RES-ORA-0339 Subordination and Estoppel Agreement Relating to Palmyra Senior ApartmentsRESOLUTION NO. ORA-
0339 A RESOLUTION OF THE
ORANGE REDEVELOPMENT AGENCY AUTHORIZING
THE EXECUTION OF A SUBORDINATION
AGREEMENT AND ESTOPPEL AGREEMENT AND
APPROVING OTHER MATTERS RELATING TO
THE REFINANCING OF THE PALMYRA
SENIORS APARTMENTS BY RICHARI) J. HASBROUCK
AND CAROLYN A. HASBROUCK, TRUSTORS OF THE
R.AND C. HASBROUCK REVOCABLE
TRUST WHEREAS, the Orange Redevelopment Agency (the "Agency") adopted
Resolution No. ORA-0074 on June 16, 1987, authorizing the issuance of its Variable
Rate Demand Multifamily Housing Revenue Bonds (Mercury Savings and Loan Association/
Palmyra Seniors Apartments) 1987 Series A (the "Bonds) to finanee the acquisition and construction
of the Palmyra Seniors Apartments (the "Project") to be constructed by Richard J.
Hasbrouck and Carolyn A. Hasbrouck (the "
Hasbroucks"); and WHEREAS, in connection with the issuance of the Bonds, the Agency
executed a Regulatory Agreement and Declaration of Restrictive Covenants, dated as of June 1,
1987, by and among the Agency, the Hasbroucks and Seattle-First National Bank,
as Trustee (the
Regulatory Agreement"); and WHEREAS, the Agency entered into a Disposition and
Development Agreement, dated as of April 23, 1987, with the Hasbroucks and Sunwest Bank, a
California corporation (the DDA"), pursuant to which the Agency secured additional low-
income targeting obligations of the Hasbroucks to the Agency with a Deed of Trust dated as of June 1,
1987, recorded on June 30, 1987, as Document No. 87-372656 among the official records
of the County Recorder of Orange County (the "
Agency Deed of Trust"); and WHEREAS, the DDA, and particularly Section
608 thereof, contemplated that the Agency would subordinate the Agency Deed of Trust to a
lien securing financing or refinancing so long as the appraised value of the Project is equal to or
greater than the proposed financing encumbrance and the amount secured by the
Agency Deed of Trust; and WHEREAS, the appraised value of the Project is
greater than the proposed financing encumbrance and the amount secured by the
Agency Deed of Trust, and WHEREAS, Section 401 of the DDA and Sections I and 4 of
the grant deed from the Agency to the Hasbroucks (the "Grant Deed") contain
provisions requiling the targeting of twenty percent (20%) of the dwelling units within the
Project to "Very-Low Income Senior Tenants" (as therein defined) at rents limited pursuant to Section
401 of the DDA (
WHEREAS, the Hasbroucks refinanced the Project and repaid the Bonds in full in 1996
with a loan from Home Savings of America; and
WHEREAS, the Hasbroucks desire to refinance the Project with a loan from Washington
Mortgage Financial Group, Ltd., a Delaware corporation ("Washington Mortgage") and to
transfer their interest in and to the Project and all documents related thereto to themselves as
trustors ofthe R. and C. Hasbrouck Revocable Trust; and
WHEREAS, Washington Mortgage is requiring as a condition of the new loan that the
Agency Deed of Trust and the DDA Targeting Provisions be subordinated to the lien of
Washington Mortgage; and
WHEREAS, the new loan to be provided by Washington Mortgage is for a principal
amount equivalent to that as to which the Agency subordinated in 1996; and
WHEREAS, the Agency is prepared to provide such subordination; and
NOW, THEREFORE, the Board of Directors of the Orange Redevelopment Agency
resolves as follows:
Section 1. The above recitals, and each of them are true and correct.
Section 2. The Agency finds and determines that an economically feasible alternative
method of financing, refinancing, or assisting the units or parcels on substantially comparable
terms and conditions, but without subordination of the DDA Targeting Provisions and the
Agency Deed of Trust, is not reasonably available, and the Agency has obtained written
commitmc:::nts reasonably designed to protect the Agency's investment in the event of default,
such as a right of the Agency to cure a default on the loan.
Section 3. The Agency hereby authorizes the Executive Director to execute and deliver a
Subordination Agreement and Estoppel Agreement in a form approved by the Agency's General
Counsel and as are consistent with the recitals and findings herein.
Section 4. The Agency hereby consents to the assignment by the Hasbroucks to
themselves as trustors of the R. and C. Hasbrouck Revocable Trust of their interest in the Project
and their obligations under and pursuant to the DDA, the Regulatory Agreement, the Grant Deed
and any arId all other documents and instruments related thereto to which the Hasbroucks and the
Agency are parties. Accordingly, the Agency hereby authorizes the Executive Director to
execute on behalf of the Agency such instruments relating to said assignment as, in his judgment,
are reasonably requested by Washington Mortgage, the Hasbroucks or the trustors of the R. and
C. Hasbrouck Revocable Trust to evidence the Agency's consent to said assignment consistent
with the purposes of this resolution.
ORA-
0339
ADOPTED this 10tih day of February 1998.
ORANGE REDEVELOPMENT AGENCY,
a public body, corporate and politic
i
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k...,---,.....P /,~r!'~ ,-_/I,Qanne Coontz, Chairman /~
I.~ATTEST:a Cassandra
J.
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I hereby certify that
the foregoing Resolution was duly and regularly adopted by the Orange Redevelopment Agency at
a regular meeting thereof held on the 10th day of February , 1998, by the
following vote:AYES: MURPHY, SLATER, COONTZ,
SPURGEON, ALVAREZ NOES: NONE ABSENT: NONE
ABST AIN:
NONE Cp~
fl1vr/-b47'Agency
Clerk (TJRDG ORA-
0339 3