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REGULATORY AGREEMENT
Pursuant to Massachusetts General Laws Chapter 121A. Section 18C
Among:
Mandela Homes Limited Partnership, and Boston Redevelopment Authority
DATED: ________, 1997
TABLE OF CONTENTS
SECTIONS:
1. DESCRIPTION OF PROJECT....2
2. FINANCING; MORTGAGES......2
3. SEPARATE ACCOUNTS, EXPENDITURE OF PROJECT
INCOME ...2
4. RETURN RESTRICTION....2
5. URBAN REDEVELOPMENT EXCISE TAX; 6A
PAYMENTS ...3
6. USE RESTRICTION...4
7. TERM OF AGREEMENT... 4
8. PROJECT TRANSFERS: VOLUNTARY TRANSFERS OF PARTNERSHIP INTERESTS, CAPITAL STOCK AND BENEFICIAL INTERESTS; INVOLUNTARY TRANSFERS OF PARTNERSHIP INTERESTS; CONDOMINIUM OR COOPERATIVE FORM OF OWNERSHIP...5
9. ACCOUNTS, RECORDS AND BOOKS: ACCESS BY AUTHORITY REPRESENTATIVES;
FINANCIAL REPORTS. STATEMENTS, ETC...6
10. COMPLIANCE WITH APPLICABLE LAWS, CODES, ORDINANCES AND REGULATIONS ...6
11. PROJECT MAINTENANCE AND MANAGEMENT...6
12. PROJECT CHANGES, ETC...7
13. NON-DISCRIMINATION PROJECT LEASES AND EMPLOYMENT...7
14. NOTICES; COMMUNICATIONS...7
15. NON-RECOURSE...8
16. AGREEMENT BINDING ON SUCCESSORS AND ASSIGNS...8
17. ENFORCEMENT...8
18. TABLE OF CONTENTS: TITLES TO SECTIONS...8
19. EXECUTION OF AGREEMENT; COUNTERPARTS; REGISTRATION/RECORDATION...8
20. SEVERABILITY...8
EXHIBITA--LEGALDESCRIPTION...11
REGULATORY AGREEMENT
Pursuant to Massachusetts General Laws
Chapter 121A, Section 18C
This Regulatory Agreement (the "Agreement") is made as of the __ day of. 1997, by and between MANDELA HOMES LIMITED PARTNERSHIP, a Massachusetts limited partnership having a principal business office c/o Beacon Residential Properties, Two Oliver Street, Boston, Massachusetts 02109 (hereinafter referred to as the "Mandela Partnership") and BOSTON REDEVELOPMENT AUTHORITY, a public body politic and corporate, organized and existing pursuant to Chapter 121B, as amended, of the Massachusetts General Laws and acting hereunder pursuant to the Massachusetts Acts and Resolves of 1960, Chapter 652, as amended, and Chapter 121A, as amended, of the Massachusetts General Laws (except as otherwise stated herein, these statutes, not including Chapter 121B, are hereinafter
collectively and in their entirety referred to as "Chapter 121A"), having a principal business office at One City Hall Square, Boston, Massachusetts 02201 (hereinafter referred to as the "Authority"). Collectively, the Mandela Partnership and Authority are hereinafter referred to as the "Parties."
PRELIMINARY STATEMENT
On October 3, 1968, the Authority voted to adopt a Report and Decision on the Application for Authorization and Approval (the "Westminster Report and Decision") on a project known as Westminster Place (the "Westminster Project") and a Report and Decision on the Application for Authorization and Approval (the "Willard Report and Decision") on a project known as Willard Place (the "Willard Project"). Such votes were approved by the Mayor of the City of Boston (the "Mayor") on October 16,1968 and the votes as approved were filed with the Clerk of the City of Boston (the "City Clerk") on October 18,1968. The Authority by vote adopted a First Amendment to the Westminster Report and Decision (the "First Amendment") on December 4, 1969, which vote was approved by the Mayor on January 9,1970 and filed with the City Clerk on January 15,1970. (The Westminster Report and Decision, as amended by the First Amendment, together with the Willard Report and Decision, are hereinafter collectively referred to as the "Report and Decision.")
On _____, 1997, the Authority voted to adopt an Amendment to the Report and Decision (the "Amendment"). Such vote was approved by the Mayor on ____ _, 1997 and the vote as so approved was filed with the City Clerk on _____ _, 1997. The Amendment approved, to the extent set forth therein, a request to transfer the Westminster Project and the Willard Project to two new limited partnerships, pursuant to an Application for Approval to Transfer a Project, dated as of_____, 1997 (the "Application"). The Amendment, Section __ required each partnership to enter into a Regulatory Agreement under Chapter 121A,
Section 18C. This Agreement is one of the Regulatory Agreements contemplated by the Amendment.
NOW, THEREFORE, the Mandela Partnership agrees for itself and its successors and assigns, with the Authority, as follows;
1. Description of Project. As set forth in the Application, and as documented by
agreements recorded and filed herewith, all of the land underlying the Westminster Project and the Willard Project, together with the 74-unit apartment building located at 10 Hammond Street, have been acquired in fee simple by Hammond Street Limited Partnership, a Massachusetts limited partnership (the "Hammond Partnership"). Fee simple title in the balance of the improvements which comprise the Westminster Project and the Willard Project has been transferred to and acquired by the Mandela Partnership. The Hammond Partnership and the Mandela Partnership have entered into a Ground Lease of even date evidenced by a Memorandum of Ground Lease recorded/filed herein whereby the Hammond Partnership has leased to the Mandela Partnership the land more particularly described in Exhibit A attached hereto and incorporated herein which underlies the improvements owned by the Mandela Partnership. For purposes of this Agreement, the "Project" consists of the nine (9) apartment buildings which contain approximately 202 residential apartments and commercial facilities as well as all related improvements located on the real estate described in Exhibit A. The Authority acknowledges and agrees that, in the event of any partial or complete destruction of the Project, the Mandela Partnership shall have the right to reconstruct structures and related amenities of equal size and density based on the plans on file with the Inspectional Services Department of the City of Boston.
2. Financing: Mortgages. The initial financing of the costs of the Project shall be in accordance with the provisions of Section 5 of the Application. Subject to the presently existing provisions of Chapter 121 A, any future financing may be made without the approval of the Authority if with an insurance company, savings bank or other recognized institutional lender. All other future financing shall be made only with the prior written approval of the Authority as to the terms thereof and the identity of the lender or lenders, which approval shall not be unreasonably withheld.
3. Separate Accounts, Expenditure of Project Income. The Mandela Partnership shall keep its financial accounts for the Project separate and apart from any other activities conducted by the Mandela Partnership and shall not expend income derived therefrom other than as described in Chapter 121A, Sections 15 and 18C(e) and in Section 5 of this Agreement, upon or for the benefit of any other of its activities.
4. Return Restriction. The General Partners and Limited Partners of the Mandela Partnership shall not receive or accept as net income from the Project any sum in excess of eight percent (8%) of the amount invested by them in the Project for each calendar year or parts thereof in which they own or have owned an interest in the Project, except that, if in any such year or part thereof, they have so received a sum less than the aforesaid eight percent (8%) they may so receive in a subsequent year or years, additional sums not exceeding in the aggregate such deficiency ("Permitted Distributions"). Any change in the return restriction percentage under Chapter 121 A, Section 18C (e) shall be subject to the Authority's prior approval. For purposes of this provision, the term "amount invested" shall be the equity investment in the Project.
Permitted Distributions shall be made pursuant to this provision, commencing in May of the second calendar year after the date of this Agreement and in the same month during each successive calendar year in which this Agreement is in force and effect, only if by the end of April of each calendar year, the Mandela Partnership shall, by notice to the Authority, certify that: (i) the Mandela Partnership has paid all amounts due and payable in connection with the Approved Financing and Sections 10 and 6A of Chapter 121 A; (ii) the Mandela Partnership is current within sixty (60) business days on other accounts due and payable; and (iii) the Mandela Partnership has corrected or reserved adequate funds to correct all physical Project deficiencies identified in any notices or inspection reports issued by any federal, state or local governmental body. Notwithstanding the foregoing to the contrary, in the event the Authority reasonably determines at any time that the Project has physical deficiencies to be corrected or remedied, the Authority, by notice to the Partnership, may prohibit any distributions of any kind to the General Partners or Limited Partners until such deficiencies have been corrected or remedied to the Authority's reasonable satisfaction.
In the event in any calendar year or part thereof the General or Limited Partners of the Mandela Partnership receive or accept as net income a sum in excess of the before mentioned eight percent (8%) of the amount invested plus any accrued deficiency, as determined by the Authority, upon receipt of notice from the Authority (which notice must be received by the Mandela Partnership within eighteen (18) months of the distribution in question to be of any force or effect), the General Partners or Limited Partners shall repay an equivalent sum plus interest to the Mandela Partnership or, at the sole election of the Authority, the Mandela Partnership, upon receipt of notice, shall expend an equivalent sum plus interest, as directed by the Authority, for the purposes as set forth in Chapter 121 A, Section 15. Nothing contained in this Section shall be applicable to the distribution of profits from the sale of the capital assets of, or general or limited partner interests in, the Mandela Partnership. This Section shall be in force and effect until this Agreement and Chapter 121A are no longer applicable.
5. . Urban Redevelopment Excise Tax: 6A Payments. In consideration of the exemption of the Mandela Partnership and all its real and personal property from taxation and from betterments and special assessments and from the payments of any tax, excise or assessment to or for the Project, it shall pay the excises with respect to the Project which a Chapter 121A entity would be bound to pay under the formulae and provisions set forth in Section 10 of Chapter 121A and as set forth in the 6A Contract that has been executed by the Mandela Partnership, of even date herewith. The Mandela Partnership shall file with the Authority, the Collector-Treasurer's Office and the Commissioner of Assessing, both of the City of Boston (the "City") the following: (a) within thirty (30) days of the end of each calendar year during which this Agreement is in effect a statement of the income and expenses of the Project and the amounts invested in the Project during the preceding calendar year in accordance with Section 4 of this Agreement; (b) within thirty (30) days of the end of each calendar year during which this
Agreement is in effect a rent roll identifying each tenant or occupant in the Project by name, address, unit number, unit size and description, rent due, rent collected, whether the unit is being rented pursuant to a lease or a tenancy at will agreement, and copies of all commercial leases and/or tenancies at will agreements; and
(c) within ninety (90) days of the end of each calendar year during which this Agreement is in effect, a completed and signed Declaration of Liability Return (a form prescribed and made available by the Collector-Treasurer), an audited report, prepared by a Certified Public Accountant, consisting of a statement of all rental and other income, operating cost, a statement of profit and loss for the Mandela Partnership, a balance sheet and a statement of disposition of funds for the preceding calendar year, and a certified copy of the Mandela Partnership's Urban Redevelopment Excise Tax Return as submitted to the Department of Revenue, Commonwealth of Massachusetts. If the Mandela Partnership fails to submit the audited report required by the preceding sentence, or if the City, by and through the Commissioner of Assessing, or the Authority have reasonable cause to be dissatisfied with such audited report, the City and/or the Authority may make an annual audit of all financial records pertaining to the operations of the Project and engage the services of a private accounting firm to undertake such an audit at the reasonable expense of the Mandela Partnership. If the Mandela Partnership is found to have deliberately withheld information on or misrepresented income collection from the Project, the Mandela Partnership shall pay all arrearages plus interest on that amount owed (with an interest rate equal to the rate charged on delinquent property tax accounts by the City's Collector-Treasurer), and in addition pay and/or reimburse the City or the Authority for all expenses incurred as a result of such withholding or such misrepresentation. For purposes of the calculations of payments under Chapter 121 A, this Agreement and the 6A Contract, the Mandela Partnership and the Authority acknowledge that the City's Assessing Department has determined the maximum fair cash value of the Project pursuant to Section 10 of Chapter 121A to be $1,295,730.
6. Use Restriction. The Project shall be maintained as rental housing for "Low Income Households" and "Moderate Income Households" (as hereinafter defined) and except as hereinafter provided, this use restriction shall remain in full force and effect for the term of this Agreement. The term "Low Income Household" shall mean a household with an income less than or equal to sixty percent (60%) of the median for the Boston Metropolitan Statistical Area, adjusted for family size. The term "Moderate Income Household" shall mean a household with an income greater than sixty percent (60%) but less than ninety-five percent (95%) of the median of the Boston Metropolitan Statistical Area, adjusted for family size. The maximum number of units occupied by Moderate Income Households shall not exceed twelve percent (12%) of the total number of units in the Project. The Mandela Partnership shall maintain in full force and effect and be subject to the existing Section 8 Rent Subsidy Contract, for the remainder of its term.
7. Term of Agreement. Subject to the provisions of Section 8 hereof and Chapter 121A, Section 18C, sixth paragraph, this Agreement shall continue for a term of forty (40) years from the date of initial approval of the Project, October 18, 1968. Subject to the Mandela Partnership's having carried out the obligations and duties imposed by Chapter 121A, neither the Project nor the Mandela Partnership shall thereafter be subject to the obligations of Chapter 121A nor enjoy the rights and privileges thereunder, nor be subject to the terms, conditions and obligations of this Agreement as provided for in Section 18C of Chapter 121A.
8. Project Transfers: Voluntary Transfers of Mandela Partnership Interests. Capital Stock and Beneficial Interests: Involuntary Transfers of Mandela Partnership Interests:
Condominium or Cooperative Form of Ownership.
a. Project Transfers. If the Mandela Partnership and/or the mortgage lender or lenders to the Mandela Partnership propose, acting either under the provisions of Chapter 121A, Section 11 (third and last paragraph) and Chapter 652, Section 13A, or under Chapter 121A, Section 16A, to sell, convey, exchange, give or otherwise transfer (collectively, "transfer") the Project, in whole or in part, to another Chapter 121A entity or entities, this Agreement shall upon the prior approval of such transfer(s) and the transferee(s) by the Authority and at the option of the Authority, be terminated or amended and a new Regulatory Agreement, pursuant to Chapter 121A, Section 18C, shall be entered into between the Authority and such transferee or transferee(s). Notwithstanding any transfer under Chapter 121A, Section 16A, the Mandela Partnership acknowledges and agrees that the Project and the transferee or transferees shall remain subject to the Amendment, this Agreement and Chapter 121A.
b. Acquisition of Hammond Partnership Property. Notwithstanding the provisions of the preceding subsection (a), the Authority acknowledges that pursuant to the Amendment, the Authority has approved the anticipated acquisition by the Mandela Partnership in 1998 of all the right, title and interest in and to the land and improvements owned by the Hammond Partnership. After the Hammond Partnership receives an allocation of low income housing tax credits in 1998 from the Commonwealth of Massachusetts Department of Housing and Community Development, the Hammond Partnership will transfer the aforesaid property to the Mandela Partnership and this Regulatory Agreement will be amended to incorporate the additional property.
c. Voluntary Transfers of Mandela Partnership Interests. Capital Stock and Beneficial Interests. The Mandela Partnership and its General Partners shall not voluntarily transfer, assign, convey or sell, or in any manner hypothecate any partnership interest in the Project at any time without the prior consent and approval of the Authority, and as a condition to any request to permit a transfer of any such partnership interests, it shall cause such proposed transferee or assignee to enter into a written agreement in form and content satisfactory to the Authority, wherein such transferee or assignee agrees to assume and/or be bound by the terms and conditions of this Agreement. Any and all changes in General Partners of the Mandela Partnership or their respective partnership interests are subject to the Authority's prior approval, which approval shall not be reasonably withheld or delayed. Notwithstanding the foregoing, the Authority hereby approves a subsequent transfer by BRP, Inc. of all of its interests in the Mandela Partnership to the Mandela New Life Redevelopment Corporation.
d. Involuntary Transfers of Mandela Partnership Interests. Any transferee or person or entity succeeding to the rights and obligations and interest of the General Partners of the Mandela Partnership in the Project by operation of law, testamentary disposition, intestacy,or otherwise shall be deemed to have consented and agreed to be bound by the terms, covenants and conditions of this Agreement.
e. Condominium or Cooperative Form of Ownership. The Mandela Partnership shall take no action to convert the Project or any part thereof to either a condominium or cooperative form of ownership under applicable law, which shall constitute a fundamental change in the Project, without the prior approval of the Authority in accordance with Chapter 121 A. The Authority hereby consents to the conversion, at some date subsequent to the date of this Agreement, of the Project by the Project's residents to a cooperative form of ownership under applicable law.
9. Accounts. Records and Books: Access by Authority Representatives: Financial Reports. Statements. Etc. The Mandela Partnership agrees that it will: (a) maintain fall and accurate accounts, records and books relative to the Project conforming to generally accepted accounting principles; (b) grant to the employees or representatives of the Authority at all times during normal business hours access to such of its accounts, records and books as relate to the Mandela Partnership's obligations under this Agreement and Chapter 121 A, as now or may be in the future amended; (c) permit the Authority or any accountants or auditors approved by it to make periodic audits of the Mandela Partnership's accounts and financial records at the Mandela Partnership's expense, which shall at all times be available in the Commonwealth of Massachusetts; and (d) famish to the Authority such financial, operating, statistical and other reports, records, statements and documents on a uniform and consistent basis as may periodically or on a one time basis be required by the Authority and copies of contracts entered into by the Mandela Partnership, or other documents in the possession of the Mandela Partnership, as the Authority may from time to time require in connection with the Mandela Partnership's obligations under this Agreement and Chapter
121 A.
10. Compliance with Applicable Laws. Codes. Ordinances and Regulations. The Mandela Partnership shall cause the Project to be in compliance with the Amendment, this Agreement and with all zoning, building, health, and fire laws, codes, ordinances and regulations in effect in the City of Boston and applicable thereto. Compliance by the Mandela Partnership with applicable laws, codes, ordinances and regulations, subject only to judicial review, shall be determined by the City's Inspectional Services Department or any successor department, agency, board or commission and all inspections to determine such compliance shall be conducted by it. Copies of any violation notices of applicable laws, codes, ordinances and regulations received by the Mandela Partnership shall be provided to the Authority. The Mandela Partnership and its successors and assigns shall from time to time until the expiration of this Agreement, give to the duly authorized representatives of the Authority and others authorized by the Authority free and unobstructed access for inspection purposes to the Project, all of the residential and commercial areas and common areas contained therein and open areas surrounding the same.
11. Project Maintenance and Management. The Mandela Partnership shall, at its own cost and expense, keep, operate and maintain the Project, or cause it to be kept, operated and maintained in good repair, order and condition at all times during the term of this Agreement. The Mandela Partnership may manage the Project itself, or employ an independent contractor to undertake such management.
12. Project Changes. Any and all changes, deviations, alterations, or additions proposed to be made to the Project from and after the date of this Agreement shall be subject to prior review and approval by the Authority, not to be unreasonably withheld or delayed.
13. Non-Discrimination in Project Leases and Employment. The Mandela Partnership shall not effect or execute any covenant, agreement, lease, or other instrument whereby the Project or any improvement therein is restricted on the basis of race, color, sex, religion or national origin in the lease or occupancy thereof or employment therein.
14. Notices: Communications. Any notices, reports, statements, requests, approvals, consents, waivers or other communications required or desired to be given or furnished pursuant to this Agreement shall be in writing with copies directed, as indicated below, and shall be hand-delivered, delivered by a nationally-recognized overnight delivery service, or may be made by depositing the same in the United States mail, first class postage prepaid. If such notice is to the Authority, the address is:
Thomas N. O'Brien
Director
Boston Redevelopment Authority
One City Hall Square
Boston, MA 02201
with a copy to:
Kevin Morrison
General Counsel
Boston Redevelopment Authority
One City Hall Square
Boston, MA 02201
If addressed to the Mandela Partnership, the address is:
Mandela Homes Limited Partnership c/o Beacon Residential Properties Limited Partnership Two Oliver Street Boston, MA 02109 Attn: Howard E. Cohen
with copies to:
Maryann Civitello, Esquire Mintz, Levin, Cohn, Ferns, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111
and
Kirk P. Jackson, Esquire
Jackson & Jean Freedom House
14 Crawford Street, Boston, MA 02121
Any Party may change its respective address by giving written notice to the others in accordance with this Section.
15. Non-Recourse. Notwithstanding any contrary provision hereof, this Agreement shall be made without recourse to the personal assets of the General and Limited Partners of the Mandela Partnership, excepting only interests in the Project. In no event shall any General or Limited Partner of the Mandela Partnership have any personal liability for the payment of any sum of money or the performance of any obligation which may become payable or required by the Mandela Partnership hereunder and the Authority agrees to look only to the assets of the Mandela Partnership for any such payment or performance.
16. Agreement Binding on Successors and Assigns. The respective provisions of this Agreement shall be binding upon, and shall inure to the benefit of, the successors and assigns of the Mandela Partnership, the General Partners, the Limited Partners and the public body or bodies succeeding to the interests of the Authority.
17. Enforcement. The Authority may enforce compliance with any of the provisions of this Agreement or any of its rules and regulations imposed on the Project in the Amendment by an action in a court of appropriate jurisdiction. The Mandela Partnership shall pay to the Authority all reasonable costs and expenses, including attorneys' fees, which may be incurred by the Authority in proceedings brought to enforce compliance, to the extent the Authority prevails.
18. Table of Contents: Titles to Sections. The Table of Contents and titles of the several Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of the provisions of this Agreement.
19. Execution of Agreement: Counterparts: Registration/Recordation. This Agreement shall be executed in such form as will enable registration and/or recordation and may be executed in several counterparts, each of which shall be an original and all of which together shall constitute one and the same agreement. The Parties further agree that this Agreement shall be recorded in the Suffolk County Registry of Deeds.
20. Severabilitv. If any term or provision of this Agreement, or the application thereof to any person or circumstance, shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such terms to persons or circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the extent permitted by law.
EXECUTED as a sealed instrument as of the day first above written.
MANDELA HOMES LIMITED PARTNERSHIP
By: BRP, Inc., General Partner
By: Name: Howard E. Cohen Title: President
By: Mandela New Life Redevelopment Corporation, General Partner
By: Name: _____ Title: President
BOSTON REDEVELOPMENT AUTHORITY
By: --------------------
Thomas N. O'Brien
APPROVED AS TO FORM
Kevin J. Morrison General Counsel
COMMONWEALTH OF MASSACHUSETTS , SUFFOLK, SS _______,1997
Then personally appeared before me the above-named: Howard E. Cohen, in his capacity as President of BRP, Inc., a Massachusetts corporation, a General Partner of Mandela Homes Limited Partnership (the "Mandela Partnership"), who executed the foregoing Regulatory Agreement on behalf of the Mandela Partnership and acknowledged the same to be his free act and deed as President of BRP, Inc.
Notary Public. My Commission Expires:
COMMONWEALTH OF MASSACHUSETTS , SUFFOLK, SS
-----,1997
Then appeared before me the above-named ________, who in his capacity as President of Mandela New Life Redevelopment Corporation, a General Partner of Mandela Homes Limited Partnership (the "Mandela Partnership"), who executed the foregoing Regulatory Agreement on behalf of the Mandela Partnership and acknowledged the same to be his free act and deed as President of Mandela New Life Redevelopment Corporation.
Notary Public. My Commission Expires:
COMMONWEALTH OF MASSACHUSETTS, SUFFOLK, SS ____1997
Then appeared before me the above-named Thomas N. O'Brien, who in his capacity as the Director of the Boston Redevelopment Authority (the "Authority"), executed the foregoing Regulatory Agreement on behalf of the Authority and acknowledged the same to be his free act and deed as Director of the Authority.
Notary Public. My Commission Expires: