Agenda packet — Palm Desert City Council, June 13, 2024 (part 7 of 7)

EXHIBIT “A”

LEGAL DESCRIPTION

VEHICULAR ACCESS EASEMENT
That certain parcel of land in the City of Palm Desert, County of Riverside, State of California, being that portion of a Grant Deed Recorded June 24, 2011 as Doc. #2011- 0279122 of Official Record of said County of Riverside, more particularly described as follows:

COMMENCING at the northwest corner of said Grant Deed, being the West 1/16th corner of Section 8, Township 5 South, Range 6 East, San Bernardino Meridian; (1) Thence along the westerly line of said Grant Deed South 00°10’27” West a distance of 124.00 feet;
(2) Thence leaving said westerly line South 89°49’33” East a distance of 33.88 feet to a point on the easterly right-of-way line of that certain Grant of Easement recorded June 23, 2023 as Doc. #2003-0462172 of Official Records of said County of Riverside, said point being the POINT OF BEGINNING; (3) Thence continuing South 89°49’33” East a distance of 32.81 feet; (4) Thence South 00°13’15” East a distance of 110.21 feet to the beginning of a non-tangent curve, concave westerly, having a radius of 38.00 feet, a radial line of said curve bears North 32°27’11” East to said point; (5) Thence southerly along said curve through a central angle of 114°39’08” an arc distance of 76.04 feet;
(6) Thence non-tangent from said curve South 00°13’15” East a distance of 642.48 feet to the beginning of a tangent curve, concave northeasterly, having a radius of 25.00 feet;
(7) Thence southeasterly along said curve through a central angle of 90°05’41” an arc distance of 39.31 feet to a line parallel with and 32.00 feet northerly, measured at right angles, from the southerly line of said Grant Deed; (8) Thence tangent from said curve along said parallel line North 89°41’04” East a distance of 149.69 feet to the easterly line of said Grant Deed; (9) Thence along said easterly line South 00°10’27” West a distance of 32.00 feet to the southeast corner of said Grant Deed;
(10) Thence along the southerly line of said Grant Deed South 89°41’04” West a distance of 247.19 feet to the southwest corner of said Grant Deed; 1195

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(11) Thence along the westerly line of said Grant Deed North 00°10’27” East a distance of 32.00 feet to a line parallel with and 32.00 feet northerly, measured at right angles, from the southerly line of said Grant Deed; (12) Thence along said parallel line North 89°41’04” East a distance of 42.47 feet; (13) Thence North 00°13’15” West a distance of 662.76 feet to the beginning of a non-tangent curve, concave easterly, having a radius of 38.00 feet, a radial line of said curve bears South 14°14’02” West to said point; (14) Thence northerly along said curve through a central angle of 151°05’25” an arc distance of 100.21 feet;
(15) Thence non-tangent from said curve North 00°13’15” West a distance of 60.87 feet;
(16) Thence North 89°49’34” West a distance of 5.72 feet to the aforementioned easterly right-of-way line of that certain Grant of Easement recorded June 23, 2003 as Doc. #2003-0462172, said point being on a non-tangent curve, concave westerly, having a radius of 187.50 feet, a radial line of said curve bears South 80°16’19” East to said point;
(17) Thence northerly along said curve and along said right-of-way line through a central angle of 09°33’15” an arc distance of 31.27 feet; (18) Thence tangent from said curve along said easterly right-of-way line North 00°10’26” East a distance of 13.62 feet to the POINT OF BEGINNING.

CONTAINING 35,803 Square Feet, more or less.

GRAPHICALLY DEPICTED ON EXHIBIT “B” – PLAT, ATTACHED
HERETO AND BY THIS REFERENCE MADE A PART HEREOF.

This exhibit and accompanying plat were
prepared by me or under my direction:
_________________________________________
Benjamin Daniel Egan, PE, PLS
Licensed Land Surveyor #8756
Prepared: June 4, 2024
1196

C/L COUNTRY CLUB

SAGEWOOD DRIVE

55.00'

GRANT DEED
REC. 6/24/2011
DOC. #2011-0279122 PROPOSED VEHICULAR ACCESS EASEMENT

EASEMENT FOR PUBLIC ROAD
PURPOSES REC. 6/23/2003
AS DOC. #2003-0461172, O.R. 32.00'
1 2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 P.O.C.

W 1/16TH COR.

SEC. 8
P.O.B.

30.00'
N32°27'11"E (R)
S32°53'41"E (R)

DATA TABLE

NO BEARING/DELTA LENGTH RADIUS
1 S00°10'27"W 124.00' --
2 S89°49'33"E 33.88' --
3 S89°49'34"E 32.81' --
4 S00°13'15"E 110.21' --
5 Δ=114°39'08" 76.04' 38.00'
6 S00°13'15"E 642.48' --
7 Δ=90°05'41" 39.31' 25.00'
8 N89°41'04"E 149.69' --
9 S00°10'27"W 32.00' --
10 S89°41'04"W 247.19' --
11 N00°10'27"E 32.00' --
12 N89°41'04"E 42.47' --
13 N00°13'15"W 662.76' --
14 Δ=151°05'25" 100.21' 38.00'
15 N00°13'15"W 60.87' --
16 N89°49'34"W 5.72' --
17 Δ=09°33'15" 31.27' 187.50'
18 N00°10'26"E 13.62' --
S14°14'02"W (R)
N14°40'33"W (R)
S80°16'19"E (R)
0 SCALE: 1"=120'
120 60 120
SCALE: 1"=120'
EXHIBIT "B" - PLAT SHEET 1 OF 1

VEHICULAR ACCESS

EASEMENT
35,803± S.F.

VEHICULAR ACCESS EASEMENT
NO. 8756
BE

NJA MIN DA NIEL EGA N
P R
O

F E S S IO NA L L A ND S UR V E Y
O
R

S T A T E O F C A L I F O R NI A
_____________________________

BENJAMIN DANIEL EGAN, PE, PLS
LICENSED LAND SURVEYOR #8756
PREPARED 6/4/2024
1197

Page 1 of 1 ends

EXHIBIT “A”

LEGAL DESCRIPTION

PEDESTRIAN ACCESS EASEMENT

THAT CERTAIN PARCEL OF LAND IN THE CITY OF PALM DESERT, COUNTY OF

RIVERSIDE, STATE OF CALIFORNIA BEING THAT PORTION OF A GRANT DEED RECORDED JUNE 24, 2011, AS DOC. #2011-0279122 OF OFFICIAL RECORDS OF SAID COUNTY OF RIVERSIDE, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

THE WESTERLY 12.00 FEET OF THE ABOVE-DESCRIBED PARCEL OF LAND.

EXCEPTING THEREFROM THE NORTHERLY 55.00 FEET LYING WITHIN THE RIGHT-OF-WAY OF COUNTRY CLUB DRIVE.

ALSO EXCEPTING THEREFROM ANY PORTION LYING WITHIN THAT CERTAIN GRANT OF EASEMENT RECORDED JUNE 23, 2003, AS DOC. #2003-0462172 OF OFFICIAL RECORDS OF SAID COUNTY OF RIVERSIDE.

CONTAINING 9,951 SQUARE FEET, MORE OR LESS.

GRAPHICALLY DEPICTED ON EXHIBIT “B” – PLAT, ATTACHED
HERETO AND BY THIS REFERENCE MADE A PART HEREOF.

THIS EXHIBIT AND ACCOMPANYING PLAT WERE
PREPARED BY ME OR UNDER MY DIRECTION:
_________________________________________

BENJAMIN DANIEL EGAN, PE, PLS
LICENSED LAND SURVEYOR #8756
PREPARED: JUNE 4, 2024
1198

C/L COUNTRY CLUB SAGEWOOD DRIVE

55.00'

12.00'
GRANT DEED REC. 6/24/2011 DOC. #2011-0279122

12.00'PROPOSED 12.00' WIDE PEDESTRIAN ACCESS EASEMENT

EASEMENT FOR PUBLIC ROAD
PURPOSES REC. 6/23/2003
AS DOC. #2003-0461172, O.R.
0 SCALE: 1"=120'
120 60 120 SCALE: 1"=120'
EXHIBIT "B" - PLAT SHEET 1 OF 1

PEDESTRIAN ACCESS

EASEMENT
9,151± S.F.

PEDESTRIAN ACCESS EASEMENT
NO. 8756
BE

NJA MIN DA NIEL EGA N
P R
O

F E S S IO NA L L A ND S UR V E Y
O
R

S T A T E O F C A L I F O R NI A
_____________________________

BENJAMIN DANIEL EGAN, PE, PLS
LICENSED LAND SURVEYOR #8756
PREPARED 6/4/2024
1199
1200
RESOLUTION NO. -_____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

PALM DESERT MAKING FINDINGS PURSUANT TO THE

HEALTH AND SAFETY CODE SECTION IN CONNECTION

WITH A PROPOSED DISPOSITION, DEVELOPMENT AND

LOAN AGREEMENT BETWEEN THE PALM DESERT

HOUSING AUTHORITY AND CHELSEA INVESTMENTS,
INC., (OR ITS DESIGNEE)
RECITALS:

A. Pursuant to Health and Safety Code Section 34175(b) and the California Supreme Court’s decision in California Redevelopment Association, et al. v. Ana Matosantos, et al. (53 Cal. 4th 231 (2011), on February 1, 2012, all assets, properties, contracts, leases, books and records, buildings, and equipment of the former Palm Desert Redevelopment Agency (“Former Agency”) transferred to the control of the Successor Agency to the Former Agency (the “Successor Agency”).

B. By its Resolution No. 2012-07 the City Council of the City of Palm Desert elected that all assets, rights, powers, liabilities, duties, and obligations associated with housing activities of the Former Agency be transferred from the Successor Agency to the Palm Desert Housing Authority (the “Authority”).

C. By its Resolution No. HA-47, the Authority accepted the housing functions and assets of the Former Agency.

D. The Authority owns an approximately 1.84 acre lot located off Country Club Drive in the City of Palm Desert, California described as APN No. 622-370-014 (the “Property”). The Authority proposes to convey the Property to Chelsea Investments, Inc. (or its designee) (“Chelsea”) for the purpose of Chelsea constructing forty (40) units of housing, thirty-nine (39) of which will be made available for rental to qualified households of low-income, very-low income and extremely low-income, (10) of which shall be designated for use by individuals with developmental disabilities and one (1) of which shall be used for on-site management pursuant to a Disposition and Development and Loan Agreement between the Authority and Chelsea (the “Agreement”).

E. Following notice duly given, the Authority has held a full and fair public hearing on the conveyance by the Authority of the Property to Chelsea pursuant to Health and Safety Code Section 33433. The Authority has made available to the public through the offices of the Authority Secretary and City Clerk a copy of the Agreement, and a Summary Report (the “Report”) describing, among other matters, the cost of the Agreement to the Authority, prior to the public hearing as required by Health and Safety Code Section 33433.

F. Health and Safety Code Section 33433(a) and (b) generally provide that before any property of the Former Agency, acquired in whole or in part, directly or indirectly, with tax increment moneys is sold for development pursuant to the redevelopment plan, the sale must first be approved by the legislative body by resolution after a public hearing and the resolution must contain certain findings. Pursuant to its Resolution No. 2013-11, the City Council authorized the Authority, as housing successor 1201
Resolution No. City Council _______
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to the Former Agency, to convey property for the development of housing projects pursuant to Health and Safety Code Section 33433.

THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS:

Section 1. On the basis of the Report and other information, the City Council hereby finds and determines (i) that the consideration received by the Authority pursuant to the Agreement for the conveyance of the Property is not less than the fair reuse value of the Property at the use and with the covenants and conditions and development costs authorized by the conveyance of the Property as described in the Agreement, and (ii) that the conveyance of the Property pursuant to the Agreement will provide housing for lowincome persons consistent with the implementation plan adopted by the Former Agency pursuant to California Health and Safety Code Section 33490. The City Council further finds that use of moneys in the Authority’s Low and Moderate Income Housing Asset Fund in accordance with the Agreement is of benefit to the project areas of the Former Agency.

Section 2. The officers of the City are hereby authorized and directed, jointly and severally, to do all things which they may deem necessary or proper in order to effectuate the purposes of this Resolution and the transactions contemplated hereby; and any such actions previously taken by such officers are hereby ratified, confirmed and approved.

PASSED, APPROVED and ADOPTED ON THIS __ day of April 2024, by the following vote, to wit:

AYES:

NOES:

ABSENT:

Karina Quintanilla, Mayor
ATTEST:

ANTHONY J. MEJIA, CITY CLERK
1202
777 SOUTH FIGUEROA STREET, SUITE 2555  LOS ANGELES, CALIFORNIA 90017  PHONE 213.622.8095 2405011:PD;JLR
WWW.KEYSERMARSTON.COM 17166.018.001
ADVISORS IN:

Real Estate
Affordable Housing
Economic Development

BERKELEY
A. Jerry Keyser
Timothy C. Kelly
Debbie M. Kern
David Doezema

LOS ANGELES
Kathleen H. Head
James A. Rabe
Gregory D. Soo-Hoo
Kevin E. Engstrom
Julie L. Romey
Tim R. Bretz

SAN DIEGO
Paul C. Marra
Linnie A. Gavino

MEMORANDUM
To: Jessica Gonzales, Housing Manager
Palm Desert Housing Authority
From: Julie Romey
Date: May 29, 2024
Subject: Arc Village Apartments – Fair Reuse Value Analysis At the request of the Housing Authority (“Authority”) of the City of Palm Desert (“City”), Keyser Marston Associates, Inc. (“KMA”) prepared a pro forma analysis to identify the fair reuse value of the proposed 40 unit affordable housing apartment project (“Project”) located at 255 Country Club Drive (“Site”) as proposed by Chelsea Investment Corporation (“Developer”). The Site is owned by the Authority, acting as the Housing Successor (collectively referred to as “Authority”).

Pursuant to the Disposition, Development and Loan Agreement (“Agreement”) to be approved by the City in June 2024, the Site will be conveyed to the Developer. The former California Redevelopment Law allowed redevelopment agencies to establish a land value for specific development based on the required use and the unique conditions and requirements imposed by a disposition and development agreement. By definition, the reuse value estimate is valid only if the scope of development, quality standards, development timing and other requirements set-forth in the agreement are met. The following reuse valuation analysis is based on the terms and restrictions detailed in the proposed Agreement between the Authority and the Developer.

Conceptually, the fair ruse value is equal to the difference between the estimated project costs, including a reasonable developer profit, and the amount of outside investment that can be supported by the Project’s economic characteristics. To that end, KMA reviewed 1203
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the Developer’s pro forma dated May 22, 2024, and prepared a pro forma analysis to determine the fair reuse value of the Site.

The following analysis reviews the proposed Project and financial assistance requested by the Developer to determine whether the requested financial assistance is warranted as well as whether the transaction meets the reuse requirements under Section 33433 of the California Health and Safety Code (“Section 33433”).

EXECUTIVE SUMMARY
The Developer proposes to construct 40 apartment units in a two-story building located on the 1.84-acre Site consisting of one-, two-, and three-bedroom units that will be restricted to extremely-low, very-low, and low income households for 55 years. One unit will be set aside for an onsite manager. The former Palm Desert Redevelopment Agency (“Former Agency”) purchased the Site in 2011 with low and moderate income housing set-aside funds. The Site has since been transferred to the Authority.

KMA estimates the total development costs to be $22,204,000 and it is currently anticipated that the Developer will receive funding for the Project costs from the following sources:

The KMA analysis concludes that the financial gap for the proposed Project is $3,000,000.

Therefore, the Project needs approximately $3,000,000 in financial assistance in addition to a land donation. According to the Agreement, the Authority will be donating the Site to the Developer at no cost as well as providing up to $3,000,000 loan in financial assistance from Low and Moderate Income Housing Asset Fund (“LMIHAF”). Assuming Construction Loan TBD $13,516,000
Permanent Loan TBD $3,332,000
9% Federal Tax Credits TCAC $13,636,000
Solar Tax Credits TCAC $123,000
IRC Loan IRC $1,500,000
Authority Loan Authority $3,000,000
Authority Land Donation Authority $1,600,000
Deferred Developer Fee Developer $613,000
Project Based Vouchers County 8 PBVs
Estimated
Amount
Awarded
Proposed Funding Sources Status
TBD
Awarded
TBD
TBD
N/A
Allocation
Entity
N/A
N/A
TBD
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that the Authority will provide a $3,000,000 residual receipts loan to the Project, KMA concludes that the Fair Reuse Value of the Site is $0.

BACKGROUND STATEMENT
The property was acquired by the Former Agency on July 15, 2011, for $1,000,000, which was the fair market value at the highest and best use at that time, with Housing Set-Aside funds. In 2012, when the Former Agency was disbanded, the housing assets were transferred to the Authority. On April 25, 2023, the Housing and Community Development department of the State of California (“HCD”) verified that if the Authority owned property is transferred at no cost, the transfer is not considered a disposition of surplus land under Section 102(h) of the Surplus Land Act Guidelines. Therefore, the property is not subject to the Surplus Land Act. HCD has confirmed that this ruling remains unchanged under the new Surplus Land Act Guidelines.

The City approached the Developer about developing the Project on this Site based on their experience in developing affordable housing for individuals with developmental and/or intellectual disabilities in Coachella.

The Developer and adjacent property owner are negotiating the ingress / egress easement as the Site is land locked and approximately 800 feet south of the entrance.

This location requires significant extensions of utilities to the building. In addition, the Site must be brought up a few feet since the Site has been a drainage basin. This also means an underground detention must be installed to manage the water.

The following analysis is supported with the following pro forma analysis, which is located at the end of this analysis.

PROJECT DESCRIPTION
The proposed scope of development can be described as follows:

Table 1 Estimated Total Development Costs
Table 2A Affordability Mix
Table 2B Stabilized Net Operating Income
Table 3 Reuse / (Financial Gap) Analysis
Table 4 Cash Flow Analysis
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1. The Site is comprised of 80,150 square feet of land area and is zoned P (Public Facilities / Institutional). However, multifamily development is allowed with a Conditional Use Permit. The City’s Planning Commission approved the entitlements on May 21, 2024.

2. The Site is currently vacant with no environmental remediation expected to be required. However, the Developer is required to bring the Site up a few feet since the Site was previously a drainage basin. It should be noted that the Site has no visibility or direct access from Country Club Drive. The Developer and the adjacent property owner, Desert Arc, have agreed to an easement to provide access.

3. The Project will include 40 rental housing units, in one two-story building with the following unit mix:

4. The gross building area (“GBA”) for the Type V building is 37,180 square feet and includes the following:

5. A total of 49 surface parking spaces will be provided, which equates to a 1.23 spaces per unit parking ratio. A total of 40 parking spaces will be covered.

6. The Project amenities include the following:

Unit Mix
Number of
Units
Unit Size
(Sf)
1-Bedroom Units 20 585
2-Bedroom Units 10 786
3-Bedroom Units 10 1,027
Totals/Averages 40 746
Density (Units/Acre) 21.7
Gross Living Area 29,830
Leasing Office / Service Areas 2,500
Common Area / Circlation 4,850
Total Gross Building Area (Sf) 37,180
FAR 0.5
Gross Building Area
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7. The targeted population will be extremely-low, very-low, and low income families, as well as seniors. In addition, 10 units will be designated for use by individuals with developmental and/or intellectual disabilities and/or Desert Arc participants.

One two-bedroom unit will be set-aside for the onsite manager.

8. The affordability restrictions for the Authority regulatory agreement are as follows.

9. The City can count the following units for Regional Housing Needs Assessment (“RHNA”) purposes, as follows:

10. The Project will be managed by a professional third-party firm, most likely ConAm Management Corporation.

11. Onsite tenant services are proposed to be provided by Desert Arc, a third-party service provider. Desert Arc is a nonprofit dedicated to providing services and Project Amenities
Leasing Office
Community Room with Kitchen
Computer Stations
Laundry Facilities
Enclosed Tot-Lot with Shade
Structure and Benches
Picnic/Grill Area
Authority Affordability Restrictions ELI HCD VLI HCD 59% HCD Totals 1-Bedroom Units 2 10 8 20
2-Bedroom Units 1 5 3 9
3-Bedroom Units 1 5 4 10
Total Restricted Units 4 20 15 39
As % of Total Units 10% 51% 38% 100%
Extremely-Low Income Units 4
Very-Low Income Units 20
Low Income Units 15
Moderate Income Units 0
Unrestricted Units 1
Total RHNA Credit 40
As % of Total Units 100%
RHNA Credit
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support to individuals with developmental and/or intellectual disabilities. Desert Arc will provide comprehensive supportive social services to residents of the Project, including but limited to: Case management, life skills training, employment support, and recreational and social activities. All residents will be able to attend these classes also.

12. The following summarizes the projected timeline for the Project. It should be noted that if the Project does not receive a 9% Tax Credit allocation from TCAC by December 2025, the DDA between the City and Developer may be terminated by the City.

PROPOSED DEAL TERMS
KMA reviewed the Agreement, and a summary of the proposed deal terms are as follows:

Land Transaction
Due to the desire to create a project that is competitive in upcoming TCAC allocation rounds, the Developer has requested that the Site be donated to the Project as it increases the Project’s tie-breaker score. As such, the Authority will provide the land at no cost to the Project. The land is estimated to have a $1,600,000 fair market value at the highest and best use. The land conveyance will not occur until the Project has secured all funding sources.

SLA Exemption Approved by HCD April 25, 2023
County PBVs (8) Awarded July 10, 2023
IRC Loan Awarded January 29, 2024
Entitlements Approved by Planning Commission May 21, 2024 DDA Executed June 2024
TCAC Application Submission July 2, 2024
TCAC Allocation Award October 2024
All Funding Secured January 2025
Land Conveyance / Construction Loan Closing March 2025
Construction Commences March 2025
Construction Completion / COO Issued March 2026
Lease Up Completed June 2026
Permanent Loan Closing September 2026
Projected Timeline
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Authority Loan
The following summarizes the terms of the Authority’s Note to the Project:

1. A $3,000,000 loan from LMIHAF to fill the financial gap.

2. A 3.00% simple interest rate.

3. A 55-year term from the date of COO for the Project.

4. An annual payment of 50% of the residual receipts, which will be prorated with other soft lenders. The loan will be due and payable in full at the end of the loan term.

5. Loan will be secured with a second trust deed.

Authority Affordability Restrictions
The affordability restrictions associated with the Authority’s contribution of the land and LMIHAF assistance are as follows:

1. Four (4) extremely-low income units;

2. Twenty (20) very-low income units; and

3. Fifteen (15) low income units set at 59% of AMI.

Other Restrictions
The Authority has the ability to terminate the Agreement if the Project has not received the proposed funding sources and the land is conveyed by December 2025.

FAIR REUSE VALUE ANALYSIS
KMA reviewed the Developer’s updated pro forma submitted on May 23, 2024, to assist in evaluating the updated Project.
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Estimated Development Costs (Table 1)
KMA reviewed the Developer’s development cost estimate then prepared an independent financial gap analysis. However, KMA caveats that the City should review the cost estimates again prior to land conveyance.

DIRECT COSTS
The direct cost estimates assume that the Project will not be subject to either federal Davis Bacon or State prevailing wage requirements. The following are KMA’s direct cost estimates:

KMA’s estimate is approximately $113,000 lower than the Developer’s estimate. While KMA found the hard cost estimates to be reasonable, the contractor fee estimate is higher than allowed by TCAC. In addition, contingency allowance estimates were higher than the typical 5% of other direct costs.

It should be noted that the hard costs include the cost of construction bonds, as required by the Agreement. Also, the general contractor is anticipated to be a related party to the Developer. As such, KMA recommends that the Authority review the actual construction contract for industry competitiveness prior to conveying the land.

Offsite Improvements (Allowance) $762,000
Onsite Improvements ($/Sf Land) $24
Extraordinary Costs ($/Unit) $10,025
Residential Shell Costs ($/Sf Residential) $239
FF&E ($/Unit) $625
Contractor Fees (% of Construction Costs) 14%
Contingency Allowance (% of Other Directs) 5%
Total Direct Costs $14,376,000
Per Unit $359,400
Per Sf GBA $387
Direct Costs Estimates
Estimated Direct Costs KMA Estimate
Developer
Estimate Difference
Contractor Fees 1,678,000 1,772,000 (94,000)
Contingency Allowance 685,000 704,000 (19,000)
Total Direct Costs $2,363,000 $2,476,000 ($113,000)
Per Unit $59,100 $61,900 ($2,800)
Per Sf GBA $64 $67 ($3)
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INDIRECT COSTS
The following summarizes KMA’s indirect cost estimates:

KMA’s estimate is approximately $349,000 higher than the Developer’s estimate based on our experience with similar projects.

FINANCING COSTS
The following summarizes KMA’s financing cost assumptions and are summarized below:

Architecture, Eng. & Consulting (% Directs) 10%
Permits & Fees ($/Unit) $37,400
Taxes, Ins., Legal & Accounting (% Directs) 3%
Marketing ($/Unit) $1,625
Developer Fee $2,500,000
Contingency Allowance (% of Other Indirects) 5%
Total Indirect Costs $6,227,000
Per Unit $155,700
As a % of Direct Costs 43%
Indirect Costs
Estimated Indirect Costs KMA Estimate
Developer
Estimate Difference
Architecture, Engineering & Consulting $1,438,000 $1,236,000 $202,000 Contingency Allowance 297,000 150,000 147,000
Total Indirect Costs $1,735,000 $1,386,000 $349,000
Per Unit $43,400 $34,700 $8,700
Per Sf GBA $47 $37 $9
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The interest rate assumption by KMA matches the Developer’s estimate for the assumed $13,516,000 construction loan. However, KMA’s estimate is $16,000 higher than the Developer’s estimates as follows:

TOTAL DEVELOPMENT COSTS WITHOUT LAND ACQUISITION COSTS
The total development costs are estimated at $14,376,000, or $555,200 per unit. This cost estimate is on the higher end of the typical range for Type V construction but considered reasonable considering the extraordinary on-site improvements that are required. The following summarizes the total development costs:

Predevelopment Interest $50,000
Interest During Construction $1,160,000
Interest Rate 8.35%
Construction Loan Fees (Points) 1.00
Permanent Loan Fees (Points) 1.00
TCAC Fees $90,000
Capitalized Operating Reserves 3 Months of Debt
Service + Op
Expenses
Total Financing Costs $1,601,000
Per Unit $40,000
As a % of Direct Costs 26%
Financing Costs
Estimated Financing Costs KMA Estimate
Developer
Estimate Difference
Permanent Loan Fees $33,000 $26,000 $7,000
TCAC Fees 90,000 79,000 11,000
Operating Reserves 133,000 135,000 (2,000)
Total Financing Costs $256,000 $240,000 $16,000
Per Unit $6,400 $6,000 $400
Per Sf GBA $7 $6 $1
Direct Costs $14,376,000
Indirect Costs 6,227,000
Financing Costs 1,601,000
Total Development Costs $22,204,000
Per Unit $555,100
Per Sf GBA $597
Total Development Costs
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SUMMARY OF KMA ESTIMATES VS DEVELOPER ESTIMATES
KMA’s estimate of total development costs is $252,000 higher than the Developer’s estimate, which is a 1% differential that is considered inconsequential given the size of the Project.

Stabilized Net Operating Income (Tables 2A and Table 2B) The Project’s proposed funding sources include federal Tax Credits, an IRC loan, and a LMIHAF loan and land donation from the Authority. Each of the funding sources have income and rent requirements. Income limits are published for households that are qualified to reside in the units that have received assistance from these sources. The rent standards for the TCAC funds are typically based on rents published annually by TCAC.

The rent standards for the Authority’s LMIHAF Loan and land donation are provided in Health and Safety Code (“H&SC”) Section 50053.

The Developer will be required to adhere to the strictest of the standards imposed by the funding sources for a period of 55 years. The following summarizes the affordability restrictions as proposed:1
1 One two-bedroom unit will be set-aside as the onsite manager unit and will be an unrestricted unit.

Estimated Development Costs KMA Estimate
Developer
Estimate Difference
Direct Costs $2,363,000 $2,476,000 ($113,000)
Indirect Costs 1,735,000 1,386,000 349,000
Financing Costs 256,000 240,000 16,000
Total Development Costs $4,354,000 $4,102,000 $252,000
Per Unit $108,900 $102,600 $6,300
Per Sf GBA $117 $110 $7
Proposed Affordability Restricitons
1-Bdrm
Units
2-Bdrm
Units
3-Bdrm
Units
Total
Units
30% TCAC, ELI HCD 2 1 1 4
40% TCAC, VLI HCD 4 2 2 8
50% TCAC, VLI HCD 6 3 3 12
60% TCAC, 59% HCD 8 3 4 15
Total Restricted Units 20 9 10 39
1213
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ACHIEVABLE RENTAL INCOME (TABLE 2A)
As previously mentioned, the Project rents must adhere to the most restrictive of the requirements imposed by the funding sources and regulatory agreements. The maximum allowable rents are based on the recently updated 2024 income and rent restrictions for all funding sources and are the net of the most recent published utility allowances are estimated as follows:2
Therefore, the maximum rental income that can be generated by the restricted units is $457,704, including $20 per unit per month for laundry and miscellaneous income.

PROJECT BASED VOUCHERS (TABLE 2A)
The Developer has received an eight (8) PBV allocation from the County. The current Fair Market Rents (“FMRs”) for Eastern Riverside County are set at $1,772 for one-bedroom units, $2,211 for two-bedroom units and $2,978 for three-bedroom units, assuming a 110% increase. The Project will enter a 20-year contract to receive the difference between the amount the tenants pay, up to 30% of their actual household income, and the contract rent. The gross income generated from the PBVs is estimated at $146,170.

ESTIMATED NET OPERATING INCOME (TABLE 2B)
The Project’s effective gross income (“EGI”) is estimated at $573,680, which assumes a 5% vacancy and collection allowance, as follows:
2 The rents are net of the current Riverside County Housing Authority monthly utility allowances as follows: $82/1-bdrm units, $103/2-bdrm units, and $124/3-bdrm units (published July 1, 2023). The tenant paid utilities will be all electric (cooking, heating, basic and air conditioning).

Acheivable Rents (2024)
1-Bdrm
Units
2-Bdrm
Units
3-Bdrm
Units
30% TCAC, ELI HCD $494 $555 $607
40% TCAC, VLI HCD $687 $819 $942
50% TCAC, VLI HCD $879 $994 $1,095
60% TCAC, LOW HCD $1,071 $1,213 $1,339
1214
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The operating expenses estimated by KMA and the Developer at $258,440 based on the following assumptions:

Therefore, the stabilized net operating income (“NOI”) is estimated to total $315,240, as calculated below:

SUMMARY OF KMA ESTIMATES VS DEVELOPER ESTIMATES
The Developer’s projected gross income is approximately $18,384 higher than the KMA estimate due to not taking the Authority rent restrictions into account. KMA’s lower rent estimates also resulted in the PBV subsidy increasing by $7,709, to offset the base rent differential.

Projected Gross Income - Base Rents $448,104
Projected Gross Income - PBV Subsidy 146,170
Miscellaneous Income 9,600
Project Gross Income $603,874
(Less) Vacancy & Collection Allowance (30,194)
Effective Gross Income $573,680
Project Income
General Operating Expenses ($/Unit) $5,511
Property Management Fee ($/Unit/Mo.) $60
Property Taxes (Exemption - Allowance) $3,000
Social Services ($/Unit) $500
City Monitoring Fee ($/Unit) $125
Replacement Reserve ($/Unit) $250
Total Operating Expenses $258,440
Per Unit $6,500
Operating Expenses
Effective Gross Income $573,680
(Less) Operating Expenses (258,440)
Net Operating Income $315,240
Per Unit $7,900
Stabilized Net Operating Income
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The following illustrates the net $10,141 differential between the KMA and Developer NOI estimates.

Available Funding Sources (Table 3)
The Developer plans to apply for the competitive 9% Tax Credits in July 2024. The following summarizes the potential funding sources based on the current status of the various funding sources:

CONVENTIONAL PERMANENT LOAN
KMA determined that the Developer’s permanent loan terms assumptions are reasonable at a 1.15 debt coverage ratio, a 7.65% interest rate, and a 35 year amortization term.

However, due to the lower NOI estimate, KMA estimates the permanent loan to be $3,332,000, or $108,000 lower than the Developer’s estimate.

FEDERAL TAX CREDIT EQUITY
As previously mentioned, the 9% Tax Credits are an extremely competitive funding source. In addition, the amount of federal Tax Credits allocated to the Inland Empire region has not been able to fund more than a few projects per year. As such, in order to reach a tie-breaker score that is higher than 60%, the anticipated threshold to win an allocation in the second round of 2024, as well as ensure the amount of Tax Credits requested are available, the eligible basis needs to be deducted by approximately Project Income KMA Estimate
Developer
Estimate Difference
Projected Gross Income - Base Rents $448,104 $466,488 ($18,384) Projected Gross Income - PBV Subsidy 146,170 138,461 7,709 Miscellaneous Income 9,600 9,600 0
Project Gross Income $603,874 $614,549 ($10,675)
(Less) Vacancy & Collection Allowance (30,194) (30,728) 534 Effective Gross Income $573,680 $583,821 ($10,141)
Stabilized Net Operating Income KMA Estimate
Developer
Estimate Difference
Effective Gross Income $573,680 $583,821 ($10,141)
(Less) Operating Expenses (258,440) (258,440) 0
Stabilzied Net Operating Income $315,240 $325,381 ($10,141) Per Unit $7,900 $8,100 ($200)
Per Sf GBA $8 $9 ($0)
1216
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$8,246,000. The following summarizes the anticipated Tax Credit equity to be generated by the Project.

The Project is able to reduce the requested Tax Credits due to the requested $3,000,000 loan from the Authority.

SOLAR TAX CREDIT EQUITY
The Developer also anticipates receiving approximately $456,000 in solar Tax Credits. It is estimated that an investor will pay approximately $123,199 for the Tax Credits, or $0.27 per Tax Credit.

INLAND REGIONAL CENTER (“IRC”) LOAN
On January 29, 2024, IRC awarded the Project with a $1,500,000 loan for the IRC Community Resource Development Plan Start-Up program. These funds will assist 10 units set-aside for individuals that IRC supports, which are individuals with developmental and/or intellectual disabilities. The IRC loan terms are 3% simple interest, a 55 year term and a ___% of residual receipts annual payments.

DEFERRED / CONTRIBUTED DEVELOPER FEE
While the Developer estimates deferring $367,000 of the $2,500,000 Developer fee to be paid out of cash flow before residual receipts, KMA estimated the deferral at $613,000.

This increase is to fill the financial gap so that the financial assistance results in a $3,000,000 loan to ensure a competitive TCAC tie-breaker score.

Requested Eligible Basis $12,950,577
QCT/DDA Adjustment 130%
Applicable Fraction 100%
Tax Credit Percentage 9%
Annual Federal Tax Credits $1,515,218
Total Federal Tax Credits (10 Years) $15,152,175
% of Gross Tax Credit Taken 100%
Syndication Value $0.90
Net Tax Credit Equity (Rounded) $13,636,000
Federal Tax Credit Equity Calculation
1217
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As shown in the cash flow analysis, the payback of the $613,000 deferred fee with cash flow is anticipated to be completed within 12 years, three years before the 15 year IRS requirement.

TOTAL POTENTIAL OUTSIDE FUNDING SOURCES
Therefore, the following sources have been identified as potential funding sources for the Project:

It should be noted that while the IRC Loan and the eight PBVs have been secured by the Project, achieving a 9% Federal Tax Credit allocation is highly competitive.

SUMMARY OF KMA ESTIMATES VS DEVELOPER ESTIMATES
The following illustrates the differences in the KMA and Developer estimates of potential outside funding sources:

Deferred Developer Fee $613,000
Developer Fee Paid During Construction 1,887,000
Total Developer Fee $2,500,000
% Deferred 25%
Deferred Developer Fee
Permanent Loan $3,332,000
Federal Tax Credit Equity 13,636,000
Solar Tax Credit Equity 123,000
IRC Loan 1,500,000
Deferred Developer Fee 613,000
Total Potential Outside Funding Sources $19,204,000
Per Unit $480,100
Potential Outside Funding Sources
Potential Outside Funding Sources KMA Estimate
Developer
Estimate Difference
Permanent Loan $3,332,000 $3,440,000 ($108,000)
9% Federal Tax Credit Equity 13,636,000 13,636,000 0
Solar Tax Credit Equity 123,000 123,000 0
IRC Loan 1,500,000 1,500,000 0
Deferred Developer Fee 613,000 367,000 246,000
Total Funding Sources $19,204,000 $19,066,000 $138,000
Per Unit $480,100 $476,700 $3,500
1218
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Financial Gap Calculation (Table 3)
When the potential funding sources are compared to the estimated total development costs the financial gap is calculated as follows:

Therefore, KMA concludes that the $3,000,000 that is being requested by the Developer for the Project is warranted as well as the donated land request. It should be noted that while KMA and the Developer assumptions vary, the KMA agrees that the Project needs the land to be donated as well as $3,000,000 in financial assistance in order for the proposed Project to be feasible and competitive for 9% Tax Credits.

Fair Reuse Value of the Site
The following estimates the fair reuse value of the Site, which takes into account the restrictions and requirements in the Agreement, including the $3,000,000 Authority Loan.

As such, KMA estimates the Fair Reuse Value to be $0. Thus, it is concluded that the Project also needs free land to be feasible.

Total Development Costs $22,204,000
(Less) Potential Outside Funding Sources (19,204,000)
Financial Gap $3,000,000
Per Unit $75,000
Financial Gap Calculation
Financial Gap Calculation KMA Estimate
Developer
Estimate Difference
Total Development Costs $22,204,000 $22,066,000 $138,000 (Less) Total Potential Funding Sources (19,204,000) (19,066,000) (138,000) Financial Gap $3,000,000 $3,000,000 $0
Per Unit $75,000 $75,000 $0
Per Sf GBA $81 $81 $0
Potential Outside Funding Sources $19,204,000
Authority Loan per Agreement 3,000,000
(Less) Potential Outside Funding Sources (22,204,000)
Fair Reuse Value $0
Per Unit $0
Fair Reuse Value Calculation
1219
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Fair Market Value of the Site
In comparison, based on an appraisal for the Site dated September 26, 2023, with a June 28, 2023, date of value, by CBRE, the Site has a fair market value of $1,600,000 at the highest and best use. The decrease in value from the $1,600,000 fair market value to the $0 fair reuse value is explained by the affordability and other restrictions placed on the Project by the Agreement.

SB 341 Income Targeting (Table 3)
Section 34176.1 of the California Health and Safety Code has restricted how the LMIHAF monies are to be allocated to extremely-low and low income households over a five year period. Section 34176.1(a)(3)(B) requires that the City allocate at least 30% of the LMIHAF expended for development of rental housing affordable to and occupied by households earning 30% or less of AMI (“Extremely-Low Income”) and Section 34176.1(a)(3)(C) requires that no more than 20% of the LMIHAF expended for development of rental housing affordable to and occupied by households earning between 60% and 80% of AMI (“Low Income”). This requirement is over a five year period, not on a project by project basis.

The following summarizes the breakout of the proposed LMIHAF loan by affordability restriction:

CASH FLOW ANALYSIS (TABLE 4)
KMA also prepared a cash flow analysis to estimate the present value of the debt services payments to the Authority. The following describes the basic cash flow assumptions.

1. Year 1 is based on the pro forma rent and expense assumptions presented in the stabilized NOI analysis (Table 2B).

2. Additional revenue and expense assumptions are as follows:

Income Targeting Analysis
ELI
Households
VLI / 59% AMI
Households
Low Income
Households
Total LMIHAF
Units
Units Assisted/Restricted 4 35 0 39
LMIHAF Loans $307,692 $2,692,308 $0 $3,000,000
As a % of Total Loan Amount 10% 90% 0% 100%
Requirements (as a % of Total Funds) At Least 30% At Most 20% 1220
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a. The projected residential income and miscellaneous income are estimated to increase at 2.5% per year.
b. A 5% vacancy and collection allowance.
c. The general operating expenses, social services and replacement reserves are increased at 3.5% per year.
d. The property taxes are increased at 2.0% per year and the City monitoring fee is increased at 3% per year.

3. Annual permanent loan debt service is estimated to be $273,948 for the 35 year amortization period.

4. The priority distributions are categorized as follows:
a. The Limited Partner Asset Management Fee - $7,500 per year for 15 years, increasing at 3.0% per year.
b. Managing and Administrative General Partner Asset Management Fee – $5,000 per year each, or $10,000 combined per year for 55 years, increasing at 3.0% per year.
c. Deferred Developer Fee – the $613,000 deferred fee will be paid back with available cash flow and will not include an interest rate.

5. The annual residual receipts payments to the Authority are based on a total $3,000,000 Authority Loan with a 55-year term, 3.0% simple interest rate and annual payments in a proration of 50% of the residual receipts generated. The 50% share will be split proportionally with other soft lenders, such as IRC. The following estimates the residual receipts split between the soft lenders:

Allocation of Residual Receipts Soft Loans As % of Total % of Residual
Receipts
Authority Loan $3,000,000 66.70% 33.35%
IRC Loan $1,500,000 33.30% 16.65%
Total Soft Lenders $4,500,000 100.00% 50.00%
1221
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The deferred Developer fee is anticipated to be repaid in full within 12 years. The following summarizes the projected proceeds from cash flow to the Authority:

CONCLUSIONS
The following summarizes the KMA conclusions based on the analysis:

1. The Project has a $3,000,000 financial gap, and the requested $3,000,000 loan is warranted, assuming the City wishes to enable the Project to be competitive in the July 2024 9% Tax Credit round.

2. When the affordability requirements as well as other requirements and funding sources included in the Agreement are considered, the fair reuse value of the Site is estimated to be $0.

3. In comparison, the fair market value of the Site is $1,600,000, and the Authority is required to donate the land to the Project at no cost.

4. Therefore, KMA concludes that the Authority will receive the fair reuse value for the Site.

Attachment
End of Term P&I Due &
Loan Amount $3,000,000
Ending Loan Balance in Year 55 $3,432,000
Estimated Share of Residual Receipts 33.35%
Projected Year Loan to Be Paid Off Year 55
Nominal Amount of Payments $7,950,000
Present Value of Payments (8% Discount Rate) $344,000
Projected Authority Loan Payments
1222
APPENDIX A - TABLE 1
ESTIMATED DEVELOPMENT COSTS 1

ARC VILLAGE APARTMENTS

PALM DESERT, CALIFORNIA
I. Direct Costs 2
Off-site Improvements 3 Allowance $762,000
On-site Improvements 4 80,150 Sf Land $24 /Sf Land 1,940,000 Solar Costs 40 Units $10,025 /Unit 401,000
Residential Structure 37,180 Sf GBA $239 /Unit 8,885,000 Furnishings, Fixtures & Equipment 40 Units $625 of Const. Costs 25,000 Contractor Fees / General Requirements 5 14% of Construction Costs 1,678,000 Contingency Allowance 5 5% of Other Direct Costs 685,000 Total Direct Costs 40 Units $359,400 /Unit $14,376,000
37,180 Sf GBA $387
II. Indirect Costs
Architecture, Engineering & Consultants 5 10% of Direct Costs $1,438,000 Permits & Fees 40 Units $37,400 /Unit 1,496,000
Taxes, Insurance, Legal & Accounting 5 3% of Direct Costs 431,000 Marketing & Leasing 40 Units $1,625 /Unit 65,000
Developer Fee 6 2,500,000
Contingency Allowance 5% of Other Indirect Costs 297,000 Total Indirect Costs 40 Units $155,700 /Unit $6,227,000 III. Financing Costs
Predevelopment Loan Interest 7 $1,000,000 Loan 15.00% Interest $50,000 Construction Loan Interest 8 $13,516,247 TEBs 8.35% Interest $1,160,000 Financing Fees 5
Construction Loan $13,516,247 Loan 1.00 Points 135,000
Permanent Loan $3,332,000 Loan 1.00 Points 33,000
Tax Credit Fees 40 Units $2,253 /Unit 90,000
Capitalized Reserves 5
Operating Reserves $44,366 /Mo 3 Months 133,000
Total Financing Costs 40 Units $40,000 /Unit $1,601,000 IV. Total Development Costs 40 Units $555,100 /Unit $22,204,000 1 2
3 4
5 6
7 8 Assumes a 18-month development period and a 69% average outstanding balance.

Offsite improvements are based on preliminary requirements.

KMA estimate based on experience with similar projects.

Based on Developer's estimates dated May 24, 2024, which KMA determined to be reasonable, except where noted, based on experience.

Project will not be required to pay either Federal and State prevailing wages. Costs include construction bonds and insurance.

Site needs to be raised a few feet due to the Site being a previous drainage basin.

Assumes a 24 month period and a 17% average outstanding balance.

Maximum developer fee allowed by TCAC.

Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; PF; jlr; 5/27/2024 1223
APPENDIX A - TABLE 2A

AFFORDABILITY MIX

ARC VILLAGE APARTMENTS

PALM DESERT, CALIFORNIA
Number Applicable Utility Applicable
of Units TCAC Rent HCD Rent DB Rent Gross Rent Allowance Net Rent 30% TCAC, ELI HCD 4 30% AMI ELI HCD N/A
1-Bdrm Units 2 $576 $585 N/A $576 $82 $494
2-Bdrm Units 1 $691 $658 N/A $658 $103 $555
3-Bdrm Units 1 $799 $731 N/A $731 $124 $607
40% TCAC, VLI HCD 8 40% AMI VLI HCD N/A
1-Bdrm Units 4 $769 $975 N/A $769 $82 $687
2-Bdrm Units 2 $922 $1,097 N/A $922 $103 $819
3-Bdrm Units 2 $1,066 $1,219 N/A $1,066 $124 $942
50% TCAC, VLI HCD 12 50% AMI VLI HCD N/A
1-Bdrm Units 6 $961 $975 N/A $961 $82 $879
2-Bdrm Units 3 $1,152 $1,097 N/A $1,097 $103 $994
3-Bdrm Units 3 $1,332 $1,219 N/A $1,219 $124 $1,095
60% TCAC, 59% HCD 15 60% AMI 59% HCD N/A
1-Bdrm Units 8 $1,153 $1,151 N/A $1,151 $82 $1,069
2-Bdrm Units 3 $1,383 $1,294 N/A $1,294 $103 $1,191
3-Bdrm Units 4 $1,599 $1,438 N/A $1,438 $124 $1,314
60% TCAC, LOW HCD 0 60% AMI LOW HCD N/A
1-Bdrm Units 0 $1,153 $1,170 N/A $1,153 $82 $1,071
2-Bdrm Units 0 $1,383 $1,316 N/A $1,316 $103 $1,213
3-Bdrm Units 0 $1,599 $1,463 N/A $1,463 $124 $1,339
Manager Unit 1
1-Bdrm Units 0
2-Bdrm Units 1
3-Bdrm Units 0
PBV Overhang 8 FMR Tenant Rent Overhang
Utility
Allowance
Net
Overhang
1-Bdrm Units 2 $1,772 $494 $1,278 $1,278
1-Bdrm Units 2 $1,772 $687 $1,085 $1,085
2-Bdrm Units 1 $2,211 $555 $1,656 $1,656
2-Bdrm Units 1 $2,211 $819 $1,392 $1,392
3-Bdrm Units 1 $2,978 $607 $2,371 $2,371
3-Bdrm Units 1 $2,978 $942 $2,036 $2,036
Note: Rents are based on 2024 rents and the utility allowances are based on Developer estimates. FMRs are based on 2024 FMRs plus 110% increase.

TOTAL UNITS 40 AVERAGE AFFORDABILITY: 49%
1-Bdrm Units 20 POTENTIAL GROSS INCOME - BASE: $448,104 2-Bdrm Units 10 POTENTIAL GROSS INCOME - PBV: $146,170
3-Bdrm Units 10
PBV SUBSIDY 8 LMIHAF City Regulatory Agreement: 39
1-Bdrm Units 4 ELI HCD Units 4
2-Bdrm Units 2 VLI HCD Units 20
3-Bdrm Units 2 59% HCD Units 15
Low HCD Units 0
TCAC Regulatory Agreement: 39
30% AMI Units 4 Density Bonus City Regulatory Agreement 40% AMI Units 8 VLI HCD Units 0
50% AMI Units 12
60% AMI Units 15
Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; AFF; jlr; 5/27/2024 1224
APPENDIX A - TABLE 2B

STABILIZED NET OPERATING INCOME

ARC VILLAGE APARTMENTS

PALM DESERT, CALIFORNIA
I. Project Income
Projected Gross Income - Base Rents 1 40 Units $934 /Unit/Mo $448,104 Projected Gross Income - PBV Subsidy 1 8 PBVs $1,523 /Unit/Mo 146,170 Miscellaneous Income 2 40 Units $20 /Unit/Mo 9,600
Projected Gross Income $603,874
(Less) Vacancy & Collection Allowance 2 5% of PGI (30,194) Effective Gross Income $573,680
II. Operating Expenses 2
General Operating Expenses 40 Units $5,511 /Unit $220,440 Property Taxes & Assessments 40 Units $75 /Unit 3,000
Social Services 40 Units $500 /Unit 20,000
County Monitoring Fee 40 Units $0 /Unit 0
City Monitoring Fee 40 Units $125 /Unit 5,000
Replacement Reserves 40 Units $250 /Unit 10,000
Total Operating Expenses 40 Units $6,461 /Unit $258,440 III. Net Operating Income $315,240
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: Arc Village - 05.27.24 - FINAL; PF; jlr; 5/27/2024 1225
APPENDIX A - TABLE 3
REUSE / (FINANCIAL GAP) ANALYSIS 1

ARC VILLAGE APARTMENTS

PALM DESERT, CALIFORNIA
I. Potential Funding Sources
A. Permanent Loan 2 1.15 DCR $273,948 Debt Svc $3,332,000

7.65% Interest 35 Years
B. Federal Tax Credit Equity 3 $15,152,175 Gross TC $0.90 Equity $13,636,000 C. Solar Tax Credit Equity $456,340 Gross TC $0.27 Equity $123,000 D. Inland Regional Center Loan 4 40 Units $37,500 /Unit $1,500,000 E. Deferred Developer Fee 5 25% of Developr Fee $613,000 Total Potential Funding Sources 40 Units $480,100 /Unit $19,204,000 II. Financial Gap Calculation
Total Development Costs $22,204,000
(Less) Available Funding Sources (19,204,000)
Financial Gap 40 Units $75,000 /Unit $3,000,000
III. Fair Reuse Value Calculation
Total Potential Funding Sources $19,204,000
Add: Authority Loan 3,000,000
(Less) Total Development Costs (22,204,000)
Fair Reuse Value 40 Units $0 /Unit $0
IV. Authority Funding Sources
Land Value $1,600,000
LMIHAF Funds 3,000,000
PLHA Funds 0
Total Authority Assistance 40 Units $115,000 /Unit $4,600,000 V. SB 341 Income Targeting Calcualtion
ExtremelyLow
Households
31% - 59%
AMI
Households
60% - 80% AMI
Households Totals
A. Restricted Units 4 35 0 39
B. Total LMIHAF Assistance $308,000 $2,692,000 $0 $3,000,000 As a % of Total LMIHAF Assistance 10% 90% 0% 100%
1 2
3 4
5 Based on Developer estimates, which KMA determined to be reasonable based on experience.

KMA estimate to fill the gap created by targeting a 60%+ tie-breaker score. Up to 50% of the developer fee can be deferred per TCAC guidelines; however, it must be paid to Developer from cash flow within 15 years.

Assumes requested Tax Credits are reduced by $8,246,346 in order to maximize tie-breaker score.

Assumes Developer estimated loan terms and KMA's stabilized NOI projection.

Previously awarded by Inland Regional Center.

Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; PF; jlr; 5/27/2024 1226
APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

ARC VILLAGE APARTMENTS

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 $448,104 $459,307 $470,789 $482,559 $494,623 $506,989 $519,663 $532,655 $545,971 $559,620 Projected Gross Income - PBV Subsidy 102.5% /Year 146,170 149,824 153,569 157,409 161,344 165,377 169,512 173,750 178,093 182,546 Miscellaneous Income 102.5% /Year 9,600 9,840 10,086 10,338 10,597 10,862 11,133 11,411 11,697 11,989 Projected Gross Income $603,874 $618,970 $634,445 $650,306 $666,563 $683,228 $700,308 $717,816 $735,761 $754,155 (Less) Vacancy & Collection Allowance 5% of PGI (30,194) (30,949) (31,722) (32,515) (33,328) (34,161) (35,015) (35,891) (36,788) (37,708) Effective Gross Income $573,680 $588,022 $602,722 $617,791 $633,235 $649,066 $665,293 $681,925 $698,973 $716,448 II. Operating Expenses
General Operating Expenses 103.5% /Year $220,440 228,155 236,141 244,406 252,960 261,814 270,977 280,461 290,277 300,437 Property Taxes & Assessments 102.0% /Year 3,000 3,060 3,121 3,184 3,247 3,312 3,378 3,446 3,515 3,585 Social Services 103.5% /Year 20,000 20,700 21,425 22,174 22,950 23,754 24,585 25,446 26,336 27,258 County Monitoring Fee 103.5% /Year 0 0 0 0 0 0 0 0 0 0
City Monitoring 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 Replacement Reserves 2 103.0% /Year 10,000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 Total Operating Expenses $258,440 $267,365 $276,600 $286,155 $296,040 $306,269 $316,851 $327,801 $339,130 $350,852 III. Net Operating Income $315,240 $320,657 $326,122 $331,636 $337,195 $342,798 $348,441 $354,124 $359,843 $365,596 (Less) Annual Debt Service (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (Less) LP Asset Management Fee 2 103.0% /Year (7,500) (7,725) (7,957) (8,195) (8,441) (8,695) (8,955) (9,224) (9,501) (9,786) (Less) AGP and MGP Asset Mgt 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 $23,792 $28,683 $33,608 $38,565 $43,550 $48,562 $53,597 $58,653 $63,726 $68,814 V. Deferred Developer Fee Payment 3 $613,000 $23,792 $28,683 $33,608 $38,565 $43,550 $48,562 $53,597 $58,653 $63,726 $68,814 Accrued Payment 23,792 52,475 86,083 124,648 168,199 216,761 270,358 329,011 392,737 461,551 VI. Residual Receipts $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
VII. Authority Loan
Beginning Balance $3,000,000 $3,090,000 $3,180,000 $3,270,000 $3,360,000 $3,450,000 $3,540,000 $3,630,000 $3,720,000 $3,810,000 Beginning Balance (Interest Calc) 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 Add: Interest (Simple) 3.00% 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 (Less) Payments 4 33.33% 0 0 0 0 0 0 0 0 0 0
Ending Balance 3,090,000 3,180,000 3,270,000 3,360,000 3,450,000 3,540,000 3,630,000 3,720,000 3,810,000 3,900,000 1 2
3 Based on Table 2B and typical escalations for affordable housing projects.

Based on Agreement requirements.

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.

Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; CF; jlr; 5/27/2024 1227 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

ARC VILLAGE APARTMENTS

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 2 103.0% /Year
Replacement Reserves 2 103.0% /Year
Total Operating Expenses
III. Net Operating Income
(Less) Annual Debt Service
(Less) LP Asset Management Fee 2 103.0% /Year
(Less) AGP and MGP Asset Mgt Fee 2 103.0% /Year
IV. Cash Flow Available for Distribution
V. Deferred Developer Fee Payment 3 $613,000
Accrued Payment
VI. Residual Receipts
VII. Authority Loan
Beginning Balance
Beginning Balance (Interest Calc)
Add: Interest (Simple) 3.00%
(Less) Payments 4 33.33%
Ending Balance
1 2
3 Based on Table 2B and typical escalations for affordable housing projects.

Based on Agreement requirements.

Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 $573,611 $587,951 $602,650 $617,716 $633,159 $648,988 $665,213 $681,843 $698,889 $716,362 187,109 191,787 196,582 201,496 206,534 211,697 216,990 222,414 227,975 233,674 12,289 12,596 12,911 13,234 13,565 13,904 14,251 14,608 14,973 15,347 $773,009 $792,334 $812,143 $832,446 $853,258 $874,589 $896,454 $918,865 $941,837 $965,383 (38,650) (39,617) (40,607) (41,622) (42,663) (43,729) (44,823) (45,943) (47,092) (48,269) $734,359 $752,718 $771,536 $790,824 $810,595 $830,860 $851,631 $872,922 $894,745 $917,114 310,952 321,836 333,100 344,758 356,825 369,314 382,240 395,618 409,465 423,796 3,657 3,730 3,805 3,881 3,958 4,038 4,118 4,201 4,285 4,370 28,212 29,199 30,221 31,279 32,374 33,507 34,680 35,894 37,150 38,450 0 0 0 0 0 0 0 0 0 0
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 $362,980 $375,529 $388,512 $401,946 $415,846 $430,228 $445,109 $460,505 $476,436 $492,919 $371,379 $377,189 $383,023 $388,878 $394,749 $400,632 $406,523 $412,417 $418,309 $424,194 (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (10,079) (10,382) (10,693) (11,014) (11,344) 0 0 0 0 0
(13,439) (13,842) (14,258) (14,685) (15,126) (15,580) (16,047) (16,528) (17,024) (17,535) $73,912 $79,017 $84,124 $89,230 $94,330 $111,104 $116,527 $121,940 $127,336 $132,711 $73,912 $77,537 $0 $0 $0 $0 $0 $0 $0 $0
535,463 613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 $0 $1,480 $84,124 $89,230 $94,330 $111,104 $116,527 $121,940 $127,336 $132,711 $3,900,000 $3,990,000 $4,079,507 $4,141,465 $4,201,722 $4,260,279 $4,313,244 $4,364,402 $4,413,755 $4,461,310 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 0 (493) (28,041) (29,743) (31,443) (37,035) (38,842) (40,647) (42,445) (44,237) 3,990,000 4,079,507 4,141,465 4,201,722 4,260,279 4,313,244 4,364,402 4,413,755 4,461,310 4,507,073 Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; CF; jlr; 5/27/2024 1228 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

ARC VILLAGE APARTMENTS

Based on Agreement requirements.

Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 $734,271 $752,627 $771,443 $790,729 $810,497 $830,760 $851,529 $872,817 $894,637 $917,003 239,516 245,504 251,641 257,932 264,381 270,990 277,765 284,709 291,827 299,123 15,731 16,124 16,527 16,940 17,364 17,798 18,243 18,699 19,166 19,646 $989,517 $1,014,255 $1,039,612 $1,065,602 $1,092,242 $1,119,548 $1,147,537 $1,176,225 $1,205,631 $1,235,771 (49,476) (50,713) (51,981) (53,280) (54,612) (55,977) (57,377) (58,811) (60,282) (61,789) $940,041 $963,542 $987,631 $1,012,322 $1,037,630 $1,063,571 $1,090,160 $1,117,414 $1,145,349 $1,173,983 438,629 453,981 469,870 486,316 503,337 520,954 539,187 558,059 577,591 597,806 4,458 4,547 4,638 4,731 4,825 4,922 5,020 5,121 5,223 5,328 39,796 41,189 42,630 44,122 45,667 47,265 48,919 50,631 52,403 54,238 0 0 0 0 0 0 0 0 0 0
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 $509,974 $527,621 $545,880 $564,773 $584,321 $604,547 $625,475 $647,130 $669,536 $692,720 $430,067 $435,921 $441,751 $447,549 $453,309 $459,023 $464,684 $470,284 $475,813 $481,263 (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) (273,948) 0 0 0 0 0 0 0 0 0 0
(18,061) (18,603) (19,161) (19,736) (20,328) (20,938) (21,566) (22,213) (22,879) (23,566) $138,058 $143,370 $148,642 $153,865 $159,033 $164,137 $169,170 $174,123 $178,985 $183,749 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 $138,058 $143,370 $148,642 $153,865 $159,033 $164,137 $169,170 $174,123 $178,985 $183,749 $4,507,073 $4,551,053 $4,593,263 $4,633,716 $4,672,428 $4,709,417 $4,744,704 $4,778,314 $4,810,274 $4,840,612 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 (46,019) (47,790) (49,547) (51,288) (53,011) (54,712) (56,390) (58,041) (59,662) (61,250) 4,551,053 4,593,263 4,633,716 4,672,428 4,709,417 4,744,704 4,778,314 4,810,274 4,840,612 4,869,362 Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; CF; jlr; 5/27/2024 1229 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

ARC VILLAGE APARTMENTS

Based on Agreement requirements.

Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 Year 40 $939,928 $963,427 $987,512 $1,012,200 $1,037,505 $1,063,443 $1,090,029 $1,117,280 $1,145,212 $1,173,842 306,601 314,266 322,122 330,175 338,430 346,890 355,563 364,452 373,563 382,902 20,137 20,640 21,156 21,685 22,227 22,783 23,352 23,936 24,535 25,148 $1,266,666 $1,298,332 $1,330,791 $1,364,060 $1,398,162 $1,433,116 $1,468,944 $1,505,667 $1,543,309 $1,581,892 (63,333) (64,917) (66,540) (68,203) (69,908) (71,656) (73,447) (75,283) (77,165) (79,095) $1,203,332 $1,233,416 $1,264,251 $1,295,857 $1,328,254 $1,361,460 $1,395,497 $1,430,384 $1,466,144 $1,502,797 618,730 640,385 662,799 685,997 710,006 734,857 760,577 787,197 814,749 843,265 5,434 5,543 5,654 5,767 5,882 6,000 6,120 6,242 6,367 6,494 56,136 58,101 60,134 62,239 64,417 66,672 69,005 71,421 73,920 76,507 0 0 0 0 0 0 0 0 0 0
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 $716,709 $741,530 $767,213 $793,787 $821,284 $849,736 $879,176 $909,638 $941,158 $973,772 $486,624 $491,886 $497,038 $502,070 $506,970 $511,724 $516,321 $520,746 $524,986 $529,025 (273,948) (273,948) (273,948) (273,948) (273,948) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
(24,273) (25,001) (25,751) (26,523) (27,319) (28,139) (28,983) (29,852) (30,748) (31,670) $188,403 $192,937 $197,339 $201,599 $205,702 $483,585 $487,338 $490,894 $494,238 $497,355 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 $188,403 $192,937 $197,339 $201,599 $205,702 $483,585 $487,338 $490,894 $494,238 $497,355 $4,869,362 $4,896,561 $4,922,249 $4,946,469 $4,969,269 $4,990,702 $4,919,507 $4,847,061 $4,773,429 $4,698,683 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 (62,801) (64,312) (65,780) (67,200) (68,567) (161,195) (162,446) (163,631) (164,746) (165,785) 4,896,561 4,922,249 4,946,469 4,969,269 4,990,702 4,919,507 4,847,061 4,773,429 4,698,683 4,622,898 Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; CF; jlr; 5/27/2024 1230 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

ARC VILLAGE APARTMENTS

Based on Agreement requirements.

Year 41 Year 42 Year 43 Year 44 Year 45 Year 46 Year 47 Year 48 Year 49 Year 50 $1,203,188 $1,233,268 $1,264,099 $1,295,702 $1,328,094 $1,361,297 $1,395,329 $1,430,212 $1,465,968 $1,502,617 392,475 402,287 412,344 422,652 433,219 444,049 455,150 466,529 478,192 490,147 25,777 26,421 27,082 27,759 28,453 29,164 29,893 30,640 31,406 32,191 $1,621,439 $1,661,975 $1,703,525 $1,746,113 $1,789,765 $1,834,510 $1,880,372 $1,927,382 $1,975,566 $2,024,955 (81,072) (83,099) (85,176) (87,306) (89,488) (91,725) (94,019) (96,369) (98,778) (101,248) $1,540,367 $1,578,876 $1,618,348 $1,658,807 $1,700,277 $1,742,784 $1,786,354 $1,831,013 $1,876,788 $1,923,708 872,779 903,326 934,943 967,666 1,001,534 1,036,588 1,072,868 1,110,419 1,149,284 1,189,508 6,624 6,757 6,892 7,030 7,170 7,314 7,460 7,609 7,761 7,916 79,185 81,957 84,825 87,794 90,867 94,047 97,339 100,746 104,272 107,921 0 0 0 0 0 0 0 0 0 0
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 $1,007,519 $1,042,438 $1,078,570 $1,115,957 $1,154,643 $1,194,673 $1,236,093 $1,278,952 $1,323,300 $1,369,189 $532,848 $536,438 $539,778 $542,850 $545,634 $548,112 $550,261 $552,061 $553,488 $554,518 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
(32,620) (33,599) (34,607) (35,645) (36,715) (37,816) (38,950) (40,119) (41,323) (42,562) $500,228 $502,839 $505,171 $507,205 $508,920 $510,296 $511,310 $511,942 $512,165 $511,956 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 613,000 $500,228 $502,839 $505,171 $507,205 $508,920 $510,296 $511,310 $511,942 $512,165 $511,956 $4,622,898 $4,546,156 $4,468,543 $4,390,152 $4,311,084 $4,231,444 $4,151,346 $4,070,909 $3,990,262 $3,909,540 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 (166,743) (167,613) (168,390) (169,068) (169,640) (170,099) (170,437) (170,647) (170,722) (170,652) 4,546,156 4,468,543 4,390,152 4,311,084 4,231,444 4,151,346 4,070,909 3,990,262 3,909,540 3,828,888 Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; CF; jlr; 5/27/2024 1231 APPENDIX A - TABLE 4
CASH FLOW ANALYSIS 1

ARC VILLAGE APARTMENTS

Based on Agreement requirements.

Year 51 Year 52 Year 53 Year 54 Year 55
$1,540,182 $1,578,687 $1,618,154 $1,658,608 $1,700,073
502,401 514,961 527,835 541,031 554,556
32,996 33,821 34,667 35,533 36,422
$2,075,579 $2,127,469 $2,180,655 $2,235,172 $2,291,051
(103,779) (106,373) (109,033) (111,759) (114,553)
$1,971,800 $2,021,095 $2,071,623 $2,123,413 $2,176,499
1,231,141 1,274,231 1,318,829 1,364,988 1,412,763
8,075 8,236 8,401 8,569 8,740
111,699 115,608 119,654 123,842 128,177
0 0 0 0 0
21,920 22,577 23,254 23,952 24,671
43,839 45,154 46,509 47,904 49,341
$1,416,673 $1,465,807 $1,516,648 $1,569,256 $1,623,692
$555,127 $555,288 $554,975 $554,158 $552,807
0 0 0 0 0
0 0 0 0 0
(43,839) (45,154) (46,509) (47,904) (49,341)
$511,288 $510,134 $508,466 $506,253 $503,465
$0 $0 $0 $0 $0
613,000 613,000 613,000 613,000 613,000
$511,288 $510,134 $508,466 $506,253 $503,465
$3,828,888 $3,748,459 $3,668,414 $3,588,925 $3,510,174
3,000,000 3,000,000 3,000,000 3,000,000 3,000,000
90,000 90,000 90,000 90,000 90,000
(170,429) (170,045) (169,489) (168,751) (3,600,175)
3,748,459 3,668,414 3,588,925 3,510,174 (0)
Prepared by: Keyser Marston Associates, Inc.

Filename: Arc Village - 05.27.24 - FINAL; CF; jlr; 5/27/2024 1232 PLANNING COMMISSION RESOLUTION NO. 2868

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF PALM

DESERT CALIFORNIA, APPROVING A PRECISE PLAN AND CONDITIONAL USE PERMIT TO DEVELOP A 40-UNIT MULTIFAMILY APARTMENT
DEVELOPMENT ON A SITE LOCATED AT ASSESSOR’S PARCEL NUMBER 622-370-014, AND FINDING THAT THE PROJECT IS EXEMPT FROM

FURTHER ENVIRONMENTAL REVIEW IN ACCORDANCE WITH THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT.

CASE NO. PP24-0001 / CUP24-0003
WHEREAS, Chelsea Investment (“Applicant”), submitted applications for a Precise Plan (“PP”) and Conditional Use Permit (“CUP”) to develop a two-story multi-family residential apartment building containing up to 40 dwelling units, and site improvements including, but not limited to, outdoor recreation areas, landscaping, off-street parking, and other related offsite improvements (“Project Site”) on a vacant 1.84-acre site located at APN 622-370-014 (“Project Site”); and
WHEREAS, the Project site has a General Plan Land Use Designation of Public Facility/Institutional District per the City of Palm Desert 2040 General Plan adopted by the Palm Desert City Council on November 10, 2016; and
WHEREAS, the Project site has a zoning designation of Public/Institutional (“P”) and is within the Housing Overlay District (”HOD”); and
WHEREAS, the proposed project conforms to the applicable development standards including maximum building heights codified in the City’s Zoning Ordinance for the Public/Institutional zoning district; and
WHEREAS, on September 29, 2022, the Palm Desert City Council adopted the 2021- 2029 Housing Element for the 6th Cycle (“6th Cycle Housing Element”) of the Regional Housing Needs Allocation (“RHNA”); and
WHEREAS, said 6th Cycle Housing Element has been certified by the California Department of Housing and Community Development (“HCD”) identifies the Project site as site “KK” in the vacant site inventory and allocates the site to provide 36 units of affordable housing; and
WHEREAS, the Applicant proposes to provide 39 units within the Project at affordable levels for income-qualified households, with one (1) non-income restricted unit for an on-site manager and will enter into a Housing Agreement with the Palm Desert Housing Authority; and
WHEREAS, under Section 21067 of the Public Resources Code, Section 15367 of the State California Environmental Quality Act (“CEQA”) Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.), and the City of Palm Desert’s (“City’s”) Local CEQA Guidelines, the City is the lead agency for the Project; and
DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1233
PLANNING COMMISSION RESOLUTION NO. 2868
2 WHEREAS, the Project has complied with the requirements of the "City of Palm Desert Procedure for Implementation of CEQA” Resolution No. 2019-41, in that the Director of Development Services finds that the Project will not have a foreseeable significant impact on the environment and that the Project can be found exempt from further environmental review per Article 19, Section 15332 In-fill Development Projects (Class 32); and WHEREAS, the Architectural Review Commission (ARC) of the City of Palm Desert, California, did on April 23rd, 2024, approve a design review for the Project; and WHEREAS, the Planning Commission of the City of Palm Desert, California, did on May 21st, 2024, hold a duly noticed public hearing to consider the request by the Applicant for approval of the above-noted Project request; and
WHEREAS, at the said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, the Planning Commission did find the following facts and reasons, which are outlined in the staff report, exist to justify approval of said request:

NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of Palm Desert, California, as follows:

SECTION 1. Recitals. The Planning Commission hereby finds that the foregoing recitals are true and correct and are incorporated herein as substantive findings of this Resolution.

SECTION 2. Findings on Precise Plan. As required by Palm Desert Municipal Code “PDMC” Section 25.72.030 (E), the Planning Commission makes the following findings to approve the PP:

1. Consideration is given and restrictions are imposed to the extent necessary, given the size and shape of the parcel and the present and proposed zoning and use of the subject property and the surrounding property, to permit the same degree of enjoyment of the subject property, but subject to the same degree of protection of adjoining properties, as would be accorded in normal circumstances by the standard restrictions imposed by Chapter 25.72.030. The project, as conditioned, meets all the requirements of the underlying zoning and overlay designation and provides this project the with same allowances that its surrounding properties would be governed by.

2. The proposed precise plan is not found to substantially depreciate property values in the vicinity nor would the plan unreasonably interfere with the use or enjoyment of property in the vicinity by the occupants thereof for lawful purposes or would endanger the public peace, health, safety, or general welfare, as conditioned.

3. The Architectural Review Commission approved a design review on April 23, 2024.

SECTION 3. Findings on Conditional Use Permit. As required by PDMC Section

25.72.050(F), the Planning Commission makes the following findings to approve the CUP:

DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1234
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3 1. The proposed location of the conditional use is in accord with the objectives of this title and the purpose of the district in which the site is located.

The proposed location of the conditional use is in accord with the objectives of the Palm Desert Zoning Ordinance and the purpose of the Public/Institutional Zoning District (P) and the Housing Overlay District (HOD). The purpose of the Public Institutions (P) zoning district is to provide areas suitable for the development of educational, religious, and non-profit facilities. The P zoning district permits buildings up to two stories and allows residential uses supported by the government. The site is owned by the Palm Desert Housing Authority and will be sold to the applicant upon satisfaction of certain conditions. Additionally, the HOD permits uses that area also allowed in the Planned Residential (PR) and Mixed Residential (R-2) zoning districts which allow multi-family residential as a conditionally permitted land use. The proposed multi-family residential use is compatible with this intent with approval of a Conditional Use Permit

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

The location and conditions of the proposed multi-family residential poses no detrimental effects to the public health, safety, or welfare, nor will it be materially injurious to properties or improvements in the vicinity. The project will be designed to meet access, utilities, setbacks, lot coverage, building height, land use, and parking requirements. The proposed location and development of this project at this site will be monitored and cared for by an on-site manager. The proposed project is located on a vacant infill site surrounded by residential land uses on three sides and an existing institutional facility to the north. Project traffic generation is not anticipated to create hazards or congestion. The proposal is setback from adjacent properties buffered by landscape space and consistent with applicable development standards so that it will not unreasonably interfere with the use and enjoyment of existing or proposed development in the area. As designed, and as conditioned, the project will not be detrimental to the public health, safety, or welfare.

3. The proposed conditional use will comply with each of the applicable provisions of this title, except for approved variances or adjustments.

The proposed development conforms with legally adopted development standards for the Public/Facilities zoning district and the Housing Overlay District. The project provides a total of 49 off-street parking spaces which is less than the City’s l requirements for parking, however per State Density bonus law (Government Code Section 65915 et. sec.) this parking ratio must be approved.

4. The proposed conditional use complies with the goals, objectives, and policies of the City’s General Plan
According to the diagram shown in Figure 3.1 Land Use Designations of the City of Palm Desert General Plan Land Use Element, the Project Site is designated DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1235
PLANNING COMMISSION RESOLUTION NO. 2868
4 Public Facility/Institutional Uses. This designation generally allows a range of government facilities and supportive uses, which may include residential land uses. The Project Site is also identified in the City’s General Plan Housing Element adopted for the 6th Cycle of the Regional Housing Needs Assessment (RHNA) and certified by the California Department of Housing and Community Development (“HCD”) on vacant land inventory sites table (Table III-47) as site “KK”. This site is identified to provide a potential of 36 affordable units and supported Policy 1, Program 1.A of the City’s Housing Element. The Project Site is located within the Public/Institutional (P) zoning district within the Housing Overlay District (HOD). Development standards for the P zoning district are codified under Palm Desert Municipal Code Chapter 25.22.030. Alternatively, the project may utilize the standards of the Housing Overlay District, which allows the development of uses permitted in the Planned Residential (PR) or Mixed Residential (R-2) zoning district subject to “flexible” standards that ensure efficient site planned and neighborhood compatibility. Multi-family apartments are allowed in the PR and R-2 zone and therefore the use can operate on the subject site without being Government-supported, -funded, and/or -operated only. The proposed project will develop a 1.84-acre site into a forty (40) unit multifamily residential building with 49-onsite parking spaces and open space and landscaping. The unit will be two stories tall and total approximately 39,453 square feet including an approximately 1,543-square-foot community lounge on the ground floor. The units will be restricted to lower-income households for a 55-year term pursuant to a housing agreement with the City of Palm Desert. The proposed project is compatible with the development pattern within the surrounding area which consists of transitions between commercial, single-family, and multi-family uses. The proposed development is in keeping with the character of the surrounding neighborhood and is not detrimental to the harmonious, orderly, and attractive development contemplated by this title and the General Plan of the City.

The proposal is also consistent with the General Plan Housing Element which identifies the site for development as affordable housing.

SECTION 4. CEQA. The application has complied with the requirements of the “City of Palm Desert Procedure for Implementation of CEQA” Resolution No. 2019-41, in that the Planning Commission finds that the Project is exempt from CEQA per Section 15332 of the State CEQA guidelines based on the substantial evidence of the record as presented in the Project staff report. Additionally, the Project is not subject to any of the exceptions for categorical exemptions identified in CEQA Guidelines Section 15300.2:
a) This exception applies to Classes 3, 4, 5, 6, and 11. This exception does not apply to a Class 32 exemption and therefore does not apply to the proposed project.

Furthermore, the Project Site is not located in a particularly sensitive environment and is located in an urban infill location and is surrounded by existing urban uses. b) There is no substantial evidence on the record that the project would create a cumulative impact. There is no evidence of a potential significant cumulative impact because successive projects of the same type in the same place have not been approved and are not currently proposed. As a result, there is no evidence of significant cumulative impacts from successive projects of the same type in the same place, over time. Therefore, this exception does not apply to the project.

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5 c) No unusual circumstances exist for the proposed project, project site, or immediate vicinity. The project is proposing to develop a two-story 40-unit apartment community.

The project is consistent with the General Plan land use designation and zoning ordinance designation, and certified housing element. The Project is located in a developed urban neighborhood and is directly surrounded by urban uses in all directions, including existing multi-family housing. Therefore, no fair argument or substantial evidence exists to suggest the project would create a significant impact, nor can it be readily perceived that the project would create a significant impact.

Therefore, this exception does not apply to the proposed project. d) The nearest designated scenic highway is Highway 74 located approximately twoand-one-half (2.5) miles to the south of the Project Site. Due to the existing topography and developed land use pattern, the Project Site is not visible from Highway 74. The project would have no impact on an officially designated scenic highway. Therefore, this exception does not apply to the project. e) According to the Department of Toxic Substance Control’s database of hazardous waste sites, EnviroStor, neither the Project Site nor any properties in the vicinity have been identified as hazardous waste sites. Thus, the Project Site has not been included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5. Therefore, this exception does not apply to the project. f) The project site has not been identified as a historic resource by local or state agencies, nor has the project site been determined to be eligible for listing in the National Register of Historic Places or California Register of Historical Resources.

Therefore, the Project would not adversely affect historic resources on the Project Site or in the vicinity.

SECTION 5. Project Approval. The Planning Commission hereby approves Case No.

PP24-0001, CUP24-0003 subject to the conditions of exhibit A of this resolution.

SECTION 6. Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings are based are located at the City’s office at 73510 Fred Waring Drive, Palm Desert, CA 92260. Richard D. Cannone, AICP, the Secretary to the Palm Desert Planning Commission, is the custodian of the record of proceedings.

SECTION 7. Execution of Resolution. The Chairperson of the Planning Commission signs this Resolution, and the Secretary to the Commission shall attest and certify to the passage and adoption thereof.

ADOPTED ON May 21, 2024.

JOSEPH PRADETTO

CHAIRPERSON
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PLANNING COMMISSION RESOLUTION NO. 2868
6 ATTEST:

RICHARD D. CANNONE, AICP

SECRETARY
I, Richard D. Cannone, AICP, Secretary of the City of Palm Desert Planning Commission, hereby certify that Resolution No. 2868 is a full, true, and correct copy, and was duly adopted at a regular meeting of the Planning Commission of the City of Palm Desert on May 21, 2024, by the following vote:

AYES: GREGORY, HOLT, PRADETTO
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
RECUSED: DELUNA, GREENWOOD
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Desert, California, on May _29_, 2024.

RICHARD D. CANNONE, AICP

SECRETARY
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PLANNING COMMISSION RESOLUTION NO. 2868
7 EXHIBIT A

CONDITIONS OF APPROVAL
CASE NOS. PP24-0001 / CUP24-0003
PLANNING DIVISION:

1. The development of the property shall conform substantially with exhibits on file with the Development Services Department, except as modified by the following conditions. Any variation from the approved plans must be reviewed and approved by the Planning Division prior to the building permit issuance and may require review and approval by the Architectural Review Commission, Planning Commission, and/or City Council.

2. The development of the property described herein shall be subject to the restrictions and limitations set forth herein, which are in addition to the approved development standards listed in the PDMC and state and federal statutes now in force, or which hereafter may be in force.

3. The PP shall expire if construction of the said Project shall not commence within 24 months from the date of final approval unless an extension of time is granted by the Palm Desert Planning Commission; otherwise, said approval shall become null, void, and of no effect whatsoever.

4. This CUP shall lapse and become void 24 months following the effective date of the use permit, unless prior to the expiration a building permit is issued and construction is commenced and diligently pursued toward completion, or as otherwise specified by Title 25 of the Palm Desert Municipal Code (PDMC). If the CUP expires, the applicant must file a new application which shall be processed in accordance with the requirements of Title 25 of the Palm Desert Municipal Code.

5. Prior to the expiration of the permit, the applicant may request a one (1) year time extension by filing a written request with the Development Services Department for consideration by the Planning Commission. Any request for an extension shall be noticed and be considered at a public hearing held before the original approval body.

6. The Applicant shall develop and operate the use in compliance with the approved exhibits on file with the Department of Development Services, except as modified by conditions herein. Any variation or modification from the approved exhibits, and/or violations of these conditions of approval may be subject to enforcement action.

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8 7. In the event there is a need for clarification of the Conditions of Approval, the Director of Development Services may have the authority to clarify the intent of these Conditions of Approval without going to a public hearing. Minor revisions or modifications may be approved by the Director pursuant to the requirements of PDMC Section 25.72.050(I).

8. The approved PP shall only be modified with written City approval per PDMC Chapter

25.72.030. Any proposed changes to this PP will require an amendment to the application, which may result in a new public hearing.

9. The CUP approval may be suspended and/or revoked for cause in accordance with Title 25 of the Palm Desert Municipal Code.

10.The applicant shall pay all applicable fees in effect at the time of building permit issuance.

11.The Applicant agrees that in the event of any administrative, legal, or equitable action instituted by a third party challenging the validity of any of the procedures leading to the adoption of these project approvals for the Project, or the project approvals themselves, the Developer and City each shall have the right, in their sole discretion, to elect whether to defend such action. The developer, at its sole expense, shall defend, indemnify, and hold harmless the City (including its agents, officers, and employees) from any such action, claim, or proceeding with counsel chosen by the City, subject to the Developer’s approval of counsel, which shall not be unreasonably denied, and at the Developer’s sole expense. If the City is aware of such an action or proceeding, it shall promptly notify the Developer and cooperate in the defense. The Developer, upon such notification, shall deposit with City sufficient funds in the judgment of the City Finance Director to cover the expense of defending such action without any offset or claim against said deposit to assure that the City expends no City funds. If both Parties elect to defend, the Parties hereby agree to affirmatively cooperate in defending said action and to execute a joint defense and confidentiality agreement to share and protect the information under the joint defense privilege recognized under applicable law. As part of the cooperation in defending an action, City and Developer shall coordinate their defense to make the most efficient use of legal counsel and to share and protect information. Developer and City shall each have sole discretion to terminate its defense at any time. The City shall not settle any third-party litigation of project approvals without the Developer’s consent, which consent shall not be unreasonably withheld, conditioned, or delayed unless the Developer materially breaches this indemnification requirement.

12.The Applicant shall execute a written acknowledgment to the Planning Division stating acceptance of and compliance with all the Conditions of Approval of Resolution No. 2868 and that the plans submitted are in compliance with the DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1240
PLANNING COMMISSION RESOLUTION NO. 2868
9 Conditions of Approval. No modifications shall be made to said plans without written approval from the appropriate decision-making body.

13.The Applicant shall comply will all applicable local, state, and federal laws and regulations.

14.The use and operation shall comply with Palm Desert Municipal Code (PDMC) Chapter 9.24 for Noise Control Requirements.

15.All construction documentation shall be coordinated for consistency, including, but not limited to, architectural, structural, mechanical, electrical, plumbing, landscape and irrigation, grading, and street improvement plans. All such plans shall be consistent with the approved entitlement plans on file with the Development Services Department.

16.Prior to the issuance of a building permit for the construction of any use or structure contemplated by this approval, the Applicant shall first obtain permits and/or clearance from the following agencies:

Coachella Valley Water District (CVWD)
City of Palm Desert Public Works Department
Riverside County Fire Department
City of Palm Desert Land Development Division
City of Palm Desert Planning Division
City of Palm Desert Building and Safety Division
Evidence of said permit or clearance from the above agencies shall be presented to the Building & Safety Division at the time of issuance of a building permit for the use contemplated herewith.

17.This Project is subject to the Art in Public Places requirements in Chapter 4.10 of the PDMC.

18.Final lighting plans shall be submitted per PDMC Section 24.16 for any landscape, architectural, street, or other lighting types within the Project area. All exterior lighting sources shall be fully shielded and directed downwards and is subject to approval by the Development Services Department. Luminaries with total lamp lumens above 16,000 lumens shall not be used. Prior to the building permit issuance, the Applicant shall submit plans for outdoor lighting as required by PDMC Section 24.16.030 and include glare ratings and color temperature for all exterior light fixtures.

19.Access to trash enclosure and service areas shall be placed so as not to conflict with parking areas. Said placement shall be approved by the applicable waste company and the Development Services Department and shall include any waste programs required by law.

20.Prior to the building permit issuance, the Applicant shall submit a landscape construction application for approval by the Development Services Department and DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1241
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10 Coachella Valley Water District. Final landscape and irrigation documents shall be prepared by a landscape architect registered with the State of California and shall be submitted to the Development Services Department and the CVWD for review and approval. All sheets shall be signed by the landscape architect and shall include the license number and the expiration date. The landscape plan shall conform to the preliminary landscape plans prepared as part of this application and shall include dense plantings of live landscape material. All plants shall be a minimum of five (5) gallons in size, and all trees shall be a minimum 24-inch box in size. a. The Applicant shall submit final landscape construction plans to the Palm Desert Development Services Department for review and acceptance prior to submittal to CVWD.

21.All Project irrigation systems shall function properly, and landscaping shall be maintained in a healthy and thriving condition. The maintenance of landscaping and the irrigation system shall be permanently provided for all areas of the Project site, as well as walkways and the portion of public right-of-way abutting the Project site (parkways). Furthermore, the plans shall identify responsibility for the continued maintenance.

22.Prior to the issuance of the Certificate of Occupancy, the Project landscape architect shall submit written certification to the Planning Division that the landscaping and irrigation have been installed per the approved landscape plan.

23.All exterior and all appurtenances thereto shall be screened from public view by walls or roof screens that are architecturally treated to be match the materials and scale of the building. The final construction plans shall include appropriate drawings demonstrating how such equipment is to be screened from view.

24.All roof drainage systems and devices shall be designed such that they are fully screened from view from all public streets. Drainage devices, including but not limited to down-spouts, shall not be located on any street-facing building elevation or area that is clearly visible from the public right-of-way. Drainage devices shall be fully integrated into the building structure and located within the exterior walls of the structure.

25.All ground-mounted utility structures including, but not limited to, transformers, HVAC equipment, and backflow prevention valves shall be located out of direct view from any public street or adequately screened using landscaping and/or permanent screening devices.

26.Exterior building elevations showing building wall materials, roof types, exterior colors, and appropriate vertical dimensions shall be included in the development construction drawings.

27.All roof access ladders shall be located on the inside of the building and shall be screened by rooftop parapets.

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11 28.All parking spaces shall be clearly marked with white or yellow paint or other easily distinguished material. Except as required by state and ADA requirements, all markings shall be a minimum four-inch (4”) wide double (“hairpin” style) stripe designed to provide 18 inches measured between the outside lines.

29.Prior to permit issuance, the Applicant shall submit plans for the final design of all site walls subject to review and approval by the Palm Desert Development Services Department.

30.The Applicant shall construct the pedestrian circulation network as shown on the approved preliminary exhibits. The pedestrian connections shall, at a minimum comply with building requirements for width and access.

31.The Applicant shall provide payment for filing fees for the Notice of Exemption within five (5) days of the Planning Commission approval of this project.

32.Prior to the issuance of a building permit, the Applicant shall enter into a Housing Agreement (HA) with the City agreeing to make 39 of the units within the Project affordable providing all units to extremely low, very low, and low-income households. The one remaining unit shall not be subject to restriction and will be used for an on-site manager unit. The HA will create such conditions, covenants, restrictions, liens, and charges in favor of the City upon and subject to which the Project shall be occupied, leased, and rented. The provisions of the HA shall run with title to each and every portion of the Apartment Site and the Project and shall inure to and pass with each and every portion thereof and shall apply to and bind any successors-in-interest of Owner for a minimum period of 55 years from the date on which the City issues the Certificate of Occupancy for the Project. The HA shall be signed and completed by both the City and the Applicant prior to issuance of a Building Permit.

33.Prior to the issuance of a grading permit, the Applicant shall submit a plan for the design and operation of the automatic access gate proposed on the primary vehicular access located at 73255 Country Club Drive (Assessor’s Parcel Number 622-370-013). The design must provide access to residents of the apartment development, and provide sufficient vehicular turnaround area subject to review by the City Engineer and approval by Director of Development Services. The applicant shall provide proof of approval from the property owner(s) and Riverside County Fire Marshal

34.The Applicant and/or any successor in interest shall comply with all applicable local, state, and federal laws and regulations.

35.A copy of the herein-listed Conditions of Approval shall be included in the construction documentation package for the Project, which shall be continuously maintained on-site during Project construction.

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12 36.All exterior signage shall comply with Chapter 25.56 of the PDMC.

37.Prior to any work within the public right-of-way, the Applicant shall obtain an encroachment permit from the City’s Public Works Department.

38.All southern-facing windows, located on the second floor of the southernmost elevation of the building shall be privacy windows. Said privacy windows shall be designed to obscure views through the glass by window treatment including, but not limited to frosted glass, patterned glass, or other acceptable method which visually obstructs views through the glass. The use of external window treatments, such as an applied film or self-adhesive material to alter light transmission through the window should not be used. Final construction plans shall provide sufficient information to demonstrate compliance with this condition of approval and shall be subject to approval by the Development Services Department.

LAND DEVELOPMENT DIVISION
General

39.The following plans are hereby referenced: Site & Conceptual Grading Plan, prepared by Egan Civil, Inc.; dated May 8, 2024.

40.It is assumed that easements shown on the preliminary grading exhibit are shown correctly and include all the easements that encumber the subject property. A current preliminary title report for the site will be required to be submitted during technical plan review. The Applicant shall secure approval from all, if any, easement holders for all grading and improvements, which are proposed over the respective easement or provide evidence that the easement has been relocated, quitclaimed, vacated, abandoned, easement holder cannot be found, or is otherwise of no effect. Should such approvals or alternate actions regarding the easements not be provided and approved by the City, the Applicant may be required to amend or revise the proposed site configuration as may be necessary.

41.It is understood that the conceptual exhibits correctly show acceptable centerline elevations, all existing easements, traveled ways, and drainage courses with appropriate flows. If final design requires that the Applicant amend or revise these exhibits it must have approval by the City Engineer.

Prior to Permit Issuance

42.Prior to issuance of a grading permit for the development, the Applicant shall pay all appropriate signalization fees in accordance with the City’s Resolution No. 79- 17 and 79-55.

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13 43.Prior to issuance of a grading permit, the Applicant shall pay all appropriate drainage fees in accordance with the City’s Municipal Code Section 26.49 and Palm Desert Ordinance No. 653.

44.Prior to issuance of a grading permit, the Applicant shall pay all appropriate park fees in accordance with the City’s Municipal Code Section 26.48.060.

45.The Applicant shall comply with Palm Desert Ordinance No. 843, Section 24.20 Stormwater Management and Discharge Ordinance.

46.All utility extensions within the site shall be placed underground unless otherwise specified or allowed by the respective utility purveyor.

47.Prior to issuance of a grading permit for the site, the applicant shall provide an executed access easement to the City.

48.Prior to issuance of a grading permit, the Applicant shall prepare a final grading plan for the site. No grading or other improvements shall be permitted until a final grading plan has been approved by the City Engineer. Grading plans and all grading shall conform to the approved Conceptual Grading Plan, the California Building Code, PDMC Title 27 Grading, and all other relevant laws, rules, and regulations governing grading in the City of Palm Desert. Final plans shall show and identify all proposed onsite improvements in accordance with the approved preliminary site plan exhibit.
a. The grading plan shall provide for acceptance and proper discharge of all off-site drainage flowing through the site. Should the quantities exceed the street capacity, the Applicant shall provide adequate drainage facilities and/or appropriate easements as approved by the City Engineer. b. A cross lot drainage agreement or drainage easement may be necessary if not currently in place. Final grading plans shall show record information on plans.

49.Prior to or concurrent with the precise grading plans, the Applicant shall provide a Pedestrian Accessibility Route Plan generally aligned with path shown in referenced conceptual exhibit. The plan shall clearly label and indicate the path location (running slope and cross slopes) for required accessible path of travel from building entrance to public pedestrian infrastructure. Facilities shall be designed in compliance with the accessibility standards in the California Building Code (current) and Americans with Disability Act (ADA) regulations. a. Construction of the path shown on referenced conceptual exhibit requires approval of adjacent property owner for construction operations and access easement/agreement; prior to grading permit issuance the applicant shall secure the required consents and agreements. The ultimate alignment and DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1245
PLANNING COMMISSION RESOLUTION NO. 2868
14 width of the easement shall be reviewed and approved by the City.

Additionally, the path seems to be proposed within other existing easements; applicant shall secure the appropriate authorizations prior to permit issuance for the work.
b. All private improvements shall be kept within private property. Non-standard encroachments into proposed public right-of-way will not be permitted, unless clearly identified on these conditions of approval.

50.Prior to approval of the grading plan, the Applicant shall prepare a detailed final hydrology and hydraulics report for approval of the City Engineer. The report shall encompass the entire project area and comply with all relevant laws, rules, and regulations governing the City of Palm Desert.
a. Site is required to handle the first flush for a 100-year, 24-hour event. Final report shall show the site is designed to meet requirement. b. Design shall incorporate emergency overflow outlet in the event the drainage improvements exceed full capacity.
c. Applicant is required to verify existing infrastructure is sized to handle additional flows coming from the proposed development.
d. The conceptual report shows intent to drain into existing inlet west of the proposed driveway to later discharge into the City-owned storm drain along the west side of the parcel. Applicant needs to verify maintenance responsibility of the existing infrastructure, drainage into private inlet will require coordination and written authorization for new discharge. Proof of ownership and/or ownership consent will be required prior to approval of final report.

51.Prior to approval of the grading plan, the Applicant shall prepare a final Water Quality Management Plan (WQMP) for approval of the City Engineer. a. Low Impact Development (“LID”) Best Management Practices (“BMPs”) shall be designed in accordance with the Riverside County Whitewater River Region Stormwater Quality Best Management Practice Design Handbook for Low Impact Development, dated June 2014. Sizing of the proposed underground chambers will be verified during final report review, grading plans shall clearly identify emergency overflow outlet and runoff mitigation for system failure.
b. All post-construction BMPs shall be designed based on the City of Palm Desert’s maximum infiltration criteria of 1 inch/hour.

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PLANNING COMMISSION RESOLUTION NO. 2868
15 c. Any onsite and offsite BMPs shall be designed and sized per the findings of the Final Geotechnical Report and Final WQMP. Any changes to the proposed BMP sizing, design, and type; and impacts to the referenced exhibits, may require additional approvals.
d. Prior to the issuance of a grading permit, the Applicant shall submit a signed and notarized WQMP Operations and Maintenance Agreement to the City.

The agreement shall include provisions for the maintenance and operation of all onsite water quality BMP facilities by the property owner.

52.All drainage and storm drain improvements shall be designed per PDMC Title 24, Riverside County Flood Control and Water Conservation District’s standards for the Drainage Element of the Palm Desert General Plan, and all other relevant laws, rules, and regulations governing grading in the City of Palm Desert.

53.Prior to approval of the grading plans, the Applicant shall provide the City Engineer with evidence that a Notice of Intent (NOI) has been filed with the State Water Resources Control Board. Such Evidence shall consist of a copy of the NOI stamped by the State Water Resources Control Board or the Regional Water Quality Control Board, or a letter from either agency stating that the NOI has been filed and their WDID number is depicted on the grading plan before approval.

54.Prior to the issuance of a grading permit, the Applicant shall submit a PM10 application for review and approval. The Applicant shall comply with all provisions of PDMC Section 24.12 regarding Fugitive Dust Control.

55.Where grading involves import or export, the Applicant shall obtain relevant permits, from the Public Works Department where the material is coming from or going to, including import/export quantities and hauling route.

56.Prior to issuance of grading permit and in compliance with the City of Palm Desert Municipal Code Chapter 27.24, the Applicant shall enter into an agreement and post financial security guarantee for all grading work related to this project.

57.Prior to issuance of grading permit, the Applicant shall submit for review and approval of the City Engineer a final Geotechnical Report that includes projectspecific recommendations.

58.Prior to grading permit, the Applicant shall identify and obtain approval for a secondary access to the site. Secondary access shall be provided in a location and form consistent with Fire Department requirements and approved by the City Engineer. Acquiring the necessary permission(s), if any, from impacted private ownership(s) will be the sole responsibility of the applicant and proof shall be presented to the City prior to the release of permits as noted in the approval documents for the project.

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16 59.Prior to the building certificate of occupancy, the Applicant shall field verify that all BMPs are designed, constructed, and functional in accordance with the approved WQMP. BMPs shall be inspected by City staff.

60.Upon completion of grading work, the Project’s Engineer of Record shall certify to the completion of grading in substantial conformance with the approved grading plans and the recommendations of the geotechnical report approved for this Project.

61.Improvements shown on the conceptual exhibit are subject to these conditions of approval and the Applicant providing adequate provisions for continued and perpetual their maintenance by the owner. Improvements to be maintained must include, but are not limited to, common areas, gates, parking and drive aisles pavement and surfaces, onsite BMPs, and drainage infrastructure.

BUILDING AND SAFETY DIVISION

62.Prior to the building certificate of occupancy, the Applicant is responsible for the completion of construction of all improvements for which plans are required.

63.This project shall comply with the latest adopted edition of the following codes:
a. California Building Code and its appendices and standards. b. California Residential Code and its appendices and standards. c. California Plumbing Code and its appendices and standards. d. California Mechanical Code and its appendices and standards. e. California Electrical Code.
f. California Energy Code.
g. California Green Building Standards Code.
h. Title 24, California Code of Regulations.
i. California Fire Code and its appendices and standards.

64.The Applicant shall coordinate directly with:

Riverside County Fire Marshal’s Office
CAL FIRE/Riverside County Fire Department
Main: (760) 863-8886
77933 Las Montañas Road, Suite 201
Palm Desert, CA 92211

65.All trash enclosures are required to be accessible. Provide an accessible path of travel to the trash enclosure. Trash enclosures shall comply with the minimum requirements established by Section 8.12 of the PDMC.

66.All contractors and subcontractors shall have a current City of Palm Desert Business License before permit issuance per PDMC, Title 5.

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17 67.All contractors and/or owner-builders must submit a valid Certificate of Workers’ Compensation Insurance coverage before the issuance of a building permit per California Labor Code, Section 3700.

68.Address numerals shall comply with Palm Desert Ordinance No. 1351 (PDMC Section 15.28). Compliance with Ordinance 1351 regarding street address location, dimension, a stroke of line, distance from the street, height from grade, height from the street, etc., shall be shown on all architectural building elevations in detail. Any possible obstructions, shadows, lighting, landscaping, backgrounds, or other reasons that may render the building address unreadable shall be addressed during the plan review process. The Applicant may request a copy of Ordinance 1351 or PDMC Section 15.28 from the Building and Safety Division counter staff.

RIVERSIDE COUNTY OFFICE OF THE FIRE MARSHAL

69.Fire Protection Water Supplies/Fire Flow - Minimum fire flow for the construction of all buildings is required per CFC Appendix B. Prior to building permit issuance for new construction, the applicant shall provide documentation to show there exists a water system capable of delivering the required fire flow. Specific design features may increase or decrease the required fire flow. a. Will Serve Letters from the responsible water purveyor are required prior to a map recordation.

70.Fire Protection Water Supplies/Hydrants - The minimum number of fire hydrants required, as well as the location and spacing of fire hydrants, shall comply with CFC Appendix C and NFPA 24. Fire hydrants shall be located no more than 400 feet from all portions of the exterior of the building along an approved route on a fire apparatus access road, unless otherwise approved by the fire department. In areas where new water mains are extended along streets and hydrants are not needed for protection of structures, standard fire hydrants shall be provided at spacing not to exceed 1,000 feet along streets for transportation hazards. Fire hydrants shall be at least 40 feet from the building it is serving. A fire hydrant shall be located within 20 to 100 feet of the fire department connection for buildings protected with a fire sprinkler system. The size and number of outlets required for the approved fire hydrants are 4” x 2 ½” x 2 ½” (super hydrant). Reference CFC as amended and NFPA 24.

71.Maintain Fire Department Access - Fire apparatus access roads shall be provided to within 150 feet of all exterior portions of buildings, unless otherwise approved by the Fire Department. Fire apparatus access roads shall have an unobstructed width of not less than 24 feet. Dead-end fire apparatus access roads more than 150 feet shall be provided with an approved tum around. The minimum required turning radius of a fire apparatus access road is 38 feet outside radius and 14 feet DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1249
PLANNING COMMISSION RESOLUTION NO. 2868
18 inside radius. The construction of the fire apparatus access roads shall be all weather and capable of sustaining 75,000 lbs. Unless otherwise approved, the grade of a fire apparatus access road shall not exceed 16 percent and the cross slope shall not exceed 2.5 percent. The angles of approach and departure for fire apparatus access roads shall be a maximum of 6 percent grade change for 25 feet of approach/departure. Reference CFC as amended and Riverside County Fire Department Standards.
a. Fire Lane marking: Identification and marking of fire lanes, including curb details and signage, shall comply with all Riverside County Fire Department Standards.

72.Fire Department Access Turn Around – On-parcel dead-end fire apparatus access roads exceeding 150 feet in length shall provide a bulb turnaround at the terminus measuring a minimum of 38 feet outside radius and 14 feet inside radius. Parallel parking around the perimeter of the bulb is acceptable provided the bulb outside turning radius is increased by 8 feet. In-lieu of a bulb, a hammerhead type turnaround is acceptable where the top of the “T” dimension is 120 feet with the stem in the center. Additional turnaround designs may be acceptable as approved by the Fire Department. Reference CFC as amended and Riverside County Fire Department Policies and Standards.

73.Secondary Access – Unless otherwise approved by the Fire Department, dead end fire apparatus access roads shall not exceed 1,320 feet. Secondary egress/access fire apparatus access roads shall provide independent egress/access from/to the area or as otherwise approved by the Fire Department. Secondary egress/access fire apparatus access roads shall be as remote as possible from the primary fire apparatus access road to reduce the possibility that both routes will be obstructed by a single emergency. Additional fire apparatus access roads based on the potential for impairment by vehicle congestion, condition of terrain, climatic conditions, anticipated magnitude of a potential incident, or other factors that could limit access may be required by the Fire Department. Reference CFC as amended and Riverside County Fire Department Policies and Standards.

74.Fire Department Building Construction Plan Review - Submittal of construction plans to the Fire Department will be required. Final fire and life safety conditions will be addressed when the Fire Department reviews the plans. These conditions will be based on California Fire Code, California Building Code (CBC), and related codes/standards adopted at the time of construction plan submittal. Reference CFC as amended.

75.Residential Fire Sprinklers: Residential fire sprinklers are required in all one and two-family dwellings per the California Residential Code (CRC). Plans must be DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1250
PLANNING COMMISSION RESOLUTION NO. 2868
19 submitted to the Office of the Fire Marshal for review and be approved prior to installation. Reference CRC.

76.Fire Alarm and Detection System - A water flow monitoring system and/or fire alarm system may be required as determined at time of building construction plan review. Reference CFC as amended.

77.Fire and Life Safety Requirements - Final fire and life safety conditions will be addressed when the Fire Department reviews any subsequent submittals. These conditions will be based on California Fire Code (CFC), California Building Code (CBC), and related codes/standards adopted and amended at the time of construction plan submittal.

78.Phased Construction Access and Water Supply: If construction is phased, an approved phasing plan shall be approved by the Fire Department. Each phase shall provide approved access and water supply for fire protection prior to any construction. Reference CFC as amended.

79.Traffic Calming Devices - Requests for installation of traffic calming designs/devices on fire apparatus access roads shall be submitted and approved by the Fire Code Official. Reference CFC as amended.

80.Unlimited Area Building - Based upon the building construction type and requirements of the California Building Code (CBC), 60 feet of open space (with some reductions permitted) may be required around the building. Consult with your architect for additional information. Reference CBC.

81.Gate Access - All electronically operated gates shall be provided with Knox key switches and automatic sensors for access. These gates shall be provided with access to gate equipment or another method to open the gate if there is a power failure. (Manual gates shall not be locked unless a Knox padlock or Knox Box containing the key to the lock is installed in an approved location on the approach side of the gate). A pedestrian gate, if used to provide access, shall be a minimum 3 feet wide and provided with a Knox Box/Padlock if locked. Reference CFC as amended.

82.Fire Department Access Doors – If high piled storage will be utilized in the building, Fire Department Access Doors may be required every 150 feet along all portions of the interior of the building that are along the fire apparatus access road.

Reference CFC as amended.

83.Water Plans - If fire hydrants are required to be installed, applicant/developer shall furnish the water system fire hydrant plans to the Fire Department for review and DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1251
PLANNING COMMISSION RESOLUTION NO. 2868
20 approval prior to building permit issuance. Plans shall be signed by a registered civil engineer, and shall confirm hydrant type, location, spacing, and minimum fire flow. Once plans are signed and approved by the local water authority, the originals shall be presented to the Fire Department for review and approval. Reference CFC as amended.

END OF CONDITIONS
DocuSign Envelope ID: 85C16C4C-8B5D-4017-BC51-90B41FB32471 1252

Palm Desert City CouncilJune 13, 2024

Palm Desert City Council
June 13, 2024