HomeMy WebLinkAboutItem 06 - Authorization to persue State & Ferderal Affordable Housing, Transportation, and Water Quality Grant Funding
Department Name: Community Development
and Public Works
Cost Center: 4007, 5010, 5301
For Agenda of: January 21, 2020
Placement: Consent
Estimated Time: N/A
FROM: Michael Codron, Community Development Director
Shelly Stanwyck, Assistant City Manager – Community Services
Prepared By: Cara Vereschagin, Housing Coordinator
Brian Nelson, Supervising Civil Engineer
Wyatt Banker-Hix, Engineer II
SUBJECT: AUTHORIZATION TO PURSUE STATE AND FEDERAL AFFORDABLE
HOUSING, TRANSPORTATION, AND WATER QUALITY GRANT
FUNDING
RECOMMENDATION
1. Adopt a Resolution (Attachment A) authorizing (1) the City as a Participating Entity in the
Application to be submitted by Peoples’ Self-Help Housing Corporation (PSHHC) to apply
for the Affordable Housing Sustainable Communities (AHSC) grant program to the
California Department of Housing and Community Development (HCD) for an estimated $3
million for sustainable transportation infrastructure projects and transportation related
amenities; and (2) to execute certain documents with PSHHC for the submittal of the AHSC
Program Application, in connection with Tiburon Place, an Affordable Housing Project at
3750 Bullock Lane; and
2. Adopt a Resolution (Attachment B) authorizing a proposal for funding from the Department
of Water Resources and authorizing the City Manager to execute the agreement and any
amendments thereto; and
3. Authorize staff to prepare and submit State and Federal grant applications for the Prado Road
Interchange Project and Mid-Higuera Bypass projects; and
4. Authorize the City Manager or designee to execute grant application documentation; and
5. Authorize the City Manager to appropriate grant funds and approve a budget amendment to
reflect received grant funds, if awarded.
DISCUSSION
Background on Affordable Housing Sustainable Communities Grant Program and
Application for Tiburon Place
The AHSC Program provides competitive grants and loans to support infill and compact
development projects that will achieve greenhouse gas (GHG) reductions through the
development of affordable housing and related infrastructure, active transportation infrastructure,
capital transit improvements, and related programming. The AHSC Program is administered by
the Strategic Growth Council and implemented by the HCD. Funding for the AHSC Program is
Item 6
Packet Page 83
provided from the Greenhouse Gas Reduction Fund (GGRF), which is an account established to
receive Cap-and-trade auction proceeds. On November 1, 2019, HCD published a Notice of
Funding Availability (NOFA), for the 5th Round of the AHSC Program, which indicates the
availability of hundreds of millions of dollars for new projects across the State of California.
PSHHC, a local non-profit housing developer, intends on applying for Round 5 of the AHSC
Program for financial assistance to construct its affordable housing project, titled Tiburon Place,
which will provide 68 new affordable housing units in the City’s Orcutt Area. Because the
AHSC Program requires integration of housing and transportation-related projects, PSHHC is
requesting that City staff collaborate in the grant application by identifying potential sustainable
transportation infrastructure projects (STIs) and transportation related amenities (TRAs) that
would be eligible for AHSC funds. Potential projects and/or amenities must be located within a
mile of the Tiburon Place development in the Orcutt Area and may include investments that
support sustainable transportation, such as new bicycle or pedestrian infrastructure, green
stormwater treatments, and improved transit service and facilities. Staff has identified the
following STI/TRA projects for this grant application, representing a total request for
approximately $3 million in funds:
• Railroad Safety Trail Gap Closure (Complete pedestrian//bicycle trail connection between
Orcutt Road and Tiburon Road) – STI Category
• Purchase of two electric transit vehicles (Additional buses to improve SLO Transit service to
the Orcutt Area and affordable housing development) – TRA Category
Since the AHSC Program encourages partnerships between local munici palities, transit agencies,
and housing developers, both PSHHC and City staff are recommending that PSHHC apply as
“Lead Applicant” to the AHSC Program, and the City be identified in the Application as a
“Participating Entity,” which will (1) strengthen the Application’s overall competitiveness; and
(2) allow for ease of the distribution of funds for the transportation-related projects. In order for
PSHHC to submit the AHSC Program Application by the February 11, 2020 deadline, the City
and PSHHC must execute an Implementation and Mutual Indemnity Agreement, identifying
understandings and intentions of the expenditure of AHSC Program Funds, should the
Application be awarded funding. A draft form of this Implementation and Mutual Indemnity
Agreement is provided in Attachment C, which will be reviewed by the City Attorney’s office
prior to execution, along with any other required documentation.
Background on Prado Road Interchange and IIG and SB1 Grants
The Prado Road Interchange is the proposed connection between the two halves of Prado Road.
The project consists of a bridge spanning Prado Road across Highway 101, northbound ramps in
the initial phase, and southbound ramps at a later phase of the project. The Prado Road
Interchange will provide multimodal connectivity and traffic relief throughout the City and is
essential for the development of future housing and business. The City is the lead agency and
currently considering interchange types as well as producing environmental documents.
Item 6
Packet Page 84
While planning-level construction cost estimates have been developed and a funding program
has been established for the project, local construction costs have escalated rapidly in recent
years and recent project design refinements indicate that project construction costs are likely to
increase between now and the anticipated construction year of 2021-22. In anticipation of a
potential future funding gap between programmed allocations and future construction costs, staff
has begun exploring grant opportunities to fill that gap. Two grants have thus far been identified:
The Infill Infrastructure Grant (IIG) and the Senate Bill 1 Local Partnership Program
Competitive Grant (SB1).
HCD administers the IIG in order to mitigate the cost of low-income housing developments. The
grant provides construction cost relief to both developers and agencies based on the number of
low-income units constructed. The Prado Interchange facilitates the development of low-income
housing units at the San Luis Ranch development, and staff seeks authorization to pursue a grant
application in a future NOFA cycle.
SB1 is the omnibus bill passed and signed in 2017 providing additional funding for
transportation projects. Part of that bill created a competitive grant program for agencies to fund
infrastructure projects and roadway maintenance. The Prado Interchange fits the goals and
objectives of this bill and could be a competitive application for grant funding.
In addition to the grants above, staff will continue searching for other supplemental funding
opportunities and recommend Council authorize staff to prepare and submit other State and
Federal grant applications to support funding needs for this project.
Background on Mid-Higuera Bypass Project and Coastal Watershed Flood Risk Reduction
Grant Program
The Mid-Higuera Bypass Project is located along the stretch of the San Luis Obispo Creek
between Marsh Street and Madonna Road. The project will increase flood protection within the
Mid-Higuera area by removing sediment from the creek, creating pathways for flood waters to
return to the creek, removing barriers within the creek channel, and by creating flood bypass
channels and graded benches for increased creek capacity. The project also includes the
replacement of the Bianchi Lane Bridge as a creek widening component. To date, the City has
been developing designs for this project through funding appropriated by the County Zone 9
Advisory Committee. Staff have begun the process of seeking supplemental funding sources to
contribute to the construction of the project.
This project could be competitive for the Coastal Watershed Flood Risk Reduction Grant
Program. This program will fund projects in coastal areas that focus on multi-benefit flood risk
reduction projects. The goal of the program is to address flood risk and public safety, enhance
coastal ecosystems, including fish and wildlife habitat enhancement, and promote natural
resources stewardship and public access corridors. The Mid-Higuera Bypass Project fits these
grant program goals and objectives, and the City is an eligible agency to receive these funds.
Item 6
Packet Page 85
In addition to the Coastal Watershed Flood Risk Reduction Grant Program, staff continue to seek
supplemental funding for this project, and are recommending that Council authorize staff to
prepare and submit other State and Federal grant applications to support funding needs for the
Mid-Higuera Bypass Project.
Policy Context
Seeking alternative funding sources and applying to available grant opportunities is a theme
commonly referenced throughout the City’s Housing Element. HE Goal 6 is Housing Production,
which specifically states “Plan for new housing to meet the full range of community housing
needs.” HE Program 6.20 states, “Continue to financially assist in the development of housing
affordable to extremely-low, very-low, low or moderate income households during the planning
period using State, Federal and local funding sources, with funding priority given to projects
that result in the maximum housing benefits for the lowest household income levels.”
Additionally, the City has made a commitment to achieving carbon neutrality by 2035 and is
working on numerous initiatives including, an update to the Climate Action Plan and developing
a Clean Energy Choice Program for new construction. These align with the purpose of the
AHSC Program, as it is intended to help facilitate the construction of new affordable housing
while providing funding for transportation improvements that encourage walking, bicycling, and
transit use which ultimately reduce GHG emissions.
The City’s Financial Management Manual, Section 740, requires City Council approval of all
grant applications in excess of $5,000 and delegates receipt and contract execution to the City
Manager if delegation is allowed by the grantor agency. In particular, section 3(d) states:
“For grants in excess of $5,000, prepare a Council Agenda Report requesting
authorization to seek grant funding. This report should describe the grant
program's conformance with this policy, including the results of the cost/benefit
analysis.”
Staff finds that submittal of grant applications for Mid-Higuera Bypass Project and the Prado
Road Interchange Project meets the City’s Grant Management Policy outlined in Section 740
because there is an opportunity to significantly leverage available funding on balance with only
modest staff time required to prepare the grant application; the proposed grant applications
would result in additional priority work efforts being implemented; and, all grant administration,
tracking, and reporting will be conducted in accordance with applicable City policy and any
requirements specified in an awarded grant contract.
Public Engagement
Although this is authorization to apply for grant funding, no public engagement is required;
however, public engagement will take place as part of ongoing project work, and as required by
these specific grant opportunities. For example, the AHSC Program does require a level of public
engagement, which is currently being conducted by PSHHC. Public comment can also be
provided to the City Council through written correspondence and public comment at the meeting.
Item 6
Packet Page 86
CONCURRENCE
Both Community Development and Public Works staff have been collaborating since August
2019 with PSHHC staff on putting together the AHSC grant application, as it is designed to fund
affordable housing and sustainable transportation development.
ENVIRONMENTAL REVIEW
There is no environmental review required for grant submittals. The California Environmental
Quality Act does not apply to the recommended action in this report, because the action does not
constitute a “Project” under CEQA Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2019-20
Funding Identified: Yes
Fiscal Analysis for AHSC Program:
Funding Sources Current FY Cost
Annualized
On-going Cost
Total Project
Cost
General Fund
State (AHSC Program
Total)
$3,000,000
Federal
Fees
Other:
Total $3,000,000
If awarded, the AHSC Grant Program will provide critical funding in the amount of about $3
million for new sustainable transportation infrastructure and transportation related amenities in
the Orcutt Area, as well as provide an anticipated $8 million directly to PSHHC for the
construction of the affordable housing units. This funding will also reduce the barrier of PSHHC
to seek additional major funding sources for the development of Tiburon Place. Currently,
PSHHC anticipates financing Tiburon Place with AHSC Program Funds, City Affordable
Housing Fund in-lieu fee dollars (only to fund the construction of specific units included that
exceed the original inclusionary housing requirement for certain residential development tracts in
the Orcutt Area), awards from the California Tax Credit Committee and the California Debt
Limit Allocation Committee, and other private entities. Further, awards that are granted for the
transportation components of the AHSC Application will be a bonus for the City by backfilling
the portion of project costs that would otherwise require funding through the General Fund,
Transit Fund or other local funding sources, allowing these limited local funds to be utilized for
other high-priority investments in the community.
Item 6
Packet Page 87
The Public Works Department has time allocated within its normal work program to prepare and
submit grant applications for the Prado Road Interchange and Mid Higuera Bypass projects. If
successful, these grant facilities could significantly leverage and augment construction funding.
The award funding that could be contributed to each project from the identified grants are
affected by factors including total grant program funding, competition for grant funds from other
agencies, and project delivery timeframes. The following table lists the total program funding
available, which would be divided into grants to awarded agencies.
Grant Identified Total Grant Program Funding*
Prop 1 Coastal Watershed Flood Risk Reduction Program $26 Million
Infrastructure Infill Grant $194 Million
SB1 LPP Competitive Grant $100 Million
*Note: This is the total funding that other agencies would compete for in grant proposals.
ALTERNATIVES
1. Continue the recommendations to a later meeting. This alternative is not recommended as the
AHSC grant application is due on February 11, 2020, and this Implementation and Mutual
Indemnity Agreement is a required attachment of the application. Additionally, the IIG, SB1,
Coastal Watershed Flood Risk Reduction Grant Program grant applications are due at the end
of January.
2. The City Council could choose to deny the request to participate, prepare, and/or submit
grant applications. This alternative is not recommended because these grants would provide
critical supplemental funding sources for projects in the City.
Attachments:
a - Draft Resolution - AHSC Application
b - Draft Resolution - Prop 1 Grant Application
c - AHSC Implementation and Mutual Indemnity Agreement
Item 6
Packet Page 88
R ______
RESOLUTION NO. _____ (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA: (1) AUTHORIZING THE CITY AS A
PARTICIPATING ENTITY IN THE APPLICATION TO BE SUBMITTED
BY PEOPLES’ SELF-HELP HOUSING CORPORATION, UNDER THE
STATE OF CALIFORNIA’S AFFORDABLE HOUSING AND
SUSTAINABLE COMMUNITIES PROGRAM; AND (2) TO EXECUTE
CERTAIN DOCUMENTS WITH PSHHC FOR THE SUBMITTAL OF THE
AHSC PROGRAM APPLICATION; IN CONNECTION WITH TIBURON
PLACE, AN AFFORDABLE HOUSING PROJECT AT 3750 BULLOCK
LANE IN THE CITY
WHEREAS, the State of California, the Strategic Growth Council (“SGC”) and the
Department of Housing and Community Development (“HCD”) issued a Notice of Funding
Availability dated November 1, 2019 (the “NOFA”), under the Affordable Housing and
Sustainable Communities (“AHSC”) Program established under Division 44, Part 1 of the Public
Resources Code, commencing with Section 75200; and
WHEREAS, Peoples’ Self-Help Housing Corporation (“PSHHC or “Lead Applicant”)
desires to apply for AHSC Program funds and submit the Application Package released by HCD
for the AHSC Program; and
WHEREAS, the SGC is authorized to approve funding allocations for the AHSC Program,
subject to the terms and conditions of the NOFA, Program guidelines, Application Package, and
Standard Agreement. HCD is authorized to administer the approved funding allocations of the
AHSC Program; and
WHEREAS, PSHHC wishes to receive funding to assist with: (A) the construction of
Tiburon Place affordable housing project in San Luis Obispo, California (“Housing Project”); (B)
the construction of certain housing related infrastructure (“HRI Improvements”); (C) the
construction of certain sustainable transportation infrastructure (“STI Improvements”); (D) the
construction of certain transit related amenities (“TRA Improvements”); and (E) certain costs
related to program service and implementation (“AHSC Programs”); and
WHEREAS, PSHHC will serve as Lead Applicant of the AHSC Program and has
requested the City of San Luis Obispo (“City”) to be identified in the AHSC Program Application
as a “Participating Entity” in part as required through the NOFA; and
WHEREAS, as required by the NOFA, the Lead Applicant and Participating Entity must
execute a AHSC Implementation and Mutual Indemnity Agreement (“Agreement”), identifying
understandings and intentions of the expenditure of AHSC Program Funds for the approved AHSC
Program Application; and
Item 6
Packet Page 89
Resolution No. _____ (2020 Series) Page 2
R ______
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. AHSC Program Participation. The Council hereby authorizes the City to be
designated as a Participating Entity in the AHSC Program Application and authorizes City staff to
work with the Lead Applicant, in order for Lead Applicant to apply for and submit to HCD the
AHSC Program Application, as detailed in the NOFA, in an aggregate amount of $13,993,144, for
the funding of: (A) the Housing Project; (B) the HRI Improvements; (C) the STI Improvements;
(D) the TRA Improvements; and (E) the AHSC Programs.
SECTION 2. Execution of Documents. The Council hereby authorizes the Community
Development Director, the Public Works Director, or their designees, to execute the Agreement
with PSHHC, as well as any other documents required or deemed necessary or appropriate for
PSHHC to secure AHSC Program Funds from HCD, and all amendments thereto.
SECTION 3. Eligible Activities. If the application for the AHSC Program is approved for
funding to Lead Applicant, the City hereby agrees to work with PSHHC to expend the AHSC
Program Funds for the eligible activities in the manner agreed upon in the Agreement, also
presented in the AHSC Program Application as approved by HCD and in accordance with the
AHSC Program guidelines as cited above.
Item 6
Packet Page 90
Resolution No. _____ (2020 Series) Page 3
R ______
SECTION 4. Environmental Determination. No environmental review is required for
grant submittals, per Section 15061(b)(3) General Rule of the CEQA Guidelines. It can be seen
with certainty that the proposed action of PSHHC to apply for grant funding will have no
significant effect on the environment.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2020.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this __________ day of ____________________________, 2020.
____________________________________
Teresa Purrington
City Clerk
Item 6
Packet Page 91
R ______
RESOLUTION NO. _____ (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING A PROPOSAL FOR FUNDING
BE SUBMITTED TO THE DEPARTMENT OF WATER RESOURCES AND
AUTHORIZING THE CITY MANAGER TO EXECUTE THE
AGREEMENT AND ANY AMENDMENTS THERETO, FOR THE MID-
HIGUERA BYPASS PROJECT
WHEREAS, the City of San Luis Obispo (“City”) is responsible for and has authority over
(e.g. flood management, ecosystem management, water quality management) in the area proposed
for the Mid-Higuera Bypass Project (“Project”) and is willing to participate in, coordinate, and
collaborate with other interested parties that are participating in the devel opment of the Project;
and,
WHEREAS, the City is authorized to submit a proposal to obtain funding for the Project
from the Department of Water Resources and the State of California; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows;
SECTION 1. That pursuant and subject to all of the terms and conditions of the Water
Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1; Wat. Code, § 79700
et seq.), the City shall submit a proposal to obtain funding for the Project from the Department of
Water Resources.
SECTION 2. That the City Council authorizes the City Manager, or designee, to execute
a funding agreement with the Department of Water Resources and any amendments thereto, if
funding is awarded to the City.
SECTION 3. That the City Manager, or designee, shall prepare the necessary data, make
investigations, and take other such actions as necessary and appropriate to execute the Mid -
Higuera Bypass Project.
Item 6
Packet Page 92
Resolution No. _____ (2020 Series) Page 2
R ______
SECTION 4. No environmental review is required for grant submittals, per Section
15061(b)(3) General Rule of the CEQA Guidelines. It can be seen with certainty that the proposed
action of the City to apply for grant funding will have no significant effect on the environment.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2020.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this __________ day of ____________________________, 2020.
____________________________________
Teresa Purrington
City Clerk
Item 6
Packet Page 93
1
AHSC IMPLEMENTATION AND
MUTUAL INDEMNITY AGREEMENT
THIS AHSC IMPLEMENTATION AND MUTUAL INDEMNITY AGREEMENT (the
“Agreement”) is made and entered into as of ________________, 2019, between the City of San
Luis Obispo, a California charter city and municipal corporation (“Agency”), and Peoples’ Self-
Help Housing Corporation, a California nonprofit public benefit corporation (“Developer”, and
collectively with the Agency, the “Parties”, or individually, a “Party”), upon the basis of the
following facts, understanding and intentions of the parties:
A. The State of California, the Strategic Growth Council (“SGC”) and the
Department of Housing and Community Development (“HCD”) issued a Notice of Funding
Availability dated November 1, 2019 (the “AHSC NOFA”), under the Affordable Housing and
Sustainable Communities (“AHSC”) Program established under Division 44, Part 1 of the Public
Resources Code, commencing with Section 75200.
B. Developer is applying for AHSC Funds in response to the AHSC NOFA to
provide funding for (A) construction of the Tiburon Place affordable housing project in San Luis
Obispo, California (the “Housing Project”); (B) the construction of certain housing related
infrastructure (the “HRI Improvements”); (C) the construction of certain sustainable
transportation infrastructure (the “STI Improvements”); (D) the construction of certain transit
related amenities (the “TRA Improvements”); and (E) certain costs related to program service
and implementation (the “AHSC Programs”). These improvements are described in more detail
in the Final Application to be submitted by February 11, 2020 (collectively, the “AHSC
Application”).
C. The AHSC Application seeks an award to the Developer in an aggregate amount
of $13,993,144 in AHSC Funds consisting of: (A) $9,795,201of AHSC loan Funds for a
permanent loan (“AHSC Loan”) which will be disbursed to a limited partnership to be formed
later (the “Partnership”) for construction of the Housing Project; (B) $_____________ of AHSC
grant funds shall be used for the purpose of reimbursing the cost of the HRI Improvements; (C)
$___________ of the AHSC grant funds for the purpose of reimbursing the cost of the STI
Improvements; (D) $___________ of AHSC grant funds for the purpose of reimbursing the cost
of the TRA Improvements; and (E) $______ of AHSC grant funds for reimbursing the costs of
the AHSC Programs. The AHSC grants shall be referred to collectively as the “AHSC Grants”.
The AHSC Loan and the AHSC Grants are collectively referred to herein as the “AHSC
Financing.”
D. The Agency and Developer are required to enter into this Agreement in order to
comply with the specific AHSC Program Threshold Requirement stated in Section 106 (a) 11
(A) of the 2019 AHSC Program Guidelines dated October 31, 2019 (the “Transportation Agency
Prior Experience Threshold Requirement”). This section of the guidelines dictates that applicants
must demonstrate prior experience by providing evidence of at least two prior projects that are
similar to the proposed AHSC project in scope and size, which have been completed by the
applicant, or joint applicant, during the ten (10) years preceding the application due date. This
section of the guidelines also states that the applicants may demonstrate the requisite experience
by using the past experience of work completed of a non-applicant so long as the applicants can
provide an executed agreement with that specific non-applicant for the completion of the related
Item 6
Packet Page 94
2
work in the AHSC Application for which funding is sought. The purpose of this Agreement is
to, amongst other things, comply with the Transportation Agency Prior Experience Threshold
Requirement.
E. The Agency owns the property that the Transportation Obligations will be
constructed on, and thus has sufficient “site control” as that term is defined in the AHSC
Program Guidelines. [modify as needed]
F. The Agency is a non-applicant, but, as set forth herein, will have obligations to
perform the following specific [modify as needed] STI Improvements and TRA Improvements
included in the AHSC Application (collectively, the “Transit Obligations”):
1. _________________
2. _________________
3. _________________
G. The Agency can demonstrate prior experience and provide evidence of at least
two prior projects that are similar in scope and size which have been completed during the ten
(10) years preceding Jan 16, 2018. Below is a list of these projects:
1. _______________________
2. _______________________
H. The Agency shall be responsible for developing and constructing the Transit
Obligations, and for all costs expenses related thereto, and Developer shall be responsible for
constructing and developing the Housing Project and the HRI Improvements (together, the
“Developer Obligations”), and for all costs and expenses related thereto. In connection with the
AHSC Grants and AHSC Loan, Developer is required to enter into standard agreements,
disbursement agreements, and regulatory agreements with HCD where Developer will be liable
for the full and timely performance by the parties to complete the obligations set forth therein,
including completion of the Housing Project, completion of the HRI, STI and TRA
Improvements, and funding of the AHSC Programs, as described in the AHSC Application. The
AHSC Application and all standard agreements, disbursement agreements, regulatory
agreements and any other agreements required by HCD in connection with the AHSC Financing
shall be collectively referred to herein as the “AHSC Documents”.
I. The Agency and Developer each acknowledge and agree that the inability or
failure by either party to fully and timely complete each party’s respective improvements
required by the AHSC Documents may affect the timing and right of the other party to receive
disbursement of AHSC funds due the other party notwithstanding the other party’s full and
timely performance of its obligations.
NOW, THEREFORE, in consideration of the recitals, covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
Item 6
Packet Page 95
3
AGREEMENT
1. Obligations. The Agency shall, in its sole responsibility, complete the Transit
Obligations in accordance with the terms of the AHSC Documents and the approved design and
construction documents. The Developer shall, in its sole responsibility, complete the Developer
Obligations in accordance with the terms of the AHSC Documents and the approved design and
construction documents. Each Party will provide the other Party with copies of all requisitions
for work related to their respective work, the notice of completion, and other documents related
to their respective work that another party may reasonably request.
2. Agency Indemnity. Agency is responsible for carrying out the Transit
Obligations using AHSC grant proceeds in accordance with the AHSC Documents, including,
but not limited to, any disbursement deadlines contained therein. Agency shall indemnify,
defend, protect, and hold harmless Developer, and its affiliates, directors, officers, partners,
members, agents and employees (each, an “Developer Indemnified Party”) against any and all
claims, actions, suits, causes of action, losses, liabilities, injuries, costs, damages, or expenses
(collectively, “Claims”), including, without limitation, any direct, indirect or consequential loss,
liability, damage, or expense, court costs and attorneys’ fees, arising out of or in connection with
the Agency’s performance of or failure to perform its obligations to complete the Transit
Obligations, in the manner and within the time periods, and to otherwise perform any covenants
constituting Agency obligations, set forth in the AHSC Documents, including any claims, losses
or liabilities of the Partnership caused by a breach or default under the AHSC Documents that
triggers a default under the AHSC Loan. However, in no event shall the Developer Indemnified
Party be indemnified hereunder for any Claims resulting from such party’s sole negligence or
willful misconduct. Agency agrees to pay all of the Developer Indemnified Party’s costs and
expenses, including attorneys’ fees, which may be incurred in any effort to enforce any term of
this Agreement, including, but not limited to, all such costs and expenses which may be incurred
by any Developer Indemnified Party in any legal action, reference or arbitration proceeding
brought by HCD or other third party.
3. Developer Indemnity. Developer is responsible for carrying out the Developer
Obligations using AHSC grant proceeds and AHSC Loan funds in accordance with the AHSC
Documents, including, but not limited to, any disbursement deadlines contained. Developer shall
indemnify, defend, protect, and hold harmless the Agency and its affiliates, directors, officers,
partners, members, agents and employees (each, an “Agency Indemnified Party”) against any
and all Claims, including, without limitation, any direct, indirect or consequential loss, liability,
damage, or expense, court costs and attorneys’ fees, arising out of or in connection with
Developer’s performance of or failure to perform its Developer Obligations to complete
construction and development of the Housing Development, in the manner and within the time
periods, and to otherwise perform any covenants, set forth in the AHSC Documents. However, in
no event shall the Agency Indemnified Party be indemnified hereunder for any Claims resulting
from such party’s sole negligence or willful misconduct. Developer agrees to pay all of the costs
and expenses of the Agency Indemnified Party, including attorneys’ fees, which may be incurred
in any effort to enforce any term of this Agreement, including, but not limited to, all such costs
and expenses which may be incurred by any Agency Indemnified Party in any legal action,
reference or arbitration proceeding brought by HCD or other third party.
Item 6
Packet Page 96
4
4. Schedule of Performance; Progress Reports. Developer and Agency shall comply
with the schedule of performance to be mutually agreed upon, as shall be set forth in the AHSC
Documents, for the completion of their respective obligations hereunder (the “Schedule of
Performance”). The Agency and Developer agree to give the other party a written monthly
status report on the progress toward the milestones listed in the Schedule of Performance, i.e.,
the Developer will report on the Developer’s progress on the Housing Project, HRI
Improvements and AHSC Programs, and the Agency will report on the Agency’s progress on the
STI Improvements and TRA Improvements. If any Party anticipates not meeting the targeted
construction and grant disbursement milestones as established in the AHSC Documents, that
Party will promptly notify the other parties in writing and will meet the other Party to discuss the
reasons why the milestone dates may not be met and what actions the delayed party intends to
take to meet the milestones or otherwise rectify the Schedule of Performance in order to maintain
good standing with the terms and conditions established in the AHSC Documents.
5. Delegation. Notwithstanding the obligations of each party under this Agreement,
each party shall be entitled to enter into sub-agreements with each other or with other parties to
provide any assistance or services needed for each party to perform its obligations under this
Agreement and the AHSC Documents.
6. Cost Overruns. Developer shall be responsible for paying all costs required to
complete the Housing Project, irrespective of whether such costs exceeds the AHSC Loan and
the portion of the AHSC Grant designated for the HRI Improvements. Agency shall be
responsible for paying all costs required for the Transit Obligations irrespective of whether such
costs exceed the portion of the AHSC Grant designated for the Transit Obligations.
7. Developer and Partnership Step In Rights.
(a) The Parties each acknowledge and agree that the inability or failure by the
Agency to fully and timely complete the Transit Obligations required by the AHSC Documents
may affect the timing and right of the Developer to receive disbursement of AHSC Grants or
AHSC Loan funds notwithstanding the other party’s full and timely performance of its obligations.
If, at any time, the Developer determines in its reasonable discretion that Agency is not, or may
not, be able to comply with the Schedule of P erformance or its obligations hereunder, Developer
shall have the right, but not the obligation, to step in and take over the performance of the Transit
Obligations, by delivering written notice to the Agency (“Work Takeover Notice”).
(b) Within five (5) business days of Developer delivering the Work Takeover
Notice, Agency shall meet with Developer within fifteen (15) business days (the “Discussion
Period”) to discuss the cooperative steps to be taken by each Party for Developer to complete the
Transit Obligations in accordance with the Schedule of Performance. The Agency hereby
acknowledges and agrees that Developer’s right to step in and take over the performance of the
Transit Obligations shall be effective after the expiration of the Discussion Period, without the
necessity of any further notice or action by either party.
(c) If Developer takes over the performance of the Transit Obligations under
this Section 7, then from and after the expiration of the Discussion Period the following
provisions shall apply:
Item 6
Packet Page 97
5
(i) Developer shall be entitled to prepare and submit all draw requests
for AHSC Grant funds and apply such proceeds to pay invoices for such work.
(ii) Developer shall be responsible for the performance and completion
of the Transit Obligations in accordance with the terms of the AHSC Documents
and in accordance with the Agency's requirements for public works contracts and
construction.
(iii) Within five (5) business days following expiration of the
Discussion Period, Agency shall fully and unconditionally assign to Developer all
of the Agency’s rights and benefits under the design and construction documents,
any and all contracts, and any and all permits and approvals related to the Transit
Obligations, and shall cooperate with commercially reasonable diligence with
Developer’s efforts to complete the Transit Obligations.
(iv) Within five (5) business days following expiration of the
Discussion Period, Agency shall fully and unconditionally assign to Developer all
of Agency’s rights and benefits with respect to any and all funds which would
have been available to and used by the Agency to complete the Transit
Obligations.
(v) The terms of any assignment described in this Section 7(c) shall be
reasonably acceptable to both Agency and Developer. The Agency shall be solely
responsible for obtaining any third-party consents or approvals necessary to
implement the provisions of this Section 7(c), including but not limited to
approvals of architects, contractors, and funding sources.
(d) The parties hereto hereby agree that the Partnership shall have the right to
succeed to Developer’s rights hereunder as necessary to effectuate completion of the work under
this Section 7. Under no circumstances shall such assumption by the Partnership be conditioned
upon the assumption of the Partnership of any indemnification obligations contained herein,
provided, however, that the Partnership will assume Developer’s indemnification obligations
with respect to any subsequent breach by the Partnership under this Agreement first occurring
after such assumption.
8. Disbursement of AHSC Grant Funds. Developer and Agency agree that the
AHSC Grants for the Transit Obligations shall be reimbursed directly to Agency and that the
AHSC Grants for the HRI Improvements shall be reimbursed directly to Developer. The parties
further agree that all of the AHSC Loan funds shall be disbursed directly to the Partnership.
Notwithstanding the foregoing, if required by the AHSC Documents, the Agency shall submit to
Developer all draw requests for AHSC Grant funds for the costs associated with the Transit
Obligations and Developer shall submit such requests to HCD and disburse to the Agency any
such funds received from HCD. Agency shall apply any such proceeds received to pay the
invoices submitted in connection with the draw request.
9. Implementation Agreements. In the event a grant award is received from AHSC,
Developer and Agency recognize that each Party will need additional assurances from the other
Parties (including assurances for the Project’s lenders and investors) regarding the specific grant
Item 6
Packet Page 98
6
award before commencement of construction of the Project. The Parties agree to cooperate in
amending this Agreement and/or entering into an implementation agreements or other documents
necessary to provide reasonable assurances and indemnifications related to the disbursement of
AHSC Grant funds. The Parties recognize that any such amendments to this Agreement or
execution of additional agreements may require approval of the Agency’s Board of Directors and
the Developer’s Board of Directors.
10. Notices. Formal notices, demands, and communications between the parties shall
be sufficiently given if, and shall not be deemed given unless, dispatched by registered or
certified mail, postage prepaid, return receipt requested, or delivered by express delivery service,
return receipt requested, or delivered personally, to the principal office of the parties as follows:
Agency: City of San Luis Obispo
___________________
San Luis Obispo, CA ____
Attn:
Developer: Peoples’ Self-Help Housing Corporation,
3533 Empleo Street
San Luis Obispo, CA 93401
Attn: Ken Trigueiro
11. Events of Default. The occurrence of any of the following events shall constitute
an Event of Default under this Agreement:
(a) A Party fails to perform any of its obligations under this
Agreement, and does not cure such failure within 30 days after written notice of such failure has
been delivered to the defaulting party in accordance with Section 3 above; or
(b) A Party purports to revoke this Agreement or this Agreement
becomes ineffective for any reason.
12. Termination. This Agreement shall terminate upon the earlier of: (i) completion
of the all obligations under the AHSC Documents; or (ii) mutual agreement of the parties hereto.
13. Third Party Beneficiary. The Partnership shall be a third party beneficiary of this
Agreement and shall be entitled to the rights and benefits hereunder and may enforce the
provisions hereof as if it were a party to this Agreement.
14. Assignment. Agency hereby acknowledges and approves the assignment by
Developer and the Partnership to the Housing Project’s senior lender (“Construction Lender”) of
all of their respective right, title and interest in, to and under the Agreement (the “Collateral”) as
collateral security for the Partnership’s obligations to Construction Lender under, and in
connection with Construction Lender’s loan to the Partnership. In the event Construction Lender
forecloses upon the Collateral, Agency hereby agrees that Construction Lender shall have all of
Developer’s rights and interests under the Agreement. Construction Lender is hereby made an
express third party beneficiary of this Section 13, and the parties hereto shall not amend, modify
or terminate the Agreement without Construction Lender’s express written consent.
Item 6
Packet Page 99
7
15. Miscellaneous.
(a) Nothing in this Agreement shall be construed to limit any claim or right
which any party may otherwise have at any time against an Indemnitor or any other person
arising from any source other than this Agreement, including any claim for fraud,
misrepresentation, waste, or breach of contract other than this Agreement, and any rights of
contribution or indemnity under any federal or state environmental law or any other applicable
law, regulation, or ordinance.
(b) If any party delays in exercising or fails to exercise any right or remedy
against a Party, that alone shall not be construed as a waiver of such right or remedy. All
remedies of any Party against the other Party are cumulative.
(c) This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective representatives, heirs, executor, administrators, successors,
and assigns. This Agreement may not be amended except by a written instrument executed by
the parties hereto.
(d) This Agreement shall be deemed to have been delivered and accepted in
the State of California and governed exclusively by the internal substantive laws of the State of
California as the same may exist at the date hereof. The parties hereto hereby agree that any
action hereon between the parties hereto and their successors in interest may be maintained in a
court of competent jurisdiction located in the State of California, and consent to the jurisdiction
of any such California court for the purposes connected herewith.
(e) Each party hereto intends that this Agreement shall not benefit or create
any right or cause of action in or on behalf of any person other than the parties hereto.
(f) This Agreement may be executed in multiple counterpart copies, any one
of which when duly executed, with all formalities hereof, shall be fully binding and effective as
the original of this Agreement.
(g) This Agreement shall be effective as of the date first written above,
provided however that in the event that the parties do not receive an award of the AHSC
Financing, this Agreement shall automatically terminate and be of no further force or effect.
[Signatures on following page]
Item 6
Packet Page 100
8
Each of the undersigned hereby executes this Agreement in the spaces provided below to
evidence their respective agreement to the terms of this Agreement.
Agency:
By: ________________________________
Name: ________________________________
Its: ________________________________
Developer:
Peoples’ Self-Help Housing Corporation,
a California nonprofit public benefit corporation
By: ________________________________
Name: ________________________________
Its: ________________________________
Item 6
Packet Page 101
Page intentionally left
blank.
Item 6
Packet Page 102