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SR-9A (11) SEP 1 6 1997 F \HOUSING\sHARE\WPFILES\ST AFFRPT'04THSTRPT WPD Council Meeting September 16, 1997 Santa Momca, C9) To Mayor and City Council From City Staff Subject Proposed amendments and waiver of CitYWide Housing Trust Fund gUidelines, and adoption of a resolution to Forego Pubhc Bidding procedures for Construction of a Public Parking Structure at 1136-1144 Fourth Street INTRODUCTION This report addresses recommended changes to the CitYWide Housing Trust Fund Guidelines as well as recommended Council actions necessary to accommodate the construction of the Fourth Street Senior Housing Project ThIS report recommends that the City Council take the follOWing actions a) authonze staff to amend all four City Housing Trust Funds to permit the option to administratively waive the City requirement for a Regulatory Agreement and to eliminate the Borrower's option to request an extension of the term of the City's loan In lieu of loan repayment In the case of all projects funded under the HUD Section 202 and Section 811 Programs; b) waive the Citywide Housing Trust Funds GUidelines, on a one-tIme basIs only, to permit as an eligible actIVIty the construction of the public parking structure to be constructed under the Fourth Street Senior Citizen HOUSing Project and to pay the Parking Authonty for the loss of parking meter revenue dunng construction; c) adopt a resolution With findings to forego the bidding procedures for construction of the public parking structure to be constructed under and as the foundatlon for the Fourth Street Senior Cittzen HOUSing Project 9A -1- SEP 1 6 1997 BACKGROUND AND DISCUSSION What follows is background and discussion on each of the three recommendations being presented for City Council approval. Amendment to Trust Fund Guidelines for Section 202 and 811 Proiects Staff recommends that City Council approve an amendment to the City's four housing Trust Fund Program gUidelines to prOVide staff with the option to administratively waive certain requirements of those GUidelines for HUD Section 202 and Section 811 proJects, depending upon the IndiVidual requirements of the source of funds The purpose of such a waiver IS to aVOid duplication of HUD requirements and to structure City financing of Section 202 and Section 811 projects to more closely resemble conventional lending actiVities exempt under Article XXXIV of the State Constitution The City has four different funds from which It makes 10ngMterm loans to construct affordable housing the Citywide Housing Trust Fund, the CitYWide Housing Acquisition and Rehabilitation Trust Fund Program (CHARP), the PICO Neighborhood Housing Trust Fund, and the HOME Trust Fund While each of these trust funds IS governed by a different set of program gUidelines, all four Involve many of the same reqUirements, Including a requirement for a City Regulatory Agreement The Regulatory Agreement has been the primary mechanism used to ensure that the housing remains restricted and affordable to low and moderate Income households In particular, the Regulatory -2- Agreement sets forth requirements concerning project rents, marketing and management procedures, and tenant income and selection From time to time, affordable housing projects bUilt in the City of Santa Monica receive primary funding from another source, such as the federal government, while receiving secondary funding from the City. Projects funded under the Section 202 Supportive Housing for the Elderly Program and Section 811 Supportive Housing for the Disabled Program are good examples. Since 1993, Section 202 and Section 811 funding awards totaling approximately $164 million have been made to four projects including 201 affordable housing units in the City. Staff anticipates that there may be additional Section 202 and Section 811 projects proposed in the City In the near future. The HUe Section 202 and 811 programs reqUire federal Regulatory Agreements of their own. A copy of the standard HUD Regulatory Agreement for the Section 202 program IS provided In Attachment A. The baSIC requirements of the HUD Regulatory Agreement are very similar to the City's standard Regulatory Agreement. For example, the HUe Regulatory Agreement sets forth requirements concerning the proJect's operating budget and procedures; management procedures, establishment of a reserve fund, annual finanCial reporting, bookkeeping, assignment of rents as security, and, tenant selection crltena These requirements closely mirror the basic reqUirements of the City's standard Regulatory Agreement. -3- One of the few basic differences between the HUD Regulatory Agreement and the City Regulatory Agreement is the term of the Agreement. While the HUD Regulatory Agreement requires a forty (40) year term, the term required by the City varies depending upon which of the four Trust Funds is used to finance the project. The PICO Neighborhood Trust Fund and CHARP Trust Fund require terms of 35 years, with the City haVing the ability to extend the term by an additional 15 years In exchange for forgiVing the Borrower's loan The Citywide HOUSing Trust Fund and HOME Trust Fund reqUire a term of 50 years, With the City haVing the ability to extend the term by an additional 25 years in exchange for forgiVing the Borrower's loan Thus, the City terms are generally longer than the term reqUired by HUD Apart from the term of the Regulatory Agreement, projects funded under the Section 202 and Section 811 programs are regulated by the HUD Regulatory Agreement In much the same way as they would be regulated by the City's Regulatory Agreement. Waiving the City'S reqUirement for a Regulatory Agreement on Section 202 and Section 811 projects will assist the CIty'S efforts to preserve Its remaining Article 34 authOrity (granted under the City's own voter-approved initiative, PropOSition N). Artlde XXXIV requires that low rent hOUSing projects developed, constructed, or acqUired by any state public body be approved by a majonty of the qualified electors of the City Section 37001 5 (e) of the Health and Safety Code states that Article XXXIV shall not be Interpreted to apply to certain actiVities of a public body (I e , the City) when such body, -4- "Provides assistance to a low rent housing project and mOnitors construction or rehabilitation of such project and compliance with conditions of such assistance to the extent of: (1) carrying out routine governmental functions. (2) Performing conventional activities of a lender (3) Imposing constitutionally mandated or statutOrily authonzed conditions accepted by a grantee of assistance." Staff believes that by removing the City requirement for a Regulatory Agreement for Section 202 and Section 811 projects, the City would eliminate an aspect of the City's Involvement In affordable housing projects that In some cases may go beyond the role of a conventional lender. In thiS way, Section 202 and Section 811 projects may be able to qualify for an exemption under Section 37001 5(e) There is an additional eJement of the City's Trust Fund requirements which staff IS recommending In order to bring the City's practices in hne with a conventional lender. Specifically, as Indicated, all of the City's Trust Funds contain a provision which allows the City to accept an extension of the Regulatory Agreement for a minimum of fifteen or twenty five years (depending upon the Trust Fund) In lieu of repayment of the loan Such an option IS not a conventional lending practice Rather, It is a practice that is used by the City as the regulator of affordablllty on the project to gain a longer term of affordablllty On the HUD Sedion 202 projects, staff recommends that the City relinquish Its regulatory role to HUD In thiS regard. -5- One Time Onlv Waiver of Trust Fund Guidefines to Permit and Pay for Construction - - of Parkina Structure and Pay for Lost Parkina Meter Revenues - - - On June 15, 1993, the City Council conducted a public hearing on the sale of air rights above Parking Lot 4 to the Jewish Federation Council (JFC), authorized the sale of air nghts to JFC, and authonzed the City Manager to negotiate and execute a Option to Purchase Agreement ("Option Agreemenr) with JFC for the exclusive right to purchase the air nghts and develop the project In the Option Agreement between the City and JFC, the agreed-upon sale price for the air nghts was $2.25 million The June 15, 1993 City Council staff report made clear that the revenue from the proceeds from the sale of air rights would be used to pay for the cost of replacing the eXisting 165 public parking spaces In a new parking structure and to pay the Parking Authonty for the loss of parking meter revenue dUring construction. Thus, the cost of the parking structure Will be fully offset by the sale of air nghts Staff estimates that the cost of constructing the parking structure (Including development costs, environmental mitigations, off-site Improvements, project and construction management services, and any required testing) together with the cost of paYing the Parking Authonty for the loss of parking meter revenue during construction Will be approximately $2 25 million. It IS anticipated that construction Will begin on the public parking structure portion of the project In the early spnng, 1998, although this IS subject to change depending upon the -6- status of the legal challenge to the project However, the proceeds from the sale of air nghts will not be available until the closing of the HUD loan, which will not occur until a few months after start of construction of the parking structure Before HUD can close its loan and disburse payments for construction of the housing project, a .platform" must be In place for the hOUSing project In the case of this project, the .platform" consists of the parking structure Therefore, a large portion of the pubhc parking structure must be bUilt before the HUD funds are available to construct the hOUSing project Construction funds for the structure could be made available by the City as described below until the time of the HUD closing when the proceeds from the sale of air rights can be used to reimburse those expenditures Staff recommends that funds be made available temporarily for that purpose from the CitYWide Housing Trust funds. Under all four trust fund guidelines, use of the program funds IS limited prlmanly to construction and rehabllltatlon of affordabJe housing and associated predevelopment activities. In order to use the funds to construct the public parking structure which Will serve as a platform for the Fourth Street Semor Citizen proJect, the trust funds requirements must be waived Staff recommends that this be done on a one-time baSIS only It IS Important to note that all funds expended on the public parking structure Will be fully replenished to the housing trust funds upon the clOSing of the HUD loan and receipt by the City of the proceeds from the sale of air fights -7- Waiver of Public Biddina Reauirements for Public Parkina Structure - - - Section 2 24 071 of the Municipal Code requires that every contract involving an expenditure of more than $25,000 for public works proJects, including the construction of public bUildings, be let to the lowest bidder after appropnate notice In a newspaper of general circulation. Staff believes that the public parking structure proposed to be built under the Fourth Street Project falls under the definition of a public works project and is therefore subject to the requirements of MuniCipal Code Section 2 24071 For reasons outlined In detail below, staff believes that applYing the City's pubhc bidding reqUirements to thiS proJect would Significantly increase the costs of the project and extend the schedule, perhaps to the pOint of losing HUD funding. Therefore, staff recommends a waiver of the CIty'S bidding requIrements for the project. Under Section 2.24 071 (d) of the Municipal Code, by two-thirds vote the City Council may grant a waiver from the bidding requirements when It finds that, YThe goods or services can be purchased more economically on the open market" (Section 2 24 071(d){1)) This circumstance clearly applies to thiS project. Due to the nature of the HUD regulations governing funding for the parking structure, the project must necessanly involve two phases, Including the publiC parking structure as phase I, and the reSidentIal project as phase" However, only the public parking structure is subject to the City's bidding requirements under MUnicipal Code Secbon 224.071 -8- Funded pnmanly by HUD, the housing project IS not a public works project HUD does not require open public bidding. Therefore, If the City were to apply its bidding requirements to the public parking structure, there IS a significant risk that two separate contractors ultimately would be selected to construct each of the two project phases. The disadvantages of haVing separate contractors for each phase have to do with coordination and timing, which In turn affect costs. Those Implications are described in greater detail below Coordination and Costs On the Fourth Street Project, there will be many Interrelated systems between the parking structure and hOUSing project which will reqUire careful coordination If this coordination IS not done properly, it could cost the proJect time and money. For example, the conduits and "sleeving" for the plumbing, sewer, and electrical service to the housing project will come directly up through the parking structure Also, a holding tank must be Installed underneath the parking structure In order to contain storm water runoff generated primanly from the hOUSing project A smgle contractor responsible for both phases Will have a greater stake In understanding the relationship between the first and second phases and Will therefore take measures to ensure proper coordination If two separate contractors are used, and if as a result Interrelated bUildings systems are not properly coordinated, this could lead to timing and costs overruns, as well as overall liability and bonding problems. -9- During the development of a similar air rights project In the City of Beverly Hills, the developer used separate contractors for the two project phases Mistakes were made In the fittings between the two project phases, ultimately resulting in $250,000 In remedial repal rs Another potential coordination problem associated with two general contractors Involves the use of subcontractors It is likely that the subcontractors for the first phase Will be different from the subcontractors for the second phase Once again, this could adversely affect coordination between the two phases On the other hand, if one general contractor IS used for the entire project, the selection of subcontractors for both phases can be done Simultaneously, thereby Significantly Increasing coordination between the two phases. Project Schedule and Timing The timely development of the proposed project is Important for several reasons. First, the longer it takes to bUild the parking structure, the greater the loss of parking meter revenues and cost of compensating the Parking Authority for this loss of revenues Secondly, it IS commonly understood that longer construction periods add to project costs Thirdly, because thiS project has already had a four-year old funding reservation from HUD, HUe has made It clear that their continued commitment to the prOject hinges upon its timely start of construction As Indicated, the housing portion cannot begin until the parking structure IS substantially complete. Therefore, If construction does not begin on time, HUD Will no -10- longer be required to fund the proJect. HUD has indicated that If construction start-up IS delayed, it will pull their financing, thus killing the project The selection of subcontractors has timing as well as coordination implications. The selection process for subcontractors usually takes several weeks If two separate selection processes occur, the time needed for bidding would double, potentially adding several weeks to the proJect schedule HaVing separate contractors for each phase would affect the project schedule In another way If two separate contractors are used, for liability reasons it is unlikely that the contractor for phase I would be Willing to allow the contractor for Phase II to begin work until the work on phase I IS complete With a Single general contractor, start of construction on phase II could begin prior to completion of phase I, thereby compressing the project schedule. Between the extra time needed for two subcontractor selection processes and the addItional time needed to complete phase I before starting on phase II, It IS estimated that the use of separate general contractors to bUild each phase of the project would add an additional six (6) months to the project schedule This would significantly add to the costs to the City, both in terms of project development costs as well as the costs of making up lost parking meter revenues. -11- It should be emphasized that waiving the bidding reqUirements by no means eliminates competitive bidding for this project While the developer would enter Into a negotiated general contract With a single contractor, this contractor would be required to get a mInimum of three competitive bids for each line Item In the development budget To summanze, by waiving the CIty'S bidding reqUirements for the public parking structure, the developer can select a single general contractor to develop the entire proJect, which would in tum ensure significantly greater coordination between the project's two phases; significantly reduce the time-and therefore costs-needed to construct the project; and, significantly Improve coordination between the construction of the two phases, sparing the project from potentially significant cost overruns Therefore, staff recommends that the City Council adopt the attached Resolution authOriZing the City Manager to forego the bidding procedures otherwise reqUired by Section 224071 on the basis that the services necessary to construct the public parking -12- structure can be purchased more economically on the open market. FINANCIAUBUDGETARY IMPACTS As specified below, existing budget authority will be used to construct the parking structure Account Number Amount 01-720-264-20095-8905-99229 01-720-264-20095-8905-99710 TOTAL $1,232,029 $1.017.971 $2,250,000 These funds will be reimbursed to the City once HUD escrow closes RECOMMENDATIONS Staff recommends that the City Council: a) Authorize staff to amend all four City Housing Trust Funds to permit the option to administratively waive of the City requirement for a Regulatory Agreement and to eliminate the Borrower's option to request an extension of the term of the City's loan In lieu of loan repayment in the case of all projects funded under the HUD Section 202 and Section 811 Programs; b) Waive Citywide Housing Trust Funds Guidelines, on a one~tlme basis only, to permit as an eligible activity the construction of the public parking structure to be constructed under the Fourth Street Senior Citizen Housing Project and to pay the Parkmg Authority for the lass of parking meter revenue during construction, -13- c) Adopt a resolution with findings to forego public bidding procedures for constructIon of the public parking structure to be constructed under and as the foundation for the Fourth Street Senior Citizen Housing Project Prepared by Jeff Mathieu, Director of Resource Management Robert Moncnef, Housing Manager Tad Read, Senior Development Analyst Marsha Moutrie. City Attorney Linda Mills-Coyne, Deputy City Attorney Attachment A. Attachment B. HUD Section 202 Capital Advance Program Regulatory Agreement Resolution of the City Council Authorizing a Waiver of Bidding Requirements for Public Works Projects Pursuant to MUnicipal Code Section 2.24071 (d)(1) for Construction -14- ATTACHMENT A TIus agreement entered mto lius whose address heremafter called Mongagor. and me undersigned Secretary of HOUS1Og and Urban development heremafter called HUD Capital Advance Program Regulatory Agreement Housing for the Elderly or HandICapped (Nonprofit) Section 202 of the Housing Act of 1959 or Sed !On 811 at the National Affordable HouSIng Act day of In consu1eratlon of me makmg of the capual advance by HUD and the disbursement of any pan thereof. and m order ro comply With therequarements of the Housmg Act ofl959 or NauonaJ Affordable Housmg Act of 1990 and the Regulauons adopted by the Secretary pursuant thereto. the Mortgagor agrees for lIself.lts successors and assigns. and any owner of the mortgaged property. that 10 connec- tion With the mortgaged property and me project operated thereon and so long as the capital advance IS outstanding The Note and Mortgage bear no mterest and repayment IS not requued so long as the housmg rernams available for very low- mcome elderly persons or very low-mcome persons With dtsabilitles (wtuchever IS applICable) 2 Mongagor wdl establISh and nwntam a specaaJ fund to be known as Ihe revenue fund account Ul a bank which IS a member of we Federal Deposu Inswance Corporcluon, Sav- mgs Assoclallon Insurance Fund. or the NahonaJ Credll Uruon Share Insurance Fund. 1Oto wluch Will be depoSited all rentals, charges. InCome and revenue ansmg from the operation or o\VJI.erslup of the projeCt The bank: m wJuch tlus account IS estabhshed shall proVide collateral acceptable to HUD to equal themaxunum amount 10 me accowllat anyone tune when such amount exceeds $100,000 If me bank w1l1 not proVide appropnate collateral m such mstances. the Mortgagor will be requued to estabhsh accounts 10 two or more banks so that the lOW amount on deposu at any bme does not exceed $100,000 m anyone bank: Expenduures shaU be made from the revenue fund account only 10 accordance With me operatmg budget subnuued to and approved by HUD 3 Not laretlhan 30 days pnortothe begmmng ot each fiscaJ year, the Mortgagor shall submu an operaUng budget for that fiM:.u year to HUD The budget shall mclude aU necessary operaung expenses. current mamtenance charges. expenses of reason- abje upkeep and repau'S. taxes and specaal assessment levies. prorated amounts requited for msurance and all other expenses mCldent to the operation of the project. and shall show the expected revenue to pay such expenses, Ulcludmg reserve fund depoSits The expenses Ulcurred and dtsbursements shall not exceed the reasonable and necessary amount Ihereof, and the Mortgagor will nol expend any amount or mcur any obl1ga- uons In excess of the amounts approved In the annual operatmg budget except upon wnuen certification by the Mortgagor to HUD that such expenses were unantJClpatedand are necessary and proVided further. that nothmg 10 dus section shalllumt the U.S. Department of Housing and Urban Development OffICe of Housing Federal Housing Commissioner 19 . between amount wtuchthe Mongagormay expend from fundsobtamed from some other source than project revenues or other funds requued of the Mongagor pursuant to llus Agreement or the Capital Advance Agreement 4. As secunty for the Capital Advance (or tile required paymenls Wlder tJus Agreement mto the reserve fund for replacements. and for all ocher obhganons of the Mongagor Wlder thiS Agreement. the Mortgagor hereby assigns. pledges and mort. gages to HUD ail ItS nghts to the mcome and charges of whatever son winch It may receive or be enbtled to receIVe from the operahon of the mongaged property, subject. how- ever. to any assignment of cenlS or project mcome m the Mortgage referred to herem Until a default occurs under thiS Agreement. however. pemllsslon IS granted to Mortgagor to collect and retain under the prav 1S10hS of t1us Agreement such rents. Income, operatII1g surplus and charges. but upon default thiS permISSIon IS temunaled, as to all rents, Ulcome. operaung surplus and charges due or collected thereafter. 5. (8) Mortgagor will estabbsh and mamtaUI a reserve fund for replacements m a separate account to a bank winch IS msured by the Federal DepoSit Insurance Corporation, Savmgs Association Insurance Fund, or me Nauonal Credit Uruon Share Insurance Fund Concunently Wtth me effective commencement of rental assistance pay- ments Wlder the Project Renw AssIStance Contract, We MOClgagor will deposit an amount equal lO $ per month Wlless a dIfferent d~!~ or amOWlt IS approved In wnung by HUD. Such fund, whether In the fonn of a cash depoSit or Invested U1 obhgatlons of, or fully guaranteed as to pnnclpal by ,the Uruted States of Amencashall at ail tunelo be subject to the control of HUD DISbursements from such fund. whelher for the purpose of effectmg replace- ment of SlnJctural elements and mechamcal eqUIpment of the project for any other purpose. may be made only after Ihe consent 10 wntmg of HUn In the event of a defaull m the terms of the mongage. HUD may demand the full or panaal apphcatlon of the balance m such fund to be amOWlt due on the mortgage debt (b) Mongagor will depoSlt the mmunum capital mvesunent With an escrow agent acceptable 10 HUD purusant to Regulations (c) Wlthm 60 days after the end of each fISCal year. any Page 1 01 5 tonn HUD.92466-CA (4192) rpl HMdbook 4571 4 & 4.0;71 5 resIdual receipts. realized from the operal1on of the mort- gaged propeny shall be deposlled in a separate residual receipts account. Residual receipts shall be under the control ofHUD and shall be dIsbursed only at the dlscre- Ilon of HUn for su(,h pllIJlOSt: as it may delenTl1ne to be necessary or appropnate 6 The real property covered by the Mongage and thiS Agreement 1S deSCribed m Schedule A attached hereto 7 Mortgagor shall not Without the wntten approval of the Secretary , (a) Transfer, dispose of or encumber any of the mortgaged property A1ly such transfer shall be only to a person or persons or corporallon sausfactoJ)' to and approved by HUD, who shall, by legal and vahd Instrument In wrllmg. to be recorded or filed In the same recordmg office m wruch conveyances of the properly covered by Lhe Mort- gage are reqUired to be filed or recorded. duly assume all oblJgatJons under tlus Agreemenl and under the Note and Mongage. (b) AsSign. transfer. dispose of, or encumber any personal property, mcludmg rents orcltarges. and shall DordlSburse or payout any funds except as proVided herem and m Ihe CapllaJ Advance Agreemenl (c) Remodel. reconsuuct, add 10, or demolish any part of [he mongaged property or subtract from any real or pen-onal properly of the project; (d) Pay any compensauon or make any dlsUloollon of mcome or other assets to any of Its officers. directors or stockhold- ers. (e) Emer mro any contract or contracts for SUpervISOry or managenal servIces, (f) ReqUlreasa condmon ofoccupancyorleasmgofany umt or reSIdential space m lhe prOJecf. any conslClerauon or deposit other than a secunty depos1t m an amount equal to one month's total tenant payment or $50. wluchever IS greater The family IS expected 10 pay thesecumy deposit from Its own resources and other available pubhc or pnvale resources The Mongagormay collect the secunty deposit on oUI lru.tallmem bill>IS The secunty deposlls musl be placed m a segregaled mterest-beanng account A record shall be mamtamed of the amowll m ttus account that IS annbutable to each family III reSidence In the project Annually for all fatmhes. and when computmg the amount avadable for disbursement. the Mongagor shall allocate 10 lhe famJl y . ~ balance, the mterest accrued on the balance dunng lIle year Unless prohIbited by State or local law. theMongagormay deducI for the family. from the accrued mterest for lhe yeM. the ddnuDlstrallve cost of compulmg the allocauon to the famtly' s balance The amount of the adImmstralive cost adjustment shall not exceed the ac- crued mterest allocated 10 the family's balance for the year. The amount of the segregated. mterest-beanng account mamlaIJJed by Ihe Mortgagor must at aU tunes equal the lotal amount collected from the fanultes then Ul occupancy plus any accrued mterest and less allowable adrnmlStrlluve cost adjusunents The Mongagor must campi y w ilh any applicable State and local laws concem- 109 mlerest payments on security deposItS. The Mongagor, subject to Stale and local law . may use the famLly's secunty depoSit balance as reunbursement for any unpaW famdy conmbulLOn or other amount Whllh lhe faImly owes under the lea<ie in accordance WIth the Regulations (g) Pennn the use of the dwellmg accommodatlon~ 01 the project for any purpose except the use which was ongl- nail y mlended. or penmt commercial use greater than that ongmally approved by HUD (h) Amend Its articles of mcorporauon or by-laws other than as penruted under the terms of the amcles of mcorporatlon approved by HUD 8 Mortgagor shall mamlam the mortgaged premISes, acconuno- dalloru; and me grounds and etjulpment appunenant thereto. In good and subslanual repalf and candlllon, provided that, 10 the event all or any of the buddmgs covered by the Mongage shall be destroyed or damaged by fire or other casually. the money denved from any Insurance on the propeny shall bt: apphed In accordance With the terms of the Mongage 9. Mortgagor shall not file any petlllon m bankruptcy or m~ol- vency. or for a receIVer. or for reorgamzauon or compasJllOn, or make any asslgrunent for the benefit of creditors or to a trustee for creditors: or pennlC an adJudtcation U1 bankruPICY, or UlSQlvency. the takmg possessIOn of the mortgaged property or an y part thereof by a receiver. or the seiZure and sale of the mongaged property or any part thereof under JUdiCial process or purusant to any power of sale and fad to have such adverse acnons set asIde wlllun 45 days. 10 Mortgagor shall from funds other than project mcome Imme- diately satisfy or release any mecharuc' s hen, or any other hen which auaches 10 themongaged propeny oranypersonaJ prop- erty used m the operauon of the prOject. and shall dlSl1Uss or have dIsmissed or vacaled any recewerslup. or petition In bank-ruptcy or assignment for benefit of ue(htors. crednon. bill or Insolvency proceedmg Ulvolvmg the project or the mongaged property I 1 (a) If the Mortgagor has or comes to have any nonprojeCI funds. all mcomeand other funds of the mortgaged project shall be segregated from any such funds of Ihe Mortgagor and segregated from any funds of any other corporallons or persons Income and other funds pledged [0 the mortgaged proJCc I shall be expended on] y for the purposes of the project (b) Mongagor shall proVide for the management of the project sallsfaclory to HUD Any management contract entered 1010 by the Mortgagor mvolvmg the prOject shall Page 2 of 5 form HUD-92466-CA ...f Hl'Indhnok X)(YX Y contaln a provl::.lon th.lt u shall ~ ~ubJl:ct lO lenmnallon, wuhout pen....lly dI1d wlIh or wlIhoUl cause. upon wnllen request by HUD addressed to the Mortgagor and me management agent. Upon receipt of suclI request the Mongagor shallunmedlately move to !ennUlate the con- tract wuJun a penod of not more than 60 days and shall make arrangements sauSfSClory to HUD for conunumg proper management of the project. (c) Neither Mortgagor norUs agents shall make any payments for services, suppltes or matenals unless such servlCes are aclUaUy rendered for the project or such supplies or matenals are delIvered to the project and are reasonably necessary for Its operauon. Payments for such services Or matenals shall nOl exceed the amount ordmanly prod for such services, suppbes or matenals m the area where the services are rendered or me suppbes or materials fur- mshed (d) The mongaged property. eqUipment, bUlldmgs. plans, offices, deVices. books. appar.ttus. conuaCb. rel.Ordll, documents. and all other papers relallng thereto sh.dl at all urnes be mamlaH1ed m reasonable condman for proper audu and subject to exammatlon and lRspeclJon at any reasonable (lme by HUD and Its duly authonzed agents Mortgagor and Its successors, asSlgns or ItS agents shall retalJ\ caples of all wntten conuaclS or other lnSlrUments wluch affect the mortgaged propeny, all or any of which may be subject 10 mspecllon and exammallon by H UD or liS duly aumonzed agents. (e) The books and accounts of the operal1ons of the mort- gaged property and of the projeCI shall be kepi lR accor- dance With the reqUirements of HUD (0 Within 60 days foUowmg the end of each fiscal year HUn shall be furrushed WIth a complete annual fmanclal report based upon an exammatlon of the books and records of Mortgagor prepared m accordance With the ~Ulrements of HUD. certified to be an officer of me Mortgagor and. when requITed hy HUD. prepared and certified by .. Certified Public Accounldl1t, or olher person aCL.cpled 10 HUD (g) Althe requclll 01 HUn.llS agenll> , employeell. or attorneys. the Mongagor shall give specllu.. answefl> 10 4UellllOnl> upon which mfonnatlon IS desued from LUne to tune relative to the mcome, asseLS, habdlt1es. contracts. orera- lion. and condJUon of the property and the starus of the Mortgage and any olher mfonnatlon wllh respect to the Mortgagor or the mortgaged property and of the projeLt wtuch may be requesled (h) All receipts of the project shall be deposited III the name of the project m a banJ... whose deJX>Sus are llISured by the FDIC. Savmgs ASl>oclatlon Insurance FWld. or lIle Na- IlOna] Credit Uruon Share Insurance Fund Such funds shall be withdrawn ani y ID accordance With the pro VISions of tlus Agreemenl for expensel> of lite project My person recelvmg funds of lhe project shall unmedlalely deposll such funds 10 the proJCCl bank account and fadmg W 10 do 10 vlolatlon of dus Agreement shall hold such lunlb m UUst Any person recelvmg property of the project m vlOlallOfi of filS Agreement shall unmeduueJy cJehver such property to the projCct and frohng so to do shall hold such property m trust (I) Mortgagor shall at alltunel>,lf reqUIred by the laws of the Junsdtcuon. mamtam m full force and effect a bcense to operate the project from lite S lale and/or other hcenmg authonty. Mongagorshallleaseany pornonofthe project only on tenns approved by HUD (j) Mortgagor shall not collecl from lenants or occupanlS or prospecllve lenams or occupants of lite project any admlll- Slon fee. founder's fee, hfe-care fee. or sundar payment pursuant to any agreement. oral or wnuen, whereby the Mongagor agrees to funush accommodatlons or services m the projeCt to persons malang such payments (k) No officer, dIrector, lIlIstee. member, stockholder nor aulhoflzed represenlabve of me Mortgagor excepl for management by sponsor or non-profit affiliate, shall ha w any fmanclal mtecest m any conuactural arrangement entered mto by the Mortgagor m connecl1on With rendl- uon of serVices, the proVISJon of goods or supphe~. management of the projeCl, procuremenl of !he sue or other matters whatsOever 12 (a) If pmJectlS funded under Secllon 202 of me Housmg Act of 1959. as amended, Mongagor wdllumt pubhc OLCU- pancy of the project to elderly fanulles and mdlvlduals w. dermed 10 Secllon 202 of the Housmg Act of 1959. and applicable HUD Regulations. If project IS funded under Seellon 811 of the Nauonal Affordable Housmg At..t of 1990, Mongagor wlll hrmtpubl1c occupancy of tile project to persons wuh dlsablliues as defmed ill Sectlon 8n of lhe Nallonal Affordable Housmg Act of 1990, and appbcable HUD Regulations. The cntena govenung ehglbtluy 01 lenams for adrmsslon lo Secuon 202 or Secuon 811 uml.!. and the conwuons of cOnlmued occupancy shall be m accordance wlIh the Project Rental AsSIstance COnlrOCl (b) Except as proVided m (d) below Mortgagor will make Us dwelling accommodations and serviCes avadable to ch- glble occupants at charges estabhshed 10 accordance wllh a schedule to be approved m wnung by HUD Such acconunodabons shall not be rented for a penod less than 30days Commerc13l faclhues.lf any. shall be rented only m accordance With a schedule of charges fixed by !he Mortgagor and approved m wnung by HUD Subleasmg of dwelling accommodauons or commercial factllues shall be penmned only upon !he lerTIlS and condUlOns approved by HUn m wrnmg (c) Upon pnor wnuen approval by the Secretary. Mortgagor may charge to and receive from any tenant such amount> as from tune 10 tune may be mutually agreed upon between the tenanl and the Mortgagor for any facllmes and/or services which may be funushed by the Mortgagor Page 3of5 form HUD-92466-CA or others to such tenant upon request, III addluon to the facllmes and serVices mcluded III the approved ProjeCt Rental ASSistance Conuacl. (d) Nothing conuuned m dus Agreement shall be conslrued to reheve the Mortgagorot any obII gallOns under Ute ProjeCt Rental ASSistance Contract 13 Mortgagor Will comply wIlh lhe proVISIOns ot any Federdl. SUlteor local law prohlblUng dlscnmmatlon III housmg on the grounds of race. color. creed. age. sex. handicap. famlJtaJ status or natIOnal ongm. mcludmg Tille VI of the C Ivtl R1ghts ACI of 1964 (42U S C 2000d-l), the Fau Housmg Act (42U S.C 3601), Seellon 504 ot the Reha.b1l1tallon Act of 1973(29U.S C 794). Age Dlscnmmatlon Act oj J975(42U S.C.6IOJ) Executive Orders 11063 and U246. Section 3 of lhe HOllsmg and Urban Development Act of 1968. and the affIrmauve fair housmg marketmg requirements at 24CFR part 200. subpart M J4 No l1ugauon seeJang !he recovery of a sum m excess of$5.000 nor any acuon for spectfic performance or other equnable rehef shall be mstuuted nor shall any claun for a sum In excess of $5,000 be settled or compromIsed by the Mongagor unless pnor wntten consent thereto has been obtaIned from HUD Such consent may be subjeCt to such teoos and condUlOns as HOD may prescnbe l'i Upon a ViolatIon of any of the above prOVIsions 01 Ibl!> Agreement by Mongagor. HUD may give wnuen notice, thereof. to Mongagor. by reglsrered or certIfied mad. ad- dressed to the address stated In thts Agreement, or such other address as may subsequently, upon appropnate wnuen nollce thereof to HUD, be deSIgnated by the Mongagor as Its legal busmess address If such violation IS not corrected 10 !he sausfacuon of HUD wuhm 30 days after the dale such notlce IS mailed or wlthm such further hOle as HUD detennmes IS necessary to correct the vlolauon. Without further notIce H UD may declare a Default under tlus Agreement effective on the date of such declaration of default and such default HUD may (a) Take possession of the project. brmgan)' action necessary to enforce any nghts of ll1e Mongagor growmg out of the proJect operauon. and operate the project m accordance wllh the terms of thiS Agreement until such lIme as HUD In Ib dJscreuon detennmes that the Mongagor 1$ dgdUl III a posUlon to operate the project 10 accordance WIth the tenns of tJus Agreemem and mcomphance with the re- quuementsof Ute Note and Mortgage. or requIre Power ot Anomey from Mongagor to etfecOJate uansfer of the project to a HUD approved nonprof1t corporatIOn (b) CoUect all rents and charges In connectIOn Wllh the operatIOn of the project and use such collectIOns to pay the M0l1gagor's obligations under this Agreement and under the Note and Mongage, and the necessary expenses of preservmg !he propeny and operalmg the project (c) Declare the whole of Said mdebtedness unmedl3tely due and payable and then proceed with the foreclosure of the mortgage (d) Apply to any coun, Stale or Federal. for specific perfoon- ance of thts Agreement. for an InJunctlon agamsl any violation of chi!> Agreement, for the appomnnent of a receiver W take over afKl operate me propeny m at-cor- dance WIth the tenns of thIS Agreement. or for such other rehef as may be appropriate, since the injUry to HUD ansmg from a default Wlder any of the tenns of thil> Agreement would be ureparable and the amount of dam- age would be difficult to ascertaUl (e) ReqUlre the Mortgagor to transter all of Its nghe ttck and mterest m the project and to aU project assets to a pnvate nonprofit corporauon deSignated by HUD and. lor thll> propose the Mortgagor hereby conStitutes am:! appomb HUD its true and lawful anomey-m.facl. With full power of subStlruhon m the preJntses. (0 transfer the project and all project assets to the pn vate nonprofit corporal1on deSignated by HUD. 1f the Mongagor tads or refuses to make such a transfer as requlfed by HUD 16 (a) Mortgagor has executed the Project Rental ASSIMUJl(.e Contract The terms of the PrOject Rental Asslstant.e Contract, when executed, shall be meorporared by refer- ence mto dus Regulatory Agreemenr (b) A vlolallon of rite PrOject Reneal AsSistance ContraCt may be constnJed to constitute a default hereunder In the sole dlscreuon of HUD. (c) In the event said Project Rental ASSIstance Commet expIres Of tennmares betore the e;,: plrallon or tennm3uon of thiS Agreement. the prov1slons of Uns paragraph and ~IJlY o!her reference to SiUd Contr det, and to asStsted unib conramed herem shall be self-cancellmg and shall no longer be effectlve as of the date of the explratlOn or tennmallon of the Project RentaJ AsSistance Contr dl..l 17 A5 used ill tins Agreement the term (a) "Default" means a default declared by HUD when a VIOlation of this Agreement IS not COrTected to Its sallsfac- tlon wlthan the Ume allowed by thIs Agreement or such further tune as may be allowed by HUD after wnuen nouce, (b) "DlsmbutJon" means any withdrawal or takmg of c~h or other assets of the project other than for payment of reasonable expenses ancJdentto JIS consl11.JCllon, opera- uon and matntenance, (c) "Mortgage" mcludes "Deed of Trust", "Chattel Mort- gage" Declarallon of Covenants" and any other secunty for the Note Identified herem; (d) "Mortgaged Property" mcludes propeny, real. personal. or mixed, covered by the mongage or mongages securmg the note held by HUD. (e) "Mortgagee" refers to the holder of the mongage Identi- fied herem. IlS successors and assignS. Page 4 01 5 form HUD.92466-CA (1) "ProjCCt"lOcludes the mortgaged property aru1 all Ib other assets or whatsoever SltuaIt, used m or owned Ily the busmess conducted on saId mortgaged property. (g) "Residual ReceIpts" means any cash remauung after, (I) The Payment of. (I) All amounts reqUIred to be depoSited m the reserve fund for rep)acemenlS; (n) All obligations of rhe project other than the mongageheld by HUD unless funds for payment are set aside or defennent of payment has been approved by HUD, and (2) The segregalJon of. (I) An amount equal to the aggregate of all speCIal funds requIred to be mamtaUled by the projeCt. (II) A11tenanl secumy depOSIts held. (h) "AsSisted UrulS" refer lO uruts assisted pursuant 10 PrOjeCl Rental AssIslallce Contract. (I) "AsslSlaJlce ContraCt" refers to a Project Renlal AsSIstance Contract between the Mongagor and HUD under Sectlon 202 of the Housmg Act of 1959 or between the Mongagor and HUD under Section 811(d)(2) of the National Affordable Housmg Act of 1990 Unllcd States of Amenca Secretary of HOUSing and Urban Development (Signature) By (Name) Official Tille Dale J 8 Hun shall not be liabJe for any of us actions hereunder except for arbItrary and capnclOus conduct 19 ThJs UlStrument shall bmd. and Ole benefits shall mure to, the respective pames hereto, thelT legal representatives, execu- tors, adnllrustralors, successors In office or lDleresl, and &- signs. and aU owners of me mortgaged propeny. so long as the Mortgage IS outstandmg 20 The lDValu:bty of any clause. part or proVISion of thiS Agree- ment shall not affect the vabdny of the remammg ponlOns thereof 21 Mongagor warrants tbatlt has not. and Will not. execute any other agreement With proVISIOns contradictory of, or m oppo- SItion to. the proVISiOns hereto. and that. m any evenl. the requJrernents ofdus Agreement are paramount and comrollmg as to the nghts and obhgauons set forth and supersede any other requuements m confhct therewith 22 Mortgagor does not assume personal habllll y for paymenlS due under the NOle and mongage or for payments 10 the reserve for replacemenl fund However, defaults or other fadures (0 fonow program requIrements may result m lumted demal of partICipation or debannent from HUD or orner Federal pro- grams 23 Mortgagor shall have avaIlable necessary equIpment or de- vIces and make reasonable accommodations (0 meel the needs of persons With VISUal and/or hearmg unpamnents m compli- ance With SeCllon 504 of the Rehabllnatlon Act of 1973 (29 V.S.C. 794) and 24 CFR Part 8 Owncr(Slgnature ) By (Name) Official ntle Date Page 5 of 5 torm HUD-92466-CA ATTACHMENT B F:housinq/share/wpfiles/devprojs/4thst202/bidreso City Council Meeting 9/16/97 Santa Monica, California RESOLUTION NO. (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AUTHORIZING A WAIVER OF BIDDING REQUIREMENTS FOR PUBLIC WORKS PROJECTS PURSUANT TO MUNICIPAL CODE SECTION 224 071(d)(1) FOR THE CONSTRUCTION OF A PUBLIC PARKING STRUCTURE ON LOT 4 LOCATED AT 1116-1146 FOURTH STREET WHEREAS, the City of Santa Monica Will develop at the cost of approximately $2,250.000 a 165-space parking structure on Lot 4 Jocated at 1116-1146 Fourth Street to replace eXisting public parking spaces and to prOVide a foundation for a 56-unit HUD Section 202 Program project for senior cItizens, and, WHEREAS, Section 2.24071 of the MUnicipal Code requires that every contract InvolVing more than Twenty-Five Thousand Dollars ($25,000,00) for public works projects, including public bUildings, shall be let to the lowest responsible bidder after notice by publication In a newspaper of general Circulation In the City of Santa Monica, and, WHEREAS, pursuant to Section 2 24 071 (d) of the Municipal Code, the City Council may by two-thirds affirmative vote of Its membership, forego the bidding procedures othel'Wlse reqUired by Section 2.24.071 of the MUnicipal Code If the City Council finds that the goods or services can be purchased more economically on the open market; and, 1 WHEREAS, the City Council finds that by foregoing the bidding requirements for public works projects for development of the public parking structure on Lot 4, the public parking structure can be constructed more economically because the developer of the senior housing proJect may select. a single general contractor to JOintly develop the senior housing project and the public parking structure on behalf of the City, which will result In greater coordination between the construction of the public parking structure and construction of the senior housing project, thereby significantly redUCing both the time and costs to the City In developing the public parking structure NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AND ORDER AS FOLLOWS SECTION 1. Pursuant to MUniCipal Code Section 2 24 071 (d}{1), the City Council hereby authonzes the City Manager to forego the bIdding procedures otherwise required for public works projects for the development and construction of the public parking structure to be located upon Parking Lot 4 APPROVED AS TO FORM ~~ City Attorney 2