21-266 Affordable Housing Regulatory Agreement, 190 West St. James, LLCRECORDING REQUESTED BY:
City of Cupertino
WHEN RECORDED, MAII, TO:
City Clerk's Office
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3255
NQ FEE IN ACCORDANCE
WJTH GOV. CODE 27383
'This document was electronically submitted
to Santa Clara County for recording'
25176986
Regina Alcomendras
Santa Clara County - Clerk-Recorder
11 /23/2021 02:49 PM
Titles:2 Pages: 26
Fees: $0.00
Tax: $0.00
Total: $0.00
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
AFFORDABLE HOUSING REGULATROY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
A Portion of APN 326-27-043
Parcel C of Tract No. 10579 ffled for record on November 18, 2021,
in Book 943 of Maps at Pages 36-43, Santa Clara County Records
Original
0 Conformed Copy
DOC #25176986 Page 2 of 26
AFFORDABLE HOU!SING REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
This Affordable Housing Regulatory Agreement and Declaration of Restrictive
Covenants (the "Agreement") is made and entered into as of 14)4t.(,t, I "+l'\('t'he "Effective
Date"), by and between the City of Cupertino, a municipal corporation (the "City"), and
190 West St. James, LLC., a California limited liability corporation, (the "Developer") ( each
individually a "Party" and together the "Parties"), with reference to the following facis.
RECIT ALS
A. Capitalized terms used but not defined in these recitals are as defined in Article 1
of this Agreement.
B. The Developer owns certain real property located at {tst-iel L A TftcJr !0 10 Sl'l
in the City of Cupertino, County of Santa Clara, as more particularly described in Exhibit
A (the "Property"). The Developer intends to convey a portion of the Propeity to
Cupertino Pacific Associates, a California limited partnership ("CPA") and assign all of
its obligations under this Agreement to CPA (the "CPA Conveyance"), whereupon CPA
will be the Developer hereunder. The Developer intends to construct a senior housing
development for residents aged sixty-two (62) years old and over consisting of forty-eight
(48) units on the Property (the "Development"), of which twenty-nine (29) units shall be
affordable to very low income households with income that is equal to or less than fifty
percent (50%) of Area Median Income and nineteen (19) units shall be affordable to low
income households with income that is equal to or less than sixty percent (60%) of Area
Median Income (all together, the "Units).
C. On May 12, 2020 the Cupertino Planning Commission recommended approval of
all discretionary entitlements for the "Westport Project," which encompasses the
Development, and on August 18, 2020, the Cupertino City Council approved all
discretionary entitlements for the Westport Project, subject to certain conditions (the
"Project Approvals"). The Project Approvals include a density bonus of thirty-five
percent (35o/o) (the "Density Bonus") under Governrnent Code Section 65915 and
Municipal Code Chapter 19,56 (collectively "Density Bonus Law"). Density Bonus Law
requires that the Units included pursuant to the Density Bonus remain affordable to
households at the designated income levels for a fifty-five (55) year period and the
Approved Plans require that the balance of the Units remain affordable to at the
designated levels for a ninety-nine (99) year period. Therefore, of the twenty-nine units to
be affordable to 60% AMI Households, twenty-two (22) units shall remain thus
affordable for ninety-nine (99) years and seven (7) units shall remain thus affordable for
fifty-five (55) years. Of the nineteen (19) units to be affordable to 50% AMI Households,
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DOC #25176986 Page 3 of 26
fourteen (14) units shall remain thus affordable for ninety-nine (99) years and five (5)
units shall remain thus affordable for fifty-five (55) years.
D. Pursuant to Condition number III.9 of Resolution 'No. 20-106, part of the Project
Approvals, prior to the recordation of a final map or issuance of any building permit, an
affordable housing agreement shall be recorded against the Property.
E. The Developer and the City therefore desire to enter this Agreement to fulfill
Condition III.9 and ensure that the Development will be used and operated in accordance
witl'i the requirements and conditions of the Project Approvals.
AGREEMENT
The foregoing recitals are hereby incorporated by reference and made pait of this
Agreement.
1. Definitions. When used in tis Agreement, the following terms shall have the
respective meanings assigned to them in this Section 1.
1.1 "50% AMI Household" means a household with an annual income which
does not exceed fifty percent (50%) of Area Median Income, adjusted for Actual
Household Size pursuant to HCD's published income limits.
1.2 "50% AMI Household Rent" means the maximum rent calculated pursuant
to the BMR Manual for a "very low-income household" for a household size equal
to the number of bedrooms in the subject Unit plus one (counting studio units as
having zero bedrooms).
1.3 "50% Units" means the Units which, pursuant to Section 2.1 below, are
required to be occupied by 50% AMI Households.
1.4 "60% AMI Household" means a household with an annual income which
does not exceed sixty percent (60%) of Area Median Income, adjusted for Actual
Household Size pursuant to HCD's published income limits.
1.5 "60% AMI Household Rent" the maximum rent calculated pursuant to the
BMR Manual for a "low-income household" for a household size equal to the
number of bedrooms in the subject Unit plus one (counting studio units as having
zero bedrooms).
1.6 "60% Units" means the Units which, pursuant to Sectior> 2.1 below, are
required to be occupied by 60% AMI Households.
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1.7 "Actual Household Size" means the actual number of persons in the
applicable household.
1.8 "Agreement" means this Affordable Housing Regulatory Agreement and
Declaration of Restrictive Covenants
1.9 "Area Median Income" or "AMI" means the area median income for Santa
Clara County as published and periodically updated by HCD pursuant to Health
and Safety Code section 50093, adjusted for Actual Household Size.
1.10 "BMR Manual" means the City's Policy and Procedures Manual for
Administering Deed Restricted Affordable Housing Units, adopted by City
Council Resolution 18-024, as it may be amended.
1.11 "City"isdefinedinthefirstparagraphofthisAgreement.
1.12 "Costa-Hawkins Act" means the Costa-Hawkins Rental Housing Act, Civil
Code sections 1954.50 et seq.
1,13 "Default" is defined in Section 7.6.
1.14 "Density Bonus" is defined in Recital C.
1.15 "Density Bonus Law" is defined in Recital C.
1.16 "Developer" is defined in the first paragraph of this Agreement.
1.17 "Development" is defined in Recital B.
1.18 "Director" is the City's Community Development Director or successor
position.
1.19 "Effective Date" is defined in the first paragraph of this Agreement.
1.20 "Extended Term" means ninety-nine (99) years except as modified pursuant
to Section 6.1.
1.21 "Extended Term Units" means Units subject to the Extended Term.
1.22 "Financing Agreement" means collectively (i) any agreement that
Developer enters pursuant to a governmental tax credit or other subsidy or loan
program that is utilized to finance the construction and/or operation of the
Development, and (ii) all statute, regulations and other laws compliance with
which is required as a condition of participation in such governrnental tax credit or
other subsidy or loan program.
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1.23 "HCD" means the California Depanment of Housing and Community
Development or any successor agency.
1.24 "Indemnitees" are defined in Section 7.5.
1.25 "Party" or "Parties" is defined in the first paragraph of this Agreement.
1.26 "Project Approvals" are defined in Recital C.
1.27 "Property" is defined in Recital B.
1.28 "Management Agent" is defined in Section 5.2.
1.29 "Rent" means the total of monthly payments by the Tenant of a Unit for the
following: use and occupancy of the Unit and land and associated facilities,
including parking; any separately charged fees or service charges assessed by
Developer which are required of all Tenants, other than security deposits; an
allowance for the cost of an adequate level of service for utilities paid by the
Tenant, including garbage collection, sewer, water, electricity, gas and other
heating, cooking and refrigeration fuel, but not telephone service or cable TV (as
published annually by the Santa Clara County Housing Authority) ; and any other
interest, taxes, fees, or charges for use of the land or associated facilities and
assessed by a public or private entity other than Developer, and paid by the
I-enant.
1.30 "Standard Term" means fifty-five (55) years except as modified pursuant to
Section 6.1.
1.31 "TCAC Rent" means the maximum rent permissible pursuant to the
California Tax Credit Allocation Committee's rules and regulations for a 50%
Unit or 60% Unit, as applicable.
1.32 "Tenant" means a liouseliold legally occupying a Unit pursuant to a valid lease
with Developer.
1.33 "TenantLease"isdefinedinSection2.7.
1.34 "Term" means the Standard Term or the Extended Term as appropriate; the
plural "Terms" means both the Standard Term and the Extended Term.
1.35 "Unit" means one of the forty-eight (48) rental housing units constructed on
the Property, all of which are subject to the affordability covenants of this
Agreement.
2. Affordability and Occupancy Covenants
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2.1 0ccupancy Requirements. The Units shall be rented to and initially
occupied by, or, if vacant, available for occupancy by 50% and 60% AMI
Households as follows:
a. 50% Units. Developer sliall rent twenty-nine (29) Units to, and sliall
ensure tliat tliese Units are initially occupied Lis,i, or, if vacant, available for
occupancy by, 50% AMI Houseliolds. Twenty-two (22) of tlie 50% Units sliall be
Extended Ten'n Units and seven (7) of tlie 50% Units shall be Standard Tetm
Units.
b. 60% Units. Developer shall rent nineteen (19) Units to, and shall
ensure that these Units are initially occupied by, or, if vacant, available for
occupancy by, 60% AMI Households. Fourteen (14) of the 60o/o Units shall
be Extended term Units and five (5) of the 60% Units shall be Standard
Term Units.
c. Unit Size. The Units shall be of the size set forth in tlie following
cliart; provided that any square footage set forth below is approximate and
unit sizes shall comply with the Project Approvals:
60% Units 50% Units Total
Studio/ 538 sq ft 4 5 19
I-bedroom/ 608 sq ft 11 ' 17 28
2-bedroom/849 sq ft 4 7 11
Total 19 29
2.2 Allowable Rent.
a. Pursuant to Section 4.3 below, Developer shall determine maximum
rents for all Units pursuant to this Agreement and the City's Policy and
Procedures Manual for Administering Deed Restricted Affordable I-Iousing
Units (the "BMR Manual"), as it may be amended.
b. 50% AMI Household Rent Subject to the provisions of Section 2.3,
Rent paid by Tenants of all 50% Units during the Term shall not exceed The
50% AMI Household Rent for the applicable bedroom size.
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c. 60% AMI Household Rent Subject to the provisions of Section 2.3,
Rent paid by Tenants of all 60% Units during the Term shall not exceed the
60% AMI Household Rent for the applicable bedroom size.
d.City Approval of Rents. The initial Rents for all Units shall be
approved by the City prior to occupancy at the time the Developer submits
to the City the marketing plan required by Section 3.1 below. The City shall
review within fourteen (14) days all proposed Rent increases to determine
whether the proposed increases are consistent with the provisions of this
Agreement. Developer shall certify to the City that Developer is not
charging any fee for the use and occupancy of the Unit and land and
associated facilities, including parking, other than Rent to Tenants of the
Units for all of the components of Rent as defined in Section 1.29.
e. Alternative AMI and Rent Determinations. In the event that HCD no
longer publishes the applicable AMI or fails to update the relevant
information for a period of at least eighteen (18) months, the City shall
provide Developer with an altemative method of determining AMI and/or
allowable rents, which shall be reasonably similar, in the City's sole
discretion, to that used by the relevant agency.
f.Varying Rent or Income Levels in Governing Dociunents. In the
event that the BMR Manual and/or an applicable Financing Agreement
prescribe different maximum Rents or qualifying incomes than those set out
in this Agreement, the lowest applicable Rent level and/or the lowest
applicable income level shall apply, except tliat in no event sliall the maximum
Rent be lower tl'ian tlie lowest level tliat would be set by the BMR Manual or this
Agreement as of tl'ie Effective Date unless required by state or federal statute.
2.3 Increased Income of Tenants. If, upon annual recertification of the
income of a Tenant of a Unit, Developer determines that the Tenant no longer
qualifies as a 50% AMI Household, but does qualify as a 60% AMI Household,
the Tenant may continue to occupy the Unit and, upon sixty (60) days written
notice to Tenant, Developer may increase the Tenant's rent to the 60% AMI
Household Rent. Developer shall then rent the next available Unit to a 50% AMI
Household, at a Rent not exceeding the maximum Rent specified in Section 2.2, to
comply with the requirements of Section 2.1. Upon renting the next available Unit
in accordance with Section 2.1, the Unit with the over-income Tenant will be
considered a 60% Unit for purposes of determining compliance with that Section.
2.4 Non-Qualif5ring Household. Except as required by an applicable Fiiiancing
Agreement, if, upon receitificatioi'i ofa Tenant's income, Developer determines that a
Tenant no longer qualifies as a 50% AMI Household or a 60% AMI Household
then the Tenant shall be given written notice that Tenant shall vacate the Unit
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DOC #25176986 Page 8 of 26
three (3) months from the date of the notice, or upon expiration of the Tenant's
lease, whichever is later. The Director, in his or her sole discretion may grant a
three (3) month extension in cases of extreme hardsip. If the Developer is
prohibited by an applicable Financing Agreement from requiring tlie Tenant to vacate tlie
Unit, sucli Tenant shall be peri'nitted to continue to occupy tlie Unit and sucli Tenant's
Rent may be increased to one-twelfth of thiity percent (30%) of tlie liouseliold's actual
income, adjusted for Actual Houseliold Size, ripon sixty (60) days written notice to tlie
Tenant. In eitlier instance, tlie Unit will continue to be classified as a 50% Unit or 60%
Unit, as applicable, until tlie Tenant vacates tlie Unit at wliicli time Developer shall re-
rent tlie Unit to a 50% AMI Horisehold or 60% AMI Household as required to meet tlie
requirements of Section 2. 1 above.
2.5 Termination of Occupancy. Upon termination of occupancy of a Unit by a
Tenant, such Unit shall be deemed to be continuously occupied by a household of
the same income level ( e.g., 50% AMI Household) as the initial income level of
the vacating Tenant, until such Unit is reoccupied, at which time the income
character of the Unit (e.g., 50% Unit) shall be re-determined. In any event,
Developer shall maintain the occupancy requirements set forth in Section 2.1,
except as may be modified by Section 2.3.
2.6 Agreement to Limitation on Rents. The Westport Project, including the
Development, has received approval of a Density Bonus under Density Bonus
Law from the City. The Density Bonus is a form of assistance specified in Chapter
4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government
Code. Civil Code Sections 1954.52(b) and 1954.53(a)(2) of the Costa-Hawkins Act
provide that, where a developer has received such assistance, certain provisions of
the Costa-Hawkins Act do not apply if a developer has so agreed by contract. The
Developer hereby agrees to limit Rents as provided in this Agreement in
consideration of the Developer's receipt of the Density Bonus and further agrees
that any limitations on Rents imposed on the Units are in conformance with the
Costa-Hawkins Act. The Developer further warrants and covenants that the terms
of this Agreement are fully enforceable and waives and agrees to be estopped from
presenting any defense to enforcement on the ground that the Agreement or
enforcement thereof are invalid under the Costa-Hawkins Act.
2.7 Lease Provisions. The Developer shall use a form of Tenant lease (the
"Tenant Lease") approved by the City for the Units. Upon receipt of the
Developer's form of the lease, the City shall approve or disapprove it within thirty
(30) days after submission, provided, however, that if the City provides no
response within thirty (30) days, the form of the lease shall be deemed approved.
The Tenant Lease shall, among other matters:
a. provide for termination of the lease for failure: (1) to provide any
information required under this Agreement or reasonably requested by
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Developer to establish or receitify the Tenant's qualification, or the
qualification of the Tenant's household, for occupancy of a Unit in
accordance with the standards set forth in this Agreement, or (2) to qualify
as a 50% AMI Household or 60% AMI Household, as the case may be, if
the Tenant was initially determined to qualify and such determination was
based on any material misrepresentation made by the Tenant with respect to
the income computation or certification;
b. be for an initial term of not less than one (1) year. After the initial
year of tenancy, the lease may be month to month by mutual agreement of
Developer and the Tenant, however the Rent may not be raised more often
than once every twelve (12) months after such initial year. Developer will
provide each Tenant with at least sixty (60) days' witten notice of any
increase in Rent applicable to such Tenant, and with such further notice as
may be required by Section 2.3;
c. prohibit subleasing of the Unit or any poition of the Unit or any
spaces reserved for the use of the Tenant, contain nondiscrimination
provisions, and include the Tenant's obligation to inform the Developer of
any need for maintenance or repair;
d. allow temiination of the tenancy prior to the end of the stated ternn
for an increase in Tenant's household income above qualifying income for
Low Income Households (provided such tennination is not prohibited by
any applicable Financing Agreement) or for good cause, including violation
of the terms and conditions of the Tenant Lease, violations of house rules,
non-payment of Rent, violations of applicable federal, state, or local law, or
other good cause;
e. include, at Developer's option, the obligation for Tenant to provide a
security deposit not exceeding two months' rent; and
f. OtherwiSe COnfOrm tO tile BMR Mat'tual , eXcept aS tile BMR Manual iS
inconsistent with tliis Agreement; in tlie case of a conflict between the BMR
Mamial and tliis Agreement, this Agreement shall control.
2.8 Security Deposits. Any security deposits collected by Developer or
Developer's agent shall be kept separate and apart from all other funds in a trust
account with a depository insured by the Federal Deposit Insurance Corporation or
other comparable federal deposit insurance program and shall be held and
disbursed in accordance with California law. The balance in the trust account shall
at all times equal or exceed the aggregate of all outstanding obligations, plus
occrued interest thereon.
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Marketing, Income Certification, and Oversight
3.1 Marketing Plan.
a, At least ninety (90) days before the commencement of marketing the
Units, Developer shall provide the City, for its review and approval,
Developer's written tenant selection and affirmative marketing plan for
marketing the Development to income-eligible households, consistent with
subsection (b) below. Upon receipt of the marketing plan, the City shall
promptly review the marketing plan and shall approve or disapprove it
within thirty (30) days after submission, provided, however, that if the City
provides no response within thirty (30) days, the marketing plan shall be
deemed approved. If the marketing plan is not approved, Developer shall
submit a revised marketing plan within thirty (30) days.
b. The marketing plan submitted to the City shall include the
following: means to be used to advertise the Units to the public upon initial
occupancy and as vacancies occur; maintenance of a waiting list; the
amount of any application screening fee to be imposed by Developer;
information to be provided to applicants, including conditions and
restrictions applicable to occupancy of the Units; current Rent; permitted
Rent increases; maximum qualifying income; requirement for annual
income recertification; preferences required by the City; and requirement to
vacate the Unit if the Tenant's household income exceeds the maximum
qualifying income, subject to the any applicable Financing Agreement.
3.2 Income Certification, Non-Discrimination
a. Pursuant to Section 4.3 below, Developer shall determine and certify
Tenant incomes pursuant to this Agreement and the BMR .Manual. In the
event of a conflict between this Agreement and the BMR Manual, this
Agreement shall govern.
b. Developer will obtain, complete and maintain on file, irnrnediately
prior to initial occupancy and aru'iually thereafter, income certifications for
each Tenant renting any of the Units. Developer shall'make a good faith
effort to verify that the income statement provided by an applicant or
Tenant is accurate by taking two or more of the following steps as a part of
the verification process for all members of the Tenant household age
eighteen (18) or older: (a) obtaining copies of payroll stubs or other
verification of employment for the last two consecutive months; (b)
obtaining an income tax return for the most recent tax year; ( c) conducting
a credit agency or similar search, the result of which shall be used solely for
income certification; ( d) obtaining bank statements for the last two
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DOC #25176986 Page 11 of 28
consecutive months; (e) obtaining an income verification form from a
current employer; (f) obtaining an income verification form from the Social
Security Administration and/or the California Department of Social
Services if an adult member of the Tenant's household receives assistance
from either of such agencies; or (g) if the Tenant is unemployed and has no
such tax return, obtain another form of independent verification. Developer
shall make copies of Tenant income certifications available to the City
upon request.
c. Developer will review applications from prospective tenants of
Units, on the same basis as all other prospective tenants, who are recipients
of federal certificates for rent subsidies pursuant to the existing housing
program under Section 8 of the United States Housing Act or any
successor. Developer shall not apply selection criteria to Section 8
certificate or voucher holders that are more burdensome than criteria
applied to all other prospective tenants for the Units, nor shall the
Developer apply or permit the application of management policies or lease
provisions with respect to the Development which have the effect of
precluding occupancy of Units by such prospective tenants.
3.3 Records and Reporting
a. Developer shall maintain complete, accurate and current records
pertaining to the Units, and shall permit any duly authorized representative
of the City to inspect the records, including but not limited to records
pertaining to income and household size of Tenants and Rent charged
Tenants, upon reasonable prior notice during normal business hours. All
Tenant lists, applications and waiting lists relating to the Units shall at all
times be kept separate and identifiable from any other business of
Developer and shall be maintained as required by the City, in a reasonable
condition for proper audit and subject to examination during business hours
by representatives of the City. Developer 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.
b. The City shall notify Developer of any records it deems insufficient.
Developer shall have thirty (30)calendar days after the receipt of such a
notice to correct any deficiency in the records specified by the City in such
notice, or if a period longer than thirty (30)days is reasonably necessary to
correct the deficiency, then Developer shall begin to 6orrect the deficiency
within thirty (30)days and correct the deficiency within sixty (60) days, or
as otherwise agreed by City.
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c. Developer shall provide the City no later than April 1 of each
calendar year following the Effective Date (and no later than December 1
for the operating budget and replacement budgets for the following year),
hardcopies and PDF copies of the following documents:
i, Before and after completion of constnuction of the
Development:
(1) evidence of payment of property taxes or property tax
exemption for the Development, as applicable;
(2) audited financial statements for the Development.
ii. After completion of the Development:
(1) an occupancy report including: (A) the verified
income, household size, and race/ethnicity of tenants of the
Development to the extent voluntarily provided by tenants,;
(B) the Unit size, rent amount and whether these rents include
utilities for all Units; and (C) the date the current tenancy
commenced for each Unit;
(2) certifications of eligibility for all Tenants at the time of
initial occupancy and upon the yearly anniversary of their
continuing tenancies. Such certification shall include verified
income statements. Developer shall retain in the Tenant's file
all verifications of Tenant's income (tax returns, W-2 forms,
paycheck stubs, etc.);
(3) a management report detailing the activities of the
management agent;
(4) A list of any substantial physical defects in the Units,
including a description of any major repair or maintenance
work undertaken or needed in the previous year and measures
taken to maintain the Units in a safe and sanitary condition in
accordance with applicable codes;
(5) the operating reserve balance;
(6) the replacement reserve balance;
d. Withinthirty(30)daysafterreceiptofawrittenrequest,Developer
shall provide any other information or completed forms, or allow the City
to examine and make copies of any books, records or other documents of
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DOC #25176986 Page 13 of 26
Developer which pertain to the Units, as reasonably requested by the City
to ensure compliance with this Agreement.
e. If similar reports on some or all of the Units are required for
regulatory compliance with other financing programs, those reports will
satisfy the requirements of this Section by the City, with respect to the
portion of the requirements of this Section covered by such reports,
provided that copies are provided on an annual basis to the City with an
owner certification addressed to the City certifying that Developer has
complied with this Agreement.
3.4 0n-site Inspection. The City shall have the right to perform on-site
inspections of the Development, including the Units, subject to the rights of
tenants, upon reasonable notice during normal business hours, as is reasonably
required to ensure compliance with this Agreement, but in any case at least once
per year. Developer agrees to cooperate in such inspection(s). If City desires to
inspect the interior of the Units, Developer shall give seventy-two (72) hours'
notice to Tenants, and City shall give Developer sufficient notice to allow such
notice to Tenants.
Operation of the Development
4.1 Residential Use. The Properiy and tne Units shall be used only for
residential purposes and home occupations as provided in Sections 12(a) and (b)
of Table 19.20.020 of the Cupertino Municipal Code, and the Units shall be
operated.and maintained as residences for the Term of this Agreement. No part of
the Units shall be operated as transient housing in which the term of the lease or
rental agreement is less than thirty (30) days. Notwithstanding the foregoing, the
ground floor commercial space is not subject to Table 19.20.020.
4.2 Senior Housing. As proposed by the Developer, the Development shall be
operated at all times in compliance with the provisions of. (a) the Unruh Act,
including but not limited to California Civil Code Sections 51.2, 51.3 and 51.4
which relate to the requirements for lawful senior housing; (b) the United States
Fair Housing Act, as amended, 42 U.S.C. Section 3607(6) and 24 CFR 100.304,
which relate to lawful senior housing; ( c) the California Fair Employment and
Housing Act, Government Code Sections 12900 et seq., which relates to lawful
senior housing; and ( d) any other applicable law or regulation (including the
Americans with Disabilities Act, to the extent applicable to the Development).
Developer shall develop and implement applicable age and other verification
procedures to ensure compliance with the requirements of this Section. The
Developer shall provide the City with a copy of its written verification procedures
The Developer agrees to indemnify, protect, hold harmless, and defend (by
counsel reasonably satisfactory to the City) Indemnitees (as defined in Section 7.5)
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from all claims arising out of the Developer's failure to comply with applicable
legal requirements related to housing for seniors and persons with disabilities
excluding claims resulting from the gross negligence or willful misconduct of the
City. The indemnity provisions of this subsection shall survive expiration of the
Tern or other termination of this Agreement.
4.3 BMR Procedures Manual. Developer will operate the Development in
confoimance with the BMR Manual, except as set out in Section 7.2 below.
4.4 Taxes and Assessnnents. Developer shall timely pay all real and personal
property taxes, assessments and charges and all franchise, income, employment,
old age benefit, withholding, sales, and other taxes assessed against it, or payable
by it that may become a lien or charge against the Property, subject to any
applicable exemptions or right to contest; provided, however, that the Developer
shall have the right to contest in good faith, any such taxes, assessments, or
charges. In the event Developer exercises its right to contest any tax, assessment,
or charge against it, Developer, on final determination of the proceeding or
contest, shall promptly pay or discharge any decision or judgment rendered against
it, together with all costs, charges and interest.
4.5 Compliance Monitoring Reimbursement. Developer shall timely
reimburse the City for the costs of monitoring compliance with the BMR Manual
and this Agreement, provided that Developer's reimbursement obligation shall not
exceed $5000 annually. Such reimbursable costs will be documented by invoices
that the City submits to Developer pursuant to typical City billing practices.
5. Property Management and Maintenance.
5.1 Developer is responsible for all management functions with respect to the
Units, 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 City shall have no responsibility over
management of the Units.
5.2 To perform its management duties hereiu'ider, Developer shall retain a
professional property management company with demonstrated ability to operate
residential facilities like the Development in a manner that will provide decent,
safe, and sanitary housing, approved by the City in its reasonable discretion (as
approved, the "Management Agent"). Developer shall submit such information
about the background, experience, and financial condition of any proposed
Management Agent as is reasonably necessary for the City to determine whether
the proposed Management Agent meets the standard for a qualified Management
Agent set forth herein. Within thirty (30) days of such submission, the City in its
Westport BMR Agreement (City 11 2)
13
DOC #25176986 Page 15 of 26
reasonable discretion shall determine whether that the proposed Management
Agent meets that standard and notify Developer in writing, stating with reasonable
specificity the basis for any disapproval.
5.3 The Development shall at all times be managed by the management
company selected pursuant to section 5.2 or a replacement management company
selected through the same procedure or pursuant to Section 5.4 below.
5.4 Review, Replacement of Management Agent. The City reserves the right
to conduct an annual (or more frequently, if deemed necessary by the City) review
of the management practices and financial status of the Development. The purpose
of each periodic review will be to enable the City to determine if the Development
is being operated and managed in accordance with the requirements and standards
of this Agreement. Developer shall cooperate with the City in such reviews.
a. If, as a result of a periodic review, the City determines in its
reasonable discretion that the Development is not being operated and
managed in accordance with any of the material requirements and standards
of this Agreement, the City shall deliver written notice to Developer,
Developer's senior mortgage lender of record ("Senior Lender") and
Developer's tax credit investor limited partner ("Limited Paitner") of its
intention to cause replacement of the Management Agent, including the
reasons tl'ierefor. Within fifteen (15) days of receipt by Developer of such
written notice, City staff and Developer (and Senior Lender and Limited
Paitner at each's option) shall meet in good faith to consider methods for
improving the financial and operating status of the Development, including,
without limitation, replacement of the Management Agent.
b. If, after such meeting, City staff recommends in writing the
replacement of the Management Agent, Developer shall promptly dismiss
the then Management Agent, terminating its contract as necessary, and shall
appoint as the Management Agent a person or entity approved by the City
pursuant to Section 5.2 above.
c. Any contract for the operation or management of the Developmenl
entered into by Developer shall provide that the contract can be terminated
as set fo'i-tli above. Failure to remove the Management Agent in accordance
with the provisions of this Section shall constitute Default under this
Agreement, and the City may enforce this provision through legal
proceedings as specified in Section 7.4.
5.5 Property Maintenance
Westpoit BMR Agreement (City 112)
14
DOC #25176986 Page 16 of 26
a. Developer shall, for the entire Term of this Agreement, maintain all
interior and exterior improvements, including landscaping and protected
trees, on the Property in accordance with all applicable laws, rules,
ordinances, orders and regulations of all federal, state, county, municipal,
and other governrnental agencies and bodies having or claiming jurisdiction
and all their respective departments, bureaus, and officials (collectively,
"Applicable Standards"). Applicable Standards, which apply equally to
other development projects in the City, include without limitation as of the
date of this Agreement, the following maintenance conditions:
i. Landscaping. Developer shall have landscape maintenance
performed as needed. Developer shall adequately water the
landscaping on the Property in compliance with the City's
Landscape Ordinance (Cupertino Municipal Code sections 14.15 et
seq.) and any applicable agreements entered thereunder. No
improperly maintained landscaping on the Property shall be visible
from public streets and/or rights of way.
ii. Yard Area. No yard areas on the Property shall be left: in an
unrnaintained condition. Unmaintained conditions include without
limitation:
(1) broken or discarded furniture, appliances and other
household equipment stored in yard areas for a period
exceeding one (1) week;
(2) packing boxes, lumber trash, dirt and other debris in
areas visible from public propel ty or neighboring properties;
and
(3) vehicles parked or stored in other than approved
parking areas.
iii. No buildings located on the Property may be left in
an unmaintained condition. Unmaintained conditions include
without limitation:
(1) violations of state law, uniform codes, or City
ordinances;
(2) conditions that constitute an unsightly appearance that
detracts from the aesthetics or value of the Property or
constitutes a private or public nuisance;
(3) broken windows; and
Westpoit BMR Agreement (City 11 2)
15
DOC #25176986 Page 17 of 26
(4) graffiti left in place for a period exceeding seventy-two
(72) hours.
iv. Sidewalks.PursuanttoConditionnumberIII.10ofResolution
No. 20-106, part of the Project Approvals, Developer shall maintain,
repair, and replace as necessary all public sidewalks adjacent to the
Development.
b. In the event that Developer breaches any of the covenants contained
in this Section 5.5 and such Default continues for a period of ten (10) days
after written notice from the City with respect to graffiti, debris, waste
material, and general maintenance or thirty (30) days after written notice
from the City with respect to landscaping and building improvements, then
the City, in addition to whatever other remedy it may have at law or in
equity, shall have the right to enter upon the Property and perform or cause
to be performed all such acts and work necessary to cure the Default;
provided, however, in either case that if such cure cannot reasonably be
effectuated within the timeframe prescribed, the City shall prescribe a
reasonable timeframe within which to complete the work. Pursuant to such
right of entry, the City shall be permitted (but is not required) to enter upon
the Property and perform all acts and work necessary to protect, maintain,
and preserve the improvements and landscaped areas on the Property
according the standards, and to attach a lien on the Property, or to assess the
Property, in the amount of the expenditures arising from such acts and work
of protection, maintenance, and preservation by the City and/or costs of
such cure, which amount shall be promptly paid by Developer to the City
upon demand.
6. Terms, Expiration.
6.1 Terms. The Terms of this Agreement commence on the Effective Date. As to
the Extended Term Units and all parts of the Property not included in a Unit the Term
continues until the ninety-ninth (99th) anniversary of the date of issuance of the last
certificate of occupancy or equivalent certification provided by the Building Division of
the City for an Extended Term Unit; provided, however, if a record of the City's
certification cannot be located or established, the Extended Term will expire on the one
hundredfirst(101st)anniversaryoftheEffectiveDate. AstotheStandardTermUnits
the Term continues until the fifly-fifth (55th) anniversary of the date of issuance of the
last certificate of occupancy or equivalent certification provided by the Building Division
of the City for a Standard Term Unit; provided, however, if a record of the City's
certification cannot be located or established, the Standard Term will expire on the fifty-
seventh (57th) anniversary of the Effective Date.
Westport BMR Agreement (City 112)
16
DOC #25176986 Page 18 of 26
6.2 Notice of Expiration of Term. At least one (1) year prior to the expiration of
either the Extended Term or the Standard Term, Developer shall provide by first class
mail, postage prepaid, a notice to all Tenants in the effected Units containing: (a) the
anticipated date of the expiration of the relevant Term; (b) any anticipated Rent increase
upon the expiration of the Term; (c) a statement that a copy of such notice will be sent to
the City; and (d) a statement that a public hearing may be held by the City on any
objection to such expiration and that the Tenant will receive notice of the hearing at least
fifteen (15) days in advance of any such hearing. Developer shall file a copy of the
above-described notice with the City Manager. In addition, Developer shall comply with
all requirements set forth in California Government Code Sections 65863.10 and
65863. 11 or successor provisions and all other notification required by any state, federal,
or local law.
7.Miscellaneous
7.1 Assignment. This Agreement shall bind any successor, heir or assign of
Developer throughout the Terms, whether a change in interest occurs voluntarily
or involuntarily, by operation of law or otherwise, except as expressly released by
the City. The City approved the Density Bonus on the basis of and in
consideration of, this provision, and would not have done so otherwise.
Notwithstanding the foregoing, Developer may not assign its obligations under
this Agreement without the written consent of the City, which consent shall be in
the City's sole discretion. The City hereby specifically consents to the CPA
Conveyance, including the assignment of this Agreement to CPA.
7.2 Relationship of BMR Manual, Agreement, and Financing Agreements. This
Agreement, the BMR Manual, and any applicable Financing Agreements
independently regulate Units in the development. Developer agrees that the BMR
Manual governs the operation of the Development, except that (a) as to maximum
rents and income levels, the formulation in Section 2.2(f) above applies, (b) in the
event of any inconsistency between the BMR Manual and this Agreement, this
Agreement shall govern and (c) except as to maximum rents and income levels, in
the event of any inconsistency between the BMR Manual and a Financing
Agreement, the Financing Agreement shall govern. Notwithstanding anything
herein to the contrary, to the extent that California law prescribes that TCAC rents
be used in determining 50% AMI Household Rent or 60% AMI Household Rent,
then such rents shall be calculated using TCAC Rents.
7.3 Notice of Financing Agreements. Upon execution, amendment, or
termination of any Financing Agreement at any time during the term of this
Agreement, Developer shall provide City with written notice and, as applicable, a
copy of such agreement. The Developer shall also provide City with sufficient
information to provide any required notice to Senior Lender and Limited Partner.
Westpoit BMR Agreement (City 112)
17
DOC #25176986 Page 19 of 26
7.4 Covenants Running with the Land. The City and Developer hereby declare
their express intent that the covenants and restrictions set forth in this Agreement
shall apply to and bind Developer and its heirs, executors, administrators,
successors, transferees, and assignees having or acquiring any right, title or
interest in or to any part of the Property and shall run with and burden such
portions of the Property until the end of the relevant Term. Until all or portions of
the Property are expressly released from the burdens of this Agreement, each and
every contract, deed or other instrument hereafter executed covering or conveying
the Property or any portion thereof shall be held conclusively to have been
executed, delivered, and accepted subject to such covenants and restrictions,
regardless of whether such covenants or restrictions are set forth in such contract,
deed, or other instrument. In the event of foreclosure or transfer by deed-in-lieu of
all or any portion of the Property prior to completion and sale of all of the Units,
title to all or any portion of the Property shall be taken subject to this Agreement.
Developer acknowledges that compliance with this Agreement is a requirement of
Density Bonus Law and the Project Approvals, and that no event of foreclosure or
trustee's sale may remove these requirements from the Property.
7.5 Indemnification.
a. To the fullest extent allowed by law, Developer shall indemnify and
hold harmless City, its City Council, boards and commissions, officers,
officials, agents, employees, servants, consultants and volunteers
(hereinafter, "Indemnitees") from and against any liability, loss, damage,
expense, and cost (including reasonable legal fees and costs of litigation or
arbitration), resulting from injury to or death of any person, damage to
property, or liability for other claims, stop notices, demands, causes of
actions and actions, arising out of or in any way related to Developer's
performance or nonperformance of its duties under this Agreement, or from
negligent acts or omissions or willful misconduct of Developer, its agents,
employees, contractors, or subcontractors. Developer shall, at his/her own
cost and expense, defend any and all claims, actions, suits or legal
proceedings that may be brought against the City or any of the Indemnitees
(with counsel acceptable to City) in connection with this Agreement or
arising out of Developer's performance or nonperformance of his/her duties
and obligations hereunder, including all claims, demands, causes of action,
liability or loss because of or arising out of, in whole or in part, the
operation of the Property, Units, and/or the Development, except to the
extent any of the foregoing is caused by the negligence or willful
misconduct of the City or the City's agents, employees and independent
contractors.
Westport BMR Agreement (City 112)
18
DOC #25176986 Page 20 of 26
b. Each Party shall notify the other Party by phone as soon as possible
and in writing within twenty-four (24) business hours of any claim or
damage related to activities performed under this Agreement. The Parties
shall cooperate with each other in the investigation and disposition of any
claim arising out of the activities under this Agreement, provided that
nothing shall require either Party to disclose any documents, records or
communications that are protected under the attorney-client privilege or
attorney work product privilege.
c. The provisions of this Section shall survive the expiration of the
Terms and any release of part or all of the Property from the burdens of this
Agreement.
7.6 Default.
a. Failure by Developer to perform any obligation under this
Agreement shall constitute a "Default" by the Developer under this
Agreement.
b. The City shall give written notice to the Developer and Limited
Partner specifying the nahire of the violation giving rise to the Default. If
the violation is not corrected to the satisfaction of City within a reasonable
period of time, not longer than thirty (30) days after the date the notice is
mailed, except as provided herein for specific Defaults, or within such
further time as the City reasonably determines is necessary to correct the
violation, the City may declare a Default under this Agreement by written
notice to the Developer. Notwithstanding anything to the contrary
contained herein, the City agrees that any cure of any default made or
tendered by the Limited Partner shall be deemed to be a cure by the
Developer, and shall be accepted or rejected on the same basis as if made or
tendered by Developer; provided, however, that the Limited Partner shall
not have any obligation to effectuate such cure.
c. Remedies. The occurrence of any Default following the expiration of
all applicable notice and cure periods will give the City the right to proceed
with any and all remedies available at law and equity. The Parties
acknowledge that damages alone would be an inadequate remedy for any
breach of the provisions of this Agreement, and agree that the obligations
of the Parties hereunder may be enforced in equity including, without
limitation, specific performance and injunctive relief.
7.7 Entire Understanding of the Parties. This Agreement constitutes the entire
Agreement between the Parties and no modification shall be binding unless
reduced to writing and signed by the Parties. If there is any conflict between this
Westpoit BMR Agreement (City 112)
19
DOC #25176986 Page 21 of 26
Agreement and any other applicable agreements or Project Approvals, the most
restrictive provisions, as determined by the City in its sole discretion, shall control.
7.8 EachParty"sRoleinDraftingtheAgreement.EachPartytothisAgreement
has had an opportunity to review the Agreement, confer with legal counsel
regarding the meaning of the Agreement, and negotiate revisions to the
Agreement. Accordingly, neither Party shall rely upon Civil Code Section 1654 in
order to interpret any uncertainty in the meaning of the Agreement.
7,9 Recording and Filing. The City and Developer shall cause this Agreement,
and all amendments and supplements to it, to be recorded in the Official Records
of the County of Santa Clara.
7.10 Goveming Law and Venue. This Agreement shall be go'verned by the laws
of the State of California. Venue shall be the County of Santa Clara.
7.11 TitleofPartsandSections.Anytitlesofthesectionsorsubsectionsofthis
Agreement are inserted for convenience of reference only and shall be disregarded
in interpreting any part of the Agreement's pro'visions.
7.12 Attorneys' Fees and Costs. In any action brought to enforce this
Agreement, the prevailing party shall be entitled to all costs and expenses of suit,
including reasonable attorneys' fees. This section shall be interpreted in
accordance with California Civil Code Section 1717 and judicial decisions
interpreting that statute.
7.13 Waiver of Requirements. No waiver of the requirements of this Agreement
shall occur unless expressly waived by the City in writing. No waiver will be
implied from any delay or failure by the City to take action on any breach or
Default of Developer or to pursue any remedy permitted under this Agreement or
applicable law. Any extension of time granted to Developer to perform any
obligation under this Agreement shall not operate as a waiver or release from any
of its obligations under this Agreement. Consent by the City to any act or omission
by Developer shall not be construed to be consent to any other or subsequent act
or omission or to waive the requirement for the City's written consent to future
waxverS.
7.14 Notices. Any notice requirement set forth herein shall be deemed to be
satisfied one business day after deposit with federal express or another reputable
overnight carrier or three (3) days after mailing of the notice first-class United
States certified mail, postage prepaid, addressed to the appropriate Party as
follows:
Westport BMR Agreement (City 112)
20
DOC #25176986 Page 22 of 26
Developer:c/o Pacific West Cornrnunities, Inc.
430 East State Street, Suite 100
Eagle, ID 83616
With a copy to Developer's Tax Credit
Investor Limited Partner:
u.s. Bancoi-p Community Developn'ient
Coiporation
1307 Wasliington Avenue, Suite 300
Mail Code: SL MO RMCD
St. Louis, MO 63103
USB Project No: 27729
Attn.: Director of LIHTC Asset
Management
And:
Kutak Rock LLP
1650 Famam Street
Omaha, NE 68102
Attn: Jill H. Goldstein, Esq.
City:City of Cupertino
10300 Torre A venue
Cupeitino, CA 95014
Attention: City Manager
Such written notices, demands and cornrnunications may be sent in the same
manner to such other addresses as the affected Party may from time to time
designate by mail as provided in this Section. Receipt shall be deemed to have
occurred on the date shown on a written receipt as the date of delivery or refusal of
delivery (or attempted delivery if undeliverable).
7.15 Severability. Except to the extent that it would fnistrate the Parties' intent
in entering into this Agreement, if any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining portions of this Agreement shall not in any way be affected or impaired
thereby.
Westport BMR Agreement (City 112)
21
DOC #25176986 Page 23 of 26
7.16 Multiple Originals: Counterparts. This Agreement may be executed in
multiple originals, each of which is deemed to be an original, and may be signed
in counterparts.
CITY OF CUPERTINO:
Approved as tq fo
CAffistoplier D ensen Greg Larso
Interim City Manager
City Atl:orney
DEVELOPER:
190 West St. James, LLC, a
Califon'iia
Limited Liability Company
Kei'uxeth S. Tersini
Manager
1391879.1
1391879.22
Westport BMR Agreement (City 112)
22
CALIFORNIA ALL-PURPOSE CERTIFICATE OF ACKNOWLEDGMENT
A notary public or other officer completingthis certificate verifies only the identity of the individual who signed the document to
which this certificate is attached, and not the tnithfulness, acairacy, or validity of that document.
State of California
Countyof SantaClara
0H N->v-ex-tle-r /7, 2x:i21 beforeme, K'slen "'luarC'a ,NotaryPublic,
(Here insert name and title of the officer)
personallyappeared Ore-5;Lxrsbn ,
/
who proved to me on the basis of satisfactory evidcnce to be the pcrsot whosc name%__is/are subscribed to
the within instnunent and acknowledged to me that h____e/she/they executed the same in hi_s/her/their authorized
capacit$es), and that by hi_s/her/their signature(g) on the inshument the persor@, or the entity upon behalf of
which the person(s') acted, executed the inshument.
I ccrtify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph
is tnie and correct.
% ik & & & & & & f
4 KIFISTENSQIIARCIA k, ,_ Q Notary Public - California :
MTNESS my hand and official seal. J SantaClaraCounty =
* Commission # 2257]22 r
a , a
I '!!!j' My Comm. Expires act 4, 2022 @
J -as z &
si,"n-\'-""c) (NotarySeal)
* *
ADDITIONAL OPTIONAL INFORMATION
INSTRUCTIONS FOR COMPLETING THIS FORM
Any xknowledgment completed in California must contain verbiage exacrly as
DESCRnPTION OF THE ATTACHED DOT appears above in the notary section or a separate acJmowledgment form must be
properly completed ai attached to that document. The only exception is if a
document u to be recorded outside of Cal@rnia. In such imtances, any alternative
(Titleordes ,ph.OnOfa,cb, doc iunent) acknowledgment verbiage as may be prrnted on such a docmneM so long as the
verbiage does not require the notary to do something that i.r ilLegal for a notary in
California (t.e. certifying the authorized capacity of the signer). Pleme check the
(Ti,eordes,ph.onOfa,ch,dOc Btcon,.ued) doamentcarefullyforpropernotariaLwordingandattachthispmifrequired.
ii State and County infomiution must be the State and Coiuity where the documentNumberofPages______ DociunentDate signer(s)pemonallyappearedbeforethenotarypublicforacknowledgment.
* Dateofnotationmustbethedatethatthesigners)personallyappearedwhicb
must also be the same date the acknowledgmentis completed.
(Additional information) * The notary public must pit his or her name as h appem's within his or her
commissionfollowedbyacommaandthenyour title(notarypublic).
* Print the name(s) of dociunent sign's) who personally appear at the time of
notanzation.
CAPACITYCLAIMEDBYTHESIGNER a Indicatethecorredsmguhrorplumlfomisbycrossingoffinconectfomis(i.e.
€,,.,du,(s) ha/she/&+y7is/ata)orlingthecornectforms.Failuretocomictlyindicatethisinformation may lead to rejection of dociunent recordig.
[] Corporate Officer ii The notaty seal impression must be clear and photogmphically reproducible.
Impression must not cover text or lines. If seal impression smudges, re-seal if a
(Title) mifficient area pemiits, otherwise complete adifferent acknowledgment form.
€ Pa rtner(s) * Signahme of tbe notary public must match the signature on file with the office of
the coy7 clerk.
[] Attomey-in-Fact a> Additional infomation is not requ=ca but could help to ensute ui
[]Trustee(s) acknowledgmentisnotmisusedoratbchedtoadifferentdocumeBt
@ Other 4i Indicate title Or type of atkached document, number of pages and date.
/.* Indicate the capacity claimed by the signer. If the claimed capacity is a
corporate officer, indiaite thet'le (ie. CEO, CFO, Seaetmy).
* Secutely attach this document to the signai docimient
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DOC #25176986 Page 25 of 26
cALIFoRNIA ALL-PURPOSE CERTIFICATE OF 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 'F)(I p-fe, C lArc,
On Nwtth'xr 'K) ZO?ll beforeme, ff(yl(1-l-l(,-(Here7nsmlednaom::dtll, poft::oq;c(,r) p4)1,,a NotatyPublic,
personally appeared 8((>n <45 S' ;[(ryln ;
nam6re
i4er/their
or a
who proved to me on the basis of satisfactory evide to be the person(s) whose subscribed to
the witliin instriunent wledged to me thalie/they executed the same authorized
capacity(ies),andthat signature(s)o'einstrumenttheperson(s), entityuponbehalfof
an4o
beer/their
which the person(s) acteixecuted the instrument.
I certify under PENALTY OF PERJUR_Y under the laws of the State of Califoriiia that the foregoing paragraph
18 jnle and COffeCt I a a & & & ai & * @ & & &
4 Q JENNIFERJOoois %- Ndbrl %bllc - California l. am SantaClaraCounty I
WITNESS my hand and official seal. I 8 Commhston a ziagoi 0
I My Comm. Explres Aug 24, 2025 @
j - z z Q s- ffi I/_'T/ /7/ N
W (NotarySeal)Signahire of N
* 4
ADDITIONAL OPTIONAL INFORMATION
INSTRUCTIONS FOR COMPLETING THIS FORA4
Any acknowledgmem completed m California niusi contain verbiage exactly as
DESCRIPTION OF TaHE ATTACFJED DOC?JA4ENT appears above in rhe norary section or a sepame achmvreagmem (orni inust be
properly completed and tirtached to lhat documem. The only exception is if a
f&-hbt *--=', €-,-by-=, /%----- documenvstoberecordedoutsideofCalrfomialnsuchhulances,anyalrernarrve
(Title or description ofahached doc ument) acknowledgmem verbiage as may be printed on SllC)l a document so long as rhe
verbiage does not require ihe riotaiy to do something that is illegal for o riotaty in
i J_ (), J(,,,,lal,, ,' ( 94,<>yl&'ll ;, (, 0,, 4(,hy, california (i.e. certiBirrg ihe autiionxea cqacity o( rhe srgner). piease chech ihe
(Title or des,iph.Oll ofa ttached document continued) document carefully fr.r proper notarial isiording md allach this frirrn if required
Nu mber of Pages 2__g4_ Docu ment Date l) State and County information must be the State and County where the documentsigner(s) personally appeared before the notary public for acknowledgment.
ii Date of notarization must be the date that the signer(s) persona{ly appeared which
must also be the same date the acknow)edgment is compieted.
(Additiona} infomiation) * The notar)a public must print his or her name as it appears w'thin his or her
commission followed by a comma and then your title (notary public).
s Print the name(s) of document signer(s) who personally appear at the time of
notarization.
CAPACITY CLAIMED BY THE SIGNER ' mdiCate the COrreCt Singular Or Plliral FARMS bY crossing Off tncorrect fomis (i.e.
€Individual(s) he/she/t-hey-is/se)orcirclingthecorrectforms.Fai}uretocorrectlyindicatethis ,infonnation may lead to rejection of docunient recording.
€ Corporate Officer a The notar)o seal impression must be ctear aitd photographically reproducible.
Impression must not cover text or lines. If seal impression smudges, re-seal if a
. (Tttle) sufficlenf area penllltS, €)tben)/lSe complete a different aCknOW)edgTnent fornl
[1] Pa rtner(s) ii Signature of the notary pubitc must match the signature on file with the office ofthe county clerk.
€ A'orney-m-Fact a> Additional infonnation is net required but could iielp tO ellSlffe this
0 Trustee(s) acknowledgment is iiot misused or attached to a differem document
, @ Other a> mdicate title or type of attached document, number of paies and date.
/- Indicate the capacity claimed by the signer. lf the claimed capacit)- is a
corporate officer, indicate the title (i.e. CEO, CFO, Secretary).
* Sccurcly attach this documcnt to the signed docunient ,
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DOC #25176986 Page 26 of 26
EXHn3IT A
The following desibed real property in the City of Cupertino, County of Santa Clara,
State of California:
All of Parcel C as shown on that map entitled "Tract'No. 10579", filed for record on
November 18, 2021, in Book 943 of Maps, at Pages 36-43, in Santa Clara County Records.
APN: A portion of 326-27-043
RECORDING REQUESTED BY:
RECORDED
ELECTRONICALLY
City of Cupertino
WHEN RECORDED, MAIL TO:
City Clerk's Office
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3255
ORfGfNAL
(SP ACE ABOVE THIS LINE FOR RECORDER'S USE)
NO FEE IN ACCORDANCE
WITH GOV. CODE 27383
AFFORDABLE HOUSING REGULATROY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
A Portion of APN 326-27-043
Parcel C of Tract No. 10579 filed for record on November 18, 2021,
in Book 943 of Maps at Pages 36-43, Santa Clara County Records
Original
0 Conformed Copy
AFFORDABLE HOUSING REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
This Affordable I-Iousing Regulatory Agreement and Declaration of Restrictive
Covenants (the "Agreement") is made and entered into as of Nyz.(it, I I,')i(t'lie "Effective
Date"), by and between the City of Cupertino, a municipal corporation (the "City"), and
190 West St.James, LLC., a California limited liability corporation, (the "Developer") ( each
individually a "Paily" and together the "Parties"), with reference to tl"ie following facis.
RECIT ALS
A. Capitalized terms used but not defined in these recitals are as defined in Article 1
of this Agreement.
B. The Developer owns certain real property located at {)rtte I C O"' Th't-'+ AA 10 S}'7
in the City of Cupertino, County of Santa Clara, as more particularly described in Exhibit
A (the "Property"). The Developer intends to convey a poilion of the Propeity to
Cupertino Pacific Associates, a California limited partnership ("CPA") and assign all of
its obligations under this Agreement to CPA (the "CPA Conveyance"), whereupon CPA
will be the Developer hereunder. The Developer intends to construct a senior housing
development for residents aged sixty-two (62) years old and over consisting of forty-eight
(48) units on the Property (the "Development"), of which twenty-nine (29) units shall be
affordable to very low income households with income that is equal to or less than fifty
percent (50%) of Area Median Income and nineteen (19) units shall be affordable to low
income households with income that is equal to or less than sixty percent (60%) of Area
Median Income (all together, the "Units).
C. On May 12, 2020 the Cupeitino Planning Commission recommended approval of
all discretionary entitlements for the "Westpoit Project," whicli encompasses the
Development, and on August 18, 2020, the Cupertino City Council approved all
discretionary entitlements for the Westpoit Project, subject to certain conditions (the
"Project Approvals"). The Project Approvals include a density bonus of thirty-five
percent (35oA) (the "Density Bonus") under Government Code Section 65915 and
Municipal Code Chapter 19.56 (collectively "Density Bonus Law"). Density Bonus Law
requires tl'iat the Units included pursuant to the Density Bonus remain affordable to
households at the designated income levels for a fifty-five (55) year period and the
Approved Plans require that the balance of the Units remain a[fordable to at the
designated levels for a ninety-nine (99) year period. Therefore, of the twenty-nine units to
be affordable to 60% AMI Households, twenty-two (22) units shall remain thus
affordable for ninety-nine (99) years and seven (7) units shall remain thus affordable for
fifty-five (55) years. Of the nineteen (19) units to be affordable to 50% AMI Households,
Westport BMR Agreement (City 11 2)
1
fouiteen (14) units shall remain thus affordable for ninety-nine (99) years and five (5)
units shall remain thus affordable for fifty-five (55) years.
D. Pursuant to Condition numberIII.9 of Resolution No. 20-106, pait of tlie Project
Approvals, prior to the recordalion of a final map or issuance of any building permit, an
affordable liousing agreement sliall be recorded against the Property.
E. The Developer and tlie City therefore desire to enter tl'iis Agreement to fulfill
Condition III.9 and ensure ilial tlie Development will be used and operated in accordance
with t]ie requirements and conditions of the Project Approvals.
AGREEMENT
The foregoing recitals are liereby incorporated by reference and made part of tliis
Agreement.
1, Definitions. When used in this Agreement, the following ternns shall have the
respective meanings assigned to them in this Section 1.
1.1 "50% AMI Household" means a household with an annual income which
does not exceed fifty percent (50%) of Area Median Income, adjusted for Actual
Household Size pursuant to HCD's published income limits.
1.2 "50% AMI Household Rent" means the maximum rent calculated pursuant
to the BMR Manual for a "very low-income household" for a household size equal
to the number of bedrooms in the subject Unit plus one (counting studio units as
having zero bedrooms).
1.3 "50% Units" means the Units which, pursuant to Section 2.1 below, are
required to be occupied by 50% AMI Households.
1.4 "60% AMI Household" means a household with an annual income which
does not exceed sixty percent (60%) of Area Median Income, adjusted for Actual
Household Size pursuant to HCD's published income limits.
1.5 "60% AMI Household Rent" the maximum rent calculated pursuant to the
BMR Manual for a '!ow-income household" for a household size equal to the
number of bedrooms in the subject Unit plus one (counting studio units as having
zero bedrooms).
1.6 "60% Units" means the Units which, pursuant to Section 2.1 below, are
required to be occupied by 60% AMI Households.
Westport BMR Agreeinent (City 11 2)
2
1.7 "Actual Household Size" means the actual number of persons in the
applicable household.
1.8 "Agreement" means this Affordable Housing Regulatory Agreement and
Declaration of Restrictive Covenants.
1.9 "Area Median Income" or "AMI" means the area median income for Santa
Clara County as published and periodically updated by HCD pursuant to Health
and Safety Code section 50093, adjusted for Actual Household Size.
1.10 "BMR Manual" means the City's Policy and Procedures Manual for
Administering Deed Restricted Affordable Housing Units, adopted by City
Council Resolution 18-024, as it may be amended.
1.11 "City"isdefinedinthefirstparagraphofthisAgreement.
1.12 "Costa-Hawkins Act" means the Costa-Hawkins Rental Housing Act, Civil
Code sections 1954.50 et seq.
1.13 "Default" is defined in Section 7.6.
1.14 "Density Bonus" is defined in Recital C.
1.15 "Density Bonus Law" is defined in Recital C.
1.16 "Developer" is defined in the first paragraph of this Agreement.
1.17 "Development" is defined in Recital B.
1.18 "Director" is the City's Community Development Director or successor
posttxon.
1.19 "Effective Date" is defined in the first paragraph of this Agreement.
1.20 "Extended Term" means ninety-nine (99) years except as modified pursuant
to Section 6.1.
1.21 "Extended Ternn Units" means Units subject to the Extended Term.
1.22 "Financing Agreement" means collectively (i) any agreement that
Developer enters pursuant to a governmental tax credit or other subsidy or loan
program that is utilized to finance the construction and/or operation of the
Development, and (ii) all statute, regulations and other laws compliance with
which is required as a condition of participation in such governmental tax credit or
other subsidy or loan program.
Westport BMR Agreeinent (City 11 2)
3
1.23 "HCD" means the California Department of Housing and Community
Development or any successor agency.
1.24 "Indemnitees" are defined in Section 7.5.
1.25 "Party" or "Parties" is defined in the first paragraph of this Agreement.
1.26 "Project Approvals" are defined in Recital C.
1.27 "Property" is defined in Recital B.
1.28 "Management Agent" is defined in Section 5.2.
1.29 "Rent" means the total of monthly payments by the Tenant of a Unit for the
following: use and occupancy of the Unit and land and associated facilities,
including parking; any separately charged fees or service charges assessed by
Developer which are required of all Tenants, other than security deposits; an
allowance for the cost of an adequate level of service for utilities paid by the
Tenant, including garbage collection, sewer, water, electricity, gas and other
heating, cooking and refrigeration fuel, but not telephone service or cable TV (as
published annually by the Santa Clara County Housing Authority) ; and any other
interest, taxes, fees, or charges for use of the land or associated facilities and
assessed by a public or private entity other than Developer, and paid by the
Tenant.
1.30 "Standard Term" means fifty-five (55) years except as modified pursuant to
Section 6.1.
1.31 "TCAC Rent" means the maximum rent permissible pursuant to the
California Tax Credit Allocation Committee's rules and regulations for a 50%
Unit or 60% Unit, as applicable.
1.32 "Tenant" means a lioriseliold legally occupying a Unit pursuant to a valid lease
witli Developer.
1.33 "Tenant Lease" is defined in Section 2.7.
1.34 "Term" means the Standard Term or the Extended Term as appropriate; the
plural "Terms" means both the Standard Ternn and the Extended Term.
1.35 "Unit" means one of the forty-eight (48) rental housing units constructed on
the Property, all of which are subject to the affordability covenants of this
Agreement.
2. Affordability and Occupancy Covenants
Westport BMR Agreemei'it (City 11 2)
4
2.1 0ccupancy Requirements. The Units shall be rented to and initially
occupied by, or, if vacant, available for occupancy by 50% and 60% AMI
Households as follows:
a. 50% Units. Develolier s)iall rent twenty-nine (29) Units to, and sliall
ensure tliat tliese Units are initially occu):iied by. or. if vacant, available for
occupancy by. 50% AMI I-louseliolds. Twenty-two (22) of tlie 50% Units sliall be
Extended Terin Units and seven (7) of tlie 50% Units sliall be Standard Terin
Units.
b. 60% Units. Developer shall rent nineteen (19) Units to, and shall
ensure that these Units are initially occupied by, or, if vacant, available for
occupancy by, 60% AMI Households. Fourteen (14) of the 60% Units shall
be Extended term Units and five (5) of the 60% Units sliall be Standard
Term Units.
c. Unit Size. The Units shall be of the size set foilh in the following
chart; provided that any square footage set forth below is approximate and
unit sizes shall comply with the Project Approvals:
60% Units 50% Units Total
Studio/ 538 sq ft 4 5 19
1-bedroom/ 608 sq ft 11 17 28
2-bedroom/849 sq ft 4 7 11
Total 19 29
2.2 Allowable Rent.
a. Pursuant to Section 4.3 below, Developer shall determine maximum
rents for all Units pursuant to this Agreement and the City's Policy and
Procedures Manual for Administering Deed Restricted Affordable I-Iousing
Units (the "BMR Manual"), as it may be amended.
b. 50% AMI Household Rent. Subject to the provisions of Section 2.3,
Rent paid by Tenants of all 50% Units during the Ternn shall not exceed the
50% AMI Household Rent for the applicable bedroom size.
Westport BMR Agreeinei'it (City 11 2)
5
c. 60% AMI Household Rent. Subject to the provisions of Section 2.3,
Rent paid by Tenants of all 60% Units during the Term shall not exceed the
60% AMI Household Rent for the applicable bedroom size.
d.City Approval of Rents. The initial Rents for all Units shall be
approved by the City prior to occupancy at the time the Developer submits
to the City the marketing plan required by Section 3. 1 below. The City shall
review within fourteen (14) days all proposed Rent increases to determine
whether the proposed increases are consistent with the provisions of this
Agreement. Developer shall certify to the City that Developer is not
charging any fee for the use and occupancy of the Unit and land and
associated facilities, including parking, other than Rent to Tenants of the
Units for all of the components of Rent as defined in Section 1.29.
e. Alternative AMI and Rent Determinations. In the event that HCD no
longer publishes the applicable AMI or fails to update the relevant
information for a period of at least eighteen (18) months, the City shall
provide Developer with an alternative method of determining AMI and/or
allowable rents, which shall be reasonably similar, in the City's sole
discretion, to that used by the relevant agency.
f. Varying Rent or Income Levels in Governing Documents. In the
event that the BMR Manual and/or an applicable Financing Agreement
prescribe different maximum Rents or qualifying incomes than those set out
in this Agreement, the lowest applicable Rent level and/or the lowest
applicable income level shall apply, except tliat in no event sliall tlie maximun'i
Rent be lower t]ian tlie lowest level tliat would be set by t)ie BMR Marnial or tliis
Agreement as of tlie Effective Date rinless reqriired by state or federal statute.
2.3 Increased Income of Tenants. If, upon annual recertification of the
income of a Tenant of a Unit, Developer determines that the Tenant no longer
qualifies as a 50% AMI Household, but does qualify as a 60% AMI Household,
the Tenant may continue to occupy the Unit and, upon sixty (60) days written
notice to Tenant, Developer may increase the Tenant's rent to the 60% AMI
Household Rent. Developer shall then rent the next available Unit to a 50% AMI
Household, at a Rent not exceeding the maximum Rent specified in Section 2.2, to
comply with the requirements of Section 2. 1. Upon renting the next available Unit
in accordance with Section 2. 1, the Unit with the over-income Tenant will be
considered a 60% Unit for purposes of deternnining compliance with that Section.
2.4 Non-Qualifying Household. Except as required by an applicable Financing
Agreement, if, LIPOII recertification of a Tenant's income, Developer determines that a
Tenant no longer qualifies as a 50% AMI Household or a 60% AMI Household
then the Tenant shall be giyen written notice that Tenant shall 'vacate the Unit
Westport BMR Agreement (City 11 2)
6
three (3) months from the date of the notice, or upon expiration of the Tenant's
lease, whichever is later. The Director, in his or her sole discretion may grant a
three (3) month extension in cases of extreme hardship. If tlie Developer is
probibited by an applicable Financing Agreement from requiring tlie Tenant to vacate tlie
Unit, SLICII Teiiant sl'iall be permitted to continue to occupy tlie Unit and SLICII Tenant's
Rent may be increased to one-twelftl'i of tliirty percent (30%) of tlie liouseliold's actiial
income, adjusted for Actual Horiseliold Size, upon sixty (60) days written notice to tlie
Tenant. In eitlier ii'istance, tlie Unit will continue to be classified as a 50% Unit or 60%
Unit, as applicable, until tlie Tenant vacates tlie Unit at wl'iicli time Developer sliall re-
rent tlie Unit to a 50% AMI Horiseliold or 60% AMI Horiseliold as required to meet tlie
requirements of Section 2.1 above.
2,5 Termination of Occupancy. Upon termination of occupancy of a Unit by a
Tenant, such Unit shall be deemed to be continuously occupied by a household of
the same income level ( e.g., 50% AMI Household) as the initial income level of
the vacating Tenant, until such Unit is reoccupied, at which time the income
character of the Unit (e.g., 50% Unit) shall be re-determined. In any event,
Developer shall maintain the occupancy requirements set forth in Section 2.1,
except as may be modified by Section 2.3.
2.6 Agreement to Limitation on Rents. The Westport Project, including the
Development, has received approval of a Density Bonus under Density Bonus
Law from the City. The Density Bonus is a fornn of assistance specified in Chapter
4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government
Code. Civil Code Sections 1954.52(b) and 1 954.53(a)(2) of the Costa-Hawkins Act
provide that, where a developer has received such assistance, certain provisions of
the Costa-Hawkins Act do not apply if a developer has so agreed by contract. The
Developer hereby agrees to limit Rents as provided in this Agreement in
consideration of the Developer's receipt of the Density Bonus and further agrees
that any limitations on Rents imposed on the Units are in conformance with the
Costa-Hawkins Act. The Developer further warrants and covenants that the terms
of this Agreement are fully enforceable and waives and agrees to be estopped from
presenting any defense to enforcement on the ground that the Agreement or
enforcement thereof are invalid under the Costa-Hawkins Act.
2.7 Lease Provisions. The Developer shall use a form of Tenant lease (the
"Tenant Lease") approved by the City for the Units. Upon receipt of the
Developer's form of the lease, the City shall approve or disapprove it within thirty
(30) days after submission, provided, however, that if the City provides no
response within thirty (30) days, the form of the lease shall be deemed approved.
The Tenant Lease shall, among other matters:
a. provide for ternnination of the lease for failure: (1) to provide any
information required under this Agreement or reasonably requested by
Westport BMR Agreement (City 11 2)
7
Developer to establish or recertify the Tenant's qualification, or the
qualification of the Tenant's household, for occupancy of a Unit in
accordance with the standards set forth in this Agreement, or (2) to qualify
as a 50% AMI Household or 60% AMI Household, as the case may be, if
the Tenant was initially determined to qualify and such determination was
based on any material misrepresentation made by the Tenant with respect to
the income computation or ceitification,,
b. be for an initial term of not less than one (1) year. After the initial
year of tenancy, the lease may be month to month by mutual agreement of
Developer and the Tenant, however the Rent may not be raised more often
than once every twelve (12) months after such initial year. Developer will
provide each Tenant with at least sixty (60) days' written notice of any
increase in Rent applicable to such Tenam, and with such further notice as
may be required by Section 2.3;
c. prohibit subleasing of the Unit or any poiiion of the Unit or any
spaces reserved for the use of tlie Tenant, contain nondiscrimination
provisions, and include tl"ie Tenant's obligation to inform the Developer of
any need for maintenance or repair;
d. allow termination of the tenancy prior to the end of the stated term
for an increase in Tenant's household income above qualifying income for
Low Income I-Iouseholds (provided such termination is not proliibited by
any applicable Financing Agreement) or for good cause, including violation
of the terms and conditions of tlie Tenant Lease, violations of horise rules,
non-payment of Rent, violations of applicable federal, state, or local law, or
other good cause;
e. include, at Developer's option, tlie obligation For Tenant to provide a
security deposit not exceeding two montlis' rent; and
f. otherwise conform to tlie BMR Manual , except as tlie BMR Manual is
inconsistent witli tliis Agreement; in t]ie case of a conflict between tlie BMR
Manual and tliis Agreement, tliis Agreement sliall control.
2.8 Security Deposits. Any security deposits collected by Developer or
Developer's agent shall be kept separate and apart from all other funds in a trust
account with a depository insured by the Federal Deposit Insurance Corporation or
other comparable federal deposit insurance program and shall be held and
disbursed in accordance with California law. The balance in the trust account shall
at all times equal or exceed the aggregate of all outstanding obligations, plus
accrued interest thereon.
Westpoit BMR Agreement (City 11 2)
8
Marketixig, Income Certification, and Oversight
3.1 Marketing Plan.
a. At least ninety (90) days before the commencement of marketing the
Units, Developer shall provide the City, for its review and approval,
Developer's written tenant selection and affirmative marketing plan for
marketing the Development to income-eligible households, consistent with
subsection (b) below. Upon receipt of the marketing plan, the City shall
promptly review the marketing plan and shall approve or disapprove it
within thirty (30) days after submission, provided, however, that if the City
provides no response within thirty (30) days, the marketing plan shall be
deemed approved. If the marketing plan is not approved, Developer shall
submit a revised marketing plan within thirty (30) days.
b. The marketing plan submitted to the City shall include the
following: means to be used to advertise the Units to the public upon initial
occupancy and as vacancies occur; maintenance of a waiting list; the
amount of any application screening fee to be imposed by Developer;
information to be provided to applicants, including conditions and
restrictions applicable to occupancy of the Units; current Rent; permitted
Rent increases; maximum qualifying income; requirement for annual
income recertification; preferences required by the City; and requirement to
vacate the Unit if the Tenant's household income exceeds the maximum
qualifying income, subject to the any applicable Financing Agreement.
3.2 Income Certification, Non-Discrimination
a. Pursuant to Section 4.3 below, Developer shall determine and certify
Tenant incomes pursuant to this Agreement and the BMR Manual. In the
event of a conflict between this Agreement and the BMR Manual, this
Agreement shall govern.
b. Developer will obtain, complete and maintain on file, immediately
prior to initial occupancy and annually thereafter, income certifications for
each Tenant renting any of the Units. Developer shall make a good faith
effort to verify that the income statement provided by an applicant or
Tenant is accurate by taking two or more of the following steps as a part of
the verification process for all members of the Tenant household age
eighteen (18) or older: (a) obtaining copies of payroll stubs or other
verification of employment for the last two consecutive months; (b)
obtaining an income tax return for the most recent tax year; ( c) conducting
a credit agency or similar search, the result of which shall be used solely for
income certification; ( d) obtaining bank statements for the last two
Westport BMR Agreeinent (City 11 2)
9
consecutive months; (e) obtaining an income verification form from a
current employer; (f) obtaining an income verification fornn from the Social
Security Administration and/or the California Department of Social
Services if an adult member of the Tenant's household receives assistance
from either of such agencies; or (g) if the Tenant is unemployed and has no
such tax return, obtain another form of independent verification. Developer
shall make copies of Tenant income certifications available to the City
upon request.
c. Developer will review applications from prospective tenants of
Units, on the same basis as all other prospective tenants, who are recipients
of federal certificates for rent subsidies pursuant to the existing housing
program under Section 8 of the United States Housing Act or any
successor. Developer shall not apply selection criteria to Section 8
certificate or voucher holders that are more burdensome than criteria
applied to all other prospective tenants for the Units, nor shall the
Developer apply or permit the application of management policies or lease
provisions with respect to the Development which have the effect of
precluding occupancy of Units by such prospective tenants.
3.3 Records and Reporting
a. Developer shall maintain complete, accurate and current records
pertaining to the Units, and shall permit any duly authorized representati've
of the City to inspect the records, including but not limited to records
pertaining to income and household size of Tenants and Rent charged
Tenants, upon reasonable prior notice during normal business hours. All
Tenant lists, applications and waiting lists relating to the Units shall at all
times be kept separate and identifiable from any other business of
Developer and shall be maintained as required by the City, in a reasonable
condition for proper audit and subject to examination during business hours
by representatives of the City. Developer 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.
b. The City shall notify Developer of any records it deems insufficient.
Developer shall have thirty (30)calendar days after the receipt of such a
notice to corect any deficiency in the records specified by the City in such
notice, or if a period longer than thirty (30)days is reasonably necessary to
correct the deficiency, then Developer shall begin to correct the deficiency
within thirty (30)days and correct the deficiency within sixty (60) days, or
as otherwise agreed by City.
Westport BMR Agreement (City 11 2)
10
c. Developer shall provide the City no later than April 1 of each
calendar year following the Effective Date (and no later than December I
for the operating budget and replacement budgets for the following year),
hardcopies and PDF copies of the following documents:
i. Before and after completion of construction of the
Development:
(1) evidence of payment of property taxes or property tax
exemption for the Development, as applicable;
(2) audited financial statements for the Development.
ii. After completion of the Development:
(1) an occupancy report including: (A) the verified
income, household size, and race/ethnicity of tenants of the
Development to the extent voluntarily provided by tenants,;
(B) the Unit size, rent amount and whether these rents include
utilities for all Units; and (C) the date the current tenancy
cornrnenced for each Unit;
(2) certifications of eligibility for all Tenants at the time of
initial occupancy and upon the yearly anniversary of their
continuing tenancies. Such certification shall include verified
income statements. Developer shall retain in the Tenant's file
all verifications of Tenant's income (tax returns, W-2 forms,
paycheck stubs, etc.);
(3) a management report detailing the activities of the
management agent;
(4) A list of any substantial physical defects in the Units,
including a description of any major repair or maintenance
work undertaken or needed in the previous year and measures
taken to maintain the Units in a safe and sanitary condition in
accordance with applicable codes;
(5) the operating reserve balance;
(6) the replacement reserve balance;
d. Within thirty (30) days after receipt of a written request, Developer
shall provide any other infoimation or completed forms, or allow the City
to examine and make copies of any books, records or other documents of
Westport BMR Agreement (City 11 2)
11
Developer which pertain to the Units, as reasonably requested by the City
to ensure compliance with this Agreement.
e. If similar reports on some or all of the Units are required for
regulatory compliance with other financing programs, those reports will
satisfy the requirements of this Section by the City, with respect to the
portion of the requirements of this Section covered by such reports,
provided that copies are provided on an annual basis to the City with an
owner certification addressed to the City certifying that Developer has
complied with this Agreement.
3.4 0n-site Inspection. The City shall have the right to perform on-site
inspections of the Development, including the Units, subject to the rights of
tenants, upon reasonable notice during nortnal business hours, as is reasonably
required to ensure compliance with this Agreement, but in any case at least once
per year. Developer agrees to cooperate in such inspection(s). If City desires to
inspect the interior of the Units, Developer shall give seventy-two (72) hours'
notice to Tenants, and City shall give Developer sufficient notice to allow such
notice to Tenants.
Operation of the Development
4.1 Residential Use. The Property and the Units shall be used only for
residential purposes and home occupations as provided in Sections 12(a) and (b)
of Table 19.20.020 of the Cupertino Municipal Code, and the Units shall be
operated and maintained as residences for the Term of this Agreement. No part of
the Units shall be operated as transient housing in which the term of the lease or
rental agreement is less than thirty (30) days. Notwithstanding the foregoing, the
ground floor commercial space is not subject to Table 19.20.020.
4.2 Senior Housing. As proposed by the Developer, the Development shall be
operated at all times in compliance with the provisions of: (a) the Unruh Act,
including but not limited to California Civil Code Sections 51.2, 51.3 and 51.4
which relate to the requirements for lawful senior housing; (b) the United States
Fair Housing Act, as amended, 42 U.S.C. Section 3607(6) and 24 CFR 100.304,
which relate to lawful senior housing; ( c) the California Fair Employment and
Housing Act, Governrnent Code Sections 12900 et seq., which relates to lawful
senior housing; and ( d) any other applicable law or regulation (including the
Americans with Disabilities Act, to the extent applicable to the Deyelopment).
Developer shall develop and implement applicable age and other verification
procedures to ensure compliance with the requirements of this Section. The
Developer shall provide the City with a copy of its written verification procedures.
The Developer agrees to indemnify, protect, hold harmless, and defend (by
counsel reasonably satisfactory to the City) Indemnitees (as defined in Section 7.5)
Westport BMR Agreei'iient (City 11 2)
12
from all claims arising out of the Developer's failure to comply with applicable
legal requirements related to housing for seniors and persons with disabilities
excluding claims resulting from the gross negligence or willful misconduct of the
City. The indemnity proyisions of this subsection shall survive expiration of the
Tern or other termination of this Agreement.
4.3 BMR Procedures Manual. Developer will operate the Development in
conformance with the B'MR Manual, except as set out in Section 7.2 below.
4.4 Taxes and Assessments. Developer shall timely pay all real and personal
property taxes, assessments and charges and all franchise, income, employment,
old age benefit, withholding, sales, and other taxes assessed against it, or payable
by it that may become a lien or charge against the Property, subject to any
applicable exemptions or right to contest; provided, however, that the Developer
shall have the right to contest in good faith, any such taxes, assessments, or
charges. In the event Developer exercises its right to contest any tax, assessment,
or charge against it, Developer, on final determination of the proceeding or
contest, shall promptly pay or discharge any decision or judgment rendered against
it, together with all costs, charges and interest.
4,5 Compliance Monitoring Reimbursement. Developer shall timely
reimburse the City for the costs of monitoring compliance with the BMR Manual
and this Agreement, provided that Developer's reimbursement obligation shall not
exceed $5000 annually. Such reimbursable costs will be documented by invoices
that the City submits to Developer pursuant to typical City billing practices.
Property Management and Maintenance.
5.1 Developer is responsible for all management functions with respect to the
Units, 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 City shall have no responsibility over
management of the Units.
5.2 To perform its management duties hereunder, Developer shall retain a
professional property management company with demonstrated ability to operate
residential facilities like the Development in a manner that will provide decent,
safe, and sanitary housing, approved by the City in its reasonable discretion (as
approved, the "Mariagement Agent"). Developer shall submit such information
about the background, experience, and financial condition of any proposed
Management Agent as is reasonably necessary for the City to determine whether
the proposed Management Agent meets the standard for a qualified Management
Agent set forth herein. Within thirty (30) days of such submission, the City in its
Westport BMR Agreeinent (City 11 2)
13
reasonable discretion shall determine whether that the proposed Management
Agent meets that standard and notify Developer in writing, stating with reasonable
specificity the basis for any disapproval.
5.3 The Development shall at all times be managed by the management
company selected pursuant to section 5.2 or a replacement management company
selected through the same procedure or pursuant to Section 5.4 below.
5.4 Review, Replacement of Management Agent. The City reserves the right
to conduct an annual (or more frequently, if deemed necessary by the City) review
of the management practices and financial status of the Development. The purpose
of each periodic review will be to enable the City to determine if the Development
is being operated and managed in accordance with the requirements and standards
of this Agreement. Developer shall cooperate with the City in such reviews.
a. If, as a result of a periodic review, the City determines in its
reasonable discretion that the Development is not being operated and
managed in accordance with any or the material requirements and standards
of tliis Agreement, tlie City shall deliver written notice to Developer,
Developer's senior mortgage lender of record ("Senior Lender") and
Developer's tax credit investor limited partner ("Limited Paiiner") of its
intention to cause replacement of the Management Agent, including tlie
reasons tlierefor. Within fifteen (15) days of receipt by Developer of sucli
written notice, City staff and Developer (and Senior Lender and Limited
Paiiner at each's option) sliall meet in good faith to consider methods for
improving the i-inancial and operating status of the Development, including,
without limitation, replacement of the Management Agent.
b. If, after such meeting, City staff recommends in writing the
replacement of tlie Management Agent, Developer shall promptly dismiss
the then Management Agent, terminating its contract as necessary, and shall
appoint as the Management Agent a person or entity approved by the City
pursuant to Section 5.2 above.
c. Any contract for the operation or management of the Development
entered into by Developer shall provide that t}ie contract can be terminated
as set fort]i above. Failure to remove tlie Management Agent in accordance
witli tl'ie provisions of lliis Section sliall constitute Default under this
Agreement, and the City may enforce this provision t]'irough legal
proceedings as specified in Section 7.4.
5.5 Property Maintenance
Westport BJSAR Agreement (City 11 2)
14
a. Developer shall, for the entire Term of this Agreement, maintain all
interior and exterior improvements, including landscaping and protected
trees, on the Property in accordance with all applicable laws, rules,
ordinances, orders and regulations of all federal, state, county, municipal,
and other governmental agencies and bodies having or claiming jurisdiction
and all their respective departments, bureaus, and officials (collectively,
"Applicable Standards"). Applicable Standards, which apply equally to
other development projects in the City, include without limitation as of the
date of this Agreement, the following maintenance conditions:
i. Landscaping. Developer shall have landscape maintenance
performed as needed. Developer shall adequately water the
landscaping on the Property in compliance with the City's
Landscape Ordinance (Cupertino Municipal Code sections 14.15 et
seq.) and any applicable agreements entered thereunder. No
improperly maintained landscaping on the Property shall be visible
from public streets and/or rights of way.
ii. Yard Area. No yard areas on the Property shall be left in an
unmaintained condition. Unmaintained conditions include without
limitation:
(1) broken or discarded furniture, appliances and other
household equipment stored in yard areas for a period
exceeding one (1) week;
(2) packing boxes, lumber trash, dirt and other debris in
areas visible from public propelty or neighboring properties;
and
(3) vehicles parked or stored in other than approved
parking areas.
iii. No buildings located on the Property may be left in
an unmaintained condition. Unrnaintained conditions include
without limitation:
(1) violations of state law, uniform codes, or City
ordinances;
(2) conditions that constitute an unsightly appearance that
detracts from the aesthetics or value of the Propeity or
constitutes a private or public nuisance;
(3) broken windows; and
Westport BMR Agreement (City 11 2)
15
(4) graffiti left in place for a period exceeding seventy-two
(72) hours.
iv. Sidewalks. Pursuant to Condition number III.10 of Resolution
No. 20-106, part of the Project Approvals, Developer shall maintain,
repair, and replace as necessary all public sidewalks adjacent to the
Development.
b. In the event that Developer breaches any of the covenants contained
in this Section 5.5 and such Default continues for a period of ten (10) days
after written notice from the City with respect to graffiti, debris, waste
material, and general maintenance or thirty (30) days after written notice
from the City with respect to landscaping and building improvements, then
the City, in addition to whatever other remedy it may have at law or in
equity, shall have the right to enter upon the Property and perform or cause
to be performed all such acts and work necessary to cure the Default;
provided, however, in either case that if such cure cannot reasonably be
effectuated within the timeframe prescribed, the City shall prescribe a
reasonable timeframe within which to complete the work. Pursuant to such
right of entry, the City shall be permitted (but is not required) to enter upon
the Property and perform all acts and work necessary to protect, maintain,
and preserve the improvements and landscaped areas on the Property
according the standards, and to attach a lien on the Property, or to assess the
Property, in the amount of the expenditures arising from such acts and work
of protection, maintenance, and preservation by the City and/or costs of
such cure, which amount shall be promptly paid by Developer to the City
upon demand.
6.Terms, Expiration.
6.1 Terms. The Terms of this Agreement commence on the Effective Date. As to
the Extended Term Units and all parts of the Property not included in a Unit the Term
continues until the ninety-ninth (99th) anniversary of the date of issuance of the last
certificate of occupancy or equivalent certification provided by the Building Division of
the City for an Extended Term Unit; provided, however, if a record of the City's
certification cannot be located or established, the Extended Term will expire on the one
hundred first (101st) anniversary of the Effective Date. As to the Standard Term Units
the Term continues until the fifty-fifth (55th) anniversary of the date of issuance of the
last certificate of occupancy or equivalent certification provided by the Building Division
of the City for a Standard Term Unit; provided, however, if a record of the City's
certification cannot be located or established, the Standard Term will expire on the fifty-
seventh (57th) anniversary of the Effective Date.
Westport BMR Agreement (City 11 2)
16
6.2 Notice of Expiration of Ternn. At least one (1) year prior to the expiration of
either the Extended Ternn or the Standard Term, Developer shall provide by first class
mail, postage prepaid, a notice to all Tenants in the effected Units containing: (a) the
anticipated date of the expiration of the relevant Term; (b) any anticipated Rent increase
upon the expiration of the Term; (c) a statement that a copy of such notice will be sent to
the City; and (d) a statement that a public hearing may be held by the City on any
objection to such expiration and that the Tenant will receive notice of the hearing at least
fifteen (15) days in advance of any such hearing. Developer shall file a copy of the
above-described notice with the City Manager. In addition, Developer shall comply with
all requirements set forth in California Government Code Sections 65863.10 and
65863.11 or successor provisions and all other notification required by any state, federal,
or local law.
7.Miscellaneous
7.1 Assignment. This Agreement shall bind any successor, heir or assign of
Developer throughout the Terms, whether a change in interest occurs voluntarily
or involuntarily, by operation of law or otherwise, except as expressly released by
the City. The City approved the Density Bonus on the basis of and in
consideration of, this provision, and would not have done so otherwise.
Notwithstanding the foregoing, Developer may not assign its obligations under
this Agreement without the written consent of the City, which consent shall be in
the City's sole discretion. The City hereby specifically consents to the CPA
Conveyance, including the assignment of this Agreement to CPA.
7.2 Relationship of BMR Manual, Agreement, and Financing Agreements. This
Agreement, the BMR Manual, and any applicable Financing Agreements
independently regulate Units in the development. Developer agrees that the BMR
Manual go'verns the operation of the Development, except that (a) as to maximum
rents and income levels, the formulation in Section 2.2(f) above applies, (b) in the
event of any inconsistency between the BMR Manual and this Agreement, this
Agreement shall govern and (c) except as to maximum rents and income levels, in
the event of any inconsistency between the BMR Manual and a Financing
Agreement, the Financing Agreement shall govern. Notwithstanding anything
herein to the contrary, to the extent that California law prescribes that TCAC rents
be used in determining 50% AMI Household Rent or 60% AMI Household Rent,
then such rents shall be calculated using TCAC Rents.
7.3 Notice of Financing Agreements. Upon execution, amendment, or
termination of any Financing Agreement at any time during the term of this
Agreement, Developer shall provide City with written notice and, as applicable, a
copy of such agreement. The Developer shall also provide City with sufficient
information to provide any required notice to Senior Lender and Limited Partner.
Westport BMR Agreement (City 11 2)
17
7.4 Covenants Running with the Land. The City and Developer hereby declare
their express intent that the covenants and restrictions set forth in this Agreement
shall apply to and bind Developer and its heirs, executors, administrators,
successors, transferees, and assignees having or acquiring any right, title or
interest in or to any part of the Property and shall run with and burden such
portions of the Property until the end of the relevant Term. Until all or portions of
the Property are expressly released from the burdens of this Agreement, each and
every contract, deed or other instrument hereafter executed covering or conveying
the Property or any portion thereof shall be held conclusively to have been
executed, delivered, and accepted subject to such covenants and restrictions,
regardless of whether such covenants or restrictions are set forth in such contract,
deed, or other instrument. In the event of foreclosure or transfer by deed-in-lieu of
all or any portion of the Property prior to completion and sale of all of the Units,
title to all or any portion of the Property shall be taken subject to this Agreement.
Developer acknowledges that compliance with this Agreement is a requirement of
Density Bonus Law and the Project Approvals, and that no event of foreclosure or
trustee's sale may remove these requirements from the Property.
7.5 Indemnification.
a. To the fullest extent allowed by law, Developer shall indemnify and
hold harmless City, its City Council, boards and commissions, officers,
officials, agents, employees, servants, consultants and volunteers
(hereinafter, "Indemnitees") from and against any liability, loss, damage,
expense, and cost (including reasonable legal fees and costs of litigation or
arbitration), resulting from injury to or death of any person, damage to
property, or liability for other claims, stop notices, demands, causes of
actions and actions, arising out of or in any way related to Developer's
performance or nonperformance of its duties under this Agreement, or from
negligent acts or omissions or willful misconduct of Developer, its agents,
employees, contractors, or subcontractors. Developer shall, at his/her own
cost and expense, defend any and all claims, actions, suits or legal
proceedings that may be brought against the City or any of the Indemnitees
(with counsel acceptable to City) in connection with this Agreement or
arising out of Developer's performance or nonperformance of his/her duties
and obligations hereunder, including all claims, demands, causes of action,
liability or loss because of or arising out of, in whole or in part, the
operation of the Property, Units, and/or the Development, except to the
extent any of the foregoing is caused by the negligence or willful
misconduct of the City or the City's agents, employees and independent
contractors
Westport BMR Agreement (City 11 2)
18
b. Each Party shall notify the other Party by phone as soon as possible
and in writing within twenty-four (24) business hours of any claim or
damage related to activities performed under this Agreement. The Parties
shall cooperate with each other in the investigation and disposition of any
claim arising out of the activities under this Agreement, provided that
nothing shall require either Party to disclose any documents, records or
communications that are protected under the attorney-client privilege or
attorney work product privilege.
c. The provisions of this Section shall survive the expiration of the
Terms and any release of part or all of the Property from the burdens of this
Agreement.
7.6 Default.
a. Failure by Developer to perform any obligation under this
Agreement shall constitute a "Default" by the Developer under this
Agreement.
b. The City shall give written notice to the Developer and Limited
Partner specifying the nature of the violation giving rise to the Default. If
the violation is not corrected to the satisfaction of City within a reasonable
period of time, not longer than thirty (30) days a'fter the date the notice is
mailed, except as provided herein for specific Defaults, or within such
further time as the City reasonably determines is necessary to correct the
violation, the City may declare a Default under this Agreement by written
notice to the Developer. Notwithstanding anything to the contrary
contained herein, the City agrees that any cure of any default made or
tendered by the Limited Partner shall be deemed to be a cure by the
Developer, and shall be accepted or rejected on the same basis as if made or
tendered by Developer; provided, however, that the Limited Partner shall
not have any obligation to effectuate such cure.
c. Remedies. The occurrence of any Default following the expiration of
all applicable notice and cure periods will give the City the right to proceed
with any and all remedies available at law and equity. The Parties
acknowledge that damages alone would be an inadequate remedy for any
breach of the provisions of this Agreement, and agree that the obligations
of the Parties hereunder may be enforced in equity including, without
limitation, specific performance and injunctive relief.
7.7 Entire Understanding of the Parties. This Agreement constitutes the entire
Agreement between the Parties and no modification shall be binding unless
reduced to writing and signed by the Parties. If there is any conflict between this
Westport BMR Agreement (City 11 2)
19
Agreement and any other applicable agreements or Project Approvals, the most
restrictive provisions, as determined by the City in its sole discretion, shall control.
7.8 Each Party's Role in Drafting the Agreement. Each Party to this Agreement
has had an opportunity to review the Agreement, confer with legal counsel
regarding the meaning of the Agreement, and negotiate revisions to the
Agreement. Accordingly, neither Party shall rely upon Civil Code Section 1654 in
order to interpret any uncertainty in the meaning of the Agreement.
7.9 Recording and Filing. The City and Developer shall cause this Agreement,
and all amendments and supplements to it, to be recorded in the Official Records
of the County of Santa Clara.
7.10 Governing Law and Venue. This Agreement shall be governed by the laws
of the State of California. Venue shall be the County of Santa Clara.
7.11 TitleofPartsandSections.Anytitlesofthesectionsorsubsectionsofthis
Agreement are inserted for convenience of reference only and shall be disregarded
in interpreting any part of the Agreement's provisions.
7.12 Attorneys' Fees and Costs. In any action brought to enforce this
Agreement, the prevailing party shall be entitled to all costs and expenses of suit,
including reasonable attorneys' fees. This section shall be interpreted in
accordance with California Civil Code Section 1717 and judicial decisions
interpreting that statute.
7.13 Waiver of Requirements. No waiver of the requirements of this Agreement
shall occur unless expressly waived by the City in writing. No waiver will be
implied from any delay or failure by the City to take action on any breach or
Default of Developer or to pursue any remedy permitted under this Agreement or
applicable law. Any extension of time granted to Developer to perform any
obligation under this Agreement shall not operate as a waiver or release from any
of its obligations under this Agreement. Consent by the City to any act or omission
by Developer shall not be construed to be consent to any other or subsequent act
or omission or to waive the requirement for the City's written consent to future
WalVerS.
7.14 Notices. Any notice requirement set forth herein shall be deemed to be
satisfied one business day after deposit with federal express or another reputable
overnight carrier or three (3) days after mailing of the notice first-class United
States certified mail, postage prepaid, addressed to the appropriate Party as
follows:
Westport BMR Agreement (City 11 2)
20
Developer:c/o Pacific West Communities, Inc.
430 East State Street, Suite 100
Eagle, ID 83616
With a copy to Developer's Tax Credit
Investor Limited Partner:
U.S. Bancorp Community Developn'ient
Corporation
1307 Wasliington Avenue, Suite 300
Mail Code: SL MO RMCD
St. Loriis, MO 63103
USB Project No: 27729
Attn.: DirectorofLIHTCAsset
Management
And:
Kutak Rock LLP
1650 Farnam Street
Omaha, NE 68102
Attn: Jill H. Goldstein, Esq.
City:City of Cupeitino
10300 Torre A venue
Cupeitino, CA 95014
Attention: City Manager
Such written notices, demands and communications may be sent in the same
manner to such other addresses as the affected Party may from time to time
designate by mail as provided in this Section. Receipt shall be deemed to have
occurred on the date shown on a written receipt as the date of delivery or refusal of
delivery (or attempted delivery if undeliverable).
7.15 Severability. Except to the extent that it would frustrate the Parties' intent
in entering into this Agreement, if any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining portions of this Agreement shall not in any way be affected or impaired
thereby.
Westport BMR Agreement (City 11 2)
21
7.16 Multiple Originals: Counterparts. This Agreement may be executed in
multiple originals, each of which is deemed to be an original, and may be signed
in counterparts.
CITY OF CUPERTINO:
Approved as tq fi
Cltoplier D ensen
City Attorney
Greg Larso
Interim City Manager
DEVELOPER:
190 West St.James, LLC, a
California
Limited Liability Company
% ":l'
Kennetli S. Tersini
Manager
1391879.1
1391879 22
Westport BMR Agreement (City 11 2)
22
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State of Califoiia
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On Nr>t[et-t )oer /7, a:vozt before me, K'Slen SquarC'a , Notary Public,
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& ai & & & & & & & & ai &
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State of California
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EXHIBIT A
The following described real property in the City of Cupertino, County of Santa Clara,
State of California:
All of Parcel C as shown on that map entitled "Tract No. 10579", filed for record on
November 18, 2021, in Book 943 of Maps, at Pages 36-43, in Santa Clara County Records.
APN: A portion of 326-27-043