HerculesCA.gov
111 Civic Drive Hercules, CA 94547
___________, 2026
Eve Stewart
Satellite Affordable Housing Associates
1835 Alcatraz Avenue
Berkeley, CA 94703
Re: Sycamore Crossing
Commitment for $2,500,000 Loan
Dear Ms. Stewart:
This commitment letter (the "Commitment") will confirm that the City of Hercules, a California municipal corporation ("City"), is committed to loan to the Borrower (as defined below) Low and Moderate Income Housing Asset Funds, such loan (the "Loan") to be made substantially according to the terms and conditions outlined below:
Borrower: Satellite Affordable Housing Associates, a California nonprofit public benefit corporation ("SAHA") or an affiliate controlled by SAHA, will be the borrower of the Loan (the "Borrower").
Lender: City will be the lender of the Loan (the "Lender").
Loan Amount: The Loan amount will be Two Million Five Hundred Thousand Dollars ($2,500,000).
Interest Rate: The outstanding principal balance of the Loan shall bear interest at the rate of three percent (3%) simple interest, subject to default rate provisions.
September 8
HerculesCA.gov
111 Civic Drive Hercules, CA 94547
Loan Term: The Loan will have a term (the " Term") of 55 years from completion of construction of the Development (as defined below).
Timing of Loan: The Loan will be used for acquisition, construction and permanent financing of Sycamore Crossing, a proposed approximately one hundred (100) unit affordable housing development (the "Improvements"), to be constructed on that certain real property located in the City of Hercules, County of Contra Costa, California, APN 404-020-098-4 (the "Property"; and together with the Improvements, the "Development"). The Property is more specifically described in the attached Exhibit A.
Ownership: Borrower will own a fee interest in the Development.
Security: The Loan will be secured by a deed of trust on Borrower's fee interest in the Development (the "Deed of Trust"). The Deed of Trust may be subordinated to loans from institutional lenders and other public agencies in accordance with subordination provisions in the Loan Documents and pursuant to a form of subordination agreement acceptable to Lender in its reasonable discretion. The Loan and all obligations arising in connection with the Loan or the documents evidencing, describing or securing the Loan shall be a non- recourse obligation of the Borrower.
Affordable Housing Covenant; In addition to the Deed of Trust, the Borrower will enter into and record on the Property an Affordable Housing Covenant ("Regulatory Agreement") requiring that the rental units in the Development, other than a manger's unit, be restricted as Affordable Housing Units in accordance with the City's Affordable Housing Policy and California Health and Safety Code Section 34176.1 at income and rent levels to be determined by the Parties.
Payment: Payments on the Loan will be due annually from the Lender's share of 50% of residual receipts from the Development, provided, however, if other debt payable from residual receipts calculates the lender's share based on 75% of residual receipts, the Lender's share of residual receipts will be based on 75% of residual receipts. Lender's share of residual receipts shall be calculated in proportion to all debt incurred by the Borrower related to the Development that is payable from residual receipts. Residual Receipts shall mean the amount by which the Gross Revenue from the Development exceeds Annual Operating Expenses, as those terms are defined in the Loan Documents.
HerculesCA.gov
111 Civic Drive Hercules, CA 94547
Prepayments: Borrower shall have the right to prepay the Loan in full or in part at any time without penalty and any such prepayment shall reduce the amount of principal and interest due on the Loan, provided, however, following the closing of the construction financing for the Developer, prepayment shall not release the Borrower from continued compliance with the Regulatory Agreement. If Borrower is unable to secure construction financing for the Development and prepays the Loan in full, the City will release Borrower and the Property from the Regulatory Agreement.
Insurance: Borrower shall obtain policies of all-risk insurance with extended coverage, comprehensive general liability insurance, and such other insurance as Lender reasonably requires, in such amounts, in such form, with such companies, and with additional insureds endorsements, all as are reasonably acceptable to Lender.
Loan Documents: This Commitment does not set forth all of the terms, conditions, and documents that will be required by Lender in connection with the Loan. Lender shall not be obligated to close and fund the Loan unless and until Lender and Borrower have executed loan documents evidencing the Loan, including, without limitation, a promissory note, the Regulatory Agreement and the Deed of Trust (collectively, the "Loan Documents"). The Loan Documents shall include provisions viewed by Lender and its counsel as appropriate for this transaction and for transactions of this type.
Labor Standards; Borrower shall ensure that all contractors and subcontractors pay all workers performing work on the Development not less than the prevailing wage rates specified for the applicable craft classification in the wage determinations issued by the California Department of Industrial Relations for Contra Costa County, as such wage determinations exist on the date of building permit approval. Borrower shall comply with the apprenticeship requirements of AB 2011 to the extent feasible, and shall engage a labor compliance consultant to ensure no violations occur.
Other Documentation: Borrower shall deliver to Lender any further documentation reasonably required by Lender.
No Third Party Beneficiaries: This Commitment is solely for the benefit of Borrower and Lender and Borrower's approved successors and assigns, and shall not inure to the benefit of, or be relied upon by, any other person or entity.
HerculesCA.gov
111 Civic Drive Hercules, CA 94547
Waiver of Conditions: Lender in its sole discretion may waive or modify certain conditions or requirements of this Commitment, however, no waiver or modification of any such condition or requirement shall be deemed or construed to be a waiver of any other provision of this Commitment. No waiver shall be effective unless included in a writing signed by Lender.
Termination: Lender reserves the right to cancel this Commitment and terminate its obligations hereunder upon any material misrepresentation by Borrower in information and representations supplied by Borrower to Lender, or upon a material adverse change in the Borrower or the Development.
Please indicate your acceptance by signing the acknowledgement below.
Very truly yours,
City of Hercules
By: __________________________
Its: City Manager
HerculesCA.gov
111 Civic Drive Hercules, CA 94547
ACCEPTANCE OF COMMITMENT
This Commitment is approved and accepted as of _________, 2026.
BORROWER:
Satellite Affordable Housing Associates
By:____________________
Its:_____________________
Jonathan Astmann
Director, Real Estate Development
September 8
HerculesCA.gov
111 Civic Drive Hercules, CA 94547
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
All that certain real property situated in the City of Hercules, County of Contra Costa, State of California, described as follows:
Being all of Lot 1, as said Lot is described in Lot Line Adjustment 2017-01, recorded May 19, 2017, as Document Number 2017-0087541, of Contra Costa County Records;
Together therewith the following described land (transfer Parcel 1):
The following land as described in that Grant Deed recorded concurrently herewith, described as follows:
Beginning at the Southwesterly corner of said Lot 1;
Thence, from said point of beginning, along the Southerly line of said lot, North 87°43'07" East 69.78 feet;
Thence, leaving said Southerly line, South 06°05'00" West 18.14 feet; Thence, along the arc of a tangent 12.00 foot radius curve to the right, through a central angle of 76°27'10", an arc distance of 16.01 feet; Thence, South 82°32'10" West 19.12 feet;
Thence, North 82°41'00" West 41.23;
Thence, North 05°59'51" East 23.24 feet to said point of beginning.
Also together therewith the following described land (transfer Parcel 3); The following land as described in that Quitclaim Deed recorded concurrently herewith, described as follows:
HerculesCA.gov
111 Civic Drive Hercules, CA 94547
Beginning at an angle point on the Easterly line of said Lot 1, said point being the Southwesterly terminus of that course designated as "S47°24'07"W 279.04’" in said Lot Line Adjustment 2017-01;
Thence, from said point of beginning along said Easterly line of Lot 1 the following two (2) courses;
1. North 47°24'07" East 279.04 feet,
2. North 59°16'36" East 86.31 feet, to a point on the Southerly line of Sycamore Avenue;
Thence, Easterly along said Southerly line of Sycamore Avenue, on the arc of a non- tangent 400.00 foot radius curve to the right, from which the center of said curve bears South 12°20'09" West, through a central angle of 01°39'46", an arc distance of 11.61 feet;
Thence, leaving said Southerly line, South 63°39'04" West 44.16 feet; Thence, South 47°24'07" West 313.15 feet;
Thence, South 12°48'56" West 28.37 feet;
Thence, North 73°20'32" West 22.20 feet, to a point on said Easterly line of Lot 1; Thence, along said Easterly line, North 16°39'28" East 23.53 feet to said point of beginning.
Excepting therefrom the following described land (transfer Parcel 2):
The following land as described in that Grant Deed recorded concurrently herewith, described as follows:
Commencing at the Southwesterly corner of said Lot 1;
Thence, from said point of commencement, along the Southerly line of said lot, North 87°43'07" East 69.78 feet, to the point of beginning for this description; Thence, from said point of beginning, leaving said Southerly line, North 06°05'00" East 83.12 feet;
HerculesCA.gov
111 Civic Drive Hercules, CA 94547
Thence, South 83°54'20" East 15.73 feet;
Thence, along the arc of a tangent 16.00 foot radius curve to the left, through a central angle of 86°29'24", an arc distance of 24.15 feet; Thence, North 09°36'16" East 25.85 feet;
Thence, along the arc of a tangent 8.00 foot radius curve to the right, through a central angle of 14°24'46", an arc distance of 2.01 feet; Thence, North 24°01'02" East 5.44 feet;
Thence, South 73°20'32" East 5.50 feet, to a point on the Easterly line of said Lot 1; thence, along said Easterly line of Lot 1 the following two (2) courses;
1. South 16°39'28" West 129.79 feet;
2. South 87°43'07" West 17.11 feet to said point of beginning.
This legal description is made pursuant to that certain Certificate approving a Lot Line Adjustment, Certificate No. LLA #22-02, recorded April 17, 2023, as Instrument No. 2023-0035460 of Official Records.
APN: 404-020-098-4