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OB - Item 3E - Rosemead Senior Housing ComplexesROSEMEAD SUCCESSOR AGENCY STAFF REPORT TO: THE HONORABLE CHAIR AND BOARD MEMBERS FROM: MATTHEW HAWKESWORTH, ASSISTANT CITY MANAGER DATE: APRIL 25, 2012 SUBJECT: ROSEMEAD SENIOR HOUSING COMPLEXES SUMMARY The Rosemead Housing Development Corporation owns and operates two low- income senior housing Facilities. The Angelus Senior Housing facility was built in 1995 and the Garvey Senior Housing Facility was constructed in 2002. Under the laws which regulate affordable housing, these facilities have covenants which require them to be maintained as affordable housing facilities for 35 years and 55 years respectively. The Rosemead Housing Development Corporation (RHDC) is a 501c3 non - profit organization and relies solely upon funding from outside sources to operate and subsidize the rents of these two facilities. As such, the RHDC has an Assistance and Operating Agreement with the City of Rosemead and the Rosemead Community Development Commission (Commission) to provide funding and operational staffing. This agreement provides for the transfer of low and moderate income housing funds from the Community Development Commission to the RHDC to subsidize the costs of the ground lease, administrative overhead and to make up any shortfalls between the rents collected and general operational costs. Staff Recommendation: That the Oversight Board recognize the Ground Leases and Assistance and Operating Agreement as an enforceable obligations and authorize payment from either the low and moderate income housing funds being held by the Successor Agency or through tax increment distribution. BACKGROUND The Angeles Low - Income Senior Housing Complex (Angelus) was constructed in 1995 on a parcel which is owned by the City of Rosemead. Prior to the construction of the facility, a ground lease was approved which provided for annual lease payments to be made over a thirty -five year period beginning with the anniversary date of the occupancy of the facility. Angelus was issued a Certificate of Occupancy on February 7, 1995 and annual ground lease payments have been made from the RHDC to the City of Rosemead each year since. At the same time an Assistance and Operating Agreement between the RHDC, the City of Rosemead and the Commission was approved for the operations and maintenance of the facility. This agreement provided ITEM NO. 3Z City Council Meeting April 25, 2012 Page 2 of 3 for assistance with the funding of pre- construction and construction activities along with the ongoing operations of the facility. In the agreement, the Commission is obligated to reimburse the RHDC for any shortfalls occurring between the gross receipts of rents collected and the permitted operating expenses. This annual shortfall was $220,705 for the 2010 -11 fiscal year and is projected to be approximately the same for the 2011 -12 and 2012 -13 fiscal years. The Garvey Low - Income Senior Housing Complex (Garvey) was constructed in 2002 in conjunction with the construction of the Garvey Community Center on a parcel of land owned by the City of Rosemead. Similar to what was done for the Angelus facility, a ground lease was approved which provided for annual lease payments to be made over a fifty-five year period beginning with the anniversary date of the occupancy of the facility. Garvey was issued a Certificate of Occupancy on September 19, 2002 and annual lease payments have been made from the RHDC to the City of Rosemead each year since. At the same time, a revised Assistance and Operating Agreement was drafted which incorporated the operation , maintenance and funding of both the Angelus and Garvey facilities. With the revised agreement, the Commission continues to be obligated to reimburse the RHDC for any shortfalls occurring between the gross receipts of rents collected and the permitted operating expenses. The annual shortfall for 201 Q- 11 was $238,110 and is also projected to remain stable for the 2011 -12 and 2012 -13 fiscal years. Shortly after the Supreme Court made their ruling regarding ABx1 26 and 27, Senator Steinberg drafted Senate Bill 654 which permitted the transfer of any financial assets or cash from the low and moderate income housing fund of the previous redevelopment agencies to the Successor Agencies for the continued operation of low and moderate income programs. While this Bill was approved by the legislature, it did not contain urgency language and therefore does not go into effect until January 1, 2013.. Furthermore, the Governor has not yet signed this Bill and has made previous references that he does not intend to sign any bills which would extend funding for redevelopment or housing activities. If this Bill is not approved, the Rosemead Successor Agency would have to relinquish more than $2 million dollars which had been set aside for the operation of these two low- income senior housing facilities. Furthermore, if these funds or tax increment funds are not approved for these two facilities, the City would be forced to step down as the Successor Agency for housing related functions. Ultimately, the RHDC would be dissolved and the two complexes would be relinquished to the County's Housing Authority or another non - profit organization in accordance with law. City Council Meeting April 25, 2012 Page 3 of 3 PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Prepared by: Matthew E. Hawkesworth Assistant City Manager Attachments A — Ground Lease for Angelus B — Ground Lease for Garvey C — Assistance and Operating Agreement uCT=-21 -93 THU 8;40 P" ''E (818) 963 -7677 FAX N0, 81F 30969 P.03 Attachment A GROUND LEASE - by and between - CITY -OF ROSEVrE Dn CALIFORNIA (the "City'9 ... ROSEMEAD HOUSING DEVELOPMENT CORPORATION, A CALIFORNIA NON - PROFIT CORPORATION ("RHDC') This Lease is made and entered into by and between the CITY OF ROSEMEAD. a municipal corporation, hereinafter referred to as "City" and ROSEMEAD HOUSING DEVELOPMENT CORPORATION, a California non- profit corporation hereinafter referred to as "RHDC ". 1. Definitions of Land and Development City hereby leases to RHDC and REDO leases from City that certain site in the City of Rosemead, County of Los Angeles, State of California described on the "Legal Description" and shown on the ".Site Map" attached hereto and incorporated herein by this reference as Exhibit Nos. 1 and 2, respectively (the "Land "). The "Development" shall include the Land and the improvements to be constructed thereon as described in the Development Agreement by and between City and RHDC to which this Ground Lease is an attachment (the "Development Agreement" hereinafter). , 2. Term The "Term" of this Lease shall be for thirty -five (35) years, commencing on the Effective Date of the Development Agreement. S. Rent For the period commencing with the Effective Date of the Development Agreement to the expiration of the Term hereof, RTIDC agrees to pay City rental, without prior notice or demand by City, in the sum of Five Thousand Dollars ($5,00d.o0) per month in advance on or before the monthly Ground Lease Page 1 of 8 OCT -21 -93 THU 8;40 PH' ' (818) 963 -7877 FAX N0, 818( 7969 anniversary date of the Effective Date of the Development Agreement (the "Monthly Anniversary Date" hereinafter) for each calendar month during the term of this Lease. Said rental shall be paid to City, without deduction or offset, P. 04 in lawful money of the United States of America, and such payment may be made by means of a check of similar instrument payable to City. City and RHDC hereby agree that said rental amount is equivalent to ten percent (10%) of the fair market value of the Land at the date of City's issuance of a Certificate of Occupancy for the Development. City and RHDC agree to have the Land appraised by an appraiser mutually selected by City and RHDC every five (5) years to determine the then fair market value of the Land, and the rental amount shall be increased to ten percent (10%) of such appraised fair market value, providing that it is higher than the prior year's rent. Additionally, each twelve (12) month period following the City's' issuance of a Certificate of Occupancy for the Development (the LAnnual Anniversary Date" 1herei r), with the exception of every fifth (5th) Annual Anniversary Date whereupon reappraisal results in an increase in rent, the rental amount shall be increased two percent (2 %) per year, or by the percentage increase in the Consumer Price Index, whichever is higher. 4. Use of Development The Land leased hereby shall be utilized by RHDC for the purpose of developing and operating the Development thereon. RHDC shall not use or permit the Development or any part thereof to be used for any purpose or purposes other than the purpose or purposes for which the Land is hereby leased. The Development shall be operated in accordance with the Assistance and Operating Agreement by and among City to which this Ground Lease is an attachment (the "Assistance and Operating Agreement" hereinafter). 5. Insurance Rates No use shall be made or permitted to be made of the said Development, nor acts done, which will increase the existing rate of insurance, or cause a cancellation of any insurance policy covering said Development, or any part thereof, nor shall RRDC sell, or permit to be sold, kept, or used, in or about said Development, any article which may be prohibited by the standard form of fire insurance policies. RHDC shall, at its sole cost and expense, comply with any and all requirements, pertaining to said Development, of any insurance Ground Lease Page2of8 OCT -21 -93 THU 8;41 PHC (818) 963 -7877 FAX NO. 8189' 369 organization or company, necessary for the maintenance of reasonable fire and public liability insurance, covering said Development and appurtenances. 6. waste - RHDC shall not commit, or suffer to be committed, any waste upon the Development, or any nuisance, or other act or thing which may disturb the quiet enjoyment of any tenant in the building. 7. - Alterations RHDC shall not make, or suffer to be made, any alterations in excess of $100,000 to said Development, or any part thereof, without the prior written consent of City, and any additions to, or alterations of, the said Development, except movable furniture and trade fiidures, shall become at once a part of the realty. P=C shall keep the demised Land and the entire Development free from any liens arising out of any work performed, material furnished, or obligations incurred by RHDC. 8. Utilities RHDC shall pay for all gas, heat; light, power, water, telephone service, and all other services supplied to the Developmont and assume responsibility for all electricity and plumbing. 9. Abandonment REEDC shall not vacate or abandon the Development at any time during the term; and if REDO shall abandon, vacate, or surrender said Development, or be dispossessed by process of law, or otherwise, any personal property belonging to REiDC and left in the Development shall be deemed to be abandoned, at the option of City, except such property as may be mortgaged to City. ' 10. Maintenance RHDC shall, at its sole cost, keep and maintain said Development and appurtenances and every part thereof , including windows and skylights, and sidewalks adjacent to said Development in, good and sanitary order, condition and repair. Ground Lease Page 3 of 8 P. 05 00T -21 -93 THU 8:42 PHC" ' (818) 963 -7877 FAX N0. 8189' 1989 11. Acceptance of the Land By entry hereunder, REDO accepts the Land as is, and agrees on the last day of the Term_hereof, or sooner termination of this Lease, to surrender unto City said Development with said appurtenances in good condition less reasonable use and wear thereof and damages by fire, act of God or by the elements excepted, and to remove all of REDC's signs and personal property from said Development. 12. Insurance Requirements RHDC agrees to maintain liability insurance in the amounts required by the City Attorney to be commensurate with the level of risk. 13. Damages caused by Others City shalt not be liable for any temporary failure of supply of water, gas, heat, light, power, air conditioning or janitorial services, nor for the stoppage, leaking or bursting of any gas, water, steam, sewer or other pipe, or water closet, tank, or other fixture, nor for any annoyance, inconvenience or damage caused by any electric or other wire, whether upon the demised Land or in other parts of the Development, nor for any damage caused by water coming or being upon the Development through the roof, or otherwise, nor for any damage arising from any act or neglect of the PJIDC or any other tenant or occupant of the Development, 14. Entry by City RIdDC shall permit City and its agents to enter into jnd upon said Development during the said term, for any cause. 15. Assignments With the exception of the rental of the Units in accordance with the Assistance and Operating Agreement RHDC shall not assign this Lease, or any interest therein, and shall not sublet the said Development or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person (the agents and servants of RFIDC excepted) to occupy or use the said Developmont, or any portion thereof, without the prior written consent of City. Any such assignment or subletting without such consent shall be void, and shall, at the option of City, terminate this Lease, This Lease shall not, nor shall any interest Ground Lease Page 4 of 8 M 06T -21 -93 THU 8:42 PHC" ' (818) 963 -7877 FAX N0, 8189` 1969 P.07 therein, be assignable, as to the interest of RHDC, without the written consent of City. The.covenants and conditions herein contained shall, subject to the provisions as to assignment, apply to and hind the heirs, successors, executors, administrators, and assigns of all the parties hereto. 16. Receivers Either (a) the appointment of a receiver to take possession of all or substantially all of the assets of RHDC, or (b) a general assignment by RHDC for the benefit of creditors, or (c) any action taken or suffered by RHDC under any insolvency or bankruptcy act shall constitute a breach of this Lease by RHDC. 17. Remedies for Breach In the event of any breach of this lease by RHDC, then City, in addition to the option to terminate this lease and other rights and remedies it may have, shall have the immediate right of re-entry and may assume operation of the Development, and may remove all persons and personal property from the Development, Should City elect to re- enter, as herein provided, or should City take possession pursuant to legal proceedings or pursuant to any notice provided for by law, City may either terminate this lease or it may from time to time, without terminating this lease, re -let said Development or any part thereof for such term or terms (which may be for a term extending beyond the term of this Lease) and at such rental or rentals and upon such other terms and conditions as City in its sole discretion may deem advisable with the right to make alterations and repairs to said Development. 18. Condemnation If any part of the Development shall be taken or condemned for a public or quasi - public use, and a part thereof remains which is susceptible of occupation hereunder by RHDC, this Lease shall, as to the part so taken, terminate as of the date title shall vest in the'condemnor, and the rent payable hereunder shall be adjusted so that the RHDC shall pay to City each month for the remainder of the term on that portion of the rent as the fractional area remaining after the condemnation bears to the total area of the Development prior to the date of condemnation, but in such event City shall have the option to terminate this Lease as of the date when title to the part so condemned vests in the condemnor. If all the Development, or such part thereof be taken or Ground Lease Page 5 of 8 OOTT21 -93 THU 8:43 PHC— (818) 963 -7877 FAX NO. 8189E "969 condemned so that there. no longer remains a portion susceptible for occupation hereunder, this Lease shall thereupon fermi ate. 19. Time Time is of the essence of this Lease. IN .WITNESS WHEREOF, City and Rosemead Housing Development Corporation have executed this Lease as of the latest date set forth opposite their respective signatures. Dated: 0 - '0 r Zf. 1993 CITY ATTEST: �4jlypmm. =W ROSEMEAD HOUSING AEVELOPMENT CORPORATION L MAIN Ground Lease Page 6 of 8 M V ` Exhibit No.1 Legal Description PARCEL 1: THAT PORTION OF LOT 11'-OF TRACT 4610, IN THE CITY OF ROSEMEAD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOR 93 PAGES 12 AND 13 OF, MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING NORTHEASTERLY OF THE NORTHEASTERLY LINE OF THE STORM DRAIN CHANNEL AS SHOWN ON SAID MAP. PARCEL 2: THAT PORTION OF LOT 5 OF RICHARD GARVEY'S ADDITION NUMBER 2, IN THE CITY OF ROSEMEAD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOR 70 PAGES 69 TO 71 INCLUSIVE OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEASTERLY CORNER OF LOT 11 OF TRACT NO. 4610, AS PER MAP RECORDED IN BOOR 93 PAGES 12 AND 13 OF MAPS, RECORDS OF SAID COUNTY; THENCE ALONG THE NORTHERLY LINE OF SAID LOT 11, NORTH 89 DEGREES 49 MINUTES 25 SECONDS WEST 150 FEET; THENCE PARALLEL WITH THE EASTERLY LINE OF SAID LOT 5, NORTH 0 DEGREES 13 MINUTES 20 SECONDS EAST 50 FEET; THENCE PARALLEL WITH SAID, NORTHERLY LINE SOUTH 89 DEGREES 49 MINUTES 25 SECONDS EAST 150 FEET TO SAID EASTERLY LINE; THENCE ALONG SAID EASTERLY LINE SOUTH 0 DEGREES 13 MINUTES 20 SECONDS WEST 50 FEET TO THE POINT OF BEGINNING. Ground Lease Page 7 of 8 Exhibit No. 2 Ground Lease Page 8.of 8 Attachment B GROUND LEASE by and between CITY OF ROSEMEAD, CALIFORNIA (the "City") and ROSEMEAD HOUSING DEVELOPMENT CORPORATION, A CALIFORNIA NON - PROFIT CORPORATION ( "RHDC ") This Lease is made and entered into by and between the CITY OF ROSEMEAD, a municipal corporation, hereinafter referred to. as "City" and ROSEMEAD HOUSING DEVELOPN ENT CORPORATION, a Califomia non - profit corporation hereinafter referred to as'RI-1DC1% 1. Definitions of Land and Development City hereby leases to RHDC and RHDC leases from City that certain site in the City of Rosemead, County of Los Angeles, State of California described on the "Legal Description" and shown on the "Site Map" attached hereto and incorporated herein by this reference as Exhibit Nos. 1 and 2, respectively (the "Land'. The "Development" shall include the Land and a 72 -unit senior citizen complex to be constructed thereon as approved by the City of Rosemead_ 2. Term The '"Term" of this Lease shall be for fifty -five (55) years, commencing on the Effective Date of this Lease. 3. Rent For the period commencing with the Effective Date of the Lease to the expiration of the Term hereof, RHDC agrees to pay City rental, without prior notice or demand by City, in the sum of Six Thousand Dollars ($6,000.00) per month in advance on or before the monthly anniversary date of the Effective Date of the Lease (the "Monthly Anniversary Date" hereinafter) for each calendar month during the term of this Lease. Said rental shall be paid to City, without deduction or offset, in lawful money of the United States of America, and such Ground Lease Page 1 of 8 payment may be made by means of a check or simi RHDC hereby agree that said rental amount is eqr market value of the Land at the date of City s issuar Development. City may require RHDC to have the selected by City and RHDC every five (5) years to d Land, and the rental amount shall be increased to t market value, providing that it is higher than the pri (12) month period following the City's issuance Development (the "Annual Ar�ersary Date" hei increased two percent (2 %) pe year, or by the pet Index, whichever is higher. 9'19 instrument payable to City. City and [lent to ten percent (10 1/6) of the fair of a Certificate of Occupancy for the nd appraised by an appraiser mutually rmine the then fair market value of the percent (10 1/6) of such appraised fair year's rent. Additionally, each twelve a Certificate of Occupancy for the [after), the rental amount shall be ntage increase in the Consumer Price 4. Use of Development The Land leased hereby shall be utilized by RHDC for the purpose of operating the Development thereon. RHDC shall not use or permit the Development or any part thereof to be used for any purpose or purposes other than the purpose or purposes for which the Land is hereby leased. The Development shall be operatediin accordance with the Assistance and Operating Agreement by and among City to which this Lease is an attachment (the "Assistance and Operating Agreement" hereinafter). 1 5. Insurance Rates No use shall be made or permitted to be made of the said Development,. nor acts done, which will increase the existing rate of insurance, or cause a cancellation of any insurance policy covering said Development, or any (part thereof, nor shall RHDC sell, or permit to be sold, kept, or used, in or about said D prohibited by the standard form of fire insurance poli expense, comply with any and all requirements, pr insurance organization or company, necessary for the n liability insurance, covering said Development and apps 6. Waste RHDC shall not commit, or suffer Development, or any nuisance, or other act or thing any tenant in the building. 7. Alterations Ground Lease Page 2 of 8 invent, any article which may be RHDC shall, at its sole cost and rg to said Development, of any ance of reasonable fire and public be committed, any waste upon the ;h may disturb the quiet enjoyment of RHDC shall not make, or suffer to be made, any alterations in excess of $100,000 to said Development, or any part thereof, without the prior written consent of City, and any additions to, or alterations of, the said Development, except movable furniture and trade fixtures, shall become at once a part of the realty. RHDC shall keep the Development free from any liens arising out of any work performed, material furnished, or obligations incurred by RHDC. 8. Utilities RHDC shall pay for all gas, heat,-light, power, water, telephone service, and all other services - supplied to the Development and assume responsibility for all electricity and plumbing. 9. Abandonment RHDC shall not vacate or abandon the Development at any time during the term; and if RHDC shall abandon, vacate, or surrender said Development, or be dispossessed by process of law, or otherwise, any personal property belonging to RHDC and left in the Development shall be deemed to be abandoned, at the option of City, except such property as may be mortgaged to City. 10. Maintenance RHDC shall, at its sole cost, keep and maintairi said Development and appurtenances and every part thereof, including windows and skylights, and sidewalks adjacent to said Development in good and sanitary order, condition and repair. 11. Acceptance of the Land By entry hereunder, RHDC accepts the Site as is, and agrees on the last day of the Term hereof or sooner termination of this Lease, to surrender unto City said Development with said appurtenances in good condition less reasonable use and wear thereof and damages by fire, act of God or by the elements excepted, and to remove all of RHDC's signs and personal property from said Development. 12. Insurance Requirements RHDC agrees to maintain liability insurance in the amounts recommended by the City Attorney and confirmed by the City Council to be commensurate with the level of risk 13. Damages caused by Others Ground Lease Page 3 of 8 City shall not be liable for any temporary failure of supply of water, gas, heat, light, power, air conditioning or janitorial services, norl for the stoppage, leaking or bursting of any gas, water, steam, sewer or other pipe, or water closet, tank, or other fixture, nor for any annoyance, inconvenience or damage caused by any electric or other wire, whether upon the demised Land or in other parts of the Developments nor for any damage caused by water I coming or being upon the Development through the roof; or otherwise, nor for any damage arising from any act or neglect of the RHDC or any other tenant or occupant of the Development 14. -Entry by City RHDC shall permit City and its agents to enter into and upon said Development during the said term, for any cause. 15. Assignments With the exception of the rental of the Units in accordance with the Assistance and Operating Agreement RHDC shall not assign this Lease, or any interest therein, and shall not sublet the said Development or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person (the agents and servants of RHDC excepted) to occupy or use the said Development, or any portion thereof, without the prior written consent of City. Any such assignment or subletting without such consent shall be void, and shall, at the option of City, terminate this Lease. This Lease shall not, nor shall any interest therein, be assignable, as to the interest of RHDC, without the written consent of City. Notwithstanding the foregoing, for purposes of obtaining tax credits, RHDC shall be entitled to assign its rights and obligations under this lease to a limited partnership, which RHDC or an entity controlled by RHDC is the general partner. The covenants and conditions herein contained shall, subject to the provisions as to assignment, apply to and blind the heirs, successors, executors, administrators, and assigns of all the parties hereto. 16. Remedies for Breach In the event of any breach of this lease by RHDC, then City, in addition to the option to terminate this lease and other rights and Iremedies it may have, shall have the immediate right of re -entry and may assume operation pf the Development, and may remove all persons and personal property from the Development! Should City elect to re- enter, as herein provided, or should City take possession pursuant to legal proceedings or pursuant to any notice provided for by law, City may either terminate this lease or it may from time to time, without terminating this lease, re -let said Development or any part thereof for such term or Ground Lease Page 4 of 8 1 terms (which may be for a term extending beyond the term of this Lease) and at such rental or rentals and upon such other terms and conditions as City in its sole discretion may deem advisable with the right to make alterations and repairs to said Development. 17. Condemnation If any part of the Development shall be taken or condemned for a public or quasi- public use, and a part thereof remains which is suitable of occupation hereunder by RHDC, this Lease shall, as to the part so taken, terminate as of the date title shall vest in the condemnor, and the rent payable hereunder shall be adjusted so that the RHDC shall pay to City each month for the remainder of the term on that portion of the rent as the fractional area remaining after the condemnation bears to the total area of the Development prior to the date of condemnation; but in such event City shall have the option to terminate this Lease as of the date when title to the part so condemned vests in the condemnor. If all the Development, or such part thereof be taken -or condemned so that there no longer remains a portion suitable for occupation hereunder, this Lease shall thereupon terminate. 18. Time Time is of the essence of this Lease. IN WITNESS WHEREOF, City and Rosemead Housing Development Corporation have executed this Lease as of the latest date set forth opposite their respective signatures. Dated: V, 2002 CITY ATTEST: By: By: Ma City Clerk ROSEMEAD HOUSING DEVELOPMENT CORPORATION � I l ,/ Ground Lease Page 5 of 8 Ground Lease Page 6 of 8 1 Exhibit No. 2 Site Map [Site Map on file with City Planning Department] Ground Lease Page 8 of 8 Exhibit No. l Legal Description [Legal Description on file with City Clerk] Ground Lease Page 7 of 81 Attachment C PRECORDING REQUESTED BY AND WHEN RECORDED MAIL TO ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION AND THE CITY OF ROSEMEAD ATTENTION: CITY CLERK/COMMISSION SECRETARY Rosemead, California (Space above for Recorder.) This Agreement is recorded at the request and for the benefit of the Rosemead Community Development Commission and the City of Rosemead, California and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. ASSISTANCE AND OPERATING AGREEMENT THIS ASSISTANCE AND OPERATING AGREEMENT (the "Agreement" hereinafter) is entered into this 13 day of Aja sA, 2002, by and between the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body corporate and politic (the "Commission" hereinafter), the CITY OF ROSEMEAD, CALIFORNIA, a municipal corporation (the "City ") and ROSEMEAD HOUSING DEVELOPMENT CORPORATION, a California non -profit corporation ( "RHDC" hereinafter), with reference to the following: RECITALS A. Commission is a public body corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California. B. City is a municipal corporation organized and existing in the State of California. Assistance and Operating Agreement Page 1 C. RHDC is non -profit California corporation formed for and dedicated to constructing and operating housing within the City of Rosemead which is available at an affordable housing cost to persons and families of very low- income. D. City is fee owner of record of that certain real property (the "Site" hereinafter) located in the City of Rosemead, County of Los Angeles, State of California legally described in Attachment No. 1 attached hereto and incorporated herein by this reference. The Site is the subject of a "Ground Lease" by and between the City and RHDC which provides for the lease of the Site to RHDC and the operation and maintenance thereon of an affordable senior citizen rental housing project on the Site (the Project" hereinafter). The Ground Lease is attached hereto and incorporated herein by this reference as Attachment No. 2. The execution and recordation of this Agreement is a requirement of the Ground Lease. E. This Agreement is entered into by Commission, City and RHDC to encourage the operation of elderly and handicapped housing units available at an affordable housing cost to individuals having a gross income of less than forty percent (40 %) of the area -wide median income. F. Commission and City's assistance to cause the Project and RHDC's operation of the Project on the Site, and the fulfillment generally of this Agreement, are in the best interest of the City of Rosemead and the welfare of its residents, and in accordance with the public purposes and provisions of applicable Federal, State and local laws and requirements. NOW, TBEREFORE, Commission, City and RHDC agree as follows: Assistance and Operating Agreement Page 2 AGREEMENT I. ARTICLE 100 COMMISSION ASSISTANCE A. Section 101 Commission Pre - development, Development and Operating Assistance The Commission shall bear the following costs and expenses related to the Project: 1) "Pre - development ", "Construction costs related to the Project ", and "Pre- operating" costs; and 2) the "Shortfall" occurring between the "Gross Receipts" and the "Operating Expenses" of the Project, all as hereinafter defined. 1. Section 102 Grant of Pre - development, Construction, and Pre - operating Assistance _ Commission shall grant RHDC amounts sufficient to pay for the following defined "Pre - development ", "Construction ", and "Pre- operating" costs and expenses related to the Project as set forth here in the Agreement: "Pre - development Costs" means the following costs and expenses: a) all required third -party engineers, architects and other professionals and consultants required to complete the drawings, plans and specifications required by the City of Rosemead (the "Plans and Specifications" hereinafter); b) preparing bid documents, bidding, selecting and retaining the services of all required third -party contractors required to construct the Project and presenting such bid documents and bidders to the City and/or Commission for approval in accordance with this Agreement; c) securing City, Commission or RHDC approval of this Agreement and the Ground Lease (Attachment No. 2); d) permit processing fees and charges of the City and other governmental agencies having jurisdiction over the Project; and e) RHDC staff used in connection with any of the above activities calculated by dividing said staffs compensation, including salary and benefits and. the City overhead rate, by the approximate percent of the employee's time expended on said activities. Assistance and Operating Agreement Page 3 "Construction Costs" means the costs and expenses incurred by the Commission to cause the construction of the project for the RHCD including all third -party contractual costs, expenses and fees of any kind or nature in connection with constructing the Project on the Site, including without limitation contractor's overhead, labor and materials, machinery and equipment for site work, shell buildings, parking structures, interior and exterior improvements, purchasing and installing all signage, finishing, furniture, fixtures and equipment, landscaping, lighting, recreational facilities, public improvements and all other costs and expenses of construction. Construction Costs shall include the cost of RHDC staff used in connection with any of the above activities calculated by utilizing the same formula for RHDC staff as utilized for pre - development activities. "Pre- operating Expenses" means the costs and expenses incurred by RHDC for: a) selecting and retaining the services of an on -site "Manager ", as defined hereinafter, for the. Project and advertising for, screening and retaining all other personnel required to maintain and operate the Project; b) leasing the Project, including developing the rental agreement and other required documents, advertising the Project, screening applicants and conducting the selection process, as hereinafter defined; c) developing resident programs, operating procedures, rules and regulations, staffing requirements, a budget and other documents and programs required for the operation of the Project on the Site, and presentation of same to City and/or Commission as provided herein for approval; d) RHDC staff used in connection with any of the above activities calculated by dividing the said staffs compensation, including salary and benefits and City overhead rate, by the amount of time spent on said activities. As provided in Section 104 hereof, Commission shall budget unencumbered funds in the amount of the "Pre - development, Construction, and Pre - operating Budget" to be granted to RHDC to pay for the expenses enumerated hereinabove. RHDC agrees that all third -party contractors shall be paid for approved expenses in a timely fashion. RHDC and all parties with which it contracts hereunder shall maintain complete books, accountings and records showing in reasonable detail the activities performed and services provided with respect to the Project and Commission may, from time to time, request such books, accountings and records and reserves the right, at Commission's expense, to perform an audit of same by employing an independent auditor to conduct such audit. If Assistance and Operating Agreement Pa aP d Commission's audit results differ in Commission's favor from the invoices for service submitted by such parry, then Commission shall not be obligated to fund such difference and RHDC shall be obligated to repay such difference to Commission. RHDC hereby ensures that all contracts entered into by it with third -party contractors shall provide these rights to Commission. 2. Section 103 Operating Shortfall Reimbursement Commission shall reimburse RHDC for the "Shortfall" occurring between the "Gross Receipts" and the "Permitted Operating Expenses" of the Project as hereinafter defined. For the purposes of determining the "Shortfall ", the following terms shall have the meanings hereinafter described: a) "Gross Receipts" shall mean any and all income and receipts actually received by RHDC in connection with the use, rental, occupancy and operation of the Project on the Site, including without limitation, all rental and other sums received from the "Tenants" for the rental of the "Units ", as the terms are hereinafter defined, including amounts paid on account of late rental charges, forfeited deposits, various programs provided at the Project for the Tenants, and Tenant use of the laundry facilities., b) "Permitted Operating Expenses" shall mean those costs and expenses approved by Commission in the "Annual Budget" in place at the time a "Statement of Income and Expenses" is submitted by RHDC to Commission, all as described hereinbelow, and incurred by RHDC, including lease payments to the City pursuant to the Ground Lease (Attachment No. 2), expenses for utilities, personnel, supplies and equipment used in connection with the maintenance, repair, refurbishing and operation of the Project, including property management fees, program, promotional and leasing expenses, reserves for building maintenance and capital improvements, capital expenses and improvements to the Project and insurance required hereunder and by the Ground Lease (Attachment No. 2). Such "Shortfall" shall be determined on a quarterly basis, the first quarter commencing on that date which City issues a Certificate of Occupancy for the Project and ending on that date which is three (3) months thereafter. In this connection, RHDC shall prepare and submit to Commission within thirty (30) days following the culmination of each such quarter a "Statement of Income and Expenses" providing its accounting of the Shortfall Assistance and Operating Agreement Page 5 showing in detail how the Shortfall was calculated for such quarter and detailed breakdowns of the Gross Receipts and Permitted Operating Expenses. Such Statement of Income and Expenses shall be prepared consistent with generally acceptable accounting principles for multi- family residential projects. Commission shall have thirty (30) days from such submission to review RHDC's Statement of Income and Expenses, and to approve such Statement and reimburse RHDC for such Shortfall. RHDC shall maintain complete books, _ accountings and records showing in reasonable detail the Gross Receipts and the Permitted Operating Expenses for the Project. The Commission may request such books, accountings and records and reserves the right, at Commission's expense, to perform an audit of same by employing an independent auditor to conduct such audit. 3. Section 104 Management of Project; Management Selection RHDC shall manage or cause the Project to be managed in a prudent and businesslike manner, consistent with first- class, multi- family housing projects and in accordance with the terms of this Agreement. Commission shall have the right, at its sole and exclusive discretion, if Commission has good cause to believe that the Project is being mismanaged in accordance with the terms of this Agreement, to require that RHDC or its approved successor, terminate the services of a given Manager_ 4. Section 105 Insurance REDC shall maintain insurance policies as required by the City attorney, fr6m time to time. Assistance and Operating Agreement Page 6 I1. ARTICLE 200 USES A. Section 201 Use of the Site In recognition of City and Commission assistance to be provided hereunder, RHDC covenants and agrees for itself and its successors and assigns, and every successor in interest to the Site or any part thereof, that during construction and thereafter for the life of the Project, but not less than fifty -five (55) years from the date of the City's-issuance of a Certificate of Occupancy for the Project (the "'Term of the Covenants" hereinafter), R.HDC and any approved successors and assigns shall use the Site exclusively for affordable very Iow income senior citizen rental housing and in accordance with this Assistance and Operating Agreement. III. ARTICLE 300 COVENANTS A. Section 301 Operating and Rental Covenants RMC covenants and agrees to operate on the Site for the Term of the Covenants the Project consisting of one (1) and two (2) bedroom units designed for occupancy by an on -site "Manager ", for rental to "Qualifying Tenants ", as hereinafter defined, each of which shall be available at an "Affordable Housing Cost ", as that term is hereinafter defined (the "Units" hereinafter). "Affordable Housing Cost" for the purposes of this Agreement shall mean the rental of the Unit, including a reasonable allowance for utility expenses, shall not exceed, forty percent (40 %) of the median income adjusted by household size for the rental unit. Gross Income shall include, but not be limited to wages, salaries, overtime, commission, tips, bonuses, unemployment, disability, worker's compensation, severance pay, interest and dividends, social security, annuities, pensions, retirement funds, insurance policies, disabuiltiy or death benefits, alimony, child support, reular contributions or gins from persons not occupying the unit, and any pulic assistance allowance, including armec service compensation. The Gross Income of each Tenant shall be determined initially by the application for occupancy and annually thereafter by the Executed Certification of Tenant Eligibility and Income Verification to be submitted on an annual basis by each Tenant substantially in a form consistant with the requirements in State and Federal Law. Assistance and Operating Agreement Page 7 FA RHDC further covenants and agrees: 1) to maintain the above - referenced Units at the stated Affordable Housing Cost for the Term of the Covenants; 2) to refiain from taking any action during such period which may cause the Site to cease to be used for Qualified Tenants; unless specifically required by law or otherwise provided in this Agreement; 3) to use reasonable and good faith efforts to maximize occupancy of the Units on the Site during such period; and 4) to operate uses on the Site only in conformity with all applicable Federal, State and Local laws. RHDC covenants and agrees for itself and its successors and assigns, and every successor in interest to the Site or any part thereof, that RHDC and such successors and assigns shall, subject to the, requirements of applicable law, limit the rental of the Units in the Project to persons and households meeting the following minimum criteria: 1) is sixty-two (62) years of age or older for at least one occupant and 45 -years or older for co- applicants with the exception of live -in attendants for the handicapped which may be any age; and 2) has a Gross Income of forty (40) percent or less of the area -wide median income adjusted for family size pursuant to Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), or its successor, but in no event less than Eight Thousand Eight Hundred Dollars ($8,800) per year; and 3) ownership of no real estate other than a mobile home and having no more than Twenty Thousand Dollars ($20,000) in liquid assets, including but not limited to stocks, bonds, and cash deposits; and 4) a Rosemead resident for at least six (6) months preceding the date of submission of the application for residency, this criterion applying to each person occupying a Unit in the case of multiple- person households; and 5) maintains suitable health for independent apartment living; and 6) shall not have lived in another subsidized unit or benefited from any other rental assistance program for six (6) months prior to submitting an application for residency, and (7) is a qualified alien as defined in Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) or a U.S. citizen. For the purposes of this Agreement a cohabitant is a spouse, or person providing primary physical or economic support to the Qualifying Tenant. Temporary residency of a Unit shall also be permitted, at the request of the Qualifying Tenant or the Qualified Permanent Resident by a person of less than forty -five (45) years of age for a period of up to thirty (30) days in any year. To the extent permissible under State and Federal Laws Qualifying Tenants shall be selected on a first -come first -serve basis in order of submission of applications to the RHDC. Assistance and Operating Agreement Page 8 All unselected households seeking to become tenants shall be placed on a waiting list and notified as Units become available for occupancy in the order of the waiting list Throughout the Term of the Covenants, RHDC shall do each and all of the following= 1) Obtain and maintain or cause to be obtained and maintained on file from each Tenant residing in the Project a copy of such Tenant's executed "Certification of Tenant Eligibility and Income Verification" in substantially the form as Attachment No. 3 attached hereto and incorporated herein by this reference. -2) Permit the Commission to inspect the books and records of RHDC or the management company designated pursuant to this Agreement. 3) Obtain and maintain on file for each Tenant residing in the Project a copy of such Tenant's federal income tax return for the taxable year immediately preceding such Tenant's initial occupancy in the Project or, if such tax return is unavailable, other evidence satisfactory to Commission of income for such year. 4) Prepare and submit to the Commission annually during the Term of the Covenants a "Certification of Continuing Program Compliance ", in substantially the form attached as Attachment No. 4 attached hereto and incorporated herein by this reference, executed by the RHDC and including the percentage of the residential Units of the Project which were occupied by Qualified Tenants at all times during the period since the filing of the last Certification of Continuing Program Compliance. The RHDC or its designated management company will attach to the Commission's copy of the Certification of Continuing Program compliance the Certifications of Tenant Eligibility and Income Verification and any tax returns received from the Tenants occupying Units in the Project. The form of Rental Agreement shall provide for termination of the Rental Agreement with any particular Tenant and consent by such person to immediate eviction for failure to qualify as a Qualified Tenant as a result of any material misrepresentation made by such person with respect to his or her income and income verification. RHDC covenants by and for itself and any successors in interest that there shall be no discrimination against, or segregation ot, any persons, or group of person, on account of sex, race, color, creed, marital status, religion, handicap, national origin or ancestry in the enjoyment of the Site, nor shall RHDC itself, or any person claiming under or through it, Assistance and Operating Agreement Page 9 establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site or any portion thereof. The foregoing covenants shall run with the land and shall remain in effect in perpetuity. REDC shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, creed, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following_ nondiscrimination or nousegregation clauses: 1) In. deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself, or any persons claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2) In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subj ect to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, 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 in the land herein leased." 3) In contracts: "There shall be no discrimination against or segregation of any persons or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, transfer, use, occupancy, tenure or enjoyment of Assistance and Operating Agreement Page 10 land, nor shall the transferee himsel% or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of premises." The foregoing nondiscrinunation covenants shall remain in effect in perpetuity. N. ARTICLE 400 STANDARDS A. _ Section 401 Operating Standards The Manager shall comply with the following standards (the "Standards" hereinafter): 1) Landscape maintenance shall include, but not be limited to: watering/irrigation; fertilization; mowing; edging; trimming of grass; tred and shrub pruning, trimming and shaping of trees and shrubs to maintain a healthy, natural appearance, replacement of diseased or deceased speciments, and safe road conditions and visibility, and not only providing optimum irrigation coverage but also complying with current water conservation techniques; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staling for support of trees. 2) Clean -up maintenance shall include, but not be limited to: maintenance of all sidewalks, paths and other paved areas in such clean and weed -free condition; maintenance of all such areas free of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are property disposed of by maintenance workers. 3) All maintenance work shall conform to all applicable federal and state Occupational Safety and Health Act standards and regulations for the performance of maintenance. Assistance and Operating Agreement Page 11 4) Any and all chemicals, unhealthful substances, and pesticides used in and during maintenance shall be applied only by persons possessing valid California applicators license, and in strict accordance with all governing regulations. Precautionary measures shall be employed recognizing that all areas are open to public access. 5) The Project shall be maintained in good condition and in accordance with the custom and practice generally applicable to comparable first -class multi- family projects in Los Angeles County, California. The Project shall be maintained in conformance and in compliance with the approved construction and architectural plans and design scheme, as the same may be amended from time to time with the written approval of Commission (and the City, if such approval is required) and reasonable first -class multi- family housing maintenance standards. V. ARTICLE 500 COMPLIANCE WITH LAW A. Section 501 REDC Compliance with Federal,.State and Local Laws RHDC shall comply with all local, state and federal laws relating to the uses or condition of the Site, private improvements and public improvements. If any new local laws relating to the uses of or condition of the improvements create a condition or situation that constitutes a lawful nonconforming use as defined by local ordinance with respect to the Site or any portion thereof, then so long as the lawful nonconforming use status remains in effect (i.e., until such lawful- status is property terminated by amortization as provided for in the new local law or otherwise), RHDC and the Manager shall be entitled to enjoy the benefits of such lawfirl nonconforming use pursuant to the lawful nonconforming uses ordinance. VII. ARTICLE 600 COVENANTS RUN WITH TEE LAND; VIOLATION OF COVENANTS; REMEDIES A. Section 601 Covenants Run with the Land Whenever the word "RHDC" is used herein, it shall include any and all successors or assigns, and the provisions hereof are expressly binding upon all such successors or assigns, and the parties agree all such provisions shall run with the land_ Commission shall cause a fully executed copy of this Agreement to be recorded in the Office of the Los Angeles Assistance and Operating Agreement Page 12 County Recorder. Notwithstanding the foregoing, in the event RHDC or its successors or assigns, shall convey its interest in all or any portion of the Site, they shall be free from and after the date of recording such conveyance of all liabilities, respecting the performance of the restrictions, covenants or conditions contained in this Agreement thereafter to be performed with respect to the Site, or any part thereof, it being intended that the restrictions, covenants and conditions shall be binding upon the successors or assigns, provided that the conveying party shall remain liable for any actions prior to the date of conveyance. The 'covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Commission and/or the City, its successors and assigns, as to those covenants which are for their benefit. Commission and/or City are deemed the beneficiaries of the terms and provisions of this Agreement and of the Covenants running with the land, for and in their own rights and for the purposes of protecting the interests of the community. The Agreement and the covenants shall run in favor of the Commission and/or the City without regard to whether the Commission and/or the City has been, remains, or is an owner of any land or interest therein in the Site. Commission and City shall have the exclusive right, if this Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it may be entitled. VIII. ARTICLE 700 MISCELLANEOUS PROVISIONS A. Section 701 Event of Destruction of Project; Extended Coverage and Casualty Insurance RHDC shall have no obligation to repair or replace any improvements which are damaged or destroyed by fire or other casualty except to the extent of insurance proceeds available toi RHDC for such purpose. In this connection, RHDC shall maintain fire and extended coverage casualty insurance (excluding flood and earthquake) for the buildings and structural improvements on the Site for the full replacement cost thereof for the Term of the Covenants. Assistance and Operating Agreement Page 13 Issuance of a Certificate of Occupancy by the City for the Project shall not affect RHDC's obligations under this Section. The foregoing covenants shall remain in effect for the Term of the Covenants.. Assistance and Operating Agreement n___ I e B Section 702 Rights of Access Commission and City, at their sole risk and expense, reserves the right to enter the Site or any part thereof at all reasonable times during ordinary llusiness hours for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site, or monitoring RHDC's compliance with the terms and conditions of this Agreement. C. Section 703 Severability If any provision of this Agreement or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby, it shall not be deemed that any such invalid provision affects the consideration for this Agreement, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. D. Section 704 Agreement Binding on Successors and Assigns The covenants and agreements established in this Agreement shall, without regard to technical classification and designation, be binding on the RHDC and any successor in interest to this Agreement, the Site, or any part thereof, for the benefit of and in favor of the Commission, its successor and assigns, and the City. The covenant, with the exception of the nondiscrimination covenants hereof which shall remain in effect in perpetuity, shall remain in effect for the life of the Project, but in no event for less than fifty-five (55) years from the date of the City's issuance of a Certificate of Occupancy for the Project. Assistance and Operating Agreement Page 15 E. Section 705 Prohibition Against Transfer or Assignment of Agreement No voluntary or involuntary successor in interest of RHDC shall acquire any rights or powers under this Agreement except as expressly set forth herein. From the Effective Date of this Agreement through to the expiration of the Term of the Covenants, RHDC shall not assign any of RHDC's rights or obligations under this Agreement without the prior written consent of Commission having been obtained. In the event of an assignment in violation hereof, or of the Ground Lease with City, Commission's obligation to make the payments described in Article 100 hereof shall cease, or may be amended, at the sole and exclusive discretion of Commission. G. Section 707 Effective Date of Agreement The "Effective Date" of this Agreement shall be the Ground Lease (Attachment No. 2), as specified therein. H. Section 708 Amendment or Waiver of Agreement This Agreement may be amended, or any provision hereof waived, only by written instrument executed by the parties hereto. I. Section 709 Consistency with Tax Credits To the extent this Agreement is inconsistent with Tax Credit Allocation Committee ( "TCAC ") regulatory agreement regarding incomes and rents, compliance with the TCAC regulatory agreement shall constitute compliance with this Agreement. Assistance and Operating Agreement n___ I IN WITNESS WHEREOF, the Commission, City and the RHDC have executed this Agreement. Dated: 2002 COWEMSION ATTEST: By. By Chairm Commission Secretary CITY Byr Mayor ,,,I i By. Chairm ATTEST: Assistance and Operating Agreement Page 17 STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On , 2002, before me, the undersigned, a Notary Public in and for said State, personally appeared and personally known to me or proved to me on the basis of satisfactory evidence to be the persons who executed this instrument as the Chairman and Commission Secretary, respectively, of the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, and acknowledged to me that said Commission approved and executed it. WITNESS my hand and official seal. (SEAL) STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On , 2002, before me, the undersigned, a Notary Public in and for said State, personally appeared and personally known to me or proved to me on the basis of satisfactory evidence to be the persons who executed this instrument as the Mayor and City Clerk, respectively, of the CITY OF ROSEMEAD, and acknowledged to me that said City approved and executed it. WITNESS my hand and official seal. (SEAL) Assistance and Operating Agreement D-- 10 STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On , 2002, before me, the undersigned, a Notary Public in and for said State, personally appeared and personally known to me or proved to me on the basis of satisfactory evidence to be the persons who executed this instrument as the of the ROSEMEAD HOUSING DEVELOPMENT CORPORATION, and acknowledged to me that said Corporation approved and executed it (SEAL) WITNESS my hand and official seal. Assistance and Operating Agreement Page 19 Legal Description [Legal Description on file with City Clerk] Assistance and Operating Agreement Pone �n ATTACHMENT NO.2 Ground Lease Assistance and Operating Agreement Page 21 ATTACHIVIF.Nf' NO.3 TENANT CERTIFICATION OF ELIGIBILITY AND INCOME VERIFICATION Part I — General Information 1. Project Name 2. Project Location 3. Landlord's Name. Part 11 — Unit Information 7. Unit No. 8. Mo. Rent $ 9. No. of Bedrooms 10. No. of Occupants Part III — Affidavit of Renter I, and I as applicants for rental of an Affordable Unit in the above - described Project, do hereby represent and warrant as follows: A. (My /Our) adjusted income (anticipated total annual income) does not exceed forty percent (40 %) of the area -wide median income for the Los Angeles Primary Metropolitan Statistical Area as such income levels are established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 and published by the State Department of Housing and Community Development in the California Administrative Code Assistance and Operating Agreement and is not less than Eight Thousand Eight Hundred Dollars ($8,800.00). (I/We) understand that the applicable median gross income is $ The following computation includes all income (Uwe) anticipate receiving for the twelve (12) month period beginning on the date (Uwe) execute a rental agreement for an Affordable Unit or the date on which (Uwe) will initially occupy such unit, whichever is earlier. 1. For the renter and all family members, include: (a) amount of wages, salaries, overtime pay, commission, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation, workers' compensation and severance pay (before payroll deductions) $ (b) net income from business or profession or rental of property (without deduction for repayment of debts or expansion of business) $ (c) interest and dividends $ (d) periodic receipts such as social security, annuities,_ pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions or gifts from persons not occupying the unit $ (e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes (f) regular or special pay and allowances of a member of armed services (whether or to living in the dwelling) who is head of the family or spouse $ Total Eligible Income: $ Note: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property Assistance and Operating Agreement Page 23 losses; educational scholarships paid directly to the student or education institution; government benefits to a veteran for education; special pay to a servicemen head of family away from home and under hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household, relocation payments under Title 11 of Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience. 2. This affidavit is made with the knowledge that it will be relied upon by the Landlord to determine maximum income for eligibility and (Uwe) deem reliable and that the estimate contained in paragraph I is reasonable and based upon such investigation as the undersigned deemed necessary. 3. (ItWe) will assist the Landlord in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto copies of federal income tax returns for the past two years. 4. (I/We) acknowledge that (Uwe) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my /our) agreement with the Landlord to rent the unit and will additionally enable the landlord to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to (me /us). (UWe) do hereby swear under penalty of perjury that the foregoing statements are true and correct. Date Applicant SUBSCRIBED AND SWORN TO before me this day of (Notary Seal) Assistance and Operating Agreement ^ - -- 11 Notary Public in and for the State of California My Commission expires: Assistance and Operating Agreement Page 25 INCOME VERIFICATION (For Social Security Recipients) TO: SOCIAL SECURITY ADMINISTRATION Ladies and Gentlemen: I have applied for an affordable senior housing rental unit located in a redevelopment housing project in the City of Rosemead. Every income statement of a prospective tenant must be stringently verified. Therefore, in connection with my application for a rental unit, I hereby give my consent to release to the Rosemead Housing Development Corporation, the City of Rosemead or the Rosemead Community Development Commission the specific information requested below. SIGNED: SOCIAL SECURITY NUMBER CURRENT ADDRESS: PHONE: ( DATE: DATE SOCIAL SECURITY MONTHLY BENEFITS BEGAN/WILL BEGIN: SOCIAL SECURITY MONTHLY BENEFIT AMOUNT $ OTHER BENEFITS (Describe and list dollar amount): $ MEDICARE DEDUCTION: $ ARE BENEFITS EXPECTED TO CHANGE: Yes No Assistance and Operating Agreement IF YES, PLEASE STATE DATE AND AMOUNT OF CHANGE: DATE: AMOUNT: $ IF RECIPIENT IS NOT RECEIVING FULL BENEFIT AMOUNT, PLEASE INDICATE REASON AND DATE RECIPIENT WILL START RECEIVING FULL BENEFIT AMOUNT: Fl%WT. WA DATE OF RESUMPTION: SIGNED: NAME: PHONE: L_) PLEASE RETURN FORM TO: DATE: AMOUNT: $ Assistance and Operating Agreement Page 27 The ATTACHMENT NO.4 CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE of the Rosemead Housing Development Corporation (the "RHDC "), hereby represents and warrants that: 1. He /she has read and is thoroughly familiar with the provisions of the Assistance and Operating Agreement (the "Agreement ") by and between the Rosemead Community Development Commigsion, the City of Rosemead and RHDC of which this certification is an attachment. 2. He /She is authorized by RHDC to complete this form. 3. As of the date of this certificate, the following numbers of completed residential units in the Project are (1) occupied by Qualifying Tenants (as such term is defined in the Agreement) or (2) occupied by a Qualifying Tenant which is also handicapped (as set forth in the Agreement) or (ii) are currently vacant since the date a Qualifying Tenant vacated such unit, as indicated: Occupied Qualifying Tenants No. of Units Occupied by Handicapped Tenants: No. of Units Vacant: No. of Units: Assistance and Operating Agreement