1982-195-Authorizing Mayor To Execute Agreements Regarding Villa Vasona ProjectRESOLUTION NO. 1982 -195
RESOLUTION AUTHORIZING MAYOR TO EXECUTE AGREEMENTS
REGARDING VILLA VASONA PROJECT
The Council hereby RESOLVES:
The mayor is authorized to execute, on behalf of the Town, the attached
Settlement Agreement and. Agreement for Disoosition of Propertv.
PASSED at a regular meeting of the Town Council of the Town of Los
Gatos held on the 25th day of October 1982, by the following
vote:
AYES: COUNCIIMF BERS Ruth Camon,,Thomas J. Ferrito,
MarLyn J. Rasmussen, Peter W. Siemens and Mayor
Brent H. Ventura
NOES: COUNCILPMMBERS None
FF.ic�iVi \i`i!
ABSENT: COUNCILMaSERS None
SIGNED:
Mayor of the Town o± Los Gatos
ATTEST:
Clerk of the Town of Los Gate
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BY THIS AGREE=, made and entered into this 27th day of October ,
19 82, by and between VILIA VASONA, LTD., a California limited partnership
( "Developer "), and the TOWN OF LOS GATOS ( "Town "), it is recited and agreed as
follows:
RECITALS
A. In May of 1980, Town issued a Request for Proposals for development
of low and moderate income housing, on Parcel 406 -28 -01 (the "Town Site "), and a
portion of Parcel 406 -28 -09 (the "County Site "), pursuant to the Town's Housing
and Coa enmity Development Landbanking Program.
B. In response to the Request, the partners in the Developer submitted a
Proposal for Villa Vasona to the Town which the Town accepted on August 7, 1990.
C. On December 15, 1980, the Town Council passed an ordinance rezoning
the property for the development contemplated by the proposal, but that ordinance
was nullified by a vote of the Town's electors on May 12, 1981.
D. The Developer filed an action against the Town, entitled Villa Vasona,
Ltd., v. Town of Los Gatos, No. 484088 (Superior Court complaint filed September 21,
1981), claiming that the referendum nullifying the zoning ordinance was illegal
for certain specific reasons and seeking enforcement of its contract with the
Town for purchase of the site.
E. The Town filed an answer in the action, denying liability and raising
certain affirmative defenses.
F. In March, 1982, the parties entered into negotiations to settle the
lawsuit based on the premises that HUD might allow the project to proceed on an
all- elderly basis. Pending said negotiations, the Town took the following actions
to preserve the feasibility of a modified project:
1. Placed a measure on the ballot June 8, 1982, asking the voters to
approve construction of senior and handicapped units under Article 34 of the
California Constitution, which treasure passed.
2. Used $435,000 of CBDG funds to purchase an undivided interest in
the County site.
G. On August 4, 1982, HUD confirmed in writing its approval of the use of
Section 8 subsidies for an exclusively elderly project.
H. In order to preserve the opportunity for the development of affordable
housing for senior citizens in the Town of Los Gatos, the parties have decided to
settle the litigation. However, the signing of this Agreement does not constitute
an admission either of liability or that any claim or action is without merit.
NeFr"Tia
In consideration of the foregoing recitals, and of their mutual promises
herein, the parties agree as follows:
1. Upon execution of this Agreement-by the parties, Developer shall
dismiss Action No. 484088 without prejudice.
2. Within thirty days after execution of this Agreement, Developer shall
file an application to develop an all- senior project on the Town Site and a por-
tion of County Site purchased by the Town (hereinafter referred together as the
"Project Site "). Tine may be extended for good cause with the written consent
of the Town.
3. Town shall process the aforesaid application on a priority basis,
without fees. The parties shall cooperate in obtaining the portion of the County
parcel most suitable for a sound project.
4. The parties admowledge that from the Developer's standpoint the
optimum project would be one with forty (40) units per acre, the maximums allowed
under the general plan. However input from the public, Planning Commission and
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Town Council on planning considerations may require a lower density. Bearing these
considerations in mind, the parties agree that if the final zoning approvals by
the Town include density and other conditions that are consistent with good -faith
planning considerations, Developer shall, within thirty (30) days after the zoning
approvals are final, execute a general release in favor of the Town, forever re-
linquishing all right to revive Action No. 484088 or to pursue any other claims of
any kind arising in any manner to date out of the involvement of either party in
any aspect of the Villa Vasona Project, whether known or unknown.
5. If Developer fails to execute and deliver the release called for in
the preceding paragraph, Town shall have no further obligations under this Agreement.
Developer's sole remedy in such case shall be to revive Action No. 484088, and in
that case a finding that the Tovm has made the good -faith effort referred to in
paragraph 4 hereof shall be a complete defense to said action.
6. If Developer does execute the release called for in Paragraph 4,
Town shall convey to Developer the Project Site on the terms set forth in the
Disposition Agreement attached hereto as Exhibit A.
7. In the event of litigation over this Agreement, the prevailing party
shall be entitled to an award of reasonable attorneys' fees.
VILLA VASONA, LTD.
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TOWN OF LOS GATOS
By Cam.
Brent N. Ventura, Mayor
Walter V. Hays
Town Attorney
AGREE= FOR DISPOSITION OF PROPERTY
BY THIS AGREEMENT, made and entered into this 27th day of October
19 82, by and between VILLA VASONA, LTD., a California limited partnership
( "Developer "), and the TOWN OF LOS CATOS ( "Town "), it is recited and agreed as
follows:
RECITALS
A. Town and Developer have entered into a Settlement Agreement, the recitals
and terms of which are incorporated herein, which calls for Town to convey certain
real property to Developer pursuant to this Agreement and if certain conditions
in the Settlement Agreement are met.
B. The primary purpose of the Town in entering into both agreements is to
provide for the development of a Section 8 subsidized project exclusively for
senior citizens and handicapped. However, Town further intends to ensure by all
practical means that the housing will be designed, built and maintained to Town
standards. To these ends, Town is selling the subject property to Developer at
substantially less than fair market value. Developer understands these intentions
of the Town and agrees to them without reservation.
C. Villa Vasona, Ltd., partnership is presently composed of Jack W. Sheehan,
as general partner, with a 75 percent interest, and E. M. Schaffran and Co., as
limited partner, with a 25 percent interest. Both parties may desire to syndicate
their interests in the partnership.
WHEREFORE, in cansideration of the foregoing and their respective promises
herein, THE PARTIES AGREE AS FOLLOWS:
[THay5im�
A. Agreement to Sell and Designation of Property.
Town agrees to sell to Developer, and Developer agrees to buy from Town,
pursuant to the terms and conditions hereinafter set forth, the property consisting
of the following:
1. Parcel 406 -28 -01 (the "Town Site "), Santa Clara County, State of
California.
2. 1.002 acres of Parcel 406 -28 -09 (the "County Site "), the boundaries of
which shall be agreed upon between the Developer and the County.
B. Purchase Price.
Developer shall pay the following price for the property:
1. Fifty thousand dollars ($50,000) in cash at close of escrow on the sale.
2. An amount equal to ten percent (107) of the takeout loan for the project,
payable in cash at the final closing on that loan, less the payment tinder Paragraph B -1.
3. If the original partners (for purposes of this Paragraph B, Jack W.
Sheehan, Jack W. Sheehan, Inc., and E. M. Schaffran & Co. shall be deemed to be the
original partners) syndicate any part of the project before six months after close
of escrow on the takeout loan, the Developer shall pay the following amounts, or
the payment called for in Paragraph B -2, whichever is greater:
a. Fifty percent (507) of the proceeds of the syndication, less the
payment under B -1, payable in cash upon receipt by the original partner, with syn-
dication proceeds defined as follows: The amounts paid by additional partners for
their interests in the partnership, less any fees and expenses of syndication; pro-
vided, that the Developer shall not charge any syndication fees.
b. An amount equal to the percentage of the project not syndicated
times ten percent (107) of the takeout loan.
4. If any of the original partners syndicate any part of the project sub-
sequent to the six -month period, that partner shall pay to the Town fifty percent
(50%) of the net proceeds of that syndication, as defined in Paragraph B -3 -a, less
the minimum payment already made under Paragraph B -3 -b or Paragraph B -2 with respect
to the portion of the project then being syndicated.
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5. If the Developer refinances the project, an additional payment equal
to fifty percent (50 %) of the net proceeds of the refinancing received by the original
partners and not reinvested in the project, less the net capital contributions of
the original partners.
6. If the Developer eventually sells the project, an,additional.payment
equal to fifty percent (501) of the net proceeds to the original partners from that
sale, with net proceeds defined as follows: The payments received by the original
partners as a result of the sale after payment of all bona fide loans, less the
net capital contributions of the original partners. (Amounts allowed as return on
equity under Section 8 or its equivalent shall not be treated as return of capital.)
7. In lieu of the payments under Paragraphs B -2 through B -6, the Developer
may pay $1,030,477 in cash at the final closing on the takeout loan for the project,
less the payment under Paragraph B-1.
C. Covenants.
By appropriate documents at close of escrow, Developer shall covenant, on
behalf of itself and its successors, to do the following:
1. Restrict the use of the site to housing for elderly or handicapped
persons eligible for Section 8 subsidies during the period when Section 8 subsidies
are available to the project (or to persons eligible for subsidy available to the
project under any successor law to Section 8) and, thereafter, restrict the use of
the property to housing for elderly or handicapped persons of low and moderate in-
come , with moderate defined as between 80 percent and 120 percent of the median in-
come in Santa Clara County, adjusted for family size, and with "low" defined as
lower than moderate.
2. Adhere, on initial and subsequent lettings, to the Occupancy Preference
System established by the Town, attached hereto as Exhibit A, as supplemented by the
Affirmative Fair Marketing Plan established by the Town (also attached hereto as Exhibit
A). At such time as the project is no longer receiving any federal subsidy, the Town
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may modify its occupancy preference in any manner that wi�i not jeopardize the
Developer's interests.
3. Maintain the housing units to be constructed on the Site in accord-
ance with the maintenance standards established by the Town, attached hereto as
Exhibit B. Town personnel will make periodic inspections. The parties may revise
such standards by mutual consent if necessity requires it.
4. Adopt and maintain the Los Gatos management policies set.forth in
Exhibit C attached hereto, together with other management policies which ensure
that tenants are not allowed to violate any Town ordinances or in any manner cause
a disturbance to neighbors of the project
by mutual consent if necessity requires it.
The parties may revise such standards
5. Not sell, assign or transfer in any manner any part or all of the
Site or improvements, or bring in a new general partner, other than Jack W.
Sheehan, Inc. (or a co- general partner for syndication purposes), without an ex-
press prior finding by the Town Council, after full and fair consideration of all
the facts and circumstances, that the purchaser (or new general partner) is willing
and able to fulfill all the obligations of the Developer under this Agreement or
any amendments thereto.
taxation.
6. Maintain the premises in private ownership, subject to ad valorem
7. Place no new encumbrances on the Site at any time after 45 years
from close of escrow, nor borrow against the property on any existing encumbrances
after said date, without the written approval of the Town.
8. Reconvey the Site to the Town, at the Town's option, to be exercised
as stated herein, sixty -five (65) years from the date of close of escrow on the
take -out loan for the project, for the sun of (he Dollar ($1.00) plus all transfer
costs. Said conveyance shall include any and all improvements then existing on
the Site, free of all encumbrances, but subject to all obligations arising from
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operation of the project except those personal injury and property damage obliga-
tions not covered by insurance.
D. Contingencies.
The Developer's obligation to purchase the property is subject to the
following contingencies:
1. Zoning approval satisfactory to the Town and Developer, as evidenced
by Developer's execution of the release called for in Paragraph 4-of the Settlement
Agreement between the parties.
2. Subdivision of the Project Site at Town expense,
3. Issuance to Developer, at Developer's expense, of all permits and
approvals required to be obtained from governmental and regulatory agencies for
development of the site. Developer agrees to use his best efforts to obtain all
such permits and approvals as rapidly as feasible after the execution of this Agree -
aunt, and to notify the Town in writing as soon as each permit or approval is
obtained.
4. The obtaining of construction and permanent financing satisfactory
to the Developer. If the Developer is unable to find satisfactory financing,
it shall not attempt to transfer its reservation of Section 8 subsidies to another
project; provided that if the Developer finds financing which is satisfactory to
it but not acceptable to the Town, this restriction on transfer shall not apply.
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E. Escrow and Title.
1. The Developer sha -1 choose an escrow company at which an escrow
shall be opened.
2. Escrow shall close within 120 days after the release referred to in
Paragraph 4 of the Settlement Agreement has been delivered to the Town, except
that the closing date may be extended by written consent of the parties for good
cause shown. The parties shall deliver signed instructions to the escrow holder
within sufficient time to allow closing within the designated time period. Time
is of the essence in this Agreement. All modifications or extensions shall be in
writing signed by both parties. Any extensions will not be construed to be a
waiver of the "titre is of the essence" clause.
3. All escrow fees, title insurance costs, and other closing costs
shall be paid by Developer.
4. All assessments and the costs of any off -site improvements shall
be paid by the Town.
5. The Town shall furnish Developer at Developer's expense a standard
California Land Title Association Policy showing title vested in the Developer
subject only to the following:
a. Easements or rights of way for public or quasi - public utility
or public street purposes, if any.
b. The covenants in Paragraph C hereof.
F. Possession.
Developer shall be entitled to possession of the Site at close of escrow.
However, commencing with execution of this Agreement, Developer shall have a limited
right of entry, subject to Town permits, on the Site for the purpose of locating
construction trailers (one or more of which will contain a construction office),
M
making surveys, conducting inspections by consultants and performing similar
functions which must be completed prior to commencement of construction; pro-
vided that prior to exercising such right of entry Developer shall comply with
the insurance requirements of Paragraph H -7 hereof.
G. Default in Purchase.
1. If Developer fails to complete this purchase by reason of any default
of Developer, the Town shall be released from its obligation to sell the property
to Developer.
2. Developer recognizes that the Tam has spent considerable time,
effort and money acquiring the Site, preparing it for development, and ensuring
that the project will qualify for financing; that the Tam has chosen Developer
over other potential developers in reliance on Developer's commitment to complete
the project; and that it is extremely difficult and impractical to determine the
exact damages that the Town would suffer in the event of a default by Developer.
Accordingly, the parties agree that if Developer defaults in closing escrow as
stated above in Paragraph P -2, the Town shall be entitled to $100,000 as liquidated
damages, in lieu of any other relief to which the Town might otherwise be entitled
by virtue of this contract or operation of the law. (The parties hereby specifically
agree to the foregoing provision as follows:
Dated: October 27, 1982
Town Dev toper g
BYd }�� ✓n J By [�
3. If Town fails to deliver title or mee,4ther obligations as prescribed
in Paragraph C above, Developer may terminate this Agreement. Specifically, the
Town shall have no liability hereunder if any portion of the project is defeated
by referendum or initiative.
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H. Development,
1. Commencing promptly upon close of escrow, Developer shall diligently
develop the Site in accordance with the requirements of the PD Zone. Construction
shall be completed within eighteen (18) months after close of escrow, unless an
extension is approved by the Town Council, which approval shall not be withheld
unreasonably. Occupancy permits shall be issued in accordance with Town policy.
2. Developer shall assume and discharge all duties and obligations
specified in the construction contract, including without limitation the payment of
any stuns of money thereunder. Moreover, Town agrees to indemnify and hold and
save Town free and harmless from and against any and all claims, demands, liens,
judgments and attorneys' fees arising from and out of the construction contract.
3. Developer shall promptly cause to be paid or shall promptly pay any
on-site expenses (except for such expenses as may be incurred in
connection with the improvements and services to be provided by the Town pursuant
to this Agreement) together with any direct and indirect job costs associated with
or related to the development of the Site and all valid bills and charges for
material, labor or other costs in connection with or arising out of the con-
struction of the project. Developer further agrees to indemnify and hold and
save Town free and harmless from and against any and all claims, demands, liens,
judgments and attorneys' fees arising after the date on which Developer takes
possession of the Site from and out of development of the Site and construction
of the project.
4. Developer shall indemnify, save harmless and defend Town from all
liability, losses, damages, costs, expenses (including attorneys' fees), causes
of action, claims and judgments arising out of any injury or death to any person
or persons (including employees of Developer and Developer's affiliated general
contractor) or damage to the property of any person or persons of any kind and
I:]I
to whomsoever belonging from any cause whatsoever in, upon or in any way connected
with the Site or the sidewalks, streets, alleys, parking lots and premises adjacent
thereto, or the use or occupancy thereof during Developer's possession thereof,
and shall reimburse Town for any attorneys' fees and expenses incurred ip connec-
tion with any such claim. Nothing herein should be construed to require Developer
to indemnify Town to any extent for damages arising soleley out of the, acts or
emissions of Town, its agents or servants.
5. Town shall indemnify, save harmless and defend Developer from all
liability, losses, damages, costs, expenses (including attorneys' fees), causes
of action, claims and judgments arising out of any injury or death to any person
or persons (including employees of Town and Town's affiliated general contractor)
or damage to the property of any person or persons of any kind and to whomsoever
belonging from any cause whatsoever in, upon or in any way connected with the Site
or the sidewalks, streets, alleys, parking lots and premises adjacent thereto, or
the use or occupancy thereof during Town's possession thereof, and shall reimburse
Developer for any attorneys' fees and expenses incurred in connection with any
such claim. Nothing herein should be construed to require Town to indemnify
Developer to any extent for damages arising solely out of the acts of omissions
of Developer, its agents or servants.
6. Developer shall acquire, carry and maintain during the term of
development, without expense to Town, insurance in the name of Developer (and
naming Town as an additional insured) against any liability to the public resulting
from any occurrence in or about the property in an amount not less than Five Hun-
dred Thousand Dollars ($500,000) per person and One Million Dollars ($1,000,000)
per occurrence to indemnify against the claim or claims for injury to or death of
one or more persons, and not less than One Hundred Thousand Dollars ($100,000) for
damage to property. Developer shall at its sole expense acquire, carry and main-
Mel
tain in full force and effect throughout the term of development, with insurance
companies licensed to do business in the State of California, fire insurance with
broad form coverage covering the project and naming Developer and Town as insured.
Such-insurance shall be in the fa €e amount equal to the full insurable value of
the project excluding foundations and excavating costs. All policies shall pro-
vide that they cannot be cancelled without thirty (30) days' notice to the Town.
7. Town shall name Developer as an additional insured under Town's
liability policies.
I. Accounting.
Within ninety (90) days of completion of construction, Developer shall pre-
sent the Town with an accounting of his total cash investment in the project. The
cash investment shall be computed as follows:
1. Original cash invested by partners from May, 1980.
2. Any fees or expenses contributed by the General Partner that are in-
cludable for cost certification and do represent investment equity, such as Builder,
Sponsor profit and Risk Allowance. Within ninety (90) days of the submittal, the
Town may investigate the accounting to the extent it is necessary at the Town's
expense. If the Town disagrees with the accounting presented, good faith negotia-
tions shall be conducted with the Developer. If the Town and Developer are unable
to reach agreement, the cash investment hereunder shall be determined by arbitration
in accordance with the rules of the American Arbitration Association, and judgment
may be entered on any award. Once a determination of cash investment has been made,
it shall not be increased or decreased thereafter.
J. Operation.
1. Upon completion of construction, Developer shall rent, maintain, manage,
and otherwise operate the units in accordance with the covenants set forth in Para-
graph C hereof, and shall pay all debts secured by the property.
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2. Developer shall at all times maintain sufficient insurance to protect
the interests of the Town, including but not limited to sufficient coverage for
one hundred percent (100%) reconstruction of the premises to Tmm standards in
the event of fire or other casualty, including an earthquake, unless the cost would
be um reasonable, and shall name the Town as an additional insured. Developer shall
report annually to the Town on the insurance maintained. If as a result of any such
annual report the Town Council concludes that the insurance is not sufficient to
protect the interests of the Town, it shall conduct good faith negotiations with the
Developer for an increase in the insurance to a level which is sufficient. If the
Town and the Developer are unable to reach agreement, the amount of insurance which
is sufficient shall be determined by arbitration in accordance with the rules of
the American Arbitration Association and judgment may be entered on any award.
3. If the premises are destroyed by accident or any other casualty (except
earthquake if insurance is not available at a reasonable price), Developer shall
promptly rebuild and continue its obligations under this Agreement.
K. Default in Development or Operation.
1. In the event Developer defaults in its obligations under Sections
H or J and fails to remedy said default within ninety (90) 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 Developer in the
Site conveyed to the Developer hereunder and all improvements constructed thereon,
and such Site and improvements shall revert,to the Town; provided, that such con-
dition subsequent and revesting of title shall not affect the following:
a. The lien of any deed of trust executed to obtain the construction
loan and long -term mortgage financing for the project. However, the revesting of
title in the Town shall take precedence over any other deeds of trust unless such
deeds of trust are approved in advance by resolution of the Town Council.
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b. Any lease or rental agreement between the Developer and any low-
or moderate - income tenant.
The Town shall have the right to institute such actions or pro-
ceedings as it may deem desirable for effectuating the purpose of this section,
including but not limited to the right to execute and record with the Recorder of
the County of Santa Clara a written declaration of the termination of X11 right
and title of the Developer as set forth above. Any delay by the Town in taking
such action shall not operate as a waiver of its rights, it being the intent of
this provision that the Town shall not be constrained, so as to avoid the risk
of being deprived of or limited in the exercise of the remedy provided in this
paragraph because of concepts of waiver, laches or otherwise.
If the Tam exercises its power of termination upon conditions
subsequent, as set forth in the preceding paragraph, within forty -five (45) years
after close of escrow, the Town shall, in order to avoid a forfeiture or undue
hardship to Developer, pay to Developer, within one hundred twenty (120) days
following the date of revesting of title in the Town, an amount equal to the
actual cash (not borrowed) invested by the Developer in purchasing the Site and
making improvements thereon, as determined Linder Paragraph I. If the Town exer-
cises its power of termination beyond said time, the Developer shall receive no
payment.
2. In the event of the occurrence of any default by Developer upon any
mortgage loan with respect to the project or the Site, Tian shall give Developer
written notice specifying such default, and stating that unless such default is
cuffed within a specified period, the Site or project will be foreclosed upon.
This notice is required to permit action by Developer which will prevent fore-
closure upon the Site or project by the mortgage lender or insurer. Town shall
record a request that notice of any default be sent to Town.
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3. Notwithstanding any other provision of this Agreement, if the project
is constructed /developed with the proceeds of an FHA - insured mortgage (which term
includes a "deed of trust ") or tax - exempt bonds, then (a) so long as the mortgage
is insured or held by the Secretary of HUD or by the issuers of the bonds or the
trustee for the bondholders, or (b) if the project is to be foreclosed by the
Secretary, the trustee or the issuer of the bonds and one of them comas into owner-
ship by such foreclosure, or deed in lieu thereof, none of the provisions of
this Agreement relating to reversions, penalties, foreclosures, defaults, restric-
tions, etc., shall apply to or restrict the Secretary, the trustee or the issuer
in the exercise of their rights and responsibilities under the insured mortgage,
the National Housing Act, and the regulations issued pursuant thereto or with
regard to the tax - exempt financing.
L. Option to Repurchase.
Sixty -five (65) years from the date of close of escrow under this Agree-
ment, Developer shall reconvey the Site to the Town, at the Town's option (to be
exercised as stated below), for the stun of One Dollar ($1.00), by good and suf-
ficient grant deed, with the Ton paying all transfer costs. Said conveyance
shall include any and all improvements and fixtures then existing on the Site,
free of all enc- r -brances, but subject to all obligations arising from the opera-
tion of the project except those personal injury and property damage obligations
not covered by insurance. No improvements or fixtures installed on the premises
at any time during the sixty -five (65) years may be removed by Developer (except
for replacement purposes) without the written consent of the Town.
M. Miscellaneous.
1. It is intended and agreed, and the deed so expressly provide, that
the agreements and covenants made by the Developer in this Agreement shall be
covenants running with the land and that they shall, in any event, and without
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regard to technical classification or designation, legal or otherwise, and except
only as otherwise specifically provided in this Agreement itself, be, to the
fullest extent permitted by law and equity, binding for the benefit and in favor
of, and enforceable by, the Town., its successors and assigns, against the Site or
any part thereof. The covenants shall therefore expressly benefit the property on
which Town Hall is located, or such other Town -owned property as the Council nay
from time to time designate.
2. Promptly at the request of Developer, its successors and assigns,
the Town shall issue a recordable certificate stating, if it be true, that there
is no default by the Developer or its successors and assigns in the performance
of its agreements and covenants under this Agreement.
3. None of the provisions of this Agreement are intended to or shall be
merged by reason of any deed transferring title to the Site from the Town to the
Developer or any successor in interest, and any such deed shall not be deemed to
affect or impair the provisions and covenants of this Agreement.
4. A notice of communication under this Agreement by either party to the
other shall be sufficiently given or delivered if dispatched by registered mail,
postage prepaid, addressed to the following address or to such other address as
may have been furnished by either party to the other party.
Town
Town Manager
P. 0. Box 949
Los Gatos, CA 95031
Developer
Jack Sheehan
3154 Windsor Court
Lafayette, CA 94549
5. In the event of a breach or a threatened breach of this Agreement,
either party at its option shall be entitled to an injunction restraining the party
or parties about to commit any breach of this Agreement or who have committed a breach
thereof, without showing or proving any actual damage sustained by such party.
6. If either party shall fail or refuse to perform stipulations hereof on
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their part, then the other party at its option may, by suit, enforce specific per-
formance by the defaulting party, the execution of a deed as herein provided, and
performance of any other act hereby required of the defaulting party and /or may
recover from such defaulting party wbatever damages may be provided by law or
this Agreement.
7. In the event of litigation between the parties over any Ispect of this
Agreement, the prevailing party shall be entitled to all reasonable costs of liti-
gation (not limited to those allowed by statute), as well as reasonable attorneys' fee.
ATTEST:
TOWN OF LOS GATOS
BY—�
VILLA VASONA, LTD.
BY e _ X11
j f (Seal)
Town Cr
'Attach acknowledpment, so document can be recorded.)
APPROVFT AS TO FORM:
By i L%� LTe II tY Lf
alter V. Hays, Town tomey
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OCCUPANCY PREFERENCE SYSTEM
UI,
TOWN OF LOS GATOS
A. OCCUPANCY PREFERENCE SYSTEM
(1) Senior citizens who live in the Town of Los Gatos.
(2) Senior citizens who have lived in the Town of Los Gatos.
(3) All other senior applicants eligible according to income criteria.
(4) Handicapped persons will be given preference over non - handicapped
persons for those emits especially designed for the handicapped.
E. AFFIRMATIVE FAIR HOUSING MARKETING PLAN
Developer shall conduct advance affirmative fair housing marketing to
stimulate applications from those ethnic groups least likely to apply. In so
doing, contact shall be made with minority organizations in Los Gatos and vicinity
that will be helpful in disseminating information about Villa Vasona to those least
likely to apply; advertisements and news items will be placed in ccniercial media
that have minority following. A fair housing poster and logo will be prominently
displayed on site and in publicity materials. The objective of affirmative
marketing will be the occupancy of 20% of the dwelling units by minority households.
Toivn o" Los Gatos ?Maintenance Star`'zrds
Villa Vasona shall be maintained in accordance with the
standards shown below.
Before accepting the project from the contractor, the management
staff will assemble a manual on all equipment and guaranties,
obtain the as -built drawings, walk through the project with the
contractor, develop the punch list and male sure that pufrch list
items are taken care of,,complete an inventory of all equipment
and establish preventive, maintenance schedules.
The maintenance program will observe these standards: '.
Custodial Services: The following areas will be cleaned
often as necessary to keep them neat and trim: public
areas, parking areas, the community building, refuse
storage areas, walkways, laundry areas, etc.
Grounds Maintenance: The grounds, including land-
scaping, will be maintained in an orderly, healthy,
well- groomed manner.
Lighting Maintenance: All lighting equipment, and the
ulbs, in t e non- welling areas will be properly main-
tained and repaired. Bulbs will be replaced as necessary.
Resident Service Calls: work orders will be used for
maintenance service calls. Residents with maintenance
problems will advise the manager, specifying the problem
and entry procedure. The objective will be to correct
the problem with one call to the unit. If parts have
to be ordered to make the repair the tenant will be so
advised and given a target date for work accomplishment.
The problems will be responded to promptly.
When damage occurs, such as a broken window, the personnel
will be expected to repair it right away. If the tenant
is found responsible, the repair and replacement cost
will be charged to the tenant.
Preventive A4aintenance: A preventive maintenance schedule
will be established and rigorously pursued.
Repainting and Redecorating: Apartments will be redecorated
primarily on turnover. T e common areas, exteriors, and
units will be kept looking trim and inviting at all times.
Extermination Services: Extermination service will be
conducted as often as necessary to prevent infection.
For operating instructions and equipment check -out, prospective
residents will inspect the unit with a staff member.before
occupancy, fill out a "check -in /check -out" list, signed by both
parties. The list will be kept in the resident's file until just
Prior to move -out. Then, the resident and staff member will conduct
another inspection and complete the "check-out" portion of the list.
Before re- renting necessary work will be performed. Charges will
be made against vacating residents for any damage above normal
wear and tear. The procedure will be repeated with the replacement
residents.
EXHIBIT B
LOS GATOS MANAGEMENT POLICIES
Rent Collection Policv
Rents will be collected J*t the ?Manager's Office on or about the
first of every month. Any tenants who are delinquent as of the
close of business the third workingday will be notified"immediately
by way of a courtesy notice placed in their mailbox or under the
door that their rent is overdue, and the possibility of eviction
if their rent is not received. If payment is still not received
by the 10th of the month, additional procedures will be taken to
assure that an image of fairness, yet firmness, is maintained in
this regard. Pre- payments will be accepted and encouraged where - '
ever possible. Special arrangements may be made for tenants whose
regular pay schedule does not correspond to the normal collection,
of if some unusual family situation occurs. If rents are not paid
by the 10th of the month, the accounts are turned over to attorneys
for legal proceedings. Filing costs are charged to the tenants.
Contact will be made with former landlords, acquaintances and
business and character.references to assure that a particular family
will prove to be a reasonably reliable credit risk and satisfactory
tenant.
Preventive Maintenance
The Management Agent will employ maintenance personnel who are
knowledgeable about the mechanical aspects of the new facility and
its equipment. The maintenance personnel will be responsible for
preventai•de maintenance procedures for heating systems, appliances,
water systems, roof, grounds, etc. Public areas of the project,
i. e., hallWays, stairways, mechanical spaces, community areas,
parking spaces and grounds are to be inspected by the maintenance
personnel for defects or obstructions, and reported to the Manager,
who will be responsible for seeing that the condition is corrected.
In addition, maintenance and service repair contracts will be
executed for technical inspections on a scheduled basis for the
project facilities.
Tenants will be made familiar with the manner of operating mechanical
units in their apartments throu,,h meetings of the Residents Association
and visual displays, etc.
Apartments will be serviced twice yearly and /or by request of tenant.
They «ili be exterminated, filters will be changed, and the heating
and air-conditioning units will be checked.
I0G1�%1 C�IITf
i
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Mana�,emcnt 1 ent /0Wner Relationship
The Owner is fully cognizant that effective management of housing
for lo• :.er inco e individuy�ls and families will entail special
considerations, particularly pertainin to social and economic
problems of the tenants, collection of-'rents, and proper physical
maintenance of the newly constructed facilities. In viewlof these
concerns, the following program for management has been devised.
The Owner will be responsible for the management of the project
and reserves the right to formulate all systems, policies, pro-
cedures, and regulations, which are to be imposed. Actual imple-
mentation will be coordinated by the Management Agent....the Manage-
ment Agent will select and supervise the ?{anager and the other
project employees. The management Agent will report to the Owner,
on a periodic basis, concerning all aspects of the operation.
Particular attention will be paid to achieving economies in main-
tenance and operating costs and administrative expenses so that
the tenants' rentals can be held to the lowest level possible. The
Management Agent will advise the project employees of their job
responsibilities and duties, and see that the Owner is apprised of
them, and that the responsibilities and duties of the employees are
carried out.
The applicants for apartments i,rho are accepted will be taken on a
tour oP the buildings and recreational and social facilities, for
an orientation of their ne,,v environment. Afterwards, a general
and thorough session will be held to discuss office hours, proper
payment of rent, rules and regulations of the Department of Housing
and Urban Development and the Management, the residents' response
bilitics, as well as the Management's responsibilities, proper use
of equipment, etc. The Management Agent will conduct a meeting
with prospective residents before they are scheduled to move in.
The apartments 1i.11 be inspected before residents take possession,
and the resi -dchts will be required to sign a release form stating
that they Pound tike apartment in good and livable condition.'. It
Will be made clear to every resident that the Managemont Agent is
available, by appointment, to discuss ar,y problem, hear any con;pla `t ,
and - assist the resident in resolving it. Follow -up will be done by
the Resident `Linager in consultation with the %ianagement Agent.
Tenants .:ill bo encouraged to participate in recreational and
educational pro,rams and activities, and above all, the Residents'
Association. Lists of local l;e:ilth, recreational and educational
facilities will he maintained in the Manager's Office and this
inforscition .ci11 be available for tenants. Special counseling and
referrals wi11 be carried out by the staff for residents iaho have
particular prohloms.
The ore- occuoancv interviews and tenant orientation sessions will
provide information concerning services to which the tenant is
entitled. Additionally, the ;ianager will respond to any inquiries
about tenant services.
Activities for the Elderl
A separate social and sitting area will be provided for the elderly.`
This will enable the elderly to participate in such activities
as sewing, ceramics, bingo, billiards, card playing, reading groups,
lectures regarding medicare, social security, retirement benefits,
etc.
Security
The staff will have the on -site responsibility for seeing that
security measures, i.e., locks on apartment doors are in working
order, dangerous areas are adequately locked and secured, and
hazardous conditions are removed or corrected. Police and fire
department telephone numbers will be maintained at the Manager's
Office and tenants will be instructed and reminded of security
precautions, which they should take for the protection of their
lives and property.
Vacancy and Turnover
Every effort frill be made in the initial screening of auplicants
to select those who will be stable tenants. Thereafter, the project
staff will implement the guidelines and programs included in the
Basic Manager:ent Plan, to ssure the lowest possible turnover rate.
Also, the project staff will, under the guidance and direction of _
the Management Agent, pursue an affirmative marketing plan to fill
those vacancies which do occur, at the earliest possible time in
order- to rinimize the effect of losses resulting from estendod
vacancies.
The &. ..nor believes that the guidelines set forth in this Plan, the
combination of ?Management skills and the proposed chain of
supervisory and fiscal controls, brought to bear on the operational
act4vi1t .Cs of the project, will result in all effective administration
Of the project to the satisfaction of the tenants, the community
and the Department of Housing and Urban Development.
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