Document elcerrito_gov_doc_5513822f90

AGENDA BILL Agenda Item No. 5(D) Date: June 2, 2015 To: El Cerrito City Council From: Melanie Mintz, Interim Community Development Director Margaret Development Services Manager Subject: Below Market Rate Housing Agreement- Creekside Walk Ventures Project ACTION REQUESTED Adopt a resolution authorizing the City Manager to execute a Below Market Rate Housing Regulatory and Resale Restriction Agreement and Declaration of Restrictive Covenants for the Creekside Walk Ventures project and finding that the Agreement satisfies Condition of Approval #41 for the project (Section C of Exhibit C of City Council Resolution No. 2006-01). BACKGROUND Ever since the El Cerrito Plaza Shopping Center redevelopment project’s inception, multifamily residential units were envisioned as a part of the overall development. Since that time, the project and its EIR has been the subject of numerous public hearings, summarized in a project chronology provided as Attachment 2. The most recent public hearing on this project occurred on April 2, 2014 at which the Design Review Board found that the building permit was in compliance with specific relevant mitigations and conditions of approval. Since that time, staff and the project sponsor have been working through the numerous Conditions of Approval of the project. The project sponsor recently informed the City that it has received project financing and is ready to begin construction. Staff is working to finalize all actions needed to be completed prior to issuance of the building permit. Prior to the beginning of construction, staff has required the development team to host a community meeting to discuss the project’s construction schedule and other details about the construction period. The meeting is currently scheduled for June 3, 5-7 pm at El Cerrito City Hall. The 128-unit residential project was approved under the City’s Incentives Program (Zoning Ordinance Chapter 19.23) which encourages project enhancements by allowing flexibility in the application of zoning requirements. The project received a reduction in parking and relief from private open space requirements due to its provision of affordable housing, proximity to the El Cerrito Plaza BART station and provision of open space and contribution to public open space improvements, through the daylighting of Cerrito Creek along the project southern edge and provision of a connection to the Ohlone Greenway. The item before City Council tonight is to approve a Below Market Rate Housing Agreement in fulfillment of Condition #41 which requires that the developer provide 15 ---PAGE BREAK--- Agenda Item No. 5(D) percent of the units as affordable to low and moderate income households. The item before Council tonight is solely implementation of Condition #41. ANALYSIS Condition #41 which specifies the below market requirement for the project was at the time structured to conform to the procedures of California Redevelopment Law, e.g. utilization of an Owner Participation Agreement with the Redevelopment Agency (RDA). Because the Redevelopment Agency was dissolved by Assembly Bill 26 and Assembly Bill 1484, implementation of this condition is now the responsibility of the City. Condition #41: Owner Participation Agreement. The developer will negotiate an Owner Participation Agreement with the El Cerrito Redevelopment Agency as provided in the Agency’s Owner Participation Rules. As part of the Owner Participation Agreement, the developer will be required to provide 15 percent of the units as affordable to low and moderate income households. The units shall be provided in proportion to the City’s Regional Housing Needs Allocation, with 32% being affordable to low-income households and 68% being affordable to moderate-income households. The maximum purchase price for each affordable unit shall be determined in keeping with Health & Safety Code Section 50052.5 and the median income definitions in place for Contra Costa County at the time of sale. The developer will record an affordability covenant prior to commencement of construction. Upon sale of each affordable unit, the buyer will be required to execute a resale restriction. Prior to any necessary subdivision of land, the affordable units will be specifically designated on the subdivision map. (Resolution 2006-01) Similarly, at the time of project approval, the project was envisioned to be a for-sale condominium project. Due to market conditions, including project financing requirements, the project sponsor will be initially offering the units as rental with the option to offer the units for sale at a later date when the market conditions improve. As such, the Below Market Rate Housing Regulatory and Resale Restriction Agreement and Declaration of Restrictive Covenants (“Agreement”) (Exhibit A to Attachment 1) is structured to require that the onsite below market units be restricted at the required affordability levels during the rental period and upon sale. A condominium map will be prepared and recorded as contemplated in the project application and approvals prior to Certificate of Occupancy in preparation for eventual sale of the units. The Agreement also incorporates as exhibits template documents which will come into place at the time when the developer/project owner sells the below market rate units. These include a Resale Restriction, a Homebuyer Note and a Homebuyer Deed of Trust. The developer will agree to the form of these at the time of entering into the proposed Agreement, however, they can be modified subject to the approval of the City at the time the owner proposed to sell the units which could be sometime in the future, when standard practice for affordable housing may differ. ---PAGE BREAK--- Agenda Item No. 5(D) Key provisions of the Agreement include: • A requirement that the units remain affordable to low and moderate income households for a minimum of 55-years for rental restrictions. • If the units are sold, the resale restriction would be for 59-years with the term renewing upon resale. • If the units are sold, the City will have an option to purchase the units if the owner cannot find an eligible purchaser. The City can assign its options to an affordable housing non profit or to an eligible purchaser. The options give the City more certainty that the units will remain affordable for the term of the restriction. • If the units become for sale units and an eligible purchaser cannot be found, the unit can be sold at fair market value and the difference between fair market value and the approved below market price will be paid to the City to be utilized in its Affordable Housing program. • The affordable units are required to include a mix of unit sizes and bedrooms. • In accordance with Condition #41, six of the units will be affordable to Low Income Households and thirteen will be affordable to Moderate Income Households. Implementation of the Agreement will require staff time to monitor compliance with the provisions. Depending upon what happens in the intervening years, when this project converts to ownership, it will be the first below market units in ownership in the City’s affordable housing portfolio. The Agreement specifies that the developer pay an annual per unit fee for each rental unit to help cover the costs of monitoring compliance with the Agreement both during the rental and ownership periods. STRATEGIC PLAN CONSIDERATIONS Implementation of the Below Market Rate Agreement fulfills the Strategic Plan Goal C: Deepen a sense of place and community identity by promoting strong neighborhoods and celebrating the City’s diversity. It also fulfills Goal H2 of the City’s recently adopted 2015-2023 Housing Element (Resolution No. 2015-33). (Note: The Housing Element was adopted by Council and has been forwarded to the State Department of Housing and Community Development for certification.) GOAL H2: New Housing Development Encourage the development of housing at all income levels to meet regional housing needs allocation by facilitating housing development and minimizing the impact of potential governmental constraints on the development of housing. And, specifically, Policy H2.2: Encourage the construction of transit-oriented developments (TODs) that seek to maximize opportunities for the use of public transit and transportation corridors through high-density residential and mixed-use projects along those corridors in ---PAGE BREAK--- Agenda Item No. 5(0) accordance with the San Pablo Avenue Specific Plan and the City's Incentives Program. ENVIRONMENTAL CONSIDERATIONS The Creekside Walk project's Final Supplemental Environmental Impact Report (FSEIR) was approved on January 30, 2006 and serves as the environmental document for the project's approval. The City has further found on the basis of substantial evidence, that this action does not create substantial changes in the Project analyzed in the FSEIR that would require revisions to the FSEIR. In making this determination, the City noted that there have not been substantial changes in the circumstances under which the Project is being undertaken which would require revisions to the FSEIR and there is no new information which was not known at the time the FSEIR was certified that would show that the Project will have a significant effect that has not been previously analyzed. Further, there are no significant impacts that were identified in the FSEIR will be more severe or that mitigation measures or alternatives previously found not to be feasible would in fact now be feasible. FINANCIAL CONSIDERATIONS There are financial costs associated with implementing Condition of Approval#41. Some of those costs will be covered by the proposed fees contained within the Agreement. Other costs of implementation and monitoring will be borne by existing City staff and/or consultants paid for through the Community Development and City Housing funds (Funds 231 and 232.) No new appropriations are requested. LEGAL CONSIDERATIONS The City Attorney and affordable housing counsel have consulted with staff regarding use of the Agreement to satisfy Condition of Approval #41 and have prepared and reviewed the Agreement and associated documents to ensure that the below market rate units are rented to qualified renters and sold to qualifying purchasers when sold. Scott Hanin, City Manager Attachments: 1. Resolution Exhibit A: Below Market Rate Affordable Housing Agreement 2. Project Chronology ---PAGE BREAK--- Agenda Item No. 5(D) Attachment 1 RESOLUTION 2015-XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO AUTHORIZING THE CITY MANAGER TO EXECUTE A BELOW MARKET RATE HOUSING REGULATORY AND RESALE RESTRICTION AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS FOR THE CREEKSIDE WALK VENTURES PROJECT AND FINDING THAT THE AGREEMENT SATISFIES CONDITION #41 OF THE PROJECT CONDITIONS OF APPROVAL WHEREAS, City of El Cerrito Resolution 2006-01 certified the Final Subsequent Environmental Impact Report (FSEIR), adopted environmental findings, mitigation measures, approved the Mitigation Monitoring and Report Program and approved a use permit with conditions allowing the Creekside at El Cerrito Plaza condominium development (“Project”) at the southeast corner of El Cerrito Plaza,; and WHEREAS, Condition #41 of the Conditions of Approval specified that the developer negotiate an Owner Participation Agreement with the El Cerrito Redevelopment Agency to provide 15 percent of the units as affordable to low and moderate income households in proportion to the City’s Regional Housing Needs Allocation; and WHEREAS, the Redevelopment Agency was dissolved by the State of California and implementation of this condition is now the responsibility of the City; and WHEREAS, the 128-unit residential project was approved under the City’s Incentive Program (El Cerrito Municipal Code Chapter 19.23) which encourages project enhancements by allowing flexibility in the application of zoning requirements; and WHEREAS, the project received a reduction in parking and relief from private open space requirements due to its provision of affordable housing, proximity to the El Cerrito Plaza BART station and provision of public open space improvements, including the daylighting of Cerrito Creek along the project’s southern edge and provision of a public connection to the Ohlone Greenway; and WHEREAS, the Project will be mapped and recorded as a condominium project to eventually be able to offer both market rate and below market rate units for sale; and WHEREAS, the Project will initially be operated as a rental project offering both market rate and below market rate units as rental units; and WHEREAS, a Below Market Rate Housing Regulatory and Resale Restriction Agreement and Declaration of Restrictive Covenants (“Agreement”) has been prepared for the Project (Exhibit and ---PAGE BREAK--- Agenda Item No. 5(D) Attachment 1 WHEREAS, the Agreement requires that the onsite below market units be restricted at the affordability levels required by Condition of Approval #41 during the rental period and upon sale and requires that if and when the below market rate units are sold, the below market rate homebuyers will be required to enter into a Resale Restriction and Promissory Note with the City in accordance with the exhibits attached to the Agreement; and WHEREAS, implementation of the Agreement will require staff time to monitor compliance and the Agreement includes a provision wherein the developer agrees to pay an annual per-unit fee for each below market rate unit to help cover a portion of the costs of monitoring compliance during both the rental and ownership periods; and WHEREAS, implementation of the Agreement fulfills Strategic Plan Goal C: Deepen a sense of place and community identity by promoting strong neighborhoods and Goal H2 of the City’s Housing Element to “encourage the development of housing at all income levels to meet regional housing needs allocation by facilitating housing development;” and WHEREAS, the FSEIR for the project was approved on January 30, 2006 and serves as the environmental document for the project and the City has made finding that no additional environmental review is required in accordance with CEQA Guidelines 15162; and NOW THEREFORE, BE IT RESOLVED, the City Council of the City of El Cerrito does hereby authorize the City Manager to execute a Below Market Rate Housing Regulatory and Resale Restriction Agreement and Declaration of Restrictive Covenants for the Creekside Walk Ventures project substantially in the form on file with the City Clerk subject to such changes as are approved by the City Manager and finds that the Agreement satisfies Condition of Approval #41 for the project (Section C of Exhibit C of City Council Resolution No. 2006-01) and authorizes the City Manager or his designee to take all actions necessary in accordance with the Agreement to implement the Agreement. BE IT FURTHER RESOLVED, that this Resolution shall become effective immediately upon passage and adoption. I CERTIFY that at a regular meeting on June 2, 2015 the City Council of the City of El Cerrito passed this Resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ---PAGE BREAK--- Agenda Item No. 5(D) Attachment 1 IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on June 2015. Cheryl Morse, City Clerk APPROVED: Mark Friedman, Mayor ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 1 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of El Cerrito Community Development Department 10890 San Pablo Ave El Cerrito, CA 94530 Attn: Community Development Director No fee for recording pursuant to (Space above for Recorder's Use) APN: 504-170-022 Government Code Section 27383 BELOW MARKET RATE HOUSING REGULATORY AND RESALE RESTRICTION AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (On-site Inclusionary: Initial Rental with Condo Map and Potential Future Sale) This BELOW MARKET RATE HOUSING REGULATORY AND RESALE RESTRICTION AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS ("Agreement") is entered into as of this day of 2015, by and between the CITY OF EL CERRITO, a California municipal corporation (the "City"), and CREEKSIDE WALK VENTURES, LLC, a California limited liability company (the "Developer") (together the "Parties"), with reference to the following facts: RECITALS A. Developer is the owner of certain real property located at STREET ADDRESS TO BE INSERTED in the City, which is more particularly described in attached Exhibit A incorporated herein by this reference (the "Property"). B. Developer has applied for and received a discretionary approval from the City to construct a total of one hundred twenty-eight (128) residential units in a development known as Creekside (hereinafter referred to as the "Project") on the Property and will apply for a final subdivision map for the Property prior to obtaining certificates of occupancy for the Project. On January 30, 2006, the City Council approved the Project's land use entitlement application, including incentives to develop in the form of relief from certain development standards (the "Regulatory Incentives") subject to certain conditions of approval (the "Project Conditions"). C. The Regulatory Incentives include increased height over what is otherwise allowed on the Property, up to fifty-nine (59) feet, a reduction in parking requirements by fifteen (15) parking spaces, and an exemption from the otherwise-applicable private open space requirement. D. The Project Conditions require that fifteen percent (15%) of the one hundred twenty eight (128) residential units developed in the Project ("Units") be affordable to low and ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 2 moderate income households (the "BMR Units" or individually, the "BMR Unit"). Specifically, four and eight-tenths percent of the Units shall be affordable to low income households and ten and two-tenths percent (10.2%) of the Units shall be affordable to moderate income households. Developer intends to meet the requirements of the Project Conditions by providing nineteen (19) BMR Units, six Units affordable to low income households and thirteen (13) Units affordable to moderate income households, on the Property as part of the Project. E. Developer will apply for a final subdivision map allowing the Units in the Project to be sold individually but intends to rent all Units in the Project upon completion of construction. To provide affordable units meeting the requirements of the Project Conditions, Developer shall sell or rent, as applicable, all BMR Units to Eligible Households at Affordable Sales Prices and Affordable Rents as described in this Agreement. F. Pursuant to the Project Conditions, the Developer is required to provide the BMR Units and to execute and record this Agreement prior to issuance of any building permit for the Project. G. In consideration of certain valuable land use and economic benefits conferred by the City upon the Property, including the Regulatory Incentives, Developer, for itself, its successors, heirs, grantees and assigns, hereby agrees to comply with the Project Conditions and the terms of this Agreement as applied to the Property. H. Developer acknowledges and agrees that the Project Conditions provided adequate and proper notice pursuant to Government Code Section 66020 of Developer's right to protest any requirements for fees, dedications, reservations, and other exactions as may be included in this Agreement, that no protest in compliance with Section 66020 was made within ninety (90) days of the date that notice was given, and that the period has expired in which Developer may protest any and all fees, dedications, reservations, and other exactions as may be included in this Agreement. I. Developer has agreed that the City's approval of the Regulatory Incentives are non-monetary forms of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code and that the Project will not be subject to the provisions of the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50 et seq., the "Costa-Hawkins Act") that otherwise prohibit the City from regulating or restricting the rental rates for the BMR Units. Pursuant to Civil Code Sections 1954.52(b) and 1954.53(a)(2), the Developer has agreed to the limitations on rent contained in this Agreement in consideration for the City's approval of the Regulatory Incentives. Further, the Developer agrees that this Agreement complies with all Federal, State, and City laws and ordinances and is fully enforceable. AGREEMENT NOW, THEREFORE, it is mutually agreed by and between the Parties as follows. The Parties agree and acknowledge that the above recitals are true and accurate, and are incorporated into this Agreement by this reference. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 3 ARTICLE 1. DEFINITIONS AND EXHIBITS Section 1.1. Definitions. The following terms have the following meanings in this Agreement: "Affordable Sales Price" means the maximum allowable sales price for a BMR Unit in effect at the time of its initial (first) sale to an Eligible Household. The Affordable Sales Price is a price that includes a reasonable down payment and results in projected average housing payments during the first calendar year of a household's occupancy, including interest, principal, mortgage insurance, property taxes, homeowners' insurance, homeowners' association dues, if any, and a reasonable allowance for utilities, property maintenance and repairs, not exceeding the following: BMR Units affordable to Low Income Households: One-twelfth (1/12th) of thirty percent (30%) of seventy percent (70%) of Median Income. (ii) BMR Units affordable to Moderate Income Households: One- twelfth (1/12th) of thirty percent (30%) of one hundred ten percent (110%) of Median Income. The Director may adjust the percentage of Median Income to between eighty percent (80%) and one hundred ten percent (110%) to address major shifts in the housing market or other related economic conditions affecting the demand for BMR Units. The Affordable Sales Price shall be determined for a household size based on the number of bedrooms in the Unit plus one. The Director shall determine the sales prices of BMR Units by any reasonable method so long as average housing payments do not exceed those permitted by this subparagraph Affordable Sales Prices are adjusted annually by the Director and shall be provided to the Developer annually upon such adjustment. "Affordable Rent" means the total of payments by the Tenant of a BMR Unit for all of the following: use and occupancy of the BMR Unit and land and all facilities associated with the BMR Unit, including but not limited to parking, bicycle storage, storage lockers, and use of all common areas; any separately charged fees or service charges assessed by the Developer which are required of all tenants of Units in the Project, except security deposits; an allowance for utilities paid by the Tenant as established by the Contra Costa County Housing Authority, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service or cable TV; and any other interest, taxes, fees or charges for use of the land or associated facilities that are assessed by a public or private entity other than the Developer and paid by the Tenant. Affordable Rent shall be adjusted annually by the Director and shall be provided to the Developer annually upon such adjustment; provided, however, Affordable Rent shall not exceed the following: BMR Units affordable to Low Income Households: One-twelfth (1/12th) of thirty percent (30%) of sixty percent (60%) of Median Income. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 4 (ii) BMR Units affordable to Moderate Income Households: One- twelfth (1/12th) of thirty percent (30%) of one hundred ten percent (110%) of Median Income. The Director may adjust the percentage of Median Income to between eighty percent (80%) and one hundred ten percent (110%) to address major shifts in the housing market or other related economic conditions affecting the demand for BMR Units. "Agreement" is this Below Market Rate Housing Regulatory and Resale Restriction Agreement and Declaration of Restrictive Covenants. "BMR Units" are the nineteen (19) Units affordable to low and moderate income households. "City" is defined in the first paragraph on page 1 of this Agreement. "Developer" is defined in the first paragraph on page 1 of this Agreement. "Director" means the Community Development Director of the City or successor position. "Eligible Household" means a household which has been determined to be eligible to rent or purchase a BMR Unit, as applicable, in compliance with the Project Conditions and this Agreement. "Homebuyer/City Deed of Trust" means the deed of trust, in the form provided by the City, executed by each buyer of a BMR Unit at the time of purchase of the BMR Unit that secures the buyer's performance under the Resale Restriction and the Homebuyer/City Note. "Homebuyer/City Note" means the promissory note, in the form provided by the City and, executed by each buyer of a BMR Unit at the time of purchase of the BMR Unit. "Homebuyer Resale Restrictions" means the Resale Restrictions, the Homebuyer/City Note and the Homebuyer/City Deed of Trust, collectively. The Homebuyer Resale Restrictions shall substantially comply with the form of the documents attached as Exhibit E and incorporated herein by this reference "Household Income" means the combined gross, pre-tax income of all adult occupants of the applicant household. "Low Income Household" means a household with a Household Income at or below eighty (80%) of Median Income. "Market Rate Units" are Units in the Project that are not BMR Units. "Median Income" means the median Household Income in Contra Costa County as determined periodically by the State of California pursuant to California Code of Regulations, Title 25, Section 6932 (or successor provision), or as otherwise established by the City. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 5 "Moderate Income Household" means a household with a Household Income between eighty percent (80%) and one hundred twenty percent (120%) of Median Income. "Parties" are defined in the first paragraph on page 1 of this Agreement. "Project" is defined in Recital B. "Project Conditions" are defined in Recital B. "Property" is defined in Recital A. "Regulatory Incentives" are defined in Recital B. "Resale Restriction" means the Occupancy, Resale and Refinancing Restriction Agreement with Option to Purchase, in the form provided by the City, to be executed by each buyer of a BMR Unit and recorded against the BMR Unit at the time of purchase by the buyer. "Tenant" is a household occupying a BMR Unit pursuant to a valid lease with the Developer. "Term" shall mean the term of the rental restrictions included as part of this Agreement and shall run for a fifty-five (55) year period from the date that a certificate of occupancy is issued for the last BMR Unit to be completed unless earlier terminated pursuant to Section 5.2 of this Agreement. "Units" are defined in Recital D. "Waiting List" shall mean the list of Eligible Households qualified to purchase BMR Units who have applied to rent or purchase a BMR Unit, and which shall be maintained by the Developer. Section 1.2. Exhibits. The following exhibits are attached to this Agreement: Exhibit A Legal Description of the Property Exhibit B Map Showing Location of BMR Units and Schedule of BMR Units. Exhibit C Affordable Rents and Maximum Income Level of Tenants for BMR Units Exhibit D Affordable Sales Prices for BMR Units and Maximum Income Level of Eligible Households Exhibit E Form of Homebuyer Resale Restrictions ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 6 ARTICLE 2. CONSTRUCTION OF PROJECT AND BMR UNITS Section 2.1. Construction of BMR Units. The BMR Units shall be constructed in proportion to construction of the Market Rate Units. No certificates of occupancy or final inspections shall be issued for any Market Rate Units unless a proportional number (generally one certificate of occupancy for a BMR Unit for each seven Market-Rate Units issued certificates of occupancy) of certificates of occupancy or final inspections have been issued for BMR Units. The Director may approve a modified construction schedule if this timing requirement will create unreasonable delays in the issuance of certificates of occupancy for Market Rate Units and if the Developer provides satisfactory assurance, as approved by the Director at the Director's sole discretion, that the BMR Units will be completed. Section 2.2. Number of BMR Units. As a condition to the satisfaction of Developer's affordable housing requirements for the Project pursuant to the Project Conditions, the Developer shall provide BMR Units as follows: At initial occupancy of the Project, Developer shall rent nineteen (19) BMR Units to Low and Moderate Income Households at Affordable Rents as specified in Article 3 below. If Units in the Project are offered for sale, the nineteen (19) BMR Units shall be sold at Affordable Sales Prices to Low and Moderate Income Households at an Affordable Sales Prices for BMR Units. After the expiration of the Term, if Developer has not offered Units in the Project for sale, Developer shall have no affordable housing obligations until or unless Developer elects to offer Units in the Project for sale. Prior to the expiration of the Term, Developer shall provide all notifications required by Government Code Sections 65863.10 and 65863.11 or successor provisions or any other notification required by any state, federal, or local law. Section 2.3. Appearance, Size and Bedroom Count of BMR Units. Appearance and Use of BMR Units. The design, square footage, appearance, and general quality of the BMR Units shall be compatible with those of the Market Rate Units and consistent with the designs provided for the Project land use approvals. Developer shall allocate and assign parking spaces, bicycle storage, storage lockers, and other spaces reserved for use by individual Units to the BMR Units on the same basis as for the Market Rate Units, and Tenants of the BMR Units shall have equal access to the Project's common areas as is given to the residents of the Market -Rate Units, but any fee charged for use of common areas or for spaces reserved for individual Units shall be included in the Tenant's Rent. Once completed, the BMR Units shall not be kept vacant or used for any purpose except for residential use and, if vacant, shall be marketed and offered for rent to Eligible Households at Affordable Rents. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 7 Location and Characteristics of BMR Units. The BMR Units shall be located within the Project with the characteristics as shown in the attached Exhibit B incorporated herein by this reference. Change in Location of BMR Units. The BMR Units shown in Exhibit B shall be deemed approved by the City upon recordation of this Agreement. If, after recordation of this Agreement, Developer wants to change the location or plan type of any BMR Unit within the Project, Developer shall submit a written request for such change to the Director, who shall have sole discretion to approve or deny such request. ARTICLE 3. RENT REGULATORY PROVISIONS The provisions of this Article 3 are applicable until the earlier to occur of the following: expiration of the Term; or Developer's determination to offer Units in the Project for sale. Section 3.1. Affordability and Occupancy Covenants. Occupancy Requirements. The BMR Units shall be rented to and occupied by or, if vacant, available for occupancy by Low and Moderate Income Households. The BMR Units shall not be kept vacant or used for any purpose except for residential use and shall be offered for rent to Eligible Households at Affordable Rents. Allowable Rent. Subject to the provisions of subparagraph of this Section below, six of the BMR Units (three one-bedroom Units and three two- bedroom Units) shall be rented to Low Income Households at Affordable Rent for Low Income Households and thirteen (13) of the BMR Units (six one-bedroom Units, six two-bedroom Units, and one three-bedroom Unit) shall be rented to Moderate Income Households at Affordable Rent for Moderate Income Households. City Approval of Rents. Initial rents for all BMR Units shall be approved by the City prior to occupancy. All rent increases shall also be subject to City approval. The Developer shall not charge any fee other than rent to any Tenant of BMR Units for any housing or other services provided by Developer. Schedule of Affordable Rents. The City has provided the Developer with a schedule of Affordable Rents for the BMR Units in effect on the date of this Agreement (and subject to change annually thereafter), set forth in attached Exhibit C, incorporated herein by this reference. Increased Income of Tenants. Increase from Low Income to at or below Moderate Income. If, upon annual recertification of a Tenant's income, the Developer determines that a former Low Income Household's income has increased and exceeds the qualifying income for a Low Income Household, but does not exceed the qualifying limit for a Moderate Income Household, then, upon expiration of the Tenant's lease and after thirty (30) days written notice to the Tenant, the ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 8 Tenant's rent may be increased to Affordable Rent for Moderate Income Households and the next available BMR Unit shall be made available to a Low Income Household. (ii) Increase from Low or Moderate Income to Above Moderate Income. If, upon recertification of a Tenant's income, the Developer determines that the Tenant's income has increased and exceeds the qualifying income for a Moderate Income Household, then the Affordable Rent shall remain the rent for the unit and the Unit shall continue to qualify as a BMR Unit in the applicable income category, and the next available Unit shall be rented to a Low Income Household or a Moderate Income Household, as necessary to meet the requirements of 3.1 above, provided, however, that at such time as the next available Unit is rented to a Low Income Household or a Moderate Income Household, as the case may be, the Rent applicable to the non-qualifying Unit shall no longer be restricted by this Agreement. Section 8 Vouchers and Certificate Holders. The Developer will review applications from prospective tenants who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or any successor on the same basis as all other prospective tenants,. The Developer shall not apply selection criteria to Section 8 certificate or voucher holders that are more burdensome than criteria applied to all other prospective tenants, nor shall the Developer apply or permit the application of management policies or lease provisions with respect to the Project which have the effect of precluding occupancy of Units by such prospective tenants. Lease Provisions. The Developer shall use a form of Tenant lease approved by the City for the BMR Units. The Tenant lease shall, among other matters: provide for termination of the lease for failure: to provide any information required under this Agreement or reasonably requested by the Developer to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy of the BMR Units in accordance with this Agreement, or to qualify as a Low or Moderate Income Household as a result of any material misrepresentation made by such Tenant with respect to the income computation or certification; (ii) provide that the rent may not be raised more often than once every twelve (12) months. The Developer will provide each Tenant with at least thirty (30) days written notice of any increase in rent applicable to such Tenant, and with such further notice as may be required by subparagraph of this Section; (iii) prohibit subleasing of the BMR Unit or any portion of the Unit, contain nondiscrimination provisions, and include the Tenant's obligation to inform the Developer of any need for maintenance or repair; (iv) include reasonable rules of conduct consistent with California law; and allow termination of the tenancy only for good cause, including violation of the terms and conditions of the lease, violations of applicable federal, state, or local law, or other good cause. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 9 Security Deposits. Any security deposits collected by Developer or Developer's agent shall be kept separate and apart from all other funds in a trust account with a depository insured by the Federal Deposit Insurance Corporation or other comparable federal deposit insurance program and shall be held and disbursed in accordance with California law. The balance in the trust account shall at all times equal or exceed the aggregate of all outstanding obligations, plus accrued interest thereon. Agreement to Limitation on Rents. The Developer hereby covenants that the City's approval of the Regulatory Incentives is a non-monetary form of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code. The Developer further covenants that it has agreed to limit rents of the BMR Units under Civil Code Sections 1954.52(b) and 1954.53(a)(2), as provided in this Agreement and the Project Conditions, in consideration for the Regulatory Incentives. The Costa-Hawkins Act provides that, where a developer has received such assistance, certain provisions of the Costa-Hawkins Act do not apply if a developer has so agreed by contract. The Developer hereby agrees that any BMR Units provided pursuant to this Agreement are not subject to Civil Code Section 1954.52(a) or any other provision of the Costa-Hawkins Act inconsistent with controls on rents. The Developer further covenants that this Agreement complies with all Federal, State, and City laws and ordinances and that the terms of this Agreement are fully enforceable. Section 3.2. Income Certification and Reporting. Notification to City. At least sixty (60) days before starting to market the BMR Units, the Developer shall notify City of the availability of the BMR Units and provide to the City its management policies and the proposed form of lease and proposed rents for the BMR Units for City review and approval. Income Certification. The Developer will obtain, complete and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications for each Tenant renting any of the BMR Units. Developer shall verify that the income statement provided by an applicant or Tenant is accurate by taking two or more of the following steps as a part of the verification process: obtain a minimum of the three most current pay stubs for all adults age eighteen (18) or older; obtain an income tax return for the most recent tax year; (iii) conduct a credit agency or similar search; obtain the three most current savings and checking account bank statements; obtain an income verification form from the applicant's current employer; obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or if the applicant is unemployed and has no such tax return, obtain another form of independent verification. Copies of Tenant income certifications shall be made available to the City upon request. Reports to City. Annual Report. The Developer shall submit to the City on April 1st of each year, a report in a form acceptable to the City verifying compliance by Developer with the terms of this Agreement and certified as correct by the Developer under penalty of perjury. The annual report shall include without limitation the following information: ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 10 a. Certifications of eligibility for all Tenants of BMR Units at the time of initial occupancy and upon the yearly anniversary of their continuing tenancies. Such certification shall include: i. Verified income statements. Developer shall retain in the Tenant's file all verifications of Tenant's income obtained as required in subparagraph of this Section. ii. Number of persons in each BMR Unit. b. Certification of the amount of rent charged for the year for all BMR Units. c. Other information reasonably required by the City. (ii) Other Reports. Within fifteen (15) days after receipt of a written request, Developer shall provide any other information or completed forms requested by the City to ensure compliance with this Agreement. Section 3.3. Management of Property and Property Maintenance. Management Responsibilities. The Developer is responsible for all management functions with respect to the Project, including, without limitation, the certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City shall have no responsibility over management of the Project. Developer shall retain a resident manager. Approval of Management Policies. The Developer shall submit its written management policies with respect to the Project to the City for its review and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement. Property Maintenance. The Developer agrees to maintain all of the BMR Units and all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials, and in accordance with the following maintenance conditions: The City places prime importance on quality maintenance to ensure that all developments within the City which include affordable housing units are not allowed to deteriorate due to below-average maintenance. The Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair. (ii) In the event that the Developer breaches any of the covenants contained in this Section 3.3 and such default continues for a period of ten (10) days after written ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 11 notice from the City with respect to graffiti, debris, waste material, and general maintenance or thirty (30) days after written notice from the City with respect to landscaping and building improvements, then the City, in addition to whatever other remedy it may have at law or in equity, shall have the right (but is not required) to enter upon the Property and perform or cause to be performed all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, as specified in a correction plan approved by the City, and to attach a lien on the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, plus an administrative charge equal to fifteen percent (15%) of the amount of such expenditures, which amounts shall be paid by the Developer to the City upon demand. Taxes and Assessments. Developer shall pay all real and personal property taxes, assessments, if any, and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event Developer exercises its right to contest any tax, assessment, or charge against it, Developer, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest. If Developer cures any breach of this Section 3.3, there shall be no ongoing breach or default under this Agreement. Insurance. The Developer shall maintain a standard all risk property insurance policy equal to the replacement value of the Project (adjusted at least every five years by appraisal, if requested by City), naming the City as an additional insured and loss payee. If the Project is damaged or destroyed, and the Developer elects not to rebuild or repair the Project, the Developer shall pay the City the portion of any insurance proceeds received by the Developer for such destruction or damage to the BMR Units which is in excess of the Affordable Sales Price for the BMR Units. ARTICLE 4. SALE OF BMR UNITS Section 4.1. Decision of Developer to Sell Units in the Project. In the event that the Developer determines to offer the Units in the Project for sale, the following shall apply. Notification to City. Developer shall notify City within five business days of submitting an application to the Department of Real Estate for a public report to offer Units in the Project for sale. Developer shall also provide the City with a copy of Developer's application for a public report. At least one hundred twenty (120) days before offering a BMR Unit for sale, the Developer shall provide the City with written notice of the proposed sale of the BMR Unit including the Unit size (square footage and number of bedrooms), lot/building/unit number, street address, Developer name and Tract number, and required income level of the Unit, using the Notice of Intent to Sell form provided by the City. City shall notify Developer ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 12 within thirty (30) days of the receipt of Developer's notification of the Affordable Sales Prices currently applicable to each BMR Unit. Sale During Term; Notification to Tenants. If the Developer determines to offer Units in the Project for sale prior to expiration of the Term, Developer shall provide all notices to Tenants of the BMR Units required by state law. Each BMR Unit shall first be offered for sale to the existing Tenant at the Affordable Sales Price. For a period of one hundred twenty (120) days after the BMR Units are offered for sale, Tenants of BMR Units shall have the right of first refusal to purchase their BMR Unit upon the same, or more favorable, terms and conditions as the BMR Unit will be offered to the general public. Developer shall not market BMR Units during the Term until the right of first refusal period has expired. Section 4.2. Sale by Developer to Eligible Households; Waiting List. Developer shall sell the BMR Units to Eligible Households at prices not in excess of the then-current Affordable Sales Prices provided by the City in compliance with the Project Conditions and this Agreement. As specified in Section 2.2, BMR Units shall be sold at an Affordable Sales Price. Subject to the City's written approval, the Developer shall verify buyer's eligibility pursuant to the Project Conditions and this Agreement before Developer may accept a buyer's offer to purchase. Developer agrees to pay a transaction fee of Two Hundred Fifty Dollars ($250), plus legal fees and outside consultant costs plus thirty percent (30%) in compliance with the City's then-applicable Master Fee Schedule, per sale of each BMR Unit, or any such fee for the reasonable cost of administering this Agreement as may be adopted by resolution of the City Council. The Developer shall notify potential purchasers on the Waiting List of any BMR Unit availability, direct buyers to view the available BMR Unit, and solicit eligibility applications from prospective purchasers. Eligible Households shall submit purchase offers directly to Developer, and Developer shall accept offers to purchase in the order received, provided that such offers include a letter from the City certifying buyer's eligibility, a valid check for the required good faith deposit, and a preliminary first mortgage loan approval. Developer shall conduct any additional screening of applicants deemed necessary and not in violation of fair housing laws. Developer shall actively market the BMR Units, openly and in the same general manner as the Market-Rate Units, allow prospective buyers to view the BMR Units, model units or floor plans, disclosure documents, and any other relevant sales materials, as may be available. Developer's sales agents shall provide the same general quality of customer service to the BMR Unit buyers as provided to market-rate buyers, shall display information about the availability of the BMR Units in a readily noticeable manner in the sales office and/or Project sales website, shall disclose the BMR Unit restrictions to any prospective buyers in a timely manner, and shall submit its determination of the eligibility of any prospective buyers of the BMR Units to the City for verification in a timely fashion. Selected applicants shall be responsible for obtaining their own financing for the BMR Units. Developer shall comply with applicable fair housing laws in the marketing and sale of the BMR Units. Purchase contracts between Developer and Eligible Households shall include requirements that buyers execute documents for the benefit of the City as described in Section 4.4 below. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 13 The Developer shall be independently responsible to make good faith efforts to market and sell the BMR Units in compliance with this Agreement, and shall cooperate with City in good faith in the effort to sell the BMR Units to Eligible Households in a timely manner. Once Developer has accepted an offer from an Eligible Household or existing Tenant of a BMR Unit, Developer shall allow at least ninety (90) days from the date escrow has been opened for escrow to close, whether to the original Eligible Household or to a subsequent City-approved Eligible Household. If an Eligible Household fails to close escrow within the applicable ninety (90)-day period, Developer shall notify City of any intent to dissolve escrow at least ten (10) business days prior to dissolution. In the event of a dissolution, Developer shall resume marketing the BMR Unit until it accepts an offer from a second Eligible Household. Developer shall allow at least ninety (90) days from the date the second escrow has been opened for escrow to close. If a second Eligible Household fails to close escrow within the applicable ninety (90)-day period, Developer shall notify City of any intent to dissolve escrow at least ten (10) business days prior to dissolution. In the event of a second dissolution, Developer shall allow the City to purchase the BMR Unit at the Affordable Sales Price or to assign its right to a designee for an additional period of one hundred eighty (180) business days commencing from the date of dissolution of escrow. If escrow has not closed within one hundred eighty (180) business days of dissolution, Developer may sell the BMR Unit at its fair market value and pay to the City an amount equal to the difference between the actual contract sale price of the BMR Unit and the Affordable Sales Price. If Developer has not received any purchase offer from an Eligible Household for a BMR Unit within one hundred eighty (180) days after the BMR Unit has been offered for sale, the Developer shall provide a one hundred eighty (180) days' notice to the City and shall satisfy any further conditions that may be reasonably required by the City, including but not limited to, further efforts to find an Eligible Household, additional marketing by the Developer, and/or sale to the City or its designee, which may include a non-profit affordable housing organization or an Eligible Household. If City or its designee has not submitted a bona fide offer to purchase the BMR Unit at the Affordable Sales Price within forty-five (45) days of receiving Developer's notice, and/or if escrow has not closed on the BMR Unit sale within an additional sixty (60) days from date of Developer's acceptance of such offer under this Section, Developer may sell the BMR Unit at its fair market value and pay to the City an amount equal to the difference between the actual contract sale price and the Affordable Sales Price. If a BMR Unit is sold at fair market value as specified in subparagraphs or above, such BMR Unit shall not be subject to any requirements of this Agreement following City's receipt of applicable payment. Upon receipt of such payment, City shall provide Developer with a recordable document releasing the Unit from this Agreement. Section 4.3. Affordable Sales Prices. Pursuant to the Project Conditions, the BMR Units shall be sold to Eligible Households at sales prices that do not exceed Affordable Sales Prices established by the City. Affordable Sales Prices for the BMR Units in effect on the date of this Agreement (and subject to change annually thereafter) are shown in Exhibit D attached hereto and incorporated herein. Developer acknowledges and agrees that Affordable Sales Prices are determined based on current income levels in Contra Costa County, changes to which are ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 14 published annually by the State of California, Department of Housing and Community Development. Developer agrees that the Affordable Sales Prices of the BMR Units shall be calculated by the City in its reasonable exercise of discretion in interpreting the requirements of the Project Conditions and this Agreement, and that the City's calculation of Affordable Sales Prices shall be determinative and binding upon Developer; provided, however, the City shall calculate the Affordable Sales Price assuming a five percent down payment and FHA mortgage terms. The Affordable Sales Price established for each BMR Unit by the City shall be the absolute maximum price that the Developer or any other person may charge for the BMR Unit or may receive as compensation for the BMR Unit. The Developer or other seller may not charge or receive any additional amount for a BMR Unit regardless of whether the additional amount is for options, upgrades or additional improvements to the Unit, paid through escrow or outside of escrow, paid prior to, after or as part of the purchase escrow or paid in cash or in kind, unless a reasonable accommodation is approved by the City for buyers requiring options or accommodations related to a disability, in which any additional cost shall be paid through escrow with prior written approval by City. Section 4.4. Homebuyer Documents and Security Instruments. Prior to the sale of each BMR Unit, Developer shall ensure that: The Eligible Household and the City execute a Resale Restriction. The Resale Restriction shall be recorded against the BMR Unit at close of escrow on the sale to the Eligible Household. The Resale Restriction shall be recorded immediately following the Grant Deed to the Eligible Household, unless otherwise approved in writing by the City. The Eligible Household signs a Homebuyer/City Note that obligates the Eligible Household to pay the City any excess sales proceeds or excess rents received by the Eligible Household if the Eligible Household fails to comply with the Resale Restriction on rental or resale of the BMR Unit. The Eligible Household signs a Homebuyer/City Deed of Trust to secure performance of the Eligible Household's covenants under the Resale Restriction and payment of the amounts due under the Homebuyer/City Note if the Eligible Household fails to comply with the terms of the Resale Restriction. The Homebuyer/City Deed of Trust shall be recorded against the BMR Unit, subordinate only to the Resale Restriction and the lien for the first mortgage loan obtained by the Eligible Household to finance the purchase of the BMR Unit (and second mortgage loan if such loan is provided by a public agency which requires such subordination and with prior written approval from City). Section 4.5. City Approval of Documents. The following documents, to be approved in writing by the City, shall be used in connection with the development and sale of the BMR Units. Approval of the following documents by the City shall be required prior to the Developer's offering the BMR Units for sale: A schedule of Affordable Sales Prices for the BMR Units (to be prepared by the City, following Developer's request). ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 15 Form of Purchase and Sale Agreements for sale of the BMR Units (to be prepared by Developer and submitted to the City for review and approval for consistency with this Agreement). Form of Resale Restriction, Homebuyer/City Note, and Homebuyer/City Deed of Trust, and Form of Notice of Intent to Sell (to be prepared by the City, following Developer's request). The preliminary Department of Real Estate public report for the Project, including the BMR Units (to be obtained by the Developer and submitted to the City). Form escrow instructions for sale of the BMR Units (to be prepared by Developer and submitted to the City for review and approval). Closing costs and title insurance costs shall be shared equally between Developer and buyer. Developer may not charge buyers of BMR Units any fees that are not charged to purchasers of Market Rate Units. Section 4.6. Compliance Reports, Inspections, Monitoring. Within five days following the sale of any BMR Unit by the Developer to an Eligible Household, Developer shall forward, or shall cause escrow officer to forward to the City, copies of the buyer's and seller's settlement statement and all closing documents, including Resale Restriction, Homebuyer/City Note, and Homebuyer/City Deed of Trust executed in connection with the sale. Section 4.7. Homeowners' Association Dues. Developer agrees not to impose any covenants, conditions and restrictions that would increase the proportion of the homeowners' association dues or assessments payable by any BMR Unit compared to that of the Market Rate Units, nor to make any subsequent amendments to the covenants, conditions and restrictions to that effect. This provision shall create a right of judicial enforcement by the City or the owner of any affected BMR Unit. ARTICLE 5. ENFORCEMENT Section 5.1. Covenants Running with the Land. The City and Developer hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall apply to and bind Developer and its heirs, executors, administrators, successors, transferees, and assignees having or acquiring any right, title or interest in or to any part of the Property and shall run with and burden such portions of the Property until terminated in accordance with Section 5.2. Until all or portions of the Property are expressly released from the burdens of this Agreement, each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof shall be held conclusively to have been executed, delivered, and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument. In the event of foreclosure or transfer by deed-in-lieu of all or any portion of the Property prior to completion and sale of all of the BMR Units, title to all or any portion of the Property shall be taken subject to this Agreement. Developer acknowledges that compliance with this Agreement is a requirement of the Project Conditions, and that no event of foreclosure or trustee's sale may remove these requirements from the Property. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 16 Section 5.2. Release of Property From Agreement. Upon sale of one hundred percent (100%) of the BMR Units and execution of the Homebuyer Resale Restrictions in compliance with this Agreement, the entire Property shall be released from the burdens of this Agreement. Prior to the sale of all BMR Units, upon sale of each of the Units in the Project to an individual buyer, City shall execute and record a release of each such Unit from the burdens of this Agreement if at the time the Developer is in compliance with all terms of this Agreement, including, without limitation, Developer's obligations to market and sell BMR Units concurrently with Market Rate Units. Section 5.3. Default. Failure of the Developer to satisfy any of Developer's obligations under the terms of this Agreement within thirty (30) days after the delivery of a notice of default from the City will constitute a default under this Agreement and a failure to satisfy the Project Conditions. In addition to remedies for breach of this Agreement, the City may exercise any and all remedies available to it under the Subdivision Map Act or otherwise, including but not limited to: withholding, conditioning, suspending or revoking any permit, license, subdivision approval or map, or other entitlement for the Project, including without limitation final inspections for occupancy and/or certificates of occupancy; instituting against the Developer, or other parties, a civil action for declaratory relief, injunction or any other equitable relief, or relief at law, including without limitation an action to rescind a transaction and/or to require repayment of any funds received in connection with such a violation; where one or more persons have received financial benefit as a result of violation of this Agreement or of any requirement imposed under the Project Conditions, the City may assess, and institute legal action to recover as necessary, a penalty in any amount up to and including the amount of financial benefit received, in addition to recovery of the benefit received; prosecuting a misdemeanor against any person who has allowed to be sold or rented a BMR Unit at a price or rent, as applicable, exceeding the maximum allowed under this Agreement or to a household that is not an Eligible Household, or who has otherwise violated the Project Conditions, or any other agreement, restriction or requirement authorized or imposed under the Project Conditions; or requiring the Developer or his/her successors in interest to the Property to pay the City rent for a BMR Unit from the date of any unauthorized use of the BMR Unit; and any other means authorized under the City of El Cerrito Municipal Code. Section 5.4. Remedies Cumulative. No right, power, or remedy given to the City by the terms of this Agreement or the Project Conditions is intended to be exclusive of any other right, ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 17 power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such document, or by any statute or ordinance or otherwise against Developer and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. Section 5.5. Attorney's Fees and Costs. The City shall be entitled to receive from the Developer or any person violating the requirements of this Agreement, in addition to any remedy otherwise available under this Agreement or at law or equity, whether or not litigation is instituted, the costs of enforcing this Agreement, including without limitation reasonable attorneys' fees and the costs of City staff time. ARTICLE 6. GENERAL PROVISIONS Section 6.1. Appointment of Other Agencies. At its sole discretion, the City may designate, appoint or contract with any other public agency, for-profit or non-profit organization to perform some or all of the City's obligations under this Agreement. Section 6.2. Records. Developer shall retain all records related to compliance with obligations under this Agreement for a period not less than five years from the date of origination of such records, and make them available to City employees or others designated by the City for inspection and copying on five business days' written notice. The City shall be entitled to monitor compliance with this Agreement and the Project Conditions, and Developer shall cooperate with City monitoring, including obtaining Tenant rent and income verification upon request of the City. Developer agrees to pay an annual monitoring fee of Fifty Dollars ($50) per BMR Unit per year prior to the sale of the BMR Units or any fee for the reasonable cost of monitoring this Agreement as may be adopted by resolution of the City Council. Section 6.3. Nondiscrimination. All of the BMR Units shall be available for occupancy on a continuous basis to members of the general public. The Developer shall not give preference to any particular class or group of persons in renting or selling the BMR Units, except to the extent that the BMR Units are required to be rented and sold to Eligible Households; further provided, there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, source of income SSI), age (except for lawful senior housing), ancestry, or disability, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall the Developer or any person claiming under or through the Developer, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of Tenants of any Unit or in connection with the employment of persons for the construction, operation and management of the Project. Section 6.4. Hold Harmless. Developer will indemnify and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 18 capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating in any manner to the Project, the BMR Units, or Developer's performance or non-performance under this Agreement, including claims pursuant to California Labor Code Section 1720 et seq., and shall protect and defend Indemnitees, and any of them with respect thereto, except to the extent arising from the gross negligence or willful misconduct of the City. The provisions of this Section shall survive expiration or other termination of this Agreement or any release of part or all of the Property from the burdens of this Agreement, and the provisions of this Section shall remain in full force and effect. Section 6.5. Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the Party to receive such notice at the addressed set forth below: TO THE CITY: City of El Cerrito Community Development Department 10890 San Pablo Ave El Cerrito, CA 94530 Attn: Community Development Director TO THE DEVELOPER: Creekside Walk Ventures, LLC, a Limited Liability Company 12424 Wilshire Blvd, Suite 670 Los Angeles, CA 90025 Attn: Philip Ram (310) 979-3210 Any Party may change the address to which notices are to be sent by notifying the other Parties of the new address, in the manner set forth above. Section 6.6. Integrated Agreement. This Agreement constitutes the entire Agreement between the Parties and no modification hereof shall be binding unless reduced to writing and signed by the Parties hereto. Section 6.7. Each Party's Role in Drafting the Agreement. Each Party to this Agreement has had an opportunity to review the Agreement, confer with legal counsel regarding the meaning of the Agreement, and negotiate revisions to the Agreement. Accordingly, neither Party shall rely upon Civil Code Section 1654 in order to interpret any uncertainty in the meaning of the Agreement. Section 6.8. Amendment of Agreement. Major amendments to this Agreement, shall be subject to the review and approval of the decision-making body which approved the Project. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 19 Minor amendments to this Agreement may be approved by the Director. Upon approval, a new Agreement containing the amendments shall be executed and recorded. Section 6.9. No Claims. Nothing contained in this Agreement shall create or justify any claim against the City by any person that Developer may have employed or with whom Developer may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the Property or the construction of the Project or construction of the BMR Units. Section 6.10. Applicable Law. This Agreement shall be governed by California law. Venue shall be the County of Contra Costa. Section 6.11. Waivers. Any waiver by the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or default of Developer or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Developer to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or omission by Developer shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the City's written consent to future waivers. Section 6.12. Title of Parts and Sections. Any titles of the sections, subsections, or subparagraphs of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. Section 6.13. Multiple Originals; Counterpart. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. Section 6.14. Recording of Agreement. The Developer shall cause this Agreement to be recorded against the Property in the Official Records of the County of Contra Costa. Section 6.15. Severability. In the event any limitation, condition, restriction, covenant, or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless be and remain in full force and effect. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 20 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day and year first above written. DEVELOPER: Creekside Walk Ventures, LLC, a California limited liability company By: Ravello California, a California Corporation Its: Managing Member CITY: City of El Cerrito, a California municipal corporation By: Its: APPROVED AS TO FORM: ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 21 319\31\1706348.5 STATE OF CALIFORNIA ) ) COUNTY OF ) On before me, Notary Public, 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. Name: Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 22 319\31\1706348.5 STATE OF CALIFORNIA ) ) COUNTY OF ) On before me, Notary Public, 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. Name: Notary Public ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 A-1 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY TO BE INSERTED ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 B-1 EXHIBIT B SCHEDULE OF AFFORDABLE UNITS AND MAP SHOWING LOCATION OF AFFORDABLE UNITS Schedule of BMR Units to be Provided within the Project BMR Units to be Provided Upon Initial Occupancy; to be Sold as BMR Units if Units in the Project Are Offered for Sale * *See Section 2.2. If Developer offers Units in the Project for sale, all the BMR Units shall be sold at Affordable Sales Prices. ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 B-2 Map of BMR Units to be Provided within the Project ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 B-3 Map of BMR Units to be Provided within the Project (continued) ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 B-4 Map of BMR Units to be Provided within the Project (continued) ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 C-1 EXHIBIT C MAXIMUM INITIAL AFFORDABLE RENTS FOR BMR UNITS AND MAXIMUM INCOME LEVEL OF TENANTS (Provided for reference. These limits are adjusted annually, as determined and provided by the City. Developer shall apply and Project shall be subject to the Affordable Rents and income limits in effect at the time Developer submits marketing plan to City.) A. Maximum Affordable Rents (as of April 15, 2015). Number of Bedrooms Maximum Low Income Household Affordable Rent* Maximum Moderate Income Household Affordable Rent* 1 $1,043 $1,978 2 $1,157 $2,209 3 N/A $2,445 * Assumes the following utility allowances provided by the Contra Costa Housing Authority are deducted from the gross rent: gas heating/water heating; electric cooking; other electric; metered water; and air conditioning. The allowances total $79/1‐bedroom unit; $105/2‐bedroom unit; and $126/3‐bedroom unit. B. Maximum Household Income of Tenants (Income Limits as of April 15, 2015) Assumed Household Size (Number of Persons) Maximum Gross Annual Low Income Household Income Maximum Gross Annual Moderate Income Household Income 1 $50,150 $78,550 2 $57,300 $89,750 3 $64,450 $101,000 4 $71,600 $112,200 5 $77,350 $121,200 6 $83,100 $130,150 7 $88,800 $139,150 ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 D-1 EXHIBIT D MAXIMUM INITIAL SALES PRICES FOR BMR UNITS AND MAXIMUM INCOME LEVEL OF ELIGIBLE HOUSEHOLDS (Provided for reference. These limits are adjusted annually, as determined and provided by the City. Developer shall apply and Project shall be subject to the BMR sales prices and income limits in effect at the time Developer submits Notice of Intent to Sell to City) A. Affordable Sales Prices (as of April 15, 2015). Number of Bedrooms Maximum Low Income Household BMR Sales Price Maximum Moderate Income Household BMR Sales Price 1 $154,700 $341,100 2 $174,800 $384,400 3 N/A $428,500 * Assumes a 5% down payment and an interest rate based on current FHA mortgages plus PMI. B. Maximum Household Income of Eligible Households (Income Limits as of April 15, 2015). Assumed Household Size (Number of Persons) Maximum Gross Annual Low Income Household Income Maximum Gross Annual Moderate Income Household Income 1 $50,150 $78,550 2 $57,300 $89,750 3 $64,450 $101,000 4 $71,600 $112,200 5 $77,350 $121,200 6 $83,100 $130,150 7 $88,800 $139,150 ---PAGE BREAK--- Agenda Item No. 5(D) Resolution No. 2015-XX Exhibit A 319\31\1706348.5 E-1 EXHIBIT E FORM OF HOMEBUYER RESALE RESTRICTIONS • Resale Restriction • Homebuyer/City Note • and Homebuyer/City Deed of Trust] ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 1 NO RECORDING FEE PURSUANT TO GOVERNMENT CODE SECTION 27383 RECORDING REQUESTED BY Title Company Name Escrow # AND WHEN RECORDED MAIL TO City of El Cerrito Community Development Department 10890 San Pablo Ave El Cerrito, CA 94530 Attn: Community Development Director SPACE ABOVE THIS LINE FOR RECORDER'S USE OCCUPANCY, RESALE, AND REFINANCING RESTRICTION AGREEMENT AND OPTION TO PURCHASE AT RESTRICTED PRICE CITY OF EL CERRITO BELOW MARKET RATE PURCHASE PROGRAM Owner: Property Address: Affordable Housing Cost: $ NOTE: THIS AGREEMENT GRANTS THE CITY AN OPTION TO BUY YOUR PROPERTY AT A RESTRICTED PRICE THAT MAY BE BELOW THE MARKET VALUE. This Occupancy, Resale, and Refinancing Restriction Agreement and Option to Purchase at a Restricted Price (the "Agreement") is entered into as of this day of 201_, by and between the City of El Cerrito, a California municipal corporation (the "City") and ("Owner"). ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 2 RECITALS A. To further its goal of creating affordable home ownership opportunities for low- income and moderate-income persons and families, the City has required certain developments to provide for the sale of some homes at a price below fair market value (the "BMR Program"). B. As part of the BMR Program, the City and a California (the "Developer") entered into an affordable housing agreement (the "Affordable Housing Agreement"), which was required by the Conditions of Approval for Developer's application for land use entitlements as approved by the City Council on January 30, 2006. C. The Affordable Housing Agreement required the Developer and future purchasers to sell certain homes, including the Property as defined below, to low and moderate income households at an affordable price. D. Owner intends to purchase the property located at which is more particularly described in Exhibit A attached hereto and incorporated by this reference (the "Property") at a cost affordable to Owner and below the unrestricted fair market value of the Property, as shown on page 1 of this Agreement (the "Affordable Housing Cost"). The Property has been made affordable to Owner through the terms of the BMR Program. The Owner has agreed to execute and comply with this Agreement in consideration of the Owner's purchase of the Property at the Affordable Housing Cost. E. Owner is an eligible [low or moderate] income purchaser, intends to purchase the Property, intends to live in the Property as an owner-occupant, and agrees to maintain the Property as Owner's principal residence (an "Eligible Purchaser"). F. The purpose of this Agreement is to place occupancy, refinancing, and resale controls on the Property and to require the payment of any excess proceeds of sale or excess rental proceeds to the City. This Agreement also provides the City an option to purchase the Property at a restricted price. The occupancy, refinancing, and resale controls prevent the Owner and subsequent purchasers from using the Property for purposes incompatible with the BMR Program and realizing unwarranted gains from sale of the Property at an unrestricted price. The terms and conditions of this Agreement are intended to provide the necessary use and resale restrictions to ensure that the Property is used, maintained, and preserved as housing affordable to eligible low and moderate-income purchasers. G. The Owner is receiving the following purchase money loan(s): Name of Lender Amount ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 3 The purchase money loans listed in this Recital are collectively the "First Lender Loan." The lender(s) of the First Lender Loan is the "First Lender." The First Lender Loan is secured by a deed of trust executed by the Owner in favor of the First Lender and recorded in the County of Contra Costa concurrently with this Agreement (the "First Lender Deed of Trust"). H. The Owner's obligations to pay the City any excess sale proceeds and excess rents according to this Agreement are evidenced by a promissory note (the "City Note"). This Agreement and the City Note shall be secured by a deed of trust and security agreement on the Property (the "City Deed of Trust"). I. The Property constitutes a valuable community resource by providing decent, safe, and sanitary housing to persons and families of low and moderate incomes who otherwise would be unable to afford such housing. To protect and preserve this resource it is necessary, proper, and in the public interest for the City to administer the occupancy, financing, and resale controls by means of this Agreement. NOW, THEREFORE, in consideration of the benefits received by the Owner and the public purposes served by the BMR Program, the Owner and the City agree as follows: AGREEMENT The foregoing recitals are hereby incorporated by reference and made part of this Agreement. 1. DEFINITIONS AND EXHIBITS The following terms are specially defined for this Agreement and their definitions can be found in the sections indicated below: A. "Advances" – Section 7.F B. "Affordable Housing Agreement" - Recital B C. "Affordable Housing Cost" – Recital D D. "Affordable Rent" – Section 3.A E. "Agreement" - First sentence on page 1 F. "BMR Program" – Recital A G. "City" – First sentence of the Agreement on page 1 H. "City Deed of Trust" – Recital H I. "City Note" – Recital H J. "City Response Notice" - Section 7.C ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 4 K. "Declaration of Default" – Section 12.C L. "Default" – Section 12.A M. "Designated Purchaser" – Section 6.B N. "Developer" – Recital B O. "Eligible Capital Improvements" - Section 8.A P. "Eligible Purchaser" – Recital E Q. "Excess Rents" – Section 3.B R. "Excess Sales Proceeds" - Section 10.A S. "Fair Market Value" - Section 8.B T. "First Lender" - Recital G U. "First Lender Deed of Trust" - Recital G V. "First Lender Loan" - Recital G W. "HUD" is the United States Department of Housing and Urban Development. X. "Inheriting Owner" – Section 5.C Y. "Median Income" means the median Household Income in Contra Costa County as determined periodically by the State of California pursuant to California Code of Regulations, Title 25, Section 6932 (or successor provision), or as otherwise established by the City. Z. "Option" – Section 6.A AA. "Permitted Transfer" – Section 5.B BB. "Property" - Recital D CC. "Indexed Price" - Section 8.A DD. "Maximum Resale Price" - Section 8 EE. "Owner" - First sentence of the Agreement on Page 1 FF. "Owner's Notice of Intent to Transfer" - Section 7.A GG. "Permitted Encumbrance Amount" – Section 11.B ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 5 HH. "Term" – Section 17 II. "Transfer" - Section 5.A JJ. "VA" is the United States Veterans Administration. The following exhibits are attached to this Agreement: Exhibit A: Legal Description of the Property Exhibit B: Form of Owner Occupancy Certification Exhibit C: Form of Owner's Notice of Intent to Transfer Exhibit D: Form of Owner Request for City Subordination to Refinance First Lender Loan 2. OWNER CERTIFICATIONS; OWNER OCCUPANCY REQUIREMENT The Owner certifies that the financial and other information previously provided in order to qualify to purchase the Property is true and correct as of the date first written above. The Owner shall occupy the Property as the Owner's principal place of residence for the Term of this Agreement. The Owner shall be considered as occupying the Property as the Owner's principal place of residence if the Owner is living in the unit for at least ten (10) months out of each calendar year, maintains a valid homeowner's property tax exemption, and provides reasonable requested documentation to verify occupancy. A. Annual Certification of Owner Occupancy. On or before February 1 of each calendar year, the Owner, under penalty of perjury, shall provide an annual written certification to the City, in the form shown on Exhibit B of this Agreement, that the Owner is occupying the Property as his or her principal place of residence, unless the City has approved a temporary waiver of the occupancy requirement in writing as provided in Section 2.B; or the City has approved rental of the Property in writing as provided in Section 3 below. The City may request additional documentation from the Owner(s) to demonstrate that the Property is Owner's principal place of residence. The Owner agrees to fully cooperate with the City in providing all information requested by the City to assist the City in monitoring Owner's compliance with this Agreement. B. Temporary Waiver of Occupancy Requirement. The City may, in its sole discretion, grant a temporary waiver of this occupancy requirement if all of the following conditions are met: the City has determined that the Owner will incur substantial hardship if he or she is not permitted to temporarily vacate the Property; the Owner provides a written request to the City for a temporary waiver of the occupancy requirement before vacating the Property; and the term of the occupancy waiver is not greater than one year. A temporary vacancy shall only be considered approved if the City approves the request in writing. 3. RENTAL OR LEASING OF PROPERTY A. Prohibition on Renting or Leasing the Property. The Owner shall not rent or lease the Property except with the prior express written consent of the City. The City may, in its sole discretion, approve the rental or leasing of the Property if all of the following conditions are met: ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 6 the Owner demonstrates to the City, in the City's sole discretion, that the Owner will incur substantial hardship if he or she is not permitted to rent or lease the Property; the term of the rental or lease is not greater than twelve (12) months and cannot be extended without the City's written approval; the lease requires the tenant to maintain the Property and surrounding property in good condition and prohibits subleasing; the rent for the Property does not exceed the lesser of: thirty percent (30%) of the income of the tenant household that is renting the Property, or (ii) the Owner's cost of principal and interest on the First Lender Loan, and property insurance, property taxes, and homeowners association dues, if any, associated with Property (the lesser rent is the "Affordable Rent"); and the City certifies that the tenant's income meets the income limits, as adjusted by household size, that are applicable to the Property. B. Payment of Excess Rents. Any lease of the Property in violation of this Agreement is prohibited. The Owner agrees that, in the event the Owner rents or leases the Property in violation of this Section 3, any rents paid to the Owner by the tenant or lessee in excess of the Affordable Rent ("Excess Rents") shall be due and payable to the City immediately upon receipt thereof by the Owner. Such Excess Rents shall be considered a recourse debt of the Owner to the City, which the City may collect by legal action against the Owner, by foreclosure under the City Deed of Trust, and/or by exercising the Option. 4. MAINTENANCE AND INSURANCE REQUIREMENTS A. Maintenance. The Owner shall maintain the Property, including landscaping, in good repair and in a neat, clean and orderly condition and will not commit waste or permit deterioration of the Property. B. Insurance. The Owner shall maintain a standard all risk property insurance policy equal to the replacement value of the Property (adjusted every five years by appraisal, if requested by City), naming the City as an additional insured. Additional insurance requirements are set forth in the City Deed of Trust. 5. RESTRICTIONS ON RESALE AND TRANSFER OF THE PROPERTY A. Transfer. Any Transfer of the Property will be subject to the provisions of this Agreement including, without limitation, the Option described in Section 6 below. "Transfer" means any sale, assignment or transfer, voluntary or involuntary, of any interest in the Property, including, but not limited to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest (unless approved as provided in Section 3 of this Agreement), an interest evidenced by a land contract by which possession of the Property is transferred and Owner retains title, or a deed of trust. Any Transfer without satisfaction of the provisions of this Agreement is prohibited and shall constitute a Default. B. Permitted Transfers. Notwithstanding Section 5.A, the following forms of Transfer shall be considered a "Permitted Transfer" and shall not constitute a Default, but all such transferees shall continue to be bound by this Agreement: To a spouse or domestic partner; ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 7 Between spouses or domestic partners as part of a dissolution proceeding or divorce; To an inter vivos revocable trust in which Owner is the beneficiary, trustor, and trustee subject to the provisions of Section 5.E; By operation of law on the death of a joint tenant; A refinancing of the First Lender Loan in accordance with Section 11.C of this Agreement, or Execution of a deed of trust subordinate to the City Deed of Trust in accordance with Section 11.D of this Agreement. However, Owner shall provide written notice of all Permitted Transfers to the City under Section 5.D, and all owners of the Property shall continue to occupy the Property as his or her principal place of residence. C. Inheritance. In the event a Transfer occurs by devise or inheritance due to death of the Owner, the administrator of the Owner's estate, the trustee of Owner's trust, or the person inheriting the Property shall provide written notice to the City of the Owner's death within thirty (30) days of the date of death and the following procedures shall apply: If the person inheriting the Property was previously a co-owner who was income qualified, or who obtained title through a Permitted Transfer, then the inheritance is permitted. All other persons inheriting the Property shall be an "Inheriting Owner." The Inheriting Owner shall provide the City with income and other information, to be verified by the City, so that the City may determine if the Inheriting Owner qualifies as an Eligible Purchaser. If the City determines that the Inheriting Owner is an Eligible Purchaser, such Inheriting Owner shall be permitted to take ownership of the Property provided that the Inheriting Owner shall enter into a new agreement, note, and deed of trust, in a form determined by the City, for a new Term and comply with all obligations under those documents, including occupancy of the Property as his or her principal place of residence. If the Inheriting Owner fails to qualify as an Eligible Purchaser or does not provide the City with information to determine if the Inheriting Owner is an Eligible Purchaser, he or she shall be required to Transfer the Property to an Eligible Purchaser at a price not exceeding the Maximum Resale Price; provided, that if the Inheriting Owner is a minor child, such Inheriting Owner and his or her legal guardian may occupy the Property for the time period prescribed by Probate Code Section 6500 without the City determining that the legal guardian of any such Inheriting Owner is an eligible purchaser. Failure of an Inheriting Owner to follow the procedures and file the notices described in this Section 5.C shall constitute a Default under this Agreement and the City may then exercise any of the remedies available to it, including, without limitation, exercise of the Option. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 8 D. Notice of Permitted Transfer. Owner shall provide notice to the City of any transfers described in Sections 5.B and 5.C of this Agreement within thirty (30) days of the date of transfer. E. Transfer to Inter Vivos Revocable Trust. With the prior written approval of the City, the Property may be transferred to an inter vivos revocable trust where the Owner is the beneficiary, trustor, and trustee of the trust; except that if the Owner lacks capacity and is subject to a conservatorship, a third party trustee may be named. The trust must contain language reasonably acceptable to the City describing the restrictions of this Agreement. Transfer of the Property to any other form of trust is prohibited and shall constitute a Default. 6. GRANT OF OPTION TO PURCHASE; ASSIGNMENT OF OPTION BY CITY A. Grant of Option. In consideration of the economic benefits received by the Owner resulting from purchase and ownership of the Property at the Affordable Housing Cost, Owner hereby grants and gives to the City a right to purchase all of Owner's right, title, and interest in and to the Property ("Option") for the Maximum Resale Price, calculated as provided in Section 8 below, upon the occurrence of either of the following: The City receives an Owner's Notice of Intent to Transfer (defined in Section 7.A of this Agreement); or The City declares a Default as provided in Section 12 of this Agreement. B. Assignment of Option. The City may, instead of purchasing the Property itself, assign the Option to another public agency, a nonprofit corporation, or to an Eligible Purchaser (each a "Designated Purchaser"). C. Exercise of Option. The City acknowledges and agrees that the Option shall only be exercised for the purpose of retaining the Property as an affordable housing unit as provided in Section 13. D. Option Term. The term of the Option extends for the Term of this Agreement. The City's rights to exercise the Option shall survive any Transfer of the Property by the Owner in violation of this Agreement. As long as the Option has not been expressly abandoned, any actual or attempted Transfer of the Property in violation of the terms and conditions of this Agreement shall be a Default and shall be voidable at the election of the City. E. HUD-Insured and VA-Guaranteed Mortgages. Notwithstanding the above, if Owner has acquired the Property by a mortgage insured by the Secretary of the United States Department of Housing and Urban Development ("HUD") or guaranteed by the Secretary of the Department of Veteran's Affairs and a notice of default under such mortgage has been recorded pursuant to California Civil Code Section 2924 (or successor provisions), this Option shall automatically terminate if title to the Property is transferred to HUD or the VA by foreclosure or deed-in-lieu of foreclosure under such mortgage, or if the insured mortgage is assigned to the Secretary of HUD or VA . ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 9 7. NOTICE OF INTENDED SALE OR TRANSFER A. Transfer Notice. In the event the Owner intends to Transfer or vacate the Property, the Owner shall give the City written notice of such intent (the "Owner's Notice of Intent to Transfer"), in the form shown in Exhibit C attached to this Agreement. The Owner shall give the City the Owner's Notice of Intent to Transfer prior to notifying real estate brokers or lenders of Owner's intent to Transfer the Property and prior to listing of the Property on the Multiple Listing Service. The Owner's Notice of Intent to Transfer shall be sent to the City by certified mail, return receipt requested at the address provided in Section 26 of this Agreement. B. Real Estate Broker. The Owner should not contract with a real estate broker to sell the Property until the Owner has received the City Response Notice as provided in Section 7.B below, as the services of a broker will not be required if the City exercises the Option to purchase the Property. C. City Response Notice. The City shall respond in writing (the "City Response Notice") to the Owner's Notice of Intent to Transfer within thirty (30) days of City receipt of a complete Owner's Notice of Intent to Transfer. The City Response Notice shall inform the Owner of the City's election to proceed under one of the following two alternatives: City Exercise of Option. The City Response Notice may notify the Owner that the City elects to exercise the Option, or assign the Option to a Designated Purchaser, and shall include the City's calculation of the Maximum Resale Price to be paid by the City as provided in Section 8 below. The City may choose to assign the Option to a Designated Purchaser at any time after the City has decided to exercise the Option but before the close of escrow. City Determination Not to Exercise Option. Alternatively, the City Response Notice may notify the Owner that the City elects not to exercise the Option. In this event, the Owner may sell the Property subject to the provisions of Section 9. D. Preparation for Sale Procedure. Following delivery to the City of the Owner's Notice of Intent to Transfer, the Owner shall prepare the Property for sale, as follows: within thirty (30) days of delivery of the Owner's Notice of Intent to Transfer, the Owner shall obtain and deliver to the City a current written report of inspection of the Property by a licensed structural pest control operator, and within the sooner of sixty (60) days from the date of delivery of the Owner's Notice of Intent to Transfer, or prior to close of escrow on the Transfer, the Owner shall repair all Section 1 deficiencies noted in the pest report including damage caused by infestation or infection by wood-destroying pests; within thirty (30) days of the date of the Owner's Notice of Intent to Transfer, the Owner shall allow the City to inspect the Property to determine its physical condition, and, if requested by the City, within the sooner of sixty (60) days from the date of the inspection report, or prior to close of escrow on the Transfer, the Owner shall repair all damage and deferred maintenance noted in the inspection report; ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 10 if the Property is vacant, the Owner shall maintain the Property, including the exterior landscaping, in good condition and shall maintain utility connections until the close of escrow on the Transfer; and in the event of City purchase of the Property, the Owner shall permit a final walk-through of the Property by the City or the Designated Purchaser in the final three days prior to close of escrow on the Transfer. The Owner shall cooperate with the City throughout the process for preparing the Property for sale described in this Section 7.D in providing all information requested by the City to assist the City in preparing the Property for sale. E. Escrow. If the City Response Notice notifies the Owner that the City intends to exercise the Option, the City or the Designated Purchaser shall open an escrow account for its purchase of the Property. Close of escrow shall take place on such date which is the later to occur of the following: ninety (90) days after the date of the City Response Notice, or ten (10) days after Owner has done all acts and executed all documents required for close of escrow. F. Deposit of Funds Into Escrow. Prior to the close of escrow, the City or the Designated Purchaser shall ensure that funds are deposited to pay the Maximum Resale Price of the Property. All Advances previously paid by the City shall be repaid from escrow. "Advances" include any payment by the City of costs including, but not limited to, principal, interest, taxes, assessments, insurance premiums, homeowners' fees, and associated late fees, costs, interest, attorneys' fees, costs of investigation (including but not limited to costs of investigating compliance with the owner occupancy requirements of Section pest inspections, resale inspections, and other expenses related to the Property, which Owner has failed to pay or has permitted to become delinquent or which are required to remove liens and encumbrances as provided in Section 7.G below or which are otherwise due to the City. Closing costs and title insurance shall be paid by City or its Designated Purchaser and Owner pursuant to the custom and practice in the County of Contra Costa at the time of the opening of escrow, or as may be provided otherwise by mutual agreement. Owner agrees to do all acts and execute all documents necessary to enable the close of escrow and Transfer of the Property to the City or its Designated Purchaser. G. Removal of Exceptions to Title. The Owner shall convey title to the Property at the close of escrow free and clear of any mortgage, lien, or other encumbrance, unless approved in advance in writing by the City or its Designated Purchaser. If the amounts deposited into escrow by the City or its Designated Purchaser are not sufficient to satisfy all liens and encumbrances recorded against the Property, then the Owner shall deposit into escrow the additional sums that are required to remove the liens and encumbrances. H. No Obligation. In no event shall the City become liable or obligated in any manner to Owner by reason of the assignment of the Option, nor shall the City be in any way liable or obligated to Owner for any failure of the Designated Purchaser to consummate a purchase of the Property or to comply with the terms of this Option, or any escrow instructions or agreement for the purchase of the Property. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 11 8. DETERMINATION OF MAXIMUM RESALE PRICE If the City exercises the Option, the maximum sales price (the "Maximum Resale Price") that the Owner shall receive for purchase of the Property shall be the LESSER of the Indexed Price or the Fair Market Value. A. Indexed Price. The "Indexed Price" of the Property is total of the Affordable Housing Cost of the Property at the time of purchase by the Owner, increased by the percentage of increase in the Median Income from the date of the original purchase of the Property by the Owner to the date of receipt by the City of the Owner's Notice of Intent to Transfer, and where applicable, adjustments made as provided in Section 8.A below. Where applicable, the Indexed Price shall include an upward adjustment reflecting the depreciated value of any substantial structural or permanent fixed improvements which the Owner has made to the Property after Owner's purchase of the Property. No such adjustment shall be made except for improvements made or installed by the Owner which conformed with applicable building codes at the time of installation and whose initial costs, as verified by invoices, receipts, or similar forms of documentation, exceed $2,000 or one percent of the purchase price paid for the Property by the Owner, whichever is greater. Improvements meeting the above requirements are referred to in this Agreement as "Eligible Capital Improvements." Items necessary to put the Property into sellable condition shall be determined by the City, and may include cleaning, painting and making needed structural, mechanical, electrical, plumbing and fixed appliance repairs and other deferred maintenance repairs. B. Fair Market Value. In certain circumstances it may be necessary to determine the fair market value of the Property without taking account of the resale restrictions imposed by this Agreement (the "Fair Market Value"). These circumstances include: where the parties wish to determine if the Indexed Price exceeds the Fair Market Value in order to determine the Maximum Resale Price as provided in Section 8; and where the Owner is selling the Property to a purchaser at an unrestricted price as provided in Section 9. If it is necessary to determine the Fair Market Value of the Property, it shall be determined by a certified MAI or other qualified real estate appraiser approved in advance by the City. If possible, the appraisal shall be based upon the sales prices of comparable properties sold in the market area during the preceding three (3)-month period. The cost of the appraisal shall be shared equally by the City and the Owner, unless the appraisal is obtained from a new purchaser, or unless the appraisal is necessary because the Owner wishes to refinance the First Lender Loan or take out a new subordinate loan as provided in Section 11, in which event the Owner shall pay the cost of the appraisal. Nothing in this Section shall preclude the Owner and the City from establishing the Fair Market Value of the Property by mutual agreement in lieu of an appraisal. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 12 9. SALE OF HOME BY OWNER IF CITY DOES NOT EXERCISE OPTION TO PURCHASE In the event the City Response Notice notifies the Owner that the City does not want to exercise the Option or assign it to a Designated Purchaser, the Owner may elect to sell the Property to an Eligible Purchaser for the Maximum Resale Price. The Owner shall be independently responsible to make good faith efforts to market and sell the Property to an Eligible Purchaser and shall cooperate with City in good faith in the effort to sell the Property to an Eligible Purchaser for the Maximum Resale Price. The City shall verify buyer's eligibility before Owner may accept a buyer's offer to purchase. Owner shall comply with applicable fair housing laws in the marketing and sale of the Property. A purchase contract between Owner and an Eligible Purchaser shall include requirements that buyers execute documents provided by and for the benefit of the City to maintain the Property in the BMR Program. If Owner has not received any purchase offer from an Eligible Purchaser for the Property within one hundred eighty (180) days after the Property has been offered for sale, the Owner shall provide a one hundred eighty (180) days' notice to the City and shall satisfy any further conditions that may be reasonably required by the City, including but not limited to, further efforts to find an Eligible Purchaser and/or sale to the City or its designee, which may include a non-profit affordable housing organization or an Eligible Purchaser. If City or its designee has not submitted a bona fide offer to purchase the Property at the Maximum Resale Price within forty-five (45) days of receiving Owner's notice, and/or if escrow has not closed on the Property sale within an additional sixty (60) days from date of Owner's acceptance of such offer under this Section, Owner may sell the Property to a purchaser at unrestricted fair market value. The City shall reconvey the liens of this Agreement and the City Deed of Trust and cancel the City Note, provided that the Owner pays the Excess Sales Proceeds to the City as provided in Section 10 below and provide the City with the following documentation associated with such a Transfer: A. The name and address of the purchaser; B. The final sales contract and all other related documents which shall set forth all the terms of the sale of the Property, including a HUD-1 Settlement Statement. Said documents shall include at least the following terms: the sales price; and the price to be paid by the purchaser for the Owner's personal property, if any, for the services of the Owner, if any, and any credits, allowances or other consideration, if any. C. A written certification, from the Owner and the purchaser in a form acceptable to the City, that the sale shall be closed in accordance with the terms of the sales contract and other documents submitted to and approved by the City. The certification shall also provide that neither the purchaser nor any other party has paid or will pay to the Owner, and the Owner has not received and will not receive from the purchaser or any other party, money or other consideration, including personal property, in addition to what is set forth in the sales contract and documents submitted to the City. The written certification shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certification submitted to the City, the City shall have the right to foreclose on the Property or file an action at law or in equity as may be appropriate. In any event, any costs, liabilities or obligations incurred by the Owner and the purchaser for the ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 13 return of any moneys paid or received in violation of this Agreement or for any costs and legal expenses, shall be borne by the Owner and/or the purchaser and they shall hold the City harmless and reimburse their expenses, legal fees and costs for any action they reasonably take in good faith in enforcing the terms of this Agreement. D. A copy of the MAI or other qualified appraisal for the Property. E. Upon the close of the proposed sale, a copy of the final sales contract, HUD-1 Settlement Statement, escrow instructions, and any other documents which the City may reasonably request. 10. PAYMENT TO CITY OF EXCESS SALES PROCEEDS A. Excess Sale Proceeds. If the Owner Transfers the Property at an unrestricted price as provided in Section 9 above, or if the Owner makes a Transfer in violation of this Agreement, the Owner shall pay the Excess Sales Proceeds to the City. For purposes of this Agreement, "Excess Sales Proceeds" shall mean the amount by which the gross sales proceeds received by the Owner from the new purchaser exceed the Maximum Resale Price for the Property. However, if the Owner Transfers the Property as provided in Section 9 and is otherwise not in Default under this Agreement, the amount of Excess Sales Proceeds due to the City shall be reduced by the amount of any actual closing costs and real estate commission paid by the Owner at Transfer, up to a maximum of six percent of gross sales proceeds. B. The amount of any Excess Sales Proceeds shall be a debt of the Owner to the City, evidenced by this Agreement, secured by the City Deed of Trust. The Owner acknowledges that the City shall have no obligation to cause release or reconveyance of this Agreement or of the City Deed of Trust until the Excess Sales Proceeds are paid to the City. The City shall utilize the Excess Sales Proceeds for City affordable housing programs. The Owner and the City acknowledge that the formula for calculation of the amount of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to receive the same net sales proceeds from sale of the Property at an unrestricted price to an purchaser in conformance with this Agreement as the Owner would receive from sale of the Property to the City or to an eligible purchaser at the Maximum Resale Price. 11. REFINANCE OF FIRST LENDER LOAN; NEW SUBORDINATE LOANS A. City Consent Required. The Owner covenants and agrees not to place any additional mortgage or deed of trust, including any line of credit, on the Property without obtaining prior written consent of the City. A form for use by the Owner in requesting City subordination to a refinanced First Lender loan or requesting consent for a subordinate loan is attached as Exhibit D to this Agreement. B. Permitted Encumbrance Amount. The "Permitted Encumbrance Amount", is defined as the greater of: ninety percent (90%) of the Maximum Resale Price, or (ii) the remaining balance of the original First Lender Loan; provided, however, that the City may, in its sole discretion, permit a greater encumbrance amount if a greater encumbrance amount would prevent substantial hardship to the Owner. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 14 C. Refinance. The City shall permit a prepayment and refinance of the First Lender Loan and shall agree to subordinate this Agreement and the City Deed of Trust to the refinanced First Lender Loan provided that: Following such refinance, the principal amount of all debt secured by the Property does not exceed the Permitted Encumbrance Amount; The refinanced First Lender Loan is a fully amortized fixed rate loan, is fully documented, has a term not exceeding thirty (30) years, and requires no balloon payments; If the remaining balance of the original First Lender Loan exceeds ninety percent (90%) of the Maximum Resale Price, then the refinanced First Lender Loan reduces the Owner's principal and interest payments; and The total new housing cost to the Owner after the refinance does not exceed the Owner's ability to pay. D. Subordinate Loans. Subordinate loans, including second or junior loans and equity lines of credit, are not permitted except as expressly approved by the City in writing. The City shall permit only those subordinate loans that conform to the following: Following the addition of the subordinate loan (calculated assuming a maximum permitted draw on any equity line of credit), the principal amount of all debt secured by the Property shall not exceed the greater of: seventy-five percent (75%) of the Maximum Resale Price, or (ii) the remaining balance of the original First Lender Loan; provided, however, that the City may, in its sole discretion, permit a greater encumbrance amount if a greater encumbrance amount would prevent substantial hardship to the Owner. The subordinate loan is a fully amortized fixed rate loan, is fully documented, has a term not exceeding thirty (30) years, and requires no balloon payments; and The total new housing cost to the Owner after the addition of the subordinate loan does not exceed the Owner's ability to pay. E. Request for Notice of Default. As a condition for subordination of the City Deed of Trust or approval of a subordinate loan, a request for notice of default and notice of sale regarding the refinanced First Lender Loan or subordinate loan shall be recorded in the Office of the Recorder of the County of Contra Costa for the benefit of the City. F. Purpose of Restrictions. The City and the Owner agree that the requirements of this Section 11 are necessary to ensure the continued affordability of the Property to Owner and to minimize the risk of loss of the Property by Owner through default and foreclosure of mortgage loans. Owner further acknowledges that violation of the provisions of this Section 11 shall constitute a Default under this Agreement. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 15 12. DEFAULTS A. Events Constituting Default. The following events shall constitute a "Default" by the Owner under this Agreement: The City determines that the Owner has made a misrepresentation to obtain the benefits of purchase of the Property or in connection with its obligations under this Agreement; The Owner fails to owner occupy the Property, as required by Section 2 above; The Owner rents or leases the Property, not in compliance with Section 3 above; The Owner actually Transfers, or attempts to Transfer, the Property in violation of this Agreement; The Owner fails to provide information to the City necessary to determine Owner's compliance with the requirements of this Agreement. Judicial foreclosure proceedings are commenced regarding the Property; A notice of default is issued under any financing secured by the Property, or the City receives any other notice of default as provided in Civil Code Section 2924b, or the Owner is in default on any other financing secured by the Property. The Owner executes any deed in lieu of foreclosure transferring ownership of the Property; A lien is recorded against the Property other than the lien of the First Lender Loan, the City Loan, or a loan approved by the City as provided in Section 11.D; or (10) The Owner otherwise fails to comply with the requirements of this Agreement, the City Note, or the City Deed of Trust. B. Remedies. Upon a declaration of Default by the City under this Agreement, the City may exercise any remedies at law or in equity, including without limitation any or all of the following, none of which shall be an exclusive remedy: Declare all sums due under the City Note immediately due and payable without further demand; Declare a default under the City Note; Invoke the power of sale under the City Deed of Trust; Apply to a court of competent jurisdiction for such relief at law or in equity as may be appropriate; ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 16 Take such enforcement action as is authorized under the El Cerrito Municipal Code; Declare a Default under the City Note and City Deed of Trust and pursue all City remedies under the City Deed of Trust; and Exercise the Option as provided in Section 13 of this Agreement. C. Notice and Cure. The City may give written notice to the Owner specifying the nature of any violation. If the violation is not corrected to the satisfaction of City within a reasonable period of time, not longer than thirty (30) days after the date the notice is mailed, or within such further time as the City may provide at its sole discretion, the City may declare a Default under this Agreement by written notice to Owner ("Declaration of Default"). However, if the Owner is in default under any financing secured by the Property, the City may send a Declaration of Default upon receipt of any notice given to the City as provided in Civil Code Section 2924b or through any other means and may exercise its remedies upon Default as provided in this Section and Section 13. The City shall notify the First Lender in the manner set forth in Section 26 of this Agreement if the City has sent a Declaration of Default under this Agreement or declared a Default under the City Note or the City Deed of Trust. D. Recordation of Requests for Notice. Requests for notice of default and any notice of sale under any deed of trust or mortgage with power of sale encumbering the Property shall be recorded by the City in the Office of the Recorder of the County of Contra Costa for the benefit of the City. 13. EXERCISE OF OPTION UPON DEFAULT A. Exercise of Option. The City shall have thirty (30) days after issuing a Declaration of Default to notify Owner and First Lender of its intent to exercise the Option. Not later than ninety (90) days after the City has notified the Owner of its intent to exercise the Option under this Section, Owner and the City shall complete all acts and execute all documents necessary to enable the close of escrow and transfer of the Property to the City, including but not limited to removal of all exceptions to title as required by Section 7.G. If Owner has cured all Defaults prior to close of escrow, City and Owner, at City's sole discretion, may by written agreement determine that City shall not exercise the Option. B. Court Order. If there is a stay or injunction imposed by court order precluding the City from exercising the Option within the applicable time period, then the running of such period shall be tolled until such time as the stay is lifted or injunction dissolved and the City has been given written notice thereof, at which time the period for exercise of the Option shall again begin to run. C. Right of City to Reinstate Mortgages. In the event of default and foreclosure, the City shall have the same right as the Owner to cure defaults and redeem the Property prior to the ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 17 foreclosure sale and shall be deemed to be Owner's successor in interest under California Civil Code Section 2924c (or successor sections) solely for the purposes of reinstating any mortgage on the Property that has led to the recordation of the notice of default. As Owner's deemed successor in interest, the City shall be entitled, but not required, to pay all amounts of principal, interest, taxes, assessments, insurance premiums, advances, costs, attorneys' fees and expenses required to cure the default. Nothing herein shall be construed as creating any obligation of the City to cure any such default, nor shall this right to cure and redeem operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage. 14. NONLIABILITY OF THE CITY A. No Obligation to Exercise Option. The City shall have no obligation to exercise any Option granted it under this Agreement. In no event shall the City become in any way liable or obligated to the Owner or any successor-in-interest to the Owner by reason of the Option, nor shall the City be in any way obligated or liable to the Owner or any successor-in-interest to the Owner for any failure to exercise the Option. B. Nonliability for Negligence, Loss, or Damage. Owner acknowledges, understands and agrees that the relationship between the City and the Owner is solely that of a property owner and the administrator of an affordable housing program, and the City does not assume any responsibility for or duty to the Owner to select, review, inspect, supervise, pass judgment on, or inform Owner of the quality, adequacy or suitability of the Property or any other matter. The City owes no duty of care to protect Owner against negligent, faulty, inadequate or defective building or construction or any condition of the Property, and the Owner agrees that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Property and will hold the City harmless from any liability, loss or damage for these things. C. Indemnity. Owner agrees to defend, indemnify, and hold the City and its officers, employees, agents, board members and/or council members harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys' fees that the City may incur as a direct or indirect consequence of: Owner's Default, performance, or failure to perform any obligations as and when required by this Agreement or the City Deed of Trust; or the failure at any time of any of Owner's representations to the City to be true and correct. 15. RESTRICTIONS ON FORECLOSURE PROCEEDS If a creditor acquires title to the Property through a deed in lieu of foreclosure, a trustee's deed upon sale, or otherwise, the Owner shall not be entitled to the proceeds of sale to the extent that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited to the creditor exceed the Maximum Resale Price. The Owner shall instruct the holder of such excess proceeds to pay such proceeds to the City (in addition to any other amounts due the City from the Owner under this Agreement), in consideration of the benefits received by the Owner through purchase of the Property at Affordable Housing Cost. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 18 16. RESTRICTION ON INSURANCE PROCEEDS If the Property is damaged or destroyed and the Owner elects not to rebuild or repair the Property, the Owner shall pay the City the portion of any insurance proceeds received by the Owner for such destruction or damage which is in excess of the Maximum Resale Price calculated as provided in Section 8 above. 17. TERM OF AGREEMENT All the provisions of this Agreement, including the benefits and burdens, run with the Property and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to the City and its successors, until the earlier of fifty-nine (59) years from the date of purchase of the Property by Owner; (ii) the date of Transfer of the Property to an Eligible Purchaser or an Inheriting Owner where the Eligible Purchaser or Inheriting Owner enters into a new agreement, note, and deed of trust in a form determined by the City; or (iii) the date of Transfer of the Property to another purchaser at an unrestricted price and payment of all principal and interest due under the City Note, including but not limited to payment of all Excess Sales Proceeds (the "Term"). 18. SUPERIORITY OF AGREEMENT The Owner covenants that he or she has not, and will not, execute any other agreement with provisions contradictory to or in opposition to the provisions of this Agreement, and that, in any event, this Agreement is controlling as to the rights and obligations between and among the Owner, the City and their respective successors. 19. SUBORDINATION Notwithstanding any other provision herein, the provisions of this Agreement and the City Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the First Lender in the event of default under the First Lender Deed of Trust by the Owner. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this Agreement and the City Deed of Trust shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquires title to the Property pursuant to a deed or assignment in lieu of foreclosure, this Agreement and the City Deed of Trust shall automatically terminate upon such acquisition of title, only if the City has been given written notice of default under such First Lender Deed of Trust with a sixty (60)-day cure period (which requirement shall be satisfied by recordation of a notice of default under California Civil Code Section 2924) and (ii) the City shall not have cured the default within such sixty (60)-day period or commenced to cure and given its firm commitment to complete the cure in form and substance acceptable to the First Lender. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 19 20. NONDISCRIMINATION The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Property. The foregoing covenant shall run with the land. 21. RIGHTS OF HUD, CALHFA AND VA Notwithstanding any other provision in this Agreement to the contrary, this Agreement shall not diminish or affect the rights of HUD, the California Housing Finance Agency ("CalHFA") or the VA under the First Lender Deed of Trust insured by HUD, held by CalHFA, or guaranteed by the VA and utilized to purchase the Property or recorded against the Property in compliance with Section 11 above. Notwithstanding any other provision in this Agreement to the contrary, all of the provisions of this Agreement shall terminate and have no further force and effect if the title is acquired by HUD, CalHFA, or the VA, or another party upon foreclosure of a deed of trust securing a loan insured by HUD, held by CalHFA, or guaranteed by the VA. 22. HUD FORBEARANCE RELIEF Notwithstanding any other provision of this Agreement, the Option as provided in Section 6 above shall not be exercised by the City when a deed of trust insured by HUD is secured by the Property, and: the owner is undergoing consideration by HUD for assignment forbearance relief; or (ii) the owner is undergoing consideration for relief under HUD's Temporary Mortgage Assistance Payment ("TMAP") program. 23. INVALID PROVISIONS If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 24. CONTROLLING LAW The terms of this Agreement shall be interpreted under the laws of the State of California. The venue for any legal action pertaining to this Agreement shall be Contra Costa County, California. 25. NO WAIVER No delay or omission in the exercise of any right or remedy of City upon any default by Owner shall impair such right or remedy or be construed as a waiver. The City's failure to insist in any one or more instance upon the strict observance of the terms of this Agreement shall not ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 20 be considered a waiver of the City's right thereafter to enforce the provisions of the Agreement. The City shall not waive its rights to enforce any provision of this Agreement unless it does so in writing, signed by an authorized agent of the City. 26. NOTICES All notices required herein shall be sent by certified mail, return receipt requested, express delivery service with a delivery receipt, or personal delivery with a delivery receipt and shall be deemed to be effective as of the date received, the date delivery was refused, or the date returned as undeliverable as indicated on the return receipt as follows: To the Owner: AT THE ADDRESS OF THE PROPERTY. To the City: City of El Cerrito Community Development Department 10890 San Pablo Ave El Cerrito, CA 94530 Attn: Community Development Director To the First Lender: [To be inserted] The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this Section. 27. CITY APPROVAL The City Manager or his or her designee is authorized on behalf of the City to deliver any approvals or consents that this Agreement requires. The City, in its sole discretion, may assign its duties under this Agreement to a third party. 28. INTERPRETATION OF AGREEMENT The terms of this Agreement shall be interpreted so as to avoid speculation on the Property and to insure to the extent possible that its sales price and mortgage payment remain affordable to persons and families of lower or moderate income, as applicable. 29. COVENANTS RUNNING WITH THE LAND A. Owner hereby subjects the Property to the covenants and restrictions set forth in this Agreement. Owner hereby declares its express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon all parties having any interest in the Property throughout the Term of this Agreement. Each ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 21 and every contract, deed, lease or other instrument covering, conveying or otherwise transferring the Property or any interest therein, as the case may be, shall conclusively be held to have been executed, delivered and accepted subject to this Agreement regardless of whether the other party or parties to such contract have actual knowledge of this Agreement. B. The Owner and the City hereby declare their understanding and intent that: the covenants and restrictions contained in this Agreement shall be construed as covenants running with the land as provided in California Civil Code Section 1468 and not as conditions which might result in forfeiture of title by Owner; (ii) the burden of the covenants and restrictions set forth in this Agreement touch and concern the Property in that the Owner's legal interest in the Property may be rendered less valuable thereby; and (iii) the benefit of the covenants and restrictions set forth in this Agreement touch and concern the land by enhancing and increasing the enjoyment and use of the Property by eligible purchasers, the intended beneficiaries of such covenants and restrictions. C. All covenants and restrictions contained herein without regard to technical classification or designation shall be binding upon Owner for the benefit of the City and eligible purchasers and such covenants and restrictions shall run in favor of such parties for the entire period during which such covenants and restrictions shall be in force and effect, without regard to whether the City is an owner of any land or interest therein to which such covenants and restrictions relate. 30. SPECIFIC PERFORMANCE Owner acknowledges that any breach in Owner's performance of Owner's obligations under this Agreement shall cause irreparable harm to the City. Owner agrees that the City is entitled to equitable relief in the form of specific performance upon its exercise of the Option, and that an award of damages shall not be adequate to compensate the City for Owner's failure to perform according to the terms of this Agreement. 31. OWNER'S ACKNOWLEDGEMENT OF RESALE RESTRICTION Owner acknowledges and agrees that: A. This Agreement places certain restrictions and limits the price for which Owner may sell the Property. Owner may not enjoy the same economic or other benefits from owning the Property that Owner would enjoy if this Agreement did not exist. B. Absent the provisions of this Agreement, the Property could not be made available to eligible purchasers, such as the Owner, at an affordable price. C. Owner understands all of the provisions of this Agreement. Owner agrees to the provisions of this Agreement with the understanding that this Agreement will remain in full force and effect as to the Property throughout the Term of this Agreement. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 22 D. OWNER UNDERSTANDS THAT THE DETERMINATION OF THE MAXIMUM RESALE PRICE OF THE PROPERTY CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INCREASES IN THE CONSUMER PRICE INDEX, WHICH CANNOT BE ACCURATELY PREDICTED, AND THAT THE SALES PRICE MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR PROPERTY WHICH IS NOT ENCUMBERED BY THIS AGREEMENT. OWNER FURTHER ACKNOWLEDGES THAT IN SETTING THE SALES PRICE OF THE PROPERTY, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO ELIGIBLE PURCHASERS AT AFFORDABLE HOUSING COST. THE MAXIMUM RESALE PRICE WILL ALMOST CERTAINLY BE LESS THAN THAT OF OTHER SIMILAR PROPERTIES THAT HAVE NO RESTRICTIONS. Initialed by Owner(s) [Signatures Follow on Subsequent Page] ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 23 IN WITNESS WHEREOF, the parties have executed this Agreement on or as of the date first written above. CITY: OWNER: CITY OF EL CERRITO, a California municipal corporation (Type Name and Title) (Type Name) ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 STATE OF CALIFORNIA ) ) COUNTY OF ) On before me, Notary Public, 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. Name: Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 STATE OF CALIFORNIA ) ) COUNTY OF ) On before me, Notary Public, 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. Name: Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 A-1 EXHIBIT A Legal Description of the Property ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 B-1 EXHIBIT B Form of Owner Occupancy Certification To: City of El Cerrito ("City") From: ("Owner") Property Address: ("Property") Date: By signature below, I [insert name or names of Owner] hereby certify to the City under penalty of perjury that I/we occupy the Property located at [insert address] (the "Property") as my/our principal place of residence and that I/we have lived in and physically occupied the Property for [insert number] months of the calendar year [insert previous calendar year]. Attached to this letter is a copy of my homeowners property tax exemption showing my place of residence. The Owner hereby certifies that the above information is true and correct and this Owner Occupancy Certification is signed under penalty of perjury on 20__. Owner [type name] Owner [type name] Due Date: February 1 of each calendar year. Attach copy of property tax bill showing address of Property. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 C-1 EXHIBIT C Form of Owner's Notice of Intent to Transfer To: City of El Cerrito ("City") From: ("Owner") Property Address: ("Property") Date: Please be notified that the Owner intends to transfer the Property listed above. A. The following information is provided to the City as provided in Section 7 of the Resale Agreement: 1. Address of Property: 2. Date Owner purchased Property: 3. Affordable Housing Cost when Property was purchased: 4. Date Owner intends to vacate Property: 5. Date Property will be placed on market: 6. Name and phone number of person for City to contact to schedule inspection: and (name) (phone number) B. As required by Section 9 of the Resale Restriction Agreement, the following documents are attached to this Notice: 1. Copy of HUD-1 Settlement Statement from Owner's purchase of the Property 2. If Owner has made Eligible Capital Improvements to the Property that Owner wishes to include in the City's calculation of Indexed Price, check box below ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 C-2 □ Yes, I have made Eligible Capital Improvements as provided in Section 8.A.2 of the Resale Agreement. They are [describe improvements] and were completed on [insert date]. I attach the following documents to this letter: a. copy of City letter granting prior approval of these improvements; b. evidence of cost of these improvements; c. appraisal showing value added to Property by the improvements. C. I have not yet listed the Property for sale with a multiple listing service, or contacted a real estate broker or financial institution. I agree to prepare the Property for sale 1. obtaining a pest control report within thirty (30) days of the date of this notice, 2. repairing all damage noted in the pest report within the sooner of: sixty (60) days from the date of this notice, or (ii) two weeks prior to close of escrow or the transfer of the Property, 3. allowing the City to inspect the Property within thirty (30) days of this notice, 4. if requested by the City following the City's inspection, I will obtain a home inspection report from a licensed home inspector, 5. maintaining utility connections until the Property is transferred, 6. permitting a walk through by the City prior to close of escrow or the transfer. This Owner's Notice of Intent to Transfer is certified by Owner to be true and correct and is signed on [insert date] under penalty of perjury. Owner Owner ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707090.2 D-1 EXHIBIT D Form of Owner Request for City Subordination to Refinance First Lender Loan or for Subordinate Loan To: City of El Cerrito ("City") From: ("Owner") Property Address: ("Property") Date: The Owner hereby requests the City to approve the Owner's refinance of the existing First Lender Loan on the Property [provide information for all First Lender Loans if more than one First Lender Loan] and/or approval of a subordinate loan. The Owner provides the following information which it certifies to be true and correct: 1. Affordable Housing Cost at time of purchase: 2. Original Principal Balance of existing First Lender Loan: 3. Interest Rate of Existing First Lender Loan: or subordinate loan. 4. Principal Amount of Proposed New First Lender Loan or subordinate loan: 5. Interest Rate of Proposed New First Lender Loan or subordinate loan: The Owner hereby certifies the above information is true and correct and this Owner Request is executed under penalty of perjury on [insert date]. Owner ---PAGE BREAK--- Exhibit E to Agreement 1 319\31\1707324.1 NOTICE TO BORROWER: THIS DOCUMENT CONTAINS PROVISIONS RESTRICTING ASSUMPTIONS. CITY OF EL CERRITO PROMISSORY NOTE Secured by Deed of Trust City of El Cerrito, California Excess Sales Proceeds, [Date] Excess Rents, and Advances FOR VALUE RECEIVED, the undersigned (the "Borrower") promises to pay to the City of El Cerrito, a California municipal corporation (the "City"), at 10890 San Pablo Avenue, El Cerrito, CA 94530, Attn: Community Development Director, or such other place as the City may designate in writing, any amounts due to the City as Excess Sales Proceeds, Excess Rents, and Advances as provided in that Occupancy, Resale, and Refinancing Restriction Agreement, with Option to Purchase at Restricted Price of even date herewith (the "Resale Agreement"). 1. Purpose of Note. Borrower is purchasing the property located at (the "Property") pursuant to the terms of that certain affordable housing agreement (the "Affordable Housing Agreement"), which was required by the Conditions of Approval for the initial land use entitlements for the Project as approved by the City Council on January 30, 2006 (the "Legal Requirements") as part of an effort by the City to create affordable home ownership opportunities for low-income and moderate-income persons and families. The Legal Requirements provide for the sale of some homes at a price below fair market value at affordable prices. Pursuant to the Legal Requirements, the purchase price of the Property has been set below its unrestricted fair market value so that the Property will be affordable for purchase by moderate income households. Because the purchase price has been set below the unrestricted fair market value, the Borrower is required and has agreed to execute the Resale Agreement, which restricts the price of the Property upon resale and which requires the Borrower to pay any Excess Sales Proceeds at resale to the City. In addition, the Resale Agreement prohibits the Borrower from renting or leasing the Property except under limited circumstances and requires the Borrower to pay any Excess Rents to the City. The Resale Agreement also requires the Borrower to pay Advances. This City Note evidences: the obligation of the Borrower to pay any Excess Rents to the City as provided in the Resale Agreement; the obligation of the Borrower to pay any Excess Sales Proceeds to the City as provided in the Resale Agreement; and the obligation of the Borrower to pay any Advances pursuant to the Resale Agreement. ---PAGE BREAK--- Exhibit E to Agreement 2 319\31\1707324.1 2. Security. This City Note is secured by a deed of trust dated the same date as this City Note (the "City Deed of Trust"). Borrower and City have also executed the Resale Agreement. Borrower acknowledges that this City Note is given in connection with the Borrower’s purchase of the Property as part of a program of the City to assist in the purchase of residences by low and moderate income households. Said property, including both the real property and all improvements now or hereafter erected on the property, and all easements, rights, appurtenances and all fixtures now or hereafter attached to the property, shall be referred to in this City Note as the Property. The term "Property,” as used herein, shall have the same meaning as the term "Security" is used in the City Deed of Trust. 3. Definitions. The capitalized terms set forth in this City Note shall have the same meanings as in the Resale Agreement. 4. Term. The term of this City Note shall be the same as the Term of the Resale Agreement. 5. Payment. Any Excess Sales Proceeds plus Excess Rents and Advances owed under this City Note or the Resale Agreement shall immediately become due and payable: in the event of a Default by the Borrower under this City Note, the Resale Agreement, the City Deed of Trust, or the First Lender Loan; or (ii) on the date Transfer is made whether voluntarily, involuntarily, or by operation of law and whether by deed, contract of sale, gift, devise, bequest or otherwise. Failure to declare such amounts due shall not constitute a waiver on the part of the City to declare them due in the event of a subsequent Transfer. 6. No Assumption of City Note by Subsequent Buyers. Borrower acknowledges that this City Note is given in connection with the purchase of the Property as part of an effort by the City to assist in the purchase of the Property by low or moderate income households. Consequently, this City Note is not assumable by subsequent purchasers nor by the successors and assigns of the Borrower. 7. Prepayments. The City Deed of Trust shall remain on the Property to secure payment of the Excess Sales Proceeds, Excess Rents, and Advances, if any, and to secure performance of the Resale Agreement, and so cannot be prepaid. 8. Default. The Borrower shall be in default under this City Note if he or she is in Default under the Resale Agreement, City Note, City Deed of Trust, or First Lender Loan, (ii) fails to pay any money when due under this City Note; or (iii) breaches any representation or covenant made in this City Note or the Resale Agreement. 9. Acceleration. Upon a Declaration of Default, the full amount of any Excess Rents, Excess Sales Proceeds, Advances or any other amounts due under this City Note, if any, shall be immediately due and payable. Any failure by the City to pursue its legal and equitable remedies upon Default shall not constitute a waiver of the City's right to issue a Declaration of Default and exercise all of its rights under this Note, the Resale Agreement, and the City Deed of Trust. Nor shall acceptance by the City of any payment provided for herein constitute a waiver of the City's right to require prompt payment of any remaining payments owed. ---PAGE BREAK--- Exhibit E to Agreement 3 319\31\1707324.1 10. Nonliability for Negligence, Loss, or Damage. Borrower acknowledges, understands and agrees that the relationship between Borrower and City is solely that of borrower and lender, and that the City and its designated agents neither undertake nor assume any responsibility for or duty to Borrower to select, review, inspect, supervise, pass judgment on, or inform Borrower of the quality, adequacy or suitability of the Property or any other matter. The City and its designated agents owe no duty of care to protect Borrower against negligent, faulty, inadequate, or defective building or construction or any condition of the Property, and Borrower agrees that neither Borrower, nor Borrower's heirs, successors or assigns shall ever claim, have, or assert any right or action against City or its agents for any loss, damage, or other matter arising out of or resulting from any condition of the Property and will hold City and its agents harmless from any liability, loss, or damage for these things. 11. Indemnity. Borrower agrees to defend, indemnify, and hold the City and its designated agents harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys' fees that the City and its designated agents may incur as a direct or indirect consequence of: Borrower's failure to perform any obligations as and when required by this City Note, the City Deed of Trust, and the Resale Agreement; or the failure at any time of any of Borrower's representations or warranties to be true and correct. 12. Attorneys' Fees and Costs. Borrower agrees that if any amounts due under this Note are not paid when due, to pay in addition to principal and accrued interest, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. 13. Joint and Several Obligations. This Note is the joint and several obligations of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their successors and assigns. 14. No Offset. Borrower hereby waives any rights of offset it now has or may hereafter have against City, its successors and assigns, and agrees to make the payments called for herein in accordance with the terms of this Note. 15. Waiver. Borrower and any endorsers or guarantors of this Note, for themselves, their heirs, legal representatives, successors and assigns, respectively, severally waive diligence, presentment, protest, and demand, and notice of protest, notice of dishonor and notice of non- payment of this Note, and expressly waive any rights to be released by reason of any extension of time or change in terms of payment, or change, alteration or release of any security given for the payments hereof, and expressly waive the right to plead any and all statutes of limitations as a defense to any demand on this Note or agreement to pay the same, and jointly and severally agree to pay all costs of collection when incurred, including reasonable attorneys' fees. 16. Notices. All notices required in this Note shall be sent by certified mail, return receipt requested, or express delivery service with a delivery receipt, or personally delivered with a delivery receipt obtained and shall be deemed to be effective as of the date shown on the ---PAGE BREAK--- Exhibit E to Agreement 4 319\31\1707324.1 delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was returned as undeliverable as follows: To the Borrower: AT THE ADDRESS OF THE PROPERTY. To the City: City of El Cerrito Community Development Department 10890 San Pablo Ave El Cerrito, CA 94530 Attn: Community Development Director The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this Section 15. 17. Controlling Law. This Note shall be construed in accordance with and governed by the laws of the State of California. 18. Assignment by City. The City may assign its right to receive the proceeds under this Note to any person, and upon notice to the Borrower by the City, all payments shall be made to the assignee. 19. Severability. If any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. 20. Entire Agreement. This Note (along with the Resale Agreement and City Deed of Trust) sets forth the entire understanding and agreement between the City and the Borrower, and any amendment, alteration or interpretation of this Note must be in writing signed by both the City and the Borrower. BORROWER: [Type Borrower's Name] ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 1 NO RECORDING FEE PURSUANT TO GOVERNMENT CODE SECTION 27383 RECORDING REQUESTED BY Title Company Name Escrow # AND WHEN RECORDED MAIL TO City of El Cerrito Community Development Department 10890 San Pablo Ave El Cerrito, CA 94530 Attn: Community Development Director SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST AND SECURITY AGREEMENT CITY OF EL CERRITO [Property Address]) THIS DEED OF TRUST AND SECURITY AGREEMENT ("Deed of Trust") made this day of 201_, , among the trustor, (the "Owner"), whose address is [Title Company] ("Trustee"), and the City of El Cerrito, as Beneficiary. The Owner, in consideration of the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the property located in the City of El Cerrito, State of California, described in the attached Exhibit (the "Property"). TOGETHER with all the improvements now or hereafter erected on the Property, and all easements, rights, appurtenances, and all fixtures now or hereafter attached to the Property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this Deed of Trust; and TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to as the "Security." ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 2 To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever; TO SECURE to the City the performance of the covenants and agreements of Owner contained in that certain Occupancy, Resale, and Refinancing Restriction Agreement, with Option to Purchase at Restricted Price executed by and between the Owner and the City of even date herewith (the "Resale Agreement"); TO SECURE to the City the payment of Excess Rents, Excess Sales Proceeds, and any Advance (as such terms are defined in the Resale Agreement and evidenced by that certain Promissory Note executed by the Owner for the City's benefit of even date herewith (the "City Note")) that may become due by Owner to City. TO SECURE the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performance of the covenants and agreements of Owner herein contained. OWNER AND CITY COVENANT AND AGREE AS FOLLOWS: 1. Owner's Estate. That Owner is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security, that other than this Deed of Trust, the Security is encumbered only by: that deed of trust executed by Owner in connection with a loan made to Owner by (the "First Lender"), securing a promissory note executed by Owner in favor of the First Lender ("First Lender Note"), to assist in the purchase of the Property; and the Resale Agreement. Owner agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring the City's interest in the Security. (As used in this Deed of Trust, the term "First Lender" shall also include all successors and assigns of the First Lender.) 2. Payment of Excess Sales Proceeds, Excess Rents, and Advance. Owner will pay to the City, when and if due the: Excess Sales Proceeds as provided in the Resale Agreement and City Note; and (ii) Excess Rents as provided in the Resale Agreement and City Note; and (iii) any Advance as provided in the Resale Agreement and City Note. 3. Resale Agreement. Owner will observe and perform all of the covenants and agreements of the Resale Agreement. 4. Charges; Liens. Owner will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this Deed of Trust, by Owner making any payment, when due, directly to the payee thereof. Upon request by the City, Owner will furnish to the City all notices of amounts due under this paragraph. In the event Owner makes payment directly, Owner will discharge any lien which has priority over this Deed of Trust; provided, that Owner will not be required to discharge the lien of the First Lender Deed of Trust or any other lien described in this paragraph so long as Owner ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 3 will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the City, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. 5. Hazard Insurance. Owner will keep the Security insured by a standard all risk property insurance policy equal to the replacement value of the Security (adjusted every five years by appraisal, if requested by the City). If the Security is located in a flood plain, Owner shall also obtain flood insurance. The insurance carrier providing this insurance shall be licensed to do business in the State of California and be chosen by Owner subject to approval by the City. All insurance policies and renewals thereof will be in a form acceptable to the City and will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of the First Lender Note and the City as their interests may appear and in a form acceptable to the City. The City shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Owner shall furnish to the City, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Owner will give prompt notice to the insurance carrier and the City or its designated agent. The City, or its designated agent, may make proof of loss if not made by Owner. The City shall receive thirty (30) days' advance notice of cancellation of any insurance policies required under this section. Unless the City and Owner otherwise agree in writing, insurance proceeds, subject to the rights of the First Lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the Security of this Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the Security of this Deed of Trust would be impaired, the insurance proceeds will be used to repay any amounts due under the Resale Agreement and City Note, with the excess, if any, paid to Owner. If the Security is abandoned by Owner, or if Owner fails to respond to the City, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to Owner that the insurance carrier offers to settle a claim for insurance benefits, the City, or its designated agent, is authorized to collect and apply the insurance proceeds at the City's option either to restoration or repair of the Security or to pay amounts due under the Resale Agreement and City Note. If the Security is acquired by the City, all right, title and interest of Owner in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of Trust immediate prior to such sale or acquisition, subject to the rights of the First Lender. 6. Preservation and Maintenance of Security. Owner will keep the Security in good repair and in a neat, clean, and orderly condition and will not commit waste or permit impairment or deterioration of the Security. If there arises a condition in contravention of this Section 6, and if the Owner has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 4 shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Security to recover its cost of curing. 7. Protection of the City's Security. If Owner fails to perform the covenants and agreements contained in this Deed of Trust or if any action or proceeding is commenced which materially affects the City's interest in the Security, including, but not limited to, default under the First Lender Deed of Trust, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the City, at the City's option, upon notice to Owner, may make such appearances, disburse such sums and take such action as it determines necessary to protect the City's interest, including, but not limited to, disbursement of reasonable attorneys' fees and entry upon the Security to make repairs. Any amounts disbursed by the City pursuant to this paragraph, with interest thereon, will become an indebtedness of Owner secured by this Deed of Trust. Unless Owner and City agree to other terms of payment, such amount will be payable upon notice from the City to Owner requesting payment thereof, and will bear interest from the date of disbursement at the lesser of ten percent or (ii) the highest rate permissible under applicable law. Nothing contained in this paragraph will require the City to incur any expense or take any action hereunder. 8. Inspection. The City may make or cause to be made reasonable entries upon and inspections of the Security; provided, however, that the City will give Owner reasonable notice of inspection. 9. Forbearance by the City Not a Waiver. Any forbearance by the City in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by the City will not be a waiver of the City's right to require payment of any amounts secured by this Deed of Trust. 10. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 11. Hazardous Materials. Owner shall keep and maintain the Property (including, but not limited to soil and ground water conditions) in compliance with all, and shall not cause or permit the Property to be in violation of any, Hazardous Materials Law. Owner shall not do, nor allow anyone else to do, anything affecting the Security that is in violation of any Hazardous Materials Law. The preceding two sentences shall not apply to the presence, use, or storage on the Security of small quantities of Hazardous Materials that are generally recognized to be appropriate to normal residential uses and to maintenance of the Security. "Hazardous Material" shall mean any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, byphenyls, flammable, explosive, radioactive, Freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical, and (ii) any waste, substance, or material defined as or included in the definition of "hazardous substances," hazardous wastes," "hazardous ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 5 materials," "toxic materials," "toxic waste," "toxic substances," or words of similar import under any Hazardous Materials Law. "Hazardous Materials Law" shall mean any federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, health, industrial hygiene, environmental conditions, or the regulation or protection of the environment, and all amendments thereto as of this date and to be added in the future and any successor statute or rule or regulation promulgated thereto. Owner shall give City written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Security and any Hazardous Material or Hazardous Materials Law of which Owner has actual knowledge ("Hazardous Material Claims"). Without the City's prior written consent, which shall not be unreasonably withheld, the Owner shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in the City's reasonable judgment, impair the value of the Security; provided, however, that the City's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain the City's consent before taking such action, provided that in such event the Owner shall notify the City as soon as practicable of any action so taken. The City agrees not to withhold its consent, where such consent is required hereunder, if a particular remedial action is ordered by a court of competent jurisdiction, (ii) the Owner will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) the Owner establishes to the reasonable satisfaction of the City that there is no reasonable alternative to such remedial action which would result in less impairment of the Security; or (iv) the action has been agreed to by the City. 12. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the City and Owner subject to the provisions of this Deed of Trust. 13. No Assumption of Deed of Trust by Subsequent Buyers. Borrower acknowledges that this Deed of Trust is given in connection with the purchase of the Property as part of an effort by the City to assist in the purchase of the Property by low or moderate income households. Consequently, this Deed of Trust is not assumable by subsequent purchasers nor by the successors and assigns of the Borrower. 14. Joint and Several Liability. All covenants and agreements of Owner shall be joint and several. 15. Notice. Except for any notice required under applicable law to be given in another manner: any notice to Owner provided for in this Deed of Trust will be given by certified mail, addressed to Owner at the address shown in the first paragraph of this Deed of ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 6 Trust or such other address as Owner may designate by notice to the City as provided herein; and any notice to the City will be given by certified mail, return receipt requested, or express delivery service with a delivery receipt, or personally delivered with a delivery receipt, to City of El Cerrito, 10890 San Pablo Avenue, El Cerrito, CA 94530 Attn: Community Development Director or to such other address as the City may designate by notice to Owner as provided above. Notice shall be effective as of the date received by City as shown on the return receipt. 16. Governing Law. This Deed of Trust shall be governed by the laws of the State of California. 17. Severability. In the event that any provision or clause of this Deed of Trust or the Resale Agreement conflicts with applicable law, such conflict will not affect other provisions of this Deed of Trust or the Resale Agreement which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and the Resale Agreement are declared to be severable. 18. Captions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 19. Nondiscrimination. The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Property. The foregoing covenant shall run with the land. 20. Nonliability for Negligence, Loss, or Damage. Owner acknowledges, understands and agrees that the relationship between Owner and City is solely that of two separate parties in an arm's length transaction, and that City neither undertakes nor assumes any responsibility for or duty to Owner to select, review, inspect, supervise, pass judgment on, or inform Owner of the quality, adequacy or suitability of the Security or any other matter. City owes no duty of care to protect Owner against negligent, faulty, inadequate or defective building or construction or any condition of the Security and Owner agrees that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have or assert any right or action against City for any loss, damage or other matter arising out of or resulting from any condition of the Security and will hold City harmless from any liability, loss or damage for these things. 21. Indemnity. Owner agrees to defend, indemnify, and hold City and its officers, employees, agents, board members harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys' fees that City may incur as a direct or indirect consequence of: Owner's failure to perform any obligations as and when required by the Resale Agreement, the City Note, and this Deed of Trust; or ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 7 the failure at any time of any of Owner's representations or warranties to be true and correct. 22. Acceleration; Remedies. Upon Owner's breach of any covenant or agreement of Owner in the Resale Agreement, the City Note, or this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, the City, prior to acceleration, will mail by express delivery, return receipt requested notice to Owner specifying: the breach; the action required to cure such breach; a date, not less than thirty (30) days from the date the notice is received by Owner as shown on the return receipt, by which such breach is to be cured; and that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Security. The notice will also inform Owner of Owner's right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of default or any other defense of Owner to acceleration and sale. If the breach is not cured on or before the date specified in the notice, the City, at the City's option, may: declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the City shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; deliver to Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924 et seq., as amended from time to time; or exercise all other rights and remedies provided herein, in the instruments by which the Owner acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. 23. Owner's Right to Reinstate. Notwithstanding the City's acceleration of the sums secured by this Deed of Trust, Owner will have the right to have any proceedings begun by the City to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Security pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: Owner pays City all sums which would be then due under this Deed of Trust and Owner cures all breaches of any other covenants or agreements of Owner contained in the Resale Agreement or this Deed of Trust; Owner pays all reasonable expenses incurred by City and Trustee in enforcing the covenants and agreements of Owner contained in the Resale Agreement or this Deed of Trust, and in enforcing the City's ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 8 and Trustee's remedies, including, but not limited to, reasonable attorneys' fees; and Owner takes such action as City may reasonably require to assure that the lien of this Deed of Trust, City's interest in the Security and Owner's obligation to perform the obligations and pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Owner, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. 24. Due on Transfer of the Property. Upon a Transfer (as defined in the Resale Agreement) of the Property or any interest in it, the City shall require immediate payment in full of all sums secured by this Deed of Trust. 25. Reconveyance. Upon payment of all sums secured by this Deed of Trust, and following the expiration of the Term of the Resale Agreement, City will request Trustee to reconvey the Security and will surrender this Deed of Trust, the City Note, and the Resale Agreement to Trustee. Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 26. Substitute Trustee. The City, at the City's option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 27. Superiority of First Lender Documents. Notwithstanding any provision herein, this Deed of Trust shall not diminish or affect the rights of the First Lender under the First Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Security in compliance with the requirements of the Resale Agreement. Notwithstanding any other provision hereof, the provisions of this Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the First Lender, or such lender's assignee or successor in interest, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the Owner. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this Deed of Trust shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure and no notice of default was recorded against the Property by such holder in connection therewith, this Deed of Trust shall automatically terminate upon such acquisition of title, only if: the City has been given written notice of default under such First Lender Deed of Trust with a sixty (60)-day cure period (which requirement shall be satisfied by recordation of a notice of default under California Civil Code Section 2924); and (ii) the City shall not have cured or commenced to cure the default within such sixty (60)-day period or commenced to cure and given its firm commitment to complete the cure in form and substance acceptable to the First Lender. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 9 28. Request for Notice. Owner requests that copies of the notice of default and notice of sale be sent to Owner at the address set forth in Section 15 above. IN WITNESS WHEREOF, Owner has executed this Deed of Trust as of the date first written above. OWNER: [Type Owner's Name] ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 STATE OF CALIFORNIA ) ) COUNTY OF ) On before me, Notary Public, 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. Name: Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ---PAGE BREAK--- Exhibit E to Agreement 319\31\1707331.1 A-1 EXHIBIT A Legal Description of the Property ---PAGE BREAK--- Agenda Item No. 5(D) Attachment 2 Creekside Project Chronology • In the 1994 Third Amended and Restated City of El Cerrito Redevelopment Plan (1994 Redevelopment Plan), the Redevelopment Agency recommended that improvements within the El Cerrito South Gateway Development Area include redevelopment of the commercial and retail space, restoration of Cerrito Creek, and construction of residential development in proximity to El Cerrito Plaza Shopping Center and El Cerrito Plaza BART Station (BART Station). • In 1997, the City certified the El Cerrito Plaza Shopping Center Redevelopment Project Environmental Impact Report (EIR) evaluating impacts of the redevelopment and rehabilitation of the El Cerrito Plaza Shopping Center. The 1997 proposal included up to 205 multi-family residential units on six acres on the eastern end of the shopping center. Application No. 6038, the Creekside at El Cerrito Plaza condominium project (“the Project”) was proposed for the same general area of the Plaza. • In 1999, the El Cerrito Plaza Shopping Center project was revised and the City adopted a Subsequent Negative Declaration that served as a supplementary document to the 1997 Redevelopment EIR. The 1999 Subsequent Negative Declaration evaluated a new, scaled-down El Cerrito Plaza Shopping Center Project (1999 Revitalization Project), which included less retail space than proposed by the 1997 Redevelopment Project. The 1999 Revitalization Project was approved and a use permit was issued for the construction of up to 227,000 square feet of commercial space and rehabilitation of 117,000 square feet of existing commercial space, which describes the existing El Cerrito Plaza Shopping Center. • In 2004, an Incentives Program use permit application was submitted for a proposed mixed-use development located in the southeast corner of El Cerrito Plaza shopping center. The development was proposed to contain 84 units of owner-occupied housing, a 404 space parking garage for BART patrons and a child care facility. • In 2004, the Planning Division determined that the proposed mixed-use project might cause significant environmental impacts not sufficiently addressed in the previous EIR and that a subsequent environmental impact report (“SEIR”) should be prepared. • On January 3, 2005, the applicant submitted plans for an Incentives Program use permit application for a proposed mixed-use development located in the southeast corner of El Cerrito Plaza shopping center. The residential development portion of the project was proposed to contain 84 units of owner-occupied housing. The parking garage portion of the project was proposed to contain a maximum of 404 parking spaces. • On February 16, 2005, the Design Review Board held a public hearing on the 84 unit project that included the parking garage, adopted a motion recommending that the Planning Commission not consider the project under the Incentives Program and directed changes in design. • In late February 2005, the City determined that it no longer wanted to move forward with the garage portion of the project and the project sponsor reconsidered his proposal to construct a residential project, a BART parking garage, and a child care facility. ---PAGE BREAK--- 2 • In March 2005, the City of El Cerrito Community Development Department received revised plans for the project site, which included 128 residential units, and a revised daylighting and restoration plan for Cerrito Creek. This revised plan was initially evaluated as the Residential Only Alternative in the Draft SEIR and represents the current development proposal. • On September 21, 2005, the Design Review Board held a public hearing to review the Project’s qualifications for the City’s Incentives Program and accept public comment. • On November 2, 2005, the Planning Commission adopted Resolution No. PC05-21 and Resolution No. PC05-22 certifying the FSEIR, and approving a Use Permit for Application 6038, a 128 unit condominium development to locate in a C-2-A, commercial zoning district at the southeast corner of El Cerrito Plaza. • On November 17, 2005, four appellants timely appealed the decision of the Planning Commission. • On January 30, 2006, the City Council held a public hearing to consider the appeals, and adopted Resolution No. 2006-1, certifying the FSEIR, adopting environmental findings, mitigation measures and approving the mitigation monitoring and reporting program, and denying the appeals, and upholding the Planning Commission action approving a Use Permit with conditions allowing a condominium development to locate in a C-2-A, Commercial zoning district at the southeast corner of El Cerrito Plaza. • On December 6, 2006, the applicant began the design review process by holding a study session with the Design Review Board. • On December 20, 2006, the Planning Commission held a duly noticed public hearing and adopted Resolution No. PC06-22, approving a request for a use permit extension for a period of one year. • On January 2, 2007, an appellant timely appealed the decision of the Planning Commission regarding progress on Condition of Approval #50, and project density. • On February 5, 2007, the City Council held a duly noticed public hearing to consider the appeal and continued the item to February 20, 2007. • On February 20, 2007, the City Council adopted Resolution No. 2007-09, modifying Condition of Approval No. 50, denying the appeal and upholding the extension of the Planning commission extension of the use permit. • On May 2, 2007, the Design Review Board held a duly noticed public hearing and approved Resolution No. DRB07-04, granting design review approval of the building shell and site layout. The Board requested the applicant return with specific architectural and landscape details as specified in the Resolution. • On September 5, 2007, the Design Review Board held a duly noticed public hearing and approved Resolution No. DRB07-09, granting approval for specific architectural and landscape details and materials. • On September 11, 2007, an appellant timely appealed the decision of the Design Review Board regarding issues unrelated to the September 5, 2007 approval. ---PAGE BREAK--- 3 • On November 5, 2007, the City Council held a duly noticed public hearing to consider the appeal and adopted Resolution No. 2007-84, upholding the decision of the Design Review Board regarding application 6388, approving a use permit extension with conditions. • On April 2, 2014, the Design Review Board, after due consideration of all evidence and reports offered for review approved Resolution No. DRB14-04 confirming that building permit plans and information that meets the requirements of Design Review Condition No. 5 of Design Review Resolution No. 07-09 and Mitigation Monitoring and Reporting Plan No. 4.1 Planning Application No. 6038 B. A.