Agenda packet, regular meeting — Palm Desert City Council, August 24, 2023 (part 1 of 4)

PALM DESERT CITY COUNCIL

MEETING AGENDA

Thursday, August 24, 2023
3:30 p.m.

Council Chamber, City Hall
73-510 Fred Waring Drive
Palm Desert, California

This is a joint meeting of the Palm Desert City Council, Successor Agency to the Palm Desert Redevelopment Agency, and the Palm Desert Housing Authority. Pursuant to Assembly Bill 2449, this meeting may be conducted as a hybrid meeting allowing public access via teleconference or in person, and up to two Councilmembers may attend remotely.

WATCH THE MEETING LIVE: Watch the City Council meeting live at the City’s website:
www.palmdesert.gov under the “Council Agenda” link at the top of the homepage, or on the City’s YouTube Channel.

OPTIONS FOR PARTICIPATING IN THIS MEETING:

If unable to attend the meeting in person, you may choose from the following options:

OPTION 1: VIA EMAIL
Send your comments by email to: [email protected].

Emails received prior to 10:00 a.m. on the day of the City Council meeting will be made part of the record and distributed to the City Council. Emails will not be read aloud at the meeting.

OPTION 2: LIVE VIA ZOOM
Access via palmdesert.gov/zoom or zoom.us, click “Join Meeting” and enter Webinar ID 833 6744 9572.

1. OPTION 3: LIVE VIA TELEPHONE

1. (213) 338-8477 and enter Meeting ID 833 6744 9572 followed by #.

2. Indicate that you are a participant by pressing # to continue.

During the meeting, press *9 to add yourself to the queue and wait for the Mayor or City Clerk to announce your name/phone number. Press *6 to unmute your line and limit your comments to three minutes.

3. Pages

1. CALL TO ORDER - CLOSED SESSION - 3:30 P.M.

2. PUBLIC COMMENT FOR CLOSED SESSION ITEMS ONLY
This time has been set aside for members of the public to address the City Council on items contained only on the Closed Session Agenda within the threeminute time limit. Speakers may utilize one of the options listed on the first page of this agenda.

3. RECESS TO CLOSED SESSION

4. CLOSED SESSION AGENDA
RECOMMENDATION:

The following items will be considered in closed session.

4.a Closed Session Meeting Minutes: July 13, 2023

4.b Conference with Real Property Negotiations pursuant to Government Code Section 54956.8

4.b.1 PROPERTY DESCRIPTION: 73710 FRED WARING DRIVE, SUITE 135
Agency: City of Palm Desert
City Negotiator: Todd Hileman/Chris Escobedo/Eric Ceja
Negotiating Parties: Desert Recreation District
Under Negotiation: Price and Terms

4.b.2 PROPERTY DESCRIPTION: 45656 MOUNTAIN VIEW AVENUE
Agency: City of Palm Desert
City Negotiator: Todd Hileman/Chris Escobedo/Eric Ceja
Negotiating Parties: Maureen Gage and Steven Yinger
Under Negotiation: Price and Terms

4.b.3 PROPERTY DESCRIPTION: DESERT WILLOW LOT PAD A (APN 620- 400-025)
Agency: Successor Agency
City Negotiator: Todd Hileman/Chris Escobedo/Eric Ceja
Negotiating Parties: City of Palm Desert
Under Negotiation: Price and Terms

5. ROLL CALL - REGULAR MEETING - 4:00 P.M.

6. PLEDGE OF ALLEGIANCE
Councilmember Harnik

7. INSPIRATION
Mayor Pro Tem Quintanilla

8. REPORT OF CLOSED SESSION
City Attorney Hargreaves
City Council Meeting

Page 2 of 852 ends

9. AWARDS, PRESENTATIONS, AND APPOINTMENTS

9.a PROCLAMATION - DR. VINES DAY 13

10. CITY MANAGER COMMENTS 15

11. MAYOR/COUNCILMEMBER REPORTS AND REQUESTS FOR ACTION

12. NONAGENDA PUBLIC COMMENTS 35
This time has been set aside for the public to address the City Council on issues that are not on the agenda for up to three minutes. Speakers may utilize one of the options listed on the first page of the agenda. Because the Brown Act does not allow the City Council to act on items not listed on the agenda, members may briefly respond or refer the matter to staff for a report and recommendation at a future meeting.

13. CONSENT CALENDAR
All matters listed on the Consent Calendar are considered routine and may be approved by one motion. The public may comment on any items on the Consent Agenda within the three-minute time limit. Individual items may be removed by the City Council for a separate discussion.

13.a APPROVAL OF CITY COUNCIL, SUCCESSOR AGENCY, AND

HOUSING AUTHORITY MINUTES
71 RECOMMENDATION:

Approve the Minutes of July 13, 2023.

13.b APPROVAL OF WARRANTS 83
RECOMMENDATION:

Approve the warrants issued for the period 4/17/2023 to 8/11/2023.

13.c RECEIVE AND FILE APPLICATIONS FOR ALCOHOLIC BEVERAGE

LICENSES
187
RECOMMENDATION:

Receive and file the applications for Alcoholic Beverage Licenses for the following businesses:

1. MR BS SUBS, LLC. 74600 HIGHWAY 111 Ste F
LA PRO Visions, Inc; LA PROVENCE PATISSERIE 72785 Hwy
111 Ste B1

2. 3. CEC Entertainment; Chuck E Cheese's 72513 Hwy 111 Ste H

4. Palm Desert Harmony, Inc.; Pokehana 73405 Hwy 111 Ste 104

13.d ACCEPT RESIGNATIONS FROM THE CIVIC ENGAGEMENT

COMMITTEE, CULTURAL ARTS COMMITTEE, AND PARKS AND

RECREATION COMMITTEE
203
RECOMMENDATION:

With regret, accept the resignations of Anyse Smith from the Civic Engagement Committee; Debra Norby (Alternate) from the Cultural Arts Committee; and James Henderson from the Parks and Recreation Committee.

City Council Meeting

Page 3 of 852 ends

13.e HOUSING AUTHORITY: RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A HOUSING AND LOAN AGREEMENT WITH A0358 MONTEREY, L.P., APPROVING A LOAN IN THE AMOUNT OF
$7,235,000 FOR CONSTRUCTION OF 176 AFFORDABLE HOUSING

UNITS AND RELATED ACTIONS
205
RECOMMENDATION:

Approve a Resolution authorizing the execution and delivery of a Loan Agreement, Deed of Trust, Secured Promissory Note and Housing Agreement, in substantial form, between the Palm Desert Housing Authority and A0358 Monterey, L.P., a California Limited Partnership, and approving a loan in the amount of Seven Million Two Hundred Thirty-Five Thousand Dollars ($7,235,000.00) from the Authority’s Low and Moderate Income Housing Asset Fund to fund the construction of One-Hundred Thirty Nine (139) of the One-Hundred Seventy Four (174) affordable housing units comprising the proposed apartment project.

1. Authorize the Chairman and/or Executive Director, in consultation with legal counsel, to execute as appropriate and deliver, for and in the name of the Authority, the Loan Agreement, Deed of Trust, Secured Promissory Note and Housing Agreement presented to the Authority Board at this meeting, as the same may be modified by the Executive Director in consultation with legal counsel to the Authority, provided such modifications are materially consistent with the purpose of the Resolution.

2. Authorize the Chairman, the Executive Director, or their respective designees, in consultation with legal counsel to the Authority, to execute and deliver, for and in the name of the Authority, all other necessary or proper documents and instruments, and to do all things which they may deem necessary or proper to effectuate the purposes of the Resolution.

3. 13.f APPROVE SECOND AMENDMENT TO THE EL PASEO PARKING &

BUSINESS IMPROVEMENT DISTRICT CONTRACT WITH FG CREATIVE 317
RECOMMENDATION:

Authorize Amendment No. 2 to El Paseo Parking and Business Improvement District (EPPBID) contract C43370 with FG Creative in the amount of $250,000 for Fiscal Year (FY) 2023/24.

1. Authorize the City Attorney to make non-substantive changes to the contract.

2. Authorize the City Manager to execute the agreement on behalf of the City.

3. City Council Meeting

Page 4 of 852 ends

13.g APPROVE A HOUSING AGREEMENT BY AND BETWEEN THE CITY OF PALM DESERT AND A0358 MONTEREY, LP, FOR THE CROSSINGS AT

PALM DESERT APARTMENTS PROJECT
359
RECOMMENDATION:

Approve the attached Housing Agreement by and between the City of Palm Desert and A0358 Monterey, a California Limited Partnership, (“Owner”), in accordance with the conditions of approval of the development, of 176 units known as The Crossings at Palm Desert Apartments, a multifamily rental housing project located at the southeast corner of Dick Kelly Drive, Palm Desert, California (the “Project”).

1. Authorize the City Manager or his designee, to finalize the Housing Agreement, and the documents described in the Agreement or otherwise deemed necessary or proper to effectuate the Housing Agreement and conditions of approval, with such changes thereto as the City Manager or his designee, in consultation with the City’s legal counsel, may deem appropriate or necessary and consistent with the purposes of the Housing Agreement and conditions of approval, with such approval to be conclusively evidenced by the execution and delivery thereof.

2. Authorize the Mayor and/or City Manager or their designee, to execute and deliver, for and in the name of the City, the Housing Agreement and other documents, as described in
Recommendation No. 2, and authorize the City Clerk to record the Housing Agreement.

3. 13.h APPOINT AMY LAWRENCE TO THE COACHELLA VALLEY ECONOMIC

PARTNERSHIP'S BOARD OF DIRECTORS
405
RECOMMENDATION:

Appoint Amy Lawrence to the Coachella Valley Economic Partnership’s Board of Directors.

13.i APPROVE OUT-OF-STATE TRAVEL FOR PUBLIC AFFAIRS MANAGER

FOR STRATEGIC MARKETING PLANNING IN AUSTIN, TX
407
RECOMMENDATION:

Authorize out-of-state travel for the Public Affairs Manager to travel to Austin, TX, for an in-depth strategic planning session with the City’s creative agency, Idea Peddler.

13.j REQUEST FOR MAYOR PRO TEM QUINTANILLA TO PARTICIPATE IN THE 2024 LEADERSHIP COACHELLA VALLEY PROGRAM
409
RECOMMENDATION:

Approve an expenditure in the amount of $1,200 for Mayor Pro Tem Quintanilla to participate in the 2024 Leadership Coachella Valley program.

City Council Meeting

Page 5 of 852 ends

13.k CITY COUNCIL AND HOUSING AUTHORITY: APPROVE DOWN
PAYMENT ASSISTANCE LOAN FROM THE LOW-AND MODERATEINCOME HOUSING ASSET FUND TO CONTINUE AN AFFORDABLE HOUSING COST FOR THE HOMEOWNERS AT 75-476 WILDFLOWER
LANE
417
RECOMMENDATION:

Approve the issuance of a silent down-payment assistance loan by the Palm Desert Housing Authority pursuant to the Desert Rose Sales Program and standard documents, in the amount of $30,000 to continue an affordable housing cost for the homeowners at 75- 476 Wildflower Lane pursuant to California Health and Safety Code Section 50052.5 as a qualified low- or moderate-income household from the Low- and Moderate-Income Housing Asset Fund.

1. Authorize the release of the City’s Deed of Trust recorded December 7, 2012, securing the promissory note for the existing silent down payment BEGIN loan.

2. Authorize waiving the interest on the homeowner’s existing City Loan from the original date the City’s Deed of Trust recorded on December 7, 2012, through the date of release.

3. Approve the Palm Desert Housing Authority’s Housing Asset Fund down payment assistance loan term to be forgivable 30 years from the original City Loan recording of December 7, 2012, so long as all terms of the loan are met by the homeowners.

4. Authorize Director of Finance to transfer $30,000 from the Homebuyer Down Payment Assistance Account No. 8734699-
4400100 and reimburse the City in BEGIN Fund.

5. Authorize the City Manager/Executive Director, or designee, to execute, release, and finalize any documents necessary to effectuate the actions taken herewith.

6. 13.l RELEASE GRADING BOND AND REDUCE THE FAITHFUL
PERFORMANCE AND LABOR AND MATERIALS BONDS FOR TR 37993,

MONTAGE
419
RECOMMENDATION:

Reduce the Faithful Performance and Labor and Materials Bonds for TR 37993.

1. 2. Release the Grading Bond in the full amount of $186,906.

City Council Meeting

Page 6 of 852 ends

13.m AWARD A CONTRACT TO DESERT AIR CONDITIONING, INC., FOR

HEATING, VENTILATION, AND AIR CONDITIONING PREVENTATIVE MAINTENANCE IN THE ANNUAL AMOUNT OF $106,028 (PROJECT NO.

MFA00008)
439
RECOMMENDATION:

Waive any minor proposal irregularities and award a contract to Desert Air Conditioning, Inc., for the Heating, Ventilation and Air Conditioning (HVAC) Preventative Maintenance in the annual amount of $106,028.

1. Authorize extra work and services for HVAC repairs and replacements up to the annual amount of $75,000.

2. Authorize the City Manager or designee to approve up to two, oneyear contract amendments/extensions.3.

Authorize the City Manager or designee to review and approve change orders for any unforeseen circumstances per Section

3.30.170 of Ordinance No. 1392.

4. Authorize the City Attorney to make any necessary, non-monetary changes to the Agreement and the authorize the City Manager to execute said agreement.

5. 13.n RESOLUTION AUTHORIZING DESTRUCTION OF OBSOLETE

RECORDS FROM THE FINANCE DEPARTMENT AND HUMAN

RESOURCES DEPARTMENT
549
RECOMMENDATION:

Adopt a Resolution authorizing the destruction of obsolete records from the Finance Department and Human Resources Department pursuant to California Government Code Section 34090.

13.o AWARD ON-CALL CONTRACTS TO MULTIPLE VENDORS FOR PARK

AND FACILITIES REPAIRS AND IMPROVEMENT PROJECTS
555
RECOMMENDATION:

Pursuant to PDMC Section 3.30.160(I), award Contract No.

C44620D to R&R B Inc. dba Servpro of Chino/Chino Hills, Chino, California and Contract No. C44620E to Doug Wall Construction, Bermuda Dunes, California for Park and Facilities Repairs and Improvements, for a period of three (3) years in an aggregate amount not to exceed $3,000,000 per fiscal year.

1. Authorize the City Manager to review and approve up to two (2) additional one-year terms per contract for an aggregated amount not to exceed $3,000,000 per fiscal year.

2. Authorize the City Manager or designee to review and approve change orders for unforeseen circumstances.

3. 4. Authorize the City Manager to execute said agreements.

City Council Meeting

Page 7 of 852 ends

14. ACTION CALENDAR
The public may comment on individual Action Items within the three-minute time limit. Speakers may utilize one of the options listed on the first page of the agenda.

14.a APPROVAL OF AN AGREEMENT FOR LAW ENFORCEMENT

SERVICES BETWEEN THE CITY OF PALM DESERT AND THE COUNTY OF RIVERSIDE FOR A THREE-YEAR TERM FROM FY2024/2025 TO
FY2026/2027
669
RECOMMENDATION:

Approve Agreement for Law Enforcement Services with the County of Riverside for a three-year term effective from July 1, 2024, through June 30, 2027.

1. Authorize the City Attorney to make any necessary, non-monetary changes to the Agreement.

2. Authorize the Mayor to execute the Agreement and any documents necessary to effectuate and implement the actions taken herewith.

3. 14.b PALM DESERT REDISTRICTING 2023 - REVIEW OF THE SCHEDULE

OF PUBLIC HEARINGS/WORKSHOPS AND PUBLIC EDUCATION AND
OUTREACH PLAN – OPTIONAL PROCESSES FOR ESTABLISHING

DISTRICT BOUNDARIES
693
RECOMMENDATION:

Approve the Public Education and Outreach Plan & Schedule of Public Hearings/Workshops.

1. Provide direction relative to optional processes for establishing district boundaries.

2. 14.c INTRODUCTION OF AN ORDINANCE UPDATING CHAPTER 8.20 OF

THE PALM DESERT MUNICIPAL CODE UPDATING PUBLIC NUISANCE

ABATEMENT AND COST RECOVERY PROCEDURES, AND MAKING A

FINDING OF EXEMPTION UNDER CEQA
739
RECOMMENDATION:

Waive full reading and introduce Ordinance entitled “An Ordinance of the City Council of the City of Palm Desert, California Updating Chapter 8.20 of the Palm Desert Municipal Code Regarding Public Nuisance Abatement and Cost Recovery Procedures, and Making a Finding of Exemption Under CEQA”
City Council Meeting

Page 8 of 852 ends

14.d REQUEST FOR FEEDBACK AND DIRECTION REGARDING UPDATING CHAPTER 5.04 REGARDING MODIFICATION, SUSPENSION, OR

REVOCATION OF BUSINESS LICENSES
757
RECOMMENDATION:

Approve staff recommendation that the City Manager be
authorized to suspend a business license and unless appealed within seven (7) calendar days upon receiving the suspension notice, the suspension would automatically convert to a revocation.

1. Provide direction to staff on whether the appeal body for a business license suspension should remain with City Council or be delegated to a hearing examiner.

2. 15. PUBLIC HEARINGS
The public may comment on individual Public Hearing Items within the threeminute time limit. The applicant or appellant will be provided up to five minutes to make their presentation. Speakers may utilize one of the options listed on the first page of this agenda.

15.a JOINT CITY COUNCIL AND HOUSING AUTHORITY PUBLIC HEARING

TO CONSIDER REMOVAL OF BLAIR ARMSTRONG FROM THE PALM

DESERT HOUSING COMMISSION IN ACCORDANCE WITH HEALTH
AND SAFETY CODE SECTION 34282
767
RECOMMENDATION:

Pursuant to Health and Safety Code Section 34282, conduct a hearing on the removal of Blair Armstrong from the Palm Desert Housing Commission.

1. Find Blair Armstrong to be in neglect of duty of his obligations as a Housing Commissioner and remove him from the Palm Desert Housing Commission, effective immediately.

2. City Council Meeting

Page 9 of 852 ends

15.b RESOLUTION: APPROVE A PROPOSED PLAN FOR BOND ISSUANCE

BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT

AUTHORITY FOR THE CROSSINGS AT PALM DESERT APARTMENT

PROJECT
773
RECOMMENDATION:

Conduct the public hearing under the requirements of Tax and Equity Fiscal Responsibility Act (“TEFRA”) and the Internal Revenue Code of 1986, as amended (the “Code”) in connection with the proposed issuance in one or more series of revenue bonds by the California Statewide Communities Development Authority (“CSCDA”), a joint exercise of powers authority and public entity of the State of California, in an amount not to exceed Sixty Million Dollars $60,000,000.00 (the “Bonds”), to finance the acquisition, construction and development of the 176-unit Crossings at Palm Desert Apartments, a multifamily rental housing project located at located at the southeast corner of Dick Kelly Drive & Gateway Drive, Palm Desert, California (the “Project”) and receive public comments.

1. Adopt Resolution in the form attached hereto approving the issuance of the Bonds by CSCDA for the benefit of A0357 Palm Desert, L.P., a California Limited Partnership (the "Borrower") a partnership of which Urban Housing Communities, LLC (the "Developer") or a related person to the Developer is the general partner, to provide for the financing of the Project. Such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code and California Government Code Sections 6500 et seq.

2. 15.c ORDINANCE TO CHANGE THE ZONING DESIGNATION OF PARCEL 1 OF PARCEL MAP NO. 36614, LOCATED APPROX. 500 FEET FROM NW CORNER OF HWY 111 AND FRED WARING DR. FROM RESORT
COMMERCIAL CENTER (PC-4) TO DISTRICT COMMERCIAL CENTER
(PC-2) - CEQA FINDING
787
RECOMMENDATION:

Waive full reading and introduce Ordinance entitled “An Ordinance of the City Council of the City of Palm Desert, California, adopting a Notice of Exemption pursuant to California Environmental Quality Act (CEQA) and approving a Change of Zone from PC-4 to PC-2 for the property located on Parcel 1 of Parcel Map No. 36614 at 72221 Highway 111 (Assessor's Parcel Number 640-020-054)”
City Council Meeting

Page 10 of 852 ends

15.d CONSIDER APPROVAL OF A TRANSIENT OCCUPANCY TAX SHARING

AGREEMENT BETWEEN THE CITY OF PALM DESERT AND NEWAGE

DESERT SPRINGS, LLC
833
RECOMMENDATION:

Approve the DRAFT Transient Occupancy Tax (TOT) Sharing Agreement between the City of Palm Desert and Newage Desert Springs, LLC remitting 50% of incremental TOT generation not to exceed $10 million to the property owner for the development and expansion of conference/ballroom space at the JW Marriott Desert Springs.

1. Authorize the City Attorney to make non-substantive changes to the Agreement.

2. 3. Authorize the City Manager to execute said Agreement.

16. INFORMATION ITEMS

17. ADJOURNMENT
City Council Meeting

Page 11 of 852 ends

18. PUBLIC NOTICES
Agenda Related Materials: Pursuant to Government Code §54957.5(b)(2) the designated office for inspection of records in connection with this meeting is the Office of the City Clerk, Palm Desert Civic Center, 73-510 Fred Waring Drive, Palm Desert. Staff reports for all agenda items considered in open session, and documents provided to a majority of the legislative bodies are available for public inspection at City Hall and on the City’s website at www.palmdesert.gov by clicking “Council Agenda” at the top of the page.

Americans with Disabilities Act: It is the intention of the City of Palm Desert to comply with the Americans with Disabilities Act (ADA) in all respects. If, as an attendee or a participant at this meeting, or in meetings on a regular basis, you will need special assistance beyond what is normally provided, the City will attempt to accommodate you in every reasonable manner. Please contact the Office of the City Clerk, (760) 346-0611, at least 48 hours prior to the meeting to inform us of your needs and to determine if accommodation is feasible.

AFFIDAVIT OF POSTING
I, Níamh M. Ortega, Assistant City Clerk of the City of Palm Desert, do hereby certify, under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Palm Desert City Council, Successor Agency for the Palm Desert Redevelopment Agency, and Housing Authority, was posted on the City Hall bulletin board and City website www.palmdesert.gov no less than 72 hours prior to the meeting.
/S/ Níamh M. Ortega
Assistant City Clerk
City Council Meeting

Page 12 of 852 ends

WHEREAS, Diane Vines came to the Coachella Valley with vast experience in nursing, nursing administration, education and mental health, including teaching appointments at prestigious universities, service as a community psychiatric nurse and leadership of the street medicine program at the University of Portland; and
WHEREAS, for the past four years, Dr. Vines has put all this experience to work as the Director and Principal Investigator for the CSUSB Nursing Street Medicine Program in the Coachella Valley and San Bernadino; and WHEREAS, the unique program infuses nurse trainees with deep appreciation for the needs of unhoused persons and the sensitivity to address those needs; and
WHEREAS, Dr. Vines’ leadership will have positive ripples of influence in the delivery of medical services and caregiving offered by her students for years to come;
NOW, THEREFORE, I, Kathleen Kelly, Mayor of the
City of Palm Desert, and the entire City Council, do hereby recognize August 24, 2023, as
Dr. Diane Vines Day

and urge all citizens to join me in extending our congratulations and appreciation for her dedicated service to our community.

In Witness Whereof, I have hereunto set my hand
and have caused the Official Seal of the City of
Palm Desert, California, to be affixed this 24th day
of August 2023.

Page 13 of 851 ends

Page 14 of 851 ends

50TH ANNIVERSARY

CELEBRATION
UPDATE

Page 15 of 851 ends

EVENT

DETAILS
o Saturday, November 18,
2023 – 3 p.m. to 10 p.m.
o Palm Desert Civic Center
Park
o Palm Springs Life
producing the event

Page 16 of 851 ends

PROGRAMMING
o Live Entertainment
o Art Installations
o Food Trucks / Beer & Wine
Garden
o Taste of Palm Desert
o Best of Palm Desert
o Kids Activities
o Storytelling

Page 17 of 851 ends

PROPOSED PARTNERS/SPONSORS
*NOT COMPLETE LIST
o Palm Desert Historical Society
o McCallum Theatre
o The Living Desert Zoo and Gardens
o Palm Desert Area Chamber of Commerce
o Burrtec Waste and Recycling Services
o College of the Desert
o UCR Palm Desert Campus
o CSUSB – Palm Desert
o Acrisure Arena
o Coachella Valley Firebirds
o JW Marriott
o Renova Energy
o El Paseo Businesses
o The Gardens on El Paseo
o The Shops at Palm Desert
o Shadow Mountain Golf Club
o Family YMCA of the Desert
o Desert Recreation District
o Artists Center at the Galen
o Flat Black Art Supply

Page 18 of 851 ends

FUTURE UPDATES
• Event Name/Branding
• Announcement of
Entertainment/Artists
• Secured Partnerships/Sponsors
• Marketing/Promotion Plan

Page 19 of 851 ends

Page 20 of 851 ends

PALM DESERT RESPONDS

TO HURRICANE HILARY

Page 21 of 851 ends

BEFORE THE STORM:
• Emergency Operations Center Activated
• Communications Strategy
• New webpage created, updated
every 30 minutes during and after
the storm
• Press release sent to media, and
newsletters were sent to residents,
businesses, and HOAs on resources
• Message and flyer sent to all PDHA
tenants
• Twitter, Facebook, Nextdoor,
updates, roughly every 20
minutes throughout the storm
• Positive public perception of the
City’s response to the storm
Sandbag Distribution
Civic Center Park
8/19/2023 Page 22 of 851
3 PUBLIC WORKS

RESPONSE
Cook Street
• Distributed over 50,000 sandbags to residents
• 35 City staff activated
• Administrative staff
• All Street team activated
• All Landscape team activated
• Roughly 300 tons of sand provided
• Checked all roadway drainage systems and turned off
irrigation to parks and city property
• Prepared all storm equipment: chainsaws, pumps, rain
gear
• Prepared traffic control in preparation for road
closures Page 23 of 851
WHAT

OCCURRED

DURING THE
STORM • Hurricane Hilary
caused widespread
flooding due to heavy
rainfall
• City staff quickly
coordinated a
response plan and
held regular Zoom
meetings, enabling
efficient collaboration
on our strategy
Freedom Park El Paseo & 111
Grapevine Street

Page 24 of 851 ends

FLOOD MITIGATION

INFRASTRUCTURE

WORKED AS IT
SHOULD
Cook Street at
Whitewater Channel
Retention Basin Near
Hovley Lane West

Page 25 of 851 ends

INCLUDING
RECENT

INVESTMENTS
Whitestone Lane
Before: 2016
Whitestone Lane
During Storm: 2023

Page 26 of 851 ends

Post
-Storm
Assessment • Park issues • Flooding • Damage to park
structures
• Landscape • Damage to
approximately 300
to 400 trees
• Street issues • Flooding & trees on
roadways
• Traffic signals
Fred Waring
Freedom Park
University Park East
NE Corner of
Freedom Park Page 27 of 851

SPANISH
WALK
• City and Riverside County Fire notified of a
major drainage channel topping its berm
and flooding the Spanish Walk
neighborhood
• 34 homes red-tagged for life and safety
purposes
• City staff transported displaced residents by
vans loaned from Family YMCA of the
Desert
• City found temporary shelter for displaced
residents and provided food and drinks
Paseo Bravo Looking
Southeast
Flood on Paseo Bravo

Page 28 of 851 ends

SPANISH WALK SINCE

THE STORM
• A new temporary berm structure was
created northwest of the community
• Community drained of water and
streets cleaned of mud and debris
• Ongoing assessment for other
mitigation efforts
Clean Up Efforts on
Paseo Bravo

Page 29 of 851 ends

MAJOR TROUBLE
SPOTS
• Channel at Spanish Walk / clean up
• Berm / Regional solutions
• Cook & Gerald Ford
• Gerald Ford and Frank Sinatra
• Looking for permanent solutions to low points in roads • Traffic signal outages
Gerald Ford at Cook
Fred Waring at Tenn.

Gerald Ford

Page 30 of 851 ends

STRATEGY FOR

PARKS REOPENING
• Pumps to dewater
flooded areas
• Landscape
Contractors on
cleanup and debris
removal
• Inspect electrical,
irrigation, and
playground
equipment
Freedom Park
Magnesia Falls Park
Civic Center Park

Page 31 of 851 ends

NEXT STEPS
12 • Prioritize remediation efforts
• Comprehensive drainage study
• Expedite Section 29 Drainage Basin Project
• Methods of possible reimbursement
• Talked to CJPIA regarding
reimbursements for city-owned assets
• Taking steps to pursue State or federal
funds
Hovley Soccer Park

Page 32 of 851 ends

THANKS TO OUR STAFF
& VENDORS
• All City staff who supported storm
preparation and remediation efforts:
• Public Works
• Capital Improvements
• Landscape
• Streets Team
• Facilities
• Emergency Services Coordinator
• Communications
• And our fast-acting vendors:
• Family YMCA of the Desert
• Granite Construction
• Tri-Star Construction
• CTI
• West Coast Arborists
• Residence Inn by Marriott
• Burrtec
• Wilcorp

Page 33 of 851 ends

Page 34 of 851 ends

Page 35 of 851 ends

Page 36 of 851 ends

Page 37 of 851 ends

Page 38 of 851 ends

Page 39 of 851 ends

Page 40 of 851 ends

Page 41 of 851 ends

Page 42 of 851 ends

Page 43 of 851 ends

Page 44 of 851 ends

Page 45 of 851 ends

Page 46 of 851 ends

Page 47 of 851 ends

Page 48 of 851 ends

Page 49 of 851 ends

Page 50 of 851 ends

Page 51 of 851 ends

Page 52 of 851 ends

Page 53 of 851 ends

Page 54 of 851 ends

Page 55 of 851 ends

Page 56 of 851 ends

Page 57 of 851 ends

Page 58 of 851 ends

Page 59 of 851 ends

Page 60 of 851 ends

Page 61 of 851 ends

Page 62 of 851 ends

Page 63 of 851 ends

Page 64 of 851 ends

Page 65 of 851 ends

Page 66 of 851 ends

Page 67 of 851 ends

Page 68 of 851 ends

Page 69 of 851 ends

Page 70 of 851 ends

Palm Desert City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority
Regular Meeting Minutes
July 13, 2023, 3:15 p.m.

Present: Councilmembers Jan Harnik, Gina Nestande*, and Evan Trubee; Mayor Pro Tem Karina Quintanilla*; and Mayor Kathleen Kelly *Mayor Pro Tem Quintanilla and Councilmember Nestande remote participated in accordance with AB 2449.

1. CALL TO ORDER - CLOSED SESSION - 3:15 P.M.

A Regular Meeting of the Palm Desert City Council was called to order by Mayor Kelly on Thursday, July 13, 2023, at 3:15 p.m. in the Council Chamber, City Hall, located at 73- 510 Fred Waring Drive, Palm Desert, California.

2. PUBLIC COMMENT FOR CLOSED SESSION ITEMS ONLY

3. RECESS TO CLOSED SESSION
Mayor Kelly adjourned to Closed Session at 3:16 p.m.

4. CLOSED SESSION AGENDA

4.a Closed Session Meeting Minutes: June 22, 2023

4.b Conference with Real Property Negotiations pursuant to Government Code Section 54956.8:

4.b.1 Property Description: 72-559 Highway 111

4.b.2 Property Description: 9002 Shadow Ridge Road

4.c Conference with Legal Counsel regarding Significant Exposure to Litigation pursuant to Government Code Section 54956.9(d)(2):

5. ROLL CALL - REGULAR MEETING - 4:00 P.M.

Mayor Kelly reconvened the regular meeting at 4:00 p.m.

6. PLEDGE OF ALLEGIANCE
Councilmember Nestande led the Pledge of Allegiance.

7. INSPIRATION
Councilmember Harnik offered words of inspiration.

8. REPORT OF CLOSED SESSION
Assistant City Attorney Shah stated that direction was given by the City Council; no reportable actions were taken.

Page 71 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
2 9. AWARDS, PRESENTATIONS, AND APPOINTMENTS
None.

10. CITY MANAGER COMMENTS

10.a FOURTH OF JULY CELEBRATION UPDATE
Deputy Director of Economic Development Lawrence provided a report of the event and thanked the City's partners for their support and participation. Mayor Kelly expressed her appreciation for staff who worked the event.

10.b OUTDOOR WORKER APPRECIATION DAY
Public Works Director Alvarez noted that July 17-23 would be recognized as Outdoor Worker Appreciation Week, and thanked staff in a variety of divisions who provide service to the community on an ongoing basis.

11. MAYOR/COUNCILMEMBER REPORTS AND REQUESTS FOR ACTION Councilmembers reported on their attendance at various meetings and events.

Councilmember Harnik reported a $1.3B grant for the I-10 trade corridor and that CVAG would be leading the project. She reminded residents to check on their neighbors during this time of extreme heat; reminded to donate blood through August 31, Nine Cities Challenge. Councilmember Trubee reminded the public the inaugural Library Taskforce meeting will take place in the following week. Mayor Kelly requested on April 27, 2019, unanimously observed that the various downtown overlay districts were not serving to implement the General Plan, particularly in regard to heights. Want staff assessment of how well the overlay districts are functioning, and provide recommendations for alternatives. Supported by all Councilmembers.

12. NON-AGENDA PUBLIC COMMENTS
Barbara Wasserkrug, Palm Desert resident, spoke in opposition to the use of FLOCK license plate readers in the city. Mayor Kelly requested a summary in the weekly report regarding the safeguards in place.

13. CONSENT CALENDAR
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Approve the consent calendar as presented.

Motion Carried (5 to 0)

13.a APPROVAL OF CITY COUNCIL, SUCCESSOR AGENCY, AND HOUSING

AUTHORITY MINUTES
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Approve the Minutes of June 22, 2023.

Motion Carried

Page 72 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
3 13.b APPROVAL OF WARRANTS
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Approve the warrants issued for the period January 14 through June 30, 2023.

Motion Carried

13.c APPROVE SPONSORSHIP FOR CELEBRATE CV EVENT
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Approve sponsorship in the amount of $25,000 for the Celebrate CV event scheduled for December 30, 2023.

2. Authorize the Director of Finance to appropriate $25,000 to Account No. 1104800-4306201, from available General Fund Reserves.

Motion Carried

13.d APPROVE REVISIONS TO THE CITY OF PALM DESERT'S PUBLIC ART

DEACCESSIONING POLICY
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Approve revisions to the City of Palm Desert's Public Art Deaccessioning Policy for the City's permanent public art collection.

Motion Carried

13.e ADOPT A RESOLUTION DECLARING CITY OF PALM DESERT OWNED PROPERTIES WITH ASSESSOR’S PARCEL NUMBERS (APN) 627-101-002, 627-101-017, 627-101-033, 627-101-061, 627-101-062, AND ADJACENT

RIGHT OF WAY SURPLUS LAND
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Adopt a Resolution declaring City of Palm Desert properties with APNs 627-101-002, 627-101-017, 627-101-033, 627-101-061, 627-101-062, and adjacent Right of Way surplus land for purposes of the Surplus Land Act.

2. Authorize staff to release a Notice of Availability for the sale of the properties.

Motion Carried

Page 73 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
4 13.f ADOPT A RESOLUTION DECLARING CITY OF PALM DESERT OWNED PROPERTIES WITH ASSESSOR’S PARCEL NUMBERS (APN) 640-370-018 AND 640-370-016 SURPLUS LAND
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Adopt a Resolution declaring City of Palm Desert properties with APNs 640-370-018 and 640-370-016 surplus land for purposes of the Surplus Land Act.

2. Authorize staff to release a Notice of Availability for the sale of the properties.

Motion Carried

13.g ADOPT A RESOLUTION DECLARING CITY OF PALM DESERT OWNED PROPERTY WITH ASSESSOR’S PARCEL NUMBER 627-164-012 SURPLUS

LAND AND AUTHORIZING STAFF TO RELEASE A NOTICE OF

AVAILABILITY FOR THE SALE OF THE PROPERTY
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Adopt a Resolution declaring City of Palm Desert property with APN 627- 164-012 surplus land for purposes of the Surplus Land Act.

2. Authorize staff to release a Notice of Availability for the sale of the property.

Motion Carried

13.h APPROVAL OF RESOLUTION AUTHORIZING THE LEVY OF A SPECIAL TAX IN COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) FOR FISCAL YEAR 2023-24
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Approve a Resolution authorizing the annual levy of a special tax in the City of Palm Desert Community Facilities District No. 2005-1 (University Park) for Fiscal Year 2023-24.

Motion Carried

Page 74 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
5 13.i APPROVAL OF RESOLUTION AUTHORIZING THE LEVY OF A SPECIAL TAX IN COMMUNITY FACILITIES DISTRICT NO. 2021-1 (UNIVERSITY PARK) FOR FISCAL YEAR 2023-24
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Approve Resolution authorizing the annual levy of a special tax in the City of Palm Desert Community Facilities District No. 2021-1 (University Park) for Fiscal Year 2023-24.

Motion Carried

13.j APPROVE A ONE YEAR EXTENSION TO THE CONTRACT BETWEEN THE CITY OF PALM DESERT AND CIRCUIT TRANSIT, INC., TO PROVIDE EL PASEO COURTESY CART SERVICES FOR FISCAL YEAR 2023/24
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Approve Amendment No. 1 to Contract No. C43540 with Circuit Transit, Inc., in an amount not to exceed $219,241.02, including regularly scheduled, special events and flex hours for the operation of the El Paseo Courtesy Cart Program during Fiscal Year 2023/24.

2. Authorize the City Manager to execute said contract and allow the City Attorney to make non-substantive changes.

Motion Carried

Page 75 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
6 13.k HOUSING AUTHORITY: RATIFICATION OF MULTIPLE VENDOR

CONTRACTS FOR CONSTRUCTION MANAGEMENT SERVICES FOR THE

HOUSING AUTHORITY PROPERTIES IN THE AGGREGATE AMOUNT NOT TO EXCEED $270,000
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Ratify the award of multiple vendor contracts for construction management services entered between the City of Palm Desert and Anser Advisory Management LLC, MARRS Services, Inc., and MAAS Companies, Inc., to support the completion of capital improvement projects at the Housing Authority properties in the aggregate amount not to exceed $270,000.

2. Authorize the City to administer the contracts on behalf of the Housing Authority and authorize the City Manager to execute said contracts and subsequent task orders.

3. Authorize Director of Finance to transfer $100,000 from Housing Authority Account No. 8714195-4309200 to Account No. 8714195-4331100 for Fiscal Year 2022/23.

4. Direct the Director of Finance and Director of Public Works/Capital Projects to review annual expenditures and performance of the vendors under said contracts.

5. Authorize the contracts subject to the City Attorney’s non-monetary changes as to form.

Motion Carried

13.l HOUSING AUTHORITY: APPROVAL OF AMENDMENT NO. 2 TO CONTRACT HA 40360 WITH SOUTHWEST PROTECTIVE SERVICES, INC., FOR

COURTESY PATROL SERVICES AT PALM DESERT HOUSING AUTHORITY PROPERTIES IN A TOTAL AMOUNT NOT TO EXCEED $145,517.20
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Approve Amendment No. 2 to Contract HA 40360 with Southwest Protective Services, Inc., for courtesy patrol services at the Palm Desert Housing Authority properties effective September 1, 2023, for an additional one (1) year term in a total annual amount not to exceed $145,517.20 (includes an annual amount not to exceed $135,517.20 and up to $10,000 for additional services to be requested as needed).

2. Authorize the Executive Director to execute the Amendment and any documents necessary to effectuate and implement the actions taken herewith.

Motion Carried

Page 76 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
7 13.m RECEIVE AND FILE A LETTER OF SUPPORT FOR COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS’ GRANT APPLICATION TO THE

CALIFORNIA TRANSPORTATION COMMISSION'S LOCAL

TRANSPORTATION CLIMATE ADAPTATION PROGRAM
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Receive and file the letter of support for Coachella Valley Association of Governments’ grant application for the ACCESS Indian Canyon Project to the California Transportation Commission's Local Transportation Climate Adaptation Program.

Motion Carried

13.n HOUSING AUTHORITY: APPROVE A RESOLUTION ADOPTING A RECORDS

MANAGEMENT AND RETENTION POLICY
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Approve a Resolution adopting the Records Management Policy and Records Retention Schedules of the City of Palm Desert to apply to the Palm Desert Housing Authority, except as otherwise preempted by federal, state, or local law.

Motion Carried

13.o REJECT ALL PROPOSALS FOR BUMP & GRIND TRAILHEAD RESTROOM

PROJECT AND AUTHORIZE STAFF TO READVERTISE FOR PROPOSALS (PROJECT NO. 956-23)
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Reject all proposals presented for Bump & Grind Trailhead Restroom Project.

2. Authorize Public Works staff to readvertise the project.

Motion Carried

13.p RATIFY THE CITY MANAGER’S APPROVAL OF CHANGE ORDER NO. 2 TO CONTRACT NO. C40620 FOR THE DRAINAGE IMPROVEMENTS AT FIRE STATION NO. 71-COUNTRY CLUB DRIVE (PROJECT NO. 562-23)
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Ratify the City Manager’s approval of Change Order No. 2 to C40620 with ProCraft Construction for drainage improvements at Fire Station No. 71-Country Club Drive, in the amount of $125,000.

Motion Carried

Page 77 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
8 13.q AUTHORIZE THE TRANSFER OF DEVELOPER DEPOSIT FOR PORTOLA

AVENUE MEDIAN AND MAGNESIA FALLS DRIVE MEDIAN ISLAND
LANDSCAPE PROJECT (PROJECT NO. 937-23/MLS00027)
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Authorize the Director of Finance to transfer developer deposit in the amount of $151,200 from Deposit Account No. 4000000-2220000 to Project Account No. 4004614-4337001 for the Portola Avenue and Magnesia Falls Drive Median Island Landscape Installation.

Motion Carried

13.r APPROVE FIRST AMENDMENT TO THE AGREEMENT FOR MARKETING

SERVICES BETWEEN THE CITY OF PALM DESERT AND IDEA PEDDLER Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik

1. Approve Amendment No. 1 to Contract No. C43390 in the amount of $890,000 with Idea Peddler for marketing services.

2. Authorize the City Attorney to make non-substantive changes to the amendment and the City Manager to execute the agreement on behalf of the City.

Motion Carried

13.s ADOPT A RESOLUTION SETTING THE CITY COUNCIL REGULAR MEETING SCHEDULE FOR THE CALENDAR YEAR 2024
Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Harnik
Adopt a Resolution establishing dates for regular meetings of the Palm Desert City Council for the calendar year 2024.

Motion Carried

Page 78 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
9 14. ACTION CALENDAR

14.a AWARD CONTRACT TO PALM SPRINGS LIFE / DESERT PUBLICATIONS, INC., TO PRODUCE PALM DESERT’S 50TH ANNIVERSARY CELEBRATION Deputy Director of Economic Development Lawrence provided a staff report and responded to City Council inquiries.

Motion by: Councilmember Harnik
Seconded by: Councilmember Trubee

1. Approve Contract with Palm Springs Life/Desert Publications, Inc., in the amount of $350,000 to produce Palm Desert’s 50th Anniversary Celebration scheduled for November 18, 2023.

2. Authorize staff to finalize negotiations of the Contract.

3. Authorize the City Manager to execute Contract, subject to the satisfaction of the City Attorney.

4. Authorize Director of Finance to appropriate $270,000 to Account No. 1104800-4306101, from available General Fund Reserves.

Motion Carried (5 to 0)

14.b APPROVE CONTRACT WITH COACHELLA VALLEY WATER DISTRICT FOR

UTILITY CONFLICT RELOCATION IN ROUNDABOUT AT SAN PABLO

AVENUE AND SAN GORGONIO WAY
Deputy Director of Economic Development Lawrence presented a staff report and responded to City Council inquiries.

Motion by: Mayor Pro Tem Quintanilla
Seconded by: Councilmember Nestande

1. Approve a Contract with Coachella Valley Water District (CVWD) for Utility Conflict Relocation at San Pablo Phase 1 Roundabout in the amount of $115,000 to prepare for installation of Sunburst sculpture by artist Donald Gialanella.

2. Approve project contingency in the amount of $30,000.

3. Authorize Director of Finance to appropriate $145,000 to the Restricted Capital Project Fund Account No. 4514342-4400100.

4. Authorize City Attorney to make any necessary, non-monetary changes to the CVWD Contract.

5. Approve gas line relocation by SoCalGas.

6. Authorize City Manager to sign all documents and waive all permit fees associated with execution of this project.

Motion Carried (5 to 0)

Page 79 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
10 14.c AWARD CONTRACT NO. C45240 IN THE AMOUNT OF $3,057,420 TO

MATICH CORPORATION OF SAN BERNARDINO, CALIFORNIA, FOR THE FRED WARING DRIVE STREET REHABILITATION PROJECT (PROJECT NO. 752-23/MST00008)
Project Manager Gayler narrated a PowerPoint presentation and responded to City Council inquiries.

Motion by: Councilmember Harnik
Seconded by: Councilmember Trubee

1. Make a finding that the project is categorically exempt from further review under the California Environmental Quality Act guidelines, Class 1 of Section 15301, and authorize the City Engineer to submit a Notice of Exemption.

2. Award Contract No. C45240, including bid alternate #1, in the amount of $3,057,420 to Matich Corporation of San Bernardino, California, for the Fred Waring Drive Street Rehabilitation Project.

3. Authorize the Director of Finance to set aside a 10% contingency in the amount of $306,000.

4. Authorize the Director of Finance to set aside an early completion incentive in the amount of $300,000.

5. Authorize the City Manager to review and approve written requests for the use of contingency for unanticipated conditions, per Section 3.30.170 Section B of Ordinance No. 1392.

6. Authorize the City Manager to review and approve the use of incentive funds if the requisite conditions have been met.

7. Authorize the City Manager or designee to execute the Agreement and the City Attorney to make non-monetary changes to the contract.

Motion Carried (5 to 0)

Page 80 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
11 15. PUBLIC HEARINGS

15.a APPROVE A PROPOSED PLAN FOR BOND ISSUANCE BY THE

CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY FOR

THE CROSSINGS AT PALM DESERT APARTMENT PROJECT
Housing Manager Gonzales narrated a PowerPoint presentation and responded to City Council inquiries.

Mayor Kelly opened and closed the public hearing, there being no member of the public wishing to speak.

Motion by: Councilmember Nestande
Seconded by: Mayor Pro Tem Quintanilla

1. Conduct the public hearing under the requirements of Tax and Equity Fiscal Responsibility Act (“TEFRA”) and the Internal Revenue Code of 1986, as amended (the “Code”) in connection with the proposed issuance in one or more series of revenue bonds by the California Statewide Communities Development Authority (“CSCDA”), a joint exercise of powers authority and public entity of the State of California, in an amount not to exceed Sixty Million Dollars $60,000,000.00 (the “Bonds”), to finance the acquisition, construction and development of the 176-unit Crossings at Palm Desert Apartments, a multifamily rental housing project located at located at the southeast corner of Dick Kelly Drive & Gateway Drive, Palm Desert, California (the “Project”) and receive public comments.

2. Adopt a resolution in the form attached hereto approving the issuance of the Bonds by CSCDA for the benefit of A0357 Palm Desert, L.P., a California Limited Partnership (the "Borrower") a partnership of which Urban Housing Communities, LLC (the "Developer") or a related person to the Developer is the general partner, to provide for the financing of the Project. Such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code and California Government Code Sections 6500 et seq.

Motion Carried (5 to 0)

Page 81 of 851 ends

Palm Desert City Council Meeting
July 13, 2023
12 15.b APPROVE A POWER PURCHASE AGREEMENT WITH FOREFRONT POWER

FOR THE DESERT WILLOW OVERFLOW LOT PHOTOVOLTAIC PROJECT (PROJECT NO. 777-14/CFA00005)
Project Manager Gayler presented a staff report and responded to City Council inquiries.

Mayor Kelly opened the public hearing.

Following the adoption of the the resolution, Mayor Kelly closed the public hearing, there being no member of the public wishing to speak.

Motion by: Councilmember Harnik
Seconded by: Councilmember Trubee
Conduct a Public Hearing and adopt a Resolution finding that the project will result in net cost savings to the City over the life of the 20-year contract and finding that the project is categorically exempt from further review pursuant to the requirements of the California Environmental Quality Act (CEQA).

Motion Carried (5 to 0)
Motion by: Councilmember Harnik
Seconded by: Councilmember Trubee

1. Authorize the City Manager to execute the Power Purchase Agreement for the Photovoltaic Systems at the planned Overflow Lot.

2. Authorize the City Manager to negotiate non-monetary changes and clarifications to the agreements, in consultation with the City Attorney, as may be required to carry out the intent of the agreement.

Motion Carried (5 to 0)

16. INFORMATION ITEMS
None.

17. ADJOURNMENT
The City Council adjourned at 4:45 p.m.
_________________________
Níamh M. Ortega
Assistant City Clerk/Assistant Secretary
_________________________
Anthony J. Mejia, MMC
City Clerk/Secretary

Page 82 of 851 ends

Page 83 of 851 ends

Page 84 of 851 ends

Page 85 of 851 ends

Page 86 of 851 ends

Page 87 of 851 ends

Page 88 of 851 ends

Page 89 of 851 ends

Page 90 of 851 ends

Page 91 of 851 ends

Page 92 of 851 ends

Page 93 of 851 ends

Page 94 of 851 ends

Page 95 of 851 ends

Page 96 of 851 ends

Page 97 of 851 ends

Page 98 of 851 ends

Page 99 of 851 ends

Page 100 of 851 ends

Page 101 of 851 ends

Page 102 of 851 ends

Page 103 of 851 ends

Page 104 of 851 ends

Page 105 of 851 ends

Page 106 of 851 ends

Page 107 of 851 ends

Page 108 of 851 ends

Page 109 of 851 ends

Page 110 of 851 ends

Page 111 of 851 ends

Page 112 of 851 ends

Page 113 of 851 ends

Page 114 of 851 ends

Page 115 of 851 ends

Page 116 of 851 ends

Page 117 of 851 ends

Page 118 of 851 ends

Page 119 of 851 ends

Page 120 of 851 ends

Page 121 of 851 ends

Page 122 of 851 ends

Page 123 of 851 ends

Page 124 of 851 ends

Page 125 of 851 ends

Page 126 of 851 ends

Page 127 of 851 ends

Page 128 of 851 ends

Page 129 of 851 ends

Page 130 of 851 ends

Page 131 of 851 ends

Page 132 of 851 ends

Page 133 of 851 ends

Page 134 of 851 ends

Page 135 of 851 ends

Page 136 of 851 ends

Page 137 of 851 ends

Page 138 of 851 ends

Page 139 of 851 ends

Page 140 of 851 ends

Page 141 of 851 ends

Page 142 of 851 ends

Page 143 of 851 ends

Page 144 of 851 ends

Page 145 of 851 ends

Page 146 of 851 ends

Page 147 of 851 ends

Page 148 of 851 ends

Page 149 of 851 ends

Page 150 of 851 ends

Page 151 of 851 ends

Page 152 of 851 ends

Page 153 of 851 ends

Page 154 of 851 ends

Page 155 of 851 ends

Page 156 of 851 ends

Page 157 of 851 ends

Page 158 of 851 ends

Page 159 of 851 ends

Page 160 of 851 ends

Page 161 of 851 ends

Page 162 of 851 ends

Page 163 of 851 ends

Page 164 of 851 ends

Page 165 of 851 ends

Page 166 of 851 ends

Page 167 of 851 ends

Page 168 of 851 ends

Page 169 of 851 ends

Page 170 of 851 ends

Page 171 of 851 ends

Page 172 of 851 ends

Page 173 of 851 ends

Page 174 of 851 ends

Page 175 of 851 ends

Page 176 of 851 ends

Page 177 of 851 ends

Page 178 of 851 ends

Page 179 of 851 ends

Page 180 of 851 ends

Page 181 of 851 ends

Page 182 of 851 ends

Page 183 of 851 ends

Page 184 of 851 ends

Page 185 of 851 ends

Page 186 of 851 ends

CITY OF PALM DESERT

CITY CLERK DEPARTMENT

INTEROFFICE MEMORANDUM
To:

From:

Date:

BUILDING AND SAFETY DIVISION AND PLANNING DIVISION

MICHELLE NANCE, DEPUTY CITY CLERK
Subject: APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY:
_____________________________________________________
A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required. Please mark the appropriate response below and return to my office by __________________________
Responding Department: __________________________ Date: ________________ Response:

No comment – okay to present to City Council.

Refer to ______________________________________ - related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary):
_________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________

Page 187 of 851 ends

CITY OF PALM DESERT

CITY CLERK DEPARTMENT

INTEROFFICE MEMORANDUM
To:

From:

Date:

BUILDING AND SAFETY DIVISION AND PLANNING DIVISION
0,&+(//(1$1&(, '(387<CITY CLERK
Subject: APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY:
_____________________________________________________
A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required. Please mark the appropriate response below and return to my office by __________________________
Responding Department: __________________________Date:B_______________ Response:

No comment – okay to present to City Council.

Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary):
_________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ MR BS SUBS, LLC. 74600 HIGHWAY 111 Ste F. Palm Desert, CA 92260 Friday, January 20, 2023.

Development Services: Planning June 22, 2023
✔
June 16, 2023

Page 188 of 851 ends

Department of Alcoholic Beverage Control

APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S)
ABC 211 (6/99)
State of California
TO :Department of Alcoholic Beverage Control
34-160 GATEWAY DR.

STE 120
File umber: 649009
Receipt Number: 2807494
Geographical Code: 3318
PALM DESERT, CA 92211
(760) 324-2027
Copies Mailed Date: June 6, 2023
Issued Date:

DISTRICT SERVfNG LOCATION: PALM DESERT
First Owner:

Name of Business:

Location of Business:

County:

Is Premises inside city limits?
Mailing Address:(If different
from
premises address)
Type of license(s):

Transferor's license/name:

License Type

MR BS SUBS LLC

MRBS SUBS
74600 HIGHWAY 111
STE F
PALM DESERT, CA 92260-3801

RIVERSIDE
Yes
82711 LORDSBURG DR
INDIO, CA 92203-3852
41 Transaction Type Master
41 - On-Sale Beer And Wine - Eating P ORI y
License Type
Application Fee
Application Fee
Application Fee
4 1 - On-Sale Beer And Wine - Eat
Transaction Description
STATE Fir GERPRINTS

ADD PRIMARY LICENSE TYPE
FEDERAL Fl GERPRI TS

ANNUAL FEE
Have you ever been convicted of a felony? No
Fee Code
NA
NA
NA
NA
Census Tract: 0451.27
Dropping Partner: Yes
Secondary LT And Count
Dup Date Fee
2 06/06/23 $78.00
0 06/06/23 $990.00
2 06/06/23 $48.00
0 06/06/23 $495.00
Total $ 1,6 11.00
Have you ever violated any provisions of the Alcoholic Beverage Control Act, or regulations of the Department pertaining to the Act? No
STATE OF CALIFORNIA County of RIVERSIDE Date: June 6, 2023 Applicant Name(s)

MR BS SUBS LLC
0 ~£ :2 Wd Z I Nnr £202

Page 189 of 851 ends

Page 190 of 851 ends

CITY OF PALM DESERT

CITY CLERK DEPARTMENT

INTEROFFICE MEMORANDUM
To:

From:

Date:

BUILDING AND SAFETY DIVISION AND PLANNING DIVISION

No comment – okay to present to City Council.

Page 191 of 851 ends

CITY OF PALM DESERT

CITY CLERK DEPARTMENT

INTEROFFICE MEMORANDUM
To:

From:

Date:

No comment – okay to present to City Council.

Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary):
_________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ LA PRO Visions, Inc; LA PROVENCE PATISSERIE 72785 Hwy 111 Ste B1, Palm Desert, CA 92260 Tuesday, August 1, 2023.

Development Services: Planning July 25, 2023
✔
July 25, 2023

Page 192 of 851 ends

Department of Alcoholic Beverage Control

APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE
ABC 211 (6/99)
State of California
TO:Department of Alcoholic Beverage Control
34- 160 GATEWAY DR.

STE 120
File Number: 649896
Receipt Number: 2817028
Geographical Code: 3318
PALM DESERT, CA 92211
(760) 324-2027
Copies Mailed Date: July 7, 2023
Issued Date :

DISTRICT SERVING LOCATION: PALM DESERT
First Owner:

Name of Business:

Location of Business:

County
Is Premises inside city limits
Mailing Address:(lf different
from
premises address)
Type of license(s):

Transferor's license/name:

License Type
41 - On-Sale Beer And Wine - Eating
58 - Caterer Permit
License Tvpe
Application Fee
Application Fee
Application Fee
58 - Caterer Permit
41 - On-Sale Beer And Wine - Ea

LAPRO VISIONS INC

LA PROVENCE PATISSERIE
72785 HIGHWAY 111
STE Bl
PALM DESERT, CA 92260-3343

RIVERSIDE
Yes
41,58
Transaction Type Master
ORJ y
ORJ N
Transaction Descri ption Fee Code
FEDERAL Fl GERPRJNTS NA
STATE Fl GERPRJ TS NA

ADD PRJMARY LICE SE TYPE NA

ANNUAL FEE NA

ANNUAL FEE NA
Have you ever been convicted of a fe lony? No
Census Tract: 0451.16
Dropping Partner: Yes
Secondary LT And Count
58[ I J
Dup Date Fee
07/07/23 $24.00
I 07/07/23 $39.00
0 07/07/23 $990.00
I 07/07/23 $250.00
0 07/07/23 $495.00
Total $1 ,798.00
Have you ever violated any provisions of the Alcoholic Beverage Control Act, or regul ations of the Department pertaining to the Act? No

STATE OF CALIFORNIA
Applicant Name(s)

LAPRO VISIONS INC
County of RIVERSIDE Date: July 7, 2023
No

Page 193 of 851 ends

Page 194 of 851 ends

CITY OF PALM DESERT

CITY CLERK DEPARTMENT

INTEROFFICE MEMORANDUM
To:

From:

Date:

BUILDING AND SAFETY DIVISION AND PLANNING DIVISION

No comment – okay to present to City Council.

Page 195 of 851 ends

CITY OF PALM DESERT

CITY CLERK DEPARTMENT

INTEROFFICE MEMORANDUM
To:

From:

Date:

No comment – okay to present to City Council.

Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary):
_________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ CEC Entertainment; Chuck E Cheese's 72513 Hwy 111 Ste H Palm Desert, CA 92260 Tuesday, August 1, 2023.

Development Services: Planning July 25, 2023
✔
July 25, 2023

Page 196 of 851 ends

Department of Alcoholic Beverage Control State of California

APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE
ABC 211 (6/99)
TO:Department of Alcoholic Beverage Control
34-160 GATEWAY DR.

File Number: 649970
Receipt Number: 2817830
STE 120 Geographical Code: 3318
PALM DESERT, CA 92211
(760) 324-2027
Copies Mailed Date: July 11, 2023
Issued Date :

DISTRICT SERVING LOCATION: PALM DESERT
First Owner:

Name of Business:

Location of Business:

County

CEC ENTERT AINME T, LLC

CHUCK E CHEESE'S
72513 HIGHWAY 111
STEH
PALM DESERT, CA 92260-0800

RIVERSIDE
Is Premises inside city limits
Mailing Address:(lf different
from
Yes Census Tract: 0451.16
premises address)
Type of license(s):
1707 MARKET PLACE BLVD
STE 200

C/O LICENSI G DEPT
IRVING, TX 75063
41 Dropping Partner: Yes
Transferor's license/name: 348986 I CEC ENTERTAINMENT INC License Type Transaction Type
41 - On-Sale Beer And Wine - Eating PER
License Type
Application Fee
Application Fee
4 1 - On-Sale Beer And Wine - Ea
Transaction Description

ISSUE TEMPORARY PERMIT

PERSON TO PERSON TRF

A UAL FEE
Have you ever been convicted of a felony? o
Master
y
Fee Code
NA
NA
NA
Secondary LT And Coun1
Dup Date Fee
07/11 /23 $100.00
0 07/11/23 $365 .00
0 07/1 1/23 $495.00
Total $960.00
Have you ever violated any provisions of the Alcoholic Beverage Control Act, or regulations of the Department pertaining to the Act? o
STATE OF CALIFORNIA County of RIVERSIDE Date: July 11 , 2023 Applicant Name(s)

CEC E TERT AINMENT, LLC
No

Page 197 of 851 ends

Page 198 of 851 ends

CITY OF PALM DESERT

CITY CLERK DEPARTMENT

INTEROFFICE MEMORANDUM
To:

From:

Date:

BUILDING AND SAFETY DIVISION AND PLANNING DIVISION

No comment – okay to present to City Council.

Page 199 of 851 ends

CITY OF PALM DESERT

CITY CLERK DEPARTMENT

INTEROFFICE MEMORANDUM
To:

From:

Date:

No comment – okay to present to City Council.

Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary):
_________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Palm Desert Harmany, Inc.; Pokehana 73405 Hwy 111 Ste 104 Palm Desert, CA 92260-3939 Tuesday, August 1, 2023.

Development Services: Planning July 25, 2023
✔
July 25, 2023

Page 200 of 851 ends

Department of Alcoholic Beverage Control State of California

APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S)
ABC 2 11 (6/99)
TO:Department of Alcoholic Beverage Control
34-160 GATEWAY DR.

File umber: 649404
Receipt Number: 2811548
STE 120 Geographical Code: 33 18
PALM DESERT, CA 92211
(760) 324-2027
Copies Mailed Date: June 19, 2023
Issued Date:

DISTRICT SERVING LOCATION: PALM DESERT
First Owner:

Name of Business:

Location of Business:

County:

PALM DESERT HARMONY INC

POKEHANA
73405 HWY 111
STE 104
PALM DESERT, CA 92260-3939

RIVERSIDE
Is Premises inside city limits?
Mailing Address:(If different
from
Yes Census Tract: 0451.1 7
24115 COTTONWOOD A VE
APT B18
premises address) MORENO VALLEY, CA 92553-6227
Type of license(s): 41
Transferor's license/name: 583550 / ONO BRANDS INC
License Type Transaction Type
41 - On-Sale Beer And Wine - Eating P PER
License Type
Application Fee
4 1 - On-Sale Beer And Wine - Eat
Transaction Description

PERSO TO PERSON TRF

ANNUAL FEE
Have you ever been convicted of a felony? o
Master
y
Fee Code
A
A
Dropping Partner: Yes
Secondary LT And Count
Dup Date Fee
0 06/1 9/23 $365.00
0 06/ 19/23 $495.00
Total $860.00
Have you ever violated any provisions of the Alcoholic Beverage Control Act, or regulations of the Department pertaining to the Act? No
STATE OF CALIFORNIA County of RIVERSIDE Date: June 19, 2023 Applicant Name(s)

PALM DESERT HARMONY INC
No
,......, o ...... =-"'I c....>
> -- <-
C: :;:{"') ;%.I
z ~ ,TT>
N Orn-,
co ,.,,~ :4 ..
'..fl-:;
rrl --< - x» Difl :-"I. ::c :40
'-9 .,., o ...-. 0 ..,... ,,., - ,::, ,..,.,

Page 201 of 851 ends

Page 202 of 851 ends

Page 1 of 1 ends

CITY OF PALM DESERT

STAFF REPORT
MEETING DATE: August 24, 2023
PREPARED BY: Anthony J. Mejia, City Clerk
REQUEST: ACCEPT RESIGNATIONS FROM THE CIVIC ENGAGEMENT

COMMITTEE, CULTURAL ARTS COMMITTEE, AND PARKS AND

RECREATION COMMITTEE
RECOMMENDATION:

BACKGROUND/ANALYSIS:

Recently, it came to staff’s attention that several appointed body members may live outside of City limits or are seasonal residents. The City Clerk staff verified appointed members’ residency and as a result discovered that Anyse Smith and Debra Norby reside outside of City limits. Upon reaching out, these members voluntarily resigned upon learning of the City’s residency requirements to serve on appointed bodies.

On June 13, 2023, the City Clerk’s Office issued a letter advising James Henderson, member of the Parks and Recreation Committee, that he accrued four unexcused absences and pursuant to the Palm Desert Municipal Code is subject to automatic resignation. The letter further informed Mr. Henderson his resignation will be deemed automatic on June 29, 2023, unless he seeks and is granted a waiver of unexcused absences from the Mayor. No such request was made.

On June 22, 2023, the City Council appointed Dan Rademacher as an alternate to the Parks and Recreation Committee. On July 18, 2023, prior to his oath of office, Mr. Rademacher informed staff he accepted another volunteer position and will not be able to serve on the committee at this time.

As a result of these resignations, the Civic Engagement Committee has eight appointed members (Civic Engagement Committee may have up to 12 members), the Cultural Arts Committee has no vacancies and one alternate member, and the Parks and Recreation Committee has one vacancy.

FINANCIAL IMPACT:

There is no fiscal impact.

Page 203 of 851 ends

Page 204 of 851 ends

Page 1 of 3 ends

PALM DESERT HOUSING AUTHORITY

STAFF REPORT
MEETING DATE: August 24, 2023
PREPARED BY: Jessica Gonzales, Housing Manager
REQUEST: HOUSING AUTHORITY: APPROVE A RESOLUTION AUTHORIZING THE

EXECUTION AND DELIVERY OF A HOUSING AND LOAN AGREEMENT
AND RELATED DOCUMENTS BETWEEN THE AUTHORITY AND A0358
MONTEREY, L.P., APPROVING A LOAN IN THE AMOUNT OF $7,235,000 FOR THE CONSTRUCTION OF 176 A
RECOMMENDATION:

1. Approve a Resolution authorizing the execution and delivery of a Loan Agreement, Deed of Trust, Secured Promissory Note and Housing Agreement, in substantial form, between the Palm Desert Housing Authority and A0358 Monterey, L.P., a California Limited Partnership, and approving a loan in the amount of Seven Million Two Hundred Thirty-Five Thousand Dollars ($7,235,000.00) from the Authority’s Low and Moderate Income Housing Asset Fund to fund the construction of One-Hundred Thirty Nine (139) of the One-Hundred Seventy Four (174) affordable housing units comprising the proposed apartment project.

2. Authorize the Chairman and/or Executive Director, in consultation with legal counsel, to execute as appropriate and deliver, for and in the name of the Authority, the Loan Agreement, Deed of Trust, Secured Promissory Note and Housing Agreement presented to the Authority Board at this meeting, as the same may be modified by the Executive Director in consultation with legal counsel to the Authority, provided such modifications are materially consistent with the purpose of the Resolution.

3. Authorize the Chairman, the Executive Director, or their respective designees, in consultation with legal counsel to the Authority, to execute and deliver, for and in the name of the Authority, all other necessary or proper documents and instruments, and to do all things which they may deem necessary or proper to effectuate the purposes of the Resolution.

BACKGROUND/ANALYSIS:

On July 14, 2022, the Palm Desert Housing Authority (“Authority”), conditionally authorized and approved a loan commitment to Urban Housing Communities (“UHC”), in the amount of seven million two hundred thirty-five Thousand Dollars ($7,235,000.00) from the Authority’s Low and Moderate Income Housing Asset Fund (“LMIHAF”) for the financing and construction of a 100% affordable multi-family apartment community project that will consist of one hundred seventy four (174) affordable units with two (2) on-site manager units in one phase (the “Project”).

UHC has been awarded an allocation in the application submittal of February 2023 and received notification of such in June 2023. With the successful award to UHC, staff and legal counsel have negotiated and prepared such agreements and documents, as are required to effectuate the Authority’s funding commitment for the Project. The documents consist of (i) a Loan Agreement, (ii) a Secured Promissory Note, (iii) a Deed of Trust and (iv) a Housing Agreement, each to be executed by A0358 Monterey, L.P., a California limited partnership, an affiliate of

Page 205 of 851 ends

Palm Desert Housing Authority
Loan Agreement and Documents – Crossings at Palm Desert Apartments

Page 2 of 3 ends

UHC and the developer of the Project and borrower under the Loan Agreement.

In 2022, the Authority and developer agreed to restrict one-hundred seventy-four (174) units to 80% AMI and below. However, due to the complexities of the State requirements for using the LMIHAF money, it was determined that if the Authority restricts thirty-five (35) of the one-hundred seventy-four (174) units to low income (households earning up to 80% AMI), the Project will have an additional three million dollar ($3,000,000) financial gap as the State low-income rents are significantly lower than the 80% AMI TCAC rents. Therefore, the Authority has agreed to provide seven million two-hundred thirty-five thousand dollars ($7,235,000) of LMIHAF proceeds to the Project to fund one hundred thirty-nine (139) of the one hundred seventy-four (174) restricted units, which equates to approximately fifty-two thousand dollars ($52,000) per unit.

These units will be restricted for fifty-five (55) years as follows:

Unit Type Extremely Low Income 59% AMI Low Income Total Authority Restricted Units
1-Bedroom Units 5 24 29
2-Bedroom Units 37 22 59
3-Bedroom Units 51 0 51
Total Units 93 46 139
It should be noted that one hundred seventy-four (174) units will be restricted by a TCAC regulatory agreement with a term of fifty-five years (55). In addition, the City and the developer will simultaneously enter into a Housing Agreement which will restrict the thirty-five (35) units not restricted by the Authority (15 one-bedroom units, 19 two-bedroom units and 1 three-bedroom unit) to households earning up to 80% AMI. As a result, the City will receive Regional Housing Needs Assessment (“RHNA”) credit for ninety-three (93) extremely low-income units, nine (9) very low-income units, seventy-low (72) low income units and two (2) above moderate income units reserved for on-site property management; in addition to meeting the State requirements for using the LMIHAF money to assist this Project.

Strategic Plan:

One of the priorities of the City of Palm Desert’s (“City”) Envision Palm Desert Strategic Plan, as part of Land, Use, Housing and Open Space, is to facilitate development of high-quality housing for people of all income levels. This request meets that objective by diversifying the City’s housing stock for lower income households.

Page 206 of 851 ends

Palm Desert Housing Authority
Loan Agreement and Documents – Crossings at Palm Desert Apartments

Page 3 of 3 ends

FINANCIAL IMPACT:

The fiscal impact of this request is the loan itself in the amount of Seven Million Two Hundred Thirty-Five Thousand Dollars ($7,235,000.00) from the Authority’s Low- and Moderate-Income Housing Asset Fund, or $52,000 per Authority restricted unit. This is a one-time loan; funds are available in Account Number 8734195-4663900. This transaction will not impact the City's General Fund.

The developer’s sources of financing breakdown for the project are as follows:

ATTACHMENTS:

1. Palm Desert Housing Authority Resolution No. HA-______.

2. Housing Agreement

3. Loan Agreement

4. Secured Promissory Note

5. Deed of Trust

6. Notice of Affordability

7. Project Site Map
Funding Source Description Total Project Cost
Palm Desert Housing Authority Low- and
Moderate-Income Housing Asset Fund
Land Purchase and
Construction Cost $7,235,000
Tax-Exempt Bonds Permanent Loan $27,249,000
(4%) Federal Tax Credits Investor Equity $45,704,127
State Tax Credits Investor Equity $15,607,864
Housing Authority of the County of Riverside 87 Project Based Vouchers $ 0
Developer Land Loan Repaid out of Residual
Receipts $3,866,666
Deferred Developer Fee 80% of Dev Fee $9,566,194
TOTAL $109,228,851

Page 207 of 851 ends

Page 208 of 851 ends

RESOLUTION NO. HA-___

A RESOLUTION OF THE PALM DESERT HOUSING AUTHORITY

APPROVING A HOUSING AND LOAN AGREEMENT AND RELATED

DOCUMENTS REGARDING CROSSINGS AT PALM DESERT
BETWEEN THE AUTHORITY AND A0358 MONTEREY, L.P., AND

TAKING RELATED ACTIONS
RECITALS:

A. Pursuant to AB X1 26 (enacted in June 2011) and the California Supreme Court’s decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th 231 (2011), the former Palm Desert Redevelopment Agency (the “Former Agency”) was dissolved as of February 1, 2012, the Successor Agency to the Palm Desert Redevelopment Agency (the “Successor Agency”), as the successor entity to the Former Agency, was constituted, and a board of the Successor Agency (the “Board”) was established.

B. AB X1 26 added Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) to Division 24 of the California Health and Safety Code (“HSC”) (such Parts 1.8 and 1.85, including amendments and supplements enacted after AB X1 26, being referred to herein as the “Dissolution Act”).

C. Pursuant to HSC Section 34176(b), the City Council of the City of Palm Desert (the “City”) adopted Resolution No. 2012-07, electing for the City to not retain the responsibility for performing housing functions previously performed by the Former Agency, and determining that all of the assets, as allowed by law, and all rights, powers, liabilities, duties, and obligations associated with the housing activities of the Former Agency be transferred to the Palm Desert Housing Authority (the “Authority”).

D. A0358 MONTEREY, L.P., a California limited partnership (the “Developer”), an affiliate of Urban Housing Communities, Inc., a California corporation (“UHC”) intends to construct on a +/-11.8-acre parcel comprised of APNs 694-130-017, 694-130-018, 694-130-019, 694-130-020 (the “Property”), located on Dick Kelly Drive, Palm Desert, a 176-unit multifamily apartment community and known as the Crossings at Palm Desert Apartments for households with incomes up to 80% of the area median income in one phase (the “Project”).

The Property is described in Exhibit “A”, attached hereto, and incorporated herein.

E. UHC submitted a funding request to the Authority to make a loan to UHC or its affiliate designee in the amount of Seven Million Two Hundred Thirty-Five Thousand Dollars ($7,235,000.00) (the “Loan”) to assist in the construction of the Project. The Loan would be disbursed by the Authority to pay for costs of the improvements (together with disbursements of the construction loan proceeds of the senior construction lender). The Project is intended to be funded by leveraging multiple funding sources including four percent (4%) tax exempt bonds, federal tax credits, state tax credits, and the Loan.

F. The Authority, as the housing successor to the Former Agency, on July 13, 2022, approved a Conditional Agreement regarding the Crossings at Palm Desert Apartments between

Page 209 of 851 ends

RESOLUTION NO. HA-
-2-
P6401-0001\2849494v2.doc
the Authority and UHC (the “Conditional Loan Agreement”) which provides for the Authority to make the Loan subject to the terms and conditions therein.

G. UHC submitted an application, including the Conditional Loan Agreement, to the California Tax Credit Allocation Committee for an allocation of tax-exempt bonds, federal tax credits and state tax credits as described in the Conditional Loan Agreement.

H. UHC successfully received and has provided proof of financing commitments from all sources necessary to fund the entire Project and the Project is in the process of obtaining a conditional grading and building and safety permit ready approval.

I. UHC has formed A0358 MONTEREY, L.P. to take title to the Property from UHC and act as the borrower of the Loan and the developer of the Project.

NOW, THEREFORE, THE PALM DESERT HOUSING AUTHORITY DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. The above recitals, and each of them, are true and correct and are a substantive part of this Resolution.

Section 2. The Loan Agreement (“Loan Agreement”), and the Deed of Trust and Assignment of Rents (“Deed of Trust”), Secured Promissory Note (“Note”) and Housing Agreement (“Housing Agreement”), each attached to the Loan Agreement as Exhibits thereto, are hereby approved in substantially the forms attached hereto as Exhibit “B”. The Executive Director of the Authority is hereby authorized to execute, as appropriate, and deliver, for and in the name of the Authority, the Loan Agreement, Deed of Trust, Note and Housing Agreement in substantially the form attached hereto, with such changes thereto as the Executive Director, in consultation with the Authority legal counsel, may deem appropriate or necessary and consistent with the purposes of this Resolution (such approval to be conclusively evidenced by the execution and/or delivery thereof).

Section 3. The Director of Finance is hereby authorized to appropriate Seven Million Two Hundred Thirty-Five Thousand Dollars ($7,235,000.00) from the Unobligated Housing Asset Fund Balance to the appropriate budget line item(s).

Section 4. The members of this Board, Executive Director and the staff of the Authority are hereby authorized, jointly and severally, to do all things and to prepare, execute and deliver such other documents and instruments which they may deem necessary or proper to effectuate the purposes of this Resolution, and any such actions previously taken are hereby ratified and confirmed.

Section 5. The Secretary shall certify the adoption of this Resolution and the same shall take effect and be in force immediately.

Page 210 of 851 ends

RESOLUTION NO. HA-
-3-
P6401-0001\2849494v2.doc
PASSED, APPROVED and ADOPTED on this 24th day of August, 2023, by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

KATHLEEN KELLY, CHAIRMAN
ATTEST:

ANTHONY J. MEJIA, MMC,

SECRETARY

Page 211 of 851 ends

RESOLUTION NO. HA-
-4-
P6401-0001\2849494v2.doc
[This page has intentionally been left blank.]

Page 212 of 851 ends

EXHIBIT “A”
The Land referred to herein below is situated in the City of Palm Desert, County of Riverside, State of California, and is described as follows:

PARCEL A AS SHOWN ON CERTIFICATE OF COMPLIANCE (WAIVER OF PARCEL MAP PMW 06-03), AS EVIDENCED BY DOCUMENT RECORDED OCTOBER 25, 2006 AS INSTRUMENT NO. 2006-0782511 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

A PORTION OF PARCELS 1 AND 2 OF PARCEL MAP WAIVER NO. 99-15, RECORDED OCTOBER 15, 1999, AS INSTRUMENT NO. 1999-457541, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, IN THE SOUTHWEST QUARTER (SW1/4) OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN, CITY

OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN,

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ON THE CENTERLINE OF MONTEREY AVENUE; THENCE N89°58'35"E ALONG THE EASTWEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE NORTHERLY LINE OF PARCEL 2 OF PARCEL MAP WAIVER NO. 99-15, RECORDED OCTOBER 15, 1999, AS INSTRUMENT NO. 1999-457541, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, A DISTANCE OF 1314.94 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29, THE NORTHERLY LINE OF SAID PARCEL 2 AND CONTINUING ALONG THE NORTHERLY LINE OF PARCEL 1 OF SAID PARCEL MAP WAIVER NO. 99-15, A DISTANCE OF 1314.61 FEET TO THE CENTER ONE QUARTER (C1/4) CORNER OF SAID SECTION 29, SAID POINT BEING ALSO THE NORTHEAST CORNER OF SAID PARCEL 1;
THENCE S00°09'04"E ALONG THE NORTH-SOUTH ONE QUARTER (N-S 1/4) SECTION LINE OF SAID SECTION 29 AND THE EASTERLY LINE OF SAID PARCEL 1, A DISTANCE OF 489.00 FEET TO THE NORTHEAST CORNER OF THAT PARCEL OF

LAND CONVEYED TO THE PALM SPRINGS UNIFIED SCHOOL DISTRICT BY GRANT DEED, RECORDED APRIL 28, 2006, AS INSTRUMENT NO. 0308440, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA; THENCE S89°58'35"W ALONG THE NORTHERLY LINE OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 0308440, A DISTANCE OF 1270.59 FEET TO

THE NORTHWEST CORNER OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 0308440, SAID POINT BEING ALSO A POINT ON A NON TANGENT

Page 213 of 851 ends

RESOLUTION NO. HA-
-6-
P6401-0001\2849494v2.doc
CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1700.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS 576°44'54"W;

THENCE NORTHWESTERLY AND NORTHERLY ALONG THE ARC OF SAID CURVE, A DISTANCE OF 392.48 FEET THROUGH A CENTRAL ANGLE OF 13°13'40"; THENCE N00°01'26"W, A DISTANCE OF 100.00 FEET TO THE POINT OF BEGINNING.

EXCEPT PARCEL NO. 2004-02.12 ("C" STREET), PARCEL NO. 2004-02.11 (AVENUE 35) AND A PORTION OF PARCEL NO. 2004-02.10 (GATEWAY DRIVE), ALL CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF

RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN,

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ON THE CENTERLINES OF MONTEREY AVENUE AND AVENUE 35; THENCE N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE CENTERLINE OF SAID AVENUE 35, A DISTANCE OF 1314.94 FEET TO THE CENTERLINE INTERSECTION OF SAID AVENUE 35 AND GATEWAY DRIVE; THENCE CONTINUING N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE CENTERLINE OF SAID AVENUE 35, A DISTANCE OF 71.07 FEET; THENCE S00°01'25"E, A DISTANCE OF 54.00 FEET TO THE SOUTHERLY LINE OF PARCEL NO. 2004-02.11 (AVENUE 35) CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING 54.00 FEET SOUTHERLY OF THE CENTERLINE OF SAID AVENUE 35, AS MEASURED AT RIGHT ANGLES THERETO, SAID POINT BEING ALSO THE TRUE POINT OF BEGINNING; THENCE N89°58'35"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-

02.11 (AVENUE 35), A DISTANCE OF 782.06 FEET TO THE POINT OF CURVATURE OF A CURVE CONCAVE TO THE SOUTHWEST, HAVING A RADIUS OF 946.00 FEET;

THENCE EASTERLY AND SOUTHEASTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35) AND THE ARC OF SAID CURVE, A DISTANCE OF 220.33 FEET THROUGH A CENTRAL ANGLE OF 13°20'40" TO A POINT

OF REVERSE CURVATURE OF A CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1054.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS S13°19'14"W;
THENCE SOUTHEASTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35) AND THE ARC OF SAID CURVE, A DISTANCE OF 185.57 FEET THROUGH A CENTRAL ANGLE OF 10°05'15";

Page 214 of 851 ends

RESOLUTION NO. HA-
-7-
P6401-0001\2849494v2.doc
THENCE 552°30'03"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35), A DISTANCE OF 27.78 FEET TO THE WESTERLY LINE OF PARCEL NO. 2004-02.12 ("C" STREET) CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA; THENCE S00°09'04"E ALONG THE WESTERLY LINE OF SAID PARCEL NO. 2004-02.12 ("C" STREET), A DISTANCE OF 365.78 FEET TO THE NORTHERLY LINE OF THAT

DRIVE) CONVEYED TO THE CITY OF PALM SPRINGS BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.)

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ALSO A POINT

ON A NON-TANGENT CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1646.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS S76°15'06"W;

THENCE NORTHWESTERLY AND NORTHERLY ALONG THE EASTERLY LINE OF SAID PARCEL NO. 2004-02.10 (GATEWAY DRIVE) AND THE ARC OF SAID CURVE, A DISTANCE OF 392.80 FEET THROUGH A CENTRAL ANGLE OF 13°40'23"; THENCE N00°04'31"W ALONG THE EASTERLY LINE OF SAID PARCEL NO. 2004-02.10 (GATEWAY DRIVE), A DISTANCE OF 28.94 FEET TO THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35);
THENCE N44°57'02"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-

02.11 (AVENUE 35), A DISTANCE OF 24.05 FEET TO THE POINT OF BEGINNING.

APN: 694-130-017 (Affects a portion of the land);
694-130-018 (Affects a portion of the land);
694-130-019 (Affects a portion of the land); and
694-130-020 (Affects a portion of the land)

Page 215 of 851 ends

EXHIBIT “B”

FORMS OF LOAN AGREEMENT, DEED OF TRUST

NOTE AND HOUSING AGREEMENT

Page 216 of 851 ends

DRAFT
P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:

Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: Jessica Gonzales
SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY
This Document is recorded for the benefit of the Palm Desert Housing Authority and is exempt from recording fees pursuant to Sections 6103, 27383 and 27388.1 of the California Government Code.

HOUSING AGREEMENT
(LMIHF Funds)
by and between
the PALM DESERT HOUSING AUTHORITY,
and
A0358 MONTEREY, L.P.

A CALIFORNIA LIMITED PARTNERSHIP
DATED AS OF _________ ____, 2023

Page 217 of 851 ends

ARTICLE 1. DEFINITIONS AND INTERPRETATION.................................................................... 1

1.1 Definitions................................................................................................................... 1

1.2 Rules of Construction .............................................................................................. 3 ARTICLE 2. ONGOING PROJECT OBLIGATIONS.......................................................................... 3

2.1 Project and Affordable Units................................................................................. 3

2.2 Residential Rental Property ................................................................................... 4

2.3 Extremely Low and 59% AMI Low Income Households............................. 4

2.4 Affordable Rent......................................................................................................... 5

2.5 Rent Increases............................................................................................................ 5

2.6 Income Recertification of Affordable Units...................................................... 5

2.7 Lease or Occupancy Agreement........................................................................... 6

2.8 Security Deposits...................................................................................................... 6

2.9 Additional Information............................................................................................ 6

2.10 Specific Performance............................................................................................... 7

2.11 Audit ............................................................................................................................. 7

2.12 Management ............................................................................................................... 7

2.13 Management Contract.............................................................................................. 7

2.14 Binding for Term....................................................................................................... 9 ARTICLE 3. TERM AND RECORDATION .......................................................................................... 9

3.1 Term of Agreement .................................................................................................. 9

3.2 Agreement to Record ............................................................................................... 9

3.3 Suspension of Restrictions..................................................................................... 9 ARTICLE 4. DEFAULT................................................................................................................................. 9

4.1 An Event of Default ................................................................................................. 9

4.2 Option to Lease........................................................................................................10

4.3 Authority Remedies................................................................................................10

Page 218 of 851 ends

TABLE OF CONTENTS (cont’d)
Page
-3- P6401-0001\2851004v1.doc
P6401-0001\2815992v7.doc

4.4 Action at Law...........................................................................................................10 ARTICLE 5. GENERAL PROVISIONS.................................................................................................11

5.1 Limitations on Recourse .......................................................................................11

5.2 Maintenance, Repair, Alterations.......................................................................11

5.3 Notices........................................................................................................................11

5.4 Relationship of Parties...........................................................................................12

5.5 No Claims..................................................................................................................12

5.6 Conflict of Interests................................................................................................13

5.7 Non-Liability of Officials, Employees and Agents.......................................13

5.8 Unavoidable Delay .................................................................................................13

5.9 Indemnity...................................................................................................................13

5.10 Rights and Remedies Cumulative ......................................................................13

5.11 Applicable Law........................................................................................................14

5.12 Severability...............................................................................................................14

5.13 Legal Actions...........................................................................................................14

5.14 Binding Upon Successors.....................................................................................14

5.15 Time of the Essence ...............................................................................................14

5.16 Approval by the Authority ...................................................................................14

5.17 Complete Understanding of the Parties............................................................14

5.18 Covenants to Run With the Land .......................................................................14

5.19 Burden and Benefit.................................................................................................15

5.20 Counterparts .............................................................................................................15

5.21 Amendments.............................................................................................................15

Page 219 of 851 ends

TABLE OF CONTENTS (cont’d)
Page
-4- P6401-0001\2851004v1.doc
P6401-0001\2815992v7.doc
EXHIBIT A Description of Property
EXHIBIT B Income Certification
EXHIBIT C Certificate of Continuing Compliance
EXHIBIT D 2023 Rental Rates

Page 220 of 851 ends

HOUSING AGREEMENT
THIS HOUSING AGREEMENT (the “Agreement”) is dated as of ______________ ___, 2022, and is by and between the PALM DESERT HOUSING AUTHORITY, a public body, corporate and politic (the “Authority”), and A0358 MONTEREY, L.P., A CALIFORNIA LIMITED PARTNERSHIP (the “Owner”). Authority and Owner are sometimes referred to herein individually as a “Party” and collectively as “Parties”.

RECITALS
This Agreement is predicated upon the following facts:

A. The Owner owns the property located in the City of Palm Desert, County of Riverside, State of California (“City”), more particularly described on Exhibit “A” attached hereto (“Site”).

B. Owner has entered into a Loan Agreement (“Loan Agreement”) even date herewith with the Authority which contemplates that the Authority, as successor to the housing assets of the former Palm Desert Redevelopment Agency, shall make a Seven Million Two Hundred ThirtyFive Thousand Dollars ($7,235,000.00) construction loan (“Loan”) to Owner using moneys in the Authority’s low and moderate income housing asset fund to pay certain construction costs of the One Hundred Seventy-Six (176) unit apartment project described in the Loan Agreement (“Project”). The Loan Agreement requires that Owner execute and record this Agreement against the Site and Project, and provides that an uncured default under this Agreement shall constitute a default under the Loan Agreement and shall entitle the Authority to accelerate the maturity date of the Loan.

C. This Agreement shall not be subordinate or subordinated to any deeds of trust or other liens encumbering the Site or Project.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Authority and the Owner hereby agree as follows:

ARTICLE 1. DEFINITIONS AND INTERPRETATION.

1.1 Definitions.

Capitalized terms used herein shall have the following meanings unless the context in which they are used clearly requires otherwise.
“Affordable Units” shall mean 139 of the 176 units in the Project available to and occupied by, or held vacant for occupancy only by, Extremely Low Income Households and 59% AMI Low Income Households, and rented at an Affordable Rent. Specifically, the Affordable Units consist of 93 units for Extremely Low Income Households and 46 units for 59% AMI Low Income Households. The Affordable Units will include the number of bedrooms shown on the following table:

Bedroom
Size
Extremely
Low
Income
59% AMI
Low
Income

Page 221 of 851 ends

-6- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
Household
Affordable
Units
Household
Affordable
Units)
One 5 24
Two 37 22
Three 51 -0-
Total 93 46
“Affordable Rent” shall mean rent for an Affordable Unit, including a Reasonable Utility Allowance, determined pursuant to California Health and Safety Code Section 50053(b) and the state regulations adopted by the California Department of Housing and Community Development (“HCD”) pursuant thereto, as amended from time to time, based upon the AMI adjusted for a Household Size Appropriate to the Affordable Unit. More specifically, (1) for each of the 93 Affordable Units reserved for Extremely Low Income Households, the maximum monthly Affordable Rent, including a Reasonable Utility Allowance, may not exceed thirty percent (30%) of thirty percent (30%) of the AMI, adjusted for a Household Size Appropriate to the Affordable Unit, divided by twelve, and (2) for each of the 46 Affordable Units reserved for 59% AMI Low Income Households, the maximum monthly Affordable Rent, including a Reasonable Utility Allowance, may not exceed thirty percent (30%) of fifty-nine percent (59%) of the AMI, adjusted for a Household Size Appropriate to the Affordable Unit, divided by twelve. “AMI” shall mean the area median income for Riverside County as published by the California Department of Housing and Community Development pursuant to Health and Safety Code Section 50052.5, or successor statute, as adjusted for family size in accordance with the state regulations adopted pursuant to California Health and Safety Code Section 50052.5, provided, however, that at any time the Project is subject to a CTCAC extended use agreement, CTCAC’s rules and regulations regarding area median income shall control. “CTAC” means the California Tax Credit Allocation Committee. “Extremely Low Income Household” shall mean persons and families whose income does not exceed the qualifying limit for extremely low income households set forth in California Health and Safety Code Section 50106 and Title 25 of the California Code of Regulations, as such statute and regulations may be amended from time to time. “Household Size Appropriate to the Affordable Unit” shall have the meaning set forth in California Health and Safety Code Section 50052.5(h), as amended from time to time. “59% AMI Low Income Household” shall mean persons and families whose income does not exceed the qualifying limit for lower income households as set forth in California Health and Safety Code Section 50079.5 and Title 25 of the California Code of Regulations, including Section 6912, as such statute and regulations may be amended from time to time; provided that the qualifying limit is capped at 59% AMI.
“Reasonable Utility Allowance” shall mean a utility allowance for utilities paid by a tenant (not including telephone, internet or cable service) utilizing the utility allowance schedule

Page 222 of 851 ends

-7- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
published annually by the Housing Authority of the County of Riverside or as calculated using the California Utility Allowance Calculator developed by the California Energy Commission and approved by CTCAC.
“Required Covenant Period” shall mean the period commencing on the date all units in the Project have been completed as evidenced by the City’s issuance of a final Certificate of Occupancy for the Project, and ending as of the fifty-fifth (55th) anniversary thereof.

1.2 Rules of Construction.

1.2.1 The singular form of any word used herein, including the terms defined herein shall include the plural and vice versa. The use herein of a word of any gender shall include correlative words of all genders.

1.2.2 Unless otherwise specified, references to articles, sections, and other subdivisions of this Agreement are to the designated articles, sections, and other subdivisions of this Agreement as originally executed. The words “hereof,” “herein,” “hereunder,” and words of similar import shall refer to this Agreement as a whole.

1.2.3 All of the terms and provisions hereof shall be construed to effectuate the purposes set forth in this Agreement and to sustain the validity hereof.

1.2.4 Headings or titles of the several articles and sections hereof and the table of contents appended to copies hereof shall be solely for convenience of reference and shall not affect the meaning, construction, or effect of the provisions hereof.

ARTICLE 2. ONGOING PROJECT OBLIGATIONS.

2.1 Project and Affordable Units.

The Owner shall develop and construct the Project on the Site in conformity with the applicable governmental permits, approvals and the Loan Agreement. Thereafter, during the Required Covenant Period, the Owner agrees that not less than 139 units in the Project shall be Affordable Units, meaning that (a) 93 of such units shall be continually available to and occupied by, or held vacant for occupancy only by, Extremely Low Income Households and (b) 46 of such units shall be continually available to and occupied by, or held vacant for occupancy only by, 59% AMI Low Income Households, and the Owner shall use good faith efforts to give preference to military veterans. All of the rental units in the Project shall be similarly constructed and generally constructed at the same time. All of the rental units in the Project shall be of comparable quality.

The Owner agrees that, to the extent commercially reasonable, Affordable Units will not be underutilized. No persons shall be permitted to occupy any Affordable Unit in excess of the applicable limit of maximum occupancy set by the City’s Municipal Code and the laws of the State of California, or by Authority Resolution HA-84 adopted on December 14, 2017.

Page 223 of 851 ends

-8- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

2.2 Residential Rental Property.

The Owner covenants to operate the Project as residential rental property. During the Required Covenant Period, the Affordable Units will be held and used for the purpose of providing residential living, and the Owner shall own, manage and operate, or cause the management and operation of, the Project to provide such affordable rental housing. All of the rental units in the Project with the exception of two (2) two-bedroom manager units will be available for rental on a continuous basis to members of the general public and the Owner will not give preference to any particular class or group in renting the units in the Project, except for the above good faith preference for military veterans, and except as required under any other required regulatory agreement for the Project. The Owner shall not convert any Affordable Unit(s) to condominiums or cooperative ownership or sell condominium or cooperative conversion rights to any Affordable Unit(s) during the term of this Agreement.

2.3 Extremely Low and 59% AMI Low Income Households.

2.3.1 Income Qualification; Initial Certification. Subject to the applicable provisions hereof, throughout the Required Covenant Period, Affordable Units will be exclusively occupied by, or available for occupancy only by, Extremely Low and 59% AMI Low Income Households as described above. Prior to the rental or lease of an Affordable Unit and in accordance with Section 2.6 hereof, the Owner will obtain and maintain on file a Household Income Certification (“Income Certification”) substantially in the form attached hereto as Exhibit “B” and incorporated herein by this reference for each Extremely Low and 59% AMI Low Income Household, as applicable, and shall provide copies of same to the Authority at such times as the Authority may, from time to time, reasonably require. In addition, the Owner will provide such further information as may reasonably be required in the future by the Authority. The Income Certification shall be dated immediately prior to the applicable household’s initial occupancy of an Affordable Unit. The Owner shall make a good faith effort to verify that the income provided by an applicant in an Income Certification is accurate by taking any one or more of the following steps as part of the verification process for all household members over the age of eighteen (18) as appropriate:
(i) Obtain two (2) pay stubs for the two (2) most recent pay periods; (ii) Obtain a true copy of an income tax return for the most recent tax year in which a return was filed;
(iii) Obtain an income verification form from the household member’s current employer;
(iv) Obtain an income verification form from the Social Security Administration and/or the State Department of Social Services, or its equivalent, if the household member receives assistance from either of those agencies; (v) If the household member is unemployed and has no tax return, obtain another form of independent verification; or

Page 224 of 851 ends

-9- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
(vi) Obtain such other documentation as may be reasonably acceptable pursuant to Title 25 of the California Code of Regulations or CTCAC, as amended from time to time, to verify income.

2.3.2 Certificate of Continuing Program Compliance; Annual Report; Annual Monitoring/Administration Fee. Throughout the Required Covenant Period, the Owner will prepare and submit to the Authority, at such periodic frequency as the Authority might reasonably require, but not more than once annually, a Certificate of Continuing Compliance in substantially the form attached hereto as Exhibit “C” and incorporated herein by this reference, and executed by the Owner. The Owner will also prepare and submit to the Authority on or before each anniversary date of the commencement of the Required Covenant Period, and for the preceding calendar year, a report in form and substance reasonably satisfactory to the Authority summarizing the vacancy rate of the Project, including the number of Affordable Units held vacant for occupancy by Extremely Low and 59% AMI Low Income Households for such calendar year, including the number of Affordable Units rented to military veterans. Owner shall pay an annual monitoring/administration fee in the amount of Ten Thousand Dollars ($10,000.00), increasing by three percent (3%) annually, from Owner’s share of Project Net Cash Flow, (as defined in the Loan Agreement), concurrently with Owner’s payments of Project Net Cash Flow to Authority under the Authority Loan.

2.4 Affordable Rent. Throughout the Required Covenant Period, an Affordable Rent shall be charged to the Extremely Low and 59% AMI Low Income Household occupants of Affordable Units, as more specifically described above.

2.5 Rent Increases. Rents for Affordable Units may be increased not more than once per year and twelve (12) months must have elapsed since the date of the tenant’s initial occupancy or the last rent increase. The rents charged following such an increase, or upon a vacancy and new occupancy by an Extremely Low or 59% AMI Low Income Household, as applicable, shall not exceed the applicable Affordable Rent. The Owner shall, consistent with applicable law, give proper written notice to tenants of all rent increases, and upon written request, provide the Authority with reasonable detail concerning the amount of and rationale for such rent increases.

2.6 Income Recertification of Affordable Units. Annually, on the anniversary date of occupancy of an Affordable Unit by an Extremely Low or 59% AMI Low Income Household, as applicable, the Owner shall obtain and maintain on file an annual income certification, in form and substance reasonably satisfactory to the Authority (but CTCAC’s required form of income certification shall be deemed satisfactory, together with any other information reasonably requested by the Executive Director of the Authority), from each household occupying an Affordable Unit, based upon the current income of each household member over the age of eighteen (18). The Owner shall make a good faith effort to verify that the income provided by the household is accurate in accordance with Section 2.3.1, above.

2.6.1 A rental unit occupied by a household that qualifies as an Extremely Low or 59% AMI Low Income Household at the time the household first occupies an Affordable Unit shall be deemed to continue to be so occupied until a recertification of such household’s income demonstrates that such household no longer qualifies as an Extremely Low or 59% AMI Low Income Household, as applicable. At such time as a household ceases to qualify as an Extremely

Page 225 of 851 ends

-10- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
Low or 59% AMI Low Income Household, as applicable, based on income recertification, such Affordable Unit shall continue to be treated as a qualifying household for purposes of Owner’s compliance with this Agreement, provided, however, that the Owner shall designate the next available unit (one that is not occupied by a tenant) with the same number of bedrooms as the occupied Affordable Unit and it shall be leased to an Extremely Low or 59% AMI Low Income Household, as applicable, so that the number of Affordable Units occupied by or reserved for occupancy by Extremely Low or 59% AMI Low Income Households will remain constant. For purposes of this Agreement, such designated unit will be considered an Affordable Unit if it is held vacant and available solely for occupancy by an Extremely Low or 59% AMI Low Income Household, as applicable, and, upon occupancy, the income eligibility of the household as an Extremely Low or 59% AMI Low Income Household is verified and the unit is rented at the applicable Affordable Rent.

2.7 Lease or Occupancy Agreement. Prior to the rental or lease of an Affordable Unit to an Extremely Low or 59% AMI Low Income Household, the Owner shall require the tenant to execute a written lease or occupancy agreement. The Owner shall maintain on file throughout the Required Covenant Period and for a four (4) year period thereafter, the executed lease or occupancy agreement of each tenant occupying an Affordable Unit. The form of lease or occupancy agreement used by the Owner for the lease or rental of Affordable Units shall be that which is reasonable and customary in affordable residential leasing. In addition, each lease or occupancy agreement for an Affordable Unit shall (i) provide that the tenants of such Affordable Unit shall be subject to annual recertification of income and subject to rental increases in accordance with Sections 2.5 and 2.6 of this Agreement, and (ii) contain a provision to the effect that the Owner has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the Affordable Unit, and that any material misstatement in such certification (whether or not intentional) may be cause for immediate termination of such lease or occupancy agreement.

2.7.1 The Owner shall refrain from restricting the rental or lease of Affordable Units on the basis of race, color, religion, sex, marital status, disability, ancestry or national origin of any person.

2.7.2 The covenants established herein shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Authority, and its successors and assigns, and shall burden and run with the Site.

2.7.3 The Authority is deemed to be the beneficiary of the terms and provisions of the covenants herein, both for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, for whose benefit these covenants running with the land have been provided.

2.8 Security Deposits. The Owner may require security deposits on Affordable Units in amounts which are consistent with applicable law.

2.9 Additional Information; Books and Records. The Owner shall provide any additional information concerning the Affordable Units reasonably requested by the Authority.

The Owner will maintain complete and accurate records pertaining to the Affordable Units throughout the Covenant Period and for a four (4) year period thereafter. The Authority shall have

Page 226 of 851 ends

-11- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
the right upon written notice of no less than two (2) business days to the Owner, at any time during normal business hours of 9:00 am to 5:00 pm, to examine of all books, records or other documents maintained by the Owner or by any of the Owner’s agents which pertain to any Affordable Unit, including all executed leases or occupancy agreements and all Income Certifications, and obtain copies of any requested executed leases, occupancy agreements and Income Certifications within ten (10) business days following such examination and the Authority’s written request.

2.10 Specific Performance. The Owner hereby agrees that specific enforcement of the Owner’s agreement to comply with the allowable rent and occupancy restrictions and covenants contained herein is one of the reasons and consideration for the Authority having entered into the Loan Agreement, and that, in the event of the Owner’s breach of such requirements, potential monetary damages to the Authority, as well as to existing and prospective Extremely Low or 59% AMI Income Households, would be difficult, if not impossible, to evaluate and quantify.

Therefore, in addition to any other relief to which the Authority may be entitled as a consequence of the breach hereof, the Owner agrees to the imposition of the remedy of specific performance against it in the case of any event of default by the Owner in complying with any provision of this Agreement beyond any applicable notice and cure period.

2.11 Audit. The Authority shall have the right to perform an audit of the Project to determine compliance with the provisions of this Agreement. Such audit shall not be undertaken more often than once each calendar year. All costs and expenses associated with the audit shall be paid by the Owner.

2.12 Management. The Owner and/or the management agent (if not the Owner) shall operate the Project in a manner that will provide decent, safe and sanitary residential facilities to the occupants thereof, and will comply with provisions of this Agreement. Upon the written request of the Authority, the Owner shall cooperate with the Authority in the periodic review (but not more than once each calendar year) of the management practices and financial status of the Affordable Units, which shall include a description of the means by which preference is given in good faith to military veterans. The purpose of each periodic review will be to enable the Authority to determine if the Affordable Units are being operated and managed in accordance with the requirements and standards of this Agreement. Results of such Authority review shall be provided to the Owner, and, if the Authority finds evidence of material noncompliance the Authority shall have the right to require the Owner to make modifications that are reasonably necessary to ensure the objectives of this Agreement are met.

2.13 Management Contract. The Owner shall cause the Project to be managed in a prudent and business-like manner, consistent with good property management standards for other comparable high quality, well-managed affordable rental housing projects in the City of Palm Desert. The Owner shall be responsible for all repair and maintenance functions of the Project, including ordinary maintenance and replacement of capital items. The Owner shall ensure maintenance of units and common areas in accordance with local health, building and housing codes. The Owner shall contract with an experienced property management company or property manager, to operate and maintain the Project (“Property Manager”). Such contract shall be subject to prior written approval by the Authority and shall contain a provision allowing the Owner to terminate the contract without penalty upon no more than thirty (30) days' notice.

Page 227 of 851 ends

-12- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
The Owner will develop a management plan and submit such plan to the Authority for reasonable approval (the “Property Management Plan”). The Property Management Plan shall include the following:
a. The role and responsibility of the Owner and its delegation of authority, if any, to the Property Manager;
b. Personnel policy and staffing arrangements, including ongoing training of staff in best practices for serving the Project tenants; c. Plans and procedures for publicizing and achieving early and continued occupancy;
d. Procedures for determining tenant eligibility, and selecting tenants, and for certifying and annually recertifying household status, income and size; e. Plans for carrying out an effective maintenance and repair program; f. Rent collection policies and procedures;
g. Plans for enhancing tenant-management relations;
h Appeal and grievance procedures; and
i. Description of how service staff and property management staff will work together to prevent evictions and to facilitate the implementation of reasonable accommodation policies.

Upon a determination by the Authority that the Property Manager has failed to operate the Project in accordance with the Property Management Plan, the Authority shall provide written notice to the Owner specifying the Property Manager's breach of the Property Management Plan and providing the Owner with thirty (30) days to cure the specified breach. If the Owner shall fail to cure the specified breach within such thirty (30) day despite its good faith effort to do so, and if such cure is of the nature to take longer than thirty (30) days, the Owner shall commence the cure during the thirty (30) day period and complete the cure by the conclusion of one hundred eighty (180) days following the Owner’s receipt of the Authority’s notice, or in such other time period as the parties may mutually agree. If the Owner has failed to cure the breach of the Property Management Plan by the expiration of the relevant cure period, the Authority may immediately provide a written notice of such failure to the Owner and the Owner shall promptly terminate the existing Property Manager and contract with an alternative qualified management agent reasonably acceptable to the Authority to operate the Project, or to make such other arrangements as the Authority deems reasonably necessary to ensure performance of the functions and obligations set forth in Property Management Plan.

Notwithstanding the foregoing, any change in property management must also be approved by California Debt Limit Allocation Committee (CDLAC), California Tax Credits (CTAC), and the lenders and investors involved in the Project if required by such parties.

Page 228 of 851 ends

-13- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

2.14 Binding for Term. It is intended by the Parties that except as otherwise expressly provided herein, the provisions of this Agreement shall apply to the Project throughout the entire term hereof, as established in Section 3.1 below.

ARTICLE 3. TERM AND RECORDATION.

3.1 Term of Agreement. This Agreement shall remain in full force and effect for the Required Covenant Period, unless the Owner and the Authority agree, in writing, to terminate this Agreement prior to the expiration of the Required Covenant Period. Unless terminated earlier pursuant to the prior sentence of this Section 3.1, the Parties intend that the provisions and effect of this Agreement and specifically of Article 2 hereof, shall remain in full force and effect for the entire Required Covenant Period.

3.2 Agreement to Record. The Owner represents, warrants, and covenants that this Agreement will be recorded in the real property records of Riverside County.

3.3 Suspension of Restrictions. Notwithstanding the generality of the foregoing provisions of this Article 3 or any other provisions hereof, this Agreement and all of the terms and restrictions contained herein shall be suspended for any period of involuntary noncompliance as a result of unforeseen events such as fire or act of God which leaves the entire Project uninhabitable (and the proceeds of insurance available to the Owner as a result thereof are insufficient to reconstruct the Project), or a change in a federal or state law or an action by the federal government, the State or a court of competent jurisdiction, after the date of recordation hereof, that prevents the Authority from enforcing the provisions of this Agreement, or a condemnation or a similar event.

ARTICLE 4. DEFAULT; REMEDIES.

4.1 An Event of Default. Each of the following shall constitute an “Event of Default” by the Owner under this Agreement:

4.1.1 Failure by the Owner to duly perform, comply with and observe any of the conditions, terms, or covenants of any agreement with the Authority concerning the Project, or of this Agreement, if such failure remains uncured thirty (30) days after written notice of such failure from the Authority to the Owner in the manner provided herein or, with respect to a default that cannot be cured within thirty (30) days, if the Owner fails to commence such cure within such thirty (30) day period or thereafter fails to diligently and continuously proceed with such cure to completion. However, if a different period or notice requirement is specified under any other section of this Agreement, then the specific provision shall control.

4.1.2 Any representation or warranty contained in this Agreement or in any application, financial statement, certificate, or report submitted by the Owner to the Authority proves to have been incorrect in any material respect when made.

4.1.3 A court having jurisdiction shall have made or rendered a decree or order:
(i) adjudging the Owner to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking reorganization of the Owner or seeking any arrangement on behalf of the Owner under the bankruptcy laws or any other applicable debtor’s relief law or statute of the United States or of any state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of the Owner

Page 229 of 851 ends

-14- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
in bankruptcy or insolvency or for any of its properties; or (iv) directing the winding up or liquidation of the Owner, providing, however, that any such decree or order described in any of the foregoing subsections shall have continued unstayed or undischarged for a period of ninety (90) days.

4.1.4 The Owner shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment or execution on any substantial part of its property, unless the property so assigned, sequestered, attached, or executed upon shall have been returned or released within ninety (90) days after such event (unless a lesser time period is permitted for cure hereunder) or prior to sale pursuant to such sequestration, attachment, or execution. If the Owner is diligently working to obtain a return or release of the property and the Authority’s and the Authority’s interests hereunder are not imminently threatened in its reasonable business judgment, then the Authority shall not declare a default under this subsection.

4.1.5 The Owner shall have voluntarily suspended its business or dissolved.

4.1.6 The seizure or appropriation of all or, in the reasonable opinion of the Authority, a substantial part of the Project, except for condemnation or similar event initiated by the Authority or any other governmental agency or authority.

4.1.7 There should occur any default declared by any lender under any loan document or deed of trust relating to any loan made in connection with the Project, which loan is secured by a deed of trust or other instrument affecting the Project, and such default remains uncured following the expiration of any applicable cure period.

4.2 Option to Lease. Upon the occurrence and during the continuance of an Event of Default, to cause the Project to meet the requirements of this Agreement, the Owner hereby grants to the Authority the option to lease up to all of the Affordable Units as necessary to achieve compliance with the provisions of Article 2 of this Agreement and for the purpose of subleasing such units in accordance with the requirements of this Agreement. The amount of rental to be paid for such rental units following the exercise of the option by the Authority shall be equal to the applicable Affordable Rent. Any rental paid under any such sublease shall be paid to the Authority without obligation to pay any such rent to the Owner during the pendency of the Owner’s default.

Upon acceptance by the Authority of a cure by Owner or by owner’s limited partner, any lease for Affordable Units with the Authority shall terminate and the Authority shall assign all subleases to Owner.

4.3 Authority Remedies. The Authority shall have the right to mandamus or other suit, action or proceeding at law or in equity to require the Owner to perform its obligations and covenants under this Agreement or to enjoin acts or things which may be unlawful or in violation of the provisions hereof, provided that in any such case the Authority has first provided the required notice of any alleged default and the Owner has had the requisite opportunity to cure pursuant to Section 4.1.1, above.

4.4 Action at Law; No Remedy Exclusive. The Authority may take whatever action at law or in equity as may be necessary to enforce performance and observance of any obligation, agreement or covenant of the Owner under this Agreement. No remedy herein conferred upon or reserved by the Authority is intended to be exclusive of any other available remedy or remedies,

Page 230 of 851 ends

-15- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law, in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of such right or power, but any such right or power may be exercised from time to time and as often as the Authority may deem expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be herein otherwise expressly required or required by law to be given.

ARTICLE 5. GENERAL PROVISIONS.

5.1 Limitations on Recourse. Notwithstanding anything to the contrary contained in this Agreement, except in the event of fraud, intentional waste, or illegal acts, or with regard to any indemnity obligations imposed upon the Owner under the terms of this Agreement, (i) no partner, member, officer or director, as applicable, of the Owner (each, an “Owner Affiliate”) shall have any direct, indirect or derivative personal liability for the obligations of the Owner under this Agreement, and (ii) the Authority shall not exercise any rights or institute any action against any Owner Affiliate directly, indirectly or derivatively for the payment of any sum of money that is or may become payable hereunder.

5.2 Maintenance, Repair, Alterations. The Owner shall maintain and preserve the Project in good condition and repair and in a prudent and businesslike manner. The Owner shall comply with all laws, ordinances, rules, regulations, covenants, conditions, restrictions, and orders of any governmental authority now or hereafter affecting the conduct or operation of the Project or any part thereof or requiring any alteration or improvement to be made thereon. The Owner shall not commit, suffer, or permit any act to be done in, upon, or to the Project or any part thereof in violation of any such laws, ordinances, rules, regulations, or orders. The Owner hereby agrees that the Authority may conduct from time to time (but not more than once per calendar year unless an Event of Default is ongoing) through representatives, upon reasonable notice of no less than forty-eight (48) hours and subject to the rights of tenants, on-site inspections and observation of:
(i) the maintenance and repair of the Project, including a review of all maintenance and repair programs and practices and all reports and records pertaining thereto, including records of expenditures relating thereto; and (ii) such other facilities, practices, and records of the Owner relating to the Affordable Units as the Authority reasonably deems to be necessary or appropriate in order to monitor the Owner’s compliance with the provisions of this Agreement.

5.3 Notices. All notices (other than telephone notices), certificates or other communications (other than telephone communications) required or permitted hereunder shall be sufficiently given and should be deemed given when personally delivered, when sent by telegram, or when sent by facsimile (if confirmed by sending a copy of such transmission by mail the same calendar day), or forty-eight (48) hours following mailing by registered or certified mail, postage prepaid, or twenty-four (24) hours following transmission of such notice by express mail, Federal Express or similar commercial carrier, addressed as follows:

Page 231 of 851 ends

-16- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
If to the Authority:

Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: Housing Division
Phone: (760) 346-0611
Fax: (760) 341-6372
If to the Owner:

A0358 Monterey, L.P.
2000 East 4th Street, Suite 205
Santa Ana, CA 92705
Attn: Mark Bigley
Phone: (714) 323-4006
Email: [email protected]
With a copy to:

Sabelhaus & Strain, LLP
1724 10th Street, Suite 110
Sacramento, CA 95811
Attn: Stephen A. Strain, Esq.

Phone: (916) 444-0286
Email: [email protected]

5.4 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or understood by any of the Parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the Authority and the Owner or the Owner’s agents, employees or contractors, and the Owner shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement for the operation of the Project. The Owner has and hereby retains the right to exercise full control of employment, direction, compensation and discharge of all persons assisting in the performance of services hereunder. In regards to the on-site operation of the Project, the Owner shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding and all other laws and regulations governing such matters. The Owner agrees to be solely responsible for its own acts and those of its agents and employees.

5.5 No Claims. Nothing contained in this Agreement shall create or justify any claim against the Authority by any person the Owner may have employed or with whom the Owner may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the operation of the Affordable Units.

5.6 Conflict of Interests. No member, official or employee of the Authority shall make any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested.

Page 232 of 851 ends

-17- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
No officer or employee of the Owner shall acquire any interest in conflict with or inimical to the interests of the Authority.

5.7 Non-Liability of Officials, Employees and Agents. No member, official, employee or agent of the Authority shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Owner or successor in connection with this Agreement or on any obligation of the Authority under the terms of this Agreement.

5.8 Unavoidable Delay; Extension of Time of Performance. In addition to specific provisions of this Agreement, performance of a construction obligation by any Party hereunder shall not be deemed to be in default where it is due to an “Unavoidable Delay.” “Unavoidable Delay” means a delay due to the elements (including unseasonable weather), fire, earthquakes or other acts of God, strikes, pandemics, labor disputes, lockouts, shortages of construction materials experienced generally in the construction industry in the local area, acts of the public enemy, riots, insurrections or governmental regulation of the sale or transportation of materials, supply or labor; provided, however, that to the extent a delay is caused by any other reason that the Owner reasonably believes is beyond its control, the Owner may request, on a case-by-case basis, that the Authority excuse any such delay as an Unavoidable Delay and the Authority shall make its determinations as to whether such delay constitutes an Unavoidable Delay using its reasonable judgment.

5.9 Indemnity. The Owner shall indemnify, defend and hold harmless the Authority and City, and all of their respective officials, employees and agents (with counsel reasonably satisfactory to the Authority and/or City, as applicable), against any costs, liabilities, damages or judgments arising from claims or litigation of any nature whatsoever brought by third parties and directly or indirectly arising from the Owner’s ownership or operation of the Project, or the Owner’s performance of its obligations under this Agreement, and in the event of settlement, compromise or judgment hold the Authority and City free and harmless therefrom.

Notwithstanding the foregoing, the indemnity provisions contained in this Section 5.9 shall not apply with respect to any costs, liabilities, damages or judgments arising directly or indirectly from the Authority’s rental of units within the Project as described in Section 4.2 hereof. The provisions of this Section 5.9 shall survive the term of this Agreement.

5.10 Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise or failure to exercise one or more of such rights or remedies by either Party shall not preclude the exercise by it, at the same time or different times, of any right or remedy for the same default or any other default by the other Party. No waiver of any default or breach by the Owner hereunder shall be implied from any omission by the Authority to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such wavier shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by the Authority to any act by the Owner requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of

Page 233 of 851 ends

-18- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
any default under this Agreement, nor shall it invalidate any act done pursuant to notice of default, or prejudice the Authority in the exercise of any right, power, or remedy hereunder or under any agreements ancillary or related hereto.

5.11 Applicable Law. This Agreement shall be interpreted under and pursuant to the laws of the State of California.

5.12 Severability. If any term, provision, covenant or condition of this Agreement is held in a final disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.

5.13 Legal Actions. In the event any legal action is commenced to interpret or to enforce the terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing in any such action shall be entitled to recover against the Party not prevailing all reasonable attorneys’ fees and costs incurred in such action (including all legal fees incurred in any appeal or in any action to enforce any resulting judgment), as awarded by a court of competent jurisdiction.

5.14 Binding Upon Successors. This Agreement shall be binding upon and inure to the benefit of the permitted heirs, administrators, executors, successors in interest and assigns of each of the Parties. Any reference in this Agreement to a specifically named Party shall be deemed to apply to any successor, heir, administrator, executor or assign of such Party who has acquired an interest in compliance with the terms hereof or under law.

5.15 Time of the Essence. In all matters under this Agreement, time is of the essence.

5.16 Approval by the Authority. Any approvals required under this Agreement to be made by the Authority shall be made by the Executive Director of the Authority or his or her designee. Any such approval or consent shall not be unreasonably withheld, conditioned, delayed or made, except where it is specifically provided herein that another standard applies, in which case the specified standard shall apply.

5.17 Complete Understanding of the Parties. This Agreement and the attached Exhibits constitute the entire understanding and agreement of the Parties with respect to the matters described herein.

5.18 Covenants to Run With the Land. The Owner hereby subjects the Project to the covenants, reservations, and restrictions set forth in this Agreement. The Authority and the Owner hereby declare their express intent that the covenants, reservations, and restrictions set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Owner’s successors in title to the Project; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Project or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments. No breach of any of the provisions of this

Page 234 of 851 ends

-19- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
Agreement shall defeat or render invalid the lien of a mortgage or deed of trust made in good faith and for value encumbering the Property or any interest of the Owner therein.

5.19 Burden and Benefit. The Authority and the Owner hereby declare their understanding and intent that: (i) the burden of the covenants, reservations, restrictions, and agreements set forth herein touch and concern the Property and the Project, in that Owner’s legal interest in the Project is rendered less valuable thereby, (ii) the covenants, reservations, restrictions, and agreements set forth herein directly benefit the Property and the Project (a) by enhancing and increasing the enjoyment and use of the Project by certain Extremely Low, and 59% AMI Low Income Households, the intended beneficiaries of such covenants, reservations, restrictions, and agreements, (b) by making possible the obtaining of advantageous financing for the Property and the Project, and (c) by furthering the public purposes advanced by the Authority, and (iii) the covenants, reservations, restrictions and agreements set forth herein shall run with the Property and shall be binding for the benefit of and enforceable by the Authority and its successors and assigns for the entire Term of this Agreement.

5.20 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.

5.21 Amendments. This Agreement may be amended only by the written agreement of the Authority and the Owner.

5.22 Third Party Beneficiaries. The City shall be a third-party beneficiary of this Agreement with the right of enforcement. Other than the City, there shall be no third-party beneficiaries of this Agreement.
[Remainder of this page intentionally left blank]
[Signatures appear on next page]

Page 235 of 851 ends

-20- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
WHEREFORE, the undersigned has executed this Agreement as of the date first-above written.

OWNER:

A0358 MONTEREY, L.P.,
A California limited partnership
By: A0358 Monterey Admin Holdings LLC
A California limited liability company
Its: Administrative General Partner
By:

Name:

Its:

By: A0358 Monterey Holdings LLC,
A California limited liability company
By:

Name:

Its:

AUTHORITY:

PALM DESERT HOUSING AUTHORITY,
a public body, corporate and politic
By:

Name: Kathleen Kelly
Its: Chairman
ATTEST:

Anthony J. Mejia, Secretary
APPROVED AS TO FORM:

Robert W. Hargreaves, City Attorney

Page 236 of 851 ends

-21- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
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 ____________, 2023, before me, ________________________________________________, (insert name and title of the officer)
Notary Public, personally appeared ________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature (Seal)

Page 237 of 851 ends

-22- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

State of California )
County of _
On ____________, 2023, before me, ________________________________________________, (insert name and title of the officer)
Notary Public, personally appeared ________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature (Seal)

Page 238 of 851 ends

-23- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

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)

Page 239 of 851 ends

EXHIBIT “A”

LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Palm Desert, County of Riverside, State of California, described as follows:

PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN, COUNTY

OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ON THE CENTERLINE OF MONTEREY AVENUE; THENCE N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE NORTHERLY LINE OF PARCEL 2 OF PARCEL MAP WAIVER NO. 99-15, RECORDED OCTOBER 15, 1999, AS INSTRUMENT NO. 1999-457541, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, A DISTANCE OF 1314.94 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29, THE NORTHERLY LINE OF SAID PARCEL 2 AND CONTINUING ALONG THE NORTHERLY LINE OF PARCEL 1 OF SAID PARCEL MAP WAIVER NO. 99-15, A DISTANCE OF 1314.61 FEET TO THE CENTER ONE QUARTER (C1/4) CORNER OF SAID SECTION 29, SAID POINT BEING ALSO THE NORTHEAST CORNER OF SAID PARCEL 1;
THENCE S00°09'04"E ALONG THE NORTH-SOUTH ONE QUARTER (N-S 1/4) SECTION LINE OF SAID SECTION 29 AND THE EASTERLY LINE OF SAID PARCEL 1, A DISTANCE OF 489.00 FEET TO THE NORTHEAST CORNER OF THAT PARCEL OF LAND

CONVEYED TO THE PALM SPRINGS UNIFIED SCHOOL DISTRICT BY GRANT DEED, RECORDED APRIL 28, 2006, AS INSTRUMENT NO. 0308440, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA;
THENCE S89°58'35"W ALONG THE NORTHERLY LINE OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 0308440, A DISTANCE OF 1270.59 FEET TO THE

NORTHWEST CORNER OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 0308440, SAID POINT BEING ALSO A POINT ON A NON TANGENT CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1700.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS 576°44'54"W;

Page 240 of 851 ends

A-25- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN, COUNTY

OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ON THE CENTERLINES OF MONTEREY AVENUE AND AVENUE 35; THENCE N89°58'35"E ALONG THE EASTWEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE CENTERLINE OF SAID AVENUE 35, A DISTANCE OF 1314.94 FEET TO THE CENTERLINE INTERSECTION OF SAID AVENUE 35 AND GATEWAY DRIVE; THENCE CONTINUING N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE CENTERLINE OF SAID AVENUE 35, A DISTANCE OF 71.07 FEET; THENCE S00°01'25"E, A DISTANCE OF 54.00 FEET TO THE SOUTHERLY LINE OF PARCEL NO. 2004-02.11 (AVENUE 35) CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING 54.00 FEET SOUTHERLY OF THE CENTERLINE OF SAID AVENUE 35, AS MEASURED AT RIGHT ANGLES THERETO, SAID POINT BEING ALSO THE TRUE POINT OF BEGINNING;
THENCE N89°58'35"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35), A DISTANCE OF 782.06 FEET TO THE POINT OF CURVATURE OF A CURVE CONCAVE TO THE SOUTHWEST, HAVING A RADIUS OF 946.00 FEET;

CURVATURE OF A CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1054.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS S13°19'14"W; THENCE SOUTHEASTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35) AND THE ARC OF SAID CURVE, A DISTANCE OF 185.57 FEET THROUGH A CENTRAL ANGLE OF 10°05'15";
THENCE 552°30'03"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35), A DISTANCE OF 27.78 FEET TO THE WESTERLY LINE OF PARCEL NO. 2004-02.12 ("C" STREET) CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA;

Page 241 of 851 ends

A-26- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc
THENCE S00°09'04"E ALONG THE WESTERLY LINE OF SAID PARCEL NO. 2004-02.12 ("C" STREET), A DISTANCE OF 365.78 FEET TO THE NORTHERLY LINE OF THAT

PARCEL OF LAND CONVEYED TO THE PALM SPRINGS UNIFIED SCHOOL DISTRICT (P.S.U.S.D.) BY GRANT DEED, RECORDED APRIL 28, 2006, AS INSTRUMENT NO. 2006- 0308440, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA;
THENCE 589°58'34"W ALONG THE NORTHERLY LINE OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 2006-0308440 (P.S.U.S.D.), A DISTANCE OF 1176.61 FEET TO THE EASTERLY LINE OF PARCEL NO. 2004-02.10 (GATEWAY DRIVE) CONVEYED TO THE CITY OF PALM SPRINGS BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ALSO A POINT ON A NONTANGENT CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1646.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS S76°15'06"W;

APN: 694-130-017 (Affects a portion of the land);
694-130-018 (Affects a portion of the land);
694-130-019 (Affects a portion of the land); and
694-130-020 (Affects a portion of the land)

Page 242 of 851 ends

EXHIBIT “B”

HOUSEHOLD INCOME CERTIFICATION
(Attached.)

Page 243 of 851 ends

B
-28- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

Page 244 of 851 ends

B
-29- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

Page 245 of 851 ends

B
-30- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

Page 246 of 851 ends

EXHIBIT “C”

CERTIFICATE OF CONTINUING COMPLIANCE

Page 247 of 851 ends

C
-32- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

Page 248 of 851 ends

C
-33- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

Page 249 of 851 ends

C
-34- P6401-0001\2851004v1.doc
P6401-0001\2815992v67.doc

Page 250 of 851 ends

EXHIBIT “D”
2023 RENTAL RATES

Page 251 of 851 ends

Page 252 of 851 ends

LOAN AGREEMENT
THIS LOAN AGREEMENT (“Agreement”) is dated as of _______________, 2023 and is entered into by and between the PALM DESERT HOUSING AUTHORITY (“Lender”), and A0358 MONTEREY, L.P., a California limited partnership (“Borrower”).

R E C I T A L S:

A. Borrower owns the land located in the City of Palm Desert, County of Riverside, State of California (the “City”), more particularly described on Exhibit “A” attached hereto (together with any improvements thereon, the “Property”).

B. Borrower intends to construct a 176-unit multi-family residential apartment community for households with incomes up to 80% of the area median income and related improvements on the land that are described on Exhibit “B”.

C. Borrower has requested that Lender make a loan to Borrower from low income housing set aside funds in the principal amount of Seven Million Two Hundred Thirty-Five Thousand Dollars ($7,235,000.00), to partially fund the construction of the Improvements (as hereinafter defined) (the “Loan”) and to be used after all available tax credit equity to pay for a portion of the costs of the Improvements, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, the Parties agree as follows:

A G R E E M E N T:

1. DEFINITIONS AND EXHIBITS.

1.1 Definitions. The following initially capitalized words and terms have the meanings set forth in this Section 1.1 wherever used in this Agreement, unless otherwise provided to the contrary:

1.1.1 “City Housing Agreement” shall mean the Housing Agreement attached hereto as Exhibit “I”.

1.1.2 “Closing” shall mean the date on which the Deed of Trust is recorded in the Official Records of Riverside County, California.

1.1.3 “Construction Plans” means the construction plans, specifications and related documents consistent with the Scope of Development attached hereto as Exhibit “B” for the design and construction of the Improvements.

1.1.4 “Deed of Trust” shall mean a Deed of Trust and Assignment of Rents in the form attached hereto as Exhibit “C”, executed by Borrower for the benefit of Lender and, acknowledged (which is to be recorded against the Property in the Official Records of Riverside County, California at the Closing).

Page 253 of 851 ends

-2-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc

1.1.5 “Entitlements” shall mean all authorizations, approvals, rights, maps, licenses, permits, franchises, certificates, instruments, documents, agreements, variances and other land use approvals required for the Development.

1.1.6 “Governmental Authority” shall mean any federal, state or local governments, and all subdivision thereof, including any city, authority, board, bureau, commission, department or other public body, including any court, administrative tribunal or public utility.

1.1.7 “Improvements”, “Development” or “Project” shall mean the project/work described in the Scope of Development attached hereto as Exhibit “B”.

1.1.8 “Loan” shall mean the loan contemplated by this Agreement as defined in the Recitals.

1.1.9 “Loan Documents” shall mean this Agreement, the Note, the Deed of Trust, the Regulatory Agreement, the City Housing Agreement, the Notice and all other documents and instruments executed and delivered, or to be executed and delivered, in connection with the Loan (including the Acknowledgment referred to in Section 3.6.1 below).

1.1.10 “Note” shall mean a Secured Promissory Note, in the form attached hereto as Exhibit “D”, executed by Borrower and payable to City.

1.1.11 “Notice” shall mean a Notice of Affordability Restrictions in the form attached hereto as Exhibit “E”.

1.1.12 “Operating Year” shall mean each calendar year or portion thereof during which the Project is operating.

1.1.13 “Parties” shall mean Lender and Borrower, collectively, and “Party” shall mean Lender or Borrower, individually.

1.1.14 “Person” shall mean a natural person, a partnership, a joint venture, an unincorporated association, a limited liability company, a corporation, a trust, any other business association or any Governmental Authority.

1.1.15 “Potential Default” shall mean any condition or event that could, with the lapse of time/expiration of applicable cure period under this Agreement after any written notice to Borrower thereof required by this Agreement is delivered, constitute a “Default” (as defined in Section 5.1 below).

1.1.16 “Project Net Cash Flow” shall mean the revenues derived from the operation of the Development minus (i) all real estate and personal property taxes and assessments, insurance premiums, monitoring fees and reasonable costs of maintenance, operation and management incurred by the Borrower in connection with the operation and maintenance of the Development, (ii) annual property management fees not to exceed four and one-half percent (4.5%) of the revenues; (iii) a minimum of Eighty-Five Thousand Dollars ($85,000.00) per year in tenant services provided on-site (which amount shall increase annually by the rate of increase

Page 254 of 851 ends

-3-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc
in the CPI from the prior calendar year), (iv) the annual costs of servicing the senior construction loan/financing (and any approved refinancing thereof) or other sources of financing approved by Lender (other than the Loan); (v) amounts necessary to maintain a guaranty or other form of security or bond for an operation reserve account which shall be capitalized in the amount not to exceed Seven Hundred Forty-One Thousand Dollars ($741,000.00), including any replenishment of such reserve (vi) amounts deposited into a replacement initially capitalized reserve account in the sum of not to exceed $300/unit per annum, increasing three percent (3%) per annum and any ongoing deposits to such reserve (vi) the repayment of any amounts loaned by the Borrower or its partners to the Development for material Development costs which costs were not reasonably foreseeable, and which loan, and the items for which funds were expended pursuant to such loan, are approved in advance by the Lender’s Executive Director, (vii) deferred developer fees in the total maximum amount of Nine Million Five Hundred Sixty-Six Thousand One Hundred NinetyFour Dollars ($9,566,194.00), (x) a Limited Partner monitoring fee in the annual amount of Seven Thousand Five Hundred Dollars ($7,500.00); (xi) a managing general partner fee in the annual amount of Fifteen Thousand Dollars ($15,000.00), which may increase up to three percent (3%), annually; (xii) an annual monitoring/administration fee in the annual amount of Ten Thousand Dollars ($10,000.00), increasing by three percent (3%) annually) payable to the Authority under the Housing Agreement; and (xiii) any unpaid tax credit adjuster payments due to the limited partner of Borrower. The amounts of the operation reserves and replacement reserves described above may increase in accordance with the annual percentage increases from the date hereof in the Consumer Price Index, U.S. City Average, All Urban Consumers as published by the U.S. Bureau of Labor Statistics (the “CPI”) or as required for the Borrower limited partner or any senior lender.

Project Net Cash Flow shall be determined by Borrower and Lender on a cash basis without regard to any carry-over profit or loss from any prior calendar year. Borrower and Lender shall determine the amount of Project Net Cash Flow annually, on or before April 15 for the preceding Operating Year.

1.1.17 “Property” shall have the meaning provided in Recital A, but shall also mean portions thereof or interests therein as the context requires.

1.1.18 “Preliminary Budget” shall mean the budget for the costs of the Project attached hereto as Exhibit “F”.

1.1.19 “Regulatory Agreement” shall mean the Housing Agreement in the form attached hereto as Exhibit “G”.

1.1.20 “Schedule of Performance” shall mean the schedule for the completion of the Improvements attached to this Agreement as Exhibit “H”.

1.2 Exhibits. The following exhibits are attached to this Agreement and incorporated into, and made a part of, this Agreement by this reference:

1.2.1 Exhibit “A”: Legal Description.

1.2.2 Exhibit “B”: Scope of Development.

1.2.3 Exhibit “C”: Form of Deed of Trust.

Page 255 of 851 ends

-4-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc

1.2.4 Exhibit “D”: Form of Promissory Note.

1.2.5 Exhibit “E”: Form of Notice of Affordability Restrictions.

1.2.6 Exhibit “F”: Preliminary Project Budget.

1.2.7 Exhibit “G”: Form of Housing Agreement (LMIHF) or “Regulatory Agreement”.

1.2.8 Exhibit “H”: Schedule of Performance.

1.2.9 Exhibit “I”: Form of Housing Agreement (City).

2. CONSTRUCTION OF IMPROVEMENTS.

2.1 Construction Pursuant to Plans. The Improvements shall be constructed in accordance with final Construction Plans approved by the City and the terms and conditions of the permits and approvals issued or to be issued by the City.

2.2 Commencement and Completion of Improvements; Schedule of Performance. Borrower shall commence construction of the Improvements no later than the applicable date set forth in the Schedule of Performance, diligently prosecute to completion the construction of the Improvements no later than the applicable date set forth in the Schedule of Performance, and Borrower shall otherwise comply with the Schedule of Performance, in each case subject to Section 6.12 below (Force Majeure).

2.3 Compliance with Applicable Law. Borrower shall cause all construction to be performed in compliance with: (a) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter; (b) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental authority now having or hereafter acquiring jurisdiction; (c) all applicable permits and governmental approvals.

2.4 Monthly Progress Reports. Until such time as Borrower has completed the Improvements, Borrower shall provide Lender with monthly progress reports (within 30 days of the end of each calendar month for the previous calendar month) regarding the status of the construction of the Improvements.

2.5 Construction Responsibilities. Borrower shall be solely responsible for all aspects of Borrower’s conduct in connection with the Improvements, including (but not limited to) the quality and suitability of the plans and specifications, the supervision of construction work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors, suppliers, consultants, and property managers. Any review or inspection undertaken by Lender with reference to the Improvements is solely for the purpose of determining whether Borrower is properly discharging its obligations, and should not be relied upon by Borrower or by any third parties as a warranty or representation as to the quality of the design or construction of the Improvements, or for any other purpose.

Page 256 of 851 ends

-5-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc

2.6 Mechanics’ Liens, Stop Notices, and Notices of Completion. If any claim of lien is filed against the Property or a stop notice with respect to the Loan is served on Lender or any other lender or other third party in connection with the Improvements, then Borrower shall, subject to Borrower’s right to contest such lien in good faith and in accordance with applicable law, within ninety (90) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to Lender a surety bond from a surety acceptable to Lender in sufficient form and amount, or provide Lender with other assurance satisfactory to Lender that the claim of lien or stop notice will be paid or discharged.

2.7 Budget Amendments. After the Closing, Borrower shall submit any changes to the Budget to Lender for approval within thirty (30) days after Borrower receives information indicating that actual costs therein vary or will vary from those shown on the Budget, together with evidence that Borrower has funds available from sources other than Lender to pay any cost increases and overruns. Lender will approve or disapprove in writing delivered to Borrower any changes to the Budget in writing within ten (10) days of receipt from Borrower.

Lender’s approval of any change to the Budget will not be unreasonably withheld, conditioned or delayed and any disapproval will include the reasons for such disapproval. Failure by Lender to approve or disapprove any change to the Budget in writing within ten (10) days of receipt from Borrower shall be deemed disapproval.

3. LOAN PROVISIONS.

3.1 Use. The Loan shall be used solely for construction costs of the Project as shown on the Project Budget that exceed any equity funds available for acquisition and construction costs.

3.2 Interest; Payments. The outstanding principal balance of the Loan shall accrue interest as set forth in the Note and such principal and interest shall be payable as set forth in the Note.

3.3 Acceleration. Upon a Default by Borrower under Section 5 below, Lender may elect by written notice to Borrower that all outstanding principal and accrued interest on the Loan shall become due and payable.

3.4 Security. The Note shall be secured by the Deed of Trust.

3.5 Project Net Income Reporting. On or before April 15 of each calendar year following completion of improvements, Borrower shall provide the Lender with an annual report for the Project in form and substance reasonably acceptable to Lender that include annual financial statements with respect to the Project that have been reviewed by an independent certified public accountant (“Annual Financial Report”). In the event the Residual Receipts reported or paid deviate by a deficit of three percent (3%) or more from that amount determined to be owing upon review of Borrower’s submittal and an audit (and the Lender shall have the right to audit Borrower’s books and records for the Project, which shall be kept at the Property), Borrower shall reimburse Lender for its cost to review and shall pay the amounts owing within thirty (30) days after notice from Lender describing such amounts and costs

Page 257 of 851 ends

-6-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc

3.6 Conditions Precedent to Closing. The obligation of Lender to close the Loan is expressly conditioned upon the satisfaction of the following on or before _____________, 2023.

3.6.1 Lender’s receipt of originals of this Agreement, the Regulatory Agreement, the Housing Agreement and the Note, duly executed by Borrower;

3.6.2 No Default or Potential Default by Borrower exists.

3.6.3 First American Title Insurance Company has recorded, or is irrevocably and unconditionally committed to record, the Deed of Trust, the Regulatory Agreement, and the Notice of Affordability Restrictions (and any deeds of trust or other documents required as a condition to any other construction financing for the Project).

3.6.4 First American Title Insurance Company has unconditionally committed to issue a lender’s title insurance policy to Lender in the amount of the Loan insuring the Deed of Trust, with exceptions approved by Lender and otherwise in form and substance acceptable to Lender.

3.6.5 Borrower shall have delivered to Lender copies of Borrower’s organizational documents to Lender (including the partnership agreement for any tax credit limited partnership formed by the Borrower) as well as any other reasonable evidence requested by Lender showing Lender that Borrower has duly authorized the Loan Documents.

3.6.6 The City shall have issued the building permit-ready letter for the improvements and shall have completed its environmental (CEQA) review.

3.6.7 Borrower shall have provided reasonable evidence to the Lender of: (i) the cost of the Improvements (including a GMAX or stip sum construction contract from a reputable bondable contractor) and (ii) that Borrower has debt and equity funds to pay for such costs (and any tax credit equity shall have been committed and available, as shown by reasonable evidence delivered to Lender).

3.6.8 If Lender is requested to execute a subordination agreement with respect to the deed of trust securing senior construction financing, then Lender’s receipt and approval of the loan documents for such senior construction financing.

3.7 Loan Disbursements. Disbursements of the Loan shall be conditioned upon the following additional conditions:
(i) Borrower shall have delivered to Lender a written disbursement request in form and substance reasonably satisfactory to Lender, together with copies of the applicable invoices or other appropriate documentation for the costs to be paid (consistent with the final Project budget) and appropriate mechanics lien waivers for the work performed prior to the date of disbursement (i.e., unconditional progress payment waivers for all costs paid with the previous disbursement, and conditional progress payment waivers for the costs to be paid with the current disbursement, provided that final waivers shall be provided as a condition to the final disbursement).

Page 258 of 851 ends

-7-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc
(ii) No Default shall have occurred under any Loan Document that remains uncured as of the date of the disbursement request or actual disbursement. (iii) All equity funds shall have been disbursed and applied to Project costs in the Project Budget as shown by reasonable evidence delivered to Lender, and the Loan funds not yet disbursed together with any other committed sources of funds are sufficient to pay all remaining Project costs.

4. OTHER LOAN REQUIREMENTS.

4.1 Information. Borrower shall provide any information requested by Lender in good faith in connection with the Improvements.

4.2 Hazardous Materials. Borrower shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including any substances defined as or included in the definition of “hazardous substances,” hazardous wastes,” “hazardous materials,” or “toxic substances” under any applicable federal or state laws or regulations (collectively, “Hazardous Materials”), except such of the foregoing as may be customarily used in connection with the ownership, operation, occupancy, maintenance and construction of improvements similar to the Improvements. Borrower acknowledges and agrees that each covenant and agreement of Borrower in this Agreement (together with any indemnity obligation applicable to a breach of any such representation and warranty) with respect to the environmental condition of the Property is intended by the Parties to be an “environmental provision” for purposes of California Code of Civil Procedure Section 736.

4.3 Construction Responsibilities; Commencement and Completion. Borrower shall cause the construction of the Improvements to be prosecuted with diligence, in good faith, and in accordance with the Schedule of Performance, subject to Section 5.1.9 below. Borrower shall cause the construction of the Improvements to be performed in a good and workmanlike manner in accordance with the Construction Plans approved by the City, in compliance with all applicable laws, ordinances, rules, regulations, building restrictions, recorded covenants and restrictions and requirements of each Governmental Authority having jurisdiction over the Property and free and clear of any liens or claims for liens. Borrower shall be solely responsible for all aspects of Borrower’s business and conduct in connection with the Property, including the quality and suitability of the Construction Plans and their compliance with the requirements of each applicable Governmental Authority and the Loan Documents, and the supervision of the construction of the Improvements, the qualifications, financial condition and performance of all architects, engineers, contractors, subcontractors, material suppliers, consultants and property managers, the accuracy of all applications for payment and loan draw requests and the proper application of all disbursements.

4.4 Fees and Taxes. Borrower shall be solely responsible for payment of all fees, assessments, taxes, charges and levies imposed by any public authority or utility company with respect to the Property, and shall pay such charges prior to delinquency. However, Borrower shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings and (b) if requested

Page 259 of 851 ends

-8-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc
by Lender, Borrower deposits with Lender such funds or other forms of assurance that Lender in good faith from time to time determines appropriate to protect Lender from the consequences of the contest being unsuccessful, provided, however, that if Borrower has deposited sufficient funds with a senior lender, Borrower shall not be required to deposit funds with Lender.

4.5 Notice of Litigation. Borrower shall promptly notify Lender of any litigation materially affecting Borrower or the Property and of any claims or disputes that Borrower reasonably believes involve a material risk of any such litigation.

4.6 Transfers. The qualifications and identity of the Borrower are of particular concern to the Lender and it is because of such qualifications and identity that the Lender has entered into this Agreement with the Borrower. No voluntary or involuntary successor in interest of the Borrower shall acquire any rights or powers under this Agreement except as expressly set forth herein. However, Borrower may assign this Agreement to a single-asset limited partnership in which Borrower is the general partner, or which has a general partner that is directly or indirectly owned and controlled by Borrower, provided Lender approves the limited partnership agreement and evidence of such control or ownership, such approval not to be unreasonably withheld. The Loan may be accelerated by Lender if there is any conveyance by Borrower of the Property or any portion thereof or interest therein, or Borrower ceases to be (or ceases to own and control, as applicable) the general partner of such limited partnership prior to the completion of the Improvements without the City’s prior written consent. Notwithstanding the foregoing, provided prior written notice to Lender of such transfer (with reasonable evidence of the nature of the transfer) is provided to Lender with respect to items (ii) and (iii) below as applicable, the Lender's consent shall not be required for (i) any direct or indirect transfer of the investor limited partner's interest in the Borrower if such transfer is to an entity controlled by, or under common control with Urban Housing Communities, LLC, a California limited liability company or an affiliate thereof, (ii) the removal or replacement of a general partner of Borrower by the investor limited partner in accordance with the provisions of the Borrower's limited partnership agreement, (iii) the transfer of the Property or of a limited partner interest in Borrower to an entity affiliated with Urban Housing Communities, LLC, a California limited liability company made pursuant to and as permitted by Borrower’s limited partnership agreement (collectively, a “Permitted Transfer”).

4.7 Insurance.

4.7.1 Borrower shall obtain and maintain at no cost or expense to the Lender, with a reputable and financially responsible insurance company reasonably acceptable to the Lender, (i) after the opening of the Project for business, commercially reasonable casualty insurance for the Improvements in an amount not less than the replacement cost of the Improvements (subject to commercially reasonable deductibles) with a reasonable inflation rider; (ii) commercial broad form general liability insurance, insuring against claims and liability for bodily injury, death, or property damage arising from the construction, use, occupancy, condition, or operation of the Property, which liability insurance shall provide combined single limit protection of at least Two Million Dollars ($2,000,000.00) and shall include a reasonable inflation rider, contractual liability coverage and products and completed operations coverage, and (iii) commercial automobile liability insurance of at least One Million Dollars ($1,000,000.00) combined single limit. Such liability insurance policies shall name the Lender and City and their

Page 260 of 851 ends

-9-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc
respective board members, council members, officers, agents and employees as additional insureds.

4.7.2 Before commencement of any demolition or construction work by Borrower, Borrower shall obtain and maintain in force until completion of such work (i) “all risk” builder’s risk insurance, including coverage for vandalism and malicious mischief, in a form and amount and with a company reasonably acceptable to the Lender, and (ii) workers’ compensation insurance covering all persons employed by Borrower in connection with work on the Project, or any portion thereof. During the construction of Improvements on any portion of the Property by Borrower, such builder’s risk insurance shall cover improvements in place and all material and equipment at the job site furnished under contract, but shall exclude contractors’, subcontractors’, and construction managers’ tools and equipment and property owned by contractors’ and subcontractors’ employees.

4.7.3 Each architect and each engineer engaged by Borrower shall provide professional liability insurance with a limit of liability of at least One Million Dollars ($1,000,000.00).

4.7.4 Borrower shall also furnish or cause to be furnished to the Lender evidence satisfactory to the Lender that any contractor with whom it has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers’ compensation insurance as required by law.

4.7.5 With respect to each policy of insurance required above, and promptly following written request by Lender, Borrower and each of Borrower’s general contractors, engineers and architects shall furnish to the Lender a certificate on the insurance carrier’s form setting forth the general provisions of the insurance coverage and showing the additional insureds. The certificate shall also be furnished by Borrower prior to commencement of construction of any Improvements.

4.7.6 All such policies required by this Section shall contain (i) language to the effect that the policies cannot be cancelled or materially changed except after thirty (30) days’ written notice by the insurer to the Lender, and (ii) a waiver of the insurer of all rights of subrogation against the Lender and the other additional insureds. All such insurance shall have deductibility limits which shall be commercially reasonable.

4.7.7 Procuring the insurance required under this Section shall not be construed to limit Borrower’s liability under the Loan Documents, or to fulfill its indemnity obligations under the Loan Documents. Notwithstanding such insurance policies, Borrower shall be responsible for the total amount of any damage, injury or loss caused by negligence or neglect connected with the ownership, operation or occupancy of the improvements on the land. The insurance requirements set forth in this Section are for the purpose of protecting Lender’s security for the Loan and are not to be construed as a representation by Lender that the insurance required under this Section is sufficient to cover Borrower from or against all uninsured losses and Borrower releases Lender from any liability and forever waives any claims against Lender in connection therewith.

Page 261 of 851 ends

-10-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc

4.7.8 All insurance policies shall (a) be issued by an insurance company having a rating of “A:VII” or better by A.M. Best Co., in Best’s Rating Guide; (b) name Lender and City as an additional insured on all liability insurance and the senior lender as mortgagee and loss payee on all casualty insurance, (c) contain the “standard non-contributory mortgagee clause” and the “standard lenders’ loss payable clause,” or their equivalents, (d) be evidenced by a certificate of insurance (or, if required by Lender, copy of insurance policy) to be delivered to Lender.

4.8 Indemnity. In addition to Borrower’s obligations under Section 6.4 below, Borrower hereby agrees to indemnify, defend, protect, and hold harmless the Lender and City and their respective agents, employees, representatives, board members, council members, consultants, and officers from and against all losses, liabilities, claims, damages (including foreseeable or unforeseeable consequential damages), penalties, fines, forfeitures, costs and expenses (including all reasonable out of pocket litigation costs and reasonable attorneys’ fees) and demands of any nature whatsoever, related directly or indirectly to, or arising out of or in connection with:
(i) the validity of this Agreement;
(ii) the development and construction by Borrower of the Improvements on the Property or the use, ownership, management, occupancy, or possession of the Property during Borrower’s period of ownership or control thereof; (iii) any breach or Default by Borrower hereunder; and
(iv) any of Borrower’s activities on the land (or the activities of Borrower’s agents, employees, lessees, representatives, licensees, guests, invitees, contractors, subcontractors, or independent contractors on the land).

The Lender and City may in their discretion, and at their own cost, participate in the defense of any legal action naming the Lender or City. The provisions of this Section shall survive the Closing or the termination of this Agreement.

5. DEFAULT AND REMEDIES.

5.1 Events of Default. Each of the following shall constitute a “Default” by Borrower under this Agreement:

5.1.1 The failure by Borrower to make a payment of money to Lender within ten (10) business days from the date such payment was due under any of the Loan Documents.

5.1.2 The failure by Borrower to perform any obligation under the Loan Documents not involving the payment of money, and, if such failure is curable within thirty (30) days, the expiration of thirty (30) days after written notice of such failure from Lender to Borrower. If such failure is not curable within thirty (30) days, Borrower may have such longer period of time as is reasonably necessary to complete the cure, provided that Borrower has commenced to cure within the initial thirty (30)-day period and diligently prosecutes such cure to completion.

Page 262 of 851 ends

-11-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc

5.1.3 Borrower (a) is unable, or admits in writing its inability, to pay its monetary obligations as they become due, (b) makes a general assignment for the benefit of creditors, or (c) applies for, consents to or acquiesces in the appointment of a trustee, receiver or other custodian for itself or its property, or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for Borrower or the property of Borrower (including the Development), and such appointment is not discharged within ninety (90) days.

5.1.4 The commencement of any case under the Bankruptcy Code or commencement of any other bankruptcy, arrangement, receivership, custodianship or similar proceeding under any federal, state or foreign law by or against Borrower, provided that if any such case or other bankruptcy, arrangement, reorganization, receivership, custodianship or similar proceeding is commenced against Borrower, such case or other bankruptcy, arrangement, receivership, custodianship or similar proceeding is not dismissed within ninety (90) days after its commencement.

5.1.5 A final judgment or decree for monetary damages or a monetary fine or penalty (not subject to appeal or as to which the time for appeal has expired) is entered against Borrower by any Governmental Authority, and such judgment, decree, fine or penalty is not paid and discharged or stayed within ninety (90) days after the entry thereof.

5.1.6 The assets of Borrower are attached, levied on or otherwise seized by legal process, and such attachment, levy or seizure is not quashed, stayed or released within ninety (90) days of the date thereof.

5.1.7 There shall be filed any claim of lien against the Property or the service of any notice to withhold proceeds of the Loan and the continued maintenance of such claim of lien or notice to withhold for a period of sixty (60) days without discharge or satisfaction thereof or provision therefor (including the posting of bonds) satisfactory to Lender.

5.1.8 The occurrence of any conveyance that is prohibited under Section 4.6.

5.1.9 A failure to comply in any respect with the Schedule of Performance (subject to force majeure delays under Section 6.12 below).

5.1.10 Borrower’s violation of any law or permit applicable to the Property or Improvements (or other improvements on the Property) that is not cured within thirty (30) days after written notice from Lender. If such failure is not curable within thirty (30) days, Borrower may have such longer period of time as is reasonably necessary to complete the cure, provided that Borrower has commenced to cure within the initial thirty (30)-day period and diligently prosecutes such cure to completion.

5.1.11 Borrower’s default under any other loans secured by the Property which is not cured within any applicable cure period in the loan documents for such loan or such longer cure period consented to in writing by the applicable lender.

Page 263 of 851 ends

-12-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc

5.1.12 Borrower fails to comply in any material respect with the CTCAC Reservation Letter dated _____________, 202__ (which requires, among other things, executing and recording a CTCAC regulatory agreement), or fails to comply with the recorded CTCAC regulatory agreement.

5.2 Remedies. The occurrence of any Default by Borrower will relieve Lender of any obligation to make further disbursement of the Loan and shall give Lender the right to proceed with any and all remedies set forth in the Loan Documents, including the following:

5.2.1 Lender shall have the right to declare, by written notice to Borrower, the outstanding principal balance of the Loan, together with any accrued and unpaid interest thereon, due and payable as of the date stated in such notice as determined by Lender in its sole and absolute discretion. Lender may proceed to enforce payment thereof and to exercise any or all rights afforded to Lender as a creditor and secured party under California law, including foreclosure of the Deed of Trust. Borrower shall be obligated to pay Lender on demand, all reasonable expenses, costs and fees (including reasonable attorneys’ fees and expenses) paid or incurred by Lender in connection with the collection of the Loan and the preservation, maintenance, protection, sale or other disposition of the security for the Loan, and such obligation shall be secured by the Deed of Trust.

5.2.2 Lender shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Borrower to perform its obligations under the Loan Documents or to enjoin acts or things that may be unlawful or in violation of the provisions of the Loan Documents.

5.2.3 Lender may cure any default by Borrower under the Loan Documents. Borrower shall be liable to reimburse Lender, on demand, for any funds advanced by Lender to cure any such monetary default, together with interest thereon at the lesser of the maximum rate permitted by law or eight percent (8%) per annum from the date of expenditure until the date of reimbursement, and the Deed of Trust shall secure such sums owed.

5.2.4 Lender shall have the right to file for record, as Borrower’s attorney-in-fact (which appointment is a power coupled with an interest and is irrevocable), any notices of completion, notices of cessation of labor, notices of non-responsibility or any other notices that Lender considers necessary to protect its security for the Loan.

5.2.5 Lender shall also be entitled to all other remedies available at law, in equity or otherwise.

5.2.6 Prior to exercising any remedies hereunder, Lender will give Borrower’s investor limited partner notice of default at the same time such notice is given to Borrower provided Lender shall have been given such investor limited partner’s name and address by Borrower in writing. The investor limited partner shall have the cure periods set forth in Section 5 above within which to cure the default and Lender will accept or reject such cure on the same basis as if such cure had been tendered by Borrower.

5.3 Remedies Cumulative. Except as may be provided by law, no right, power or remedy given to Lender by the terms of the Loan Documents is intended to be exclusive of any

Page 264 of 851 ends

-13-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc
other right, power or remedy, and each and every such right, power or remedy shall be cumulative and in addition to every other right, power or remedy given to Lender by the terms of the Loan Documents, by law or otherwise. Neither the failure nor any delay on the part of Lender to exercise any such right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any such right, power or remedy preclude any other or further exercise of such right, power or remedy, or any other right, power or remedy.

6. GENERAL PROVISIONS.

6.1 Relationship of Parties. Nothing contained in this Agreement shall be interpreted by the Parties, or any other party, as creating the relationship of employer and employee, principal and agent, partnership or any other form of joint venture between Lender and Borrower, and Borrower shall at all times be deemed an independent contractor and shall be completely responsible for the manner in which it performs its obligations under this Agreement.

6.2 No Claims. Nothing contained in this Agreement shall create or authorize any claim against Lender by any Person that Borrower may have employed or with whom Borrower may have contracted related to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the construction or operation of the Property, and Borrower shall include similar requirements in any contracts entered into for the construction or operation of the Property.

6.3 Amendments. No modification of the terms of this Agreement shall be valid unless made in writing and signed by the Parties.

6.4 Local, State and Federal Laws. The Borrower shall carry out the construction of the Improvements in conformity with all applicable federal, state and local laws, including (but only to the extent required by applicable law) the state labor standards and prevailing wage requirements of California Labor Code Section 1720, et seq., and its implementing regulations (“Prevailing Wage Laws”).

6.5 Indemnification for Prevailing Wages Claims. Borrower shall indemnify, defend, protect and hold harmless Lender and City and their respective board members, council members, officers, employees, agents, successors and assigns from and against any and all claims (including, without limitation, any claim under California Labor Code Section 1781), losses, proceedings, damages, causes of action, liabilities, costs and expenses, (including attorneys’ fees) (collectively, “Claim”) arising from or in connection with, or caused by any violations of law by Borrower or any contractor with respect to the Property, including, without limitation, any failure to comply with Prevailing Wage Laws. If any action or proceeding be brought against Lender or City by reason of any such claim, Borrower, upon notice from Lender or City, as applicable, shall defend the same at Borrower’s expense with counsel satisfactory to Lender or City, as applicable.

Borrower’s duty and obligations to defend, indemnify and hold Lender and City harmless shall survive cancellation of the Note and the reconveyance of the Deed of Trust with respect to events occurring prior to the cancellation of the Note and reconveyance of the Deed of Trust.

6.6 Non-Liability of Lender and Lender Officials, Employees and Agents. No member, official, employee or agent of Lender shall be personally liable to Borrower in the event

Page 265 of 851 ends

-14-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc
of any default or breach by Lender, or for any amount that may become due to Borrower, under the terms of this Agreement.

6.7 No Third Party Beneficiaries. There shall be no third party beneficiaries of this Agreement, other than the City and with respect to the indemnity provisions of Sections 4.8 and 6.5 hereof.

6.8 Notices, Demands and Communications. Except as otherwise required by law, any notice, request, direction, demand, consent, waiver, approval or other communication required or permitted to be given hereunder shall not be effective unless it is given in writing and shall be delivered (a) by certified mail, postage prepaid, return receipt requested, or (b) by a commercial overnight courier that guarantees next day delivery and provides a receipt, and addressed to the parties at the addresses stated below, or at such other address as either party may hereafter notify the other in writing as aforementioned:

Lender: Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Executive Director
Borrower: A0358 Monterey, L.P.
2000 East 4th Street, Suite 205
Santa Ana, CA 92705
Attn: Mark Bigley
With a copy to: Sabelhaus & Strain, LLP
1724 10th Street, Suite 110
Sacramento, CA 95811
Attn: Stephen A. Strain, Esq.

Service of any such notice or other communications so made shall be deemed effective on the day of actual delivery or refusal to accept/inability to deliver, as shown by the addressee’s return receipt if by certified mail, and as confirmed by the courier service if by courier; provided, however, that if such actual delivery occurs after 5:00 p.m. (local time where received) or on a non-business day, then such notice or demand so made shall be deemed effective on the first business day following the day of actual delivery. No communications via electronic mail shall be effective to give any notice, request, direction, demand, consent, waiver, approval or other communications hereunder.

6.9 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to conflict of laws principles.

6.10 Attorneys’ Fees. Should any action be brought to enforce any provision hereof, the prevailing party in such action shall be entitled to reasonable attorneys’ fees, court costs and other litigation expenses, including expenses incurred for preparation and discovery. The right

Page 266 of 851 ends

-15-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc
to recover such fees, costs and expenses shall accrue upon the commencement of the action regardless of whether the action is prosecuted to final judgment.

6.11 Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.

6.12 Force Majeure. A Party shall not be deemed to be in default as to any construction obligation where delays are due to war, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of transportation, or court order, or any other similar causes (other than lack of funds of Borrower or Borrower’s inability to finance the construction of the Development) beyond the control or without the fault of the Party claiming an extension of time to perform. However, no extension of time for any cause will be deemed granted if notice by the Party claiming such extension is not sent to the other Party within ten (10) business days from the date upon which such Party reasonably determines the delay will result in failure to timely meet a construction obligation.

6.13 Approvals/Amendments/Subordination Agreements. Whenever this Agreement calls for or contemplates Lender approval or consent (including approval of the form and substance of other documents), the written approval or consent or waiver of the Executive Director of Lender shall constitute the approval or consent of Lender. The Lender also authorizes the Executive Director to make non-substantial changes to this Agreement, including, reasonable extensions of time deadlines set forth in this Agreement, provided they are in writing, and to send notices and demands, initiate and administer remedies and otherwise administer the Loan Documents, and to execute reasonable subordination agreements required by senior construction lenders as a condition to making their loans for the Project. The Executive Director shall have the authority to review and approve all documents listed in Section 3.6 hereof and may prohibit disbursement of Loan funds if the documents are not reasonably satisfactory to the Executive Director.

6.14 Warranty Against Payment of Consideration for Agreement. Borrower warrants that it has not paid or given, and will not pay or give, any Person, including the Lender or the City, or any council member, board member, official or employee thereof, any money or other consideration for obtaining this Agreement.

6.15 Refinance. Borrower shall be permitted to refinance any senior construction or permanent loan on commercially reasonable terms in an amount not greater than the then-outstanding principal balance of such senior loan(s) (the “Refinanced Loan”), and Lender agrees that Lender’s Executive Director shall have the authority to execute reasonable subordination agreements to confirm such subordination such that the Deed of Trust securing the Loan shall remain subordinate to any such Refinanced Loan.

6.16 Time. Time is of the essence with respect to this Agreement and the performance of each obligation contained herein.

Page 267 of 851 ends

-16-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc

6.17 Multiple Originals; Counterparts. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. [Remainder of this page intentionally left blank]
[Signatures appear on next page]

Page 268 of 851 ends

-17-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1\2808356v7.doc
WHEREAS, this Agreement has been entered into by the undersigned as of the date first above written.

LENDER: PALM DESERT HOUSING AUTHORITY
By:

Name: Kathleen Kelly
Title: Chairman
ATTEST:

Anthony J. Mejia, Secretary
APPROVED AS TO FORM:

Robert W. Hargreaves, City Attorney
BORROWER: A0358 MONTEREY, L.P.,
A California limited partnership
By: A0358 Monterey Admin Holdings LLC
A California limited liability company
Its: Administrative General Partner
By: A0358 Montery Holdings LLC,
A California limited liability company
By:

Name:

Its:

By: ,
a
By:

Name:

Its:

Page 269 of 851 ends

EXHIBIT “A”

LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Palm Desert, County of Riverside, State of California, described as follows:

PARCEL A AS SHOWN ON CERTIFICATE OF COMPLIANCE (WAIVER OF PARCEL MAP PMW 06-03), AS EVIDENCED BY DOCUMENT RECORDED OCTOBER 25, 2006, AS INSTRUMENT NO. 2006-0782511 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN, COUNTY

NORTHWEST CORNER OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 0308440, SAID POINT BEING ALSO A POINT ON A NON TANGENT

Page 270 of 851 ends

A-19-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1 \ 2808356v567.doc
CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1700.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS 576°44'54"W;

RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN, COUNTY

Page 271 of 851 ends

A-20-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1 \ 2808356v567.doc
2004-02.12 ("C" STREET) CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA; THENCE S00°09'04"E ALONG THE WESTERLY LINE OF SAID PARCEL NO. 2004-02.12 ("C" STREET), A DISTANCE OF 365.78 FEET TO THE NORTHERLY LINE OF THAT

APN: 694-130-017 (Affects a portion of the land);
694-130-018 (Affects a portion of the land);
694-130-019 (Affects a portion of the land); and
694-130-020 (Affects a portion of the land)

Page 272 of 851 ends

EXHIBIT “B”

SCOPE OF DEVELOPMENT
A 176 unit apartment complex, with 44 one-bedroom apartments, 78 two-bedroom apartments, and 52 three-bedroom apartments (including 2 two-bedroom manager units). 352 parking spaces, of which 176 will be carport covered spaces.

The Borrower shall develop a 176 multi-family rental housing development, with 44 onebedroom apartments, 78 two-bedroom apartments, and 52 three-bedroom apartments (including 2 two-bedroom manager units). All capitalized terms not defined herein shall have the meaning ascribed to such terms in the Agreement,
The Development shall conform to plans approved by the City, including all conditions and mitigation measures imposed by the City in connection with the entitlement/development approval process of the City.

The Development shall be constructed on the Property (such property consisting of approximately ____ acres of vacant land located at ____________, in the City of Palm Desert).

The Project/Development, which will be called “Crossings at Palm Desert”, will be built as a single phase. The quality of construction shall be of a high level.

HOUSING TYPE
Crossings at Palm Desert will target families with incomes from 30% to 80% AMI and will consist of a mix of one, two and three-bedroom units. Units will be restricted by recorded Housing Agreements. Two (2) two-bedroom units will be used for the on-site property manager’s unit.

SITE AMENITIES

1. Resident Services Building

2. Leasing Office
a. ____________
b. ____________

3. Picnic Areas (covered)

4. Laundry Facilities

5. Tot-Lot/Playground (covered)

6. Swimming Pool(s):
- Minimum of _____ square feet and shall include pool restrooms.

7. On-Site Property Management

8. Barbecue Area(s)

9. Childcare Room

10. 352 parking spaces, of which 176 will be carport covered spaces.

Page 273 of 851 ends

B-22-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1 \ 2808356v567.doc

CONSTRUCTION TYPE & ARCHITECTURAL GOALS
[to be provided by Borrower]

SUSTAINABLE BUILDING / GREEN BUILDING PRACTICES
[to be provided by Borrower]

UNIT AMENITIES

1. Energy Star Appliances
a. Oven/Stove
b. Refrigerator
c. Dishwasher
d. Garbage Disposal

2. Solid Surface Countertops

3. Upgraded Cabinets

4. Central Air Conditioning/Heating

5. Window Blinds

6. Carpet/Vinyl or Tile

7. Patio or Balcony

SOCIAL SERVICE PROGRAMS

1. Social Service Programs will be conducted in the Resident Services Building(s) and available for all residents free of charge. A program coordinator will be hired, or a contract will be executed with a local nonprofit, to provide family appropriate classes for the residents, as well as collaborate with outside nonprofits and agencies to expand program options. Residents will have input as to which classes and programs are offered at the center. Typically, the classes will include the following:
[to be provided by borrower]
a. [to be provided by borrower]
The Borrower shall commence and complete the Development in accordance with the Schedule of Performance. The Development shall conform to and shall complete and satisfy any and all conditions from the City’s entitlement approval of Project.

I. DEVELOPMENT STANDARDS
The Improvements shall conform to all applicable Governmental Requirements, including without limitation local subdivision, zoning, building code and other applicable ordinances, resolutions, policies, applicable general and Specific Plans, and regulations of the City of Palm Desert (“City Ordinances”) and the following development standards:

Page 274 of 851 ends

B-23-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1 \ 2808356v567.doc
A. General Requirements:

1. Vehicular Access. The placement of vehicular driveways shall be coordinated with the needs of proper street traffic flow as approved by the City in accordance with City Ordinances. In the interest of minimizing traffic congestion, the City of Palm Desert will control the number and location of curb breaks for access to the Site for off street parking and truck loading. All access driveways shall require written approval of the City.

2. Building Signs. Signs shall be limited in size, subdued and otherwise designed to contribute positively to the environment. Signs identifying the building use will be permitted, but their height, size, location, color, lighting and design will be subject to City approval, and signs must conform to the City Ordinances.

3. Screening. All outdoor storage of materials or equipment shall be enclosed or screened to the extent and in the manner required by the City.

4. Landscaping. The developer shall provide and maintain landscaping within the public rights of way and within setback area along all street frontages and conforming to the plans as hereafter approved by the City. Landscaping shall consist of trees, shrubs and installation of an automatic irrigation system adequate to maintain such plant material. The type and size of trees to be planted, together with a landscaping plan.

5. Utilities. All utilities on the Property provided to service the units constructed by developer shall be underground at developer’s expense.

6. Building Design. Buildings shall be constructed such that the Improvements shall be of high architectural quality, and shall be effectively and aesthetically designed and in conformance with City approvals.

7. Energy Considerations. The design of the Improvements shall include, where feasible, energy conservation construction techniques and design, including co-generation facilities and active and passive solar energy design. The developer shall be required to demonstrate consideration of such energy features during the design review process and to consistency with energy conservation provisions of the building code.

8. Site Preparation. Palm, at its cost and expense, shall prepare Property (also sometimes referred to herein as the “Site”) for development. Such Site preparations shall consist of the complete demolition and removal of all existing improvements if any.

9. Environmental Impact Mitigation Measures. To the extent required under the terms of the DDLA, the developer shall implement any and all mitigation measures and/or mitigation monitoring requirements as identified in any certified environmental document or mitigated negative declaration certified in connection with the project.

10. Construction Fence. The developer shall install a temporary construction chain link fence. The construction fence shall be maintained free of litter and in good repair for the duration of its installation.

Page 275 of 851 ends

B-24-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1 \ 2808356v567.doc

11. Development Identification Signs. Prior to commencement of construction on the Site, the developer shall prepare and install, at its cost and expense, one sign on the barricade around the Site which identifies the development. The sign shall be at least four (4) feet by six (6) feet and be visible to passing pedestrians and vehicular traffic. The design of the sign, as well as the proposed location, shall be submitted to the City and Authority for review and approval prior to installation. The sign shall, at a minimum, include:
- Illustration of development
- Development name
- Logo of the City of Palm Desert
- List of City Council Members
- Information number
- Completion Date
B. Design Features:

The following design features are considered essential components to the Improvements:

Handicapped Units – An agreed upon number of units are to be fully handicapped accessible in compliance with State Housing Code – Title 24 requirements.

Overall Design Quality, Materials, Colors, Design Features – Quality of design is important, materials and colors are to be approved by City.

II. SPECIAL AMENITIES
The developer shall undertake all improvements required by the City as a condition of development of the Site, as more particularly provided in the City approvals given for the Site.

Page 276 of 851 ends

EXHIBIT “C”

FORM OF DEED OF TRUST

Page 277 of 851 ends

EXHIBIT “D”

FORM OF PROMISSORY NOTE

Page 278 of 851 ends

EXHIBIT “E”

FORM OF NOTICE OF AFFORDABILITY RESTRICTIONS

Page 279 of 851 ends

EXHIBIT “F’

PRELIMINARY PROJECT BUDGET

Page 280 of 851 ends

EXHIBIT “G”

FORM OF HOUSING AGREEMENT

Page 281 of 851 ends

EXHIBIT “H”

SCHEDULE OF PERFORMANCE
Action Date / Deadline
Items 108 Relate to Borrower Actions and Requirements Prior to the Closing

1. Project Budget. The Borrower shall submit
a comprehensive Project Budget for the
Improvements.

Prior and as a condition to Closing.

2. Final Plans and Specifications. The
Borrower shall submit the Final Plans and
Specifications for Lender approval.

Prior and as a condition to Closing.

3. Building Permits. The Borrower shall
obtain the Building Permit, or permit-ready
letter, for the construction of the Improvements.

Prior and as a condition to the Closing.

4. Construction Contract. The Borrower shall
submit the stipulated sum construction contract
for the construction of the Improvements to the
Lender for approval.

Prior and as a condition to the Closing.

5. Intentionally omitted.

6. Insurance. The Borrower shall submit
evidence of insurance to the Lender.

Prior and as a condition to the Closing.

7. TCAC Tax Credit and CDLAC Bond
Applications/Award.

Obtained

8. Tax Credit Equity. All tax credit equity
must have been committed, and the initial tax
credit capital contribution shall have been
funded and available to pay the initial Project
construction costs, as shown by reasonable
evidence delivered to Lender, and all other
capital contributions that are to be used for
construction costs will be funded prior to
disbursement of the construction loan portion of
the Loan.

Prior and as a condition to Closing.

Page 282 of 851 ends

H-31-
P6401-0001\2851077v1.doc
P6401-0001\2851076v1 \ 2808356v7.doc
Items 9-13 Relate to Requirements After the Closing

9. Closing. The Borrower shall close the Loan. Not later than December 31, 2023

10. Commencement of Construction.

Borrower shall substantially commence the
Improvements.

Not later than 90 days after the Closing.

11. Completion of Grading. Borrower shall
substantially complete the grading for the
Project.

Not later than nine (9) months following the
commencement of construction.

12. Commencement of Vertical Construction.

Borrower shall substantially commence vertical
construction.

Not later than twelve (12) months following
the commencement of construction.

13. Completion; Qualification for Certificate
of Completion. The Project shall be
completed and shall qualify for a final
Certificate of Occupancy.

Not later than April 1, 2025.

Page 283 of 851 ends

EXHIBIT “I”

HOUSING AGREEMENT (CITY)

Page 284 of 851 ends

DRAFT

SECURED PROMISSORY NOTE
, 2023 $7,235,000.00
Palm Desert, California
FOR VALUE RECEIVED, the undersigned, A0358 MONTEREY, L.P. a California limited partnership (“Maker”), having its principal place of business at 2000 E. 4th Street, Suite 205, Santa Ana, CA 92705, Attn: Mark Bigley, promises to pay to the order of the PALM DESERT HOUSING AUTHORITY (“ PDHA”), at 73-510 Fred Waring Drive, Palm Desert, CA 92260, Attn: Jessica Gonzales, Housing Manager, or at such other place as the holder of this Note from time to time may designate in writing, the principal sum of SEVEN MILLION TWO HUNDRED THIRTY-FIVE THOUSAND DOLLARS ($7,235,000.00) (the “Principal Amount”), together with interest on the unpaid principal amount disbursed under this promissory note (“Note”) from time to time outstanding at the “Applicable Interest Rate,” as defined below, in lawful money of the United States of America. This Note is being delivered, and the loans evidenced hereby are being made, pursuant to the terms of a Loan Agreement between Maker and PDHA (“Loan Agreement”). All capitalized terms used herein which are not separately defined herein shall have the meanings set forth therefor in the Loan Agreement.

The Principal Amount of this Note shall be disbursed as a construction loan as described in Section 3 of the Loan Agreement. “Applicable Interest Rate” means (i) three percent (3%) per annum, compounded monthly, from the date of this Note to the date on which the City of Palm Desert issues a final certification of occupancy with respect to the Project, and (ii) thereafter three percent (3%) per annum, simple interest, and (iii) with respect to amounts not paid when due, interest from the date due until the date paid at the lessor of (a) eight percent (8%) per annum, simple interest, or (b) the maximum rate permitted by applicable law.

1. Payments. Payments under this Note shall be due and payable as follows:
50% of Project Net Cash Flow (“PDHA Portion”) shall be paid to PDHA on an annual basis on June 30th after the first anniversary of issuance of a final certificate of occupancy for the Project, and each annual anniversary thereafter (with respect to the Project Net Cash Flow for the preceding year ending on June 30th prior to each such payment date), until this Note has been satisfied in full. Payments shall first be applied to accrued interest, then to remaining outstanding principal. In addition, the entire amount of outstanding principal and accrued interest and any additional amounts which become owing hereunder shall be paid by Maker to PDHA as of the earliest of: (i) a Default under the Loan Agreement; (ii) as provided in Section 4 below; or (iii) , 2080 (the “Maturity Date”).

2. Secured by Deed of Trust. Repayment of this Note is secured by a deed of trust (the “Deed of Trust”) executed by Maker for the benefit of PDHA encumbering the property described in the Deed of Trust (the “Property” or “Site”) on which the Project is to be developed/constructed.

Page 285 of 851 ends

3. Prepayment. Maker shall have the right to prepay amounts owing under this Note at any time, without premium.

4. Due on Sale or Encumbrance. In the event of any Transfer (as defined below) of the Property, or any portion thereof or interest therein, PDHA shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. As used herein, the term “Transfer” means and includes the direct or indirect sale, transfer, conveyance, assignment, or other alienation of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, or the lease of all or substantially all of the Property or of all or substantially all of the improvements located thereon or a transfer of the general partner interest in Maker or transfer of control of the general partner. Transfer shall not include the sale, transfer, assignment, pledge, hypothecation or encumbrance by Maker’s limited partner of its partnership interest, nor shall Transfer include the removal of any general partner of Maker by the limited partner for cause and the replacement of such removed general partner by another person or entity in accordance with the terms of Maker’s partnership agreement nor any other “Permitted Transfer” as such term is defined in the Loan Agreement. “Transfer” shall not include any lease of a rental unit so long as Trustor complies with the provisions of the Regulatory Agreement relating to such leasing activity. Failure of Beneficiary to exercise the option to declare all sums secured hereby immediately due and payable upon a Transfer will not constitute waiver of the right to exercise this option in the event of any subsequent Transfer.

5. Miscellaneous.
(a) Governing Law. All questions with respect to the construction of this Note and the rights and liabilities of the parties to this Note shall be governed by the laws of the State of California.
(b) Attorneys’ Fees.
(i) Maker shall reimburse PDHA for all reasonable attorneys’ fees, costs and expenses, incurred by Payee in connection with the enforcement of PDHA’s rights under this Note, including, without limitation, reasonable attorneys’ fees, costs and expenses for trial, appellate proceedings, out-of-court negotiations, workouts and settlements or for enforcement of rights under any state or federal statute, including, without limitation, reasonable attorneys’ fees, costs and expenses incurred to protect PDHA’s security and attorneys’ fees, costs and expenses incurred in bankruptcy and insolvency proceedings such as (but not limited to) seeking relief from stay in a bankruptcy proceeding. The term “expenses” means any expenses incurred by PDHA in connection with any of the out-of-court, or state, federal or bankruptcy proceedings referred to above, including, without limitation, the fees and expenses of any appraisers, consultants and expert witnesses retained or consulted by PDHA in connection with any such proceeding.

Page 286 of 851 ends

(ii) PDHA shall also be entitled to its attorneys’ fees, costs and expenses incurred in any post-judgment proceedings to collect and enforce the judgment.

This provision is separate and severable and shall survive the merger of this Note into any judgment on this Note.
(c) Entire Agreement. This Note, the Loan Agreement, the Deed of Trust and the Regulatory Agreement required by the Loan Agreement constitute the entire agreement and understanding between and among the parties in respect of the subject matter of such agreements and supersede all prior agreements and understandings with respect to such subject matter, whether oral or written. (d) Time of the Essence. Time is of the essence with respect to every provision hereof.
(e) Waivers by Maker. Maker waives: presentment; demand; notice of dishonor; notice of default or delinquency; notice of acceleration; notice of protest and nonpayment; notice of costs, expenses or losses and interest thereon; and diligence in taking any action to collect any sums arising under this Note or in any proceeding against any of the rights or interests in or to properties securing payment of this Note. (f) Non-waivers. No previous waiver and no failure or delay by Maker in acting with respect to the terms of this Note, the Loan Agreement, the Deed of Trust or Regulatory Agreement shall constitute a waiver of any breach, default, or failure of condition under any of them. A waiver of any term must be made in writing and shall be limited to the express written terms of such waiver.
(g) Non-Recourse. Repayment of this Note and all other obligations of Maker hereunder, under the Loan Agreement, Regulatory Agreement or Deed of Trust shall be a non-recourse obligation of Maker, such that a general partner of Maker shall not have any personal obligation to make any payments or perform any other obligations of Maker.
(h) Cure by Limited Partner(s). PDHA hereby agrees that any cure of any default made or tendered by Maker’s limited partner (whose name and notice address is as set forth below in this Section 5(h)) shall be deemed to be a cure by Maker and shall be accepted or rejected on the same basis as if made or tendered by Maker.

Investor Limited Partner Name and Notice Address:
[To Be Provided By Maker]

Page 287 of 851 ends

MAKER:

A0358 MONTEREY, L.P.,
a California limited partnership
By: A0358 Monterey Admin Holdings LLC
A California limited liability company
Its: Administrative General partner
By:

Name:

Its:

By: A0358 Monterey Holdings LLC,
A California limited liability company
Its: Managing General Partner
By:

Name:

Its:

Page 288 of 851 ends

DRAFT

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Jessica Gonzales

SPACE ABOVE THIS LINE FOR RECORDER'S USE
This Document is recorded for the benefit of the Palm Desert Housing Authority and is exempt from recording fees pursuant to Sections 6103, 27383 and 27388.1 of the California Government Code.

DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST AND ASSIGNMENT OF RENTS (this “Deed of Trust”) is dated as of _________, 2023, and is executed by A0358 MONTEREY, L.P., a California limited partnership (“Trustor”), in favor of FIRST AMERICAN TITLE INSURANCE COMPANY, as “Trustee,” for the benefit of the PALM DESERT HOUSING AUTHORITY (“Beneficiary”).

Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, that certain land in the City of Palm Desert, Riverside County, California, described on Exhibit “A” attached hereto;
TOGETHER WITH the rents, issues and profits thereof and all leases and rental agreements related thereto, SUBJECT, HOWEVER, to the right, power, and authority hereinafter given to Trustor to collect and apply such rents, issues, and profits; TOGETHER WITH all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot water boilers, stoves, ranges, elevators and motors, bath tubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantels, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty;
TOGETHER WITH all building materials and equipment now or hereafter delivered to the premises and intended to be installed therein;
TOGETHER WITH all articles of personal property owned by the Trustor now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the lands described which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all

Page 289 of 851 ends

-2-
P6401-0001\2808396v45.doc
other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to the building or buildings in any manner. All of the foregoing, together with the real property, is herein referred to as the “Property.” For the purpose of securing (a) payment of the indebtedness evidenced by that certain promissory note (the “Note”) of substantially even date herewith, in the stated principal sum of Seven Million Two Hundred Thirty-Five Thousand Dollars ($7,235,000.00), executed by Trustor, as maker, in favor of Beneficiary, as payee, and all amendments thereof; and (b) sums owing by Trustor to Beneficiary under this Deed of Trust, Trustor agrees:

1. That it shall faithfully perform each and every covenant contained in the Note, the Loan Agreement (“Loan Agreement”) between Trustor and Beneficiary dated substantially concurrently herewith and the Regulatory Agreement described therein. Upon a Default under (and as defined in) the Loan Agreement, Beneficiary may accelerate the loan evidenced by the Note, and if not paid, may exercise any and all remedies permitted by law, including foreclosure of this Deed of Trust.

2. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorneys’ fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust.

3. To pay before delinquency all property taxes and assessments and any other taxes affecting the Property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on the Property or any part thereof, which appear to be prior or superior hereto (provided, however, that Trustor may dispute in good faith any such tax or assessment after posting bond on same).

4. That should Trustor fail to make any payment or to do any act as herein provided and such failure continues past any applicable notice and cure period, then Beneficiary, without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes with written notice to Trustor and subject to the rights of tenants; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay its reasonable fees.

5. To pay immediately and without demand all sums so expended by Beneficiary hereunder, or under the Note the in accordance with the terms thereof.

Page 290 of 851 ends

-3-
P6401-0001\2808396v45.doc

6. The Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the Property any lien or liens except for deeds of trust securing financing used to pay for construction of the Project, as defined in the Loan Agreement (or securing refinancing of such construction loans) or as otherwise permitted in the Loan Agreement and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on the Property, or will cause the release of or will provide a bond against any such liens within thirty (30) days of the attachment of the lien or liens.

7. That any award of damages in connection with any condemnation for public use of or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys it receives in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance.

8. That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure to pay all other sums when due so secured.

9. That at any time or from time to time, without liability therefore and without notice, upon written request of Beneficiary, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of the Property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof.

10. That upon written request of Beneficiary stating that all sums secured hereby have been paid or forgiven by Beneficiary, and upon surrender of the Note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled thereto.”

11. That Trustor hereby absolutely and unconditionally assigns and transfers to Beneficiary all the rents, income and profits of the Property encumbered hereby, and hereby give to and confer upon Beneficiary the right, power and authority to collect such rent, income, and profits, and Trustor irrevocably appoints Beneficiary Trustor’s true and lawful attorney at the option of Beneficiary, at any time, to give receipts, releases and satisfactions and to sue, either in the name of Trustor or in the name of Beneficiary, for all income, and apply the same to the indebtedness secured hereby; provided, however, so long as no Default by Trustor in the payment of any indebtedness secured hereby shall exist and be continuing beyond any applicable cure period expressly provided therein, then, Trustor shall have the right to collect all rent, income and profits from the Property and to retain, use and enjoy the same. Upon any such Default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of the Property or any part thereof, in its own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, upon any indebtedness secured hereby, and in such order as Beneficiary may

Page 291 of 851 ends

-4-
P6401-0001\2808396v45.doc
determine. The entering upon and taking possession of the Property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

12. That upon a Default by Trustor under the Loan Agreement, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and election to cause to be sold the Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of the notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof.

Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at the sale.

After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto.

13. Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title estate, rights, powers and duties. The instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new Trustee.

14. That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the Note, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.

15. If Trustor shall sell, convey, hypothecate, transfer, encumber or alienate the Property, or any part thereof, or any interest therein, or any interest in Trustor is transferred, or Trustor shall be divested of title or any interest in the Property in any manner or way, whether

Page 292 of 851 ends

-5-
P6401-0001\2808396v45.doc
voluntarily or involuntarily, without the prior written consent of the Beneficiary being first had and obtained (if and to the extent such consent is required in the Loan Agreement or if the failure to get such consent would be a Default) or if a Default by Trustor shall occur under the Loan Agreement then Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby, irrespective of the maturity date specified in any note evidencing the same, immediately due and payable.

16. That Trustor shall promptly pay when due the payments of interest, principal, and all other charges accruing under any superior or prior trust deed, mortgage, or other instrument encumbering the Property. Beneficiary shall have the right, but not the obligation, to cure any defaults on any superior or prior deed of trust or promissory note secured thereby and upon curing such default Trustor shall immediately reimburse Beneficiary for all costs and expenses incurred thereby, together with interest thereon at the lesser of eight percent (8%) or the maximum legal rate permitted to be charged by non-exempt lenders under the State of California, and Trustor’s failure to pay such amount on demand shall be a breach hereof. Trustor’s breach or default of any covenant or condition of any superior or prior trust deed, mortgage or other instrument encumbering the Property shall be a default under this Deed of Trust, whereupon Beneficiary shall have the right to declare all sums under the Note secured hereby immediately due and payable as provided in the Note.

17. The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder (and any other notices hereunder) be mailed to it at its address for notices in the Loan Agreement.

18. Trustor shall not commit intentional waste with respect to the Property.

19. Beneficiary acknowledges that Trustor and the California Tax Credit Allocation Committee have or intend to enter into, or concurrently with the execution and delivery of the Loan Documents are entering into, a Regulatory Agreement (the “TCAC Regulatory Agreement”), which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code, as amended (the “Code”). Beneficiary acknowledges and agrees that, in the event of a foreclosure of its interest under the Deed of Trust or delivery by the Trustor of a deed in lieu thereof (collectively, a “Foreclosure”), the following rule contained in Section 42(h)(6)(E)(ii) of the Code shall apply: For a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by the TCAC Regulatory Agreement, (i) none of the eligible tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause, including but not limited to, the tenants’ ineligibility pursuant to Section 42 of the Code), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code.

Page 293 of 851 ends

-6-
P6401-0001\2808396v45.doc
TRUSTOR:

A0358 MONTEREY, L.P.,
A California limited partnership

By: A0358 Monterey Admin Holdings LLC
A California limited liability company
Its: Administrative General Partner
By:

Name:

Its:

By: A0358 Monterey Holdings, LLC,
A California limited liability company
Its: Managing General Partner
By:

Name:

Its:

Page 294 of 851 ends

-7-
P6401-0001\2808396v45.doc

CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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

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

WITNESS my hand and official seal.

Signature (Seal)

Page 295 of 851 ends

-8-
P6401-0001\2808396v45.doc

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)

Page 296 of 851 ends

DRAFT
EXHIBIT “A”

DESCRIPTION OF LAND
Real property in the City of Palm Desert, County of Riverside, State of California, described as follows:

THE SAN BERNARDINO MERIDIAN, CITY OF PALM DESERT, COUNTY OF

RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN,

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ON THE CENTERLINE OF MONTEREY AVENUE; THENCE N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE NORTHERLY LINE OF PARCEL 2 OF PARCEL MAP WAIVER NO. 99-15, RECORDED OCTOBER 15, 1999, AS INSTRUMENT NO. 1999-457541, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, A DISTANCE OF 1314.94 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29, THE NORTHERLY LINE OF SAID PARCEL 2 AND CONTINUING ALONG THE NORTHERLY LINE OF PARCEL 1 OF SAID PARCEL MAP WAIVER NO. 99-15, A DISTANCE OF 1314.61 FEET TO THE CENTER ONE QUARTER (C1/4) CORNER OF SAID SECTION 29, SAID POINT BEING ALSO THE NORTHEAST CORNER OF SAID PARCEL 1;
THENCE S00°09'04"E ALONG THE NORTH-SOUTH ONE QUARTER (N-S 1/4) SECTION LINE OF SAID SECTION 29 AND THE EASTERLY LINE OF SAID PARCEL 1, A DISTANCE OF 489.00 FEET TO THE NORTHEAST CORNER OF

THAT PARCEL OF LAND CONVEYED TO THE PALM SPRINGS UNIFIED SCHOOL DISTRICT BY GRANT DEED, RECORDED APRIL 28, 2006, AS

Page 297 of 851 ends

INSTRUMENT NO. 0308440, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA;
THENCE S89°58'35"W ALONG THE NORTHERLY LINE OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 0308440, A DISTANCE OF 1270.59

FEET TO THE NORTHWEST CORNER OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 0308440, SAID POINT BEING ALSO A POINT ON A

NON TANGENT CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1700.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS 576°44'54"W;

THENCE NORTHWESTERLY AND NORTHERLY ALONG THE ARC OF SAID CURVE, A DISTANCE OF 392.48 FEET THROUGH A CENTRAL ANGLE OF 13°13'40";
THENCE N00°01'26"W, A DISTANCE OF 100.00 FEET TO THE POINT OF BEGINNING.

EXCEPT PARCEL NO. 2004-02.12 ("C" STREET), PARCEL NO. 2004-02.11 (AVENUE 35) AND A PORTION OF PARCEL NO. 2004-02.10 (GATEWAY DRIVE),

ALL CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED,
RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN,

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ON THE CENTERLINES OF MONTEREY AVENUE AND AVENUE 35; THENCE N89°58'35"E ALONG THE EAST-WEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE CENTERLINE OF SAID AVENUE 35, A DISTANCE OF 1314.94 FEET TO THE CENTERLINE INTERSECTION OF SAID AVENUE 35 AND GATEWAY DRIVE; THENCE CONTINUING N89°58'35"E ALONG THE EASTWEST ONE QUARTER (E-W 1/4) SECTION LINE OF SAID SECTION 29 AND THE CENTERLINE OF SAID AVENUE 35, A DISTANCE OF 71.07 FEET; THENCE S00°01'25"E, A DISTANCE OF 54.00 FEET TO THE SOUTHERLY LINE OF PARCEL NO. 2004-02.11 (AVENUE 35) CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING 54.00 FEET SOUTHERLY OF THE CENTERLINE OF SAID AVENUE 35, AS MEASURED AT RIGHT ANGLES THERETO, SAID POINT BEING ALSO THE TRUE POINT OF BEGINNING;
THENCE N89°58'35"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35), A DISTANCE OF 782.06 FEET TO THE POINT OF

Page 298 of 851 ends

CURVATURE OF A CURVE CONCAVE TO THE SOUTHWEST, HAVING A RADIUS OF 946.00 FEET;

THENCE EASTERLY AND SOUTHEASTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35) AND THE ARC OF SAID CURVE, A DISTANCE OF 220.33 FEET THROUGH A CENTRAL ANGLE OF 13°20'40" TO A

POINT OF REVERSE CURVATURE OF A CURVE CONCAVE TO THE
NORTHEAST, HAVING A RADIUS OF 1054.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS S13°19'14"W;

THENCE SOUTHEASTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35) AND THE ARC OF SAID CURVE, A DISTANCE OF 185.57 FEET THROUGH A CENTRAL ANGLE OF 10°05'15";
THENCE 552°30'03"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35), A DISTANCE OF 27.78 FEET TO THE WESTERLY LINE OF PARCEL NO. 2004-02.12 ("C" STREET) CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA;
THENCE S00°09'04"E ALONG THE WESTERLY LINE OF SAID PARCEL NO. 2004-

02.12 ("C" STREET), A DISTANCE OF 365.78 FEET TO THE NORTHERLY LINE OF

THAT PARCEL OF LAND CONVEYED TO THE PALM SPRINGS UNIFIED SCHOOL DISTRICT (P.S.U.S.D.) BY GRANT DEED, RECORDED APRIL 28, 2006, AS INSTRUMENT NO. 2006-0308440, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA;
THENCE 589°58'34"W ALONG THE NORTHERLY LINE OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 2006-0308440 (P.S.U.S.D.), A DISTANCE OF 1176.61 FEET TO THE EASTERLY LINE OF PARCEL NO. 2004-02.10 (GATEWAY DRIVE) CONVEYED TO THE CITY OF PALM SPRINGS BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,

SAID POINT BEING ALSO A POINT ON A NON-TANGENT CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1646.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS S76°15'06"W;

THENCE NORTHWESTERLY AND NORTHERLY ALONG THE EASTERLY LINE OF SAID PARCEL NO. 2004-02.10 (GATEWAY DRIVE) AND THE ARC OF SAID CURVE, A DISTANCE OF 392.80 FEET THROUGH A CENTRAL ANGLE OF 13°40'23";

Page 299 of 851 ends

THENCE N00°04'31"W ALONG THE EASTERLY LINE OF SAID PARCEL NO. 2004-

02.10 (GATEWAY DRIVE), A DISTANCE OF 28.94 FEET TO THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35);
THENCE N44°57'02"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35), A DISTANCE OF 24.05 FEET TO THE POINT OF BEGINNING.

APN: 694-130-017 (Affects a portion of the land);
694-130-018 (Affects a portion of the land);
694-130-019 (Affects a portion of the land); and
694-130-020 (Affects a portion of the land)

Page 300 of 851 ends

DRAFT
-1-
12812-0001\2731705v2.doc

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Jessica Gonzales
SPACE ABOVE THIS LINE FOR RECORDER’S USE
This Document is recorded for the benefit of the Palm Desert Housing Authority and is exempt from recording fees pursuant to Sections 6103, 27383 and 27388.1 of the California Government Code.

NOTICE OF AFFORDABILITY RESTRICTIONS

IMPORTANT NOTICE TO OWNERS, PURCHASERS, TENANTS, LENDERS,

BROKERS, ESCROW AND TITLE COMPANIES, AND OTHER PERSONS,

REGARDING AFFORDABLE HOUSING RESTRICTIONS ON THE REAL
PROPERTY DESCRIBED IN THIS NOTICE: RESTRICTIONS HAVE BEEN

RECORDED WITH RESPECT TO THE PROPERTY DESCRIBED BELOW WHICH

RESTRICT OCCUPANCY TO EXTREMELY LOW AND VERY LOW-INCOME HOUSEHOLDS AND THE RENTS WHICH MAY BE CHARGED. THESE RESTRICTIONS

MAY LIMIT THE RENTS FOR EACH UNIT TO AN AMOUNT WHICH IS LESS THAN FAIR MARKET RENT. THESE RESTRICTIONS LIMIT THE INCOME OF PERSONS AND HOUSEHOLDS WHO ARE PERMITTED TO RENT AND OCCUPY THE UNITS.

This NOTICE OF AFFORDABILITY RESTRICTIONS (the “Notice”), is dated as of ___________, ___, 2023, and is executed by A0358 MONTEREY, L.P., a California limited partnership (“Owner”), whose address is 2000 East 4th Street, Suite 205, Santa Ana, CA 92705, Attn: Mark Bigley, and by the PALM DESERT HOUSING AUTHORITY (the “PDHA”) in connection with that certain Housing Agreement between Owner and the PDHA dated substantially concurrently herewith and recorded in the Official Records of Riverside County substantially concurrently herewith (the “Regulatory Agreement”).

RECITALS
A. Owner owns the land described on Exhibit “A” in the City of Palm Desert, State of California and the improvements thereon (the “Property”).

B. Owner and PDHA are entering into the Regulatory Agreement substantially concurrently herewith.

C. Capitalized terms used herein but not defined shall have the meaning set forth as described in the Regulatory Agreement.

Page 301 of 851 ends

DRAFT
-2-
12812-0001\2731705v2.doc

TERMS OF NOTICE

1. Requirement for Recorded Notice. This Notice is being executed and recorded pursuant to California Health and Safety Code Section 33334.3(f)(3)(B).

2. Regulatory Agreement. This Notice is being recorded substantially concurrently with the recordation of the Regulatory Agreement, which is incorporated herein by reference.

3. General Recitation of Affordability Restrictions; Term. The Regulatory Agreement restricts the occupancy of ninety-three (93) rental units on the Property to occupancy by extremely low income households and forty-six (46) very low and low income households, as their principal residence at an affordable rent (as more particularly described in and required by the Regulatory Agreement), and in compliance with California Health & Safety Code Sections 50052.5(h), 50053(b), 50106 and Title 25 of the California Code of Regulations Section 6910, et. seq., for a term commencing on the issuance of a Certificate of Occupancy by the PDHA for the improvements required to be made by Owner to the Property under that certain Loan Agreement between Owner and the PDHA dated substantially concurrently herewith, and continuing until 55 years thereafter. Such restrictions in the Regulatory Agreement are incorporated herein by reference. An additional three (3) units are restricted to be used by on-site managers as their residences.

4. Summary of Affordable Housing Restrictions. The Regulatory Agreement restricts the occupants (tenants) of the apartments on the Property to extremely low income, very low income and low income households and restrict the amount of rent which may be charged for the apartment, as follows:
(a) Ninety-three (93) units shall be available to households whose income does not exceed thirty percent (30%) of the Area Median Income (as defined below), adjusted by family size appropriate to the unit. Such units include 5 one-bedroom units; 37 two-bedroom units; and 51 three-bedroom units.
(b) Forty-six (46) units shall be available to households whose income does not exceed thirty percent (59%) of the Area Median Income (as defined below), adjusted by family size appropriate to the unit. Such units include 24 one-bedroom units; 22 two-bedroom units; and 0 three-bedroom units.
(c) Two (2) units (all two-bedroom units) shall be used solely as manager’s units for on-site apartment managers.

Rent Restrictions: Rent is restricted to an “affordable” rent for extremely low income households pursuant to Section 50053(b) of the California Health & Safety Code. As used therein, “adjusted by family size appropriate to the unit” shall have the meaning set forth in California Health and Safety Code Section 50052.5(h).

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

Page 302 of 851 ends

DRAFT
-3-
12812-0001\2731705v2.doc
IN WITNESS WHEREOF, this Notice has been executed and made effective on the day and year first above written.

PDHA:

PALM DESERT HOUSING AUTHORITY
By:

Name:

Title: Executive Director
OWNER:

A0358 MONTEREY, L.P.,
A California limited partnership
By: A0358 Monterey Admin Holdings LLC
A California limited liability company
Its: Administrative General Partner
By: A0358 Montery Holdings LLC,
A California limited liability company
By:

Name:

Its:

By: ,
a
By:

Name:

Its:

Page 303 of 851 ends

DRAFT
-4-
12812-0001\2731705v2.doc
State of California )
County of ___________________ )
On _________________________, before me, , (insert name and title of the officer) Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature (Seal)

Page 304 of 851 ends

DRAFT
-5-
12812-0001\2731705v2.doc
State of California )
County of ___________________ )
On _________________________, before me, , (insert name and title of the officer) Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature (Seal)

Page 305 of 851 ends

Exhibit “A”

Page 1 of 3 ends

12812-0001\2731705v2.doc
EXHIBIT “A”

LEGAL DESCRIPTION OF LAND
Real property in the City of Palm Desert, County of Riverside, State of California, described as follows:

OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN,

THE NORTHWEST CORNER OF THAT PARCEL OF LAND DESCRIBED IN SAID INSTRUMENT NO. 0308440, SAID POINT BEING ALSO A POINT ON A NON TANGENT

Page 306 of 851 ends

Exhibit “A”

Page 2 of 3 ends

12812-0001\2731705v2.doc
CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1700.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS 576°44'54"W;

RIVERSIDE, STATE OF CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE WEST ONE QUARTER (W1/4) CORNER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN,

02.11 (AVENUE 35), A DISTANCE OF 782.06 FEET TO THE POINT OF CURVATURE OF A CURVE CONCAVE TO THE SOUTHWEST, HAVING A RADIUS OF 946.00 FEET;

Page 307 of 851 ends

Exhibit “A”

Page 3 of 3 ends

12812-0001\2731705v2.doc
THENCE 552°30'03"E ALONG THE SOUTHERLY LINE OF SAID PARCEL NO. 2004-02.11 (AVENUE 35), A DISTANCE OF 27.78 FEET TO THE WESTERLY LINE OF PARCEL NO. 2004-02.12 ("C" STREET) CONVEYED TO THE CITY OF PALM DESERT BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.) COUNTY OF RIVERSIDE, STATE OF CALIFORNIA; THENCE S00°09'04"E ALONG THE WESTERLY LINE OF SAID PARCEL NO. 2004-02.12 ("C" STREET), A DISTANCE OF 365.78 FEET TO THE NORTHERLY LINE OF THAT

DRIVE) CONVEYED TO THE CITY OF PALM SPRINGS BY GRANT DEED, RECORDED JUNE 7, 2007, AS INSTRUMENT NO. 2007-0374053, OF OFFICIAL RECORDS (O.R.)

COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, SAID POINT BEING ALSO A POINT

ON A NON-TANGENT CURVE CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 1646.00 FEET AND TO WHICH POINT A RADIAL LINE BEARS S76°15'06"W;

02.11 (AVENUE 35), A DISTANCE OF 24.05 FEET TO THE POINT OF BEGINNING.

APN: 694-130-017 (Affects a portion of the land);
694-130-018 (Affects a portion of the land);
694-130-019 (Affects a portion of the land); and
694-130-020 (Affects a portion of the land)

Page 308 of 851 ends

Crossings at Palm
Desert Apartments
A0358 Monterey, L.P.

Housing Agreement

Page 309 of 851 ends

Page 310 of 851 ends

CITY OF PALM DESERT
CITY MANAGER’S OFFICE

INTEROFFICE MEMORANDUM
Date: August 24, 2023
To: Honorable Mayor and Councilmembers
From: Anthony J. Mejia, City Clerk
Subject: City Council Meeting of August 24, 2023
Below you will find questions received from the Mayor or Councilmembers and answers provided by City staff regarding tonight’s City Council meeting:

ITEM 13d: ACCEPT RESIGNATIONS FROM THE CIVIC ENGAGEMENT COMMITTEE, CULTURAL

ARTS COMMITTEE, AND PARKS AND RECREATION COMMITTEE
Q1: Where are the full bylaws posted on the City’s website? A1: The City Council recently adopted an ordinance to incorporate all bylaws into the Palm Desert Municipal Code (PDMC) for consolidation and easy reference. Please see Title 2, Administration and Personnel, to access the bylaws. In the coming days, City staff will also update the Advisory Body landing webpage to include hyperlinks to the PDMC section of the applicable bylaws.

Q2: Wasn’t there a discussion of permitting non-residents that may hold subject matter experience?
A2: PDMC 2.34.030 states that the City Council may appoint a nonresident in cases where the City Council deems it appropriate to appoint a nonresident who offers specific expertise. In these circumstances, the City Council was unaware that the candidates where nonresidents and therefore did not make a finding or determination that it was necessary to appoint a nonresident for special expertise.

Q3: What measures have been implemented to ensure applicants live within city boundaries as necessary?
A3: City staff has reviewed and verified all appointed body members and applicants are registered voters of the City or their residences are located within City limits. Going forward, City staff will verify the voter registration and/or residential address is within City limits prior to interviews and will ensure that the interview documents indicate whether a candidate is a nonresident.

Page 311 of 851 ends

08/24/2023 Question & Answer Memo

Page 2 of 5 ends

ITEM 13e: HOUSING AUTHORITY: RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A HOUSING AND LOAN AGREEMENT WITH A0358 MONTEREY, L.P., APPROVING A LOAN IN THE AMOUNT OF $7,235,000 FOR CONSTRUCTION OF 176 AFFORDABLE

HOUSING UNITS AND RELATED ACTIONS
ITEM 13g: APPROVE A HOUSING AGREEMENT BY AND BETWEEN THE CITY OF PALM DESERT AND A0358 MONTEREY, LP, FOR THE CROSSINGS AT PALM DESERT APARTMENTS

PROJECT
Q1: Why is only one, 3-bedroom unit allotted under the 80% AMI and zero designated under the 59% AMI (page 164/298)?
A1: One of the City’s Housing Element’s program, Program 4C, is to implement programs or assist in housing affordable to extremely low-income households. It is difficult to locate adequate and affordable housing if there is a limited supply of larger units. Prices for larger units tend to be affordable only to moderate- and above-moderate income households. Based on the need of units for larger families for lower income households and to maintain the feasibility of the Project, the three-bedroom units were allocated primarily for extremely low households.

Q2: With a priority for Veterans identified, is there a cap on units held for Veterans (page 299)?
A2: Units are not set aside for veterans, therefore there is no cap. Typically, priority to Veterans is provided in the selection from the waitlist when a unit becomes available. The developer will establish a policy on the selection of Households or individuals from the waiting list, including any preference. In accordance with the implemented preferences, Veterans will have priority.

Q3: How frequently has the city had to exercise such inspections as provided in Section 5.2 Maintenance, Repair, Alterations (Page173/306)?
A3: These types of inspections are routinely conducted by the other funding sources and the City is provided any findings. Only when there are findings or concerns does the City exercise the option described in Section 5.2; the City has exercised this option minimal times.

ITEM 13f: APPROVE SECOND AMENDMENT TO THE EL PASEO PARKING & BUSINESS

IMPROVEMENT DISTRICT CONTRACT WITH FG CREATIVE
Q1: Which have the most successful campaigns? How is return on investment (ROI) measured?
A1: The EPPBID’s work is multifaceted, and over the years the board has found ways to make its small budget work hard to help achieve its goals. The ultimate goal is to bring people to the street to help support the many stores, galleries, and restaurants in the district. In terms of marketing, they’ve had great success with social media, raising brand awareness and inviting people to the street whenever there is any kind of activation. The partnership with Palm Springs Life has also been beneficial, using direct email, a dedicated website, and physical pieces such as the El Paseo Catalogue. In each case, ROI is measured by the number of people reached, and their engagement with the content provided through each medium.

Page 312 of 851 ends

Palm Desert City CouncilAugust 24, 2023

Palm Desert City Council
August 24, 2023