Agenda packet — Costa Mesa City Council, March 18, 2025 (part 3 of 4)

19.0 NONLIABILITY OF CITY OFFICIALS.

No officer, official, member, employee, agent, or representative of the City shall be personally liable to Developer, or any successor in interest to Developer, in the event of any default or breach by City or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement or any of the City Agreements.

20.0 TRANSACTIONS WITH AFFILIATES.

Developer shall have the right to enter into contracts with subsidiaries, affiliates and other related entities for the purpose of providing cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third party. City acknowledges and agrees that Developer may act as its own general co ntractor or may engage a third party licensed contractor for the construction of any improvements on the Site and that will be entitled in so doing to earn a commercially reasonable fee.

21.0 SEVERABILITY/WAIVER/INTEGRATION/INTERPRETATION; ENTIRE AGREEMENT.

21.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby.

21.2 Wai
ver . All waivers of the provisions of this Agreement, unless specified otherwise herein, must be in writing and signed by the appropriate authorities of City or Developer, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under 404

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the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not invalidate this Agreement nor shall it be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof.

21.3 Integration. This Agreement contains the entire Agreement between the parties concerning the subject matter hereof and neither party relies on any warranty or representation not contained in this Agreement.

21.4 I
nterpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply.

21.5 E
ntire Agreement . This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors-in-interest with respect to all or any part of the subject matter hereof.

22.0 E
NFORCED DELAY; EXTENSIONS OF TIME .

Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quaran tine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein “Enforced Delay”), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within thirty (30) days after the sending party has knowledge, or should have obtained knowledge, of the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer’s failure to obtain financing for the Project (except as a result of an omission or breach by City), (ii) Developer ’s failure to negotiate agreements with prospective tenants or users for the Project, or (iii) interest rates or economic or market conditions. Times of performance under this Agreement may also be extended by mutual written agreement by City and Developer. The City Manager shall also have the authority on behalf of City to administratively approve extensions of time not to exceed a cumulative total of one (1) year.

23.0 GOVERNING LAW.

This Agreement shall be governed by the internal laws of the State of California without regard to conflict of law principles.
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24.0 NO MERGER.

The covenants, terms, and provisions of this Agreement shall not merge with any grant deed or other instrument pertaining to the conveyance of any interest in real property.

25.0 COUNTERPARTS.

This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument.

26.0 MORTGAGEE PROTECTION.

The default of any of the provisions of this Agreement shall not defeat or render invalid the lien of any duly recorded mortgage or deed of trust encumbering Developer’s leasehold interest in the Site or any portion thereof. The City hereby agrees to cooperate, including by effecting suitable amendment to this Agreement, to add any provision which may reasonably be requested by any proposed mortgagee for the purpose of implementing the mortgagee protection provisions contained in this Agreement and allowing such mortgagee reasonable means to protect or preserve the lien and security interest of its mortgage as well as such other documents containing terms and provisions customarily required by mortgagees in connection with any such financing. Nothing herein contained shall require any mortgagee to cure any default of Developer hereunder prior to its acquisition of Developer’s leasehold interest in the Site pursuant to a foreclosure of its mortgage, trustee sale thereunder or deed in lieu foreclosure thereof . Upon acquisition of Developer’s leasehold interest in the Site, such mortgagee or the purchaser or grantee, as applicable shall only be liable and responsible for defaults first arising after the date of such acquisition.

27.0 LIMITED GRANT OF SUBORDINATION.

Provided that the affordability covenants and related preservation thereof in Articles 1, 2 (other than the obligations in Section 2.1 to construct the Project), 3 (other than Sections 3.13 and

3.14), 12 and 13 of this Agreement and the City Easement Agreement have priority over any deed of trust or other mortgage security instrument and shall remain binding and run with the Site for the “Term” of this Agreement in the event of foreclosure or deed in lieu of foreclosure or any other action taken pursuant to such deed of trust or other mortgage security instrument, City agrees to subordinate this Agreement to any deed of trust evidencing a loan which is used, in whole or in part, to refinance the Construction Loan, the Take -Out Loan or any subsequent loan used to refinance said refinancing loan (each a “Refinancing Loan”) provided that the original principal amount of any such Refinancing Loan shall not be more than the greater of (a) the lesse r of (i) eighty percent (80%) of the fair market value of the Project as determined by the lender of such Refinancing Loan; and (ii) the amount which results in a debt service coverage ratio for the Refinancing Loan that is equal to or greater than 1.15:1 as determined by the lender for such Refinancing Loan; and (b) the amount necessary to cause reconveyance of the loan being refinanced, including payment of (1) all costs [i.e., escrow, legal, title, etc.] of the refinance, (2) any deferred developer fee, (3) any completion operating deficit loans, (4) any proceeds that are required to be paid to another soft lender, provided the loan made by such soft lender is contemplated in the Project Budget, (3) amounts reserved for any repairs or capital improvements to the Project, (4) amounts required to be reserved by the refinancing lender and (5) amounts paid 406

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to acquire or redeem the interest of Borrower’s limited partner; and provided further that nothing herein shall be deemed to subordinate or affect the affordability covenants of the AH/DDA or the City Regulatory Agreement. Any deed of trust securing any Refinancing Loan shall hereinafter be referred to as the “Refinancing Deed of Trust”. Subject to the conditions of any subordination set forth in this Section 27.0 and the AH/DDA, the City hereby agrees to subordinate this Agreement to any authorized Refinancing Deed of Trust, and understands that in reliance upon and in consideration of this subordination, specific loans and advances are being and will be made, and, in connection therewith, specific monetary and other obligations are being and will be entered into, which would not have been made or entered into but for reliance upon this Section. The City will, at any time upon sixty (60) days written request from Developer, execute a further specific subordination agreement reasonably required by the lender of the Refinancing Loan subordinating this Agreement to any Refinancing Deed of Trust, provided that any such subordination agreement complies with the requirements in this Section by maintaining the priority of the affordability covenants and their running with the Site for the Term of this Agreement, and any such subordination agreement is in a form approved by the City, in its reasonable discretion, that clearly provides the subordination does not include the affordability covenants and preservation t hereof for the Term of this Agreement . Any such specific subordination agreement shall be deemed reasonable and to comply with the requirements of this Section if it is substantially similar to the form of subordination agreement executed by City in connection with the Construction Loan or the Take-Out Loan.

28.0 FINANCIAL OBLIGATIONS PERSONAL TO DEVELOPER.

Notwithstanding any provisions of this Agreement to the contrary, but subject to Section

4.2 hereof, (i) all obligations of the Developer under this Agreement for the payment of money, (ii) all claims for damages against the Developer occasioned by breach or alleged breach by the Developer of its obligations under this Agreement, and (iii) all of Developer’s indemnification obligations hereunder, shall not be a lien on the Project and no person shall have the right to enforce such obligations or claims other than directly against the Developer as provided in this Agreement.

Provided a transfer complies with Article 9 of this Agreement and as long as the prior “Developer” under this Agreement has delivered to the City an assignment and assumption or other agreement giving notice to City of a subsequent owner that has legal and binding ownership of the Project , no subsequent owner of the Project shall be liable or obligated for the breach or default of any obligations of the Developer under this Agreement on the part of any prior Developer, including, but not limited to, any payment or indemnification obligation, as such obligations are personal to the person who was the Developer at the time the default or breach was alleged to have occurred and such person shall remain liable for any and all damages occasioned thereby even after such person ceases to be the Developer. Each Developer shall comply with and be fully liable for all obligations of a “Developer” hereunder during its period of ownership.

29.0 LIMITED RECOURSE OBLIGATIONS.

The obligations of Developer under this Agreement are a limited obligation of the Developer and no member, officer, partner or employee of Developer shall have any personal liability for the obligations of Developer contained in this Agreement; the City’s sole recourse for a default under this Agreement shall be the Site and the Project. 407

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[end - signature page follows]

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IN WITNESS WHEREOF, the City and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove.

Dated: ______________________, 202_
“City”

CITY OF COSTA MESA,
a California municipal corporation
By: _______________________________
Lori Ann Farrell Harrison, City Manager
ATTEST:

City Clerk

APPROVED AS TO FORM:

JONES MAYER

Counsel to the City of Costa Mesa

Dated: ____________________, 202_
“Developer”
_____________________________________ LP, a
California limited partnership,

By: ____________________ LLC, a
California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation, a
California nonprofit public benefit
corporation, Manager
By:

Name:__________________________
Title:___________________________

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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 California )
County of Orange )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who 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.

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 (Seal)

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 (Seal)

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EXHIBIT “A”

LEGAL DESCRIPTION OF SITE

[To be inserted]

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EXHIBIT “B”

INCOME COMPUTATION AND CERTIFICATION FORM
[See following pages]

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CITY OF COSTA MESA
77 Fair Drive, Cosa Mesa, California 92626

INCOME COMPUTATION AND CERTIFICATION FORM
(Affordable Housing Eligibility for Renter Occupied Unit

PART I. PROPERTY FINANCED WITH GOVERNMENT ASSISTANCE

Property Address: _____________________________________________________________________________

PART II. TENANT HOUSEHOLD INFORMATION

Date of Birth Soc. Sec. # Relationship

TOTAL NUMBER OF PERSONS IN HOUSEHOLD: ______ (Please list information on other household members below)

Mailing Address: __________________________________ Telephone Numbers: Work (____) ________________ _________________________________________________ Home (____) ________________

PART III. GROSS HOUSEHOLD INCOME Complete the following, attach copies of required verification as specified below.

Attach a note explaining any significant changes in household income between the previous year and the current year.

INFORMATION IS REQUIRED FOR ALL MEMBERS OF THE HOUS EHOLD AGE 18 OR OLDER REGARDLESS OF WHETHER THEY CONTRIBUTE TO THE COSTS OF THE HOUSEHOLD. If you are not required to file a tax return, please indicate this in Part V by your signature.

ANN INCOME ANN INCOME
INCOME SOURCES for owner others in hshld VERIFICATIONS (needed for file) A. Employment earnings Last tax return & last 3 pay stubs, employer verification
B. Self-employment earnings Last 2 tax returns & current financial stmt C. Social Security (OASDI) Annual award letter
D. Supplemental Security Income (SSI) Annual award letter E. Public assistance (AFDC, general Current benefit statement assistance, unemployment, etc.)
F. Pension (s) Annual award letter, yearend stmt, W-2 G. Interest income Last 2 statements for all accounts H. Investment income (stocks, bonds, Last 2 statements for all accounts real estate, etc.)
I. Room rental Rental agreement, copies of checks, etc.

J. Other income (list type/source)

K. TOTAL INCOME (sum of A thru J) / 12 months = ____________ mo. income 413

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PART IV. PROPERTY STATUS

Will this property be your primary residence? ______

Will someone other than the individuals listed above be occupying this property? ______

If yes - Name of occupants: _____________________________________________________________________

Telephone Number: _______________ Mailing Address: ____________________________________________ ____________________________________________________________________________________________

My/our housing expenses are as follows:

1. Monthly tenant rent ______________________________

2. Average monthly utilities _________________________

PART V. TENANT CERTIFICATION
I/We understand that after the initial eligibility determination, completion of monitoring forms is required on an annual basis. I/We certify that I/we have disclosed all information pertaining to my/our application and that the information presented in the foregoing Sections I through IV is true and accurate to the best of my (our) knowledge.

__________________________________________ __________________________________________ Tenant Date Tenant Date

For more information regarding this application, please contact management staff at (760) _______________.

------------------------------------------------------------------------------------------------------------------------------------------

FOR OFFICE USE ONLY

______ Information verified
______ Income category
______ Maximum allowable annual income (_____% of median) ______ Applicant’s annual income __________ gross monthly __________ max housing costs

Comments: __________________________________________________________________________________

____________________________________________________________________________________________

________________________________________________________ Management Staff Date 414

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EXHIBIT “C”

INCOME RECERTIFICATION FORM
[See following document]

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CITY OF COSTA MESA
77 Fair Drive, Cosa Mesa, California 92626

INCOME RECERTIFICATION FORM
(Renter Occupied Unit)

PART I. GENERAL INFORMATION

1. Property Owner Name __________________, L.P.

2. Renter Name_______________________________________________________

3. Property Address ___________________________________________________ Costa Mesa, CA 92626 (Please include P.O. Box No. if applicable)

4. Has there been a change in ownership of this property during the preceding 12 month period? Yes ( ) No ( )

(If yes, please explain) _______________________________________________ PART II. UNIT INFORMATION

5. Number of Bedrooms ______________

6. Number of Occupants ______________
Names:
___________________________________ ________________________________ ___________________________________ ________________________________ PART III. AFFIDAVIT OF RENTER

I, _______________________, and I, _______________________, as renters of units assisted pursuant to the Affordable Housing Program of the City of Costa Mesa (the “Program”), do hereby represent and warrant that the following computation includes all income (I/we) anticipate receiving for the 12 -month period commencing on January 1, 20___ (including the renter(s) and all family members of the renters):

(a) amount of wages, salaries, overtime pay, commissions, fees, tips and bonuses, and payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay (before payroll deduction) ___________

(b) net income from business or profession or rental of property (without deduction for repayment of debts or expansion of business) ____ (c) interest and dividends ___________
(d) periodic receipts such as social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits, alimony, child support, regular contributions or gifts
from persons not occupying unit ___________
(e) public assistance allowance or grant plus excess of maximum allowable for shelter or utilities over the actual allowance for such purposes ___________
(f) regular and special pay and allowances of a member of armed services (whether or not living in the dwelling)
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who is head of the family or spouse ___________
Subtotal (a) through (f) ___________

LESS: Portion of above items which are income of a family member who is less than 18 years old or a full-time student ( _________ ) TOTAL ELIGIBLE INCOME __________
NOTE: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payment such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; government benefits to a veteran for education; special pay to a serviceman head of family away from home and under hostile fire; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; relocation payments under Title II of Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience.

2. This affidavit is made with the knowledge that it will be relied upon by the Landlord and the City to determine maximum income for eligibility and (I/we) warrant that all information set forth in this Part III is true, correct and complete and based upon information (I/we) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary.

3. (I/We) will assist the Landlord and the City in obtaining any information or documents required to verify the statements made in this Part III and have attached hereto a copy of our federal income tax return for the last year (20___).

4. (I/We) acknowledge that (I/we) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my/our) agreement with the Landlord to rent the unit and will additionally enable the City to initiate and pursue all applicable legal and equitable remedies with respect to the unit and to me/us.

B. (My/Our) monthly housing expenses are limited to the following:

1. Base rent __________________________

2. Average Monthly Utilities __________________________

3. Other (explain) __________________________
(I/We) understand that completion of monitoring forms is required on an annual basis and agree to notify the City of Costa Mesa in writing of any change in ownership or rental of the unit. (I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct. ___________________________________

Date _________________________ ___________________________________ Renter(s)
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EXHIBIT “D”

LEASE RIDER
[See following page]

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JHC ________________ PROJECT

Lease Rider

RESIDENT: __________________________________________________________________ (if there is more than one adult occupant, each person must sign the rider)

LEASE DATE: _________________________________________________________________

UNIT NO.: __________________________________________________________________

The undersigned tenant(s) hereby certify and agree as follows:

1. Income Certification. The attached income certification is true, correct and complete. I/we agree to provide a similar certification annually upon request during the term of my occupancy.

2. Employer Verification. The landlord or property manager has my permission to verify my/our income from any sources of income I/we receive.

3. False Statements. If the income certification and/or lease application submitted by me/us is false, or if I/we fail to provide annual certifications, the landlord or property manager will have the right to terminate my/our lease and recover possession of my/our unit. I/we understand that the landlord and property manager are relying on this income certification in accepting me/us as a tenant, and the landlord or property manager will be seriously harmed if my/our income does not qualify the unit for the affordable housing program.

4. This rider shall be considered as part of my/our lease.

Date: _________________________ __________________________________________ Tenant
__________________________________________
Tenant
__________________________________________
Tenant
__________________________________________
Tenant
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EXHIBIT “E”

CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE
[See following page]

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CERTIFICATION OF CONTINUING PROGRAM COMPLIANCE

The undersigned, being duly authorized to execute this certificate on behalf of JHC _____________, L.P., a California limited partnership (“ Developer”), owner of the JHC - __________________ Housing Project, hereby represents and warrants that:

1. He/she has read and is thoroughly familiar with the provisions of the Affordable Housing / Disposition and Development Agreement between the City of Costa Mesa and Developer, as assigned to said owner of the Project.

2. As of June 30, 20__, the following number of residential units in the _________ (“Rental Apartment Complex ”) (i) are currently occupied by tenants qualifying as Eligible Tenants at Affordable Rents; or (ii) are currently vacant and being held available for occupancy by Eligible Tenants and have been so held continuously since the date Eligible Tenants vacated such unit, as indicated:

i. Units occupied by Eligible Tenants

a. ____ units occupied by 30% Low Income Households
c. ____ units occupied by Low Income Households
ii. ____ vacant units

3. The unit number, unit size, the tenant paid rental amount charged and collected, the number of occupants and the income of the occupants for each restricted unit in the Rental Apartment Complex is set forth on the attached list. All restricted units in the Rental Apartment Complex are rented at Affordable Rent.

OWNER NAME

Dated: ________________________

________________________________LP, a
California limited partnership,

By: ___________________________ LLC, a
California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation, a
California nonprofit public benefit
corporation, Manager
By:

Name:__________________________
Title:___________________________

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EXHIBIT “F”

SOCIAL SERVICES

[See attached]

422

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423

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424

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425

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426

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427

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428

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429

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430

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431

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ATTACHMENT NO. 86

RELEASE OF CONSTRUCTION COVENANTS
[SEE FOLLOWING DOCUMENT]

434

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RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

City of Costa Mesa
77 Fair Drive
Cosa Mesa, California 92626
Attn: City Manager

(Space Above Line for Recorder’s Use Only)
(Exempt from Recording Fee per Gov. Code 27383)
[NOTE: RECORD

AS PARTIAL RELEASE
OF AGREEMENT]

RELEASE OF CONSTRUCTION COVENANTS
WHEREAS, JHC _________________, L.P., a California limited partnership, (“Developer”), is the owner of a leasehold interest in that certain real property located at 695 W. 19th Street , in the City of Costa Mesa, County of Orange, State of California, as more particularly described in the legal description in Exhibit A attached hereto and incorporated herein by this reference (collectively, the “Site”).

WHEREAS, by an Affordable Housing / Disposition and Development Agreement (hereinafter referred to as the “ AH/DDA”) dated ________________, 2025, by and between Developer and the City of Costa Mesa , a California municipal corporation ( “City”), has redeveloped the Site in accordance with the AH/DDA; and WHEREAS, pursuant to Section 3.13 of the AH/DDA, promptly after Developer ’s completion of the “ Project” (as that term is defined in the AH/DDA) upon the Site, and upon request by Developer, City shall furnish Developer with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Orange; and WHEREAS, the issuance by City of the Release of Construction Covenants shall be conclusive evidence that Developer has complied with the terms of the AH/DDA pertaining to the development of the Site; and
WHEREAS, Developer has requested that City furnish Developer with the Release of Construction Covenants; and
WHEREAS, City has conclusively determined that the development of the Site has been satisfactorily completed as required by the AH/DDA;
NOW, THEREFORE:

1. As provided in the AH/DDA, City does hereby certify that development of the Site has been fully and satisfactorily performed and completed, and that such development is in full compliance with said AH/DDA.
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2. This Release of Construction Covenants shall not constitute evidence of Developer’s compliance with the following agreements, the provisions of which shall continue to run with the land until termination thereof in accordance with the terms thereof:
(i) Deed of Trust with Assignment of Rents, by and between Developer as borrower and City as beneficiary, dated ______________________________, and recorded on _____________________, as Instrument No. ____________________, in the Office of the Orange County Recorder; and
(ii) Regulatory Agreement and Declaration of Covenants and Restrictions by and between Developer and City, and recorded on ______________________, as Instrument No. ______________________ in the Office of the Orange County Recorder.

3. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof.

4. This Release of Construction Covenants is not a Notice of Completion as referred to in California Civil Code section 3093.

5. Except as stated herein, nothing contained in this instrument shall modify in any way any other provisions of the AH/DDA or any other provisions of any agreements or documents referenced therein.

IN WITNESS WHEREOF, City has executed this Release of Construction Covenants as of this ____ day of ________________, _____.

CITY OF COSTA MESA,
a California municipal corporation
By:

Lori Ann Farrell Harrison, City Manager

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CONSENT TO RECORDATION

JHC-____________________, L.P., a California limited partnership (“Owner”), owner of the fee interest in the real property legally described in Attachment No. 1 hereto, hereby consents to the recordation of the foregoing Release of Construction Covenants against said real property.

Dated: _______________________
_____________________________________LP, a
California limited partnership,

By: _________________________LLC, a
California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation, a
California nonprofit public benefit
corporation, Manager
By:

Name:__________________________
Title:___________________________

437

88202058701591735504913a03/12/25
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.

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 (Seal)

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 (Seal)

438

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EXHIBIT “A”

LEGAL DESCRIPTION OF SITE

[To be inserted]

439

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ATTACHMENT NO. 9

PROJECT BUDGET
[SEE FOLLOWING PAGE]

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ATTACHMENT NO. 10

NOTICE OF AFFORDABILITY RESTRICTIONS

ON TRANSFER OF PROPERTY
[SEE FOLLOWING DOCUMENT]

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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Costa Mesa
77 Fair Drive
Cosa Mesa, California 92626
Attn: City Manager

Exempt From Recording Fee Pursuant to Government Code § 27383

NOTICE OF AFFORDABILITY RESTRICTIONS

ON TRANSFER OF PROPERTY

Important notice to owners, purchasers, tenants, lenders, brokers, escrow and title companies, and other persons, regarding affordable housing restrictions on the real property described in this Notice:

Affordable housing r estrictions have been recorded with respect to the property described below (referred to in this Notice as the “Site”) which require that the Site be developed as an affordable rental development and that all of the units except one manager’s unit be rented to and occupied by persons and households of limited income at affordable rents.

Title of Document Containing Affordable Housing Restrictions:

Regulatory Agreement and Declaration of Covenants and Restrictions (“Regulatory Agreement”).

Parties to Regulatory Agreement: City of Costa Mesa, a California municipal corporation (“City”), and
_______________________________LP, a California limited partnership (“Owner”).

The Regulatory Agreement is recorded concurrently with this Notice, in the official records of Orange County.

Legal Description of Site: See Exhibit “A” attached hereto and incorporated herein by this reference.

Location of Site: [TBD] W. 19th Street , in the City of Costa Mesa, County of Orange, State of California.
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Assessor’s Parcel Number of Site: See Exhibit “A” attached hereto and incorporated herein by this reference.

Summary of Regulatory Agreement:

• The Regulatory Agreement requires the Owner to develop a rental housing development on the Site containing [TBD units.

• The Regulatory Agreement restricts the rental of (i) [TBD] units to households whose annual income does not exceed thirty percent (30%) of the Orange County Median Income, as determined in accordance with Section 42(g) of the United States Internal Revenue Code of 1986, as amended, as published from time to time by the California Tax Credit Allocation Committee ; and (ii) [TBD] units to households whose annual income does not exceed sixty percent (60%) of the Orange County Median Income, as determined in accordance with Section 42(g) of the United States Internal Revenue Code of 1986, as amended, as published from time to time by the California Tax Credit Allocation Committee.

• The Regulatory Agreement restricts the rents that may be charged to such households to the maximum amount of rent, including a reasonable utility allowance, that does not exceed the rent permitted to be charged to the applicable household, as the case may be, determined in accordance with Section 42(g)(2) of the IRC, and as published from time to time by TCAC.

• The term of the Regulatory Agreement is 99 years.

This Notice does not contain a full description of the details of all of the terms and conditions of the Regulatory Agreement. You will need to obtain and read the Regulatory Agreement to fully understand the restrictions and requirements which apply to the Site.

This Notice is being recorded and filed in compliance with Health and Safety Code Section 33334.3(f)(3) and (4), and shall be indexed against the City and the Owner of the Site.
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[signature on next page]
Date: _______________, _____
“City”
CITY OF COSTA MESA, a California
municipal corporation
By:

Lori Ann Farrell Harrison City
Manager
ATTEST:

City Clerk
APPROVED AS TO FORM:

JONES MAYER
Counsel to the City

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 444

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WITNESS my hand and official seal.

Signature (Seal)

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EXHIBIT “A”

LEGAL DESCRIPTION OF SITE

[To be inserted]

CONSENT TO RECORDATION
_________________________________ L.P., a California limited partnership ( “Owner”), owner of a leasehold interest in the real property legally described in Exhibit “A” hereto, hereby consents to the recordation of the foregoing Notice of Affordability Restrictions on Transfer of Property against said real property.

Dated: _______________

By:______________________________

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 446

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WITNESS my hand and official seal.

Signature (Seal)

ATTACHMENT NO. 11

FORM OF GROUND LEASE
[SEE FOLLOWING DOCUMENT]

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GROUND LEASE

BETWEEN

CITY OF COSTA MESA
AS “LANDLORD”
AND
_________________ LP
AS “TENANT”

CONCERNING CERTAIN REAL PROPERTY LOCATED
IN THE

CITY OF COSTA MESA, CA

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City Review 10/1/24

GROUND LEASE
THIS GROUND LEASE (the “Lease” or “Ground Lease”) dated, for reference purposes only, as of _________________, is entered into by and between the City of Costa Mesa, a California municipal corporation ( “City” or “Landlord”) and ____________LP, a California limited partnership (“Tenant”).

RECITALS
A. City owns in fee that certain real property located at 695 W. 19th Street in the City of Costa Mesa, County of Orange, State of California, more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Premises”).

B. The Premises is improved with a portion of an existing parking lot that serves the adjacent Costa Mesa Senior Center.

C. On or about __________, 2025, City and JHC -Acquisitions LLC, a California limited liability company ( “JHC-Acquisitions”), entered into that certain Affordable Housing / Disposition and Development Agreement (the “ AH/DDA”), pursuant to which, among other things, City agreed to ground lease the Premises to JHC -Acquisitions or a permitted assignee thereof and to provide certain financial assistance to JHC -Acquisitions or a permitted assignee thereof, for the development and operation on the Premises of a senior affordable rental housing project.

D. On or about the same date hereof, JHC -Acquisitions assigned all of its rights and obligations under the AH/DDA to Tenant.

E. City now desires to lease the Premises to Tenant for a period of ninety-nine (99) years following the Commencement Date pursuant to the terms of this Ground Lease.

NOW, THEREFORE, for and in consideration of the foregoing Recitals, which are incorporated herein by this reference, the covenants, representations, warranties and agreements set forth herein, and other good and valuable consideration, the sufficiency of which are hereby acknowledged, City and Tenant hereby agree to the following:

ARTICLE 1

PREMISES

1.1 Lease of Premises . For and in consideration of the covenants, conditions and restrictions set forth herein, City hereby leases to Tenant and Tenant hereby leases from City the Premises on the terms and conditions set forth herein. Concurrent with the execution of this Lease, Tenant and City will execute and record against Tenant’s leasehold interest in the Premises an easement agreement (the “ City Easement Agreement”) in favor of City and for the benefit of City and City’s guests, invitees, vendors, employees and service personnel of the Costa Mesa Senior Center, which will provide (i) non-exclusive access rights over the driveway and drive aisles to be constructed as part of the “Project Improvements” (as defined in Section 1.2 below) that will provide ingress and egress to and from the public right-of-way to the Costa Mesa Senior Center, and (ii) non-exclusive right s to park in the uncovered surface parking spaces to be 449

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constructed as part of the Project Improvements and on the ground floor of the affordable housing development to be constructed as part of the Project Improvements , all pursuant to the terms and conditions set forth in the Easement Agreement. This Lease is effective and binds the parties as of the last date this Lease is signed by authorized representatives of all parties below ( “Effective Date”), notwithstanding that the Term Commencement Date will occur on the date described in Section 2.1.

1.2 Premises Definitions.

1.2.1 Premises. “Premises” means that certain real property located at 695 W. 19th Street in the City of Costa Mesa, County of Orange, State of California, more particularly described in Exhibit A attached hereto and incorporated herein by this reference, together with and subject to all singular rights, easements, licenses, privileges and appurtenances thereunto attaching or in any way belonging thereto, including, without limitation, the City Easement Agreement. The City Easement Agreement and the rights thereunder shall not be subordinated to any other obligation, encumbrance or lien on the Premises.

1.2.2 P
roject Improvements . “Project Improvements” means the senior affordable rental housing community to be developed on the Premises, including, without limitation, the following: all buildings, structures, parking areas, on site utility installations, landscaping, amenities, fences and other related ancillary facilities, together with any and all replacements or substitutions therefor or modifications thereto.

1.3 F
urther Encumbrances . City shall not encumber City ’s fee estate in the real property comprising the Premises without the prior written consent of each “ Leasehold Lender” (as defined in Section 16.1), which consent shall be granted or withheld in such Leasehold Lender’s sole and absolute discretion. City further irrevocably and unconditionally agrees that any mortgage, deed of trust or other security instrument now or hereafter encumbering all or any part of City’s fee estate in the real property comprising the Premises shall automatically be subject and subordinate in all respects to the lien of this Lease (and all amendments, modifications, extensions and renewals hereof) and all existing and future “Leasehold Mortgages” (as defined in Section 16.1) (and all amendments, modifications, extensions and renewals thereof). City shall, at the request of any Leasehold Lender, cause the holder of each such mortgage, deed of trust and other security instrument to execute and deliver to the requesting Leasehold Lender a written and recordable subordination agreement in form and substance as required by such Leasehold Lender in its reasonable discretion.

1.4 CT
CAC Lease Rider . At such time as the Project is “placed in service” (as defined in Section 42 of the Internal Revenue Code), City and Tenant shall execute and acknowledge a California Tax Credit Allocation Committee ( “CTCAC”) Lease Rider in the form then required by CTCAC, which Tenant shall cause to be recorded in the Official Records of Orange County, at Tenant’s expense.

ARTICLE 2

TERM OF LEASE
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2.1 Term. The term of this Lease (the “Term”) commences on the date on which a Memorandum of Ground Lease is recorded in accordance with Section 17.6 below (the “ Term Commencement Date” ) and expires on the last day of the month in which the ninety-ninth (99th) anniversary of the Term Commencement Date occurs, and is subject to earlier termination as provided elsewhere in this Lease. The expiration or sooner termination of the Term shall be referred to as “Lease Termination.”

2.2 L imited Right to Reopen at 55 Year Mark. This Lease may be reopened for negotiations up to six months prior to the fifty-fifth (55th) anniversary of the Effective Date through the three hundred sixty-fifth (365th) day after the fifty-fifth (55th) anniversary of the Effective Date for changes, deletions, or amendments for the purposes of negotiating (i) “Additional R ent” (as defined below) payable by Tenant (provided that any such Additional Rent, if mutually agreed to between the parties, would be payable solely from Net Operating Income), (ii) social services to be provided to residents, and (iii) the required parking access and management plan. Either party may request reopening for negotiations i n writing, which request shall include a summary of the proposed changes. Any such mutually acceptable changes, deletions, or amendments shall not be effective unless they are set forth in a written amendment executed by both parties.

2.3 L
ease Termination . At Lease Termination, Tenant shall execute, acknowledge and deliver to City within thirty (30) days, a valid and recordable quitclaim deed covering all of the Premises, including the Project Improvements, free and clear of all liens, encumbrances, and deeds of trust, except those existing and created pursuant to the terms of this Lease or those remaining on title with the consent or at the request of the City (the “Quitclaim Deed”). Any and all encumbrances on the Premises or the Project Improvements at the time of Lease Termination which are the result or consequence of Tenant entering into this Le ase, constructing the Project Improvements, operating the senior affordable rental community on the Premises, or any other actions or inactions of Tenant shall be cleared from title at Tenant’s sole cost, liability and expense.

If Tenant fails to clear such encumbrances at Lease Termination, Tenant shall continue to be liable and responsible for all such costs, liabilities and expenses associated with, related to or caused by such encumbrances that were not removed by Tenant, and City may take any and all action to enforce its rights under this Lease and to have such encumbrances removed, and all costs and expenses associated with such actions shall be paid solely by Tenant upon City demand for such payment.

ARTICLE 3
RENT

3.1 Rent Definitions.

3.1.1 Annual Base Rent. “Annual Base Rent” for any Lease Year (as defined in Section 3.1.4 hereof) means the amounts set out below:

Lease Years Annual Base Rent
Term Commencement
Date through the end of the Term
$1.00
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3.1.2 Additional Rent. “ Additional Rent ” means all sums, Impositions (as defined in Section 4.1 hereof), costs, expenses, and other payments for which Tenant is responsible pursuant to this Lease, as it may be amended from time to time.

3.1.2.1 Definitions. For purposes of this section, the terms “Applicable Percentage,” “Assignment,” “Net Operating Income,” “Refinancing,” “Senior Loans,” “Net Refinancing Proceeds,” and “Net Proceeds,” shall have the meanings ascribed in the Promissory Note of even date between Tenant as “Borrower” and “City” as Lender/Beneficiary (the “City Note”).

3.1.2.2 Additional Receipts Rental Payments. Commencing in the year (the “NOI Rent Commencement Year”) after the year in which all payments on all loans to the Tenant from the City that are payable from Net Operating Income have been fully paid by Tenant, Tenant shall be pay, as Additional Rent hereunder to City , annually, on each December 1 during the Term following the NOI Rent Commencement Year, an amount equal to the Applicable Percentage multiplied by the Net Operating Income for the calendar year immediately preceding such annual payment date. On or before each said December 1, regardless as to whether any payment is remitted as Additional Rent under this subsection, Tenant shall provide City with an accounting documenting the calculation of Net Operating Income for the previous calendar year.

3.1.2.3 Additional Rent Due in the Event of Refinancing of Senior Loans or Transfer of Project Improvements. If following the NOI Rent Commencement Year, Tenant undertakes a Refinancing as permitted by the A H/DDA, the Applicable Percentage of any Net Refinancing Proceeds of that Refinancing shall be payable to City no later than the recording of the Refinancing, as Additional Rent. If Borrower causes an Assignment, or otherwise transfers all or part of the Project Improvements as provided in Section 1.5 of the A H/DDA, the Applicable Percentage of any Net Proceeds of that transfer shall be payable to City no later than the date of close of escrow or other consummation of the transfer.

3.1.3 Rent. The Annual Base Rent and the Additional Rent are collectively referred to as “Rent.”

3.1.4 L ease Year . “Lease Year” means twelve (12) month periods, with the first Lease Year commencing on the Term Commencement Date, provided if the Term Commencement Date is other than the first day of a month, the first Lease Year shall also include the partial month during which the Term Commencement D ate falls, and each subsequent Lease Year shall begin on the first day of the same month that is the first full month of the first Lease Year.

3.2 R
ent . Tenant ’s obligation to pay Rent under this Lease shall consist of the obligation to pay (i) Annual Base Rent and (ii) Additional Rent.

3.2.1 A ccrual of Annual Base Rent . Tenant ’s obligation to pay Annual Base Rent shall begin to accrue on the Term Commencement Date and shall continue to accrue throughout the Term. The parties agree and acknowledge that the cumulative Annual Base Rent for the Term of Ninety -Nine Dollars ($99) sha ll be paid to City no later than the Term Commencement Date.
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3.2.2 Additional Rent. Tenant’s obligation to pay Additional Rent shall begin to accrue on the Term Commencement Date and shall continue to accrue throughout the Term.

Additional Rent shall be payable by Tenant to the appropriate party on or before the date required by this Lease.

3.2.3 A
dditional Consideration. In addition to the Rent and Additional Rent provided for herein, consideration for this Lease shall also be and is Tenant ’s full and complete compliance with all terms, conditions, warranties and covenants contained in this Lease relating to the construction, operation and management of the Project Improvements.

3.2.4 U
se of Residential Units. If at any time any residential unit in the Premises is used for any purpose other than as an affordable housing unit or a manager ’s unit as required under this Lease, notwithstanding Section 16.2.1, but at all times subject to the notice and cure period set forth in Section 15.1.12 and subject further to the rights of Leasehold Lenders set forth in Section 16.3.1, City shall have the right to exercise all remedies provided for herein, including, without limitation, the right to terminate this Lease as set forth in Section 15.5.1.2.

3.3 Method of Payment . Tenant shall pay all Rent to City in lawful money of the United States of America at City of Costa Mesa, 77 Fair Drive, Costa Mesa CA 92626, Attention:

City Manager, unless City instructs Tenant in writing to deliver payment to another address, or unless this Lease specifically provides another place for payment.

3.4 N o Cost to City : No Counterclaim, No Abatement . Except as otherwise expressly provided in this Lease, the Rent payable under this Lease shall be absolutely net to City, so that this Lease shall yield to City the full amount of the Annual Base Rent and the Additional Rent throughout the Term. Except as otherwise expressly provided in this Lease, Tenant shall pay Rent without assertion of any counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction.

ARTICLE 4

TAXES, ASSESSMENTS AND OTHER CHARGES

4.1 Impositions. Tenant agrees to pay, or cause to be paid, prior to delinquency but subject to the right to contest, to the proper authority, any and all valid taxes, assessments, impositions, fees and similar charges on the Premises which become effective after the Eff ective Date of this Ground Lease, including all taxes levied or assessed on the possession, use or occupancy, as distinguished from the ownership, of the Premises (collectively, “ Impositions”).

Tenant shall not permit any Impositions to become a defaulted lien on the Premises or the Project Improvements thereon; provided, however, that in the event any Imposition is payable in installments, Tenant may make, or cause to be made, payment in installments; and, provided further, that Tenant may contest the legal validity or the amount of any tax, assessment, imposition, fee or similar charge, through such proceedings as Tenant considers necessary or appropriate, and Tenant may defer the payment thereof so long as the validity or amount thereof shall be contested by Tenant in good faith and without expense to the City. In the event of any such contest, Tenant shall protect, defend and indemnify the City against all loss, cost, expense or damage resulting there from, and should Tenant be unsuccessful in any such contest, Tenant shall forthwith pay, discharge, or cause to be paid or discharged, such tax, assessment, imposition, fee or other similar 453

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charge. City hereby consents to and shall reasonably cooperate and assist with Tenant applying for and obtaining any applicable exemptions from taxes or assessments levied on the Premises, the Project Improvements or on Tenant ’s interest therein. Tenant shall have no obligation to pay Impositions pursuant to this Section that are due and payable prior to the Effective Date, including but not limited to any taxes, assessments, impositions, fees or other charges levied against the Premises which are incurred prior to the Effective Date.

4.2 Possessory Interest Tax . In accordance with the requirements of California Revenue and Taxation Code Section 107.6, Tenant is hereby informed that this Ground Lease will create a possessory interest in Tenant in the Premises, that the possessory interest of Tenant may be subject to property taxation and that Tenant may be subject to the payment of property taxes levied on Tenant ’s possessory interest in the Premises. Any possessory interest tax shall be included in the definition of “Imposition.”

4.3 S
ervices . Tenant shall pay before delinquency all charges for gas, water, electricity, light, heat or power, telephone or other communication service, sewer, trash removal, cable and all other services or utilities used during the Term in, upon or about the Premises by Tenant or any of its contractors, subcontractors, employees, subtenants, licensees, invitees, subtenant or assignees. Tenant shall also obtain, or cause to be obtained, without cost to City, any and all necessary permits, licenses or other authorizations required for the lawful and proper installation and maintenance upon the Premises of wires, pipes, conduits, tubes and other equipment and appliances for use in supplying any service to and upon the Premises.

ARTICLE 5

CONSTRUCTION OF THE PROJECT IMPROVEMENTS

5.1 Construction. Tenant shall cause the Project Improvements to be constructed in compliance with the construction plans and specifications for the Project Improvements that have been previously approved by City, as amended from time to time with the approval of the City and “Senior Lender” (as defined in Section 12.1). Any and all Project Improvements constructed by or on behalf of Tenant shall be constructed at Tenant’s sole expense and in a good and workman- like manner, in compliance with all “Applicable Laws” (as defined in Section 6.3).

5.2 N
o Liens . Tenant shall not have any right, authority or power to bind City or City’s fee estate in the real property comprising the Premises, for any claim for labor or material or for any other charge or expense, lien or security interest incurred in connection with the development, construction or operation of the Project Improvements or any change, alteration or addition thereto.

Tenant shall promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered at the request of Tenant and shall keep the Premises free and clear of all mechanics ’ and materialmen’s liens in connection therewith. If any claim of lien is filed against the Premises or a stop notice is served on City or other third party in connection with the development, construction or operation of the Project Improvements or any change, alteration or addition thereto, then Tenant shall, within thirty (30) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to City a surety bond in sufficient form and amount, or provide City with other assurance reasonably satisfactory to City that the claim of lien or stop notice will be paid or discharged, 454

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provided that City provides written notice of such claim of lien or stop notice to Tenant promptly upon receipt by City.

If Tenant fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, City may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at Tenant’s expense and, Tenant shall pay to City as Additional Rent any such amounts expended by City within thirty (30) days after written notice is received from City of the amount expended. Alternately, City may require Tenant to immediately deposit with City the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. City may use such deposit to satisfy any claim or lien that is adversely determined against Tenant.

Tenant shall file a valid notice of cessation or notice of completion upon cessation of construction on the Project Improvements for a continuous period of thirty (30) days or more, except in the event such cessation of construction is caused by adverse weather conditions, and shall take all other reasonable steps to forestall the assertion of claims of lien against the Premises.

City shall have the right to post or keep posted on the Premises, or in the immediate vicinity thereof any notices of non- responsibility for any construction, alteration or repair of the Premises by Tenant. Tenant authorizes City , but without any obligation, to record any notices of completion or cessation of labor, or any other notice that City deems necessary or desirable to protect its interest in the Premises.

5.3 Permits, Licenses and Easements. Tenant shall be responsible for obtaining any and all permits, licenses, easements and other authorizations required by any governmental entity with jurisdiction over the Premises and/or Project Improvements with respect to any construction or other work to be performed on the Premises and to grant or cause to be granted all permits, licenses, easements and other governmental authorizations that are necessary for electric, telephone, gas, cable television, communication , water, storm drain, sewer, sewer treatment , drainage, access and such other public or private utilities , facilities or infrastructure

as may be reasonably necessary or desirable in connection with the construction or operation of the Project Improvements. Tenant shall be entitled to tap into any existing lines, facilities and systems of applicable electric, gas, cable, water, sewer, sewer treatment and other utilities serving the Premises or adjacent real property, provided that Tenant remains responsible for payment of such connection fees therefor as are required by the City or any applicable private or public utility, and Tenant shall maintain utility service accounts that are separate from any City utility service accounts.

5.4 Benefits of Project Improvements During Term. Notwithstanding the leasehold interest herein conveyed and anything herein to the contrary, at all times during the Term, beneficial title to the Premises shall be vested in Tenant and Tenant alone shall be entitled to all of the tax attributes of ownershi p. City acknowledges and agrees that any and all depreciation, amortization, profits, losses, income and tax credits for federal or state tax purposes relating to the Project Improvements located on the Premi ses and any and all additions thereto, substitutions therefor, fixtures therein and other property relating thereto shall be deducted or credited exclusively to Tenant during the Term and for the tax years during which the Term begins and ends.
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ARTICLE 6

USE OF PREMISES

6.1 Permitted Uses. Tenant shall use the Premises for the sole and exclusive purpose of constructing, developing, operating and maintaining a senior affordable rental housing community and ancillary uses pursuant to plans approved by the City (the “Permitted Use”), and for no other purpose without the prior written consent of City , which consent City may withhold in its sole and absolute discretion. Tenant acknowledges that City has entered into this Lease and has agreed to the Rent structure contained herein in material reliance on Tenant ’s agreement to permit only those uses described herein. In the event Tenant requests a change in any use described herein, Tenant agrees that City, in its sole and absolute discretion, may withhold consent to such a request or that City properly may condition consent to any change in use on a renegotiation of the Rent structure or amounts. Further, Tenant acknowledges that City has determined that this use is beneficial to City ’s overall governmental purposes and Tenant understands that C ity has no obligation to consent to any other use of all or any part of the Premises. Except as contemplated in the Permitted Use, no other buildings, structures, fences, barriers or other infrastructure shall be built on the Premises without express written consent of City. Notwithstan ding anything to the contrary in this Section 6.1, Tenant’s use of the Premises shall be in compliance with the terms of the City Easement Agreement.

6.2 C
ontinuous Use . City has agreed to accept a fixed Annual Base Rent and has entered into this Lease in reliance on Tenant’s continued operation of the Project for the Permitted Use. Tenant’s failure to operate the Project as required for more than thirty (30) continuous days, or for more than sixty (60) days in any twelve-month period shall be an Event of Default; provided that Tenant shall be excused from operating the Project during any Unavoidable Delay (as defined in Section 17.6).

6.3 Compliance by Tenant with Laws and Governmental Regulations . Tenant, at its sole cost and expense, promptly shall comply with all present and future laws, statutes, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governmental entities , including the City (“ Applicable Law (s)”) which are applicable to the Premises or to the use or manner of use of the Project Improvements by the owners, tenants or occupants thereof, whether or not such law, statute, ordinance, order, rule, regulation or requirement shall necessitate structural changes or i mprovements, or the removal of any encroachments or projections, ornamental, structural or otherwise, onto or over the streets adjacent to the Premises, or onto or over other property contiguous or adjacent thereto.

6.4 T
enant Right to Contest. Tenant, at its sole cost and expense, shall have the right to contest, by appropriate proceedings diligently conducted in good faith in the name of Tenant, the validity or application of any Impositions or Applicable Law. If compliance with any Applicable Law legally may be delayed pending the prosecution of any such proceeding without cost or penalty and without subjecting Landlord to any liability, civil or criminal, Tenant may delay compliance until the final determination of such proceeding.

6.5 C
ompliance with Recorded Documents . Tenant shall comply with all recorded documents that constitute valid encumbrances on the Premises including, without limitation, the City Easement Agreement, any reciprocal easement agreements or covenants, conditions and 456

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restrictions relating to the on-site drainage system; provided, however, that under no circumstances shall a Leasehold Lender (or its successors) be required to comply with any encumbrances on the Premises that are subordinate in priority to its Leasehold Mortgage (including, if or when the Leasehold Lender becomes the Tenant hereunder).

6.6 Nuisance. Tenant shall not use the Premises or the Project Improvements for any unlawful purpose and shall not perform, permit or suffer any act of omission or commission upon or about the Premises or the Project Improvements which would result in a nuisance or a violation of Applicable Law.

ARTICLE 7

SURRENDER AND RIGHT TO REMOVE

7.1 Ownership During Term.

7.1.1 Project Improvements. All Project Improvements shall be and remain the property of Tenant during the Term. City acknowledges and agrees that any and all depreciation and amortization for federal or state tax purposes relating to the Project Improvements, fixtures therein and other property relating thereto will be deducted or credited exclusively to Tenant during the Term and for the tax years during which the Term begins and ends.

7.1.2 P
ersonal Property. Tenant shall provide all personal property reasonably required for normal operation of the Premises to the standard required in this Lease, the Regulatory Agreement and Declaration of Covenants a nd Restrictions (“Regulatory Agreement”) and the AH/DDA. All personal property, furnishings, fixtures and equipment in, on or around the Project, whether installed by Tenant or installed prior to the Commencement Date, which are attached to the Project and can be removed without substantial damage to the Project Improvements or the Premises shall be the personal property of Tenant (the “Personal Property”). At any time during the Term, Tenant shall have the right to remove the Personal Property, provided Tenant shall repair any damage caused by the removal of Personal Property and shall replace the removed Personal Property with property of equal or better quality as and to the extent required for the continued operation of the Project to the standard required in this Lease. Personal Property shall exclude any portion or part of major building components or fixtures necessary for the operation of the basic building systems for the Project (such as floor covering, window coverings, elevators, escalators, chillers, boilers, plumbing, electrical systems, lighting , sanitary fixtures and HVAC systems), which items shall be deemed part of the Project Improvements.

7.2 O
wnership at Lease Termination .

7.2.1 Project Improvements . Upon Lease Termination, the Project Improvements shall unconditionally be and become the property solely of City , without compensation to Tenant and this Lease shall operate as a conveyance and assignment thereof.

Upon Lease Termination, Tenant shall surrender to City the Premises and the Project Improvements in reasonably good condition and repair, reasonable wear and tear excepted, free and clear of all liens, claims, and encumbrances other than liens, claims and encumbrances existing or established as of the Effective Date or other matters consented to by City in writing. The foregoing, however, will be subject to the rights of the residents who are authorized by Tenant to 457

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occupy the Premises (such residents, the “Project Subtenants”) or others in possession pursuant to a sublease with Tenant, provided that such Project Subtenants are not in default thereunder and attorn to City as their lessor. Tenant shall deliver the Quitclaim Deed as provided in Section 2.3. “Reasonable wear and tear”, when used in this Lease, shall mean wear and tear caused by aging, use and other conditions which occurs notwithstanding the application of standards for maintenance, repair and replacement typical of other similar affordable housing projects in the Project area of comparable age. Reasonable wear and tear is not intended, nor shall it be construed, to include items of neglected or deferred maintenance which would have or should have been attended to during the Term had the required standards for maintenance, repair and replacement had been applied.

7.2.2 P
ersonal Property. Any Personal Property of Tenant which remains on the Premises for thirty (30) days after the Lease Termination shall unconditionally be and become the property solely of City without compensation to Tenant and this Lease shall operate as a conveyance and assignment thereof.

7.3 C
ondition of Project Improvements .

7.3.1 Condition of Project at Lease Termination. City has entered this Lease in reliance on the fact that, at Lease Termination, City will receive from Tenant the Project Improvements in the condition required by Section 7.2. In addition to City’s right to inspect pursuant to applicable law and set forth in Section 10.1 and 15.2, at any time during the last twenty- four (24) months of the Term, City may inspect the Project Improvements to confirm that the Project Improvements are being properly maintained as required herein. Following its inspection, City may deliver to Tenant written notification of any portions of the Project Improvements which City has determined are not being properly maintained and Tenant shall promptly comply with the provisions of this Lease regarding such items; provided, the failure of City to inspect or to notify Tenant of any default hereunder shall not be a waiver of City ’s right to enforce Tenant ’s maintenance and repair obligations hereunder.

7.3.2 E
nvironmental Report. Prior to the expiration of the Term, City shall have the right, at its sole cost, to have an environmental report of the Premises prepared that assesses the existence on the Premises of any “Hazardous Materials” (as defined in Article 18).

7.4 S
urvival. The provisions of this Article 7 shall survive Lease Termination.

ARTICLE 8

INSURANCE

8.1 Tenant’s Insurance. During the Term, Tenant shall keep and maintain in force, at no cost or expense to City , the following insurance, all of which shall be provided by companies and/or agencies approved to do business in the State of California:

8.1.1 P remises Insurance. “All risk” insurance covering all risks of physical loss or damage to any of the Improvements, with liability limits of not less than one hundred percent (100%) of the “full replacement value” thereof, which insurance shall be provided by Tenant on the Commencement Date. Such policies shall be broad form and shall include, but shall not be limited to, coverage for fire, extended coverage, vandalism, malicious mischief and storm. Perils 458

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customarily excluded from all risk insurance, e.g., terrorism, earthquake and flood, may be excluded.

8.1.2 General Liability Insurance. Commercial general liability and automobile liability insurance, covering loss or damage resulting from accidents or occurrences on or about or in connection with the Improvements or any work, matters or things under, or in connection with, or related t o this Lease, with personal injury, death and property damage combined single limit liability of not less than Two Million Dollars ($2,000,000) for general liability and One Million Dollars ($1,000,000) for automobile liability for each accident or occurrence. Tenant shall include City as an additional insured on Tenant’s commercial general liability insurance policy and shall provide City a certificate of insurance detailing the coverage limits outlined in this Section 8.1.2 within thirty (30) days after the Commencement Date of this Lease. City shall have the right, upon sixty (60) days’ notice to Tenant, to increase the required amount of General Liability and Auto Liability coverage during the term of this Lease ; provided, however, that (i) any such increased limits shall be commercially reasonable for multifamily senior housing developments in Southern California that are similar in size and amenities to the Project Improvements, (ii) any such limits shall not render the operation of the Project Improvements pursuant to the requirements of the Regulatory Agreement financi ally infeasible as demonstrated by Tenant, and (iii) City may not impose any such increase more than once every five (5) years.

8.1.3 W
orkers’ Compensation Insurance . Tenant shall carry or cause to be carried Workers’ Compensation insurance with limits as required by the State of California.

8.1.4 B uilders’ Risk Insurance. As of the Commencement Date and until completion of construction of the Project Improvements, Tenant shall provide builders’ risk insurance for not less than the value of the construction contract, combined single limit for bodily injury or property damage insuring the interests of City , Tenant and any contractors and subcontractors.

8.2 G
eneral Requirements . All policies described in Article 8 shall include City and Tenant, together with any Leasehold Lenders, as named insureds, as their respective interests may appear. All policies described in Section 8.1 shall contain (a) the agreement of the insurer to give City and each Leasehold Lender, as applicable, at least thirty (30) days’ notice prior to cancellation (ten (10) days for non-payment of premium); (b) an agreement that such policies are primary and non-contributing with any insur ance that may be carried by City ; (c) a provision that no act or omission of Tenant shall affect or limit the obligation of the insurance carrier to pay the amount of any loss sustained; (d) a waiver by the insurer of all rights of subrogation against City and its authorized parties in connection with any loss or damage thereby insured against; and (e) terms providing that any loss covered by such insurance may be adjusted with City, Tenant and the holder of a Leasehold Mortgage, but shall be payable to the holder of any Leasehold Mortgage, who shall agree to receive and disburse all proceeds of such insurance.

8.3 E
vidence of Insurance. City reserves the right to require complete, certified copies of all required insurance policies, including endorsements demonstrating the coverage required by this Lease at any time.
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8.4 Failure to Maintain. If Tenant fails to maintain such insurance, City, at its election, may procure such insurance as may be necessary to comply with the above requirements (but shall not be obligated to procure same), and Tenant agrees to repay to City as Additional Rent the cost of such insurance.

8.5 A cceptability of Insurers . Insurance is to be placed with insurers with a current AM Best’s rating of no less than A: VII.

8.6 L oss Payable Endorsements. Tenant agrees that the names of the Leasehold Lenders may be added to the “Loss Payable Endorsement” of any and all insurance policies required to be carried by Tenant hereunder.

ARTICLE 9

INDEMNIFICATION BY TENANT

9.1 Indemnification by Tenant. Excluding loss, injury or damage to the extent caused by the gross active negligence or willful misconduct of City or any of the “Indemnitees” (as defined below), Tenant shall indemnify, defend and hold harmless City , its officers, agents , employees, volunteers or contractors (collectively, the “Indemnitees”) from and against any and all claims, liability, loss, injury or damage by or on behalf of any person, firm or corporation arising during the Term to the extent arising from any conduct by any party on, management of or any work or thing whatsoever done in or on the Premises or Project Improvements. Such defense shall be provided by the attorneys (i) selected by City, or (ii) at City ’s election, selected by Tenant and reasonably acceptable to City. Further, Tenant shall indemnify and save the Indemnitees harmless against and from any and all claims, liability, loss, injury or damage by or on behalf of any person, firm, or corporation to the extent arising during the Term from (i) any condition of any building, structure or improvement on the Premises, or of any passageways or spaces therein or appurtenant thereto; (ii) Tenant’s breach or default in the performance of any of its covenants or agreements under this Lease; (iii) any negligence of Tenant, or any of its agents, contractors, subcontractors, or employees; (iv) any accident, injury or damage whatsoever caused to any person, firm or corporation occurring during the Term in or on the Premises or the Project Improvements or any passageways or spaces therein or appurtenant thereto; or (v) from the furnishing of labor or materials by Tenant or any of its agents, contractors, subcontractors or employees. Tenant ’s indemnification obligation shall include all costs, attorney’s fees, expenses and liabilities incurred in defending City against any such claim, action or proceeding. If an insurer under insurance required to be maintained by Tenant hereunder shall undertake to defend the City under a reservation of rights with respect to ultimate coverage and City in its reasonable discretion shall deem it necessary to retain independent counsel with respect to such matter, Tenant shall pay the reasonable fees of such counsel. Tenant shall reimburse City for all costs, reasonable attorneys ’ fees, expenses and liabilities i ncurred with respect to any litigation in which Tenant contests its obligation to indemnify, defend and hold harmless City under this Lease and does not prevail in that contest. It is the intent of the parties to this Lease to provide the broadest possible coverage for the City. Tenant’s obligations under this Section shall survive the termination or expiration of this Lease. For purposes of this Section 9.1, the term “volunteers” shall mean persons who are not paid employees of City but are subject to a screening process similar to that used for paid employees.
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ARTICLE 10

REPAIRS, CHANGES, ALTERATIONS AND NEW CONSTRUCTION

10.1 Repairs and Maintenance. Subject to the other provisions of this Lease, Tenant shall keep the Premises at all times in a habitable condition, and in good and habitable operating order, reasonable wear and tear excepted. The standard for maintenance and repair of the Premises shall be the same as for other similar housing projects in Orange County of similar size, and of comparable age and in accordance with all applicable local, state and federal laws. Tenant shall make all necessary repairs and perform all maintenance, interior and exterior, structural and nonstructural, ordinary as well as extraordinary, whether contemplated or not contemplated at the time of signing of this Lease, to keep the Premises to the standard described above in a well maintained and habitable condition. The term “ repairs” shall include replacements or renewals when reasonably necessary to satisfy the above standard, and all repairs made by Tenant shall be at least equal in quality and class to the original work. Tenant waives any rights created under any law now or hereafter in force to make repairs to the Premises at City’s expense. From time to time during the Term, City may enter the Premises during regular business hours upon not less than seventy-two (72) hours’ prior written notice from City to determine if Tenant is in compliance with the requirements of this Article. Notwithstanding the foregoing, however, no such notice is required to enter onto the areas of the Premises improved with the driveway to the public right-of- way, drive aisles or surface parking. If, following any such inspection by City, City delivers notice of any deficiency to Tenant, Tenant shall promptly prepare and deliver to City Tenant’s proposed plan for remedying the indicated deficiencies. City ’s failure to deliver, following any City ’s inspection, any notice of deficiency to Tenant, shall not be deemed to be City’s approval of the then condition of the Premises, nor City’s waiver of any default by Tenant under this Article 10.

10.2 Changes and Alterations. Except as permitted by Section 10.3, Tenant shall not make any changes, alterations, replacements or additions in, to or of the Project Improvements (“Alterations”) without the prior written consent of City , which City shall not unreasonably withhold or delay so long as all the following are complied with by Tenant:
(a) Tenant shall pay all costs and expenses related to the Alterations; (b) The Alteration shall not result in a decrease in the value of the structural improvement to which it is being made;
(c) The Alteration shall be for a use which is permitted hereunder and shall not be materially and adversely inconsistent with the plans approved by City in connection with the Project Improvements;
(d) Tenant shall obtain and pay for, all required permits and authorizations of any federal, state or municipal government or departments of any of them, having jurisdiction.

City shall join in the application for permits or authorizations whenever necessary. City shall incur no liability or expense in connection with its cooperation and Tenant shall reimburse City for City’s out-of-pocket, reasonable attorneys’ fees;
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(e) Any Alteration shall be made in a good and workmanlike manner and in accordance with all applicable permits and authorizations and building and zoning laws and with all other Applicable Laws;
(f) During the period of construction of any Alterations, Tenant shall maintain or cause to be maintained applicable insurance described in Article 8 which policy or policies by endorsement thereto, if not then covered, shall also insure any change, alteration or addition or new construction, including all materials and equipment incorporated in, on or about the Premises (including excavations, foundations and footings) under a broad form (or equivalent) builders’ risk form.

10.3 E
xceptions to Consent Requirement . The foregoing notwithstanding, Tenant shall not be required to obtain City ’s prior written consent to any Alterations so long as (i) the Alteration is non -structural, and (ii) the Alteration has a cost of less than $250,000, provided, however, that nothing contained herein shall relieve Tennant from the obligation to first obtain any and all required permits and inspections from City and any other governmental entity with jurisdiction, pursuant to Applicable Law.

10.4 No
Right to Demolish . Notwithstanding any other provisions of this Article 10 and except as otherwise permitted in this Lease, Tenant shall have no right to demolish any Project Improvement, once built, unless Tenant shall have received the prior written consent of City, which City may withhold in its sole and absolute discretion, it being agreed that City has entered into this Lease in material reliance on Tenant’s covenants to operate and maintain the Project Improvements in accordance with the provisions of this Lease.

ARTICLE 11

RECORD KEEPING

11.1 Record Keeping . Tenant shall keep and maintain full and complete books of account and other records reflecting the results of operations of the Project in accordance with accounting practices and principles reasonably acceptable to City and consistently applied.

ARTICLE 12

DAMAGE AND DESTRUCTION

12.1 Damage or Destruction. If the Project Improvements are damaged or destroyed, then except as otherwise provided in this Article 12, Tenant shall restore and rebuild the Project Improvements as nearly as practicable to their condition immediately prior to such damage or destruction or with such changes or alterations as may be in conformity with the provisions of this Lease relating t o the changes or alterations. To the extent sufficient insurance proceeds are available therefor, as reasonably determined by Tenant, and subject to the terms of any Leasehold Mortgage, upon a damage or destruction, all insurance proceeds paid in respect of the damage or destruction shall be applied to the payment of the costs of the restoration required to be performed by Tenant pursuant to this Lease. Any insurance proceeds made available to Tenant shall be held in trust by a financial institution agreed upon by City and Tenant or, if required by a Leasehold Lender, by any Leasehold Lender at the election of the Leasehold Lender with the most senior Leasehold Mortgage (the “ Senior Lender”) (as applicable, the “Insurance Trustee”), with the 462

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costs of such trust to be a first charge against the insurance proceeds. After completion of the restoration of the Project Improvements, and expiration of all lien periods without any lien being filed, any remaining insurance proceeds shall be paid to the Senior Lender to be applied as provided in the Leasehold Mortgage, and once such lien is satisfied, thereafter to the holder of the Leasehold Mortgage next in lien priority until each encumbrance is satisfied, and, upon payment in full of the Leasehold Mortgages, the balance shall be payable to Tenant.

Notwithstanding the foregoing, in the event there is any damage or destruction to any portion of the Project Improvements such that: (a) there are not sufficient proceeds to pay for the costs to restore the Project Improvements, as determined by Tenant, (b) in the reasonable opinion of Tenant, the undamaged portion of the Project Improvements cannot be completed or operated on an economically feasible basis, and (c) no feasible source of third party financing for restoration reasonably acceptable to Tenant is available; then Tenant may, with the prior written consent of all Leasehold Lenders, terminate this Lease as of a date that is not less than ninety (90) days after the date of such notice. In the event this Lease is terminated in accordance with the preceding sentence, Tenant shall, at Tenant’s sole cost, either raze the damaged portion of the Project Improvements and remove any debris relating thereto, or repair the Project Improvements in a manner sufficient to cause the Project Improvements to be in a safe condition in compliance with applicable laws and other applicable governmental requirements, and following the completion thereof, Tenant shall surrender possession of the Premises to City immediately and the remaining insurance proceeds not used to raze or repair the Project Improvements shall be paid to the Senior Lender to be applied as provided in the Leasehold Mortgage, and once such lien is satisfied, thereafter to the holder of the Leasehold Mortgage next in lien priority until each encumbrance is satisfied, and, upon payment in full of the Leasehold Mortgages, the balance shall be assigned to City.

12.2 Damage or Destruction Near End of Term. If, during the last seven (7) years of the Term, the Project Improvements shall be damaged or destroyed, then, subject to the prior written consent of each Leasehold Lender, Tenant shall have the option, to be exercised within one hundred twenty (120) days after such damage or destruction:
(a) to repair or restore the Project Improvements as provided in this Article 12; or
(b) subject to the rights of Leasehold Lenders, to terminate this Lease by notice to City, which termination shall be deemed to be effective as of the date of the damage or destruction. If Tenant terminates this Lease pursuant to this Section 12.2, Tenant shall surrender possession of the Premises to City immediately and assign to City (or, if same has already been received by Tenant, pay to City ) all of its right, title and interest in and to the proceeds from Tenant’s insurance upon the Premises, subject to the prior rights of any Leasehold Lender therein.

12.3 Restoration. Tenant shall carry out the restoration to full completion as soon as practicable. Tenant shall commence work on the restoration of any damage or destruction no later than the latest of: (a) one hundred twenty (120) days following the damage or destruction, (b) the date Tenant receives insurance proceeds, and (c) the date on which all applicable approvals have 463

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been obtained to commence the restoration work, provided, however, that Tenant shall commence to seek all applicable approvals within one hundred eigh ty (180) days following the damage or destruction.

12.3.1 Disbursement of Funds. The Insurance Trustee shall disburse funds only on a periodic basis approved by City and Tenant and only upon receipt of invoices and other documentation, certified as correct by Tenant ’s architect, evidencing satisfactory completion of the work for which payment is requested ( “Payment Request”). Further, the Insurance Trustee shall not disburse any funds unless the payment request is accompanied by (i) signed conditional waiver and release on progress payment in form complying with California law relating to all labor and materials described in the Payment Request and (ii) signed unconditional waiver and release upon progress payment in form complying with California law releasing all claims for labor and materials described in the immediately preceding Payment Request.

12.4 N
otice Required . In the event of material damage to or destruction of the Project Improvements, Tenant shall promptly give City notice of such occurrence and take all actions reasonably required to protect against hazards caused by such damage or destruction. For purposes of this Article 12, damage or destruction shall be deemed to be material if the estimated cost to repair equals or exceeds $100,000.

12.5 R ight to Participate in Settlement. City , Tenant, and each Leasehold Lender shall have the right to participate in the negotiation, settlement or compromise of any insurance claims made against Tenant’s insurance policies.

12.6 S
urvival. City ’s and Tenant ’s rights and obligations under this Article 12, including their rights to receive proceeds, shall survive any termination of this Lease.

ARTICLE 13

EMINENT DOMAIN

13.1 Eminent Domain.

13.1.1 Definitions. The following definitions shall apply in construing the provisions of this Article 13:

13.1.1.1 Award. “Award” means all compensation, damages or interest, or any combination thereof, paid or awarded for the Taking, whether pursuant to judgment, by agreement, or otherwise.

13.1.1.2 N
otice of Intended Taking. “ Notice of Intended Taking” means any notice or notification on which a reasonably prudent person would rely and would interpret as expressing an existing intention of Taking as distinguished from a mere preliminary inquiry or proposal. It includes, but is not limited to, the service of a condemnation summons and complaint on a party to this Lease. The notice is considered to have been received when a party to this Lease receives from the condemning agency or entity a written notice of intent to take.

13.1.1.3 P
artial Taking . “Partial Taking” means any Taking that is neither a Total Taking nor a Substantial Taking.
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13.1.1.4 Substantial Taking. “ Substantial Taking” means the Taking of so much of the Premises that the remaining portion thereof would not be economically and feasibly usable by Tenant, as reasonably determined by Tenant for the then existing uses and purposes of the Premises, but shall exclude a Temporary Taking.

13.1.1.5 T
aking. “Taking” means any taking of or damage to, including severance damage, all or any part of the Premises or any interest therein by the exercise of the power of eminent domain, or by inverse condemnation, or a voluntary sale, transfer or conveyance under threat of condemnation in avoidance of the exercise of the power of eminent domain or while condemnation proceedings are pending.

13.1.1.6 T
emporary Taking. “ Temporary Taking” means the Taking of any interest in the Premises for a term certain which term is specified at the time of Taking.

Temporary Taking does not include a Taking which is to last for an indefinite period or a Taking which will terminate only upon the happeni ng of a specified event unless it can be determined at the time of the Taking substantially when such event will occur. If a Taking for an indefinite term should take place, it shall be treated as a Total, Substantial or Partial Taking in accordance with the definitions set forth herein.

13.1.1.7 T
otal Taking. “ Total Taking” means the Taking of the fee title to all, or substantially all, of the Premises.

13.1.2 N otice . The party receiving any notice of the kind specified below shall promptly give the other party written notice and a copy of any:
(a) Notice of Intended Taking;
(b) Service of any legal process relating to condemnation of all or any portion of the Premises;
(c) Notice in connection with any proceedings or negotiations with respect to such a condemnation; or
(d) Notice of intent or willingness to make or negotiate a private purchase, sale or transfer in lieu of condemnation.

City and Tenant, and any of their respective secured lenders, each shall have the right to represent its respective interest in each proceeding or negotiation with respect to a Taking or intended Taking and to make full proof of their respective claims. No agreement, settlement, sale or transfer to or with the condemning authority shall be made without the mutual agreement of City and Tenant and their secured lenders. City and Tenant each agree to sign, acknowledge and deliver to the other any instruments that may be reasonably required to effectuate or facilitate the provisions of this Lease relating to condemnation.

13.1.3 Total or Substantial Taking. In the event of a Total Taking or Substantial Taking, this Lease shall terminate, and Tenant’s interest in this Lease and all obligations of Tenant subsequently accruing hereunder shall cease, as of the first to occur of (i) the date of the vesting of title in the condemning authority or (ii) the date actual physical possession of all or part of the 465

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Premises is taken by the condemning authority prior to the date of vesting of title. Tenant ’s obligations to pay Annual Base Rent and Additional Rent shall terminate as of such date.

13.1.4 Partial Taking. In the event of a Partial Taking, this Lease shall remain in full force and effect, covering the remainder of the Premises, except that this Lease shall be deemed amended such that the definition of the “ Premises” shall include only that portion of the land described in Exhibit A attached that is not taken. There shall be no adjustment to Annual Base Rent or the Term.

In the event of a Partial Taking, Tenant, at its sole cost and expense subject to (and only to the extent of) receipt of an award by Tenant from the Taking agency specifically earmarked for severance damages, and Tenant ’s offset against such specific award of all costs incurred in procuring such award, shall restore the Project Improvements to a complete architectural unit, consistent with the requirements of this Lease, to the maximum extent feasible.

13.2 Participation in Settlement Negotiations . City , Tenant, and each Leasehold Lender shall have the right to participate in the negotiation, settlement or compromise of all awards, except for Temporary Taking awards.

13.3 S
urvival . City ’s and Tenant’s rights and obligations under this Article 13, including their rights to receive proceeds, shall survive any termination of this Lease.

13.4 Awa rd . Subject to the rights of Leasehold Lenders (as defined in Article 16 below), if there is a Taking, whether a Temporary Taking, Substantial Taking, Total Taking or Partial Taking, City and Tenant shall be entitled to receive and retain such separate awards and portions of lump sum awards as may be allocated to their respective interests in any condemnation proceedings, or as may be otherwise agreed, taking into consideration the fact that City’s interest in the Premises is limited to the fee interest in the Premises (exclusive of the Project Improvements), as encumbered by this Lease and the City’s interests pursuant to the City Easement Agreement, and, upon the expiration of the Term, a reversionary interest in the Premises and the Project Improvements. If the Premises shall be restored as is contemplated in Section 13.1.4, Tenant shall be entitled to recover the costs and expenses incurred in such restoration out of any Award. Thereafter, if the condemning authority does not make separate Awards, City and Tenant agree that any Award will be allocated on a proportionate basis. If City and Tenant are unable to agree as to amounts that are to be allocated to the respective interests of each party, then each party shall select an independent M.A.I. real estate appraiser (an “ Appraiser”). Each Appraiser shall separately determine the amount of the balance of the Award that is to be allocated to the interests of each party. If the percentage of the balance of the Award each Appraiser allocates to City (a) are within ten percent (10%) of each other, the two (2) allocations shall be averaged, and such average shall be the final allocation of the Award, or (b) are not within ten percent (10%) of each other, the two (2) Appraisers shall then select a third Appraiser, who shall independently allocate the Award between City and Tenant, and the middle of such three allocations shall be the final allocation of the Award. Notwithstanding the foregoing, if required by a Leasehold Lender, Tenant’s proportionate share of the Award shall be distributed to the Senior Lender to be disbursed in accordance with its Leasehold Mortgage, and once such lien is satisfied, thereafter to the holder of the Leasehold Mortgage next in lien priority until each encumbrance is satisfied, and, upon payment in full of the Leasehold Mortgages, the balance shall be payable to Tenant. 466

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Notwithstanding the foregoing, in no event shall the Award paid to the Senior Lender be less than the lesser of (i) all amounts owing under the Leasehold Mortgage, and (ii) the total Award, minus the value of the land that was taken, as encumbered by this Lease and any regulatory agreement recorded against Tenant’s leasehold interest in the Premises.

13.5 City as Condemnor. If City is the condemnor, then (i) City shall have no right to participate in the condemnation action in connection with its status as the landlord under this \Lease on behalf of City as the owner in fee of the Premises, and (ii) the entire award shall be paid to Tenant.

ARTICLE 14

ASSIGNMENT, TRANSFER, SUBLETTING

14.1 Restrictions on Transfer by Tenant. Tenant acknowledges that the qualifications and identity of Tenant are of particular concern to City (i) in view of the importance of the development of the Premises to City and the general welfare of the community; (ii) because of City’s desire that the Premises be operated by a tenant with demonstrated successful experience and success in constructing, managing and operating affordable housing in Orange County; (iii) because of the City ’s desire for the Project Improve ments to be a high quality affordable housing project; and (iv) in light of City’s desire for the operation on the Premises to be compatible with planned adjacent residential uses and City’s affordable housing goals and objectives. Tenant further recognizes that it is because of Tenant ’s (and/or Tenant ’s partners ’) qualifications, reputation, experience and identity that City has entered into this Lease with Tenant. Tenant acknowledges that the restrictions on Transfer contained in this Article 14 are reasonable. For reference purposes, Tenant’s right to grant security interests for the benefit of Leasehold Lenders securing loans for the Project is set forth in Article 16.

14.2 Definition of Transfer . “ Transfer” means any of the events described below, whether the same occur voluntarily, involuntarily, by operation of law, or otherwise:

14.2.1 T ransfer of Interest in the Premises or Project. Tenant ’s assignment, sublease, transfer, or conveyance of all, or any portion, of its interest in the Premises, the Project Improvements or this Lease.

14.2.2 T
ransfer of Shareholder ’s Interest in Tenant . If Tenant is a corporation, the assignment, conveyance or transfer by a controlling shareholder of a controlling interest in Tenant.

14.2.3 T
ransfer of Interest in Tenant ’s Partners/Members . If Tenant is a partnership or a limited liability company, the transfer of any controlling interest in any general partner (but not any limited partner) manager, or managing member (but not any other member) of Tenant.

14.3 N
o Transfer Without Consent; Notices . Except as otherwise provided in Section 14.4.3 or Article 15, Tenant shall not make or permit any Transfer except with City’s prior written consent, which consent shall be given in City’s sole and absolute discretion.

14.4 P rocedure.
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14.4.1 Transfer Request. With respect to each Transfer as to which City ’s approval is required hereby, Tenant shall send to City written request for City’s approval of the Transfer (a “Transfer Request”) specifying the name and address of the proposed transferee and its legal composition (if applicable). Each Transfer Request shall be accompanied by all of the following:
(a) An audited financial statement (or if no audited financial statement is available, a reviewed financial statement) of the proposed transferee (or its sponsors) for the three most recent calendar or fiscal years prepared in accordance with generally accepted accounting procedures by a nationally or regionally recognized certified public accounting firm, certified as true and correct by the proposed transferee (or its sponsors), sufficiently current and detailed to permit evaluation of the proposed transferee’s (or its sponsors’) assets, liabilities and net worth; (b) A description of the nature of the interest proposed to be transferred, the portion or portions of the Premises affected by the Transfer, and the proposed effective date of such Transfer;
(c) If required, a true and complete copy of the proposed Assumption Agreement described in Section 14.8;
(d) A complete history of the proposed transferee (or its sponsor) describing its background, its current business operations and the background of the principals or personnel to be involved in the day to day operation of the Premises and stating whether the proposed transferee ever filed for bankruptcy or had projects that were foreclosed; (e) A description of any substantial litigation in which the transferee (or its sponsor) has been involved within the preceding sixty (60) months; (f) A description of all consideration to be given on account of the Transfer; and
(g) Any such other information as reasonably requested by City within ten (10) business days following the receipt of the above information, in order for City to make an informed decision whether or not to approve or disapprove the Transfer.

14.4.2 Approval of City . Within thirty (30) days following receipt of all the information referred to in Section 14.4.1, City shall approve or disapprove, in its sole discretion, a Transfer Request, and if City disapproves the Transfer Request, it shall provide a written statement of the reasons for the disapproval. If City fails to give Tenant written notice of its approval or disapproval within the thirty (30) day period, City will be deemed to have approved the Transfer Request. Tenant shall pay the reasonable fees and charges of any accountants, attorneys and other consultants hired by City (but not any overhead of City staff) to review and assess any proposed transferee.

14.4.3 E
xceptions to Consent Requirement. Notwithstanding anything to the contrary in this Lease, Tenant shall not be required to obtain City ’s prior consent (a) to enter into leases, subleases or occupancy agreements with occupants of residential units in the Project Improvements, provided the same otherwise comply with this Lease; (b) to a Transfer to an entity 468

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which is a wholly owned subsidiary of Tenant or a manager of Tenant ’s general partner, or to a limited partnership or limited liability company formed for the tax credit syndication of the Project Improvements, where Tenant or its affiliated nonprofit public benefit corporation is the sole general partner or sole manager of that entity, and following the Transfer, the assignee will comply with all requirements of this Lease; (c) a transfer of Tenant ’s limited partner or non-managing member interests to an a ffiliate pursuant to Tenant ’s partnership or operating agreement; (d) removal of a general partner or manager of the Tenant for cause under the terms of the Tenant’s partnership or operating agreement and replacement thereof by Tenant’s special limited partner on a temporary basis or, another entity reasonably acceptable to City , so long as the general partner is replaced within 180 days with an organization that meets the requirements of Revenue and Taxation Code Section 214 for purposes of the welfare exe mption; (e) transfers of the general partnership or manager ’s interest in Tenant to Jamboree Housing Corporation, a California nonprofit public benefit corporation ( “JHC”) or to another nonprofit public benefit corporation approved in advance by City; or (f) execution and delivery of a purchase option and right of first refusal to acquire Tenant’s interest in the Premises in favor of JHC or another nonprofit affiliate thereof in connection with the tax credit syndication of the Project where such agreement has been previously approved by City, in City’s reasonable discretion, in writing. In order for any Transfer described in this Section to be exempt from the requirement for City ’s consent, at least thirty (30) days before the effective Transfer date: (i) Tenant shall notify City of the pending Transfer; (ii) Tenant shall provide City with all information City reasonably requests regarding the transferee; (iii) Tenant shall deliver to City a copy of the proposed transfer documents in substantially final form; and (iv) Tenant shall deliver to City for reasonable approval the proposed Assumption Agreement described in Section 14.8. Within five (5) business days after the Transfer date, Tenant shall deliver to City fully executed copies of all transfer documents and the Assumption Agreement.

14.5 L imitations .

14.5.1 No Relief from Liability. If City consents to a Transfer, Tenant shall not be released from its liability for the performance of any of Tenant ’s obligations under this Lease occurring prior to the Transfer. If Tenant makes a Transfer for which City ’s consent is not required, Tenant shall not be released from its liability for the performance of any of Tenant ’s obligations under this Lease occurring prior to the Transfer.

14.5.2 N o Consent If Bankruptcy. In no event shall City be required to consent, or be deemed to consent, to a Transfer to a party then subject to any proceedings under any insolvency, bankruptcy or similar laws.

14.5.3 C
onsent Not a Waiver . City ’s consent to any one Transfer shall not constitute a waiver of the provisions of this Article 14 with regard to any subsequent Transfer.

14.5.4 Threshold Criteria for Transfer. Although City may withhold its consent to a proposed Transfer for which City consent is required on any reasonable basis, City shall be deemed to be reasonable in withholding its consent to a proposed Transfer for which City consent is required if any of the following are not satisfied:
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(a) In the case of any proposed Transfer (i) involving Tenant ’s assignment, transfer or conveyance of all or any portion of its interest in the Premises, the Project or this Lease, or (ii) involving the replacement of the Tenant’s general partner, manager, or managing member, as the case may be, Tenant delivers to City an audited financial statement (or if no audited financial statement is available, a reviewed financial statement) of the proposed transferee (or its sponsors) for the three most recent calendar or fiscal years prepared in accordance with generally accepted accounting principles by a nationally or regionally recognized certified accounting firm demonstrating that the proposed transferee (or its sponsors) have sufficient financial ability to own, operate and manage the Project;
(b) In the case of any proposed Transfer involving Tenant ’s assignment, transfer or conveyance of all or any portion of its interest in the Premises, the Project or this Lease, the proposed transferee (or its sponsors) shall have a reputation and experience comparable to the transferor’s reputation and experience constructing, operating and managing affordable housing projects in the Orange County area;
(c) The use of the Premises after the Transfer shall remain unchanged.

14.6 Indemnity. Tenant hereby agrees to indemnify and defend, with the attorneys (i) selected by City, or (ii) at City ’s election, selected by Tenant and reasonably acceptable to City, against, and hold it harmless from, any loss (including penalties, fines, reasonable counsel fees and disbursements) in connection with a claim or action by a transferee or other party which arises out of Tenant ’s actions or failure to act with respect to a Transfer including Tenant ’s breach or default under any agreement relating to the Transfer. Tenant also hereby agrees to indemnify and defend with the attorneys (i) selected by City, or (ii) at City ’s election, selected by Tenant and reasonably acceptable to City , City against, and hold it harmless from, any loss (including penalties, fines, reasonable counsel fees and disbursements) arising out of a claim or action by a subtenant or otherwise arising in connection with subletting. These indemnities shall not apply to any loss to the extent caused by City ’s default under this Lease or City ’s gross active negligence or willful misconduct.

14.7 I
nvoluntary and Other Transfers . Without limiting any other restrictions on Transfer contained in this Lease, no interest of Tenant in this Lease, the Premises or the Project Improvements shall be assignable in the following manner:
(a) Under an order of relief filed, or a plan of reorganization confirmed, for or concerning Tenant by a bankruptcy court of competent jurisdiction under the federal bankruptcy act or under the laws of the State of California, whereby any interest in this Lease, the Premises or the Project Improvements is assigned to any party which does not qualify as an approved transferee pursuant to this Lease unless such order is filed or such plan is confirmed in connection with an involuntary proceeding brought against T enant and Tenant reacquires such transferred interest within ninety (90) days after the date such order is filed or such plan is confirmed; (b) If Tenant assigns substantially all of its assets for the benefit of its creditors; (c) If an order of attachment is issued by a court of competent jurisdiction, whereby any interest in this Lease, the Premises or the Project Improvements or substantially all 470

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of Tenant’s assets are attached by its creditors and such order of attachment is not stayed within ninety (90) days after the date it is issued; or
(d) If a lien against any interest of Tenant in this Lease, the Premises or the Project Improvements, is foreclosed so that such interest is vested in a party other than Tenant, except under a Leasehold Mortgage.

14.8 Assumption Agreement. No Transfer involving Tenant’s assignment, transfer or conveyance of all or any portion of its interest in this Lease, whether an Approved Transfer or one to which City has consented, shall be effective until City shall have received (where appropriate) an assignment and assumption agreement, executed by the transferor and the proposed transferee, in form reasonably acceptable to City (“Assumption Agreement”).

ARTICLE 15

BREACHES, REMEDIES AND TERMINATION

15.1 Event of Default. Tenant shall be in default under this Lease on the occurrence of any of the following (each, an “Event of Default”):

15.1.1 M onetary Obligation. Tenant fails to pay any amount owing under this Lease when due, and such failure shall continue for thirty (30) days after Tenant receives Notice of Breach (as defined in Section 15.4.1); or

15.1.2 Bankruptcy. Tenant files a voluntary petition in bankruptcy or files any petition or answer seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other relief for debtors; or seeks or consents to or acquiesces in the appointment of any trustee, receiver or liquidator of Tenant or of all or any substantial part of its property, or of any or all of the royalties, revenues, rents, issues or profits thereof, or makes any general assignment for the benefit of creditors, or Tenant admits in writing its inability to pay its debts generally as they become due; or

15.1.3 R
eorganization . A court of competent jurisdiction shall enter an order, judgment or decree approving a petition filed against Tenant seeking any reorganization, dissolution or similar relief under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other relief for debtors, unless the order, judgment or decree is vacated within one hundred twenty (120) days after the first date of entry thereof, or any trustee receiver or liquidator of Tenant or of all or any substantial part of its property, or of any or all of the royalties, revenues, rents, issues or profits thereof shall be appointed without the consent or acquiescence of Tenant (except under a Leasehold Mortgage), unless such appointment is vacated within one hundred twenty (120) days after the first date of entry thereof, (which one hundred twenty (120) day period shall be extended in all cases during any period Tenant is diligently pursuing a bona fide appeal); or

15.1.4 A
ttachment . A writ of execution or attachment or any similar process shall be issued or levied against all or any part of the interest of Tenant in the Premises, unless the execution, attachment or similar process is released, bonded, satisfied, or vacated or stayed within 471

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one hundred twenty (120) days after the earlier of (a) Tenant’s receipt of a Notice of Breach, or (b) Tenant’s actual knowledge of its entry or levy, (which one hundred twenty (120) day period shall be extended during any period in which Tenant is diligently pursuing a bona fide appeal); or

15.1.5 Continuous Operation. Tenant fails to continuously maintain sufficient inventory and personnel on the Premises to operate the facility in accordance with Section 6.1, and other additional permitted uses in accordance with Section 6.2, and such failure is not cured within sixty (60) days after the earlier of (a) Tenant’s receipt of a Notice of Breach, or (b) Tenant’s actual knowledge of such failure.

15.1.6 F ailure to Carry Insurance. Tenant fails to continuously maintain insurance coverage in accordance with Article 8 or fails to deliver a copy of a policy of insurance complying with the requirements of Article 8, and Tenant fails to remedy the default within fifteen (15) days after Tenant receives Notice of Breach;

15.1.7 T ransfer. Tenant Transfers all or any portion of Tenant ’s interest in the Premises, the Project Improvements or in this Lease in violation of the provisions of Article 14.

15.1.8 Liens; Encumbrances. Tenant fails to pay real estate taxes or assessments on the Premises prior to delinquency, or places thereon any encumbrance or lien unauthorized by this Lease, including without limitation any Leasehold Mortgage and fails to discharge the same within thirty (30) days.

15.1.9 Non-Monetary Obligations. Subject to Unavoidable Delays, Tenant is in default of any other terms, provisions and covenants contained herein, and Tenant shall have failed to cure such default within sixty (60) days after Tenant receives Notice of Breach; provided, however, that if such a default with due diligence cannot be cured within sixty (60) days, then it shall not be an Event of Default unless Tenant fails to commence within sixty (60) days after it receives the Notice of Breach to cure the same or, thereafter, having begun to cure fails to prosecute the curing of such default continuously, with due diligence.

15.2 E
ntry and Inspection. City reserves and shall have the right upon not less than seventy-two (72) hours’ prior written notice, or at any time in the case of emergency, to enter the Premises for the purpose of viewing and ascertaining the condition of the same, or to protect its interest in the Premises, or to inspect the operations and management conducted t hereon.

Notwithstanding the foregoing, however, no such notice is required to enter onto the areas of the Premises improved with the driveway to the public right-of-way, drive aisles or surface parking.

The rights reserved in this Section shall not create any obligation of any kind upon City.

15.3 N
otice and Opportunity to Cure .

15.3.1 Notice of Breach. If required by another provision of this Lease, a party shall deliver to the non- performing party a written request to perform or remedy (the “Notice of Breach”), stating clearly the nature of the obligation which such non- performing party has failed to perform. If Tenant is afforded a cure period for such failure, the Notice of Breach shall state the applicable cure period, if any, provided hereunder. 472

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15.3.2 Failure to Give Notice of Breach . The failure of a party to give, or delay in giving, Notice of Breach shall not constitute a waiver of any obligation, requirement or covenant required to be performed hereunder. Except as otherwise expressly provided in this Lease, any failures or delays by either party in asserting any rights and remedies as to any breach shall not operate as a waiver of any breach or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive such party of the right to institute and maintain any actions or proceedings which it may deem appropriate to protect, assert or enforce its rights or remedies.

15.4 R
emedies Upon Default .

15.4.1 City’s Remedies . If an Event of Default occurs, City shall have the following remedies, in addition to all other rights and remedies provided by law or otherwise provided in this Lease to which City may resort cumulatively or in the alternative:

15.4.1.1 C
ity Right to Continue Lease. City may elect to keep this Lease in effect and enforce by an action at law or in equity all of its rights and remedies under this Lease, including (i) the right to recover Rent as it comes due by appropriate legal action, and (ii) the right to make payments required of Tenant or perform Tenant ’s obligations and be reimbursed by Tenant for the cost thereof with interest as provided in Section 15.9. For so long as this Lease continues in effect, City may enforce all of City’s rights and remedies under this Lease, including the right to recover all Rent as it becomes due hereunder.

15.4.1.2 T erminate . Subject to the rights of the Leasehold Lenders, City may terminate this Lease by giving Tenant written notice of termination, in which event this Lease shall terminate on the date set forth for termination in such notice. Any termination under this Article 15 shall not relieve Tenant from its obligation to pay sums then due City or from any claim against Tenant for damage or rent previously accrued or then accruing. Upon Lease Termination hereunder, in accordance with applicable law City may re-enter the Premises and take possession thereof, and, except as otherwise provided herein, remove all persons and property therefrom, and store such property at Tenant ’s risk and for Tenant ’s account, and Tenant shall have no further claim thereon or hereunder. In no event shall this Lease be treated as an asset of Tenant after any final adjudication in bankruptcy except at City’s option so to treat the same but no trustee, receiver, or liquidator of Tenant shall have any right to disaffirm this Lease.

15.4.1.3 N
o Deemed Termination. This Lease shall not terminate unless City, at City ’s option but subject to the rights of the Leasehold Lenders, elects to terminate Tenant’s right to possession or, at City ’s further option, by the giving of any written notice (including any notice preliminary or prerequisite to the bringing of legal proceedings in unlawful detainer) to terminate Tenant’s right to possession. For the purposes of this Lease, the following shall not constitute termination of Tenant ’s right to possess ion: (i) acts of maintenance or preservation or efforts to relet the Premises; or (ii) the appointment of a receiver upon initiative of City to protect City’s interest under this Lease; or (iii) any other action by City intended to mitigate the adverse effects of any breach of this Lease by Tenant.

15.4.1.4 C
ity Right to Perform. Upon the occurrence and continuance of an Event of Default, and without waiving or releasing Tenant from any obligation of Tenant 473

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hereunder, City may (but shall not be required to) make such payment or perform such act on Tenant’s part to be made or performed under this Lease, or pay for and maintain such insurance coverage required under Article 8, and City may enter the Premises for such purpose and take all such action thereon as may be reasonably necessary therefor. All sums paid by City and all costs and expenses incurred by City in connection with the performance of any such act (together with interest thereon at the Default Rate (as defined below) from the respective dates of City’s making until paid) shall be paid within thirty (30) days after receipt of City ’s demand therefor and documentation of costs incurred.

15.4.2 D amages Upon Termination. If City terminates this Lease, City may recover from Tenant damages in an amount as set forth in California Civil Code s ection 1951.2 (“CC § 1951.2”) as in effect on the Term Commencement Date. For purposes of computing damages pursuant to CC § 1951.2, the term “rent” means the Annual Base Rent and Additional Rent. City’s CC § 1951.2 damages shall include:
(a) The worth at the time of award of the unpaid rent which is due, owing and unpaid by Tenant to City at the time of termination;
(b) The worth at the time of award of the amount by which the unpaid rent which would have come due after termination until the time of award exceeds the amount of rental loss that Tenant proves could have been reasonably avoided; (c) The worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of rental loss which Tenant proves could be reasonably avoided; and
(d) All other amounts necessary to compensate City for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things are likely to result therefrom, including (i) expenses for cleaning, repairing and restoring the Premises for re -letting; (ii) and all costs (including attorneys’ fees) of repossession; and (iii) all costs of removing persons or property from the Premises.

All computations of the worth at the time of award of amounts recoverable by City under subparagraphs (a), (b), and (d) above shall be computed by allowing interest at the Default Rate. For purposes of this Lease, the “Default Rate” shall equal the rate of interest most recently announced by Bank of America, N.T. & S.A., (or any successor bank) at its principal office in San Francisco as its “reference rate” serving as the basis upon which effective rates of interest are calculated for those transactions making reference thereto, but in no event in excess of the maximum rate of interest permitted under applicable law.

15.4.3 Injunction. Upon the occurrence of an Event of Default, City shall have the right to petition a court of competent jurisdiction for injunctive relief , in addition to all other remedies available to City under Applicable Law. Tenant’s failure for any reason to comply with an injunction ordered by a court shall constitute an Event of Default under this Lease.

15.4.4 R ight to Specific Performance. Upon the occurrence of an Event of Default, City shall have the right to commence an action against Tenant for specific performance. 474

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Tenant’s failure, for any reason, to comply with specific performance ordered by a court shall constitute an Event of Default under this Lease.

15.4.5 Right to Receiver . Following the occurrence of an Event of Default, if Tenant fails after receipt of a Notice of Breach to cure the default within any cure period set forth in the Notice of Breach, City, at its option but subject to the rights of Leasehold Lenders, may have a receiver appointed to take possession of Tenant ’s interest in the Premises, the Project Improvements and the Project with power in the receiver (i) to administer Tenant’s interest in the Premises, the Project Improvements and the Project; (ii) to collect all funds available in connection with the operation of the Premises, the Project Improvements and the Project; (iii) to perform all other acts consistent with Tenant’s obligations under this Lease, as the court deems proper; (iv) to apply the rents and any other sums received (less costs and expenses of operation and collection) to Rents due hereunder (and City shall not be responsible to any person for the collection or non collection of any such rents or income); (v) to take possession of the Tenant’s leasehold estate and the Project Improvements, manage and operate the Project Improvements and Tenant ’s business thereon, and take possession of and use a Tenant’s books of accounts and financial records and its property managers or representatives related to the Project Improvements; and (vi) otherwise take any and all actions with respect to the Project Improvements as may be permitted under applicable law or this Lease. Such rights to appoint a receiver shall be subject to and subordinate to the right of a Leasehold Lender to appoint a receiver.

15.5 N
o Election of Remedies . The rights given in this Article 15 to receive, collect or sue for any rent or rents, moneys or payments, or to enforce the terms, provisions and conditions of this Lease, or to prevent the breach or non-observance thereof, or the exercise of any such right or of any other right or remedy hereunder, shall not in any way affect or impair or toll the right or power of City upon the conditions and subject to the provisions in this Lease to terminate Tenant’s right of possession because of any Event of Default.

15.6 S
urvival of Obligations . All rights of indemnification in this Lease shall survive Lease Termination. All obligations that accrue prior to Lease Termination likewise shall survive Lease Termination.

15.7 N
o Cure After Termination . No receipt of money by City from Tenant after the commencement of any suit or after final judgment for possession of the Project, shall renew, reinstate, continue or extend the right of Tenant to remain in possession of the Premises.

15.8 I
nterest on Past Due Obligations; Late Charge . Any amount due from Tenant to City hereunder which is not paid within thirty (30) days after receipt of a Notice of Breach shall bear interest at the Default Rate unless otherwise specifically provided herein, but the payment of such interest shall not excuse or cure any default by Tenant under this Lease. In addition, Tenant acknowledges that late payment by Tenant to City of Annual Base Rent or any other amount due City from Tenant will cause City to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impractical to fix. Such costs include, without limitation, processing and accounting charges. Further, Tenant acknowledges that City intends to make commitments to third parties based on the timely payment by Tenant of sums due hereunder.

Therefore, if any payment due from Tenant is not received by City within thirty (30) days after receipt of a Notice of Breach, Tenant shall pay to City an additional sum of five percent (5%) of 475

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the overdue payment as a late charge. The parties agree that this late charge represents a fair and reasonable estimate of the costs that City will incur by reason of late payment by Tenant.

Acceptance of any late charge shall not constitute a waiver of Tenant’s default with respect to the overdue amount, nor prevent City from exercising any of the other rights and remedies available to City.

15.9 Limitation of Liability. Notwithstanding anything to the contrary in this Lease, Tenant’s liability under this Lease (excluding damages claims for injury to property or persons) is limited to its interest in the leasehold estate.

15.10 C ity ’s Default. If City fails to timely and properly perform any of its obligations under this Lease, and such failure continues for thirty (30) days after City receives a Notice of Breach, City shall be in default under this Lease (“City Default”). If a default with due diligence cannot be cured within thirty (30) days, then there shall be a City Default only if City fails to commence within thirty (30) days after it receives the Notice of Breach to cure the same or, thereafter, having begun to cure fails to prosecute the curing of such default continuously, with due diligence. In the event of a City Default, Tenant shall be entitled to seek monetary damages against City.

ARTICLE 16

LEASEHOLD MORTGAGES, LEASEHOLD MORTGAGEE AND INVESTOR RIGHTS

16.1 Consents to Leasehold Mortgages. Tenant shall have the right during the Term to procure loans in connection with the Project (each, a “ Loan”) from a leasehold lender (each, a “Leasehold Lender”) and to encumber Tenant’s right, title and interest in the Premises and in the Project Improvements with one or more deeds of trust as a leasehold mortgage lien and any related regulatory agreements (each deed of trust and related regulatory agreement, collectively, a “Leasehold Mortgage”); provided, however, that any such Loans and Leasehold Mortgages shall not encumber City ’s fee interest in the Premises or its easement rights and such Leasehold Mortgages shall be subject to all the rights and obligations of Tenant contained in this Lease except as otherwise provided herein. Any loan (and the related Leasehold Mortgage) obtained by the tenant then hereunder from a commercial, governmental or other institution lender following foreclosure under the Senior Lender ’s Leasehold Mortgage or deed in lieu thereof, shall a lso constitute a “ Loan” for all purposes hereunder, provided prior written notice of such Loan is provided to City.

16.2 P
reservation of Leasehold Benefits . City agrees as follows:

16.2.1 Voluntary Leasehold Termination. Except as expressly authorized in Section 16.3 below, City will not voluntarily terminate, cancel or surrender this Lease or agree to the Tenant’s termination, cancellation or surrender of this Lease, or amend or modify this Lease without the prior written consent of the Leasehold Lenders;

16.2.2 E ffect of Tenant Waiver . City will not enforce against any Leasehold Lender any waiver or election made by Tenant under this Lease (whether through action or inaction) without the prior written consent of the Leasehold Lenders; 476

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16.2.3 Notice to Leasehold Lenders. City will send to each Leasehold Lender a copy of any notice given by City to Tenant under this Lease at such address or addresses that have been provided to City in writing in accordance with Section 17.3; and

16.2.4 Recognition of New Tenant. Following foreclosure of a Leasehold Mortgage, or assignment in lieu thereof, City will recognize the purchaser or assignee of this Lease as the Tenant under this Lease at the rent, and upon the terms, provisions, covenants and agreements as herein contained and subject to the rights, if any, of any parties then in possession of any part of the Premises, subject to the following:

16.2.4.1 O
bligations of New Tenant . That, following any foreclosure or assignment described in Section 16.10, the new Tenant shall be personally obligated only for performance of obligations under this Lease for the period commencing as of the date of such foreclosure or assignment and ending as of the date of any assignment of this Lease to a successor Tenant; and

16.2.4.2 A
ssignment by New Tenant . That, following any foreclosure or assignment described in Section 16.10. or the execution of a new lease pursuant to Section 16.9, the new Tenant and any successor Tenant shall have the right to assign this Lease (or the new lease) subject to the written consent of City, which consent shall not be unreasonably withheld or delayed.

16.3 R
ight of Leasehold Lender to Cure.

16.3.1 Notwithstanding anything to the contrary under this Lease, City shall have no right to terminate this Lease or exercise any other remedy under this Lease unless (a) an Event of Default has occurred, (b) City shall have given each Leasehold Lender written notice of such Event of Default, at such address or addresses that have been provided to City in writing in accordance with Section 17.3, and (c) such Leasehold Lenders shall have failed to remedy such default, acquire Tenant ’s leasehold estate created by this Lease, or commence foreclosure or commence other appropriate proceedings, in each case as set forth in, and within the time specified by, this Section.

16.3.2 All payments so made by a Leasehold Lender and all things so done by a Leasehold Lender shall be as effective to prevent a termination of this Lease as the same would have been if made and performed by Tenant.

16.3.3 A Leasehold Lender shall have the right, but not the obligation, at any time to pay any or all of the rent due pursuant to the terms of this Lease, and do any other act or thing required of Tenant by the terms of this Lease, which are necessary to prevent termination of this Lease after notice of an Event of Default. A Leasehold Lender shall have a right to enter the Premises upon prior written notice reasonably delivered to the City for purposes of accomplishing the foregoing, so long as such Leasehold Lender indemnifies and holds City harmless from any and all liability arising from such entry upon the Premises (except to the extent of liability arising from City’s gross active negligence or willful misconduct). Each Leasehold Lender shall have ninety (90) days after receipt of written notice from City describing such Event of Default to cure such Event of Default; provided, however, that if it is not reasonably possible for any such 477

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Leasehold Lender to effect a cure within ninety (90) days, no Event of Default shall occur under this Lease so long as the Leasehold Lender shall give notice to the City thereof, commence such cure within the ninety (90) day period and thereafter diligently prosecute cure to completion and further provided, if it is necessary for the Leasehold Lender to obtain possession of the Premises in order to effect a cure, the period within which the Leasehold Lender is permitted to effect a cure shall be extended by the time that is required for Leasehold Lender to obtain such possession, provided the Leasehold Lender (1) diligently prosecutes its rights to obtain possession, (2) cures monetary Events of Defaults that do not require possession, subject to Section 16.8 and the cure rights contained therein, and (3) after gaining title to the Premises or entering into a new lease pursuant to Section 16.9, the Leasehold Lender or its transferee cures all non-monetary Events of Default of Tenant hereunder reasonably capable of being cured by such Leasehold Lender.

16.3.4 If a Leasehold Lender is prohibited, stayed or enjoined by any bankruptcy, insolvency or other judicial proceedings from commencing or prosecuting foreclosure or other appropriate proceedings, the times specified for commencing or prosecuting such foreclosure, or other proceedings shall be extended for the period of such prohibition; provided that any Leasehold Lender shall have fully cured any Event of Default in the payment of any monetary obligations of Tenant under this Lease and shall continue to pay currently such monetary obligations when the same fall due; provided, further, that such Leasehold Lender shall not interfere with City’s efforts to seek compliance by the Tenant with any non-monetary obligation under this Lease.

16.4 Limitation on Liability of Leasehold Lender after Foreclosure. No assumption of obligations by a Leasehold Lender shall be inferred from or result from foreclosure or as the result of any other action or remedy for Events of Default provided for by such Leasehold Mortgage or other instrument. No Leasehold Lender or its designee or transferee shall be or become liable to City under such circumstances unless it assumes liability under another written instrument executed by City and Leasehold Lender or its designee or transferee, and the liability of any Leasehold Lender shall be limited to the Leasehold Lender’s interest in the leasehold estate.

However, no Leasehold Lender may demolish or destroy the Premises or use the Premises for any use except as expressly agreed upon by City.

16.5 N
otice to City of Leasehold Mortgages . Tenant shall provide written notice to City of the name and address of each Leasehold Lender and written notice of any changes in such parties and their addresses within ten (10) days of Tenant ’s receipt thereof in accordance with Section 17.3.

16.6 No Modifications. City and Tenant shall not amend or modify this Lease , except as provided in section 2.2 hereof, nor shall Tenant exercise any option or make any election by the Tenant without the prior written consent of the Leasehold Lenders.

16.7 L oss Payee Endorsement . City agrees that Tenant may add the names of each Leasehold Lender to the “ Loss Payable Endorsement ” of any insurance policies required to be carried by Tenant under this Lease on condition that the insurance proceeds are applied in the manner specified in the applicable Leasehold Mortgage.

16.8 C
ures . No Leasehold Lender shall be required (a) to perform any act which is not reasonably susceptible to performance by such Leasehold Lender, such as to cure a filing or 478

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condition of bankruptcy or insolvency, (b) to cure or commence the cure of any default which arises from Tenant’s failure to pay any lien, charge or encumbrance which is junior in priority to the Leasehold Lender’s encumbrance, or (c) to pay any amount owed by Tenant, based on an event which occurred before the Leasehold Lender or its designee or transferee took title to the leasehold in the Premises, accepted an assignment of this Lease or entered into a new lease for the Premises.

16.9 New Lease After Tenant Default.

16.9.1 City agrees that in the event of termination of this Lease by reason of any Event of Default by Tenant, or by reason of the disaffirmance hereof by a receiver, liquidator or trustee for Tenant or its property, or by any other reason, City will enter into a new lease with the Senior Lender or its designee requesting a new lease for the remainder of the Lease Term, effective as of the date of such termination, at the rent, and upon the terms, provisions, covenants and agreements as herein contained and subject to the rights, if any, of any parties then in possession of any part of the Premises, and such new lease shall enjoy the same priority in time and in right as this Lease over any lien, encumbrance or other interest created by City before or after the date of such new lease and shall vest in the Senior Lender or designee all right, title and interest of Tenant hereunder in and to the Premises, including, without limitation, the assignment of Tenant’s interest in and to all then existing subleases and sublease rentals, provided:

16.9.1.1 The Senior Lender shall make written request upon City for the new lease at any time prior to the date that is ninety (90) days following the delivery by City to Senior Lender of written notice of termination of this Lease;

16.9.1.2 Subject to Section 16.8, the Senior Lender shall perform and observe all covenants herein contained on Tenant ’s part that accrue, become due, or are to be performed from and after the effective date of the new lease;

16.9.1.3 The new lease shall provide, with respect to each and every permitted sublease which immediately prior to the termination of this Lease was superior to the lien of the Senior Lender’s Leasehold Mortgage, that Senior Lender or its designee shall be deemed to have recognized the subtenant under the sublease as though the sublease had never terminated but continued in full force and effect after the termination of the Lease, and to have assumed all of the obligations of the sublessor under the sublease accruing from and after the termination of this Lease, except that the obligation of the new Tenant, as sublessor, under any covenant of quiet enjoyment, express or implied, contained in such sublease shall be limited to the acts of such new Tenant and those claiming by, under or through such new Tenant; and

16.9.1.4 The rights granted any Leasehold Lender to a new lease shall survive any termination of this Lease for a period of ninety (90) days following receipt by the Senior Lender of the notice described in Section 16.9.1.1.

16.9.2 The tenant under the new lease shall have the same, right, title and interest in and to all Project Improvements, fixtures, and personal property as Tenant had under the terminated Lease immediately prior to its termination. City shall by grant deed or by the terms of the new lease convey to the Leasehold Lender or its designee, title to the improvements, if any, which become vested in City as a result of the termination of the Lease; and 479

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16.9.3 Nothing herein contained shall require any Leasehold Lender to enter into a new lease pursuant to this Section 16.9.

16.10 Recognition of Transferee. Notwithstanding anything to the contrary contained herein, foreclosure of any Leasehold Mortgage, or any sale thereunder, whether by judicial proceedings or by virtue of any power contained in the Leasehold Mortgage, or any conveyance of the leasehold estate hereunder from Tenant to any Leasehold Lender or its designee through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof, shall not require the consent of City or constitute a breach of any provision of or a default under this Lease, and upon such foreclosure, sale or conveyance City shall recognize the purchaser or other transferee in connection therewith as the Tenant hereunder so long as such purchaser or other transferee shall assume in writing all outstanding obligations of Tenant under this Lease first arising or accruing after the foreclosure sale or transfer of the Lease ; provided, however, such purchaser or other transferee shall be entitled to a reasonable cure period for continuous operation of the Project for the Permitted Use, so long as the purchaser or other transferee is making good faith progress in diligently pursuing continued operation of the Permitted Use. The purchaser or other transferee shall acknowledge in writing that the Premises remain subject to the City Easement Agreement, if so requested by City.

16.11 N
o Cancellation . Unless and until City has received notice from all Leasehold Lenders that the Leasehold Lenders elect not to demand a new lease as provided in Section 16.9, or until the ninety (90) day period therefore has expired, City shall not cancel or agree to the termination or surrender of any existing subleases, and any new subleases entered into during such period must be in compliance with the requirements of the Regulatory Agreement, but at rents not less than the rents charged for new leases immediately prior to the termination of the Lease.

16.12 I
nsurance Proceeds . The proceeds from any insurance policies available to Tenant or arising from a condemnation if such condemnation proceeds would be payable to Tenant shall be paid to and held by the Senior Lender and distributed pursuant to the provisions of Article 12 and Article 13 of this Lease.

16.13 Notices of Proceedings. Tenant shall give all Leasehold Lenders and City notice of any arbitration, litigation, or condemnation proceedings, or of any pending adjustment of insurance claims as each may relate to the Premises, and any Leasehold Lender shall have the right to intervene therein and shall be made a party to such proceedings. If any Leasehold Lender shall not elect to intervene or become a party to the proceedings, Tenant shall provide such Leasehold Lender with notice of such proceeding and a copy of any award or decision made in connection with such proceeding.

16.14 L
iens of Fee Interest . City represents and warrants that City has not executed any monetary lien on the fee interest in the Premises. Prior to mortgaging its fee estate, City shall:
(1) provide Leasehold Lenders with sixty (60) days prior written notice of such mortgage, and (2) expressly subordinate such mortgage to (a) the interests of Tenant and any Leasehold Lender, (b) any permitted subleases, and (c) any new lease given to Leasehold Lender (or its successor) after termination of the Lease.
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16.15 Termination Under Bankruptcy . In the event of bankruptcy for either City or Tenant, neither party shall take the benefit of any provisions in the United States Bankruptcy Code that would cause the termination of this Lease or otherwise render this Lease unenforceable in accordance with its terms, without the prior written consent of all Leasehold Lenders. In this regard, in the event of the filing of a petition in bankruptcy by Tenant, and Tenant rejects this Lease under the then applicable provisions of the United States Bankruptcy Code, City shall, upon the request of a Leasehold Lender, affirm this Ground Lease, and City will enter into a new lease on the same terms and conditions as set forth in Section 16.9. In this regard, in the event of the filing of a petition in bankruptcy by or against Tenant, and Tenant rejects this Lease under the then applicable provisions of the bankruptcy code, City shall, upon the request of a Leasehold Lender, affirm this Lease, and City will enter into a new lease on the same terms and conditions set forth herein with such holder or its designee immediately upon Tenant’s rejection of this Ground Lease, for the remainder of the Term of this Lease. In the event of the filing of a petition in bankruptcy by City, and City rejects this Lease and Tenant does not affirm it, a Leasehold Lender will have the authority to affirm this Lease on behalf of Tenant and to keep this Lease in full force and effect.

16.16 R
ights of Investor . _______________________ (the “ Investor”) shall have the same notice and cure rights (but not rights to a new lease) as any Leasehold Lender for so long as it is a limited partner of Tenant and without regard to the existence of any Leasehold Mortgage.

The address for any notices to same, as of the date hereof, is provided in Section 17.3 below.

ARTICLE 17

GENERAL PROVISIONS

17.1 Governing Law, Exclusive Jurisdiction. This Lease, and all the rights and duties of the parties arising from or relating in any way to the subject matter of this Lease or the transaction(s) contemplated by it, shall be governed by, construed and enforced in accordance with the law of the State of California (excluding any conflict of laws provisions that would refer to and apply the substantive laws of another jurisdiction). Any suit or proceeding relating to this Lease shall be brought in Orange County, California.

17.2 C
ity Regulatory Authority. Tenant acknowledges and agrees that City, acting not as landlord but in its governmental regulatory capacity, has certain governmental regulatory authority over the Premises and that nothing in this Lease binds City to exercise or refrain from exercising this discretionary governmental authority in any particular manner..

17.3 E
stoppel Certificates .

17.3.1 Tenant Estoppel Certificate. At any time and from time to time, within thirty (30) days after receipt of a written request by City , Tenant shall deliver to City a statement in writing certifying (i) that this Lease is unmodified and in full force and effect (or if there shall have been modifications that the same is in full force and effect as modified and stating the modifications); (ii) the Term Commencement Date; (iii) the dates to which the Rent and any other deposits or charges have been paid; (iv) stating whether or not, to the current actual knowledge of Tenant, City is in default in the performance of any covenant, agreement or condition contained in this Lease and, if so, specifying each such default of which Tenant may have knowledge; and (v) such other information as may be reasonably requested by the Leasehold Lender. The estoppel 481

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certificate may be relied upon by the receiving party, and any prospective lender, lessee, transferee, or any assignee of any Leasehold Lender.

17.3.2 City Estoppel Certificate. At any time and from time to time, within thirty (30) days after receipt of a written request by Tenant, Investor, or any Leasehold Lender, City shall deliver to Tenant, Investor or such Leasehold Lender, if applicable, a statement in writing certifying (i) that this Lease is unmodified and in full force and effect (or if there shall have been modifications that the same is in full force and effect as modified and stating the modifications); (ii) the Term Commencement Date; (iii) the dates to which the Rent and any other deposits or charges have been paid, (iv) stating whether or not, to the current actual knowledge of City, Tenant is in default in the performance of any covenant, agreement or condition contained in this Lease and, if so, specifying each such default of which City may have knowledge, and (v) such other information as may be reasonably requested by Tenant, Investor, or such Leasehold Lender (as applicable). The estoppel certificate may be relied upon by the receivi ng party, and any prospective lender, lessee, transferee, or any assignee of any Leasehold Lender.

17.4 N
otices . All notices, demands, or other communications with respect to this Lease shall be in writing and shall be (a) delivered in person, in which event the notice shall be deemed received when delivery is actually received by the recipient, (b) sent by reputable overnight courier which provides a receipt with the time and date of delivery for next business day delivery, in which event the notice shall be deemed received when delivery is actually received by the recipient; or (c) sent by registered mail or certified mail, postage prepaid, return receipt requested, through the United States Postal Service, in which event the notice shall be deemed received when the delivery is actually received by the recipient. Notwithstanding the foregoing, the recipient ’s rejection or other refusal to accept delivery, or the inability to deliver because of a changed address of which proper notice was not given, shall be deemed to be receipt of the notice, demand or other communication. Each party may change its address b y written notice in accordance with this Section. All such notices shall be sent to the following addresses:

If to City:

City of Costa Mesa
77 Fair Drive
Costa Mesa, California 92626
Attention: City Manager
with a copy to:

Jones Mayer
3777 N. Harbor Blvd.

Fullerton, CA 92835
Attn: Kimberly Hall Barlow
If to Tenant:
______________ LP
c/o Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
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Irvine, CA 92614
Attention: Michael Massie
with a copy to:

Rutan & Tucker, LLP
18575 Jamboree Road 9
th Floor
Irvine, CA 92612
Attention: Patrick D. McCalla
and a copy to:
and a copy to:

Any party may change its address set forth above by notice given in the manner set forth above.

17.5 Quiet Enjoyment. City covenants and agrees that Tenant, upon paying the Rent and all other charges under this Lease and observing and keeping all covenants, agreements and conditions of this Lease on its part to be observed and kept at all times during the Term, shall have quiet enjoyment of the Premises during the Term, subject, however, to the exceptions, reservations, conditions of this Lease or other rights of City contained herein, in the City Easement Agreement, or as otherwise allowed by applicable law.

17.6 U
navoidable Delays . “ Unavoidable Delays” shall mean delays actually caused by force majeure events. Force majeure events shall include, without limitation: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor; subcontractor or supplier; or any other causes beyond the control or without the default of the party claiming an extension of time to perform.

Notwithstanding anything to the contrary in this Lease, an extension of time for delays actually caused by any such event shall be for the period of the Unavoidable Delay and shall commence to run from the time of the commencement of the event, if notice by the party claiming such extension is sent to the other party within thirty (30) days after the commencement of the event.

17.7 Mem
orandum of Lease. A Memorandum of Lease in the form attached hereto as Exhibit B (“Memorandum of Lease”) shall be signed by City and Tenant at the same time as this Lease is signed. The Memorandum of Lease shall be recorded in the Official Records of the County of Orange, California, on the Term Commencement Date. Tenant will pay all costs of recording, including any County documentary transfer tax or City conveyance tax. Tenant shall pay the cost of any title insurance it may require.

17.8 C
aptions . The word titles contained herein are inserted solely for convenience and under no circumstances are they or any of them to be treated or construed as any part of this instrument.
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17.9 Successors and Assigns . Subject to the provisions hereof, this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns, and wherever a reference in this Lease is made to either of the parties hereto such reference shall be deemed to include, wherever applicable, also a reference to the successors and assigns of such party, as if in every case so expressed.

17.10 I
ndemnity Includes Defense Costs . In any case where one party is obligated under an express provision of this Lease to indemnify and to save the other party harmless from any damage or liability, the indemnity obligation shall be deemed to include defense of the indemnified party, such defense to be through legal counsel selected by or reasonably acceptable to the indemnified party.

17.11 B
usiness Days. As used herein, the term “business day” shall mean any day other than a Saturday, Sunday or day on which the City is closed for business. If any of the dates specified in this Lease shall fall on a non-business day, then the date of such action shall be deemed to be extended to the next business day.

17.12 D isclaimer of Partnership . The relationship of the parties hereto is that of Lessor and tenant, and it is expressly understood and agreed that City does not as a result of this Lease in any way nor for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of Tenant ’s business or otherwise. This Lease is not intended to, and shall not be construed to, create the relationship of agent, servant, employee, partnership, joint venture, or association as between City and Tenant.

17.13 N
otice and Cooperation in Legal Proceedings . Tenant shall give prompt notice, in writing, to the City of the commencement of any action, lawsuit or other legal proceeding against City or against Tenant with respect to any aspect or part of the Premises or this Lease. Tenant shall cooperate with City , and shall cause all the Tenant Representatives to cooperate, in connection with the prosecution or defense of any such legal proceedings. For purposes of this Lease, “Tenant Representatives ” shall mean Tenan t’s agents, contractors, subcontractors, representatives, officers, employees, members, partners, shareholders, directors and managers.

17.14 N
o Waiver . No delay or failure to require performance of any provision of this Lease shall constitute a waiver of that provision as to that or any other instance. Any waiver granted by a party must be in writing and shall apply to the specific instance expressly stated.

17.15 T
hird Party Beneficiaries . Except as otherwise expressly stated herein, this Lease does not confer any rights or remedies upon any person or entity other than the parties. Except as otherwise expressly stated herein, there are no third- party beneficiaries to this Lease. Each Leasehold Lender is hereby made an express third party beneficiary of the express rights granted hereunder.

17.16 C
ounterparts; Electronic Signatures . This Lease may be executed in any number of counterparts, and all of such counterparts so executed together shall be deemed to constitute one and the same agreement, and each such counterpart shall be deemed to be an original. The parties agree that an electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term 484

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“electronic copy of a signed contract ” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed contract in a portable document format. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by the parties.

17.17 Entire Lease: Governing Language. This Lease constitutes the entire agreement by and between the parties with respect to the subject matters hereof, and supersedes all prior understandings and agreements relating thereto. .

17.18 C hanges or Amendments to Lease. No modification or amendment shall be valid unless set forth in writing and signed by City and Tenant and approved by the Leasehold Lenders(except modifications made in accordance with section 2.2 hereof), in writing, on the terms and conditions required pursuant to this Lease. City shall cooperate in including within this Lease by suitable amendment from time to time any provision that may reasonably be requested by any Leasehold Lender or any proposed Leasehold Lender, for the purpose of allowing any such Leasehold Lender or proposed Leasehold Lender, reasonable means to protect or preserve its interest in the Tenant and/or the Premises, as applicable. City agrees to execute and deliver (and to acknowledge, if necessary, for recording purposes) any agreement necessary to effect any such amendment; provided, however, that any such amendment shall not in any way affect the Lease Term or rent under this Lease nor otherwise in any material respect adversely affect any rights o f City under this Lease.

17.19 C
umulative Remedies . The rights and remedies of the parties to this Lease, whether pursuant to this Lease or in accordance with law, shall be construed as cumulative, and the exercise of any single right or remedy shall constitute neither a bar to the exercise of nor the waiver of any other available right or remedy.

17.20 T
ime of the Essence. Time is of the essence of this Lease. Failure to comply with any time requirement of this Lease shall constitute a material breach of this Lease.

17.21 I ncorporation of Exhibits . All exhibits referred to in this Lease and any addenda, appendices, attachments, exhibits, and schedules which may, from time to time, be attached to in any duly executed amendment of this Lease are by such reference incorporated in this Lease and shall be deemed to be part of this Lease.

17.22 S
everability . Should any part of this Lease be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the validity of the remainder of this Lease which shall continue in full force and effect, provided that such remainder can, absent the excised portion, be reasonably interpreted to give the effect to the intentions of the parties.

17.23 A
mbiguities . This Lease was drafted jointly by the parties. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party does not apply in interpreting this Lease. Should any ambiguities or conflicts between contract terms and conditions contained in this Lease and its exhibits exist, the terms and conditions in this Lease shall control over its exhibits.
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17.24 Other Representations, Warranties and Covenants. Tenant represents, warrants and covenants that the following is true and correct and shall be true and correct at all times during the Term:

17.24.1 Tenant is in good standing under the laws of the State of California and is authorized to carry on and do business in the State of California as such business is now conducted and to perform its obligations under this Lease.

17.24.2 Tenant has the full right, power and lawful authority to enter into this Lease and its execution and delivery of this Lease by it or on its behalf has been fully authorized by all requisite actions.

17.24.3 Tenant has provided City with true and correct copies of documentation reasonably requested by City designating the parties authorized to execute this Lease on its behalf.

17.24.4 Tenant’s execution, delivery and performance of its obligations under this Lease will not violate any applicable laws, regulations, or rules nor to its knowledge, constitute a breach or default under any contract, agreement, or instrument to which it is a party, or any judicial or regulatory decree or order to which it is a party or by which it is bound.

17.24.5 Tenant has not made an assignment for the benefit of creditors, filed a petition in bankruptcy, been adjudicated insolvent or bankrupt, petitioned a court for the appointment of any receiver of or trustee for it or any substantial part of its property, or commenced any proceeding relating it under any reorganization, arrangement, readjustment of debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or later in effect. There has not been commenced nor is there pending against it any proceeding of the nature described in the first sentence of this subsection. No order for relief has been entered with respect to it under the Federal Bankruptcy Code.

17.24.6 All documents, instruments, and other information delivered by Tenant to the City pursuant to this Lease are true, accurate, correct and complete to the actual knowledge of Tenant unless otherwise indicated in writing delivered concurrently with such delivery. City shall be entitled to rely upon the accuracy and completeness of the information, surveys, and reports provided by Tenant or any of Tenant’s employees, agents, subcontractors or consultants.

17.24.7 This Lease, when executed by it and delivered, shall constitute its legal, valid and binding obligation. No consent, approval, or authorization of any third person to its execution, delivery, and performance of this Lease is required, other than consents, approvals, and authorizations which have already been unconditionally given.

17.24.8 Upon its receipt of actual knowledge that any fact or condition which would cause any warranty or representation made by it pursuant to this Section is not true in all material respects, promptly give written notice of such fact or conditions to the City.

17.25 Further Assurances. Tenant covenants and agrees that it will execute such other and further instruments and documents as are or may become reasonably necessary to effectuate and carry out this Lease.
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17.26 Representation by Counsel. The parties to this Lease were represented by their respective counsel in the negotiation and execution of this Lease.

17.27 N o Merger. There shall be no merger of this Lease or any interest in this Lease nor of the leasehold estate created by this Lease, with the fee estate in the Premises, by reason of the fact that this Lease or such interest in the Lease, or such leasehold estate may be directly or indirectly held by or for the account of any person who shall hold the fee estate in the Premises, or any interest in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of the leasehold estate created by this Lease may be conveyed or mortgaged in a leasehold mortgage to a leasehold mortgagee who shall hold the fee estate in the Premises or any interest of the City under this Lease.

ARTICLE 18

REPRESENTATIONS, WARRANTIES AND COVENANTS

18.1 Representations, Warranties and Covenants of City . As an inducement to Tenant to enter into and to proceed under this Lease, City warrants, represents and covenants to Tenant as follows, which warranties, representations and covenants are true and correct as of the date of this Lease:
(a) City has the right, power and authority to enter into this Lease and the right, power and authority to comply with the terms, obligations, provisions and conditions contained in this Lease;
(b) City is a California municipal corporation. The execution, performance and delivery of this Lease by City have been fully authorized by all requisite actions on the part of City.
(c) City is not the subject of a bankruptcy proceeding. (d) There are no known actions, suits, material claims, legal proceedings, or any proceedings affecting the Premises or any portion thereof, at law or in equity before any court of governmental agency, domestic of foreign.
(e) The entry by City into this Lease and the performance of all of the terms, provisions and conditions contained herein will not, or with the giving of notice or the passage of time, or both, would not, violate or cause a breach or default under any other agreements to which City is a party or by which it is bound.
(f) City is the owner of the fee simple title to the Premises free and clear of all recorded and unrecorded monetary liens, encumbrances, easements, leases, covenants, conditions, restrictions, and other exceptions to or defects in title, excepting only the following: (a) current taxes not yet delinquent; and (b) those additional title exceptions listed in the Proforma Owner ’s Policy of Title Insurance No. ______________________ issued by First American Title Company (“Title Report”), and such encumbrances approved by Tenant and recorded concurrently with the Memorandum of Lease, including, without limitation, the City Easement Agreement. 487

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(g) As of the Commencement Date, the Premises are not subject to any outstanding lease agreement, contract of sale, right of first refusal or purchase option, in favor of any person or entity, except Tenant. There are no (i) agreements or arrangements pursuant to which goods, services, water, equipment, labor, supplies, or any other items are being or will be furnished to the Premises, including without limitation, equipment leases, maintenance agreements, service contracts, w arranties, and management contract s, except for utilities arrangements; (ii) agreements whereby any person or entity holds any right, license, or privilege or possess or use the Premises or any portion thereof; and (iii) licensing, franchise, or permits issued or required for the ownership and/or operation of the Premises. No agreements or understanding relating to or affecting the Premises exist, except for this Lease and the agreements shown as exceptions to the Premises’ title,
(h) There are no tenants or other persons who have a lawful interest in the Premises, and no person or entity has the right to possess the Premises or portion of it. (i) City has not received any notice from any governmental agency or authority alleging that the Premises is currently in violation of any law, ordinance, rule, regulation, or requirement applicable to its use and operation. If any such notice or notices are received by City following the Commencement Date, City shall, within ten (10) business days of receipt of such notice, notify Tenant in writing. Further, no violations exist of any statutes, ordinances, regulations, or administrative or judicial orders or holdings, whether or not appearing in public records, with respect to the Premises, and present use of the Premises complies with the existing City zoning laws and ordinances.
(j) City has disclosed to Tenant all information, records, and studies maintained by City for the Premises concerning “Hazardous Materials” (as defined below). City has not received written notice from any governmental authority that the Premises or the use or operation thereof are in violation of any “ Hazardous Materials Laws” (as defined below), and to City’s knowledge, no such written notice has been issued and, to City ’s knowledge, no violation of any Hazardous Materials Laws has occurred. To City’s knowledge, no part of the Premises has ever been used by any person or entity to refine, produce, use, store, handle, transfer, process, transport or dispose of any Hazardous Materials.

As used in this Lease, the term “Hazardous Materials” means any oil or any fraction thereof or petroleum products or “hazardous substance” as defined in Section 101(14) of CERCLA (42 U.S.C. Section 9601(14) or Section 25281(h) or 25316 of the California Health and Safety Code at such time; any “hazardous waste,” “infectious waste” or “hazardous material” as defined in Section 25117, 25117.5 or 25501(j) of the California Health and Safety Code at such time; any other waste, substance or material designated or regulated in any way as “toxic” or “hazardous” in the RCRA (42 U.S.C. Section 6901, et seq.), CERCLA Federal Water Pollution Control Act (33 U.S.C. Section 1251, et seq.), Safe Drinking Water Act (42 U.S.C. Section 300(f), et seq.), Toxic Substances Control Act (15 U.S.C. Section 2601, et seq.), Clean Air Act (42 U.S.C. Section 7401, et seq.), California Health and Safety Code (Section 25100, et seq., Section 39000, et seq.), or California Water Code (Section 13000, et seq.) at such time; and any additional wastes, substances or material which at such time are classified, considered or regulated as hazardous or toxic under any other present or future environmental or other similar laws relating to the Premises, but excluding any substances or materials used in the construction, development, maintenance or 488

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operation of the Improvements, so long as the same are used in accordance with all applicable laws.

As used in this Lease, the term “Hazardous Materials Laws” means all federal, state, and local laws, ordinances, regulations, orders and directives pertaining to Hazardous Materials in, on or under the Premises or any portion thereof.

18.2 Representations, Warranties and Covenants of Tenant . As an inducement to City to enter into and to proceed under this Lease, Tenant warrants and represents to City as follows, which warranties, representations and covenants are true and correct as of the date of this Lease:
(a) Tenant has the right, power and authority to enter into this Lease and the right, power and authority to comply with the terms, obligations, provisions and conditions contained in this Lease;
(b) Tenant is a California limited partnership. The execution, performance and delivery of this Lease by Tenant have been fully authorized by all requisite actions on the part of the Tenant.
(c) Tenant is not the subject of a bankruptcy proceeding. (d) The entry by Tenant into this Lease and the performance of all of the terms, provisions and conditions contained herein will not, or with the giving of notice or the passage of time, or both, would not, violate or cause a breach or default under any other agreements to which Tenant is a party or by which it is bound.

18.3 Hazardous Materials.

18.3.1 Certain Covenants and Agreements. Tenant hereby covenants and agrees that:
(a) Tenant shall not knowingly permit the Premises or any portion thereof to be a site for the use, generation, treatment, manufacture, storage, disposal or transportation of Hazardous Materials or otherwise knowingly permit the presence of Hazardous Materials in, on or under the Premises in violation of any applicable law;
(b) Tenant shall keep and maintain the Premises and each portion thereof in compliance with, and shall not cause or permit the Premises or any portion thereof to be in violation of, any Hazardous Materials Laws;
(c) Upon receiving actual knowledge of the same Tenant shall immediately advise City in writing of:
(i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Tenant or the Premises pursuant to any applicable Hazardous Materials Laws;
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(ii) any and all claims made or threatened by any third party against Tenant or the Premises relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in the foregoing clause (i) and this clause (ii) are hereinafter referred to as “Hazardous Materials Claims”); or (iii) the presence of any Hazardous Materials in, on or under the Premises in such quantities which require reporting to a government agency.

If City reasonably determines that Tenant is not adequately responding to a Hazardous Material Claim or any condition in Section 18.3.1(c)(iii), City shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any such Hazardous Materials Claims and to have its reasonable attorney’ s fees in connection therewith paid by Tenant.
(d) Without City’s prior written consent, which shall not be unreasonably withheld or delayed, Tenant shall not take any remedial action in response to the presence of any Hazardous Materials on, under, or about the Premises (other than in emergency situations or as required by governmental agencies having jurisdiction), nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Materials Claims. (e) Tenant has conducted its own inspections, including a Phase I Environmental Assessment and Phase II Environmental Assessment (if necessary), to familiarize itself with the condition of the Premises, including the presence of any Hazardous Materials, and has, subject to the representations and warranties made by City under this Lease and/or under the AH/DDA, unconditionally accepted the condition of the Premises based on its own due diligence.

18.3.2 Tenant Indemnity. Without limiting the generality of the indemnification set forth in Section 9.1 above, Tenant hereby agrees to indemnify, protect, hold harmless and defend (by counsel selected by or otherwise approved by City) the Indemnitees from and against any and all claims, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action requirements, enforcement actions of any kind, and all costs and expenses incurred in connection therewith (including, but not limited to, attorney’s fees and expenses), arising directly or indirectly, in whole or in part, out of:
(a) the failure of Tenant on or after the Commencement Date to comply with any Hazardous Materials Law relating in any way whatsoever to the handling, treatment, presence, removal, storage, decontamination, cleanup, transportation or disposal of Hazardous Mate rials into, on, under or from the Premises; or
(b) any release or discharge of any Hazardous Materials into, on, under or from the Premises, first arising on or after the Commencement Date, or the presence in, on, or under the Premises of any Hazardous Materials that first occurs on the Premises after the Commencement Date.
(c) The provisions of this subsection shall survive expiration of the Term or other termination of this Lease, and shall remain in full force and effect. This indemnity obligation shall not extend to any claim to the extent arising from any Indemnitee’s gross negligence or willful misconduct. Notwithstanding anything herein to the contrary Tenant ’s liability under this 490

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Section 18.3 shall not extend to cover the violation of any Hazardous Materials Laws that first arise, commence or occur after the actual dispossession from the entire Premises of Tenant and all entities which control, are controlled by, or are under common control with Jamboree, except to the extent that such release of Hazardous Materials or toxic substances, or materials and/or waste therefrom were exacerbated or caused by Tenant during its occupancy of the Premises.

18.3.3 No Limitation . Tenant hereby acknowledges and agrees that Tenant ’s duties, obligations and liabilities under this Lease, including, without limitation, under subsection

18.3.2 above, are in no way limited or otherwise affected by any information City may have concerning the Premises and/or the presence on the Premises of any Hazardous Materials, whether City obtained such information from Tenant or from its own investigations.

18.3.4 C
ity Indemnity. City hereby agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to Tenant) Tenant, its officers, board members, directors, agents, successors, assigns and employees (the “Tenant Indemnitees”) from and against any and all claims, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action requirements, enforcement actions of any kind, and all costs and expenses incurred in connection therewith (including, but not limited to, attorney’s fees and expenses), arising directly or indirectly, in whole or in part, out of:
(a) the failure of City prior to the Commencement Date to comply with any Hazardous Materials Law relating in any way whatsoever to the handling, treatment, presence, removal, storage, decontamination, cleanup, transportation or disposal of Hazardous Materials into, on, under or from the Premises; or
(b) any release or discharge of any Hazardous Materials into, on, under or from the Premises, first arising prior to the Commencement Date, or the presence in, on, or under the Premises of any Hazardous Materials that first occurred on the Premises prior to the Commencement Date.

The provisions of this subsection shall survive expiration of the Term or other termination of this Lease, and shall remain in full force and effect. This indemnity obligation shall not extend to any claim to the extent arising from any Tenant Indemnitee ’s gross negligence or willful misconduct.

18.4 As-Is Conveyance; Release.

18.4.1 As-Is Conveyance. Except as otherwise provided in this Lease and/or in the AH/DDA, this Lease is made “ AS IS, ” with no warranties or representations by the City concerning the condition of the Premises. City hereby agrees and acknowledges that except in the event of any fraud by City , and except for the representations by City expressly set forth herein and/or in the AH/DDA: (i) neither City, nor anyone acting for or on behalf of City, has made any representation, statement, warranty or promise to Tenant concerning the development potential or condition of the Premises; (ii) in entering into this Lease, Tenant has not relied on any representation, statement or warranty of City , or anyone acting for or on behalf of City ; (iii) all matters concerning the Premises have been or shall be independently verified by Tenant and Tenant shall lease the Premises on Tenant ’s own prior examination thereof; and (iv) Tenant is 491

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leasing the Premises in an “ as is ” physical condition and in an “ as is ” state of repair. If the condition of the Premises is not in all respects entirely suitable for the use or uses to which such Premises will be put, then except in the event of any fraud by City , and except for the representations by City expressly set forth herein, it is the sole responsibility and obligation of Tenant to place the Premises in all respects in a condition suitable for Tenant ’s development project, solely at Tenant’s expense.

18.4.2 General Release. Except for City ’s fraud or the breach by City of a representation, warranty, or covenant in this Lease and/or in the AH/DDA, Tenant and its owners, employees, agents, assigns and successors agree that as of the Commencement Date, Tenant shall be deemed conclusively to have released and discharged City and its agents, employees, trustees, assigns and successors, from any and all damages, losses, demands, claims, debts, liabilities, obligations, causes of action and rights, whether known or unknown, by Tenant regarding the physical condition of the Premises as of the Commencement Date, including, but not limited to, the environmental condition of the Premises.

18.4.3 W
aiver of Civil Code Section 1542. Tenant agrees that, with respect to the General Release contained in Section 18.4.2 above, the General Release extends to all matters regarding the Premises, whether or not claimed or suspected, to and including the date of execution hereof, and constitutes a waiver of each and all the provisions of the California Civil Code section 1542, which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

THE CREDITOR OR RELEASING PARTY DOES NOT KNOW

OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE

TIME OF EXECUTING THE RELEASE AND THAT, IF

KNOWN BY HIM OR HER WOULD HAVE MATERIALLY

AFFECTED HIS OR HER SETTLEMENT WIT H THE DEBTOR
OR RELEASED PARTY.”
Tenant herein acknowledges that the effect and import of the provisions of Civil Code section 1542 have been explained to it by its own counsel. Tenant understands and acknowledges the significance and the consequence of such specific waiver of unknown claims and hereby assumes full responsibility for any injuries, damages, losses or liabilities that it may hereinafter incur from the waiver of these unknown claims.
//SIGNATURES FOLLOW ON NEXT PAGE//

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IN WITNESS WHEREOF, City and Tenant have executed this Lease as of the Effective Date.

CITY:

The City of Costa Mesa,
a California municipal corporation
By: __________________________________
Lori Ann Farrell Harrison, City Manager
Date: ____________________________
ATTEST:
___________________________________
City Clerk
APPROVED AS TO FORM:

JONES MAYER
________________________________
Counsel to the City of Costa Mesa

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TENANT:
_____________________________________ LP,
a California limited partnership,

By: ____________________ LLC,
a California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
Manager
By:

Michael Massie, Executive Vice President
and Chief Development Officer

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EXHIBIT A
-1-

EXHIBIT A
The Land referred to herein is situated in the State of California, County of Orange, City of Costa Mesa, and described as follows:

495

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EXHIBIT B

FORM OF MEMORANDUM OF LEASE

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EXHIBIT B
-1-

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
__________________________, LP
c/o Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
Irvine, CA 92614
Attention: _____________________

APN: (SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY)
[To be recorded at no fee pursuant to Government Code §27383]

MEMORANDUM OF GROUND LEASE
This Memorandum of Ground Lease (“Memorandum”) is made as of __________________, ____ by and between the City of Costa Mesa, a California municipal corporation (“City”) and _____________, LP, a California limited partnership (“Tenant”).

For good and valuable consideration, receipt of which is hereby acknowledged, City hereby leases to Tenant and Tenant hires from City certain real property described on Exhibit A hereto ( “Premises”); which Premises are subject to an easement agreement recorded concurrently herewith in favor of City for drainage, egress, ingress, access and parking over the surface parking thereon. The terms and conditions of this lease are more particularly set forth in an unrecorded Ground Lease (the “Lease”) between City and Tenant dated for reference purposes as of ________________ which is hereby incorporated herein by this reference thereto. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Lease.

1. The term of the Lease ( “Lease Term”) commences on the Term Commencement Date (which is defined in the Lease as the date this Memorandum is recorded in the public records) and expires on the last day of the month in which the ninety- ninth (99th) anniversary of the Term Commencement Date occurs.

2. The Lease requires that the Premises be used for the Term for affordable housing and related uses, as more particularly set forth in the Lease.

3. This Memorandum has been executed, acknowledged and recorded solely for the purpose of providing constructive notice of the Lease. This Memorandum may be executed in any number of counterparts, and all of such counterparts so executed together shall be deemed to constitute one and the same agreement, and each such counterpart sha ll be deemed to be an original. If any inconsistency or conflict exists between the provisions of this Memorandum and the Lease, the terms, covenants and conditions of the Lease shall control. [signatures on following pages]

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EXHIBIT B
-2-
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum as of the day and year first written above.

ATTEST:

City Clerk

Tenant:
__________________________________
LP, a California limited partnership,

By: ____________________ LLC, a
California limited liability company,
Managing General Partner
By: Jamboree Housing
Corporation, a California nonprofit public
benefit corporation, Manager
By:_________________________
Name: Michael Massie, Executive
Vice President and Chief Development
Officer

City:

City of Costa Mesa, a California municipal
corporation

By:

Its:

APPROVED AS TO FORM:

JONES MAYER

Counsel to the City of Costa Mesa

[SIGNATURES OF OTHER THAN COUNSEL MUST BE ACKNOWLEDGED]

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EXHIBIT B
-3-
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 California )
County of ______________________ )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who 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.

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 (Seal)

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EXHIBIT B
-4-
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.

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 (Seal)

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EXHIBIT B
-5-

EXHIBIT A TO MEMORANDUM OF LEASE

LEGAL DESCRIPTION OF PREMISES
The Land referred to herein is situated in the State of California, County of Orange, City of Costa Mesa, and described as follows:

501

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TABLE OF EXHIBITS
EXHIBIT A Legal Description of Premises
EXHIBIT B Form of Memorandum of Lease

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PLANNING COMMISSION

AGENDA REPORT
MEETING DATE: December 9, 2024 ITEM NUMBER: PH-1
SUBJECT: GENERAL PLAN CONFORMITY REPORT FOR THE PROPOSED

LEASE OF A PORTION OF CITY PROPERTY, AND

RECOMMENDATION TO THE CITY COUNCIL ON A TENTATIVE
PARCEL MAP (2023- 160) TO SUBDIVIDE THE SUBJECT PROPERTY INTO TWO PARCELS, AND A MASTER PLAN (PMAP-24-0001) WITH

DENSITY BONUS PURSUANT TO STATE LAW FOR THE
DEVELOPMENT OF A 70 -UNIT MULTI-FAMILY RESIDENTIAL
PROJECT THAT INCLUDES 34 PERMANENT SUPPORTIVE HOUSING
UNITS, 35 INDEPENDENT LIVING UNITS AND ONE UNRESTRICTED MANAGER’S UNIT; LOCATED IN A PORTION OF THE PARKING LOT AT 695 WEST 19TH STREET (COSTA MESA SENIOR CENTER)
FROM: ECONOMIC AND DEVELOPMENT SERVICES DEPARTMENT /

PLANNING DIVISION
PRESENTATION BY: VICTOR MENDEZ, SENIOR PLANNER

FOR FURTHER

INFORMATION
CONTACT:

VICTOR MENDEZ
714-754-5276
[email protected]

RECOMMENDATION
Staf
f recommends that the Planning Commission recommend that the City Council:

1. Find
that the lease and use of the City property for affordable senior housing purposes is in conformance with the General Plan in regard to location, purpose and extent pursuant to California Government Code Section 65402.

2. Find
the project is categorically exempt from the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15332 (Class 32), In-Fill Development Projects; and

3. Recom
mend that the City Council approve the Master Plan ( PMAP-24-0001) with Density Bonus, and Tentative Parcel Map 2023-160.

ATTACHMENT 2
503
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APPLICANT O R AUTHORIZED AGENT
T
he applicant is Tish Kelly, on behalf of Jamboree Housing Corporation (JHC) via an Option- To-Lease Agreement with the City of Costa Mesa.

PLANNING APPLICATION SUMMARY
Location: 695 West 19th Street Applications Number(s): PMAP-24-0001 & PTPM-24-0004 Request: General Plan Conformity Report for the proposed lease of a portion of City property located at 695 West 19th Street (Costa Mesa Senior Center), and recommendation to the City Council on a Tentative Parcel Map to subdivide the subject property into two parcels, and a Master Plan with Density Bonus pursuant to State Law for the development of a 70-unit multi-family residential senior affordable project that includes 34 permanent supportive housing units, 35 independent living units and one manager’s unit. The request includes concessions from specified development standards pursuant to State Density Bonus Law.

SU
BJECT PROPERTY: SUROUNDING PROPERTY:

Zone: C1 – Local Business District North: R3 – Multiple General Plan: General Commercial South: R2-HD – Multiple-Family Residential District, High Density
Lot
Dimensions:
264.75 FT by 247.02 FT East: C1 – Local Business District Lot Area: ± 65,398 SF West: C1 – Local Business District Existing
Development:

The Senior Center is a 20,127 square-foot, two-story building on a site with landscaping and 145 surface parking spaces.
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DEVELOPMENT STANDARDS COMPARISON (19 WEST URBAN PLAN)

DEVELOPMENT STANDARD CODE

REQUIREMENT

PROPOSED MEETS CODE
Minimum lot size: 1 acre 1.5 acres Yes

Maximum Floor Area Ratio (FAR): 1.0 1.44 acres2, 5 Exempt5

Maximum Lot Coverage: 90% (58,858 SF) 47.5% (31,058 SF) Yes

Density: NA1 46.6 units per acre NA1

Minimum Open Space:

Development Lot 30% (19,619 SF) 5.04% (3,297 SF)2 DBL Concession Residential 14,000 SF
(70 units x 200 SF =
14,000 SF)
11, 857 SF DBL Concession

Maximum Building Height -
Residential Component:
4 stories / 60 FT 4 stories / 57 FT 6 IN Yes

Setbacks:

Front (West 19th Avenue) 15 FT 0 FT 6 IN2 DBL Concession Side – Left 0 FT 80 FT 6 IN Yes
Side – Right 0 FT 10 FT Yes
Rear – (Plumer Street) 10 FT 66 FT 6 IN Yes

Parking (Urban Master Plan Requirements):

Residential Tenant Parking
(One Bedroom)
102
(1.5 spaces x 68 units
= 102 spaces)

1334

No
Residential Tenant Parking
(Two Bedroom)
4 (2 spaces x 2 units =
4 spaces)
Residential Guest Parking 35
(0.5 spaces x 70 units
= 30)
Senior Center Parking 1473
TOTAL 288

Parking (State Density Bonus Law Requirements)
Residential 0 spaces/unit 133 No parking required
through State Density
Bonus Law
Senior Center Parking N/A N/A
1 Pursuant to General Plan Table LU-15, mixed-use projects that include a residential component are allowed a maximum FAR (density is not applicable).
2 Development standard deviations allowed through State Density Bonus Law. 3 Parking requirements for the Senior Center were established by Conditional Use Permit PA-90-60. 4 Development standard deviations allowed through Master Plan approval process. 5 Exemptions allowed through State Density Bonus Law.

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EXECUTIVE SUMMARY

Jamboree Housing Corporation (JHC) has filed applications for the development of a 70- unit affordable senior and permanent supportive housing project on a portion of the property at 695 West 19th Street (Costa Mesa Senior Center), which is located within the 19 West Urban Plan area. The application s also include a Tentative Parcel Map to subdivide the existing 2.66- acre City -owned property into two lots. The subdivision enables JHC to demonstrate site control via a ground lease with the City for the purposes of obtaining State and Federal affordable housing funding. The lease will not change the City’s underlying ownership of the property(s), as ownership is not required for the aforementioned funding. Additionally, JHC seeks a Density Bonus through concessions in accordance with State Density Bonus Law, as well as approvals for an Affordable Housing Plan and Affordable Housing Agreement. Lastly, pursuant to Government Code 65402, the requested long- term lease of the City property for the affordable housing construction and operation requires the Planning Commission to report to the City Council in regard to General Plan conformity.

This project is subject to the Costa Mesa Municipal Code, which mandates the preparation of a Master Plan for developments located within a mixed-use overlay district.

While the Planning Commission typically serves as the final review authority for a Tentative Parcel Map and Master Plan applications, in this case, the City Council retains project discretionary approval authority based on the required regulatory agreements and the specific density bonus request.

Based on adhere nce to applicable goals, objectives, and policies of the General Plan , compatibility with nearby uses , staff recommends that the Planning Commission recommend that the City Council find the project exempt from the California Environmental Quality Act (CEQA), approve the associated planning applications, based on findings of fact and subject to conditions of approval, and determine that the proposed lease of the City property for the use and development of a senior affordable housing project is in conformance with the General Plan in regard to location, purpose and extent.

SETTING

The project site is 2.66 -acres and is currently occupied by City of Costa Mesa Senior Center located at 695 West 19
th Street (see Exhibit 1 below). The property is a corner lot and is located at the southeast corner of West 19 th Street and Pomona Avenue . The development is proposed at the northeast corner of the Senior Center parking lot.

The project site is designated General Commercial by the City’s Land Use Element of the General Plan and is zoned C1 (Local Business District). The General Commercial designation is intended for a wide range of commercial uses that serve both local and regional needs such as retail stores, theaters, restaurants , and service establishments.

The C1 zone allows for a wide range of similar goods and services with a focus on serving the local neighborhood. The project site also resides within a “Measure K” corridor. This 506
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measure, approved by Costa Mesa voters on November 8, 2022, seeks to revitalize commercial corridors by promoting new housing in commercial and industrial areas while preserving the character of adjacent residential neighborhoods.

The site is located within the 19 West Urban Plan
1 which was adopted as a residential
overlay zone by the Costa Mesa City Council on April 4, 2006. The Urban Plan’s purpose is to incentivize mixed-use development , includ ing the development of residential projects, in Westside Costa Mesa. When a Master Plan application is approved, the underlying zoning district’s development standards are superseded by the 19 West Urban Plan standards.

Exhibit 1 Vicinity & Location

The area influenced by the 19 West U rban Plan primarily consists of commercial properties located along West 19th Street situated between Monrovia Avenue and Harbor Boulevard, and also includes two other property groupings, both of which are distant from this project site.

The Urban Plan specifically allows for horizontal and vertical mixed- use developments including live/work units and residential lofts. The intent of the Urban Plan is to incentivize reinvestment in the plan boundary areas by conditionally permitting residential development. The following are urban plan’s stated objectives:

• Encourage commercial and residential mixed- use development that combines residential and nonresidential uses in a single- building (vertical mixed- use development) or in proximity on the same site (horizontal mixed-use development).

This type of development includes office, retail, business services, personal

1 https://www.costamesaca.gov/home/showpublisheddocument/315/636490563866670000

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services, public spaces and uses, and other community amenities to revitalize the area without exceeding the development capacity of the General Plan transportation system;
• Stimulate improvement in the 19 West Urban Plan area through well designed and integrated urban residential development that is nontraditional in form and design with flexible open floor plans , and which complements the surrounding existing development;
• Meet demand of a new housing types to satisfy a diverse residential population ; and
• Promote a new type of urban housing that would be target -marketed to people seeking alternative housing choices

19 th Street is considered as Costa Mesa’s “downtown” and it is one of the City’s primary commercial corridors that has a variety of one- and two-story single tenant properties and multi-tenant commercial centers. Existing businesses along 19 th Street include restaurants/bars, grocery stores, banks, pharmacy, the Department of M otor Vehicles, massage and beauty parlors, medical and general offices, retail stores, personal services, and gyms.

The project site is located directly across from an existing senior housing project known as “The Tower on 19
th“. To the west (across Pomona Avenue) is Smart & Final , a retail grocery store chain. To the south are one- and two-story multifamily residential properties along Plumer Avenue. To the east of the project site are existing commercial uses including restaurants and retail.

Excepting the Towers at 19
th property, which is designated and zoned for residential use, most properties along 19 th Street are designated General Commercial by the City’s General Plan and are zoned C1, Local Business District , similar to the subject site. The multifamily residential properties located to the south across Plumer Street are designated High Density Residential and are zoned R3-HD, Multiple Family Residential.

Also located within close proximity of the project site is the City of Costa Mesa’s Norma Hertzog Community Center, Downtown Recreation Center, Downtown Aquatic Center, Orange County Library – Donald Dungan Branch, and Lions Park.

HISTORY

The project site was originally created as Lot 501 of the Newport Mesa Tract on April 4, 1907. The site remained largely vacant during the first half of the 1900s, surrounded by rural areas and small farming communities. By the 1950s, following the incorporation of Costa Mesa in 1953, single-family residential development began to emerge to the north and south of the site. From the mid- 1950s to the 1960s, the project site was home to Costa Mesa’s City Hall. The property was then sold to a private school known as “ The 508
-7-

Mardan Center,” that operated at this location until the late 1980s, when it was reacquired by the City of Costa Mesa and demolished for the development of a new senior center.

In March of 1989, the City Council provided direction to staff to proceed with a conceptual plan for the development of a senior center and senior housing on the Mardan site. The original vision for the senior center included 46 units of senior housing at the property’s southeast corner. However, prior to presenting the project to the Planning Commission, the residential component was removed from consideration. In May 1990, the City of Costa Mesa approved Conditional Use Permit (PA -90-60) to construct an approximate 20,000 square foot, two-story senior center with 145 surface parking spaces.

The Senior Center opened in June 1992 and has continuously served the City’s senior community and for other community events. The senior center offers a wide variety of programs that include s, but is not limited to , social services, transportation, health and wellness, and meal programs. In addition to these services, the C enter hosts various classes and activities, such as knitting, quilting, ukulele, card making, adapted seated fitness, Hawaiian dance, Tai Chi, circuit training, table tennis, book club, poker, bridge, bunco, and more . The senior center is also home to several special events throughout the year , including: the New Year Cocoa Bar Social, Lunar New Year, Volunteer Appreciation Lunch, Mother’s Day Lunch, the Knowledge & Health Fair Expo, the Independence Day Lunch, the LEAO Event, Halloween Social, Thanksgiving Lunch, and Breakfast with Santa. The Senior Center also hosts “Senior Grocery Day” which occurs twice a month and is one of the Center’s most popular events . The senior center offers free membership to those age 50 and older in Costa Mesa and surrounding cities , and currently boasts over 4,000 registered members.

BACKGROUND

Since the 4
th Cycle (i.e., 2008) Housing Element was adopted, the Senior Center parking lot has been identified as a potential affordable housing development opportunity site. It was also identified in the 5th Cycle (i.e., 2013) and then, again, in the 6 th Cycle (i.e., current) Housing Elements. Housing Program 2D of the Costa Mesa 6 th Cycle Housing Element states “Pursue opportunities for senior housing on the Senior Center parcel identified as part of the candidate housing site analysis and/or other sites within the City.”

Jamboree Housing Corporation (JHC) is a local non-profit affordable housing developer that has built approximately 100 affordable housing projects throughout California consisting of over 2,000 units since 1990 . On July 21, 2020, the City Council approved an Exclusive Negotiating Agreement (ENA) with JHC. The ENA provided an exclusive opportunity for JHC to study the feasibility of acquiring a long-term leasehold interest at the site for the purpose of developing an affordable senior housing project. While the exclusivity of the ENA expired in 2022, conversations between the City and JHC continued.

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On February 20, 2024 2, the City Council reviewed JHC’s screening application for a senior affordable housing project in the Senior Center’s parking lot. The proposed project at that time included a combination of 60 independent living and permanent supportive housing units located in a podium style four-story building over surface parking. The City Council was supportive of the proposed development plan and also suggested more units and amenities, including pedestrian improvements, and supported a reduction in parking because of the project’s location in a walkable and transit-rich area.

Most recently, on July 16, 2024
3, the City Council approved an option-to-lease with JHC.

The purpose of the option-to-lease is for JHC and the City to negotiate the final form and terms of the required Affordable Housing Agreement and JHC may seek any project approvals they deem necessary or advisable. An amendment to the option-to-lease was signed on October 31, 2024, extending the term until February 28, 2025. Since the option was signed, JHC has filed their development entitlement applications and has been working with staff to bring this project to public hearing for a decision.

Lastly, JHC in conjunction with City staff held two community outreach events to engage residents and stakeholders regarding the proposed project. The first meeting took place on February 1, 2024, at the Senior Center, with approximately 40-50 attendees, including City staff. The second meeting was held on December 3, 2024, also at the Senior Center, with also approximately 40-50 attendees, including City staff. The goal of both events was to gather community input and to consider and address concerns about the project.

During both meetings, JHC provided visual presentations and responded to questions from the event attendees. Several of the topics discussed by the attendees included, but was not limited to, the cost of the units, unit eligibility, safety and security of the site, parking impacts from the new housing on the senior center operations, and parking and access during the project construction period.

REQUEST

To entitle and execute the proposed project, the following requests must be approved:

• General Plan Conformity Determination Pursuant to Government Code 65402, local governments are required to assess how proposed actions align with the adopted General Plan. Specifically, this requirement mandates that before any public agency can approve the sale, lease, or other disposition of public land, it must evaluate the proposed action to ensure it is consistent with the City’s general

2 The February 20, 2024 staff report and meeting video can be viewed links below:

Report: https://costamesa.legistar.com/View.ashx?M=F&ID=12637803&GUID=EEE1D5F1-0892-458B-A83E- 0427390D8F4D
Video: https://costamesa.granicus.com/player/clip/4088?view_id=14&redirect=true

3 The July 16, 2024 agenda report and meeting video are provided in the links below:

Report: https://costamesa.legistar.com/View.ashx?M=F&ID=13131729&GUID=AA1A0DDF-AF8E-4BC5-9D84- 7FA75FD29613
Video: https://costamesa.granicus.com/player/clip/4153?view_id=14&redirect=true

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plan in regard to location, purpose and extent . The location, purpose, and extent are described in this agenda report and also extensively detailed in draft agreements between the City and JHC, further described below.

• Tentative Parcel Map 2023-160 is required pursuant to Municipal Code Chapter III Planning Applications, Section 13- 28(r) for the proposed subdivision of the existing 2.66-acre property into two parcels . This subdivision will create a legal description for a portion of the property that JHC is to lease from the City, and that can specifically be referenced in other documents where JHC needs to demonstrate “site control” for purposes of obtaining project financing.

Notwithstanding a ground lease, ownership of the subject property will remain with the City.

• Master Plan PMAP-24-0001 is required pursuant to Municipal Code Chapter III Planning Applications, Section 13-28(g) to establish the overall development plan (i.e., site layout, building placement, architecture, floor plans , parking, and landscaping, etc.) for the proposed residential project . In this case, an approved master plan will result in the property’s underlying zoning district regulations being superseded by the 19 West Urban Plan overlay zone provisions.

• Density Bonus pursuant to Municipal Code Chapter III Planning Applications, Section 13-28(c) is required to consider any request for incentives to produce lower income and senior housing per State Government Code Section 65915. Given that the proposed property lease constitutes a “direct financial incentive” to the applicant, the proposed project requires the City Council to act as the final project review authority. Pursuant to Density Bonus Law (Government Code Section 65915(b)(1)(G), this project is providing 100 percent of all units in the development, excluding the manager’s unit, for occupancy by lower income households as defined by Section 50079.5 of the Health and Safety Code. Pursuant to Government Code Section 65915(d)(2)(D) this lower income occupancy grants the project five incentives or concessions , including the potential of required parking waivers.

• Affordable Housing Agreement and Affordable Housing Plan Because the project has at least 50 for-rent residential units, pursuant to City Council Ordinance 2024-02 (Costa Mesa Municipal Code Section 13- 333), the applicant is required to submit a draft affordable housing agreement and affordable housing plan with its planning applications. These documents are normally subject to review by the Director of Economic and Development Services to determine if they are complete and in substantial conformance with applicable requirements. However, this project is unique in that it will occur on land owned by the City , and therefore the Affordable Housing Agreement has been integrated into the Disposition and Development Agreement to be considered by the City Council. The Affordable Housing Plan is included in the project submittal.
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• Draft Disposition and Development Agreement (DDA) / Affordable Housing Agreement (AHA) (including a Regulatory Agreement) and Ground Lease.

The proposed project’s location on City property requires City Council approval of a DDA/AHA and Ground Lease. The draft agreements are included collectively as Exhibit 15 and presented to the Planning Commission to support the aforementioned General Plan Conformity determination. The terms of the DDA / AHA and ground lease are briefly summarized as follows:

An affordability term for the project of 99 years, which exceeds the required 55-year minimum
A ground lease for 99 years, with a re-opener option at 55 years to consider any changes from either party
Sets forth timing requirements to coordinate JHC’s development timing with execution of agreements and lease
Includes an easement on the underlying proposed parcel (to be ground lease) to retain public access and parking areas
Requires the ground lease area to be used as a senior residential project affordable to lower-income seniors
Requires JHC to maintain and make necessary repairs to the ground lease area, including the future residential project, grounds, driveways, parking areas, and landscaping.
Contemplates coordination of residential programming areas with the Senior Center to allow for special events
JHC to use best efforts to provide rental priority to residents of Costa Mesa, including those displaced by City activity, or those who live and/ or work in the City.
Requires the following to be approved by the City:
 Property management plan, including tenant selection
 Social services program
 Parking management plan

DESCRIPTION

The proposed project includes a 93,972 square-foot (including the first-floor parking area), four-story building with 70 residential units designed over a podium garage. The maximum building height is proposed approximately 57.5 feet. It is designed in a Spanish- revival style that has asymmetrical proportions, useable resident balconies, numerous decorative windows, and utilizes changes in elevation plane to provide for articulation and light. Together, these features create a building that provides visual interest at a scale that is appropriate for West 19
th Street.

Thirty-five of the proposed housing units must be occupied by low-income (60% to 79% of area median income) senior households for independent living. Thirty-four units are proposed as permanent supportive housing units occupied by very -low income (30% to 512
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59% of the area median income) senior households. O ne unit will be un -restricted and occupied by an on-site resident manager.

One-bedroom units make up 68 of the project’s 70 units. There are three different floor plans for the one-bedroom units ranging in size from 566 square feet to 614 square feet.

The two-bedroom units, which includes the on- site manager’s unit, are proposed to be 855 square feet.

The proposed ground floor building area screens the podium parking from West 19 th
Street. The proposed ground floor uses include the building’s lobby, leasing office, staff administrative rooms, and amenity spaces (flex/group room, community room, and game lounge/media room). The building’s public -facing front door , identification signage, and large ground floor windows improve the project’s pedestrian scale. The building’s second floor provides additional indoor amenities such as a fitness center, library/computer room and pet spa. Outdoor amenities located on the parking podium’s roof deck (2 nd floor) includes a fitness lawn, multi -use lawn, lounge area, patio dining, and a community garden. The second-floor outdoor space is oriented towards and is open to the south (facing Plumer Street) and the building’s fourth level steps back thereby allowing natural sunlight to fill this space. Laundry rooms and trash chutes will be provided on the second, third, and fourth floors for resident convenience.

When completed, 133 parking spaces will be available in the podium garage and adjoining surface lot. The site parking will be used by both the Senior Center and the senior affordable housing units. A ground lease between the City and JHC, and parking management plan will be the mechanisms used to establish how parking will be managed to ensure adequate parking is available for both the Senior Center and the residential project.

State Density Bonus law permits 100-percent affordable project s (excluding the manager’s unit) to be entitled to five concessions and an unlimited number of waivers .

The purpose of a concession and/or waiver is to result in identifiable and actual cost reductions to provide for affordable housing costs. Pursuant to State Law, r equested concessions and waivers are to be granted unless the City, who bears the burden of proof per State law, can show that: (1) identifiable and actual cost reductions would not result, or (2) the request would have a specific adverse impact upon public health and safety or on any real property listed in the California Register of Historical Resources and for which there is no feasible mitigation, or (3) the request would be contrary to State or federal law.

The applicant is using their available concessions to deviate from standards related to open space, residential open space per unit, front setback, parking stall width adjacent to vertical obstructions, and floor area ratio.

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ANALYSIS

Tentative Parcel Map

The proposed tentative parcel map would subdivide the existing 2.66-net acre City-owned property into two separate parcels . Parcel 1 (1.16 acres) generally inc orporates the existing Senior Center building and would be at the western portion of the existing property with street frontage along West 19
th Street, Pomona Avenue, and Plumer Street.

Parcel 2 (1.50 acres), which would accommodate the new proposed senior housing project and a majority of the existing parking lot, would be located at the eastern portion of the existing property with street front age on both West 19 th Street and Plumer Street.

The proposed lots satisfy the 19 West Urban Plan’s minimum lot area requirement of one acre. See the attached “Preliminary Grading Plan and Tentative Parcel Map No. 2023- 160”.

The purpose of the proposed subdivision is to facilitate JHC’s ability to successfully compete for tax credits that are necessary in financing affordable housing projects.

According to JHC, a separate parcel/legal description is a pre- requisite to receive tax credits through the Low-Income Housing Tax Credit (LIHTC) program, which is a federal incentive program that awards tax credits to housing developers and their partners (or investors) in exchange for developing affordable housing. By subdividing the proper ty, JHC will satisfy the legal prerequisite for having a separate parcel/legal description. The separately considered affordable housing agreement and ground lease between the City and JHC will address all other legal relationships and obligations of the parties.

Master Plan

Site Design
The location of the residential building is proposed in the northeasterly corner of Parcel 2 (see the below Exhibit 2). The applicant is requesting approval of a density bonus concession to allow the development adjacent to West 19th Street to project 14.5-feet into the urban plan’s required 15-foot setback. Although this is a significant reduction in required setback, it should be noted that the adjacent West 19th Street parkway is 21 feet in total width which includes a four-foot-wide sidewalk and 17 feet of landscaping area.

Essentially, based on the significant Parkway width, the building as viewed from West 19th Street appears to have a significant setback , and does not create an aesthetic massing impact.

Except for relocating the existing easterly driveway to the west, the existing parkway will remain unchanged. Where the driveway is removed , new sidewalk and landscaping will be installed to match the existing public right -of-way conditions . Because of the new driveway’s location, the existing median within 19
th Street will be extended 10 feet to the
east to prevent drivers from attempting a left turn into the site.

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The project will provide a 10-foot east side yard setback along the common property line with Mouse Graphics. This setback exceeds the urban plan’s allowance for a 0- foot setback along interior property lines. Additionally, there is an existing low block wall separating Mouse Graphics from this site. The plans call for this wall to remain and for the 10-foot setback to be improved as a fenced-in dog run.

To the west, the proposed building is located approximately 100 feet from the Senior Center structure and 150 feet from Pomona Avenue. This distance exceeds the 0- foot setback allowed by the urban plan. This area accommodates open parking and the through drive-aisle that provides direct access to the Senior Center via Plumer Street and West 19
th Street, as well as access to all parking spaces.

Exhibit 2 Site Plan

The new residential building will maintain an approximate 66- foot setback to the rear property line adjacent to Plumer Street. This distance far exceeds the urban plan’s setback of 10 feet when abutting a public street , and the 20 feet required when directly abutting a residential zone. The site located between the residential building and Plumer Street is proposed to be improved with two rows of surface parking accessed by a two- way drive-aisle. The project proposes to add several new landscape islands in the parking lot. With few exceptions, including the location of the proposed new driveway and the 515
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removal of an existing eucalyptus tree, parkway landscaping along Plumer Street will be protected in place. Removal of the aforementioned tree was recommended by a certified arborist as the root crown decay has significantly affected the tree’s structural stability.

Local Circulation and Pedestrian Access
The site design includes accessible pathways that connect the residential building to both the Senior Center and adjacent public sidewalks. West 19 th Street is developed with significant walking, transit, and cycling opportunities, which are used in high demand by the local community. A full complement of accessible sidewalks and crosswalks are also present in the area. A bus stop is located immediately in front of the adjacent Senior Center, which accommodates one route providing service between Newport Beach, Costa Mesa, and Santa Ana. West 19th Street has also recently been upgraded with active transportation improvements such as high visibility crosswalks, concrete bulb-outs, traffic signals, pedestrian signals, street lighting and includes one travel lane in each direction shared by both cars and cyclists. A bicycle rack is provided with the current project and will supplement the existing bicycle rack located adjacent to the Senior Center.

Exhibit 3 Eucalyptus Tree To Be Removed
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Open Space - Development Lot
The applicant is requesting a State Density Bonus concession for the required 30 percent open space for the development lot pursuant to the 19 West Urban Plan. This open space requirement applies only at the ground floor level and does not include improvements such as driveways, parking lots, and upper floor decks. The project proposes 3, 297 square feet of development lot open space, which does not meet the required 19,602 square feet of development lot open space. With approval of the State density bonus law concession, the project would not need to comply with this standard.

Open Space - Residential Unit
The applicant is requesting a State Density Bonus concession for the required 200 square feet of residential open space per unit pursuant to the 19 West Uran Plan. The residential open space may be a combination of private and common open space areas. The project proposes 11,857 square feet of residential open space per dwelling unit, which does not meet the required 14,000 square feet of residential open space.

With approval of the State density bonus law concession, the project would not need to comply with this standard.

Floor Area Ratio and Maximum Density
Instead of regulating a maximum density requirement that is typical of most residential districts located within the City, the 19 West Urban Plan applies floor area ratio (FAR) to Exhibit 4 Pedestrian Connectivity
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regulate the size of buildings relative to the size of the lot. The maximum allowed FAR is

1.0, which means that on a hypothetical one-acre lot (43,560 square feet), the maximum building size is 43,560 square feet. The project proposes a 93,972 square-foot building (including the first-floor parking area) and exceeds the required 1.0 FAR. However, State Density Bonus Law exempts 100- percent affordable housing projects from compliance with both FAR and density standards when located within one-half mile of a “major transit stop”. Since the project is located within one-half mile of a major transit stop, the proposed development is not subject to the City’s FAR standards.

Parking
Pursuant to the 19 West Urban Plan, residential projects are typically subject to a parking ratio requirement of 1.5 parking spaces for each one-bedroom unit , and two parking spaces for each two-bedroom unit. Neither the City’s Parking Ordinance nor the 19 West Urban Plan specifies any exception in required parking for affordable or senior housing projects. Therefore, a 70-unit residential project requires 141 parking spaces (106 tenant spaces and 35 guest spaces). However, the project as proposed is subject to recently adopted State law parking exemptions . Specifically, the project is an applicable development subject to Assembly Bill (AB) 2097, since it is located within one- half mile of two major transit stops. P ursuant to AB 2097, the City is barred from imposing a minimum parking requirement on the project. In addition, as a 100- percent affordable housing project, State Density Bonus Law also entitles the proposed development to be exempted from the requirement of parking.

As proposed, 133 parking spaces will be provided on-site with 59 spaces located within the footprint of the new senior affordable housing project, and 74 parking spaces located in the surface parking lot (see Table 4). All parking spaces are open – that is, there are no gates controlling access to the covered/podium parking spaces , and all drive- aisles are interconnected, which allows any vehicle on the site to freely drive between open and covered/podium parking spaces without constraint.

Exhibit 5 Parking Distribution Summary

Parking Location Number of Parking Spaces Provided
Covered/Podium 59
Surface (Proposed parcel) 66
Surface (Remaining parcel) 8
Total 133

Although the project is exempt ed from providing a minimum number of parking spaces, staff and the applicant assessed whether adequate parking will be provided to meet the parking demand of both the residential project and the Senior Center. As such, t wo 518
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studies were independently prepared to assess the combined parking demand for the proposed senior affordable housing and the Senior Center operations . One study was prepared by the applicant (Linscott, Law & Greenspan (LLG), August 21, 2024), and an independent additional study was contracted directly by the City (LSA, 2024).

Based on empirical parking data from two similar JHC project’s (both located in Orange County), the peak parking demand for the residential component was determined by LLG to be 0.57 parking spaces per unit. Therefore, applying this ratio to the project site, the proposed 70-unit residential project is estimated to demand 40 spaces (70 units x 0.57 spaces per unit). In addition, LLG estimated the peak average day parking demand for the Senior Center to be 75 parking spaces. LLG concluded that the Costa Mesa Senior Center and proposed residential project would have a combined parking demand of 115 spaces during a typical weekday which would result in a parking surplus of 18 spaces when compared to the proposed parking supply of 133 spaces. On a “special event” day (i.e. Senior Grocery Days), the Center’s peak parking demand i ncreases to 90 parking spaces. According to City Senior Center staff, “special events” occur approximately 10 times per year. During a special event, the Senior Center and proposed residential project would have a peak parking demand of 130 spaces, which leaves a surplus of three parking spaces as compared to the proposed parking supply of 133 spaces.

Since the senior demographic is the fastest growing demographic in the region, LSA, the City’s consultant, studied and projected the Senior Center’s future parking demand using attendance data from the Senior Center and State population projections. LSA estimates that by 2030, the average parking demand for the Senior Center could increase to 92 spaces, and by 2040, the Center’s parking demand could increase to 115 spaces. The LSA analysis concluded that these parking demands would peak between 11 a. m. and 1 p. m. (before and after this window, adequate parking is anticipated to be available on the site) on busy days assuming that behavior then is the same as it is today. Al though there may be a small timeframe when parking supply would be impacted in future year scenarios, LSA believes that either operational or programming changes could mitigate this impact, or that the City could encourage ride share or other travel options to reduce the demand for parking. As this is not an immediate impact and operational considerations can adjust demand, the 133 parking spaces are deemed adequate to meet the combined need of the Senior Center and the senior affordable residential project.

Community Services staff currently monitors and will continue to monitor attendance at their programs and services, and will adjust as necessary to ensure a balance between parking demand and parking supply.

In addition, the applicant’s parking demand analysis included a section devoted to parking management (“Parking Management Plan” or “ PMP”). This component of the analysis made recommendations for “objectives” to manage on-site parking between the two uses.

According to the applicant’s parking analysis, a PMP would be submitted to the City and will include measures to ensure the site parking supply is consistent with the operational demand of the Senior Center and the senior affordable housing units. The PMP will include, but is not limited to, requirements that restricts senior housing tenants from 519
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parking in the surface parking lot, requiring tenants to obtain a residential parking permit (with only a limited number of permits issued based on capacity ) and that if additional parking is needed in the future, the senior housing management company will be required to obtain off -site parking or implement a valet assist parking program (other parking mitigation measures may also be considered). The PMP would be a separate document that could be adjusted by the City, as needed, and would be required to be submitted and approved prior to building occupancy.

Lastly, all parking spaces in the surface parking lot have been designed to comply with the City’s minimum parking stall dimensions. However, within the parking podium when a stall is located adjacent to a vertical obstruction, the City’s parking provisions require that the stall be designed one-foot wider to accommodate vehicle door swing. The proposed project includes 38 columns located adjacent to spaces with in the covered parking area. These columns are located four feet from the drive -aisle and, in most circumstances would be positioned beyond a car’s rear doors. Nonetheless, because there is the potential for these columns to pose an obstruction, the City requested each of these stalls to be one-foot wider. After evaluating staff’s request, the architect advised that one additional foot of width for every parking space next to a column would result in a net decrease of parking spaces in the project. Therefore, the applicant is applying one of their State density bonus law concessions to allow for an exception for the additional one-foot of parking stall width. The resulting parking stall width dimension complies with the City’s minimum standard, and the location of the column is generally located where the average vehicle’s door swing would not be compromised.

Floor Plan
The proposed building includes 68 one-bedroom units, and two-bedroom units. There are three different one- bedroom floor plans that range in size from 566 s quare feet to 614 square feet. The two-bedroom units are proposed with an 855 square-foot floor area (see the below Exhibit 6 for a more detailed summary of the proposed units).

Exhibit 6 Unit Mix Summary

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The building’s ground- level devotes a portion of the first -level footprint to the building’s entry lobby, staff offices, mail room, stairwells and an elevator, restrooms, and amenity spaces such as a flex/group room, community room, game and media lounge.

The second level contains 24 residential units and other amenities such as a laundry room, trash chutes, fitness center, library/computer room, and a pet spa ( see Exhibit 7).

The second floor also provides access to a number of outdoor amenities located on the roof level of the podium parking deck. These amenities include an outdoor fitness lawn adjacent to the indoor fitness center; a multi -use lawn used for lawn games and yoga or tai chi; a lounge/sitting area for relaxing and socializing; a community garden that will have raised planting beds, work tables and storage, and seating beneath a pergola; and a patio dining area consisting of a barbeque counter and several disbursed dining tables for smaller and larger groups.

The third floor contains 26 residential units , and the fourth floor has a reduced footprint because it is stepped back to allow more natural sunlight into the courtyard below. There are 20 residential units on the fourth floor.

All doors, thresholds, hallways, and restrooms whether in common areas of the building or in private units are designed to be universally accessible pursuant to the Building Code.

This includes ensuring that doorways are wide enough to accommodate wheelchairs and mobility devices . Hallways are designed to allow for easy navigation, featuring ample space for turning and maneuvering. Restrooms are equipped with grab bars, accessible sinks, and roll-in showers to enhance safety and convenience for all residents.

Additionally, tactile floor markings and clear signage will guide residents and visitors throughout the facility, further promoting resident independence and ease of movement.

These thoughtful design elements not only comply with accessibility regulations but also create a welcoming and safe environment for seniors.

Elevations
The building is designed in the Spanish-revival architectural style and includes a red-clay tile roof, lighter-colored stucco, decorative red-clay gable tile vents, and radius corners at entryways and forward- projecting ground floor windows. The building is proposed a maximum height of 57’ - 6”, and therefore complies maximum 60-foot height limit allowed by the 19 West Urban Plan.

The building’s mass and bulk is well-proportioned on each elevation through its use of a taller ground-floor plate height, articulated c orners, and varied roof heights. Balconies help to delineate each floor level and also add visual interest through the interplay of shadow and light that’s created along the building’s façade. The rear elevation is open and steps the building back at the fourth floor to allow more natural light into the second level outdoor recreation area. The ground floor is proportionally designed to provide a 521
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“human scale” which enhances the building’s pedestrian-friendly orientation and aesthetic (see Exhibit 8).

Exhibit 8 Elevation from West 19th Street

Exhibit 7 Second Floor Plan with Indoor and Outdoor Amenity Spaces 522
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Construction Phasing Plan
The applicant indicates that the project will be constructed in two phases spanning a period of 22 months from November 2025 until September of 2027. “Phase 1” involves demolition and site grading, along with the installation of infrastructure, start of public right-of-way improvements, and construction of the building’s podium structure. “Phase 2” will focus on modifications to ingress and egress, completion of right -of-way improvements, and finalization of the building and site work including landscaping.

JHC is committed to ensuring that the project is constructed efficiently and in a timely manner (see the below Exhibit 9), meeting the funding deadlines and expectations of both project lenders and investors. To minimize disruptions, JHC’s management team and construction managers will maintain open communication with City staff and the Senior Center operators.

Exhibit 9 Construction Milestones
Milestone Projected Timing
Construction Closing November 2025
Construction Start November 2025
Construction Completion September 2027
Lease Up Begins September 2027
100% Qualified Occupancy February 2028

Recognizing that construction activity will impact how members utilize the Senior Center during the temporary construction period, JHC has prepared a construction parking management plan. As contemplated by JHC, a various amount of site parking will always be available during construction based on construction activities, and the specific phases of construction. In response to Senior Center parking limitations, JHC is actively engaging with nearby businesses, such as “Smart & Final ”, and property owners like “ The Lighthouse Church” to explore potential off -site parking solutions during the project’s construction phases. The parking management plan is currently being reviewed by City staff and incorporates the use of vans to shuttle individuals to and from remote parking lot(s) on demand, and the use of free valet. Staff and JHC are analyzing the need to provide a sufficient parking that is secure and ADA -compliant and provides clear wayfinding si gnage. During construction, the parking situation will also be actively managed by a professional valet service. Staff and JHC have also committed to having regular “check-ins” to evaluate the success or shortcomings of the shuttle system and to make any adjustments immediately in response to the needs of our senior population.

JHC is also committed to being a good neighbor and will engage with the Senior Center 523
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and adjacent community prior to commencing construction to share schedules and seek collaborative input on how to resolve potential concerns.

Density Bonus

State Density Bonus Law (Government Code Section 65915 et seq.) (collectively, Density Bonus Law or DBL) and Costa Mesa Municipal Code (CMMC) Section 13-152 (Density Bonuses and other Incentives) entitles applicants to project density increases, incentives or concessions, waivers or reductions of development standards, and reduced parking ratios to encourage the construction of affordable housing units.

This project is proposed to be a Density Bonus project. All of the units in the project, excepting the manager’s unit, will be affordable to lower-income households. Because of this, the project is entitled to a maximum 80 percent density bonus over the number of base units in the project. The applicant, JHC, is not proposing to increase the number of dwelling units pursuant to State Density Bonus Law; however, as a qualifying project, they are entitled to five incentives or concession and an unlimited number of waivers that result in identifiable cost reductions to assist in the development of affordable units.

Incentives or concessions are defined in State Density Bonus Law as:

• R eduction in site development standards or a modification of zoning code requirements or architectural design requirements that result in identifiable, financially sufficient, and actual cost reductions;
• A pproval of mixed-use zoning; and
• O ther regulatory incentives or concessions that result in identifiable, financially sufficient, and actual cost reductions.

JHC is requesting approval of f our of its five allowed State Density B onus Law concessions to the following development standards (see the below Exhibit 10).

Exhibit 10 Concessions from Development Standards
Development Standard Urban Plan Standard DBL Concession Open Space – Development Lot 30% (19,619 SF) 5.04% (3,297 SF) Residential Open Space 200 SF (14,000 SF) 169 SF (11,857 SF) Front Setback along W. 19th St. 15 FT 0 FT 6 IN
Parking Stall Width next to Column 1-foot additional1 0 foot 1 Pursuant to the City of Costa Mesa Parking Design Standard

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Affordable Housing Agreement and Affordable Housing Plan

The City’s recently adopted Affordable Housing Ordinance, Costa Mesa Municipal Code Chapter 13- XVII. This ordinance applies to any proposed residential or mixed- use development with 50 or more dwelling units . The proposed project meets this threshold as it contains 70 residential rental units . As such, the project is to provide both an Affordable Housing Agreement and an Affordable Housing Plan for City Council review.

Except for the on- site resident manager’s unit, all other units in the project will be affordable. As seen in Exhibit 11 below, the project will be restricted to both 30% and 60% AMI senior affordable housing, with all units guaranteed to remain affordable for a minimum of 55 years.

Exhibit 11 Affordability Levels

AMI One Bedroom Two Bedroom Population Served
30%
(Very Low-Income)
33 1 Senior Homeless / At
Risk of Homelessness
(“PSH”)
60%
(Low Income)
35 - Senior
Unrestricted - 1 Manager’s Unit

While the ordinance primarily applies to market-rate developers, it equally applies to this 100% affordable senior housing development . As stipulated in the Affordable Housing Ordinance, the Affordable Housing Agreement and Affordable Housing Plan are essential components of the residential project. This project Housing Agreement and Plan addresses the ordinance's requirements by detailing the location, structure, proposed tenure, and size of both market -rate and affordable units, along with calculations for the total number of required affordable units. It includes floor plans and site plans for the affordable units, specifies income level targets, and outlines mechanisms to ensure long- term affordability. Additionally, a marketing plan will facilitate the selection of qualified households for the affordable units, while a construction phasing plan will provide a schedule for anticipated completion and opening dates, ensuring an efficient rollout that aligns with the community’s timeline for senior housing availability. In short, the project as proposed is in compliance with the City’s affordable Housing Ordinance, and exceeds the City’s minimum affordable housing provisions.

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GENERAL PLAN CONFORMANCE

The City’s 6th Cycle Housing Element has identified the Senior Center parking lot as a potential site for affordable housing to assist in reaching the City’s 2021-2029 Regional Housing Needs Allocation (RHNA) requirement. The City’s current Housing Element also highlights policies and housing programs targeting the needs of senior populations. The proposed project will provide 35 low -income rental units for seniors, along with 34 very - low income rental units dedicated to permanent senior supportive housing.

Pursuant to Senate Bill 166 [Government Code Section 65863], the “No Net Loss Law” was recently amended to ensure that housing development opportunities remain available throughout the housing element planning period to accommodate a jurisdiction’s regional housing needs assessment (RHNA). One key requirement of this legislation states that “If the city approves a development of a parcel identified in its Housing Element sites inventory with fewer units than shown in the Housing Element, it must either make findings that the Housing Element’s remaining sites have sufficient capacity to accommodate the remaining unmet RHNA by each income level or identify and make available sufficient sites to accommodate the remaining unmet RHNA for each income category”. The subject parcel is identified in the City’s Housing Element Sites Inventory List to provide 40 very low-income units and 20 low-income units, totaling 60 units. The project proposes 34 very low-income units, and 35 low-income units, resulting in a site shortfall of six very-low-income units. While the number of very low-income units is slightly reduced and the low-income units are significantly increased based on the City’s RHNA requirement, the overall total unit count has risen by 10 residential units, bringing the overall total to 70 affordable units. However, due to the deficiency in very-low income units, as specified in the City Housing Element “Site Analysis”, the City is required to make No Net Loss findings pursuant to Government Code Section 65863. The finding can be made as the Housing Element “Site Analysis” includes a planned surplus of very-low-income housing units. This required finding is provided below in the “Findings” section of this report.

Ultimately, this senior affordable housing project at the Senior Center site fulfills the goals, objectives, and policies of the general plan by providing new housing opportunities that meet the needs of the growing senior population and will create new temporary construction employment opportunities within the City. The following analysis further evaluates the proposed project’s consistency with specific policies and objectives of the 2015-2035 General Plan.

1. Policy LU -1.1: Provide for the development of a mix and balance of housing opportunities, commercial goods and services and employment opportunities in consideration of the need of the business and residential segments of the community.

Consistency: Approval of the proposed senior affordable housing development would provide a new housing opportunity in Costa Mesa that 526
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would cater to the growing senior community. The development will enhance the community’s housing stock and also promote a balanced environment by integrating social services and amenities tailored to senior residents, thereby fostering a supportive living atmosphere. Employment employment will be created by the temporary construction activities and from the new senior amenities and programs.

2. HOU-2.1: Facilitate the development of housing that meets the needs of all segments of the population including affordable housing and households with specialized needs.

Consistency: By providing affordable housing tailored for seniors, the project addresses both the housing needs and specialized requirements of low-income seniors. This development enhances the community's overall housing diversity, ensuring that vulnerable populations have access to safe and supportive living environments.

3. HOU-2-4: Encourage housing programs and future actions that address the need for affordable housing options as well as the housing needs of Costa Mesa’s senior resident population and the large households’ population.

Consistency: The approval of this project would add a new affordable housing option dedicated for seniors that would enhance the accessibility and stability for this demographic.

4. PROGRAM 2D: Facilitate Development of Senior Housing Options.

Consistency: In partnership with the City, the developer proposes to develop senior housing on a portion of the Senior Center parcel identified in the City Housing Element candidate housing site analysis.

California Government Code Section 65402(a)

Pursuant to California Government Code Section 65402(a) , “If a general plan or part thereof has been adopted, no real property shall be acquired by dedication or otherwise for street, square, park or other public purposes, and no real property shall be disposed of, no street shall be vacated or abandoned, and no public building or structure shall be constructed or authorized, if the adopted general plan or part thereof applies thereto, until the location, purpose and extent of such acquisition or disposition, such street vacation or abandonment, or such public building or structure have been submitted to and reported upon by the planning agency as to conformity with said adopted general plan or part thereof.” The long-term leasing of real property to a private entity by the City is subject to Section 65402(a). Pursuant to Section 65402(a), staff has provided below , for Planning Commission (“Planning Agency”) consideration, an analysis for determining General Plan project conformance in regard to location, purpose and extent:
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Location of the Ground Lease
The proposed property ground lease area is located in the eastside portion of the City’s Senior Center p arking lot . The proposed ground lease location for the development of affordable senior housing units is compatible with the adjacent Senior Center in that both the existing use and proposed use serve the same populations. In addition, most of the services provided by the City’s Senior Center at this location caters to the senior population that would be housed at the proposed affordable senior housing development. There is also another senior housing development (“Towers on 19 th”) located across the street at 678 West 19th Street which includes an affordability covenant and Section 8 housing units; therefore, the proposed location of the development is neighborhood compatible . The location of the property ground lease disposition is consistent with numerous General Plan policies regarding affordable housing, and providing for the development of a mix and balance of housing opportunities, in consideration of the need of the business and residential segments of the community . Lastly, the site is identified in the City’s General Plan Housing Element as a location to plan for senior housing.

Purpose of the Ground Lease
The purpose of the ground lease is consistent with the General Plan Housing Element Program 2D regarding development of affordable senior housing on the site specified specifically by the City’s Housing Element, and the purpose of numerous Housing Element General Plan polices such as, but not limited to, Housing Element Policy 2.1 which states to “f acilitate the development of housing that meets the needs of all segments of the population including affordable housing and households with specialized needs ”, and Housing Element Policy 2-4 which states to “e ncourage housing programs and future actions that address the need for affordable housing options as well as the housing needs of Costa Mesa’s senior resident population and the large households’ population”.

Extent of the Ground Lease
The proposed ground lease is for the use and development of an 1.5 acre portion of the existing 2.66-acre City-owned Senior Center property. The lease area is limited to a portion of the Senior Center parking lot. The extent of the use and lease area would be exclusive for the purposes of providing an affordable senior housing development.

The City of Co sta M esa General Plan Housing Element Program 2D specifies to “facilitate development of senior housing options” and specifically identifies the Senior Center as a development option that is to be considered for this use. The City’s Housing Element specifies that 60 affordable units shall be provided, and the application provides for more than 60 units and therefore the extent of the ground lease and associated project complies with the General Plan.

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FINDINGS

Pursuant to Title 13, Section 13- 29(g)(13), Findings, of the CMMC, in order to approve the project, the Planning Commission must find that the evidence presented in the administrative record substantially meets the following applicable required Tentative Parcel Map findings:

• The creation of the subdivision and related improvements is consistent with the general plan, any applicable specific plan, and this Zoning Code.

The creation of the subdivision aligns with the General Plan by promoting residential development that meets the community's housing needs. Additionally, the subdivision complies with the local Zoning Code and State laws by conforming to established development regulations. Overall, this project supports the C ity's vision for balanced development and affordable senior housing.

• The proposed use of the subdivision is compatible with the general plan.

The proposed development aligns with the General Plan by addressing the critical need for affordable housing options for seniors within the community. Located in the 19 West Urban Plan area, this development promotes the C ity's goals of increasing residential density while enhancing accessibility to essential services and transportation.

Furthermore, the project supports the General Plan's emphasis on creating inclusive neighborhoods, thereby fostering a supportive environment for vulnerable populations and contributing to the overall well-being of the community.

• The subject property is physically suitable to accommodate the subdivision in terms of type, design and density of development, and will not result in substantial environmental damage nor public health problems, based on compliance with the Zoning Code and general plan, and consideration of appropriate environmental information.

The proposed development will be situated in an urbanized area, specifically on a portion of the existing Senior Center's asphalt parking lot. The site meets the minimum lot size requirement and is a typical shaped lot that can accommodate the building and necessary utilities. The soils are consistent with those of the existing Senior Center and nearby apartment building across West 19
th Street, consisting of soil with no
significant differences and/or known contaminants. There are no wildlife habitat or bodies of water on the site or nearby, further ensuring that the development will not result in substantial environmental damage. This strategic location allows for the efficient use of already developed land, minimizing the need for additional site disturbance and preserving green spaces elsewhere in the community. By repurposing this underutilized area, the project will enhance the functionality of the S enior Center while providing much-needed affordable housing for seniors. 529
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• The design of the subdivision provides, to the extent feasible, for future passive or natural heating and cooling opportunities in the subdivision, as required by State Government Code section 66473.1.

The design of the proposed development thoughtfully considers the orientation of the lot, aligning in a manner that maximizes solar exposure, ensuring natural passive heating during colder months. Additionally, the layout incorporates an outdoor courtyard at the center of the development and green spaces to promote natural airflow and cooling, minimizing the need for artificial heating or air condition. This approach reflects the principals outlined in State Government Code section 66473.1.

• The division and development will not unreasonably interfere with the free and complete exercise of the public entity and/or public utility rights -of-way and/or easements within the tract.

The proposed development has been designed to ensure that all existing public entity and utility rights-of-way and easements within the subdivision remain accessible and unobstructed. Coordination with utility providers and the C ity will be maintained throughout the development process to avoid any disruptions and ensure that essential services can continue to operate efficiently.

• The discharge of sewage from this land division into the public sewer system will not violate the requirements of the State Regional Water Quality Control Board pursuant to Division 7 (commencing with State Water Code section 13000).

The applicant has submitted a Preliminary Water Quality Management Plan (PQWMB), which demonstrates that the project will implement best management practices to effectively manage wastewater and prevent any violations of water quality standards.

Pursuant to Title 13, Section 13-29(g)(5), Findings, of the CMMC, in order to approve the project, the Planning Commission must find that the evidence presented in the administrative record substantially meets the following applicable required Master Plan findings:

• The master plan meets the broader goals of the General Plan, any applicable specific plan, and the Zoning Code by exhibiting excellence in design, site planning, integration of uses and structures and protection of the integrity of neighboring development.

The proposed development is consistent with the broader goals of the General Plan by promoting housing opportunities, as specified in General Plan Land Use Policy LU-1.1, Housing Element Policies HOU- 2.1, and Housing Element Policy 2-4. The project is 530
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designed to integrate with the existing Senior Center, enhancing community services and accessibility, which supports the 19 West Urban P lan’s emphasis on mixed- use development. Additionally, the design reflects high-quality architectural standards and thoughtful site planning that maintain the character and integrity of the surrounding residential and commercial areas. By prioritizing community amenities, the development fosters a sense of place while contributing to the overall livability of the highly urbanized environment.

• Master plan findings for mixed -use development projects in the mixed- use overlay district are identified in Chapter V, Article 11, mixed-use overlay district.

The proposed development complies with the master plan findings outlined in Chapter V, Article 11 of the Mixed- Use Overlay District, which are further detailed in the following section.

• As applicable to affordable multi -family housing developments, the project complies with the maximum density standards allowed pursuant to the general plan and provides affordable housing to low or very-low income households, as defined by the California Department of Housing and Community Development.

The project includes long-term affordability covenants in compliance with State law.

The proposed development of 69 units of affordable senior and permanent supportive housing complies with the General Plan’s requirements by providing affordable housing to low and very -low-income households, as defined by the California Department of Housing and Community Development. While the 19 West Urban Plan does not establish specific density standards, the project adheres to the instead required Floor Area Ratio (FAR) guidelines, ensuring efficient use of the site. Of the 69 affordable units, 34 are set aside for seniors experiencing homelessness with incomes at or below 30% of the Area Median Income (AMI), while another 35 units are designated for seniors with incomes at or below 60% of the AMI. Furthermore, all units will be guaranteed to remain affordable for a minimum of 55 years through the associated regulatory agreements.

Additionally, pursuant to Costa Mesa Municipal Code Section 13- 83.53(c), Findings, in order to approve the project, the Planning Commission must find that the evidence presented in the administrative record substantially meets the following applicable required Master Plan findings within a mixed-use overlay district:

• The project is consistent with the general plan, meets the purpose and intent of the mixed -use overlay district, and the stated policies of the urban plan as applicable.

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The proposed development is consistent with the General Plan and meets the purpose and intent of the mixed- use overlay district by integrating residential uses within the context of the existing Senior Center. This project not only provides much- needed housing for seniors but also complements the area’s revitalization goals by enhancing the mix of uses, promoting community amenities, and encouraging accessibility to nearby commercial services. Additionally, the development supports the urban plan’s policies by maximizing site utilization without exceeding the capacity of the General Plan transportation system, ultimately attracting more residents and fostering a vibrant, mixed-use environment.

• The project includes adequate resident -serving amenities in the common open space areas and/or private open space areas in areas including, but not limited to, patios, balconies, roof terraces, walkways, and landscaped areas.

The proposed development includes a variety of resident-serving amenities within both common and private open space areas. Ground-level amenities facing 19th Street will feature office spaces, a community room, media lounge, and a dog run, while the upper levels will offer an outdoor courtyard, fitness center, laundry room, and library, fostering a se nse of community among residents. Although the project does not meet the minimum development open space requirement or the residential open space per dwelling unit, State density bonus law allows concessions, and therefore the project would not need to comply with these standards.,

• The project is consistent with the compatibility standards for residential development in that it provides adequate protection for residents from excessive noise, odors, vibration, light and glare, and toxic emanations.

The project includes STC-rated windows and sound insulation materials to effectively mitigate external noise, ensuring that residential interior noise levels remain within acceptable limits. Additionally, proper ventilation systems and landscaping buffers are incorporated to control odors from nearby commercial areas. Furthermore, the development adheres to environmental regulations that limit exposure to toxic emanations, while lighting design employs shielding and strategic placement to minimize light spill and glare.

• The proposed residences have adequate separation and screening from adjacent commercial/industrial uses through site planning considerations, structural features, landscaping, and perimeter walls.

The project incorporates a minimum setback from adjacent commercial and residential properties, enhancing separation and reducing potential conflicts. Additionally, the design includes landscaping buffers, such as trees and shrubs, that provide natural screening to minimize visual impact and enhance privacy for residents. Structural features, including soundproofing measures wall s , further ensure that the residential 532
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environment remains comfortable and secure, effectively mitigating any adverse effects from surrounding uses.

Pursuant to Costa Mesa Municipal Code Section 13- 29(g)(3), Findings, in order to approve the project, the Planning Commission must find that the evidence presented in the administrative record substantially meets the following applicable required Density bonus and concession or incentive findings within a mixed-use overlay district:

• The request is consistent with State Government Code section 65915 et. seq. regarding density bonuses and other incentives, the general plan, any applicable specific plan, and Chapter IX special regulations, Article 4 density bonuses and other incentives.

The proposed development of affordable senior and permanent supportive housing at 695 West 19th Street qualifies for five incentives and unlimited waivers or reductions of development standards, as it provides a 100- percent affordable housing development and is located within half a mile of a major transit stop. Excluding the manager's unit, 69 of the units will be available to seniors with income levels ranging from 30% to 60% of the Area Median Income (AMI), with 34 units designated for seniors experiencing homelessness and 35 units set aside for those at or below 60% of the AMI. The requested concessions, including a reduction of the open space requirement to approximately 5%, a residential open space reduction to approximately 169 SF per unit, a front setback reduction to 0' -6", and zero additional width for parking spaces adjacent to a column, are necessary to ensure the project's feasibility while providing vital housing for low -income seniors. These concessions align with the goals of the General Plan, and the 19 West Urban Plan, promoting affordable housing development in a highly urbanized area.

• The requested density bonus and incentive or concession constitute the minimum amount necessary to provide housing at the target rents or sale prices and/or a child-care facility.

The requested density bonus and incentives for the proposed development constitutes the minimum necessary to provide affordable housing at target rents, as the project aims to serve a total of 70 units, exceeding the City’s Housing Element Sites Inventory capacity for 60 units at the subject site. While the number of very low-income units has been slightly reduced to 34, the number of low-income units has significantly increased to 35. According to the applicant and including State and federal funding sourcing, the concessions will allow the project to feasibly proceed economically without a budgetary loss.

• The granting of the incentive or concession is required in order to provide for affordable housing costs, as defined in Health and Safety Code section 50052.5 or for rents for the targeted units.
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The granting of the requested concessions is essential to the feasibility of the proposed 100% affordable senior residential development, as these modifications enable the project to provide critical housing for low-income seniors in Costa Mesa within a project scope and budget that can achieve the minimum and competitive criteria to obtain applicable grant funding. Specifically, the reductions in open space and front setback requirements allow for enhanced amenities and more efficient use of space, ultimately ensuring that the project can deliver affordable rents consistent with Health and Safety Code section 50052.5.

• The granting of the incentive or concession and/or the waiver or reduction of development standards does not have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Government Code section 65589.5 upon health, safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact.

The proposed concessions support the community's health, safety, and physical environment by facilitating the addition of residential units in an urbanized area designated for such development, as outlined in the City’s Housing Element and the applicable 19 West Urban Plan. These additional units will help achieve a better balance between jobs and housing, leveraging the proximity to schools, parks, retail centers, and employment opportunities. Moreover, the site is already surrounded by existing senior affordable residential apartments and can utilize existing infrastructure, ensuring that the development will not encroach on land reserved for open space.

• The granting of the incentive or concession and/or the waiver or reduction of development standards does not have an adverse impact on any real property that is listed in the California Register of Historical Resources.

The proposed project is located on a site that is not listed in the California Register of Historical Resources and is neither adjacent to any such properties, ensuring that the granting of the requested incentives and concessions will not adversely impact any historically significant real property.

Pursuant to Senate Bill 166 [Government Code Section 65863], the “No Net Loss Law” was amended to ensure that housing development opportunities remain available throughout the housing element planning period to accommodate a jurisdiction’s regional housing needs assessment (RHNA). One aspect of this amended legislation requires that “If the city approves a development of a parcel identified in its Housing Element sites inventory with fewer units than shown in the Housing Element, it must either make findings that the Housing Element’s remaining sites have sufficient capacity to accommodate the remaining unmet RHNA by each income level [emphasis added] or identify and make available sufficient sites to accommodate the remaining unmet RHNA for each income category”.
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• The proposed Affordable Senior Housing project includes a total of 70 units, exceeding the City’s Housing Element Sites Inventory capacity for 60 units for the subject site. However, according to the City ’s adopted Housing Element “ Sites Analysis” (Appendix B), the Senior Center property is identified with providing 40 very-low-income units and 20 low -income units. The proposed Senior Housing affordable project includes 34 very low-income units and 35 low-income units, and therefore is deficient six very -low-income units. Although the development as proposed would be deficient very -low-income units (as specified in the City Housing Element “Sites Analysis”), the City’s Housing Element proposes a 96 unit surplus of very -low income units beyond the required RHNA specified very -low income category and therefore a finding can be made that the City’s adopted Housing Element’s remaining sites have sufficient capacity to accommodate the remaining unmet RHNA by each income level.

ENVIRONMENTAL DETERMINATION

California Environmental Quality Act (CEQA) - Class 32 exemption applies to in -fill development projects (CEQA Guidelines §15332). A project can qualify for a Class 32 exemption if the proposed project: (1) is consistent with applicable General Plan designation and all general plan policies, as well as with applicable zoning designation and regulations; (2) the proposed development occurs within City limits on a project site of no more than five (5) acres substantially surrounded by urban uses; (3) the project site has no value as habitat for endangered, rare, or threatened species; (4) the approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality; and (5) the site can be adequately served b y all required utilities and public services (CEQA Guidelines §15332). The project is consistent with General Plan policies and regulations. The subject site is situated in a “built-out” urbanized environment and spans 1.5 acres, encompassing a section of the existing developed Senior Center's asphalt parking lot. The subject site does not have any known habitat for endangered, threatened, or rare species of wildlife. Traffic, noise, air quality, and water quality assessments have been conducted to evaluate the potential impacts of the proposed development, and no significant impacts have been identified. In support of this conclusion, several assessments were conducted relative to traffic, air quality, water quality and noise. A summary of those assessments is provided below:

Traffic
The addition of 70 units represents a net increase in the number of residences in the area. Thus, the City’s Transportation Division completed a trip generation analysis to compare the proposed 70-unit project with existing transportation conditions. The City requires a traffic impact analysis (TIA) for all development projects that generate 50 or more net vehicle trips that end during a peak hour. The proposed project does not meet this threshold since the anticipated additional peak AM and PM hours will result in less than 50 vehicle trips (14 and 17.5 peak hour trips, respectively). Therefore, a 535
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TIA is not required. Based on this analysis, the Transportation Division concluded that there will be nominal traffic impacts from the proposed project and that traffic generated by the project can easily be accommodated within Costa Mesa’s circulation network.

Exhibit 12 Trip Generation

Land Use Units/SF AM (Peak
Hour)
PM
(Peak
Hour)
Daily Trips
Proposed Senior Housing 70 units 14 17.5 226.8
Existing Senior Center 20,127 SF 38.44 50.32 580.06

Air Quality
The residential use is also expected to have nominal air quality impacts due to its small- scale. The development will consist primarily of residential units, which typically generate lower emissions compared to larger commercial projects. Therefore, with less than 227 daily trips, the project’s daily operational contributions to air quality impacts would be negligible. From a construction standpoint, potential air quality impacts are given more weight when being developed on a project site that is five acres or more (pursuant to the South Coast Air Quality Management District (SCAQMD)). In this case, the development site would be approximately 1.5 acres and it is relatively flat and will not require significant site grading. Because this site is significantly less than the SCAQMD threshold, it is reasonable to conclude that construction-related air quality impacts will be minimal and not raise to a level that would violate any State or local air quality standards. In addition, staff is not aware of any other construction activities off- site that are planned in the vicinity that would contribute to a cumulative air quality impact. Notwithstanding this, the project will be conditioned to incorporate measures to minimize emissions during construction and operation to ensure compliance with standards set by the SCAQMD.

Water Quality
The applicant has submitted a preliminary water quality management plan (PWQMP), which confirmed that there are no existing contamination plumes on the site or in the surrounding area. This plan also conceptually addresses how the project will filter/clean water originating from the site prior to its downstream release to ensure the project does not contribute to a deceased level of water quality. Because of the measures that will be implemented, the project is not anticipated to have an adverse water quality impact.

To ensure compliance with applicable water quality standards, the project will be conditioned to provide a final WQMP for City approval prior to issuance of permits and all WQMP structural and non-structural best management practices will be implemented prior to building permit final.
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Noise
From a noise perspective, the applicant submitted a study demonstrating that it will comply with the requirements of the City’s Noise Ordinance. In addition, and although not subject to CEQA compliance, t he submitted noise study confirms that future residential interior noise levels will not exceed 45 CNEL when using complete window assemblies (including both glass and frames). Exterior project noise levels will also not exceed the 65 CNEL limit. As a result, community noise is not expected to adversely affect future residents of the project.

Lastly, the Public Works Department and utility companies ha ve reviewed the proposed development and found that it can be adequately served by all required utilities and public services. Consequently, it can be determined that the project can be exempted from further CEQA action under the Class 32 exemption.

ALTERNATIVES

Planning Commission alternative recommendations to the City Council include the following:

1. Recommend approv al of the project with modifications . In consideration of any required findings or project use operations , the Planning Commission may suggest specific project changes. If any of the additional requested changes are substantial, the hearing could be continued to a future meeting to allow a redesign or additional analysis. Should significant modifications occur, staff would return with a revised resolution incorporating new findings and/or conditions for consideration by the City Council.

2. Deny the project. If the Planning Commission believes that there are insufficient facts to support the findings for approval, the Planning Commission should recommend denial of the application, provide facts in support of denial, and direct staff to incorporate the findings into a Resolution for City Council denial. If the project is denied, the applicant could not submit substantially the same type of application for six months from the City Council’s decision for denial. However, because this project is subject t o the Housing Accountability Act (Government Code Section 65589.5), if the City Council denies or directs a reduction in the proposed density of the housing project, and the development is determined to be consistent with applicable, objective general plan, zoning, and subdivision standards and criteria, including design review standards, the City Council must make the following written findings:

• The housing development project would have a specific, adverse impact upon the public health or safety unless the project is disapproved or approved upon the condition that the project be developed at a lower density; and

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• There is no feasible method to satisfactorily mitigate or avoid the adverse impact, other than the disapproval of the housing development project or the approval of the project upon the condition that it be developed at a lower density. (Feasible means capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors.)

LEGAL REVIEW

The draft Resolutions and this report have been approved as to form by the City Attorney’s Office.

PUBLIC NOTICE

Pursuant to Title 13, Section 13-29(d) of the Costa Mesa Municipal Code, three types of public notification have been completed no less than 10 days prior to the date of the public hearing:

1. Mailed notice. A public notice was mailed to all property owners and occupants within a 500-foot radius of the project site on Wednesday, November 27, 2024. The required notice radius is measured from the external boundaries of the property.

2. On-site posting. A public notice was posted on each street frontage of the project site on Wednesday, November 27, 2024.

3. Newspaper publication. A public notice was published once at least 10 days before the Planning Commission meeting in the Daily Pilot newspaper on Thursday, November 28, 2024.

On July 29, 2024, staff received a typed public comment opposing the project, focusing on concerns related to parking and its potential effects on the existing Senior Center. On December 1, 2024, staff received two typed public comments supporting the project, focusing on the need to house local low-income seniors. Any public comments received after the Planning Commission agenda is published but before the December 9, 2024, Planning Commission meeting will be provided to the Commission at the meeting.

CONCLUSION

Approval of the proposed senior affordable and permanent supportive housing project is compatible with the existing nearby commercial and residential uses. In addition, t he project is consistent with the General Plan, Zoning Code, State Law and all necessary findings can be made. The 19 West Urban Plan area has adequate infrastructure to serve the existing and proposed infill residential development, and housing has been contemplated at this site since the original development of the Senior Center and throughout several adopted General Plan Housing Element cycles . Therefore, staff recommends that the Planning Commission recommend City Council approval of the proposed project, subject to the conditions of approval outlined in the attached resolution. 538
December 9, 2024
Chair Adam Ereth and Members of the Planning Commission City of Costa Mesa
77 Fair Drive
Costa Mesa, CA
RE: Supp
ort for Affordable Senior Housing Project – Public Hearing #1 Dear Chair Ereth and Members of the Planning Commission, I write on behalf of the Costa Mesa Affordable Housing Coalition (the Coalition), a gr ass
roots organization that advocates for affordable homes for Costa Mesa’s lower-income residents. We enthusiastically support the proposal before you: a 70-unit affordable senior housing project to be built by Jamboree Housing Corporation in the City’s Senior Center parking lot. We are especially pleased the project will include 34 units of permanent supportive housing for our City’s most vulnerable seniors. The project’s mix of low-income and very low-income rental units is exactly what Costa Mesa needs.

According to Costa Mesa’s Housing Element (2021-2029),
the City has 12,138 seniors
(age 65+) and 41% of them are renters. Even more striking, nearly 40% of Costa Mesa’s seniors are very low-income or extremely low-income, and another 22% are low-income. (H.E. Chap. 2, pp.19-20.) In other words, the vast majority of Costa Mesa seniors— 62%—cannot afford to pay market rate rents. Our lower income seniors are in crisis, and the proposed project cannot come soon enough!
The Coalition urges you to adopt the recommen
dations in the staff report and take all
steps needed to move this project forward. Costa Mesa’s seniors desperately need this affordable housing.

Respectfully,
K
athy Esfahani
Kathy Esfahani,
Chair of the Costa Mesa Affordable Housing Coalition
ATTACHMENT 3
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539
From: Devin Valdez
To: PC Public Comments
Subject: SUPPORT Costa Mesa Affordable Senior Housing
Date: Sunday, December 1, 2024 7:30:40 PM
Dear Costa Mesa Planning Commission,
I am writing to express my strong support for the proposed affordable housing development located on a portion of the senior center parking lot. This innovative use of city-owned land will both provide needed housing to local low-income seniors and continue the revitalization of the 19th street corridor.

As the demand for affordable housing continues to grow, particularly for seniors on fixed incomes, this development represents a crucial step in addressing a significant need within our community. The integration of affordable housing for seniors is not only an investment in the well-being of older residents but also a forward-thinking approach to enhancing the social fabric of our city. By providing safe, accessible, and affordable living spaces, we can ensure that our seniors are able to remain in the community they helped build and remain close to services, family, and friends.

The location of this development, adjacent to the senior center, is ideal. It offers easy access to necessary resources, including social services, recreational activities, and public transportation. I believe the proposed 70-unit building will blend seamlessly into the existing neighborhood.

This project will further cement the City’s reputation for being innovative, compassionate, and effective on the issues of housing affordability and homelessness.

Thank you for your time and consideration,
Devin Valdez
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540
From: Rona Henry
To: PC Public Comments
Subject: SUPPORT Costa Mesa Affordable Senior Housing
Date: Sunday, December 1, 2024 2:01:33 PM
Dear Costa Mesa Planning Commission,
I am writing to express my strong support for the proposed affordable housing development located on a portion of the senior center parking lot. This innovative use of city-owned land will both provide needed housing to local low-income seniors and continue the revitalization of the 19th street corridor.

This project will further cement the City’s reputation for being innovative, compassionate, and effective on the issues of housing affordability and homelessness.

Thank you for your time and consideration,
Rona Henry

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September 27, 2024
Victor Mendez
Principal Planner
Development Services Department
City of Costa Mesa
77 Fair Drive, 2nd Floor
Costa Mesa, CA 92626
RE: Costa Mesa Senior Center Project – Formal Master Plan Application Dear Mr. Mendez:

This letter is for the proposed Jamboree Housing Corporation project located at 695 W. 19th Street Costa Mesa CA 92627. We are submitting the project for the Formal Master Plan review with the City of Costa Mesa. The proposed development is located on the site of the City of Costa Mesa’s Senior Center at the southeast corner of 19th Street and Pomona Avenue. The development area is a 1.50-acre portion of the Costa Mesa Senior Center parking lot.

The proposed project consists of 70 units over a Type 1 podium garage on the existing Senior Center parking lot. There are 68 one-bedroom/ one-bathroom units and 2 two-bedroom/one bathroom units, one of which is reserved as a manager unit.

This proposed development will offer many amenities such as community room with kitchen, office spaces for both social services and property management, conference room, fitness center, library with desktop computer for residents, pet spa, and an outdoor courtyard. The proposed development has 133 parking stalls.

The one-bedroom units will have income levels that range from 30% to 60% AMI and restricted to seniors. The proposed project will have 34 out of the 69 units restricted as permanent supportive housing for seniors.

Jamboree Housing is a long term owner and operator of our projects. The projects will be managed by a California Tax Credit Allocation Committee (TCAC) experienced and approved Property Management Company with experience specific to the population being served. The Management Company will oversee the maintenance of the property and will remain compliant with the governing regulatory bodies as well as Jamboree’s high standards for operations.

Jamboree’s in-house supportive services division will provide the onsite supportive services to residents. The restrictive covenants will remain with the property for a period of 55 years. A 55- year term is a standard requirement for TCAC, HCD, and other public financing bodies.

Jamboree Housing will create a single purpose entity in the form of a limited partnership. At the time of tax credit admission (close on construction financing) we will admit a 99.99% limited ATTACHMENT 5
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579

partner who will be the tax credit investor. It is crucial that this site is owned/leased and operated individually from the remaining uses and ownerships on the larger master site. As such, the site will require a tract map subdivision to create an individual parcel with legal description so that title is clean for the Partnership.

A development can be classified as a horizontal mixed-use project even when a parcel line divides the site into two separate properties due to its integrated design and commonly shared site features such as shared parking, landscaping, storm water treatment, and site access to name a few. While the physical division by a parcel line may separate the properties on paper, the development's layout and planning emphasize a blend of residential, commercial, or recreational elements within the same vicinity. This integration fosters a seamless and interconnected experience for residents and visitors, promoting a sense of community and convenience.

Common features like shared amenities, pedestrian pathways, parking and overall landscaping theme can further emphasize the mixed-use nature of the project. In essence, the presence of a parcel line need not detract from the horizontal mixed-use character when the design effectively unifies the two properties in function and experience.

Additionally, in a development where a parcel line divides the site into two properties, an association is often established to manage shared access and stormwater treatment facilities. This association plays a crucial role in ensuring the ongoing functionality and sustainability of the mixed-use project. Shared access roads, parking areas, and pedestrian walkways are maintained and managed collectively to facilitate ease of movement between the two properties, fostering a sense of unity. The establishment of such an association underscores the collaborative and cooperative nature of the development, reinforcing its classification as a horizontal mixed-use project.

Please feel free to reach out with any questions. I can be reached at 310-279-9989 or [email protected].

Thank you,

Tish Kelly
Senior Vice President, Development

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580
Legend
City Limit
Streets
Addresses
Silver
²
0 0.05 0.10.03
mi
The City of Costa Mesa makes no guarantee as to the accuracy of any of the information pr
ovided and assumes no liability for any errors, omissions, or inaccuracies.

WGS 1984 Web Mercator Auxiliary Sphere
© City of Costa Mesa
Vicinity Map
ATTACHMENT 6
581
Legend
City Limit
Streets
Addresses
Silver
Zoning
AP - Administrative
Prof
essional
IR-MLT - Institutional
Recr
eational Multi-Use
R1 - Single-Family
Residential
R2-MD - Multiple-
Fami
ly Residential,
Medium Density
R2-HD - Multiple-
Fami
ly Residential,
High Density
R3 - Multiple Family
Residential
MG - General Industrial
MP - Industrial Park
PDI - Planned
Development I
ndustrial
C1 - Local Business
C2 - General Business
C1-S - Shopping
Center
TC - Town Center
PDR-NCM - Planned
Development
R
esidential - North
Costa Mesa
I&R - Institutional
Recr
eactional
I&R-S - Institutional
Recr
eational - School
P - Parking
²
0 0.05 0.10.03
mi
The City of Costa Mesa makes no guarantee as to the accuracy of any of the information pr
ovided and assumes no liability for any errors, omissions, or inaccuracies.

WGS 1984 Web Mercator Auxiliary Sphere
© City of Costa Mesa
Zoning Map
ATTACHMENT 7
582
Aerial vicinity view of proposed project outlined
Existing Costa Mesa Senior Center
Tower on 19th
Project Site
Senior Center
Smart & Final
ATTACHMENT 8
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583

Existing affordable senior apartments (Tower on 19th), north of subject site -2-
584

Plumer Street driveway entrance
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585

New block wall to be constructed on or adjacent to existing retaining wall -4-
586

General area of proposed new residential development.
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587

Public right-of-the-way along W 19th Street
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588

Public right-of-the-way along Plumer Street
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589

PARKING DEMAND ANALYSIS

COSTA MESA SC HOUSING PROJECT
Costa Mesa, California
August 21, 2024
ATTACHMENT 9
-1-
590
August 21, 2024
T
ish Kelly
Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
Irvine, CA 92614
Email: [email protected]
Phone: 949.214.2350
LLG Reference No. 2.24.4822.1
S
ubject: Parking Demand Analysis for
Costa Mesa SC Housing Project
Costa Mesa, California
D
ear Ms. Kelly:

A
s requested, Linscott, Law, & Greenspan, Engineers (LLG) is pleased to submit this Parking Demand Analysis associated with the proposed Costa Mesa S C Housing Project (herein after referred to as Project) in Costa Mesa, California. The Project site is located south of 19th Street and east of Pomona Avenue within the existing Costa Mesa Senior Center . The Project will be developed on the eastern portion of the senior center’s existing surface parking lot. The proposed Project includes construction of a 70- unit senior apartment complex, consisting of 36 low-income senior units and 34 permanent supportive housing (PSH) units. The Project will provide 133 spaces, of which 74 spaces are surface lot spaces with the remaining 59 spaces within a parking structure.

Per the requirements of the City of Costa Mesa, a parking study has been prepared to determine the parking demand for the existing Costa Mesa Senior Center and the proposed Project to ensure adequate parking is provided for both uses upon completion of the Project . In addition, a parking management plan (PMP) has been prepared to document strategies to manage on- site parking to avoid parking intrusion into the adjacent commercial and residential uses. Appendix A presents the approved Scope of Work Memorandum for the Project that was developed in collaboration with the City of Costa Mesa.
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Tish Kelly
August 21, 2024

Page 2 ends

Costa Mesa City CouncilMarch 18, 2025

Costa Mesa City Council
March 18, 2025