Fountain Valley City Council
October 20, 2026

Agenda
City Council / Successor Agency to
the Fountain Valley Agency for
Community Development / Fountain
Valley Housing Authority
Closed Session 4:15 PM
Study Session 5:00 PM
Regular Meeting 6:00 PM
Tuesday, October 20, 2026
Council Chambers
10200 Slater Avenue
Fountain Valley, CA 92708
http://www.fountainvalley.org
MEETING ASSISTANCE: In compliance with the Americans with Disabilities Act, anyone needing special assistance to participate in a meeting of the government bodies listed herein should contact the City Clerk’s Office at (714) 593-4445. Notification 72 hours prior to the meeting allows the City to make reasonable arrangements to ensure accessibility to the meeting.

AGENDA COMMUNICATIONS: All revised or additional documents and writings related to an item on this agenda provided to all or a majority of the government body members after distribution of the agenda packet, are available for public inspection (1) in the City Clerk’s Office at 10200 Slater Avenue, Fountain Valley, CA 92708 during normal business hours; and (2) in the Council Chambers at the time of the meeting. Unless directed otherwise by a government body listed herein all actions shall be based on/memorialized by the latest document submitted as a late communication.

PUBLIC COMMENTS/PUBLIC HEARINGS: Persons wishing to address the City Council or other government body listed complete a speaker card and give it to the City Clerk prior to the public comment period. Requests to speak will not be accepted after the public comment session begins without permission of the Mayor/Chair. Speakers must limit remarks to a total of 3 minutes and address the City Council through the Mayor.

Comments to individuals or staff are not permitted. Scheduled Matters, including Public Hearings: Indicate on the card what item you want to address. Unscheduled Matters:

Indicate on the card what subject matter you want to address. Comments must be related to issues that are within the jurisdiction of the governing body listed on the agenda.

Pursuant to the Brown Act, the governing body may not enter into discussion regarding items not on the agenda.

CONSENT CALENDAR: All matters listed under the Consent Calendar are considered by the governing bodies listed herein to be routine and will be enacted on simultaneously with one motion without discussion unless separate action and/or discussion is requested by a governing body member, staff, or a member of the public.

PUBLIC HEARINGS: Persons wishing to speak in favor of or in opposition to a proposal are given an opportunity to do so during the public hearing. Those wishing to address a governing body during the hearing are requested to complete the speaker card and submit it to the City Clerk prior to the hearing. If a proposed action is challenged in court, there may be a limitation to raising only those issues raised during the hearing or in written correspondence received by the governing body at or before the hearing.

Note: The Fountain Valley City Council serves as the Successor Agency to the Fountain Valley Agency for Community Development (Successor Agency), the Fountain Valley Housing Authority, and the Fountain Valley Finance Authority. The Actions of the Successor Agency are separate and apart from the actions of the City Council.

ZOOM LINK INFORMATION
• Participants that choose to watch the City Council meeting through Zoom are automatically placed in the waiting room and will only be allowed into the Zoom meeting if they request to make a public comment. In order to make a public comment, you will indicate through the chat feature which item you would like to speak on, and click on the “raise hand” icon to let the administrator know you wish to speak.
• All participants are muted unless you are requesting to speak, at which time you will be allowed to un-mute and make your comment.
• All public comments are allowed up to 3 minutes to speak.

Topic: City Council
Time: Oct 20, 2026 04:30 PM Pacific Time (US and Canada) Join Zoom Meeting
https://fountainvalley.zoom.us/j/81214278680?pwd=e5yie3ahlXxgurZF3R6a3Rw6Rktm2t.1 YouTube Information
The City Council meeting is streamed live via YouTube, you can access the live City Council meeting by clicking on this link to access the broadcast on Youtube:
https://www.youtube.com/@CityofFV.

CLOSED SESSION
Call to Order 4:15 p.m.

Public Comments (Closed Session matters only)
Persons wishing to speak on a Closed Session matter are requested to identify themselves by completing a blue speaker card indicating the item they want to address and to give the card to the City Clerk prior to the public comment period. • CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: (1 Potential Case regarding letter from HCD regarding Group Home regulations)
• CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Property: 17565 Los Alamos St, Fountain Valley, CA 92708 and 17569 Los Alamos St, Fountain Valley, CA 92708
Agency negotiator: City Manager, Deputy City Manager-Community Services Director, Finance Director, Attorney for the City
Negotiating parties: Fountain Valley and Boys and Girls Club Under negotiation: Price and terms of payment

STUDY SESSION
Call to Order 5:00 p.m.

Public Comments (Study Session matters only)
Persons wishing to speak on a Study Session matter are requested to identify themselves by completing a blue speaker card indicating the item they want to address and to give the card to the City Clerk prior to the public comment period. • Pension & OPEB Liabilities Update - Presentation by Briana Laszlo, Payroll Administrator / Acting Finance Manager Page 6
• 70th Anniversary Schedule of Events - Presentation by Jake Hopkins, Community Services Supervisor Page 8

OPEN SESSION
Call to Order
Invocation - Pastor Godfrey Hom
Salute to the Flag - Vice Mayor Patrick Harper
City Council / Successor Agency / Housing Authority Roll Call Council Members: Bui, Constantine, Grandis, Vice Mayor / Vice Chair Harper, Mayor/Chair Cunneen
Announcement of Supplemental Communications
City Manager / Mayor Update
Council Member Items for Future Consideration
Presentations
• Recognition of Phineas Cole on Receiving the Rank of Eagle Scout - Presentation by Mayor Cunneen
• Recognition of Fountain Valley Police Officers and Legislative Update by County Supervisor Janet Nguyen
• Certificates of Recognition to Mel's Diner and Romana Family Dental, who were both recognized as winners of the OC Register’s Best of Orange County 2026 - Presentation by Mayor Cunneen
• Presentation about the Art on a Box Partnership between the City of Fountain Valley, MWDOC and the Fountain Valley School District - Presentation by Community Services Director / Deputy City Manager Rob Frizzelle • Presentation on the 2nd Annual Citizens Academy - Presentation by Ben Dieterle, Community Services Supervisor
First Public Comments (Unscheduled Matters only)
The Unscheduled Matters Public Comments portion will last 15 Minutes at the beginning of the meeting. Any requests to speak on unscheduled matters after the initial 15 minutes, will be heard at the end of the meeting, unless the Mayor approves an extension of this time. If an individual speaks during the First unscheduled matters time period, they do not get to speak at the end of the meeting as well. Persons wishing to speak on an unscheduled matter are requested to identify themselves by completing a blue speaker and to give the card to the City Clerk. Each person will have up to 3 minutes to speak. The City Clerk will call upon those that wish to speak.

Public Comments (Scheduled Matters Only)
Persons wishing to speak on Agenda item(s) are requested to identify themselves by completing a blue speaker card indicating the item they want to address and to give the card to the City Clerk prior to the public comment period. Each person will be given up to 3 minutes to speak on the entire Consent Calendar, 3 minutes to speak on each item pulled from the Consent Calendar, and 3 minutes to speak on any agendized item(s) not appearing on the Consent Calendar.

Consent Calendar
Consent Calendar Items 1 - 2 will be approved simultaneously with one motion unless separate action and/or discussion is requested.

1. Receive and File the Draft Minutes of the October 6, 2026 Regular City Council Meeting Page 11

2. Approve the City of Fountain Valley Register of Demands for the period of 9/24/2026 to 10/7/2026 for a total of $3,753,459.96 Page 19 Staff recommends Alternative No. 1 to approve the attached Register of Demands representing payments made by the City of Fountain Valley between 9/24/2026 and 10/7/2026 for a total of $3,753,459.96.

Public Hearings
Each person will have up to 3 minutes to speak on each Public Hearing.

3. Public Hearing and Introduction: Development Agreement Phase 1 and Phase 2; and Phase 1 Density Bonus and Affordable Housing Agreement (16800 Magnolia Street and 9025-9063 Recreation Circle) - Presentation by Steven Ayers, Principal Planner Page 33
Administrative Items

4. Addition of Five (5) Police Department Positions, One (1) Risk Management Position, Reclassification of One (1) Fire Department Position, and Related FY 2026/27 Budget Amendments - Presentation by Robin Harnish, Acting Finance Director Page 216
Staff recommends that the City Council approve Alternative No. 1 to:

1. Approve the addition of five (5) full-time positions in the Police Department: one (1) Police Lieutenant (O02), two (2) Dispatchers (G24), and two (2) Community Services Officers (G12), along with the corresponding budget appropriation.

2. Approve the addition of one (1) full-time Management Specialist (P02) in Risk Management, along with the corresponding budget appropriation; and

3. Approve the reclassification of one (1) Management Aide (G74) in the Fire Department to Senior Management Analyst (P39), along with the corresponding budget appropriation.

5. Approval of The City of Fountain Valley Three-Year Goals (2026-2028) and Six-Month Strategic Objectives for October – March 2027 - Presentation by Rick Miller, City Clerk Page 221
Staff recommends that the City Council approve the six-month strategic objectives matrix for October – March 2027.

Public Comments (Unscheduled matters only)
Persons wishing to speak on an unscheduled matter are requested to identify themselves by completing a blue speaker and to give the card to the City Clerk. Each person will have up to 3 minutes to speak. The City Clerk will call upon those that wish to speak.

City Council / Housing Authority / AB 1234 General Comments Adjourn
The next Regular Meeting of the Fountain Valley City Council is November 3, 2026 at 6:00 PM., in the Fountain Valley Council Chambers, 10200 Slater Avenue, Fountain Valley.

City of Fountain Valley
Memorandum

TO: Honorable Mayor and City Council
FROM: Briana Laszlo, Payroll Administrator/Acting Finance Manager DATE: October 20, 2026
SUBJECT: Pension & OPEB Liabilities Update
______________________________________________________________________________

EXECUTIVE SUMMARY
The City has received its annual actuarial valuation reports for both its Pension and OPEB liabilities. The most recent valuations are based on fiscal year ending (FYE) June 30, 2025. The City’s CalPERS Pension Unfunded Actuarial Liability (UAL) decreased by $15 million or 16.8% to $74.5 million, primarily due to the FY 2025 CalPERS investment experience gain of 4.8%. The City’s Net OPEB liability stands at $20.8 million at its most recent measurement date of June 30, 2025, down $4.8 million or 18.8% from the prior year.

DISCUSSION
Pension Liability
Each year, the City receives a pension actuarial valuation report for each of its CalPERS plans (Tiers). The City currently has eight (8) pension tiers, made up of five (5) “Classic” plans and three (3) “PEPRA” plans. The actuarial reports received in August 2026 are based on actual data as of June 2025. The City’s UAL as of June 30, 2025 is $74.5 million, down $15 million from the prior year. The UAL is made up of the total Accrued Liabilities minus the City’s pension assets held by CalPERS and PARS. The table below shows the calculation of UAL and funded status for the past four (4) years.
2021 2022 2023 2024 2025
Accrued Liability (AL) 355,136,799 372,358,943 394,617,400 406,437,401 423,511,892 Assets with CalPERS 289,137,380 264,465,766 282,246,900 299,480,656 329,989,289 Assets with PARS 12,762,792 11,120,701 15,799,650 17,370,073 18,975,132 Unfunded Accrued Liability (UAL) 53,236,627 96,772,476 96,570,850 89,586,672 74,547,471 Funded Status 85.01% 74.01% 75.53% 77.96% 82.40%
The CalPERS pension UAL decreased by $13.4 million, or 13%, to $93.5 million in FY 2025, primarily due to the FY 2025 CalPERS investment experience gain of 4.8%. The CalPERS UAL is partially offset by the City’s 115 Pension Trust fund, which rose to $18.9 million as of June 30, 2025, leaving the City with a Net Pension UAL of $74.5 million. Overall, the Net Pension UAL decreased by $15 million in FY 2025, increasing the City’s overall funded status to 82.4% as of

June 30, 2025.

In October, CalPERS released its preliminary investment return for fiscal year ending June 30, 2026. The preliminary investment showed a return of 14.8%. Compared to the actuarial assumption of 6.8%, the preliminary investment return for FY 2026 is 8.0%.

CalPERS Investment Results
2022 2023 2024 2025 2026
Assumption (Discount Rate) 6.80% 6.80% 6.80% 6.80% 6.80% Actual CalPERS Return -6.10% 6.10% 9.30% 11.60% 14.80%
Experience Gain/Loss -12.90% -0.70% 2.50% 4.80% 8.00%
With the investment gain in FY 2026, we are projecting the funded status to increase for the fiscal year ending June 30, 2026, to around 91%, with a projected Net Pension Liability of $39.4 million.

However, given the 14.8% investment return in FY 2026, it is possible the CalPERS board will vote to decrease the Discount Rate in November. This would likely mute much of the investment gains realized in 2026.

Assuming CalPERS reaches its annual investment target of 6.8% and the City continues to make additional annual contributions toward its pension liabilities, we still project our funded status will reach 100% prior to 2037, when measure HH sunsets. However, it is important to remember that pension liabilities have many moving parts that can significantly affect overall liabilities from year to year. Staff will continue to monitor these liabilities and report any changes to the City Council.

OPEB Liability
Similar to the pension plans, the City’s retiree health program creates future liabilities for the City.

Each year the City is required, by GASB pronouncement #75, to have an actuarial study done for its Other Post Employment Benefits (OPEB). The current actuarial study is measured as of June 30, 2025.

The total OPEB liability of $39.1 million is offset by the City’s 115 OPEB trust plan (fiduciary net position) of $18.3 million. Overall, the City’s net OPEB liability was $20.8 million, and the funded status increased to 46.8% as of June 30, 2025, up 10.2 percentage points from the prior year.
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
2021 2022 2023 2024 2025
PARS 115 Trust OPEB Liability

City of Fountain Valley
Memorandum
TO: Honorable Mayor and City Council
FROM: Jake Hopkins, Community Services Supervisor
Christie Araiza, Community Services Manager
Rob Frizzelle, Community Services Director/Deputy City Manager DATE: October 15, 2026
SUBJECT: Fountain Valley 70th Anniversary Celebration
______________________________________________________________________________ EXECUTIVE SUMMARY:

At the May 19, 2026, City Council meeting, staff received guidance to create a year of celebration for 2027 for the community to join in celebrating 70 years of civil service for the City of Fountain Valley. Each event will have a focus on recognizing this milestone to include themed colors, logos & programming to celebrate 70 years for Fountain Valley.

DISCUSSION:

The 70th Anniversary Committee has been meeting regularly, and the following timeline is to showcase the ways in which the Committee has determined to be fun and engaging for our community to come together in celebration. Proposed events are a combination of regularly scheduled city events to highlight the 70th anniversary in conjunction with new standalone programming such as; merchandise store, photo contest, art on the box contest, Summerfest VIP Birthday Dinner / Parade, and 70th Drive In Movie.
70th Celebration Activities
January:

Lunar New Year Festival – January 30, 2027
Launch 70th Anniversary Merch Store – Launch Date TBD
February:

Photography Contest – “Show Us Your FV!”
Winner of Contest to be featured in Summer Fountain Pen March:

FV Egg Hunt – March 27, 2027
Feature: Ferris Wheel Component or New Featured Activity 70 Special Eggs to be hidden throughout event
April:

Art Contest – Partner with School District or Run as Council Art Contest Winners to be featured through Art on the Box Program
Community Day of Service – April 24, 2027
Work with non-profit organization to add additional FV service projects

Senior 70s Prom Dance – April 30, 2027
May:

Business Bingo – Partner with Chamber of Commerce or through Community Development.

Finding a fun and unique way to encourage our community to support local businesses.

Senior May Luncheon (70s Theme) – May 25, 2027
Memorial Day Ceremony – May 31, 2027
Commemorative pin to be distributed
70-Seconds of Collective Silence dedicated to 70 years of service from members in our community protecting and serving our community and nation.

June:

Senior Expo – June 16, 2027
70th Anniversary Theme
FV Summerfest – June 17-20, 2027
70th Anniversary Parade/VIP Dinner/Firework Show – During Summerfest Potentially debuting our First Sister City
July:

Concerts in the Park – Fountain Valley Through the Decades July 1, 2027 – 2000’s Music
July 8, 2027 – 90’s Music
July 15, 2027 – 80’s Music
July 22, 2027 – 70’s Music
July 29, 2027 – 50/60’s Music
(The order could be reversed, pending bookings)
Feature: Invite former Council Members from the decades they served to commemorate their service to Fountain Valley and honor their time on City Council. Offer a VIP Tent at each concert.

August:

National Night Out & Movie in the Park – August 3, 2027 Great FV Campout – August 7-8, 2027
Feature: Optional T-Shirt to celebrate 70th and 15 years of Great FV Campout Movie in the Park – August 13, 2027
September:

Hyundai Hope on Wheels 5K and Color Fun Run – September 25, 2027 Will be working to collaborate with Hyundai to best determine how to add value October:

Drive-In Movie – Date TBD
November:

Veterans Day Ceremony – November 11, 2027
Commemorative pin to be distributed
70-Seconds of Collective Silence dedicated to 70 years of service from members in our community protecting and serving our community and nation.

GREAT-ful for these FV Legends
Telling their stories of impact! 70 people for 70 years. (Feature on City Website and a potential Limited-Edition Magazine) December:

Tree Lighting – December 4, 2027
Additional special guests of Grinch (also celebrating 70 years) and a Special Element/Activity
Inclusive Snow Day – December 5, 2027

RECOMMENDATION:

Staff requests City Council input and direction to move forward with the above timeline and activities.

MINUTES OF THE

CITY COUNCIL/ SUCCESSOR AGENCY TO THE FOUNTAIN

VALLEY AGENCY

FOR COMMUNITY DEVELOPMENT/ FOUNTAIN VALLEY

HOUSING AUTHORITY
Study Session 5:00 p.m.

Regular Meeting 6:00 p.m.

Tuesday, October 6, 2026
Council Chambers

STUDY SESSION
CALL TO ORDER 5:00 p.m.

PUBLIC COMMENTS (Study Session matters only)
• Civic Center Plaza Update - Presentation by Rob Frizzelle, Community Services Manager / Deputy City Manager
Rob Frizzelle presented an update on the Civic Center Plaza and the options the City Council can consider as we move forward.
• Update on Public Cable Television Authority (PCTA) - Presentation by Meghan Wishner, Management Analyst and Danny Hitt, General Manager - Public Cable Television Authority
Meghan Wishner provided an update on PCTA and its current financial situation.

OPEN SESSION
CALL TO ORDER 6:11 p.m.

INVOCATION Chaplain Chuck McIlhenny
SALUTE TO THE FLAG Council Member Kim Constantine

CITY COUNCIL/SUCCESSOR AGENCY/HOUSING AUTHORITY/ ROLL CALL Council Members Present: Bui, Constantine, Grandis, Vice Mayor/Vice Chair Harper, Mayor/Chair Cunneen
Council Member Glenn Grandis attended the meeting remotely from New York City

Absent: None

ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS
None

CITY MANAGER / MAYOR UPDATE
Mayor Cunneen provided his update.

COUNCIL MEMBER ITEMS FOR FUTURE CONSIDERATION
None

PRESENTATIONS
• Advisory Committee for Persons with Disabilities Awards Program - Presentation by Jenni Worsham, Community Services Manager and John Borack John Borack recognized Goodwill Orange County as the recipient of the Award. • Recognition of Emrys Hay on the Achievement of the Rank of Eagle Scout - Presentation by Mayor Jim Cunneen
Mayor Cunneen recognized Emrys Hay in achieving the rank of Eagle Scout. • Presentation on Community Participation by Debbie Killey of Republic Services Debbie Killey provided the residents and City Council with information on all the events that Republic Services assists the community with.

FIRST CITY COUNCIL/ SUCCESSOR AGENCY/ HOUSING AUTHORITY/ PUBLIC COMMENTS (Unscheduled Matters Only)
Libby, Lori Speak, Anh Do, Dan Stewart, Lis

CONSENT CALENDAR

1. Approve the City of Fountain Valley Register of Demands for the period of 9/3/2026 to 9/23/2026 for a total of $4,284,618.94
ACTION: Move to Approve the City of Fountain Valley Register of Demands for the period of 9/3/2026 to 9/23/2026 for a total of $4,284,618.94 MOTION: Constantine SECOND: Bui
AYES: Bui, Constantine, Grandis, Harper, Cunneen
NOES: None
ABSENT: None
ABSTAIN: None

2. Receive and File the Draft Minutes of the September 15, 2026 Regular City Council Meeting
ACTION: Move to Receive and File the Draft Minutes of the September 15, 2026 Regular City Council Meeting
MOTION: Constantine SECOND: Bui
AYES: Bui, Constantine, Grandis, Harper, Cunneen
NOES: None
ABSENT: None
ABSTAIN: None
Administrative Items

3. Adopt A Resolution Identifying the Terms and Conditions for Fountain Valley Fire Department Response Away from Official Duty Station and Assigned to an Emergency Incident. - Presentation by Tim Saiki, Fire Department Division Chief ACTION: Move to Adopt a Resolution Identifying the Terms and Conditions for Fountain Valley Fire Department Response Away from Official Duty Station and Assigned to an Emergency Incident. - Presentation by Tim Saiki, Fire Department Division Chief MOTION: Constantine SECOND: Cunneen
AYES: Bui, Constantine, Grandis, Harper, Cunneen
NOES: None
ABSENT: None
ABSTAIN: None
Appointments

4. Appointments to the Cultural, Arts, Recreation, Sports and Seniors Advisory Committee
Public Comments: Libby, Dan Stewart, Dan Hay, Geraldina Larson, Lara Simanian and Kristin Azcona
The City Council made the following appointments to the committee that will serve until December 31, 2028.

Council Member Constantine – Anne Bettinger and Tina Dubuque Vice Mayor Harper – Kim To and Kristin Azcona
Council Member Ted Bui – Nicole Tran and Dave Garafaolo Council Member Glenn Grandis – Regina Huebner and Rudy Huebner Mayor Cunneen – Dr. Van Vu and Leo Troung

CITY COUNCIL/ SUCCESSOR AGENCY/ HOUSING AUTHORITY/ PUBLIC COMMENTS (Unscheduled Matters Only)
CITY COUNCIL/SUCCESSOR AGENCY/HOUSING AUTHORITY AB 1234/GENERAL COMMENTS Mayor Cunneen

September 17 Attended the Strategic Planning Session and then later attended the Career Excellence award at the Women’s Leadership Conference
September 18 Attended the Fountain Valley Rotary Club’s 10th Annual Ed Arnold Volunteer of the Year Award and Scholarship Ceremony
September 19 Attended the third Mile with the Mayor walk at the Sports Park September 20 I joined our Fire and Police Chiefs as they were the guest speakers at the Fountain Valley Historical Society meeting
September 23 Attended the Fountain Valley Chamber of Commerce’s annual Legislative Update Breakfast
September 23-25 Attended the Annual League of California Cities meeting in Long Beach September 26 provided some opening comments at the Hyundai Hope on Wheels, 5K and Color Run and then later I stopped into Founder’s Village Senior Center for the Passport Fair provided by Congressman Derek Tran and the U.S. Government September 27 Attended the OC Around the Table at Mile Square Park September 30 I attended and made some opening comments, together with Councilman Bui, at Freedom Hall where Supervisor Janet Nguyen led an appreciation program for all the local groups and leaders that ensured that the GKN crisis in Garden Grove was properly handled
Vice Mayor Harper
September 16 Attended the PCTA Meeting and then the Police Department Badge Pinning Ceremony
September 17 Attended the Strategic Planning meeting
September 23 Attended the Legislative Breakfast
September 24 Attended the Cal Cities Conference
September 26 Attended the Hyundai 5k
September 27 Attended the OC Around the Table event
September 28 Attended the OCTA Board meeting
September 29 Attended the CAL-COG meeting
October 5 Attended the OCTA Regional Transportation Planning meeting Council Member Grandis
Attended the PD Badge Ceremony
Attended the Strategic planning session
Attended the FV Community Foundation board meeting
Attended the Potluck around the table
Attended the Placentia State of the City, their 100 year celebration Attended the FV Hall of Fame as emcee

Council Member Constantine
September 15 At ICSC Western, San Diego (Innovating Commerce Serving Communities), Omar Dadabhoy, our Community Development Director, Victor Viramontes, our Housing Division Management Analyst, and I met with various commercial brokers to bring business into the City of Fountain Valley. These brokers were with: Bristol Development Partners, Kosmont, Newmark, and another. There were many connections made, additionally as we connected with other cities and businesses in the Expo Hall. At lunchtime at the San Diego Convention Center, I thoroughly enjoyed the Keynote Presentation. The speakers were Tony Giordano, President and Founder of Giordano Industries, Best-Selling Author, and National Speaker and Hannah Hammond, Founder and CEO of HB Capital. At 3:30 p.m. till approximately 7:25 p.m., I participated in the Fountain Valley City Council Meeting via Zoom from my Manchester Grand Hyatt Hotel room in San Diego.

September 16 Took a Lyft to the Amtrak Santa Fe Station and boarded a train back to Irvine. I then took a Lyft from the Amtrak Station in Irvine to my home. Upon returning to Fountain Valley, I attended the Fountain Valley Police Department Badge Pinning Ceremony for several new hire police officers and many police promotions. Congratulations, everyone. In the evening, I attended the 5th session of the Fountain Valley Citizen’s Academy. Tonight, it was a tour of Fire Station 1 on Bushard.

September 17 Participated in our Citywide Strategic Planning Session at our Fountain Valley Recreation Center. It was a full house with all of City Council, our City Attorney, City Manager, Police and Fire Chiefs, HR (Human Resources), IT (Information Technology), and various other management, our City Clerk, and City Admin. I love these twice a year sessions and have been attending faithfully since 2013. Later, as our City’s Trustee for the Orange County Mosquito and Vector Control Vector Board, participated in our monthly Board Meeting at the Orange County Mosquito and Vector Control District in Garden Grove. Immediately after, I drove to Courreges Elementary School to see a bit of the Courreges Touch-A-Truck & Car Show by our Fountain Valley Police and Fire Departments. Additionally, Huntington Beach public safety participated, too. Such a very special event! Drove over to Founder’s Village Senior and Community Center, where I participated in the monthly Fountain Valley Community Foundation Grants, Board, and Volunteer Meetings.

September 18 Watched online the State of the Orange County Sanitation District Board Member event.

September 19 Attended the Friends of the Fountain Valley Library “Don’t Be a Victim… Be Aware of Fraud and Scammers” Presentation by our FVPD Officer Shaw, a representative from Experian, and a representative from the Navy Federal Credit Union. Such great information was shared. I will make a Facebook post for the community.

September 20 Attended the well-attended Fountain Valley Historical Society bi-monthly luncheon in which our FV Fire Chief, Chris Nigg and our FV Police Chief, Craig Heredia were featured speakers. Both were hired earlier this year.

September 23 Participated purposely for just one segment of the FV Chamber of Commerce Legislative Update and Candidates Forum at Founders Village Senior and Community Center. My one-minute statement explained I was leaving due to their Fountain Valley Chamber of Commerce Chairman, Van Vu endorsing a fellow FV City Council Candidate on his website when the Chamber of

Commerce policy is to NOT endorse anyone. I caught that on May 31st, was assured it was fixed. Then 95 days later, it was still there — a mere month before ballots go out — 2 months before the November 3rd General Election. Right after, I attended Cal Cities - Annual Conference and Expo at the Anaheim Convention Center. There was a great luncheon at the adjacent Anaheim Hilton — that of the Orange County Division Annual Conference. Afterwards, I attended the Opening General Session with the Keynote Address: You Are the Change: Brain-Hacking Your Leadership for the Evolving Workplace by Stephanie Chung, then subsequent workshops of: “Leading Productive and Respectful City Council Meetings”, and “Bots, Bulk Comments, and the Brown Act”. Once the Expo Center opened with exhibitors, I walked the area for a bit and spoke with a few exhibitors before leaving. In the evening back in Fountain Valley, attended the 5th Citizen’s Academy session at Founders Village Senior and Community Center. Tonight’s presenter was Omar Dadabhoy, our Community Development Director, as well as other presentations from several staffers. Such great information.

September 24 Attended day 2 of Cal Cities - Annual Conference and Expo at the Anaheim Convention Center. I visited the Expo Center and spoke with many exhibitors. Today’s sessions included: “Artificial Intelligence Strategies and Case Studies”, “What Cities Must Know About New Housing Mandatory Inspection and Enforcement Laws”, the General Session with the Keynote Address by Greg Lindsay on “Where Will You Live in 2050”, “Governing in the Fishbowl: How to Lead While Under 24/7 Scrutiny”, “Campaign Season and City Hall: Staying Legal, Ethical, and Out of Trouble”, and “Building Council Effectiveness After a Contentious Election”.

September 25 Attended day 3 of Cal Cities - Annual Conference and Expo at the Anaheim Convention Center. This morning I completed the 2-hour, every 4 year certification I will need in February, 2027 for “Harassment Prevention Training for Supervisors and Officials AB 1661”. The information was compliant with AB 1825/2053/1661 and SB 396. Happy to have completed several months in advance. Afterwards, I sat in on the Closing General Session of Cal Cities with the Keynote Address: Reaching New Heights from migrant farm worker to NASA astronaut, Jose Hernandez’ story.

September 26 Stopped in very early at the annual Hyundai 5K Color Fun Run at the FV Sports Park, then briefly to the Congressman Derek Tran Passport event at Founders Village Senior and Community Center.

September 27 Stopped in early when set-up was just about complete at 1:50 p.m., and stayed for about a half hour at the “OC Around the Table — Let’s Break the Guinness World Record for Community Potluck” at Mile Square Park on the Warner / Euclid County side. For the second year’s attempt, the Guinness record was NOT broken.

September 29 Watched the Orange County Board of Supervisors Board Meeting on the County of Orange website. Later, attended the “Western Luncheon” at Founders Village Senior and Community Center. Such a very well attended luncheon with singer Jack Johnson who goes by “Cowboy Jack” — so good!
September 30 Spoke at the Fountain Valley Chamber of Commerce Board Meeting as a resident stating how the Chamber of Commerce endorsed a fellow FV City Council Candidate as “Van Vu Fountain Valley Chamber President” was on the Candidate’s campaign website for nearly a third of a year just before I had emailed the immediate past Chamber Chairman from my personal email on 5/31 and was assured by her the next day in writing, the matter was taken care of and to be

corrected. After 95 days, it still was not corrected. I had a lunch meeting at Cambalache with City Manager, Maggie. In the evening, I attended the 6th session of the Citizen’s Academy. Tonight’s informational session took place at our Fountain Valley City Yard on Mt. Hermann. Public Works staff had such great, informative presentations.

October 1 Delivered around monthly Centerpiece Newsletters of Founders Village Senior and Community Center to various Fountain Valley businesses, etc. such as: Richard’s Cookie Jar, Our Lady of Guadalupe, affordable senior housing, Lamppost Pizza, Palm Island, Park View Estates, and Glee Donuts. Did a to go order from Cambalache in support of the Fountain Valley Community Foundation receiving 20% from this most of the day dine in or dine out event.

October 2 City Manager Maggie Le and I headed to Sacramento on Southwest Airlines from Long Beach Airport along with Tracy McQuaid and her younger daughter. The purpose of this trip was to honor our late Fountain Valley Fire Chief, Bill McQuaid with his name being added to the California Firefighters Memorial Wall and the official ceremony. We stayed at the Courtyard by Marriott, Sacramento Cal Expo till Sunday. Additionally, other Fountain Valley representation on the trip included our Fire Chief Chris Nigg, Fire Captain Austin Cathey, and firefighter Russell Martin. Met with Jacque Nguyen, Senator Tony Strickland’s Communications Director and Adam Boman, Assembly Member Tri Ta’s Legislative Director in the Capitol Annex Swing Space. Congress was not in Session.

In the evening, we dined at Cafeteria 15L. Our late Fire Chief Bill McQuaid was honored so very well with the touching ceremony and visits to see his name on the California Firefighters Memorial Wall.

October 3 Still on the Sacramento trip, we all attended the California Firefighters Memorial Ceremony held at the SAFE Credit Union Convention Center, then said our goodbyes to our Fire staff. In the evening, Maggie and I joined Tracy’s extended family for dinner at Mayahuel.

October 4 In the early evening, we flew back to Long Beach Airport via Southwest Airlines.

Council Member Bui
September 3 Attended the OC Parks Meeting
September 9 Attended the OC Sanitation meeting
September 11 Attended the Lobsterfest event
September 16 Attended the PCTA Board Meeting and then the PD Badge Pinning Ceremony September 17 Attended the Strategic Planning meeting
September 18 Attended the OC Sanitation meeting and then Rotary 10th Annual Ed Arnold Volunteer Service Awards
September 23 Attended the Cal Cities Annual Conference
September 26 Attended the Passport Fair in Fountain Valley September 27 Attended the OC Roundtable event

ADJOURN THE MEETING OF THE CITY COUNCIL/SUCCESSOR AGENCY/HOUSING

AUTHORITY
Mayor Cunneen adjourned the meeting in the memory of former Fountain Valley Fire Chief Richard Jorgensen at 8:06p.m. to the next Meeting of the Fountain Valley City Council on October 20, 2026 at 6:00 p.m., in the Fountain Valley Council Chambers, 10200 Slater Avenue, Fountain Valley. __________________________
Jim Cunneen, Mayor
Attest:
___________________________
Rick Miller, City Clerk

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: October 20, 2026
Members of the City Council
SUBJECT: City of Fountain Valley Register of Demands for the period of 9/24/2026 to 10/7/2026 for a total of $3,753,459.96
Three-Year Strategic Goals
☐ Cultivate a welcoming culture and safe environment that makes our community “A Nice Place to Live”
☒ Ensure long-term fiscal stability by evaluating processes, and attract and retain revenue producing businesses/opportunities
☐ Attract and retain quality staff through best practices and trends ☐ Maintain, build, plan for, and modernize infrastructure to support the growth and future needs of the City
☐ Not applicable

EXECUTIVE SUMMARY
Attached is the Register of Demands for the City of Fountain Valley to be ratified by the City Council.

DISCUSSION
Pursuant to the State of California’s Government Code 37201 through 37210, the Director of Finance or their designated representative hereby certifies the accuracy of the following demands and the availability of funds for payment thereof. Demands paid by the City shall be inspected and ratified by the legislative body on the next available Council agenda. The Finance Department has prepared the attached Register of Demands, which summarizes the City's payments released since the previous City Council meeting.

FINANCIAL ANALYSIS
The attached Register of Demands reflects payments made by the City of Fountain Valley between 9/24/2026 and 10/7/2026, totaling $3,753,459.96.

ATTORNEY REVIEW
The Attorney for the City reviewed this staff report and concurred with the recommended action.

PUBLIC NOTIFICATION
Not applicable.

Register of Demands
October 20, 2026

ALTERNATIVES
Alternative No. 1: Approve the attached Register of Demands.

Alternative No. 2: Do not approve as presented and provide direction to staff.

RECOMMENDATION
Staff recommends Alternative No. 1 to approve the attached Register of Demands representing payments made by the City of Fountain Valley between 9/24/2026 and 10/7/2026 for a total of $3,753,459.96.

Prepared by: Robin Harnish, Acting Finance Director
Reviewed by: Colin Burns, City Attorney
Approved by: Maggie Le, City Manager
Attachment 1: Register of Demands 9/24/2026 to 10/7/2026.

City Of Fountain Valley
Register of Demands
9/24/2026 - 10/7/2026
Department
Check
Date Vendor Description Doc #
Check/ACH
# Amount
10000000 NON-DEPARTMENTAL
10/01/26 MUNICIPAL DENTAL POO OCT 2026 DELTA DENTAL PPO 54632 2320293 13,032.97 10/01/26 MUNICIPAL DENTAL HMO OCT 2026 DELTA DENTAL HMO 54634 6930 1,539.52 10/01/26 CFG INVESTMENTS REFUND CODE AMENDMENT DEPOSIT-PLAZA 54681 2320264 5,372.95 10/01/26 THE LINCOLN NATIONAL OCTOBER 2026 LIFE INSURANCE/LTD/ADD/EAP 54706 2320319 1,506.27 09/30/26 FOUNTAIN VALLEY POLI PR PPE260925 - DED 8002 54752 6877 2,750.00 09/30/26 FOUNTAIN VALLEY CRED PR PPE260925 - DED 9500 54753 6875 29,719.60 09/30/26 FOUNTAIN VALLEY FIRE PR PPE260925 - DED 8000 54754 6876 3,500.04 10/01/26 EMPOWER/BENEFITS COR PR PPE260925 - DED 7031,7032,7033,7036,8500- 54755 6709 84,415.15 10/01/26 CALIFORNIA STATE DIS PR PPE260925 - DED 6005, 6007, 6015 54756 6710 1,023.58 09/30/26 MISSION SQUARE RET P PLAN #803216 - PR PPE260925 - DED 2013, 2015 54757 6882 3,435.00 09/30/26 MISSION SQUARE RET P PLAN #800389 - PR PPE260925 - DED 2011,2012 54758 6883 1,689.80 09/30/26 MISSION SQUARE RET P PLAN #800414 - PR PPE260925 - DED 2014 54759 6884 235.82 09/30/26 MISSION SQUARE RET P PLAN #108536 - PR PPE260925 - DED 2018 54760 6885 461.52 09/30/26 U.S. BANK N.A. PR PPE260925 - DED 7029, 7030 54761 6887 3,564.80 09/30/26 FVPOA PAC PR PPE260925 - DED 8005 54762 6878 465.00 10/01/26 INTERNAL REVENUE SER PR PPE260925 - DED 1100, 3000 54763 6711 185,531.95 10/01/26 EMPLOYMENT DEVELOPME PR PPE260925 - DED 4000 54764 6712 63,669.73 09/30/26 PORAC RETIREE MEDIC PR PPE260925 - DED 2017 54765 6886 3,461.50 09/30/26 INTERNATIONAL BRO PR PPE260925 - DED 8003 54766 6879 450.00 09/30/26 INTERNATIONAL BRO PR PPE260925 - DED 8004 54767 6880 475.00 09/30/26 INTERNATIONAL BRO PR PPE260925 - DED 8001 54768 6881 700.00 TOTAL NON-DEPARTMENTAL 407,000.20
10000010 NON-DEPARTMENTAL
10/01/26 MUNICIPAL DENTAL POO OCT 2026 DELTA DENTAL PPO 54632 2320293 11,660.15 10/01/26 MUNICIPAL DENTAL HMO OCT 2026 DELTA DENTAL HMO 54634 6930 445.78 10/01/26 MISSION SQUARE RET P NOV 2026 - PLAN #803210-RETIREE REIMB. 54861 6929 164,370.51 TOTAL NON-DEPARTMENTAL 176,476.44
10010100 CITY COUNCIL
10/01/26 CONSTANTINE, KIM TRANSPORTATION TO ICSC; MEALS 54796 2320269 129.21 10/01/26 CONSTANTINE, KIM TRANSPORTATION TO LEAGUE OF CA CITIES 54795 2320269 62.67 TOTAL CITY COUNCIL 191.88
10010104 ADMIN SERVICES
10/01/26 C2 IMAGING PARKING SIGNS FOR STATE OF THE CITY 54801 2320262 316.08 09/24/26 TOWNSEND PUBLIC AFFA JUL 2026 GRANT WRITING SERVICES 54540 6872 6,000.00 10/01/26 JPW COMMUNICATIONS AUG 2026 - COMMUNICATIONS, MARKETING, PR 54196 6920 1,200.00 10/01/26 AMAZON CITIZENS ACADEMY SUPPLIES 54069 6890 301.79 TOTAL ADMIN SERVICES 7,817.87

10010105 RECORDS MANAGEMENT
10/01/26 AMAZON CITIZENS ACADEMY SUPPLIES 54069 6890 43.50 10/01/26 AMAZON REFUND FOR BINDERS 54070 6890 (50.18)
TOTAL RECORDS MANAGEMENT (6.68)
10020200 HUMAN RESOURCES
09/24/26 DEPARTMENT OF JUSTIC JULY 2026 - LIVE SCANS 54524 2320222 64.00 10/01/26 FLOOD, FREDERICK TUITION REIMBURSEMENT (MAT 240) 54794 6900 1,062.00 09/24/26 STERLING HEALTH SERV AUGUST 2026 FSA ADMIN FEES 54392 6869 105.00 09/24/26 DF POLYGRAPH 8/10/26 -8/31/26 PRE-EMPLOYMENT POLYGRAPH 54513 6856 450.00 09/24/26 DEPARTMENT OF JUSTIC JULY 2026 - LIVE SCANS 54519 2320223 1,240.00 09/24/26 THNKS NEW HIRE RECOGNITION 54539 6871 300.00
09/24/26 DEPARTMENT OF JUSTIC AUGUST 2026 - HR DEPT 54585 2320224 196.00 10/01/26 RCS INVESTIGATIONS & 9/18/2026 HR RCS INVESTIGATIONS SERVICES 54705 2320301 9,350.00 10/01/26 CONCENTRA MEDICAL CE 9/16/26 - 9/22/26 HR OCCUPATIONAL MEDICAL 54707 2320268 12,634.50 10/01/26 KEENAN & ASSOCIATES BENEFIT BRIDGE EMPLOYEE BENEFIT 54709 2320285 7,500.00 TOTAL HUMAN RESOURCES 32,901.50
10030300 PLANNING
09/24/26 MICHAEL BAKER INTERN JUL 2026 COUNTER CONTRACT PLANNER 54510 6862 15,030.26 09/24/26 AT&T MOBILITY 7/27-8/26/26 CELL PHONES & IPADS 54174 2320213 135.06 09/24/26 INFOSEND, INC SEPT 2026 DATA PROCESSING 54186 2320228 1,288.76 09/24/26 MICHAEL BAKER INTERN AUG 2026 - COUNTER CONTRACT PLANNER 54511 6862 14,112.00 09/24/26 STRADLING YOCCA CARL LEGAL SERVICES-PLANNING-AFFORDABLE 54515 2320244 24,750.00 09/24/26 STRADLING YOCCA CARL LEGAL SERVICES-PLANNING-AFFORDABLE 54516 2320244 5,775.00 09/24/26 STRADLING YOCCA CARL LEGAL SERVICES-PLANNING-AFFORDABLE 54517 2320244 9,790.00 TOTAL PLANNING 70,881.08
10030301 BUILDING & SAFETY
09/24/26 AT&T MOBILITY 7/27-8/26/26 CELL PHONES & IPADS 54174 2320213 218.54 09/24/26 OC SANITATION DISTRI AUG 2026 SEWER CONNECTION FEES 54486 2320232 (440.57) 09/24/26 VCA CODE AUG 2026 BUILDING PLAN RVW AND STAFFING 54487 6873 9,660.00 09/24/26 BLDG REFUND FULL REFUND PLUMBING AND BUILDING FEES 54328 2320215 234.85 09/24/26 BLDG REFUND FULL REFUND FOR BUILDING AND MECH FEES 54329 2320216 92.00 TOTAL BUILDING & SAFETY 9,764.82
10030305 ECONOMIC DEVELOPMENT
09/24/26 AT&T MOBILITY 7/27-8/26/26 CELL PHONES & IPADS 54174 2320213 46.66 10/01/26 VIRAMONTES, VICTOR EXPENSES ICSC 9/14-9/16/26 SAN DIEGO 54661 6938 751.93 TOTAL ECONOMIC DEVELOPMENT 798.59
10030310 CODE ENFORCEMENT
09/24/26 AT&T MOBILITY 7/27-8/26/26 CELL PHONES & IPADS 54174 2320213 79.78 TOTAL CODE ENFORCEMENT 79.78
10040400 FINANCE
10/01/26 STATE CONTROLLER'S O 2025 INTERCEPT FEES/OFFSET PROGRAM 54536 2320314 130.53 10/01/26 NBS GOVERNMENT FINAN FIRE FACILITIES IMPACT FEE STUDY - JULY 25, 54751 2320328 4,065.44 10/01/26 SECTRAN SECURITY INC SEPTEMBER 2026 ARMORED SERVICES 54535 6932 369.74 09/24/26 TEMPORARY STAFFING TEMP - RET ANNUITANT 9/14-9/20/26 54580 6870 1,098.57 10/01/26 TEMPORARY STAFFING TEMP - FIN RET ANNU 9/21-9/27/26 54770 6935 3,195.84

TOTAL FINANCE 8,860.12
10040401 PURCHASING
09/24/26 CANTEEN REFRESHMENT 202607 CH COFFEE SUPPLIES 54560 6854 298.99 09/24/26 CANTEEN REFRESHMENT 202607 CH COFFEE SUPPLIES 54562 6854 228.47 09/24/26 CANTEEN REFRESHMENT 202608 CH COFFEE SUPPLIES 54563 6854 283.55 TOTAL PURCHASING 811.01
10050500 ENGINEERING
09/24/26 INTERWEST CONSULTING JUL 2026 - CM FOR 2 FIRE STATION REMODEL 54567 6858 2,808.00 TOTAL ENGINEERING 2,808.00
10050503 STREET LIGHTING
10/01/26 BEAR ELECTRICAL SOLU JUL 2026 - STREET LIGHTS REPAIRS 54745 6891 7,663.83 09/24/26 YUNEX, LLC JUL 2026 - TRAFFIC SIGNALS MAINTENANCE 54570 6874 3,235.24 09/24/26 YUNEX, LLC JUL 2026 - TS CALL OUTS 54571 6874 3,442.47 10/01/26 BEAR ELECTRICAL SOLU AUG 2026 - STREET LIGHTS REPAIRS 54746 6892 7,890.00 09/24/26 YUNEX, LLC 8/05/26 TALBERT & WARD POLE KD 54572 6874 3,148.11 09/24/26 YUNEX, LLC AUG 2026 - TS MAINTENANCE 54574 6874 3,235.24 09/24/26 YUNEX, LLC AUG 2026 - TS CALL OUTS 54575 6874 1,919.94 10/01/26 SO CALIF EDISON CO 7/27-8/24/26 TS ELECTRICITY 54579 2320309 5,777.29 10/01/26 S C SIGNS SUPPLIES STREET OVERHEAD SIGNS 54693 2320303 3,232.50 10/01/26 SO CALIF EDISON CO 8/25/26-9/23/26 TS ELECTRICITY OC SAN SIGNAL 54793 2320311 142.76 TOTAL STREET LIGHTING 39,687.38
10050550 RIGHTS-OF-WAY
09/24/26 NIEVES LANDSCAPE, IN 7/2026 MEDIAN & ROW LANDSCAPE 54504 2320231 27,980.92 09/24/26 HERITAGE LANDSCAPE IRRIGATION PARTS FOR HARPER PARK 54493 2320227 442.26 TOTAL RIGHTS-OF-WAY 28,423.18
10050551 TREE MAINTENANCE
10/01/26 GREAT SCOTT TREE SER 2026 - E-4 PALMS 54842 6906 413.70 10/01/26 GREAT SCOTT TREE SER 2026 - EMERGENCY 18546 SANTA YNEZ 54829 6903 250.73 10/01/26 GREAT SCOTT TREE SER 2026 - B-6 PALMS 54832 6904 118.20 10/01/26 GREAT SCOTT TREE SER 2026 - J-1 PALMS 54844 6908 354.60 10/01/26 GREAT SCOTT TREE SER 2026 - D-7 PALMS 54837 6905 2,423.10 10/01/26 GREAT SCOTT TREE SER 2026 - E-6 PALMS 54843 6907 177.30 10/01/26 GREAT SCOTT TREE SER 2026 - E-7 PALMS 54846 6902 827.40 10/01/26 GREAT SCOTT TREE SER 2026 - EMERGENCY AT LOS ALAMOS PARK 54847 6909 2,045.20 10/01/26 GREAT SCOTT TREE SER 2026 - C-7 PALMS 54848 6910 1,950.30 10/01/26 GREAT SCOTT TREE SER 2026 - F-5 PALMS 54849 6911 1,773.00 10/01/26 GREAT SCOTT TREE SER 2026 - C-2 PALMS 54850 6912 177.30 10/01/26 GREAT SCOTT TREE SER 2026 - F-4 PALMS 54851 6913 591.00 10/01/26 GREAT SCOTT TREE SER 2026 - C-6 PALMS 54852 6914 59.10 10/01/26 GREAT SCOTT TREE SER 2026 - B-4 PALMS 54853 6915 2,127.60 10/01/26 GREAT SCOTT TREE SER 2026 - B-7 PALMS 54854 6916 236.40 10/01/26 GREAT SCOTT TREE SER 2026 - EMERGENCY AT MAGNOLIA 54855 6917 744.04 10/01/26 GREAT SCOTT TREE SER 2026 - D-5 PALMS 54856 6918 1,536.60 10/01/26 GREAT SCOTT TREE SER 2026 - EMERGENCY LIMB AT HARBOR 54857 6919 827.07 TOTAL TREE MAINTENANCE 16,632.64

10050552 PARK MAINTENANCE
09/24/26 ALAN'S LAWNMOWER & G LANDSCAPE SUPPLIES FOR CORDATA PARK 54494 2320212 785.94 09/24/26 HERITAGE LANDSCAPE SOLENOID TO REPLACE FAULTY VALVES 54489 2320227 956.54 09/24/26 HERITAGE LANDSCAPE GRASS SEED AND SPRINKLERS FOR PARKS 54490 2320227 1,345.09 09/24/26 MERCHANTS LANDSCAPE 7/2026 PARKS & CIVIC FAC. LANDSCAPE 54543 6860 4,183.54 09/24/26 MERCHANTS LANDSCAPE 7/2026 PARKS & CIVIC FAC. LANDSCAPE 54544 6861 21,985.27 09/24/26 CINTAS CORPORATION 6 8/6/26 UNIFORMS FY 26/27 54488 2320220 68.00 10/01/26 SAKIOKA WHOLESALE NU CITY HALL EAST PARKING LOT LANDSCAPE 54727 2320305 2,556.45 09/24/26 HERITAGE LANDSCAPE DRIPLINE FOR CITY HALL 54491 2320227 483.74 10/01/26 MERCHANTS LANDSCAPE 8/2026 PARKS & CIVIC FAC. LANDSCAPE 54858 6926 4,183.54 10/01/26 MERCHANTS LANDSCAPE 8/26 PARKS & CIVIC FAC. LANDSCAPE 54859 6927 21,985.27 10/01/26 HERITAGE LANDSCAPE DIAPHRAM ASSEMBLY FOR VALVES 54688 2320281 483.15 10/01/26 BEE BUSTERS, INC. BEES IN IRRIGATION BOX 54689 2320259 195.00 09/24/26 SO CALIF EDISON CO 08/20/26 to 09/20/26 MCDOWELL PARK (OAK ST) 54559 2320242 27.22 TOTAL PARK MAINTENANCE 59,238.75
10050553 CONCRETE MAINTENANCE
10/01/26 MANERI TRAFFIC COLD PATCH MIX 54710 2320291 1,005.94 TOTAL CONCRETE MAINTENANCE 1,005.94
10050554 PAVEMENT MAINTENANCE
10/01/26 MANERI TRAFFIC COLD PATCH 54720 2320291 997.78 09/24/26 CINTAS CORPORATION 6 8/6/26 UNIFORMS FY 26/27 54488 2320220 42.51 10/01/26 RED WING BUSINESS AD SAFETY BOOTS 54725 2320302 255.63 TOTAL PAVEMENT MAINTENANCE 1,295.92
10050555 STORM DRAIN MAINT
09/24/26 CINTAS CORPORATION 6 8/6/26 UNIFORMS FY 26/27 54488 2320220 28.26 10/01/26 COUNTY OF ORANGE FY27 NPDES IMPLEMENTATION AGMT FIXED 54743 2320270 1,229.96 10/01/26 WILLDAN ENGINEERING THRU 8/28/26 - WQMP 16800 MAGNOLIA 54744 6939 640.00 09/24/26 SO CALIF EDISON CO 08/20/26 to 09/20/26 SANDLEWOOD PUMP 54558 2320241 857.64 TOTAL STORM DRAIN MAINT 2,755.86
10050556 TRAFFIC CONTROL
10/01/26 FULL TRAFFIC MAINTEN BARRICADES 54711 2320279 3,097.31 10/01/26 S C SIGNS SUPPLIES STREET SIGN BRACKETS 54687 2320303 1,080.73 10/01/26 S C SIGNS SUPPLIES STREET NAME SIGNS 54692 2320303 1,508.50 TOTAL TRAFFIC CONTROL 5,686.54
10050557 STREET SWEEPING
09/24/26 SCA OF CA, LLC 7/2026 STREET SWEEPING 54393 6868 35,407.69 TOTAL STREET SWEEPING 35,407.69
10050558 RECREATION CENTER
10/01/26 SAKIOKA WHOLESALE NU CENTER MEDIAN SPORTS PARK LANDSCAPING 54737 2320305 655.50 09/24/26 AGUINAGA GREEN, INC TOP SOIL FOR SPORTS PARK FIELDS 54496 6852 962.23 10/01/26 SAKIOKA WHOLESALE NU MEDIAN LANDSCAPING SPORTS PARK 54738 2320305 846.69 09/24/26 ALAN'S LAWNMOWER & G SUPPLIES FOR TREES AT SPORTS PARK 54495 2320212 514.44 10/01/26 HERITAGE LANDSCAPE IRRIGATION REPAIRS-SPORTS PARK 54726 2320281 1,889.78 10/01/26 SAKIOKA WHOLESALE NU CENTER MEDIAN LANDSCAPE-SPORTS PARK 54739 2320305 710.13 09/24/26 HERITAGE LANDSCAPE IRRIGATION PARTS FOR SPORTS PARK 54492 2320227 2,033.74

09/24/26 MERCHANTS LANDSCAPE 7/2026 SPORTS PARK LANDSCAPE MAINT 54542 6859 42,618.77 10/01/26 SAKIOKA WHOLESALE NU MONUMENT FLOWERS-SPORTS PARK 54740 2320305 360.53 10/01/26 SAKIOKA WHOLESALE NU SPORTS PARK PLANTS 54741 2320305 (53.46) 10/01/26 MERCHANTS LANDSCAPE 8/2026 SPORTS PARK LANDSCAPE MAINT 54860 6928 42,618.77 10/01/26 SAKIOKA WHOLESALE NU LANDSCAPE IMPROVEMENTS-SP 54742 2320305 901.31 10/01/26 BEE BUSTERS, INC. BEES IN IRRIGATION BOX AT FIELD 8 54690 2320259 195.00 TOTAL RECREATION CENTER 94,253.43
10060600 FIRE SUPPRESSION
10/01/26 ENTERPRISE FM TRUST 202609 VEHICLE MONTHLY LEASE 54845 6899 12.24 10/01/26 AMAZON CREDIT MEMO FOR RETURN ORGANIZER 54654 6890 (24.69) 10/01/26 AMAZON SCREEN PROTECTORS IPADS 54656 6890 91.60 10/01/26 AT&T MOBILITY 8.9.26-9.8.26 FIRE CELL PHONES 54658 2320256 145.03 10/01/26 AT&T MOBILITY 8.9.26-9.8.26 FIRE BACK UP CELLS 54660 2320258 1,185.31 10/01/26 L.N. CURTIS & SONS FIELD EQUIPMENT - 6" SWIVEL GASKET 54662 2320287 62.85 10/01/26 ORANGE COUNTY TREASU RADIO REPAIR CHIEF SAIKI'S VEHICLE 54663 2320296 50.00 10/01/26 ALLSTAR FIRE EQUIPME V-FORCE 14" LEATHER STRUCTURE BOOTS 54664 2320252 1,263.13 10/01/26 RUTH, JONATHAN REFUND RUTH FOR PM LICENSE RENEWAL 54665 6931 250.00 10/01/26 CITY OF ANAHEIM/METR TABLET COMMAND ADDITIONAL LICENSES 54666 2320265 500.00 10/01/26 PURETEC INDUSTRIAL W DEIONIZED WATER SYSTEM STATION 1 54668 2320300 144.71 10/01/26 WEST END TECH OPTICOM GPS FOR ENGINE 284 54669 2320325 450.00 10/01/26 MARTIN, RUSS REIMBURSEMENT MARTIN PM LICENSE 54783 6925 250.00 10/01/26 INLAND FLEET SOLUTIO APPARATUS MAINTENANCE AND REPAIR - #320 54809 2320283 2,233.85 10/01/26 PURETEC INDUSTRIAL W DEIONIZED WATER SYSTEM STATION 1 54824 2320300 144.71 10/01/26 VERIZON WIRELESS 9.23.26-10.22.26 FIRE AVL TRACKERS 54828 2320324 572.15 TOTAL FIRE SUPPRESSION 7,330.89
10060601 PARAMEDICS
10/01/26 LION TOTAL CARE INC CLEANING/REPAIR TURNOUTS REEVES 54657 6923 157.84 10/01/26 AMAZON WILDLAND BOOTS FOR NEW HIRES 54806 6890 869.90 TOTAL PARAMEDICS 1,027.74
10060602 AMBULANCE SERVICES
10/01/26 AMAZON AMBULANCE PROG ITEMS - MASTER 54621 6890 343.68 10/01/26 AMAZON CREDIT LOCKS/FLASHLIGHTS AMB PROGRAM- 54622 6890 (324.08) 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54623 6922 625.75 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54624 6922 98.60 10/01/26 LIFE ASSIST CREDIT FOR MEDICAL SUPPLIES RETURNED 54626 6922 (98.60) 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54636 6922 486.37 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54637 6922 416.78 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54638 6922 151.71 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54639 6922 2,435.73 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54640 6922 886.65 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54641 6893 983.56 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54642 6893 281.66 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54643 6893 844.98 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54644 6893 163.89 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54645 6893 327.78

10/01/26 CARE AMBULANCE OT PAY PERIOD 16 AMBULANCE SERVICES 54648 6895 176.18 10/01/26 CARE AMBULANCE OT PAY PERIOD 18 AMBULANCE SERVICES 54649 6895 275.76 10/01/26 CARE AMBULANCE 8.1.26-8.31.26 SURGE AMBULANCE SERVICES 54650 6895 20,643.75 10/01/26 AT&T MOBILITY 8.9.26-9.9.26 AMBULANCE CELL PHONES 54659 2320257 93.62 10/01/26 AMBULANCE REFUND WITTMAN REFUND CALOPTIMA SEPTEMBER 54670 2320253 531.71 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54785 6922 411.25 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54786 6922 2,138.57 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54789 6922 2,163.58 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54790 6922 1,981.45 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54791 6922 1,809.25 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54797 6922 187.59 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54799 6922 1,988.17 10/01/26 LIFE ASSIST FIRST AID/MEDICAL SUPPLIES 54800 6922 1,899.38 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54803 6893 105.33 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54804 6893 625.80 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54805 6893 345.83 10/01/26 AMAZON AMBULANCE EQUIPMENT - 54807 6890 324.08 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54821 6893 994.84 10/01/26 BOUND TREE MEDICAL FIRST AID/MEDICAL SUPPLIES 54823 6893 1,498.14 10/01/26 TELEFLEX FUNDING, LL FIRST AID/MEDICAL SUPPLIES 54826 2320318 1,196.25 TOTAL AMBULANCE SERVICES 47,014.99
10060603 FIRE PREVENTION
10/01/26 VCA CODE 8.1.26-8.31.26 FIRE PLAN CHECKS 54646 6936 1,362.25 10/01/26 AT&T MOBILITY 8.9.26-9.8.26 FIRE CELL PHONES 54658 2320256 98.37 10/01/26 LYONS, SCOTT ICC CLASS - REIMBURSEMENT TO SCOTT 54781 6924 320.00 TOTAL FIRE PREVENTION 1,780.62
10060605 DISASTER PREPAREDNESS
10/01/26 AMAZON OPEN HOUSE ITEMS 54651 6890 94.75
10/01/26 AMAZON OPEN HOUSE ITEMS 54652 6890 63.04
10/01/26 AMAZON OPEN HOUSE ITEMS 54653 6890 97.81
10/01/26 AT&T MOBILITY 8.9.26-9.8.26 FIRE CELL PHONES 54658 2320256 46.66 10/01/26 AMAZON OPEN HOUSE ITEMS 54671 6890 90.89
10/01/26 AMAZON OPEN HOUSE ITEMS 54808 6890 18.37
TOTAL DISASTER PREPAREDNESS 411.52
10070700 PATROL
10/01/26 CALIF FORENSIC PHLEB JULY 2026 - BLOOD DRAWS 54813 2320263 2,293.90 10/01/26 STERI CLEAN UNIT 441 - BIOHAZARD CLEANUP 54820 2320315 1,554.85 09/24/26 COUNTY OF ORANGE PRE-BOOKING FORMS 54522 2320221 135.20 09/24/26 AT&T MOBILITY 7/27/26 - 8/26/26 DEPARTMENT CELL PHONES 54531 2320214 2,930.83 10/01/26 OC-CPR.NET CPR/FIRST AID/AED INSTRUCTION 54617 2320295 2,940.00 10/01/26 CALIF FORENSIC PHLEB AUG 2026 - BLOOD DRAWS 54815 2320263 1,966.20 09/24/26 AMAZON DOOR NAME PLATES 54523 6853 41.81
09/24/26 ADAMSON POLICE PRODU RECRUIT VESTS - GOMI, ROBERTS, PHAM 54528 2320211 2,021.67 09/24/26 LASER TECHNOLOGY INC LIDAR DEVICE 54532 2320229 2,376.19 09/24/26 AMAZON DEPARTMENT SUPPLIES 54526 6853 314.14

09/24/26 STERICYCLE INC SEPT 2026 - WASTE PICKUP 54527 2320243 150.90 09/24/26 CINTAS CORPORATION 2 FIRST AID KIT REFILLS 54529 2320219 295.42 10/01/26 V&V MANUFACTURING, I NEW BADGES - CORP/SGT/LT/CAPT 54831 2320322 609.38 TOTAL PATROL 17,630.49
10070701 INVESTIGATION
09/24/26 DEPARTMENT OF JUSTIC JULY 2026 - LIVE SCANS 54524 2320222 87.00 10/01/26 COUNTY OF ORANGE SEPT 2026 - AFIS 54833 2320271 1,881.00 09/24/26 AMAZON 4GB FLASH DRIVES - CSI 54530 6853 54.23 09/24/26 OCTMA JULY 2026 - JUNE 2027 DUES 54533 2320233 100.00 09/24/26 AMAZON 256 GB FLASH DRIVE - CSI 54534 6853 293.61 TOTAL INVESTIGATION 2,415.84
10070702 TRAFFIC
10/01/26 ALL CITY MANAGEMENT 8/16/26-8/29/26 CROSSING GUARDS 54818 6889 4,883.80 10/01/26 ALL CITY MANAGEMENT 8/30/26-9/12/26 CROSSING GUARDS 54817 6889 10,497.75 TOTAL TRAFFIC 15,381.55
10070703 CANINE
10/01/26 COMMUNITY VETERINARY 7/6/26-7/8/26 - BOARDING 54838 2320267 198.00 10/01/26 COMMUNITY VETERINARY 6/16/26-6/20/26 - BOARDING 54839 2320267 426.00 10/01/26 COMMUNITY VETERINARY 8/17/26 - BOARDING 54836 2320267 159.00 TOTAL CANINE 783.00
10070707 CRIME PREVENTION
10/01/26 AMAZON CRIME PREVENTION SUPPLIES 54830 6890 96.73 10/01/26 AMAZON CRIME PREVENTION SUPPLIES 54819 6890 173.98 TOTAL CRIME PREVENTION 270.71
10070708 RANGE
10/01/26 CITY OF WESTMINSTER JULY 2026 - RANGE USE - 7/3, 7/8M 7/13 54816 2320266 1,380.00 10/01/26 ADKINS, BERTRUM A. SEPT 2026 - RANGEMASTER SERVICES 54827 6888 1,000.00 TOTAL RANGE 2,380.00
10080800 RECREATION CENTER
09/24/26 VERIZON WIRELESS 8/2 - 9/1/26 RECREATION CENTER WI FI 54399 2320246 45.02 TOTAL RECREATION CENTER 45.02
10080801 ATHLETICS
09/24/26 VERIZON WIRELESS 8/2 - 9/1/26 RECREATION CENTER WI FI 54399 2320246 37.71 10/01/26 MANHATTAN STITCHING SECOND PLACE SPRING AWARDS FOR ADULT 54618 2320292 947.09 10/01/26 MANHATTAN STITCHING CHAMPIONSHIP SHIRTS FOR SPRING 2026 54619 2320292 1,759.58 10/01/26 D&B UMPIRES UMPIRE FEES FOR GAMES SCHEDULED 9/2/26- 54771 2320272 1,724.00 TOTAL ATHLETICS 4,468.38
10080802 FIELD OPERATIONS
10/01/26 MANHATTAN STITCHING UNIFORM SAMPLE 54647 2320292 32.63 TOTAL FIELD OPERATIONS 32.63
10080810 SENIOR & COMM CENTER
10/01/26 S.C. GYM REPAIR SC FITNESS ROOM MONTHLY SERVICE & 54629 2320304 438.37 09/24/26 VERIZON WIRELESS 9/2 - 10/1/26 SENIOR CENTER CELL PHONES 54400 2320247 85.03 10/01/26 S.C. GYM REPAIR SC FITNESS ROOM MONTHLY SERVICE & 54630 2320304 347.00 10/01/26 SIEGEL, THEODORE MOVIE TALK SEPTEMBER 2026 54672 6933 150.00

TOTAL SENIOR & COMM CENTER 1,020.40
10080820 CONTRACT CLASSES
09/24/26 REC SVCS REFUND CLASS REFUND 54430 2320237 56.00 09/24/26 REC SVCS REFUND REFUND FOR 211071-A1 54512 2320236 130.00 09/24/26 REC SVCS REFUND REFUND FOR 232151-A1 54520 2320235 124.00 TOTAL CONTRACT CLASSES 310.00
10080823 PARK PATROL
09/24/26 VERIZON WIRELESS 8/2 - 9/1/26 RECREATION CENTER WI FI 54399 2320246 51.42 TOTAL PARK PATROL 51.42
10095000 GENERAL FUND
10/01/26 PRO SPORTS PRODUCTS REPLACEMENT DECALS ON BASKETBALL 54691 2320298 1,260.00 TOTAL GENERAL FUND 1,260.00
10098001 GENERAL FUND
09/24/26 RHA LANDSCAPE PARKS & COMMUNITY SERVICES MASTER PLAN 54587 2320238 81,060.00 TOTAL GENERAL FUND 81,060.00
11010050 ISF IS ADMIN CAPITAL
10/01/26 ADVANCED OFFICE / IN CONTRACT 41194 OVERAGE 6/18 - 7/17/26 54612 2320327 7.04 10/01/26 ADVANCED OFFICE / IN CONTRACT 41635 OVERAGE 6/3 - 7/2/26 54613 2320327 99.53 10/01/26 ADVANCED OFFICE / IN COPIER LEASE 7/15 - 8/15/26 54713 2320326 1,955.96 10/01/26 ADVANCED OFFICE / IN CONTRACT 41290 OVERAGE 6/26 - 7/25/26 54611 2320327 1,191.41 10/01/26 THOMSON REUTERS WEST THOMAS REUTERS AUG 1-31 2026 54581 2320320 655.00 10/01/26 AMAZON AMAZON CREDIT MEMO AUG 11 2026 54677 6890 (54.54) 10/01/26 CIVIC PLUS, LLC CIVICPLUS ANNUAL SUB OCT 1 2026 - SEPT 30 54438 6896 30,866.36 10/01/26 ADVANCED OFFICE / IN CONTRACT 41635 OVERAGE 7/3 - 8/2/26 54614 2320327 75.76 10/01/26 ADVANCED OFFICE / IN CONTRACT 41585 OVERAGE 7/6 - 8/5/25 54615 2320327 47.49 10/01/26 ADVANCED OFFICE / IN CONTRACT 41194 OVERAGE 7/18 - 8/17/26 54610 2320327 15.83 10/01/26 ADVANCED OFFICE / IN RICOH STAPLE SET 54608 2320327 62.38 10/01/26 ADVANCED OFFICE / IN CONTRACT OVERAGE 7/1 - 7/31/26 54609 2320327 21.00 10/01/26 VERITONE, INC VERITONE SUBSCRIPTION 9/20/26-9/19/27 54586 6937 5,500.00 10/01/26 ADVANCED OFFICE / IN COPIER LEASES 8/15 - 9/15/26 54714 2320326 6,198.80 10/01/26 CIVIC PLUS, LLC CIVICPLUS LIVE MEETING AUG 31 2026 - MARCH 54439 6896 2,038.77 10/01/26 ADVANCED OFFICE / IN CONTRACT 41290 OVERAGE 7/26 - 8/25/26 54607 2320327 359.85 10/01/26 THOMSON REUTERS WEST THOMAS REUTER SEPT 1-30 2026 54582 2320320 687.75 10/01/26 ADVANCED OFFICE / IN CONTRACT M9483 OVERAGE 8/1 - 8/31/26 54605 2320327 44.32 10/01/26 ADVANCED OFFICE / IN CONTRACT 41635 OVERAGE 8/3 - 9/2/26 54606 2320327 219.90 09/24/26 ON3SPATIAL, LLC GIS SUPPORT SERVICES SEPT 7 54192 6864 1,000.00 10/01/26 TPX COMMUNICATIONS CITY PHONE SERVICE 9/9 - 10/08/26 54602 2320321 5,577.83 10/01/26 ADVANCED OFFICE / IN CONTRACT 41585 OVERAGE 8/6 - 9/5/26 54604 2320327 63.50 10/01/26 CIVIC PLUS, LLC CIVICPLUS SSL SETUP 54440 6896 158.00 10/01/26 FRONTIER COMMUNICATI 9/15 - 10/14/26 DIRECT DIAL PHONE NUMBERS 54550 2320275 267.79 10/01/26 ADVANCED OFFICE / IN CONTRACT 41194 OVERAGE 8/18 - 9/17/26 54603 2320327 48.66 10/01/26 CMS SOLUTIONS, INC CMS WORK ORDER 9/18/26 - REC CENTER DIAL 54673 6897 340.00 10/01/26 CMS SOLUTIONS, INC CMS WORK ORDER 9/15/26 FIXED OUTBOUND 54674 6897 85.00 10/01/26 ADVANCED OFFICE / IN COPIER LEASES 9/15 - 10/15/26 54715 2320326 4,129.99 10/01/26 ADVANCED OFFICE / IN CONTRACT OVERAGE 8/26 - 9/25/26 54716 2320327 1,345.02

TOTAL ISF IS ADMIN CAPITAL 63,008.40
11110000 ISF GB CITY HALL
09/24/26 CINTAS CORPORATION 6 8/6/26 UNIFORMS FY 26/27 54488 2320220 90.07 10/01/26 OC BEE GUY BEEHIVE REMOVAL 54712 2320294 100.00 09/24/26 CALIFORNIA WATERS, L 8/2026 CHEMICAL BILLING WATER FEATURE 54545 2320218 69.89 10/01/26 VERIZON SELECT SERVI 7/31 - 8/29/26 LD SELECT 54547 2320323 16.23 10/01/26 SMARDAN SUPPLY CO. FIRE SERVICE BACKFLOW BOLT KIT 54682 6934 45.59 10/01/26 SMARDAN SUPPLY CO. REPLACEMENT DCDA BACKFLOW FOR CITY 54685 6934 5,249.57 TOTAL ISF GB CITY HALL 5,571.35
11150000 ISF GB CITY YARD
10/01/26 GRAINGER, INC. DANGER SIGN FOR TRASH INCLOSURE 54232 6901 55.60 10/01/26 AT&T 8/22 - 9/21/26 FS#2/CY/REC PHONES 54722 2320254 147.05 TOTAL ISF GB CITY YARD 202.65
11160001 ISF GB FS1
10/01/26 FRONTIER COMMUNICATI 7/13 - 8/12/26 & 9/13-10/12/26 FS#1 PHONE 54553 2320277 563.93 10/01/26 FRONTIER COMMUNICATI 9/22 - 10/21/26 FS#1 CKT 54717 2320278 152.69 10/01/26 SO CALIF EDISON CO 8/28/26 - 9/28/26 FIRE STATION 1 54814 2320313 3,681.40 TOTAL ISF GB FS1 4,398.02
11160002 ISF GB FS2
10/01/26 AT&T 7/20-8/19/26 & 8/20-9/19/26 CKT METRO 54718 2320254 117.38 10/01/26 SO CALIF EDISON CO 08/21/26 to 09/21/26 FIRE STATION NO. 2 54588 2320310 1,402.96 10/01/26 AT&T 8/22 - 9/21/26 FS#2/CY/REC PHONES 54722 2320254 147.05 TOTAL ISF GB FS2 1,667.39
11170000 ISF GB POLICE DEPARTMENT
10/01/26 AT&T MOBILITY 7/27 - 8/26/26 PD MDC 54616 2320255 1,104.92 09/24/26 COUNTY OF ORANGE AUG 2026 - OCATS 54525 2320221 1,374.20 10/01/26 FRONTIER COMMUNICATI 9/7 - 10/6/26 JAIL PHONE 54549 2320274 157.21 09/24/26 PACIFIC COAST REFRIG POLICE HVAC REPAIRS 54502 2320234 1,773.00 10/01/26 FRONTIER COMMUNICATI 9/13 - 10/12/26 PD DISPATCH 54552 2320276 141.58 TOTAL ISF GB POLICE DEPARTMENT 4,550.91
11180000 ISF GB REC CENTER
10/01/26 OC BEE GUY WASP REMOVAL 54719 2320294 320.00
09/24/26 PROFESSIONAL PLUMBIN PUMBER SERVICE-SOCCER BATHROOM 54500 6866 585.00 10/01/26 AT&T 8/22 - 9/21/26 FS#2/CY/REC PHONES 54722 2320254 147.05 TOTAL ISF GB REC CENTER 1,052.05
11180001 ISF GB SR CENTER
09/24/26 PACIFIC COAST REFRIG SENIOR CENTER HVAC REPAIRS 54503 2320234 324.00 10/01/26 SO CALIF EDISON CO 8/28/26 - 9/28/26 SENIOR CENTER 54812 2320312 6,024.89 TOTAL ISF GB SR CENTER 6,348.89
11180051 ISF GB R&C CAPITAL
10/01/26 C2 IMAGING REPROGRAPHICS CITYWIDE SPORTS COURTS 54600 2320262 393.27 TOTAL ISF GB R&C CAPITAL 393.27
11210052 ISF FL ADMIN CAPITAL
10/01/26 ENTERPRISE FM TRUST 202609 VEHICLE MONTHLY LEASE 54845 6899 38.86 TOTAL ISF FL ADMIN CAPITAL 38.86

11250001 PW - FLEET MGMT
09/24/26 CINTAS CORPORATION 6 8/6/26 UNIFORMS FY 26/27 54488 2320220 76.64 09/24/26 SC FUELS (CARDS) MONTHLY CARDLOCK AUGUST 54499 6867 39,321.70 09/24/26 RINCON TRUCK CENTER, PART FOR UNIT 370 54497 2320239 113.78 09/24/26 WILCOX SUPPLY INC TIRE PARTS 54498 2320248 403.14 TOTAL PW - FLEET MGMT 39,915.26
11250052 ISF FL PW CAPITAL
10/01/26 ENTERPRISE FM TRUST 202609 VEHICLE MONTHLY LEASE 54845 6899 827.08 TOTAL ISF FL PW CAPITAL 827.08
11260052 ISF FL FD CAPITAL
10/01/26 ENTERPRISE FM TRUST VEH #371 - FD VIN# 1GCPTCEK9T1241247 54841 6898 51,002.43 10/01/26 ENTERPRISE FM TRUST 202609 VEHICLE MONTHLY LEASE 54845 6899 170.91 TOTAL ISF FL FD CAPITAL 51,173.34
11270052 ISF FL PD CAPITAL
10/01/26 ENTERPRISE FM TRUST 202609 VEHICLE MONTHLY LEASE 54845 6899 294.20 TOTAL ISF FL PD CAPITAL 294.20
11350053 ISF EQ PW R&C CAPITAL
10/01/26 SNAP-ON INDUSTRIAL CAPITAL REPLACE FLEET BRAKE LATHE 54723 2320308 16,142.36 TOTAL ISF EQ PW R&C CAPITAL 16,142.36
11370053 ISF EQ PD R&C CAPITAL
10/01/26 ADAMSON POLICE PRODU VESTS - B. RODDY/C. HEREDIA 54825 2320250 1,946.63 TOTAL ISF EQ PD R&C CAPITAL 1,946.63
11400411 SELF INSURANCE
10/01/26 LIEBERT, CASSIDY & W LIT #FO030-00034 54627 6921 24,048.30 10/01/26 LIEBERT, CASSIDY & W LIT #FO030-00034 54628 6921 37,331.50 09/24/26 TEMPORARY STAFFING ADMIN TEMPORARY STAFFING WE 08/23/2026 53852 6870 1,729.92 10/01/26 TEMPORARY STAFFING TEMPORARY STAFFING SERVFICES WE 8/30/26 53962 6935 1,729.92 10/01/26 CALIF JOINT POWERS I 26/27 - POLLUTION LIABILITY INSURANCE 54125 6894 16,756.00 TOTAL SELF INSURANCE 81,595.64
11400430 SELF INSURANCE
10/01/26 THE LINCOLN NATIONAL OCTOBER 2026 LIFE INSURANCE/LTD/ADD/EAP 54706 2320319 4,033.80 TOTAL SELF INSURANCE 4,033.80
23030310 CDBG CODE ENFORCEMENT
09/24/26 AT&T MOBILITY 7/27-8/26/26 CELL PHONES & IPADS 54174 2320213 46.66 TOTAL CDBG CODE ENFORCEMENT 46.66
23130324 FVHA AFFORDABLE
09/24/26 STRADLING YOCCA CARL LEGAL SERVICES-AFFORDABLE HOUSING 54518 2320244 220.00 TOTAL FVHA AFFORDABLE 220.00
23130326 FVHA NAVIGATION CENTER
09/30/26 CITY OF GARDEN GROVE NAVIGATION CENTER-FY 26.27 54810 6713 381,428.12 TOTAL FVHA NAVIGATION CENTER 381,428.12
30095300 CAPITAL IMP - FACILITIES
09/24/26 INTERWEST CONSULTING CREDIT INVOICE # 1722269 OVERPYMT 52896 6858 (3,690.00) 09/24/26 INTERWEST CONSULTING JUL 2026 - CM/INSP CH & PD 54565 6858 420.00 09/24/26 INTERWEST CONSULTING AUG 2026 - CM INSP CH LOBBY RESTROOMS 54484 6858 4,500.00

09/24/26 C2 IMAGING REPROGRAPHICS COM IMPROVE NEWHOPE & 54578 2320217 718.92 09/24/26 C2 IMAGING REPROGRAPHICS CH LOBBY RESTROOMS 54442 2320217 2,075.67 TOTAL CAPITAL IMP - FACILITIES 4,024.59
30095301 CAPITAL IMP - ROAD REHAB
09/24/26 ONYX PAVING COMPANY JUL 2026 - PP 1 RES ROADWAY REHAB B4 54521 6865 840,341.00 09/24/26 CONVERSE CONSULTANTS AUG 2026 - MATERIALS TESTING B4 54485 6855 14,511.13 10/01/26 DMS CONSULTANTS INC 7/15-9/14/26 DESIGN B5 & B6 54598 2320273 34,820.00 TOTAL CAPITAL IMP - ROAD REHAB 889,672.13
30095302 CAPITAL IMP - PAVEMENT REHAB
10/01/26 C2 IMAGING REPROGRAPHICS NEWHOPE WARD ELLIS 54441 2320262 3,603.66 10/01/26 DMS CONSULTANTS INC 7/01-9/14/26 DES EUCLID SB LANE STRIPING 54597 2320273 8,562.50 TOTAL CAPITAL IMP - PAVEMENT REHAB 12,166.16
40000000 FVPFA DEBT SERVICE
10/07/26 U.S. BANK, N.A. 2016A LRB DBT SVC PMT P&I 54811 6940 735,574.61 TOTAL FVPFA DEBT SERVICE 735,574.61
50000000 WF NON-DEPARTMENTAL
10/01/26 HOTAK, AMIR UTILITY REFUND - 8/24/25 53990 2320282 9.75 10/01/26 BRIAN CHERNEY UTILITY REFUND - 8/6/26 54730 2320260 78.36 10/01/26 PRIMROSE, TRACY UTILITY REFUND - 8/12/26 54731 2320297 67.89 10/01/26 LINDA STEARNS-PLOTKI UTILITY REFUND - 8/11/26 54732 2320289 36.95 10/01/26 LY, DINH UTILITY REFUND - 8/16/26 54733 2320290 20.77 10/01/26 BUI, TOMMY UTILITY REFUND - 8/18/26 54734 2320261 8.96 10/01/26 STULPIN, JACQUELINE UTILITY REFUND - 8/19/26 54735 2320316 7.19 10/01/26 KAWATA, SEAN UTILITY REFUND - 8/20/26 54736 2320284 5.42 TOTAL WF NON-DEPARTMENTAL 235.29
50040403 WF UTILITY BILLING
09/24/26 TEMPORARY STAFFING TEMP - FINANCE 9/14-9/20/26 54546 6870 2,128.72 09/24/26 INFOSEND, INC AUG 2026 UTILITY BILLING PLUS INSERTS 54564 2320228 7,822.82 10/01/26 TEMPORARY STAFFING TEMP - FINANCE 9/21-9/27/26 54769 6935 2,128.72 TOTAL WF UTILITY BILLING 12,080.26
50050570 WF WTR PROD. OPNS
10/01/26 LIFECOM AIR MONITOR 54601 2320288 80.00
09/24/26 CINTAS CORPORATION 6 8/6/26 UNIFORMS FY 26/27 54488 2320220 24.54 10/01/26 HARRINGTON INDUSTRIA SKID INVENTORY 54679 2320280 2,701.03 09/24/26 HARRINGTON INDUSTRIA SKID INVENTORY 54557 2320226 3,242.11 10/01/26 HARRINGTON INDUSTRIA PRESSURE GAUGES 54680 2320280 3,254.59 09/24/26 GRAINGER, INC. PRESSURE SWITCH FOR MWD VAULT 54483 6857 84.34 09/24/26 GRAINGER, INC. REDUCER FOR GAUGES 54537 6857 22.55 09/24/26 MUNICIPAL WATER DIST AUG 2026 - IMPORT WATER RTS 54554 2320230 6.85 09/24/26 SO CALIF EDISON CO 08/10/26 to 09/08/26 RES# 2 & WELLS 54538 2320240 120,642.69 TOTAL WF WTR PROD. OPNS 130,058.70
50050571 WF DISTRIBUTION SYSTEM
09/24/26 FERGUSON ENTERPRISES 6" HYMAX COUPLING 54509 2320225 429.56 09/24/26 FERGUSON ENTERPRISES 8" GATE VALVES 54508 2320225 3,289.69 09/24/26 CINTAS CORPORATION 6 8/6/26 UNIFORMS FY 26/27 54488 2320220 57.31

09/24/26 YO FIRE SERVICE BRASS 54105 2320249 2,363.94
09/24/26 YO FIRE SERVICE BRASS 54106 2320249 877.48
09/24/26 GRAINGER, INC. VALVE AND HYDRANT MAINTENANCE 54107 6857 1,026.72 09/24/26 UNDERGROUND SERVICE UNDERGROUND SAFETY BOARD 54103 2320245 112.14 09/24/26 UNDERGROUND SERVICE UNDERGROUND SERVICE ALERT 54104 2320245 297.50 09/24/26 OMEGA INDUSTRIAL SUP MAINTENANCE 54507 6863 680.39 09/24/26 YO FIRE SERVICE COPPER 54252 2320249 3,086.33
09/24/26 INFOSEND, INC AUG 2026 UTILITY BILLING PLUS INSERTS 54564 2320228 18.14 TOTAL WF DISTRIBUTION SYSTEM 12,239.20
50050572 WF WTR QUAL & TREATMENT
10/01/26 SWEETNER PROD SALT FOR SEPTEMBER 2026 54729 2320317 3,116.69 10/01/26 SKYLINE CHEMICAL COR FLUORIDE FOR WATER 2026-2027 54556 2320307 13,346.00 10/01/26 SIERRA ANALYTICAL LA WATER QUALITY TESTING SERVICES FY 26/27 54683 2320306 6,240.00 TOTAL WF WTR QUAL & TREATMENT 22,702.69
50095001 WATER FUND CAPITAL PROJECTS
09/24/26 INTERWEST CONSULTING JUL 2026 - DESIGN RESERVOIRS NOS. 1 & 2 54566 6858 432.00 TOTAL WATER FUND CAPITAL PROJECTS 432.00
50150580 SF SEWER MAINTENANCE
09/24/26 CINTAS CORPORATION 6 8/6/26 UNIFORMS FY 26/27 54488 2320220 23.23 10/01/26 KEN'S LOCKSMITHERY DUPLICATE KEYS / PARTS 54599 2320286 414.30 TOTAL SF SEWER MAINTENANCE 437.53
50195000 SEWER FUND
10/01/26 PSOMAS 6/26/26-7/23/26 CM INSP '25 SEWER REHAB 54568 2320299 41,614.34 09/24/26 CONVERSE CONSULTANTS JUL 2026 - MATERIALS TESTING '25 SEWER 54576 6855 4,084.00 10/01/26 PSOMAS 7/24/26-8/20/26 CM INSP '25 SEWER REHAB 54569 2320299 26,025.02 09/24/26 CONVERSE CONSULTANTS AUG 2026 - MATERIALS TESTING '25 SEWER 54577 6855 1,000.00 TOTAL SEWER FUND 72,723.36
60030301 CUSTODIAL - BLDG SAFETY
09/24/26 OC SANITATION DISTRI AUG 2026 SEWER CONNECTION FEES 54486 2320232 8,811.42 TOTAL CUSTODIAL - BLDG SAFETY 8,811.42
TOTAL $3,753,459.96

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: October 20, 2026
Members of the City Council
SUBJECT: Public Hearing and Introduction: Development Agreement Phase 1 and Phase 2; and Phase 1 Density Bonus and Affordable Housing Agreement (16800 Magnolia Street and 9025-9063 Recreation Circle)
Three-Year Strategic Goals
☒ Cultivate a welcoming culture and safe environment that makes our community “A Nice Place to Live”
☐ Ensure long-term fiscal stability by evaluating processes and attract and retain revenue producing businesses/opportunities
☐ Attract and retain quality staff through best practices and trends ☐ Maintain, build, plan for, and modernize infrastructure to support growth and future needs of the city
☐ Not applicable

EXECUTIVE SUMMARY
Holland Partner Group (“HPG”) submitted a request for a Development Agreement (“DA”); and, Precise Plan No. 580 requires Density Bonus and Affordable Housing Agreement (“DBAHA”). The approved development is for a two-phased mixed-use development on

6.87 acres, with 657 residential apartment units and 4,460 square feet of ground-floor commercial use within two (2) seven-story buildings partially surrounding two (2) seven-story parking structures with rooftop parking located at 16800 Magnolia Street and 9025-9063 Recreation Circle (“Project”). The DA affects the entire 6.87-acre Site; however, because the Project will be developed in two phases by separate developer entities, two (2) DBAHAs are necessary. The DA and Phase 1 DBAHA are presented to the City Council for consideration and action on this action item. The Project “Site” is comprised of the “North Lot,” which is the subject of the Phase 1 development and Phase 1 DBAHA, and later the “South Lot,” which will be the subject of the Phase 2 development and Phase 2 DBAHA.

On June 11, 2025, the Planning Commission approved (i) Precise Plan No. 580 (“PP 580”) approved by the Planning Commission by Resolution No. 25-09, and (ii) Addendum to the Fountain Valley General Plan Update EIR and Mitigation Monitoring and Reporting Plan (“MMRP”) by Resolution No. 25-08; the actions were appealed to the City Council.

On July 15, 2025, by Resolution No. 9960, the City Council denied the appeal of the Project, affirmed the Planning Commission’s approval of PP 580 and the Addendum, and applied the City’s Inclusionary Housing Program to development of the Project (together, “Entitlement”).

A development agreement is a post-entitlement implementation tool authorized by Government Code Sections 65864 through 65869.5 and is intended to facilitate the orderly development of a previously approved project. As a result of the density bonus granted under the Entitlement, state and local density bonus law, Government Code Section 65915 and

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

FVMC Chapter 21.08.050(a) (together, “DBL”) require 78 Affordable Units within the Project.

The DBAHAs will implement the terms and conditions for development, operation, maintenance, and management of the 78 Affordable Units for the 55-year Affordability Period.

There will be 39 Affordable Units in each phase, with 39 in the Phase 1 North Lot development and 39 in the Phase 2 South Lot development.

On July 23, 2026, Magnolia I Owner, LLC acquired the North Lot from the third-party seller and as the “Phase 1 Owner” for the Phase 1 development; a separate entity, HPG Magnolia II, LLC, a Washington limited liability company, is the owner of the South Lot for the second phase of the Project (“Phase 2 Owner”). Both owners are parties to the DA, and each holds the Project Entitlement for their respective phases of the Project.

The City of Fountain Valley and both Magnolia I Owner, LLC (North Lot owner), and HPG Magnolia II, LLC (South Lot owner) are the parties to the DA for the overall Project on the Site. The City and Phase 1 Owner are parties to the Phase 1 DBAHA for development of the North Lot, first phase of the Project. The sole member of the Phase 1 Owner entity under the Phase 1 DBAHA is Magnolia I Investor, LLC, a separate entity.

In addition, the North Lot and Phase 1 Project are the subject of two (2) operating agreements, (1) the “Owner” Operating Agreement for Magnolia I Owner, LLC, and (2) the “Investor” Limited Liability Operating Agreement of Magnolia I Investor, LLC, each dated and effective as of July 22, 2026. For the Investor Operating Agreement, (a) PL Magnolia Member, LLC is a limited member (an affiliate of Pacific Life Insurance Company, i.e., “PL”); and (b) two HPG entities are named as limited members: (i) HPG Magnolia, LLC, and (ii) HPG Magnolia Promote, LLC. HPG Magnolia, LLC is responsible for overseeing and administering the dayto-day business in accordance with a business plan, budget, and guidelines or policies approved by a three-member Investment Committee comprising two PL entities and one HPG entity. The named “Manager” is Holland Partner Group Management, Inc.

On August 12, 2026, the Planning Commission voted 5-0 approving Resolution No. 26-11 recommending the City Council approve the Development Agreement for development of the two-phased 16800 Magnolia Mixed-Use Project. The DA is included as Attachment No. 2 to this staff report and presented for City Council review and action.

Implementation of the DBAHAs is a required condition of approval of PP 580 for the Project.

The Phase 1 DBAHA for the North Lot of the Project is included as Attachment No. 4 to this staff report and presented for City Council review and action through the City Council Resolution, Attachment No. 3. The DBAHA for the Phase 2 South Lot has not been prepared yet but is anticipated to follow in form and content the Phase 1 DBAHA.

Staff recommends that the City Council conduct a public hearing and introduce the attached Ordinance approving the DA, and adopt a Resolution approving the Phase 1 DBAHA for the development of Phase 1 on the North Lot of the Project, located at 16800 Magnolia Street and 9025-9063 Recreation Circle.

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

DISCUSSION
Development Agreement (DA)
On June 11, 2025, the Planning Commission adopted Resolution No. 25-09 approving PP 580 and adopted Resolution No. 25-08 approving an Addendum to the certified General Plan EIR. PP 580 approved the development of a mixed-use development consisting of 657 residential apartment units and 4,460 square feet of ground-floor commercial use within two (2) seven-story buildings partially surrounding two (2) seven-story parking structures with rooftop parking located at 16800 Magnolia Street and 9025-9063 Recreation Circle.

On July 15, 2025, the City Council denied an appeal of the Project and adopted Resolution No. 9960 affirming the Planning Commission’s approval of PP 580 and approving the CEQA Addendum and MMRP. The Project is therefore fully entitled, and the proposed Development Agreement is a post-entitlement implementation tool to vest development rights, provide regulatory certainty, and establish agreed-upon obligations among the City, Phase 1 Owner, and Phase 2 Owner.

The proposed DA is a post-entitlement implementation tool authorized by Government Code Sections 65864 through 65869.5 and is intended to facilitate the orderly development of a previously approved project. The Planning Commission and City Council have already approved the Project through PP 580 and the adoption of a California Environmental Quality Act (“CEQA”) Addendum and MMRP, thereby establishing the Project’s land-use, density, intensity, and environmental compliance framework. Accordingly, the DA does not constitute a reconsideration of those approvals, but rather provides a contractual framework governing how the Project will be implemented in two (2) phases over time.

A central feature of the DA is the establishment of a 10-year term, which provides Phase 1 Owner and Phase 2 Owner, respectively, with a defined period to implement the Project, both Phase 1 and Phase 2, while preserving the City’s long-term discretion. Any extension of the DA would require mutual consent, City Council consideration, and action by ordinance, ensuring continued legislative oversight. The DA does not grant any vested right to an extension, thereby maintaining the City’s authority over future land-use decisions.

The DA vests each Phase 1 Owner and Phase 2 Owner with the right to develop the respective Phase 1 and Phase 2 Project in accordance with the approved Development Plan, including PP 580, Conditions of Approval, the CEQA Addendum and MMRP, and the DBAHAs. This vesting provision is essential to provide regulatory certainty necessary for financing and construction of large-scale development. At the same time, the DA preserves the City’s fundamental police powers by allowing the application of subsequently adopted regulations necessary to protect public health, safety, and welfare, as well as compliance with state and federal law. The DA also retains the City’s authority to conduct additional environmental review under CEQA if warranted by project changes or new information. The DA’s framework is consistent with California law and avoids any unlawful delegation of governmental authority.

The DA describes the Project, which will be developed in two (2) phases, and provides the Phase 1 Owner and the Phase 2 Owner, respectively, with flexibility to determine the timing and sequencing of construction based on market conditions and financing considerations.

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

This approach is consistent with established case law and standard practice for development agreements. The DA includes an important safeguard requiring that no permits for Phase 2 be issued unless a Phase 2 DBAHA has been approved and executed, and the Memorandum of Agreement and City Covenants shall have been recorded as senior, non-subordinate encumbrances against the South Lot for Phase 2 development. This ensures that affordable housing obligations, 39 Affordable Units within Phase 1 and 39 Affordable Units within Phase 2, remain enforceable on a phase-by-phase basis.

Affordable housing requirements are governed by each applicable DBAHA, which establishes unit counts, income and affordable rent restrictions, affordability periods, management and maintenance standards, insurance requirements, and compliance mechanisms. Under the DA’s order-of-precedence provision, the applicable DBAHA controls over the DA and Existing Regulations in the event of a conflict. Additionally, all affordability covenants survive the expiration or termination of the DA, ensuring long-term compliance with state and local housing laws, the DBL, and the Inclusionary Housing Program, and the preservation of affordable rental units that require the 55-year Affordability Period.

From a fiscal perspective, the DA includes a negotiated fire protection payment totaling $750,000, allocated between the two (2) phases of development in implementation of Condition #153 of PP 580, which states, “The applicant will act in good faith discussions with the Fire Department to address any fire impact assessments. If applicable, such assessments will be brought back to the Planning Commission and City Council for review and approval. This payment provides a clear and enforceable contribution to public services while establishing cost certainty for the Phase 1 Owner and the Phase 2 Owner, respectively.

The DA further specifies that this payment constitutes the respective Phase 1 Owner’s and Phase 2 Owner’s sole obligation with respect to fire protection fees, except in limited circumstances involving material project modifications. In addition to this payment, both phases of the Project are expected to generate ongoing fiscal benefits through property tax, sales tax, and economic activity.

The DA also includes standard provisions related to periodic review, transfers, and indemnification. Consistent with Government Code Section 65865.1, the City is required to conduct annual reviews to assess the Phase 1 Owner’s and Phase 2 Owner’s good faith compliance with the DA. These procedures provide an ongoing accountability mechanism and allow the City to initiate modification or termination, if necessary. The DA permits assignment or transfer of interests, provided that successors assume all applicable obligations, ensuring that requirements run with the land while allowing flexibility for financing and ownership changes. Indemnification provisions require Phase 1 Owner and Phase 2 Owner, respectively, to defend and hold the City harmless from legal challenges, thereby protecting public resources.

The DA is also consistent with the Housing Accountability Act (Government Code Section 65589.5), as it does not reduce the number of residential units, alter density, or impose new constraints that would conflict with the approved Project. Instead, it facilitates implementation of an approved housing development by providing regulatory certainty and a clear framework for execution.

Overall, the DA implements the previously approved Entitlement while protecting the City’s regulatory authority. It provides certainty to the Phase 1 Owner and the Phase 2 Owner, respectively, ensures the enforceability of affordable housing obligations, establishes clear

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

fiscal contributions, and incorporates standard administrative and legal safeguards. As such, the DA is consistent with applicable state law, including development agreement statutes, CEQA, the Housing Accountability Act, the DBL, and the Inclusionary Housing Program, and represents a reasonable and defensible framework for Project implementation.

Phase 1 DBAHA
The California Density Bonus Law, Government Code Section 65915, et seq. and Fountain Valley Municipal Code (FVMC), Chapter 21.08.050(a) (together, “DBL”), provide that in consideration for grant of a density bonus and incentives and waivers to facilitate feasibility of development sought by applicants, the owners of residential development projects must include specified levels of covenanted affordable housing. Further, Ordinance No. 1604 adopted on December 19, 2023, by the City Council approved, among other provisions, amendment of the FVMC, adding Chapter 21.17, et seq. called the Inclusionary Housing Program, which requires fifteen percent (15%) of all new residential development projects to be covenanted for Low Income (or below) and available at an affordable housing cost, as applicable, for rental or ownership units. The 15% total may be achieved by on-site development of the required number of affordable units, or using a combination of on-site units and payment of In-Lieu Fees. Both the DBL and Inclusionary Housing Program require that the required Affordable Units be subject to recorded affordability restrictions, conditions, and covenants as set forth in an agreement between the City and the owner/developer, i.e., a density bonus affordable housing agreement.

As noted above, on July 23, 2026, Magnolia I Owner, LLC, as Phase 1 Owner and as “Developer” under the Phase 1 DBAHA, acquired the North Lot for development of the Phase 1 Site. The original developer entity, HPG, submitted an application for a land use entitlement to construct the Project on the Site. The 657 residential units include 515 base units and 142 density-bonus units, for a density bonus of 27.5 percent. The overall Project shall reserve 15 percent of the base units, i.e., 78 units total on-site Affordable Units for tenancy by qualified Low-Income Households at an Affordable Rent for the 55-year Affordability Period. There will be 39 Affordable Units within Phase 1 on the North Lot, and 39 Affordable Units within Phase 2 on the South Lot. Tenants of the “Affordable Units” must qualify as “Low Income” households earning less than 80 percent of Orange County area median income (“AMI”) and will pay a monthly “Affordable Rent” set by Health and Safety Code Section 50053 (at 30% of 60% AMI).

At its regularly scheduled meeting on June 11, 2025, the Planning Commission adopted Resolution No. 25-09 approving PP 580 for the development of the 657-unit Project. Each of Phase 1 Owner and Phase 2 Owner, respectively, is obligated to comply with the series of Conditions of Approval in Resolution 25-09, including that the City and each Developer enter into the applicable Density Bonus and Affordable Housing Agreement (16800 Magnolia Street and 9025-9063 Recreation Circle, Fountain Valley) (each a “DBAHA”) to implement the terms and conditions for development, operation, maintenance, and management and related covenants affecting in particular the Affordable Units for the 55-year Affordability Period. With the Project to be undertaken in two separate Phases, Phase 1 North Lot building and Phase 2 South Lot building, the Phase 1 DBAHA is included as Attachment No. 4 to this staff report and presented for City Council review and action. Capitalized terms used herein are set forth in the Phase 1 DBAHA.

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

As noted, Planning Commission Resolution No. 25-09 approved PP 580 for development of the 657-unit Project. The Site is one of eleven (11) opportunity sites that were identified through the General Plan Update process of the Housing Element approved by the State Housing and Community Development Department (State HCD) for residential development to help reach the City’s Regional Housing Needs Allocation (RHNA) of 4,839 housing units.

Pursuant to the DBL and Inclusionary Housing Program, the overall Project must include a certain number of Affordable Units, and the DBL allowed the Developer to receive certain concessions, waivers, and reductions to the zoning and/or development standards, including relief from City parking requirements. The underlying zoning of the total 6.87-acre Site allows for a maximum of 75 dwelling units per acre (“DUA”); however, the overall Project will be built to 95.6 DUA based on Developer’s application for a density bonus pursuant to the DBL.

The Project’s reservation of 15 percent of its base units as affordable to Low Income Households equates to the covenanted 78 onsite Affordable Units, i.e., 39 Affordable Units in each of Phases 1 and 2. The DBL allowed for up to a 27.5 percent density bonus, i.e., a 142-unit density bonus.

The DBL also allows one concession and unlimited waivers and reductions of the City’s development standards that apply to the Project by which a certain number of the “base” units are restricted for Low Income Households. The PP 580 resolution approving the Project includes one concession for a reduction in the minimum non-residential floor area requirement and eight waivers/reductions to the zoning standards, including:
• Concession #1 – A reduction in the minimum non-residential floor area requirement. • Waiver #1 – An increase in the baseline height requirement. • Waiver #2 – A waiver of the height modulation (height variation, height averaging, and corner) requirements.
• Waiver #3 – A reduction in the total required open space requirement. • Waiver #4 – A reduction in MU-2 upper-level step back requirement. • Waiver #5 - A relaxation of the development standard for balconies. • Waiver #6 - An increase in the maximum Floor Area Ratio. • Waiver #7 – Waiver of the minimum lot size.
• Waiver #8 – A relaxation of the minimum street frontage setback.

The Project Entitlement was approved and determined to be consistent with the General Plan and Zoning, and compliant with applicable development standards of the Mixed-Use Code with the inclusion of the density bonus, concession, and waivers/reductions.

Condition of Approval No. 24 in Resolution No. 25-09 requires the applicant to obtain City approval of the applicable DBAHA prior to issuance of grading permits for the Project. Based on separate ownership of the North Lot and South Lot, the Phase 1 Owner is party to Phase 1 DBAHA, and the Phase 2 Owner will be party to the Phase 2 DBAHA. In implementation of PP 580 that grants the density bonus, the Phase 1 DBAHA addresses affordability, income and affordable rent standards, number of affordable units, reporting of and monitoring compliance, and recording of City Covenants against the North Lot that are effective for the 55-year Affordability Period, and the approved density bonus. (See: Conditions of Approval Nos. 23-32 of PP 580.)

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

The attached City Council Resolution (Attachment No. 3) and Phase 1 DBAHA (Attachment No. 4) memorialize the Project approvals as to Phase 1, as well as the 55-year Affordability Period for the 39 Affordable Units within the Phase 1 development. The second component on the South Lot, Phase 2 DBAHA will mandate the other 39 Affordable Units, thus 39 Affordable Units in each of Phase 1 and Phase 2. For Phase 1, the breakdown/unit mix among the 39 Affordable Units includes seven (7) studio units, nineteen (19) 1-bedroom units, twelve (12) 2-bedroom units, and one (1) 3-bedroom unit. For Phase 2, the breakdown/unit mix among 39 Affordable Units will include six (6) studio units, eighteen (18) 1-bedroom units, fourteen (14) 2-bedroom units, and one (1) 3-bedroom unit. All Affordable Units will be covenanted for occupancy by Low Income Households at an Affordable Rent as defined and set forth in the applicable DBAHA.

Pursuant to the California Health and Safety Code (“HSC”) and California Code of Regulations (“CCR”), and as an example, based on the 2026 income limits issued by State Housing and Community Development (“HCD”), the income limits for Low Income Households and calculation of Affordable Rent for Studio/0-bedroom, 1-bedroom, 2-bedroom, and 3-bedroom units are set forth in the following tables. Income and rent standards are adjusted annually based on income limits issued by HCD and as referenced in the DBAHA.

Generally, for tax credit projects, monthly rents are higher than HCD and HSC requirements.

For example, under HCD/HSC requirements in 2026, for income qualification of the tenant, both as a prospective tenant and for continued eligibility, the tenant household’s annual gross income cannot exceed the annual limit for a Low Income household as noted in the next table.

The median household figures are applied in the calculation of Affordable Rent under HSC §50053(b)(1).

HSC 2026
Income Level
1 person
household
2 person
household
3 person
household
4 person
household
5 person
household
6 person
household
Low/Lower $104,200 $119,100 $134,000 $148,850 $160,800 $172,700 Median $97,000 $110,900 $124,750 $138,600 $149,700 $160,800

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

Using the 2026 Median Income figures in the above table, per HSC §50053(b)(1) Affordable Rent for Lower Income Households, exclusive of applicable utilities allowance, for a Project not financed with tax credits or housing bonds:1
Monthly rent for a 0-bedroom/Studio unit may not exceed $1,455.00 Monthly rent for a 1-bedroom unit may not exceed $1,664.00 Monthly rent for a 2-bedroom unit may not exceed $1,871.00 Monthly rent for a 3-bedroom unit may not exceed $2,079.00 For a residential development awarded a reservation of tax credits by the California Tax Credit Allocation Committee (“TCAC”) and/or an allocation to issue multifamily housing revenue bonds from the California Debt Limit Allocation Committee (“CDLAC”), affordable rent is set pursuant to HSC §50053(b)(2) that applies rent per TCAC/CDLAC regulations.

Under the Phase 1 DBAHA, the Developer does not expect to seek allocation of tax credits or bonds, so Affordable Rent will be calculated per HSC §50053(b)(1).

As an example, applying HSC §50053(b)(2) and TCAC income and rent standards, Affordable Rent for Lower Income Households for 60% AMI tax credit and/or bond-financed units, exclusive of utilities allowance, for a Project financed with tax credits or housing bonds:2 Monthly rent for a 0-bedroom/Studio unit may not exceed $1,954.00 Monthly rent for a 1-bedroom unit may not exceed $2,094.00 Monthly rent for a 2-bedroom unit may not exceed $2,512.00 Monthly rent for a 3-bedroom unit may not exceed $2,903.00 Development and operation of the Affordable Units in compliance with the Phase 1 DBAHA will comply with the DBL and the City’s Inclusionary Housing Program, which agreement includes all required components of the DBL, the City’s Inclusionary Housing Program, and related affordable housing laws for low-income rental units. Therefore, Staff recommends the City Council adopt the attached Resolution approving the Phase 1 DBAHA for the North Lot development (Attachment No. 3).

FISCAL REVIEW
The DA will include a Fire Protection Payment totaling $750,000, allocated between the two phases of the Project. The Phase 1 Owner will pay $387,000 prior to issuance of any Certificate of Occupancy for any residential unit in Phase 1; and the Phase 2 Owner will pay $363,000 prior to the issuance of any Certificate of Occupancy for a residential unit in Phase

2. There is no financial impact associated with approving Phase 1 DBAHA for development of the North Lot.
1 Affordable Rent for Lower Income Households is the product of 30 percent times 60 percent of the area median income adjusted for family size appropriate to the unit. This is based on gross affordable rents (before deduction of utilities allowances). HSC §50053 (b)(1).
2 Affordable Rent for Lower Income 60% AMI Tax Credit or Bond Affordable Units for projects financed by federal or state low-income housing tax credits or housing bonds. This is based on gross affordable rents (before deduction of utilities allowances). HSC §50053(b)(2) .

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

PUBLIC NOTIFICATION
Public hearing notices were mailed to all property owners and commercial tenants within 1,000 feet of the subject property. The item was published in the Orange County Register, and notices were posted at City Hall and the Recreation Center.

ENVIRONMENTAL IMPACT REVIEW
The EIR for the General Plan Update was certified by the City Council on November 21, 2023, and an Addendum to the EIR was approved by the Planning Commission on June 11, 2025, through Resolution No. 25-08 to identify whether the revisions would result in any new significant impacts beyond those identified in the General Plan FEIR (CEQA Guidelines Section 15162).

Through the Addendum, it was determined that no new or substantially more severe significant impacts would occur as a result of the proposed changes. None of the conditions described in CEQA Guidelines Section 15162 requiring the preparation of a subsequent EIR or CEQA Guidelines Section 15163 requiring preparation of a supplemental EIR have occurred. The Planning Commission found that the Addendum to the adopted EIR was an appropriate level of environmental review for the project revisions, as identified in CEQA Guidelines Section 15164, and was adopted by the Planning Commission on June 11, 2025.

Pursuant to CEQA Guidelines Sections 15162 and 15164, the DA and DBAHA are within the scope of the project analyzed in the previously certified General Plan Final Program Environmental Impact Report (SCH No. 2022100563) and the Addendum approved by the Planning Commission on June 11, 2025. The DA and Phase 1 DBAHA introduce no substantial changes, new information, or changed circumstances that would cause new or more severe significant environmental impacts. Therefore, the Addendum is adequate, and no subsequent environmental review is required.

ATTORNEY REVIEW
The Attorney for the City has reviewed the attached Ordinance. Special Counsel Celeste Brady of Stradling Yocca Carlson & Rauth LLP has reviewed this report, prepared the form of the Phase 1 North Lot DBAHA, and consulted with the City’s legal counsel, Colin R. Burns, and with Theresa Brennan, both with Harper & Burns LLP.

ALTERNATIVES
Alternative No. 1: Introduce the attached Ordinance approving a Development Agreement among the City of Fountain Valley, and Magnolia I Owner, LLC (owner of North Lot), and HPG Magnolia II, LLC (owner of South Lot) for the development of the 16800 Magnolia Mixed-Use Project located at 16800 Magnolia Street and 9025-9063 Recreation Circle.

Alternative No. 2: Adopt the attached Resolution of the City Council of the City of Fountain Valley, California, approving the Phase 1 Density Bonus and Affordable Housing Agreement for the North Lot first phase of the

Development Agreement among City, Magnolia I Owner, LLC, and HPG Magnolia II, LLC Density Bonus and Affordable Housing Agreement with Magnolia I Owner, LLC October 20, 2026

16800 Magnolia Project located at 16800 Magnolia Street and 9025- 9063 Recreation Circle.

Alternative No. 3: Do not introduce the attached Ordinance approving a Development Agreement among the City of Fountain Valley, and Magnolia I Owner, LLC (owner of North Lot), and HPG Magnolia II, LLC (owner of South Lot) for the development of the 16800 Magnolia Mixed-Use Project located at 16800 Magnolia Street and 9025-9063 Recreation Circle.

Alternative No. 4: Do not adopt the attached Resolution of the City Council of the City of Fountain Valley, California, approving a Phase 1 Density Bonus and Affordable Housing Agreement for the North Lot, first phase of the 16800 Magnolia Project located at 16800 Magnolia Street and 9025- 9063 Recreation Circle.

Alternative No. 5: Continue this request for additional information.

RECOMMENDATION
Staff is requesting City Council approval of Alternative No. 1 and 2: Alternative No. 1 to introduce the attached Ordinance approving a Development Agreement among the City of Fountain Valley, and Magnolia I Owner, LLC (Phase 1 North Lot), and HPG Magnolia II, LLC (Phase 2 South Lot) for the development of the 16800 Magnolia Mixed-Use Project located at 16800 Magnolia Street and 9025-9063 Recreation Circle; and Alternative No. 2 to adopt the attached Resolution of the City Council of the City of Fountain Valley, California, approving a Phase 1 Density Bonus and Affordable Housing Agreement for the North Lot first phase development of the 16800 Magnolia Mixed-Use Project located at 16800 Magnolia Street and 9025-9063 Recreation Circle.

Prepared by: Steven Ayers, Principal Planner
Reviewed by: Omar Dadabhoy, Deputy City Manager/Community Development Director
Approved by: Maggie Le, City Manager
Attachments:

1. Ordinance approving a Development Agreement

2. Development Agreement for the 16800 Magnolia Mixed-Use Project

3. Resolution approving Phase 1 DBAHA (North Lot)

4. Phase 1 Density Bonus and Affordable Housing Agreement for the 16800 Magnolia Mixed-Use Project

4900-7003-8487v2/200348-0012
ORDINANCE NO.________

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

FOUNTAIN VALLEY APPROVING A DEVELOPMENT

AGREEMENT AMONG THE CITY OF FOUNTAIN VALLEY,

MAGNOLIA I OWNER, LLC, AND HPG MAGNOLIA II, LLC FOR
THE DEVELOPMENT OF THE 16800 MAGNOLIA MIXED-USE
PROJECT LOCATED AT 16800 MAGNOLIA STREET AND
9025-9063 RECREATION CIRCLE
WHEREAS, Government Code Section 65864, et seq., authorizes cities to enter into development agreements with applicants pursuant to which those applicants will be entitled to develop their property in a specified manner; and
WHEREAS, Holland Partner Group (“HPG”) on behalf of the then owner of the subject property submitted an application to the City for a land use entitlement, including seeking a density bonus under Government Code Section 65915 and Fountain Valley Municipal Code Chapter 21.08.050(a) (together, “DBL”), which is identified as Precise Plan 580 for development of certain real property located at 16800 Magnolia Street and 9025-9063 Recreation Circle (“Site”) that is the subject of this Ordinance and Development Agreement; and
WHEREAS, the Site is comprised of multiple parcels, as assembled and described as (i) the “North Lot” that is presently owned in fee by Magnolia I Owner, LLC, a Delaware limited liability company (Phase 1/North Lot Owner), and (ii) the “South Lot” that is presently owned in fee by HPG Magnolia II, LLC, a Washington limited liability company (Phase 2/South Lot Owner), and (iii) certain real property owned in fee by the Orange County Flood Control District (“OCFCD Property”); and
WHEREAS, the North Lot and South Lot are legally described in Exhibits A and B, respectively, to the Development Agreement attached hereto as Exhibit 1 and incorporated herein by this reference; and
WHEREAS, on June 11, 2025, following a duly noticed public hearing, the Fountain Valley Planning Commission adopted Resolution No. 25-09 approving Precise Plan No. 580 for a mixed-use development project on the Site (herein “Project”) to be constructed on the North Lot and the South Lot, inclusive of the OCFCD Property, consisting of 657 residential apartment units and 4,460 square feet of ground-floor commercial use within two (2) seven-story buildings partially surrounding two (2) seven-story parking structures with rooftop parking, subject to the Conditions of Approval adopted therewith, and adopted Planning Commission Resolution No. 25-08 approving an Addendum (“CEQA Addendum”) to the certified Fountain Valley General Plan Final Program Environmental Impact Report (State Clearinghouse No. 2022100563); and
WHEREAS, on July 15, 2025, following a duly noticed public hearing, the Fountain Valley City Council adopted Resolution No. 9960 denying an appeal and reaffirming the Planning Commission’s approval of Precise Plan No. 580 and the CEQA Addendum and Mitigation Monitoring and Reporting Plan (“MMRP”) for the Project, which approvals applied

4900-7003-8487v2/200348-0012
the DBL and the City’s Inclusionary Housing Program, FVMC Chapter 21.17, et seq. (together, “Entitlement”); and
WHEREAS, the Entitlement for the Project on the Site was approved as a unified mixed-use development project consisting of 657 residential units and related commercial and parking improvements on the North Lot, the South Lot, inclusive of OCFCD Property; and
WHEREAS, the Project will be constructed in two phases, with the first phase consisting of a mixed-use seven-story building with 339 apartment units of which 39 units (of 339) are the Affordable Units, a parking garage, retail space and amenities on the North Lot, as well as specified improvements on the OCFCD Property (“Phase 1”); and the second phase consisting of the mixed-use seven-story building with 318 apartment units of which 39 units (of 318) are the Affordable Units, a parking garage, retail space and amenities on the South Lot, as well as specified improvements on the OCFCD Property (“Phase 2”) with the affordable housing obligations for each phase addressed through the applicable Phase 1 and Phase 2 Density Bonus and Affordable Housing Agreement (each a “DBAHA”); and WHEREAS, on July 23, 2026 (i) Magnolia I Owner, LLC acquired the North Lot from the third party seller and as the “Phase 1 Owner” for the Phase 1 development on the Site, and (ii) HPG Magnolia II, LLC acquired the South Lot from the third party seller and as the “Phase 2 Owner” for the Phase 2 development on the Site; and WHEREAS, Magnolia I Owner, LLC and HPG Magnolia II, LLC (together “Owners”) are desirous of entering into the proposed Development Agreement which is shown as “Exhibit 1” to this Ordinance and incorporated herein by this reference, and such owners each hold the Entitlement for their respective Phase 1 and Phase 2 developments on the Site; and WHEREAS, the City Council and Magnolia I Owner, LLC have approved, or are concurrently approving, that certain “Density Bonus and Affordable Housing Agreement (Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley)” (“Phase 1 DBAHA”), which establishes the affordable housing obligations, monitoring requirements, long-term affordability covenants, and related enforcement provisions applicable to Phase 1; and WHEREAS, the Development Agreement legislation (Government Code Sections 65864 through 65869.5) authorizes the City to enter into development agreements to provide certainty in the development process, vest development rights in accordance with applicable plans, regulations, and conditions of approval, promote orderly and high-quality development, and reduce public and private costs associated with development; and WHEREAS, the respective Owners desire to develop Phase 1 and Phase 2, respectively, on the Site in accordance with the Development Agreement, respective DBAHAs, the Entitlement, the Development Plan Approvals (as defined in the Development Agreement), the Existing Regulations, and applicable regulations of any other public agencies having jurisdiction over the Project, both Phase 1 and Phase 2 developments; and WHEREAS, the City has reviewed the Project in compliance with the California Environmental Quality Act (“CEQA”) and applicable regulations and has approved the

4900-7003-8487v2/200348-0012
Project based on the environmental analysis reflected in the CEQA Addendum approved by the Planning Commission; and
WHEREAS, the City, Magnolia I Owner, LLC and HPG Magnolia II, LLC desire to enter into the Development Agreement to provide certainty regarding the rules, regulations, standards, official policies and conditions applicable to the development of the Project, both Phase 1 and Phase 2 developments, to vest development rights in accordance with the Development Plan Approvals and Existing Regulations (each as defined in the Development Agreement), and to allow the respective Owners to proceed with the orderly development of the Site, both Phase 1 and Phase 2, in reliance on the terms of the Development Agreement; and
WHEREAS, Government Code Section 65867.5 requires that development agreements be found consistent with the City’s General Plan and be adopted by ordinance as a present exercise of the City’s police power; and
WHEREAS, the Development Agreement is subject to adoption by the City Council by ordinance in accordance with Government Code Section 65867.5; and WHEREAS, the Planning Commission considered the proposed Development Agreement at its public hearing on August 12, 2026, and by a vote of 5-0 the Planning Commission approved Resolution No. 26-11 recommending the City Council approve the Development Agreement; and
WHEREAS, this Development Agreement has been duly processed in accordance with City’s rules and regulations governing the approval of development agreements; and WHEREAS, the City Council considered the recommendation of the Planning Commission and on October 20, 2026, held a duly noticed public hearing pertaining to the proposed Development Agreement in accordance with Government Code Section 65867; and
WHEREAS, the City Council does hereby find that the provisions of the Development Agreement are consistent with the General Plan.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FOUNTAIN VALLEY DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1:

The EIR for the General Plan Update was certified by the City Council on November 21, 2023 and an Addendum to the EIR was approved by the Planning Commission on June 11, 2025 through Resolution No. 25-08 to identify whether the revisions would result in any new significant impacts beyond those identified in the General Plan FEIR (CEQA Guidelines Section 15162).

Through the Addendum, it was determined that no new or substantially more severe significant impacts would occur as a result of the proposed changes. None of the conditions described in CEQA Guidelines Section 15162 requiring the preparation of a subsequent EIR or CEQA Guidelines Section 15163 requiring preparation of a supplemental EIR have

4900-7003-8487v2/200348-0012
occurred. The Planning Commission found that the Addendum to the adopted EIR was an appropriate level of environmental review for the project revisions, as identified in CEQA Guidelines Section 15164 and was adopted by the Planning Commission on June 11, 2025.

Pursuant to CEQA Guidelines Sections 15162 and 15164, the City Council finds that the Development Agreement is fully within the scope of the project analyzed in the previously certified General Plan Final Program Environmental Impact Report (SCH No. 2022100563) and the Addendum to the City of Fountain Valley General Plan Final Environmental Impact Report for the 16800 Magnolia Street Project approved by the Planning Commission through Resolution No. 25-08 on June 11, 2025. The Development Agreement introduces no substantial changes, new information, or changed circumstances that would cause new or more severe significant environmental impacts. Therefore, the Addendum is adequate, and no subsequent environmental review is required.

SECTION 2:

The City Council finds that the due notice of public hearing on October 20, 2026, in the Council Chambers, 10200 Slater Avenue, Fountain Valley, was given as required by the Fountain Valley Municipal Code, Title 21, and the statutes of the State of California.

The City Council has considered the evidence to support the findings set forth in Section 3 below.

SECTION 3:

Having considered the evidence, the City Council finds that the proposed Development Agreement meets all criteria established for a development agreement as provided for in the Fountain Valley Municipal Code, Section 21.38.040(e)(7); and finds, approves, and directs as follows:

1. The Development Agreement would be in the best interest of the City because it facilitates the orderly implementation of the previously approved Project, provides regulatory certainty, preserves the City's regulatory authority as provided therein, and secures enforceable obligations, including the $750,000 Fire Protection Payment. The Fire Protection Payment implements Condition of Approval No. 153 of Precise Plan No. 580 and provides a defined contribution toward fire protection services for the Project. The Development Agreement is consistent with the actions, goals, objectives, and policies of the General Plan and Development Code. The Development Agreement will help meet the General Plan Goals and Policies below:

Land Use Element
Goal LU-1: An arrangement of compatible land uses that protects and maintains attractive and safe neighborhoods while promoting dynamic activity centers and preserving conventional commercial and industrial uses.

Policy LU-1.1: land use compatibility and viability – Require that new development is located, scaled, buffered, and designed to minimize negative impacts on existing conforming uses and adjacent neighborhoods. Required that new residential

4900-7003-8487v2/200348-0012
developments are located, scaled, buffered, and designed so as to not hinder the economic viability and continuity of areas planned for nonresidential uses.

Policy LU-1.2 Land Use Plan consistency. Consider proposed development that is consistent with the Land Use Plan (i.e., it does not require a change in Land Use Designations), to be generally compatible and consistent with surrounding land uses and a community’s identity. Other policies in the General Plan and development standards in the Development Code may require additional site, building, and landscape design treatment to ensure compatibility.

Policy LU-1.3 Mix of land uses. Maintain a balanced mix of high quality residential, retail, employment, industrial, open space, and public facility land uses to ensure a range of living options, fiscal sustainability, and convenient access to shops, restaurants, services, and well-paid and highly skilled jobs.

By redeveloping an underutilized property dedicated to surface parking uses, the Project fulfills a variety of Land Use Goals and Policies. The Project’s 657 units create a significant amount of urgently needed units without displacing or affecting existing units or residents. The underutilized Project Site is physically divided by Magnolia Street from its closest residential neighbors, offering the opportunity for a project that supports the area’s economic viability without affecting the area’s existing residents.

The Project’s retail square footage and its proximity to the commercial activity node, at the corner of Magnolia Street and Warner Avenue, offers residents the opportunity to walk to goods, reduce vehicle miles traveled, and promote economic activity while limiting potential impacts on existing neighbors. By balancing land use, density, and proximity to a commercial hub served by transit, the Project adds needed residential units to an underutilized surface parking lot creating new customers for surrounding businesses, thereby enhancing their economic viability.

The Project provides a diverse palette of materials, colors, and landscape improvements that significantly enhance the built environment. The varied roofline configurations and mix of retail options within the Project balance land uses to minimize potential negative impacts on adjacent neighborhoods. The tiered, twobuilding design features six stories along Magnolia Street and Recreation Circle and then steps back to seven stories, which effectively reduces mass. This is further emphasized by the inclusion of courtyards that break up and articulate the Project’s form. A portion of these courtyards grant approximately 20,110 square feet of public space, lined with seating and featuring a dog park. Additionally, extensive landscaping throughout the site includes 44,868 square feet of landscaping with approximately 130 new trees. Additionally, the project will provide 55,388 square feet of private open space. Lastly, a variety of materials, such as metal railing, exposed wood, terra cotta tiles and vents, aluminum storefronts, and stone veneer will enhance each building elevation.

Mobility Element
Goal CM-1: A safe and efficient network of streets that are adequate for residents, businesses, visitors, and emergency services.

4900-7003-8487v2/200348-0012
Policy CM-1.1 Level of service. Maintain a citywide level of service (LOS) not exceeding LOS D for intersections during the peak hours. Require new development projects to mitigate off-site traffic impacts to the maximum extent feasible to maintain the City’s LOS standard.

Goal CM-2: a comprehensive and multimodal network of streets, bikeways, and pedestrian areas that facilitate the safe and efficient movement of people and goods while minimizing VMT.

Policy CM-2.6 Access management. Minimize access points and curb cuts along arterials and in the proximity of an intersection to improve traffic flow and safety for vehicles and bicycles. Eliminate and/or consolidate driveways when new development occurs or when traffic operation or safety warrants.

The Project is located within walking distance to the intersection of Warner Avenue, a major arterial, and Magnolia Street, a primary arterial, making it a hotspot for roadway activity. To improve traffic flow and safety for both vehicles and bicycles here, the Project minimizes access points and curb cuts: The Site will consist of just one vehicular driveway through a traffic light at the future entrance on Magnolia Street, and a right-turn lane that will be located on the property to improve traffic flow. This develops an efficient movement of people and goods into and out of the property.

By meeting the City’s requirements for bicycle parking and including a bike repair and locker area, the Project promotes cycling to reduce vehicle miles traveled (VMT).

Policy CM-2.5 Site design. Require new development to incorporate amenities and pathways so that pedestrians and bicyclists can access the site and onsite businesses safely and conveniently from the public right-of-way and parking areas.

The Project includes amenities and pathways that ensure pedestrians and cyclists can access the site and its businesses safely and conveniently from public rights-of-way and parking areas. Public amenities include a dog park (North Building) and a retail paseo with outdoor seating (both North and South Buildings), providing visitors with comfortable spaces to enjoy the Site while safely and conveniently out of the public right-of-way.

The site design emphasizes pedestrian orientation, integrating sidewalks and landscaping to connect various buildings and amenities within the community. The renderings illustrate paved sidewalks wide enough to accommodate pedestrian traffic, allowing seamless movement between buildings, and among ground-floor facilities, such as retail centers, the indoor and outdoor fitness centers, and BBQ areas. Publicly accessible open space, approximately 20,110 SF, is available for users to enjoy with paved pathways between the retail areas, outdoor eating, and patches of green space, and safely out of the public right-of-way and major parking areas.

Housing Element
The Project is in significant compliance with the following goals and policies of the City’s adopted Housing Element 2021-2029 of the General Plan:

4900-7003-8487v2/200348-0012
Goal H-1: Promote and encourage the development of a variety of housing opportunities to accommodate current and projected households.

Policy H-1.1 Construction of new units. Promote the construction of additional dwelling units to accommodate Fountain Valley’s share of regional housing needs in accordance with adopted land use policies.

Policy H-1.2 Variety of housing options. Provide a variety of housing opportunities for all income levels through different land uses and densities.

Goal H-2: Assist in the provision of housing affordable to lower income households.

Policy H-2.3 Range of rental and ownership options. Encourage new housing construction for rental and ownership housing in a mixture of price ranges.

To address this need, the Project proposes the development of new, high-quality, mixed income development, complementing the City’s efforts to rezone the area for mixed-use. The Project will create 657 net-new apartment units without displacing any existing residents or demolishing any current dwellings. These units vary in size and design, offering a mix of studio, one-bedroom, two-bedroom, and three-bedroom apartments. Specifically, the Project includes 105 studio apartments (16% of total units), 315 one-bedroom/one-bathroom apartments (48%), 215 two-bedroom/twobathroom apartments (33%), and 22 three-bedroom/two-bathroom apartments (3%), with sizes ranging from 609 square feet (studios) to 1,450 square feet (three-bedroom units).

According to the 6th cycle RHNA adopted by the Southern California Association of Governments (SCAG), Fountain Valley must plan to accommodate 4,839 housing units, including 2,093 lower-income units, during the 2021-2029 planning period. This includes 786 low-income units (50-80% AMI) and 834 moderate-income units (80- 120% AMI). Of the Project's 657 proposed units, 78 units, representing 15% of the Project's 515 base units, will be reserved for occupancy by Lower Income Households earning no more than 80% of AMI at Affordable Rent as provided in the applicable DBAHA. While the City’s Housing Element designates the Project site (referred to as "Boomers" in the Element) to provide 41 low-income units, the Project nearly doubles this target by offering 78 affordable units, all of which will contribute toward the City’s lower-income RHNA allocation. In summary, the Project aligns with the City's goals by contributing to Fountain Valley’s regional housing needs, offering a diverse range of new rental options at various price points on an underutilized site.

Policy H-1.4 Transit proximity. Locate higher density residential development close to public transportation.

The Site is within walking distance of the Magnolia and Warner intersection, where residents can access Orange County Transportation Authority (OCTA) bus Route 33 and Route 72. New residents of the Project will be able to travel to the many shopping, dining, entertainment, and cultural opportunities of the area.

Goal H-2: Assist in the provision of housing affordable to lower income households.

4900-7003-8487v2/200348-0012
Policy H-2.1 Infill housing. Promote infill housing development through the adaptive reuse of underutilized parcels.

Policy H-2.4 Mixed-use residential. Promote development of compatible mixed-use projects with residential components at higher densities within commercial designations.

The Project enhances the Site’s density using the State Density Bonus law and infills this “under-utilized” site with commercial and residential features. The infill development of this Project Site with a mixed-use facility expands the current density of the site by providing net-new 657 apartment units within walking distance of the intersection of Warner Ave and Magnolia Street, shared the OCTA Route 33 and Route 72 bus stops. Building this Project here thus furthers the City’s goal of promoting infill housing development and promoting development of compatible mixed-use projects with residential components at higher densities. Providing residential units near transit advances the accessibility of the site to lower-income residents and visitors who may use public transportation to commute to and from the Project Site.

This is especially pertinent given that 15% of the Project’s base units, or 78 total units, will be reserved for occupancy by Lower Income Households earning no more than 80% of AMI at Affordable Rent as provided in the applicable DBAHA.

Public Facilities and Safety Element
Goal PFS-1: Reliable and cost-effective infrastructure systems and services that adequately serve residents and businesses.

Policy PFS-1.2 Approval beyond projected supplies. Approve new development with more than 100 units or 25,000 square feet of nonresidential building space only if either:
• the projected water demand of the proposed development can be accommodated by the remaining projected supplies in the latest adopted Urban Water Management Plan, or
• the developer of the proposed development provides a separate water supply assessment that is approved by the Director of Public Works and demonstrates that there is an adequate 25-year water supply that will serve the proposed project and not diminish the water supply of existing residents and businesses in Fountain Valley.

The Water Supply Assessment prepared for the Project analyzed whether the City’s total projected water supplies established in the City of Fountain Valley’s 2020 Urban Water Management Plan (UWMP) during normal, dry, and multiple consecutive dry water years are adequate to meet the projected water demands from the UWMP in addition to the water demand associated with the Project. The Project is assumed to be fully built out by 2029. The calculated additional demand for the Project is 155 acrefeet per year (AFY) and has been added to the projected demands through 2045.

4900-7003-8487v2/200348-0012
With a combination of groundwater production and imported water purchased, the City can meet the projected and additional demands associated with the Project through 2045. The City does have options available for meeting the increase in demands associated with the Project. Some of these options include increasing their groundwater production beyond the Orange County Water District’s forecasted basin production percentage and/or purchasing more imported water to meet demands.

2. The Development Agreement would promote the public convenience, health, interest, safety, or welfare of the City. Consistent with Condition of Approval No. 153 of Precise Plan No. 580, the Development Agreement requires the Owners to pay the City a Fire Protection Payment totaling $750,000 ($387,000 prior to the first residential certificate of occupancy for Phase 1 and $363,000 prior to the first residential certificate of occupancy for Phase 2), which provides a defined contribution toward fire protection services for the Project. The Project will promote public convenience, health, interest, safety, and welfare of the City. The development enhances public convenience by providing 657 new housing units without displacing existing residents. The Project’s construction of new apartments would improve the affordability of the City’s housing stock by increasing the supply of rental housing, which is of interest to the City and rent-burdened residents. Of these units, 78 (39 units in Phase 1 and 39 units in Phase 2) will be covenanted for tenancy and occupancy by Lower Income Households earning no more than 80% of AMI at an Affordable Rent as provided in the applicable DBAHA, contributing to the City’s housing goals while integrating harmoniously with the surrounding area. Additionally, the Project’s location being within walking distance from two public transportation options and commercial nodes along Warner Avenue, and being proximate to the City’s planned bicycle network, further has the opportunity to improve convenience and connectivity for both residents and visitors. The influx of new residents will boost commercial activity, reducing vacancies and increasing patronage for local businesses. By contributing to a stronger local economy and improved public infrastructure, the development will positively affect the public health, safety, and welfare, fostering a more connected and vibrant community.

While the Project is anticipated to result in changes to traffic in the area, it is not anticipated to create significant impacts. The Traffic Impact Analysis (TIA) analyzed traffic generation through vehicle trip ends, defined as one-way vehicular movements, either entering or exiting the generating land use. The trip generation forecast for the proposed Project totals 3,138 daily trips, with 250 trips (61 inbound, 189 outbound) during the AM peak hour and 277 trips (167 inbound, 110 outbound) during the PM peak hour. The TIA also analyzed the Project driveways and found that the Project Driveway B at Recreation Circle would operate at a LOS A, but the unsignalized main Driveway A at Magnolia St would operate at a LOS F. A Traffic Signal Warrant Analysis was prepared for the two (2) Project driveways and found that only Project Driveway A warranted a traffic signal. Once the Project is complete, with the traffic signal installed, Project Driveway A would operate at a LOS A. An alternative access configuration was evaluated for Project Driveway A in case access to Project Driveway A was not granted a traffic signal. The alternative access configuration would restrict access at Driveway A to “left-turn in/right-turn in and right-turn out only” movements.

Under the alternative access configuration, it was found that Project Driveway A would operate at a LOS C, meeting the minimum acceptable level of service. Also, the Project is screened from a Vehicle Miles Traveled (VMT) analysis as the residential

4900-7003-8487v2/200348-0012
portion of the Project will screen out as it is within a low VMT-generating area and the retail component of the Project will screen out since it is a local serving use of only 4,460 square feet of retail space, which is less than the 50,000 square foot threshold.

Therefore, in accordance with the City of Fountain Valley’s guidelines, the proposed Project is exempt from the preparation of any further VMT analysis and is presumed to have a less than significant CEQA-related transportation impact.

3. The attached Development Agreement, Exhibit 1, among the City, Magnolia I Owner, LLC and HPG Magnolia II, LLC is approved.

4. The Mayor is authorized to execute the Development Agreement on or after the effective date of this Ordinance.

5. The City Clerk shall, not later than ten (10) days after the Development Agreement has been fully executed by the parties, cause the Development Agreement to be recorded with the Orange County Recorder.

SECTION 4:

If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the Ordinance. The City Council declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would subsequently be declared invalid or unconstitutional.

SECTION 5:

The City Clerk shall certify to the adoption of this Ordinance and cause it to be published as required by law. This Ordinance shall become effective thirty (30) days after the date of its adoption.

PASSED, APPROVED AND ADOPTED THIS ___DAY OF ______, 2026.

ATTEST:

City Clerk Jim Cunneen, Mayor

APPROVED AS TO FORM

HARPER & BURNS LLP

Attorneys for the City

244122517.2
225322-10014
1 DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (the “Agreement”) is entered into as of the day of , 2026 (“Agreement Date”), by and between Magnolia I Owner, LLC, a Delaware limited liability company (“NORTH LOT OWNER”) and HPG Magnolia II, LLC, a Washington limited liability company (“SOUTH LOT OWNER”) on the one hand, and the CITY OF FOUNTAIN VALLEY, a municipal corporation, organized and existing under the laws of the State of California (hereinafter “CITY”) on the other hand. NORTH LOT OWNER and SOUTH LOT OWNER are sometimes herein referred to together and individually as “OWNER,” and NORTH LOT OWNER, SOUTH LOT OWNER and CITY are sometimes referred to herein individually as a “Party” and collectively as the “Parties.” This Agreement is entered into pursuant to the authority of Sections 65864 through 65869.5 of the California Government Code and Article XI, Section 2 of the California Constitution.

RECITALS
WHEREAS, NORTH LOT OWNER is the fee title owner of certain real property located within the City of Fountain Valley, County of Orange, State of California (the “North Lot Property”), as more particularly described in Exhibit A attached hereto and incorporated herein by this reference; and
WHEREAS, SOUTH LOT OWNER is the fee title owner of certain real property located within the City of Fountain Valley, County of Orange, State of California (the “South Lot Property”), as more particularly described in Exhibit B attached hereto and incorporated herein by this reference; and
WHEREAS, on June 11, 2025, following a duly noticed public hearing, the Fountain Valley Planning Commission adopted Resolution No. 25-09 approving Precise Plan No. 580 for a mixed-use development project (the “Project”) on the North Lot Property, the South Lot Property and certain real property owned in fee by the Orange County Flood Control District, located within the City of Fountain Valley, County of Orange, State of California (the “OCFCD Property”) consisting of 657 residential apartment units and 4,460 square feet of ground-floor commercial use within two (2) seven-story buildings partially surrounding two (2) seven-story parking structures with rooftop parking, subject to the Conditions of Approval adopted therewith, and adopted Resolution No. 25-08 approving an Addendum (the “CEQA Addendum”) to the certified Fountain Valley General Plan Final Program Environmental Impact Report (State Clearinghouse No. 2022100563); and
WHEREAS, on July 15, 2025, following a duly noticed public hearing, the Fountain Valley City Council adopted Resolution No. 9960 denying an appeal and reaffirming the Planning Commission’s approval of Precise Plan No. 580 and the Addendum for the Project; and WHEREAS, the Project was approved as a unified mixed-use development project consisting of 657 residential units and related commercial and parking improvements on the North Lot Property, the South Lot Property and the OCFCD Property (collectively, the “Property”) to be constructed in two phases, with the first phase consisting of a mixed-use seven-story building with

244122517.2
225322-10014
2 339 apartment units, a parking garage, retail space and amenities on the North Lot Property, as well as specified improvements on the OCFCD Property (“Phase 1”); and the second phase consisting of the mixed-use seven-story building with 318 apartment units, a parking garage, retail space and amenities on the South Lot Property, as well as specified improvements on the OCFCD Property (“Phase 2”) with affordable housing obligations for each phase in accordance with the Precise Plan No. 580 and addressed through the applicable Density Bonus and Affordable Housing Agreement; and
WHEREAS, the CITY and NORTH LOT OWNER have approved, or are concurrently approving, that certain “Density Bonus and Affordable Housing Agreement (Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley)” (the “Phase 1 DBAHA”), which establishes the affordable housing obligations, monitoring requirements, long-term affordability covenants, and related enforcement provisions applicable to Phase 1; and WHEREAS, the Development Agreement legislation (Government Code Sections 65864 through 65869.5) authorizes the CITY to enter into development agreements to provide certainty in the development process, vest development rights in accordance with applicable plans, regulations, and conditions of approval, promote orderly and high-quality development, and reduce public and private costs associated with development; and WHEREAS, OWNER desires to develop the Property in accordance with this Agreement, the Development Plan Approvals, the Existing Regulations, and applicable regulations of any other public agencies having jurisdiction over the Project; and WHEREAS, the CITY has reviewed the Project in compliance with the California Environmental Quality Act (“CEQA”) and applicable regulations and has approved the Project based on the environmental analysis reflected in the CEQA Addendum approved by the Planning Commission; and
WHEREAS, the CITY and OWNER desire to enter into this Agreement to provide certainty regarding the rules, regulations, standards, official policies and conditions applicable to the development of the Project, to vest development rights in accordance with the Development Plan Approvals and Existing Regulations, and to allow OWNER to proceed with the orderly development of the Property in reliance on the terms of this Agreement; and WHEREAS, Government Code Section 65867.5 requires that development agreements be found consistent with the CITY’s General Plan and be adopted by ordinance as a present exercise of the CITY’s police power; and
WHEREAS, this Agreement is subject to adoption by the City Council of the CITY by ordinance in accordance with Government Code Section 65867.5.

AGREEMENT
NOW, THEREFORE, pursuant to the authority contained in the Development Agreement Legislation, pursuant to Article XI, Section 2 of the California Constitution, and in consideration of the foregoing facts which define the intent of the Parties, all of which are expressly incorporated

244122517.2
225322-10014
3 into this Agreement, and the mutual covenants set forth in this Agreement, the Parties agree as follows:

1. Definitions.

Unless the context otherwise requires, the following terms shall have the meanings set forth below. References to “Articles,” “Sections,” and other subdivisions refer to this Agreement. The words “herein,” “hereof,” and “hereunder” refer to this Agreement as a whole and not to any particular provision.
“Agreement” means this Development Agreement.
“Agreement Date” means the date this Agreement is executed by the Parties. “Authorizing Ordinance” means the ordinance adopted by the City Council approving this Agreement pursuant to Government Code Section 65867.5. “CEQA” means the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) and the CEQA Guidelines.
“CEQA Addendum” means the addendum to the certified Fountain Valley General Plan Final Program Environmental Impact Report (State Clearinghouse No. 2022100563) approved by the Planning Commission in connection with the Project. “CITY” means the City of Fountain Valley, a California municipal corporation. “City Council” means the duly elected City Council of the CITY. “Conditions of Approval” means the conditions of approval adopted by the Planning Commission in connection with Resolution No. 25-09 approving Precise Plan No. 580. “DBAHA” or “DBAHAs” means, individually or collectively as the context requires, the Phase 1 DBAHA and Phase 2 DBAHA.
“Development Agreement Legislation” means Government Code Sections 65864 through 65869.5.
“Development Plan Approvals” means, collectively, Precise Plan No. 580, the Conditions of Approval, the CEQA Addendum, the DBAHAs, and any other discretionary land use approvals expressly identified in this Agreement.
“Effective Date” means the date the Authorizing Ordinance becomes effective. “Existing Regulations” means the ordinances, rules, regulations, and official policies of the CITY in effect on the Effective Date that govern the use and development of the Property and that are not inconsistent with the Development Plan Approvals or this Agreement.

244122517.2
225322-10014
4 “Future Development Approvals” means ministerial or discretionary permits and approvals that implement the Project in a manner consistent with the Development Plan Approvals, this Agreement, and the applicable DBAHA, including, but not limited to, grading permits, building permits, and certificates of occupancy.
“NORTH LOT OWNER” has the meaning set forth in the first paragraph of this Agreement, and includes its successors and permitted assigns “North Lot Property” has the meaning set forth in the recitals. “OCFCD Property” has the meaning set forth in the recitals. “OWNER” has the meaning set forth in the first paragraph of this Agreement, and includes its successors and permitted assigns.
“Phase 1” has the meaning set forth in the recitals, above , as further described in the Phase 1 DBAHA.
“Phase 1 DBAHA” has the meaning set forth in the recitals. “Phase 2” has the meaning set forth in the recitals, above, as further described in the Phase 2 DBAHA when approved.
“Phase 2 DBAHA” means the separate Density Bonus and Affordable Housing Agreement required to be approved, executed, and recorded for Phase 2 of the Project prior to issuance of the first permit for development of Phase 2. “Planning Commission” means the Planning Commission of the CITY. “Precise Plan No. 580” means Precise Plan No. 580 approved by the Planning Commission pursuant to Resolution No. 25-09 and the City Council pursuant to Resolution No. 9960.
“Project” has the meaning set forth in the recitals.
“Property” has the meaning set forth in the recitals.
“SOUTH LOT OWNER” has the meaning set forth in the first paragraph of this Agreement, and includes its successors and permitted assigns. “South Lot Property” has the meaning set forth in the recitals. “Term” means the term of this Agreement as set forth in Section 2.3.

2. General Provisions.

2.1 Binding Covenants. Except as otherwise expressly provided in this Agreement and to the extent permitted by law, the provisions of this Agreement shall constitute covenants running

244122517.2
225322-10014
5 with the land and shall be binding upon and inure to the benefit of the CITY and OWNER and their respective successors and permitted assigns in accordance with Government Code Section 65868.

2.2 Interest of OWNER. NORTH LOT OWNER represents that, as of the Effective Date, NORTH LOT OWNER holds fee title to the North Lot Property. SOUTH LOT OWNER represents that, as of the Effective Date, SOUTH LOT OWNER holds fee title to the South Lot Property.

2.3 Term. This Agreement shall become effective on the Effective Date and, unless earlier terminated in accordance with this Agreement, shall remain in effect for a period of ten (10) years, unless said Term is otherwise terminated, modified or extended by circumstances set forth in this Agreement. Any extension of the Term shall be subject to the mutual written agreement of the CITY and OWNER and shall require approval by the City Council by ordinance in accordance with Government Code Section 65867. Nothing herein shall be construed to grant OWNER any vested right to an extension of the Term.

2.4 Termination.

This Agreement shall be deemed terminated and of no further effect, except for those covenants and agreements that expressly survive termination, upon the occurrence of any of the following events without further legislative action by the CITY, Planning Commission, or City Council (provided, however, that any such termination shall not affect any right or obligation arising from entitlement or approvals, including the Development Plan Approvals and Future Development Approvals, which shall survive termination of this Agreement):

2.4.1 Completion of the total build-out of the Project pursuant to the terms of this Agreement and the Development Plan Approvals and any future Development Approvals and the CITY’s issuance of all required occupancy permits and acceptance of any and all dedications and improvements required to complete development of the Project;

2.4.2 Entry after all appeals have been exhausted of a final judgment or issuance of a final order directed to the CITY as a result of any lawsuit filed against the CITY to set aside, withdraw, or abrogate the approval of the City Council of this Agreement; or

2.4.3 The expiration of the Term as set forth in Section 2.3.

2.4.4 To provide notice to all, and not as a condition of the effectiveness of a termination of this Agreement, the Parties agree to execute and record terminations of or releases of this Agreement.

2.4.5 Termination or expiration of this Agreement shall not terminate, impair, or otherwise affect the Phase 1 DBAHA, the Phase 2 DBAHA, the Conditions of Approval, or any affordability covenants or obligations that survive by their terms.

2.5 Transfers and Assignments. OWNER shall have the right to sell, convey, assign, or otherwise transfer all or any portion of its interest in the Property and may assign its rights and

244122517.2
225322-10014
6 obligations under this Agreement, to any person, partnership, joint venture, firm or corporation at any time during the Term of this Agreement, provided that any transferee or assignee acquiring an interest in the Property shall expressly assume in writing the obligations of OWNER under this Agreement applicable to the transferred interest, including any obligations arising under the applicable DBAHA.

Upon the sale, conveyance, assignment or transfer of all or a portion of the interest in the Property, the transferring OWNER shall be released of all obligations under this Agreement that relate solely to the interest of the Property being sold, conveyed, assigned or transferred, provided, however, that the obligations under this Agreement that relate to the portion of the interest in the Property being sold, conveyed, assigned or transferred are expressly assumed by the transferee in a written assignment agreement. The transferring OWNER shall remain liable for any defaults, breaches, or liabilities arising prior to the effective date of transfer. If such transferee fails to perform a material obligation under this Agreement assumed thereby and assigned thereto pursuant to such a written assignment agreement, the CITY, subject to the provisions set forth in Section

7.2, may determine this Agreement to have been materially breached and initiate proceedings to terminate or modify this Agreement, but only with respect to the portion of the interest in the Property held by the particular transferee. Any such partial termination or modification shall not affect the remainder of this Agreement. Any transfer of an interest in the North Lot Property or the South Lot Property shall remain subject to the applicable DBAHA and any recorded affordability covenants affecting such property.

OWNER shall provide the CITY with written notice of any transfer or assignment subject to this Section within thirty (30) days after the effective date of such transfer or assignment, including a copy of the written assignment and assumption agreement. This Agreement shall continue to run with the land and be binding upon all successors and assigns in accordance with Government Code Section 65868. Any failure by OWNER to provide written notice of any transfer or assignment as provided in this Section shall be curable in accordance with the provisions of Section 7.2.

3. Development Provisions.

3.1 Vesting.

3.1.1 Project. CITY covenants that OWNER has, and OWNER shall have, the vested right to develop the Project subject to the terms and conditions of this Agreement, the Development Plan Approvals, the Existing Regulations and any Future Approvals. The vested rights granted by this Agreement include, without limitation, the right to develop the Project in accordance with Precise Plan No. 580, as approved by the City Council, together with all applicable Conditions of Approval, the applicable DBAHA, and to obtain any and all Future Development Approvals necessary to construct and operate the Project in conformity therewith.

Except as otherwise expressly provided in this Agreement, the Development Plan Approvals, including the applicable DBAHA, shall control the design, development, review, and approval of all Future Development Approvals and all on-site and off-site improvements and appurtenances in connection therewith. Except to the extent amended, canceled, modified, or suspended in accordance with the terms of this Agreement, this Agreement shall be enforceable by OWNER

244122517.2
225322-10014
7 and its successors and assigns notwithstanding any change in any Existing Regulation. Any change in or addition to the Existing Regulations adopted or becoming effective after the Effective Date that would conflict in any way with the Existing Regulations, the Development Plan Approvals or this Agreement, shall not be applied to the Property or the Project unless such changes represent an exercise of the City’s Reserved Authority or are otherwise agreed to in this Agreement. Notwithstanding the foregoing, the OWNER may, at it sole discretion, consent to the application to the Project of any change in or addition to the Existing Regulations.

OWNER’S vested rights under this Agreement shall include, without limitation, the right to remodel, renovate, rehabilitate, rebuild, or replace any existing development of the Project or any portion thereof throughout the applicable Term for any reason, including without limitation in the event of damage or destruction, subject to the Existing Regulations and Development Plan Approvals.

3.1.2 Timing of Development. The Parties acknowledge that the OWNER cannot at this time predict when or at what rate the Property will be developed. Such decisions depend on numerous factors that are not all within the control of OWNER, such as market orientation and demand, availability of funds, interest and tax rates, and competition. The Parties acknowledge the holding of Pardee Construction Company v. City of Camarillo (1984) 37 Cal.3d 465, which recognizes that development agreements may define the scope of vested rights and reserved governmental authority, and held that the failure of the parties therein to provide for the timing of development permitted a later adopted initiative restricting the timing of development and controlling the parties agreement. It is the intent of the CITY and OWNER to hereby acknowledge and provide that, except as expressly limited by the Development Plan Approvals, the Conditions of Approval, Future Development Approvals, this Agreement, the applicable DBAHA, and applicable health and safety regulations, OWNER shall have the right to develop the Project in one or more phases, in such order and at such times as OWNER determines in the exercise of its reasonable business judgment, provided that such development complies with this Agreement, the Development Plan Approvals, the applicable DBAHA, the Existing Regulations, and all applicable State and federal laws. The CITY acknowledges that such a right is consistent with the intent, purpose, and understanding of the Parties to this Agreement. Nothing in this Section shall be construed to authorize issuance of any permit for Phase 2 unless and until the Phase 2 DBAHA has been approved, executed, and recorded, or to limit the CITY’s authority to enforce the applicable DBAHA, the Conditions of Approval, or any affordability covenants applicable to the Project.

3.1.3 Impact Fees and Requirements. Except as expressly provided in this Agreement and the Development Plan Approvals, nothing herein shall be construed to prevent the CITY from imposing fees, exactions, dedications, or other requirements that are not subject to vesting under applicable law, including but not limited to: (i) fees or charges imposed by other public agencies or utilities; (ii) fees or requirements imposed pursuant to subsequently enacted state or federal law; or (iii) fees or requirements that are necessary to address public health, safety, or environmental protection and are generally applicable on a Citywide basis (except in the event of natural disasters as found by the City Council such as floods, earthquakes, and similar acts) (and provided that to the extent possible, any such fees or requirements shall be applied and construed so as to provide OWNER with the rights and assurances provided under this Agreement).

244122517.2
225322-10014
8 Except as specifically provided in this Agreement, development impact fees, linkage fees, exactions, assessments or fair-share charges or other similar fees or charges imposed by the City on and in connection with new development (other than processing or inspection fees) that are applicable to the Project shall be limited to those in full force and effect as of the Effective Date.

The amounts of fees subject to vesting under Government Code Section 66007 or other applicable statutes shall vest at the time and in the manner provided by law, and not earlier. Nothing in this Agreement shall be construed to vest any fee, rate, charge, or exaction in a manner inconsistent with applicable law.

Nothing in this Agreement shall be construed to excuse compliance with any timing or performance requirements expressly set forth in the Conditions of Approval or the DBAHA.

3.1.4 Entitlements, Permits and Approvals – Cooperation.

3.1.4.1 Processing. CITY agrees that it shall accept and expeditiously process, pursuant to CITY’s regular procedures, OWNER’s applications for amendments to this Agreement, amendments or modifications to the Development Plan Approvals and the Future Development Approvals.

3.1.4.2 CEQA Compliance. Nothing in this Agreement shall be construed to limit the CITY’s authority or obligation to comply with the California Environmental Quality Act (“CEQA”), the CEQA Guidelines, or any other applicable environmental law. The CITY retains full authority to require additional environmental review, mitigation measures, or project modifications if required by CEQA due to changes in the Project, changes in circumstances, or new information that was not known and could not have been known at the time of approval of the Development Plan Approvals. Except as required by applicable law, the CITY does not intend to impose environmental mitigation measures beyond those identified in the Development Plan Approvals.

3.1.4.3 Other Permits. CITY shall reasonably cooperate with OWNER, at no cost to CITY, in securing any County, State, or Federal permits or authorizations required for development of the Project in accordance with the Development Plan Approvals and any Future Development Approvals. Except as expressly provided in this Agreement, such cooperation shall not require any economic contribution or similar consideration by CITY.

3.1.4.4 Litigation. CITY shall reasonably cooperate with OWNER to keep this Agreement in full force and effect. In the event of any legal action instituted by a third party or governmental entity challenging this Agreement, the Development Plan Approvals or any Future Development Approvals, the Parties shall cooperate in the defense of such action.

3.1.4.5 Acquisition of Off-Site Property. CITY shall not postpone or refuse approval of any Future Development Approval solely because OWNER or its successor or assignee has not yet acquired off-site property required for any off-site improvements, provided OWNER or the applicable Development Transferee makes a good-faith effort to acquire such property and complies with Government Code Section 66462.5, as applicable.

244122517.2
225322-10014
9 3.1.5 Affordable Housing Agreement Controls. Notwithstanding anything to the contrary contained in this Agreement, the terms, covenants, conditions, and obligations relating to the provision, restriction, operation, maintenance, monitoring, and enforcement of affordable housing for the Project shall be governed by the Development Plan Approvals including the applicable DBAHA. Nothing in this Agreement is intended to modify, limit, or terminate any obligation imposed by the applicable DBAHA, all of which shall survive expiration or termination of this Agreement in accordance with their terms. For purposes of this Section, “applicable DBAHA” means the Phase 1 DBAHA with respect to Phase 1 and the Phase 2 DBAHA with respect to Phase 2.

3.1.6 Conditions of Approval Incorporated by Reference. The Project is approved and shall be developed in compliance with all conditions of approval adopted by the Planning Commission in Resolution No. 25-09 and City Council Resolution 9960 approving Precise Plan No. 580 (the “Conditions of Approval”) as they may be modified by any Future Development Approvals. Nothing in this Agreement is intended to modify, limit, or supersede the Conditions of Approval, and compliance with the Conditions of Approval (as they may be modified by any Future Development Approvals) is required in addition to compliance with this Agreement.

3.1.7 Estoppel Certificates. A Party receiving a request from the other Party for an estoppel certificate (an “Estoppel Certificate”) shall, within thirty (30) days after receiving such a request, provide a signed Estoppel Certificate to the requesting Party. The City Manager, or any person designated by the City Manager, may sign Estoppel Certificates on behalf of the CITY. Any officer of OWNER may sign on behalf of the OWNER. An Estoppel Certificate shall address the following: (a) whether this Agreement is in full force and effect and is a binding obligation of the Parties; (b) whether this Agreement has been amended or modified either orally or in writing and, if so amended, identifying the amendments; and (c) confirmation whether a default in the performance of the requesting Party’s obligations under this Agreement exists and, if a default does exist, the nature and amount of any default. Any Estoppel Certificate issued by a Party shall be based on that Party’s actual knowledge as of the date issued and shall not constitute a waiver of any rights or remedies except to the extent expressly stated therein.

3.2 Reserved Authority.

3.2.1 Uniform Codes. This Agreement shall not prevent the CITY from applying new uniform construction standards adopted by the State of California as State Codes, such as the Uniform Building Code, National Electrical Code, Uniform Mechanical Code or Uniform Fire Code, as modified by CITY, to the Development, provided those same standards are applied to all other development within the CITY.

3.2.2 State and Federal Laws and Regulations. Subject to compliance with the requirements of this Section 3.2.2, the Project may be subject to subsequently enacted state or federal laws or regulations that preempt local regulations, mandate the adoption of local regulations, or otherwise conflict with the Development Plan Approvals. Upon discovery of a subsequently enacted federal or state law or regulation meeting the requirements of this Section,

244122517.2
225322-10014
10 CITY or OWNER shall provide the other Party with written notice of such law or regulation, a copy thereof, and a written statement describing the conflict with the provisions of this Agreement.

Promptly thereafter, CITY and OWNER shall meet and confer in good faith in a reasonable attempt to determine whether a modification or suspension of this Agreement, in whole or in part, is necessary to comply with such federal or state law or regulation. In conducting such negotiations, CITY and OWNER agree to preserve the terms of this Agreement and the rights of OWNER derived from this Agreement to the maximum feasible extent while resolving the conflict.

CITY agrees to cooperate with OWNER in resolving the conflict in a manner that minimizes any financial impact upon OWNER, provided that such cooperation does not materially increase the financial obligations of CITY, including obligations related to staff time, consultants, or other costs. CITY further agrees to process, in a prompt manner, OWNER’s proposed changes to the Project as may be necessary to comply with such federal or state law or regulation; provided, however, that approval of such changes shall remain subject to the discretion of CITY, consistent with this Agreement.

3.2.3 Regulations for Health and Safety. With the exception of Section 3.8, nothing in this Agreement shall be construed to limit or restrict the CITY’s police power to protect the public health, and safety through the adoption and application of laws, regulations, ordinances, or policies of general applicability on a Citywide basis, whether or not arising from an emergency or exigent circumstance (and provided that to the extent possible, any such fees or requirements shall be applied and construed so as to provide OWNER with the rights and assurances provided under this Agreement).

Without limiting the foregoing, the CITY may apply subsequently adopted regulations reasonably necessary to address public safety, fire protection, seismic standards, water supply, environmental protection, climate adaptation, or similar matters, provided that such regulations are applied uniformly to development Citywide and do not discriminatorily target the Project; and further provided that the CITY agrees to limit any fire protection requirements for the Project as set forth in Section 3.8 of this Agreement.

In the event the application of such regulations materially affects the Project, the Parties shall meet and confer in good faith to determine whether a modification of this Agreement is appropriate, consistent with applicable law. Nothing in this subsection shall be construed to require the CITY to waive or limit its police power except as provided in this Agreement.

3.3 Processing Fees and Procedural Regulations. This Agreement shall not prevent the CITY from applying (a) processing fees and charges imposed by CITY on a general basis Citywide to cover the estimated actual costs to CITY of processing applications for or monitoring compliance with any permit or entitlement for the Project; or (b) procedural regulations not inconsistent with this Agreement relating to hearing bodies, petitions, applications, notices, findings, records, hearing, reports, recommendations, appeals and any other matter of procedure.

3.4 Further Assurances to OWNER Regarding Exercise of Reserved Authority.

Except as expressly provided in Section 3.1 (Vesting) and Section 3.2 (Reserved Authority), CITY

244122517.2
225322-10014
11 agrees that it shall not apply any subsequently adopted ordinance, rule, regulation, policy, or other governmental action to the Project in a manner that is inconsistent with this Agreement, the Development Plan Approvals, the Existing Regulations or the Future Development Approvals.

CITY agrees to process applications for grading permits, building permits, certificates of occupancy, and other ministerial approvals in good faith and in accordance with applicable law as provided in this Agreement.

3.5 Consistent and Inconsistent Enactments. Except as otherwise expressly provided in this Agreement, the Development Plan Approvals shall govern the development of the Project.

In the event of any conflict between the Existing Regulations and the Development Plan Approvals, the Development Plan Approvals shall control. In the event of any conflict between this Agreement and the Existing Regulations, this Agreement shall control.

Nothing in this Section shall be construed to limit or restrict the CITY’s authority expressly reserved under this Agreement or applicable law, including Section 3.2 (Reserved Authority).

Notwithstanding the foregoing, in the event of any conflict relating to affordable housing obligations, monitoring requirements, enforcement rights, or long-term affordability covenants, relating thereto, the applicable DBAHA shall control, as provided in Section 3.1.5.

3.6 Amendment of Development Agreement.

3.6.1 Initiation of Amendment. Either CITY or OWNER may propose an amendment to this Agreement. Nothing in this Section shall be construed to obligate either Party to agree to any proposed amendment. An operating memorandum, as described in Section 3.6.4, shall not constitute an amendment to this Agreement.

3.6.2 Changes Requiring an Amendment. Except as otherwise required by law, an amendment to this Agreement shall be required only if a proposed action would materially modify the terms of this Agreement, including, without limitation, an amendment that:
(a) materially alters the permitted uses of the Property in a manner inconsistent with Precise Plan No. 580;
(b) materially increases the density or intensity of development beyond that authorized by the Development Plan Approvals; or
(c) materially increases the maximum height or bulk of permitted buildings beyond that authorized by the Development Plan Approvals (d) materially modifies the affordable housing obligations, affordability covenants, monitoring requirements, or enforcement rights under the applicable DBAHA.

The approval of Development Plan Approval amendments or Future Development Approvals that are consistent with this Agreement shall not, by itself, require an amendment to this Agreement, but may, if determined by the City Manager, or designee, to be in substantial

244122517.2
225322-10014
12 conformance with this Agreement, be attached to this Agreement as an addendum and incorporated herein by reference.

3.6.3 Procedure and Approval of Amendments. Any amendment to this Agreement shall be adopted and approved in the same manner required for adoption of this Agreement, including approval by the City Council by ordinance, as required by Government Code Section 65867. Any amendment shall be in writing and executed by duly authorized representatives of the CITY and OWNER. No amendment shall be effective unless and until it becomes legally effective in accordance with applicable law.

3.6.4 Operating Memoranda. The Parties acknowledge that implementation of the Project may require minor technical refinements, clarifications, or administrative adjustments that do not materially alter the terms of this Agreement or the Development Plan Approvals. To that end, CITY and OWNER may mutually approve one or more written operating memoranda to implement this Agreement, provided that such operating memoranda:
(a) are consistent with this Agreement and the Development Plan Approvals; (b) do not materially modify the vested rights granted by this Agreement; and (c) do not require approval by the City Council under applicable law.

Operating memoranda may be approved by the City Manager, or designee, on behalf of the CITY and by an authorized representative of OWNER. Upon execution, any operating memorandum shall be attached to this Agreement as an addendum and incorporated herein by reference.

3.7 Order of Precedence. In the event of any conflict or inconsistency among the documents governing the Project, the following order of precedence shall apply:
(a) Federal and State law, including but not limited to the California Environmental Quality Act and the State Density Bonus Law; (b) Precise Plan No. 580, including its Conditions of Approval, as adopted by City Council Resolution 9960;
(c) The applicable DBAHA;
(d) This Agreement; and
(e) The Existing Regulations.

Nothing in this Section shall be construed to limit the CITY’s authority expressly reserved under this Agreement or applicable law.

3.8 Fire Protection Payment. A fire protection payment of Seven Hundred Fifty Thousand Dollars ($750,000) (the “Fire Protection Payment”) shall be paid as follows:

244122517.2
225322-10014
13 3.8.1 NORTH LOT OWNER shall pay to the CITY the amount of Three Hundred Eighty-Seven Thousand Dollars ($387,000) prior to issuance of any Certificate of Occupancy for any residential unit in Phase 1.

3.8.2 SOUTH LOT OWNER shall pay to the CITY the amount of Three Hundred Sixty-Three Thousand Dollars ($363,000) prior to issuance of any Certificate of Occupancy for a residential unit in Phase 2.

3.8.3 The obligations in Section 3.8 of this Agreement shall constitute OWNER’s sole and exclusive obligations for any fire protection fee, payment or other obligation for fire protection in connection with the Project (other than compliance with uniform construction standards adopted by the State of California as State Codes, or any other applicable state or federal law), and the CITY shall not impose or seek to impose upon the Project, or any portion or phase thereof, any different or additional fire protection fee, payment or other obligation; provided, however, that in the event that Project development is not in substantial conformance with the Development Plan Approvals, the CITY shall be entitled, in accordance with applicable law and this Agreement, to seek to impose any different or additional fire protection fee, payment or other obligation that is reasonably necessary as a result of any such changes to the Project.

4. Indemnification.

OWNER shall defend, indemnify, and hold harmless the CITY and its officers, officials, employees, agents, and contractors from and against any and all claims, actions, proceedings, damages, judgments, costs, and expenses, including reasonable attorneys’ fees, arising out of or related to any claim or action brought to set aside, void, or annul the approval or adoption of this Agreement, except to the extent caused by the active negligence or willful misconduct of the CITY or its officers, officials, employees, agents, or contractors. Without limiting the foregoing, OWNER shall be responsible for all CITY costs incurred in connection with the defense of ANY such claim or action, including reasonable attorneys’ fees, expert costs, consultant costs, administrative record preparation costs, document production costs, and staff time.

The CITY shall promptly notify OWNER of any such claim or action and shall reasonably cooperate in the defense thereof. OWNER shall have the right to control the defense and settlement of such claim or action, provided that no settlement shall be entered into without the CITY’s prior written consent if the settlement would impose any obligation, admission, or liability on the CITY.

5. Relationship of Parties.

OWNER is not an agent or employee of the CITY. Nothing contained in this Agreement or in any document executed in connection with the Project shall be construed to create a partnership, joint venture, or other joint enterprise between the CITY and OWNER. The CITY and OWNER expressly disclaim the existence of any such relationship.

6. Periodic Review of Compliance with Agreement.

6.1 Periodic Review. The CITY and OWNER shall review this Agreement at least once every twelve (12) months from the Effective Date until this Agreement terminates, for the

244122517.2
225322-10014
14 purpose of determining good faith compliance by OWNER with the material terms of this Agreement. The CITY shall commence each periodic review by providing OWNER with written notice of the date for the periodic review at least sixty (60) days prior to the scheduled review.

6.2 Good Faith Compliance. During each periodic review, OWNER shall demonstrate good faith compliance with the material terms of this Agreement . Substantial compliance with material provisions shall be sufficient. Generalized evidence or statements of compliance may be accepted unless the CITY has reasonable evidence indicating noncompliance.

If, following a periodic review conducted in accordance with Government Code Section 65865.1, the CITY determines that OWNER has not complied in good faith with the material terms of this Agreement, the CITY may initiate proceedings to modify or terminate this Agreement in accordance with applicable law. The CITY’s failure to identify a noncompliance during any particular review shall not be deemed a waiver of the CITY’s rights under this Agreement or applicable law.

6.3 Failure to Conduct Annual Review. The failure of the CITY to conduct a periodic review shall not constitute a breach of this Agreement by any Party.

6.4 City Council-Initiation of Review. The City Council may initiate a review of this Agreement at any time by providing written notice to OWNER identifying the issues to be reviewed and the information requested. OWNER shall respond within thirty (30) days, and the review shall proceed in the same manner as an annual review.

6.5 Administration and Appeal. Any final determination by CITY staff regarding interpretation or administration of this Agreement may be appealed by OWNER directly to the City Council in accordance with the CITY’s standard appeal procedures.

6.6 Availability of Documents. Upon request and reimbursement of reasonable costs, the CITY shall provide OWNER copies of documents prepared or reviewed in connection with a periodic compliance review, subject to applicable public records laws.

7. Events of Default; Remedies.

7.1 Enforcement. This Agreement shall be enforceable by the CITY and OWNER and its successors and assigns in accordance with its terms and applicable law.

7.2 Default by OWNER. If the CITY determines that any OWNER has failed to comply in good faith with a material term of this Agreement, the CITY shall provide OWNER with written notice specifying the nature of the alleged default and the actions required to cure such default. OWNER shall have sixty (60) days from receipt of such notice to commence cure of the default and thereafter diligently pursue such cure to completion. If OWNER fails to timely cure the default, the CITY may pursue any remedy available at law or equity, including termination of this Agreement pursuant to Government Code Section 65865.1.

7.3 Default by CITY. If OWNER determines that the CITY has failed to comply in good faith with a material term of this Agreement, OWNER shall provide the CITY with written

244122517.2
225322-10014
15 notice specifying the nature of the alleged default and the actions required to cure such default.

The CITY shall have sixty (60) days from receipt of such notice to commence cure and thereafter diligently pursue such cure to completion. If the CITY fails to timely cure the default, OWNER may pursue any remedy available at law or equity.

7.4 Remedies Not Exclusive. The remedies provided in this Agreement are cumulative and not exclusive. Nothing in this Agreement shall be construed to obligate OWNER to commence or complete development of the Property.

8. Waivers and Delays.

8.1 No Waiver. The failure of either Party at any time to require performance by the other Party of any provision of this Agreement shall not affect the right to require such performance at any later time. Any waiver of a breach must be in writing and shall not be deemed a waiver of any subsequent breach.

8.2 No Excuse by Third Parties. Except as expressly provided in Section 8.3 (Force Majeure), the failure of a third party shall not excuse the performance of a Party’s obligations under this Agreement.

8.3 Force Majeure. Neither CITY nor OWNER shall be deemed in default under this Agreement where failure or delay in performance of any obligation is caused by events beyond the reasonable control of the affected Party, including acts of God, fire, flood, earthquake, war, riot, labor disputes, court orders, or actions or inactions of other governmental agencies not related to the normal and customary processing of permits and approvals. The affected Party shall use reasonable efforts to resume performance as soon as practicable.

8.4 Effect of Force Majeure. The time for performance of the affected obligation shall be extended for the period during which performance is prevented by the Force Majeure event.

Any extension of the Term of this Agreement shall occur only to the extent expressly provided in Section 2.3.

8.5 Notice of Delay. The Party claiming a delay due to Force Majeure shall provide written notice to the other Party within a reasonable time after the affected Party becomes aware of the delay.

9. Notices.

All notices required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by certified mail (return receipt requested), or sent by a nationally recognized overnight courier service. Notices shall be addressed as follows, or to such other address as a Party may designate by written notice given in accordance with this Section.

If to CITY:

City of Fountain Valley
10200 Slater Avenue

244122517.2
225322-10014
16 Fountain Valley, CA 92691
Attn: City Manager
With a copy to:

Harper & Burns LLP
453 S Glassell St.

Orange, CA 92866
Attn: Colin Burns
If to OWNER:

Magnolia I Owner, LLC
808 Washington St, Ste 500
Vancouver, WA 98660
Attn: George Elum, Managing Director
AND
HPG Magnolia II, LLC
808 Washington St, Ste 500
Vancouver, WA 98660
Attn: George Elum, Managing Director
With a copy to:

Loeb & Loeb LLP
10100 Santa Monica Boulevard, Suite 2200
Los Angeles CA 90067
Attn: Elizabeth Camacho
Any notice given in accordance with this Section shall be effective upon receipt or refusal of delivery. A Party may change its notice address by written notice to the other Party given in accordance with this Section.

10. Attorneys’ Fees.

If any legal action or proceeding is brought by a Party against another Party to enforce, interpret, or determine the rights or obligations under this Agreement, including any action alleging a breach of this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees and costs incurred in such action or proceeding. To the extent applicable, recoverable costs shall include the prevailing Party’s proportionate share of the costs of any referee or reference proceeding authorized under this Agreement.

244122517.2
225322-10014
17 11. Recording.

This Agreement, and any amendment or cancellation hereof, shall be recorded in the Official Records of Orange County, California, within the time required by Government Code Section 65868.5. Recording shall be performed by the City Clerk or designee.

12. Effect of Agreement on Title; Lender Protections.

12.1 Effect on Title. This Agreement shall run with the Property during the Term. Upon termination or release of this Agreement as to any portion of the Property, this Agreement shall no longer constitute an encumbrance against such portion. Upon request, the Parties shall execute and record appropriate instruments evidencing such termination or release.

12.2 Lender Notice and Cure Rights. Any mortgagee or beneficiary of a deed of trust encumbering all or any portion of the Property (a “Lender”), and its successors or assigns, shall be entitled, upon written request to the CITY, to receive written notice of any uncured default by OWNER under this Agreement.

12.3 Lender Cure; No Termination as to Lender. The CITY shall not terminate this Agreement as to any portion of the Property subject to a deed of trust so long as the applicable Lender:
(a) cures any monetary default within ninety (90) days after receipt of written notice from the CITY; or
(b) with respect to non-monetary defaults requiring possession or title to cure, within ninety (90) days after receipt of notice:

1. agrees in writing to assume and perform OWNER’s obligations allocable to the portion of the Property securing its loan, contingent upon acquisition of title;

2. commences foreclosure or other lawful proceedings to acquire title and diligently prosecutes such proceedings; and

3. promptly commences cure of the default after acquiring title or possession.

If foreclosure or cure is stayed or prohibited by court order, bankruptcy, or similar legal restraint, the applicable cure periods shall be extended for the duration of such prohibition.

Nothing in this Section shall limit, impair, or delay the CITY’s ability to enforce the applicable DBAHA, any recorded affordability covenant, or any obligation that survives termination of this Agreement.

12.4 Priority of Liens; Subordination. Neither entering into this Agreement nor a breach of this Agreement shall defeat, render invalid, diminish or impair the lien of any mortgage deed of trust or other security device securing financing with respect to the Property or any portion

244122517.2
225322-10014
18 thereof made in good faith and for value, unless otherwise required by law. The Parties hereto agree that this Agreement shall not prevent or limit OWNER, in any manner, at OWNER’s sole discretion, from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust or other security device securing financing with respect to the Property or any portion thereof. Any deed of trust encumbering the Property or any portion thereof shall be superior to this Agreement, except that nothing in this Section shall subordinate, impair, or otherwise affect the priority or enforceability of the applicable DBAHA or any recorded affordability covenant or related instrument required thereunder. At the request of any Lender, the CITY shall execute a customary subordination agreement subordinating the CITY’s interest under this Agreement to the lien of such deed of trust, subject to reasonable approval by the CITY. No such subordination shall authorize any use or development of the Property other than as permitted by this Agreement, the Development Plan Approvals and any Future Development Approvals.

CITY may meet with OWNER and representatives of any lender to consider requests by lender for interpretation or modification of this Agreement; provided, however, that any modification shall remain subject to the amendment procedures and approvals required by this Agreement and applicable law.

12.5 No Lender Liability Absent Election to Develop. No Lender shall be obligated to perform OWNER’s obligations under this Agreement, nor be liable for any default or monetary obligation of OWNER, unless and until such Lender acquires title to the Property and elects to develop the Property in accordance with this Agreement. Upon such election, the Lender shall assume OWNER’s obligations applicable to the portion of the Property it owns.

13. Severability and Statutory Reliance.

This Agreement is entered into in reliance upon the Development Agreement statutes set forth in Government Code Sections 65864 through 65869.5, as in effect on the Agreement Date.

Except as otherwise required by state or federal law, any amendment to such statutes enacted after the Agreement Date shall not apply to this Agreement unless this Agreement is amended in accordance with its terms.

14. Subsequent Amendment to Authorizing Statute.

This Agreement has been entered into in reliance upon the provisions of the Development Agreement Legislation in effect as of the Agreement Date. Accordingly, subject to applicable law, to the extent that subsequent amendments to the Government Code would affect the provisions of this Agreement, such amendments shall not be applicable to this Agreement unless necessary for this Agreement to be enforceable or required by law or unless this Agreement is modified pursuant to the provisions set forth in this Agreement.

15. Rules of Construction and Miscellaneous Terms.

15.1 Interpretation and Governing Law. This Agreement shall be construed as a whole and according to its fair meaning. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California. Nothing in this Agreement shall be construed as an impermissible surrender or abrogation of the CITY’s

244122517.2
225322-10014
19 legislative or police powers, except as expressly authorized by Government Code Sections 65864 through 65869.5.

15.2 Section Headings. All Section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.

15.3 Gender. The singular includes the plural; the masculine gender includes the feminine; “shall” is mandatory, “may” is permissive.

15.4 No Joint and Several Liability. No breach of this Agreement by a Party shall constitute a breach by any other Party. Any obligation, remedy, or liability arising from a breach shall apply solely to the Party committing such breach.

15.5 Covenant of Good Faith and Fair Dealing. Each Party agrees to act in good faith and to refrain from any action that would materially interfere with the other Party’s ability to receive the benefits of this Agreement.

15.6 No Waiver of Vesting. Nothing in this Agreement shall be construed to waive, limit, or impair any vested rights arising from valid land use approvals, entitlements, or applicable law, whether approved prior to, concurrently with, or after the approval of this Agreement.

15.7 Time of Essence. Time is of the essence regarding each provision of this Agreement of which time is an element.

15.8 Recitals. The Recitals are incorporated into this Agreement and are a material part hereof.

15.9 Entire Agreement. This Agreement constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all prior negotiations, discussions, or agreements. This Agreement may be amended only in writing in accordance with its terms.

16. Extension of Maps.

Pursuant to Government Code Section 66452.6(a), the expiration date of any tentative map approved for all or any portion of the Property shall be automatically extended for the longer of:
(i) the Term of this Agreement, or (ii) the maximum period otherwise permitted by law. In addition, notwithstanding Section 3.6 (Order of Precedence), Condition of Approval No. 21 of Precise Plan No. 580, or any other contrary provision of this Agreement or the Development Plan Approvals, Precise Plan No. 580, the CEQA Addendum, the Conditions of Approval, and all other discretionary land use approvals constituting the Development Plan Approvals shall remain valid and effective for the full Term of this Agreement. The foregoing approvals shall remain in full force and effect throughout the Term of this Agreement without the necessity of obtaining any separate extension or renewal.

244122517.2
225322-10014
20 17. Not for Benefit of Third Parties.

This Agreement is entered into solely for the benefit of the CITY and OWNER, and their successors and permitted assigns. Nothing in this Agreement is intended to, nor shall it, create any rights in or for the benefit of any third party. In addition, notwithstanding Section 3.6 (Order of Precedence), Condition of Approval No. 21 of Precise Plan No. 580, or any other contrary provision of this Agreement or the Development Plan Approvals, Precise Plan No. 580, the CEQA Addendum, the Conditions of Approval, and all other discretionary land use approvals constituting the Development Plan Approvals shall remain valid and effective for the full Term of this Agreement. The foregoing approvals shall remain in full force and effect throughout the Term of this Agreement without the necessity of obtaining any separate extension or renewal.

18. Attachments.

The following attachments are incorporated into this Agreement by this reference as if fully set forth herein. In the event of any conflict between the provisions of this Agreement and any Attachment, the provisions of this Agreement shall control unless expressly stated otherwise.

Exhibit A: Legal Description of the North Lot Property
Exhibit B: Legal Description of the South Lot Property

19. Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures transmitted electronically shall be deemed original signature.

20. Coordination with Density Bonus and Affordable Housing Agreement.

Nothing in this Agreement is intended to duplicate, supersede, or modify the affordable housing requirements, unit counts, income restrictions, affordability periods, or density bonus provisions established in the applicable DBAHA. In the event of any conflict or inconsistency between the terms of this Agreement and the applicable DBAHA, the terms of the applicable DBAHA shall control with respect to affordable housing obligations, affordability periods, and related covenants.

Notwithstanding any termination or expiration of this Agreement, all obligations, covenants, restrictions, monitoring requirements, and enforcement rights set forth in the Development Plan Approvals, including the applicable DBAHA, shall survive and remain enforceable in accordance with their terms.

244122517.2
225322-10014
21 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year dated below.

Dated: _______________, 2026 “CITY”
CITY OF FOUNTAIN VALLEY, a municipal Corporation
By:

Name: Jim Cunneen
Title: Mayor
ATTEST:

City Clerk
APPROVED AS TO FORM:

City Attorney
Dated: _______________, 2026 MAGNOLIA I OWNER, LLC,
a Delaware limited liability company
By: Magnolia I Investor, LLC,
a Delaware limited liability company,
its Sole Member
By: HPG Magnolia, LLC,
a Washington limited liability company,
its Managing Member
By: Holland Partner Group Management, Inc.,
a Delaware corporation,
its Manager
By:

Name:

Title:

244122517.2
225322-10014
22 HPG Magnolia II, LLC,
a Washington limited liability company
By: Holland Partner Group Management, Inc.,
a Delaware corporation,
its Manager
By
Name:

Title:

244122517.2
225322-10014
23 EXHIBIT A

LEGAL DESCRIPTION OF NORTH LOT PROPERTY
The North Lot Property consists of the following parcels located in the City of Fountain Valley, County of Orange, State of California:

PARCEL A (APN: 143-294-04):

THAT PORTION OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 10 WEST,

IN THE RANCHO LAS BOLSAS, CITY OF FOUNTAIN VALLEY, COUNTY OF ORANGE, STATE OF CALIFORNIA, PER MAP RECORDED IN BOOK 51, PAGE 12 OF

MISCELLANEOUS MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID

COUNTY, AS DESCRIBED IN THE DEED TO THE ORANGE COUNTY FLOOD CONTROL DISTRICT, RECORDED JULY 14, 1984 IN BOOK 7133, PAGE 509 OF OFFICIAL RECORDS IN THE OFFICE OF SAID COUNTY RECORDER.

EXCEPT THAT PORTION THEREOF LYING EASTERLY AND SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINES:

BEGINNING AT THE NORTHWEST CORNER OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SAID SECTION 19;

THENCE ALONG THE NORTH LINE OF SAID SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER NORTH 87° 34' 01" EAST,

98.94 FEET TO THE TRUE POINT OF BEGINNING, SAID POINT BEING ON A NONTANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 179.84 FEET, A RADIAL LINE OF SAID CURVE THROUGH SAID POINT BEARS NORTH 52° 19' 55" WEST; THENCE SOUTHWESTERLY 67.46 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 21° 29' 33" TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHWESTERLY AND HAVE A RADIUS OF 122.50 FEET; THENCE SOUTHERLY AND SOUTHWESTERLY 33.95 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 18° 13' 08" TO THE EASTERLY LINE OF THE LAND DESCRIBED AS "PARCEL 2A" IN THE FINAL ORDER OF CONDEMNATION RENDERED IN SUPERIOR COURT CASE NO. 105675 A CERTIFIED COPY OF WHICH WAS RECORDED AUGUST 05, 1963 IN BOOK 6662, PAGE 132 OF SAID OFFICIAL RECORDS.

EXCEPTING THEREFROM THAT PORTION OF THE LAND CONDEMNED TO ORANGE

COUNTY TRANSPORTATION AUTHORITY, A PUBLIC ENTITY AS EVIDENCED BY FINAL ORDER OF CONDEMNATION RECORDED ON JULY 08, 2021 AS INSTRUMENT NO. 2021-441526 OF OFFICIAL RECORDS.

PARCEL B (APN: 143-294-03)
THAT PORTION OF THE SOUTHWEST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 10 WEST, IN THE RANCHO LAS BOLSAS, AS SHOWN ON A MAP RECORDED

244122517.2
225322-10014
24 IN BOOK 51, PAGE 12 OF MISCELLANEOUS MAPS IN THE OFFICE OF THE COUNTY

RECORDER OF ORANGE COUNTY, CALIFORNIA, AS ACQUIRED BY THE STATE OF CALIFORNIA BY DEED RECORDED IN BOOK 5957, PAGE 902 OF OFFICIAL RECORDS

IN SAID OFFICE, BOUNDED GENERAL SOUTHERLY BY THAT CERTAIN PARCEL OF

LAND CONVEYED BY THE STATE OF CALIFORNIA BY DEED RECORDED IN BOOK 7374, PAGE 521 OF SAID OFFICIAL RECORDS; BOUNDED WESTERLY BY THE

NORTHERLY PROLONGATION OF THAT CERTAIN COURSE HAVING A BEARING OF SOUTH 03 DEGREES 29' 51" WEST, AS SHOWN IN PARCEL 7 OF STATE HIGHWAY RELINQUISHMENT NO. 553 RECORDED IN BOOK 8387, PAGE 528 OF SAID OFFICIAL RECORDS; AND BOUNDED NORTHEASTERLY AND NORTHWESTERLY BY THE FOLLOWING DESCRIBED LINE:

BEGINNING AT THE NORTHWESTERLY TERMINUS OF THAT CERTAIN COURSE HAVING A BEARING OF NORTH 46 DEGREES 53' 32" WEST, AS DESCRIBED IN SAID CERTAIN PARCEL OF LAND SO CONVEYED, RECORDED IN BOOK 7374, PAGE 521 OF SAID OFFICIAL RECORDS; THENCE ALONG THE NORTHWESTERLY
PROLONGATION OF LAST SAID COURSE, NORTH 46 DEGREES 53' 32" WEST 99.93 FEET; THENCE NORTH 44 DEGREES 01' 46" WEST 536.68 FEET; T0HENCE SOUTH 59 DEGREES 07' 27" WEST TO SAID NORTHERLY PROLONGATION.

EXCEPTING THEREFROM THAT PORTION OF THE LAND CONDEMNED TO ORANGE

COUNTY TRANSPORTATION AUTHORITY, A PUBLIC ENTITY AS EVIDENCED BY FINAL ORDER OF CONDEMNATION RECORDED ON JULY 08, 2021 AS INSTRUMENT NO. 2021-441526 OF OFFICIAL RECORDS.

EXCEPTING THEREFROM, ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS,

NATURAL GAS, NATURAL GAS RIGHTS, AND OTHER HYDROCARBONS BY

WHATSOEVER NAME KNOWN THAT MAY BE WITHIN OR UNDER THE PARCEL OF

LAND HEREINABOVE DESCRIBED, TOGETHER WITH THE PERPETUAL RIGHT OF

DRILLING, MINING, EXPLORING AND OPERATING THEREFROM, AND REMOVING

THE SAME FROM SAID LAND OR ANY OTHER LAND, INCLUDING THE RIGHT TO

WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN

THOSE HEREINABOVE DESCRIBED, OIL OR GAS WELLS, TUNNELS AND SHAFTS

INTO, THROUGH OR ACROSS THE SUBSURFACE OF THE LAND HEREINABOVE

DESCRIBED, AND TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED

WELLS, TUNNELS AND SHAFTS UNDER AND BENEATH OR BEYOND THE EXTERIOR

LIMITS THEREOF, AND TO REDRILL, RETUNNEL, EQUIP, MAINTAIN, REPAIR,

DEEPEN AND OPERATE ANY SUCH WELLS OR MINES, WITHOUT, HOWEVER, THE

RIGHT TO DRILL, MINE, EXPLORE AND OPERATE THROUGH THE SURFACE OR THE UPPER 100 FEET OF THE SUBSURFACE OF THE LAND HEREINABOVE DESCRIBED,

OR OTHERWISE IN SUCH MANNER AS TO ENDANGER THE SAFETY OF ANY

HIGHWAY THAT MAY BE CONSTRUCTED ON SAID LANDS, IN INSTRUMENT RECORDED AUGUST 5, 1963 IN BOOK 6662, PAGE 34 OF OFFICIAL RECORDS

244122517.2
225322-10014
25 EXHIBIT B

LEGAL DESCRIPTION OF SOUTH LOT PROPERTY
The South Lot Property consists of the following parcel located in the City of Fountain Valley, County of Orange, State of California:
(APN: 143-301-32 and 143-301-42)
PARCEL 1, IN THE CITY OF FOUNTAIN VALLEY, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 82, PAGE 19 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY.

EXCEPTING THEREFROM THAT PORTION OF THE LAND CONDEMNED TO ORANGE

COUNTY TRANSPORTATION AUTHORITY, A PUBLIC ENTITY AS EVIDENCED BY FINAL ORDER OF CONDEMNATION RECORDED ON JULY 08, 2021 AS INSTRUMENT NO. 2021-441526 OF OFFICIAL RECORDS.

EXCEPTING THEREFROM, ALL OIL, PETROLEUM, NATURAL GAS, MINERAL RIGHTS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 500

VERTICAL FEET FROM SURFACE OF SAID LAND, OR THROUGH ANY PORTION THEREOF ABOVE SAID 500-FOOT DEPTH, FOR THE PURPOSE OF EXPLORING FOR,

EXTRACTING, MINING,

BORING, REMOVING OR MARKETING SAID SUBSTANCES, AS RESERVED BY GULF

OIL CORPORATION, A PENNSYLVANIA CORPORATION, IN A DEED RECORDED OCTOBER 12, 1967 IN BOOK 8401, PAGE 398 OF OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM, ALL RIGHTS TO UNDERGROUND WATER,

WITHOUT THE RIGHT OF SURFACE ENTRY, AS DEDICATED TO THE CITY OF FOUNTAIN VALLEY ON THE MAP OF SAID TRACT.

244122517.2
225322-10014
26 SPACE RESERVED FOR NOTARY ACKNOWLEDGMENT

RESOLUTION NO.________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FOUNTAIN VALLEY APPROVING THE DENSITY BONUS AND
AFFORDABLE HOUSING AGREEMENT (PHASE 1 – NORTH BUILDING AT 16800 MAGNOLIA STREET, FOUNTAIN VALLEY) BETWEEN THE CITY

AND MAGNOLIA I OWNER, LLC RELATING TO THE DEVELOPMENT ON THE NORTH LOT THE 339-UNIT PHASE 1 DEVELOPMENT, INCLUDING 39 AFFORDABLE UNITS, AS THE FIRST PHASE OF THE TWO PHASE 657-UNIT MIXED-USE DEVELOPMENT LOCATED AT 16800 MAGNOLIA STREET AND 9025-9063 RECREATION CIRCLE
WHEREAS, the City of Fountain Valley (“City”) is a California municipal corporation; and
WHEREAS, the City of Fountain Valley Planning Commission (“Planning Commission”) acts in accordance with the ordinances of the City and laws of the State of California (“State”) and thereby is authorized to make recommendations to the City Council and in certain instances to take final action with regard to certain land use decisions and approvals for development within the City; and WHEREAS, the Fountain Valley General Plan Update was approved by the City Council on November 21, 2023 through Resolution No. 9903; and WHEREAS, the City is obligated by State law and the Housing Element of the General Plan to plan for the community’s supply of low to moderate income housing to meet the City’s objectives to achieve its Regional Housing Needs Allocation (“RHNA”); and WHEREAS, in furtherance of the objectives of the Housing Element of the General Plan, the City has affirmed their intention to improve and increase the community’s supply of multi-family affordable housing available at an affordable rent and affordable housing cost and covenanted for the longest feasible period; and WHEREAS, Magnolia I Owner, LLC, a Delaware limited liability company (“Developer” or “Owner”) is the fee owner of certain real property located at 16800 Magnolia Street (APN Nos. 143-294-03, 143-294-04) (“Phase 1 Site” or “North Lot”), and as legal described in the legal description of the Phase 1 Site, Attachment No. 2, to that certain Density Bonus and Affordable Housing Agreement (Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley) (“Phase 1 DBAHA”) attached to and presented with this agenda item; and WHEREAS, capitalized terms used in this Resolution are as defined in the Phase 1 DBAHA unless otherwise defined herein; and
WHEREAS, on June 11, 2025 the Planning Commission considered and approved Developer’s application for land use entitlements to construct, develop and operate within a

6.87-acre assembled site (“Site”) mixed use development that will include: (i) 657 multifamily residential units, including 78 Affordable Units, and (ii) 4,460 square feet of ground-floor commercial use, within two (2) seven-story buildings partially surrounding two (2) seven-story parking structures with rooftop parking located at 16800 Magnolia Street and 9025-9063 Recreation Circle (“Project”); and

2 WHEREAS, the 6.87-acre overall Site includes the Phase 1 Site or North Lot owned by the Developer that is the subject of the Phase 1 development, and the “Phase 2 Site” or “South Lot” that is owned by a separate entity, HPG Magnolia II, LLC, a Washington limited liability company, that will be the subject of the second phase of the entitled Project; and WHEREAS the land use Entitlement approved for the Project includes the following actions considered and approved in accordance with the Fountain Valley Municipal Code (FVMC) and applicable State laws:
• Per FVMC Chapter 21.44, by Resolution 25-09, the Planning Commission approved Precise Plan No. 580 required for the development of the structures that comprise the Project, which is contingent upon the City Council’s consideration and approval to execute and enter into two Density Bonus Affordable Housing Agreements for the two-phased Project, including Phase 1 DBAHA affecting the Phase 1 development on the North Lot and the “Phase 2 DBAHA” affecting the Phase 2 development on the South Lot, each and both to implement the development and long-term operation of the 78 Affordable Untis within the respective phases of the Project as required by the density bonus sought by and granted to Holland Partner Group (“Applicant”), approved by the City for the Project pursuant to the California Density Bonus Law, Government Code Section 65915, et seq. and Fountain Valley Municipal Code (FVMC), Chapter 21.08.050(a), (together, ”DBL”), and the City’s Inclusionary Housing Program. • Condition of Approval No. 24 of Planning Commission Resolution No. 25-09 requires the City and Developer to enter into the Phase 1 DBAHA as a condition precedent to the issuance of the Initial City Permit for the Phase 1 Project, which Phase 1 DBAHA evidences compliance with the DBL and the City’s Inclusionary Housing Program as to 39 (of 78) Affordable Units within the Phase 1 development subject to recorded affordability restrictions for a 55-year Affordability Period. o When the Phase 2 development is undertaken, also pursuant to Condition of Approval No. 24 of Planning Commission Resolution No. 25-09 the City and Phase 2 owner shall enter into a Phase 2 DBAHA as a condition precedent to the issuance of the Initial City Permit for the Phase 2 development , which will evidence compliance with the DBL and the City’s Inclusionary Housing Program as to balance of 39 Affordable Units (of 78) within the Phase 2 development also subject to separate recorded affordability restrictions for a 55-year Affordability Period.
• The City of Fountain Valley prepared an Addendum to the Final EIR for the 2045 Fountain Valley General Plan (State Clearinghouse No. 2022100563).

The Draft Environmental Impact Report (“DEIR”) for the 2045 Fountain Valley General Plan (State Clearinghouse No. 2022100563) addressed the potential environmental effects associated with implementation of the Project. Pursuant to Public Resources Code Section 21165 and the California Environmental Quality Act Guidelines (CEQA Guidelines) Section 15050, the City of Fountain Valley is the lead agency for the Project. Pursuant to Public Resources Code Section 21083 and CEQA Guidelines Section 15087, the DEIR was available for a 45-day public review from Friday, June 9, 2023, through Monday, July 24, 2023. A hard copy of the full DEIR was made available to all interested persons at City Hall and posted online at: https://www.fountainvalley.org/1282/General-Plan-Update.

3 In conformance with CEQA, State CEQA Guidelines, and the City CEQA Guidelines, the City of Fountain Valley conducted an extensive environmental review of the Project.
o A Notice of Preparation (NOP) of the DEIR was completed on October 25, 2022. The public review period occurred between October 25, 2022 to November 24, 2022. The NOP was published in the Fountain Valley View on October 25, 2022. The NOP was posted at the Orange County Clerk’s office on October 25, 2022. Copies of the NOP were mailed to interested persons and organizations.
o Preparation of the DEIR was made available for a 45-day public review period beginning June 9, 2023, and ending July 24, 2023. The scope of the DEIR was determined based on the CEQA Guidelines Appendix G Checklist, and comments received in response to the NOP. The Notice of Availability (NOA) for the DEIR was sent to interested persons and organizations, sent to the State Clearinghouse in Sacramento for distribution to public agencies, posted at the City of Fountain Valley’s website, and published in the Fountain Valley View. The NOA of the DEIR was both posted at the Orange County Clerk’s office and published in the Fountain Valley View on June 8, 2023. o A Final EIR was prepared that includes responses to comment letters received during the 45-day public review period. Pursuant to Public Resources Code Section 21092.5, a copy of the Final EIR was distributed to all commenting governmental agencies and departments at least 10 days prior to certification of the Final EIR.
o Both the DEIR and Final EIR were made available at City Hall and online at:
https://www.fountainvalley.org/1282/General-Plan-Update. o The General Plan FEIR was certified by the City Council on November 21, 2023. An Addendum to the FEIR (Exhibit 1 of Planning Commission Resolution No. 25-08) has been prepared to identify whether the proposed revisions would result in any new significant impacts beyond those identified in the General Plan FEIR (CEQA Guidelines Section 15162).
o As detailed in the Addendum, on the basis of substantial evidence in the light of the whole record, a Subsequent or Supplemental EIR is not required for the proposed Project because none of the criteria requiring such a document under Public Resources Code Section 21166 or State CEQA Guidelines section 15162 are met.
o The Project would result in no new significant impacts that were not analyzed in the General Plan FEIR, nor would the proposed Project cause a substantial increase in the severity of any previously identified significant impacts. The potential impacts associated with the proposed Project would either be the same or less than those described in the General Plan FEIR. In addition, there are no substantial changes to the circumstances under which the proposed Project would be undertaken that would result in new or more severe environmental impacts than previously addressed in the General Plan FEIR, nor has any new information regarding the potential for new or more severe significant environmental impacts been identified. Therefore, in accordance with Section 15164 of the State CEQA Guidelines, an Addendum to the

4 previously certified General Plan FEIR has been prepared for the proposed Project.
o The Planning Commission, as the Lead Agency, arrived at its independent judgement and found that on the basis of the Addendum and any comments received that there is no substantial evidence that the Project would have a significant adverse impact on the environment provided that the mitigation measures identified in the environmental document are incorporated into the Project.

WHEREAS, pursuant to the DBL, owners of residential projects that include certain levels of affordable housing are entitled to seek, apply for, and receive a density bonus and additional incentives/concessions and waivers/reductions in order to facilitate the development feasibility of those projects; and
WHEREAS, pursuant to the City’s Inclusionary Housing Program, FVMC 21.17.040(a) (“Inclusionary Ordinance”), developers/owners of residential development projects shall include certain onsite 15% of base units as covenanted affordable housing or exercise of the In-Lieu Fee Option by which payment of a per/unit In-Lieu Fee occurs instead of onsite inclusionary affordable housing (albeit and notwithstanding, for both phases of this Project the DBL requires Developer to cause construction, completion and operation of all 78 Affordable Units within the two phases because the DBL does not allow payment of in-lieu fees to circumvent development of the DBL-required affordable units); and WHEREAS, the Applicant submitted an application to the City evidencing its intention to comply with the DBL and the City’s Inclusionary Housing Program by reserving fifteen percent (15%) of its base units as affordable to Low Income Households earning less than 80 percent of the Orange County area median income (“AMI”), which equates to a total of 78 on-site Affordable Units for occupancy by Low Income Households at an Affordable Rent for a 55-year Affordability Period; and WHEREAS, by providing 15 percent of its base units as affordable, the overall Project will exercise a 27.5 percent (i.e., 142-unit) density bonus option pursuant to the DBL which the Applicant elected, sought, applied for, and received approval to construct 142 density bonus units for a density bonus of 27.5 percent, albeit and nonetheless the City’s Inclusionary Housing Program requires 15% affordable units; and
WHEREAS, the DBL allows the City to approve one incentive/concession and certain waivers/reductions for the Project because the Applicant agreed to include 78 Affordable Units in the Project as to be covenanted and restricted for occupancy by Low Income Households at an Affordable Rent for the 55-year Affordability Period; and WHEREAS, the Phase 1 development will include seven (7) studio units, nineteen (19) 1-bedroom units, twelve (12) 2-bedroom units, and one (1) 3-bedroom unit, and; the Phase 2 development will include six (6) studio units, eighteen (18) 1-bedroom units, fourteen (14) 2-bedroom units, and one (1) 3-bedroom unit; and WHEREAS, the City granted one (1) concession and eight (8) waivers/reductions, which are set forth in Precise Plan No. 580 (Planning Commission Resolution 25-09) and implemented under the Phase 1 DBAHA as to Phase 1 and under the Phase 2 DBAHA as to Phase 2; and

5 WHEREAS, the DBL allows an owner to use state parking standards that are reduced from local jurisdiction parking standards, and the Applicant agreed to use state parking standards for the Project as approved by the City; and
WHEREAS, the Phase 1 DBAHA establishes the terms and conditions of Developer’s design, planning, construction, operation, management and maintenance of the Phase 1 Project on the Phase 1 Site, in particular development, designation, use, and operation of 39 Affordable Units (of 78), and requires Developer to comply with all Conditions of Approval set forth in Precise Plan No. 580 (Resolution 25-09) approving the Entitlement for development of the Project; and
WHEREAS, the salient provisions of the Phase 1 DBAHA include: (1) the terms, conditions, and performance obligations of the City and Phase 1 Developer to carry out the planning, design, construction, and operation of the affordable housing component of the Phase 1 Project in compliance with Precise Plan No. 580 and the Phase 1 DBAHA; (2) establish the senior, nonsubordinate City Covenants as required by the Entitlement and the Phase 1 DBAHA, (3) cause recording of the senior, nonsubordinate Memorandum of Agreement evidencing the Phase 1 DBAHA, (4) terms and conditions of the covenants, conditions, and restrictions for the Affordable Units during the Affordability Period, and the property management and maintenance obligations related to ownership and operation of the Affordable Units (land and improvements); (4) insurance and indemnification provisions, and (5) Phase 1 Developer’s rights and obligations with regard to construction, completion and operation of the 39 Affordable Units, all to ensure construction, completion, and operation of the 39 Affordable Units within the Phase 1 Site; and
WHEREAS, under the Phase 1 DBAHA, the 39 Affordable Units are required to be covenanted for tenancy and occupancy by qualified Low-Income Households and available at an Affordable Rent pursuant to the Prescribed Rent Level and Unit Mix; and WHEREAS, notwithstanding that under the Inclusionary Housing Program the obligation to provide onsite Affordable Units may be satisfied by exercise and payment of the In-Lieu Fee option, under the Phase 1 DBAHA Developer acknowledges and agrees that the Affordable Units required by the DBL cannot be satisfied by payment of In-Lieu Fees and the Affordable Units must be constructed, completed, and operated and made available at an Affordable Rent to Low Income Households for the 55-year Affordability Period; and WHEREAS, in the event HPG Magnolia II, LLC, or successor entity for development of Phase 2 does not undertake development and operation of the second phase, then such then owner shall apply to the City for amendment and modification of the Entitlement due to not moving forward with the second Phase 2 component of the overall Project; and WHEREAS, the approval and implementation of the Phase 1 DBAHA will meet all of the criteria of the DBL, City’s Inclusionary Housing Program, and related affordable housing laws and regulations as the Phase 1 development that shall include 39 Affordable Units; and WHEREAS, the Phase 1 DBAHA has been duly processed in accordance with the DBL, City’s Inclusionary Housing Program, City rules and regulations, and related affordable housing laws and regulations applicable to the Phase 1 development; and

6 WHEREAS, the City Council on October 20, 2026 considered the Phase 1 DBAHA; and
WHEREAS, the City Council intends by this Resolution to approve and authorize execution, and attest of the Phase 1 DBAHA and cause recording of the following instruments in the Official Records of Orange County, California:

1. Development Deed Restriction and Covenant (Magnolia I Owner, LLC as to Phase 1/North Lot) and HPG Magnolia II, LLC as to Phase 2/South Lot)), substantially in the form of Attachment No. 11 to Phase 1 DBAHA; and

2. Memorandum of Agreement (Phase 1);

3. City Covenants Agreement (Phase 1),

4. Beneficiary Consent and Subordination Agreement [Lender] Beneficiary Consent And Subordination (Phase I North Lot), substantially in the form of Attachment No. 12 to Phase 1 DBAHA,

5. Beneficiary Consent and Subordination Agreement [Lender] Beneficiary Consent And Subordination (Phase 2 South Lot), substantially in the form of Attachment No. 13 to Phase 1 DBAHA,

6. Request for Notice.
with 2. and 3. above to be evidenced by Owner as the senior, nonsubordinate encumbrances against the Phase 1 Site, and with 1. to be evidenced by Owner as the senior, nonsubordinate encumbrance against both Phase 1 Site and Phase 2 Site, , and with 4. and 5. to be duly executed and recorded to cause subordination of the existing deed of trust of record securing the $117M construction loan for the Phase 1 Project, and existing deed of trust securing a purchase money loan for Phase 2 South Lot, along with compliance with each and all applicable Conditions Precedent to issuance of the Initial City Permit for the Phase 1 development.

NOW, THEREFORE, the City Council of the City of Fountain Valley, DOES HEREBY RESOLVE as follows and hereby incorporates the foregoing Recitals as a substantive part of this Resolution:

SECTION 1:

Per the California Environmental Quality Act (CEQA), the City prepared an Addendum to the Final EIR for the 2045 Fountain Valley General Plan (State Clearinghouse No. 2022100563).

The Draft Environmental Impact Report (DEIR) for the 2045 Fountain Valley General Plan (State Clearinghouse No. 2022100563) addressed the potential environmental effects associated with implementation of the proposed project. Pursuant to Public Resources Code Section 21165 and the California Environmental Quality Act Guidelines (CEQA Guidelines) Section 15050, the City of Fountain Valley is the lead agency for the proposed project.

Pursuant to Public Resources Code Section 21083 and CEQA Guidelines 15087, the DEIR was available for a 45- day public review from Friday, June 9, 2023, through Monday, July 24, 2023. The DEIR was made available at City Hall and online at:
https://www.fountainvalley.org/1282/General-Plan-Update. In conformance with CEQA, the

7 State CEQA Guidelines, and the City of Fountain Valley CEQA Guidelines, the City of Fountain Valley conducted an extensive environmental review of the proposed project. • Completion of a Notice of Preparation (NOP) on October 25, 2022. The public review period extended from October 25, 2022, to November 24, 2022. The NOP was published in the Fountain Valley View on October 25, 2022. The NOP was posted at the Orange County Clerk’s office on October 25, 2022. Copies of the NOP were mailed to interested persons and organizations.
• Preparation of the DEIR that was made available for a 45-day public review period beginning June 9, 2023, and ending July 24, 2023. The scope of the DEIR was determined based on the CEQA Guidelines Appendix G Checklist, and comments received in response to the NOP. The Notice of Availability (NOA) for the DEIR was sent to interested persons and organizations, sent to the State Clearinghouse in Sacramento for distribution to public agencies, posted at the City of Fountain Valley’s website, and published in the Fountain Valley View. The NOA was both posted at the Orange County Clerk’s office and published in the Fountain Valley View on June 8, 2023.
• A Final EIR was prepared that includes responses to comment letters received during the 45-day public review period. Pursuant to Public Resources Code Section 21092.5, a copy of the Final EIR was distributed all commenting governmental agencies and departments at least 10 days prior to certification of the final EIR. • Both the Draft and Final EIR were made available at City Hall and online at:
https://www.fountainvalley.org/1282/General-Plan-Update.

SECTION 2:

The City Council hereby finds:
a. As to the Phase 1 development, the Phase 1 DBAHA implements the DBL and the City’s Inclusionary Housing Program, and will be in the best interest of the City. (i) The Phase 1 DBAHA will reserve 15 percent of its base units (39 Affordable Units of the total 339 units in Phase 1) for tenancy by qualified Low Income Households earning less than 80 percent of the Orange County median income and leased at an Affordable Rent. This equates to a total of 39 (of 78) Phase 1 onsite Affordable Units for occupancy by Low Income Households at an Affordable Rent to help meet the City’s RHNA allocation of 4,839 units. By providing 15 percent of its base units as affordable, the Project, when completed in two phases, will exercise a 27.5 percent (i.e., 142 units) density bonus option pursuant to the DBL. Also, pursuant to the DBL, owners of residential projects that include certain levels of affordable housing are entitled to apply for and receive a density bonus and additional incentives and waivers/reductions in order to facilitate the economic feasibility of those projects. Annual reporting by Owner to City, and monitoring conducted by the City, will occur per the Phase 1 DBAHA, to confirm the Affordable Units remain in compliance.

8 b. The Phase 1 DBAHA is consistent with the actions, goals, objectives and policies of General Plan, any applicable specific plan, and the FVMC. (i) The Phase 1 DBAHA will promote the construction of additional dwelling units to help accommodate Fountain Valley’s share of regional housing needs in accordance with adopted land use policies (Housing Element Goal H-1, Policy H1.1). The Phase 1 DBAHA will help aid in meeting the City’s Regional Housing Needs Allocation (RHNA) of 4,839 units by the year 2029 in accordance with adopted land use policies and the adopted 6th Cycle Housing Element. Also, the Phase 1 DBAHA will also promote and encourage the development of a variety of housing opportunities to accommodate current and projected households by providing a variety of housing opportunities for all income levels through different land uses and densities (Housing Element Goal H-1, Policy H-1.2). The Phase 1 DBAHA will allow for development that may utilize density bonus options pursuant to State Density Bonus Law consistent with Government Code Sections 65915- 65918 including incentives/concessions and waivers/reductions to cause construction and operation of the Affordable Units that are restricted as affordable benefiting Low Income persons available at an Affordable Rent as defined in the California Health and Safety Code.
c. The Phase 1 DBAHA will promote the public convenience, health, interest, safety or welfare of the City.

SECTION 3:

The Mayor, or authorized designee, is authorized to execute the Phase 1 DBAHA on behalf of the City. The City Manager (or her authorized representative), in consultation with City legal counsel, is authorized to finalize the Phase 1 DBAHA, make nonsubstantive, minor changes and inserts to the form presented with this agenda item, and approve and execute, including receipt of, any necessary related implementing or additional documents and any nonmaterial amendments authorized by the Phase 1 DBAHA. The City Clerk Administrator is authorized to attest the final version of the Phase 1 DBAHA. The Phase 1 DBAHA, when duly finalized, executed, and attested, shall be placed on file in the office of the City Clerk Administrator and a complete copy shall be attached as a part of this Resolution. Further, the City Manager (or her authorized representative) is authorized to implement the Phase 1 DBAHA and take all further actions and execute and accept all documents referenced therein, and/or necessary and appropriate to carry out the Phase 1 DBAHA and development of the Phase 1 Project.

The City Manager (or her authorized representative) in consultation with legal counsel is authorized to the extent necessary during the implementation of the Phase 1 DBAHA to make technical, nonsubstantive, or minor changes and interpretations thereto after execution, as necessary to properly implement and carry out the Phase 1 DBAHA, provided any and all such changes shall not in any manner materially affect the rights and obligations of the City thereunder or dilute Developer’s obligation to cause development, covenanting, and operation of the Affordable Units for occupancy by Low Income Households and available at an Affordable Rent for the 55-year Affordability Period.

9 SECTION 4:

The Phase 1 DBAHA incorporates the following conditions:
a. The Phase 1 DBAHA shall be considered and approved by the City Council and, if approved, entered into between the City and Developer prior to the issuance of the Initial City Permit (likely initial grading permit(s)) for the Phase 1 component of the Project.
b. Within 60 days of the adoption of this Resolution but not later than the issuance of the Initial City Permit for the Phase 1 Project, the following instruments shall be caused to be in the Official Records, Orange County, California:
(i) Development Deed Restriction and Covenant (Magnolia I Owner, LLC as to Phase 1/North Lot) and HPG Magnolia II, LLC as to Phase 2/South Lot)), substantially in the form of Attachment No. 11 to Phase 1 DBAHA; and
(ii) Memorandum of Agreement (Phase 1);
(iii) City Covenants Agreement (Phase 1),
(iv) Beneficiary Consent and Subordination Agreement [Lender] Beneficiary Consent And Subordination (Phase I North Lot), substantially in the form of Attachment No. 12 to Phase 1 DBAHA,
(v) Beneficiary Consent and Subordination Agreement [Lender] Beneficiary Consent And Subordination (Phase 2 South Lot), substantially in the form of Attachment No. 13 to Phase 1 DBAHA, and
(vi) Request for Notice (North Lot); and
(vii) Request for Notice (South Lot).
with (ii) and(iii) above to be evidenced by Owner as the senior, nonsubordinate encumbrances against the Phase 1 Site, and with (i) to be evidenced by Owner as the senior, nonsubordinate encumbrance against both Phase 1 Site and Phase 2 Site, , and with (iv) and (v) to be duly executed and recorded to cause subordination of the existing deed of trust of record securing the $117M construction loan for the Phase 1 Project, and existing deed of trust securing a purchase money loan for Phase 2 South Lot, along with compliance with each and all applicable Conditions Precedent to issuance of the Initial City Permit for the Phase 1 development.

SECTION 5:

The City Council hereby approves the Density Bonus and Affordable Housing Agreement (Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley), including Attachments thereto, in the form of Exhibit A.

10 SECTION 6:

The City Clerk shall certify to the adoption of this Resolution.

THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED BY THE CITY COUNCIL THIS 20th DAY OF OCTOBER, 2026 BY THE FOLLOWING ROLL CALL VOTE:

AYES:

NOES:

ABSTAIN:

ABSENT:

CITY OF FOUNTAIN VALLEY
By:

Mayor
ATTEST:

Rick Miller, City Clerk Administrator
APPROVED AS TO FORM:

City Legal Counsel

Exhibit A
Density Bonus and Affordable Housing Agreement
(Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley)

EXHIBIT A
Density Bonus and Affordable Housing Agreement
(Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley) (to be attached)

DENSITY BONUS AND

AFFORDABLE HOUSING AGREEMENT
(Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley) by and between

CITY OF FOUNTAIN VALLEY
and

MAGNOLIA I OWNER, LLC

TABLE OF CONTENTS
Page
i
Page
SECTION 1 DEFINITIONS AND INTERPRETATION.................................................................6

1.1. Defined Terms ..............................................................................................................6

1.2. Singular and Plural Terms ..........................................................................................18

1.3. References and Other Terms.......................................................................................18

1.4. Exhibits Incorporated.................................................................................................. 18

1.5. Representations and Warranties..................................................................................18

1.5.1. City Representations.....................................................................................18

1.5.2. Developer Representations ...........................................................................19

1.5.3. No Material Adverse Change........................................................................20

1.5.4. Survival of Representations..........................................................................20 SECTION 2 SITE CONTROL ........................................................................................................20

2.1. Environmental Condition of the North Lot.................................................................20

2.1.1. Investigation of Site ...................................................................................... 21

2.1.2. Environmental Indemnification ....................................................................21

2.1.3. Duty to Prevent Hazardous Material Contamination....................................21

2.1.4. Release of City Indemnitees .........................................................................22

2.1.5. Environmental Inquiries................................................................................ 22 SECTION 3 CONDITIONS PRECEDENT TO DEVELOPMENT OF PHASE 1 ........................23

3.1. Phase 1 Development on North Lot and Portions of the OCFCD Property ...............23

3.1.1. Conditions Precedent to Initial City Permit in Favor of City .......................23

3.1.2. Condition to Issuance of CoO for all Affordable Units in Phase 1...............26

3.2. Payment of Certain Fees at Certificate of Occupancy ................................................ 26

3.3. Review of Title ...........................................................................................................27

3.3.1. Preliminary Report........................................................................................27

3.4. Recordation................................................................................................................. 28

3.4.1. Development Deed Restriction and Conditions of Approval Covenant ....................................................................................................... 28 SECTION 4 DEVELOPMENT PLANS; INSURANCE AND INDEMNITY,
FINANCING............................................................................................................... 28

4.1. Development............................................................................................................... 28

4.1.1. Site Preparation............................................................................................. 28

4.2. Development Plans for Phase 1 ..................................................................................28

4.2.1. Grading Plans................................................................................................ 29

4.2.2. Landscaping Plans ........................................................................................ 29

4.2.3. Construction Drawings................................................................................. 29

4.2.4. Defects in Development Plans...................................................................... 29

4.2.5. City and Other Governmental Permits.......................................................... 29

4.2.6. Cooperation re Development Plans .............................................................. 30

4.2.7. Selection of General Contractor.................................................................... 30

4.3. Cost of Construction; Performance under other Agreements..................................... 30

4.4. Insurance Requirements.............................................................................................. 30

4.4.1. Insurance Coverage from Initial City Permit through the term of the Affordability Period...................................................................................... 30

4.4.2. Policy Provisions .......................................................................................... 31

4.4.3. Insurance Requirements of Contractors and Subcontractors........................ 32

4.4.4. Reduction in Requirements........................................................................... 33

TABLE OF CONTENTS (continued)
Page
ii

4.4.5. Waiver of Subrogation.................................................................................. 33

4.5. Indemnity .................................................................................................................... 33

4.6. Rights of Access ......................................................................................................... 34

4.7. Compliance with Laws ............................................................................................... 34

4.8. Nondiscrimination in Employment.............................................................................35

4.9. Taxes and Assessments............................................................................................... 35

4.10. Liens and Stop Notices ............................................................................................... 35

4.11. Further Assurances...................................................................................................... 35

4.11.1. By Developer................................................................................................ 35

4.11.2. By City.......................................................................................................... 35

4.11.3. Mortgages, Deeds of Trust for Phases 1 ....................................................... 35

4.11.4. Holder Not Obligated to Construct Improvements....................................... 36

4.11.5. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure............................................................................................................... 36 SECTION 5 COVENANTS AND RESTRICTIONS...................................................................... 36

5.1. Operational and Use Covenants.................................................................................. 36

5.2. Affordable Housing Requirements.............................................................................37

5.2.1. Affordable Units........................................................................................... 37

5.2.2. Duration of Affordability Requirements.......................................................37

5.2.3. Selection of Tenants......................................................................................37

5.2.4. Income of Tenants ........................................................................................ 38

5.2.5. Determination of Affordable Rent for the Affordable Units........................ 38

5.2.6. Increases in Tenant Household Income ........................................................ 38

5.2.7. Household Size Appropriate to an Affordable Unit .....................................39

5.3. Verifications................................................................................................................39

5.3.1. Income Verification ......................................................................................39

5.3.2. Annual Reports............................................................................................. 39

5.4. Maintenance of North Lot...........................................................................................40

5.4.1. Maintenance Standards................................................................................. 40

5.4.2. Notice re Non-Compliance ........................................................................... 41

5.4.3. Program Maintenance ................................................................................... 41

5.4.4. Occupancy Limits......................................................................................... 43

5.5. Nondiscrimination Covenants..................................................................................... 43

5.5.1. Required Clauses .......................................................................................... 43

5.6. Management of the North Lot Improvements............................................................. 44

5.6.1. Property Manager ......................................................................................... 44

5.6.2. Due Diligence Review..................................................................................46

5.6.3. Property Management Plan...........................................................................46

5.6.4. Lease/Rental Agreement...............................................................................46

5.6.5. Gross Mismanagement..................................................................................47

5.6.6. Code Enforcement ........................................................................................ 48

5.7. Capital Reserve Requirements....................................................................................49

5.7.1. Lender Reserve Requirement........................................................................49

5.8. Effect of Violation of the Terms and Provisions of this Agreement after CoO Issued for Building No................................................................................................49 SECTION 6 DEVELOPER’S GENERAL REPRESENTATIONS AND WARRANTIES ...........50

6.1. Formation, Qualification and Compliance.................................................................. 50

6.2. Execution and Performance of Project Documents .................................................... 50

TABLE OF CONTENTS (continued)
Page
iii
SECTION 7 DEFAULTS, REMEDIES, AND TERMINATION................................................... 50

7.1. Default Remedies........................................................................................................ 50

7.2. Institution of Legal Actions........................................................................................ 51

7.3. Acceptance of Service of Process............................................................................... 51

7.4. Rights and Remedies Are Cumulative........................................................................ 51

7.5. Inaction Not a Waiver of Default................................................................................ 51

7.6. Applicable Law........................................................................................................... 51

7.7. Enforced Delay; Extension of Times of Performance ................................................ 51

7.8. Transfers ..................................................................................................................... 52

7.8.1. General Prohibition of a Transfer without Prior City Consent; Covenant Not to Transfer Except in Conformity; Exceptions...................... 52

7.8.2. City Consideration of Requested Transfer.................................................... 52

7.8.3. Permitted Transfers....................................................................................... 53

7.8.4. Claims under Assignment and Assumption.................................................. 53

7.9. Successors and Assigns............................................................................................... 54

7.10. Assignment by City..................................................................................................... 54

7.11. Non-Liability of Officials and Employees of City...................................................... 54

7.12. Relationship between City and Developer.................................................................. 54

7.13. City Approvals and Actions........................................................................................ 54

7.14. Developer Termination ............................................................................................... 54

7.14.1. Expiration of Affordability Period................................................................ 54

7.15. Estoppel Certificate..................................................................................................... 55

7.16. Real Estate Brokers..................................................................................................... 55 SECTION 8 RELOCATION........................................................................................................... 55

8.1. Developer Responsible for Relocation ....................................................................... 55

8.2. Indemnification by Developer Relating to Relocation ............................................... 55

8.2.1. Release ..........................................................................................................55 SECTION 9 MISCELLANEOUS ................................................................................................... 56

9.1. Notices ........................................................................................................................ 56

9.2. No Third Parties Benefited ......................................................................................... 57

9.3. Binding Effect; Assignment of Obligations................................................................ 57

9.4. Counterparts................................................................................................................57

9.5. Prior Agreements; Amendments; Consents................................................................ 57

9.6. Developer’s Payment and Reimbursement of City’s Third Party Costs..................... 58

9.6.1. Third Party Costs Defined; Obligation ......................................................... 58

9.6.2. Payment of Third Party Costs.......................................................................58

9.6.3. Exception to Payment of Third Party Costs..................................................58

9.7. Governing Law ...........................................................................................................58

9.8. Severability of Provisions........................................................................................... 59

9.9. Headings .....................................................................................................................59

9.10. Interpretation............................................................................................................... 59

9.11. Conflicts...................................................................................................................... 59

9.12. Time of the Essence .................................................................................................... 59

9.13. Conflict of Interest ...................................................................................................... 59

9.14. Warranty against Payment of Consideration .............................................................. 59

9.15. Nonliability of City Officials and Employees............................................................. 59

9.16. City Manager Authority; Approvals and Actions....................................................... 59

ATTACHMENTS
iv
ATTACHMENT NO. 1 SITE MAP (PHASE 1 AND PHASE 2)
ATTACHMENT NO. 2 LEGAL DESCRIPTION OF - NORTH LOT
ATTACHMENT NO. 3 PHASE 1 MEMORANDUM OF AGREEMENT
ATTACHMENT NO. 4 CITY COVENANTS (PHASE 1)
ATTACHMENT NO. 5 REQUEST FOR NOTICE OF DEFAULT
ATTACHMENT NO. 6 DEVELOPER CERTIFICATE
ATTACHMENT NO. 7 CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE ATTACHMENT NO. 8 CALCULATION OF AFFORDABLE RENT
ATTACHMENT NO. 9 INCOME VERIFICATION
ATTACHMENT NO. 10 DESIGNATED AFFORDABLE UNITS MAP —
PHASE 1 NORTH BUILDING
ATTACHMENT NO. 11 DEVELOPMENT DEED RESTRICTION AND COVENANT ATTACHMENT NO. 12 BENEFICIARY CONSENT AND SUBORDINATION AGREEMENT [LENDER]

1 DENSITY BONUS AND AFFORDABLE HOUSING AGREEMENT
(Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley) This DENSITY BONUS AND AFFORDABLE HOUSING AGREEMENT (Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley) (“Agreement” or “Phase 1 DBAHA”) dated as of __________, 2026 (“Date of Agreement”) is entered into by and between the CITY OF FOUNTAIN VALLEY, a California municipal corporation, and MAGNOLIA I OWNER, LLC, a Delaware limited liability company (“Developer”). Capitalized terms used in this Agreement are as defined in Section 1.1 or otherwise stated or referenced herein.

R E C I T A L S
A. Developer is the owner of certain parcels of real property with common address of 16800 Magnolia Street (identified as Assessor Parcel Nos. 143-294-03, 143-294-04) (“North Lot”).

The North Lot is more particularly described in the legal description attached hereto as Attachment No. 2. Developer also holds an easement (“OCFCD Easement”) for non-exclusive ingress, egress, and surface use together with the right to pave over or construct buildings or other permanent structures upon the land, over an approximately 44,075 square feet (“sq.ft.”) parcel of real property, identified as Assessor Parcel No. 143-301-37 (“OCFCD Property”) which property is owned in fee by the Orange County Flood Control District (“OCFCD”). The North Lot, the OCFCD Property, and the real property with common address of 9025-9063 Recreation Circle (identified as Assessor Parcel Nos. 143-301-42, and 143-301-32) (“South Lot”) together comprise the “Project Site.” B. Holland Partner Group (“Applicant”) prepared and submitted to the City an application for a land use entitlement for the development of two mixed-use seven-story buildings containing 657 apartments (339 apartments in the north Building No. 1 (“Phase 1 Residential Component”) and 318 apartments in the south Building No. 2 (“Phase 2 Residential Component”) (the Phase 1 Residential Component and the Phase 2 Residential Component together, the “Residential Component”), a total of 4,460 sq.ft. of retail (“Retail Component”), two seven-level parking garages and appurtenant onsite amenities associated with the residential and retail development on the Project Site (together, the “Project”). A site plan showing the location of the Project Site (and the two phases of the Project) is attached hereto as the Site Map (Phase 1 and Phase 2), Attachment No. 1 and fully incorporated by this reference.

C. The entitlements approved by the City for the Project (“Entitlement”) include the following actions (note that the Entitlement identifies two separate buildings (a north building and a south building) each with specified numbers of market rate and affordable units, and identifies that the Project would be developed in two phases, both of which phases together are covered by the Entitlement):
• Precise Plan No 580 (Fountain Valley Municipal Code, Chapter 21.44) adopted on June 11, 2025, by Planning Commission Resolution No. 25-09 and on July 15, 2025, by City Council Resolution No. 9960 for development of the structures that comprise the 657-unit 16800 Magnolia Mixed-Use Development Project; and • Addendum to the Fountain Valley General Plan Update EIR and Mitigation Monitoring and Reporting Plan (MMRP) adopted by Planning Commission Resolution No. 25-08

2 and City Council Resolution No. 9960 to address the environmental impacts associated with Project on the Project Site
• Application of the City’s Inclusionary Ordinance to development of the Project.

D. In addition, the City has approved, or is anticipated to approve concurrently with the Agreement, a Development Agreement relating to the Project (“Development Agreement”).

E. As part of the Entitlement and pursuant to California Government Code Section 65915, et seq. and Fountain Valley Municipal Code, Chapter 21.08.050(a) (together “Density Bonus Law” or “DBL”), the City approved a density bonus to increase the density as described in FVMC § 21.15.040 for the MU-2 zone of 75 dwelling units per acre (“du/ac”) to 96 du/ac spread over the entire 6.87-acre Project Site (for a total of 657 units), and which density bonus requires Applicant or to enter into one or more density bonus and affordable housing agreements evidencing Applicant’s intention, agreement, and obligation to reserve a total of seventy-eight (78) units (which comprises fifteen percent (15%) of the base units under Density Bonus Law) in the residential component of the Project as covenanted affordable housing available to Lower Income Households that do not exceed eighty percent (80%) of the area median income for Orange County (“AMI”) as the term “Lower Income” is defined in HSC Section 50079.5 and California Code of Regulations (“CCR”) Title 25 Section 6928, and at an affordable rent as defined herein pursuant to HSC Section 50053 (“Affordable Rent”). By providing fifteen percent (15%) of the base units as units affordable to lower income households, as defined in Section 50079.5 of the Health and Safety Code, the Project is entitled to a 27.5 percent (i.e., 142-unit) density bonus pursuant to the DBL, allowing a total of 657 units in the Project. Also pursuant to the DBL, as an owner of a residential development project that includes a certain level of affordable housing and as a part of the Entitlement, the DBL allowed Applicant one concession and unlimited waivers for the Project. In connection therewith and as part of the Entitlement, the City approved the following concession/incentives, and waivers for the Project:

Concession #1
Concession #1 - A reduction in the minimum non-residential floor area of 20% of the ground floor footprint (21,413 sf) as outlined in FVMC § 21.15.040(a) Table 2-11 to 4,460 sq.ft. which will be provided to support actual cost reductions for the development of the 78 low income units. As shown in the Retail Impact Analysis Summary, the cost burden of complying with the requirement of 20% ground floor non-residential use (21,413 sf) is considerable, and reducing the non-residential use component would result in substantial cost reductions for the project.

Waiver #1
An increase in the baseline height of 6-stories & 65 ft. as outlined in FVMC § 21.15.040(a) Table 2-11 to 7-stories & 76 ft. in height to the top of roof peaks and exceptions per FVMC § 21.18.50(c) that allow for roof-mounted structures up to 15 ft. above the allowed 7-story building baseline heights and parapet walls up to 5.5 ft. above the allowed 7-story building baseline heights. This waiver of the 6-stories and 65 ft. baseline height is necessary to accommodate the square footage required for the Density Bonus Project and avoid the loss of units. These heights are measured as the vertical distance from the finish grade of each building to an imaginary plane located parallel to the finish grade;

3 Waiver #2
A waiver of the height modulation (height variation, height averaging, and corner) requirements of FVMC § 21.15.040(a) Table 2-11. The Applicant proposes two sevenstory buildings to accommodate the Density Bonus Project and the project provides visual interest with a reduced six-story massing along the public streets. However, the changes in height required to meet the height modulation requirements of FVMC Sect. 21.15.040(a), Table 2-11 would reduce the project floor area and physically preclude construction of the Density Bonus Project. For example, the Corner element would require three corners of the project to be reduced from six to five stories, which would result in the loss of three units and lower the total unit count to 654, thus physically precluding the 657 units to which the Project is entitled pursuant to State Density Bonus Law. Similarly, further reducing height as required to achieve height averaging or height variation would result in the loss of units, thus physically precluding the construction of the Density Bonus Project. Accordingly, the applicant requests a waiver of the Height Modulation requirement in order to construct the total number of units as allowed by State Density Bonus Law; and Waiver #3
A reduction in the total required open space requirement of 110,568 sf to 75,498 sf and the publicly accessible open space requirement of a minimum of 50% of the required open space (55,284 sf) that must be publicly accessible and located along the street frontage or directly accessed from a public sidewalk to 20,110 sq.ft. to allow a building footprint with sufficient square footage for the Density Bonus Project; and Waiver #4
A reduction in MU-2 upper-level step back requirement of 15 ft. average of all street-facing upper floors above 45 ft. to a 9.9 ft average street-facing stepback for the north building (Building No 1) along Magnolia Street above 45 feet (29.7 ft average street-facing stepback above the 6th floor at 61.5 feet), a 10.1 ft average street-facing stepback for the south building (Building No. 2) along Magnolia Street above 45 feet (30.4 ft. average streetfacing stepback above the 6th floor at 61.5 feet), and a 13.75 ft average street-facing stepback for the south building (Building No. 2) along Recreation Circle above 45 feet (41.25 ft. street-facing stepback above the 6th floor at 61.5 feet) to allow sufficient residential square footage within the 7-stories proposed for the Density Bonus Project; and Waiver #5
A relaxation of the development standard for balconies in FVMC § 21.15.040(m)(7) on courtyard units, units facing the central paseo, and those facing Recreation Circle requiring that “no more than forty percent of balconies shall extend beyond the main habitable wall of each elevation and the maximum projections shall be twenty-five percent of the balconies’ full depth. All other balconies shall be recessed behind the main habitable building wall of each elevation.” As proposed, 75 % of balconies of the south elevation facing Recreation Circle will extend beyond the main habitable wall of each elevation and the maximum projections shall be 100 percent of the balconies’ full depth. As proposed, 100% of the balconies on courtyard units and those facing the central paseo will extend beyond the main habitable wall of each elevation and the maximum projections shall be 100% of the balconies’ full depth. Such relaxation is necessary to preserve residential

4 square footage of the Density Bonus Project while still providing balcony amenities to the subject units, which is necessary to support the marketability of such units; and Waiver #6
An increase in the maximum Floor Area Ratio (“FAR”) of 2.2 as outlined in FVMC § 21.15.040(a) Table 2-11 to the following:

3.59 FAR for the southern property (397,785 sq.ft. of floor area on a 110,872 sq.ft. lot).

2.99 FAR for the northern property (430,418 sq.ft. of floor area on a 144,170 sq.ft. lot).

3.25 FAR for the northern and southern properties combined only (828,203 sq.ft. of floor area on a combined 255,042 sq.ft. of lot area). Overall 2.77 FAR for the whole project site (828,203 sq.ft. of floor area on a 299,117 sq.ft. project site) to allow a building envelope with sufficient square footage for the Density Bonus Project; and Waiver #7
A waiver of the minimum lot size for the southern and northern lots to permit:
the existing lot size of 110,872 sq.ft. (2.55 acres) for the southern lot; and the existing lot size of 144,170 sq.ft. (3.31 acres) for the northern lot (Note that the area of the site as a whole is 299,117 sq.ft. (6.87 acres); and Waiver #8
A relaxation of the minimum street frontage setback of 15 ft. average with minimum 10 ft (maximum 40% of an elevation can be at 15 ft) as outlined in FVMC § 21.15.040(a) Table 2 11 to a 10-foot minimum setback.

F. The density approved under Precise Plan No 580 is and shall remain consistent with FVMC § 21.15.040 and Density Bonus Law, and which density does not exceed 96 du/ac over the entire Project Site (Phase 1 and Phase 2) (657 units).

G. Applicant has elected and determined to cause development of the Project in two phases as identified in the Entitlement; pursuant to Precise Plan No. 580 condition of approval 54, the Community Development Director has approved phasing of the Project as set forth in this Phase 1 DBAHA (which will also be reflected in the Phase 2 DBAHA). The first phase of the Project (“Phase 1”) shall consist of (1) Building No. 1 (as defined in Section 1.1), the Phase 1 parking garage, Phase 1 retail space, and residential and retail amenities located on the North Lot, including rooftop amenities of the pool, deck, clubhouse (collectively, the “North Lot Improvements”); and (2) the Central Paseo ingress/egress to/from Phase 1 and Phase 2, the dog park, surface level parking, loading area(s), and drive aisles located on the OCFCD Property, and any other improvements on the OCFCD Property that specifically support the North Lot Improvements (collectively, the “Phase 1 OCFCD Property Improvements”), all in accordance with the Entitlement and this Phase 1 DBAHA. The second phase of the Project (“Phase 2”) shall consist of (1) Building No. 2 (as defined in Section 1.1), the Phase 2 parking garage, Phase 2 retail space, and residential and retail amenities located on the South Lot (collectively, the “South Lot Improvements”); and (2) the residential and/or retail amenities and

5 improvements that are located on the OCFCD Property and specifically support the South Lot Improvements (collectively, the “Phase 2 OCFCD Property Improvements”), all in accordance with the Entitlement (which will also be set forth in the Phase 2 DBAHA). This Phase 1 DBAHA addresses the continued affordability of the Affordable Units in Phase 1 in accordance with the DBL and the Entitlement. The continued affordability of the units in Phase 2 that will be reserved for occupancy for Lower Income Households at an Affordable Rent for 55 years as provided in the Entitlement will be addressed in the separate density bonus and affordable housing agreement (“Phase 2 DBAHA”) and shall be subject to the terms and conditions of, and in accordance with, the Entitlement.

H. Pursuant to Precise Plan No. 580 condition of approval 24, Developer must obtain approval of this Phase 1 DBAHA as a Condition Precedent and prior to issuance of the first, initial permit for development of Phase 1, likely the initial grading permit(s) for Phase 1, which under this Phase 1 DBAHA is referred to and defined as the “Initial City Permit”.

I. Further, due the two-phased development and pursuant to Precise Plan No. 580 condition of approval 24, Applicant must obtain approval of the later Phase 2 DBAHA as a condition precedent and prior to issuance of the first, initial permit for development of Phase 2, likely the initial grading permit(s) for Phase 2.

J. Further, prior to and as a Condition Precedent to the issuance of the Initial City Permit, a Phase 1 Memorandum of Agreement, Attachment No. 3, evidencing this Phase 1 DBAHA and the Phase 1 City Covenants, Attachment No. 4, both attached hereto and fully incorporated by this reference shall each and both be recorded in the Official Records, County of Orange, State of California (“Official Records”) as senior, non-subordinate covenants running with the land for the 55-year Affordability Period as required by the Entitlement. In no event shall the Phase 1 City Covenants be made junior or subordinate to any other encumbrances, including deeds of trust, or other instruments providing financing, whether construction, permanent, equity or other financing, for the construction, ownership, and/or operation of Phase 1, unless expressly agreed to by the City in writing.

K. The Affordable Units in Phase 1, for rental and occupancy by Lower Income tenants at an Affordable Rent, shall be dispersed throughout the Phase 1 Residential Component, such Affordable Units shall not be segregated or located within a single area of the Phase 1 Residential Component. Pursuant to the Entitlement, Applicant shall identify which housing units will be designated as the Affordable Units for Phase 1 prior to issuance of the Initial City Permit, which will evidence and ensure the Affordable Units will be spread throughout Phase 1 Residential Component.

L. Phase 1 of the Project, in particular the Phase 1 Residential Component, furthers the City’s goals and objectives under the City’s Housing Element of the General Plan, including without limitation Program Category #1 by providing for the development of a variety of housing opportunities and types of dwelling units to accommodate current and projected households in Fountain Valley, which in this case includes the Low Income Affordable Units among the Phase 1 Residential Component. The Phase 1 Residential Component of the Project meets policies 1.1, 1.2 and 1.3 of Goal #1 by providing housing to assist the City toward meeting its Regional Housing Needs Assessment and State Housing and Community Development (“HCD”) Regional Housing Needs Allocation to the City of Fountain Valley (together, “RHNA”) of 4,839 residential units and 2,093 Low income units by the year 2029, and has adequate infrastructure and public services to serve the development, respectively.

6 M. This Agreement is in the vital and best interest of City and the health, safety and welfare of its residents and entire community.

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

Section 1 DEFINITIONS AND INTERPRETATION.

1.1. Defined Terms. As used in this Agreement (and in all other Project Documents, unless otherwise defined), the following capitalized terms shall have the following meanings:
“Affiliate” means any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer, which shall include each of the constituent members of Developer’s limited liability company. The term “control,” as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to exercise, directly or indirectly, at least fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person.
“Affordable Rent” means the monthly housing cost (excluding any supplemental rental assistance from the State of California, the federal government or any other public agency) not in excess of the amount that may be charged by Developer to each and all tenant households of the Affordable Units in conformity with the Prescribed Rent Level and not to exceed HSC Section 50053 for Lower Income Households. This monthly housing cost means the maximum amount to be charged by Developer and paid by the Lower Income Households occupying the thirty-nine (39) Affordable Units within Phase 1. Further, the household income for Lower Income Households leasing an Affordable Unit shall not exceed the income standard set forth in HSC Section 50079.5 and Affordable Rent shall not exceed the standard and calculations set forth in HSC Section 50053.

In addition, the term Affordable Rent includes the total of monthly payments by the tenants of an Affordable Unit for (a) use and occupancy for an Affordable Unit and facilities associated therewith, (b) any separately charged fees or service charges assessed by Developer that are required of all tenants of the Affordable Units, other than security deposits, (c) a reasonable allowance for utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity and gas, as determined by regulation of the Orange County Housing Authority (“OCHA”) pursuant to 24 C.F.R.

Section 5.600 et seq. and (d) possessory interest, taxes or other fees or charges assessed for the use of the Affordable Units and facilities associated therewith by a public or private entity other than Developer.

Affordable Rent for the Lower Income Household renting an Affordable Unit in Phase 1 generally equates to the product of thirty percent times sixty percent (30% x 60%) of AMI adjusted for family size appropriate for the unit as set forth in HSC Section 50053; and, in practice, this necessitates a two-step process. Step 1 is qualification of the tenant household as a Lower Income Household with gross income at or below eighty percent (80%) of AMI based on the actual size of the household per HSC §50053(b)(1)(D); and, Step 2 is the calculation of monthly housing cost/rent based on a presumed household size for the number of bedrooms in the unit.

7 A sample calculation of Affordable Rent for a Low Income Household is set forth in the exhibit titled, Calculation of Affordable Rent, attached hereto as Attachment No. 8. “Affordability Period” shall mean, the term of this Agreement, including the Phase 1 City Covenants and Phase 1 Memorandum of Agreement of record, ending on the fifty-fifth (55th) anniversary of the date of issuance of the temporary and/or final Certificate of Occupancy by the City’s building official that authorizes occupancy of each and all Affordable Units located in Building No. 1; and the Affordability Period shall continue for a period of 55 years ending on such 55th anniversary. “Affordable Unit” and “Affordable Units” means each and all of the thirty-nine (39) apartment units within Building No. 1 (of the total 339 apartments in Building No. 1) required to be managed, maintained, and operated for occupancy by Lower Income Households at an Affordable Rent under this Agreement and the Phase 1 City Covenants for the Affordability Period. For the avoidance of doubt, the Affordable Units governed by this Agreement include only the thirty-nine (39) units to be located in Building No. 1, and do not include the additional thirty-nine (39) units (of the total 318 apartment units) to be located within Building 2 to be managed, maintained, and operated for occupancy by Lower Income Households at an Affordable Rent as part of the Project. “Agreement” and “Phase 1 DBAHA” means this Density Bonus and Affordable Housing Agreement (Phase 1 – North Building at 16800 Magnolia Street, Fountain Valley) as defined in the first paragraph hereof. Developer shall duly execute this Agreement as a Condition Precedent to the City’s issuance of the Initial City Permit. The Phase 1 City Covenants and Phase 1 Memorandum of Agreement shall be duly executed and submitted for recording in the Official Records within five (5) business days of all parties’ execution of this Agreement. “AMI” or “Area Median Income” means area median income for the Orange County metropolitan statistical area as set forth in the HSC and as promulgated each Year by the State of California, Department of Housing and Community Development. “Area” means the Orange County Statistical Area, as periodically defined by HUD. “Beneficiary Consent and Subordination Agreement” and “Lender Consent” means that certain consent, acknowledgment, and affirmative subordination entered into by and among City, Developer, and initial [Lender] of the North Lot Phase 1 development. The form of the Beneficiary Consent and Subordination Agreement is attached as Attachment No. 12 and fully incorporated herein.

The Beneficiary Consent and Subordination Agreement shall be recorded in the Official Records as a Condition Precedent to the issuance of the Initial City Permit.

Developer must obtain such Lender Consent from each Lender that holds, or will hold, a security interest in the North Lot during the Affordability Period. As of the Date of Agreement and as a Condition Precedent to the Initial City Permit, and for each subsequent Lender during the Affordability Period, Developer shall obtain a Lender Consent and cause such instrument to be duly executed, notarized, and recorded in the Official Records.

After the initial Lender Consent that is entered into and recorded in the Official Records as a Condition Precedent to the Initial City Permit, each subsequent Lender Consent shall be substantially in the form of Attachment No. 12, in context to the time each such Lender Consent is prepared and caused to be recorded, and shall include following provisions:

8 NOTICE: THIS LENDER'S CONSENT EVIDENCES LENDER’S KNOWLEDGE THAT

ITS SECURITY INTERESTS IN THE PROPERTY SHALL BE AND REMAIN SUBJECT

TO AND OF A LOWER PRIORITY THAN THAT CERTAIN DENSITY BONUS AND AFFORDABLE HOUSING AGREEMENT (PHASE 1 NORTH BUILDING AT 16800 MAGNOLIA STREET, FOUNTAIN VALLEY).

The undersigned (“Lender”), as owner and holder of security interests (“Security Interests”) evidenced by that certain [insert full applicable title of the Lender’s Deed of Trust with Assignment of Leases and Rents, Security Agreement and Fixture Filing] made by Borrower [Developer] as trustor in favor of [insert full legal entity name of Lender] as beneficiary, dated as of ________________ and recorded on _______________ as Instrument No._____________ in the Official Records of the County of Orange, State of California (“Security Instrument”), hereby acknowledges its understanding of, and consent to, the terms and provisions of that certain Density Bonus and Affordable Housing Agreement (Phase 1 North Building At 16800 Magnolia Street, Fountain Valley) (“Phase 1 DBAHA”) dated as of ________, 2026. The undersigned further agrees that its Security Interests are and shall unconditionally be and remain at all times junior, subordinate and subject to the terms, covenants, conditions and restrictions of the Phase 1 DBAHA and Phase 1 City Covenants, provided that a violation of the Phase 1 DBAHA will not defeat, render invalid or limit the Security Instrument. In the event Beneficiary or any other party shall obtain record title to the Property through foreclosure or deed-in-lieu of foreclosure, the City Covenants shall be binding upon the party obtaining record title as the then owner of the Property. In consideration of Lender’s covenants and agreements contained therein, City and its designated agencies hereby agree for the benefit of Lender that concurrently with any notice from City to Developer that a default or breach exists under the terms of the Phase 1 DBAHA and Phase 1 City Covenants, City shall simultaneously send a copy of such notice to Lender and Lender shall have the right, but not the obligation, to cure any breach or default within thirty (30) days after the expiration of any cure period set forth in the Notice from City to Developer regarding such Developer breach or default, provided that such 30-day period shall be extended for such additional limited period of time as Lender may reasonably require to expeditiously either:
(i) obtain possession and control of the North Lot or Phase I Improvements and thereafter cure the breach(es) or default(s) with reasonable diligence and continuity or (ii) obtain the appointment of a receiver and give such receiver a reasonable albeit limited period of time in which to expeditiously cure the default; provided that in no event shall such cumulative Lender cure period exceed ninety (90) days in total for a breach or default bearing on the health or safety of residents of any Affordable Unit without the consent of the City Manager in his or her sole discretion. The provisions of this Lender Consent are intended to supplement, and not to limit, waive, modify or replace, those provisions of law pertaining to notice and cure rights of junior lenders including, without limitations, those set forth in California Civil Code Sections 2924b and 2924c. Lender intentionally and unconditionally subordinates the lien or charge of the Security Interests and Security Instrument in favor of the Phase 1 DBAHA and Phase 1 City Covenants.
“Building No. 1” means the mixed-use seven-story building located on the North Lot, containing 339 apartment units, including the thirty-nine (39) Affordable Units. “Building No. 2” means the mixed-use seven-story building located on the South Lot, containing 318 apartments units, including thirty-nine (39) units covenanted as affordable housing available to Lower Income Households at an Affordable Rent.

9 “Building Permit” or “Building Permits” shall mean each and all of the building permit(s) issued by the City and required to commence construction though completion of Phase 1. “Calculation of Affordable Rent” means Attachment No. 8 to this Agreement. It is the responsibility of Developer to comply with the Entitlement and definitions of Lower Income Household and Affordable Rent herein.
“Cal Code Regs” means the California Code of Regulations as such regulations are adopted, amended or repealed by state agencies pursuant to the Administrative Procedure Act (https://oal.ca.gov/publications/ccr/).
“Capital Replacement Reserve” means the greater of (i) a per unit reserve fund for each and all of the Affordable Units, or (ii) such higher per unit or annual amount required by a Lender of Developer, whether for the Affordable Units or all housing units within Phase 1 Residential Component, which reserve shall be established by Developer and maintained for the Affordability Period as set forth herein.
“Certificate of Occupancy” or “CoO” means a final certificate of occupancy issued by the City’s building official for Phase 1 or any portion thereof. “Certificate of Continuing Program Compliance” means a certificate in the form attached hereto as Attachment No. 7.
“City” means the City of Fountain Valley, California, a municipal corporation and general law city.
“City Code” or “FVMC” means the Municipal Code of the City of Fountain Valley as may be amended from time to time, and includes, without limitation, the Uniform Codes. “City Council” means the City Council of the City of Fountain Valley, California. “City Manager” means the City Manager of the City or her or his designee. “City Monitoring Fee” means a fee to be charged by City annually to defray costs of monitoring the creation and maintenance of the Affordable Units as rental units for occupancy by Lower Income Households at an Affordable Rent throughout the Affordability Period. The City Monitoring Fee shall be $125/Affordable Unit that equates to $4,875 per Year, and shall be payable on the first anniversary of the issuance of the CoO for Building No. 1 issued by the City’s building official. The City Monitoring Fee shall thereafter be payable as of each anniversary of the first payment thereof; and, the City Monitoring Fee shall be increased each year on an annual basis thereafter, but each of such annual increases shall not be more than the increase in the Consumer Price Index for the prior Year.
“Conditions Precedent” means the performance conditions required to be satisfied by Developer precedent to issuance of the Initial City Permit. “County” means the County of Orange, California.
“Date of Agreement” means [_______], 2026.

10 “DBL” means California Government Code Section 65915, et seq. and implementing local ordinance and regulations, Fountain Valley Municipal Code, Chapter 21.08.050(a) that are consistent with California Government Code Section 65915 (together as the Density Bonus Law or DBL). “Developer” means Magnolia I Owner, LLC, a Delaware limited liability company, or a permitted successor or assign, as provided below. The sole member of Magnolia I Owner, LLC is Magnolia I Investor, LLC, a Delaware limited liability company. “Developer Certificate” means a certificate in the form of Attachment No. 6 hereto. “Development Deed Restriction and Conditions of Approval Covenant” means the separate covenant that shall be recorded against the North Lot and the South Lot prior to and as a Condition Precedent to the issuance of the Initial City Permit, which covenant shall require compliance with (a) applicable state and local laws, in particular the DBL and Inclusionary Ordinance, and (b) all conditions of approval of Precise Plan No. 580. The Development Deed Restriction and Conditions of Approval Covenant is in addition to the Phase 1 City Covenants that are required to be recorded against the North Lot as provided herein. The form of the Development Deed Restriction and Conditions of Approval Covenant is attached hereto as Attachment No. 11 and fully incorporated by this reference.
“Development Plans” means the grading plans, building plans, landscape plans and all construction drawings for Phase 1, which are required to be submitted to the City for review and approval pursuant to the Entitlement and the FVMC. Development Plans shall comply with the Entitlement and the conditions of approval contained therein, and applicable provisions of the FVMC.

Approval of and revisions to the Development Plans shall be conducted in accordance with the City’s customary procedures and the FVMC.
“Entitlement” is defined in Recitals C and D.
“Environmental Laws” means all laws, ordinances and regulations relating to Hazardous Materials, including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901, et seq.; the Comprehensive Environment Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986, “CERCLA”), 42 U.S.C.

Section 9601, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.; all comparable state and local laws, laws of other jurisdictions or orders and regulations; and all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State, the County, City, or any other political subdivision in which the North Lot and OCFCD Property are located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over City, City, Developer, or the North Lot and OCFCD Property.
“Escrow Holder” means the holder of the Escrow for the recordation of the Project Documents, which shall be First American Title Company or another escrow holder mutually acceptable to City and Developer.

11 “Estoppel or Intercreditor Instrument” means one or more estoppel, intercreditor, subordination and/or other comparable instrument(s) as may be requested by a Lender or other entity for approval by the City Manager (after consultation with legal counsel), provided that in no event shall any Lender or other person or entity require or otherwise include subordination or modification of this Phase 1 DBAHA, Phase 1 City Covenants, or Phase 1 Memorandum of Agreement evidencing this Agreement of record. Developer and City acknowledge and agree that the affordability restrictions set forth in the City Covenants and this Phase 1 DBAHA implement land use permit conditions attached to the Entitlement that run with the land. The City shall not be required to subordinate the City Covenants, or the applicable land use conditions of the Entitlement, or enter into any instrument that amends, replaces, modifies, extinguishes, or terminates the City Covenants or Entitlement upon foreclosure. This Phase 1 DBAHA and City Covenants run with the land and survive any foreclosure event. Within five (5) business days of Developer’s receipt thereof, Developer shall provide to City complete, legible Word versions of each and any requested estoppel, intercreditor, subordination and/or other comparable instrument(s), and each form thereof, shall be subject to the review and approval of the City through the City Manager (after consultation with City legal counsel) in his/her/their sole, reasonable discretion.

Notwithstanding the foregoing, to facilitate permanent financing, the City Manager, may, in her/his sole and absolute discretion (subject to and after consultation with City legal counsel), approve or disapprove a written request by Developer (or its Lender) for City to enter into a loan rider or instrument affecting, directly or indirectly, the City Covenants. The proposed rider or instrument (i) shall be limited in scope and term of effectiveness only as to that permanent debt and not to refinancing such debt or subsequent debt, and (ii) shall not in any manner impair or restrict the affordability requirements in the City Covenants (including the definitions of Low Income, Affordable Rent, and Affordability Period), and (iii) shall not in any manner impair or restrict the City’s enforcement rights and remedies, and (iv) shall not impair or restrict in any manner the City’s statutory municipal police powers to address health and safety violation or enforce building and fire codes. “Event of Default” and “Default” have the meaning set forth in Section 7.1. “Fannie Mae” means the Federal National Mortgage Association (FNMA) or typically known as Fannie Mae.
“Final CoO for Affordable Units” means Developer’s readiness to request and obtain the final CoO for occupancy of all apartments within Phase 1, including the Affordable Units, which Affordable Units shall be covenanted pursuant to the Phase 1 City Covenants, as to be amended, for occupancy by qualified Lower Income Households at an Affordable Rent required by HSC 50053(b)(1) for the 55 year Affordability Period as further described herein. “Foreclosure” is defined within the definition of Permitted Transfer, below. “Freddie Mac” means the Federal Home Loan Mortgage Corporation. “GAAP” means generally accepted accounting principles.
“Governmental Requirements” is defined within the definition of Hazardous Materials, below.

12 “Hazardous Material” or “Hazardous Materials” means and include any substance, material, or waste which is or becomes regulated by any local governmental authority, including the County, Orange County Health Care City, the Regional Water Quality Control Board, the State of California, or the United States Government, including, but not limited to, any material or substance which is: (i) defined as a “hazardous waste,” “acutely hazardous waste,” “restricted hazardous waste,” or “extremely hazardous waste” under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter Presley Tanner Hazardous Substance Account Act); (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum; (vi) asbestos and/or asbestos containing materials; (vii) lead based paint or any lead based or lead products; (viii) polychlorinated biphenyls, (ix) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317); (x) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. (42 U.S.C. Section 6903); (xi) Methyl tertiary Butyl Ether; (xii) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601, et seq. (42 U.S.C.

Section 9601); (xiii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any “Governmental Requirements” (as defined herein) either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as “hazardous” or harmful to the environment; and/or (xiv) lead based paint pursuant to and defined in the Lead Based Paint Poisoning Prevention Act, Title X of the 1992 Housing and Community Development Act, 42 U.S.C. § 4800, et seq., specifically §§ 4821–4846, and the implementing regulations thereto. Notwithstanding the foregoing, “Hazardous Materials” shall not include such products in quantities below attainment levels identified in one or more of the enactments identified above as Governmental Requirements, including those product and amounts as are customarily used in the construction, maintenance, rehabilitation, management, operation and residence of residential developments or associated buildings and grounds, or typically used in residential activities in a manner typical of other comparable residential developments, or substances commonly ingested by a significant population living within the Project, including without limitation alcohol, aspirin, tobacco and saccharine.
“Hazardous Materials Contamination” means the contamination (whether presently existing or hereafter occurring) of the Improvements, facilities, soil, groundwater, air or other elements on, in, or under the North Lot or OCFCD Property by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the Date of Agreement) emanating from the Site.
“HSC” means and refers to the California Health and Safety Code. “HUD” means the United States Department of Housing and Urban Development. “Improvements” means all of the improvements for Phase 1 described or referenced in the Entitlement and the approved Development Plans, and as herein further described.

13 “Inclusionary Ordinance” means Ordinance No. 1604, that, among other provisions, added an Inclusionary Housing Program, to the FVMC, Section 8, Chapter 21.17, et seq. and any amendments or updates thereto, which ordinance was originally passed and adopted by the City Council at a regular meeting on December 19, 2023. The Inclusionary Ordinance requires a fifteen percent (15%) affordability component for all residential developments over ten (10) units and includes additional incentives as set forth therein. By Developer providing the 39 Affordable Units within Phase 1 and in compliance with this Agreement and the Entitlement, Phase 1 will meet the fifteen (15%) affordability requirement of the Inclusionary Ordinance, and by entering into this Agreement and the Phase 1 City Covenants the Developer will satisfy the Inclusionary Ordinance requirements for affordability covenants and other documentation required by FVMC Section

21.17.060(i) for Phase 1; provided however, provisions of the Inclusionary Ordinance other than the number of affordable units in Phase 1 Building No. 1 remain to be performed and complied with by Developer during the Affordability Period, and ongoing compliance obligations, including without limitation, Section 21.17.040(e), 21.17.060 (h). For the avoidance of doubt, the Inclusionary Ordinance compliance for Phase 2 shall be addressed in the separate density bonus and affordable housing agreement applicable to Phase 2 (the Phase 2 DBAHA), and Developer shall continue to comply with operational and reporting obligations of the Inclusionary Ordinance along with the Phase 1 City Covenants.
“Income Verification” means Attachment No. 9 to this Agreement. “Initial City Permit” is defined in Recital H.
“Legal Description of the Site” means Attachment No. 2 to this Agreement. “Lender” means each of the responsible financial lending institutions or entities that have issued or may issue a loan or loans secured by the North Lot and/or the Phase 1 Improvements relating in any manner to acquisition, financing or assembly of the North Lot, construction financing, permanent financing, any other financing for construction, development, and/or operation of Phase 1 or any portion thereof. The term Lender also includes other institutional lender receiving a transfer or assignment of such loan on the secondary market; any such transferee and/or assignee is required to acknowledge the nonsubordinate senior encumbrances of the Memorandum of Agreement and City Covenants and each of which transferees and/or assignees shall be subject to applicable requirements of Lenders as provided herein. As of the Date of Agreement, the existing Lender for the North Lot is U.S. Bank National Association, in its capacity as Administrative Agent, as reflected in the Construction Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing recorded on July 23, 2026 in Official Records as Instrument No. 2026000210279. U.S. Bank National Association, in its capacity as Administrative Agent, will be required to execute a Lender Consent substantially in the form of Attachment No. 12 prior to Initial City Permit, as provided in Section

3.1.1(c).
“Low Income” and “Low Income Households” are defined in in HSC Section 50093(a) and include “persons and families of low income” or “persons of low income” who are eligible for financial assistance specifically provided by a governmental agency for the benefit of occupants of housing financed pursuant to Division 31 of the HSC. The term Low Income also includes Lower Income. “Lower Income” and “Lower Income Households” mean households earning not greater than eighty percent (80%) of Area Median Income, adjusted for family size and as defined in and