HomeMy WebLinkAbout12/06/1988, C-7 - APPROVAL OF LOAN FUNDING FOR LOW-INCOME HOUSING IN THE SAN LUIS HOTEL AT 647 HIGUERA STREET. city of I��hll�lll��l�llllllllllll�ulll
Ipui�u� san lues oBIspo N99
ATE:
COUNCIL AGENDA REPORT ITEM NUMBE .
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FROM: Michael Multari, Community Development Director By: Terry Sanville
SUBJECT: Approval of Loan Funding for Low-Income Housing in the San Luis Hotel at
647 Higuera Street.
CAO RECOMMENDATION:
Adopt a resolution approving an agreement providing $60,000 in loan funding for the
construction of four apartments for low income people in the San Luis Hotel.
BACKGROUND
On September 16, 1986 the City Council approved a permit to partially convert the second
floor of the San Luis Hotel to non-residential use (CV 1274). As a condition of the
conversion permit, the council stipulated that:
(1) At least four apartments be provided and made available through the federal
Section 8 rental assistance program;
(2) The city staff and applicant draft an agreement that provides city financial
assistance for the creation of the Section 8 dwellings;
(3) The source of the city funding will be the block grant loan funds (pay back from
the 1980 Park Hotel project); and
(4) The agreement must be approved by the property owner and the City Council.
The city and housing authority staff have worked with the property owners to complete a
draft agreement (attached). The agreement describes the terms and extent of city loan
assistance and incorporates Section 8 housing assistance requirements. In developing
this agreement, the staff required the applicant to demonstrate that the funding
requested was necessary to make the housing project financially feasible.
The applicant has submitted architectural plans for the residential units and the
building division„as completed its review. Permits are ready for issuance pending the
execution of the financial assistance agreement.
SIGNIFICANT IMPACTS
There are approximately $80,000 in the city's block grant account. These funds are
program income from a federal grant the city received in 1980. The owners of the San
Luis Hotel request a loan of $60,000: the interest rate would be 3%; loan payments would
be amortized over a 30 year period; payments on the principal would be deferred for the
first five years; the loan would be fully due 15 years from loan origination.
No other city funding would be required for this project. The project will result in the
city's achieving a general plan objective of retaining housing in the downtown and
providing housing opportunities for low income people. Use of the funds for the purpose
of housing rehabilitation is the downtown is consistent with the objectives of the 1980
Block Grant program.
II����►�►I►IViINIp�p ��N MY of sarl LUIS OBISp0
COUNCIL AGENDA REPORT
CONSEQUENCES OF NOT TAKING ACTION
Without city funding support, constructing four new apartment units is not financially
feasible — eg. may result in a net income loss to the property owner. Without city
funding assistance, the property owner might seek relief from restrictions of the
conversion permit or leave the second story of the building unused if conversion to
non-residential use is not permitted.
Attachments Draft Resolution
Letter from Keith Gurnee
Loan Agreement
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RESOLUTION NO. (1988 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING AN AGREEMENT BETWEEN THE CITY AND CROWN PROPERTIES
THAT PROVIDES LOAN FUNDS TO CROWN PROPERTIES FOR THE PURPOSE OF
CREATING FOUR ASSISTED DWELLING UNITS IN THE SAN LUIS HOTEL
(647 Higuera Street)
WHEREAS, in its approval of Downtown Housing Conversion Permit CV 1274 the City
Council offered financial assistance to Crown Properties for the creation of four
dwelling units for low or moderate income people in the San Luis Hotel; and
WHEREAS, Crown Properties have requested that the city provide $60,000 as a
low-interest, deferred loan in return for creating four dwellings to be rented at terms
consistent with the federal Section 8 housing program or its equivalent, and
WHEREAS, a current balance of $80,700 is available in the City's Security Pacific
Money Market Account to support this loan request.
WHEREAS, the City Council has reviewed the agreement for loan assistance with Crown
Properties and finds it consistent with CV 1274 and with the General Plan.
NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:
SECTION 1. The agreement attached hereto marked Exhibit "A" and incorporated herein
by reference between the City and Crown Properties is hereby approved and the Mayor is
authorized to execute the same.
SECTION 2. The City Finance Director is authorized to transfer $60,000, consistent
with terms specified in Exhibit A, from its Security Pacific Money Market Account No.
066-032-691.
SECTION 3. The City Clerk shall furnish a copy of this resolution and a copy of the
executed loan agreement to the City Finance Director, Community Development Director, and
Crown Properties.
On motion of Councilperson . seconded by Councilperson
and on the following roll call vote:
Resolution No. (1988 Series)
Page 2
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this _ day of November, 1988.
MAYOR Ron Dunin
ATTEST:
CITY CLERK
Pamela Voges
APPROVED:
CI ADMINISTRATIVE OFFICER
John Dunn
CITY A OR Y
Roger Pi 43
COMMUNITY DEVELOPMENT DIRECTOR
Michael Multari
R R M D E S 1 G N G R O U P
November 22, 1988
Mr. Mike Multari
Director, Planning Department
City of San Luis Obispo
P.O. Box 8100
San Luis Obispo, CA 93403-8100
Subject: San Luis Hotel
Dear Mike:
Well , it's finally happened!
At long last, we hereby forward the documents executed between Crown
Properties Limited (my clients) and your staff for CDBG loan funds to
assist in the construction of 4 dwelling units in the San Luis Hotel
building located at the corner of Higuera and Broad Streets in San
Luis Obispo.
As you know, it was a condition of our use permit to allow office
uses to be located on the second floor to provide at least 4 housing
units on that same second floor. We have now completed the long and
arduous process of designing these housing units, having our plans,
construction documents, and financing reviewed and approved by the
City Planning and Housing Authority staffs, and negotiating and
executing the paper work for the CDBG loan documents.
We wish to thank the staff of the Planning Department and the Housing
Authority for their patient cooperation and expert assistance
throughout this process. With the Council approval of this loan,
another success of the City' s CDBG Downtown Housing Conservation
Housing Program will be assured. .
If you have any questions regarding these documents or the plans,
please don't hesitate to give me a call .
Sincerely,
RRM DESIGN GROUP
T. Keith Gurnee
Senior Vice Pr . ident
Planning Divi on
Enclosures
A17/KG-SLHOTEL
DOWNTOWN HOUSING CONSERVATION PROGRAM
REHABILITATION LOAN AGREEMENT
(Rentals)
THIS AGREEMENT is made and entered into this 22nd day of
November , 1988, at San Luis Obispo , California
by and between the City of San Luis Obispo, hereinafter "City" and
Crown Properties, hereinafter "Borrower", whose address is 1026 Palm
Street, San Luis Obispo CA 93401.
The following is basic information affecting the loan herein:
(a) Borrower is the owner of rental units to be rehabilitated by
proceeds from the loan that is the subject of this
agreement.
(b) The property to be rehabilitated is at:
_6.97 Hicuera Street , San Luis Obispo
(Address) (City)
San Luis Obispo
(County)
The legal description of the property is as follows:
Space D of Parcel I-lap SL87-114
(c) The total number of housing units in the structure after
rehabilitation is four.
The following definitions shall apply herein:
a. "Local Fund" shall mean the City's Rental Rehabilitation
fund.
b. "Lower Income" shall mean that a household's gross income is
less than 80% of the area median income.
C. "Owner" is an owner of a rental property of one or more
units.
d. "The Property" shall refer to the real property to be
rehabilitated with the loan agreed to herein.
e. "Provider" shall refer to any person or entity providing
services or materials in furtherance of rehabilitation or
repairs pursuant to this Agreement.
f. "Rental Assistance Agreement" is an agreement between the
City and the Borrower to rent the dwelling units to people
with low or moderate incomes for a specified period of time
(Attachment B) . d�71
Page 2
All terms shall have the meanings set forth in Title 25, California
Administrative Code Section 7402.
1. GENERAL TERMS
A. Borrower agrees to indemnify, defend and save harmless the
City, their officers, agents, and employees from any and all claims
and losses accruing or resulting to Borrower or any and all
contractors, sub-contractors, material men, laborers and any other
person, firm, or corporation furnishing or supplying work, services,
or supplies in connection with the performance of this Agreement, and
from any and all claims and losses accruing or resulting to any
person, firm, or corporation who may be injured or damaged by
Borrower in the performance of this Agreement.
B. Borrower, and any agents and employees of Borrower, in the
performance, of this Agreement, shall act in an independent capacity
and not as officers or employees or agents of the City.
C. Without the written consent of City, this Agreement is not
assignable or transferable by Borrower either in whole or in part.
Such consent shall not be unreasonably withheld.
D. Time is of the essence in this Agreement.
E. No alteration or variation of the terms of this Agreement
shall be valid unless made in writing and signed by the parties
hereto, and no oral understanding or agreement not incorporated in .
writing herein, shall be binding on any of the parties hereto.
F. The City will subordinate this loan to other loans.
The total loan to value debt ratio will not exceed 80% of
the entire building at any time when property is refinanced.
2. . PURPOSE
Borrower and City agree that funds will be expended pursuant to
this Agreement only for the purposes, activities, and amounts which
. have been set forth in detail and approved by Local Lender and
Borrower. Borrower further agrees to solicit and rent to renters in
accordance with the Rental Assistance Agreement and by the terms of
this Agreement.
3. AMOUNT AND DISBURSEMENT SCHEDMZ
Upon the proper execution of a promissory note and the
appropriate security instruments and required supplemental documents,
City agrees to commit to Borrower funds not to exceed the total
amount stated in Item I of Attachment "A" and to disburse said funds
as hereinafter set forth only for the purposes and amount approved
pursuant to the promissory note.
Page 3
4 . INTEREST
The loan herein shall bear simple interest at the rate set forth
in Item II of Attachment "A" on the principal balance of loan funds
disbursed to the Borrower. Payment of said interest shall be due
monthly until repayment of the loan to City is complete, and shall
accrue from the time of disbursal to Borrower until receipt of
repayment by City. Beginning with the due date of the 61st payment,
principal payments will also be due monthly along with said interest
payments.
S. TERM
A. The effective date of this Agreement is the date on which it
is approved by City after execution by Borrower.
B. This Agreement shall be binding on the Borrower and
successors in interest for the full term of the loan regardless of
sale, transfer or repayment.
C. Borrower agrees rehabilitation is to be completed within the
period stated in Item III a of Attachment "A" and to complete
performance of all other obligations under this Agreement, including
repayment, within the period(s) stated in Item III b of Attachment
"A".
6. PROMISSORY NOTE AND SECURITY
A. In order to evidence its debt to City hereunder, Borrower
agrees to execute and deliver to City, a promissory note for the
total loan amount in a form approved by City.
B. In order to secure the loan, Borrower shall give City the
security interest(s) specified in Item IV of Attachment "A". Such
documents shall adequately secure the loan and may include a Deed of
Trust, pledges of cooperative shares, or other documents related to
the property to be rehabilitated in whole or in part with funds from
the Local Fund. City shall cause such security interest(s) to be
. recorded and all such documents shall be specifically assignable to
the City of San Luis Obispo.
C. The Borrower shall obtain a Preliminary Title Report and a
standard CLIA title insurance policy for the security property, or
other such policy approved by the City, insuring the interest of City
as lender in said property.
D.
The City will subordinate this loan
to other loans:: - •s -• The total loan to value debt ratio will
not exceed 8o$ of the entire building at any time when property is
refinanced.
Page 4
7. ACCOUNTING AND DISBURSALS
A. Borrower and City agree to maintain records that accurately
and fully show the date, amount and purpose of the loan funds.
B. Borrower agrees that City will disburse funds pursuant to
this Agreement in one payment to Borrower; and they may incorporate
any other procedures commonly used by a reasonable and prudent lender
or agency administering a rehabilitation program. Special conditions
are set forth in Item V of Attachment "A".
8. GENERAL TERMS OF THE LOAN
A. In the performance of this Agreement, Borrower agrees not to
discriminate against any provider, renter or potential provider or
renter, because of race, color, religion, ancestry, sex, age,
national origin, physical handicap or on any other arbitrary basis,
and shall permit access to records, bids, application forms, and
other pertinent data and records by an appropriate agency of the City
for the purposes of ascertaining compliance with this section.
B. Borrower shall promptly notify City if real estate taxes and
assessments are .in default, or if liens or loans against the property
are not paid. Borrower shall promptly notify City if any default in
any payment takes place which affects title or ownership of the
property.
n
C. Borrower agrees to keep the subject property covered under a
policy of hazard insurance at all times.
D. Borrower shall promptly comply with all requirements or
conditions of this Agreement relating to notices, extensions, and
other events required to be reported or requested.
E. Borrower shall cooperate with City, providers, inspectors and
others who have an official capacity in the rehabilitation of the
property which is the subject of this Agreement and shall sign
necessary documents to permit the rehabilitation of the property,
including, but not limited to, releases of funds to the provider when
satisfied with the work accomplished. The Borrower shall execute a
Notice of Completion and shall cause suchnotice to be recorded
within ten days of completion of rehabilitation. Borrower shall
provide City a copy of the recorded document.
F. Borrower and City shall cooperate in furtherance of
authorized expenditures and activities for rehabilitation, selection
of providers, prompt payments of providers, resolution of any
disputes as to rehabilitation work done or to be done, and compliance
with other rehabilitation regulations and rental obligations pursuant
to this Agreement.
Page 5
G. During the term of this Agreement, Borrower agrees to limit
rents and rent increases in the subject property and to rent to
tenants in accordance with the Rental Assistance Agreement, attached
hereto and incorporated herein as Attachment "B".
H. Borrower shall submit true and complete rents, operating
expenses, debt service, tenant information schedules, and other
necessary information to City upon request for a loan.
I. Borrower agrees to use a lease which conforms to California
law or any other lease subject to the approval of City. Borrower
additionally agrees to comply promptly and fairly with
responsibilities under law and as set forth in the lease, and to make
every effort feasible to ensure the stability and security of
tenants. Borrower and City agree that if, after a residency begins,
a tenant's income exceeds the standard pursuant to which the tenant
was accepted for tenancy, that fact alone shall neither cause the
tenant's eviction nor be a violation of Borrower's obligations under
this Agreement.
J. The loan herein shall be due at the time statedin Item III b
of Attachment "A" or upon any sale or transfer of the subject
property*other than a transfer to a spouse',`aue to death or
dissolution, whichever occurs first. The loan may be assumed after
transfer if the transferee takes the property subject to the
restrictions of this Agreement, subject to the approval of City
before transfer. Such approval shall not be unreasonably withheld.
R. Notwithstanding subparagraph J', City may extend this loan
agreement and the due date of the Promissory Note for no more than
four additional five-year terms if City reasonably determines that
low-income occupant households will continue to receive affordable
rents and otherwise benefit from residency in the rehabilitated
units. City will only renew such loans for one five-year term at a
time unless multiple five-year periods are essential to the
feasibility of continuing benefits to low-income households. Such
extensions shall require prior City approval before becoming
effective. Borrower shall request such an extension at least two
.months prior to the due date of the loan.
L. Replacement Reserve Account for Project of Four or More
Units. The borrower shall establish a replacement reserve account on
it's books for the project. An amount not less than $ 180.00 per
quarter shall be creditedto this account. This account shall be a
liability on the .books.
M. The City will subordinate this loan to other loans.
The total loan to value debt ratio will not exceed 80% of
the entire building at any time when property is refinanced.
*unless assumed
**heir or beneficiary
Page 6
9. REPAYMENT
A. Any funds disbursed hereunder shall be repaid promptly to
City no later than the date specified in the promissory note executed
pursuant to Paragraph 3.
B. Borrower agrees that neither failure to obtain any required
permits, necessary subsidies, services, or financing, nor any other
cause, releases the Borrower from its debt to City.
C. The Borrower may repay the entire .amount of the loan at any
time before it becomes due without a penalty for repayment. However,
all terms of this Agreement' shall remain binding for the original or
extended term of the loan.
D. No less than 60 days before any sale or the expiration of the
term of the loan, Borrower agrees to notify City of requests for
extensions, exemptions from repayment or proposed assumptions, if
appropriate.
10. DEFAULT
A. Borrower covenants that all material facts and statements
provided by the Borrower in conjunction with this loan, and relied
upon by City in agreeing to make this loan, are true and complete to
the best of Borrower's knowledge, and any misrepresentation shall be
just cause for City to declare this Agreement to be breached and the
loan in default.
B. In the event Borrower, for any reason, is unable to or
otherwise does not proceed with the rehabilitation activities
approved by City, City may declare this Agreement to have been
breached and both parties shall be released from any further
Performance hereunder.
C. In the event of any default or breach of this Agreement by
the Borrower, Borrower shall have 30 days from notice of default or
breach to rectify same. If substantial progress is not made in that
.time, City may declare the note evidencing the loan to be immediately
due and payable.
11. REPORTING
Subsequent to the completion of rehabilitation activities, and
until termination of this Agreement, on a form and at a time provided
for by City, at least once each year, Borrower shall provide such
information requested with respect to occupancy, fiscal status,
rents, operations, maintenance, and other relevant items.
d-� r-11
Page 7
12. RECORDS AND DOCUMENTS
Borrower and City agree to retain copies of all records related
to use of funds pursuant to this Agreement for a period of one year
following the repayment of the loan, and to forward copies or
originals, when required or requested, to City. Such records and
documents shall be made available for City inspection at any time
during or after rehabilitation after reasonable notice is given.
13. INSPECTIONS
Borrower agrees to grant City permission, and to obtain
occupant's permission in each instance, to enter and inspect
properties and units subject to this Agreement at any time during or
after rehabilitation. City is aware that Borrower must comply with
California law and that occupant can deny permission to enter for
inspection.
14. GOVERNMENTAL CLEARANCES
To the extent necessary, Borrower shall satisfy City that all
requirements of local, state or federal law and ordinances have been
fulfilled and that all appropriate permits have been obtained when
required for local rehabilitation activities. Satisfaction of the
requirements of this paragraph shall be preconditions for any
disbursal of funds hereunder.
15. LOCAL LENDER COORDINATOR
The City Coordinator for this Agreement is set forth in Item VI
of Attachment "A".
16. MEMORANDUM OF REHABILITATION LOAN AGREEMENT
The Borrower agrees to execute the Memorandum of Rehabilitation
Loan Agreement (Attachment C) , and the City shall have such
memorandum recorded at the time of loan closing.
• 17. SPECIAL CONDITIONS
In addition to the general provisions of this Agreement, the
special conditions set out in Item VII of Attachment "A" must be
satisfied in a manner specified by or acceptable to City.
Page 8
Date
B r wer 4
Date
Borrower
Date
city
By.
• NO.201
GENERAL ACKNOWLEDGMENT
State of ("A t.I F n2 M I P On this the aa day of AIO Jt:vn(3E I[. 19ff—,before me,
County of Sn N aj :ht-�p� o I F Sh u
the undersigned Notary Public,personallypeared
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A'•• NOTAFIV PiAftiu ❑ proved to me on the basis of satisfactory evidence
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SM Luk8 62 spo L•Cu:ITY to be the person(s)whose name(s)
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gALIFORNIA
h �A _executed it.
MY Comms jW s on Nov.30,1990 within instrument,and acknowledged that
WITNESS my hand and official seal.
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Notary's Signature
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STATE OF WIFOBIUA I
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in the year , before the I
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personally appeared
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toe to be the person who eaectsted the within instrument on behalf
political subdivision,, and acknowledged to toe that i.
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executed the same.
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ATTACHMENT "A"
I. (Paragraph 3. ) Amount of Loan: S 60. 000.00
(----Sixty thousand and no/100--------------------------Dollars)
II. (Paragraph 4. ) Simple Interest Rate ---three----- percent 3
III. (Paragraph 5. ) Term of Agreement:
a. Rehabilitation is to be commenced by December 1. 1988
and completed by June 1. 1989
b. Repayment of the loan is due on June 1. 2004
IV. (Paragraph 6. ) Security Interest(s) :
Deed of trust on residential property at 697 Higuera Street
San Luis Obispo, California 93401
V. (Paragraph 7. ) Accounting and Disbursal Terms:
Funds will be disbursed in one lump sum on June 1, 1989
VI. (Paragraph 16. ) Local Coordinator: Terry Sanville
Name
Principal Planner
Title
VII. (Paragraph 18. ) Special Conditions:
Should the construction be completed and a Certificate of
Occupancy issued for the units, the City will disburse the funds
prior to June 1st. Interest charges will, not accrue until the
June 1, 1989 date in this occurance.
Attachment "B"
DOWNTOWN HOUSING CONSERVATION PROGRAM
CITY OF SAN LUIS OBISPO, CALIFORNIA
RENTAL ASSISTANCE AGREEMENT
This agreement entered into this 22nd day of November 1988,
by and between the City of San Luis Obispo, hereinafter referred to
as "City", and Crown Properties, hereinafter referred to as "owner" .
It is mutually agreed by the parties hereto as follows:
I. Crown Properties is owner of the real property located in the
City of San Luis Obispo, County of San Luis Obispo, California,
described as follows:
Space D of Parcel Map SL87-114
II. Owner agrees that the following conditions and restrictions on
the described property shall inure and bind the heirs, legatees,
devisees, administrators, executors, successors and assigns of
the parties hereto:
a. The owner agrees to rent, as vacancies occur, all rental
units located on the property to a certified Section 8
Housing Assistance Payments Program Tenant for the remaining
length of the agreement. The owner shall rent to such
qualified applicant(s) of such unit(s) without rejecting any
except for just and reasonable cause. The initial rent of
such unit(s) shall not exceed the fair market rent ceilings
as determined by the Department of Housing and Urban
Development for the City of San Luis Obispo's Section 8
Existing Housing Assistance Payments Program, in effect at
the time the tenant takes occupancy of the unit.
b. The owner agrees to contact the Housing Authority of the
City of San Luis Obispo (487 Leff Street, P.O. Box 638, San
Luis Obispo, CA 93406) prior to any rental increases to
determine if the adjustments are in accordance with the
annual adjustment factor published by the Department of
Housing and Urban Development each year.
c. The owner agrees to notify the Housing Authority of the City
of San Luis Obispo of a vacancy in the qualified unit(s) .
Following such notification, the Housing Authority shall
refer qualified persons to the owner for a period of thirty
(30) days, or until notified that the vacancy no longer
exists. The Housing Authority will cooperate with the
owners to fund qualified applicants on it's waiting list.
If no Section 8 Applicants are available and qualified to
d- 5 /4f
Rental Assistance Agreement
Page 2
occupy the unit(s) ,then Borrower agrees to rent such unit(s)
to persons or households with adjusted income not in excess
of 80% of the area median income, as established by the U.S.
Department of Housing and Urban Development (HUD) , at a rent
not greater than 30% of such income, provided that such
rents may be adjusted to the extent necessary to meet debt
service on the subject properties and any increased costs of
operation and maintenance of the properties, with the
approval of City. The method of determining and documenting
the need for such increases shall be at the reasonable
discretion of City. In every case of a proposed rent
increase, the tenant or tenants affected by such increase
shall receive written notice, at least 30 days prior to the
proposed date of such increase, of the amount of the
proposed increase and the justification therefor. In no
case shall the rent exceed the fair market rent limitations
established under the Section 8 Existing Housing
Regulations.
d. If persons meeting the criteria are not available, then
Borrower may, after 90 days, appeal to the City Council for
a waiver of this provision based on a demonstrated inability
to find qualified tenants. The appeal shall be on a case-
by-case basis. In no case shall the rents exceed the
Section 8 Fair Market Rents.
e. The owner agrees to make the rental unit(s) available to
persons of low income under any successor rent subsidy or
funding program available to or administered by the Housing
Authority of the City of San Luis Obispo.
f. The obligations of this agreement shall remain in full force
and effect for so long as the deferred payment loan, or any
portion thereof, remains outstanding.
g. Borrower acknowledges that should rents in excess of those
permitted by this agreement and approved by City be charged,
this will be cause for appropriate action by City, including
but not limited to, declaring a default and accelerating
repayment of the deferred payment loan, requiring repayment
of excess rentals to tenants, seeking an injunction against
any violation of the agreement, requesting judicial
appointment of a receiver to take over an operate the
property in accordance with the terms of this agreement, or
seeking such other relief as may be appropriate. The injury
to local lender arising from a default under any of the
terms of this agreement would be irreparable and the amount
of damage would be difficult to ascertain.
(2-
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Rental Assistance Agreement
Page 3
h. The provisions of this agreement are in addition to, and do
not alter, modify, or set aside in any respect the
provisions of the loan agreement, promissory note or deed of
trust or similar instrument securing the deferred payment
loan.
i. These conditions and restrictions shall expire on June 1st.
2004 unless extended through mutual agreement
of both parties.
II. The parties agree that this agreement is entered into as part of
and in consideration of a Community Development Department Block
Grant Rehabilitation Loan, administered by the City of San Luis
Obispo and shall be recorded.
CITY OF SAN LUIS OBISPO
B . G'1���Z; LIz � _ �I
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Owner
ALL SIGNATURES MUST BE NOTARIZED
GENERAL ACKNOWLEDGMENT NO.201
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State of C ALIS 0e0l A On this the 2t�day of �0 VES F. 19W,before me,
LL SS.
Countyof art� LUr1LD/5� _rF1�1y �_�
the Eun�d'e�rs_ignerdNotary Public,Dp�er�pnallyappeaz�p�� T
T�6Fr:; 0. r'IAY A_)P&j0 � AMI) ANNA L . JkASO�
NCT:15y PUBLIC
tid SAN LL':S C71SP0 COUNTY
CALIFORNIA Personal ly known to me
My commission Expires on Nov.30.1990 O proved tome on the basis of satisfactory evidence
to be the person(s)whose name(s) O!a le r subscribed to the
within instrument,and acknowledged that -*-he t _executed it.
WITNESS my hand and official seal.
Notary's Signature
-- - - - - -- --- ----
rn0/12 NATIONAL NOTARY ASSOCIATION•29012 venture Blvd.•P.O.Box eats•woodumd NIOa.CA 91364
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ATTACHMENT "C"
DOWNTOWN HOUSING CONSERVATION PROGRAM
PROMISSORY NOTE SECURED BY DEED OF TRUST
(LOCAL LENDER/BORROWER)
(Rentals)
$ 60, 000.00 Borrower Crown Properties
Loan No. 1988-1 Date November 22 1988
FOR VALUE RECEIVED, the undersigned (hereinafter "Borrower") , jointly
and severally, promise(s) to pay in lawful money of the United States
to the order of the City of San Luis Obispo, or its successor or
assignee at its principal place of business at 990 Palm Street,
San Luis Obispo, California, or at such other place as City may
designate, the principal sum of Sixty thousand and no/100
1560, 000.00) Dollars, together with interest on unpaid principal at
the rate of three (3.00) percent per annum, calculated on the basis
of the actual number of days the unpaid principal balance is
outstanding divided by a 360-day year. FROM June, 1. 1989, interest
shall be paid monthl in installments of One Hundred Fifty and no/100
15150.00) Dollars, each payable on the first day of each month
commencing on July 1, 1989, and continuing until June 1. 1994, after
which time principal and interest shall be paid monthly in
installments of Two Hundred Fifty Two and /loo (S252 96) Dollars,
each payable on the first day of each month commencing July 1. 1994,
and continuing until June 1, 2004, when all unpaid principal and
interest shall be paid in full.
It is further provided that the entire outstanding balance including
any interest, is due and payable in 15 years from the date of this
notes execution or upon voluntary or involuntary transfer of title,
contract to sell, sale of the secured property, or any interest
therein, whichever is earlier. If a transfer is to a spouse or heir
or beneficiary due to death or dissolution of Borrower, such a
transfer does not require immediate repayment. The transferee or
buyer of the secured property may assume the obligations of this note
upon written approval of City or its successor or assignee, approval
not being unreasonably withheld, and if such transferee or buyer
agrees to comply with all terms of the Loan Agreement referred to
herein. A transfer shall not include a junior encumbrance or lien.
With the approval of the City, approval not being unreasonably
withheld, a transferee or buyer meeting the same eligibility
requirements as Borrower may assume the Loan evidenced by this note
and all terms and obligations thereof.
The indebtedness evidenced by this note is made pursuant to a Loan-
Agreement between Local Lender and Borrower and is secured by a Deed
of Trust dated November 22 , 1 19 88 .
1. Borrower hereby represents and warrants to City, and covenants,
as follows:
Promissory Note
Page 2
a. The execution, delivery, and performance pursuant to this
note are not in contravention of law or any indenture,
agreement, or undertaking to which Borrower is a party or by
which it is bound and the same are within Borrower's powers
and have been duly authorized and are not in contravention
of any source of Borrower's authority.
b. Borrower has, or at the time of execution, delivery, and
performance of this note, will have, lawful right to the
security and has an unqualified right to assign and grant
liens and security interests to the City therein.
c. All information furnished by Borrower to City concerning the
security is and will be complete, accurate and correct in
all material respects at the time the same is furnished.
d. The security is, and for so long as any of Borrower's
obligations to City remain unpaid, will remain, free of any
subsequent liens, charges, security interests, encumbrances,
and adverse claims, except for the benefit of Local Lender
and as provided in the Loan Agreement between Borrower and
City, referred to above, which includes subordination.
2. On the occurrence of any event of default, Local Lender at its
sole election, after 30 days written notice to Borrower, may
declare all or any portion of the principal and accrued interest
on this note to be immediately due and payable and may proceed
thereafter at once without further notice to enforce this note
according to law. The prevailing party agrees to pay all
reasonable collection costs.
3. Each of the following occurrences shall constitute an event of
default: (1) Failure of the Borrower to repay any principal and
interest when due under the terms of this note or to obtain an
extension thereof at the time, place and manner specified in
said Loan Agreement; (2) Termination of said Loan Agreement
pursuant to the terms thereof or breach by the Borrower of any
terms of said Loan Agreement; (3) Failure of the Borrower to
undertake in a timely way the express and implied activities for
which said Loan Agreement has been executed or a substantial
reduction by the Borrower in the scope of said activities; (4)
Occurrence: (a) of the Borrower's becoming insolvent or bankrupt
or being unable or admitting in writing its inability to pay its
debts as they mature or making a general assignment for the
benefit of or entering into any composition or arrangement with
creditors; (b) of proceedings for the appointment of a receiver,
trustee, or liquidator of the assets of the Borrower or a
substantial part thereof, being authorized or instituted by or
against the Borrower; or (c) of proceedings under any
bankruptcy, reorganization, readjustment of debt, insolvency,
dissolution, liquidation or other similar law of any
Jurisdiction being authorized or instituted against the
Borrower.
Promissory Note
Page 3
4. No delay or failure of Holder in the exercise of any right or
remedy hereunder or under any other agreement, which secures or
is related hereto, shall affect any such right or remedy, and no
single or partial exercise of any such right or remedy shall
preclude any further exercise thereof, and no action taken or
omitted by Holder shall be deemed a waiver of any such right or
remedy.
5. Each maker, endorser, surety, and guarantor of this note hereby
severally waives demand, protest, presentment, notice of non-
payment, notice of protest, notice of dishonor, and diligence in
bringing suit against any party and does hereby consent that
time of payment of all or any part of said amount may be
extended from time to time by the Holder hereof without notice.
6. Any notice to the Borrower provided for in this note shall be
given by mailing such notice by certified mail addressed to the
Borrower at the address stated in the Loan Agreement, or to such
other address as the Borrower may designate by written notice to
the City. Any notice to the City shall be given by mailing such
notice by certified mail, return receipt requested, to the City
at the address stated in the Loan Agreement, or at such other
address as may have been designated by written notice to
Borrower.
7. If suit is brought to collect on this Note, the prevailing party
shall be entitled to collect all reasonable costs and expenses
of said suit, including reasonable attorney's fees.
8. This note shall be binding upon the Borrower and its successors
and assigns and upon the City and its successors and assigns.
9. The note shall be construed and enforced in accordance with the
laws of the State ,off California.
Signed:
Borrower
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