2020/11/10 City Council Resolution 2020-099 RESOLUTION NO. 2020-099
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE
DOCUMENTS INCLUDING, A CONSENT TO AN ASSIGNMENT AND ASSUMPTION
AGREEMENT AND AN AMENDED AFFORDABLE HOUSING COVENANT, TO
EFFECTUATE THE CONSTRUCTION AND DEVELOPMENT BY WILLOW GLEN
PARTNERS, LP, OF THE 36-UNIT AFFORDABLE APARTMENT PROJECT,
REQUIRED BY THE CITY'S DEVELOPMENT AGREEMENT FOR THE
SOUTHEAST SPECIFIC PLAN AREA
WHEREAS, on December 7, 2010, the City Council of the City of Rohnert adopted
Resolution No 2010-134 approving the Final Environmental Impact Report(EIR) for the
Southeast Specific Plan; and
WHEREAS, on December 7,2010, the City Council of the City of Rohnert Park adopted
Ordinance No. 832, approving a Development Agreement ("Development Agreement") between
the City of Rohnert Park and Redwood Equities LLC, which included an Affordable Housing
Plan; and
WHEREAS, on November 25, 2014, the City Council of the City of Rohnert Park
adopted Resolution No. 2014-165 approving an amended Final Development Plan for the
Southeast Specific Plan Area; and
WHEREAS, on November 25, 2014, the City Council of the City of Rohnert Park
adopted Resolution 2014-166 the Tentative Map for the Southeast Specific Plan Area prepared
by Civil Design Consultants (the"Tentative Map"), subject to certain conditions of approval
("Conditions"); and
WHEREAS,on December 9, 2014, the City Council of the City of Rohnert Park adopted
Ordinance No. 882, approving an amendment to the Development Agreement including
amendments to the Affordable Housing Plan,which required, among other things, an average
overall affordability rate of 65%of Area Median Income for the 36-unit apartment complex
included in the project; and
WHEREAS, Redwood Equities LLC has assigned the Development Agreement to Penn
Grove Mountain LLC ("Developer") an entity under common control with Redwood Equities
LLC; and
WHEREAS,on November 13,2018, the City Council of the City of Rohnert Park
adopted Resolution 2018-146, authorizing the City Manager to execute an affordable housing
covenant between the City and Penn Grove Mountain LLC for the 36-unit affordable apartment
complex in the Willow Glen subdivision; and
WHEREAS, on November 26, 2019, the City Council of the City of Rohnert Park
adopted Ordinance No. 937,approving an amendment to the Affordable Housing Plan of the
Development Agreement to redistribute the number of income-restricted units available at each
income level for the 36-unit affordable housing apartment complex which resulted in an overall
average affordability of 60% of Area Median Income in the project; and
WHEREAS, the Developer has finalized its financing structure for the 36-unit affordable
housing complex and intends to assign its obligations with respect to such housing complex to
Willow Glen Partners LP; and
WHEREAS, the Developer is requesting changes to the previously approved affordable
housing covenant in order to conform to its approved tax credit financing and deliver a project
with an average affordability of 56% of Area Median Income to the City.
NOW, THEREFORE, BE IT RESOLVED that the City Council hereby approves and
authorizes the City Manager to execute a consent to an Assignment and Assumption Agreement
between Penn Grove Mountain LLC and Willow Glen Partners LP in substantially similar form
to Exhibit A, attached hereto, subject to revisions approved by the City Manager and City
Attorney.
BE IT FURTHER RESOLVE]) that the City Council hereby approves and authorizes
the City Manager to execute an amended Affordable Housing Covenant by and between the City
and Willow Glen Partners LP, in substantially similar form to Exhibit B attached hereto, for the
36-unit affordable apartment project, subject to revisions approved by the City Manager and City
Attorney.
BE IT FURTHER RESOLVED that the City Council hereby approves and authorizes
the City Manager to execute any other documents necessary to effectuate the terms and
conditions of the Affordable Housing Covenant and construction of the 36-unit affordable
apartment project, including but not limited to, an estoppel certificate and closing documents.
DULY AND REGULARLY ADOPTED this 10'h day of November, 2020.
CITY OF ROHN , T PARK
Josep T. Callinan, Mayor
ATTEST:
S wa evas, City Clerk ', = .=,• •1
Attachments: Exhibit A and Exhibit B
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Resolution 2020-099
Page 2
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Willow Glen Partners, L.P.
c/o Burbank Housing Development Corporation
790 Sonoma Avenue
Santa Rosa, CA 95404
Attn: Lawrance Florin
ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT AGREEMENT
AND CONSENT OF CITY
This ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT AGREEMENT AND
CONSENT OF CITY (the “Assignment”) is made effective as of the date of the conveyance of
the Assigned Property (defined below) to Assignee (defined below) (the “Effective Date”), by and
between WILLOW GLEN PARTNERS, L.P., a California limited partnership (“Assignee”) and
PENN GROVE MOUNTAIN, LLC, a California limited liability company (“Assignor”).
R E C I T A L S
A. The City of Rohnert Park (“City”) and Redwood Equities, LLC, Assignor’s
predecessor-in-interest (“Redwood Equities”), entered into that certain Development
Agreement, as of December 7, 2010, recorded on December 15, 2010, as Instrument No.
2010114199 in the Official Records of Sonoma County (“Original Development Agreement”),
with respect to that certain real property described therein and in Exhibit A, attached hereto and
incorporated herein by this reference (the “Property”).
B. The City and Redwood Equities entered into that certain First Amendment to
Development Agreement dated December 9, 2014, and recorded on September 29, 2015, as
Instrument No. 2015085465 in the Official Records of Sonoma County, to, among other things,
revise the specifications for the Water Tank (the “First Amendment”).
C. On September 9, 2016, Redwood Equities and Developer entered into an
Assignment and Assumption Agreement recorded in the Official Records of Sonoma County as
Instrument No. 2017039425, whereby Redwood Equities assigned all rights and obligations of
the Development Agreement to Developer, Penn Grove Mountain, LLC, and Developer assumed
all rights and obligations of the Development Agreement, as amended.
D. Thereafter, the City and Developer entered into that certain Second Amendment
to Development Agreement dated February 28, 2018 and recorded on February 28, 2018, as
Instrument No. 2018013757 in the Official Records of Sonoma County, to revise certain
conditions associated with the timing of the construction of the Water Tank (the “Second
Amendment”), that certain Third Amendment to Development Agreement dated April 19, 2019
and recorded on May 20, 2019, as Instrument No. 2019033687 in the Official Records of
Sonoma County to address revisions regarding the water tank (the “Third Amendment”), that
certain Fourth Amendment to Development Agreement dated November 26, 2019 and recorded
on December 5, 2019, as Instrument No. 2019092549 in the Official Records of Sonoma County
to redistribute the number of income-restricted units available at each income level for the 36-
unit affordable housing apartment complex and ensure the on-site manager’s unit remains
affordable (the “Fourth Amendment”), that certain Notice of Extension of Term of
Development Agreement dated May 18, 2020, and recorded on June 9, 2020, as Instrument No.
2020044908 in the Official Records of Sonoma County to extend the term of the Development
Agreement (the “Notice of Extension”), and that certain Fifth Amendment to Development
Agreement dated _____________, 2020 and recorded concurrently herewith in the Official
Records of Sonoma County to ensure consistency with the reservation of low income housing tax
credits for the Project (defined below) (the “Fifth Amendment”). The Original Development
Agreement as amended by the First Amendment, Second Amendment, Third Amendment,
Fourth Amendment, the Notice of Extension, and Fifth Amendment may be collectively referred
to herein as the “Development Agreement.”
B. Assignor has now entered into that certain Purchase and Sale Agreement dated as
of _____________, 2020 (the “Purchase Agreement”), pursuant to which, among other things,
Assignor has agreed to transfer and convey to Assignee all of Assignor’s rights in and to the portion
of the Property described in Exhibit B attached hereto (the “Assigned Property”).
C. Assignor and Assignee desire that Assignor to assign to Assignee certain rights,
title and interest in and to the Development Agreement to the extent relating to the Assigned
Property, as described below. Development of Willow Glen Apartments on the Assigned Property
as a 36-unit affordable apartment project in accordance with the Development Agreement and
entitlements referred to therein is referred to herein as the “Project.” That portion of the Property
that is not the Assigned Property or has been otherwise assigned by Assignor in accordance with
the Development Agreement is referred to herein as the “Remaining Property.”
NOW, THEREFORE, Assignor and Assignee agree as follows:
1. Assignment. For and in consideration of the mutual covenants and agreements
contained in this Assignment, and other good and valuable consideration, the receipt and adequacy
of which is acknowledged, Assignor assigns to Assignee only the following rights and obligations
(referred to herein as the “Assigned Rights and Obligations”) as these pertain exclusively to the
Assigned Property:
(a) Section 5.04 and Exhibit D, as to the Affordable Apartment Complex; and
(b) Sections 2.01, 2.03-2.08, 3.01-3.03, 3.05-3.14, 4.01, 4.08, 4.09, 4.14, 5.01-5.03,
6.01-6.03, 7.01-7.07, 8.01-8.03, 9.01-9.09, 10.01-10.05, 10.7, 10.09-10.13, as to the
Assigned Property.
Assignee hereby acknowledges that the Assigned Rights and Obligations are subject to the
timing and phasing of the development of the Remaining Property as set forth in the Development
Agreement.
2. Remaining Obligations. Assignor acknowledges and agrees that it remains subject
to all rights and obligations set forth in the Development Agreement, except the Assigned Rights
and Obligations expressly set forth in Section 1 above or such rights and obligations as have been
previously assigned (the “Remaining Rights and Obligations”).
(a) Sections 4.03, 4.05, 4.07, 4.11-4.13, and 4.15, and Section 5.04 and Exhibit D,
except as to the Affordable Apartment Complex; and
(b) Sections 2.01-2.09, 3.01-3.14, 4.01, 4.02, 4.04, 4.06, 4.08-4.10, 4.14, 5.01-5.03,
6.01-6.03, 7.01-7.07, 8.01-8.03, 9.01-9.09, 10.01-10.05, 10.7, 10.09-10.14, as to the
Remaining Property.
Assignor hereby acknowledges that the Remaining Rights and Obligations are subject to
the timing and phasing of the development of the Property as set forth in the Development
Agreement.
3. Acceptance and Assumption. Assignee hereby accepts the assignment of the
Assigned Rights and Obligations from Assignor, and assumes and agrees to perform all of the
Assigned Rights and Obligations.
4. Future Assignments. The parties acknowledge that the following assignments are
permitted by Assignee under the Development Agreement with notice to City:
(a) General Partner Change. The withdrawal, removal, and/or replacement of
a general partner of the Assignee pursuant to the terms of that certain Amended and
Restated Agreement of Limited Partnership of the Assignee dated as of _____________,
2020 (“Partnership Agreement”); and
(b) Limited Partner Transfer. The transfer of limited partnership interests of
the Assignee to an affiliate or to a non-affiliate of the Limited Partner or Special Limited
Partner pursuant to the terms of the Partnership Agreement ("Limited Partner" means
RBC Community Investments, LLC, an Illinois limited liability company, and any affiliate
which becomes a limited partner or state limited partner under the Partnership Agreement
and any successor limited partner or state limited partner under the Partnership Agreement
and “Special Limited Partner” means RBC Community Investments Manager II, Inc., a
Delaware corporation, and any affiliate which becomes a special limited partner under the
Partnership Agreement and any successor special limited partner under the Partnership
Agreement) ; and
(c) Purchase Option and Right of First Refusal. The transfer of the Project or
the limited partnership interests to the Project’s general partner following the expiration of
the 15-year compliance period, pursuant to the purchase option and/or right of first refusal
as contemplated by the Purchase Option and Right of First Refusal Agreement attached to
the Partnership Agreement.
5. Further Assurances. Assignor hereby covenants that it will, at any time and from
time to time upon written request therefor, execute and deliver to Assignee, its nominees,
successors and/or assigns, any new or confirmatory instruments and do and perform any other acts
which Assignee or its nominees, successors and/or assigns may request in order to fully transfer
possession and control of, and protect the rights of Assignee and its successors and/or assigns in,
all the rights, benefits and privileges intended to be transferred and assigned hereby. Assignee
hereby covenants that it will, at any time and from time to time upon written request therefor,
execute and deliver to Assignor, its nominees, successors and/or assigns, any new or confirmatory
instruments and do and perform any other acts which Assignor or its nominees, successors and/or
assigns may request in order to fully confirm and vest in Assignor and its successors and/or assigns
in, all the obligations, rights, benefits and privileges intended to be transferred by the acceptance
and assumption herein.
6. Successors. This Assignment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
7. Counterparts. This Assignment may be executed in counterparts, each of which
shall be deemed an original, but all of which, taken together, shall constitute one and the same
instrument.
8. Amendment. This Assignment may only be amended or modified by a written
instrument executed by all of the parties hereto with the prior written consent of the City of Rohnert
Park.
9. Governing Law. The validity, interpretation and performance of this Assignment
shall be controlled by and construed under the laws of the State of California.
10. Severability. If any term, covenant, condition or provision of this Assignment, or
the application thereof to any person or circumstance, shall to any extent be held by a court of
competent jurisdiction or otherwise by law rendered invalid, void or unenforceable, the remainder
of the terms, covenants, conditions or provisions of this Assignment, or the application thereof to
any person or circumstance, shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
11. Notices; Cure Rights. All notices shall be in writing, and shall be given in the
manner prescribed by Section 10.06 of the Development Agreement. Pursuant to Section 10.06
of the Development Agreement, the address for Assignee is:
Willow Glen Partners, L.P.
c/o Burbank Housing Development Corporation
790 Sonoma Avenue
Santa Rosa, CA 95404
Attn: Lawrance Florin
And:
c/o Penn Grove Mountain LLC
241 Center Street, Suite A
Healdsburg, CA 95448
Attn: Ben Van Zutphen
In addition, any notices of default shall be provided simultaneously to the Limited Partner at the
following address, and any cure made or tendered by the Limited Partner under the terms of the
Development Agreement shall be deemed to be made by the Partnership and shall be accepted or
rejected on the same basis:
c/o RBC Community Investments, LLC
600 Superior Avenue, Suite 2300
Cleveland, Ohio 44114
Attention: President and General Counsel
with a copy to:
Bocarsly Emden Cowan Esmail & Arndt LLP
633 West Fifth Street, 64th Floor
Los Angeles, California 90071
Attention: Kyle Arndt, Esq.
(213) 239-8048
12. Authority. Each individual executing this Assignment on behalf of a corporation
or other legal entity represents and warrants that: (a) he or she is duly authorized to execute and
deliver this Assignment on behalf of said corporation or other legal entity in accordance with and
without violating the provisions of its governing documents, and (b) this Assignment is binding
upon and enforceable against said corporation or other legal entity in accordance with its terms.
Any entity signing this Assignment on behalf of a corporation or other legal entity hereby
represents and warrants in its own capacity that it has full authority to do so on behalf of the
corporation or other legal entity.
IN WITNESS WHEREOF, the parties have entered into this Assignment as of the Effective
Date.
“ASSIGNOR”
PENN GROVE MOUNTAIN, LLC, a
California limited liability company
By: ________________
Ben Van Zutphen, Manager
“ASSIGNEE”
WILLOW GLEN PARTNERS, L.P.
a California limited partnership
By: Willow Glen LLC, a California limited
liability company, its Managing General
Partner
By: Burbank Housing Development
Corporation, a California nonprofit
public benefit corporation, its sole
member and manager
By: __________________
Lawrance Florin
Chief Executive Officer
By: Bridge 2020 LLC, a California limited
liability company, its Administrative
General Partner
By: Penn Grove Mountain LLC, a
California limited liability
company, its sole member
By: __________________
Ben Van Zutphen
Manager
The City hereby consents to the foregoing Assignment and Assumption of Development
Agreement, pursuant to Section 8.02 of the Development Agreement.
CITY:
City of Rohnert Park, a municipal
corporation
By:
Darrin Jenkins, City Manager
Authorized by City Council Resolution 2020-_____,
adopted on November 10, 2020.
Approved as to Form:
By:
Michelle Marchetta Kenyon, City Attorney
Attest:
By:
Sylvia Lopez Cuevas, City Clerk
[Exhibits A and B to be inserted]
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Rohnert Park
Attn: City Clerk
130 Avram Avenue
Rohnert Park, CA 94928-2486
(Space Above This Line for Recorder's Use Only)
[Exempt from recording fee per Gov. Code § 27383]
AFFORDABLE HOUSING COVENANT
This Affordable Housing Covenant (the "Covenant") is entered into as of this _________
day of ____________________, 2020 (“Effective Date”), by and between the CITY OF
ROHNERT PARK, a California municipal corporation (the "City ") and WILLOW GLEN
PARTNERS, L.P., a California limited partnership (the "Developer").
Recitals
A. Developer is the owner of that certain real property in the City of Rohnert Park,
County of Sonoma, designated as Assessor’s Parcel Number 047-111-058, also known as Parcel
D, as shown on the Final Map for the Southeast Estates Subdivision recorded on October 25, 2016,
as document number 2016-054215 in the Official Records of the County of Sonoma, State of
California (“Official Records”), in Book 781 of Maps, Pages 31- 38, and more particularly
described in Exhibit A attached hereto (the "Site"). Developer desires to construct a thirty-six
(36) unit affordable rental apartment project on the Site, which development was approved by City
as Final Development Plan–Southeast Area, City Council Resolution No. 2010-137 (the "Project"),
and amended by Resolution No. 2014-165.
B. Rohnert Park Municipal Code section 17.07.020(N) sets forth certain inclusionary
requirements for residential developments. Pursuant to section 17.07.020(N), at least fifteen
percent of all new dwelling units in a rental housing development must be made affordable to very
low- and low-income households.
C. City and Developer’s predecessor-in-interest, Penn Grove Mountain, LLC
(“Original Developer”) are parties to a Development Agreement dated December 7, 2010,
recorded in the Official Records as Instrument No. 2010114199 (as amended, the “Development
Agreement”), setting forth Developer’s rights and obligations with respect to development of a
477 unit residential community, commonly known as Willow Glen (“Willow Glen Development”)
comprised of approximately 405 market-rate units (“Market Rate Units”), together with 28
affordable duet units, 8 affordable townhome units and the 36 affordable rental units comprising
the Project. Pursuant to an Assignment and Assumption of Development Agreement and Consent
of City recorded concurrently herewith, Developer has assumed all rights and obligations with
respect to development of the Project. Development of the Project on the Site is intended to satisfy
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Developer’s inclusionary obligations under the Municipal Code with respect to the Willow Glen
Development.
D. Developer and City desire to set forth Developer's obligations to provide affordable
housing in a recorded document.
Terms
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth
herein, the City and Developer agree as follows:
1. Use of the Site.
Developer hereby covenants and agrees that during the term set forth in Section 7 below,
Developer shall develop the Site and use and operate the Project in compliance with all of the
following:
1.1. Development. Developer shall construct the Project on the Site within the time set
forth in the Development Agreement. As described below in Section 1.2, all thirty-six (36) units
in the Project shall be restricted to households at the income levels set forth herein (the "Affordable
Units")
1.2. Rent and Income Restrictions.
(a) Six (6) of the Affordable Units shall be rent restricted and occupied by a
household whose income does not exceed thirty percent (30%) of the Area Median
Income (“Extremely Low Income Units”); twelve (12) units shall be rent restricted and
occupied by a household whose income does not exceed fifty percent (50%) of the Area
Median Income (“Very Low Income Units”); seventeen (17) of the Affordable Units shall
be rent restricted and occupied by a household whose income does not exceed sixty-five
percent (65%) of the Area Median Income; and, one (1) of the Affordable Units shall be a
manager’s unit which shall be rent restricted and occupied by a household whose income
does not exceed one hundred twenty percent (120%) of the Area Median Income
(“Moderate Income Unit”). As used herein “Area Median Income” shall be as defined by
the United States Department of Housing and Urban Development ("HUD") in
accordance with California Health & Safety Code Section 50093. In the event that HUD
ceases promulgating such Area Median Income determinations for a period of at least 18
months, the parties shall substitute a standard reasonably similar with respect to methods
of calculation to that published by HUD in order to determine Area Median Income.
(b) Affordable rent for the Affordable Units at each income level shall be
established in accordance with Health & Safety Code section 50053.
(c) Affordable Units shall be comparable in overall quality of construction to
the Market Rate Units within the Willow Glen Development. The Very Low Income Units
and Low Income Units shall each include a mix of 1-, 2- and 3-bedroom units.
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(d) Developer may not rent an Affordable Unit to a prospective tenant unless
and until Burbank Housing Management Corporation or another affordable housing
management company acceptable to City in its sole discretion, has certified the tenant for
compliance with the requirements of this Section. Following initial lease-up, Developer
shall submit annually the report(s) described in Section 1.4 below. If the City opts to act
as, or designate a third party to act as, the Certifying Agency (defined in Section 1.4 below),
then Developer shall pay City a reasonable annual monitoring fee as may be adopted by
resolution of the City Council from time to time and which is in force and effect for a class
of affordable rental units similar to the Affordable Units. For units where compliance has
been certified by the California Tax Credit Allocation Committee (“CTCAC”), HUD, or
the Sonoma County Housing Authority, the City may accept compliance certification from
such agency or agencies.
(e) If, upon annual recertification of a tenant’s household income, it is
determined that the tenant’s household income has increased such that tenant’s income
exceeds the qualifying income level for tenant’s unit, then that unit shall be reclassified at
the appropriate income level and the next available unit shall be rented to a household at
the tenant’s original income level so that the mix of Affordable Units in the Project is
maintained over time. If a tenant’s household income, adjusted for family size appropriate
to the unit, exceeds 140% of the Low Income Unit income limit (140% of 80% of AMI),
Developer shall provide or cause its management company to provide written notice to the
tenant, who shall be required to vacate the Affordable Unit by the date that is three (3)
months following the date of the notice or upon expiration of the tenant’s lease, whichever
is later.
(f) Occupancy of the Affordable Units shall be continuous, subject only to brief
periods of vacancy as reasonable necessary to maintain and affirmatively market the
Affordable Units between periods of tenancy.
1.3. Marketing Program. Except as otherwise prohibited by applicable law, Developer
shall design a marketing program to specifically target the marketing of the Affordable Units to
persons and households who live and/or work in Rohnert Park. If, despite its best efforts to lease
all available Affordable Units to persons and households who live and/or work in Rohnert Park,
one or more Affordable Units remain vacant, then Developer may market the availability to such
units to persons and households outside of Rohnert Park. The marketing plan must be in a form
and content reasonably acceptable to the City and include, among other things, the following:
(a) A plan to market the Affordable Units to eligible persons and households who
live and/or work in Rohnert Park; and
(b) Procedures for the rental of Affordable Units, including the creation of a waiting
list, eligibility determination, income certification and annual recertification.
Promptly following City’s request made from time to time during the term, Developer shall
provide a written update to City regarding the status of Developer’s marketing and leasing efforts.
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1.4. Reporting Requirements. Annual reports, which may be in the same format as the
annual compliance reports submitted by Developer to CTCAC, must be submitted by Developer
to City or such other governmental agency or other certifying organization as City may designate
from time to time to review and certify Developer’s compliance with the requirements of this
Covenant (the “Certifying Agency”) by August 15th each year, commencing after the first
anniversary of the date of completion of construction of the Project. To the extent CTCAC reports
are not available for some or all of the Affordable Units, the annual reports, at a minimum, shall
include:
(a) The number of persons per Affordable Unit
(b) Tenant's name(s)
(c) Initial occupancy date
(d) Rent paid per month
(e) Gross income per year and income category
(f) Percent of rent paid in relation to income
(g) Sources of income
(h) Method of verification of income
(i) Address of Affordable Unit and unit type
(j) Status of program, including any problems experienced during the reporting
period
(k) Financial audit of Project revenues and expenses, including reserve fund
deposits
If requested by City or the Certifying Agency, the annual report shall be accompanied by
copies of the documents used in report preparation. City may from time to time during the term
of this Covenant request additional or different information and Developer shall promptly supply
such information in the reports required hereunder. City, at its discretion, may designate the form
on which the information shall be supplied to the City or the Certifying Agency. Upon request for
examination by the City, Developer at any time during normal business hours shall make available
to City or the Certifying Agency, at the Project or another location within the City of Rohnert Park,
all of Developer's records with respect to all matters covered by this Covenant. Developer shall
permit the City or its Certifying Agency to audit, examine and make excerpts or transcripts from
these records and Developer shall also permit the City or its Certifying Agency to inspect the Site
and the Project, with reasonable prior notice and subject to rights of tenants.
1.5. Lease Provisions. Developer shall use a form of tenant lease (the “Tenant Lease”)
approved by the City for the Affordable Units. City’s approval shall not be unreasonably withheld,
conditioned or delayed. The Tenant Lease shall:
(a) provide for termination of the lease for failure: (1) to provide any
information required under this Covenant or reasonably requested by Developer to
establish or recertify the tenant’s qualification, or the qualification of the tenant’s
household, as an income eligible household in accordance with this Covenant, or (2) to
qualify as an eligible household as a result of any material misrepresentation made by such
tenant with respect to the household income computation or certification;
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(b) provide that the rent may not be raised more often than once every twelve
(12) months and that at least sixty (60) days ’ written notice shall be required prior to
implementation of any rent increase of 10% or more;
(c) prohibit subleasing of the Affordable Unit or any portion of the Affordable
Unit or any spaces reserved for the use of the tenant;
(d) contain nondiscrimination provisions;
(e) include tenant with a right and obligation to inform Developer of any need
for maintenance or repair;
(f) allow termination of the tenancy only for an increase in tenant’s household
income above applicable qualifying income limits or for good cause, including violation
of the terms and conditions of the Tenant Lease, violations of applicable federal, state, or
local law, or other good cause; and
(g) be for an initial term of one year.
1.6. Reconciling Inconsistencies among CTCAC, State Law and City Affordable
Housing Ordinance Requirements. Notwithstanding anything to the contrary herein, if tax credit
financing is used in connection with development of the Project, City agrees that for the duration
of the tax credit regulatory agreement, “Area Median Income” and “affordable rent”, including
allowances (such as utility allowances), qualifications (such as next available unit rule for over
income tenants) and other similar adjustments, for the 30%, 50%, 65% and 120% income levels
required by this Covenant, shall be calculated using the same methodology that CTCAC applies
to the Project.
2. Restrictions on Transfer.
2.1. No voluntary or involuntary successor in interest of Developer shall acquire all or
any portion of Developer's interest in the Site or the Project except as expressly set forth herein.
It is hereby expressly stipulated and agreed that any assignment, sale, transfer or other disposition
of Developer's interest in the Site or the Project, or any portion(s) thereof or interest(s) therein, in
violation of this Section 2 shall be null, void and without effect and shall be ineffective to relieve
Developer of its obligations under this Covenant. Upon any assignment, sale, transfer or other
disposition of Developer's interest in the Site and the Project that complies with the requirements
of this Section 2, Developer shall be fully released from its obligations hereunder to the extent
such obligations have been fully assumed in writing by the transferee pursuant to a recordable
assignment and assumption agreement in a form reasonably acceptable to the City's legal counsel.
No later than the date the assignment becomes effective, Developer shall deliver to the City a
conformed copy of the fully executed and recorded assignment and assumption agreement.
Developer shall request approval by written notice at least sixty (60) days prior to any proposed
assignment, sale, transfer or other disposition of Developer's interest in the Site or the Project or
any portion(s) thereof or interest(s) therein and such approval shall not be unreasonably withheld.
2.2. Developer shall not assign, sell or transfer Developer's interest in the Site or the
Project, or any portion(s) thereof, or interest(s) therein without the prior written approval of the
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City Manager, or his or her designee, which approval shall not be unreasonably withheld or
delayed, and shall be granted upon City's receipt of evidence acceptable to the City that the
following conditions have been satisfied:
(a) Developer is not in default hereunder or the transferee agrees to cure any
defaults of Developer to the reasonable satisfaction of the City;
(b) The continued operation of the Project shall comply with the provisions of
this Covenant;
(c) Either (i) the transferee or its site manager has at least three years’
experience in the ownership, operation and management of similar size rental housing
projects, and at least one year's experience in the ownership, operation and management of
rental housing projects containing below-market-rate units, without any record of material
violations of discrimination restrictions or other state or federal laws or regulations or local
governmental requirements applicable to such projects, or (ii) the transferee agrees to retain
a site management firm with the experience and record described in subclause (i) above,
or (iii) Developer or its management company will continue to manage the Project for at
least one year following such transfer and during such period will provide training to the
transferee and its manager in the responsibilities relating to the Affordable Units;
(d) The transferee which is to acquire the Project does not have pending against
it, and does not have a history of significant and material building code violations or
complaints concerning the maintenance, upkeep, operation and regulatory agreement
and/or right of first refusal compliance of any of its projects as identified by any local, state
or federal regulatory agencies; and
(e) The proposed transferee enters into a written recordable assignment and
assumption agreement in form and content reasonably satisfactory to City's legal counsel,
and, if requested by the City, an opinion of such purchaser or assignee's counsel to the
effect that this Covenant is a valid, binding and enforceable obligations of such purchaser
or assignee, subject to bankruptcy and other standard limitations affecting creditor's rights.
2.3. Notwithstanding any other provision of this Covenant to the contrary, City approval
of an assignment, sale or transfer of Developer's interest in the Site or the Project or any portion
thereof shall not be required in connection with any of the following:
(a) The granting of permits to facilitate development of the Project;
(b) The rental, in the ordinary course of business, of the Affordable Units within
the Project, provided such rental shall be in accordance with the terms of this Covenant;
(c) The transfer by Developer of its interest in the Site back to Original
Developer or an affiliate of Original Developer, as provided in any purchase option
agreement to be entered into between the Developer and Original Developer.
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(e) The grant of a security interest, mortgage, assignment, conveyance and/or other
transfer of Developer’s interest in the Site and Project, or any portion thereof, for security
purposes to a Mortgagee (as defined in Section 8 below) in connection with financing or other
consideration provided by such Mortgagee (a “Mortgage Loan”); provided that such interest, as
granted, mortgaged, assigned, conveyed and/or transferred to Mortgagee, as applicable, shall be
and remain subject to the encumbrance of this Covenant; (f) (i) The transfer of title or any
other interest of Developer in and to the Site and Project, or any portion thereof, to a Mortgagee
or its designee by foreclosure (whether by judicial or non-judicial process), exercise of power of
sale, grant of deed-in-lieu of foreclosure or other process in connection with the exercise of
rights and remedies in connection with a Mortgage Loan, and (ii) if title to the Site and Project or
any portion thereof is thereafter held by such Mortgagee, the subsequent transfer of such title by
such Mortgagee to a purchaser or other successor or assign thereof; provided that in each of the
foregoing cases, such transferred title or interest shall be and remain subject to the encumbrance
of this Covenant; and
(g) For the avoidance of doubt, the parties agree that the transfer of, or within, limited
partner interests of Developer shall not require City approval.
3. No Discrimination; Compliance with Laws.
Developer covenants for itself and all persons claiming under or through it, and this
Covenant is made and accepted upon and subject to the condition that there shall be no
discrimination against or segregation of any person or group of persons on account of any basis
listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined
in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the Site or the Project or any part thereof, nor shall Developer or any person
claiming under or through Developer establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Site or the Project or any
part thereof. Developer shall include such provision in all deeds, leases, contracts and other
instruments executed by Developer, and shall enforce the same diligently and in good faith.
Developer shall comply with all other applicable federal, state and local laws and regulations,
including state and federal fair housing laws, in complying with the terms of this Covenant,
including the development of the Project and the marketing and rental of the Affordable Units.
4. Maintenance and Management.
Developer shall maintain in accordance with the Maintenance Standards (as hereinafter
defined) the private improvements and public improvements and landscaping (collectively, the
"Improvements") to the property line of the Site. The Improvements shall include, but not be
limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping,
architectural elements identifying the Project and any and all other improvements on the Site and
in the public right-of-way to the property line of the Site. To accomplish the maintenance,
Developer shall either staff or contract with and hire licensed and qualified personnel to perform
the maintenance work, including the provision of labor, equipment, materials, support facilities,
and any and all other items necessary to comply with the requirements of this Covenant. The
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maintenance covenants and obligations set forth in this Section 4 shall remain in effect for the
period of time specified in Section 6 below. To ensure compliance with this Section 4, the City,
subject to rights of tenants occupying the Affordable Units, shall have the right to inspect the
interior and exterior of the Project from time to time with reasonable prior notice to the Developer.
4.1. The following standards (collectively, "Maintenance Standards") shall be complied
with by Developer and its maintenance staff, contractors and subcontractors but do not require
extraordinary expenditures or reconstruction after condemnation or the occurrence of a substantial
casualty event:
(a) Landscape maintenance shall include: watering/irrigation; fertilization;
mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees
and shrubs to maintain a healthy, natural appearance, safe road conditions and visibility,
and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in
all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support
of trees.
(b) Clean-up maintenance shall include: maintenance of all sidewalks, paths
and other paved areas in clean and weed-free condition; maintenance of all such areas clear
of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash,
litter and other debris from improvements and landscaping prior to mowing; clearance and
cleaning of all areas maintained prior to the end of the day on which the maintenance
operations are performed to ensure that all cuttings, weeds, leaves and other debris are
properly disposed of by maintenance workers.
(c) All maintenance work shall conform to all applicable federal and state
Occupation Safety and Health Act standards and regulations for the performance of
maintenance.
(d) Any and all chemicals, unhealthful substances, and pesticides used in and
during maintenance shall be applied in strict accordance with all governmental
requirements. Precautionary measures shall be employed recognizing that all areas are
open to public access.
(e) The Improvements shall be maintained in conformance with the custom and
practice generally applicable to comparable apartment rental projects located within
Sonoma County, California. The public right-of-way improvements to the property line of
the Site shall be maintained as required by this Section 4.1 in good condition and in
accordance with the custom and practice generally applicable to public rights-of-way
within the City of Rohnert Park.
4.2. If Developer does not maintain the Improvements on the Site to the property line
of the Site in the manner set forth herein and in accordance with the Maintenance Standards, City
shall have the right to maintain such private and/or public improvements, or to contract for the
correction of such deficiencies, after written notice to Developer. However, prior to taking any
such action, City agrees to notify Developer in writing if the condition of said Improvements does
not conform to the Maintenance Standards and to specify the deficiencies and the actions required
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to be taken by Developer to cure the deficiencies. Upon notification of any maintenance deficiency,
Developer shall have thirty (30) days within which to correct, remedy or cure the deficiency. If
the written notification states that the problem is urgent and relates to the public health and safety,
then Developer shall have twenty-four (24) hours to rectify the problem. Developer agrees to pay
City upon demand all charges and costs incurred by City for such maintenance.
5. Compliance with Extended Use Agreement.
The City acknowledges that the Assignee and the California Tax Credit Allocation
Committee (the “Credit Agency”) intend to enter into an extended use agreement, which
constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of
the Internal Revenue Code, as amended (the "Code"). As of the date hereof Code Section
42(h)(6)(E)(ii) does not permit the eviction or termination of tenancy (other than for good cause)
of an existing tenant of any low-income unit or any increase in the gross rent with respect to such
unit not otherwise permitted under Code Section 42 for a period of three (3) years after the date
the building is acquired by foreclosure or by instrument in lieu of foreclosure. In the event the
extended use agreement required by the Credit Agency is recorded against the Project, the City
agrees to comply with the provisions set forth in Code Section 42(h)(6)(E)(ii).
6. No Impairment of Lien.
No violation or breach of the covenants, conditions, restrictions, provisions or limitations
contained in this Covenant shall defeat or render invalid or in any way impair the lien or charge of
any mortgage, deed of trust or other financing or security instrument; provided, however, that any
successor of Developer to the Site shall be bound by such covenants, conditions, restrictions,
limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu
of foreclosure, trustee's sale or otherwise.
7. Duration.
The covenants set forth herein shall remain in effect until the date that is sixty (60) years
following the Effective Date, or such longer period as may be mutually agreed by the parties.
8. Covenants Running with the Land.
Subject to the restrictions on transfer set forth in Section 2 above, the covenants contained
in this Covenant shall inure to the benefit of the City and its successors and assigns and shall be
binding upon Developer and any successor in interest to Developer's interest in the Site or the
Project or any part thereof. The covenants shall run in favor of the City and its successors and
assigns for the entire period during which such covenants shall be in force and effect, without
regard to whether the City is or remains an owner of any land or interest therein to which such
covenants relate. The City and its successors and assigns, in the event of any breach of any such
covenants, shall have the right to exercise all of the rights and remedies, and to maintain any
actions at law or suits in equity or other proper proceedings to enforce the curing of such breach.
In the event of foreclosure or transfer by deed-in-lieu of all or any portion of the Site prior to
completion of the Project, title to all or any portion of the Site shall be taken subject to this
Covenant. Developer acknowledges that compliance with this Covenant is a land use requirement
and a requirement of the Development Agreement, and that no event of foreclosure or trustee’s
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sale may remove these requirements from the Site.
9. No Subordination; Notice to Mortgagees.
In no event shall this Covenant be subordinated to, or recorded subordinate to, any
mortgage, deed of trust, or other security instrument or lien encumbering the Site, other than the
lien for current unpaid taxes. If City receives a notice from the holder of any mortgage, deed of
trust, security agreement, or other like security instrument encumbering all or any portion of the
Site (a “Mortgagee”) requesting a copy of any notice of default given Developer hereunder and
specifying the address for service thereof, then City agrees to use its diligent, good faith efforts to
deliver to such Mortgagee, concurrently with service thereon to Developer, any notice of default
given to Developer. Each Mortgagee shall have the right during the same period available to
Developer to cure or remedy, or to commence to cure or remedy, the event of default claimed or
the areas of noncompliance set forth in City’s notice of default. If a Mortgagee is required to
obtain possession in order to cure any default, the time to cure shall be tolled so long as the
Mortgagee is attempting to obtain possession, including by appointment of a receiver or
foreclosure, but in no event may this period exceed 120 days from the date the City delivers the
notice of default to Developer.
10. Default.
10.1. Any failure by Developer to perform any term or provision of this Covenant shall
constitute an "Event of Default" if Developer does not cure such failure within thirty (30) days
following written notice of default from City or, if such failure is not of a nature which can be
cured within such thirty (30) day period, the Developer does not within such thirty (30) day period
commence substantial efforts to cure such failure, or thereafter does not within a reasonable time
prosecute to completion with diligence and continuity the curing of such failure. Any cure of any
default made or tendered by one or more of Developer’s limited partners shall be deemed to be a
cure by the Developer and shall be accepted or rejected on the same basis as if made or tendered
by the Developer. Upon the occurrence and continuation of an Event of Default, the City shall be
entitled to the following, in addition to all other remedies provided in Section 4 above or at law or
in equity:
(a) To compel specific performance by Developer of its obligations under this
Covenant, it being recognized that the beneficiaries of Developer's obligations hereunder
cannot be adequately compensated by monetary damages in the event of Developer's
default.
(b) To the extent permissible under laws and regulations protecting individual
confidentiality, to have access to, to inspect, and to make copies and to audit all books and
records of Developer pertaining to the Project.
(c) To cause Developer to pay to the City, if the cure period has been exceeded
and no cure has been achieved, as a penalty, an amount equal to: (i) all rent received by
Developer with respect to an Affordable Unit(s), if such unit(s) are knowingly or grossly
negligently rented to persons who do not comply with the requirements for such units set
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forth in this Covenant, and (ii) the amount by which the rent(s) charged to eligible person(s)
or household(s) exceeds the Affordable Rent applicable to such Affordable Unit(s).
(d) To conduct an evaluation of, and direct Developer with respect to, the
management and operation of the Project. The expenses of the City of any consultants
associated with such evaluation and direction shall be reimbursed by Developer.
Developer shall follow all such directives, which may, at the option of the City, include
replacing existing management with new management. In the event such default includes
the failure of the Developer to make any required payment to the City in a timely manner,
or the imminent closure of the Project, the City may at its sole discretion select the new
management. The City may retain attorneys and consultants to assist in such evaluation
and the Developer shall pay the reasonable fees and expenses of such attorneys and
consultants and any other reasonable expenses incurred by the City in connection therewith.
10.2. Any notice of default given hereunder shall specify in detail the nature of the failure
in performance which the City claims constitutes the Event of Default and the manner in which
such Event of Default may be satisfactorily cured in accordance with the terms and conditions of
this Covenant. During the time periods herein specified for cure of a failure to perform, the
Developer shall not be considered to be in default of this Covenant for any purposes.
10.3. No right, power, or remedy given to the City by the terms of this Covenant is
intended to be exclusive of any other right, 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 this Covenant or by any statute or ordinance or otherwise against Developer
and any other person. Any failure or delay by the City in asserting any of its rights or remedies as
to any Event of Default shall not operate as a waiver of any Event of Default or of any such rights
or remedies or deprive the City of its right to institute and maintain any actions or proceedings
which it may deem necessary to protect, assert or enforce any such rights or remedies.
11. Notices.
All notices required herein shall be sent by certified mail, return receipt requested and shall
be effective as of the date received or the date delivery was refused as indicated on the return
receipt as follows:
To the Developer:
Willow Glen Partners, L.P.
c/o Burbank Housing Development Corporation
790 Sonoma Avenue
Santa Rosa, CA 95404
Attn: Lawrance Florin
To the City:
City of Rohnert Park
Development Services
130 Avram Avenue
12
Rohnert Park, CA 94928
To the Developer’s limited partner:
c/o RBC Community Investments, LLC
600 Superior Avenue
Suite 2300
Cleveland, Ohio 44114
Attention: President and General Counsel
with a copy to:
Bocarsly Emden Cowan Esmail & Arndt LLP
633 West Fifth Street, 64th Floor
Los Angeles, California 90071
Attention: Kyle Arndt, Esq.
(213) 239-8048
Either party may change its notice address from time to time by written notice to the other party.
12. Severability.
In the event that any limitation, condition, restriction, covenant or provision in this
Covenant is held to be invalid, void or unenforceable by any court of competent jurisdiction, the
remaining portions of this Covenant shall, nevertheless, be and remain in full force and effect.
13. Entire Agreement.
This Covenant constitutes the entire agreement between the parties with respect to the
subject matter hereof and no modification hereof shall be binding unless reduced to writing and
signed by the parties hereto.
14. Applicable Law.
This Covenant shall be governed by the laws of the State of California without reference
to its choice of law provisions.
15. Indemnification.
With the exception of events arising from the City and the Certifying Agency’s gross
negligence or willful misconduct, Developer shall indemnify and hold harmless City and the
Certifying Agency its and their elected officials, officers, employees and agents in their official
capacity (hereinafter collectively referred to as “Indemnitees”), and any of them, from and against
all loss, all risk of loss and all damage (including reasonable attorneys’ fees and costs and other
expense) sustained or incurred because of or by reason of any and all claims, demands, suits,
actions, judgments and 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 development or operation
13
of the Project, the Affordable Units, or Developer’s performance or non-performance under this
Covenant, and shall protect and defend Indemnitees, and any of them with respect thereto, except
to the extent arising from the negligence or willful misconduct of the Indemnitees. The provisions
of this Section shall survive expiration or other termination of this Covenant.
16. Estoppel Certificate.
Developer or its lender may, at any time, and from time to time, deliver written notice to
City requesting the City to certify in writing that, to the knowledge of the City (a) this Covenant
is in full force and effect and is a binding obligation of the parties, (b) this Covenant has not been
amended or modified or, if so amended or modified, identifying the amendments or modifications,
and (c) Developer is not in default in the performance of its obligations under this Covenant, or if
in default, to describe the nature of any defaults. Developer and City acknowledge that a certificate
hereunder may be relied upon by the Developer and Mortgagees. The City Manager shall be
authorized to execute any certificate requested by Developer in a form reasonably approved by the
City Attorney. Developer shall pay all costs borne by City in connection with its review of any
proposed estoppel certificate.
17. Recording of Covenant.
This Covenant shall be recorded against the Site in the Official Records of the County of
Sonoma prior to the recordation of any parcel map or final subdivision map or issuance of any
building permit for the Project, whichever occurs first.
18. Interpretation.
Each party to this Covenant has had an opportunity to review the Covenant, confer with
legal counsel regarding the meaning of the Covenant, and negotiate revisions to the Covenant.
Accordingly, neither party shall rely upon Civil Code Section 1654 in order to interpret any
uncertainty in the meaning of this Covenant.
19. Counterparts.
This Covenant may be executed in counterparts.
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IN WITNESS WHEREOF, City and Developer have caused this Covenant to be executed
on their behalf by their respective officers thereunto duly authorized.
"DEVELOPER": WILLOW GLEN
PARTNERS, L.P.
a California limited partnership
By: Willow Glen LLC, a California limited
liability company, its Managing General
Partner
By: Burbank Housing Development
Corporation, a California nonprofit
public benefit corporation, its sole
member and manager
By: __________________
Lawrance Florin
Chief Executive Officer
By: Bridge 2020 LLC, a California limited
liability company, its Administrative
General Partner
By: Penn Grove Mountain LLC, a
California limited liability company,
its sole member
By: __________________
Ben Van Zutphen
Manager
"CITY": CITY OF ROHNERT PARK
By: Darrin Jenkins, City Manager
Authorized by City Council Resolution 2020-_____,
adopted on November 10, 2020.
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ATTEST:
Sylvia Lopez Cuevas, City Clerk
APPROVED AS TO FORM:
Michelle Marchetta Kenyon, City Attorney
Exhibit A
EXHIBIT A
Legal Description of the Site
The land referred to herein below is situated in the City of Rohnert Park, County of Sonoma,
State of California, and is described as follows:
PARCEL ONE:
Parcel D, as shown on the Maps entitled “Southeast Estates Subdivision”, filed in the Office of
the County Recorder on October 25, 2016, in Book781 of Maps, Pages 31 through 38, Sonoma
County Records.
Reserving therefrom for the benefit of Parcel “E” that portion of the 10’ Private Drainage
Easement over Parcel “D”, as said Parcel and easement are shown on the Maps entitled
“Southeast Estates Subdivision”, filed in the Office of the County Recorder on October 25, 2016,
in Book781 of Maps, Pages 31 through 38, Sonoma County Records.
A.P. No. 047-111-058-000
PARCEL TWO:
A Private Drainage Easement over Parcel “C”, as said Parcel and easement are shown on the
Maps entitled “Southeast Estates Subdivision”, filed in the Office of the County Recorder on
October 25, 2016, in Book781 of Maps, Pages 31 through 38, Sonoma County Records.
PARCEL THREE:
A 10’ Private Storm Drain Easement over Parcel “C”, as said Parcel and easement are shown on
the Maps entitled “Southeast Estates Subdivision”, filed in the Office of the County Recorder on
October 25, 2016, in Book781 of Maps, Pages 31 through 38, Sonoma County Records.
PARCEL FOUR:
A 10’ Private Drainage Easement over Parcel “E”, as said Parcel and easement are shown on the
Maps entitled “Southeast Estates Subdivision”, filed in the Office of the County Recorder on
October 25, 2016, in Book781 of Maps, Pages 31 through 38, Sonoma County Records.
Excepting therefrom that portion of said easement lying within Parcel One above.
NOTARY ACKNOWLEDGMENTS
[TO BE INSERTED]