16-121 IAC at Cupertino, LLC (Irvine Company), Affordable Housing Agreement and Declaration of Restrictive Covenants~. ~· .. . . l
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Cupertino
10300 Torre A venue
Cupertino, CA 95014
Attn .: City Manager
No fee for recording pursuant to
Government Code Section 27383
DOCUMENT: 23462102
II Ill /11111 I 11111111 1111 1111
RE GIN A AL COMENDRAS
SANTA CLARA CO UNT Y RE CORDER
Recorded at the request of
C i t y
Fees .
Taxes .
Copies
AMT PAID
Pages : 30
"'No Fee s
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10 / 13 /20 I 6
8: 17 AM
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS
This AFFORDABLE HOUSING AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS ("Agreement") is entered into as of this 4th day of August, 2016
("Effective Date") by and between the CITY OF CUPERTINO, a municipal corporation (the
"City"), and IAC AT CUPERTINO , LLC, a Delaware limited liability company (the
"Developer"), (individually a "Party" and together the "Parties"), with reference to the following
facts:
A. Developer is the owner of that certain real property of approximately 12.44 acres
located , at 19500 Pruneridge A venue, Cupertino, County of Santa Clara, California, as more
particularly described in Attachment 1 attached hereto and incorporated herein by this reference
( the "Property").
B . The Parties have entered into a Development Agreement ("Development
Agreement"), effective AH16f '/ 1 20/(p and recorded on Atirs+ 2,z..i,i.i n the Official Records of
Santa Clara County as Ins rument No. 2.?:>'2.:,<t<J5l'f , to fac1 1tate development of the Property
subject to certam terms and conditions. Developer intends to demolish the existing 342 -unit
apartment community on the property ("Existing Residential Development") and redevelop the
property with 942 apartments and related uses, as further described in the Development
Agreement (the "Project"). All capitalized terms not otherwise defined in this Agreement have
the meaning ascribed to them in the Development Agreement.
C. As a material consideration for the long term assurance s , vested rights , and other
City obligations provided by the Development Agreement and as a material inducement to City
to enter into the Development Agreement, Developer offered and agreed to certain terms as
specified in the Development Agreement. Section 3 .13.3 of the Development Agreement
s pecifies that the Parties s h all enter into and record this Agreement prior to or concurrently with
the recordation of the Development Agreement.
D. Developer is the successor-in-interest of Irvine Apartment Communities, Inc ., a
Delaware corporation ("Original Declarant"), which executed that certain "City of Cupertino
Below Market Rate Rental Housing -Declaration of Resale Controls " dated September 8, 1997
and recorded on October 20, 1997, as Document No. 13902426 in the Official Records of Santa
O A K #4822-1037-906 1 v i
Clara County (the "Original Declaration") and declared for itself, its successors, heirs, grantees,
and assigns that its interest in the Property would be held subject to the Original Declaration . The
Original Declaration provided , in part, that thirty-four (34) units (the "Original Affordable
Units") that now exist on the Property would be occupied exclusively by, and rented to, persons
or households of very low to low income in compliance with the provisions of the City's
Housing Mitigation Procedural Manual for a period of thirty (30) years from the date of
recordation, or until October 20, 2027; and that any modification, amendment, or deletion of any
terms of the Original Declaration must be requested in writing and approved by the City Council
of the City of Cupertino. The Parties acknowledge and agree that the Original Declaration
requires the Original Affordable Units to provide eighteen (18) Affordable Units affordable to
Very Low Income Households and sixteen (16) Affordable Units affordable to Low Income
Households with the bedroom counts as depicted on Table I on Attachment 2 , but that the
Existing Residential Development is currently occupied by the Affordable Unit Tenants as
follows : seventeen (17) Very Low Income Households and seventeen (17) Low Income
Households with the bedroom counts indicated on the footnote to Table 1 Attachment 2.
E. Developer, as successor-in-interest to the Original Declarant, has requested in
writing that City modify the Original Declaration to allow the Original Affordable Units to (i)
continue to be operated with the existing income levels and bedroom counts noted on Table 1 of
Attachment 2 for as long as necessary to minimize disruption to the Affordable Unit Tenants, as
further described in Section 2.3(f); (ii) be unoccupied for a period of approximately four years so
that the Project may be built; and (iii) to allow the Original Affordable Units to be removed and
replaced in the Project.
F. To facilitate development of the Project, the Parties desire to release the Property
from the terms of the Original Declaration and subject the Property to the terms of this
Agreement. Should demolition of the Original Affordable Units not commence in the time
period set forth in this Agreement, the Original Affordable Units shall be regulated in accordance
with this Agreement.
G. Should the Project proceed as contemplated, pursuant to Section 4 .1.1 of the
Development Agreement, in lieu of payment of some Housing Impact Fees (as that term is
defined in the Development Agreement), the Developer has voluntarily committed to (1) provide
an additional thirty-seven (37) affordable units in the Project, seven (7) of which are to be
occupied exclusively by, and rented to, households of low income and thirty (30) of which are to
be occupied exclusively by, and rented to, households of moderate income ("New Affordable
Units"), (2) to replace the Original Affordable Units consistent with the requirements of the
Original Declaration as reflected on Table I of Attachment 2, and (3) extend the term applicable
to the Original Affordable Units in the Project to a term that is concurrent with the New
Affordable Units.
H . This Agreement allows the Developer to suspend the obligation to provide
affordable units on the Property for a limited period, subject to the terms and conditions of this
Agreement; provides for inclusion of Affordable Units in the Project; and provides for the rights
of Affordable Unit Tenants to occupy Affordable Units in the Project. The Parties intend that
this Agreement shall embody the entire agreement between the Parties regarding the subject
OA K #4822-10 37 -9061 v i 2
matter of the Original Declaration and, except as expressly provided in this Agreement, shall
thereby supersede the Original Declaration on and after the Effective Date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
in this Agreement and other valuable consideration, it is mutually agreed by and between the
Parties as follows .
AGREEMENT
The Parties agree and acknowledge that the above recitals are true and accurate, and are
incorporated into this Agreement by this reference .
ARTICLE 1.
DEFINITIONS AND EXHIBITS
Section 1.1. Definitions . When used in this Agreement, the following terms shall have
the respective meanings assigned to them in this Article I.
(a) "Affordable Rent" is the maximum allowable Rent for an Affordable Unit,
equal to, for Affordable Units occupied by Moderate Income Households: one-twelfth (I/12th)
of thirty percent (30 %) of one hundred ten percent (110 %) of Area Median Income; for
Affordable Units occupied by Low Income Households: one-twelfth (1112th) of thirty percent
(30 %) of sixty percent (60 %) of Area Median Income ; and, for Affordable Units occupied by
Very Low Income Households : one-twelfth (I/12th) of thirty percent (30 %) of fifty percent
(50 %) of Area Median Income, each adjusted for assumed household size of one person in a
studio Affordable Unit, two persons in a one-bedroom Affordable Unit, three persons in a two-
bedroom Affordable Unit, and one additional person for every additional bedroom thereafter.
(b) "Affordable Units" are those units to be constructed as part of the Project
to be available at Affordable Rent to Very Low, Low , and Moderate Income Households .
"Affordable Units" also include Original Affordable Units, Relocated Affordable Units, and the
New Affordable Units, where applicable.
(c) "Affordable Unit Tenants " are tenants displaced from Original Affordable
Units.
(d) "Agreement" is defined in the first paragraph on page I of this Agreement.
(e) "Area Median Income" is the median Household Income in Santa Clara
County as determined periodically by the State of California pursuant to California Code of
Regulations, Title 25, Section 6932 or successor provision.
(f)
(g)
(h)
OA K #4822-10 37 -9061 v i
"City" is defined in the first paragraph on page 1 of this Agreement.
"City Council" is the City Council of the City of Cupertino .
"Developer" is defined in the first paragraph on page I of thi s Agreement.
3
(i) "Development Agreement" is defined in Recital B .
U) "Director" is the Community Development Director or successor position.
(k) "Effective Date" is defined in the first paragraph on page 1 of this
Agreement.
(]) "Eligible Household" is a household which has been determined to be
eligible to rent an Affordable Unit in compliance with this Agreement.
(m) "Household Income" of a Tenant is determined as provided in the City's
Policy and Procedures Manual or successor publication. ·
(n) "Initial Suspension Period" is defined in Section 3.1 (a).
(o) "Low Income Household" is a household with a Household Income
between fifty percent (50 %) and eighty percent (80 %) of Area Median Income, adjusted for
actual household size.
(p) "Market Rate Units" are units in the Project which are not Affordable
Units .
(q) "Maximum Suspension Period" is defined in Section 3.1 (b).
(r) "Moderate Income Household" is a household with a Household Income
between the Low Income limit and one hundred twenty percent (120 %) of Area Median Income,
adjusted for actual household size
(s) "Mortgagee" is the holder of any mortgage, deed of trust, security
agreement, and other like security instrument encumbering all or any portion of the Property or
any of the Developer's rights under this Agreement.
(t) "New Affordable Units" is defined in Recital G.
(u) "North Park" is Developer's North Park Apartment Homes, located at
3500 Pal mill a Drive, San Jose 95134.
(v) "Original Affordable Units" is defined in Recital D.
(w) "Original Declarant" is defined in Recital D.
(x) "Original Declaration" is defined in Recital D .
(y) "Original Term" is defined in Section 2 .2(a).
(z) "Party" or "Parties" are defined in the first paragraph on page 1 of this
Agreement.
OA K #4822 -10 37-9061 v i 4
(aa) "Policy and Procedures Manual" is the Policy and Procedures Manual for
Administering Deed Restricted Affordable Housing Units, or successor publication, adopted
from time to time by the City Council to the extent such successor publication does not conflict
with any material terms of this Agreement.
(bb) "Project" is defined in Recital B .
(cc) "Property" is defined in Recital A.
(dd) "Relocated Affordable Unit" is defined in Section 3.4.
(ee) "Relocation Notice" is the ninety (90) day notice to Tenants prior to the
requirement that the Tenants vacate an Original Affordable Housing Unit given pursuant to
Government Code Section 7267.3.
(ff) "Relocation Plan" is a plan adopted by the City regarding the relocation of
the Affordable Unit Tenants as required by Government Code Section 7260 et seq. and
implementing regulations (25 CCR Section 6000 et seq.).
(gg) "Relocation Suspension Period" is defined in Section 3 .1 (b).
(hh) "Rent" includes monthly rent paid to the Developer, utilities, and all
mandatory fees for parking and other housing services associated with the Affordable Unit,
including but not limited to parking, bicycle storage, storage lockers, and use of all common
areas. An allowance for utilities paid by the Tenant is established by the Santa Clara County
Housing Authority , and indudes garbage collection, sewer, water, electricity, gas and other
heating, cooking and refrigeration fuel, but not telephone service or cable TV, and such
allowance must be deducted from the monthly rent paid to the Developer.
(ii) "Tenant" is a household occupying an Affordable Unit pursuant to a valid
lease or rental agreement with the Developer.
Uj) "Tenant Lease" is defined in Section 6.4.
(kk) "Term" is defined in Section 5.2.
(11) "Very Low Income Household" is a household with a Household Income
at or below fifty percent (50 %) of Area Median Income, adjusted for actual household size .
Section 1.2 . Attachments. The following attachments are incorporated into this
Agreement:
Attachment 1 Legal Description of the Property.
Attachment 2 Schedule of Affordable Units .
Attachment 3 Example of Affordable Rents and Maximum Income Level of Tenants for
Affordable Units.
OAK #4822-1037 -906 1 v i 5
ARTICLE 2.
PRE-DEMOLITION RENT REGULATORY PROVISIONS
Section 2.1 . Effect of Article 2. The terms and conditions of this Article 2 shall apply
as of the Effective Date of this Agreement. Upon Developer's application for, and City's
issuance of, a demolition permit to demolish all or part of the Existing Residential Development
in connection with the Project, the terms and conditions of this Article 2 shall be of no further
force and effect, and the terms and conditions of Article 4 and Article 5 shall govern the
affordability and occupancy of the Affordable Units. Upon the termination of the applicability
of this Article 2, the Parties shall cooperate in good faith to prepare and record a notice of such
termination in a mutually-acceptable form.
Section 2.2. Original Term .
(a) The "Original Term" of this Agreement is the period in which each of the
Original Affordable Units shall be rented to Very Low and Low Income Households for so long
as this Article 2 remains in effect. For all of the Original Affordable Units, the Original Term
shall be that period of time that is thirty (30) years from the effective date of the Original
Declaration (or October 20, 2027) plus a day-for-day extension equal to the time, if any, from the
date the first Original Affordable Unit is vacated during the Initial Suspension Period or the
Relocation Suspension Period through the end of the Relocation Suspension Period; provided,
however, that upon Developer's application for, and City's issuance of, a demolition permit
pursuant to Section 2.1 , this Section shall have no further force and effect, and the Original Term
shall be superseded by the Term , pursuant to Section 5 .2.
Section 2 .3 . Affordability and Occupancy Covenants.
(a) Occupancy Requirements. Subject to the provisions of subsections (e) and
(f) of this Section, the Affordable Units shall be rented to and occupied by Tenants meeting the
following income requirements in accordance with Table 1 on Attachment 2:
(1) Very Low Income Units. Eighteen (18) of the Affordable Units
shall be rented at Affordable Rent to Very Low Income Households.
(2) Low Income Units. Sixteen (16) of the Affordable Units shall be
rented at Affordable Rent to Low Income Households.
(3) The Affordable Units shall not be kept vacant or used for any
purpose except for residential use and shall be offered for rent to Eligible Households at
Affordable Rents, except as expressly provided in Section 3.1 below.
(b) Allowable Rent. Subject to the provisions of subsection (e) of this Section
below, the maximum Rent charged to Tenants of the Affordable Units shall not exceed
Affordable Rent.
(c) City Approval of Rent Increases. The City shall review all proposed Rent
increases to determine whether the proposed increases are consistent with the provi s ions of this
OAK#4822-1037 -906 1 v i 6
Agreement. Developer shall certify to the City that Developer is not charging any fee other than
Affordable Rent to Tenants of the Affordable Units for all of the components of Rent defined in
Section 1.1 (hh) above.
(d) Schedule of Affordable Rents . The City has provided the Developer with
a schedule of Affordable Rents for the Affordable Units in effect on the date of this Agreement,
set forth in attached Attachment 3. The City annually determines Affordable Rents (including
utility allowances) based on changes in Area Median Income and utility allowances, and
Developer shall annually obtain a copy of the schedule from the Director.
(e) Increased Income of Tenants.
(1) Increase from Very Low Income to Low Income . If, upon annual
recertification of a Tenant's Household Income, the Developer determines that a former Very
Low Income Household's income has increased and exceeds the qualifying income for a Very
Low Income Household, but does not exceed the qualifying limit for a Low Income Household,
then, upon expiration of the Tenant's lease and after sixty (60) days written notice to the Tenant,
the Tenant 's Rent may be increased to Affordable Rent for Low Income Households. The
Developer shall rent the next available Affordable Unit to a Very Low Income Household at a
Rent not exceeding Affordable Rent for Very Low Income Households .
(2) Increase above Low Income. If, upon recertification of a Tenant's
Household Income, the Developer determines that the Tenant 's Household Income has increased
and exceeds the qualifying income for a Low Income Household, then the Tenant shall be given
written notice that Tenant shall vacate the Affordable Unit three (3) months from the date of the
notice or upon expiration of the Tenant's lease , whichever is later. A three (3) month extension
may be granted by the Director in cases of extreme hardship. If, prior to the date by which the
Tenant must vacate the Affordable Unit, another unit in the Project is vacated which is not
designated as an Affordable Unit and is of appropriate bedroom size, the Developer may , at the
Developer's option, request the Director to approve a change in the location of the Affordable
Unit; allow the Tenant to remain in the original unit at market rent; and designate the newly
vacated unit as an Affordable Unit if approved by the Director.
(f) Affordable Unit Tenants. In order to minimize the disruption of the
Affordable Unit Tenants to the maximum extent practical, the Developer shall have the right to
operate the Original Affordable Units with the income levels and bedroom size as indicated by
the footnote on Table 1 of Attachment 2 until the end of the Relocation Suspension Period or the
end of the Initial Suspension Period, as applicable. At the end of either Suspension Period, the
Developer shall consult with the City as the Affordable Unit Tenants vacate the Original
Affordable Units and as replacement units become available to (a) bring the Existing Residential
Development (if it has not been demolished) into full compliance with the Original Declaration
with the income levels and bedroom size shown in Table 1 of Attachment 2, excluding the
footnote; or (b) provide Relocated Affordable Units in compliance with the Original Declaration ,
with the income levels and bedroom size shown in Table 1 of Attachment 2, excluding the
footnote.
OAK#4822-1037 -9 061 v i 7
ARTICLE 3.
SUSPENSION OF AFFORDABLE UNIT REQUIREMENTS; TENANT RELOCATION
Section 3.1. Suspension Periods .
(a) From and after the Effective Date of this Agreement, the requirement to
maintain the Original Affordable Units at the Property shall be suspended for the period between
the date an Affordable Unit Tenant voluntarily vacates an Original Affordable Unit and the
earlier to occur of the following: (i) the date of the Relocation Notice, (ii) ninety (90) days after
the Original Affordable Unit is vacated, or (iii) one (1) year after the Effective Date (the "Initial
Suspension Period").
(b) The requirement to maintain the Original Affordable Units at the Property
shall further be suspended for the period between the date an Affordable Unit Tenant vacates an
Original Affordable Unit following the date of the Relocation Notice and the date that a
replacement Affordable Unit is available for rent in the Project to that Affordable Unit Tenant
(the "Relocation Suspension Period"). In no event shall the Relocation Suspension Period
extend past January 1, 2021 (the "Maximum Suspensi on Period").
Section 3 .2 . Relocation of Affordable Unit Tenants.
(a) Prior to the date of the Relocation Notice, any Affordable Unit Tenant
who: (i) occupied an Affordable Unit in the Existing Residential Development for at least ninety
(90) days prior to the Effective Date of the Development Agreement, and (ii) moves from the
Existing Residential Development after the Effective Date of the Development Agreement shall
be considered a "displaced person" under the State Relocation Laws and shall be entitled to
Relocation Costs. Within ten (10) days after an Affordable Unit Tenant notifies Developer of its
intent to vacate an Affordable Unit, the Developer shall provide the City with written notice and
current contact information for any such Affordable Unit Tenant. The City, or, at the City's
option, the Relocation Consultant, shall provide any such Affordable Unit Tenant with written
notice of the Affordable Unit Tenant's rights as a displaced person as required by State
Relocation Laws and shall provide relocation benefits to such Affordable Unit Tenant as
applicable.
(b) Following the date of the Relocation Notice , if an Affordable Unit Tenant
is provided relocation assistance pursuant to the Relocation Plan and vacates the Original
Affordable Unit, the Original Affordable Unit may remain vacant until: (i) it is demolished , (ii)
units in the Existing Residential Development are re-offered for rent, or (iii) January 1, 2021,
whichever is earlier.
(c) Affordable Unit Tenants that elect to be relocated to North Park or another
development owned by the Developer or Developer's affiliate pursuant to the Relocation
Agreement shall be charged Affordable Rent based on the Tenant's Household Income, subject
to the provisions of subsection (d) of this Section below, during the period between the initial
occupancy of the North Park unit (or a unit in an alternative development) by the Affordable
Unit Tenant and the earliest of: (i) the date that the Affordable Unit Tenant voluntarily vacates
0AK#4822-1037-9061 vi 8
the unit in North Park (or a unit in an alternative development), or (ii) thirty (30) days after the
date that the sixty (60)-day period described in Section 3 .5 expires.
(d) Increased Income of Tenants.
(1) Increase from Very Low Income to Low Income. If, upon annual
recertification of a Tenant's Household Income, the Developer determines that a former Very
Low Income Household's income has increased and exceeds the qualifying income for a Very
Low Income Household , but does not exceed the qualifying limit for a Low Income Household,
then, upon expiration of the Tenant's lease and after sixty (60) days written notice to the Tenant,
the Tenant's Rent may be increased to Affordable Rent for Low Income Households.
(2) Increase from Very Low or Low Income to Moderate Income. If,
upon annual recertification of a Tenant's Household Income, the Developer determines that a
former Very Low or Low Income Household's income has increased and exceeds the qualifying
income for a Very Low or Low Income Household, as applicable, but does not exceed the
qualifying limit for a Moderate Income Household, then , upon expiration of the Tenant's lease
and after sixty (60) days written notice to the Tenant, the Tenant 's Rent may be increased to
thirty-five percent (35 %) of the Tenant's Household Income.
(3) Increase above Moderate Income. If, upon recertification of a
Tenant 's Household Income , the Developer determines that the Tenant's Household Income has
increased and exceeds the qualifying income for a Moderate Income Household, then the Tenant
shall be given written notice that Tenant shall vacate the North Park unit (or a unit in an
alternative development) three (3) months from the date of the notice or upon expiration of the
Tenant's lease, whichever is later. The Developer may, at the Developer's option, allow the
Tenant to remain in the North Park unit (or a unit in an alternative development) at market rent.
Section 3 .3. Original Affordable Units Not Demolished within Maximum Suspension
Period. If any Original Affordable Units are not demolished within the Maximum Suspension
Period, the Original Affordable Units shall be made available for rent to an Eligible Household
in the income category required under Article 2 of this Agreement; or the Developer shall make
available a Relocated Affordable Unit as specified in Section 3.4.
Section 3.4. Original Affordable Units Demolished; Construction Not Completed
within Maximum Suspension Period. If Developer does not complete vertical construction of an
Affordable Unit to replace an Original Affordable Unit at the Project before the end of the
Maximum Suspension Period, Developer shall, no later than 90 days after the end of such
Maximum Suspension Period, make available a "Relocated Affordable Unit" for rent to an
Eligible Household in the same income category as the Original Affordable Unit. The Relocated
Affordable Unit may be provided at an alternate location either within any existing structures at
the Property or at such other alternate location within the City of Cupertino as mutually
acceptable to City and Developer.
Section 3.5. Right of First Refusal to Return.
(a) The Developer shall provide all Affordable Unit Households who are
Eligible Households a one-time right of first refusal for rental of a comparable Affordable Unit
O A K #4822-10 37-90 6 1 v i 9
in either: (i) the Existing Residential Development if units are re-offered for rent prior to
demolition of the Existing Residential Development; (ii) Relocated Affordable Units, if the
Developer does not complete construction of the Project within the Maximum Suspension
Period; or (iii) rental of a comparable Affordable Unit in the Project at the time a comparable
Affordable Unit first becomes available for occupancy after completion.
(b) The Developer shall provide the City with written notice at least sixty (60)
days before any units in the Existing Residential Development are re-offered for rent pursuant to
this Article 3; before any Relocated Affordable Unit is offered for rent; or before an Affordable
Unit in the Project becomes available for occupancy after completion.
(c) After receiving notice from the Developer, the City shall provide an
Affordable Unit Tenant with written notice of its one-time right to rent the Affordable Unit,
subject to that tenant's qualifying as an Eligible Household. The Affordable Unit Tenant shall
have sixty (60) days from the date of such notice to qualify as an Eligible Household and to
notify the City that the tenant elects to occupy the Affordable Unit, and shall have an additional
thirty (30) days to occupy the Affordable Unit. If the Affordable Unit Tenant does not notify the
City within the sixty (60)-day period, qualify as an Eligible Household, and occupy the
Affordable Unit within the additional thirty (30)-day period, the Affordable Unit Tenant shall
have no further rights to occupy an Affordable Unit.
ARTICLE 4.
CONSTRUCTION OF PROJECT AND AFFORDABLE RENTAL UNITS
Section 4.1 . Applicability. The terms and conditions of this Article 4 shall apply upon
Developer's application for, and City 's issuance of, a demolition permit to demolish all or part of
the Existing Residential Development in connection with the Project, upon which time the terms
and conditions of Article 2 shall be of no further force and effect.
Section 4.2 . Construction of Affordable Units. The Affordable Units shall be
constructed in the Project in proportion to construction of the Market-Rate Units, at a ratio of one
Affordable Unit to each fifteen (15) Market-Rate Units . No building permit shall be issued for
any Market-Rate Unit unless a proportional number of building permits have been issued for
Affordable Units, and no certificates of occupancy or final inspections shall be issued for any
Market-Rate Units unless a proportional number of certificates of occupancy or final inspections
have been issued for Affordable Units. The Director may approve a modified construction
schedule if this timing requirement will create unreasonable delays in the issuance of certificates
of occupancy for Market-Rate Units and if the Developer provides satisfactory assurance , as
approved by the Director, that the Affordable Units will be completed prior to completion of all
of the Market-Rate Units. Each Affordable Unit shall be inspected by the City prior to occupancy
to determine that it meets the construction and other standards required by this Agreement.
Section 4 .3. Appearance, Size and Bedroom Count of Affordable Units.
(a) Appearance and Maintenance of Affordable Units. The Affordable Units
in the Project shall be comparable to Market-Rate Units in terms of unit type, number of
bedrooms per unit, quality of exterior appearance, and overall quality of construction .
OAK #4822-10 37-906 1 v i JO
Affordable Unit sizes should be generally representative of the unit sizes of the Market-Rate
Units, and the Affordable Units shall be dispersed throughout the Project, in accordance with
Table 2 on Attachment 2. Interior features and finishes of Affordable Units shall be durable, of
good quality, and consistent with contemporary standards for new housing. Developer shall
allocate and assign parking spaces, bicycle storage, storage lockers, and other spaces reserved for
use by individual units to the Affordable Units on the same basis as for the Market-Rate Units,
and Tenants of the Affordable Units shall have equal access to the Project's common areas as is
given to the residents of the Market-Rate Units, but any fee charged for use of common areas or
for spaces reserved for individual units shall be included in the Tenant's Rent, as defined in
Section 1.1 (hh). Once completed, the Affordable Units shall not be kept vacant or used for any
purpose except for residential use and, if vacant, shall be marketed concurrently with the Market-
Rate Units and offered for rent to Eligible Households at Affordable Rents.
(b) Location and Characteristics of Affordable Units. Developer shall provide
Affordable Units in the Project in accordance with the schedule shown in on Table 2 on
Attachment 2. As provided in Table 2 on Attachment 2, the Affordable Units have a bedroom
mix equivalent to the bedroom mix of the Market-Rate Units, except that the Developer may
elect to provide the Affordable Units with more bedrooms.
(c) Location of Affordable Units . Prior to issuance of a building permit for
the Project, Developer shall submit to the Director the proposed location of the Affordable Units,
for the Director's reasonable approval consistent with Table 2 on Attachment 2 .
ARTICLE 5.
PROJECT RENT REGULATORY PROVISIONS
Section 5.1. Effect of Article 5. The terms and conditions of this Article 5 shall apply
upon Developer's application for, and City's issuance of, a demolition permit to demolish all or
part of the Existing Residential Development in connection with the Project, upon which time
the terms and conditions of Article 2 shall be of no further force and effect.
Section 5.2. Term; Expiration of Term. The "Term" of this Agreement is the period in
which each Affordable Unit shall be rented to Very Low and Low Income Households. For all
Affordable Units, the Term shall be that period of time that is the later of (i) fifty five (55) years
from the issuance of the final certificate of occupancy for the Project or (ii) the date the Project
buildings are either (1) demolished or (2) converted to a non-residential use by the Developer
with any City-issued approvals and permits that may be required.
Section 5.3 . Affordability and Occupancy Covenants .
(a) Occupancy Requirements. Subject to the provisions of subsection (e) of
this Section, the Affordable Units shall be rented to and occupied by Tenants meeting the
following income requirements:
(1) Very Low Income Units. Eighteen (18) of the Affordable Units
shall be rented at Affordable Rent to Very Low Income Households.
OAK#4 822 -1037-9061 v i 11
(2) Low Income Units. Twenty three (23) of the Affordable Units
shall be rented at Affordable Rent to Low Income Households.
(3) Moderate Income Units. Thirty (30) of the Affordable Units shall
be rented at Affordable Rent to Moderate Income Households.
(4) The Affordable Units shall not be kept vacant or used for any
purpose except for residential use and shall be offered for rent to Eligible Households at
Affordable Rents.
(b) Allowable Rent. Subject to the provisions of subsection (e) of this Section
below, the maximum Rent charged to Tenants of the Affordable Units shall not exceed
Affordable Rent.
(c) City Approval of Rents. Initial Rents for all Affordable Units shall be
approved by the City prior to occupancy, which approval shall be in accordance with Affordable
Rent as defined in Section 1.1 (a) above. The City shall review 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 other than Affordable
Rent to Tenants of the Affordable Units for all of the components of Rent defined in Section
1.1 (hh) above.
(d) Schedule of Affordable Rents. The City has provided the Developer with
a schedule of Affordable Rents for the Affordable Units in effect on the date of this Agreement,
set forth in attached Attachment 3 . The City annually determines Affordable Rents (including
utility allowances) based on changes in Area Median Income and utility allowances , and
Developer shall annually obtain a copy of the schedule from the Director.
( e) Increased Income of Tenants.
(1) Increase from Very Low Income to Low Income . If, upon annual
recertification of a Tenant 's Household Income, the Developer determines that a former Very
Low Income Household's income has increased and exceeds the qualifying income for a Very
Low Income Household, but does not exceed the qualifying limit for a Low Income Household,
then, upon expiration of the Tenant's lease and after sixty (60) days written notice to the Tenant,
the Tenant's Rent may be increased to Affordable Rent for Low Income Households. The
Developer shall rent the next available Affordable Unit to a Very Low Income Household at a
Rent not exceeding Affordable Rent for Very Low Income Households.
(2) Increase from Very Low or Low Income to Moderate Income . If,
upon annual recertification of a Tenant's Household Income, the Developer determines that a
former Very Low or Low Income Household's income has increased and exceeds the qualifying
income for a Low Income Household, but does not exceed the qualifying limit for a Moderate
Income Household, then, upon expiration of the Tenant's lease and after sixty (60) days written
notice to the Tenant, the Tenant's Rent may be increased to Affordable Rent for Moderate
Income Households . The Developer shall rent the next available Affordable Unit to a Very Low
or Low Income Household, as applicable, at a Rent not exceeding Affordable Rent for Very Low
or Low Income Households, as applicable .
0 AK #4822-1037-90 6 1 v i 12
(3) Increase above Moderate Income . If, upon recertification of a
Tenant's Household Income, the Developer determines that the Tenant's Household Income has
increased and exceeds the qualifying income for a Moderate Income Household, then the Tenant
shall be given written notice that Tenant shall vacate the Affordable Unit three (3) months from
the date of the notice or upon expiration of the Tenant's lease, whichever is later. A three (3)
month extension may be granted by the Director in cases of extreme hardship . If, prior to the
date by which the Tenant must vacate the Affordable Unit, another unit in the Project is vacated
which is not designated as an Affordable Unit and is of appropriate bedroom size, the Developer
may, at the Developer 's option, request the Director, pursuant to Section 6.7 below, to approve a
change in the location of the Affordable Unit; allow the Tenant to remain in the original unit at
market rent; and designate the newly vacated unit as an Affordable Unit if approved by the
Director.
Section 5.4 . Marketing; Right of First Refusal to Return to Project.
(a) Required City Approvals. At least s ixty (60) days before any Affordable
Units in the Project receive a final inspection or certificate of occupancy, the Developer shall
notify City of the availability of the Affordable Units and certify in writing to the City its intent
to manage the Affordable Units consistent with the Policy and Procedures Manual; the proposed
form of Tenant Lease to confirm conformance with the provisions of Section 6.4 below ; and
proposed Affordable Rents for the Affordable Units, all for City review and approval. The
Affordable Units shall be marketed concurrently with the marketing of the Market-Rate Units.
(b) Tenants of Original Affordable Housing Prior to Construction. When
each Affordable Unit at the Project is first made available for rent, the City shall provide an
Affordable Unit Tenant with written notice of its one-time right to rent the Affordable Unit, as
provided in and subject to the conditions in Section 3 .5 above.
ARTICLE 6.
GENERALLY APPLICABLE RENT REGULATORY PROVISIONS
Section 6 .1. Effect of Article 6. The terms and conditions of this Article 6 shall apply
as of the Effective Date and continue through the later of the Original Term or the Term,
regardless of whether Article 2 or Article 5 is in effect.
Section 6 .2. Agreement to Limitation on Rents . The Developer hereby covenants that
the City's agreements to modify the Original Declaration and to enter into a Development
Agreement for the Project are forms of assistance specified in Chapter 4 .3 (commencing with
Section 65915) of Division 1 of Title 7 of the Government Code. The Developer further
covenants that it has agreed to limit Rents in the Affordable Units in consideration for the City's
agreements to modify the Original Declaration and to enter into a Development Agreement for
the Project under Civil Code Sections 1954 .52(b) and 1954.53(a)(2). The Developer hereby
agrees that any Affordable Units provided pursuant to this Agreement are not subject to Civil
Code Section 1954 .52(a) or any other provision of the Costa-Hawkins Act inconsistent with
control s on rents , and further agrees that any limitations on Rents imposed on th e Affordable
Units are in conformance with the Costa-Hawkins Act.
OAK #4822-I 037-9 06 I v I 13
Section 6.3. Notice to Developer. Developer further acknowledges and agrees that the
City, in its review of the Project and the Development Agreement, provided adequate and proper
notice pursuant to Government Code Section 66020 of Developer's right to protest any
requirements for fees, dedications, reservations, and other exactions as may be included in this
Agreement, that no protest in compliance with Section 66020 was made within ninety (90) days
of the date that notice was given, and that the period has expired in which Developer may protest
any and all fees, dedications, reservations, and other exactions as may be included in this
Agreement.
Section 6.4. Lease Provisions. The Developer shall use a form of Tenant lease (the
"Tenant Lease") approved by the City for the Affordable Units. The City shall either approve or
specify its basis for disapproval, if any, within thirty (30) days after Developer submits such
proposed form lease to City. The Tenant Lease shall, among other matters:
(a) provide for termination of the lease for failure: (I) to provide any
information required under this Agreement or reasonably requested by the Developer to establish
or recertify the Tenant's qualification, or the qualification of the Tenant's household, as an
Eligible Household in accordance with this Agreement, or (2) to qualify as an Eligible
Household as a result of any material misrepresentation made by such Tenant with respect to the
Household Income computation or certification;
(b) provide that the Rent may not be raised more often than once every twelve
(12) months . The Developer will provide each Tenant with at least sixty (60) days written notice
of any increase in Rent applicable to such Tenant;
(c) prohibit subleasing of the Affordable Unit or any portion of the Affordable
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 termination of the tenancy only for an increase in Tenant's
Household Income above qualifying income for Low Income Households or for good cause,
including violation of the terms and conditions of the Tenant Lease, 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;
(f) be for an initial term of one year; and
(g) otherwise conform to the Policy and Procedures Manual.
Section 6.5. Income Certification and Reporting.
(a) Section 8 Vouchers and Certificate Holders . The Developer will review
applications from prospective tenants of Affordable Units, on the same basis as all other
prospective tenants, from persons 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. The Developer shall not apply selection criteria to Section 8 certificate or
OAK #4822-1037-9061 v i 14
voucher holders that are more burdensome than criteria applied to all other prospective tenants
for the Affordable Units, nor shall the Developer apply or permit the application of management
policies or lease provisions with respect to the Project which have the effect of precluding
occupancy of Affordable Units by such prospective tenants.
(b) Income Certification.
(1) Prior to Developer's entering into a lease with a prospective tenant
of an Affordable Unit, the prospective tenant household shall be certified by the City or its
assignee as an Eligible Household. Developer may rely upon such certification by City without
being required to independently verify such certification.
(2) Annually thereafter, the Developer will obtain, complete and
maintain on file Household Income certifications for each Tenant renting any of the Affordable
Units. Developer shall make a good faith effort to verify that the Household Income statement
provided by a 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 a minimum of the three (3) most cun-ent pay stubs; (b) obtaining an income tax return
for the most recent tax year ; (c) conducting a credit agency or similar search ; (d) obtaining the
three (3) most current savings and checking account bank statements; (e) obtaining an income
verification form from a cun-ent 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 . Copies of annual Tenant Household Income certifications shall be provided to the
City or it s ass ignee for review.
(3) As an alternative to the procedure described in subparagraph (2) of
this subsection (b), Developer may contract with a provider approved by the City to certify
Tenant Household Incomes on an annual basis.
(c) Reports to City.
(1) Annual Report. The Developer shall submit to the City on April
1st of each year a report, in a form prescribed by or otherwise acceptable to the City, verifying
compliance by Developer with the terms of this Agreement and certified as co1Tect by the
Developer. The annual report shall include without limitation: Household Income for all Tenants
of Affordable Units at the time of initial occupancy and at recertification; number of persons in
each Affordable Unit; amount of Rent charged; other information reasonably required by the
City.
(2) Other Reports. Within fifteen (15) days after receipt of a written
request, Developer shall provide any other information or completed forms reasonably requested
by the City to ensure compliance with this Agreement.
Section 6.6. Management of Property and Property Maintenance.
OA K #4822-10 37-906 1 v i 15
(a) Management Responsibilities . Except for the City's initial certification of
a Tenant as an Eligible Household, the Developer is responsible for all management functions
with respect to the Project, including, without limitation, the annual recertification of household
size and Household Income (subject to review by the City or its assignee), selection of Tenants,
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 Project.
(b) Property Maintenance. The City places prime importance on quality
maintenance to ensure that all developments within the City which include affordable housing
units are not allowed to deteriorate due to below-average maintenance. Developer shall provide
the Affordable Units with the same level and quality of maintenance, including performance of
repairs and periodic replacement of fixtures as the Market-Rate Units. The Developer agrees to
maintain all interior and exterior improvements, including landscaping, on the Property in good
condition and repair (and, as to landscaping, in a healthy condition) and 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.
(c) Taxes and Assessments. Developer shall pay all real and personal
property taxes, assessments, if any, and charges and all franchise, income, employment, old age
benefit , withholding , sales, and other taxes assessed against it, or payable by it, at such times and
in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to
the Property; provided, however, that 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 immediately pay or discharge any decision or judgment rendered against it, together with
all costs, charges and interest.
Section 6.7. Change in Location of Affordable Units. If, after recordation of this
Agreement, Developer desires to change the location of any Affordable Unit within the Property,
Developer shall submit a written request for such change to the Director, who may approve such
request provided that any relocated Affordable Units shall be comparable to those listed in
Attachment 2 and shall contain the same number of bedrooms.
Section 6.8. Notice of Expiration of Term. Prior to the expiration of the Term (or the
Original Term, if Article 2 remains in effect), Developer shall provide all notifications required
by Government Code Sections 65863.10 and 65863.11 or successor provisions and any other
notification required by any state, federal, or local law. In addition, at least six (6) months prior
to the expiration of the Term for an Affordable Unit, the Developer shall provide a notice by
first-class mail, postage prepaid, to all Tenants in the Affordable Units whose Term is expiring.
The notice shall contain (a) the anticipated date of the expiration of the 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 the issue
and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any
such hearing. The Developer shall file a copy of the above-described notice with the City
Manager.
OAK #4 822-103 7-9061 v i 16
ARTICLE 7.
ENFORCEMENT
Section 7 .1. 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 terminated in accordance with Sections
2.2 or 5.2. 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 Affordable 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
land use requirement and a requirement of the Development Agreement, and that no event of
foreclosure or trustee's sale may remove these requirements from the Property.
Section 7 .2 . No Subordination; Notice to Mortgagees. In no event shall this
Agreement be subordinated to, or recorded subordinate to, a mortgage, deed of trust, or other
method of security encumbering the Property, other than current unpaid taxes. If City receives a
notice from a Mortgagee requesting a copy of any notice of default given Developer hereunder
and specifying the address for service thereof, then City agrees to use its diligent, good faith
efforts to deliver to such Mortgagee, concurrently with service thereon to Developer, any notice
of default given to Developer. Each Mortgagee shall have the right during the same period
available to Developer to cure or remedy, or to commence to cure or remedy, the event of default
claimed or the areas of noncompliance set forth in City's notice of default. If a Mortgagee is
required to obtain possession in order to cure any default, the time to cure shall be tolled so long
as the Mortgagee is attempting to obtain possession, including by appointment of a receiver or
foreclosure, but in no event may this period exceed 120 days from the date the City delivers the
notice of default to Developer.
Section 7 .3. Release of Property from Agreement. Upon the expiration of the Term for
all Affordable Units, Original Affordable Units, and Relocated Affordable Units, City shall
execute and record a release of the Project, the Property, and each unit in the Project from the
burdens of this Agreement within thirty (30) days following written notice from the Developer, if
at the time the Developer is in compliance with all terms of this Agreement, including without
limitation the provisions of Section 6.8 regarding notice of the expiration of the Term .
Section 7.4 . Default. Failure of the Developer to satisfy any of Developer's
obligations under the terms of this Agreement within thirty (30) days after the delivery of a
notice of default from the City, or, if the default cannot be cured within thirty (30) days, failure
of the Developer to commence to cure within thirty (30) days and to thereafter diligently pursue
such cure and complete such cure within ninety (90) days, will constitute a default under this
Agreement and a default under the Development Agreement. The Parties agree to meet and
confer during the cure period in a good faith effort to resolve any dispute regarding the asserted
O A K #4822-I 0 37-906 I v I 17
default or the cure thereof. In addition to remedies for breach of this Agreement, the City may
exercise any and all remedies available to it, including but not limited to:
(a) withholding , conditioning, suspending or revoking any permit, license,
subdivision approval or map, or other entitlement for the Project, including without limitation
final inspections for occupancy and/or certificates of occupancy;
(b) instituting against the Developer, or other parties, a civil action for
declaratory relief, injunction or any other equitable relief, or relief at law, including without
limitation an action to rescind a transaction and/or to require repayment of any funds received in
connection with such a violation;
(c) where one or more persons have received financial benefit as a result of
violation of this Agreement, the City may assess, and institute legal action to recover as
necessary, a penalty in any amount up to and including the amount of financial benefit received,
in addition to recovery of the benefit received;
(d) requiring the Developer or his/her successors in interest to the Property to
pay the City Rent or any other payment received by the Developer for the Affordable Unit from
the date of any unauthorized use of the Affordable Unit or in excess of Affordable Rent; and
(e) any other means authorized under the City of Cupertino Municipal Code
or any other federal or state statute.
Section 7.5 . Remedies Cumulative. No right, power, or remedy given to the City by
the terms of this Agreement is intended to be exclusive of any other right, power, or remedy; and
each and every such right, power, or remedy shall be cumulative and in addition to every other
right, power, or remedy given to the City by the terms of this Agreement or by any statute or
ordinance or otherwise against Developer and any other person. Neither the failure nor any
delay on the part of the City to exercise any such rights and remedies shall operate as a wa i ver
thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude
any other or further exercise of such right or remedy, or any other right or remedy .
Section 7.6. Force Majeure. In addition to specific provisions of this Agreement,
performance by either Party shall not be deemed to be in Default where delays or defaults are
due to causes beyond the Parties' reasonable control, including but not limited to acts of God or
of the public enemy, fires, floods, earthquakes, te1rnrism, and strikes, and unusually severe
weather . An extension of time for any cause will be deemed granted if notice by the Party
claiming such extension is sent to the other within ten (I 0) days from the commencement of the
cause and such extension of time is not rejected in writing by the other Party within ten (I 0) days
of receipt of the notice. In no event shall the City be required to agree to cumulative delays in
excess of one hundred eighty (180) days.
OA K #4822-10 37 -9 0 6 1 v i 18
ARTICLE 8.
GENERAL PROVISIONS
Section 8.1. Appointment of Other Agencies. At its sole discretion, the City may
designate, appoint or contract with any other public agency, for-profit or non-profit organization
to perform some or all of the City's obligations under this Agreement.
Section 8.2. Records. Developer shall retain all records related to compliance with
obligations under this Agreement for a period not less than five (5) years from the date of
origination of such records, and make them available to City employees or others designated by
the City for inspection and copying on five (5) business days' written notice . The City shall be
entitled to monitor compliance with this Agreement, and Developer shall cooperate with City
monitoring, including obtaining Rent and Household Income verification upon request of the
City.
Section 8.3. Monitoring Fee. Developer agrees to pay an annual monitoring fee as
may be adopted by resolution of the City Council which is in force and effect for a similar class
of affordable units .
Section 8.4. Nondiscrimination. All of the Affordable Units shall be available for
occupancy to members of the general public. Except as provided in this Agreement, the
Developer shall not give preference to any particular class or group of persons in renting or
selling the Affordable Units, except to the extent that the Affordable Units are required to be
rented and sold to Eligible Households and as required by this Agreement; provided, however,
there shall be no discrimination against or segregation of any person or group of persons, on
account of any bases prohibited by the Fair Housing Act and Fair Employment and Housing Act
in the leasing, transferring, use, occupancy, tenure, or enjoyment of any unit in the Project, nor
shall the Developer or any person claiming under or through the Developer, establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use, or occupancy of any unit or in connection with the employment of persons
for the construction, operation and management of the Project.
Section 8 .5 . Hold Harmless. Developer will indemnify and hold harmless (without
limit as to amount) City and its elected officials, officers, employees and agents in their official
capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and
against all loss, all risk of loss and all damage (including expense) sustained or incurred because
of or by reason of any and all claims, demands, suits, actions, judgments and executions for
damages of any and every kind and by whomever and whenever made or obtained, allegedly
caused by, arising out of or relating in any manner to development or operation of the Project,
the Affordable Units, or Developer's performance or non-performance under this Agreement,
and shall protect and defend Indemnitees, and any of them with respect thereto, except to the
extent arising from the negligence or willful misconduct of the lndemnitees. The provisions of
this Section shall survive expiration or other termination of this Agreement or any release of part
or all of the Property from the burdens of this Agreement, and the provisions of this Section shall
remain in full force and effect.
OAK #482 2-10 37-9061 v I 19
Section 8.6. Notices. All notices required pursuant to this Agreement shall be in writing
and may be given by personal delivery or by registered or certified mail, return receipt requested,
to the Party to receive such notice at the addressed set forth below:
TO THE CITY:
City of Cupe1iino
Office of City Attorney
20410 Town Center Lane, Ste. 210
Cupertino, CA 95014
TO THE DEVELOPER:
Carlene Matchniff
IAC at Cupertino LLC
890 North McCarthy Boulevard, #100
Milpitas, CA 95035
WITH A COPY TO:
Jennifer L. Hernandez
Holland & Knight LLP
50 California Street, Suite 2800
San Francisco, CA 941111
Any Party may change the address to which notices are to be sent by notifying the other Parties
of the new address, in the manner set forth above.
Section 8.7. Integrated Agreement; Relationship to Other Related Agreements and
Documents. This Agreement constitutes the entire Agreement between the Parties and no
modification hereof shall be binding unless reduced to writing and signed by the Parties hereto.
The parties acknowledge that this Agreement was negotiated and entered concurrently with the
Development Agreement and the Relocation Agreement. The Parties hereby agree that in the event
of a direct conflict between this Agreement and either of those, this Agreement shall control. In
addition, in the event of any direct conflict between a material term of this Agreement (including
but not limited to, the Term of this Agreement) and the terms of the Policy and Procedures Manual,
this Agreement shall control.
Section 8.8. 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.
Section 8.9. Amendment of Agreement; Approvals and Consents.
OAK #4822-1037-9061 vi 20
(a) Amendments to this Agreement shall be subject to the review and
approval of the City Council. No amendment may be approved that is inconsistent with State
law, the Cupertino Municipal Code, the Development Agreement, or the Policy and Procedure
Manual. Upon approval, a restated Agreement or amendments to this Agreement, as appropriate,
shall be executed and recorded.
(b) The City has authorized the City Manager to execute this Agreement and
has authorized the Director to deliver such approvals or consents as are required by this
Agreement. Any consents or approvals required under this Agreement shall not be unreasonably
withheld or made, unless it is specifically provided that a sole discretion standard applies.
Section 8.10 . No Claims. Nothing contained in this Agreement shall create or justify
any claim against the City by any person that Developer may have employed or with whom
Developer may have contracted relative to the purchase of materials, supplies or equipment, or
the furnishing or the performance of any work or services with respect to the Property or the
construction of the Project or construction of the Affordable Units.
Section 8.11 . Applicable Law. This Agreement shall be governed by California law.
Venue s hall be the County of Santa Clara.
Section 8.12 . Waivers . Any waiver by the City of any obligation or condition in this
Agreement must be 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 allowed 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 omi s sion by Developer shall
not be construed to be a consent to any other or subsequent act or omission or to waive the
requirement for the City's written consent to future waivers.
Section 8 .13. Title of Parts and Sections. Any titles of the sections, subsections, or
subparagraphs of this Agreement are inserted for convenience of reference only and shall be
disregarded in interpreting any part of the Agreement's provisions .
Section 8.14. Multiple Originals; Counterpart. This Agreement may be executed in
multiple originals, each of which is deemed to be an original , and may be signed in counterparts .
Section 8.15. Recording of Agreement. This Agreement shall be recorded against the
Property in the Official Records of the County of Santa Clara prior to the recordation of any
parcel map or final subdivision map or issuance of any building permit for the Project, whichever
occurs first.
Section 8.16. Estoppel Certificate. Developer or its lender may, at any time, and from
time to time, deliver written notice to the City requesting the City to certify in writing that, to the
knowledge of the City (a) this Agreement is in full force and effect and is a binding obligation of
the Parties, (b) this Agreement has not been amended or modified or, if so amended or modified,
identifying the amendments or modifications, and (c) Developer is not in Default in the
performance of its obligations under this Agreement, or if in Default, to describe the nature of
any Defaults . Developer and City acknowledge that a certificate hereunder m a y be relied upon
OAK #4822-1037-906 1 v i 21
by the Developer and Mortgagees. The Developer may request the estoppel certificate to be in a
recordable form and may record such certificate in the Official Records of Santa Clara County at
its sole cost and expense. The City Manager shall be authorized to execute any certificate
requested by Developer in a form reasonably approved by the City Attorney. The Developer
shall · pay all costs borne by City in connection with its review of any proposed estoppel
certificate.
Section 8.17. Severability. In the event any limitation, condition, restriction, covenant,
or provision contained in this Agreement is to be held invalid, void or unenforceable by any
court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless be
and remain in full force and effect.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first above written.
DEVELOPER: CITY:
IAC AT CUPERTINO, LLC, a Delaware
limited liability company
CITY OF CUPERTINO, a municipal
By ~~ By
Its: ~&;er~ Its :
-~
By:
~-PrN J) O L() t-\ .$1 ~ v £;:NS Orv \-\(} ''-\
u.::N A-i,O a.J0 b
OAK#4822 -1037-9061 v i 22
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 \~,,,,17~ C(!Jl,, tA...
)
)
)
On J lkl'{ 25'1 7,Dl/:J ' before me, _Adn.-e-r111<-Ytt-s,e ~ffel , Notary Public ,
personally appeared CM l~n-e.. /v?At~h nif/--, who proved to me on the
basis of satisfactory evidence to be the person~ whose name~ is /a.i:(,...subscribed to the within
instrument and acknowledged to me that .b.e/she /.t.Aey executed the same in -1::l+s /her/t,l:tetr
authorized capacity(.iQe}, and that by l:+i6/her/t4e+r signature4s} on the instrument the perso$1,
or the entity upon behalf of which the person{s,racted, executed the instrument.
I cert ify UNDER PENAL TY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
OAK #4822-1037-906 1 v I Acknowle d g m e nt
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 3a. nm, Cw.,~
On ~t" '.1 r ZOlto , before ~-'--;---c---------' Notary Public,
personafyppeared I , who proved to me on the
basis of satisfactory evidence to be th ers (s) whose ~s) ~re subscribed to the within
instrument ~nowledged to me at@/she /they executed the same in ~er/their
authorized apa · ies), and that by@fher/their ~) on the instrument the ~s),
or the entity upon behalf of which th ~(s) actect'exec uted the instrument.
I certify UNDER PENAL TY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
OAK #4822-10 37-906 1 v i Acknowle d g ment
ATTACHMENT 1
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Cupertino, County of Santa Clara , State of California, described as
follows:
PARCEL A:
ALL OF PARCEL 1 AS SHOWN ON THAT CERTAIN PARCEL MAP FILED FOR
RECORD ON SEPTEMBER 7, 1973 IN BOOK 329 OF MAPS, AT PAGE 49, RECORDS OF
SANT A CLARA COUNTY.
EXCEPTING THEREFROM THAT PORTION THEREOF DEDICATED AND CONVEYED
TO THE CITY OF CUPERTINO, BY DEED RECORDED MAY 7, 1975 IN BOOK B397,
PAGE 613, OFFICIAL RECORDS, DESCRIBED AS FOLLOWS :
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF PRUNERIDGE
AVENUE WITH THE CENTERLINE OF WOLFE ROAD AS SHOWN ON THAT CERTAIN
PARCEL MAP RECORDED IN BOOK 329 OF MAPS AT PAGE 49, SANTA CLARA
COUNTY RECORDS; THENCE LEA YING SAID CENTERLINE OF SAID A VENUE,
ALONG SAID CENTERLINE OF SAID ROAD, S. 0 ° 35 ' 45" W., 432.35 FEET; THENCE
LEAVING SAID CENTERLINE OF SAID ROAD, S. 89 ° 24' 15" E., 54.00 FEET TO THE
TRUE POINT OF BEGINNING, BEING ALSO A POINT IN THE EASTERLY LINE OF
WOLFE ROAD AS SHOWN ON SAID MAP; THENCE ALONG SAID EASTERLY LINEN .
0 ° 35' 45" E., 326.33 FEET ; THENCE LEA YING SAID EASTERLY LINE ALONG A
TANGENT CURVE TO THE RIGHT, HAVING A RADIUS OF 60.00 FEET, THROUGH A
CENTRAL ANGLE OF 63 ° 15' 31 ", AN ARC LENGTH OF 66.24 FEET; THENCE IN A
SOUTHERLY DIRECTION ALONG A NON-TANGENT CURVE TO THE LEFT, HAVING
A RADIUS OF 40.00 FEET, CONCA VE TO THE SOUTHWEST, WHOSE CENTER BEARS
S. 26 ° 08' 44" E ., THROUGH A CENTRAL ANGLE OF 63 ° 15' 31 ", AN ARC LENGTH OF
44 .16 FEET TO A PO INT THAT IS PARALLEL WITH AND 11.00 FEET EASTERLY
MEASURED AT RIGHT ANGLES FROM SAID EASTERLY LINE; THENCE ALONG SAID
PARALLEL LINES. 0 ° 35' 45" W., 276 .81 FEET; THENCE ALONG A TANGENT CURVE
TO THE RIGHT, HA YING A RADIUS OF 100.00 FEET THROUGH A CENTRAL ANGLE
OF 15 ° 00' 00", AN ARC LENGTH OF 26.18 FEET; THENCE S. 15° 35' 45" W., 16.17 FEET;
THENCE ALONG A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 100 .00
FEET, THROUGH A CENTRAL ANGLE OF 15° 00 ' 00", AN ARC LENGTH OF 26 .18 FEET
TO THE TRUE POINT OF BEGINNING.
ALSO EXCEPTING THEREFROM THAT PORTION THEREOF GRANTED AND
CONVEYED TO THE CITY OF CUPERTINO, A CALIFORNIA MUNICIPAL
CORPORATION, LYING WITHIN AREA 1 AS SHOWN ON EXHIBIT "B" AND MORE
PARTICULARLY DESCRIBED ON EXHIBIT "A" OF THAT CERTAIN GRANT DEED
RECORDED NOVEMBER 4, 2014 AS INSTRUMENT NO. 22760862 OF OFFICIAL
RECORDS.
OAK #4822-10 37-906 1 v i Attachment 1-1
EXCEPTING THEREFROM ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS ,
NATURAL GAS RIGHTS, AND OTHER HYDROCARBONS BY WHATSOEVER NAME
KNOWN, GEOTHERMAL STEAM, ANY OTHER MATERIAL RESOURCES AND ALL
PRODUCTS DERIVED FROM ANY OF THE FOREGOING, THAT MAY BE WITHIN OR
UNDER THE LAND, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING ,
MINING, EXPLORING AND OPERATING THEREFOR AND STORING IN AND
REMOVING THE SAME FROM THE LAND OR ANY OTHER PROPERTY, INCLUDING
THE RIGHT TO WHIPS TOCK OR DIRECTIONALLY DRILL AND MINE FROM
PROPERTIES OTHER THAN THOSE CONVEYED HEREBY , OIL OR GAS WELLS ,
TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF THE
LAND, AND TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED
WELLS , TUNNELS AND SHAFTS UNDER AND BENEATH OR BEYOND THE
EXTERIOR LIMITS THEREOF, AND TO REDRILL, RETUNNEL, EQUIP, MAINTAIN,
REPAIR , DEEPEN AND OPERATE ANY SUCH WELLS OR MINES ; WITHOUT,
HOWEVER, THE RIGHT TO DRILL, MINE, STORE, EXPLORE AND ,OPERATE
THROUGH THE SURFACE OR THE UPPER 500 FEET OF THE SUBSURFACE OF THE
LAND AS RESERVED IN THE DOCUMENT RECORDED MARCH 27, 2013 , AS
INSTRUMENT NO . 22148706 OF OFFICIAL RECORDS.
PARCELB:
PARCEL TWO AS SHOWN ON EXHIBIT "A " AND MORE PARTICULARLY DESCRIBED
ON EXHIBIT "C" ATTACHED TO LOT LINE ADJUSTMENT ATTACHED AS EXHIBIT
"B" TO LOT LINE ADJUSTMENT GRANT DEED, RECORDED NOVEMBER 4, 2014 AS
INSTRUMENT NO. 22760859 OF OFFICIAL RECORDS.
EXCEPTING THEREFROM THAT PORTION THEREOF GRANTED AND CONVEYED TO
THE CITY OF CUPERTINO, A CALIFORNIA MUNICIPAL CORPORATION, LYING
WITHIN AREA 1 AND 2 AS SHOWN ON EXHIBIT "B" AND MORE PARTICULARLY
DESCRIBED ON EXHIBIT "A" OF THAT CERTAIN GRANT DEED RECORDED
NOVEMBER 4, 2014 AS INSTRUMENT NO. 22760862 OF OFFICIAL RECORDS .
ALSO EXCEPTING THEREFROM ALL OIL, OIL RIGHTS, MINERALS, MINERAL
RIGHTS , NATURAL GAS RIGHTS, AND OTHER HYDROCARBONS BY WHATSOEVER
NAME KNOWN, GEOTHERMAL STEAM , ANY OTHER MATERIAL RESOURCES AND
ALL PRODUCTS DERIVED FROM ANY OF THE FOREGOING, THAT MAY BE WITHIN
OR UNDER THE LAND, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING,
MINING, EXPLORING AND OPERATING THEREFOR AND STORING IN AND
REMOVING THE SAME FROM THE LAND OR ANY OTHER PROPERTY, INCLUDING
THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM
PROPERTIES OTHER THAN THOSE CONVEYED HEREBY, OIL OR GAS WELLS,
TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF THE
LAND , AND TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED
WELLS , TUNNELS AND SHAFTS UNDER AND BENEATH OR BEYOND THE
EXTERIOR LIMITS THEREOF, AND TO REDRILL, RETUNNEL, EQUIP, MAINTAIN,
REPAIR , DEEPEN AND OPERATE ANY SUCH WELLS OR MINES; WITHOUT,
OAK#4822-1037-906 1 v i Attac hment 1-2
HOWEVER , THE RIGHT TO DRILL, MINE , STORE, EXPLORE AND OPERATE
THROUGH THE SURFACE OR THE UPPER 500 FEET OF THE SUBSURFACE OF THE
LAND AS RESERVED IN THE DOCUMENT RECORDED MARCH 27, 2013, AS
INSTRUMENT NO. 22148706 OF OFFICIAL RECORDS.
OA K #4822-1037 -90 61 v i Attachment 1-3
Number of
Bedrooms
One
Two
Three
TOTALS:
ATTACHMENT 2
SCHEDULE OF AFFORDABLE UNITS
Table 1 :Original Affordable Units Pursuant to Article 2
Very Low Income Low Income
7 6
9 *[7] 8 *(10]
2 *[3] 2 *[]]
18 *[17] 16 *[17]
'!I. Affordable Unit Tenants as of the date of this Agreement].
Table 2: New Affordable Units Pursuant to Article 4 and Article 5
Very Low Low Income Moderate Income to to Replace Low Income Income for Number of Replace for New
Bedrooms Original Original Affordable New
Affordable Affordable Affordable Units Units Units Units
Studio --1 8
One 5 4 4 14
Two 13 12 2 8
TOTALS: 18 16 7 30
OAK#4822-1037-906I v i Attachment 2
Totals
13
17
4
34
Totals
9
27
35
71
ATTACHMENT 3
MAXIMUM INITIAL AFFORDABLE RENTS FOR AFFORDABLE UNITS AND
MAXIMUM INCOME LEVEL OF TENANTS
(Provided for reference. These limits are adjusted annually, as determined and published
by the City. Project shall be subject to the Affordable Rents and Household Income limits
in effect at the time Developer submits marketing plan to City.)
A. Affordable Rents.
Affordable Rent is defined in Section 1.1 of this Agreement. The table below illustrates how
Affordable Rent is calculated, based upon 2016 State Income Limits adopted by the California
Department of Housing and Community Development and contained in California Code of
Regulations, Title 25, Section 6932.
Number of AMI* for Percent of Maximum Maximum Monthly
Bedrooms Assumed AMI Annual Rent Affordable Rent**
Household (1/12 of Maximum
Size Annual Rent)
50 $11,243 $937
Studio $74,950 60 $13,491 $1,124
110 $24,734 $2,062
50 $12,855 $1,072
One $85,700 60 $15,426 $1,286
110 $28,281 $2,357
50 $14,460 $1,205
Two $96,400 60 $17,352 $1,446
110 $31,812 $2,651
* AMI is Area Median Income.
**A reasonable allowance for tenant-paid utilities must be deducted from the Tenant's monthly payments
to the Developer. See definition of Rent in Section 1. 1 for other fees and charges that must be deducted
from the Tenant's monthly payments to the Developer. 2016 utility allowances are available at:
http://www. hacsc. org/assets/1/6/2016_ Utility _Allowances Jar _website_update.pdf
B. Maximum Household Income of Tenants (Income Limits)
Household Size Maximum Gross Annual Household Income
(Number of Persons) Very Low Income Low Income Moderate Income
I $39,100 $59,400 $89,950
2 $44,650 $67,900 $102,800
3 $50,250 $76,400 $115,650
Income limits for larger households available upon request from the City.
OAK #4822-103 7-906 1 v i Attachment 3
VERIFICATION
I have reviewed this Affordable Housing Agreement and Declaration of Restrictive
Covenants, dated August 4, 2016, and to the best of my knowledge, the information
contained herein is true and complete.
I verify under penalty of perjury under the laws of the State of California, that the
foregoing is true and correct.
Executed on the 5 th day of October, 2016 at Cupertino, California
~1112:,~---
Lauren Sapudar
Senior Office Assistant