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REDEVELOPMENT AGENCY AGENDA ITEM NO. 5

Meeting Date: January 11, 2005

Subject/Title: Approve a Resolution approving an Affordable Housing and Regulatory Agreement between the Brentwood Redevelopment Agency, Brentwood Sand Creek Partners (Lennar Homes), and HPH Properties (Equus) for a portion of Subdivisions 8788, 8789, 8832 and 8833 which lies within the North Brentwood Redevelopment Project Area located north of Saddle Creek Court (previously Old Sand Creek Road) and east of Lone Oak Road

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
By resolution, approve an Affordable Housing and Regulatory Agreement between the Brentwood Redevelopment Agency, Brentwood Sand Creek Partners (Lennar Homes), and HPH Properties (Equus) for a portion of Subdivisions 8788, 8789, 8832 and 8833 which lies within the North Brentwood Redevelopment Project Area located north of Saddle Creek Court (previously Old Sand Creek Road) and east of Lone Oak Road.

PREVIOUS ACTION
Lennar Homes’ Subdivisions 8788, 8789, 8832 and 8833 were approved (Rezone, Tentative Map and Design Review) by the Planning Commission on March 2, 2004, for 311 single-family units. The project was originally proposed by Braddock and Logan.

Since the City’s creation of the Brentwood Redevelopment Agency in 1982, the Agency sets aside 20% of its annual revenue into a Low/Moderate Housing Set-Aside Fund (“Housing Fund”), and is charged with creating, improving and preserving affordable housing within the redevelopment project areas and our community. Community Redevelopment Law mandates redevelopment agencies to use 20% set-aside funds for affordable housing opportunities while applying restrictions on its use. This Housing Fund should not be confused with the City’s Housing Trust Fund, recently created by the City’s Affordable Housing Ordinance in October 2003. The City’s Housing Trust Fund is a collection of fees from developers throughout the City, and the City has relative discretion on how to use its Housing Trust Fund.

BACKGROUND
Lennar proposes to construct a single-family residential development consisting of approximately 311 residential units in Subdivisions 8788, 8789, 8832 and 8833. A portion of the entire Subdivision lies within the North Brentwood Redevelopment Project Area with 59 total parcels (see attached map). The remaining 252 parcels are required to comply with the City’s Affordable Housing Ordinance, and such compliance is addressed in a separate staff report on the Council’s agenda.

Staff has been in discussions with Lennar regarding its obligations and compliance with Community Redevelopment Law’s Health & Safety Code 33413 which requires 15% of all housing constructed in redevelopment project areas be affordable to very-low, low and moderate income households. Unlike the City’s Affordable Housing Program, the Community Redevelopment Law requires the construction or preservation of units rather than paying a fee in-lieu of on-site construction of the affordable units.

The 59 lots within the Redevelopment Project Area are the largest of all the Subdivision’s lots, primarily due to the requirement for transitional lot sizes adjacent to existing one to five acre lots. The average lot size for the 59 units is over 13,000 square feet. It has been the philosophy of the Council, Agency and staff that lower income households placed in extremely low density subdivisions with large lots and large houses cannot afford the basic upkeep of the unit, such as electricity, routine maintenance and lawn watering, while still paying the monthly mortgage, insurance and taxes. Consequently, rather than providing affordable units within the redevelopment portion of the Subdivision, alternatives were proposed by Agency staff to provide the required 9 affordable units (15% of 59 units = 9 units).

One alternative was to preserve the existing 9 affordable units at TownCentre Commons, an apartment complex located on Central Boulevard and owned and operated by HPH Properties (also known as Equus Group). In 1996, the Brentwood Redevelopment Agency financially assisted TownCentre Commons by paying interest on a fee deferment program on behalf of HPH Properties. In return, the Agency deed-restricted 9 units at TownCentre Commons for low income households for 15 years. These 9 units are at-risk of turning market rate in 2011.

Lennar and HPH Properties have agreed upon the terms and conditions to preserve the deed-restrictions of the existing 9 affordable units for an additional 55 years, commencing in 2011 and ending in 2066. Currently, the 9 units are restricted to low-income households. The new agreement shall restrict the units to 4 very-low income households, 3 low-income households and 2 moderate income households.

Staff supports the attached Affordable Housing and Regulatory Agreement which outlines the obligations of each party, the affordability levels, rent, income, duration and the annual reporting requirements. Furthermore, the Redevelopment Subcommittee has reviewed Lennar’s proposed compliance with Agency requirements at its meeting of October 21, 2004, and recommends approval by the Agency.

FISCAL IMPACT
Braddock & Logan, the original builder, and Lennar, the current builder, were offered assistance from the Agency’s Housing Fund to offset the burden of providing the mandated 15% affordable housing, The offers were declined. Consequently, Brentwood Redevelopment Agency is not financially participating in the provision of an additional 9 units to the Agency’s inventory of workforce housing. The Agency’s approval of this Affordable Housing and Regulatory Agreement creates no financial impact on the Agency.

Attachment: Resolution
Site Map
Affordable Housing and Regulatory Agreement

RESOLUTION NO. RA-

A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD APPROVING AN AFFORDABLE HOUSING AND REGULATORY AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD, BRENTWOOD SAND CREEK PARTNERS LLC (LENNAR HOMES), AND HPH PROPERTIES (EQUUS GROUP) FOR SUBDIVISIONS 8788, 8789, 8832 AND 8833.

WHEREAS, California Community Redevelopment Law provides that a redevelopment agency shall establish a Low/Moderate Housing Fund and deposit a portion of tax increment revenues annually into the Housing Fund for the purpose of increasing, improving and preserving the supply of low and moderate income housing available at affordable housing costs; and

WHEREAS, the Redevelopment Agency of the City of Brentwood (“Agency”) desires to support the availability of housing opportunities for very low, low and moderate income residents within the community; and

WHEREAS, Brentwood Sand Creek Partners, LLC recorded final maps for Subdivisions 8788, 8789, 8832 and 8833 (“Project”), which a portion lies within the North Brentwood Redevelopment Project; and

WHEREAS, Brentwood Sand Creek Partners LLC had a Condition of Approval on their Project to comply with the Community Redevelopment Law, Health & Safety Code Section 33413, to provide 15% of their Project as affordable units; and

WHEREAS, HPH Properties has agreed with Brentwood Sand Creek Partners LLC to deed-restrict nine affordable units at HPH Properties’ TownCentre Commons that are at-risk of converting to market rate units in 2011 for an additional 55 years as compliance with the Project’s Condition of Approval; and

WHEREAS, HPH Properties possesses the qualifications and management resources necessary to insure the operation, maintenance and on-going monitoring of the nine affordable units at TownCentre Commons in accordance with the purposes and objectives of the Agency’s Redevelopment Plan.

NOW, THEREFORE BE IT RESOLVED that the Redevelopment Agency of the City of Brentwood hereby approves the Affordable Housing and Regulatory Agreement between the Agency, Brentwood Sand Creek Partners LLC and HPH Properties as compliance with the Project’s Condition of Approval to comply with Community Redevelopment Law and Health & Safety Code 33413, and the Executive Director and Agency Secretary or any of their designees are authorized to execute the Agreement and such other documents as may be needed to complete the transaction.


PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Brentwood at a regular meeting held on the _____ day of ____________ , 2005, by the following vote:

RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:

The Redevelopment Agency of City of Brentwood
150 City Park Way
Brentwood, California 94513
Attn: Redevelopment/Housing Manager

Free Recording Requested Per Government Code Section 27383
___________________________________________________________________

AFFORDABLE HOUSING AND REGULATORY AGREEMENT
(BRENTWOOD SAND CREEK -- AGENCY UNITS)

THIS AFFORDABLE HOUSING AND REGULATORY AGREEMENT is entered into as of the __________ day of ___________, 2005, by and between BRENTWOOD SAND CREEK PARTNERS, LLC, a Delaware limited liability company (“Developer”), HPH PROPERTIES, a California limited partnership (“HPH”) and THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD (“Agency”). The Developer, HPH and Agency agree as follows, with reference to the following facts:

RECITALS

A. Developer owns that certain real property identified as Subdivisions 8788, 8789, 8832 and 8833, APNs 016-090-001, 016-060-001, 016-050-001, 016-070-001, 016-070-002 (“Site”). Developer proposes to construct on the Site a single-family residential development (the “Development”) consisting of approximately 311 detached 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 shall be offered for sale.

B. A portion of the Site lies within the North Brentwood Redevelopment Project Area (“Project Area”), upon which fifty-nine (59) Units will be located (the “Agency Units”). The Developer and Agency agree that Developer may satisfy its obligations with respect to the Agency Units under the Agency Housing Program, as defined in Recital C below, to restrict nine (9) units, or fifteen percent (15%) of the Agency Units, for affordable housing by entering into this Agreement which provides for nine restricted affordable housing units (the “HPH Restricted Units”) off-site at a location commonly referred to as the TownCentre Commons as further described in legal description within the Project Area attached as Exhibit A hereto (the “HPH Property”). The HPH Restricted Units and the HPH Property are owned by HPH. The nine HPH Restricted Units shall consist of two (2) units restricted to occupancy by individuals or families meeting the criteria for a Moderate Income Household, three (3) units restricted to occupancy by individuals or families meeting the criteria for a Low Income Household, and four (4) units restricted to occupancy by individuals or families meeting the criteria for a Very Low Income Household, as each such term is defined below.

C. 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.) (the “Agency Housing Program”) by providing for the development of affordable housing in the Project Area.

D. The HPH Property is currently restricted by a separate regulatory agreement recorded against the HPH Property that expires on May 16, 2011. To protect the existing nine (9) restricted units from converting to unrestricted, market rate units after May 16, 2011, Developer, HPH and Agency agree that the nine (9) HPH Restricted Units shall be subject to the conditions and restrictions, and the rights of Agency, as specified below that govern the HPH Restricted Units.

E. The parties agree that the 252 Units (the “City Units”) other than the Agency Units are not subject to the Agency Housing Program. Developer is satisfying its affordable housing obligations with respect to the City Units pursuant to a separate agreement executed by and among the City of Brentwood (the “City”), the Agency and Developer on or about the date herewith (the “City Agreement”). Agency acknowledges and agrees that Developer shall have no affordable housing obligations to Agency with respect to the City Units other than those described in the City Agreement.

NOW, THEREFORE, Developer, HPH and Agency agree as follows:

ARTICLE 1
CONDITIONS AND RESTRICTIONS OF PROJECT

1.1 Defined Terms. The following terms used in this Article 1 shall have the meanings set forth in this Section 1.1:

A. “Affordable Rent” shall be as defined in Health and Safety Code Section 50053 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 Rent for purposes of this Agreement. For purposes of determining the Affordable Rent: (i) the monthly rental rate for a two (2) bedroom HPH Restricted Unit shall be established using the assumption that the Eligible Household renting the HPH Restricted Unit is comprised of three (3) persons; (ii) the monthly rental rate for a three (3) bedroom HPH Restricted Unit shall be established using the assumption that the Eligible Household renting the HPH Restricted Unit is comprised of four (4) persons; and (iii) the monthly rental rate for a four (4) bedroom HPH Restricted Unit shall be established using the assumption that the Eligible Household renting the HPH Restricted Unit is comprised of five (5) persons.

B. “Eligible Households” shall mean and include persons and families meeting the definitions of “Very Low Income Households”, “Low Income Households” and “Moderate Income Households”, under this Section 1.1.

C. “Very Low Income Household” shall mean a person or household whose annual gross income does not exceed 50% (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 HPH’s standard criteria for determining eligibility for occupancy. These occupancy criteria may include an evaluation of the applicant’s ability to pay rent, employment status and credit history. These specific standards may vary from time to time, but must be uniformly applied at all times.

D. “Low Income Household” shall mean a person or household whose annual gross income does not exceed 80% (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 HPH’s standard criteria for determining eligibility for occupancy. These occupancy criteria may include an evaluation of the applicant’s ability to pay mortgage, employment status and credit history. These specific standards may vary from time to time, but must be uniformly applied at all times.

E. “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 HPH’s standard criteria for determining eligibility for occupancy. These occupancy criteria may include an evaluation of the applicant’s ability to pay mortgage, employment status and credit history. These specific standards may vary from time to time, but must be uniformly applied at all times.

F. “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 HPH with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD or HCD.

G. “Effective Date” shall be the date that this Agreement is executed by the last of the parties to execute this Agreement as shown next to such party’s signature block below; provided, however, it shall be a condition precedent to the effectiveness of this Agreement that Developer timely and fully make the required payment (the “HPH Payment”) to HPH pursuant to the separate “Affordable Housing Payment Agreement” being entered into concurrently herewith between HPH and Developer in connection with this Agreement. The Agency shall cause the City of Brentwood to not issue building or grading permits for the Agency Units until this Agreement is recorded with the Recorder’s Office at the County of Contra Costa; provided that Agency shall cause said recordation of this Agreement to occur no later than five (5) business days after Developer provides written notice to Agency that the HPH Payment has been made by Developer to HPH in accordance with the Affordable Housing Payment Agreement; and further provided that such recordation shall conclusively establish that Developer has satisfied the condition described in the immediately preceding sentence that Developer has made the HPH Payment in accordance with the Affordable Housing Agreement.

1.2 Use of Site. HPH hereby covenants and agrees, for itself, its lessees, successors and assigns, as follows:

A. Development. HPH Property has been developed with approximately 137 apartment units, and appurtenant parking and landscaping improvements.

B. Rent and Income Restrictions. Nine (9) HPH Restricted Units shall be rented to Eligible Households at Affordable Rents adjusted by household size, less a utility allowance.

1.3 Affordability and Rent Restrictions.

A. Nine (9) HPH Restricted Units shall be restricted to occupancy by Eligible Households as follows: four (4) Very Low Income Households, three (3) Low Income Households and two (2) Moderate Income Households (as defined in Section 1.1 above). HPH shall use its reasonably diligent good faith efforts to keep all nine (9) HPH Restricted Units continuously leased to Eligible Households in accordance with this Agreement. If, within thirty (30) days after a vacancy, HPH is unable to fill an HPH Restricted Unit with an Eligible Household, HPH shall notify the Agency in writing. The Agency shall then have fifteen (15) days within which to refer one or more Eligible Households to HPH. If, following the expiration of such fifteen (15) day period, HPH is still unable to fill an HPH Restricted Unit with an Eligible Household, then HPH may lease the vacant unit at a market rent. If HPH does so, it shall continue to use its reasonably diligent good faith efforts to lease any subsequently vacated units to an Eligible Household so that, to the greatest extent feasible, there shall be nine (9) HPH Restricted Units occupied by Eligible Households continuously during the term of this Agreement.

B. The income of all persons who are listed as occupants on the rental application for an HPH Restricted Unit shall be considered for purposes of calculating the applicable income. HPH shall use commercially reasonable efforts to prevent unauthorized persons from residing in an HPH Restricted Unit, in accordance with customary apartment management practices, but shall not be held responsible for unauthorized occupants it is unable to reasonably detect or prevent.
C. HPH shall use reasonable efforts to verify the income levels of all applicants for HPH 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. HPH 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.

D. HPH shall use its reasonable, good faith efforts to diversify the location of HPH Restricted Units so that there shall be no physical concentration of the HPH Restricted Units. The HPH Restricted Units shall be dispersed throughout the HPH Property to the extent reasonably possible. The HPH Restricted Units shall not be identifiable from the exterior or the interior. All units in the HPH Property, including the HPH Restricted Units, shall be consistent as to their quality, design, and materials therein used.

1.4. Reporting Requirements. Annual reports and annual income recertifications must be submitted to the Agency by HPH. The reports, at a minimum, shall include:

(1) The number of persons per HPH Restricted Unit, and relationship to tenant
(2) The bedroom count per HPH Restricted Unit.
(3) Tenant name and address of each HPH Restricted Unit.
(4) Initial occupancy date of the HPH Restricted Units.
(5) Total rent received per HPH Restricted Unit.
(6) Rent paid per month by tenant for each HPH Restricted Unit.
(7) Rent paid per month for each HPH Restricted Unit by outside subsidy (federal, state, local, etc.).
(8) Gross income per year of tenant’s household for each HPH Restricted Unit.
(9) Percent of rent paid in relation to income for each HPH Restricted Unit.

Annual income recertifications shall also contain those documents used to certify eligibility. Agency may, from time to time during the term of this Agreement, request additional or different information and HPH shall promptly supply such information in the reports required hereunder. HPH shall maintain all necessary books and records, including property, personal and financial records, in accordance with requirements prescribed by Agency with respect to all matters covered by this Agreement. HPH, at such time and in such forms as Agency may require, shall furnish to Agency statements, records, reports, data and information pertaining to matters covered by this Agreement. Upon request for examination by Agency, HPH, at any time during normal business hours, shall make available all of its records with respect to all matters covered by this Agreement. HPH shall permit Agency to audit, examine and make excerpts or transcripts from these records.

ARTICLE 2
NO DISCRIMINATION; COMPLIANCE WITH
REDEVELOPMENT PLAN

2.1 No Discrimination. HPH covenants by and for itself and any successors in interest in the HPH Restricted Units 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 HPH Restricted Units, nor shall HPH 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 HPH Restricted Units.

2.2 Nondiscrimination Clauses. All deeds, leases or contracts made relative to the HPH Restricted Units, 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.

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.

2.3 Compliance with Redevelopment Plan. During the term of this Agreement, the HPH Restricted Units shall consist of two (2) units restricted to occupancy by individuals or families meeting the criteria for a Moderate Income Household, three (3) units restricted to occupancy by individuals or families meeting the criteria for a Low Income Household, and four (4) units restricted to occupancy by individuals or families meeting the criteria for a Very Low Income Household, and 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 HPH Restricted Units unless the changes have been approved in writing by HPH (which approval may be withheld by HPH in its sole and absolute discretion). HPH shall not have any duty to comply with any other changes in the Redevelopment Plan unless it has first received thirty (30) days’ advance written notice from the Agency describing such changes.

2.4 Satisfaction of Affordable Housing Obligations. Upon execution of this Agreement by the parties, Agency agrees that Developer shall have satisfied in full any and all affordable housing obligations under the Agency Housing Program with respect to the Agency Units and that Agency shall not impose any further affordable housing requirements with respect to the Agency Units.

ARTICLE 3
MAINTENANCE AND MANAGEMENT

3.1 MAINTENANCE. HPH and all successors in interest, agree that they shall maintain the improvements and landscaping on the HPH Property in a clean and orderly condition and in good condition and repair and keep the HPH Property free from accumulation of debris and waste materials for a period of fifty-five (55) years commencing on May 17, 2011. HPH’s obligation to maintain shall be subject to reasonable periods for repair or restoration following fire or other casualty damage, and for periodic remodeling as HPH may deem necessary or desirable, provided such work is prosecuted diligently to completion within a reasonable time.

3.2. MANAGEMENT. During the term of this Agreement, HPH shall promptly notify the Agency in the event there is any change in the property management company managing the HPH Property. The property management and maintenance agreement shall name the Agency as a third-party beneficiary permitting the Agency the right to enforce the Agreement. HPH shall submit a copy of such agreement to the Agency, provided the Agency shall not have the right to approve or disapprove such agreement except to ensure compliance of such agreement with the provisions of this paragraph 3.2.

ARTICLE 4
GENERAL PROVISIONS

4.1 Notices. Notices required to be given to the Agency, HPH 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:
Redevelopment/Housing Manager
The Redevelopment Agency of the City of Brentwood
150 City Park Way
Brentwood, CA 94513

To Developer:
Brentwood Sand Creek Partners, LLC
c/o Lennar Homes
3130 Crow Canyon Pl., #310
San Ramon, CA 94583
Attn: Ms. Lynn Jochim

To HPH:
HPH Properties
1120 Second Street, Suite 118
Brentwood, CA 94513
Attn: Brent Aasen

4.2 Duration. The covenants set forth in Article 1 of this Agreement on the HPH Restricted Units 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, and its successors and assigns, and shall be enforceable by the Agency, or its successors and assigns, for a period of fifty-five (55) years commencing on May 17, 2011 (the “Term”). The covenants against discrimination set forth in Article 2 of this Agreement on the HPH Restricted Units shall be deemed to run with the land in accordance with Section 33438 of the Health and Safety Code or any successor statute and shall remain in effect in perpetuity. The parties agree that for the Term of this Agreement, all future deeds or transfers of interest of Restricted Units shall show or reference the applicable restrictions of this Agreement. Notwithstanding anything else in this Agreement to the contrary, HPH shall have the right to terminate this Agreement if, as a result of a casualty loss, HPH elects to discontinue the use of the HPH Property for residential dwelling units. In such event, HPH shall pay to the Agency a portion of the proceeds of any insurance received by HPH in connection with such casualty loss computed as follows: multiply the amount of such insurance proceeds received by HPH by a fraction, the numerator of which is nine (9) and the denominator of which is the total number of dwelling units located on the HPH Property prior to the casualty loss. If, as a result of a casualty loss, HPH elects to discontinue the use of a portion, but not all, of the HPH Property for residential dwelling units, the number of HPH Restricted Units shall be reduced in proportion to the reduction in the total number of residential units on the HPH Property. In such event, HPH shall pay to the Agency a portion of any insurance proceeds received by HPH and not utilized to repair or rebuild the improvements on the HPH Property by a fraction, the numerator of which shall be the number of HPH Restricted Units destroyed and not repaired or rebuilt and the denominator of which shall be the total number of units located on the HPH Property prior to the casualty loss.

4.3 Amendment. This Agreement may be amended only in writing by Agency, HPH and the Developer.

4.4 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 for the Development or HPH Property; provided, however, that any successor of Developer to the Site and any successor of HPH to the HPH Property 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.

4.5 Successors and Assigns; 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, shall be binding upon Developer and HPH and their respective successors in interest as owner of fee title to the Site, or any part thereof, or the HPH Property, or any part thereof, respectively. Upon the transfer by Developer of all of its interest in the Site, 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 Developer as may then be the owner of the Site. Upon the transfer by HPH of all of its interest in the HPH Property, HPH shall automatically be released from and have no further obligations or liabilities under this Agreement, and all references in this Agreement to HPH thereafter shall mean and refer to such successor in interest of HPH as may then be the owner of the HPH Property. 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. 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; provided, however, in no event will Agency have the right to seek any legal or equitable remedy of any kind against Developer or Developer’s successors or assigns, for any breach or default under this Agreement by HPH with respect to the HPH Restricted Units or otherwise, it being acknowledged and agreed by the parties that the Agency shall have enforcement rights solely against HPH with respect to any and all obligations hereunder related to the HPH Restricted units.

4.6 No Transfer. HPH shall not sell, transfer, convey, encumber, assign or lease the whole or any part of the HPH Property without prior notification to the Agency. HPH shall notify the Agency by written notice at least ninety (90) days prior to any proposed transfer.

4.7 Effect of Agreement. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall have any force or effect on any buyer of a single Unit or its right, title or interest in or to such Unit in the Development.

4.8 California Law. This Agreement shall be construed in accordance with and be governed by the laws of the State of California.

4.9 Incorporation of Recitals. The parties agree that Recitals A through E above are true and correct and are incorporated herein by this reference.

4.10 Severability. Should any provision of this Agreement be found invalid or unenforceable by the court or other body of competent jurisdiction, said invalidity, unenforceability or ineffectiveness shall not affect the validity of the remaining provisions which shall remain in force to the maximum extent possible.

SIGNATURE PAGE FOLLOWS

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

Date: ____________________ REDEVELOPMENT AGENCY OF THE
CITY OF BRENTWOOD

By: ____________________________
Donna Landeros, Executive Director

By: ______________________________
Karen Diaz, Agency Secretary

“AGENCY”

APPROVED AS TO FORM:
_______________________
Agency Counsel

Date: ____________________ Brentwood Sand Creek Partners, LLC, a
Delaware limited liability company

By: Lennar Homes of California, Inc., a
California corporation, its Managing Member

By: _____________________________
Vice President

“DEVELOPER”

Date: _____________________ HPH Properties, a California limited
partnership

By: Porter-Livingston Development, Inc.,
Its General Partner

By: ______________________________
Brent Aasen
Vice President, Authorized Representative

“HPH”

SIGNATURES TO BE NOTARIZED

EXHIBIT A

LEGAL DESCRIPTION OF THE HPH PROPERTY

Assessor Parcel Number 013-010-079 and located at 1275 Central Boulevard, Brentwood, Contra Costa County, California, commonly known as TownCentre Commons.
 

City Administration
City of Brentwood City Council
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Brentwood, CA 94513
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E-mail allcouncil@brentwoodca.gov