto have executed this instrument as of
the date first written above.
Seller:
By: _________________________________
Name: _______________________________
Its: _________________________________
Date: _____________________________
Buyer
By: _________________________________
Name: _______________________________
Its: _________________________________
Date: _____________________________
1
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
201-219 Grand Avenue
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (“this Agreement”), dated _______, 2017, for reference purposes only, is made
by and between the City of South San Francisco, a municipal corporation, (“City” or the “Seller”)
and ROEM Development Corporation, a California corporation (“Buyer”). Seller and Buyer are
collectively referred to herein as the “Parties.”
RECITALS
A. The City of South San Francisco is the owner of certain real property located in
the City of South San Francisco, California, at 201-219 Grand Avenue, known as County
Assessor's Parcel Numbers 012-316-110, 012-316-100, 012-316-090 and 012-316-080 and more
particularly described in Exhibit A attached hereto (the "Grand Property" or the “Property”
herein).
B. On June 29, 2011, the Legislature of the State of California (the “State”) adopted
Assembly Bill x1 26 (“AB 26”), which amended provisions of the State’s Community
Redevelopment Law (Health and Safety Code sections 33000 et seq)(the “Dissolution Law”),
pursuant to which the former Redevelopment Agency of the City of South San Francisco was
dissolved on February 1, 2012. The City became the Successor Agency to the Redevelopment
Agency of the City of South San Francisco (“Successor Agency”), and in accordance with the
Dissolution Law, the Successor Agency prepared a Long Range Property Management Pl an
(“LRPMP”), which was approved by a resolution of the Oversight Board for the Successor
Agency to the Redevelopment Agency of the City of South San Francisco (“Oversight Board”)
on May 21, 2015, and was approved by the Department of Finance (“DOF”) on October 1, 2015.
C. Consistent with the Dissolution Law and the LRPMP, certain real properties located
in the City of South San Francisco, that were previously owned by the former Redevelopment
Agency was transferred to the Successor Agency (“Agency Properties”). On October 18, 2016,
the City entered into an Amended and Restated Master Agreement for Taxing Entity
Compensation (“Compensation Agreement”) with the various local agencies who receive shares
of property tax revenues from the former redevelopment project area (“Taxing Entities”), which
provides that upon approval by the Oversight Board of the sale price, and consistent with the
LRPMP, the proceeds from the sale of any of the Agency Properties will be distributed to the
Taxing Entities in accordance with their proportionate contributions to the Real Property Tax Trust
Fund for the former Redevelopment Agency.
D. On February 8, 2017, the City adopted Resolution 16-2017 approving the transfer
of the Agency Properties from the Successor Agency to the City and in accordance with the
requirements set forth in the LRPMP, and on February 21, 2017, the Oversight Board adopted a
resolution approving the transfer of the Redevelopment Properties from the Successor Agency to
the City.
2
E. Consistent with the LRPMP and the Oversight Board resolution, the Successor
Agency and City executed and recorded grant deeds transferring the Agency Properties to the City.
The Grand Property is one of the Agency Properties and is subject to the provisions of the LRPMP
and the Compensation Agreement.
F. The City desires to sell the Grand Property to Buyer for the construction of a high-
density, mixed-use project, including 46 residential units, nine (9) of which are required to be
below market rate units, and approximately 6,000 square feet of ground floor commercial units
(the “Grand Project”), as further described in the Grand Affordable Housing Agreement
substantially in the form attached hereto as Exhibit B (the “AHA”). Development of the Grand
Project is described and defined in the Development Agreement between the City and Buyer,
substantially in the form attached hereto as Exhibit C ( the “DA”). Upon Closing, the AHA and
the DA will be recorded in the official records of San Mateo County.
G. In order to assist in the construction of affordable units, upon Closing, Seller will
provide Buyer a grant in the amount Five Hundred and Twenty Five Thousand Dollars
($525,000.00) from City Affordable Housing In-Lieu Fees, and a grant in the amount of One
Million Two Hundred and Twenty Five Thousand ($1,225,000.00) from City Affordable Housing
Bond Funds to partially finance the Project on the Grand Property (“City Grants”), as set forth in
this Agreement and the DA. The terms and conditions associated with Buyer’s use of the City
Grants after the Closing are set forth in the DA.
H. On April 4, 2017, City of South San Francisco and Agency and Buyer entered into
an Exclusive Negotiation Rights Agreement (“ENRA”) that provided the Buyer the exclusive right
to collaborate and negotiate with the City for the purpose of reaching agreement on a project
description, appropriate land uses, economic feasibility, and a definitive agreement whose terms
and conditions would govern any conveyance and development of the Property. In furtherance
thereof, Buyer submitted a deposit in the amount of Two Hundred Thousand Dollars ($200,000.00)
to City to reimburse the costs Seller would incur in preparation of this Agreement and the Purchase
and Sale Agreement for the Linden Project (“ENRA Deposit”). Upon execution of the ENRA,
City provided Buyer with copies, but not ownership, of all City owned non-privileged studies,
surveys, plans, specifications, reports, and other documents with respect to the Property that City
had in its possession or control, which had not already been provided to Buyer (“Bridging
Documents”).
I. The Grand Property and the Grand Project are fully entitled, and have obtained
planning approval from the Design Review Board, Planning Commission, Successor Agency and
City Council as well as the Oversight Board. The Grand Project entitlements include Planning
Project: P15-0014; Use Permit UP15-0003; Design Review DR15-0016 and Parking Exception
PE15-0001 (collectively herein the “Project Approvals”). Buyer acknowledges and agrees that
execution of this Agreement by Agency does not constitute approval for the purpose of the
issuance of building permits for the Project, does not limit in any manner the discretion of Agency
in such approval process if any, and does not relieve Buyer from the obligation to apply for and
obtain any, if necessary, entitlements, approvals, and permits, for construction of the Grand Project
on the Grand Property including without limitation, the approval of architectural plans, the
issuance of any certificates regarding historic resources required in connection with the Project (if
3
any), and any required environmental review in the event Buyer seeks revisions to any of the above
Project Approvals.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged by the parties, Seller and Buyer hereby agree as follows:
AGREEMENT
1. INCORPORATION OF RECITALS AND EXHIBITS. The Recitals set forth
above and the Exhibits attached to this Agreement are each incorporated into the body of this
Agreement as if set forth in full.
2. PURCHASE AND SALE.
2.1. Subject to the terms and conditions set forth herein, Seller agree to sell
the Property to Buyer, and Buyer hereby agrees to acquire the Property from Seller.
2.2. The purchase price for the Property to be paid by Buyer to City is One
Million Two Hundred Thousand Dollars ($1,200,000.00), payable in all cash at Closing. Seller
shall distribute the net sale proceeds to the taxing entities pursuant to Section 5 of the
Compensation Agreement.
3. ESCROW.
3.1. Escrow Account. This sale shall be consummated through an “Escrow”
established with Chicago Title Insurance Company; Escrow Agent: Sherri Keller, 675 N. First
Street, San Jose, CA 95112 (“Escrow Holder”). Escrow Holder shall perform all escrow and
title services in connection with this Agreement.
3.2. Opening of Escrow; Effective Date. Within three (3) business days of the
date that Seller has obtained approval of this executed Agreement by the City Council, approval
of the sale price by the Oversight Board, and approval of the executed DA and the executed
AHA by the City Council, Seller shall open an escrow account with Escrow Holder by depositing
this executed Agreement, the executed DA and the executed AHA into Escrow. The date the
executed Agreement, DA and AHA are received by Escrow Holder, as established and confirmed
by Escrow Holder, shall be deemed the “Effective Date.” By such deposit Escrow Holder is
authorized and instructed to act in accordance with the provisions of this Agreement, which
Agreement shall constitute Escrow Holder’s escrow instructions.
3.3. Buyer’s Deposit; Application of Prior ENRA Deposit. Within three (3)
business days of the Effective Date, Seller will deposit the one half of the remaining, unused,
portion of the ENRA Deposit into Escrow, and Buyer will deposit the di fference between the
amount deposited by Seller and $100,000.00, so that the total deposit held in Escrow for the
Grand Property as Buyer’s deposit is One Hundred Thousand Dollars ($100,000.00) (the
“Deposit”). Note that the other one half of the remaining, unused, portion of the ENRA Deposit
will be deposited into the Linden Property Escrow. The Deposit is non-refundable, except in the
event of a Seller breach, and is applicable toward the Purchase Price.
4
3.4. Seller’s Administration Fee. Within three (3) business days of the
Effective Date, Buyer shall deposit funds in the amount of Fifteen Thousand Dollars
($15,000.00) with Escrow Holder (the “Administration Fee”). Escrow Holder shall
immediately release the Administration Fee to Seller, and throughout the term of this Agreement,
Seller may draw upon the Administration Fee to compensate it for the cost of reasonably
necessary third-party assistance, legal fees and staff time incurred by Seller in administering the
sale of the Property. Seller will notify Buyer of the identify, qualifications, scope of work and
budget for any third party consultants that will be paid for from the Administration Fee, prior to
authorizing work under any such third party contract, and will provide Buyer a written account
of the Administration Fee, including copies of any third party invoices under approved scopes
of work (excluding any information subject to attorney client privilege) upon Buyer’s request.
All costs and fees shall be charged at City’s actual cost and all staff time shall be charged at
City’s standard rate. Seller shall deposit the Administration Fee in a separate interest bearing
account of Seller and any interest, when received by Seller, will become part of the
Administration Fee. City shall account for all deposits, interest earnings and withdraws from
the Administration Fee consistent with all reporting requirements of the State of California
Department of Finance. The unused portion of the Administration Fee, if any, shall be credited
against the Purchase Price at Closing, or returned to Buyer if this Agreement is terminated, for
any reason, prior to Closing.
4. APPROVAL OF CONDITION OF TITLE; PROPERTY DISCLOSURE
REQUIREMENTS.
4.1. Condition of Title/Preliminary Title Report. At the Closing, Seller shall
convey title to the Property to Buyer by grant deed in Escrow Holder’s standard form (the “Grant
Deed”). As a condition to Buyer’s obligation to close escrow hereunder, title to the Property to be
conveyed to Buyer shall be subject only to the Permitted Exceptions (as defined below).
Promptly following the execution of this Agreement, Seller shall deliver or cause the
Escrow Holder to deliver to Buyer a preliminary title report issued by Escrow Holder and dated
within ten (10) days of the mutual execution of this Agreement (the “Preliminary Title Report”)
showing the state of title to the Property, together with copies of all matters shown as exceptions
therein. Buyer may also obtain a survey or updated survey of the Property (the “Survey”), at
Buyer's sole cost and expense. Buyer shall have the right within the first twenty (20) days
following the Effective Date (the “Title Review Period”), to give Seller written notice (“Buyer’s
Title Notice”) of Buyer’s disapproval of any title exceptions or matters set forth in the Title Report
or Survey, or any other matters affecting Title to the Property (collectively, the “Title
Objections”). If Buyer timely gives the Buyer’s Title Notice, Seller shall elect, within fifteen (15)
days following receipt of Buyer’s Title Notice, by written notice given to Buyer, whether to
remove or delete from the title to be conveyed to Buyer prior to the Closing any or all of the Title
Objections. If Buyer fails to timely give the Buyer’s Title Notice, or if Seller fai ls to make such
election within the aforementioned fifteen (15) day period, then Seller shall be deemed to have
elected not to remove any Title Objections. Upon receipt of Seller’s written notice (or deemed
election not to remove the Title Objections), Bu yer may elect, within the Title Review Period, to
either (i) terminate this Agreement, in which event all rights and obligations hereunder (except for
those that expressly survive the termination of this Agreement) shall cease and the Deposit shall
be promptly returned to Buyer, or (ii) waive any title or survey objections it may have, without a
5
reduction of the Purchase Price. If Buyer fails to make an election referred to in the immediately
preceding sentence, by written notice to Seller within the Title Review Period, then Buyer shall be
deemed to have elected the option to terminate this Agreement as set forth in clause (i) above.
As used herein, “Permitted Exceptions” shall mean: (i) non-delinquent liens for
real estate taxes and assessments; (ii) any other liens, easements, encumbrances, covenants,
conditions and restrictions of record described in the Preliminary Title Report, except those that
Seller has expressly agreed to remove pursuant to Paragraph 5(b) above; provided, however, that
the lien of any deed of trust shall not be a Permitted Exception in any event; (iii) the DA; (iv) the
AHA; and (v) local, state and federal laws, ordinances or governmental regulations including, but
not limited to, building and zoning laws, ordinances and regulations, now or hereafter in effect
relating to the Property. Seller will provide Buyer with standard owner affidavits regarding
tenants, work on site, etc. if applicable as may reasonably be required by the Title to permit Title
Company’s issuance of an ALTA title insurance policy.
Delivery of title in accordance with the foregoing shall be evidenced by the
willingness of the Escrow Holder to issue, at Closing, at Buyer’s cost, an ALTA Owner’s Policy
of Title Insurance in the amount of the Purchase Price showing fee simple title to the Property
vested in Buyer (or its assignee), subject only to the Permitted Exceptions and the standard
exclusions to coverage shown on such Policy of Title Insurance (the “Title Policy”).
4.2 Environmental and Natural Hazards Disclosure. California Health &
Safety Code section 25359.7 requires owners of non-residential real property who know, or have
reasonable cause to believe, that any release of hazardous substances are located on or beneath
the real property to provide written notice of same to the buyer of real property. Other applicable
laws require Seller to provide certain disclosures regarding natural hazards affecting the
Property. During the period of time between the execution of the ENRA and the execution of
this Agreement, Seller shall make all necessary disclosures required by law
5. BUYER’S SCHEDULE OF PERFORMANCE
5.1. Buyer’s Schedule of Performance. Subject to Force Majeure Delays (as
defined in Section 8.4), Buyer shall complete the following milestones in furtherance of the
Closing, in accordance with the following schedule:
Deadline Milestone
(a) Within two (2)
months after
Effective Date
Buyer shall have completed 50% of the Construction Drawings and
submitted the Financial ProForma to Seller
(b)
Within four (4)
months after
Effective Date
Buyer shall have completed all Final Plans and submitted 100%
construction drawings to the City for building permits, and submitted an
Updated Proforma to Seller
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Deadline Milestone
(c)
Within five (5)
months after
Effective Date
Buyer shall have secured Construction Financing and executed a contract
with a general contractor for construction of the Project in accordance with
the final plans
(d)
Within six (6)
months after
Effective Date
Buyer and Seller shall have satisfied (or waived in writing) all
contingencies to Closing set forth in this Agreement, and be prepared to
Close Escrow
6. CLOSING AND PAYMENT OF PURCHASE PRICE
6.1. Closing. The close of escrow (the “Closing” or “Close of Escrow”) shall
be deemed to occur on the date the Grant Deed is recorded and Buyer’s funds are released to
Seller and the City Grants are released to Buyer, which shall occur within ten (10) days of the
date that all of Buyer’s contingencies to Closing set forth in Section 6.2 and Seller’s
contingencies to Closing set forth in Section 6.3 have been satisfied, or waived in writing, or
such other date that the Parties agree in writing, each in their sole discretion.
6.2. Buyer’s Conditions to Closing. Buyer's obligation to purchase the
Property is subject to the satisfaction of all of the following conditions or Buyer's written waiver
thereof (in Buyer’s sole discretion) on or before the Closing Date:
(a) Buyer has approved the condition of the Property and Waived any
further Due Diligence Contingency. Buyer has used the period of time between the execution of
the ENRA and the date of the execution of this Agreement as its “Due Diligence Contingency
Period” to complete physical inspections of the Property and due diligence related to the purchase
of the Property. Pursuant to paragraph 9 of the ENRA, Seller has made available to Buyer for
review or copying at Buyer’s expense all non-privileged studies, surveys, plans, specifications,
reports, and other documents with respect to the Property that Seller has in its possession or control,
which have not already been provided. Buyer understands that notwithstanding the delivery by
City to Buyer of any materials, including, without limitation, third party reports, Buyer has relied
entirely on Buyer’s own experts and consultants and its own independent investigation in
proceeding with the acquisition of the Property. Studies or documents prepared by Seller and its
agents solely for the purpose of negotiating the terms of the Purchase Agreement were not required
to be provided by Seller to Buyer. Buyer acknowledges that it has completed its due diligence
with respect to the physical condition of the Property and is satisfied with respect to such and will
provide Seller further written evidence of its acceptance of the condition of the property and its
wavier of any due diligence contingency prior to Closing.
(b) Seller have performed all obligations to be performed by Seller
pursuant to this Agreement.
(c) Seller’s representations and warranties herein are true and correct in
all material respects as of the Closing Date.
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(d) Buyer has approved the Title Report, and Title Company is
irrevocably committed to issue a ALTA Extended Title Policy to Buyer upon recordation of the
Grant Deed and effective as of the Closing Date, insuring title to Buyer in the full amount of the
Purchase Price, subject only to the Permitted Exceptions.
(e) Seller has deposited the City Grants into Escrow with instructions
to release the City Grants to Buyer, only upon the Closing.
(f) The Property is free of all occupants, licensees, tenants, and is
prepared to be delivered “vacant” to Buyer at Closing.
(g) Buyer has secured binding commitments, subject only to
commercially reasonable conditions, for all funding necessary for the successful and feasible
purchase of the Property and completion of the Project.
(h) Thirty (30) days prior to Closing, Buyer’s construction loan, if any,
for the Project shall have closed, or shall be ready to close concurrently with the Closing.
(i) Five (5) days before closing, Buyer shall have obtained approval of
Buyer’s Final Proforma from City, and shall have deposited the approved Final Proforma into
Escrow.
(j) Buyer has completed all Final Plans and construction drawings and
has obtained all building and other permits from the City and other issuing agencies required to
construct the Project pursuant to all Final Plans and as required and necessary for the Buyer to
satisfy the obligations set forth in the DA and AHA.
(k) Buyer shall have executed a construction contract with a qualified
and reputable general contractor for the Project, which construction contract shall be enforceable,
contain a “prevailing wage” requirement, and require contractor to commence construction
promptly upon issuance of the final building permit, and shall have deposited a copy thereof into
Escrow five (5) days before Closing.
(l) Buyer or Buyer’s General Contractor shall obtain, or cause to be
obtained, and deliver to Seller the following bonds: (a) a labor and materials/payment bond or
bonds for the general contract, which shall be equal to one hundred percent (100%) of all costs of
construction to be incurred pursuant to the general contract, and (b) a performance bond or bonds
for the general contractor in an amount equal to one hundred percent (100%) of all costs to be
incurred pursuant to the general contract (collectively, the "Bonds"). The Bonds shall be in
commercially reasonable form and substance, and name Seller as obligee.
(m) Buyer’s General Contractor shall have submitted to City’s Building
Department for City’s approval, detailed final construction plans for construction of the Project on
the Property (the “Construction Plans”). As used herein “Construction Plans” means the final
construction documents that are in conformance with the Bridging Construction Documents
(“BCDs”) and Owner’s Minimum Requirements (“OMRs”) and upon which Buyer and Buyer’s
contractors shall rely in constructing the Project (including the landscaping, parking, and common
areas) and shall include, without limitation, the site development plan, final architectural drawings,
8
landscaping, exterior lighting and signage plans and specifications, materials specifications, final
elevations, and building plans and specifications. The Construction Plans shall be based upon the
scope of development set forth in the BCDs and upon the Project Approvals, and shall not
materially deviate therefrom without the express written consent of Seller. Provided the
Construction Plans are consistent with the BCDs, approval of the Construction Plans by City shall
be deemed approval thereof by Seller.
(n) Buyer is prepared to deliver a guaranty of completion of the Project
in accordance with the terms of this Agreement, substantially in the form of Exhibit D
("Completion Guaranty") attached hereto.
6.3. Seller’s Conditions to Closing. The Close of Escrow and Seller’s
obligation to sell and convey the Property to Buyer are subject to the satisfaction of the following
conditions or Seller’s written waiver (in Seller’s sole discretion) of such conditions on or before
the Closing Date or any sooner date stated below:
(a) Buyer has performed all obligations to be performed by Buyer
pursuant to this Agreement before Closing Date.
(b) Buyer's representations and warranties set forth herein are true and
correct in all material respects as of the Closing Date.
(c) Buyer’s Financing Commitments. Forty-five (45) days prior to
Closing, Buyer has provided Seller written confirmation, acceptable to Seller, which approval shall
not be unreasonably withheld, that Buyer has obtained financing commitments for the acquisition
and construction financing for the acquisition and development of the Property:
(d) Construction Loan. Thirty (30) days prior to Closing, Buyer’s
construction loan, if any, for the Project shall have closed, or shall be ready to close concurrently
with the Closing.
(e) Proforma. Thirty (30) days before closing, Buyer shall have
obtained approval of Buyer’s Final Proforma from City, and shall have deposited the approved
Final Proforma into Escrow.
(f) Buyer shall have completed all Final Plans and construction
drawings and has obtained all building and other permits from the City and other issuing agencies
required to construct the Project pursuant to all Final Plans and as required and necessary for the
Buyer to satisfy the obligations set forth in the DA and AHA.
(g) Buyer shall have executed a construction contract with a qualified
and reputable general contractor for the Project, which construction contract shall be enforceable,
contain a “prevailing wage” requirement, and require contractor to commence construction
promptly upon issuance of the final building permit, and shall have deposited a copy thereof into
Escrow five (5) days before Closing.
(h) Buyer or Buyer’s General Contractor shall have obtained and
delivered to Seller the following bonds: (a) a labor and materials/payment bond or bonds for the
9
general contract, which shall be equal to one hundred percent (100%) of all costs of construction
to be incurred pursuant to the general contract, and (b) a performance bond or bonds for the general
contractor in an amount equal to one hundred percent (100%) of all costs to be incurred pursuant
to the general contract (collectively, the "Bonds"). The Bonds shall be in commercially reasonable
form and substance and shall name Seller as obligee.
(i) Construction Plans. Buyer’s General Contractor shall have
submitted to City’s Building Department for City’s approval, detailed final construction plans for
construction of the Project on the Property (the “Construction Plans”). As used herein
“Construction Plans” means the final construction documents that are in conformance with the
Bridging Construction Documents (“BCDs”) and Owner’s Minimum Requirements (“OMRs”)
and upon which Buyer and Buyer’s contractors shall rely in constructing the Project (including the
landscaping, parking, and common areas) and shall include, without limitation, the site
development plan, final architectural drawings, landscaping, exterior lighting and signage plans
and specifications, materials specifications, final elevations, and building plans and specifications.
The Construction Plans shall be based upon the scope of development set forth in the BCDs and
upon the Project Approvals, and shall not materially deviate therefrom without the express written
consent of Seller. Provided that the Construction Plans are consistent with the BCDs, approval of
the Construction Plans by City shall be deemed approval thereof by Seller.
(j) Buyer’s Completion Guaranty. Buyer has delivered its Completion
Guaranty to Escrow Holder.
6.4. Closing Deliveries.
6.4.1 Delivery of Documents and Closing Funds. At or prior to Closing,
Seller and Buyer shall each deposit such other instruments as are reasonably required by the Title
Company or otherwise required to close the escrow and consummate the conveyance of the
Property in accordance with the terms hereof, including but not limited to the following:
6.4.1.1 Deliveries by Seller. At or before Closing, Seller shall
deposit the following into escrow: (i) one (1) original executed and acknowledged Grant Deed;
(ii) one (1) duly executed non-foreign certification for the Property in accordance with the
requirements of Section 1445 of the Internal Revenue Code of 1986, as amended; (iii) one (1) duly
executed California Form 593-W Certificate for the Property or comparable non-foreign person
affidavit to satisfy the requirements of California Revenue and Taxation Code Section 18805(b)
and 26131; (iv) title to all Bridging Documents; and (v) funds in the total amount of One Million
Seven Hundred Fifty Thousand Dollars ($1,750,000.00) for the City Grants.
6.4.1.2 Condition to disbursement of City Grants. City’s obligation
to provide Seller with City Grants in the total amount of One Million Seven Hundred Fifty
Thousand Dollars ($1,750,000.00) at the Closing Date is conditioned upon Close of Escrow. If the
Closing does not occur, for any reason whatsoever, the City has no obligation to deliver the City
Grants to Buyer.
6.4.1.3 Deliveries by Buyer. No less than five (5) business days
prior to the close of escrow, Buyer shall deposit into escrow: (i) immediately available funds
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which together with the Deposit plus interest thereon, if any, is equal to: a) the Purchase Price as
adjusted by any prorations between the Parties; (b) all escrow fees (including the costs of preparing
documents and instruments) and recording fees and all transfer taxes; (c) the cost of the Title
Policy and title report costs (d) any other costs that are the responsibility of Buyer under this
Agreement; (ii) a fully executed Completion Guarantee executed by Buyer; and, (iii) one (1)
original executed Preliminary Change of Ownership Report for the Property.
6.4.2. Escrow Instructions. This Agreement constitutes the joint escrow
instructions (JEI) of Seller and Buyer with respect to the conveyance of the Property to Buyer, and
the Escrow Agent to whom these instructions are delivered is hereby empowered to act under this
Agreement. The parties shall use reasonable good faith efforts to close the escrow for the
conveyance of the Property in the shortest possible time. All funds received in the escrow shall be
deposited in interest-bearing accounts for the benefit of the depositing Party in any state or national
bank doing business in the State of California. All disbursements shall be made by check or wire
transfer from such accounts. If, in the opinion of either Party, it is necessary or convenient in order
to accomplish the Closing, such Party may provide supplemental escrow instructions; provided
that if there is any inconsistency between this Agreement and the supplemental escrow
instructions, then the provisions of this Agreement shall control. The Closing shall take place as
set forth in Section 6.4.3 below. Escrow Agent is instructed to release Seller’s and Buyer’s escrow
closing statements to the respective parties.
6.4.3 Authority of Escrow Agent. Escrow Agent is authorized to, and shall:
(a) Pay and charge Buyer for the premium of the Title Policy, including any
endorsements requested by Buyer.
(b) Pay and charge Buyer for escrow fees, charges, and costs as provided in
Section 6.4.1.2.
(c) Disburse to Seller the Purchase Price, less Seller’s share of any escrow
fees, costs and expenses, and record the Grant Deed when both the Buyer Conditions Precedent
and Seller Conditions Precedent have been fulfilled or waived in writing by Buyer and Seller, as
applicable. Immediately following recordation of the Grant Deed, Escrow Agent shall record the
DA and AHA.
(d) Disburse to Buyer the City Grants.
(e) Do such other actions as necessary, including obtaining and issuing the
Title Policy, to fulfill its obligations under this Agreement.
(f) Direct Seller and Buyer to execute and deliver any instrument, affidavit,
and statement, and to perform any act, reasonably necessary to comply with the provisions of
FIRPTA, if applicable, and any similar state act and regulations promulgated thereunder.
(g) Prepare and file with all appropriate governmental or taxing authorities
uniform settlement statements, closing statements, tax withholding forms including IRS 1099 -S
forms, and be responsible for withholding taxes, if any such forms are provided for or required by
law.
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(h) Deliver to Buyer the certificate of title to those Bridging Documents for
which Buyer has previously requested transfer of ownership from Seller to Buyer, the Non-Foreign
Affidavit, the California Certificate and the original recorded grant deed;
6.4.4 Pro-Rations. At the close of escrow, the Escrow Agent shall make
the following prorations: (i) property taxes will be prorated as of the close of escrow based upon
the most recent tax bill available, including any property taxes which may be assessed after the
close of escrow but which pertain to the period prior to the transfer of title to the Property to Buyer,
regardless of when or to whom notice thereof is delivered; and (ii) any Seller reimbursement for
the unapplied portion of the Administrative Fee.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
7.1. Seller’s Representations, Warranties. In addition to the representations,
warranties and covenants of Seller contained in the other sections of this Agreement, Seller
hereby represents, warrants and covenants to Buyer that the statements below in this Section 7.1
are each true and correct as of the Closing Date provided however, if to Seller’s actual knowledge
any such statement becomes untrue prior to Closing, Seller will notify Buyer in writing and
Buyer will have three (3) business days thereafter to determine if Buyer wishes to proceed with
Closing. If Buyer determines it does not wish to proceed, then the terms of Section 8 will apply.
As used herein, the term “to Seller’s best knowledge” shall mean the knowledge of
:_______________, with duty of inquiry.
(a) Authority. Seller is a public agency, lawfully formed, in existence
and in good standing under the laws of the State of California. Seller has the full right, capacity,
power, authority, and all necessary approvals to enter into and carry out the terms of this
Agreement. This Agreement has been duly executed by Seller, and upon delivery to and execution
by Buyer is a valid and binding agreement of Seller.
(b) Encumbrances. Other than the approval and recordation of the DA
and AHA at Closing, Seller has not alienated, encumbered, transferred, mortgaged, assigned,
pledged, or otherwise conveyed its interest in the Property or any portion thereof, nor entered into
any Agreement to do so, and there are no liens, encumbrances, mortgages, covenants, conditions,
reservations, restrictions, easements or other matters affecting the Property, except for the
Permitted Exceptions. Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage,
assign, pledge, or otherwise convey its interest prior to the Close of Escrow, as long as this
Agreement is in force.
(c) There are no agreements affecting the Property except those which
have been disclosed by Seller. There are no agreements which will be binding on the Buyer or the
Property after the Close of Escrow.
(d) Condemnation. To Seller’s best knowledge, there are not presently
pending any eminent domain or condemnation actions against the Property or any part thereof;
and Seller has not received written notice of any eminent domain or condemnation actions being
contemplated that would affect the Property or any part thereof.
12
(e) Claims. To Seller’s best knowledge, Seller has not received written
notice of any claims or of any legal actions or proceedings in any court pending against the
Property or against Seller that may affect the Property or Seller’s ability to consummate the
transaction contemplated in this Agreement. To Seller’s best knowledge, Seller has not received
any written notice that the condition of the Property is in violation of any laws or regulations or
the requirements of any insurance underwriters or policies.
(f) Lease; Occupancy Rights; Superior Rights. There are no leases,
occupancy rights, rights of first refusal or rights of first offer that affect the Property. Seller will
deliver the property vacant and free of any lease agreements or occupancy rights prior to or at close
of escrow.
(g) No Conflict. The execution and delivery of this Agreement, and the
sale and conveyance of the Property contemplated hereby, do not and will not (a) violate the terms
of any order, writ or decree of any court or judicial or regulatory authority or body binding upon
Seller, (b) conflict with or result in a breach of any condition or provision or constitute a default
under or pursuant to the terms of any contract, mortgage, lien, lease, agreement, debenture or
instrument to which Seller is a party, or which is or purports to be binding upon Seller or upon the
Property, or (c) to Seller’s best knowledge, violate any rule, regulation, statute or law applicable
to Seller.
(h) Historical Designation of the Property. To Seller’s best knowledge,
Seller has not received written notice of any pending applications for or current designations of
the Property as a historic building or landmark.
(i) Property Documents. All Bridging Documents provided by Seller
to Buyer are true, correct and complete copies of all documents and information relating to the
Property in Seller’s possession and control. To the extent that Seller’s Bridging Documents were
prepared by third parties or for third parties, including a previous potential buyer of the Property,
Seller represents to Buyer that Seller has the right to provide such materials to Buyer and is not
prohibited by contract or otherwise from disclosing such materials to Buyer, but Seller does not
make any representation about Buyer’s ability or inability to use or rely on any such materials, or
the accuracy or completeness thereof. Seller shall not be liable to Buyer or any other party for any
detrimental reliance on such third-party materials.
(j) Environmental Laws. To Seller’s best knowledge, the Property is
not in violation of any federal, state, local or administrative agency ordinance, law, rule, regulation,
order or requirement relating to environmental conditions or Hazardous Material (“Environmental
Laws”). To Seller’s best knowledge, Seller has not used, manufactured, generated, treated, stored,
disposed of, or released any Hazardous Materials on, under or about the Property or transported
any Hazardous Materials over the Property except in compliance with Environmental Laws. For
the purposes hereof, “Hazardous Material” shall mean any substance, chemical, waste or other
material which is listed, defined or otherwise identified as “hazardous” or “toxic” under any
federal, state, local or administrative agency ordinance or law, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et
seq. and the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., or any
regulation, order, rule or requirement adopted thereunder, as well as any formaldehyde, urea,
13
polychlorinated biphenyls, petroleum, petroleum product or by-product, crude oil, natural gas,
natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel or mixture thereof, radon,
asbestos, and “source,” “special nuclear” and “by-product” material as defined in the Atomic
Energy Act of 1985,42 U.S.C. §§ 3011 et seq.
7.2. Seller’s Covenants. From the Effective Date, through the Closing, Seller
covenants as follows:
(a) Seller shall terminate all maintenance or service contracts and
utilities relating to and servicing the Property, as of the Closing Date.
(b) Seller shall remove all fixtures, furnishings and equipment and
personal property (“FF&E”) that is not adhered to or an integral improvement to the Property as
of the Closing Date, so that the Property is delivered in a vacant, broom-clean condition with all
trash and personal effects removed.
(c) Seller shall maintain and operate the Property in its present state of
repair and in substantially the same condition as on the Effective Date.
(d) Seller shall pay all liens, encumbrances, taxes, penalties, interest and
assessments on the Property, and perform all covenants thereunder, before they become delinquent
or a default would occur thereunder.
(e) Seller shall maintain in effect all insurance policies relative to the
Property in full force and effect.
(f) Seller shall promptly notify Buyer if any of the representations and
warranties set forth in this Agreement become untrue prior to the Closing Date.
The truth and accuracy of each of the representations and warranties, and the
performance of all covenants of Seller contained in this Agreement are conditions precedent to
Buyer’s obligation to proceed with the Closing hereunder. The foregoing representations and
warranties shall survive the expiration, termination, or close of escrow of this Agreement and shall
not be deemed merged into the deed upon closing.
7.3. Buyer’s Representations and Warranties. In addition to the
representations, warranties and covenants of Buyer contained in the other sections of this
Agreement, Buyer hereby represents, warrants and covenants to Seller that the statements below
in this Section 7.3 are each true as of the Effective Date, and, if to Buyer’s actual knowledge any
such statement becomes untrue prior to Closing, Buyer shall so notify Seller in writing and Seller
shall have at least three (3) business days thereafter to determine if Seller wishes to proceed with
Closing.
(a) Buyer has the full right, capacity, power and authority to enter into
and carry out the terms of this Agreement. This Agreement has been duly executed by Buyer, and
upon delivery to and execution by Seller shall be a valid and binding agreement of Buyer.
14
(b) Buyer is not bankrupt or insolvent under any applicable federal or
state standard, has not filed for protection or relief under any applicable bankruptcy or creditor
protection statute, and has not been threatened by creditors with an involuntary application of any
applicable bankruptcy or creditor protection statute.
(c) Buyer accepts and acknowledges that after the Closing, the Property
will be subject to the DA and AHA, which will be recorded against the Property at Closing.
The truth and accuracy of each of the representations and warranties, and the
performance of all covenants of Buyer contained in this Agreement are conditions precedent to
Seller’s obligation to proceed with the Closing hereunder.
7.4. Property Sold, “AS IS”. Buyer specifically acknowledges that the Seller
is selling the Property on an “AS IS”, “WHERE IS” and “WITH ALL FAULTS” basis and that,
subject to Seller's representations, warranties, covenants and obligations set forth in this
Agreement, and all exhibits attached hereto and incorporated herein, and any obligations arising
under applicable law, Buyer is not relying on any representations or warranties of an y kind
whatsoever, express or implied, from Seller, or its employees, appointed or elected officials,
agents, or brokers as to any matters concerning the Property. The Seller makes no
representations or warranties as to any matters concerning the Property, including without
limitation: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the
quality, nature, adequacy, and physical condition of soils, geology and any groundwater, (iii) the
existence, quality, nature, adequacy and physical condition of utilities serving the Property, (iv)
the development potential of the Property, and the Property's use, habitability, merchantability,
or fitness, suitability, value or adequacy of the property for any particular purpose, (v) except as
otherwise provided in this Agreement, the zoning or other legal status of the Property or any
other public or private restrictions on use of the Property, (vi) the compliance of the Property or
its operation with any Environmental Laws, covenants, conditions and restrictions of any
governmental or quasi-governmental entity or of any other person or entity, (vii) the presence or
removal of Hazardous Materials, substances or wastes on, under or about the Property or the
adjoining or neighboring property; (viii) the quality of any labor and materials used in any
improvements on the Property, (ix) the condition of title to the Property, (x) the leases, service
contracts, or other agreements affecting the Property, or (xi) the economics of the operation of
the Property.
8. DEFAULT, REMEDIES, TERMINATION.
8.1. Default Remedies – General. Failure by either Party to perform any
action or covenant required by this Agreement within sixty (60) days following receipt of written
Notice from the other Party specifying the failure shall constitute a “Default” under this
Agreement; provided, however, that if the failure to perform cannot be reasonably cured within
such sixty (60) day period, a Party shall be allowed additional time as is reasonably necessary to
cure the failure so long as such Party commences to cure the failure within the sixty (60) day
period and thereafter diligently prosecutes the cure to completion.
8.2. Default.
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8.2.1 Remedies.
8.2.1.1 Default by Buyer; Seller’s Remedies. Upon the occurrence
of an uncured Default by Buyer, Seller’s remedies shall be limited to (i) liquidated damages
pursuant to Section 8.2.2 and (ii) termination of this Agreement pursuant to Section 8.3.
8.2.1.2 Default by Seller; Buyer’s Remedies. Upon the occurrence
of a Default by Seller under this Agreement, Buyer’s remedies shall be limited to obtaining specific
performance or injunctive relief, or terminating this Agreement, and in either event, return of the
Deposit and any unused portion of the Administrative Fee.
8.2.2 Liquidated Damages. SUBJECT TO NOTICE AND EXPIRATION
OF APPLICABLE CURE PERIODS AND ANY PERMITTED EXTENSIONS OF TIME AS
PROVIDED IN THIS AGREEMENT, IF IN THE EVENT OF A BUYER DEFAULT AS SET
FORTH IN 8.2.1.1, SELLER WILL SUFFER DAMAGES AND THAT IT IS IMPRACTICABLE
AND INFEASIBLE TO FIX THE ACTUAL AMOUNT OF SUCH DAMAGES. THEREFORE,
CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF TH IS
AGREEMENT, IN THE EVENT OF AN UNCURED DEFAULT, BUYER, WITHIN THIRTY
(30) DAYS FOLLOWING SELLER’S WRITTEN DEMAND THEREFOR, SHALL TURN
OVER ALL REPORTS AND PLANS IN THE BUYER’S ACTUAL OR CONSTRUCTIVE
POSSESSION THAT HAVE BEEN PREPARED BY AND FOR BUYER RELATED TO THE
PROJECT AND THE PROPERTY (WITH THE EXCEPTION OF BUYER’S INTELLECTUAL
PROPERTY, CONFIDENTIAL FINANCIAL INFORMATION, AND ANY INFORMATION
SUBJECT TO LEGAL PRIVILEGE) (THE “MATERIALS”). THE BUYER’S DEPOSIT AND
MATERIALS SHALL SERVE AS LIQUIDATED DAMAGES TO THE SELLER FOR A
DEFAULT SPECIFIED IN SECTION 8.2.1.1. THE VALUE OF THE BUYER’S DEPOSIT AND
MATERIALS CONSTITUTES A REASONABLE ESTIMATE OF THE DAMAGES THAT
THE SELLER WOULD INCUR IN THE EVENT OF A DEFAULT. RETENTION OF THE
BUYER’S DEPOSIT, AND MATERIALS SHALL BE THE SELLER’S SOLE AND
EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT OF A DEFAULT A DEFAULT
SPECIFIED IN SECTION 8.2.1.1, AND THE SELLER WAIVES ANY AND ALL RIGHT TO
SEEK OTHER RIGHTS OR REMEDIES AGAINST BUYER, INCLUDING WITHOUT
LIMITATION, SPECIFIC PERFORMANCE. THE LIQUIDATED DAMAGES PROVIDED
FOR HEREIN IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE
MEANING OF SECTIONS 3275 OR 3369 OF THE CALIFORNIA CIVIL CODE, BUT IS
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO THE SELLER PURSUANT TO
SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE. SELLER WAIVES
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. BY PLACING ITS
INITIALS BELOW, BUYER AND SELLER SPECIFICALLY CONFIRMS THE ACCURACY
OF THE STATEMENTS MADE ABOVE, THE REASONABLENESS OF THE AMOUNT OF
LIQUIDATED DAMAGES AGREED UPON, AND THE FACT THAT EACH PARTY WAS
REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT
WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
INITIALS: _________ ______________
SELLER BUYER
16
8.3. Termination. This Agreement may be terminated by the Party for whom
a condition is intended to benefit: (i) if there is an uncured Default, after notice from the Party
not in default and expiration of all cure periods, (ii) if there is a failure of an express Buyer
Contingency to Closing (Section 6.2) or Seller Contingency to closing (6.3) (which is not waived
by the Party whom the condition benefits) by timely notice from the Party whom the condition
benefits, (iii) a representation or warranty of a Party becomes untrue prior to Closing under
Section 7.1 or 7.3 (which is not waived by the Party whom the condition benefits), or Seller
cannot satisfy a covenant to Closing set forth in Section 7.3 , (iv) upon mutual written consent
of the Parties, each in its sole discretion. Upon termination, the Parties will also cooperate to
record a notice of termination or quitclaim deed.
8.4 Force Majeure Delay. All obligations in this Agreement shall not be deemed
to be in default, all performance and other dates specified in those sections shall be extended,
where delays are due to: war; insurrection; strikes and labor disputes; lockouts; riots; floods;
earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; litigation and arbitration, including court delays; legal challenges
to this Agreement, legal challenges to the Project Approvals, or legal challenges to any other
approval required from any public agency other than the Seller for the Project, or any initiatives
or referenda regarding the same; environmental conditions, pre-existing or discovered, delaying
the construction or development of the Property or any portion thereof; unusually severe weather
but only to the extent that such weather or its effects (including, without limitation, dry out time)
result in delays that cumulatively exceed thirty (30) days for every winter season occurring after
commencement of construction of the Project; acts or omissions of the other Party; or acts or
failures to act of any public or governmental agency or entity (except that acts or failures to act of
Seller shall not excuse performance by Seller); moratorium; or a Severe Economic Recession (each
a “Force Majeure Delay”). An extension of time for any such cause shall be for the period of the
enforced delay and shall commence to run from the time of the commencement of the cause, if
notice by the Party claiming such extension is sent to the other Party within sixty (60) days of the
commencement of the cause. If notice is sent after such sixty (60) day period, then the extension
shall commence to run no sooner than sixty (60) days prior to the giving of such notice. Buyer’s
inability or failure to obtain financing or otherwise timely satisfy shall not be deemed to be a cause
outside the reasonable control of the Buyer and shall not be the basis for an excused delay unless
such inability, failure or delay is a direct result of a Severe Economic Recession. “Severe
Economic Recession” means a decline in the monetary value of all finished goods and services
produced in the United States, as measured by initial quarterly estimates of United States Gross
Domestic Product (“GDP”) published by the United States Department of Commerce Bureau of
Economic Analysis (and not subsequent monthly revisions), lasting more than four (4) consecutive
calendar quarters. Any quarter of flat or positive GDP growth shall end the period of such Severe
Economic Recession.
9. BROKERS. Seller represents that no real estate broker has been retained by Seller
in the sale of the Property or the negotiation of this Agreement. Buyer represents that no real estate
broker has been retained by Buyer in the procurement of the Property or negotiation of this
Agreement. Neither Seller nor Buyer shall pay or be liable for any commissions or brokerage fees
for the sale of the Property. Buyer and Seller shall indemnify, hold harmless and defend each other
from any and all claims, actions and liability for any breach of the preceding sentence, and any
commission, finder’s fee, or similar charges arising out of Buyer’s or Seller’s conduct.
17
10. ASSIGNMENT. Buyer may not assign its rights or delegate its duties under this
Agreement without Seller’s prior written consent, which may be withheld in Seller’s sole
discretion, except for an assignment to a “Buyer Permitted Transferee”, set forth in subsections
(a)-(c) below, which shall not require Seller’s consent under this Section 10 (each a “Buyer
Permitted Transferee”):
(a) Any transfer for financing purposes to secure the funds necessary for construction
and/or permanent financing of the Project;
(b) An assignment of this Agreement to an Affiliate of Buyer;
(c) A special purpose entity created by Buyer for the development of the Grand
Property to serve as the ownership entity for the Project.
For the purposes of this Section 10, “Affiliate of Buyer” means an entity or person that is directly
or indirectly controlling, controlled by, or under common control with Buyer. For the purposes of
this definition, “control” means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of an entity or a person, whether through the
ownership of voting securities, by contract, or otherwise, and the terms “controlling” and
“controlled” have the meanings correlative to the foregoing. Upon execution of an assignment and
assumption agreement between Buyer, as assignor, and a Buyer Permitted Transferee, ROEM
Development Corporation shall be released from all obligations under this Agreement, and
thereafter, for purposes of this Agreement and where the context warrants, a reference to the Buyer
shall be to the applicable Permitted Transferee.
18
11. ENVIRONMENTAL INDEMNITY. Effective upon Close of Escrow, to
the fullest extent allowed by law, Buyer agrees to unconditionally and fully indemnify, protect,
defend (with counsel satisfactory to Seller), and hold Seller, and their respective elected and
appointed officers, officials, employees, agents, consultants and contractors harmless from and
against any and all claims (including without limitation third party claims for personal injury, real
or personal property damage, or damages to natural resources), actions, administrative proceedings
(including without limitation both formal and informal proceedings), judgments, damages,
punitive damages, penalties, fines, costs (including without limitation any and all costs relating to
investigation, assessment, analysis or clean-up of the Property), liabilities (including without
limitation sums paid in settlements of claims), interest, or losses, including reasonable attorneys’
and paralegals’ fees and expenses (including without limitation any such fees and expenses
incurred in enforcing this Agreement or collecting any sums due hereunder), together with all other
costs and expenses of any kind or nature (collectively, the “Costs”) that arise directly or indirectly
from or in connection with the presence, suspected presence, release, or suspected release, of any
Hazardous Materials in, on or under the Property or in or into the air, soil, soil gas, groundwater,
or surface water at, on, about, around, above, under or within the Property, or any portion thereof,
except those Costs that arise solely as a result of actions by Seller or actions by the Seller. The
indemnification provided pursuant to this Section shall specifically apply to and include claims or
actions brought by or on behalf of employees of Buyer or any of its predecessors in interest and
Buyer hereby expressly waives any immunity to which Buyer may otherwise be entitled under any
industrial or worker’s compensation laws. In the event the Seller suffers or incurs any Costs, Buyer
shall pay to Seller the total of all such Costs suffered or incurred by the Seller upon demand
therefore by Seller. The indemnification provided pursuant to this Section shall include, withou t
limitation, all loss or damage sustained by the Seller due to any Hazardous Materials: (a) that are
present or suspected by a governmental agency having jurisdiction to be present in the Property or
in the air, soil, soil gas, groundwater, or surface water at, on, about, above, under, or within the
Property (or any portion thereof) or to have emanated from the Property, or (b) that migrate, flow,
percolate, diffuse, or in any way move onto, into, or under the air, soil, soil gas, groundwater, or
surface water at, on, about, around, above, under, or within the Property (or any portion thereof)
after the date of this Agreement as a result of Seller’s or its predecessors’ activities on the Property.
The provisions of this Section 10 shall survive the termination of this Agreement and the Close of
Escrow.
12. HAZARDOUS MATERIALS; DEFINITIONS.
12.1. Hazardous Materials. As used in this Agreement, “Hazardous
Materials” means any chemical, compound, material, mixture, or substance that is now or may
in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws
(defined below) as a “hazardous substance”, “hazardous material”, “hazardous waste”,
“extremely hazardous waste”, infectious waste”, toxic substance”, toxic pollutant”, or any other
formulation intended to define, list or classify substances by reason of deleterious properties
such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term “Hazardous
Materials” shall also include asbestos or asbestos-containing materials, radon, chrome and/or
chromium, polychlorinated biphenyls, petroleum, petroleum products or by-products, petroleum
components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, and
synthetic gas usable as fuel, perchlorate, and methyl tert butyl ether, whether or not defined as a
hazardous waste or hazardous substance in the Environmental Laws.
19
12.2. Environmental Laws. As used in this Agreement, “Environmental
Laws” means any and all federal, state and local statutes, ordinances, orders, rules, regulations,
guidance documents, judgments, governmental authorizations or directives, or any other
requirements of governmental authorities, as may presently exist, or as may be amended or
supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling,
treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the
environment or human, plant or animal health, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801 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.
§ 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Porter-Cologne
Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act
(Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement
Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act
(Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans
& Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter-Presley-Tanner
Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et seq.).
13. RELEASE BY BUYER. Effective upon the Close of Escrow, and subject to
Seller's representations under this Agreement and any obligations arising under this Agreement or
applicable law, Buyer waives releases, remises, acquits and forever discharges Seller, and its
officers, directors, appointed and elected officials, managers, employees and agents, and any other
person acting on behalf of Seller, from any and all claims, actions, causes of action, demands,
rights, damages, costs, expenses and compensation whatsoever, direct or indirect, known or
unknown, foreseen or unforeseen, which Buyer now has or which may arise in the future on
account of or in any way arising from or in connection with the physical condition of the Property
or any law or regulation applicable thereto including, without limiting the generality of the
foregoing, any federal, state or local law, ordinance or regulation pertaining to Haz ardous
Materials. This Section 13 shall survive the termination of this Agreement and the Close of
Escrow.
BUYER ACKNOWLEDGES THAT BUYER IS FAMILIAR WITH SECTION 1542 OF
THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
BY INITIALING BELOW, BUYER EXPRESSLY WAIVES THE BENEFITS OF SECTION
1542 OF THE CALIFORNIA CIVIL CODE WITH RESPECT TO THE FOREGOING
RELEASE:
20
Buyer’s initials: _____________
14. LOSS BY FIRE OR OTHER CASUALTY/CONDEMNATION
(a) If prior to the Closing Date the Property is materially damaged or
condemned, or if Seller receives notice of pending or threatened condemnation proceedings, as
defined in subparagraph (c) below, Buyer shall have the right, exercisable by giving written notice
of such decision to Seller within fifteen (15) calendar days after receiving written notice of such
damage, condemnation, or threatened condemnation to elect to proceed with this Agreement,
subject to the terms and conditions of this Section 14. If Buyer fails to give such written notice of
its intent to proceed with the transaction, Buyer shall be deemed to have elected to terminate this
Agreement, in which case neither party shall have any further rights or obligations hereunder
(except for those that expressly survive the termination of this Agreement) and the Deposit shall
be returned to Buyer.
(b) In the event of any damage to or condemnation of the Property,
whether or not material, upon the Closing all insurance or condemnation proceeds payable to Seller
by reason of such damage, destruction, or condemnation shall be paid or assigned to Buyer, less
such sums as may have been expended by Seller for the repair or restoration of the Property.
(c) For the purpose of this paragraph, the phrase “materially damaged
or condemned” shall be deemed to mean a loss or damage to the Property the cost of repair or
replacement of which exceeds Five Hundred Thousand Dollars ($500,000.00) or which results in
diminution in land area which results in a loss of any net square footage of the Property or any
condemnation of the Property, threatened or actual. Seller shall notify Buyer in writing within two
(2) days of any material damage, condemnation or threatened condemnation.
15. MISCELLANEOUS.
15.1. Attorneys’ Fees. If any party employs counsel to enforce or interpret this
Agreement, including the commencement of any legal proceeding whatsoever (including
insolvency, bankruptcy, arbitration, mediation, declaratory relief or other litigation), the
prevailing party shall be entitled to recover its reasonable attorneys’ fees and court costs
(including the service of process, filing fees, court and court reporter costs, investigative fees,
expert witness fees, and the costs of any bonds, whether taxable or not) and shall include the
right to recover such fees and costs incurred in any appeal or efforts to collect or otherwise
enforce any judgment in its favor in addition to any other remedy it may obtain or be awarded.
Any judgment or final order issued in any legal proceeding shall include reimbursement for all
such attorneys’ fees and costs. In any legal proceeding, the “prevailing party” shall mean the
party determined by the court to most nearly prevail and not necessarily the party in whose favor
a judgment is rendered.
15.2. Interpretation. This Agreement has been negotiated at arm’s length and
each party has been represented by independent legal counsel in this transaction and this
Agreement has been reviewed and revised by counsel to each of the Parties. Accordingly, each
party hereby waives any benefit under any rule of law (including Section 1654 of the California
21
Civil Code) or legal decision that would require interpretation of any ambiguities in this
Agreement against the drafting party.
15.3. Survival. All indemnities, covenants, representations and warranties
contained in this Agreement shall survive Close of Escrow.
15.4. Successors. Except as provided to the contrary in this Agreement, this
Agreement shall be binding on and inure to the benefit of the Parties and their successors and
assigns.
15.5. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of California.
15.6. Integrated Agreement; Modifications. This Agreement (and all exhibits
incorporated herein) contains all the agreements of the Parties concerning the subject hereof any
cannot be amended or modified except by a written instrument executed and delivered by the
parties. There are no representations, agreements, arrangements or understandings, either oral
or written, between or among the parties hereto relating to the subject matter of this Agreement
that are not fully expressed herein. In addition there are no representations, agreements,
arrangements or understandings, either oral or written, between or among the Parties upon which
any party is relying upon in entering this Agreement that are not fully expressed herein.
15.7. Severability. If any term or provision of this Agreement is determined to
be illegal, unenforceable, or invalid in whole or in part for any reason, such i llegal,
unenforceable, or invalid provisions or part thereof shall be stricken from this Agreement, any
such provision shall not be affected by the legality, enforceability, or validity of the remainder
of this Agreement. If any provision or part thereof of this Agreement is stricken in accordance
with the provisions of this Section, then the stricken provision shall be replaced, to the extent
possible, with a legal, enforceable and valid provision this is in keeping with the intent of the
Parties as expressed herein.
15.8. Notices. Any delivery of this Agreement, notice, modification of this
Agreement, collateral or additional agreement, demand, disclosure, request, consent, approval,
waiver, declaration or other communication that either party desires or is required to give to the
other party or any other person shall be in writing. Any such communication may be served
personally, or by nationally recognized overnight delivery service (i.e., Federal Express) which
provides a receipt of delivery, or sent by prepaid, first class mail, return receipt requested, with
a courtsey copy delivered via e-mail, to the party’s address as set forth below:
To Buyer: ROEM Development Corporation
1650 Lafayette Street
Santa Clara, CA 95050
Attention: Alex Sanchez
Telephone: (408) 984-5600 x16
Email: asanchez@roemcorp.com
22
with a copy to: Situs Law, PC
Attn: Summer Ludwick
10 Almaden Blvd., Suite 1250
San Jose, CA 95113
Tel (408) 299-0100
Email: sludwick@situslaw.com
To Seller: City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
Attn: Executive Director
Tel (650) 877-8501
Email
with a copy to: Meyers Nave
Attn: Jason Rosenberg
555 12th Street, Suite 1500
Oakland, CA 94607
Tel (510) 808-2000
Email: jrosenberg@meyersnave.com
If to Escrow Holder: Chicago Title Insurance Company
Escrow Agent: Sherri Keller
675 N. First Street
San Jose, CA 95112
Tel (408)993-2325
Email: Sherri.keller@ctt.com
Any such communication shall be deemed effective upon personal delivery or on the date of first
refusal to accept delivery as reflected on the receipt of delivery or return receipt, as applicable.
Any party may change its address by notice to the other party. Each party shall make an ordinary,
good faith effort to ensure that it will accept or receive notices that are given in accordance with
this section and that any person to be given notice actually receives such notice.
15.9. Time. Time is of the essence to the performance of each and every
obligation under this Agreement.
15.10. Days of Week. If any date for exercise of any right, giving of any notice,
or performance of any provision of this Agreement falls on a Saturday, Sunday or federal
observed holiday, the time for performance will be extended to 5:00 p.m. on the next business
day.
15.11. Reasonable Consent and Approval. Except as otherwise provided in this
Agreement, whenever a Party is required or permitted to give its consent or approval under this
Agreement, such consent or approval shall not be unreasonably withheld or delayed. If a Party
is required or permitted to give its consent or approval in its sole and absolute discretion or if
23
such consent or approval may be unreasonably withheld, such consent or approval may be
unreasonably withheld but shall not be unreasonably delayed.
15.12. Cooperation and Further Assurances. Each Party agrees to cooperate with
the other in this transaction and, in that regard, shall at their own cost and expense execute and
deliver such further documents and instruments and shall take such other actions as may be
reasonably required or appropriate to carry out the intent and purposes of this Agreement.
15.13. Waivers. Any waiver by any Party shall be in writing and shall not be
construed as a continuing waiver. No waiver will be implied from any delay or failure to take
action on account of any default by any Party. Consent by any Party to any act or omission by
another Party shall not be construed to be consent to any other subsequent act or omission or to
waive the requirement for consent to be obtained in any future or other instance.
15.14. Signatures/Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Any one of such completely executed counterparts shall be
sufficient proof of this Agreement. Copies of original signatures shall suffice for all purposes.
15.15. Access to Property. Prior to the Closing, Seller shall cooperate to enable
representatives of Buyer to obtain the right of access to all portions of the Property for the
purposes of implementing this Agreement. Buyer agrees to provide written notice to Seller at
least twenty four (24) hours prior to undertaking any studies or work upon the Property. Buyer
shall indemnify, defend, protect and hold Seller and Seller Parties harmless from any Claims
arising out of the acts, omissions, negligence or willful misconduct of Buyer or its employees,
agents, contractors, subcontractors or representatives (each a “Buyer Party” and, collectively,
the “Buyer Parties”) in connection with such studies and investigations, except for Claims
arising from or related to any pre-existing condition on or of the Property or Claims to the extent
caused by the active negligence or willful misconduct of Seller or its employees, agents,
contractors or representatives. In addition, in the event Buyer or any Buyer Party causes any
damage to any portion of the Property, Buyer shall promptly restore the Property as nearly as
possible to the physical condition existing immediately prior to Buyer’s entry onto the Property.
Buyer’s indemnification obligations set forth in this Section 15.15 shall survive Closing or the
termination of this Agreement.
15.16. Memorandum of Agreement. A Memorandum of Agreement in
substantially the form of Exhibit E attached hereto and incorporated herein by this reference shall
be executed and recorded against the Property immediately following recordation of the Grant
Deed.
15.17. Relationship Between Seller and Buyer. It is hereby acknowledged that
the relationship between Seller and Buyer is not that of a partnership or joint venture and that
Seller and Buyer shall not be deemed or construed for any purpose to be the agent of the other.
Accordingly, except as expressly provided herein or in the exhibits hereto, Seller shall have no
rights, powers, duties or obligations with respect to the development, operation, maintenance or
management of the Project.
24
15.18. Seller Approvals and Actions. Whenever a reference is made herein to an
action or approval to be undertaken by Seller, the City Manager of the City of South San
Francisco, or its designee is authorized to act on behalf of Seller.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
SELLER:
CITY OF SOUTH SAN FRANCISCO
By: _______________________________
Mike Futrell
City Manager
ATTEST:
By: _______________________________
City Clerk
APPROVED AS TO FORM:
By: _______________________________
Jason Rosenberg
City Attorney
BUYER:
ROEM DEVELOPMENT CORPORATION,
a California corporation
By: _______________________________
Robert Emami, President
APPROVED AS TO FORM:
By: _______________________________
Counsel for Buyer
25
Chicago Title Insurance Company agrees to act as Escrow Holder in accordance with the
terms of this Agreement.
CHICAGO TITLE INSURANCE COMPANY
By:
Name:
Its:
Dated:
26
LIST OF EXHIBITS
Exhibit A Legal Description
Exhibit B Affordable Housing Agreement
Exhibit C Development Agreement
Exhibit D Completion Guaranty
Exhibit E Memorandum of Agreement
27
Exhibit A
LEGAL DESCRIPTION
201 Grand Avenue
For APN/Parcel ID(s): 012-316-110
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH
SAN FRANCISCO, COUNTY OF SAN MATEO, STATE OF CALIFORNIA AND IS
DESCRIBED AS FOLLOWS:
LOT 29 IN BLOCK 140, AS SHOWN ON THAT CERTAIN MAP ENTITLED, "SOUTH SAN
FRANCISCO, SAN MATEO COUNTY, CALIFORNIA, PLAT NO. 1", FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN MATEO COUNTY, STATE OF
CALIFORNIA, ON MARCH 1, 1892 IN BOOK "B" OF MAPS AT PAGE(S) 6, AND A COPY
ENTERED IN BOOK 2 OF MAPS AT PAGE 52.
207 Grand Avenue
For APN/Parcel ID(s): 012-316-100
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH
SAN FRANCISCO, COUNTY OF SAN MATEO, STATE OF CALIFORNIA AND IS
DESCRIBED AS FOLLOWS:
LOT 28, IN BLOCK 140, AS DESIGNATED ON THE MAP ENTITLED “SOUTH SAN
FRANCISCO, SAN MATEO CO. CAL, PLAT NO. 1”, WHICH MAP WAS FILED IN THE
OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO, STATE OF
CALIFORNIA ON MARCH 1, 1892 IN BOOK “B” OF MAPS, AT PAGE 6, AND A COPY
ENTERED IN BOOK 2 OF MAPS, AT PAGE 52.
217-219 Grand Avenue
For APN/Parcel ID(s): 012-316-080
012-316-090
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF SAN MATEO, CITY OF SOUTH SAN FRANCISCO, AND DESCRIBED AS
FOLLOWS:
LOTS 25, 26 AND 27 IN BLOCK 140, AS DESIGNATED ON THE MAP ENTITLED
“SOUTH SAN FRANCISCO, SAN MATEO CO. CAL, PLAT NO. 1”, WHICH MAP WAS
FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO, STATE
OF CALIFORNIA ON MARCH 1, 1892 IN BOOK “B” OF MAPS, AT PAGE 6, AND A
COPY ENTERED IN BOOK 2 OF MAPS, AT PAGE 52.
28
Exhibit B
AFFORDABLE HOUSING AGREEMENT
[to be provided upon execution]
29
Exhibit C
DEVELOPMENT AGREEMENT
[to be provided upon execution]
30
Exhibit D
COMPLETION GUARANTY
[to be provided upon execution]
31
Exhibit E
FORM OF MEMORANDUM OF AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
APN: Space above this line for recorder’s use
MEMORANDUM OF PURCHASE AGREEMENT
THIS MEMORANDUM OF PURCHASE AGREEMENT (this “Memorandum”)
is made effective as of the ____ day of _______, _____, by and between_______, a
California____________ (“Seller”), and _____________________ (“Buyer”), with reference to
the following facts:
A. Seller and Buyer have entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions, dated _________, 2017 (the “Agreement”), providing
for, among other things, the sale by Seller to Buyer of the real property more particularly described
on Exhibit “A” (the “Property”).
B. Seller and Buyer now desire to set forth a memorandum of public record of
such Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the
parties hereto, it is hereby agreed as follows:
1. Purchase. Seller has agreed to sell to Buyer, and Buyer has agreed to
purchase from Seller, the Property upon the terms and subject to the conditions contained in the
Agreement, all of which terms and conditions are hereby incorporated herein by this reference as
though fully set forth herein.
2. Termination. If not acquired by Buyer pursuant to the Purchase
Agreement, this Memorandum shall terminate as of the date the Agreement terminates in
accordance with its terms and in no event later than ______________.
3. Purpose. This Memorandum is prepared solely for the purpose of
recordation, and it in no way modifies the provisions of the Agreement.
4. No Change in Ownership. The recording of this document does not
constitute a change in ownership. The recording is for the sole purpose of placing third parties on
notice that the Seller has entered into a contract to sell the subject property and that the sale is
32
pending until such time as a Grant Deed is recorded or a Quitclaim Deed releasing the
Memorandum is recorded.
IN WITNESS WHEREOF, the parties hereto have executed this instrument as of
the date first written above.
Seller:
By: _________________________________
Name: _______________________________
Its: _________________________________
Date: _____________________________
Buyer
By: _________________________________
Name: _______________________________
Its: _________________________________
Date: _____________________________
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
Attn: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder’s use.
AFFORDABLE HOUSING REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
for 418 Linden Avenue, South San Francisco
by and between
THE CITY OF SOUTH SAN FRANCISCO
and
ROEM DEVELOPMENT CORPORATION
2
This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants
(this “Agreement”) is entered into effective as of _____________, 2018 (“Effective Date”) by
and between the City of South San Francisco, a municipal corporation (“City”) and ROEM
Development Corporation, a California corporation {INSERT NEW ENTITY IF APPLICABLE
AT CLOSING} (“Owner”). City and Owner are hereinafter collectively referred to as the
“Parties.”
RECITALS
A. Owner owns that certain real property located in the City of South San Francisco at
418 Linden Avenue, known as San Mateo County Assessor’s Parcel Nos. 012-314-010 and more
particularly described in Exhibit A attached hereto (the “Property”).
B. In accordance with that certain Development Agreement executed by and between
the Parties and dated as of ____________ (the “DA”), a memorandum of which was recorded in
the Official Records of San Mateo County (“Official Records”) on ________, Owner will re-
develop the Property into a high-density, residential apartment building (the “Project”).
Capitalized terms used and not defined in this Agreement have the meaning ascribed to them in
the DA.
C. To assist in the construction of affordable units at the Project, City provided Owner
with a grant in the amount of Five Hundred Twenty-Five Thousand Dollars ($525,000.00) from
City Affordable Housing In-Lieu Fees, and a grant in the amount of One Million Two Hundred
and Twenty-Five Thousand ($1,225,000.00) from City Affordable Housing Bond Funds to
partially finance the Project (“City Grants”), as further set forth in the DA.
D. As a condition to its agreement to provide the City Grants, the City requires the
Property to be subject to the terms, conditions and restrictions set forth herein, specifically, the
City requires that for a period of not less than fifty-five (55) years, twenty percent (20%) of the
residential units in the Project be rented at Affordable Rents to Eligible Households. The City
requires residential rental units assisted with funds from the City’s low- and moderate-income
housing fund to remain affordable for the longest feasible time.
F. The Parties have agreed to enter into and record this Agreement in order to satisfy the
conditions described in the foregoing Recitals. The purpose of this Agreement is to regulate and
restrict the occupancy and rents of the Project’s Restricted Units for the benefit of the occupants of the
Project. The Parties intend the covenants set forth in this Agreement to run with the land and to be
binding upon Owner and Owner’s successors and assigns for the full term of this Agreement.
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.
AGREEMENT
1. Definitions. The following terms have the meanings set forth in this Section wherever used
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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 Health and Safety Code and applicable federal rules (if
any) and as defined below:
Studio – 1 person
One Bedroom – 1.5 people
Two Bedroom – 3 people
Three Bedroom – 4.5 people
"Affordable Rent" means the following amounts, less a utility allowance and such other
adjustments as required pursuant to the California Redevelopment Law: (i) for units that are
restricted for rental to households with incomes of not more than eighty percent (80%) of AMI
(“80% Units”), a monthly rent that does not exceed one-twelfth (1/12) of thirty percent (30%) of
eighty percent (80%) of AMI, Adjusted for Family Size Appropriate for the Unit, and (ii) for units
that are restricted for rental to households with incomes of not more than one hundred twenty
percent (120%) of AMI (“120% Units”), a monthly rent that does not exceed one-twelfth of thirty
percent (30%) of one hundred twenty percent (120%) of Area Median Income, Adjusted for Family
Size Appropriate for the Unit.
"Area Median Income " or "AMI " means the median income for San Mateo County,
California, adjusted for Actual Household Size, as determined by the U.S. Department of
Housing and Urban Development (“HUD”) pursuant to Section 8 of the United States Housing
Act of 1937 and as published from time to time by the State of California Department of Housing
and Community Development (“HCD”) in Section 6932 of Title 25 of the California Code of
Regulations or successor provision published pursuant to California Health and Safety Code
Section 50093(c).
“Claims ” is defined in Section 10 .
"Eligible Household" means a household for which gross household income does not
exceed the applicable maximum income level for a Restricted Unit as specified in Section 2.1 and
Exhibit B.
“Indemnitees” is defined in Section 10.
“Low-Income” or “Lower Income” means an annual gross household income that is less
than or equal to the qualifying limits for households of Lower Income adjusted for actual household
size, as determined periodically by HUD on the basis of gross annual household income and
published by HCD in the Regulations for San Mateo County. If HUD ceases to make such
determination, "Lower Income" shall be defined as not greater than 80% of Area Median Income
adjusted for actual household size, as published by HCD in the Regulations. If both HCD and
HUD cease to make such determinations, City in its reasonable discretion may designate another
definition of "Lower Income" used by any other federal or state agency so long as such definition
is no more restrictive than that set forth herein.
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“Moderate-Income” means an annual gross household income that is less than or equal
to 120% of AMI, adjusted for actual household size as determined periodically by HCD on the
basis of gross annual household income and published in the Regulations for San Mateo County.
“Regulations ” means Title 25 of the California Code of Regulations.
“Rent -Restricted ” means a dwelling unit for which the gross rent charged for such
unit does not exceed the Affordable Rent, as adjusted for assumed household size in
accordance with the Department of Housing and Community Development (“HCD”)
guidelines.
"Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable
Rent by a household of not more than a specified household income in accordance with and as set
forth in Sections 2.1 and 2.2 and Exhibit B.
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 mixed-use,
multifamily rental housing development in compliance with the DA 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 City.
2.1 Affordability Requirements.
2.1.1 Linden Property. For a term of fifty-five (55) years commencing upon the
date of issuance of a final certificate of occupancy for the residential portion of the Project, not
less than six (6) of the residential units of the Project shall be both Rent Restricted (as defined
below) and occupied (or if vacant, available for occupancy), available at Affordable Rents to
Eligible Households with income no greater than eighty percent (80%) of Area Median Income,
and no fewer than two (2) additional units in the Project shall be both Rent Restricted and occupied
(or if vacant, available for occupancy) available at Affordable Rents to Eligible Households whose
income is no greater than one hundred twenty percent (120%) of Area Median Income. The eight
(8) residential units subject to this Agreement shall also be Rent Restricted and occupied by
Eligible Households and allocated across unit type as specified in Exhibit B.
2.1.2 Recertification. In the event that recertification of Eligible Household
incomes indicates that the number of Restricted Units actually occupied by Eligible Households
falls below the number reserved for each income group as specified in this Section 2.1 and Exhibit
B, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Project
to Eligible Household(s) until the required income mix is achieved.
2.2 Rents for Restricted Units . Rents for Restricted Units shall be limited to
Affordable Rents for households of the applicable income limit in accordance with Section 2.1
and Exhibit B. Notwithstanding the foregoing, no Eligible Household qualifying for a Restricted
Unit shall be denied continued occupancy of a unit in the Project because, after admission, such
Eligible Household's adjusted income increases to exceed the qualifying limit for such Restricted
Unit. A household which at initial occupancy qualifies in a particular income category shall be
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treated as continuing to be of such income category so long as the household’s gross income does
not exceed 140% of the applicable income limit. In the event the gross household income of a
household that qualified at the applicable income limit at initial occupancy exceeds the applicable
income limit for a unit, that unit will continue to be considered as satisfying the applicable income
limit if the unit remains Rent-Restricted.
If upon recertification of Eligible Household incomes, Owner determines that a Eligible
Household has a household income exceeding the maximum qualifying income for such Eligible
Household’s unit, the Eligible Household shall be permitted to continue to occupy the unit, and
upon expiration of the Eligible Household's lease and upon sixty (60) days’ written notice, Owner
may increase the rent for such unit to the fair market rent, and Owner shall rent the next available
unit to a Eligible Household whose household income does not exceed the applicable income limit
in order to achieve the affordability requirements of this Agreement.
2.3 Notice of Affordability Restrictions on Transfer of Property. The Parties 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.
2.4 Unit Sizes, Design and Location. The Restricted Units shall be of comparable
design quality as unrestricted units in the Project. Eligible Households of Restricted Units shall
have access to all common facilities of the Project equal to that of Eligible Households of units in
the Project that are not Restricted Units. The Restricted Units shall be allocated among affordability
categories as set forth in Exhibit B.
2.5 City Grant Funds. Owner shall ensure that all City Grant Funds are used for the
construction of affordable units in a manner consistent with the applicable City Grant Funds
requirements, which at a minimum, requires residential rental units assisted For with funds from
the City’s low- and moderate-income housing fund to remain affordable for the longest feasible
time.
2.6 No Condominium Conversion. Owner shall not convert the residential units in the
Project to condominium or cooperative ownership or sell condominium or cooperative rights to the
residential portion of the Project or any part thereof unless Owner obtains the City's consent and
meets the affordability requirements of Section 2.1. City’s prior written consent shall be required
with respect to the sale or condominium conversion of the retail/commercial portion of the
Project or any part thereof.
2.6 Non-Discrimination; Compliance with Fair Housing Laws.
2.6.1 Preferences. In order to ensure that there is an adequate supply of affordable
housing within the City for City residents and employees of businesses located within the City, to
the extent permitted by law and consistent with the program regulations for funding sources used
for development of the Project, at initial lease up, Owner shall give a preference in the rental of
the residential units in the Project to Eligible Households that include at least one member who
lives or works in the City of South San Francisco. If there are fewer Eligible Households than the
number of such units, the units will be made available to the general public. Notwithstanding the
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foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the
Internal Revenue Code of 1986, as amended, the provisions of such Section 42 shall control.
2.6.2 Fair Housing. Owner shall comply with state and federal fair housing laws
in the marketing and rental of the units in the Project. Owner shall accept as Eligible Households,
on the same basis as all other prospective Eligible Households, persons who are recipients of
federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any
successor thereto.
2.6.3 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 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 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 subd ivision (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, nor shall Owner or any person
claiming under or through Owner establish o r permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of Eligible Households, lessees, sub-Eligible Households, 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.
3. Reporting Requirements.
3.1. Eligible Household 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 City may reasonably require:
(a) The identity of each household member; and
(b) The total gross household income;
Owner shall retain such certificates for not less than three (3) years, and upon City’s
request, shall make the certificates available for City inspection.
3.2 Annual Report; Inspections. By not later than April 30th of each year during the
term of this Agreement, Owner shall submit an annual report (“Annual Report”) to the City in
form satisfactory to City, together with a certification that the Project is in compliance with the
requirements of this Agreement. The Annual Report shall, at a minimum, include the following
information for each dwelling unit in the Project: (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 required by Section 3.1.
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Owner shall include with the Annual Report, an income recertification for each household,
documentation verifying Eligible Household eligibility, and such additional information as City
may reasonably request from time to time in order to demonstrate compliance with this Agreement.
The Annual Report shall conform to the format requested by City; provided however, during such
time that the Project 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, Owner may satisfy the requirements of this Section by providing City with a
copy of compliance reports required in connection with such financing.
3.3 On-site Inspection. Owner shall permit representatives of City to enter and inspect the
Property and the Project during reasonable business hours in order to monitor compliance with this
Agreement upon 48-hours advance notice of such visit to Owner or to Owner's management agent.
3.4 Additional Information. Owner shall provide any additional information reasonably
requested by City. The City shall have the right to examine and make copies of all books, records, or
other documents of the Owner which pertain to the Project.
3.5 Records. The Owner shall maintain complete, accurate and current records pertaining
to the Development, and shall permit any duly authorized representative of the City to inspect records,
including records pertaining to income and household size of Eligible Households. All Eligible
Household lists, applications and waiting lists relating to the Project shall at all times be kept separate
and identifiable from any other business of the Owner and shall be maintained in a reasonable condition
for proper audit and subject to examination during business hours by representatives of the City. The
Owner shall retain copies of all materials obtained or produced with respect to occupancy of the Units
for a period of at least three (3) years, and for any period during which there is an audit undertaken by
the City pursuant to the DA.
4. Term of Agreement.
4.1 Term of Restrictions. Unless extended by mutual agreement of the Parties, upon
the 55th anniversary of issuance of the final certificate of occupancy for the residential portion of
the Project, this Agreement shall automatically terminate and be of no further force or effect.
4.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This
Agreement shall remain effective and fully binding for the full term hereof, as such may be extended
pursuant to Section 4.1, regardless of any sale, assignment, transfer, or conveyance of the Property
or the Project or any part thereof or interest therein.
4.3 Reconveyance. Upon the expiration 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
evidence the expiration of this Agreement, or to evidence the release and discharge of this
Agreement as a matter of title.
5. Binding Up on Successors; Covenants to Run with the Land . Owner hereby subjects
its interest in the Property and the Project to the covenants and restrictions set forth in this
Agreement. The Parties 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
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to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns
of the Parties, regardless of any sale, assignment, conveyance or transfer of the Property, the Project
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 Project (other than the Eligible
Households of the individual dwelling units or retail/commercial space within the Project) 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
Project or any part 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 City 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 equitable servitudes against the Property and the Project in favor of City.
6. Property Management; Repair and Maintenance; Marketing.
6.1 Management Responsibilities. Owner, or Owner’s designee, shall be responsible
for all management functions with respect to the Property and the Project, including without
limitation the selection of Eligible Households , 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. City shall have no
responsibility for management or maintenance of the Property or the Project.
6.2 Repair, Maintenance and Security. Throughout the term of this Agreement, Owner,
or Owner’s designee, shall at its own expense, maintain the Property and the Project 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 Project 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 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
Project. Owner shall prevent and/or rectify any physical deterioration of the Property and the
Project and shall make all repairs, renewals and replacements necessary to keep the Property
and the improvements located thereon in good conditi on and repair. Owner shall provide
adequate security services for occupants of the Project.
6.2.1 City’s Right to Perform Maintenance. In the event that Owner breaches any
of the covenants contained in Section 6.2, and such default continues for a period of thirty (30) days
after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days
after written notice from City (with respect to landscaping, building improvements and general
9
maintenance), then City, in 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.
6.2.2 Costs. All costs expended by City in connection with the foregoing Section
6.2.1, shall be paid by Owner to City upon demand. All such sums remaining unpaid thirty (30)
days following delivery of City’s invoice therefor shall bear interest at the lesser of 8% per annum
or the highest rate permitted by applicable law. Notwithstanding anything to the contrary set forth
in this Section, City 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.
6.3 Marketing and Management Plan. Within 180 days following the Effective Date
of this Agreement, Owner shall submit for City review and approval, a plan for marketing and
managing the Property ("Marketing and Management Plan" or “Plan”). The Marketing and
Management Plan shall address in detail how Owner plans to market the Restricted Units to
prospective Eligible Households in accordance with fair housing laws and this Agreement, Owner’s
Eligible Household selection criteria, and how Owner plans to certify the eligibility of Eligible
Households. The Plan shall also describe the management team and shall address how the Owner
and the management entity plan to manage and maintain the Property and the Project. The Plan
shall include the proposed management agreement and the form of rental agreement that Owner
proposes to enter into with Project Eligible Households. Owner shall abide by the terms of the
Marketing and Management Plan in marketing, managing, and maintaining the Property and the
Project, and throughout the term of this Agreement.
6.4 Approval of Amendments. If City has not responded to any submission of the
Management and Marketing Plan, the proposed management entity, or a proposed amendment or
change to any of the foregoing within thirty (30) days following City’s receipt of such plan, proposal
or amendment, the plan, proposal or amendment shall be deemed approved by City.
6.5 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all fees,
assessments, taxes, charges, liens and levies applicable to the Property or the Project, including
without limitation possessory interest taxes, if applicable, imposed 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 or contest, Owner immediately pays or discharges any
decision or judgment rendered against it, together with all costs, charges and interest. Nothing in
this Section 6.6 is intended to prohibit Owner from applying for any exemption from property
taxes and fees that may be available to the owners of low-income housing.
6.6 Insurance Coverage. Throughout the term of this Agreement Owner shall comply
with the insurance requirements set forth in the DA, and shall, at Owner’s expense, maintain in full
force and effect insurance coverage as specified in the DA.
6.7 Property Damage or Destruction. If any part of the Project is damaged or destroyed,
Owner shall repair or restore the same, consistent with the occupancy and rent restriction
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requirements set forth in this Agreement. Such work shall be commenced as soon as
reasonably practicable after the damage or loss occurs and shall be completed within one 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
financially feasible. During such time that lenders or low -income housing tax credit investors
providing financing for the Project impose requirements that differ from 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 City, 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 Project. If at the time this Agreement is recorded, any interest, lien,
or encumbrance has been recorded against the Project in position superior to this Agreement, upon
the request of City, Owner hereby covenants and agrees 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 City may
reasonably request. Notwithstanding the foregoing, the City agrees that pursuant to Health and
Safety Code Section 33334.14(a)(4), the City will not withhold consent to reasonable requests for
subordination of this Agreement to deeds of trust provided for the benefit of lenders identified in
the Financing Plan approved in connection with the DA, provided that the instruments effecting
such subordination include reasonable protections to the City in the event of default consistent
with the requirements of Health and Safety Code Section 33334.14(a)(4), including without
limitation, extended notice and cure rights.
8. Transfer and Encumbrance.
8.1 Restrictions on Transfer and Encumbrance. Upon issuance of a final certificate of
occupancy for the Project, or any portion thereof, Owner may freely transfer or assign all or any
portion of its interests, rights or obligations in the Property, or under this Agreement, to any third
party, and, as this Agreement “runs with the land” this Agreement shall be binding on Owner’s
successors and assigns for the full term of this Agreement.
Prior to issuance of a final certificate of occupancy for the Project, or any portion thereof, Owner
may transfer or assign all or any portion of its interest, right or obligations in the Property only as
set forth in the DA, and with City’s prior written consent, which consent City shall not withhold
provided that (1) the Project is and shall continue to be operated in compliance with this
Agreement; (2) the transferee expressly assumes all obligations of Owner imposed by this
Agreement; (3) the transferee executes all documents reasonably requested by the City with respect
to the assumption of the Owner’s obligations under this Agreement, and upon City’s and/or
Agency’s request, delivers to the City an opinion of its counsel to the effect that such document
and this Agreement are valid, binding and enforceable obligations of such transferee; and (4) either
(A) the transferee has at least three years’ experience in the ownership, operation and management
of low-income multifamily rental housing projects of similar size to that of the Project, 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 sub-clause (A).
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Consent to any proposed Transfer may be given by the City’s City Manager unless the City
Manager, in his or her discretion, refers the matter of approval to the City’s governing board. If a
proposed Transfer has not been approved by City in writing within thirty (30) days following
City’s receipt of written request by Owner, it shall be deemed rejected.
Owner shall reimburse City for all City costs, including but not limited to reasonable
attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a
Transfer under this Agreement and in reviewing the qualifications and financial resources of a
proposed successor, assignee, or transferee within ten (10) days following City’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 and any applicable subordination agreement recorded against the
Property, the Project or part thereof for the benefit of a lender (“Lender”) shall contain each of
the following provisions: (i) Lender shall use its best efforts to provide to City a copy of any notice
of default issued to Owner concurrently with provision of such notice to Owner; and, (ii) City shall
have the reasonable right, but not the obligation, to cure any default by Owner within the same
period of time provided to Owner for such cure extended by an additional 90 days. Owner agrees
to provide to City a copy of any notice of default Owner receives from any Lender within thirty
(30) business days following Owner’s receipt thereof.
8.4 Mortgagee Protection. No violation of any provision contained herein shall 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 Project or the Property, and the 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, City shall give written notice to the holders of record
of any mortgages or deeds of trust encumbering the Project or the Property that such violation has
occurred.
9. Default and Remedies.
9.1 Events of Default. The occurrence of 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 Project as
required hereunder, and the failure of Owner to cure such default within thirty (30) days of written
notice from City;
(c) Subject to Owner’s right to contest the following charges, Owner’s failure
to pay taxes or assessments due on the Property or the Project or failure to pay any other charge
that may result in a lien on the Property or the Project, and Owner’s failure to cu re such default
within sixty (60) days of delinquency;
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(d) 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 any applicable cure
period such that the holder of such security instrument has the right to accelerate repayment of
such loan;
(e) Owner’s default in the performance of any material term, provision or
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 thirty (30) days in the event of a monetary default or sixty (60) days in the event of a
non-monetary default following the date upon which City shall have given written notice of the
default to Owner, or if the nature of any such non-monetary default is such that it cannot be cured
within 60 days, Owner’s failure to commence to cure the default within thirty (60) days and
thereafter prosecute the curing of such default with due diligence and in good faith.
9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond
any applicable cure period, City 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. For violations of obligations with respect to rents for Restricted Units, impose as
liquidated damages a charge in an amount equal to the actual amount collected in
excess of the Affordable Rent;
C. Pursue any other remedy allowed at law or in equity.
Each of the remedies provided herein is cumulative and not exclusive. The City may
exercise from time to time 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. To the fullest extent permitted by law, Owner shall indemnify, defend (with
counsel approved by City) and hold City and its respective elected and appointed officers, officials,
employees, agents, and representatives (collectively, the “Indemnitees”) 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 the Property and the Project or any failure to perform any obligation as and when
required by this Agreement. Owner’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 10 shall survive the expiration or earlier termination of this
Agreement. It is further agreed that City do not and shall not waive any rights against Owner that
they may have by reason of this indemnity and hold harmless agreement because of the acceptance
by, or the deposit with City by Owner, of any of the insurance policies described in this Agreement
or the DA.
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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 City of any term or provision of this Agreement must be
in writing. No waiver shall be implied from any delay or failure by City 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 City 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; or
(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 con firmed by
the delivery service.
If to City, to: City of South San Francisco
400 Grand Avenue
Attn: City Manager
South San Francisco, CA 94080
Phone: (650) 877-8500
With a Copy to: City of South San Francisco
400 Grand Avenue
Attn: ECD Director
South San Francisco, CA 94080
Phone: (650) 829-6622
Email: alex.greenwood@ssf.net
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With a Copy to: Meyers Nave
Attn: Jason Rosenberg
555 12th Street, Suite 1500
Oakland, CA 94607
Tel (510) 808-2000
Fax (510) 444-1108
Email jrosenberg@meyersnave.com
If to Developer: ROEM Development Corporation
1650 Lafayette Street
Santa Clara, CA 95050
Attention: Alex Sanchez
Telephone: (408) 984-5600
Email: asanchez@roemcorp.com
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.
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 City. Except as may be otherwise specifically provided herein,
whenever any approval, notice, direction, consent or request by the City is required or permitted
under this Agreement, such action shall be in writing, and such action may be given, made or taken
by the City Manager or by any person who shall have been designated by the City Manager,
without further approval by the governing board of the City at the discretion of the City Manager.
11.7 Non-Liability of City Officials, Employees and Agents. No member, official,
employee or agent of the City shall be personally liable to Owner or any successor in interest, in
the event of any default or breach by the City, or for any amount of money which may become
due to Owner or its successor or for any obligation of City 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 to interpret this Agreement. The
language of this Agreement shall be construed as a whole according 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 performance of this
Agreement.
11.10 Governing Law. 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.
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11.12 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 shall not be affected or impaired thereby.
11.13 Entire Agreement; Exhibits. This Agreement, together with the DA, and the other
City Documents and Agency Documents 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.
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IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory
Agreement and Declaration of Restrictive Covenants as of the date first written above.
CITY
THE CITY OF SOUTH SAN FRANCISCO,
a municipal corporation
By: __________________________________
Name:________________________________
Title:_________________________________
ATTEST:
By: _________________________________
Krista Martinelli, City Clerk
APPROVED AS TO FORM:
By: _________________________________
Jason Rosenberg, City Attorney
OWNER
ROEM DEVELOPMENT CORPORATION,
A CALIFORNIA CORPORATION
By: ______________________________
Its: _______________________________
SIGNATURES MUST BE NOTARIZED.
17
STATE OF CALIFORNIA )
)
COUNTY OF SAN MATEO )
On , 20__, 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 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 MATEO )
On , 20__, 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 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.
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WITNESS my hand and official seal.
Signature _______________________________ (Seal)
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Exhibit A
LINDEN AVENUE PROPERTY
For APN/Parcel ID(s): 012-314-010
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH
SAN FRANCISCO, COUNTY OF SAN MATEO, STATE OF CALIFORNIA AND IS
DESCRIBED AS FOLLOWS:
LOTS 10 AND 11, BLOCK 138, AS DELINEATED UPON THAT CERTAIN MAP
ENTITLED "SOUTH SAN FRANCISCO, SAN MATEO CO., CAL. PLAT NO. 1", FILED
FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO,
STATE OF CALIFORNIA, ON MARCH 1ST, 1892 IN BOOK
"B" OF MAPS, AT PAGE 6 AND COPIED INTO BOOK 2 OF MAPS AT PAGE 52.
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Exhibit B
Number of Units by Unit Size and Targeted Area Median Income (AMI) Levels
Linden Avenue Property
Maximum
Household
Income
Up to 60%
AMI
60% - 80%
AMI
80% -120%
AMI
Total
Studio 1 0 0 1
1-Bedroom
3 1 4
2-Bedroom
0 2 1 3
3-Bedroom 0 0 0 0
Total
1 5 2 8
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of South San Francisco
400 Grand Avenue
South San Francisco, CA 94080
Attn: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder’s use.
AFFORDABLE HOUSING REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
for 201 -219 Grand Avenue, South San Francisco
by and between
THE CITY OF SOUTH SAN FRANCISCO
and
ROEM DEVELOPMENT CORPORATION
2
This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants
(this “Agreement”) is entered into effective as of _____________, 2018 (“Effective Date”) by
and between the City of South San Francisco, a municipal corporation (“City”) and ROEM
Development Corporation, a California corporation {INSERT NEW ENTITY IF APPLICABLE
AT CLOSING} (“Owner”). City and Owner are hereinafter collectively referred to as the
“Parties.”
RECITALS
A. Owner owns that certain real property located in the City of South San Francisco
located at 201-219 Grand Avenue, known as San Mateo County Assessor’s Parcel Nos. 012-316-
110, 012-316-100, 012-316-090 and 012-316-080 and more particularly described in Exhibit A
attached hereto (the “Grand Property” or the “Property”).
B. In accordance with that certain Development Agreement executed by and between
the Parties and dated as of ____________ (the “DA”), a memorandum of which was recorded in
the Official Records of San Mateo County (“Official Records”) on ________, Owner will re-
develop the Property into a high-density, mixed use project including residential units and ground
floor commercial units (the “Project”). Capitalized terms used and not defined in this Agreement
have the meaning ascribed to them in the DA.
C. To assist in the construction of affordable units at the Project, City provided Owner
with a grant in the amount of Five Hundred Twenty-Five Thousand Dollars ($525,000.00) from
City Affordable Housing In-Lieu Fees, and a grant in the amount of One Million Two Hundred
and Twenty-Five Thousand ($1,225,000.00) from City Affordable Housing Bond Funds to
partially finance the Project (“City Grants”), as further set forth in the DA.
D. As a condition to its agreement to provide the City Grants, the City requires the
Property to be subject to the terms, conditions and restrictions set forth herein, specifically, the
City requires that for a period of not less than fifty-five (55) years, twenty percent (20%) of the
residential units in the Project be rented at Affordable Rents to Eligible Households . The City
requires residential rental units assisted with funds from the City’s low- and moderate-income
housing fund to remain affordable for the longest feasible time.
F. The Parties have agreed to enter into and record this Agreement in order to satisfy the
conditions described in the foregoing Recitals. The purpose of this Agreement is to regulate and
restrict the occupancy and rents of the Project’s Restricted Units for the benefit of the occupants of the
Project. The Parties intend the covenants set forth in this Agreement to run with the land and to be
binding upon Owner and Owner’s successors and assigns for the full term of this Agreement.
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.
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AGREEMENT
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 Health and Safety Code and applicable federal rules (if
any) and as defined below:
Studio – 1 person
One Bedroom – 1.5 people
Two Bedroom – 3 people
Three Bedroom – 4.5 people
"Affordable Rent" means the following amounts, less a utility allowance and such other
adjustments as required pursuant to the California Redevelopment Law: (i) for units that are
restricted for rental to households with incomes of not more than eighty percent (80%) of AMI
(“80% Units”), a monthly rent that does not exceed one-twelfth (1/12) of thirty percent (30%) of
eighty percent (80%) of AMI, Adjusted for Family Size Appropriate for the Unit, and (ii) for units
that are restricted for rental to households with incomes of not more than one hundred twenty
percent (120%) of AMI (“120% Units”), a monthly rent that does not exceed one-twelfth of thirty
percent (30%) of one hundred twenty percent (120%) of Area Median Income, Adjusted for Family
Size Appropriate for the Unit.
"Area Median Income " or "AMI " means the median income for San Mateo County,
California, adjusted for Actual Household Size, as determined by the U.S. Department of
Housing and Urban Development (“HUD”) pursuant to Section 8 of the United States Housing
Act of 1937 and as published from time to time by the State of California Department of Housing
and Community Development (“HCD”) in Section 6932 of Title 25 of the California Code of
Regulations or successor provision published pursuant to California Health and Safety Code
Section 50093(c).
“Claims ” is defined in Section 10 .
"Eligible Household" means a household for which gross household income does not
exceed the applicable maximum income level for a Restricted Unit as specified in Section 2.1 and
Exhibit B.
“Indemnitees” is defined in Section 10.
“Low-Income” or “Lower Income” means an annual gross household income that is less
than or equal to the qualifying limits for households of Lower Income adjusted for actual household
size, as determined periodically by HUD on the basis of gross annual household income and
published by HCD in the Regulations for San Mateo County. If HUD ceases to make such
determination, "Lower Income" shall be defined as not greater than 80% of Area Median Income
adjusted for actual household size, as published by HCD in the Regulations. If both HCD and
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HUD cease to make such determinations, City in its reasonable discretion may designate another
definition of "Lower Income" used by any other federal or state agency so long as such definition
is no more restrictive than that set forth herein.
“Moderate-Income” means an annual gross household income that is less than or equal
to 120% of AMI, adjusted for actual household size as determined periodically by HCD on the
basis of gross annual household income and published in the Regulations for San Mateo County.
“Regulations ” means Title 25 of the California Code of Regulations.
“Rent -Restricted ” means a dwelling unit for which the gross rent charged for such
unit does not exceed the Affordable Rent, as adjusted for assumed household size in
accordance with the D epartment of Housing and Community Development (“HCD”)
guidelines.
"Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable
Rent by a household of not more than a specified household income in accordance with and as set
forth in Sections 2.1 and 2.2 and Exhibit B.
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 mixed-use,
multifamily rental housing development in compliance with the DA 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 City.
2.1 Affordability Requirements.
2.1.1 Grand Property. For a term of fifty-five (55) years commencing upon the
date of issuance of a final certificate of occupancy for the residential portion of the Project, not
less than eight (8) of the residential units of the Project shall be both Rent Restricted (as defined
below) and occupied (or if vacant, available for occupancy), available at Affordable Rents to
Eligible Households with income no greater than eighty percent (80%) of Area Median Income,
and no fewer than one (1) additional units in the Project shall be both Rent Restricted and occupied
(or if vacant, available for occupancy), available at Affordable Rents to Eligible Households whose
income is no greater than one hundred twenty percent (120%) of Area Median Income. The nine
(9) residential units subject to this Agreement shall also be Rent Restricted and occupied by
Eligible Households and allocated across unit type as specified in Exhibit B.
2.1.2 Recertification. In the event that recertification of Eligible Household
incomes indicates that the number of Restricted Units actually occupied by Eligible Households
falls below the number reserved for each income group as specified in this Section 2.1 and Exhibit
B, Owner shall rectify the condition by renting the next avai lable dwelling unit(s) in the Project
to Eligible Household(s) until the required income mix is achieved.
2.2 Rents for Restricted Units . Rents for Restricted Units shall be limited to
Affordable Rents for households of the applicable income limit in acc ordance with Section 2.1
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and Exhibit B. Notwithstanding the foregoing, no Eligible Household qualifying for a Restricted
Unit shall be denied continued occupancy of a unit in the Project because, after admission, such
Eligible Household's adjusted income increases to exceed the qualifying limit for such Restricted
Unit. A household which at initial occupancy qualifies in a particular income category shall be
treated as continuing to be of such income category so long as the household’s gross income does
not exceed 140% of the applicable income limit. In the event the gross household income of a
household that qualified at the applicable income limit at initial occupancy exceeds of the
applicable income limit for a unit, that unit will continue to be consid ered as satisfying the
applicable income limit if the unit remains Rent -Restricted.
If upon recertification of Eligible Household incomes, Owner determines that an Eligible
Household has a household income exceeding the maximum qualifying income for such Eligible
Household’s unit, the Eligible Household shall be permitted to continue to occupy the unit, and
upon expiration of the Eligible Household's lease and upon sixty (60) days’ written notice, Owner
may increase the rent for such unit to the fair market rent, and Owner shall rent the next available
unit to a Eligible Household whose household income does not exceed the applicable income limit
in order to achieve the affordability requirements of this Agreement.
2.3 Unit Sizes, Design and Location. The Restricted Units shall be of comparable design
quality as unrestricted units in the Project. Eligible Households of Restricted Units shall have
access to all common facilities of the Project equal to that of Eligible Households of units in the
Project that are not Restricted Units. The Restricted Units shall be allocated among affordability
categories as set forth in Exhibit B.
2.4 City Grant Funds. Owner shall ensure that all City Grant Funds are used for the
construction of affordable units in a manner consistent with the applicable City Grant Funds
requirements, which at a minimum, requires residential rental units assisted with funds from the
City’s low- and moderate-income housing fund to remain affordable for the longest feasible time.
2.5 Condominium Conversion. Owner shall not convert the residential units in the Project
to condominium or cooperative ownership or sell condominium or cooperative rights to the
residential portion of the Project or any part thereof unless Owner obtains the City's consent and
meets the affordability requirements of Section 2.1. City’s prior written consent shall be required
with respect to the sale or condominium conversion of the retail/commercial portion of the
Project or any part thereof.
2.6 Non-Discrimination; Compliance with Fair Housing Laws.
2.6.1 Preferences. In order to ensure that there is an adequate supply of affordable
housing within the City for City residents and employees of businesses located within the City, to
the extent permitted by law and consistent with the program regulations for funding sourc es used
for development of the Project, at initial lease up, Owner shall give a preference in the rental of
the residential units in the Project to Eligible Households that include at least one member who
lives or works in the City of South San Francisco. If there are fewer Eligible Households than the
number of such units, the units will be made available to the general public. Notwithstanding the
foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the
Internal Revenue Code of 1986, as amended, the provisions of such Section 42 shall control.
6
2.6.2 Fair Housing. Owner shall comply with state and federal fair housing laws
in the marketing and rental of the units in the Project. Owner shall accept as Eligible Households,
on the same basis as all other prospective Eligible Households, persons who are recipients of
federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any
successor thereto.
2.6.3 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 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 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, 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 Eligible Households, lessees, sub-Eligible Households, 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.
3. Reporting Requirements.
3.1. Eligible Household 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 City may reasonably require:
(a) The identity of each household member; and
(b) The total gross household income;
Owner shall retain such certificates for not less than three (3) years, and upon City’s
request, shall make the certificates available for City inspection.
3.2 Annual Report; Inspections. By not later than April 30th of each year during the
term of this Agreement, Owner shall submit an annual report (“Annual Report”) to the City in
form satisfactory to City, together with a certification that the Project is in compliance with the
requirements of this Agreement. The Annual Report shall, at a minimum, include the following
information for each dwelling unit in the Project: (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 required by Section 3.1.
Owner shall include with the Annual Report, an income recertification for each household,
documentation verifying Eligible Household eligibility, and such additional information as City
7
may reasonably request from time to time in order to demonstrate compliance with this Agreement.
The Annual Report shall conform to the format requested by City; provided however, during such
time that the Project 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, Owner may satisfy the requirements of this Section by providing City with a
copy of compliance reports required in connection with such financing.
3.3 On-site Inspection. Owner shall permit representatives of City to enter and inspect the
Property and the Project during reasonable business hours in order to monitor compliance with this
Agreement upon 48-hours advance notice of such visit to Owner or to Owner's management agent.
3.4 Additional Information. Owner shall provide any additional information reasonably
requested by City. The City shall have the right to examine and make copies of all books, records, or
other documents of the Owner which pertain to the Project.
3.5 Records. The Owner shall maintain complete, accurate and current records pertaining
to the Development, and shall permit any duly authorized representative of the City to inspect records,
including records pertaining to income and household size of Eligible Households. All Eligible
Household lists, applications and waiting lists relating to the Project shall at all times be kept separate
and identifiable from any other business of the Owner and shall be maintained in a reasonable condition
for proper audit and subject to examination during business hours by representatives of the City. The
Owner shall retain copies of all materials obtained or produced with respect to occupancy of the Units
for a period of at least three (3) years, and for any period during which there is an audit undertaken by
the City pursuant to the DA.
4. Term of Agreement.
4.1 Term of Restrictions. Unless extended by mutual agreement of the Parties, upon
the 55th anniversary of issuance of the final certificate of occupancy for the residential portion of
the Project, this Agreement shall automatically terminate and be of no further force or effect.
4.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This
Agreement shall remain effective and fully binding for the full term hereof, as such may be extended
pursuant to Section 4.1, regardless of any sale, assignment, transfer, or conveyance of the Property
or the Project or any part thereof or interest therein.
4.3 Reconveyance. Upon the expiration 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
evidence the expiration of this Agreement, or to evidence the release and discharge of this
Agreement as a matter of title.
5. Binding Upon Successors; Covenants to Run with the Land . Owner hereby subjects
its interest in the Property and the Project to the covenants and r estrictions set forth in this
Agreement. The Parties 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 benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns
of the Parties, regardless of any sale, assignment, conveyance or transfer of the Property, the Project
8
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 Project (other than the Eligible
Households of the individual dwelling units or retail/commercial space within the Project) 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
Project or any part 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 City 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 equitable servitudes against the Property and the Project in favor of City.
6. Property Management; Repair and Maintenance; Marketing.
6.1 Management Responsibilities. Owner, or Owner’s designee, shall be responsible
for all management functions with respect to the Property and the Project, including without
limitation the selection of Eligible Households , 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. City shall have no
responsibility for management or maintenance of the Property or the Project.
6.2 Repair, Maintenance and Security. Throughout the term of this Agreement, Owner,
or Owner’s designee, shall at its own expense, maintain the Property and the Project 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 Project 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 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
Project. Owner shall prevent and/or rectify any physical deterioration of the Property and the
Project and shall make all repairs, renewals and replacements necessary to keep the Property
and the improvements located thereon in good conditi on and repair. Owner shall provide
adequate security services for occupants of the Project.
6.2.1 City’s Right to Perform Maintenance. In the event that Owner breaches any
of the covenants contained in Section 6.2, and such default continues for a period of thirty (30) days
after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days
after written notice from City (with respect to landscaping, building improvements and general
maintenance), then City, in 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
9
all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped
areas on the Property.
6.2.2 Costs. All costs expended by City in connection with the foregoing Section
6.2.1, shall be paid by Owner to City upon demand. All such sums remaining unpaid thirty (30)
days following delivery of City’s invoice therefor shall bear interest at the lesser of 8% per annum
or the highest rate permitted by applicable law. Notwithstanding anything to the contrary set forth
in this Section, City 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.
6.3 Marketing and Management Plan. Within 180 days following the Effective Date
of this Agreement, Owner shall submit for City review and approval, a plan for marketing and
managing the Property ("Marketing and Management Plan" or “Plan”). The Marketing and
Management Plan shall address in detail how Owner plans to market the Restricted Units to
prospective Eligible Households in accordance with fair housing laws and this Agreement, Owner’s
Eligible Household selection criteria, and how Owner plans to certify the eligibility of Eligible
Households. The Plan shall also describe the management team and shall address how the Owner
and the management entity plan to manage and maintain the Property and the Project. The Plan
shall include the proposed management agreement and the form of rental agreement that Owner
proposes to enter into with Project Eligible Households. Owner shall abide by the terms of the
Marketing and Management Plan in marketing, managing, and maintaining the Property and the
Project, and throughout the term of this Agreement.
6.4 Approval of Amendments. If City has not responded to any submission of the
Management and Marketing Plan, the proposed management entity, or a proposed amendment or
change to any of the foregoing within thirty (30) days following City’s receipt of such plan, proposal
or amendment, the plan, proposal or amendment shall be deemed approved by City.
6.5 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all fees,
assessments, taxes, charges, liens and levies applicable to the Property or the Project, including
without limitation possessory interest taxes, if applicable, imposed 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 or contest, Owner immediately pays or discharges any
decision or judgment rendered against it, together with all costs, charges and interest. Nothing in
this Section 6.6 is intended to prohibit Owner from applying for any exemption from property
taxes and fees that may be available to the owners of low-income housing.
6.6 Insurance Coverage. Throughout the term of this Agreement Owner shall comply
with the insurance requirements set forth in the DA, and shall, at Owner’s expense, maintain in full
force and effect insurance coverage as specified in the DA.
6.7 Property Damage or Destruction. If any part of the Project 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 as soon as
reasonably practicable after the damage or loss occurs a nd shall be completed within one year
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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
financially feasible. During such time that lenders or low -income housing tax credit investors
providing financing for the Project impose requirements that differ from 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 City, 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 Project. If at the time this Agreement is recorded, any interest, lien,
or encumbrance has been recorded against the Project in position superior to this Agreement, upon
the request of City, Owner hereby covenants and agrees 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 City may
reasonably request. Notwithstanding the foregoing, the City agrees that pursuant to Health and
Safety Code Section 33334.14(a)(4), the City will not withhold consent to reasonable requests for
subordination of this Agreement to deeds of trust provided for the benefit of lenders identified in
the Financing Plan approved in connection with the DA, provided that the instruments effecting
such subordination include reasonable protections to the City in the event of default consistent
with the requirements of Health and Safety Code Section 33334.14(a)(4), including without
limitation, extended notice and cure rights.
8. Transfer and Encumbrance.
8.1 Restrictions on Transfer and Encumbrance. Upon issuance of a final certificate of
occupancy for the Project, or any portion thereof, Owner may freely transfer or assign all or any
portion of its interests, rights or obligations in the Property, or under this Agreement, to any third
party, and, as this Agreement “runs with the land” this Agreement shall be binding on Owner’s
successors and assigns for the full term of this Agreement.
Prior to issuance of a final certificate of occupancy for the Project, or any portion thereof, Owner
may transfer or assign all or any portion of its interest, right or obligations in the Property only as
set forth in the DA, and with City’s prior written consent, which consent City shall not withhold
provided that (1) the Project is and shall continue to be operated in compliance with this
Agreement; (2) the transferee expressly assumes all obligations of Owner imposed by this
Agreement; (3) the transferee executes all documents reasonably requested by the City with respect
to the assumption of the Owner’s obligations under this Agreement, and upon City’s and/or
Agency’s request, delivers to the City an opinion of its counsel to the effect that such document
and this Agreement are valid, binding and enforceable obligations of such transferee; and (4) either
(A) the transferee has at least three years’ experience in the ownership, operation and management
of low-income multifamily rental housing projects of similar size to that of the Project, 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 sub-clause (A).
Consent to any proposed Transfer may be given by the City’s City Manager unless the City
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Manager, in his or her discretion, refers the matter of approval to the City’s governing board. If a
proposed Transfer has not been approved by City in writing within thirty (30) days following
City’s receipt of written request by Owner, it shall be deemed rejected.
Owner shall reimburse City for all City costs, including but not limited to reasonable
attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a
Transfer under this Agreement and in reviewing the qualifications and financial resources of a
proposed successor, assignee, or transferee within ten (10) days following City’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 and any applicable subordination agreement recorded against the
Property, the Project or part thereof for the benefit of a lender (“Lender”) shall contain each of
the following provisions: (i) Lender shall use its best efforts to provide to City a copy of any notice
of default issued to Owner concurrently with provision of such notice to Owner; and, (ii) City shall
have the reasonable right, but not the obligation, to cure any default by Owner within the same
period of time provided to Owner for such cure extended by an additional 90 days. Owner agrees
to provide to City a copy of any notice of default Owner receives from any Lender within thirty
(30) business days following Owner’s receipt thereof.
8.4 Mortgagee Protection. No violation of any provision contained herein shall 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 Project or the Property, and the 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, City shall give written notice to the holders of record
of any mortgages or deeds of trust encumbering the Project or the Property that such violation has
occurred.
9. Default and Remedies.
9.1 Events of Default. The occurrence of 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 Project as
required hereunder, and the failure of Owner to cure such default within thirty (30) days of written
notice from City;
(c) Subject to Owner’s right to contest the following charges, Owner’s failure
to pay taxes or assessments due on the Property or the Project or failure to pay any other charge
that may result in a lien on the Property or the Project, and Owner’s failure to cure such default
within sixty (60) days of delinquency;
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(d) 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 any applicable cure
period such that the holder of such security instrument has the right to accelerate repayment of
such loan;
(e) Owner’s default in the performance of any material term, provision or
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 thirty (30) days in the event of a monetary default or sixty (60) days in the event of a
non-monetary default following the date upon which City shall have given written notice of the
default to Owner, or if the nature of any such non-monetary default is such that it cannot be cured
within 60 days, Owner’s failure to commence to cure the default within thirty (60) days and
thereafter prosecute the curing of such default with due diligence and in good faith.
9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond
any applicable cure period, City 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. For violations of obligations with respect to rents for Restricted Units, impose as
liquidated damages a charge in an amount equal to the actual amount collected in
excess of the Affordable Rent;
C. Pursue any other remedy allowed at law or in equity.
Each of the remedies provided herein is cumulative and not exclusive. The City may
exercise from time to time 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. To the fullest extent permitted by law, Owner shall indemnify, defend (with
counsel approved by City) and hold City and its respective elected and appointed officers, officials,
employees, agents, and representatives (collectively, the “Indemnitees”) 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 the Property and the Project or any failure to perform any obligation as and when
required by this Agreement. Owner’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 10 shall survive the expiration or earlier termination of this
Agreement. It is further agreed that City do not and shall not waive any rights against Owner that
they may have by reason of this indemnity and hold harmless agreement because of the acceptance
by, or the deposit with City by Owner, of any of the insurance policies described in this Agreement
or the DA.
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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 City of any term or provision of this Agreement must be
in writing. No waiver shall be implied from any delay or failure by City 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 City 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; or
(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 con firmed by
the delivery service.
If to City, to: City of South San Francisco
400 Grand Avenue
Attn: City Manager
South San Francisco, CA 94080
Phone: (650) 877-8500
With a Copy to: City of South San Francisco
400 Grand Avenue
Attn: ECD Director
South San Francisco, CA 94080
Phone: (650) 829-6622
Email: alex.greenwood@ssf.net
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With a Copy to: Meyers Nave
Attn: Jason Rosenberg
555 12th Street, Suite 1500
Oakland, CA 94607
Tel (510) 808-2000
Fax (510) 444-1108
Email jrosenberg@meyersnave.com
If to Developer: ROEM Development Corporation
1650 Lafayette Street
Santa Clara, CA 95050
Attention: Alex Sanchez
Telephone: (408) 984-5600
Email: asanchez@roemcorp.com
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.
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 City. Except as may be otherwise specifically provided herein,
whenever any approval, notice, direction, consent or request by the City is required or permitted
under this Agreement, such action shall be in writing, and such action may be given, made or taken
by the City Manager or by any person who shall have been designated by the City Manager,
without further approval by the governing board of the City at the discretion of the City Manager.
11.7 Non-Liability of City Officials, Employees and Agents. No member, official,
employee or agent of the City shall be personally liable to Owner or any successor in interest, in
the event of any default or breach by the City, or for any amount of money which may become
due to Owner or its successor or for any obligation of City 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 to interpret this Agreement. The
language of this Agreement shall be construed as a whole according to its fa ir meaning and not
strictly for or against any Party.
11.9 Time is of the Essence. Time is of the essence in the performance of this
Agreement.
11.10 Governing Law. 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.
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11.12 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 shall not be affected or impaired thereby.
11.13 Entire Agreement; Exhibits. This Agreement, together with the DA and the other
City Documents and Agency Documents 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.
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IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory
Agreement and Declaration of Restrictive Covenants as of the date first written above.
CITY
THE CITY OF SOUTH SAN FRANCISCO,
a municipal corporation
By: __________________________________
Name:________________________________
Title:_________________________________
ATTEST:
By: _________________________________
Krista Martinelli, City Clerk
APPROVED AS TO FORM:
By: _________________________________
Jason Rosenberg, City Attorney
OWNER
ROEM DEVELOPMENT CORPORATION,
A CALIFORNIA CORPORATION
By: ______________________________
Its: _______________________________
SIGNATURES MUST BE NOTARIZED.
17
STATE OF CALIFORNIA )
)
COUNTY OF SAN MATEO )
On , 20__, 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 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 MATEO )
On , 20__, 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 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.
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WITNESS my hand and official seal.
Signature _______________________________ (Seal)
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Exhibit A
GRAND AVENUE PROPERTY
201 Grand Avenue
For APN/Parcel ID(s): 012-316-110
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH
SAN FRANCISCO, COUNTY OF SAN MATEO, STATE OF CALIFORNIA AND IS
DESCRIBED AS FOLLOWS:
LOT 29 IN BLOCK 140, AS SHOWN ON THAT CERTAIN MAP ENTITLED, "SOUTH SAN
FRANCISCO, SAN MATEO COUNTY, CALIFORNIA, PLAT NO. 1", FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN MATEO COUNTY, STATE OF
CALIFORNIA, ON MARCH 1, 1892 IN BOOK "B" OF MAPS AT PAGE(S) 6, AND A COPY
ENTERED IN BOOK 2 OF MAPS AT PAGE 52.
207 Grand Avenue
For APN/Parcel ID(s): 012-316-100
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH
SAN FRANCISCO, COUNTY OF SAN MATEO, STATE OF CALIFORNIA AND IS
DESCRIBED AS FOLLOWS:
LOT 28, IN BLOCK 140, AS DESIGNATED ON THE MAP ENTITLED “SOUTH SAN
FRANCISCO, SAN MATEO CO. CAL, PLAT NO. 1”, WHICH MAP WAS FILED IN THE
OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO, STATE OF
CALIFORNIA ON MARCH 1, 1892 IN BOOK “B” OF MAPS, AT PAGE 6, AND A COPY
ENTERED IN BOOK 2 OF MAPS, AT PAGE 52.
217-219 Grand Avenue
For APN/Parcel ID(s): 012-316-080
012-316-090
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF SAN MATEO, CITY OF SOUTH SAN FRANCISCO, AND DESCRIBED AS
FOLLOWS:
LOTS 25, 26 AND 27 IN BLOCK 140, AS DESIGNATED ON THE MAP ENTITLED
“SOUTH SAN FRANCISCO, SAN MATEO CO. CAL, PLAT NO. 1”, WHICH MAP WAS
FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO, STATE
OF CALIFORNIA ON MARCH 1, 1892 IN BOOK “B” OF MAPS, AT PAGE 6, AND A
COPY ENTERED IN BOOK 2 OF MAPS, AT PAGE 52.
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Exhibit B
Number of Units by Unit Size and Targeted Area Median Income (AMI) Levels
Grand Avenue Property
Maximum
Household
Income
Up to 60%
AMI
60% - 80%
AMI
80% -120%
AMI
Total
Studio 1 1
1-Bedroom
4 3 7
2-Bedroom
1 0 1
3-Bedroom 0 0
Total
1 5 3 9