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11-012 Affordable Housing Agreement, Cupertino Vallco Redvelopment Project Area AFFORDABLE HOUSING AGREEMENT FOR THE CUPERTINO VALLCO REDEVELOPMENT PROJECT AREA This Affordable Housing Agreement (the "Agreement ") is for purposes of funding affordable housing projects and programs to be developed and/or administered by the Housing Trust of Santa Clara County, a California nonprofit public benefit corporation (the "Trust "), and is entered into as of February 15, 2011 by and among the Trust, the City of Cupertino, a municipal corporation (the "City ") and the City of Cupertino Redevelopment Agency, a public body, corporate and politic (the "Agency "), on the basis of the following facts, understandings and intentions of the parties: RECITALS A. Pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et m the "Redevelopment Law "), the City Council of the City has adopted and the Agency is responsible for implementing the Redevelopment Plan (the "Redevelopment Plan ") for the Cupertino Vallco Redevelopment Project Area (the "Project Area "). B. To assist in implementing the Redevelopment Plan, the Agency has adopted a five (5) -year implementation plan (the "Implementation Plan ") pursuant to Section 33490 of the Redevelopment Law. C. The Agency and the City are parties to a Settlement Agreement, dated as of January 22, 2002, relative to Santa Clara Superior Court Case No. CV793260, under which the Agency agreed to meet certain affordable housing obligations which are more stringent than otherwise required under the Redevelopment Law, attached as Exhibit A and incorporated into this Agreement (the "Settlement Agreement "). D. Pursuant to Health and Safety Code Sections 33334.2 and 33334.3 and the Settlement Agreement, the Agency has the obligation to establish a Low and Moderate Income Housing Fund (the "Housing Fund ") and to expend monies in the Housing Fund for the purposes of increasing, improving, and preserving the community's supply of housing available at affordable housing cost to low and moderate income households, lower income households, very low income households, and extremely low income households. E. Pursuant to Health and Safety Code Section 33125, the Agency has authority to execute contracts necessary or convenient to the exercise of its powers. F. Pursuant to Health and Safety Code Section 33220(e), the City is authorized to enter into this Agreement to assist the Agency in performing powers and obligations under the Redevelopment Law. G. The tasks the Trust has agreed to undertake under this Agreement support the Trust's corporate purposes and mission. 1 394 \01\941447 4 H. The Agency desires to contract with the Trust to provide Housing Funds to the Trust for use by the Trust to increase, improve, and preserve the supply of affordable housing in the Project Area or within the territorial jurisdiction of the City, consistent with the Redevelopment Plan, the Redevelopment Law, the Settlement Agreement, the Implementation Plan, and the Housing Element of the General P Lan of the City of Cupertino (the "Housing Element "). I. The Housing Element includes an assessment of the existing and projected housing needs of the community, including the City's regional fair share allocation of the regional housing need. The housing needs assessment in the Housing Element in effect as of the date of this Agreement indicates a need in the C ity for 171 housing units affordable to extremely low income households, 148 housing units affordable to very low income households, 213 housing units affordable to lower income households, and 185 housing units affordable to moderate income households, after accounting for units approved for construction. J. The parties desire that the Agenc will provide Housing Fund monies to the Trust for the Trust to utilize to finance Housing Fund- eligible activities to increase, improve, and preserve the supply of affordable housing within the Project Area and the territorial jurisdiction of the City, consistent with the Redevelopment Plan, the Redevelopment Law, the Implementation Plan, the Settlement Agreement and the Housing Element, as they currently exist or as they may be amended from time to time. K. The parties have set forth in Exhibit B attached to and incorporated in this Agreement by this reference, a list of potential projects and programs that the Trust may undertake utilizing funds provided pursuant to this Agreement. Exhibit B in its entirety is referred to in this Agreement as the "Affordable Housing Plan" and the projects and programs listed in the Affordable Housing Plan from time to time are referred to individually as an "Affordable Housing Project" or "Affordable Housing Program ", as applicable, and collectively as the "Affordable Housing Projects and Programs." The Affordable Housing Plan set forth in Exhibit B is subject to modification as provided in Section 2.2. L. The Affordable Housing Projects and Programs are consistent with the Redevelopment Plan, the Settlement Agreement, the Housing Element and the Implementation Plan. Implementation of the Affordable Housing Projects and Programs will benefit the Project Area and will assist in the elimination of blight :n the Project Area and the provision of affordable housing in the community. The use of funds as provided in this Agreement is authorized by the Redevelopment Law, and the Agency and City Council have made all findings required under the Redevelopment Law for such use. M. Pursuant to State CEQA Guidelines Section 15378(b)(4), approval of the Agreement is not a project subject to the California Environmental Quality Act ( "CEQA "), because this Agreement consists of the creation of a governmental funding mechanism for various affordable housing projects and programs, but does not commit funds to any specific project or program, in that environmental review required by CEQA shall be completed prior to 2 394\01\941447.4 the commencement of any Affordable Housing Project or Affordable Housing Program listed in the Affordable Housing Plan contained in Exhibit B. N. The City will provide on -going monitoring and provide all required reporting requirements to the State of California. O. By approving and entering into this Agreement, the Agency has pledged a portion of the tax increment revenue from the Project Area to fund the Affordable Housing Plan. The obligations set forth in this Agreement are contractual obligations that, if breached, will subject the parties to damages or other liabilities or remedies. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Trust, the City and the Agency agree as follows: ARTICLE 1 AGENCY GRANT Section 1.1 Agency Grant. Subject to the terms and conditions of this Agreement, the Agency hereby grants to the Trust, and the Trust hereby accepts from the Agency, a grant (the "Grant ") in an annual amount not to exceed the amounts set forth in Sections 1.2 (a) and (b) for the applicable fiscal year. The Trust shall use the Grant to complete the Affordable Housing Plan as further provided in Article 2. Section 1.2 Grant Source. The sources of the Grant from the Agency to the Trust consist of: (a) All funds currently held by the Agency in the Housing Fund and not previously encumbered by binding contract for other activities, projects, or programs, in the amount One Million Dollars ($1,000,000) for fiscal year 2010 -11 (the "Available Funds "); and (b) All future tax increment revenue allocated to, made available to, or otherwise received by the Agency or any Successor, to the extent such tax increment revenue (1) is or would be required pursuant to the Redevelopment Plan, the Settlement Agreement and the Redevelopment Law in effect as of the date of this Agreement to be deposited in the Housing Fund, and (2) is available to the Agency or Successor after the Agency or Successor makes all necessary annual payments required to be made with Housing Fund monies with respect to then existing debt obligations of the Agency, including, without limitation, bonded indebtedness and written agreements with other persons or entities, if any, in an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000) annually for the next fifteen (15) fiscal years commencing in fiscal year 2011 -12 (the "Pledged Funds "). As used in this Agreement, "tax increment revenue" means and includes taxes allocated to, or made available to, or otherwise received by the Agency or a Successor pursuant to Health and Safety Code Section 33670 et seq. or other provision of the Redevelopment Law, or pursuant to any applicable constitutional provision, statute, or other provision of law now existing or adopted in the future to pay the debts and obligations of the Agency. 3 394 \01 \941447.4 As used in this Agreement, "Successor" includes any lawful successor of the Agency, and/or any lawful successor to any powers and rights of the Agency, pursuant to any applicable constitutional provision, statute or other provision of law now existing or adopted in the future. Section 1.3 Payment Procedure. The Agency shall pay the Available Funds to the Trust within sixty (60) days of the date of this Agreement. The Agency shall pay the Pledged Funds to the Trust within sixty (60) days after receipt of each installment of tax increment revenue in an amount equal to the portion of such tax increment revenue constituting Pledged Funds. Until needed to fund an Affordable Housing Project or Affordable Housing Program, the Trust shall invest all Grant funds received from the Agency in an investment vehicle acceptable to all parties, and shall apply all interest earned thereon toward the cost of the Affordable Housing Projects and Programs. Section 1.4 Indebtedness of the Agency. The obligation of the Agency to pay the Grant funds from the sources set forth in Section 1.2 to the Trust pursuant to this Agreement shall constitute an indebtedness of the Agency incurred in carrying out the Redevelopment Plan and a pledge of tax increment revenue received by the Agency or Successor from the Project Area to repay such indebtedness under the provisions of Article XVI, Section 16 of the Constitution of the State of California, the Redevelopment Law, and the Redevelopment Plan, or under any applicable constitutional provision, statute, or other provision of law now existing or adopted in the future. Section 1.5 Subordination. The parties agree that the obligation of the Agency to make payments pursuant to this Agreement is subordinate to any obligation of the Agency to utilize Housing Fund monies to pay debt service on tax increment bonds, or any other loans or agreements, heretofore or hereafter issued and secured by a pledge of and a lien upon tax increment revenue generated by the Agency in the Project Area and required by Redevelopment Law and Settlement Agreement to be deposited in the Agency's Housing Fund. ART] CLE 2 AFFORDABLE HOUSING PROJECTS AND PROGRAMS Section 2.1 Use of Grant and Term. The Trust shall use the Grant exclusively for the purposes of increasing, improving, and preserving the community's supply of housing available at affordable housing cost to low and inoderate income households, lower income households, very low income households, and extremely low income households in accordance with the requirements of the Redevelopment Law, the Settlement Agreement and the terms and conditions of this Agreement. The Trust shall use the Grant to pay any costs which are eligible Housing Fund costs pursuant to Health and Safety Code Section 33334.2 et seq., including without limitation eligible costs of the Affordable Housing Projects and Programs shown in the Affordable Housing Plan and reasonable staff, c onsultant and other administrative costs in connection therewith (provided that administrative expenses will not exceed three percent (3 %) annually unless modified pursuant to Section 2.4). In addition, the Trust understands and agrees that the Grant funds shall not pay for more than fifty percent (50 %) of the total development costs for any Affordable Housing Project. The Trust shall expend the Grant funds and undertake 4 394\01\941447.4 the Affordable Housing Plan in accordance with all applicable laws and regulations, including without limitation, laws and regulations related to the permissible uses of Housing Fund monies, monitoring of housing assisted with Housing Funds, statutorily- required findings by the Agency Board and City Council, where applicable, prior to expenditures of Housing Funds, payment of prevailing wages (to the extent applicable), non - discrimination, and all applicable requirements of the Redevelopment Law, the Housing Element and the Settlement Agreement. The Trust further understands and agrees that each Affordable Housing Project funded with Grant proceeds must be subject to a restriction regulating certain of the units in the project to affordable housing cost for specified income levels, in a form to be provided and recorded by the Agency or its Successor, and effective for forty-five (45) years for ownership housing and fifty -five (55) years for rental housing. The Trust shall use the Grant funds for the various Affordable Housing Projects and Programs by not later than the earlier of (a) fifteen (15) years from the date of this Agreement, which date may be extended by written agreement of all the parties in the same manner as provided for modification of the Affordable Housing Plan as set forth in Section 2.2; and (b) the deadline for effectiveness of the Redevelopment Plan (the "Plan Effectiveness Deadline "), as set forth in the Redevelopment Plan (the "Term "). Within ninety (90) days following the City's fiscal year end (June 30` throughout the Term of this Agreement, the Trust agrees to provide the Agency and the City annual reports regarding the amount of Grant funds unused to date, interest earned on Grant funds during that preceding fiscal year and information on the use of the Grant funds to date with specific details as reasonably requested by the City as needed for any reports required under the Redevelopment Law or the Settlement Agreement. Section 2.2 Consultation; Modification of Improvement Plan. The parties shall confer periodically to establish priorities and tinning for funding and completion of the various Affordable Housing Projects and Programs, to review the scope and design of each Affordable Housing Project and Program, and to determine any mutually acceptable modifications in the cost estimates and budgets for the various Affordable Housing Projects and Programs. The parties may modify the Affordable Housing Plan from time to time: to provide for the use of additional federal, state and local funds; to account for unexpected revenues, whether greater or lesser; to modify, add, or delete an Affordable Housing Project or Program from the Affordable Housing Plan; to modify the cost estimate for individual Affordable Housing Projects and Programs; to maintain consistency with the City's General Plan, the Redevelopment Plan and the Settlement Agreement; or to take into consideration unforeseen circumstances, including without limitation circumstances that may come to light as a result of subsequent environmental review required by CEQA, as further described in Section 2.3. The Affordable Housing Plan may be modified by the Executive Director on behalf of the Trust, the City Manager on behalf of the City and the Executive Director on behalf of the Agency; provided, however, in no event shall the total Grant to be paid by the Agency to the Trust exceed the Maximum Grant Amount without a formal amendment of this Agreement approved by the Trust's board of directors, the City Council and the Agency Board; and, provided further, however, that any addition of any Affordable Housing Project or Program to the Affordable Housing Plan shall be conditioned upon the making of all required Redevelopment Law findings and CEQA findings by the City Council and the Agency Board in their policy discretion. Section 2.3 CEQA Review. Prior to the approval, use of Grant funds, and commencement of construction of any Affordable Housing Project or the implementation of any Affordable Housing Program (other than preliminary feasibility work that is exempt from the 5 394\01\941447.4 requirements of CEQA), all necessary environmental review required by CEQA shall be completed. All Affordable Housing Projects and Programs to be funded with Grant funds from the Agency pursuant to this Agreement must be consistent with CEQA. This Agreement in no way limits the discretion of the Planning Commission, the Agency, and City Council in completing environmental review of the Affordable Housing Projects. Section 2.4 Payment of Fees. The City shall provide any ongoing monitoring of Affordable Housing Projects and the Trust's activities under this Agreement, consultations regarding the Affordable Housing Plan and Programs under this Agreement, and all reporting to the State of California as required under the Redevelopment Law for as long as required under the Redevelopment Law, or any successor provisions of law. The Trust shall pay the City an administration fee of Twenty-Five Thousand Dollars ($25,000) for each of fiscal years 2011 -12 and 2012 -13 to cover these services. The Trust and the City may mutually agree in the future to additional administrative fees or other payments to be paid to the Trust or to the City, to the extent warranted at such times. Section 2.5 Ongoing Trust Obligations. The Trust shall be responsible for ongoing administration of the Housing Funds comprising the Grant. The Agency's grant and the Trust's acceptance of the Grant shall not imply any ownership or responsibility for the Affordable Housing Projects and Programs by the Agency or the City. Section 2.6 Indemnity. The Trust shall indemnify, defend, and hold the Agency, the City and their officers, board members, council members, agents, and employees, harmless against all claims, demands, damages, losses, costs, expenses, including without limitation, attorneys' fees and costs of litigation, or liabiliti3s made against them which arise out of, or in connection with the Affordable Housing Projects and Programs; provided, however, that this indemnity shall not extend to any claim arising solely from the Agency's or City's negligence or the Agency's or City's negligent failure to perform its obligations under this Agreement. ARTICLE 3 GENERAL PROVISIONS Section 3.1 Notices, Demands and Communications. Formal notices, demands, and communications among the parties shall be sufficiently given if, and shall not be deemed given unless, dispatched by certified mail, return rece;:pt requested, or delivered by an express delivery service with a receipt showing date of delivery, or hand delivered with a receipt showing date of delivery, to the principal offices of the parties as follows: Agency: City of Cupertino Redevelopment Agency 10300 Torre Avenue Cupertino, CA 95014 Attn: Executive Director City: City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 6 394 101\941447 4 Attn: City Manager Trust: Housing Trust of Santa Clara County 95 S. Market St, Suite 610 San Jose, CA 95113 Attn: Executive Director 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. Delivery shall be deemed to have occurred at the time indicated on the receipt for delivery or refusal of delivery. Section 3.2 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or understood by any of the parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture among the Agency, the City and the Trust or its agents, employees or contractors, and the Trust shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. The Trust has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. The Trust shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall be solely responsible for its own acts and those of its agents and employees. Section 3.3 No Claims. Nothing contained in this Agreement shall create or justify any claim against the Agency or the City by any person that the Trust may have employed or with whom the Trust may have contracted with respect to the Affordable Housing Projects. Section 3.4 Non - Liability of Officials. No member, official, employee or agent of the Agency or the City shall be personally liable to the Trust or any successor in interest, in the event of any default or breach by the Agency or City for any amount which may become due to the Trust or successor or on any obligation under the terms of this Agreement. Section 3.5 Actions of the Parties. Except as otherwise provided in this Agreement, whenever this Agreement calls for or permits a party's approval, consent, or waiver, the written approval, consent, or waiver of the Agency's Executive Director, the City's City Manager and the Trust's Executive Director (or their respective designees) shall constitute the approval, consent, or waiver of the Agency, City and the Trust, respectively, without further authorization required from the governing board of the party; provided, however, that the person vested with such authority may seek such further advice or authorization from the applicable governing board when she /he deems it appropriate. Section 3.6 Nondiscrimination. 7 394\01\941447.4 (a) In Performance of Agreement. The Trust and its contractors, subcontractors, agents, and employees shall not, because of the race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, age, or disability of any person, refuse to hire or employ the person, or refuse to select the person for a training program leading to employment, or bar or discharge the person from employment or from a training program leading to employment, or discriminate against the person in compensation or in terms, conditions or privileges of employment with respect to performance of this Agreement. (b) With Respect to Use of the Affordable Housing Projects. The Trust covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, age, or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Affordable Housing Projects and programs. Section 3.7 Discretion Retained. The City's execution of this Agreement in no way limits the discretion of the City in the permit and approval process in connection with development of any Affordable Housing Project:. In addition, the Agency retains the right to cease providing funding to the Trust from the source identified in Section 1.2(b) of this Agreement upon thirty (30) days written notice to the other parties and provided the Trust shall not be required to return any funds previously paid to the Trust under this Agreement, except to the extent required by court order. Section 3.8 No Third Party Beneficiaries. No person or entity other than the Agency, the City, the Trust and their permitted successors and assigns, shall have any right of action under this Agreement. Section 3.9 State Law. This Agreement, and the rights and obligations of the parties hereto, shall be construed and enforced in accordance with the laws of the State of California. Section 3.10 Records. The Trust shall maintain complete and accurate financial accounts, documents and records with respect to the performance of its obligations under this Agreement, and shall make same available to the Agency's or City's authorized agents for copying and auditing upon reasonable prior notice. Such accounts, documents and records shall be retained by the Trust for ten (10) years following completion of any applicable Affordable Housing Project. Section 3.11 Inspection of Documents. During the regular office hours and upon reasonable prior notice, the City and the Agency, by their duly authorized representatives, shall have the right to inspect and make copies of any books, records or reports of the Trust pertaining to this Agreement. Section 3.12 Additional Acts. The parties each agree to take such other and additional actions and execute and deliver such other and additional documents as may be reasonably requested by the other party for purposes of consummating the transactions contemplated in this Agreement. 8 394\01\941447.4 Section 3.13 Litigation Regarding Agreement Validity. In the event litigation is initiated attacking the validity of this Agreement, each party shall in good faith defend and seek to uphold the Agreement. Section 3.14 Validity of Agreement. If any provisions of this Agreement, or the application thereof to any person, party, transaction, or circumstance, is held invalid, the remainder of this Agreement, or the application of such provision to other persons, parties, transactions, or circumstances, shall not be affected thereby. Section 3.15 Entire Agreement; Modification and Amendment. This Agreement contains all of the agreements and understandings of the parties pertaining to the subject matter contained herein and supersedes all prior or contemporaneous agreements, representations and understandings of the parties. Except as otherwise provided in Section 2.2, this Agreement cannot be amended or modified except by written agreement of the parties. Section 3.16 Defaults and Remedies. If any party breaches any other material provision of this Agreement, one of the other parties shall first notify the breaching party and the other party in writing of the purported breach or failure, giving the breaching party thirty (30) days from receipt of such notice to cure or, if cure cannot be accomplished within thirty (30) days, to commence to cure such breach, failure, or act. In the event the breaching party does not then so cure within such thirty (30) days, or if the breach or failure is of such a nature that it cannot be cured within thirty (30) days, the breaching party fails to commence to cure within such thirty (30) days and thereafter diligently complete such cure within a reasonable time thereafter but in no event later than one hundred twenty (120) days, then the non - breaching parties shall be afforded all of their rights at law or in equity, by taking all or any of the following remedies: (a) terminating in writing this Agreement (provided, however, that the indemnification provisions of this Agreement shall survive such termination); (b) return of unused or improperly used Grant funds; and (c) prosecuting an action for damages or specific performance. Section 3.17 Binding Upon Successors. This Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest and assigns of each of the parties to this Agreement, whether by agreement or operation of law, and including, without limitation, any Successor to the Agency. Any reference in this Agreement to a specifically named party shall be deemed to apply to any successor, heir, administrator, executor or assign of such party who has acquired an interest in compliance with the terms of this Agreement, or under law. Section 3.18 Time Of The Essence. Time is of the essence in the performance of all duties and obligations under this Agreement. 9 394\01\941447.4 IN WITNESS WHEREOF, this Agreement has been executed as of the date set forth in the opening paragraph of this Agreement. CITY OF CUPERTINO REDEVELOPMENT AGENCY Approved as to Form j 41 Hutchins, Agency Counsel Gilbert Wong, Chairperson CITY OF CUPERTINO Approved as to Form w I Carol Korade, City Attorney David W, Knapp, City Manager HOUSING TRUST OF SANTA CLARA COUNTY Key' wick, Executive Director 10 394\01\941447.4 EXHIBIT A SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT is entered into as of the 22nd day of January, 2002, by and between Cupertino Citizens for Affordable Housing, an unincorporated association, Gertrude Welch, and individual, Josephine Sadler, an individual, the City of Cupertino, a municipal corporation, and the Cupertino Redevelopment Agency, a public body, corporate and politic, for the purpose of settling that certain lawsuit identified as Cupertino Citizens for Affordable Housing, etc., et al. vs. All Persons Interested in the Redevelopment Plan for the Cupertino Vallco Redevelopment Project, etc., et al., Santa Clara County Superior Court, Case No. CV793260 (the "litigation" or "action "). L RECITALS • A. Parties Plaintiffs CUPERTINO CITI2 ENS FOR AFFORDABLE HOUSING, an unincorporated association, • GERTRIJDE WELCH, and JOSEPHINE SADLER ( "Plaintiffs ") and Defendants CITY OF CUPERTINO, a city ( "City"), and CUPERTINO REDEVELOPMENT AGENCY, a public body ( "Agency ") (collectively, "Defendants" • or "Cupertino "). B. Procedural Background and Intent of the Partiieq Plaintiffs filed the action on October 17, 2000 to challenge the validity of the Redevelopment Plan for the Cupertino Vallco Redevelopment Project ( "the Project "), adopted by Ordinance No. 1850 by the Cupertino City Council on August 21, 2000. The Complaint consists of twelve causes of action, but the crux of said validation action is that, at the time the Cupertino City Council adopted the Project, it did not have before it 1 A -1 394\01\941447.4 substantial evidence that the Project Area is blighted, that invoking California Redevelopment Law is necessary to revitalise the Project Area, or that the Project is consistent with Cupertino's General Plan and Housing Element. Defendants deny Plaintiffs' allegations and maintain that adoption of the Cupertino Val lco Redevelopment Project was a valid exercise of governmental power, supported by substantial evidence in the recoil, and nothing contained in this Settlement Agreement constitutes an admission or concession by the Defendants of the merits of Plaintiffs' action or of any of Plaintiffs' allegations. All parties wish to resolve the action without further litigation. This agreement is entered into with the intent of resolving all currently pending issues regarding the validity of the Cupertino Vallco Redevelopment P.-oject and all other allegations raised in Plaintiffs' Complaint. • C. Definitions "Agency" means the Cupertino Redevelopment Agency. "Agreement" shall refer to this Settlement Agreement and the Stipulated Judgment incorporating the terms of this Agreement. "Area Median Income" means the median family income of the geographic area of the state that includes the City of Cupertino, as determined annually by the federal Department of Housing and Urban Development ( "HUD "). "Bay Area Legal Aid" (or "Bay Legal ") shall include the successors or assigns of Bay Area Legal Aid. "California. Community Redevelopment Law" (or "CRL ") means and refers to California Health and Safety Code Section 33000, et seq. 2 A -2 394\01\941447.4 "City" means the City of Cupertino. "Extremely Low Income households" (or `ELI households") shall refer to the definition contained in California Health and Safety Code Section 50106, as added by Chapter 741 of the Statutes of 2001, effective January 1, 2002 (currently, persons and families whose incomes do not exceed 30% .of the Area Median Income, adjusted for family size). "Low and Moderate Income Fund" (or "L&M Fund ") means the Agency's Low and Moderate Income Housing Fund, established pursuant to California Health and Safety Code Sections 33334.2, 33334.3, ind related sections. "Low Income households" shall refer to the definition contained in Califomia Health and Safety Code Section 50079.5 (currently, persons and families'whose incomes do not exceed 80% of the Area Median Income, adjusted for family size). "Moderate Income households" shall refer to the definition contained in California Health and Safety Code Section 50093 (currently, persons and families whose incomes do not exceed 12096 of the Area Median Income, adjusted for family size). "Project Area" means the Cupertino Valico Redevelopment Project Area, as described in the Redevelopment Plan for the Cupertino Valico Redevelopment Project adopted by Ordinance No. 1850. "Very Low Income households" shall refer to the definition contained in California Health and Safety Code Section 50105 (currently, persons and families whose incomes do not exceed 50% of the Area Median Income, adjusted for family size). 3 A -3 394\01\941447.4 • II. TERMS A. Twenty -five percent (25 %) of the tax increment allocated to the Agency from the Cupertino Vallco Redevelopment Project shall be deposited annually into the Low and Moderate Income Housing Fund established for the Project ( "the L&M Fund "). B. Five percent (5%) of the tax increment allocated to the Agency from the Cupertino Vallco Redevelopment Project (i.e., 20% of the L&M Fund) will be allocated to providing housing affordable to Extremely Low Income ( "ELI") tenants, subject, however, to compliance by the Agency with the requirements set forth in California Health and Safety Code Section 33334.4, as amended by the Statutes of 2001, Chapter 738, effective January 1, 2002. C. The Agency will ensure that at least five (5) affordable housing units are ' constructed for every 100,000 square feet of non - residential development area added ' within the Project Area with financial assistance from the Agency. For purposes of this paragraph (4), "non- residential development area added within the Project Area with financial assistance from the Agency" (hereinafter the "Added Square Footage ") shall mean building area constructed for occupancy pursuant to an agreement which provides for financial assistance from the Agency. 1. Added Square Footage shall not include: a. the new construction or remodeling of parking areas; or b. the remodeling or replacement (in substantially the same location) of existing building area, provided, however, that any currently occupied commercial building area that is replaced by any other use (e.g., parking lot, open space, 4 A -4 394\01\941447.4 etc.) will not be deducted from any Added Square Footage elsewhere within the Project • Area. • 2. For purposes of this paragraph II.C., the following examples illustrate the calculation of Added Square Footage pertaining to the existing Vallco shopping center a. If an existing 100,000 square foot major retail store is remodeled or replaced (in substantially the same location) with a 100,000 square foot major retail store, the Added Square Footage would be zero. b. If an existing 100,000 square foot major retail store is remodeled or replaced (in substantially the same location) with a 120,000 square foot major retail store, the Added Square Footage would be 20,000. c. If 100,000 square feet of existing mall store building area is remodeled or replaced (in substantially the same location) with 100,000 square feet of mall store building area or with parking area, the Added Square Footage would be zero. d. If 100,0011 square feet of mall store building area is constructed in a location previously unoccupied by mall store building area, the Added Square Footage would be 100,000. e. If a 120,00 square foot major retail store is constructed that requires the remodeling or replacement of 20,000 square feet of existing mall store building area, the Added Square Footage: would be 100,000. f. If 40,000 square feet of lower level mall store building area is removed west of Wolfe Road and a i 00,000 square foot theater is constructed east of Wolfe Road, the Added Square Footage would be 100,000. 5 A -5 394\01\941447.4 3. The first five (5) affordable housing units shall be provided in connection with the first 50,000 square feet of Added Square Footage. After the first 100,000 square feet of Added Square Footage, one (1) affordable housing unit shall be provided in connection with every 20,000 squ are feet of Added Square Footage. 4. The affordable housing units shall be provided to serve income levels in the proportions required by Health and Safety Code Section 33334.4, as amended by Chapter 738 of the Statutes of 2001, effective January 1, 2002, and the parties agree that the first five (5) affordable housing units shall be provided in the following proportions: (a) one (1) unit shall be affordable Very Low Income households; (b) two (2).units shall be affordable to Low Income households; and (c) two (2) units shall be affordable to Moderate Income households. 5. Affordable housing units required to be constructed by the City's Below Market Rate Housing Program shall be counted toward satisfaction of the Agency's obligation under this paragraph II.C. if they are constructed within the Project Area or with assistance from the City or Agency. Affordable housing units constructed in excess. of the minimum required by the City's Below Market Rate Housing Program, whether or not they are constructed with assistance from the City or Agency, shall also be counted toward satisfaction of the Agency's obligation under this paragraph II.C. 6. The affordable housing units may be constructed within the Project Area or elsewhere within the City of Cupertino. 7. Occupancy of the Added Square Footage will be withheld until construction of the requisite affordable hcusing units has been provided for under executed contracts with developers or contractors. 6 A -•6 394\01\941447.4 D. The Agency will make every reasonable effort to leverage L&M funds, provided that the added funding sources do not give priority to any special need group. E. The Agency will make monitoring reports, prepared in compliartce with applicable requirements of the CRL, available to Bay Area Legal Aid on an annual basis for the life of the Cupertino Vallco Redevelopment Project. F. With respect to affordable housing rental units constructed or substantially rehabilitated pursuant to an agreement which provides for financial assistance from the Agency, the Agency agrees that: 1. It shall include in :such agreement a requirement that the owner of said units notify, or cause its property manager to notify, the Santa Clara County Housing Authority and Cupertino Community Services of vacancies; and 2: It shall include in such agreement a requirement that the owner and/or property manager of said units participate in a seminar presented by the Santa_ Clara County Housing Authority or Bay Area Legal Aid for the purpose of educating landlords regarding the federal Section 3 voucher program. The Agency will cooperate with the Santa Clara County Housing Authority and/or Bay Area Legal Aid in the periodic scheduling of such seminars. G. Each party shall bear its own fees and costs, except that with respect to the costs of preparation of the Record of Proceedings related to adoption of the Redevelopment Plan, the Plaintiffs shall pay the sum of $374.20 and the Defendants shall be responsible for the balance of $2,599.82. 7 A -7 394\01\941447.4 H. Bay Area Legal Aid may request records under and pursuant to the Public Records Act, Government Code Section 6250 et seq., as necessary and appropriate to determining compliance with the terms of this Settlement Agreement. III. DISPOSITION OF THE LITIGATION/ENFORCEMENT OF • SETTLEMENT AGREEMENT This Settlement Agreement is a complete, final and binding resolution of all issues and claims in the above- captioned matter. The parties agree to execute and file a Stipulated Judgment which includes all the provisions of this Settlement Agreement. Plaintiffs, and each of them, in consideration of the Defendants' agreements under this Settlement Agreement, hereby release the Defendants from all claims of the Plaintiffs pertaining to the validity of the Redevelopment Plan for the Cupertino .Vallco Redevelopment Project, the Cupertino Vallc:o Redevelopment Project, Ordinance No. 1850, and all other proceedings and actions taken by the Defendants in connection with the adoption of the Redevelopment Plan. In the event that both of the individual plaintiffs die or become mentally or physically incapacitated prior to final performance of this Settlement Agreement, the parties hereby stipulate that Bay Area Legal Aid may designate one or more individuals to act on behalf of the individual plaintiffs and Cupertino Citizens for Affordable • Housing, provided that any individual so designated is a resident of the City of Cupertino.' The parties further stipulate that the death of one or more named plaintiffs shall have no effect whatsoever on the power of the surviving named plaintiff and/or Bay Area Legal Aid's designee to enforce this Settlement Agr:ement. The parties hereby jointly request, and the Stipulated Judgment shall specify, that the Court retain jurisdiction over this case and over the parties personally for the purpose 8 A -8 394\01\941447.4 of enforcing this Settlement Agreement. This includes tolling of any applicable statute, rule, or court order affecting timely prosecution of this action, including but not limited to the five -year dismissal statute, California Code of Civil Procedure Section 583330. DATED., 3 .2002 ZAZZeZe. GERTRUDE WELCH DATED: k - . 2002 .,f c �OSEPF3°Rl£3ADLER CUPERTINO CITIZENS FOR AFFORDABLE HOUSING, an unincorporated association DATED: .2002 By b�utder ;% Its APPROVED AS TO FORM BY ATTORNEYS FOR PLAINTIFFS: BAY ARE EGAE AID DATED: ! 5 , 2002 By 4 William Litt, Esq. SIGNATURES CONTINUED ON NEXT PAGE 9 A -9 394\01\941447.4 CFFY OF CUPERTINO, a municipal corporation DATED: 1 k , 2002 Richard Lowenthal, Mayor DATED: I. 2- , 2002 By David Knapp, City Manager . CUPERTINO REDEVELOPMENT AGENCY, a public body, corporate and politic RATED: � IZq , 2aoz lay � Richard L wenthal, Chairman DATED: 1 • , 2002 By W (��/� avid Knapp, Executive (hirec(or APPROVED AS TO FORM BY ATTORNEYS FOR DEFENDANTS: DATED: 1 ` C t 2002 CHARLES T. KILIAN, City Attorney ' MURPHY & DAVIS, LLP � C ' _- / DATED: 2002 By � C. Nicole Murphy, Esq. • 1) A -10 394\01\941447.4 EXHIBIT B AFFORDABLE HOUSING PLAN Affordable Housing Projects and Programs. A. Types of Projects • Developer Loans for development of affordable rental housing • First Time Homebuyer Program consistent with Redevelopment Law — including down payment assistance, equity share or closing cost loans • Transitional Housing to assist with homeless prevention • Housing Rehabilitation consistent with Redevelopment Law B. Required Income Levels Pursuant to current Redevelopment Law and the Settlement Agreement, the Housing Fund monies provided to the Trust under this Agreement must be spent in the following percentages on the identified income levels, which percentages may be modified from time to time as the City's Regional Housing Needs Allocations are modified: • 24% on Extremely Low Income Units • 21% on Very Low Income Units • 30% on Low Income Units • 16% on Moderate, Low, Very Low or Extremely Low Income Units B -1 394\01\941447.4