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HomeMy WebLinkAboutLand Use/Carmel/Beverly EnterpFEB 1 4:1984 OFFICE OF '8315967 NO. · 6 LAND USE RESTRICTION AGREEMENT g47 THIS L~ArD USE RESTRICTION AGREEMENT (.the "Agreement") is dated as of this 1st day of December, 1983 between Beverly Enterprises-Indiana, Inc., a corporation organized and existing . under the laws of the State of California and qualified to do business in the State of Indiana ("Company"), and the 'City of Carmel, Indiana (the "Issuer"), a municipal corporation duly organized and existing under the laws of the State of Indiana (the "State"). WHEREAS, the Issuer· is empowered to issue its revenue bonds pursuant to the provisions of Indiana Code 36-7-12 ( the "Act") and to make and execute such financing agreements, contracts,~ deeds, and other instruments necessary or convenient for the purposes of facilitating the financing of an economic development facility (as that %erm is defined in the. Act); WHEREAS, the .Issuer has agreed to offer, sell and deliver its Floating Rate Monthly Demand Retirement Rental Housing Revenue Bonds (Beverly Enterprises Project) Series 1983 (the "Bonds") the proceeds of which are to used to finance the acquisition, construction, improving and equipping of a retirement rental housing facility (the "Project") to be located on the, real property more particularly described in Exhibit A attached hereto and incorporated herein for all purposes; WHEREAS, pursuant to a Loan A~reement (the "Loan Agreement") of even date herewith between the Issuer and the Company, the Company has agreed to enter into this Agreement for the purpose of establishing and preserving the tax-exempt status of the Bonds; NOW, THEREFOP, E, th~ Company hereby covenants and follows'. '1."- Residential Rental Property. Company ack~qwl~dges and agrees that the Project is to be owned, agrees as hereby This instrument prepared by: Margaret M. Joslin Barbara L. Blackford Kutak Rock & Huie 1200 Anchor Savings Bank Building Atlanta, Georgia 30303 (404) 522-8700 'rh'~ ln~rumen[ Recor~e~ ,q~ ~' /~6~ 1983 MARY L. CLARK, RECORDER, HAMILTON COUNTY, IND. soo managed and operated as a project for "residential rental property" as such term is defined in Section 103(b)(4)(A) of the Internal Revenue Code of 1954, as amended (the "Code"). To that end, Company hereby represents, warrants and covenants for the ~alified Project Period (as defined herein) or until the Bonds are no longer outstanding, whichever is later, as follows: (a) That substantially all of the Project will be acquired and constructed for the purpose of providing residential rental property, and that the Project shall be owned, managed and operated as a multifamily residential rental project comprised of a building or structure or. several proximate and interrelated buildings or structures owned by the same person for federal income tax purposes, financed by the Bonds and containing one or more similarly constructed dwelling units and facilities functionally related and subordinate to such units, in accordance with ~Section 103(b)(4)(A) of the Code (the term residential rental project does not include a building or structure which contains fewer than five units, one unit of which is occupied by the owner of the units); (b) That substantially all of the Project will consist of dwelling ~nits of similar quality and type of construction, each containing separate and complete facilities for living, sleeping, eating, cooking and sanitation, for a single person~ or a family, and functionally related subordinate facilities; (c) That none of the dwelling units in the Project shall at .any time be utilized on a transient basis, shall ever be leased or rented for a period of less than thirty (30) days, and shall ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitarium, rest home or trailer park or court; and (d) That once dwelling units in the Project are available for occupancy, each dwelling unit in the Project will be rented or available for rental on a continuous basis during the longer of the period during which any Bond~ are outstanding or the Qualified Project Period. (e) That during the Qualified Project Period, at least 20% of the dwelling units in the Project shall be leased, rented or available for lease or rental continuously to members of the general public constituting Lower-Income Tenants. (as defined in the Loan Agreement). -2- (f) That land or on substantially the Project is located on a single tract of or more contiguous, tracts of land, and that ali of -the buildings, structures and facilities which are peru of the Project comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project; (g) That Company has no present plan nor does there exist any contractual arrangement, formal or' informal, to convert that portion of the Project constitutin~ residential rental property during the period of this covenan~ to any use other than use as multifamily residential rental property; and (h) That if the Project contains fewer than five units, none of the units will be occupied by an "owner" of the units for federal income tax purposes. "Qualified. Project Period" shall mean that period beginning on the later of the first day on which 10% of the aggregate number of units in the Project are occupied or the date of the issuance of the Bonds and ending on the latest of the date (i) which is ten (10) years after the date on which at least 50% of the number of units in the Project ,are first occupied, (ii) which is that number of days after which any of the units are first occupied equal to 50% of the total number of days which comprise the tsrm of the Bond with the longest maturity, or (iii) on which any assistance provided with respect to the Project under Section 8 of the United States Housing Act of 1937 Eerminates. 2. Lower-Income Tenants. Pursuant to requirements of Section 103(b)(4)(A) of the Code, Company hereby represents, warrants and covenants for the Qualified Project Period as follows: (ai To rent initially at least 20% of the completed dwelling units in the Project to Lower-Income Tenants~ prior to the satisfaction of which no additional units shall be rented or leased to other tenants, and after initial rental occupancy of such dwelling units by Lower-Income Tenants, 'at least 20% of the completed dwelling units in the Project at all times shall be rented to and occupied (or held available for rent if previously rented to and occupied by a Lower-Income Tenant) by Lower-Income Tenants as required by Section 103(b)(4)(A) of the Code). For this purpose a dwelling unit occupied by an individual or family who is a ,Lower Income Tenant at -3- 8ooK 17 6 5 0 the commencement of the occupancy is treated as a dwelling unit occupied by a Lower-Income Tenant even though they subsequently cease to be 'off low or moderate income as defined in Section 103(b)(4)(A). Moreover~ such a dwelling unit. is treated as being occupied by . a Lower-Income Tenant until reoccupied (other than for a temporary period not to exceed thirty-one (31) days), at which time the character of the unit shall be redetermined; (b) To obtain and maintain on file an Income Certification from each Lower-Income Tenant dated the earlier of the date on which such tenant signs a lease or the date such tenant occupies a unit in the Project in the 'form attached to the Loan Agreement as Exhibit D; and (c) To maintain complete and accurate records pertaining to the dwelling units occupied or to be occupied by Lower-Income Tenants, and to permit any duly authorized representative of Trustee, the Department of the Treasury or the Internal Revenue Service to inspect the books and records of Company pertaining to the Income Certifications of Lower-Income Tenants residing in the .Project; and within thirty (30) days after each anniversary of the Completion Date of the Project~ to render to Issuer and Trustee a certificate~ executed by. Company Representative stating the percentage of completed dwelling units of the Project which were occupied (or held for rent if previously occupied by Lower-Income Tenants) by Lower-Income Tenants during such per.iod. 3. Assignment, Sale or Lease of Project. The Company may assign, sell or lease the Project as provided in the Loan Agreement, provided that the continued operation of the Project shall comply with the provisions of this Agreement and Article II of the Loan Agreement. In the event that the assignee or purchaser shall assume the obligations of the Company under the Loan Agreement and this Land Use Restriction Agreement, Company shall be released from its obligations thereunder and hereunder to the extent provided in the Loan Agreement. 4~. Restricted Units. The Company has designed and will maintain the Project so that the units to be rented pursuant to the requirements hereof to "individuals of low or moderate income" will be of similar quality and type of construction to ali other units in the Project, except that there shall be no requirement' for the Company to designate specific units for "individuals of low and moderate income" or to make available units with-any particular number of bedrooms for such persons. Tenants in such units shall enjoy~ equal common facilities of the Project. -4- l 7 6 8 51 5. Neqative Covenant. The Company shall not permit the use of the dwelling accommodations of the Project for any purpose except rental residences in compliance with Section 103(b)(4)(A) of the Code. 6. Successors Bound. This Agreement and the covenants contained herein shall run with the land and shall bind, and the benefits shall inure to, respectively, the Company and its successors and assigns and all subsequent owners~of the Project or any interest therein, and the Issuer and its successors and assigns, for the longer of the Qualified Project Period or the period during which any of the Bonds are outstanding. 7. Enforcement of Terms. The benefits' of this Agreement shall inure to, and may be enforced by the Bank, Issuer, the Trustee and their successors and assigns, for the period set forth in Section 13 hereof. 9. Termination. This Agreement shall remain in effect for the longer of the Qualified Project Period or the period during which the Bonds are outstanding, unless the Trustee receives an opinion of nationally recognized bond counsel that termination prior to such time would not cause interest on the Bonds to' become subject to. federal income'taxation.. The '~'Tr~stee.shall. consent~to the- termination of the effectivene~s- of this Agreement upon .receipt of an opinion to such' effe~ct, and such consent shall be effective to terminate this Agreement. Notwithstanding the foregoing, the requirements set forth in this Agreement shall cease to apply in the event of involuntary noncompliance by the Company caused by a fire, seizure, requisition, foreclosure, transfer of title by deed in lieu of foreclosure, change in federal law or an action of a federal agency- after the date' of issue of the Bonds which prevents the enforcement of such requirements, or condemnation or similar-events, provided that the Bonds are redeemed within a reasonable time thereafter in compliance with Section 103(b)(~)(A) of the Code or amounts received as a consequence of such event are used to provide "residential rental property" which qualifies under Section 103(b)(~)(A) of the Code; provided, however, that the provisions of this paragraph shall not apply if the Project is subject to foreclosure, transfer of title by deed in lieu of foreclosure or a similar event, if, at any time during the Qualified Project Period sUbSequent to such · event, the Company or a "related person" (as defined .in Treasury Regulation 1.103-10(e)) obtains an ownership interest · in the Project for federal income tax purposes. 8. No Conflict with Other Documents. The Company warrants that it has not, and will not, exeCUte any other -5- f3© © '1'76 852 agreement with provisions contradictory To, or in opposition to, the provisions hereof, and that, in any event, the requirements of this Agreement are paramount and controlling as to the rights and obligations herein set forth and supersede any othe~ requirements in conflict herewith 10. Severability. The invalidity of any clause, part or provision of this Agreement shall not affect the validity of the remaining portions hereof'. i1. Amendments and Waivers. This Agreement may not be amended, changed, modified, altered or terminated except as permitted herein. Anything to the contrary notwithstanding; the Issuer and the Company hereby agree to amend this Agreement to the extent required or permitted, in the opinion of nationally recognized bond counsel, in order for interest on the Bonds to remain exempt from federal income taxation under Section 103(b)(~)(A) of the Code. The party requesting such amendmen~ shall notify the other party to this Agreement and the Trustee of the proposed amendment, with a copy of such requested amendment to nationally recognized bond. counsel. After review of such proposed amendment, said bond counsel shall render to the Trustee an opinion as to the effect of such proposed amendment upon the includability of interest on the Bonds in the income of the recIpient thereof for federaI income. tax purposes. The Issuer~ and' Trustee shall, consent in writing- to any such amendment, change, modification, alteration or termination if such amendment, change, modification, alteration or termination will not cause interest on the Bonds to be s~bject ~o federal income taxation, according to such opinion of nationally recognized bond counsel. The Company agrees, from time to time, to take all actions and steps necessary To comply, and cause the Project ~o comply, with the requirements of Section 103(b)(~)(A) of the Code and to enter into modifications and amendments to this Agreement to the extent required by any interpretation of any court having jurisdiction over the interpretation of federal law, any amendment to the Code or any Treasury Regulations promulgated under Section 103(b)(4)(A) thereof, in each case so that interest on the Bonds remains exempt from federal income taxes. Both the Company and the Issuer hereby appoint the Trustee as their true and lawful attorney-in-fact to execute,' deliver and, if applicable, file of record on behalf of the Company or the Issuer, as is applicable, any document or instrument required ~in the opinion of nationally recognized bond' counsel if either the Company or the Issuer defaults in the performance of' its obligation hereunder; provided, however, that the .Trustee shall take no action under this section, without first notifying'the Company and the Issuer of its intention to take such ~action and providing the Company or the Issuer, or both, as is applicable, a reasonable opportunity to comply with the requirements hereof. -6- BOOK -- ~2. Assiqnmen~ of Issuer's Rights. For so long as the Bonds are outstanding, the interest of the Issuer in this Agreement will be assigned to the Trustee, and its successors, under the Trust Indenture dated as of Decenfoer 1, 1983 between the Issuer and the Trustee, and shall be enforceable by the Trustee in accordance with its terms. 13. Defaults; Remedies. If the Company-~'shall fail to observe or perform any covenant, conditfon ar agreement contained herein on its part to be observed or perfcrmed for a period of thirty (30) Buszness Days after the-giving of written notice of such failure, then and in such event, the Issuer os the Trustee and. themr successors and assigns shall be entitled, individually or collectively, to enforce any remedies available to them in law or in equity including, but not limited to, the right to compel specific performance by Company of its obligations hereunder. 14. Definitions. All capitalized, undefined terms used herein shall have the meaning ascribed to them in the Loan Agreement. 15. Governing Law. The tsrms and provisions of this Agreement shall be governed by ~he law of the State of Indiana. 16. Notices. Notices shall be deemed delivered when mailed' registered mail, return receipt requested, to the Company c/o Beverly Enterprises, 873 South Fair Oaks Avenue, P.O. Box 90130, Pasedena, California, 91109~ to the Trustee to Merchants National Bank & Trust Company of Indianapolis, One Merchants Plaza, Indianapolis, Indiana 46255, and to the Issuer, City of Carmel, Indiana, 40 East Main Street, Carmel Indiana 46032, Attention: Mayor, or to such ather place as a ~ar~y may designate in writing. IN WITNESS ~;HEREOF, the parties have caused this Agreement to be signed and sealed by their respective, duly authorized representatives, as of the day and year first written above. [SEAL] By: CITY OF CARMEL; INDIANA ne A. Ri~mah, Mayor [SEAL] Withe ss: By: id Trea~surer [ACKNOWLEDGEMENTS BEGIN ON NEXT PAGE] STATE OF INDIANA COUNTY OF HAMILTON ] ] ,ss. The undersigned, a Notary Public, does hereby cert{fy that Jane A. Reiman.and Dorothy J. Hancock, whose names as Mayor and Clerk-Treasurer of the CITY OF CARMEL, INDIANA, respectively, are signed to tke foregoing Agreement/ and who are each known to me and known to be such officials, acknowledged before, me on this day ~under oath that, befng informed of the contents of the Agreement-, they, in their capacities as such officials and with full authority, executed and delivered th~ same voluntarily for and as the act of CITY OF CARMEL, INDIANA on the date the same bears. Given under my.hand and seal of office, this day of December, 1983. ~.~ ~ expires: STATE OF NEW YORK COUNTY OP NEW YORK ) ) ss: ) 856 The undersigned, a Notary Public, does hereby certify that David A. Davidson, Vice President and Treausrer of BEVERLY ENTERPRISES- INDIANA, INC., and William A. Jones, whose names are signed to the foregoing Agreement, and who are-each known to me, acknowledged before me this day under oath that, being informed of the con~ents of the Agreement, they executed and delivered the same voluntarily and as the act of BEVERLY ENTERPRISES-INDIANA, INC. on the date the same bears. Given ~nder my hand and seal of office, this !5th day of December, 1983. My Commission expires: This Instrument Recorded ,~.~x~ /,~-- 1983 MARY L. CLARK, RECORD£R, HAMILTON COONIY, IND.