Healdsburg City Council
April 17, 2023

WHEREAS, the First Final Map for the Saggio Hills Development Project subdivided the land comprising Saggio Hills into eleven (11) parcels, two parcels of which are legally described as Parcels 5 and 6 of Saggio Hills per Map recorded May 23, 2018 in Book 795, Pages 31-40 as Instrument No. 2018-037508, of Official Records, in the City of Healdsburg, County of Sonoma, State of California, APNs 091-310-005 & 091-310-006, as amended by the Parcel 5, 6 and 11 Lot Line Adjustment, approved by the City on May 12, 2022, pursuant to LLA 2021-05, which are collectively known as the "Affordable Housing Land"; and WHEREAS, pursuant to the Development Agreement, SLR has completed its obligations to perform mass grading of the Affordable Housing Land, to implement wetlands mitigation for the removal of wetlands on the Affordable Housing Land, to construct the Parkland Farms Boulevard roadway and utility improvements adjoining the Affordable Housing Land and to convey the Affordable Housing Land to the City; and
WHEREAS, pursuant to the Development Agreement, the City is responsible for making arrangements for the development and construction of up to 150 units of affordable housing on the Affordable Housing Land; and
WHEREAS, on February 16, 2021, the City entered into an Exclusive Negotiating Rights Agreement ("ENA") with Freebird Development Company, LLC ("Developer") which establishes procedures and standards for the negotiation of a Disposition and Development Agreement ("DDA"); and that, during the Negotiation Period, the Developer will conduct community outreach, complete schematic design, and secure entitlements and any required environmental review. In accordance with Section 2 of the ENA, the term of the Negotiating Period was extended to August 16, 2023, as evidenced by the First Amendment to Exclusive Negotiating Rights Agreement dated January 31, 2023; and
WHEREAS, on March 8, 2022, at a properly noticed public workshop, the Healdsburg Planning Commission reviewed the Tentative Map and conceptual plans for the Saggio Hills Affordable Housing Project (“Project”), and provided feedback to the Developer regarding the plans for the Project; and
WHEREAS, the Project includes modifications from the project analyzed in the Saggio Hills Project EIR, and pursuant to CEQA Guidelines section 15164, the City caused the preparation of an Environmental Checklist & Addendum to the Saggio Hills Project EIR, dated September, 2022 ("Addendum"), which can be found in the Planning Department's files for the Project at Healdsburg City Hall, Community Development Center, 401 Grove Street, Healdsburg, CA; and
WHEREAS, on November 8, 2022, at a properly noticed public hearing, following consideration of the Saggio Hills Project EIR and Addendum, the Planning Commission approved Major Design Review DR 2022-05, approved the requested concessions under State Density Bonus Law, and recommended that the City Council approve Tentative Map TM 2022-02; and

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WHEREAS, City and Developer have negotiated a development agreement for the Saggio Hills Affordable Housing Project ("Saggio Hills Affordable Housing Project DA") in order to extend the terms of Project approvals to facilitate the timely construction of the Project; and WHEREAS, Sections 65864 through 65869.5 of the California Government Code and Chapter 17.20 of the Healdsburg Municipal Code (“Development Agreement Law”) authorize the City to establish procedures to enter into binding development agreements with persons having legal or equitable interests in real property located within the City for the development of property; and
WHEREAS, the City of Healdsburg has established and codified such procedures as Chapter 17.20 of the Healdsburg Municipal Code; and
WHEREAS, on February 28, 2023, at a properly noticed public hearing, the Planning Commission reviewed written and oral staff reports, conducted a public hearing on the proposed Saggio Hills Affordable Housing Project DA and took testimony; received into the record all pertinent documents related to the Saggio Hills Affordable Housing Project DA, and following consideration of the Saggio Hills Project EIR and Addendum, by adoption of Resolution 2023-03, the Planning Commission recommended that the City Council approve the Saggio Hills Affordable Housing Project DA with a further recommendation that Section 4.8 "Timing of Development" be deleted; and
WHEREAS, on April 3, 2023, the Healdsburg City Council held a duly noticed public hearing on the Development Agreement DA 2023-01, reviewed the written and verbal staff reports, took testimony, and received into the record all pertinent documents related to the Project.

NOW, THEREFORE BE IT ORDAINED that the Healdsburg City Council hereby approves the Development Agreement as presented in Exhibit 1 to this ordinance and based upon the facts and findings as set forth below:

Section 1. Findings.

1. The Saggio Hills Affordable Housing Project DA is consistent with the Healdsburg 2030 General Plan, the Saggio Hills Area Plan, and the Land Use Code. The Saggio Affordable Housing Project is consistent with the Medium High Density Residential (MHR) land use classification in the General Plan and the Special Purposes of the R-1-3,500 zoning district.

The Project implements Housing Element policies calling for affordable housing and housing which meets special housing needs, including those for residents with developmental disabilities. It complies with policies addressing energy-efficiency performance, multi-modal transportation needs, and development within the wildland urban interface. The Project is consistent with the design guidelines established in the Saggio Hills Area Plan. The Project's proposed bicycle and pedestrian facilities implement Open Space and Recreation and Circulation policies of the Saggio Hills Area Plan. The Project's Vegetation Management Plan addresses fire safety policies in the Public Facilities

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& Services chapter of the Saggio Hills Area Plan. The Project's environmentally-sensitive siting of development, preservation of open space, design features, and the landscaping plans address the design-related policies of the Saggio Hills Area Plan. The Project received a parking incentive and a waiver of minimum lot size and width requirements in accordance with State Density Bonus Law. The Project is consistent with all other Land Use Code requirements including those for design and lighting of parking areas, bicycle parking, transit access, refuse and recycling storage, setbacks, building height, and site coverage.

2. The Saggio Hills Affordable Housing Project DA will provide Healdsburg with tangible benefits including 118 units of affordable housing and associated amenities and site improvements.

3. The Saggio Affordable Housing Project is addressed in the Final Environmental Impact Report for the Saggio Hills Planned Development Project (State Clearinghouse No. 2003062025) which was certified by the Healdsburg City Council through the adoption of Resolution No. 15-2011. Certain components of development on the site (extension of Parkland Farms Boulevard and related utilities; rough grading of Project site; filling of wetlands and establishment of mitigation wetlands; creek restoration) were addressed at a project-level in the Saggio Hills Project EIR. The Saggio Hills Project EIR addressed the development of up to 150 units of affordable housing on the site at a programmatic level.

An Initial Study/Environmental Checklist was prepared for the Saggio Hills Affordable Housing Project and, based on the analysis contained therein, the Community Development Director determined that an Addendum to the Saggio Hills Project EIR is the appropriate environmental document for the Project. Based upon substantial evidence demonstrated by the analysis included in the Addendum, none of the conditions described in Sections 15162 or 15163 of the CEQA Guidelines calling for the preparation of a subsequent or supplemental EIR or negative declaration have occurred, specifically:
(a) There have not been any substantial changes in the Project that require major revisions of the Saggio Hills Project EIR because of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; (b) There have not been any substantial changes with respect to the circumstances under which the Project is undertaken that require major revisions of the Saggio Hills Project EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and (c) There is no new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the Saggio Hills Project EIR was certified, that shows any of the following:
i. the Project will have one or more significant effects not discussed in the Saggio Hills Project EIR;

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ii. significant effects previously examined will be substantially more severe than shown in the Saggio Hills Project EIR;
iii. mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the Project, but the project proponents decline to adopt the mitigation measure or alternative; or
iv. mitigation measures or alternatives which are considerably different from those analyzed in the Saggio Hills Project EIR would substantially reduce one or more significant effects on the environment, but the Project proponents decline to adopt the mitigation measure or alternative.

Section 2. Approval and Execution. The City Council hereby approves the Saggio Hills Affordable Housing Project Development Agreement, substantially in the form attached hereto as Exhibit 1, subject to such minor and clarifying changes consistent with the terms thereof as may be approved by the City Attorney prior to execution hereof. The City Council further authorizes the City Manager to execute and take all necessary actions to implement the Agreement on behalf of the City.

Section 3. Severability. If any section, subsection, sentence, clause or phrase or word of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed and adopted this Ordinance and each and all provisions thereof irrespective of the fact that any one or more of said provisions may be declared unconstitutional, unlawful or otherwise invalid.

Section 4. Effective and Operative Dates. This Ordinance of the City of Healdsburg shall be effective thirty (30) days after the date of its passage. Before expiration of fifteen days after its passage, this ordinance or a summary thereof as provided in Government Code Section 36933, shall be published at least once in a newspaper of general circulation published and circulated in the City of Healdsburg, along with the names of the City Council voting for and against its passage.

This ordinance was introduced by the City Council of the City of Healdsburg, County of Sonoma, at a regular meeting thereof on the 3
rd day of April, 2023, and passed and adopted on the 17th day of April, 2023, by the following roll call vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

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ABSTAINING: Councilmembers:

SO ORDERED ATTEST
________________________________ _____________________________________ Ariel Kelley, Mayor Raina Allan, City Clerk

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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Clerk
Space Above This Line Reserved for Recorder’s Use
Exempt from Recording Fee Per Government Code Sections 6103 and 27383

DEVELOPMENT AGREEMENT

BY AND BETWEEN

CITY OF HEALDSBURG,
a California municipal corporation
AND

FREEBIRD DEVELOPMENT COMPANY, LLC,
a California limited liability company
FOR

SAGGIO HILLS AFFORDABLE HOUSING PROJECT
DATED ___________, 2023

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TABLE OF CONTENTS
Page
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-iARTICLE 1 DEFINITIONS............................................................................................... 4 Section 1.1 Definitions............................................................................................ 4 ARTICLE 2 GENERAL PROVISIONS............................................................................ 9 Section 2.1 Ownership of Property......................................................................... 9 ARTICLE 3 EFFECTIVE DATE AND TERM................................................................ 9 Section 3.1 Effective Date ...................................................................................... 9 Section 3.2 Term..................................................................................................... 9 Section 3.3 City Representations and Warranties................................................. 10 Section 3.4 Developer Representations and Warranties....................................... 10 ARTICLE 4 DEVELOPMENT OF PROPERTY........................................................... 11 Section 4.1 The Project......................................................................................... 11 Section 4.2 Project Phasing................................................................................... 12 Section 4.3 Vested Rights..................................................................................... 13 Section 4.4 Reservations of Authority.................................................................. 13 Section 4.5 Regulation by Other Public Agencies................................................ 14 Section 4.6 Life of Project Approvals................................................................... 14 Section 4.7 Initiatives............................................................................................ 14 Section 4.8 Timing of Development..................................................................... 15 Section 4.9 No Conflicting Enactments................................................................ 15 Section 4.10 Changes in the Law............................................................................ 15 ARTICLE 5 DEVELOPMENT STANDARDS AND FEES .......................................... 16 Section 5.1 Compliance With Laws...................................................................... 16 Section 5.2 Construction Progress Meetings........................................................ 16 Section 5.3 City of Healdsburg Business License ................................................ 16 Section 5.4 Developer to Pay All Applicable Fees............................................... 16 ARTICLE 6 ANNUAL REVIEW..................................................................................... 16 Section 6.1 Periodic Review................................................................................. 16 ARTICLE 7 MORTGAGEE PROTECTION................................................................. 17 Section 7.1 Mortgagee Protection......................................................................... 17 Section 7.2 Mortgagee Not Obligated .................................................................. 18 Section 7.3 Notice of Default to Mortgagee ......................................................... 18 Section 7.4 No Supersedure.................................................................................. 18

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-iiARTICLE 8 AMENDMENT OF AGREEMENT AND EXISTING
APPROVALS ............................................................................................... 18 Section 8.1 Amendment of Agreement By Mutual Consent ................................ 18 Section 8.2 Insubstantial Amendments to Agreement.......................................... 18 Section 8.3 Major Amendments ........................................................................... 19 Section 8.4 Requirement for Writing.................................................................... 19 Section 8.5 Amendments to Development Agreement Statute............................. 19 ARTICLE 9 COOPERATION AND IMPLEMENTATION ........................................ 19 Section 9.1 Subsequent Project Approvals........................................................... 19 Section 9.2 Processing Applications for Subsequent Project Approvals.............. 20 Section 9.3 Other Agency Subsequent Project Approvals; Authority of City...... 20 Section 9.4 Cooperation in the Event of Legal Challenge.................................... 20 ARTICLE 10 ASSIGNMENT, TRANSFER AND NOTICE........................................... 21 Section 10.1 Assignment ........................................................................................ 21 ARTICLE 11 DEFAULT; REMEDIES; TERMINATION............................................. 22 Section 11.1 Breach ................................................................................................ 22 Section 11.2 Default................................................................................................ 23 Section 11.3 Withholding of Permits...................................................................... 23 Section 11.4 Remedies............................................................................................ 23 Section 11.5 Enforced Delay; Extension of Time of Performance......................... 23 Section 11.6 Resolution of Disputes....................................................................... 24 Section 11.7 Surviving Provisions.......................................................................... 24 ARTICLE 12 INDEMNITY AND INSURANCE ............................................................. 24 Section 12.1 Indemnity and Hold Harmless........................................................... 24 Section 12.2 Insurance Requirements..................................................................... 24 Section 12.3 Workers’ Compensation Insurance.................................................... 25 Section 12.4 No Supersedure.................................................................................. 25 ARTICLE 13 MISCELLANEOUS PROVISIONS........................................................... 25 Section 13.1 Incorporation of Recitals, Exhibits and Introductory Paragraph ....... 25 Section 13.2 Severability ........................................................................................ 25 Section 13.3 Construction....................................................................................... 25 Section 13.4 Covenants Running with the Land..................................................... 26 Section 13.5 Notices ............................................................................................... 26

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-iiiSection 13.6 Counterparts and Exhibits; Entire Agreement ................................... 26 Section 13.7 Recordation of Agreement................................................................. 27 Section 13.8 No Joint Venture or Partnership ........................................................ 27 Section 13.9 Waivers.............................................................................................. 27 Section 13.10 California Law; Venue....................................................................... 27 Section 13.11 City Approvals and Actions............................................................... 27 Section 13.12 Signatures........................................................................................... 27

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-ivLIST OF EXHIBITS:

EXHIBIT A Legal Description of Property
EXHIBIT B Site Map of Property
EXHIBIT C Annual Review Form
EXHIBIT D Assignment and Assumption Agreement

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1 DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (“Agreement”) dated for reference purposes as of ___________, 2023 (“Date of Agreement”), is entered into by and between FREEBIRD DEVELOPMENT COMPANY, LLC, a California limited liability company (“Developer”), and the CITY OF HEALDSBURG, a California municipal corporation (“City”). Developer and City are sometimes referred to individually herein as a “Party” and collectively as “Parties.”

RECITALS
The following recitals are a substantive part of this Agreement; capitalized terms used herein and not otherwise defined are defined in Section 1.1 of this Agreement.

A. In order to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic costs and risk of development, the Legislature of the State of California enacted Section 65864 et seq. of the Government Code (“Development Agreement Statute”), which authorizes a city and a developer having a legal or equitable interest in real property to enter into a binding, long-term development agreement, establishing certain development rights in the property. In accordance with the Development Agreement Statute, the City has adopted rules and regulations establishing procedures and requirements for consideration of development agreements, which procedures and requirements are codified in Chapter 17.20 of Title 17 of the Healdsburg Municipal Code (“Development Agreement Regulations”). The provisions of the Development Agreement Statute and the City’s Development Agreement Regulations are collectively referred to herein as the “Development Agreement Law.”) This Agreement has been drafted and processed pursuant to the Development Agreement Law.

B. On April 11, 2011, under the authority of Ordinance No. 1107, the City and Sonoma Luxury Resort, LLC, a Delaware limited liability company (“SLR”), entered into a Development Agreement By and Between The City of Healdsburg and Sonoma Luxury Resort LLC, as evidenced by a Memorandum of Development Agreement recorded in the Official Records of Sonoma County (“Official Records”) on April 27, 2011 as Instrument No. 2011037227; as amended on April 5, 2016 by that certain Insubstantial Amendment To The Development Agreement By and Between The City Of Healdsburg And Sonoma Luxury Resort, LLC, Dated April 11, 2011, by and between City and SLR; as amended on May 30, 2019 by that certain Second Insubstantial Amendment To Development Agreement by and between City and SLR, as evidenced by a Memorandum of Second Insubstantial Amendment to Development Agreement, of same date, recorded in the Official Records on August 5, 2019, at Instrument No. 2019053988; as amended on January 19, 2021 by that certain Third Amendment to Development Agreement, by and between City and SLR and a Memorandum of Third Amendment to Development Agreement recorded in the Official Records on March 4, 2021 as Instrument No. 2021025567; and as affected by that certain Partial Assignment And Assumption Of Developer’s Interest Under Development Agreement Between The City of Healdsburg and Sonoma Luxury Resort LLC, by and between SLR and Oaks & Olives and consented to by the City, and recorded in the Official Records on April 22, 2021 as Instrument No. 2021049954 in connection with the

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2 sale of Parcel 1, Parcel 4 and Parcel 7 of first final map filed for record in the Official Records on May 23, 2018, in Book 795 of Maps at Pages 31-40, Document No. 2018-037508 (“FM-1”), from SLR to Oaks & Olives (collectively, the “SLR Development Agreement”).

C. The SLR Development Agreement governs, among other matters, the dedication by SLR to the City of two legal parcels described as Parcels 5 and 6 of FM-1, as amended by the Parcel 5, 6 and 11 Lot Line Adjustment, approved by the City on May 12, 2022, pursuant to LLA 2021-05, and described in the legal description attached to this Agreement as Exhibit A and depicted in the Site Map attached to this Agreement as Exhibit B, both of which are incorporated herein by this reference (“Property”), for development of up to 150 affordable housing units.

D. On February 16, 2021, City and Developer entered into an Exclusive Negotiation Rights Agreement (“ENA”), which established procedures and standards for the submittal and processing of applications for land use entitlements needed to develop the Property and the negotiation by the City and the Developer of an agreement pursuant to which the City will convey the Property to the Developer on the condition that certain specified development activities will be undertaken by Developer on the Property, consistent with the terms of the SLR Development Agreement governing the dedication of the Property.

E. Pursuant to the ENA, Developer has submitted applications to the City for approval of design review (“DR 2022-05”) and a tentative map (“TM 2022-02”) to secure the land use entitlements necessary to develop the Project, as defined in Section 4.1 of this Agreement, on the Property.

F. The City has taken numerous actions in connection with the development of the Project on the Property. These include:
(1) Planning Commission and City Council consideration of the Final Environmental Impact Report for the Saggio Hills Project (“Saggio Hills FEIR”), certified as adequate and complete for the Saggio Hills Project pursuant to the California Environmental Quality Act (California Public Resources Code Section 21000 et seq.) (“CEQA”) by City Council Resolution No. 15-2011, and an Addendum to the Saggio Hills FEIR for the Project, dated September 2022, as reflected in the findings of the DR Resolution and TM Resolution, respectively, referenced below (“CEQA Determination”);
(2) Planning Commission approval of DR 2022-05 for the Project, as evidenced by Planning Commission Resolution No. 2022-18, adopted on November 8, 2022 (“DR Resolution”); and
(3) City Council approval of TM 2022-02 for the Project, as evidenced by City Council Resolution No. _____, adopted on _________, 2023 (“TM Resolution”).

The approvals and development policies described in this Recital E are collectively referred to herein as the “Existing Approvals”.

G. City desires to advance the socioeconomic and environmental interests of the City and its residents by encouraging quality development of affordable housing that serves to meet

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3 local and regional demand for housing, while also enhancing the ability of persons employed locally to reside closer to their place of employment and reduce impacts to local and regional transportation networks, greenhouse gas emissions and air quality; promoting development of public recreational infrastructure to serve the needs of residents of the Project and those living in proximity to the Project; and expanding the City’s property tax base.

H. For the reasons recited herein, City and Developer have determined that the Project is a development for which this Agreement is appropriate. This Agreement will eliminate uncertainty regarding Existing Approvals and Subsequent Project Approvals, thereby encouraging planning for, investment in, and commitment to use and development of the Property. Continued use and development of the Property will in turn provide substantial public benefits to the City, and will contribute to the provision of needed affordable housing in the City, thereby achieving the goals and purposes for which the Development Agreement Law was enacted and for which the City has elected to enter into this Development Agreement.

I. The terms and conditions of this Agreement have undergone review by City staff, its Planning Commission, and its City Council at publicly noticed meetings and have been found to be fair, just, and reasonable and in conformance with the goals, policies, standards, and land use designations specified in the City’s General Plan and Zoning Ordinance, will provide tangible benefits to the City of Healdsburg beyond those that may be required by conditions of approval and, further, the City Council finds that the economic interests of the citizens of the City of Healdsburg and the public health, safety, and welfare will be best served by entering into this Agreement.

J. This Agreement between the City and Developer sets forth the applicable City standards and requirements that apply to Developer’s development of the Project and provides Developer with a vested right to develop the Project in accordance with the Existing Approvals and the Applicable Law.

K. Pursuant to the terms of the SLR Development Agreement, the Property was conveyed by SLR to the City pursuant to Grant Deed dated November 14, 2022, and recorded in Official Records on February 22, 2023, as Instrument No. 2023007222.

L. On February 28, 2023, the City of Healdsburg Planning Commission, the initial hearing body for purposes of development agreement review, considered and adopted Resolution No. 2023-03 recommending that the City Council approve this Agreement. On ________, 2023, the City Council of the City of Healdsburg adopted Ordinance No. 2023-___ approving this Agreement. The Ordinance took effect on ________, 2023 (the “Effective Date”).

AGREEMENT
NOW, THEREFORE, in consideration of the promises, covenants and provisions set forth herein, the receipt and adequacy of which is hereby acknowledged, the Parties agree as follows:

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4 ARTICLE 1 DEFINITIONS
Section 1.1 Definitions.
“Adjusted for family size appropriate to the unit” shall have the meaning set forth in Section 50052.5 of the California Health and Safety Code, as amended or any successor statute thereto, subject to the application of federal rules and regulations, if applicable to financing sources for all or a portion of the Project, including applicable federal and TCAC regulations.
“Affiliate of Developer” means either: 1) an entity or entities in which Developer retains more than fifty percent (50%) in the aggregate, directly or indirectly, of the ownership or beneficial interest and retains full management and control of the day-to-day affairs of the transferee entity or entities, either directly or indirectly through another entity, subject only to certain major events requiring the consent or approval of the other owners of such entity; or 2) a limited partnership formed to own and finance those improvements to be constructed as part of Phase 1 Improvements, Phase 2 Improvements or Phase 3 Improvements to be rented to lower income households, of which the Developer, either directly or through a single-member LLC of which Developer is the sole member/manager, is a general partner or a co-general partner and will retain the management and control, together with any co-general partner, of the day-to-day affairs of the limited partnership, subject only to certain major events requiring the consent or approval of the other owners of such entity.
“Affordable housing cost” is defined in Section 50052.5 of the California Health and Safety Code, as amended or any successor statute thereto. “Affordable rent” shall mean rental rates no greater than that considered as affordable rent for extremely low income households to lower income households, adjusted for family size appropriate to the unit, determined in accordance with California Health and Safety Code section 50053, as amended, or any successor statute thereto; provided, however, that for lower income households with gross incomes that exceed 60 percent of the area median income adjusted for family size appropriate to the unit, rental rates may be established at a level not to exceed 30 percent of gross income of the household. Notwithstanding the foregoing, if applicable to financing sources for all or a portion of the Project, during the fifteen (15) year tax credit compliance period under Internal Revenue Code Section 42, or such longer term of the regulatory agreement to be executed by TCAC and Developer and recorded against the applicable portion of the Project, the City hereby permits Developer to use the occupancy standards and rent levels required by TCAC.
“Agreement” means this Development Agreement.
“Applicable City Regulations” means (a) all City policies, standards and specifications set forth in this Agreement and the Existing Approvals, including the specific conditions of approval adopted with respect to the Existing Approvals; (b) with respect to matters not addressed by this Agreement or the Existing Approvals but governing permitted uses of the Property; building locations, sizes, densities, intensities, design and heights; site design, setbacks, lot coverage and open space; and parking; those City ordinances, rules, regulations,

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5 official policies, standards and specifications in force and effect on the Effective Date; and (c) with respect to all other matters, including building, plumbing, mechanical and electrical codes, those City ordinances, rules, regulations, official policies, standards and specifications in force and effect as may be enacted, adopted and amended from time to time, including New City Laws, except those in conflict with this Agreement.
“Applicable Law” means the Applicable City Regulations and all State and Federal laws and regulations applicable to the Property and the Project as enacted, adopted and amended from time to time.
“Area Median Income” means the median household income (adjusted for family size appropriate to the unit) of the Metropolitan Statistical Area in which Sonoma County is located, as established pursuant to Section 50093 of the California Health and Safety Code, as amended or any successor statute thereto, or, as applicable, the median income for Sonoma County, California, adjusted for family size appropriate to the unit, as determined by TCAC regulations.
“Assignee” is defined in Section 10.1E.
“CEQA” is defined in Recital F.
“CEQA Determination” is defined in Recital F.
“Changes in the Law” is defined in Section 4.10.
“City” means the City of Healdsburg, a California municipal corporation. “City Parties” means City and its elected and appointed officials, officers, agents, employees, contractors and representatives.
“Claims” means liabilities, obligations, orders, claims, damages, fines, penalties and expenses, including attorneys’ fees and costs.
“Connection Fees” means those fees charged by City on a citywide basis or by a utility provider to utility users as a cost for connecting to water, sanitary sewer, gas, electric and other applicable utilities.
“Construction of Phase 1 Improvements have commenced” shall mean City has issued one or more building permits for the construction of residential building improvements on Lot 14 and Developer has undertaken substantial work on said Lot in reliance thereon. “Cure Period” is defined in Section 11.1.
“Date of Agreement” is defined in the introductory paragraph preceding the Recitals of this Agreement.
“DDA” is defined in Section 2.1.

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6 “Default” is defined in Section 11.2.
“Developer” means Freebird Development Company, LLC, a California limited liability company, and its permitted assignees and successors-in-interest under this Agreement. “Development Agreement Law” is defined in Recital A.
“Development Agreement Regulations” is defined in Recital A. “Development Agreement Statute” is defined in Recital A. “DR 2022-05” is defined in Recital E.
“DR Resolution” is defined in Recital F.
“Effective Date” is defined in Recital L and Section 3.1. “ENA” is defined in Recital D.
“Exactions” means exactions that may be imposed by the City as a condition of developing the Project, including requirements for acquisition, dedication or reservation of land; and obligations to construct on-site or off-site public and private infrastructure improvements such as roadways, utilities or other improvements necessary to support the Project, whether such exactions constitute subdivision improvements, mitigation measures in connection with environmental review of the Project, or impositions made under Applicable City Regulations.

For purposes of this Agreement, Exactions do not include Impact Fees. “Existing Approvals” is defined in Recital F.
“Extended Cure Period” is defined in Section 11.1.
“Extremely low income households” is defined in Section 50106 of the California Health and Safety Code, as amended or any successor statute thereto. “FM-1” is defined in Recital B.
“Impact Fees” means the monetary amount charged by City in connection with a development project for the purpose of defraying all or a portion of the cost of mitigating the impacts of the development project or development of the public facilities related to the development project, including, any “fee” as that term is defined by Government Code section 66000(b), as amended or any successor statute thereto. For purposes of this Agreement, a fee that meets both the definitions of an Impact Fee and an Exaction, will be considered to be an Impact Fee.
“Insubstantial Amendment” is defined in Section 8.2.
“Litigation Challenge” is defined in Section 9.4.

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7 “Lot 1” is defined in Section 4.1 A.
“Lot 1 Improvements” is defined in Section 4.1 D.
“Lot 2” is defined in Section 4.1 A.
“Lot 2 Improvements” is defined in Section 4.1 E.
“Lot 3” is defined in Section 4.1 A.
“Lot 3 Improvements” is defined in Section 4.1 F.
“Lot 3 Ingress & Egress Easement” is defined in Section 4.1 F. “Lot 14” is defined in Section 4.1 A.
“Lot 14 Improvements” is defined in Section 4.1 H.
“Lot 15” is defined in Section 4.1 A.
“Lot 15 Improvements” is defined in Section 4.1 I.
“Lot 15 Owner-Occupied Option” is defined in Section 4.1 I. “Lot 15 Rental Option” is defined in Section 4.1 I.
“Lower income households” is defined in Section 50079.5 of the California Health and Safety Code, as amended or any successor statute thereto. “Mortgage” is defined in Section 7.1.
“Mortgagee” is defined in Section 7.1.
“New City Laws” means and includes any ordinances, resolutions, orders, rules, official policies, standards, specifications, guidelines or other regulations, which are promulgated or adopted by the City (including but not limited to any City agency, body, department, officer or employee) or its electorate (through their power of initiative or otherwise) after the Effective Date.
“Official Records” is defined in Recital B.
“Other Agency Subsequent Project Approvals” means Subsequent Project Approvals to be obtained from entities other than City. “Owner Occupied Affordable Housing Covenant” is defined in Section 4.1 G. and I.
“Parcel A” is defined in Section 4.1 A.

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8 “Parcel A Improvements” is defined in Section 4.1 B.
“Parcel A Public Access Easement” is defined in Section 4.1 B. “Parcel B” is defined in Section 4.1 A.
“Parcel B Improvements” is defined in Section 4.1 C.
“Party/Parties” is defined in the introductory paragraph preceding the Recitals of this Agreement.
“Permitted Transfer” is defined in Section 10.1D.
“Persons and families of moderate income” is defined in Section 50093 of the California Health and Safety Code, as amended or any successor statute thereto. “Phase 1 Improvements” is defined in Section 4.2.
“Phase 2 Improvements” is defined in Section 4.2.
“Phase 3 Improvements” is defined in Section 4.2.
“Phase 4 Improvements” is defined in Section 4.2.
“Planning Commission” means the Planning Commission of the City of Healdsburg.
“Private Improvements” means the Phase 1 Improvements, Phase 2 Improvements, Phase 3 Improvements and Phase 4 Improvements, excluding the Public Improvements.
“Processing Fees” means all fees for processing development project applications, including any required supplemental or other further environmental review, plan checking (time and materials) and inspection and monitoring for land use approvals, design review, grading and building permits, General Plan maintenance fees, and other permits and entitlements required to implement the Project, which are in effect at the time those permits, approvals or entitlements are applied for, and which are intended to cover the actual costs of processing the foregoing.
“Project” is defined in Section 4.1.
“Project Approvals” means the Existing Approvals and the Subsequent Project Approvals.
“Property” is defined in Recital C and is legally described in the legal description attached to this Agreement as Exhibit A and depicted in the Site Map attached to this Agreement as Exhibit B.

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9 “Public Improvements” is defined in Section 4.1 J.
“Rental Affordable Housing Covenant” is defined in Section 4.1 F., H. and I. “Saggio Hills FEIR” is defined in Recital F.
“Site Map” means the map of the Property attached hereto as Exhibit B. “SLR” and “SLR Development Agreement” are defined in Recital B. “Subsequent Project Approvals” is defined in Section 9.1. “TCAC” means the California Tax Credit Allocation Committee. “Term” is defined in Section 3.2.
“Townhome Lots” is defined in Section 4.1 A.
“Townhome Lot Improvements” is defined in Section 4.1 G. “TM 2022-02” is defined in Recital E.
“TM Resolution” is defined in Recital F.
“Very low income households” is defined in Section 50105 of the California Health and Safety Code, as amended or any successor statute thereto.

ARTICLE 2 GENERAL PROVISIONS
Section 2.1 Ownership of Property. The Parties hereby acknowledge that, as of the Effective Date, City owns fee title to the Property. Developer has a legal and equitable interest in the Property by virtue of the Disposition and Development Agreement (“DDA”) entered into by and between the City and Developer dated ____________, 2023, and approved by the City of Healdsburg City Council pursuant to Resolution No. _____ on ____________, 2023, governing the terms and conditions of transfer of fee title to the Property, excluding Parcel B, from City to Developer for the development and construction of the Project ARTICLE 3 EFFECTIVE DATE AND TERM
Section 3.1 Effective Date. This Agreement shall become effective upon the date that the ordinance approving this Agreement becomes effective (“Effective Date”).

Section 3.2 Term. The term of this Agreement (“Term”) shall commence upon the Effective Date and expire on the first to occur of: (i) completion of development of the Phase 1 Improvements, Phase 2 Improvements, Phase 3 Improvements and Phase 4 Improvement as evidenced by City’s issuance of a certificate of occupancy for each phase, and satisfaction of all of Developer’s obligations in connection therewith, (ii) the tenth (10th) anniversary of the Effective Date if construction of Phase 1 Improvements have commenced on or before the date

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10 which is five (5) years after the Effective Date, or (iii) the fifth (5th) anniversary of the Effective Date if construction of Phase 1 Improvements have not commenced on or before the date which is five (5) years after the Effective Date. Upon expiration of the Term, this Agreement shall be deemed terminated and of no further force and effect, subject, however, to the provisions set forth in Section 11.7.

Section 3.3 City Representations and Warranties. City represents and warrants to Developer that, as of the Effective Date:

A. City is a municipal corporation, and has all necessary powers under the laws of the State of California to enter into and perform the undertakings and obligations of City under this Agreement.

B. The execution and delivery of this Agreement and the performance of the obligations of City hereunder have been duly authorized by all necessary City Council action and all necessary approvals have been obtained.

C. This Agreement is a valid obligation of City and is enforceable in accordance with its terms.

During the Term of this Agreement, City shall, upon learning of any fact or condition that would cause any of the warranties and representations in this Section 3.3 not to be true, immediately give written notice of such fact or condition to Developer.

Section 3.4 Developer Representations and Warranties. Developer represents and warrants to City that, as of the Effective Date:

A. Developer is duly organized and validly existing under the laws of the State of California, and is in good standing and has all necessary powers under the laws of the State of California to own property interests and in all other respects enter into and perform the undertakings and obligations of Developer under this Agreement.

B. The execution and delivery of this Agreement and the performance of the obligations of Developer hereunder have been duly authorized by all necessary corporate action.

C. This Agreement is a valid obligation of Developer and is enforceable in accordance with its terms.

D. Developer has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Developer’s creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Developer’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Developer’s assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

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11 During the Term of this Agreement, Developer shall, upon learning of any fact or condition that would cause any of the warranties and representations in this Section 3.4 not to be true, immediately give written notice of such fact or condition to City.

ARTICLE 4 DEVELOPMENT OF PROPERTY
Section 4.1 The Project. Consistent with the Existing Approvals, the Project is defined to mean all of the following:

A. Subdivision of the Property into a total of 17 parcels, comprised of two parcels for open space (“Parcel A” and “Parcel B”), one parcel for outdoor amenities (“Lot 1”), one parcel for a community building (“Lot 2”), one parcel for 42 residential housing units (“Lot 3”), ten parcels for a townhome residence on each parcel (“Townhome Lots”), one parcel for 48 residential housing units (“Lot 14”), and one parcel for 18 residential housing units (“Lot 15”), as said parcels and lots are shown on TM 2022-02.

B. Parcel A shall remain as open space and improved with pedestrian trails (“Parcel A Improvements”) to be constructed and maintained by Developer, and subject to a non-exclusive public easement in favor of the City for public access on, over and across Parcel A as necessary to access the Parcel A Improvements, in perpetuity, as more particularly set forth in the “Parcel A Public Access Easement” attached to the DDA.

C. Parcel B shall remain as open space and improved with a multi-use trail (“Parcel B Improvements”) to be constructed and maintained by City, and fee title to Parcel B shall be retained by City.

D. Lot 1 shall be improved with outdoor amenities such as community gardens, picnic areas and/or a small farm (“Lot 1 Improvements”), to be constructed by Developer, maintained by the Owners, and available for use by residents of Lot 3, Townhome Lots, Lot 14 and Lot 15.

E. Lot 2 shall be improved with a one-story community building of approximately 3,067 square feet, 4 surface parking spaces and associated hardscape and landscaping improvements (“Lot 2 Improvements”), to be constructed by Developer, maintained by the Owners, and available for use by residents of Lot 3, Townhome Lots, Lot 14 and Lot 15.

F. Lot 3 shall be improved with four, three-story residential buildings of a height not to exceed 35 feet, containing 42 residential units totaling approximately 45,299 square feet and comprised of one (1) studio unit, nineteen (19) one-bedroom units, eleven (11) twobedroom units, and eleven (11) three-bedroom units, 64 surface parking spaces and associated hardscape and landscaping improvements (“Lot 3 Improvements”), which residential units shall be restricted for rental to and occupancy by lower income households, inclusive of very low income households and extremely low income households, at an affordable rent, for a minimum period of 55 years, as more particularly set forth in the “Rental Affordable Housing Covenant” attached to the DDA. Further, Lot 3 shall be subject to a non-exclusive public easement in favor of the City for ingress and egress from Parkland Farms Boulevard on, over and across Lot 3 to

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12 the planned parking lot serving the Healdsburg Ridge Open Space Reserve to be located adjacent to and east of Lot 3, in perpetuity, as more particularly set forth in the “Lot 3 Ingress & Egress Easement” attached to the DDA.

G. The ten (10) Townhome Lots shall be improved with a two-story, threebedroom townhome residence on each parcel of a height not to exceed 28 feet, and 1,766 square feet, and associated surface parking and hardscaping and landscaping improvements (“Townhome Lot Improvements”), which townhome residences shall be restricted for sale to and occupancy by persons and families of moderate income, at an affordable housing cost, for a minimum period of 45 years, as more particularly set forth in the “Owner-Occupied Affordable Housing Covenant” attached to the DDA.

H. Lot 14 shall be improved with one, three-story residential building of a height not to exceed 35 feet, containing 48 residential units totaling approximately 59,531 square feet and comprised of thirteen (13) studio units, eleven (11) one-bedroom units, twelve (12) twobedroom units, and twelve (12) three-bedroom units, 60 surface parking spaces and associated hardscape and landscaping improvements (“Lot 14 Improvements”), which residential units shall be restricted for rental to and occupancy by lower income households, inclusive of very low income households and extremely low income households, at an affordable rent, for a minimum period of 55 years, as more particularly set forth in the “Rental Affordable Housing Covenant” attached to the DDA.

I. Lot 15 shall be improved with two, three-story residential buildings of a height not to exceed 35 feet, containing 18 residential units totaling approximately 20,077 square feet and comprised of one (1) studio unit, six (6) one-bedroom units, six (6) two-bedroom units, and five (5) three-bedroom units, 29 surface parking spaces and associated hardscape and landscaping improvements (“Lot 15 Improvements”), which residential units shall be restricted either (i) for rental to and occupancy by lower income households, inclusive of very low income households and extremely low income households, at an affordable rent, for a minimum period of 55 years, as more particularly set forth in the “Rental Affordable Housing Covenant” attached to the DDA (“Lot 15 Rental Option”), or (ii) for sale to and occupancy by persons and families of moderate income, at an affordable housing cost, for a minimum period of 45 years, as more particularly set forth in the “Owner-Occupied Affordable Housing Covenant” attached to the DDA (“Lot 15 Owner-Occupied Option”).

J. Public improvements shall include (i) construction of sidewalks and streetlights along Passalacqua Drive and Parkland Farms Boulevard fronting the Property, (ii) striping of that portion of Passalacqua Drive and Parkland Farms Boulevard fronting the Property, (iii) installation and construction of a Rectangular Rapid Flashing Beacon at the crossing of Parkland Farms Boulevard located between Parcel B and Lot 2, and (iv) the Parcel A Improvements (“Public Improvements”).

Section 4.2 Project Phasing. The Project is intended to be constructed in no more than four phases by Developer. The first phase of the Project will consist of the construction and completion thereof of the Parcel A Improvements, Lot 2 Improvements, Lot 14 Improvements, and the Public Improvements in accordance with the Existing Approvals (“Phase 1 Improvements”). The Parcel B Improvements will be designed and constructed by City, at its

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13 sole cost and expense, either before or concurrently with the construction of the Phase 1 Improvements by Developer. The second phase of the Project will consist of the construction and completion thereof of the Lot 1 Improvements and Lot 3 Improvements in accordance with the Existing Approvals (“Phase 2 Improvements”). The third phase of the Project will consist of the construction and completion thereof of the Lot 15 Improvements in accordance with the Existing Approvals (“Phase 3 Improvements”). The fourth phase of the Project will consist of the construction and completion thereof of the Townhome Lot Improvements in accordance with the Existing Approvals (“Phase 4 Improvements”). Phase 2 Improvements may be combined with the Phase 1 Improvements. Further, if Developer elects to develop and construct the Lot 15 Improvements pursuant to the Lot 15 Rental Option, then said Lot 15 Improvements may be constructed and completed as part of Phase 2 Improvements and/or the Phase 1 Improvements; however, if Developer elects to develop and construct the Lot 15 Improvements pursuant to the Lot 15 Owner-Occupied Option, then said Lot 15 Improvements shall be constructed and completed as the Phase 3 Improvements, which may be combined with the Phase 4 Improvements.

Section 4.3 Vested Rights. Subject to the fulfillment of the provisions of this Agreement and the obligations required by the Project Approvals, the City hereby grants to Developer the present vested right to develop and construct on the Property all the improvements authorized by the Project Approvals and this Agreement. To the extent permitted by Applicable Law, and except as otherwise provided herein, no future modification of the City’s General Plan, Municipal Code, ordinances, policies or regulations shall apply to the Property that purports to:
(i) limit the permitted uses of the Property, the density and intensity of use (including but not limited to floor area ratios of commercial/retail buildings), or the maximum height and size of proposed buildings; (ii) impose requirements for reservation or dedication of land for public purposes or requirements for infrastructure, public improvements, or public utilities, other than as provided in the Project Approvals or pursuant to this Agreement; (iii) impose conditions upon development of the Property other than as permitted by the Applicable City Regulations, Changes in the Law, the Project Approvals and this Agreement; (iv) limit the timing, phasing or rate of development of the Property; provided, however, that nothing in this Agreement shall prevent or preclude City from adopting any land use ordinances, policies, regulations or amendments permitted herein; or (v) limit the location of building sites, grading or other improvements on the Property in a manner that is inconsistent with or substantially more restrictive than the limitations included in this Agreement or the Project Approvals.

Section 4.4 Reservations of Authority. The parties acknowledge and agree that City is restricted in its authority to limit its police power by contract. This Agreement shall be construed to reserve to City all such power and authority which cannot be restricted by contract.

Notwithstanding any other provision of this Agreement to the contrary, the following regulations and provisions shall apply to the development of the Project:

A. Processing Fees, Impact Fees, Connection Fees and other fees of every kind and nature imposed by the City that are in force and effect at the time land use or development permits, building permits, approvals or entitlements are applied for or issued on any or all portions of the Project, and any increase or modification to those fees that are in force and

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14 effect at the time land use or development permits, building permits, approvals or entitlements are issued on any or all portions of the Project.

B. Regulations relating to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure then applicable in City at the time of permit application.

C. Regulations governing construction standards and specifications, including City’s building code, plumbing code, mechanical code, electrical code, fire code and grading code, and all other uniform construction codes then applicable in City at the time of permit issuance.

D. New City Laws applicable to the Property or Project that do not conflict with this Agreement.

E. New City Laws that may be in conflict with this Agreement but that are necessary to protect persons or property from dangerous or hazardous conditions that create a threat to the public health or safety or create a physical risk, based on findings by the City Council identifying the dangerous or hazardous conditions requiring such changes in the law, why there are no feasible alternatives to the imposition of such changes, and how such changes would alleviate the dangerous or hazardous condition.

F. Exactions required by this Agreement and the Existing Approvals.

Section 4.5 Regulation by Other Public Agencies. City and Developer acknowledge and agree that other public agencies not within the control of City may possess authority to regulate aspects of the development of the Property separately from or jointly with City, and this Agreement does not limit the authority of such other public agencies. Developer shall, at the time required by Developer in accordance with Developer’s construction schedule, apply for all such other permits and approvals as may be required by other governmental or quasigovernmental entities in connection with the development of, or the provision of services to, the Project. Developer shall also pay all required fees when due to such public agencies. Developer acknowledges that City does not control the amount of any such fees. City shall reasonably cooperate with Developer in Developer’s effort to obtain such permits and approvals; provided, however, City shall have no obligation to incur any costs, without compensation or reimbursement, or to amend any City policy, regulation or ordinance in connection therewith.

Section 4.6 Life of Project Approvals. The term of any and all Project Approvals shall automatically be extended for the longer of the Term of this Agreement or the term otherwise applicable to such Project Approvals.

Section 4.7 Initiatives. If any New City Law is enacted or imposed by a citizensponsored initiative or referendum, which New City Law would conflict with the Project Approvals or this Agreement or reduce the development rights or assurances provided by this Agreement, such New City Law shall not apply to the Property or Project; provided, however, the Parties acknowledge that City’s approval of this Agreement is a legislative action subject to referendum. Without limiting the generality of the foregoing, no moratorium or other limitation

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15 (whether relating to the rate, timing, phasing or sequencing of development) affecting subdivision maps, use permits, building permits or other entitlements to use that are approved or to be approved, issued or granted by City shall apply to the Property or Project. Developer agrees and understands that City does not have authority or jurisdiction over any other public agency’s ability to grant governmental approvals or permits or to impose a moratorium or other limitations that may affect the Project. City shall reasonably cooperate with Developer and, at Developer’s expense, shall undertake such actions as may be necessary to ensure this Agreement remains in full force and effect. City, except to submit to vote of the electorate initiatives and referendums required by law to be placed on a ballot and fulfill any legal responsibility to defend a ballot measure passed by its voters, shall not support, adopt or enact any New City Law, or take any other action that would violate the express provisions or spirit and intent of this Agreement.

Section 4.8 Timing of Development. Developer shall have the vested right to develop the Project in such order, at such rate and at such times as Developer deems appropriate in the exercise of its business judgment. In particular, and not in any limitation of any of the foregoing, since the California Supreme Court held in Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984), that the failure of the parties therein to consider, and expressly provide for, the timing of development resulted in a later-adopted initiative restricting the timing of development to prevail over such parties’ agreement, it is the desire of the Parties hereto to avoid that result. Notwithstanding the adoption of an initiative after the Effective Date by City’s electorate to the contrary, the Parties acknowledge that, except as otherwise provided for in this Agreement, Developer shall have the vested right to develop the Project in such order and at such rate and at such times as Developer deems appropriate in the exercise of its business judgment, provided, however, Developer agrees that the Phase 1 Improvements shall be constructed before or at the same time as the Phase 2 Improvements, Phase 3 Improvements or Phase 4 Improvements, and the Public Improvements shall be constructed at the same time as the Phase 1 Improvements.

Section 4.9 No Conflicting Enactments. Except as otherwise provided in this Agreement, City shall not impose on the Project (whether by action of the City Council or by initiative, referendum or other means) any New City Law that is in conflict with this Agreement or the Existing Approvals. Without limiting the generality of the foregoing, City shall not (i) apply to the Property any change in land use designation or permitted use of the Property; (ii) limit or control the ability to obtain public utilities, services, or facilities (provided, however, nothing herein shall be deemed to exempt the Project or the Property from any water use rationing requirements that may be imposed from time to time in the future or be construed as a reservation of any existing sanitary sewer or potable water capacity); (iii) limit or control the uses; building setbacks, square footage, dimensions, floor plates, height, intensity and design; location of buildings and structures; or spacing between buildings in a manner that is inconsistent with or more restrictive than the limitations included in the Existing Approvals or this Agreement; or (iv) limit or control the rate, timing, phasing or sequencing of the approval, development or construction of all or any part of the Project.

Section 4.10 Changes in the Law. As provided in section 65869.5 of the Development Agreement Law, this Agreement shall not preclude the applicability to the Project of changes in

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16 laws, regulations, plans or policies, to the extent that such changes are specifically mandated and required by changes in State or Federal laws or by changes in laws, regulations, plans or policies of special districts or other governmental entities, other than the City, created or operating pursuant to the laws of the State of California (“Changes in the Law”). In the event Changes in the Law prevent or preclude compliance with one or more provisions of this Agreement, the Parties shall meet and confer in good faith in order to determine whether such provisions of this Agreement shall be modified or suspended, or performance thereof delayed, as may be necessary to comply with Changes in the Law, and City and Developer shall agree to such action as may be reasonably required. Nothing in this Agreement shall preclude Developer from contesting by any available means (including administrative or judicial proceedings) the applicability to the Project of any such Changes in the Law.

ARTICLE 5 DEVELOPMENT STANDARDS AND FEES
Section 5.1 Compliance With Laws. Developer, at its sole cost and expense, shall comply with the requirements of, and obtain all permits and approvals required by local, State and Federal agencies having jurisdiction over the Project. Furthermore, Developer shall carry out the Project work in conformity with all Applicable Law, including City zoning and development standards; building, plumbing, mechanical and electrical codes; all other provisions of the City of Healdsburg Municipal Code; and all applicable disabled and handicapped access requirements, including the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.

Section 5.2 Construction Progress Meetings. City and Developer shall have regular meetings during the Term of this Agreement to discuss the progress of the development and construction of the Project. Such meetings shall be attended by representatives of the Parties with experience and expertise in the relevant disciplines to the stage of the development and construction process.

Section 5.3 City of Healdsburg Business License. Developer or its successor, at its expense, shall obtain and maintain a business license issued by the City of Healdsburg at all time during the Term.

Section 5.4 Developer to Pay All Applicable Fees. Developer agrees to pay when due any existing, increased or modified fees, or new fees of general application to development within the City, including Processing Fees, Connection Fees and Impact Fees at the rates then in effect at the time land use or development permits, approvals or entitlements are applied for or issued on any or all portions of the Project. In addition, City may impose and Developer shall comply with those Exactions required by this Agreement and the Project Approvals.

ARTICLE 6 ANNUAL REVIEW
Section 6.1 Periodic Review.

A. The City Manager or designee shall on an annual basis and at any other time that the City Manager reasonably determines to be appropriate (but not more than once in

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17 any 12-month period), review the extent of Developer’s good faith substantial compliance with the terms and conditions of this Agreement in accordance with Government Code Section 65865.1. All City costs related to City’s review pursuant to this Section 6.1 shall be borne by Developer.

B. The annual review shall be conducted as provided herein:
(1) The City Manager shall provide thirty (30) days written notice of City’s review of Developer’s good faith substantial compliance with the terms and conditions of this Agreement pursuant to this Section 6.1. Such notice shall require Developer to demonstrate good faith substantial compliance with such terms and conditions, complete and submit to City an Annual Review Form in the form attached hereto as Exhibit C and provide such other information as may be reasonably requested by the City Manager. Such notice shall also advise Developer that the review may result in amendment or termination of this Agreement. (2) If, following his or her review of Developer’s submission, the City Manager is not satisfied that Developer has demonstrated good faith substantial compliance with the terms and conditions of this Agreement, or for any other reason, the City Manager may refer the matter along with his or her recommendation to the City Council, which shall at the first available agenda following the City Manager’s referral conduct a public hearing on Developer’s good faith substantial compliance with the terms and conditions of this Agreement. The City Council’s hearing of the matter shall be de novo.
(3) If the City Council finds and determines, based on substantial evidence in the record, that the Developer has failed to substantially comply in good faith with the terms and conditions of this Agreement, the City Council may terminate or modify this Agreement. Developer’s failure to accept modification of this Agreement as provided in this Section 6.1 shall result in termination of the Agreement. Termination of this Agreement shall not relieve Developer of any obligation to comply with the terms and conditions of any applicable zoning, specific plans, special permit, subdivision map or other land use entitlement approval, nor shall it relieve Developer of any obligation to comply with any covenants which by the terms of this Agreement survive termination.

C. A finding by the City Manager or the City Council of good faith substantial compliance by Developer with the terms and conditions of this Agreement shall conclusively determine the issue up to and including the date of such review.

D. Failure of City to conduct a periodic review as provided in this Section 6.1 shall not constitute a waiver by the City of its rights to otherwise enforce the provisions of this Agreement nor shall Developer have or assert any defense to such enforcement by reason of any such failure to conduct an annual review.

ARTICLE 7 MORTGAGEE PROTECTION
Section 7.1 Mortgagee Protection. This Agreement shall be superior and senior to any lien placed upon the Property or any portion thereof after the date of recording of this Agreement, including the lien of any deed of trust or mortgage (“Mortgage”). Notwithstanding

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18 the foregoing, no breach hereof shall defeat, render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, but all of the terms and conditions contained in this Agreement shall be binding upon and effective against and shall run to the benefit of any person or entity, including any deed of trust beneficiary or mortgagee (“Mortgagee”), who acquires title or possession to the Property, or any portion thereof, by foreclosure, trustee’s sale, deed in lieu of foreclosure or otherwise.

Section 7.2 Mortgagee Not Obligated. Notwithstanding the provisions of Section 7.1 above, no Mortgagee shall have any obligation or duty under this Agreement to construct or complete the construction of the Project, or to guarantee such construction or completion; provided, however, that a Mortgagee shall not be entitled to devote the Property to any use except in full compliance with the Project Approvals and this Agreement nor to construct any improvements thereon or institute any uses other than those uses and improvements provided for or authorized by this Agreement and the Project Approvals.

Section 7.3 Notice of Default to Mortgagee. If City receives a notice from a Mortgagee requesting a copy of any notice of default given Developer hereunder and specifying the address for service thereof, then City agrees to deliver to such Mortgagee, concurrently with service thereon to Developer, any notice given to Developer with respect to any claim by City that Developer has committed an event of default; and if City makes a determination of noncompliance hereunder, City shall likewise serve notice of such noncompliance on such Mortgagee concurrently with service thereon on Developer. Each Mortgagee shall have the right during the same period available to Developer to cure or remedy, or to commence to cure or remedy, the event of default claimed or the areas of noncompliance set forth in City’s notice. If a Mortgagee shall be required to obtain possession in order to cure any default, then vis-à-vis the Mortgagee, the time to cure shall be tolled so long as the Mortgagee is attempting to obtain possession, including by appointment of a receiver or foreclosure but in no event may this period exceed one hundred eighty (180) days from the City’s notice (or, if applicable, one hundred eighty (180) days following relief from any automatic stay applicable in connection with any bankruptcy proceedings affecting Developer or the Project or any restraining order or injunction issued in connection with any foreclosure proceedings initiated by a Mortgagee).

Section 7.4 No Supersedure. Nothing in this Article 7 shall be deemed to supersede or release a Mortgagee or modify a Mortgagee’s obligations under any subdivision or public improvement agreement or other obligation incurred with respect to the Project outside this Agreement, nor shall any provision of this Article 7 constitute an obligation of City to such Mortgagee, except as to the notice requirements of Section 7.3.

ARTICLE 8 AMENDMENT OF AGREEMENT AND EXISTING APPROVALS Section 8.1 Amendment of Agreement By Mutual Consent. This Agreement may be amended in writing from time to time by mutual consent of the Parties hereto or their successorsin-interest or assigns. Extension of the Term of this Agreement pursuant to Section 11.5 shall be considered Insubstantial Amendments and shall be processed under Section 8.2.

Section 8.2 Insubstantial Amendments to Agreement. Any amendment to this Agreement which, in the context of the overall Project contemplated by this Agreement, does not

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19 substantially affect (i) the Term of this Agreement (except as otherwise provided in Section 8.1), (ii) permitted uses of the Property, (iii) provisions for the reservation or dedication of land, (iv) conditions, terms, restrictions or requirements for subsequent discretionary actions, (v) the density or intensity of use of the Property or the maximum height or size of proposed buildings, (vi) monetary contributions by Developer, (vii) the nature, timing of delivery, or scope of the Private Improvements or Public Improvements, or (viii) the phasing of the Phase 1 Improvements and Phase 2 Improvements, shall be deemed an “Insubstantial Amendment” and shall not, except to the extent otherwise required by law, require notice or public hearing before the Parties may execute an amendment hereto. The City Manager shall have the authority to execute an Insubstantial Amendment or, in his or her discretion, seek approval of an Insubstantial Amendment by resolution of the City Council.

Section 8.3 Major Amendments. Any amendment to this Agreement other than an Insubstantial Amendment shall be deemed a “Major Amendment” and shall be subject to approval by the City Council by ordinance following duly noticed public hearing before the Planning Commission and City Council consistent with Government Code sections 65867, 65867.5 and 65868.

Section 8.4 Requirement for Writing. No modification, amendment, or other change to this Agreement or any provision hereof shall be effective for any purpose unless specifically set forth in a writing that refers expressly to this Agreement and is signed by duly authorized representatives of both Parties or their successors. A copy of any change shall be provided to the City Council within thirty (30) days of its execution.

Section 8.5 Amendments to Development Agreement Statute. This Agreement has been entered into in reliance upon the provisions of the Development Agreement Statute as those provisions existed as of the date of execution of this Agreement. No amendment or addition to those provisions that would materially affect the interpretation or enforceability of this Agreement shall be applicable to this Agreement, unless such amendment or addition is specifically required by the California State Legislature, or is mandated by a court of competent jurisdiction. If such amendment or change is permissive (as opposed to mandatory), this Agreement shall not be affected by same unless the parties mutually agree in writing to amend this Agreement to permit such applicability.

ARTICLE 9 COOPERATION AND IMPLEMENTATION
Section 9.1 Subsequent Project Approvals. Certain subsequent land use approvals, entitlements, and permits other than the Existing Approvals, will be necessary or desirable for implementation of the Project (“Subsequent Project Approvals”). The Subsequent Project Approvals may include, without limitation, the following: amendments of the Existing Approvals, grading permits, building permits, sewer and water connection permits, certificates of occupancy, final maps, lot line adjustments, parcel maps and/or subdivision maps, and any amendments to, or repealing of, any of the foregoing. Except as otherwise expressly provided herein, the City shall not impose requirements or conditions upon Project development and construction that are inconsistent with the Existing Approvals and the terms and conditions of this Agreement. Further, except as expressly provided herein, the City shall not exercise discretion in determining whether or how to grant Subsequent Project Approvals in a manner that

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20 would prevent development of the Project for the uses and to the maximum intensity of development set forth in the Existing Approvals.

Section 9.2 Processing Applications for Subsequent Project Approvals.

A. Developer acknowledges that City cannot begin processing applications for Subsequent Project Approvals until Developer submits complete applications on a timely basis. Developer shall use its best efforts to (i) provide to City in a timely manner any and all documents, applications, plans, and other information necessary for City to carry out its obligations hereunder; and (ii) cause Developer’s planners, engineers, and all other consultants to provide to City in a timely manner all such documents, applications, plans and other materials required under Applicable Law. It is the express intent of Developer and City to cooperate and diligently work to obtain any and all Subsequent Project Approvals.

B. Upon submission by Developer of all appropriate applications and Processing Fees for any pending Subsequent Project Approval, City shall, to the full extent allowed by Applicable Law, promptly and diligently, subject to City ordinances, policies and procedures regarding hiring and contracting, commence and complete all steps necessary to act on Developer’s currently pending Subsequent Project Approval applications including:
(i) providing at Developer’s expense and subject to Developer’s request and prior approval, reasonable overtime staff assistance, additional staff and/or staff consultants for concurrent, expedited planning and processing of each pending Subsequent Project Approval application; (ii) if legally required, providing notice and holding public hearings; and (iii) acting on any such pending Subsequent Project Approval application.

Section 9.3 Other Agency Subsequent Project Approvals; Authority of City. City shall cooperate with Developer, to the extent appropriate and as permitted by law, in Developer’s efforts to obtain, as may be required, Other Agency Subsequent Project Approvals.

Notwithstanding the issuance to Developer of Other Agency Subsequent Project Approvals, Developer agrees that City shall have the right to review, modify, approve and/or reject any and all submissions subject to the Other Agency Subsequent Project Approvals which, but for the authority of the other governmental or quasi-governmental entities issuing the Other Agency Subsequent Project Approvals, would otherwise require City approval. Developer agrees that City may review, modify, approve and/or reject any such materials or applications to ensure consistency with this Agreement and the Project Approvals and Developer shall incorporate any and all changes required by City prior to submitting such materials and applications to the other governmental or quasi-governmental entities for review and/or approval.

Section 9.4 Cooperation in the Event of Legal Challenge. City and Developer shall cooperate in the defense of any court action or proceeding instituted by a third party or other governmental entity or official challenging the validity of any provision of this Agreement or the Project Approvals (“Litigation Challenge”), and the Parties shall keep each other informed of all developments relating to such defense, subject only to confidentiality requirements that may prevent the communication of such information. To the extent Developer desires to contest or defend such Litigation Challenge, (i) Developer shall take the lead role defending such Litigation Challenge and may, in its sole discretion, elect to be represented by the legal counsel of its choice; (ii) City may, in its sole discretion, elect to be separately represented by the legal counsel

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21 of its choice in any such action or proceeding, with the reasonable costs of such representation to be paid by Developer; (iii) Developer shall reimburse City, within thirty (30) business days following City’s written demand therefor, which may be made from time to time during the course of such litigation, all reasonable out of pocket costs incurred by City in connection with the Litigation Challenge; and (iv) Developer shall indemnify, defend, and hold harmless City Parties from and against any damages, attorneys’ fees or cost awards, including attorneys’ fees awarded under Code of Civil Procedure section 1021.5, assessed or awarded against City by way of judgment, settlement, or stipulation. Any proposed settlement of a Litigation Challenge shall be subject to City’s approval not to be unreasonably withheld, conditioned or delayed. If the terms of the proposed settlement would constitute an amendment or modification of this Agreement or any Project Approvals, the settlement shall not become effective unless such amendment or modification is approved by City in accordance with Applicable Law, and City reserves its full legislative discretion with respect thereto. If Developer opts not to contest or defend such Litigation Challenge, City shall have no obligation to do so.

ARTICLE 10 ASSIGNMENT, TRANSFER AND NOTICE
Section 10.1 Assignment.

A. The qualifications and identity of Developer are of particular concern to City. It is because of those unique qualifications and identity that City has entered into this Agreement with Developer. No voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement, except as expressly set forth herein.

B. Except as otherwise provided below with respect to a Permitted Transfer in connection with the conveyance by City to Developer of Parcel A, Lot 1, Lot 2, Lot 3, Townhome Lots, Lot 14 or Lot 15 in accordance with the terms of the DDA, Developer shall not assign or transfer this Agreement or any interest therein without the prior written approval of City. Developer shall notify City of any proposed transfer or assignment promptly upon commencement of negotiations in connection with such event (or at such later time as such negotiations are not confidential in nature) and in any event at least sixty (60) days prior to completing any transfer or assignment. City shall approve or disapprove any such proposed transfer or assignment within sixty (60) days after receipt of a written request for approval thereof from Developer, together with such documentation as may be reasonably required by City. The documentation to be provided by Developer to City may include all financial and other documentation which City determines is reasonably necessary to evaluate the proposed transaction and the proposed assignee’s/transferee’s experience, reputation and qualifications.

C. Prior to consideration by City of any proposed assignment, including a Permitted Transfer, Developer shall deliver to City the form of a proposed written assignment and assumption agreement in which the assignee expressly agrees to assume all rights and obligations of Developer under this Agreement arising after the effective date of the assignment with respect to the parcel or parcels or other portion of the Property transferred or assigned, and in which the assignee agrees to assume all performance and obligations of Developer arising after the effective date of the assignment applicable to such parcel or parcels or other portion of the Property. The assignment and assumption agreement shall be in substantially the same form attached hereto as Exhibit D. City shall not unreasonably withhold its approval of a transfer or

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22 assignment to a proposed transferee/assignee who, in the reasonable opinion of City, is financially capable and has the development and operational qualifications and experience to perform the duties and obligations of Developer hereunder. No later than the date the assignment becomes effective, Developer shall deliver to City a fully executed counterpart of the assignment and assumption agreement.

D. Any of the following transfers or assignments shall be a “Permitted Transfer”:
(1) Any assignment or transfer to an Affiliate of Developer; or (2) A transfer which, when combined with any and all previous or simultaneous transfers, represents less than fifty percent (50%) of the equity or beneficial interest of Developer, provided such transfer does not cause a material change in the rights to manage and control Developer.

Developer shall give at least sixty (60) days prior written notice to City of a Permitted Transfer. In addition, City shall be entitled to review such documentation as it may reasonably require to establish that the proposed assignment or transfer is a Permitted Transfer.

E. Any assignee under this Section 10.1 (“Assignee”) shall succeed to the rights, duties and obligations of Developer only with respect to the parcel or parcels or other portion of the Property so transferred or assigned, and Developer shall continue to be obligated under this Agreement with respect to all portions of the Property retained by Developer.

ARTICLE 11 DEFAULT; REMEDIES; TERMINATION
Section 11.1 Breach. Subject to extensions of time under Section 11.5 or by mutual consent in writing, the failure or delay by either Party to perform any term or provision of this Agreement shall constitute a breach of this Agreement. In the event of alleged breach of this Agreement, the Party alleging such breach shall give the other Party notice in writing specifying the nature of the breach and the manner in which said breach may be satisfactorily cured, and the Party in breach shall have sixty (60) days following such notice (“Cure Period”) to cure such breach, except that in the event of a breach of an obligation to make a payment, the Party in breach shall have ten (10) days to cure the breach after receipt of notice thereof. If the breach is of a type that cannot be cured within sixty (60) days, the breaching Party shall, within a thirty (30) day period following notice to the non-breaching Party, notify the non-breaching Party of the time it will take to cure such breach which shall be a reasonable period under the circumstances (“Extended Cure Period”); commence to cure such breach within said 30-day period; and be proceeding diligently to cure such breach. Subject to the provisions of Section

11.5, the Extended Cure Period shall in no event exceed one hundred eighty (180) days unless otherwise agreed by the Parties. During the Cure Period or Extended Cure Period, the Party charged shall not be considered in Default for purposes of termination or institution of legal proceedings; but the City’s right to refuse to issue a permit or Subsequent Project Approval, under Section 11.3, shall not be limited by this provision. The failure of any Party to give notice of any breach shall not be deemed to be a waiver of that Party’s right to allege any other breach at any other time.

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23 Section 11.2 Default. If the breaching Party has not cured such breach within the Cure Period or the Extended Cure Period, if any, such Party shall be in default (“Default”), and the non-breaching Party, at its option, may terminate this Agreement, institute legal proceedings pursuant to this Agreement and shall have such remedies as are set forth in Section 11.4 below.

Section 11.3 Withholding of Permits. In the event of a Default by Developer, or following notice of breach to Developer and during the Cure Period or Extended Cure Period, City shall have the right to refuse to issue any permit or other Subsequent Project Approvals to which Developer would otherwise have been entitled pursuant to this Agreement. This provision is in addition to and shall not limit any actions that City may take to enforce the conditions of the Project Approvals.

Section 11.4 Remedies.

A. In the event of a Default by City or Developer, the non-defaulting Party shall have the right to terminate this Agreement upon giving notice of intent to terminate pursuant to Government Code Section 65868 and regulations of City implementing such section.

Following notice of intent to terminate, the matter shall be scheduled for consideration and review in the manner set forth in Government Code Section 65867 and City regulations implementing said section. Following consideration of the evidence presented in said review before the City Council, either Party alleging Default by the other Party may give written notice of termination of this Agreement to the other Party. Termination of this Agreement shall be subject to the provisions of Section 11.7 hereof.

B. If City issues a Project Approval pursuant to this Agreement in reliance upon a specified condition being satisfied by Developer in the future, and if Developer then fails to satisfy such condition, City shall be entitled to specific performance for the purpose of causing Developer to satisfy such condition.

C. In addition to any other rights or remedies, either Party may institute legal action to cure, correct or remedy any Default, to enforce any covenants or agreements herein, to enjoin any threatened or attempted violation thereof, or to obtain any other remedies consistent with the purpose of this Agreement. Any such legal action shall be brought in the Superior Court for Alameda County, California, or in the Federal District Court for the Northern District of the State of California. Neither Party shall have the right to recover any consequential, punitive or special damages.

Section 11.5 Enforced Delay; Extension of Time of Performance. Subject to the limitations set forth below, performance by either Party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other Party; or acts or failures to act of any other public or governmental agency or entity (other than the acts or failures to act of City which shall not excuse performance by City). An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause (but in any event shall not

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24 exceed a cumulative total of two (2) years), if notice by the Party claiming such extension is sent to the other Party within thirty (30) days of the commencement of the cause. The Parties agree that the commencement of any litigation concerning this Agreement, the Ordinance approving this Agreement or any of the Existing Approvals shall constitute cause for an extension of time for performance of obligations under this Agreement up to a maximum of two (2) years, and that the Term of this Agreement shall be automatically extended for the period such litigation is pending (subject, however, to the 2 year maximum extension).

Section 11.6 Resolution of Disputes. With regard to any dispute involving the Project, the resolution of which is not provided for by this Agreement or Applicable Law, Developer shall, at City’s request, meet with designated representatives of City promptly following City’s request. The parties to any such meetings shall attempt in good faith to resolve any such disputes. Nothing in this Section 11.6 shall in any way be interpreted as requiring that Developer and City and/or City’s designee reach agreement with regard to those matters being addressed, nor shall the outcome of these meetings be binding in any way on City or Developer unless expressly agreed to by the parties to such meetings.

Section 11.7 Surviving Provisions. Following the termination of this Agreement, neither Party shall have any further rights or obligations hereunder, except for those obligations of Developer set forth in Section 9.8 (Cooperation in the Event of Legal Challenge) and Section

12.1 (Indemnity and Hold Harmless).

ARTICLE 12 INDEMNITY AND INSURANCE
Section 12.1 Indemnity and Hold Harmless. Developer shall indemnify, defend (with counsel reasonably acceptable to City) and hold harmless City Parties from and against any and all Claims, including Claims for any bodily injury, death, or property damage, resulting directly or indirectly from the development or construction of the Project by or on behalf of Developer, and/or from any other acts or omissions of Developer under this Agreement, whether such acts or omissions are by Developer or any of Developer’s contractors, subcontractors, agents or employees, except to the extent such Claims arise from the sole active negligence or willful misconduct of City or City Parties.

Section 12.2 Insurance Requirements. Developer shall procure and maintain, or cause its contractor(s) to procure and maintain, once construction of Phase 1 Improvements have commenced and for the duration of this Agreement, a commercial general liability policy in an amount not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) combined single limit, including contractual liability, a comprehensive automobile liability policy in the amount of One Million Dollars ($1,000,000), combined single limit, and an excess liability policy in an amount not less than Five Million Dollars ($5,000,000). Such policy or policies shall be written on an occurrence form, so long as such form of policy is then commonly available in the commercial insurance marketplace. Developers’ insurance shall be placed with insurers with a current A.M. Best’s rating of no less than A-:VII or a rating otherwise approved by the City in its reasonable discretion. Developer shall furnish at City’s request appropriate certificate(s) of insurance evidencing the insurance coverage required by City hereunder, and the City Parties shall be named as additional insured parties under the policies required hereunder. Coverage provided hereunder by Developer shall be primary

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25 insurance and shall not be contributing with any insurance, self-insurance or joint self-insurance maintained by City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of City.

Section 12.3 Workers’ Compensation Insurance. Developer shall also provide, or cause to be provided, Workers’ Compensation insurance as required by law, covering employees of Developer and employees of any contractor, subcontractor, agent or representative of Developer.

Section 12.4 No Supersedure. The provisions of this Article 12 relating to indemnity and insurance shall not supersede and shall be in addition to any requirements contained in any Project Approval or any other land use entitlement pertaining to the Property; provided, however, that such provisions of this Article 12 or any such other Project Approval or any other land use entitlement pertaining to the Property shall not supersede or replace in any way the indemnity and insurance requirements set forth in any lease or easement agreement provided for in or to be entered into pursuant to the Public Improvements Funding Agreement.

ARTICLE 13 MISCELLANEOUS PROVISIONS
Section 13.1 Incorporation of Recitals, Exhibits and Introductory Paragraph. The Recitals contained in this Agreement, the introductory paragraph preceding the Recitals and the Exhibits attached hereto are hereby incorporated into this Agreement as if fully set forth herein.

Section 13.2 Severability. If any term or provision of this Agreement, or the application of any term or provision of this Agreement to a particular situation, is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining terms and provisions of this Agreement, or the application of this Agreement to other situations, shall continue in full force and effect unless amended or modified by mutual consent of the Parties.

Notwithstanding the foregoing, if any material provision of this Agreement, or the application of such provision to a particular situation, is held to be invalid, void or unenforceable, the Party adversely affected may terminate this Agreement by providing written notice of such termination to the other Party.

Section 13.3 Construction. Each reference herein to this Agreement or any of the Existing Approvals or Subsequent Project Approvals shall be deemed to refer to the Agreement, Existing Approval or Subsequent Project Approval as it may be amended from time to time, whether or not the particular reference refers to such possible amendment. Section headings in this Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants or conditions of this Agreement. This Agreement has been reviewed and revised by legal counsel for both City and Developer, and no presumption or rule that ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. Unless the context clearly requires otherwise, (i) the plural and singular numbers shall each be deemed to include the other; (ii) the masculine, feminine, and neuter genders shall each be deemed to include the others; (iii) “shall,” “will,” or “agrees” are mandatory, and “may” is permissive; (iv) “or” is not exclusive; (v) “include,” “includes” and “including” are not limiting and shall be construed as if followed by the words “without limitation,” and (vi) “days” means calendar days unless specifically provided otherwise.

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26 Section 13.4 Covenants Running with the Land. Except as otherwise more specifically provided in this Agreement, this Agreement and all of its provisions, rights, powers, standards, terms, covenants and obligations, shall be binding upon the Parties and their respective successors (by merger, consolidation, or otherwise) and assigns, and all other persons or entities acquiring the Property, or any interest therein, and shall inure to the benefit of the Parties and their respective successors and assigns, as provided in Government Code section 65868.5.

Section 13.5 Notices. Any notice or communication required hereunder between City or Developer must be in writing, and may be given either personally, by registered or certified mail (return receipt requested), or by Federal Express or other similar courier providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given upon actual receipt (or refusal to accept delivery) by any of the addressees designated below as the party to whom notices are to be sent. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given on the date delivered as shown on a receipt issued by the courier.

Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below:

To City: City of Healdsburg
401 Grove Street
Healdsburg, California 95448
Attention: City Manager
With a copy to: Burke, Williams & Sorensen, LLP
1 California Street, Suite 3050
San Francisco, California 94111-5432
Attention: Samantha Zutler, City
Attorney
To Developer: Freebird Development Company, LLC
1111 Broadway
Oakland, California 94607
Attention: Robin Zimbler
With a copy to: Miller Starr Regalia
1331 N. California Blvd.

Walnut Creek, CA 94596
Attn: Bryan Wenter
Section 13.6 Counterparts and Exhibits; Entire Agreement. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original. This Agreement, together with the Existing Approvals and attached Exhibits, constitutes the final and

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27 exclusive understanding and agreement of the Parties and supersedes all negotiations or previous agreements of the Parties with respect to all or any part of the subject matter hereof.

Section 13.7 Recordation of Agreement. Pursuant to California Government Code Section 65868.5, no later than ten (10) days after City enters into this Agreement, the City Clerk shall record an executed copy of this Agreement in the Official Records of the County of Alameda.

Section 13.8 No Joint Venture or Partnership. It is specifically understood and agreed to by and between the Parties hereto that: (i) the subject development is a private development; (ii) City has no interest or responsibilities for, or duty to, third parties concerning any public improvements until such time, and only until such time, that City accepts the same pursuant to the provisions of this Agreement or in connection with the various Existing Approvals or Subsequent Project Approvals; (iii) Developer shall have full power over and exclusive control of the Project herein described, subject only to the limitations and obligations of Developer under this Agreement, Existing Approvals, Subsequent Project Approvals, and Applicable Law; and (iv) City and Developer hereby renounce the existence of any form of agency relationship, joint venture or partnership between City and Developer and agree that nothing contained herein or in any document executed in connection herewith shall be construed as creating any such relationship between City and Developer.

Section 13.9 Waivers. Notwithstanding any other provision in this Agreement, any failures or delays by any Party in asserting any of its rights and remedies under this Agreement shall not operate as a waiver of any such rights or remedies, or deprive any such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. A Party may specifically and expressly waive in writing any condition or breach of this Agreement by the other Party, but no such waiver shall constitute a further or continuing waiver of any preceding or succeeding breach of the same or any other provision. Consent by one Party to any act by another Party shall not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or similar acts in the future.

Section 13.10 California Law; Venue. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without reference to choice of law provisions. The exclusive venue for any disputes or legal actions shall be the Superior Court of California in and for the County of Sonoma or the US District Court, Northern California District.

Section 13.11 City Approvals and Actions. Whenever reference is made herein to an action or approval to be undertaken by City, the City Manager or his or her designee is authorized to act on behalf of City, unless specifically provided otherwise or the context requires otherwise.

Section 13.12 Signatures. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Agreement on behalf of the respective legal entities of Developer and City.

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28 IN WITNESS WHEREOF, this Agreement has been entered into by and between Developer and City as of the day and year first above written. [REMAINDER OF PAGE LEFT BLANK]
CITY:

CITY OF HEALDSBURG, a California
municipal corporation
By:

Jeffrey Kay, City Manager
APPROVED AS TO FORM:

By:

Samantha Zutler, City Attorney
ATTEST:

By:

Raina Allan, City Clerk
DEVELOPER:

FREEBIRD DEVELOPMENT COMPANY,
LLC, a California limited liability company
By:

Name:

Its:

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Exhibit A

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

THE PROPERTY REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HEALDSBURG, COUNTY OF SONOMA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

PARCEL ONE-A:

Lying within the City of Healdsburg, County of Sonoma, State of California, and being pontoons of Parcels 5, 6 and 11 of the Lands of Sonoma Luxury Resort LLC as shown on that Final Map titled Saggio Hills, filed for record, May 23, 2018 in Bock 795 of Maps at pages 31-40, Sonoma County Records, and being more particularly described as follows:

Beginning at a 1/2” iron pipe tagged PLS 5143 marking the northwest corner of Parcel 5 as shown on said map of Saggio Hills; thence along the northerly, easterly and southerly line of Parcel 5, on a curve to the right, from a tangent that bears North 20°32‘ 11” West, radius of 20.00 feet, length of 33.08 feet, central angle of 94°46’43”; thence on a compound a curve to the right, radius of 156.00 feet, length of

54.53 feet, central angle of 20°01 ’42”; thence on a reverse curve to the left radius of 228.00 feet, length of 330.47 feet, central angle of 83°02’47”; thence North 11°09’l5” East, 69.68 feet; thence South 12°48’06” East, 261.00 feet; thence South 46°32‘l4” West, 94.60 feet; thence South 14°18'21" West,

73.62 feet; thence South 22°09’28” East, 408.32;thence on a curve to the right from a tangent that bears South 41°31’14" West, radius of 1750.00 feet, length of 586.91 feet, central angle of 19°12’56”; thence on a reverse curve to the left, radius of 150.00 feet, length of 71.25 feet, central angle of 27°12’56”; thence a curve to the right, radius of 450.00 feet, length of 179.87 feet, central angle of 22° 54‘08" to the southwest corner of said Parcel 5; thence along the westerly line of Parcel 5, North 0°29’37” East, 30.60 feet to the southerly line of said Parcel 11; thence along the common line of said Parcels 5 and 11, on a curve to the left, from a tangent that bears North 54°06 '42“ East, a radius of 425.00 feet, a length of 376.97, central angle of 50°49’15"; thence leaving said common line, on a compound curve to the left, a radius of 325.00, length of 179.02 feet, central angle of 31°33’38"; thence on a reverse curve to the right, radius of 225.00 feet, length of 222.62 feet, central angle of 56°41’24”; thence North 28°25’ 12” East, 70.81 feet; thence on a curve to the left, radius of 275.00, length of 235.31 feet, central angle of 49°01 ’35” to the Point of Beginning.

The parcel above is pursuant to Lot Line Adjustment Application File No. LLA 2021-04 on file in the Office of the City of Healdsburg Planning Department. It is the express intent of the signatories contained in the Grant Deed recorded 9/30/2022 recording no. 2022063599 extinguishes any underlying parcels or portions of parcels.

Basis of bearings: Final Map of Saggio Hills, Book 795 of Maps, Pages 31—40, Sonoma County Records. Being portions of APN 091-310-005, 006, 011.

Containing 7.43 acres.

PARCEL ONE-B:

An Emergency Vehicle Access Easement as described in the Grant of Easement executed by the County of Sonoma, a political subdivision to Sonoma Luxury Resort, LLC, recorded October 29, 2008 as Instrument No. 2008-98282, of Official Records.

PARCEL TWO-A:

Lying within the City of Healdsburg, County of Sonorna, State of California, and being a portion of Parcel 6 of the Lands of Sonoma Luxury Resort LLC as shown on that Final Map titled Saggio Hills, filed for record, May 23, 2018, in Book 795 of Maps at pages 31-40, Sonoma County Records, and being more particularly described as follows:

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Exhibit A
Beginning at a 1/2" iron pipe tagged PLS 5143 marking the northwest corner of Parcel 6 as shown on said map of Saggio Hills; thence along the northeasterly line of said Parcel 6, on a curve to the right, from a tangent that bears South 78°37’43" East, radius of 275.00 feet, length of 68.41 feet, central angle of 14°15’ 13"; thence on a curve to the left, radius of 1025.00 feet, length of 79.06 feet, central angle of 4°25’09”; thence South 68°47'39" East, 163.00 feet; thence on a curve to the right, radius of 225.00 feet, length of 298.24 feet, central angle of 75°56’50”; thence leaving said northeasterly line of said Parcel 6, continuing along said curve to the right, radius of 225.00, length of 83.52 feet, central angle of 21°16’01"; thence South 28°25’12" West, 70.81 feet; thence on a curve to the left, radius of 275.00 feet, length of 272.09 feet, central angle of 56°41'24"; thence on a curve to the right, radius of 275.00 feet, length of 151.48 feet, central angle of 31°33'38“ to the southeasterly line of said Parcel 6; thence along the southeasterly line of said Parcel 6, on a compound curve to the right, radius of 375.00 feet, length of 294.27 feet, central angle of 44°57’42" to the westerly line of said Parcel 6; thence along said westerly line North 0°29’37” East, 441.55 feet; thence South 89°36 ’07” West, 132.85 feet; thence North 0°37’45” West, 452.38 feet; thence North 54°09'32" West, 234.08 feet; thence North 16°45 ‘34” West, 48.44 feet; thence North 36°05’09” East, 99.18 feet to the Point of Beginning.

The parcel above is pursuant to Lot Line Adjustment Application File No. LLA 2021-04 on file in the Office of the City of Healdsburg Planning Department. It is the express intent of the signatories contained in the Grant Deed recorded 9/30/2022 recording no. 2022063600 extinguishes any underlying parcels or portions of parcels.

Basis of bearings: Final Map of Saggio Hills, Book 795 of Maps, Pages 31—40, Sonoma County Records. Being a portion of APN 091-310-006.

Containing 5.01 acres.

PARCEL TWO-B:

An Emergency Vehicle Access Easement as described in the Grant of Easement executed by the County of Sonoma, a political subdivision to Sonoma Luxury Resort, LLC, recorded October 29, 2008 as Instrument No. 2008-98282, of Official Records.

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Exhibit B

EXHIBIT B

SITE MAP OF PROPERTY

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Packet Pg. 168 Attachment: ATT 1, EXHIBIT 1 Freebird Saggio Development Agreement (4021 : Freebird Development Agreement) OAK #4857-7768-0689 v9
Exhibit C

EXHIBIT C

ANNUAL REVIEW FORM
This Annual Review Evaluation Form is submitted to the City of Healdsburg (“City”) by Freebird Development Company, LLC, a California limited liability company (“Developer”), pursuant to the requirements of California Government Code section 65865.1 regarding Developer’s good faith substantial compliance with its obligations under the Development Agreement between the City and Developer having an Effective Date of ______________ (“Development Agreement”). All terms not otherwise defined herein shall have the meanings assigned to them in the Development Agreement:

Annual Review Period: ______________ to ______________.

Specify whether Impact fees, Processing fees, Connection fees and/or other fees due and payable have been paid during this annual review period.

Describe whether other applicable Development Agreement obligations were completed during this annual review period and, if so, specifically identify such obligations.

Specify whether Developer has assigned the Development Agreement, in whole or in part, or otherwise conveyed the Property or any portion thereof during this annual review period.

The undersigned representative confirms that Developer is:
______In good faith substantial compliance with its obligations under the Development Agreement for this annual review period.
______Not in good faith substantial compliance with its obligations under the Development Agreement for this annual review period, in response to which Developer is taking the actions set forth in the attachment hereto.

IN WITNESS WHEREOF, Developer has executed this Annual Review Form as of this ____ day of ______________, 20__.

DEVELOPER:

FREEBIRD DEVELOPMENT COMPANY,
LLC, a California limited liability company
By:

Name:

Its:

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Packet Pg. 169 Attachment: ATT 1, EXHIBIT 1 Freebird Saggio Development Agreement (4021 : Freebird Development Agreement) OAK #4857-7768-0689 v9
Exhibit D

EXHIBIT D

FORM ASSIGNMENT AND ASSUMPTION AGREEMENT

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Clerk
)
)
)
)
)
)
)
(Space Above This Line for Recorder’s Use Only)
Exempt from Recording Fee per Government Code §27383

ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (“Assignment
Agreement”) is entered into as of the ____ day of __________, 20__, by and among Freebird Development Company, LLC, a California limited liability company (“Assignor”), ______________________, a ___________________ (“Assignee”), and the City of Healdsburg, a California municipal corporation (“City”).

R E C I T A L S
A. Assignor has entered into a Development Agreement with City effective ______________ (Recorder’s Document No. ________) (“Development Agreement”), to facilitate the development and use of certain real property consisting of approximately ______________ acres within the City of Healdsburg, County of Sonoma, State of California, depicted and legally described in Attachment 1 attached hereto and incorporated herein (“Property). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Development Agreement.

B. Assignor desires to transfer its fee interest in the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14] to Assignee concurrently with execution of this Assignment Agreement and Assignee desires to so acquire such interest in the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14] from Assignor.

C. Article 10 of the Development Agreement provides that Assignor may assign its rights and obligations under the Development Agreement to another party, provided that the Assignor shall have provided to City at least sixty (60) days prior written notice and provided that the assignor and the assignee document the assignment in an agreement substantially in the form of this Assignment Agreement.

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Packet Pg. 170 Attachment: ATT 1, EXHIBIT 1 Freebird Saggio Development Agreement (4021 : Freebird Development Agreement) OAK #4857-7768-0689 v9
Exhibit D
D. Assignor has provided the required written notice to City of its intent to enter into an assignment and assumption agreement as required by Section 10.1 of the Development Agreement.

E. Assignor desires to assign to Assignee and Assignee desires to assume all rights and obligations of Assignor under the Development Agreement. Upon execution of this Assignment Agreement and transfer to Assignee of legal title to the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14], Assignor desires to be released from any and all obligations under the Development Agreement with respect to the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14].

A G R E E M E N T
NOW, THEREFORE, Assignor, Assignee and City hereby agree as follows:

1. Assignment by Assignor. Assignor hereby assigns, transfers and grants to Assignee, and its successors and assigns, all of Assignor’s rights, title and interest and obligations, duties, responsibilities, conditions and restrictions under the Development Agreement with respect to the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14] (collectively, “Rights and Obligations”).

2. Acceptance and Assumption by Assignee. Assignee, for itself and its successors and assigns, hereby accepts such assignment and assumes all such Rights and Obligations, accruing on or after the Assignment Agreement Effective Date (defined in Section 16 below).

Assignee agrees, expressly for the benefit of City, to comply with, perform and execute all of the Rights and Obligations of Developer with respect to the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14] arising on or after the Effective Date from or under the Development Agreement.

3. Release of Assignor. Assignee and City hereby fully release Assignor from all Rights and Obligations. Both Assignor and Assignee acknowledge that this Assignment Agreement is intended to fully assign all of Assignor’s Rights and Obligations to Assignee, and it is expressly understood that Assignor shall not retain any Rights and Obligations whatsoever with respect to the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14].

4. Substitution of Assignor. Assignee hereafter shall be substituted for and replace Assignor in the Development Agreement with respect to the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14]. Whenever the term “Developer” appears in the Development Agreement, it shall hereafter mean Assignee.

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Packet Pg. 171 Attachment: ATT 1, EXHIBIT 1 Freebird Saggio Development Agreement (4021 : Freebird Development Agreement) OAK #4857-7768-0689 v9
Exhibit D

5. Assignor and Assignee Agreements, Indemnifications and Waivers. a. Assignee represents and warrants to City as follows:
(i) Assignee is a ____________________ duly formed within and in good standing under the laws of the State of ________________. The copies of the documents evidencing the formation of Assignee, which have been delivered to City, are true and complete copies of the originals, as amended to the date of this Assignment Agreement. Assignee has full right, power and lawful authority to undertake all obligations as provided herein and the execution, performance and delivery of this Assignment Agreement by Assignee has been fully authorized by all requisite actions on the part of Assignee. (ii) Assignee’s execution, delivery and performance of its obligations under this Assignment Agreement will not constitute a default or a breach under any contract, agreement or order to which Assignee is a party or by which it is bound. (iii) Assignee has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Assignee’s creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Assignee’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Assignee’s assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.
(iv) As of the Effective Date of this Assignment Agreement, Assignee will own fee simple title to the [Property] [Townhome Lots or Townhome Lots and Lot 15] [Parcel A, Lot 1, Lot 2, Lot 3, Lot 14 and Lot 15 or Parcel A, Lot 1, Lot 2, Lot 3 and Lot 14]. b. Assignor and Assignee hereby acknowledge and agree that the City has not made, and will not make, any representation or warranty that the assignment and assumption of the Development Agreement provided for hereunder will have any particular tax implications for Assignor or Assignee.
c. Assignor and Assignee each hereby waives and releases and each hereby agrees to indemnify and hold City harmless from any and all damages, liabilities, causes of action, claims or potential claims against City (including reasonable attorneys’ fees and costs) arising out of this Assignment Agreement or resulting from the assignment and assumption of the Rights and Obligations.
d. Assignor acknowledges and agrees that the Rights and Obligations have been fully assigned to Assignee by this Assignment Agreement and, accordingly, that Assignee shall have the exclusive right to assert any claims against City with respect to such Rights and Obligations. Accordingly, without limiting any claims of Assignee under the Development Agreement, Assignor hereby waives any claims or potential claims by Assignor against City to the extent arising solely out of the Rights and Obligations.

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Exhibit D

6. Development Agreement in Full Force and Effect. Except as specifically provided herein with respect to the assignment, all the terms, covenants, conditions and provisions of the Development Agreement are hereby ratified and shall remain in full force and effect.

7. Recording. Assignor shall cause this Assignment Agreement to be recorded in the Official Records of Sonoma County, California, and shall promptly provide conformed copies of the recorded Assignment Agreement to Assignee and City.

8. Successors and Assigns. Subject to the restrictions on transfer set forth in the Development Agreement, all of the terms, covenants, conditions and provisions of this Assignment Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and assigns, pursuant to Section 13.4 of the Development Agreement.

9. Assignee Address for Notices. The address of Assignee for the purpose of notices, demands and communications under Section 13.5 of the Development Agreement shall be:
_______________________________
_______________________________
_______________________________
_______________________________
Attention: ______________________
Telephone: _____________________
Facsimile: ______________________
With a copy to: _______________________________
_______________________________
_______________________________
_______________________________
Attention: ______________________
Telephone: _____________________
Facsimile: ______________________

10. Applicable Law/Venue. This Assignment Agreement shall be construed and enforced in accordance with the laws of the State of California, without reference to its choice of law provisions. Any legal actions under this Assignment Agreement shall be brought only in the Superior Court of the County of Sonoma, State of California or in the Federal District Court for the Northern District of the State of California.

11. Interpretation. All parties have been represented by counsel in the preparation and negotiation of this Assignment Agreement, and this Assignment Agreement shall be construed according to the fair meaning of its language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Assignment Agreement. Unless the context clearly requires otherwise: (a) the plural and singular numbers shall each be deemed to include the other; (b) the masculine,

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Exhibit D
feminine, and neuter genders shall each be deemed to include the others; (c) “shall,” “will,” or “agrees” are mandatory, and “may” is permissive; (d) “or” is not exclusive; and (e) “includes” and “including” are not limiting.

12. Headings. Section headings in this Assignment Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants or conditions of this Assignment Agreement.

13. Severability. Except as otherwise provided herein, if any provision(s) of this Assignment Agreement is (are) held invalid, the remainder of this Assignment Agreement shall not be affected, except as necessarily required by the invalid provisions, and shall remain in full force and effect unless amended or modified by mutual consent of the parties.

14. Counterparts. This Assignment Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute an original, but all of which, when taken together, shall constitute one and the same instrument, with the same effect as if all of the parties to this Assignment Agreement had executed the same counterpart.

15. City Consent. City is executing this Assignment Agreement for the limited purpose of consenting to the assignment and assumption and clarifying that there is privity of contract between City on the one hand, and Assignee on the other, with respect to the Development Agreement.

16. Effective Date. The Effective Date of this Assignment Agreement shall be the date upon which Assignee obtains fee title to the Property and Assignor delivers evidence of the transfer to City (“Assignment Agreement Effective Date”). For the purposes of this Section, the evidence of transfer shall consist of a duly recorded deed, and title report. [SIGNATURES FOLLOW ON SEPARATE PAGES]

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Packet Pg. 174 Attachment: ATT 1, EXHIBIT 1 Freebird Saggio Development Agreement (4021 : Freebird Development Agreement) OAK #4857-7768-0689 v9
Exhibit D
IN WITNESS WHEREOF, Assignor, Assignee and City have entered into this Assignment Agreement as of the date first above written.

ASSIGNOR:
_____________________________, a
_______________________________
By:

Name:

Its:
[Signature must be notarized]
By:

Name:

Its:
[Signature must be notarized]
ASSIGNEE:
___________________________________, a
_______________________________________
By:

Name:

Its:
[Signature must be notarized]
By:

Name:

Its:
[Signature must be notarized]
[SIGNATURES CONTINUED ON NEXT PAGE]

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Packet Pg. 175 Attachment: ATT 1, EXHIBIT 1 Freebird Saggio Development Agreement (4021 : Freebird Development Agreement) OAK #4857-7768-0689 v9
Exhibit D
CITY:

CITY OF HEALDSBURG, a California municipal
corporation
By:
_______________________, City Manager
[Signature must be notarized]
ATTEST:

By:
__________________, City Clerk
APPROVED AS TO FORM:

By:
________________, City Attorney

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Packet Pg. 176 Attachment: ATT 1, EXHIBIT 1 Freebird Saggio Development Agreement (4021 : Freebird Development Agreement) OAK #4857
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Attachment 1 to ExhibitD
ATTACHMENT 1

PROPERTY
[to be inserted]

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Packet Pg. 177 Attachment: ATT 1, EXHIBIT 1 Freebird Saggio Development Agreement (4021 : Freebird Development Agreement)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: April 17, 2023
SUBJECT: Introduction of ordinance approving Fourth Amendment to the Development Agreement between City of Healdsburg and CCS Healdsburg, LLC in reliance on the certified NEAP EIR and with adoption of a CEQA exemption pursuant to Public Resources Code section 21083.3 and CEQA Guidelines section 15183
PREPARED BY: Linda Ruffing, Planning Consultant
STRATEGIC INITIATIVE(S):

Expand Affordable Housing Opportunities
RECOMMENDED ACTION(S):

By motion, introduce for first reading, by title only and waiving the full reading of the text, an ordinance amending the Development Agreement by and between the City of Healdsburg and CCS Healdsburg, LLC, for the North Village Project to modify the affordability levels for the affordable housing component of the North Village Project in reliance on the certified NEAP EIR and with adoption of a CEQA exemption pursuant to Public Resources Code section 21083.3 and CEQA Guidelines section 15183.

COMMUNITY ENGAGEMENT/OUTREACH:

Planning for the North Village Project site began in 2018 with the initiation of the North Entry Area Plan planning process. Over the course of the past five years, the Planning Commission has held numerous workshops and the Planning Commission and City Council have conducted public hearings relating to entitlements for various components of the North Village Project.

Community engagement related to affordable housing within the North Village Project occurred in connection with the processing of master entitlements in 2019 and 2020, culminating in approval of a Development Agreement ("DA") with CCS Healdsburg, LLC ("Comstock") for the North Village Project (DA 2020-01).

The Planning Commission and City Council subsequently considered an amendment to the DA (DA 2020-01.01) to modify the affordability levels for 10 of the 30 units of affordable housing at the Enso Village Senior Housing community at public hearings conducted in February, March and June of 2022.

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The Planning Commission conducted a public hearing on February 28, 2023 to receive public input and make a recommendation to the City Council on an amendment to the DA proposed by Comstock and Burbank Housing Development Corporation ("Burbank") to adjust the affordability levels and to reduce the number of affordable units within the non-senior housing portion of the North Village Project by three units. The Planning Commission recommended that the Council approve the DA Amendment.

The City Council conducted a public hearing on March 20, 2023 to receive public input on the proposed DA Amendment and consider the introduction of an ordinance to approve the DA Amendment. The Council continued action on the matter to April 17, 2023 and provided direction to the applicant, CCS Healdsburg, LLC ("Comstock"), to either add three units back into the affordable housing or identify an alternative proposal to mitigate for the elimination of those three units. The Comstock design team has reconfigured the proposed townhome development on Parcel 2 to add one unit to each of the three buildings, resulting in three total units being added back into the affordable housing component of the project.

The Planning Commission conducted a workshop on the preliminary conceptual plans for the Parcel 2 Townhome project. The plans reviewed at the workshop included the three additional townhome units requested at the Council meeting. The plans for a 27-unit townhome project were received favorably by the Commission and feedback was provided regarding possible modifications during the next phase of the design process.

The Ordinance that is presented for Council action (see Attachment 1) has been modified to reflect Comstock’s response to Council’s March 20, 2023 direction. Specifically, the DA Amendment would require 27 Middle Income housing units, rather than the 24 Middle Income housing units originally proposed. Staff believes that this amendment is responsive to the concerns raised by the City Council at the March 20 public hearing and recommends approval of the amended DA.

BACKGROUND:

The North Village Project site comprises the North Entry Area Plan ("NEAP") planning area. In May 2019, the Healdsburg City Council certified an Environmental Impact Report ("NEAP EIR") and adopted the NEAP and an ordinance amending the Healdsburg Municipal Code to establish implementing regulations for the NEAP. The NEAP establishes a vision concept, land use guidelines, development standards and design guidelines for a new mixed-use neighborhood on the 32-acre North Village site.

In April 2020, the City Council entered into a Development Agreement ("DA") with CCS Healdsburg, LLC ("Comstock") for the North Village Project (DA 2020-01). The DA allows for development of up to 301 residential units, approximately 12,000 square feet of commercial space, and a 108-key hotel with a restaurant, bar and other amenities. The DA required the developer to construct a minimum of 15 low- and very low-income units, 39 moderate-income units and 26 middle-income units, plus 20 senior living units affordable to households with very low-income and 10 units to households with moderate-incomes. The DA was amended in June 2022 at the request of the Enso Village developer (Kendal at Sonoma, a Zen Inspired

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Community) to change the affordability levels for 10 of the 20 very low-income senior living units that are reserved for the "Zen Teachers" to 5 low-income and 5 moderate-income units with 10 remaining as very low-income units (DA 2020-01.01). Two other amendments to the DA have been approved. One amendment modifies Comstock and City obligations with regard to construction of a Fire Substation (DA 2020-01.02); the other modifies the timing for recordation of the affordable/workforce housing regulatory agreement and middle-income housing regulatory agreement (DA 2020-01.03). The DA and its three amendments are available for review on the City's website at: https://www.ci.healdsburg.ca.us/842/North-Entry-Area-Plan.

A Master Conditional Use Permit (CUP 2020-04; "Master CUP") was approved by the Planning Commission in February 2020. It established allowable uses and densities for each of the four parcels on the North Village site, defined required backbone infrastructure improvements to serve the development, and authorized a Shared Parking Plan. The Master CUP was amended by the Planning Commission in February 2022 to modify the affordability requirements for Enso Village (CUP 2020-04.01) to conform to DA 2020-01.01 as discussed above.

In November 2020, the Planning Commission approved Design Review and a Conditional Use Permit (DR 2020-09, CUP 2020-02) authorizing development of a senior living community on Parcel 1 with 221 senior independent living units, 54 assisted living/memory care beds, and associated amenities. These permits were amended in February 2022 to authorize a reduction parking spaces and modifications to the floor plan and facades of the car barn.

In May 2021, the Planning Commission approved a Design Review Permit and a Conditional Use Permit (DR 2021-06, CUP 2021-03) for a 108-key hotel with fitness facility, spa, restaurant, rooftop bar and meeting spaces on Parcel 3 and a Design Review Permit and a Conditional Use Permit (DR 2021-07, CUP 2021-04) for a mixed-use project on Parcel 4 with 12,000 square feet of commercial/retail space, 45 multi-family units, and 5 live-work units. Of these units, 24 would be targeted to moderate-income households and 26 would be targeted to middle-income households.

DISCUSSION/ANALYSIS:

Project Overview
The 32-acre North Village Project site is located at the northern end of Healdsburg between US 101 and Healdsburg Avenue (Attachment 2, Site Vicinity Map). The site is bisected by an inactive rail corridor which runs parallel to Healdsburg Avenue upon which the Sonoma-Marin Area Rail Transit has plans for future passenger rail service. Access to the site is provided via a public, at-grade rail crossing and a private street (Boxheart Drive) with a secondary emergency vehicle access from Healdsburg Avenue located near the north property boundary. While the site is approximately 32 acres, the developable area is roughly 18 acres in size due to constraints imposed by topography, drainage easements, a seismic fault zone and setbacks for the railroad corridor.

Fourth Amendment to the Development Agreement (DA 2020-01.04) The 4th DA Amendment would modify the affordability levels for Affordable/Workforce housing and Middle Income housing that is planned on Parcels 2 and 4 of the North Village Project. Attachment 1 presents the ordinance for adoption of the 4th DA Amendment with the

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text of the DA Amendment presented in Exhibit 1. As shown, Sections 5.1 and 5.2 of the DA are deleted in their entirety and replaced by modified language. Specific changes that are proposed are shown below with strike-through text denoting words to be deleted and underlined text denoting words to be added.

5.1 Affordable/Workforce Housing Units.
(a) Developer shall cause construction of a minimum of thirty (30) fifty-three (53) units of Affordable/Workforce Housing within the Project, affordable to households with very low, low, and moderate incomes, as follows:
(i) Six (6) Approximately ten (10) dwelling units are anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Very Low Income Households.
(ii) Nine (9) Approximately forty-two (42) dwelling units are anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Low and Moderate Income Households.
(iii) Fifteen (15) One (1) dwelling units, the manager's unit, will be a restricted unit, up to 120% of AMI. are anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Moderate Income Households.
(b) Notwithstanding the foregoing, the final mix of
Affordable/Workforce Housing units in any given affordability category may vary, but in no event shall less than three (3) units be occupied by Very Low Income Households, and no greater than thirteen (13) units be occupied by Moderate Income Households, nor shall more than fifteen (15) units be occupied by households between 80% and 120% of AMI. (c) Developer shall provide approximately five (5) eighteen (18) one-bedroom dwelling units, nine (9) twenty-four (24) two-bedroom dwelling units, and sixteen (16) eleven (11) three-bedroom dwelling units within the Affordable/Workforce Housing. Notwithstanding the foregoing, Developer shall have the right to construct at least eight (8) three-bedroom dwelling units within the Affordable/Workforce Housing. (d) Developer or developer's successor in interest with respect to the parcel or parcels on which the Affordable/Workforce Housing is to be located shall enter into an “Affordable Housing Agreement” with City setting forth its obligations to provide and maintain the Affordable/Workforce Housing units for a term of 55 years. The Affordable Housing Agreement shall be executed by Developer or developer's successor in interest with respect to the portion of the Property containing the Affordable/Workforce Housing units and be recorded against such portion of the Property containing the Affordable/Workforce Housing units prior to City issuance of a final certificate of occupancy for the hotel. The Affordable Housing Agreement shall be assignable to and assumable by the owner and operator of the Affordable/Workforce Housing units, and all portions of the Property except for the parcel containing the Affordable/Workforce

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Housing units shall be released from the City shall release the Affordable Housing Agreement from the Property except for the parcel containing the Affordable/Workforce Housing units upon the first to occur of (i) issuance of a final certificate of occupancy for the Affordable/Workforce Housing units or (ii) delivery to City of a completion issuance of a completion guaranty pursuant to Section 5.5(a) of this Agreement, whichever is earlier. After satisfaction of the earliest to occur of such conditions, and upon request of Developer or its successor, City will provide a release in recordable form from the obligations of the Affordable Housing Agreement with respect to those portions of the Property no longer subject to such obligations and authorize recordation thereof in the Official Records.

5.2 Middle Income Housing Units.
(a) Developer shall cause construction of a minimum of fifty (50) twentyseven (27) units of Middle Income Housing within the Project, which shall be made available at an affordable rent to households with moderate and middle incomes Middle Income Households, as follows:
(i) Twenty-seven (27) dwelling units shall be made available for occupancy at an affordable rent, adjusted for household size, to Moderate Middle Income Households.
(i) Twenty one (21) dwelling units shall be made available for occupancy at an affordable rent, adjusted for household size, to Middle Income Households.
(ii) Five (5) live-work units shall be made available for occupancy at an affordable rent, adjusted for household size, to Middle Income Households. (b) Developer shall provide fifteen (15) studio dwelling units, sixteen (16) one-bedroom dwelling units, fourteen (14) two-bedroom dwelling units, and five (5) livework dwelling units of approximately 1,000 square feet per unit within the Middle Income Housing.
(cb) The Middle Income Housing will require Growth Management Ordinance (“GMO”) Category C allocations. If the GMO is modified in the future to allow units sold at an affordable sales price to Middle Income Households to qualify for Category C allocations, Developer may, in its sole discretion, develop the Middle Income Housing for sale rather than for rent at an affordable sales price to Middle Income Households. (c) Developer or its successor in interest shall enter into a “Middle Income Housing Agreement” with City setting forth its obligations to provide and maintain the Middle Income Housing units for a term of 55 years. The regulatory agreement shall meet any applicable requirements of the GMO Policies and Procedures as may be amended, or applicable new GMO policies and procedures that may be adopted, by the City Council specifically for Middle Income Housing units that do not otherwise conflict with the terms of this Agreement. The Middle Income Housing Agreement shall be executed by Developer or its successor in interest with respect to the portion of the

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Property containing the Middle Income Housing units and be recorded against such portion of the Property containing the Middle Income Housing units prior to City issuance of a final certificate of occupancy for the hotel. The Middle Income Housing Agreement shall be assignable to and assumable by the owner and operator of the Middle Income Housing units, and City shall release the Middle Income Housing Agreement from all portions of the Property except for the parcel containing the Middle Income Housing units shall be released from the Middle Income Housing Agreement upon the first to occur of (i) issuance of a final certificate of occupancy for the last Middle Income Housing units to be constructed or (ii) delivery to City of a completion issuance of a guaranty pursuant to Section 5.5(a) of this Agreement, whichever is earlier. After satisfaction of the earliest to occur of such conditions, upon request of Developer or its successor, City will provide a release in recordable form from the obligations of the Middle Income Housing Agreement with respect to those portions of the Property no longer subject to such obligations, and authorize recordation thereof in the Official Records.

In addition to the modifications noted above, the 4th DA Amendment includes the following minor changes:
▪ Recital E in the DA is modified to reflect the changes to the mix and affordability levels for the Affordable/Workforce and Middle Income housing. ▪ Section 5.4(c) is updated to clarify that the obligations of the Senior Living Community Affordable Housing Agreement have been assigned to Kendal at Sonoma as the owner and operator of the Senior Living Community.
▪ Section 5.5(a) is modified to refer to the form of the completion guaranty attached to the 4th DA Amendment and to cross-reference other sections that reference the guaranty.

Summary of Changes to Unit Count and Affordability Levels As shown on the following tables, the 4th DA Amendment would deepen the affordability levels for the North Village project by increasing the number of Low- and Very Low-Income units and decreasing the number of Moderate- and Middle-Income Units. The number of Middle-Income units (i.e., the Category C units) would be increased from 26 to 27 units and, overall, the total number of units sitewide would remain the same.

NORTH VILLAGE - APPROVED HOUSING AFFORDABILITY MIX
Affordability AMI Parcel 4 Parcel 2 Enso
Village
TOTAL
Very Low and Low 50 - 80% 15 15 30
Moderate 80 -120% 24 15 15 54
Middle 120 -160% 26 26
TOTAL UNITS 50 30 30 110
Note: Enso originally had 20 Very Low and 10 Moderate units. This was modified by the 1st DA Amendment to 10 Very Low, 5 Low and 15 Moderate units (June 2022)

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NORTH VILLAGE - PROPOSED HOUSING AFFORDABILITY MIX
Affordability AMI Parcel 4 Parcel 2 Enso
Village
TOTAL
Very Low and Low 50 - 80% 40 15 55
Moderate 80 -120% 13 15 28
Middle 120 -160% 27 27
TOTAL UNITS 53 27 30 110
Context for Proposed 4th DA Amendment
The original plans for the North Village Project as embodied in the Master CUP and DA envisioned 30 multi-family apartment units on Parcel 2 and 50 multi-family apartment units in a mixed use development on Parcel 4. In 2020, Comstock and Burbank teamed up to develop an affordable housing project on Parcel 2. Burbank applied for tax credit financing for a 36-unit affordable housing project and the application was unsuccessful. In 2021, Burbank applied for tax credit financing for a 53-unit affordable housing project on Parcel 4. That application was also unsuccessful. Burbank and Comstock are now planning to fund a proposed affordable housing project on Parcel 4 through the issuance of tax-exempt revenue bonds through the California Municipal Finance Authority (CFMA) Joint Powers Authority. This funding source requires that 75% of the units be affordable to very low- and low-income households. The remaining 25% of the units may be targeted to moderate-income households.

Comstock and Burbank are seeking flexibility in the number of units in each affordability category in order for the mix to be tailored to revenue requirements and market conditions. As set forth in the proposed 4th DA Amendment, the proposed affordability mix for the 53-unit project on Parcel 4 would include:
• approximately 10 units to be restricted to Very Low-Income households (at or below 50% AMI)
• approximately 42 units to be restricted to Low- and Moderate-Income households (50- 120% AMI).
• 1 unit (the manager's unit) to be restricted as Moderate-Income (80-120% AMI) • Of the total 53 units - at least 3 units must be Very Low-Income and no more than 13 units may be Moderate-Income.

The DA Amendment would require that 27 Middle-Income housing units (120-160% AMI) be developed within the Project. Comstock proposes to construct the Middle-Income units on Parcel

2. Plans for the Parcel 2 project are currently in the City's development review process. After the March 20, 2023 City Council hearing on the DA Amendment, the Comstock design team revised the plans for the Parcel 2 project. Whereas it previously included 24 "for sale" townhome units in three buildings with attached two-car garages for each unit, the revised plans now include 27 townhome units in order to retain the sitewide total of 110 affordable units as established in the original DA.

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The following table from the City of Healdsburg's draft Housing Element Update (6th Cycle) presents a strategy for addressing the City's Regional Housing Needs Allocation (RHNA), which incorporates North Village Project development at the approved affordability levels. As shown, the RHNA identifies the greatest unmet housing needs as in the Very Low, Low-, and Above Moderate-Income categories, all of which would be addressed by proposed housing on Parcels 2 and 4 of the North Village Project and the modifications included in the 4th DA Amendment.

The modifications to the affordability mix as proposed in the 4th DA Amendment have a minimal effect on the City's ability to meet its 6th Cycle Regional Housing Needs Allocation as demonstrated by the chart above. However, the North Village affordable housing project, as a whole, is critical in meeting our State mandated housing goals. While RHNA may not be a true reflection of the City's total housing needs, it plays an important role in ensuring the City can access funding, and accommodating the RHNA is required for the City to remain in compliance with housing element law. The increase in the Very-Low to Low Income units will provide rents affordable to a family of four making between $59,400 to $95,050 a year and for individuals making between $41,600 and $66,500 a year. With the average salary for a hotel worker in Healdsburg currently at $48,036, these units will be in high demand and fit a market need.

Planning Commission Recommendation:

On February 28, 2023, the Planning Commission conducted a public hearing on the 4th DA Amendment and related entitlements. The Planning Commission adopted a resolution recommending that the City Council approve the 4th DA Amendment. They also approved the other requested entitlements subject to the City Council's approval of the 4th DA Amendment.

Attachment 3 presents the Planning Commission staff report for the February 28, 2023 hearing on the 4th DA Amendment and Attachment 4 presents the draft minutes of the Planning Commission meeting. Attachment 5 presents Planning Commission Resolution No. 2023-04 recommending that the City Council adopt an ordinance approving the 4th DA Amendment (DA 2020-01.04) based on the following findings:

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A. The Development Agreement and its Fourth Amendment are consistent with the Healdsburg 2030 General Plan, the North Entry Area Plan, and the Land Use Code. The City Council made findings of consistency in its action to adopt Ordinance No. 1202, approving the Development Agreement, and the Fourth Amendment does not modify the Development Agreement in any way that would conflict with the goals and policies of the Healdsburg 2030 General Plan and the North Entry Area Plan, and requirements of the City's Land Use Code.

B. The Development Agreement and its Fourth Amendment will provide Healdsburg with tangible benefits including: 107 units of Affordable and Middle Income Housing; a $2,000,000 contribution for construction of a Fire Substation; contribution of $250,000 to the City for connectivity improvements; annual payments to the City of approximately $334,000 per year from the Senior Living Community for lost tax revenue and increased demands for services; remittance of a 1/2% Hotel Add-On Fee (beginning 10 years after issuance of a certificate of occupancy for the hotel); and other improvements.

C. Any environmental impacts related to the Development Agreement have been reviewed and considered in accordance with the provisions of the California Environmental Quality Act.

On May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations. An Addendum to the NEAP EIR ("Addendum") was prepared pursuant to Public Resources Code section 21166 and CEQA Guidelines section 15164, to document the City’s review of subsequent entitlements for the North Village project. As explained in the Addendum, the City determined that the North Village Project did not warrant preparation of a subsequent or supplemental EIR as the Project involved no new significant environmental effects and would not result in a substantial increase in the severity of previously identified significant effects. The EIR and Addendum can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448. In accordance with the California Environment Quality Act (CEQA) Guidelines Section 15162, no further environmental review is required for the Fourth Amendment because (i) there are no changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, (ii) there are no changes with respect to the circumstances under which the project is taken which will require major revisions to the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, and (iii) there is no new information of substantial importance that was not known at the time the EIR was certified which shows (a) the project will have one or more significant effects not discussed in the EIR, (b) significant impacts/effects will be substantially more severe than shown in the EIR, (c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects/impacts, or (d) mitigation measures or alternatives which are considerably different from those analyzed in the EIR would substantially reduce one or more significant effects/impacts on the environment.

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ENVIRONMENTAL STEWARDSHIP:

The environmental effects of the North Village Project were evaluated at a programmatic level in the NEAP EIR and at a project-specific level in an Addendum to the EIR. All development on the North Village site is subject to a Mitigation Monitoring and Reporting Program ("MMRP") that was prepared for the NEAP EIR.

ALTERNATIVES:

1. Recommended actions: introduce for first reading and waive full reading of text of ordinance approving Fourth Amendment to the Development Agreement for the North Village Project (DA 2020-01.04).

2. Incorporate specific modifications into the ordinance prior to taking Council action. Note:
depending on the substance of such changes, the ordinance may need to be sent back to the Planning Commission for review prior to Council action.

3. Defer action on the ordinance and direct staff to provide additional information and/or analysis to help inform City Council action(s).

FISCAL IMPACT:

The North Village Project is a privately funded development. The project will generate property and sales tax revenues which will help to offset the City's costs of providing services to the project.

ENVIRONMENTAL ANALYSIS:

During the NEAP planning process, an Environmental Impact Report ("NEAP EIR") was prepared to analyze the potential project and cumulative environmental impacts associated with future development under the NEAP (State Clearinghouse No. 2018062041). The NEAP EIR found that, with the implementation of mitigation measures identified in the EIR, all significant impacts could be reduced to a less than significant level except for the traffic impacts and safety hazards at the U.S. 101/Dry Creek Road intersection and the Dry Creek Road/Grove Street intersection. These impacts were identified as significant unavoidable adverse impacts and pursuant to CEQA Guidelines section 15083, a Statement of Overriding Considerations was adopted as part of the City Council resolution certifying the NEAP EIR. On May 20, 2019, the City Council certified the NEAP EIR and adopted a Mitigation Monitoring and Reporting Program ("NEAP MMRP") to ensure implementation of mitigation measures identified in the EIR.

An Addendum to the NEAP EIR was prepared pursuant to Public Resources Code section 21166 and CEQA Guidelines section 15164, to document the City’s review of subsequent entitlements for the North Village project. As explained in the Addendum, the City determined that the North Village Project did not warrant preparation of a new subsequent or supplemental EIR as the Project involved no new significant environmental effects and would not result in a substantial increase in the severity of previously identified significant effects.

For the 4th DA Amendment, the City has identified the following applicable CEQA streamlining and/or tiering code sections, each of which, separately and independently, provides a basis for the project’s CEQA compliance:

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A. A Community Plan Exemption, pursuant to Public Resources Code section 21083.3 and CEQA Guidelines section 15183;
B. Reliance on the NEAP EIR as a Program EIR, pursuant to CEQA Guidelines section 15168.

Based on an examination of the analysis, findings, and conclusions of the NEAP EIR and Addendum, the potential impacts of the proposed North Village Project with adoption of the 4th DA Amendment remain within the impacts previously analyzed and disclosed in the NEAP EIR and its Addendum. Moreover, none of the circumstances described in CEQA Guidelines section 15162 that require subsequent or supplemental environmental review have occurred. Therefore, per CEQA Guidelines sections 15162, 15164, 15168 and 15183 no further analysis is required under CEQA before taking action on the 4th DA Amendment for the North Village Project.

ATTACHMENT(S):

1. Ordinance

2. Site Vicinity Map

3. PC Staff Report

4. PC Minutes

5. PC Resolution

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11134.00028/1278741v4 1

CITY OF HEALDSBURG
ORDINANCE NO. ___

AN ORDINANCE OF THE CITY COUNCIL OF THE

CITY OF HEALDSBURG APPROVING A FOURTH

AMENDMENT TO THE DEVELOPMENT

AGREEMENT BY AND BETWEEN THE CITY OF

HEALDSBURG AND CCS HEALDSBURG, LLC FOR

THE NORTH VILLAGE PROJECT
WHEREAS, under the authority of Ordinance No. 1202, the City of Healdsburg, a California municipal corporation (“City”) and CCS Healdsburg, LLC, a Delaware limited liability company ("Developer") entered into a Development Agreement, dated May 6, 2020; and a Memorandum of Development Agreement was recorded in the Official Records of Sonoma County on June 1, 2020, as Instrument No. 2020-041464 (“Development Agreement”); and WHEREAS, the Development Agreement governs the development of an approximately 32-acre property located at 16977 Healdsburg Avenue with a Senior Living Community with 221 independent living units, ancillary facilities including dining facilities, meeting rooms, administrative offices, and a total of 54 assisted living and memory care beds; 30 multi-family apartments; a 108-key hotel with a restaurant/bar, fitness facility and spa, meetings rooms and other amenities; and 45 multi-family units, five live-work units, and 12,000 square feet of commercial/retail space in a mixed use development ("Project"); and WHEREAS, City staff and Developer have prepared a proposed Fourth Amendment to the Development Agreement ("Fourth Amendment") for consideration by the Healdsburg Planning Commission and the Healdsburg City Council; and
WHEREAS, the Fourth Amendment is intended to provide for efficient and cost-effective completion of construction of the affordable housing component of the North Village Project given changes in construction costs, project financing, and other factors that have occurred since the City originally approved the Development Agreement; and
WHEREAS, in accordance with Sections 65864 through 65869.5 of the California Government Code (“State Development Agreement Law”), the City adopted Ordinance No. 1097 to add Chapter 17.20 to the Healdsburg Municipal Code authorizing the use of, and imposing additional requirements on, development agreements; and WHEREAS, pursuant to the California Environmental Quality Act (Pub. Res. Code § 21000, et seq.), the City prepared and, on May 20, 2019, the City Council certified the Final Environmental Impact Report for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448; and

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WHEREAS, pursuant to Chapter 17.20.060 of the Healdsburg Municipal Code, the Planning Commission held a noticed public hearing on February 28, 2023, for the purpose of receiving oral testimony on, deliberating, and making a recommendation regarding the proposed Second Amendment. The Commission considered all public comments received and all pertinent documents, including the Staff Report dated February 28, 2023, regarding the proposed Fourth Amendment, and by Resolution No. 2023-04, recommended approval of the Fourth Amendment; and
WHEREAS, the Healdsburg City Council held a duly noticed public hearing on the Fourth Amendment on March 20, 2023, which was continued to April 17 2023, reviewed the written and verbal staff reports, took testimony, received into the record all pertinent documents related to the Project.

NOW, THEREFORE BE IT ORDAINED that the Healdsburg City Council hereby approves the Fourth Amendment to the Development Agreement by and between the City of Healdsburg and CCS Healdsburg, LLC, as presented in Exhibit 1 to this ordinance and based upon the facts and findings as set forth below:

Section 1. Findings.

1. The foregoing Recitals are true and correct and by this reference are made a part hereof.

2. The Development Agreement and its Fourth Amendment are consistent with the Healdsburg 2030 General Plan, the North Entry Area Plan, and the Land Use Code.

The City Council made findings of consistency in its action to adopt Ordinance No. 1202, approving the Development Agreement, and the Fourth Amendment does not modify the Development Agreement in any way that would conflict with the goals and policies of the Healdsburg 2030 General Plan and the North Entry Area Plan, and requirements of the City's Land Use Code.

3. The Development Agreement and its Fourth Amendment will provide Healdsburg with tangible benefits including: 110 units of Affordable and Middle Income Housing; a $2,000,000 contribution for construction of a Fire Substation; contribution of $250,000 to the City for connectivity improvements; annual payments to the City of approximately $334,000 per year from the Senior Living Community for lost tax revenue and increased demands for services; remittance of a 1/2% Hotel Add-On Fee (beginning 10 years after issuance of a certificate of occupancy for the hotel); and other improvements.

4. Any environmental impacts related to the Development Agreement have been reviewed and considered in accordance with the provisions of the California Environmental Quality Act. On May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations.

An Addendum to the NEAP EIR ("Addendum") was prepared pursuant to Public Resources Code section 21166 and CEQA Guidelines section 15164, to document the City’s review of subsequent entitlements for the North Village project. As explained

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in the Addendum, the City determined that the North Village Project did not warrant preparation of a subsequent or supplemental EIR as the Project involved no new significant environmental effects and would not result in a substantial increase in the severity of previously identified significant effects. The EIR and Addendum can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448. In accordance with the California Environment Quality Act (CEQA) Guidelines Section 15162, no further environmental review is required for the Fourth Amendment because (i) there are no changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, (ii) there are no changes with respect to the circumstances under which the project is taken which will require major revisions to the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, and (iii) there is no new information of substantial importance that was not known at the time the EIR was certified which shows (a) the project will have one or more significant effects not discussed in the EIR, (b) significant impacts/effects will be substantially more severe than shown in the EIR, (c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects/impacts, or (d) mitigation measures or alternatives which are considerably different from those analyzed in the EIR would substantially reduce one or more significant effects/impacts on the environment.

Section 2. Approval and Execution. The City Council hereby approves the Fourth Amendment to the Development Agreement, substantially in the form attached hereto as Exhibit A, subject to such minor and clarifying changes consistent with the terms thereof as may be approved by the City Attorney prior to execution hereof. The City Council further authorizes the City Manager to execute the Fourth Amendment on behalf of the City.

Section 3. Severability. If any section, subsection, sentence, clause or phrase or word of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed and adopted this Ordinance and each and all provisions thereof irrespective of the fact that any one or more of said provisions may be declared unconstitutional, unlawful or otherwise invalid.

Section 4. Effective and Operative Dates. This Ordinance of the City of Healdsburg shall be effective thirty (30) days after the date of its passage. Before expiration of fifteen days after its passage, this ordinance or a summary thereof as provided in Government Code Section 36933, shall be published at least once in a newspaper of general circulation published and circulated in the City of Healdsburg, along with the names of the City Council voting for and against its passage.

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This ordinance was introduced by the City Council of the City of Healdsburg, County of Sonoma, at a regular meeting thereof on the 17th day of April, 2023, and passed and adopted on the __ day of ____, 2023 by the following roll call vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED ATTEST
________________________________ _____________________________________ Ariel Kelley, Mayor Raina Allan, City Clerk
Dated: ______________________________

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Exhibit A

FOURTH AMENDMENT TO DEVELOPMENT AGREEMENT
THIS FOURTH AMENDMENT TO DEVELOPMENT AGREEMENT (the “Fourth Amendment”) is made and entered into as of [the 30th day following final adoption of the ordinance approving it] ("Fourth Amendment Effective Date") by and between the CITY OF HEALDSBURG, a California municipal corporation ("City") and CCS HEALDSBURG, LLC, a Delaware limited liability company (“Developer”). City and Developer may each be referred to as a “Party,” and collectively as the “Parties.”

RECITALS
A. On May 6, 2020, the Parties entered into that certain Development Agreement (the "Original Agreement"), which Original Agreement was recorded on June 1, 2020 in the Official Records of Sonoma County (“Official Records”) as Document No. 2020041464, as amended by that certain First Amendment to Development Agreement (“First Amendment”) dated as of June 21, 2022, and memorialized in that certain Memorandum of First Amendment to Development Agreement dated June 21, 2022, which recorded in the Official Records on September 30, 2022 as Document No. 2022063576, and by that certain Second Amendment to Development Agreement (“Second Amendment”) dated as of April 18, 2022 and memorialized in the certain Memorandum of Second Amendment to Development Agreement dated April 18, 2022 and recorded in the Official Records on September 13, 2022 as Instrument No. 2022059935, and by that certain Third (Administrative Agreement) Amendment to Development Agreement (the “Third Amendment”) dated as of December 22, 2022, (the Original Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment and this Fourth Amendment shall be referred to as the “Development Agreement”). The Development Agreement concerns the development of an approximately 32-acre parcel of land at 16977 Healdsburg Avenue in the City of Healdsburg, defined as the "Property" in the Development Agreement, and shown on Exhibit A attached to the Original Agreement. The Development Agreement was assigned in part to KENDAL AT SONOMA, A ZEN INSPIRED COMMUNITY, a California nonprofit public benefit company (“Kendal”), pursuant to that certain Partial Assignment of Rights and Assumption of Obligations Under Development Agreement (the "Partial Assignment") dated August 20, 2020, which was recorded in the Official Records on August 21, 2020 as Instrument No. 2020071885.

B. The parties agree to modify the Development Agreement pursuant to Government Code Sections 65867 and 65868, and Healdsburg Municipal Code Section 17.20.060, in order to modify the terms related to the affordable housing conditions as provided below.

C. On _____________, 2023, the City Council, after duly noticed public hearing, introduced its Ordinance _________ approving this Fourth Amendment and authorizing its execution and adopted that Ordinance __________ on ____________. Ordinance ____________ became effective on _____________.

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AGREEMENT
NOW, THEREFORE, with reference to the foregoing recitals and in consideration of the mutual promises, obligations and covenants contained herein, Parties consent to this Fourth Amendment as follows:

1. Defined Terms. All capitalized terms used herein shall have the meanings given in the Development Agreement, except as expressly otherwise defined herein.

2. Enumeration of Specific Deletions and Amendments. The Development Agreement is hereby revised to incorporate the following amendments. (a) Replace and restate Recital E, Paragraphs 1.a. and 1.b. in their entirety as

1.a. Fifty-three (53) affordable/workforce apartments subject to recorded restrictions that require occupancy by households with very low, low, and moderate incomes, of which approximately ten (10) units are anticipated to be for households at or below 50% of area median income (“AMI”), approximately forty-two (42) units are anticipated to be for households between 50% and 120% of AMI and one (1) unit, the manager’s unit will be restricted to be for a household of up to 120% of AMI (collectively, “Affordable/Workforce Housing”).

1.b. Twenty-seven (27) multi-family housing units subject to recorded restrictions that require occupancy by Middle Income Households (or below), (collectively, “Middle Income Housing”).
(b) Replace and restate Section 5.1 in its entirety as follows:

5.1 Affordable/Workforce Housing Units.
(a) Developer shall cause construction of a minimum of fiftythree (53) units of Affordable/Workforce Housing within the Project, affordable to households with very low, low, and moderate incomes, as follows:
(i) Approximately ten (10) dwelling units are anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Very Low Income Households.
(ii) Approximately forty-two (42) dwelling units are
anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Low and Moderate Income Households.
(iii) One (1) dwelling unit, the manager’s unit, will be a restricted unit up to 120% of AMI.

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(b) Notwithstanding the foregoing, the final mix of
Affordable/Workforce Housing units in any given affordability category may vary, but in no event shall less than three (3) units be occupied by Very Low Income Households, and no greater than thirteen (13) units be occupied by Moderate Income Households.
(c) Developer shall provide approximately eighteen (18) onebedroom dwelling units, twenty-four (24) two-bedroom dwelling units, and eleven (11) three-bedroom dwelling units within the Affordable/Workforce Housing. Notwithstanding the foregoing, Developer shall have the right to construct at least eight (8) three-bedroom dwelling units within the Affordable/Workforce Housing.
(d) Developer or its successor in interest with respect to the parcel or parcels on which the Affordable/Workforce Housing is to be located shall enter into an “Affordable Housing Agreement” with City setting forth its obligations to provide and maintain the Affordable/Workforce Housing units for a term of 55 years. The Affordable Housing Agreement shall be executed by Developer or developer's successor in interest with respect to the portion of the Property containing the Affordable/Workforce Housing units and be recorded against such portion of the Property containing the Affordable/Workforce Housing units prior to City issuance of a final certificate of occupancy for the hotel. The Affordable Housing Agreement shall be assignable to and assumable by the owner and operator of the Affordable/Workforce Housing units, and all portions of the Property except for the parcel containing the Affordable/Workforce Housing units shall be released from the Affordable Housing Agreement upon the first to occur of (i) issuance of a certificate of occupancy for the Affordable/Workforce Housing units or (ii) delivery to City of a completion guaranty pursuant to Section 5.5(a) of this Agreement, whichever is earlier. After satisfaction of the earliest to occur of such conditions, and upon request of Developer or its successor, City will provide a release in recordable form from the obligations of the Affordable Housing Agreement with respect to those portions of the Property no longer subject to such obligations and authorize recordation thereof in the Official Records.
(c) Replace and restate Section 5.2 in its entirety as follows:

5.2 Middle Income Housing Units.
(a) Developer shall cause construction of a minimum of
twenty-seven (27) units of Middle Income Housing within the Project, which shall be made available at an affordable rent to Middle Income Households, as follows:
(i) Twenty-seven (27) dwelling units shall be made
available for occupancy at an affordable rent, adjusted for

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household size, to Middle Income Households.
(b) The Middle Income Housing will require Growth
Management Ordinance (“GMO”) Category C allocations. Developer may, in its sole discretion, develop the Middle Income Housing for sale rather than for rent at an affordable sales price to Middle Income Households.
(c) Developer or its successor in interest shall enter into a “Middle Income Housing Agreement” with City setting forth its obligations to provide and maintain the Middle Income Housing units for a term of 55 years. The regulatory agreement shall meet any applicable requirements of the GMO Policies and Procedures as may be amended, or applicable new GMO policies and procedures that may be adopted, by the City Council specifically for Middle Income Housing units that do not otherwise conflict with the terms of this Agreement. The Middle Income Housing Agreement shall be executed by Developer or its successor in interest with respect to the portion of the Property containing the Middle Income Housing units and be recorded against such portion of the Property containing the Middle Income Housing units prior to City issuance of a final certificate of occupancy for the hotel. The Middle Income Housing Agreement shall be assignable to and assumable by the owner and operator of the Middle Income Housing units, and all portions of the Property except for the parcel containing the Middle Income Housing units shall be released from the Middle Income Housing Agreement upon the first to occur of (i) issuance of a final certificate of occupancy for the last Middle Income Housing unit to be constructed or (ii) delivery to City of a completion guaranty pursuant to Section 5.5(a) of this Agreement. After satisfaction of the earliest to occur of such conditions, upon request of Developer or its successor, City will provide a release in recordable form from the obligations of the Middle Income Housing Agreement with respect to those portions of the Property no longer subject to such obligations, and authorize recordation thereof in the Official Records.
(d) The final sentence in Section 5.4(c) is deleted in its entirety and replaced with the following:
“The obligations with respect to the Senior Living Community Affordable Housing Agreement has been assigned to Kendal pursuant to the Partial Assignment, as the owner and operator of the Senior Living Community, and the obligations arising thereunder, and all other obligations set forth in Section 5.4 of the Development Agreement with respect to Senior Living Community Affordable Housing are not applicable to any other parcels of the Property other than the Senior Living Community.”
(e) Replace and restate Section 5.5(a) in its entirety as follows:

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5.5(a) All Workforce/Affordable Housing units and
Middle Income Housing units must have received a certificate of occupancy before City will issue a final certificate of occupancy for the hotel portion of the Property. Notwithstanding the foregoing, in lieu of obtaining certificates of occupancy for Workforce/Affordable Housing or Middle Income Housing units required immediately above, Developer or its successor may provide a completion guaranty in favor of City, in substantially the form attached as Exhibit 1 hereto, or in a form reasonably acceptable to the City Manager, whose approval thereof shall not be unreasonably withheld, conditioned, or delayed, in order to secure the obligation to obtain certificates of occupancy for any
Workforce/Affordable Housing units or Middle Income Housing units otherwise required under this Agreement but not yet obtained. The completion guaranty(ies) that may be provided with respect to this Section

5.5(a) (and also including the corresponding provisions of Sections 5.1(d) and 5.2(c) with respect to the delivery of a completion guaranty as to the Workforce/Affordable Housing units and/or Middle Income Housing units, respectively), may be provided by (or if previously provided by Developer, assigned to and assumed by) the owner and operator of the Workforce/Affordable Housing units and/or Middle Income Housing units, respectively, and upon such completion guaranty being provided (or assigned and assumed) by such party, City shall release the remainder of the Property from the obligations imposed by this Section 5.5(a) and Sections 5.1(d) and 5.2(c), as applicable.

3. Interpretation. The Development Agreement shall be construed as having been modified by this Fourth Amendment. Except as expressly modified by this Fourth Amendment. the Development Agreement remains in full force and effect. In the case of conflict between the provisions hereof and the terms of the Development Agreement, the provisions of this Fourth Amendment shall control.

4. Recording of Memorandum. Approximately concurrent with the Fourth Amendment Effective Date, the Parties shall execute, acknowledge and record a Memorandum of this Fourth Amendment in the Official Records.

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Packet Pg. 197 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3
IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

CITY
City of Healdsburg, a California municipal corporation
By: _________________________
Jeff Kay
City Manager
APPROVED AS TO FORM:

By: __________________________
Samantha Zutler, Esq. City Attorney
ATTEST:

By: __________________________
Raina Allan City Clerk

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Packet Pg. 198 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3

DEVELOPER
CCS Healdsburg, LLC, a Delaware limited liability
company
By: CCS Healdsburg Manager, LLC, a Delaware limited liability company
Its: Manager
By: CCA Management, LLC,
a California limited liability company
Its: Manager
By: Comstock Crosser & Associates Development
Company, LLC, a California limited liability
company
Its: Manager
By:

Nicholas Long, CFO

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Packet Pg. 199 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3
EXHIBIT 1

FORM OF COMPLETION GUARANTY
THIS COMPLETION GUARANTY (the “Guaranty”) is made as of ____________________ (“Guarantor”), for the benefit of the CITY OF HEALDSBURG, a California municipal corporation (“City”), with reference to the following recitals of fact:

RECITALS
A. WHEREAS, CCS HEALDSBURG, LLC, a Delaware limited liability company (“Master Developer”) and City entered into that certain Development Agreement (the "Original Agreement"), which Original Agreement was recorded on June 1, 2020 in the Official Records of Sonoma County (“Official Records”) as Document No. 2020041464, as amended by that certain First Amendment to Development Agreement (“First Amendment”) dated as of June 21, 2022, and memorialized in that certain Memorandum of First Amendment to Development Agreement dated June 21, 2022, which recorded in the Official Records on September 30, 2022 as Document No. 2022063576, and by that certain Second Amendment to Development Agreement (“Second Amendment”) dated as of April 18, 2022 and memorialized in the certain Memorandum of Second Amendment to Development Agreement dated April 18, 2022 and recorded in the Official Records on September 13, 2022 as Instrument No. 2022059935, and by that certain Third (Administrative Agreement) Amendment to Development Agreement (the “Third Amendment”) dated as of December 22, 2022, (the Original Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment and this Fourth Amendment shall be referred to as the “Development Agreement”). The Development Agreement concerns the development of an approximately 32-acre parcel of land at 16977 Healdsburg Avenue in the City of Healdsburg, defined as the "Property" in the Development Agreement, and shown on Exhibit A attached to the Original Agreement.

The Development Agreement was assigned in part to KENDAL AT SONOMA, A ZEN INSPIRED COMMUNITY, a California nonprofit public benefit company (“Kendal”), pursuant to that certain Partial Assignment of Rights and Assumption of Obligations Under Development Agreement (the "Partial Assignment") dated August 20, 2020, which was recorded in the Official Records on August 21, 2020 as Instrument No. 2020071885.;
B. WHEREAS, the Development Agreement contemplates the construction of affordable/workforce apartments subject to recorded restrictions that require occupancy by households with very low, low, and moderate incomes (the “Workforce/Affordable Housing”) as well as housing units subject to recorded restrictions that require occupancy by households with moderate and middle incomes (“Middle Income Housing”), on certain real property located within the City, commonly known as Parcels 2 and 4 of the North Village Site, as more particularly described in Exhibit A attached hereto and incorporated herein by reference (“Parcel 2” and “Parcel 4”, respectively); C. WHEREAS, pursuant to Section 5.5(a) of the Development Agreement, Master Developer is obligated to provide evidence of a completion guaranty to City, in a form reasonably acceptable to the City, to secure Master Developer’s obligation to deliver all Workforce/Affordable Housing units and Middle Income Housing units under the Development Agreement; and D. WHEREAS, Master Developer (also referred to in this Agreement as “Developer”), has provided to City this Guaranty from [Master Developer or an affiliate of Master Developer], in order to satisfy its obligation set forth in Section 5.5(a) of the Development Agreement with respect to the [Workforce/Affordable Housing units and the Middle Income Housing units]; and

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Packet Pg. 200 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3
[OR]
D. WHEREAS, in connection with the transfer of fee title from Master Developer to __________________ with regard to [Parcel __] (“Developer”), Developer has provided to City this Guaranty from Developer or its affiliate (referred to in this Agreement as “Guarantor”), in order to satisfy its obligation set forth in Section 5.5(a) of the Development Agreement; and E. WHEREAS, Guarantor desires to guaranty to City completion of construction of the Workforce/Affordable Housing units and Middle Income Housing units in accordance with the terms of the Development Agreement and this Guaranty.

NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, Guarantor hereby agrees as follows:

1. Defined Terms. Capitalized terms not otherwise defined in this Guaranty are as defined in the Development Agreement.

2. Guaranty. Subject to the terms and conditions set forth herein, Guarantor unconditionally and irrevocably guarantees construction of the [Workforce/Affordable Housing units and/or Middle Income Housing units] by Developer as required by, and in accordance with, the terms and conditions of the Development Agreement.

3. Obligations of Guarantor Upon Default By Developer. If Developer fails to complete the construction of the [Workforce/Affordable Housing Units as may be provided in the Affordable Housing Agreement to be entered into with respect to the Project as provided in Section

5.1(d) of the Development Agreement with respect to the Workforce/Affordable Housing units], [and as may be provided in the Middle Income Housing Agreement to be entered into with respect to the Project as provided in Section 5.2(d) of the Development Agreement with respect to the Middle Income Housing units], in each case as such obligation may be amended pursuant to a written amendment to the Development Agreement, following written notice from City to Guarantor, City may elect, at its sole discretion, to require Guarantor to: (A) complete construction of the [Workforce/Affordable Housing units and/or Middle Income Housing units], at Guarantors’ sole cost and expense; (B) fully pay and discharge all claims for labor performed and material and services furnished in connection with the construction of the [ Workforce/Affordable Housing units and/or Middle Income Housing units]; and (C) release and discharge all claims of stop notices, mechanic’s liens, materialman’s liens and equitable liens that may arise in connection with the construction of the [Workforce/Affordable Housing units and/or Middle Income Housing units].

4. Guarantor Default. City may declare Guarantor to be in default under this Guaranty upon the occurrence of any of the following events (each a “Guarantor Default”): (a) Guarantor fails to perform any of its obligations under this Guaranty; (b) Guarantor revokes or attempts to revoke this Guaranty or this Guaranty becomes ineffective for any reason; (c) any representation or warranty made or given by Guarantor to City proves to be false or misleading in any material respect; (d) Guarantor is or becomes bankrupt or insolvent, makes an assignment for the benefit of creditors, or commences or has commenced against it a proceeding under the Federal Bankruptcy Code or any other law or statute providing for the relief of debtors; or (e) Guarantor dissolves or liquidates.

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Packet Pg. 201 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3

5. Remedies. If Guarantor fails to promptly perform its obligations under Section 3 of this Guaranty or in the event of a Guarantor Default, in addition to any other remedies available to City, City will have the following remedies:
(a) City may bring any action at law or in equity, or both, to compel Guarantor to perform its obligations under this Guaranty and to collect compensation for all loss, cost, damage, injury and expense which may be sustained or incurred by City as a consequence of Guarantor’s failure to perform those obligations. City from time to time may bring such an action regardless of whether City has first required performance by Developer, or whether City has exhausted any or all security (if any). Nothing herein shall be construed to prohibit the City from pursuing any remedies under any other agreement, against any person other than the Guarantor. (b) The City, at City’s option, shall have the right to perform or cause to be performed any or all obligations required to be performed by Guarantor under this Guaranty, which City reasonably deems necessary, and expend such sums as City reasonably deems proper in order so to complete such obligation. Guarantor shall reimburse City immediately on demand for all costs and expenses, including any attorneys’ fees, which City may incur in performing those obligations, notwithstanding City’s pursuit of any other rights or remedies.

6. Rights of City. Guarantor authorizes City, without giving notice to Guarantor or obtaining Guarantor’s consent and without affecting the liability of Guarantor, from time to time in City’s sole discretion to do any one or more of the following: (a) approve modifications to the approved plans and building permits for the [Workforce/Affordable Housing units and/or Middle Income Housing units]; (b) change the terms of the Development Agreement or any part thereof (subject to the consent of the Developer); (c) renew, modify, compromise or extend all or any portion of Developer’s obligations under the Development Agreement; (d) take and hold security for the performance of Developer’s obligations under the Development Agreement and Guarantor’s obligations under this Guaranty, accept additional or substituted security for either, and exchange, enforce, waive, subordinate, compromise, fail to perfect, and release, sell or otherwise dispose of any such security in whole or part; (e) apply such security and direct the order and manner of sale thereof as City in its sole discretion may determine; (f) apply payments or recoveries received by City from Developer, Guarantor or any other source to any obligations of Developer to City, in such order, manner and priority as City shall determine in its sole discretion, whether or not any such obligations are covered by this Guaranty; (g) substitute, add or release any one or more guarantors; and (h) release Developer from all or any part of its obligations under the Development Agreement.

7. Guarantors’ Warranties. Guarantor warrants, represents, covenants and acknowledges to City that: (a) Guarantor acknowledges and agrees that City would not enter into the Assignment Agreement but for this Guaranty, and that this Guaranty and the agreements of Guarantor in this Guaranty is a material part of the consideration which City is receiving for entering into the Assignment Agreement; (b) Guarantor has reviewed and understands all of the terms and provisions of the Development Agreement; (c) there are no conditions precedent to the effectiveness of this Guaranty; (d) the Guarantor has established adequate means of obtaining from sources other than City, on a continuing basis, financial and other information pertaining to Developer’s financial condition, the [Workforce/Affordable Housing units and/or Middle Income Housing units], and Developer’s activities relating thereto and the status of Developer’s

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Packet Pg. 202 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3
performance of obligations under the Development Agreement; (d) the most recent financial statements of Guarantor and all other financial information relating to Guarantor heretofore or hereafter delivered to City are true and correct in all material respects, and the financial statements have been, and any hereafter delivered will be, prepared in accordance with generally accepted accounting principles consistently applied (“GAAP”) and fairly and accurately represent the financial condition of Guarantor as of the respective dates thereof, and no material adverse change has occurred in the financial condition of Guarantor since the respective dates thereof; and (e) Guarantor is not “insolvent” and will not be, as a consequence of the execution and delivery of this Guaranty, rendered “insolvent”, as that term is defined in Section 101 of the Federal Bankruptcy Code, or otherwise rendered unable to pay Guarantor’s debts as the same mature.

Guarantor acknowledges and agrees that City may request and obtain public or non-confidential information from third parties regarding any of the above, including, without limitation, credit reports.

8. Reserved.

9. Termination. This Guaranty shall terminate and be of no further force or effect upon the issuance of a certificate of occupancy for all of the [Workforce/Affordable Housing units and/or Middle Income Housing units].

10. Interest. Any sums required to be paid by the Guarantor to the City pursuant to the terms hereof that are not paid within thirty (30) days of the date due, shall bear interest at the prime rate announced by Wells Fargo plus three percent (3%), from the date said sums shall have become due until the date said sums are paid.

11. No Waiver, Extension or Modification. No failure on the part of the City to pursue any remedy hereunder shall constitute a waiver on its part of the right to pursue said remedy on the basis of the same or a subsequent breach. No extension, modification, amendment or renewal of the Development Agreement shall serve to waive the provisions hereof or discharge the Guarantor from any obligation herein contained, in whole or in part, except to the extent expressly approved by the City by written instrument signed by the City, specifying the nature and the extent of the intended waiver and discharge of the Guarantor.

12. Guaranty Independent; Waiver of Exoneration.
(a) Guarantor agrees that the obligations hereunder are independent of and in addition to the undertakings of the Developer pursuant to the Development Agreement, any other Guarantees given in connection with the Development Agreement, and other obligations of the Guarantor to the City.
(b) Guarantor agrees that the validity of this Guaranty shall continue and the obligations of Guarantor hereunder shall in no way be terminated, affected, diminished or impaired by reason of any bankruptcy, insolvency, reorganization, arrangement, assignment for the benefit of creditors, receivership or trusteeship affecting the Developer or its partners, parents, principals, or members whether or not notice is given to the Guarantor, or by any other circumstances or condition that may grant or result in a discharge, limitation or reduction of liability of the Developer or its partners, parents, principals, members or of a surety or a guarantor.

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Packet Pg. 203 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3
(c) Guarantor waives all rights and remedies accorded by applicable law to guarantors and agrees not to assert or take advantage of any such rights or remedies including but not limited to any right to require the City to, after expiration of applicable notice and cure periods to Developer, (1) proceed against the Developer, any partner or member of the Developer or any other person, (2) proceed against or exhaust any security held by the City, or (3) pursue any remedy in the power of the City whatsoever. If Guarantor is liable pursuant to this Guaranty, Guarantor waives any defense arising by reason of any disability or other defense of the Developer or any partner or member of the Developer, or any of their parents, principals, or affiliated entities or by reason of the cessation from any cause whatsoever of the liability of the Developer or any member or partner of the Developer, or any of their parents, principals, or affiliated entities other than the full discharge and performance of all of Developer’s obligations under the Development Agreement. Guarantor, except as expressly set forth herein, waives any defense it may acquire by reason of the City’s election of any remedy against it or the Developer, or both, even though the Guarantors’ right of subrogation may be impaired thereby or extinguished under the antideficiency statutes of the State of California. Without limiting the generality of the foregoing, Guarantor waives (a) any defense that may arise by reason of the lack of authority or of any other person or persons or the failure of City to file or enforce a claim against the estate (in administration, bankruptcy, or any other proceeding) of any other person or persons; (b) demand, protest and notice of any kind including but not limited to notice of any kind (except for the notice required in Sections 3 and 14 hereof or under the Development Agreement) including but not limited to notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or non-action on the part of Developer, City, any endorser or creditor of Developer or Guarantor or on the part of any other person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held by City as collateral or in connection with any obligations the performance of which are hereby Guaranty; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal. (d) Guarantor waives: (i) any duty on the part of City to disclose to Guarantor any facts City may now or hereafter know about Developer, regardless of whether City has reason to believe that any such facts materially increase the risk beyond that which Guarantor intended to assume or has reason to believe that such facts are unknown to Guarantor; (ii) any defense arising because of City’s election, in any proceeding instituted under the federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code; and (iii) any defense based on any borrowing or grant of a security interest under Section 364 of the Federal Bankruptcy Code.

Without limiting the generality of the foregoing or any other provision hereof, Guarantor hereby expressly waives any and all benefits which might otherwise be available to Guarantor under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580(a), 580(b), 580(d), and 726. (e) Until termination of this Guaranty (as set forth in Section 4), Guarantor shall have no right of subrogation, and waives any right to enforce any remedy that the City now has or may hereafter have against the Developer or any member of Developer, or any other person, and waives the benefit of, and any right to participate in, any security now or hereafter held by City from the Developer.

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Packet Pg. 204 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3

13. Transfer or Assignment. The obligations of Guarantor under this Guaranty may be assigned or transferred in whole or in party, to one or more successor developers of [Parcel 2 and/or Parcel 4], in each case in connection with the assignment and assumption of the rights and obligations of Master Developer under the Development Agreement with respect to [Parcel 2 and/or Parcel 4], pursuant to which Master Developer has assumed or has assigned to the successor guarantor and/or its affiliate, and successor guarantor and/or its affiliate has assumed from Master Developer, the rights and obligations under those portions of the Development Agreement and this Guaranty applicable to [Parcel 2 and/or Parcel 4, as applicable]. Any such transfer and assumption will release Guarantor from any liability to City pursuant to this Guaranty so assigned and assumed, provided that the designated replacement guarantor is the Master Developer or an affiliate thereof of meets the City’s standards applicable to a Partial Transferee pursuant to Section 9.1 of the Development Agreement, and such party has been approved by City in its discretion, as provided in and pursuant to Section 9.1 of the Development Agreement. Except as provided immediately above, the obligations of Guarantor under this Guaranty may not be assigned or transferred without, in each case, the express written approval of the City, which approval shall be within the sole and absolute discretion of the City.

14. Notices. City shall provide Guarantor with all written notices delivered to Developer pursuant to the Development Agreement at the same time such notice is delivered to Developer. Guarantor shall not be liable under this Guaranty unless and until it has received such notice. The Guarantor shall have the right to perform any and all of Developer’s obligations under the Development Agreement.

15. Enforceability. Guarantor hereby acknowledges that: (a) the obligations undertaken by Guarantor in this Guaranty are complex in nature, and (b) numerous possible defenses to the enforceability of these obligations may presently exist and/or may arise hereafter, and (c) as part of City’s consideration for entering into this transaction City has specifically bargained for the waiver and relinquishment by Guarantor of all such defenses, and (d) Guarantor has had the opportunity to seek and receive legal advice from skilled legal counsel in the area of financial transactions of the type contemplated herein. Given all of the above, Guarantor does hereby represent and confirm to City that Guarantor isfully informed regarding, and that Guarantor does thoroughly understand: (i) the nature of all such possible defenses, and (ii) the circumstances under which such defenses may arise, and (iii) the benefits which such defenses might confer upon Guarantor, and (iv) the legal consequences to Guarantor of waiving such defenses. Guarantor acknowledges that Guarantor makes this Guaranty with the intent that this Guaranty and all of the informed waivers herein shall each and all be fully enforceable by City, and that City is induced to enter into this transaction in material reliance upon the presumed full enforceability thereof.

16. Miscellaneous.
(a) This Guaranty shall inure to the benefit of City and its successors and assigns and shall bind the heirs, executors, administrators, personal representatives, successors and assigns of Guarantor.
(b) This Guaranty shall be governed by and shall be construed in accordance with the laws of the State of California.

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Packet Pg. 205 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3
(c) If any term, provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof and all applications thereof not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby.
(d) Guarantor assumes the responsibility for keeping informed of (1) the financial condition of Developer, (2) any change in the management or control of Developer, and (3) all other circumstances bearing upon the risk of nonperformance by Developer of its obligations under the Development Agreement.
(e) This Guaranty shall be construed and enforced in accordance with the laws of the State of California. Any action to enforce or interpret this Guaranty shall be filed and heard in the Superior Court of Sonoma County, California.
(f) Any notice or communication required hereunder between City or Guarantor must be in writing, and may be given either personally, by e-mail (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express or other similar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by email transmission, a notice or communication shall be deemed to have been given and received upon actual physical receipt of the entire document by the receiving party. Notices transmitted after 5:00 p.m. on a normal business day or on a Saturday, Sunday, or holiday shall be deemed to have been given and received on the next normal business day. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of: (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below:

If to City: City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Manager
With a Copy to: City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Attorney
If to Guarantor:

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Packet Pg. 206 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1278741v3
With a Copy to:
(g) In any legal action or other proceeding brought by either party to enforce or interpret a provision of this Guaranty, the prevailing party is entitled to reasonable attorneys’ fees and any other costs incurred in that proceeding in addition to any other relief to which it is entitled. [Signatures on following page]

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Packet Pg. 207 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) 11134.00028/1283218v1
IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the day and year first above written.

GUARANTOR:
________________________________
By: ___________________________
Name: ___________________________
Its: ___________________________

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Packet Pg. 208 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )

COUNTY OF )
On _________________________ before me
_________________________________________ (insert name and title of the officer) personally appeared
______________________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature ______________________________ (Seal)

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Packet Pg. 209 Attachment: 1. Ordinance (4022 : North Village DA 4th Amendment)

C H I Q U I T A R D
B

URGUNDY RD

C A N Y O N R U N

PO PPY HILL DR

R O S E
W
O O D
D
R
H
E
A
L
D
S
B
U
R
G
A
V

SPUR RIDGE LN

GROVE ST
R
A
I
L
R
O
A
D

P A S S A L A C Q U A R D

P A R K L A N D F A R M S B D

B R I D L E P A T H
101
101
101
Housing Housing Hotel Hotel
Mixed
Use/Residential
Mixed
Use/Residential
Senior
Living
Senior
Living
North Village - Mixed Use/Residential Vicinity Map Map Date: 5/18/2021

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Packet Pg. 210 Attachment: 2. Site Vicinity Map (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

REQUEST FOR PLANNING COMMISSION ACTION
PROJECT TITLE: North Village Project - Modifications to Sitewide and Parcel 4 Entitlements

SUBJECT: Development Agreement Amendment (DA 2020-01.04) Master Conditional Use Permit Amendment (CUP 2019-04.02) Parcel 4 Design Review Permit Amendment (DR 2021-07.01) Parcel 4 Conditional Use Permit Amendment (CUP 2021-04.01) Parcel 4 Tentative Map (TM 2022-07)
The applicants seek approval of five interrelated entitlements: (1) amendment to North Village Development Agreement to modify affordability levels for residential uses on Parcels 2 and 4; (2) amendment to sitewide Master Conditional Use Permit to modify shared parking plan; (3 and 4) amendments to Major Design Review and Conditional Use Permit for mixed-use
retail/residential development on Parcel 4 to modify facades, building massing, landscaping, and site amenities; and (5) approval of Tentative Map to establish a common parcel and three airspace parcels on Parcel 4, each in reliance on the certified NEAP EIR and with adoption of a CEQA exemption pursuant to Public Resources Code section 21083.3 and CEQA Guidelines section 15183.

PROPERTY ADDRESSES: Parcel 4: 1830 Boxheart Drive, 1840 Boxheart Drive, 70 Dovetail Lane, 80 Dovetail Lane
Parcel 2: 201 Dovetail Lane
Parcel 3 (Hotel): 101 Dovetail Lane
Parcel 1 (Enso Village): 1801 Boxheart Drive.

ASSESSOR PARCEL NOS.: Parcel 4: 091-060-039, 091-060-025 Parcel 2: 091-060-041
Parcel 3 (Hotel): 091-060-04
Parcel 1 (Enso Village): 091-060-037
GEN'L PLAN & ZONING: Mixed Use (MU)/ North Entry Area Plan Overlay (NEAP) Agenda Item #: 4.B.

Meeting Date: February 28, 2023
Prepared By: Linda Ruffing, Planning Consultant
Reviewed By: ________________________
Scott Duiven
Community Development Director

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Packet Pg. 211 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

APPLICANTS: Comstock Healdsburg, LLC (DA 2020-01.04; CUP 2019-04.02; TM 2022-07)
Burbank Housing Development Corporation (DR 2021-07.01; CUP 2021-04.01)
RECOMMENDED ACTIONS:

By four separate motions, it is recommended that the Planning Commission:
(1) Approve Resolution No. 2023-xx (Attachment 1) recommending that the Healdsburg City Council approve the proposed Fourth Amendment to the Development Agreement by and between the City of Healdsburg and CCS Healdsburg, LLC, for the North Village Project (DA 2020-01.04).
(2) Approve Resolution No. 2023-xx (Attachment 2) modifying the Master Conditional Use Permit for the North Village Project (CUP 2019-04.02) to conform housing affordability levels to the Fourth Amendment to the DA and to authorize modifications to the sitewide Shared Parking Plan.
(3) Approve Resolution No. 2023-xx (Attachment 3) amending Major Design Review Permit (DR 2021-07.01) and Major Conditional Use Permit (CUP 2021-04.01) for the North Village Mixed Use Project (Parcel 4), based on the suggested findings and subject to the recommended conditions of approval.
(4) Approve Resolution No. 2023-xx (Attachment 4) approving a Tentative Map (TM 2022-07) for Parcel 4 of the North Village Project based on suggested findings and subject to the recommended conditions of approval.

BACKGROUND:

Site Vicinity & Description. The 32-acre North Village Project site is located at the northern end of Healdsburg between US 101 and Healdsburg Avenue (Attachment 5, Site Vicinity Map). The site is bisected by an inactive rail corridor which runs parallel to Healdsburg Avenue upon which the SonomaMarin Area Rail Transit has plans for future passenger rail service. Access to the site is provided via a public, at-grade rail crossing and a private street (Boxheart Drive) with a secondary emergency vehicle access from Healdsburg Avenue located near the north property boundary.

North Entry Area Plan. The North Village Project site comprises the North Entry Area Plan ("NEAP") planning area. In May 2019, the Healdsburg City Council certified an Environmental Impact Report ("NEAP EIR") and adopted the NEAP and an ordinance amending the Healdsburg Municipal Code to establish implementing regulations for the NEAP. The NEAP establishes a vision concept, land use guidelines, development standards and design guidelines for a new mixed-use neighborhood on the 32- acre North Village site.

North Village Development Agreement. In April 2020, the City Council entered into a Development Agreement ("DA") for the North Village project (DA 2020-01). The DA allows for development of up to 301 residential units, approximately 12,000 square feet of commercial space, and a 108-key hotel with a restaurant, bar and other amenities. The DA required the developer to construct a minimum of 15 low7.A.c Packet Pg. 212 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

and very low-income units, 39 moderate-income units and 26 middle-income units, plus 20 senior living units affordable to households with very low-income and 10 units to households with moderate-incomes.

The DA was amended in June 2022 at the request of the Enso Village developer (Kendal at Sonoma, a Zen Inspired Community) to change the affordability levels for 10 of the 20 very low-income senior living units that are reserved for the "Zen Teachers" to 5 low-income and 5 moderate-income units with 10 remaining as very low-income units (DA 2020-01.01). Two other amendments to the DA have been approved. One amendment modifies Comstock and City obligations with regard to construction of a Fire Substation (DA 2020-01.02); the other modifies the timing for recordation of the affordable/workforce housing regulatory agreement and middle-income housing regulatory agreement (DA 2020-01.03). The DA and its three amendments are available for review on the City's website at:
https://www.ci.healdsburg.ca.us/842/North-Entry-Area-Plan.

Existing Entitlements. The following entitlements have been approved by the Planning Commission for development on the North Village project site:
 Master Conditional Use Permit (CUP 2020-04; February 2020) ("MCUP") established allowable uses and densities for each of the four parcels on the North Village site, defined required backbone infrastructure improvements to serve the development, and authorized a Shared Parking Plan which allocated 608 total on-site parking spaces to the various uses and allowed for elimination of up to 24 spaces to accommodate angled parking on Dovetail Lane.

CUP 2020-04 was amended by the Planning Commission in February 2022 to modify the affordability requirements for Enso Village (CUP 2020-04.01) to conform to DA 2020-01.01 as discussed above. This was accomplished by adding language stating "In the event that a modification to the Development Agreement is approved by the City Council that conflicts with the affordability mix shown below, the Development Agreement shall control."  Enso Village Design Review & Conditional Use Permit (DR 2020-09, CUP 2020-02; November 2020) authorized development of a senior living community on Parcel 1 with 221 senior independent living units, 54 assisted living/memory care beds, and associated amenities.

These permits were amended in February 2022 to authorize a net reduction of 13 on-site parking spaces at Enso Village and to authorize modifications to the floor plan and facades of the car barn (DR 2020-09.01, CUP 2020-02.01).
 North Village Hotel Design Review & Conditional Use Permit (DR 2021-06, CUP 2021-03; May 2021) authorized development of a 108-key hotel with fitness facility, spa, restaurant, rooftop bar and meeting spaces on Parcel 3.
 North Village Mixed Use Project Design Review & Conditional Use Permit (DR 2021-07, CUP 2021-04; May 2021) authorized development of a mixed-use project on Parcel 4 with 12,000 square feet of commercial/retail space, 45 multi-family units, and 5 live-work units. Of these units, 24 would be targeted to moderate-income households and 26 would be targeted to middle-income households.

Status of Development of the North Village Project. Much of the sitewide backbone infrastructure (i.e., streets, underground utilities, frontage improvements) has been installed. The traffic signal at the project entrance will be installed in the spring of 2023. The Enso Village senior living community is under construction and is expected to be completed and occupied in late 2023. Rough grading and

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backbone utilities have been completed on Parcel 3 (Hotel) and building permits for the hotel are under review. In addition to the interrelated entitlements addressed in this staff report, Comstock has submitted applications for Design Review and a Tentative Map for a 24-unit middle-income residential development on Parcel 2. Those applications are scheduled for preliminary review by the Planning Commission at a workshop in late March.

DESCRIPTION OF PROPOSED AMENDMENTS & TENTATIVE MAP
Applicants' Objectives
There are two applicants involved in this set of applications. The master developer for the North Village project, Comstock Healdsburg LLC ("Comstock"), submitted applications for a Development Agreement amendment ("4th DA Amendment"), a Master Conditional Use Permit amendment ("MCUP Amendment"), and the Parcel 4 Tentative Map. Burbank Housing Development Corporation ("Burbank") submitted the application for amendments to the Design Review and Conditional Use Permits for Parcel

4. Following approval of these entitlements, Burbank would assume title to the airspace parcel for the residential uses on Parcel 4 and operate the affordable housing project. Comstock would be responsible for leasing or selling the airspace parcels for the commercial/retail uses. Both parties would be involved in construction of the Mixed Use Project.

As explained in the Master Conditional Use Permit Project Narrative (Attachment 6), the MCUP Amendment would allow for the affordable/workforce housing to be developed on Parcel 4 instead of Parcel 2 and for the middle-income housing to be developed on Parcel 2 instead of Parcel 4. Comstock has proposed the MCUP Amendment and the 4th DA Amendment (which modifies the affordability levels for residential uses on Parcels 2 and 4) in order to enable Burbank to develop an affordable housing project on Parcel 4 that is appropriately scaled and financially feasible. The five live-work units that were approved on Parcel 4 would be eliminated in lieu of apartment units and the total number of units on Parcel 4 would be increased from 50 to 53 units. Modifications to the sitewide shared parking plan are also proposed. Attachment 7 presents Burbank's description of the requested Design Review and Conditional Use Permit amendments (DR/CUP Amendments) for Parcel 4. Comstock proposes to develop middle-income housing on Parcel 2 as a for-sale product consisting of 24 townhome units each having a two-car garage. Comstock's Design Review and Tentative Map applications for Parcel 2 are being processed separate from the amendments to the master entitlements (i.e., DA and MCUP) and the Parcel 4 entitlements.
4th Amendment to the Development Agreement
The proposed 4th DA Amendment (Attachment 8) would modify the affordability levels for the Affordable/Workforce Housing Units and the Middle Income Housing Units. Specific changes are shown below with strike-through text denoting words to be deleted and underlined text denoting words to be added.

5.1 Affordable/Workforce Housing Units.
(a) Developer shall cause construction of a minimum of thirty (30) fifty-three (53) units of Affordable/Workforce Housing within the Project, affordable to households with very low, low, and moderate incomes, as follows:

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Packet Pg. 214 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

(i) Six (6) Approximately ten (10) dwelling units are anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Very Low Income Households.
(ii) Nine (9) Approximately forty-two (42) dwelling units are anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Low and Moderate Income Households.
(iii) Fifteen (15) One (1) dwelling units, the manager's unit, will be a restricted unit, up to 120% of AMI. are anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Moderate Income Households. (b) Notwithstanding the foregoing, the final mix of Affordable/Workforce Housing units in any given affordability category may vary, but in no event shall less than three (3) units be occupied by Very Low Income Households, and no greater than thirteen (13) units be occupied by Moderate Income Households, nor shall more than fifteen (15) units be occupied by households between 80% and 120% of AMI.
(c) Developer shall provide approximately five (5) eighteen (18) one-bedroom dwelling units, nine (9) twenty-four (24) two-bedroom dwelling units, and sixteen (16) eleven (11) three-bedroom dwelling units within the Affordable/Workforce Housing. Notwithstanding the foregoing, Developer shall have the right to construct at least eight (8) three-bedroom dwelling units within the Affordable/Workforce Housing.
(d) Developer or developer's successor in interest with respect to the parcel or parcels on which the Affordable/Workforce Housing is to be located shall enter into an “Affordable Housing Agreement” with City setting forth its obligations to provide and maintain the Affordable/Workforce Housing units for a term of 55 years. The Affordable Housing Agreement shall be executed by Developer or developer's successor in interest with respect to the portion of the Property containing the Affordable/Workforce Housing units and be recorded against such portion of the Property containing the Affordable/Workforce Housing units prior to City issuance of a final certificate of occupancy for the hotel. The Affordable Housing Agreement shall be assignable to and assumable by the owner and operator of the Affordable/Workforce Housing units, and all portions of the Property except for the parcel containing the Affordable/Workforce Housing units shall be released from the City shall release the Affordable Housing Agreement from the Property except for the parcel containing the Affordable/Workforce Housing units upon the first to occur of (i) issuance of a final certificate of occupancy for the Affordable/Workforce Housing units or (ii) delivery to City of a issuance of a completion guaranty pursuant to Section 5.5(a) of this Agreement, whichever is earlier. After satisfaction of the earliest to occur of such conditions, and upon request of Developer or its successor, City will provide a release in recordable form from the obligations of the Affordable Housing Agreement with respect to those portions of the Property no longer subject to such obligations and authorize recordation thereof in the Official Records.

5.2 Middle Income Housing Units.
(a) Developer shall cause construction of a minimum of fifty (50) twenty-four (24) units of Middle Income Housing within the Project, which shall be made available at an affordable rent to households with moderate and middle incomes Middle Income Households, as follows:

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Packet Pg. 215 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

(i) Twenty-four (24) dwelling units shall be made available for occupancy at an affordable rent, adjusted for household size, to Moderate Middle Income Households. (i) Twenty one (21) dwelling units shall be made available for occupancy at an affordable rent, adjusted for household size, to Middle Income Households. (ii) Five (5) live-work units shall be made available for occupancy at an affordable rent, adjusted for household size, to Middle Income Households. (b) Developer shall provide fifteen (15) studio dwelling units, sixteen (16) one-bedroom dwelling units, fourteen (14) two-bedroom dwelling units, and five (5) live-work dwelling units of approximately 1,000 square feet per unit within the Middle Income Housing. (cb) The Middle Income Housing will require Growth Management Ordinance (“GMO”) Category C allocations. If the GMO is modified in the future to allow units sold at an affordable sales price to Middle Income Households to qualify for Category C allocations, Developer may, in its sole discretion, develop the Middle Income Housing for sale rather than for rent at an affordable sales price to Middle Income Households.
(c) Developer or its successor in interest shall enter into a “Middle Income Housing Agreement” with City setting forth its obligations to provide and maintain the Middle Income Housing units for a term of 55 years. The regulatory agreement shall meet any applicable requirements of the GMO Policies and Procedures as may be amended, or applicable new GMO policies and procedures that may be adopted, by the City Council specifically for Middle Income Housing units that do not otherwise conflict with the terms of this Agreement. The Middle Income Housing Agreement shall be executed by Developer or its successor in interest with respect to the portion of the Property containing the Middle Income Housing units and be recorded against such portion of the Property containing the Middle Income Housing units prior to City issuance of a final certificate of occupancy for the hotel. The Middle Income Housing Agreement shall be assignable to and assumable by the owner and operator of the Middle Income Housing units, and City shall release the Middle Income Housing Agreement from all portions of the Property except for the parcel containing the Middle Income Housing units shall be released from the Middle Income Housing Agreement upon the first to occur of (i) issuance of a final certificate of occupancy for the last Middle Income Housing units to be constructed or (ii) delivery to City of a completion issuance of a guaranty pursuant to Section 5.5(a) of this Agreement, whichever is earlier. After satisfaction of the earliest to occur of such conditions, upon request of Developer or its successor, City will provide a release in recordable form from the obligations of the Middle Income Housing Agreement with respect to those portions of the Property no longer subject to such obligations, and authorize recordation thereof in the Official Records.

In addition to the modifications noted above, the 4th DA Amendment includes the following minor changes:
 Recital E in the DA is modified to reflect the changes to the mix and affordability levels for the Affordable/Workforce and Middle Income housing.
 Section 5.4(c) is updated to clarify that the obligations of the Senior Living Community Affordable Housing Agreement have been assigned to Kendal at Sonoma as the owner and operator of the Senior Living Community.

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Packet Pg. 216 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

 Section 5.5(a) is modified to refer to the form of the completion guaranty attached to the 4th DA Amendment and to cross-reference other sections that reference the guaranty.

Master Conditional Use Permit Amendment
As explained in the Master Conditional Use Permit Project Narrative (Attachment 6), the MCUP Amendment would relocate the Affordable/Workforce housing to Parcel 4 and the Middle Income housing to Parcel 2. This would enable Burbank to develop an affordable housing project on Parcel 4 that is appropriately scaled/financially feasible. Burbank proposes to increase the total number of residential units on Parcel 4 from 50 to 53 units. The modifications include elimination of the 5 live-work units and changes to the affordability levels prescribed by the DA. Comstock proposes to develop the middleincome housing on Parcel 2 as a for-sale product. They are proposing 24 townhome units with individual two-car garages. This is 6 fewer units than the 30 units originally contemplated on Parcel 2. The proposed modifications to the housing mix on Parcels 2 and 4 result in a net loss of 3 units sitewide.

As shown below, the proposed MCUP Amendment would revise Condition #14 (including the North Village Use Table) to correspond to the changes in the unit mix and the changes to the affordability levels on Parcels 2 and 4. The table is also updated to reflect the proposed modifications to the Shared Parking Plan as proposed in the current applications. Subsections C and D of Condition #18 are modified to transfer the requirements for amenities to serve the Affordable/Workforce housing from Parcel 2 to Parcel

4. 14. The Project shall provide a mix of affordable housing in accordance with the Development Agreement, as shown on the North Village Use Table, below. In the event that a modification to the Development Agreement is approved by the City Council that conflicts with the affordability mix shown below, the Development Agreement shall control. On Parcel 2 4, the final mix of Affordable/Workforce Housing units in any given affordability category may vary, but in no event shall less than three (3) units be occupied by Very Low Income Households, nor shall more than fifteen (15) thirteen (13) units be occupied by households between 80% and 120% of AMI.

North Village Use Table
(See Conditions #10, #13, #14 and #16)
Parcel 1 Parcel 2 Parcel 3 Parcel 4
Use type Senior Living
Community
Multi-Family
Housing
Hotel Mixed Use
Residential
Allowable
uses
221 independent
living units and
ancillary facilities;
Total of 54 assisted
living and memory
care beds; ancillary
facilities
24 30 apartments 108 key hotel;
restaurant (60
seats indoor; 40
seats outdoor);
Rooftop bar (60
seats);
"Grange"
building;
Fitness
center/spa
53 45 apartments;
5 live-work units;
12,000 SFcommercial/retail

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Packet Pg. 217 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

18. In addition to any requirements elsewhere in these conditions, the following requirements shall apply to future design review submittals for development on the Project site:

A. The design for Parcel 4 shall include public restrooms within a commercial or mixeduse building to serve the users of community amenities within the "central focal point." B. For the mixed use buildings on Parcel 4 that front on the Street "A", the ground floor frontage along Street "A" shall be occupied solely by commercial uses in order to activate that frontage. Access doors that provide ground floor access to residential uses on upper floors shall be permitted.

Parcel 1 Parcel 2 Parcel 3 Parcel 4
Floor Area 388,000 SF -
senior independent
living units and
ancillary facilities;
54,000 SF -
assisted
living/memory care
and ancillary
facilities
45,000 SF 87,000 SF -
interior floor
area;
27,000 SF -
exterior covered
areas
55,000 SF -
apartments and
live-work units;
12,000 SF -
commercial/retail
Interior: 641,000
SF
Interior/Exterior:
668,000 SF
NonResidential
Floor Area
54,000 SF 87,000 SF 12,000 SF Total:
153,000 SF
Cap: 200,000 SF
Floor Area
Ratio

0.63 0.36 0.25 0.30 Average FAR:

0.46 Site
Coverage
147,000 SF 17,500 SF 54,200 SF 25,600 SF Total:
244,300 SF (.31)
Cap: 475,675 SF
(.60)
Affordable
Housing
30 units:
very low (10)
low (5)
moderate (15)
30 24 units:
very low (6)
low (9)
moderate (15)
middle (24)
N/A 50 53 units:
very low (10)
low and moderate
(42)
manager's unit:
moderate (1) (24)
middle (26)
Total:
110 107
affordable units
Housing
Unit Mix
(approx.)
1 BR (5)
2 BR (9),
3 BR (16)
to be determined
N/A Studio (15)
1 BR (1618)
2 BR (1424)
live-work 3 BR (5
11)
Shared
Parking
Plan
238 onsite
33 street/shared
271 TOTAL
39 48 onsite
16 10
street/shared
5558 TOTAL
124 106 onsite
4 street/shared
124110 TOTAL
64 85 onsite (apts)
69 49 shared
133 134 TOTAL 583 573 TOTAL

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Packet Pg. 218 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

C. The recreational amenities for Parcel 2 4 (which includes 30 53 units of affordable housing) shall, at a minimum, include a “tot lot” for use by the residents of that parcel.

Additional outdoor amenities may be required at the time of design review for Parcel 2

4. D. In connection with design review for open space and recreational amenities on Parcel 2 4, the Applicant shall provide additional details for review, as reasonably required by the City, including but not limited to:
 Proposed manufacturer and line, dimensions and components, age appropriateness (2-5, 5-12) for any play structure proposed for the development;  Proposed surfacing material for any play structure (engineered wood fiber, pouredin-place rubber, etc.); and  Other site amenities such as benches, picnic tables, grills, etc.

Amendments to Parcel 4 Conditional Use Permit and Design Review Permit Attachment 7 provides a detailed narrative that describes the modifications requested by Burbank to the Major Design Review permit (DR 2021-07/CUP 2021-04) for Parcel 4 as approved by the Planning Commission on May 21, 2021. Attachment 9 presents a Plan Set for the proposed Affordable/Workforce Housing project on Parcel 4 that identifies the proposed modifications to the approved project design. As explained in Attachment 7, modifications to the plans include the following:
 The third story on Building 14 has been elongated to accommodate one additional unit.  Usable, ground level common open space has been provided in-lieu of private open space (balconies).
 Juliet balconies have been incorporated to further articulate the second and third stories.  Metal railings have been modified from horizontal to vertical for safety reasons to prevent climbing.
 The colonnade has been refined on courtyard-facing elevations of Buildings 13 and 14.  Stone finish has been refined to further articulate elevations.  Horizontal wood paneling has been incorporated to screen ground floor private patios.  A community room with a kitchenette and space for activities and gatherings has been added.  A mail center and indoor bicycle storage are included.  Laundry hook-ups are provided in individual units.
 Outdoor amenities, including a tot lot, BBQ and gathering area with tables and benches for outdoor seating, and bike racks are provided.
 The following unit mix is proposed:

Unit Type No. of Units Unit Size
1 Bedroom 18 564-644 square feet

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Packet Pg. 219 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

2 Bedroom 24 751-896 square feet
3 Bedroom 11 902-905 square feet
Total 53 approx. 40,000 square feet
 85 dedicated parking spaces are provided for the 53 affordable/workforce units on Parcel 4 which exceeds State Density Bonus Law requirements of one space per one-bedroom unit and

1.5 spaces per two- and three-bedroom units. 49 shared parking spaces would be available for the commercial/retail uses.

Parcel 4 Tentative Map
The proposed Tentative Map for Parcel 4 is presented in Attachment 10. The Map establishes three airspace parcels and one common area parcel. Two of the parcels would be established for the ground floor of each building on Boxheart Drive where the retail uses will be located. The third parcel would encompass all of the apartments and ancillary residential uses in the three buildings. Sheet 2 of the Tentative Map includes a diagram showing which parts of the buildings comprise the retail and the residential parcels.

CONSISTENCY ANALYSIS - PLANNING POLICIES AND REGULATIONS A detailed analysis of the consistency of the proposed 4th DA Amendment, MCUP Amendment, Parcel 4 DR/CUP Amendments and Parcel 4 Tentative Map with applicable City policies and regulations is provided in the following attachments and summarized below:
 Attachment 11 - Healdsburg General Plan 2030 Consistency Analysis  Attachment 12 - North Entry Area Plan Consistency Analysis  Attachment 13 - Land Use Code Consistency Analysis
Healdsburg 2030 General Plan
The Healdsburg 2030 General Plan land use designation for the North Village site is Mixed Use ("MU").

This land use classification provides for a broad range of commercial and residential uses, including multi-family residential, hotels and retail uses. Attachment 11 presents a table that identifies relevant policies in the General Plan and evaluates the consistency of the proposed project (including the DA and MCUP amendments and the Parcel 4 entitlements) with the policies. As shown, the project and the proposed amendments are consistent with General Plan guiding principles and policies relating to housing, natural resources, safety and community design.

North Entry Area Plan (NEAP)
The Healdsburg 2030 General Plan identifies the northern entry to Healdsburg as an area warranting special study in recognition of its importance both as an attractive gateway into the City and an area of transition from the rural landscape of the Alexander Valley to the more urban core of downtown Healdsburg. In May 2019, the City Council adopted the NEAP to provide specific policies and regulations to guide development on a 32-acre parcel of land located on the west side of Healdsburg

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Avenue at the north entry to Healdsburg (i.e., the North Village project site). Attachment 12 presents a table that identifies relevant guiding principles and policies from the NEAP that relate to Land Use, Design, Circulation and Open Space, and Utilities. The table provides an evaluation of the project's consistency with these planning policies. As summarized in the table, the amended project is consistent with all of the applicable requirements of the NEAP.

Land Use Code
The Land Use Code contains regulations to implement the policies of the Healdsburg 2030 General Plan, including the NEAP. Applicable Land Use Code regulations for the project include provisions relating to permitted and conditionally permitted uses; specific development standards for lands within the Mixed Use District and within the NEAP Overlay; and general development standards for parking, landscaping, and refuse and recycling areas. Consistency of the project with Land Use Code requirements is addressed in Attachment 13, and the project, as amended, is consistent with applicable Land Use Code provisions.

DISCUSSION/ANALYSIS:

Modifications to Affordability Requirements (4th DA Amendment) The following tables summarizes the existing unit count and affordability mix for the North Village Project as established by the North Village DA and the modifications proposed in the 4th DA Amendment.

NORTH VILLAGE - APPROVED HOUSING AFFORDABILITY MIX
Affordability AMI Parcel 4 Parcel 2 Enso
Village
TOTAL
Very Low and Low 50 - 80% 15 15 30
Moderate 80 -120% 24 15 15 54
Middle 120 -160% 26 26
TOTAL UNITS 50 30 30 110
Note: Enso originally had 20 Very Low and 10 Moderate units. This was modified by the 1st DA Amendment to 10 Very Low, 5 Low and 15 Moderate units (June 2022)

NORTH VILLAGE - PROPOSED HOUSING AFFORDABILITY MIX
Affordability AMI Parcel 4 Parcel 2 Enso
Village
TOTAL
Very Low and Low 50 - 80% 40 15 55
Moderate 80 -120% 13 15 28
Middle 120 -160% 24 24
TOTAL UNITS 53 24 30 107

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Packet Pg. 221 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

The proposed 4th DA Amendment deepens the affordability levels for the North Village project by increasing the number of Low- and Very Low-Income units and decreasing the number of ModerateIncome Units. The number of Middle-Income units (i.e., the Category C units) is decreased from 26 to 24 and, overall, the sitewide number of units would decrease by 3 units.

At the February 28th Planning Commission hearing, representatives from Comstock and Burbank will be present to discuss why they are requesting the 4th DA Amendment and to respond to questions. As background, it is noted that in 2020, Comstock and Burbank teamed up to develop the Affordable/Workforce Housing on Parcel 2. Burbank applied for tax credit financing for a 36-unit affordable housing project on Parcel 2 and was unsuccessful. In 2021, Burbank applied for tax credit financing for a 53-unit affordable housing project on Parcel 4 with a mix that included moderate-income units. That application was also unsuccessful. Burbank and Comstock are now seeking to fund the project through the issuance of tax-exempt revenue bonds through the California Municipal Finance Authority (CFMA) Joint Powers Authority. They are seeking flexibility in the number of units in each affordability category in order so that the mix can be tailored to revenue requirements and market conditions.

The City of Healdsburg's draft Housing Element Update (6th Cycle) presents a strategy for addressing the City's Regional Housing Needs Allocation (RHNA) which incorporates assumed North Village Project development at the approved affordability levels. The strategy is presented in the following table:

As shown, the RHNA identifies the greatest unmet housing needs as in the Very Low, Low-, and Above Moderate-Income categories all of which would be addressed by proposed housing on Parcels 2 and 4 of the North Village Project and the modifications included in the 4th DA Amendment. The initial blend of housing for North Village, which skewed towards Moderate- and Middle-Income housing, was attractive to the City because housing at those affordability levels is more challenging to finance than Low- and Very-Low income housing. As it turns out, the financing challenges- which are exacerbated

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by rising interest rates, inflation and supply chain issues- are precisely what is driving the applicants' proposed modifications to the affordability levels prescribed in the DA.

Modifications to Shared Parking Plan (Master CUP Amendment) The applicants propose to modify the sitewide Shared Parking Plan for the North Village Project. This plan has been modified a number of times as site-specific entitlements have been granted. Currently, the Shared Parking Plan provides for a total of 583 parking spaces across the North Village site. Of these, 465 spaces are assigned to specific uses and the remaining 118 are shared parking spaces.

The proposed modifications to the Shared Parking Plan are shown in the following table:

NORTH VILLAGE - APPROVED SHARED PARKING
Enso Parcel 2 Hotel Parcel 4 TOTAL
On-Site/reserved 238 39 124 64 465
Shared 33 16 69 118
TOTAL SPACES 271 55 124 133 583

NORTH VILLAGE - PROPOSED SHARED PARKING
Enso Parcel 2 Hotel Parcel 4 TOTAL
On-Site/reserved 238 48 106 85 477
Shared 33 10 4 49 100
TOTAL SPACES 271 58 110 130 573
The modified Shared Parking Plan reflects a 10-space decrease in the overall number of parking spaces sitewide. The reduction in spaces is due to the following:
 Additional parking spaces have been added for people with disabilities. These are wider spaces and reduce the overall number of spaces.
 The solid waste storage area in the east parking lot and its access has resulted in the loss of spaces.

The modified Shared Parking Plan also reallocates spaces among the uses in order to increase the number of reserved parking spaces for residential uses on Parcel 4. Attachment 14 presents a diagram of the proposed Shared Parking Plan that illustrates the layout and modified assignment of parking spaces on the North Village Site.

Walker Consultants evaluated these changes in the context of the sitewide parking demands during peak periods (Attachment 15). The projected peak sitewide parking demand for the entire site during a typical peak parking condition is for 539 spaces. This need is below the 573 parking spaces available sitewide, with a surplus of 34 parking spaces remaining. Representatives from Walker Consultants will attend the Planning Commission's February 28, 2023 hearing to explain their analysis and respond to questions.

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Packet Pg. 223 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

Each of the uses at North Village has a Transportation Demand Management Plan ("TDM Plan") that identifies measures to reduce vehicle trips and parking demands. The TDM Plans for the Mixed Use Project and the Hotel, which were incorporated into the project approvals for both projects, are presented in Attachment 16 and Attachment 17. The demand reduction measures are presented in tables at the end of each document. These TDM Plans (and the Enso Village TDM Plan) identify transportation and mobility strategies that will provide residents, visitors and employees with access to multiple transportation options and viable alternatives to driving alone.

The TDM Plans for the North Village Hotel and the Enso Village senior living community include provision of a shuttle service to and from downtown Healdsburg that would be made available to residents, visitors and employees of the Mixed Use Project. The TDM Plan for Parcel 4 notes:
"The future management of the mixed-use development may also consider contributing funding to the operation of the shuttles and/or adding a third shuttle vehicle to increase frequency of operation and opportunities for everyone in the development. Frequent shuttle service and extended hours of operation throughout the day and the week, from morning to evening, provide a reliable and dependable service option that can significantly reduce the need of residents, visitors and employees to drive their own vehicle, as they will have an alternative means of getting around and access work, medical, social, grocery shopping and recreational opportunities in Downtown Healdsburg." In addition to the shuttles, direct access to Sonoma County Transit Route 60 service will be provided at bus stops located on either side of Healdsburg Avenue at the North Village project entry.

Conditions of the previously approved Design Review and Conditional Use Permits for the Hotel and for the Mixed Use Project require submittal of a parking signage plan for City review, implementation of the TDM Plan, and submittal of annual monitoring reports to provide a process whereby adaptive measures can be required if mobility and shared parking objectives are not met.

Changes to Parcel 4 Design Features (Design Review/CUP Amendments) The Planning Commission granted a Design Review Permit (DR 2021-07) and Conditional Use Permit (CUP 2021-04) for the Mixed Use Project in May 2021. Burbank has requested amendments to those permits to address proposed design modifications to the buildings, the facades, the landscape plan and site amenities. Sheet A0.10 of the Parcel 4 DR Plan Set (Attachment 9) provides a table that summarizes the proposed modifications.

As discussed above, the applicant proposes to eliminate the five live-work units and, instead of constructing 45 multi-family apartment units to construct 53 apartment units for a net gain of three units on Parcel 4. The retail square footage would be slightly reduced and the floor area of the residential uses would be slightly increased as would the site coverage. As explained in Attachment 12, NEAP Consistency Analysis, all of these changes are consistent with the NEAP. Proposed changes also include an increase in dedicated on-site parking for residents and a corresponding decrease in shared parking as discussed above.

As explained in the Parcel 4 DR-CUP Amendment Narrative (Attachment 7), the primary changes are the addition of a third story on the easterly portion of Building 14 (the easternmost building), elimination of most of the balconies on the second and third stories of all three buildings, and establishment of additional ground level common open space amenities.

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Packet Pg. 224 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

Starting on Sheet A3.11 of Attachment 9 (Plan Set), the applicant has provided comparisons of the approved and proposed facades. The modified buildings retain the fundamental design features of the approved project - the form is substantially the same and the materials continue to include standing seam metal roofs, vertical painted wood siding, horizontal painted wood siding, and natural stone. The most notable changes are to the fenestration (windows) and the elimination of the continuous balconies along the second and third stories.

As shown on Sheets A3.11 and A3.13, the street level facades of the two buildings on Boxheart Drive are fairly similar to what was approved, however, the decorative metal trellis with flowering evergreen clematis vines at the Boxheart Drive entry to the breezeway between the two mixed use buildings that connects to the Promenade is now eliminated. This feature was added in response to Planning Commission comments pertaining to connectivity during the initial Design Review and was intended to help accentuate the walkway and draw pedestrians to the Promenade. A condition is recommended to reinstate this feature.

Other substantive changes are shown on Sheet A3.15. The ground floor of Building 14, Elevation 1 - which fronts on the Promenade is revised to eliminate the storefront windows and doors, because these are now residential units rather than live-work units.

Building 14, Elevation 2, shows the third story that would be added on the northeast wing of the building.

The east elevation of Building 14 will be the most visible elevation from Healdsburg Avenue. The additional massing resulting from the third story is not significant. The stone base on the east and northeast elevations of this building has been substantially reduced.

Usable open space. HMC Section 20.08.175(B) requires a minimum of 200 square feet of usable open space per dwelling unit, unless the requirement is reduced or waived by the Planning Commission in consideration of open space or recreational facilities that are available within reasonable proximity. HMC Section 20.20.15 establishes that required open spaces may be either common or private open space and that each square foot of private open space shall be considered the equivalent of two square feet of common open space and may be so substituted.

Sheet A0.10 tallies up the proposed open space for residential uses on Parcel 4. As shown, a total of 17,885 square feet of open space would be provided which exceeds the amount required. Sheet A1.00 shows the primary Open Areas on the site and Sheet L1.10 shows the Preliminary Landscape Plan for the project. The Promenade now has intermittent container plantings/green screens in front of the doorways of the ground floor units in Building 14 to create a private zone in front of the doorways.

Benches, shade trees, water features, and paseo lighting are retained within the Promenade. A children's play area is tucked into the open space on the east side of Building 14. Sheet L2.00 shows representative images of the proposed play equipment. Picnic tables and BBQ facilities are located along the north side of the playground adjacent to the Community Room.

In addition to the onsite open space, the Perimeter Trail provides linear access through the open space along the north and west perimeters of the North Village project and the Foss Creek Pathway extension along the site's eastern boundary will provide bicycle and pedestrian access to downtown Healdsburg and beyond. Lastly, the site is across the street from a planned 36-acre community park on the east side of Healdsburg Avenue.

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Packet Pg. 225 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

Refuse storage area. Attachment 9, Sheet A3.17 includes plans for the trash enclosure that will be located in the parking lot on Parcel 4. The materials and design are simple, unobtrusive and consistent with the design of the Mixed Use Project, as amended.

Compliance with Water Efficient Landscape Ordinance. Land Use Code Section 20.16.105 establishes the City's water-efficient landscaping requirements. It is intended to implement a "whole systems approach to design, construction, installation and maintenance of the landscape resulting in water-conserving climate-appropriate landscapes." Compliance with this objective is especially important given the increasing frequency of drought-related water shortages in the region.

Sheet L1.10 presents updated Water Efficient Landscape Calculations for the amended Mixed Use Project. The calculations indicate that the entire landscape area (4,353 SF) is estimated to use 44,320 gallons of water per year. This is substantially less than the previously estimated 162,388 gallons per year and results primarily from the reduction of irrigated lawn area.

Parcel 4 Tentative Map (TM 2022-07)
The Tentative Map defines three airspace parcels and a common area parcel. The subdivision is necessary to facilitate the transfer of ownership of the residential development to Burbank. The Tentative Map will not require subdivision improvement plans because construction of such improvements is covered either by the MCUP improvements or the individual on-site building permits.

The Tentative Map has been reviewed by the City's Principal Engineer and was found to be compliant with all City requirements. Because this is a minor subdivision establishing five or fewer parcels, the Planning Commission has approval authority for the Tentative Map. The Final Map requires approval by the City Council.

It is noted that Comstock has submitted an application for a Lot Line Adjustment (LLA) to transfer the portion of Parcel 4 that lies between the NCRA railroad tracks and Healdsburg Avenue to Parcel 3 (the Hotel parcel). This is proposed as the Hotel owner will be the managing entity for implementation of the sitewide HOA. The LLA will not affect the parcelization of the three airspace parcels on the Tentative Map.

FINDINGS & RECOMMENDATION REGARDING 4TH DA AMENDMENT
Development Agreement Findings
A. The Development Agreement and its Fourth Amendment are consistent with the Healdsburg 2030 General Plan, the North Entry Area Plan, and the Land Use Code. The City Council made findings of consistency in its action to adopt Ordinance No. 1202, approving the Development Agreement, and the Fourth Amendment does not modify the Development Agreement in any way that would conflict with the goals and policies of the Healdsburg 2030 General Plan and the North Entry Area Plan, and requirements of the City's Land Use Code.

B. The Development Agreement and its Fourth Amendment will provide Healdsburg with tangible benefits including: 107 units of Affordable and Middle Income Housing; a $2,000,000 contribution for construction of a Fire Substation; contribution of $250,000 to the City for connectivity improvements; annual payments to the City of approximately $334,000 per year from the Senior

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Packet Pg. 226 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

Living Community for lost tax revenue and increased demands for services; remittance of a 1/2% Hotel Add-On Fee (beginning 10 years after issuance of a certificate of occupancy for the hotel); and other improvements.

C. Any environmental impacts related to the Development Agreement have been reviewed and considered in accordance with the provisions of the California Environmental Quality Act. On May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448. In accordance with the California Environment Quality Act (CEQA) Guidelines Section 15162, no further environmental review is required for the Fourth Amendment because (i) there are no changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, (ii) there are no changes with respect to the circumstances under which the project is taken which will require major revisions to the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, and (iii) there is no new information of substantial importance that was not known at the time the EIR was certified which shows (a) the project will have one or more significant effects not discussed in the EIR, (b) significant impacts/effects will be substantially more severe than shown in the EIR, (c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects/impacts, or (d) mitigation measures or alternatives which are considerably different from those analyzed in the EIR would substantially reduce one or more significant effects/impacts on the environment.

Staff Recommendation: Attachment 1 presents a draft Planning Commission resolution recommending that the City Council adopt an ordinance approving the 4th DA Amendment (DA 2020-01.04) based on the findings cited above.

FINDINGS & RECOMMENDATION REGARDING MASTER CUP AMENDMENT Master Conditional Use Permit Findings
A. The proposed location and operation of the conditional use is in accord with the Healdsburg General Plan, any applicable planned development, specific or area plan.

The North Village Project site is designated Mixed Use (MU) in the Healdsburg General Plan and assigned the NEAP Overlay by the Land Use Code. The use and density for development of each parcel on the North Village Site were established in Master Conditional Use Permit CUP 2019-04.

The proposed modifications to the number of multi-family apartments would be consistent with the intent of the MU land use designation and the NEAP Overlay district as detailed in Attachment 11 and Attachment 12. The proposed mix of uses and internal arrangement of uses would continue to be consistent with the vision for a mixed use neighborhood established in the NEAP.

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Packet Pg. 227 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

B. The proposed location and operation of the conditional use is consistent with the applicable development standards of the Land Use Code.

The location of the subject property is in MU district and the operation of the mix of uses permitted by CUP 2019-04, as modified by the proposed amendment, would continue to be consistent with the development standards established for the MU District in the Land Use Code. Attachment 13 presents a detailed consistency analysis for applicable Land Use Code provisions and the Project, as amended by CUP 2019-04.02 would remain consistent.

C. The proposed location of the conditional use and the conditions under which it would be operated and maintained will not be detrimental to public health and safety or materially injurious to uses, properties or improvements in the vicinity.

The location of the North Village Project site is in the MU District, surrounded by undeveloped land to the north, vacant land and the Simi Winery to the south, Healdsburg Avenue and the Montage Healdsburg development to the east, and the U.S. 101 corridor to the west. Prior project approvals determined that the Project will not result in or create a detrimental condition on the property, property vicinity or within the community. The proposed amendments would not alter that determination. The proposed amendment to the Shared Parking Plan was evaluated by Walker Consultants, the consultants who prepared the Shared Parking Study for the North Village Project, who determined that the reduction in the number of parking spaces would continue to meet the Project's peak parking demands.

Staff Recommendation: Attachment 2 presents a draft Planning Commission resolution for approval of the Master Conditional Use Permit Amendment (CUP 2019-04.02). The resolution includes the findings cited above, plus existing and proposed modified Conditions of Approval.

FINDINGS & RECOMMENDATION REGARDING DESIGN REVIEW/CUP AMENDMENT Design Review Permit Findings
Pursuant to Land Use Code section 20.28.125, the Planning Commission is required to make the following five findings in order to approve a Major Design Review Permit. Suggested language to support each finding is shown in italicized text below each finding:

A. The proposed development or use is consistent with all applicable policies and requirements of the General Plan and Land Use Code.

The proposed North Village Mixed Use project is a commercial use type that is permitted within the Mixed Use "MU" land use classification in the Healdsburg 2030 General Plan. Prior approvals of the Master Conditional Use Permit (CUP 2019-04) and the Development Agreement (DA 2020-01) for the North Village Project determined that the mix of uses and densities proposed for the North Village are consistent with the General Plan. The North Village Project advances General Plan policies encouraging development of a variety of housing types to address housing needs in the community, including affordable housing. The Project is also consistent with General Plan policies encouraging mixed use development. The Project is consistent with the vision, guiding principles, policies and guidelines of the North Entry Area Plan ("NEAP") which was adopted as an amendment to the Healdsburg 2030 General Plan. The Project complies with the requirements of the Mixed Use "MU"

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Packet Pg. 228 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

zoning classification and the North Entry Area Plan "NEAP" Overlay as established in the Land Use Code (Healdsburg Municipal Code, Title 20) as discussed in detail in the staff report and Attachment 11 and Attachment 12 for the February 28, 2023, Planning Commission hearing for DR 2021-07.01 and CUP 2021-04.01.

B. The proposed design of the development or use, and all appurtenant structures, is consistent with the policies set forth in the Citywide Design Guidelines, as may be amended from time to time.

Although the Citywide Design Guidelines are applicable to all projects subject to Major and Minor design review, they are only mandatory within “Character Area 1.” In areas subject to a specific Area Plan, such as the NEAP, the Area Plan provides design guidelines and standards, and the Citywide Design Guidelines are only used to provide additional information about topics not addressed within the Area Plan. The North Village site is located within the planning area for the NEAP, which establishes comprehensive design standards for development. Therefore, the project design was evaluated for consistency with the design guidelines established in the NEAP. See discussion below for Finding E.

C. The proposed development or use is consistent with the purposes of the zoning district in which it is located.

The North Village Project includes a mix of uses that was determined to be consistent with the special purposes of the MU District and the NEAP Overlay when the Planning Commission granted the Master Conditional Use Permit (CUP 2019-04) for the North Village Project on February 11, 2020.

The Mixed Use Project includes "residential uses as part of a mixed use development which is a use type that require a site-specific conditional use permit. The amendment to Major Conditional Use Permit (CUP 2021-04.01) has been considered in conjunction with the Major Design Review Permit Amendment (DR 2021-07.01). The proposed residential and retail uses are generally consistent with the zoning district, and as conditioned, the Project is consistent with the zoning district’s specific requirements.

D. The proposed development or use is consistent with all other conditions imposed by the Planning Commission or City Council with respect to any matter related to the purpose of design review.

The proposed North Village Mixed Use Project, as amended, is consistent with the NEAP, the Master Conditional Use Permit for the North Village Project, as amended, (CUP 2019-04.02), and the North Village Development Agreement, as amended (DA 2020-01.04). All applicable conditions associated with the Master Conditional Use Permit are incorporated into this approval. The Mixed Use Project is also required to comply with all applicable mitigations of the Final Environmental Impact Report for the North Entry Area Plan (NEAP FEIR) and the NEAP FEIR Addendum, as presented in the adopted Mitigation Monitoring and Reporting Program (NEAP MMRP).

E. For proposed developments or uses in the North Entry Area Plan Overlay, the design of the development or use, and all appurtenant structures, is consistent with the goals, policies, objectives and design guidelines set forth in the North Entry Area Plan, as adopted by the Healdsburg City Council on May 20, 2019, as may be amended from time to time.

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Packet Pg. 229 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

As detailed in the staff report and Attachment 12 for Design Review Amendment DR 2021-07.01 (NEAP Consistency Analysis), the amended Mixed Use Project is consistent with the Guiding Principles, Land Use & Development Standards, and Design Guidelines established in the NEAP.

Conditional Use Permit Findings
Pursuant to Land Use Code Section 20.28.165, the Planning Commission is required to make the following findings in order to approve a conditional use permit. Suggested language to support each finding is shown in italicized text below each finding:

A. The proposed location and operation of the conditional use is in accord with the Healdsburg general plan and any applicable planned development, specific or area plan.

The entire North Village Project site is designated Mixed Use (MU) in the Healdsburg General Plan and is subject to the policies and guidelines of the North Entry Area Plan (NEAP). As detailed in the staff report for Design Review Amendment DR 2021-07.01 and Attachment 11 (Healdsburg 2030 General Plan Consistency Analysis) and Attachment 12 (NEAP Consistency Analysis), the amended North Village Mixed Use Project is consistent with the Healdsburg 2030 General Plan and the NEAP.

B. The proposed location and operation of the conditional use is consistent with the applicable development standards of this Land Use Code.

The residential uses in the North Village Mixed Use Project include multi-family residences which require a site-specific conditional use permit. Both the use type and the project location are consistent with the Mixed Use (MU) District and the North Entry Area Plan (NEAP) Overlay as established in the Land Use Code. As detailed in the staff report Design Review Amendment DR 2021-07.01 and Attachment 13 (Land Use Code Consistency Analysis), the amended Mixed Use Project complies with the applicable development standards of the Land Use Code.

C. The proposed location of the conditional use and the conditions under which it would be operated and maintained will not be detrimental to public health and safety or materially injurious to uses, properties or improvements in the vicinity.

The location of the North Village Mixed Use Project site is in a Mixed Use (MU) District, surrounded by lands within the North Village Project site to the north, west and south and the NCRA railroad right-of-way, Healdsburg Avenue and the Montage Healdsburg development to the east. The NEAP EIR determined that the North Village Project as a whole would not significantly impact properties or improvements in the immediate vicinity of the site. The NEAP Final EIR and the NEAP MMRP include mitigation measures to ensure that construction-related activities do not result in impacts to nearby properties and/or uses. Based on the analysis in the NEAP EIR and its required mitigation measures, the proposed North Village Mixed Use Project will not result in or create a detrimental condition on the property, property vicinity or within the community.

Staff Recommendation: Attachment 3 presents a draft Planning Commission resolution for approval of the Design Review and Conditional Use Permit Amendments (DR 2021-07.01/CUP 2021-04.01). The resolution includes the findings cited above, plus existing and proposed new Conditions of Approval.

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Packet Pg. 230 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

FINDINGS & RECOMMENDATION REGARDING TENTATIVE MAP
Tentative Map Findings
Per HMC Section 17.04.100(B), the following six findings must be made prior to approval of a Tentative Map. The italicized text provides evidence of the consistency of the proposed Tentative Map with each finding.

A. The proposed map and its design and improvements are consistent with the general plan and any applicable specific plan.

The proposed Tentative Map (TM 2022-07) establishes three airspace parcels that are consistent with the intent of the Mixed Use land use classification in the General Plan and the North Entry Area Plan.

The parcels will allow for the separate ownership of retail and residential components in the Mixed Use Project. Attachment 11 and Attachment 12 provide a detailed analysis of the Project's consistency with the Healdsburg 2030 General Plan and the North Entry Area Plan, respectively.

B. The site is physically suitable for the type and proposed density of development.

The Project site is generally level and is accessed by Boxheart Drive and Dovetail Lane. It is designated for Mixed Use development and the proposed project is consistent with the General Plan, the North Entry Area Plan and prior entitlements for the North Village Project.

C. The design of the subdivision and the proposed improvements are not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat.

The proposed Project would have no impact on fish or wildlife or their habitat. The project will be required to comply with all relevant mitigation measures of the Mitigation Monitoring and Reporting Program for the North Entry Area Plan EIR.

D. The design of the subdivision and the type of improvements are not likely to cause serious public health problems.

The North Entry Area Plan EIR and the EIR Addendum evaluate potential impacts to public health including air quality impacts, noise impacts, hazards and hazardous materials, and wildfire. These analyses concluded that the North Village Project will not result in public health hazards.

E. The design of the subdivision and the type of improvements will not conflict with easements, acquired by the public at large, for access through or use of property within the proposed subdivision.

There are no easements for public access through or use of the project site. The North Entry Area Plan and its associated entitlements identifies a perimeter trail corridor for future public access that traverses the property. The design of the Tentative Map and associated site improvements will not conflict with the future trail corridors.

F. Unless otherwise provided by the Subdivision Map Act, the design of the subdivision provides, to the extent feasible, for future passive or natural heating or cooling opportunities in the subdivision.

The design of the subdivision provides for solar access and allows for passive or natural heating and cooling opportunities.

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Packet Pg. 231 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

Staff Recommendation: Attachment 4 presents a draft Planning Commission resolution for approval of the Tentative Subdivision Map (TM 2022-02). The resolution includes the findings cited above, plus suggested Conditions of Approval that must be satisfied prior to approval and recordation of the Final Map.

ALTERNATIVES:

The Planning Commission may consider the following alternative actions to any of the above recommendations:

Alternative 1 – Approve Resolution with modifications based on changes identified at the Planning Commission hearing.

Alternative 2 – Continue action on the applications in order for the applicant to address Planning Commission concerns and require that matter be brought back to the Planning Commission for future action. This would likely require noticing of a future public hearing.

Alternative 3 – Continue action on the applications and provide direction to staff to prepare a resolution for denial based on inconsistencies with applicable City regulations or policies. This would require noticing of a future public hearing.

ENVIRONMENTAL ANALYSIS:

During the NEAP planning process, an Environmental Impact Report ("NEAP EIR") was prepared to analyze the potential project and cumulative environmental impacts associated with future development under the NEAP (State Clearinghouse No. 2018062041). The NEAP EIR found that, with the implementation of mitigation measures identified in the EIR, all significant impacts could be reduced to a less than significant level except for the traffic impacts and safety hazards at the U.S. 101/Dry Creek Road intersection and the Dry Creek Road/Grove Street intersection. These impacts were identified as significant unavoidable adverse impacts and pursuant to CEQA Guidelines section 15083, a Statement of Overriding Considerations was adopted as part of the City Council resolution certifying the NEAP EIR. On May 20, 2019, the City Council certified the NEAP EIR and adopted a Mitigation Monitoring and Reporting Program ("NEAP MMRP") to ensure that mitigation measures identified in the EIR are implemented.

Review of the MCUP application for the North Village project involved preparation of an Environmental Checklist in order to determine whether and to what extent the NEAP EIR remained sufficient to address the potential impacts of the project. The analysis included updated traffic modeling and greenhouse gas emissions analysis to account for the specific uses proposed. An Addendum to the NEAP EIR was prepared, pursuant to Public Resources Code section 21166 and CEQA Guidelines section 15164, to document the City’s review of the North Village project. As explained in the Addendum, the City determined that the North Village Project did not warrant preparation of a new subsequent or supplemental EIR as it involved no new significant environmental effects and would not result in a substantial increase in the severity of previously identified significant effects.

For the 4th DA Amendment, Master CUP Amendment, Parcel 4 Design Review/Conditional Use Permit Amendments and the Parcel 4 Tentative Map, all of which are components of the North Village Project,

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Packet Pg. 232 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

the City has identified the following applicable CEQA streamlining and/or tiering code sections, each of which, separately and independently, provides a basis for the project’s CEQA compliance:

A. A Community Plan Exemption, pursuant to Public Resources Code section 21083.3 and CEQA Guidelines section 15183;
B. Reliance on the NEAP EIR as a Program EIR, pursuant to CEQA Guidelines section 15168.

Based on an examination of the analysis, findings, and conclusions of the NEAP EIR and Addendum, the potential impacts of the proposed North Village Project remain within the impacts previously analyzed and disclosed in the NEAP EIR and its Addendum. Moreover, none of the circumstances described in CEQA Guidelines section 15162 that require subsequent or supplemental environmental review have occurred. Therefore, per CEQA Guidelines sections 15162, 15164, and 15183 no further analysis is required under CEQA before taking action on the 4th DA Amendment, Master CUP Amendment, Parcel Design Review/Conditional Use Permit Amendment and Parcel 4 Tentative Map for the North Village Project.

FISCAL INFORMATION:

The North Village Project is a privately funded development. The project will generate property and sales tax revenues which will help to offset the City's costs of providing services to the project.

ATTACHMENTS:

1. PC Reso 2023-xx, 4th DA Amendment (DA 2020-01.04)

2. PC Reso 2023-xx, MCUP Amendment (CUP 2019-04.02)

3. PC Reso 2023-xx, Parcel 4 DR/CUP Amendment (DR 2021-07.01/CUP 2021-04.01)

4. PC Reso 2023-xx, Parcel 4 Tentative Map (TM 2022-07)

5. Site Vicinity Map

6. MCUP Amendment Narrative

7. Parcel 4 DR/CUP Amendment Narrative

8. North Village - 4th DA Amendment

9. Parcel 4 DR Amendment Plan Set (12-22-22)

10. Parcel 4 Tentative Map

11. Healdsburg General Plan 2030 Consistency Analysis

12. North Entry Area Plan Consistency Analysis

13. Land Use Code Consistency Analysis

14. Shared Parking Diagram (01-12-23)

15. Walker Consultants Shared Parking Memo (01-12-23)

16. North Village Mixed Use TDM Plan (12-23-20)

17. North Village Hotel TDM Plan (12-23-20)
In addition to the Attachments attached to this report, additional background documentation for the North Village project includes the following documents which are available on the City's website at:
https://www.ci.healdsburg.ca.us/842/North-Entry-Area-Plan:
 North Entry Area Plan Draft EIR & Appendices (11/30/18)

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Packet Pg. 233 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment) Planning Commission Hearing - February 28, 2023 - North Village Project DA 2020-01.04, CUP 2019-04.02, DR 2021-07.01, CUP 2021-04.01, TM 2022-07

 North Entry Area Plan Final EIR & Appendix A (04/09/19)  North Entry Area Plan Mitigation Monitoring & Reporting Program (02/11/20)  North Entry Area Plan Addendum (02/04/20)
 North Village Development Agreement
 1st Amendment to the Development Agreement
 2nd Amendment to the Development Agreement
 3rd Amendment to the Development Agreement
The following technical documents relating to the North Village project are available for review at the City of Healdsburg Community Development Center, 401 Grove Street, Healdsburg, CA during normal business hours:
 Vegetation Management Plan (April 5, 2021)
 Geotechnical Report (May 2020)
 Master Hydrology Report (April 2020)
 Fire Flow Analysis Reports (September 2019, April 2020)  Parcel 4 Stormwater Low Impact Development Report (December 14, 2022)  Preliminary Title Report (December 12, 2022)
 Reciprocal Easement Agreement (August 20, 2020)

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Packet Pg. 234 Attachment: 3. PC Staff Report (4022 : North Village DA 4th Amendment)

MINUTES - DRAFT
Healdsburg Planning Commission
February 28, 2023 6:00 PM
401 Grove Street, Healdsburg
City Hall - City Council Chamber

1. ROLL CALL
Chair Luks called to order the meeting of the Planning Commission of the City of Healdsburg at 6:00 p.m.

Commissioners present: Barber, Breznikar, Luks, McKay, Wood Commissioners present via Zoom: Gerlach, Hunt
City Staff present: Community Development Director Scott Duiven, Planning Consultant Linda Ruffing, and Administrative Technician Amanda Gray

2. ADMINISTRATIVE ACTIONS
A. Approval of March 14, 2023 Agenda
On a motion by Commissioner Breznikar, seconded by Commissioner Barber, the Commission voted 7-0-0 to approve the February 28, 2023 agenda as amended to hear Agenda Item 5A – Election of Officer, prior to Agenda Item 4A.

B. Approval of Minutes
• February 28, 2023 Regular Meeting Minutes
On a motion by Commissioner Barber, seconded by Commissioner Wood, the Commission voted 7-0-0 to approve the February 14, 2023 regular meeting minutes.

C. Acceptance of Communications and Correspondence
Agenda Item No. 4B:
• Kathryn Goldman Schuyler
• Lynne Murphy
• Margaret Kaplan • David Lawrence
D. Declarations of Conflicts of Interest
Commission Hunt declared a conflict with Agenda Item 4A, Saggio Hills.

E. Disclosures of Ex Parte Communications
None.

3. PUBLIC COMMENTS
Adina Flores, spoke regarding Mayor Ariel Kelley, and shared her concerns with her seat on the Healdsburg City Council and her desire to have her removed from office.

Shelby Pryor, spoke regarding Mayor Ariel Kelley and shared his concerns with her seat on the Healdsburg City Council and her conflicts of interests.

5. NEW BUSINESS
A. Election of Officer
On a nomination by Commissioner McKay, seconded by Commissioner Barber, the Commission voted 7-0-0 to appoint Vesna Breznikar to the position of Vice Chair.

4. PUBLIC HEARINGS
Commissioner Hunt left the meeting prior to Agenda Item 4A.

A. Item
Description: Development Agreement (DA 2023-01)
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Project
Description: Development Agreement between City of Healdsburg and Freebird Development Company, LLC to vest the existing project approvals for a 118-unit affordable housing project for up to ten (10) years. Planning Commission will consider making a recommendation to City Council on Development Agreement.

Location: 450 Parkland Farms Boulevard (Parcels 5 and 6 of the Saggio Hills project) Applicant: Freebird Development Company, LLC
Environmental
Determination: An affordable housing project of up to 150 units on the project site was addressed at a programmatic level in the certified Final Environmental Impact Report ("FEIR") for the Saggio Hills Development Project (SCH #2003062025). An Addendum to the FEIR ("Addendum") was prepared for the Saggio Hills Affordable Housing Project. The FEIR and Addendum are available for review at the City of Healdsburg Community Development Center, 401 Grove Street, Healdsburg, CA.

Planning Consultant, Linda Ruffing, introduced the item and summarized the staff report. Ms.

Ruffing provided a project overview and discussed the site plan, Tentative Subdivision Map, Development Agreement, environmental review, and the recommended action.

Commission and staff discussion ensued regarding questions on the number, shape, color schemes and height of buildings, parking, timeline for decision on whether there will be lower income rental units versus moderate income home ownership units, Development Agreement and the Disposition and Development Agreement, transfer of land, and open space/trail network maintenance and responsibility.

Chair Luks opened the hearing for public input. There being no speakers, Chair Luks closed the public input portion of the meeting.

Chair Luks discussed the Development Agreement and a provision that is included that grants the developer the exclusive right to change the phasing on the project development. He said that he feels the City should have a say in any changes and is the appropriate entity to decide which of the phases go forward. He requested that Section 4.8 of the Development Agreement (Timing of Development) be eliminated.

Vice Chair Breznikar spoke in support of the project.

On a motion by Commissioner McKay, seconded by Vice Chair Breznikar, the Commission voted 6-0-1-0 (Hunt abstained) to adopt Resolution No. 2023-03 recommending that the Healdsburg City Council approve the proposed Development Agreement by and between the City of Healdsburg and Freebird Development Company, LLC (DA 2023-01) with the elimination of Section 4.8 – Timing of Development.

B. Item
Description: DA 2020-01.04 (North Village Development Agreement amendment); CUP 2019-04.02 (North Village Master Conditional Use Permit amendment); DR 2021-07.01, CUP 2021-04.01 (Parcel 4 Design Review and Conditional Use Permit amendments); TM 2022-07 (Parcel 4 Tentative Map)

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Project
Description: The project applicants are seeking approval of (a) amendments to the North Village Development Agreement and Master Conditional Use Permit to modify the affordability levels for residential uses on Parcels 2 and 4, and to modify the shared parking plan, (b) amendments to the Major Design Review and Conditional Use Permit for the mixed-use retail and residential development on Parcel 4 to address changes to the facades, building footprints, and landscaping, and (c) tentative map to establish a common parcel and three airspace parcels on Parcel 4.

Location: Parcel 2: 201 Dovetail Lane
Parcel 4: 1830 Boxheart Drive; 1840 Boxheart Drive; 70 Dovetail Lane; 80 Dovetail Lane
Hotel: 101 Dovetail Lane
Enso Village: 1801 Boxheart Drive
Applicant: Comstock Healdsburg, LLC (DA 2022-01.04; CUP 2019-04.02; TM 2022-07) Burbank Housing Development Corporation (DR 2021-07.01; CUP 2021-

04.01)
Environmental
Determination: On May 20, 2019, the Healdsburg City Council certified the Final Environmental Impact Report (FEIR) for the North Entry Area Plan (SCH# 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations. An Environmental Checklist & Addendum to the FEIR were prepared for the Master Conditional Use Permit for the North Village Project (MCUP 2019- 04) that was approved by the Planning Commission on February 11, 2020; and the Development Agreement for the North Village Project (DA 2020-01) that was adopted by the City Council on April 6, 2020. In accordance with the California Environmental Quality Act (CEQA) Guidelines Section 15183 (Projects Consistent with a Community Plan, General Plan, or Zoning), no further environmental review is required because the project components under consideration would not result in on-site, off-site or cumulatively significant effects on the environment that were not examined in the FEIR.

Planning Consultant, Linda Ruffing, introduced the item and summarized the staff report. Ms.

Ruffing provided a project overview and discussed the background, purpose of proposed amendments, affordability mix, sitewide affordable housing mix, proposed changes to unit mix, shared parking plan, sitewide parking demand, mobility services and TDM Plan, Parcel 4 design modifications, mixed use project rendering, Parcel 4 exterior modifications, modifications to building footprint, proposed landscaping plan, plant palette and furnishings, play equipment/materials, Tentative Map and findings, Development Agreement findings, Conditional Use Permit findings, Major Design Review findings, environmental review and the recommended actions.

Debra Geiler, Vice President of Entitlement and Forward Planning at Comstock Development Company, introduced the team of individuals that are present to answer any questions. Ms.

Geiler spoke regarding North Village Master Conditional Use Permit, Development Agreement and Amendments, project unit mix, and bond financing.

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Karen Massey, Senior Project Manager at Burbank Housing, provided a presentation and discussed project objectives, approved versus refined project, design refinements, refined elevations, refined site plan, parking, preliminary income and rent levels, and next steps/timeline.

Commissioner, staff and applicant discussion ensued regarding questions on the Foss Creek Pathway Plan and connectivity, North Entry Avenue Plan, entry feature, elevation of Building 14, façade, architecture, screening of tenants, Area Median Income, bond measure, commercial space retainment, Development Agreement, town homes being rented and sold, design of the promenade, lot split process, HOA management, privacy screening at the playground, trees and shading, terms under the Reciprocal Easement Agreement, missing middle housing, number of affordable housing units included, financing through the 501c3 and Parcel 2 net buildable area opportunities.

Chair Luks opened the hearing for public input.

Kathryn Goldman Schuyler, Palo Alto Ave., San Francisco, spoke as a future North Village Enso Village resident, and said she supports the presence of affordable housing that integrates lower income residents within a village with a sense of community but said she does not believe the currently proposed amendments do this and she explained why. She said she does not support the suggested amendments as they have been presented.

Tegan Wilson, 1205 Grove St., said she is a resident of Healdsburg Glen, an affordable housing/subsidized housing complex, and spoke in support of the project. She shared her experience living in the Healdsburg Glen complex and said that is has afforded her and other residents the opportunity to live and work in Healdsburg and she discussed the importance of that.

Dora Ortega, Healdsburg Glen Apartments, spoke on behalf of her community, and asked the Commission to consider and take into account the people that work at the hotels, restaurants and fields stating that these are low-income individuals, and it is not the same as middle income individuals and she explained why. She said that it is these people that help keep tourism high in Healdsburg and attract more visitors by their devoted and hard work at their places of business.

Calum Weeks, Policy Director for Generation Housing, thanked the Commission for their interest and advocacy for affordable housing and discussed the importance of this. He expressed his appreciation to the two prior speakers and said they touched on many important issues that he would encourage the Commission to amplify and take into consideration. He expressed his excitement for the Metropolitan Transportation Mission funding that was granted and discussed the different elements that help create a community and feels that this project design does that.

Cristal Lopez, Community Advocacy Coordinator for Corazon Healdsburg, thanked the City for providing interpretation services at this meeting, and said Corazon Healdsburg is in full support of this project. She discussed her concerns with parking, public transportation, the City not being walkable/ bikeable, housing prices and the AMI. She also said she is very happy that laundry hookups will be provided in each of the units.

Nick, Parkland Farms resident, spoke in favor of the project and said he hoped the Commission would approve it as presented. He provided a brief background on his family and shared his concerns with people being able to afford to live in Healdsburg, especially those

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who work here.

There being no further speakers, Chair Luks closed the public input portion of the hearing.

Commissioner Barber discussed the occupancy permit for the hotel and shared positive feedback on the ample bike storage, laundry hookups and the outdoor features that will be available.

Commissioner Wood spoke in support of the project and discussed the exterior façade changes.

Commissioner Hunt spoke in support of the project and recognized the challenges the applicants have had to address and how much work has gone into finding a solution. She discussed the waitlist for affordable housing units and the high demand and overwhelming need in Healdsburg. She also discussed the parking analysis, design, landscaping, and home ownership opportunities.

Commissioner McKay spoke in support of the project and discussed financing related to the preliminary income and rent levels spreadsheet presented and encouraged some type of additional articulation on Building 14, Elevation 2.

Commissioner Gerlach spoke in support of the project, and said he appreciated the work the applicants did to be aggressive in the bond market and discussed the significance of continuing to recognize the importance of public space and parking.

Vice Chair Breznikar spoke in support of the project and said that the applicants have been very thoughtful about the community that is going to live there. She shared positive feedback on laundry hook ups, bicycle storage, the promenade and praised the applicants for designing the extra parcels to be for sale units for middle income.

Chair Luks discussed the missing middle and said he is disappointed that this project is not going to make much of a dent in that. He said he is sensitive to the notion that this project is skewed towards the higher end of affordability and discussed the amount of affordable housing that will become available in Healdsburg through various project approvals. He also discussed home ownership verses rentals, Building 14 design and façade, and his concerns with parking.

Planning Consultant Ruffing said that the Resolution amending Major Design Review Permit (DR 2021-07.01) and Major Conditional Use Permit (CUP 2021-04.01) for the North Village Mixed Use Project (Parcel 4) could be amended to include language that says “with clarification that the permits will not become effective until the City Council adopts the Fourth Amendment to the Development Agreement.”
On a motion by Commissioner McKay, seconded by Vice Chair Breznikar, the Commission voted 7-0-0 to approve Resolution No. 2023-04 recommending that the Healdsburg City Council approve the proposed Fourth Amendment to the Development Agreement by and between the City of Healdsburg and CCS Healdsburg, LLC, for the North Village Project (DA 2020-01.04).

On a motion by Commissioner Wood, seconded by Vice Chair Breznikar, the Commission voted 7-0-0 to adopt Resolution No. 2023-05 modifying the Master Conditional Use Permit for the North Village Project (CUP 2019-04.02) to conform housing affordability levels to the

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Fourth Amendment to the DA and to authorize modifications to the sitewide Shared Parking Plan.

On a motion by Commissioner Breznikar, seconded by Commissioner Wood, the Commission voted 7-0-0 to adopt Resolution No. 2023-06 amending Major Design Review Permit (DR 2021-07.01) and Major Conditional Use Permit (CUP 2021-04.01) for the North Village Mixed Use Project (Parcel 4), based on the suggested findings and subject to the recommended conditions of approval, with clarification that the permits will not become effective until the City Council adopts the Fourth Amendment to the Development Agreement.

On a motion by Vice Chair Breznikar, seconded by Commissioner Barber, the Commission voted 7-0-0 to adopt Resolution No. 2023-07 approving a Tentative Map (TM 2022-07) for Parcel 4 of the North Village Project based on suggested findings and subject to the recommended conditions of approval.

The Commission took a recess at 9:29 p.m.

The Commission reconvened at 9:36 p.m.

C. Item
Description: Land Use Code Amendment 2023-01
Project
Description: Amendments to the Healdsburg Municipal Code including repealing Healdsburg Municipal Code Chapter 8.32: Medical Marijuana Dispensaries; amending Section 20.08.145: Permitted and Conditionally Permitted Uses in the Plaza Retail (PR), Downtown Commercial (CD), and Service Commercial (CS) Districts; amending Section 20.08.155: Permitted and Conditionally Permitted Uses in the Mixed Use (MU) District; amending Section 20.08.195: Permitted and Conditionally Permitted Uses in the Industrial (I) District; adding a new Section 20.20.095: Commercial Cannabis Uses and Requirements; amending Section 20.20.100: Marijuana Cultivation, Possession and Use; and amending Section 20.28.310:

Definitions to allow for commercial cannabis uses in Healdsburg.

Location: Citywide
Applicant: City of Healdsburg
Environmental
Determination: Determine that the proposed Healdsburg Municipal Code amendments are exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (the “common sense exemption”) because it can be seen with certainty that there is no possibility that the amendments will have a significant effect on the environment.

Community Development Director, Scott Duiven, introduced the item and summarized the staff report. Director Duiven provided a project overview and discussed the proposed amendments to the Healdsburg Municipal Code to develop a regulatory framework for commercial cannabis uses. Mr. Duiven discussed the path forward which includes City Council review and approval of the proposed amendments, an application process for the selection of up to two retail dispensaries, establishing a commercial cannabis business permit fee to cover the costs of administering the program, and setting the annual rate of the cannabis business tax.

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Commission and staff discussion ensued regarding the application and permit process, and whether or not cannabis retailers should be allowed in the downtown commercial district.

Chair Luks opened the hearing for public input.

Eli Melrod, Co-Founder of SolFul, provided information on their business, allowable locations for dispensaries in Healdsburg and the importance of foot traffic to this type of business. Mr.

Melrod invited the Commission to tour one of their nearby stores.

Brandon Levine, Sonoma County resident, Founder and CEO of Mercy Wellness, shared his background and said that they have been instrumental in developing these ordinances in other cities all over the North Bay and that Healdsburg has done a great job. He said he is available to answer any questions the Commission may have related to Mercy Wellness.

There being no further speakers, Chair Luks closed the public input portion of the hearing.

Chair Luks stated that he had previously pushed for extending the prohibition on dispensaries in the downtown commercial district. He said he would like to withdraw his previous comments about the absolute limitation for dispensaries in the downtown commercial district. He said that the location criteria for dispensaries adequately addresses potential sensitive receptors, and that he sympathizes with the comments from operators regarding the importance of foot traffic.

Vice Chair Breznikar said it is a well-established business and the cannabis businesses have gone through a lot of trials and supports moving forward.

On a motion by Commissioner McKay, seconded by Vice Chair Breznikar, the Commission voted 7-0-0 to adopt Resolution No. 2023-08 recommending the City Council repeal Healdsburg Municipal Code Chapter 8.32: Medical Marijuana Dispensaries; amend Section 20.08.145: Permitted and Conditionally Permitted Uses in the Plaza Retail (PR), Downtown Commercial (CD), and Service Commercial (CS) Districts; amend Section 20.08.155: Permitted and Conditionally Permitted Uses in the Mixed Use (MU) District; amend Section 20.08.195: Permitted and Conditionally Permitted Uses in the Industrial (I) District; add a new Section 20.20.095: Commercial Cannabis Uses and Requirements; amend Section 20.20.100: Marijuana Cultivation, Possession and Use; amend Section 20.28.310: Definitions; and related CEQA Exemption.

6. COMMISSIONER AND SUBCOMMITTEE REPORTS
None.

7. DIRECTOR’S REPORT
Director Duiven provided information regarding:
• Appointment of Commissioner Wood
• March 14, 2023, Planning Commission meeting agenda items • Brown Act requirements changing March 1, 2023, regarding attendance in person and virtually

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8. ADJOURNMENT
The meeting adjourned at 10:15 p.m.
________________________________ ________________________________ Scott M. Duiven, Secretary Phil Luks, Chair

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A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

HEALDSBURG RECOMMENDING THAT THE CITY COUNCIL

APPROVE THE FOURTH AMENDMENT TO THE DEVELOPMENT
AGREEMENT FOR THE NORTH VILLAGE PROJECT (DA 2020-01.04) WHEREAS, the City of Healdsburg, a California municipal corporation (the “City”) and CCS Healdsburg, LLC, a Delaware limited liability company (the "Developer") are Parties to that certain Development Agreement, dated May 6, 2020; a Memorandum of Development Agreement was recorded in the Official Records of Sonoma County on June 1, 2020, as Document No. 2020041464 (“Original Agreement”); and
WHEREAS, the Original Agreement was amended by that certain First Amendment to Development Agreement (“First Amendment”) dated as of June 21, 2022, and memorialized in that certain Memorandum of First Amendment to Development Agreement dated June 21, 2022, which recorded in the Official Records on September 30, 2022 as Document No. 2022063576, and by that certain Second Amendment to Development Agreement (“Second Amendment”) dated as of April 18, 2022 and memorialized in the certain Memorandum of Second Amendment to Development Agreement dated April 18, 2022 and recorded in the Official Records on September 13, 2022 as Instrument No. 2022059935, and by that certain Third (Administrative Agreement) Amendment to Development Agreement (the “Third Amendment”) dated as of December 22, 2022, and the Original Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment shall be referred to as the “Development Agreement”); and WHEREAS, the Development Agreement was assigned in part to Kendal At Sonoma, A Zen Inspired Community, a California nonprofit public benefit company (“Kendal”), pursuant to that certain Partial Assignment of Rights and Assumption of Obligations Under Development Agreement (the "Partial Assignment") dated August 20, 2020, which was recorded in the Official Records on August 21, 2020 as Instrument No. 2020071885; and WHEREAS, the Development Agreement governs the development of approximately 32- acre property located at 16977 Healdsburg Avenue with a Senior Living Community with 221 independent living units (including 11 density bonus units), ancillary facilities (including dining facilities, meeting rooms, and administrative offices) and a total of 54 assisted living and memory care beds; 30 multi-family apartments; a 108-key hotel with a restaurant/bar, fitness facility and spa, meetings rooms and other amenities; and 45 multi-family units, five live-work units, and 12,000 square feet of commercial/retail space in a mixed use development; and WHEREAS, City staff and Developer have prepared a proposed Fourth Amendment to the Development Agreement ("Fourth Amendment") for consideration by the Healdsburg Planning Commission and the Healdsburg City Council and the Fourth Amendment would modify the terms related to the affordable housing conditions as presented in Exhibit A to this resolution; and WHEREAS, in accordance with Sections 65864 through 65869.5 of the California Government Code (“State Development Agreement Law”), the City adopted Ordinance No. 1097 to add Chapter 17.20 to the Healdsburg Municipal Code authorizing the use of, and imposing additional requirements on, development agreements; and

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WHEREAS, Chapter 17.20.060 requires the Planning Commission to conduct a public hearing on an amendment to a development agreement; and WHEREAS, pursuant to the California Environmental Quality Act (Pub. Res. Code § 21000, et seq.) ("CEQA"), the City prepared and, on May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448; and WHEREAS, the Planning Commission held a noticed public hearing on February 28, 2023, for the purpose of receiving oral testimony on the proposed Fourth Amendment, reviewed written and oral staff reports, and received into the record all pertinent documents related to the Fourth Amendment, before making its decision.

NOW, THEREFORE BE IT RESOLVED that the Healdsburg Planning Commission hereby recommends to the City Council that the Fourth Amendment to the Development Agreement by and between the City of Healdsburg and CCS Healdsburg LLC (DA 2020-01.04) be approved as presented in Exhibit A to this resolution based upon the facts and findings as set forth below:

1. The Development Agreement and its Fourth Amendment are consistent with the Healdsburg 2030 General Plan, the North Entry Area Plan, and the Land Use Code. The City Council made findings of consistency in its action to adopt Ordinance No. 1202, approving the Development Agreement, and the Fourth Amendment does not modify the Development Agreement in any way that would conflict with the goals and policies of the Healdsburg 2030 General Plan and the North Entry Area Plan, and requirements of the City's Land Use Code.

2. The Development Agreement and its Fourth Amendment will provide Healdsburg with tangible benefits including: 107 units of Affordable and Middle Income Housing; a $2,000,000 contribution for construction of a Fire Substation; contribution of $250,000 to the City for connectivity improvements; annual payments to the City of approximately $334,000 per year from the Senior Living Community for lost tax revenue and increased demands for services; remittance of a 1/2% Hotel Add-On Fee (beginning 10 years after issuance of a certificate of occupancy for the hotel); and other improvements.

3. Any environmental impacts related to the Development Agreement have been reviewed and considered in accordance with the provisions of the California Environmental Quality Act. On May 20, 2019, the City Council certified the Final Environmental Impact Report ("EIR") for the North Entry Area Plan (State Clearinghouse No. 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations which can be found in the Planning Department’s files for the North Village Project at 401 Grove Street, Healdsburg, CA 95448. In accordance with the California Environment Quality Act (CEQA) Guidelines Section 15162, no further environmental review is required for the Fourth Amendment because (i) there are no changes involving new significant environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, (ii) there are no changes with respect to the circumstances under which the project is taken which will require major revisions to the EIR due to the involvement of new significant

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environmental effects or a substantial increase in the severity of previously identified significant effects/impacts, and (iii) there is no new information of substantial importance that was not known at the time the EIR was certified which shows (a) the project will have one or more significant effects not discussed in the EIR, (b) significant impacts/effects will be substantially more severe than shown in the EIR, (c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects/impacts, or (d) mitigation measures or alternatives which are considerably different from those analyzed in the EIR would substantially reduce one or more significant effects/impacts on the environment.

DULY AND REGULARLY ADOPTED by the Healdsburg Planning Commission on the 28th day of February 2023, by the following vote:

AYES: Barber, Breznikar, Gerlach, Hunt, Luks, McKay, Wood NOES: None
ABSENT: None
ABSTAIN: None
Approved: Attest:

Phil Luks, Chair Scott M. Duiven Secretary
EXHIBIT:

A. Fourth Amendment to Development Agreement

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EXHIBIT A

FOURTH AMENDMENT TO DEVELOPMENT AGREEMENT
THIS FOURTH AMENDMENT TO DEVELOPMENT AGREEMENT (the “Fourth Amendment”) is made and entered into as of [the 30th day following final adoption of the ordinance approving it] ("Fourth Amendment Effective Date") by and between the CITY OF HEALDSBURG, a California municipal corporation ("City") and CCS HEALDSBURG, LLC, a Delaware limited liability company (“Developer”). City and Developer may each be referred to as a “Party,” and collectively as the “Parties.”

RECITALS
A. On May 6, 2020, the Parties entered into that certain Development Agreement (the "Original Agreement"), which Original Agreement was recorded on June 1, 2020 in the Official Records of Sonoma County (“Official Records”) as Document No. 2020041464, as amended by that certain First Amendment to Development Agreement (“First Amendment”) dated as of June 21, 2022, and memorialized in that certain Memorandum of First Amendment to Development Agreement dated June 21, 2022, which recorded in the Official Records on September 30, 2022 as Document No. 2022063576, and by that certain Second Amendment to Development Agreement (“Second Amendment”) dated as of April 18, 2022 and memorialized in the certain Memorandum of Second Amendment to Development Agreement dated April 18, 2022 and recorded in the Official Records on September 13, 2022 as Instrument No. 2022059935, and by that certain Third (Administrative Agreement) Amendment to Development Agreement (the “Third Amendment”) dated as of December 22, 2022, (the Original Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment and this Fourth Amendment shall be referred to as the “Development Agreement”). The Development Agreement concerns the development of an approximately 32-acre parcel of land at 16977 Healdsburg Avenue in the City of Healdsburg, defined as the "Property" in the Development Agreement, and shown on Exhibit A attached to the Original Agreement. The Development Agreement was assigned in part to KENDAL AT SONOMA, A ZEN INSPIRED COMMUNITY, a California nonprofit public benefit company (“Kendal”), pursuant to that certain Partial Assignment of Rights and Assumption of Obligations Under Development Agreement (the "Partial Assignment") dated August 20, 2020, which was recorded in the Official Records on August 21, 2020 as Instrument No. 2020071885.

B. The parties agree to modify the Development Agreement pursuant to Government Code Sections 65867 and 65868, and Healdsburg Municipal Code Section 17.20.060, in order to modify the terms related to the affordable housing conditions as provided below.

C. On _____________, 2023, the City Council, after a duly noticed public hearing, introduced its Ordinance _________ approving this Fourth Amendment and authorizing its execution and adopted that Ordinance __________ on ____________. Ordinance ____________ became effective on _____________.

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AGREEMENT
NOW, THEREFORE, with reference to the foregoing recitals and in consideration of the mutual promises, obligations and covenants contained herein, Parties consent to this Fourth Amendment as follows:

1. Defined Terms. All capitalized terms used herein shall have the meanings given in the Development Agreement, except as expressly otherwise defined herein.

2. Enumeration of Specific Deletions and Amendments. The Development Agreement is hereby revised to incorporate the following amendments. (a) Replace and restate Recital E, Paragraphs 1.a. and 1.b. in their entirety as

1.a. Fifty-three (53) affordable/workforce apartments subject to recorded restrictions that require occupancy by households with very low, low, and moderate incomes, of which approximately ten (10) units are anticipated to be for households at or below 50% of area median income (“AMI”), approximately forty-two (42) units are anticipated to be for households between 50% and 120% of AMI and one (1) unit, the manager’s unit will be restricted to be for a household of up to 120% of AMI (collectively, “Affordable/Workforce Housing”).

1.b. Twenty-four (24) multi-family housing units subject to recorded restrictions that require occupancy by Middle Income Households (or below), (collectively, “Middle Income Housing”).
(b) Replace and restate Section 5.1 in its entirety as follows:

5.1 Affordable/Workforce Housing Units.
(a) Developer shall cause construction of a minimum of fiftythree (53) units of Affordable/Workforce Housing within the Project, affordable to households with very low, low, and moderate incomes, as follows:
(i) Approximately ten (10) dwelling units are anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Very Low Income Households. (ii) Approximately forty-two (42) dwelling units are
anticipated to be made available for occupancy at an affordable rent, adjusted for household size, to Low and Moderate Income Households.
(iii) One (1) dwelling unit, the manager’s unit, will be a restricted unit up to 120% of AMI.
(b) Notwithstanding the foregoing, the final mix of
Affordable/Workforce Housing units in any given affordability category

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may vary, but in no event shall less than three (3) units be occupied by Very Low Income Households, and no greater than thirteen (13) units be occupied by Moderate Income Households.
(c) Developer shall provide approximately eighteen (18) one-bedroom dwelling units, twenty-four (24) two-bedroom dwelling units, and eleven (11) three-bedroom dwelling units within the Affordable/Workforce Housing. Notwithstanding the foregoing, Developer shall have the right to construct at least eight (8) three-bedroom dwelling units within the Affordable/Workforce Housing. (d) Developer or its successor in interest with respect to the parcel or parcels on which the Affordable/Workforce Housing is to be located shall enter into an “Affordable Housing Agreement” with City setting forth its obligations to provide and maintain the Affordable/Workforce Housing units for a term of 55 years. The Affordable Housing Agreement shall be executed by Developer or developer's successor in interest with respect to the portion of the Property containing the Affordable/Workforce Housing units and be recorded against such portion of the Property containing the Affordable/Workforce Housing units prior to City issuance of a final certificate of occupancy for the hotel. The Affordable Housing Agreement shall be assignable to and assumable by the owner and operator of the Affordable/Workforce Housing units, and all portions of the Property except for the parcel containing the Affordable/Workforce Housing units shall be released from the Affordable Housing Agreement upon the first to occur of (i) issuance of a certificate of occupancy for the Affordable/Workforce Housing units or (ii) delivery to City of a completion guaranty pursuant to Section 5.5(a) of this Agreement, whichever is earlier. After satisfaction of the earliest to occur of such conditions, and upon request of Developer or its successor, City will provide a release in recordable form from the obligations of the Affordable Housing Agreement with respect to those portions of the Property no longer subject to such obligations and authorize recordation thereof in the Official Records.
(c) Replace and restate Section 5.2 in its entirety as follows:

5.2 Middle Income Housing Units.
(a) Developer shall cause construction of a minimum of
twenty-four (24) units of Middle Income Housing within the Project, which shall be made available at an affordable rent to Middle Income Households, as follows:
(i) Twenty-four (24) dwelling units shall be made
available for occupancy at an affordable rent, adjusted for household size, to Middle Income Households.
(b) The Middle Income Housing will require Growth
Management Ordinance (“GMO”) Category C allocations. Developer

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may, in its sole discretion, develop the Middle Income Housing for sale rather than for rent at an affordable sales price to Middle Income Households.
(c) Developer or its successor in interest shall enter into a “Middle Income Housing Agreement” with City setting forth its obligations to provide and maintain the Middle Income Housing units for a term of 55 years. The regulatory agreement shall meet any applicable requirements of the GMO Policies and Procedures as may be amended, or applicable new GMO policies and procedures that may be adopted, by the City Council specifically for Middle Income Housing units that do not otherwise conflict with the terms of this Agreement. The Middle Income Housing Agreement shall be executed by Developer or its successor in interest with respect to the portion of the Property containing the Middle Income Housing units and be recorded against such portion of the Property containing the Middle Income Housing units prior to City issuance of a final certificate of occupancy for the hotel. The Middle Income Housing Agreement shall be assignable to and assumable by the owner and operator of the Middle Income Housing units, and all portions of the Property except for the parcel containing the Middle Income Housing units shall be released from the Middle Income Housing Agreement upon the first to occur of (i) issuance of a final certificate of occupancy for the last Middle Income Housing unit to be constructed or (ii) delivery to City of a completion guaranty pursuant to Section 5.5(a) of this Agreement. After satisfaction of the earliest to occur of such conditions, upon request of Developer or its successor, City will provide a release in recordable form from the obligations of the Middle Income Housing Agreement with respect to those portions of the Property no longer subject to such obligations, and authorize recordation thereof in the Official Records.
(d) The final sentence in Section 5.4(c) is deleted in its entirety and replaced with the following:
“The obligations with respect to the Senior Living Community Affordable Housing Agreement has been assigned to Kendal pursuant to the Partial Assignment, as the owner and operator of the Senior Living Community, and the obligations arising thereunder, and all other obligations set forth in Section 5.4 of the Development Agreement with respect to Senior Living Community Affordable Housing are not applicable to any other parcels of the Property other than the Senior Living Community.”
(e) Replace and restate Section 5.5(a) in its entirety as follows:

5.5(a) All Workforce/Affordable Housing units and
Middle Income Housing units must have received a certificate of occupancy before City will issue a final certificate of occupancy for the

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hotel portion of the Property. Notwithstanding the foregoing, in lieu of obtaining certificates of occupancy for Workforce/Affordable Housing or Middle Income Housing units required immediately above, Developer or its successor may provide a completion guaranty in favor of City, in substantially the form attached as Exhibit 1 hereto, or in a form reasonably acceptable to the City Manager, whose approval thereof shall not be unreasonably withheld, conditioned, or delayed, in order to secure the obligation to obtain certificates of occupancy for any
Workforce/Affordable Housing units or Middle Income Housing units otherwise required under this Agreement but not yet obtained. The completion guaranty(ies) that may be provided with respect to this Section

5.5(a) (and also including the corresponding provisions of Sections 5.1(d) and 5.2(c) with respect to the delivery of a completion guaranty as to the Workforce/Affordable Housing units and/or Middle Income Housing units, respectively), may be provided by (or if previously provided by Developer, assigned to and assumed by) the owner and operator of the Workforce/Affordable Housing units and/or Middle Income Housing units, respectively, and upon such completion guaranty being provided (or assigned and assumed) by such party, City shall release the remainder of the Property from the obligations imposed by this Section 5.5(a) and Sections 5.1(d) and 5.2(c), as applicable.

3. Interpretation. The Development Agreement shall be construed as having been modified by this Fourth Amendment. Except as expressly modified by this Fourth Amendment. the Development Agreement remains in full force and effect. In the case of conflict between the provisions hereof and the terms of the Development Agreement, the provisions of this Fourth Amendment shall control.

4. Recording of Memorandum. Approximately concurrent with the Fourth Amendment Effective Date, the Parties shall execute, acknowledge and record a Memorandum of this Fourth Amendment in the Official Records.

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IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

CITY
City of Healdsburg, a California municipal corporation
By: _________________________
Jeff Kay
City Manager
APPROVED AS TO FORM:

By: __________________________
Samantha Zutler, Esq. City Attorney
ATTEST:

By: __________________________
Raina Allan City Clerk

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DEVELOPER
CCS Healdsburg, LLC, a Delaware limited liability
company
By: CCS Healdsburg Manager, LLC, a Delaware limited
liability company
Its: Manager
By: CCA Management, LLC,
a California limited liability company
Its: Manager
By: Comstock Crosser & Associates
Development Company, LLC, a California
limited liability company
Its: Manager
By:

Nicholas Long, CFO

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EXHIBIT 1

FORM OF COMPLETION GUARANTY
THIS COMPLETION GUARANTY (the “Guaranty”) is made as of ____________________ (“Guarantor”), for the benefit of the CITY OF HEALDSBURG, a California municipal corporation (“City”), with reference to the following recitals of fact:

RECITALS
A. WHEREAS, CCS HEALDSBURG, LLC, a Delaware limited liability company (“Master Developer”) and City entered into that certain Development Agreement (the "Original Agreement"), which Original Agreement was recorded on June 1, 2020 in the Official Records of Sonoma County (“Official Records”) as Document No. 2020041464, as amended by that certain First Amendment to Development Agreement (“First Amendment”) dated as of June 21, 2022, and memorialized in that certain Memorandum of First Amendment to Development Agreement dated June 21, 2022, which recorded in the Official Records on September 30, 2022 as Document No. 2022063576, and by that certain Second Amendment to Development Agreement (“Second Amendment”) dated as of April 18, 2022 and memorialized in the certain Memorandum of Second Amendment to Development Agreement dated April 18, 2022 and recorded in the Official Records on September 13, 2022 as Instrument No. 2022059935, and by that certain Third (Administrative Agreement) Amendment to Development Agreement (the “Third Amendment”) dated as of December 22, 2022, (the Original Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment and this Fourth Amendment shall be referred to as the “Development Agreement”). The Development Agreement concerns the development of an approximately 32-acre parcel of land at 16977 Healdsburg Avenue in the City of Healdsburg, defined as the "Property" in the Development Agreement, and shown on Exhibit A attached to the Original Agreement. The Development Agreement was assigned in part to KENDAL AT SONOMA, A ZEN INSPIRED COMMUNITY, a California nonprofit public benefit company (“Kendal”), pursuant to that certain Partial Assignment of Rights and Assumption of Obligations Under Development Agreement (the "Partial Assignment") dated August 20, 2020, which was recorded in the Official Records on August 21, 2020 as Instrument No. 2020071885.; B. WHEREAS, the Development Agreement contemplates the construction of affordable/workforce apartments subject to recorded restrictions that require occupancy by households with very low, low, and moderate incomes (the “Workforce/Affordable Housing”) as well as housing units subject to recorded restrictions that require occupancy by households with moderate and middle incomes (“Middle Income Housing”), on certain real property located within the City, commonly known as Parcels 2 and 4 of the North Village Site, as more particularly described in Exhibit A attached hereto and incorporated herein by reference (“Parcel 2” and “Parcel 4”, respectively); C. WHEREAS, pursuant to Section 5.5(a) of the Development Agreement, Master Developer is obligated to provide evidence of a completion guaranty to City, in a form reasonably acceptable to the City, to secure Master Developer’s obligation to deliver all Workforce/Affordable Housing units and Middle Income Housing units under the Development Agreement; and D. WHEREAS, Master Developer (also referred to in this Agreement as “Developer”), has provided to City this Guaranty from [Master Developer or an affiliate of Master Developer], in order to

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satisfy its obligation set forth in Section 5.5(a) of the Development Agreement with respect to the [Workforce/Affordable Housing units and the Middle Income Housing units]; and [OR]
D. WHEREAS, in connection with the transfer of fee title from Master Developer to __________________ with regard to [Parcel __] (“Developer”), Developer has provided to City this Guaranty from Developer or its affiliate (referred to in this Agreement as “Guarantor”), in order to satisfy its obligation set forth in Section 5.5(a) of the Development Agreement; and E. WHEREAS, Guarantor desires to guaranty to City completion of construction of the Workforce/Affordable Housing units and Middle Income Housing units in accordance with the terms of the Development Agreement and this Guaranty.

NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, Guarantor hereby agrees as follows:

1. Defined Terms. Capitalized terms not otherwise defined in this Guaranty are as defined in the Development Agreement.

2. Guaranty. Subject to the terms and conditions set forth herein, Guarantor unconditionally and irrevocably guarantees construction of the [Workforce/Affordable Housing units and/or Middle Income Housing units] by Developer as required by, and in accordance with, the terms and conditions of the Development Agreement.

3. Obligations of Guarantor Upon Default By Developer. If Developer fails to complete the construction of the [Workforce/Affordable Housing Units as may be provided in the Affordable Housing Agreement to be entered into with respect to the Project as provided in Section

5.1(d) of the Development Agreement with respect to the Workforce/Affordable Housing units], [and as may be provided in the Middle Income Housing Agreement to be entered into with respect to the Project as provided in Section 5.2(c) of the Development Agreement with respect to the Middle Income Housing units], in each case as such obligation may be amended pursuant to a written amendment to the Development Agreement, following written notice from City to Guarantor, City may elect, at its sole discretion, to require Guarantor to: (A) complete construction of the [Workforce/Affordable Housing units and/or Middle Income Housing units], at Guarantors’ sole cost and expense; (B) fully pay and discharge all claims for labor performed and material and services furnished in connection with the construction of the [ Workforce/Affordable Housing units and/or Middle Income Housing units]; and (C) release and discharge all claims of stop notices, mechanic’s liens, materialman’s liens and equitable liens that may arise in connection with the construction of the [Workforce/Affordable Housing units and/or Middle Income Housing units].

4. Guarantor Default. City may declare Guarantor to be in default under this Guaranty upon the occurrence of any of the following events (each a “Guarantor Default”): (a) Guarantor fails to perform any of its obligations under this Guaranty; (b) Guarantor revokes or attempts to revoke this Guaranty or this Guaranty becomes ineffective for any reason; (c) any representation or warranty made or given by Guarantor to City proves to be false or misleading in any material respect; (d) Guarantor is or becomes bankrupt or insolvent, makes an assignment for the benefit of

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creditors, or commences or has commenced against it a proceeding under the Federal Bankruptcy Code or any other law or statute providing for the relief of debtors; or (e) Guarantor dissolves or liquidates.

5. Remedies. If Guarantor fails to promptly perform its obligations under Section 3 of this Guaranty or in the event of a Guarantor Default, in addition to any other remedies available to City, City will have the following remedies:
(a) City may bring any action at law or in equity, or both, to compel Guarantor to perform its obligations under this Guaranty and to collect compensation for all loss, cost, damage, injury and expense which may be sustained or incurred by City as a consequence of Guarantor’s failure to perform those obligations. City from time to time may bring such an action regardless of whether City has first required performance by Developer, or whether City has exhausted any or all security (if any). Nothing herein shall be construed to prohibit the City from pursuing any remedies under any other agreement, against any person other than the Guarantor. (b) The City, at City’s option, shall have the right to perform or cause to be performed any or all obligations required to be performed by Guarantor under this Guaranty, which City reasonably deems necessary, and expend such sums as City reasonably deems proper in order so to complete such obligation. Guarantor shall reimburse City immediately on demand for all costs and expenses, including any attorneys’ fees, which City may incur in performing those obligations, notwithstanding City’s pursuit of any other rights or remedies.

6. Rights of City. Guarantor authorizes City, without giving notice to Guarantor or obtaining Guarantor’s consent and without affecting the liability of Guarantor, from time to time in City’s sole discretion to do any one or more of the following: (a) approve modifications to the approved plans and building permits for the [Workforce/Affordable Housing units and/or Middle Income Housing units]; (b) change the terms of the Development Agreement or any part thereof (subject to the consent of the Developer); (c) renew, modify, compromise or extend all or any portion of Developer’s obligations under the Development Agreement; (d) take and hold security for the performance of Developer’s obligations under the Development Agreement and Guarantor’s obligations under this Guaranty, accept additional or substituted security for either, and exchange, enforce, waive, subordinate, compromise, fail to perfect, and release, sell or otherwise dispose of any such security in whole or part; (e) apply such security and direct the order and manner of sale thereof as City in its sole discretion may determine; (f) apply payments or recoveries received by City from Developer, Guarantor or any other source to any obligations of Developer to City, in such order, manner and priority as City shall determine in its sole discretion, whether or not any such obligations are covered by this Guaranty; (g) substitute, add or release any one or more guarantors; and (h) release Developer from all or any part of its obligations under the Development Agreement.

7. Guarantors’ Warranties. Guarantor warrants, represents, covenants and acknowledges to City that: (a) Guarantor acknowledges and agrees that City would not enter into the Assignment Agreement but for this Guaranty, and that this Guaranty and the agreements of Guarantor in this Guaranty is a material part of the consideration which City is receiving for entering into the Assignment Agreement; (b) Guarantor has reviewed and understands all of the terms and provisions of the Development Agreement; (c) there are no conditions precedent to the

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effectiveness of this Guaranty; (d) the Guarantor has established adequate means of obtaining from sources other than City, on a continuing basis, financial and other information pertaining to Developer’s financial condition, the [Workforce/Affordable Housing units and/or Middle Income Housing units], and Developer’s activities relating thereto and the status of Developer’s performance of obligations under the Development Agreement; (d) the most recent financial statements of Guarantor and all other financial information relating to Guarantor heretofore or hereafter delivered to City are true and correct in all material respects, and the financial statements have been, and any hereafter delivered will be, prepared in accordance with generally accepted accounting principles consistently applied (“GAAP”) and fairly and accurately represent the financial condition of Guarantor as of the respective dates thereof, and no material adverse change has occurred in the financial condition of Guarantor since the respective dates thereof; and (e) Guarantor is not “insolvent” and will not be, as a consequence of the execution and delivery of this Guaranty, rendered “insolvent”, as that term is defined in Section 101 of the Federal Bankruptcy Code, or otherwise rendered unable to pay Guarantor’s debts as the same mature.

Guarantor acknowledges and agrees that City may request and obtain public or non-confidential information from third parties regarding any of the above, including, without limitation, credit reports.

8. Reserved.

9. Termination. This Guaranty shall terminate and be of no further force or effect upon the issuance of a certificate of occupancy for all of the [Workforce/Affordable Housing units and/or Middle Income Housing units].

10. Interest. Any sums required to be paid by the Guarantor to the City pursuant to the terms hereof that are not paid within thirty (30) days of the date due, shall bear interest at the prime rate announced by Wells Fargo plus three percent (3%), from the date said sums shall have become due until the date said sums are paid.

11. No Waiver, Extension or Modification. No failure on the part of the City to pursue any remedy hereunder shall constitute a waiver on its part of the right to pursue said remedy on the basis of the same or a subsequent breach. No extension, modification, amendment or renewal of the Development Agreement shall serve to waive the provisions hereof or discharge the Guarantor from any obligation herein contained, in whole or in part, except to the extent expressly approved by the City by written instrument signed by the City, specifying the nature and the extent of the intended waiver and discharge of the Guarantor.

12. Guaranty Independent; Waiver of Exoneration.
(a) Guarantor agrees that the obligations hereunder are independent of and in addition to the undertakings of the Developer pursuant to the Development Agreement, any other Guarantees given in connection with the Development Agreement, and other obligations of the Guarantor to the City.
(b) Guarantor agrees that the validity of this Guaranty shall continue and the obligations of Guarantor hereunder shall in no way be terminated, affected, diminished or impaired by reason of any bankruptcy, insolvency, reorganization, arrangement, assignment for the benefit

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of creditors, receivership or trusteeship affecting the Developer or its partners, parents, principals, or members whether or not notice is given to the Guarantor, or by any other circumstances or condition that may grant or result in a discharge, limitation or reduction of liability of the Developer or its partners, parents, principals, members or of a surety or a guarantor. (c) Guarantor waives all rights and remedies accorded by applicable law to guarantors and agrees not to assert or take advantage of any such rights or remedies including but not limited to any right to require the City to, after expiration of applicable notice and cure periods to Developer, (1) proceed against the Developer, any partner or member of the Developer or any other person, (2) proceed against or exhaust any security held by the City, or (3) pursue any remedy in the power of the City whatsoever. If Guarantor is liable pursuant to this Guaranty, Guarantor waives any defense arising by reason of any disability or other defense of the Developer or any partner or member of the Developer, or any of their parents, principals, or affiliated entities or by reason of the cessation from any cause whatsoever of the liability of the Developer or any member or partner of the Developer, or any of their parents, principals, or affiliated entities other than the full discharge and performance of all of Developer’s obligations under the Development Agreement. Guarantor, except as expressly set forth herein, waives any defense it may acquire by reason of the City’s election of any remedy against it or the Developer, or both, even though the Guarantors’ right of subrogation may be impaired thereby or extinguished under the antideficiency statutes of the State of California. Without limiting the generality of the foregoing, Guarantor waives (a) any defense that may arise by reason of the lack of authority or of any other person or persons or the failure of City to file or enforce a claim against the estate (in administration, bankruptcy, or any other proceeding) of any other person or persons; (b) demand, protest and notice of any kind including but not limited to notice of any kind (except for the notice required in Sections 3 and 14 hereof or under the Development Agreement) including but not limited to notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or non-action on the part of Developer, City, any endorser or creditor of Developer or Guarantor or on the part of any other person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held by City as collateral or in connection with any obligations the performance of which are hereby Guaranty; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal. (d) Guarantor waives: (i) any duty on the part of City to disclose to Guarantor any facts City may now or hereafter know about Developer, regardless of whether City has reason to believe that any such facts materially increase the risk beyond that which Guarantor intended to assume or has reason to believe that such facts are unknown to Guarantor; (ii) any defense arising because of City’s election, in any proceeding instituted under the federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code; and (iii) any defense based on any borrowing or grant of a security interest under Section 364 of the Federal Bankruptcy Code.

Without limiting the generality of the foregoing or any other provision hereof, Guarantor hereby expressly waives any and all benefits which might otherwise be available to Guarantor under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580(a), 580(b), 580(d), and 726. (e) Until termination of this Guaranty (as set forth in Section 4), Guarantor shall have no right of subrogation, and waives any right to enforce any remedy that the City now has or

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may hereafter have against the Developer or any member of Developer, or any other person, and waives the benefit of, and any right to participate in, any security now or hereafter held by City from the Developer.

13. Transfer or Assignment. The obligations of Guarantor under this Guaranty may be assigned or transferred in whole or in party, to one or more successor developers of [Parcel 2 and/or Parcel 4], in each case in connection with the assignment and assumption of the rights and obligations of Master Developer under the Development Agreement with respect to [Parcel 2 and/or Parcel 4], pursuant to which Master Developer has assumed or has assigned to the successor guarantor and/or its affiliate, and successor guarantor and/or its affiliate has assumed from Master Developer, the rights and obligations under those portions of the Development Agreement and this Guaranty applicable to [Parcel 2 and/or Parcel 4, as applicable]. Any such transfer and assumption will release Guarantor from any liability to City pursuant to this Guaranty so assigned and assumed, provided that the designated replacement guarantor is the Master Developer or an affiliate thereof of meets the City’s standards applicable to a Partial Transferee pursuant to Section 9.1 of the Development Agreement, and such party has been approved by City in its discretion, as provided in and pursuant to Section 9.1 of the Development Agreement. Except as provided immediately above, the obligations of Guarantor under this Guaranty may not be assigned or transferred without, in each case, the express written approval of the City, which approval shall be within the sole and absolute discretion of the City.

14. Notices. City shall provide Guarantor with all written notices delivered to Developer pursuant to the Development Agreement at the same time such notice is delivered to Developer. Guarantor shall not be liable under this Guaranty unless and until it has received such notice. The Guarantor shall have the right to perform any and all of Developer’s obligations under the Development Agreement.

15. Enforceability. Guarantor hereby acknowledges that: (a) the obligations undertaken by Guarantor in this Guaranty are complex in nature, and (b) numerous possible defenses to the enforceability of these obligations may presently exist and/or may arise hereafter, and (c) as part of City’s consideration for entering into this transaction City has specifically bargained for the waiver and relinquishment by Guarantor of all such defenses, and (d) Guarantor has had the opportunity to seek and receive legal advice from skilled legal counsel in the area of financial transactions of the type contemplated herein. Given all of the above, Guarantor does hereby represent and confirm to City that Guarantor isfully informed regarding, and that Guarantor does thoroughly understand: (i) the nature of all such possible defenses, and (ii) the circumstances under which such defenses may arise, and (iii) the benefits which such defenses might confer upon Guarantor, and (iv) the legal consequences to Guarantor of waiving such defenses. Guarantor acknowledges that Guarantor makes this Guaranty with the intent that this Guaranty and all of the informed waivers herein shall each and all be fully enforceable by City, and that City is induced to enter into this transaction in material reliance upon the presumed full enforceability thereof.

16. Miscellaneous.
(a) This Guaranty shall inure to the benefit of City and its successors and assigns and shall bind the heirs, executors, administrators, personal representatives, successors and assigns of Guarantor.

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(b) This Guaranty shall be governed by and shall be construed in accordance with the laws of the State of California.
(c) If any term, provision, covenant or condition hereof or any application thereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, provisions, covenants and conditions hereof and all applications thereof not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby.
(d) Guarantor assumes the responsibility for keeping informed of (1) the financial condition of Developer, (2) any change in the management or control of Developer, and (3) all other circumstances bearing upon the risk of nonperformance by Developer of its obligations under the Development Agreement.
(e) This Guaranty shall be construed and enforced in accordance with the laws of the State of California. Any action to enforce or interpret this Guaranty shall be filed and heard in the Superior Court of Sonoma County, California.
(f) Any notice or communication required hereunder between City or Guarantor must be in writing, and may be given either personally, by e-mail (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express or other similar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by email transmission, a notice or communication shall be deemed to have been given and received upon actual physical receipt of the entire document by the receiving party. Notices transmitted after 5:00 p.m. on a normal business day or on a Saturday, Sunday, or holiday shall be deemed to have been given and received on the next normal business day. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of: (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below:

If to City: City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Manager
With a Copy to: City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Attorney

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If to Guarantor:

With a Copy to:
(g) In any legal action or other proceeding brought by either party to enforce or interpret a provision of this Guaranty, the prevailing party is entitled to reasonable attorneys’ fees and any other costs incurred in that proceeding in addition to any other relief to which it is entitled. [Signatures on following page]

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IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the day and year first above written.

GUARANTOR:
________________________________
By: ___________________________
Name: ___________________________
Its: ___________________________

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

STATE OF CALIFORNIA )

COUNTY OF )
On _________________________ before me
_________________________________________ (insert name and title of the officer) personally appeared
______________________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature ______________________________ (Seal)

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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: April 17, 2023
SUBJECT: General Plan Amendment GPA 2022-01, Land Use Amendment LUA 2022-01, and Mitigated Negative Declaration and Mitigation Monitoring and Reporting Plan for the Foley Family Community Pavilion located at 3 North Street
PREPARED BY: Joel Galbraith, Senior Planner
STRATEGIC INITIATIVE(S):

Provide Resident-Driven Community Services
RECOMMENDED ACTION(S):

1. Adopt a Resolution adopting the Mitigated Negative Declaration (MND) and the Mitigation Monitoring and Reporting Plan (MMRP); and

2. Adopt a Resolution amending the Healdsburg 2030 General Plan land use designation for the Foley Family Community Pavilion site; and

3. Introduce for first reading, by title only, waiving further reading of the text, an Ordinance amending the City of Healdsburg Zoning Map for the Foley Family Community Pavilion site.

COMMUNITY ENGAGEMENT/OUTREACH:

The project was reviewed by the Planning Commission at a properly noticed public hearing on March 14, 2023. The City published proper notice for this City Council public hearing in the Press Democrat and mailed notice to property owners within 300’ of the proposed project’s property boundary. An on-site public hearing sign was installed on the North Street frontage.

PROJECT DESCRIPTION SUMMARY:

The subject project is a City of Healdsburg proposal to rehabilitate the existing, approximately 13,300 square foot warehouse building to accommodate a community pavilion to provide space for the Healdsburg Certified Farmers’ Market and other community and private events. The project will pave and stripe the existing gravel parking lot to include 42 surface public parking spaces, including two accessible and four EV capable spaces. Vehicular access to the site will be provided by an existing driveway from North Street that will be reconfigured, and access from

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the site will also be provided by a new driveway from North Street at the southeast corner of the parking lot. A secondary egress/ingress driveway will be provided from the north side of the project site and out to Foss Street utilizing an existing driveway that has shared ownership between the City and the owner of the Duchamp Hotel. The Harry and Maggie Wetzel Native Plant Garden adjacent to Foss Creek will remain.

The project includes a Lot Line Adjustment/Merger to merge the three project parcels into one contiguous parcel, a Conditional Use Permit to exceed the 0.15 floor area ratio, a Variance to encroach within the 35-foot riparian setback, and a Heritage Tree Permit to remove two existing heritage trees (glossy privet) with a trunk diameter greater than 30 inches. Public right-of-way improvements include a new curb, 5-wide sidewalk, three driveway approaches, streetlight, and the undergrounding of existing overhead utilities. The project also includes a General Plan amendment to redesignate the site to Public/Quasi Public (PQP) and a Land Use Code amendment to rezone the site to P-Public which are now before the City Council for a public hearing and a decision.

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BACKGROUND:

Site History
Initial development of the 3 North Street property appears to have occurred prior to 1920 when at least one residence existed on the western side of the project site in the current location of the warehouse structure. In the early 1920’s, the Cerri Family (pronounced "cherry") purchased the property and constructed the existing warehouse for use as a grape distribution facility.

In the early 1930’s, the Cerri Family went bankrupt, and the existing building was purchased for use in fruit packing. The building was also reportedly used to distribute sugar during prohibition.

Between the 1930’s and the mid-1970’s the property was used for fruit and nut packing and distribution. Fruit and sugar were likely delivered to and from the warehouse by a railroad spur located adjacent to the project site.

In the mid-1970’s the Purity Chemical Products Company (Purity) purchased the warehouse structure for use in distribution and storage of agricultural products such as fertilizer, herbicides and pesticides. In addition, Purity stored and distributed pool and spa chemicals from the property.

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City Purchase, Timeline, and Initial Planning Efforts
The Redevelopment Agency of the City of Healdsburg purchased the Purity Chemical Products property located at 3, 9, and 15 North Street (commonly referred to as “3 North”, “Cerri”, or “Purity” site) in 2004 to help meet parking needs in the downtown area. Purity Chemicals continued to use the property under a lease agreement until September 2006 when Purity moved into a new facility on Grove Street.

In 2007, the former Redevelopment Agency Board directed staff to initiate environmental and design review process with the Planning Commission for removal of the building with possible preservation of the façade attached to a shade structure and installation of a public parking lot. In response to public opposition to the demolition, concerns about pressure on the Plaza, and desire to establish a permanent home for the Farmers’ Market the City reconsidered redevelopment options for the site and commissioned alternative redevelopment design options.

Over the course of the next three years the City proposed and vetted several different concepts through a public process. However, in 2011, the State of California initiated actions to dissolve redevelopment agencies statewide creating uncertainty about the future of the property. With the subsequent official dissolution of the Healdsburg Redevelopment Agency in February 2012, the City received ownership of the property in 2013 primarily due to the public improvements related to the Harry and Maggie Wetzel Native Plant Garden which commenced in 2009 and completed in 2012. The Wetzel Garden was created as an education garden open to the public on land provided by the City, and therefore, the public garden including the Cerri site was determined to be a public park. Work on redeveloping the property ceased during the dissolution of the Healdsburg Redevelopment Agency.

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2011-2017 Planning Efforts
In 2011, local architects Alan Cohen and John Wordon provided a concept plan that retained the building but allowed for special events, potential space for a farmer’s market and the ability for cars to park in the building when not in use. This in part triggered community discussion again regarding the future of the site. In 2014 the City conducted a parks and recreation community needs assessment. As part of the assessment, residents were asked what they would focus on if they could change one thing in the parks and recreation department over the next five years.

Residents cited:

1. River access

2. Completion of the Purity Building for the planned farmers’ market and parking

3. Completion of the Foss Creek Trail

4. Creation of a vibrant, multi-generational community center The City retained the services of TLCD Architects out of Santa Rosa to lead the concept design work with local representation from Architect Alan Cohen. In addition, the City commissioned a Phase 1 and Phase 2 Environmental Site Assessment to study any potential environmental issues.

City Council provided the following direction that guided the concept design:
• The site should provide parking
• The site should be the home of the Healdsburg Farmers Market • Consider space for community events and activities
• Develop two concept design options:

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1. Retain the existing building and renovate/repurpose

2. Remove the existing building and reconstruct the site with parking and shade structure(s)
• Identify ways to incorporate green building technology, including solar. • Return to Council if public process raises ideas that require Council’s consideration.

On August 15, 2016, City Council reviewed four conceptual design directions and directed staff and the design team to proceed with a schematic design that:

1. Maximized parking

2. Preserved the façade and a portion of the building

3. Included bathrooms and a kitchen

4. Could be implemented in phases

5. Used an ecologically friendly surface for the parking lot surface With Council’s direction to remove a portion of the building and a renewed focus on the site design, the City added Andrea Cochran Landscape Architects out of San Francisco to the design team to assist with schematic design. The design team evaluated different approaches to meet City Council's direction. As part of this work the team analyzed how best to maximize parking on the site, considered the advantages/disadvantages of preserving the front versus the rear portion of the structure, discussed where the façade should be placed, and evaluated whether some of the more prominent architectural elements of the structure could be repurposed.

The outcome of this work was the proposed schematic design as shown below. Elements of the schematic design include:
• 55 parking spaces
• Repurposing the existing structure to include approximately 5,200 square feet of “pavilion” covered space for events and activities, with an additional 6,100 square feet of multi-purpose parking and "open air" event space • A catering kitchen and restrooms
• Secondary unloading and loading area on the west side of the site for staging events and activities.
• Single vehicle entry point to minimize potential pedestrian/vehicle conflicts • Emergency vehicle access to Foss Street
As of 2017, the estimated cost for the project was $5.3 million, which included construction, soft costs such as design and permitting, and a 15% contingency.

The Parks and Recreation Commission considered the schematic design at their April 17, 2017, meeting and on a vote of 7-0 recommended approval of the schematic design. City Council reviewed the proposed schematic design on May 15, 2017, and on a vote of 5-0 approved the schematic design. As part of their action, City Council also directed the staff to pursue funding opportunities and to move forward through the design review process.

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2017-City Council approved schematic design with partial roof Foley Family Community Foundation Pledge/Planning Commission Workshop In June 2017, staff convened a working group that consisted of Park and Recreation Commissioners, representatives of the Friends of the Farmers’ Market and community members to discuss various funding approaches for the project. Shortly thereafter, staff also initiated a conversation with a member of the Foley Family regarding their potential interest in supporting a project in Healdsburg. After this initial conversation staff presented the 3 North Street project as a potential option given that the project had completed a recent schematic design process, had significant community support, and received unanimous City Council conceptual/schematic approval.

On September 12, 2017, the Planning Commission conducted a workshop to provide nonbinding comments on the schematic plan approved by the City Council in June 2017. The following questions and issues were identified by the three individual Planning Commissioners present at the workshop:

1. What types of events will occur and how will they be managed?

2. What type of parking lot pavers are proposed?

3. How does the double row of trees proposed along the North Street frontage fit into the existing context?

4. Should look at maintaining the appearance of the historic corbels and cornice at the top of the front façade.

5. Are vines along the roof trusses appropriate?

6. The project is well designed but questioned the benefit of the project and the use of permeable paving. The entire site should be used for parking.

7. The project looks too much like the Shed (Little Saint) located to the east and there

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should be more differentiation between the two buildings.

8. The project is well designed, and no concerns were identified.

Over the course of several months staff and the Foley Family representative continued communication about the project and determined that there was interest. At that point, staff shared more specifics including the detailed cost estimates, potential timelines, and the process that would be used moving forward. In July 2019 staff met with an additional representative of the Family affirmed their interest and identified a plan for final Family approval. The conversations with the Family were interrupted by the Kincade Fire and the aftermath of that disaster but resumed in late 2019 as staff continued to work on finalizing a commitment.

On January 13, 2020, the City received a written pledge from the Foley Family Community Foundation in the amount of $7 million to fund the project.

Consideration of Alternative Uses for the Site and Approval of Community Pavilion Project As staff was finalizing work on securing the funding commitment in 2019, a series of discussions ensued at a staff level, at the Council level, and throughout the community about the best use of the 3 North Street site. Two topics rose to the top of this discussion: (1) using the site for affordable housing and (2) locating a future train station for Sonoma-Marin Area Rail Transit (SMART) at the site.

On March 2, 2020, staff presented a detailed analysis of both topics to City Council, at which time City Council considered moving forward with the long-planned Community Pavilion project (project). By unanimous vote, City Council approved a motion to “Direct City to enter into negotiations with the Foley Family to prepare a mutually agreeable commitment letter to accept the Foley Family Pledge and move the Community Pavilion Project forward and explore enhancing increasing the covered area of the current design, explore with SMART relocating the depot to the 3 North Street site. As part of those discussions, explore the possibility of utilizing the SMART-owned property where the current Depot is located and surrounding area for affordable housing.”
On March 2, 2020, City Council unanimously approved moving forward with the Foley Family Pledge to create the proposed Community Pavilion-Farmers Market design. As part of their action, they requested that the design team study the feasibility of extending the roof covering for greater year-round use.

On April 19, 2021, the City Council approved a Memorandum of Understanding between the City and the Foley Family Charitable Foundation assigning naming rights, finalizing the design, securing City approvals, preparation of construction documents, and issuance of the building permit for construction. In the second half of 2022, the Foley Family Foundation entered into an agreement with Community Foundation Sonoma County to act as the fiscal agent for the project.

Following-up on City Council’s direction to evaluate extending the roof structure, the design team explored several options. Based on prior feedback from farmers, the team understood that allowing natural light to pass through the roof is important for display of agriculture products.

However, too much light could be detrimental in terms of heat during the summer. The solution

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the design team came up with is a mix of solid and translucent panels that will allow some natural light to pass through while also controlling heat. As the project includes the reuse of the existing roof trusses, the addition of solar panels is not feasible due to the increased load on the trusses.

On August 16, 2021, the City Council approved the schematic design for the project as shown below with the major change being the inclusion of a full roof for the entire length of the pavilion.
2021 – City Council approved revised schematic design with full roof.

Current Applications
Based upon the schematic design approval by the City Council in August 2021, the City of Healdsburg Community Services/Parks and Recreation Department submitted all the necessary City discretionary applications on January 31, 2022, to move the project forward through the formal public review and environmental review process. In December 2022, the Community Services/Parks and Recreation Department submitted the building permit application for the project.

On February 13, 2023, the CEQA Draft Mitigated Negative Declaration (Attachment 8) for the project was published and noticed for a 30-day public review period ending on March 14, 2023.

On March 14, 2023, the Planning Commission conducted a public hearing on the Foley Family Community Pavilion project and voted 6-0 to adopt resolutions approving the project (Design Review, Conditional Use Permit, Variance and Heritage Tree Permit) as proposed subject to the approval of the MND, MMRP, General Plan amendment, and Land Use Code amendment (rezoning) by the City Council.

SITE & VICINITY DESCRIPTION:

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The project site consists of three parcels totaling approximately 1.2 acres of relatively level land located at the northeast corner of North Street and Grove Street bounded by Foss Creek to the east and the SMART right-of-way and the Foss Creek Pathway to the west. The site contains a vacant 13,300 square foot structure known as the Cerri Brothers Warehouse Building constructed in 1922 on the western portion of the site adjacent to the SMART tracks. The center portion of the site includes three glossy privet trees (two of which are Heritage trees) and is partially developed with a gravel parking lot which is not currently in use. The eastern portion of the site includes the Harry and Maggie Wetzel Native Plant Garden and Foss Creek.

Adjacent uses include the Duchamp Hotel to the north, Little Saint Restaurant to the east, public parking lot across North Street to the south and City Hall across Grove Street to the west.

GENERAL PLAN AMENDMENT DISCUSSION/ANALYSIS:

The Healdsburg 2030 General Plan provides the framework for development within the City, which contains “Guiding Principles” expressing key City values, and 10 “Elements” identifying key goals, policies and implementing measures. The project site is located within the Downtown (DC) General Plan Land Use Designation as shown below which provides for a broad range of commercial and office uses, such as hotels, retail, restaurants, personal services, public and quasi-public uses when compatible with the overall purpose and character of the designation.

High Density Residential uses 10 to 16 units per acre may be permitted when clearly subordinate to allowable commercial uses on the same site and designed to minimize impacts on residents from noise and other elements typically associated with a thriving commercial area.

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The request before the City Council for a decision is a proposed General Plan amendment recommended for approval by the Planning Commission to redesignate the project site from DCDowntown Commercial to PQP-Public/Quasi Public. The proposed PQP designation shown above provides for government-owned facilities, public and private schools, parks, and quasipublic uses. New residential uses are prohibited, with the exception of transitional, supportive, and emergency housing facilities. The purpose of the General Plan amendment is to confirm previous decisions of the City Council which include the decision by the City Council in 2012 to designate the site as a park to allow for continued public-ownership of the three subject parcels, and the decision by the City Council in 2020 to move forward with a community pavilionfarmers market project rather than affordable housing.

General Plan Goals and Policies: The following are the most applicable General Plan goals and policies that apply to the project site and the proposed community pavilion-farmers market project:

NR-D-2 The City will support continuation of the local farmers market as an important part of the fabric and culture of the community.

NR-12 Support the continuation of local farmers markets.

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NR-13 Support efforts in Sonoma County to retain local agricultural land use activities.

NR-7c Encourage development proposals along Foss Creek to incorporate and enhance the creek.

NR-6 Continue to enforce the riparian requirements of the Zoning Ordinance.

NR-1 Develop and apply standard mitigation measures and conditions of approval on development permits to reduce siltation, sedimentation, and pollution discharge into receiving waterways, both pre- and post-construction.

PS-H-2 The City will plan for the acquisition and development of sites for the recreational needs of Healdsburg and the surrounding community.

General Plan Amendment Summary:

The proposed land use change to PQP-Public/Quasi Public formalizes and implements previous actions by the City Council based upon community input to rehabilitate the Cerri warehouse and transform the site into a public amenity that will benefit local farmers and the Healdsburg community consistent with City adopted goals and polices included in the General Plan. It is recommended by the Planning Commission that the City Council approve the General Plan Amendment to change the General Plan land use designation to PQP-Public/Quasi Public.

LAND USE CODE (ZONING) AMENDMENT DISCUSSION/ANALYSIS:

The purpose of the Land Use Code is to promote the public health, safety, and general welfare of the community and to implement policies contained in the Healdsburg General Plan. The project site is located within the CD-Downtown Commercial zoning district as shown below which is intended to maximize the efficiency of the City’s retail district, provide parking using public offstreet parking facilities, and foster the use of vacant buildings. The existing CD district allows a wide range of retail, service, office, and residential uses. The CD district is not intended to provide for public facilities other than parking lots and public utilities installation such as pumping and power stations, and therefore a rezoning is necessary to allow for the proposed public pavilion to be used for community events.

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The request before the City Council is for a proposed Land Use Code Amendment to rezone the project site from CD-Downtown Commercial to P-Public as shown above. The P district is included in the Land Use Code to provide a procedure for the orderly establishment of public and quasi-public facilities, the expansion of their operations, or change in the use of lands owned by governmental agencies. The major uses allowed by the P district include parks, public buildings and grounds, public schools, and public utility buildings and facilities.

Land Use Code Summary
The proposed zoning change to the P-Public district implements the proposed General Plan amendment to the PQP-Public/Quasi Public designation as discussed above. The P-Public district is the only zoning district included in the Land Use Code that implements the proposed PQP general plan designation, and therefore it is recommended by the Planning Commission that the City Council approve a rezoning of the site to the P-Public district.

ENVIRONMENTAL ANALYSIS:

A mitigated negative declaration (MND) has been prepared for the project in compliance with the California Environmental Quality Act. The MND assessed all the environmental factors related to the General Plan and Land Use Code amendments for the site and the development of the Foley Family Community Pavilion project and its operation. The MND was made available for a 30-day public review period from February 13, 2023, to March 14, 2023. The MND

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document has been provided as Attachment 8 and the resolution for adoption of the MND includes the Mitigation Monitoring and Reporting Program as Exhibit A of Attachment 1.

The MND has identified areas where mitigation was necessary to reduce potentially significant impacts to less than signficiant in the following areas: Air Quality, Biological Resources, Cultural Resources, Geology, Hazards, Noise, Transportation and Tribal Cultural. There were no impacts that required mitigation in the following areas: Aesthetics, Agriculture, Energy, Green House Emissions, Hydrology, Land Use, Minerals, Population, Public Services, Recreation, Utilities and Wildfire.

The MND has been supported by the following studies, which are included in the Appendix to the MND: Biological Resources Assessment & Arborist Reports; Historic Resource Evaluation; Geotechnical Report; Phase I & II Environmental Site Assessment; Acoustical Assessment; and Transportation Analysis. The more relative conclusions of the environmental assessment are summarized as follows:
• Aesthetics – As proposed, the project does not conflict with the established character of downtown Healdsburg. Modifications proposed by the project will increase pedestrian and public use at the site, increase shade and tree coverage, and overall will maintain the existing character of the site. The proposed project will result in minor alterations to the site, however, as a project proposing rehabilitation of an existing historic building, it will not substantially degrade the visual character of the neighborhood. Rather, the project as proposed, will introduce a public facility, and will improve the existing visual character of the site and adjacent street frontage. Therefore, the project will have a less than significant impact to the existing visual character and quality of the site and its surroundings.
• Biological Resources – Given that the site is comprised of an existing building and hardpacked gravel, there are no waters of the U.S. or State within the project development footprint. Foss Creek is considered a water of the U.S. and State; however, the project does not propose alterations to Foss Creek or its riparian corridor. The project proposes a minor encroachment within the 35-foot setback from top of bank of the creek, however, this area is currently used for parking and will remain as an area for vehicular circulation as part of the project. As such, impacts to jurisdictional waters as a result of the project will be less than significant. The Townsend’s big-eared bat, and White-tailed kite and Osprey are species of special concern and protected respectively and there is potential for these species to occur on the project site. Mitigation has been included (pre-construction surveys) to reduce the impact to less than significant. • Cultural Resources – As noted in the Historic Resource Evaluation prepared by Evans & De Shazo (Attachment 10), proposed modifications to the building and associated landscape meet the Standards for Rehabilitation and Reconstruction. Given the significance of the 1922 building to local and California history, the project shall comply with Mitigation Measure CUL-1, which requires installation of informational signage near or adjacent to the primary building façade and adjacent to the reconstructed loading

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dock (ADA ramp) along the east elevation. With implementation of Measure CUL-1, impacts to historical resources as a result of the project will be less than significant. • Hydrology – As proposed, the project includes permeable pavers which will allow for increased infiltration of stormwater on the project site. Though inundation of a portion of the project site could occur during a 100-year flood event, the risk of release of pollutants as a result of such inundation would be similar to existing conditions. As such, impacts resulting from inundation of the project site will be less than significant. • Land Use/Planning –The development has been found to be compatible with the proposed PQP land use designation and surrounding land uses which consist of commercial, lodging, public, and industrial uses within central Healdsburg. The site has been identified as suitable for community pavilion and public parking uses as the project will preserve and renovate a historically significant structure consistent with General Plan goals and policies. The proposed P zoning district implements the PQP general plan designation and allows for the public facility which will provide a community asset for events including the Healdsburg Certified Farmers’ Market. • Noise – The project will result in a temporary noise increase as a result of construction activities and a permanent increase in ambient noise at operation resulting from activities associated with the community pavilion use such as amplified and non-amplified music and talking, vehicle use, building and landscaping maintenance. Mitigation such as restricting the use of amplified music has been included to reduce noise resulting from the project that would impact noise-sensitive uses that consist of residences and lodging uses.
• Transportation – The proposed project does not conflict with any applicable plans, ordinances, or policies, and therefore, significant impacts to the circulation system are not expected. Special events that require the temporary closure of North Street will mitigate the impact through the approval of a traffic control plan subject to review by the City of Healdsburg Fire, Police, and Public Works Departments. While SMART is not currently providing passenger rail service to Healdsburg, the area along the railroad corridor immediately adjacent to the project site is shown as a potential location for a future SMART station with the city.

Conclusions
While it was found that the project could have a potentially significant effect in the areas above, there will not be a significant effect in this case because mitigation measures have been identified that would reduce those potentially significant effects to less than significant. A Mitigation Monitoring and Reporting Program (MMRP) (Attachment 1, Exhibit A) has been created to track the mitigation measures outlined in the MND, including when they are to be implemented and what department is responsible for ensure that mitigation is completed in accordance with the MND and MMRP. No comments were received on the MND.

PLANNING COMMISSION HEARING:

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At the March 14, 2023, Planning Commission Hearing, staff recommended that the Planning Commission approve the Foley Family Community Pavilion project applications subject to City Council approval of the MND, MMRP, General Plan amendment and Land Use Code amendment (rezoning). At the Hearing no one spoke in opposition to the project and no written comments were received. The Planning Commission closed the hearing and stated their support for the project and determined the following:
• The proposed project is consistent with all applicable policies and requirements of the General Plan and Land Use Code.
• The proposed project is consistent with the applicable Citywide Design Guidelines in that the project is consistent with the scale and character of central Healdsburg and maintains the character defining elements of the 1922 Cerri Warehouse. • The proposed project will not have a significant impact on the environment with the inclusion of mitigation measures.

The Planning Commission voted 6-0 to adopt the following resolutions:
1) PC Resolution No. 2023-09 recommending to the City Council adoption of the Mitigated Negative Declaration for the Foley Family Pavilion. (Attachment 4) 2) PC Resolution No. 2023-10 recommending to the City Council adoption of a General Plan Amendment GPA 2022-01 for the Foley Family Pavilion project site. (Attachment 5)
3) PC Resolution No. 2023-11 recommending to the City Council adoption of Land Use Code Amendment LUA 2022-01 for the Foley Family Pavilion project site. (Attachment 6)
4) PC Resolution No. 2023-12 approving Design Review DR 2022-03, Conditional Use Permit CUP 2022-02, Variance V 2022-01 and Heritage Tree Permit HT 2022-01 for the Foley Family Community Pavilion project subject to City Council adoption of the Mitigated Negative Declaration, and City Council approval of the General Plan amendment and Rezoning. (Attachment 7)
FISCAL INFORMATION:

The proposed actions will not have a direct fiscal impact. Appropriations for the completion of the Pavilion at 3 North Street Project were included in the adopted FY 22-23 budget. The total project budget of $7 million is funded by a donation from the Foley Family made to the Sonoma County Community Foundation.

Staff notes recent construction projects have come in significantly over initial budgets due to inflationary impacts on the construction industry and supply chain. Additional funding is likely to be required to complete the construction of the project as proposed. A budget amendment, if needed, will be presented for City Council approval prior to, or concurrent with, approval of a contract for construction of the project.

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ATTACHMENT(S):

Att 1 CC MND Resolution
Att 1 Exhibt A MMRP
Att 2 CC GPA Resolution
Att 3 CC LUC ordinance
Att 4 PC_Reso_2023-09
Att 5 PC_Reso_2023-10
Att 6 PC_Reso_2023-11
Att 7 PC_Reso_2023-12 (002)
Att 8 Public Draft IS MND - Foley Family Pavilion
Att 9 Arborist memo
Att 10 HRE Cerri Bros Warehouse Building Updated 12 2021 Att 11 -Design Review Complete Set (002)

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CITY COUNCIL
RESOLUTION NO. XX - 2023

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG ADOPTING A MITIGATED NEGATIVE

DECLARATION AND MITIGATION MONITORING AND

REPORTING PROGRAM FOR THE FOLEY FAMILY
COMMUNITY PAVILION LOCATED AT 3 NORTH STREET
(APNS 002-173-002, 003, AND 021)
WHEREAS, an application has been received from the City of Healdsburg Community Services/Parks and Recreation Department proposing a General Plan Amendment (GPA 2022- 01), Land Use Code Amendment (LUA 2022-01), Major Design Review (DR 2022-03), Conditional Use Permit (CUP 2022-02), Riparian Setback Variance (V 2022-01), and a Heritage Tree Permit (HT 2022-01), for a proposal to rehabilitate the existing, approximately 13,300 square foot warehouse building to accommodate a community events pavilion to provide space for the Healdsburg Certified Farmers’ Market and other community and private events on three contiguous parcels totaling 1.2 acres. The project will pave and stripe the existing gravel parking lot to include 42 surface public parking spaces. The project includes the removal of 2 Heritage trees; and
WHEREAS, the City of Healdsburg is the Lead Agency on the project and pursuant to Public Resources Code Section 21080.1 and Section 15063 of the CEQA Guidelines (Title14, California Code of Regulations), an Initial Study was prepared for the project to determine whether there are potentially significant effects on the environment attributable to the project; and
WHEREAS, based on information contained in the Initial Study, included in the project file, that any potential significant effects of the project could be avoided or reduced to less than significant with the addition of mitigation measures, a Mitigated Negative Declaration was prepared for the project and was circulated for a 30-day public and agency review period, from February 13, 2023, to March 14, 2023; and
WHEREAS, a Notice of Intent to Adopt the Initial Study and Mitigated Negative Declaration was published in the Press Democrat (a newspaper of general circulation in the area), mailed to property owners within 300 feet of the project boundary, posted on-site, posted at the Office of the Sonoma County Clerk, and circulated through the State Clearinghouse; and WHEREAS, the Mitigated Negative Declaration and supporting Initial Study were made available for public review during the public review period noted above; and WHEREAS, at a properly noticed public hearing on March 14, 2023, the Planning Commission reviewed the staff report, the MND (including appendices and any public and

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Packet Pg. 280 Attachment: Att 1 CC MND Resolution (4004 : Foley Family Pavilion) Resolution No. -2023