2023-06-23 Covenant to Ensure Permanent Low Income Housing (Impact Fees) - CleanReturnRecordedInstrument To:
City of Edmonds – Clerk’s Office1215thAve.N,Edmonds,WA98020
COVENANT TO ENSURE PERMANENTLOW-INCOMEHOUSING:
LimitationsonRentsandTenantIncome
CompliancewiththeprovisionsofthisCovenantshallbedeemedtobea requirement of title.PropertyAddress:8215236THSTSWAssessor’sParcelNumber:00576700002614
Legal Description:LOT A, EDMONDS LLA PLN2018-0027, REC. 201809215002, BEING PTN LOT 26, SKELTONS LAKE MCALEER 5 ACRE TRACTS, VOL 6, PG 21, IN NE 1/4 SEC 31, TWP 27N, RGE 4E, SNOHOMISH
CO.Grantor:ELCFA LLCGrantee:City of EdmondsRelatedPermitNumbers:BLD2022-1319
This Covenant to Ensure Permanent Low-Income Housing (“Covenant”) is entered into as of the ____thday of ______, 2023, by the undersigned owner(s) of real property legally described
in Exhibit A hereto, ELCFA LLC, a Washington limited liability company (the “Owner” or “Grantor”), in favor of the City ofEdmonds,Washington,amunicipalcorporation(hereafterthe “City”
or “Grantee”)asrequiredfor the issuance to the Owner(s) of a permit allowing the construction and/or use of the property described in Exhibit A hereto (the “Property”).
RECITALS
WHEREAS,theCityhasprovidedOwneranexemptionfrompaying80percentofstreetimpact fees, as allowed in ECC 3.36.040.B, which amounted to $116,524.43 at the time of project permitting; and
WHEREAS,theCityhasprovidedOwneranexemptionfrom100percentofparkimpactfees,as allowed in ECC 3.36.040.C, which amounted to $121,688.32 at the time of project permitting; and
WHEREAS,Ownerhasbenefitedfromtheseincentives; and
WHEREAS,Ownerhasagreedtopermanentlylimittherentschargedandimposemaximum income requirements for the occupancy of the Property; and
WHEREAS,subsequentresidentswillbenefitfromtherentlimitationswhichthisCovenant requires; and
WHEREAS, the intent of the City is to permanently preserve through this Covenant the affordabilityofthePropertyforpersonsoflowincome,andtoassigntotheCitytherightto enforce compliance
with this Covenant; and
WHEREAS,OwnerherebyacknowledgesandagreesthatthisCovenantisadeedrestrictionthat limits rent on the Property and is designed to provide affordable housing stock pursuant to an Agreement
between the City and Owner; and
NOWTHEREFORE,inconsiderationofthebenefitsreceivedbytheparties,thesufficiencyof which is hereby acknowledged, the parties agree as follows:
DEFINITIONS
Thefollowingtermsshallhavethemeaningsdefined herein:“AreaMedianIncome”meanstheAreaMedianIncomereportedannuallyforsinglepersons and households of various size by the United States Department
of Housing and Urban Development, or by any successor United States Government department, agency, or instrumentality, for the PrimaryMetropolitan Statistical Area“PMSA” whichincludesthe
City of Edmonds, WA.“HUD”meanstheUnitedStatesDepartmentofHousingandUrbanDevelopment,orany successor governmental agency.“HUD Low Income Limit” means the maximum gross household income
that allows a householdtobeconsidered“lowincome”forthepurposesofHUDfinancialassistance.These limits are reported annually by HUD and reflect the low income limit for a particular area.“Income”meanst
hedefinitionofincomeunderSection8oftheUnitedStatesHousingActof 1937, codified at 42 U.S.C.S. § 1437a(b) (1990), as further determined by the United States Secretary of Agriculture in
24 CFR § 813.106 (1997). In the event that Section 8 is repealed or the definition of income under Section 8 is substantially modified, then “income” shall mean the anticipated total
income for the next twelve month period received from all sources by each member of the household, excluding, however, temporary or non-recurring income (including gifts), income from
the employment of children under age 18, payments for the care of foster children or foster adults, and amounts received specifically for the reimbursement of medical expenses for a
member of the household.“InstitutionalLender”meansanybank,savingsandloanassociation,oranyotherinstitutional lender which is licensed to engage in the business of providing purchase
money mortgage financing for residential real property.“RealProperty”meanslandandimprovementsorcommoninterestownershipand improvements.“Rent,” as used in this Covenant shall include,
without limitation, all customary charges and feestomanagetherentalunitsincludingwater,sewer,andtrashserviceandshallnotincludeall other utilities, except that it shall not include amounts
charged to tenants by the Owner to reimburse the Owner for actual amounts that the Owner is required to pay to utility companies for service to the rental units as a result of the lack
of credit worthiness, failure to pay their own utility bills, or neglect on the part of the tenant.“Transfer” means any sale, assignment or transfer, voluntary, involuntary or by operation
of law (whether by deed, contract of sale, gift, devise, bequest, trustee’s sale, deed in lieu of foreclosure,orotherwise)ofanyinterestintheProperty,includingbutnotlimitedtoafeesimple
interest, a joint tenancy interest, a tenancy in common, a life estate, a leasehold interest, or any interest evidenced by a land contract by which possession of the Property is transferred
and Owner retains title.
COVENANTSNumberofAffordableUnits.Owneragreesthatitwillprovidefifty-two(52)permanently affordable rental housing units (as defined in Section 3, below) located on the Property incorporated
herein by this reference (each an “Affordable Rental Unit” and collectively, the “Affordable Rental Units”).Location,Configuration,SizeoftheAffordableRentalUnits.Thelocation,size, configuration,
of the Affordable Rental Units on the Property shall be as follows:
52apartmentunitsinfour3-story buildings
The unit location and other identifying unit characteristics of the Affordable Units to be constructedreferencetheplansasapprovedbytheCity,issuedonoraboutMay12,2023under building file
number BLD2022-1319, as filed and on record with the City.Maximum Income: No single household in the specified permanently affordable dwelling unitsofthePropertyshallhaveanincomewhichisgreaterthanth
eHUDlow-incomelimitfor the PMSA applicable to Edmonds, WA at initial occupancy. However, the above notwithstanding, a person, or family, whose income increases above the limits set forth
above after he, she, or they become occupants of one of the units, may be allowed to renew the lease for occupancy of the unit, provided that his, her, or the family’s, gross income
does not exceed 140 percent of the applicable income limit for each affordable dwelling unit. The foregoing lease renewability provision shall be of no force and effect if prohibited
by binding restrictions imposed by Project financing, such as the provisions of Section 42 of the federal Internal Revenue Code, the regulations promulgated thereunder or other applicable
law or ordinance.AnnualIncomeRecertification: In addition to initial income certifications performed when applicants are determined eligible to receive assistance, income recertification
must be completedoneachtenant’s“anniversarydate”(oneyearfromthedateofinitialcertification).Maximum Rents: The maximum rents charged to tenants for each specified permanently affordable
housing unit (by unit size) are to be set at amounts published annually by the Washington State Housing FinanceCommission(“WSHFC”)forSnohomishCountyoranothersourcedesignatedbytheCity.
The City shall have the discretion to substitute an alternative index which shall be published annually.Rent Increases: Rent may be increased no more than once each year up to the applicable
WSHFCmaximumrentsforSnohomishCounty.TheOwnermustprovidetenantswithatleastthirtydays written notice before rent increases are implemented.Additional Funding: No additional funding for
building maintenance or any other purpose shall be provided by or through the City of Edmonds without a reduction of the Maximum Income,asspecifiedinitem#2ofthisCovenant,suchthatthereducedMaximumInc
omeshall benohigherthan80percentoftheHUDlow-incomelimitforthePMSAcontainingEdmonds.Rental Covenant: The parties acknowledge that that the Owner has voluntarily entered into thisCovenanttomaintainthes
pecifiedrentalunitsaspermanentlyaffordablelow-incomeunits.Transfer:This Covenant shall run with the land and be binding on any successor owner of the Property.
OwnerorOwner’sRepresentativeshallinformtheCityinwritingthirtybusinessdays(30)prior to any transfer or conveyance of the Property.
Writtennoticevia postalmail to:
PlanningandDevelopment 121—5th Ave. NEdmonds, WA 98026EnforcementActions:ThisCovenantmaybespecificallyenforcedagainsttheOwnerorany successor in interest of the Owner. Venue for such
action shall be proper in Snohomish County, Washington, and service may be made or notice may be given by posting such service or notice on the Property. Enforcement actions may include,
without limitation, repayment of City- determinedoverchargestotenants,eligibilityforfuturefunding,payment to the City of the $238,212.75 in impact fees that were initially waived pursuant
to this Covenant together with interest from the date of breach, or other available remedies. The City shall be entitled to its reasonable attorneys’ fees in the event that it is the
substantially prevailing party in any such enforcement action.If a violation of this Covenant occurs, the City has the right to institute such actions or proceedings as it may deem
necessary, desirable, or appropriate for enforcing the purposes of this Covenant and the obligations set forth herein. If the City should prevail in any such legal action to enforce
this Covenant, the person against whom the City prevailed shall pay all of the City’s costs and expenses, including reasonable attorneys’ fees, incurred in connection with the City’s
efforts to enforce this Covenant.Indemnification:TheOwnershalldefend,indemnifyandholdharmlesstheCityfromand against all losses, claims, suits, judgements or liabilities incurred as
a result of the Owner’s actionsorfailurestoact,andaspartofsuchindemnificationobligationshallpayallcostsand attorney’s fees, if any, incurred by the City as a result of any such claims
or suits.TheOwnershallcomplywithallapplicablelawsandregulationsoftheCity,State,and Federal governments.TheOwnershallmaintainthePropertyingood,safe,andhabitableconditioninallrespects,
except for normal wear and tear, and in full compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority with jurisdiction over matters concerning
the Property.TheOwnershallcomplywiththeCity’sannualreportingrequirements.TheOwnershallmaintainreasonablerecordsofitsperformanceunderthisCovenant,as follows:The Owner shall require documentation
to verify the income status of all residents of the AffordableRentalUnits.Documentationmayinclude,butisnotlimitedto,third-partyincome verification, federal income tax returns, W-2’s,
Supplemental Security Income, Social Security Disability Income, child support, and pay stubs.TheOwnershallretaincompleterecordsonapplicantsandtenantsforthemostrecentfive- year period
showing the following information collected for Fair Housing purposes:ethnicity;race;femalehead of household;householdincome;anddisabledhousehold:
“Disabled household” is a household composed of one or more persons at least one of whomisanadultwhohasadisability.Apersonisconsideredtohaveadisabilityifthe person is determined to have
a physical, mental or emotional impairment that:isexpected to beof long, continuedand indefinite duration;substantiallyimpedeshis/herabilitytoliveindependently;andisofsuchanaturethattheabilitycouldb
eimprovedbymoresuitablehousing conditions; ORhasadevelopmentaldisabilityasdefinedinSection102oftheDevelopmental Disabilities Act and Bill of Rights Act.Thedocumentationretainedshallbesufficienttosupp
orttheinformationprovidedbythe Owner to the City.TheOwnerwillallowaccesstotheserecordsatanytimeduringnormalbusinesshoursbythe City. These records will be kept in the Owner’s local office.Noresidentia
lleaseforthePropertyoranypartthereofmaycontainanyofthefollowing provisions:Agreementbythetenanttobesued,toadmitguilt,ortoajudgmentinfavoroftheOwnerina lawsuit brought in connection with
the lease;AgreementbythetenantthattheOwnermaytake,hold,orsellpersonalpropertyofhousehold members without notice to the tenant and a court decision on the rights of the parties. This
prohibition does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing unit after the tenant has moved out of the unit. The Owner
may dispose of this personal property in accordance with state law;AgreementbythetenantnottoholdtheOwnerortheOwner’sagentslegallyresponsiblefor any action or failure to act, whether
intentional or negligent;AgreementofthetenantthattheOwnermayinstitutealawsuitwithoutnoticetothetenant;AgreementbythetenantthattheOwnermayevictthetenantorhouseholdmemberswithout institutingacivilcour
tproceedinginwhichthetenanthastheopportunitytopresentadefense, or before a court decision on the rights of the parties;Agreementbythetenanttowaiveanyrighttoatrialbyjury;Agreementbythetenanttowaivethe
tenant’srighttoappealortootherwisechallengein court a court decision in connection with the lease; andAgreement by the tenant to pay attorney's fees or other legal costs even if the
tenant wins in a courtproceedingbytheOwneragainstthetenant.Thetenantmaybeobligatedtopaycostsifthe tenant loses.The Owner may not terminate the tenancy or refuse to renew the lease of
a tenant of the Property except for serious or repeated violation of the terms and conditions of the lease; for violationofapplicablefederal,stateorlocallaw;orforothergoodcause.Anyterminationor
refusal to renew must be preceded by not less than 30 days by service upon the tenant of a written notice from the Owner specifying the grounds for the action.TheOwnershallaffirmativelymarkettheResi
dentialUnitstoallpeople,regardlessofsex, handicap, and familial status.TheOwnershalladoptwrittentenantselectionpoliciesandproceduresfortheResidential Units that are consistent with state
and local law.TheOwnershallcreateandmaintainawaitinglistfortheResidentialUnitsthatisconsistent with state and local law.TheOwnershallmaintainthePropertyincompliancewithallapplicablehousingquality
standards and City code requirements.This Covenant shall be perpetual, shall run with the land and in favor of the City of Edmonds,andshallberecordedbytheOwnerintherealpropertyrecordsofSnohomishCoun
ty.IfanyprovisionofthisCovenantshallbeheldbyacourtofproperjurisdictiontobeinvalid, illegal or unenforceable, the remaining provisions shall survive and their validity, legality or unenforceability
shall not in any way be affected or impaired thereby.NothinginthisCovenantshallbedeemedtocreateanagency,partnership,jointventureor employment relationship between the City and the Owner.TheMayororhi
sorherdesigneeshallhavetherighttomodifytheconditionsofthis Covenant to deal with exigent circumstances.Remedies: Theimpact fees not paid at the time of development of the Property, equal
to $238,212.75 plus interest a rate of nine percent (9%) per annum from the date this Covenant was breached, shall be paid to the City by Owner within thirty (30) days of the City’s
written notice to the Owner that pursuant to the reporting under Sections 14 and 15 above, the Property is not in compliance with Sections 1, 3, or 4 of the Covenant. In the event
that such impact fees are not paid within the time specified in this Section 26, interest shall continue to accrue on the amount due at a rate of nine percent (9%) per annum.[Remainder
of Page Left Blank]
Signature Page to Covenant to Ensure Permanent Low-Income Housing
ELCFA LLC,
a Washington limited liability company
By:ELCFA Manager LLC,a Washington limited liability company
Its:Managing MemberBy:Housing Hope Properties,
a Washington nonprofit corporation
Its:ManagerBy:
Donna Moulton, Chief Executive Officer
STATEOFWASHINGTON)
)ss.COUNTYOFSNOHOMISH)
I certify that I know or have satisfactory evidence that Donna Moulton is the person who appeared before me and said person acknowledged that said person signed this instrument, on oath
stated that said person was authorized to execute the instrument and acknowledged it as the Chief Executive Officer of Housing Hope Properties, the Manager of ELCFA Manager LLC, the
Managing Member of ELCFA LLC, a Washington limited liability company, to be the free and voluntary act such party for the uses and purposes mentioned in the instrument.IN WITNESS WHEREOF,
I have hereunto set my hand and seal this day of, 2023.
(printor type name)NOTARY PUBLIC in and for the State of Washington, residing at My Commission expires:
Seal/stamp
EXHIBIT A
LEGAL DESCRIPTION
LOT A, CITY OF EDMONDS LOT LINE ADJUSTMENT NO. PLN2018-0027, RECORDED SEPTEMBER 21, 2018 UNDER RECORDING NO. 201809215002, IN SNOHOMISH COUNTY, WASHINGTON.
Summary report:
Litera Compare for Word 11.3.1.3 Document comparison done on 5/30/2023 9:49:22 AM
Style name: Default Style
Intelligent Table Comparison: Active
Original DMS: nd://4887-6924-1956/2/Covenant to Ensure Permanent Low Income Housing (Impact Fees) [ELCFA].docx
Modified DMS: nd://4887-6924-1956/3/Covenant to Ensure Permanent Low Income Housing (Impact Fees) [ELCFA].docx
Changes:
Add
50
Delete
48
Move From
0
Move To
0
Table Insert
0
Table Delete
0
Table moves to
0
Table moves from
0
Embedded Graphics (Visio, ChemDraw, Images etc.)
3
Embedded Excel
0
Format changes
0
Total Changes:
101