Agenda packet, regular meeting — Palm Desert City Council, April 11, 2024 (part 3 of 5)

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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 ____________, 2022, 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)

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

WITNESS my hand and official seal.

Signature (Seal)

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EXHIBIT “A”

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

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EXHIBIT “B”

HOUSEHOLD INCOME CERTIFICATION
(Attached)

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EXHIBIT “C”

CERTIFICATE OF CONTINUING COMPLIANCE
(Attached)

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EXHIBIT E

FORM OF PROMISSORY NOTE

SECURED PROMISSORY NOTE
, 202___
Palm Desert, California
$ .00
FOR VALUE RECEIVED, the undersigned, _________________________ (“Maker” or “Developer”), having its principal place of business at 100 Pacifica, Suite 203, Irvine, CA 92618 promises to pay to the order of the PALM DESERT HOUSING AUTHORITY (“Payee”), at 73- 510 Fred Waring Drive, Palm Desert, CA 92260, Attn: _____________________, or at such other place as the holder of this Note from time to time may designate in writing, the principal sum of $______________________ (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 an Amended and Restated Disposition, Development and Loan Agreement between Developer and Payee dated in April, 2024 (“DDLA”). All capitalized terms used herein which are not separately defined herein shall have the meanings set forth therefor in the DDLA.

As of the date of this Note, $__________________ of principal has been disbursed to the City of Palm Desert as a purchase money loan to Maker for its acquisition from the City of the property encumbered by the deed of trust securing this Note (the “Property”). [FOR PHASE II NOTE ONLY:][The remainder of the Principal Amount shall be disbursed as a construction loan as described in Section 5.6 of the DDLA.] “Applicable Interest Rate” means three percent (3%) per annum, simple interest, accruing on all principal sums disbursed and outstanding, except that amounts not paid when due shall accrue interest from the date due until the date paid at the lesser of: (i) ten percent (10%) per annum, simple interest, or (ii) the maximum rate permitted by applicable law.

1. Payments. Payments under this Note shall be due and payable as follows: ____ percent of Residual Receipts, as defined in the DDLA, from the Development on the Property for each calendar year shall be paid to Payee on an annual basis on the first June 1st after the issuance of a final certificate of occupancy for such Development , and each June 1st thereafter (with respect to the Residual Receipts for the preceding calendar year, until all outstanding principal and accrued interest under this Note has been paid 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 Payee as of the earliest of: (i) an Event of Default by Maker under the DDLA (including, without limitation, an uncured default under the Housing Agreement for the Property, any uncured default under any other loan provided by Maker to Payee or any affiliate of Payee, and any uncured default under any other Housing Agreement following the expiration of any applicable cure period

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executed by Payee or any affiliate of Payee in connection with the remainder of the Property described in the DDLA); (ii) as provided in Section 4 below; or (iii) fifty-five (55) years after the date a final certificate of occupancy is issued for the Development (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 Payee encumbering the Property described in the Deed of Trust on which a portion of the Development described in the DDLA is to be developed/constructed.

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 of the Property, or any portion thereof or interest therein, not permitted by the DDLA or approved in writing by Payee, Payee shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Failure of Payee 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 Payee for all reasonable attorneys’ fees, costs and expenses, incurred by Payee in connection with the enforcement of Payee’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 Payee’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 Payee 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 Payee in connection with any such proceeding. (ii) Payee 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 several and shall survive the merger of this Note into any judgment on this Note. (c) Entire Agreement. This Note, the DDLA, the Deed of Trust and the Housing Agreement required by the DDLA, Density Bonus Agreement, and the other documents described in the DDLA 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.

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(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 DDLA the Deed of Trust or any Housing 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 Borrower hereunder, under the DDLA, Housing Agreement or Deed of Trust shall be a nonrecourse obligation of Borrower, such that the 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). Payee 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:
______________________
MAKER:
_______________________________
a California limited partnership
By:

Print Name:

Title:

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EXHIBIT F

FORM OF DEED OF TRUST

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

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

SPACE ABOVE THIS LINE FOR RECORDER'S USE

DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST AND ASSIGNMENT OF RENTS (this “Deed of Trust”) is dated as of _________, 202__, and is executed by ______________________ (“Trustor”), in favor of FIRST AMERICAN TITLE 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

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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 $_______________________, 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.
(2) That it shall faithfully perform each and every covenant contained in the Note, the Disposition, Development and Loan Agreement (“Loan Agreement”) between Trustor and Beneficiary dated substantially concurrently herewith and the Housing Agreement and other documents described therein. Upon an Event 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. (3) 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.
(4) To pay at least ten (10) calendar days 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). (5) That should Trustor fail to make any payment or to do any act as herein provided, 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; 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. (6) To pay immediately and without demand all sums so expended by Beneficiary hereunder, or under the Maintenance Agreement, in accordance with the terms thereof. (7) 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

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such construction loans) 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 ten (10) days of the attachment of the lien or liens. (8) 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. (9) 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 so to pay.
(10) That at any time or from time to time, without liability therefor 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. (11) 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.”
(12) 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 attorney’s fees, upon any indebtedness secured hereby, and in such order as Beneficiary may 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.

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(13) That upon a Default by Trustor under the Loan Agreement (after all notice and cure periods have elapsed), 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.
(14) 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.
(15) 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. (16) 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 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 an Event of Default under the Loan Agreement), or if an Event of Default by Trustor shall occur under the Loan Agreement, then Beneficiary shall have the right, at its option,

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to declare any indebtedness or obligations secured hereby, irrespective of the maturity date specified in any note evidencing the same, immediately due and payable. (17) 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 maximum legal rate permitted to be charged by nonexempt 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. (18) 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 DDLA.
(19) Trustor shall not commit waste with respect to the Property. (20) Any notices, requests or approvals given under this Deed of Trust from one party to another must be in writing and may be personally delivered; or deposited with the United States Postal Service, postage prepaid, for delivery by registered or certified mail, return receipt requested; or sent by next business day delivery service such as FedEx, to the following address:

If to Borrower: Palm Desert Palm Villas Partners LP,
a California limited partnership
100 Pacifica, Suite 203
Irvine, CA 92618
Attn:

If to Beneficiary: Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Either party may change its address for notice by giving written notice of its change of address to the other party. Notices are considered delivered on the date received if given next business day delivery service and three (3) business days after mailing if sent by United States Postal Service registered or certified mail. If a notice is sent by registered or certified mail and receipt is rejected it shall be considered delivered on the date delivery was attempted by the United States Postal Service.
(21) 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)

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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.

TRUSTOR:
______________________________
a California limited partnership
By:

Name:

Title:

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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)

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EXHIBIT "A"

DESCRIPTION OF LAND
Real property in the City of Palm Desert, County of Riverside, State of California, described as follows:
[LEGAL DESCRIPTION TO BE PROVIDED.]

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EXHIBIT G-1

FORM OF PHASE I NOTICE OF AFFORDABILITY RESTRICTIONS

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Executive Director
SPACE ABOVE THIS LINE FOR RECORDER’S USE
FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE §6103

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, VERY LOW AND 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 ___________, ___, 202__, and is executed by ___________________, a __________________ (“Owner”), whose address is _________________, and by the PALM DESERT HOUSING AUTHORITY (the “PDHA”) in connection with that certain Housing Agreement (LMIHF Agreement, and City Loan Restrictions Agreement) among Owner, the City of Palm Desert and the PDHA dated substantially concurrently herewith and recorded in the Official Records of Riverside County substantially concurrently herewith (the “Housing 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”), which is [part of] APN _________________ [ADDRESS?]
B. Owner, City and PDHA are entering into and recording the Housing Agreement substantially concurrently herewith, which relates to and encumbers the Property.

A. Capitalized terms used herein but not defined shall have the meaning set forth in the Housing Agreement.

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

3. General Recitation of Affordability Restrictions; Term. The Housing Agreement restricts the occupancy of 120 rental units on the Property to occupancy by extremely low, very low and low-income households as their principal residence at an affordable rent (as more particularly described in and required by the Housing Agreement), and in compliance with California Health & Safety Code Sections 50052.5, 50053, 50079.5, 50106 and Title 25 of the California Code of Regulations Section 6910, et. seq., for a term commencing on the date thereof and continuing until fifty-five (55) years after issuance of a Certificate of Occupancy by the City of Palm Desert for the improvements required to be made by Owner to the Property under that certain Amended and Restated Disposition, Development and Loan Agreement among Owner, the PDHA and the City of Palm Desert dated in April, 2024. An additional unit is restricted to be used by an on-site manager as its residence.

4. Summary of Affordable Housing Restrictions. The Housing Agreement restricts the occupants (tenants) of the apartments on the Property to extremely low, very low and low income households and restrict the amount of rent which may be charged for the apartment, as follows:
(a) Thirty-six (36) units shall be restricted to households whose income does not exceed thirty percent (30%) of Area Median Income (as defined below), adjusted by family size appropriate to the unit. Such units consist of 6 one-bedroom units, 27 two-bedroom units, and 3 three-bedroom units;
(b) Sixty-one (61) units shall be restricted to households whose income does not exceed fifty-fine percent (59%) of Area Median Income (as defined below), adjusted by family size appropriate to the unit. Such units consist of 9 one-bedroom units, 48 two-bedroom units and 4 three-bedroom units.
(c) Twenty-three (23) units shall be restricted to households whose income does not exceed eighty percent (80%) of Area Median Income, adjusted by family size appropriate to the unit. Such units consist of 23 three-bedroom units. (d) The remaining unit shall be used solely as a manager’s unit for on-site apartment managers.
“Adjusted by family size appropriate to the unit” shall have the meaning set forth in California Health and Safety Code Section 50052.5(h). “Area Median Income” shall have the meaning set forth in California Health and Safety Code Sections 50106 and 50079.5.

Rent Restrictions: Rent is restricted to an “affordable” rent for extremely low, very low and low-income households pursuant to Section 50053(b) of the California Health &

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Safety Code. However, households at 59% of Area Median Income households are to pay affordable rent based on 59% of the Area Median Income.

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

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:
____________________,
Executive Director
OWNER:

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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)

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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)

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EXHIBIT “A”

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

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EXHIBIT G-2

FORM OF PHASE II NOTICE OF AFFORDABILITY RESTRICTIONS

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

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

THE INCOME OF PERSONS AND HOUSEHOLDS WHO ARE PERMITTED TO RENT AND OCCUPY THE UNITS.

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

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

3. General Recitation of Affordability Restrictions; Term. The Housing Agreement restricts the occupancy of 119 units on the Property to occupancy by extremely low, very low and low-income households as their principal residence at an affordable rent (as more particularly described in and required by the Housing Agreement), and in compliance with California Health & Safety Code Sections 50052.5, 50053, 50079.5, 50106 and Title 25 of the California Code of Regulations Section 6910, et. seq., for a term commencing on the date thereof and continuing until fifty-five (55) years after issuance of a Certificate of Occupancy by the City of Palm Desert for the improvements required to be made by Owner to the Property under that certain Amended and Restated Disposition, Development and Loan Agreement among Owner, the PDHA and the City of Palm Desert dated in April, 2024. An additional unit is restricted to be used by an on-site manager as its residence.

4. Summary of Affordable Housing Restrictions. The Housing Agreement restricts the occupants (tenants) of the apartments on the Property to extremely low, very low and low income households and restrict the amount of rent which may be charged for the apartment, as follows:
(a) Thirty-six (36) units shall be restricted to households whose income does not exceed thirty percent (30%) of Area Median Income (as defined below), adjusted by family size appropriate to the unit. Such units consist of 6 one-bedroom units, 47 two-bedroom units, and 4 three-bedroom units;
(b) Sixty (60) units shall be restricted to households whose income does not exceed fifty-fine percent (59%) of Area Median Income (as defined below), adjusted by family size appropriate to the unit. Such units consist of 9 one-bedroom units, 47 two-bedroom units and 4 three-bedroom units.
(c) Twenty-three (23) units shall be restricted to households whose income does not exceed eighty percent (80%) of Area Median Income, adjusted by family size appropriate to the unit. Such units consist of 23 three-bedroom units. (d) The remaining unit shall be used solely as a manager’s unit for on-site apartment managers.
“Adjusted by family size appropriate to the unit” shall have the meaning set forth in California Health and Safety Code Section 50052.5(h). “Area Median Income” shall have the meaning set forth in California Health and Safety Code Sections 50106 and 50079.5.

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Rent Restrictions: Rent is restricted to an “affordable” rent for extremely low, very low and low-income households pursuant to
Section 50053(b) of the California Health & Safety Code.

However, the sixty (60) units with households of 59% of Area Median Income households are to pay affordable rent based on 59% of the Area Median Income.

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:
____________________,
Executive Director
OWNER:

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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)

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G-2-68- P6401-0001\2940216v1.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)

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Exhibit H-1 goes here

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RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:

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

HOUSING AGREEMENT
(LMIHF Agreement; Phase I)
by and between the

PALM DESERT HOUSING AUTHORITY,
and
__________________________
DATED AS OF _________ ____, 202__

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HOUSING AGREEMENT
THIS HOUSING AGREEMENT (the “Agreement”) is dated as of ______________ ___, 202__, and is by and between the PALM DESERT HOUSING AUTHORITY, a public body, corporate and politic (the “Authority”)and ____________________________ (the “Owner”).

Authority, City 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 is the owner of the land described in “Exhibit A” attached hereto (the “Property”).

B. The City, the Authority and Owner have entered into that certain Amended and Restated Disposition, Development and Loan Agreement dated in April, 2024 (“DDLA”), pursuant to which the City conveyed the Property to the Owner for the development described in the DDLA (“Development” or “Apartment Community”) and made a loan to Owner for the purchase price of the Property (“City Loan”). Capitalized terms used but not defined herein shall have the meaning set forth in the DDLA.

C. Pursuant to the DDLA, the Owner executed a Promissory Note in favor of Authority and a deed of trust in favor of Authority securing such Promissory Note and the Authority is obligated to make disbursements of loan proceeds subject to and in accordance with the DDLA.

D. The Authority loan was made with moneys in the Low and Moderate Income Housing Asset Fund established and held by the Authority as successor to the housing assets of the former Palm Desert Redevelopment Agency, and California law and the DDLA require that the Authority obtain recorded restrictions on the Property and Development thereon restricting the apartment units on the Property to extremely low and low income households at an affordable rent.

E. Additionally, the Owner has applied for and obtained a density bonus from the City for the Development which permits greater density and less parking than would otherwise be required, and in exchange, the City also requires that the apartment units be so restricted, and that such restrictions not be subordinate or subordinated to any deeds of trust or other consensual liens.

Such restrictions are contained in a separate Housing Agreement between the City and the Owner.

F. This Agreement is the restriction agreement described in Recital D above.

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 City and the Owner hereby agree as follows:

ARTICLE 1. DEFINITIONS AND INTERPRETATION.

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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 120 of the 121 units in the Apartment Community available to and occupied by, or held vacant for occupancy only by, Extremely Low Income Households, 59% AMI Low Income Households and 80% AMI Low Income Households and rented at an Affordable Rent. Specifically, the Affordable Units consist of 36 units for Extremely Low Income Households, 61 units for 59% AMI Low Income Households and 23 units for 80% AMI Low Income Households. The Affordable Units will include the number of bedrooms shown on the following table:

Bedroom
Size
Extremely
Low
Income
Household
Affordable
Units
59% AMI
Low
Income
Household
Affordable
Units)
80% AMI
Low
Income
Household
Affordable
Units
One 6 9 0
Two 27 48 0
Three 3 4 23
Total 36 61 23
“Affordable Rent” hall 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 36 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, (2) for each of the 61 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, and (3) for each of the 23 Affordable Units reserved for 80% 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.

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“Extremely Low Income Household” shall mean persons and families whose income does not exceed the qualifying limits 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” in the absence of pertinent federal statutes or regulations applicable to the Apartment Community, 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 59% of the AMI 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.
“80% AMI Low Income Household” shall mean persons and families whose income does not exceed the qualifying limits for lower income households 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. “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 published annually by the Housing Authority of the County of Riverside. “Required Covenant Period” shall mean the period commencing on the date all units in the Apartment Community have been completed as evidenced by the City’s issuance of a final Certificate of Occupancy for the Apartment Community, 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 APARTMENT COMMUNITY OBLIGATIONS.

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2.1 Apartment Community and Affordable Units.

The Owner shall develop and construct the Apartment Community within a portion of the Project on the Property in conformity with the DDLA. Thereafter, during the Required Covenant Period, the Owner agrees that not less than 239 units in the Apartment Community shall be Affordable Units, meaning that (a) 36 of such units shall be continually available to and occupied by, or held vacant for occupancy only by, Extremely Low Income Households, (b) 61 of such units shall be continually available to and occupied by, or held vacant for occupancy only by, 59% AMI Low Income Households, and (c) 23 of such units shall be continually available to and occupied by, or held vacant for occupancy only by, 80% AMI Low Income Households. All of the rental units in the Apartment Community shall be similarly constructed and generally constructed at the same time. The Affordable Units shall be of comparable quality to those rental units in the Apartment Community which are available to other tenants. 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 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 (and the occupancy policy attached as Exhibit A thereto) and any amendments or replacements thereof.

2.2 Residential Rental Property.

The Owner covenants to operate the Apartment Community 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 Apartment Community to provide such affordable rental housing. All of the rental units in the Apartment Community with the exception of one (1)manager’s 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 Apartment Community, except as required under this Agreement. 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, 59% AMI Low and 80% 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, 59% AMI Low and 80% 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, 59% AMI Low and 80% AMI Low Income Households, 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

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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
(vi) Obtain such other documentation as may be reasonably acceptable pursuant to Title 25 of the California Code of Regulations, 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 Apartment Community, including the number of Affordable Units held vacant for occupancy by Extremely Low, 59% AMI Low and 80% AMI Low Income Households for such calendar year. Owner shall pay an annual monitoring/administration fee in the amount of Ten Thousand Dollars ($10,000.00), increasing by three percent (3%) annually, concurrently with Developer’s annual payments of Residual Receipts 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, 59% AMI Low and 80% 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, 59% AMI Low or 80% AMI Low Income Household, as applicable, shall not exceed an 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.

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2.6 Income Recertification of Affordable Units. Annually, on the anniversary date of occupancy of an Affordable Unit by an Extremely Low, 59% AMI Low or 80% 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, 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, 59% AMI Low or 80% AMI Low Income Household, as applicable, 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, 59% AMI Low or 80% AMI Low Income Household, as applicable. At such time as a household ceases to qualify as an Extremely Low, 59% AMI Low or 80% AMI Low Income Household, as applicable, based on income recertification, 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, 59% AMI Low or 80% AMI Low Income Household, as applicable, so that the number of Affordable Units occupied by or reserved for occupancy by Extremely Low, 59% AMI Low or 80% 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, 59% AMI Low or 80% AMI Low Income Household, as applicable, and, upon occupancy, the income eligibility of the household as an Extremely Low, 59% AMI Low or 80% AMI Low Income Household is verified and the unit is rented at Affordable Rent.

2.7 Lease or Occupancy Agreement. Prior to the rental or lease of an Affordable Unit to an Extremely Low, 59% AMI Low or 80% 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 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 No Discrimination. Owner covenants, by and for itself and any successors in interest, that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Owner, itself or any person claiming under or through it, establish or permit any such practice or practices of

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discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, subleases or vendees in the Site.

2.7.2 Required Clauses. All deeds, subleases or contracts made relative to the Site, the improvements thereon or any part thereof, shall contain or be subject to substantially the following nondiscrimination and nonsegregation clauses:
"(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) and (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed, nor shall the grantee or any person claiming under or through the grantee, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1)."
(a) In leases: “The lessee herein covenants, by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
(b) That there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee, himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subleases, subtenants or vendees in the land herein leased.
(c) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivisions (d) of Section 51 and Section 1360 of the Civil Code

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and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (a).”
(3) In contracts: “There shall be no discrimination against or segregation of any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee, himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subleases, subtenants or vendees in the land.

2.7.3 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.

2.7.4 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.

2.7.5 The Authority is 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 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 DDLA, and that, in the event of the Owner’s breach of such requirements, potential monetary damages to the Authority and City, as well as to existing and prospective Extremely Low, 59% AMI Low or 80% AMI Low Income Households, would be difficult, if not impossible, to evaluate and quantify.

Therefore, in addition to any other relief to which the Authority or City may be entitled as a

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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 Apartment Community 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 management agent of the Owner and any other contractor of Owner who provides services to occupants of the Apartment Community shall be subject to the reasonable written approval of the Authority. The Owner and/or the management agent (if not the Owner) shall operate the Apartment Community 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. 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 City and to the Owner, and 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 Binding for Term. t is intended by the Parties that except as otherwise expressly provided herein, the provisions of this Agreement shall apply to the Apartment Community 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, or Section 3.3 below, 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.

3.2 Early Termination 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 during involuntary noncompliance as a result of unforeseen events such as fire or act of God which leaves the entire Apartment Community uninhabitable (and the proceeds of insurance available to the Owner as a result thereof are insufficient to reconstruct the Apartment Community), 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

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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 or the City concerning the Apartment Community, 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 or the City 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 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 City’s and the Authority’s interests hereunder are not imminently threatened in its reasonable business judgment, then the City 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 Apartment Community, except for condemnation initiated by the City, the Authority or any other governmental agency or authority.

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4.1.7 The seizure or appropriation of all or, in the reasonable opinion of the Authority, a substantial part of the Apartment Community, except for condemnation initiated by the City, the Authority or any other governmental agency or authority.

4.1.8 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 Apartment Community, which loan is secured by a deed of trust or other instrument affecting the Apartment Community, and such default remains uncured following the expiration of any applicable cure period.

4.2 Option to Lease. [INTENTIONALLY OMITTED}

4.3 Authority Remedies. The Authority and City shall each 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 and/or the City 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 or City is intended to be exclusive of any other available remedy or remedies, 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 or City 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, 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 and the City 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 Apartment Community 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 Apartment Community or any part thereof or requiring any alteration or improvement to be made

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thereon. The Owner shall not commit, suffer, or permit any act to be done in, upon, or to the Apartment Community 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 through representatives, upon reasonable notice of no less than twenty-four (24) hours, on-site inspections and observation of: (i) the maintenance and repair of the Apartment Community, 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 mailed by certified mail, postage prepaid, or twenty-four (24) hours following delivery of such notice to Federal Express or similar commercial carrier for overnight or next business day delivery, addressed as follows:

If to the Authority or City:

Palm Desert Housing Authority
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: Housing Division
If to the Owner:
_____________________________
100 Pacifica, Suite 203
Irvine, CA 92618
Attn: President

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 City and the Owner or the Owner’s agents, employees or contractors, or 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 Apartment Community. 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 Apartment Community, 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.

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5.5 No Claims. Nothing contained in this Agreement shall create or justify any claim against the City or 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 or City 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.

No officer or employee of the Owner shall acquire any interest in conflict with or inimical to the interests of the City or the Authority.

5.7 Non-Liability of City Officials, Employees and Agents. No member, official, employee or agent of the City or the Authority shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by the City or 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 City or 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, and except for performance under the DDLA (which is governed by the terms of the DDLA), 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 City and/or Authority excuse any such delay as an Unavoidable Delay and the City and Authority shall make their determinations as to whether such delay constitutes an Unavoidable Delay using their reasonable judgment.

5.9 Indemnity. The Owner shall indemnify, defend and hold harmless the Authority and the City and all officials, employees and agents of the Authority and/or the City (with counsel reasonably satisfactory to the Authority) 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 Apartment Community, or the Owner’s performance of its obligations under this Agreement, and in the event of settlement, compromise or judgment hold the City and the Authority free and harmless therefrom. 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 or the City 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

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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 City or the Authority to or of 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 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 Approvals by the Authority or City. 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, and any approvals by the City shall be made by the City Manager 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. The DDLA, 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 Apartment Community to the covenants, reservations, and restrictions set forth in this Agreement. The Authority, the City 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 Apartment Community; provided, however, that on the

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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 Apartment Community 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 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, the City 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 Apartment Community, in that Owner’s legal interest in the Apartment Community is rendered less valuable thereby, (ii) the covenants, reservations, restrictions, and agreements set forth herein directly benefit the Property and the Apartment Community (a) by enhancing and increasing the enjoyment and use of the Apartment Community by certain Extremely Low, 59% AMI Low or 80% 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 Apartment Community, and (c) by furthering the public purposes advanced by the Authority and the City, 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 the City and their 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, the City and the Owner.

WHEREFORE, the undersigned has executed this Agreement as of the date first-above written.

OWNER:
_____________________________
AUTHORITY:

PALM DESERT HOUSING AUTHORITY, a
public body, corporate and politic
By: ________________________
Print Name: ___________________
Title: ________________________

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

WITNESS my hand and official seal.

Signature (Seal)

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

WITNESS my hand and official seal.

Signature (Seal)

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

WITNESS my hand and official seal.

Signature (Seal)

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EXHIBIT “A”

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

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EXHIBIT “B”

HOUSEHOLD INCOME CERTIFICATION
(Attached)

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EXHIBIT “C”

CERTIFICATE OF CONTINUING COMPLIANCE
(Attached)

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Exhibit H-2 goes here

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RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:

HOUSING AGREEMENT
(LMIHF Agreement; Phase I)
by and between
the PALM DESERT HOUSING AUTHORITY
and
__________________________
DATED AS OF _________ ____, 202__

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HOUSING AGREEMENT
THIS HOUSING AGREEMENT (the “Agreement”) is dated as of ______________ ___, 202__, and is by and between the PALM DESERT HOUSING AUTHORITY, a public body, corporate and politic (the “Authority”),and ____________________________ (the “Owner”).

Authority, City 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 is the owner of the land described in “Exhibit A” attached hereto (the “Property”).

B. The City, the Authority and Owner have entered into that certain Amended and Restated Disposition, Development and Loan Agreement dated in April, 2024 (“DDLA”), pursuant to which the City conveyed the Property to the Owner for the development described in the DDLA (“Development” or “Apartment Community”) pursuant to which the Authority made a loan to Owner for the purchase price of the Property (“City Loan”). Capitalized terms used but not defined herein shall have the meaning set forth in the DDLA.

Such restrictions are contained in a separate Housing Agreement between the City and the Owner.

G. This Agreement is the restriction agreement described in Recital D above.

ARTICLE 1. DEFINITIONS AND INTERPRETATION.

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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 119 of the 120 units in the Apartment Community available to and occupied by, or held vacant for occupancy only by, Extremely Low Income Households, 59% AMI Low Income Households and 80% AMI Low Income Households and rented at an Affordable Rent. Specifically, the Affordable Units consist of 36 units for Extremely Low Income Households, 60 units for 59% AMI Low Income Households and 23 units for 80% AMI Low Income Households. The Affordable Units will include the number of bedrooms shown on the following table:

Bedroom
Size
Extremely
Low
Income
Household
Affordable
Units
59% AMI
Low
Income
Household
Affordable
Units)
80% AMI
Low
Income
Household
Affordable
Units
One 6 9 0
Two 27 48 0
Three 3 4 23
Total 36 61 23
“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 36 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, (2) for each of the 60 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, and (3) for each of the 23 Affordable Units reserved for 80% 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.

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“Extremely Low Income Household” shall mean persons and families whose income does not exceed the qualifying limits 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” in the absence of pertinent federal statutes or regulations applicable to the Apartment Community, 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 59% of the AMI 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.
“80% AMI Low Income Household” shall mean persons and families whose income does not exceed the qualifying limits for lower income households 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. “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 published annually by the Housing Authority of the County of Riverside. “Required Covenant Period” shall mean the period commencing on the date all units in the Apartment Community have been completed as evidenced by the City’s issuance of a final Certificate of Occupancy for the Apartment Community, and ending as of the fifty-fifth (55th) anniversary thereof.

1.2 Rules of Construction.

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.

ARTICLE 2. ONGOING APARTMENT COMMUNITY OBLIGATIONS.

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2.1 Apartment Community and Affordable Units.

2.2 Residential Rental Property.

The Owner covenants to operate the Apartment Community as residential rental property.

2.3 Extremely Low, 59% AMI Low and 80% AMI Low Income Households.

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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
(vi) Obtain such other documentation as may be reasonably acceptable pursuant to Title 25 of the California Code of Regulations, as amended from time to time, to verify income.

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discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, subleases or vendees in the Site.

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and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (a).”
(3) In contracts: “There shall be no discrimination against or segregation of any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee, himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subleases, subtenants or vendees in the land.

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

Therefore, in addition to any other relief to which the Authority or City may be entitled as a

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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.

ARTICLE 3. TERM AND RECORDATION.

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.

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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:

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

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 The seizure or appropriation of all or, in the reasonable opinion of the Authority, a substantial part of the Apartment Community, except for condemnation initiated by the City, 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 Apartment Community, which loan is secured by a deed of trust or other instrument affecting the Apartment Community, and such default remains uncured following the expiration of any applicable cure period.

4.2 Option to Lease. [INTENTIONALLY OMITTED}

ARTICLE 5. GENERAL PROVISIONS.

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thereon. The Owner shall not commit, suffer, or permit any act to be done in, upon, or to the Apartment Community 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 through representatives, upon reasonable notice of no less than twenty-four (24) hours, on-site inspections and observation of: (i) the maintenance and repair of the Apartment Community, 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.

If to the Authority or City:

Palm Desert Housing Authority
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
Attn: Housing Division
If to the Owner:
__________________________
100 Pacifica, Suite 203
Irvine, CA 92618
Attn: President

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No officer or employee of the Owner shall acquire any interest in conflict with or inimical to the interests of the City or the Authority.

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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 City or the Authority to or of 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 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.

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

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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 Apartment Community 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.

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, the City and the Owner.

WHEREFORE, the undersigned has executed this Agreement as of the date first-above written.

OWNER:
_____________________________
AUTHORITY:

PALM DESERT HOUSING AUTHORITY, a
public body, corporate and politic
By: ________________________
Print Name: ___________________
Title: ________________________

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

WITNESS my hand and official seal.

Signature (Seal)

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

WITNESS my hand and official seal.

Signature (Seal)

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

WITNESS my hand and official seal.

Signature (Seal)

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EXHIBIT “A”

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

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EXHIBIT “B”

HOUSEHOLD INCOME CERTIFICATION
(Attached)

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EXHIBIT “C”

CERTIFICATE OF CONTINUING COMPLIANCE
(Attached)

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EXHIBIT I

SCOPE OF DEVELOPMENT (PHASE I AND PHASE II)
Pursuant to that certain Amended and Restated Disposition, Development and Loan Agreement (“DDLA”) dated in 2024 executed by and among the City of Palm Desert, a municipal corporation (the “City”), the Palm Desert Housing Authority, a public body corporate and politic (the “Authority”) and Palm Companies, LLC (“Palm”), the single asset tax credit limited partnership created and controlled by Palm and approved by the City Manager as the entity who will take title to the Property at the Close of Escrow shall develop a two hundred forty-one (241) unit multifamily rental housing development, including units for extremely low, very low, and low income households (i.e., the Development) on the Property. All capitalized terms not defined herein shall have the meaning ascribed to such terms in the DDLA.

The Development shall conform to plans approved by City (Precise Plan 22-0003/Tentative Parcel Map 38366, and Environmental Assessment 22-0003), including all conditions and mitigation measures imposed by the City in connection with the entitlement/development approval process of the City. This shall include any subsequent updates or extensions to the approvals as approved by the City.

The Development shall be constructed on the Property (such property consisting of approximately 10.49 acres of city-owned vacant land located at the north side of Gerald Ford Drive, between Portola Road and Cook Street in the City of Palm Desert). The project/development, which will be called “Palm Villas at Millennium”, will be built as in two phases, and each phase will include on on-site manager’s unit. The quality of construction shall be of a high level.

PHASES: The Development shall be constructed in two phases, one phase on the Phase I Parcel and the second Phase on the Phase II Parcel. Phase I shall consist of 120 affordable units and one manager’s unit; Phase II shall consist of 119 affordable units and one manager’s unit.

HOUSING TYPE
Palm Villas at Millennium 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 on each Phase (one with the City in connection with a density bonus; the other with the Authority, required due to the Authority’s purchase money loan for Phase I and purchase money and construction loan for Phase II, as described in the DDLA). One two-bedroom unit and one three-bedroom unit, respectively, will be used for the on-site property managers.

SITE AMENITIES---TO BE CONSTRUCTED AS PART OF PHASE I, UNLESS LOCATED ON PHASE II PARCEL
(31)Community Center
o Leasing Office
o Computer Lab

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o Flex-Space
(32) Surveillance Cameras
(33) Picnic Areas (covered)
(34) Laundry Facilities
(35) Tot-Lot/Playground (covered)
(36) Swimming Pool(s):
- One pool will be a minimum of 935 square feet and shall include pool restrooms; the other pool will be a minimum of 700 square feet
- Alternatively, a single pool, no smaller than 1600 square feet, shall be completed • On-Site Property Management
• Gated Access
• Assigned Parking

CONSTRUCTION TYPE & ARCHITECTURAL GOALS
All buildings will be garden style Type V walk-ups with concrete slab-on-grade foundations. The building architecture will be designed to blend with the character of the area and will incorporate Universal Design concepts throughout that emphasizes overall project accessibility. The site will have a spacious feel with open desert landscaped areas and surface parking. Construction of the project is subject to California State prevailing wages, and may be subject to Federal Davis Bacon prevailing wages.

SUSTAINABLE BUILDING / GREEN BUILDING PRACTICES
Palm Communities strives to implement building technologies that produce “green” and sustainable developments. Palm Villas at Millennium will be built per minimum TCAC requirements, which based on current regulations includes achieving minimum CalGreen and CAS compliance.

UNIT AMENITIES
• Energy Star Appliances
o Oven/Stove
o Refrigerator
o Dishwasher
o Garbage Disposal
• Solid Surface Countertops
• Upgraded Cabinets
• Central Air Conditioning/Heating
• Window Blinds
• Carpet/Vinyl or Tile
• Patio or Balcony

SOCIAL SERVICE PROGRAMS
• Service amenities will be conducted in the community buildings and available for all tenants free of charge. A program coordinator will be hired 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

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offered at the center. Typically, the classes will include the following:

English as a Second Language
• Literacy Programs
• Computer Training
• “Basics of Life” Courses
• Entering the Workforce Courses
• Nutrition and Wellness Programs
The developer 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 number PP22-0003/TPM 38366.

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:

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.

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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.

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
- Palm
- 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.

Housing Type – The project shall consist of development of a multi-family apartment complex with two hundred forty-one (241) units, in the two Phases described above.

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Mobility – All facilities shall comply, to the extent feasible, with current CTCAC standards.

Green Building Standards – All facilities shall comply, to the extent feasible, with CTCAC minimum green building standards.

II. DEMOLITION AND SOILS
Except to the extent otherwise expressly provided in the DDLA, the developer assumes all responsibility for surface and subsurface conditions at the Site, and the suitability of the Site for the Improvements. The developer has undertaken all investigation of the Site as it shall deem necessary and has not received or relied upon any representations of City or the Authority, or their respective officers, agents and employees.

III. 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.

IV. MAINTENANCE OF SITE
The developer shall maintain the site free of all weeds and trash prior to start of construction.

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EXHIBIT J

SCHEDULES OF PERFORMANCE (PHASE I AND PHASE II)
All of the construction deadlines described below shall be subject to extension as a result “Force Majeure” in accordance with Section 10.3 of the DDLA.

PHASE I SCHEDULE OF PERFORMANCE:
# TASK DEADLINE
1 Open escrow for Phase I Parcel Promptly after execution of DDLA 2 Developer shall obtain the City Approvals
and obtain permit ready letter for all permits
necessary to construct the Development, and
pay the grading permit fees and all Final Map
fees, and shall cause all security required for
the Final Map under the conditions thereto
(including security under the Subdivision
Improvement Agreement, which must be
signed and delivered as a condition to Close
of Escrow).

Prior to or concurrent with the conveyance
of the Phase I Parcel.
3 Developer shall submit evidence of financing
commitments consistent with the Financing
Plan.

At least thirty (30) days prior to Close of
Escrow.
4 All construction financing to close, and
evidence of committed equity to be provided
(all consistent with final Project Budget)
By or concurrently with Close of Escrow
5 Closing of the conveyance of the Phase I
Parcel
January 1, 2025
6 Developer and City to execute and deliver all
documents required for Closing into Escrow,
as applicable, and satisfy all applicable
closing conditions
Prior to Close of Escrow.
7 Developer commences Construction March 30, 2025
8 Completion of Grading October 1, 2025

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# TASK DEADLINE
9 Completion and issuance of final Certificate
of Occupancy
May 30, 2027

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PHASE II SCHEDULE OF PERFORMANCE:
# TASK DEADLINE
1 Parties to open escrow for the conveyance of
the Phase II Parcel.

Upon closing of conveyance of Phase I
Parcel.
2 Developer shall obtain the City Approvals
and obtain permit ready letter for all permits
necessary to construct the Development, and
pay the grading permit fees and all Final Map
fees, and shall cause all security required for
the Final Map under the conditions thereto
(including security under the Subdivision
Improvement Agreement, which must be
signed and delivered as a condition to Close
of Escrow).

Prior to or concurrent with the conveyance
of the Phase II Parcel.
3 Developer shall submit evidence of financing
commitments consistent with the Financing
Plan.

At least thirty (30) days prior to Close of
Escrow.
4 All construction financing to close, and
evidence of committed equity to be provided
(all consistent with final Project Budget)
By or concurrently with Close of Escrow
5 Closing of the conveyance of the Phase II
Parcel
March 1, 2026
6 Developer and City to execute and deliver all
documents required for Closing into Escrow,
as applicable, and satisfy all applicable
closing conditions
Prior to Close of Escrow.
7 Developer commences Construction May 30, 2026
8 Completion of Grading October 1, 2026
9 Completion and issuance of final Certificate
of Occupancy
May 30, 2028

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EXHIBIT K-1
FINANCING PLAN – PHASE I

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APPENDIX A - TABLE 1
ESTIMATED DEVELOPMENT COSTS 1

PALM VILLAS AT MILLENNIUM - PHASE I

PALM DESERT, CALIFORNIA
I. Land Assemblage Costs
Acquisition Price 2 121 Units $16,248 /Unit $1,966,000
Closing Costs 0% of Purchase Price 0
Total Land Assemblage Costs 121 Units $16,200 /Unit $1,966,000 II. Direct Costs 3
Off-site Improvements 4 Allowance $4,487,000
On-site Improvements 262,231 Sf Land $34 /Sf Land 8,953,000 Extraordinary Costs 5 121 Units $8,653 /Unit 1,047,000
Residential Structure 122,513 Sf GBA $251 /Unit 30,752,000 Community Building 3,781 Sf GBA $519 of Construction Costs 1,963,000 Furnishings, Fixtures & Equipment 121 Units $620 of Construction Costs 75,000 Contractor Fees / General Requirements 14% of Construction Costs 6,621,000 Construction Insurance / Bonds 1% of Construction Costs 538,000 Contingency Allowance 5% of Other Direct Costs 2,718,000 Total Direct Costs 121 Units $472,300 /Unit $57,154,000 III. Indirect Costs
Architecture, Engineering & Consultants 4% of Direct Costs $2,133,000 Permits & Fees 6 121 Units $21,033 /Unit 2,545,000
Taxes, Insurance, Legal & Accounting 2% of Direct Costs 1,396,000 Marketing & Leasing 121 Units $496 /Unit 60,000
Developer Fee 7 10,070,000
Contingency Allowance 3% of Other Indirect Costs 500,000 Total Indirect Costs 121 Units $138,000 /Unit $16,704,000 IV. Financing Costs
Tax-Exempt Bonds Interest 8 $44,853,250 TEBs 8.00% Interest $4,662,000 Taxable Bonds Interest $0 Txble Bonds 8.00% Interest 0
Financing Fees
Construction Loan $44,853,250 Loan 1.11 Points 498,000
Permanent Loan $13,910,000 Loan 1.14 Points 159,000
Issuance Costs $44,853,250 TEBs 0.52 Points 231,000
Tax Credit Fees 121 Units $1,044 /Unit 126,000
Capitalized Reserves
Operating Reserves $186,046 /Mo 3 Months 558,000
SLP Fee 20 Years $5,000 /Year 100,000
Total Financing Costs 121 Units $52,300 /Unit $6,334,000 V. Total Development Costs 121 Units $679,000 /Unit $82,158,000 1 2
3 4
5 6
7 8
Based on Developer's estimates, which KMA determined to be reasonable based on experience.

Based on City appraisal from June 2022.

Project will be required to pay both Federal and State prevailing wages.

Includes solar, swimming pool and parking space shade covers.

Maximum developer fee allowed by TCAC.

Assumes a 24-month development period and a 65% average outstanding balance.

All offsite improvements required will be constructed in Phase I.

Does not include SCE and TUMF fees, which will be waived or refunded.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024

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APPENDIX A - TABLE 2A

AFFORDABILITY MIX

PALM VILLAS AT MILLENNIUM - PHASE I

PALM DESERT, CALIFORNIA
Number Applicable Utility Applicable
of Units TCAC Rent HCD Rent DB Rent Gross Rent Allowance Net Rent 30% TCAC, ELI HCD, VLI DB 12 30% AMI ELI HCD VLI HCD
1-Bdrm Units 2 $524 $567 $945 $524 $29 $495
2-Bdrm Units 7 $629 $638 $1,063 $629 $24 $605
3-Bdrm Units 3 $727 $709 $1,181 $709 $20 $689
30% TCAC, ELI HCD 24 30% AMI ELI HCD N/A
1-Bdrm Units 4 $524 $567 N/A $524 $29 $495
2-Bdrm Units 20 $629 $638 N/A $629 $24 $605
3-Bdrm Units 0 $727 $709 N/A $709 $20 $689
30% TCAC, 59% HCD 14 30% AMI 59% Low N/A
1-Bdrm Units 9 $524 $1,115 N/A $524 $29 $495
2-Bdrm Units 1 $629 $1,254 N/A $629 $24 $605
3-Bdrm Units 4 $727 $1,394 N/A $727 $20 $707
30% TCAC, Low HCD 10 30% AMI Low N/A
1-Bdrm Units 0 $524 $1,134 N/A $524 $29 $495
2-Bdrm Units 0 $629 $1,276 N/A $629 $24 $605
3-Bdrm Units 10 $727 $1,418 N/A $727 $20 $707
60% TCAC, 59% HCD 47 60% AMI 59% Low N/A
1-Bdrm Units 0 $1,049 $1,115 N/A $1,049 $29 $1,020
2-Bdrm Units 47 $1,258 $1,254 N/A $1,254 $24 $1,230
3-Bdrm Units 0 $1,454 $1,394 N/A $1,394 $20 $1,374
60% TCAC, Low HCD 13 60% AMI Low N/A
1-Bdrm Units 0 $1,049 $1,134 N/A $1,049 $29 $1,020
2-Bdrm Units 0 $1,258 $1,276 N/A $1,258 $24 $1,234
3-Bdrm Units 13 $1,454 $1,418 N/A $1,418 $20 $1,398
Manager Unit 1
1-Bdrm Units 0
2-Bdrm Units 0
3-Bdrm Units 1
PBV Overhang 60 FMR Tenant Rent Overhang
Utility
Allowance
Net
Overhang
1-Bdrm Units 15 $1,772 $495 $1,277 $29.37 $1,248.00
2-Bdrm Units 28 $2,211 $605 $1,606 $24.06 $1,582.00
3-Bdrm Units 3 $2,977 $689 $2,288 $20.48 $2,268.00
3-Bdrm Units 14 $2,977 $707 $2,270 $20.48 $2,250.00
Note: Rents are based on 2023 rents and the utility allowances are based on Developer CAUC estimates on 3/12/24 for all electric building.

TOTAL UNITS 121 AVERAGE AFFORDABILITY: 45%
1-Bdrm Units 15 POTENTIAL GROSS INCOME - BASE: $1,347,475 2-Bdrm Units 75 POTENTIAL GROSS INCOME - PBV: $1,215,840 3-Bdrm Units 31
PBV SUBSIDY 60 LMIHAF City Regulatory Agreement: 120
1-Bdrm Units 15 ELI HCD Units 36
2-Bdrm Units 28 VLI HCD Units 0
3-Bdrm Units 17 59% HCD Units 61
Low HCD Units 23
TCAC Regulatory Agreement:
30% AMI Units 60 Density Bonus City Regulatory Agreement 40% AMI Units 0 VLI HCD Units 12
50% AMI Units 0
60% AMI Units 60
70% AMI Units 0
Total Restricted Units 120
Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; AFF - Ph 1; jlr; 3/26/2024

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APPENDIX A - TABLE 2B

STABILIZED NET OPERATING INCOME

PALM VILLAS AT MILLENNIUM - PHASE I

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 1 121 Units $928 /Unit/Mo $1,347,475 Projected Gross Income - PBV Subsidy 1 60 PBVs $1,689 /Unit/Mo 1,215,840 Miscellaneous Income 2 121 Units $12 /Unit/Mo 18,000
Projected Gross Income $2,581,315
(Less) Vacancy & Collection Allowance 2 5% of PGI (129,065) Effective Gross Income $2,452,249
II. Operating Expenses 2
General Operating Expenses 121 Units $8,130 /Unit $983,712 Property Taxes & Assessments 121 Units $58 /Unit 7,000
Social Services 121 Units $653 /Unit 78,972
County Monitoring Fee 121 Units $100 /Unit 12,100
City Monitoring Fee 121 Units $41 /Unit 4,961
Bond Issuer Fee Allowance 5,000
Replacement Reserves 121 Units $350 /Unit 42,350
Total Operating Expenses 121 Units $9,373 /Unit $1,134,095 III. Net Operating Income $1,318,154
1 2
See Table 2A.

Prepared by: Keyser Marston Associates, Inc. Based on Developer estimates, which KMA determined to be reasonable based on experience.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024

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APPENDIX A - TABLE 3
FINANCIAL GAP ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

PALM DESERT, CALIFORNIA
I. Available Funding Sources
A. Permanent Loan 1.20 DCR $1,098,462 Debt Svc $13,910,000

7.50% Interest 40 Years
B. Federal Tax Credit Equity $40,147,466 Gross TC $0.86 Equity $34,523,000 C. State Tax Credit Equity $22,659,500 Gross TC $0.78 Equity $17,618,000 D. County Loan 2 121 Units $55,400 /Unit $6,700,000
E. Contributed Developer Fee 3 0% of Developr Fee $0
F. Deferred Developer Fee 74% of Developr Fee $7,441,000 Total Available Funding Sources 121 Units $662,700 /Unit $80,192,000 II. Financial Gap Calculation
Total Development Costs $82,158,000
(Less) Available Funding Sources (80,192,000)
Financial Gap 121 Units $16,200 /Unit $1,966,000
III. Authority Funding Sources
HOME Funds $0
LMIHAF Funds 1,966,000
PLHA Funds 0
Total Authority Assistance 121 Units $16,200 /Unit $1,966,000 1 2
3 Based on Developer estimates, which KMA determined to be reasonable based on experience.

Previously awarded by County for entire Project; however, County has verified willingness to allow the entire amount to be used in Phase I only.

Per TCAC draft guidelines, a portion of the deferred fee may be requried to be contributed to the Project. Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024

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APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

PALM DESERT, CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 I. Project Income
Projected Gross Income - Base Rents 102.5% /Year $1,347,475 $1,381,161 $1,415,691 $1,451,083 $1,487,360 $1,524,544 $1,562,657 $1,601,724 $1,641,767 $1,682,811 Projected Gross Income - PBV Subsidy 102.5% /Year 1,215,840 1,246,236 1,277,392 1,309,327 1,342,060 1,375,611 1,410,002 1,445,252 1,481,383 1,518,418 Miscellaneous Income 102.5% /Year 18,000 18,450 18,911 19,384 19,869 20,365 20,874 21,396 21,931 22,480 Projected Gross Income $2,581,315 $2,645,847 $2,711,994 $2,779,793 $2,849,288 $2,920,521 $2,993,534 $3,068,372 $3,145,081 $3,223,708 (Less) Vacancy & Collection Allowance 5% of PGI (129,065) (132,292) (135,599) (138,989) (142,464) (146,026) (149,676) (153,418) (157,254) (161,185) Effective Gross Income $2,452,249 $2,513,555 $2,576,394 $2,640,804 $2,706,824 $2,774,495 $2,843,857 $2,914,954 $2,987,827 $3,062,523 II. Operating Expenses
General Operating Expenses 103.5% /Year $983,712 1,018,142 1,053,777 1,090,659 1,128,832 1,168,341 1,209,233 1,251,556 1,295,361 1,340,698 Property Taxes & Assessments 102.0% /Year 7,000 7,140 7,283 7,428 7,577 7,729 7,883 8,041 8,202 8,366 Social Services 103.5% /Year 78,972 81,736 84,597 87,558 90,622 93,794 97,077 100,474 103,991 107,631 County Monitoring Fee 103.5% /Year 12,100 12,524 12,962 13,415 13,885 14,371 14,874 15,395 15,933 16,491 City Monitoring Fee 103.0% /Year 4,961 5,110 5,263 5,421 5,584 5,751 5,924 6,101 6,284 6,473 Bond Issuer Fee 103.5% /Year 5,000 5,175 5,356 5,544 5,738 5,938 6,146 6,361 6,584 6,814 Replacement Reserves 103.5% /Year 42,350 43,832 45,366 46,954 48,598 50,299 52,059 53,881 55,767 57,719 Total Operating Expenses $1,134,095 $1,173,659 $1,214,604 $1,256,979 $1,300,835 $1,346,223 $1,393,196 $1,441,810 $1,492,122 $1,544,192 III. Net Operating Income $1,318,154 $1,339,897 $1,361,790 $1,383,825 $1,405,989 $1,428,272 $1,450,661 $1,473,144 $1,495,705 $1,518,331 (Less) Annual Debt Service (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (Less) AGP Asset Management Fee 2 103.0% /Year (5,000) (5,150) (5,305) (5,464) (5,628) (5,796) (5,970) (6,149) (6,334) (6,524) (Less) MGP Asset Management Fee 2 103.0% /Year (10,000) (10,300) (10,609) (10,927) (11,255) (11,593) (11,941) (12,299) (12,668) (13,048) IV. Cash Flow Available for Distribution $204,692 $225,985 $247,415 $268,972 $290,645 $312,421 $334,289 $356,234 $378,242 $400,298 V. Deferred Developer Fee Payment 3 $7,441,000 $204,692 $225,985 $247,415 $268,972 $290,645 $312,421 $334,289 $356,234 $378,242 $400,298 Accrued Payment 204,692 430,677 678,092 947,064 1,237,709 1,550,130 1,884,419 2,240,652 2,618,894 3,019,192 VI. Residual Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
VII. Authority Loan
Beginning Balance $1,966,000 $2,024,980 $2,083,960 $2,142,940 $2,201,920 $2,260,900 $2,319,880 $2,378,860 $2,437,840 $2,496,820 Beginning Balance (Interest Calc) 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 Add: Interest 3.00% 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 (Less) Payments 4 11.34% 0 0 0 0 0 0 0 0 0 0
Ending Balance 2,024,980 2,083,960 2,142,940 2,201,920 2,260,900 2,319,880 2,378,860 2,437,840 2,496,820 2,555,800 1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

While deferred fee is not projected to be paid off within 15 years per IRS requiremetns; this issue can be managed by contributing a portion of the deferred fee if it is still an issue once the funding sources are secured.

The County will receive 38.65% of the residual receives based on the size of the County loan. Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 509 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $7,441,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 11.34%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 38.65% of the residual receives based on the size of the County loan.

Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 $1,724,881 $1,768,003 $1,812,204 $1,857,509 $1,903,946 $1,951,545 $2,000,334 $2,050,342 $2,101,601 $2,154,141 1,556,378 1,595,287 1,635,170 1,676,049 1,717,950 1,760,899 1,804,921 1,850,044 1,896,295 1,943,703 23,042 23,618 24,208 24,813 25,434 26,069 26,721 27,389 28,074 28,776 $3,304,301 $3,386,908 $3,471,581 $3,558,371 $3,647,330 $3,738,513 $3,831,976 $3,927,775 $4,025,970 $4,126,619 (165,215) (169,345) (173,579) (177,918) (182,366) (186,925) (191,598) (196,388) (201,298) (206,331) $3,139,086 $3,217,563 $3,298,002 $3,380,452 $3,464,964 $3,551,588 $3,640,378 $3,731,387 $3,824,672 $3,920,289 1,387,623 1,436,190 1,486,456 1,538,482 1,592,329 1,648,061 1,705,743 1,765,444 1,827,234 1,891,188 8,533 8,704 8,878 9,055 9,236 9,421 9,609 9,802 9,998 10,198 111,398 115,297 119,332 123,509 127,832 132,306 136,936 141,729 146,690 151,824 17,068 17,666 18,284 18,924 19,586 20,272 20,981 21,716 22,476 23,262 6,667 6,867 7,073 7,285 7,504 7,729 7,961 8,200 8,446 8,699 7,053 7,300 7,555 7,820 8,093 8,377 8,670 8,973 9,287 9,613 59,739 61,830 63,994 66,234 68,552 70,951 73,434 76,005 78,665 81,418 $1,598,081 $1,653,852 $1,711,572 $1,771,309 $1,833,132 $1,897,116 $1,963,335 $2,031,868 $2,102,795 $2,176,201 $1,541,005 $1,563,711 $1,586,430 $1,609,144 $1,631,831 $1,654,472 $1,677,042 $1,699,519 $1,721,876 $1,744,088 (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (6,720) (6,921) (7,129) (7,343) (7,563) (7,790) (8,024) (8,264) (8,512) (8,768) (13,439) (13,842) (14,258) (14,685) (15,126) (15,580) (16,047) (16,528) (17,024) (17,535) $422,385 $444,486 $466,582 $488,654 $510,681 $532,641 $554,510 $576,265 $597,878 $619,323 $422,385 $444,486 $466,582 $488,654 $510,681 $532,641 $554,510 $576,265 $425,606 $0 3,441,576 3,886,062 4,352,644 4,841,298 5,351,978 5,884,619 6,439,129 7,015,394 7,441,000 7,441,000 $0 $0 $0 $0 $0 $0 $0 $0 $172,272 $619,323
$2,555,800 $2,614,780 $2,673,760 $2,732,740 $2,791,720 $2,850,700 $2,909,680 $2,968,660 $3,027,640 $3,067,079 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 0 0 0 0 0 0 0 0 (19,541) (70,251)
2,614,780 2,673,760 2,732,740 2,791,720 2,850,700 2,909,680 2,968,660 3,027,640 3,067,079 3,055,808 Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 510 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 $2,207,994 $2,263,194 $2,319,774 $2,377,768 $2,437,212 $2,498,143 $2,560,596 $2,624,611 $2,690,226 $2,757,482 1,992,295 2,042,103 2,093,155 2,145,484 2,199,121 2,254,099 2,310,452 2,368,213 2,427,419 2,488,104 29,495 30,232 30,988 31,763 32,557 33,371 34,205 35,060 35,937 36,835 $4,229,785 $4,335,529 $4,443,917 $4,555,015 $4,668,891 $4,785,613 $4,905,253 $5,027,885 $5,153,582 $5,282,421 (211,489) (216,776) (222,195) (227,750) (233,444) (239,280) (245,262) (251,394) (257,679) (264,121) $4,018,296 $4,118,753 $4,221,722 $4,327,265 $4,435,447 $4,546,333 $4,659,991 $4,776,491 $4,895,903 $5,018,301 1,957,379 2,025,887 2,096,794 2,170,181 2,246,138 2,324,752 2,406,119 2,490,333 2,577,495 2,667,707 10,402 10,610 10,822 11,038 11,259 11,484 11,714 11,948 12,187 12,431 157,138 162,637 168,330 174,221 180,319 186,630 193,162 199,923 206,920 214,162 24,076 24,919 25,791 26,694 27,628 28,595 29,596 30,632 31,704 32,814 8,960 9,229 9,506 9,791 10,085 10,387 10,699 11,020 11,350 11,691 9,949 10,297 10,658 11,031 11,417 11,816 12,230 12,658 13,101 13,559 84,268 87,217 90,270 93,429 96,699 100,083 103,586 107,212 110,964 114,848 $2,252,171 $2,330,797 $2,412,169 $2,496,385 $2,583,544 $2,673,749 $2,767,106 $2,863,726 $2,963,722 $3,067,212 $1,766,124 $1,787,956 $1,809,553 $1,830,880 $1,851,902 $1,872,584 $1,892,885 $1,912,765 $1,932,182 $1,951,088 (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (9,031) (9,301) (9,581) (9,868) (10,164) (10,469) (10,783) (11,106) (11,440) (11,783) (18,061) (18,603) (19,161) (19,736) (20,328) (20,938) (21,566) (22,213) (22,879) (23,566) $640,571 $661,590 $682,349 $702,814 $722,949 $742,715 $762,074 $780,984 $799,401 $817,278 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 $640,571 $661,590 $682,349 $702,814 $722,949 $742,715 $762,074 $780,984 $799,401 $817,278 $3,055,808 $3,042,127 $3,026,061 $3,007,641 $2,986,900 $2,963,874 $2,938,607 $2,911,143 $2,881,535 $2,849,838 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 (72,661) (75,045) (77,400) (79,721) (82,005) (84,248) (86,443) (88,588) (90,677) (92,705) 3,042,127 3,026,061 3,007,641 2,986,900 2,963,874 2,938,607 2,911,143 2,881,535 2,849,838 2,816,112 Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 511 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 Year 40 $2,826,419 $2,897,080 $2,969,506 $3,043,744 $3,119,838 $3,197,834 $3,277,780 $3,359,724 $3,443,717 $3,529,810 2,550,307 2,614,064 2,679,416 2,746,401 2,815,061 2,885,438 2,957,574 3,031,513 3,107,301 3,184,983 37,756 38,700 39,668 40,659 41,676 42,718 43,786 44,880 46,002 47,152 $5,414,482 $5,549,844 $5,688,590 $5,830,805 $5,976,575 $6,125,989 $6,279,139 $6,436,117 $6,597,020 $6,761,946 (270,724) (277,492) (284,429) (291,540) (298,828) (306,299) (313,956) (321,805) (329,850) (338,097) $5,143,758 $5,272,352 $5,404,161 $5,539,265 $5,677,747 $5,819,690 $5,965,183 $6,114,312 $6,267,170 $6,423,849 2,761,077 2,857,714 2,957,734 3,061,255 3,168,399 3,279,293 3,394,068 3,512,861 3,635,811 3,763,064 12,680 12,933 13,192 13,456 13,725 13,999 14,279 14,565 14,856 15,153 221,658 229,416 237,446 245,756 254,358 263,260 272,474 282,011 291,881 302,097 33,962 35,151 36,381 37,655 38,972 40,336 41,748 43,209 44,722 46,287 12,042 12,403 12,775 13,158 13,553 13,960 14,378 14,810 15,254 15,712 14,034 14,525 15,034 15,560 16,104 16,668 17,251 17,855 18,480 19,127 118,868 123,028 127,334 131,791 136,403 141,178 146,119 151,233 156,526 162,004 $3,174,320 $3,285,171 $3,399,896 $3,518,630 $3,641,515 $3,768,694 $3,900,318 $4,036,544 $4,177,530 $4,323,444 $1,969,438 $1,987,182 $2,004,265 $2,020,635 $2,036,232 $2,050,996 $2,064,864 $2,077,769 $2,089,640 $2,100,405 (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (1,098,462) (12,136) (12,500) (12,875) (13,262) (13,660) (14,069) (14,491) (14,926) (15,374) (15,835) (24,273) (25,001) (25,751) (26,523) (27,319) (28,139) (28,983) (29,852) (30,748) (31,670) $834,568 $851,219 $867,177 $882,388 $896,792 $910,327 $922,928 $934,528 $945,056 $954,438 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 $834,568 $851,219 $867,177 $882,388 $896,792 $910,327 $922,928 $934,528 $945,056 $954,438 $2,816,112 $2,780,426 $2,742,850 $2,703,465 $2,662,354 $2,619,609 $2,575,329 $2,529,620 $2,482,595 $2,434,375 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 1,966,000 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 58,980 (94,667) (96,555) (98,365) (100,091) (101,725) (103,260) (104,689) (106,005) (107,199) (108,264) 2,780,426 2,742,850 2,703,465 2,662,354 2,619,609 2,575,329 2,529,620 2,482,595 2,434,375 2,385,092 Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 512 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Year 41 Year 42 Year 43 Year 44 Year 45 Year 46 Year 47 Year 48 Year 49 Year 50 $3,618,055 $3,708,507 $3,801,219 $3,896,250 $3,993,656 $4,093,498 $4,195,835 $4,300,731 $4,408,249 $4,518,455 3,264,608 3,346,223 3,429,879 3,515,626 3,603,516 3,693,604 3,785,944 3,880,593 3,977,608 4,077,048 48,331 49,539 50,778 52,047 53,349 54,682 56,049 57,451 58,887 60,359 $6,930,994 $7,104,269 $7,281,876 $7,463,923 $7,650,521 $7,841,784 $8,037,829 $8,238,774 $8,444,744 $8,655,862 (346,549) (355,213) (364,093) (373,195) (382,525) (392,088) (401,891) (411,938) (422,236) (432,792) $6,584,445 $6,749,057 $6,917,783 $7,090,728 $7,267,996 $7,449,696 $7,635,938 $7,826,836 $8,022,507 $8,223,070 3,894,771 4,031,088 4,172,176 4,318,203 4,469,340 4,625,767 4,787,668 4,955,237 5,128,670 5,308,173 15,456 15,765 16,081 16,402 16,730 17,065 17,406 17,754 18,109 18,472 312,671 323,614 334,941 346,664 358,797 371,355 384,352 397,804 411,728 426,138 47,907 49,584 51,319 53,115 54,974 56,899 58,890 60,951 63,084 65,292 16,183 16,668 17,169 17,684 18,214 18,760 19,323 19,903 20,500 21,115 19,796 20,489 21,206 21,949 22,717 23,512 24,335 25,186 26,068 26,980 167,675 173,543 179,617 185,904 192,411 199,145 206,115 213,329 220,795 228,523 $4,474,459 $4,630,753 $4,792,509 $4,959,920 $5,133,183 $5,312,502 $5,498,090 $5,690,165 $5,888,955 $6,094,694 $2,109,986 $2,118,304 $2,125,274 $2,130,808 $2,134,813 $2,137,194 $2,137,848 $2,136,671 $2,133,552 $2,128,376 (16,310) (16,799) (17,303) (17,823) (18,357) (18,908) (19,475) (20,059) (20,661) (21,281) (32,620) (33,599) (34,607) (35,645) (36,715) (37,816) (38,950) (40,119) (41,323) (42,562) $2,061,056 $2,067,906 $2,073,364 $2,077,340 $2,079,741 $2,080,470 $2,079,423 $2,076,493 $2,071,569 $2,064,532 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 7,441,000 $2,061,056 $2,067,906 $2,073,364 $2,077,340 $2,079,741 $2,080,470 $2,079,423 $2,076,493 $2,071,569 $2,064,532 $2,385,092 $2,210,282 $2,034,696 $1,858,491 $1,678,609 $1,493,059 $1,301,859 $1,105,042 $902,653 $694,751 1,966,000 1,966,000 1,966,000 1,858,491 1,678,609 1,493,059 1,301,859 1,105,042 902,653 694,751 58,980 58,980 58,980 55,755 50,358 44,792 39,056 33,151 27,080 20,843 (233,789) (234,566) (235,185) (235,636) (235,909) (235,991) (235,873) (235,540) (234,982) (234,184) 2,210,282 2,034,696 1,858,491 1,678,609 1,493,059 1,301,859 1,105,042 902,653 694,751 481,410 Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 513 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Year 51 Year 52 Year 53 Year 54 Year 55
$4,631,417 $4,747,202 $4,865,882 $4,987,529 $5,112,217
4,178,974 4,283,449 4,390,535 4,500,298 4,612,806
61,868 63,415 65,000 66,625 68,291
$8,872,259 $9,094,065 $9,321,417 $9,554,452 $9,793,314
(443,612) (454,702) (466,070) (477,722) (489,665)
$8,428,647 $8,639,363 $8,855,347 $9,076,731 $9,303,649
5,493,960 5,686,248 5,885,267 6,091,251 6,304,445
18,841 19,218 19,602 19,994 20,394
441,053 456,490 472,467 489,003 506,118
67,578 69,943 72,391 74,925 77,547
21,749 22,401 23,073 23,765 24,478
27,925 28,902 29,914 30,961 32,044
236,522 244,800 253,368 262,236 271,414
$6,307,626 $6,528,002 $6,756,081 $6,992,135 $7,236,441
$2,121,021 $2,111,361 $2,099,266 $2,084,596 $2,067,208
(21,920) (22,577) (23,254) (23,952) (24,671)
(43,839) (45,154) (46,509) (47,904) (49,341)
$2,055,262 $2,043,630 $2,029,502 $2,012,740 $1,993,196
$0 $0 $0 $0 $0
7,441,000 7,441,000 7,441,000 7,441,000 7,441,000
$2,055,262 $2,043,630 $2,029,502 $2,012,740 $1,993,196
$481,410 $262,720 $38,789 $0 $0
481,410 262,720 38,789 0 0
14,442 7,882 1,164 0 0
(233,132) (231,813) (39,952) 0 0
262,720 38,789 0 0 0
Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 514 of 855 EXHIBIT K-2
FINANCING PLAN – PHASE II

Page 515 of 855 ends

APPENDIX B - TABLE 1
ESTIMATED DEVELOPMENT COSTS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Land Assemblage Costs
Acquisition Price 2 120 Units $12,158 /Unit $1,459,000
Closing Costs 0% of Purchase Price 0
Total Land Assemblage Costs 120 Units $12,200 /Unit $1,459,000 II. Direct Costs 3
Off-site Improvements 4 Allowance $0
On-site Improvements 194,713 Sf Land $46 /Sf Land 8,953,000 Extraordinary Costs 5 120 Units $7,000 /Unit 840,000
Residential Structure 121,877 Sf GBA $250 /Unit 30,498,000 Community Building 0 Sf GBA $0 of Constructio 0
Furnishings, Fixtures & Equipment 120 Units $625 of Constructio 75,000 Contractor Fees / General Requirements 14% of Construction Costs 5,651,000 Construction Insurance / Bonds 1% of Construction Costs 459,000 Contingency Allowance 5% of Other Direct Costs 2,320,000 Total Direct Costs 120 Units $406,600 /Unit $48,796,000 III. Indirect Costs
Architecture, Engineering & Consultants 4% of Direct Costs $1,783,000 Permits & Fees 6 120 Units $22,267 /Unit 2,672,000
Taxes, Insurance, Legal & Accounting 3% of Direct Costs 1,239,000 Marketing & Leasing 120 Units $500 /Unit 60,000
Developer Fee 7 8,784,000
Contingency Allowance 3% of Other Indirect Costs 500,000 Total Indirect Costs 120 Units $125,300 /Unit $15,038,000 IV. Financing Costs
Tax-Exempt Bonds Interest 8 $41,391,683 TEBs 8.00% Interest $4,779,000 Taxable Bonds Interest $0 Txble Bonds 8.00% Interest 0
Financing Fees
Construction Loan $41,391,683 Loan 1.12 Points 464,000
Permanent Loan $14,032,000 Loan 1.00 Points 140,000
Issuance Costs $41,391,683 TEBs 0.55 Points 229,000
Tax Credit Fees 120 Units $1,002 /Unit 120,000
Capitalized Reserves
Operating Reserves $184,705 /Mo 3 Months 554,000
SLP Fee 20 Years $5,000 /Year 100,000
Total Financing Costs 120 Units $53,200 /Unit $6,386,000 V. Total Development Costs 120 Units $597,300 /Unit $71,679,000 1 2
3 4
5 6
7 8
Based on Developer's estimates.

Based on City appraisal from June 2022.

Project will be required to pay both Federal and State prevailing wages.

Includes solar, swimming pool and parking space shade covers.

Maximum developer fee allowed by TCAC.

Assumes a 24-month development period and a 72% average outstanding balance.

All offsite improvements required will be constructed in Phase I.

Does not include SCE and TUMF fees, which will be waived or refunded.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024

Page 516 of 855 ends

APPENDIX B - TABLE 2A

AFFORDABILITY MIX

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
Number Applicable Utility Applicable
of Units TCAC Rent HCD Rent DB Rent Gross Rent Allowance Net Rent 30% TCAC, ELI HCD, VLI DB 12 30% AMI ELI HCD VLI HCD
1-Bdrm Units 2 $524 $567 $945 $524 $29 $495
2-Bdrm Units 7 $629 $638 $1,063 $629 $24 $605
3-Bdrm Units 3 $727 $709 $1,181 $709 $20 $689
30% TCAC, ELI HCD 24 30% AMI ELI HCD N/A
1-Bdrm Units 4 $524 $567 N/A $524 $29 $495
2-Bdrm Units 20 $629 $638 N/A $629 $24 $605
3-Bdrm Units 0 $727 $709 N/A $709 $20 $689
30% TCAC, 59% HCD 14 30% AMI 59% Low N/A
1-Bdrm Units 9 $524 $1,115 N/A $524 $29 $495
2-Bdrm Units 1 $629 $1,254 N/A $629 $24 $605
3-Bdrm Units 4 $727 $1,394 N/A $727 $20 $707
30% TCAC, Low HCD 10 30% AMI Low N/A
1-Bdrm Units 0 $524 $1,134 N/A $524 $29 $495
2-Bdrm Units 0 $629 $1,276 N/A $629 $24 $605
3-Bdrm Units 10 $727 $1,418 N/A $727 $20 $707
60% TCAC, 59% HCD 46 60% AMI 59% Low N/A
1-Bdrm Units 0 $1,049 $1,115 N/A $1,049 $29 $1,020
2-Bdrm Units 46 $1,258 $1,254 N/A $1,254 $24 $1,230
3-Bdrm Units 0 $1,454 $1,394 N/A $1,394 $20 $1,374
60% TCAC, Low HCD 13 60% AMI Low N/A
1-Bdrm Units 0 $1,049 $1,134 N/A $1,049 $29 $1,020
2-Bdrm Units 0 $1,258 $1,276 N/A $1,258 $24 $1,234
3-Bdrm Units 13 $1,454 $1,418 N/A $1,418 $20 $1,398
Manager Unit 1
1-Bdrm Units 0
2-Bdrm Units 1
3-Bdrm Units 0
PBV Overhang 60 FMR Tenant Rent Overhang
Utility
Allowance
Net
Overhang
1-Bdrm Units 15 $1,772 $495 $1,277 $29 $1,248
2-Bdrm Units 28 $2,211 $605 $1,606 $24 $1,582
3-Bdrm Units 3 $2,977 $689 $2,288 $20 $2,268
3-Bdrm Units 14 $2,977 $707 $2,270 $20 $2,250
Note: Rents are based on 2023 rents and the utility allowances are based on Developer CAUC estimates on 3/12/24 for all electric building.

TOTAL UNITS 120 AVERAGE AFFORDABILITY: 45%
1-Bdrm Units 15 POTENTIAL GROSS INCOME - BASE: $1,332,715 2-Bdrm Units 75 POTENTIAL GROSS INCOME - PBV: $1,215,840 3-Bdrm Units 30
PBV SUBSIDY 60 LMIHAF City Regulatory Agreement: 119
1-Bdrm Units 15 ELI HCD Units 36
2-Bdrm Units 28 VLI HCD Units 0
3-Bdrm Units 17 59% HCD Units 60
Low HCD Units 23
TCAC Regulatory Agreement:
30% AMI Units 60 Density Bonus City Regulatory Agreement 40% AMI Units 0 VLI HCD Units 12
50% AMI Units 0
60% AMI Units 59
70% AMI Units 0
Total Restricted Units 119
Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; AFF - Ph 2; jlr; 3/26/2024

Page 517 of 855 ends

APPENDIX B - TABLE 2B

STABILIZED NET OPERATING INCOME

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 1 120 Units $925 /Unit/Mo $1,332,715 Projected Gross Income - PBV Subsidy 1 60 PBVs $1,689 /Unit/Mo 1,215,840 Miscellaneous Income 2 120 Units $12 /Unit/Mo 17,850
Projected Gross Income $2,566,405
(Less) Vacancy & Collection Allowance 2 5% of PGI (128,320) Effective Gross Income $2,438,085
II. Operating Expenses 2
General Operating Expenses 120 Units $8,087 /Unit $970,446 Property Taxes & Assessments 120 Units $58 /Unit 7,000
Social Services 120 Units $658 /Unit 78,972
County Monitoring Fee 120 Units $0 /Unit 0
City Monitoring Fee 120 Units $41 /Unit 4,920
Bond Issuer Fee Allowance 5,000
Replacement Reserves 120 Units $350 /Unit 42,000
Total Operating Expenses 120 Units $9,236 /Unit $1,108,338 III. Net Operating Income $1,329,747
1 2
See Table 2A.

Based on Developer estimates, which KMA determined to be reasonable based on experience.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024

Page 518 of 855 ends

APPENDIX B - TABLE 3

FINANCIAL GAP ANALYSIS

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Available Funding Sources
A. Permanent Loan 1.20 DCR $1,108,122 Debt Svc $14,032,000

7.50% Interest 40 Years
B. Federal Tax Credit Equity $35,018,207 Gross TC $0.86 Equity $30,112,000 C. State Tax Credit Equity $20,202,812 $0.82 Equity $16,524,000 D. County Loan 2 120 Units $0 /Unit $0
E. Contributed Developer Fee 3 0% of Developr Fee $0
F. Deferred Developer Fee 71% of Developr Fee $6,222,000 Total Available Funding Sources $66,890,000
II. Financial Gap Calculation
Total Development Costs $71,679,000
(Less) Available Funding Sources (66,890,000)
Financial Gap 120 Units $39,908 /Unit $4,789,000
III. Authority Funding Sources per Developer Request
HOME Funds $0
LMIHAF Funds 4,789,000
PLHA Funds 0
Total Authority Assistance 120 Units $39,908 /Unit $4,789,000 1 2
3 Previously awarded by County for entire Project; however, County has verified willingness to allow the entire amount to be used in Phase I only.

Per TCAC draft guidelines, a portion of the deferred fee may be requried to be contributed to the Project.

Based on Developer estimates, which KMA determined to be reasonable based on experience.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024

Page 519 of 855 ends

APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 I. Project Income
Projected Gross Income - Base Rents 102.5% /Year $1,332,715 $1,366,033 $1,400,184 $1,435,189 $1,471,068 $1,507,845 $1,545,541 $1,584,180 $1,623,784 $1,664,379 Projected Gross Income - PBV Subsidy 102.5% /Year 1,215,840 1,246,236 1,277,392 1,309,327 1,342,060 1,375,611 1,410,002 1,445,252 1,481,383 1,518,418 Miscellaneous Income 102.5% /Year 17,850 18,296 18,754 19,222 19,703 20,196 20,701 21,218 21,748 22,292 Projected Gross Income $2,566,405 $2,630,565 $2,696,330 $2,763,738 $2,832,831 $2,903,652 $2,976,243 $3,050,649 $3,126,916 $3,205,089 (Less) Vacancy & Collection Allowance 5% of PGI (128,320) (131,528) (134,817) (138,187) (141,642) (145,183) (148,812) (152,533) (156,346) (160,255) Effective Gross Income $2,438,085 $2,499,037 $2,561,513 $2,625,551 $2,691,189 $2,758,469 $2,827,431 $2,898,117 $2,970,570 $3,044,834 II. Operating Expenses
General Operating Expenses 103.5% /Year $970,446 1,004,412 1,039,566 1,075,951 1,113,609 1,152,585 1,192,926 1,234,678 1,277,892 1,322,618 Property Taxes & Assessments 102.0% /Year 7,000 7,140 7,283 7,428 7,577 7,729 7,883 8,041 8,202 8,366 Social Services 103.5% /Year 78,972 81,736 84,597 87,558 90,622 93,794 97,077 100,474 103,991 107,631 County Monitoring Fee 103.5% /Year 0 0 0 0 0 0 0 0 0 0
City Monitoring Fee 103.0% /Year 4,920 5,068 5,220 5,376 5,538 5,704 5,875 6,051 6,233 6,419 Bond Issuer Fee 103.5% /Year 5,000 5,175 5,356 5,544 5,738 5,938 6,146 6,361 6,584 6,814 Replacement Reserves 103.5% /Year 42,000 43,470 44,991 46,566 48,196 49,883 51,629 53,436 55,306 57,242 Total Operating Expenses $1,108,338 $1,147,000 $1,187,013 $1,228,423 $1,271,279 $1,315,633 $1,361,536 $1,409,042 $1,458,207 $1,509,090 III. Net Operating Income $1,329,747 $1,352,037 $1,374,500 $1,397,128 $1,419,910 $1,442,836 $1,465,895 $1,489,075 $1,512,362 $1,535,744 (Less) Annual Debt Service (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (Less) AGP Asset Management Fee 2 103.0% /Year (5,000) (5,150) (5,305) (5,464) (5,628) (5,796) (5,970) (6,149) (6,334) (6,524) (Less) MGP Asset Management Fee 2 103.0% /Year (10,000) (10,300) (10,609) (10,927) (11,255) (11,593) (11,941) (12,299) (12,668) (13,048) IV. Cash Flow Available for Distribution $206,624 $228,464 $250,464 $272,615 $294,905 $317,325 $339,862 $362,505 $385,238 $408,050 V. Deferred Developer Fee Payment 3 $6,222,000 $206,624 $228,464 $250,464 $272,615 $294,905 $317,325 $339,862 $362,505 $385,238 $408,050 Accrued Payment 206,624 435,089 685,553 958,168 1,253,073 1,570,398 1,910,260 2,272,764 2,658,003 3,066,052 VI. Residual Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
VII. Authority Loan
Beginning Balance $4,789,000 $4,932,670 $5,076,340 $5,220,010 $5,363,680 $5,507,350 $5,651,020 $5,794,690 $5,938,360 $6,082,030 Beginning Balance (Interest Calc) 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 Add: Interest 3.00% 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 (Less) Payments 4 50.00% 0 0 0 0 0 0 0 0 0 0
Ending Balance 4,932,670 5,076,340 5,220,010 5,363,680 5,507,350 5,651,020 5,794,690 5,938,360 6,082,030 6,225,700 1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 520 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 $1,705,988 $1,748,638 $1,792,354 $1,837,163 $1,883,092 $1,930,169 $1,978,423 $2,027,884 $2,078,581 $2,130,546 1,556,378 1,595,287 1,635,170 1,676,049 1,717,950 1,760,899 1,804,921 1,850,044 1,896,295 1,943,703 22,850 23,421 24,006 24,606 25,222 25,852 26,498 27,161 27,840 28,536 $3,285,216 $3,367,346 $3,451,530 $3,537,818 $3,626,264 $3,716,920 $3,809,843 $3,905,089 $4,002,716 $4,102,784 (164,261) (168,368) (172,577) (176,891) (181,313) (185,846) (190,492) (195,255) (200,136) (205,140) $3,120,955 $3,198,979 $3,278,953 $3,360,927 $3,444,950 $3,531,074 $3,619,351 $3,709,834 $3,802,580 $3,897,645 1,368,910 1,416,822 1,466,411 1,517,735 1,570,856 1,625,836 1,682,740 1,741,636 1,802,593 1,865,684 8,533 8,704 8,878 9,055 9,236 9,421 9,609 9,802 9,998 10,198 111,398 115,297 119,332 123,509 127,832 132,306 136,936 141,729 146,690 151,824 0 0 0 0 0 0 0 0 0 0
6,612 6,810 7,015 7,225 7,442 7,665 7,895 8,132 8,376 8,627 7,053 7,300 7,555 7,820 8,093 8,377 8,670 8,973 9,287 9,613 59,245 61,319 63,465 65,686 67,985 70,365 72,827 75,376 78,015 80,745 $1,561,751 $1,616,251 $1,672,655 $1,731,030 $1,791,444 $1,853,969 $1,918,678 $1,985,648 $2,054,958 $2,126,690 $1,559,204 $1,582,727 $1,606,298 $1,629,897 $1,653,506 $1,677,105 $1,700,673 $1,724,186 $1,747,622 $1,770,955 (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (6,720) (6,921) (7,129) (7,343) (7,563) (7,790) (8,024) (8,264) (8,512) (8,768) (13,439) (13,842) (14,258) (14,685) (15,126) (15,580) (16,047) (16,528) (17,024) (17,535) $430,923 $453,842 $476,789 $499,747 $522,695 $545,613 $568,480 $591,271 $613,963 $636,530 $430,923 $453,842 $476,789 $499,747 $522,695 $545,613 $226,340 $0 $0 $0 3,496,975 3,950,817 4,427,606 4,927,352 5,450,047 5,995,660 6,222,000 6,222,000 6,222,000 6,222,000 $0 $0 $0 $0 $0 $0 $342,140 $591,271 $613,963 $636,530
$6,225,700 $6,369,370 $6,513,040 $6,656,710 $6,800,380 $6,944,050 $7,087,720 $7,060,320 $6,908,355 $6,745,043 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 0 0 0 0 0 0 (171,070) (295,636) (306,982) (318,265)
6,369,370 6,513,040 6,656,710 6,800,380 6,944,050 7,087,720 7,060,320 6,908,355 6,745,043 6,570,448 Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 521 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 $2,183,809 $2,238,404 $2,294,365 $2,351,724 $2,410,517 $2,470,780 $2,532,549 $2,595,863 $2,660,759 $2,727,278 1,992,295 2,042,103 2,093,155 2,145,484 2,199,121 2,254,099 2,310,452 2,368,213 2,427,419 2,488,104 29,249 29,981 30,730 31,498 32,286 33,093 33,920 34,768 35,637 36,528 $4,205,354 $4,310,488 $4,418,250 $4,528,706 $4,641,924 $4,757,972 $4,876,921 $4,998,844 $5,123,815 $5,251,911 (210,268) (215,525) (220,913) (226,436) (232,097) (237,899) (243,846) (249,943) (256,191) (262,596) $3,995,086 $4,094,963 $4,197,337 $4,302,271 $4,409,827 $4,520,073 $4,633,075 $4,748,902 $4,867,624 $4,989,315 1,930,983 1,998,567 2,068,517 2,140,915 2,215,847 2,293,402 2,373,671 2,456,749 2,542,735 2,631,731 10,402 10,610 10,822 11,038 11,259 11,484 11,714 11,948 12,187 12,431 157,138 162,637 168,330 174,221 180,319 186,630 193,162 199,923 206,920 214,162 0 0 0 0 0 0 0 0 0 0
8,886 9,153 9,427 9,710 10,001 10,301 10,610 10,929 11,257 11,594 9,949 10,297 10,658 11,031 11,417 11,816 12,230 12,658 13,101 13,559 83,571 86,496 89,523 92,657 95,900 99,256 102,730 106,326 110,047 113,899 $2,200,928 $2,277,760 $2,357,277 $2,439,572 $2,524,743 $2,612,890 $2,704,117 $2,798,533 $2,896,247 $2,997,377 $1,794,158 $1,817,203 $1,840,060 $1,862,699 $1,885,084 $1,907,183 $1,928,958 $1,950,369 $1,971,377 $1,991,938 (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (9,031) (9,301) (9,581) (9,868) (10,164) (10,469) (10,783) (11,106) (11,440) (11,783) (18,061) (18,603) (19,161) (19,736) (20,328) (20,938) (21,566) (22,213) (22,879) (23,566) $658,944 $681,176 $703,196 $724,972 $746,470 $767,654 $788,486 $808,927 $828,936 $848,467 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 $658,944 $681,176 $703,196 $724,972 $746,470 $767,654 $788,486 $808,927 $828,936 $848,467 $6,570,448 $6,384,646 $6,187,728 $5,979,800 $5,760,984 $5,531,419 $5,291,262 $5,040,688 $4,779,895 $4,508,824 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,789,000 4,779,895 4,508,824 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,670 143,397 135,265 (329,472) (340,588) (351,598) (362,486) (373,235) (383,827) (394,243) (404,464) (414,468) (424,233) 6,384,646 6,187,728 5,979,800 5,760,984 5,531,419 5,291,262 5,040,688 4,779,895 4,508,824 4,219,855 Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 522 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 Year 40 $2,795,460 $2,865,347 $2,936,981 $3,010,405 $3,085,665 $3,162,807 $3,241,877 $3,322,924 $3,405,997 $3,491,147 2,550,307 2,614,064 2,679,416 2,746,401 2,815,061 2,885,438 2,957,574 3,031,513 3,107,301 3,184,983 37,442 38,378 39,337 40,320 41,329 42,362 43,421 44,506 45,619 46,759 $5,383,209 $5,517,789 $5,655,734 $5,797,127 $5,942,055 $6,090,606 $6,242,872 $6,398,943 $6,558,917 $6,722,890 (269,161) (275,890) (282,787) (289,857) (297,103) (304,531) (312,144) (319,948) (327,946) (336,145) $5,114,048 $5,241,899 $5,372,946 $5,507,270 $5,644,952 $5,786,076 $5,930,728 $6,078,996 $6,230,971 $6,386,745 2,723,842 2,819,176 2,917,847 3,019,972 3,125,671 3,235,070 3,348,297 3,465,487 3,586,779 3,712,317 12,680 12,933 13,192 13,456 13,725 13,999 14,279 14,565 14,856 15,153 221,658 229,416 237,446 245,756 254,358 263,260 272,474 282,011 291,881 302,097 0 0 0 0 0 0 0 0 0 0
11,942 12,300 12,669 13,049 13,441 13,844 14,260 14,687 15,128 15,582 14,034 14,525 15,034 15,560 16,104 16,668 17,251 17,855 18,480 19,127 117,885 122,011 126,282 130,702 135,276 140,011 144,911 149,983 155,232 160,666 $3,102,041 $3,210,362 $3,322,470 $3,438,495 $3,558,575 $3,682,852 $3,811,473 $3,944,589 $4,082,357 $4,224,941 $2,012,007 $2,031,537 $2,050,477 $2,068,775 $2,086,377 $2,103,224 $2,119,255 $2,134,407 $2,148,613 $2,161,803 (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (1,108,122) (12,136) (12,500) (12,875) (13,262) (13,660) (14,069) (14,491) (14,926) (15,374) (15,835) (24,273) (25,001) (25,751) (26,523) (27,319) (28,139) (28,983) (29,852) (30,748) (31,670) $867,476 $885,913 $903,728 $920,868 $937,276 $952,893 $967,658 $981,506 $994,369 $1,006,176 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 $867,476 $885,913 $903,728 $920,868 $937,276 $952,893 $967,658 $981,506 $994,369 $1,006,176 $4,219,855 $3,912,713 $3,587,138 $3,242,888 $2,879,740 $2,497,495 $2,095,973 $1,675,023 $1,234,521 $774,372 4,219,855 3,912,713 3,587,138 3,242,888 2,879,740 2,497,495 2,095,973 1,675,023 1,234,521 774,372 126,596 117,381 107,614 97,287 86,392 74,925 62,879 50,251 37,036 23,231 (433,738) (442,957) (451,864) (460,434) (468,638) (476,447) (483,829) (490,753) (497,185) (503,088) 3,912,713 3,587,138 3,242,888 2,879,740 2,497,495 2,095,973 1,675,023 1,234,521 774,372 294,515 Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 523 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Year 41 Year 42 Year 43 Year 44 Year 45 Year 46 Year 47 Year 48 Year 49 Year 50 $3,578,426 $3,667,886 $3,759,584 $3,853,573 $3,949,912 $4,048,660 $4,149,877 $4,253,624 $4,359,964 $4,468,963 3,264,608 3,346,223 3,429,879 3,515,626 3,603,516 3,693,604 3,785,944 3,880,593 3,977,608 4,077,048 47,928 49,127 50,355 51,614 52,904 54,227 55,582 56,972 58,396 59,856 $6,890,962 $7,063,236 $7,239,817 $7,420,813 $7,606,333 $7,796,491 $7,991,403 $8,191,189 $8,395,968 $8,605,867 (344,549) (353,162) (361,991) (371,041) (380,317) (389,825) (399,571) (409,560) (419,799) (430,294) $6,546,413 $6,710,074 $6,877,826 $7,049,771 $7,226,016 $7,406,666 $7,591,833 $7,781,628 $7,976,169 $8,175,573 3,842,248 3,976,726 4,115,912 4,259,969 4,409,068 4,563,385 4,723,104 4,888,412 5,059,507 5,236,589 15,456 15,765 16,081 16,402 16,730 17,065 17,406 17,754 18,109 18,472 312,671 323,614 334,941 346,664 358,797 371,355 384,352 397,804 411,728 426,138 0 0 0 0 0 0 0 0 0 0
16,049 16,531 17,027 17,537 18,064 18,605 19,164 19,739 20,331 20,941 19,796 20,489 21,206 21,949 22,717 23,512 24,335 25,186 26,068 26,980 166,289 172,109 178,133 184,367 190,820 197,499 204,412 211,566 218,971 226,635 $4,372,509 $4,525,235 $4,683,299 $4,846,888 $5,016,195 $5,191,421 $5,372,772 $5,560,462 $5,754,713 $5,955,755 $2,173,904 $2,184,839 $2,194,527 $2,202,883 $2,209,820 $2,215,245 $2,219,061 $2,221,167 $2,221,456 $2,219,819 (16,310) (16,799) (17,303) (17,823) (18,357) (18,908) (19,475) (20,059) (20,661) (21,281) (32,620) (33,599) (34,607) (35,645) (36,715) (37,816) (38,950) (40,119) (41,323) (42,562) $2,124,974 $2,134,440 $2,142,616 $2,149,415 $2,154,748 $2,158,521 $2,160,635 $2,160,988 $2,159,472 $2,155,975 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 6,222,000 $2,124,974 $2,134,440 $2,142,616 $2,149,415 $2,154,748 $2,158,521 $2,160,635 $2,160,988 $2,159,472 $2,155,975 $294,515 $0 $0 $0 $0 $0 $0 $0 $0 $0
294,515 0 0 0 0 0 0 0 0 0
8,835 0 0 0 0 0 0 0 0 0
(303,350) 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 524 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Year 51 Year 52 Year 53 Year 54 Year 55
$4,580,687 $4,695,205 $4,812,585 $4,932,899 $5,056,222
4,178,974 4,283,449 4,390,535 4,500,298 4,612,806
61,352 62,886 64,458 66,070 67,722
$8,821,014 $9,041,539 $9,267,578 $9,499,267 $9,736,749
(441,051) (452,078) (463,380) (474,964) (486,838)
$8,379,963 $8,589,462 $8,804,198 $9,024,303 $9,249,911
5,419,870 5,609,565 5,805,900 6,009,107 6,219,425
18,841 19,218 19,602 19,994 20,394
441,053 456,490 472,467 489,003 506,118
0 0 0 0 0
21,569 22,216 22,882 23,569 24,276
27,925 28,902 29,914 30,961 32,044
234,567 242,777 251,274 260,069 269,171
$6,163,824 $6,379,168 $6,602,039 $6,832,702 $7,071,429
$2,216,138 $2,210,294 $2,202,159 $2,191,601 $2,178,482
(21,920) (22,577) (23,254) (23,952) (24,671)
(43,839) (45,154) (46,509) (47,904) (49,341)
$2,150,380 $2,142,563 $2,132,396 $2,119,745 $2,104,470
$0 $0 $0 $0 $0
6,222,000 6,222,000 6,222,000 6,222,000 6,222,000
$2,150,380 $2,142,563 $2,132,396 $2,119,745 $2,104,470
$0 $0 $0 $0 $0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 525 of 855

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777 SOUTH FIGUEROA STREET, SUITE 2555  LOS ANGELES, CALIFORNIA 90017  PHONE 213.622.8095 2403007:PD;JLR
WWW.KEYSERMARSTON.COM 17166.015.001
ADVISORS IN:

Real Estate
Affordable Housing
Economic Development

BERKELEY
Debbie M. Kern
David Doezema

LOS ANGELES
Kathleen H. Head
Kevin E. Engstrom
Julie L. Romey
Tim R. Bretz

SAN DIEGO
Paul C. Marra
Linnie A. Gavino

EMERITUS
A. Jerry Keyser
Timothy C. Kelly

MEMORANDUM
At the request of the Housing Authority (“Authority”) of the City of Palm Desert (“City”), Keyser Marston Associates, Inc. (“KMA”) prepared a financial gap analysis to reflect the Palm Companies, LLC (“Developer”) revised proposal to develop a previously approved 241 unit affordable apartment project (“Project”) on the 10.49-acre City-owned site located on the north side of Gerald Ford Drive between Cook Street and Portola Road (“Site”). The Developer has returned to a two-phased approach to financing the development after the City approved changing the Project to a one-phased development in June 2023.

The following analysis reviews the changes to the proposed Project since the Amended and Restated DDLA was approved in June 2023, and determines whether the previously approved financial assistance continues to be warranted.

EXECUTIVE SUMMARY
In October 2022 the City agreed to sell the Site to the Developer for the fair market value of the Site, estimated at $3,425,000, and the Authority, acting as the Housing Successor (collectively referred to as “Authority”), agreed to provide up to $6,755,000 in financial assistance to the Developer, including the value of the land, through a Disposition and Development Loan Agreement (“DDLA”). However, the Project did not receive a taxexempt bonds (“TEB”) allocation from the California Debt Limit Allocation Committee (“CDLAC”) in either of the two 2023 allocation rounds.

To: Jessica Gonzales, Housing Manager
City of Palm Desert
From: Julie Romey
Date: March 27, 2024
Subject: Palm Villas at Millennium – Financial Gap Analysis (Revised)

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2403007:PD;JLR
17166.015.001
Jessica Gonzales, City of Palm Desert March 27, 2024
Palm Villas at Millennium – Financial Gap Analysis (Revised) Page 2 After changing the Project to a one phased Project in the Amended and Restated DDLA approved in June 2023, the Project also did not receive a Multifamily Housing Program (“MHP”) loan allocation. Therefore, the Developer requests returning to the October 2022 DDLA structure so that the Project will be developed in two phases.

KMA completed a financial gap analysis that confirms the two-phased Project will require $6,755,000, or $28,000 per unit, in financial assistance. The following are the summary of changes to the Amended and Restated DDLA that is being requested by the Developer:

1. Project Description. The Project will be changed back to a two-phased project, with Phase I including 6.02 acres (“Phase I Parcel”) and 121 units developed (“Phase I Project”) and Phase II including 4.47 acres (“Phase II Parcel”)and 120 units developed (“Phase II Project”). The total Site size (10.49 acres) and number of total units (241 units) remain unchanged from the previously approved Amended and Restated DDLA.

2. Project Timeline. The Project Timeline will be adjusted to allow an April 2024 CDLAC application submission. However, if the Phase I Project does not receive a CDLAC allocation in the April 2024 round, the City will be able to terminate the Amended and Restated DDLA. If all goes according to the plan, Phase I will be completed in November 2026 and Phase II in November 2027.

3. Land Purchase Price. The land Purchase Price will be set at $3,425,000 for the entire Site, as referred to in the June 2023 Amended and Restated DDLA, which was based on a June 2022 fair market value appraisal. The purchase prices by phase will be $1,965,539 (Phase I) and $1,459,461 (Phase II). The City will no longer carry-back the land value or require the land to be sold at the fair market value at time of conveyance.

4. Authority Loan. The $6,755,000 in assistance will be provided by the Authority from the Low and Moderate Income Housing Asset Fund (“LMIHAF”) money and allocated to Phase I as a $1,965,539 loan and to Phase II as a $4,789,461 loan. Both loans will have 55 year terms from Certificate of Occupancy (“COO”), 3% simple interest rates, annual payments based on a proportional share of 50% share of residual receipts, with the loans being due and payable at the end of the term.

5. Proposed Funding Sources. Neither phase will be applying for funding sources from the State of California Housing and Community Development department (“HCD”). The funding sources proposed for both phases are as follows:

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Jessica Gonzales, City of Palm Desert March 27, 2024
Palm Villas at Millennium – Financial Gap Analysis (Revised) Page 3

6. Affordability Restrictions. The Project affordability restrictions will continue to include the same affordability requirements. However, the restrictions will be split into two phases and will be secured on the Phase I Parcel and Phase II Parcel separately:
a. Density Bonus Regulatory Agreement
b. Authority Regulatory Agreement
Based on the KMA analysis, the proposed changes to the Amended and Restated DDLA will result in a feasible two-phased project that should be competitive in the April 2024 CDLAC round. Also, the total amount of assistance requested from the Authority, or $6,755,000, is warranted and meets the Senate Bill 341 (“SB 341”) income targeting requirements.

Phase I Phase II
Tax-Exempt Bonds CDLAC $44,853,000 $41,392,000
Permanent Loan TBD $13,910,000 $14,032,000
4% Federal Tax Credits TCAC $34,523,000 $30,113,000
State Tax Credits TCAC $17,618,000 $16,524,000
County Loan County $6,700,000 $0
Authority Loan Authority $1,966,000 $4,789,000
Contributed Developer Fee Developer $0 $0
Deferred Developer Fee Developer $7,441,000 $6,222,000
Project Based Vouchers County Awarded in 2022/23 60 PBVs 60 PBVs Proposed Funding Sources Status
Awarded with TEBs
Awarded in 2022
TBD
N/A
N/A
Allocation
Entity
Competitive Process
Estimated Amount
N/A
Awarded with TEBs
Density Bonus Restrictions Phase I Phase II Total Project Very-Low Income Units 12 12 24
Total City Restricted Units 12 12 24
As % of Total Units 10% 10% 10%
LMIHAF Income Targeting Phase I Phase II Total Project
<30% AMI Units (ELI) 36 36 72
>30% & <60% AMI Units (59%) 61 60 121
60% to 80% AMI Units (Low) 23 23 46
Total City Restricted Units 120 119 239
% ELI 30% 30% 30%
% 59% AMI 51% 50% 51%
% Low 19% 19% 19%

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2403007:PD;JLR
17166.015.001
Jessica Gonzales, City of Palm Desert March 27, 2024
Palm Villas at Millennium – Financial Gap Analysis (Revised) Page 4

BACKGROUND STATEMENT
The following summarizes the three version of the DDLA:

The KMA financial gap analysis for the Phase I and II Projects is located at the end of this memorandum, in Appendices A and B, respectively. Each appendix is organized as follows:

October 2022 - DDLA
Approved
• City to sell Site to
Developer at Fair
Market Value, in two
phases.
• Authority to loan
Developer $6,755,000
from LMIHAF money
in two residual
receipts loans.
• Developer to
construct 241 untis in
two phases.

June 2023 - DDLA
Amended & Restated
• Extended completion
date to June 30, 2028.
• Modified Project to be
completed in one
phase.
• Modified affordability
restrictions for Project
to be competitive for
MHP funds.
• Decreased Authority
Loan to $3,330,000.
• City agreed to
carryback land
purchase price.
• Land purchase price to
be set at conveyance
of Site based on Fair
Market Value,
estimated at
$3,425,000.

April 2024 - DDLA
Amended & Restated
(Proposed)
• Modify Project back to
a two-phased
development.
• City to sell Site to
Developer in two
phases at a total
purchase price of
$3,425,000.
• Authority Loan to
revert to $6,755,000
from the LMIHAF.
• Affordability
restrictions to remain
unchanged other than
split between two
projects.
• City will receive
payment for land
when each parcel is
conveyed to the
Developer.

Table 1 Estimated Total Development Costs
Table 2A Affordability Mix
Table 2B Stabilized Net Operating Income
Table 3 Financial Gap Analysis
Table 4 Cash Flow Analysis

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Palm Villas at Millennium – Financial Gap Analysis (Revised) Page 5

REVISED PROJECT DESCRIPTION
While the description of the entire Project has not changed from the entitlements approved in June 2023, the Project will be split into two phases as follows:

1. The 10.49 acre Site will be divided into two parcels as follows:

2. The 241 unit Project will be divided into two Projects as follows:

3. The gross building area (“GBA”) for the Project remains at 248,171 square feet, which will be divided into the two phases as follows:

4. Due to the approved Density Bonus Agreement, the parking ratio for the Project averages

1.45, and the surface spaces will be divided into the two phases as follows:

Project Site Phase I Phase II Total Project
Land Area (Sf Land) 262,231 194,713 456,944
Acres 6.02 4.47 10.49
Unit Mix
Number of
Units
Unit Size
(Sf)
Number of
Units
Unit Size
(Sf)
Number of
Units
Unit Size
(Sf)
1-Bedroom Units 15 604 15 604 30 604
2-Bedroom Units 75 771 75 771 150 771
3-Bedroom Units 31 1,009 30 1,003 61 1,006
Totals/Averages 121 811 120 808 241 810
Density (Units/Acre) 20.1 26.8 23.0
Phase I Phase II Total Project
Gross Building Area Phase I Phase II Total Project
Gross Living Area 98,188 97,005 195,193
Leasing Office / Service Areas 3,781 0 3,781
Common Area / Circlation 24,325 24,872 49,197
Total Units 126,294 121,877 248,171
FAR 0.5 0.6 0.5
Surface Parking Spaces Phase I Phase II Total Project
Total Parking Spaces 177 173 350
Parking Ratio (Space/Du) 1.46 1.44 1.45

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Jessica Gonzales, City of Palm Desert March 27, 2024
Palm Villas at Millennium – Financial Gap Analysis (Revised) Page 6

5. The following provides the amenities that will be provided in two phases. It should be noted that there will be a reciprocal easement that will allow each phase to use the other phase’s amenities.

6. All but the manager’s units will be restricted to households earning up to 60% AMI for 55 years from COO, as follows:
a. City Density Bonus Requirements
b. Authority Affordability Requirements
Phase I
Leasing Office
Community Room
Tot Lot
Laundry Facilities
Swimming Pool
Shade Structures
Phase II
Project Amenities
BBQ Area
Laundry Facilities
Shade Structures
City Density Bonus Restrictions
Phase I -
VLI
Phase II -
VLI
Total Project -
VLI
1-Beddroom Units 2 2 4
2-Bedroom Units 7 7 14
3-Bedroom Units 3 3 6
Total Restricted Units 12 12 24
As % of Total Units 10% 10% 10%
Authority Loan Restrictions - Phase I ELI 59% AMI Low Totals 1-Beddroom Units 6 9 0 15
2-Bedroom Units 27 48 0 75
3-Bedroom Units 3 4 23 30
Total Restricted Units 36 61 23 120
As % of Total Units 30% 51% 19% 100%

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Jessica Gonzales, City of Palm Desert March 27, 2024
Palm Villas at Millennium – Financial Gap Analysis (Revised) Page 7

7. Based on the affordability restrictions to be imposed on the Project, the City will be able to claim Regional Housing Needs Assessment (“RHNA”) credit as follows:

REVISED PROJECT TIMELINE
Given that the Project will be financed as two phases, the Project timeline was modified to be as follows:

Authority Loan Restrictions - Phase II ELI 59% AMI Low Totals 1-Beddroom Units 6 9 0 15
2-Bedroom Units 27 47 0 74
3-Bedroom Units 3 4 23 30
Total Restricted Units 36 60 23 119
As % of Total Units 30% 50% 19% 100%
RHNA Credit Phase I Phase II Total Project
Extremely-Low Income Units 60 60 120
Very-Low Income Units 0 0 0
Low Income Units 60 59 119
Moderate Income Units 0 0 0
Unrestricted Units 1 1 2
Total RHNA Credit 121 120 241
As % of Total Units 100% 100% 100%
Projected Timeline Phase I Phase II
SLA Exemption Approved by HCD
Entitlements Secured / DDA Executed
County PBVs (45) & Loan Awarded
1st DDA Amendment
County PBVs (75) Awarded
2nd DDA Amendment
CDLAC/TCAC Applications Submission April 2024 April 2025 CDLAC/TCAC Allocation Award June 2024 June 2025
All Funding Secured November 2024 November 2025
Land Conveyance / Construction Loan Closing January 2025 January 2026 Construction Commences May 2025 May 2026
Construction Completion / COO Issued May 2027 May 2028
Permanent Loan Closing June 2027 June 2028
April 2024
September 22, 2022
October 13, 2022
January 2023
June 2023
December 2023

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2403007:PD;JLR
17166.015.001
Jessica Gonzales, City of Palm Desert March 27, 2024
Palm Villas at Millennium – Financial Gap Analysis (Revised) Page 8 It should be noted that if Phase I does not receive a CDLAC allocation in the April 2024 round, and the Phase I Project has not secured the missing funding by December 2024, the City will be able to terminate the Amended and Restated DDLA.

REVISED FINANCIAL GAP ANLAYSIS (APPENDICES A & B)
KMA found the Developer’s development cost estimates and projections of funding sources to be reasonable given the current high cost and interest rate environment. It should be noted that the development costs include State and Federal prevailing wage premiums due to the funding source requirements. Also, all of the offsite improvements will be completed during Phase I.

The detailed analysis is provided in Appendices A and B, and are summarized as follows:

REVISED SB 341 ANALYSIS
The following summarizes how the proposed Project, which will be committing $6,755,000 of LMIHAF money in fiscal year 2023/2024, will meet the affordability requirements of SB 341 in the Project.

REVISED CASH FLOW ANALYSIS (APPENDICES A & B – TABLE 4) The following summarizes the estimated Authority Loan repayments based on the cash flow projections:

Financial Gap Calculation Phase I Phase II Total Project Total Development Costs $82,158,000 $71,679,000 $153,837,000 (Less) Potential Outside Funding Sources (80,192,000) (66,890,000) (147,082,000) Financial Gap $1,966,000 $4,789,000 $6,755,000
Per Unit $16,200 $39,900 $28,000
Income Targeting Analysis
ELI
Households
VLI / 59% AMI
Households
Low Income
Households
Total LMIHAF
Units
Units Assisted/Restricted 72 121 46 239
LMIHAF Loans $2,034,979 $3,419,895 $1,300,126 $6,755,000 As a % of Total Loan Amount 30% 51% 19% 100%
Requirements (as a % of Total Funds) At Least 30% At Most 20%

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2403007:PD;JLR
17166.015.001
Jessica Gonzales, City of Palm Desert March 27, 2024
Palm Villas at Millennium – Financial Gap Analysis (Revised) Page 9 In both phases, the Authority Loans are projected to be repaid before the end of the 55 year term. It should be noted that per the cash flow analyses, the deferred developer fee is not paid off by year 15. However, if this is still the case once the phases are completed, the Developer will be able to contribute enough of the deferred developer fee so that the deferred amount will be repaid within 15 years per the IRS requirements.

CONCLUSIONS
Based on the KMA analysis of the Developer’s proposal, the $6,755,000 proposed financial assistance that was approved in 2022 is still required for the revised Project. However, KMA recommends that the City review the estimated costs again once the funding sources have been committed.

Attachments
Projected Authority Loan Payments Phase I Phase II
End of Term P&I Due &
Payable
P&I Due &
Payable
Loan Amount $1,966,000 $4,789,000
Ending Loan Balance in Year 55 $0 $0
Estimated Share of Residual Receipts 11.34% 50.00%
Projected Year Loan to Be Paid Off Year 53 Year 41
Nominal Amount of Payments $4,797,000 $9,883,000
Present Value of Payments $539,000 $1,850,000

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APPENDIX A

PHASE I FINANCIAL GAP ANALYSIS

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APPENDIX A - TABLE 1
ESTIMATED DEVELOPMENT COSTS 1

PALM VILLAS AT MILLENNIUM - PHASE I

Based on City appraisal from June 2022.

Project will be required to pay both Federal and State prevailing wages.

Includes solar, swimming pool and parking space shade covers.

Maximum developer fee allowed by TCAC.

Assumes a 24-month development period and a 65% average outstanding balance.

All offsite improvements required will be constructed in Phase I.

Does not include SCE and TUMF fees, which will be waived or refunded.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024

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APPENDIX A - TABLE 2A

AFFORDABILITY MIX

PALM VILLAS AT MILLENNIUM - PHASE I

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; AFF - Ph 1; jlr; 3/26/2024

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APPENDIX A - TABLE 2B

STABILIZED NET OPERATING INCOME

PALM VILLAS AT MILLENNIUM - PHASE I

Prepared by: Keyser Marston Associates, Inc. Based on Developer estimates, which KMA determined to be reasonable based on experience.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024

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APPENDIX A - TABLE 3
FINANCIAL GAP ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

PALM DESERT, CALIFORNIA
I. Available Funding Sources
A. Permanent Loan 1.20 DCR $1,098,462 Debt Svc $13,910,000

Previously awarded by County for entire Project; however, County has verified willingness to allow the entire amount to be used in Phase I only.

Per TCAC draft guidelines, a portion of the deferred fee may be requried to be contributed to the Project. Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 1; jlr; 3/26/2024

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APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan. Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 541 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 542 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 543 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 544 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 545 of 855 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE I

The County will receive 38.65% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 1; jlr; 3/26/2024 Page 546 of 855

APPENDIX B

PHASE II FINANCIAL GAP ANALYSIS

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APPENDIX B - TABLE 1
ESTIMATED DEVELOPMENT COSTS 1

PALM VILLAS AT MILLENNIUM - PHASE II

Based on City appraisal from June 2022.

Project will be required to pay both Federal and State prevailing wages.

Includes solar, swimming pool and parking space shade covers.

Maximum developer fee allowed by TCAC.

Assumes a 24-month development period and a 72% average outstanding balance.

All offsite improvements required will be constructed in Phase I.

Does not include SCE and TUMF fees, which will be waived or refunded.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024

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APPENDIX B - TABLE 2A

AFFORDABILITY MIX

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
Number Applicable Utility Applicable
of Units TCAC Rent HCD Rent DB Rent Gross Rent Allowance Net Rent 30% TCAC, ELI HCD, VLI DB 12 30% AMI ELI HCD VLI HCD
1-Bdrm Units 2 $524 $567 $945 $524 $29 $495
2-Bdrm Units 7 $629 $638 $1,063 $629 $24 $605
3-Bdrm Units 3 $727 $709 $1,181 $709 $20 $689
30% TCAC, ELI HCD 24 30% AMI ELI HCD N/A
1-Bdrm Units 4 $524 $567 N/A $524 $29 $495
2-Bdrm Units 20 $629 $638 N/A $629 $24 $605
3-Bdrm Units 0 $727 $709 N/A $709 $20 $689
30% TCAC, 59% HCD 14 30% AMI 59% Low N/A
1-Bdrm Units 9 $524 $1,115 N/A $524 $29 $495
2-Bdrm Units 1 $629 $1,254 N/A $629 $24 $605
3-Bdrm Units 4 $727 $1,394 N/A $727 $20 $707
30% TCAC, Low HCD 10 30% AMI Low N/A
1-Bdrm Units 0 $524 $1,134 N/A $524 $29 $495
2-Bdrm Units 0 $629 $1,276 N/A $629 $24 $605
3-Bdrm Units 10 $727 $1,418 N/A $727 $20 $707
60% TCAC, 59% HCD 46 60% AMI 59% Low N/A
1-Bdrm Units 0 $1,049 $1,115 N/A $1,049 $29 $1,020
2-Bdrm Units 46 $1,258 $1,254 N/A $1,254 $24 $1,230
3-Bdrm Units 0 $1,454 $1,394 N/A $1,394 $20 $1,374
60% TCAC, Low HCD 13 60% AMI Low N/A
1-Bdrm Units 0 $1,049 $1,134 N/A $1,049 $29 $1,020
2-Bdrm Units 0 $1,258 $1,276 N/A $1,258 $24 $1,234
3-Bdrm Units 13 $1,454 $1,418 N/A $1,418 $20 $1,398
Manager Unit 1
1-Bdrm Units 0
2-Bdrm Units 1
3-Bdrm Units 0
PBV Overhang 60 FMR Tenant Rent Overhang
Utility
Allowance
Net
Overhang
1-Bdrm Units 15 $1,772 $495 $1,277 $29 $1,248
2-Bdrm Units 28 $2,211 $605 $1,606 $24 $1,582
3-Bdrm Units 3 $2,977 $689 $2,288 $20 $2,268
3-Bdrm Units 14 $2,977 $707 $2,270 $20 $2,250
Note: Rents are based on 2023 rents and the utility allowances are based on Developer CAUC estimates on 3/12/24 for all electric building.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; AFF - Ph 2; jlr; 3/26/2024

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APPENDIX B - TABLE 2B

STABILIZED NET OPERATING INCOME

PALM VILLAS AT MILLENNIUM - PHASE II

Based on Developer estimates, which KMA determined to be reasonable based on experience.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024

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APPENDIX B - TABLE 3

FINANCIAL GAP ANALYSIS

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Available Funding Sources
A. Permanent Loan 1.20 DCR $1,108,122 Debt Svc $14,032,000

Per TCAC draft guidelines, a portion of the deferred fee may be requried to be contributed to the Project.

Based on Developer estimates, which KMA determined to be reasonable based on experience.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; PF - Ph 2; jlr; 3/26/2024

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APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

The County will receive 0.00% of the residual receives based on the size of the County loan.

Prepared by: Keyser Marston Associates, Inc.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 552 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 553 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 554 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 555 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 556 of 855 APPENDIX B - TABLE 4
CASH FLOW ANALYSIS 1

PALM VILLAS AT MILLENNIUM - PHASE II

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 102.5% /Year
Projected Gross Income - PBV Subsidy 102.5% /Year
Miscellaneous Income 102.5% /Year
Projected Gross Income
(Less) Vacancy & Collection Allowance 5% of PGI
Effective Gross Income
II. Operating Expenses
General Operating Expenses 103.5% /Year
Property Taxes & Assessments 102.0% /Year
Social Services 103.5% /Year
County Monitoring Fee 103.5% /Year
City Monitoring Fee 103.0% /Year
Bond Issuer Fee 103.5% /Year
Replacement Reserves 103.5% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) AGP Asset Management Fee 2 103.0% /Year
(Less) MGP Asset Management Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $6,222,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest 3.00%
(Less) Payments 4 50.00%
Ending Balance
1 2
3 4
Based on Table 2B and typical escalations for affordable housing LP fee is provided for in development costs as a capitalized fee.

The County will receive 0.00% of the residual receives based on the size of the County loan.

Filename: Palm Villas Phases 1 and 2 - 03.26.24 - FINAL; CF - Ph 2; jlr; 3/26/2024 Page 557 of 855

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Palm Desert City CouncilApril 11, 2024

Palm Desert City Council
April 11, 2024