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 REDEVELOPMENT AGENCY AGENDA ITEM NO. 3



Meeting Date: March 26, 2002

Subject/Title: Approval of Reimbursement Agreement between City of Brentwood, Brentwood Redevelopment Agency and Developer for a Portion of the Cost of Certain Public Improvements within Redevelopment Project Area

Submitted by: Howard Sword, Economic Development/Redevelopment Director
Gina Rozenski, Redevelopment Analyst

Approved by: John Stevenson, Executive Director


RECOMMENDATION 
Approve a resolution approving a Reimbursement Agreement between City, Agency and Developer for the Agency to reimburse the Developer for a portion of the cost to design, construct and install certain public improvements within the North Brentwood Redevelopment Project Area. Authorize the Executive Director to execute the Reimbursement Agreement and take all further actions to carry out the provisions of the Reimbursement Agreement. Authorize Agency Treasurer to reserve a portion of Agency’s 2001 Tax Allocation Bond Proceeds to fund Reimbursement Agreement, staff time, and consultant and legal fees.

PREVIOUS ACTION
None

EXECUTIVE SUMMARY
The Redevelopment Agency’s contribution of $1,500,000 to this project is warranted based on the following return on investment:
· The full contribution is re-paid within six years after substantial project completion.
· The project provides:
o Needed improvements to revitalize the area.
o Expanded local commercial and industrial opportunities.
o Improved transportation and circulation in the area and to the City.
o Increased affordable housing stock.
o Annual Transient Occupancy Tax of $130,305 to the City.
o Annual sales tax of $43,000 to the City.
o Approximately 856 jobs.
o Direct and indirect annual impact of $36.4M to the local economy.
· The project complies with the Agency’s Redevelopment Plan, its 5-Year Implementation Plan, and California Redevelopment Law’s mandated inclusionary housing requirements.
· Maximizes the Agency’s objective to invest bond proceeds in projects that generate increased tax increment.
· This is a model redevelopment project wherein the Agency’s stated programs, policies and investment strategies are fulfilled, and is directly responsive to the Agency’s project priorities of February 2001.

BACKGROUND
CL Land Management has proposed a 40-acre±, mixed-use development plan on Sand Creek Road just west of Brentwood Boulevard. The current entitlements for the proposed mixed-use project are as follows:

Development Plan Full Entitlements Zoning Approved,Design Review Pending
Sand Creek Business Center (9 bldgs on 11 acres) X 
Storage Facility X 
60-room Hotel X 
Sit-down Restaurant X 
Fast-food Restaurant X
Gregory Ranch Business Center (10 acres) X
120 Townhomes X
Sand Creek Road Offices #1, #2, and #3 X

Large mixed-used projects, by nature, are complex. In the case of this project, Sand Creek Business Center and Gregory Ranch had a combined total of 12 items requiring applications to the city or items needing agreement by other parties. The Time Line for these items is attached as Attachment 1. The Time Line is highlighted this to show the complex coordination efforts and relationships of bringing these projects to fruition.

As conditions of approval for these existing and future entitlements, the Developer is required to design, construct and install public improvements described as the ultimate roadway improvements on Sand Creek Road, specifically the frontage of his Parcels SC1, SC2 and CL1 (see Map, Exhibit A of Reimbursement Agreement). In addition, Developer is required to design, construct and install public improvements described as “A Street”, a new street to be installed south of Sand Creek Road, turning easterly and connecting to Brentwood Boulevard. The estimated cost for these public improvements is $3,300,000. The construction of the proposed hotel and two restaurants are tied to the City’s completion of widening and improving Brentwood Boulevard, funded with grants.

The Developer has requested the participation by the Brentwood Redevelopment Agency in the amount of $1,500,000 to pay for a portion of the cost to install the necessary public improvements. This request came after the Developer and the Agency investigated the potentials of assessment district and State Infrastructure Bank financing, and found both to be infeasible. The Agency also investigated loaning the Developer funds, but due to the tax- exempt nature of the Tax Allocation Bond, that option is also infeasible.

The proposed reimbursement by the Redevelopment Agency of a portion of the Developer’s cost to install the public improvements is in compliance with the goals and objectives of the Brentwood Redevelopment Agency, as identified in its Redevelopment Plan dated 1991, and its most recent 5-Year Implementation Plan dated March 2000. Also, such reimbursement of installation and construction of streets, utilities and other public improvements necessary to carry out the Redevelopment Plan are allowed by the Health & Safety Code, the California Community Redevelopment Law. 




The payment of the proposed $1,500,000 of Agency reimbursement to the Developer is conditioned on the following triggers:

1. Satisfactory completion of all public improvements, offer of dedication to the City, and acceptance by the City of a 10% maintenance bond.

2. Recordation of a final subdivision map for the residential portion of the development on Parcel CL1.

3. Issuance of building permits for 3 industrial/commercial buildings in Sand Creek Business Park on Parcel SC1, and installation of foundations for the 3 buildings.

4. Execution by the Developer of a Regulatory Agreement restricting 15% of the residential units for moderate-income households.

The Developer has agreed to comply with the Agency’s inclusionary housing requirement by providing 15%, or 18 units of 120 total units, for moderate-income housing, restricted for a minimum of 45 years for for-sale housing, and a minimum of 55 years for rental housing. This affordable housing restriction allows the Agency to fund a portion of the $1,500,000 total contribution from the Housing Set Aside Funds in the amount of $297,670. The contribution from the Housing Set Aside Funds is determined, in accordance with Health & Safety Section 33334.2, by the direct benefit of the road improvements to the 18 restricted units.

The remaining $1,202,330 will be funded by the proceeds from the Agency’s 2001 Tax Allocation Bonds (TAB) approved in September 2001.

The Developer is to commence construction of the public improvements, defined as evidence of signed agreement with and mobilization of contractors, no later than 90 days after recordation of the final subdivision map for the residential portion of the development on Parcel CL1. The Agency’s reimbursement obligation will terminate two years from the date of the recordation of the final subdivision map on Parcel CL1, the residential portion. The commencement dates insure that the public improvements are constructed by the Developer in a timely manner, while insuring the residential subdivision map is processed by the City in a timely manner. 

Furthermore, the Developer has agreed to commence installation of foundations for the three buildings in Sand Creek Business Park within 180 days from the date of the proposed Reimbursement Agreement. 

Agency staff conducted an analysis to determine if $1,500,000 of Agency participation is reasonable and cost beneficial based on the potential tax increment and other economic benefits that are most likely to result from the project. The primary economic benefits analyzed included:
· Property Tax Increment
· Transient Occupancy Tax
· Sales Tax
· Job Creation

and were based on the following existing and future entitlements: 
· Sand Creek Business Center (nine commercial/office buildings of 139,680 sq. ft.)
· Gregory Town Homes (120 multi-family residential units)
· Self Storage Facility
· 60-room Hotel
· Sit-down restaurant
· Fast-food restaurant
· Two commercial buildings on Sand Creek Road of 5,000 sq. ft. each
· Gregory Ranch Business Center (flex/tech space of 125,000 sq. ft.)

Attached is the SPA B Redevelopment Analysis prepared by McGill Martin Self, which reflects a tax increment revenue stream using substantial build out in 2006, extending the revenue for twenty years (the typical term for debt financing), and applying an extremely conservative 2% annual increase of property taxes (per Proposition 13). In many cases, redevelopment practitioners use a 4% annual increase to account for typical real estate sales transactions, new construction and new improvements on existing structures. Both the 2% and 4% spreadsheets are attached.

The 2% and 4% financial analyses of these projects resulted in a projected tax increment revenue stream between the Years 2006 and 2027 of:
2% increase 4% increase
Non-Housing Tax Increment (in net present value) $1,840,166 $1,657,811
Housing Tax Increment (in net present value) 1,272,411 2,345,241
Total Tax Increment (in net present value) $3,112,577 $4,003,052

To accurately project non-housing property tax increment revenues to the Agency, it is necessary to reduce that revenue stream by the annual North Brentwood negotiated pass through payments. This required step causes a reduction of the non-housing tax increment revenues of 60% from 2005 to 2017. In Year 2018, when the pass-through amounts increase in accordance with the pass-through agreements, an increased reduction of 67% is applied through Year 2027. These reductions are reflected in the above projected tax increment revenues.

Even assuming a conservative 2% annual increase of property taxes, moderately assuming that no tax increment would flow to the Agency until 2006, and accurately reducing the projected revenues by the future pass-through payments, the payback to the Agency for its $297,670 contribution to this project from Housing Set Aside Funds would be repaid in the year 2008, the third year after project completion. The payback to the Agency for its $1,202,330 contribution from its Tax Allocation Bond (TAB) Proceeds would be repaid in year 2011, the sixth year after substantial project completion. 

Using a more traditional 4% annual increase of property taxes, the Housing Set Aside Fund and the Non-Housing Fund would each recoup their respective contributions a year earlier. 

In each case, the net present value of the projected tax increment revenue from the Gregory Ranch and Sand Creek Business Center projects exceeds the level of participation, indicating a financially feasible project for the Agency to participate at the requested amount of $1,500,000. After the payback period, all tax increment generated from these projects flows to the Agency for use on other projects. This meets the Agency’s objective to invest bond proceeds in projects that will generate increased tax increment.


Participation by the Agency in the Gregory Ranch and Sand Creek Business Center projects complies with the Redevelopment Plan, as well as the 5-Year Implementation Plan, specifically: 

· To provide needed improvements to revitalize the Project Areas.
· To encourage expansion of local commercial and industrial opportunities to achieve the greatest return on its investment and maximize the leveraging of tax increment.
· To improve transportation and enhance circulation within the Project Area.
· To increase the affordable housing stock within the Project Area.

Furthermore, the financial and economic benefits to the City include:
· Annual $130,305 TOT from the hotel, based on 70% occupancy rate at $85/night.
· Annual sales tax generation of approximately $43,000.
· Anticipated 856 direct jobs created by the development.
· Direct annual impact is estimated at $31.7M in payroll, benefits, sales tax revenue and retail expenditures, coupled with additional indirect annual expenditures of $4.8M, for a total of Direct and Indirect Annual Impact from the development on the local economy of $36.4M.


FISCAL IMPACT
As stated above, the total proposed contribution by the Redevelopment Agency to this project is $1,500,000. This contribution is shared with $1,202,330 from the Agency’s 2001 Tax Allocation Bond Proceeds and $297,670 from the Agency’s Housing Set-Aside Fund. In addition, the Tax Allocation Bond Proceeds will be used to fund staff time, and consultant and legal fees associated with this project. 

The Agency’s participation in this project meets the goals and objectives of the Agency’s Redevelopment Plan and its 5-Year Implementation Plan. The participation not only adheres to the reasons the Agency issued bond proceeds, but also complies with the Agency’s priorities for use of bond proceeds as established in a workshop of February 2001. In addition, the proposed contribution satisfies the policies regulating the use of Housing Set-Aside Funds. This is a model redevelopment project wherein the Agency’s stated programs, policies and investment strategies are fulfilled. As such, this project warrants the Agency’s consideration. 

Attachments: 1. Time Line
2. SPA B Project Participation Analysis
3. Resolution RA-_____
4. Reimbursement Agreement
(includes Regulatory Agreement for Affordability Restrictions)



ATTACHMENT 1
TIME LINE
SAND CREEK BUSINESS CENTER
BRENTWOOD SELF-STORAGE
GREGORY RANCH

March 12, 2002

SAND CREEK BUSINESS CENTER
Started Completed

· Design Review (99-16)Rezone (RZ 99-1)Planned District (PD 40) 

o Submitted Applications 6/14/99 

o Resubmitted 9/15/99 

o Resubmitted 4/20/00 

o Planning Commission Action 6/6/00

o City Council Approval 8/22/00

o Received Final Conditions for Design Review from Staff 6/22/00

o Received Design Review Extension to 4/1/02 from Staff 12/3/01

· Minor Subdivision (MS-352-00 

o Submitted 12/14/00 

o Planning Commission Approval 3/6/01

o Waiting for Resolution of CC&Rs and ECCID Line Prior to Recording Open

· Lot Line Adjustment (LLA 01-06 with City of Brentwood(Gift of Property to City) 

o Application Submitted 5/9/01 

o Lot Line Adjustment Recorded 12/17/01



· ECCID Line Relocation and Quitclaims 

o First Contact with 6 Ownership Groups Necessary to Sign 7/9/99 

o Waiting for last group (Volpone/Roche) to sign Open

· Third Amendment to CC&Rs of Brentwood Center 

o First meeting with Owner needing to sign 11/30/00 

o Recordation Anticipated 3/14/02

GREGORY RANCH 

· PD 42 

o Submitted PD 42 Standards 11/7/00 

o Planning Commission Action 5/15/01

o City Council Action 10/23/01

· MS 352-01 

o Submitted Application 3/8/01 

o Planning Commission Action 11/6/01

o Final Subdivision Map for MS 352-01 submitted 1/14/02 

o All processing stopped by City on MS 352-01 and LLA 01-12 pending Gregory Land Swap 1/26/02 

· Self-storage 

o Submitted application for CUP 01-03 1/19/01 

o Planning Commission Action on CUP 01-03 5/15/01

o Application submitted for LLA 01-12 9/13/01 

o Application submitted for MS 359-01 10/18/01 



o All processing stopped by City on MS 359-01 and LLA 01-12 pending Gregory Land Swap 1/26/02 

· Microtel/Denny’s 

o Denny=s Design Review (DR 01-06) submitted 2/20/01 

o Microtel Design Review (DR 01-10) submitted 2/20/01 

o CUP 01-20 submitted 2/20/01 

o CUP 01-21 submitted 2/20/01 

o DR 01-06, DR 01-10 and CUP 01-20, CUP 01-21 
Planning Commission Action 9/18/01

· Gregory Ranch Townhomes 

o Design Review (DR 01-19) Submitted 4/6/01 

o Resubmitted 5/8/01 

o Resubmitted 9/5/01 

o Tentative Map (TSM 8551) Submitted 5/8/01 

o City Traffic Study Begun 6/4/01 

o City Traffic Study Completed 1/25/02

o All processing stopped by City on TSM 8551 pending Gregory Land Swap 1/26/02 



RESOLUTION NO. RA 


RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD APPROVING A REIMBURSEMENT AGREEMENT AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD, THE CITY OF BRENTWOOD AND CL LAND INVESTMENTS, LP.


WHEREAS, the City Council of the City of Brentwood ("City") approved and adopted the Redevelopment Plan for the North Brentwood Redevelopment Project ("Project") on July 9, 1991, by Ordinance No. 496, as amended; and

WHEREAS, the Redevelopment Agency of the City of Brentwood ("Agency") is carrying out the Redevelopment Plan and in connection therewith adopted an Implementation Plan for the Project on March 28, 2000, by Resolution No. RA15 in accordance with Health and Safety Code Section 33490; and

WHEREAS, the Agency has prepared a Reimbursement Agreement among the City, the Agency and CL Land Investments, LP, a California limited partnership ("Developer"), pursuant to which the Agency proposes to reimburse the Developer for a portion of the cost of designing, constructing and installing certain public improvements ("Public Improvements") within the Project upon acceptance by and dedication to the City, all as set forth in the Reimbursement Agreement.

NOW, THEREFORE, be it resolved by the Redevelopment Agency of the City of Brentwood as follows:

1. The Agency hereby finds and determines as follows:

a. The Public Improvements will be of benefit to the Project. This finding is based on the fact that the Public Improvements will be located within the Project area and will improve traffic circulation within the Project. 

b. There is no other reasonable means of financing the Public Improvements. This finding is based on the lack of sufficient funds in the capital improvement budget of the City to fund the Public Improvements together with other urgently needed public improvements and facilities and the infeasibility of financing the Public Improvements through an assessment district, community facilities district or other conventional method of financing public facilities. 

c. The payment of funds for the Public Improvements will assist in the elimination of one or more blighting conditions inside the Project and provide housing for moderate income persons and is consistent with the Implementation Plan. This finding is based on the following facts:

(1) Reimbursement for the Public Improvements is conditioned on the development of housing affordable to persons of moderate income; 

(2) Reimbursement for the Public Improvements is conditioned upon the development of underutilized property by the Developer and the provision of necessary public facilities; and 

(3) The Implementation Plan identifies as objectives for the five-year period from Fiscal Year 1999-2000 through Fiscal Year 2003-2004 the following:

Provide needed public improvements: revitalize the redevelopment project areas through installation of public improvements, including streets, curbs, gutters, sidewalks, utility undergrounding, landscaping, sewer, water and storm drain systems, and bring area infrastructure into compliance with all Federal and State laws.

Improve transportation and parking facilities: enhance circulation within the Project Areas to reduce congestion and accommodate long term growth and development patterns.

2. The Agency hereby approves the Reimbursement Agreement in the form attached hereto as Exhibit A, together with such minor technical and clarifying revisions as shall be approved by the Executive Director and Agency Counsel. The Agency hereby authorizes the Executive Director to execute the Reimbursement Agreement on behalf of the Agency and to take all further actions reasonably necessary to carry out the provisions of the Reimbursement Agreement. The Agency hereby authorizes the Agency Treasurer to reserve a portion of the Agency’s 2001 Tax Allocation Bond Proceeds to fund the Reimbursement Agreement, staff time, and consultant and legal fees.

PASSED, ADOPTED AND APPROVED by the Redevelopment Agency of the City of Brentwood at its regular meeting on the 26th of March 2002 by the following vote:





EXHIBIT A


REIMBURSEMENT AGREEMENT
(including Regulatory Agreement)



REIMBURSEMENT AGREEMENT




1. PARTIES AND DATE

This Agreement is made this day of , 2002, by and among the REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD, CALIFORNIA, a public body, corporate and politic, organized and operating under the Community Redevelopment Law of the State of California (Health & Safety Code Section 33000 et seq.) (the "Agency"), the CITY OF BRENTWOOD, a municipal corporation ("City"), and CL LAND INVESTMENTS, L.P., a California limited partnership (the "Developer").


2. RECITALS

2.01. The Agency is carrying out the Redevelopment Plan for the North Brentwood Redevelopment Project ("Project") approved and adopted by the City on July 9, 1991, by Ordinance No. 496, as amended. The Redevelopment Plan is incorporated herein by reference and made a part hereof as though fully set forth herein.

2.02. Pursuant to Health & Safety Code Section 33490, on March 28, 2000, by Resolution No. RA15, the Agency adopted an Implementation Plan for the Project which identified the following goals and objectives for the five (5) year period from fiscal year 1999-2000 through 2003-2004:

2. To encourage expansion of local commercial and industrial opportunities which will allow the Agency the greatest return on its investment and maximize the leveraging of tax increment.

* * *

8. Improve transportation and parking facilities: enhance circulation within the Project Area to reduce congestion and accommodate long-term growth and development patterns.

2.03. The Developer owns, controls or has a beneficial interest in approximately forty (40) acres of real property within the Project (the "Developer’s Property") described in Exhibit "A" attached hereto.

2.04. As a condition to the development of Developer’s Property, the City will require Developer to design, construct and install certain offsite public improvements, described in Exhibit "B" attached hereto (the "Public Improvements").

2.05. Developer is willing to advance the costs of designing, bonding, financing, constructing, installing and inspecting the Public Improvements subject to reimbursement of a portion of the costs by the Agency as set forth in this Agreement.

2.06. The Agency is authorized to provide for the installation and construction of streets, utilities and other public improvements necessary for carrying out the Redevelopment Plan (Health & Safety Code Section 33421) and in connection therewith, may pay all or part of the cost of installation and construction of any facility or other improvement which is publicly owned either within or without the project area (Health & Safety Code Section 33445).


3. TERMS

3.01. Design and Construction of Public Improvements. Developer shall design, finance, construct, install and provide for the inspection and bonding of all of the Public Improvements in a single phase. City shall approve the plans and specifications for the work prior to construction and installation of the Public Improvements.

3.02. Reimbursement. The Agency shall reimburse the Developer for a portion of the cost of constructing and installing the Public Improvements in the amount of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) (the "Reimbursement"). The total estimated cost of the Public Improvements is THREE MILLION THREE HUNDRED THOUSAND DOLLARS ($3,300,000). The City shall have no liability for payment of the Reimbursement. 

3.03. Conditions of Reimbursement. The Agency shall pay the Developer the Reimbursement within the time set forth herein upon satisfaction of each of the following conditions:

A. Satisfactory completion of all of the Public Improvements as evidenced by: (i) a certificate of the City Engineer stating that the Public Improvements have been inspected and found to be constructed in substantial compliance with the approved plans and specifications; (ii) Developer's irrevocable offer of dedication of the Public Improvements to the City; and (iii) City's receipt of a maintenance bond from the Developer for the Public Improvements in accordance with the requirements of Section 3.12.

B. Recordation of a final subdivision map for the residential development on the portion of the Developer’s Property described as Parcel CL1 on Exhibit "A".

C. Issuance by the City of building permits for construction of at least three (3) industrial and/or commercial buildings, for a total of approximately forty thousand (40,000) square feet, on the portion of the Developer’s Property described as Parcel SC1 on Exhibit "A," and commence construction of the three (3) permitted buildings, construction defined as poured foundations.

D. Delivery by the Developer to the Agency of the executed and acknowledged Regulatory Agreement in the form attached hereto as Exhibit "C".

When each of the foregoing conditions has been satisfied, the Developer shall submit to the Agency a written request for payment of the Reimbursement together with documentary evidence that each condition has been satisfied. Within ten (10) business days of receipt of such written request, the Agency shall either pay the Reimbursement to the Developer or respond in writing, describing which of the conditions has not been satisfied. When the conditions have been satisfied, the Agency shall pay the Developer the Reimbursement.

3.04. Term of Reimbursement Obligation. The Agency’s obligation to pay the Reimbursement to Developer shall expire upon the first to occur of: (a) two (2) years from the date of recordation of the final subdivision map for the residential development on Parcel CL1, unless extended by a Force Majeure Event, as described in Section 3.27, or (b) five (5) years from the date of this Agreement.

3.05. Inspection. The City shall have the right at all times to inspect the construction of the Public Improvements to monitor compliance with City plans and specifications.

3.06. Indemnity and Insurance

A. Developer shall defend, indemnify and hold the Agency and the City and each of their respective elected officials, officers, employees, and agents free and harmless from any and all liability from loss, damage, or injury to or death of persons or property in any manner arising out of or incident to the design, installation and/or construction of the Public Improvements and Developer’s performance of this Agreement, including without limitation all damages, attorney’s fees and court costs, whether or not resulting from the negligence of Developer or Developer’s agents. This indemnity shall extend to any claims arising because Developer has failed to properly secure any necessary easements, land rights, contracts, or approvals, but shall not extend to any claims arising out of the sole negligence of the Agency or the City. This indemnity shall also extend to any legal action commenced by any third party against the Agency or the City challenging the terms of this Agreement or seeking judicial review.

B. Developer shall require its general contractor for the Public Improvements to obtain and maintain insurance of the types and in the amounts described below in a form and with carriers satisfactory to City.

(1) Commercial General Liability Insurance. Occurrence version commercial general liability insurance or equivalent form with a limit of not less than ONE MILLION DOLLARS ($1,000,000) (or as otherwise approved, in writing, by the City) each occurrence shall be maintained. If such insurance contains a general aggregate limit, it shall apply separately to this agreement or be no less than five (5) times the occurrence limit. Such insurance shall:

(a) Name the Agency and the City, its officials, officers, employees and agents as additional insureds, by endorsements, with respect to performance of the Public Improvements. The coverage shall contain no special limitations on the scope of its protection afforded to the above-listed insured.

(b) Be primary with respect to any insurance or self-insurance programs covering the Agency or the City, its officials, officers, employees and agents.

(c) Contain standard separation of insured provisions.

(2) Business Automobile Liability Insurance. Business automobile liability insurance or equivalent form with a limit of not less than ONE MILLION DOLLARS ($1,000,000) each accident shall be maintained. Such insurance shall include coverage for owned, hired and non-owned automobiles and shall contain the provisions set forth in subsections B.(1)(a), (b) and (c) set forth directly above.

(3) Worker’s Compensation Insurance. Worker’s compensation insurance with statutory limits and employer’s liability insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000) each accident shall be maintained.

(4) Other Insurance Requirements. Developer shall:

(a) Prior to commencing construction of the Public Improvements, furnish City with properly executed certificates of insurance which shall clearly evidence all insurance required in this section and provide that such insurance shall not be canceled, allowed to expire or be materially reduced in coverage except on thirty (30) days prior written notice to City.

(b) Provide to City certified copies of endorsements and policies if requested by City, and properly executed certificates of insurance evidencing the insurance required herein.

(c) Replace or require the replacement of certificates, policies and endorsements for any insurance required herein expiring prior to the time when: (i) the City Engineer has issued a certificate stating that the Public Improvements have been inspected and found to be constructed in substantial compliance with the approved plans and specifications; and (ii) the Public Improvements have been opened to traffic by the general public. 

(d) Maintain all insurance required herein from the time of commencement of construction of the Public Improvements until the time when: (i) the City Engineer has issued a certificate stating that the Public Improvements have been inspected and found to be constructed in substantial compliance with the approved plans and specifications; and (ii) the Public Improvements have been opened to traffic by the general public.

(e) Place all insurance required herein with insurers licensed to do business in California.

3.07. Commencement of Construction and Inspection. Developer and its contractor or subcontractors shall not commence construction of the Public Improvements until Developer has delivered to the City properly executed certificates of insurance evidencing the insurance required by Section 3.06. Commencement of construction of the Public Improvements (defined as having a signed contract with and mobilization of contractor) shall begin within ninety (90) days of recordation of the final subdivision map for the residential development on Parcel CL1. All work performed on the Public Improvements shall be done in substantial compliance with City approved plans and specifications and in a good and workmanlike manner. All work performed by Developer, its contractor or agents to construct the Public Improvements shall be subject to inspection by City, and Developer shall require its employees, contractors and agents to comply with all instructions given by City during construction. All fees and costs to construct the Public Improvements shall be borne solely by Developer, subject to reimbursement as provided herein. Inspection by City or its employees or agents shall not relieve Developer of its liability for design defects or improper or inadequate workmanship.

3.08. Compliance with Applicable Laws. All work performed on the Public Improvements shall be performed in a manner which complies with all applicable federal, state, county and local government laws, regulations and rules, including all rules and regulations of City, as these rules and regulations may be modified or changed from time to time.

3.09. Contractor Licenses. All work performed on the Public Improvements shall be done only by contractors licensed in the State of California and qualified to perform the type of work required and comply with the City’s Business License Ordinance.

3.10. Acceptance of Work. Upon completion of the Public Improvements to the reasonable satisfaction of the City Engineer, the City Engineer shall certify to the City and the Agency that the Public Improvements have been inspected and found to be constructed in substantial compliance with the approved plans and specifications as provided in Section 3.3.A(i), above. The Public Improvements shall then be promptly presented to the City Council for dedication and acceptance and for authorization to file a Notice of Completion. The City Council shall accept the Public Improvements if it determines that the Public Improvements were constructed in accordance with the approved plans and specifications, that they operate satisfactorily, and that all other requirements of this Agreement that are applicable to the construction of the Public Improvements have been satisfied. Immediately upon, and as a condition of the expiration of the guarantee period set forth in Section 3.12, Developer shall assign to City all of Developer’s rights and remedies, including warranties, as set forth in the contract documents, and thereafter City shall have the same recourse under said contract documents that City would have had if City itself had engaged Developer’s contractor to construct the Public Improvements.

3.11. Liability for Work Prior to Formal Acceptance. Until the Agency has paid the Reimbursement and the City has authorized opening the Public Improvements to traffic, Developer shall be solely responsible for all damage to the work, regardless of cause, and for all damages or injuries to any person or property at the work site, except damage or injury due to the sole negligence of the Agency of the City, their agents or employees.

3.12. Guarantee. Developer shall guarantee all work and materials for the Public Improvements to be free from all defects due to faulty materials or workmanship for a period of one (1) year after the date of formal acceptance of the work by City but not more than thirteen(13) months following the date of the City Engineer's certificate described in Section 3.10, above. A maintenance bond in the amount of ten percent (10%) of the total cost of the Public Improvements as reasonably estimated by the City, and in form and from a surety satisfactory to the City in its reasonably exercised discretion, shall be posted with the City prior to payment of the Reimbursement. Developer shall repair or remove and replace any and all such work, together with any other work which may be displaced in so doing, that is found to be defective in workmanship or materials within the one (1) year period, without any expense whatsoever to City. In the event Developer fails to comply with the above-mentioned provisions within thirty (30) days after being notified in writing (or in cases of emergency, immediately) City shall be authorized to proceed to have the defects remedied and made good at the sole cost and expense of Developer, who is hereby contractually bound to pay the costs and charges therefore immediately upon demand. Such action by City will not relieve Developer of the guarantee required by this section. This section shall not, in any way, limit the liability of Developer or any other party for any design or construction defects in the work subsequently discovered by City.

3.13. Record Drawings. Prior to acceptance of the Public Improvements by the City, Developer shall provide City with one mylar copy of record drawings with certification by a licensed engineer in the State of California as to accuracy and completeness. Developer shall be solely responsible and liable for ensuring the completeness and accuracy of the record drawings.

3.14. Ownership of the Improvements. From and after acceptance of the improvements by formal action of the City Council, ownership of the Public Improvements shall be vested exclusively in City.

3.15. Notice. Any notices required or desired to be sent pursuant to this Agreement shall be deemed to have been received: (a) when personally delivered, if by hand delivery or by a recognized overnight courier (such as UPS, DHL or Fed-Ex); or (b) if sent by certified mail, return receipt requested, then one week following deposit of the same in any United States Post Office, postage prepaid and addressed as follows, or to such other addresses as the parties shall from time to time designate in writing:

City/Agency: City Manager/Executive Director
City of Brentwood
150 City Park Way
Brentwood, CA 94513


Developer: CL Land Investments, L.P.
c/o CL Land Corporation
Attn.: Arthur L. Lorenzini
46752 Mission, Suite E
Fremont, CA 94539

3.16. Attorney’s Fees. In the event any action is commenced to enforce or interpret any term or condition of this Agreement, in addition to costs and any other relief, the prevailing party shall be entitled to reasonable attorney’s fees. Jurisdiction shall be maintained in Contra Costa County.

3.17. Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the matters contained herein.

3.18. Assignment.

A. Except as specifically provided herein, this Agreement shall not be assigned by the Developer without the prior written consent of the Agency, which consent shall not be unreasonably withheld or delayed, and any assignment without such written consent shall be void and ineffective.

B. This restriction shall not apply to any assignment or other transfer of the Developer's interest in this Agreement to any trust, partnership, corporation, limited liability company or other entity that is managed and controlled by Arthur L. Lorenzini, Jr. and/or Michael W. Conley, whether individually or through any trust, partnership, corporation, limited liability company or other entity. This restriction shall not be deemed to limit or restrict the making of dedications or the granting of easements or permits to facilitate the development of the Developer’s Property, or to prohibit, limit or restrict the leasing or rental of all or any of the improvements on the Developer’s Property for any use permitted under the applicable zoning and land use approvals. This restriction on assignment shall also not be deemed to prohibit, limit or restrict the assignment or granting of any security interests in this Agreement or in the Developer’s Property for the purpose of securing loans or funds to be used for financing the construction of improvements on the Developer’s Property, or the exercise by any lenders of their rights and remedies, including, without limitation, foreclosure, under the agreements and instruments evidencing or securing any such financing.

C. Any proposed assignee of the Developer pursuant to an assignment as to which the Agency's approval is required shall have the qualifications and financial responsibility necessary and adequate, as may reasonably be determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Developer. Any such proposed assignee, by instrument in writing satisfactory to the Agency, for itself and its successors and assigns, and for the benefit of the Agency, shall expressly assume all of the applicable outstanding obligations of the Developer under this Agreement and agree to be subject to all conditions and restrictions to which the Developer is subject with respect to the interest acquired. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such assignment so that the Agency may confirm compliance with these requirements. The Agency’s approval of the proposed assignment shall be given to the Developer in writing, shall not be unreasonably withheld or delayed and shall be deemed given if no written notice of disapproval is received by the Developer within ten (10) business days after request for the approval is made.


D. This Agreement may not be assigned by the Agency , except to the City and then only upon the City's express agreement in writing for the benefit of the Developer to assume the Agency's obligation to pay the Reimbursement as required hereunder. 

3.19. Time of Essence. Time is of the essence for this Agreement.

3.20. Use of the Developer’s Property. The Developer agrees to devote the Developer’s Property to the uses specified in the Redevelopment Plan and to comply with all other provisions and conditions of the Redevelopment Plan for the period of time this Agreement is in force and effect.

3.21. Nondiscrimination

A. The Developer agrees that during the period of time this Agreement is in force and effect, there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Developer’s Property, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Developer’s Property.

B. During the period this Agreement is in force and effect, Developer shall refrain from restricting the rental, sale or lease of the Developer’s Property on the basis of race, color, creed, religion, sex, marital status, ancestry or national origin of any person. All deeds, leases or contracts executed during such period shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:

(1) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land."

(2) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:

"That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased."

(3) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the land."

3.22. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder this Agreement shall be given effect to the fullest extent reasonably possible.

3.23. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Agreement thereafter.

3.24. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

3.25. Amendments. Amendments to this Agreement shall be made only by written instrument executed by each of the parties hereto.

3.26. No Agency. Neither Developer nor any of Developer’s agents, engineers, contractors or subcontractors are or shall be considered to be agents of the Agency or the City in connection with the performance of any of Developer’s obligations under this Agreement.

3.27. Enforced Delay: Extension of Times of Performance. In addition to the specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in default, and the time for performance shall be equitable extended, where delays or defaults are due to war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts of another party; acts or the failure to act of any public or governmental agency or entity (except that acts or the failure to act of the City or the Agency shall not excuse performance by the City or the Agency); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform ("Force Majeure Event"). An extension of time for any such cause shall only be for the period of the enforced delay, which period shall commence to run from the time of the commencement of the cause. If, however, notice by the party claiming such extension is sent to the other parties more than thirty (30) days after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the giving of such notice. Times of performance under this Agreement may also be extended in writing by the Agency and the Developer.

3.28. Termination. The Agency may terminate this Agreement upon written notice to the Developer if the Developer fails to: (a) commence site construction (defined as commencement of grading) within ninety (90) days after the date of this Agreement, and (b) pour foundations for at least three (3) industrial or commercial buildings on the portion of the Developer's Property described as Parcel SC1 on Exhibit A, having a combined total square footage of approximately forty thousand (40,000) square feet, within one hundred eighty (180) days after the date of this Agreement. 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective representatives thereunto duly authorized. The date of this Agreement shall be the date it has been executed by all of the parties hereto. 

, 2002 REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOODBy: Executive Director"AGENCY"
, 2002 CITY OF BRENTWOODBy: City Manager"CITY"
, 2002 CL LAND INVESTMENTS, L.P., a California limited partnershipBy: General Partner "DEVELOPER"



EXHIBIT "A"


"DEVELOPER’S PROPERTY"




(scanned)



EXHIBIT "B"


PUBLIC IMPROVEMENTS




"Public Improvements" shall include the design, construction and installation of the following in accordance with City approved plans and specifications:

A. Widening of Sand Creek Road as indicated more-or-less in the areas marked "Parcel SC1 Frontage," "Parcel SC2 Frontage" and "Parcel CL1 Frontage" on Exhibit "A", including, without limitation, grading, storm drain, water, sewer, paving and concrete, street lights, street name signs, traffic signals and landscaped striping and median.

B. Installation and construction of a new "A" Street in the general area marked "A" Street on Exhibit "A" from Brentwood Boulevard to Sand Creek Road, including, without limitation, grading, storm drain, water, sewer, paving and concrete, street lights, street name signs, traffic signals and landscaped striping and median.




EXHIBIT C



RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:

Redevelopment Agency of the
City of Brentwood
150 City Park Way
Brentwood, California 94513

Attn.: Executive Director




REGULATORY AGREEMENT


For valuable consideration, the receipt of which is hereby acknowledged, CL LAND INVESTMENTS, L.P., a California limited partnership (“Developer”), and THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD (“Agency”) agree as follows, with reference to the following facts:

RECITALS

A. Developer owns that certain real property legally described on Exhibit A (collectively, the “Residential Parcel”). 

B. Agency is acting to carry out its obligations under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.) by establishing an affordable housing program for the City of Brentwood and has entered into that certain Reimbursement Agreement dated , 2002 between the Developer and the Agency with respect to the construction of certain improvements benefiting the Residential Parcel and an adjacent Commercial Parcel. 

C. Developer proposes to construct on the Residential Parcel a multi-family residential development (the “Development”) consisting of approximately 120 attached residential units on separate legal lots (each lot, together with all improvements thereon and membership and other rights appurtenant thereto, being referred to singly as a “Unit” and collectively as the “Units”) which Units may be offered for rent or for sale from time to time. 

D. Developer and Agency agree that the Residential Parcel shall be subject to the conditions and restrictions, and the rights of Agency as specified below.

NOW, THEREFORE, Developer and Agency agree as follows:

ARTICLE 1
OPERATION AND USE AS RENTAL PROJECT

1.1 Use of the Residential Parcel. Developer hereby covenants and agrees with respect to the Residential Parcel, that during term of this Agreement, unless and until Developer elects to sell Units in the Development as contemplated by Article 2 below, Developer shall use the Residential Parcel in compliance with all of the following:

a. Development. Developer shall develop on the Residential Parcel a residential development project which shall consist of approximately one-hundred and twenty (120) Units which may be offered for rent or sale in Developer’s sole discretion, subject to Developer’s compliance with the terms of this Agreement. As described below in paragraph 1.1.b, during such period as the Development may be operated as a rental project (the “Rental Project”), rental of a portion of the Units shall be restricted to households of moderate income (as defined below, the “Restricted Units”). There shall be no physical concentration of the Restricted Units. The Restricted Units shall be dispersed throughout the Rental Project. The Restricted Units shall not be identifiable from the exterior or the interior, and shall be interchangeable between the market rate Units from time to time at the discretion of Developer. Comparable market rate units and Restricted Units shall, at the time of initial construction, be identical in quality, design and materials. 

b. Rent and Income Restrictions.

(1) Fifteen percent (15%) of the Units developed by the Developer on the Residential Parcel shall be rent﷓restricted (“Restricted Units”) and occupied by Moderate Income Households (as defined in Section 1.5.A below) as set forth herein. If there is a total of 120 Units developed on the Residential Parcel, there shall be 18 Restricted Units. If taking 15% of the total number of Units developed on the Residential Parcel results in a product that is not a whole number, the number of Restricted Units shall be determined by rounding in accordance with the following: (i) if the product of 0.15 times the total number of Units developed results in a decimal that is equal to or less than .50 (e.g., (110 x 0.15 = 16.50)), the product shall be rounded down to the next whole number (so in this example, there would be 16 Restricted Units); and (ii) if the product of 0.15 times the total number of Units developed results in a decimal that is greater than .50 (e.g., (111 x 0.15 = 16.65)), the product shall be rounded up to the next whole number (so in this example, there would be 17 Restricted Units). Rent shall be no greater than that considered as “affordable rent” for Moderate Income Households pursuant to Section 50053 of the California Health and Safety Code, as amended, or any successor statute thereto (as defined in Section 1.5.C below, the “Maximum Restricted Unit Rent”); provided, however, that notwithstanding anything in the foregoing (or elsewhere in this Agreement) to the contrary: (a) Developer shall not be required to adjust its rents more frequently than once a year, effective July 1 or such other date as Developer may select; (b) the Maximum Restricted Unit Rent for a 2 bedroom Unit shall be established using the assumption that the Moderate Income Household occupying the Unit is comprised of at least three persons, even if a smaller number of persons actually is occupying the Unit; and (c) the Maximum Restricted Unit Rent for a 3 bedroom Unit shall be established using the assumption that the Moderate Income Household occupying the Unit is comprised of at least four persons, even if a smaller number of persons actually is occupying the Unit. 

(2) The income of all persons residing in the Restricted Unit shall be considered for purposes of calculating the applicable income. No less than one (1) person per bedroom shall be allowed, no more than four (4) persons shall be permitted to occupy a two (2) bedroom Restricted Unit, no more than six (6) persons shall be permitted to occupy a three (3)-bedroom Restricted Unit and the adjustment for household size may be based upon such maximum occupancy assumptions. Affordable rent shall mean the total of monthly payments for a rental payable to Developer under a rental agreement, subject to the requirements and exclusions contained in Title 25, Section 6918 of California Code of Regulations or any successor thereto or amendment thereof. 

(3) Developer shall use reasonable efforts to verify the income levels of all applicants for Restricted Units. This process may include obtaining a copy of each applicant’s most recent income tax return, verifying the applicant’s employment or income source, and conducting a credit search. Developer shall have the right to rely on the authenticity, truth and accuracy of all information and materials provided by or on behalf of an applicant. 

(4) Developer shall use reasonable efforts to recertify the incomes of all tenants of Restricted Units on an annual basis. The annual review will take place in June of each year, commencing the year after the first tenant takes occupancy of a Restricted Unit, and may include obtaining a copy of each such tenant’s most recent income tax return and using reasonable efforts to verify the tenant’s employment or source of income. Developer shall have the right to rely on the authenticity, truth and accuracy of all information and materials provided by or on behalf of a tenant.

(5) If the recertification process determines that a Restricted Unit tenant’s income exceeds 125% of Median Income (as defined in Section 1.5.C below), the tenant shall be given the option either to remain in the Restricted Unit as a market rate tenant, or to relocate within 60 days. If the tenant becomes a market rate tenant upon recertification, Developer shall make the next available Unit of the same size and type a Restricted Unit. 

(6) Half the Restricted Units shall be 2 bedroom Units and the other half shall be 3 bedroom Units. If there is an uneven number of Restricted Units, there may be one more of whichever size Unit Developer may elect from time to time in its sole discretion. 

c. Reporting Requirements. Quarterly rental reports and annual income recertifications for each occupant of an Restricted Unit must be submitted to the Agency. The reports, at a minimum, shall include:

(1) The number of persons per Restricted Unit;
(2) Tenant’s name and Restricted Unit occupied;
(3) Initial occupancy date;
(4) Rent paid per month;
(5) Gross income per year and income category;
(6) Percent of rent paid in relation to income;
(7) Sources of income;
(8) Method of verification of income;
(9) Address prior to moving into the Restricted Unit;
(10) Address of Restricted Unit and Unit type; and
(11) Status of program including any problems experienced during the reporting period. 

Upon request, annual income recertifications shall be accompanied by the copies of the documents used to certify eligibility. Agency may from time to time during the term of this Agreement request reasonable additional or different information and Developer shall promptly supply such information in the reports required hereunder. The Agency, at its discretion, may reasonably designate the form the information shall be supplied to the Agency. 

d. Verification of Citizenship or Qualified Alien Status. The Developer shall use reasonable efforts to verify the citizenship or qualified alien status of all adult tenants and all adult applicants for tenancy as required under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law No. 104-193,8 U.S.C. §1621). Developer may charge a new tenancy applicant (but not an existing tenancy) a reasonable eligibility verification fee. On an annual basis, Developer shall use reasonable efforts to verify the citizenship or qualified alien status of the tenants of Restricted Units at the time of the annual income recertification. Developer shall have the right to rely on the authenticity, truth and accuracy of all information and materials provided by or on behalf of an applicant. 

The Developer shall verify the citizenship or qualified alien status by causing the tenant or applicants for tenancy to complete and sign under penalty of perjury the HCD Benefit Status Form 1 (2/98) or such other form provided by the California Department of Housing and Community Development for this purpose. The signed forms shall be retained by the Developer and shall be disclosed to the Agency upon request. Developer shall have the right to rely on the authenticity, truth and accuracy of all information and materials provided by or on behalf of a tenant or applicant. 

All eligibility evaluations shall be conducted without regard to race, creed, color, gender, religion, age, disability, familial status or national origin of the tenant or applicant for tenancy.

1.2 Occupancy of Restricted Units. Developer shall accept applications for rental of a Restricted Unit on an ongoing basis. When a Restricted Unit is vacated, Developer shall make the Restricted Unit available to an appropriate Moderate Income Household. If a Restricted Unit remains unrented and unoccupied for 30 consecutive days despite Developer’s good faith efforts (which shall include continuous advertising of the availability of the Restricted Unit in a local newspaper approved by the Agency) to locate a Moderate Income Household to lease such Unit, Developer may submit a written request to the Agency requesting to be temporarily relieved of the obligation to reserve the Unit as a Restricted Unit. Agency approval shall not be unreasonably withheld, and shall be deemed given if no written disapproval, stating the grounds in reasonable detail, is given by the Agency within five business days of delivery of the request via facsimile or hand delivery, or within seven business days of deposit of the request in the U.S. Mail. However, if thereafter Developer receives an application for rental of a Restricted Unit from a Moderate Income Household, Developer shall offer the next available Unit to such applicant for the Maximum Restricted Unit Rent. 

1.3 Terms of the Lease/Rental Agreement. Developer may require all applicants for Restricted Units to sign a standard lease or rental agreement. This agreement may commit the applicant to remain in the Restricted Unit for a maximum period of one year. The agreement may be for a fixed term, or on a month﷓to﷓month basis, and may be renewable or not renewable, as Developer and the applicant may agree. Developer may require the first and last months’ rent, a security deposit, and a standard application fee as move﷓in costs from applicants. The security deposit for any Restricted Unit shall not exceed that of a comparable market rate Unit. All tenants of Restricted Units must adhere to Developer’s Rental Project requirements, restrictions, rules, regulations, guidelines and fees. Without limiting the generality of the foregoing in any manner, Developer may prohibit pets.

1.4 Remedies. In the event that Developer is alleged to have charged rent in excess of the Maximum Restricted Unit Rent to a tenant residing in a Restricted Unit, the Agency, as its sole and exclusive remedy in damages (but nothing herein shall limit the Agency’s access to injunctive or declaratory relief), may take the appropriate legal action to recover, and Developer shall be obligated to pay to the tenant or to the Agency in the event that the tenant cannot be located, any excess rents charged. Developer shall not under any circumstances be liable for any other damages, penalties or fines, including without limitation any punitive or consequential damages. 

1.5 Defined Terms. The following terms used in this Agreement shall have the meanings set forth in this Section 1.5: 

A. “Moderate Income Household” shall mean a person or household whose annual gross income does not exceed 120% (which percentage shall be adjusted as provided in Title 25, Section 6932 of California Code of Regulations) of the Median Income (as defined below) and who otherwise meets Developer’s standard criteria for determining eligibility for occupancy. These criteria may include an evaluation of the applicant’s ability to pay rent, credit history, and rental history. These specific standards may vary from time to time, but must be uniformly applied at all times. 

B. “Median Income” is the area﷓wide median gross yearly income in Contra Costa County, adjusted for household size, as established from time to time by the U.S. Department of Housing and Urban Development (“HUD”). In the event that such income determinations are no longer published or are not updated for a period of at least 18 months by HUD, Median Income shall mean the area﷓wide median gross income for households in Contra Costa County, adjusted for family size, as published from time to time by the California Department of Housing and Community Development (“HCD”). In the event that such income determinations are no longer published, or not updated for a period of at least 18 months, the Agency shall provide Developer with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD or HCD. 

C. “Maximum Restricted Unit Rent” is the maximum monthly rent (as periodically set by the Contra Costa County Housing Authority) for a Restricted Unit permitted for a Moderate Income Household, calculated in accordance with the provisions of Health and Safety Code Section 50053 and the Regulations promulgated thereunder, except if and to the extent the Agency is permitted to authorize a higher maximum monthly rent pursuant to Health and Safety Code Section 50053 and the Regulations promulgated thereunder. The Agency shall provide Developer during the first calendar quarter of each year during the term of this Agreement with an updated schedule showing the new Maximum Restricted Unit Rent. 

ARTICLE 2
SALE OF INDIVIDUAL RESTRICTED UNITS

2.1 Defined Terms. The following terms used in this Article 2 shall have the meanings set forth in this Section 2.1: 

A. “Affordable Housing Cost” shall be as defined in Health and Safety Code Section 50052.5 or any successor statute thereto. If the statute is no longer in effect and no successor statute is enacted, the Agency shall establish the Affordable Housing Cost for purposes of this Agreement. For purposes of determining the Affordable Housing Cost: (i) the purchase price for a 2 bedroom Restricted Unit shall be established using the assumption that the Eligible Household purchasing the Unit is comprised of three persons; and (ii) the purchase price for a 3 bedroom Restricted Unit shall be established using the assumption that the Eligible Household purchasing the Unit is comprised of four persons. 

B. “Eligible Households” shall mean and include persons and families meeting the definition of “Moderate Income Households” under Section 1.5.a, above. 

2.2 Affordability Restrictions. If Developer elects in its sole discretion to sell any or all of the Units, Developer shall make a written designation to Agency, pursuant to a recorded Addendum to this Agreement, of those Units that shall be Restricted Units, either for rental or for sale. Developer may change the designation of Restricted Units from time to time by written amendment to the Addendum prior to the sale thereof upon written notice to the Agency. At all times the total number of Restricted Units that are either rental Units or are being offered for sale or have been sold in accordance with this Article 2 shall be as required by Section 1.1.b above. The Restricted Units, if offered for sale by Developer, shall be subject to the following restrictions and requirements: 

A. Affordability Requirements and Restrictions. 

1. During the Term of this Agreement, the Restricted Units shall only be sold to Eligible Households, and only at an amount that does not exceed the Affordable Housing Cost (unless sold to the Agency pursuant to Section 2.2.B. hereof), and during such period the other requirements of this Article 2 shall apply. 

2. At least 20 business days prior to any proposed sale or other transfer of any of the Restricted Units during the Term of this Agreement, Developer shall submit to the Agency a copy of the written agreement of purchase and sale, together with the prospective purchaser’s/transferee’s income certification and a list of all assets owned by the prospective purchaser/transferee or other financial information in a form reasonably approved by the Agency along with the income certification to be provided to any lender making a loan on the Restricted Unit. The Agency may require documentation reasonably evidencing and supporting the income and other financial information contained in the certifications. Within fifteen (15) business days from receipt of the income certifications, Agency shall render a decision of eligibility or noneligibility. If the prospective purchaser/transferee qualifies as an Eligible Household and the purchase price of the Restricted Unit is within the definition of Affordable Housing Cost, the Agency shall so certify in writing within such fifteen (15) business days, and upon request shall execute a certificate, in recordable form, confirming that the proposed transaction complies with the requirements of this Article 2. If the prospective purchaser/transferee does not qualify as an Eligible Household or the purchase price of the Restricted Unit is not within the definition of Affordable Housing Cost, the Agency shall so notify the Developer in writing, within such fifteen (15) business days, stating the basis for its determination in reasonable detail. 

3. EXCEPT AS EXPRESSLY PROVIDED IN SECTION SECTION 2.2.B BELOW, THERE SHALL BE NO SALE OR OTHER TRANSFER OF THE RESTRICTED UNIT WITHOUT THE WRITTEN CERTIFICATION BY THE AGENCY THAT THE PURCHASER / TRANSFEREE IS AN ELIGIBLE HOUSEHOLD AND THE PURCHASE PRICE OF THE RESTRICTED UNIT IS WITHIN THE DEFINITION OF AFFORDABLE HOUSING COST. ANY SALE OR OTHER TRANSFER OF THE RESTRICTED UNIT IN VIOLATION OF THIS AGREEMENT SHALL BE VOID. 

4. EACH PURCHASER OF A RESTRICTED UNIT FROM DEVELOPER SHALL ENTER INTO AND RECORD AT THE CLOSE OF ESCROW A RESALE RESTRICTION AGREEMENT, IN THE FORM ATTACHED HERETO AS EXHIBIT B, FOR THE BENEFIT OF THE AGENCY. UPON RECORDATION OF THE RESALE RESTRICTION AGREEMENT: (A) THIS AGREEMENT SHALL HAVE NO FURTHER FORCE OR EFFECT AS AN ENCUMBRANCE AGAINST THE RESTRICTED UNIT; AND (B) DEVELOPER SHALL HAVE NO FURTHER OBLIGATIONS OR LIABILITIES WITH RESPECT TO THE RESTRICTED UNIT, INCLUDING WITHOUT LIMITATION ANY RESPONSIBILITY FOR COMPLIANCE BY THE BUYER OR ITS SUCCESSORS WITH THE TERMS AND CONDITIONS OF THE RESALE RESTRICTION AGREEMENT. 

B. Agency’s Option to Purchase. If the Developer cannot in good faith, and despite its best commercially reasonable efforts, locate an Eligible Household to purchase a Restricted Unit at an Affordable Housing Cost, Developer shall have the right, but not the obligation, to give the Agency written notice of such circumstances (the “Agency Option Notice”). In the event Developer gives the Agency an Agency Option Notice, the Agency may purchase the Restricted Unit at a price equal to the lesser of the fair market value of the Restricted Unit (as determined by agreement of the parties or by appraisal in the absence of an agreement) or the Affordable Housing Cost, using the maximum housing cost for an Eligible Household based on the applicable unit size as defined in Health and Safety Code Section 50052.5 and Title 25, California Code of Regulations, Section 6932, or any successor thereto. This option shall be exercised by the Agency, if at all, within sixty (60) days of receipt of the Agency Option Notice. The Agency may designate another governmental entity, nonprofit organization or an Eligible Household to purchase the Restricted Unit. 

C. Escrow. If the Agency exercises its rights under Section 2.2.B above, the closing of the purchase and sale of the Restricted Unit to the Agency or its designee shall be effectuated in accordance with the following provisions: 

1. Close of Escrow. Close of escrow shall occur no later than one hundred twenty (120) days following the receipt by Agency of the Agency Option Notice. If escrow is required to close on a Saturday, Sunday or Holiday, it shall close on the next business day following the Saturday, Sunday or Holiday. 

2. Prorations and Costs. All title insurance premiums, transfer taxes and escrow fees shall be paid according to customary practice in Contra Costa County. 

3. Escrow Instructions. The parties shall execute all escrow instructions which the Escrow Holder reasonably requires within fifteen (15) days after the request thereof. All escrow instructions shall be consistent with the provisions of this Agreement. 

D. Notice of Resale. In order to permit the Agency to enforce its rights under this Agreement, Developer shall provide written notice to the Agency not less than twenty (20) business days in advance of close of escrow on any sale of a Restricted Unit. 

ARTICLE 3
NO DISCRIMINATION; COMPLIANCE WITH
REDEVELOPMENT PLAN

3.1 No Discrimination. Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Residential Parcel, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees or vendees in the Residential Parcel. 

3.2 Nondiscrimination Clauses. All deeds, leases or contracts made relative to the Residential Parcel, the improvements thereon or any part thereof, shall contain or be subject to substantially the following nondiscrimination clauses: 

a. In deeds: The Grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the Grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land.

b. In leases: The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:

That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the leasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees or vendees in the land herein leased.

c. In contracts: There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, transfer, use occupancy, tenure or enjoyment of the land, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees or vendees in the land.

3.3 Compliance with Redevelopment Plan. During the term of this Agreement, the Residential Parcel shall be used in a manner consistent with the Redevelopment Plan; provided, however, that this covenant shall not require compliance with any changes in the Redevelopment Plan that would have a material impact on the occupancy, use, operation or enjoyment of the Residential Parcel unless the changes have been approved in writing by Developer. 

ARTICLE 4
MAINTENANCE AND MANAGEMENT

4.1 Maintenance and Management. Developer agrees to maintain the improvements and landscaping on the Residential Parcel in a clean and orderly condition and in good condition and repair and keep the Residential Parcel free from accumulation of debris and waste materials. Any property management agreement shall name the Agency as a third party beneficiary, giving the Agency the right to enforce the property management agreement. The form of the property management agreement shall be subject to the prior written consent of the Agency, which shall not be unreasonably withheld and shall be deemed given if a reasonably detailed statement of objection is not delivered within ten (10) business days after the form of agreement is delivered to Agency for review. 

4.2 Agency’s Cure Right. If, at any time, Developer fails to maintain the Residential Parcel, and has either failed to commence to cure such condition or to diligently prosecute to completion the condition or the condition is not corrected after expiration of thirty (30) days from the date of written notice from Agency to Developer (or such longer period as may be reasonably required, so long as Developer has commenced and is diligently prosecuting corrective action), Agency may perform the necessary corrective maintenance, and Developer shall pay such costs as are reasonably incurred for such maintenance within sixty (60) days following Agency’s written demand to Developer for reimbursement of such costs. Developer, on behalf of itself its heirs, successors and assigns, hereby grants to Agency and its officers, employees and agents, an irrevocable license to enter upon the Residential Parcel to perform such maintenance during normal business hours after receipt of written notice from Agency as hereinabove described and Developer’s failure to cure or remedy such failure within the time allotted by this Section 4.2. Any such entry shall be made only after reasonable notice to Developer, and Agency shall indemnify and hold Developer harmless from any claims or liabilities pertaining to any such entry by Agency. 

4.3 Effect of Article 4. This Article 4 shall terminate and be of no further force and effect upon the first to occur of: (a) the outside date set forth in Section 5.2 below; or (b) the closing of the sale by Developer of the ninth Restricted Unit pursuant to Article 2 above. Developer agrees that the entire Residential Parcel, including all of the Units whether rented or sold, shall be subject to a single set of covenants, conditions and restrictions (the “CC&Rs”) that establish a single homeowners’ association for the entire Residential Parcel (the “Association”). The CC&Rs shall require the Association to maintain all of the common area within the Residential Parcel in a clean and orderly condition and in good condition and repair, and to keep the common area within the Residential Parcel free from accumulation of debris and waste materials. 

ARTICLE 5
GENERAL PROVISIONS

5.1 Notices. Notices required to be given to the Agency or to Developer shall be given by hand delivery, recognized overnight courier (such as UPS, DHL or FedEx) or certified mail, return receipt requested, to the following addresses, or to such other address(es) as a party may designate from time to time by written notice to the other: 

To Agency:
Executive Director
Redevelopment Agency of 
The City of Brentwood
City Hall
150 City Park Way
Brentwood, CA 94513

To Developer:
CL Land Investments, L.P.
c/o CL Land Corporation
46752 Mission Blvd., Suite E
Fremont, CA 94539
Attn: Arthur L. Lorenzini, Jr., President

5.2. Duration. The covenants set forth herein shall be covenants running with the land in accordance with Section 33334.3(f) and 33413(c) of the Health and Safety Code, or any successor statutes, and shall inure to the benefit of the Agency, the City of Brentwood and their successors and assigns, and subject to any shorter time limitations specifically set forth herein shall be enforceable by the Agency, the City of Brentwood or their successors and assigns, without regard to whether the Agency is or remains an owner of any land or interest to which such covenants relate, for a period of fifty-five (55) years from the date of recording this Agreement (the “Term”). The parties agree that for the Term of this Agreement, all future deeds or transfers of interest shall show or reference the applicable restrictions of this Agreement. 

5.3 Amendment. This Agreement may be amended only in writing by Agency and the owner of the Residential Parcel. 

5.4 No Impairment of Lien. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument; provided, however, that any successor of Developer to the Residential Parcel shall be bound by such covenants, conditions, restrictions, limitations and provisions, whether such successor’s title was acquired by foreclosure, deed in lieu of foreclosure, trustee’s sale or otherwise. 

5.5. Successors and Assigns. 

A. Binding Effect; Covenants Run with Land. The covenants contained in this Agreement shall inure to the benefit of the Agency and its successors and assigns and, subject to Section 5.7 and any other limitations contained herein, shall be binding upon Developer and any successor in interest as owner of fee title to the Residential Parcel, or any part thereof other than a single Unit. Upon the transfer by Developer of all of its interest in the Residential Parcel, such Developer shall automatically be released from and have no further obligations or liabilities under this Agreement, and all references in this Agreement to Developer thereafter shall mean and refer to such successor in interest of a prior Developer as may then be the owner of the Residential Parcel. The covenants shall run in favor of the Agency and its successors and assigns for the entire period during which such covenants shall be in force and effect, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. The Agency, and its successors and assigns, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach. 

B. Transfer by Developer of Residential Parcel. Except as expressly permitted by this Section 5.5.B, Developer shall not sell, transfer, convey, assign or ground lease the Residential Parcel (a “Transfer”) during the period between the date of recordation of this Agreement and the closing date for the sale of the tenth (10th) Restricted Unit to be sold pursuant to Article 2 above without the prior written approval of the Agency. The Agency’s approval shall not be unreasonably withheld or delayed, and shall be deemed given if no reasoned written notice of disapproval is received by Developer within ten (10) business days after request for approval is made. It shall be reasonable for the Agency to withhold its approval if Developer fails to demonstrate to the reasonable satisfaction of the Agency that the proposed transferee possesses the financial resources and experience necessary to operate the Residential Parcel in accordance with the requirements of this Agreement. This restriction shall not apply to any Transfer to any trust, partnership, corporation, limited liability company or other entity that is managed and controlled by Arthur L. Lorenzini, Jr. and/or Michael W. Conley, whether individually or through any trust, partnership, corporation, limited liability company or other entity, and shall not apply to any Transfer after the closing date for the tenth (10th) Restricted Unit sold pursuant to Article 2 above. This restriction on Transfer shall not be deemed to limit or restrict the making of dedications or granting of easements or permits to facilitate the development of the Residential Parcel, or to limit or restrict the rental or sale of any individual Units. This restriction on Transfer shall also not be deemed to prohibit, limit or restrict the assignment or granting of any security interests in the Residential Parcel for the purpose of securing loans or funds to be used for financing the construction of the improvements on the Residential Parcel, or the exercise by any lenders of their rights and remedies, including without limitation foreclosure, under the agreements and instruments evidencing or securing any such financing. 

5.6 No Third Party Beneficiaries. Notwithstanding anything in this Agreement to the contrary, there are no third party beneficiaries of this Agreement except for the City of Brentwood. 

5.7 Effect of Agreement. Notwithstanding anything in this Agreement to the contrary, subject to Developer’s recordation of an Addendum to this Agreement designating the specific Restricted Units, nothing in this Agreement except for Sections 3.1 and 3.2 shall have any force or effect on any buyer of a single Unit or its right, title or interest in or to such Unit, except for the buyers of Restricted Units and provided that nothing herein shall be deemed to limit the obligations of any buyer of a Restricted Unit under any applicable Resale Restriction Agreement. Although the foregoing exemption and release shall be self-executing and require no further instruments or assurances to be effective, at Developer’s or any buyer’s request, the Agency shall provide Developer or such buyer with a quitclaim, release or other instrument, in recordable form, sufficient to cause a title company to insure title to any Unit that is not a designated Restricted Unit free and clear of this Agreement except only for the provisions of Sections 3.1 and 3.2 (and, if applicable, the Resale Restriction Agreement). Upon expiration of the Term, Agency shall provide Developer with a quitclaim, release or other instrument, in recordable form, sufficient to confirm the release the Residential Parcel from the effect of this Agreement except only for the provisions of Sections 3.1 and 3.2. At such time as only the provisions of Sections 3.1 and 3.2 still apply, the Agency and Developer shall enter into a new recordable covenant that restates the provisions of Sections 3.1 and 3.2 and completely removes the effect of this Agreement from title. 

5.8 Default. 

a. Any failure by Developer to perform any term or provision of this Agreement shall constitute an “Event of Default” (1) if Developer does not cure such failure within thirty (30) days following written notice of default from the Agency, or (2) if such failure is not of a nature which can be cured within such thirty (30) day period, if the Developer does not within such thirty (30) day period commence substantial efforts to cure such failure, or thereafter does not within a reasonable time prosecute to completion with diligence and continuity the curing of such failure. The Agency shall not enforce any of its rights and remedies for breach by Developer except upon the occurrence of an Event of Default.

b. Any notice of default given hereunder shall specify in detail the nature of the failure in performance alleged by the Agency and the manner in which such failure of performance may be satisfactorily cured in accordance with the terms and conditions of this Agreement. During the time periods herein specified for cure of a failure to perform, the Developer shall not be considered to be in default of this Agreement for any purposes.

c. Any failure or delay by the Agency in asserting any of its rights or remedies as to any Event of Default shall not operate as a waiver of any Event of Default or of any such rights or remedies or deprive the Agency of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

d. In the event of an Event of Default under this Agreement, Agency shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other remedy proceedings to cure, correct or remedy such Event of Default.

IN WITNESS WHEREOF, the Agency and the Developer have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized.


Dated for reference purposes only as of , 20__.

REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOODBy: Executive DirectorBy: Secretary AGENCY”
APPROVED AS TO FORM: Agency Counsel 
CL LAND INVESTMENTS, L.P. a California limited partnershipBy: Its General partner, CL Land Corporation, a California corporation By: Arthur L. Lorenzini, Jr., President“PARTICIPANT”


EXHIBIT A


Legal Description of Residential Parcel

CL1 of Gregory Parcel

All that real property situated in the City of Brentwood, County of Contra Costa, State of California, described as follows:

A portion of Lot 1, as designated on the Map entitled Map of the Ranch Los Meganos accompanying and forming a part of the Final Report of References in Partition, filed January 9, 1913, in Book 9 of Maps, at Page 202, Contra Costa County Records, further described as follows:

Being further described as a portion of the Land of Gregory as recorded in Book 7241 of Official Records at Page 265 Records of Contra Costa County being more particularly described as follows:

Beginning at the most southwesterly corner of Parcel “C” of M.S. 382-91 filed September 9, 1991, in Book 154 of Parcel Maps, at page 13; thence South 89º 10’06” East 98.06 feet; thence South 18º09’57” East 10.25 feet; thence along a tangent curve concave to the West having a radius of 220.00 feet thru a central angle of 18º59’51” an arc length of 72.95 feet to a point of tangency; thence South 00º49’54” West 462.60 feet to the south line of the Land of Gregory (7241 or 265); thence along said Gregory south line North 89º10’06” West 999.76 feet; thence North 00º49’54” East 228.63 feet to the most southerly line of the Roadway now known as Sand Creek Road as recorded by series number 99-0021790 Contra Costa County Records; thence along said south line of said Sand Creek Road along a non-tangent curve concave to the Northwest having a radial bearing of North 19º14’46” West a radius of 1250.00 feet thru a central angle of 09º40’46” an arc length of 211.17 feet to a point of tangency; thence North 61º04’28” East 423.40 feet; thence South 56º10’06” East 49.03 feet; thence North 86º08’54” East 250.84 feet; thence North 59º06’45” East 42.79 feet to the point of beginning.

Containing an area of 10.02 acres more or less.


EXHIBIT B


Form of Resale Restriction Agreement for Individual Units




RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:

Redevelopment Agency of the
City of Brentwood
101B Sand Creek Road
Brentwood, California 94513

Attn.: Executive Director


RESALE RESTRICTION AGREEMENT

For valuable consideration, the receipt of which is hereby acknowledged, ___________________________ (collectively, “Owner”), and THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD (“Agency”) agree as follows, with reference to the following facts:

RECITALS

A. Owner owns that certain attached residence located at _____________, Brentwood, California _____ and more particularly described in Exhibit A attached. The residence, which includes the real property, the residence and all other improvements thereon, and all membership and other rights appurtenant thereto, is referred to in this Agreement as the “Restricted Unit.” The Restricted Unit is part of a 120-unit multi-family residential community referred to herein as the “Project.” 

B. Agency has acted to carry out its obligations under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.) by establishing an affordable housing program for the City of Brentwood. As part of the affordable housing program, Agency has provided financial support for the development of the Project and procured assurances that the Restricted Unit will be sold, owned and occupied only by members of Eligible Households, and will be sold only for a price that does not exceed the Affordable Housing Cost (as those terms are defined below). 

C. Owner has received the benefit of these assurances in purchasing the Restricted Unit, and is providing the same assurances for the benefit of the Agency and the City of Brentwood by entering into this Agreement. Owner and Agency therefore agree that the Restricted Unit shall be subject to the terms, conditions and restrictions, and the rights of Agency, as specified in this Agreement.

NOW, THEREFORE, in this factual context, for good and valuable consideration, Owner and Agency agree as follows: 

1. During the Term of this Agreement, subject to Section 10 below, the Restricted Unit shall only be sold to an Eligible Household (unless sold to the Agency pursuant to Section 7 hereof), and only for an amount that does not exceed the Affordable Housing Cost. As used in this Agreement: 

a. “Affordable Housing Cost” shall be as defined in Health and Safety Code Section 50052.5 or any successor statute thereto. If the statute is no longer in effect and no successor statute is enacted, the Agency shall establish the Affordable Housing Cost for purposes of this Agreement. For purposes of determining the Affordable Housing Cost: (i) the purchase price for a 2 bedroom Restricted Unit shall be established using the assumption that the Eligible Household purchasing the Unit is comprised of three persons; and (ii) the purchase price for a 3 bedroom Restricted Unit shall be established using the assumption that the Eligible Household purchasing the Unit is comprised of four persons. 

b. “Eligible Household” shall mean and include a person or household whose annual gross income does not exceed 120% (which percentage shall be adjusted as provided in Title 25, Section 6932 of California Code of Regulations) of the Median Income.

c. “Median Income” shall mean the area﷓wide median gross yearly income in Contra Costa County, adjusted for household size, as established from time to time by the U.S. Department of Housing and Urban Development (“HUD”), or, by the California Department of Housing and Community Development (“HCD”) if HUD ceases to establish such income standards. In the event that neither HUD nor HCD are establishing such income standards, the Agency shall provide Owner with income standards which are determined in a manner reasonably similar to the methods of calculation previously used by HUD or HCD.

2. At least 20 business days prior to any proposed sale or other transfer of the Restricted Unit during the Term of this Agreement, Owner shall submit to the Agency a copy of the written agreement of purchase and sale, together with the prospective purchaser’s/transferee’s income certification and a list of all assets owned by the prospective purchaser/transferee or other financial information in a form reasonably approved by the Agency along with the income certification to be provided to any lender making a loan on the Restricted Unit. The Agency may require documentation reasonably evidencing and supporting the income and other financial information contained in the certifications. Within fifteen (15) business days from receipt of the income certifications, Agency shall render a decision of eligibility or noneligibility. If the prospective purchaser/transferee qualifies as an Eligible Household and the purchase price of the Restricted Unit is within the definition of Affordable Housing Cost, the Agency shall so certify in writing within such fifteen (15) business days, and upon request shall execute a certificate, in recordable form, confirming that the proposed transaction complies with the requirements of this Agreement. If the prospective purchaser/transferee does not qualify as an Eligible Household or the purchase price of the Restricted Unit is not within the definition of Affordable Housing Cost, the Agency shall so notify Owner in writing, within such fifteen (15) business days, stating the basis for its determination in reasonable detail. 

3. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 4, SECTION 7 OR SECTION 10 BELOW, THERE SHALL BE NO SALE OR OTHER TRANSFER OF THE RESTRICTED UNIT WITHOUT THE WRITTEN CERTIFICATION BY THE AGENCY THAT THE PURCHASER / TRANSFEREE IS AN ELIGIBLE HOUSEHOLD AND THE PURCHASE PRICE OF THE RESTRICTED UNIT IS WITHIN THE DEFINITION OF AFFORDABLE HOUSING COST. ANY SALE OR OTHER TRANSFER OF THE RESTRICTED UNIT IN VIOLATION OF THIS AGREEMENT SHALL BE VOID. 

4. The following transfers of title to a Restricted Unit or any interest therein are not subject to these affordability restrictions: transfer by gift, devise or inheritance to the spouse, issue or adopted child of the Owner; transfer resulting from death of an Owner when the transfer is to a co-Owner or joint tenant; transfer by an Owner to any person who becomes a co-Owner of the Restricted Unit provided the Owner retains at least a 33% interest in the Restricted Unit and the co-Owner agrees to become a co-Owner by signing a copy of this Agreement and delivering it to the Agency; transfer of title to a spouse resulting from divorce, decree of dissolution or legal separation or from a property settlement agreement incidental to such a decree in which one of the Owners becomes the sole owner; or acquisition of title to the Restricted Unit or interest therein in conjunction with marriage; a transfer between co-Owners or a transfer by Owner into an inter vivos trust in which Owner is a beneficiary and Owner continues to occupy the Restricted Unit. 

5. OWNER SHALL OCCUPY THE RESTRICTED UNIT AS HIS OR HER PRINCIPAL RESIDENCE FOR THE DURATION OF HIS OR HER OWNERSHIP. Upon request by the Agency, the Owner shall submit an affidavit to the Agency certifying that the Restricted Unit is the Owner’s principal residence. If Owner vacates the Restricted Unit, the Agency may exercise its rights under Section 7 below. 

6. THE PURCHASER OF THE RESTRICTED UNIT FROM OWNER SHALL ENTER INTO AND RECORD AT THE CLOSE OF ESCROW A NEW RESALE RESTRICTION AGREEMENT, IN THE SAME FORM AS THIS AGREEMENT, FOR THE BENEFIT OF THE AGENCY. UPON THE CLOSING, AND RECORDATION OF THE NEW RESALE RESTRICTION AGREEMENT, OWNER SHALL HAVE NO FURTHER OBLIGATIONS OR LIABILITIES TO THE AGENCY WITH RESPECT TO THE RESTRICTED UNIT, INCLUDING WITHOUT LIMITATION ANY RESPONSIBILITY FOR COMPLIANCE BY THE BUYER OR ITS SUCCESSORS WITH THE TERMS AND CONDITIONS OF THE NEW RESALE RESTRICTION AGREEMENT. 

7. Agency’s Option to Purchase. If the Owner cannot in good faith, and despite using best commercially reasonable efforts, locate an Eligible Household to purchase the Restricted Unit at an Affordable Housing Cost, the Owner shall have the right, but not the obligation, to give the Agency written notice of such circumstances (the “Agency Option Notice”); provided, however, that the Owner may not sell the Restricted Unit for a market sales price to any buyer pursuant to Section 10 below without first giving the Agency an Agency Option Notice so that the Agency has the opportunity to exercise the option granted by this Section 7. In the event Owner gives the Agency an Agency Option Notice, the Agency may purchase the Restricted Unit at a price equal to the lesser of the fair market value of the Restricted Unit (as determined by agreement of the parties or by appraisal in the absence of an agreement) or the Affordable Housing Cost, using the maximum housing cost for a Moderate Income Household based on the applicable unit size as defined in Health and Safety Code Section 50052.5 and Title 25, California Code of Regulations, Section 6932, or any successor thereto. This option shall be exercised by the Agency within sixty (60) days of receipt of the Agency Option Notice, or the terms of Section 10 below shall apply. The Agency may designate another governmental entity, a nonprofit organization or an Eligible Household to purchase the Restricted Unit. 

8. Escrow. If the Agency exercises its rights under Section 7 above, the closing of the purchase and sale of the Restricted Unit to the Agency or its designee shall be effectuated in accordance with the following provisions: 

a. Close of Escrow. Close of escrow shall occur no later than one hundred twenty (120) days following the receipt by Agency of the Agency Option Notice. If escrow is required to close on a Saturday, Sunday or Holiday, it shall close on the next business day following the Saturday, Sunday or Holiday. 

b. Prorations and Costs. All title insurance premiums, transfer taxes and escrow fees shall be paid according to customary practice in Contra Costa County. 

c. Escrow Instructions. The parties shall execute all escrow instructions which the Escrow Holder reasonably requires within fifteen (15) days after the request thereof. All escrow instructions shall be consistent with the provisions of this Agreement. 

9. Notice of Resale. In order to permit the Agency to enforce its rights under this Agreement, Owner shall provide written notice to the Agency not less than twenty (20) business days in advance of scheduled close of escrow for the sale of the Restricted Unit. 

10. Owner’s Right to Sell Free of Restrictions. In the event the Agency does not exercise the purchase option provided pursuant to Section 7 above within sixty (60) days after receipt of the Agency Option Notice, or the Agency does exercise the option but fails to close the transaction as provided in Section 8 above for any reason other than a default by Owner, Owner shall have the right, for a period of 180 days after the date the Agency’s option expired or the Agency failed to close, as the case may be, to sell the Restricted Unit for a market sales price to any buyer, regardless of income, without any obligation on the part of the buyer to enter into and record a new Rental Restriction Agreement at closing. In the event of such a sale, this Agreement shall have no force or effect as an encumbrance against the Restricted Unit on and after the closing date. If Owner or the buyer requests, the Agency shall provide a recordable quitclaim deed at closing in accordance with Section 14 below. If Owner does not close on the sale of the Restricted Unit within the 180 day-period provided herein, the requirements of this Agreement shall again apply to any proposed sale of the Restricted Unit, including without limitation the Agency option rights. 

11. No Discrimination. Owner covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall the Owner itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees or vendees in the Restricted Unit. 

12. Nondiscrimination Clauses. All deeds, leases or contracts made relative to the Restricted Unit, the improvements thereon or any part thereof, shall contain or be subject to substantially the following nondiscrimination clauses: 

a. In deeds: The Grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the Grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. 

b. In leases: The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:

That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the leasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees or vendees in the land herein leased.

c. In contracts: There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, transfer, use occupancy, tenure or enjoyment of the land, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees or vendees in the land.

13. Notices. Notices required to be given to the Agency or to Owner shall be given by hand delivery, recognized overnight courier (such as UPS, DHL or FedEx) or by certified mail, return receipt requested, to the following addresses, or to such other address(es) as a party may designate from time to time by written notice to the other: 

To Agency:
Executive Director
Redevelopment Agency of 
the City of Brentwood
City Hall
150 City Park Way
Brentwood, CA 94513

To Owner:
______________________
______________________
______________________
______________________

14. Duration. The covenants set forth herein shall be covenants running with the land in accordance with Section 33334.3(f) and 33413(c) of the Health and Safety Code, or any successor statutes, and shall inure to the benefit of the Agency, the City of Brentwood and their successors and assigns, and shall be enforceable by the Agency, the City of Brentwood or their successors and assigns, without regard to whether the Agency is or remains an owner of any land or interest to which such covenants relate, until [_______________, 204__ - insert the date that is 45 years after the date the initial Regulatory Agreement is recorded] (the “Term”). The parties agree that for the Term of this Agreement, all future deeds or transfers of interest shall show or reference the applicable restrictions of this Agreement. Upon expiration of the Term, Agency shall provide Owner with a quitclaim, release or other instrument, in recordable form, sufficient to confirm the release the Restricted Unit from the effect of this Agreement. 

15. Amendment. This Agreement may be amended only in a writing signed by Agency and the Owner. 

16. No Impairment of Lien. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument; provided, however, that any successor to Owner as owner of the Unit shall be bound by such covenants, conditions, restrictions, limitations and provisions, whether such successor’s title was acquired by foreclosure, deed in lieu of foreclosure, trustee’s sale or otherwise. 

17. Successors and Assigns. The covenants contained in this Agreement shall inure to the benefit of the Agency and its successors and assigns and shall be binding upon Owner and any successor in interest as owner of fee title to the Restricted Unit. Upon the transfer by Owner of all of its interest in the Restricted Unit, such Owner shall automatically be released from and have no further obligations or liabilities under this Agreement, and all references in this Agreement to Owner thereafter shall mean and refer to such successor in interest of a prior Owner as may then be the owner of the Restricted Unit. The covenants shall run in favor of the Agency and its successors and assigns for the entire period during which such covenants shall be in force and effect, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. The Agency, and its successors and assigns, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach. 

18. No Third Party Beneficiaries. Notwithstanding anything in this Agreement to the contrary, there are no third party beneficiaries of this Agreement except for the City of Brentwood. 

IN WITNESS WHEREOF, the Agency and the Owner have caused this Agreement to be executed on their behalf by their respective officers thereunto duly authorized.
Dated for reference purposes only as of , 20__.

REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOODBy: Executive DirectorBy: Secretary
Owner Owner