HomeMy WebLinkAboutAgreement A-21-137 Regulatory Agreement.pdf RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
County of Fresno
Department of Behavioral Health
1925 E. Dakota Avenue
Fresno, California 93726
REGULATORY AGREEMENT AND Agreement No. 21-137
DECLARATION OF RESTRICTIVE COVENANTS
Butterfly Gardens
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory
Agreement") is dated April 27 , 2021 and is between the County of Fresno (the "County"),
a political subdivision of the State of California, and UPH Butterfly Gardens, L.P., a
California limited partnership-("Borrower").
RECITALS
A. Defined terms used but not defined in these recitals are as defined in Article 1 of
this Regulatory Agreement.
B. Borrower intends to purchase, or has purchased concurrently, that certain real
property located in the City of Clovis, County of Fresno, State of California, as more particularly
described in Exhibit A(the "Pro e "). Borrower intends to develop thereon seventy-five (75)
housing units located on the Property for rental to low income households, including two (2)
manager's units. Together the Property and its improvements are the "Development".
C. Pursuant to a Promissory Note, dated December 15, 2020 the County is lending
Borrower Three Million Five Hundred Thousand and 00/100 Dollars ($3,500,000) (the "County
Loan")to assist in the construction of the Development.
D. In addition to the Promissory Note, the County Loan is evidenced by a deed of
trust(the "Deed of Trust") among Borrower, as trustor, First American Title Company, as
trustee, and the County, as beneficiary and this Regulatory Agreement (collectively, the "Loan
Documents").
E. The County has agreed to make the County Loan on the condition that Borrower
maintain and operate the Development in accordance with restrictions set forth in this Regulatory
Agreement, and in the related documents evidencing the County Loan.
F. In consideration of receipt of the County Loan, Borrower agrees to observe all the
terms and conditions set forth below.
The parties therefore agree as follows:
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AGREEMENT
ARTICLE 1
DEFINITIONS
1.1 Definitions.
The following terms have the following meanings:
(a) "City" means the City of Clovis, California, a municipal corporation.
(b) "Completion Date" means the date a final certificate of occupancy, or
equivalent document is issued by the City to certify that the Development may be legally
occupied.
(c) "County Loan" has the meaning set forth in Paragraph C of the Recitals.
(d) "Deed of Trust" has the meaning set forth in the Recitals.
(e) "Development" has the meaning set forth in Paragraph B of the Recitals.
(f) "Fifteen Year Compliance Period" means the fifteen(15) year compliance
period as described in Section 42(i)(1) of the Internal Revenue Code of 1986, as amended.
(g) "Investor Limited Partner" means Wincopin Circle, LLLP, a Delaware
limited liability company.
(h) "Loan Documents" has the meaning set forth in Paragraph D of the
Recitals.
(i) "Partnership Agreement" means the First Amended and Restated
Agreement of Limited Partnership, dated on or about March 1, 2021, that governs the operation
and organization of Borrower as a California limited partnership.
0) "Property" has the meaning set forth in Paragraph C of the Recitals.
(k) "Regulatory Agreement" has the meaning set forth in the first paragraph of
this Regulatory Agreement.
(1) "Tenant" means the tenant household that occupies a Unit in the
Development.
(m) "Term" means the term of this Regulatory Agreement which commences
as of the date of this Regulatory Agreement, and unless sooner terminated pursuant to the terms
of this Regulatory Agreement, expires on the fifty-fifth (55th) anniversary of the Completion
Date.
(n) "Transfer" has the meaning set forth in Section 6.1.
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(o) "Unit(s)" means one (1) or more of the units in the Development.
ARTICLE 2
AFFORDABILITY AND OCCUPANCY COVENANTS
2.1 Occupancy Requirements.
(a) During the term of any regulatory agreement associated with the provision
of low income housing tax credits by the California Tax Credit Allocation Committee ("TCAC")
and recorded against the Property(the "TCAC Regulatory Agreement"), Borrower shall abide by
the occupancy standards, occupancy assumptions, income limits, and rent levels that are
permitted by TCAC in the TCAC Regulatory Agreement.
(b) During the term of that certain Regulatory Agreement and Declaration of
Restrictive Covenants (the "Bond Regulatory Agreement"), entered into as of March 1, 2021, by
and between the California Municipal Finance Authority, a joint exercise of powers authority
duly organized and validly existing under the laws of the State of California(together with any
successor to its rights, duties and obligations, the "Issuer") and Borrower, Borrower shall abide
by the occupancy standards, occupancy assumptions, income limits, and rent levels that are
permitted by Issuer in the Bond Regulatory Agreement
(c) Disabled Persons Occupancy.
(1) Borrower shall cause the Development to be operated at all times
in compliance with all applicable federal, state, and local disabled persons accessibility
requirements including, but not limited to the applicable provisions of. (i)the Unruh Act, (ii)the
California Fair Employment and Housing Act, (iii) Section 504 of the Rehabilitation Act of
1973, (iv) the United States Fair Housing Act, as amended, (v)the Americans With Disabilities
Act of 1990, and(vi) Chapters 11 A and 11 B of Title 24 of the California Code of Regulations,
which relate to disabled persons access (collectively, the "Accessibility Requirements").
ARTICLE 3
INCOME CERTIFICATION; REPORTING; RECORDS
3.1 Income Certification. Borrower shall obtain, complete, and maintain on file,
before expected occupancy and annually thereafter, income certifications from each Tenant
renting any of the Units. Borrower shall make a good faith effort to verify the accuracy of the
income provided by the applicant or occupying household, as the case may be, in an income
certification. To verify the information, Borrower shall abide by any terms in the TCAC
Regulatory Agreement or the Bond Regulatory Agreement.
3.2 Reporting Requirements.
(a) Upon the request of County, Borrower shall submit to the County within
one hundred eighty(180) days after the Completion Date, and not later than forty-five (45) days
after the close of each calendar year, or such other date as may be requested by the County, a
report that includes the following data for each Unit: (i) Tenant income, (ii)the number of
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occupants, (iii)the Rent, (iv)the number of bedrooms, and (v) the initial address of each Tenant.
To demonstrate continued compliance with Section 2.1 Borrower shall cause each annual report
after the initial report to include a record of any subsequent Tenant substitutions and any
vacancies in Units that have been filled.
(b) Borrower shall submit to the County within forty-five (45) days after
receipt of a written request, or such other time agreed to by the County, any other information or
completed forms requested by the County.
3.3 Tenant Records. Borrower shall maintain complete, accurate and current records
pertaining to income and household size of Tenants. All Tenant lists, applications and waiting
lists relating to the Development are to be at all times: (i) separate and identifiable from any
other business of Borrower, (ii) maintained as required by the County, in a reasonable condition
for proper audit, and(iii) subject to examination during business hours by representatives of the
County. Borrower shall retain copies of all materials obtained or produced with respect to
occupancy of the Units for a period of at least five (5) years. The County may examine and make
copies of all books, records or other documents of Borrower that pertain to the Development.
3.4 Development Records.
(a) Borrower shall cause all books, records and accounts relating to its
compliance with the terms, provisions, covenants and conditions of the Loan Documents to be
kept and maintained in accordance with generally accepted accounting principles consistently
applied, and to be consistent with requirements of this Regulatory Agreement. Borrower shall
cause all books, records, and accounts to be open to and available for inspection and copying by
the County, its auditors or other authorized representatives at reasonable intervals during normal
business hours. Borrower shall cause copies of all tax returns and other reports that Borrower
may be required to furnish to any government agency to be open for inspection by the County at
all reasonable times at the place that the books, records and accounts of Borrower are kept.
Borrower shall preserve such records for a period of not less than five (5) years after their
creation in compliance accounting requirements. If any litigation, claim, negotiation, audit
exception, monitoring, inspection or other action relating to the use of the County Loan is
pending at the end of the record retention period stated herein, then Borrower shall retain the
records until such action and all related issues are resolved.
(b) The County shall notify Borrower of any records it deems insufficient.
Borrower has fifteen (15) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the County in such notice, or if a period longer than fifteen
(15) days is reasonably necessary to correct the deficiency, then Borrower must begin to correct
the deficiency within fifteen(15) days and correct the deficiency as soon as reasonably possible.
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Compliance with Loan Documents and Regulatory Requirements.
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(a) Borrower's actions with respect to the Property shall at all times be in full
conformity with all requirements of the Loan Documents.
ARTICLE 5
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities. Borrower is responsible for all management
functions with respect to the Development, including without limitation the selection of Tenants,
certification and recertification of household size and income, evictions, collection of rents and
deposits, maintenance, landscaping,routine and extraordinary repairs, replacement of capital
items, and security. The County has no responsibility for management of the Development.
Borrower shall retain a professional property management company approved by the County in
its reasonable discretion to perform Borrower's management duties hereunder. An on-site
property manager shall reside at the Property.
5.2 Management Agent. Borrower shall cause the Development to be managed by an
experienced management agent reasonably acceptable to the County, with a demonstrated ability
to operate residential facilities like the Development in a manner that will provide decent, safe,
and sanitary housing (the "Management Agent").
ARTICLE 6
MISCELLANEOUS
6.1 Transfers.
(a) For purposes of this Agreement, "Transfer" means any sale, assignment,
or transfer, whether voluntary or involuntary, of. (i) any rights and/or duties under the Loan
Documents; and/or(ii) any interest in the Development, including (but not limited to) a fee
simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a
security interest, or an interest evidenced by a land contract by which possession of the
Development is transferred and Borrower retains title. The term "Transfer" excludes the leasing
of any single unit in the Development to an occupant in compliance with this Regulatory
Agreement.
(b) Except as otherwise permitted in this Section 6.1, or as set forth in the
County Loan Documents,no Transfer is permitted without the prior written consent of the
County, which the County may withhold in its reasonable discretion.
(c) The County hereby approves the admission of the Investor Limited
Partner,to Borrower as limited partner. The County hereby approves future Transfers of the
limited partner interest of Borrower provided that: (i) such Transfers do not affect the timing and
amount of the Investor Limited Partner capital contributions provided for in the Partnership
Agreement(as such capital contributions may be adjusted pursuant to the terms therein); and(ii)
in subsequent Transfers, the Investor Limited Partner or an affiliate thereof, retains a
membership or partnership interest and serves as a managing member or managing general
partner of the successor limited partner.
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(d) The County hereby approves a Transfer of the Property from Borrower to
either general partner of the Borrower, or its affiliate, and an assumption of the County Loan by
such transferee at or prior to the end of the Fifteen Year Compliance Period,provided that: (i)
such Transfer is pursuant to an option or right of first refusal agreement referenced in the
Partnership Agreement, (ii) the assignment and assumption agreement evidencing such Transfer
requires the transferee to expressly assume the obligations of Borrower under the Loan
Documents, and(iii) the County is provided executed copies of all documents evidencing the
Transfer.
(e) The County hereby approves the purchase of the Investor Limited Partner
interest by either general partner of the Borrower, or its affiliate, at or prior to the end of the
Fifteen Year Compliance Period, provided that (i) such Transfer is pursuant to an option or right
of first refusal agreement referenced in the Partnership Agreement, and(ii) the County is
provided executed copies of all documents evidencing the Transfer.
(f) In the event the general partner of Borrower is removed by the limited
partner of Borrower for cause following default under the Partnership Agreement, the County
hereby approves the Transfer of the general partner interest to (i) a 501(c)(3)tax exempt
nonprofit corporation or other entity with a 501(c)(3) tax exempt nonprofit corporation member
or partner, that is selected by the Investor Limited Partner and approved by the County, and(ii)
the Investor Limited Partner or an affiliate thereof,but only for a period not to exceed ninety(90)
days from the date of removal of the general partner, during which time such entity shall
diligently seek a replacement general partner meeting the requirements of subsection (i) above.
6.2 Application of Provisions. The provisions of this Regulatory Agreement apply to
the Property for the entire Term, unless the County Loan is paid in full prior to the end of the
Term, in which event this Regulatory Agreement shall terminate. This Regulatory Agreement
binds any successor, heir or assign of Borrower,whether a change in interest occurs voluntarily
or involuntarily, by operation of law or otherwise, except as expressly released by the County.
The County is making the County Loan on the condition, and in consideration of, this provision,
and would not do so otherwise.
6.3 Intentionally Deleted.
6.4 Covenants to Run With the Land. The County and Borrower hereby declare their
express intent that the covenants and restrictions set forth in this Regulatory Agreement run with
the land, and bind all successors in title to the Property,provided, however,that on the expiration
of the Term said covenants and restrictions expire. Each and every contract, deed or other
instrument hereafter executed covering or conveying the Property or any portion thereof, is to be
held conclusively to have been executed, delivered and accepted subject to the covenants and
restrictions, regardless of whether such covenants or restrictions are set forth in such contract,
deed or other instrument,unless the County expressly releases such conveyed portion of the
Property from the requirements of this Regulatory Agreement.
6.5 Enforcement by the County.
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(a) If Borrower fails to perform any obligation under this Regulatory
Agreement, and fails to cure the default within sixty (60) days after the County has notified
Borrower in writing of the default, the County may enforce this Regulatory Agreement by any or
all of the following actions, or any other remedy provided by law:
(1) Action to Compel Performance or for Damages. The County may
bring an action at law or in equity to compel Borrower's performance of its obligations under this
Regulatory Agreement, and may seek damages.
(2) Remedies Provided Under Loan Documents. The County may
exercise any other remedy provided under the Loan Documents.
6.6 Attorneys' Fees and Costs. In any action brought to enforce this Regulatory
Agreement, the prevailing parry must be entitled to all costs and expenses of suit, including
reasonable attorneys' fees. This section must be interpreted in accordance with California Civil
Code Section 1717 and judicial decisions interpreting that statute.
6.7 Recording and Filing. The County and Borrower shall cause this Regulatory
Agreement, and all amendments and supplements to it, to be recorded in the Official Records of
the County of Fresno.
6.8 Governing Law. This Regulatory Agreement is governed by the laws of the State
of California.
6.9 Waiver of Requirements. Any of the requirements of this Regulatory Agreement
may be expressly waived by the County in writing, but no waiver by the County of any
requirement of this Regulatory Agreement extends to or affects any other provision of this
Regulatory Agreement, and may not be deemed to do so.
6.10 Amendments. This Regulatory Agreement may be amended only by a written
instrument executed by all the parties hereto or their successors in title that is duly recorded in
the official records of the County of Fresno.
6.11 Notices. Any notice requirement set forth herein will be deemed to be satisfied
three (3) days after mailing of the notice first-class United States certified mail, postage prepaid,
addressed to the appropriate party as follows:
County: County of Fresno
Department of Behavioral Health
1925 E. Dakota Avenue
Fresno, California 93726
Attn:
Borrower: UPH Butterfly Gardens, L.P.,
6083 N. Figarden Drive
#656
Fresno, California 93722
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Investor Limited Partner:
Wincopin Circle LLLP
c/o Enterprise Community Asset Management,
Inc.
11000 Broken Land Parkway, Suite 700
Columbia, Maryland 21044
Attention: General Counsel
Such addresses may be changed by notice to the other party given in the same manner as
provided above.
6.12 Severability. If any provision of this Regulatory Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining portions of this Regulatory Agreement will not in any way be
affected or impaired thereby.
6.13 Multiple Originals; Counterparts. This Regulatory Agreement may be executed
in multiple originals, each of which is deemed to be an original, and may be signed in
counterparts.
6.14 Foreclosure. Upon a foreclosure of the Property, or the acceptance of a deed in
lieu of foreclosure,this Regulatory Agreement and the restrictions contained herein shall
automatically terminate, provide that the Borrower does not obtain an ownership interest in the
Property pursuant to such foreclosure or deed in lieu of foreclosure.
[remainder of page intentionally left blank]
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WHEREAS, this Regulatory Agreement has been entered into by the undersigned as of
the date first written above.
COUNTY:
Steve Brandau, Chairman of the Board of
Supervisors of the County of Fresno
ATTEST:
Bernice E. Seidel
Clerk of the Board of Supervisors
County of Fresno, State of California
By:
Deputy
BORROWER:
UPH BUTTERFLY GARDENS, L.P.,
a California limited partnership
By: Butterfly Gardens SHE LLC,
a California limited liability company,
Its Managing General Partner
By: Self-Help Enterprises,
a California nonprofit corporation
Its Sole Member/Manager
By:
Thomas J. Collishaw
President and Chief Executive Officer
By: UPH Butterfly Gardens, LLC,
a California limited liability company,
Its Administrative General Partner
By:
Cullen J. Davis, Manager
9
Signature page
UPH Butterfly Gardens Regulatory Agreement
ACKNOWLEDGMENT
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.
State of California
County of
On , `l ti before me, . C
' (insert name and title of the er)
personally appeared `J►.e�x.. u ,
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. Notary Public K.
CRAFi+o►nia 1
Fresno County
Commission N 2193173
My Comm.Expires May 17,2021
Signature (Seal)
DOC #2021-0075304 Page 11 of 16
WHEREAS,this Regulatory Agreement has been entered into by the undersigned as of
the date first written above.
COUNTY:
COUNTY OF FRESNO, a political subdivision of
the State of California
By.
Drt'ectm,
By-:
Kath aan An ws Counterpart signature Page(s) attached
D r `'rto and made a part hereof,
Borrower:
UPH BUTTERFLY GARDENS,L.P.,
a California limited partnership
By: Butterfly Gardens SHE LLC,
a California limited liability company,
Its Managing General Partner
By: Self-Help Enterprises,
a California nonprofit corporation
Its Sole Member/Manager -
By:
Thomas J. Collish
President and Chief Executive Officer
By: UPH Butterfly Gardens, LLC,
a California limited liability company,
Its Administrative General Partner
Counterpart signature Page(s) attached
hereto and made a part hereof.
By:
Cullen J. Davis,Manager
9
Signature page
UPH Butterfly Gardens Regulatory Agreement
DOC #2021-0075304 Page 14 of 16
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.
STATE OF ILLINOIS )
) ss.
COUNTY OF TULARE j
On APRIL 2.i , 2021, before me, VALERIE PEDRO, Notary Public,
personally appeared THOMAS J. COLLISHAW, who proved to me on the basis of satisfactory
evidence to be the person(() whose name(sr) is/a-Fe subscribed to the within instrument and
acknowledged to me that he/skyey-executed the same in his/hefftheir authorized
capacity(.iesj, and that by his/he##"-r signature(4on the instrument the personal, or the entity
upon behalf of which the persons}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. *my
VALERIE PEDRO
Notary Public-Califoria =
Tulare County f.Commission#2315118
Comm.Expires Dec 10,2023 l!
(fix /tM il/(�O ww�nl
Valerie Pedro, Notary Public
(affix seal in above space)
DOC #2021-0075304 Page 12 of 16
WHEREAS,this Regulatory Agreement has been entered into by the undersigned as of
the date first written above.
COUNTY:
COUNTY OF FRESNO, a political subdivision of
the State of California
By:
Di-reeter;
By. Counterpart signature page(s) attached
Kathtee rus hereto and made a part hereof.
De nsel
Borrower:
UPH BUTTERFLY GARDENS,L.P.,
a California limited partnership
By: Butterfly Gardens SHE LLC,
a California limited liability company,
Its Managing General Partner
By: Self-Help Enterprises,
a California nonprofit corporation Counterpart signature Its SoleMember/Manager page(s) attached
hereto and made a part hereof.
By:
Thomas I Collishaw
President and Chief Executive Officer
By: UPH Butterfly Gardens, LLC,
a California limited liability company,
Its Administrative General Partner
By:
Cullen I Davis,Manager
9
Signature page
UPH Butterfly Gardens Regulatory Agreement
DOC #2021-0075304 Page 15 of 16
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.
STATE OF ILLINOIS )
) Ss.
COUNTY OF COOK 11
On APRIL 21 . 2021, before me, CAITLIN SARACENO, Notary Public,
personally appeared CULLEN J. D"IS, 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.
OFFICIAL SEAL
CAITLIN SARACENO
NOTARY PUBLIC-STATE OF ILLINOIS
MY COMMISSION EXPIRESA 1/20/21
Signature of Nota Public
Caitlin Saraceno
(affix seal in above space)
EXHIBIT A
Legal Description
The land described herein is situated in the State of California, County of Fresno, City of
Clovis, described as follows:
The West 253.25 feet of the North 314.00 feet of Lot 26 of Helm Colony, according to the
offical map thereof recorded on December 22, 1899 in Book 1 at Page 77 of Record of
Surveys, Fresno County Records.
APN: 430-601-01
A-1
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