HomeMy WebLinkAbout02-16-2016 Item 06 Housing Authority Request to reassign and extend lease for City owned property located at 1090 and 1092 Orcutt Road and 1105 Laurel Lane
Meeting Date: 2/16/2016
FROM: Michael Codron, Community Development Director
Prepared By: Jenny Wiseman, Planning Technician
SUBJECT: HOUSING AUTHORITY REQUEST TO REASSIGN AND EXTEND LEASE
FOR CITY OWNED PROPERTY LOCATED AT 1090 AND 1092 ORCUTT
ROAD, AND 1105 LAUREL LANE.
RECOMMENDATION
1. Approve and authorize the City Manager to execute an Assignment and Assumption of Lease
Agreement for City owned property located on Orcutt Road from Laurel Creek Apartments,
LP to the Housing Authority of the City of San Luis Obispo;
2. Approve and authorize the City Manager to execute an Amended and Restated Ground Lease
with the Housing Authority extending the lease agreement for an additional seventy five
years.
DISCUSSION
Background
On April 29, 1991 the City executed a fifty-five year lease with the Housing Authority of the
City of San Luis Obispo (the “Housing Authority”) to construct and operate rental housing,
affordable to low income seniors and the disabled residents, on City owned property located at
1090 and 1092 Orcutt Road, and 1105 Laurel Lane. The City in turn, agreed to lease the property
for such purpose for $1 per year (Attachment E, Original Agreement).
The Housing Authority then requested to assign their interest in the original Lease Agreement to
their affiliate, the San Luis Obispo Non-Profit Housing Corporation. The lease was transferred
on December 1, 1992; the Housing Authority then applied for, and successfully received, $1.2
million in low income housing tax credits to finance the proje ct (Attachment F, First Assignment
of Agreement). In 1994, the Housing Authority completed Marvin’s Gardens (now known as
Laurel Creek Apartments) a twenty-four unit housing development dedicated to low-income
residents.
Shortly after completion, the Housing Authority finalized financing arrangements and reassigned
the lease for the property from the San Luis Obispo Non-Profit Housing Corporation to Laurel
Creek Apartments, a California Limited Partnership (Attachment G, Second Assignment of
Agreement). This lease transfer was necessary so the Housing Authority (via San Luis Obispo
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Non-Profit Housing Corporation) could collect the $1.2 million in tax credits and secure the
mortgage.
Lease Reassignment
Laurel Creek Apartments, LP is now requesting the lease be reassigned from Laurel Creek
Apartments, LP back to the Housing Authority (Attachment A, Amended and Restated Ground
Lease). A new lease document has been prepared for this reassignment as the previous lease
document was over twenty years old and updated language was necessary based on current tax
credit underwriting requirements. This lease reassignment will allow the Housing Authority to
apply for low-income housing tax credits to acquire the property from the current Limited
Partnership, and to then rehabilitate Laurel Creek Apartments (in addition to two other affordable
housing complexes in the City of San Luis Obispo). The property is in need of approximately
$984,000 ($41,000 per unit) in capital improvements. Should the Housing Authority be
successful in obtaining tax credits later this year, a request will be made to Council to then
reassign the Lease Agreement to a new limited partnership.
Staff has reviewed the Laurel Creek Apartments, LP request to assign the lease back to the
Housing Authority of the City of San Luis Obispo and concluded that the Housing Authority is
capable of fulfilling the terms and conditions of the lease agreement. Therefore, staff
recommends approval of the assignment so the Housing Authority can move forward with
applying for low-income housing tax credits to rehabilitate and preserve the 24 affordable
dwelling units.
Lease Extension
Under California law, the affordable restricted period for tax credit projects is fifty-five years. In
order to apply for low-income housing tax credits for rehabilitation of the property, the Housing
Authority will be required to restrict Laurel Creek Apartments as affordable for a minimum of
fifty-five years. For this and other financing reasons, the Housing Authority is requesting the
reassigned lease be extended for an additional seventy-five years. Extending the lease would be
a benefit to the City as Laurel Creek Apartments would remain affordable for at least the next
seventy-five years.
Stated in Section I.B of the original Lease Agreement (Attachment E, Original Agreement), the
sole purpose of an extension under this agreement shall be to provide for the continuation of
affordable housing to lower income families. Since the purpose of extending the lease to
seventy-five years is to apply for tax credits and to secure outside financing to preserve Laurel
Creek Apartments, staff recommends approval of the lease extension. Should the needs of the
community change after the required fifty-five year tax credit affordability period, modifications
or amendments could be proposed to the Lease Agreement which would require Council
approval.
In addition, a Promissory Note has been prepared for the tax assessor appraised value of the
property to provide an additional layer of security for the City (Attachment C, Promissory Note).
The Promissory Note also provides an additional incentive to the partnership to operate the
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property in accordance with the terms of the lease. Furthermore, the Note benefits the Housing
Authority, and the future General Partner of the project, for tax credit application and equity
purposes. In the case of a default that is not cured, there is a monetary consequence (value of
note) in addition to loss of site control. However, if no event of default occurs, the Note is
forgiven in its entirety at the conclusion of the seventy five year maturity date.
FISCAL IMPACT
Approval of the lease reassignment will not result in any additional costs to the City. By
extending the lease for an additional seventy-five years, the City will not be able to sell the
property until 2091; however Laurel Creek Apartments will continue to provide much needed
affordable rental housing in the City.
ALTERNATIVES
1. Do not extend the lease agreement for seventy-five years. This option is not recommended as
that could negatively affect the Housing Authority’s chance of obtaining low-income housing
tax credits for rehabilitation of the property.
Attachments:
a - Amended and Restated Ground Lease
b - Assignment and Assumption of Lease
c - Promissory Note
d - Site Map
e - Original Agreement A-24-91-CC
f - First Assignment of Agreement to San Luis Obispo Non-profit Housing Corporation
g - Second Assignment of Agreement to Laurel Creek Apartments, LP
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Ground Lease
Laurel Creek Apartments
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AMENDED AND RESTATED GROUND LEASE
This Amended and Restated Ground Lease (this “Lease”) is made as of
_______________, 2016, by and between the Housing Authority of San Luis Obispo, a public
body, corporate and politic (the “Lessee”) and the City of San Luis Obispo, a charter municipal
corporation (the “Lessor”) (collectively, the “Parties”).
RECITALS
A. The Land (as defined below) is subject to that certain Lease Agreement
(Agreement A-24-91-CC), dated as of April 29, 1991, between the Lessee and Lessor, a
memorandum of which was recorded in the Official Records of San Luis Obispo County,
California (the “Official Records”) on September 17, 1993 as Instrument No. 1993-056148
(collectively with all amendments and assignments, the “Original Lease”). Lessee’s interest in
the Original Lease was assigned to SLO Non-Profit Housing Corporation (“SLO”) pursuant to an
assignment agreement recorded in the Official Records on November 8, 1993, as Instrument No.
1993-069666. SLO’s interest in the Original Lease was subsequently assigned to Laurel Creek
Apartments, a California Limited Partnership (“Laurel Creek”) pursuant to an assignment
agreement recorded in the Official Records on October 20, 1994, as Instrument No. 1994-
061783, and Laurel Creek’s interest in the Original Lease was then assigned back to Lessee
pursuant to an assignment agreement recorded in the Official Records on ______________,
2016, as Instrument No. ______________.
B. Pursuant to the terms of the Original Lease, Lessee’s predecessor in interest
constructed and operated a multifamily senior housing project consisting of 24 units (the
“Development”).
C. In anticipation of the future refinancing and rehabilitation of the Property, the
Parties hereto desire to amend and restate the Original Lease to modify certain terms set forth
therein, and this Lease shall supersede and replace the Original Lease in its entirety.
NOW, THEREFORE, in consideration of the promises and the respective covenants and
agreements contained in this Lease, the parties hereby agree as follows:
ARTICLE 1: DEFINITIONS
1.1. Definitions. The following terms shall have the following meanings in this Lease:
(a) “Authorized Officer(s)” shall mean any officer, director, member,
manager, employee or agent of a party that has the authority and capacity to act for or represent
such party.
(b) “Closing Date” shall mean the first date upon which (1) the Initial Rent
has been paid to Lessor, (2) Tenant has obtained the right to possess the Land pursuant to this
Lease, and (3) all other conditions under Section 3.1 of the have been satisfied (or waived by
Lessor in its sole and absolute discretion).
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(c) “Construction” shall have the meaning assigned in Section 3.1.
“Development” shall mean the Improvements and the Lessee’s leasehold interest in the Land.
(d) “Dwelling Units” shall mean the 24 units of rental housing to be
rehabilitated, leased, operated and maintained in accordance with this Lease.
(e) “Improvements” shall mean the buildings, structures (including, without
limitation, the Dwelling Units) and other improvements, including the building fixtures therein,
now or hereafter located on the Land.
(f) “Investor Limited Partner” shall mean the tax credit investor limited
partner of a tax credit limited partnership assignee of Lessee, and its successors and assigns.
(g) “Land” or “Leased Premises” shall mean the real property located at
1090 and 1092 Orcutt Road and 1105 Laurel Lane, City of San Luis Obispo, County of San Luis
Obispo, California, as further described on the attached Exhibit A.
(h) “Lease” shall mean this Amended and Restated Ground Lease between the
Lessee and the Lessor and shall include any and all amendments made to this Lease.
(i) “Lease Term” shall mean the approximately seventy-five (75)-year period
as described in Section 2.2 below during which this Lease shall be in effect unless earlier
terminated in accordance with the provisions of this Lease.
(j) “Lease Year” shall mean a period of one (1) calendar year beginning
January 1 and ending December 31. The first Lease Year shall commence on the date of this
Lease and end on the last day of the following December. The last Lease Year shall begin on
January 1 of that year and end on the last day of this Lease.
(k) “Lender” or “Lenders” shall mean each and all of the lenders now or
hereafter providing the Loans (as defined in Section 4.1) to the Lessee.
(l) “Lien” or “Liens” shall have the meaning assigned in Section 4.2(a).
(m) “Loan” or “Loans” shall have the meaning assigned in Section 4.1.
(n) “Partnership Agreement” shall mean the partnership agreement of a tax
credit limited partnership assignee of Lessee, as amended and/or restated from time to time.
(o) “Property” shall mean the Land and Improvements.
(p) “Tenant(s)” shall mean the households that lease the Dwelling Units from
Lessee.
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ARTICLE 2. LEASE OF THE LAND;
RENTAL PROVISIONS; TAXES AND ASSESSMENTS
2.1. Lease of the Land. The Lessor, for and in consideration of the covenants and
agreements to be kept and performed by the Lessee, leases the Land to the Lessee, and in
consideration thereof, the Lessee does take, hire and lease the Land from the Lessor pursuant to
the terms of this Lease.
2.2. Term. The term of this Lease shall commence on ______________, 2016, and
shall continue from such date until ___________________, 20__, unless earlier terminated in
accordance with this Lease. Upon execution of this Lease by both Parties, the Original Lease
shall be superseded in its entirety by the terms and conditions in this Lease as of the
Commencement Date.
2.3. Rent. The Lessee shall pay to the Lessor, at Lessor’s address, as provided in
Section 10.2, or such other place as the Lessor may designate in writing, (a) as of the Closing
Date, initial rent in the amount of Two Hundred Twenty Six Thousand, Two Hundred Sixty Four
Dollars ($226,264.00) (the “Initial Rent”), which the parties have agreed is the fair market value
of the leasehold interest, and (b) rent in the annual amount of One Dollar ($1.00) (the “Rent”).
Rent shall be paid in advance on or before January 1 of each year during the Lease Term. Lessee
may prepay all or any portion of the Rent. The Initial Rent shall be paid by having Lessee execute
an unsecured promissory note (the “Note”) in favor of Lessor for the full amount of the Initial
Rent. The Note shall not bear interest and all principal shall be due and payable at the end of the
75-year term of the Note.
2.4. Use of Development and Assurances of Lessee. The Lessee agrees and warrants:
(a) The Development shall be used only to provide housing for low income
seniors and disabled persons as follows: all of the Dwelling Units (other than one (1) manager’s
unit) shall be rented to “low income households” as defined in Section 50079.5 of the California
Health & Safety Code;
(b) That the Lessee will use commercially reasonable efforts to prevent any
Tenant from committing or maintaining any nuisance or unlawful conduct on or about the
Development and that the Lessee will not itself use the Development for any disorderly or
unlawful purpose;
(c) That the Lessee will use commercially reasonable efforts to prevent any
Tenant from violating any of the covenants and conditions of this Lease with respect to the
Development;
(d) That the Lessee will take commercially reasonable action, if necessary, to
abate any violation of this Lease by any Tenant upon notice from the Lessor;
(e) The Lessee shall comply with, at its sole cost and expense, any documents,
agreements, covenants and restrictions recorded against the Land senior to the Memorandum of
Ground Lease, including, without limitation, those relating to environmental remediation and
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inspection;
(f) Subject to any applicable laws of the State of California and the rights of
Tenants, that the Lessee will permit the Lessor and its agents to inspect the Development or any
part thereof at any reasonable time during the Lease Term; and
(g) Subject to the rights to contest the same set forth elsewhere in this Lease,
that the Lessee shall keep the Property free from any and all liens and encumbrances, except
those set forth in Section 4.2 or as otherwise approved by Lessor in its sole discretion.
2.5. Taxes and Assessments.
(a) Payment of Taxes and Assessments. Except as provided in Section 2.5(e),
the Lessee covenants and agrees during the entire Lease Term, at its own cost and expense, to
pay the public officers charged with their collection, prior to delinquency and before any fine,
penalty, interest, or other charge may be added to them for non-payment, all real estate taxes,
general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind and
nature, made, assessed, levied or imposed upon, or due and payable in connection with, or which
become a lien upon, the Land, the Improvements, or any part of the Land or Improvements, or
upon this Lease, as well as assessments for sidewalks, streets, sewers, water, or any other public
improvements and any other improvements or benefits which shall, during the Lease Term, be
made, assessed, levied, or imposed upon or become due and payable in connection with, or a lien
upon the Land, the Improvements, or any part of the Land or Improvements, or upon this Lease.
The Lessee shall have the right to obtain, and shall have the sole responsibility for obtaining, any
affordable housing property tax exemption for such Land and Improvements which Lessee may
elect to obtain. Lessor hereby agrees that Lessor shall not agree to any assessment or additional
real property taxes without the consent of Lessee.
(b) Payment of Fees. Except as provided in Section 2.5(e), the Lessee
covenants and agrees during the entire Lease Term, at its own cost and expense, to pay, prior to
delinquency and before any fine, penalty, interest, or other charge may be added to them for non-
payment, all license and permit fees, charges for public utilities of any kind, and any and all
governmental charges relating to the use or occupancy of the Improvements.
(c) Copies of Notices to Lessee. The Lessor agrees to send to the Lessee and
designated Lenders copies of any and all notices received by it in respect to any taxes,
assessments, charges, or fees for which the Lessee is liable pursuant to this Section 2.5.
(d) Lessee’s Right to Contest. If the Lessee disputes the amount or validity of
any liens, taxes, assessments, charges, penalties or claims, including liens or claims of
materialmen, mechanics or laborers, upon the Land or the Improvements, regardless of whether
such amounts are payable by the Lessor or the Lessee, the Lessee may contest and defend against
the same at its cost, and in good faith diligently conduct any necessary proceedings in connection
therewith to prevent and avoid the same; provided, however, that such contest shall be
prosecuted to a final conclusion as speedily as reasonably possible. The Lessor agrees to render
to the Lessee all reasonable assistance, at no expense to the Lessor, in contesting the validity or
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amount of any such taxes, assessments or charges, including joining in the signing of any protests
or pleadings which the Lessee may deem advisable to file. During any such contest, the Lessee
shall (by the payment of such disputed taxes, assessments, or charges, if necessary) prevent any
advertisement of tax sale, any foreclosure of, or any divesting thereby of the Lessor’s title,
reversionary interest or other interest in or to the Land.
(e) Lessor Obligations. The provisions of this Lease shall not be deemed to
require the Lessee to pay any municipal, county, state, or federal income or gross receipts or
excess profits taxes assessed against the Lessor, or any municipal, county, state, or federal capital
levy, estate, succession, inheritance, gift or transfer taxes of the Lessor, or franchise taxes
imposed upon any owner in fee of the Land. Any rebate made on account of any taxes or charges
paid by the Lessor and not reimbursed by the Lessee shall belong and be paid to the Lessor;
otherwise such rebate shall belong to the Lessee.
2.6. Assignment of Lessee’s Leasehold Interest. Except for assignments to an affiliate
of Lessee or to a limited partnership in which Lessee or its affiliate is the sole general partner, the
Lessee may not assign its interest in this Lease without the prior written consent of the Lessor,
which consent may be withheld in its sole discretion.
ARTICLE 3: MAINTENANCE; USE OF PREMISES
3.1. Title to Improvements and Liens Thereon. Title to the Improvements on the Land
shall be granted to Lessee pursuant to a grant deed in the form attached hereto as Exhibit C
recorded in the Official Records on the Closing Date; provided, however, that the Lessee shall
have no right to destroy, demolish or remove the Improvements except as specifically provided
for in this Lease or as approved in writing by the Lessor, which may be withheld in Lessor’s sole
and absolute discretion. It is the intent of the parties hereto that this Lease shall create a
constructive notice of severance of the Improvements from the Land.
3.2. Permits, Licenses and Easements. The Lessor agrees that, within ten (10) days
after receipt of written request from the Lessee, it shall (at no expense to the Lessor) join in any
and all applications for permits, licenses or other authorizations required by any governmental or
other body claiming jurisdiction in connection with any work the Lessee may do pursuant to this
Lease, and shall also join in any grants of easements for public utilities useful or necessary to the
proper economic development of the Land or of the Improvements, provided that such work or
grants are consistent with the plans previously approved by the Lessor for the Development.
3.3. Use of Development. The Lessee shall at all times during the Lease Term use or
cause the Development to be used for the purposes set forth in this Lease, consistent with all
applicable zoning and environmental laws of any governmental authority having jurisdiction over
the Development. Subject to the next sentence, the Lessee agrees to comply with all applicable
and lawful statutes, rules, orders, ordinances, requirements and regulations of the United States,
the State of California, and of any other governmental authority having jurisdiction over the
Development. The Lessee may, in good faith and on reasonable grounds, dispute the
applicability of, or the validity of any charge, complaint or action taken pursuant to or under
color of, any statute, rule, order, ordinance, requirement or regulation, defend against the same,
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and in good faith diligently conduct any necessary proceedings to prevent and avoid any adverse
consequence of the same. The Lessee agrees that any such contest shall be prosecuted to a final
conclusion as speedily as reasonably possible.
3.4. Maintenance of the Development. Subject to Sections 6.1 and 6.2, during the
Lease Term, the Lessee shall perform, or cause to be performed, all maintenance and repairs
necessary to maintain the Development in good repair and tenantable condition.
Notwithstanding anything herein or in any plat map for the Property to the contrary, the Lessee
shall have no obligation to repair or otherwise maintain the roads located on the Land.
3.5. Utilities. The Lessee shall be responsible for the cost of all utilities, including
water, heat, gas, electricity, waste removal, sewers, and other utilities or services supplied to the
Development, and, subject to Section 2.5(d), the Lessee shall pay or cause same to be paid
currently and as due.
3.6. Maintenance of Creek. The parties acknowledge that a creek runs through the
middle of the Property and that Lessor shall continue to maintain the creek in accordance with
City policy and custom. Lessee acknowledges and agrees that nothing in this Section 3.6 shall
obligate Lessor to perform any maintenance or repair activities to the creek as a result of the act
or omission of Lessee, its officers, employees, contractor’s agents, guests or invitees. The parties
further acknowledge and agree that nothing in this Section 3.6 shall affect or otherwise modify
Lessee’s obligation to maintain insurance and indemnify, defend and hold Lessor harmless
pursuant to Article 5 hereunder.
ARTICLE 4: MORTGAGE LOANS
4.1. Loans Regarding the Development. To the extent loans (“Loans”) are required to
fund the acquisition, construction, operation, repair, restoration, refinance and/or transfer of the
Development from time to time, and for so long as the Investor Limited Partner is a partner in
Lessee, the following provisions shall apply.
4.2. Liens and Encumbrances Against Lessee’s Interest in the Leasehold Estate.
(a) The Lessee shall have the right to encumber the leasehold estate created by
this Lease and the Improvements with deeds of trust, mortgages, regulatory agreements, and
memoranda of option (collectively, “Liens”).
(b) The Lessor’s right to terminate this Lease shall be subject to the following
provisions.
(i) The Lessor shall not agree to any mutual termination or
cancellation of this Lease, nor accept any surrender of this Lease, nor consent to any amendment
or modification of this Lease, without the prior written consent of the Investor Limited Partner
and each of the Lenders which has an outstanding Loan.
(ii) Notwithstanding any Event of Default by the Lessee under this
Lease, the Lessor shall have no right to terminate this Lease by reason of any such Event of
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Default unless the Lessor shall have given each of the Lenders which has an outstanding Loan
written notice of such Event of Default at the addresses given to the Lessor by those Lenders, and
unless each such Lender shall have failed to remedy such Event of Default or acquire the
Lessee’s leasehold estate created by this Lease or commence foreclosure or other appropriate
proceedings, all as set forth in, and within the times specified by, this Section 4.2.
(iii) Any Lender which has an outstanding Loan shall have the right,
but not the obligation, at any time to pay any or all of the rent due pursuant to the terms of this
Lease, and do any other act or thing required of the Lessee by the terms of this Lease, to prevent
termination of this Lease. Each Lender shall have ninety (90) days after receipt of notice from
the Lessor describing an Event of Default to cure the Event of Default; provided, however, that if
the Event of Default is not reasonably susceptible to cure by a Lender within such period, such
Lender shall have such longer period, not to exceed an additional ninety (90) days, as may be
reasonably necessary to cure the Event of Default, so long as such Lender is diligently
prosecuting such cure to completion (the “Initial Cure Period”). All payments so made by a
Lender and all things so done by a Lender shall be as effective to prevent a termination of this
Lease referenced in Section 9.1 as the same would have been if made and performed by the
Lessee instead of by the Lender(s).
(iv) In addition to the Initial Cure Period, if the default is such that
possession of the Land may be reasonably necessary to remedy the default, any Lender which has
an outstanding Loan shall have a reasonable time after the expiration of the Initial Cure Period
within which to remedy such default, provided that (i) such Lender shall have fully cured any
Event of Default in the payment of any monetary obligations of the Lessee under this Lease
within the first ninety (90) days of the Initial Cure Period and shall continue to pay currently such
monetary obligations when the same are due (subject to the cure rights contained in this Lease);
(ii) such Lender shall have acquired the Lessee’s leasehold estate hereunder or commenced
foreclosure or other appropriate proceedings prior to or within the Initial Cure Period, and shall
be diligently prosecuting the same; and (iii) and after acquiring possession of the Land, such
Lender shall diligently prosecute to completion such cures as may be reasonably possible to
remedy nonmonetary defaults existing under this Lease.
(v) Any Event of Default under this Lease which by its nature cannot
reasonably be remedied by a Lender shall be deemed to be remedied if (i) within the Initial Cure
Period, or prior thereto, such Lender shall have acquired the Lessee’s leasehold estate or
commenced foreclosure or other appropriate proceedings, (ii) the Lender shall diligently
prosecute any such proceedings to completion, (iii) the Lender shall have fully cured any other
Event of Default in any obligation of the Lessee hereunder reasonably susceptible to cure by the
Lender which does not require possession of the Land or shall diligently be prosecuting such cure
to completion, and (iv) after gaining possession of the Land, the Lender shall thereafter perform
all existing obligations of the Lessee hereunder which are reasonably capable of performance by
such Lender.
(vi) If any Lender is prohibited, stayed or enjoined by any law or by any
bankruptcy, insolvency, action, process, injunction or other judicial proceedings of any court,
including without limitation a court having jurisdiction over the Lessee, from commencing or
6.a
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prosecuting foreclosure or other appropriate proceedings, the times specified for commencing or
prosecuting such foreclosure or other proceedings shall be extended for the period of such
prohibition; provided that any Lender shall have fully cured any Event of Default in the payment
of any monetary obligations of the Lessee under this Lease, including without limitation any
monetary obligations to third parties which have become liens against the Property or any portion
thereof, and shall continue to pay currently such monetary obligations when the same fall due
(subject to the cure rights contained in this Lease).
(vii) The Lessor shall concurrently give to each Lender who has
provided to the Lessor an address for notices, and which has an outstanding Loan, a duplicate
copy of all notices which the Lessor may from time to time give to the Lessee pursuant to this
Lease. No notice by the Lessor to the Lessee hereunder shall be effective unless and until a copy
of the notice shall have been given to each of the Lenders as set forth in this Section 4.2(b)(vii).
Each notice required to be given by Lessor to a Lender shall be addressed as described above and
shall otherwise be given in the manner, and with the effect, described in Section 10.2.
(viii) Neither the foreclosure of a Lien, nor any sale thereunder, whether
by judicial proceedings or by virtue of any power contained in the leasehold mortgage securing
the Loan, nor any conveyance of the leasehold estate created hereby from the Lessee to a Lender
Party through or in lieu of any such foreclosure, shall require the consent of the Lessor or
constitute a breach of any provision of this Lease. In the event any Lender, or its designee, or any
purchaser at foreclosure or recipient of an assignment of the leasehold interest hereunder (as
applicable, a “Lender Party”), becomes the Lessee under this Lease by such means or pursuant
to any new lease obtained under Section 4.2(b)(ix), the Lessor shall recognize the Lender Party as
the Lessee hereunder or under such new lease and the Lender Party shall be personally liable
under this Lease or such new lease only for the period of time that the Lender Party remains the
Lessee thereunder, provided that the Lender Party attorns to the Lessor and agrees to be subject
to the restrictions of this Lease. If a Lender (or its designee) becomes the Lessee under this Lease
or any such new lease, the Lender (or its designee) shall have the right thereafter to assign or
sublease this Lease or such new lease without obtaining the Lessor’s consent, provided that any
assignee: (i) shall take the leasehold estate subject to all of the provisions of this Lease or such
new lease, and (ii) shall assume and agree to perform all obligations of the Lessee under this
Lease; any other assignment or sublease of this Lease by a Lender Party (other than a Lender or
its designee) who becomes a Lessee shall be subject to the consent of the Lessor, which shall not
be unreasonably withheld, conditioned or delayed. Nothing in this Section 4.2(b)(viii) shall be
construed to obligate any Lender to remedy any default of the Lessee, and any failure of any
Lender to complete any such cure after commencing the same shall not give rise to any liability
of any Lender (or its designee) to the Lessor or the Lessee.
(ix) If the Lessor terminates this Lease by reason of any Event of
Default (as defined herein), or if this Lease shall otherwise terminate, whether by operation of
law or otherwise, Lessor shall give prompt written notice of such termination to each Lender.
The Lessor shall, upon written request from any Lender, given by the requesting Lender to Lessor
not later than the sixtieth (60th) day after Lessor gives each Lender written notice that this Lease
has terminated, execute and deliver a new lease of the Property and Improvements (or, with
respect to such Improvements, a deed therefor, if requested by such Lender) to such Lender
6.a
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Party; provided, however, that such Lender shall, as a condition precedent to the Lessor’s
execution of such new lease, pay to Lessor any delinquent rent or other delinquent amount
payable by the Lessee to Lessor under this Lease. Such new lease shall have a term equal to the
unexpired balance of the Lease Term as it exists immediately prior to such termination with the
same agreements, covenants, interests and conditions (except for any requirements which have
been fulfilled by the Lessee prior to termination) as are contained in this Lease and with priority
equal to this Lease with respect to encumbrances of the Lessor’s interest in the Property or
encumbrances of the Lessee’s interest in the Property permitted or caused by the Lessor, together
with any provisions legally required in the event the applicable Lender Party is a governmental
entity. No Lender Party shall be liable for any defaults by Lessee hereunder arising prior to
acquiring the leasehold interest; provided, however, that, with respect to any non-monetary and
continuing defaults, such Lender Party shall, within ninety (90) days after the execution of such
new lease cure any non-monetary Events of Default by the Lessee which are reasonably
susceptible to cure by the Lender Party (or, if any such non-monetary Event of Default is not
reasonably susceptible to a cure by such Lender within such ninety (90) day period, such Lender
shall have such additional period of time within which to cure such non-monetary Event of
Default as may be reasonably required by such Lender to cure such Event of Default, so long as
such Lender is diligently prosecuting such cure to completion. The Lender Party shall be
personally obligated only for performance of obligations under the Lease commencing as of the
date of such foreclosure, enforcement or assignment and ending as of the date of any assignment
of the Lease to a successor Lessee in accordance with this Lease. Upon execution and delivery of
such new lease by the Lessor and the Lender Party, the Lender Party shall have acquired all the
right, title and interest of the Lessee under this Lease prior to its termination. The Lesso r, at the
expense of the Lender Party, shall cooperate in taking such action as shall be necessary to cancel
and discharge this Lease and to remove the Lessee from Property. If more than one (1) Lender
timely gives Lessor a written request for such a new lease, then Lessor shall enter into such new
lease with the Lender holding, immediately prior to such termination, the Lien which is senior, in
terms of lien priority (determined by also taking all valid subordination agreements into account),
to the Liens held by the other requesting Lenders.
(x) If a Lender subsequently transfers its interest under this Lease after
acquiring such interest by foreclosure or deed in lieu of foreclosure and, in connection with any
such transfer, the Lender takes back a mortgage or deed of trust encumbering such leasehold
interest to secure all or any portion of the purchase price given to the Lender for such transfer,
then such mortgage or deed of trust shall be considered a Lien hereunder and the Lender shall be
entitled to receive the benefit of and to enforce the provisions of this Lease or the new lease.
(xi) Unless each of the Lenders otherwise consents in writing, the
Lessor and the Lessee each hereby waives, and agrees not to assert or otherwise take the benefit
of, that portion of Section 365(d)(4), or any other applicable provisions, of the United States
Bankruptcy Code (11 U.S.C. Section 101 et seq.), which provides for the deemed rejection of a
lease in certain circumstances, so long as the trustee is paying the rent due under the Lease.
(xii) The Lessor shall cooperate in including in this Lease by suitable
amendment from time to time any provision which may reasonably be requested by any Lender
or any proposed lender, for the purpose of implementing the mortgagee-protection provisions
6.a
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contained in this Lease and allowing such Lender or proposed lender reasonable means to protect
or preserve the lien of the leasehold mortgage and the value of its security, and to include any
additional rights and privileges reasonably requested to be added by such Lender or proposed
lender. The Lessor agrees to execute and deliver (and to acknowledge, if necessary, for recording
purposes) any agreement necessary to effect any such amendment; provided, however, that any
such amendment shall not in any way affect the Lease Term or rent under this Lease nor
otherwise in any material respect adversely affect any rights of the Lessor under this Lease.
(xiii) In no event shall any election by Lessee to terminate this Lease in
connection with any casualty, condemnation or similar event have any force or effect unless the
Investor Limited Partner and each Lender then holding a Lien consents to such termination, in
writing, in its sole and absolute discretion.
(c) Any leasehold mortgage created pursuant to Section 4.2(a) shall be subject
to the provisions of this Lease and all rights of the Lessor under this Lease.
(d) Each Lender that desires to benefit from Section 4.2 shall deliver to Lessor
a written request for notices of default under this Lease, receipt of which shall be acknowledged
by Lessor upon receipt.
(e) Rights of Investor Limited Partner. The Investor Limited Partner shall
have the same notice and cure rights as any Lender (including monetary obligations) as set forth
in Section 4.2 above for so long as it is a partner of Lessee; provided, however, that (I) the
requirement that a Lender acquire the Lessee’s leasehold estate hereunder or commence
foreclosure or other appropriate proceedings prior to or within the Initial Cure Period, as set forth
in Section 4.2(iv)(ii) above, shall be met by the Investor Limited Partner by commencing the
removal and substitution of the general partner of Lessee in appropriate proceedings in
accordance with the terms of the Partnership Agreement (together with any amendments to such
removal and substitution rights in the Partnership Agreement reasonably approved by the Lessor
and the Housing Authority of San Luis Obispo) and shall continue diligently prosecuting the
same, and further provided that (i) the Lessor and Housing Authority of San Luis Obispo hereby
approve the Investor Limited Partner or its affiliate as an interim replacement general partner and
(ii) the Lessor and the Housing Authority of San Luis Obispo (so long as the tax credit limited
partnership and general partner thereof are not affiliates of the Housing Authority of San Luis
Obispo) shall have approved the ultimate general partner, which approval shall not be
unreasonably withheld, delayed or conditioned; and (II) the Investor Limited Partner shall not
have the right to enter into a new lease under Section 4.2(iv)(ix). The address for any notices to
the Investor Limited Partner shall be provided to Lessor and the Housing Authority of San Luis
Obispo in writing.
4.3. Cost of Loans to be Paid by Lessee. The Lessee affirms that it shall bear all of the
costs and expenses in connection with (a) the preparation and securing of the Loans, (b) the
delivery of any instruments and documents and their filing and recording, if required, and (c) all
taxes and charges payable in connection with the Loans.
4.4. Proceeds of Loans. It is expressly understood and agreed that all Loan proceeds
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shall be paid to and become the property of the Lessee, and that the Lessor shall have no right to
receive any such Loan proceeds.
4.5. Notice and Right to Cure Defaults Under Loans. Upon the recording of the
“Memorandum of Ground Lease” in the form attached hereto as Exhibit B, the Lessor may
record in the Official Records in which the Land is situated a request for notice of any default
under each Loan.
ARTICLE 5: INSURANCE
5.1. Required Insurance Coverage.
(a) Fire and Extended Coverage Endorsement. The Lessee shall during the
Lease Term keep the Development insured against loss or damage by a standard all risk policy in
amounts such that the proceeds of such insurance shall not be less than the replacement value of
the Development, or should insurance in such amount not be reasonably and commercially
available, such lesser amount as may be acceptable to the Lessor. The amount of such insurance
shall be adjusted by reappraisal of the Improvements by the insurer or its designee at least once
every five (5) years during the Lease Term, if requested by the Lessor. If an all risk policy
insuring the full replacement value of the Development is not reasonably and commercially
available, the Lessee shall use best efforts to obtain and maintain an extended coverage
endorsement that ensures the full replacement value of the Development as soon as such
coverage becomes commercially and reasonably available, subject to the approval of the Lenders.
(b) Liability and Property Damage Insurance. During the Lease Term, the
Lessee shall keep in full force and effect a policy or policies of comprehensive general liability
and property damage insurance against liability for bodily injury to or death of any person or
property damage arising out of an occurrence on or about the Development. The limits of such
insurance shall be not less than One Million Dollars ($1,000,000) combined single limit for
bodily injury and property damage. The limits of the insurance shall be adjusted once every five
(5) years if and as reasonably required by the Lessor.
(c) Workers’ Compensation Insurance. The Lessee shall carry or cause to be
carried workers’ compensation insurance covering all persons employed in connection with the
Development and with respect to whom death, bodily injury, or sickness insurance claims could
be asserted against the Lessor or the Lessee.
(d) Builders’ Risk Insurance. During the course of any alteration, construction
or reconstruction, the cost of which exceeds ($50,000), the Lessee shall require any contractor to
provide builders’ risk insurance for not less than One Million Dollars ($1,000,000) combined
single limit for bodily injury or property damage insuring the interests of the Lessor, the Lessee
and any contractors and subcontractors.
5.2. Insurance Policies and Premiums.
(a) All liability policies required by this Lease or any Loan Document shall
name the Lessor as an additional insured. Duplicate copies of such policies or certificates of
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such insurance shall be promptly furnished to the Lessor.
(b) To the extent obtainable, any policy of insurance shall provide that any
change or cancellation of said policy must be made in writing and sent to the Lessee and the
Lessor at their respective principal offices at least thirty (30) days before the effective date of
change or cancellation.
5.3. Proceeds of Insurance.
(a) All fire and standard risk or extended coverage (casualty) insurance
proceeds shall be applied to the payment of the costs of repairing or rebuilding that part of the
Development damaged or destroyed if (1) the Lessee agrees in writing within ninety (90) days
after payment of the proceeds of insurance that such repair or rebuilding is economically feasible,
and (2) each Lender with an outstanding Loan permits such repair or rebuilding, provided that the
extent of the Lessee’s obligation to restore the Development shall be limited to the amount of the
insurance proceeds.
(b) If the Development is not repaired or rebuilt, all such proceeds shall be
applied in a manner consistent with the terms of the Loans and the Property shall be left in its
original condition as of the commencement of the Lease term.
(c) In the event that no Loan is outstanding, all insurance proceeds received
under the policies set forth in this Article 5 shall be paid to the Lessee, provided that the Lessee
shall apply such proceeds, to the extent possible, for reconstruction or repair in a manner
consistent with the provisions of Section 6.2.
5.4. Limitation of Liability.
(a) To the fullest extent provided by law, the Lessee shall indemnify and hold
harmless the Lessor, its trustees, officials, officers, employees, agents, contractors, servants,
directors, stockholders, partners or principals from all claims, actions, demands, costs, expenses
and attorneys’ fees arising out of, attributable to or otherwise occasioned, in whole or in part, by
any act or omission of the Lessee, its agents, contractors, servants, employees, or invitees, arising
from or relating to operation of the Development and/or the performance except for that caused
by Lessor’s gross negligence or willful misconduct.
ARTICLE 6: CONDEMNATION OF THE DEVELOPMENT
6.1. Condemnation. If the Development or the Land or any part thereof shall be taken
or condemned, for any public or quasi-public purpose or use by any competent entity in
appropriate proceedings, or by any right of eminent domain, the Lessor and the Lessee shall
request that awards and other payments on account of a taking of the Development and the Land
(less costs, fees and expenses incurred by the Lessor and the Lessee in connection with the
collection thereof) shall be divided by the presiding court between loss of value of the fee interest
in the Land and loss of value of the Development. In any case, such awards and payments shall
be applied as follows:
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(a) Net awards and payments received on account of a partial taking of the
Development, other than a taking for a temporary use not exceeding one (1) year, shall be
allocated and paid in the following order of priority:
(i) If the Lessee reasonably believes restoration is economically
feasible, and unless the Lessee is then in default and the opportunity to cure has expired under the
Loan Documents, first, to pay the cost of restoration of the Development, provided that (1) the
extent of the Lessee’s obligations to restore the Development shall be limited to the amount of
the net award and payment received on account of the taking, and (2) each Lender with an
outstanding Loan permits such repair or rebuilding. The Lessee shall furnish to the Lessor
evidence reasonably satisfactory to the Lessor of the total cost of the restoration of the
Development.
(ii) Second, or first if (i) the Lessee does not reasonably believe that
restoration is economically feasible, (ii) the Lessee is in default and the opportunity to cure has
expired under the Loan Documents, or (iii) any Lender does not permit restoration, to any
Lenders (in the order of their respective lien priority, if there is more than one Lender) in an
amount equal to the decrease (if any) in the value of the security for their respective Loans as a
result of the partial taking (calculated as set forth below in this Section 6.1(a)(ii)), less amounts
payable to or recovered by the Lender pursuant to such taking, but not to exceed the unpaid
balance of their Loans. For purposes of this Section 6.1(a)(ii), the amount of decrease in the
value of the security for a Loan shall be the amount, if any, necessary to reduce the outstanding
principal of said Loan such that the Loan to Value Ratio (as defined below) of said Loan
immediately following the taking is equal to the Loan to Value Ratio of said Loan immediately
preceding the taking. Loan to Value Ratio shall mean that fraction the numerator of which is the
sum of the principal amount of the Loan plus the principal amounts of all Loans higher in lien
priority to the Loan and the denominator of which is the appraised value of the Development
immediately following the taking or immediately preceding the taking, as applicable. The values
of the Development immediately preceding the taking and immediately following the taking shall
be determined by an MAI or SRI appraiser selected by the Lessee and who is reasonably
satisfactory to the Lessor.
(iii) The balance, if any, shall be divided between the Lessor and the
Lessee in the manner specified in Section 6.1(e); provided, however, if the taking has no effect
on the value of the Lessor’s fee interest in the Land, the balance shall be paid exclusively to the
Lessee.
(b) Net awards and payments received on account of a partial or total taking of
only the Lessor’s fee interest in the Land (that is, a taking of the Lessor’s fee interest in the Land
that has no effect on the value of the Lessee’s leasehold interest in the Land or the Lessee’s fee
interest in the Improvements), including severance damages, shall be paid to the Lessor, which
amount shall be free and clear of any claims of the Lessee, or any other persons claiming rights to
the Land through or under the Lessee.
(c) Net awards and payments received on account of a taking for temporary
use not exceeding one (1) year and relating to a period during the Lease Term shall be paid to the
6.a
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Lessee; provided, however, that if such taking for temporary use has resulted in any damage to or
destruction of the Development, such net awards and payments shall be first applied to pay the
cost of restoration thereof if the Lessee determines that restoration is feasible. Net awards and
payments received on account of a taking for temporary use not exceeding one (1) year and
relating to a period after the end of the Lease Term shall be paid to the Lessor.
(d) Net awards and payments received on account of a total taking of the
Development shall be allocated and paid in the following order of priority:
(i) First, to any Lenders with then-outstanding Loans secured by the
Development (in the order of their respective lien priority, if there is more than one Lender), in
accordance with any Loan Documents, an amount equal to the unpaid balance secured by their
respective Loans to the extent there are sufficient funds to make such payments;
(ii) The remaining balance, if any, (the “Balance”) shall be divided
between the Lessor and the Lessee in the manner specified in Section 6.1(d)(iii); provided,
however, if the taking has no effect on the value of the Lessor’s fee interest in the Land, the
balance shall be paid exclusively to the Lessee.
(iii) Next, as between the Lessor and the Lessee, the Lessee shall
receive reimbursement for any funds it has reasonably expended for repair and/or reconstruction
of the Development (other than funds received from the Lenders). Then the Lessor shall receive
an amount equal to the Balance multiplied by a fraction, the numerator of which is the number of
years elapsed from the date of the Lease to the date of the taking, and the denominator of which
is seventy-five (75). The Lessee shall receive the remainder after deduction of the Lessor’s
portion.
(e) The Lessee shall receive any award granted for or allocated to trade
fixtures, moving expenses or loss of business.
(f) If the Development is taken or condemned during the last five (5) years of
the Lease Term under circumstances described in Section 6.1(a), the Lessee may elect to
terminate the Lease and proceeds of any payment or award shall be distributed in accordance
with the provisions of Sections 6.1(d) and (e).
6.2. Administration of Construction Fund in the Event of Condemnation, or Damage
or Destruction of Development. In the event that the Loans have been paid in full, and if the
Development or any part of it is to be repaired or reconstructed, after damage or destruction of
the Development or its condemnation, all proceeds collected under any and all policies of
insurance referred to in Article 5 above covering such damage or destruction, or all compensation
received for such taking by the exercise of the power of eminent domain, shall be paid into a
special trust fund to be created and held by the Lessee and to be designated as the “Construction
Fund”, during such repairing or reconstructing. Any surplus of such insurance or condemnation
proceeds remaining after the completion of all payments for such repairing or reconstructing shall
be held or applied by the Lessee in a manner consistent with the applicable provision of
Articles 5 and 6.
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Laurel Creek Apartments
15
6.3. Lessee, Lessor, Lenders to be Made Parties in Legal Proceedings.
(a) In the event proceedings shall be instituted (1) for the exercise of the
power of eminent domain, or (2) as a result of any damage to or destruction of the Development,
the Lessee, the Lessor, and any Lender with a then-outstanding Loan shall be made parties to
those proceedings, and if not made parties by the petitioning party, shall be brought into the
proceedings by appropriate proceedings of other parties so that adjudication may be made of the
damages, if any, to be paid to the Lessee, the Lessor and the Lenders as compensation for loss of
their rights in the Improvements or the Land, or for damage to or destruction of the Development.
Should the Lessor or the Lessee receive notice of institution of any proceedings subject t o
Section 6.1, the party receiving such notice shall notify the other and each Lender in accordance
with Section 10.2 of this Lease, not later than thirty (30) days after receiving such notice.
(b) The Lessor and the Lessee shall cooperate and consult with each other in
all matters pertaining to the settlement, compromise, arbitration, or adjustment of any and all
claims and demands for damages on account of damage to or destruction of the Development, or
for damages on account of the taking or condemnation of the Improvements or the Land.
ARTICLE 7: PARTICULAR COVENANTS
7.1. Non-Discrimination.
(a) The Lessee or its designee shall not, in the selection or approval of
Tenants or provision of services or in any other matter, discriminate against any person or group
of persons on the grounds of race, color, creed, religion, sex, sexual orientation, marital status,
national origin, or ancestry. In addition, the Lessee covenants by and for the Lessee and the
Lessee’s successors, assigns and all persons claiming under or through the Lessee that this Lease
is made subject to the condition that, except to the extent permitted by applicable federal and
California law, there shall be no discrimination against or segregation of any person or group of
persons on account of race, color, religion, creed, sex, sexual orientation, marital status, national
origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment
of the Land nor shall the Lessee or any person claiming under or through the Lessee 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, sublessees, subtenants or
vendees on the Land.
(b) The Lessor shall be entitled to invoke any remedies available at law or in
equity to redress any breach of this Article 7 or to compel compliance therewith by the Lessee.
The obligations of the Lessee and the Lessor to comply with Section 7.1(a) above shall inure to
the benefit of each other. The Lessee shall be entitled to invoke any remedies available at law or
in equity to redress any breach of this Article 7 or to compel compliance therewith by the Lessor.
ARTICLE 8: ASSURANCES OF LESSOR
8.1. Lessor to Give Peaceful Possession. The Lessor covenants that it owns in fee
simple, and that it has good and marketable title to the Land. The Lessor covenants and warrants
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Laurel Creek Apartments
16
that the Lessee and its Tenants shall have, hold and enjoy, during the Lease Term, peaceful,
quiet, and undisputed possession of the Land leased without hindrance from anyone so long as
the Lessee is not in default under this Lease.
8.2. Release of Lessor. The Lessor may sell, assign, transfer, or convey (but not
encumber) all or any part of the Lessor’s interest in the Land or this Lease without obt aining the
consent of the Lessee or any Lender of Investor Limited Partner, provided that the purchaser,
assignee, or transferee expressly assumes all of the obligations of the Lessor under this Lease by
a written instrument recorded in the Official Records. The Lessor may encumber all or any part
of the Lessor’s interest in the Land or this Lease provided that such encumbrance shall be subject
and subordinate to this Lease and shall not otherwise disturb or negatively affect Tenant’s or any
Lender’s rights hereunder. In the event the Lessor intends to sell all or any part of the Land, the
Lessor shall notify the Lessee of such intention not later than ten (10) days before close of
escrow. In the event of a sale, assignment, transfer, or conveyance by the Lessor of the Land or
its rights under this Lease, the same shall operate to release the Lessor from any liability arising
on or after the effective date of such transfer upon any of the covenants or conditions of this
Lease, expressed or implied, in favor of the Lessee, and in such event the Lessee shall look solely
to the successor in interest of the Lessor in and to the Land or this Lease. This Lease shall not be
affected by any such sale, and the Lessee agrees to attorn to any such purchaser or assignee.
8.3. Non-Subordination of Fee. Nothing in this Lease shall be construed as an
agreement by the Lessor to subordinate its fee interest in the Property or its rights under the
Lease. Lessor shall have no obligation to encumber or otherwise subordinate its fee interest in
the Property or in this Lease to the interest of any Lender.
ARTICLE 9: DEFAULTS AND REMEDIES
9.1. Events of Default; Remedy of Default by Lessee.
(a) Any one or more of the following events shall constitute an “Event of
Default”:
(i) Failure to pay the Rent as required pursuant to Section 2.3 of this
Lease, or any other payment required hereunder, and continuance of such failure for a period of
ten (10) days after receipt by the Lessee of written notice specifying the non-payment; or
(ii) Failure of the Lessee to observe and perform any covenant,
condition, or agreement hereunder on its part to be performed, and continuance of such failure
for a period of thirty (30) days after receipt by the Lessee of written notice specifying the nature
of such default, or if by reason of the nature of such default the same cannot be remedied within
said thirty (30) days, the Lessee shall fail to proceed with reasonable diligence after receipt of
said notice to cure the same or shall fail to cure within ninety (90) days after receipt of said
notice; or
(iii) The Lessee’s abandonment of the Land for sixty (60) consecutive
days or longer; or
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Laurel Creek Apartments
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(iv) A general assignment is made by the Lessee for the benefit of
creditors; or
(v) The filing of a voluntary petition by the Lessee, or the filing of an
involuntary petition by any of the Lessee’s creditors seeking the rehabilitation, liquidation, or
reorganization of the Lessee under any law relating to bankruptcy, insolvency, or other relief of
debtors, provided that in the case of an involuntary petition the Lessee shall have ninety (90) days
after such filing to cause such petition to be withdrawn or dismissed; or
(vi) The appointment of a receiver or other custodian to take possession
of substantially all of the Lessee’s assets or of this leasehold which appointment is not withdrawn
or dismissed within ninety (90) days after its entry; or
(vii) The Lessee declares in writing that it is unable to pay its debts as
they become due; or any court enters a decree or order directing the winding up or liquidation of
the Lessee or of substantially all of its assets; or the Lessee files any action to dissolve or wind up
its affairs or to cease or suspend the Development; or
(viii) The attachment, execution, or other judicial seizure of substantially
all of the Lessee’s assets or this leasehold, which is not dismissed, bonded, or stayed within
ninety (90) days after such act is effected.
(b) Whenever any Event of Default shall have occurred and be continuing and
upon expiration of any applicable cure periods provided herein, and subject to the cure rights of
the Investor Limited Partner and the Lenders set forth in this Lease (including, without limitation,
Section 4.2), the Lessor may take whatever action at law or in equity as may appear reasonably
necessary to enforce performance or observance of any obligations, agreements, or covenants of
the Lessee under this Lease, including without limitation, termination of this Lease, in which
event all Improvements shall become the property of Lessor without compensation or
reimbursement to Lessee and all interest of Lessee in the Development shall terminate. In the
event of such default, the Lessor’s remedies shall be cumulative, and no remedy expressly
provided for in this Section 9.1 shall be deemed to exclude any other remedy allowed by law.
9.2. Remedy of Material Breach by Lessor. If the Lessor defaults under the Lease, the
Lessee shall give the Lessor written notice requiring that the default be remedied by the Lessor.
If the default is not cured within the time set forth by the Lessee (which shall be a reasonable
time for curing the default and shall in any event be at least thirty (30) days), the Lessee and the
Lenders may take any action as may be necessary to protect their respective interests. Such
action, in the event that the Lessor shall fail to perform any of its obligations under this Lease
and such failure shall continue after the expiration of the cure period specified in this Section 9.2,
shall include the right of the Lessee and the Lenders to cure such default and receive any
expenditure with interest thereon (at the reference rate then in effect at Wells Fargo Bank, N.A.)
from the Lessor within thirty (30) days after sending to the Lessor a statement therefor.
9.3. Termination. Subject to Section 4.2(b)(i), in the event of a total taking or in the
event of damage, destruction, or a partial taking, other than a temporary taking of the
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Laurel Creek Apartments
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Development, which the Lessee reasonably determines renders continued operation of the
Development infeasible both as a whole and in substantial part, this Lease shall terminate (except
if the Lessee is rebuilding the Development in accordance with the terms of this Lease) and in
such event any proceeds shall be allocated pursuant to Section 5.3 or Article 6, as appropriate. In
the event of a partial taking that does not result in termination pursuant to this Section 9.3, this
Lease shall remain in full force and effect as to the portion of the Development remaining, except
that Rent otherwise payable hereunder shall be equal to an amount determined by multiplying the
Rent by the ratio that the number of square feet in the Improvements after such taking bears to
the number of square feet in the Improvements prior to the taking.
ARTICLE 10: MISCELLANEOUS
10.1. Instrument Is Entire Agreement. This Lease and the attached exhibits constitute
the entire agreement between the parties with respect to the matters set forth herein. This Lease
shall completely and fully supersede all other prior understandings or agreements, both written
and oral, between the Lessor and the Lessee relating to the lease of the Land by the Lessor to the
Lessee.
10.2. Prevailing Wages - Notice. Lessee shall be responsible for evaluating the
applicability of any and all prevailing wage requirements in connection with the work to be done
on the Land. Lessee agrees at its own expense to comply with any and all prevailing wage
requirements which may be applicable to any such work, and further Lessee shall hold harmless,
indemnify and defend Lessor against any claims, damages, costs and/or liabilities arising out of
or related to Lessee’s contracting for any improvements constructed by Lessee on the Land.
Lessee acknowledges and agrees that, (a) in compliance with section 1773 of the California
Labor Code, the State of California Department of Industrial Relations has established prevailing
hourly wage rates for each type of workman, (b) current wage rates may be obtained from the
Division of Labor web site: www.dir.ca.gov/DLSR/PWD, and (c) any contractors or
subcontractors required to pay prevailing wage must be registered with the Department of
Industrial Relations pursuant to Section 1725.5 of the California Labor Code.
10.3. Notices. All notices hereunder shall be in writing signed by Authorized Officer(s)
and shall be sent by United States first class, certified mail, return receipt requested, postage
prepaid, or by recognized express delivery service with a receipt showing the date of delivery,
addressed:
If to the Lessor: City of San Luis Obispo
990 Palm Street
San Luis Obispo, Ca. 93401
Attn: City Clerk
With a copy to:
990 Palm Street
San Luis Obispo, Ca. 93401
Attn: City Attorney
6.a
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Ground Lease
Laurel Creek Apartments
19
If to the Lessee: Housing Authority of the City of San Luis Obispo
487 Leff Street
San Luis Obispo, CA 93401
Attention: Executive Director
With a copy to:
Gubb & Barshay LLP
505 14th Street
Suite 1050
Oakland, CA 94612
Attention: Scott Barshay
Or to any other address as any party may have furnished to the other in writing pursuant to the
requirements of this Section 10.2 as a place for service of notice. Any notice so given shall be
deemed to have been given upon receipt (or upon the date that delivery is refused by the
addressee), as shown on the delivery receipt.
10.4. Recording. Either Lessee or Lessor may record the Memorandum of Ground
Lease in the Official Records in the county in which the Development is located.
10.5. Non-Waiver of Breach. Neither the failure of the Lessor or the Lessee to insist
upon strict performance of any of the covenants and agreements of this Lease nor the failure by
the Lessor or the Lessee to exercise any rights or remedies granted to such parties under the terms
of this Lease shall be deemed a waiver or relinquishment (a) of any covenant herein contained or
of any of the rights or remedies of the Lessee or the Lessor hereunder, (b) of the right in the
future of the Lessor or the Lessee to insist upon and to enforce by any appropriate legal remedy a
strict compliance with all of the covenants and conditions thereof, or (c) the right of the Lessor to
recover possession of the Land.
10.6. Effective Date; Counterparts. This Lease shall become effective upon the
commencement of the Lease Term set forth in Article 2. This Lease may be executed in
counterparts, each of which shall be an original and all of which shall constitute the same
instrument.
10.7. Lease Binding on Successors. This Lease and all of its provisions and attached
exhibits shall inure to the benefit of, and shall be binding upon, the Lessor, the Lessee, and their
respective permitted successors and permitted assigns and, as provided in Sections 4.2(b) and
9.1(b), the Investor Limited Partner and the Lenders.
10.8. Relationship of Parties. Nothing contained in this Lease shall be deemed or
construed by the parties or by any third party to create the relationship of principal or agent or of
partnership, joint venture or association or of buyer and seller between the Lessor and the Lessee,
it being expressly understood and agreed that neither the computation of any payments and other
charges under the terms of this Lease nor any other provisions contained in this Lease, nor any
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Laurel Creek Apartments
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act or acts of the parties, shall be deemed to create any relationship between the Lessor and the
Lessee other than the relationship of landlord and tenant.
10.9. No Merger. There shall be no merger of this Lease or any interest in this Lease
nor of the leasehold estate created hereby, with the fee estate in the Land, by reason of the fact
that this Lease or such interest therein, or such leasehold estate may be directly or indirectly held
by or for the account of any person who shall hold the fee estate in the Land, or any interest in
such fee estate, nor shall there be such a merger by reason of the fact that all or any part of the
leasehold estate created hereby may be conveyed or mortgaged in a leasehold mortgage to a
leasehold mortgagee who shall hold the fee estate in the Land or any interest of the Lessor under
this Lease.
10.10. Gender and Number. Words of any gender used in this Lease shall be held to
include any other gender, and any words in the singular number shall be held to include the plural
(and vice versa), when the context requires.
10.11. Titles. The titles and article, section or paragraph headings are inserted only for
convenience, and are in no way to be construed as a part of this Lease or as a limitation on the
scope of the particular provisions to which they refer.
10.12. Severability. If any provision of this Lease or the application of any provision to
any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this
Lease, or the application of such provision to persons or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected, and each provision of this Lease shall
be valid and be enforced to the fullest extent permitted by law.
10.13. Applicable Law. This Lease shall be governed by and construed in accordance
with the laws of the State of California.
10.14. Amendments. Except as provided in Section 4.2 hereof, prior to entering into any
amendment to this Lease, Lessor and Lessee shall obtain the prior consent of the Investor
Limited Partner and all Lenders, if applicable and required.
10.15. Estoppel Certificates. Each Party, the Investor Limited Partner or each of the
Lenders (a “Requesting Party”) may require the other Party (a “Certifying Party”) to execute
and deliver to the Requesting Party (or directly to a designated third party) an estoppel certificate
certifying to the Certifying Party’s actual knowledge as to factual matters relating to this Lease as
reasonably requested by the Requesting Party. The Certifying Party shall sign, acknowledge, and
return such estoppel certificate within fifteen (15) days after request, even if the Requesting Party
is in default under this Lease. Such estoppel certificate may be relied upon by the Investor
Limited Partner, a Lender or any other party which may have, or intend to acquire, an interest in
this Lease.
10.16. Fees and Costs of Litigation. The prevailing Party in any litigation arising out of
or in connection with this Lease shall be entitled to receipt of reasonable attorneys’ fees and costs
from the other Party.
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Laurel Creek Apartments
21
[SIGNATURES ON FOLLOWING PAGE]
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Ground Lease
Laurel Creek Apartments
Exhibit A
IN WITNESS WHEREOF, the parties have executed this Lease effective as of the day
and year first above written.
LESSEE
Housing Authority of the City of San Luis Obispo
By: ________________________
Scott Smith, Executive Director Date
LESSOR
City of San Luis Obispo
By: ________________________
Katie Lichtig, City Manager Date
6.a
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Ground Lease
Laurel Creek Apartments
Exhibit A
Exhibit A
Description of Land
Real property in the City of San Luis Obispo, County of San Luis Obispo, State of California,
described as follows:
LEASEHOLD IN AND TO THAT PORTION OF LOT 3 IN SECTION 1 IN TOWNSHIP 31 SOUTH,
RANGE 12 EAST, MOUNT DIABLO BASE AND MERIDIAN, IN THE CITY OF SAN LUIS
OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO
THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE DECEMBER 3,
1875, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF ORCUTT ROAD, 40 FEET
WIDE, WITH THE CENTERLINE OR LAUREL LANE, 40 FEET WISE; THENCE ALONG THE
CENTERLINE OF SAID LAUREL LANE NORTH 30°40’ EAST, 303.74 FEET; THENCE SOUTH
59°20’ EAST, 38.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING
SOUTH 59°20’ EAST, 100.00 FEET; THENCE SOUTH 30°40’ WEST, 39.89 FEET TO THE
NORTHERLY LINE OF THE LAND DESCRIBED IN THE DEED TO HENRY A. BERNARD, ET
UX. RECORDED MAY 22, 1953 IN BOOK 711 PAGE 62 OF OFFICIAL RECORDS, IN THE OFFICE
OF THE COUNTY RECORDER OF SAID COUNTY; THENCE ALONG SAID NORTHERLY LINE
SOUTH 82°17’ EAST, 182.52 FEET TO THE NORTHEASTERLY CORNER OF SAID LAND OF
BERNARD AS FOLLOWS: FROM A TANGENT LINE BEARING SOUTH 19°56 WEST,
SOUTHERLY ALONG A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 175 FEET,
THROUGH A CENTRAL ANGLE OF 20°18’ AN ARC DISTANCE OF 62 FEET; TANGENT TO
SAID CONCAVE NORTHWESTERLY HAVING A RADIUS OF 20 FEET, THROUGH A CENTRAL
ANGLE OF 90°, AND ARC DISTANCE OF 31.42 FEET TO THE NORTHERLY LINE OF ORCUTT
ROAD 40 FEET WIDE; THENCE ALONG SAID ORCUTT ROAD NORTH 89°38’ EAST, 90 FEET
TO THE WESTERLY TERMINUS OF THE COURSE RECITED AS HAVING A BEARING AND
LENGTH OF SOUTH 89°38’ WEST, 197.00 FEET IN THE DEED TO CHARLES E. FREEMAN AND
WIFE RECORDED MAY 1,1957 IN BOOK 890, RECORDER; THENCE ALONG THE WESTERLY
BOUNDARY OF THE LAND DESCRIBED IN SAID DEED TO FREEMAN AS FOLLOWS:
NORTHWESTERLY ALONG A CURVE CONCAVE 90°, AN ARC DISTANCE OF 31.42 FEET
THROUGH A CENTRAL ANGLE OF 31°, AN ARC DISTANCE OF 67.63 FEET; THENCE
NORTHEASTERLY ALONG A TANGENT CURVE CONCAVE SOUTHEASTERLY HAVING A
RADIUS OF 175 FEET THROUGH A CENTRAL ANGLE OF 31°, AN ARC DISTANCE OF 67.63
FEET; THENCE NORTHEASTERLY IN A DIRECT LINE TO THE MOST SOUTHERLY CORNER
OF LOT 7 IN BLOCK A OF TRACT NO. 208, AS SHOWN ON MAP RECORDED IN BOOK 6,
PAGE 49 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE
ALONG THE SOUTHWESTERLY LINE OF SAID BLOCK A NORTH 59°20’ WEST, 312.70 FEET
TO THE MOST WESTERLY CORNER OF LOT 43 IN SAID BLOCK A; THENCE SOUTH 30°40’
WEST, 90.69 FEET TO THE TRUE POINT OF BEGINNING.
APN: 004-961-047
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Ground Lease
Stargell Commons
Exhibit B
Exhibit B
Memorandum of Ground Lease
[attached]
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Ground Lease
Laurel Creek Apartments
Exhibit A
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, Ca. 93401
Attn: City Clerk
MEMORANDUM OF GROUND LEASE
[For review by title.]The Undersigned Grantor(s) Declare(s): DOCUMENTARY
TRANSFER TAX $____________; CITY TRANSFER TAX $;
SURVEY MONUMENT FEE $
[ ] computed on the consideration or full value of property conveyed, OR
[ ] computed on the consideration or full value less value of liens
and/or encumbrances remaining at time of sale,
[ ] unincorporated area; [ ] City of San Luis Obispo, and
[ ] __________________________________
Signature of Declarant
THIS MEMORANDUM OF GROUND LEASE is made and entered into as of
__________, 2016, by and between Housing Authority of San Luis Obispo, a public body,
corporate and politic (the “Lessee”) and the City of San Luis Obispo (the “Lessor”).
The Lessor has leased that certain real property described as 1090 Orcutt, 1092 Orcutt,
and 1105 Laurel in the City of San Luis Obispo, County of San Luis Obispo, California, as more
particularly described in Exhibit A attached hereto, to the Lessee upon the terms and conditions
set forth in that certain written Amended and Restate Ground Lease (the “Lease”) of even date
herewith. The term of the Lease terminates on _____________, 20__.
The purpose of this Memorandum of Ground Lease is to give notice of the Lease and of
the rights created thereby, all of which are hereby confirmed.
[SIGNATURES ON FOLLOWING PAGE]
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Ground Lease
Laurel Creek Apartments
Exhibit A
IN WITNESS WHEREOF, the parties have executed this Memorandum of Ground Lease
as of the day and year first above written.
LESSEE
Housing Authority of the City of San Luis Obispo
By: ________________________
Scott Smith, Executive Director Date
LESSOR
City of San Luis Obispo
By: ________________________
Katie Lichtig, City Manager Date
[ALL SIGNATURES MUST BE NOTARIZED]
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Ground Lease
Laurel Creek Apartments
Exhibit A
State of California }
County of San Luis Obispo }
On , before me, ,
Date Name and Title of the Officer
personally appeared, ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public Place Notary Seal Above
State of California }
County of San Luis Obispo }
On , before me, ,
Date Name and Title of the Officer
personally appeared, ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public Place Notary Seal Above
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the docu ment
to which this certificate is attached and not the truthfulness, accuracy, or validity of that document.
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the docu ment
to which this certificate is attached and not the truthfulness, accuracy, or validity of that document.
6.a
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Ground Lease
Laurel Creek Apartments
Exhibit A
Exhibit A
Legal Description
Real property in the City of San Luis Obispo, County of San Luis Obispo, State of California,
described as follows:
LEASEHOLD IN AND TO THAT PORTION OF LOT 3 IN SECTION 1 IN TOWNSHIP 31 SOUTH,
RANGE 12 EAST, MOUNT DIABLO BASE AND MERIDIAN, IN THE CITY OF SAN LUIS
OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO
THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE DECEMBER 3,
1875, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF ORCUTT ROAD, 40 FEET
WIDE, WITH THE CENTERLINE OR LAUREL LANE, 40 FEET WISE; THENCE ALONG THE
CENTERLINE OF SAID LAUREL LANE NORTH 30°40’ EAST, 303.74 FEET; THENCE SOUTH
59°20’ EAST, 38.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING
SOUTH 59°20’ EAST, 100.00 FEET; THENCE SOUTH 30°40’ WEST, 39.89 FEET TO THE
NORTHERLY LINE OF THE LAND DESCRIBED IN THE DEED TO HENRY A. BERNARD, ET
UX. RECORDED MAY 22, 1953 IN BOOK 711 PAGE 62 OF OFFICIAL RECORDS, IN THE OFFICE
OF THE COUNTY RECORDER OF SAID COUNTY; THENCE ALONG SAID NORTHERLY LINE
SOUTH 82°17’ EAST, 182.52 FEET TO THE NORTHEASTERLY CORNER OF SAID LAND OF
BERNARD AS FOLLOWS: FROM A TANGENT LINE BEARING SOUTH 19°56’ WEST,
SOUTHERLY ALONG A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 175 FEET,
THROUGH A CENTRAL ANGLE OF 20°18’ AN ARC DISTANCE OF 62 FEET; TANGENT TO
SAID CONCAVE NORTHWESTERLY HAVING A RADIUS OF 20 FEET, THROUGH A CENTRAL
ANGLE OF 90°, AND ARC DISTANCE OF 31.42 FEET TO THE NORTHERLY LINE OF ORCUTT
ROAD 40 FEET WIDE; THENCE ALONG SAID ORCUTT ROAD NORTH 89°38’ EAST, 90 FEET
TO THE WESTERLY TERMINUS OF THE COURSE RECITED AS HAVING A BEARING AND
LENGTH OF SOUTH 89°38’ WEST, 197.00 FEET IN THE DEED TO CHARLES E. FREEMAN AND
WIFE RECORDED MAY 1,1957 IN BOOK 890, RECORDER; THENCE ALONG THE WESTERLY
BOUNDARY OF THE LAND DESCRIBED IN SAID DEED TO FREEMAN AS FOLLOWS:
NORTHWESTERLY ALONG A CURVE CONCAVE 90°, AN ARC DISTANCE OF 31.42 FEET
THROUGH A CENTRAL ANGLE OF 31°, AN ARC DISTANCE OF 67.63 FEET; THENCE
NORTHEASTERLY ALONG A TANGENT CURVE CONCAVE SOUTHEASTERLY HAVING A
RADIUS OF 175 FEET THROUGH A CENTRAL ANGLE OF 31°, AN ARC DISTANCE OF 67.63
FEET; THENCE NORTHEASTERLY IN A DIRECT LINE TO THE MOST SOUTHERLY CORNER
OF LOT 7 IN BLOCK A OF TRACT NO. 208, AS SHOWN ON MAP RECORDED IN BOOK 6,
PAGE 49 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE
ALONG THE SOUTHWESTERLY LINE OF SAID BLOCK A NORTH 59°20’ WEST, 312.70 FEET
TO THE MOST WESTERLY CORNER OF LOT 43 IN SAID BLOCK A; THENCE SOUTH 30°40’
WEST, 90.69 FEET TO THE TRUE POINT OF BEGINNING.
APN: 004-961-047
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Memorandum of Ground Lease
Laurel Creek Apartments
1
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Ground Lease
Laurel Creek Apartments
Exhibit C
Exhibit C
Grant Deed
[attached]
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Grant Deed
Laurel Creek Apartments
1
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, Ca. 93401
Attn: City Clerk
(Space Above For Recorder's Use Only)
GRANT DEED
[For review by title.]The Undersigned Grantor(s) Declare(s): DOCUMENTARY
TRANSFER TAX $____________; CITY TRANSFER TAX $;
SURVEY MONUMENT FEE $
[ ] computed on the consideration or full value of property conveyed, OR
[ ] computed on the consideration or full value less value of liens
and/or encumbrances remaining at time of sale,
[ ] unincorporated area; [ ] City of San Luis Obispo, and
[ ] __________________________________
Signature of Declarant
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the City of
San Luis Obispo, a public body, corporate and politic hereby GRANT(S) to the Housing
Authority of San Luis Obispo the real property described as 1090 Orcutt, 1092 Orcutt, and
1105 Laurel, located in the City of San Luis Obispo, County of San Luis Obispo, State of
California, described on Exhibit A attached hereto and incorporated herein.
GRANTOR:
The City of San Luis Obispo
By:
Katie Lichtig
City Manager
[ALL SIGNATURES MUST BE NOTARIZED]
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Grant Deed
Laurel Creek Apartments
2
State of California }
County of San Luis Obispo }
On , before me, ,
Date Name and Title of the Officer
personally appeared, ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public Place Notary Seal Above
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the docu ment
to which this certificate is attached and not the truthfulness, accuracy, or va lidity of that document.
6.a
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Grant Deed
Laurel Creek Apartments
3
EXHIBIT A
All buildings, structures and improvements now or at any time hereafter erected, constructed or
situated on the property, which are and shall remain real property, in the City of San Luis Obispo,
County of San Luis Obispo, State of California, described as follows:
LEASEHOLD IN AND TO THAT PORTION OF LOT 3 IN SECTION 1 IN TOWNSHIP 31 SOUTH,
RANGE 12 EAST, MOUNT DIABLO BASE AND MERIDIAN, IN THE CITY OF SAN LUIS
OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO
THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE DECEMBER 3,
1875, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF ORCUTT ROAD, 40 FEET
WIDE, WITH THE CENTERLINE OR LAUREL LANE, 40 FEET WISE; THENCE ALONG THE
CENTERLINE OF SAID LAUREL LANE NORTH 30°40’ EAST, 303.74 FEET; THENCE SOUTH
59°20’ EAST, 38.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING
SOUTH 59°20’ EAST, 100.00 FEET; THENCE SOUTH 30°40’ WEST, 39.89 FEET TO THE
NORTHERLY LINE OF THE LAND DESCRIBED IN THE DEED TO HENRY A. BERNARD, ET
UX. RECORDED MAY 22, 1953 IN BOOK 711 PAGE 62 OF OFFICIAL RECORDS, IN THE OFFICE
OF THE COUNTY RECORDER OF SAID COUNTY; THENCE ALONG SAID NORTHERLY LINE
SOUTH 82°17’ EAST, 182.52 FEET TO THE NORTHEASTERLY CORNER OF SAID LAND OF
BERNARD AS FOLLOWS: FROM A TANGENT LINE BEARING SOUTH 19°56 WEST,
SOUTHERLY ALONG A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 175 FEET,
THROUGH A CENTRAL ANGLE OF 20°18’ AN ARC DISTANCE OF 62 FEET; TANGENT TO
SAID CONCAVE NORTHWESTERLY HAVING A RADIUS OF 20 FEET, THROUGH A CENTRAL
ANGLE OF 90°, AND ARC DISTANCE OF 31.42 FEET TO THE NORTHERLY LINE OF ORCUTT
ROAD 40 FEET WIDE; THENCE ALONG SAID ORCUTT ROAD NORTH 89°38’ EAST, 90 FEET
TO THE WESTERLY TERMINUS OF THE COURSE RECITED AS HAVING A BEARING AND
LENGTH OF SOUTH 89°38’ WEST, 197.00 FEET IN THE DEED TO CHARLES E. FREEMAN AND
WIFE RECORDED MAY 1,1957 IN BOOK 890, RECORDER; THENCE ALONG THE WESTERLY
BOUNDARY OF THE LAND DESCRIBED IN SAID DEED TO FREEMAN AS FOLLOWS:
NORTHWESTERLY ALONG A CURVE CONCAVE 90°, AN ARC DISTANCE OF 31.42 FEET
THROUGH A CENTRAL ANGLE OF 31°, AN ARC DISTANCE OF 67.63 FEET; THENCE
NORTHEASTERLY ALONG A TANGENT CURVE CONCAVE SOUTHEASTERLY HAVING A
RADIUS OF 175 FEET THROUGH A CENTRAL ANGLE OF 31°, AN ARC DISTANCE OF 67.63
FEET; THENCE NORTHEASTERLY IN A DIRECT LINE TO THE MOST SOUTHERLY CORNER
OF LOT 7 IN BLOCK A OF TRACT NO. 208, AS SHOWN ON MAP RECORDED IN BOOK 6,
PAGE 49 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE
ALONG THE SOUTHWESTERLY LINE OF SAID BLOCK A NORTH 59°20’ WEST, 312.70 FEET
TO THE MOST WESTERLY CORNER OF LOT 43 IN SAID BLOCK A; THENCE SOUTH 30°40’
WEST, 90.69 FEET TO THE TRUE POINT OF BEGINNING.
APN: 004-961-047
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1
RECORDING REQUESTED BY:
AND WHEN RECORDED RETURN TO:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, Ca. 93401
Attn: City Clerk
________________________________________________________________________
ASSIGNMENT AND ASSUMPTION OF LEASE
This Assignment and Assumption of Lease (the “Agreement”) is entered into as
of __________________, 2016, by and among Laurel Creek Apartments, a California
Limited Partnership (the “Assignor”), the Housing Authority of San Luis Obispo, a
public body, corporate and politic (the “Assignee”) and the City of San Luis Obispo (the
“City”), with reference to the following facts:
A. Assignee, as “Lessee” and the City, as “Lessor”, entered into that certain
Lease Agreement (Agreement A-24-91-CC) for that certain real propert y situated at 1090
and 1092 Orcutt Road and 1105 Laurel Lane, City of San Luis Obispo, County of San
Luis Obispo, California, dated as of April 29, 1991, between the Assignee and City, a
memorandum of which lease was recorded in the Official Records of San Luis Obispo
County, California (the “Official Records”) on September 17, 1993 as Instrument No.
1993-056148 (the “Lease”). Assignee’s interest in the Lease was assigned to SLO Non-
Profit Housing Corporation (“SLO”) pursuant to an assignment agreement recorded in
the Official Records on November 8, 1993, as Instrument No. 1993-069666. SLO’s
interest in the Original Lease was subsequently assigned to Assignor pursuant to an
assignment agreement recorded in the Official Records on October 20, 1994, as
Instrument No. 1994-061783.
B. The Assignor desires to assign to the Assignee and the Assignee desires to
accept the assignment from Assignor of all of Assignor's obligations with respect to the
Lease.
C. The consent of the City to the assignment of Assignor's rights and
obligations under the Lease is required.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
of the parties hereto and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties mutually agree as follows:
1. Assignment by Assignor. Assignor hereby assigns to the Assignee all of
Assignor's rights, title and interest under the Lease and the Memorandum of Lease.
6.b
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2. Acceptance of Assignment. The Assignee hereby accepts the above assignment
and hereby assumes, agrees and undertakes to perform all of the obligations, covenants,
and agreements of Assignor under the Lease. Any reference to Assignor in the Lease
shall be deemed a reference to the Assignee.
3. Payment of Obligations. The Assignee agrees that all amounts due from Assignor
pursuant to the Lease from the date hereof shall be assumed by the Assignee.
4. Consent to Assignment. The City hereby consents to the assignment of the Lease
from Assignor to the Assignee and hereby releases Assignor from all obligations imposed
under the Lease.
5. Representations of Assignor. Assignor hereby represents and warrants that (i) it
has not previously assigned, pledged, hypothecated or otherwise transferred any of its
rights under the Lease, (ii) no event of default, or event that with notice or the passage of
time or both could constitute an event of default under the Lease, has occurred that
remains uncured as of the date of this Agreement, and (iii) Assignor has obtained all
authorizations and approvals required by law, under its organizational documents and
under the Lease to assign its rights and obligations under the Lease to the Assignee.
6. Representations of the Assignee. The Assignee hereby represents and warrants
that (i) the Assignee has obtained all authorizations and approvals required by law, under
its organizational documents and under the Lease to assume all of Assignor’s rights and
obligations under the Lease, and (ii) that the Assignee has the financial ability and
development experience to carry out the intent of the Lease and to own and operate the
Project in compliance with all of the requirements of the Lease.
7. Effective Date. The assignment set forth above shall be effective as of the date
of this Agreement.
8. Counterparts. This Agreement may be signed by different parties hereto in
counterparts with the same effect as if the signatures to each counterpart were upon a
single instrument. All counterparts shall be deemed an original of this Agreement.
9. Additional Documents. Assignor and the Assignee agree to execute such
documents and instruments, including escrow instructions, as may be necessary to
effectuate the intent of this Agreement.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
6.b
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Assignor:
Laurel Creek Apartments, a California Limited Partnership
By: SLO Non-Profit Housing Corporation, a California nonprofit public benefit
corporation
By:________________________________
Scott Smith, Chief Executive Officer
Assignee:
Housing Authority of San Luis Obispo, a public body, corporate and politic
By: _______________________________
Scott Smith, Executive Director
City:
City of San Luis Obispo
By________________________________
Katie Lichtig, City Manager
[SIGNATURES MUST BE NOTARIZED]
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EXHIBIT A
LEGAL DESCRIPTION
THE LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN LUIS
OBISPO, CITY OF SAN LUIS OBISPO, DESCRIBED AS FOLLOWS:
LEASEHOLD IN AND TO THAT PORTION OF LOT 3 IN SECTION 1 IN TOWNSHIP 31
SOUTH, RANGE 12 EAST, MOUNT DIABLO BASE AND MERIDIAN, IN THE CITY OF
SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA,
ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND
OFFICE DECEMBER 3, 1875, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF ORCUTT ROAD, 40
FEET WIDE, WITH THE CENTERLINE OR LAUREL LANE, 40 FEET WISE; THENCE
ALONG THE CENTERLINE OF SAID LAUREL LANE NORTH 30°40’ EAST, 303.74 FEET;
THENCE SOUTH 59°20’ EAST, 38.00 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING SOUTH 59°20’ EAST, 100.00 FEET; THENCE SOUTH 30°40’
WEST, 39.89 FEET TO THE NORTHERLY LINE OF THE LAND DESCRIBED IN THE
DEED TO HENRY A. BERNARD, ET UX. RECORDED MAY 22, 1953 IN BOOK 711 PAGE
62 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY; THENCE ALONG SAID NORTHERLY LINE SOUTH 82°17’ EAST, 182.52 FEET
TO THE NORTHEASTERLY CORNER OF SAID LAND OF BERNARD AS FOLLOWS:
FROM A TANGENT LINE BEARING SOUTH 19°56 WEST, SOUTHERLY ALONG A
CURVE CONCAVE EASTERLY HAVING A RADIUS OF 175 FEET, THROUGH A
CENTRAL ANGLE OF 20°18’ AN ARC DISTANCE OF 62 FEET; TANGENT TO SAID
CONCAVE NORTHWESTERLY HAVING A RADIUS OF 20 FEET, THROUGH A
CENTRAL ANGLE OF 90°, AND ARC DISTANCE OF 31.42 FEET TO THE NORTHERLY
LINE OF ORCUTT ROAD 40 FEET WIDE; THENCE ALONG SAID ORCUTT ROAD
NORTH 89°38’ EAST, 90 FEET TO THE WESTERLY TERMINUS OF THE COURSE
RECITED AS HAVING A BEARING AND LENGTH OF SOUTH 89°38’ WEST, 197.00 FEET
IN THE DEED TO CHARLES E. FREEMAN AND WIFE RECORDED MAY 1,1957 IN
BOOK 890, RECORDER; THENCE ALONG THE WESTERLY BOUNDARY OF THE LAND
DESCRIBED IN SAID DEED TO FREEMAN AS FOLLOWS: NORTHWESTERLY ALONG
A CURVE CONCAVE 90°, AN ARC DISTANCE OF 31.42 FEET THROUGH A CENTRAL
ANGLE OF 31°, AN ARC DISTANCE OF 67.63 FEET; THENCE NORTHEASTERLY
ALONG A TANGENT CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF
175 FEET THROUGH A CENTRAL ANGLE OF 31°, AN ARC DISTANCE OF 67.63 FEET;
THENCE NORTHEASTERLY IN A DIRECT LINE TO THE MOST SOUTHERLY CORNER
OF LOT 7 IN BLOCK A OF TRACT NO. 208, AS SHOWN ON MAP RECORDED IN BOOK
6, PAGE 49 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID BLOCK A NORTH
59°20’ WEST, 312.70 FEET TO THE MOST WESTERLY CORNER OF LOT 43 IN SAID
BLOCK A; THENCE SOUTH 30°40’ WEST, 90.69 FEET TO THE TRUE POINT OF
BEGINNING.
APN: 004-961-047
6.b
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State of California }
County of San Luis Obispo }
On , before me,
Date Name and Title of the Officer
personally appeared, ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public Place Notary Seal Above
State of California }
County of San Luis Obispo }
On , before me,
Date Name and Title of the Officer
personally appeared, ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public Place Notary Seal Above
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document
to which this certificate is attached and not the truthfulness, accuracy, or validity of that document.
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document
to which this certificate is attached and not the truthfulness, accuracy, or validity of that document.
6.b
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6
State of California }
County of San Luis Obispo }
On , before me,
Date Name and Title of the Officer
personally appeared, ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public Place Notary Seal Above
State of California }
County of San Luis Obispo }
On , before me,
Date Name and Title of the Officer
personally appeared, ,
Name of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Signature of Notary Public Place Notary Seal Above
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document
to which this certificate is attached and not the truthfulness, accuracy, or validity of that document.
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the docu ment
to which this certificate is attached and not the truthfulness, accuracy, or validity of that document.
6.b
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CITY OF SAN LUIS OBISPO
PROMISSORY NOTE
$226,264.00 Date: , 2016
At San Luis Obispo, California
FOR VALUE RECEIVED, The Housing Authority of the City of San Luis Obispo, a public
agency corporate and politic, ("HASLO"), promises to pay to the order of the City of San Luis Obispo
("City") a municipal corporation and charter city in the State of California, at such place as the City may
from time to time designate by written notice to HASLO, the principle sum of Two Hundred Twenty-
Six Thousand Two Hundred Sixty Four Dollars and 00/100 ($226,264.00), without interest. Principal
shall be payable in lawful money of the United States of America.
1. Payment; Maturity. So long as no Event of Default (defined in Section 7 below) has
occurred, no payments of principal shall be due or owing on this Note prior to the date that is 75 years
from the date of this Note (the “Maturity Date”). Upon an Event of Default, the outstanding princi pal of
this Note and any accrued interest, as provided in section 5 below, shall become immediately due and
owing. This Note shall be deemed fully satisfied when the Maturity Date has been reached without an
Event of Default, or the principal amount of this Note, all interest accrued thereon and all other amounts
due hereunder are paid in full.
2. Security. This Note is unsecured.
3. Prepayment. This Note may be prepaid, at any time, in whole or in part, without
premium or penalty.
4. Application of Payments. Each payment under this Note shall be applied (a) first,
at the option of City, to the payment of any other amounts owing under this Note, including, but not
limited to, advances City may have made for attorney fees or late charges due hereunder; and (b) second,
to the reduction of principal of this Note. All payments of principal under this Note shall be applied to the
most remote principal installment then unpaid. Accrued interest shall not be added to the principal
balance of the Note; provided, however, upon an Event of Default all accrued and unpaid interest shall be
added to the principal amount of the Note and interest at the Default Rate shall accrue thereon.
5. Default Rate; Late Charge. Upon an Event of Default the unpaid principal balance
and all accrued interest thereon shall bear interest thereafter at the rate of the Default Rate, but if such
interest rate exceeds the Maximum Rate, then such rate shall be reduced to the Maximum Rate. The term
"Default Rate" means that Interest Rate plus five percent (5.00%) per annum. In addition, if any payment
due under this Note is paid within ten (10) business days after HASLO received written notice of such
failure to pay, HASLO shall pay a reasonable later or collection charge equal to fiv e percent (5.00%) of
the amount so unpaid. City and HASLO agree that the actual damages and costs sustained by City due to
the failure to make timely payments would be extremely difficult to measure and that the charges
specified in this paragraph represent a reasonable estimate by HASLO and City of a fair average
compensation for such damages and costs. Such charges shall be paid by HASLO without prejudice to the
right of City to collect any other amounts provided to be paid under this Note or any other agreement or,
with respect to late payments, to declare an Event of Default.
6.c
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HASLO – Laurel Creek Apartments Promissory Note
Page 2
Usury. Notwithstanding anything herein to the contrary, no provision contained herein shall require the
payment or permit the collection of interest, including any fees and/or charges, in excess of the maximum
non-usurious interest permitted by applicable law ("Maximum Rate"). If any interest in excess of the
Maximum Rate is provided for, or shall be adjudicated to be so provided or, then HASLO shall not be
obligated to pay interest to the extent that it is in excess of the Maximum Rate and any excess interest
which may have been collected shall be either applied as a credit against the then unpaid principal amount
hereof or refunded to HASLO.
6. Event of Default. City and HASLO acknowledge that this Note is being executed
pursuant to the terms and conditions of that certain Amended and Restated Ground Lease dated
________, 2016 (the “Lease”), recorded in the Official Records of San Luis Obispo County as Document
No. __________, concerning real property leased to HASLO by City located at 1090 and 1092 Orcutt
Road and 1105 Laurel Lane, City of San Luis Obispo. A copy of the Lease is attached as Exhibit “A” and
incorporated herein by this reference. HASLO and City further acknowledge that the principal amount of
this Note equals the fair market value of the leasehold interest under the Lease and that payment of any
monies under this Note is contingent upon HASLO’s faithful performance under the Lease and that, an
Event of Default as defined in Article 9 of the Lease shall be cause for payment of principal as provided
herein.
7. Remedies. If any Event of Default occurs under this Note then the whole of the
principal, interest and charges owing on this Note may be declared immediately due a nd payable and City
may exercise all remedies at law, in equity or otherwise, including the right to accelerate the payment of
the principal, interest and charges owing hereunder.
8. Waiver of Presentment. HASLO and all persons liable or to be liable on this Note
waive presentment, demand, notice of dishonor, notice of default, delinquency or acceleration, notice of
intent to demand or accelerate payment or maturity, presentment for payment, and notice of protest and
nonpayment, grace, notice late charges and diligence in taking any action to collect amounts due to City
under this Note or proceeding against any of the rights and interest in and to personal or real property, if
any, securing payment of this Note.
9. No Waiver. No delay on the part of City in the exercise of any power or right under this
Note shall operate as a waiver thereof, and no single or partial exercise of any other power or right shall
operate as a waiver thereof.
10. Miscellaneous.
a. Applicable Law. This Note shall be governed by and construed in accordance
with the laws of the State of California.
b. Severability of Provisions. Each provision of this Note shall be considered
separable and if for any reason any provision which is not essential to the effectuation of the basic
purposes of this Note is determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those provisions of this Note which are valid.
c. Interpretation. Unless otherwise specific, in computing any period of time
described herein, the term "days" means calendar days, unless the final day of any designated period of
time is not a "business day" (as defined below), in which case the period shall run until the end of the next
business day. A "business day" is any day that is not a Saturday, Sunday or legal holiday for national
6.c
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HASLO – Laurel Creek Apartments Promissory Note
Page 3
banks located in California. The last day of any period of time described herein shall be deemed to end at
5:00 p.m., Pacific Time.
d. Headings; Severability. Headings in this Note are for convenience only and do
not define or limit the scope of provisions of this Note. The invalidity or unenforceability of any one or
more provisions of this Note will not affect the validity or enforceability of any other provision.
e. Notices. All notices to be given under this Note must be given in accordance
with the Amended and Restated Ground Lease.
f. Relationship. At all times, the relationship of City and HASLO shall be that of
creditor and debtor. The City shall not, in any event, be constructed or held to be a partner, joint venture
or associate of HASLO in the Conduct of HASLO's business. Nothing in this Note shall be construed to
establish such relationship.
g. Limitation on Recourse. HASLO's officers, partners, officers, directors,
employees or agents nor their respective members, officers, partners, officers, directors, employees or
agents shall be personally liable for the payment of principle, interest and other amounts which may
become due and payable under the Note, except in the case of actual fraud or willful misconduct of such
person.
[Signature appears on the following page]
6.c
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HASLO – Laurel Creek Apartments Promissory Note
Page 4
IN WITNESS WHEREOF, HASLO has executed the Promissory Note as of the date as first
written above.
HOUSING AUTHORITY OF THE CITY OF SAN LUIS OBISPO
By:________________________ ________________________
Scott Smith, Executive Director Date
CITY OF SAN LUIS OBISPO
By: ________________________ _______________________
Katie Lichtig, City Manager Date
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RECORDI' G RE STE 8Y ML O7
ONAM
S-MEET
CITY
Doc No: 1993 - 06966
Official Records
340 3 -81vI. San Luis Obispo Co.
J Francis M. Cooney
Recorder
Nov 08, 1993
Time: 14:29
to]
L
Rec No: 00082009
NF 0.00
TOTAL 0.00
V
ASSIGNMENT OF AGREEMENT A- 24 -91 -CC BETWEEN THE CITY
OF SAN LUIS OBISPO AND THE HOUSING AUTHORITY OF THE CITY OF SAN LUIS
OBISPO FOR CITY OWNED PROPERTY LOCATED AT 1090 ORCUTT ROAD FROM
HOUSING AUTHORITY OF THE CITY OF SAN LUIS OBISPO TO THE SAN LUIS
OBISPO NON - PROFIT HOUSING CORPORATION (approved 12 -1 -92)
Whereas, in April of 1991 the City Council deemed City owned property located at
1090 Orcutt Road as surplus to City needs; and
Whereas, the City Council subsequently leased (Agreement A-24-91 -CC, hereafter
referred to as the Original Lease Agreement) the 1090 Orcutt Road property to the
Housing Authority of the City of San Luis Obispo for a fifty -five year period to develop an
elderly and handicapped housing project; and
Whereas, the Housing Authority of the City of San Luis Obispo has requested to
assign their interest in the Original Lease Agreement to their affiliate, the San Luis Obispo
Non- Profit Housing Corporation, which was created in 1990 for the purposes of securing
advantageous financing for public housing projects; and
Whereas, the lease assignment will allow the Housing Authority of the City of San
Luis Obispo to secure tax credits that will significantly reduce the cost of the elderly and
handicapped housing development; and
Whereas, the Original Lease Agreement between the City and the Housing
Authority of the City of San Luis Obispo requires written approval from the City Council
for any lease assignments to insure that the successor is capable of fulfilling the terms
and conditions of the Original Lease Agreement;
Whereas, the City has reviewed the performance of the San Luis Obispo Non - Profit
Housing. Corporation and. concluded that the Corporation is capable of fulfilling the terms .
and conditions of Original. Lease Agreement between the City and Housing Authority of
the City of San Luis Obispo.
Now, therefore, in consideration of the mutual covenants, conditions, promises and
agreements herein, the City and the Housing Authority of the City of San Luis Obispo
hereby agree to the./following:
1. The'City hereby consents to the assignment of the Original Lease
Agreement with the Housing Authority of the City of San Luis Obispo for
City owned_ property located at 1090 Orcutt Road to the San Luis Obispo
Non- Profit Housing. Corporation for the purposes of developing an elderly
and handicapped housing project..
2. The San Luis Obispo Non - Profit Housing Corporation, hereby assumes and
agrees to fulfill all terms and conditions in the Original Lease Agreement
between the City and the Housing Authority of the City of San Luis Obispo,
and the same shall remain in full force and effect.
A- 24 -91 -CC
reassign of orig. lease)
6.f
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In witness whereof this agreement has been executed by:
APPROVED:
City of San Luis Obispo
By:
ay Peg Pinard
Housing Authority of the City of San Luis Obispo
0
San Luis Obispo Non -Profit Housing Corporation
By:
i Y
ladwel , Ci k
c3
APPROVED AS TO FORM:
LP-
CiV Attorney
i:ha.agr
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State of California
County of San Luis Obispo
qi
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proved to me on the basis of satisfactory ev ) to be the perscn(s) whose
name(s) is /are subscribed to the within instrument and acknowledged to me that
he/ she /they executed the same in his/hex /their authorized capacity(ies), and that
by his /her / their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person (s) acted, executed the instrument.
WITNESS my hand off' seal.
MCraL sFA
signature _ (Seal) SHARIE A. ROOT
NOTARY PUBLIC • CALIFCRMA
SAN LUIS OBISPO COUNTYE9FMyComm. Expires June 20.1994
1
v Y
On / before irre, f
appeared P Yp Y , to me (or
proved to me on the basis of satisfactory ev ) to be the perscn(s) whose
name(s) is /are subscribed to the within instrument and acknowledged to me that
he/ she /they executed the same in his/hex /their authorized capacity(ies), and that
by his /her / their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person (s) acted, executed the instrument.
WITNESS my hand off' seal.
MCraL sFA
signature _ (Seal) SHARIE A. ROOT
NOTARY PUBLIC • CALIFCRMA
SAN LUIS OBISPO COUNTYE9FMyComm. Expires June 20.1994
1
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6.g
Packet Pg. 126
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6.g
Packet Pg. 127
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6.g
Packet Pg. 128
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6.g
Packet Pg. 129
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6.g
Packet Pg. 130
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6.g
Packet Pg. 131
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6.g
Packet Pg. 132
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Packet Pg. 133
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Packet Pg. 134
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