Palmdale City Council
December 18, 2024

1. CALL MEETING TO ORDER

Note: All City Council memberships are reflected in their City Council titles.

2. ROLL CALL

MAYOR BISHOP, MAYOR PRO TEM LOA, COUNCILMEMBERS OHLSEN,

BETTENCOURT, ALARC
Ó
N

COMMISSIONERS FRAGA-SAENZ, BETTS

3. PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

PUBLIC COMMENT RULES
“(California Government Code Section 54954.3).
(a) Every agenda for regular meetings shall provide an opportunity for members of the public to directly address the legislative body on any item of interest to the public, before or during the legislative body’s consideration of the item, that is within the subject matter jurisdiction of the legislative body, provided that no action shall be taken on any item not appearing on the agenda unless the action is otherwise authorized by subdivision (b) of Section 54954.2 [section omitted].

(b) (1) The legislative body of a local agency may adopt reasonable regulations to ensure that the intent of the subdivision (a) is carried out, including, but not limited to, regulations limiting the total amount of time allocated for public testimony on particular issues and for each individual speaker.

CITY COUNCIL

HOUSING AUTHORITY

CITY COUNCIL CHAMBERS
38300 SIERRA HIGHWAY

SUITE B
PALMDALE, CA 93550
WEDNESDAY, DECEMBER 18, 2024
5:00 PM
www.cityofpalmdaleca.gov

WELCOME
City Council
Wednesday, December 18, 2024
(2) Notwithstanding paragraph (1), when the legislative body of a local agency limits time for public comment, the legislative body of a local agency shall provide at least twice the allotted time to a member of the public who utilizes a translator to ensure that non- English speakers receive the same opportunity to directly address the legislative body of a local agency.”

In furtherance of Section 54954.3 of the Brown Act, the public is allotted to speak a total of two (2) minutes on the entirety of the Consent Calendar, Appointment(s), New Business and Closed Session, with two (2) minutes on each Public Hearing, and, if desired, an additional two (2) minutes on items not on the agenda that are within the subject matter jurisdiction of the City Council. As specified in the Brown Act, a speaker utilizing a translator will receive twice the amount of time specified.

4. PUBLIC COMMENTS

CONSENT CALENDAR, APPOINTMENT(S), NEW BUSINESS, AND CLOSED SESSION: Now is the time for public participation on items listed on the Consent Calendar, Appointment(s), New Business, and Closed Session. Each speaker is allotted two (2) minutes in total for the entirety of the above sections.

5. HOUSING AUTHORITY CONSENT CALENDAR
All matters listed under the Housing Authority Consent Calendar will be enacted by one motion unless an item(s) is pulled by the Authority, in which case the item(s) will be removed from the Consent Calendar and will be considered separately following this portion of the Agenda.

5.1 Approve First Amendment to Memorandum of Understanding with the City of Palmdale to accept an increase of $600,000 of United States Treasury Coronavirus State and Local Fiscal Recovery Funds (SLFRF) under the American Rescue Plan Act (ARPA) Funds for Development of Affordable Housing.

SR Agrmt No. A-8029 HA First Amendment to Memorandum of Understanding.docx

Agrmt No. A-8029 HA First Amendment to Memorandum of Understanding.pdf

5.2 Adopt Resolution No. HA 2024-007, a Resolution of the Housing Authority of the City of Palmdale approving an Exclusive Negotiation Agreement, a Letter of Loan Commitment for $9,375,000, and a Predevelopment Loan Agreement between the Housing Authority of the City of Palmdale and Linc 4th Street Palmdale, LP for $1,800,000 for Pre-Development Activities for a Proposed Affordable Housing Rental Development located at East Avenue Q and 4th Street East, on a portion of APN 3006-008-921.

SR Reso. No. HA 2024-007.docx

Reso. No. HA 2024-007 TV LINC ARPA.docx

Agrmt No. A-9120 with Linc 4th Street Palmdale, LP.pdf

Agrmt No. A-9121 with Linc 4th Street Palmdale, LP.pdf
City Council
Wednesday, December 18, 2024

Ltr of Loan Commitment with Linc 4th Street Palmdale, LP.pdf

Site Map.pdf

5.3 Approve the minutes from the previous meeting.

Minutes 12 04 2024.pdf

6. CONSENT CALENDAR
All matters listed under the Consent Calendar will be enacted by one motion unless an item(s) is pulled by Council, in which case the item(s) will be removed from the Consent Calendar and will be considered separately following this portion of the Agenda.

6.1 Waive full reading of the Resolution(s) and/or Ordinance(s) to be considered and voted on at this meeting. (This allows for reading the title only in lieu of reciting the entire text).

6.2 Adopt Resolution No. CC 2024-091, a Resolution of the City Council of the City of Palmdale authorizing the City Manager to execute agreements with the California Department of Tax and Fee Administration for implementation of a local transactions and use tax; and adopt Resolution No. CC 2024-095, a Resolution of the City Council of the City of Palmdale authorizing examination of sales or transactions and use tax records.

SR Measure PD.docx

Reso. No. CC 2024-091 Measure PD.docx

Exh A Reso. No. CC 2024-091 City Preparatory Agreement.docx

Exh B Reso. No. CC 2024-091 City Administration Agreement.docx

Reso. No. CC 2024-095 Examination of Confidential Records.docx

6.3 Adopt Resolution Nos. SA 2024-014 and SA 2024-015, Resolutions of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale approving the Recognized Obligation Payment Schedule (ROPS) and the Administrative Budget, respectively, for the period of July 1, 2025 through June 30, 2026.

SR Successor Agency ROPS 25-26 and Administrative Budget.docx

Reso. No. SA 2024-014 ROPS.docx

Exh A Reso. No. SA 2024-014 ROPS 25-26.pdf

Reso. No. SA 2024-015 Admin Budget 25-26.docx

Exh A Reso. No. SA 2024-015 Admin Budget 25-26.pdf

6.4 Approve Agreement with New Creation Builders, Inc. for design and build services for PN 902, Emergency Operations Center (EOC) Tenant Improvement Project, for a total not to exceed amount of $5,113,831, includes 10% contingency and labor compliance costs for a term of 350 working days from the date of the Notice to Proceed.

SR Agrmt No. A-8955 with New Creation Builders, Inc.docx City Council
Wednesday, December 18, 2024

Agrmt No. A-8955 with New Creation Builders, Inc.pdf

6.5 Award and Approve Agreement with New Creation Builders, Inc., for design services portion of the bid (Phase One) for PN 874, South Antelope Valley Emergency Services Tenant Improvements and Relocation Project, for a total not to exceed amount of $633,000 for a term of 330 calendar days from the date of the Notice to Proceed.

SR Agrmt No. A-9143 with New Creation Builders, Inc.docx

Agrmt No. A-9143 with New Creation Builders, Inc.pdf

Project Map.pdf

6.6 Adopt Resolution No. CC 2024-089, a Resolution of the City Council of the City of Palmdale setting aside portions of City-owned land (APN 3128-015-903), for right- of-way and bikeway requirements along 10th Street West and Columbia Way (Avenue M) for public road and highway purposes.

SR Reso. No. CC 2024-089.docx

Reso. No. CC 2024-089.docx

Exh A Legal Description.pdf

Exh B Plat Map.pdf

6.7 Adopt Resolution No. CC 2024-090, a Resolution of the City Council of the City of Palmdale authorizing the execution of a grant deed for portions of City-owned land to the California Department of Transportation for parcel 79478-1, identified in Right of Way Appraisal Map Nos. 27055-C and 27056-C.

SR Reso. No. CC 2024-090.docx

Reso. No. CC 2024-090.docx

Appraisal Maps 27055-C and 27056-C.pdf

Grant Deed of Parcel 79478-1.pdf

6.8 Approve First Amendment to Memorandum of Understanding with the Housing Authority of the City of Palmdale to provide an Increase of $600,000 of United States Treasury Coronavirus State and Local Fiscal Recovery Funds (SLFRF) under the American Rescue Plan Act (ARPA) funds for development of affordable housing.

SR Agrmt No. A-8029 City First Amendment to Memorandum of Understanding.docx

Agrmt No. A-8029 City First Amendment to Memorandum of Understanding.pdf

6.9 Adopt Ordinance No. 1649, an Ordinance of the City Council of the Chartered City of Palmdale, California, amending Section 2.08.040 of Chapter 2.08 of Title 2 of the Palmdale Municipal Code, establishing the City Council's regular meeting day, time and place.

Ord. No. 1649.docx

7. PUBLIC HEARING
City Council
Wednesday, December 18, 2024

7.1 Adopt Resolution No. CC 2024-092, a Resolution of the City Council of the City of Palmdale calling a special election regarding alteration of the amended rate and method of apportionment of special taxes for the City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 public facilities); Resolution No. CC 2024-093, a Resolution of the City Council of the City of Palmdale declaring results of special election in the City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 public facilities), determining that alteration of the rate and method of apportionment of special taxes for the district is lawfully authorized, and directing recording of amended and restated notice of special tax lien; and Resolution No. CC 2024-094, a Resolution of the City Council of the City of Palmdale approving a Supplement No.1 to acquisition agreement relating to the City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 public facilities) 2025 Special Tax Bonds.

SR CFD 2022-3 RMA Amendment.docx

Reso. No. CC 2024-092 Resolution Calling Special Election.docx

Reso. No. CC 2024-093 Resolution Declaring Results of Special Election.docx

Reso. No. CC 2024-094 Approving Supp No. 1 to Acquisition Agreement.docx

Agrmt No. A-8174 Supp No. 1 to Acquisition Agreement.docx

7.2 Adopt Ordinance No. 1647, an Ordinance of the City Council of the City of Palmdale, approving Zoning Ordinance Amendment 24-0001; and find that the request is consistent with Program Environmental Impact Report 22-002 prepared and certified in conjunction with the City’s General Plan (Palmdale 2045).

SR Ord. No. 1647.docx

Ord. No. 1647.docx

8. NEW BUSINESS

8.1 Introduction and Adoption of Ordinance No. 1650, an Ordinance of the City Council of the City of Palmdale, amending Section 3.21 of the Palmdale Municipal Code relating to the implementation and collection of reduced transactions and use tax, and adopt Resolution No. CC 2024-096, a Resolution of the City Council of the City of Palmdale phasing the implementation of the transactions and use tax increase authorized by AB 2443 and enacted by Measure PD.

SR Measure PD Implementation.docx

Ord. No. 1650.docx

Reso. No. CC 2024-096 Measure PD Phase Implementation.docx

9. CITY MANAGER’S REPORT

10. SHERIFF'S REPORT

11. NON-AGENDA PUBLIC COMMENTS
:

City Council
Wednesday, December 18, 2024
Now is the time for public participation on items not listed on the agenda. Each speaker is allotted two (2) minutes total.

12. COUNCIL REPORTS, ANNOUNCEMENTS AND REQUESTS FOR FUTURE AGENDA ITEMS

13. ADJOURN
meeting to January 8, 2025, at 5:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

Americans with Disabilities Act (ADA) Accommodations
In accordance with the Americans with Disabilities Act of 1990, if you require a disability- related modification or accommodation to participate in this meeting, please contact the City Clerk’s Office at (661) 267-5151 at least 48 hours prior to the meeting.

If you require oral translation, please contact the City Clerk’s Office at (661) 267-5151 at least 48 hours prior to the meeting.

City Council
Wednesday, December 18, 2024
Housing Authority
Staff Report
DATE: DECEMBER 18, 2024
TO: HONORABLE CHAIR AND COMMISSIONERS
FROM: HOUSING DEPARTMENT
DISTRICT: ALL
SUBJECT: APPROVE FIRST AMENDMENT TO MEMORANDUM OF

UNDERSTANDING WITH THE CITY OF PALMDALE TO ACCEPT AN
INCREASE OF $600,000 OF UNITED STATES TREASURY

CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS
(SLFRF) UNDER THE AMERICAN RESCUE PLAN ACT (ARPA)

FUNDS FOR DEVELOPMENT OF AFFORDABLE HOUSING

RECOMMENDATION
Staff recommends that the City Council:

1. Approve the First Amendment to Memorandum of Understanding Agreement No.

A-8029 with the City of Palmdale to accept an increase of $600,000 of United States Treasury Coronavirus SLFRF under the ARPA funds for the development of affordable housing; and,

2. Authorize the Executive Director or her designee to execute the Amendment to Memorandum of Understandin g Agreement No. A -8029 with the City of Palmdale, including minimal and/or non-substantial changes.

BACKGROUND
The City was awarded $35,445,019 from the U.S. Treasury through the Coronavirus SLFRF under the ARPA. These funds can be used for various purposes, including investing in affordable housing to help low -income residents and address the financial challenges caused b y the COVID -19 pandemic. The final rules allow the City to use these funds to tackle the ongoing housing shortages worsened by the pandemic. Any program income from repaid loans can be reused for eligible purposes, but there are restrictions on when the funds can be used.

Report to Chair and Commissioners of the Housing Authority Re: Agrmt No. A-8029 First Amendment MOU
December 18, 2024

DISCUSSION
The Housing Authority assists developers with gap financing to develop and rehabilitate affordable units for eligible households with extremely low, very low, and low incomes.

The Housing Authority proposes to loan the ARPA funds granted by the City and program income received through repayment of the funds from a prior project to develop an eligible affordable housing project. The Housing Authority plans to use ARPA funds to enter into a proposed pre-development loan agreement with Linc 4th Street Palmdale, LP. This agreement will help assess the feasibility of the proposed project, design it, and apply for the necessary government approvals and financing.

FISCAL IMPACT
$600,000; Funds are available in account 15818503-737100-1332 ARPA Affordable Housing.

STRATEGIC PLAN
Goal III: Invest in infrastructure to improve community livability and to plan and maintain safe and attractive neighborhoods, streets, and facilities.

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

Prepared by: Sophia Reyes, Director of Housing
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, Executive Director
Approved as to form: William P. Curley, III, Authority Attorney

ATTACHMENTS
Agrmt No. A-8029 First Amendment to Memorandum of Understanding 1st AMENDMENT TO AGREEMENT A- 8029

BETWEEN THE CITY OF PALMDALE AND THE HOUSING AUTHORITY OF THE

CITY OF PALMDALE

This 1st Amendment to Agreement No. A-8029 (“Agreement”) is made and entered into by and between the City of Palmdale (hereinafter called “CITY”) and THE HOUSING AUTHORITY OF THE CITY OF PALMDALE (hereinafter called " HOUSING AUTHORITY"). This Contract shall become effective on the date of the last signatory.

WHEREAS, on August 4, 2022 ("Original Agreement") the CITY and HOUSING AUTHORITY entered into an agreement to provide:

The City may provide Coronavirus Local Fiscal Recovery Funds received pursuant to the Act to the Housing Authority to undertake certain eligible activities in connection with the City’s desire to respond to the impact of COVID-19 and assist in efforts to contain COVID-19 in the City for certain services as described in Exhibit “A” Project Description

WHEREAS, the parties desire to amend the Original Agreement to:

Increase the ARPA funding to the Housing Authority, amend Exhibit A and update terms within the MOU.

NOW THEREFORE, the parties agree as follows:

1) To increase the amount of funding by $600,000.00 to a total of $1,800,000.00. 2) To amend and replace Exhibit A to include the Transit Village Affordable Housing Project.
3) To update terms:
a) To add: WHEREAS, this Agreement shall constitute an obligation of CSLRF Funds as defined at 31 CFR 35.3.
b) Insert section after 12 and before 13: Contracts with Third Parties. For any procurement contracts awarded by Housing Authority in the performance of the Scope of Work, such contracts shall be procured in accordance with 2 CFR Part 200, Subpart D, and such contracts shall include the provisions of Appendix II to Part 200, Title 2.
c) Section 19 update Conflict of Interest reference from, CFR 570.611 to 2 CFR 200.112 and 2 CFR 200.

All other terms and conditions of the Original Agreement not amended herein, remain in full force and effect.

(REST OF PAGE INTENTIONALLY LEFT BLANK)

1-3Concord - Document ID: generated after first signature

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:

THE HOUSING AUTHORITY OF THE CITY OF
PALMDALE:

Ronda Perez
City Manager

Salvador Mendez
Assistant City Manager
ADDRESS FOR NOTICE:

CITY OF PALMDALE
38300 Sierra Highway
Palmdale, CA 93550

ADDRESS FOR NOTICE:

THE HOUSING AUTHORITY OF THE CITY OF

PALMDALE
38250 Sierra Highway
Palmdale, CA 93550
APPROVE AS TO FORM:

William P. Curley, III
City Attorney

APPROVE AS TO FORM:

_______________________________
William P. Curley, III
Authority Counsel
ATTEST:

Rochelle Scott
City Clerk
ATTEST:
________________________________
Rochelle Scott
Authority Secretary

2-3Concord - Document ID: generated after first signature ---------------------------------------- INTERNAL USE ONLY ----------------------------------------

■Certificate(s) and Endorsement(s) attached
■Confirmed business name on contract with certificate(s) ■Original contract and previous amendment(s) (if any) are attached ■Attached Agreement Checklist and met all requirements
3-3Concord - Document ID: generated after first signature Housing Authority
Staff Report
DATE: DECEMBER 18, 2024
TO: HONORABLE CHAIR AND COMMISSIONERS
FROM: HOUSING DEPARTMENT
DISTRICT: 1
SUBJECT: ADOPT RESOLUTION NO. HA 2024 -007, A RESOLUTION OF THE

HOUSING AUTHORITY OF THE CITY OF PALMDALE APPROVING

AN EXCLUSIVE NEGOTIATION AGREEMENT, A LETTER OF LOAN
COMMITMENT FOR $9,375,000 AND A PREDEVELOPMENT LOAN

AGREEMENT BETWEEN THE HOUSING AUTHORITY OF THE CITY
OF PALMDALE AND LINC 4 th STREET PALMDALE, LP FOR
$1,800,000 FOR PRE -DEVELOPMENT ACTIVITIES FOR A

PROPOSED AFFORDABLE HOUSING RENTAL DEVELOPMENT
LOCATED AT EAST AVENUE Q AND 4 th STREET EAST, ON A
PORTION OF APN 3006-008-921

RECOMMENDATION
Staff recommends that the Housing Authority of the City of Palmdale:

1. Adopt Resolution No. HA 2024 -007, a Resolution of the Housing Authority of the City of Palmdale approving an Exclusive Negotiation Agreement, a Letter of Loan Commitment for $9,375,000, and a Predevelopment Loan Agreement between the Housing Authority of the City of Palmdale and Linc 4 th Street Palmdale, LP for $1,800,000 for pre-development activities for a proposed affordable housing rental development located at East Avenue Q and 4 th Street East, on a portion o f APN 3006-008-921; and,

2. Authorize the Executive Director or her designee to execute Agreement s Nos. A- 9120 and A-9121 and the Letter of Loan Commitment with Linc 4th Street Palmdale, LP, including minimal and/or non-substantial changes.

BACKGROUND
On May 9, 2005, the former Community Redevelopment Agency of the City of Palmdale (Redevelopment Agency) approved the acquisition of 10.39 acres of vacant land on the north side of East Avenue Q between Sumac Avenue and 5 th Street East for the development of affordable housing. The proposed affordable housing would consist of multi-family rental housing to be owned and operated by a non -profit organization on a Report to Chair and Commissioners of the Housing Authority Re: Reso No. HA 2024-007, Agrmt Nos. A-9120 & A-9121
December 18, 2024

portion of the approximately 10-acre site and single-family owner-occupied townhomes on the remaining portion of the approximately 10-acre site (this remaining portion is comprised of APNs 3006-008-921 and 3006-008-922 and is referred to herein as the “Property”).

The State of California Department of Housing and Community Development (HCD) approved an allocation of $9,950,400 of Infill Infrastructure Grant (IIG) funding for the Transit Village Development. On October 24, 2011, the Redevelopment Agency and the then Developer, Community Development Associates, entered into IIG Grant Agreement 07-IIG-4212 (IIG Agreement) with HCD, requiring 202 affordable housing units consisting of 154 multi-family rental units and two (2) manager units (a total of 156 units for the multi- family portion of the affordable housing) and 46 for-sale townhomes to be built and placed into operation on the Property. HCD, the Redevelopment Agency, and the then Developer agreed to assign and have the Housing Authority of the City of Palmdale (Housing Authority) assume responsibility for the IIG award.

In June 2014, the multi-family rental units, known as Wright Brothers Court, were completed.

On July 17, 2024, HCD approved an amendment to the IIG Agreement removing the then- developer, providing for 46 units of for-sale townhomes to be rental housing, and modifying and extending the IIG’s performance schedule.

DISCUSSION
On May 16, 2024, the Housing Authority released Request for Proposal No. 23-003-6400 (RFP) for Transit Village Affordable Rental Housing Development to develop affordable rental housing on the two parcels of the Property. The Housing Authority now owns these parcels, which were acquired through the assumption of housing assets from the former Redevelopment Agency.

Three responses to the RFP were received. Linc Housing Corporation (Linc) was selected as a developer through the review and interview process. Linc’s response included the proposed development of 72 units of affordable housing and a manager unit (Proposed Project) utilizing approximately 2.2 acres of the Property (Site), a portion of APN 3006- 008-921.

The Housing Authority proposes to commit $1,800,000 in funding from the Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds under the American Rescue Plan Act (ARPA) for pre-development activities related to the Proposed Project.

If a Disposition and Development Agreement is entered into, the Housing Authority proposes to commit Low and Moderate Income Housing Asset Funds for the development of the Proposed Project. The ARPA Funds would be loaned to Linc 4 th Street Palmdale, pursuant to the proposed Predevelopment Loan Agreement. The Predevelopment Loan Report to Chair and Commissioners of the Housing Authority Re: Reso No. HA 2024-007, Agrmt Nos. A-9120 & A-9121
December 18, 2024

Agreement provides for Linc to assess the Proposed Project’s feasibility, design the Proposed Project, and apply for governmental approvals and construction financing.

In addition, the Housing Authority proposes to enter into an Exclusive Negotiation Agreement and Letter of Loan Commitment for $9,375,000 to negotiate the terms and conditions of a Disposition and Development Agreement to be submitted for consideration by the Housing Authority Board.

The Predevelopment Loan Agreement, Exclusive Negotiation Agreement, and Letter of Loan Commitment are the early-stage agreements often entered into before a lead agency decides on the specifics of a project. Until Linc has submitted a formal application for entitlements and received City of Palmdale (City) approval for such entitlements and associated environmental review as required by the California Environmental Quality Act (CEQA), which approvals may be granted or denied in the City’s sole discretion, neither the City nor the Housing Authority will have committed to approving the Proposed Project or disposing of the Site. The specific parameters of the Proposed Project are unknown at this stage. Therefore, it is premature to conduct a meaningful analysis and environmental review of the Proposed Project under CEQA. Once Linc submits the Proposed Project to the City with a formal application, the CEQA environmental review will be performed. A Disposition and Development Agreement would not be submitted to the Housing Authority Board until such CEQA environmental review has been performed.

FISCAL IMPACT
$11,175,000; Funds are available in the amount of $1,800,000 under the American Rescue Plan Act and $9,375,000 in Housing Asset Funds.

STRATEGIC PLAN
Goal III: Invest in infrastructure to improve community livability C. 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: Sophia Reyes, Director of Housing
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, Executive Director
Approved as to form: William P. Curley, III, Authority Attorney Report to Chair and Commissioners of the Housing Authority Re: Reso No. HA 2024-007, Agrmt Nos. A-9120 & A-9121
December 18, 2024

ATTACHMENTS
Reso. No. HA 2024-007
Agrmt No. A-9120 with Linc 4th Street Palmdale, LP
Agrmt No. A-9121 with Linc 4th Street Palmdale, LP
Ltr of Loan Commitment with Linc 4th Street Palmdale, LP Site Map

HOUSING AUTHORITY

CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. HA 2024 -007

A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF

PALMDALE APPROVING AN EXCLUSIVE NEGOTIATION AGREEMENT,

A LETTER OF LOAN COMMITMENT AND A PREDEVELOPMENT LOAN
AGREEMENT (LINC 4 TH STREET PALMDALE) BETWEEN THE
HOUSING AUTHORITY OF THE CITY OF PALMDALE AND LINC 4 TH

STREET PALMDALE, LP FOR PRE-DEVELOPMENT ACTIVITIES FOR A

PROPOSED AFFORDABLE HOUSING RENTAL DEVELOPMENT
LOCATED AT EAST AVENUE Q AND 4TH STREET EAST, ON A PORTION OF APN 3006-008-921
WHEREAS, The City Council of the City of Palmdale (“City Council”) adopted the Redevelopment Plans for the Merged Redevelopment Projects (“Project Area”) on March 24, 1994, by Ordinances Nos. 1042, 1043, and 1044, which resulted in the allocation of property taxes from the Project Area to the former Community Redevelopment Agency of the City of Palmdale (“Redevelopment Agency”) for purposes of redevelopment. On May 4, 2011, the City Council adopted the Expansion Area Amendment by Ordinance No. 1418, adding additional territory to the Merged Project Area and amending and restating the redevelopment plans into a single Amended and Restated Redevelopment Plan for the Merged Project Area. Project Area No. 2, Project Area No. 3, Project Area No. 4, and the Expansion Area collectively are referred to as the “Merged Project Area”. On May 4, 2011, the City Council adopted the Expansion Area Amendment by Ordinance No. 1418, adding additional territory to the Merged Project Area and amending and restating the redevelopment plans into a single Amended and Restated Redevelopment Plan for the Merged Project Area (“Redevelopment Plan”). Project Area No. 2, Project Area No. 3, Project Area No. 4, and the Expansion Area collectively are referred to as the “Merged Project Area”; and WHEREAS, The Housing Authority of the City of Palmdale (“Authority”) is implementing certain proposed uses in the Merged Project Area, including low-income housing, which use will aid in carrying out the Redevelopment Plan, pursuant to its obligations under Assembly Bill No. 26 (2011-2012 1 st Ex. Sess.), as amended by Assembly Bill No. 1484 (2011-2012 Regular Session), and as further amended from time to time (collectively, the “Dissolution Bills”) wherein the Authority, as the designated entity, will perform the housing functions previously performed by the former Redevelopment Agency, including to carry out the purposes of the Dissolution Bills; and WHEREAS, In accordance with its obligations under the Dissolution Bills, the Authority wishes to enter into a proposed Exclusive Negotiation Agreement and Letter of Loan Commitment with Linc 4 th Street Palmdale, LP. The two entities propose to negotiate the terms for developing the proposed affordable rental housing to be located Resolution No. HA 2024-007

at the northeast corner of East Avenue Q and 4th Street East (“Site”) and the terms and conditions for the Authority funding to be committed for the development; and WHEREAS, The Authority has entered into a Memorandum of Understanding (“MOU”) with the City of Palmdale (“City”) for US Department of Treasury (“Treasury”) Coronavirus Local Fiscal Recovery Funds (“CSLRF Funds”) (A-8029) under Sections 602(b) and 603(b) of the Social Security Act as added by Section 9901 of the American Rescue Plan Act (“ARPA”) Final Rule January 27, 2022, 31 CDE par 35. As outlined by the Treasury, among the eligible uses of ARPA funds is “[d]evelopment, repair, and operation of affordable housing and services or programs to increase long-term housing security” to respond to impacts of the pandemic on households and communities. Under the “public health and negative economic impacts” eligible use category under ARPA, recipients may use ARPA funds to make loans to finance affordable housing projects.

The Authority wishes to enter into a proposed Predevelopment Loan Agreement with Linc 4th Street Palmdale, LP (“Linc”) with ARPA funds received under the MOU, for pre- development activities for the proposed affordable housing rental housing development which is the subject of the Exclusive Negotiation Agreement and Letter of Loan Commitment; and
WHEREAS, The Predevelopment Loan Agreement, Exclusive Negotiation Agreement, and Letter of Loan Commitment are the types of early-stage agreements often entered into before a lead agency decides on the specifics of a project. Until such time as Linc has submitted a formal application for entitlements and received City approval for such entitlements and associated environmental review as required by the California Environmental Quality Act (“CEQA”), which approvals may be granted or denied in the City’s sole discretion, neither the City nor the Authority will have committed to approving the Proposed Project or disposing of the Site. The specific parameters of the Proposed Project are unknown at this stage, and therefore, it is premature to conduct a meaningful analysis and environmental review of the Proposed Project under CEQA.

Once Linc submits the Proposed Project to City with a formal application, the CEQA environmental review will be performed.

NOW THEREFORE, BE IT RESOLVED, THE HOUSING AUTHORITY OF THE CITY

OF PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

SECTION 1. The Authority hereby finds and determines that all of the foregoing Recitals are true and correct.

SECTION 2. The Authority hereby approves of and authorizes the Authority to enter into the proposed Exclusive Negotiation Agreement, Letter of Loan Commitment, and Predevelopment Loan Agreement with Linc 4th Street Palmdale, LP with such minor Resolution No. HA 2024-007

or non-substantive changes as may be approved by the Authority Executive Director with approval as to form by Authority Legal Counsel.

SECTION 3. The Authority hereby authorizes its Executive Director, or designee, to execute the Exclusive Negotiation Agreement, Letter of Loan Commitment, and Predevelopment Loan Agreement and to execute all documents and take all actions necessary and convenient to carry out and implement the documents and to administer the Authority’s obligations, responsibilities, and duties to be performed thereunder.

Resolution No. HA 2024-007

SECTION 4. The Authority Secretary shall certify to the adoption of this resolution.

PASSED, APPROVED and ADOPTED this 18th day of December, 2024. _________________________________
Approved as to form: Austin Bishop, Chair
ATTEST:
___________________________ _________________________________ William P. Curley, III Rochelle Scott,
Authority Attorney Authority Secretary
I, Rochelle Scott, Authority Secretary of the Housing Authority of the City of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the Housing Authority of the City of Palmdale at a special meeting of said Authority held on the 18th day of December, 2024 by the following roll call vote:

AYES: __
NOES:_____________________________________________________________ ABSTAIN:______________________ABSENT:_____________________________ Date: ______________________ __________________________________ Rochelle Scott, Authority Secretary

V4 12.3.24

PREDEVELOPMENT LOAN AGREEMENT
(LINC 4TH STREET PALMDALE)
(A-9120)

This PREDEVELOPMENT LOAN AGREEMENT (this “Agreement”) is dated for reference purposes as of December 18, 2024, and is entered into by and between the HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body, corporate and politic (“Authority”), and LINC 4TH STREET PALMDALE, LP , a California limited partnership (“Linc”), with reference to the following facts:

RECITALS

A. The Authority owns certain real property comprised of approximately 4.66 acres which is generally located on the northeast corner of Avenue Q and 4 th Street East in Palmdale, California (“Site”). The Site is generally illustrated on the Site Map attached to this Agreement as Exhibit A.

B. The Authority desires to enter into a Disposition and Development Agreement (“DDA”), by which the Site will be developed with rental housing units for occupancy by households at 60% AMI or less (“Proposed Project”).

C. In May, 2024, the Authority issued that certain Request for Proposals RFP NO. 23-003-6400 TRANSIT VILLAGE AFFORDABLE RENTAL HOUSING DEVELOPMENT (“RFP”), to which Linc responded with a proposal dated July 3, 2024 (“Proposal”). The Proposed Project is generally described in the RFP and the Proposal. Authority and Linc are entering into an Exclusive Negotiating Agreement dated on or about the date hereof (“ ENA”), which defines the framework under which the Authority and Linc would negotiate the terms for the potential transfer of the Site via a long term ground lease to Linc to enable development of the Proposed Project , subject to the terms and conditions of the proposed DDA.

D. Until such time as Linc has submitted a formal application for entitlements and received City of Palmdale (“City”) approval for such entitlements and associated environmental review as required by the California Environmental Quality Act (“CEQA”), which approvals may be granted or denied in the City’s sole discretion, neither the City nor the Authority will have committed to approving the Proposed Project or disposing of the Site.

E. Linc will incur a number of predevelopment costs and expenses (“Predevelopment Costs”) in connection with assessing the Proposed Project’s feasibility, designing the Proposed Project, and applying for governmental approvals and financing necessary to construct the Proposed Project , including, without limitation, costs to obtain approval for entitlements and associated environmental review as required by CEQA.

F. The City entered into a contract with the United States of America through its Department of the Treasury (“ Treasury”) to execute the Coronavirus Local Fiscal Recovery Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 2

Funds (the “ARPA Funds”) under Sections 602(b) and 603(b) of the Social Security Act as added by Section 9901 of the American Rescue Plan Act Final Rule January 27, 2022), 31 CFR Part 35), as amended or modified to from time to time (the “Act”).

G. Pursuant to that certain Memorandum of Understanding by and between the City and the Authority dated as of August 4, 2022 (A-8029) (“MOU”), the City provided ARPA Funds received pursuant to the Act to the Authority to undertake certain eligible activities in connection with the City ’s desire to respond to the impact of COVID -19 and assist in efforts to contain COVID-19 in the City.

H. As outlined by the Treasury, a mong the eligible uses of ARPA Funds is “[d]evelopment, repair, and operation of affordable housing and services or programs to increase long-term housing security” to respond to impacts of the pandemic on households and communities. Under the “public health and negative economic impacts” eligible use category under the Act, recipients may use the ARPA Funds to make loans to finance affordable housing projects.

I. Linc has requested funding from the Authority to pay for a portion of the Predevelopment Costs as set forth in the Predevelopment Budget attached as Exhibit B, and upon satisfaction of the conditions precedent set forth in this Agreement and evidenced by a Note and an Assignment (as each are defined below), the Authority has agreed to provide a loan to Linc with a total principal amount not to exceed One Million Eight Hundred Thousand Dollars ($1,800,000) from ARPA Funds (the “Predevelopment Loan”).

J. This Agreement, together with the Predevelopment Loan Promissory Note substantially in the form of the note attached as Exhibit C (“Note”), and the Assignment of Work Product substantially in the form of the assignment attached as Exhibit D (“Assignment”), sets forth the requirements of the Predevelopment Loan.

K. Authority and Linc acknowledge that this Agreement addresses partial funding for predevelopment due diligence, architectural and design services, and other predevelopment activities, and is one of the types of early-stage agreements often entered into before a lead agency decides on the specifics of a project. Authority and Linc further acknowledge that: (1) viewed in light of all the surrounding circumstances, the preliminary nature of this Agreement does not commit City or the Authority as a practical matter to approve the proposed Proposed Project or disposition of the Site; and (2) the specific parameters of the Proposed Project are unknown at this stage, and therefore, it is premature to conduct a meaningful analysis and environmental review of the Proposed Project under CEQA. Authority and Linc agree that once Linc submits the proposed Proposed Project to City with a formal application, the CEQA environmental review will be performed.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 3

NOW, THEREFORE, in consideration of the mutual covenants contained herein and good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Authority and Linc agree as follows.

ARTICLE 1 LOAN PROVISIONS

1.1 Incorporation of Recitals. Authority and Linc acknowledge the truth of the foregoing recitals which are hereby incorporated into this Agreement by this reference.

1.2 P redevelopment Loan. Authority agrees to loan Linc, and Linc agrees to borrow from and repay to Authority, funds in the maximum principal amount of One Million Eight Hundred Thousand Dollars ($1,800,000), according to the terms and conditions set forth in this Agreement:

1.2.1 L oan Proceeds . The proceeds of the Predevelopment Loan (the “Loan Proceeds”) shall not be disbursed unless and until Linc has supplied Authority with such documentation as Authority deems necessary to substantiate the payment of some or all of the Predevelopment Loan for eligible uses, as set forth in Section 1.2.2, below.

1.2.2 Funding Disbursement. After Linc’s satisfaction of the conditions set forth in Section 3.4 below, the Predevelopment Loan shall be funded in accordance with the following requirements:
(a) Following satisfaction of the conditions set forth herein, Authority shall disburse funds to Linc up to the loan amount, for the sole purpose of paying for those Predevelopment Costs set forth in Exhibit B.
(b) The funds will be disbursed to Linc only upon a request for disbursement by Linc and upon Authority’s approval of invoices submitted by Linc delineating work satisfactorily performed. Linc shall submit to the Authority a written request for disbursement of a specific dollar amount. The Authority shall review such request and the supporting documentation and, within fifteen (15) business days from receipt thereof, shall either (i) approve such request and make the requested disbursement, or (ii) disapprove all or a portion of such request, and notify Linc in writing of the reason for such disapproval, in which case Linc shall modify its request to correct the stated deficiency and repeat the process outlined above.

(c) Linc’s request(s) for disbursement (s) under this Agreement and actual disbursement by the Authority shall be completed no later than June 30, 2026. (d) Nothing herein shall be deemed to require disbursement of the full amount of the Predevelopment Loan if the requirements above are not satisfied.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 4

1.3 Term and Termination; Loan Forgiveness.

1.3.1 Term. Unless earlier terminated as expressly provided herein, the term of this Agreement (“ Term”) shall begin on the Effective Date, and shall expire on the later of (i) December 31, 2044; or (ii) the date that is 55 years from Proposed Project permanent financing conversion if the Authority and Linc execute a DDA that incorporates the obligation to repay the Predevelopment Loan in accordance with Section 1.5 herein.

1.3.2 Ter mination . Authority shall have the right to terminate this Agreement upon Linc’s default under this Agreement and failure to cure within the applicable cure period specified in Section 5.1. If Authority terminates this Agreement pursuant to this Section, Authority shall be entitled to exercise its rights under the Note and the Assignment Agreement, principal and accrued interest, if any, shall be due and payable as set forth in the Note, and Linc shall promptly convey to Authority all agreements, plans, specifications, reports and studies financed by the Loan Proceeds pursuant to this Agreement.

1.3.3 No n -Recourse. The obligation to repay the Predevelopment Loan is a nonrecourse obligation of Linc and its partners. Neither Linc nor any of its general or limited partners, nor any other party, shall have any personal liability for repayment of the Predevelopment Loan. The sole recourse of the Authority with respect to repayment of the Predevelopment Loan shall be the exercise of its rights in the Assignment Agreement and any other security for the Predevelopment Loan. Notwithstanding the foregoing, the Authority may:
(a) obtain a judgment or order (including, without limitation, an injunction) requiring Linc or any other party to perform (or refrain from) specified acts other than repayment of the Predevelopment Loan; and
(b) recover directly from Linc or any other party:
(i) all damages, costs and expenses incurred by the Authority as a result of fraud or any criminal act or acts of Linc or any partner, shareholder, officer, director or employee of Linc or of any general partner of Linc or of any member of a general partner of Linc; (ii) all damages, costs and expenses incurred by the Authority as a result of misappropriation of funds provided for payment of Predevelopment Costs, as described in this Agreement or proceeds of insurance policies or condemnation proceeds; (iii) all amounts owing by Linc pursuant to any indemnification provided to the Authority in connection with this Agreement; and (iv) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that the Authority shall pay Linc’s reasonable court costs and attorneys’ fees if Linc is the prevailing party in such enforcement or collection action).

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 5

1.4 No Fault Termination. If the Authority and Linc do not enter into the DDA for the Proposed Project for any reason on or prior to June 30, 2026, then either Linc or the Authority may terminate this Agreement by written notice to the other party in which case any disbursed principal and accrued interest, if any, shall be due and payable as set forth in the Note. In addition, if this Agreement is otherwise terminated not due to an uncured Linc default, then this Agreement may be terminated by Authority to the extent of any undisbursed Loan Proceeds and any disbursed principal and accrued interest, if any, shall be due and payable as set forth in the Note.

1.5 Int erest. The Predevelopment Loan shall bear simple interest at the rate of three percent (3%) simple interest per annum from the date of each disbursement of Loan Proceeds .

Principal and accrued interest shall be due and payable as set forth in the Note or rolled over and assumed in accordance with Section 1.5. Principal and interest may be not be prepaid in whole or in part.

1.6 DDA . If the City and Authority approve a DDA and the Proposed Project, then the DDA will address disbursement and use of any undisbursed Predevelopment Loan and any other Authority funds reserved for the construction phase of the Proposed Project. Such loan provisions shall be included in the DDA in form approved by Authority and Linc pursuant to which Loan Proceeds disbursed under this Agreement will be included as components of the total amount of the loan from the Authority for the Proposed Project. In such event, this Agreement will be restated and replaced by the DDA, the Note shall be restated and the terms for repayment of the Loan Proceeds disbursed pursuant to this Agreement will be as stated in the DDA and a new promissory note(s) executed by Linc in connection with the DDA , and the Assignment Agreement will be replaced with a new assignment agreement entered into in connection with the DDA. In addition to any other terms agreed to by Linc and the Authority, t he terms of the DDA shall include the following: ( a) the Term shall be extended as provided in Section 1.3.1 herein; (b) the Predevelopment Loan shall be repaid from the Authority’s pro rata share (such “pro rata share” being the pro rata share of the Predevelopment Loan to all public financing provided to the Project as reasonably agreed by the Authority and Linc) of 50% of net cash flow from the Proposed Project; (c) the admission of an investor limited partner and restatement of Linc’s partnership agreement; and (d) the DDA or other documents evidencing the Predevelopment Loan shall incorporate customary and commercially reasonable investor limited partner protections for projects assisted by housing tax credits under Internal Revenue Code Section 42.

ARTICLE 2 LOAN SECURITY

2.1 Promissory Note. The Predevelopment Loan shall be evidenced by a promissory note (the “Note”) executed by Linc, in favor of the Authority in the form attached as Exhibit C, which Note shall be executed and delivered by Linc to the Authority concurrently herewith. The Note shall evidence the repayment obligations by Linc of the Predevelopment Loan.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 6

2.2 Assignment Agreement. The Note shall be secured by the assignment to Authority of Linc’s interests in and rights to any and all architectural agreements, contracts, plans, specifications, reports, and studies relating to the Site or the Proposed Project that will be financed with Loan Proceeds pursuant to an assignment agreement substantially in the form attached to this Agreement as Exhibit D that Linc shall execute and deliver to Authority concurrently with the execution of this Agreement. In accordance with Section 1.5 herein, it is contemplated that the Predevelopment Loan will be converted to long term permanent financing if the Proposed Project and DDA are approved, and that in accordance therewith, upon acquisition of the Site by long term ground lease, the Predevelopment Loan will be secured by a leasehold deed of trust against the Site and a new assignment agreement.

ARTICLE 3 USE AND DISBURSEMENT OF LOAN PROCEEDS

3.1 Use Requirements . The Loan Proceeds shall be used solely and exclusively for Predevelopment Costs for the Proposed Project as set forth in Exhibit B and such other costs related to the Proposed Project as the Authority may approve in writing in its sole discretion. As more particularly described in Exhibit B, Linc’s predevelopment activities shall include, without limitation, the preparation of reports, architectural plans, and financial analyses necessary to apply for construction and permanent financing for the Proposed Project.

3.2 Cha nge in Predevelopment Costs. Linc shall notify the Authority in a timely manner of any changes to the Predevelopment Costs to be performed under this Agreement. A written authorization by the Executive Director or designee must be obtained to make any changes to the Predevelopment Costs to be reimbursed under this Agreement.

3.3 S
chedule. Linc agrees to work diligently and provide services, material, and information as needed to keep the Proposed Project on schedule in accordance with the Proposed Project Schedule attached as Exhibit E , as such may be periodically updated by Authority in consultation with Linc. Linc agrees to abide by the Proposed Project Schedule as such may be revised, subject to force majeure delays. Notwithstanding the foregoing, and for the avoidance of doubt, if Linc is unable to comply with the Proposed Project Schedule despite its good faith best efforts, such failure shall not be a default hereunder.

3.4 Condi
tions Precedent to Disbursement of Funds. Authority’s obligation to disburse the Loan Proceeds is conditioned upon satisfaction of all of the following conditions:

3.4.1 Linc’s execution and delivery to the Authority of this Agreement, the Note, and the Assignment Agreement;

3.4.2 Linc’s delivery to the Authority of consents to the assignment of agreements, plans, specifications, studies, reports and other work product prepared for the Proposed Project, executed by the Proposed Project architect and the other parties preparing such plans, specifications, studies, reports and other work product in the form attached as an exhibit to the Assignment Agreement;
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 7

3.4.3 Linc’s delivery to the Authority of evidence of insurance coverage in the form and in such amounts as set forth in Article 4; and

3.4.4 Linc’s delivery to the Authority of certified copies of Linc’s certificate of limited partnership and partnership agreement.

3.5 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the Authority shall have no obligation to disburse any portion of the Loan Proceeds to Linc following:

3.5.1 the failure of any of Linc’s representations and warranties set forth in this Agreement to be true and correct in all material respects;

3.5.2 termination of this Agreement; or

3.5.3 the uncured occurrence of a default under this Agreement, the Note, or the Assignment Agreement.

3.6 Linc’s Representations and Warranties. Linc represents and warrants to the Authority that:

3.6.1 All approvals have been obtained in connection with Linc’s execution of this Agreement, and the Note, and, all related agreements and documents, to the effect that no breach of or acceleration of performance under any agreement or document to which Linc is a party will result from such execution;

3.6.2 Funds advanced by the Authority pursuant to this Predevelopment Loan Agreement are advanced wholly for the benefit of Linc;

3.6.3 Linc is a duly organized limited partnership, validly existing and in good standing under the laws of the State of California. Linc has all requisite power and authority to deliver and perform its obligations under this Agreement, the Note, and the Assignment Agreement;

3.6.4 The execution, delivery and performance of this Agreement, the Note, and the Assignment Agreement have been duly authorized by Linc, and this Agreement, the Note, and the Assignment Agreement, when duly executed and delivered, will constitute the valid and binding obligations of Linc enforceable in accordance with their respective terms. Linc’s execution of this Agreement, the Note, and the Assignment Agreement and performance thereunder will not result in a breach of or constitute a default under any agreement, indenture or other instrument to which Linc is a party or by which Linc may be bound. The persons executing the Note, this Agreement, and the Assignment Agreement on behalf of Linc have been duly authorized to do so;

3.6.5 There are no pending or, to Linc’s actual knowledge, threatened actions or Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 8

proceedings before any court or administrative agency which may adversely affect the financial condition or operation of Linc or any of its partners, members or managers or Linc’s ability to carry out the obligations of Linc under this Agreement. Linc is not the subject of any action under federal or state Bankruptcy Law;

3.6.6 Linc agrees to use said funds solely to pay for the Predevelopment Costs and other costs approved by the Authority in accordance herewith; and

3.6.7 Linc is responsible for all obligations created by this Agreement and the Predevelopment Loan, including, without limitation, the repayment of all principal and interest, if any, which may become due and payable under this Agreement, the Note, and any other instruments provided for herein. No creditor or other person shall have any right or action against Authority on account of any debts, obligations, or liabilities of Linc.

3.7 No Partnership or Joint Venture. The relationship between the Authority and Linc created by this Predevelopment Loan Agreement shall not be one of partnership or joint venture, but rather shall be one of lender and borrower.

3.8 Usury. If a court of competent jurisdiction determines, by way of final, unappealable order or judgment, that the interest rate charged under the Note is usurious, then such rate shall automatically and retroactively be reduced to the maximum rate allowed under applicable law.

3.9 Confl ict of Interest Prohibited. Neither Linc nor an employee, officer, director, partner or member of Linc, or immediate family member of any preceding, shall have served as an elected officer, an employee, or a City or an Authority board, council, committee or commission member, who has directly or indirectly influenced the making of this Agreement.

3.10 Audit. The Authority may conduct an audit of Linc’s financial, performance and compliance records maintained in connection with Linc’s obligations under this Agreement and the Note. In the event of such audit, Linc’s employees shall make all such financial, performance and compliance records available to the Authority. Authority agrees to provide Linc an opportunity to discuss and respond to any findings before a final audit report is filed.

3.11 Non-Discrimination. Linc hereby agrees to take steps to ensure that Linc, as well as any person who contracts with Linc, shall not, on the basis of race, color, religion, ancestry, national origin, age, sex, pregnancy, marital status, disability, or sexual orientation be excluded from participation in the development, leasing and/or sale of the Site or the Proposed Project in violation of applicable law.

ARTICLE 4 INSURANCE PROVISIONS

4.1 Insurance Policies. During the Term, Linc shall maintain in effect and deliver to the Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 9

Authority duplicate originals or appropriate certificates and endorsements of the following insurance policies (the “Insurance Policies”) naming the Authority and the hereinafter defined Indemnified Parties as additional insureds:

4.1.1 Commercial General Liability Insurance: Linc shall maintain general liability insurance, to protect against loss from liability imposed by law for damages on account of personal injury, including death therefrom, suffered or alleged to be suffered by any person or persons whomsoever on or about the Site and the business of Linc on the Site, or in connection with the operation thereof, resulting directly or indirectly from any acts or activities of Linc, or any person acting for Linc, or under its respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Site, or in connection with the operation thereof, caused directly or indirectly by or from acts or activities of Linc or its tenants, or any person acting for Linc, or under its control or direction.

Such property damage and personal injury insurance shall also provide for and protect Authority and the Indemnified Parties against incurring any legal cost in defending claims for alleged loss.

Such personal injury and property damage insurance shall be maintained in full force and effect during the Term: commercial general liability in a general aggregate amount of not less than Ten Million Dollars ($10,000,000), $10,000,000 Products and Completed Operations Aggregate, and $5,000,000 Each Occurrence. Linc agrees that provisions of this paragraph as to maintenance of insurance shall not be construed as limiting in any way the extent to which Linc may be held responsible for the indemnification of the Authority or the Indemnified Parties or the payment of damages to persons or property resulting from Linc’s activities, activities of its tenants or the activities of any other person or persons for which Linc is otherwise responsible.

4.1.2 C
ommercial Automobile Liability Insurance: Linc shall maintain automobile insurance, maintained in full force and effect in an amount of not less than Five Million Dollars ($5,000,000) combined single limit including owned (if any), non-owned and hired automobile coverage.

4.1.3 W
orkers’ Compensation Insurance, including Employer’s Liability Insurance: Linc shall maintain workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers’ compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers’ compensation insurance shall cover all persons employed by Linc in connection with the Site and shall cover liability within statutory limits for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any person incurring or suffering injury or death in connection with the Site or the operation thereof by Linc. Notwithstanding the foregoing, Linc may, in compliance with the laws of the State of California and in lieu of maintaining such insurance, self -insure for workers’ compensation in which event Linc shall deliver to Authority evidence that such self-insurance has been approved by the appropriate State authorities.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 10

4.1.4 All policies or certificates of insurance shall provide that such policies shall not be canceled, reduced in coverage or limited in any manner without at least thirty (30) days prior written notice to Authority. All fire and liability insurance policies shall name the Authority, the Indemnified Parties, and Linc as insureds, additional insureds, and/or loss payable parties as their interests may appear.

4.1.5 Policies providing for bodily injury and property damage coverage shall contain the following:

An endorsement extending coverage to the Housing Authority of the City of Palmdale as an additional insured, in the same manner as the named insured, as respects liability arising out of the performance of any work under the Agreement. Such insurance shall be primary insurance, as respects the interest of the Housing Authority of the City of Palmdale, and any other insurance maintained by the Housing Authority of the City of Palmdale shall be considered excess coverage and not contributing insurance with the insurance required hereunder. The certificate and endorsements shall state: “The Housing Authority of the City of Palmdale, City of Palmdale, Successor Agency of the Community Redevelopment Agency of the City of Palmdale, Palmdale Civic Authority, Industrial Development Authority of the City of Palmdale, Palmdale Airport Authority, their offices, agents, employees, attorneys and volunteers are named as additional insureds.”

4.1.6 Acceptable Proof of Insurance
ACCORD Certificate of Insurance listing all coverages, limits, deductibles, and insureds; and endorsements for all applicable coverages if agent has authority to issue it; Additional Insured Form CG20101185 or CG20100707 and CG2037074 or equivalent must be provided for general liability coverage. Additional Insured Form CA0001 must be provided for automobile liability coverage.

4.1.7 The requirements as to the types and limits of insurance to be maintained by Linc are not intended to and shall not in any manner limit or qualify Linc’s liabilities and obligations under this Agreement.

4.1.8 Any policy or policies of insurance that Linc elects to carry as insurance against loss or damage to its equipment and tools or other personal property used in the performance of this Agreement shall include a provision waiving the insurer’s right of subrogation against the Housing Authority of the City of Palmdale.

4.1.9 Linc shall require all contractors, subcontractors and any other contracted party (“contracted parties”) working on its behalf to provide insurance coverages and limits that are based on the scope of work and nature of risk being performed by the contracted parties. Any and all contracted parties working on behalf of Linc shall be subject to all other insurance requirements that are stated herein.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 11

4.1.10 Linc agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. Linc agrees to submit endorsements and binders or certificates evidencing such insurance to Authority prior to, and as a condition of, the first disbursement of Loan Proceeds. Within thirty (30) days, if practicable, but in any event prior to expiration of any such policy, copies of renewal policies, or c ertificates evidencing the existence thereof, shall be submitted to Authority. All insurance herein provided for under this Section shall be provided by insurers licensed to do business in the State of California and rated A-VII or better.

4.1.11 If Linc fails or refuses to procure or maintain insurance as required by this Agreement, Authority shall have the right, but not the obligation, at Authority’s election, and upon ten (10) days prior notice to Linc, to procure and maintain such insurance. The premiums paid by Authority shall be treated as a loan, due from Linc , to be paid on the first day of the month following the date on which the premiums were paid. Authority shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s).

4.1.12 Linc shall have the right in its discretion to provide the insurance coverage required by this Section through one or more umbrella policies, so long as the type and level of insurance protection to be maintained by Linc in accordance with this Section is not diminished by so doing (as reasonably determined by the Authority’s Executive Director).

ARTICLE 5 DEFAULT AND REMEDIES

5.1 Linc Default. The occurrence of one or more of the following events shall constitute a default under this Agreement, and Authority shall thereupon be entitled, at its option, to declare all indebtedness referred to in this Agreement immediately due and payable and Authority shall be entitled to all legal recourse against Linc and to pursue and enforce, either successively or concurrently, all rights and remedies set forth in this Agreement or any collateral instrument held by Authority or accruing to Authority by law, and such other rights and remedies as a lender may have, default being:

5.1.1 Failure of Linc to perform any of the covenants or agreements on its part contained in this Agreement or in any collateral instrument made by Linc in favor of Authority with respect to the loan evidenced by this Agreement; or the intentional or unintentional misrepresentation of any statement or warranty made by this Agreement; or

5.1.2 The filing of a complaint for receivership against Linc, or the filing of a voluntary or involuntary petition for bankruptcy or for re -organization by Linc (unless such complaint or petition be released, discharged or stayed within ninety (90) days of such filing); or if Linc shall become insolvent or make a general assignment for the benefit of creditors or consent to the appointment of a receiver of all or any of its assets, or voluntarily suspends its usual business.

Authority shall advise Linc in writing of any default under this Section and may Predevelopment Loan Agreement Agreement No. A-9120
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d
eliver notices of default to Linc personally, by certified mail or by registered mail. Linc shall have sixty (60) days from the date of the receipt of the notice to cure such default, except in a case where a default is not susceptible to cure within sixty (60) days, and Linc initiates cure within the sixty (60) day period and diligently pursues the cure proceedings. In this event, Linc shall have such additional time as the Authority determines is reasonably necessary to complete cure of the default but in no event longer than one hundred twenty (120) days.

5.2 D efault by Authority.

5.2.1 The failure of Authority to perform any of its obligations under this Agreement shall entitle Linc to all legal recourse against the Authority and to pursue and enforce either successively or concurrently, all rights and remedies to which it may have.

5.2.2 Linc shall advise the Authority in writing of any default under this Section and Linc may deliver notices of default to the Authority personally or by certified or registered mail. The Authority shall have sixty (60) days from the date of receipt of the notice to cure the default, except in a case where a default is not susceptible to cure within sixty (60) days, and the Authority initiates cure within the sixty (60) day period and diligently pursues the cure proceedings. In this event, the Authority shall have such additional time as Linc determines is reasonably necessary to complete cure of the default but in no event longer than one hundred twenty (120) days.

ARTICLE 6 MISCELLANEOUS PROVISIONS

6.1 Conform ity with Law and Safety.

6.1.1 Linc shall comply with applicable laws, ordinances, codes and regulations of governmental agencies, including federal, state, municipal and local governing bodies, having jurisdiction over this Agreement or any part hereof, and all applicable federal, state, municipal and local safety regulations.

6.1.2 Linc agrees to indemnify and save Authority harmless from any and all liability, fines, penalties and consequences arising out of any non-compliance with, or violations of, such laws, ordinances, codes, and regulations by Linc.

6.2 A ssignment. Linc shall not assign its rights nor delegate its duties under this Agreement without the prior written consent of the Authority, which the Authority may withhold in its sole and absolute discretion. Any attempt at assignment or delegation in violation of this Section shall be void. The Authority shall have the full right and authority to assign all or part of its rights and delegate all or part of its duties under this Agreement.

6.3 Prevailing Wage Requirements. If required by applicable federal or state law, Linc and its contractors, subcontractors and agents shall comply with California Labor Code Section Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 13

1720 et seq. and the regulations adopted pursuant thereto (and if required by applicable federal law, the Davis Bacon Act and implementing regulations) (all of the foregoing, “Prevailing Wage Laws”), and shall be responsible for carrying out the requirements of such provisions. If applicable, Linc shall submit to Authority a plan for monitoring payment of prevailing wages and at Linc’s expense shall implement such plan and comply with all applicable reporting and recordkeeping requirements.

6.4 Indemnity. To the maximum extent permitted by law, Linc agrees to and shall defend, indemnify and hold harmless the Authority and its officers, employees, contractors, attorneys, agents, insurers and volunteers (the “Indemnified Parties”) from and against all claims, liabilities, losses, damages, costs or expenses (including reasonable attorneys’ fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or the property of any person resulting or arising from or in any way connected with any of the following, provided Linc shall not be responsible for (and such indemnity shall not apply to) any gross negligence or willful misconduct of the Authority or the Indemnified Parties:
(1) The payment or requirement of payment of prevailing wages (including without limitation, all claims that may be made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781) or the requirement of competiti ve bidding in connection with the Proposed Project, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Linc related to this Agreement with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such claims;
(2) The marketing of the Site or the Proposed Project;
(3) All plans or designs for improvements prepared by or on behalf of Linc or its contractors, subcontractors, agents, employees or other persons acting on Linc ’s behalf, including without limitation all errors or omissions with respect to such plans or designs; or (4) All loss or damage to Authority resulting from any inaccuracy in or breach of any representation or warranty of Linc, or resulting from any breach or default by Linc, under this Agreement.

The provisions of this Section shall survive the expiration or earlier termination of this Agreement.

6.5 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to Authority and Linc at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other party in accordance with this Section. All such notices shall be sent Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 14

by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; or (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service.

AUTHORITY: Housing Authority of the City of Palmdale
38250 N. Sierra Hwy
Palmdale, CA 93550
Attn: Executive Director

LINC: Linc 4th Street Palmdale, LP
c/o Linc Housing Corporation
3590 Elm Avenue
Long Beach, CA 90807
Attention: President

With copies to:

Gubb & Barshay LLP

235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Attention: Henry Loh II

6.6 Waivers; Modification. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving party. An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act, and no extension shall be valid unless in writing and executed by the party granting the extension. This Agreement may be amended or modified only by a written instrument executed by Authority and Linc.

6.7 S
urvival. All representations made by Linc hereunder and Linc’s obligations specifically identified to survive shall survive the expiration or termination of this Agreement.

6.8 H eadings; Interpretation; Statutory References . The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. Authority and Linc acknowledge that this Agreement is the product of negotiation and compromise on Authority and Linc, and Authority and Linc agree, that since both Authority and Linc have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of Authority and Linc , but rather according to its fair meaning as a whole, as if both Authority and Linc had prepared it.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 15

6.9 Action or Approval . Whenever action and/or approval by Authority is required under this Agreement, the Executive Director or his or her designee may act on and/or approve such matter unless specifically provided otherwise, or unless the Executive Director determines in his or her discretion that such action or approval requires referral to Housing Authority for consideration.

6.10 A cceptance of Service of Process . In the event that any legal action is commenced by Authority against Linc, service of process on Linc shall be made by personal service upon Linc (or upon an officer of Linc ) and shall be valid whether made within or without the State of California, or in such manner as may be provided by law.

6.11 R ights and Remedies Are Cumulative. Authority’s rights and remedies are cumulative, and the exercise by Authority of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by Linc.

6.12 En tire Agreement . This Agreement, including the Exhibits attached hereto and incorporated herein by this reference, together with the Note and Assignment, contains the entire agreement between Authority and Linc with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statements between Authority and Linc with respect to the subject matter hereof. If the Exhibits to this Agreement are inconsistent with this Agreement, the more restrictive requirements shall control, as determined by the Executive Director . In the event of a conflict between this Agreement and the Note, the more restrictive requirements shall control, as determined by the Executive Director.

6.13 Count
erparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto having additional signature pages executed by the other party. Any executed counterpart of this Agreement may be delivered to the other party by facsimile and shall be deemed as binding as if an originally signed counterpart was delivered.

6.14 S
everability . If any term, provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless an essential purpose of this Agreement is defeated by such invalidity or unenforceability.

6.15 No Third Party Beneficiaries . Except as expressly set forth herein, nothing contained in this Agreement is intended to or shall be deemed to confer upon any person, other than Authority and Linc and their respective successors and assigns, any rights or remedies hereunder.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 16

6.16 Time of the Essence; Calculation of Time Periods. Time is of the essence for each condition, term, obligation and provision of this Agreement. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a business day, in which event the period shall run until the next business day. The final day of any such period shall be deemed to end at 5:00 p.m., local time at the Site. For purposes of this Agreement, a “business day” means a day that is not a day the City is closed for business, a Saturday, a Sunday, or a federal holiday or a state holiday under the laws of the State of California.

6.17 G
overning Law; Venue . This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws.

Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of Los Angeles County, California.

6.18 A RPA Provisions.

6.18.1 Linc hereby assures and certifies to the Authority that Linc will comply with the Act and all applicable Federal, State, and local laws, ordinances, regulations, policies, guidelines, and requirements as they relate to acceptance and use of ARPA Funds for this Federally assisted program. Linc understands, acknowledges, and agrees that the funding source for the Predevelopment Loan is from ARPA and as such, Linc is required to comply with the regulations associated with the ARPA Funds pursuant to 31 CFR Part 35. By executing this Agreement, Linc agrees to comply with all such regulations and reporting requirements and shall familiarize itself with those requirements , including those set forth in Exhibit F , American Rescue Plan Act , and Exhibit G, ARPA ACT Requirements.

6.18.2 Authority and Linc agree the Proposed Project shall have an affordability period of not less than twenty (20) years after the Proposed Project or assisted units are available for occupancy.

6.18.3 In contemplation that the Proposed Project may be eligible for the low - income housing credit (LIHTC) under section 42 of the Internal Revenue Code of 1986 (the “Code”):
(1) Linc agrees, as a condition for accepting the Predevelopment Loan, to waive any right to request a qualified contract (as defined in section 42(h)(6)(F) of the Code); and (2) Linc agrees to repay any Loan Proceeds to the Authority at the time the Proposed P roject may become non- compliant, after any applicable notice and cure periods , including if the Proposed Project ceases to satisfy the requirements to be a qualified low -income housing project (as defined in section 42(g) of the Code) or a qualified residential rental project (as defined in section 142(d) of the Code), or if the Proposed Project fails to comply with any of the requirements of the extended low -income housing commitment that are described in section Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 17

42(h)(6)(B)(i)-(iv) of the Code.

6.19 Prior Litigation. Reference is hereby made to the following court case: Los Angeles County Superior Court, COMMUNITY DEVELOPMENT ASSOCIATES, a California corporation; et al. vs. THE HOUSING AUTHORITY OF THE CITY OF PALMDALE CALIFORNIA, et al. and a Cross-Complaint THE HOUSING AUTHORITY OF THE CITY OF PALMDALE vs. PALMDALE TRANSIT VILLAGE TOWNHOMES, LLC, et al , Case No. 18STCV06968 (“Case”).

In accordance with that certain Memorandum of Settlement Agreement and Mutual Release recorded against the Site on April 18, 2023 as Document No. 2023-0246869 (“Release”) in connection with the settlement of the Case, Linc agrees that Linc accepts the Site in an “AS-IS, WHERE-IS” condition and releases ALL PLAINTIFFS, Palmdale TOD Apartments, L.P., and the HCD Released Parties from any and all conditions, debts, liens, defects, costs, losses, expenses, delays, attorneys fees, causes of action, compensation, indemnities, claims, damages, and demands of whatever nature, whether based on contract, tort, statute, regulation or any other legal or equitable theory of recovery, which they now have or which may hereinafter accrue on account of or in any way growing out of any and all known and unknown, foreseen or unforeseen damages and/or consequences related in any way to the Site , the STANDARD AGREEMENT, or any amendment to the STANDARD AGREEMENT, including without limitation, any obligations regarding the Palmdale Transit Village, the On-Site Improvements and the Off-Site Improvements (as these terms are defined in the Complaint filed November 29, 2018 in connection with the Case and the Release).

Linc agrees that Linc shall use its best efforts to inform Linc’s contractors, sub-contractors, consultants and advisors who perform any work at the Site of the existence of the Release and its terms and conditions which release the prior Developer as set forth in the Release. Failure to provide such information shall not entitle the Authority to claim a default under this Agreement which would allow Authority to terminate this Agreement or accelerate the repayment of the Predevelopment Loan.

[remainder of page intentionally left blank]
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 18

6.20 Exhibits. The following Exhibits are attached to this Agreement and incorporated by this reference:

A
Site Map
B Approved Predevelopment Activities and Budget
C Form of Promissory Note
D Form of Assignment Agreement
E Proposed Project Schedule
F American Rescue Plan Act
G ARPA ACT Requirements
I
N WITNESS WHEREOF, Authority and Linc have entered into this Agreement effective as of the date first written above.
“AUTHORITY”
T

HE HOUSING AUTHORITY OF THE CITY OF

PALMDALE
By:
________________________________
Ronda Perez
Ex
ecutive Director
ATTEST:

By:
________________________________
Rochelle Scott
Authority Secretary
AP
PROVED AS TO FORM:

By:
________________________________
William P. Curley, III
Authority Attorney
KANE
, BALLMER & BERKMAN
By:
________________________________
Susan Apy
Authority Special Counsel
“LINC”
LINC 4TH STREET PALMDALE, LP,
a California limited partnership
By: Linc 4th Street Palmdale, LLC,
a California limited liability company,
its general partner
By:

Linc Housing Corporation,
a California nonprofit public benefit
corporation, its sole manager
By:

Cecilia Ngo,
Senior Vice President of
Housing Development
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Exhibit A

EXHIBIT A

Site Map

[behind this page]

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Exhibit B
E

XHIBIT B
A
pproved Predevelopment Activities and Budget
[be
hind this page]

USES PRE-DEV BUDGET COST/UNIT
ARCHITECTURAL DESIGN FEES $560,000.00 $7,671.23
ENGINEERING DESIGN FEES $400,000.00 $5,479.45
LEGAL FEES $25,000.00 $342.47

OTHER PROJECT COSTS
Soft Costs
Appraisal
TCAC Fees
Environmental Audit & Plans
Permit Processing Fees
Market Study
3rd Party Construction Manager
Soils
Survey
Utility Fees
Entitlement Consultant
Financial Consultant
Other Consultants
TOTAL DEVELOPMENT COSTS $1,891,643.00 $25,912.92
SOURCE
TBD Pre-Dev Funds $91,643.00
City of Palmdale (ARPA) $1,800,000.00
TOTAL SOURCES $1,891,643.00
$906,643.00 $12,419.77
Exhibit B
Approved Predevelopment Activities and Budget
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Exhibit C
E

XHIBIT C
F
orm of Promissory Note
[be
hind this page]
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 1
Exhibit C – Form of Promissory Note
V4 12.

3.24 PROMISSORY NOTE

SECURED BY ASSIGNMENT OF WORK PRODUCT

TO THE HOUSING AUTHORITY OF THE CITY OF PALMDALE
(A-9120)
3%
Palmdale, California
$1,800,000 _________________, 202_
F
OR VALUE RECEIVED, the undersigned LINC 4TH STREET PALMDALE, LP, a California limited partnership (“Borrower”), hereby promises to pay to the order of the HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body, corporate and politic (the “Authority”), One Million Eight Hundred Thousand Dollars ($1,800,000) or so much thereof as may be advanced by the Authority to the Borrower as the Predevelopment Loan pursuant to t hat certain Predevelopment Loan Agreement between Borrower (“Linc” therein) and Authority dated as of December 18, 2024 (the “Agreement”), incorporated herein by this reference. Borrower shall pay interest at the rate, in the amount and at the time hereinafter provided.

1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Agreement.

2. Evidence of Repayment Obligation . This Note evidences the obligation of the Borrower to the Authority for the repayment of the Predevelopment Loan.

3. Terms of Payment. This Note is payable at the principal office of Authority, 38250 N. Sierra Hwy Palmdale, CA 93550, or at such other place as the holder hereof may inform the Borrower in writing, in lawful money of the United States.

4. Security. This Note shall be secured by the Assignment of Work Product executed by Borrower in favor of the Authority of even date herewith (“Assignment”).

5. Interest. This Note will bear three percent (3%) simple interest. Interest will begin to accrue on the date of each disbursement of the Predevelopment Loan.

6. Maturity Date. Unless due at an earlier time by virtue of the acceleration of the balance hereof in accordance with Section 11 hereof, all unpaid principal, plus any accrued interest, shall be due and payable by Borrower no later than the expiration of the Term, as defined in the Agreement (“Maturity Date”).

7. Payment Schedule. So long as no Event of Default occurs prior to the Maturity Date, Borrower shall not be obligated to make any payments of principal or interest under this Note until the “Trigger Date”. Trigger Date, as used herein, shall mean the date that any of the following events occurs: (a) the Authority’s governing board or the City Council of the City disapproves the execution of the DDA that is contemplated by the Agreement ; or (b) the City disapproves the Proposed Project; or (c) the date the ENA expires or is terminated. Upon the Trigger Date, Authority shall provide Borrower with a repayment schedule of principal and interest payments (“Repayment Schedule”), which shall be attached hereto as Exhibit A, and by this reference incorporated herein.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 2
Exhibit C – Form of Promissory Note
V4 12.

3.24 Payments of principal and interest pursuant to the Repayment Schedule shall begin on the first day (“Payment Date”) of the first full month following the date the Authority provides Borrower the Repayment Schedule (“Repayment Commencement Date”) and shall continue thereafter each and every month on the Payment Date during the t erm of this Note in accordance with the Repayment Schedule. The Repayment Schedule shall amortize the amounts due and owing under this Note of principal and interest for the period commencing with the Trigger Date over the remaining term of this Note, such that final payment of the outstanding principal amount of the Loan and any accrued interest shall be due and payable in full on or before the Maturity Date.

8. Application of Payment. All payments applied to this Note will be applied first to penalties and late fees, then to interest, then to reduce the principal amount owed.

9. Prepayment. This Promissory Note may be prepaid in whole or part without penalty, fee or premium; provided, however, prepayment may not occur until the date that is at least twenty (20) years after the date of this Note to the extent prohibited under applicable ARPA rules and regulations.

10. DDA. As set forth in Section 1.5 of the Agreement, if the City and Authority approve a DDA and the Proposed Project, then the DDA will address disbursement and use of any undisbursed Predevelopment Loan and any other Authority funds reserved for the construction phase of the Proposed Project. Such loan provisions shall be included in the DDA in form approved by Authority and Borrower pursuant to which Loan Proceeds disbursed under the Agreement will be included as components of the total amount of the loan from the Authority for the Proposed Project.

In such event, this Note shall be canceled and the terms for repayment of the Loan Proceeds disbursed pursuant to the Agreement will be as stated in the DDA and a new promissory note(s) executed by Borrower in connection with the DDA.

11. Acceleration Upon Event of Default.
(a
) The entire unpaid principal balance and accrued interest, if any, of this Note together with any charges set forth herein, shall at the Authority’s option be immediately due and payable prior to the Maturity Date upon any of the following events of default (“Event of Default”):
(i
) Any failure to pay, in full, any payment required under this Note within thirty (30) calendar days of written notice that such payment is due; (
ii) Any failure in the performance by Borrower of any other term, condition, provision or covenant set forth in this Note subject to the notice and cure period set forth in the Agreement;
(
iii) The occurrence of any event of default under the Agreement or the Assignment, subject to notice and cure periods, if any, set forth therein; (i
v) Borrower (A) is declared by an applicable authority or declares itself insolvent or unable to pay Borrower’s debts generally as they mature, (B) makes a general assignment for the benefit of creditors, (C) admits in writing Borrower’s inability to pay Borrower’s debts generally as they mature, ( D) files a petition in bankruptcy or a petition or answer seeking a Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 3
Exhibit C – Form of Promissory Note
V4 12.

3.24 reorganization, arrangement with creditors or other similar relief under the Federal bankruptcy laws or under any other applicable law of the United States of America or any state thereof (or any of the same is filed against Borrower and is not dismissed within 90 days of filing), or (E) consents to the appointment of a trustee or receiver for it or for a substantial part of Borrower’s property; (v) A
ny order, judgment or decree is entered appointing, without Borrower’s consent, a trustee or receiver for it or for a substantial part of Borrower’s property that is not removed within ninety (90) days from such entry; or
(vi
) Borrower voluntarily or involuntarily transfers or assigns, in any way, this Note, the Agreement, and/or the Assignment or any interest herein or therein without the Authority’s prior written consent, which consent the Authority may withhold in its sole and absolute discretion. (b) N
otwithstanding the above, in the event of an actual or deemed entry of an order for relief with respect to Borrower under the Federal Bankruptcy Code, this Note and all interest and other amounts due hereon shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Borrower.

The Authority may exercise Authority’s option to accelerate upon the occurrence of any Event of Default, regardless of any prior forbearance.
(c
) The failure to exercise the remedy set forth above or any other remedy provided by law upon the occurrence of one or more of the foregoing events of default shall not constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the same or any other default. The acceptance by Authority hereof of any payment which is less than the total of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or at any subsequent time, or nullify any prior exercise of any such remedy or option, without the express consent of Authority, except as and to the extent otherwise provided by law.

12. Default Rate of Interest. Upon the occurrence of an Event of Default the entire remaining indebtedness shall accrue interest at a rate of 1 0% per annum or the maximum interest rate allowed by law (the “Default Rate”). The parties hereto agree that the Default Rate represents a reasonable sum considering all of the circumstances existing on the date of this Note and represents a fair and reasonable estimate of the costs and damages that Authority will incur by reason of the late payment. The parties hereto further agree that proof of actual damages would be costly or inconvenient. Acceptance of any late charge shall not constitute a waiver of the default with respect to the overdue amount, and shall not prevent Authority from exercising any of the other rights and remedies available to Authority. The foregoing shall not be construed as obligating the Authority to accept any payment after its due date.

13. No Assumption. This Note shall not be assumable by the successors and assigns of Borrower without the prior written consent of Authority.

14. Waivers.
(a
) Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note. Borrower Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 4
Exhibit C – Form of Promissory Note
V4 12.

3.24 expressly agrees that this Note or any payment hereunder may be extended from time to time, and that Authority may accept further security or release any security for this Note, all without in any way affecting the liability of Borrower.
(b) N
o extension of time for payment of this Note or any installment hereof made by agreement by Authority with any person now or hereafter liable for payment of this note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part.
(c
) The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever.

15. Non-Recourse. The obligation to repay the Predevelopment Loan is a nonrecourse obligation of Borrower and its partners. Neither Borrower nor any of its general or limited partners, nor any other party, shall have any personal liability for repayment of the Predevelopment Loan.

The sole recourse of the Authority with respect to repayment of the Predevelopment Loan shall be the exercise of its rights in the Assignment Agreement and any other security for the Predevelopment Loan. Notwithstanding the foregoing, the Authority may:
(a
) obtain a judgment or order (including, without limitation, an injunction) requiring Borrower or any other party to perform (or refrain from) specified acts other than repayment of the Predevelopment Loan; and
(b) re
cover directly from Borrower or any other party:
(i) all damages, costs and expenses incurred by the Authority as a result of fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or employee of Borrower or of any general partner of Borrower or of any member of a general partner of Borrower; (
ii) all damages, costs and expenses incurred by the Authority as a result of misappropriation of funds provided for payment of Predevelopment Costs, as described in this Agreement or proceeds of insurance policies or condemnation proceeds; (iii) all amounts owing by Borrower pursuant to any indemnification provided to the Authority in connection with this Agreement; and
(iv) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that the Authority shall pay Borrower’s reasonable court costs and attorneys’ fees if Borrower is the prevailing party in such enforcement or collection action).

16. Miscellaneous Provisions.
(a
) All notices to Authority or Borrower shall be given in the manner and at the addresses set forth in the Agreement, or to such addresses as Authority and Borrower may hereinafter designate.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 5
Exhibit C – Form of Promissory Note

V4 12.3.24

(b) Borrower promises to pay all costs and expenses, including reasonable attorney ’s fees, incurred by Authority in the enforcement of the provision of this Note, regardless of whether suit is filed to seek enforcement.

(c) This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

(d) This Note shall be governed by and construed in accordance with the laws of the State of California.

(e) The times for the performance of any obligations hereunder shall be strictly construed, time being of the essence.

(f) If the rights created by this Note are held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations must be completely performed and paid.

IN WITNESS WHEREOF, Borrower has executed this Note effective as of the date first written above.

Borrower

Linc 4th Street Palmdale, LP,
a California limited partnership

By: Linc 4th Street Palmdale, LLC,
a California limited liability company, its general partner

By: Linc Housing Corporation,
a California nonprofit public benefit corporation,
its sole manager

By:

Cecilia Ngo,
Senior Vice President of Housing Development
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Exhibit D
E

XHIBIT D
F
orm of Assignment Agreement
[be
hind this page]
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 1
Exhibit D – Form of Assignment
V4 12.3.24

ASSIGNMENT OF WORK PRODUCT

TO THE HOUSING AUTHORITY OF THE CITY OF PALMDALE
(A-9120)
T
his ASSIGNMENT OF WORK PRODUCT (the “ Assignment”) is entered into as of _________, 202___ (the “Effective Date”) by and between the HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body, corporate and politic (“Authority”), and LINC 4TH STREET PALMDALE, LP, a California limited partnership (“Assignor”). The Authority and the Assignor are collectively referred to herein as the “Parties.”
R

ECITALS
A. Pursuant to the terms of that certain Predevelopment Loan Agreement dated as of December 18, 2024, by and between the Assignor and the Authority (the “ Loan Agreement”), the Assignor desires to assign to the Authority, and the Authority desires to accept from the Assignor, the assignment of the Assignor’s right, title, and interest in and under those agreements, contracts, and other work product described below and incurred by the Assignor in connection with the Proposed Project, as defined in the Loan Agreement.

B. T
he consent to such assignments by various third parties may be required substantially in the form shown in Schedule 1 or otherwise reasonably approved by the Authority (the “Consent”).

NOW
, THEREFORE, in consideration of the foregoing, of the mutual promises of the Parties and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties mutually agree as follows:

T
ERMS

1. Assignment by Assignor. The Assignor assigns and delegates to the Authority, and the Authority accepts from the Assignor, all of the Assignor’s right, title, and interest in and obligations under the following:
(a
) all architectural designs, construction, engineering , and consulting contracts, including any and all amendments, modifications, supplements, addenda and general conditions (collectively, the “Project Agreements”) previously or later entered into by the Assignor and any Contractor (as defined below) pertaining to the development of the Proposed Project; (
b) all plans and specifications, shop drawings, working drawings, reports, studies, amendments, modifications, changes, supplements, general conditions, addenda and work product (collectively, the “Reports, Plans and Specifications”) previously or later prepared by the Assignor or any Contractor pertaining to the development of the Proposed Project; (c
) all land use approvals, conditional use permits, building permits and other governmental entitlements and approvals of any nature obtained for the Proposed Project (collectively, the “Government Approvals”); and
(
d) all financing or other applications and all other tangible documents, except those of a Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 2
Exhibit D – Form of Assignment
V4 12.3.24
proprietary or confidential nature pertaining to the development of the Proposed Project (“General Documents”).

For purposes of this Assignment, the term “ Contractor” means any architect, contractor, engineer, consultant, or other person or entity entering into Project Agreements with the Assignor (other than attorney agreements for the provision of legal services) and/or preparing Reports, Plans and Specifications or other documents for the Assignor with respect to the Proposed Project. Such Project Agreements, Reports, Plans and Specifications, Government Approvals, and General Documents, will be collectively referred to in this Assignment as the “Collateral Documents”. It is intended that all Collateral Documents, whenever produced, be assigned through this Assignment to the Authority as security for the Predevelopment Loan, and the applicable Consent executed. The Assignor will periodically provide the Authority a list of all Collateral Documents.

2. Cons
ent. The Assignor agrees to obtain and deliver to the Authority, such consents to the assignment of Collateral Documents as may be required by the terms of the Collateral Documents or as otherwise requested by the Authority substantially in the form shown in Schedule 1 or otherwise reasonably approved by the Authority. This Assignment and any consents to this Assignment will not relieve the Assignor of the Assignor’s obligations under the Collateral Documents.

3. P
urpose. This Assignment is made to secure: (i) payment to the Authority of all sums owing under the Note, dated the same date as the Effective Date of this Assignment and made by the Assignor to the order of the Authority, and any and all additional advances, modifications, extensions, renewals, and amendments of the Note; and (ii) payment and performance by the Assignor of all the Assignor’s obligations under the Loan Agreement. Notwithstanding anything to the contrary herein or in the Loan Agreement, this Assignment shall only become effective upon the initial draw under the Loan Agreement.

4. N
o Assumption of Obligations. The Assignor agrees that the Authority does not assume any of the Assignor’s obligations or duties under any Collateral Documents, including, but not limited to, the obligation to pay for the preparation of any Collateral Documents. The Authority will not be responsible for any default, liability, or obligation of the Assignor under the Collateral Document occurring prior to the time the Authority exercises the Authority’s rights under this Assignment. For purposes of clarity, Assignor shall at all times remain liable for the payment of the preparation of any Collateral Documents assigned to Authority hereunder. Notwithstanding the foregoing, if, following assignment of the Collateral Documents to the Authority, Authority requires or request additional scope of work, studies or actions by the Contractors on the Collateral Documents, the costs of said additional scope of work shall be an Authority obligation.

5. A
ttorney-In-Fact. The Assignor irrevocably appoints the Authority as the Assignor’s attorney-in- fact, which power is coupled with an interest, so that the Authority will have the right to demand, receive, and enforce any and all of the Assignor’s rights with respect to the Collateral Documents, and to perform any and all acts in the name of the Assignor or in the name of the Authority with the same force and effect as if performed by the Assignor in the absence of this Assignment, upon the occurrence of: (i) a default under the Loan Agreement by the Assignor (after notice and opportunity to cure) or an event which, with notice or the passage of time or both, would constitute a default under the Loan Agreement, or (ii) an Event of Default under the Note by the Assignor (after notice and opportunity to cure) or an event which, with notice or the passage of time or both, would constitute an Event of Default under the Note , or (iii) any termination of the Loan Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 3
Exhibit D – Form of Assignment
V4 12.3.24
Agreement. Until such occurrences, the Assignor will be entitled to exercise all rights pertaining to the Collateral Documents.

6. Representations and Warranties . The Assignor represents and warrants to the Authority that: (i) no previous assignment(s) of the Assignor’s right or interest in or to the Collateral Documents has or have been made; (ii) the Assignor has done no act nor omitted to do any act that might prevent the Authority from exercising any of the rights, powers and privileges conferred by the Collateral Documents; and (iii) the copy of each Collateral Document provided by the Assignor to the Authority is the complete and entire agreement between the parties to those Collateral Documents in all material respects.

7. G
overning Law. This Assignment is governed by the laws of the State of California, except to the extent that federal law preempts the laws of the State of California. The Assignor consents to the jurisdiction of any federal or state court within the State of California having proper venue for the filing and maintenance of any action arising under this Assignment and agrees that the prevailing party in any such action will be entitled, in add ition to any other recovery, to reasonable attorneys’ fees and costs.

8. Bi
nding Upon Successors and Assigns. This Assignment is binding upon and will inure to the benefit of the heirs, legal representatives, successors -in-interest, and assigns of the Assignor and the Authority; provided, however, this Section 8 may not be construed and is not intended to waive the restrictions on assignment, sale, transfer, mortgage, pledge, hypothecation, or encumbrance by the Assignor contained in the Loan Agreement.

9. R
emedies. In the event of the Assignor’s default under this Assignment, the Authority may exercise all or any one or more of the Authority’s rights and remedies available under this Assignment, at law or in equity. Such rights and remedies will be cumulative and concurrent, and may be enforced separately, successively or together, and the exercise of any particular right or remedy will not in any way prevent the Authority from exercising any other right or remedy available to the Authority.

10. C
apitalized Terms. Capitalized terms used but not defined in this Assignment have the meanings set forth in the Predevelopment Loan Agreement.

11. H
eadings. Section headings contained in this Assignment are inserted as a matter of convenience and for ease of reference only and will be disregarded for all other purposes, including the construction or enforcement of this Assignment or any of the provisions of this Assignment.

12. No A
gency or Partnership. Nothing contained in this Assignment will constitute the Authority as a joint venturer, partner or agent of the Assignor, or render the Authority liable for any debts, obligations, acts, omissions, representations or contracts of the Assignor.

13. F
urther Assurances. The Assignor will at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary or desirable, or that the Authority may reasonably request, in order to protect any right or interest granted by this Assignment or to enable the Authority to exercise and enforce the Authority’s rights and remedies under this Assignment.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 4
Exhibit D – Form of Assignment
V4 12.3.24

14. Termination. This Assignment will terminate, and the security of the Authority under this Assignment will be released upon the earlier of the Assignor ’s repayment in full of the Predevelopment Loan or as set forth in Section 1.5 of the Loan Agreement.

15. Counterparts. This Assignment may be executed in counterparts by the Parties, each of which will be deemed to be an original, and all such counterparts will constitute one and the same instrument.

IN WI
TNESS WHEREOF, the Parties have entered into this Assignment Agreement effective as of the date first written above.
“AUTHORITY”
T

HE HOUSING AUTHORITY OF THE CITY OF

PALMDALE
By:
________________________________
Ronda Perez
Executive Director
ATTEST:

By:
________________________________
Roxanne Faber
Authority Secretary
AP
PROVED AS TO FORM:

By:
________________________________
William P. Curley, III
Authority Attorney
KANE
, BALLMER & BERKMAN
By:
________________________________
Susan Apy
Authority Special Counsel
“ASSIGNOR”
LI
NC 4TH STREET PALMDALE, LP,
a California limited partnership
By:

Linc 4th Street Palmdale, LLC,
a California limited liability company,
its general partner
By: L
inc Housing Corporation,
a California nonprofit public benefit
corporation, its sole manager
By:

Cecilia Ngo,
Senior Vice President of
Housing Development
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Page 1
Schedule 1 to Exhibit D – Form of Assignment
Schedule 1
FO

RM OF CONSENT
, a (the “ Contractor”) consents to the foregoing Assignment, of which this Consent is a part, and acknowledges that at present there exist no unpaid claims presently due to the Contractor, except as disclosed to the Authority, arising out of the preparation and delivery to the Assignor of the Collateral Documents for which the Contractor is responsible and/or the performance of the Contractor’s obligations under any Project Agreement.

T
he Contractor agrees that if, at any time, the Authority, pursuant to the Authority’s rights, elects to undertake or cause the completion of any of the predevelopment activities for the Proposed Project, and gives the Contractor written notice of such election; then, so long as the Contractor has received, receives, or continues to receive the compensation called for under the applicable Project Agreement, the Authority may, at the Authority’s option, use and rely on the Collateral Documents for the purposes for which the Collateral Documents were prepared, and the Contractor will continue to perform the Contractor’s obligations under the applicable Project Agreement for the benefit and account of the Authority in the same manner as if performed for the benefit or account of the Assignor in the absence of this Assignment.

T
he Contractor further agrees that, in the event of a breach by the Assignor of the applicable Project Agreement, or any agreement entered into with the Contractor in connection with the Collateral Documents, so long as the Assignor ’s interest in the applicable Project Agreement and Collateral Documents is assigned to the Authority, the Contractor will give written notice to the Authority. The Authority will have sixty (60) days from the receipt of such written notice of default to remedy or cure said default; provided, however, nothing in this Consent will require the Authority to cure said default or to undertake completion of the predevelopment activities.

T
he Contractor warrants and represents that the Contractor has no knowledge of any prior assignment(s) of any interest in either the applicable Project Agreement or the Collateral Documents.

Except as otherwise defined in this Consent, the terms used in this Consent will have the meanings given them in the foregoing Assignment or the Loan Agreement, as applicable.

Execution Date: By:

Name:

Title:

Title of Contract:

Date of Contract:

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Exhibit E

EXHIBIT E

Proposed Project Schedule

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Site Control 12/18/2024
Apply Soft Financing 1 (City of Palmdale) 12/1/2024
Secure Soft Financing 1 (City of Palmdale) 12/31/2024
Apply Soft Financing 2 (LACDA) 1/1/2025
Secure Soft Financing 2 (LACDA) 4/1/2025
All Discretionary Entitlements Received 6/1/2025
TCAC Application Submittal Date 7/2/2025
TCAC Award Date 10/2/2025
Construction Finance Closing 3/1/2026
Temporary Certificate of Occupancy (TCO) 12/1/2027
Lease-Up Complete 6/1/2028
Conversion to Perm Financing Date 7/1/2028
8609 Approval Date 6/1/2029
Exhibit E
Proposed Project Schedule
Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Exhibit F

EXHIBIT F

American Rescue Plan Act

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AMERICAN RESCUE PLAN ACT
Bidder/Proposer acknowledges and understands that it is bidding/proposing on a project with a source of funding coming from the Coronavirus State and Local Fiscal Recovery Funds established under the American Rescue Plan Act (31 CFR Part 35) (ARPA). With ARPA funding the regulations dictate, among other things, the purpose, eligible use of the funds, and compliance with specific reporting requirements. All of these can be found at 31 CFR Part 35 (Regulations), which Regulations are incorporated herein and made a part of this Request for Bids/Proposals. Said regulations will also be incorporated into the contract with the successful bidder.

Bidder/Proposer by submitting a bid/proposal is agreeing to be bound by the requirements set out in the Regulations. This includes submitting quarterly reports by the 15 th of the month following the end of each quarter to the Director of Finance. The reports must include, but is not limited to, the use of the funds, documentation/receipts of the funds spent, description of the project and status of completion of the project.

In addition to compliance with ARPA, as a recipient of federal funds, the Bidder/Proposer, and any and all of its subcontractors, must ensure that they do not deny benefits, services or otherwise discriminate on the basis of race, color, national origin (including limited English proficiency), disability, age, or sex (including sexual orientation and gender identity) in accordance with Title VI of the Civil Rights Act of 1964, Public Law 88-352, 42 U.S.C. 2000d-1 et seq., and the Department's implementing regulations, 31 CFR part 22; Section 504 of the Rehabilitation Act of 1973 (Section 504), Public Law 93-112, as amended by Public Law 93-516, 29 U.S.C. 794; Title IX of the Education Amendments of 1972 (Title IX), 20 U.S.C. 1681 et seq., and the Department's implementing regulations, 31 CFR part 28; Age Discrimination Act of 1975, Public Law 94-135, 42 U.S.C. 6101 et seq., and the Department implementing regulations at 31 CFR part 23. Bidder/Proposer will also be required to submit data showing compliance with the above.

Bidder/Proposer, in any contract issued, will also be required to comply with Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards found at 2 CFR Part 200 Appendix II.

Predevelopment Loan Agreement Agreement No. A-9120
Linc 4th Street Palmdale Exhibit G

EXHIBIT G

ARPA ACT Requirements

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PART INTENTIONALLY LEFT BLANK

____________________________________________________________________________

ARPA ACT REQUIREMENTS
RECITAL:

On March 11, 2021, the American Rescue Plan Act (“ARP Act”) was signed into law. The ARP Act was intended to provide increased aid to individuals, families, businesses, and governments affected by the COVID-19 pandemic. The ARP Act established and funded the Coronavirus State and Local Fiscal Recovery Funds (the “CSLFRF”), which included two hundred forty (240) billion dollars for state, territorial, local, and Tribal governments that are being used to fight the pandemic and accelerate local economic recovery.

MANDATORY CONTRACT PROVISIONS FOR ARP ACT EXPENDITURES:

Procurement processes for expenditures using American Rescue Plan Act (ARPA) funds generally follow state and local rules. In most cases, city procurement policies will satisfy the federal requirements. One notable difference is that federal procurement regulations mandate specific contract provisions in certain circumstances. There are no requirements for contracts or expenditures of less than $10,000. However, using ARPA funds for contracts in excess of $10,000 triggers the mandatory contract provisions in 2 CFR Part 200, Appendix II.

Most contract provisions are required only on those exceeding $100,000 or those for construction projects of any amount. However, mandatory contract provisions will apply if a city obligates ARPA funds to a contract that exceeds $100,000.

For ease of administration, below is an explanation of the mandatory contract provisions and model language necessary for compliance with federal law disclosures. 2 C.F.R. PART 200: APPENDIX II, CONTRACT PROVISIONS
• For contracts over $10,000, cities must include a provision that addresses termination for cause and convenience by the local government, including the process for termination and the basis for settlement.
• For contracts over $100,000, cities must include a provision that addresses administrative, contractual, or legal remedies if a contractor violates or breaches the contract, including sanctions and penalties for the breach. • In accepting the ARPA award, local governments agreed to include an EEO statement in any federally assisted construction contract defined in 41 CFR Part 60-1.3. A federally assisted construction contract is defined as follows:
o Any agreement or modification thereof between any applicant and a person for construction work which is paid for in whole or in part with funds obtained from the government or borrowed on the credit of the government pursuant to any federal program involving a grant, contract, loan, insurance, or guarantee, or undertaken pursuant to any federal program involving such grant, contract, loan, insurance, or guarantee, or any application or modification thereof approved by the government for a grant, contract, loan, insurance, or guarantee under which the applicant itself participates in the construction work.

EQUAL EMPLOYMENT OPPORTUNITY:

During the performance of this contract, the contractor agrees as follows:
(1) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The contractor will take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin. Such action shall include, but not be limited to the following:

1. Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.

2. The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.

3. The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information.

4. The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding a notice to be provided advising the said labor union or workers' representatives of the contractor's commitments under this section and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

5. The contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.

6. The contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

7. In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part, and the contractor may be declared ineligible for further government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.

8. The contractor will include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (8) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the administering agency may direct as a means of enforcing such provisions, including sanctions for noncompliance:

Provided, however, that in the event a contractor becomes involved in or is threatened with litigation with a subcontractor or vendor as a result of such direction by the administering agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States.

Contracts that are in excess of $100,000 and involve the employment of mechanics or laborers must include provisions requiring compliance with the Contract Work Hours and Safety Standards Act as follows:
(1) Overtime requirements: No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such a workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such a workweek.
(2) Violation: liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph (1) of this section, the contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory) for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (1) of this section, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (1) of this section. (3) Withholding for unpaid wages and liquidated damages. The City of Palmdale shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other federal contract with the same prime contractor, or any other federally- assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (2) of this section. (4) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (1) through (4) of this section and also a clause requiring the subcontractors to include these clauses in any lower-tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower-tier subcontractor with the clauses set forth in paragraphs (1) through (4) of this section.

Contracts and subgrants in excess of $150,000 must contain a provision that requires the non-federal award to agree to comply with all applicable standards, orders, or regulations of the Clean Air Act and Federal Water Pollution Control Act.

CLEAN AIR ACT
(1) The contractor agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq. (2) The contractor agrees to report each violation to the City of Palmdale and understands and agrees that the City of Palmdale will, in turn, report each violation as required to assure notification to the Treasury Department and the appropriate Environmental Protection Agency Regional Office.
(3) The contractor agrees to include these requirements in each subcontract exceeding $100,000 financed in whole or in part with American Rescue Plan Act funding.

FEDERAL WATER POLLUTION CONTROL ACT
(1) The contractor agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.
(2) The contractor agrees to report each violation to the City of Palmdale and understands and agrees that the City of Palmdale will, in turn, report each violation as required to assure notification to the Treasury Department and the appropriate Environmental Protection Agency Regional Office.
(3) The contractor agrees to include these requirements in each subcontract exceeding $100,000 financed in whole or in part with American Rescue Plan Act funds.

Federal Water Pollution Control Act
(1) The contractor agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.
(2) The contractor agrees to report each violation to the City of Palmdale and understands and agrees that the City of Palmdale will, in turn, report each violation as required to assure notification to the Treasury Department and the appropriate Environmental Protection Agency regional office.
(3) The contractor agrees to include these requirements in each subcontract exceeding $100,000 financed in whole or in part with American Rescue Plan Act funds.

Cities cannot award a contract to parties listed on the governmentwide exclusions in the System for Award Management (SAM) listed at www.sam.gov.

Byrd Anti-Lobbying Amendment, 31 U.S.C. § 1352: Contractors that apply for a bid or award exceeding $100,000 must file the required certification that it will not and has not used federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency. Cities should include the Byrd Anti-Lobbying contract clause is as follows:

Contractors who apply or bid for an award of $100,000 or more shall file the required certification. Each tier certifies to the tier above that it will not and has not used federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any federal contract, grant, or any other award covered by 31 U.S.C. § 1352.

Each tier shall also disclose any lobbying with non-federal funds that takes place in connection with obtaining any federal award. Such disclosures are forwarded from tier to tier, up to the recipient.

TITLE VI OF THE CIVIL RIGHTS ACT OF 1964
In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable.

1. Recipient ensures its current and future compliance with Title VI of the Civil Rights Act of 1964, as amended, which prohibits exclusion from participation, denial of the benefits of, or subjection to discrimination under programs and activities receiving federal financial assistance, of any person in the United States on the ground of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury Title VI regulations at 31 CFR Part 22 and other pertinent executive orders such as Executive Order 13166, directives, circulars, policies, memoranda, and/or guidance documents.

2. Recipient acknowledges that Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency,” seeks to improve access to federally assisted programs and activities for individuals who, because of national origin, have Limited English proficiency (LEP). Recipient understands that denying a person access to its programs, services, and activities because of LEP is a form of national origin discrimination prohibited under Title VI of the Civil Rights Act of 1964 and the Department of the Treasury’s implementing regulations. Accordingly, Recipient shall initiate reasonable steps, or comply with the Department of the Treasury’s directives, to ensure that LEP persons have meaningful access to its programs, services, and activities. Recipient understands and agrees that meaningful access may entail providing language assistance services, including oral interpretation and written translation where necessary, to ensure effective communication in the Recipient’s programs, services, and activities.

3. Recipient agrees to consider the need for language services for LEP persons when Recipient develops applicable budgets and conducts programs, services, and activities. As a resource, the Department of the Treasury has published its LEP guidance at 70 FR 6067. For more information on taking reasonable steps to provide meaningful access for LEP persons, please visit http://www.lep.gov.

4. Recipient acknowledges and agrees that compliance with the assurances constitutes a condition of continued receipt of federal financial assistance and is binding upon Recipient and Recipient’s successors, transferees, and assignees for the period in which such assistance is provided.

5. Recipient acknowledges and agrees that it must require any sub-grantees, contractors, subcontractors, successors, transferees, and assignees to comply with assurances 1-4 above, and agrees to incorporate the following language in every contract or agreement subject to Title VI and its regulations between the Recipient and the Recipient’s sub-grantees, contractors, subcontractors, successors, transferees, and assignees:

The sub-grantee, contractor, subcontractor, successor, transferee, and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this contract (or agreement). Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this contract or agreement.

6. Recipient understands and agrees that if any real property or structure is provided or improved with the aid of federal financial assistance by the Department of the Treasury, this assurance obligates the Recipient, or in the case of a subsequent transfer, the transferee, for the period during which the real property or structure is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. If any personal property is provided, this assurance obligates the Recipient for the period during which it retains ownership or possession of the property.

7. Recipient shall cooperate in any enforcement or compliance review activities by the Department of the Treasury of the aforementioned obligations.

Enforcement may include investigation, arbitration, mediation, litigation, and monitoring of any settlement agreements that may result from these actions. The Recipient shall comply with information requests, on-site compliance reviews and reporting requirements.

8. Recipient shall maintain a complaint log and inform the Department of the Treasury of any complaints of discrimination on the grounds of race, color, or national origin, and limited English proficiency covered by Title VI of the Civil Rights Act of 1964 and implementing regulations and provide, upon request, a list of all such reviews or proceedings based on the complaint, pending or completed, including outcome.

Recipient also must inform the Department of the Treasury if Recipient has received no complaints under Title VI.

9. Recipient must provide documentation of an administrative agency's or court's findings of non-compliance of Title VI and efforts to address the non-compliance, including any voluntary compliance or other agreements between the Recipient and the administrative agency that made the finding. If the Recipient settles a case or matter alleging such discrimination, the Recipient must provide documentation of the settlement. If Recipient has not been the subject of any court or administrative agency finding of discrimination, please so state.

10. If the Recipient makes sub-awards to other agencies or other entities, the Recipient is responsible for ensuring that sub-recipients also comply with Title VI and other applicable authorities covered in this document State agencies that make sub- awards must have in place standard grant assurances and review procedures to demonstrate that that they are effectively monitoring the civil rights compliance of sub­recipients.

The United States of America has the right to seek judicial enforcement of the terms of this assurances document and nothing in this document alters or limits the federal enforcement measures that the United States may take in order to address violations of this document or applicable federal law.

Under penalty of perjury, the undersigned official(s) certifies that official(s) has read and understood the Recipient's obligations as herein described, that any information submitted in conjunction with this assurances document is accurate and complete, and that the Recipient is in compliance with the aforementioned nondiscrimination requirements.

ARPA Regulations, 31 CFR Part 35 (“Regulations”) are incorporated herein and made a part of this Contract.

CONTRACTOR agrees to be bound by the reporting requirements set out in the Regulations. This includes submitting quarterly reports by the 15th of the month following the end of each quarter to the Director of Finance. The reports must include, but is not limited to, the use of the funds, documentation/receipts of the funds spent, description of the project and status of completion of the project. The Director of Finance may require additional information of CONTRACTOR for compliance with ARPA Regulations.

CONTRACTOR, in the performance of this Contract and as a sub-recipient of ARPA funds, as well as all of its subcontractors, must comply with the following:

1. CONTRACTOR, and any and all of its subcontractors, must ensure that they do not deny benefits, services or otherwise discriminate on the basis of race, color, national origin (including limited English proficiency), disability, age, or sex (including sexual orientation and gender identity) in accordance with Title VI of the Civil Rights Act of 1964, Public Law 88-352, 42 U.S.C. 2000d-1 et seq., and the Department's implementing regulations, 31 CFR part 22; Section 504 of the Rehabilitation Act of 1973 (Section 504), Public Law 93-112, as amended by Public Law 93-516, 29 U.S.C. 794; Title IX of the Education Amendments of 1972 (Title IX), 20 U.S.C. 1681 et seq., and the Department's implementing regulations, 31 CFR part 28; Age Discrimination Act of 1975, Public Law 94-135, 42 U.S.C. 6101 et seq., and the Department implementing regulations at 31 CFR part 23. CONTRACTOR will be required to submit data showing compliance with the above.

2. Universal Identifier and System for Award Management (SAM), 2 C.F.R. Part 25, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 25 is hereby incorporated by reference.

3. Reporting Subaward and Executive Compensation Information, 2 C.F.R. Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 170 is hereby incorporated by reference.

4. OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower-tier covered transactions. (2 C.F.R. Part 180, subpart B) and that the award is subject to 2 C.F.R. Part 180 and Treasury's implementing regulation at 31 C.F.R. Part 19.

5. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards found at 2 CFR Part 200 Appendix II.

6. Recipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 C.F.R. Part 200, Appendix XII to Part 200 is hereby incorporated by reference.

7. Governmentwide Requirements for Drug-Free Workplace, 31 C.F.R. Part 20.

8. New Restrictions on Lobbying, 31 C.F.R. Part 21

9. Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601-4655) and implementing regulations.

10. Section 2 CFR 200.323 regarding Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (EPA guidelines at 40 CFR Part 247).

11. Section 200.322 of 2 CFR 200.322, Domestic preferences for procurements.

12. Generally applicable federal environmental laws and regulations.

V4 12.3.24

EXCLUSIVE NEGOTIATION AGREEMENT
(LINC 4TH STREET PALMDALE)
(A-9121)

This EXCLUSIVE NEGOTIATION AGREEMENT (this “Agreement”) is dated as of December 18, 2024 and is entered by and between LINC 4TH STREET PALMDALE, LP, a California limited partnership (“Linc”), and HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body, corporate and politic (“ Authority”). Linc and the Authority are each a “ Party” and collectively, the “Parties.

RECITALS

WHEREAS, the Authority owns certain real property comprised of approximately 4.66 acres which is generally located on the northeast corner of Avenue Q and 4th Street East in Palmdale, California (“Site”). The Site is a portion of APN 3006 -008-921 and is generally illustrated on the Site Map attached to this Agreement as Exhibit A and incorporated herein by reference.

WHEREAS, in May, 2024, the Authority issued that certain Request for Proposals RFP NO. 23-003-6400 TRANSIT VILLAGE AFFORDABLE RENTAL HOUSING DEVELOPMENT (“RFP”), to which Linc responded with a proposal dated July 3, 2024 (“Proposal”).

WHEREAS, the development of the Site with the improvements described in the Proposal to provide approximately seventy -two (72) rental housing units for occupancy by households with incomes between 30% and 60% of Area Median Income in Los Angeles County and one manager’s unit for no less than 55 years is referred to herein as the “Proposed Project.”

WHEREAS, the Site was acquired by the Authority’s predecessor-in-interest using Low and Moderate Income Housing Funds.

WHEREAS, the Proposal includes the Conceptual Site Plan attached to this Agreement as Exhibit B and incorporated herein by reference, and Linc’s qualifications and financial projections to ground lease the Site from the Authority and develop the Site with the Proposed Project.

WHEREAS, Linc proposes to develop the Proposed Project with financing that may include low income housing tax credits, Low and Moderate Income Housing Asset Funds, a conventional bank loan, a loan from the Los Angeles County Development Authority, and other private and public funding sources.

WHEREAS, after careful review of all submittals, representatives from the Authority recommended Linc as the one development team with the best proposal an d the developer to negotiate with exclusively to develop the Proposed Project.

WHEREAS, the Authority and Linc have reached agreement on the terms and conditions of a commitment from the Authority to provide financial assistance to the Proposed Project, consisting of a loan of prepaid rent in an amount equal to the current appraised fair market value of the Site and

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Linc 4th Street Palmdale Page 2
construction to permanent loans of approximately $7,375,000, consisting of Low and Moderate Income Housing Asset Funds (“Loan Commitment”).

WHEREAS, the Authority and Linc wish to negotiate the terms and conditions of a Disposition and Development Agreement (“DDA”) for consideration by the Authority Board, which DDA would be consistent with the Loan Commitment , this Agreement, the RFP, and the Proposal and would provide for the long term ground lease of the Site to Linc and the design, financing, construction, and operation of the Proposed Project for a minimum of 55 years or, subject to approval and agreement by the Authority in a DDA, such longer time period as may be reasonably required to make affordable housing tax credit financing possible.

WHEREAS, this Agreement is in furtherance of the public purposes set forth in the Community Redevelopment Law of the State of California, Sections 33000 et seq. of the California Health and Safety Code (the “Redevelopment Law”) and the Housing Authorities Law, Sections 34200 et seq. of the California Health and Safety Code (the “Housing Authorities Law”).

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the Authority and Linc agree as follows:

A. Recitals

The Recitals set forth above are true and accurate, and incorporated herein.

B. Purpose

The Parties acknowledge and agree that this Agreement is for the sole purpose of setting forth the objectives of the Parties and stating the intention of the Parties to negotiate exclusively and, if their negotiations are successful, to enter into a DDA with a long term ground lease of the Site.

C. Term

1. This Agreement will automatically terminate on December 31, 2025, subject to extension and termination provisions expressly provided herein (“Term”). Subject to the approval of the Authority Executive Director or designee, the Term may be extended for two periods not to exceed an additional ninety (90) calendar days each upon Linc’s request, for a total extended period of one hundred eighty (180) calendar days. Any such extension shall be granted, if at all, in the sole and absolute discretion of the Authority Executive Director or designee and upon such terms and conditions as the Executive Director or designee deems appropriate.

2. Linc proposes to apply for an allocation of low income housing tax credits (“Tax Credits”) from the California Tax Credit Allocation Committee (“CTCAC”).

3. Linc will have opportunities to obtain a preliminary allocation of Tax Credits for the Proposed Project during the Term. Linc must submit an application in the first application funding round in 2025 it is able to do so.

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Linc 4th Street Palmdale Page 3

4. If the Proposed Project obtains a preliminary allocation of Tax Credits and the DDA is signed and submitted by Linc prior to the end of the Term, then this Agreement will be extended for another thirty ( 30) calendar days from the date of such submittal to enable the Authority Board to determine whether it desires to enter into such a DDA and authorize the Authority Executive Director to execute the DDA.

5. During the Term of this Agreement, the Parties will perform their obligations as set forth in this Agreement and will negotiate diligently and in good faith. During the Term of this Agreement, the Authority will not solicit or entertain offers or proposals from other parties concerning the Site.

6. In the event any of the following events occurs which is beyond the control of Linc, the Parties shall reasonably cooperate with each other with regard to any necessary extension of the Term of this Agreement: acts of God, strikes, lockouts, labor disputes, judicial orders, enemy or hostile governmental actions, civil commotions, or fire or other casualty, nonperformance by Authority that prevents the performance of Linc, and other causes beyond the control of Linc that prevent the performance of Linc; provided, however, that the Parties agree that the inability to secure or to obtain financing, lack of funding, or inability to pay bills or debts shall not be considered to be events which are “beyond the control of Linc” triggering this requirement.

D. Negotiations

1. The Authority and Linc will negotiate the terms and conditions of a mutually acceptable DDA which will provide for Linc’s ground lease of the Site and design and ownership of the improvements thr ough the term of the ground lease, and the financing, construction, ownership , and operation of the Proposed Project to provide affordable rental housing for households with affordability restrictions from 30% to 60% of the Area Median Income and to be compatible with and enhance the neighborhood.

2. During the t erm of this Agreement and prior to a DDA, t he Authority and Linc will negotiate a mutually acceptable Lease Option, which will set forth the terms and conditions for Linc’s exercise of an option to lease the Site from the Authority (“Lease Option”) and which would be presented to the Authority Board for approval. If a Lease Option is successfully negotiated, references in this Agreement to Authority Board approval, and Authority execution, of the Loan Commitment will be deemed to refer to both the Loan Commitment and the Lease Option. Notwithstanding anything to the contrary herein, Linc and the Authority may elect to not negotiate the Lease Option as an intermediary step and instead negotiate the DDA.

3. The Proposed Project will be consistent with the description set forth in the Recitals above, Linc’s Proposal, and the Conceptual Site Plan, subject to changes or revisions to the Proposed Project as mutually agreed to by the Authority and Linc or as may be required after completing CEQA review of the Proposed Project. The DDA will include a schedule of performance providing for the timely satisfaction of all conditions precedent to the closing of construction financing and the timely commencement and completion of construction and lease up of the units.

4. Linc will be responsible for any relocation costs of the Proposed Project arising under the Uniform Relocation Act and the California Relocation Assistance Act.

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Linc 4th Street Palmdale Page 4

5. Linc will be solely responsible for all development costs of the Proposed Project (except for the Authority loan for Linc’s lease of the Site and the loan for development costs, the amounts, terms and conditions to be negotiated during the Term of this Agreement). Linc acknowledges that neither the Authority nor the City of Palmdale (the “City”) nor any of their officers, employees or agents has provided any direct or indirect information which in any way would indicate that the Proposed Project is or is not subject to the State of California’s prevailing wage requirements.

6. Linc agrees to reimburse the Authority for its legal costs related to the Proposed Project which will be reimbursed to the Authority at closing of construction financing and permanent financing, as applicable.

7. Negotiations will address, among other items, the form, amount and terms (including the repayment terms), and lien priority of the Authority’s assistance to the Proposed Project; the essential terms and conditions of a ground lease between the Authority and Linc; the scope and schedule of development; and mitigation measures during construction.

8. Negotiations will also address t he affordability restrictions to be placed on the Proposed Project, which restrictions must be senior in priority to the construction and permanent financing, and will address the provisions that will be required in tenant leases and the Authority’s required forms for monitoring resident income and unit affordability . Linc will be obligated to pay an annual compliance monitoring fee to the Authority.

9. Linc will provide the Authority with a detailed preliminary financial analysis for the Proposed Project containing matters typically contained in such analyses, including without limitation, a detailed preliminary development cost budget, proposed rents and a detailed preliminary operating income and expense estimate. The financial analysis will be used to evidence the financial feasibility of the Proposed Project and to assist in the negotiation of terms regarding the financing of the Proposed Project.

The analysis will describe the proposed amount and uses of any financial assistance requested to be provided by the Authority. The Parties acknowledge that the financial analysis and budgets will continue to be refined in accordance with the DDA.

10. The DDA shall require the submittal of documentation of all proposed property acquisition and construction loans and owner equity needed to carry out the proposed financing. Linc agrees to make continuing full disclosure to Authority of its proposed method of financing the Proposed Project, including the financing of any off -site improvements that are required to obtain the necessary development rights for the Proposed Project.

11. Linc agrees that it will submit to the Authority a substantially complete and final copy of its application for Tax Credits Authority at least two (2) business days before submittal to CTCAC, and the complete and final copy of its application when submitted to CTCAC.

12. The DDA will set forth the terms and conditions of the Authority’s financial assistance, including repayment terms, security for the Authority loans and priority in relation to other Proposed Project financing. The DDA will also set forth Linc’s obligation to submit quarterly and/or annual

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Linc 4th Street Palmdale Page 5

financial statements for the Proposed Project , which will include calculations of residual receipts payments on the Authority loans, and will prescribe appropriate penalties for late submittals.

13. The DDA shall include a scope of development setting forth the number and size of the housing units, the total square feet of ancillary facilities and the design parameters for the Proposed Project, consistent with the Conceptual Site Plan and the Proposal.

14. The Authority will have the right to reasonably approve Linc’s selection of the general contractor, architect, major subcontractors, construction lender, permanent lender, tax credit investor, Davis Bacon wage compliance consultant, if applicable, and other lenders, and service providers, including but not limited to the property manager . The Authority will also have the right to reasonably review and approve any and all contracts and agreements with such entities for the Proposed Project.

15. The Authority’s financial assistance to the Proposed Project will be predicated on the right of designated representatives of the Authority to participate in construction meetings during the construction of the Proposed Project and to reasonably approve proposed finishes, colors, fixtures, and like matters.

16. The DDA will contain such other provisions as may be customary in such Authority agreements and such other provisions as the Authority and Linc will determine to be necessary or appropriate to facilitate the Proposed Project.

17. If the negotiations hereunder culminate in a DDA, such agreements become effective only after and if each has been duly executed by Linc, has been duly considered and approved by the Authority Board, and has been duly executed by the Authority. The Authority will reasonably cooperate with Linc to enable Linc to meet its deadlines; however, neither the Authority nor the City is obligated to expedite any reviews, approvals, notices, meetings or other matters, and nothing contained in this Agreement will be co nstrued to limit the Authority’s or the City’s discretion in their activities in connection with the Proposed Project.

18. The Authority reserves final discretion and approval as to a Lease Option and a DDA and all proceedings and decisions in connection therewith. This Agreement is not and will not be construed as a commitment of funds or a grant of development rights or land use entitlements to construct the Proposed Project. By its execution of this Agreement, the Authority is not committing itself or agreeing to perform any acts or activities that require the subsequent independent exercise of discretion by the Authority, the City of Palmdale or any agency or department thereof. Execution of this Agreement by the Parties is merely an agreement to conduct a period of exclusive negotiations and to prepare recommendations to the Authority Board in accordance with the terms hereof, reserving for subsequent Authority action the final discretion and approval regarding the execution of a Lease Option and a DDA and all proceedings and decisions in connection therewith. Any Lease Option or DDA resulting from negotiations pursuant to this Agreement will become effective only if and after consideration and approval by the Authority Board following performance of all legally required procedures. Each Party assumes the risk that, notwithstanding this Agreement and good faith negotiations, the Authority and Linc might not enter into a Lease Option or a DDA due to their failure to agree upon essential terms of a transaction or because of a decision by the Authority Board not to authorize their execution.

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Linc 4th Street Palmdale Page 6

E. Proposal of Plans and Environmental Review

1. Under the DDA, Linc will be required to obtain all Discretionary Approvals (as defined below) for the Proposed Project . Linc, at its sole cost and expense, will submit to the City and the Authority such plans and other information as are necessary to conduct the review for the Proposed Project that the City and the Authority determine must be completed prior to the submittal of the DDA for Authority approval. Such plans and other information will be for the entire Site and Proposed Project and all off -site improvements to be developed by Linc. Linc will be solely responsible for paying any and all costs and expenses associated with its preparation of such plans and other information and with the review and processing of the plans and other information by the City and the Authority.

2. Linc understands that detailed design and development objectives of the Authority for the Proposed Project will be specified in the DDA and actual development will conform to these standards as well as any applicable conditions imposed by the City in connection with the approval of the Proposed Project. All drawings, plans and specifications for the Proposed Project will be subject to the approval of the Authority and City entitlement bodies (“Discretionary Approvals”).

3. The Parties will cooperate to facilitate timely review and revision of Linc’s documents and plans.

4. Under the DDA, Linc, at its sole cost and expense, will be responsible for any compliance with CEQA in connection with the development of the Site and the Proposed Project. Linc will be solely responsible for paying any and all costs and expenses (taking into account the availability of applicable CEQA exemptions) associated with any request by Linc for the Authority to comply with applicable CEQA requirements (including, without limitation, any required Environmental Impact Report and/or other required env ironmental documents) or as otherwise required by the City as part of the City’s standard process. Linc will respond fully and in a timely manner to requests for information from the Authority and any of its consultants. The provision of any funds to the Proposed Project is conditioned on the Authority’s and the City’s determination to proceed with, modify or cancel the Proposed Project based on the results of the subsequent environmental review. Linc must not undertake or unconditionally commit any funds to physical or choice -limiting actions, including but not limited to, property acquisition, demolition, movement, rehabilitation, conversion, repair or construction prior to the Proposed Project receiving environmental clearance.

5. Authority and Linc acknowledge that this Agreement is one of the types of early -stage agreements often entered into before a lead agency decides on the specifics of a project. Authority and Linc further acknowledge that: (a) viewed in light of all the surrounding circumstances, the preliminary nature of this Agreement does not commit City or the Authority as a practical matter to approve the Proposed Project or disposition of the Site; and ( b) the specific parameters of the Proposed Project are unknown at this stage, and therefore, it is premature to conduct a meaningful analysis and environmental review of the Proposed Project under CEQA. Authority and Linc agree that once Linc submits the Proposed Project to City with a formal application, the CEQA environmental review will be performed.

F. Site Investigations and Due Diligence

1. Linc will be solely responsible for determining the scope of and paying for all necessary

ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 7

testing of the Site for hazardous materials pursuant to all applicable laws, statutes, rules and regulations.

Under the DDA, Linc will also be responsible for making the Site usable for the Proposed Project as a result of any site conditions including, without limitation, flood zones, Alquist-Priolo Earthquake Fault Zoning Act, and similar matters, as applicable.

2. Linc agrees to make full disclosure to the Authority of all pertinent information in its possession or under its control concerning Linc, the Site and the Proposed Project. Studies and reports generated by Linc’s testing for hazardous materials will be made available to the Authority and the City without representation or warranty. Each Party will deliver to the other Party to this Agreement all reports within their possession or under their control regarding hazardous materials relating to the Site.

3. During the Term of this Agreement, the Authority will deliver without representation or warranty existing information, studies, reports, site and construction plans or other documents in the Authority’s possession which Linc may reasonably request to facilitate the Proposed Project design. The Authority will endeavor to deliver such material within ten (10) business days of receipt of written request.

4. Upon the Authority’s written request, to the extent in Linc’s possession and without representation or warranty, Linc will cooperate with the Authority by providing preliminary title reports, market studies, soils reports, surveys, phase I environmental report and additional information and data relating to the Site, the Proposed Project, the proposed financing, as the Authority may reasonably request.

Linc retains any ownership rights Linc may have of documents and reports submitted to the Authority.

5. During the Term of this Agreement, Linc will have the right to examine, inspect and investigate the Site to determine whether its condition is acceptable to Linc, which right will be subject to the terms and conditions set forth in a right of entry agreement with the Authority, substantially in the form attached hereto as Exhibit C and incorporated herein by reference (“Right of Entry”). The Authority Executive Director or designee shall have the right to enter into the Right of Entry on behalf of the Authority.

6. From time to time as reasonably requested by the Authority, but not less often than monthly, Linc agrees to make oral and/or written progress reports advising the Authority on all matters related to the development of the Proposed Project, including financial feasibility analyses, construction cost estimates, marketing studies, and similar due diligence matters.

7. The Authority reserves the right, during the Term of this Agreement, to request reasonable additional information and data from Linc which the Authority considers necessary for review and evaluation of the Proposed Project and Linc agrees to provide such information and data in a timely manner. All information regarding Linc’s business practice which may be provided to the Authority, and identified as such to the Authority, will remain confidential to the extent permissible by law including, without limitation, the California Public Records Act. If, at the request of Linc, the Authority is required to defend an action under the California Public Records Act with regard to a request for disclosure of any of the documents or reports rel ated to the Proposed Project, Linc will defend and indemnify the Authority and the City from all costs and expenses of such defense, including reasonable attorney fees and costs arising out of such action.

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Linc 4th Street Palmdale Page 8

G. General Provisions

1. Except as otherwise may be mutually agreed to in writing by the Parties, neither the Authority nor the City will be liable for any costs and expenses associated with the preparation of any reports to be prepared by Linc or the planning or development of the Site pursuant to or arising from this Agreement.

2. The Authority will not be liable for any real estate commissions or brokerage fees related to the Site or the Proposed Project. The Authority and Linc each represents it has not engaged a broker, agent or finder in connection with this transaction. Linc agrees to defend, hold harmless and indemnify the Authority and the City from any claim by any broker, agent or finder retained, or claimed to have been retained, by Linc. The Authority and the City agree to defend, hold harmless and indemnify Linc from any claim by any broker, agent or finder retained, or claimed to have been retained, by the Authority or the City.

3. Linc understands the Authority is entering into this Agreement based on the experience and qualifications of Linc and of the key individuals representing or employed by Linc as of the date of this Agreement. Therefore, Linc will not assign, sell or otherwise transfer any or all of its rights under this Agreement, or interest herein, without the prior written approval of the Authority. Further, no voluntary or involuntary successor in interest of Linc will acquire any rights or powers under this Agreement except as expressly set forth herein. For the reasons cited herein, Linc represents and agrees for itself and any successor in interest that prior to the expiration of the Term, and without the prior written approval of the Authority (which the Authority may withhold in its sole and absolute discretion), there will be no significant change in the management or control of Linc or with respect to the identity of the parties in control of Linc, by any method or means. Linc will promptly notify the Authority of all changes whatsoever in the identity of the parties in control of or exercising the management of Linc, or the degree of control or management, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the Authority if there is any significant change (voluntary or involuntary) in membership, management or control, of Linc, or the persons in control of Linc. For purposes of this paragraph, a significant change will mean any change in the identity of the Manager or President (or similar person or persons having ultimate control over the day to day management of Linc), or the appointment of a receiver or trustee to operate or exercise direct or indirect control over any portion of or interest in Linc. Periodic, routine changes in membership that cumulatively affect less than 50% of the membership of the Linc’s board of directors will not be considered a “significant change .” This Agreement may not be assigned by Linc without the ex press prior written consent of the Authority (which the Authority may withhold in its sole and absolute discretion). If there is an assignment of this Agreement, or change in the management or control of Linc which the Authority does not approve, the Authority may terminate this Agreement and exercise any other rights of the Authority.

4. The entities comprising the partnership and the general partners, the individuals serving as officers and directors of those entities and the form of the limited partnership agreement(s) will be subject to the Authority’s reasonable approval.

5. The Lease Option and DDA will be subject to the approval of the Authority Board. The Authority and Linc expressly acknowledge and agree they do not intend, by their execution of this

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Linc 4th Street Palmdale Page 9

Agreement, to benefit any persons or entities not signatory to this Agreement, including, without limitation, any brokers representing the Parties to this transaction. No person or entity not a signatory to this Agreement will have any rights or causes of action against any of the Parties hereto arising out of or due to such Party’s entry into this Agreement.

6. If, upon the expiration of the Term of this Agreement, the Parties have not each approved and executed a DDA, then this Agreement will automatically terminate.

7. Either Party may terminate this Agreement prior to the expiration of the Term if the other Party fails to negotiate in good faith. The Party seeking to terminate this Agreement will first provide written notice to the other Party, stating the facts on which the Party seeking to terminate is basing its contention that the other Party has failed to negotiate in good faith, and providing a reasonable time, but not less than ten (10) calendar days, to correct the matter.

8. In the event of an uncured default under this Agreement, the sole remedy of the non - defaulting Party will be to terminate this Agreement. Following such termination, no Party will have any further rights, remedies or obligations under this Agreement except those which survive termination. No Party will have any liability to the other for monetary damages or specific performance for the breach of this Agreement, or failure to reach agreement on a Lease Option or a DDA, and each Party hereby waives and releases any such rights or claims it may otherwise have at law or at equity.

9. Upon the expiration or any termination of this Agreement, Linc will have no further rights regarding the subject matter of this Agreement or all or any part of the Site and the Authority will be free to negotiate with any other persons or entities with regard to all or any part of the Site.

10. Any notice personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), will be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return-receipt requested will be deemed received on the date of receipt thereof.

If to the Authority:

The Housing Authority of the City of Palmdale
38250 N. Sierra Hwy
Palmdale, CA 93550
Attn: Executive Director

With a copy to:

Kane, Ballmer & Berkman
515 S. Figueroa St., Suite 780
Los Angeles, California 90071
Attn: Susan Apy

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Linc 4th Street Palmdale Page 10

If to Linc:

Linc 4th Street Palmdale, LP
c/o Linc Housing Corporation
3590 Elm Avenue
Long Beach, CA 90807
Attention: President

With a copy to:

Gubb & Barshay LLP
235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Attention: Henry Loh II

11. No member, official, or employee of the Authority or the City will have any personal interest, direct or indirect, in this Agreement, nor will any such member, official or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is, directly or indirectly, interested. Linc warrants that it has not paid or given, and will not pay or give to, directly or indirectly, any Authority or City employee or official any money or other consideration at all, whether or not connected in any way with the subject matter of this Agreement. Further, Linc warrants that it has no knowledge of any financial interest of any Authority or City employee or official in Linc, directly or indirectly, or in any person or entity affiliated with Linc, or in any transaction in which Linc has been involved. During this Agreement’s Term, Linc will inform the Authority about any possible conflict of interest th at may arise as a result of any change in circumstances.

12. This Agreement will not obligate any Party to enter into any particular agreement. The Parties do not intend this Agreement to be a purchase agreement, ground lease, license, option or similar contract. Nor do the Parties intend to be bound in any way by this Agreement except during the Term of this Agreement and then only as expressly set forth herein. By execution of this Agreement, the Authority is not committing itself to or agreeing to undertake acquisition, disposition, or exercise of control over any portion of the Site nor is Linc committing itself to undertake the acquisition of any portion of the Site or the development, financing, or construction of the Proposed Project.

13. This Agreement may be executed in counterparts, each of which when so executed will be deemed an original, and all of which, when taken together, will constitute but one and the same instrument.

14. This Agreement represents the entire agreement of the Parties hereto and integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements, oral or written, between the Parties with respect to development of the Site.

15. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of the Parties. Except as otherwise expressly provided

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in this Agreement, any failure or delay by any Party in asserting any of its rights or remedies as to any default will not operate as a waiver of said default or of any rights or remedies in connection therewith or of any subsequent default or any rights or remedies in connection therewith, or deprive such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

16. This Agreement and the legal relations between the Parties will be governed by, interpreted under, construed and enforced in accordance with, the internal laws of the State of California without reference to the rules governing the conflict of laws. This Agreement is made and entered into in the County of Los Angeles, California, and any legal actions or proceedings arising from or related to this Agreement will be brought in the County of Los Angeles.

17. The Authority and Linc in no way intend for this Agreement to give rise to or create any relationship of partnership, joint venture, or any other form of association of any kind or nature between them.

18. This Agreement is in all respects intended by each Party hereto to be deemed and construed to have been jointly prepared by the Parties and the Parties hereby expressly agree that any uncertainty or ambiguity existing herein will not be interpreted against either of them. Except as expressly limited by this paragraph, all of the applicable rules of interpretation of contracts will govern the interpretation of any uncertainty or ambiguity of this Agreement.

19. The headings and captions of the various sections and paragraphs of this Agreement have been inserted only for the purpose of convenience and are not a part of this Agreement and will not be deemed in any manner to modify, explain, expand or restrict any of the provisions of this Agreement.

20. Every provision of this Agreement is intended to be severable. If any provision of this Agreement or the application of any provision hereof to any Party or circumstance is declared to be illegal, invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction, such invalidity will not affect the other terms and provisions hereof or the application of the provision in question to any other Party or circumstance, all of which will continue in full force and effect.

21. Linc warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement.

22. No member, official, officer, or employee of a Party to this Agreement will be personally liable to any other Party to this Agreement, or any successor in interest to such Party, in the event of any default or breach or for any amount which may become due to such Party or to its successor, or on any obligations under the terms of this Agreement.

23. Each Party to this Agreement covenants and agrees that it will not discriminate against any employees or applicants for employment because of race, color, religion, creed, national origin, ancestry, sex, gender/gender-identity, sexual orientation, age, disability, medical condition, or marital status.

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24. Linc hereby consents to use by the Authority and City of images of the Proposed Project, its models, plans and other graphical representations of the Proposed Project and its various elements (“Proposed Project Images”) in connection with marketing, public relations, and special events, websites, presentations, and other uses required by the Authority and/or City in connection with the Proposed Project. Such right to use the Proposed Project Images will not be assignable by the Authority or City to any other party (including, without limitation, any private party) without Linc’s prior written consent. Use by the Authority and the City of Proposed Project Images, Linc’s name or the names of their affiliates will be subject to prior approval, which will not be unreasonably withheld or delayed.

For any Proposed Project Images provided to the Authority or the City by Linc, Linc will use reasonable efforts to obtain any rights and/or consents from any third parties necessary to provide these Proposed Project Image use rights.

IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first written above.
“AUTHORITY”

THE HOUSING AUTHORITY OF THE CITY OF

PALMDALE
By: ________________________________
Ronda Perez
Executive Director
ATTEST:

By: ________________________________
Rochelle Scott
Authority Secretary
APPROVED AS TO FORM:

By: ________________________________
William P. Curley, III
Authority Attorney

KANE, BALLMER & BERKMAN
By: ________________________________
Susan Apy
Authority Special Counsel
“LINC”
LINC 4TH STREET PALMDALE, LP,
a California limited partnership
By: Linc 4th Street Palmdale, LLC,
a California limited liability company,
its general partner
By: Linc Housing Corporation,
a California nonprofit public benefit
corporation, its sole manager
By:

Cecilia Ngo,
Senior Vice President of
Housing Development
ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 1
Exhibit A – Site Map

EXHIBIT A

Site Map

[behind this page]

ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 1
Exhibit B – Conceptual Site Plan

EXHIBIT B
Conceptual Site Plan
[behind this page]
1 BUILDING 'B'
-3 STORY APARTMENT -

BUILDING 'C'
-3 STORY APARTMENT
-

BUILDING 'A'
- 3 STORY APARTMENT -
10'-0"
11'-1"
10'-0"
9'-0"
TYP.
19'-0"
TYP.
41'-2"
24'-0"
24'-0"
24'-0"
51'-2 1/2"
2 3
4 5
6 7
8 9
1 2
3 4
5 6
7 8
11 10
12 13
1415161718192021222324
2526272829
30 31
32 33
34 35
36 37
38 39
40 41
42 43
44 45

BUILDING 'D'
-3 STORY APARTMENT -

EV CHARGERS
EVCS
VAN
ONLY

EV CAPABLE

EV CAPABLE

EV READY

EV READY

EV READY

EV READY

EV READY

EV READY

EV READY
29'-0"
33'-11"

EV READY

EV READY

EV READY

POOL PARKING

PLAYGROUND AREA

BBQ AREA

EV READY

EV READY

EV CAPABLE

EV CAPABLE

EV CAPABLE
VICINITY MAP (Not to Scale)
4 t h S t . A p t s .

07.01.2024 P a l m d a l e , C A
31866 Camino Capistrano
San Juan Capistrano, CA
949.230.4537
3590 Elm Ave.

Long Beach, CA 90807
562.684.1120
Linc Housing
Corporation
D33 Design +
Planning

7.530
0 15
SETBACKS:

WEST NORTH SOUTH EAST

SIDE FRONT REAR SIDE
PROVIDED 11'-1" 29'-0" 10'-0" 162'-6" BUILDING COUNT:

BUILDING "A" (3 STORIES) - (12) 1-BDRMS, (6) 2-BDRM, (6) 3-BDRM BUILDING "B" (3 STORIES) - (12) 1-BDRMS, (6) 2-BDRM, (6) 3-BDRM BUILDING "C" (3 STORIES) - (12) 1-BDRMS, (6) 2-BDRM, (6) 3-BDRM BUILDING "D" - (2 STORIES) - COMMUNITY ROOM, (1) 2-BDRM TOTAL BUILDING COUNT: 4 BLDGS
CARPORT COVERED PARKING:

PROVIDED:45 SPACES (5 ADA)
FUTURE EV CHARGER: 2 SPACES (1 ADA)
EV CAPABLE: 5 SPACES
EV READY:12 SPACES

SHEET INDEX
A-0 SITE OVERVIEW
A-1 CONCEPTUAL ENLARGED SITE PLAN
A-2 UNIT PLANS
A-3 BLDG. COMPOSITES
A-4 BLDG. COMPOSITES
A-5 BLDG. COMPOSITES
A-6 ROOF PLAN
A-7 EXTERIOR ELEVATION
A-8 SECTION

E AVE Q
E AVE P-14
4TH ST E
NOTES:

1. PHOTOVOLTAIC PANELS SHALL BE PROVIDED TO
MEET CODE MINIMUM.

2. THIS IS A PUBLICLY FUNDED HOUSING PROJECT

AND MUST COMPLY WITH CALIFORNIA BUILDING
CODE CHAPTER 11B.

LARKING AVE
5TH ST E
6TH ST E

SIERRA HWY
SITE INFORMATION:

ADDRESS:4TH ST E. & E. Q AVE.

PALMDALE, CA 93550
APN:3006-008-921
ACREAGE:4.66 AC (2.20 AC PROGRAMMED)
LOT AREA: 203,366 SF (+/-96,000 SF PROGRAMMED)
PROPOSED UNITS:72 UNITS
PROPOSED DENSITY: 15.4 DU/AC/ 32.7 DU/AC ON PROGRAMMED AREA PROPOSED HEIGHT:35'-5"
BUILDING AREA CONT'D:

BUILDING "B":

FIRST FLOOR:8,140 SF
SECOND FLOOR:7,978 SF
THIRD FLOOR:7,978 SF
TOTAL AREA:24,096 SF
RESIDENTIAL:20,125 SF
CIRCULATION:3,972 SF
BUILDING "C":

FIRST FLOOR:8,140 SF
SECOND FLOOR:7,978 SF
THIRD FLOOR:7,978 SF
TOTAL AREA:24,096 SF
RESIDENTIAL:20,125 SF
CIRCULATION:3,972 SF
BUILDING "D"
COMMUNITY BLDG (OFFICES, COMMUNITY RM./KITCHEN
BIKE PARKING/SERVICE, TECH SPACE): +/- 4,750 SF TOTAL AREA: +/- 4,750 SF
A-1
C o n c e p t u a l E n l a r g e d S i t e P l a n
BUILDING AREA:

BUILDING "A":

FIRST FLOOR:8,140 SF
SECOND FLOOR:7,978 SF
THIRD FLOOR:7,978 SF
TOTAL AREA:24,096 SF
RESIDENTIAL:20,125 SF
CIRCULATION:3,972 SF
UNIT MIX:

PLAN 1: 1BR/1BA (582 Sq. Ft.):36 UNITS
PLAN 2: 2BR/1BA (815 Sq. Ft.): 19 UNITS
PLAN 3: 3BR/2BA (1,102 Sq. Ft.):18 UNITS
TOTAL73 UNITS
OTHER PARKING:

RESERVED FOR POOL:8 (1 ADA) - NOT COUNTED
ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 1
Exhibit C – Form of Right of Entry

EXHIBIT C
Form of Right of Entry
[behind this page]
ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 1
Exhibit C – Right of Entry
V4 12.3.24

RIGHT OF ENTRY
(LINC 4TH STREET PALMDALE)
(A-9121)
THIS RIGHT OF ENTRY AGREEMENT (“Agreement”), dated as of ____________________, 202__ (“Effective Date”), is entered into by and between LINC 4TH STREET PALMDALE, LP, a California limited partnership (“ Linc”), and the HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body, corporate and politic (“Authority”). Linc and the Authority are referred to herein individually as a “ Party” and collectively as the “Parties”.

RECITALS
A. The Authority holds fee title to certain real property hereinafter defined as the “Site” and Linc desires to lease the Site from the Authority for the proposed development and operation of approximately 73 units of affordable rental housing (the “Proposed Project”).

B. The Authority and Linc have entered into an Exclusive Negotiation Agreement dated as of December 18 , 202 4 (“ENA”) to negotiate, among other things, the terms of the Authority’s lease of the Site to Linc.

C. The Authority and Linc desire that Linc have an opportunity to conduct due diligence on the Site, which may include performing physical tests , to determine the condition of the Site with regard to the Proposed Project. The term “Linc’s Representatives” shall mean and include Linc’s agents, contractors, licensees, employees, and invitees.

NOW THEREFORE, the Parties agree as follows:

1. Parties to the Agreement.
(a) The Authority is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Housing Authorities Law of the State of California, Section 34200, et seq. of the California Health and Safety Code. The principal office of the Authority is located at 38250 N. Sierra Hwy, Palmdale, CA 93550, Attn: Executive Director, or such other location of which notice is given pursuant to this Agreement. “Authority” as used in this Agreement includes the Authority and any assignee of or successor to its rights, powers and responsibilities.
(b) The principal office of Linc is located at Linc 4th Street Palmdale, LP , c/o Linc Housing Corporation, 3590 Elm Avenue, Long Beach, CA 90807 Attention: Cecilia Ngo, Senior Vice President of Housing Development, with a copy to Gubb & Barshay LLP, 235 Montgomery Street, Suite 1110, San Francisco, CA 94104, Attention: Henry Loh II, or such other location of which notice is given pursuant to this Agreement.

ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 2
Exhibit C – Right of Entry

V4 12.3.24

2. Description of Site.

The Authority is the owner of certain real property comprised of approximately 4.66 acres which is generally located on the northeast corner of Avenue Q and 4th Street East in Palmdale, California, which is a portion of APN 3006-008-921, and is illustrated by the Site Map in Exhibit A, which is attached to this Agreement and hereby incorporated by reference (the “Site”).

3. Grant of Right of Entry.
(a) Subject to and conditioned upon the terms and conditions of this Agreement , the Authority grants to Linc and its authorized agents a non-exclusive right of entry (the “Right of Entry”) to perform the following acts on the Site: (1) conduct any reasonable, due diligence with respect to the Property, including but not limited to: (x) reviewing plans, specifications, permits, approvals, reports, leases, contracts, files and records relating to the ownership, construction, development, financing, permitting and marketing of the Property; and (y) performing invasive testing, surveys and inspections with respect to the environmental and physical condition of the Property, (2) (obtain soil samples and make surveys and tests necessary to determine the suitability of the Site for the development of the Proposed Project; and (3) conduct reasonable investigations on and beneath the Site and all improvements thereon to determine the presence of Hazardous Materials. As used herein, the phrase “ Hazardous Materials” means any substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any governmental requirements is defined as “hazardous” or harmful to the environment. (b) Linc and Linc’s Representatives may not use the Site for any other purpose or business without obtaining the Authority’s prior written consent.

4. Term.

The Right of Entry granted herein shall commence on the Effective D ate and shall automatically expire together with this Agreement , without need for further notice of any kind, upon the expiration or earlier termination of the ENA , unless otherwise mutually extended beforehand by the Parties in writing or earlier terminated in accordance with its terms (the “Term”).

5. Compliance With Laws.

Linc, at its expense, shall comply with all applicable federal, state , and local laws, ordinances, regulations, rules, and orders with respect to the Site. Linc and Linc’s Representatives shall not permit to be placed upon the Site any gasoline or any hazardous, toxic or explosive material, waste or substance unless such items are used in the ordinary course of Linc’s and Linc’s Representatives’ permitted activities under the Right of Entry. The term “hazardous” shall include any substance, material, waste pollutant, contaminant, or matter now or hereafter regulated by any environmental law, rule or regulation. Linc and Linc’s Representatives shall conduct all of its operations on the Site in connection with this Agreement at Linc’s sole cost and expense.

ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 3
Exhibit C – Right of Entry
V4 12.3.24

6. Reports and Studies.

In consideration of the Authority’s granting of the Right of Entry , Linc shall promptly provide the Authority with a copy of all reports and test results arising from the Right of Entry upon written request from the Authority, without creating any liability for Linc or the preparer of such reports . Notwithstanding the aforementioned, Linc retains all ownership rights of all documents and reports submitted to the Authority pursuant to this Agreement.

7. Right of Entry Nonassignable.

This Right of Entry is personal to Linc and shall not be assigned. Any attempt to assign the Right of Entry shall be void ab initio and shall be of no force or effect.

8. Relationship Between the Authority and Linc
The Authority is granting the Right of Entry to Linc as an accommodation. Nothing contained in this Agreement shall be deemed or construed to create the relationship of principal and agent or of owner and contractor or of partnership or of joint venture or of any association between the Authority and Linc other than that of licensor and licensee. No legal title or leasehold interest in the Site is created or vested in Linc by the grant of the Right of Entry.

9. Nonexclusive Right of Entry.

The Right of Entry is nonexclusive. Nothing contained herein shall be construed to restrict or prevent the entry onto and use of the Site during the Term of this Agreement by the Authority, the City of Palmdale, or their agents, consultants, assigns and/or their other licensees.

10. Surrender.

On or before the expiration or termination date for this Agreement, Linc shall remove all of its and Linc’s Representatives’ personal property from the Site and shall fill any excavations made by Linc and/or Linc’s Representatives and shall surrender possession of the Site to the Authority in its original condition, normal wear and tear excepted.

11. Removal of Liens.

Under no circumstance whatsoever shall any lien, including any mechanic’s lien, stop notice, materialmen’s lien, or any lien for goods, labor, material, services or work delivered or performed on the Site, attach to or encumber the Site. If any mechanic’s l ien, stop notice, materialmen’s lien, or any other lien is filed for work done or claimed to have been done or for materials or services furnished or claimed to have been furnished, arising from activities conducted by Linc and/or Linc’s Representatives on the Site under this Right of Entry then such lien shall be discharged by Linc at its sole cost and expense in a timely manner no later than ninety (90) days thereafter whether by payment, release, or posting of a bond or other similar assurance. In the event Linc fails to discharge any lien within the aforementioned timeframe, the Authority may, in its sole and complete discretion, bond or discharge the same by paying the amount claimed to be ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 4
Exhibit C – Right of Entry

V4 12.3.24
due, and Linc shall reimburse the Authority for all sums paid by the Authority under this Section, together with reasonable attorneys’ fees and costs, plus interest on those sums, fees, and costs from the date of payment at the highest rate allowed by law.

12. Release and Indemnity.

Linc, as a material part of the consideration to be rendered to the Authority for the granting of the Right of Entry, for itself and its successors and assigns, hereby agrees:
(a) to indemnify, defend, protect and hold the Authority, the City of Palmdale, and their respective officers, employees, attorneys, agents, insurers and volunteers ( collectively, the “Indemnified Parties”), free and harmless from any and all loss, liability, claims, damages and expenses (including, but not limited to, reasonable attorneys’ fees and costs) arising from the exercise of the Right of Entry by Linc and/or Linc’s Representatives, including, but not limited to:
(1) any and all risks of or exposure to any loss or liability arising from activities conducted by Linc and/or Linc’s Representatives on the Site arising from activities conducted by Linc and/or Linc’s Representatives under the Right of Entry and this Agreement;

(2) any and all claims arising from or relating to the transportation, storage, handling or use of any material taken from the Site pursuant to the Right of Entry, or from any substance, known or unknown, emanating or derived therefrom; and

(3) any and all claims for damage to the Site, any improvements thereon, or to the property or person of any third party, alleged to have been caused by, or in any way connected with activities conducted by Linc and/or Linc’s Representatives with respect to the physical properties of the Site by Linc and/or Linc’s Representatives or any material taken from the Site by Linc and/or Linc’s Representatives pursuant to the Right of Entry.

The foregoing undertaking of indemnity shall apply regardless of whether the loss, liability, claims, damages and expenses were in part contributed to by the acts or omissions of any Indemnified Party; provided, however, that nothing herein shall be interp reted as obligating Linc to indemnify an Indemnified Party for an Inde mnified Party’s gross negligence or willful misconduct. Such undertaking of indemnity shall survive the termination of this Agreement for any reason. Notwithstanding the foregoing, Linc shall have no obligation to indemnify an Indemnified Party for loss, liability, claims, damages and expenses arising from Linc’s or Linc’s Representatives’ mere discovery of hazardous substances already present on the Site prior to the commencement of this Agreement, so long as neither Linc nor any of Linc’s Representatives has contributed to the placement, release or migration of such pre-existing hazardous substances. (b) Except to the extent of an Indemnified Party’s gross negligence or willful misconduct, to fully and finally release the Indemnified Parties from any and all claims, demands, actions, or suits of any kind or nature arising out of Linc’s and/or Linc’s Representatives’ activities on the ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 5
Exhibit C – Right of Entry

V4 12.3.24
Site during the Term of this Agreement, including, but not limited to, rights or claims for implied contribution or indemnity, or any claim or liability based or asserted pursuant to any law or ordinance which seeks to impose any liability or damage whatsoever upon any Indemnified Party arising from the execution and/or performance of this Agreement, or from any of its terms.

In connection with the foregoing release, Linc hereby acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code, section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE

RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY.

Linc, being aware of such code section, agrees to expressly waive any rights it may have thereunder, as well as under any other statute or common law principles of similar effect. ________ Initials of Linc’s authorized signatory

13. Insurance.

During the Term, Linc shall maintain insurance coverages and policies in the amounts and otherwise comply with all of the terms and conditions as required in Article 4 of that certain Predevelopment Loan Agreement entered into by and between Authority and Linc dated as of December ___, 2024 (“Loan Agreement”). Article 4 of the Loan Agreement and all of the terms and conditions therein are incorporated herein by reference. Linc agrees to submit endorsements and binders or certificates evidencing such insura nce to Authority prior to, and as a condition of, first entering onto the Site pursuant to this Agreement.

14. Authority’s Authorized Representative.

Unless otherwise specified or the context requires otherwise, all references to the Authority in this Agreement and its attachments shall mean the Authority’s Executive Director or any officer or employee of the Authority to whom the Executive Director or the Board of the Authority delegates authority to perform, carry out and/or enforce this Agreement . Unless otherwise specified or the context requires otherwise, all references to the Authority’s Executive Director shall mean the Executive Director or his or her designee.

ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 6
Exhibit C – Right of Entry
V4 12.3.24

15. Notices, Demands And Communications Between The Parties.

Formal notices, demands and communications between the Authority and Linc shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Authority and Linc. Such written notices, demands and communications may be sent in the same manner to such other addresses as either Party may from time to time designate by mail. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), sh all be deemed received on the documented date of receipt by the recipient; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof.

16. Conflict of Interest.

To the extent prohibited by law, no member, official or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. Linc warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement.

17. Non-liability of Officials and Employees.
(a) No member, official or employee of the Authority or the City of Palmdale shall be personally liable to Linc or any of the Linc’s Representatives, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to Linc or any of the Linc’s Representatives or on any obligations under the terms of this Agreement. (b) No member, official or employee of Linc shall be personally liable to the Authority, or any successor in interest, in the event of any default or breach by Linc or for any amount which may become due to the Authority or its successor or on any obligations under the terms of this Agreement. This release shall not apply in the event of fraud, waste or intentional damage by Linc or any agent, member, official, or employee of Linc.

18. Interpretation of Agreement; Terminology; Application of Law.

This Agreement has been negotiated at arm’s length and between persons sophisticated and knowledgeable in the matters addressed herein. In addition, each Party has been given the opportunity to consult with experienced and knowledgeable legal counsel. Accordingly, any rule of law (including Civil Code section 1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the Party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effectuate the purpose and intent of the Parties to this Agreement. This Agreement shall be construed and ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 7
Exhibit C – Right of Entry
V4 12.3.24
enforced in accordance with the internal laws of California and not the principles regarding conflict of laws, except to the extent that Federal law preempts State law.

When the context so requires when used in this Agreement, the masculine gender shall be deemed to include the feminine and neuter gender and the neuter gender shall be deemed to include the masculine and feminine gender. When the context so requires when used in this Agreement, the singular shall be deemed to include the plural. The paragraph and section headings have been used for convenience only, and shall not be used in the interpretation hereof.

19. Waivers.

A waiver by the Authority or Linc of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. All waivers must be in writing and signed by the appropriate representatives of the Authority or Linc, as applicable.

20. Time of the Essence.

Time is of the essence in this Agreement and each and all of its provisions in which performance is a factor.

21. Attorneys’ Fees and Costs.

If any action or proceeding is brought by any Party against any other Party under this Agreement, whether for interpretation, enforcement or otherwise, the prevailing Party shall be entitled to recover all costs and expenses, including the reasonable fees of its attorney and any expert witnesses in such action or proceeding. This provision shall also apply to any post-judgment action by either Party, including without limitation efforts to enforce a judgment.

22. Severability.

Any provision of this Agreement that shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other provisions shall remain in full force and effect.

23. Entire Understanding Of The Parties; Amendments.

This Agreement, including any document or instrument incorporated herein by reference, contains a complete and final expression of the agreement between the Authority and Linc relating to this Agreement , and there are no promises, representations, agreements, warranties, or inducements either express or implied other than as are set forth in this Agreement. Any and all previous discussions or agreements between the Authority and Linc with respect to this Agreement, whether oral or written, are superseded b y this Agreement. No amendment, change, or addition to, or waiver of termination of, this Agreement or any part hereof shall be valid unless in writing and signed by the Authority and Linc.

ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 8
Exhibit C – Right of Entry
V4 12.3.24

24. No Third Party Beneficiaries.

The Parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of the Authority, the City of Palmdale and Linc, and not for the benefit, directly or indirectly, of any other person or entity, except as otherwise expressly provided herein.

25. Further Assurances.

Each of the Parties hereto shall execute and deliver any and all additional papers, documents and other assurances, and shall do any and all necessary acts and things in connection with the performance of their obligations hereunder and to carry out the intent and agre ements of the Parties.

26. Execution in Counterparts.

This Agreement may be executed in several counterparts and all such executed counterparts shall constitute one agreement, binding on all of the Parties hereto, notwithstanding that all of the Parties hereto are not signatories to the original or to the same counterpart. This Agreement shall not be binding unless and until all Parties hereto have executed this Agreement.

27. Authority to Sign.

The individual executing this Agreement on behalf of Linc hereby represents that he has full authority to do so and to bind Linc to perform pursuant to the terms and conditions of this Agreement.

28. Prior Litigation. Reference is hereby made to the following court case: Los Angeles County Superior Court, COMMUNITY DEVELOPMENT ASSOCIATES, a California corporation; et al. vs. THE HOUSING AUTHORITY OF THE CITY OF PALMDALE CALIFORNIA, et al. and a Cross-Complaint THE HOUSING AUTHORITY OF THE CITY OF PALMDALE vs.

PALMDALE TRANSIT VILLAGE TOWNHOMES, LLC, et al , Case No. 18STCV06968 (“Case”).

In accordance with that certain Memorandum of Settlement Agreement and Mutual Release recorded against the Site on April 18, 2023 as Document No. 2023-0246869 (“Release”) in connection with the settlement of the Case, Linc agrees that Linc accepts the Site in an “AS-IS, WHERE-IS” condition and releases ALL PLAINTIFFS, Palmdale TOD Apartments, L.P., and the HCD Released Parties from any and all conditions, debts, liens, defects, costs, losses, expenses, delays, attorneys fees, causes of action, compensation, indemnities, claims, damages, and demands of whatever nature, whether based on contract, tort, statute, regulation or any other legal or equitable theory of recovery, which they now have or which may hereinafter accrue on account of or in any way growing out of any and all known and unknown, foreseen or unforeseen damages and/or consequences related in any way to the Site, the STANDARD AGREEMENT, or any amendment to the STANDARD AGREEMENT, including without limitation, any obligations regarding the Palmdale Transit Village, the On-Site Improvements and the Off-Site Improvements (as these terms are defined in the Complaint filed November 29, 2018 in connection with the Case ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 9
Exhibit C – Right of Entry
V4 12.3.24
and the Release).

Linc agrees that Linc shall use its best efforts to inform Linc’s contractors, sub-contractors, consultants and advisors who perform any work at the Site of the existence of the Release and its terms and conditions which release the prior Developer as set forth in the Release. Failure to provide such information shall not entitle the Authority to claim a default under this Agreement which would allow Authority to terminate this Agreement or the Right of Entry granted herein.

IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first written above.
“AUTHORITY”

THE HOUSING AUTHORITY OF THE CITY OF

PALMDALE
By: ________________________________
Ronda Perez
Executive Director
ATTEST:

By: ________________________________
Roxanne Faber
Authority Secretary
APPROVED AS TO FORM:

By: ________________________________
William P. Curley, III
Authority Attorney

KANE, BALLMER & BERKMAN
By: ________________________________
Susan Apy, Authority Special Counsel
“LINC”
LINC 4TH STREET PALMDALE, LP,
a California limited partnership
By: Linc 4th Street Palmdale, LLC,
a California limited liability company,
its general partner
By: Linc Housing Corporation,
a California nonprofit public benefit
corporation, its sole manager
By:

Cecilia Ngo,
Senior Vice President of
Housing Development
ENA Agreement No. A-9121
Linc 4th Street Palmdale Page 10
Exhibit A – Site Map to Exhibit C – Right of Entry
V4 12.3.24

EXHIBIT A
Site Map
[behind this page]

V4 12.3.24

December 18, 2024

LINC 4TH STREET PALMDALE, LP
c/o Linc Housing Corporation
3590 Elm Avenue
Long Beach, CA 90807
Attention: Cecilia Ngo, Senior Vice President of Housing Development

Re: Loan Commitment in the amount of up to $9,375,000
Approx 4.66 acres located in the northeast corner of Avenue Q and 4th Street East Palmdale, California
A portion of APN 3006-008-921

Dear Ms Ngo:

On behalf of the Housing Authority of the City of Palmdale (“Housing Authority”), I am pleased to inform you that the Housing Authority has approved a commitment to make a loan in the approximate amount of up to $9,375,000 (consisting of up to $2,000,000 for land, and a $7,375,000 development loan) (the “Loan”) to LINC 4TH STREET PALMDALE, LP , a California limited partnership, referred to as the “Borrower”, for the development of affordable rental housing plus one manager’s unit and ancillary facilities (the “Proposed Project ”) on the site generally described as approximately 4.66 acres generally located on the northeast corner of Avenue Q and 4th Street East in Palmdale, California, which is a portion of APN 3006-008-921 (“Site”). As noted below, this commitment is contingent on the Proposed Project being awarded Low Income Housing Tax Credits and is subject to the terms and conditions set forth in this letter.

Unless otherwise agreed to in writing by the Housing Authority in its sole discretion, the Housing Authority’s approval of this financing commitment is subject to and contingent upon the following terms and conditions. In addition, the Loan shall be subject to standard underwriting requirements in effect at the time the Loan is made.

This commitment will expire at 5 p.m. on December 31, 2025, subject to extension and termination provisions expressly provided herein (“Term”). Subject to the approval of the Housing Authority Executive Director or designee, the Term may be extended for two periods not to exceed an additional ninety (90) calendar days each upon Linc’s request, for a total extended period of one hundred eighty (180) calendar days. Any such extension shall be granted, if at all, in the sole and Letter of Commitment Resolution No. HA 2024-007
Linc 4th Street Palmdale Page 2
December 18, 2024

absolute discretion of the Housing Authority Executive Director or designee and upon such terms and conditions as the Executive Director or designee deems appropriate.

TERMS AND CONDITIONS

1. The Proposed Project will consist of Borrower’s ground lease of the Site and the new construction of approximately 73 units of rental housing. At least thirty percent (30%) of the affordable units must be occupied by and restricted to extremely low income households (30% AMI) at rents that do not exceed the applicable affordable rent specified in Health & Safety Code section 50053 for extremely low income households . The remaining units (with the exception of one management unit) must be occupied by and restricted to lower income households pursuant to the California Tax Credit Allocation Committee (60% of Los Angeles County area median income or lower), at affordable rents provided that rents for these units shall not exceed the affordable rent for a household at 59% AMI under Health & Safety Code section 50053. All units shall be restricted for a minimum of fifty-five (55) years, but no less than the term of the ground lease.

2. This loan commitment is contingent upon the Housing Authority receiving evidence reasonably acceptable to it that Borrower has or will obtain adequate and appropriate financing for the Project, which may include a reservation of Low Income Housing Tax Credits from the California Tax Credit Allocation Committee (“CTCAC”).

3. The Housing Authority Loan will be an amount equal to the aggregate of (a) the lesser of (I) appraised value of the land and (II) $2,000,000; and (b) a development loan in the original principal amount of $7,375,000, each with a term of 55 years or such longer period as mutually agreed upon and simple interest at 3% per annum (or such higher rate on the land portion of the loan if requested by Linc) from the date of disbursal. Payments on the Housing Authority Loan shall be payable exclusively from the Housing Authority’s pro rata share (as a percentage of public financing as mutually agreed to by the Housing Authority and Linc) of 50% (subject to adjustment proposed by Borrower and approved by the Housing Authority) of annual residual receipts, net sale proceeds and net refinancing proceeds, or upon such other repayment terms mutually agreed to by the Housing Authority and Linc. The terms of the Residual Receipts obligation, including identification of all of Borrower’s obligations having a priority over the Housing Authority’s right to receive Residual Receipts, will be set forth in the promissory note (s) to be attached to the hereinafter defined DDA.

4. This commitment is based on Borrower’s current estimates of total development costs , including demolition costs. Borrower wi ll be responsible, without cost to the Housing Authority, for any additional sources of funds that may be needed to complete the Proposed Project. Borrower agrees that the Housing Authority Loan will be reduced to the extent the Letter of Commitment Resolution No. HA 2024-007
Linc 4th Street Palmdale Page 3
December 18, 2024
Proposed Project is eligible for additional funding not needed to pay Proposed Project costs and to the extent that, upon completion, there are cost savings Proposed Project costs (all as to be set forth in more detail in the DDA).

5. Borrower will ground lease the Site for a term of 55 years or such longer period as mutually agreed upon by Lessor and Lessee and required by the tax credit investor, upon terms and conditions approved by the Housing Authority.

6. This letter is not intended to describe all of the requirements, terms, conditions and documents necessary for the Housing Authority Loan. A Disposition and Development Agreement, including the form of promissory note, deed of trust and related documents, (together, the “DDA”) will be prepared, and is subject to execution by the Borrower prior to its consideration by the governing body of the Housing Authority. The final form of the DDA approved by Borrower shall be subject to the discretionary approval of Housing Authority and shall include all provisions and attachments customarily included in Housing Authority disposition and development agreements.

7. The Borrower must comply with all applicable requirements relating to each funding source. The DDA will set forth all conditions precedent to the disbursement of the Housing Authority Loan.

8. The Proposed Project must be constructed in accordance with all applicable laws, rules and regulations.

9. The Borrower must comply with State Prevailing Wage and/or Federal Davis -Bacon requirements, as applicable.

10. Borrower must prepare and submit a “sources and uses ” Proposed Project budget for approval by the Housing Authority as an attachment to the DDA. Line item estimates of the uses of funds must be supported by such documentation, including appraisals and construction cost estimates, as may reasonably be required by the Housing Authority Executive Director. The final sources and uses of funds for the Proposed Project must be consistent with the approved Proposed Project budget except as otherwise approved by the Housing Authority Executive Director. The Housing Authority Loan will be disbursed to pay or reimburse Borrower for payment of costs in the approved Proposed Project budget in accordance with disbursement procedures and requirements to be included in the DDA.

11. The Borrower must submit an audited cost certification following completion of construction and after the completion of construction must submit for each year during the term of the Housing Authority Loan an annual audited income and expense statement, balance sheet and statement of all changes in financial position, signed by an authorized officer of Borrower.

Letter of Commitment Resolution No. HA 2024-007
Linc 4th Street Palmdale Page 4
December 18, 2024

12. The Housing Authority Loan will be evidenced by a limited -recourse promissory note(s) (subject to customary non-recourse carve-outs), and will be secured by a leasehold deed of trust and other customary loan documents, which will be subordinated to senior construction and permanent loan deeds of trust, provided the senior lender(s) agree to provide the Housing Authority with reasonable notice and cure rights that protect the Housing Authority’s investment in the event of a default by Borrower.

13. The Housing Authority Loan promissory note (s) will include definitions of “residual receipts” and related terms, consistent with other Housing Authority residual receipts loan documents.

14. The Housing Authority Loan documents will contain mutually agreeable provisions prohibiting certain direct or indirect transfers of Borrower’s interests in the Site, the Proposed Project and/or the DDA without the reasonable prior written consent of the Housing Authority Executive Director.

15. The Housing Authority Loan documents will describe events of default which will permit the Housing Authority, after notice and opportunity to cure, to pursue appropriate remedies, including acceleration of the Housing Authority Loan. These events may inclu de, but are not limited to, failure to complete the development of the Proposed Project as required by the DDA, failure to comply with use restrictions, prohibited transfers of inter ests in the Borrower or in the Proposed Project without the reasonable pri or consent of the Housing Authority, failure to comply with terms and conditions of the DDA, note or deed of trust, and similar occurrences.

16. At the closing, the Housing Authority will receive an ALTA lender’s policy of title insurance, showing the Housing Authority deed of trust junior in priority only to deeds of trust to which the Housing Authority has agreed to subordinate its interests.

17. The Proposed Project must have received all discretionary approvals and all land use entitlements necessary for its development Proposed Project and must pay all City fees in connection therewith and must obtain all discretionary approvals for the Proposed Project.

Such entitlements, approvals and permits must be consistent with the Proposed Project as approved by the Housing Authority.

18. The Borrower must prepare and submit a scope of development for approval by the Housing Authority as an attachment to the DDA. The scope of development must be consistent with the Proposed Project description contained in the Exclusive Negotiation Agreement dated on or about the date hereof by and between the Housing Authority and Borrower. The Housing Authority Executive Director will have the right to review and approve all design drawings and plans for the Proposed Project . All plans for the construction of the Proposed Project will be subject to applicable City of Palmdale design review approval procedures, and must be consistent with and a logical evolution of the Letter of Commitment Resolution No. HA 2024-007
Linc 4th Street Palmdale Page 5
December 18, 2024

scope of development, except as otherwise approved by the Housing Authority Executive Director. The Housing Authority’s financial assistance to the Proposed Project will be predicated on the right of designated representatives of the Housing Authority to participate in construction meetings during the construction of the Proposed Project and to approve proposed finishes, colors, fixtures, and like matters.

19. The Proposed Project and the approval of the DDA will be subject to compliance with all applicable environmental requirements (e.g., CEQA or NEPA). The Borrower, at its sole cost and expense, will be responsible for compliance with CEQA in connection with the development of the Property and the Proposed Project . The Borrower will be solely responsible for paying any and all costs and expenses (taking into account the availability of applicable CEQA exemptions) associated with the Housing Authority’s compliance with applicable CEQA requirements (including, without limitation, any required Environmental Impact Report and/or other required environmental documents). The Borrower will respond fully and in a timely manner to requests for information from the Housi ng Authority and any of its consultants. The provision of any funds to the Proposed Project is conditioned on the Housing Authority’s and the City’s determination to proceed with, modify or cancel the Proposed Project based on the results of the subsequent environmental review. Developer must not undertake or unconditionally commit any funds to physical or choice-limiting actions, including property acquisition, demolition, movement, rehabilitation, conversion, repair or construction prior to the Proposed Project receiving environmental clearance.

20. The Borrower, at its sole cost and expense, must comply with the requirements of all relocation laws applicable to the Proposed Project , including, but not limited to, the Uniform Relocation Act and the California Relocation Assistance Act.

21. The Borrower’s general contractor, architect, construction lender, permanent lender, tax credit investor (s), relocation consultant, Davis Bacon wage compliance consultant, if applicable, and other lenders, consultants and service providers, including but not limited to the property manager, will be subject to the reasonable approval of the Housing Authority’s Executive Director. The Housing Authority will also have the right to review and approve any and all contracts and agreements with such entities for t he Proposed Project.

22. The DDA shall provide a schedule of performance providing for the timely satisfaction of all conditions precedent to the closing and the timely commencement and completion of construction, and evidence of financing consistent with the DDA and sufficient to completely finance the development of the Proposed Project.

23. At the closing, the Borrower must execute an Agreement Containing Covenants, restricting for at least 55 years the maximum income of tenants and the maximum rents that may be charged to tenants, which will be recorded in senior position against Borrower’s interest in Letter of Commitment Resolution No. HA 2024-007
Linc 4th Street Palmdale Page 6
December 18, 2024

the Site. The Agreement Containing Covenants will require Housing Authority approvals of the housing management company and the management plans relating to the management and operation of the Proposed Project and will set forth the Borrower’s compliance reporting obligations.

24. The Borrower will cooperate with the Housing Authority by providing preliminary title reports, market studies, soils reports, surveys, phase I environmental report and additional information and data relating to the Site, the Proposed Project, the proposed financing or the Borrower, as the Housing Authority may reasonably request.

25. The Borrower must indemnify and hold the Housing Authority harmless for any costs relating to haz ardous materials affecting the Site. Prior to the closing, Borrower must submit to the Housing Authority a Phase 1 Environmental Site Assessment. Borrower will conduct such additional environmental testing as may be necessary to determine that hazardous materials are not present on the Site, or that any hazardous materials on the Site may be remediated without adversely affecting the feasibility of the Proposed Project. The Borrower must execute an environmental indemnity in favor of the Housing Authority similar to the form of environmental indemnity used in other Housing Authority transactions.

26. Borrower must submit for Housing Authority approval all applicable corporate and partnership or limited liability formation documents, agreements with the tax credit investor, evidence of good standing, and authorizing resolutions.

27. Borrower must obtain and maintain policies of insurance in the form and in the amounts required by the Housing Authority, not including earthquake insurance, naming the Housing Authority as an additional insured or loss payee, as applicable, and meeting the insurance requirements customarily included in Housing Authority disposition and development agreements.

28. Prior to closing of construction financing, the Borrower must obtain and submit evidence of insurance, additional insured and loss payee endorsements, evidence of financing commitments, copies of construction loan documents and such other documentation as required by the DDA.

[remainder of page left intentionally blank]
[signatures on following page]

Letter of Commitment Resolution No. HA 2024-007
Linc 4th Street Palmdale Page 7
December 18, 2024
If you have any questions, please do not hesitate to call Sophia Reyes at 661-267-5164. Please acknowledge your consent to the foregoing terms and conditions by signing and returning a copy of this letter.

Sincerely,
“AUTHORITY”

THE HOUSING AUTHORITY OF THE CITY OF PALMDALE
By: ________________________________
Ronda Perez
Executive Director
ATTEST:

By: ________________________________
Rochelle Scott
Authority Secretary
APPROVED AS TO FORM:

By: ________________________________
William P. Curley, III
Authority Attorney

KANE, BALLMER & BERKMAN
By: ________________________________
Susan Apy
Authority Special Counsel
[remainder of page left intentionally blank]
[signatures on following page]
Letter of Commitment Resolution No. HA 2024-007
Linc 4th Street Palmdale Page 8
December 18, 2024
Linc 4th Street Palmdale, LP, hereby acknowledges and consents to all of the terms and conditions set forth in this letter.

Linc 4th Street Palmdale, LP,
a California limited partnership
By: Linc 4th Street Palmdale, LLC,
a California limited liability company,
its general partner
By: Linc Housing Corporation,
a California nonprofit public benefit corporation,
its sole manager
Date: __________ By:

Cecilia Ngo,
Senior Vice President of Housing Development

1 MINUTES

CITY COUNCIL/SA/HA

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
DECEMBER 4, 2024

www.cityofpalmdale.org

1) CALL MEETING TO ORDER

Mayor Bishop called the meeting to order at 5:11 pm.

Note: All City Council memberships are reflected in their City Council titles.

2) ROLL CALL MAYOR BISHOP, MAYOR PRO TEM LOA, COUNCILMEMBERS OHLSEN, BETTENCOURT, ALARCÓN COMMISSIONERS FRAGA-SAENZ, BETTS

PRESENT: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón, Christina Fraga-Saenz, Dianne Betts.

ABSENT: None.

3) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

Members of Palmdale Vital Intervention and Directional Alternatives (VIDA) led the pledge of allegiance.

Mayor Bishop announced the meeting would be adjourned in memory of former City Manager Jim Purtee.

4) PRESENTATIONS

4.1) Update regarding Certificate in Applied Positive Psychology (CAPP) Program’s Third Cohort.

Deputy City Manager Lopez presented a PowerPoint and discussed a few of the Impact Projects that emerged from the CAPP Program. She also recognized the program participants.

The program participants made a presentation to the Council.

Council spoke in support of the CAPP Program.

5) PUBLIC COMMENTS

CONSENT CALENDAR, APPOINTMENT(S), NEW BUSINESS, AND CLOSED SESSION:

Public Comment: Rodger Soderstedt spoke about mental health and homeless programs.

2 6) HOUSING AUTHORITY CONSENT CALENDAR

6.1) Approve the Housing Authority of the City of Palmdale’s 2023 -24 Annual Report prepared pursuant to California Health & Safety Code §34176.1; and direct staff to post the information on the City’s website.

6.2) Approve the minutes from the previous meeting.

Motion: Approve all items listed under the Housing Authority Consent Calendar.

Moved by Andrea Alarcón, seconded by Christina Fraga-Saenz.

Vote: Motion carried (7-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón, Christina Fraga-Saenz, Dianne Betts.

Mayor Bishop adjourned the Housing Authority at 5:38 pm.

7) CONSENT CALENDAR

7.1) Waive full reading of the Resolution(s) and/or Ordinance(s) to be considered and voted on at this meeting. (This allows for reading the title only in lieu of reciting the entire text).

7.2) Receive and File the Monthly Investment Activity Reports for October 2024.

7.3) Approve Second Amendment to Agreement with The Wellbeing Lab dba Louis Alloro, LLC, to provide four additional one -day Youth Mental Health & Wellbeing Summits and a fourth cohort of the Certificate In Applied Positive Psychology (CAPP) Program, increasing the Agreement by $300,000 for a total not to exceed amount of $745,000 for a term of September 30, 2026.

7.4) Receive and file the Special Tax Annual Report for CFD 2003 -1 (Anaverde), CFD 05 -1 (Trade and Commerce), CFD 16 -1 (Joshua Ranch Water Supply and Maintenance Services), and CFD 2022 -1 (Citywide Maintenance and Services) in accordance with Senate Bill 165, Section 53411 of the California Government Code.

7.5) Approve the minutes from the previous meeting.

Motion: Approve all items listed under the Consent Calendar.

Moved by Andrea Alarcón, seconded by Eric Ohlsen.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

3 8) NEW BUSINESS

8.1) Rotation of Incumbents serving as Mayor and Mayor Pro Tem.

City Attorney Curley presented this item.

Council acknowledged and confirmed Councilmember Richard J. Loa as Mayor and Councilmember Laura Bettencourt as Mayor Pro Tem for the 2025 calendar year.

9) PRESENTATION OF A PLAQUE TO MAYOR BISHOP AND CEREMONIAL

PASSING OF THE GAVEL

City Manager Perez and the Councilmembers presented a plaque to Mayor Bishop and there was a ceremonial passing of the gavel to Mayor Pro Tem Loa.

10) RESOLUTION RECITING ELECTION RESULTS

10.1) Adopt Resolution No. CC 2024 -088, a Resolution of the City Council of the City of Palmdale California, reciting the fact of the General Municipal Election held on November 5, 2024, declaring the result and such other matters as provided by law.

City Clerk Scott presented Resolution No. CC 2024 -088 declaring the election results.

Public Comments: None.

Motion: Adopt Resolution No. CC 2024 -088, a Resolution of the City Council of the City of Palmdale California, reciting the fact of the General Municipal Election held on November 5, 2024, declaring the result and such other matters as provided by law.

Moved by Eric Ohlsen, seconded by Richard J. Loa.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

11) ADMINISTRATION OF OATH OF OFFICE

City Clerk Faber administered the oath of office to Councilmembers Austin Bishop and Richard J. Loa.

12) CITY MANAGER’S REPORT

City Manager Perez announced there would be a Christmas Carol performance at the Palmdale Playhouse, Friday, December 6; a Jolly Holiday event at Marie Kerr Park Amphitheater Saturday, December 7; the Annual Christmas Parade will be held on Palmdale Boulevard on Saturday, December 14; Palmdale Boulevard off ramps will be closed beginning 9 am on Monday, December 9 through 6 am on Monday, December 16; and the City is taking reservations for Santa's Workshop.

4 13) COUNCIL REPORTS, ANNOUNCEMENTS AND REQUESTS FOR FUTURE

AGENDA ITEMS

Mayor Pro Tem Loa commented on the 2024 Election and thanked the voters for coming out to vote. He also spoke about his meeting with Assemblyman Carrillo to address the 5150 hold mental health issue and his conversations with Supervisor Barger and Senator Valladares.

Councilmember Ohlsen attended a ribbon cutting at Yellen Park for the youth soccer teams and the military balls that were held. He also congratulated the elected councilmembers and spoke about Measure PD.

Councilmember Alarcón congratulated Mayor Bishop on his election and thanked him for his year of service as mayor. She also congratulated Mayor Pro Tem Loa on his election. She spoke about the AV Alta ribbon cutting and the upcoming Kicks for Kids event on December 21 at McAdam Park.

Mayor Bishop spoke about attending the soccer field ribbon cutting and the Caltrans North Los Angeles County Safety and Mobility improvement scoping meeting for the 14 freeway.

14) NON-AGENDA PUBLIC COMMENTS:

The following individuals provided public input: Eugene Hernandez commented on the Biden administration; David Harris spoke about the 5150 mental health hold, the tree lighting ceremony, and complimented Mayor Bishop on his service to the public; Ms. Jasmine spoke in opposition to AV Youth Build and requested that the City look into the funding provided to that organization; Rocio Castellanos of LA Care announced the Winter Family Festival on Saturday, December 21 at McAdams Park; Lou Walker, AV NAN, spoke regarding educational challenges in the Antelope Valley; Marsha Furman spoke regarding the election and requested review of the public speaking arrangements on the agenda ; Xavier Flores spoke regarding a breakfast meeting he attended held by LA Care for the Sheriff's Department to discuss immigration enforcement and asked if Council would be holding an educational forum on this topic; Christina Fraga -Saenz announced on November 30 Highland High School and Palmdale High School won their CIF Southern Section; and a veteran (no name) spoke regarding his partnership with AV BOGA and announced an event to be held by Vet Projects on Sunday, December 8.

Councilmember Ohlsen spoke about the Palmdale Knight’s Youth football teams winning their division.

Councilmember Alarcón announced the True Memories Car Club will host a toy drive at the Home Depot on 47th Street East.

Mayor Pro Tem Loa announced that the Antelope Valley Transit Authority (AVTA) will host the 2024 Holiday Drive Thru Grocery and Toy Giveaway on December 21.

He encouraged coordination among organizations that host events.

5 15) ADJOURNMENT

Mayor Bishop adjourned the meeting, in memory of former City Manager Jim Purtee, at 6:29 pm to December 18, 2024, at 5:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

PASSED, APPROVED, and ADOPTED this 18th day of December 2024.

Austin Bishop, Mayor

ATTEST:

Rochelle Scott, City Clerk
City Council Staff Report
DATE: DECEMBER 18, 2024
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: OPERATIONS DEPARTMENT

FINANCE DIVISION
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2024 -091, A RESOLUTION OF THE

CITY COUNCIL OF THE CITY OF PALMDALE AUTHORIZING THE

CITY MANAGER TO EXECUTE AGREEMENTS WITH THE

CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION

FOR IMPLEMENTATION OF A LOCAL TRANSACTIONS AND USE
TAX, AND ADOPT RESOLUTION NO. CC 2024-095, A RESOLUTION

OF THE CITY COUNCIL OF THE CITY OF PALMDALE

AUTHORIZING EXAMINATION OF SALES OR TRANSACTIONS

AND USE TAX RECORDS

RECOMMENDATION
Staff recommends that the City Council:

1. Adopt Resolution No. CC 2024 -091, a Resolution of the City Council of the City of Palmdale authorizing the City Manager to execute agreements with the California Department of Tax and Fee Administrationfor implementation of a local transactions and use tax; and,

2. Adopt Resolution No. CC 2024 -095, a Resolution of the City Council of the City of Palmdale authorizing the examination of sales or transactions and use tax records; and,

3. Authorize the City Manager or her designee to execute all agreements and associated documents, including minimal and/or non-substantive changes.

BACKGROUND
On July 1 0, 2024, the City Council approved Resolution No. CC 202 4-070 placing a local Transactions and Use Tax measure (“Measure PD”) on the November 5, 2024 ballot for voter consideration.

Report to Mayor and City Council
Re: Measure PD
December 18, 2024

On November 5, 2024, the City of Palmdale voters passed Measure PD with 54.99% of the total votes in favor of the Measure. Staff is requesting the CDTFA to administer the collection and distribution of this tax and allow the City of Palmdale and third-party consultant, Hinderliter, de Llamas & Associates (HdL), to examine the sales, use, and transaction tax records. Collection of this new revenue will commence on April 1, 2025.

DISCUSSION
The CDTFA is already providing administration services for the collection, distribution, and reporting of the 1% Bradley Burns tax and the 0.75% Measure AV tax. The CDTFA is requesting a new agreement for the one-time preparation and ongoing administration of the 0.75%, or ¾ of a cent, Measure PD sales, transactions and use tax. In addition to the agreements, the CDTFA is requesting a list of City Staff authorized to examine the sales, transactions and use tax records, and requests to name a third-party consultant firm, if applicable.

FISCAL IMPACT
$175,000; The CDTFA Preparatory Fees are a one-time cost to the City and is not to exceed $175,000. Administration Fees for CDTFA services are ongoing, and such amounts shall be deducted from the taxes collected by the CDTFA for the City.

STRATEGIC PLAN
Goal II: Ensure long-term fiscal health of the City and maintain funding for services.

C. Involve and expand engagement to enhance public oversight and transparency.

Prepared by: Janelle Samson, Director of Operations
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

ATTACHMENTS
Reso. No. CC 2024-091
Exh A Reso. No. CC 2024-091 City Preparatory Agreement
Exh B Reso. No. CC 2024-091 City Administration Agreement Reso. No. CC 2024-095

CITY COUNCIL

CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. CC 2024-091

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE

AUTHORIZING THE CITY MANAGER TO EXECUTE AGREEMENTS

WITH THE CALIFORNIA DEPARTMENT OF TAX AND FEE

ADMINISTRATION FOR IMPLEMENTATION OF A LOCAL
TRANSACTIONS AND USE TAX.

WHEREAS, on July 10, 2024, the City Council approved Ordinance No. 1644 amending the City Municipal Code and providing for a local transactions and use tax; and
WHEREAS, the California Department of Tax and Fee Administration (Department) administers and collects the transactions and use taxes for all applicable jurisdictions within the state; and
WHEREAS, the Department will be responsible to administer and collect the transactions and use tax for the City; and
WHEREAS, the Department requires that the City enter into a “Preparatory Agreement” and an “Administration Agreement” prior to implementation of said taxes; and
WHEREAS, the Department requires that the City Council authorize the agreements.

NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of Palmdale that the “Preparatory Agreement” attached as Exhibit A and the “Administrative Agreement” attached as Exhibit B are hereby approved and the City Manager is hereby authorized to execute each agreement.

Resolution No. CC 2024-091

SECTION 1. The City Clerk shall certify to the adoption of this resolution.

PASSED, APPROVED and ADOPTED this ______ day of ____________, ________. _________________________________
Approved as to form: Austin Bishop, Mayor
ATTEST:
___________________________ _________________________________ William P. Curley, III Rochelle Scott, City Clerk
City Attorney
I, Rochelle Scott, City Clerk of the City of Palmdale, California, do hereby certify that the foregoing resolution 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 18 day of December, 2024 by the following roll call vote:

AYES:

NOES:___________________________________________________________ ABSTAIN:______________________ABSENT:___________________________ Date:

Rochelle Scott, City Clerk
Exh A Reso. No. CC 2024-091, A-9176
(Rev. 07/24) 1

AGREEMENT FOR PREPARATION TO ADMINISTER AND OPERATE

CITY'S TRANSACTIONS AND USE TAX ORDINANCE
In order to prepare to administer a transactions and use tax ordinance adopted in accordance with the provision of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, the City of Palmdale, hereinafter called City, and the CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION, hereinafter called Department, do agree as follows:

1. The Department agrees to enter into work to prepare to administer and operate a transactions and use tax in conformity with Part 1.6 of Division 2 of the Revenue and Taxation Code which has been approved by a majority of the electors of the City and whose ordinance has been adopted by the City.

2. City agrees to pay to the Department at the times and in the amounts hereinafter specified all of the Department's costs for preparatory work necessary to administer the City's transactions and use tax ordinance. The Department's costs for preparatory work include costs of developing procedures, programming for data processing, developing and adopting appropriate regulations, designing and printing forms, developing instructions for the Department's staff and for taxpayers, and other appropriate and necessary preparatory costs to administer a transactions and use tax ordinance. These costs shall include both direct and indirect costs as specified in Section 11256 of the Government Code.

3. Preparatory costs may be accounted for in a manner which conforms to the internal accounting and personnel records currently maintained by the Department. The billings for costs may be presented in summary form. Detailed records of preparatory costs will be retained for audit and verification by the City.

4. Any dispute as to the amount of preparatory costs incurred by the Department shall be referred to the State Director of Finance for resolution, and the Director's decision shall be final.

5. Preparatory costs incurred by the Department shall be billed by the Department periodically, with the final billing within a reasonable time after the operative date of the ordinance. City shall pay to the Department the amount of such costs on or before the last day of the next succeeding month following the month when the billing is received.

6. The amount to be paid by City for the Department's preparatory costs shall not exceed one hundred seventy-five thousand dollars ($175,000) (Revenue and Taxation Code Section 7272.) (Rev. 07/24) 2

7. Communications and notices may be sent by first class United States mail or through email at [email protected]. If and when communications and notices may include confidential information, communications and notices must be sent through encrypted email at [email protected] or by mail. Communications and notices to be sent to the Department shall be addressed to:

California Department of Tax and Fee Administration
P.O. Box 942879 MIC: 27
Sacramento, California 94279-0027
Attention: Administrator
Local Revenue Branch
Communications and notices to be sent to City shall be addressed to:
______City of Palmdale____________________________
______38300 Sierra Hwy. __________________________
______Palmdale, CA 93550_________________________

8. The date of this agreement is the date on which it is approved by the Department of General Services. This agreement shall continue in effect until the preparatory work necessary to administer City's transactions and use tax ordinance has been completed and the Department has received all payments due from City under the terms of this agreement.

CITY OF PALMDALE CALIFORNIA DEPARTMENT OF TAX

AND FEE ADMINISTRATION
By By
(Signature) Administrator
Local Revenue Branch
Ronda Perez
(Typed Name) Date: _______________________________ City Manager
(Title)
Date: _______________________________
Exh B Reso. No. CC 2024-091, A-9177

AGREEMENT FOR STATE ADMINISTRATION

OF CITY TRANSACTIONS AND USE TAXES
The City Council of the City of Palmdale has adopted, and the voters of the City of Palmdale (hereafter called “City” or “District”) have approved by the required majority vote, the City of Palmdale Transactions and Use Tax Ordinance (hereafter called “Ordinance”), a copy of which is attached hereto. To carry out the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code and the Ordinance, the California State Department of Tax and Fee Administration, (hereinafter called the “Department”) and the City do agree as follows:

ARTICLE I

DEFINITIONS
Unless the context requires otherwise, wherever the following terms appear in the Agreement, they shall be interpreted to mean the following:

1. "District taxes" shall mean the transactions and use taxes, penalties, and interest imposed under an ordinance specifically authorized by Revenue and Taxation code Section 7265, and in compliance with Part 1.6, Division 2 of the Revenue and Taxation Code.

2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance referred to above and attached hereto, Ordinance No. 1644, as amended from time to time, or as deemed to be amended from time to time pursuant to Revenue and Taxation Code Section 7262.2.

ARTICLE II

ADMINISTRATION AND COLLECTION

OF CITY TAXES
A. Administration. The Department and City agree that the Department shall perform exclusively all functions incident to the administration and operation of the City Ordinance. (Rev. 7/24) 2
B. Other Applicable Laws. City agrees that all provisions of law applicable to the administration and operation of the Department Sales and Use Tax Law which are not inconsistent with Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration and operation of the City Ordinance. City agrees that money collected pursuant to the City Ordinance may be deposited into the State Treasury to the credit of the Retail Sales Tax Fund and may be drawn from that Fund for any authorized purpose, including making refunds, compensating and reimbursing the Department pursuant to Article IV of this Agreement, and transmitting to City the amount to which City is entitled.

C. Transmittal of money.

1. For the period during which the tax is in effect, and except as otherwise provided herein, all district taxes collected under the provisions of the City Ordinance shall be transmitted to City periodically as promptly as feasible, but not less often than twice in each calendar quarter.

2. For periods subsequent to the expiration date of the tax whether by City’s self-imposed limits or by final judgment of any court of the State of California holding that City’s ordinance is invalid or void, all district taxes collected under the provisions of the City Ordinance shall be transmitted to City not less than once in each calendar quarter.

3. Transmittals may be made by mail or electronic funds transfer to an account of the City designated and authorized by the City. A statement shall be furnished at least quarterly indicating the amounts withheld pursuant to Article IV of this Agreement.

D. Rules. The Department shall prescribe and adopt such rules and regulations as in its judgment are necessary or desirable for the administration and operation of the City Ordinance and the distribution of the district taxes collected thereunder.

E. Preference. Unless the payor instructs otherwise, and except as otherwise provided in this Agreement, the Department shall give no preference in applying money received for state sales and use taxes, state-administered local sales and use taxes, and district transactions and use taxes owed by a taxpayer, but shall apply moneys collected to the satisfaction of the claims of the State, cities, counties, cities and counties, redevelopment agencies, other districts, and City as their interests appear. (Rev. 7/24) 3
F. Security. The Department agrees that any security which it hereafter requires to be furnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it also will be available for the payment of the claims of City for district taxes owing to it as its interest appears. The Department shall not be required to change the terms of any security now held by it, and City shall not participate in any security now held by the Department.

G. Records of the Department.

When requested by resolution of the legislative body of the City under section 7056 of the Revenue and Taxation Code, the Department agrees to permit authorized personnel of the City to examine the records of the Department, including the name, address, and account number of each seller holding a seller’s permit with a registered business location in the City, pertaining to the ascertainment of transactions and use taxes collected for the City. Information obtained by the City from examination of the Department's records shall be used by the City only for purposes related to the collection of transactions and use taxes by the Department pursuant to this Agreement.

H. Annexation. City agrees that the Department shall not be required to give effect to an annexation, for the purpose of collecting, allocating, and distributing District transactions and use taxes, earlier than the first day of the calendar quarter which commences not less than two months after notice to the Department. The notice shall include the name of the county or counties annexed to the extended City boundary. In the event the City shall annex an area, the boundaries of which are not coterminous with a county or counties, the notice shall include a description of the area annexed and two maps of the City showing the area annexed and the location address of the property nearest to the extended City boundary on each side of every street or road crossing the boundary.

ARTICLE III

ALLOCATION OF TAX
A. Allocation. In the administration of the Department's contracts with all districts that impose transactions and use taxes imposed under ordinances, which comply with Part 1.6 of Division 2 of the Revenue and Taxation Code:

1. Any payment not identified as being in payment of liability owing to a designated district or districts may be apportioned among the districts as their interest appear, or, in the discretion of the (Rev. 7/24) 4
Department, to all districts with which the Department has contracted using ratios reflected by the distribution of district taxes collected from all taxpayers.

2. All district taxes collected as a result of determinations or billings made by the Department, and all amounts refunded or credited may be distributed or charged to the respective districts in the same ratio as the taxpayer's self-declared district taxes for the period for which the determination, billing, refund or credit applies.

B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with respect to vehicles, vessels, or aircraft, the address of the registered owner appearing on the application for registration or on the certificate of ownership may be used by the Department in determining the place of use.

ARTICLE IV

COMPENSATION
The City agrees to pay to the Department as the State's cost of administering the City Ordinance such amount as is provided for by law. Such amounts shall be deducted from the taxes collected by the Department for the City.

ARTICLE V

MISCELLANEOUS PROVISIONS
A. Communications. Communications and notices may be sent by first class United States mail to the addresses listed below, or to such other addresses as the parties may from time to time designate or through email at [email protected]. If and when communications and notices may include confidential information, communications and notices must be sent through encrypted email at [email protected] or by mail.
(Rev. 7/24) 5
Communications and notices to be sent to the Department shall be addressed to:

California State Department of Tax and Fee Administration P.O. Box 942879
Sacramento, California 94279-0027
Attention: Administrator
Local Revenue Branch
Communications and notices to be sent to the City shall be addressed to:
__________City of Palmdale_______________________________ __________38300 Sierra Hwy______________________________ __________Palmdale, CA 93550____________________________ Unless otherwise directed, transmittals of payment of District transactions and use taxes will be sent to the address above.

B. Term. The date of this Agreement is the date on which it is approved by the Department of General Services. The Agreement shall take effect on January 1, 2025. This Agreement shall continue until December 31 next following the expiration date of the City Ordinance, and shall thereafter be renewed automatically from year to year until the Department completes all work necessary to the administration of the City Ordinance and has received and disbursed all payments due under that Ordinance.

C. Notice of Repeal of Ordinance. City shall give the Department written notice of the repeal of the City Ordinance not less than 110 days prior to the operative date of the repeal. (Rev. 7/24) 6

ARTICLE VI

ADMINISTRATION OF TAXES IF THE

ORDINANCE IS CHALLENGED AS BEING INVALID
A. Impoundment of funds .

1. When a legal action is begun challenging the validity of the imposition of the tax, the City shall deposit in an interest-bearing escrow account, any proceeds transmitted to it under Article II. C., until a court of competent jurisdiction renders a final and non-appealable judgment that the tax is valid.

2. If the tax is determined to be unconstitutional or otherwise invalid, the City shall transmit to the Department the moneys retained in escrow, including any accumulated interest, within ten days of the judgment of the trial court in the litigation awarding costs and fees becoming final and non- appealable.

B. Costs of administration. Should a final judgment be entered in any court of the State of California, holding that City's Ordinance is invalid or void, and requiring a rebate or refund to taxpayers of any taxes collected under the terms of this Agreement, the parties mutually agree that:

1. Department may retain all payments made by City to Department to prepare to administer the City Ordinance.

2. City will pay to Department and allow Department to retain Department's cost of administering the City Ordinance in the amounts set forth in Article IV of this Agreement.

3. City will pay to Department or to the State of California the amount of any taxes plus interest and penalties, if any, that Department or the State of California may be required to rebate or refund to taxpayers.

4. City will pay to Department its costs for rebating or refunding such taxes, interest, or penalties. Department's costs shall include its additional cost for developing procedures for processing the rebates or refunds, its costs of actually making these refunds, designing and printing forms, and (Rev. 7/24) 7
developing instructions for Department's staff for use in making these rebates or refunds and any other costs incurred by Department which are reasonably appropriate or necessary to make those rebates or refunds. These costs shall include Department's direct and indirect costs as specified by Section 11256 of the Government Code.

5. Costs may be accounted for in a manner, which conforms to the internal accounting, and personnel records currently maintained by the Department. The billings for such costs may be presented in summary form. Detailed records will be retained for audit and verification by City.

6. Any dispute as to the amount of costs incurred by Department in refunding taxes shall be referred to the State Director of Finance for resolution and the Director's decision shall be final.

7. Costs incurred by Department in connection with such refunds shall be billed by Department on or before the 25th day of the second month following the month in which the judgment of a court of the State of California holding City's Ordinance invalid or void becomes final. Thereafter Department shall bill City on or before the 25th of each month for all costs incurred by Department for the preceding calendar month. City shall pay to Department the amount of such costs on or before the last day of the succeeding month and shall pay to Department the total amount of taxes, interest, and penalties refunded or paid to taxpayers, together with Department costs incurred in making those refunds.

CITY OF PALMDALE CALIFORNIA STATE DEPARTMENT OF

TAX AND FEE ADMINISTRATION
By By
(Signature) Administrator
Local Revenue Branch
Ronda Perez
(Typed Name) Date: _______________________________
City Manager
(Title)
(Date)

CITY COUNCIL

CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. CC 2024-095

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE

AUTHORIZING EXAMINATION OF SALES OR TRANSACTIONS AND

USE TAX RECORDS
WHEREAS, pursuant to Ordinance Number 1644, the City of Palmdale (City) entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of sales and use taxes; and
WHEREAS, the City Council of the City of Palmdale deems it desirable and necessary for authorized officers, employees, and representatives of the City to examine confidential sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected by the Department for the City pursuant to that contract; and
WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Department records, and Section 7056.5 of the California Revenue and Taxation Code establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales or transactions and use tax records of the Department.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PALMDALE HEREBY RESOLVES AS FOLLOWS:

SECTION 1. That the City Manager, Assistant City Manager, Director of Operations, Deputy Director of Finance, City Treasurer, Deputy City Treasurer, Finance Manager, Assistant Finance Manager, Senior Financial Analyst, Financial Analyst, or other officer or employee of the City designated in writing by the City Manager or designee to the California Department of Tax and Fee Administration (CDTFA) is hereby appointed to represent the City with authority to examine sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department pursuant to the contract between the City and the Department.

SECTION 2. That the City Manager, or other officer or employee of the City designated in writing by the City Manager to the Department, is hereby appointed to represent the City with the authority to examine those sales, use, and transactions tax records of the Department, for the purposes related to the following governmental functions of the City:

Resolution No. CC 2024-095

(a) City Administration
(b) Finance, Revenue Management and Budgeting
(c) Economic and Community Development
(d) Planning
(e) Business License
The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above.

SECTION 3. 41That Hinderliter, de Llamas & Associates is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department. The person or entity designated by this section meets all of the following conditions, which are also included in the contract between the City and the Hinderliter de Llamas & Associates:
a) has an existing contract with the City to examine those sales or transactions and use tax records;
b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 of this resolution to examine the information. c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract;
d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.

The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales, use and transactions taxes by the Department pursuant to the contract between the City and the Department and for purposes relating to the governmental functions of the City listed in section 2 of this resolution.

SECTION 4. That this resolution supersedes all prior resolutions of the City Council of the City of Palmdale adopted pursuant to subdivision (b) of Revenue and Taxation Code section 7056.

Resolution No. CC 2024-095

SECTION 5. The City Clerk shall certify to the adoption of this resolution.

PASSED, APPROVED and ADOPTED this 18th day of December, 2024. _________________________________
Approved as to form: Austin Bishop, Mayor
ATTEST:
___________________________ _________________________________ William P. Curley, III Rochelle Scott, City Clerk
City Attorney
I, Rochelle Scott, City Clerk of the City of Palmdale, California, do hereby certify that the foregoing resolution 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 18 day of December, 2024 by the following roll call vote:

AYES:

NOES:___________________________________________________________ ABSTAIN:______________________ABSENT:___________________________ Date:

Rochelle Scott, City Clerk
Successor Agency
Staff Report
DATE: DECEMBER 18, 2024
TO: HONORABLE CHAIR AND DIRECTORS
FROM: OPERATIONS DEPARTMENT

FINANCE DIVISION
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO S. SA 2024-014 AND SA 2024-015,

RESOLUTIONS OF THE SUCCESSOR AGENCY TO THE

COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF

PALMDALE APPROVING THE RECOGNIZED OBLIGATION

PAYMENT SCHEDULE AND THE ADMINISTRATIVE BUDGET ,
RESPECTIVELY, FOR THE PERIOD OF JULY 1, 2025 THROUGH
JUNE 30, 2026

RECOMMENDATION
Staff recommends that the Successor Agency to the Community Redevelopment Agency of the City of Palmdale:

1. Adopt Resolution No. SA 2024 -014 approving the Recognized Obligation Payment Schedule (ROPS 25-26) for the period of July 1, 2025 through June 30, 2026.

2. Adopt Resolution No. SA 2024-015 approving the Administrative Budget for the Period of July 1, 2025 through June 30, 2026 (Administrative Budget 2025-26).

BACKGROUND
Assembly Bill 1X 26 (AB 26) was signed by the Governor on June 28, 2011, and upheld as constitutional by the California Supreme Court. On June 27, 2012, the Governor signed Assembly Bill 1484 (AB 1484). AB 26 and AB 1484 (together the Dissolution Bills) made sweeping changes to California Redevelopment Law, eliminating redevelopment agencies statewide, establishing successor agencies, and requiring the successor agencies to pay, perform, and enforce the enforceable obligations of the former redevelopment agencies and to wind down the affairs of the former redevelopment agencies.

Report to Chair and Directors of the Successor Agency
Re: Adopt Resolution Nos. SA 2024-014 and SA 2024-015
December 18, 2024

Administrative Budget
Section 34177(j) of the Dissolution Bills requires the Successor Agency to prepare an Administrative Budget annually and submit it to the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board for approval.

Section 34177(k) of the Dissolution Bills further requires the Successor Agency to provide the Los Angeles County Auditor-Controller the administrative cost estimates from its approved Administrative Budget to be paid from property tax revenues deposited in the Redevelopment Property Tax Trust Fund.

Health & Safety Code Section 34171(b)(3) states that commencing July 1, 2016, the administrative cost allowance shall be up to 3 percent of the actual property tax distributed to the successor agency by the county auditor-controller in the preceding fiscal year for payment of approved enforceable obligations, reduced by the successor agency’s administrative cost allowance and loan repayments made to the city pursuant to Section 34191.4(b) during the preceding fiscal year, subject to a minimum of $250,000, unless such amount is reduced by the Oversight Board or by agreement between the successor agency and the State Department of Finance (“Department of Finance”). Staff has estimated this amount and allocated it to various Successor Agency costs as detailed in Exhibit A to Resolution No. SA 2024-014.

Recognized Obligation Payment Schedule (ROPS)
Section 34177(l) of the Dissolution Bills requires the Successor Agency to prepare a Recognized Obligation Payment Schedule (ROPS) listing the enforceable obligations of the former Redevelopment Agency annually.

Section 34177(l) further requires that (i) the ROPS shall be submitted to the county administrative officer, the Los Angeles County Auditor-Controller (Auditor-Controller) and the State Department of Finance (Department of Finance) at the same time that the Successor Agency submits the ROPS to the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board for approval; (ii) the ROPS shall be submitted to and duly approved by the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board; (iii) the approved ROPS shall be posted on the Successor Agency’s website; and (iv) the approved ROPS shall be submitted to the Auditor-Controller, the State Controller and the State Department of Finance.

Section 34180 of the Dissolution Bills (Section 34180) requires certain successor agency actions to be approved by the oversight board, including Section 34180(c) “Setting aside of amounts in reserves as required by indentures, trust indentures, or similar documents governing the issuance of outstanding redevelopment agency bonds.” The attached ROPS 25-26 details amounts in accordance with Section 34180(c).

Report to Chair and Directors of the Successor Agency
Re: Adopt Resolution Nos. SA 2024-014 and SA 2024-015
December 18, 2024

The attached ROPS 25-26 also includes an enforceable obligation for the repayment of the Educational Revenue Augmentation Fund (ERAF) and Supplemental Educational Revenue Augmentation Fund (SERAF) loans borrowed from the former Redevelopment Agency’s Low and Moderate Income Housing Fund.

Senate Bill No. 107 (section 14 of Chapter 325, Statutes of 2015) states that the Successor Agency’s Oversight Board continues to exist and will only cease to exist after all of its indebtedness has been repaid, and thus, requires that the City’s Successor Agency’s Oversight Board approve ROPS 25-26.

DISCUSSION
The attached Resolution Nos. SA 2024-014 and SA 2024-015 seek approval of the Recognized Obligation Payment Schedule (ROPS) 25-26 and the Administrative Budget 25-26.

Approval of the ROPS and the Administrative Budget will allow the City to remain in compliance with AB 26 and AB 1484 (together the Dissolution Bills), and to submit the information timely to the county administrative officer, the Los Angeles County Auditor- Controller (Auditor-Controller) and the State Department of Finance (Department of Finance). Simultaneously, the Successor Agency submits the ROPS to the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board for approval.

Upon approval from the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board, and the State Department of Finance, the City may then incorporate the requested administrative budgets and payments from the ROPS into its annual budget for Fiscal Year 2025-26.

FISCAL IMPACT
The Administrative Budget for the period of July 1, 2025 through June 30, 2026 totals $321,605. These funds will be included in various line items in Program 20 of Fund 460 in the fiscal year 2025-26 budget and are included on the ROPS. These funds will be used to reimburse the City for its staff hours.

The total payments estimated during the one-year period of ROPS 25-26 is $17,110,708, of which $11,523,210 is expected to be funded by Redevelopment Property Tax Trust Funds (RPTTF) to be received from the Los Angeles County Auditor-Controller (including Administrative Cost Allowance), $5,499,275 is from reserve balance funds received in the prior year, and $88,223 is from other funds. Amounts are to be budgeted in various areas of the Successor Agency and Housing Successor Agency budgets.

Report to Chair and Directors of the Successor Agency
Re: Adopt Resolution Nos. SA 2024-014 and SA 2024-015
December 18, 2024

STRATEGIC PLAN
Goal II: Ensure long-term fiscal health of the City and maintain funding for services.

A. Manage resources, costs, and liabilities to ensure the City’s long-term fiscal health.

Prepared by: Janelle Samson, Director of Operations
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, Executive Director
Approved as to form: William P. Curley, III, General Counsel

ATTACHMENTS
Reso. No. SA 2024-014 ROPS
Exh A Palmdale Annual ROPS 25-26
Reso. No. SA 2024-015 Administrative Budget
Exh A Administrative Budget 25-26

SUCCESSOR AGENCY

TO THE COMMUNITY REDEVELOPMENT AGENCY

OF THE CITY OF PALMDALE

CALIFORNIA
RESOLUTION NO. SA 2024-014

A RESOLUTION OF THE SUCCESSOR AGENCY TO THE COMMUNITY

REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE APPROVING

THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) FOR
THE PERIOD OF JULY 1, 2025 THROUGH JUNE 30, 2026.

WHEREAS, The Community Redevelopment Agency of the City of Palmdale (“Redevelopment Agency”) was a redevelopment agency in the City of Palmdale (“City”), duly created pursuant to the California Community Redevelopment Law (Part 1 (commencing with SECTION 33000) of Division 24 of the California Health and Safety Code) (“Redevelopment Law”); and
WHEREAS, The Redevelopment Agency was responsible for the administration of redevelopment activities within the City; and
WHEREAS, Assembly Bill 1X 26 (“AB 26”) was signed by the Governor on June 28, 2011 and upheld to be constitutional by the California Supreme Court on December 29, 2011; and
WHEREAS, AB 26 made certain changes to the California Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code), including adding Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) (“Part 1.85”) to Division 24 of the California Health and Safety Code (“Health and Safety Code”); and WHEREAS, On February 1, 2012, as a result of the Supreme Court’s decision, all California redevelopment agencies were dissolved, successor agencies were established as successor agencies to the former redevelopment agencies pursuant to Health and Safety Code Section 34173, and successor agencies are tasked with paying, performing and enforcing the enforceable obligations of the former redevelopment agencies and winding down the affairs of the former redevelopment agencies; and WHEREAS, On June 27, 2012, the Governor of California signed Assembly Bill 1484 (“AB 1484”) into law, making several substantive and technical amendments to AB 26 (AB 26 and AB 1484 together referred to as the “Dissolution Bills”); and WHEREAS, On January 4, 2012, the City Council adopted Resolution No. CC 2012-002 declaring itself as the Successor Agency to the Community Redevelopment Agency of the City of Palmdale (“Successor Agency”) upon the dissolution of the Redevelopment Agency; and
Resolution No. SA 2024-014

WHEREAS, On April 4, 2012 the City Council, acting in its capacity as the Successor Agency, adopted Resolution No. CC 2012-041 SA naming itself the “Successor Agency to the Community Redevelopment Agency of the City of Palmdale”, the sole name by which it will exercise its powers and fulfill its duties pursuant to Part

1.85 of AB 26, and establishing itself as a separate legal entity with rules and regulations that will apply to the governance and operations of the Successor Agency; and WHEREAS, pursuant to Health and Safety Code Section 34179 (q), commencing on and after July 1, 2018, the County of Los Angeles, where more than 40 oversight boards were created by the Dissolution Act, shall have five consolidated oversight boards, each encompassing the five supervisorial districts; and WHEREAS, the Fifth Supervisorial District Consolidated Oversight Board ("Fifth District Consolidated Oversight Board") has jurisdiction over the Successor Agency of the Former Redevelopment Agency to the City of Palmdale and WHEREAS, the Fifth District Consolidated Oversight Board will hold a regular/special meeting on or about January 9, 2025; and WHEREAS, Health & Safety Code SECTION 34177(l) (“SECTION 34177(l)”) requires the Successor Agency to prepare a forward-looking Recognized Obligation Payment Schedule (ROPS) listing the enforceable obligations of the former Redevelopment Agency that are due in the next annual period; and WHEREAS, SECTION 34177(l), as amended by AB 1484, also provides that (i) the ROPS shall be submitted to the county administrative officer, the Los Angeles County Auditor-Controller (“Auditor-Controller”) and the State Department of Finance (“Department of Finance”) at the same time that the Successor Agency submits the ROPS to the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board for approval; (ii) the ROPS shall be submitted to and duly approved by the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board; (iii) the approved ROPS shall be posted on the Successor Agency’s website; and (iv) the approved ROPS shall be submitted to the Auditor-Controller, the State Controller and the State Department of Finance; and
WHEREAS, Health & Safety Code Section 34179.7 (o) (1), requires the Successor Agency to prepare a forward-looking, annual Recognized Obligation Payment Schedule (ROPS) listing the enforceable obligations of the former Redevelopment Agency that are due in the next annual period and submitting an oversight board approved annual ROPS to the Department of Finance and Auditor- Controller by February 1, 2025; and
WHEREAS, Health and Safety Code Section 34183(a) provides that the Auditor- Controller disburse funds to successor agencies on June 1, 2025 and January 2, 2026 based on ROPS 25-26 in accordance with the prescribed order of priority and the Resolution No. SA 2024-014

Dissolution Bills require that such disbursements be made as and when necessary for the Successor Agency to repay and perform enforceable obligations when due; and WHEREAS, Health and Safety Code Section 34180 (“Section 34180”) requires certain successor agency actions to be approved by the oversight board, including Section 34180(c) “Setting aside of amounts in reserves as required by indentures, trust indentures, or similar documents governing the issuance of outstanding redevelopment agency bonds”; and
WHEREAS, the attached ROPS 25-26 (Exhibit A) details amounts in accordance with Section 34180(c); and
WHEREAS, the Successor Agency now desires to approve ROPS 25-26 which is attached hereto and incorporated herein by reference; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.

NOW THEREFORE, BE IT RESOLVED, THE SUCCESSOR AGENCY TO THE

COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

SECTION 1 . The Board of Directors hereby finds and determines that the foregoing recitals are true and correct.

SECTION 2. The Board of Directors hereby approves the setting aside of funds as detailed in ROPS 25-26 in accordance with Section 34180(c) to comply with bond documents.

SECTION 3 . The adoption of this Resolution is not intended to and shall not constitute a waiver by the Successor Agency of any rights the Successor Agency may have to challenge the effectiveness and/or legality of all or any portion of the Dissolution Bills through administrative or judicial proceedings
SECTION 4 . The ROPS 25-26 (Exhibit A), which is attached hereto and incorporated by reference, is hereby approved and adopted.

SECTION 5 . The Executive Director, or designee, is hereby authorized and directed to make any and all non-substantive changes to the approved ROPS to conform to any changes or to address further guidance or direction from the Department of Operations, or to address any other new information, including but not limited to new report forms, and such revised ROPS shall be considered approved by the Successor Agency.

SECTION 6 . The Executive Director, or designee, is hereby authorized and directed to: (i) submit the Successor Agency approved ROPS 25-26 to the Los Angeles Resolution No. SA 2024-014

County Fifth Supervisorial District Consolidated Oversight Board for its review and approval and to concurrently submit ROPS 25-26 to the county administrative officer, the Auditor-Controller and the Department of Finance; (ii) submit the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board approved ROPS 25-26 to the Auditor Controller, the State Controller, the Department of Finance and any and all other entities as necessary or appropriate; (iii) post the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board approved ROPS 25-26 on the City’s website; and (iv) take any and all other actions and execute any and all such other documents as are necessary, convenient or appropriate to comply with the Dissolution Bills, and to effectuate the intent of this Resolution on behalf of the Successor Agency.

SECTION 7. This Resolution shall take effect immediately upon its adoption.

SECTION 8. The Agency Secretary shall certify to the adoption of this resolution.

PASSED, APPROVED and ADOPTED this 18th day of December, 2024. _________________________________
Approved as to form: Austin Bishop, Chair
ATTEST:
___________________________ _________________________________ William P. Curley, III Rochelle Scott,
General Counsel Agency Secretary
I, Rochelle Scott, Agency Secretary of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the Successor Agency at a regular meeting of said Agency held on the 18th day of December, 2024 by the following roll call vote:

AYES: __
NOES:_____________________________________________________________ ABSTAIN:______________________ABSENT:_____________________________ Date: ____________________________ ______
Rochelle Scott, Agency Secretary
Recognized Obligation Payment Schedule (ROPS 25-26) - Summary Filed for the July 1, 2025 through June 30, 2026 Period Successor Agency: Palmdale
County: Los Angeles
Current Period Requested Funding for Enforceable
Obligations (ROPS Detail)
25-26A Total
(July -
December)
25-26B Total
(January -
June)
ROPS 25-26
Total
A Enforceable Obligations Funded as Follows (B+C+D) $ 5,222,498 $ 365,000 $ 5,587,498 B Bond Proceeds - - -
C Reserve Balance 5,134,275 365,000 5,499,275
D Other Funds 88,223 - 88,223
E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ 3,419,192 $ 8,104,018 $ 11,523,210 F RPTTF 3,097,587 8,104,018 11,201,605
G Administrative RPTTF 321,605 - 321,605
H Current Period Enforceable Obligations (A+E) $ 8,641,690 $ 8,469,018 $ 17,110,708 Certification of Oversight Board Chairman:

Name Title
Pursuant to Section 34177 (o) of the Health and Safety
code, I hereby certify that the above is a true and
accurate Recognized Obligation Payment Schedule for
the above named successor agency. /s/
Signature Date
Exhibit A to Reso. No. 2024-014
Palmdale
Recognized Obligation
Payment Schedule (ROPS 25-26) - ROPS Detail
July 1, 2025 through June 30, 2026

A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation
Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired ROPS
25-26 Total
ROPS 25-26A (Jul - Dec)
25-26A
Total
ROPS 25-26B (Jan - Jun)
25-26B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
$69,616,123 $17,110,708 $- $5,134,275 $88,223 $3,097,587 $321,605 $8,641,690 $- $365,000 $- $8,104,018 $- $8,469,018 6 Loan from
Housing for
SERAF
SERAF/
ERAF
05/05/
2010
11/30/2036 Housing
Authority for
deposit into
Housing
Asset Fund
Statutory
Obligation FY
2009-10

SERAF -
Merged Proj
Area
Merge 1,920,491 N $350,000 - - - 350,000 - $350,000 - - - - - $- 7 Loan from
Housing for
SERAF
SERAF/
ERAF
03/02/
2011
02/28/2034 Housing
Authority for
deposit into
Housing
Asset Fund
Statutory
Obligation FY
2010-11
SERAF - Proj
Area No 1
PA 1 521,581 N $- - - - - - $- - - - - - $-
8 Loan from
Housing for
SERAF
SERAF/
ERAF
03/02/
2011
11/30/2036 Housing
Authority for
deposit into
Housing
Asset Fund
Statutory
Obligation FY
2010-11

SERAF -
Merged Proj
Area
Merge 1,867,705 N $- - - - - - $- - - - - - $-
13 2010 Tax Alloc
Ref
Notes($27.5M)
Bonds
Issued On or
Before 12/
31/10
12/23/
1998
03/01/2026 AC Warnack
Trust/
Shaughne
S. Warnack
Trust
Notes issued
for non-housing
projects
PA 1 3,120,481 N $3,120,481 - - 88,223 1,287,107 - $1,375,330 - - - 1,745,151 - $1,745,151 14 2010 Tax Alloc
Ref
Notes($27.5M)
Reserves 12/23/
1998
03/01/2026 AC Warnack
Trust/
Shaughne
S. Warnack
Trust
Bond
Covenants -
H&S Code Sec
34171(d)(1)(A)
PA 1 - Y $- - - - - - $- - - - - - $-
23 2002 Tax Alloc
Bonds ($5.3M)
Bonds
Issued On or
Before 12/
31/10
08/20/
2002
12/01/2032 US Bank Bonds issued
for non-housing
projects
Merge 7,565,000 N $975,000 - 975,000 - - - $975,000 - - - - - $- 24 2002 Tax Alloc
Bonds ($5.3M)
Reserves 08/20/
2002
12/01/2032 US Bank Bond
Covenants -
H&S Code Sec
34171(d)(1)(A)
Merge 970,000 N $970,000 - - - - - $- - - - 970,000 - $970,000 30 Bond
Administration
Fees
Fees 06/15/
1993
09/01/2034 US Bank Fiscal Agent/
Trustee fees on
Bond issues
Merge 107,000 N $12,000 - - - 8,200 - $8,200 - - - 3,800 - $3,800 32 Arbitrage
Calculation
Reports
Fees 07/16/
2002
09/01/2034 BondLogistix
LLC
Arbitrage
rebate calc
svcs
Merge 29,400 N $6,200 - - - 6,200 - $6,200 - - - - - $- 35 Bond
Disclosure
Fees 05/24/
2004
09/01/2034 NBS Disclosure
reporting
Merge 82,000 N $9,000 - - - - - $- - - - 9,000 -
$9,000
Exhibit A to Reso. No. 2024-014

A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation
Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired ROPS
25-26 Total
ROPS 25-26A (Jul - Dec)
25-26A
Total
ROPS 25-26B (Jan - Jun)
25-26B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
Reports
(A-0695)
services
37 Agency
Financial Audit
(A-2844)
Fees 07/01/
2009
09/01/2034 Eide Bailly Audit services -
annually
required by
bond
documents
H&S Code Sec
34171(d)(1)(A)
Merge 117,000 N $12,600 - - - 6,300 - $6,300 - - - 6,300 - $6,300 39 Prop Tax
Consulting
Svcs (A-3220)
- Merge
Fees 09/01/
2010
09/01/2034 HdL Coren
& Cone
Property Tax
Consulting
Services - data
required for
annual Bond
Disclosures
H&S Code Sec
34171(d)(1)(A)
Merge 117,000 N $13,000 - - - 6,500 - $6,500
- - - 6,500 - $6,500
62 Property
Assessments
Property
Maintenance
07/01/
2025
06/30/2026 COP -
Streetlight
Maint Dist
Streetlight
Maint. Dist.

Assessments -
Costs of
maintaining
assets prior to
disposition,
allowable by
H&S Code Sec
34171(d)(1)(F).

PA 1 600 N $600 - - - 300 - $300 - - - 300 - $300
65 Property
Assessments/
Spec Taxes
Property
Maintenance
07/01/
2025
06/30/2026 CFD 05-1 Special Tax
Assessment -
CFD 05-1 -
Costs of
maintaining
assets prior to
disposition,
allowable by
H&S Code Sec
34171(d)(1)(F).

Merge 93,000 N $93,000 - - - 46,500 - $46,500 - - - 46,500 - $46,500 66 Property
Assessments -
PA 1
Property
Maintenance
07/01/
2025
06/30/2026 COP-Park
Maint & Rec
Impv Dist
Park Maint &
Rec Impv
Assessments -
Costs of
maintaining
assets prior to
disposition,
allowable by
H&S Code Sec
34171(d)(1)(F).

PA 1 100 N $100 - - - 50 - $50 - - - 50 - $50
68 Property
Assessments -
PA 1
Property
Maintenance
07/01/
2025
06/30/2026 AV Mosquito
& Vector
Control
Mosquito
Abatement
Assessments -
Costs of
PA 1
10 N $10 - - - 5 - $5 - - - 5 - $5
Exhibit A to Reso. No. 2024-014

A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation
Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired ROPS
25-26 Total
ROPS 25-26A (Jul - Dec)
25-26A
Total
ROPS 25-26B (Jan - Jun)
25-26B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
maintaining
assets prior to
disposition,
allowable by
H&S Code Sec
34171(d)(1)(F).
76 DDA Transit
Vlg
Townhomes
(A-1977)

OPA/DDA/
Construction
07/10/
2007
12/31/2061 Palmdale
Transit
Village
Townhomes,
LLC
Transit Village
townhome
development
Housing 65,000 N $65,000 - - - - - $- - 65,000 - - - $65,000 80 DDA Transit
Vlg
Townhomes
(A-1977)

OPA/DDA/
Construction
07/10/
2007
12/31/2061 Palmdale
Transit
Village
Townhomes,
LLC
Reimbursement
to Developer of
Parks & Rec
Impact Fees
Housing 300,000 N $300,000 -
- - - - $- - 300,000 - - - $300,000
160 Commission
charges
Property
Dispositions
07/01/
2025
06/30/2026 Various Costs of
commission
relating to sale
of Successor
Agency land to
developers
PA1/
Merge
- N $- - - - - - $- - - - - - $-
161 Escrow
Services
Property
Dispositions
07/01/
2025
06/30/2026 Various Escrow Service
costs relating to
sale of
Successor
Agency land to
developers
PA1/
Merge
- N $- - - - - - $- - - - - - $-
162 Title Services Property
Dispositions
07/01/
2025
06/30/2026 Various Title Service
costs relating to
sale of
Successor
Agency land to
developers
PA1/
Merge
- N $- - - - - - $- - - - - - $-
163 Appraisal
Services
Property
Dispositions
07/01/
2025
06/30/2026 Various Appraisal
Service costs
relating to sale
of Successor
Agency land to
developers
PA1/
Merge
- N $- - - - - - $- - -
- - - $-
170 Agency
Adminstrative
Cost
Allowance
Admin Costs 07/01/
2025
06/30/2026 City of
Palmdale
SA Overhead
and
Administrative
Costs
PA1/
Merge
321,605 N $321,605 - - - - 321,605 $321,605 - - - - - $- 175 Tax Allocation
Refunding
Bonds, 2016
Series A
Refunding
Bonds
Issued After
6/27/12
04/26/
2016
09/01/2034 US Bank Bonds issued
to refund 1998,
1999 and 2003
Bonds
PA1/
Merge
17,695,219 N $2,942,750 - 1,949,156 - 649,719 - $2,598,875 - - - 343,875 - $343,875 176 Tax Allocation Reserves 04/26/ 09/01/2034 US Bank Reserve for PA1/ 1,990,406 N $1,990,406 - - - - - $- - - - 1,990,406 - $1,990,406 Exhibit A to Reso. No. 2024-014

A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation
Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired ROPS
25-26 Total
ROPS 25-26A (Jul - Dec)
25-26A
Total
ROPS 25-26B (Jan - Jun)
25-26B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
Refunding
Bonds, 2016
Series A
2016 Next ROPS
Period Debt
Service per
Indenture
Merge
177 T
ax Allocation
Refunding
Bonds, 2016
Series B
Refunding
Bonds
Issued After
6/27/12
06/23/
2016
09/01/2034 US Bank Bonds issued
to refund
2003C, 2003D,
2004A, 2004
Sub, 2005E,
2005F and
2009 Bonds
PA1/
Merge
30,329,469 N $3,525,900 - 2,210,119 - 736,706 - $2,946,825 - - - 579,075 - $579,075 178 Tax Allocation
Refunding
Bonds, 2016
Series B
Reserves 06/23/
2016
09/01/2034 US Bank Reserve for
Next ROPS
Period Debt
Service per
Indenture
PA1/
Merge
2,403,056
N $2,403,056 - - - - - $- - - - 2,403,056 - $2,403,056
Exhibit A to Reso. No. 2024-014
Palmdale
Recognized Obligation Payment Schedule (ROPS 25-26) - Report of Cash Balances July 1, 2022 through June 30, 2023
(Report Amounts in Whole Dollars)
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.

A B C D E F G H
ROPS 22-23 Cash Balances
(07/01/22 - 06/30/23)
Fund Sources
Comments
Bond Proceeds Reserve Balance Other Funds RPTTF
Bonds issued
on or before
12/31/10
Bonds issued
on or after
01/01/11
Prior ROPS
RPTTF and
Reserve
Balances retained
for future
period(s)
Rent, grants,
interest, etc.

Non-Admin
and Admin

1 Beginning Available Cash Balance (Actual 07/01/22)
RPTTF amount should exclude "A" period distribution
amount.
527,875 2 365,000 245,170 452,756
2 Revenue/Income (Actual 06/30/23)
RPTTF amount should tie to the ROPS 22-23 total
distribution from the County Auditor-Controller
17,300 7 88,223 10,715,846
3 Expenditures for ROPS 22-23 Enforceable Obligations
(Actual 06/30/23)
30 7 177,072 10,807,667
4 Retention of Available Cash Balance (Actual 06/30/23) RPTTF amount retained should only include the amounts
distributed as reserve for future period(s)
545,145 2 365,000 68,098 323,020
5 ROPS 22-23 RPTTF Prior Period Adjustment
RPTTF amount should tie to the Agency's ROPS 22-23 PPA
form submitted to the CAC
No entry required 37,915
6 Ending Actual Available Cash Balance (06/30/23)
C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5)
$- $- $- $88,223 $- Col F applied to ROPS 25-26 Item 13 Exhibit A to Reso. No. 2024-014
Palmdale
Recognized Obligation Payment Schedule (ROPS 25-26) - Notes July 1, 2025 through June 30, 2026
Item # Notes/Comments
6 7
8 13
14 23
24 30
32 35
37 39
62 LRPMP # 14, 15, 16
65 LRPMP # 14, 15, 16
66 LRPMP # 14, 15, 16
68 LRPMP # 14, 15, 16
76 Funded in a prior year and SA allowed to retain as a reserve for expenditure in 24-25B; not likely to be spent until 25-26 so included again as reserve in this ROPS 80 Funded in a prior year and SA allowed to retain as a reserve for expenditure in 24-25B; not likely to be spent until 25-26 so included again as reserve in this ROPS 160
161
162
163
170
175
176
177
178
Exhibit A to Reso. No. 2024-014

SUCCESSOR AGENCY

TO THE COMMUNITY REDEVELOPMENT AGENCY

OF THE CITY OF PALMDALE

CALIFORNIA
RESOLUTION NO. SA 2024-015

A RESOLUTION OF THE SUCCESSOR AGENCY TO THE COMMUNITY

REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE APPROVING
THE ADMINISTRATIVE BUDGET FOR THE PERIOD OF JULY 1, 2025 THROUGH JUNE 30, 2026 (ADMINISTRATIVE BUDGET 25-26).

WHEREAS, The Community Redevelopment Agency of the City of Palmdale (“Redevelopment Agency”) was a redevelopment agency in the City of Palmdale (“City”), duly created pursuant to the California Community Redevelopment Law (Part 1 (commencing with SECTION 33000) of Division 24 of the California Health and Safety Code) (“Redevelopment Law”); and
WHEREAS, The Redevelopment Agency was responsible for the administration of redevelopment activities within the City; and
WHEREAS, Assembly Bill 1X 26 (“AB 26”) was signed by the Governor on June 28, 2011 and upheld to be constitutional by the California Supreme Court on December 29, 2011; and
WHEREAS, AB 26 made certain changes to the California Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code), including adding Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) (“Part 1.85”) to Division 24 of the California Health and Safety Code (“Health and Safety Code”); and WHEREAS, On February 1, 2012, as a result of the Supreme Court’s decision, all California redevelopment agencies were dissolved, successor agencies were established as successor agencies to the former redevelopment agencies pursuant to Health and Safety Code Section 34173, and successor agencies are tasked with paying, performing and enforcing the enforceable obligations of the former redevelopment agencies and winding down the affairs of the former redevelopment agencies; and WHEREAS, On June 27, 2012, the Governor of California signed Assembly Bill 1484 (“AB 1484”) into law, making several substantive and technical amendments to AB 26 (AB 26 and AB 1484 together referred to as the “Dissolution Bills”); and WHEREAS, On January 4, 2012, the City Council adopted Resolution No. CC 2012-002 declaring itself as the Successor Agency to the Community Redevelopment Agency of the City of Palmdale (“Successor Agency”) upon the dissolution of the Redevelopment Agency; and
Resolution No. SA 2024-015