R-6910
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RESOLUTION NUMBER 69l0(CCS)
(Clty Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AUTHORIZING EXECUTION OF A COMMITMENT
AGREEMENT BETWEEN THE CITY OF SANTA MONICA AND THE
CALIFORNIA HOUSING FINANCE AGENCY
WHEREAS, it is the POllCY of thlS locality to preserve and
improve the rental housing stock;
WHEREAS, the CalIfornia Finance Agency (hereinafter "Agen-
cy") will issue bonds to fund mortgage loans to finance the
rehabilitatlon and development of multifamlly rental housing; and
WHEREAS, the City desires to enter lnto a Commltment Agree-
ment wlth the Agency to reserve proceeds of the Bonds for loans
for propertles located withln its jurlsdiction; and
WHEREAS, Agency program regulations reqUlre that the govern-
ing body approve by resolutlon the execution of the Commitment
Agreement,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AS FOLLOWS:
SECTION 1. There eXIsts in thlS locallty a need for funding
to encourage the rehabllltatlon of the multifamily rental stock.
SECTION 2.
The Cl ty Counc 11 does hereby approve and au-
thorizes the Cl ty Manager to execute the attached
Commltment
Agreement by and between the Clty of Santa Monlca and the Cal-
lfornia Houslng F2nance Agency for the reservation of funds for
mortgage loans for properties located wlthin its Jurlsdlction.
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SECTION 3. The C1ty Clerk shall cert1fy to the adoption of
th1s reSolut1on and thenceforth and thereafter the same shall be
in full force and effect.
APPROVED AS TO FORM:
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Robert M. Myers
C1ty Attorney
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CALIFORNIA HOUSING FINANCE AGENCY
MULTIFAMILY REHABILITATION PROGRAM
COMMITMENT AGREEMENT
This Comrnltment Agreement, dated as of
1983 (date executed by the Agency), is made and entered 1nto
bet.....een the City of Santa Monica (the "Local.1.ty") and the
Cahforn1a Hous1ng F1nance Agency (the "Agency").
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WHEREAS, the Agency intends to issue its
Multifamlly Rehabilitatlcn Revenue Bonds (Bank of America
National Trust and Savings ASSOc1ation), 1983 Issue A (the
"Bonds") for the purpose of establJ.shinq a program to finance
the rehabllitatlon and development of mUltifamJ.ly rental
hous~ng (the "Program");
WHEREAS, the proceeds of the Bonds will be used to
fund mortgaqe loans ("Loans") to be orig1nated by Bank of
Merlca National Trust and Savin9s AssociatJ.on (the "Lender")
for elig1ble properties in accordance with an Origination and
Servicing Aqreement between the Agency and the Lender;
WHEREAS, the Locality desires the Agency and the
Lender to reserve proceeds of the Bonds for Loans for
properties located within the jurlsdiction of the Locality
and to be certJ.fled by the LocalltYi and the Agency and the
Lender desire to reserve proceeds of the Bonds for and fund
such Loans pursuant to the terms and conditions hereinafter
set forth; and
WHEREAS, the Treasurer of the State of Callfornia
wJ.ll act as trustee (the "Trustee") for the Agency under an
indenture pursuant to wh~ch the Bonds wJ.ll be issued (the
"Indenture");
NOW, THEREFORE, in consideration of the mutual
representations, promises and covenants hereinafter set
forth, the part~es hereto agree as follows:
?ect~on 1. Cornn~tment Amount.
1.1 The Locality agrees to reserve from the
Agency, subJect to the terms and cond1tions of this
Commitment Agreement, proceeds of the Bonds in the a99regate
pr1ncipal amount (not less than $500,000) set forth
here1nafter or such lesser amount as the Agency may determine !
to be the approved comm1tment amount (the .Commitment
Amount") .
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1.2 The A;ency a;rees to cause the Lender to
reserve the Commitment Amount for Loans to qualified
mortgagors (the ..O.....ners") for the rehabilltatlon or
acqulsJ.tlon and rehabllltatlon of properties located withln
the jurJ.sdlctlon of and certlfled by the Locality (the
"l'roJectsll) .
1.3 If at any tlme the Agency believes that any
portlon of the Comm1tment Amount wJ.ll not be used during the
Commltment Perlod (as herelnafter defined), the Agency may in
its sole and absolute d1scretion reduce the Comm1tment Amount
of the Locality upon written notice to the Locality and
Lender; provided, however, that the Agency shall (a) fund all
Loans cOIDrnltted by the Lender during the Commitment Period
pr~or to the effectlve date of such notice and (b) promptly
return to the LocalJ.ty a pro rata portion of its Commitment
Fee.
1.4 The Locality may transfer all or a portion of
its Co~mltment Amount to another locality wlthin the State of
Callfornia (and be relmbursed by such other agency for a pro
rata portJ.on of its Co~~itment Fee), provlded that (i) the
Agency approves such transfer (WhlCh approval shall not be
unreasonably w1thheld) and (11) such transfer occurs during
the Commltment Perlod.
Section 2. Commitment Period.
2.1 The COmIDltment Amount shall be reserved for
Loans origlnated by the Lender durin9 a period of twelve (12)
months from the date of issuance of the Bonds (the
"Co:nmitment Period").
2.2 The LocalJ.ty may request an extension of the
CO~~lt~ent Perlod for up to S1X addlt~onal months. Wh1Ch the
Agency may 1n lts sole and absolute dlscretlon grant based
upon eVldence that Loans wlll be or1g1nated during the period
of the extenslon and that the extenslon wlll not J.mpalr the
secur1ty for the Bonds.
Section 3. Co~mltment Fee.
3.1 The Locallty shall furnish upon delivery of
thls Agreement, cash or an unconditlonal, irrevocable letter
of credlt acceptable to the Agency in an amount equal to
three and one-half (3-1/2%) percent of the requested
Commltment Amount (the "CommJ.tment Fee"). If a letter of
credit is provided it will be converted to cash at the time
of sale of the Bonds.
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3.2 The Aqency shall return the Commitment Fee to
the LocalJ.ty and this Agreement shall terminate in the event
that the Bonds are not sold by Nove~ber 30, 19B3 or the
stated interest rate on the Loans will exceed 12 percent.
The Agency agrees to return a pro rata share of the
Co~~itment Fee to the Locallty in the event it reduces the
CO~~ltment k~ount In accordance w~th Sectlon 1.
3.3 The Commitment Fee wlll be used by the Agency
in conjunct~on Wlth the Bonds. The Locality is not entitled
to any refund or relmbursement of its Comm~tment Fee from the
Agency except in accordance wlth Sections 1.3, 1.4 or 3.2
above. The Locality may recover its Commitment Fee from
appllcants for Loans or from Owners, but only in accordance
wlth Sect10n 5.3.
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Sectlon 4. Loan Terms and Conditions. Loans wlll
be orJ.glnated by the Lender In accordance wlth the terms and
condltions set forth J.n the Agency's Program Guidelines,
dated August 10, 1983, for its MUltifamlly RehabilJ.tation
Program whlch Program GUldelines are J.ncorporated herein by
thlS reference.
SectJ.on 5. Responsibilities o~ Locality.
5.1 The Locality agrees to provide the Agency with
the following documents at the time of submissJ.on of thls
Agreement and hereby represents and warrants that the
lnformation provlded in such documents is true and correct as
of the date of this Agreement:
<a) the COmIDJ.tment Request, the form of Which is
attached as EKhiblt A, identlf~lng prospective Projects, and
describJ.ng the Locality's strategy to minimlze dlsplacement;
(b) any program gu1delines or related requlrements
of the Locallty wh~ch will be app11cable to Loans; and
(c) evidence of the authority of the offlcers of
the Locality executing thlS Agreement to do so.
5 2 Dur~nq the CO~1tment PerJ.od, the Locallty
ag~ees to:
(a) reVlew and complete Part IV of the Improvement
Certiflcate In the form attached hereto as Appendix E of the
Program Guidelines for each Loan prior to approval of the
Loan by the Lender;
(b) comply with its strategy to min1mize
displacement descr~bed in ~ts Commitment Request;
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(c) cooperate w1th the Lender in assuring
efflcient processing of Loans and provide technical
assJ.stance to Owners where necessary;
(d) provide the Agency a quarterly progress report
1n the form spec1fled ln Appendix F of the Program GUldelines
on Loans w1thln lts Jurlsd1ct1on; and
(e) comply with the affirmative action 9Uldelines
set forth in Appendlx C of the Program Guidelines.
5.3 The LocalJ.ty may:
(a) utilize other resources, such as Section a
certiflcates and Ccmmun1ty Development Block Grant funds,
where approprlate to insure the feasibility of a Project.
The speclfic application of these resources is at the
d1scretlon of the Locallty;
(b) prov1de the Owner a grant or a loan which is
subordlnate to the Loan from the Agency. Such subordlnate
loan may be a deferred payment loan due upon sale of the
property or a loan to be paid only from net income after
operat1ng expenses of the Project and debt service on the
Loan. Other forms of loans or subsidy requlre the prior
approval of the Agency and the Lender;
(c) charge the Owner up to 3-1/2% of the Loan
amount to recover the Locality's Commltment Fee. Such charge
may be paid in cash at or prior to Loan closing or may be a
subordJ.nate loan in accordance Wlth 5.3(b); and
(d) estab11sh additional restrictions on the
Project not lnconsistent with the Program GUldelines or
Regulatory Agreement, includlng rent levels and lncome limlts.
Any Locallty actlons or requlrements affectinq a ProJect
under thlS Sectlon 5.3 shall be promptly d1sclosed in writing
to the Lender prlor to the Lender's approval of the Loan.
5.4 After Loans are or1ginated, the Locality shall:
(a) receive a copy of and rev1e..... the Owner's
annual certlficatJ.on of compllance wlth the Regulatory
Agreement and, lf reasonably necessary, obtaJ.n addJ.tional
informatlon to determ1ne the material accuracy of such
certJ.fication.
(b) mail the OWner's certification after review by r
the LocalJ.ty to the Agency by Apr1l 1 of each year; and
notify the Agency in writing wJ.thin 5 days if the Locality,
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at any time, is aware that the OWner is not in compliance
with the Regulatory Agreement.
Section 6. Responsibilities of the Aqency.
6.1
the Bonds by
The Agency shall use its best efforts to sell
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6.2 The Agency agrees to use its best efforts to
provide technical assistance to the Locality upon request to
ensure that Loans are made in a timely manner and that the
Program Guidelines are implemented.
6.3 The Agency shall monitor the progress of both
the Locality and the Lender at least quarterly and more
frequently as appropriate, inclUding the Locality's strate9Y
to minimJ.ze displacement and affirmative action efforts.
6.4 The Agency shall review and approve or
disapprove all Loan requests requiring any amount of
refir-ancing or for any Project containing nonresidential
space or for affirmative action and prevailing wage
compliance for any Loan with rehabilitation costs of $400,000
or more. Procedures for Loans with these conditions will be
made available to the Locality and the Lender and the form
for approval is included in the Improvement Certificate which
is included in the Program Guidelines - Appendix E.
Section 7. Inspection of Records.
The Agency shall have the right at any time and
from time to time during normal business hours, and upon five
(5) days notice to the Locality to examine any records of the
Locality pertaining to the Program. The Agency shall have
the right to require the Locality to furnlsh such documents
as the Agency reasonably deems necessary in order to
determine complJ.ance with the prov1sions of this Commitment
Agreement and the proqram Guidelines.
Section 8. Amendments.
The prov~sions of this Agreement cannot be waived
or modified unless such waiver or mod1fication is in wr~t~ng
and signed by all parties to this Commitment Agreement. The
Agency may amend the Program Guidelines at any time by
mailing to the Locality changed pages thereof. such
amendments to be effective ten (10) business days after the
date of mailing thereof. provided, however, that if any such
amendment materially adversely affects the interests of the ~
Locality hereunder, such amendment may be made as to the
Locality or-Iy with the written consent of the Locality,
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unless such amendment is necessary to comply w~th any
a~plicable law or to maintain the exempt10n from income taxes
cf interest on the Bonds, ~n which case such consent shall
not be necessary.
Sect~on 9. Severabll~ty.
Invalidat10n of anyone of the provis~ons of this
Agreement, by judgment or court order, shall in no way affect
any other provJ.s1ons herein contained, which provisions shall
remain in full force and effect.
Section 10. Appl~cable Law.
This Agreement shall be governed by the laws of the
State of CalifornJ.a.
Section 11. Ass19~~ent.
This Agreement shall not be ass~gnable by the
Locality, in whole or J.n part, W1thOut the pr10r wr1tten
consent of the Agency, and 1n the event of any attempted
assignment thereof without such written consent, the Agency
may, at its option, term1nate th1S Agreement as to its
oblJ.gation to cause Lender to fund any add1tJ.onal Loans.
Section 12. Successors.
This Agreement and all obligatJ.ons and rJ.ghts
arJ.s~nq hereunder shall bind and 1nure to the benefit of the
Agency and the Locality and their respective successors in
interest and permitted ass~gns. ,
Section 13. Counterparts.
Th1S Agreemen~ may be executed 1n one or more
counterparts. each of wh~ch shall be an or1glnal, but all
such counterparts shall together const1tute but one and the
same agreement.
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IN WITNESS WHEREOF. the parties hereto have caused
this Aqreement to be executed by the1r duly authorJ.zed
off~cers as of the dates hereof.
REQUESTED COMMITMENT AMOmlT: $
least $500,000).
(at
A~PROVED AS TO FORM:
CIty of Santa Monica
[Name of Local1tyl
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Robert M. Myers
Cl ty Attorney
By .
(S19nature of Au~orJ.zed
Off~cer)
(Prlnted or typewritten name of
Authorized Offlcer)
, 1984
APPROVED COMMITMENT AMOUNT: $
CALIFORNIA HOUSING FINANCE AGENCY
By
(T~tle)
, 1984
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Adopted and approved thIS 4th day of September, 1984.
~.H2kCKH
MayolP'" - ~
I hereby certify that the foregoing Resolution No. 6910(CCS}
was duly adopted by the City Council of the City of Santa Monica
at a meetIng thereof held on September 4, 1984 by the folloWIng
CounCIL vote:
Ayes: Councllmembers: Epstein, Jennings, Press, Reed,
Zane and Mayor Edwards
Noes: Councilmembers: )Jane
Absent: Councilmembers: Conn
Abstain: Councilmembers: None
ATTEST..:
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L4-nuu(/' J~
CIty Clerk