2011-350932l
RECORDING REQUESTED BY,
FIRST AM-HRICAN TITLE
FREE RECORDING REQUESTED
PURSUANT TO GOV. CODE SECTION 27383
` e
City of Encinitas
Planning and Building Department
505 S. Vulcan Avenue
Encinitas, CA 92024
And When Recorded Mail To:
City of Encinitas
Planning and Building Department
505 S. Vulcan Avenue
Encinitas, CA 92024
Attn: Housing Administrator
DOC# 2011-0350932
JUL 12, 2011 8:00 AM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
Ernest J. Dronenburg, Jr., COUNTY RECORDER
FEES: 48.00
PAGES:
APN: 256-100-55
AMENDED AND RESTATED AFFORDABLE HOUSING REGULATORY
AGREEMENT
This Amended and Restated Affordable Housing Regulatory Agreement (hereinafter the
"REGULATORY AGREEMENT") is made and entered into and is effective as of this R day of
I ~ , 2011 by and between the City of Encinitas (hereinafter the "CITY"), and Shea
Homes Limited Partnership, a California limited partnership (hereinafter the "OWNER").
RECITALS
A. Whereas, OWNER is the owner of that certain real property described in Exhibit "A"
attached hereto and incorporated herein. (hereinafter the "PROPERTY");
B. Whereas, the PROPERTY was previously subject to that certain Affordable Housing
Regulatory Agreement Tentative Map No. 03-233 ("Inclusionary" Affordable Unit) dated
December 18, 2006 and that certain Affordable Housing Regulatory Agreement Tentative
Map No. 03-233 (Density Bonus Units) dated December 18, 2006 (collectively, the
"ORIGINAL REGULATORY AGREEMENTS");
C. Whereas, on April 21, 2011, the CITY passed and adopted Resolution No. PC 2011-09,
which modified Resolution No. PC 2010-02 dated March 18, 2010, Resolution No. PC 2011-
10, which modified Resolution No. PC 2006-29 dated June 1, 2006, Resolution No. PC
2011-11, which modified Resolution No. PC 2003-46 dated August 21, 2003, and Resolution
No. PC 2011-12, which modified Resolution No. PC 2004-43 dated October 21, 2004. The
above resolutions that were adopted on April, 21, 2011, which are referred to collectively in
this REGULATORY AGREEMENT as "APPROVALS," modified the applicable timing
This document is being recorded by
First American Title insurance Co. as
an accommodation only. It has rW
Affordable Housing Regulatory Agreement been examined as to BxectAllo u or Page 1 of t I
impact on title,
5607
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E608
and manner of satisfaction of affordable housing requirements as further described herein;
and
D. Whereas, OWNER and CITY wish to terminate the ORIGINAL REGULATORY
AGREEMENTS and record in their place this REGULATORY AGREEMENT.
NOW, THEREFORE, the parties hereto agree as follows:
TERMINATION OF ORIGINAL REGULATORY AGREEMENT; TERM OF
REGULATORY AGREEMENT
A. Upon the recordation of this REGULATORY AGREEMENT, the ORIGINAL
REGULATORY AGREEMENTS are hereby cancelled, terminated, and the
PROPERTY is thereby released from the same.
B. The term of this REGULATORY AGREEMENT shall commence on the date of
recordation of this REGULATORY AGREEMENT and shall remain in effect in
perpetuity.
2. IDENTIFICATION AND ACCEPTANCE OF THE AFFORDABLE UNITS
A. The CITY has approved development of the PROPERTY with a total of twenty (20)
dwelling units ("UNITS"). In exchange for the rights granted to Shea Homes
Limited Partnership described in this Section 2, this REGULATORY AGREEMENT
requires the OWNER to make those twenty (20) units affordable to low and very low
income households in accordance with the affordability schedule attached hereto and
incorporated herein as Exhibit "B."
B. As a condition of approval of the development of the PROPERTY, the CITY
required three (3) of the UNITS to be set aside for very low income households
earning fifty percent (50%) or less of Area Median Income (AMI) for San Diego
County, adjusted for household size, as published periodically by the U.S.
Department of Housing and Urban Development (HUD).
C. Consistent with the APPROVALS, one (1) of the UNITS constructed at the
PROPERTY shall be set aside for very low income households earning fifty percent
(50%) or less of AMI for San Diego County, adjusted for household size, as
published periodically by HUD, in satisfaction of the affordable housing obligations
of the Nantucket I development more particularly described in CITY Resolution No.
PC 2011-11.
D. Consistent with the APPROVALS, one (1) of the UNITS constructed at the
PROPERTY shall be set aside for very low income households earning fifty percent
(50%) or less of AMI for San Diego County, adjusted for household size, as
published periodically by HUD, in satisfaction of the affordable housing obligations
of the Nantucket II development more particularly described in CITY Resolution No.
PC 2011-12.
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E. Consistent with the APPROVALS, at least five (5) of the UNITS constructed at the
PROPERTY shall be set aside for very low income households earning sixty percent
(60 or less of AMI for San Diego County, adjusted for household size, as
published periodically by HUD, in satisfaction of the affordable housing obligations
of the Coral Cove development more particularly described in CITY Resolution No.
PC 2011-10.
F. Consistent with the APPROVALS, and subject to the satisfaction of the condition
precedent in favor of Shea Homes Limited Partnership described in Section 2.G.
below, up to ten (10) of the UNITS constructed at the PROPERTY shall be set aside
for very low income households earning fifty percent (50%) or less of AMI for San
Diego County, adjusted for household size, as published periodically by HUD, in
satisfaction of the affordable housing obligations of the Bahlmann development more
particularly described in CITY Resolution No. PC 2011-09.
G. Consistent with Condition SCG of City Resolution No. PC 2011-09, if Shea Homes
Limited Partnership notifies the City in writing that it or one of its affiliates does not
intend to acquire or otherwise utilize the UNITS to satisfy the affordable housing
obligation of the Bahlmann property more particularly described in CITY Resolution
No. PC 2011-09, and subject to compliance with the procedures described in
Section 12 of this REGULATORY AGREEMENT, including, without limitation,
CITY approval where required, Shea Homes Limited Partnership shall have the right
to utilize up to ten (10) of the UNITS described in Section 2.F above to satisfy all or
a portion of the affordable housing obligations of the other development projects
elsewhere within the City.
During the term of this REGULATORY AGREEMENT, the UNITS shall be utilized for
residential use only in accordance with applicable local ordinances and regulations; any
commercial use or transient habitation (of less than thirty (30) days) is specifically
prohibited.
3. RENTING THE UNITS
A. The OWNER shall make the UNITS available for rental to the general public
through two successive weekly advertisements in local newspaper(s). Applications
shall be made available and accepted for a minimum of fourteen (14) days. The
OWNER may employ additional marketing methods that are in accordance with
professional standards of the industry and fair housing laws.
B. The OWNER is prohibited from renting the UNITS to a family member, relative, or
employee without prior written approval from the CITY.
C. The UNITS shall be rented only to eligible low and very low-income households in
accordance with the terms and conditions contained herein. Prior to occupancy, the
proposed tenant's household income must be verified using source documentation for
all adult members of the household (e.g., tax return, wage statement, bank
statements, public benefit statements).
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D. The maximum rental rate to be charged for the UNITS shall be consistent with State
law and be based on thirty percent (30%) of the applicable maximum AMI as
adjusted for household size (divided by twelve months). The DIRECTOR shall
approve the maximum rental rate for the UNITS, including the applicable utility
allowance, which the tenant paid utilities are deducted from the maximum rental rate.
The rental rate maybe adjusted periodically in accordance with the current AMI and
utility schedule.
E. The OWNER shall maintain tenant files containing information on the household
income and the source documentation used by OWNER to determine household
income. Said files shall be maintained for a period of three years from the
termination of any tenancy. Upon written request, OWNER shall allow the CITY
access to review tenants' files and financial records for compliance with this
REGULATORY AGREEMENT.
F. The OWNER shall re-certify the tenant's income status every twelve (12) months. In
the event a tenant no longer qualifies as lower-income, the OWNER shall provide
said tenant with the most expeditious eviction notice process, in accordance with
applicable State law and Federal law. CITY acknowledges that this project may be
financed with federal low-income housing tax credits and, if so, will be subject to a
Regulatory Agreement between OWNER and the California Tax Credit Allocation
Committee ("Tax Credit Regulatory Agreement"). Over-income tenants will be
handled in accordance with the Tax Credit Regulatory Agreement and Federal law,
including 26 U.S.C. §42, and the Home Investment Partnership Act, 24 CFR Part 92,
(collectively, "Funding Requirements"). In the event of a conflict between the terms
of this REGULATORY AGREEMENT and the terms of the Funding Requirements,
the terms of the Funding Requirements shall prevail.
4. MANAGEMENT AND MAINTENANCE
A. Any tenant selected to occupy the UNITS shall enter into a written occupancy
agreement or lease with the OWNER. OWNER shall use the standard lease form
published by the California Apartment Association or other form approved by the
DIRECTOR.
B. Leases and the landlord-tenant relationship shall be subject to California law and the
provisions of this REGULATORY AGREEMENT. The OWNER shall establish
reasonable rules of conduct and occupancy that comply with Federal, State and local
laws and regulations.
C. The OWNER is responsible to maintain the leased UNITS in a habitable condition
and in good repair at all times. OWNER is responsible for maintenance costs,
including all repairs, corrections and replacements necessary to maintain and
preserve the UNITS in a safe and sanitary condition in accordance with HUD's
Housing Quality Standards (HQS). Upon written request by the CITY, the OWNER
shall provide DIRECTOR or his/her representative with access to inspect the UNITS
for compliance with this section.
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D. OWNER shall obtain and, at all times during the term of this REGULATORY
AGREEMENT, maintain policies of general liability and property damage insurance
from an insurance company authorized to be in business in the State of California.
The general liability shall be in an amount of not less then $1,000,000 for each
occurrence. The property damage insurance shall be in an amount sufficient to
replace the UNITS in the event of fire or other major damage. OWNER shall provide
CITY with Certificate of Insurance and an additional insured endorsement naming
the City of Encinitas as Additional Insured. OWNER may self-insure, with the prior
written approval of the City of Encinitas's Risk Manager.
E. OWNER may contract with a management agent for the performance of the services
or duties. However, such an arrangement does not relieve the OWNER of
responsibility for proper performance of these duties.
F. The OWNER shall make a good faith effort to expeditiously re-rent the UNITS
whenever one of the UNITS becomes vacant. In the event the UNITS are vacant for
a period of more than thirty (30) days, the OWNER shall notify the CITY. If
available, CITY shall provide OWNER with a list of eligible households seeking
rental housing.
5. REPORTING REQUIREMENTS
OWNER shall submit a report to the DIRECTOR immediately after initial lease-up of the
UNITS and annually thereafter, on a form prescribed by the DIRECTOR. The report shall
include information on the household(s) occupying the affordable UNITS during the prior
year, household income, and the amount of rent collected. Whenever requested by the CITY,
the OWNER shall provide source documentation demonstrating the qualified status of the
household(s).
6. NON-DISCRIMINATION
OWNER shall not discriminate against any prospective tenant on the basis of race, color,
religion, sex, national origin, familial status, or disability.
7. CERTAIN ACTS PROHIBITED
The OWNER shall not make any sale, encumbrance, assignment or conveyance, or transfer
in any other form, of the UNITS or of its entire interest in the PROPERTY other than in
accordance with the terms of this REGULATORY AGREEMENT. The CITY
acknowledges and agrees that OWNER may transfer the PROPERTY to a limited
partnership that includes a partner that is a not for profit entity and that is controlled by an
experienced affordable housing developer. The DIRECTOR hereby approves Chelsea
Investment Corporation ("CHELSEA") as the affordable housing developer and approves the
transfer of the PROPERTY to a limited partnership whose administrative general partner is
an affiliate of CHELSEA. The CITY further acknowledges and agrees that the financing of
the acquisition of the PROPERTY and the construction and occupancy of the UNITS will
require the use of multiple funding sources such as proceeds of nine percent (9%) low-
income housing tax credits, assistance of HOME funds (and possible other funds) from the
Affordable Housing Regulatory Agreement Page 5 of 11
E7 612 City, construction debt, permanent debt and other financing. The CITY consents to the
encumbrance of the PROPERTY in connection with such financing and the CITY agrees to
consider the reasonable requests of a party providing financing for the acquisition,
development and/or operation of the UNITS that the CITY subordinate all or a portion of
this REGULATORY AGREEMENT to the lien of its deed of trust.
8. VIOLATION OF REGULATORY AGREEMENT BY THE OWNER
In the event of the violation of any of the provisions of this REGULATORY AGREEMENT
by the OWNER, the CITY shall give written notice thereof to the OWNER by registered or
certified mail addressed to the OWNER at the address stated in this REGULATORY
AGREEMENT, or to such other address as may have been designated by the OWNER, and
if such violation is not corrected to the satisfaction of the CITY within thirty (30) days after
the date such notice is mailed (or within such further time as the CITY, in its reasonable
discretion, may permit), the CITY may, without further prior notice, declare in writing a
default under this REGULATORY AGREEMENT effective on the date of such declaration
of default, and upon any such declaration of default the CITY may apply to any court, State
or Federal, for specific performance of this REGULATORY AGREEMENT; for an
injunction against any violation by the OWNER of this REGULATORY AGREEMENT; for
the appointment of a receiver to take over and operate the UNITS in accordance with the
terms of this REGULATORY AGREEMENT; or for such other relief as may be appropriate,
it being agreed by the OWNER that the injury to the CITY arising from a default under any
of the terms of this REGULATORY AGREEMENT would be irreparable and that it would
be extremely difficult to ascertain the amount of compensation to the CITY which would
afford adequate relief, in light of the purposes of the acquisition and rehabilitation funding.
9. AMENDMENT
This REGULATORY AGREEMENT shall not be altered or amended except by writing
executed between the parties. In the event the CITY provides financing for the UNITS and
requires the recordation of another Regulatory Agreement against the PROPERTY in
connection therewith, this REGULATORY AGREEMENT shall be released from the
PROPERTY.
10. SEVERABILITY
In the event that any provision or covenant of this REGULATORY AGREEMENT is held
by a court of competent jurisdiction to be invalid or unenforceable, then it shall be severed
from the remaining portions of this REGULATORY AGREEMENT, which shall remain in
full force and effect.
11. BINDING ON SUCCESSORS
This REGULATORY AGREEMENT shall bind, and the benefits thereof shall inure to, the
respective parties hereto, their legal representatives, executors, administrators, successors in
the office or interest, and assigns; provided, however, and except in the case where the
OWNER transfers the PROPERTY to an affiliate or as otherwise provided for in Section 7
hereof and gives written notice of the same to the City, that the OWNER may not assign this
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REGULATORY AGREEMENT or any of its obligations hereunder, voluntarily or by
operation of law, without the prior approval of the CITY. As used herein, "affiliate" means
any entity in which OWNER holds an ownership interest, or any person or entity that holds
an ownership interest in the PROPERTY.
12. RESERVATION OF UNITS
The APPROVALS authorize Shea Homes Limited Partnership, in its discretion, to set aside
up to ten (10) of the UNITS for households earning fifty percent (50%) or less of AMI for
San Diego County, adjusted for household size, as published periodically by HUD in
satisfaction of the affordable housing obligations of the Bahlmann development more
particularly described in CITY Resolution No. PC 2011-09. As of the date the parties
executed this REGULATORY AGREEMENT, Shea Homes Limited Partnership had not
acquired the Bahlmann property. Therefore, the parties agree to the following procedures for
purposes of tracking and designating the UNITS, if Shea Homes Limited Partnership notifies
the CITY in writing that the conditions precedent identified in Section 2.G. hereof will not
be satisfied:
A. The CITY has developed a documentation that it will maintain in the City's files
regarding the PROPERTY for the purposes of tracking when the UNITS are
allocated in accordance with the terms hereof.
B. At the time Shea Homes Limited Partnership intends to set aside one or more of the
UNITS for the Bahlmann development, Shea Homes Limited Partnership shall
submit a letter to the City describing how many of the UNITS it intends to set aside,
how many of the UNITS have been previously set aside for the benefit of that
development, the total number of the UNITS the APPROVALS or any subsequent
CITY approvals authorize and how many of the UNITS have not yet been set aside
for the benefit of another development.
C. Subject to subsection (D) below, upon receipt of the above referenced letter, the
CITY shall revise the documentation described above in subsection (A) to reflect the
updated allocation of the UNITS and provide Shea Homes Limited Partnership with
a copy of the same.
D. If the CITY has a question as to whether the information provided by Shea Homes
Limited Partnership is consistent with the terms of this REGULATORY
AGREEMENT, the CITY shall immediately telephone Shea Homes Limited
Partnership to discuss the same. To the extent any concerns are not addressed
through the phone call, the CITY shall immediately thereafter provide Shea Homes
Limited Partnership with a detailed, written description of the issues. CITY and Shea
Homes Limited Partnership shall thereafter work diligently to resolve all outstanding
issues.
E. If Shea Homes Limited Partnership wishes to set aside some of the UNITS not
otherwise allocated for developments by the APPROVALS, Shea Homes Limited
Partnership shall identify the other development in writing to the CITY. If the other
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development's approvals from the CITY do not authorize the designation of the
UNITS for purposes of satisfying all or portion of that developments affordable
housing obligations, then those required approvals shall be obtained from the CITY
before the process identified in subsections B - D above can be finalized.
Notwithstanding anything to the contrary in this REGULATORY AGREEMENT or
otherwise, Shea Homes Limited Partnership (in its individual capacity independent of
whether it is also the OWNER) may assign its right to set aside some or all ofthe unallocated
UNITS as described in this REGULATORY AGREEMENT to others. Shea Homes Limited
Partnership, or its successor, shall provide written notice to the CITY of such an assignment,
including the name and address of the successor. The successor shall be bound by the terms
of this REGULATORY AGREEMENT.
13. GENDER
The use of the plural in this REGULATORY AGREEMENT shall include the singular and
the singular shall include the plural; and the use of one gender shall be deemed to include all
genders.
14. ELECTION OF REMEDIES: EVENT OF DEFAULT
The remedies of the CITY hereunder or under any other instrument providing for or
evidencing the financial assistance provided herein are cumulative, and the exercise of one or
more of such remedies shall not be deemed an election of remedies and shall not preclude the
exercise by the CITY of any one or more of its other remedies.
15.. WAIVER
No waiver by the CITY of any breach of or default under this REGULATORY
AGREEMENT shall be deemed to be a waiver of any other or subsequent breach or default
hereunder.
16. GOVERNING LAW
This REGULATORY AGREEMENT shall be construed in accordance with and governed
by the laws of the State of California.
17. THIS PARAGRAPH INTENTIONALLY OMITTED.
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18. NOTICES
Written notices and other written communications by and between the parties hereto shall be
addressed as follows unless and until a party hereto has in writing, communicated a different
address to the other party hereto.
CITY
City of Encinitas
505 S. Vulcan Avenue
Encinitas, CA 92024
Attn: Housing Administrator
OWNER
Shea Homes Limited Partnership
9990 Mesa Rim Rd Ste 200
San Diego CA 92121-3933
Attn: Paul Barnes, President
IN WITNESS WHEREOF, OWNER has executed this REGULATORY AGREEMENT as of the
day and year first above written.
OWNER
SHEA HOMES LIMITED PARTNERSHIP, a California limited partnership
By: J. F. lea C, a Dare limited liability company, its General Partner
By:_
Title:
By:
Title: u(notarization of signature(s) must be attached)
CITY
City of Encinitas
By v -t--
Tom Curriden, City Planner
(notarization not required)
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EXHIBIT "A"
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOT 1 OF CITY OF ENCINITAS T.M. 02-233, IN THE CITY OF ENCINITAS, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 15501, FILED
IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JANUARY 5,
2007.
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EXHIBIT "B"
Affordability Requirements
Bedroom Type(s)
Number of Units
Maximum % of Targeted Area
Median Income
2 Bedrooms
3
60%
2 Bedrooms
9
50%
3 Bedrooms
2
60%
3 Bedrooms
6
50%
101525176.6
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5618
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
File No: DIV-3786560 (KH)
STATE OF California )SS APN No: 216-410-22-00
COUNTY OF 6M D in 0 )
On -'-'N before me, wff "1 , Notary Public, personally appeared
Y s ART AN ?V6V)Ac_
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) X are subscribed to the within
instrument and acknowledged to me that hetshetthey executed the same in h*heFAheir authorized capacity(ies), and that by
his/+rerftheir 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.
Signat e
RANA KHDURY
Commission 1916985
Notary Public - California
San Diego County
M Comm. E sires Doc 13 2014
This area for official notarial seal.
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