Cudahy City Council
February 15, 2022

City of Cudahy Housing Element Update
Draft Initial Study/Addendum Page IS-25
exceptions for sites with particular geotechnical hazards. The proposed HE Update by itself would not directly authorize or permit development, but that future development pursuant to the proposed HE Update policies would be subject to the requirements and regulations cited. With these controls in place, impacts to water quality or associated with waste discharge are anticipated to be less than significant.
b) Less Than Significant Impact. The GPPEIR concluded that General Plan implementation would not substantially deplete groundwater supplies, because new development would be subject to General Plan “low-impact design” standards, including incorporating “green” building practices, such as designing bioswales and using permeable paving in parking lots (GPPEIR, Table 13-1, p. 13-9).The proposed HE Update would not directly authorize or permit development, and future development pursuant to the proposed HE Update policies would be subject to the requirements and rules cited in Part X(a) above; moreover, such development would not exceed that anticipated by the General Plan..

Additionally, future construction and operation would be governed by Cudahy Municipal Code, § 13.16, Water Conservation, as well as water-conservation requirements of the California CalGreen Building Code. The GPPEIR considered that with compliance to existing statutes and regulations summarized in Table 13-1, General Plan implementation would result in less than significant impacts to groundwater supply (GPPEIR, p. 13-14). As discussed in Part XI, Land Use and Planning, the proposed HE Update is consistent with the General Plan.
c) (i-iii) Less Than Significant Impact. The proposed HE Update would not directly authorize or permit development, and future development pursuant to the proposed HE Update policies would be subject to the requirements and rules cited above. Future development that would add impervious surfaces thereby altering existing drainage patterns would be evaluated once project specifics are known as proposed in the future. However, future projects would not be expected to result in the effects described in Parts X(c)(i)-(iv) because new construction must comply with Cudahy Municipal Code, §§

13.08.110-120, which require a standard urban storm water mitigation plan (SUSMP) and specific construction methods to prevent runoff and runoff pollution from the site. The same measures would reduce overall runoff volume, moderating the project’s impacts to the City’s storm drain system.

Additionally, General Plan policies for construction would apply to the future projects, including Policy OSCE-1.7, which requires that projects “integrate stormwater treatment best practices – including bioswales, pervious pavement – wherever possible, especially in landscaping and parking lot design.” Best management practices (BMPs) are required to be included in a project’s SUSMP. Accordingly, impacts related to storm water runoff volume would be less than significant. (iv) Less Than Significant Impact. The proposed HE Update would not directly authorize or permit development, and future development pursuant to the proposed HE Update policies would be subject to the requirements and rules cited The GPPEIR states that “all significant structures built within the City under the General Plan would be subject to floodplain management regulations and policies that require hydrological evaluation to ensure that minimal diversion of floodwaters occurs and development standards are implemented to prevent flooding of on- and off-site uses. These regulations specifically prohibit construction of structures that could cause or divert floodwaters without appropriate site planning and structural design” (GPPEIR p. 13-14). The City’s floodplain regulations are set forth in Title 16 of the Municipal Code. Accordingly, with application of these regulations, remaining impacts with respect to floodwater diversion are anticipated to be less than significant. d) No Impact. The proposed HE Update would not risk release of pollutants in a flood, seiche event or tsunami, because the City of Cudahy not located in a mapped flood hazard zone (GPPEIR Figure 13-1); moreover, the GPPEIR indicates that no areas in the City are susceptible to high tides, tsunamis, seiches, mudflows or sea level rise. No related impacts from release of pollutants are anticipated.

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e) No Impact. The proposed HE Update would not directly authorize or permit development, and future development pursuant to the proposed HE Update policies would be subject to the requirements and rules cited. The City’s water conservation ordinance, as well as the California “CalGreen” Building Code’s stipulations for appliance and plumbing fixture water consumption, work together to ensure projects built under the General Plan would not interfere with implementing water quality control plans or sustainable groundwater management. No related impacts are anticipated.

XI. LAND USE AND PLANNING
Would the project: Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Physically divide an established community? ☐ ☐ ☒ ☐
b) Cause a significant environmental impact due to a conflict with any land use plan, policy, or regulation adopted for the purpose of avoiding or mitigating an environmental
effect?
☐ ☐ ☒ ☐
Impact Discussion:
a) Less Than Significant Impact. The GPPEIR concluded that the General Plan set forth numerous policies to increase community connectivity, particularly by increasing walkability among neighborhoods (GPPEIR, p. 14-6). Development under the proposed HE Update is consequently not expected to result in development that would physically divide an established community, because the future development would be required to be consistent with the General Plan. Interference with existing street or sidewalk circulation is not anticipated with future construction. Projects that physically divide existing communities typically are new freeways or arterial roads, street closures, barrier walls, etc. rather than residential construction. Additionally, the HE Update is intended to provide for residential development on vacant or underutilized sites, or as infill and increased density development; such development would tend to promote connectivity, rather than to divide communities. b) Less Than Significant Impact. The proposed HE Update would not conflict with land use plans or other regulations (i.e., the City Zoning Code); rather, the project would in part implement the General Plan by encouraging and accommodating future residential development and an increase in residential units of all income levels. The proposed Housing Element Update provides specific programs, incentives, and other mechanisms that provide various ways to realize new housing construction and preservation of the existing housing stock taking into account the various needs of the population. The following chart lists the General Plan Land Use Element goals and policies that the proposed HE Update would help to achieve.

GOAL LUE-1 Complete, integrated, and defined neighborhoods, corridors, and districts.

Policy LUE 1.3 Promote the assembly of land into larger parcels that area more suitable for higher-quality integrated development.

Policy LUE 1.10 Allow development projects to achieve additional height if the project demonstrates features that provide significant community benefits. These can include, but are not limited to:
incorporation of affordable, workforce, or low-income housing; incorporation of public or

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community facilities; innovative use of shared parking; efficient and innovative use of infrastructure and renewable resources; and public art.

Policy LUE 5 Accommodate different family sizes and income levels through a variety of different types and scales of housing.

GOAL LUE-5.1 Maintain and augment Cudahy’s stock of single family detached, and single family attached housing.

Policy LUE 5.3 Encourage mixed-use residential development by allowing additional density for developments that provide mixed-use commercial/residential, missed-use/civic/residential, or entertainment/residential.

Policy LUE 5.5 Seek development of for-sale, higher-density, single family homes (condominiums, townhomes, etc.) for young families in Cudahy.

Policy LUE 5.6 Adopt more flexible accessory dwelling unit regulations and policies.

Policy LUE 5.7 Address safety concerns associated with people living in illegal garage conversions or unpermitted secondary units.

Policy LUE 5.8 Support policies that facilitate and incentivize the development of affordable housing units, such as inclusionary housing requirements and development bonus programs.

Policy LUE 8 Land use strategies that facilitate economic empowerment through business development and homeownership opportunities.

Policy LUE 8.1 Create homeownership opportunities for existing residents by encouraging the development of smaller scale, for-sale residential units – condominium, townhome, and duplexes.

XII. MINERAL RESOURCES
Would the project: Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Result in the loss of availability of a known mineral resource that would be a value to the region and the
residents of the state?
☐ ☐ ☐ ☒
b) Result in the loss of availability of a locally important mineral resource recovery site delineated on a local
general plan, specific plan, or other land use plan?
☐ ☐ ☐ ☒
Impact Discussion:
a) No Impact. The proposed HE Update would not authorize development. Future development as a result of the proposed HE Update would not diminish the availability of known mineral resources, because as explained in the GPPEIR, “the City of Cudahy is in the San Gabriel Valley Production-Consumption Region, and is classified as MRZ-1. This classification indicates that ‘no significant mineral deposits are

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present, or … it is judged that little likelihood exists for their presence’ “ (GPPEIR, Chapter 15, Mineral Resources, p. 15-1).
b) No Impact. The proposed HE Update would not result in the loss of availability of an identified mineral recovery site, because as explained in the GPPEIR, neither the General Plan Land Use Diagram nor the Zoning Map show mineral recovery sites in the City (GPPEIR, p. 15-1).

XIII. NOISE
Would the project result in:

Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Generation of a substantial temporary or permanent
increase in ambient noise levels in the vicinity of the project in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies?
☐ ☐ ☒ ☐
b) Generation of excessive ground-borne vibration or groundborne noise levels? ☐ ☐ ☒ ☐
c) For a project located within the vicinity of a private airstrip or an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project expose people residing or working in the project area to excessive noise levels?
☐ ☐ ☐ ☒
Impact Discussion:
a) Less than Significant Impact. The proposed HE Update could result in temporary increases in noise levels from heavy equipment, air compressors, generators, etc., during construction of future housing development associated with the Housing Element Update. The GPPEIR notes that “[i]mplementation of projects under the proposed Cudahy 2040 General Plan would involve construction that would result in temporary noise generation primarily from the use of heavy-duty construction equipment. Based on the noise levels generated by typical construction equipment and activities, temporary construction noise levels could exceed applicable standards and/or result in a substantial temporary increase in noise levels . . . represent[ing] a significant impact” (GPPEIR Chapter 16, Noise, p. 16-23) To address projected noise impacts, the GPPEIR cited General Plan Policies NE-1.1, 1.2, 2.1, and 2.6, which generally require construction projects to use available noise suppression techniques and devices to lower exterior noise.

The GPPEIR also noted that the City did not, at the time, have specific noise standards or limits for construction activity. The GPPEIR concluded that short-term construction noise would adversely affect sensitive receptors, and that impacts would be significant and unavoidable even with mitigation. The updated 2018 Zoning Code enacted several provisions that address exterior noise and set sound thresholds (§ 20.60.070, Noise), but do not address construction noise. b) Less Than Significant. New development under the proposed HE Update would likely generate temporary localized vibration associated with construction equipment. The GPPEIR considered temporary construction-related vibration impacts to be perceived by sensitive receptors as potentially significant, and suggested that the city adopt a vibration-assessment policy; however, the General Plan does not contain one. Resolution 18-07 and the Findings of Fact certifying the GPPEIR do not address construction vibration. Moreover, Zoning Code § 20.60.090 exempts construction vibration from the general requirement that “no vibration shall be detectable beyond the property line from which the

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vibration is emanating.” Accordingly, the City must have determined that temporary construction vibration would not cause significant impacts, simply because the impacts would be temporary and short-term. However, future vibration impacts associated with development consistent with the HE Update would be studied at the project level environmental review and mitigation measures applied as required. The following GPPEIR Mitigation Measure shall apply for future development resulting from policies and programs in the proposed HP Update.

GPPEIR Mitigation Measure
NOI-1 The applicant shall specify noise-attenuated construction equipment on all construction plans and construction bid documents to the satisfaction of the Community Development Director, consistent with General Plan Policies NE-1.1, 1.2, 2.1, and 2.6. The applicant shall monitor, or cause to be monitored, daily sound levels at the construction site, and verify to the Community Development Department that all practicable noise-attenuation methods are employed at the project construction site.
c) No Impact. As discussed in Part IX, Hazards, above, the City is not in the vicinity of a private airstrip or airport land use plan, or within two miles of a public/public use airport. No related noise impacts are anticipated.

XIV. POPULATION AND HOUSING
Would the project: Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Induce substantial unplanned population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through
extension of roads or other infrastructure)?
☐ ☐ ☒ ☐
b) Displace substantial numbers of existing people or housing, necessitating the construction of replacement housing
elsewhere?
☐ ☐ ☒ ☒
Impact Discussion:
a) Less Than Significant Impact. The proposed HE Update would not directly increase population and housing because it would not authorize development. Future projects as a result of the Housing Element Update policies are intended to increase housing at all income levels, and as a result would increase population. The HE Update provides for 393 residential units to meet the Regional Housing Needs Assessment in a 2029 Horizon. This would result in the City’s population growth by adding additional residential units. This increase is well within the population capacity of the 1,448 units projected and planned for in the General Plan under the 2040 horizon period. Therefore, the population increase as a result of the proposed HE Update is “planned,” rather than unplanned growth. The GPPEIR discussed providing housing opportunities as a net positive for the City. Specifically, the GPPEIR states:

Implementation of the General Plan would result in increased residential density which, in turn, would increase the population of Cudahy. This increase would likely occur incrementally over time as older residences are replaced by new higher-density dwellings. This new development, however, would not involve physically altering pristine or open space areas, or the extension of roads or other growth-inducing infrastructure into areas where it does not currently exist, since

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nearly all of the City is already developed. The increase in development would occur in the existing footprint within the City and within the roughly 18 acres that are currently undeveloped.

In addition, new development within the City would be guided by the Goals and Policies of the proposed Cudahy 2040 General Plan, which provides the framework for addressing the potential negative impacts sometimes associated with population growth. In particular, Land Use Element Goal 6 and related policies (See Table 16-1) address such potential impacts with respect to providing adequate infrastructure, public services, and amenities to accommodate new growth, and calls for a variety of actions to ensure that new development is compatible with existing development.

The General Plan accordingly anticipates the population growth associated with future development, including the possibility of density bonuses and other programs to incentivize housing construction and rehabilitation. Accordingly, the proposed HE Update does not propose unplanned population growth, and associated impacts are less than significant.

Less than Significant Impact. The proposed HE Update would not directly result in residential displacement since it does not authorize development. Future development under the proposed HE Update would be subject to environmental review as individual projects are proposed and as project specificity is known such as the number of persons that may be displaced. While most of the land inventory sites identified in the proposed HE Update are vacant or underutilized, redevelopment of existing residential land could occur under the HE Update policies. Although the proposed HE Update does not include relocation programs for cases of displacement, the City’s Inclusionary Housing Ordinance (GMC Ch. 20.88) includes provisions for residential displacement as sites are developed that include low- and moderate-income residents.

XV. PUBLIC SERVICES
Would the project: Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Result in substantial adverse physical impacts associated with the provision of new or physically altered
governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to
maintain acceptable service ratios, response times, or
other performance objectives for any of the public
services:
i. Fire protection? ☐ ☐ ☒ ☐
ii. Police protection? ☐ ☐ ☒ ☐
iii. Schools? ☐ ☐ ☒ ☐
iv. Parks? ☐ ☐ ☒ ☐
v. Other public facilities? ☐ ☐ ☒ ☐

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Impact Discussion:
a) (i.-v.) Less Than Significant Impact. The proposed HE Update would not directly increase demand for public facilities since it would not authorize development. Future residential projects consistent with the policies of the proposed HE Update would be subject to environmental review as proposed with project details. GPPEIR Chapter 18, Public Services and Recreation, describes the City’s fire protection, police protection, school and park facilities and services. The GPPEIR catalogues the state statutes and regulations (e.g., CEQA, others), as well as General Plan Policies, that would function to reduce environmental impacts in the event that new public facilities are required (GPPEIR Table 18-1, pp. 18-8 – 18-11). Attempting to describe future environmental impacts of police and fire facilities where building designs and locations were not specified was deemed too speculative for analysis or significance determination (GPPEIR p. 18-6). Accordingly, because all development of new facilities would be subject to CEQA and other regulations designed to protect the environment, impacts related to General Plan implementation were determined to be less than significant. Likewise, because the proposed HE Update is consistent with the General Plan, it would not require construction of new public facilities, and would not change regulatory requirements with respect to new public facility construction. Project impacts would be less than significant.

XVI. RECREATION
Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Would the project increase the use of existing
neighborhood and regional parks or other recreational
facilities such that substantial physical deterioration of the facility would occur or be accelerated?
☐ ☐ ☒ ☐
b) Does the project include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the
environment?
☐ ☐ ☒ ☐
Impact Discussion:
a) Less Than Significant Impact. The proposed HE Update would not be expected to increase the use of existing parks in a way that would result in substantial deterioration. Although future residents of housing development resulting from policies in the proposed HE Update would likely use park facilities, their use is unlikely to cause or accelerate park deterioration. GPPEIR Chapter 18, Public Services and Recreation does not identify impacts associated with planned residential growth. Additionally, Quimby fees are collected on new development to help offset the costs of providing new and improved recreational facilities.
b) Less Than Significant Impact. The proposed HE Update does not include recreational facilities per se, and would not require recreational facility construction that would result in adverse environmental impacts.

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XVII. TRANSPORTATION
Note: Except as provided in CEQA Guidelines § 15064.3(b)(2) (regarding roadway capacity projects), a project's effect on automobile delay shall not constitute a significant environmental impact. See 14 CCR § 15064.3.

Would the project: Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Conflict with a program, plan, ordinance, or policy
addressing the circulation system, including transit,
roadway, bicycle, and pedestrian facilities?
☐ ☐ ☒ ☐
b) Conflict or be inconsistent with CEQA Guidelines § 15064.3, subdivision (b) (Criteria for Analyzing Transportation
Impacts)?
☐ ☐ ☒ ☐
c) Substantially increase hazards due to a geometric design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)?
☐ ☐ ☒ ☐
d) Result in inadequate emergency access? ☐ ☐ ☒ ☐
Impact Discussion:
h) Less Than Significant Impact. The proposed HE Update would not conflict with programs, plans or regulations addressing the circulation system or public transit, in part because future development is required to comply with City engineering standards for access to the public right-of-way, future projects could provide bicycle parking and other multi-modal accommodations. No impacts related to circulation system or transit are anticipated.
a) Less Than Significant Impact. Development of the proposed HE Update would not be inconsistent with CEQA Guidelines § 15064.3, Determining the Significance of Transportation Impacts, because future projects are highly likely to reduce vehicle miles traveled (VMTs) since increased residential density in an existing urbanized area is expected. Future residents of future development would not necessarily require vehicles to access local stores, as well as restaurants and professional services, as many are within the City’s navigable footprint. There are several transit stops on Atlantic Avenue and Santa Ana Street and other City arterials.
i) Since nearly all of Cudahy’s land area is in a High-Quality Transit Area (HQTA) as defined by SCAG’s RTP/SCS (defined as an area within one half-mile of a well-served transit stop or corridor with 15 minute or better frequency during peak commute hours), adding more growth to this area will be essential in reducing VMT and GHG emissions. In addition, much of Cudahy’s area is included in a Transit Priority Area, a significantly more restrictive definition than an HQTA. Under the OPR Technical Advisory, both HQTAs and TPAs are specifically identified as areas where land use projects are presumed to have less than significant impacts based on VMT. This designation allows for expedited screening of potential impacts to help streamline environmental review of land use projects that are likely to be low VMT generators. Additionally, the future West Santa Ana Branch metro rail line will enhance transit connectivity locally and regionally (see, e.g., Los Angeles Metro, West Santa Ana Branch Transit Corridor, available at https://www.metro.net/projects/west-santa-ana/#status (accessed January 14, 2021) b) Less Than Significant Impact. The proposed HE Update is not expected to affect major arterials. Site planning is expected to conform with local street standards and safety measures. Driveways and

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pedestrian paths will be required to comply with City engineering requirements for width, slope, and sight distance, as well as its position with respect to nearby arterials and intersections. As such, the Housing Element Update is unlikely to result in geometric design hazards. No impacts are anticipated. c) Less Than Significant Impact. The proposed HE Update would not result in inadequate emergency access. Future development would be near arterials, major intersections and local collectors found throughout the City, and within a grid of streets which provide adequate emergency access. The proposed HE Update and future development must meet all Fire Code requirements for escape routes and protocols. Accordingly, no impacts associated with inadequate emergency access are anticipated.

XVIII. TRIBAL CULTURAL RESOURCES
Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Would the project cause a substantial adverse change in the significance of a tribal cultural resource, defined in Public Resources Code § 21074 as either a site, feature, place, cultural landscape that is geographically defined in terms of the size and scope of the landscape, sacred place, or object with cultural value to a California Native
American tribe, and that is:
i. Listed or eligible for listing in the California Register of Historical Resources, or in a local register of historical resources as defined in Public Resources Code §
5020.1(k), or
☐ ☐ ☒ ☐
ii. A resource determined by the lead agency, in its
discretion and supported by substantial evidence, to
be significant pursuant to criteria set forth in
subdivision (c) of Public Resources Code § 5024.1. In
applying the criteria set forth in subdivision (c) of
Public Resource Code § 5024.1, the lead agency shall
consider the significance of the resource to a
California Native American tribe.
☐ ☐ ☒ ☐
Impact Discussion:
(i) Less Than Significant Impact. The proposed HE Update would not likely affect a tribal cultural resource eligible for listing, depending on the degree of excavation. The potential for discovering previously unknown resources exists because future projects would likely involve excavation particularly if underground parking garages are included. Future projects will undergo environmental study and review and may include mitigation to reduce impacts to less than significant levels. (ii) Less Than Significant Impact. The proposed HE Update would not affect a known tribal resource, because there are no known prehistoric sites or Tribal Cultural Resources in the City (GPPEIR, Chapter 9,

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Historic and Cultural and Tribal Cultural Resources, p. 9-1). Still, there is potential for discovering buried resources, including human remains during the excavation phase of construction. Future development projects will be subject to environmental review, and mitigation measures may be applied to reduce impacts to less than significant levels. The following GPPEIR mitigation measures would serve to mitigate any impacts:

GPPEIR Mitigation Measures
CULT MM-2: Pre-construction Briefing. Prior to the commencement of grading or demolition of subsurface structures, a professional archaeologist who meets U.S. Secretary of the Interior’s Professional Qualifications and Standards, shall conduct a brief archaeological and paleontological informational session for construction personnel. The training session may consist of in-person meeting or a written handout describing: (1) how to identify archaeological and paleontological resources that may be encountered during earth-moving activities and (2) the procedures to be followed in such an event, including contact information for the appropriate entities if archaeological or paleontological resources are discovered.

CULT MM-3: Treatment and Evaluation of Discovered Resources: In the event that archaeological or paleontological resources are unearthed during ground-disturbing activities, the ground-disturbing activities shall be halted or diverted away from the vicinity of the find so that the find can be evaluated.

A buffer area of at least 50 feet shall be established around the find, where construction activities will not be allowed to continue until a qualified archaeologist or paleontologist has examined the newly discovered artifact(s) and has evaluated the area of the find. Work shall be allowed to continue outside the buffer area. If the archaeologist identifies the find as a tribal cultural resource or suspects it to be a tribal cultural resource, the City will contact the Native American Heritage Commission (NAHC) to report the discovery, and will contact local Native American tribal representatives as directed by the NAHC.

Should the newly discovered artifact(s) be determined to be a tribal cultural resource, Native American construction monitoring will be initiated. The City shall coordinate with the archaeologist and tribal representative(s) to develop an appropriate treatment plan for the resources.

XIX. UTILITIES AND SERVICE SYSTEMS
Would the project: Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Require or result in the relocation or construction of new or expanded water, wastewater treatment or storm water
drainage, electric power, natural gas, or
telecommunications facilities, the construction or
relocation of which could cause significant environmental effects?
☐ ☐ ☒ ☐
b) Have sufficient water supplies available to serve the project and reasonably foreseeable future development
during normal, dry, and multiple dry years?
☐ ☐ ☒ ☐
c) Result in a determination by the wastewater treatment provider, which serves or may serve the project that it has adequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments?
☐ ☐ ☒ ☐

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Would the project: Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
d) Generate solid waste in excess of state or local standards, or in excess of the capacity of local infrastructure, or otherwise impair the attainment of solid waste reduction goals?
☐ ☐ ☒ ☐
e) Comply with federal, state, and local management and reduction statutes and regulations related to solid waste? ☐ ☐ ☒ ☐ Impact Discussion:

The GPPEIR concluded that implementation of the General Plan 2040 would not result in significant impacts related to utilities and service systems. The proposed HE Update is generally consistent with the General Plan, as explained in Part XI, Land Use and Planning. As explained in subsections XIX(a)-(d,e) below, the project’s impacts on utilities and service systems would likewise be less than significant. a) Less Than Significant Impact. The proposed HE Update would not require relocation or construction of new or expanded facilities, because all utilities are present throughout the City, which has been previously developed. The GPPEIR Chapter 20, Utilities and Service Systems, outlines all utility systems that serve the project site, the policies and programs that apply to them, as well as existing conservation measures that work together to prolong their capacity (GPPEIR, pp. 20-19 – 20-30). With these policies and programs in place, the GPPEIR determined that implementing the General Plan 2040 would not result in significant impacts (GPPEIR, p. 20-30).

The proposed HE Update is within the expected growth projections of the General Plan, as discussed throughout this document. Moreover, the project will be subject to resource-conservation measures in the California “CalGreen” Building Code, as well as specific measures in the General Plan and Zoning Code. Given the project’s General Plan consistency and applicable policies and regulations, impacts associated with new utility systems are anticipated to be less than significant. b) Less Than Significant Impact. According to the Population and Housing Section (Chapter 16), The Cudahy 2040 General Plan update projects the population to grow to 30,607 (up from 24,073) by the year 2040, primarily through increased residential density. Sufficient water supplies would generally be available to serve future residential development. The GPPEIR notes water companies that serve the City. As explained in Part XIX(a) above, the project would be governed by Cudahy Municipal Code, §

13.16, Water Conservation, as well as water-conservation requirements of the California “CalGreen” Building Code, thereby limiting the project’s water consumption. The project HE Update included 393 residential units to comply the Regional Housing Needs Assessment A Water Supply Assessment per Government Code § 66473.7 may be required for individual projects proposed and once details are known. The collective, cumulative mitigating benefits of the policies listed in the GPPEIR, Chapter 20, will result in a less-than-significant impact related to increased water supplied and demand. Finally, the proposed HE Update is not expected to include future development with high-water-use landscaping. c) Less Than Significant Impact. The wastewater treatment provider, Los Angeles County Sanitation District, will likely determine that it has adequate capacity to serve future residential development. As explained in the GPPEIR, increased wastewater generation from General Plan 2040 buildout represented less than one percent of the remaining capacity at the Joint Water Pollution Control Plan in Carson, which receives and treats the City’s wastewater (GPPEIR p. 20-20). Impacts to wastewater treatment capacity were considered to be less than significant in light of the City’s wastewater contribution and

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policies and regulations set forth in Table 20-1 (GPPEIR pp. 20-22 – 20-30). The proposed HE Update is consistent with the General Plan’s growth projections. The 383 units included in the proposed HP Update is substantially less than the 1,448 units included in the General Plan. The water conservation measures described in Part XIX(b) above would also serve to reduce wastewater generation.

Accordingly, given the above discussion and the analysis provided by the GPPEIR Chapter 20, impacts associated with wastewater treatment capacity are expected to be less than significant. d, e) Less Than Significant Impact. The proposed HE Update and resulting future development would be unlikely to generate solid waste in excess of applicable standards and local infrastructure because waste-reduction and recycling requirements would minimize any individual project’s contribution to the waste stream. As explained in GPPEIR Chapter 20, the City is required by Public Resources Code 41780 essentially to divert 50 percent of solid waste from landfills, beginning in 2000. This requirement translates to individual properties, which are provided with waste disposal containers for both recyclable and non-recyclable waste. Even though future development would generate solid waste, it is not anticipated to impair the attainment of solid-waste reduction goals, and is expected to be capable of complying with applicable solid-waste management statutes and regulations. Impacts would be less than significant.

XX. WILDFIRE
If located in or near state responsibility areas or lands classified as very high fire hazard severity zones, would the project:

Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Substantially impair an adopted emergency response plan or emergency evacuation plan? ☐ ☐ ☐ ☒
b) Due to slope, prevailing winds, and other factors,
exacerbate wildfire risks, and thereby expose project
occupants to pollutant concentrations from a wildfire or the uncontrolled spread of a wildfire?
☐ ☐ ☐ ☒
c) Require the installation or maintenance of associated infrastructure (such as roads, fuel breaks, emergency water sources, power lines or other utilities) that may exacerbate fire risk or that may result in temporary or ongoing impacts to the environment?
☐ ☐ ☐ ☒
d) Expose people or structures to significant risks, including downslope or downstream flooding or landslides, as a
result of runoff, post-fire slope instability, or drainage changes?
☐ ☐ ☐ ☒
Impact Discussion:

No Impact. The City of Cudahy is not in or near a state responsibility area and does not contain land classified as a very high fire severity zone.4 The GPPEIR notes that the City is completely developed and is not adjacent to wildlands (GPPEIR, p. 12-22). No related impacts would result. 4CalFire, Fire Hazard Severity Zone Map, available at https://osfm.fire.ca.gov/divisions/wildfire-planningengineering/wildland-hazards-building-codes/fire-hazard-severity-zones-maps/ (accessed January 17, 2022).

City of Cudahy Housing Element Update
Draft Initial Study/Addendum Page IS-37
XXI. MANDATORY FINDINGS OF SIGNIFICANCE
Potentially
Significant
Impact
Less Than
Significant with
Mitigation
Incorporated
Less Than
Significant
Impact
No
Impact
a) Does the project have the potential to substantially degrade the quality of the environment, substantially
reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community,
substantially reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or
prehistory?
☐ ☐ ☒ ☐
b) Does the project have impacts that are individually limited, but cumulatively considerable? (“Cumulatively
considerable” means that the incremental effects of a
project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects.) ☐ ☒ ☐ ☐
c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly?
☐ ☒ ☐ ☐
Discussion:
a) Less Than Significant Impact. As shown in Parts I-XIX above, the proposed HE Update does not have the potential to significantly degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten or eliminate a plant or animal community, substantially reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory. The project is Citywide and within a developed urbanized area. b) Less Than Significant Impact with GPPEIR Mitigation Measures Incorporated. As shown in Parts I-XIX above, the proposed HE Update would not generate impacts that are individually limited, but cumulatively considerable. As discussed throughout the document, the project is consistent with the City’s General plan with respect to the projected residential density, and the surrounding area is already developed and surrounded by existing urban-scale commercial and residential uses. Incremental impacts resulting from development and operation of future development and other nearby projects include generation of air pollutants and greenhouse gases, increased use of domestic water, energy consumption, generation of wastewater and solid waste, and short-term construction noise impacts.

The analysis concluded that these incremental impacts were anticipated by the GPPEIR and are each less than significant or can be mitigated to a less than significant level. GPPEIR Mitigation Measures have been referenced throughout this document.
c) Less Than Significant Impact with GPPEIR Mitigation Measures Incorporated. As shown in Parts I-XIX above, there is no indication that this project could result in substantial adverse effects on human beings. While there would be a variety of effects during construction on the project site related to traffic, noise, air quality and greenhouse gases, these impacts would be less than significant based on compliance with applicable regulatory requirements and established impact thresholds, as well as the prescribed mitigation measures. Potential long-term effects would include emission of air pollutants and

City of Cudahy Housing Element Update
Draft Initial Study/Addendum Page IS-38
greenhouse gases and impacts to public utility capacity, but these impacts are expected to be below applicable significance thresholds. In all, the project would not cause environmental effects that cause substantial direct or indirect adverse effects on human beings with the adoption and implementation of the mitigation measures, as well as with compliance with applicable federal, state and local policies, and regulations described throughout this document. GPPEIR Mitigation Measures have been referenced throughout this document.

Ordinance No. 718 1
ORDINANCE NO. 718

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY APPROVING GENERAL PLAN AMENDMENT 21-
01, THE 2021- 2029 6th CYCLE HOUSING ELEMENT, AND

APPROVING AN ADDENDUM TO THE CUDAHY
GENERAL PLAN 2040 EIR (SCH#2017071071) FOR THE
DRAFT HOUSING ELEMENT.

WHEREAS, California Government Code Sections 65580-65589.9 require cities to prepare a Housing Element as a component of each city’s General Plan and to revise it regularly on a schedule set forth in the law; and
WHEREAS, the Planning Department initiated an amendment to the Housing Element of the General Plan and prepared proposed revisions to the Housing Element for the 2021-2029 planning Period (6th Cycle Housing Element (2021-2029)), which replaces the Housing Element that was last adopted in 2013 (5th Cycle) and updated in 2018 as part of the General Plan 2040 Update; and
WHEREAS, the 6th Cycle Housing Element (2021-2029) sets forth the housing policies for the City, facilitated the preservation and development of housing, and established programs to accommodate the City’s share of the regional housing need in Southern California; and WHEREAS, the City of Cudahy has been assigned an allocation of 393 new housing units as its share of the 6th cycle of the RHNA in Southern California compared to the 318 housing units as its share of the 5th cycle of the regional housing need assessment (RHNA), and;
WHEREAS, the Planning Commission of the City of Cudahy held a public hearing on the proposed 2021 Draft Housing Element on January 24, 2022 and recommended approval of the project and the addendum to General Plan 2040 Environmental Impact Report (EIR); and WHEREAS, this matter was duly posted and set for public hearing for the February 15, 2022 City Council meeting at 6:00 P.M. consistent with the City of Cudahy’s Zoning Ordinance procedures for General Plan Amendments, and the addendum.

NOW THEREFORE, the City Council of the City of Cudahy hereby resolves:

SECTION 1. Government Code Section 65583 states that a Housing Element is a mandatory element of the General Plan and shall consist of an identification and analysis of existing and projected housing needs and a statement of goals, policies, quantified objective, financial resources, and schedule of programs for the preservation, improvement, and development of housing.

SECTION 2. The proposed General Plan Amendment is necessary to update the Housing Element to reflect the adequate sites for housing, including rental housing, factory-built housing, and mobile homes, and shall make adequate provisions for the existing and projected needs of all economic segments of the community.

Attachment C

Ordinance No. 718 2
SECTION 3. The City has submitted the proposed housing element to other public agencies for review as follows:
a. The draft housing element was submitted to the state Department of Housing and Community Development (HCD) for review on October 15, 2021, pursuant to Government Code Section 65585 (b). HCD’s comments on the draft were received by the city in the form of a letter dated December 13, 2021. City staff reviewed those comments, and the draft housing element has been amended in response to those comments.
b. The Planning Commission held a duly noticed public hearing on the draft Housing Element of January 24, 2022, and recommended approval of the draft Housing Element and the GPEIR Addendum to the City Council.

SECTION 4. The City of Cudahy, in accordance with Section 65351 of the California Government Code, facilitated public participation in the preparation of the draft housing element by conducting Town Hall meetings in August 2021, noticed public hearings before the Planning Commission on January 24, 2022, and, the City Council on February 15, 2022. These meetings were publicized by the provision of legally required publication. The City Council and the Planning Commission received and considered written and oral evidence at each of the public hearings on the proposed draft housing element.

SECTION 5. The City Council has reviewed the Housing Element Guidelines adopted by HCD pursuant to Section 50459 of the Health and Safety Code and finds that the housing goals, objectives, and policies stated in the revised Housing Element are appropriate for the City of Cudahy and will contribute to the attainment of the state’s housing goals. The City Council further finds that the adoption of the revised Housing Element will aid the City’s efforts in the development of housing for all members of the community and that the Housing Element reflects the requirements of Government Code Section 65583 (b). The revised Housing Element has been amended to reflect the comments of the State Department of Housing and Community Development.

SECTION 6. The City Council, after considering the comments of the HCD to the 2021 Draft Housing Element, the Planning Commission’s recommendation, staff recommendations, public testimony, correspondence, and reports thereon, makes the following findings:
a. The housing element update is consistent with all elements of the General Plan. b. The update will promote health, safety, and welfare by: preserving housing that is affordable to extremely low, very low, and low- and moderate income households; encouraging variety in housing types, sizes, costs, and tenure; establishing programs to ensure that most new development incorporates affordable housing; establishing incentives to encourage and help defray the costs of affordable housing development; affirmatively furthering fair housing opportunities; and by setting quantified objectives for housing production, rehabilitation, preservation and conservation. c. Consistent with provisions of California Government Code Section 65583 (b), the City of Cudahy ha evaluated its ability to accommodate its RHNA number by 2021 and has adopted quantified objectives that reach the RHNA allocation within the planning period.

Ordinance No. 718 3
SECTION 7. The Project has been environmentally reviewed pursuant to the provisions of the California Environmental Quality Act (Public Resources Code Sections 21000, et seq. (CEQA)), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000, et seq.), the requested entitlements have been noticed and posted according to CEQA project guidelines.

Cudahy has prepared an addendum to the Cudahy 2040 General Plan EIR for the Housing Element Update which is a policy level document that is consistent with existing City of Cudahy’s General Plan land use designation and densities. Although the proposed project is intended to encourage and facilitate the development of housing through the 2021-2029 planning period, specific future projects are subject to regulation of the General Plan, performance standards and permitting processes of the City’s Municipal Code, including the Planning and Zoning regulations, CEQA review of each proposed project, and all mitigation measures contained in applicable CEQA documents. Furthermore, although the Housing Element Update includes programs that commit the City to future amendments to the Planning and Zoning regulations, these future amendments are currently conceptual in nature. These potential future amendments to the Planning and Zoning regulations will undergo separate CEQA reviews at the time of the zoning code amendments are defined.

SECTION 8. Now, therefore, be it resolved, that the City Council adopt the 2021 Housing Element (2021-2029) to replace the 2013 Housing Element and 2018 Housing Element Update of the General Plan and approves the associated addendum to the Cudahy 2040 General Plan EIR (SCH#2017071071).

PASSED AND APPROVED THIS 15th DAY OF FEBRUARY 2022 BY THE FOLLOWING ROLL CALL VOTE:

AYES:

NOES:

ABSENT:

ABSTAIN:

Mayor
ATTEST:

City Clerk

Blank Page

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02/15/2022 Page 1 of 5

STAFF REPORT
Date: February 15, 2022
To: Honorable Mayor and City Council
From: Alfonso Noyola, City Manager
By: City Attorney’s Office
Subject: City Council consideration of Third Amendment to the Exclusive Negotiating Agreements by and between the City of Cudahy and Camerra Capital for the LongRange Property Management Plan Site 1 and GloGreen, LLC for the Long-Range Property Management Plan Site 6

RECOMMENDATION
The City Council is recommended to approve the proposed third amendment to the Exclusive Negotiation Agreements by and between the City of Cudahy and Camerra Capital for Site 1 and GloGreen, LLC for Site 6.

BACKGROUND
The Cudahy Community Development Commission functioned as a Community Redevelopment Agency under the California Redevelopment Law. The Cudahy Community Development Commission was dissolved effective February 1, 2012, by way of Assembly Bill 1x26 (as subsequently amended from time to time, the “Dissolution Law”) and the California Supreme Court’s decision in California Redevelopment Association v. Matosantos (2011) 53 Cal.4th 231. The Dissolution Law allowed local agencies to create a “successor agency” for each dissolved redevelopment agency, and the City of Cudahy (“City”), which serves as the Successor Agency to the former Cudahy Community Development Commission (the “Successor Agency”). The Successor Agency’s LongRange Property Management Plan (“LRPMP”) provides for the transfer of multiple parcels, Site 1 through Site 6, formerly owned by the Cudahy Community Development Commission to the City for “future development,” subject to entrance into a compensation agreement with the relevant taxing entities.

City Council and Developers entered into Exclusive Negotiating Agreements, along with First and Second Amendments extending the negotiation periods to allow additional time for the parties to Item Number
16A

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negotiate a Disposition and Development Agreement (“DDA”).

On December 30th, 2020, the City Council approved the Exclusive Negotiating Agreements (“ENA”) for Site 1 and Site 6. Since then,staff and Developers have been negotiating terms for the disposition and development of the Sites. Additionally, the City has begun exploring the process for entering into the Compensation Agreement which must occur prior to the completion of the sale of properties.

On April 20, 2021, the City Council approved an extension of the Exclusive Negotiating Agreement by approving and executing the First Amendment Agreement for Site 1 and Site 6. Providing additional time for the City and Developers to accomplish a Compensation Agreement needed prior to selling these properties. Since, the Compensation Agreement required additional time to perform. The Parties extended their negotiation with a Second Amendment Agreement.

On or about October 19, 2021, the City Council approved a second extension to the ENA by executing the Second Amendment Agreement for Sites 1 and 6. Allowing, additional time until February 24, 2022, to enter into a PSA. After the First and Second Amendments the parties continue negotiating and making sure everything was in place. However, in order for the parties to continue negotiating a fair deal with adequate requirements, additional time is requested with this Third Amendment Agreement to have in place a Compensation Agreement with the taxing entities and a Purchase and Sale Agreement (“PSA”).

ANALYSIS & DISCUSSION
The proposed Third Amendments would extend the term of the ENAs for Sites 1 and 6 by 120 days, through June 24, 2022. It is staff’s belief that during this period a Disposition and Development Agreement for each site will be successfully negotiated. The First and Second Amendments made no additional changes to the ENAs besides the extension of negotiation. This Third Amendment, just like the first and second amendment will extend the negotiation period of the ENA.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”):

In accordance with the provisions of the California Environmental Quality Act (CEQA), an environmental analysis has been completed for these agreements. As a result of that analysis, it has been determined that the extension of the ENA is categorically exempt from CEQA pursuant to State CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the activity in question will have a significant effect on the environment because the time extension will not lead to any direct or reasonably foreseeable indirect physical environmental impacts.

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ATTACHMENTS

1. Third Amendment Agreement to ENA with Camerra Capital, Inc (Site 1); and

2. Second Amendment Agreement to ENA with GloGreen, LLC (Site 6).

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Attachment 1
Third Amendment to Site 1 ENA

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Attachment 2
Third Amendment to Site 6 ENA

55733.00002\34420167.2
1 2021

THIRD AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT
(Engagement: Development of Site 1 b\ Camerra Capital, Inc.) (Parties: Camerra Capital, Inc. and Cit\ of Cudah\)
THIS THIRD AMENDMENT (³Third Amendment´) to the E[clusive Negotiating Agreement, (³E[clusive Negotiating Agreement´), is hereb\ entered into this _____da\ RI FHbUXaU\, 2022 (the ³Effective Date´) b\ and betZeen the Cit\ of Cudah\, a municipal corporation (hereinafter, ³CITY´) and Camerra Capital, Inc. (hereinafter, ³DEVELOPER´). For purposes of this Third Amendment, the capitali]ed term ³Parties´ shall be a collective reference to the CITY and DEVELOPER and the capitali]ed term ³Part\´ shall refer to the CITY or DEVELOPER interchangeabl\, as appropriate.

RECITALS
This Third Amendment is made and entered into Zith respect to the folloZing facts:

WHEREAS, on December 31, 2020, the Parties e[ecuted and entered into the agreement entitled ³E[clusive Negotiating Agreement´ (hereinafter, the ³ENA´) approved b\ the Cit\ Council for the development of Parcel Site 1. The ENA is attached and incorporated hereto as E[KLbLW ³B´; and
WHEREAS, the ENA original Term Zas one hundred and tZent\ (120) da\s Zhich Zould have e[pired on April 29, 2021, and
WHEREAS, on or about April 20, 2021, prior to the 120 da\s, the Parties entered into the First Amendment to the ENA e[tending the Term through October 27, 2021, hereto as E[KLbLW ³A.´ Although the Parties diligentl\ pursued the negotiation of the PSA additional time Zas necessar\ to complete the PSA; and
WHEREAS, the Parties negotiating in good faith, seek on or about October 19, 2021, prior to the termination of the First Amendment of October 27th, 2021, to further amend the ENA under a Second Amendment to e[tend the negotiation of terms of the ENA to e[pire in 120 da\s (Februar\ 24, 2022), hereto as E[KLbLW ³A,´ in order to preserve the rights and duties agreed on the original ENA. Due to pandemic constrains Parties seek additional time to continue negotiating a PSA; and
WHEREAS, the Parties have been negotiating in good faith, and are seeking to further amend the ENA under this Third Amendment to e[tend the terms of the ENA so that it shall Attachment 1 Page 308 of 371
55733.00002\34420167.2
2 e[pire in another 120 da\s (June 24, 2022), in order to preserve the rights and duties agreed on the original ENA; and
NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficienc\ of Zhich is hereb\ acknoZledged, and intending to be legall\ bound hereb\, the Parties agree as folloZs:

1. Section 3(e) is hereb\ amended as folloZs: (Negotiation Period) of the E[clusive Negotiating Agreement is hereb\ amended to e[tend the Term of such Agreement for 120 da\s from previous Second Amendment e[piration date making the Term e[pire on June 24, 2022.

2. The provisions of this Third Amendment shall be deemed a part of the ENA and e[cept as otherZise provided under this Amendment, the ENA and all provisions contained therein shall remain binding and enforceable. In the event of an\ conflict or inconsistenc\ betZeen the provisions of this Third Amendment and the provisions of the ENA, the provisions of this Third Amendment shall control, but onl\ in so far as such provisions conflict Zith the ENA Agreement and no further.

IN WITNESS WHEREOF, the Parties hereto have caused this Third Amendment to be e[ecuted on the da\ and \ear first appearing above.
[SIGNATURES ON NEXT PAGE]
CITY:

CLW\ RI CXdaK\
B\: ___________________________________
Alfonso No\ola
Cit\ Manager

APPROVED AS TO FORM
B\:__________________________________
Cit\ Attorne\

DEVELOPER
CaPHUUa CaSLWaO, IQc.

B\: _____________________________
Diego Esquivel

55733.00002\34420167.2
3 EXHIBIT A

FIRST AND SECOND

AMENDMENT AGREEMENT

55733.00002\34420167.2
1 2021

SECOND AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT
(Engagement: Development of Site 1 by Camerra Capital, Inc.) (Parties: Camerra Capital, Inc. and City of Cudahy)
THIS SECOND AMENDMENT (“Second Amendment´) to the Exclusive Negotiating Agreement, (“Exclusive Negotiating Agreement´), is hereby entered into this 19th day of October, 2021 (the “Effective Date´) by and between the City of Cudahy, a municipal corporation (hereinafter, “CITY´) and Camerra Capital, Inc. (hereinafter, “DEVELOPER´). For purposes of this Second Amendment, the capitalized term “Parties´ shall be a collective reference to the CITY and DEVELOPER and the capitalized term “Party´ shall refer to the CITY or DEVELOPER interchangeably, as appropriate.

RECITALS
This Second Amendment is made and entered into with respect to the following facts:

WHEREAS, on December 31, 2020, the Parties executed and entered into the agreement entitled “Exclusive Negotiating Agreement´ (hereinafter, the “ENA´) approved by the City Council for the development of Parcel Site 1. The ENA is attached and incorporated hereto as Exhibit “A”; and
WHEREAS, the ENA original Term was one hundred and twenty (120) days which would have expired on April 29, 2021, and
WHEREAS, on or about April 20, 2021, prior to the 120 days, the Parties entered into the First Amendment to the ENA extending the Term through October 27, 2021. Although the Parties have diligently pursued the negotiation of the PSA additional time is necessary to complete the PSA; and
WHEREAS, the Parties have been negotiating in good faith, and are now seeking to further amend the ENA under this Second Amendment to extend the negotiation and terms of the ENA so that it shall expire in 120 days (February 24, 2022), in order to preserve the rights and duties agreed on the original ENA; and

55733.00002\34420167.2
2 NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

1. Section 3(e) is hereby amended as follows: (Negotiation Period) of the Exclusive Negotiating Agreement is hereby amended to extend the Term of such Agreement for 120 days from previous First Amendment expiration date making the Term expire on February 24, 2022.

2. The provisions of this Second Amendment shall be deemed a part of the ENA and except as otherwise provided under this Amendment, the ENA and all provisions contained therein shall remain binding and enforceable. In the event of any conflict or inconsistency between the provisions of this Second Amendment and the provisions of the ENA, the provisions of this Second Amendment shall control, but only in so far as such provisions conflict with the ENA Agreement and no further.

IN WITNESS WHEREOF, the Parties hereto have caused this Second Amendment to be executed on the day and year first appearing above.
[SIGNATURES ON NEXT PAGE]
CITY:

City of Cudahy
By: ___________________________________
Alfonso Noyola
City Manager

APPROVED AS TO FORM
By:__________________________________
City Attorney

DEVELOPER
Camerra Capital, Inc.

By: _____________________________
Diego Esquivel

55733.00002\34420167.2
3 EXHIBIT A

FIRST AMENDMENT
AND

EXCLUSIVE NEGOTIATING AGREEMENT

55733.00002\34420167.2
4 EXHIBIT B

EXCLUSIVE NEGOTIATING AGREEMENT

BHWZHHQ
CaPHUUa CaSLWaO, IQc. aQd CLW\ RI CXdaK\

EXCLUSIVE NEGOTIATING AGREEMENT
Parties: City of Cudahy and Camerra Capital, Inc.,
Property: Long Range Property Management Plan Site 1
THIS EXCLUSIVE NEGOTIATING AGREEMENT (the "Agreement") is dated as of December 21, 2020 and is entered into by and between Camerra Capital, Incorporated and its permitted assigns (collectively the "Developer") and the City of Cudahy (the "City")." Developer and the City are collectively referred to herein as the "Parties." This Agreement is entered into in light of the facts set forth in the following recital paragraphs:

RECITALS
A. WHEREAS, Developer and its officers and members have recent and relevant experience developing and managing safe, decent and affordable rental and market-rate housing in California; and
B. WHEREAS, Developer has submitted a written proposal dated October 3, 2020 (the "Developer Proposal") to the City to acquire that certain real property ("Site 1") from the City, which is located approximately at 5256 Elizabeth Street and 5260 Elizabeth Street with the following Los Angeles County Assessor Parcel Numbers: 6224-001-901 and 6224-001-902, and such real property is more specifically described in Exhibit "A," which is attached hereto.

C. WHEREAS, the Developer Proposal sets forth certain general terms on which the Developer is prepared to acquire Site 1 from the City and thereafter, use and improve Site 1 for residential luxury apartment units; and
D. WHEREAS, the City of Cudahy in its capacity is entering into this Agreement with Developer for the negotiation of the sale and development of Site 1; and E. WHEREAS, the Consolidated Oversight Board for Los Angeles County (the "Oversight Board") authorized the transfer of title of Site 1 from the Successor Agency to the former Cudahy Community Development Commission (the "Successor Agency") to the City by quitclaim deed pursuant to Oversight Board Resolution No. OB-2020-04 dated November 9, 2020; and
F. WHEREAS, City Council authorized the acceptance of such transfer of Site 1 at its meeting of November 17, 2020 pursuant to the terms of the quitclaim deed, including, but not limited to its Section 5; and
G. WHEREAS, The State Department of Finance (the "DOF") determined, by letter dated December 17, 2020, that the disposition of land contemplated in Oversight Board Resolution No. OB-2020-04 requires no action on the part of DOF given the land transfer's consistency with the Successor Agency's approved Long-Range Property Management Plan ("LRPMP"); and
H. WHEREAS, the sale of land is not governed by the Surplus Land Act (Gov. Code §, 54220 et seq.) because the contemplated transaction is authorized by other statutes including but not limited to Government Code Sections 52201, 54222.3, 37350 et seq., 54220 et seq. and/or 50568 et seq.; and
1

I. WHEREAS, the Developer and the City desire to negotiate with each other regarding the potential terms and conditions of a future PSA between the Developer and the City for the Developer to acquire the fee interest of Site 1 from the City for luxury residential apartment units purposes as generally consistent with the Developer Proposal.

NOW, THEREFORE, in view of the goals and objectives of the State of California and the City relating to the disposition of City-owned lands for potential development as luxury residential apartment units and in consideration of the mutual promises of City and Developer set forth in this Agreement, the City and Developer agree as follows:

1. Effective Date and Negotiation of PSA.
(a) This Agreement shall take full force and effect and shall be deemed to be an " exclusive negotiating agreement" as this term is used in Government Code Section 54234(b)(1)(A) after it has first been approved by the City and signed by the Parties (the "Effective Date"). (b) Subject to the terms and conditions of this Agreement, during the Negotiation Period (defined in Section 3), Developer and the City shall proceed in good faith to undertake discussion, evaluations, negotiation and documentation of the potential terms of a PSA for Site 1 which is mutually satisfactory to the Parties. Such PSA shall, among other things, provide for the completion of the disposition of Site 1 by the City to Developer by a date not later than December 31, 2022, unless, prior to that date, this Agreement is terminated by either Party as provided in Section 3 or Section 15.2 or Section 16.2. During the Negotiation Period Developer and the City shall generally assist and cooperate with each other and supply such documents and information as may be reasonably requested by the other to facilitate the conduct of such negotiations. As the term is used in the preceding sentence and elsewhere in this Agreement, the words "assist and cooperate" when applied to the City mean and refer to the provision of information, reports or documents to Developer with respect to Site 1 which are already in the possession of the City or such new information, reports or documents relating to Site 1 and this Agreement which do not require the City to incur any third party cost or expense which may not be reimbursed to the City upon the proposed disposition of Site 1 to the Developer under the terms of a future PSA. During the Negotiation Period both Developer and the City shall exercise reasonable efforts to conduct and complete discussions relating to the preparation of terms and conditions of the PSA as may be mutually acceptable to the Developer and the City in the sole and absolute discretion reserved to each of them. The exact terms and conditions of the PSA, if any, shall be determined during the course of these negotiations. Nothing in this Agreement shall be interpreted or construed to be a representation or agreement by either the Developer or the City, that a mutually acceptable PSA will be produced from negotiations under this Agreement either before or after the Effective Date. Nothing in this Agreement shall impose any obligation on either Party to agree to the approval and execution or be bound by a definitive PSA in the future. (c) Notwithstanding the provision of Section 1(a) to the contrary as relates to the proposed discussion and negotiation of the Parties with respect to Site 1, the City acknowledges that promptly following the acquisition of Site 1 by Developer in accordance with the terms and conditions of the proposed PSA, the Developer intends to begin construction on Site 1 of the mixed use affordable rental housing facility described in the Developer Proposal and which shall be reserved for residential occupancy by low-income senior citizens (the "Project"). (d) Notwithstanding any provision of this Agreement to the contrary, the City Council of the City reserves the sole and absolute discretion to approve, disapprove or impose conditions on the final form of the PSA before any such PSA may take effect. 2

(e) The close of escrow of such PSA by and between the Developer and City is subject to the City's approval of a compensation agreement, as required pursuant to Health and Safety Code Section 34180(f) and the LRPMP, with applicable taxing entities to provide payments to them in proportion to their shares of the base property tax ("Compensation Agreement") in its sole and absolute discretion as a condition precedent to the close of escrow of such PSA.

2. Developer Acknowledgments.
(a) This Agreement shall not be deemed to be an obligation of either Party to enter into a PSA for Site 1.
(b) Developer acknowledges and agrees that: (1) under this Agreement, the City does not commit itself or agree to enter into a PSA or undertake any other exchange, sale, lease or other transfer of Site 1 to Developer; (2) no provision of this Agreement shall be deemed to be an offer by the City, nor an acceptance by the City of any offer or proposal from Developer, for the City to convey any estate or interest in the Site 1 to Developer; (3) Developer has not acquired, nor shall the Developer acquire, by virtue of any term of this Agreement, any legal or equitable interest in real or personal property from the City; (4) further efforts by either Party to perform due diligence, arrange or obtain financing, or carry out other acts in contemplation of the possible acquisition, transfer of Site 1 or the development of Project shall not be deemed evidence of intent by either Party to be bound by any term, condition, covenant, restriction or agreement relating to acquisition, transfer or development of Site 1 or the Project. (c) The Developer further acknowledges and agrees that no provision of this Agreement shall be interpreted or construed to be a guaranty, warranty, representation or assurance by the City that any public agency or other entity shall give any discretionary approval or provide any development financial assistance with respect to the Project on such terms which may be acceptable to the Developer or otherwise.

3. Negotiation Period.
(a) The Negotiation Period shall begin on the date when both of the following events shall have occurred:
(i) This Agreement has been approved by the City Council; and (ii) This Agreement has been fully executed by the Parties.

Once (i) and (ii) have occurred, the Negotiation Period shall begin and thereafter expire or be terminated as provided in the following subsections of this Section 3. (b) Prior to the Effective Date, either Party may terminate this Agreement in its discretion for any reason upon thirty (30) days prior written notice to the other Party which references this Section 3(b), whereupon this Agreement shall terminate and neither Party shall have any further right or obligation to the other under this Agreement. (c) Prior to the Effective Date, the City shall not solicit or respond to any proposal from a third party to acquire Site 1 from the City unless the City has first given notice to Developer of termination of this Agreement under Section 3(b). (d) After the Effective Date this Agreement may be terminated without cause or liability by either Party upon 15 days' notice written notice or as provided in Section 14 or Section 15 as applicable.
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(e) If the rights and duties of the Parties which arise under this Agreement have not be expressly merged into a PSA within one hundred twenty (120) days of approval of this Agreement by the City Council, for any reason, then in such an event, this Agreement shall terminate without further notice whereupon neither Party shall have any further rights or obligations to the other under this Agreement except with respect to obligations which expressly survive termination of this Agreement.

4. Extension of Negotiation Period. The Negotiation Period may be extended by the written agreement of the Parties.

5. PSA General Provisions.

5.1. General Terms and Conditions. The Parties anticipate that the PSA shall include provisions addressing the following described subjects as generally set forth in the Developer Proposal:

5.1.1. Site 1 Acquisition and Ownership by the Developer Control. The specific terms on which Site 1 shall be acquired from the City by Developer or Developer's permitted assignee. The words "Developer's permitted assignee" shall refer to the provisions of the PSA as set forth at Section 5.1.5, below.

5.1.2. Disposition of Property. The disposition of Site 1 to the Developer under the PSA shall be completed not later than December 31, 2022.

5.1.3. Scope of Development. The Project shall include: (1) up to approximately twenty-four (24) to forty (40) residential luxury apartment units as per City of Cudahy permits, pursuant to recorded affordability conditions, covenants and restrictions reasonably acceptable to the City and each of the other Responsible Agencies, as applicable;

5.1.4. Developer Permitted Assignee. Pursuant to Section 14 and Section 19.5, City shall not unreasonably withhold_approval of the assignments of the interests and rights under this Agreement to an affiliate of the Developer if requested by the Developer.

5.1.5. Other. Such other matters as the Developer and the City may mutually agree.

5.2. Developer Compliance with Laws with Respect to Project. Under the terms of the PSA, the Developer shall comply with the requirements of all applicable City ordinances, resolutions and development entitlement approvals for the planning, design, construction and operation of the Project.

6. License to Enter Site 1. The City authorizes Developer, its contractors, agents and employees to enter Site 1 for the purpose of performing tests, surveys and inspections, and obtaining data necessary or appropriate to negotiate the PSA or perform investigations related to the Project; provided, however, Developer shall deliver prior written notice to the City of any such entry and written evidence of Developer's satisfaction of all insurance requirements of this Agreement prior to entering Site 1. In the case of invasive tests or sampling, the City may impose such insurance, indemnification, guaranty and other requirements as the City determines appropriate, in its reasonable discretion.
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7. Costs and Expenses. All fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning or design activities, drawings, specifications or other activity or matter relating to Site 1 or the Project or negotiation or documentation of a future PSA that may be undertaken by Developer during the Negotiation Period regarding any matter relating to this Agreement, a future PSA for Site 1 or the Project, shall be the sole responsibility of and shall be undertaken at the sole cost and expense of Developer and no such activity or matter shall be deemed to be undertaken for the benefit of, at the expense of or in reliance upon the City except as may hereafter be set forth in the PSA. Developer shall also pay all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the City or any other Responsible Agency of any and all applications and other documents and information to be submitted to the City or such other Responsible Agency by Developer either pursuant to this Agreement or otherwise associated with the Project or Site 1.

8. Deposit.
a) Concurrent with the Developer's execution of this Agreement, the Developer shall pay to the City a deposit in the amount of Twenty Five Thousand Dollars ($25,000) in immediately available funds ("Initial Deposit") to ensure that the Developer will proceed diligently and in good faith to fulfill its obligations under this Agreement during the Term, as part of the consideration for the City's agreement not to negotiate with other persons during the Negotiation Period, and to defray certain costs of the City in pursuing the contemplated negotiations with the Developer during the Term, pursuant to this Agreement including staff time, consultant fees and attorney fees associated with review and implementation of this Agreement or preparing the PSA all of which will be charged against the Initial Deposit. If at any the Initial Deposit falls below Five Thousand Dollars ($5000) Developer shall make an additional deposit of Ten Thousand Dollars ($10,000) if requested by the City. Any funds remaining in the Initial Deposit at the termination of this Agreement shall either be returned to the Developer or applied toward the purchase price of the Property at the Developer's discretion. The Initial Deposit shall be in addition to those fees and expenses required by the City of Developer for any permit, other required entitlement or Project processing.
(b) Upon each extension of the Term, if any, the Developer shall deposit an additional Ten Thousand Dollars ($10,000) in immediately available funds with the City on the first day of any extension of the Term (each, an "Extension Deposit"). Each Extension Deposit is intended to ensure that the Developer will proceed diligently and in good faith to fulfill its obligations under this Agreement during any extension of the Term, as part of the consideration for the City's agreement not to negotiate with other persons during any such extension of the Negotiation Period, and to defray certain costs of the City in pursuing the contemplated negotiations with the Developer during any such extension of the Term, pursuant to this Agreement.

9. No City Approval. Nothing in this Agreement, nor any comments provided by the City or City staff, nor any failure of City staff to provide comments to any submittal by the Developer pursuant to this Agreement shall: (1) modify or replace any land use entitlement process of the City applicable to the Project, (2) limit the police power land use jurisdiction of the City as relates to Site 1 or the Project, (3) constitute an approval of all or any portion of the Project by the City pursuant to the police power land use 5

jurisdiction of the City; or (4) constitute any approval of all or any portion of a future PSA by the City.

10. City Due Diligence. The City reserves the right to reasonably obtain further information, data and commitments to ascertain the ability and capacity of Developer to complete its acquisition of Site 1 from the City by a date not later than December 31, 2022. Developer acknowledges that it may be requested to make certain financial disclosures to the City, the City staff, legal counsel or other consultants, as part of the financial due diligence investigations of the City relating to the potential sale of Site 1 and development of the Project Site 1 by Developer and that any such disclosures by the Developer to the City, may become public records. The City shall maintain the confidentiality of financial information of Developer to the extent allowed by law, as determined by the City Attorney.

11. Developer Due Diligence. Subject to the assistance and cooperation of the City, during the Negotiation Period, Developer reserves the right to request and reasonably obtain all necessary and non-privileged information and data as relates to Site 1 from the City as the Developer may deem to be appropriate.

12. Developer Indemnity. Developer shall indemnify, defend and hold harmless the City and the elected and appointed officials, officers, agents and employees of the Successor Agency, and the County Oversight Board (individually or collectively, an ("Indemnified Party") against any and all losses arising out of any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, arising through activities of the Developer with respect to Site 1, or Developer's contractors or employees which may also be brought or asserted against any Indemnified Party that relates to or arises out of: (i) property damage or bodily injury or death of any person in connection with this Agreement; (ii) entry upon Site 1 by Developer, its contractors or employees; (iii) any other inspection of Site 1 by Developer, its contractors or employees; (iv) any violation of applicable law including but not limited to the Surplus Land Act (Gov. Code §, 54220 et. seq) in connection with project contemplated under this Agreement or (v) the preparation of any report or plan commissioned by Developer.

No Indemnified Party shall be entitled to indemnification under this Section 12 (i), (ii), (iii) and (v) arising from a matter caused by such Indemnified Party's gross negligence or willful misconduct. In the event any action or proceeding is brought against an Indemnified Party by reason of a claim arising out of any loss for which Developer is obligated to indemnify, defend or hold harmless the Indemnified Party, and upon written notice from such Indemnified Party, Developer shall, at Developer's sole expense, answer and otherwise defend such action or proceeding. The provisions of this Section 12 shall survive the expiration or termination of this Agreement.

13. Developer Insurance. Without in any way limiting Developer's indemnification obligations under this Agreement, subject to the other provisions of this Section 12 and subject to approval by the City of the insurers and policy forms, Developer shall obtain and maintain throughout the Negotiation Period at Developer's expense.

14. Restrictions Against Change in Ownership, Management or Control of Developer; Assignment of Agreement During the Negotiation Period. The City and Developer acknowledge and agree that the City is entering into this Agreement with Developer on the basis of the particular experience, financial capacity, skills and capabilities of Developer. This Agreement is personal to Developer and is not assignable without the prior written consent of the City, which may be given, withheld or conditioned in City's sole and absolute discretion; provided however that the PSA may contain provisions reasonably satisfactory to the City which permit assignment of the Developer interest in 6

the PSA to an affiliate of Developer prior to the completion of the disposition of Site 1 pursuant to the PSA. For the purposes of this Agreement, the term "affiliate" means any person or entity, directly or indirectly, controlling or controlled by or under common control with Developer, whether by direct or indirect ownership of equity interests, by contract, or otherwise.

15. Developer Events of Default and City Remedies.

15.1. Developer Events of Default. The occurrence of any of the following shall constitute an "Event of Default" on the part of Developer under this Agreement:

15.1.1. Schedule of Performance. Failure of Developer to meet a performance milestone by the applicable date contained in the Schedule of Performance of this Agreement, if such failure is not cured within ten (10) days after written notice from the City of such failure.

15.1.2. Misrepresentation. Any material breach of any representation or warranty made by Developer in this Agreement that is not cured within ten (10) days after written notice from the City to Developer of such breach.

15.1.3. Unauthorized Assignment. Any assignment or attempted assignment by Developer in violation of Section 14 that is not cured within ten (10) days after written notice from the City to Developer of such breach.

15.1.4. Insurance. Failure of Developer to procure or maintain any of the insurance coverage required by this Agreement resulting in a lapse in required insurance coverage which lapse is not cured within ten (10) days after written notice from the City to Developer of such breach.

15.1.5. Other Developer Defaults. Failure by the Developer to comply with any other provision of this Agreement that is not cured within fifteen (15) days after written notice from the City to the Developer of such breach.

15.2. City Remedies. If there is an Event of a Default by Developer, the City may, in the sole and absolute discretion of the City, terminate this Agreement by delivering written notice of termination to Developer which references this Section 15.2 of this Agreement. Upon any such termination, neither Party shall have any further rights or obligations to the other under this Agreement, except obligations that expressly survive termination of this Agreement. The City hereby waives any remedy of specific performance following an Event of Default by Developer arising under this Agreement.

The sole and exclusive remedy for the occurrence of an Event of Default by Developer shall be the termination of this Agreement. In the event such termination neither Party shall have any further right or obligation under this Agreement except as to the Developers indemnity obligations which may arise under Section 12.

16. City Events of Default and Developer Remedies

16.1 City Events of Default. The occurrence of any of the following shall constitute an "Event of Default" on the part of the City under this Agreement.

16.1.1 Negotiation of Disposition of Site 1 With Other Parties. The City will be in breach of this Agreement if it begins to engage in land disposition negotiations concerning Site 1 with any party other than Developer before the termination of this Agreement 7

and such breach is not corrected by the City within ten (10) days after written notice from the Developer of such breach.

16.1.2 Other City Default. Failure by the City to comply with any other provision of this Agreement which is not corrected within fifteen (15) days after written notice from Developer to the City of such breach.

16.2 Developer's Remedies. If there is an Event of a Default by the City, Developer may, in the sole and absolute discretion of Developer terminate this Agreement by delivering written notice of termination to City which references this Section 16.2 of this Agreement.

Developer hereby waives any remedy of specific performance following an Event of Default by the City. Upon any such termination, neither Party shall have any further rights or obligations to the other under this Agreement, except obligations that expressly survive termination of this Agreement. The sole and exclusive remedy for the occurrence of an Event of Default by the City shall be the termination of this Agreement. In the event of such termination neither Party shall have any further right or obligation under this Agreement except as to the Developer's indemnity obligations which may arise under Section 12. Notwithstanding the foregoing, the Developer's recovery of damages against the City under this Agreement shall be limited to recovering any amounts actually expended by the Developer in reasonable reliance on this Agreement not to exceed the amount of TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000.00), if City's default and failure to cure such default occurs prior to the approval of the Compensation Agreement by all necessary parties to the Compensation Agreement, including the City. This limit on damages shall not apply if City's default occurs after the Compensation Agreement is approved by all necessary parties. The Buyer acknowledges the protections of Civil Code Section 1542 relative to the waivers and releases contained in this Agreement which Civil Code Section reads as follows:
"A general release does not extend to claims that 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 with the debtor or released party."
By initialing below Developer waives the provisions of Section 1542 in connection with the waivers and releases in this Paragraph.

Developer's initials

17. Developer Representations and Warranties. Developer represents, warrants and covenants to and for the benefit of the City and the Oversight Board that, as of the Effective Date and at all times during the Negotiation Period, as follows:

17.1. Valid Existence; Good Standing; Joint Venture Relationships. Developer is a nonprofit public benefit corporation duly organized and validly existing under the laws of the State of California. Developer has all requisite power and authority to acquire Site 1 from the City and conduct its business as presently conducted. Developer has made all filings and are in good standing in the jurisdiction of the State of California.

17.2. Authority. Developer has all requisite power and authority to enter into and perform this Agreement.
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17.3. No Limitation on Ability to Perform. Neither Developer's articles of incorporation nor any other organizational document regarding Developer in any way prohibits, limits or otherwise affects the right or power of Developer to enter into or perform this Agreement. Developer is not a party to or bound by any contract, agreement, indenture, trust agreement, note, obligation or other instrument that could prohibit, limit or otherwise affect Developer's entry into or performance of this Agreement. To the best of Developer's knowledge, no consent, authorization or approval of, or other action by, and no notice to or filing with, any governmental authority, regulatory body or any other person or entity is required for the due execution, delivery or performance by Developer of this Agreement or any of the terms or covenants contained in this Agreement. There is no pending or threatened suit or proceeding or undischarged judgment affecting Developer before any court, governmental agency, or arbitrator that might materially adversely affect the enforceability of this Agreement, the ability of Developer to perform the transactions contemplated by this Agreement or the business, operations, assets or condition of Developer.

17.4. Valid Execution. The execution and delivery of this Agreement by Developer has been duly and validly authorized by all necessary action of Developer and others. This Agreement will be a legal, valid and binding obligation of Developer, enforceable against Developer in accordance with its terms.

18. Notices. A notice or communication under this Agreement by either Party to the other shall be sufficiently given or delivered, if in writing and personally delivered to the other Party or delivered to the other Party by messenger, overnight commercial business mail or if delivered by email and confirmed by the delivery of U.S. First Class Mail with return receipt requested to the appropriate Party at its address as follows:

In the case of a notice or communication to the City:

City of Cudahy
5220 Santa Ana Street
Cudahy, CA 90201
Email: [email protected]
With a copy to:

Olivarez Madruga Lemieux O'Neill, LLP
500 S Grand Ave., 12th floor
Los Angeles, CA 90071
And in the case of a notice or communication sent to Developer:

Camerra Capital, Inc.

CIO: Diego Esquivel
140 East Commonwealth Ave., Suite #208
Fullerton, CA 92835
Email: [email protected]
Any mailing address may be changed at any time by giving written notice of such change in the manner provided above at least ten (10) days prior to the effective date of the change. All notices under this Agreement shall be deemed given, received, made or communicated on the date personal receipt actually occurs or, if such notice is given by email and confirmed by U.S. 9

First Class Mail, on the date when the confirming mailed notice is deposited by the Party giving such email notice into U.S. First Class Mail.

19. General Provisions.

19.1. Amendments. This Agreement may be amended or modified only by a written instrument signed by both City and Developer.

19.2. Severability. If any provision of this Agreement, or its application to any person or circumstance, is held invalid by any court, the invalidity or inapplicability of such provision shall not affect any other provision of this Agreement or the application of such provision to any other person or circumstance, and the remaining portions of this Agreement shall continue in full force and effect, unless enforcement of this Agreement as so modified by and in response to such invalidation would be unreasonable or grossly inequitable under all of the circumstances or would frustrate the fundamental purposes of this Agreement. Without limiting the foregoing, in the event that any applicable federal or state law prevents or precludes compliance with any material term of this Agreement, the Parties shall promptly modify, amend or suspend this Agreement, or any portion of this Agreement, to the extent necessary to comply with such provisions in a manner which preserves to the greatest extent possible the benefits to each of the Parties to this Agreement. However, if such amendment, modification or suspension would deprive the Developer or the City of the substantial benefits derived from this Agreement or make performance unreasonably difficult or expensive, then the affected Party may terminate this Agreement upon fifteen (15) days written notice to the other Party. In the event of such termination, neither Party shall have any further right or obligation under this Agreement except as otherwise provided herein.

19.3. Non-Waiver. No waiver made by either Party with respect to the performance, or manner or time of performance, or any obligation of the other Party or any condition to its own obligation under this Agreement will be considered a waiver with respect to the particular obligation of the other Party or condition to its own obligation beyond those expressly waived, to the extent of such waiver, or a waiver in any respect in regard to any other rights of the Party making the waiver or any other obligations of the other Party.

19.4. Non-Liability. No member, official, agent or employee of the City or the Oversight Board will be personally liable to Developer, or any successor in interest (if and to the extent permitted under this Agreement), in an Event of Default by the City. No director, officer, agent or employee of Developer will be personally liable to the City in an Event of Default by Developer.

19.5. Successors and Assigns: Third Party Beneficiary. This Agreement shall inure to the benefit of and bind the respective successors and assigns of the City and the Developer, subject to the limitations on assignment by Developer set forth in Section

13. This Agreement is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any other person and shall not be deemed to have conferred any rights, express or implied, upon any other person except as the indemnity obligation of the Developer to the Indemnified Parties as set forth in Section 11.

19.6. Governing Law. The City and Developer acknowledge and agree that this Agreement was negotiated, entered into and is to be fully performed in the City of Cudahy, California. The City and the Developer agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the 10

substantive and procedural laws of the State of California, without application of conflicts or choice of laws principles.

19.7. Entire Agreement. This Agreement (including the attachments and exhibits) contains all of the representations of and the entire agreement between the Parties with respect to the subject matter of this Agreement. Any prior correspondence, memoranda, agreements, warranties or representations relating to such subject matter are superseded in total by this Agreement. No prior drafts of this Agreement or changes from those drafts to the signed version of this Agreement shall be introduced as evidence in any litigation or other dispute resolution proceeding by either Party or any other person and no court or other body shall consider those drafts in interpreting this Agreement.

19.8. Time of the Essence. Time is of the essence with respect to each provision of this Agreement.

19.9. Counterparts. This Agreement may be signed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

19.10. Approvals and Consents. (a) Excluding amendments to this Agreement which shall require the separate approval of the governing bodies of each Party, unless this Agreement otherwise expressly provides or unless applicable law requires otherwise, all approvals, consents or determinations to be made by or on behalf of the City during the Negotiation Period under this Agreement shall be made by the Interim City Manager, Henry Garcia ([email protected]), and Salvador Lopez, the Economic Development Director (SLopez(&.cityofcudahyca.00v). The Interim City Manager and Economic Development Director may refer such requested consent or determination to the City Council for approval by the City of any such matters. In the case of the Developer all approvals, consents or determinations to be made by or on behalf of the Developer during the Negotiation Period shall be made by Diego Esquivel ([email protected]) ("Developer Representative") or such other employee or agent of Developer as Developer may designate by written notice to the City to act as Developer Representative for a particular matter. Unless otherwise provided in this Agreement, whenever approval, consent or satisfaction is required of a Party pursuant to this Agreement, it shall not be unreasonably withheld, conditioned or delayed and any reasons for disapproval shall be stated in reasonable detail in writing. Such approval by Developer or City of any act or request by the other shall not be deemed to waive or render unnecessary approval of any similar or subsequent acts or requests.

19.11. Relationship of the Parties. (a) No real estate broker commission or other real property finder's fee shall be payable by either Party to any person in connection with the approval of this Agreement by the City. Each Party shall have a duty to indemnity defend and hold the other Party harmless from any claim. (b) The subject of this Agreement is a matter which is solely between Developer and the City as relates to Site 1. No Responsible Agency is a party to this Agreement. None of the provisions in this Agreement shall be deemed to render City a partner in Developer's business, or joint venturer or member in any joint enterprise with Developer.

19.12. Survival of Indemnity Obligations. Notwithstanding anything to the contrary in this Agreement, each indemnity obligation under this Agreement shall survive expiration or termination of this Agreement.
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19.13. Non-Discrimination. Developer covenants by and for itself and its successors or assigns, and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the following conditions:
(a) there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of Site 1; and (2) Developer for itself and any Permitted Assignee shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, subtenants, sublessees, or vendees in Site 1. (remainder of page intentionally left blank]
12

Signature Page
TO

EXCLUSIVE NEGOTIATING AGREEMENT
IN WITNESS WHEREOF, Developer and the City have signed and entered into this Agreement by and through the signatures of their respective authorized representative(s), as follow:

CITY OF CUDAHY,
a public body, corporate and p9#ftic
By:

Date: 12-/31 /2_62-0
Approved as to form:

By:

Victor M. Ponto
Date:

DEVELOPER
Camerra Capital, Incorporated
By:

Its:

Date:

President / CEO
, 2020
EXHIBIT "A"
TO

EXCLUSIVE NEGOTIATING AGREEMENT
13 December 31, 2020

Legal Description of Site 1
[Attached behind this cover page]
14

LEGAL DESCRIPTION
5256 Elizabeth Street, Cudahy, CA 90201
APN: 6224-001-901
Parcel 1:

The West 52.5 feet of the Lot 421 of Tract No.180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13 , Page198, of Maps, in the Office of the County Recorder of said County.

Parcel 2:

An easement for community driveway purpose over the Westerly 7.5 feet of the East 52.5 feet of Lot 421, of Tract No.180, as recorded in Book 13, Page 198, of Maps. 5260 Elizabeth Street, Cudahy CA 90201
APN: 6224-001-902
Parcel 1:

Lot 421 of Tract No. 180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13, Page 198, of Maps, in the Office of the County Recorder of said County.

Except therefrom the West 52.5 feet of said land.

Parcel 2:

An easement for ingress and egress for community driveway purposes over the East 7.5 feet of the West 52.5 feet of Lot 421, of Tract No. 180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13, Page 198, of Maps, in the Office of the County Recorder of said County.

EXHIBIT "B"
TO

EXCLUSIVE NEGOTIATING AGREEMENT
15

55733.00005\34440816.2
1 2021

THIRD AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT
(Engagement: Development of Site 6 by GloGreen, LLC)
(Parties: GloGreen, LLC and City of Cudahy)
THIS THIRD AMENDMENT (“Third Amendment”) to the Exclusive Negotiating Agreement, (“Exclusive Negotiating Agreement”) is hereby entered into this ___day of February, 2022 (the “Effective Date”) by and between the City of Cudahy, a municipal corporation (hereinafter, “CITY”) and GloGreen, LLC (hereinafter, “DEVELOPER”). For purposes of this Third Amendment, the capitalized term “Parties” shall be a collective reference to the CITY and DEVELOPER and the capitalized term “Party” shall refer to the CITY or DEVELOPER interchangeably, as appropriate.

RECITALS
This Third Amendment is made and entered into with respect to the following facts:

WHEREAS, on December 31, 2020, the Parties executed and entered into the agreement entitled “Exclusive Negotiating Agreement” (hereinafter, the “ENA”) approved by the City Council for the development of Parcel Site 6. The ENA is attached and incorporated hereto as Exhibit “B”; and
WHEREAS, the ENA original Term was one hundred and twenty (120) days which would have expired on April 29, 2021; and
WHEREAS, on or about April 20, 2021, prior to the 120 days, the Parties entered into the First Amendment to the ENA extending the Term through October 27, 2021, hereto as Exhibit “A.” Although the Parties diligently pursued the negotiation of the PSA additional time was necessary to complete the PSA; and
WHEREAS, Parties on or about October 19, 2021, prior to the termination of the First Amendment of October 27th, 2021. Parties entered into a Second Amendment to the Exclusive Negotiating Agreement extending the negotiation term to February 24, 2022, hereto as Exhibit “A” The Parties continue to diligently pursue a the negotiation of a PSA. Due to pandemic constrains Parties seek additional time to continue negotiating a PSA; and WHEREAS, the Parties have been negotiating in good faith, and are now seeking to further amend the ENA under this Third Amendment to extend the negotiation and terms of the ENA so that it shall expire in another 120 days (June 24, 2022), in order to preserve the rights Attachment 2 Page 335 of 371
55733.00005\34440816.2
2 and duties agreed on the original ENA; and
NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

1. Section 3(e) is hereby amended as follows: (Negotiation Period) of the Exclusive Negotiating Agreement is hereby amended to extend the Term of such Agreement for 120 days from previous Second Amendment expiration date making the Term expire on June 24, 2022.

2. The provisions of this Third Amendment shall be deemed a part of the ENA and except as otherwise provided under this Amendment, the ENA and all provisions contained therein shall remain binding and enforceable. In the event of any conflict or inconsistency between the provisions of this Third Amendment and the provisions of the ENA, the provisions of this Third Amendment shall control, but only in so far as such provisions conflict with the ENA Agreement and no further.

IN WITNESS WHEREOF, the Parties hereto have caused this Third Amendment to be executed on the day and year first appearing above.
[SIGNATURES ON NEXT PAGE]
CITY:

City of Cudahy
By: ___________________________________
Alfonso Noyola
City Manager

APPROVED AS TO FORM
By:__________________________________
City Attorney

DEVELOPER
GloGreen, LLC
By: _____________________________
John Kadiya

55733.00005\34440816.2
3 EXHIBIT A

FIRST AND SECOND

AMENDMENT AGREEMENT

55733.00005\34440816.2
1 2021

SECOND AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT
(Engagement: Development of Site 6 by GloGreen, LLC)
(Parties: GloGreen, LLC and City of Cudahy)
THIS SECOND AMENDMENT (“Second Amendment”) to the Exclusive Negotiating Agreement, (“Exclusive Negotiating Agreement”) is hereby entered into this 19th day of October, 2021 (the “Effective Date”) by and between the City of Cudahy, a municipal corporation (hereinafter, “CITY”) and GloGreen, LLC (hereinafter, “DEVELOPER”). For purposes of this Second Amendment, the capitalized term “Parties” shall be a collective reference to the CITY and DEVELOPER and the capitalized term “Party” shall refer to the CITY or DEVELOPER interchangeably, as appropriate.

RECITALS
This Second Amendment is made and entered into with respect to the following facts:

WHEREAS, on December 31, 2020, the Parties executed and entered into the agreement entitled “Exclusive Negotiating Agreement” (hereinafter, the “ENA”) approved by the City Council for the development of Parcel Site 6. The ENA is attached and incorporated hereto as Exhibit “A”; and
WHEREAS, the ENA original Term was one hundred and twenty (120) days which would have expired on April 29, 2021; and
WHEREAS, on or about April 20, 2021, prior to the 120 days, the Parties entered into the First Amendment to the ENA extending the Term through October 27, 2021. Although the Parties have diligently pursued the negotiation of the PSA additional time is necessary to complete the PSA; and
WHEREAS, Developer is seeking to correct a typographical error and change the name of the entity entering into the agreement with the City from GloGreen Global, LLC as provided for in the original ENA to “GloGreen, LLC”; and
WHEREAS, the Parties have been negotiating in good faith, and are now seeking to further amend the ENA under this Second Amendment to extend the negotiation and terms of the ENA so that it shall expire in 120 days (February 24, 2022), in order to preserve the rights and duties agreed on the original ENA; and

55733.00005\34440816.2
2 NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

1. Section 3(e) is hereby amended as follows: (Negotiation Period) of the Exclusive Negotiating Agreement is hereby amended to extend the Term of such Agreement for 120 days from previous First Amendment expiration date making the Term expire on February 24, 2022.

2. The name of the contracting entity is revised from GloGreen Global, LLC to new corrected Developer entity of “GloGreen, LLC”.

3. The provisions of this Second Amendment shall be deemed a part of the ENA and except as otherwise provided under this Amendment, the ENA and all provisions contained therein shall remain binding and enforceable. In the event of any conflict or inconsistency between the provisions of this Second Amendment and the provisions of the ENA, the provisions of this Second Amendment shall control, but only in so far as such provisions conflict with the ENA Agreement and no further.

IN WITNESS WHEREOF, the Parties hereto have caused this Second Amendment to be executed on the day and year first appearing above.
[SIGNATURES ON NEXT PAGE]
CITY:

City of Cudahy
By: ___________________________________
Alfonso Noyola
City Manager

APPROVED AS TO FORM
By:__________________________________
City Attorney

DEVELOPER
GloGreen, LLC
By: _____________________________
John Kadiya

55733.00005\34440816.2
3 EXHIBIT A

FIRST AMENDMENT AGREEMENT
AND

EXCLUSIVE NEGOTIATING AGREEMENT

55733.00005\34440816.2
4 EXHIBIT B

EXCLUSIVE NEGOTIATING AGREEMENT
Between
GloGreen, LLC and City of Cudahy

EXCLUSIVE NEGOTIATING AGREEMENT
Parties: City of Cudahy and GloGreen Global, LLC
Property: Long Range Property Management Plan Site 6
THIS EXCLUSIVE NEGOTIATING AGREEMENT (the "Agreement") is dated as of December 21, 2020 and is entered into by and between GloGreen Global, LLC and its permitted assigns (collectively the "Developer") and the City of Cudahy (the "City")." Developer and the City are collectively referred to herein as the "Parties." This Agreement is entered into in light of the facts set forth in the following recital paragraphs:

RECITALS
A. WHEREAS, Developer and its officers and members have recent and relevant experience developing and managing safe, decent and affordable rental and commercial marketrate housing in California; and B. WHEREAS, Developer has submitted a written proposal dated December 1, 2020 (the "Developer Proposal") to the City to acquire that certain real property ("Site 6") from the City, which is located approximately at: 7630, 7638, 7644, and 7660 South Atlantic Avenue, and 4613 Clara Street with the following Los Angeles County Assessor Parcel Numbers: 6226-022- 904, 6226-022-905, 6226-022-906, 6226-022-907, 6226-022-908, 6226-022-909, 6226-022-910, and 6226-022-911, and such real property is more specifically described in Exhibit "A," which is attached hereto.

C. WHEREAS, the Developer Proposal sets forth certain general terms on which the Developer is prepared to acquire Site 6 from the City and thereafter, use and improve Site 6 for a commercial mixed-use development. There will be a subterranean parking with 1st floor used as retail space. The 2nd and 3rd floor will consist of commercial space, while the 4 th floor and up
will be a combination of 80% affordable housing as well as 20% FMV amongst other amenities.

This development will be the first LEED Platinum development with net-zero technology, that takes into consideration the socioeconomic disparities and intends to mitigate and address these issues providing affordable housing, prioritizing local residents to preserve community entity and combat gentrification (the "Project") ; and
D. WHEREAS, the City of Cudahy in its capacity is entering into this Agreement with Developer for the negotiation of the sale and development of Site 6; and E. WHEREAS, the Consolidated Oversight Board for Los Angeles County (the "Oversight Board") authorized the transfer of title of Site 6 from the Successor Agency to the former Cudahy Community Development Commission (the "Successor Agency") to the City by quitclaim deed pursuant to Oversight Board Resolution No. OB-2020-04 dated November 9, 2020; and
F. WHEREAS, City Council authorized the acceptance of such transfer of Site 6 at its meeting of November 17, 2020 pursuant to the terms of the quitclaim deed, including, but not limited to its Section 5; and
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G. WHEREAS, The State Department of Finance (the "DOF") determined, by letter dated December 17, 2020, that the disposition of land contemplated in Oversight Board Resolution No. OB-2020-04 requires no action on the part of DOF given the land transfer's consistency with the Successor Agency's approved Long-Range Property Management Plan ("LRPMP"); and
H. WHEREAS, the sale of land is not governed by the Surplus Land Act (Gov. Code § 54220 et seq.) because the contemplated transaction is authorized by other statutes including but not limited to Government Code Sections 52201, 54222.3, 37350 et seq., 54220 et seq. and/or 50568 et seq.; and
I. WHEREAS, the Developer and the City desire to negotiate with each other regarding the potential terms and conditions of a future PSA between the Developer and the City for the Developer to acquire the fee interest of Site 6 from the City for mixed-use affordable housing community development purposes as generally consistent with the Developer Proposal.

NOW, THEREFORE, in view of the goals and objectives of the State of California and the City relating to the disposition of City-owned lands for the potential development of a mixed-use affordable housing development. This will be a commercial mixed-use development. There will be a subterranean parking with 1st floor used as retail space. The 2" and 3rd floor will consist of commercial space, while the 4th floor and up will be a combination of 80% affordable housing as well as 20% FMV amongst other amenities. This development will be the first LEED Platinum development with net-zero technology, and in consideration of the mutual promises of City and Developer set forth in this Agreement, the City and Developer agree as follows:

1. Effective Date and Negotiation of PSA.
(a) This Agreement shall take full force and effect and shall be deemed to be an " exclusive negotiating agreement" as this term is used in Government Code Section 54234(b)(1)(A) after it has first been approved by the City and signed by the Parties (the "Effective Date"). (b) Subject to the terms and conditions of this Agreement, during the Negotiation Period (defined in Section 3), Developer and the City shall proceed in good faith to undertake discussion, evaluations, negotiation and documentation of the potential terms of a PSA for Site 6 which is mutually satisfactory to the Parties. Such PSA shall, among other things, provide for the completion of the disposition of Site 6 by the City to Developer by a date not later than December 31, 2022, unless, prior to that date, this Agreement is terminated by either Party as provided in Section 3 or Section 15.2 or Section 16.2. During the Negotiation Period Developer and the City shall generally assist and cooperate with each other and supply such documents and information as may be reasonably requested by the other to facilitate the conduct of such negotiations. As the term is used in the preceding sentence and elsewhere in this Agreement, the words "assist and cooperate" when applied to the City mean and refer to the provision of information, reports or documents to Developer with respect to Site 6 which are already in the possession of the City or such new information, reports or documents relating to Site 6 and this Agreement which do not require the City to incur any third party cost or expense which may not be reimbursed to the City upon the proposed disposition of Site 6 to the Developer under the terms of a future PSA. During the Negotiation Period both Developer and the City shall exercise reasonable efforts to conduct and complete discussions relating to the preparation of terms and conditions of the PSA as may be mutually acceptable to the Developer and the City in the sole and absolute discretion reserved to each of them. The exact terms and conditions of the PSA, if any, shall be determined during the course of these negotiations. Nothing in this Agreement shall be interpreted or construed to be a representation or agreement by either the Developer or the City, that a mutually acceptable 2

PSA will be produced from negotiations under this Agreement either before or after the Effective Date. Nothing in this Agreement shall impose any obligation on either Party to agree to the approval and execution or be bound by a definitive PSA in the future. (c) Notwithstanding any provision of this Agreement to the contrary, the City Council of the City reserves the sole and absolute discretion to approve, disapprove or impose conditions on the final form of the PSA before any such PSA may take effect. (d) The close of escrow of such PSA by and between the Developer and City is subject to the City's approval of a compensation agreement, as required pursuant to Health and Safety Code Section 34180(f) and the LRPMP, with applicable taxing entities to provide payments to them in proportion to their shares of the base property tax ("Compensation Agreement") in its sole and absolute discretion as a condition precedent to the close of escrow of such PSA.

2. Developer Acknowledgments.
(a) This Agreement shall not be deemed to be an obligation of either Party to enter into a PSA for Site 6.
(b) Developer acknowledges and agrees that: (1) under this Agreement, the City does not commit itself or agree to enter into a PSA or undertake any other exchange, sale, lease or other transfer of Site 6 to Developer; (2) no provision of this Agreement shall be deemed to be an offer by the City, nor an acceptance by the City of any offer or proposal from Developer, for the City to convey any estate or interest in the Site 6 to Developer; (3) Developer has not acquired, nor shall the Developer acquire, by virtue of any term of this Agreement, any legal or equitable interest in real or personal property from the City; (4) further efforts by either Party to perform due diligence, arrange or obtain financing, or carry out other acts in contemplation of the possible acquisition, transfer of Site 6 or the development of Project shall not be deemed evidence of intent by either Party to be bound by any term, condition, covenant, restriction or agreement relating to acquisition, transfer or development of Site 6 or the Project. (c) The Developer further acknowledges and agrees that no provision of this Agreement shall be interpreted or construed to be a guaranty, warranty, representation or assurance by the City that any public agency or other entity shall give any discretionary approval or provide any development financial assistance with respect to the Project on such terms which may be acceptable to the Developer or otherwise.

3. Negotiation Period.
(a) The Negotiation Period shall begin on the date when both of the following events shall have occurred:

This Agreement has been approved by the City Council; and (ii) This Agreement has been fully executed by the Parties.

Once (i) and (ii) have occurred, the Negotiation Period shall begin and thereafter expire or be terminated as provided in the following subsections of this Section 3. 3

(b) Prior to the Effective Date, either Party may terminate this Agreement in its discretion for any reason upon thirty (30) days prior written notice to the other Party which references this Section 3(b), whereupon this Agreement shall terminate and neither Party shall have any further right or obligation to the other under this Agreement. (c) Prior to the Effective Date, the City shall not solicit or respond to any proposal from a third party to acquire Site 6 from the City unless the City has first given notice to Developer of termination of this Agreement under Section 3(b).
(d) After the Effective Date this Agreement may be terminated without cause or liability by either Party upon 15 days' notice written notice or as provided in Section 14 or Section 15 as applicable.
(e) If the rights and duties of the Parties which arise under this Agreement have not be expressly merged into a PSA within one hundred twenty (120) days of approval of this Agreement by the City Council, for any reason, then in such an event, this Agreement shall terminate without further notice whereupon neither Party shall have any further rights or obligations to the other under this Agreement except with respect to obligations which expressly survive termination of this Agreement.

4. Extension of Negotiation Period. The Negotiation Period may be extended by the written agreement of the Parties.

5. PSA General Provisions.

5.1 General Terms and Conditions. The Parties anticipate that the PSA shall include provisions addressing the following described subjects as generally set forth in the Developer Proposal:

5.1.1 Site 6 Acquisition and Ownership by the Developer Control. The specific terms on which Site 6 shall be acquired from the City by Developer or Developer's permitted assignee. The words "Developer's permitted assignee" shall refer to the provisions of the PSA as set forth at Section 5.1.5, below.

5.1.2 Disposition of Property. The disposition of Site 6 to the Developer under the PSA shall be completed not later than December 31, 2022.

5.1.3 Scope of Development. The Project shall include: 118 units of affordable housing community development units as per City of Cudahy permits, pursuant to recorded affordability conditions, covenants and restrictions reasonably acceptable to the City and each of the other Responsible Agencies, as applicable;

5.1.4 Developer Permitted Assignee. Pursuant to Section 14 and Section

19.5, City shall not unreasonably withhold approval of the assignments of the interests and rights under this Agreement to an affiliate of the Developer if requested by the Developer.

5.1.5 Other. Such other matters as the Developer and the City may mutually agree.

5.2 Developer Compliance with Laws with Respect to Project. Under the terms of the PSA, the Developer shall comply with the requirements of all applicable City ordinances, 4

resolutions and development entitlement approvals for the planning, design, construction and operation of the Project.

6. License to Enter Site 6. The City authorizes Developer, its contractors, agents and employees to enter Site 6 for the purpose of performing tests, surveys and inspections, and obtaining data necessary or appropriate to negotiate the PSA or perform investigations related to the Project; provided, however, Developer shall deliver prior written notice to the City of any such entry and written evidence of Developer's satisfaction of all insurance requirements of this Agreement prior to entering Site 6. In the case of invasive tests or sampling, the City may impose such insurance, indemnification, guaranty and other requirements as the City determines appropriate, in its reasonable discretion.

7. Costs and Expenses. All fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning or design activities, drawings, specifications or other activity or matter relating to Site 6 or the Project or negotiation or documentation of a future PSA that may be undertaken by Developer during the Negotiation Period regarding any matter relating to this Agreement, a future PSA for Site 6 or the Project, shall be the sole responsibility of and shall be undertaken at the sole cost and expense of Developer and no such activity or matter shall be deemed to be undertaken for the benefit of, at the expense of or in reliance upon the City except as may hereafter be set forth in the PSA.

Developer shall also pay all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the City or any other Responsible Agency of any and all applications and other documents and information to be submitted to the City or such other Responsible Agency by Developer either pursuant to this Agreement or otherwise associated with the Project or Site 6.

8. Deposit.
a) Concurrent with the Developer's execution of this Agreement, the Developer shall pay to the City a deposit in the amount of Twenty Five Thousand Dollars ($25,000) in immediately available funds ("Initial Deposit") to ensure that the Developer will proceed diligently and in good faith to fulfill its obligations under this Agreement during the Term, as part of the consideration for the City's agreement not to negotiate with other persons during the Negotiation Period, and to defray certain costs of the City in pursuing the contemplated negotiations with the Developer during the Term, pursuant to this Agreement including staff time, consultant fees and attorney fees associated with review and implementation of this Agreement or preparing the PSA all of which will be charged against the Initial Deposit. If at any the Initial Deposit falls below Five Thousand Dollars ($5000) Developer shall make an additional deposit of Ten Thousand Dollars ($10,000) if requested by the City. Any funds remaining in the Initial Deposit at the termination of this Agreement shall either be returned to the Developer or applied toward the purchase price of the Property at the Developer's discretion. The Initial Deposit shall be in addition to those fees and expenses required by the City of Developer for any permit, other required entitlement or Project processing.
(b) Upon each extension of the Term, if any, the Developer shall deposit an additional Ten Thousand Dollars ($10,000) in immediately available funds with the City on the first day of any extension of the Term (each, an "Extension Deposit"). Each Extension Deposit is intended to ensure that the Developer will proceed diligently and in good faith to fulfill its obligations under this Agreement during any extension of the Term, as part of the consideration for the City's agreement not to negotiate with other persons during any such extension of the 5

Negotiation Period, and to defray certain costs of the City in pursuing the contemplated negotiations with the Developer during any such extension of the Term, pursuant to this Agreement.

9. No City Approval. Nothing in this Agreement, nor any comments provided by the City or City staff, nor any failure of City staff to provide comments to any submittal by the Developer pursuant to this Agreement shall: (1) modify or replace any land use entitlement process of the City applicable to the Project, (2) limit the police power land use jurisdiction of the City as relates to Site 6 or the Project, (3) constitute an approval of all or any portion of the Project by the City pursuant to the police power land use jurisdiction of the City; or (4) constitute any approval of all or any portion of a future PSA by the City.

10. City Due Diligence. The City reserves the right to reasonably obtain further information, data and commitments to ascertain the ability and capacity of Developer to complete its acquisition of Site 6 from the City by a date not later than December 31, 2022. Developer acknowledges that it may be requested to make certain financial disclosures to the City, the City staff, legal counsel or other consultants, as part of the financial due diligence investigations of the City relating to the potential sale of Site 6 and development of the Project Site 6 by Developer and that any such disclosures by the Developer to the City, may become public records. The City shall maintain the confidentiality of financial information of Developer to the extent allowed by law, as determined by the City Attorney.

11. Developer Due Diligence. Subject to the assistance and cooperation of the City, during the Negotiation Period, Developer reserves the right to request and reasonably obtain all necessary and non-privileged information and data as relates to Site 6 from the City as the Developer may deem to be appropriate.

12. Developer Indemnity. Developer shall indemnify, defend and hold harmless the City and the elected and appointed officials, officers, agents and employees of the Successor Agency, and the County Oversight Board (individually or collectively, an ("Indemnified Party") against any and all losses arising out of any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, arising through activities of the Developer with respect to Site 6, or Developer's contractors or employees which may also be brought or asserted against any Indemnified Party that relates to or arises out of: (i) property damage or bodily injury or death of any person in connection with this Agreement; (ii) entry upon Site 6 by Developer, its contractors or employees; (iii) any other inspection of Site 6 by Developer, its contractors or employees; (iv) any violation of applicable law including but not limited to the Surplus Land Act (Gov. Code §, 54220 et. seq) in connection with project contemplated under this Agreement or (v) the preparation of any report or plan commissioned by Developer. No Indemnified Party shall be entitled to indemnification under this Section 12 (i), (ii), (iii) and (v) arising from a matter caused by such Indemnified Party's gross negligence or willful misconduct. In the event any action or proceeding is brought against an Indemnified Party by reason of a claim arising out of any loss for which Developer is obligated to indemnify, defend or hold harmless the Indemnified Party, and upon written notice from such Indemnified Party, Developer shall, at Developer's sole expense, answer and otherwise defend such action or proceeding. The provisions of this Section 12 shall survive the expiration or termination of this Agreement.

13. Developer Insurance. Without in any way limiting Developer's indemnification obligations under this Agreement, subject to the other provisions of this Section 12 and subject to approval by the City of the insurers and policy forms, Developer shall obtain and maintain throughout the Negotiation Period at Developer's expense. 6

14. Restrictions Against Change in Ownership, Management or Control of Developer; Assignment of Agreement During the Negotiation Period. The City and Developer acknowledge and agree that the City is entering into this Agreement with Developer on the basis of the particular experience, financial capacity, skills and capabilities of Developer. This Agreement is personal to Developer and is not assignable without the prior written consent of the City, which may be given, withheld or conditioned in City's sole and absolute discretion; provided however that the PSA may contain provisions reasonably satisfactory to the City which permit assignment of the Developer interest in the PSA to an affiliate of Developer prior to the completion of the disposition of Site 6 pursuant to the PSA. For the purposes of this Agreement, the term "affiliate" means any person or entity, directly or indirectly, controlling or controlled by or under common control with Developer, whether by direct or indirect ownership of equity interests, by contract, or otherwise.

15. Developer Events of Default and City Remedies.

15.1 Developer Events of Default. The occurrence of any of the following shall constitute an "Event of Default" on the part of Developer under this Agreement:

15.1.1 Schedule of Performance. Failure of Developer to meet a performance milestone by the applicable date contained in the Schedule of Performance of this Agreement, if such failure is not cured within ten (10) days after written notice from the City of such failure.

15.1.2 Misrepresentation. Any material breach of any representation or warranty made by Developer in this Agreement that is not cured within ten (10) days after written notice from the City to Developer of such breach.

15.1.3 Unauthorized Assignment. Any assignment or attempted assignment by Developer in violation of Section 14 that is not cured within ten (10) days after written notice from the City to Developer of such breach.

15.1.4 Insurance. Failure of Developer to procure or maintain any of the insurance coverage required by this Agreement resulting in a lapse in required insurance coverage which lapse is not cured within ten (10) days after written notice from the City to Developer of such breach.

15.1.5 Other Developer Defaults. Failure by the Developer to comply with any other provision of this Agreement that is not cured within fifteen (15) days after written notice from the City to the Developer of such breach.

15.2 City Remedies. If there is an Event of a Default by Developer, the City may, in the sole and absolute discretion of the City, terminate this Agreement by delivering written notice of termination to Developer which references this Section 15.2 of this Agreement. Upon any such termination, neither Party shall have any further rights or obligations to the other under this Agreement, except obligations that expressly survive termination of this Agreement. The City hereby waives any remedy of specific performance following an Event of Default by Developer arising under this Agreement. The sole and exclusive remedy for the occurrence of an Event of Default by Developer shall be the termination of this Agreement. In the event such termination neither Party shall have any further right or obligation under this Agreement except as to the Developers indemnity obligations which may arise under Section 12. 7

16. City Events of Default and Developer Remedies

16.1 City Events of Default. The occurrence of any of the following shall constitute an "Event of Default" on the part of the City under this Agreement.

16.1.1 Negotiation of Disposition of Site 6 With Other Parties. The City will be in breach of this Agreement if it begins to engage in land disposition negotiations concerning Site 6 with any party other than Developer before the termination of this Agreement and such breach is not corrected by the City within ten (10) days after written notice from the Developer of such breach.

16.1.2 Other City Default. Failure by the City to comply with any other provision of this Agreement which is not corrected within fifteen (15) days after written notice from Developer to the City of such breach.

16.2 Developer's Remedies. If there is an Event of a Default by the City, Developer may, in the sole and absolute discretion of Developer terminate this Agreement by delivering written notice of termination to City which references this Section 16.2 of this Agreement.

Developer hereby waives any remedy of specific performance following an Event of Default by the City. Upon any such termination, neither Party shall have any further rights or obligations to the other under this Agreement, except obligations that expressly survive termination of this Agreement. The sole and exclusive remedy for the occurrence of an Event of Default by the City shall be the termination of this Agreement. In the event of such termination neither Party shall have any further right or obligation under this Agreement except as to the Developer's indemnity obligations which may arise under Section 12. Notwithstanding the foregoing, the Developer's recovery of damages against the City under this Agreement shall be limited to recovering any amounts actually expended by the Developer in reasonable reliance on this Agreement not to exceed the amount of TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000.00), if City's default and failure to cure such default occurs prior to the approval of the Compensation Agreement by all necessary parties to the Compensation Agreement, including the City. This limit on damages shall not apply if City's default occurs after the Compensation Agreement is approved by all necessary parties. The Buyer acknowledges the protections of Civil Code Section 1542 relative to the waivers and releases contained in this Agreement which Civil Code Section reads as follows:
"A general release does not extend to claims that 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 with the debtor or released party."
By initialing below Developer waives the provisions of Section 1542 in connection with the waivers and releases in this Paragraph.

Developer's initials
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17. Developer Representations and Warranties. Developer represents, warrants and covenants to and for the benefit of the City and the Oversight Board that, as of the Effective Date and at all times during the Negotiation Period, as follows:

17.1 Valid Existence; Good Standing; Joint Venture Relationships. Developer is a nonprofit public benefit corporation duly organized and validly existing under the laws of the State of California. Developer has all requisite power and authority to acquire Site 6 from the City and conduct its business as presently conducted. Developer has made all filings and are in good standing in the jurisdiction of the State of California.

17.2 Authority. Developer has all requisite power and authority to enter into and perform this Agreement.

17.3 No Limitation on Ability to Perform. Neither Developer's articles of incorporation nor any other organizational document regarding Developer in any way prohibits, limits or otherwise affects the right or power of Developer to enter into or perform this Agreement.

Developer is not a party to or bound by any contract, agreement, indenture, trust agreement, note, obligation or other instrument that could prohibit, limit or otherwise affect Developer's entry into or performance of this Agreement. To the best of Developer's knowledge, no consent, authorization or approval of, or other action by, and no notice to or filing with, any governmental authority, regulatory body or any other person or entity is required for the due execution, delivery or performance by Developer of this Agreement or any of the terms or covenants contained in this Agreement. There is no pending or threatened suit or proceeding or undischarged judgment affecting Developer before any court, governmental agency, or arbitrator that might materially adversely affect the enforceability of this Agreement, the ability of Developer to perform the transactions contemplated by this Agreement or the business, operations, assets or condition of Developer.

17.4 Valid Execution. The execution and delivery of this Agreement by Developer has been duly and validly authorized by all necessary action of Developer and others.

This Agreement will be a legal, valid and binding obligation of Developer, enforceable against Developer in accordance with its terms.

18. Notices. A notice or communication under this Agreement by either Party to the other shall be sufficiently given or delivered, if in writing and personally delivered to the other Party or delivered to the other Party by messenger, overnight commercial business mail or if delivered by email and confirmed by the delivery of U.S. First Class Mail with return receipt requested to the appropriate Party at its address as follows:

In the case of a notice or communication to the City:

City of Cudahy
5220 Santa Ana Street
Cudahy, CA 90201
Email: hgarcia cityofcudahyca.gov
With a copy to:

Olivarez Madruga Lemieux O'Neill, LLP
500 S Grand Ave., 12th floor
Los Angeles, CA 90071
9

And in the case of a notice or communication sent to Developer:

GloGreen Global, LLC / The Blue Hauz, LLC
0/0: John Kadiya
5211 Pacific Concourse Dr.

Los Anqeles, CA 90045
Email: John.kadiya qloqreen.orq
Any mailing address may be changed at any time by giving written notice of such change in the manner provided above at least ten (10) days prior to the effective date of the change. All notices under this Agreement shall be deemed given, received, made or communicated on the date personal receipt actually occurs or, if such notice is given by email and confirmed by U.S. First Class Mail, on the date when the confirming mailed notice is deposited by the Party giving such email notice into U.S. First Class Mail.

19. General Provisions.

19.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both City and Developer.

19.2 Severability. If any provision of this Agreement, or its application to any person or circumstance, is held invalid by any court, the invalidity or inapplicability of such provision shall not affect any other provision of this Agreement or the application of such provision to any other person or circumstance, and the remaining portions of this Agreement shall continue in full force and effect, unless enforcement of this Agreement as so modified by and in response to such invalidation would be unreasonable or grossly inequitable under all of the circumstances or would frustrate the fundamental purposes of this Agreement. Without limiting the foregoing, in the event that any applicable federal or state law prevents or precludes compliance with any material term of this Agreement, the Parties shall promptly modify, amend or suspend this Agreement, or any portion of this Agreement, to the extent necessary to comply with such provisions in a manner which preserves to the greatest extent possible the benefits to each of the Parties to this Agreement. However, if such amendment, modification or suspension would deprive the Developer or the City of the substantial benefits derived from this Agreement or make performance unreasonably difficult or expensive, then the affected Party may terminate this Agreement upon fifteen (15) days written notice to the other Party. In the event of such termination, neither Party shall have any further right or obligation under this Agreement except as otherwise provided herein.

19.3 Non-Waiver. No waiver made by either Party with respect to the performance, or manner or time of performance, or any obligation of the other Party or any condition to its own obligation under this Agreement will be considered a waiver with respect to the particular obligation of the other Party or condition to its own obligation beyond those expressly waived, to the extent of such waiver, or a waiver in any respect in regard to any other rights of the Party making the waiver or any other obligations of the other Party.

19.4 Non-Liability. No member, official, agent or employee of the City or the Oversight Board will be personally liable to Developer, or any successor in interest (if and to the extent permitted under this Agreement), in an Event of Default by the City. No director, officer, agent or employee of Developer will be personally liable to the City in an Event of Default by Developer.
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19.5 Successors and Assigns; Third Party Beneficiary. This Agreement shall inure to the benefit of and bind the respective successors and assigns of the City and the Developer, subject to the limitations on assignment by Developer set forth in Section 14. This Agreement is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any other person and shall not be deemed to have conferred any rights, express or implied, upon any other person except as the indemnity obligation of the Developer to the Indemnified Parties as set forth in Section 12.

19.6 Governing Law. The City and Developer acknowledge and agree that this Agreement was negotiated, entered into and is to be fully performed in the City of Cudahy, California. The City and the Developer agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the substantive and procedural laws of the State of California, without application of conflicts or choice of laws principles.

19.7 Entire Agreement. This Agreement (including the attachments and exhibits) contains all of the representations of and the entire agreement between the Parties with respect to the subject matter of this Agreement. Any prior correspondence, memoranda, agreements, warranties or representations relating to such subject matter are superseded in total by this Agreement. No prior drafts of this Agreement or changes from those drafts to the signed version of this Agreement shall be introduced as evidence in any litigation or other dispute resolution proceeding by either Party or any other person and no court or other body shall consider those drafts in interpreting this Agreement.

19.8 Time of the Essence. Time is of the essence with respect to each provision of this Agreement.

19.9 Counterparts. This Agreement may be signed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

19.10 Approvals and Consents. (a) Excluding amendments to this Agreement which shall require the separate approval of the governing bodies of each Party, unless this Agreement otherwise expressly provides or unless applicable law requires otherwise, all approvals, consents or determinations to be made by or on behalf of the City during the Negotiation Period under this Agreement shall be made by the Interim City Manager, Henry Garcia (Hgarcia cityofcudahyca.gov), and Salvador Lopez, Economic Development Director (SLopez(a,cityofcudahyca.gov). The Interim City Manager and Economic Development Director may refer such requested consent or determination to the City Council for approval by the City of any such matters. In the case of the Developer all approvals, consents or determinations to be made by or on behalf of the Developer during the Negotiation Period shall be made by John Kadiya ([email protected]) ("Developer Representative") or such other employee or agent of Developer as Developer may designate by written notice to the City to act as Developer Representative for a particular matter. Unless otherwise provided in this Agreement, whenever approval, consent or satisfaction is required of a Party pursuant to this Agreement, it shall not be unreasonably withheld, conditioned or delayed and any reasons for disapproval shall be stated in reasonable detail in writing. Such approval by Developer or City of any act or request by the other shall not be deemed to waive or render unnecessary approval of any similar or subsequent acts or requests.

19.11 Relationship of the Parties. (a) No real estate broker commission or other real property finder's fee shall be payable by either Party to any person in connection with the 11

approval of this Agreement by the City. Each Party shall have a duty to indemnity defend and hold the other Party harmless from any claim.
(b) The subject of this Agreement is a matter which is solely between Developer and the City as relates to Site 6. No Responsible Agency is a party to this Agreement. None of the provisions in this Agreement shall be deemed to render City a partner in Developer's business, or joint venturer or member in any joint enterprise with Developer.

19.12 Survival of Indemnity Obligations. Notwithstanding anything to the contrary in this Agreement, each indemnity obligation under this Agreement shall survive expiration or termination of this Agreement.

19.13 Non-Discrimination. Developer covenants by and for itself and its successors or assigns, and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the following conditions:
(a) there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (I) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of Site 6; and (2) Developer for itself and any Permitted Assignee shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, subtenants, sublessees, or vendees in Site 6. (remainder of page intentionally left blank]
12

Signature Page
TO

EXCLUSIVE NEGOTIATING AGREEMENT
IN WITNESS WHEREOF, Developer and the City have signed and entered into this Agreement by and through the signatures of their respective authorized representative(s), as follow:

CITY OF CUDAHY,
a public body, corporate an
By:
c
Date: U_/ 3k /2.0 2o
Approved as to form:

By:

Victor M. Ponto
Date:

DEVELOPER
GloGreen Global, LLC
By: e/1-4;-/te: /
Its: President / CEO
Date: December 29, 2020
13 December 31, 2020

EXHIBIT "A"
TO

EXCLUSIVE NEGOTIATING AGREEMENT
Legal Description of Site 6
[Attached behind this cover page]
14

LEGAL DESCRIPTION
All that certain real property situated in the County of Los Angeles, State of California, described as follows:

Parcel 1:

Those portions of Lots 102, 103 and 104 of Tract No. 180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13, Page 198 of Maps, in the Office of the County Recorder of said County, included within the following described boundary lines:

Beginning at a point in the Easterly line of said Lot 102, distant South 7° 08' West thereon 146.25 feet from the Northeasterly corner of Lot 102; thence North 82° 52' West 324.76 feet, more or less, to a point in the Easterly line of Wright Road, 50 feet wide (now part of Atlantic Avenue) as shown on said map; thence South 11° 52' East along said road, 51.83 feet to a point distant South 11° 52' East 206 feet from the Northwesterly corner of Lot 103 of said Tract No. 180; thence South 82° 52' East 308.06 feet, more or less to the Easterly boundary line of said Lot 102; thence North 7° 08' East along said Easterly line of Lot 102, a distance of 48.53 feet to the point of beginning.

Parcel 2:

That portion of Lots 102 and 103 of Tract No. 180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13, Page 198, of Maps, in the Office of the County Recorder of said County, included within the following described boundary lines:

Beginning at a point in the Easterly line of said Lot 102, distant thereon South 7° 03' 00" West, 146.25 feet from the Northeasterly corner of Lot 102; thence along said Easterly line North 7° 08' 00" East 48.75 feet; thence North 82° 52' 00" West, 341.56 feet to a point in the Easterly line of Wright Road, 50 feet wide, (now part of Atlantic Avenue), distant South 11° 52' 00" East, along said road, 103 feet from the Northwesterly corner of said Lot 103; thence along said road, South 11° 52' 00" East, 51.67 feet, more or less, to a line that bears North 82° 52' 00" West, 324.76 feet, more or less from the point of beginning; thence South 32° 52' 00" East 324.76 feet, more or less, to a point of beginning.

Parcel 3:

Those portions of Lots 102 and 104 of Tract No. 180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13, Page 198 of Maps, in the Office of the County Recorder of said County, described as follows:

Beginning at a point in the Easterly line of said Lot 102 distant thereon North 07° 08' East 97.5 feet from the Southeasterly corner thereof, said point of beginning, being also the Northeasterly corner of the land conveyed to Grace Millar by deed recorded in Book 6732, Page 308 of Deeds, recorded in the office of the County Recorder of said County; thence North 82° 52' West, along the Northerly line of said land so conveyed to Grace Millar, 74.43 feet; thence North 07° 08' East 48 feet; thence North 82° 52' West 216.53 feet to the Westerly line of said Lot 104; thence North 110 52' West along the Westerly line of said Lot 104,

52.23 feet, more or less, to the Southwesterly corner of the land conveyed to F. H. Maxwell and wife by deed recorded in Book 6310, Page 186, of Deeds; thence South 82° 52' East along the Southerly line of said land so conveyed to F. H. Maxwell and wife, 308 feet, more or less, to the Easterly line of said Lot 102; thence South 07° 08' West, along the Easterly line of said Lot 102, 97.50 feet more or less, to the point of beginning.

Parcel 4:
15

Those portions of Lots 102 and 104 of Tract No. 180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13, Page 198 of Maps, Records of Los Angeles County, described as follows:

Beginning at the Southwesterly corner of the land conveyed to James J. Burge by deed recorded in Book 2732, Page 358, of Official Records of said County, said point of beginning being North 11° 52' West along the Westerly line of said Lot 104, 103.47 feet, more or less, from the Southwesterly corner of said Lot; thence South 82° 52' East along the Southerly line of land so conveyed to Burge 200 feet; thence North 7° 08' East parallel with the Westerly line of said Lot 102, 48 feet; thence North 82° 52' West 216.53 feet, more or less, to a point in the Westerly line of said Lot 104; thence South 11° 52' East along the Westerly line 50.77 feet, more or less, to the point of beginning.

Parcel 5:

The South 97.5 feet of Lot 102, Tract No. 180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13, Page 198, of Maps, in the Office of the County Recorder of said County.

Except the East 52.50 feet thereof.

Parcel 6:

That portion of Lot 104 of Tract No. 180, in the City of Cudahy, County of Los Angeles, State of California, as per map recorded in Book 13, Page 198, of Maps, in the Office of the County Recorder of said County, described as follows:

Beginning at the Southwesterly corner of said Lot; thence along the Southerly line of said Lot, South 82° 52' East 135.84 feet to the Southeasterly corner of said Lot; thence along the Easterly line of said Lot, North 7° 08' East 97.50 feet; thence parallel with the Southerly line of said Lot, North 82° 52' West 169.41 feet, more or less, to the Westerly line of said Lot; thence along said Westerly line South 11° 52', East 103.12 feet, more or less, to the point of beginning.

Except therefrom the oil, gas and other minerals in and under said property, together with the exclusive right to use such portion of said property lying more than 500 feet under the surface for the extraction of oil, gas and minerals from said property or property in the vicinity thereof, however, with no rights of surface entry whatsoever, as contained in the deed executed by Mobil Oil Corporation, a Corporation, formerly Socony Mobil Oil Company, Inc., successor by merger to General Petroleum Corporation, a Corporation, formerly General Petroleum Company of California, a Corporation, organized under the laws of the State of New York, recorded May 21, 1971, as Instrument No. 321, Official Records.

Assessor's Parcel Number: 6226-022-904, 6226-022-905, 6226-022-906, 6226-022-907, 6226-022-908, 6226-022-909, 6226-022-910 & 6226-022-911 16

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“Serving The People” "Sirviendo A La Comunidad"
Staff Report
02/15/2022 Page 1 of 6

STAFF REPORT
Date: February 15, 2022
To: Honorable Mayor / Chair and City Council / Agency Members From: Alfonso Noyola City Manager/Executive Director
By: Joshua Calhoun, Finance Director
Subject: Midyear Budget Review of City of Cudahy’s Fiscal Year 2021-2022

RECOMMENDATION
The City Council is requested to receive and file the Fiscal Year (FY) 2021-2022 Mid-Year Budget review and related reports.

BACKGROUND
On June 15, 2021, the City Council passed Resolution 21-16 adopting the Fiscal Year 2021-2022 City Budget.

ANALYSIS
The primary purpose of the FY 2021-2022 Mid-Year Budget review process is to provide the City Council with an opportunity to review and adjust the original revenue projections and budgeted appropriations based on six months of activity. The proposed budget adjustments are a result of changes in revenues projections based on revenues received between July 1, 2021 and December 31, 2021, as well as adjustments in expenditures due to better information that was not previously available at the time the City Budget was adopted.

It is through staff’s significant diligence to ensure responsible spending that allows for operating expenditures not to increase. Although some of our revenue estimates have not done as well as anticipated, namely development agreements, parking permits, swap meet permits, and rentals (fields and facilities).

Other revenues have met budget or are on track to exceed budgeted estimates, these are:

Item Number
16B

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Staff Report
02/15/2022 Page 2 of 6
Motor Vehicle In-Lieu; Sales Tax; building permits; and planning services. The City continues to monitor revenues monthly and to strictly control expenditures. Details of revenues and expenditures are provided below in seven sections.

1. FUND BALANCE ANALYSIS
The unaudited General Fund - Fund Balance on June 30, 2021 was $2,449,097. Based upon the current revenues of $4,011,552 and expenditures of $4,884,472 through December 31, 2021, the projected Unaudited Fund Balance on December 31, 2021 was $1,850,318.

Per Resolution No. 16-33 adopted on October 24, 2016, the City commits to maintaining the reserves of General Fund annual operating expenditures at an amount of no less than $900,000. It is estimated that on December 31, 2021, the General Fund - Fund Balance was above the reserve requirement of Resolution 16-33.

It is projected that the ending General Fund - Fund Balance on June 30, 2022, will be $2,830,737 which is $1,930,737 above the $900,000 requirement.

2. FY 2021-2022 GENERAL FUND REVENUES
Staff completed a revenue analysis for the FY 2021-2022 General Fund revenues. Although some revenues are in line with our budget projections, there are other revenue estimates that require adjustments. The table below summarizes the City’s significant General Fund revenues and provides an overview of the recommended changes based on Mid-Year Budget review by City staff.

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
02/15/2022 Page 3 of 6
Revenue Source
2021-22
Amended
Budget
2021-22
Revised
Projection
Increase
(Decrease)
Percent
Change
Taxes $ 3,137,820 $ 3,608,099 $ 470,279 15%
Franchise Fees 225,000 281,848 56,848 25%
Intergovernmental Revenues 3,210,998 3,350,752 139,754 4% Fines & Forfeitures 86,500 213,904 127,404 147%
Building & Safety 373,000 328,670 (44,330) -12%
Use of Money / Property 132,500 74,959 (57,541) -43%
Charges for Services -
Planning/Engineering
239,000 521,158 282,158 118%
Charges for Services -
Miscellaneous
30,000 24,791 (5,209) -17%
Licenses & Permits 2,219,000 1,607,385 (611,615) -28%
Other 192,500 184,097 (8,403) -4%
$ 9,846,318 $ 10,195,662 $ 349,344 4%
The total General Fund revenue projection is a net increase of $485,470. The following are the details of the revenue changes depicted on the chart above.

A. Taxes: Sales Tax projections have surpassed budgeted amounts. This actual sales tax collected has been ahead of originally estimated.

B. Intergovernmental Revenues: Motor Vehicle In-Lieu fee (VLF) was established in 1935 as a uniform statewide tax, the VLF is a tax on the ownership of a registered vehicle in place of taxing vehicles as personal property. By law, all revenues from the VLF fund city and county services, but the state legislature controls the tax rate and the allocation among local government. In the 2004 budget agreement, the Legislature permanently reduced the VLF tax rate and eliminated State General Fund backfill to cities and counties. Instead, cities and counties now receive additional transfers of property tax revenues as VLF. The budgeted VLF for FY 2021-22 is $3,210,998. Based on the first allocation received in January 2022,
C. Fines & Forfeitures: Court Fines are revenues collected from citations written from both the Los Angeles County Sheriffs and authorized City staff. The timing for the payment of those citations is dependent upon the recipients acknowledging the citation and making payment. People often choose to wait until they renew their driver’s license or vehicle registration before they realize they are required to get up to date with outstanding citations.

D. Building & Safety: Accordingly, the revenues for building and planning services were budgeted for the increased building activity.

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Staff Report
02/15/2022 Page 4 of 6
E. Use of Money / Property: Fees are collected for the use of City facilities including the fields at the various parks. City facilities are currently closed to the public. Based upon the estimated decrease in activity,
F. Charges for services – Planning/Engineering: Since the adoption of the General Plan, there has been an increase in developers seeking to have projects in the City of Cudahy.

Accordingly, the revenues for building and planning services were budgeted for the increased building activity.

G. Charges for services – Miscellaneous: Revenues are collected for permits for vendors to participate in the weekly swap meet, membership at the City’s fitness center, and adult recreation classes, based on estimated decrease in activity.

H. Licenses & Permits: The Fiscal Year (FY) 2021-2022 City Budget estimated that the monthly [non] Operating Fees from Urban Farming Operating Fees would be $1,400,000, Community Benefit Program Fee of $400,000, for a total of $1,800,000. Revenues from these two sources have been just under $800,000 for the first six months of the fiscal year. This is the approximately $600K shortfall in this revenue source.

I. Other: Revenues not falling into other categories are grouped into the other category.

3. FY 2021-22 GENERAL FUND EXPENDITURES
The FY 2021-2022 City Budget has a total General Fund operating expenditure of $9,942,050.

The table below summarizes staff’s forecasted departmental expenditure summaries Expenditure Source
2021-22
Amended
Budget
2021-22
Revised
Projection
Increase
(Decrease)
Percent
Change
City Council $ 115,537 $ 108,728 $ (6,809) -6%
City Attorney 450,000 437,455 (12,545) -3%
City Manager 1,165,348 1,101,454 (63,894) -5%
City Clerk 199,843 198,934 (909) 0%
Finance 794,440 774,306 (20,134) -3%
Community Development 1,028,834 976,661 (52,173) -5%
Parks and Recreation 1,031,298 968,995 (62,303) -6%
Facility Operations 1,151,328 1,156,105 4,777 0%
Public Safety 4,206,863 4,219,413 12,550 0%
$ 10,143,491 $ 9,942,050 $ (201,441) -2%

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Staff Report
02/15/2022 Page 5 of 6
The net decrease in costs were offset by a reduction/savings in existing budgeted items and the reallocation of existing budgeted items. The total General Fund change in estimated expenditures is $201,441.

The following is a description of the departments and the FY 2021-22 forecasts:
• The City Attorney’s Office provides monthly services and special projects services to the City including services for the exploration of future revenues to the City. The City Council set the budget of the City Attorney at $450,000. The FY 2021/22 expenditures in this department are forecast to finish at $437,455.
• The City Manager Department is anticipated to decrease by $63,894 under budget. The decrease in the City Manager Department is primarily the result of the Human Resources Director vacancy.
• The City Clerk Office had an anticipated decrease of $909. Costs are associated with advertisement in local newspaper publication is expected. Items being published relate to building, planning, and prospective City Ordinances.
• The Finance Department is anticipated to have a decrease of primarily due to the vacancy of the Finance Director position.
• The Community Development Department had an anticipated decrease of $52,173. This is primarily due to cost savings in planning and engineering expenditures. • The Parks and Recreation Department has an anticipated decrease of $62,303. This is primarily due to the impact of Covid-19. Widespread health and economic issues resulting from the ongoing COVID pandemic certain expenses have been incurred relating to park closures (Fence Rental and Signs) , with an equal amount being budgeted in revenue reimbursement. Also, certain in-person special events, senior trips/activities, and internships are not occurring.
• Facility Operations department accounts for costs associated with the buildings and structures used in City operations as well as costs that is not attributable to specific departments. This would include non-physical items that are shared among all departments such as liability & workers compensation insurance, copiers, air conditioning repairs, electricity, gas, water, telephone, postage, office/cleaning supplies, and City memberships. Due to COVID, cleaning supply and personal protection equipment costs have been incurred above what had been approved in the FY 2021-22 budget. An increase of $4,777 is anticipated.
• Public Safety costs in the Code Enforcement Department have an anticipated increase of $12,550. Community Preservation Officer(s) were needed to perform duties other than those budgeted which are not reimbursable under Community Development Block Grant

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Staff Report
02/15/2022 Page 6 of 6
guidelines. The County of Los Angeles Sheriff Department had proposed to provide Police Services to the City of Cudahy at a cost of $4,328,857. Based upon negotiations of the Police Services sub-committee and the Sheriff’s Office, the revised proposal for services.

CONCLUSION
Until such time as the City identifies recurring revenue streams the City is implementing best practices of Mid-Year Budget review, leveraging resources, and realistically estimating a spending plan for the remainder of the fiscal year. Revenues critical to the ongoing operations of the City include those relating to Development Agreements, Developer Impact Fees, User Fees (Building, Planning, and Recreation) as well as an approved cost allocation plan will allow the City to operate and cover costs of a City, that per its General Plan will be expanding in Businesses and Residential projects.

The City is being fiscally prudent by minimizing the use of General Fund balance as part of midyear review by reallocating resources. The estimated fund balance on June 30, 2021 was $2,449,097. The fund balance at December 31, 2021 was $1,576,177 and based upon the realization of budgeted revenues and expenditures the estimated General Fund balance is anticipated to be $2,702,709 on June 30, 2022.

FINANCIAL IMPACT
Staff anticipates above budget and expenditures being below budget at the end of the fiscal year.

The proposed resolution would increase certain revenues by $605,000 and

ATTACHMENTS
• Attachment A – Revenue Summary
• Attachment B – Expenditure Summary
• Attachment C – Fund Balance Analysis

ATTACHMENT A
Revenue Source
2021-22
Amended
Budget
2021-22
Revised
Projection
Increase
(Decrease)
Percent
Change
Explanation
Taxes 3,137,820$ 3,608,099$ 470,279$ 15%
Franchise Fees 225,000 281,848 56,848 25%
Intergovernmental Revenues 3,210,998 3,350,752 139,754 4% Fines & Forfeitures 86,500 213,904 127,404 147% HR Director vacancy Building & Safety 373,000 328,670 (44,330) -12%
Use of Money / Property 132,500 74,959 (57,541) -43% Finance Director vacancy Charges for Services -
Planning/Engineering
239,000 521,158 282,158 118% Building/Planning/Engineering costs Charges for Services -
Miscellaneous
30,000 24,791 (5,209) -17% Programs reduced due to Covid Licenses & Permits 2,219,000 1,607,385 (611,615) -28%
Other 192,500 184,097 (8,403) -4% LA County Sheriff
9,846,318$ $ 10,195,662 349,344$ 4%
City of Cudahy
FY 2021-2022 Mid Year General Fund City Manager adjustments Attachment A Page 369 of 371

ATTACHMENT B
Expenditure Source
2021-22
Amended
Budget
2021-22
Revised
Projection
Increase
(Decrease)
Percent
Change
City Council $ 115,537 108,728$ (6,809)$ 94%
City Attorney 450,000 437,455 (12,545) 97%
City Manager 1,165,348 1,101,454 (63,894) 95%
City Clerk 199,843 198,934 (909) 100%
Finance 794,440 774,306 (20,134) 71%
Community Development 1,028,834 976,661 (52,173) 95%
Parks and Recreation 1,031,298 968,995 (62,303) 94%
Facility Operations 1,151,328 1,156,105 4,777 100%
Public Safety 4,206,863 4,219,413 12,550 100%
$ 10,143,491 9,942,050$ (201,441)$ 95%

CITY OF CUDAHY
Expenditure Summary Report
Attachment B Page 370 of 371

ATTACHMENT C

GENERAL FUND
Fund Balance at 06/30/21 2,449,097
Revenues through 12/31/21 4,011,552
Expenditures through 12/31/21 (4,884,472) (872,920)
Fund Balance at 12/31/21 1,576,177
Reserve 900,000
Excess Fund Balance at 12/31/21 676,177
Fund Balance at 06/30/21 2,449,097
Projected Revenues 10,195,662
Projected Expenditures 9,942,050 253,612
Projected Fund Balance 2,702,709
Reserve 900,000
Excess Fund Balance at 06/30/22 1,802,709

CITY OF CUDAHY
FY 2021-22 Fund Balance Analysis
Attachment C Page 371 of 371