Agenda packet, regular meeting, first session — Palmdale City Council, November 15, 2023 (part 5 of 6)

requirements for traditional multi-family development standards are not applicable. For example, the minimum distance between structures is 30 feet; however, due to the townhouse typology and configuration, the distance between structures will provide the desired passageway effect, but with a smaller distance. Strict adherence to the existing requirement would not allow for the desired site layout and housing typology.

Additionally, the increased front setback will provide an attractive landscape area along 30 th Street East and the slight reduction of non- residential ground floor height will allow for the desired building design.

These modifications are consistent with the MU 1 zone by providing a pedestrian-friendly and attractive street frontage. Moreover, the reduction of the parking requirement will allow the project to be designed to accommodate the proposed uses and generous open space without providing a surplus of unused parking spaces.

SECTION 4 . Based on the findings and conclusions set forth in the above Sections, and based on all other evidence in the record, the City Council hereby approves PD 23-001 to incorporate the proposed changes as shown in Exhibit II and find that the project is categorically exempt from environmental review.

SECTION 5 . Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase in this Ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared unconstitutional, or invalid, or ineffective, provided the basic purposes of this Ordinance and the benefits to the City and the public are not substantially impaired.

Ordinance No. 1617

Page 5 of 5 ends

SECTION 6. The City Clerk shall certify to the adoption of this ordinance and shall cause this ordinance to be published or posted as required by law.

PASSED, APPROVED and ADOPTED this 15th day of November 2023 _________________________________
Approved as to form: Laura Bettencourt, Mayor
ATTEST:
___________________________ ________________________________ William P. Curley III, City Attorney Rochelle Scott, Acting City Clerk I, Rochelle Scott, Acting City Clerk of the City of Palmdale, California, do hereby certify that the foregoing Ordinance was duly introduced, passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 15th day of November, 2023 effective on the 15th day of December, 2023 by the following roll call vote:

AYES:

NOES:

ABSTAIN: ABSENT:

Date:

Rochelle Scott, Acting City Clerk

EXHIBIT I
AERIAL MAP FOR PLANNED DEVELOPMENT 23-001

SOS Children’s Village Planned
Development Document Guidelines
10/27/2023

EXHIBIT II
2 |
S O S C H I L D R E N  S V I L L A G E P L A N N N E D D E V E L O P M E N T D O C U M E NT G U I D E L I N E S 6 APPENDIX

6.01 Proposed Site Plan 9

6.02 Proposed Circulation Plan 10
Table of
Contents
1 4
2 5
3 PURPOSE SPECIAL DEVELOPMENT STANDARDS

SITE INFORMATION

IMPLEMENTATION

PROJECT INFORMATION

2.01 Location 4

2.02 Legal Description 5

2.03 Project Data 5

2.04 Existing Site Condition 5

5.01 Development review Procedures 8

5.02 Parking 8

5.03 Ongoing Maintenance

4.01 Building Setbacks 7

4.02 Height 7

4.03 Parking 7

4.04 Distance between buildings 7

4.05 Site Design 7

3.01 Owner and Applicant information 6

3.02 Project Description 6

3.03 Permitted Uses 6

3.04 Term of Planned Development Document 6

1.01 Introduction 3
8 3 |
S O S C H I L D R E N  S V I L L A G E P L A N N N E D D E V E L O P M E N T D O C U M E NT G U I D E L I N E S The purpose of the SOS Children’s Villages Planned Development (PD) is to provide comprehensive planning for the development of SOS Children’s Villages, a development of foster care housing, and associated uses. The Project will be designed to create a village-like housing development to provide stable housing for foster youth and allow siblings to stay together in the same home. In addition to the seven two-unit townhouse buildings, the project will also include a mixed-use building which will include oﬃ ce space, six studio units, and a community center to be used for the foster youth and the community.

The combination of the above site elements will be enhanced with amenities, which include a generous landscaped area which will include play areas for multiple age-ranges, picnic and outdoor event areas, and a garden. The mixed-use area will also include picnic and outdoor events areas, and a desert plan garden along 30th Street East. This Planned Development will result in a high quality, eﬃ cient, and thoughtfully designed mixed use development (Mixed Use 1 MU 1) which will bring in needed foster youth housing and services to the Antelope Valley.

1.01 Introduction
1| PURPOSE
4 |
S O S C H I L D R E N  S V I L L A G E P L A N N N E D D E V E L O P M E N T D O C U M E NT G U I D E L I N E S Project Site is located west of 30th Street East and 1,000 feet south of Palmdale Boulevard.

2.01 Location
2| SITE

5 |
S O S C H I L D R E N  S V I L L A G E P L A N N N E D D E V E L O P M E N T D O C U M E NT G U I D E L I N E S LOT 24, IN SECTION 30, TOWNSHIP 6 NORTH RANGE 11 WEST, SAN BERNARDINO BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF THE SURVEY

OF SAID LAND ON FILE IN THE BUREAU OF LAND MANAGEMENT IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP SHOWING A PORTION OF THE LANDS OF THE PALMDALE COLONY COMPANY, IN BOOK 52 PAGES(S) 71, OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

2.02 Legal Description
2| SITE

2.03 Project Data

2.04 Exisiting site Condition
The Project Site is a vacant parcel located west of 30th Street East and 1,000 feet south of Palmdale Boulevard. The project site is bounded by commercial development to the north, William J. McAdam Park to the south, 30th Street East to the west, and vacant property to the east. The site is completely ﬂ at and consists of heavily disturbed desert scrub habitat encompassing mainly native plans and some non-native grasses. • Assessor’s Parcel Number: 3018-026-001
• Gross Area: 4.7 acres
• Existing Zone: Mixed Use 1 (MU 1)
• Existing Land Use: Mixed Use 1 (MU 1)
6 |
S O S C H I L D R E N  S V I L L A G E P L A N N N E D D E V E L O P M E N T D O C U M E NT G U I D E L I N E S Property Owner & Applicant
SOS Children’s Villages California, Owner
Alexandria Levitt, Applicant
2121 Avenue of the Stars, Ste. 200
Los Angeles, CA 90067
T: (310) 722-1618

3.01 Owner and Applicant Information
3| PROJECT INFORMATION

3.02 Project Description

3.03 Permitted Uses

3.04 Term of Planned Development Document

3.3 Permitted Uses: the proposed project is allowed within the MU 1 zone.

The Planned Development Document will expire ﬁ ve years after the date of approval, with one possible ﬁ ve-year time extension.

Architect
AC Martin
Gilbert Rocca
444 South Flower St, Suite 1200
Los Angeles, CA 90071
T: (213) 614-6005
Landscape Architect
TGP
Nanda Raghunathan
P .O. Box 704
Montrose, CA 91021
T: (818) 797-5914
Civil Engineer
LFA
Frank Larocca
319 Main St
El Segundo, CA 90245
T: (213) 239-9700
The applicant is proposing to construct seven residential buildings, one mixed use building, and associated outdoor recreation spaces in two phases located west of 30th Street East and approximately 1,000 feet south of Palmdale Boulevard. The seven townhouse buildings will each include two four- bedroom units with a connected studio unit. The mixed-use building will be located along 30th Street East and will include six aﬀ ordable studio units, 2,800 square feet of oﬃ ce space, and 4,200 square feet of community space, which are allowed uses within the Mixed Use 1 (MU1) zone. The project is intended to provide housing for foster care youth, onsite resource caregivers, and family members, the community space will be available to both development residents as well as the City of Palmdale Community. 7 |
S O S C H I L D R E N  S V I L L A G E P L A N N N E D D E V E L O P M E N T D O C U M E NT G U I D E L I N E S

4.01 Building Setbacks
4| SPECIAL DEVELOPMENT STANDARDS

4.02 Height
Non-residential ground ﬂ oor height: 12 feet.

4.03 Parking
Community Assembly: One space for every 200 feet.

Distance between buildings (Multi-Family and Mixed-Use Design Standards) Minimum 8 feet open-to-the-sky separation between structures.

Front Development setback: Residential Ground Floor: 15 to 45 feet Front Development setback: Non-Residential Ground Floor: 5 to 25 feet

4.04 Distance between buildings
The project is designed with the Community Center & studio units along 30th St E. The proposed seven residential buildings (14 total units) are located to the East of the Community Center and are designed to overlook private open space, with related parking and vehicle access along the perimeter.

4.05 Site Design
8 |
S O S C H I L D R E N  S V I L L A G E P L A N N N E D D E V E L O P M E N T D O C U M E NT G U I D E L I N E S

5.01 Development Review Procedures
5| IMPLEMENTATION

5.02 Parking
The project shall provide parking spaces as deﬁ ned in Section Three of the Special Development Standards, 4.3 Parking, of this PD and Palmdale Municipal Code Section 17.87. Prior to maximum buildout, the developer must provide surface parking to provide the required number of parking spaces as deﬁ ned in Section 4.3, for the buildings then proposed. As part of its Post Approval Plan Check, the Planning Division shall review proposed site plans for compliance with this parking requirement.

5.03 Ongoing Maintenance of Common Areas and Facilities As part of the process for the review of precise grading plans and building permit applications, the developer also shall submit a site plan covering the proposed permit area. The Planning Division shall review each site plan for substantial compliance with this PD text. The site plans shall be approved if they are in substantial compliance with this PD text. While this PD text generally addresses the approximate size, location, and mix of uses for individual buildings within the project, however, those characteristics are intended to generally reﬂ ect the project concept as a whole, as opposed to the speciﬁ c size, location, and mix of uses for any individual building. With respect to building size, location, and uses, therefore, Post Approval Plan Check shall focus on consistency with the project concept, while architectural, landscaping, and design elements, intensity of use, parking requirements, and other development standards shall be in substantial conformance with this PD text. Changes from the initial approval will require approval of a modiﬁ cation to the plans/project. If there is substantial compliance, site plans shall be approved by the Planning Department. All Plans must be in compliance with the standards speciﬁ ed within this Planned Development document. If the Planning Manager determines that the site plan or building elevations are not consistent with this Planned Development document, the appropriate application must be submitted in accordance with the Palmdale Municipal Code.

Common areas, commercial buildings, residential buildings and accessory structures, shall be maintained by the developer, its successors, a parking, landscape, or similar district, or one or more associations of developers/owners created to maintain common areas and facilities. 9 |
S O S C H I L D R E N  S V I L L A G E P L A N N N E D D E V E L O P M E N T D O C U M E NT G U I D E L I N E S 6| APPENDIX

6.01 Proposed Site Plan
City Council Staff Report
DATE: NOVEMBER 15, 2023
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: FINANCE DIVISION
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2023-068, A RESOLUTION OF TH E

CITY COUNCIL OF THE CITY OF PALMDALE CAL LING SPECIAL

ELECTION REGARDING A LTERATION OF RATE AN D METHOD

OF APPORTIONMENT OF SPECIAL TAX ES FOR THE CITY OF
PALMDALE COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER RANCH); AND RESOLUTION NO. CC 2023 -069, A RESOLUTION

OF THE CITY COUNCIL OF THE CITY OF PALMDALE DECLARING

RESULTS OF SPECIAL ALTERATION ELECTION IN THE CITY OF
PALMDALE COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER

RANCH), DETERMINING THAT ALT ERATION OF THE RATE AND

METHOD OF APPORTIONMENT OF SPECIAL TAX ES FOR THE

DISTRICT IS LAWFULLY AUTHORIZED, AND DIRE CTING

RECORDING OF AN AMEN DMENT TO THE AMENDED AND
RESTATED NOTICE OF SPECIAL TAX LIEN FOR THE DISTRICT.

ISSUE
Adopt Resolution No. CC 2023 -068, a Resolution of the City Coun cil of the City of Palmdale calling special election regarding alteration of Rate and Method of Apportionment of Special Taxes for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch).

Adopt Resolution No. CC 2023 -069, a Resolution o f the City Council of the City of Palmdale declaring results of special alteration election in the City of Palmdale Community Facilities District No. 93 -1 (Ritter Ranch), determining that alteration of th e Rate and Method of Apportionment of Special Tax es for the District is lawfully authorized, and directing recording of an amendment to the Amended and Restated Notice of Special Tax Lien for the District.

RECOMMENDATION
Staff recommends that the City Council:

1. Conduct the public hearing to accept public testimony on the proposed alteration of the Rate and Method of Apportionment of Special Tax es for the City of Report to Mayor and City Council
Re: Adopt Resolutions CC 2023-068 and CC 2023-069
November 15, 2023

Page 2 ends

Palmdale Community Facilities District No. 93-1 (Ritter Ranch) pursuant to City Council Resolution No. CC 2023-061.

2. Adopt Resolution No. CC 2023-068, a Resolution of the City Council of the City of Palmdale calling special election regarding alteration of Rate and Method of Apportionment of Special Taxes for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch).

3. Conduct special alteration election.

4. Adopt Resolution No. CC 2023-069, a Resolution of the City Council of the City of Palmdale declaring results of special alteration election in the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch), determining that alteration of the Rate and Method of Apportionment of Special Taxes for the District is lawfully authorized, and directing recording of an amendment to the Amended and Restated Notice of Special Tax Lien for the District.

BACKGROUND
In connection with the proposed master planned development of an area known as Ritter Ranch (“Project”), the City formed City of Palmdale Community Facilities District 93-1 (“CFD 93-1”) to finance certain public facilities for the Project. The City issued Special Tax Bonds for CFD 93-1 in 1995 for that purpose (“93-1 Bonds”). The outstanding 93-1 Bonds were purchased by Preston Hollow Capital, LLC (“PHC”) in 2018. In 2020, PHC also acquired the property within CFD 93-1 and transferred the land to RdR Development Holdings, LLC (“RdR”), a limited liability company for which PHC is the sole member. Collectively, PHC and RdR are referred to below as the RdR Parties. PHC continues to own the 93-1 Bonds and RdR continues to own the property within CFD 93-1.

In September 2022, the RdR Parties were prepared to proceed with the development of the first phase of the Project, which is expected to include up to 1,180 residential units (“Phase 1”). They requested, and the City formed, a new community facilities district for the Phase 1 property portion of the Project (“CFD 2022-3”) to fund public infrastructure and improvements necessary for the development of the Project. The RdR Parties have since decided to cancel all the outstanding CFD 93-1 Bonds prior to proceeding with the issuance of special tax bonds for CFD 2022-3.

It was determined that additional actions are needed with respect to CFD 93-1 in order to accomplish the termination of the special tax lien relating to outstanding 93-1 Bonds upon cancellation of the 93-1 Bonds.

DISCUSSION
During the CFD 2022-3 formation process, the Phase 1 property was removed from CFD 93-1 and is now included in CFD 2022-3. At that time, the lien of 93-1 Bonds on Report to Mayor and City Council
Re: Adopt Resolutions CC 2023-068 and CC 2023-069
November 15, 2023

Page 3 ends

the new CFD 2022-3 property was extinguished. Subsequently, it was determined that the removal of the Phase 1 property from CFD 93-1 was premature and affects the ability to terminate the special tax lien relating to the 93-1 Bonds when they are canceled.

In order to remedy this, certain administrative actions are necessary. First, the Rate and Method of Apportionment of Special Taxes (“RMA”) for CFD 93-1 must be altered to ensure that once the 93-1 Bonds are canceled, the lien of CFD 93-1 Bonds and related special taxes on the property within CFD 93-1 will be terminated. Second, the Phase 1 property must be annexed back into CFD 93-1.

The process to alter the RMA for CFD 93-1 and to annex the Phase 1 property into CFD 93-1 began with the City Council adoption of Resolution Nos. CC 2023-061 and CC 2023-062 on October 18, 2023. Those resolutions set November 15, 2023, as the date for public hearings on these actions.

It is now time to conclude the RMA alteration proceedings. This process requires that the City Council hold the public hearing regarding the alteration of the RMA, approve the resolution of alteration, hold a special alteration election (submitted to the sole owner of the property within CFD 93-1), and approve a resolution declaring the results of the election.

Alteration of RMA
The staff recommends that the City Council hold a public hearing to accept public testimony on the proposed alteration of the RMA. After conducting the public hearing, staff recommends that the City Council adopt Resolution No. CC 2023-068, which:
 alters the RMA, and
 submits the alteration of the RMA to the qualified elector of the territory within CFD 93-1.

After the adoption of the resolution, the Acting City Clerk will conduct the special election and open the ballot submitted by RdR, who is the qualified landowner elector.

Once the affirmative ballot is cast, staff recommends that the City Council adopt Resolution No. CC 2023-069, which:
 declares the results of the special annexation election,  determines the validity of the prior proceedings, and  directs recording of a second amendment to the Amended and Restated Notice of Special Tax Lien.

After the adoption of this resolution, the alteration proceedings will be complete.

Report to Mayor and City Council
Re: Adopt Resolutions CC 2023-068 and CC 2023-069
November 15, 2023

Page 4 ends

FISCAL IMPACT
The special taxes levied on property in CFD 93-1 has no fiscal impact on the City. The authority to levy special taxes levied on property within CFD 93-1 will be terminated once the 93-1 Bonds are canceled.

STRATEGIC PLAN
Goal III: Invest in infrastructure to improve community livability.

A. Seek innovative, cost-effective, customer-focused methods of service delivery.

C. Plan and maintain safe and attractive neighborhoods, streets, facilities, and public spaces with exciting programming that promotes active fun for everyone.

Prepared by: Janelle Samson, Director of Finance
Certified as to availability of Funds: Janelle Samson, Director of Finance Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney

ATTACHMENTS
 Resolution CC 2023-068
 Resolution CC 2023-069

CITY OF PALMDALE

COUNTY OF LOS ANGELES, CALIFORNIA
RESOLUTION NO. CC 2023-068

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE CALLING

SPECIAL ELECTION REGARDING ALTERATION OF THE RATE AND METHOD OF

APPORTIONMENT OF SPECIAL TAXES FOR THE CITY OF PALMDALE COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER RANCH)
WHEREAS, on October 18, 2023, this City Council adopted Resolution No.

CC 2023-061 entitled “A Resolution of the City Council of the City of Palmdale of Consideration to Alter the Rate and Method of Apportionment of Special Taxes for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch)” (the “Resolution of Consideration”), proposing to alter the amended and restated rate and method of apportionment of special taxes referenced in the Resolution of Consideration (the “Rate and Method of Apportionment”) for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) (the “District”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, constituting Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”); and WHEREAS, the Resolution of Consideration, which (a) made reference to the map of the boundaries of the District, (b) contained a description of the proposed alteration of the Rate and Method of Apportionment, and (c) called for a public hearing regarding the alteration is on file with the Acting City Clerk and the provisions thereof are incorporated herein by this reference as if fully set forth herein; and WHEREAS, the sole owner of the property in the District subject to the levy of special taxes for the District (the “Landowner”) has submitted to the City Council a Petition (Including Waivers), waiving, among other matters, all waiting periods under the Act for the public hearing, and the sole owner of the outstanding bonds issued by the City for the District (the “Bondowner”) has submitted to the City and the District its consent to the alteration, and the Landowner and the Bondowner are the only parties affected by the proposed alteration; and
WHEREAS, on November 15, 2023, the City Council held the public hearing as required by the Act and the Resolution of Consideration relative to the proposed alteration of the Rate and Method of Apportionment; and
WHEREAS, at said hearing all interested persons with respect to the District desiring to be heard on all matters pertaining to the proposed alteration of the Rate and Method of Apportionment were heard and a full and fair hearing was held; and WHEREAS, written protests with respect to the proposed alteration of the Rate and Method of Apportionment have not been filed with the Acting City Clerk by fifty percent (50%) or more of any registered voters residing within the territory of the District Resolution No. CC 2023-068
November 15, 2023

Page 2 ends

or property owners of one-half (1/2) or more of the area of land within the District and not exempt from the levy of the special tax; and
WHEREAS, the proposition of the alteration of the Rate and Method of Apportionment shall be submitted to the Landowner, as the sole qualified elector of the District, as required by the Act.

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF PALMDALE AS FOLLOWS:

SECTION 1. The foregoing recitals are true and correct.

SECTION 2. The proposed alteration of the Rate and Method of Apportionment of the special tax to be levied within the District has not been precluded by majority protest pursuant to Section 53337 of the Act.

SECTION 3. All prior proceedings taken by the City Council in connection with the proposed alteration of the Rate and Method of Apportionment, as set forth in the Resolution of Consideration, have been duly considered and are hereby found and determined to be valid and in conformity with the requirements of the Act.

SECTION 4. Subject to the approval of the qualified elector of the District at the special election referred to below, the Rate and Method of Apportionment is hereby altered from the Rate and Method of Apportionment specified in the Resolution No. 2014- 038 of the City Council adopted on March 14, 2014, to include the new Section L as set forth in Exhibit A attached to the Resolution of Consideration.

SECTION 5. Pursuant to Sections 53338(a) and 53326 of the Act, the issue of the alteration of the Rate and Method of Apportionment shall be submitted to the qualified elector of the District at an election called therefor as provided below.

SECTION 6. The ballot measure shall be in the form attached hereto as Exhibit A and by this reference incorporated herein and said form of ballot is hereby approved.

SECTION 7. The City Council hereby finds that fewer than 12 persons have been registered to vote within the territory of the District for each of the ninety (90) days preceding the close of the public hearing heretofore conducted and concluded by the City Council for the purposes of these proceedings. Accordingly, and pursuant to Section 53326 of the Act, the City Council finds that for purposes of these proceedings, the qualified elector for the District is the Landowner, which is the sole owner of the land within the District, and that the vote shall be by said landowner, having one vote for each acre or portion of an acre such landowner owns in the District as of the close of the public hearing.

Resolution No. CC 2023-068
November 15, 2023

Page 3 ends

SECTION 8 . The City Council hereby calls a special election to consider the measure described in Section 6 above, which election shall be held immediately following the adoption of this Resolution in the City Council Chambers. The Acting City Clerk is hereby designated as the official to conduct said election. It is hereby acknowledged that the Acting City Clerk has on file a copy of this Resolution, a map of the boundaries of the District, and a sufficient description to allow the Acting City Clerk to determine the boundaries of the District.

SECTION 9 . The voted ballot shall be returned to the Acting City Clerk immediately following the adoption of this Resolution, and when the sole qualified elector has voted, the election shall be closed.

SECTION 10 . Pursuant to Section 53327 of the Act, the election shall be conducted by mail ballot pursuant to applicable provisions of the Act and of the California Elections Code.

SECTION 11 . The City Council acknowledges that the Acting City Clerk has caused to be delivered to the sole qualified elector of the District a ballot in the form set forth in Exhibit “A” hereto.

The ballot was accompanied by all supplies and written instructions necessary to the use and return of the ballot. The envelope to be used to return the ballot was enclosed with the ballot, had the return postage prepaid, and contained the following: (a) the name and address of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is owner of record or authorized representative of the landowner entitled to vote and is the person whose name appears on the envelope, (c) the printed name, signature and address of the voter, (d) the date of signing and place of execution of the declaration pursuant to clause (b) above, and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing board.

Analysis and arguments with respect to the ballot measure have been waived by the landowner voter, by means of the waiver contained in its voted ballot, all as permitted by Section 53327(b) of the Act. The City Council hereby concurs with said waiver.

SECTION 12. The Acting City Clerk shall accept the ballot of the qualified elector in the City Council Chambers upon and prior to the adoption of this Resolution, whether said ballot be personally delivered or received by mail. The Acting City Clerk shall have available a ballot which may be marked at said location on the election day by said qualified elector.

SECTION 13. The City Council hereby further finds that the provision of Section 53326 of the Act requiring a minimum of 90 days following the adoption of this Resolution to elapse before the special election may occur is for the protection of the qualified elector of the District. The voted ballot of the sole qualified elector of the District contains a waiver Resolution No. CC 2023-068
November 15, 2023

Page 4 ends

of the time for said special election. Accordingly, this City Council finds and determines that if the qualified elector submits its voted ballot in the election, the qualified elector will have agreed to the shortened time for the election and will thereby have been fully protected in these proceedings. This City Council also finds and determines that the Acting City Clerk has concurred with the shortened time for the election.

SECTION 14. This Resolution shall take effect upon its adoption.

PASSED, APPROVED and ADOPTED this 15th day of November, 2023.

Laura Bettencourt
Mayor
Approved as to form:

William P. Curley III
City Attorney
ATTEST:

Rochelle Scott,
Acting City Clerk
Resolution No. CC 2023-068
November 15, 2023

Page 5 ends

I, Rochelle Scott, Acting City Clerk of Palmdale, California, do hereby certify that the foregoing Resolution No. CC 2023-068 was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 15th day of November, 2023 by the following roll call vote:

AYES:

NOES:

ABSTAIN: ABSENT:

Date:

Rochelle Scott, Acting City Clerk
16007.52:J19237
11/6/23
Exhibit A

Page 1 ends

EXHIBIT A

OFFICIAL BALLOT

SPECIAL ALTERATION ELECTION
CITY OF PALMDALE COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER RANCH)
This ballot is for a special, landowner election. You must return this ballot in the enclosed postage paid envelope to the office of the Acting City Clerk of the City of Palmdale no later than immediately after adoption of the resolution of the City Council of the City calling said election, currently scheduled for November 15, 2023, either by mail or in person. The Acting City Clerk’s office is located at 38300 Sierra Highway, Suite C, Palmdale, California 93550.

To vote, mark a cross (X) in the voting square after the word “YES” or after the word “NO”.

All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the Acting City Clerk of the City of Palmdale and obtain another.

BALLOT MEASURE: Shall the amended and restated
rate and method of apportionment of the special taxes for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) (the “District”) be altered as described in Resolution No. 2023-061 of the City Council of the City of Palmdale adopted October 18, 2023, entitled “A Resolution of the City Council of the City of Palmdale of Consideration to Alter the Rate and Method of Apportionment of Special Taxes for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch)”?
Yes
No
By execution in the space provided below, you also indicate your desire to have this election occur as soon as practicable and, accordingly, your waiver of any requirement for notice of or any time limit pertaining to the conduct of the election, and your waiver of any requirement for analysis and arguments with respect to the ballot measure.

Number of Votes: 236
Property Owner: RdR Development Holdings, LLC
By:

Its:

CITY OF PALMDALE

COUNTY OF LOS ANGELES, CALIFORNIA
RESOLUTION NO. CC 2023-069

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE DECLARING

RESULTS OF SPECIAL ALTERATION ELECTION IN THE CITY OF PALMDALE COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER RANCH), DETERMINING

THAT ALTERATION OF THE RATE AND METHOD OF APPORTIONMENT OF

SPECIAL TAXES FOR THE DISTRICT IS LAWFULLY AUTHORIZED, AND

DIRECTING RECORDING OF AN AMENDMENT TO THE AMENDED AND RESTATED

NOTICE OF SPECIAL TAX LIEN FOR THE DISTRICT
WHEREAS, in proceedings heretofore conducted by this City Council pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, constituting Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”), on this date this City Council adopted Resolution No. CC 2023-068 entitled “A Resolution of the City Council of the City of Palmdale Calling Special Election Regarding Alteration of the Rate and Method of Apportionment of Special Taxes for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch)” (the “Resolution Calling Election”), calling for a special election of the qualified elector within the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) (the “District”); and
WHEREAS, pursuant to the terms of the Resolution Calling Election, which are by this reference incorporated herein, the special election was held on this date, and the Acting City Clerk has on file a Canvass and Statement of Results of Election, a copy of which is attached hereto as Attachment A; and
WHEREAS, this City Council has reviewed said canvass and hereby approves it.

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF PALMDALE AS FOLLOWS:

SECTION 1. The issue presented at said special election was the alteration of the amended and restated rate and method of apportionment of the special taxes to be levied within the District, as described in the Resolution Calling Election.

SECTION 2. The results of the special election are as set forth in the Canvass attached to this Resolution as Attachment A, which is incorporated herein by this reference. Pursuant to the voter approval, the issue presented at the special election was approved by the sole qualified elector of the District.

SECTION 3 . The City Council hereby determines that the alteration of the amended and restated rate and method of apportionment of the special taxes for the District, as described in the Resolution Calling Election, is lawfully authorized.

Resolution No. CC 2023-069
November 15, 2023

Page 2 ends

SECTION 4. The Acting City Clerk is hereby directed to execute and cause to be recorded in the office of the County Recorder of the County of Los Angeles a second amendment to the amended and restated notice of special tax lien for the District, in substantially the form attached hereto as Attachment B, said recording to occur no later than fifteen days following adoption by this City Council of this Resolution.

SECTION 5. It is hereby found that all prior proceedings and actions taken by the City Council with respect to the District and the alteration of the amended and restated rate and method of apportionment of special taxes for the District were valid and in conformity with the Act.

SECTION 6. This Resolution shall take effect upon its adoption.

PASSED, APPROVED and ADOPTED this 15th day of November, 2023.

Laura Bettencourt
Mayor
Approved as to form:

William P. Curley III
City Attorney
ATTEST:

Rochelle Scott,
Acting City Clerk
Resolution No. CC 2023-069
November 15, 2023

Page 3 ends

I, Rochelle Scott, Acting City Clerk of Palmdale, California, do hereby certify that the foregoing Resolution No. CC 2023-069 was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 15th day of November, 2023 by the following roll call vote:

AYES:

NOES:

ABSTAIN: ABSENT:

Date:

Rochelle Scott, Acting City Clerk
16007.52:J19239
11/6/23
Attachment A

Page 1 ends

ATTACHMENT A

CANVASS OF RETURNS AND STATEMENT OF

RESULT OF SPECIAL ALTERATION ELECTION
City of Palmdale
Community Facilities District No. 93-1
(Ritter Ranch)
I hereby certify that on November 15, 2023, I canvassed the returns of the special alteration election held on November 15, 2023 in the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch), and that the total number of ballots cast in said election and the total number of votes cast for and against the measure are as follows, and that the totals as shown for and against the measures are full, true and correct:

Qualified
Eligible Votes
Votes Cast YES NO
City of Palmdale Community Facilities
District No. 93-1 (Ritter Ranch) Special
Alteration Election, November 15,
2023. 236
BALLOT MEASURE: Shall the amended and restated rate and method of apportionment of the special taxes for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) (the “District”) be altered as described in Resolution No. 2023- 061 of the City Council of the City of Palmdale adopted October 18, 2023, entitled “A Resolution of the City Council of the City of Palmdale of Consideration to Alter the Rate and Method of Apportionment of Special Taxes for the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch)”?
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 15th day of November, 2023.

By:

Acting City Clerk, City of Palmdale
Attachment B

Page 1 ends

ATTACHMENT B

RECORDING REQUESTED BY AND
AFTER RECORDATION RETURN TO:

Acting City Clerk
City of Palmdale
38300 Sierra Highway, Suite C
Palmdale, California 93550

SECOND AMENDMENT TO

AMENDED AND RESTATED NOTICE OF SPECIAL TAX LIEN

CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1
(RITTER RANCH)
Attachment B

Page 2 ends

SECOND AMENDMENT TO

AMENDED AND RESTATED NOTICE OF SPECIAL TAX LIEN

CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1
(RITTER RANCH)
Pursuant to the requirements of Section 3114.5 of the California Streets and Highways Code and the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”), an Amended and Restated Notice of Special Tax Lien (the “Original Notice”) with respect to City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) (the “District”) was recorded in the Office of the County Recorder of the County of Los Angeles, State of California (the “County Recorder”), on March 27, 2014, as Document No. 20140311807. The Original Notice was amended (as amended, the “Revised Notice”) by a First Amendment to Amended and Restated Notice of Special Tax Lien recorded in the Office of the County Recorder on September 21, 2016, as Document No. 20161148547 to add to the facilities authorized to be financed by the District, as described in Exhibit A thereto.

This Second Amendment to Amended and Restated Notice of Special Tax Lien amends the Revised Notice in order to reflect an alteration to the amended and restated rate and method of apportionment of special taxes for the District by adding a new Section L thereto, as described in Exhibit A hereto, pursuant to proceedings confirmed by Resolution No. CC 2023-69 adopted by the City Council of the City of Palmdale on November 15, 2023.

The names of the owners and the assessor’s tax parcel numbers of the real property included within the District and not exempt from the special tax (i) as of the date of recording of the Revised Notice are as set forth in Exhibit B attached hereto and by this reference made a part hereof, and (ii) as of the date of alteration of the amended and restated rate and method of apportionment of the special tax for the District, are as set forth in Exhibit C attached hereto and by this reference made a part hereof.

Reference is made to the boundary map of the District recorded in Book 179 of Maps of Assessment and Community Facilities Districts at Page 79, in the office of the County Recorder, which map is the final boundary map of the District.

For further information concerning the current and estimated future tax liability of owners or purchasers of real property subject to this special tax lien, interested persons should contact the Director of Finance of the City of Palmdale, 38300 Sierra Highway, Suite D, Palmdale, California 93550, telephone number (661) 267-5440.

Dated: , 2023
By:

Acting City Clerk,
City of Palmdale
Attachment B

Page 3 ends

EXHIBIT A

SECTION L TO BE ADDED TO THE

AMENDED AND RESTATED RATE AND METHOD

OF APPORTIONMENT FOR THE CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER RANCH)
L. Special Tax Termination
On the date on which no City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch), Special Tax Bonds, Series 1995-A Senior Bonds remain outstanding, the Special Tax will cease to be levied on Parcels in CFD 93-1 with the purpose and effect set forth in the second paragraph of Section 53330.5 of the Act with respect to all Parcels then in CFD No. 93-1.

Attachment B

Page 4 ends

EXHIBIT B
PROPERTY OWNER AND ASSESSOR’S PARCEL NUMBERS

AS OF RECORDING OF REVISED NOTICE FOR THE CITY OF PALMDALE COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER RANCH)
Assessor’s Parcel Nos. Names of Property Owner
3205-002-028 RdR Development Holdings, LLC
2121 North Pearl Street, Suite 600
Dallas, Texas 75201
3205-002-051
3205-002-053
3206-005-008
3206-006-016
3206-006-028
3206-007-001
3206-008-012
3206-009-014
3206-010-011
3206-016-008
3206-017-009
3206-018-014
3206-020-010
3206-020-012
3206-021-002
3206-021-005
3206-022-001
3206-025-001
3206-026-003
3206-026-004
3206-026-006
3206-026-008
3206-026-009
3206-020-017
3206-026-005
3206-026-007
3206-027-002
3206-027-004
3206-027-005
3206-027-006
3206-027-007
3206-027-008
3206-027-009
3206-027-010
3206-027-012
Attachment B

Page 5 ends

EXHIBIT C
PROPERTY OWNER AND ASSESSOR’S PARCEL NUMBERS AS

OF DATE OF ALTERATION OF THE AMENDED AND RESTATED

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES

FOR THE CITY OF PALMDALE COMMUNITY FACILITIES
DISTRICT NO. 93-1 (RITTER RANCH)
Assessor’s Parcel Nos. Name of Property Owner
3205-002-028 RdR Development Holdings, LLC
2121 North Pearl Street, Suite 600
Dallas, Texas 75201
3205-002-051
3205-002-053
3206-005-008
3206-006-016
3206-006-028
3206-007-001
3206-008-012
3206-009-014
3206-010-011
3206-016-008
3206-017-009
3206-018-014
3206-020-010
3206-020-012
3206-021-002
3206-021-005
3206-022-001
3206-025-001
3206-026-003
3206-026-004
3206-026-006
3206-026-008
3206-026-009
City Council Staff Report
DATE: NOVEMBER 15, 2023
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: FINANCE DIVISION
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2023-070, A RESOLUTION OF TH E

CITY COUNCIL OF THE CITY OF PALMDALE OF ANNEXATION OF

TERRITORY TO THE CIT Y OF PALMDALE COMMUN ITY
FACILITIES DISTRICT NO. 93-1 (RITTER RANCH) , AUTHORIZING

THE LEVY OF A SPECIA L TAX THEREIN AND SU BMITTING THE

LEVY OF SPECIAL TAX TO THE QUALIFIED ELE CTOR OF THE
DISTRICT; AND R ESOLUTION NO. CC 202 3-071, A RESOLUTION

OF THE CITY COUNCIL OF THE CITY OF PALMDALE DECLARING

RESULTS OF SPECIAL A NNEXATION ELECTION, DETERMINING

THE VALIDITY OF PRIO R PROCEEDINGS, AND D IRECTING

RECORDING OF AMENDMENT TO NOTICE OF SPECIAL TAX LIEN
- CITY OF PALMDALE COMMUNITY FACILITIES DISTRICT NO. 93- 1 (RITTER RANCH).

ISSUE
Adopt Resolution No. CC 2023 -070, a Resolution of the City Council of the City of Palmdale of Annexation of territory to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch), authorizing the levy of a special tax therein and submitting the levy of special tax to the qualified elector of the District.

Adopt Resolution No. CC 2023 -071, a Resolution of the City Council of the City of Palmdale declaring results of special annexation election , determining the validity of prior proceedings, and directing recording of amendment to Notice of Special Tax Lien - City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch).

RECOMMENDATION
Staff recommends that the City Council:

1. Conduct the public hearing to accept public testimony on the proposed annexation of territory to City of Palmdale Community Facilities District No. 93 -1 (Ritter Ranch) pursuant to City Council Resolution No. CC 2023-062.

Report to Mayor and City Council
Re: Adopt Resolutions CC 2023-070 and CC 2023-071
November 15, 2023

Page 2 ends

2. Adopt Resolution No. CC 2023-070, a Resolution of the City Council of the City of Palmdale of annexation of territory to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch), authorizing the levy of a special tax therein and submitting the levy of special tax to the qualified elector of the District.

3. Conduct special annexation election.

4. Adopt Resolution No. CC 2023-071, a Resolution of the City Council of the City of Palmdale declaring results of special annexation election, determining the validity of prior proceedings, and directing recording of amendment to Notice of Special Tax Lien - City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch).

DISCUSSION
During the CFD 2022-3 formation process, the Phase 1 property was removed from CFD 93-1 and is now included in CFD 2022-3. At that time, the lien of 93-1 Bonds on the new CFD 2022-3 property was extinguished. Subsequently, it was determined that the removal of the Phase 1 property from CFD 93-1 was premature and affects the ability to terminate the special tax lien relating to the 93-1 Bonds when they are canceled.

Report to Mayor and City Council
Re: Adopt Resolutions CC 2023-070 and CC 2023-071
November 15, 2023

Page 3 ends

In order to remedy this, certain administrative actions are necessary. First, the Rate and Method of Apportionment of Special Taxes (“RMA”) for CFD 93-1 must be altered to provide that once the 93-1 Bonds are canceled, the lien of CFD 93-1 Bonds and related special taxes on the property within CFD 93-1 will be terminated. Second, the Phase 1 property must be annexed back into CFD 93-1.

It is now time to conclude the annexation proceedings. This process requires that the City Council hold the public hearing regarding the annexation of Phase 1 property, approve the resolution of annexation, hold a special annexation election (submitted to the sole owner of the property within CFD 93-1), and approve a resolution declaring the results of the election.

Annexation
The staff recommends that the City Council hold the public hearing to accept public testimony on the proposed annexation of territory to CFD 93-1 and consider and finally determine whether the public interest, convenience, and necessity require said annexation of territory to CFD 93-1 and the levy of special tax therein. After conducting the public hearing, staff recommends that the City Council adopt Resolution No. CC 2023-070, which:
 annexes the territory into CFD 93-1,
 authorizes the levy of special taxes on such annexed territory, and  submits the levy of special taxes to the qualified elector of the territory to be annexed.

After the adoption of the resolution, the Acting City Clerk will conduct the special election and open the ballot submitted by RdR, who is the qualified landowner elector.

Once the affirmative ballot is cast, staff recommends that the City Council adopt Resolution No. CC 2023-071, which:
 declares the results of the special annexation election,  determines the validity of the prior proceedings,
 directs recording of a third amendment to the Amended and Restated Notice of Special Tax Lien for the annexed territory, and
After the adoption of this resolution, the annexation proceedings will be complete.

Report to Mayor and City Council
Re: Adopt Resolutions CC 2023-070 and CC 2023-071
November 15, 2023

Page 4 ends

STRATEGIC PLAN
Goal III: Invest in infrastructure to improve community livability.

A. Seek innovative, cost-effective, customer-focused methods of service delivery.

C. Plan and maintain safe and attractive neighborhoods, streets, facilities, and public spaces with exciting programming that promotes active fun for everyone.

ATTACHMENTS
 Resolution CC 2023-070
 Resolution CC 2023-071

CITY OF PALMDALE

COUNTY OF LOS ANGELES, CALIFORNIA
RESOLUTION NO. CC 2023-070

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE

OF ANNEXATION OF TERRITORY TO THE CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER RANCH),

AUTHORIZING THE LEVY OF A SPECIAL TAX THEREIN AND

SUBMITTING LEVY OF SPECIAL TAX TO THE QUALIFIED ELECTOR OF

THE DISTRICT
WHEREAS, on October 18, 2023, the City Council (the “City Council”) of the City of Palmdale (the “City”), adopted Resolution No. CC 2023-062 entitled “A Resolution of the City Council of the City of Palmdale of Intention to Annex Territory to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) and to Authorize the Levy of Special Taxes Therein” (the “Resolution of Intention”) stating its intention to annex territory to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) (the “District”), pursuant to the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the California Government Code (the "Act"); and
WHEREAS, a copy of the Resolution of Intention, incorporating a description of the territory to be annexed to the District and describing the facilities and services provided pursuant to the Act in the District and to be provided in the territory proposed to be annexed to the District and the amended and restated rate and method of apportionment of the special tax to be levied within the territory to be annexed to the District, and calling for a public hearing regarding annexation, is on file with the Acting City Clerk and the provisions thereof are fully incorporated herein by this reference as if fully set forth herein; and WHEREAS, the sole owner of the property in the District subject to the levy of special taxes for the District, which also is the sole owner of the property proposed to be annexed to the District, has submitted to the City Council a Petition (Including Waivers) waiving, among other matters, all waiting periods under the Act for the public hearing; and WHEREAS, on the date hereof, this City Council held the public hearing as required by the Act and the Resolution of Intention relative to the proposed annexation of territory to the District; and
WHEREAS, at the hearing all interested persons desiring to be heard on all matters pertaining to the annexation of territory to the District and the levy of special taxes within the area proposed to be annexed were heard and a full and fair hearing was held; and WHEREAS, prior to the closing of the hearing, no written or oral protests had been made against the proposed annexation of territory to the District by (i) any registered voter residing in the existing District, or (ii) any registered voter residing in the territory proposed to be annexed to the District, or (iii) the owner of the land in the existing District, or (iv) the owner of the land proposed to be annexed to the District.

Resolution No. CC 2023-070
November 15, 2023

Page 2 ends

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF PALMDALE AS FOLLOWS:

SECTION 1. All prior proceedings taken by this City Council with respect to the District and the proposed annexation of territory thereto have been duly considered and are hereby determined to be valid and in conformity with the Act, and the District has been validly established pursuant to the Act.

SECTION 2. The annexation of the territory to the District described in Exhibit A to the Resolution of Intention is hereby finally approved, said Exhibit A is hereby incorporated herein by this reference, and said territory is hereby ordered annexed to the District, subject to voter approval of the levy of the special taxes therein as hereinafter provided.

SECTION 3. The provisions of the Resolution of Intention, and of the Resolution of Formation and the Resolutions of Consideration (as described in Section 4 of the Resolution of Intention), each as heretofore adopted by this City Council, are by this reference incorporated herein, as if fully set forth herein.

SECTION 4 . Pursuant to the provisions of Section 53339.7(a) of the Act, the proposition of the levy of the special tax within the territory to be annexed to the District shall be submitted to the qualified elector of the territory to be annexed to the District at an election called therefor as hereinafter provided.

SECTION 5. This City Council hereby finds that fewer than 12 persons have been registered to vote within the territory proposed to be annexed to the District for each of the 90 days preceding the close of the public hearing heretofore conducted and concluded by this City Council for the purposes of these annexation proceedings. Accordingly, and pursuant to Section 53326(b) of the Act, this City Council finds that the qualified elector for purposes of the annexation election is the sole landowner of the territory proposed to be annexed to the District and that the vote shall be by said landowner, having one vote for each acre or portion thereof the landowner owns in the territory proposed to be annexed to the District.

SECTION 6. This City Council hereby calls a special election to consider the measure described in Section 4 above, which election shall be held in the City Council Chambers immediately following adoption of this Resolution. The Acting City Clerk is hereby designated as the official to conduct said election. It is hereby acknowledged that the Acting City Clerk has on file the Resolution of Intention and a sufficient description to allow the Acting City Clerk to determine the boundaries of the territory to be annexed to the District.

The voted ballot shall be returned to the Acting City Clerk no later than immediately following the adoption of this Resolution, and when the qualified elector has voted the election shall be closed.

SECTION 7. Pursuant to Section 53326(d) of the Act, the election shall be conducted by mail ballot.

Resolution No. CC 2023-070
November 15, 2023

Page 3 ends

SECTION 8. This City Council acknowledges that the Acting City Clerk has caused to be delivered to the sole qualified elector of the District a ballot in the form set forth in Exhibit A hereto. The ballot indicated the number of votes to be voted by the landowner. The ballot was accompanied by all supplies and written instructions necessary for the use and return of the ballot. An envelope to be used to return the ballot was enclosed with the ballot, had the return postage prepaid, and contained the following: (a) the name and address of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record or authorized representative of the landowner entitled to vote and is the person whose name appears on the envelope, (c) the printed name and address of the voter, (d) the date of signing and place of execution of the declaration pursuant to clause (b) above, and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing board.

Analysis and arguments with respect to the ballot measure will be waived by the landowner voter by means of the waiver contained in its voted ballot, as permitted by Section 53327(b) of the Act.

SECTION 9. The Acting City Clerk shall accept the ballot of the qualified elector submitted immediately following or prior to the adoption of this Resolution, whether the ballot is personally delivered or was received by mail.

SECTION 10. This City Council hereby further finds that the provision of Section 53326 of the Act requiring a minimum of 90 days following the adoption of this Resolution to elapse before said special election may occur is for the protection of the qualified elector of the territory to be annexed to the District. The voted ballot of the qualified elector of the territory to be annexed to the District contains a waiver of any time limit for said special election. Accordingly, this City Council finds and determines that, to the extent that the qualified elector submits its voted ballot in the election, the qualified elector will have agreed to the shortened time for the election and will have thereby been fully protected in these proceedings. This City Council also finds and determines that the Acting City Clerk has concurred in the shortened time for the election.

Resolution No. CC 2023-070
November 15, 2023

Page 4 ends

SECTION 11. This Resolution shall take effect upon its adoption.

PASSED, APPROVED and ADOPTED this 15th day of November, 2023.

Laura Bettencourt, Mayor
Approved as to form:

William P. Curley III,
City Attorney
ATTEST:

Rochelle Scott, Acting City Clerk
Resolution No. CC 2023-070
November 15, 2023

Page 5 ends

I, Rochelle Scott, Acting City Clerk of Palmdale, California, do hereby certify that the foregoing Resolution No. CC 2023-070 was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 15th day of November, 2023 by the following roll call vote:

AYES:

NOES:

ABSTAIN: ABSENT:

Date:

Rochelle Scott, Acting City Clerk
16007.50:J19241
11/6/23
A-1

EXHIBIT A

OFFICIAL BALLOT

SPECIAL ANNEXATION ELECTION

CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1
(RITTER RANCH)
This ballot is for a special, landowner election. You must return this ballot in the enclosed postage paid envelope to the office of the Acting City Clerk of the City of Palmdale no later than immediately after adoption of the resolution of the City Council of the City calling said election, currently scheduled for November 15, 2023, either by mail or in person. The Acting City Clerk’s office is located at 38300 Sierra Highway, Suite C, Palmdale, California 93550.

To vote, mark a cross (X) in the voting line after the word “YES” or after the word “NO.” All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the Acting City Clerk of the City of Palmdale and obtain another.

BALLOT MEASURE: Shall the City of Palmdale Community
Facilities District No. 93-1 (Ritter Ranch) (the “District”), be authorized to levy special taxes within the territory annexed to the District pursuant to and as described in Resolution No.

CC 2023-062 entitled “A Resolution of the City Council of the City of Palmdale of Intention to Annex Territory to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) and to Authorize the Levy of Special Taxes Therein,” adopted by the City Council of the City of Palmdale on
October 18, 2023?
YES:

NO:

By execution in the space provided below, you also indicate your desire to have this election occur as soon as practicable and, accordingly, your waiver of any requirement for notice of or any time limit pertaining to the conduct of the election, and your waiver of any requirement for analysis and arguments with respect to the ballot measure.

Number of Votes: 236
Property Owned by Property Owner: See Exhibit A
Property Owner: RdR Development Holdings, LLC
By:

Its:

A-2

EXHIBIT A

PARCELS OWNED BY THE PROPERTY OWNER TO BE ANNEXED TO

CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1
(RITTER RANCH)
Los Angeles County
Assessor’s Parcel Nos.
3206-020-017
3206-026-005
3206-026-007
3206-027-002
3206-027-004
3206-027-005
3206-027-006
3206-027-007
3206-027-008
3206-027-009
3206-027-010
3206-027-012

CITY OF PALMDALE

COUNTY OF LOS ANGELES, CALIFORNIA
RESOLUTION NO. CC 2023-071

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE

DECLARING RESULTS OF SPECIAL ELECTION, DETERMINING

VALIDITY OF PRIOR PROCEEDINGS, AND DIRECTING RECORDING
OF AMENDMENT TO NOTICE OF SPECIAL TAX LIEN – CITY OF
PALMDALE COMMUNITY FACILITIES DISTRICT NO. 93-1 (RITTER RANCH)
WHEREAS, in proceedings conducted by this City Council of the City of Palmdale pursuant to the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the California Government Code (the "Act"), this City Council has adopted Resolution No. CC 2023-070 entitled “A Resolution of the City Council of the City of Palmdale of Annexation of Territory to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch), Authorizing the Levy of a Special Tax Therein and Submitting Levy of Special Tax to the Qualified Elector of the District (the “Resolution of Annexation”), which called for a special election of the qualified landowner elector in the territory of land proposed to be annexed to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) (the “District”); and WHEREAS, pursuant to the terms of the Resolution of Annexation, which is by this reference incorporated herein, the special election has been held and the Acting City Clerk has filed a Canvass and Statement of Result of Election, a copy of which is included as Attachment A hereto; and
WHEREAS, this City Council has reviewed said canvass and hereby approves it.

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF PALMDALE AS FOLLOWS:

SECTION 1. The issue presented at the special election was the levy of a special tax within the territory annexed to the District, to be levied in accordance with the amended and restated rate and method of apportionment of special taxes for the District, heretofore approved by this City Council.

SECTION 2. Pursuant to the Canvass attached as Exhibit A, the issue presented at the special election was unanimously approved by the sole owner of the territory annexed to the District at the special election.

SECTION 3. Pursuant to the voter approval, the annexed territory is hereby declared to be fully annexed to and part of the District and this City Council may levy special taxes therein as heretofore provided in these proceedings.

SECTION 4. It is hereby found that all prior proceedings and actions taken by this City Council with respect to the District and the territory annexed thereto were valid and in conformity with the Act.

Resolution No. CC 2023-071
November 15, 2023

Page 2 ends

-2-
SECTION 5. Within 15 days of the date of adoption hereof, the Acting City Clerk shall execute and cause to be recorded in the office of the County Recorder of the County of Los Angeles, a Third Amendment to Amended and Restated Notice of Special Tax Lien, in substantially the form of Attachment B hereto.

SECTION 6. This Resolution shall take effect upon its adoption.

PASSED, APPROVED and ADOPTED this 15th day of November, 2023.

Laura Bettencourt, Mayor
Approved as to form:

William P. Curley III,
City Attorney
ATTEST:

Rochelle Scott, Acting City Clerk
Resolution No. CC 2023-071
November 15, 2023

Page 3 ends

-3-
I, Rochelle Scott, Acting City Clerk of Palmdale, California, do hereby certify that the foregoing Resolution No. CC 2023-071 was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 15th day of November, 2023 by the following roll call vote:

AYES:

NOES:

ABSTAIN: ABSENT:

Date:

Rochelle Scott, Acting City Clerk
16007.50:J19242
11/6/23
Exhibit A

EXHIBIT A

CANVASS AND STATEMENT OF RESULT OF ELECTION

SPECIAL ANNEXATION ELECTION

CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1
(RITTER RANCH)
I hereby certify that on this date, I canvassed the returns of the election held on this date in the territory to be annexed to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch), and the total number of ballots cast in the territory to be annexed and the total number of votes cast for and against the measure are as follows and the totals as shown for and against the measure are full, true and correct:

Qualified
Eligible
Votes
Votes
Cast YES NO
City of Palmdale
Community Facilities District No. 93-1
(Ritter Ranch)
Annexation Election,
November 15, 2023. 236
BALLOT MEASURE: Shall the City of Palmdale Community Facilities District No. 93- 1 (Ritter Ranch) (the “District”), be authorized to levy special taxes within the territory annexed to the District pursuant to and as described in Resolution No. CC 2023-062, entitled “A Resolution of the City Council of the City of Palmdale of Intention to Annex Territory to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) and to Authorize the Levy of Special Taxes Therein” adopted by the Council of the City of Palmdale on October 18, 2023?
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 15th day of November, 2023.

CITY OF PALMDALE
By:

Acting City Clerk,
City of Palmdale
Exhibit B

Page 1 ends

EXHIBIT B

RECORDING REQUESTED BY AND
AFTER RECORDATION RETURN TO:

Acting City Clerk
City of Palmdale
38300 Sierra Highway, Suite C
Palmdale, California 93550

THIRD AMENDMENT TO

AMENDED AND RESTATED NOTICE OF SPECIAL TAX LIEN

CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1
(RITTER RANCH)
Pursuant to the requirements of Section 3114.5 of the California Streets and Highways Code and the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 and following of the California Government Code (the “Act”), an Amended and Restated Notice of Special Tax Lien with respect to the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch) (the “District”) was recorded in the Office of the County Recorder of the County of Los Angeles, State of California (the “County Recorder”) on March 27, 2014 as Document No. 20140311807 (the “Original Notice”).

On September 21, 2016, the Original Notice was amended by a First Amendment to Amended and Restated Notice of Special Tax Lien recorded in the Office of the County Recorder as Document No. 20161148547 (the “First Amendment”), to add to the facilities authorized to be financed by the District, as described in Exhibit A thereto. On ____________, 2023, a Second Amendment to Amended and Restated Notice of Special Tax Lien was recorded in the Office of the County Recorder as Document No. ____ (the “Second Amendment”) which provided notice of an alteration of the amended and restated rate and method of apportionment of special taxes for the District. Reference is hereby made to the Original Notice, the First Amendment and the Second Amendment, and the provisions of each thereof are by this referenced incorporated herein.

This Third Amendment to Amended and Restated Notice of Special Tax Lien further amends the Original Notice to add to the territory of the District. The assessor’s tax parcel number(s) of all parcels or any portion thereof which are included in this Third Amendment to Amended and Restated Notice of Special Tax Lien, together with the name of the owner thereof, as they appear on the latest secured assessment roll as of the date of recording hereof or as are otherwise known to the City are as set forth in Attachment A hereto and by this referenced made a part hereof.

Dated: _______________, 2023.

By:

Acting City Clerk,
City of Palmdale
Exhibit B

Page 2 ends

ATTACHMENT A
ASSESSOR’S PARCEL NUMBERS AND OWNER OF LAND WITHIN

TERRITORY ANNEXED TO CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 93-1
(RITTER RANCH)
Assessor’s Parcel Nos. Name of Property Owners
3206-020-017
3206-026-005
3206-026-007
3206-027-002
3206-027-004
3206-027-005
3206-027-006
3206-027-007
3206-027-008
3206-027-009
3206-027-010
3206-027-012
RdR Development Holdings, LLC
2121 North Pearl Street, Suite 600
Dallas, Texas 75201
City Council Staff Report
DATE: NOVEMBER 15, 2023
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: ECONOMIC AND COMMUNITY DEVELOPMENT DEPARTMENT

ECONOMIC DEVELOPMENT DIVISION
DISTRICT: DISTRICT 2
SUBJECT: APPROVE PURCHASE AND SALE AGREEMENT NO. A-8533 WITH RDR DEVELOPMENT HOLDINGS, LLC TO ACQUIRE 652 ACRES
OF LAND FOR $10,800,000. (APNS: 3206 -007-001; 3206-007-002; 3205-002-051; 3205-002-053; 3205-002-028; 3206-005-008
(PORTION); 3206 -025-001; (PORTION); AND 3206 -006-028
(PORTION) LOCATED IN VICINITY OF VINEYARD LANE AND
ELIZABETH LAKE ROAD.

ISSUE
Approve Purchase and Sale Agreement No. A-8533 with RdR Development Holdings, LLC to acquire 6 52 acres of land for $10,800,000 . (APNs: 3206-007-001; 3206-007- 002; 3205-002-051; 3205-002-053; 3205-002-028; 3206-005-008 (portion); 3206-025- 001; (portion); and 3206 -006-028 (portion) located in vicinity of Vineyard Lane and Elizabeth Lake Road.

RECOMMENDATION
Staff recommends that the City Council:

1. Approve Purchase and Sale Agreement No. A -8533 (Agreement) with RdR Development Holdings, LLC (RdR) for $10,800,000; and

2. Authorize the City Manager or her designee to execute the Agreement, including minimal and/or non-substantiative changes, and associated documents pertaining to the real estate transaction.

BACKGROUND
Ritter Ranch , encompassing approximately 10,625-acres, is a master-planned development incorporating residential, open space, public facility, recreational, school, and commercial land uses. The Ritter Ranch property is located approximately four miles west of State Route 14; south of Elizabeth Lake Road; west of 30th Street West; north of the Sierra Pelona ridgeline; and east of Bouquet Canyon Road and the Angeles National Forest. The Ritter Ranch Specific Plan (RRSP) was approved in 1992 and provides for the ultimate development of approximately 7,200 single -family and multi -family homes.

Report to Mayor and City Council
Re: Approve Agreement No. A-8533 with RdR Development Holdings, LLC.

November 15, 2023

Page 2 ends

However, as housing needs and development trends have changed, an amendment to the RRSP will be needed to allow different housing types to be built in the RRSP area.

On February 10, 2022, the Planning Commission approved a Planned Development (PD 21-001) to establish development and design standards for the initial 115-acre Phase 1A portion of the RRSP and approved six vesting tentative maps within PD 21-001 to subdivide the property for the construction of 553 single-family residences. The property owner is currently in the process of obtaining plan approvals and permits necessary to construct the first phase of homes. This includes grading plans, infrastructure improvement plans, recordation of final tract maps, and establishing a new Community Facilities District to fund offsite infrastructure improvements needed to support the project.

Construction is also underway on utility improvements that were conditioned as part of the approval of Phase 1A along Elizabeth Lake Road and Avenue S.

DISCUSSION
The City has an opportunity to acquire 652 acres of vacant land (Property) in the RRSP area to facilitate the future development of much needed housing and to increase the number of miles of publicly accessible trails and acres of open space for the community.

The noncontiguous properties are generally located south and north of Elizabeth Lake Road and east of Bouquet Canyon Road. Of the 652 acres, approximately 373 acres are designated for residential development, with the ability to accommodate a minimum of 520 residences. Roughly 273 acres are envisioned as open space, and six acres are designated for commercial use.

The acquisition of this Property would help the City advance its goal of providing 5.0 acres of parkland or open space per 1,000 residents. As specified in Palmdale 2045, the City’s recently adopted General Plan Update, the City set specific goals and policies regarding open space and trails including:
 Goal PR-6.2: Provide a network of open space areas to provide for passive and active recreation opportunities, enhance the integrity of biological systems, and provide visual relief from the developed portions of the city.  Goal PR-7: Maintain a system of multi-use trails that provide connections to regional trail systems and residential neighborhoods.

The open space is anticipated to include public trails that will connect to neighboring projects such as Ritter Ranch, Ana Verde Nuevo and Quail Valley to the east of the Ritter Ranch Specific Plan area, to create a massive public trail system in Palmdale. Once the Property sale is approved, the City will explore partnerships with open space conservancies like the Mountains Recreation and Conservation Authority to develop and manage the new open space area. The City will also work closely with Federal, State and County agencies to aggressively go after funding to construct new trails and provide trailheads with basic amenities.

Report to Mayor and City Council
Re: Approve Agreement No. A-8533 with RdR Development Holdings, LLC.

November 15, 2023

Page 3 ends

A real estate appraisal was completed by the Dore Group in September 2023. The 652- acre site was appraised at $14,600,000. The market value of the Property is based on the land being free of any outstanding debts and liens, including any special taxes levied on the properties. Although the property was appraised at an amount higher than the purchase price, the seller recognizes that a significant investment in infrastructure improvements will be needed to develop the Property, therefore the seller agreed to reduce the purchase price to $10,800,000.

As part of the terms of the agreement, RdR will pay for the cost of amending the RRSP.

RdR will work closely with the City to update development standards, lot sizes, zoning, allowable uses, and to provide more flexible development options within the specific plan area. This also includes undertaking the cost to hire consultants to perform environmental studies, surveys and reports needed to certify a new Environmental Impact Report.

FISCAL IMPACT
$10,800,000; plus, the standard costs associated with completing the real estate transaction. The City is working on a lease revenue bond, anticipated to be completed before the end of the calendar year, that will allocate the funds necessary to complete the transaction.

STRATEGIC PLAN
Goal III: Invest in infrastructure to improve community livability.

A. Plan and maintain safe and attractive neighborhoods, streets, facilities, and public spaces with exciting programming that promotes active fun for everyone.

E. Transform housing inventory to meet the changing lifestyle and market demands.

Prepared by: Luis Garibay, Director of Economic and
Community Development
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney

ATTACHMENT

1. Aerial Map

2. Agreement No. A-8533

3. Real Estate Appraisal Report
POR. SE 1/4 SEC 23
T6N,R13W
(RS140 / SHT6&30)
APN3206-25-01
PCL "1-D" - OR 20201020109
POR. SEC 21
(RS 140/ SHT4)
APN3206-05-08
PCL "1-C" - OR 20201020109
N74°19'44"E
260.93'
Δ=17°10'29"
R=470.00'
L=140.89'
Δ=13°05'41"
R=2250.00'
L=514.23'
N61°32'36"W
120.60'
Δ=06°06'49" R=1438.00' L=153.43'
Δ=09°57'19"
R=1443.78'
L=250.86'N00°08'49"E
163.97'
Δ=00°23'32"
R=1970.00'
L=13.49'
N02°57'08"W
132.17'
POR. SEC 22
(RS 140/ SHT4)
APN3206-06-28
PCL "4" - OR 20201020109
PCL A - LLA 445
PCL B - LLA 445
OR 94-61429
PCL D - LLA 445PCL C - LLA 445
PCL E -LLA 445
PCL F - LLA 445

3.708 AC
115.850 AC
166.841 AC
3205-002-028
3205-002-053
3206-007-001
3205-002-051

PORTION OF
3206-005-008

PORTION OF
3206-006-028

PORTION OF
3206-025-001
3206-007-001
3206-007-002

RITTER RANCH OWNERSHIP

TRANSFER SITE PLAN

AERIAL OVERLAY EXHIBIT
OCTOBER 12, 2023

FOR REFERENCE ONLY
APNs TO TRANSFER
ALL OF:
3206-007-001
3206-007-002
3205-002-051
3205-002-053
3205-002-028
PORTION OF:
3206-025-001
3206-005-008
3206-006-028

APN TRANSFER BOUNDARY
AERIAL SOURCE: GOOGLE MAPS (10/2020)
Bouquet Canyon Rd
Elizabeth Lake Rd
Godde Hill Rd
N
Elizabeth Lake Rd
Attachment 1 Aerial Map

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PURCHASE AND SALE AGREEMENT AND

ESCROW INSTRUCTIONS
This Purchase and Sale Agreement and Escrow Instructions (this “Agreement”) dated this ___ day of __________________, 20 23, is entered into by and between the CITY OF PALMDALE (“CITY”), a California Charter City and municipal corporation), as “Buyer,” and RdR Development Holdings, LLC (“RDR”) as “Seller.” City and RDR are referred to herein, collectively, as the “Parties.”

RECITALS
A. RDR owns certain unimproved real property consisting of APN 3206-007-001; 3206-007-002; 3205-002-051; 3205-002-053; 3205-002-028; 3206-025-001 (portion); 3206-005- 008 (portion); and 3206 -006-028 (portion) that form approximately 652 acres, (“Property”), as generally depicted in Exhibit “A-1” attached hereto. The Property is now owned by RDR. The total Property will be assembled from multiple parcels and will be deemed to be a merchantable parcel upon final recordation of a subdivision map, approved by the CITY. The purchase and sale shall not close escrow until the subdivision map is final for all purposes.

B. The owner of real property located in the City adjacent to or near the Property (“Public Benefits”) is contemplating developing the adjacent property for beneficial uses.

AGREEMENT
NOW, THEREFORE, in consideration of the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and RDR hereby agree as follows, and hereby instruct Escrow Holder as follows.

ARTICLE I

CITY PURCHASE OF PUBLIC BENEFIT PROPERTY

1.1. Sale and Purchase of Public Benefit Property. Subject to the terms and conditions set forth in this Agreement, including, but not limited to, RDR’s financial and performance obligations set forth in Section 4.9 below, the City agrees to buy the Public Benefit Property from RDR and RDR agrees to sell the Public Benefit Property to the CITY.

1.2. Purchase Price. The total purchase price for (i) RDR’s financial and performance obligations set forth in this Agreement, and (ii) the Public Benefit Property (collectively, the “Purchased Assets”) shall be (the “Purchase Price”) the amount of Ten Million Eight Hundred Thousand Dollars ($10,800,000). The parties acknowledge and agree that the Purchase Price for the Purchased Assets is for fair market value.

1.3. Opening of Escrow and Deposit. Within seven (7) days after the Opening of Escrow (as defined in Section 5.3 below), CITY shall deliver One Hundred Thousand Dollars ($100,000.00) in cash or other immediately available funds to the Escrow Holder as a deposit (“Deposit”). Escrow will open within seven (7) business days of CITY’s receipt of the fully executed Agreement. Until the Close of Escrow (as defined in Section 5.4 below) or until Escrow

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is terminated as herein provided, the Escrow Holder shall invest the Deposit in an interest-bearing account with interest accruing thereon for the account of the CITY. Concurrently with the expiration of the Inspection Review Period and provided CITY has not delivered the Disapproval Notice (as those terms are defined in Sections 3.2 and 3.4, respectively, below), the Deposit shall become non-refundable except as otherwise provided in this Agreement. If before the expiration of the Inspection Review Period, CITY has delivered the Disapproval Notice, this Agreement shall be automatically terminated and the Deposit, together with all interest accrued thereon, shall be returned to CITY. If this Agreement has not been so terminated, then, after the expiration of the Inspection Review Period, the Deposit, together with interest accrued thereon, shall be: (i) applied and credited toward payment of the Purchase Price at the Close of Escrow, or (ii) returned to CITY if the Close of Escrow does not occur, this Agre ement is terminated, and the provisions of Sections 4.5 or 6.15 apply, or this Agreement is terminated because of a breach by CITY.

1.4. Condition of Public Benefit Property Title. At Closing, Seller shall convey to CITY good and marketable title in fee simple to the Public Benefit Property free and clear of any monetary encumbrances or liens, and subject only to all easements, restrictions, or covenants of record which do not interfere with City’s proposed use and development of the Public Benefit Property, (the “Permitted Exceptions”), as set forth on the title insurance policy attached hereto as Attachment ____, issued on the parcel resu lting from the subdivision mapping necessary to create the Property. After Close of Escrow , the City and Seller acknowledge and agree that the Parties will cooperate in good faith to establish for the benefit of Seller reasonable points of egress and ingress, utility easements and all other necessary development rights over and through the Public Benefit Property in order to facilitate development of Seller’s adjoining property consistent with the requirements of the new Ritter Ranch Specific Plan as contemplated in Section 4.9.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1. Representations and Warranties of RDR as Seller are True and Correct . RDR hereby represents and warrants to CITY that the following facts are true and correct as of the date hereof and as of the Closing Date (as defined in Section 5.4 below). The truth and accuracy of the following representations and warranties shall constitute a condition precedent to the Close of Escrow for the benefit of CITY. These representations and warranties shall survive the Close of Escrow and the recording of the Grant Deed f or sixty (60) days and shall not be deemed merged into the Grant Deed upon its recordation.
(a) Power and Authority. CITY and RDR represent and warrant each other and have the legal power, right , and authority to enter into this Agreement and the instruments referenced herein and to consummate the transactions contemplated hereby. All consents, approvals, and authorizations necessary for the execution of this Agreement and the consummation of the transactions contemplated herein by CITY and RDR have been or will be obtained by the Close of Escrow. The individuals executing this Agreement and the instruments referenced herein on behalf of the CITY and RDR have the legal power, right, and actual authority to bind their party to the terms and conditions hereof and thereof. Furthermore, RDR warrants that it has good and marketable title to the Public Benefits Property, after the completion of the mandatory subdivision map prepared by RDR to define the Property.

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(b) Requisite Action. All requisite action has been and will be taken by CITY and RDR in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transactions contemplated hereby. (c) Validity. This Agreement and all documents required hereby to be executed by CITY and RDR are and shall be valid, legally binding obligations of and enforceable against CITY and RDR in accordance with their terms subject only to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affecting or limiting the rights of contracting parties generally. Neither the execution and delivery of this Agreement a nd documents referenced herein, nor the consummation of th e transactions contemplated herein, conflict with or result in the material breach of any terms or provisions of any contract, loan, or other agreement or instrument to which RDR is a Party or affecting the Purchased Assets, including the Public Benefit Property. RDR has not sold, conveyed or entered into any contract for the sale of all or any portion of the Public Benefit Property or any rights incident thereto, nor do there exist any rights of first refusal or options to purchase the Public Benefit Property or any rights incident thereto.
(d) Recitals. The information contained in the Recitals and this Agreement is true and correct and incorporated in this Agreement.
(e) Lawsuits & Claims. To each party's actual knowledge, without any duty of inquiry or investigation, there are no pending actions, lawsuits, claims , or judicial, municipal, or administrative proceedings affecting all or any portion of the Public Benefit Property or in which CITY is a Party by reason of the Public Benefit's Property prior ownership or CITY’s present ownership of the Public Benefit Property . To Seller’s knowledge, there are no threatened or contemplated actions, lawsuits, claims, or proceedings nor the existence of any facts which might give rise to such actions, lawsuits, claims , or proceedings. During the Escrow period, the RDR will not commence or defend a ny action with respect to the Public Benefit Property except upon such terms as are mutually acceptable to CITY and City. (f) Compliance with Laws. Seller has not received notice of any violation of applicable governmental regulations relating to the Public Benefit Property, any existing or contemplated plan to widen or modify any street or highway contiguous to the Public Benefit Property, or any other plan, study, or effort of any applicable governmental authorities relating to the Public Benefit Property.
(g) Taxes and Assessments . Seller has provided to CITY all relevant information in its possession concerning real property taxes and any special assessments or bonds that may be levied against the Public Benefit Property because of any existing public improvements or work, activities, or improvements done to the Public Benefit Property by CITY. (h) Hazardous Materials. To the best of RDR’s knowledge, all operations or activities upon, or use or occupancy of the Public Benefit Property by C ITY or any current occupant or user thereof are in compliance with all state, federal and local laws and regulations governing or in any way relating to the generation, handling, manufacturing, treatment, storage, use, transportation, spillage, leakage, dumpi ng, discharge or disposal (whether accidental or intentional) of any toxic or hazardous substances, materials or wastes, including, without

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limitation, any hazardous material (as such terms are commonly defined or employed in accordance with applicable federal, state or local laws, codes, ordinances, rules and regulations).

To present actual knowledge without a reasonable duty of inquiry or investigation, there is not present upon the Public Benefit Property, or on any portion thereof, underground storage tanks, any hazardous material or any structures, fixtures, equipment or other objects or materials containing any hazardous material in violation of any applicable environmental law. (i) Lease and Contracts. There are no oral or written leases, subleases, licenses, occupancies, or tenancies in effect about the Public Benefit Property , and no persons or entities occupy or have the right to occupy or use all or any portion of the Public Benefit Property. To RDR actual knowledge, except as disclosed in Exhibit “C” attached hereto, there are no service or maintenance contracts, warranties, guarantees, bonds, insurance policies , or other agreements (whether oral or written) that will affect or be obligations of CITY or the Public Benefit Property after the Close of Escrow. RDR has no knowledge of and has neither given nor received any written notice of default with respect to any of the contracts or other agreements set forth on Exhibit “C” attached hereto. At the Close of Escrow, Seller shall deliver possession of the Public Benefit Property to the CITY, free of actual occupancy and any right of occupancy by any third party or Party.
(j) Change. Seller shall promptly notify CITY of any material adverse change in any condition with respect to the Public Benefit Property or of any event or circumstance which makes any representation or warranty of RDR under this Agreement untrue or any covenant of Seller under this Agreement incapable or less likely of being performed, it being understood that City's obligation to provide notice to CITY shall in no way relieve City of any liability for a breach by City of any of its representations, warranties or covenants under this Agreement. (k) General Representation. No representation, warranty, or statement of RDR as Seller in this Agreement or in any document, certificate of schedule prepared by RDR as Seller and to be furnished to CITY pursuant to the terms of this Agreement contains any untrue statement of material fact.

2.2. Representations of CITY as Buyer. CITY validly exists as a California Charter City and municipal corporation limited liability company and has performed all acts and obtained all approvals and consents, in each case as necessary to offer to purchase and to purchase the Public Benefit Property. CITY has the full authority and power to comply with all of its obligations set forth in this Agreement.

ARTICLE III

COVENANTS OF CITY AND CITY INSPECTION PERIOD

3.1. License to Enter Public Benefit Property. RDR hereby agrees that CITY and/or its agents, representatives, contractors, and subcontractors may, following the Opening of Escrow and before the Closing Date, conduct its own reasonable engineering studies, environmental assessment, soil and compaction tests and other tests and studies on the Public Benefit Property provided that CITY shall be responsible for any damage caused thereby. CITY shall be responsible for any liability, cost, claim, damage , or injury caused by such entry and shall keep the Public

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Benefit Property free of any and all liens arising therefrom. CITY shall indemnify and hold RDR harmless and defend RDR from and against such liability, loss, judgment, cost, claim, damage or injury, including but not limited to attorneys' fees and costs, arising out of or in connection with entry or testing on the Public Benefit Property by CITY or its agents, representatives, contractors or subcontractors; provided, however, such indemnification obligation shall not apply to CITY's mere discovery of any pre -existing adverse physical or environmental condition at the Public Benefits Property.

3.2. Inspection Review Period for the Public Benefit Property. CITY shall have a maximum period of ninety (90) days following the Opening of Escrow and CITY's receipt of the Due Diligence Items (as defined below) (the “Inspection Review Period ”), to review and investigate the Due Diligence Items, the physical and environmental condition of the Public Benefits Property, the character, quality, value and general utility of the Public Benefit Property, the zoning, land use, environmental and building requirements and restrictions applicable to the Public Benefit Property, the state of title to the Public Benefit Property factors or matters relevant to CITY's decision to purchase the Public Benefit Property . CITY, in CITY's sole and absolute discretion, may determine whether or not the Public Benefit Property is acceptable to CITY within the Inspection Review Period. As soon as practicable after the Opening of Escrow, but in no event more than ten (10) days after the Opening of Escrow, RDR shall provide CITY with the “Due Diligence Items”, to the extent in RDR’s possession, including, without limitation, the following:

1) Preliminary Title Report and related documents.
2) Hazardous Substance Condition Report, if any.
3) All available property information not already in the City’s possession.
4) Zoning, development restrictions, and matters of record. 5) Size and description of the property; both current and assembled Property.
6) Engineering Plans, if any.
7) All insurance policies on the property.
8) Copy of recent tax and utility bills on the property. 9) Biological Assessments, if any.
10) Geotechnical Report, if any.
11) Vector Reports, if any.

Additionally, any or all items requested above that are in RDR possession shall be submitted to CITY for its review as soon as practicable after the Opening of Escrow . RDR shall also deliver reliance letters to CITY from each of the consultants who have produced any third- party reports referenced above.

Within thirty [30] days after the opening of escrow, Seller shall deliver to the City and the Title Company a metes and bounds legal description of the Public Benefit Property, which shall supersede and replace Exhibit “A -1” to this Agreement and the new proposed subdivision map assembling all Public Benefit Property.

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3.3. Public Benefit Property Condition. CITY shall inspect the Public Benefit Property and the Due Diligence Items during the Inspection Review Period. Should CITY determine any defects in title, to the Public Benefit Property Seller, at its election, may agree to provide a credit against the Purchase Price in an amount sufficient to remove any such defects identified by CITY.

3.4. Approval Notice. If CITY delivers written notice to Seller and Escrow Holder prior to the expiration of the Inspection Review Period of CITY approval of the Public Benefit Property and condition of title (the “Approval Notice”), then the Public Benefit Property will be sold “As-Is” with RDR making no additional representations or warranties concerning the Public Benefit Property (except for those representations and warranties provided under Section 2.1, which shall be true and correct as of the Closing Date) and with any appropriate credit against the Purchase Price sufficient to repair any defects as provided under Section 3.3 above. If CITY fails to deliver an Approval Notice pri or to the expiration of the Inspection Period, CITY shall be deemed to have disapproved the Public Benefit Property and this Agreement shall automatically terminate and the Deposit and all interest accrued thereon shall be refunded to CITY.

ARTICLE IV

SEPARATE OBLIGATIONS OF RDR AND OF CITY; CONDITIONS PRECEDENT;

DEFAULT

4.1. Certain Obligations of CITY as Buyer.
(a) In addition to any other obligations contained in this Agreement, CITY shall have deposited the Deposit into Escrow as required pursuant to Section 1.3. (b) Not later than one (1) business day prior to the Closing Date, as defined by the City’s Agreement to the subdivision map creating the Project is final and recorded. CITY shall deposit into Escrow the balance of the Purchase Price (less the Deposit) and all other sums and documents required by the Escrow Holder to be deposited by CITY to carry out this Escrow.

4.2. Certain Obligations of RDR as Seller.
(a) To the extent required by the Title Company in order to issue the Title Policy (as defined in Section 5.5 below), RDR shall take all necessary actions to secure ratification of the City's sale and conveyance of the various portions of the Public Benefit Property to CITY.

4.3. Conditions Precedent to RDR Obligation to Sell. RDR obligation to sell the Public Benefit Property is expressly conditioned upon each of the following, for the benefit of RDR, any of which may be waived in writing by RDR:
(a) CITY shall have deposited with Escrow Holder all sums and documents required pursuant to Section 4.1 above and otherwise paid any fees and costs required by this Agreement.
(b) CITY shall have timely performed each obligation and covenant which are required to be performed prior to the Closing Date as established in this Agreement.

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(c) All representations and warranties of CITY hereunder shall be true and correct in all material respects as of the Closing Date, as if may on and as of the Closing Date.

4.4. Conditions Precedent to CITY’s Obligations. CITY’s obligation to buy the Public Benefit Property is expressly conditioned upon each of the following, for the benefit of CITY, any of which may be waived in writing by CITY in its sole discretion:
(a) City shall have deposited with Escrow Holder all sums and documents required pursuant to Section 4.2 above.
(b) City shall have timely performed each obligation and covenant of City required pursuant to this Agreement.
(c) On or before the Close of Escrow, Title Company shall have committed to issue to CITY the Title Policy in a form acceptable to the CITY for the Property, as resulting from RDR’s subdivision map process containing eight (8) parcels, in full or part, into and creating the Property.
(d) All representations and warranties of RDR hereunder shall be true and correct in all material respects as of the Closing Date, as if may on and as of the Closing Date. (e) No material adverse change shall have occurred to the condition of the Public Benefit Property or the improvements thereon.

4.5. Failure of Conditions Precedent to CITY's Obligations. CITY's obligations with respect to the transactions contemplated by this Agreement are subject to the satisfaction of the condition’s precedent to such obligations for CITY's benefit set forth in Section 4.4 above. If CITY delivers the Disapproval Notice or if CITY terminates this Agreement by notice to Seller because of the failure of such condition precedent, then Escrow Holder shall return the Deposit to CITY (including any interest accrued thereon ) in accordance w ith CITY's written instructions within five (5) business days following CITY's delivery of a written termination notice to Seller and Escrow Holder, CITY shall pay one-half (½) of any Escrow cancellation fees or charges, and except for any party ’s indemnity obligations under the Agreement which expressly survive termination of the Agreement, the Parties shall have no further rights or obligations to one another under this Agreement.

4.6. Default; Cure . Time is of the essence in this Agreement and if CITY (the “Defaulting Party”) fails to deposit any of the amounts due pursuant to this Agreement, or to perform any other act when due, then the other Party (the “Non-Defaulting Party”) may initiate any of its rights under this Agreement, or available at law or in equity, by notice in writing to the Defaulting Party and Escrow Holder. Should CITY default, RDR shall be entitled to retain the Deposit as liquidated damages pursuant to Section 4.8 below. Except as provided in Section 4.5 above, if the Defaulting Party has not fully cured the default within seven (7) calendar days after receipt of said notice (or if such 7-day period would extend beyond the Closing Date, then by the Closing Date) by the Defaulting Party, Escrow Holder may be instructed by the Non -Defaulting Party to cancel this Escrow and the Non -Defaulting Party shall thereupon be released from its obligations under this Agreement.

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4.7. LIQUIDATED DAMAGES. IN THE EVENT THE CLOSE OF ESCROW AND

THE CONSUMMATION OF THE TRANSACTION HEREIN CONTEMPLATED DO NOT

OCCUR AS HEREIN PROVIDED BY REASON OF A DEFAULT OF EITHER PARTY, AND

THE PARTIES AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES THAT EITHER PARTY MAY SUFFER.

THEREFORE, RDR AND CITY HEREBY AGREE THAT A REASONABLE ESTIMATE OF

THE TOTAL NET DETRIMENT THAT EITHER PARTY WOULD SUFFER IN THE EVENT

THAT EITHER PARTY DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE PUBLIC BENEFIT PROPERTY IS AND SHALL BE, AS THE NON DEFAULTING PARTY’S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), THE DEPOSIT.

SAID AMOUNT SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR

THE BREACH OF THIS AGREEMENT BY EITHER PARTY , ALL OTHER CLAIMS TO

DAMAGES OR OTHER REMEDIES BEING HEREIN EXPRESSLY WAIVED BY THE NON DEFAULTING PARTY . THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED

DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED

TO CONSTITUTE LIQUIDATED DAMAGES TO THE SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. EACH PARTY HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. _________________________ ______________________

CITY'S INITIALS RDR INITIALS

4.8. CITY's Remedies . The Parties agree that if the sale contemplated by this Agreement is not completed as herein provided solely by reason of any material default of RDR, then in addition to the return of the Deposit and all interest accrued thereon, CITY shall have the right to pursue any remedy available at law or in equity for such default of RDR, including, without limitation, the specific performance of this Agreement.

4.9 Special Duties and Obligations of RDR and CITY. In addition to the obligations in this Agreement, each Party has a specific condition precedent that must be completed or commenced to a degree reasonably satisfactory to the other Party. Some obligations may not be complete until after the Close of Escrow but the obligations to complete obligations shall survive the Close of Escrow and be enforceable pursuant to the terms of this Agreement.

CITY:

a). CITY agrees to conditionally defer CITY imposed development fees (to be agreed upon at the time of payment) equal in dollar amount to the monies to be paid by the Anaverde Nuevo Development (adjacent to RDR’s Ritter Ranch development). The deferred monies shall be due and payable to the CITY in full, or on, or before ____________.

(b) Use its best efforts to cooperate and expedite the issuance of the Community Facilities District Bonds, as related to the issuance referenced as CFD-2022-3.

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RDR:

a). RDR completes and achieves at its own sole cost, a subdivision map that forms the Property.

b). Remove, to the CITY’s satisfaction, any CITY liability or duly to make payment, in full or part, of any type or nature, on any bonds encumbering the Property, and have the title insurance policy clearly reflect this removal.

c). Amend all community facilities district documents, including maps, to exclude the CITY, unless CITY agrees to an alternate proposal. Any such alternate proposal, if accepted by CITY must be memorialized in writing and attached to this Agreement.

d). Land use entitlement modifications, substitutions, and related actions: RDR shall, at its own sole cost and expense, commence and complete, including but not limited to, all required environmental studies, engineering and planning actions involving updating or superseding with a new specific plan the existing Ritter Ranch Specific Plan, including the Property.

e). Satisfy at its own sole cost and expense, the other requirements imposed by the Ritter Ranch Specific Plan, with respect to all Phase 1A entitlements and the completion of conditions and entitlements of Phase 1B maps and Development approvals.

f). Design and construct the public water pump station that will permit the construction of residential units within Phase 1A and Phase 1B of the Ritter Ranch Specific Plan.

ARTICLE V

ESCROW

5.1. City termination of purchase without liability or obligation to RDR.

Notwithstanding anything contrary in this Agreement, RDR and City agree that further engineering, land use, and hydrologic analysis may determine that the Public Benefit Property is unnecessary or undesirable for its expected use by City. Prior to the adva nce of the sale of the Public Benefit Property by the opening of escrow, and as provided in Section 5.3 of this Agreement, the City, in its sole discretion, shall determine if it can provide necessary and desirable water to support Phase 1A and 1B of the Ritter Ranch Specific Plan without the need to acquire by purchase the Public Benefit Property from RDR, by any other lawful means as decided by the City, which may include infrastructure, contribution to funding of Party’s or third parties (not yet identified) or any other comparable means by which City’s obligations can be satisfied. If the City so determines, it shall provide written notice to RDR, and the Parties agree that this Agreeme nt shall be deemed to be immediately terminated, with each Party bearing its own costs and expenses related to this agreement without contribution, reimbursement, or any consideration of any type or nature due from either Party to the other.

5.2. Agreement to Constitute Escrow Instructions . This Agreement and any General Provisions of Escrow Holder (the “General Provisions ”) collectively shall constitute escrow instructions. A copy hereof shall be deposited with Escrow Holder for this purpose. In the event

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of any inconsistency between the terms of the General Provisions and this Agreement, the provisions of this Agreement shall prevail to the extent of any such inconsistency.

5.3. Escrow Holder. The escrow for the Public Benefit Property (“Escrow”) shall be with the Title Insurance Company (“Escrow Holder”).

5.4. Opening of Escrow. Escrow shall open on the date which is seven (7) days after a copy of this Agreement, properly executed by the Parties hereto, has been deposited with Escrow Holder (the “Opening of Escrow ”), which copy the Parties hereto agree shall be delivered to Escrow Holder immediately following execution. Escrow Holder shall notify the Parties immediately, by email notice and written notice delivered by prepared first class U .S. postage, upon receipt of a copy of this Agreement as so executed as to the date of the Opening of Escrow.

5.5. Due Diligence. After the Opening of Escrow, City shall have a 90-business day due diligence period to assess the obligations in Section 5.0.

5.6. Close of Escrow. The closing shall occur thirty (30) days after CITY’s approval or as may be a greed upon in writing by the Parties. For purposes of this Agreement, the terms “Closing Date”, “Closing” and “Close of Escrow” mean the date on which the Closing occurs, and the term “Closing” means the recordation of the Grant Deed.

5.7. Title Policy . Escrow Holder is hereby instructed to deliver to CITY through Escrow ALTA standard coverage owner's policy of title insurance from ____________Title Insurance Company (“Title Company”) dated the date and time of Closing with liability in the amount of the Purchase Price (the “Title Policy”). The Title Policy shall insure CITY, as owners of good, marketable, and indefeasible fee title to the Public Benefit Property subject only to (a) the standard printed title company exceptions and (b) the Permitted Ex ceptions and any other exceptions approved by or created by CITY.

5.8. Recordation of the G rant Deed and Delivery of Funds . Upon receipt of the documents and sums described in Sections 4.1, 4.2, and 4.9 and this Article V, the Escrow Holder shall cause the Grant Deed to be recorded in the office of the County Recorder of Los Angeles County, California, and shall deliver the proceeds of the Escrow less appropriate charges to “_____.” A conformed copy of the recorded Grant Deed shall be delivered to CITY immediately following the Closing. All sums to be disbursed to any party by the Escrow Holder shall be by certified or cashier's check of the Escrow Holder or by wire transfer if the Party so advises Escrow Holder.

5.9. Prorations. Real property taxes and any other assessment payment shall be prorated as of the Close of Escrow and CITY shall take the Property without any tax lien or liability of any type or nature.

5.10. Costs of Escrow.
(a) CITY shall pay (i) one-half (1/2) of the Escrow Holder's fee and (ii) the cost of any title insurance coverage or endorsements in excess of the ALTA standard coverage owner's policy of title insurance.

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(b) RDR as Seller, shall pay (i) one-half (1/2) of the Escrow Holder's fee , (ii) the recording fee for the Grant Deed, (iii) the cost of the ALTA standard coverage owner's policy of title insurance, and (iv) all documentary transfer taxes, if applicable.

5.11. Broker's Commission . C ITY and RDR each represent that a broker did not represent it in connection with this transaction and each Party hereby agrees to indemnify the other Party from any claims, damage, or expense for any and all commission fees.

5.12. Statement of CITY and RDR Concerning Executory Terms and Close of Escrow .

CITY and RDR each acknowledge that the consummation of the Escrow is contingent upon compliance with some or all of the executory terms and provisions of this Agreement and that the Parties hereto are the sole persons or entities entitled and authorized to determine whether all executory terms and provisions required to be performed prior to the close of Escrow have been satisfied or deemed satisfied prior to the close of the Escrow. Accordingly, prior to the Closing Date, CITY and RDR shall each deposit with Escrow Holder a written statement acknowledging that all executory terms and provisions of this Agreement, insofar as the same relate to each Party respectively and any obligation of Escrow Holder relating thereto, have been satisf ied, deemed satisfied or waived. Deposit of such statement with the Escrow Holder shall constitute each Party's authorization to close Escrow.

5.13. Termination of Agreement. Except as otherwise expressly provided herein, in the case of termination of this Agreement in accordance with its terms and cancellation of the Escrow, all documents and funds (together with any interest accrued thereon) previously deposited into the Escrow shall be promptly returned to the depositing Party by the person or entity then holding such documents and funds, and all rights and obligations of the Parties existing hereunder shall thereafter terminate and be of no further force and effect.

5.14. Escrow Cancellation Charges. In the event that this Escrow shall fail to close by reason of the default of any Party hereunder, the defaulting Party or Parties shall be liable for all Escrow cancellation charges. In the event that the Escrow shall fail to close for any other reason, each Party shall be liable for one-half (1/2) of all Escrow cancellation charges.

5.15. Delay in Closing; Authority to Close . If Escrow Holder cannot close this Escrow on or before the Closing Date, it will, nevertheless, close the same when all conditions have been satisfied or waived, notwithstanding that one or more of such conditions has not been timely performed, unless a fter the Closing Date and prior to the Close of the Escrow, Escrow Holder receives a written notice to terminate the Escrow and this Agreement from a Party who, at the time such notice is delivered, is not in default her eunder. The exercise of such right, and the return of moneys and documents, shall not affect the right of the permitted in this Agreement for the other Party's breach of this Agreement. In addition, the giving of such notice, the failure to object to termination of the Escrow or the return of moneys and documents shall not affect the right of the other Party or Parties to pursue other remedies permitted hereunder for the breach of the Party who gives such notice.

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ARTICLE VI

MISCELLANEOUS PROVISIONS

6.1. Attorneys' Fees. In any legal proceeding between C ITY and RDR seeking enforcement of or attempting to construe any of the terms and provisions of this Agreement, or in connection with any of the property described herein, including, without limitation, insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing Party in such action shall be awarded, in addition to damages, injunctive or other relief; its reasonable costs and expenses, including, without limitation, service of process, filing fees, court and court reporter costs, investigation costs, expert witness fees and the cost of any bonds, and reasonable attorneys' fee.

6.2. Notices. All notices required or permitted by this Agreement shall be in writing and may be delivered in person (by hand delivery or professional messenger service) to either Party or may be sent by registered or certified mail, with postage prepaid, return receipt requested or delivered by Express Mail of the U.S. Postal Service or Federal Express or any other courier service guaranteeing overnight delivery, charges prepaid, addressed as follows (telephone numbers and email addresses have been provided for convenience only):

If to City at:

Ronda Perez, City Manager
City of Palmdale
38300 Sierra Highway, Suite A
Palmdale, California 93550
Telephone: (661) 267-5177
Email: [email protected]

William P. Curley III, Special Counsel
Harper & Burn LLP
453 S. Glassell Street
Orange, California 92866
Telephone: (714) 771-7729
Email: [email protected]

If to RdR at:

John Dinan, Secretary and General Counsel
RdR Development Holdings, LLC
2121 N. Pearl St., Suite 600
Dallas, TX 75201
Telephone: (214) 389-0833
Email: [email protected]

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If to Escrow Holder at:

Escrow Company
Attention:

Telephone:

Email:

If to Title Company at:

Title Insurance Company
Attention:

Telephone:

Email:

Any such notice sent by registered or certified mail, return receipt requested, shall be deemed to have been duly given and received seventy-two (72) hours after the same is so addressed and mailed in Los Angeles, Orange, San Bernardino , or Los Angeles Counties with postage prepaid. Notices delivered by overnight service shall be deemed to have been given twenty -four (24) hours after delivery of the same, charges prepaid, to the U.S. Postal Service or private courier.

Any notice or other document sent in any other manner shall be effective only upon actual receipt thereof. Any Party may change its address for purposes of this Section by giving notice to the other Party and to the Escrow Holder as herein provided.

6.3. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of each of the Parties hereto and their respective successors and permitted assigns.

6.4. Assignment. This Agreement may not be assigned by either party without the express written consent of the other party first had and obtained. Any assignment of delegation of rights, duties, or obligations hereunder made without the prior written consent of the other Party or Parties hereto shall be void and of no effect. No such assignment shall be deemed to relieve the assigning Party from any liability or responsibility hereunder.

6.5. Relationship of Parties. The relationship of the Parties to this Agreement shall be solely that of CITY, in its capacity as buyer of the Public Benefit Property; and RDR as Seller of the Public Benefit Property, and nothing herein contained shall be construed otherwise.

6.6. Governing Law . This Agreement shall be governed by, interpreted under, construed, and enforced in accordance with the internal laws of the State of California with venue, for any action being in the State of California or Federal court with jurisdiction over the City of Palmdale, California.

6.7. Entire Agreement; Agreement. This Agreement contains all of the agreements of the Parties hereto with respect to the matters contained herein and no prior or contemporaneous agreement or understanding, oral or written, pertaining to any such matters shall be effective for any purpose. No provision of this Agreement may be modified, waived, amended , or added to except if in writing and signed by the Party against which the enforcement of such modification, waiver, amendment or addition is or may be sought.

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6.8. Pronouns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the Parties may require.

6.9. Headings. The headings of this Agreement are for purposes of reference only and shall not limit or define the meaning of the provisions of this Agreement.

6.10. Severability. If any paragraph, section, sentence, clause or phrase contained in this Agreement shall become illegal, null or void, against public policy, or otherwise unenforceable, for any reason, or shall be held by any court of competent jurisdiction to be illega l, null or void, against public policy, or otherwise unenforceable, the remaining paragraphs, sections, sentences, clauses or phrases contained in this Agreement shall not be affected thereby.

6.11. Waiver. The waiver of any breach of any provision hereunder by City or CITY shall not be deemed to be a waiver of any preceding or subsequent breach hereunder. No failure or delay of any Party in the exercise of any right given hereunder shall constitute a waiver thereof nor shall any partial exercise of any right preclude further exercise thereof.

6.12. Further Assurances. CITY and RDR each agree to do such further acts and things and to execute and deliver such additional agreements and instruments as the other may reasonably require consummating, evidence, or confirm the sale or any other agreement contained herein in the manner contemplated hereby.

6.13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which when taken together shall constitute one and the same instrument.

6.14. Time of Essence. Time is of the essence in this Agreement as to all dates and time periods set forth herein.

6.15. Eminent Domain Proceedings. The Parties shall promptly notify the other Party of any condemnation proceeding commenced prior to the Close of Escrow. If any such proceeding relates to or may result in the loss of any material portion of the Public Benefit Property, CITY may, at its sole option, elect either to (i) terminate this Agreement, in which event all funds deposited (including all interest accrued thereon) into Escrow by CITY or released to RDR shall be returned to CITY, all instruments shall be returned to the respective Parties who deposited the same, and neither Party shall have any further rights or obligations hereunder except as provided in Section 5.11, or (ii) continue the Agreement in effect, in which event upon the Close of Escrow, CITY, as buyer, shall be entitled to any compensation, awards, or other payments or relief resulting from such casualty or condemnation proceeding.

6.16. Actual Knowledge. For purposes of this Agreement, “actual knowledge” for RDR shall mean the current, actual (as opposed to constructive, imputed , or implied) knowledge of Secretary and General Counsel. “Actual knowledge” for CITY, shall mean the current, actual (as opposed to constructive, imputed, or implied) knowledge of the City Manager.

6.17. No Third-Party Beneficiaries. This Agreement is not intended to create any third- party beneficiaries, and the execution and delivery of this Agreement shall not be deemed to confer

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any rights upon, nor obligate any of the Parties to any person or entity other than the Parties.

Additionally, no third party may enforce the terms of this Agreement.

6.18. Force Majeure. In addition to specific provisions of this Agreement, performance by either Party hereunder shall not be deemed to be in default where delays or failures to perform are due to the elements, fire, earthquakes or other acts of God, strikes, labor disputes , lockouts, acts of the public enemy, riots, insurrections, or governmental restrictions imposed or mandated by other governmental entities, or litigation filed by anyone which may impair the ability of the Parties to satisfy their respective obligations created in this Agreement. CITY and RDR may also extend times of performance under this Agreement in writing, if agreed to by all of the Parties.

6.19. Recitals. The provisions of the recitals of this Agreement shall constitute operative and enforceable provisions of this Agreement.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

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In Witness Whereof, the parties hereto have caused this Contract to be executed and attested by their respective officers thereunto duly authorized.

CITY OF PALMDALE RDR DEVELOPMENT HOLDINGS, LLC

_______________________________ _______________________________ Ronda Perez John Dinan
City Manager Secretary and General Counsel

Dated: _________________________ Dated: _________________________

APPROVE AS TO FORM:

_________________________________
William P. Curley, III
City Attorney

ATTEST:

_______________________
Roxanne Faber
Acting City Clerk

EXHIBIT “A-1”
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EXHIBIT “A-1”

DEPICTION OF PUBLIC BENEFIT PROPERTY
[To be inserted]
Real Estate
Appraisal Report
Prepared For:

John Dinan and Fernando Dutra
RdR Co, Inc.
2121 N. Pearl Street, Suite 600
Dallas, Texas 75201
520 Residential Lots – Ritter Ranch
Attachment 3

September 5, 2023

John Dinan and Fernando Dutra
RdR Co, Inc.
2121 N. Pearl Street, Suite 600
Dallas, Texas 75201

Re: Real Estate Appraisal Report
520 Residential Lots – Ritter Ranch
South and North of Elizabeth Lake Road, East of Bouquet Canyon Road Los Angeles County, California 93551

File Name: TDG 2023 102

Dear Mr. Dinan and Dutra,

Pursuant to your request, I performed an appraisal of the above referenced property as more particularly described in the appraisal report to follow. More specifically, the subject property is a portion of an approved planned residential subdivision known as Ritter Ranch. Located along Elizabeth Lake Road, 4.75 miles west of Highway 14 in Palmdale, in North Los Angeles County, the subject portion of Ritter Ranch features +/- 652.00 gross acres of non-contiguous land with SP (Specific Plan) land uses. The subject is a portion of Ritter Ranch, which was approved in February 1992 includes a total of 10,625 acres with a residential mix of approximately 7,200 units, open space, community parks, golf course, schools, commercial, and roadways.

The portions that are the subject of this appraisal include 490 acres within Planning Area 1 (portion), as well as all of Planning Area 3 (159 acres) . The subject portions included in this appraisal are part of a transfer plan (see Transfer Site Plan) and include a total of 520 residential units and six acres of commercial. As of the writing of this report, the subject lands are in a vacant, raw state and would require infrastructure in place to begin development. Please note, the commercial acreage has limited contribution to the overall residential land value and is included in our overall analysis.

Mr. Dinan and Dutra
RdR Development Holdings, LLC

Page 2 ends

The report was prepared for RdR Development Holdings, LLC and related parties and is intended only for their specified use. Other users may include the City of Palmdale and may be subject to outside agency review. It may not be distributed to or relied upon by other persons or entities without the written permission of The Doré Group. The intended use is to provide market value.

This appraisal was prepared in conformance with the Uniform Standards of Professional Appraisal Practice (U.S.P.A.P.) and the Code of Professional Ethics and Standards of Professional Conduct of the Appraisal Institute.

Your attention is directed to the Hypothetical Conditions, Extraordinary Assumptions, and General Conditions and Assumptions sections of this report (beginning on page 10). Acceptance of this report constitutes an agreement with these conditions and assumptions. In particular, I note the following:

Hypothetical Conditions:

• There are no hypothetical conditions for this appraisal.

Extraordinary Assumptions:

• I have assumed that the development of 520 units between Planning Areas 1 (portion) and 3 is approved for development as identified.

Please reference page 14 of this report for important information regarding the scope of research and analysis for this appraisal, including property identification, inspection, highest and best use analysis and valuation methodology.

I certify that I have no present or contemplated future interest in the property beyond this estimate of value. I have not performed services, as appraiser, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

Based on the appraisal described in the accompanying report, subject to the Hypothetical Conditions, Extraordinary Assumptions, and General Conditions & Assumptions, I have made the following value conclusion(s):

Bulk Market Value

TOTAL VALUE:

$14,600,000
PER UNIT (RD.): $27,990

Mr. Dinan and Dutra
RdR Development Holdings, LLC

Page 3 ends

The market exposure time 1 preceding August 1, 2023 , would have been 12 months and the estimated marketing period2 as of August 1, 2023, is 12 months.

Thank you for the opportunity of submitting this appraisal. If I can be of further service, please do not hesitate to call.

Respectfully submitted,
The Doré Group, Inc.

Lance W. Doré, MAI, FRICS
President / CEO
California-AG 002464
[email protected]

1 Exposure Time: see definition in the Addenda.
2 Marketing Time: see definition in the Addenda.

TABLE OF CONTENTS

Table of Contents ............................................................................................................................ 5 Summary of Salient Facts & Conclusions ........................................................................................ 6 Definition of Market Value .............................................................................................................. 9 Hypothetical Conditions and Extraordinary Assumptions ............................................................ 10 General Conditions and Assumptions ........................................................................................... 11 Scope of Work ............................................................................................................................... 15 Regional Map ............................................................................................................................ 18 Regional Description – Los Angeles County .................................................................................. 19 Area Description – City of Palmdale .............................................................................................. 27 Ritter Ranch Overview ................................................................................................................... 30 Property Description ..................................................................................................................... 32 Ritter Ranch Conceptual Site Plan............................................................................................. 35 Subject Aerial ............................................................................................................................ 37 Zoning ............................................................................................................................................ 38 Assessment and Taxes ................................................................................................................... 39 Subject Photographs ................................................................................................................. 40 Highest and Best Use ..................................................................................................................... 42 Valuation Methodology ................................................................................................................. 45 Cost Approach ........................................................................................................................... 45 Income Approach ...................................................................................................................... 45 Sales Comparison Approach ..................................................................................................... 45 Final Reconciliation ................................................................................................................... 45 Methodologies Applied ............................................................................................................. 45 Sales Comparison Approach – Bulk Land Value ............................................................................ 46 Land Comparables ..................................................................................................................... 46 Comparable Location Map ........................................................................................................ 49 Land Comparable Photographs ................................................................................................. 50 The Comparison Process ........................................................................................................... 53 Sales Comparison Approach Conclusion ................................................................................... 55 Discounted Cash Flow Land Residual ............................................................................................ 58 Discounted Cash Flow Analysis In Subdivision Development Analysis – 520 Homes ............... 59 Final Reconciliation........................................................................................................................ 64 Value Conclusion ....................................................................................................................... 64 Certification Statement ................................................................................................................. 65 Addenda ........................................................................................................................................ 67 Qualifications ............................................................................................................................ 74

TDG 2023 102 6

SUMMARY OF SALIENT FACTS & CONCLUSIONS

GENERAL

SUBJECT:

520 Residential Lots / Six Acres Commercial - Ritter Ranch South and North of Elizabeth Lake Road, East of Bouquet Canyon Road
Los Angeles County, California 93551

OWNER:

RdR Development Holdings, LLC

LEGAL DESCRIPTION:

Lengthy, retained in my files

ASSESSOR PARCEL NUMBER:

Please note, gross acreage was used within this analysis.

DATE OF VALUE: August 1, 2023

DATE OF REPORT:

September 5, 2023
INTENDED USE:

The intended use is to determine market value.

INTENDED USER(S):

RdR Development Holdings, LLC. Other intended users
include the City of Palmdale and may be subject to outside agency review. It may not be distributed to or relied upon by other persons or agencies without written permission of The Doré Group.

PROPERTY RIGHTS: Fee Simple

HYPOTHETICAL CONDITIONS: There are no hypothetical conditions for this appraisal.

APN Planning Area Acres
3206-007-001 3 149.46
3206-007-002 3 10.53
3205-002-053 1 138.24
3205-002-028 1 40
3206-005-008 (portion) 1 156.84
3206-006-028 (portion) 1 126.26
3206-025-001 (portion) 1 3.14
3205-002-051 1 27.53
Total 652.00

ASSESSOR PARCEL NUMBERS

TDG 2023 102 7

EXTRAORDINARY
ASSUMPTIONS:

I have assumed that the development of 520 units between Planning Areas 1 (portion) and 3 is approved for
development as identified.

CURRENT LISTING /
CONTRACT(S):

The subject property is not currently under contract. An Exclusive Offering Memorandum was given for portions of Phase 1A of the Ritter Ranch Larger Parcel, with offers due by March 7, 2023. However, Phase 1A is not included within my analysis and was not given consideration in determining value.

SALE HISTORY:

The subject has transferred in the past 10 years, according to public records.

On August 28, 2020, the subject lands were transferred
between Preston Hollow Capital, LLC to RdR Development
Holdings, LLC. The Grantor and Grantee in this conveyance were comprised of the same parties with same proportional interest. No prior sales information was available via public records.

PROPERTY

LAND AREA:

Total: 652.00 acres

ENTITLEMENTS: The subject of this appraisal includes the entirety of Planning Area 3 (159 acres – 36 Residential Lots) and a portion of Planning Area 1 (484 acres – 484 Residential Lots / Six Acres Commercial) for a total of 520 lots . The Ritter Ranch Larger Parcel was approved in February 1992. Please note, the
subject property is in a vacant, raw state as of the date of value, and further approval would be required prior to
development. See Extraordinary Assumption.

ACCESS: Paved and dirt roads.

TOPOGRAPHY: The subject has level to moderately sloped terrain.

UTILITIES: Electric power is available along Elizabeth Lake Road. Utilities are available but will require extension prior to development.

TDG 2023 102 8
IMPROVEMENTS: None

PERSONAL PROPERTY: None

ZONING:

SP (Specific Plan – Ritter Ranch)
FLOOD ZONE:

The subject is primarily within Flood Zone X, which is
identified with areas that have a corresponding one percent chance of an annual flood event. Flood Insurance is not mandatory, but available for purchase.

FEMA Map Number: 06037C0635F
FEMA Map Date: September 26, 2008

Please note, Rogers Creek traverses the northernmost areas of Planned Area 1 and is within Flood Zone A. Flood Zone A identifies areas inundated by 100-year flooding.

HIGHEST AND BEST USE
Site:

Develop single-family residential homes
As Improved: Not warranted as the subject is vacant land

VALUE INDICATIONS

RECONCILED VALUE(S): Bulk Market
Value

Value Conclusion(s) $14,600,000
Effective Date(s) August 1, 2023
Property Rights Fee Simple

TDG 2023 102 9

DEFINITION OF MARKET VALUE

I have used the following market value definition:

MARKET VALUE:
“The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgably, and for self -interest, and assuming that neither is under undue duress.”3

PROPERTY RIGHTS APPRAISED
The property right of ownership appraised was the fee simple estate. Fee simple interest does include mineral rights, unless otherwise stated. The fee simple title can be defined as follows:

“Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”4

3 The Appraisal Institute, The Appraisal of Real Estate - 14th Ed., (Chicago, IL: The Appraisal Institute, 2013), p. 59. 4 Ibid.

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HYPOTHETICAL CONDITIONS AND EXTRAORDINARY ASSUMPTIONS

Acceptance of and/or use of this report constitutes acceptance of the indicated Hypothetical Conditions and Extraordinary Assumptions; these can only be modified in a written document(s) executed by both parties.

HYPOTHETICAL CONDITIONS
A hypothetical condition is defined as “That which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.”5

The following hypothetical conditions apply to this specific appraisal assignment:

• There are no Hypothetical Conditions for this appraisal.

EXTRAORDINARY ASSUMPTIONS
An extraordinary assumption is defined as “An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions.

Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis.”6

The following Extraordinary Assumptions apply to this specific appraisal assignment:

• I have assumed that the development of 520 units between Planning Areas 1 (portion) and 3 is approved for development as identified.

5 The Appraisal of Real Estate 14th Edition, Page 332, (Chicago: Appraisal Institute, 2013). 6 Ibid.

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GENERAL CONDITIONS AND ASSUMPTIONS

The appraisal has been completed subject to the following General Conditions and Assumptions:

• The appraisal was prepared in conformance with the Uniform Standards of Professional Appraisal Practice (U .S.P.A.P.), and the Code of Professional Ethics and Standards of Professional Conduct of the Appraisal Institute. The development process used was a complete analysis documented in an appraisal report.

• This appraisal was completed per the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP) and those additional requirements expected of a member of the Appraisal Institute. The development process used was a complete analysis that is documented in this appraisal report.

• We were not provided with a preliminary title report. We reserve the right to review and adjust our market value upon obtaining a current preliminary title report.

• By use of this appraisal report, each party that uses this report agrees to be bound by all of the Hypothetical Conditions and Extraordinary Assumptions stated herein. The opinions are only as of the date stated in the appraisal report. Changes since that date in external and market factors, or in the subject property itself, can significantly affect the conclusions presented in the appraisal report.

• This appraisal is to be used only for the purpose stated herein. While distribution of this appraisal in its entirety is at the discretion of the client, individual sections shall not be distributed as this report is intended to be used in whole and not in part.

• The appraised value was based on the assumption that there were no tax liens affecting the subject property. We noted in the property tax section of our report, the subject is current in the payment of property taxes according to the Los Angeles County Treasurer – Tax Collector. Please note, our reconciled market value has assumed there are no outstanding tax liens on the property. It was assumed that any special assessments affecting the subject property are typical and appropriate for the area and do not have an impact on the value conclusion in this report and that any outstanding bonds have been paid.

• All files, work papers and documents developed in connection with this assignment are the property of The Doré Group . No part of this appraisal, its value estimates , or the identity of the firm or the appraiser(s) may be communicated to the public through advertising, public relations, media sales, or other media without The Doré Group's prior written consent. If the appraisal report is referred to or included in any offering material or prospectus, the report shall be deemed referred to or included for informational purposes only and The Doré Group, its employees, and the appraiser(s) have no liability to such recipients. The Doré Group disclaims any and all liability to any party other than the party that retained The Doré Group to prepare the appraisal report.

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• The information contained in this appraisal report, or upon which the report is based, has been gathered from sources the appraiser(s) assumes to be reliable and accurate. The owner of the subject property may have provided some of such information. Neither the appraiser(s), nor The Doré Group, shall be responsible for the accuracy or completeness of such information, including the correctness of estimates, opinions, dimensions, sketches, exhibits, and factual matters. Any authorized user of the appraisal report is obligated to bring to the attention of The Doré Group any inaccuracies or errors that it believes are contained in the report. Any plans provided are intended to assist the client in visualizing the property; no other use of these plans is intended or permitted.

Appraisals are based on the data available at the tim e the assignment is completed.

Amendments/modifications to appraisals based on new information made available after the appraisal was completed will be made, as soon as reasonably possible, for an additional fee.

• No part of the appraisal report shall be used in conjunction with any other analyses.

Reference to the Appraisal Institute or to the MAI designation is prohibited. Except as may be otherwise stated in the letter of engagement, the appraisal report may not be used by any person(s) other than the party(ies) to whom it is addressed or for purposes other than that for which it was prepared. Any authorized user(s) of this appraisal report who provides a copy to, or permits reliance thereon by, any person or enti ty not authorized by The Doré Group in writing to use or rely thereon, hereby agrees to indemnify and hold The Doré Group , its affiliates and their respective shareholders, directors, officers and employees, harmless from and against all damages, expenses, claims and costs, including attorneys' fees, incurred in investigating and defending any claim arising from or in any way connected to the use of, or reliance upon, the appraisal report by any such unauthorized person(s) or entity(ies).

• If the appraisal report is submitted to a lender or investor with the prior approval of The Doré Group, such party should consider this report as only one factor, together with its independent investment considerations and underwriting criteria, in its overall investment decision. Such lender or investor is specifically cautioned to understand all Hypothetical Conditions and Extraordinary Assumptions incorporated in this appraisal report.

• The appraiser (s) may not divulge the material (evaluation) contents of the report, analytical findings, or conclusions, or give a copy of the report to anyone other than the client, legal authorities via subpoena, or the Appraisal Institute.

• The appraisal report is based on the assumption of: (a) responsible ownership and competent management of the subject property; (b) no hidden or unapparent conditions of the subject p roperty, subsoil or structures that render the property more or less valuable (no responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them); (c) full compliance with all applicable federal, state and local zoning and environmental regul ations and laws, unless noncompliance is stated, defined and considered in the Report; and (d) all required licenses, certificates of occupancy and other governmental consents have been or can be

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obtained and renewed for any use on which the value opinion contained in the appraisal report is based.

• The physical condition of the improvements considered by the appraiser(s) is based on visual inspection by the appraiser(s). The Doré Group assumes no responsibility for the soundness of structural components or for the condition of mechanical equipment, plumbing or electrical components.

• The presence of hazardous substances may affect the value of the subject property. No hidden or unapparent conditions of the subject property, subsoil or structure, including without limitation , asbestos, formaldehyde foam insulation, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals , which would make the property more or less valuable, were discovered by or made known to the appraiser(s). The appraiser(s) is not qualified to test for such substances and n o responsibility is assumed for such conditions or engineeri ng necessary to discover them. Unless otherwise stated, th e appraiser(s) assumed there was no existence of hazardous materials or conditions, in any form, on or near the subject property.

• No opinion is intended to be expressed and no responsibility is assumed for the legal description or for any matters that are legal in nature or require legal expertise or specialized knowledge beyond that of a real estate appraiser. Title to the subject property was presumed to be good and merchantable and t he property was appraised assuming there were no adverse easements , encroachments, liens, encumbrances, special assessments, or other restrictions.

• Unless stated herein, the subject property is assumed to be outside of areas where flood hazard insurance is mandatory. Maps used by public and private agencies to determine these areas are limited with respect to accuracy. Due diligence has been exercised in interpreting these maps, but no responsibility is assumed for misinterpretation.

• The Doré Group was not provided with a Biological Survey detailing possible biological species. Without a recent biological survey of the property, it could not be determined which species are actually on or frequent the subject land. The vegetation cover on the subject land is typical for the area and may provide habitat for many indigenous animal species found throughout the area.

• No opinion is expressed with regard to potential seismic impact and it was assumed that the subject’s potential risks are similar to those shared by most properties throughout the region. The Doré Group makes no warranty as to the seismic stability of the subject land. The assumption was made that any future development of the property, if any, would occur in accordance with all appropriate regulations and ordinances regarding grading, fill, and applicable building codes.

• Except as may be otherwise stated in the letter of engagement, the appraiser(s) shall not be required to give testimony in any court or administrative proceeding relating to the subject property or the appraisal. If the appraiser (s) is subpoenaed pursuant to a court order, the client agrees to pay The Doré Group’s regular per diem rate plus expenses.

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• In the event of a claim against The Doré Group, its affiliates, their respective officers or employees, or the appraiser(s) in connection with or in any way relating to this appraisal report or this engagement, the maximum damages recoverable shall be the amount of the monies actually collected by The Doré Group or its affiliates for this appraisal report and under no circumstances shall any claim for consequential damages be made.

• Any estimate of insurable value, if included within the agreed upon scope of work and presented within this report, is based upon figures derived from a national cost estimating service and is developed consistent with industry practices. However, actual l ocal and regional construction costs may vary significantly from our estimate and individual insurance policies and underwriters have varied specifications, exclusions, and non - insurable items. As such, it is strongly recommended that the client obtain estimates from professionals experienced in establishing insurance coverage for replacing any structure.

This analysis should not be relied upon to determine insurance coverage. Furthermore, the appraiser(s) makes no warranties regarding the accuracy of this estimate.

• Necessary licenses, permits, consents, legislative or administrative authority from any local, state , or federal government , or private entity , are assumed to be in place or reasonably obtainable.

• We assumed no legal mining claims for surface or subsurface extraction. No documentation was located or provided that would support a mineral right claim.

However, even if mineral rights were allowed, it would not influence the value conclusions because the discovery, extraction, and marketing of mineral products usually requires the investment of large amount of capital over an extended period of time as well as a large element of risk. Mineral production is not typical in the subject area and is considered highly speculative.

• We assumed that any existing uses have met the requirements of the Clean Water Act (CWA), as stipulated in Section 402 & 404, which govern the discharging, dredging, or filling of any “waters of the U.S.” The “waters of the U.S.” include intermittent strea ms and wetlands as defined by the Army Corps of Engineers.

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SCOPE OF WORK

According to the Uniform Standards of Professional Appraisal Practice , it is the appraiser’s responsibility to develop and report a scope of work that results in credible results that are appropriate for the appraisal problem and intended user(s). Therefore, the appraiser must identify and consider:

● the client and intended users;
● the intended use of the report;
● the type and definition of value;
● the effective date of value;
● assignment conditions;
● typical client expectations; and
● typical appraisal work by peers for similar assignments.

In preparing this report, I investigated numerous land and improved sales and listings, as well as market rent comparables, from the area, and confirmed all data with buyers, sellers, brokers, property developers, leasing agents, and public officials when possible. I collected, confirmed, and reported data that were applicable in the valuation process. Data collection involved the use of various sources including the Multiple Listing Service, RealQuest ( a data collection service), Los Angeles County deed records, and in -house materials. The data collected and confirmed have been reported to an extent sufficient for the particular appraisal problem involved.

This appraisal is prepared for RdR Development Holdings LLC and related parties. The problem to be solved is to estimate the 1) Bulk Market Value of the subject lands, and 2) the Sum Retail of the Individual Units. The intended use is to determine Market Value.

SCOPE OF WORK

REPORT TYPE:

This is an appraisal report as defined by Uniform
Standards of Professional Appraisal Practice under
Standards Rule 2-2(A). This format provides a summary of the appraisal process, subject and market data and
valuation analyses.

PROPERTY IDENTIFICATION: The subject has been identified by the legal description , the assessors' parcel numbers , and the final tract map .

The legal descriptions are lengthy and retained in our files.

INSPECTION: Lance W. Doré, MAI, FRICS, inspected the subject property on August 1, 2023. At that time, a complete interior and

TDG 2023 102 16
exterior inspection of the subject property has been
made, and photographs taken.

MARKET AREA AND ANALYSIS OF
MARKET CONDITIONS:

A complete analysis of market conditions has been made.

The appraiser maintains and has access to comprehensive databases for this market area and has reviewed the
market for sales and listings relevant to this analysis.

HIGHEST AND BEST USE
ANALYSIS:

A complete as vacant and as improved highest and best
use analysis for the subject has been made. Physically
possible, legally permissible and financially feasible uses were considered, and the maximally productive use was
concluded.

VALUATION ANALYSES:

Cost Approach:

A cost approach was not applied as the subject is
unimproved land. Thus developing a cost approach is not warranted.

Sales Comparison Approach:

A sales approach was applied as there is adequate data to develop a value estimate and this approach reflects
market behavior for this property type.

Income Approach:

The income approach converts the anticipated flow of
future benefits (income) to a present value estimate
through a capitalization and or a discounting process. The income approach was not applied as we are valuing
vacant land with no improvements. However , a method
to value known as a Land Residual, or Subdivision Analysis uses a discounted cash flow model to support the present value of a “for sale” lot program. This method to value is similar to an income approach.

HYPOTHETICAL CONDITIONS:

There are no hypothetical conditions for this appraisal.

EXTRAORDINARY ASSUMPTIONS:

I have assumed that the development of 520 units
between Planning Areas 1 (portion) and 3 is approved for development as identified.

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DOCUMENTATION: The Doré Group was provided with the document(s) listed below. Unless noted, the document(s) did not indicate any unusual or detrimental conditions that have an impact on value. These documents were assumed to be accurate and
were relied upon in the valuation of the subject property.

• Ritter Ranch Exclusive Offering Memorandum
• Ritter Ranch Specific Plan
• Market Report, prepared by Zonda and dated
August 2021
• Transfer Site Plan
• A.L.T.A Land Title Surveys for Ritter Ranch
Property

No responsibility is assumed for any missing pertinent
data contained within these documents and the
reconciled value does not reflect knowledge of their
content.

TDG 2023 102 18

REGIONAL MAP

TDG 2023 102 19
REGIONAL DESCRIPTION – LOS ANGELES COUNTY

One of California’s oldest counties, Los Angeles County is situated in the southwest corner of the state and is
bordered by Kern County (north), 70 miles of the Pacific Ocean coastline and Orange County (south), Ventura
County (west), and San Bernardino County (east). With a land area of 4,752 square miles, it is home to 88
incorporated cities and is the most populous county in
the U.S. Most of the population resides in the southern and southwestern portions of the county, with major
population centers also located in the Los Angeles Basin, San Fernando Valley, and San Gabriel Valley and secondary centers in the Santa Clarita Valley, Crescenta Valley, and Antelope Valley.

The county is divided into the following major areas:

• EAST: Eastside, San Gabriel Valley, Pomona Valley
• WEST: Westside, Beach Cities
• SOUTH: South Bay, Palos Verdes Peninsula, South Los Angeles, Gateway Cities, Los Angeles Harbor Region
• NORTH: San Fernando Valley, portions of the Conejo Valley and Antelope Valley, Santa Clarita Valley
• CENTRAL: Downtown Los Angeles, Mid-Wilshire

TRANSPORTATION
An extensive and well -developed freeway system provides access to, from and throughout Los Angeles County. Primary freeways include Interstates 5, 105, 405, 605, 10, 110, 210, and 710.

There are also numerous state highways and a vast urban and suburban st reet network. All thoroughfares are impacted by moderate to severe traffic congestion during commute hours and freeway-to-freeway interchanges regularly rank in the top ten most congested in the nation.

Bus service is provided by Los Angeles Metro and numerous municipal operators. Los Angeles International Airport, one of the busiest airports in the world, is the primary commercial airport serving the region . Additional airports include Long Beach Municipal Airport (Long Beach), Bob Hope Airport (Burbank), and LA/ Palmdale Regional Airport (Palmdale), as well as numerous smaller scale commercial and non-commercial facilities.

Los Angeles is a major freight railroad transportation hub due to large volumes of freight arriving/departing out of the county's port facilities and industrial hubs; Union Pacific and Burlington Northern Santa Fe provide freight rail service. Amtrak, Los Angeles Metro Rail, and Metrolink provide commuter and long -distance passenger rail service; Amtrak also runs several

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intercity passenger rail lines from Los Angeles’ Union Station, including the Pacific Surfliner, the Coast Starlight, the Southwest Chief, and the Sunset Limited. California High-Speed Rail is a high- speed rail system currently under construction. The proposed line will connect Los Angeles with San Francisco by 2029, with future extensions to San Diego and Sacramento. Due to the project's nearly $70 billion cost and large scope, it is surrou nded by much controversy and will likely face significant delays.

The county has two main seaports – the Ports of Los Angeles and Long Beach – which handle over a quarter of all container traffic entering the U.S., making the complex the largest and most important port in the country and the third-largest port in the world in shipping volume. The Port of Los Angeles is also the largest cruise ship center on the West Coast, handling more than a million passengers annually.

SERVICES
Los Angeles County offers a complete array of services to residents and visitors. The Los Angeles Department of Water & Power and Southern California Gas Company provide most residents with water, gas and electricity. Law enforcement and fire protection ar e provided by the Los Angeles County Sheriff and Fire Departments, as well as individual city police and fire departments. There are approximately 78 public school districts overseen by the Los Angeles County Office of Education. The county is home to thre e world -class research institutions and 118 public and private colleges and universities – including several California State Universities (Long Beach, Northridge, and Los Angeles) and University of Southern California.

RECREATION | TOURISM
Los Angeles is one of the nation’s top tourist destinations due to its wide variety of recreational attractions, including numerous beaches, major amusement parks, golf courses, and a multitude of historical, cultural, and sporting venues and events. Prima ry attractions include Venice and Malibu Beaches, Six Flags (Hurricane Harbor and Magic Mountain), Universal Studios, Raging Waters, Hollywood and Beverly Hills, the Queen Mary, and the Los Angeles Zoo. The Los Angeles Convention Center has 720,000 square feet of exhibition space and 147,000 square feet of meeting space and hosts several major annual conventions . The 4,300 -acre Griffith Park is the most visited city park in the county. There are a host of other natural attractions, including the Santa Monica and San Gabriel Mountains, Angeles and Los Padres National Forests, Santa Catalina and San Clemente Islands, Castaic Lake, the Los Angeles, Rio Hondo, Santa Clara, and San Gabriel Rivers, and the Mojave Desert, providing for outdoor recreation.

POPULATION | DEMOGRAPHICS
As mentioned, Los Angeles County is the most populous county in the U.S. and is home to 88 incorporated cities, the largest being Los Angeles (3,766,109), Long Beach (458,222), and Glendale (191,284). The city of Los Angeles is the county seat of government, the largest city in the state, and second largest in the U.S. behind New York City.

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The California Department of Finance estimated the county’s population at 9,761,210 as of January 2023, which is a slight decrease of -0.7% from 2022. This population comprises close to one-quarter of the state’s total population. Most of the recent population growth in Los Angeles County has been due to natural increase (births outnumbering deaths), while net migration was slightly negative again last year. The county’s high cost of living and lack of affordable housing units for low and middle -income households are contributing to the slowdown in population growth.

According to the 2021 American Community Survey/US Census data, Los Angeles County had 3,375,587 households with 2.86 persons per household. The median age was 37.8 years.

REGIONAL ECONOMY
Trends in employment are a key
indicator of economic health
and strongly correlate with real
estate demand. Los Angeles is
known as the capital of
entertainment, manufacturing,
and international trade in the
U.S., but its economic base is
broad and driven by the
aerospace, automotive,
biotechnology, and fashion
industries. Two busy seaports, the busiest airport, three world-class research institutions, and 118 colleges and universities contribute significantly to the region’s $584 billion annual economic activity.

EMPLOYMENT | UNEMPLOYMENT RATE
According to the California Employment Development Department, the county had a labor force of 5,024,300 in June 2023. Of this total, 4, 758,700 were employed and the unemployment rate was 5.3%.

2020 2030 2040 2050 2060 % Change (2020-2060)
Los Angeles County 10,171,593 10,322,678 10,286,350 10,061,774 9,697,634 -4.7% California 39,782,419 41,860,549 43,353,414 44,049,015 44,228,057 11.2% HISTORICAL POPULATION AND PROJECTIONS (2020 - 2060)
So urce: C alifo rnia D ept o f F inance
Employer No. of Employees % Of Total
Educational & Health Services 867,600 19.19%
Trade, Transportation and Utilities 846,800 18.73%
Professional & Business Services 657,000 14.53%
Government 572,100 12.66%
Leisure & Hospitality 499,900 11.06%
Manufacturing 321,800 7.12%
Information 228,200 5.05%
Financial Activities 214,200 4.74%
Construction 156,600 3.46%
Other Services 150,200 3.32%
10 LARGEST INDUSTRIES IN LA COUNTY
So urce: 2022 LA C o unty A nnual C o mprehensive F inancial R epo rt

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PERSONAL | HOUSEHOLD INCOME
According to the latest Census figures, Los Angeles County had a per capita income of $38,388, as compared to the state’s income of $42,396. The county’s median household income was $77,456, compared to $84,907 in the state. 14.2% of the county’s population lived below the poverty level, which is slightly higher than the state (12.3%).

REAL ESTATE DEVELOPMENT
Los Angeles County has a wide range of
property types and limited vacant land in
populated areas, typical of a large
metropolitan area.

RESIDENTIAL
According to the California Regional
Multiple Listing Service, the median price
for all homes was $865,000 in July 2023, up 0.4% from July 2022.

Los Angeles apartment market conditions provide mixed signals. Several data points suggest the market has stabilized in 2023. Rents, which saw slight declines late last year, reached a floor in early December. Renter demand has improved in recent months compared to the negative net absorption witnessed late last year. While property managers are providing more generous incentives than a year ago, the percentage of properties offering concessions, around 20%, has held steady since October 2022.

However, on a market-wide basis, vacancies, at 4.4%, continue to increase and is up from a recent low of 3.7% in 22Q1. Both demand and supply have precipitated the increase. Net absorption during the past 12 months, 2,800 units, represents a dramatic deceleration from the record 32,000 units absorbed in 2021. Renters grew cautious last year as inflation reached decades-high levels and greater economic uncertainty surfaced. Also, absorption was insufficient to offset the 10,000 net new units completed during this time. While rents are rising on a year-over-year basis, rates have only increased by 1.5% during the past 12 months.

With 26,000 units under construction, representing 2.5% of inventory, and moderate tenant demand anticipated in the near term, vacancies are expected to continue to rise through the remainder of the year. The impact of completions going forward will disproportionately affect the locations where activity is concentrated. One-third of the units underway are in three submarkets, Downtown Los Angeles, Koreatown, and Greater Inglewood, which comprise only 15% of existing inventory in Greater Los Angeles. In cont rast, many other submarkets will face limited supply pressures.

County Jul-23 Jul-22 YTY% Chg
Los Angeles $865,000 $861,176 0.4%
Orange $1,051,000 $970,000 8.4%
Riverside $565,000 $570,000 -0.9%
San Bernardino $505,000 $505,500 -0.1%
San Diego $860,000 $820,000 4.9%
Ventura $840,000 $840,883 -0.1%

LA COUNTY & SURROUNDING COUNTIES HOME TRENDS
Median Sold Price of Single-Family Homes
So urce: C R M LS

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Based on conversations with local multifamily sales brokers, the increase in debt costs and tighter lending standards have impacted transaction activity since the second half of last year. The number of properties that traded in the past three months is well below the 640 properties that traded quarterly on average, during the past decade. Many buyers and sellers have different expectations for pricing. Sellers want the elevated pricing seen in early 2022, whereas buyers seek a discount, given higher debt c osts making it more difficult to achieve targeted investment returns. Several local brokers have said many buyers expect a 10 -20% discount relative to early 2022 pricing. The rise in debt costs and additional transfer taxes passed by the City of Los Angeles and Santa Monica (see sales section for additional detail) will likely suppress near -term transaction volumes and lead to downward pressure on asset values.

OFFICE
According to CoStar, uncertainty and pessimism surround Los Angeles' office sector. Vacancies are at 14.9% and continue to reach new heights. The pace at which vacancies have increased has accelerated since the second half of 2022. The rapid rise in debt c osts last year and resulting economic uncertainty have led to more restrained leasing activity. The dramatic increase in sublease availabilities since early 2020, from 5.3 million SF to 11.7 million SF, demonstrates that numerous tenants have decided to downsize their office footprints. The outlook for the market is also bleak, with vacancies anticipated to continue to increase through at least the remainder of the year.

With the challenging leasing environment, developers have become more selective in commencing new office projects. Starts in 2021-22 averaged only 1.2 million SF, less than half the 3 million-SF annual average from 2014-20. Construction underway, 3.7 million SF, is down from a peak of 8.8 million SF in the second half of 2020.

One exception to the hesitancy seen by developers is 1950 Avenue of the Stars, a 731,000 -SF tower in Century City that commenced construction in early 2023. Developer JMB Realty secured over 50% pre -leasing with Creative Artists Agency, committing to 400,0 00 SF in the project.

Century City has been one of the better performing locations in the past several years and remains a choice location for image -conscious tenants. While vacancies have increased in areas like the Greater L.A. office market since early 2020, Century City has been one of the few locations in the metro to see vacancy come down from a recent peak.

JMB Realty likely also realized that the new office space has fared best in the current environment.

During the past three years, leasing activity has held up best in L.A.'s newest assets, with only assets built since 2010 experiencing positive net absorption during the past three years. Century City has not seen an office building deliver since 2006. Numerous firms in Greater Los Angeles see the value in top-tier space to attract talent and entice workers to the office.

Weak market fundamentals have led to waning investor interest in office assets in the metro, with the past several quarters seeing some of the softest activity in the market's history. 22Q3 through

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23Q1 saw $2.5 billion in office sales. Dollar volumes were less than half the $5.2 billion that sold during 21Q4 through 22Q2, the prior three quarters.

Some investors are likely waiting for distressed opportunities, which are starting to surface. As one of the most prominent examples of distress in the L.A. market, this February, Brookfield, the largest owner of office buildings in the submarket, defaulted on its loans for Gas Company Tower ($465 million in loans) and 777 S. Figueroa St. ($318.6 million in loans). The two buildings are held in the Brookfield DTLA Fund Office Trust Investor REIT, which owns four additional towers downtown. The lenders have yet to exercise options to foreclose on the properties, suggesting lenders are not optimistic about future space demand for the towers.

RETAIL
Los Angeles' diverse demographics, distinctive mix of industries, creative economy, entrepreneurship, and tourist attractions create a dynamic retail market. Demand for retail space is supported by the metro's 10 million residents, the quarter million dail y commuters who flow into the metro, and 40 million annual overnight visitors. In aggregate, population losses are impacting L.A.'s retail market. Cumulative net absorption from 2018 to 2023 year -to-date has been negative, while the population base has been declining.

L.A.'s diverse demand drivers have been changing disparately in the past two years, which is leading to growing availabilities in some portions of the market, but not others. Since the start of 2021, the increased preference for convenience has led to addi tional demand for neighborhood centers. While retail availability has been rising sharply, availability in neighborhood centers, which have benefitted from strong demand from a diverse array of tenants including grocers, is declining. Consumer foot traffic has shown a clear preference for convenient centers with easy access and multiple shopping methods. Tight availabilities and growing demand for space have resulted in stronger rent growth for neighborhood centers relative to the wider retail market.

Conversely, availability is mounting in malls and power centers. Submarkets in the west, where tech and financial firms are most notably positioned, are also experiencing softer demand as workers are spending less near their offices. These submarkets, such as the Downtown L.A and Santa Monica Submarkets, also generally have the most overnight travelers.

Several large retail developments are under construction, but many were underway well before the pandemic began. Instead, more recent construction comprises small retail pads, usually with drive-thru capabilities.

Sales activity over the past 12 months comprises many shopping malls, leading to outsized sales volume despite the rising interest rate environment. Of these large malls that have traded in the past 12 months, none signal redevelopment plays. Investor appetite has been strong for grocery store anchored shopping centers.

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INDUSTRIAL
As a key industrial hub in the U.S., Los Angeles is the center of the 2 billion-SF Southern California industrial market. Demand draws from the 20 million Southern California residents and from goods entering the twin ports of Los Angeles and Long Beach, which combined handle nearly a third of all imports to the United States.

Demand for industrial properties has been impacted by losses in imports entering the ports from Asia. Loaded inbound containers declined by 27% during the 3 months ending in February 2023 compared to the previous 3 -month period. Consequentially, market con ditions have softened, and the vacancy rate has risen from 2.0% to 3.4%. The sudden downshift in market conditions has yet to translate to material changes in asking rent, where rents are still 9.6% higher than a year ago and have grown by 53.3% over the past five years.

Despite recent slowing in demand, the outlook in the space market is steady because, unlike the national landscape, available space is constrained by the limited supply growth created by the obstacles to deliver industrial product in Los Angeles. Most indu strial development in Southern California takes place in the Inland Empire, where land is cheaper and in greater supply. In recent years, some properties have been scraped and redeveloped into modern logistics facilities, while others, especially in West Los Angeles, have been converted to creative offices.

With tighter capital market conditions across the nation, local sales activity has finally started to moderate in 2023. Fewer properties are trading for redevelopment purposes and sale-leaseback deals have become more common.

CONCLUSION
Over the long term, the county will be positively impacted by a slow and steadily increasing population base, a relatively strong GDP, a well -developed distribution network, and its established reputation as a thriving metropolitan and manufacturing area a nd touristic destination. It is anticipated that the regional economy will continue to improve, and employment will increase, strengthening the demand for real estate.

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AREA MAP

TDG 2023 102 27
AREA DESCRIPTION – CITY OF PALMDALE

LOCATION / ACCESS
Palmdale is located in the center of northern Los
Angeles County, about 60 miles north of the city of
Los Angeles. The urbanized centers of Palmdale and
Los Angeles are separated by the San Gabriel
mountain range, which is about 40 miles wide. This
range forms the southern edge of the Antelope
Valley portion of the Mojave Desert. Palmdale is the
second largest city in the Antelope Valley, and the
fifth largest city overall in the Mojave Desert by
population, after Las Vegas, Henderson, North Las Vegas and Lancaster. Palmdale is part of a twin city complex with its immediate northern neighbor Lancaster and together they are the principal cities within the Antelope Valley region and California's High Desert. According to the United States Census Bureau the city has a total area of 106.2 square miles, of which, 106.0 square miles of it is land and 0.3 square miles of it is water (including man-made Lake Palmdale, the most visible and scenic part of the municipal water supply system). The city lies in close proximity to the San Andreas Fault, making it, like many other regions of California, prone to strong earthquakes.

This fault cuts across the Antelope Valley Freeway just north of the Avenue S off -ramp; running westward along the old Butterfield Stage Line (now Elizabeth Lake Road) into Leona Valley.

Palmdale has a well -maintained system of freeways and surface streets. The main freeways connecting the city to greater Los Angeles and Orange County, include Interstates 5 and 15 and State Routes 14, and 138.

The Palmdale Transportation Center provid es a state -of-the-art transportation facility. This regional multi-modal hub offers connections between Antelope Valley Transit Authority local and commuter bus service, Metrolink commuter rail service, Santa Clarita Transit, Greyhound bus service and Amtrak Throughway bus service. Los Angeles International Airport is about 70 miles from Palmdale and the Bob Hope Airport (located in Burbank) is about 50 miles away from the city.

POPULATION / DEMOGRAPHICS
Palmdale is the sixth largest and one of the fastest growing cities in Los Angeles County. According to the California Department of Finance, the city of Palmdale had a January 1, 20 23, population of 165,917. This is a decrease of 0.7% from the January 2022 population of 167,015.

According to the 2021 American Community Survey/US Census, the city of Palmdale had 4 6,650 households with 3.55 persons per household and a median age of 33.5 years.

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SERVICES
Palmdale has adequate schools, police and fire protection, public facilities, and utilities. The city is served by three school districts, the Westside School District serves students west of 25th Street West and the Palmdale School District serves students east of 25th Street West to 80th Street East. The Antelope Valley Union High School District serves high school students throughout the Antelope Valley. Nearby Antelope Valley College offers associates of arts and science degrees. The City of Palmdale is served by a variety of utility agencies. Southern California Edison provides electricity, Southern California Gas Company provides natural gas, the Palmdale Water District and Los Angeles County Waterworks provide water, Waste Management of Antelope Valley provides trash collection, the City of Palmdale Utilities Division and the Sanitation Districts of Los Angeles County provide the city with sewer services.

Palmdale features many parks, as well as recreati on centers, pools, and skate parks. The Best of the West Softball Complex features eight, year -round softball fields for youth and adult league play and softball tournaments. The Palmdale Amphitheater hosts a variety of concerts, festivals, and performances. The city also features the Barrel Springs Trail & Equestrian Aren a and DryTown® Water Park.

LOCAL ECONOMY / INCOME
The c ity of Palmdale continues
to enjoy a broadly based diverse
economy, albeit one with an
emphasis upon government,
healthcare, and other service -
oriented industries. Among
Palmdale’s large employers are
the United States Armed Forces,
Northrop Grumman, the County
of Los Angeles, and Lockheed
Martin.

EMPLOYMENT | UNEMPLOYMENT
According to the California Employment Development Department, the city of Palmdale had a total labor force of 61,900 as of June 2022, of which 6.9% were unemployed.

Employer No. of Employees % Of Total
Northrop Grumman 7,000 6.34%
Lockheed Martin 3,750 4.33%
Antelope Valley Union High School District 3,089 3.56% Palmdale School District 2,100 2.42%
Antelope Valley Mall (All Stores) 1,800 2.08%
Palmdale Regional Medical Center 1,200 1.38%
Palmdale Walmart 800 0.92%
Robertson's Ready Mix Concrete 500 0.58%
Palmdale Auto Mall 410 0.47%
Granite Construction 400 0.46%
10 LARGEST EMPLOYERS - PALMDALE
So urce: 2022 P almdale A nnual C o mprehensive F inancial R epo rt

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PERSONAL INCOME
According to the 2021 American Community Survey, the city had a median household income of $73,417 up from $55,696 in 2010. This compares to California ($84,907). Approximately 13.1% of all city residents live below the poverty level.

REAL ESTATE DEVELOPMENT
Palmdale is an ideal business center, with ease of access into and out of Los Angeles County. State Route 14 serves as the main arterial through the Antelope Valley. The city of Palmdale considers infrastructure improvements to be one of the most important investments within the community, with planning in process for multi -million-dollar transportation projects like High -Speed Rail, Express West and the High Desert corridor that will ultimately transform Palmdale into a regional transportation hub. The city is working hard to improve its infrastructure and has several projects currently underway.

Residential
The median sale price of a single-family home in Palmdale has continued to rise year over year at an average increase of 13.0% per year although the pace of the improvement has slowed due to lack of inventories. According to the California Regional Multiple Listing Service the median sale price of a single-family home in Palmdale as of July 2023, was $485,000. This represents a -4.7% decrease in the median sale price from July 2022.

CONCLUSION
The same positive factors affecting the region, including diversified employment, the year-round mild climate, and overall quality of life, are the primary reasons why the city is expected to continue to thrive over time.

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RITTER RANCH OVERVIEW
The subject lands are a portion of the overall
Ritter Ranch Specific Plan. The Specific Plan
was approved by the City of Palmdale in
1992 for the building of 7,200 homes, in
phases, as well as specialty parks, a swim
club, equestrian park, bikeways, hiking
trails, a library, fire station, school sites, and
commercial sites. The total acreage for
Ritter Ranch Specific Plan is approximately
10,625 acres.

BACKGROUND
On February 27, 1992, an environmental impact report was certified by the City of Palmdale for the development of a 10,625 -acre master planned community consisting of 7,200 residences, 7,628-acres of open space and the necessary public utilities, recreational amenities, schools, and commercial uses to support the community. On March 3, 1992, the City of Palmdale approved the Specific Plan. The approvals included: General Plan Amendment 91 -3, pre-zone 89-12, SP 89-02, and Development Agreement 92-1.

In 1995, the Development Agreement was amended to define the responsibility of the City and the applicant to fund and construct various infrastructure improvements and provided the applicant with assurance that development standards within the Specific Pla n would remain in place without change. On October 11, 1995, the City approved a Specific Plan Amendment with reflected changes made due to an Agreement of Compromise between the developer, City of Palmdale, and Leona Valley Town Council. The changes inclu ded the phasing of various infrastructure and amenities, reductions in the number of dwelling units in portions of the project, restrictions on allowable commercial uses in some portions of the project, and various minor text changes.

In December 1995, the City approved six VTTMs (51604, 51605, 51606, 51607, 52093, and 52116) and although the maps were not recorded, the lots were graded and internal roadways were partially installed (final paving was not completed). After a series of automatic and discretionary extensions of time, all six VTTMs expired on January 20, 2017.

A revised Development Agreement for the Specific Plan was approved in 2004, replacing the original Development Agreement 92-1. Similar to the previous development agreement, the 2004 development agreement defined the responsibilities between the master planner and the City to fund and construct various infrastructure improvements and provided the applicant with

TDG 2023 102 31
assurance that the development standards specified within the Specific Plan would remain applicable to the project. In June 2012, the 2004 development agreement subsequently expired on its own terms.

On March 2, 2006, the City approved VVTMs 51508-03 and 63145. VTTM 63145 was subsequently recorded and subdivided 92.32 acres into six lots. VTTM 51508 -03, for the subdivision of 50.56 acres into 241 single-family residential lots, three open space lots, and two park lots. These VTTMs subsequently expired on August 23, 2019.

Subsequent to the expiration, mass grading consistent with VTTM 51808 was completed, and backbone roads (Westland Drive and Ranch Center Drive) were installed. These roadways are currently open to public travel. Portions of the required perimeter walls alo ng these roadways were also installed.

Around October 22, 2018, the City of Palmdale was advised that Sun Cal Developer had acquired all of the ownership interests from Ritter Holdings and intended to move forward with the development of the Ritter Ranch Project. Preston Hollow Capital purchased the 93-1 Bonds from Ritter Holdings. During the period of November 2016 to October 2018, no work commenced.

In July 2020, Preston Hollow Capital transferred the subject lands to RdR Development Holdings, LLC (Owner). On September 1, 2020, the City Council adopted a resolution approving certain actions related to the Ritter Ranch Project, including financial agreements and land use approvals.

On February 10, 2022, the Planning Commission approved Conditional Use Permit 22 -001, Planned Development 21 -001, and Vesting Tentative Tract Maps 51604, 51605, 51606, 51607, 52093, and 52116. These approvals are for Phase 1 of the overall Ritter Ranch Pro ject, which is not part of this analysis.

The subject that is a portion of this analysis includes portions of Planning Area 1, which is 490 acres and will include 484 residential lots as well as 67,954 square feet of commercial space.

Additionally, Planning Area 3 in its entirety is included withi n this analysis. This Planning Area includes 159 acres with 36 proposed residential lots. Development of the subject lands will be subject to subsequent entitlement approvals and California Environmental Quality Act (CEQA) review.

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PROPERTY DESCRIPTION
SITE

LOCATION:

The subject lots are generally located South and North of Elizabeth Lake Road, East of Bouquet Canyon Road
Los Angeles County, California 93551

CURRENT USE: Vacant land, approved within Specific Plan for 520 total residential lots between Planning Areas 1 and 3. Planning Area 1 also includes six acres of commercial land. Please note, while we are aware if the six acres of commercial land within Planning Area 1, this land contributes to less than 1% of the overall Ritter Ranch land. There is a lack of support for commercial uses within the specific subject area, and the commercial need would require full development of the Ritter Ranch project. Therefore, the commercial land does not contribute to the overall land value.

PROJECT SUMMARY: The parcel map for the 652.00 acres that are the subject of this appraisal report creates up to 520 residential lots and one commercial lot that contains six acres.

SITE IMPROVEMENTS: Vacant land.

PERSONAL PROPERTY: None

ASSESSOR PARCEL
NUMBERS:

3205-002-028, et al (A complete list is contained in the property description and Property Taxes and Assessments Sections within the Addenda).

FRONTAGE / ACCESS:

Planning Area I has approximately 9,975 feet of frontage along Elizabeth Lake Road, a 2 -lane residential corridor which connects much of the Antelope Valley. Planning Area 3 has approximately 2,694 feet of frontage along Elizabeth Lake Road. State Route 14 is approximately 4.67 miles east of Planning Area 3. Access to the interior subject areas will be via private roads within the community.

VIEWS & VISIBILITY: The lots vary with respect to views and visibility. The majority of lots have views of vistas and canyons, as well as some views of Rogers Creek. These views are considered an amenity.

TDG 2023 102 33
TOPOGRAPHY: The subject has level to rolling to steep terrain.

SOIL CONDITIONS: The soil conditions observed at the subject appear to be typical of the region and adequate to support development.

HAZARDOUS
SUBSTANCES:

I did not observe any evidence of toxic or hazardous substances during inspection of the site; however, I have no expertise in evaluating toxic or hazardous site conditions and cannot make substantiated remarks in this field of study. The subject is not listed as a hazardous site per the Hazardous Waste and Substances Sites List compiled by the California Environmental Protection Agency.

The Doré Group was not provided with a Phase I Environmental Assessment Report or any other reports addressing potentially hazardous materials on or near the subject property. No warranty is made as to the condition of the property relative to hazardous chemicals or toxic wastes. The client is urged to retain an expert in this field if the existence of such materials is suspected. This analysis was based on the assumption that no hazardous chemical contamination of any kind exists on the subject land.

UTILITIES: Electricity: Electricity is at Elizabeth Lake Road but would require extension prior to
development.

Sewer: Sewer services are required prior to
development.

Water: Water services would require extension
prior to development.

Natural Gas: Gas services would require extension prior to development.

Underground
Utilities:

None
Adequacy of Systems: Utilities are typical for vacant lands in the subject market area. All utilities would
require extension prior to development.

FLOOD ZONE: The subject is primarily within Flood Zone X, which is identified with areas that have a corresponding one percent chance of an annual flood event. Flood Insurance is not mandatory, but available for purchase.

FEMA Map Number: 06037C0635F
FEMA Map Date: September 26, 2008

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Please note, Rogers Creek traverses the northernmost areas of Planned Area 1 and is within Flood Zone A. Flood Zone A identifies areas inundated by 100-year flooding.

WETLANDS /
WATERSHED:

A p ortion of Planning Area 1 has Rogers Creek traversing the portion of land in a west to east direction. This is a seasonal stream.

MINERAL RIGHTS: This area has low potential for mining related activity.

ENVIRONMENTAL
ISSUES:

Based on the information provided, I recognize portions of the subject lots are environmental sensitive. Both in terms of existing biology and riparian habitats, and what has been observed on the subject lands.

BIOLOGIC CONDITIONS: I did not review a Biological Survey detailing possible biological species on the subject land. Based on information provided by the client, vegetation includes Semi-desert grassland, Chamise chaparral, and Elizabeth Lake Gum plant. There were other types of vegetation not listed, but common to this region.

Further biologic studies and reports prepared by an expert in this field may be prudent to resolve any environmental issues regarding the presence or continued occupancy of an endangered species. No responsibility is assumed for any adverse conditions, or any expertise or knowledge required to discover them.

SIGNIFICANT NATURAL
RESOURCES:

The subject property does contain significant natural resources.

Rogers Creek is located on the northern portion of Planning Area 1.

As previously mentioned, vegetation includes Semi -desert grassland, Chamise chaparral, and Elizabeth Lake Gum plant.

ENCUMBRANCE /
EASEMENTS:

Other than what I noted, there were no other adverse
encumbrances or easements. I did not review a preliminary title report. However, based on my inspection I believe there are easements for utility access. No other adverse easements were observed. Please reference Limiting Conditions and Assumptions.

SITE COMMENTS: The subject lots are located within the of the City of Palmdale, west of State Route 14 within Los Angeles County. This area has experienced rural residential growth over the past decade.

Continued residential development within the immediate area is considered a conforming land use.

TDG 2023 102 35

RITTER RANCH CONCEPTUAL SITE PLAN

TDG 2023 102 36

TRANSFER SITE PLAN

Please note, dotted red outlines indicate the areas that are subject to this appraisal report.

TDG 2023 102 37

SUBJECT AERIAL

TDG 2023 102 38
ZONING

LAND USE CONTROLS

ZONING CODE:

SP (Specific Plan - Ritter Ranch)

OVERVIEW:

The Ritter Ranch Specific Plan provides a
comprehensive approach toward master planned
development. It defines the goals, objectives and
development standards which will serve to guide the
buildout of Ritter Ranch. The Specific Plan is designed as both policy and regulatory document.

PROPOSED DENSITY OF USE:

Planning Area 1 (portion): 1 du./acre
Planning Area 3: 0.23 du./acre

CURRENT USE LEGALLY
CONFORMING:

The subject is vacant land. Thus, the current use is
deemed legally conforming.

ZONING CHANGE LIKELY:

A zoning change is unlikely.

SET BACK DISTANCE:

Not Known
DEVELOPMENT ENTITLEMENTS: The Ritter Ranch Specific Plan was approved in 1992; however, development of the subject lands will be
subject to subsequent entitlement approvals and
California Environmental Quality Act (CEQA) review.

ZONING COMMENTS:

Permitted uses within the specific plan include
residential, open space, and commercial uses . The
subject lands have not yet been subdivided into lots
and the subject lands are currently vacant . I noted
that the sizes of these residential lots would not
facilitate further subdivision.

TDG 2023 102 39

ASSESSMENT AND TAXES

California taxation law requires a 1% of market value tax rate (plus additional assessments) determined through individual communities’ bond indebtedness (Proposition 13). Actual assessments are typically based on the fair market value as determined by the most recent acquisition price. Future assessments are based upon the most recent acquisition price until additional improvements (land and/or homes) are constructed onsite or a subsequent change of ownership of the property or portions thereof. Subsequent annual tax increases are limited to a maximum of 2% per year. Disposition of the property, as of the date of appraisal, would place the subject under Proposition 13 guidelines. Recent trends in property taxation laws seem to be of similar nature with no immediate changes anticipated.

TAXING AUTHORITY:

Los Angeles County
ASSESSMENT YEAR: 2022-2023

COMMENTS:

The appraised value was based on the assumption that there were no tax liens affecting the subject property. Per the Los Angeles County Treasurer-Tax Collector, the subject property was current in their property taxes.

Assessor’s Parcel No.: 3206-007-001 3205-002-053 3205-002-028 3206-005-008 (portion)
3206-006-
028 (portion)
3206-025-001
(portion) 3205-002-051 Totals
Tax Rate Area: 17133 17133 17133 17133 17133 17133 17133 -- Base Tax Rate: 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% -- Assessed Value
Land $603,840 $684,420 $195,840 $2,965,140 $1,760,520 $1,384,772 $136,680 $7,731,212 Improvements $0 $0 $0 $0 $0 $0 $0 $0
Personal Property $0 $0 $0 $0 $0 $0 $0 $0
Exemption $0 $0 $0 $0 $0 $0 $0 $0
Total Assessed Value $603,840 $684,420 $195,840 $2,965,140 $1,760,520 $1,384,772 $136,680 $7,731,212 Base Tax* $6,038.40 $6,844.20 $1,958.40 $29,651.40 $17,605.20 $13,847.72 $1,366.80 $77,312 Additional Tax Charges
Total Additional Tax Charges $5,712.90 $5,746.73 $2,776.05 $19,631.54 $11,222.32 $14,814.28 $2,429.23 $62,333.05 Total Base Tax & Addnl' Tax
Charges $11,751.30 $12,590.93 $4,734.45 $49,282.94 $28,827.52 $28,662.00 $3,796.03 $139,645 Effective Tax Rate 1.946% 1.840% 2.418% 1.662% 1.637% 2.070% 2.777% 1.81%

REAL PROPERTY TAX AND ASSESSMENTS
TAX YEAR 2022-2023

TDG 2023 102 40

SUBJECT PHOTOGRAPHS

Facing east along Elizabeth Lake Road

Facing west along northern portion of the subject property

TDG 2023 102 41

Southern view of subject lands

Southwest view towards mountains and rolling terrain

TDG 2023 102 42

HIGHEST AND BEST USE

Highest and best use may be defined as:

“The reasonably probable use that produces the most benefits and highest land value at any given time.” 7

Traditionally, I considered the four highest and best use tests, which are summarized as:

1. Legally Permissible: What uses are permitted by zoning and other legal restrictions?

2. Physically Possible: To what use is the site physically adaptable?

3. Financially Feasible: Which possible and permissible use will produce any net return to the owner of the site?

4. Maximally Productive. Among the feasible uses which use will produce the highest net return, (i.e., the highest present worth)?

HIGHEST AND BEST USE OF THE SITE

LEGALLY PERMISSIBLE
As discussed in the Land Description and Zoning sections of this report, the subject development falls under the zoning district: SP (Specific Plan - Ritter Ranch). The Specific Plan allows for a robust level of development for the overall 10,625 acres. The subject specific lands have been set aside for uses that include residential, open space, and commercial uses . This is consistent and supported by the subject’s historical use as vacant land. The proposed single -family residential development appears to be a legal and conforming use. The subject lands have been approved for these development purposes via the specific plan but would require further entitlements prior to development.

PHYSICALLY POSSIBLE
As of the date of value, the subject property was vacant land with physically and legally defined paved and dirt road access. The subject land is physically able to support various types of development considering available utilities and surrounding nearby infrastructure.

From the subject’s upper elevations, there are unobstructed views of the surrounding area. Based on our inspection, there did not appear to be any evidence of subsidence or other soil problems that would be considered prohibitive to any of the legally permissible uses. Development of the

7 The Appraisal of Real Estate, 14th Edition, Appraisal Institute, 2013: Chicago, p. 333

TDG 2023 102 43
subject land is not limited by parcel size or shape and utility services, once extended, would be adequately provided by public and/or private systems. Therefore, the aforementioned legally permissible use(s) (residential, limited commercial , and passive recreation ) are physically possible.

FINANCIALLY FEASIBLE
Any proposed use that supports a positive land value is considered financially feasible. As previously discussed, residential, limited commercial, and open space/recreation are all legally permissible and physically possible uses of the subject land. In this section, these uses are considered in terms of their financial feasibility.

SCE N AR IO 1 – RE SI DE NT I AL DE V E L O P ME NT
It is beyond the scope of this analysis to determine the exact amount of residential lots that would be allowed on the subject land; but given the current lot configuration it is reasonable to accept the maximum number of residential dwellings would be 520, with an average developable lot size of approximately 1.257 acres, which is estimated by taking the estimated land area (652.00 acres) and dividing it by the number of developable lots (520). Based on the legal and physical attributes of the subject, residential development is deemed a financially feasible use. Based upon my investigation and analysis, it is financially feasible to extend utilities and physical access as residential uses will add value to the subject land.

SCE N AR IO 2 (R E CR E AT IO N AL)
Another appropriate and consistent use of the subject property is to retain the land for designated recreational areas. There is adequate demand for recreational land from various private conservation companies (i.e., The Nature Conservancy, The Trust for Public Land, etc.) and public agencies (i.e., U.S. Fish and Wildlife, State of California, etc.) resulting in added value to the land. Therefore, passive recreational land is considered a financially feasible use of the subject property.

CO NCL US IO N
Any proposed use that supports a positive land value is considered financially feasible. I noted that residential and recreational land uses are the only financially feasible use of the subject property at this time.

MAXIMALLY PRODUCTIVE
The maximally productive use is that which will produce the highest net return (i.e., the highest present worth) of the land. The subject’s physical attributes (i.e., topography, limited and/or incomplete access and utilities, etc.) result in a significant investment of time and money in order to facilitate residential development. I concluded that recreation (often represented by conservation proposed land) is also a financially feasible use for the subject lands. However, the maximally productive use of the subject is determined by the highest net return to the land.

TDG 2023 102 44

To determine the highest net return, I surveyed future residential land sales and compared them with recreational land sales. As configured the subject reflected a total of 520 future residential lots. One of the most significant comparative attributes with future residential land is the stage of entitlement at the time of sale. I located six comparables that reflected future residential land uses. These sales were used in our analysis, and the y ranged from $ 72,435 to $ 107,724 per entitled lot. Additionally, I also researched recent sales of finished residential lots in Los Angeles County that have similar location attributes to the subject. This includes locations within newer gated communities and within high desert areas . I found seven recent land lot sales ranging in size from 0.47 to 2.57 acres, located primarily in areas surrounding the subject (Newhall, Santa Clarita, Palmdale, Saugus, and Canyon Country).

Please note, the residential land development (Ritter Ranch SPA for 520 lots) provides allowances for open space. This is a condition of approval. Many of the residential land sales had set asides for conservation/open space; and many of the conservation-based sales had allowed uses for residential. Ultimately the defining use was determined by the buyer profile.

HIGHEST AND BEST USE AS IMPROVED
As the subject is vacant land, an analysis of the Highest and Best Use as Improved is not warranted.

MOST PROBABLE BUYER
Taking into account all of the physical and investment characteristics of the subject property, the likely buyer is a local investor or developer.

TDG 2023 102 45

VALUATION METHODOLOGY

Three basic approaches may be used to arrive at an estimate of market value. They are:

1. The Cost Approach

2. The Income Approach

3. The Sales Comparison Approach

COST APPROACH
The Cost Approach is summarized as follows:

Cost New
- Depreciation
+ Land Value
= Value

INCOME APPROACH
The Income Approach converts the anticipated flow of future benefits (income) to a present value estimate through a capitalization and or a discounting process.

SALES COMPARISON APPROACH
The Sales Comparison Approach compares sales of similar properties with the subject property.

Each comparable sale is adjusted for its inferior or superior characteristics. The values derived from the adjusted comparable sales form a range of value for the subject. By process of correlation and analysis, a final indicated value is derived.

FINAL RECONCILIATION
The appraisal process concludes with the final reconciliation of the values derived from the approaches applied for a single estimate of market value. Different properties require different means of analysis and lend themselves to one approach over the others.

METHODOLOGIES APPLIED
The Cost Approach was considered and was not developed because the subject is unimproved land. The Sales Comparison Approach was considered and was developed because there is adequate data to develop a value estimate and this approach reflects market behavior for this property type. The Income Approach was considered and was not developed because the subject is not an income production property and this approach does not reflect market behavior for this property type. However, a method to value known as a Land Residual, or Subdivision Analysis uses a discounted cash flow model to support the presen t value of a “for sale” lot program. This method is similar to an income approach.

TDG 2023 102 46
SALES COMPARISON APPROACH – BULK LAND VALUE

The Sales Comparison Approach is based on the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership. It is based on the principles of supply and demand, balance, substitution and externalities.

LAND COMPARABLES
In general, vacant tracts of residential land with development entitlements do not sell frequently.

From 2018 through the date of value, a n in-depth search turned up only a limited number of closed sales.

The Highest and Best Use analysis provided the foundation for locating comparables for use in the sales comparison approach. The conclusions of the Highest and Best Use analysis supported a reasonable, probable, and consistent use of the subject property f or residential land use. I searched for comparables with a similar highest and best use and overall orientation as the subject land. They included parcels of land that were purchased for residential development, or retained as such. However, in either scenario the underlying highest and best use is the same.

I have researched a total of six comparables for this analysis. These comparables are documented on the following pages followed by a location map and an analysis grid. All comparables have been researched through numerous sources (including, but not limited to, the county recorder's office, market data services, published reports, and personal contacts).

Comparisons of the comparables are made to the subject relative to differences or similarities in time, location, physical characteristics, and sales conditions. Percentage or dollar adjustments are then made to the selling and/or listing price of each com parable for property rights, financing, time of sale, and unusual sales conditions ; q uantitative comparisons are made for physical differences between each comparable and the subject. A range of values results from this approach. I correlate the range into a final value by selectively rating the comparables as to their overall comparative value.

It is not the goal to find only the most similar comparables. It is also helpful to find comparables that are obviously superior and inferior to the subject to provide an orientation for the most probable value. This technique is called “bracketing” and provides strong technical reasoning for the concluded value. A n example of bracketing a value for land is shown below. Here I demonstrate the logic of finding comparables with inferior, similar, and superior characteristics.

When this is done correctly, the reconciled value can be reasonably concluded.

TDG 2023 102 47

On the following pages is a summary table followed by a land comparable location map, photographs, and our comparative analysis.

CharacteristicSubject Comp 1 Comp 2 Comp 3
Price N/Ap $100,000 $150,000 $180,000
$ / Acre N/Ap $10,000 $15,000 $18,000
Topography Rolling Steep Rolling Level
Access Paved Road Dirt Road Paved Road Paved Road
Overall Comparison Inferior Similar Superior

COMPARABLE BRACKETING

TDG 2022 100 48

TDG 2023 102 49

COMPARABLE LOCATION MAP

TDG 2023 102 50

LAND COMPARABLE PHOTOGRAPHS

Land Comparable 1

Land Comparable 2

TDG 2023 102 51

Land Comparable 3

Land Comparable 4

TDG 2023 102 52

Land Comparable 5

Land Comparable 6

TDG 2023 102 53

THE COMPARISON PROCESS
In the comparison process, I take into consideration the financial and physical differenc es between each comparable and the subject. Categories of adjustment and/or comparison include:
1) property rights conveyed ; 2) terms of sale ; 3) conditions of sale ; 4) buyer expenditures; 5) market conditions; and, 6) physical characteristics (including location, utilities, zoning, terrain, density (acres per dwelling unit), access, significant land attributes , stage of development, and development entitlements.

The compa rables were analyzed on a per lot basis, which is the most applicable unit -of- comparison for entitled parcels of residential land. Each comparable s’ lot figure was obtained from public records, published sales information, and/or other reliable sources. Once the per lot value indicator was estimated, it was applied to the subject property.

The comparison process is fairly subjective in nature primarily due to the many characteristics of value, variances in buyer/seller influences, imperfections in the market, etc. Adjustments and/or comparisons are an attempt to reflect value contributions of the various factors in the marketplace. Many of the comparisons of physical characteristics overlap and reflect overall desirability. The comparison grid on the following page is an empirical format to simply lead the reader to a logical conclusion of the final estimated value.

PROPERTY RIGHTS
The property right appraised was the fee simple estate. All of the comparables transferred (or were marketing) the fee simple interest; thus, no adjustments for property rights were warranted.

FINANCING (TERMS OF SALE)
Financing (terms of sale) include below market rates, buy downs, atypical payback periods, or any financing situations that are not commonly accepted within the marketplace. In the subject market, land is typically purchased with all cash, or the seller takes back a first trust deed with a large (20%-50%) down payment. In this case, all of the closed sales involved cash to the seller or were sold via conventional terms, thus no adjustments were warranted.

CONDITIONS OF SALE
Conditions of sale include any distressed influences, less than arm’s length transactions, or other related influences that are not attributable to financing /terms of sale , market conditions , or physical differences. None of the closed sales had any atypical conditions of sale, thus no further adjustments were warranted.

BUYER EXPENDITURES
A knowledgeable buyer considers expenditures that will have to be made upon purchase of a property because these costs affect the price the y agree to pay. Such expenditures may include the cost to demolish and remove buildings, petition for a zoning change, remediate environmental

TDG 2023 102 54
contamination, extend escrow, pay broker fees, among others. No atypical buyer expenditures were discovered during the verification process; thus, no adjustments were warranted.

MARKET CONDITIONS
Market conditions adjustments take into consideration appreciation or depreciation that has occurred in the market. In general, sales of vacant large land tracts in the Los Angeles market have been limited.

The available market evidence does not support a market conditions adjustment for this type of land. The comparables sold between March 2018 and May 2022 and no adjustments were warranted.

PHYSICAL CHARACTERISTICS
After adjusting for the above non-physical characteristics, I compared the physical differences of the comparables to the subject. There is a myriad of physical features that can be reviewed by investors when purchasing vacant land. However, the features discussed below represent those that generally have the greates t effect on value or are most often a consideration. Note that location, topography, density (Du/Ac), access, stage of development and entitlements generally have a stronger impact on value than the remaining categories. Quantitative comments were made regarding any differences noted.

LO CAT IO N
When looking at location, I take into consideration a property’s orientation to the surrounding area including proximity to local services and perceiv ed desirability/market demand. The subject property is located in the City of Palmdale , in North County Los Angeles. Specifically, the subject lands are east of Palmdale proper, between Palmdale and Santa Clarita. This area is characterized by rural residential land uses, with an average proximity to area services . Land Comparable 5 was located in the outskirts of Alpine, in San Diego County. This location was deemed slightly inferior. Land Comparable 1 was located in Lake Elsinore, with good access to the lake amenity. This is considered superior.

Land Comparable 3 was located in Stevenson Ranch and was considered superior. Land Comparable 6 was located in Newhall, just outside of Santa Clar ita and was considered superior. In comparison to the subject , all of the remaining land comparables were deemed similar in terms of location.

TO T AL N UMB E R O F U NIT S /E NT IT L E ME NTS
The total number of allowed units within any development project indicates overall final value; however, the higher number of units within any particular development community generally has a higher overall cost for development. The higher the number of units involved in residential development dictates higher costs. The subject property is assumed to be entitled for the development of 520 single-family units. Land Comparable

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5 is entitled to develop 27 units and is considered slightly superior . The remaining comparables range from 102 to 497 units and are considered similar.

DE NSIT Y (D W E L L IN G U NIT S PE R A CR E)
In this category, I considered the density of the subject in comparison to the land comparables. Intuitively, it is reasonable to expect that residential developments with more acreage will sell for higher prices. Lower density projects reflect larger lots and the price per unit typically is higher for these projects. Conversely, higher density projects typically reflect a lower price per unit.

The development density of t he subject was estimated at 0.80 dwellings per acre (calculated by finding the average lot size). The land comparables reflected density levels ranging from 0.68 to 6.06 dwelling units per acre . Comparables 2 and 6 had average densities between 3.77 and 6.06 dwelling units per acre. These are overall smaller site sizes and are considered inferior. Comparables 1 and 4 had densities of 2.72 and 2.12 dwellings per acre , respectively, and w ere considered slightly inferior. The remaining comparables had average densities of between 0. 68 and 1.67 and were considered similar.

ZO NI N G
Zoning reflects a property’s allowed uses and usable area for development. The subject’s zoning allows for rural residential land uses. All of the land comparables allowed for residential development, thus were deemed similar to the subject in zoning attribute.

ACCE S S
Access reflects the availability and quality of offsite roads. The subject property has legally defined access via Elizabeth Lake Road. Interior access is provided by dirt roads. Overall, access to the subject is considered average for this area. Land Comparable 4 had good access via primarily paved roads and was considered slightly superior . In comparison to the subject all of the remaining land comparables reflected good accessibility and are considered similar.

SALES COMPARISON APPROACH CONCLUSION
A total of six land comparables were used in the sales comparison approach to land value. The comparable data were sufficient in quality and quantity to estimate the subject’s market value with many physical and non-physical characteristics analyzed in the valuation process.

The comparables had an unadjusted price per lot range from $72,435 to $107,724 per lot. There were no adjustments for property rights, financing, conditions of sale, market conditions, or buyer expenditures. Therefore, the price per lot remained the same.

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Our qualitative land analysis is arrayed in the following table:

All of the value i ndications have been considered; however, Land Comparable 6 was considered to be the most similar and was given the most weight in our final analysis. Therefore, I reconciled a per lot value figure of $85,000. The remaining land comparables provide additional support for our reconciled market value. The land value is estimated as follows:

Bulk Market Value
NUMBER OF SUBJECT LOTS: 520
INDICATED PRICE PER LOT: $85,000
INDICATED VALUE: $44,200,000
INDICATED VALUE (RD.): $44,200,000
Forty-Two Million Two Hundred Thousand Dollars

Please note, this reflects entitled land. While the subject area is in an SPA, it is not entitled.

Additional costs for Risk ( 21% includes profit ) in order to achieve entitlements and fees and permits (per client) are deducted. This totals $56,779 per lot. This is shown as follows:

Bulk Market Value
NUMBER OF SUBJECT LOTS: 520
INDICATED ENTITLED PRICE PER LOT: $85,000
LESS FEES AND PERMITS PER LOT: $38,929
LESS 25% OF ENTITLED PER LOT:

SUBTOTAL:

ADJUSTED PER LOT (RD.):

NUMBER OF SUBJECT LOTS:

INDICATED VALUE:

INDICATED VALUE (RD.):
$17,850
$28,221
$28,200
520
$14,664,000
$14,660,000

Fourteen Million Six Hundred Sixty Thousand Dollars

Comparable Comparability
to Subject $/Lot
1 Superior $107,724
3 Superior $102,451
5 Sl. Superior $88,889
2 Sl. Superior $87,402
Subject $85,000
6 Similar $82,418
4 Inferior $72,435

VALUATION ARRAY TABLE

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Address
City
State
Date
Price
Land Units
Price Per SF
Property Rights Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0% Fee Simple 0.0% Financing Conventional 0.0% Conventional 0.0% Conventional 0.0% Conventional 0.0% Cash 0.0% Conventional 0.0% Conditions of Sale Normal 0.0% Normal 0.0% Normal 0.0% Normal 0.0% Normal 0.0% Normal 0.0% Market Trends Through 8/1/2023 0.0%
Subsequent Trends Ending 8/1/2023 0.0%
Location
Comparison
Acres
Comparison
Topography
Comparison
Access
Comparison
Utilities
Comparison
Zoning
Comparison
Zoned Density
Comparison
Entitlements At Time of Sale
Comparison
Similar Sl. Inferior

2.12 du./Acre1.67 du./Acre 6.06 du./Acre0.68 du./Acre
Similar Inferior
Fully Entitled 27 units
SimilarSimilar
$107,724
Sl. Superior
$82,418$72,435
520 Units Fully Entitled 344
Units
Fully Entitled 182
Units
Fully Entitled 497
units
$88,889Adjusted Price per Unit $102,451
Similar Similar
Adjusted Price per Unit $107,724
Normal
Palmdale Jurupa Valley
CACA
$102,451
102
Transaction Adjustments
344
Stevenson Ranch
$107,724
4/30/2018
Conventional
Fee Simple
CA

0.0%
Adjusted Price per Unit

0.0% 0.0%
$102,451 $72,435
Good
LCA22 LCA22

2.72 du./Acre0.80 du./Acre 3.77 du./Acre
Sl. Inferior Inferior
Fully Entitled 254
Units
$87,402
Overall Comparison Superior Sl. Superior
Require Extension
Similar
SP
Similar
SP
Average; Paved to
Site, Interior Dirt
Level to Rolling to
Steep
Average; Paved to
Site; Interior Dirt
Sl. Superior
Pico Canyon Road N/O Hasley Canyon
Road
Blackwolf Drive
Newhall
S/O Nichols Rd; E/O
Alberhill Ranch Road
6501 Clay Street
Lake Elsinore
Comp 2
Elizabeth Lake Road
CA
Land Comparables Adjustment Grid
CA
2/28/2020
Alpine
24925 The Old Road
Comp 4 Comp 5 Comp 6
Castaic
Level to Rolling
$102,451

0.0%
$87,402

0.0%
$87,402
Average
Sl. Superior
Sl. Superior
Good; Paved to Site;
Interior Dir
Average; Paved to
Site; Interior Dirt
Similar
Sl. Superior
Available but require
extension
Sl. Superior
Available at property
boundary
SimilarSimilar
SimilarSimilar
Similar
Level to Rolling to
Steep
179.74
Similar Similar
Average; Paved to
Site; Interior Dirt
Average; Paved to
Site; Interior Dirt
Rolling to Steep
Average; Dirt
Similar
423.31
Similar
180.00
Superior
Level to Rolling
Superior Superior
Good
Similar
Level to Rolling
Require Extension Require Extension
230.50
Available but require
extension

67.38 Similar
Similar

0.0%
$82,418

0.0%
652.00 138.40
Adjusted Price per Unit $107,724
Average

0.0%
$82,418
$102,451
--
12/8/20218/1/2023 5/11/2022
$22,200,000$37,057,000 $10,450,000
520
$0
254
$87,402
8/11/20203/26/2018
$2,400,000
$72,435
497
$36,000,000
CA
GoodAverage
$72,435
Remote; San Diego County
$82,418
$87,402
Land Analysis Grid Comp 1 Comp 3
$107,724

0.0%
27 $88,889
Similar
Available but require
extension
$88,889

0.0%
Sl. Inferior
Similar
Level to Rolling
Sl. Superior
$88,889
$88,889
Similar Similar Similar
LCA22 A70
CA
R-4
Similar
$72,435
$15,000,000
$82,418
182

0.0% 0.0%
Sl. Inferior
Similar Similar Similar
Similar
Superior Inferior Sl. Superior Similar
Similar
Fully Entitled 102
Units

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DISCOUNTED CASH FLOW LAND RESIDUAL

The next portion of my analysis is the development approach to value. This approach uses the analysis completed by Zonda (See Addenda for Full Report). Zonda completed a detailed market overview, unit mix, pricing schedule and absorption. Key conclusions are as follows:

• Average Base Price - $754,327
• Average Total Price (inc. premiums and options) $822,216 • Four Product Lines 8,000 to 2 acre lots
• Average Unit Size 3,184 square feet.
• Absorption 1.5 to 3 units per month.

The Zonda report brackets the proposed pricing levels at the medium to lower end of the competitive product (Subject shown in Black). The subject is priced below the superior Santa Clarita and San Fernando Valley areas, and just above the Antelope Valley (Desert Region).

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Overall, the Zonda conclusions regarding unit mix, pricing and absorption are well supported and I have relied upon these conclusions for the Discounted Cashflow Analysis.

DISCOUNTED CASH FLOW ANALYSIS IN SUBDIVISION DEVELOPMENT ANALYSIS – 520 HOMES
A discounted cash flow analysis may be applied in subdivision analysis to estimate raw land value as entitled (See Extraordinary Assumption). Subdivision development analysis can also be used to estimate the value of completed homes, condominium units, or other types of property that is commonly subdivided. The projection of income and absorption in discounted cash flow analysis allows us to d evelop an opinion of value at the point in the development timeline that is appropriate for our assignment; in this case, on the date of inspection, August 2023.

In the subject’s case, it is assumed the project is e ntitled for 520 homes. This assumes a large subdivision with platted and all final engineering, improvement and landscape plans, and environmental permits. Grading permits would be complete as of the date of value.

After permitting and construction are completed, a 5-year absorption period is estimated sell off the homes. This allows for the 1 st year for site development ($ 59,604 per lot for finishing costs and intact utility extensions) as well as upfront expenses for the proposed CFD of $10,417 per unit).

DEVELOPER’S PROFIT AND DISCOUNT RATE
For appraisal purposes, the rate of return, or yield rate, should represent the annual rate of return necessary to attract investment capital. Such a rate is influenced by many considerations, including the degree of apparent risk, market attitudes with re spect to future inflation, the prospective rates of return for alternative investment opportunities, historical rates of return earned by comparable properties, supply, and demand for mortgage funds, etc. Although it is not possible to prove conclusively the suitability of a particular rate of return on the basis of market evidence, the chosen rate should be consistent with the available evidence. Rate selection requires appraisal judgment and knowledge concerning prevailing market attitudes and economic indicators.

The appropriate discount rate for the subject analysis must reflect that this real estate investment constitutes a “Sell -Out” property. Discount rates for real estate subdivision analyses are much higher than for typical real estate holdings based on income from rent. The income derived from sell-out properties, whether they involve residential, commercial, or industrial products, includes entrepreneurial profit on the costs associated with project development and marketing.

Published surveys and discussions regarding investor requirements for profit subdivision development typically find that real estate developers are seeking profit margins in the 10% to 30% range. It is common to see analyses that reflect developer profit in the 10% range. Discount

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rates for subdivision analysis will range depending upon the location of the proposed project and the regional and microeconomics associated within the competitive market area.

Sources for published data on current investor requirements for land development and sell -off properties in general are very limited at the present time. Our research indicates land investors report discount rate requirements in the 1 8.21% to 37.58% range, averaging approximately

26.22%.

According to the 1st Quarter 202 3 Realty Rates Developer Survey, the following summarizes discount rates for conventionally financed (interest -only interim or construction financing) subdivisions and planned unit developments (PUDs) nationwide. Actual Rates are historical rates achieved b y survey respondents, while Pro -Forma Rates reflect forward -looking revenue and expenses. Developer’s profit is not treated as a line -item expense. There is strong support for 500+ Units at 33% which is well bracketed by the data.

Expenses are projected as follows:

• Construction costs per home is estimated at $ 92 per square foot. As noted, site development costs are $59,945 per lot.

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• A 6.0% (of sales revenue) marketing and sales expense throughout sell-off period;

• 2.0% (of sales revenue) overhead and administrative fee throughout the absorption period;

The table below summarizes our discounted cash flow analysis to obtain the residual land value for the subject on an average basis without Developer’s Profit.

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As indicated by the discounted cash flow analyses above, the residual land value is $ 14,600,000 (rounded), or a value per lot of $27,990 per lot.

Please note, the sum retail of units is that combined total sales revenue within the discounted cash flow analysis, or $362,254,357.

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As indicated by the discounted cash flow analys es above, the residual land value is $ 14,600,000 (rounded), indicating a value per lot of $ 27,990, rounded . This is a 0.41% delta between my reconciled land value within the sales comparison approach and the discounted cash flow analysis.

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FINAL RECONCILIATION

The process of reconciliation involves the analysis of each approach to value. The quality of data applied the significance of each approach as it relates to market behavior and defensibility of each approach are considered and weighed. Finally, each is considered separately and comparatively with each other.

The sales comparison approach and the developmental approach were the only methods to value.

These two methods were reconciled at $14,660,000 and $14,600,000, respectively. These show a strong correlation between the two methods.

A total of six land comparables were used in the sales comparison approach. The comparable data were sufficient in quality and quantity to estimate the subject’s value with many physical and non- physical characteristics analyzed in the valuation process. I compared the subject with land comparables that reflected similar entitlements for residential development. The most consistent unit of comparison was the price per lot. These s ix land comparables reflected adjusted values from $ 72,435 to $ 107,724 per lot. All of thes e land comparables had a tentative (or final) subdivision map in place and were either in rough graded condition or assumed finished in the pricing level. An additional deduction was made for Risk and Fees/Permits for Entitlements to derive a value of $28,200 per lot, or $14,660,000.

This figure is supported by our discounted cash flow analysis, which was applied to estimate finished lot land value and was based on reasonable expenses, a 5-year absorption period, and a market-derived discount rate. Our concluded value applying a discounted cash flow analysis was $14,600,000 ($27,990 per lot). The Sales Comparison is given less weight due to the limited data for SPA sales but is very supportive of the indicated value.

VALUE CONCLUSION
Based on the data and analyses developed in this appraisal, I have reconciled to the following value conclusion(s), as of August 1, 2023, subject to the limiting conditions and assumptions of this appraisal:

Bulk Market Value

TOTAL VALUE (RD.):

$14,600,000
PER UNIT: $27,990

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CERTIFICATION STATEMENT

We certify that, to the best of our knowledge and belief:

 The statements of fact contained in this report are true and correct.

 The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions and conclusions.

 We have no present or prospective future interest in the property that is the subject of this report, and have no personal interest with respect to the parties involved.

 We have no bias with respect to the property that is the subject of this report, or to the parties involved with this assignment.

 Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

 Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

 Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP).

 No one provided significant real property appraisal assistance to the person(s) signing this certification.

 We certify sufficient competence to appraise this property through education and experience, in addition to the internal resources of the appraisal firm.

 As of the date of this report, Lance W. Doré, MAI, FRICS has completed the continuing education program for designated members of the Appraisal Institute.

 We have not performed appraisal services regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

TDG 2023 102 66
 Lance W. Doré, MAI, FRICS made an inspection of the subject property.

Respectfully submitted,

Lance W. Doré, MAI, FRICS
President / CEO
AG002464
[email protected]

TDG 2023 102 67

ADDENDA

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ZONDA REPORT

Ritter Ranch Master Planned Community (Phase One)
Assessment of Phase One Market Opportunity
RDR Development Holdings
City of Palmdale, Los Angeles County, CA
August 2021

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 2 Objective
The objective of this assignment was to assess the market-based opportunity for the residential element in phase one of the Ritter Ranch Master Planned Community in the City of Palmdale, Los Angeles County, California relative to today’s current and expected economic and housing market conditions. Zonda (under our previous name Zonda) conducted a full master plan market analysis on this property in April of 2019. This is an update and enhancement of the phase one recommendations from that report reflecting the current lot counts and plan.

Note: This report was completed during the ongoing global health crisis created by the COVID-19 (coronavirus) outbreak, the duration and consequences of which are still largely unknown. Our research and conclusions are based upon the best information available to us at the time of publication.

Contact Information
The following key team members participated on this analysis:

Tim Sullivan, Senior Managing Principal, oversees our Advisory practice. With over three decades of experience, Mr. Sullivan is an expert in residential and mixed use feasibility studies, strategic planning and product development, and regularly conducts market analyses around the United States and internationally.

JT Schwartz, Director, managed the engagement on a day-to-day basis. Mr. Schwartz has over 18 years of experience in the real estate Advisory field, and has experience in Palmdale and Los Angeles County.

Follow-up questions should be directed to Tim Sullivan at 858.381.4381 or [email protected].

Additional support was provided as needed.

Limiting Conditions
RDR Development Holdings is responsible for representations about its development plans, marketing expectations and for disclosure of any significant information that might affect the ultimate realization of the projected results. There will usually be differences between projected and actual results because events and circumstances frequently do not occur as expected, and the differences may be material. We have no responsibility to update our report for events and circumstances occurring after the date of our report.

Payment of any and all of our fees and expenses is not in any way contingent upon any factor other than our providing services related to this report.

TABLE OF CONTENTS
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 3 Key Findings 5
Pricing & Absorption Recommendations 9
Competitive Market Assessment 18
Location Analysis 29
Economic & Demographic Market Overview 37
Housing Market Overview 43
Appendix: Land Residuals 48
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 4

KEY FINDINGS (RITTER RANCH CURRENT LAND USE PLAN)
Summary of Report Recommendations
Ritter Ranch will be a full-service master planned community on the western fringe of the City of Palmdale in Los Angeles County, California. It is currently planned for over 6,000 residential units with complementing other uses including commercial space, public schools, village centers, community parks and trails, and vast open space. The focus of this analysis are the initial 1,180 for-sale residential homes known as Phase One of the master plan (summarized in the table below and highlighted in red on the maps) with the full understanding of the greater community’s mixed-use concept and enhanced living environment. Note modifications to phase one from the initial master plan map are shown on the supplemental map. An innovative master plan model like this will be somewhat pioneering for the City of Palmdale area but it is the logical next step for the City as Ritter Ranch will build upon and improve the quality of life offered by other existing master plans both in Palmdale and in Santa Clarita.

Product Line/Series Type Configuration # of
Units PA Phase
One
# of
Units
Townhomes Townhomes 20.0/Acre 386 5W4 B 166
5X-3 B 220
SFD 5,000 SF Lots Single Family 5,000 400 TR 52116 A 53 TR 52093 A 106
5X1 / 5X2 B 241
SFD 5,500 SF Lots Single Family 5,500 184 TR51605 A 124 TR 51606 A 60
SFD 6,000 SF Lots Single Family 6,000 126 TR51604 A 126 SFD 7,000 SF Lots Single Family 7,000 84 TR 51607 A 84
1,180 1,180PHASE ONE SUMMARY
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 5 Key Findings
Ritter Ranch Master Planned Community (Phase One)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 6

KEY FINDINGS
Summary of Report Recommendations
RDR Development Holdings is evaluating the market opportunity associated with the initial phase one release at “Ritter Ranch,” a 767.2 acre, proposed mixed use, master planned community located in Los Angeles County, California, on the western border of the City of Palmdale. Ritter Ranch will provide a complete living environment for all potential homebuyer segments blending residential, commercial and recreational uses in a Palmdale market that is “ready” for such an innovative living option. The Subject site is on the more desirable western portion of the City, tucked amid a beautiful mountain setting that is just west of the Anaverde community. We anticipate that a well planned, new home development would be able to greatly enhance the immediate area. The subject of this analysis are the +/-1,180 for sale residential units currently planned for phase one of the property. The initial release is a mix of lot sizes and product types that can sell concurrently and will capitalize on expediated home price appreciation in more western areas of the County. Product types and lot sizes have been defined by RDR Development Holdings. This analysis provides a representation of what pricing and absorption make sense for the master plan’s first product release. After evaluating the competitive market and speaking with our builder and developer clients in the local area, we believe Ritter Ranch continues to offer a very good to even great development opportunity that should be well received in the market. From a new home housing perspective, single family home development in Los Angeles County is particularly rare given the built-out nature of most western areas of the County and exceedingly high land costs which translate into some of the least affordable residential home prices in both California and the United States. Palmdale is an area that provides buyers with notable price relief, however, living choices historically have been rather basic. Ritter Ranch will be able to offer the public an attainably priced home and an exciting place to live. This is further supported by the following:
• Given the site size and current land plan, our product recommendations are based on excellent master plan execution complemented with quality production home builders that have regional and national marketing reach. Living in Ritter Ranch goes beyond just owning a home but buying into a lifestyle that cannot be found elsewhere in Palmdale. Phase One will be the public’s first introduction to this community what will be a source of new home supply for the County for years to come. • Zonda’s recommended average base price for the first 1,180 homes at Ritter Ranch in today’s market is $564,322. Once estimated premiums and options and upgrades are factored, the average/total sales price is $609,027 equating to $255 per square foot. Product type by product type pricing and absorption recommendations are as follows (see the greater analysis for detail on each of these inputs):

KEY FINDINGS
Summary of Report Recommendations
• As of August 2021, our recommended prices continue to position Phase One as the price leader in the Antelope Valley (Palmdale and Lancaster) which is logical given: 1) the innovative mixed-use setting; 2) brand new construction (currently very limited); 3) proposed amenity offering (rare in Palmdale); 4) natural mountain setting (extremely rare); and 5) west Palmdale location (preferred location). Ritter Ranch will be a next step living option for a City that is truly “ready” for a new full-service master plan. Prices for a home at the Subject will be at the top of the local market, a clear step above what is currently offered but within established values for better homes in the area. From a regional perspective there remains a large price disparity between the Santa Clarita Valley and in the Antelope Valley (base price per square foot at $344 versus $215) and Ritter Ranch, with all its positive attributes, will strategically close that gap while offering attainably priced housing for the greater County. • Zonda estimates hypothetical community homes sales for Phase One at Ritter Ranch starting with 138 sales in Year One and up to 261 units per year by Year Three. By Year Three, Phase 1B could come online with replacement product in subsequent phases entering the market in Year Four. Zonda remains comfortable with targeting annual sales in the 300 to 400 unit or more range if the master plan were to offer both a conventional and active adult program (the active adult segment is not part of Phase One which translates to lower annual sales compared to our initial analysis in 2019). Note: this sell out schedule assumes consistent land releases and uninterrupted sales efforts. Actual sales releases and infrastructure timing will impact this sell/build out schedule and the execution of community design must be timely and excellent. Further, this sell out schedule is based on master planning principles and what is marketable today and what will be marketable as the community matures. Zonda does not envision releasing townhomes until the community gains market footing and is “ready” to offer attached homes which are currently nonexistent in the Antelope Valley. The schedule below shows the townhomes entering the market in mid Year Three and selling into Year Eight while other replacement conventional homes are selling in other phases.

Phase 1B
Begins
Plan For
Phase 2 Here
Product Line/Series Type Configuration # of
Units PA Phase
One
# of
Units
Monthly
Pace Year One Year Two Year Three Year Four Year Five Year Six Year Seven Year Eight Townhomes Townhomes 20.0/Acre 386 5W4 B 166 4.0 24 48 48 46 Assumes Second Distinct Townhome Series: 5X-3 B 220 24 48 48 48 52 SFD 5,000 SF Lots Single Family 5,000 400 TR 52116 A 53 5.0 53 TR 52093 A 106 7 60 39
Assumes Two Communities Selling Concurrently: 5X1 / 5X2 B 241 60 120 61 SFD 5,500 SF Lots Single Family 5,500 184 TR51605 A 124 4.5 54 54 16 TR 51606 A 60 38 22
SFD 6,000 SF Lots Single Family 6,000 126 TR51604 A 126 4.0 24 48 48 6 SFD 7,000 SF Lots Single Family 7,000 84 TR 51607 A 84 3.0 36 36 12 1,180 1,180 4.3 138 198 261 232 157 94 48 52COMMUNITY SUMMARY

HYPOTHETICAL COMMUNITY SELL OUT
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 8

KEY FINDINGS
Summary of Report Recommendations
• Based on our recommended base prices and hypothetical premiums, our static land residual reflects an average finished lot price of $183,679 (+/-32% lot-to- home price ratio). Lot prices range from +/-$137,407 for a Townhome to +/-$237,217 for a SFD 7,000 square foot lot. Note: we used builder profit of 8% for the detached series and 12% for the attached series and hard costs that range $95 to $105 per square foot. While home prices have increased notably the past two years, so have hard costs which mitigates some of the lot price gains. Variations to these inputs will impact the residual amount. This model does not account for City of Palmdale specific fees.

NET BASE PRICE $ Assumptions Base Plus Premiums RESIDUAL INPUTS LAND RESIDUAL OUTPUT Project/Subdivision Type Configuration # of Units Est % of Total Units
Average
Unit Size Net Base Price $/SF Premiums Base +
Premiums $/SF Builder Profit Hard Costs Lot Price
Lot to Home
Price (plus
Prem's)
Townhomes Townhomes 20.0/Acre 386 33% 1,800 $465,000 $258 $4,650 $469,650 $261 12% $105 $137,407 29.3% SFD 5,000 SF Lots Single Family 5,000 400 34% 2,450 $566,250 $231 $16,988 $583,238 $238 8% $95 $195,930 33.6% SFD 5,500 SF Lots Single Family 5,500 184 16% 2,700 $612,500 $227 $18,375 $630,875 $234 8% $95 $207,193 32.8% SFD 6,000 SF Lots Single Family 6,000 126 11% 3,100 $675,000 $218 $20,250 $695,250 $224 8% $95 $216,509 31.1% SFD 7,000 SF Lots Single Family 7,000 84 7% 3,400 $740,000 $218 $22,200 $762,200 $224 8% $95 $237,217 31.1% 1,180 100% 2,413 $564,322 $237 $13,887 $578,209 $242 9% $98 $183,679 31.6%COMMUNITY SUMMARY Ritter Ranch MPC Phase One │ RDR Development Holdings │ 9 Pricing & Absorption Recommendations
Ritter Ranch Master Planned Community (Phase One)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 10

RITTER RANCH OFFERS AN ATTRACTIVE VALUE PROPOSITION
Pricing & Absorption Recommendations
Ritter Ranch is an assemblage of +/-767.2 acres in west Palmdale. The aerial map below provides perspective on the Subject Property’s location within the Antelope Valley (Palmdale and Lancaster) and greater Los Angeles County. While the site is technically on the fringe of the City, Ritter Ranch is in the preferred location within the immediate area as Palmdale is considered more attractive than Lancaster and west Palmdale is considered more attractive than east Palmdale. Phase One of the development has some infrastructure in place including roads and utilities. For-sale new home supply in Los Angeles County is very low compared to employment growth in the County which has subsequently pushed home prices (and commute times) near the top of California and the greater Country. Ritter Ranch will be a new master planned community that will add much needed new home options in a location that is already in the path of development, were homebuyers have historically gone for value and within reasonable commute times to employment in both the Antelope Valley and Santa Clarita Valley. Note the new home base price per square foot values in “closer in” areas of Los Angeles and the pricing alternative and quality of life Ritter Ranch will provide to the market.

Source: Google Earth; Zonda
Ritter Ranch Phase One
Base Price +/-$237/SF
Santa Clarita ($344/SF)
Pacific Ocean
San Fernando ($411/SF)
Antelope Valley ($215/SF)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 11

FOR-SALE PRODUCT AND PRICING SUMMARY
Pricing & Absorption Recommendations
For-Sale Product for Phase One with Our Recommended Pricing Offers a Rather Wide Array of Living Options Consistent With the Overall Community Concept and Vision. We support Ritter Ranch development opportunity given the overall innovative master planned community vision, the site’s unique and beautiful physical attributes and the goal to offer attainably priced lot/home volume in a County with a dire affordability issue. A residential community is the logical use for this land, and we have no real concerns with its overall marketability. Large-scale production builder programs are currently limited in the Palmdale area market but historically this has been a very active market and an opportunity like Ritter Ranch could bring builders back to the area. Overall, the product plan appears consistent with demand in the local and regional market and the planned residential product series will create a cohesive, balanced master planned community.

The table below summarizes Zonda’s recommended base prices, options, premiums, average price and absorption potential for Phase One’s 1,180 for-sale units at Ritter Ranch.

Recommended net base prices as of August average $564,322 and our total/average sales prices are $609,027 for a 2,413 square foot home. The total/average price today includes +/-$30,817 (5.5%) of the base price for options and upgrades with 4% estimated for the Townhomes and 6% for the single-family series. These percentages can vary widely depending on the ultimate builder of the product line. There will also be an opportunity to capture lot premiums at the Subject for an assortment of conditions such as:
subdivision location (many parcels will be elevated and gated), territorial views, lot size, cul-de-sac, location etc. Our estimated average premium for the community is 2.5% of the base price, or +/-$13,887 per home (1.0% and 3.0% depending on the series). These premium estimates may end up being conservative, however, at this stage of planning we side with the conservative approach until subdivisions are more defined and there is an opportunity to “walk” each lot for more refined premium opportunities. Note: our recommended prices heavily consider the impacts of the Subject’s estimated tax rate of 2.0% and homeowners association dues at $150 per month. These monthly assessments will be at the top of the current Palmdale area market and changes to them may impact our recommended prices.

BASE PRICE NET BASE PRICE $ ASSUMPTIONS AVERAGE PRICE
Project/Subdivision Type Configuration # of Units Est % of Total Units
Average
Unit Size Base Price $/SF
Price
Impacting
Incentives
Net Base Price $/SF Options Premiums Average Price $/SF Estimated Sales/Month
Townhomes Townhomes 20.0/Acre 386 33% 1,800 $465,000 $258 $0 $465,000 $258 $18,600 $4,650 $488,250 $271 4.00 SFD 5,000 SF Lots Single Family 5,000 400 34% 2,450 $566,250 $231 $0 $566,250 $231 $33,975 $16,988 $617,213 $252 5.00 SFD 5,500 SF Lots Single Family 5,500 184 16% 2,700 $612,500 $227 $0 $612,500 $227 $36,750 $18,375 $667,625 $247 4.50 SFD 6,000 SF Lots Single Family 6,000 126 11% 3,100 $675,000 $218 $0 $675,000 $218 $40,500 $20,250 $735,750 $237 4.00 SFD 7,000 SF Lots Single Family 7,000 84 7% 3,400 $740,000 $218 $0 $740,000 $218 $44,400 $22,200 $806,600 $237 3.00 1,180 100% 2,413 $564,322 $237 $0 $564,322 $237 $30,817 $13,887 $609,027 $255 4.3COMMUNITY SUMMARY Ritter Ranch MPC Phase One │ RDR Development Holdings │ 12 $400,000
$450,000
$500,000
$550,000
$600,000
$650,000
$700,000
$750,000
$800,000
1,500 1,750 2,000 2,250 2,500 2,750 3,000 3,250 3,500 3,750 4,000 Net Base Price
Unit Size (Square Feet)
Townhomes - 20.0/Acre, RDR Development, 4.0 sls per mo
SFD 5,000 SF Lots - 5,000 sq ft, RDR Development, 5.0 sls per mo SFD 5,500 SF Lots - 5,500 sq ft, RDR Development, 4.5 sls per mo SFD 6,000 SF Lots - 6,000 sq ft, RDR Development, 4.0 sls per mo SFD 7,000 SF Lots - 7,000 sq ft, RDR Development, 3.0 sls per mo Source: Zonda

BASE PRICE PRODUCT ARRAY
Pricing & Absorption Recommendations
The graph below illustrates the pricing segmentation for the proposed product program at Ritter Ranch. Base pricing ranges between approximately $450,000 and $770,000, which encompasses a large, and very underserved portion of the new home demand in the County and is generally consistent with what is expected in the City of Palmdale for new product. With this proposed program Ritter Ranch will offer a wide variety of product and price points to attract a broad range of buyer profiles.

Wide Range of Unit Sizes
Wide Range of Prices
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 13

FLOORPLAN HIGH AND LOW DETAIL (PAGE ONE)
Pricing & Absorption Recommendations
The table below lists the recommended base price, total price, and absorption estimate for each Phase One product series. The lot sizes and unit counts per parcel are as per RDR Development Holdings.

1. Options and Upgrades: 4% and 6% of the base price depending on the series. This ranges from an average of $18,600 for the townhomes to $44,400 for the 7,000 SF Lots;

2. Premiums: 1.0% attached homes and 3.0% detached of the base price for conditions such as subdivision location (many parcels will be elevated and gated), territorial views, larger lots, cul-de-sac lots, privacy/end units and proximity to amenities. These estimates may end up being conservative and we recommend revisiting this revenue input as progress continues. The most accurate way to determine the premium opportunity is to “walk” each lot but at this stage of planning that is premature;

3. $150 per month for HOA dues (same estimates from our previous analysis). Note that it is likely the attached homes will have a higher monthly rate;

4. A total tax rate of 2.0%. This assumed rate is on the higher side for the City of Palmdale but there are communities in the market at a similar rate (Joshua Ranch and Seasons at Avenue R). Variations to the tax rate may impact our recommended prices. See the hypothetical tax rate sensitivity table following this floorplan breakdown.

COMMUNITY SPECIFICS FLOORPLANS RECOMMENDATIONS
Subject Property Name Mo Base Incentives Net Base Net Base Assumptions Total Payment Assumptions 80.0% Location Size Sales Base Price/ Options / Price Price ($ Price/ Options / Estimated Total Price/ Monthly Base Addl Tax 3.2% Product Details Sales Summary Mix SF Pace Price SF Upgrades Reduction Impacting) SF UpgradesPremiums Price SF HOA Tax Rate Assess. Mo. Pmt.

Townhomes RDR Development 193 1,600 4.0 $450,000 $281 $0 $0 $450,000 $281 $18,000 $4,500 $472,500 $295 $150 1.10% 0.90% $2,572 Palmdale Ritter Ranch 193 2,000 $480,000 $240 $0 $0 $480,000 $240 $19,200 $4,800 $504,000 $252 $150 1.10% 0.90% $2,734 Product: Townhomes Total Units: 386
Configuration: 20.0/Acre Units Sold: 0
Lot Dimensions: ATT 3 Months Sold: 0
Planning Area: Units Remaining: 386
5W4 166 % Remaining: 100%
5X-3 220
Summary Statistics: 1,800 4.0 $465,000 $258 $0 $0 $465,000 $258 $18,600 $4,650 $488,250 $271 $150 1.10% 0.90% $2,653 SFD 5,000 SF Lots RDR Development 200 2,100 5.0 $540,000 $257 $0 $0 $540,000 $257 $32,400 $16,200 $588,600 $280 $150 1.10% 0.90% $3,167 Palmdale Ritter Ranch 200 2,800 $592,500 $212 $0 $0 $592,500 $212 $35,550 $17,775 $645,825 $231 $150 1.10% 0.90% $3,461 Product: Single Family Total Units: 400
Configuration: 5,000 Units Sold: 0
Lot Dimensions: - 3 Months Sold: 0
Planning Area: Units Remaining: 400
TR 52116 53 % Remaining: 100%
TR 52093 106
5X1 / 5X2 241
Summary Statistics: 2,450 5.0 $566,250 $231 $0 $0 $566,250 $231 $33,975 $16,988 $617,213 $252 $150 1.10% 0.90% $3,314 Ritter Ranch MPC Phase One │ RDR Development Holdings │ 14

FLOORPLAN HIGH AND LOW DETAIL (PAGE TWO)
Pricing & Absorption Recommendations

SFD 5,500 SF Lots RDR Development 92 2,400 4.5 $590,000 $246 $0 $0 $590,000 $246 $35,400 $17,700 $643,100 $268 $150 1.10% 0.90% $3,447 Palmdale Ritter Ranch 92 3,000 $635,000 $212 $0 $0 $635,000 $212 $38,100 $19,050 $692,150 $231 $150 1.10% 0.90% $3,698 Product: Single Family Total Units: 184
Configuration: 5,500 Units Sold: 0
Lot Dimensions: - 3 Months Sold: 0
Planning Area: Units Remaining: 184
TR51605 124 % Remaining: 100%
TR 51606 60
Summary Statistics: 2,700 4.5 $612,500 $227 $0 $0 $612,500 $227 $36,750 $18,375 $667,625 $247 $150 1.10% 0.90% $3,573 SFD 6,000 SF Lots RDR Development 63 2,700 4.0 $645,000 $239 $0 $0 $645,000 $239 $38,700 $19,350 $703,050 $260 $150 1.10% 0.90% $3,754 Palmdale Ritter Ranch 63 3,500 $705,000 $201 $0 $0 $705,000 $201 $42,300 $21,150 $768,450 $220 $150 1.10% 0.90% $4,089 Product: Single Family Total Units: 126
Configuration: 6,000 Units Sold: 0
Lot Dimensions: - 3 Months Sold: 0
Planning Area: Units Remaining: 126
TR51604 126 % Remaining: 100%
Summary Statistics: 3,100 4.0 $675,000 $218 $0 $0 $675,000 $218 $40,500 $20,250 $735,750 $237 $150 1.10% 0.90% $3,922 SFD 7,000 SF Lots RDR Development 42 3,000 3.0 $710,000 $237 $0 $0 $710,000 $237 $42,600 $21,300 $773,900 $258 $150 1.10% 0.90% $4,117 Palmdale Ritter Ranch 42 3,800 $770,000 $203 $0 $0 $770,000 $203 $46,200 $23,100 $839,300 $221 $150 1.10% 0.90% $4,453 Product: Single Family Total Units: 84
Configuration: 7,000 Units Sold: 0
Lot Dimensions: - 3 Months Sold: 0
Planning Area: Units Remaining: 84
TR 51607 84 % Remaining: 100%
Summary Statistics: 3,400 3.0 $740,000 $218 $0 $0 $740,000 $218 $44,400 $22,200 $806,600 $237 $150 1.10% 0.90% $4,285 Ritter Ranch MPC Phase One │ RDR Development Holdings │ 15

SUBJECT PROPERTY RECOMMENDATIONS BASED ON VARIOUS TAX RATES Pricing & Absorption Recommendations
The table below shows our recommended prices for the Subject based on various tax rates. We have assumed that the Subject Property will have a 2.0% total tax rate as per our initial analysis. We understand that this is only an estimate at this time and will adjust as planning moves forward. Tax rates influence achievable home values based on the impact on monthly payments and the cost of future tax payments. Changes in the tax rate will require adjustments either up or down in home prices. The table below shows how our recommended home prices would be adjusted for various rate changes. Each scenario results in the same total monthly payment (mortgage + HOA + taxes). Note that builders typically do not count on 100% of this pricing disparity and often assume from 70% to 80% of the difference.

COMMUNITY SPECIFICS
Subject Property Name Mo. Pmt.

Location Meyers Total Price Meyers Total Price Meyers Total Price Meyers Total Price Without Product Details Sales Summary Mix 2.00% Tax Rate 1.25% Tax Rate 1.50% Tax Rate 1.75% Tax Rate PMI Townhomes RDR Development 193 $472,500 $538,105 $514,302 $492,515 $2,572 Palmdale Ritter Ranch 193 $504,000 $573,978 $548,588 $525,350 $2,734 Product: Townhomes Total Units: 386
Configuration: 20.0/Acre
Summary Statistics: $488,250 $556,041 $531,445 $508,933 $2,653 SFD 5,000 SF Lots RDR Development 200 $588,600 $670,325 $640,673 $613,534 $3,167 Palmdale Ritter Ranch 200 $645,825 $735,495 $702,961 $673,183 $3,461 Product: Single Family Total Units: 400
Configuration: 5,000
Summary Statistics: $617,213 $702,910 $671,817 $643,358 $3,314 SFD 5,500 SF Lots RDR Development 92 $643,100 $732,392 $699,995 $670,342 $3,447 Palmdale Ritter Ranch 92 $692,150 $788,252 $753,384 $721,470 $3,698 Product: Single Family Total Units: 184
Configuration: 5,500
Summary Statistics: $667,625 $760,322 $726,689 $695,906 $3,573 SFD 6,000 SF Lots RDR Development 63 $703,050 $800,665 $765,248 $732,832 $3,754 Palmdale Ritter Ranch 63 $768,450 $875,146 $836,434 $801,002 $4,089 Product: Single Family Total Units: 126
Configuration: 6,000
Summary Statistics: $735,750 $837,906 $800,841 $766,917 $3,922 SFD 7,000 SF Lots RDR Development 42 $773,900 $881,353 $842,366 $806,683 $4,117 Palmdale Ritter Ranch 42 $839,300 $955,833 $913,552 $874,853 $4,453 Product: Single Family Total Units: 84
Configuration: 7,000
Summary Statistics: $806,600 $918,593 $877,959 $840,768 $4,285

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 16

PROJECT PHASING AND ABSORPTION SCHEDULE
Pricing & Absorption Recommendations
Zonda estimates hypothetical community homes sales for Phase One at Ritter Ranch starting with 138 sales in Year One and up to 261 units per year by Year Three. By Year Three, Phase 1B could come online with replacement product in subsequent phases entering the market in Year Four. Zonda remains comfortable with targeting annual sales in the 300 to 400 unit or more range if the master plan were to offer both a conventional and active adult program (the active adult segment is not part of Phase One which translates to lower annual sales compared to our initial analysis in 2019). Note: this sell out schedule assumes consistent land releases and uninterrupted sales efforts. Actual sales releases and infrastructure timing will impact this sell/build out schedule and the execution of community design must be timely and excellent. Further, this sell out schedule is based on master planning principles and what is marketable today and what will be marketable as the community matures. Zonda does not envision releasing townhomes until the community gains market footing and is “ready” to offer attached homes which are currently nonexistent in the Antelope Valley.

The schedule below shows the townhomes entering the market in mid Year Three and selling into Year Eight while other replacement conventional homes are selling in other phases.

HYPOTHETICAL COMMUNITY SELL OUT
0 50
100
150
200
250
300
Year One Year Two Year Three Year Four Year Five Year Six Year Seven Year Eight Ritter Ranch Phase One Hypothetical Sell Out Schedule
Townhomes SFD 5,000 SF Lots SFD 5,500 SF Lots SFD 6,000 SF Lots SFD 7,000 SF Lots Year Four – Replacement Lots/Phases Needed.

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 17

HYPOTHETICAL FINISHED LOT PRICES
Pricing & Absorption Recommendations
Based on our recommended base prices and hypothetical premiums, our static land residual reflects an average finished lot price of $183,679 (+/-32% lot-to-home price ratio). Lot prices range from +/-$137,407 for a Townhome to +/-$237,217 for a SFD 7,000 square foot lot. Note: we used builder profit of 8% for the detached series and 12% for the attached series and hard costs that range $95 to $105 per square foot. While home prices have increased notably the past two years, so have hard costs which mitigates some of the lot price gains. Variations to these inputs will impact the residual amount. This model does not account for City of Palmdale specific fees. $137,407
$195,930 $207,193 $216,509 $237,217
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Townhomes SFD 5,000 SF Lots SFD 5,500 SF Lots SFD 6,000 SF Lots SFD 7,000 SF Lots Ritter Ranch Phase One Hypothetical Lot Prices (Static Land Residual) NET BASE PRICE $ Assumptions Base Plus Premiums RESIDUAL INPUTS LAND RESIDUAL OUTPUT Project/Subdivision Type Configuration # of Units Est % of Total Units
Average
Unit Size Net Base Price $/SF Premiums Base +
Premiums $/SF Builder Profit Hard Costs Lot Price
Lot to Home
Price (plus
Prem's)
Townhomes Townhomes 20.0/Acre 386 33% 1,800 $465,000 $258 $4,650 $469,650 $261 12% $105 $137,407 29.3% SFD 5,000 SF Lots Single Family 5,000 400 34% 2,450 $566,250 $231 $16,988 $583,238 $238 8% $95 $195,930 33.6% SFD 5,500 SF Lots Single Family 5,500 184 16% 2,700 $612,500 $227 $18,375 $630,875 $234 8% $95 $207,193 32.8% SFD 6,000 SF Lots Single Family 6,000 126 11% 3,100 $675,000 $218 $20,250 $695,250 $224 8% $95 $216,509 31.1% SFD 7,000 SF Lots Single Family 7,000 84 7% 3,400 $740,000 $218 $22,200 $762,200 $224 8% $95 $237,217 31.1% 1,180 100% 2,413 $564,322 $237 $13,887 $578,209 $242 9% $98 $183,679 31.6%COMMUNITY SUMMARY Ritter Ranch MPC Phase One │ RDR Development Holdings │ 18 Competitive Market Assessment
Ritter Ranch Master Planned Community (Phase One)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 19

RITTER RANCH PHASE ONE RECOMMENDED PRICE POSITIONING RATIONALE Competitive Market Assessment
Our recommended prices position Phase One of the Ritter Ranch master planned community as the price leader in the Antelope Valley (Palmdale and Lancaster) which is logical given: 1) the innovative mixed-use setting (currently nonexistent); 2) brand new construction (increasing but still rather limited and basic); 3) proposed amenity offering (rare in Palmdale); 4) natural mountain setting (extremely rare); and 5) west Palmdale location (preferred location). Ritter Ranch will be a next step living option for a City that is truly “ready” for a full-service master plan. Prices for a home at the Subject will be at the top of the local market, a clear step above, but not a step away from current residential options. From a regional perspective there remains a large price disparity between the Santa Clarita Valley and in the Antelope Valley (currently in the high $700,000s versus the mid $500,000s) and Ritter Ranch, with all its positive attributes, will strategically close that gap while offering attainably priced housing for the greater County. The visual below provides a quick snapshot of the overall value opportunity. The following slides detail our recommended prices versus various other housing choices.
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
$1,500,000
$1,600,000
$1,700,000
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 Total Price / Closed Price
Unit Size (Square Feet)
Townhomes - 20.0/Acre, RDR Development, 4.0 sls per mo
SFD 5,000 SF Lots - 5,000 sq ft, RDR Development, 5.0 sls per mo SFD 5,500 SF Lots - 5,500 sq ft, RDR Development, 4.5 sls per mo SFD 6,000 SF Lots - 6,000 sq ft, RDR Development, 4.0 sls per mo SFD 7,000 SF Lots - 7,000 sq ft, RDR Development, 3.0 sls per mo Anelope Valley - Active New Homes (Built 2021)
Avg. 8,484 SF Lots @ $557,967 ($215/SF)
Santa Clarita Valley - Active New Homes (Built 2021)
Avg. 4,841 SF Lots @ $776,322 ($344/SF)
San Fernando Valley - Active New Homes (Built 2021)
Avg. 11,587 SF Lots @ $1,862,121 ($411/SF)
Log. (Anelope Valley - Active New Homes (Built 2021)
Avg. 8,484 SF Lots @ $557,967 ($215/SF))
Log. (Santa Clarita Valley - Active New Homes (Built 2021) Avg. 4,841 SF Lots @ $776,322 ($344/SF))
Log. (San Fernando Valley - Active New Homes (Built 2021) Avg. 11,587 SF Lots @ $1,862,121 ($411/SF))Source: Zonda Ritter Ranch MPC Phase One │ RDR Development Holdings │ 20

AREA NEW HOME CLOSINGS (CITY OF PALMDALE AREA)
Competitive Market Assessment
For this Phase One analysis, we compared newer home closings (2000 to 2014 and 2015+) within the City of Palmdale area over the past three months versus the recommended total prices for Ritter Ranch’s initial release (base plus options and upgrades plus premiums). We have also overlaid home closings in the nearby Avaverde master plan, which will restart and add new home supply to the market. From an absolute price perspective, our recommended price points are at the very top of the local market but well within established values for the area. The Subject’s Townhomes are close to a tradeoff with the single-family resales of the same size which makes sense given Ritter Ranch homes will be new construction within an amenitized master planned community. Some homebuyers will choose low maintenance, attached living in the Subject versus a stale resale single family home. Note there are no newer attached communities in Palmdale to provide any real insight to the overall positioning. Our recommended prices for the single family detached series are at the top of the market. Upon first review there may be an opportunity to push these prices upward even further, however, consider 1) the Subject will have a higher tax rate than most of the resale homes which impacts the monthly payment and affordability; 2) the lot sizes at the Subject will be on the smaller end compared to the resale homes; and 3) Ritter Ranch will be offering several different series at the same time our recommended prices must also balance absorption targets.
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
$700,000
$750,000
$800,000
$850,000
$900,000
1,500 2,000 2,500 3,000 3,500 4,000 4,500
Total Price / Closed Price
Unit Size (Square Feet)
Townhomes - 20.0/Acre, RDR Development, 4.0 sls per mo
SFD 5,000 SF Lots - 5,000 sq ft, RDR Development, 5.0 sls per mo SFD 5,500 SF Lots - 5,500 sq ft, RDR Development, 4.5 sls per mo SFD 6,000 SF Lots - 6,000 sq ft, RDR Development, 4.0 sls per mo SFD 7,000 SF Lots - 7,000 sq ft, RDR Development, 3.0 sls per mo City of Palmdale 2015+ (Built 2018)
Avg. 7,925 SF Lots @ $548,214 ($213/SF)
City of Palmdale 2000-2014 (Built 2005)
Avg. 14,763 SF Lots @ $573,847 ($208/SF)
Anaverde (Built 2010)
Avg. 8,311 SF Lots @ $524,404 ($210/SF)
Log. (City of Palmdale 2015+ (Built 2018)
Avg. 7,925 SF Lots @ $548,214 ($213/SF))
Log. (City of Palmdale 2000-2014 (Built 2005)
Avg. 14,763 SF Lots @ $573,847 ($208/SF))
Log. (Anaverde (Built 2010)
Avg. 8,311 SF Lots @ $524,404 ($210/SF))Source: Zonda
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 21

AREA NEW HOME CLOSINGS (EAST PALMDALE VS WEST PALMDALE) Competitive Market Assessment
This pricing analysis reviews all closed homes in West Palmdale versus East Palmdale with SR-14 as the City division line. It is clear here that pricing in West Palmdale achieves a notable premium over the east part of the City. Our recommended prices for Ritter Ranch are well above East Palmdale with even the attached series above the trend for single-family homes in this area. Ritter Ranch’s prices are at the top of the West Palmdale market but amid established higher end values (again our recommendations are a step above what is offered but by no means would be considered too aggressive as better homes in the market commonly sell from $600,000 to over $800,000). $300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
$700,000
$750,000
$800,000
$850,000
$900,000
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
Total Price / Closed Price
Unit Size (Square Feet)
Townhomes - 20.0/Acre, RDR Development, 4.0 sls per mo
SFD 5,000 SF Lots - 5,000 sq ft, RDR Development, 5.0 sls per mo SFD 5,500 SF Lots - 5,500 sq ft, RDR Development, 4.5 sls per mo SFD 6,000 SF Lots - 6,000 sq ft, RDR Development, 4.0 sls per mo SFD 7,000 SF Lots - 7,000 sq ft, RDR Development, 3.0 sls per mo West Palmdale (Built 1996)
Avg. 15,880 SF Lots @ $552,090 ($233/SF)
East Palmdale (Built 1986)
Avg. 9,411 SF Lots @ $413,247 ($237/SF)
Log. (West Palmdale (Built 1996)
Avg. 15,880 SF Lots @ $552,090 ($233/SF))
Log. (East Palmdale (Built 1986)
Avg. 9,411 SF Lots @ $413,247 ($237/SF))
Source: Meyers Research
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 22

NEW HOME COMPARABLE MAP
Competitive Market Assessment
Pacific Magnolia
Seasons at Providence Ranch
Pacific Marigold
Seasons at 5th Street
Seasons at Providence Ranch
Seasons at Avenue R
Brookhaven
Pacific Creekside
Pacific Magnolia
Joshua Ranch
Anaverde MPC
UNIT COUNT SUMMARY SALES PACE UNIT SIZE RANGE NET BASE PRICE RANGE* (*AFTER PRICE REDUCING INCENTIVES) AVERAGE AVERAGE

TOTAL PRICE RANGE
(NET BASE + O/U + PREMIUMS)

COMMUNITY BUILDER LOT SIZE TOTAL TOTAL
SOLD
LAST
3 MO. REMAIN CONFIGURATION HISTORICAL LAST 3 MO. MIN MAX AVG MIN MAX AVG

OPTIONS PREMIUMS

MIN MAX AVG
Pacific Creekside Pacific Communities 7,000 93 80 5 13 7,000 4.9 1.7 2,999 4,266 3,633 $702,990 $721,990 $712,490 $35,000 $12,000 $749,990 $768,990 $759,490 Seasons at Avenue R Richmond American 7,000 162 141 24 21 7,000 5.4 8.0 1,590 3,040 2,248 $482,990 $577,490 $525,907 $25,000 $10,000 $517,990 $612,490 $560,907 Brookhaven Frontier Communities 9,800 16 13 0 3 9,800 8.4 8.4 2,398 2,697 2,545 $510,930 $530,010 $519,243 $25,000 $10,000 $545,930 $565,010 $554,243 Sandstone Joshua Ranch City Ventures 10,000 89 89 17 0 10,000 6.6 5.7 2,556 3,189 2,829 $500,990 $600,990 $550,990 $70,000 $10,000 $580,990 $680,990 $630,990 Seasons at 5th Street Richmond American 7,000 35 20 12 15 7,000 3.4 4.0 2,082 3,040 2,594 $475,990 $541,990 $505,990 $20,000 $10,000 $505,990 $571,990 $535,990 Seasons at Providence Ranch Richmond American 7,000 147 138 7 9 7,000 4.8 2.3 1,590 3,040 2,248 $485,990 $574,990 $523,490 $20,000 $15,000 $520,990 $609,990 $558,490 Pacific Marigold Encore Pacific Communities 7,200 43 12 8 31 7,200 2.8 2.7 1,867 2,220 2,056 $466,990 $497,990 $486,657 $25,000 $8,000 $499,990 $530,990 $519,657 TOTALS: 585 493 73 92 AVERAGE: 5.2 4.7 2,155 3,070 2,593 $518,124 $577,921 $546,395 $31,429 $10,714 $560,267 $620,064 $588,538 COMMUNITY AVG: 84 70 10 13 MEDIAN: 4.9 4.0 2,082 3,040 2,545 $485,990 $574,990 $523,490 $25,000 $10,000 $520,990 $609,990 $558,490 Ritter Ranch MPC Phase One │ RDR Development Holdings │ 23 $425,000
$450,000
$475,000
$500,000
$525,000
$550,000
$575,000
$600,000
$625,000
$650,000
$675,000
$700,000
$725,000
$750,000
$775,000
$800,000
1,500 2,000 2,500 3,000 3,500 4,000 4,500
Net Base Price
Unit Size (Square Feet)
Townhomes - 20.0/Acre, RDR Development, 4.0 sls per mo
SFD 5,000 SF Lots - 5,000 sq ft, RDR Development, 5.0 sls per mo SFD 5,500 SF Lots - 5,500 sq ft, RDR Development, 4.5 sls per mo SFD 6,000 SF Lots - 6,000 sq ft, RDR Development, 4.0 sls per mo SFD 7,000 SF Lots - 7,000 sq ft, RDR Development, 3.0 sls per mo Pacific Creekside - 7,000 sq ft, Pacific Communities, 4.9/1.7 sls per mo Seasons at Avenue R - 7,000 sq ft, Richmond American, 5.4/8.0 sls per mo Brookhaven - 9,800 sq ft, Frontier Communities, 8.4/8.4 sls per mo Sandstone Joshua Ranch - 10,000 sq ft, City Ventures, 6.6/5.7 sls per mo Seasons at 5th Street - 7,000 sq ft, Richmond American, 3.4/4.0 sls per mo Seasons at Providence Ranch - 7,000 sq ft, Richmond American, 4.8/2.3 sls per mo Pacific Marigold Encore - 7,200 sq ft, Pacific Communities, 2.8/2.7 sls per mo Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month BASE PRICE POSITIONING: ACTIVE NEW HOME COMMUNITIES IN THE ANTELOPE VALLEY Competitive Market Assessment
From a base price perspective our recommended prices position Ritter Ranch’s initial product release at the top of the Antelope Valley new home market. The Subject’s single family detached home prices are generally above what is offered which makes sense given the environment planned and setting. Ritter Ranch’s Townhome series are below single family detached home prices in Palmdale and consistent with Lancaster given the attached home market is somewhat untested and the Subject’s tax rate and HOA estimates will push the overall positioning upward (see the monthly payment chart on page 26).

LOCATION LEGEND

SUBJECT PROPERTY

PALMDALE

LANCASTER
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 24 $425,000
$450,000
$475,000
$500,000
$525,000
$550,000
$575,000
$600,000
$625,000
$650,000
$675,000
$700,000
$725,000
$750,000
$775,000
$800,000
$825,000
$850,000
$875,000
$900,000
$925,000
$950,000
$975,000
1,000 1,500 2,000 2,500 3,000 3,500 4,000
Net Base Price
Unit Size (Square Feet)
Townhomes - 20.0/Acre, RDR Development, 4.0 sls per mo
SFD 5,000 SF Lots - 5,000 sq ft, RDR Development, 5.0 sls per mo SFD 5,500 SF Lots - 5,500 sq ft, RDR Development, 4.5 sls per mo SFD 6,000 SF Lots - 6,000 sq ft, RDR Development, 4.0 sls per mo SFD 7,000 SF Lots - 7,000 sq ft, RDR Development, 3.0 sls per mo Bluma at Vista Canyon - 2,100 sq ft, KB Home, 6.4/8.3 sls per mo Auburn at Vista Canyon - 2,300 sq ft, KB Home, 4.4/0.7 sls per mo Sola - 3,750 sq ft, TRI Pointe Homes, 5.6/2.0 sls per mo Luna - 7,500 sq ft, TRI Pointe Homes, 5.1/4.3 sls per mo Victoria at Plum Canyon - 5,775 sq ft, Toll Brothers, 6.0/3.7 sls per mo Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month BASE PRICE POSITIONING: ACTIVE NEW HOME COMMUNITIES IN NORTHEAST SANTA CLARITA Competitive Market Assessment
From a base price perspective our recommended prices position Ritter Ranch at a discount to active subdivisions in northeast Santa Clarita. Like all areas of Southern California, Santa Clarita has experienced sharp appreciation over the past year with current new home prices starting in the mid to high $600,000s up to $1,000,000.

Submarket wide Santa Clarita new homes average in the mid $700,000s for a home on a higher density lot while the Antelope Valley is in the mid $500,000s for more conventional lot sizes. Our average price for Ritter Ranch is +/-$600,000 which remains a notable value from what is available further south on SR-14.

LOCATION LEGEND

SUBJECT PROPERTY

VISTA CANYON (SANTA CLARITA)

SKYLINE (SANTA CLARITA)

PLUM CANYON (SANTA CLARITA)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 25 $450,000
$500,000
$550,000
$600,000
$650,000
$700,000
$750,000
$800,000
$850,000
$900,000
$950,000
$1,000,000
$1,050,000
$1,100,000
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
Total Price
Unit Size (Square Feet)
Townhomes - 20.0/Acre, RDR Development, 4.0 sls per mo
SFD 5,000 SF Lots - 5,000 sq ft, RDR Development, 5.0 sls per mo SFD 5,500 SF Lots - 5,500 sq ft, RDR Development, 4.5 sls per mo SFD 6,000 SF Lots - 6,000 sq ft, RDR Development, 4.0 sls per mo SFD 7,000 SF Lots - 7,000 sq ft, RDR Development, 3.0 sls per mo Pacific Creekside - 7,000 sq ft, Pacific Communities, 4.9/1.7 sls per mo Seasons at Avenue R - 7,000 sq ft, Richmond American, 5.4/8.0 sls per mo Brookhaven - 9,800 sq ft, Frontier Communities, 8.4/8.4 sls per mo Sandstone Joshua Ranch - 10,000 sq ft, City Ventures, 6.6/5.7 sls per mo Seasons at 5th Street - 7,000 sq ft, Richmond American, 3.4/4.0 sls per mo Seasons at Providence Ranch - 7,000 sq ft, Richmond American, 4.8/2.3 sls per mo Pacific Marigold Encore - 7,200 sq ft, Pacific Communities, 2.8/2.7 sls per mo Bluma at Vista Canyon - 2,100 sq ft, KB Home, 6.4/8.3 sls per mo Auburn at Vista Canyon - 2,100 sq ft, KB Home, 4.4/0.7 sls per mo Sola - 3,750 sq ft, TRI Pointe Homes, 5.6/2.0 sls per mo Luna - 7,500 sq ft, TRI Pointe Homes, 5.1/4.3 sls per mo Victoria at Plum Canyon - 5,775 sq ft, Toll Brothers, 6.0/3.7 sls per mo Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month TOTALPRICE POSITIONING: ACTIVE NEW HOME COMMUNITIES
Competitive Market Assessment
Once options and upgrades and premiums are factored in the Subject’s overall positioning is in the middle between active communities in the Antelope Valley and active communities in northeast Santa Clarita Valley. Given the overall environment anticipated at Ritter Ranch this pricing strategy will create a rather compelling reason to save on a home and live in a state-of-the-art community in Palmdale over Santa Clarita.

LOCATION LEGEND

SUBJECT PROPERTY

PALMDALE

LANCASTER

VISTA CANYON (SANTA CLARITA)

SKYLINE (SANTA CLARITA)

PLUM CANYON (SANTA CLARITA)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 26 MONTHLY PAYMENT POSITIONING: ACTIVE NEW HOME COMMUNITIES Competitive Market Assessment
Once a 2.0% total tax rate and a $150 monthly HOA assessment are factored in the Subject’s true positioning in the greater competitive market is revealed. Ritter Ranch is priced truly in between the two submarkets. Overall, Zonda supports this market positioning given the understanding that the Subject will be the most complete living environment in the Palmdale area and community execution will be exceptional all while remaining at a clear discount to Santa Clarita. $2,000
$2,250
$2,500
$2,750
$3,000
$3,250
$3,500
$3,750
$4,000
$4,250
$4,500
$4,750
$5,000
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
Estimated Monthly Payment
Unit Size (Square Feet)
Townhomes - 20.0/Acre, RDR Development, 4.0 sls per mo
SFD 5,000 SF Lots - 5,000 sq ft, RDR Development, 5.0 sls per mo SFD 5,500 SF Lots - 5,500 sq ft, RDR Development, 4.5 sls per mo SFD 6,000 SF Lots - 6,000 sq ft, RDR Development, 4.0 sls per mo SFD 7,000 SF Lots - 7,000 sq ft, RDR Development, 3.0 sls per mo Pacific Creekside - 7,000 sq ft, Pacific Communities, 4.9/1.7 sls per mo Seasons at Avenue R - 7,000 sq ft, Richmond American, 5.4/8.0 sls per mo Brookhaven - 9,800 sq ft, Frontier Communities, 8.4/8.4 sls per mo Sandstone Joshua Ranch - 10,000 sq ft, City Ventures, 6.6/5.7 sls per mo Seasons at 5th Street - 7,000 sq ft, Richmond American, 3.4/4.0 sls per mo Seasons at Providence Ranch - 7,000 sq ft, Richmond American, 4.8/2.3 sls per mo Pacific Marigold Encore - 7,200 sq ft, Pacific Communities, 2.8/2.7 sls per mo Bluma at Vista Canyon - 2,100 sq ft, KB Home, 6.4/8.3 sls per mo Auburn at Vista Canyon - 2,100 sq ft, KB Home, 4.4/0.7 sls per mo Sola - 3,750 sq ft, TRI Pointe Homes, 5.6/2.0 sls per mo Luna - 7,500 sq ft, TRI Pointe Homes, 5.1/4.3 sls per mo Victoria at Plum Canyon - 5,775 sq ft, Toll Brothers, 6.0/3.7 sls per mo Source: Meyers Research; Individual Community Sales Offices Absorption = Historical/3 Month Ritter Ranch MPC Phase One │ RDR Development Holdings │ 27

ACTIVE NEW HOME COMMUNITY FLOORPLAN SUMMARY
Competitive Market Assessment

COMMUNITY SPECIFICS AND SALES PACE FLOORPLAN SUMMARY COMPETITIVE MARKET PRICING SUMMARY Project Name Builder Name Base Current Incentives Net Base Net Base Typical Total Monthly Payment Inputs 80.0% Location Master Plan Size Base Price/ Price Options / Closing $ / Price ($ Price/ Options / Total Price/ Monthly Base Addl 3.2% Product Details Sales Summary SF Bed Bath Level Pkg Price Sq. Ft. Reduction Upgrades Other Reduction) Sq. Ft. UpgradesPremiums Price SF HOA Tax Taxes Mo.Pmt.

Pacific Creekside Pacific Communities 2,999 3 2.5 0 2 $702,990 $234 $0 $0 ($3,000) $702,990 $234 $35,000 $12,000 $749,990 $250 $0 1.20% 0.65% $3,751 Palmdale - 4,266 5.3.5 2.0 2 2 $721,990 $169 $0 $0 ($3,000) $721,990 $169 $35,000 $12,000 $768,990 $180 $0 1.20% 0.65% $3,846 Product: Single Family Total Units: 93 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Configuration: 7,000 Units Sold: 80 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Lot Dimensions: 70x100 3 Months Sold: 5 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Sales Open Date: Mar-20 Units Remaining: 13 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Overall Sales Rate: 4.9 % Remaining: 14% #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 3 Mon. Sales Rate: 1.7 - #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Totals/Averages: 3,633 $712,490 $196 $0 $0 ($3,000) $712,490 $196 $35,000 $12,000 $759,490 $209 $0 1.20% 0.65% $3,799 Seasons at Avenue R Richmond American 1,590 3 2.0 1 2 $482,990 $304 $0 $0 ($14,490) $482,990 $304 $25,000 $10,000 $517,990 $326 $0 1.20% 1.00% $2,742 Palmdale - 1,740 3 2.0 1 2 $503,990 $290 $0 $0 ($15,120) $503,990 $290 $25,000 $10,000 $538,990 $310 $0 1.20% 1.00% $2,853 Product: Single Family Total Units: 162 2,080 3 2.0 1 2 $531,990 $256 $0 $0 ($15,960) $531,990 $256 $25,000 $10,000 $566,990 $273 $0 1.20% 1.00% $3,001 Configuration: 7,000 Units Sold: 141 2,380 3 2.5 2 2 $522,490 $220 $0 $0 ($15,675) $522,490 $220 $25,000 $10,000 $557,490 $234 $0 1.20% 1.00% $2,951 Lot Dimensions: 70x100 3 Months Sold: 24 2,660 3 2.5 2 2 $536,490 $202 $0 $0 ($16,095) $536,490 $202 $25,000 $10,000 $571,490 $215 $0 1.20% 1.00% $3,025 Sales Open Date: Jun-19 Units Remaining: 21 3,040 4 2.5 2 2 $577,490 $190 $0 $0 ($17,325) $577,490 $190 $25,000 $10,000 $612,490 $201 $0 1.20% 1.00% $3,242 Overall Sales Rate: 5.4 % Remaining: 13% #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 3 Mon. Sales Rate: 8.0 - #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Totals/Averages: 2,248 $525,907 $234 $0 $0 ($15,777) $525,907 $234 $25,000 $10,000 $560,907 $249 $0 1.20% 1.00% $2,969 Brookhaven Frontier Communities 2,398 3 2.5 2 2 $510,930 $213 $0 $0 ($8,000) $510,930 $213 $25,000 $10,000 $545,930 $228 $0 1.25% 0.00% $2,457 Palmdale - 2,541 3 2.5 3 2 $516,790 $203 $0 $0 ($8,000) $516,790 $203 $25,000 $10,000 $551,790 $217 $0 1.25% 0.00% $2,484 Product: Single Family Total Units: 16 2,697 3 2.5 2 3 $530,010 $197 $0 $0 ($8,000) $530,010 $197 $25,000 $10,000 $565,010 $209 $0 1.25% 0.00% $2,543 Configuration: 9,800 Units Sold: 13 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Lot Dimensions: 70x140 - #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Sales Open Date: Jun-21 Units Remaining: 3 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Overall Sales Rate: 8.4 % Remaining: 19% #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 3 Mon. Sales Rate: 8.4 - #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Totals/Averages: 2,545 $519,243 $204 $0 $0 ($8,000) $519,243 $204 $25,000 $10,000 $554,243 $218 $0 1.25% 0.00% $2,495 Sandstone Joshua Ranch City Ventures 2,556 4 2.5 1 2 $500,990 $196 $0 $0 ($5,000) $500,990 $196 $70,000 $10,000 $580,990 $227 $165 1.20% 0.80% $3,143 Palmdale - 2,741 4 2.5 1 2 $550,990 $201 $0 $0 ($5,000) $550,990 $201 $70,000 $10,000 $630,990 $230 $165 1.20% 0.80% $3,400 Product: Single Family Total Units: 89 3,189 4 3.5 2 3 $600,990 $188 $0 $0 ($5,000) $600,990 $188 $70,000 $10,000 $680,990 $214 $165 1.20% 0.80% $3,656 Configuration: 10,000 Units Sold: 89 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Lot Dimensions: 80x125 3 Months Sold: 17 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Sales Open Date: Jun-20 Units Remaining: 0 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Overall Sales Rate: 6.6 % Remaining: 0% #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 3 Mon. Sales Rate: 5.7 - #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Totals/Averages: 2,829 $550,990 $195 $0 $0 ($5,000) $550,990 $195 $70,000 $10,000 $630,990 $223 $165 1.20% 0.80% $3,400 Ritter Ranch MPC Phase One │ RDR Development Holdings │ 28

ACTIVE NEW HOME COMMUNITY FLOORPLAN SUMMARY
Competitive Market Assessment

Seasons at 5th Street Richmond American 2,082 3 2.0 1 2 $475,990 $229 $0 $0 ($14,280) $475,990 $229 $20,000 $10,000 $505,990 $243 $0 1.25% 0.00% $2,278 Lancaster - 2,660 3 2.5 2 2 $499,990 $188 $0 $0 ($15,000) $499,990 $188 $20,000 $10,000 $529,990 $199 $0 1.25% 0.00% $2,386 Product: Single Family Total Units: 35 3,040 4 2.5 2 2 $541,990 $178 $0 $0 ($16,260) $541,990 $178 $20,000 $10,000 $571,990 $188 $0 1.25% 0.00% $2,575 Configuration: 7,000 Units Sold: 20 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Lot Dimensions: 70x100 3 Months Sold: 12 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Sales Open Date: Feb-21 Units Remaining: 15 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Overall Sales Rate: 3.4 % Remaining: 43% #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 3 Mon. Sales Rate: 4.0 - #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Totals/Averages: 2,594 $505,990 $195 $0 $0 ($15,180) $505,990 $195 $20,000 $10,000 $535,990 $207 $0 1.25% 0.00% $2,413 Seasons at Providence Ranch Richmond American 1,590 3 2.0 1 2 $485,990 $306 $0 $0 ($14,580) $485,990 $306 $20,000 $15,000 $520,990 $328 $0 1.25% 0.72% $2,658 Lancaster - 1,750 3 2.0 1 2 $500,990 $286 $0 $0 ($15,030) $500,990 $286 $20,000 $15,000 $535,990 $306 $0 1.25% 0.72% $2,734 Product: Single Family Total Units: 147 2,080 3 2.0 1 2 $526,990 $253 $0 $0 ($15,810) $526,990 $253 $20,000 $15,000 $561,990 $270 $0 1.25% 0.72% $2,867 Configuration: 7,000 Units Sold: 138 2,370 3 2.5 2 2 $518,990 $219 $0 $0 ($15,570) $518,990 $219 $20,000 $15,000 $553,990 $234 $0 1.25% 0.72% $2,826 Lot Dimensions: 70x100 3 Months Sold: 7 2,660 3 2.5 2 2 $532,990 $200 $0 $0 ($15,990) $532,990 $200 $20,000 $15,000 $567,990 $214 $0 1.25% 0.72% $2,898 Sales Open Date: Mar-19 Units Remaining: 9 3,040 4 2.5 2 2 $574,990 $189 $0 $0 ($17,250) $574,990 $189 $20,000 $15,000 $609,990 $201 $0 1.25% 0.72% $3,112 Overall Sales Rate: 4.8 % Remaining: 6% #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 3 Mon. Sales Rate: 2.3 - #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Totals/Averages: 2,248 $523,490 $233 $0 $0 ($15,705) $523,490 $233 $20,000 $15,000 $558,490 $248 $0 1.25% 0.72% $2,849 Pacific Marigold Encore Pacific Communities 1,867 3 2.0 1 2 $466,990 $250 $0 $0 ($2,500) $466,990 $250 $25,000 $8,000 $499,990 $268 $0 1.20% 0.50% $2,438 Lancaster - 2,080 3 2.0 1 2 $494,990 $238 $0 $0 ($2,500) $494,990 $238 $25,000 $8,000 $527,990 $254 $0 1.20% 0.50% $2,575 Product: Single Family Total Units: 43 2,220 3 2.0 1 2 $497,990 $224 $0 $0 ($2,500) $497,990 $224 $25,000 $8,000 $530,990 $239 $0 1.20% 0.50% $2,589 Configuration: 7,200 Units Sold: 12 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Lot Dimensions: 72x100 3 Months Sold: 8 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Sales Open Date: Mar-21 Units Remaining: 31 #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Overall Sales Rate: 2.8 % Remaining: 72% #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 3 Mon. Sales Rate: 2.7 - #N/A #### #### #### #### #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Totals/Averages: 2,056 $486,657 $237 $0 $0 ($2,500) $486,657 $237 $25,000 $8,000 $519,657 $253 $0 1.20% 0.50% $2,534 Ritter Ranch MPC Phase One │ RDR Development Holdings │ 29 Location Analysis
Ritter Ranch Master Planned Community (Phase One)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 30

RITTER RANCH OFFERS AN ATTRACTIVE VALUE PROPOSITION
Location Analysis
Ritter Ranch is an assemblage of +/-767.2 acres in west Palmdale. The aerial map below provides perspective on the Subject Property’s location within the Antelope Valley (Palmdale and Lancaster) and greater Los Angeles County. While the site is technically on the fringe of the City, Ritter Ranch is in the preferred location within the immediate area as Palmdale is considered more attractive than Lancaster and west Palmdale is considered more attractive than east Palmdale. Phase One of the development has some infrastructure in place including roads and utilities. For-sale new home supply in Los Angeles County is very low compared to employment growth in the County which has subsequently pushed home prices (and commute times) near the top of California and the greater Country. Ritter Ranch will be a new master planned community that will add much needed new home options in a location that is already in the path of development, were homebuyers have historically gone for value and within reasonable commute times to employment in both the Antelope Valley and Santa Clarita Valley. Note the new home base price per square foot values in “closer in” areas of Los Angeles and the pricing alternative and quality of life Ritter Ranch will provide to the market.

REGIONAL LOCATION & PROXIMITY TO EMPLOYMENT
Location Analysis
Source: Zonda, ESRI
Ritter Ranch is located roughly five miles from SR-14 which serves as the main thoroughfare for commuters to and from employment clusters shown on the following page. While many residents at the Subject will work from home (or may even be retired), many will not be and have a daily or multiple weekday commute. There is growing employment locally in Palmdale (+/-15-minute commute), however, outside of the Antelope Valley area many of the top employers start at a minimum of a 30-minute commute from the Subject (nonpeak travel times). The following map displays employment by block group in region and a 15-, 30-, and 60-minute drive time from Ritter Ranch.

Greater Antelope Valley Top Employers (2019)
Edwards Air Force Base 11,149
Naval Weapons Air Station – China Lake 9,906
County of Los Angeles (AV Region) 4,211
Northrop Grumman 4,200
Lockheed Martin 3,700
A.V. Union High School District 2,500
Antelope Valley Hospital Medical Center 2,425
Lancaster School District 2,200
Wal-Mart 1,922
Antelope Valley Mall 1,800
Palmdale School District 1,792
NASA Armstrong Flight Research Center 1,370
Rio Tinto Minerals 1,200
Antelope Valley College 1,118
Palmdale Regional Medical Center 1,103

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 32

REGIONAL LOCATION & COMMUTE PATTERNS
Location Analysis
The color-concentrated areas indicate the highest
proportion of commuter destinations from the City of
Palmdale. Roughly 14% of residents live and work in the City of Palmdale, while 22% of residents commute 10 miles or less and a further 4.7% commute between 10 and 24
miles to employment clusters. Approximately 73% of
residents commute 25 or more miles to employment
primarily in and around Los Angeles.

Source: On The Map Census

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 33

HOUSEHOLD INCOME CONCENTRATION MAP
Location Analysis
The average income in the Subject’s census tract is $110,552. West Palmdale is a desirable location for local households and incomes compared to the greater City are high. However, when we compare incomes to the vast wealth further south “closer in” to Los Angeles it becomes apparent that comparatively, attainably priced housing for the County should remain a focus. Being able to offer new home supply to the typical household in the region is very rare for the area. If we were to apply a basic four times multiplier to the average income the typical household would be able to afford a home +/-$440,000 just based on income alone. This is certainly a positive when planning a new for sale home community with price points that start in the $400,000s.

Source: ESRI Business Analyst

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 34

NET WORTH CONCENTRATION MAP
Location Analysis
Net Worth in the immediate area is already elevated. While many of the residents at Ritter Ranch will be employed, there will be a notable percentage of retired households living at the Subject (in both the active adult segment in later phases and in conventional homes released in phase one) suggesting their annual income may not be the best indicator of ability to own a new home. Net worth is typically a more telling statistic for the potential of retirees to purchase in a particular area. As shown below, the median net worth in the Subject’s census tract high at $308,628 with several neighboring census tracts to the north and south that are in excess of $500,000+.

Source: ESRI Business Analyst

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 35

RITTER RANCH LOCAL FOCUS
Location Analysis
While on the western edge of development in the City of Palmdale, Ritter Ranch will not be a pioneering effort for the area. Anaverde is a relatively sought after but basic master planned community just east of the property. Home values in this community range from the mid $400,000s to the mid $600,000s for single family detached homes and plans have been announced to restart the community with an additional +/-2,000 homes. Further, since our initial analysis, Joshua Ranch has opened and sold out their first phase of 89 lots. Ritter Ranch is a logical extension of residential development for the area and a clear upgrade from what is currently available in Palmdale. The Subject Property will fit well within the existing uses and will capitalize on the beautiful natural surroundings. Note that there are a series of powerlines on the site. Our report assumes the owner will mitigate all potential impacts from the towers and wires.

Source: Google Earth; RDR Development Holdings
Anaverde Hills
Palmdale Regional
Medical Center
Avaverde MPC
• +/-1,600 Existing Homes
• +/-2,000 Upcoming
(conventional and active
adult planned)
A blend of Residential options
ranging from average to above
average for Palmdale.

Lockheed Martin
Aeronautics Co.

Joshua Ranch
• Phase One Sold Out
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 36 SITE PHOTOS (FROM APRIL 2019 SITE VISIT)
Location Analysis

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 37 Economic & Demographic Overview
Ritter Ranch Master Planned Community (Phase One)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 38

LOS ANGELES COUNTY AND LOS ANGELES-LONG BEACH-ANAHEIM MSA MAP Economic & Demographic Overview
The Subject Property is located within the Los Angeles-Long Beach-Anaheim, CA Metropolitan Statistical Area (large shaded area) and Los Angeles County (dark blue shaded area only). While both Los Angeles and Orange County encompass the MSA, most of the relevant population, employment and overall economic and housing market influence related to the Subject Property is concentrated in the County. There are a few metrics that are MSA only and in those instances, we will review the greater area. The following slides highlight current, historical and projected economic and demographic indicators that will impact the success of Ritter Ranch Source: ESRI
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 39

EMPLOYMENT HISTORY AND FORECAST
Economic & Demographic Overview
After 561,717 job losses and a spiked unemployment rate in 2020, employment has started to recover in 2021 with added jobs and improving unemployment. Total employment could return to 2019 numbers of over 6.2 million sometime in the 2024 to 2025 range. Further, unemployment spiked to 9% last year (2020) but is forecasted here to get back to +/-5% sometime in 2022 (which may be aggressive given Los Angeles is a service-based economy, and a return to normal may take a little longer than the forecast suggests).

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 40

EMPLOYMENT BY SECTOR (MSA)
Economic & Demographic Overview
The pandemic year saw a sharp decline in Hospitality Services and losses in Government jobs, but rolling monthly averages appear to be quickly turning the corner with some recent growth in the higher-paying Professional & Business Services sector as well as the Trade, Construction and Education sectors. Signs of people returning to work combined with the undersupply in the immediate area are positive factors for the development of new homes MSA-wide and especially in a comparatively affordable area like Palmdale.
-1,123
-8,664
8,686 8,063
10,688
-29,034
-17,950
-12,368
-8,107
24,666
-40,000
-30,000
-20,000
-10,000
0 10,000
20,000
30,000
Financial
Activities
Information Professional &
Business Services
Construction &
Mining
Education &
Health Services
Government Leisure &
Hospitality
Manufacturing Other Services Trade, Transp.
and Utilities
Annual Non-Farm Employment Growth
Source: Moody's Analytics; U.S. Bureau of Labor Statistics (BLS) Category Financial
Activities Information
Professional &
Business
Services
Construction &
Mining
Education &
Health Services Government Leisure &
Hospitality Manufacturing Other Services Trade, Transp. and Utilities
Current Month (Apr-2021) 326,238 202,551 908,889 254,522 1,055,207 697,009 544,077 452,695 164,547 1,050,484 Current Month (Apr-2020) 327,360 211,215 900,203 246,459 1,044,519 726,042 562,028 465,063 172,654 1,025,819 12-Month Change -1,123 -8,664 8,686 8,063 10,688 -29,034 -17,950 -12,368 -8,107 24,666 Ritter Ranch MPC Phase One │ RDR Development Holdings │ 41

HOUSEHOLD GROWTH
Economic & Demographic Overview
Household growth in 2021 has rebounded notably from the loses during the Pandemic. An additional 48,000 households are expected to be formed across the Los Angeles MSA in 2021, which is the highest we have seen pre2001. Moody’s Analytics projects another spike next year even outpacing 2021. While these projections might be aggressive, there will be notable household growth in an area with very little room to expand. This translates to continued demand for new housing and large master plans like Ritter Ranch.

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 42

INCOME TO HOME VALUE RATIO
Economic & Demographic Overview
Strong median incomes are outpaced by home prices at a rate of almost 10x. While median incomes in the MSA are considered strong compared to the greater Country, home prices for an existing single-family home are at a historical peak at a median home price of over $800,000. The ratio of income to existing home price in 2020 was 9.4, but Moody’s projects this will climb to over 10.0 by year end 2021 with increases thereafter. Ritter Ranch will offer residents a much-needed living option that will be at a relative discount to unattainably priced homes in Santa Clarita, all while offering a far superior living experience to any existing community in Palmdale.

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 43 Housing Market Trends
Ritter Ranch Master Planned Community (Phase One)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 44

MSA AFFORDABILITY INDEX
Housing Market Trends
The Affordability Index is expected to drop (i.e. become less affordable) over the next five years, implying higher priced homes in reaction to lower new home building activity and the current trend where existing home prices inch ever closer to new home prices. Affordability – or the typical household’s ability to purchase the median-priced home – continues to move downward rapidly in response to vast home price appreciation in the market and limited options. Affordability is projected to continue decreasing through the foreseeable future. Offering reasonably priced product lines (especially compared to Santa Clarita (and the greater Los Angeles area) at Ritter Ranch should be met with market success.

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 45

MSA BUILDING PERMIT TRENDS
Housing Market Trends
Building permits in the MSA are expected to ramp up to higher levels than have been seen in the past 20 years. The area is expected to continue to trade single family permits for increasing shares of attached homes over the coming years in the quest for affordability and ever-tightening availability of developable land. Ritter Ranch will be able to offer notable MPC single family supply (and for sale multifamily) options to a supply constrained County and MSA.

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 46

EMPLOYMENT TO PERMIT (E/P) RATIO
Housing Market Trends
E/P Ratios in excess on 1.2 indicate a supply-constrained housing market with implied price growth, and naturally dipped very low in 2020. Moody’s Economy.com predicts a big jump in 2022 followed by a return closer to equilibrium in 2024 (1.6 is the 20-year historical average for this market).

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 47

EXISTING HOME SALES
Housing Market Trends
Home prices are projected to continue their upward momentum. After home prices the Los Angeles MSA dropped considerably in 2008 and 2009, they increased each year 2012 to today with accelerated gains over the last year. Market-wide pricing for an existing home reached is currently over $800,000, and Moody’s projects continued appreciation at an annual rate of 4% or more through 2025. At the same time, home sale activity has been up but expected to flatten in the coming years. The need for attainably priced homes in Los Angeles is at/near a historical high and Ritter Ranch will be able to offer affordable new home supply at a steep discount to the typical resale home.

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 48 Appendix: Land Residual
Ritter Ranch Master Planned Community (Phase One)
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 49 HYPOTHETICAL STATIC LAND RESIDUAL ANALYSIS: TOWNHOMES
Pricing & Absorption Recommendations
Townhomes Assumptions:

Revenue Cost/Unit 1/ Includes side and rear block walls, front yard landscaping, and on-site labor.

Revenues Impact fees are not included in the finished lot value.

Net Base Price $465,000 2/ Indirect construction costs include building permits, architecture fees, legal fees, Average Premium 1.0% $4,650 market study, construction supervision, construction trailer, on-site utilities, etc.

Average Sale Price (Base+Premium) $469,650 3/ Includes sales salaries, commissions & benefits, advertising, merchandising & Total Units 386 landscape fees for models. Even breakdown = broker co-op, sales, models, Total Gross Revenue (Lot by Lot): $181,284,900 advertising, sales staff.

Costs 4/ Includes general office expenses and liability insurance.

Average Unit Size (sq. ft.) 1,800 5/ Warranty has been estimated at 1.0%.

Hard Construction Costs /1 $105 6/ Estimated using industry average.

Total Hard Costs 40.2% of revenue $72,954,000 $189,000 7/ Miscellaneous (Legal, HOA, design, etc.) Soft Construction Costs
Indirect Construction Costs /2 4.0% of revenue $7,251,396 $18,786 Sales & Marketing /3 5.0% of revenue $9,064,245 $23,483 General/Admin./Overhead /4 3.0% of revenue $5,438,547 $14,090 Warranty /5 1.0% of revenue $1,812,849 $4,697
Financing /6 4.0% of revenue $7,251,396 $18,786
Builder Profit 12.0% of revenue $21,754,188 $56,358
Other/Expenses/Contingency /7 1.5% of revenue $2,719,274 $7,045 Total Costs: $128,245,895 $332,243.25
Finished Lot Prices
Fully Finished Land Price $53,039,006
Finished Land Price Per Lot $137,407
Land as Percentage of Base + Premium Home Price: 29.3%
The above values reflect fully finished land prices. Lots that are unimproved, or "paper lots" are priced at a discount to reflect additional costs related to site development. The cost to complete can range depending on topography and associated development and engineering costs.

Ritter Ranch MPC Phase One │ RDR Development Holdings │ 50 SFD 5,000 SF Lots Assumptions:

Revenue Cost/Unit 1/ Includes side and rear block walls, front yard landscaping, and on-site labor.

Revenues Impact fees are not included in the finished lot value.

Net Base Price $566,250 2/ Indirect construction costs include building permits, architecture fees, legal fees, Average Premium 3.0% $16,988 market study, construction supervision, construction trailer, on-site utilities, etc.

Average Sale Price (Base+Premium) $583,238 3/ Includes sales salaries, commissions & benefits, advertising, merchandising & Total Units 400 landscape fees for models. Even breakdown = broker co-op, sales, models, Total Gross Revenue (Lot by Lot): $233,295,000 advertising, sales staff.

Costs 4/ Includes general office expenses and liability insurance.

Average Unit Size (sq. ft.) 2,450 5/ Warranty has been estimated at 1.0%.

Hard Construction Costs /1 $95 6/ Estimated using industry average.

Total Hard Costs 39.9% of revenue $93,100,000 $232,750 7/ Miscellaneous (Legal, HOA, design, etc.) Soft Construction Costs
Indirect Construction Costs /2 4.0% of revenue $9,331,800 $23,330 Sales & Marketing /3 5.0% of revenue $11,664,750 $29,162 General/Admin./Overhead /4 3.0% of revenue $6,998,850 $17,497 Warranty /5 1.0% of revenue $2,332,950 $5,832
Financing /6 4.0% of revenue $9,331,800 $23,330
Builder Profit 8.0% of revenue $18,663,600 $46,659
Other/Expenses/Contingency /7 1.5% of revenue $3,499,425 $8,749 Total Costs: $154,923,175 $387,307.94
Finished Lot Prices
Fully Finished Land Price $78,371,825
Finished Land Price Per Lot $195,930
Land as Percentage of Base + Premium Home Price: 33.6%
The above values reflect fully finished land prices. Lots that are unimproved, or "paper lots" are priced at a discount to reflect additional costs related to site development. The cost to complete can range depending on topography and associated development and engineering costs.

HYPOTHETICAL STATIC LAND RESIDUAL ANALYSIS: SFD 5,000 SF LOTS Pricing & Absorption Recommendations
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 51 SFD 5,500 SF Lots Assumptions:

Revenue Cost/Unit 1/ Includes side and rear block walls, front yard landscaping, and on-site labor.

Revenues Impact fees are not included in the finished lot value.

Net Base Price $612,500 2/ Indirect construction costs include building permits, architecture fees, legal fees, Average Premium 3.0% $18,375 market study, construction supervision, construction trailer, on-site utilities, etc.

Average Sale Price (Base+Premium) $630,875 3/ Includes sales salaries, commissions & benefits, advertising, merchandising & Total Units 184 landscape fees for models. Even breakdown = broker co-op, sales, models, Total Gross Revenue (Lot by Lot): $116,081,000 advertising, sales staff.

Costs 4/ Includes general office expenses and liability insurance.

Average Unit Size (sq. ft.) 2,700 5/ Warranty has been estimated at 1.0%.

Hard Construction Costs /1 $95 6/ Estimated using industry average.

Total Hard Costs 40.7% of revenue $47,196,000 $256,500 7/ Miscellaneous (Legal, HOA, design, etc.) Soft Construction Costs
Indirect Construction Costs /2 4.0% of revenue $4,643,240 $25,235 Sales & Marketing /3 5.0% of revenue $5,804,050 $31,544 General/Admin./Overhead /4 3.0% of revenue $3,482,430 $18,926 Warranty /5 1.0% of revenue $1,160,810 $6,309
Financing /6 4.0% of revenue $4,643,240 $25,235
Builder Profit 8.0% of revenue $9,286,480 $50,470
Other/Expenses/Contingency /7 1.5% of revenue $1,741,215 $9,463 Total Costs: $77,957,465 $423,681.88
Finished Lot Prices
Fully Finished Land Price $38,123,535
Finished Land Price Per Lot $207,193
Land as Percentage of Base + Premium Home Price: 32.8%
The above values reflect fully finished land prices. Lots that are unimproved, or "paper lots" are priced at a discount to reflect additional costs related to site development. The cost to complete can range depending on topography and associated development and engineering costs.

HYPOTHETICAL STATIC LAND RESIDUAL ANALYSIS: SFD 5,500 SF LOTS Pricing & Absorption Recommendations
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 52 SFD 6,000 SF Lots Assumptions:

Revenue Cost/Unit 1/ Includes side and rear block walls, front yard landscaping, and on-site labor.

Revenues Impact fees are not included in the finished lot value.

Net Base Price $675,000 2/ Indirect construction costs include building permits, architecture fees, legal fees, Average Premium 3.0% $20,250 market study, construction supervision, construction trailer, on-site utilities, etc.

Average Sale Price (Base+Premium) $695,250 3/ Includes sales salaries, commissions & benefits, advertising, merchandising & Total Units 126 landscape fees for models. Even breakdown = broker co-op, sales, models, Total Gross Revenue (Lot by Lot): $87,601,500 advertising, sales staff.

Costs 4/ Includes general office expenses and liability insurance.

Average Unit Size (sq. ft.) 3,100 5/ Warranty has been estimated at 1.0%.

Hard Construction Costs /1 $95 6/ Estimated using industry average.

Total Hard Costs 42.4% of revenue $37,107,000 $294,500 7/ Miscellaneous (Legal, HOA, design, etc.) Soft Construction Costs
Indirect Construction Costs /2 4.0% of revenue $3,504,060 $27,810 Sales & Marketing /3 5.0% of revenue $4,380,075 $34,763 General/Admin./Overhead /4 3.0% of revenue $2,628,045 $20,858 Warranty /5 1.0% of revenue $876,015 $6,953
Financing /6 4.0% of revenue $3,504,060 $27,810
Builder Profit 8.0% of revenue $7,008,120 $55,620
Other/Expenses/Contingency /7 1.5% of revenue $1,314,023 $10,429 Total Costs: $60,321,398 $478,741.25
Finished Lot Prices
Fully Finished Land Price $27,280,103
Finished Land Price Per Lot $216,509
Land as Percentage of Base + Premium Home Price: 31.1%
The above values reflect fully finished land prices. Lots that are unimproved, or "paper lots" are priced at a discount to reflect additional costs related to site development. The cost to complete can range depending on topography and associated development and engineering costs.

HYPOTHETICAL STATIC LAND RESIDUAL ANALYSIS: SFD 6,000 SF LOTS Pricing & Absorption Recommendations
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 53 HYPOTHETICAL STATIC LAND RESIDUAL ANALYSIS: SFD 7,000 SF LOTS Pricing & Absorption Recommendations
SFD 7,000 SF Lots Assumptions:

Revenue Cost/Unit 1/ Includes side and rear block walls, front yard landscaping, and on-site labor.

Revenues Impact fees are not included in the finished lot value.

Net Base Price $740,000 2/ Indirect construction costs include building permits, architecture fees, legal fees, Average Premium 3.0% $22,200 market study, construction supervision, construction trailer, on-site utilities, etc.

Average Sale Price (Base+Premium) $762,200 3/ Includes sales salaries, commissions & benefits, advertising, merchandising & Total Units 84 landscape fees for models. Even breakdown = broker co-op, sales, models, Total Gross Revenue (Lot by Lot): $64,024,800 advertising, sales staff.

Costs 4/ Includes general office expenses and liability insurance.

Average Unit Size (sq. ft.) 3,400 5/ Warranty has been estimated at 1.0%.

Hard Construction Costs /1 $95 6/ Estimated using industry average.

Total Hard Costs 42.4% of revenue $27,132,000 $323,000 7/ Miscellaneous (Legal, HOA, design, etc.) Soft Construction Costs
Indirect Construction Costs /2 4.0% of revenue $2,560,992 $30,488 Sales & Marketing /3 5.0% of revenue $3,201,240 $38,110 General/Admin./Overhead /4 3.0% of revenue $1,920,744 $22,866 Warranty /5 1.0% of revenue $640,248 $7,622
Financing /6 4.0% of revenue $2,560,992 $30,488
Builder Profit 8.0% of revenue $5,121,984 $60,976
Other/Expenses/Contingency /7 1.5% of revenue $960,372 $11,433 Total Costs: $44,098,572 $524,983.00
Finished Lot Prices
Fully Finished Land Price $19,926,228
Finished Land Price Per Lot $237,217
Land as Percentage of Base + Premium Home Price: 31.1%
The above values reflect fully finished land prices. Lots that are unimproved, or "paper lots" are priced at a discount to reflect additional costs related to site development. The cost to complete can range depending on topography and associated development and engineering costs.

APPENDIX
Company Experience
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 54 Zonda, is a nation-wide research firm guiding real estate investors throughout the country. Our highly educated and experienced consulting staff believes in providing the highest quality service possible to our clients, which means completing the exact analysis they need. We are home to over 140 experts in 10 offices across the country.

Our company offers a unique research tool known as Zonda that offers an edge to our research with easy access real-time data at a local level across the United States. Our local Zonda database provides our team with a history of new and resale housing information, maps, comprehensive data, and many other metrics we use in our analyses to begin the reporting process with greater accuracy -- quickly, accurately and cost- effectively -- with on the ground and in person research. Zonda provides access to over 275 metrics influencing the housing industry including monthly and annual historical trends, future projections and real-time narrative reported by seasoned analysts across the country.

Our senior executive team are thought leaders that individually have more than 30 years of experience in housing and real estate research. With our advisory services, we have navigated builders through different housing cycles and have a deep understanding of local markets. Our consulting team has a broad range of housing expertise and experience spanning the country including consumer research, feasibility studies, portfolio valuation, business planning, and custom research designed to make better decisions related to any real estate investment.

Zonda and Our Research
• Competitive Analysis throughout the Country
• Exclusive Access to our Research & Consulting Executives • Metro Analysis & Housing Trends
• Apartment Analysis & Forecast
• Exclusive Client Events
• Presentations & Webinars
• Proprietary Surveys
Advisory
• For-Sale, Apartment, Commercial & Mixed Use
• Resort & International Development
• Strategic Direction & Planning
• Home Builder Operations Assessment
• Demand Analysis
• Consumer Research & Focus Groups
• Custom Economic Analysis & Forecasting
• Litigation Support & Expert Witness
• Financial Modeling
• Project & Product Positioning
Consumer and Product Strategy
• Consumer and Product Insights
• Tactical and Marketing Strategies
• Product Design Advisory
• Custom Consumer Research
• Customer Shop Research
Ritter Ranch MPC Phase One │ RDR Development Holdings │ 55 Thank you!
This analysis was prepared by Zonda.

TDG 2023 102 75

QUALIFICATIONS

LANCE W. DORÉ, MAI, FRICS

Lance W. Doré is the President and CEO of The Doré Group. In this role, he directs all valuation assignments involving a wide variety of conventional and complex real properties, serves as litigation support to both public and private clients, provides expert advisory services (including forensic analyses and market and feasibility studies), and manages the overall operations of The Doré Group.

Mr. Doré has been a real estate appraiser since 1983, initially working for Bank of America as a staff appraiser then as a senior appraiser with a fee appraisal firm in Del Mar, California. In 1988, he formed L.W. Doré, Real Estate Consultants and grew the firm through the addition of two partners forming Doré & Curry, Inc. (1990) and Doré, Curry, & Marschall, Inc. ( 1997). In 1999, Doré, Curry, & Marschall, Inc. became the San Diego office for Integra Realty Resources with Mr. Doré serving as Managing Director. In the fall of 2005 , Mr. Doré joined Cushman & Wakefield as the National Practice Leader of the Government A ffairs and Energy division. In 2007, he pursued an opportunity to serve as the President of European Emerging Markets and Vice President of Client Services for PGP, Inc./Collie rs International. Mr. Doré’s unique depth of experience, coupled with his high personal standards of service, led him to found The Doré Group in 2010.

Experience
Mr. Doré’s work experience spans a wide variety of property types with special expertise in the valuation of energy facilities, conservation land, open space corridors and r anches. In addition, he has also appraised planned- unit developments, residential income properties, senior housing, shopping centers, office, industrial, mixed -use properties, and a multitude of special purpose properties, including, but not limited to ho tels, ski resorts, restaurants, hospitals, recreational camps, auto service and wrecking centers, equestrian facilities, and golf courses. He regularly serves as an expert advisor conducting appraisal reviews, forensic studies, and marketability and feasib ility analyses. In addition, Mr. Doré is uniquely qualified and experienced in litigation testimony, consultation and advisory serv ices for all real estate related issues. His geographical valuation expertise is focused in the western United States and ext ends to Tokyo (Japan), Central America, Mexico, Cyprus, and Moscow (Russia).

Licenses/Certifications/ Affiliations
Certified General Real Estate Appraiser – State of California (OREA No. AG002464) California Licensed Real Estate Broker & Realtor member - San Diego Board of Realtors Credentialed Mediator – National Conflict Resolution Center Member of the Appraisal Institute (MAI No. 8471)
Fellow of the Royal Institute of Charter Surveyors (FRICS Designation) Registered Valuer - Royal Institute of Charter Surveyors for international valuation Member of the International Right of Way Association (IR/WA) Member of the Family Firm Institute – FFI
Member of the Lambda Alpha International – Land Economic Society – LAI

Instructor Positions
National Instructor (Real Estate Valuation Principles & Practice) - Appraisal Institute Adjunct Professor - Russian Federation Finance Academy
National Instructor – (Business Development and Leadership) – Royal Institute of Charter Surveyors National Instructor - (Red Book Standards) - Royal Institute of Charter Surveyors National Instructor - (Hotel Valuation) - Royal Institute of Charter Surveyors National Instructor - (International Valuation and Property Measurement Standards) - Royal Institute of Charter Surveyors National Instructor - (Subdivision Development) - Royal Institute of Charter Surveyors National Instructor - (Automated Valuation Models) - Royal Institute of Charter Surveyors National Instructor - (Bridging the Gap of IVSC v. USPAP) - Royal Institute of Charter Surveyors

Leadership/Committees
Past President – Appraisal Institute, San Diego Chapter Past member of International Relations Committee – Appraisal Institute Past member of Ethics & Standards Committee – Appraisal Institute

Speaking Engagements
Appraisal Institute (National Seminar Series, Los Angeles, CA) - Land Valuation & Environmental Issues The Trust for Public Land (San Diego, CA) - Natural Communities Conservation Plan Pan Pacific Conference (Auckland, New Zealand) – Valuation of Submerged Lands Government of Cyprus (Nicosia, Cyprus) – Valuation of Golf Courses and Marinas The Russian Federation (Moscow, Russia) - Valuation of Land and Appraisal Principles The Russian Federation (Goa, India) - Valuation of Oil and Gas and Power Plants Royal Institute of Charter Surveyors (Montego Bay, Jamaica) – Government & Regulatory Risk Graziadio School of Business & Management, Pepperdine (Los Angeles, CA)–2008 US & California Forecast Appraisal Institute (San Diego, CA) – Unique Valuations in Real Estate Appraisal Institute (San Diego, CA) – International Financial Reporting Standards (IFRS) California Redevelopment Agency (Workshop Series, CA) – Real Estate Valuation for AB1X 26 & AB1484 Risk Management Association (RMA) – Appraisal Risk and the Valuation Process University of San Diego – MBA program – Guest Lecturer
University of San Francisco – Geller Family Business Center – Family Office Valuation NAI Global Conference – Real Estate Investment Pyramid

Publications
Appraisal Journal (October 2001) – “The Valuation of Submerged Land” Energy Pulse (March 2006) – “The Highest and Best Use of Power Plants” Union of Pan America Valuers (November 2010) – “Impact of Public to Private Partnerships in BRICS” Wall Street Journal (August 2001) – “Power Plant Owners Fight to Lower Taxes” The Secret of Real Estate – Revealed (2011)
IRWA Right of Way (July/August 2018) – “Conservation Easements – Unraveling the Mystery”

Representative Client List
Public Entities
United States Department of the Interior United States Forest Service United States Department of Navy United States Department of Justice Government of Cyprus Russian Federation
State of California – Judicial Courts County of San Diego State of California – Auditor County of San Bernardino
County of Riverside County of Los Angeles
County of Monterey City of Riverside
City of San Diego Port of Long Beach
Los Angeles Dept. of Water and Power Port of Oakland
City of Monterey Port of Vancouver

Legal Clients – Local, Regional, National and International Firms. Cri minal, Transactional and Civil Litigation. Qualified Expert in Federal Bankruptcy Court, United States Judicial District Court, California Superior Court, San Diego Superior Court, Los Angeles Superior Court, Washington State Superior Court.

Financial Institutions – All Major Local, Regional and National Organizations. Savings and Loans, Banks, Insurance Companies, Investment Firms, Brokerage Firms and Insurance Companies.

Non-Profit Conservation Groups – Local, Regional and National Organizations.

Family Offices – Estate Planning, Tax Planning, Consultation City Council Staff Report
DATE: NOVEMBER 15, 2023
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS
DISTRICT: ALL
SUBJECT: APPROVE EXECUTION OF AGREEMENTS RELATED TO THE

PALMDALE SOLAR AND BATTERY RESIDENTIAL PROGRAM
ISSUE
Approve execution of agreements related to the Palmdale Solar and Battery Residential Program.

RECOMMENDATION
Staff recommends the City Council grant the City Manager, or her designee, the authority to execute all agreements; Agreement No. A -8536, A-8537, A-8538, A-8539, and A-8216, including non-substantive changes related to the Palmdale Power Choice Solar Battery and Residential Program.

BACKGROUND
The City’s CCA Program, Energy for Palmdale’s Independent Choice (EPIC), was established by the City Council through the adoption of Resolution No. CC 2018 -087, which approved the submittal of an Implementation Plan (Plan), per Public Utilities Code Section 366.2(c), on December 4, 2018. The Plan was certified by the Energy Division on February 28, 2019, and EPIC successfully began serving customers on October 1, 2022.

In addition to providing renewable energy at competitive prices to our customers, EPIC intends to offer customers programs to not only support the renewable energy goals of the state by leveraging innovation and cutting -edge technologies but also to enhance grid stability and create new meaningful benefits for our residents. The actions before the City Council are in support of this effort.

DISCUSSION
The Power Choice Solar and Battery Residential Program was developed by CalChoice member, Participate Energy, and Tesla to support new home developers in meeting their Title 24 requirements . It also provides homeowners with a zero up -front cost option to install solar and batteries for energy savings, backup power, and potentially participating in grid services. This program was successfully launched in October 2022, a nd as a CalChoice member, Palmdale has an opportunity to implement this program in our community based on the established program agreements.

Report to Mayor and City Council
Re: Approve to execute agreements related to Palmdale Solar and Battery Residential Program
November 15, 2023

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Palmdale City CouncilNovember 15, 2023

Palmdale City Council
November 15, 2023