1981-198-Authorizing "Agreement To Rehabilitate Housing"RESOLUTION NO. 1981 -198
A RESOLUTION OF THE TOWN COUNCIL OF THE
TOWN OF LOS GATOS AUTHORIZING "AGREEMENT
TO REHABILITATE HOUSING."
RESOLVED, that the Mayor of the Town of Los Gatos is
hereby authorized and directed to execute an AGREEMENT TO
REHABILITATE HOUSING (copy of which is attached hereto) on
behalf of the TOWN OF LOS GATOS.
PASSED AND ADOPTED by the Town Council of the Town of
regular
Los Gatos at a continued/ meeting held this 9th day
Of September , 1981, by the following vote:
AYES: COUNCIL MEMBERS Ruth Cannon, Thomas J.
Ferrito, MarLvn J. Rasmussen, and Peter
W. Siemens
NOES: COUNCIL MEMBERS None
ABSENT: COUNCIL MEMBERS Brent N. Ventura
ABSTAIN: COUNCIL MEMBERS None
SIGNED:
� a znu:-r�- I �—
MAYOR, T 4N OF OS GATOS�—
ATTEST:
CffLEYW OF THE- TOWN OF 1 GATOS
AGREEMENT TO REHABILITATE HOUSING
T -11IN CLERK
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AGREEMENT, between the Town of Los Gatos ( "Town" herein) and
The Mid - Peninsula Coalition Housing Fund ( "Fund" herein), entered
into thisI day of/�ow 1981.
RECITALS:
1. The Town owns a lot at the corner of Fiesta and Villa Streets
( "Site 1 "), on which is located a 4 -unit apartment ( "Apartment "), and
would like to remove the Apartment from Site 1 to allow for increased
parking at the Town Hall, and move it to another lot owned by the
Town on the southeast corner of Wilder and Nicholson Streets, APN 510-
17-81 ( "Site 2 "), to be used for low - moderate income senior housing.
2. Revised Department of Housing and Urban Development Community
Development Block Grant Rules and Regulations published March 1, 1978,
expand eligibility of programs to those sponsored or implemented by
private non - profit corporations.
3. Fund is a non - profit corporation with extensive experience
in developing and operating low- moderate income housing, and is willing
to undertake the project of moving the Apartment from Site 1 to Site 2,
rehabilitating it, and operating it as low- moderate income senior housing
on the terms and conditions set forth herein.
4. The Town has adopted Ordinance No. 1513 (the "Ordinance "), a
PD zone which establishes the conditions for the aforesaid moving and
rehabilitation.
5. It is understood by the parties that the essence of this
Agreement is the Town's clear and absolute intention that the Site be
used solely and exclusively for provision of low or moderate income
senior citizen housing. Fund fully understands this intention of the
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Town and agrees to it without reservation.
6. Although Fund's primary objective is to develop and maintain
an interest in housing principally for individuals and families having
low and moderate incomes, Town and Fund recognize that circumstances
may arise at any future time or times which could cause Fund to decide
that it must sell or dispose of acquired properties.
IT IS THEREFORE AGREED:
A. Transfer and Ownership.
1. Town shall transfer the Apartment to the Fund at no charge,
and shall convey Site 2 to the Fund for a purchase price of $20,000.00
payable in cash at close of escrow.
2. The Fund shall not sell any`part or all of Site 2 or the
Apartment without an express prior finding by the Town Council, after
full and fair consideration of all the facts and circumstances, that
the purchaser is willing and able to fulfill all the obligations of
the Fund under this Agreement of any amendments thereto; or in the
alternative, to relieve Fund from its obligations in accordance with
the terms stipulated for disposition under E.3. below.
B. Moving and Rehabilitation.
1. The Fund shall move the Apartment from Site 1 to Site 2, and
shall be responsible for obtaining all permits required from any and
all agencies having jurisdiction over such a move, including, but not
limited to, the following:
a) Business license for mover.
b) Sewer connection permit from Sanitation District 4.
2. The Town shall waive all construction permit fees, engineering
fees, plan check fees, construction taxes, and utility taxes applicable
to the moving, rehabilitation and reconstruction of the buildings on
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Site 2. However, the Fund shall provide the following bonds to the
satisfaction of the Town.
a) $500.00 cash bond to cover damages to others during
move.
b) Relocation permit bond in an amount specified by the
Town Building Official.
3. The rehabilitation and reconstruction of the buildings of
Site 2 shall be carried out in accordance with plans and specifica-
tions approved by the Town Building Official, the conditions of
Ordinance No. 1513, and Architectural and Site Approval
The Fund shall be responsible for all off -site improvement costs.
4. The Town will arrange for a termite inspection of the
Apartment. The Fund shall pay for the termite inspection and any
needed repairs.
5. Upon removing the Apartment from Site 1, the Fund shall
also remove any remaining foundation at Site 1, and terminate exist-
ing utility connections (sewer, water, electricity, gas and telephone).
6. To finance the move and rehabilitation, the Town will loan
the Fund from available Community Development Block Grant funds what-
ever funds are needed to accomplish the required move and construction,
up to $94,000. The parties shall execute an addendum to this agreement
when final figures are available. The obligation to repay said loan
shall be evidenced by a promissory note secured by a deed of trust
junior to the primary financing, in the usual form being used in the
County of Santa Clara, California, at that time, and acceptable to
the Town Attorney, which shall:
a) Be payable within 5 years to the order of Town in a sum
equal to the CDBG funds released to the Fund for the project with
interest from the close of escrow on unpaid principal at the rate of
three (3) percent per annum; should interest not be paid annually, it shall
thereafter bear like interest as the principal, but the debt shall not
thereby be accelerated and such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at
the maximum rate permitted by law.
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b) Provide that any payments made by the Fund prior to maturity
of the note shall be applied first to the payment of interest on the
then remaining unpaid balance of such note, and then to reduction of
such unpaid principal balance;
c) Provide that the unpaid balance of principal and interest
shall be due and payable upon the sale, conveyance, exchange, transfer,
or other disposition of the property unless the written consent of the
Town to an extension or assumption of the indebtedness, evidenced by a
resolution of the Town Council, is first obtained;
d) Reserve the right of Fund to discharge its obligations to
r
Town under the agreement with respect to the use of the property by
prepaying the entire unpaid principal amount and interest at any time
prior to maturity; provided, however, if Fund discharges its obligations
within the first five (5) years after acquiring the Property, Fund must
first pay to Town an additional sum equal to six percent (6 %) per annum
of the amount of the original principal amount solely as consideration
for release of Fund's obligations;
e) Provide that Fund assumes no personal liability for the pay-
ment of the note and that Town agrees to look solely to the security
of the deed of trust for payment thereof; and
f) Provide for subordination of the promissory note and deed of
trust to other encumbrances upon the property with the prior written
consent of the Town Manager and the approval of the Town Attorney, and
subject to such terms and conditions as they may deem advisable.
C. Operation.
1. The Town's current tenants in the Apartment shall be given
first priority for reoccupying the Apartment after rehabilitation, at
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a rent not to exceed 25% of their gross monthly income. The Fund
shall also provide such tenants interim assistance, in the form of
paying all costs of packing, moving, storage and interim rent.
2. Residence in the project shall be restricted to persons who
are sixty years of age or older, or married couples living together
when at least one spouse is sixty years of age or older. Higher minimum
age limits established by private restrictions are permissable.
3. Occupancy of the units shall be in accordance with the follow-
ing preference:
(1) FIRST PREFERENCE: Senior citizens who live in the
Town of Los Gatos,
(2) SECOND PREFERENCE: Senior citizens who have lived
r
in the Town of Los Gatos,
(3) THIRD PREFERENCE: All other senior citizens eligible
according to income criteria.
4. The units shall remain as rental units exclusively for
residence by low- moderate income senior citizens in accordance with
the income criteria as specified by the available federal rental assist-
ance program. Absent any federal criteria the Town Council will estab-
lish the criteria.
D. Escrow and Timing.
1. The parties shall open an escrow at a mutually acceptable.
title company within 10 days after execution of this Agreement, and
shall take all actions necessary to allow escrow to close no later than
15 October 1981. Title and escrow fees shall be split equally between
the Town and the Fund. The Fund shall be entitled to possession of
Site 2 at close of escrow.
2. The Town shall deliver title free of liens, encumbrances,
easements, restrictions, assessments, rights and conditions of record.
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All assessments shall be paid or assumed by the Town.
3. The Fund shall commence performance of its moving and re-
habilitation obligations no later than 15 October 1981, and shall
complete the same not later than 180 days thereafter.
E. Indemnification.
1. The Fund and the Town shall mutually indemnify and hold
harmless from the other, any claims of any kind arising out of any
activities of each undertaken pursuant to this Agreement.
2. The Fund shall acquire, carry and maintain at all times,
without expense to Town, insurance in the name of Fund against any
liability to the public resulting from any occurrence in or about the
property in an amount not less than $500,000 single limit and two million
excess limits.
3. Fund shall also at its sole expense acquire, carry and main-
tain in full force and effect, with insurance companies licensed to do
business in the State of California, fire insurance with broad form
coverage covering the buildings on Site 2 and naming the Fund and the
Town as insureds. Such insurance shall be in the face amount.
4. Waiver of Subrogation. Fund and Town each hereby waives any
and all rights of recovery against the other or against the officers,
employees, agents, and representatives of the other for loss of or
damage to such waiving party, or its property, or the property of
others under its control, where such loss or damage is insured by any
insurance policy in force at the time of such loss or damage. Fund and
Town shall, upon obtaining policies of insurance, give notice to the
insurance carrier or carriers that the foregoing mutual waiver of sub-
rogation is contained in the Agreement.
F. Default Disputes and Disposition
1. If the Fund defaults in its obligations hereunder, and fails
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to remedy said default within 30 days after receipt of written notice
from the Town of such default, the Town shall have the power to declare
a termination of all right, title and interest of the Fund in the
Apartment and in Site 2, and the buildings thereon, and all improvements
of either, and such Site and improvements shall revert to the Town, sub-
ject to any liens and encumbrances thereon.
2. In the event of litigation between the parties over this
Agreement or the Ordinance, the prevailing party shall be entitled to
reasonable attorney's fees and costs, even though said costs are not
specifically allowed by statute.
3. In the event a property acquired under, or improvements there-
on, are damaged or destroyed, the amount collected by Fund under any
fire or other insurance policy or pursuant to any claim in compensation
for the damage or destruction shall be applied first to repair or re-
place the property so damaged or destroyed unless to do so would not be
the best action to meet the objectives of this Agreement.
In all other events and subject to any contrary provision of
federal law, (a) any such amounts specified above not used for repair
or replacement, (b) net proceeds from the resale of the property as to
which Fund shall not have previously discharged its obligations in
accordance with this Agreement shall be applied as follows:
a) First to discharge Fund's obligations under the
Promissory Note;
b) Next, 50% of the balance, but not less than the
amount loaned to the Fund by the Town under provision of Section B5
of this agreement.
C) Finally, the remaining balance to Fund.
For the purpose of this paragraph "net proceeds" shall mean
any proceeds remaining after senior encymbrances and customary and reason-
able costs of sale have been paid, including such costs as appraisal
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fees, title and escrow fees, brokers' commissions, transfer fees, and
attorneys' fees involved in any sale of property covered by this Agree-
ment.
IN WITNESS WHEREOF, the parties have hereunto set their hands on
the date and year set forth above.
SIGNED:
•
TOWN OF LOS GATOS By ?Ipj��u
Peter W. Siemens, Mayor
MID - PENINSULA HOUSING COALITION
FUND By
APPROVED AS TO FORM: ?G �/ lz / B
Walter V. Hays, Town Attopin6yy�'
APPROVED AS TO CONTENT:
Jil Cody, Irect of Community Programs
STATE OF CALIFORNIA On this JRVI ................ day ofSePtember..... in the year onq thousand nine
SANTA CLARA } ss. hundred and eighty „one before me „_.,...,Susan „T. S1meK
COUNTY....... ...............................
O ..... " " "" ”" ”" "' ' ............ a Notary Public, State of California, duty commissioned and sworn, personally
appeared ........................ RABERI. E— MOUL70J: 1..I R.. ................... .................
known to me to be the EXQG.l tin...Zr2.G:t..u. of the corporation described
in and that executed the within instrument, and also known to me to be the
person....... who executed the within ineL.nne.d .,.. x,.i_,e ..e a_ .__ —.
STATE OF CALIFORNIA On this ...........18th,,,,,,, day of „SePtember in the, year one thousand nine
SANTA CLARA }S' hundred and. 0] .ghtY..QAg before me, ..S45an..T,: S�mek ......................
..................... .
COUNTY OF ............ ............................... a Notary Public, State of California, duly commissioned and sworn, personally
appeared ...... RET.ER. IL.. U EMEN.S ..................................... ...............................
known to me to be the ..... ..Mayor ........................ of the corporation described
in and that executed the within instrument, and also known to me to be the
person....... who executed the within instrument on behalf of the corporation
t�os�Ee a_,s a.:sx�mseacasaemcnw therein named, and acknowled¢ed to, a that s h corporation executed the
° SUJciAH T. SHMEK $ same.........Agreement to K eha bi�ita te.'. ous��i9 . ...............................
NOTARY PUSLIC-CALIPORNIA
,. IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
} Ka PRINCIPAL OFFICE IN 9
SANTA CLARA COUNTY seal in the......... ......... County of. S.anta..C�.drd ................ the day and
year in this certificate first ove written.
My Commitzlon Expires $ePt. 7. 1984 e
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Notary Public, late of California