Agenda packet — Palm Springs City Council, January 14, 2026 (part 4 of 4)

Funding Commitment — Red Tail Multifamily Land Development Post Office Box 2743 • Palm Springs, California 92263-2743 terminated at the City’s sole and absolute discretion. Additionally, the Funding Commitment may be terminated if the Developer is unsuccessful after three (3) attempts to obtain Low-Income Housing Tax Credits or other required tax-exempt bond financing.

The City and Developer will also enter into a separate Regulatory Agreement containing covenants to protect the City’s financial interest in the Housing Project, including long-term affordability requirements, reporting obligations, and compliance with all applicable federal and State program rules. The Regulatory Agreement will be recorded in the Official Records of Riverside County.

Furthermore, on a date to be determined in the future, the City will, pursuant to Section 147(f) of the Internal Revenue Code, issue public notice and conduct a Tax Equity and Financial Responsibility Act (TEFRA) hearing, followed by City Council consideration and approval of qualified private-activity bonds to be issued by an outside issuer in connection with the Housing Project.

Should you have any questions or require additional information, please contact Jay Virata, Housing and Community Development Director, at 760-323-8228 or by email at [email protected].

Sincerely,
Scott C. Stiles, ICMA-CM
City Manager

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ATTACHMENT D:

Resolution Number 24654 – Affordable and
Multi-family Housing Incentive Program

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RESOLUTION NO. 24654

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

PALM SPRINGS, CALIFORNIA, ESTABLISHING THE

AFFORDABLE AND MULTI - FAMILY HOUSING INCENTIVE
PROGRAM," A PROGRAM TO ESTABLISH REDUCED

DEVELOPMENT IMPACT FEES AND DEVELOPER FEES

RELATED TO RESIDENTIAL PROJECTS CONSTRUCTING

NEW AFFORDABLE DWELLING UNITS, OR

CONSTRUCTING NEW MULTI - FAMILY RESIDENTIAL
UNITS.

WHEREAS, on June 19, 2019, the City Council of the City of Palm Springs, hereinafter " City Council"), directed staff to develop a policy to establish reduced development impact fees, application fees, and permit fees related to residential projects that construct new affordable residential dwelling units, and WHEREAS, development impact fees are monetary exactions established and imposed according to various sections of the Palm Springs Municipal Code and the California Government Code, and collected as fees at rates established by Resolution to finance the design, construction, installation, and acquisition of public infrastructure or to recover the costs of adding capacity in existing public infrastructure; and WHEREAS, the City has established the following development impact fees applicable to residential projects: a Drainage Fee to implement the City' s Master Plan of Drainage; the Public Art Fee to establish public art throughout the City; the Park Fee in accordance with Ordinance No. 1632 pursuant to the Quimby Act; and the Sewer Connection Fee, ( the " Development Impact Fees"); and
WHEREAS, developer fees are specific fees imposed on certain applications or permits associated with the Building, Engineering, Fire, and Planning Services Departments ( the " Developer Fees"), established and imposed according to various sections of the Palm Springs Municipal Code and the California Government Code, and collected as fees at rates established by Resolution to adequately recover the City' s costs to provide services in those Departments; and
WHEREAS, funding for the construction of new affordable dwelling units has significantly decreased since the state of California' s decision to completely dissolve and eliminate all of the Redevelopment Agencies existing throughout the state, including the City of Palm Springs Redevelopment Agency, and
WHEREAS, production of new affordable dwelling units has stalled due to increased construction costs and an overall decline in Federal and State funding for affordable housing; and

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WHEREAS, on March 6, 2019, the City Council adopted Ordinance No. 1981, as a means of creating Accessory Dwelling Units (" ADUs") in accordance with California Government Code ( CGC) Section 65852. 2, recognizing ADUs as an important source of housing that contributes to the character and diversity of housing opportunities in the City, and as providing workforce housing, housing for family members, students, elderly, in - home health care providers, the disabled, and others; and WHEREAS, Section 93. 23. 14( D)( 4)( a) of the Palm Springs Zoning Code adopted by Ordinance No. 1981 set forth a requirement that the owner of an ADU may live within the primary dwelling unit or the ADU, and may rent the other unit, provided rentals shall be for periods of twenty-eight ( 28) days or more, or may rent both the primary dwelling unit and ADU concurrently for periods of twenty- eight ( 28) days or more; and WHEREAS, in accordance with Section 93. 23. 14( D)( 4)( a) of the Palm Springs Zoning Code, new ADUs may not be constructed with the intent purpose of being operated as a " Vacation Rental" as that term is defined in and pursuant to Chapter 5. 25 of the Palm Springs Municipal Code; and
WHEREAS, the City Council' s adoption of Ordinance No. 1981 was in compliance with the State' s mandate regarding ADUs wet forth in CGC Sections 65852. 1 and 65852. 2, as a response to the State' s severe housing crisis, with the intention of providing for the creation of more ADUs; and
WHEREAS, payment of Development Impact Fees and Developer Fees constitutes a barrier for the construction of affordable dwelling units and ADUs; and WHEREAS, the City Council desires to establish a policy of incentivizing the construction of new affordable dwelling units, multiple - unit and ADUs through the establishment of lower Development Impact Fees and/or Developer Fees, as a way of addressing the City' s and State' s housing crisis; and WHEREAS, nothing herein constitutes the City' s approval of any applications, development project entitlements and/ or permits, and such, to the extent required in the future, are subject to and contingent upon City Council approval following, to the extent applicable, environmental review in compliance with the California Environmental Quality Act (" CEQA").

THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES, DETERMINES AND APPROVES AF FOLLOWS:

SECTION 1. Factual Findings:

A. The true and correct recitals above are incorporated by this reference herein as the basis and foundation for the City' s adoption of this Resolution.

B. The City Council has determined that waiving or reducing certain Development Impact Fees and Developer Fees established by previous Resolutions for new residential

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projects that construct affordable and/ or multi -family residential dwelling units or ADUs would not significantly alter the City's ability to finance the design, construction, installation, and acquisition of public infrastructure or significantly impact existing finance plans.

C. The establishment of lower Development Impact Fees and Developer Fees to incentivize construction of new affordable and/ or multi -family residential dwelling units and ADUs is consistent with the City of Palm Springs General Plan Housing Element, in furtherance of:

Goal HS1: Facilitate a broad range of housing types, prices, and opportunities to address current and future housing needs; and
Action HS1. 3: Continue to Offer Financial Incentives. Whereas the City of Palm Springs has designated sufficient vacant land to support the production of housing affordable to all economic segments of the community, affordable housing typically requires publicly and privately funded financial assistance to make projects feasible.

To that end, the City grants financial incentives ( e. g., fee waivers for parks), to support the production of affordable housing to be built during the present housing element planning period. The continuation of financial incentives will further City housing goals. 5-Year Objectives:

Continue to approve fee reductions and waivers, General funds, and make available other financial assistance, where possible, for extremely low, very low and low income housing projects.

Consider waiving the Multiple Species Habitat Conservation Plan fee ( e. g., fee to acquire sensitive habitat) for extremely low, very low and low income affordable housing projects.

Promote financial and development assistance programs to the building community on an annual basis.

D. The City Council has considered the effects of the reduced Development Impact Fees and Developer Fees to incentivize construction of new affordable and/ or multi -family residential dwelling units and ADUs with respect to the City' s and region' s housing needs.

SECTION 2. Affordable and Multi -Family Housing Incentive Program Established.
1) The City Council hereby establishes the " Affordable and Multi -Family Housing Incentive Program" applicable to new residential projects that construct affordable dwelling units for sale or rent, or for construction of new multi -family dwelling units for sale or rent, or construction of new ADUs, ( hereafter the " Program"). The Program shall provide relief from payment of applicable Development Impact Fees and/or Developer Fees, or deferral of the payment of these fees, as further specified herein.

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2) Purpose: The City Council hereby establishes the Program to encourage the construction of residential projects that will provide units with affordable rents or affordable housing costs for low and very low-income households in the City of Palm Springs. Additionally, the City Council establishes the Program to encourage construction of new housing affordable to middle income households. The City Council finds that payment of certain fees for residential development may create a barrier to such development and desires, by the adoption of this Resolution, to ease such barrier by eliminating the requirement to pay the full cost of certain fees, or to allow deferral of the payment of certain fees. To create further incentive to construct residential projects with affordable dwelling units, the City Council also desires to reduce certain Developer Fees or a portion of such fees as set forth in this Resolution.

The City Council finds that this Program is consistent with the policies and goals of the Housing Element of the General Plan of the City of Palm Springs, and necessary for the health and welfare of the City' s residents.
3) Definitions
a) " Affordability covenant" means a covenant restricting all low income and very lowincome units to remain affordable to low income and very low- income households for not less than 55 years for rental units and not less than 45 years for owner - occupied units.
b) " Affordable dwelling units" means a residential unit ( single family home or multifamily condominium unit) for sale, or a residential apartment unit for rent, that are restricted for occupancy by low- income and very low- income households. c) " Affordable housing cost" refers to the definition contained in California Health & Safety Code section 50052. 5, including, but not limited to, cost limits for low and very low- income households in owner -occupied housing, as further defined in Volume 25 of the California Code of Regulations.
d) " Affordable housing project" means new residential projects that include construction of affordable dwelling units for sale at an affordable housing cost, or for rent at an affordable rent.
e) " Affordable rent" refers to the definition contained in California Health & Safety Code section 50023, including but not limited to cost limits for low and very lowincome households in rental housing, as further defined in Volume 25 of the California Code of Regulations.
f) " Applicant" means the owner or owners of record of the real property who request a reduced fee amount pursuant to the Program.
g) " Area Median Income" means the median household income as provided in Section 50093( c) of the California Government Code, as it is currently enacted or hereinafter amended.

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h) " Developer Fees" refers to development processing and administrative fees including, but not limited to, application, processing, plan check and inspection fees required by code, ordinance, resolution or other law to be paid as a condition of, or prerequisite to, development of residential uses, as those codes, ordinances, resolutions or other laws may be amended from time to time. i) " Development Impact Fees" refers to city fees imposed for the purpose of defraying all or a portion of the cost of public facilities related to a development project as required by code, ordinance, resolution or other law to be paid as a condition of, or prerequisite to, development of residential uses, as those codes, ordinances, resolutions or other laws may be amended from time to time. Only Development Impact Fees imposed by the City are subject to this Program. All Development Impact Fees imposed by other entities or agencies are excluded from the Program, and shall be paid by the applicant in accordance with applicable statutes, resolutions, ordinances, and regulations.
j) " Director" means the Director of Planning Services, or his or her designee. k) " Fee Program Participation Agreement' refers to the agreement by and between the applicant and the City of Palm Springs that is required for approval of participation in this Program.
1) " Household" means one person living alone or two or more persons sharing residency whose income is considered for housing payments. m) " Inclusionary Unit' means a new multi -family residential condominium unit offered for purchase to middle -income households at a sales price according to requirements specified in the Program.
n) " Low-income households" refers to the definition contained in California Health & Safety Code section 50079. 5, including but not limited to an income limit of 80 percent of area median income, adjusted for family size and revised annually. o) " Middle -income households" refers to household whose income is between 120 percent and 160 percent of the Area Median Income, adjusted for household size. p) " Penalties" means an amount equal to one hundred dollars ($ 100) per unit per month computed from the date deferred fees are due and payable or the date units are required to be constructed.
q) " Very low-income households" refers to the definition contained in California Health Safety Code section 50105, including but not limited to an income limit of 50% of area median income, adjusted for family size and revised annually. 4) Affordable Housing Projects:

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Affordable housing projects shall be eligible for reduced Development Impact Fees and Developer Fees as follows:
a) For affordable housing projects proposing construction of 100% affordable dwelling units, the applicable Development Impact Fees and Developer Fees are hereby established at a rate that is reduced by 100%.
b) For affordable housing projects proposing construction of less than 100% affordable dwelling units, the applicable Development Impact Fees and Developer Fees are hereby established as follows:
i) 90% - 100% affordable dwelling units = reduced by 90% ii) 80% - 89% affordable dwelling units = reduced by 80% iii) 70% - 79% affordable dwelling units = reduced by 70% iv) 60% - 69% affordable dwelling units = reduced by 60% v) 50% - 59% affordable dwelling units = reduced by 50% vi) 40% - 49% affordable dwelling units = reduced by 40% vii) 30% - 39% affordable dwelling units = reduced by 30% viii) 20% - 29% affordable dwelling units = reduced by 20% ix) 10% - 19% affordable dwelling units = reduced by 10% x) 5% - 9% affordable dwelling units = reduced by 5%
xi) 1 % - 4% affordable dwelling units = reduced by 1 % c) An applicant proposing an affordable housing project may file a request with the Director at the time the applicant files applications for related land use entitlements or other approvals with the City. The request shall clearly identify the nature of the request, the type of affordable housing project, the number of units, and the requested reduction of applicable Development Impact Fees and Developer Fees pursuant to the Program.
d) As a condition of the City' s acceptance of an applicant' s land use entitlement applications, the applicant shall be required to enter into a Fee Program Participation Agreement in a legal form satisfactory to the City Attorney and approved by the City Manager. The Fee Program Participation Agreement shall:
i) Be site and project specific;
ii) Require applicant to enter into required affordability covenants for proposed affordable dwelling units as a condition of receiving the benefit of the Program pursuant to the Fee Program Participation Agreement.
iii) Allow for the deferral of payment of required Developer Fees and Development Impact Fees until, and immediately prior to, the City's issuance of a Certificate of Occupancy for the affordable dwelling units subject to the Fee Program Participation Agreement. If construction of the affordable

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dwelling units is phased, or consolidated into separate buildings, the payment of required Developer Fees and Development Impact Fees will be required at the time a final inspection and Certificate of Occupancy is requested by the applicant for each phase of the affordable housing project, or each building constructed with affordable dwelling units.
iv) Provide for reimbursement to the City of all applicable Developer Fee reductions provided by the Program if, following twenty- four ( 24) months from the City' s approval of all discretionary land use entitlements associated with the affordable housing project, the applicant fails to: ( 1) enter into required affordability covenants, or ( 2) obtain a building permit from the City to construct the affordable dwelling units. Extensions of time associated with land use entitlements granted by the City shall automatically extend the time limit required herein.
v) Provide for reimbursement to the City of a portion of applicable Developer Fees and/ or Development Impact Fees reduced by the Program if the applicant fails to construct the number or percentage of affordable units specified in the Fee Program Participation Agreement.
vi) Provide for the enforcement of the provisions of the Program; vii) Bind applicant' s successors in interest;
viii) Provide that the project applicant shall defend, indemnify and hold harmless the City and its officials and employees for any claim or action arising from the Agreement, including, without limitation, any claim or action regarding the applicability of prevailing wages; and
ix) Be recorded with the Riverside County Recorder' s Office. e) The applicant shall be responsible for any recording fees of the Fee Program Participation Agreement.
5) Multi -Family Apartment Projects:

Multi -family apartment projects not constructing affordable dwelling units shall be eligible for reduced Developer Fees and Development Impact Fees as follows:
a) An applicant constructing a multi -family apartment project with new apartment units for lease to the public at market rental rates shall be eligible for a 50% reduction of applicable Developer Fees and Development Impact Fees. b) As a condition of the City's acceptance of an applicant's land use entitlement or building permit applications, the applicant shall be required to enter into Fee Program Participation Agreement in a legal form satisfactory to the City Attorney and approved by the City Manager. The Fee Program Participation Agreement shall:
i) Be site and project specific;

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ii) Allow for the deferral of payment of required Developer Fees and Development Impact Fees until, and immediately prior to, the City' s issuance of a Certificate of Occupancy for the apartment units subject to the Fee Program Participation Agreement. If construction of apartment units is phased, or consolidated into separate buildings, the deferral of payment of required Developer Fees and Development Impact Fees will be required at the time a final inspection and Certificate of Occupancy is requested by the applicant for each phase of the multi -family apartment project, or each building constructed with apartment units.
iii) Provide for reimbursement to the City of all applicable Developer Fees reduced by the City pursuant to the Program if, following twenty- four ( 24) months from the City' s approval of all discretionary land use entitlements associated with the multi -family apartment project, the applicant fails to obtain a building permit from the City to construct the apartment units. Extensions of time associated with land use entitlements granted by the City shall automatically extend the time limit required herein.
iv) Provide for reimbursement to the City of a portion of applicable Developer Fees and Development Impact Fees reduced by the City pursuant to the Program if the applicant fails to construct the total number of apartment units specified in the Fee Program Participation Agreement.
v) Provide for reimbursement to the City of all applicable Developer Fees and Development Impact Fees reduced by the City pursuant to the Program if any or all of the apartment units are converted to another use, or cease to be made available for lease to the public;
vi) Bind applicant' s successors in interest;
vii) Provide that the project applicant shall defend, indemnify and hold harmless the City and its officials and employees for any claim or action arising from the Agreement, including, without limitation, any claim or action regarding the applicability of prevailing wages; and
viii) Be recorded with the Riverside County Recorder' s Office. c) The applicant shall be responsible for any recording fees of the Fee Program Participation Agreement.

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6) Accessory Dwelling Units (ADUs):

ADUs shall be eligible for reduced Developer Fees as follows:
a) The applicable Developer Fees for an ADU that is constructed for the purpose of providing a rental unit to a third party, at an affordable rent pursuant to an affordability covenant, is hereby established at a rate that is reduced by 100% of the otherwise applicable amount of the subject Developer Fee( s). b) The applicable Developer Fees for an ADU constructed for the purpose of providing a rental unit to a third party, at market rental rates, or for use by a member of the applicant' s family, is hereby established at a rate that is reduced by 50% of the otherwise applicable amount of the subject Developer Fee(s). c) As a condition of the City's acceptance of an applicant's land use entitlement or building permit applications, the applicant shall be required to enter into Fee Program Participation Agreement in a legal form satisfactory to the City Attorney and approved by the City Manager. When required, the Fee Program Participation Agreement shall require execution of an affordability covenant. 7) Multi -Family Residential Condominium Projects:

Multi -family residential condominium projects not constructing affordable dwelling units shall be eligible for reduced Developer Fees and Development Impact Fees as follows:
a) Developer Fees for new multi -family residential condominium projects where 100% of the units will be sold as Inclusionary Units are hereby established at a rate that is reduced by 100% of the otherwise applicable amount of such Developer Fee( s).
b) An applicant proposing a new residential condominium project where less than 100% of the units will be sold as Inclusionary Units shall be eligible for a reduction of applicable Developer Fees as follows:
i) 90% 100% Inclusionary Units = reduced by 90%
ii) 80% 89% Inclusionary Units = reduced by 80%
iii) 70% 79% Inclusionary Units = reduced by 70%
iv) 60% 69% Inclusionary Units = reduced by 60%
v) 50% 59% Inclusionary Units = reduced by 50%
vi) 40% 49% Inclusionary Units = reduced by 40%
vii) 30% 39% Inclusionary Units = reduced by 30%
viii) 20% 29% Inclusionary Units = reduced by 20%
ix) 10% 19% Inclusionary Units = reduced by 10%
x) 5% - 9% Inclusionary Units = reduced by 5%

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xi) 1 % - 4% Inclusionary Units = reduced by 1 %
c) Price limits established for Inclusionary Units: Inclusionary Units must be restricted to and sold at prices at which middle -income households can qualify for the purchase. Qualification shall be based on not more than 35% of median family income being applied to housing expenses (mortgage principal and interest, taxes, insurance, and assessments). The determination of an acceptable sales price shall be determined in accordance with the following methodology:

1. Determine Current Median Family Income
a) Obtain most recent Mean Household Income for a family (" MHI") for Riverside -Ontario -San Bernardino found in the Census ACS 1- Year Survey Survey") published by the U. S. Census Bureau ( or if such survey is no longer published, a comparable source). The Survey can currently be obtained using the following link:
https:// www. census. gov/ programs- surveys/ acs/
b) Increase the MHI by the change in the California Consumer Price Index CCPI") since the date of the Survey using information obtained from the State of California Department of Industrial Relations CCPI calculator for California, Urban Wage Earners and Clerical Workers ( or Riverside if available), currently found at:
https:// www. dir. ca. gov/ OPRL/ CAPricelndex. htm.

2. Determine Affordable Sales Price
a) Divide MHI by 12
b) Multiply result of (a) by 35%
c) Divide result of (b) by 0. 005 ( 0. 005 represents mortgage interest rate of 6%)

3. Determine Maximum Sales Price
The maximum home price for any residential unit proposed by the applicant cannot exceed 120% of the Affordable Condominium Price determined in Step 2.

Example:
2017 Survey = $ 76, 530
CCPI Change between December 2017 and June 2019 = 5. 8% MHI = $ 76, 530 x 1. 058 = $ 80, 969

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MHI / 12 = $ 80, 969 / 12 = $ 6, 747
Affordable Mortgage = $ 6, 747 x 35% _ $ 2, 362
Affordable Sales Price = $ 2, 362 / 0. 005 = $ 472, 319 Maximum Sales Price = $ 472, 319 x 120% _ $ 566, 783
The City Manager is authorized to modify the method of calculating price limits for Inclusionary Units, as may be required to update the effects of changing interest rates on home affordability. The City Manager shall publish any modification of this policy in an administrative regulation approved by the City Manager and filed with the City Clerk. Further, the City Council, in its sole discretion, may authorize participation in the Program for a multi -family residential condominium project with sales prices that exceed the maximum sales price determined above dependent upon other direct benefits provided to the community by the multi -family residential project, or if the applicant sets aside a specified amount of the condominium units as affordable dwelling units, as required by the City Council.
d) As a condition of the City' s acceptance of an applicant' s land use entitlement applications, the applicant shall be required to enter into Fee Program Participation Agreement in a legal form satisfactory to the City Attorney and approved by the City Manager. The Fee Program Participation Agreement shall:

Be site and project specific.
ii) Restrict the sales price for the proposed Inclusionary Units as a condition of receiving the benefit of the Program pursuant to the Fee Program Participation Agreement.
iii) Allow for the deferral of payment of required Developer Fees and Development Impact Fees until, and immediately prior to, the City' s issuance of a Certificate of Occupancy for the Inclusionary Units subject to the Fee Program Participation Agreement. If construction of Inclusionary Units is phased, or consolidated into separate buildings, the payment of required Developer Fees and Development Impact Fees will be required at the time a final inspection and Certificate of Occupancy is requested by the applicant for each phase of the multi -family residential condominium project, or each building constructed with Inclusionary Units.
iv) Provide for reimbursement to the City of all applicable Developer Fees reduced by the City pursuant to the Program if, following twenty- four ( 24) months from the City' s approval of all discretionary land use entitlements associated with the multi -family residential condominium project, the applicant fails to obtain a building permit from the City to construct the inclusionary units. Extensions of time associated with land use entitlements granted by the City shall automatically extend the time limit required herein.

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v) Provide for reimbursement to the City of a portion of applicable Developer Fees reduced by the City pursuant to the Program if the applicant fails to construct the number or percentage of Inclusionary Units specified in the Fee Program Participation Agreement.
vi) Provide for the enforcement of the provisions of the Program; vii) Bind applicant's successors in interest;
viii) Provide that the project applicant shall defend, indemnify and hold harmless the City and its officials and employees for any claim or action arising from the Agreement, including, without limitation, any claim or action regarding the applicability of prevailing wages; and
ix) Be recorded with the Riverside County Recorder' s Office. e) The applicant shall be responsible for any recording fees of the Fee Program Participation Agreement.

SECTION 3. Severability.

Each component of the fees and all portions of this Resolution are severable. Should any individual component of the fee or other provision of this Resolution be adjudicated to be invalid and unenforceable, the remaining provisions shall be and continue to be fully effective, and the fee shall be fully effective except as to that portion that has been judged to be invalid.

SECTION 4. Effective Date.

This Resolution will become effective immediately upon adoption and remain effective unless superseded by a subsequent resolution.

SECTION 5. CEQA.

Adoption of this Resolution is not considered a " Project" as defined by the California Environmental Quality Act ( CEQA). Pursuant to Section 15378( a), a " Project" means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Adoption of this Resolution establishes a policy to establish reduced City fees, and is considered exempt from CEQA pursuant to Section 15378( b), in that a Project" does not include: ( 5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.

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PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS 2" d DAY OF OCTOBER, 2019.

DAVID H. READY, ESQ

CITY MANAGER
ATTEST:

THONY M ,

CITY CLE K

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF PALM SPRINGS)
I, ANTHONY J. MEJIA, MMC, City Clerk of the City of Palm Springs, hereby certify that Resolution No. 24654 is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on the 2" d day of October, 2019,
by the following vote:

AYES: Councilmembers Holstege, Middleton, Roberts, Mayor Pro Tern Kors, and Mayor Moon
NOES: None
ABSENT: None
ABSTAIN: None
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this day ofyckobcf , NTHON

MEJ A, C CITY
CLEARK

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CITY COUNCIL STAFF REPORT
DATE: JANUARY 14, 2026 BUSINESS & LEGISLATIVE
SUBJECT: APPROVE THE REQUEST FOR FINANCIAL ASSISTANCE AND LOAN

COMMITMENT FOR DEVELOPMENT AND CONSTRUCTION OF A
PROJECT LOCATED AT McCARTHY ROAD AND SAN RAFAEL, A 110-

UNIT AFFORDABLE HOUSING PROJECT
FROM: Scott C. Stiles, City Manager
BY: Housing & Community Development
SUMMARY:

Pacific West Communities, Inc. (“PWC”) has submitted a proposal to develop a 100 percent affordable multifamily housing community on approximately five acres located at the northwest corner of McCarthy Road and San Rafael Drive (APNs 669-420-011, -012, and -014), immediately adjacent to the Palm Springs Navigation Center. The property is currently vacant and identified in the City’s Housing Element as a suitable site for affordable and supportive housing development.

The project, tentatively titled San Rafael Apartments, envisions the construction of approximately 115 affordable rental units serving low- and very low-income households.

The development will include a mix of one-, two-, and three-bedroom units, a leasing office, community clubhouse, fitness room, laundry facilities, pool, tot lot, dog park, and associated open-space amenities.

The proposed site is located adjacent to the City’s Navigation Center, creating opportunities for coordination related to housing placement, resident referrals, and service access. While the Project is not a service facility, proximity to the Navigation Center allows for collaboration with the City and service providers to support residents transitioning from homelessness into stable, permanent housing. The site design and management plan will emphasize clear boundaries, secure access, and ongoing communication to ensure compatibility with surrounding uses and to be a good neighbor within the area.

The Developer has requested financial assistance from the City to support land acquisition costs and applicable impact and developer fees to ensure project feasibility.

The Developer anticipates applying for 4 percent tax-exempt bond financing and Low-

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City Council Staff Report
January 14, 2026 -- Page 2
San Rafael Apartments Funding Commitment
Income Housing Tax Credits (LIHTC) and will leverage the City’s funding commitment to strengthen its competitiveness for these state and federal resources.

RECOMMENDATION:

1. Approve a funding commitment in the amount of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000) to Pacific West Communities, Inc. (“Developer”) to assist with acquisition of approximately five acres located at the northwest corner of McCarthy Road and San Rafael Drive for the development of a 100 percent affordable housing community.

2. Authorize the City Manager to structure applicable Development Impact Fees and Developer Fees as a City loan, not to exceed $2,500,000, subject to repayment from residual receipts and documented through separate loan and regulatory agreements, consistent with the Affordable and Multi-Family Housing Incentive Program.

3. Authorize the City Manager to execute all necessary loan documents and related agreements, subject to approval by the City Attorney, consistent with the terms described herein.

STAFF ANALYSIS:

The Developer requests a $2,250,000 loan from the City to assist with the purchase of land. The loan will accrue simple interest at 3 percent per annum, carry a 55-year affordability term, and be repaid from annual residual receipts, secured by a deed of trust on the property. The City anticipates making loan funds available for disbursement in the fourth quarter of calendar year 2026, contingent upon completion of project entitlements, execution of loan documents, and confirmation of all other project financing sources.

Disbursement would occur no earlier than October–December 2026, contingent upon verification of all financing sources and execution of loan agreements.

The proposed affordability program includes a total of 115 units, which will be affordable across multiple AMI levels, including units restricted at 30%, 50%, 60%, and 80% AMI.

The project meaningfully advances the City’s Housing Element goals by delivering affordability across multiple income levels, including a substantial number of very-lowincome units in proximity to the Navigation Center.

The Developer submitted a preliminary development budget totaling $52,921,660, including approximately $31.6 million in direct construction costs, $14.0 million in soft costs, and $3.95 million in financing costs. Land acquisition totals $2,250,000, which is the amount requested for City participation. These estimates are consistent with comparable 100% affordable multifamily projects of similar scale in California.

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City Council Staff Report
January 14, 2026 -- Page 3
San Rafael Apartments Funding Commitment
Project Schedule
Phase Milestone / Description Estimated Timing
Entitlement
Preparation
Developer submits formal entitlement
package (first full submittal)
Within 30 days of request
letter (June 2025)
Planning Review Staff review and Planning Commission
hearing
Mid-2026
Financing
Applications
4% Tax-Exempt Bonds + LIHTC
application cycle
Late 2026 – 2027
City Loan &
Agreement
Execution
Draft and execute Loan Agreement;
finalize Regulatory Agreement
Q4 2026 – 2027
(dependent on financing
awards)
Construction Start Groundbreaking after bond/TAX
CREDIT awards + building permit
issuance
Late 2027
Construction
Duration
Typical Pacific West multifamily timeline
(per comparable TPC projects)
18–22 months
Project Completion Certificate of Occupancy; lease-up
begins
2029
Full Stabilization Stabilized occupancy achieved 6–9 months after completion
The Developer has initiated a community engagement process, including two scheduled community meetings on December 16, 2025 and January 7, 2026, designed to introduce the project, gather neighborhood feedback, and review conceptual designs. Staff will continue to coordinate with the Developer to ensure the outreach process remains inclusive, transparent, and accessible to nearby residents and community stakeholders.

Pursuant to Resolution No. 24654, the project qualifies for the Affordable and Multi-Family Housing Incentive Program. The Developer has requested and staff recommends that applicable Development Impact Fees and Developer Fees be provided to the project in the form of a City loan, rather than waived outright. The fee loan would be repaid from residual receipts and documented through the loan agreement and regulatory agreement to protect the City’s financial interests.

Staff further recommends that City impact fees be lent to the project under the same residual-receipts repayment structure, consistent with past practice for affordable housing projects. Applicable Development Impact Fees and Developer Fees will be structured as a City fee loan, accruing simple interest at three percent (3%) per annum and repaid from available residual receipts over a term consistent with the Project’s long-term affordability restrictions. The fee loan will be secured by a deed of trust and regulatory agreement, and no General Fund impact is anticipated.

The City’s land acquisition loan shall be senior in priority to the City’s fee loan. The City’s loan for Development Impact Fees and Developer Fees shall be subordinate to the acquisition loan and shall be evidenced by separate loan documents. The relative priority

B – Page 643 of 696
City Council Staff Report
January 14, 2026 -- Page 4
San Rafael Apartments Funding Commitment
and subordination of the City loans shall be further documented in the respective loan agreements and recorded instruments, in a form acceptable to the City Manager and City Attorney.

ENVIRONMENTAL ASSESSMENT:

The proposed City action is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15192–15194, which provide a statutory exemption for affordable housing projects meeting specified criteria. The Project qualifies for this exemption because it is a 100 percent affordable housing development located on an infill site and complies with applicable density, location, and affordability requirements. As a statutory exemption, the Project is not subject to further CEQA review or environmental analysis.

ALIGNMENT WITH STRATEGIC PLANNING:

This action would further City Council’s Strategic Plan Broad Goal of Housing, specifically the Enhanced Area of Focus of Affordable Housing.

FISCAL IMPACT:

Approval of this item will commit $2,250,000 in City affordable housing funds for land acquisition. Applicable Development Impact Fees and Developer Fees eligible under Resolution No. 24654 will be provided to the project in the form of a City fee loan.

Repayment will be subject to available residual receipts, and no General Fund impact is anticipated.

REVIEWED BY:

Department Director: Jay Virata
Director of Finance & Treasury: Kristopher J. Mooney
Assistant City Manager: Flinn Fagg
City Manager: Scott Stiles
ATTACHMENTS:

A. Project Conceptual Design Submittal (Edited)
B. Developer Request Letter (June 24, 2025)
C. Funding Commitment Letter (January 2026)
D. Resolution Number 24654 – Affordable and Multi-Family Housing Incentive Program

B – Page 644 of 696
ATTACHMENT A:

Project Conceptual Design Submittal
(Edited)

B – Page 645 of 696

SAN RAFAEL APARTMENTS DESIGN REVIEW PALM SPRINGS, CA

B – Page 646 of 696
JOB NO.: DATE: 2025-0061 04-04-2025 A-1 SHEET INDEX ARCHITECTURE APPLICANT/OWNER: PACIFIC WEST COMMUNITIES Concact: Darren Berberian [email protected] RESIDENTIAL ARCHITECT: AOContact: Kai Lau [email protected] CIVIL ENGINEER: ATLAS CIVIL DESIGN Contact: Shannon Davis [email protected] PROJECT TEAM: SITE LANDSCAPE ARCHITECT: IDLA, INC. Contact: Tom Phelps [email protected] W SAN RAFAEL DR N PALM CANYON DR TRAMWAY RD1 McCARTHY RD ROSA PARKS RD INDIAN CANYON DR W GATEWAY DR W RADIO RD N. DE ANZA RD ZANJERO RD CIVIL LANDSCAPE PLANT SCHEDULE SAN RAFAEL APARTMENTS PALM SPRINGS, CA

B – Page 647 of 696
JOB NO.: DATE: 2025-0061 04-04-2025 A-2 the apartment buildings. PROJECT NARRATIVE SAN RAFAEL APARTMENTS PALM SPRINGS, CA

B – Page 648 of 696
JOB NO.: DATE: 2025-0061 04-04-2025 A-4 CONCEPTUAL RENDERING SAN RAFAEL APARTMENTS PALM SPRINGS, CA

B – Page 649 of 696
JOB NO.: DATE: 2025-0061 04-04-2025 A-6 PROJECT SUMMARY SAN RAFAEL APARTMENTS PALM SPRINGS, CA

B – Page 650 of 696
A-7 SCALE: JOB NO.: DATE: SAN RAFAEL APARTMENTS PALM SPRINGS, CA SAN RAFAEL DR. OFFICE 11'-0" x 10'-2" CLUBHOUSE 46'-11" x 30'-0" 20-0" x 13'-0" LEASING 25'-2" x 15'-7" BREAK RM. 11'-10" x 10'-2" LAUNDRY (PROVIDED FOR 116 UNITS) PBREEZEWAY OOL EQU PI . FIRE PUMP RM. GENERATOR MPOE JANITOR MAINT. FITNESS 24'-0" x 35'-0" STOR. 7'-8" x 13'-5" MW USPS
4CADD-10 USPS4CADD-10 USPS4CADD-10 USPS4CADD-10 USPS4CADD-10 USPS4CADD-10

AD D-O N

40.5" x 25" x 75. 75" AD D-O N40.5" x 25" x 75. 75" AD D-O N40.5" x 25" x 75. 75" AD D-O N40.5" x 25" x 75. 75" AD D-O N40.5" x 25" x 75. 75" USPS 4CADD-10 USPS 4CADD-10 USPS 4CADD-10 USPS 4CADD-10 USPS 4CADD-10 MAIL ELECT. . DR YHTRACCM DRAINAGE CHANNEL EVA ORGANIC B IN

ORGANIC B IN USPS PROJECT ENTRY FIR E RISER
UP
1 8R 1 2A3 STORY UP
1 8R 1 AR 3 STORY
FIR E RISER UP 1 8R 2 5A3 STORY UP 1 8R 1 A3R 3 STORYFIR E RISER UP 1 8R 24B 2 TO 3 STORY MANAGER'S UNIT POOL COURT TOT LOT DOG PARK MONUMENT SIGN 0 30 60 90 120 CONCEPTUAL SITE PLAN LEGENDLEASING & AMENITIES RESIDENTIAL PROPERTY LINE SETBACK TRANSFORMER TRASH ENCLOSURE 2025-0061 04-04-2025

B – Page 651 of 696
0 8 16 24 32 A-11 SCALE: JOB NO.: DATE: SAN RAFAEL APARTMENTS PALM SPRINGS, CA 2025-0061 04-04-2025 LEGEND A1A1 B1 C1 A1A1 B1 C1 FLAT FLAT FLAT ROOF RESIDENTIAL

B – Page 652 of 696
A-12 SCALE: JOB NO.: DATE: SAN RAFAEL APARTMENTS PALM SPRINGS, CA 2025-0061 04-04-2025 0 8 16 24 32 A-12 SAN RAFAEL APARTMENTS

B – Page 653 of 696
ATTACHMENT B:

Developer Request Letter

B – Page 654 of 696
6/24/25
Ariel Tolefree-Williams & Jay Virata
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, CA. 92262
RE: Affordable Housing Project being proposed at McCarthy and San Rafael, Palm Springs, Ca. Funding Request – +/- 5 Acres APN(s) 669-420-011, 012 & 014 Dear Ariel and Jay,
As you are aware my firm, Pacific West Communities, Inc., has been working on the above-mentioned project for the last 5 months. To date we have completed a pre-application with the City Planning Department. Design is ongoing and we are working on finalizing plans for our first formal submittal to the City within the next 30 days. As discussed early on in our conversations, this development will need funding from the City to be competitive in the 4% tax exempt bond funding cycle. To date we envision around 110-120 units on this site. In order for us to proceed we respectfully request $2,250,000 as a loan to purchase the land. The loan will have a term of 55 years at 3% interest and will be paid back out of the project’s residual receipts. We also request that the City impact fees are lent to the project with the same structure. We are happy to provide the City with anything you need to evaluate our request. Please contact me to further discuss (949)599-6069. We look forward to working with you.

Thank you,
Darren Berberian

B – Page 655 of 696
McCarthy & San Rafael
A 115-Unit Affordable Housing Community
Palm Springs, CA
Financial Pro Forma
September 7, 2025
Prepared By:

Caleb Roope
[email protected]
Pacific West Communities, Inc.
430 East State Street, Suite 100
Eagle, ID 83616
208.461.0022 x 3015

B – Page 656 of 696
9/7/2025

DEVELOPMENT BUDGET
McCarthy & San Rafael
Palm Springs, CA
Project Cost Per Cost Per Tax Credit
Costs Unit Res. Sq. Ft. Eligible Basis
Total Land Costs $ 2,250,000 $ 19,565 $ 24.82 XXXXXXXXXX Total Building Acquisition Costs $ - $ - - $ - $
Construction Costs
Off-Site Work $ - $ - $ - $ -
Commercial Space $ - $ - $ - XXXXXXXXXX
On Site Work $ 3,450,000 $ 30,000 $ 38.06 $ 3,450,000
Structures $ 22,840,240 $ 198,611 $ 251.94 $ 22,840,240 General Requirements $ 1,577,414 $ 13,717 $ 17.40 $ 1,577,414 Contractor Overhead $ 557,353 $ 4,847 $ 6.15 $ 557,353
Contractor Profit $ 1,672,059 $ 14,540 $ 18.44 $ 1,672,059 Construction Contingency $ 1,510,000 $ 13,130 $ 16.66 $ 1,510,000 Total Construction Costs 31,607,066 $ 274,844 $ 348.65 $ 31,607,066 $ Financing Costs
Construction Loan Interest - Series A $ 900,000 $ 7,826 $ 9.93 $ 900,000 Construction Loan Fee - Series A $ 112,500 $ 978 $ 1.24 $ 112,500 Construction Lender Costs (Legal, Etc.) $ 100,000 $ 870 $ 1.10 $ 100,000 Bond Issuer / Trustee Fees & Costs $ 100,000 $ 870 $ 1.10 $ 100,000 Permanent Loan Fees $ 74,000 $ 643 $ 0.82 XXXXXXXXXX
Permanent Loan Costs $ 50,000 $ 435 $ 0.55 XXXXXXXXXX
Tax Credit Fees $ 74,310 $ 646 $ 0.82 XXXXXXXXXX
Bond Counsel, Financial Advisor, Etc. $ 80,000 $ 696 $ 0.88 XXXXXXXXXX Series B & Taxable Interest & Fees $ 2,460,000 $ 21,391 $ 27.14 $ 2,460,000 Total Financing Costs 3,950,810 $ 34,355 $ 43.58 $ 3,672,500 $ Soft Costs
Architectural $ 750,000 $ 6,522 $ 8.27 $ 750,000
Engineering/Surveying/Environmental $ 400,000 $ 3,478 $ 4.41 $ 400,000 Taxes During Construction $ 80,000 $ 696 $ 0.88 $ 80,000 Insurance $ 474,100 $ 4,123 $ 5.23 $ 474,100
Title & Recording $ 80,000 $ 696 $ 0.88 $ 80,000
Borrower Attorney $ 80,000 $ 696 $ 0.88 $ 80,000
Appraisal $ 15,000 $ 130 $ 0.17 $ 15,000
Local Tap, Building Permit, & Impact Fees $ 4,625,000 $ 40,217 $ 51.02 $ 4,625,000 Marketing & Lease-Up $ 146,310 $ 1,272 $ 1.61 XXXXXXXXXX Relocation Costs $ - $ - $ - XXXXXXXXXX
Furnishings $ 50,000 $ 435 $ 0.55 $ 50,000
Cost Certification $ 15,000 $ 130 $ 0.17 $ 15,000
Market Study $ 10,000 $ 87 $ 0.11 $ 10,000
Soft Cost Contingency $ 900,000 $ 7,826 $ 9.93 $ 900,000 Developer Overhead & Fees $ 6,413,799 $ 55,772 $ 70.75 $ 6,413,799 Consultant Fee $ - $ - $ - $ -
Total Soft Costs 14,039,209 $ 122,080 $ 154.86 $ 13,892,899 $ Post Construction Interest & Reserves
Post Construction Interest - Series A $ 650,000 $ 5,652 $ 7.17 XXXXXXXXXX Post Construction Interest - Series B $ - $ - $ - XXXXXXXXXX Operating Reserve $ 424,575 $ 3,692 $ 4.68 XXXXXXXXXX
Total Post Construction Interest & Reserves 1,074,575 $ 9,344 $ 11.85 $ XXXXXXXXXX Totals $ 52,921,660 $ 460,188 $ 583.76 $ 49,172,465

B – Page 657 of 696
9/7/2025
Tax Credit Financing 2,276,246 $ Total Tax Credit Financing 22,762,461 $ Tax-Exempt Bonds - Series B 7,000,000 $ Tax-Exempt Bonds - Series A 14,800,000 $ City of Palm Springs Land Loan 2,250,000 $ Tax-Exempt Bonds - Series B 7,000,000 $ City of Palm Springs Fee Loan 2,500,000 $ City of Palm Springs Land Loan 2,250,000 $ Other - $ City of Palm Springs Fee Loan 2,500,000 $
Other - $ Other - $
Deferred Costs 1,074,575 $ Other - $
Deferred Developer Fee 6,413,799 $ Other - $
Taxable Bonds 16,407,040 $ Other - $
Tax-Exempt Bonds - Series A 15,000,000 $ Deferred Developer Fee 3,609,199 $ Total Sources of Funds $ 52,921,660 Total Sources of Funds $ 52,921,660 Total Land Costs 2,250,000 $ Total Land Costs 2,250,000 $ Total Building Acquisition Costs - $ Total Building Acquisition Costs - $ Construction Costs 30,097,066 $ Construction Costs 30,097,066 $ Construction Contingency 1,510,000 $ Construction Contingency 1,510,000 $ Financing Costs 3,950,810 $ Financing Costs 3,950,810 $ Architecture & Engineering 1,150,000 $ Architecture & Engineering 1,150,000 $ Other Soft Costs 5,575,410 $ Other Soft Costs 5,575,410 $ Developer Fees 6,413,799 $ Developer Fees 6,413,799 $
Soft Cost Contingency 900,000 $ Soft Cost Contingency 900,000 $ Post Construction Interest & Reserves 1,074,575 $ Post Construction Interest & Reserves 1,074,575 $ Total Uses of Funds $ 52,921,660 Total Uses of Funds $ 52,921,660 Sources of Funds Sources of Funds
Uses of Funds Uses of Funds

SOURCES & USES
McCarthy & San Rafael
Palm Springs, CA

CONSTRUCTION PHASE PERMANENT PHASE

B – Page 658 of 696
FINANCING & COMPLIANCE DETAILS 9/7/2025
McCarthy & San Rafael
Palm Springs, CA

PERMANENT FINANCING
Total Project Costs 52,921,660 $
Tax Credit Financing
Tax Credit Eligible Basis $ 49,172,465
Less: Grant Proceeds & Other Exclusions $ -
Voluntary Basis Reduction $ -
Requested Eligible Basis $ 49,172,465
Difficult to Develop Bonus (Yes - 130%, No - 100%) 130% Total Adjusted Eligible Basis $ 63,924,205
Times % of Affordable Units or Square Feet 100.00%
Qualified Basis Eligible to Receive Tax Credits $ 63,924,205 Less Voluntary Credit Reduction 0.00% $ - $ 63,924,205
Federal Credits State Credits
Times Credit % Floor 4.00% 30.00%
Times Number of Years 10 1
Total Tax Credits $ + 2,140,000 25,569,680 $ = 27,709,680 $ Syndicated at an Investment Rate of 99.99% at a Price of $ 0.8215 Credit Price $0.82 $0.84
Equals Tax Credit Equity Proceeds $ 22,762,461
Total Tax Credit Financing 43.01% $ (22,762,461)
Tax-Exempt Bonds - Series A 27.97% $ (14,800,000)
Tax-Exempt Bonds - Series B 13.23% $ (7,000,000)
City of Palm Springs Land Loan 4.25% $ (2,250,000)
City of Palm Springs Fee Loan 4.72% $ (2,500,000)
Other 0.00% $ -
Deferred Developer Fee 6.82% $ (3,609,199)
Financing Shortfall / (Overage) 0.00% $ -
Max. HOME - No Davis Bacon HOME Units # Max. Subsidy Total Limit Max. HOME Units 0 1-Bedroom 0 - $ $ - - $
Ratio to Tot. Units 0.00% 2-Bedroom 0 - $ $ - Loan Amount Tot. Project Costs $ 52,921,660 3-Bedroom 0 $ - $ - $ - HOME Loan $ - 4-Bedroom 0 $ - $ - O.K.

Construction Financing
Riverside Tax Credit Financing $ 2,276,246
Unit Number County Basis Tax-Exempt Bonds - Series B $ 7,000,000 Size of Units Limits Totals City of Palm Springs Land Loan $ 2,250,000 S 0 - $ - $ City of Palm Springs Fee Loan $ 2,500,000
1 56 374,708 $ 20,983,648 $ Other $ -
2 29 452,000 $ 13,108,000 $ Other $ -
3 30 $ 578,560 $ 17,356,800 Deferred Costs $ 1,074,575
Base Limit $ 51,448,448 Deferred Developer Fee $ 6,413,799 Base Limit Plus Adjustments $ 55,473,448 Taxable Bonds $ 16,407,040 Requested Eligible Basis $ 49,172,465 Tax-Exempt Bonds - Series A $ 15,000,000 % Below / (Above) Cost Limit 11.3586% Total Project Costs $ 52,921,660 Subsidy by Type
Compliance with LIHTC Eligible Basis Limits

B – Page 659 of 696

OPERATING & LOAN DETAILS
Project: McCarthy & San Rafael Location: Palm Springs, CA 9/7/2025 AMI Number Avg. Unit Gross Utility Net Monthly Annual
Type Rent Level of Units Sq. Ft. Rent Allowance Rent Totals Totals Studio 30% 0 0 0 00 00
Studio 50% 0 0 0 00 00
Studio 60% 0 0 0 00 00
Studio 80% 0 0 0 00 00
1BR/1BA 30% 20 582 629 30 599 11,980 143,760
1BR/1BA 50% 18 582 1,049 30 1,019 18,342 220,104
1BR/1BA 60% 4 582 1,259 30 1,229 4,916 58,992
1BR/1BA 80% 14 582 1,679 30 1,649 23,086 277,032
2BR/1BA 30% 8 757 755 40 715 5,720 68,640
2BR/1BA 50% 5 757 1,258 40 1,218 6,090 73,080
2BR/1BA 60% 1 757 1,510 40 1,470 1,470 17,640
2BR/1BA 80% 14 757 2,014 40 1,974 27,636 331,632
3BR/2BA 30% 1 1,034 873 50 823 823 9,876
3BR/2BA 50% 1 1,034 1,455 50 1,405 1,405 16,860
3BR/2BA 60% 1 1,034 1,746 50 1,696 1,696 20,352
3BR/2BA 80% 27 1,034 2,328 50 2,278 61,506 738,072
2BR/1BA Manager's 1 757 0 0 0 00
Total Units & Sq. Ft. 115 85,565 % of Sq. Ft. % of Units 164,670 $ 1,976,040 $ Community Facilities & Common Areas 5,091 Affordable Affordable Total Project Sq. Ft. 90,656 100.00% 100.00%
Total Annual Rental Income $ 1,976,040
Operating Deficit Guarantee
10% of Perm. $ 1,480,000 Other Income
Year 1 Op. Exp. $ 690,000 Resident Charges $ 150 $ 17,250 Guarantee $ 1,480,000 Commercian Income (Net of Vacancy) $ - $ - Total Annual Other Income 17,250 $
Replacement Reserves Total Annual Potential Gross Income $ 1,993,290 Standard/Unit $ 250 Vacancy & Collection Loss 5% $ (99,665) UMR Min/Unit $ 600
Reserve / Unit 250 $ Annual Effective Gross Income $ 1,893,625 Project Unit Mix
Unit Type Number % of Total
Studio 0 0.00%
1 Bdrm./1 Bath. 56 48.70%
2 Bdrm./1 Bath. 29 25.22%
3 Bdrm./2 Bath. 30 26.09%
Totals 115 100.01%
Unit Type Number % of Units Factor
30% 29 25.44% 0.08
50% 24 21.05% 0.11
60% 6 5.26% 0.03
80% 55 48.25% 0.39

59.91%
Average Affordability
Average Affordability

B – Page 660 of 696
OPERATING & LOAN DETAILS (continued)
Project: McCarthy & San Rafael Location: Palm Springs, CA 9/7/2025 ANNUAL EXPENSES % of Annual % of Total
EGI Operating Exp. Per Unit Total
Real Estate Taxes & Special Assessments 0.54% 1.48% 89.00 $ 10,200 $ State Taxes 0.04% 0.12% 7.00 $ $ 800
Insurance 3.34% 9.17% 550.00 $ 63,250 $
Licenses 0.02% 0.05% 3.00 $ $ 350
Fuel & Gas 0.00% 0.00% $ - - $
Electricity 1.17% 3.22% $ 22,200 193.00 $
Water & Sewer 4.49% 12.34% $ 85,100 740.00 $
Trash Removal 2.01% 5.50% $ 38,000 330.00 $
Pest Control 0.11% 0.29% 17.00 $ 2,000 $
Building & Maintenance Repairs 1.71% 4.70% $ 32,400 282.00 $ Building & Maintenance Supplies 0.90% 2.48% $ 17,100 149.00 $ Supportive Services 0.79% 2.17% 130.00 $ $ 15,000
Annual Issuer & Trustee Fees 0.58% 1.58% 95.00 $ $ 10,900 Gardening & Landscaping 1.21% 3.34% $ 23,000 200.00 $
Management Fee 3.50% 9.52% 571.00 $ 65,700 $
On-Site Manager(s) 5.82% 15.98% 959.00 $ 110,240 $
Other Payroll 3.83% 10.50% $ 72,500 630.00 $
Manager's Unit Expense 0.00% 0.00% - $ $ -
Cleaning Supplies 0.05% 0.15% $ 1,000 9.00 $
Benefits 1.63% 4.49% 269.00 $ 30,960 $
Payroll Taxes & Work Comp 1.71% 4.69% 281.00 $ 32,350 $ Advertising 0.01% 0.03% $ 200 2.00 $
Telephone 0.32% 0.87% 52.00 $ $ 6,000
Legal & Accounting 0.42% 1.16% 70.00 $ $ 8,000
Operating Reserves 0.00% 0.00% - $ $ -
Office Supplies & Expense 0.26% 0.72% 43.00 $ $ 5,000
Miscellaneous Administrative 0.48% 1.28% 79.00 $ 9,000 $ Replacement Reserves 1.52% 4.17% 250.00 $ 28,750 $
Annual Expenses - Per Unit & Total $ 6,000 $ 690,000
Annual Net Operating Income - Per Unit & Total $ 1,203,625 10,466 $

PERMANENT DEBT ANALYSIS
LTV Restricted Loan Amounts DSC Ratio Restricted Loan Amounts Cap Rate 8.500% 9.000% 9.500% ** ** Fixed Loan
Loan-To-Value Restriction 90% 90% 90% ** ** Amount
Debt Service Coverage 1.39 1.47 1.55 1.15 1.20 1.19
Loan Amount $ 12,036,250 12,744,265 $ 11,402,763 $ 15,362,537 $ 14,722,431 $ $ 14,800,000 Constant ** ** ** 0.068129 0.068129 0.068129
Interest Rate 6.250% 6.250% 6.250% 6.250% 6.250% 6.250% Amortization Period in Years 40 40 40 40 40 40
Annual Debt Service $ 820,015 868,251 $ 776,856 $ 1,046,630 $ 1,003,021 $ 1,008,300 $ Annual Cash Flow $ 383,610 335,374 $ 426,769 $ 156,995 $ 200,604 $ 195,325 $ Loan Selection x

B – Page 661 of 696
McCarthy & San Rafael Palm Springs, CA 9/7/2025
Multi-Year Stabilized Operating Pro-Forma
Net Rent / No. of Annual Year Year Year Year Year
RENTAL INCOME % AMI Unit - Year 1 Units Increase 1 2 3 4 5 Studio 30% 0 0 2.5% - - - - -
Studio 50% 0 0 2.5% - - - - -
Studio 60% 0 0 2.5% - - - - -
Studio 80% 0 0 2.5% - - - - -
1BR/1BA 30% 599 20 2.5% 143,760 147,354 151,038 154,814 158,684 1BR/1BA 50% 1,019 18 2.5% 220,104 225,607 231,247 237,028 242,954 1BR/1BA 60% 1,229 4 2.5% 58,992 60,467 61,978 63,528 65,116 1BR/1BA 80% 1,649 14 2.5% 277,032 283,958 291,057 298,333 305,791 2BR/1BA 30% 715 8 2.5% 68,640 70,356 72,115 73,918 75,766 2BR/1BA 50% 1,218 5 2.5% 73,080 74,907 76,780 78,699 80,667 2BR/1BA 60% 1,470 1 2.5% 17,640 18,081 18,533 18,996 19,471 2BR/1BA 80% 1,974 14 2.5% 331,632 339,923 348,421 357,131 366,060 3BR/2BA 30% 823 1 2.5% 9,876 10,123 10,376 10,635 10,901 3BR/2BA 50% 1,405 1 2.5% 16,860 17,282 17,714 18,156 18,610 3BR/2BA 60% 1,696 1 2.5% 20,352 20,861 21,382 21,917 22,465 3BR/2BA 80% 2,278 27 2.5% 738,072 756,524 775,437 794,823 814,693 2BR/1BA Manager's 0 1 2.5% - - - - -
TOTAL RENTAL INCOME 115 1,976,040 2,025,441 2,076,077 2,127,979 2,181,178 OTHER INCOME Units Incr./Yr. Year-1 Year-2 Year-3 Year-4 Year-5 Resident Charges 115 2.5% 17,681 17,250 18,123 18,576 19,041 Commercian Income (Net of Vacancy) 115 2.5% - - - - -
TOTAL OTHER INCOME 17,250 17,681 18,123 18,576 19,041
TOTAL INCOME 1,993,290 2,043,122 2,094,200 2,146,555 2,200,219 Less Vacancy Allowance 5% (99,665) (102,156) (104,710) (107,328) (110,011) GROSS INCOME 1,893,625 1,940,966 1,989,490 2,039,227 2,090,208 OPERATING EXPENSES Per Unit - Yr. 1 %EGI Incr./Yr. Year-1 Year-2 Year-3 Year-4 Year-5 Advertising 2 $ 0.0% 3.5% 207 200 214 222 230
Legal 17 $ 0.1% 3.5% 2,000 2,070 2,142 2,217 2,295
Accounting/Audit 52 $ 0.3% 3.5% 6,000 6,210 6,427 6,652 6,885 Security - $ 0.0% 3.5% - - - - -
Other: Telephone, Office Expense, Misc. 174 $ 1.1% 3.5% 20,000 20,700 21,425 22,174 22,950 Management Fee 571 $ 3.5% 3.5% 65,700 68,000 70,379 72,843 75,392 Fuel 2 $ 0.0% 3.5% 200 207 214 222 230
Gas (2) $ 0.0% 3.5% (200) (207) (214) (222) (230)
Electricity 193 $ 1.2% 3.5% 22,200 22,977 23,781 24,614 25,475 Water/Sewer 740 $ 4.5% 3.5% 85,100 88,079 91,161 94,352 97,654 On-Site Manager 959 $ 5.8% 3.5% 110,240 114,098 118,092 122,225 126,503 Maintenance Personnel 630 $ 3.8% 3.5% 72,500 75,038 77,664 80,382 83,195 Other: Payroll Taxes, Work Comp, Benefits 551 $ 3.3% 3.5% 63,310 65,526 67,819 70,193 72,650 Insurance 550 $ 3.3% 3.5% 63,250 65,464 67,755 70,126 72,581 Painting 50 $ 0.3% 3.5% 5,750 5,951 6,160 6,375 6,598
Repairs 232 $ 1.4% 3.5% 26,650 27,583 28,548 29,547 30,581 Trash Removal 330 $ 2.0% 3.5% 38,000 39,330 40,707 42,131 43,606 Exterminating 17 $ 0.1% 3.5% 2,000 2,070 2,142 2,217 2,295 Grounds 200 $ 1.2% 3.5% 23,000 23,805 24,638 25,501 26,393 Elevator - $ 0.0% 3.5% - - - - -
Other: Cleaning & Building Supplies 157 $ 1.0% 3.5% 18,100 18,734 19,389 20,068 20,770 Other: Licenses 3 $ 0.0% 3.5% 350 362 375 388 402
Other: State Tax 7 $ 0.0% 3.5% 800 828 857 887 918
Other: Issuer / Trustee Fees 95 $ 0.6% 3.5% 10,900 11,282 11,676 12,085 12,508 Other: - $ 0.0% 3.5% - - - - -
Other: $ - 0.0% 3.5% - - - - -
TOTAL OPERATING EXPENSES $ 5,531 636,050 658,312 681,353 705,200 729,882 Internet Expense - $ 0.0% 3.5% - - - - -
Service Amenities 130 $ 0.8% 3.5% 15,000 15,525 16,068 16,631 17,213 Reserve for Replacement 250 $ 1.5% 0.0% 28,750 28,750 28,750 28,750 28,750 Real Estate Taxes $ 89 0.5% 2.0% 10,200 10,404 10,612 10,824 11,041 TOTAL EXPENSES, TAXES & RESERVES $ 6,000 690,000 712,991 736,783 761,405 786,886 CASH FLOW AVAILABLE FOR DEBT SERVICE 1,203,625 1,227,976 1,252,707 1,277,822 1,303,323 DEBT SERVICE & OTHER DISTRIBUTIONS Loan Amount Year-1 Year-2 Year-3 Year-4 Year-5 Tax-Exempt Bonds - Series A Hard $ 14,800,000 1,008,300 1,008,300 1,008,300 1,008,300 1,008,300 Other NA $ - - - - - -
Asset Management Fees Soft $ 19,000 19,000 19,000 19,000 19,000 19,000 Deferred Developer Fee Soft $ 3,609,199 50,169 44,081 56,352 62,630 69,006 Tax-Exempt Bonds - Series B Soft $ 7,000,000 150,507 132,244 169,055 187,892 207,017 City of Palm Springs Land Loan Soft $ 2,250,000 - - - - - City of Palm Springs Fee Loan Soft $ 2,500,000 - - - - - Other Soft $ - - - - - -

ANNUAL NET CASH FLOW - - - - -
Deferred Dev. Fee Balance Interest Rate: 0.00% 3,565,118 3,514,950 3,458,598 3,395,968 3,326,962 Debt Service Coverage Ratio on Hard Debt 1.19 1.22 1.24 1.27 1.29

B – Page 662 of 696
McCarthy & San Rafael Palm Springs, CA
Multi-Year Stabilized Operating Pro-Forma
Net Rent / No. of Annual
RENTAL INCOME % AMI Unit - Year 1 Units Increase
Studio 30% 0 0 2.5%
Studio 50% 0 0 2.5%
Studio 60% 0 0 2.5%
Studio 80% 0 0 2.5%
1BR/1BA 30% 599 20 2.5%
1BR/1BA 50% 1,019 18 2.5%
1BR/1BA 60% 1,229 4 2.5%
1BR/1BA 80% 1,649 14 2.5%
2BR/1BA 30% 715 8 2.5%
2BR/1BA 50% 1,218 5 2.5%
2BR/1BA 60% 1,470 1 2.5%
2BR/1BA 80% 1,974 14 2.5%
3BR/2BA 30% 823 1 2.5%
3BR/2BA 50% 1,405 1 2.5%
3BR/2BA 60% 1,696 1 2.5%
3BR/2BA 80% 2,278 27 2.5%
2BR/1BA Manager's 0 1 2.5%
TOTAL RENTAL INCOME 115
OTHER INCOME Units Incr./Yr.

Resident Charges 115 2.5%
Commercian Income (Net of Vacancy) 115 2.5%

TOTAL OTHER INCOME

TOTAL INCOME
Less Vacancy Allowance 5%

GROSS INCOME
OPERATING EXPENSES Per Unit - Yr. 1 %EGI Incr./Yr.

Advertising 2 $ 0.0% 3.5%
Legal 17 $ 0.1% 3.5%
Accounting/Audit 52 $ 0.3% 3.5%
Security - $ 0.0% 3.5%
Other: Telephone, Office Expense, Misc. 174 $ 1.1% 3.5% Management Fee 571 $ 3.5% 3.5%
Fuel 2 $ 0.0% 3.5%
Gas (2) $ 0.0% 3.5%
Electricity 193 $ 1.2% 3.5%
Water/Sewer 740 $ 4.5% 3.5%
On-Site Manager 959 $ 5.8% 3.5%
Maintenance Personnel 630 $ 3.8% 3.5%
Other: Payroll Taxes, Work Comp, Benefits 551 $ 3.3% 3.5% Insurance 550 $ 3.3% 3.5%
Painting 50 $ 0.3% 3.5%
Repairs 232 $ 1.4% 3.5%
Trash Removal 330 $ 2.0% 3.5%
Exterminating 17 $ 0.1% 3.5%
Grounds 200 $ 1.2% 3.5%
Elevator - $ 0.0% 3.5%
Other: Cleaning & Building Supplies 157 $ 1.0% 3.5%
Other: Licenses 3 $ 0.0% 3.5%
Other: State Tax 7 $ 0.0% 3.5%
Other: Issuer / Trustee Fees 95 $ 0.6% 3.5%
Other: - $ 0.0% 3.5%
Other: $ - 0.0% 3.5%
TOTAL OPERATING EXPENSES $ 5,531
Internet Expense - $ 0.0% 3.5%
Service Amenities 130 $ 0.8% 3.5%
Reserve for Replacement 250 $ 1.5% 0.0%
Real Estate Taxes $ 89 0.5% 2.0%
TOTAL EXPENSES, TAXES & RESERVES $ 6,000

CASH FLOW AVAILABLE FOR DEBT SERVICE
DEBT SERVICE & OTHER DISTRIBUTIONS Loan Amount
Tax-Exempt Bonds - Series A Hard $ 14,800,000
Other NA $ -
Asset Management Fees Soft $ 19,000
Deferred Developer Fee Soft $ 3,609,199
Tax-Exempt Bonds - Series B Soft $ 7,000,000
City of Palm Springs Land Loan Soft $ 2,250,000
City of Palm Springs Fee Loan Soft $ 2,500,000
Other Soft $ -

ANNUAL NET CASH FLOW
Deferred Dev. Fee Balance Interest Rate: 0.00%
Debt Service Coverage Ratio on Hard Debt
Year Year Year Year Year
6 7 8 9 10
- - - - -
- - - - -
- - - - -
- - - - -
166,718 162,651 170,885 175,158 179,537
255,253 249,027 261,634 268,175 274,880
68,413 66,744 70,123 71,876 73,673
321,272 313,436 329,304 337,537 345,975
79,601 77,660 81,591 83,631 85,722
84,750 82,683 86,869 89,041 91,267
20,457 19,958 20,968 21,493 22,030
384,591 375,211 394,206 404,061 414,163
11,453 11,174 11,739 12,033 12,334
19,552 19,076 20,041 20,542 21,056
23,602 23,026 24,192 24,797 25,417
855,937 835,061 877,336 899,269 921,751
- - - - -
2,235,708 2,291,601 2,348,891 2,407,613 2,467,803
Year-6 Year-7 Year-8 Year-9 Year-10
20,005 19,517 20,505 21,017 21,543
- - - - -
19,517 20,005 20,505 21,017 21,543
2,255,225 2,311,605 2,369,395 2,428,630 2,489,346
(112,761) (115,580) (118,470) (121,432) (124,467)
2,142,464 2,196,025 2,250,925 2,307,198 2,364,879
Year-6 Year-7 Year-8 Year-9 Year-10
246 238 254 263 273
2,459 2,375 2,545 2,634 2,726
7,376 7,126 7,634 7,901 8,177
- - - - -
24,585 23,754 25,446 26,336 27,258
80,762 78,031 83,589 86,514 89,542
246 238 254 263 273
(246) (238) (254) (263) (273)
27,289 26,367 28,245 29,233 30,256
104,610 101,072 108,271 112,060 115,983
135,513 130,931 140,256 145,165 150,246
89,121 86,107 92,240 95,469 98,810
77,824 75,192 80,548 83,367 86,285
77,750 75,121 80,472 83,288 86,203
7,068 6,829 7,316 7,572 7,837
32,760 31,652 33,906 35,093 36,321
46,712 45,132 48,347 50,039 51,790
2,459 2,375 2,545 2,634 2,726
28,273 27,317 29,262 30,287 31,347
- - - - -
22,250 21,497 23,028 23,834 24,668
430 416 445 461 477
983 950 1,018 1,053 1,090
13,399 12,946 13,868 14,353 14,856
- - - - -
- - - - -
755,428 781,868 809,233 837,556 866,871
- - - - -
18,439 17,815 19,084 19,752 20,443
28,750 28,750 28,750 28,750 28,750
11,262 11,487 11,717 11,951 12,190
813,255 840,544 868,784 898,009 928,254
1,329,209 1,355,482 1,382,141 1,409,189 1,436,625
Year-6 Year-7 Year-8 Year-9 Year-10
1,008,300 1,008,300 1,008,300 1,008,300 1,008,300
- - - - -
19,000 19,000 19,000 19,000 19,000
82,046 75,477 88,710 95,472 102,331
246,136 226,432 266,131 286,417 306,994
- - - - -
- - - - -
- - - - -
- - - - -
3,251,485 3,169,439 3,080,729 2,985,257 2,882,926

1.32 1.34 1.37 1.40 1.43

B – Page 663 of 696
McCarthy & San Rafael Palm Springs, CA
Multi-Year Stabilized Operating Pro-Forma
Net Rent / No. of Annual
RENTAL INCOME % AMI Unit - Year 1 Units Increase
Studio 30% 0 0 2.5%
Studio 50% 0 0 2.5%
Studio 60% 0 0 2.5%
Studio 80% 0 0 2.5%
1BR/1BA 30% 599 20 2.5%
1BR/1BA 50% 1,019 18 2.5%
1BR/1BA 60% 1,229 4 2.5%
1BR/1BA 80% 1,649 14 2.5%
2BR/1BA 30% 715 8 2.5%
2BR/1BA 50% 1,218 5 2.5%
2BR/1BA 60% 1,470 1 2.5%
2BR/1BA 80% 1,974 14 2.5%
3BR/2BA 30% 823 1 2.5%
3BR/2BA 50% 1,405 1 2.5%
3BR/2BA 60% 1,696 1 2.5%
3BR/2BA 80% 2,278 27 2.5%
2BR/1BA Manager's 0 1 2.5%
TOTAL RENTAL INCOME 115
OTHER INCOME Units Incr./Yr.

Resident Charges 115 2.5%
Commercian Income (Net of Vacancy) 115 2.5%

TOTAL OTHER INCOME

TOTAL INCOME
Less Vacancy Allowance 5%

GROSS INCOME
OPERATING EXPENSES Per Unit - Yr. 1 %EGI Incr./Yr.

ANNUAL NET CASH FLOW
Deferred Dev. Fee Balance Interest Rate: 0.00%
Debt Service Coverage Ratio on Hard Debt
Year Year Year Year Year
11 12 13 14 15
- - - - -
- - - - -
- - - - -
- - - - -
188,626 184,025 193,341 198,175 203,129
288,796 281,752 296,015 303,416 311,001
77,403 75,515 79,338 81,321 83,354
363,490 354,624 372,577 381,892 391,439
90,062 87,865 92,313 94,621 96,987
95,887 93,549 98,284 100,742 103,260
23,145 22,581 23,724 24,317 24,925
435,130 424,517 446,008 457,158 468,587
12,958 12,642 13,282 13,614 13,955
22,122 21,582 22,675 23,242 23,823
26,704 26,052 27,371 28,055 28,757
968,414 944,795 992,625 1,017,440 1,042,876
- - - - -
2,529,498 2,592,736 2,657,554 2,723,993 2,792,093
Year-11 Year-12 Year-13 Year-14 Year-15
22,633 22,081 23,199 23,779 24,374
- - - - -
22,081 22,633 23,199 23,779 24,374
2,551,580 2,615,369 2,680,753 2,747,772 2,816,467
(127,579) (130,768) (134,038) (137,389) (140,823)
2,424,001 2,484,601 2,546,715 2,610,383 2,675,644
Year-11 Year-12 Year-13 Year-14 Year-15
292 282 302 313 324
2,920 2,821 3,022 3,128 3,237
8,760 8,464 9,066 9,384 9,712
- - - - -
29,199 28,212 30,221 31,279 32,374
95,920 92,676 99,277 102,752 106,348
292 282 302 313 324
(292) (282) (302) (313) (324)
32,411 31,315 33,546 34,720 35,935
124,243 120,042 128,592 133,093 137,751
160,947 155,504 166,580 172,411 178,445
105,848 102,268 109,552 113,387 117,355
92,431 89,305 95,666 99,014 102,480
92,343 89,220 95,575 98,920 102,382
8,395 8,111 8,689 8,993 9,307
38,908 37,592 40,270 41,679 43,138
55,479 53,603 57,421 59,430 61,510
2,920 2,821 3,022 3,128 3,237
33,579 32,444 34,755 35,971 37,230
- - - - -
26,425 25,532 27,350 28,308 29,298
511 494 529 547 567
1,168 1,128 1,209 1,251 1,295
15,914 15,376 16,471 17,047 17,644
- - - - -
- - - - -
897,211 928,614 961,115 994,754 1,029,571
- - - - -
21,900 21,159 22,666 23,459 24,280
28,750 28,750 28,750 28,750 28,750
12,434 12,682 12,936 13,195 13,459
959,554 991,946 1,025,467 1,060,158 1,096,060
1,464,447 1,492,656 1,521,248 1,550,225 1,579,584
Year-11 Year-12 Year-13 Year-14 Year-15
1,008,300 1,008,300 1,008,300 1,008,300 1,008,300
- - - - -
19,000 19,000 19,000 19,000 19,000
116,339 109,287 123,487 130,731 138,071
349,017 327,860 370,461 392,194 414,213
- - - - -
- - - - -
- - - - -
- - - - -
2,773,639 2,657,300 2,533,813 2,403,082 2,265,011

1.45 1.48 1.51 1.54 1.57

B – Page 664 of 696
ATTACHMENT C:

Funding Commitment Letter (January 2026)

B – Page 665 of 696
City of Palm Springs
3200 E. Tahquitz Canyon Way • Palm Springs, California 92262 Tel: (760) 323-8299 • Fax: (760) 323-8207 • Web:
www.palmspringsca.gov
January 14, 2026
Mr. Darren Berberian
Pacific West Companies, Inc
8700 Technology Way
Reno, NV 89521
RE: FUNDING COMMITMENT IN THE AMOUNT OF TWO MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($2,250,000)
Dear Mr. Berberian,
I am pleased to inform you the Palm Springs City Council approved your request for funding at its meeting on January 14, 2026. A loan from The City will provide a loan in the amount of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000) to assist with the acquisition of approximately five acres located at the northwest corner of McCarthy Road and West San Rafael Drive (APNs 669-420-011, -012, and -014), Palm Springs, CA 92262, for the development of an affordable multifamily housing project (“Housing Project”).The City of Palm Springs anticipates that the loan proceeds in the amount of $2,250,000 will be available for disbursement during in the fourth quarter of 2026, subject to all standard pre-closing conditions and verification of project financing.

The capital funds are available as a loan for land acquisition under the following terms:

Interest rate: 3% simple annual
Term of Affordability: 55 years
Term of Loan: 57 years
Repayment: Annual payments based on residual receipts
Collateral: Deed of trust secured by the land and improvements In addition, pursuant to Resolution No. 24654, the City will provide applicable Development Impact Fees and Developer Fees to the Housing Project in the form of a City loan in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000). The fee loan will be subject to repayment from residual receipts, secured by a regulatory agreement, and governed by terms and conditions to be set forth in a separate loan agreement, which will require City Council approval.

B – Page 666 of 696
Draft Funding Commitment Page 2
San Rafael Apartments
Post Office Box 2743 • Palm Springs, California 92263-2743 The City’s land acquisition loan shall be senior in priority to the City’s fee loan. The City’s loan for Development Impact Fees and Developer Fees shall be subordinate to the acquisition loan and shall be evidenced by separate loan documents. The relative priority and subordination of the City loans shall be further documented in the respective loan agreements and recorded instruments, in a form acceptable to the City Manager and City Attorney.

Should you have any questions or require additional information, please contact Jay Virata, Housing and Community Development Director, at 760-323-8228 or by email at [email protected].

Sincerely,
Scott C. Stiles, ICMA-CM
City Manager

B – Page 667 of 696
ATTACHMENT D:

Resolution Number 24654 – Affordable and
Multi-family Housing Incentive Program

B – Page 668 of 696
RESOLUTION NO. 24654

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

PALM SPRINGS, CALIFORNIA, ESTABLISHING THE

AFFORDABLE AND MULTI - FAMILY HOUSING INCENTIVE
PROGRAM," A PROGRAM TO ESTABLISH REDUCED

DEVELOPMENT IMPACT FEES AND DEVELOPER FEES

RELATED TO RESIDENTIAL PROJECTS CONSTRUCTING

NEW AFFORDABLE DWELLING UNITS, OR

CONSTRUCTING NEW MULTI - FAMILY RESIDENTIAL
UNITS.

B – Page 669 of 696
Resolution No. 24654

Page 2 ends

THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES, DETERMINES AND APPROVES AF FOLLOWS:

SECTION 1. Factual Findings:

A. The true and correct recitals above are incorporated by this reference herein as the basis and foundation for the City' s adoption of this Resolution.

B. The City Council has determined that waiving or reducing certain Development Impact Fees and Developer Fees established by previous Resolutions for new residential

B – Page 670 of 696
Resolution No. 24654

Page 3 ends

Continue to approve fee reductions and waivers, General funds, and make available other financial assistance, where possible, for extremely low, very low and low income housing projects.

Consider waiving the Multiple Species Habitat Conservation Plan fee ( e. g., fee to acquire sensitive habitat) for extremely low, very low and low income affordable housing projects.

Promote financial and development assistance programs to the building community on an annual basis.

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Resolution No. 24654

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Resolution No. 24654

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Resolution No. 24654

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Resolution No. 24654

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Resolution No. 24654

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Resolution No. 24654

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6) Accessory Dwelling Units (ADUs):

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Resolution No. 24654

Page 10 ends

2. Determine Affordable Sales Price
a) Divide MHI by 12
b) Multiply result of (a) by 35%
c) Divide result of (b) by 0. 005 ( 0. 005 represents mortgage interest rate of 6%)

3. Determine Maximum Sales Price
The maximum home price for any residential unit proposed by the applicant cannot exceed 120% of the Affordable Condominium Price determined in Step 2.

Example:
2017 Survey = $ 76, 530
CCPI Change between December 2017 and June 2019 = 5. 8% MHI = $ 76, 530 x 1. 058 = $ 80, 969

B – Page 678 of 696
Resolution No. 24654

Page 11 ends

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Resolution No. 24654

Page 12 ends

SECTION 3. Severability.

SECTION 4. Effective Date.

This Resolution will become effective immediately upon adoption and remain effective unless superseded by a subsequent resolution.

SECTION 5. CEQA.

B – Page 680 of 696
Resolution No. 24654

Page 13 ends

PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS 2" d DAY OF OCTOBER, 2019.

DAVID H. READY, ESQ

CITY MANAGER
ATTEST:

THONY M ,

CITY CLE K

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

MEJ A, C CITY
CLEARK

B – Page 681 of 696

CITY COUNCIL STAFF REPORT
DATE: JANUARY 14, 2026 BUSINESS & LEGISLATIVE
SUBJECT: INTRODUCTION OF AN ORDINANCE ADDING A NEW CHAPTER 3.29

TO THE PALM SPRINGS MUNICIPAL CODE, PROVIDING FOR

ESTABLISHMENT OF CITY OF PALM SPRINGS TOURISM

IMPROVEMENT DISTRICT LAW
FROM: Scott C. Stiles, City Manager
BY: Department of Finance and Treasury
SUMMARY:

As a charter city, the City Council may adopt a procedure for the authorization of the levy of assessments and the issuance of special assessment bonds. This ordinance would establish the City of Palm Springs Tourism Improvement District Law, which will allow the City to pledge assessments from the Palm Springs Tourism Infrastructure District No. 2026-01 to obligations issued as part of the Palm Springs Convention Center (PSCC) Modernization Project (Project).

RECOMMENDATION:

Introduce and conduct a first reading, by title only, of an ordinance entitled, “AN

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADDING A NEW CHAPTER 3.29 TO THE PALM SPRINGS MUNICIPAL

CODE, PROVIDING FOR THE CITY OF PALM SPRINGS TOURISM IMPROVEMENT

DISTRICT LAW INCLUDING GENERAL PROVISIONS AND DEFINITIONS, POWERS

AND PROCEDURES TO ISSUE BONDS FOR THE PURPOSE OF PROVIDING

FINANCING FOR SPECIFIED PURPOSES, AND CERTAIN OTHER SUPPLEMENTAL PROVISIONS”
BACKGROUND:

The Project was presented conceptually to the City Council on September 10, 2025. The Project includes two major elements: design, renovation, expansion and construction of the PSCC facility; and design and construction of the “urban connectors” between downtown and the PSCC.

C – Page 682 of 696
City Council Staff Report
January 14, 2026 -- Page 2
Introduction of an Ordinance to Establish Tourism Improvement District Law The City Manager’s Stakeholder Group has been meeting to oversee the broad conceptualization of the overall PSCC Facility modernization plans and the urban design as well as the development and branding of the district identity. Recently, the group has begun to focus on the specifics of implementation. One of the City Manager Stakeholder Group working groups is the Tourism Infrastructure District Working Group. This Working Group was tasked with researching and exploring using a Tourism Infrastructure District (TID) as a potential revenue source for bond debt financing for the Project.

STAFF ANALYSIS:

The TID Working Group worked closely with City staff and Civitas Advisors to prepare a proposal to establish a Tourism Infrastructure District. Before that occurs, it is necessary to adopt modifications to the Property and Business Improvement District Law of 1994 (Section 36600, et seq., Streets and Highways Code) (the “PBID Law”) in order to implement the Project and its financing as contemplated by the staff and the City Manager Stakeholder Group.

The City is authorized to employ the provisions of the PBID Law to establish a TID.

Whenever the City Council elects to employ that statute, the City Council has the authority to enact, by ordinance, provisions different than, supplemental to, or in addition to the PBID Law. The Ordinance presented at this meeting would modify the PBID Law with respect to Palm Springs Tourism Infrastructure District No. 2026-01 (the "District").

The Ordinance provides that the City Council may, by resolution, pledge any assessment revenues the District generates to the payment of any bonds, notes, loans, interim certificates, debentures, installment-purchase agreements, leases, or other obligations the City issues or incurs (each, an "Obligation," and collectively, the "Obligations").

The Ordinance also provides that an Obligation may extend for more than 30 years, but will not exceed 40 years, and may be payable from assessments and other revenues.

Accordingly, section 36640(b) of the PBID Law is amended by the Ordinance to provide that the amount of debt service to retire an Obligation may not be more than the amount of revenue estimated to be raised from assessments in the District over 30 years but not more than 40 years, provided, however, that the assessments in the District shall be extended on delinquent assessees in order to pay any delinquencies on the outstanding Obligations arising from such non-payment of assessments.

The primary benefit of adopting the City of Palm Springs Tourism Improvement District Law is to allow a longer period of time to collect assessments than provided in the PBID Law, which is a primary credit factor for the issuance of any Obligations secured by the assessments.

ALIGNMENT WITH STRATEGIC PLANNING:

This item aligns with the following City Council Strategic Plan Foundation: Economic Development.

C – Page 683 of 696
City Council Staff Report
January 14, 2026 -- Page 3
Introduction of an Ordinance to Establish Tourism Improvement District Law FISCAL IMPACT:

None.

REVIEWED BY:

Chief Economic Development Officer: Wayne Olson
Director of Finance & Treasurer: Kristopher J. Mooney
City Manager: Scott Stiles
ATTACHMENTS:

A. Ordinance Establishing City of Palm Springs Tourism Improvement District Law

C – Page 684 of 696
09960.00000\44333132.1

ATTACHMENT A
Ordinance Establishing
City of Palm Springs
Tourism Improvement
District Law

C – Page 685 of 696
09960.00000\44333132.1
Ordinance No. _____

Page 2 ends

ORDINANCE NO. ____

AN ORDINANCE OF THE CITY OF PALM SPRINGS,
CALIFORNIA, ADDING A NEW CHAPTER 3.29 TO THE

PALM SPRINGS MUNICIPAL CODE, PROVIDING FOR THE

CITY OF PALM SPRINGS TOURISM IMPROVEMENT

DISTRICT LAW INCLUDING GENERAL PROVISIONS AND

DEFINITIONS, POWERS AND PROCEDURES TO ISSUE

BONDS FOR THE PURPOSE OF PROVIDING FINANCING

FOR SPECIFIED PURPOSES, AND CERTAIN OTHER

SUPPLEMENTAL PROVISIONS
City Attorney’s Summary
This ordinance supplements the Property and Business
Improvement District Law of 1994 for purposes of financing improvements to enhance tourism and business within the City.

WHEREAS, the City Council of the City of Palm Springs does hereby find, determine and declare that:
(a) the City of Palm Springs (the “City”) is a municipal corporation and charter city duly organized and existing under a charter pursuant to which the City has the right and power to make and enforce all laws and regulations in respect to municipal affairs and certain other matters in accordance with and as more particularly provided in Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and Section 102 of Article 1 of the Charter of the City (the “Charter”); and
(b) the City Council of the City acting under and pursuant to the powers reserved to the City under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and Section 102 of Article 1 of the Charter, finds that the public interest and necessity require the establishment by this procedural ordinance of a procedure for the authorization of the levy of assessments and the issuance of special assessment bonds by the City for the purpose of providing financing or refinancing for certain purposes as specified herein.

WHEREAS, A procedural ordinance for the authorization of the levy of special taxes and the issuance of special tax bonds is hereby enacted to read as follows:

THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. A new Chapter 3.29 of the Palm Springs Municipal Code is hereby added to read as follows:

C – Page 686 of 696
09960.00000\44333132.1
Ordinance No. _____

Page 3 ends

“Chapter 3.29 Palm Springs Tourism Infrastructure District No. 2026- 01 Section 3.29.010 Property and Business Improvement District Law of 1994.

In conducting proceedings for the establishment of a property and improvement business district for the purpose of financing certain improvements and activities, the city council may employ the provisions of the Property and Business Improvement District Law of 1994 (Section 36600, et seq., Streets and Highways Code) (the “PBID Law”). Whenever the city council elects to employ that statute, the city council shall have the authority to enact, by ordinance, provisions different than, supplemental to, or in addition to the PBID Law.

Section 3.29.020 Palm Springs Tourism Infrastructure District No. 2026-01.
(a) This section modifies the PBID Law with respect to Palm Springs Tourism Infrastructure District No. 2026-01 (the "District").
(b) Section 36640 of the PBID Law is hereby amended to provide that the city council may, by resolution, pledge any
assessment revenues the District generates to the payment of any bonds, notes, loans, interim certificates, debentures, installment-purchase agreements, leases, or other obligations the city issues or incurs (each, an "Obligation," and
collectively, the "Obligations").
(c) A pledge of assessment revenues to the payment of an Obligation must be evidenced by the indenture, trust
agreement, loan agreement, lease, installment-purchase
agreement, revolving-credit agreement, credit or liquidity agreement, or other instrument or agreement under which the city issues or incurs the Obligation.
(d) An Obligation may extend for more than 30 years, but will not exceed 40 years, and may be payable from assessments and other revenues. Accordingly, section 36640(b) of the PBID Law is hereby amended to provide that the amount of debt service to retire an Obligation may not be more than the amount of revenue estimated to be raised from assessments in the District over 30 years but not more than 40 years, provided, however, that the assessments in the District shall

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be extended on delinquent assessees in order to pay any delinquencies on the outstanding Obligations arising from such non-payment of assessments.
(e) This section, being necessary for the health, welfare, and safety of the city and its residents, is to be liberally interpreted to carry out its purposes.
(f) This section provides a complete, additional, and alternative method for doing the things authorized, and it is supplemental and additional to the powers conferred by other laws,
including the PBID Law.
(g) The validity of any Obligation does not depend on, and is not affected in any way by, any city proceedings to acquire, construct, or complete any properties or projects for which the Obligation is issued or any agreements made in connection with the acquisition, construction, or operation of those properties or projects. An Obligation will be incontestable, and its issuance or incurrence and delivery will conclusively establish the due performance of all conditions precedent to its issuance, incurrence, and delivery.
(h) This section may not be amended to have a material, adverse effect upon the rights of any holder of any outstanding Obligation without the holder's written consent, except as follows: this section may be amended at any time (1) if the amendment is needed to cure an ambiguity or to correct or supplement a defective provision; (2) if the city council finds that the amendment will not materially impair or adversely affect the city's interests or the interests of the holder; (3) if the city council finds that the amendment is necessary or desirable to assure the exemption from gross federal income taxation of interest on an Obligation, if applicable; or (4) if the amendment will apply solely to Obligations issued after its effective date.
(i) To the extent this section is inconsistent with any general statute or special act, including the PBID Law, this section will control.
(j) If, for any reason, any part of this section is invalid, then all valid parts that are severable from the invalid part remain in effect.”
SECTION 2. This Ordinance is exempt from the requirements of the California

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Environmental Quality Act (Public Resources Code, §§ 21000 et seq.)(“CEQA”) because it involves the adoption of a governmental funding mechanism, which is not subject to CEQA. (Kaufman & Broad-South Bay, Inc. v. Morgan Hill Unified School District, (1993) 9 Cal.App.4th 464).

PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL this _____ day of ______________, 2026.

Naomi Soto
Mayor
ATTEST:

BRENDA PREE, MMC

CITY CLERK

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF PALM SPRINGS )
I, BRENDA PREE, City Clerk of the City of Palm Springs, California, do hereby certify that Ordinance No. ____ is a full, true, and correct copy, and was introduced at a regular meeting of the Palm Springs City Council on _________ and adopted at a regular meeting of the City Council held on __________ by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ______ day of ______________, _________.

BRENDA PREE, MMC

CITY CLERK

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CITY COUNCIL STAFF REPORT
DATE: JANUARY 14, 2026 BUSINESS & LEGISLATIVE
SUBJECT: REVIEW AND DISCUSS THE REMAINING EXTERNAL COMMITTEES 2026 ROSTER OF CITY COUNCIL SUBCOMMITTEES, APPOINTEES,

LIAISONS, AND REPRESENTATIVES TO EXTERNAL ORGANIZATIONS FROM: Scott C. Stiles, City Manager
BY: Office of the City Clerk
RECOMMENDATION:

Review and provide direction on the four remaining external committees to the roster of City Council subcommittees, appointees, liaisons, and representatives to external organizations.

BACKGROUND:

The City Council made appointments for the majority of the subcommittees and appointees for the roster of City Council External Organizations on December 10, 2025.

The City Council members had questions regarding the bylaws and makeup of four of the external organizations and continued this item to the next meeting.

STAFF ANALYSIS:

Enclosed for the City Council’s consideration, discussion, and approval is the roster of City Council remaining subcommittees and appointees to external organizations. Staff requests that the City Council provide direction regarding any amendments to the 2026 roster. For reference, the current roster, which was adopted on December 10, 2025, is included as Attachment A.

The City Council routinely appoints Councilmembers to serve on standing or ad hoc subcommittees, or individual Councilmembers may volunteer to serve as liaisons to study various topics. The City Council also appoints representatives to external organizations as needed. On an annual basis, the City Council reviews the roster of appointments and makes adjustments as necessary.

Under California Code of Regulations (CCR) § 18702.5, before a public official may participate in a decision or vote to appoint themselves to a compensated position, the

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City Council Staff Report
January 14, 2026 -- Page 2
Review of Remaining City Council External Committee Appointments, 2026 Roster local agency must post a form established by the Fair Political Practices Commission (FPPC) on the City’s website. Staff recommends that the City Council adopt and direct the Office of the City Clerk to prepare FPPC Form 806 for update and posting as required.

FISCAL IMPACT:

None.

REVIEWED BY:

Department Director: Brenda Pree
City Manager: Scott Stiles
ATTACHMENTS:

A. 2026 Roster of City Council Subcommittees, Appointees, Liaisons, and Representatives to External Organizations (City Council Appointment Preferences).

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ATTACHMENT A
(External Organization Roster Adopted on December 10,
2025 with four open spots)

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Office of the City Clerk Rev. 12/15/2025

CITY OF PALM SPRINGS, CALIFORNIA
Roster of City Council Subcommittees 2026
Committee Status Meetings Member Member
Finance Standing Committee (Res-12147) Standing As Needed (MAYOR) Soto Ready
Board & Commission Interviews Ad
Hoc Subcommittee* Ad Hoc As Needed (MAYOR)
Soto
(MPT)
Ready
Economic Development Committee Standing As Needed Soto Bernstein Parks & Recreation Master Plan Task
Force (Approved 10/26/23) * Task Force As Needed Bernstein Soto Arts & Culture Roundtable Task
Force* Task Force As Needed Bernstein Garner
Blue Zones Steering Committee Standing As Needed Soto Ready Roster of City Council
Appointees to External Organizations 2026
External Organizations Meetings Appointee Alternate
Coachella Valley Association of Governments (CVAG) (SE/, Form 700 required) Executive Committee
(Agendize assignment at the end of each FY) Last Monday, 4:30 p.m. (MAYOR) Soto
(MPT)
Ready
Energy & Environmental Resources 2nd Thursday, Noon Soto Garner Homelessness Wednesday, 3rd at 10:00a.m. Soto Garner
Public Safety 2nd Monday, 9:00 a.m. Garner Bernstein
Transportation 1st Monday, 10:00 a.m. Ready Garner
California Coalition of Mayors 1st & 3rd Friday, 12:30 p.m. Soto N/A Coachella Valley Conservation
Commission (SE/, Form 700 required) 2nd Thursday, 10:30 a.m. Garner N/A Coachella Valley Mountains
Conservancy Bd. (SE/, Form 700 required)
2nd Monday, 3:00 p.m.
(4 mtgs./year) Garner N/A
Desert Community Energy Board
(SE/, Form 700 required) 3rd Monday, 3:00 p.m. Bernstein N/A Eastern Riverside County Interoperable
Communications Authority 02/12/2026 at 2pm Garner N/A
Friends of PS Animal Shelter Varies Bernstein Ready
Visit Greater Palm Springs
(SE/, Form 700 required) Varies

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Office of the City Clerk Rev. 12/15/2025
External Organizations Meetings Appointee Alternate
League of California Cities Varies Ready N/A
Main Street/Uptown Business
Association 1st Tuesday, 8:30 a.m. Ready N/A
Palm Springs Chamber of Commerce 3rd Thursday, 8:00 a.m.

Palm Springs Tourism & Hospitality Organizations
Hotel General Managers Meeting E/O Wednesday, 8:00 a.m. Soto Ready PS Hospitality Association Member
Meeting
2nd Thursday, 11:30 a.m.

Dark – August & December
PS Resorts Meetings Varies deHarte Bernstein
Plaza Theatre Foundation Varies / 4:30 p.m. Bernstein N/A Office of Neighborhood Involvement
(One-PS)
2 nd Tuesday, 4:00 p.m.
(Dark in August)
Riverside County Transportation
Commission (SE/, Form 700 required) 2
nd Wednesday, 9:30 a.m. Ready Garner
So. California Association of
Governments Conference & General
Assembly Meeting (SE/, Form 700 required)
May 7-8, 2026 Ready N/A
Sunline Transit Agency (SE/, Form 700 required) 4th Wednesday, Noon Garner Soto Liaisons Meetings Appointee Alternate
Film Festival Liaisons - Bernstein Ready
Active Transportation Committee - deHarte Ready
* Meetings are held on an as-needed basis.

N/A – An alternate appointee is generally not selected.

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Palm Springs City CouncilJanuary 14, 2026

Palm Springs City Council
January 14, 2026