3. Ground Lease Option Agreement (Exhibit A to Preliminary Award Letter)

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Recording Requested By and
When Recorded Mail To:

Anaheim Housing Authority )
200 South Anaheim Boulevard )
Anaheim, California 92805 )
Attention: Authority Secretary/City Clerk )

SPACE ABOVE THIS LINE FOR

RECORDER
(This document is exempt from the
payment of a recording fee per Govt Code
Section 27383.)

GROUND LEASE OPTION AGREEMENT
This GROUND LEASE OPTION AGREEMENT (“Lease Option Agreement”), dated, for identification purposes only, as of June 11, 2024 (“Effective Date”), is entered into by and between the ANAHEIM HOUSING AUTHORITY , a public body, corporate and politic (“Authority”), and LINCOLN BEACH LP , a California limited partnership (“Developer”).

Authority and Developer collectively constitute the “Parties”, with each being a “Party.”

RECITALS
The following recitals are a substantive part of this Agreement:

A. Authority is a housing authority duly established and operating as a local housing authority under the California Housing Authorities Law, Part 2 of Division 24, Section 34200, et seq., of the Health and Safety Code (“HAL”), and has been authorized to transact business and exercise the power of a California housing authority pursuant to action of the City Council of the City of Anaheim (“City Council”).

B. Authority and Developer have negotiated the terms and conditions of and entered into that certain Preliminary Award Letter dated June 11, 2024, which is incorporated herein by reference (“Award Letter”) to pursue various activities toward the development, financing, and operation of a proposed 47-unit intergenerational affordable rental housing development as described with greater particularity within the Award Letter.

C. The Parties have made substantial progress in moving forward with the consummation of those activities described in the Award Letter. Based upon such progress, as well as the continued interest of each Party in moving forward with those undertakings for the respective Parties as set forth in the Award Letter, the Parties desire at this time to further formalize arrangements for additional activities in implementation of the Award Letter, including a commitment by Authority to enter into a ground lease with Developer for certain real property referred to as the IG Parcel in the Award Letter and as legally described in Exhibit A, attached and incorporated herein, subject to the Award Letter Condition Precedent

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and the satisfaction of certain other conditions precedent as more fully set forth in this Lease Option Agreement.

D. This Lease Option Agreement is in the vital and best interest of the City of Anaheim, California, and the health, safety and welfare of its residents.

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and conditions herein contained, Authority and Developer agree as follows:

1. Capitalized Terms . Except to the extent expressly defined herein, capitalized terms shall have the meanings established under the Award Letter.

2. Grant of Option; Option Consideration . Authority, as optionor, grants to Developer, as optionee, the option (“Option”) to lease the IG Parcel on the terms and conditions set forth in this Lease Option Agreement (including without limitation Section 3 hereof). The term of the Option shall commence on the Effective Date and shall continue until expiration of the Term as defined and set forth in the Award Letter (“Expiration Date”). As of the Expiration Date, this Lease Option Agreement and the Option shall automatically terminate without the need of any notice or documentation; upon such termination, neither Party shall have any further rights or obligations under this Lease Option Agreement. (a) The Option may only be exercised subject to the Parties agreeing on a final form of ground lease and subject to Developer having provided evidence satisfactory to Authority that Developer has obtained financing adequate to develop the intergenerational affordable rental housing IG Project on the IG Parcel acceptable to Authority, and which is financed in part using 9% Tax Credits.
(b) In consideration of the grant of Option, Developer shall pay to Authority the sum of One Hundred Dollars ($100.00) (“Option Consideration Amount”) within two (2) days after the Effective Date. The Option Consideration Amount shall be retained by Authority as its sole property.

3. Form of Ground Lease . The form of ground lease by which Authority expects to provide a transfer of ground leasehold interest in the IG Parcel to Developer will be substantially in the form customarily utilized by Authority in comparable affordable rental housing transactions subject to laws and regula tions and commercially reasonable market conditions at such time as evaluated by Au thority when the Parties are negotiating and entering into the ground lease (“Form of Ground Lease”). The Form of Ground Lease will include various terms, includi ng without limitation with respect to construction, insurance, indemnity, criteria for selection of tenants, in come limits, what constitutes Affordable Rent, reporting requirements, property management, and maintenance standards. It is contemplated that the final form of ground leas e will include the final terms of financing and development of the IG Project, consistent with the Award Letter.

4. Conditions to Closing; Closing of Financing . The obligation of Authority to execute and deliver possession of the IG Parcel pursuant to the Option of Developer to ground lease the IG Parcel shall be subject to conditions customarily and normally applied by Authority in connection with affordable housing transactions which utilize ground leases such as: a delineation of improvements required in detail satisfactory to Authority; requirements that

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evidence of financing, reasonably satisfactory to the Executive Director of the Authority, be in place; and requirements that a title insurer acceptable to Authority and Developer be prepared to insure leasehold title to the IG Parcel, including all portions thereof, subject only to encumbrances which do not render leasehold title unmerchantable. The Parties acknowledge that certain steps will be needed in order for the condition of title as the entire IG Parcel to be rendered merchantable, and agree to seasonably take commercially reasonable actions necessary and appropriate in order to accomplish such a result.

5. Activities of Executive Director . The Executive Director is authorized and directed to take such actions as he shall deem necessary or convenient to implement the disposition of a ground leasehold interest in the IG Parcel as provided above, and as generally described in the Award Letter.

6. Reaffirmation . Each of the Parties reaffirms its desire to proceed with implementation of those respective responsibilities and activities and further described in the Award Letter.

7. No Third Party Beneficiaries . This Lease Option Agreement is made for the purpose of setting forth rights and obligations of Authority and Developer, and no other person shall have any rights hereunder or by reason hereof. There shall be no third party beneficiaries of the Award Letter or this Lease Option Agreement.

8. Effectiveness . This Lease Option Agreement shall be effective as of the Effective Date and shall remain in effect until the Expiration Date.

9. Interpretation . This Lease Option Agreement shall be interpreted to effectuate the terms of the Award Letter as modified hereby, in accordance with the laws of the State of California, and as if prepared and reviewed equa lly by the Parties. This Lease Option Agreement may be executed in counterparts.

IN WITNESS WHEREOF, the Parties hereto have caused this Lease Option Agreement to be executed as of the Effective Date.
(signatures on following pages)

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DEVELOPER:

LINCOLN BEACH LP,
a California limited partnership
By: IHO-Lincoln Beach LLC,
a California limited liability company,
its general partner
By: Innovative Housing Opportunities, Inc.,
a California nonprofit public benefit
corporation,
its sole member and manager
By:

Rochelle Mills, President and
Chief Executive Officer

(Ground Lease Option Agreement signatures continue on following page)

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(Ground Lease Option Agreement signatures continued from previous page)

AUTHORITY:

ANAHEIM HOUSING AUTHORITY, a public
body, corporate and politic
By:

Grace Ruiz-Stepter, Executive Director
or Authorized Designee
ATTEST:

THERESA BASS, AUTHORITY SECRETARY

Theresa Bass or Authorized Designee
APPROVED AS TO FORM:

OFFICE OF THE CITY ATTORNEY

Ryan O. Hodge, Deputy City Attorney IV
or Authorized Designee

STRADLING YOCCA CARLSON & RAUTH

Authority Special Counsel

Exhibit A
Legal Description
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EXHIBIT A

LEGAL DESCRIPTION OF THE IG PARCEL

THAT CERTAIN PARCEL OF LAND SITUATED IN THE CITY OF ANAHEIM, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING A PORTION OF THE NORTH 5 ACRES OF THE WEST 10 ACRES, AS PROPORTIONED PER NOTES ON A RECORD OF SURVEY FILED IN BOOK 10, PAGE 21 OF RECORDS OF SURVEY, OF THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 13, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, AS SHOWN BY MAP ON FILE IN BOOK 51 PAGE 11 OF MISCELLANEOUS MAPS, BOTH IN THE OFFICE OF THE RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 13;
THENCE ALONG THE NORTH LINE OF SECTION 13 NORTH 89°41'15” EAST 332.08 FEET TO THE EAST LINE OF THE WEST 10 ACRES AS SHOWN PROPORTIONED ON A RECORD OF SURVEY FILED IN BOOK 10, PAGE 21 OF RECORDS OF SURVEY, SAID

EAST LINE ALSO BEING ACCEPTED AS THE NORTHERLY PROLONGATION OF THE WEST LINE OF TRACT NO. 4261 FILED IN BOOK 161 PAGES 41 THROUGH 43,

INCLUSIVE, OF MISCELLANEOUS MAPS, IN THE OFFICE OF SAID COUNTY RECORDER;
THENCE ALONG THE WEST LINE OF SAI D TRACT NO. 4261 SOUTH 00°10'27” EAST 496.50 FEET TO THE TRUE POINT OF BE GINNING, SAID POINT BEING ON A LINE PARALLEL WITH AND 496.50 FEET SOUT HERLY OF THE NORTH LINE OF SAID SECTION 13;
THENCE CONTINUING ALONG SAID WEST LI NE SOUTH 00°10'27” EAST 172.31 FEET TO THE SOUTH LINE OF SAID NORTH 5 ACRES;
THENCE ALONG SAID SOUTH LINE SOUTH 89°40'37” WEST 259.23 FEET TO A POINT

ON A NON-TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 15934.00 FEET, A RADIAL LINE OF SAID CURVE FROM SAID POINT BEARS NORTH 88°08'37” EAST, SAID POINT ALSO BEING ON THE EAST LINE OF PARCEL 2 AS

DESCRIBED IN A DEED TO THE STATE OF CALIFORNIA PER DOCUMENT RECORDED AUGUST 10, 1951 IN BOOK 2215 PAGE 106 OF OFFICIAL RECORDS; THENCE ALONG SAID CURVE AND EAST LINE NORTHERLY 91.39 FEET THROUGH A CENTRAL ANGLE OF 00°19'43” TO A LINE THAT IS PARALLEL WITH AND 577.50 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13;
THENCE ALONG SAID PARALLEL LINE NORTH 89°41'15” EAST 205.65 FEET TO A LINE THAT IS PARALLEL WITH AND 56.00 FEET WESTERLY OF SAID WEST LINE OF TRACT NO. 4261;
THENCE ALONG SAID PARALLEL LINE NORT H 00°10'27” EAST 81.00 FEET TO SAID PARALLEL LINE 496.50 FEET SOUTHERLY OF THE NORTH LINE OF SECTION 13; THENCE ALONG SAID PARALLEL LINE NORTH 89°14'15” EAST 56.00 FEET TO THE TRUE POINT OF BEGINNING.

CONTAINING AN AREA OF 28,327 SQUARE FEET OR 0.650 ACRES MORE OR LESS.

Assessor’s Parcel Number: a portion of APN 126-602-31

Jurat
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNI
A )
) ss.

COUNTY OF ______________________ )

On ___________________ before me, ____________________________________, Notary Public,

personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(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.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

Jurat
4894-1799-0074v3/022620-0106

STATE OF CALIFORNIA )

) ss.