HomeMy WebLinkAbout2007 CON CDC Constellation Property Group - R1 and R2 Project SitesNOTE TO FILE
04-20-10
IN THE MATTER OF: Resolution of the CDC authorizing the
Chairman to execute a Subordination Agreement with
Constellation Property Group (NatCity 12th) for the R1 and
R2 project sites. Please note the following:
A FULLY EXECUTED ORIGINAL AGREEMENT WAS NEVER
FILED WITH THE OFFICE OF THE CITY CLERK
ORIGINATING DEPARTMENT: _ CDC _ Housing & Grants
X City Attorney _ Human Resources
City Manager MIS
_ Community Svcs. _ Planning
Engineering _ Police
_ Finance _ Public Works
Fire
• 03-12-07 — Resolution and agreement on hold at the Office of the City Attorney awaiting
signed agreement
• 06-07-07 — Followed up and it is still on hold at the Office of the City Attorney
• 12-11-07 — Received signed resolution without the agreement
• 01-07-08 — Requested Colby Young with CDC to follow up
NTF
Recording Requested By and
When Recorded Mail To:
UNITED COMMERCIAL BANK
199 South Los Robles, Suite 780
Pasadena, California 91101
Attn: Construction Lending Div. #490U
Loan No. 490 010 647-0 (SPACE ABOVE FOR RECORDER'S USE)
SUBORDINATION AGREEMENT
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE
PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER
OR LATER SECURITY INSTRUMENT.
BY THIS AGREEMENT, made as of this 3rd day of November, 2006, Constellation Property Group (NatCityl2t)
LP, a Delaware limited partnership, owner of the land hereinafter described and hereinafter referred to as "Owner," and
Community Development Commission of the City of National City, herein collectively "Creditor", agree as follows:
1. Creditor is now the sole beneficiary under that certain Deed of Trust that was recorded on October 26, 2005 as
Document No. 2005-0930609 of Official Records of San Diego County, California (the "Junior Deed of Trust"). The
Trustor under said Junior Deed of Trust is the Owner. The said Junior Deed of Trust encumbers the real property
described in Exhibit "A" attached hereto. Creditor has not transferred or assigned its interest in said Junior Deed of
Trust or the underlying obligations secured by such Junior Deed of Trust in whole or in part.
2. United Commercial Bank, a Califomia banking corporation ("Lender") is the beneficiary of a Deed of Trust executed by
Owner covering the real property described in Exhibit "A" hereto. Said Deed of Trust was recorded on October 26,
2005, in the Office of the County Recorder of San Diego County, State of California, as Document No. 2005-0930607,
and is referred to herein as the "Senior Deed of Trust."
3. The Senior Deed of Trust secures a promissory note dated October 13, 2005, executed by Owner, as Maker, to Lender
or its predecessor in interest, as Payee, in the original principal sum of Five Million Two Hundred Thirty Thousand and
No/100 Dollars ($5,230,000.00), the "Senior Note." The Senior Note and Senior Deed of Trust are now being modified.
4. The Senior Loan was modified by the First Modification Agreement dated January 11, 2006 and recorded on January 20,
2006 as instrument no. 2006-0044759 in the official records of San Diego County, California, whereby Senior Lender
agreed to add Land Parcel No. 556-554-20 to the property secured by the first priority Deed of Trust. Exhibit A of
the Deed of Trust is revised to read as specifically described in Exhibit A-1 and A-2 to this Agreement. The
Loan/Deed of Trust was modified by the Second Modification Agreement dated January 17, 2006 and recorded
January 23, 2006 as instrument no. 2006-0048586 in the official records of San Diego County, California, whereby
Senior Lender agreed to add Land Parcels No. 556-554-18 and 556-554-19 to the property secured by the first
priority Deed of Trust. Exhibit A of the Deed of Trust is revised to read as specifically described in Exhibit A-1,
A-2, and A-3 to this Agreement. The Senior Loan is now modified by the Third Modification and/or Extension
Agreement ("Agreement") dated November 3, 2006 whereby Bank agrees to (i) extend the Maturity Date of the
Loan to November 3, 2007 and (ii) increase the Original Principal Balance of the Loan amount by $490,000.00
from $5,230,000.00 to $5,720,000.00, and other matters for Senior Lender.
5. For valuable consideration to Creditor, including the modification of the Senior Note and Deed of Trust, Creditor
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hereby intentionally and unconditionally waives, relinquishes and subordinates to the fullest extent necessary its interest
in the said Junior Deed of Trust and underlying obligation secured by the Junior Deed of Trust in favor of the lien or
charge upon the property of the Senior Deed of Trust. This subordination includes the lien to secure the Senior Note
and any and all other obligations, debts, fees, costs, and advances secured by the Senior Deed of Trust.
6. It is the intention and understanding of the parties hereto that the lien or charge of the Senior Deed of Trust shall be and
remain at all times prior and superior to the Creditor's interest in the Junior Deed of Trust.
7. This agreement shall be the whole and only agreement with regard to the subordination of the Junior Deed of Trust to
the Senior Deed of Trust and shall supersede and cancel, but only insofar as would affect the priority between the Junior
Deed of Trust and the Senior Deed of Trust, any prior agreement as to such subordination including but not limited to,
those provisions, if any, contained in the Junior Deed of Trust which provide for the subordination of the lien or charge
thereof to a deed of trust or deeds of trust or a mortgage or mortgages.
8. Creditor consents to and approves of all provisions of the Senior Note and Senior Deed of Trust and all agreements
modifying the Senior Note and Senior Deed of Trust and agrees that Lender, in making any disbursements pursuant to
any such loan agreements is under no obligation or duty to, nor has Lender represented that it will, see to the application
of such proceeds by the person or persons to whom Lender disburse such proceeds and any application or use of such
proceeds for purposes other than those provided for in such loan agreements shall not defeat the subordination herein
made in whole or in part
9. This agreement shall be executed and acknowledged by both parties and recorded and shall be binding upon and inure to
the benefit of their successors and assigns.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE
PERSON OBLIGATED ON YOUR DEED OF TRUST TO OBTAIN A LOAN A PORTION OF WHICH MAY BE
EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND.
DATED:
2
CREDITOR:
Community Development Commission
of the City of National City
By:
Name:
Its:
BORROWER:
Constellation Property Group (NatCity 12th) LP,
A Delaware limited partnership
By: Constellation Property Management, Inc.
A Delaware Corporation
Its General Partner
By:
Eugene Marchese
Its President
By:
Stephen Scotchmer
Its Secretary
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EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
The land referred to in this Report is situated in the City of National City, County of San Diego, State of California, and
is described as follows:
Parcel A:
P2rce1 1 of Parcel Map No. 10377, in the City of National City, County of San Diego, State of California, filed in the
office of the County Recorder of San Diego County, August 27, 1980.
APN: 556-554-17
Parcel B:
Parcel 2 of Parcel Map No. 10377, in the City of National City, County of San Diego, State of California, filed in the
office of the County Recorder of San Diego County, August 27, 1980.
APN: 556-554-16
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EXHIBIT A-2
LEGAL DESCRIPTION OF PROPERTY
Real property in the City of National City, County of San Diego, State of California, described as follows:
LOT 6 IN BLOCK 1 OF F.A. KIMBALL'S SUBDIVISION OF THE WEST HALF OF 10 ACRE LOT 4 IN
QUARTER SECTION 154 OF RANCHO DE LA NACION, IN THE CITY OF NATIONAL CITY, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 585, FILED IN THE OFFICE OF
THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 29, 1889.
APN: 556-554-20-00
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EXHIBIT A-3
LEGAL DESCRIPTION OF PROPERTY
The land referred to in this Report is situated in the City of National City, County of San Diego, and State of
California, and is described as follows:
Parcel A:
Lots 1 through 5, inclusive, Block 1 of F.A. Kimball Subdivision of the Westerly one-half of 10 acre Lot 4
of Quarter Section 154 of Rancho De La Nacion, in the City of National City, County of San Diego, State of
California, according to Map thereof No. 585, filed in the Office of the County Recorder of San Diego
County, February 20, 1889. Also, the Southerly 10 feet of 1 lth Street adjoining said Lot 1 on the North as
closed to public use.
Excepting from Lots 1 through 3, inclusive, in said Block 1, all crude oil, petroleum, gas, brea, asphaltum
and all kindred substances and other minerals under and in said land, as excepted and reserved in Deed from
Orrie D. Kelly and Mary Lena Kelley, husband and wife, dated June 22, 1955 and recorded July 6, 1955.
ACKNOWLEDGEMENTS:
6
STATE OF CALIFORNIA
COUNTY OF
On before me (Name of Notary Public), personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature (Seal)
ACKNOWLEDGEMENTS:
STATE OF CALIFORNIA
COUNTY OF
On before me, (Name of Notary Public), personally appeared
, personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature (Seal)
ACKNOWLEDGEMENTS:
STATE OF CALIFORNIA
COUNTY OF
On before me, (Name of Notary Public), personally appeared
, personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature (Seal)
7
RESOLUTION NO. 2007 — 11
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF NATIONAL CITY AUTHORIZING THE CHAIRMAN TO EXECUTE
A SUBORDINATTION AGREEMENT WITH CONSTELLATION PROPERTY GROUP
(NATCITY 12TH) FOR THE R1 AND R2 PROJECT SITES
WHEREAS, the CDC entered into a DDA with Constellation Property Group on
August 30, 2005, for development of the Centro Project. The developer's obligtion to develop
the site was secured by a Deed of Trust dated October 21, 2005; and
WHEREAS, Constellation Property Group is in the process of extending the term
of its acquistion loan for the R1 and R2 projects. The lender has requested that the CDC
subordinate its deed of trust to the lender's deed of trust; and
WHEREAS, the proposed Subordination Agreement would place the CDC's deed
of trust in second position to the lender's deed of trust if there were a default by the developer in
complying with its obligations under the DDA. The subordination of a deed of trust is a
customary practice in transactions such as this, and would facilitate completion of the project.
NOW, THEREFORE, BE IT RESOLVED that the Community Development
Commission of the City of National City hereby authorizes the Chairman to execute a
Subordination Agreement with Constellation Property Group (NatCity 12th). Said Agreement is
on file in the office of the City Clerk.
PASSED and ADOPTED this 16th day of January 2117.
on Morrison, Chairman
ATTEST:
Brad RaUM n, Secretary
APPROVED AS TO FORM:
George H. Eiser, III
Legal Counsel
Passed and adopted by the Community Development Commission of the City of
National City, Califomia, on January 16, 2007, by the following vote, to -wit:
Ayes: Commissioners Morrison, Natividad, Parra, Ungab, Zarate.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Chairman, Community Development Commission
Secretary pity Development Commission
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2007-11 of the Community Development Commission of the City of
National City, California, passed and adopted on January 16, 2007.
Secretary, Community Development Commission
By:
Deputy
crd. oor1. y
City of National City, California
COMMUNITY DEVELOPMENT COMMISSION AGENDA STATEMENT
MEETING DATE January 16, 2007
AGENDA ITEM NO. 15
ITEM TITLE RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
NATIONAL CITY AUTHORIZING THE CHAIRMAN TO EXECUTE A SUBORDINATION AGREEMENT WITH
CONSTELLATION PROPERTY GROUP (NATCITY 12TH) FOR THE R1 AND R2 PROJECT SITES
PREPARED BY George H. Eiser, III 1' DEPARTMENT City Attorney
(Ext. 4221)
EXPLANATION
The CDC entered into a DDA with Constellation Property Group on August 30, 2005, for
development of the Centro Project. The developer's obligtion to develop the site was secured by a Deed
of Trust dated October 21, 2005.
Constellation Property Group is in the process of extending the term of its acquistion loan for the
R1 and R2 projects. The lender has requested that the CDC subordinate its deed of trust to the lender's
deed of trust.
The proposed Subordination Agreement would place the CDC's deed of trust in second position
to the lender's deed of trust if there were a default by the developer in complying with its obligations
under the DDA. The subordination of a deed of trust is a customary practice in transactions such as this,
and would facilitate completion of the project.
Environmental Review y N/A
Financial Statement
N/A
Approved By:
Finance Director
Account No.
STAFF RECOMMENDATION
Adopt resolution.
BOARD / COMMISSION RECOMMENDATION
N/A
ATTACHMENTS ( Listed Below) Resolution No.
Resolution
Subordination Agreement
A-200 (9/99)