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1992-031-Execute A Second Amendment To Agreement With Mid-Peninsula Housing Coalition & West Valley Open DoorsRESOLUTION 1992 - 31 RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN MANAGER TO EXECUTE: 1) A SECOND AMENDMENT TO THE COOPERATION AGREEMENT WITH MID - PENINSULA HOUSING COALITION AND WEST VALLEY OPEN DOORS TO CHANGE THE TOWN EXEMPTION OF IMPACT AND PLANNING FEES; AND, 2) AN AGREEMENT TO CANCEL INTEREST ON DEBT IN EXCHANGE FOR SOLE NONPROFIT OWNERSHIP BE IT RESOLVED by the Town of Los Gatos that the Town authorize the Town Manager to execute: 1) a Second Amendment to the Cooperation Agreement with Mid - Peninsula Housing Coalition and West Valley Open Doors to change the Town Exemption of impact and planning fees, attached as Exhibit A; and, 2) an Agreement to cancel interest on debt in exchange for sole nonprofit ownership, attached as Exhibit B. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 2nd day of March, 1992, by the following vote: COUNCIL MEMBERS: AYES: Randy Attaway, Joanne Benjamin, Steven Blanton, Brent N. Ventura, Mayor Eric D. Carlson NAYES: None. ABSENT: None. ABSTAIN: None. SIGNED: MAYOR OF THE TOWN OF LOS GATOS ATTEST: LOS GATOS, CALIFORNIA '� CLERK OF THE 'TOWN 0,17',LOS GATOS LOS GATOS, CALIFORNI.'` CSD08:A: \RESOS\CS030222. R31 -I- AGREEMENT TO CANCEL DEBT IN EXCHANGE FOR SOLE NONPROFIT OWNERSHIP THIS AGREEMENT TO CANCEL DEBT IN EXCHANGE FOR SOLE NONPROFIT OWNERSHIP (the "Agreement ") is entered into as of the day of , 1992 by and among Mid - Peninsula Open Doors Corporation, a California nonprofit public benefit corporation ("MPODC ") and the Town of Los Gatos, a municipal corporation (the "Town "). A. MPODC is a non - profit affiliate of Mid- Peninsula Housing Coalition ("MPHC") and is involved in the development and ownership of 64 units of affordable housing located on certain real property in the Town of Los Gatos (the "Project "). B. Town, MPHC and West Valley Open Doors, a California nonprofit public benefit corporation ("WVOD ") entered into that certain Cooperation Agreement Between the Town of Los Gatos, Mid - Peninsula Housing Coalition and West Valley Open Doors For the Provision of a Low Income Housing Development dated December 31, 1990 (the "Original Agreement "). C. By a First Amendment to Cooperation Agreement Between the Town of Los Gatos, Mid - Peninsula Housing Coalition, and West Valley Open Doors for the Provision of a Low Income Housing Development dated November 11, 1991 and executed by Town, MPHC and WVOD (the "First Amendment "), the parties agreed to substitute the site described in the Original Agreement located on Knowles Drive for an adjacent site located on West Parr Avenue (the "Site "). The Project will be developed on the Site. D. The Federal Low Income Housing Tax Credit Program (the "Tax Credits ") is an integral part of the financing for the Project. E. To realize the economic benefit of the Tax Credits for the Project, MPHC assigned its right to purchase the Site to a limited partnership, Open Doors Associates ( "ODA "), of which an affiliate of MPHC, Mid - Peninsula Open Doors Corporation, a California nonprofit public benefit corporation ("MPODC") is the general partner. ODA will develop the Project. F. Project feasibility is also dependent upon the availability to the Project of the benefits obtained by MPHC and WVOD in the Original Agreement as amended by the First Amendment. G. MPHC therefore wished to assign its rights and obligations under the Original Agreement, as amended by the First Amendment, to ODA. 191038.P50 01/24/92 -1- H. Pursuant to the Second Amendment to Cooperation Agreement Between the Town of Los Gatos, Mid - Peninsula Housing Coalition and West Valley open Doors For the Provision noof reed Income Housing Development (the Second Amendment), agreed to the assignment of the Original Agreement, as amended by the First Amendment, to ODA. I. The original Agreement as amended by the First Amendment and the second Amendment shall be called the Cooperation Agreement" in this Agreement. J. The terms and conditions of the Second Amendment included the requirement that certain fees not be waived for the Project but rather that the Town loan ODA the funds necessary to pay such fees. This loan is evidenced by a promissory note in the principal amount of Dollars ($ ) dated executed by ODA ' for the benefit of Town (the "Promissory Note "). K. Pursuant to the Cooperation Agreement, the Town has also loaned Three Hundred Thousand Dollars ($300,000) to the Project. This amount was used for a portion of the downpayment for the acquisition of the Site. It is evidenced by a Promissory note in the amount of Three Hundred Thousand Dollars ($300(the) executed by MPHC and dated ' "Acquisition Note "). With the Town's consent the obligations under the Acquisition Note have been assigned to ODA. i L. It is MPODC's intention to become the sole owner of the Project by purchasing the limited partner's interest in ODA in approximately 15 -20 years and the Town supports this goal. NOW, THEREFORE, for valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. In the event that MPODC becomes the sole owner of the Project, the Town will cancel all principal and interest due under the terms of the Promissory Note. 2. At the time of the cancellation of the Note as provided in this Agreement, the Town shall mark the Promissory Note cancelled, and return the cancelled Promissory Note to MPODC. 3. Nothing in this Agreement shall affect the terms, conditions or obligations contained in the Acquisition Note. 191039 P50 -2- 01/24/92 IN WITNESS WHEREOF, this Agreement is executed by Town and MPODC. APPROVED AS TO FORM: TOWN OF LOS GATOS, a municipal corporation Town Attorney Town Manager MID - PENINSULA OPEN DOORS CORPORATION, a California nonprofit public benefit corporation Executive Director 191038.P50 01/24i92 -3- f I tci SECOND AMENDMENT TO COOPERATION AGREEMENT BETWEEN THE TOWN OF LOS GATOS, MID - PENINSULA HOUSING COALITION AND WEST VALLEY OPEN DOORS FOR THE PROVISION OF A LOW INCOME HOUSING DEVELOPMENT This amendment modifies the agreement made and entered into by the TOWN OF LOS GATOS, a municipal corporation, whose address is 110 East Main Street, Los Gatos, California, 95032, herein- after referred to as "TOWN", MID- PENINSULA HOUSING COALITION, a California nonprofit corporation, whose address is 430 Sherman Avenue, Suite 203, Palo Alto, California, 94306, hereinafter referred to as "MPHC" and WEST VALLEY OPEN DOORS, whose address is 17831 Skyline Boulevard, Los Gatos, California 95030, herein- after referred to as "WVOD", on December 31, 1990, and approved in Resolution 1990 -248 (the "Original Agreement "). RECITALS A. Paragraph 10 of the Original Agreement authorizes written amendments to be effective when executed by all parties. B. By a First Amendment to Cooperation Agreement Between the Town of Los Gatos, Mid - Peninsula Housing Coalition, and west Valley OPen Doors for the Provision of a Low Income Housing Development dated November 11, 1991 and executed by Town, MPHC and WVOD (the "First Amendment "), the parties agreed to substi- tute the site described in the Original Agreement located on Knowles Drive for an adjacent site located on West Parr Avenue (the "Site "). C. The Original Agreement as amended by the First Amend- ment and by this Second Amendment to Cooperation Agreement Between the Town of Los Gatos, Mid - Peninsula Housing Coalition, and West Valley OPen Doors for the Provision of a Low Income Housing Development (the "Second Amendment ") shall be known in this Second Amendment as the Agreement. D. The Federal Low Income Housing Tax Credit Program (the "Tax Credits ") is an integral part of the financing for the development of low and moderate income housing on the Site (the "Project "). E. To realize the economic benefit of the Tax Credits for the Project, MPHC assigned its right to purchase the Site to a limited partnership, Open Doors Associates ( "ODA "), of which an affiliate of MPHC, Mid - Peninsula Open Doors Corporation, a 19103R.P50 02/27/92 -1- California nonprofit public benefit corporation ("MPODC") is the general partner. ODA will develop the Project. F. Project feasibility is also dependent upon the avail- ability to the Project of the benefits obtained by MPHC and WVOD in the original Agreement as amended by the First Amendment. G. Paragraph 5 of the Original Agreement provided that it could be assigned to any 501(c)3 corporation and that upon such assignment MPHC would be relieved of all obligations under the Original Agreement as amended by the First Amendment. H. MPODC has applied for exemption from taxation because it is a 501(C)(3) corporation. I. MPHC now wishes to assign its rights and obligations under the Original Agreement, as amended by the First Amens_ ant, to ODA. S. Town and WVOD are willing to allow this assignmen' on the terms and conditions set forth in this Second Amendment. AGREEMENT NOW, THEREFORE, in consideration of the recitals and the mutual obligations of the parties as expressed in this Agreement, the Town, MPHC and WVOD agree as follows: 1. Paragraph 2 of the Original Agreement shall be amended to read in its entirety as follows: "2. FEES A. The following fees will be charged to the P,:`v 4 ect: (1) Traffic Impact Fees (est. value $300,000); (2) Planning Fees (est. value $11,750); and (3) Building Permit Taxes (est. value $27,500) (a) Underground Utility Tax (b) Open space Tax 19103x.YSO -2- 02/ 27/92 B. The Town will loan ODA, on the following terms, the amount necessary to pay the above fees: (1) A disbursement of the loan will be considered to have been made each time a portion of the above fees is due to be paid by the Project. Such disbursement will be treated as a credit against the amount of fee owed. (2) The total loan amount will be the sum of all disbursements described in paragraph (1). (3) Each disbursement shall bear interest from the date made until repaid at the annual rate of 7.0% compounded annually; (4) The term of the loan shall begin the date of the first disbursement and shall continue for 32 years, or, until the Project is sold, whichever comes first. (5) All principal and interest under the loan shall be due and payable at the expiration of the term. (6) ODA shall execute a promissory note on the above terms in favor of Town to evidence the loan." 2. Town and WVOD consent to the assignment of the Agree- ment to ODA and agree that upon the execution by ODA of an agreement assuming all of the obligations under the Agreement, MPHC shall be relieved of all obligations under the Agreement. 3. MPODC has applied for a tax exemption as a 501(c)(3) corporation. It shall be a breach of the Agreement if: (a) MPODC fails to obtain a tax exemption as a 501(c)(3) corporation; (b) once MPODC obtains a 501(c)(3) tax exemption, it fails to maintain it; or (c) without Town's prior consent, MPODC is removed as general partner of ODA. 4. Except as specifically amended by this Second Amendment, the Original Agreement, as amended by the First Amendment, remains in full force and effect. 19103R.P50 02/27/92 -3- IN WITNESS WHEREOF, this Second Amendment is executed by Town, MPHC and WVOD. This Second Amendment is dated APPROVED AS TO FORM: Town Attorney WEST VALLEY OPEN DOORS, California nonprofit public benefit corporation Executive Director 19103R.P50 02/27/92 TOWN OF LOS GATOS, a municipal corporation Town Manager -4- MID - PENINSULA HOUSING COALITION, a California nonprofit public benefit corporation Executive Director J